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City of Cleveland v. Bank of New York Mellon

Court of Appeals of Ohio, Eighth District

July 18, 2013


Criminal Appeal from the Cleveland Municipal Court Case No. 2012 CRB 003045.

ATTORNEYS FOR APPELLANT Jason A. Whitacre Ashley E. Mueller The Law Offices of John D. Clunk, Co., L.P.A.

ATTORNEYS FOR APPELLEE Barbara A. Langhenry Director of Law City of Cleveland By: William H. Armstrong, Jr. Assistant Director of Law.

BEFORE: McCormack, J., Jones, P.J., and S. Gallagher, J.



{¶l} This case came to be heard upon the accelerated calendar pursuant to App.R. 11.1 and Loc.R. 11.1. Bank of New York Mellon (hereafter "BONY") appeals from a judgment of the Cleveland Municipal Court that imposed financial sanctions of $45, 000 after the court found the bank in contempt for failing to appear in court at two scheduled hearings. For the following reasons, we affirm the judgment of the trial court.

Substantive Facts and Procedural History

{¶ 2} BONY was a successful bidder for a property at a sheriffs sale that was held after a foreclosure action was filed against the property's former owner. After the sale, on January 19, 2012, the sheriff recorded the deed and provided the deed to the Law Offices of John D. Clunk Co., L.P.A. (the law firm that represented BONY at the proceedings below and also in this appeal). The law firm forwarded the deed to BONY on February 3, 2012.

{¶3} In between these dates, on January 23, 2012, the city sent its agent to inspect the property, and the agent cited BONY for a violation of Section 209.01(a)(3) of Cleveland Codified Ordinances, a minor misdemeanor offense, for failing to "abate the nuisance of refuse and/or junk, garbage and food waste, offal, animal wastes, tires, or other waste" in the area of the property's garage. Summons of the complaint was sent to BONY on February 13, 2012, ordering BONY to appear in court on February 29, 2012.

{¶ 4} BONY did not appear at the hearing. Subsequently, the trial court placed the case on its Corporation Docket and, on March 23, 2012, sent a judgment entry to BONY, ordering its representative to appear in court on May 7, 2012. The court sent this notice to BONY's address of record, and it also sent courtesy copies of the notice to various organizations and individuals in Cleveland and New York, whom the court through its own investigation, had determined to be BONY's officers or representatives. The notice was also sent to Attorney Keith Anderson, who had represented the bank on other matters in the court.

{¶ 5} Despite the notices, BONY failed to appear at the May 7, 2012 hearing. As a result, on May 18, 2012, the court ordered BONY to appear on July 2, 2012, to show cause why it should not be held in contempt of the court.

{¶ 6} BONY again failed to appear at the July 2 show cause hearing. On that day, the court entered a judgment finding BONY in civil contempt of the court's order to appear. In its judgment, the court ordered a fine of $1, 000, imposed per day until the time when the defendant made an appearance and entered a plea. The court then set the matter for a status hearing on October 1, 2012.

{¶ 7} On October 1, 2012, an attorney from the Law Offices of John D. Clunk filed a notice of appearance and appeared at the scheduled hearing on behalf of BONY. At this hearing, BONY entered a plea of not guilty, and the court granted its request to have the matter continued for a court-supervised pretrial hearing. At the pretrial hearing, the city dismissed its complaint.

{¶8} Subsequently, on October 31, 2012, BONY filed a Motion to Mitigate Sanctions. The reasons it gave for a mitigation of the financial sanctions were: (1) BONY was not aware that it had legal title to the subject property on the day of the alleged violation, and (2) BONY had already mitigated the damages by cleaning up the property. BONY explained that, in a sheriffs sale, the successful bidder would not know when the sheriffs office would process the deed after the sale, or when the deed would be recorded, and therefore, BONY did not have actual knowledge that the deed had been recorded on January 19, 2012, and thus cannot have knowingly violated the municipal ordinance on the day of the citation, January 23, 2012.

{¶ 9} BONY also argued that the sanctions to compel its presence in court were "unnecessary" because it had been working with a land bank to donate the property to the organization — an agreement was reached on September 21, 2012, and the property was officially transferred on October 12, 2012.

{¶ 10} The trial court considered several mitigating factors and granted BONY's motion to mitigate sanctions in part. It reduced the $90, 000 fines that had accrued between July 3, 2012 and September 30, ...

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