Fannie Mae v. Hicks
77 N.E.3d 380
Ohio Ct. App.2016Background
- In 2004 Hicks borrowed to buy a Shaker Heights home; mortgage later assigned through Chase to Fannie Mae. Chase lost possession of the original note before Fannie Mae purchased the mortgage.
- Fannie Mae sued to foreclose, attaching an allonge showing endorsement from Chase to Fannie Mae; Fannie Mae 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 to Fannie Mae; this court reversed, holding a foreclosing party must be a person entitled to enforce the note. The foreclosure judgment was reversed and Hicks was entitled to summary judgment.
- Meanwhile, the trial court held the foreclosure sale; Fannie Mae purchased the property by a $110,000 credit bid and the sale was confirmed. Hicks did not appeal the confirmation or obtain a stay of confirmation.
- After this court’s reversal, Hicks sought restitution of the $110,000 under R.C. 2329.45; Fannie Mae moved under Civ.R. 60(B)(4) to vacate the confirmation and deed so title could be returned to Hicks arguing R.C. 2329.45 did not apply to a party purchaser and vacatur was equitable.
- The trial court denied Fannie Mae’s Civ.R. 60(B)(4) motion and ordered Fannie Mae to pay $110,000 restitution to Hicks. Fannie Mae appealed; this court reversed the trial court.
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 the confirmation and deed | Fannie Mae: vacatur is appropriate after reversal of the foreclosure judgment; equities favor returning title to Hicks rather than ordering cash restitution | Hicks: R.C. 2325.03 prohibits affecting title of a purchaser in good faith; title cannot be set aside and restitution under R.C. 2329.45 is the remedy | Court held vacatur was proper because when the foreclosing plaintiff is the purchaser, R.C. 2329.45 does not protect the purchaser and reversal of the foreclosure judgment nullifies the sale; remanded to vacate confirmation and restore title to Hicks |
| Whether R.C. 2329.45 required Fannie Mae to pay restitution of the sale price to Hicks | Fannie Mae: R.C. 2329.45 protects only third‑party purchasers, not a plaintiff purchaser; statute therefore does not mandate restitution to Hicks | Hicks: statute mandates restitution where a sale occurs and the judgment is reversed; plaintiff cannot simply reconvey title | Court held R.C. 2329.45 applies to third‑party purchasers, not to party purchasers like Fannie Mae; trial court erred ordering restitution and must vacate the sale and deed |
Key Cases Cited
- McBain v. McBain, 15 Ohio St. 337 (1864) (reversal of foreclosure does not protect title of a party purchaser under the statute limiting effect of reversal)
- Ins. Co. v. Sampson, 38 Ohio St. 672 (1883) (statutory protection for purchasers on reversal applies only to strangers, not mortgagee parties)
- Moor v. Parsons, 98 Ohio St. 233 (1918) (interpreting predecessor statute protecting purchasers at judicial sale)
- Deutsche Bank Natl. Trust Co. v. Holden, 147 Ohio St.3d 85 (2016) (Ohio Supreme Court reaffirming that a foreclosing party must be entitled to enforce the note to foreclose)