Buckner v. Bank of New York
2014 Ohio 568
Ohio Ct. App.2014Background
- In 2006 James Blanton executed a $460,000 note secured by a mortgage listing America's Wholesale Lender as lender and MERS as mortgagee (nominee). The mortgage was recorded in Sept. 2006.
- MERS assigned the mortgage to The Bank of New York in March 2008; Bank of New York filed foreclosure the same day and the trial court entered a decree of foreclosure on July 8, 2009.
- During Blanton’s appeal, Blanton quitclaimed the property to Lorin Buckner (trustee) in Feb. 2010. The Ohio Supreme Court declined further review and a sheriff’s sale was scheduled; Bank of New York purchased the property at sale.
- Buckner (trustee) filed a December 31, 2012 declaratory judgment/quiet-title complaint alleging the March 2008 assignment was forged because America’s Wholesale Lender allegedly did not exist in March 2008; he alleged forgery/fraud and that the mortgage was unenforceable.
- The trial court granted Bank of New York’s Civ.R. 12(B)(6) motion and dismissed Buckner’s complaint, concluding Buckner lacked standing to challenge the assignment, lis pendens and res judicata barred the claims, and the mortgage/assignment did not constitute a cloud on Buckner’s title.
- Buckner appealed; the Twelfth District affirmed, holding Buckner lacked standing, lis pendens and res judicata applied, and quiet-title relief was unavailable because Buckner took title subject to the recorded mortgage and pending foreclosure.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to challenge mortgage assignment | Buckner: as current titleholder, he can contest assignment validity (forgery) and seek declaratory relief | Bank: Buckner was not party to note, mortgage, or assignment and is not an intended third-party beneficiary; thus lacks standing | Court: Buckner lacked standing; only parties or intended beneficiaries may attack assignments |
| Quiet title (R.C. 5303.01) — is mortgage/assignment a cloud on title? | Buckner: fraudulent assignment clouds his title and entitles him to quiet title relief | Bank: Mortgage was recorded before Buckner took title; constructive notice means mortgage/assignment are not adverse or a cloud | Court: Mortgage and assignment were recorded before Buckner acquired title; he took subject to them and cannot quiet title against Bank |
| Effect of lis pendens on later-acquired interests | Buckner: foreclosure judgment void if assignment forged, so lis pendens/res judicata shouldn't bind him | Bank: Lis pendens attached when foreclosure filed in 2008; anyone acquiring interest during pendency takes subject to decree | Court: Lis pendens barred Buckner’s claims; he acquired interest during pendency and is bound by foreclosure judgment |
| Res judicata/privity with prior foreclosure litigant | Buckner: not a party to earlier foreclosure and should be allowed to litigate assignment fraud | Bank: Prior final foreclosure judgment on the merits; Buckner is in privity with Blanton (quitclaim grantee) and barred from relitigation | Court: Res judicata applied; Buckner is in privity with Blanton and the earlier decree precludes relitigation |
Key Cases Cited
- Byrd v. Faber, 57 Ohio St.3d 56 (Ohio 1991) (complaint allegations must be taken as true on motion to dismiss)
- LeRoy v. Allen, Yurasek & Merklin, 114 Ohio St.3d 323 (Ohio 2007) (standard for dismissal under Civ.R. 12(B)(6))
- Perrysburg Twp. v. Rossford, 103 Ohio St.3d 79 (Ohio 2004) (de novo review of motion-to-dismiss rulings)
- Ohio Contractors Assn. v. Bicking, 71 Ohio St.3d 318 (Ohio 1994) (standing requirement to bring a claim)
- Grant Thornton v. Windsor House, Inc., 57 Ohio St.3d 158 (Ohio 1991) (only parties or intended third-party beneficiaries can sue on a contract)
- Holzemer v. Urbanski, 86 Ohio St.3d 129 (Ohio 1999) (res judicata bars subsequent actions based on same cause of action)