Lasalle Bank Nat'l Ass'n v. Brown
| Decision Date | 25 July 2014 |
| Docket Number | No. 25822.,25822. |
| Citation | 17 N.E.3d 81 |
| Parties | LASALLE BANK NATIONAL ASSOCIATION, Plaintiff–Appellee v. Charles BROWN, et al., Defendant–Appellant. |
| Court | Ohio Court of Appeals |
Jason A. Whitacre and Ashley E. Mueller, Stow, OH, for Plaintiff–Appellee.
Andrew M. Engel, Centerville, OH, for Defendant–Appellant Tina DiGiorgio.
{¶ 1} Appellant, Tina DiGiorgio, appeals from a trial court decision overruling her motion to vacate. In the motion, DiGiorgio asked the trial court to vacate an entry confirming her purchase of real property located at 5031 Heather Way, Huber Heights, Ohio.
{¶ 2} DiGiorgio contends that the trial court erred in overruling the motion to vacate, because she had standing to challenge the validity of the court's prior judgment of foreclosure. DiGiorgio also contends that her challenge to the foreclosure judgment and sale were not barred by caveat emptor. Finally, DiGiorgio contends that the Plaintiff–Appellee, LaSalle Bank National Association, as Trustee for the Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset Backed Certificate, Series 2006–FF1 (“LaSalle”) lacked standing to sue.
{¶ 3} We conclude that the trial court did not err in overruling the motion to vacate. DiGiorgio lacks standing to appeal the decision on the motion to vacate, because she failed to file a motion to intervene in the trial court pursuant to Civ.R. 24(C). Furthermore, DiGiorgio cannot collaterally attack the foreclosure judgment as a nonparty because the bank that originally filed the action had standing to sue. The bank was the owner of the note and mortgage, and was entitled to enforce the note as a nonholder in possession of the instrument. Even if DiGiorgio has standing to appeal, her claim is barred by caveat emptor, as any defects in title or in the court proceedings were of public record and could have been discovered prior to the judicial sale. Finally, assuming for purposes of argument that the bank lacked standing when the foreclosure action was initially filed, the judgment would be only voidable, not void. However, DiGiorgio did not file a motion to intervene, nor did she file a motion to set the judgment aside under Civ.R. 60(B). Accordingly, the judgment of the trial court will be affirmed.
{¶ 4} In July 2008, LaSalle filed the underlying action in foreclosure against Charles and Rosalie Brown (“the Browns”), and others, alleging that LaSalle was owed $156,746.51 on a promissory note that was in default. LaSalle stated that it currently could not find the note in its file. However, LaSalle did attach a copy of a mortgage for the premises at 5031 Heather Way, Huber Heights, Ohio. The mortgage was dated November 21, 2003, and granted the Lender, First Financial Corporation (“First Financial”), a security interest in the Heather Way property. The mortgage also referred to the promissory note that the Browns had signed the same day.
{¶ 5} In October 2008, the Browns filed a motion to dismiss, or in the alternative for a more definite statement, based on the fact that the note was not attached to the complaint. In response, LaSalle filed several documents, including an assignment of the note and mortgage from First Financial to LaSalle. The assignment was executed on September 21, 2008, and had been sent to the Montgomery County Recorder's Office to be recorded. LaSalle also included copies of the Browns' loan account history and a copy of the adjustable rate note that the Browns had signed.
{¶ 6} On October 31, 2008, the trial court concluded that LaSalle had fulfilled its obligations under Civ.R. 10(D), and overruled the motion to dismiss. Subsequently, in November 2008, the Browns filed an answer, a counterclaim against LaSalle for alleged damage to the property, and a cross-claim against First Financial. In their answer, the Browns raised standing and the lack of a real party in interest as a defense. See Doc. # 51, p. 3.
{¶ 7} In February 2010, LaSalle filed a motion for summary judgment. Attached to the motion was the affidavit of Michael Brandi, a loan services specialist with Home Loan Services, Inc., the duly authorized mortgage loan servicing agent for LaSalle and for the Browns' account. In the affidavit, Brandi stated, based on personal knowledge and access to the business records for the account, that, when the suit was filed, LaSalle was the owner and holder of the promissory note and corresponding mortgage executed by Charles Brown. Brandi also attached copies of the note and mortgage to his affidavit. The Browns did not respond to the motion for summary judgment, nor did they, thereafter, challenge the content of the affidavit.
{¶ 8} The Browns subsequently dismissed their counterclaim with prejudice on August 11, 2010. In addition, they voluntarily dismissed their cross-claim. Then, on August 23, 2010, the Browns, First Franklin, and LaSalle filed a document entitled “Consent Entry, Decree of Foreclosure and Order of Sale with Waiver of Deficiency.” See Doc. # 93. In the Consent Entry, the parties consented to the following:
(a) a default of obligations under promissory note (“Note”) dated November 21, 2003 payable by Charles Brown; (b) foreclose the lien of Mortgage of the same date securing the Note obligations with the real estate described below (the “Property”); and (c) require that all parties set forth their claims to the Property or be barred. Doc. # 93, p. 1.
{¶ 9} The agreed entry also stated that:
The Court finds that all necessary parties have been properly served and are before the Court. The Court finds that Plaintiff filed its Complaint against the Browns in their capacity as obligors on the Note as the Property mortgagors, and against the remaining Defendants as persons with possible interests in the Property. Upon consideration thereof, the Court finds no genuine issue as to any material fact and finds that Plaintiff is entitled to a Judgment Entry, Decree of Foreclosure and Order of Sale. (Emphasis sic.). Id. at p. 1.
{¶ 10} The court, therefore, ordered that the amount owed to LaSalle under the note was $156,746.51, plus interest at a rate of 10.25% per year from June 1, 2007, and that the note was secured by the mortgage held by LaSalle. The court further found that the conditions of the mortgage were broken, and that LaSalle was entitled to have the equity of redemption foreclosed. In addition, the court stated that if the sums owed were not fully paid within three days, the equity of redemption would be foreclosed, and an order of sale to the sheriff would issue. Finally, the court ordered that after sale, and upon confirmation, the assets would be distributed, first, for payment of court costs and second, for unpaid taxes and assessments. The balance, if any, would be given to LaSalle for payment of the $156,746.51, plus interest that was owed. The Browns did not pay the amounts owed within three days, and no appeal was taken from the foreclosure order.
{¶ 11} Sheriff's sales were scheduled several times and were cancelled at LaSalle's request. In November 2012, the property was sold at public auction to Tina DiGiorgio for the sum of $164,000, and a judgment entry was filed in December 2012, confirming the sale and ordering distribution. At that time, the court ordered the sheriff to convey the deed and a writ of possession to DiGiorgio, and cancelled the mortgages on the property. No appeal was taken from the order confirming the sale. A writ of restitution was then granted to DiGiorgio in January 2013.
{¶ 12} In February 2013, a motion for permission to intervene was filed by Charles and Brandi Stoll, who claimed they had been tenants at 5031 Heather Way since April 2012, pursuant to a rental agreement with Charles Brown. The Stolls attached a rental agreement, indicating that Brown had been renting the premises to them on a month-to-month basis since April 2012, for $1,000 per month. The trial court overruled the motion to intervene in February 2013.
{¶ 13} In May 2013, which was more than six months after the sheriff's sale, DiGiorgio filed a motion to vacate the entry confirming the sale. After the trial court overruled the motion to vacate, DiGiorgio appealed from the order overruling her motion.
{¶ 14} DiGiorgio's sole assignment of error states that:
The Trial Court Erred in Denying Appellant's Motion to Vacate Judgment.
{¶ 15} Under this assignment of error, DiGiorgio raises three major points. We will address each point separately.
{¶ 16} DiGiorgio's first argument is that she had standing to challenge the validity of the consent entry ordering foreclosure. This entry was filed in August 2010, almost three years before DiGiorgio filed the motion to vacate.
{¶ 17} The trial court concluded that DiGiorgio lacked standing because she was not a party to the action and was not a real party in interest to the foreclosure. In this regard, the trial court noted that DiGiorgio had purchased the property at a sheriff's sale, and her interest was limited to the property and possession of such, but did not extend to the foreclosure action. In contrast, DiGiorgio argues that even if she is a stranger to the action, she can collaterally attack a judgment that was entered without jurisdiction. In responding to DiGiorgio's arguments, LaSalle first contends that DiGiorgio lacks standing to appeal because she failed to file a motion to intervene in the underlying action.
{¶ 18} Civ.R. 24(C) outlines procedures to be followed by persons who wish to intervene in actions, and provides that:
A person desiring to intervene shall serve a motion to intervene upon the parties as provided in Civ.R. 5. The motion and any supporting memorandum shall state the grounds for intervention and shall be accompanied by a pleading, as defined in Civ.R. 7(A), setting forth the claim or defense for which...
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