The Ohio Supreme Court recently dismissed the latest in a series of appeals and other challenges by a borrower to the validity of a foreclosure judgment against the borrower.
In this decision, the Court held that the doctrine of the law of the case applied, whereas the Supreme Court, in an earlier appeal, had found that the Borrower’s arguments were unfounded or had been abandoned.
A copy of the notice in Lundeen vs. Turner is available at: Link to Opinion.
The appeal arose out of a foreclosure action brought against a borrower (“Borrower”) by a mortgagee (“Bank”). A final judgment of foreclosure was rendered in favor of the bank and the borrower appealed.
In the first appeal, the Borrower argued that the court of first instance lacked jurisdiction because it was not properly served. The Court of Appeal found that the borrower had waived this defense and the Supreme Court did not allow the discretionary appeal.
Two years later, the borrower filed a prohibition action in the Court of Appeals, which sought to prevent the foreclosure sale. The complaint was dismissed on the grounds that the court of first instance had jurisdiction in the matter and that the borrower had adequate legal recourse by way of appeal.
A year later, the borrower filed a second prohibition action in the Court of Appeal, which again sought to prevent the foreclosure sale. The court again dismissed the complaint and dismissed the Borrower’s request for reconsideration. The Court of Appeal again held that the borrower’s appeal in the foreclosure action was an adequate legal remedy.
The borrower then filed a motion for dispensation from judgment before the Court of Appeal and a notice of appeal before the Supreme Court.
The Supreme Court denied relief in the direct appeal on the basis that the borrower had an adequate legal remedy to challenge the trial court’s exercise of jurisdiction over the foreclosure action. In reaching its decision, the Supreme Court rejected the Borrower’s argument that the trial court lacked jurisdiction due to allegedly insufficient service finding that the Borrower “voluntarily submitted to jurisdiction of the court of common pleas in the foreclosure action by filing an Ohio Civ. R.12(B) motion to dismiss without raising insufficiency of service or lack of personal competence as a defence.” lundeen i, 164 Ohio St. 3d 159, 2021-Ohio-1533, 172 NE3d 15 at ¶20. The Supreme Court also ruled that the borrower’s dependence on Ohio Civ. R. 3(A) does not raise any question regarding the subject matter jurisdiction of the trial court.
The Court of Appeals later dismissed the borrower’s Ohio Civ. R. 60(B) petition for relief finding that the petition was without merit because the borrower challenged personal jurisdiction and not subject matter jurisdiction, the borrower had an adequate legal remedy and the defense of absence of service had been abandoned.
Here, in this latter action, the borrower appealed the Court of Appeal’s denial of its motion for dispensation from judgment.
The Supreme Court found that the appeal was based on two essential points: (1) there was no subject matter jurisdiction over the foreclosure action, the bank being said to have failed to bring the action within of Ohio Civ. the one-year limitation period of R. 3(A); and (2) as the trial court had no subject matter jurisdiction, it also had no personal jurisdiction over him.
In order to prevail, the Borrower would have had to establish (1) that it had a valid claim or defense in the event relief was awarded; (2) that she was entitled to a remedy under any of the provisions of Ohio Civ. Rules 60(B)(1) to (5); and (3) that the motion was timely. Strack versus Pelton70 Ohio St. 3d 172, 174, 637 NE2d 914 (1994).
The Respondents argued that the Borrower could not establish a valid claim or defense that its petition had failed under the doctrine of the law of the case because the arguments had already been decided by the court in Lundeen I.
The doctrine of the law of the case is a “rule of practice rather than a binding rule of substantive law”, which “provides that legal issues resolved by a reviewing court on a prior appeal remain the law of that case for any subsequent proceedings both at first instance and on appeal. » Farmers State Bank v. Sponaugle, 157 Ohio St. 3d 151, 2019-Ohio-2518, 133 NE3d 470, ¶ 22; see also ex rel. Dannaher vs. Crawford, 78 Ohio St. 3d 391, 394, 678 NE2d 549 (1997) (recognizing that the doctrine applies to extraordinary acts). Absent extraordinary circumstances, “a lower court has no discretion to disregard the mandate of a higher court on a prior appeal in the same matter”. Nolan vs. Nolan11 OhioSt.3d 1, 462 NE2d 410 (1984), syllabus.
As the Supreme Court previously held that the Borrower’s argument that the trial court lacked jurisdiction under Civ.R.3(A) was unfounded and the Borrower had waived the argument of lack of personal jurisdiction for lack of service, the Supreme Court here held that the borrower could not establish a valid claim or defense.
The Supreme Court held that its previous decisions remained the law of the case. The Court further concluded that there was nothing “manifestly unjust” in its decision that would cause the doctrine not to be applied. Thus, the Supreme Court held that the Court of Appeal had not abused its discretion in rejecting the Borrower’s request for compensation.
The borrower alternatively asked the Court of Appeal to grant its motion because of its inherent power to set aside a void judgment. “The power to set aside a void judgment does not derive from the Ohio Civ. R. 60(B) but rather is an inherent power possessed by the Ohio courts. » Patton v. Diemer, 35 Ohio St. 3d 68, 518 NE2d 941 (1988), program paragraph four. “The traditional rule long followed in Ohio is that a void judgment is a judgment rendered by a court without subject matter jurisdiction over the case or personal jurisdiction over the parties.” State vs. Hudson161 Ohio St. 3d 166, 2020-Ohio-3849, 161 NE3d 608, ¶ 11 (case collection).
The Supreme Court concluded that the judgment was not void. The Supreme Court noted that the Court of Appeals was vested with subject matter jurisdiction over the prohibition action by the Ohio Constitution. See Ohio Constitution, Article IV, Section 3(B)(1)(d). The Supreme Court further held that personal jurisdiction had been conferred on the Court of Appeal to render judgment against the Borrower by the Borrower when it filed its complaint seeking relief in prohibition. See Moore v. Mt. Carmel Health Sys.162 Ohio St. 3d 106, 2020-Ohio-4113, 164 NE3d 376, ¶ 34.
Thus, the Court upheld the judgment of the Court of Appeal.