Houtz v. Houtz
111 N.E.3d 888
Ohio Ct. App.2018Background
- Susan and Leon Clowtis died owning real property encumbered by two mortgages (first recorded Oct. 2012 naming KeyBank and MERS; second recorded June 2015).
- Administrators Christine Houtz and Mathew Crane filed virtually identical probate actions seeking authority to sell the property; KeyBank was served and default judgments were entered against it in Sept. 2016.
- KeyBank answered and later partially withdrew default judgment as to the second mortgage; KeyBank assigned the first mortgage to PHH on Oct. 13, 2016.
- PHH filed a foreclosure in general division (Dec. 2016) then voluntarily dismissed, then moved to intervene in the probate sale actions and filed answers in March and June 2017.
- Probate court denied PHH’s post-judgment motions to intervene under Civ.R. 24(A), finding the assignment came after KeyBank’s interest had been disposed by default and PHH’s delay was inexcusable; appeals followed and were consolidated.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness of intervention | Houtz: PHH waited too long after KeyBank’s default; delay prejudiced parties | PHH: acquired interest Oct. 2016 and acted after discovering probate proceedings; motion was timely | Court: PHH’s delay (motions filed >6 months after assignment; PHH knew of case by Dec. 2016) was inexcusable; intervention untimely |
| Whether PHH had a present, protectable interest | Houtz: default judgment against KeyBank extinguished KeyBank’s interest, so PHH had nothing to protect | PHH: acquired assignment from KeyBank and thus had mortgage interest to protect; MERS was not served so PHH’s protection was impaired | Court: Default judgment disposed of KeyBank’s interest; assignment to PHH was ineffective to create a protectable interest for intervention |
| Adequacy of representation by existing parties | Houtz: KeyBank was served and defended, so any interest was represented | PHH: KeyBank may not have adequately represented PHH’s newly acquired rights; MERS’s absence from service left a gap | Court: KeyBank had notice and opportunity to defend; any interest PHH would have derived from KeyBank was adequately represented; MERS’s non-service did not prevent protection |
| Applicability of Civ.R. 24(A)(2) factors | Houtz: PHH failed to meet timeliness, interest, impairment, and inadequate representation elements | PHH: argued it met the elements through assignment and prejudice from prior proceedings | Court: PHH failed to satisfy required elements under Civ.R. 24(A)(2); denial of intervention affirmed |
Key Cases Cited
- State ex rel. Merrill v. Ohio Dept. of Natural Resources, 130 Ohio St.3d 30 (2011) (abuse-of-discretion standard for reviewing intervention rulings)
- Blakemore v. Blakemore, 5 Ohio St.3d 217 (1983) (definition of abuse of discretion)
- Fairview Gen. Hosp. v. Fletcher, 69 Ohio App.3d 827 (1991) (elements required to intervene as of right under Civ.R. 24(A))
- Triax Co. v. TRW, Inc., 724 F.2d 1224 (6th Cir. 1984) (factors for assessing timeliness of intervention)