WBCMT 2007-C33 Office 7870, LLC v. Breakwater Equity Partners, LLC, C-180127

• Citation: 133 N.E.3d 607,2019 Ohio 3935
• Decision Date: 27 September 2019
• Docket Number: NO. C-180127,C-180127
• Parties: WBCMT 2007-C33 OFFICE 7870, LLC, Plaintiff-Appellant, v. BREAKWATER EQUITY PARTNERS, LLC, Thompson National Properties, LLC, TNPPM Kemper Pointe, LLC, and Anthony W. Thompson, Defendants-Appellees.
• Court: United States Court of Appeals (Ohio)

133 N.E.3d 607

2019 Ohio 3935

WBCMT 2007-C33 OFFICE 7870, LLC, Plaintiff-Appellant,

v.BREAKWATER EQUITY PARTNERS, LLC, Thompson National Properties, LLC, TNPPM Kemper Pointe, LLC, and Anthony W. Thompson, Defendants-Appellees.

NO. C-180127

Court of Appeals of Ohio, First District, Hamilton County.

Date of Judgment Entry on Appeal: September 27, 2019

OPINION .

Bergeron, Judge.

{¶1} The genesis of this appeal begins with a seemingly-innocuous decision to seek leave to amend a complaint. The trial court obliged, setting off a cascade of subsequent events that might render this case a fixture in the lore of civil procedure professors for years to come.

{¶2} The decision to amend the complaint arose at an unusual juncture: after the plaintiff had secured a partial agreed judgment. We are called upon to decide whether orders preceding the amendment divested the trial court of its jurisdiction over this particular case and whether we must undo over three years of litigation—during which that jurisdiction was never questioned by anyone.

{¶3} Part of the problem here is that "jurisdiction" is a term of many stripes, and one that is oft-misunderstood based on its somewhat haphazard use. This case generated confusion between "jurisdiction over the case" and "subject matter jurisdiction," as the trial court essentially conflated the two concepts. But defects in the former are waivable, whereas defects in the latter are not. This case involves "jurisdiction over the case," and by sitting on their hands for three years, the defendants waived any objection to the trial court's jurisdiction over this case. We ultimately conclude that the trial court correctly allowed the amendment of the complaint and that even if that were erroneous, any jurisdictional defect has long since been waived. We accordingly reverse the decision to dismiss the case for lack of jurisdiction and remand this matter to the trial court.

I.

{¶4} Plaintiff-appellant WBCMT 2007-C33 Office 7870, LLC, ("WBCMT") initially filed a two-count lawsuit for breach of contract and foreclosure against 22 separate borrower entities ("Borrowers"), the Hamilton County Treasurer, and 100 John Doe defendants. In addition to the two counts, the complaint's prayer for relief sought "[j]udgment against Borrowers for all costs of collection of the debt, including but not limited to, interest, attorneys' fees, and other costs[.]" About six months later, in January of 2014, the matter was largely settled with a "Partial Agreed Judgment," which entered final judgment in favor of WBCMT and against the Borrowers on both counts of the complaint. It did not, however, finally determine the costs of collection or resolve the question of attorney fees. WBCMT sold the property at a sheriff's sale and went on to secure an "Entry Confirming Sale & Ordering Deed" ("Confirmation Order").

{¶5} Subsequent to the Partial Agreed Judgment, WBCMT sought leave to amend its complaint (without opposition) in mid-2014. The trial court entered the order granting leave and the Confirmation Order on the same day. The amended complaint substituted the Borrowers with Breakwater Equity Partners, LLC, ("Breakwater"); Thompson National Properties, LLC, ("TNP"); TNPPM Kemper Pointe, LLC, ("TNPPM"), and Anthony W. Thompson (president of TNP); and substituted conversion, fraudulent conveyance, and unjust-enrichment claims for the breach-of-contract and foreclosure claims. The latter three defendants have responded as appellees in this appeal, and we refer to them, collectively, as "the Thompson Defendants." According to WBCMT's allegations, the Borrowers had engaged TNP, by and through TNPPM, to manage their collateral real estate. TNP and TNPPM allegedly transferred significant sums generated from that real estate (also its collateral) to Breakwater (thereby stripping assets from which debt service payments could have been made), which WBCMT sought to recover via the amended complaint. But to the untrained eye, the amended complaint bears little, if any, resemblance to the original complaint, begging the question of why WBCMT opted for this path rather than simply commencing a new action.

{¶6} Although the procedure was novel, no one complained about the move. The Thompson Defendants simply got on with the business of litigating the case, and after the case lingered for a while, WBCMT moved for, and secured, summary judgment on the amended complaint. The Thompson Defendants appealed, but we dismissed that appeal by a Judgment Entry—noting that the judgment entered in favor of WBCMT on the amended complaint did not determine punitive damages, attorney fees, or certain indeterminate amounts payable under the loan documents. Therefore, we dismissed the appeal for lack of a final order.

{¶7} Back in the trial court, WBCMT sought to render the judgment final by filing a "Notice of Conditional Waiver of Claims" related to its summary judgment. But the matter was assigned to a new judge in June of 2017, and the judge never acted on that request. Instead, following its review of the case, the trial court sua sponte ordered briefing on its continuing jurisdiction over the case—raising numerous questions about the finality of the Partial Agreed Judgment; the finality of the Confirmation Order, the effect of such finality (if any) on the amended complaint and the trial court's continuing jurisdiction; and the effect of the amended complaint (if valid) on prior orders of the trial court. After briefing and argument, the trial court concluded that it never had jurisdiction over the amended complaint because the Partial Agreed Judgment and Confirmation Order were final, appealable orders. It correspondingly vacated all orders and entries related to the amended complaint and dismissed the amended complaint without prejudice. With the stroke of a pen, the court erased three years of litigation. WBCMT now appeals the trial court's judgment.

{¶8} We pause, before proceeding with the analysis, to highlight the jurisdictional concepts that animate this appeal. While the term "jurisdiction" is frequently used in a generic sense, it refers more precisely to three, distinct concepts: "jurisdiction over the subject matter, jurisdiction over the person, and jurisdiction over a particular case." Bank of Am., N.A. v. Kuchta , 141 Ohio St.3d 75, 2014-Ohio-4275, 21 N.E.3d 1040, ¶ 18. Subject-matter jurisdiction is power conferred, by the Constitution and other law, on the court over a particular type of case. Id. at ¶ 20. Subject-matter jurisdiction requires no "regard to the rights of the individual parties involved in a particular case." Id. at ¶ 19.

{¶9} Jurisdiction over a particular case (also referred to as "jurisdiction over the case"), by contrast, connotes "the court's authority to proceed or rule on a case that is within the court's subject-matter jurisdiction." Id. , citing Pratts v. Hurley , 102 Ohio St.3d 81, 2004-Ohio-1980, 806 N.E.2d 992, ¶ 12. Put differently, "an inquiry into a party's ability to invoke a court's jurisdiction speaks to jurisdiction over a particular case, not subject-matter jurisdiction." (Emphasis sic.) Id. at ¶ 22. Errors in that invocation "cause[ ] a judgment to be voidable rather than void." Id. at ¶ 19, citing Pratts at ¶ 12.

{¶10} The third strand, personal jurisdiction, refers to the principle that the "Due Process Clause of the Fourteenth Amendment to the United States Constitution requires that a valid judgment imposing a personal obligation or duty in favor of the plaintiff may be entered only by a court having jurisdiction over the person of the defendant." Meadows v. Meadows , 73 Ohio App.3d 316, 319, 596 N.E.2d 1146 (3d Dist. 1992), citing Pennoyer v. Neff , 95 U.S. 714, 24 L.Ed. 565 (1877), and Internatl. Shoe Co. v. Washington , 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). Generally, Ohio courts have personal jurisdiction over Ohio residents. Prouse, Dash & Crouch, L.L.P. v. DiMarco , 116 Ohio St.3d 167, 2007-Ohio-5753, 876 N.E.2d 1226, ¶ 5. A court's personal jurisdiction over a nonresident requires a more complex inquiry concerning the applicable long-arm statute, the civil rules, and/or relevant due-process considerations.

{¶11} Although the lines were blurred somewhat below, and to a certain extent on appeal, the parties all now agree the asserted defect that we consider today relates to jurisdiction over a particular case. That version of jurisdiction, however, has generated perhaps the least case law, so we must consider authority proffered on all three types of jurisdiction as we navigate the arguments of the parties and the decision of the trial court below. While analogies may be appropriate in certain respects, it is crucial to maintain appropriate distinctions between these legal concepts in considering this appeal, lest we fall into the same trap about which we have warned.

II.

{¶12} The jurisdictional questions raised by the trial court are rooted in the premise that the trial court lacked jurisdiction to grant the motion to amend the complaint, matters we review de novo. A threshold issue then, it seems to us, is whether Civ.R. 15 permitted WBCMT's amended complaint. Without controlling authority on this particular application of Civ.R. 15, we turn as a guide to general case law applying Civ.R. 15 in part A of this opinion. From there, in part B, we proceed to discuss the jurisdictional questions implicated by the amended complaint. We assess whether—regardless of propriety under Civ.R. 15 —certain orders below divested the trial court of its continuing jurisdiction over the amended complaint (implicating WBCMT's second, third, and fourth assignments of error). Finally, in part C, we consider whether the assertion of jurisdiction over this particular case, if error, could have been waived and whether the trial court could have raised it sua sponte—encompassing WBCMT's first assignment of error.

A.

{¶13} Under Civ.R. 15(A), regarding amendments other than those as a matter of...