Park Natl. Bank v. Chauvin, 2006 Ohio 5158 (Ohio App. 10/2/2006)
| Decision Date | 02 October 2006 |
| Docket Number | No. 14-05-12.,14-05-12. |
| Citation | 2006 Ohio 5158 |
| Parties | The Park National Bank, Plaintiff-Appellee, v. Shane T. Chauvin, et al., Defendants-Appellees. and Countrywide Home Loans, Inc., Defendant-Appellant. |
| Court | Ohio Court of Appeals |
Karl H. Schneider, Reg. #0012881, Janice e. Casanova, Reg. #0075565, Attorneys at Law, 250 Civic Center Drive, Suite 200, Columbus, Ohio 43215, for Appellant.
Douglas L. Lutz, Reg. #0064761, Matthew C. Blickensderfer, Reg. #0071209, Attorneys at Law, 2200 PNC Center, 201 East Fifth Street, for Appellee, GE Commercial Financial,
Polly J. Harris, Attorney at Law, Reg. #0029433, 41 South High Street, Suite 3100, Columbus, Ohio 43215, for Appellee, Park National Bank.
{¶1} The instant dispute arises from a foreclosure action initiated by The Park National Bank ("Park National") against defendants Shane and Lorri Chauvin. This appeal involves a dispute between two creditors who also claim an interest in the Chauvins' properties: appellant Countrywide Home Loans, Inc. ("Countrywide") and appellee GE Commercial Finance ("GE"). Countrywide appeals the March 21, 2005 judgment of the Court of Common Pleas, Union County, Ohio, in which the trial court found that Countrywide did not have an interest in the properties.
{¶2} There are two properties at issue in the foreclosure action: a residence located at 12684 Taylor Road, Plain City, Ohio and a parcel of commercial property located at 1200-1202 Columbus Avenue, Marysville, Ohio. Both Countrywide and GE were named as defendants in the foreclosure action because they could claim an interest in one or both of the properties.
{¶3} Countrywide filed an answer and counter-claim to the foreclosure complaint asserting an interest in the residence due to a mortgage recorded on May 23, 2003; Countrywide attached a copy of the promissory note and the mortgage to the answer and counterclaim pursuant to Civ.R. 10(D).1 Countrywide asserted that this interest was superior to all other claimed interests except a lien on behalf of the county treasurer for property taxes due. Additionally, Countrywide asserted a cross-claim in this pleading against the Chauvins asserting a default on the mortgage and seeking foreclosure of the residential property. The Chauvins then filed an answer to the counter-claim, in which they admitted the essential allegations made in the cross-claim; the Chauvins admitted the existence and amount of the note and the mortgage, that the mortgage had been recorded in the Union County Records, and that they were in default on the mortgage.
{¶4} GE also filed an answer to Park National's complaint claiming an interest in the properties. GE's interest arose pursuant to an assignment from KeyBank, which had an interest due to a Certificate of Judgment against the Chauvins filed in the Court of Common Pleas, Union County, Ohio on March 18, 2004. In this answer, GE sought a "determination that [GE] has a first-priority interest in all monies, payments, equity or other interests received from any sale of the subject Residence and Commercial Property * * *." However, GE did not attach to its answer any documentary materials required to establish this interest as required by Civ.R. 10(D).
{¶5} Thereafter, attorney Frank Howard filed a Certificate of Title with the trial court. The Certificate of Title described the two properties, noted that the Chauvins had good and marketable title to the properties, and reported that the properties were subject to several liens and encumbrances. The attorney certifying title found that upon an examination in the Union County Records, the mortgage to Countrywide for $581,000.00 was first in priority after real estate taxes owed and was recorded on May 23, 2003 in Official Record 450, page 340 of the Union County Records. For purposes of this appeal, the next relevant interest was a mortgage to Park National for $565,000.00 recorded on September 2, 2003 in Official Record 484, page 621. This was followed by an interest on behalf of Keybank as a judgment creditor for $254,168.66 and $8,820.00—the interest that was allegedly assigned to GE. Finally, Park National also held an interest as a judgment creditor for $554,505.78 from a judgment filed on May 19, 2004 in Union County.
{¶6} A bench trial was held on December 20, 2004, where the parties agreed that there were no legal or factual issues concerning Park National's ability to foreclose, and counsel for Park National proposed a judgment entry based upon the priorities established in the previously filed Certification of Title. However, GE objected to this proposed entry, and for the first time disclosed a document they had discovered during their own title search, which purported to be a certified copy of a satisfaction of the Countrywide mortgage. The document listed the parcel in question as having the exact same parcel number as that listed for the residential property, and the property description matched the property description in the Countrywide mortgage. Counsel for GE submitted this document stating, Later during the proceeding, after Countrywide's counsel had an opportunity to examine the document, he pointed out to the trial court that the mortgage satisfaction applied to a previous mortgage held on the property, a different instrument than the mortgage under which Countrywide was asserting their first priority interest. The satisfaction released a mortgage dated December 2001; the mortgage Countrywide was asserting its interest under was from May 2003.
{¶7} The trial court admitted the document over Countrywide's objection. The court then found in favor of Park National on the foreclosure issue and ordered the sale of the properties. However, the court did not make a decision on the marshalling issue due to the confusion surrounding the satisfaction, and instead ordered counsel for Countrywide and GE to submit briefs.
{¶8} Rather than brief the marshalling issue, however, GE's post-trial brief asserted that Countrywide had failed to produce any testimonial or documentary evidence at trial demonstrating the existence of their interest in the residential property. Indeed, the trial transcript indicates that Countrywide called no witnesses or submitted any exhibits during the bench trial. Accordingly, the trial court issued a judgment entry finding that Countrywide had failed to demonstrate an interest in the property, and granted priority first to the county treasurer, second to Park National, and third to GE. Countrywide now appeals that judgment, asserting two assignments of error:
The trial court abused its discretion in allowing irrelevant and confusing evidence to be admitted at trial.
The trial court erred when it failed to find that appellant had first priority on the mortgage of the residential real property.
{¶9} In its first assignment of error, Countrywide argues that the trial court erred in permitting GE to admit the "satisfaction of mortgage" into evidence. Countrywide first argues that the evidence was not relevant to the issues in the case, and therefore was inadmissible pursuant to Evid.R. 402. Additionally, Countrywide argues that even if the evidence was relevant, it should have been excluded under Evid.R. 403(A) because of its prejudicial effect.
{¶10} First, it is clear that the satisfaction of mortgage was entirely relevant to the issues before the court. Evidence is relevant if it has "any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." Evid.R. 401. Both Countrywide and GE asserted in their pleadings that they held a first priority interest in the Chauvins' properties. Moreover, the Chauvins had raised a marshalling claim in their answer to Park National's complaint. Accordingly, the issue of priority was squarely before the court in the trial proceedings. Therefore, any fact pertaining to the question of whether or not Countrywide's asserted interest had been previously satisfied was a relevant issue before the court. The satisfaction of mortgage certainly had a tendency to make this fact more or less probable, and therefore it was relevant evidence.
{¶11} Second, the trial court did not abuse its discretion in admitting this relevant evidence. "The admission or exclusion of relevant evidence is within the sound discretion of the trial court." State v. Sage (1987), 31 Ohio St.3d 173, ¶2 of the syllabus, 510 N.E.3d 343. Pursuant to Evid.R. 403(A), otherwise relevant evidence must be excluded if its probative value is outweighed by the danger of unfair prejudice or confusion of the issues.
{¶12} In the instant case, there is no evidence that the satisfaction of mortgage was unfairly prejudicial or confused the issues before the trial court. The document presented the issue of whether Countrywide's asserted interest had been satisfied; this issue is directly related to whether or not Countrywide could claim a first priority interest in the property. Countrywide was free to rebut the evidence and affirmatively establish that its interest was still valid. Indeed, Countrywide's counsel demonstrated to the trial court that the mortgage satisfaction related to a previous mortgage dated ...
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