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Multibank 2009-1CML-ADC Venture LLC v. South Bass Island Resort, Ltd.

Court of Appeals of Ohio, Sixth District, Ottawa

January 12, 2018

Multibank 2009-1CML-ADC Venture LLC (fka Columbian Bank & Trust Co.) Appellee
v.
South Bass Island Resort, Ltd., et al. Appellants

         Trial Court No. 2008 CV 0479

          F. Maximilian Czernin, Martha S. Sullivan, Stephanie E. Niehaus, and Eleanor M. Hagan, for appellee.

          D. Jeffery Rengel and Thomas R. Lucas, for appellants.

          DECISION AND JUDGMENT

          PIETRYKOWSKI, J.

         {¶ 1} This is an appeal from the judgment of the Ottawa County Court of Common Pleas, granting appellee's, Multibank 2009-1CML-ADC Venture LLC (fka Columbian Bank & Trust Co.), motion for summary judgment on its complaint in foreclosure against appellants, South Bass Island Resort, Ltd. ("SBIR"), Cecil Weatherspoon, Terry L. Ross, John C. Tomberlin, and 250 Centre, Ltd. For the reasons that follow, we affirm.

         I. Facts and Procedural Background

         {¶ 2} This litigation stems from a 2006 loan agreement between appellee and appellants whereby appellee was to loan SBIR up to $8, 600, 000 for the development of real property. As a condition of the loan, and in addition to the mortgage on the property, Weatherspoon, Tomberlin, and 250 Centre, Ltd. executed separate cognovit unconditional guarantees of the loan. Weatherspoon also executed, as collateral, an assignment of an insurance policy. It is undisputed that appellants have not made any payments on the loan.

         {¶ 3} On August 15, 2008, appellee filed its complaint in foreclosure against appellants in the present action. At the same time, appellee also filed a complaint for judgment on the note in a companion case in Erie County (the "Erie County case").

         {¶ 4} On January 13, 2012, appellee moved for summary judgment in this foreclosure action.[1] In support of its motion, appellee relied on the November 22, 2011 judgment in the Erie County case finding that appellee owned the note and that appellants defaulted on the note, and entering judgment against appellants in the amount of $7, 849, 093.30 plus interest, payment of taxes, assessments and insurance, and costs. In particular, appellee argued that the Erie County judgment collaterally estopped appellants from re-litigating the issue of liability under the note. Appellee further argued that it had satisfied all pertinent requirements, and was entitled to an order of foreclosure.

         {¶ 5} In response, appellants argued that the Erie County judgment was not yet final because there remained an issue for trial regarding the validity of Tomberlin's guaranty, and because appellants intended to appeal the Erie County judgment. Thus, appellants claimed that appellee could not rely on the Erie County judgment to establish its right to foreclosure.

         {¶ 6} On January 22, 2013, the trial court granted appellee's motion for summary judgment. That decision was appealed to this court, and in Multibank 2009-1 CML-ADC Venture, LLC v. South Bass Island Resort, Ltd., 6th Dist. Ottawa No. OT-13-004, 2014-Ohio-4513, we reversed. In our decision, we agreed with appellants that the Erie County judgment was not a final judgment entitled to preclusive effect. Id. at ¶ 33. Thus, we were required to determine whether summary judgment was properly granted solely upon consideration of the evidence submitted in support of appellee's motion. Upon such consideration, we held that the evidence was insufficient to support summary judgment in that the affidavit submitted by appellee failed to state that SBIR was in default or that appellee had complied with all conditions precedent for foreclosure. Id. at ¶ 45. Accordingly, we remanded the matter to the trial court for further proceedings.

         {¶ 7} On November 20, 2015, appellee renewed its motion for summary judgment. In its renewed motion, appellee stated that the Erie County judgment had now become final, in that the remaining issue concerning Tomberlin's guaranty had been resolved by an April 21, 2014 judgment entry finding Tomberlin liable on the loan as a guarantor. Further, appellee submitted affidavits indicating that appellants were in default of the loan and mortgage, and that all conditions precedent to foreclosure had been satisfied. Therefore, appellee again requested summary judgment in its favor on its complaint in foreclosure.

         {¶ 8} Appellants, in response, opposed appellee's renewed motion for summary judgment, and moved for summary judgment in their favor on appellee's claims. In particular, appellants argued that appellee failed to seek leave of court before filing its third motion for summary judgment, and thus the motion must be denied. Alternatively, appellants argued for the first time that appellee was prohibited by the doctrines of res judicata and merger and bar from prosecuting its foreclosure action because appellee had already chosen to litigate liability under the note in Erie County. Appellants asserted that because the breach of the loan agreement and foreclosure of the mortgage involved the same parties and the same transaction, the principles of res judicata required that appellee litigate its claims for liability under the note and for foreclosure at the same time.

         {¶ 9} On January 12, 2017, the trial court entered its judgment granting appellee's motion for summary judgment, and denying ...


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