Cline v. Mtge. Electronic Registration Sys., Inc.
2013 Ohio 5706
Ohio Ct. App.2013Background
- Cline filed a February 21, 2012 complaint to quiet title under R.C. 5303.01 on real property in Franklin County, Ohio.
- She asserts a promissory note dated April 5, 2006 was executed in favor of CBSK Financial Group, Inc. d.b.a. American Home Loans for $108,300, secured by a mortgage naming MERS as nominee.
- CBSK’s Ohio mortgage license was cancelled on April 30, 2006 and CBSK was shut down in California on October 30, 2007; plaintiff contends CBSK is no longer a member of MERS and the contract is void.
- Plaintiff argues the CBSK–MERS contracts are void and the mortgage is unenforceable, creating a cloud on title and entitling quiet title relief.
- MERS moved to dismiss under Civ.R. 12(B)(6), arguing that the mortgagee clause, naming MERS as nominee for CBSK and heirs, bound plaintiff regardless of CBSK’s status.
- The trial court granted the motion to dismiss on March 21, 2013, holding the mortgage was not a cloud on title and thus not subject to R.C. 5303.01.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Civ.R. 12(B)(6) dismissal was proper. | Cline argues the underlying CBSK–MERS contracts void the lien. | MERS contends plaintiff was bound by the mortgage agreement as the lien’s security. | Yes; complaint failed to state a claim and dismissal was proper. |
| Whether the court relied on outside evidence or should have converted to summary judgment. | Cline claims the court relied on statements outside the complaint. | MERS contends attached contracts and complaint suffice for Civ.R. 12(B)(6). | No improper reliance; documents attached to the complaint were properly considered. |
| Whether the court erred in denying default-related relief. | Cline sought default judgment for failure to timely answer. | MERS sought leave to respond; excusable neglect supported delay. | No error; court properly exercised discretion on excusable neglect and stayed default. |
| Whether the court should have ruled on the motions for summary judgment and sanctions. | Cline claimed summary judgment and sanctions should be addressed. | With dismissal on 12(B)(6) grounds, other motions moot. | moot; summary judgment denied as moot. |
| Whether alleged judge bias affected the outcome. | Cline alleges bias in decision. | Beer's and related authority limit appellate review of bias claims. | Lack of appellate authority to review bias; overruled. |
Key Cases Cited
- Park v. Acierno, 160 Ohio App.3d 117, 2005-Ohio-1332 (Ohio App. 10th Dist. 2005) (written instruments attached to pleading considered part of the pleading for purposes of Civ.R. 12(B)(6))
- Unger, 8th Dist. No. 97315, 2012-Ohio-1950 (Ohio App. 8th Dist. 2012) (mortgage lien considered not a cloud on title when tied to the note)
- Brisk v. Draf Industries, 10th Dist. No. 11AP-233, 2012-Ohio-1311 (Ohio App. 10th Dist. 2012) (Civ.R. 12(B)(6) dismissal when documents attached foreclose relief)
- Adlaka v. Giannini, 7th Dist. No. 05 MA 105, 2006-Ohio-4611 (Ohio App. 7th Dist. 2006) (attachment of written instrument used to determine a claim)