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Stidham v. Wallace

Court of Appeals of Ohio, Twelfth District

June 24, 2013

WILLIAM M. STIDHAM, Treasurer, Madison County, Ohio, Plaintiff-Appellee,
v.
WILLIAM P. WALLACE, et al., Defendants-Appellants.

CIVIL APPEAL FROM MADISON COUNTY COURT OF COMMON PLEAS Case No. CVE 20110076

Stephen J. Pronai, Madison County Prosecuting Attorney, Kirsten J. Gross, for plaintiff-appellee.

William P. Wallace and Lori A. Wallace, defendants-appellants, pro se.

Harry J. Finke IV, for defendant-appellee, Citibank, N.A.

OPINION

RINGLAND, P.J.

{¶ 1} Defendants-appellants, William P. Wallace and Lori A. Wallace, appeal from an entry in the Madison County Court of Common Pleas ordering the distribution of proceeds in a foreclosure action to defendant-appellee, Citibank, N.A. For the reasons outlined below, we reverse the decision of the trial court and remand for further proceedings consistent with this opinion.

{¶ 2} The treasurer of Madison County, William M. Stidham, initiated a foreclosure action against the Wallaces following their failure to pay a sewage assessment on their residential property. In his complaint, the treasurer alleged that Citbank had an interest in the Wallaces' property by virtue of a mortgage. However, Citibank never answered or otherwise responded to the complaint.

{¶ 3} Following an award of summary judgment to the county treasurer, the Wallaces' property was sold at a sheriff's sale. On October 25, 2011, the trial court entered a judgment entry confirming the sale and ordering the distribution of certain proceeds. The trial court ordered that "[t]he remaining proceeds [were] to be held by the Clerk pending further order of the Court." The Wallaces appealed the foreclosure action, which this court ultimately upheld. Stidham v. Wallace, 12th Dist. No. CA2011-10-012, 2012-Ohio-3538. A release of Citibank's mortgage was filed on December 21, 2011.

{¶ 4} Citibank made its first appearance in this action on March 15, 2012, when it filed a "Motion for Distribution of Proceeds." Because the action was currently before this court at the time of its initial motion, Citibank renewed its motion on September 25, 2012. The trial court granted Citibank's motion without a hearing, and initially ordered $52, 301.66 to be distributed to Citibank. Because the amount ordered to be distributed was actually more than the amount on deposit at the Clerk of Courts, the trial court filed an amended entry ordering $49, 423.26 to be distributed to Citibank. The Wallaces now appeal, and assert a single assignment of error for review.

{¶ 5} Assignment of Error No. 1:

{¶ 6} THE TRIAL COURT ERRED TO THE PREJUDICE OF APPELLANTS BY GRANTING DEFENDANT-APPELLEE-IN-DEFAULT CITIBANK, N.A. PAYMENT OF RESIDUAL TAX FORECLOSURE SALE MONEYS, WHEN SUCH PARTY IS NOT ENTITLED TO SAME AS A MATTER OF LAW NOR EQUITY.

{¶ 7} The Wallaces assert three arguments within their assignment of error, which we will address in turn. First, the Wallaces argue a court acts outside of its jurisdiction by granting a motion for release of residual tax sale moneys to a properly served defendant when that defendant failed to answer. While we disagree with the Wallaces' contention that the trial court did not have jurisdiction to rule on the motion, we find that the trial court abused its discretion in awarding Citibank the remainder of the proceeds when the amount remaining on Citibank's mortgage was never established on the record.

{¶ 8} An action for foreclosure is in equity. Farmers Savings & Loan Co. v. Robison, 7th Dist. No. 75 C.A. 39, 1976 WL 188521, *4 (Feb. 11, 1976). The standard of review applicable to claims for equitable relief is abuse of discretion. Sandusky Properties v. Aveni, 15 Ohio St.3d 273, 274-275 (1984). An abuse of discretion connotes more than an error of law or judgment; rather, it implies that the court has acted either unreasonably, unconscionably, or arbitrarily. Blakemore v. Blakemore, 5 Ohio St.3d 217, 219 (1983). "A decision is unreasonable if there is no sound reasoning process that would support that decision." AAAA Enterprises, Inc. v. River Place Community Urban Redevelopment Corp., 50 Ohio St.3d 157, 161 (1990).

{¶ 9} "Foreclosure is an equitable proceeding and equitable action is required to undo the damage." Sharp v. Kuhn, 2d Dist. No. 78 CA 10, 1978 WL 216347, *4 (Oct. 4, 1978). "One of the chief characteristics of a court of equity is adequate power to afford full relief to all parties before it." Robison at *4, citing Brinkerhoff v. Smith, 57 Ohio St. 610. "[I]t is a well-settled rule of practice that in foreclosure actions claims may be brought in or filed up to the time of ...


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