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Villas at East Pointe Condominium Association v. Strawser

Court of Appeals of Ohio, Tenth District

September 3, 2019

Villas at East Pointe Condominium Association, Plaintiff-Appellee,
v.
Melissa L. Strawser et al., Defendants-Appellees, Carrington Mortgage Services, LLC, Defendant-Appellant.

          APPEAL from the Franklin County Court of Common Pleas No. 16CV-222

         On brief:

          Graydon, Head & Ritchey LLP, and Kara A. Czanik, for appellant.

         Argued:

          Jeffrey M. Hendricks.

          DECISION

          BEATTY BLUNT, J.

         {¶ 1} Defendant-appellant Carrington Mortgage Services, LLC ("Carrington") appeals from a decision of the Franklin County Court of Common Pleas denying Carrington's motion for distribution of sale proceeds. Because we determine the trial court erred in failing to consider whether to exercise its inherent discretion, we reverse and remand.

         I. BACKGROUND

         {2} The Villas at East Pointe Condominium Association ("East Pointe") initiated this foreclosure action against defendant-appellee Melissa L. Strawser pursuant to a lien for unpaid condominium dues on January 8, 2016. The complaint involved Strawser's property at 81 Villa Pointe Drive in Columbus, Ohio ("property"). The complaint named Carrington as a defendant because Carrington held the first mortgage on the property. Carrington's lien was senior to East Pointe's lien.

         {¶ 3} Carrington was served with the complaint via certified mail on January 19, 2016 but failed to answer. Strawser was also served and likewise failed to answer. On October 11, 2016, East Pointe filed a motion for default judgment against all parties, seeking both default and a "bar to any equitable interest" those parties may have had in the property. The trial court granted the motion and issued the judgment entry of foreclosure on October 31, 2016 ("judgment entry"). The judgment entry noted that Carrington had been served and failed to answer. It further explicitly stated "IT IS THEREFORE ORDERED ADJUDGED AND DECREED that all claims of [Carrington], having failed to appear herein, be and the same are hereby forever barred against the premises * * *."

         {¶ 4} An investor purchased the property at the July 7, 2017 sheriffs sale. The September 6, 2017 confirmation entry followed. The confirmation entry relevantly ordered the clerk to deem as satisfied and cancel Carrington's mortgage. The confirmation entry further directed the clerk to retain the $67, 121 balance pending further court order. The confirmation entry's certificate of service indicated it was submitted to Carrington via ordinary mail.

         {¶ 5} Carrington filed a Civ.R. 60(B) motion on November 30, 2017, two months after the confirmation entry lodged. Therein, Carrington noted the account was current at the time the foreclosure case began. Carrington further alleged Strawser, the borrower, owed Carrington $95, 104.39 plus interest at the rate of 4.375 percent from June 2017 due to her default on the note for the property. Carrington next asserted relief was proper under the "catch-all" provision found in Civ.R. 60(B)(5), because Carrington was simply moving to protect its interest in its lien and the funds left over after confirmation. (Def.'s Mot. at 5.) Carrington argued no prejudice would result should its motion be granted, as the clerks costs, the property's taxes, and East Pointe's condominium dues had all been paid. Carrington continued by summarily stating its motion was filed within a reasonable time, even though the judgment entry was lodged more than one year prior. Carrington failed to offer any explanation for the delay. No opposition was filed.

         {¶ 6} The trial court denied Carrington's Civ.R. 60(B) motion on February 26, 2018. It held Carrington had alleged a meritorious defense via Carrington's status as the note and mortgage holder for the property. The trial court, however, disagreed with Carrington's contention that the $67, 121 funds left over from confirmation were sufficient to invoke Civ.R. 60(B)(5), holding instead that the stated reason-the mere existence of the funds-was not "extraordinary" and did not shift the matter into the requisite "unusual case" realm. (Feb. 26, 2018 Entry at 3.) Lastly, the court rejected Carrington's unsubstantiated claim that the motion was timely, noting that the motion was filed more than one year after the judgment entry lodged and provided no reason for the delay. As such, the trial court denied Carrington's Civ.R. 60(B) motion.

         {¶ 7} Two months later, Carrington filed its motion for distribution of sale proceeds in order to partially satisfy the mortgage's $95, 104.39 balance, arguing that equity demanded such a result. In support of its motion, Carrington provided the affidavit of Elizabeth Ostermann, a vice president at Carrington. Carrington attached Strawser's note, amended note, mortgage, mortgage assignments, notice of default, FHA face-to-face letter, and payment history to Ostermann's affidavit. The amended note was for $105, 287.93 at 4.375 percent interest for a new 30-year term and was ...


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