Fannie Mae v. Hicks
2016 Ohio 7483
Ohio Ct. App.2016Background
- Hicks obtained a mortgage in 2004; the original promissory note was later lost after Chase Manhattan (which had acquired the loan) allegedly retained possession before assigning the mortgage to Fannie Mae.
- Fannie Mae sued to foreclose, attaching an allonge showing endorsement from Chase Manhattan to Fannie Mae; Fannie Mae later conceded it could not enforce the lost note under R.C. 1308.38 but argued the mortgage assignment alone allowed foreclosure.
- Trial court granted summary judgment for Fannie Mae; this court reversed, holding a foreclosing party must be entitled to enforce the note and that Chase Manhattan (as last holder) retained enforcement rights, and directed entry of summary judgment for Hicks.
- Meanwhile, a foreclosure sale proceeded; Fannie Mae (the plaintiff) made a $110,000 credit bid, purchased the property, and the sale was confirmed and deed recorded before this court’s reversal was consummated.
- After the appellate reversal, Hicks sought restitution under R.C. 2329.45 for the sale proceeds; Fannie Mae moved under Civ.R. 60(B)(4) to vacate the confirmation and return title to Hicks. The trial court denied relief and ordered Fannie Mae to pay $110,000 restitution.
- On appeal, this court reversed the trial court, holding the statutes protecting purchasers at foreclosure sales (R.C. 2325.03 and 2329.45) do not apply where the foreclosing plaintiff is the purchaser, and under district precedent the reversal of the foreclosure judgment nullified the sale and confirmation — so the confirmation must be vacated and title returned to Hicks.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether trial court erred in denying Fannie Mae's Civ.R. 60(B)(4) motion to vacate confirmation and deed | Vacate confirmation and return title to avoid unjust restitution windfall to Hicks | R.C. 2325.03 and 2329.45 prohibit affecting purchaser's title; restitution is the sole remedy | Reversed: Civ.R. 60(B)(4) relief appropriate because purchaser was the plaintiff; reversal of foreclosure nullified the sale |
| Whether R.C. 2329.45 required Fannie Mae to pay Hicks restitution of the purchase price after reversal | Restitution was improper because statute protects third‑party purchasers, not plaintiff‑purchasers; title should be returned instead | Statute mandates restitution when a foreclosure judgment is reversed | Reversed: R.C. 2329.45 does not apply to a plaintiff who purchased the property; trial court erred in ordering restitution |
Key Cases Cited
- Moor v. Parsons, 98 Ohio St. 233, 120 N.E. 305 (Ohio 1918) (discussing protection of purchasers by former analogous statute and policy favoring stability of title)
- Hubbell v. Admrs., etc., of Broadwell, 8 Ohio St. 120 (Ohio 1837) (early authority on effect of reversal on judicial sales)
- McBain v. McBain, 15 Ohio St. 337 (Ohio 1864) (authority on judicial-sale title issues)
- Ins. Co. v. Sampson, 38 Ohio St. 672 (Ohio 1883) (authority discussing operation of statutes protecting purchasers at judicial sales)