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Hurricane Development, L.L.C. v. Fourtounis

Court of Appeals of Ohio, Eighth District, Cuyahoga

March 16, 2017


         Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-13-818722.

          ATTORNEYS FOR APPELLANT David S. Anthony Joseph Grandinetti Anthony & Zomoida L.L.C.

          ATTORNEYS FOR APPELLEE John M. Manos John M. Manos Co., L.P.A., Melany A. Fontanazza Kimberly Y. Smith Rivera McGlinchey Stafford, P.L.L.C., Hunter G. Cavell Crosscountry Mortgage, Inc.

          BEFORE: Kilbane, J., Keough, A.J., and Celebrezze, J.



         {¶1} Defendant-appellant, Eugenia Fourtounis ("Eugenia"), appeals from the trial court's judgment sustaining plaintiff-appellee's, Hurricane Development, L.L.C. ("Hurricane"), objections to the magistrate's decision and granting quiet title of the subject property to Hurricane. For the reasons set forth below, we reverse and remand for a new trial.

         {¶2} At issue in the instant case is whether Eugenia executed a deed in favor of Hurricane that transferred her interest in the subject property located at 2693 W. 14th Street in Cleveland, Ohio. Hurricane contends that Eugenia did transfer her interest by executing a deed, which prompted Hurricane to file a complaint for quiet title, slander of title, and unjust enrichment against Eugenia in December 2013.[1]

         {¶3} Hurricane is an Ohio limited liability company owned by Nikolas and Marika Fourtounis (Eugenia's former in-laws). Hurricane was created to operate the rental properties Nikolas and Marika own on W. 14th Street. Over the course of 30 years, Nikolas and Marika purchased a total of three parcels of property on W. 14th Street. The rental property at issue was purchased by Hurricane in May 2001. Nikolas and Marika used attorney Tom Karris ("Karris") to assist with their legal affairs and real estate transfers.

         {¶4} Nikolas and Marika's son, Mark Fourtounis ("Mark"), married Eugenia in March 1999, and they divorced in February 2012.[2] Mark helped his parents with the rental properties when they needed a loan to make improvements to the properties. In December 2004, Hurricane quit-claimed the subject property to Mark personally. Mark had applied for a loan on the property, but was initially denied because he was married to Eugenia at the time. As a result, Mark transferred the property to both himself and Eugenia on February 2, 2005, and they jointly applied and received a loan from IndyMac Bank in the amount of $159, 500.

         {¶5} Hurricane claims that Mark and Eugenia executed a quitclaim deed conveying the subject property to it in June 2005. Since then, Hurricane contends that it has paid the property tax bill for the subject property. In August 2013, Hurricane attempted to obtain financing using the subject property as collateral, but discovered that the Cuyahoga County Recorder's Office had not recorded the June 2005 quitclaim deed. Hurricane's unsuccessful attempts to have Eugenia transfer her interest in the subject property prompted Hurricane to file a lawsuit against Eugenia.

         {¶6} In its complaint, Hurricane alleges the following three causes of action: quiet title, unjust enrichment, and slander of title. Hurricane moved for summary judgment in December 2015, which was denied by the court. In April 2016, Hurricane moved and the trial court granted Hurricane's motion to dismiss its slander of title cause of action. A trial on the remaining causes of action was held before a magistrate on April 29, 2015. The following pertinent evidence was adduced at trial.

         {¶7} Eugenia testified that when they were married, Mark told her that they were the owners of Hurricane, which was their rental property business for properties on W. 14th Street. She and Mark would take out loans to repair the properties. She also testified that Nikolas would bring them monthly rent payments from the properties. She further testified that Mark would bring her documents all the time to sign, and she would sign them because he was her husband, he handled the business, and she trusted him.

         {¶8} With respect to the subject property, Eugenia denies that she ever signed a deed transferring the subject property to Hurricane. She remembers signing the deed transferring the subject property into her and Mark's name and the loan documents for the subject property at home, and not at Karris's office, because in their culture it was custom for the mother to stay home for 40 days after a baby was born, and their daughter was born on January 12, 2005, which was less than 40 days from February 2, 2005. Eugenia further testified that the witness whose signature was on the documents, Elizabeth Feliciano ("Feliciano"), was not present when she signed the loan documents, nor was she present for any other document she signed. Feliciano was Karris's employee. Karris was not present either to notarize the signatures even though he notarized her signature. She stated that she had been to Karris's office on only one occasion, which related to a will for Mark's parents.

         {¶9} Eugenia further testified that Mark prepared all of their tax returns as well as the tax returns for Hurricane while they were married, and Eugenia never spoke to any accountant or participated in the preparation of any of the tax returns. Eugenia does not have any knowledge of what Mark prepared for their taxes relating to the subject property because Mark solely handled these matters.

         {¶10} Mark stated that Eugenia signed the loan paperwork for the subject property at Karris's office. He testified that the IndyMac loan officer, Karris, and Feliciano were all present at closing. Mark testified that Eugenia did sign the deed transferring the subject property back to Hurricane, and he believed it was in Karris's possession. Mark routinely transferred property between himself and Hurricane so that he could obtain loans in his and Eugenia's names and use the proceeds on behalf of Hurricane.

         {¶11} In June 2010, Mark and Eugenia filed for bankruptcy. The petition did not list the subject property as an asset belonging to Mark and Eugenia. Mark handled all of the paperwork, and Eugenia did not know that this property was titled in her name at the time of the bankruptcy. Additionally, their divorce proceedings were concluded without a determination as to who owned the property. Eugenia testified that she did not get ownership interest in any of the W. 14th Street properties in the divorce because she had no papers or anything in her name.

         {¶12} Karris testified that all loan documents and deeds were signed and notarized in his office. Karris was disciplined by the Ohio Supreme Court in 2011 for notarizing signatures of persons who did not sign deeds and other documents in front of him during this same period of time, and the Ohio Supreme Court suspended his law license for six months. According to Karris, his procedure for filing deeds differed based upon whether the person for whom the deed was prepared was a client of his title company or a client of his law practice because he owned both a law practice and a title agency.

         {¶13} If a deed was recorded for the title company clients, Karris would have an examiner personally take the documents to the county auditor and walk them through for filing. If the deed was prepared for a client of his law practice, in most instances the deed would be mailed to the county auditor with instructions to forward the deed to the recorder for recording. He would also request that the recorded document be returned by mail to Karris. It was his custom and practice to make copies of all the deeds he sent to the auditor. It was further his custom and practice to keep a copy of the original deed when it was returned from the auditor. With respect to the subject property, Karris testified that he did not have a recorded or unrecorded copy of the deed transferring interest to Hurricane. It was further Karris's custom and practice to write a check for the deed recording fee. No evidence was produced at trial, however, demonstrating that the filing fee was ever paid or tendered. Karris discovered that there was no copy of the deed in his file, and no deed was ever recorded for the subject property after Mark and Eugenia's divorce was finalized.

         {¶14} When Karris attempted to locate the deed, he was told by someone at the recorder's office that "it was not there." The recorder did not have a copy of any deed transferring ownership of the ...

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