Farmer v. PNC Bank, N.A.
2017 Ohio 4203
| Ohio Ct. App. | 2017Background
- In 2015 Devin Farmer sued Joseph Kistner, PNC Bank (successor to National City Mortgage), and others alleging a fraudulent release of a mortgage on property Kistner sold to Farmer and seeking declaratory relief and damages.
- Kistner (pro se) asserted cross-claims against PNC alleging fraud, concealment, and related defenses concerning prior assignments and a corrective assignment.
- Kistner repeatedly obstructed or curtailed discovery: he terminated a deposition after two hours, sought continuances, and failed to fully cooperate with court-ordered discovery overseen by a magistrate.
- The trial court warned Kistner that failure to comply with the discovery order could lead to sanctions under Civ.R. 37(B), including striking pleadings, dismissal, or default judgment.
- After motions for sanctions, the court struck Kistner’s answer and cross-claims and entered default judgments awarding Farmer and PNC money and other relief; Kistner appealed asserting lack of notice and opportunity to be heard.
- The appellate court reversed and remanded, holding the trial court violated Kistner’s procedural rights by ruling on PNC’s sanctions motion without providing the response period required by local rule and without an adequate record of the magistrate hearing.
Issues
| Issue | Plaintiff's Argument (Farmer) | Defendant's Argument (Kistner/PNC) | Held |
|---|---|---|---|
| Whether trial court erred by entering judgment/sanctions against Kistner without notice and opportunity to be heard | Farmer/PNC argued dismissal/default was authorized by Civ.R. 37(B) given Kistner’s discovery failures | Kistner argued he was not given reasonable notice or time under local rules to respond before default/dismissal | Court: Reversed — Kistner was entitled to the procedural opportunity to respond; ruling granted too quickly in violation of local rule and due process |
| Whether damages awarded to PNC were proper without a hearing | PNC contended award was warranted and in any event consistent with Farmer’s judgment | Kistner contended PNC only pleaded contribution/indemnity and damages require proof/hearing; record lacked supporting documentation | Court: Moot on remand (case reversed); noted that damages ordinarily require a hearing unless liquidated and record lacked documentary support |
| Whether dismissal of Kistner’s cross-claims against PNC was proper as a discovery sanction | PNC argued the same sanction would have been reached and Kistner admitted fraud at deposition | Kistner argued PNC never sought discovery directly and he lacked notice and opportunity regarding dismissal | Court: Reversed — court failed to afford reasonable opportunity to defend against sanctions; dismissal not justified without providing response time and adequate record |
| Whether trial court could rely on magistrate hearing absent transcript or magistrate decision | Farmer/PNC relied on magistrate proceedings to justify sanctions | Kistner asserted the trial court improperly relied on unverified statements and had no record to adjudicate sanctions | Court: Trial court erred by relying on unverified allegations and lacking transcript; prejudiced Kistner |
Key Cases Cited
- Ohio Furniture Co. v. Mindala, 22 Ohio St.3d 99 (Ohio 1986) (dismissal with prejudice for discovery noncompliance requires prior notice to plaintiff's counsel)
- Quonset Hut, Inc. v. Ford Motor Co., 80 Ohio St.3d 46 (Ohio 1997) (counsel has notice of impending dismissal when informed dismissal is possible and given reasonable opportunity to defend)
- Hillabrand v. Drypers Corp., 87 Ohio St.3d 517 (Ohio 2000) (reasonable opportunity to respond means allowing time to file opposing memorandum consistent with local rules)
- Blakemore v. Blakemore, 5 Ohio St.3d 217 (Ohio 1983) (abuse of discretion standard)
- Tiller v. Hinton, 19 Ohio St.3d 66 (Ohio 1985) (bona fide purchaser bound by encumbrance only with actual or constructive notice)
- Deutsche Bank Natl. Trust Co. v. Holden, 147 Ohio St.3d 85 (Ohio 2016) (mortgagee has separate remedies: personal judgment on note, enforcement of mortgage, or foreclosure)