Mann v. Resolution T Co., L.L.C.
2014 Ohio 2451
Ohio Ct. App.2014Background
- Dennis and Karen Mann executed a cognovit note and open-end mortgage in 2003; Fifth Third Bank later assigned the note/mortgage to Resolution T Co., LLC (Resolution).
- Resolution obtained a cognovit judgment in 2011 for roughly $56,394; later filed a foreclosure action and a December 2012 decree of foreclosure that referenced additional sums (including attorneys’ fees) to be determined later.
- A sheriff’s sale was scheduled; a private buyer agreed to pay $100,000 in April 2013. Resolution demanded a payoff that included asserted attorneys’ fees, ultimately accepting $88,000; the Manns received no sale proceeds.
- The Manns alleged Resolution refused to release a judgment lien on unrelated 130-acre property for five months after payment, and demanded a release in exchange for a broad release of claims; Resolution did not respond. The lien was removed only after the Manns filed this suit.
- The Manns sued for declaratory relief and asserted slander of title plus claims challenging the attorneys’ fees (abuse of process, money had and received, unjust enrichment). The trial court granted summary judgment to Resolution; the Manns appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the foreclosure decree was a final, appealable order (res judicata effect) | Foreclosure decree not final because it did not specify attorneys’ fees amount; so claims about fees are not precluded | Foreclosure decree was final; remaining fee determinations are administrative and issues could have been appealed or raised via Civ.R. 60(B) | Court: decree was final and claims about attorneys’ fees are barred by res judicata |
| Whether taking pre-judgment sale proceeds for contract attorney fees violated public policy or R.C. 1319.02 | Manns: prejudgment taking of sale proceeds for attorney fees is contrary to public policy and statute (statute inapplicable due to loan amount) | Resolution: fee entitlement and amount were matters in foreclosure and could be litigated there | Moot on appeal (res judicata resolved first); assignment overruled as moot |
| Whether Manns stated a slander of title claim and are entitled to compensatory damages | Manns: lien became false after debt paid; Resolution’s refusal to remove lien and demand for release shows malice/bad faith and caused special damages (loss of sale proceeds/access) | Resolution: lien was lawful because underlying debt existed; no special damages or bad faith | Court: genuine issues of material fact exist on falsity, malice/bad faith, and special damages; summary judgment for Resolution on this claim was erroneous; Manns’ slander claim survives |
| Whether appeal was frivolous (sanctions) | N/A (appellant) | Resolution sought App.R. 23 sanctions for frivolous appeal | Court: appeal not frivolous; sanctions denied |
Key Cases Cited
- Countrywide Home Loans Servicing v. Nichpor, 136 Ohio St.3d 55, 990 N.E.2d 565 (Ohio 2013) (after decree of foreclosure and order of sale, the foreclosure action cannot be dismissed as a pending case; foreclosure decree is a final judgment)
- Master Chemical Corp. v. Inkrott, 55 Ohio St.3d 23, 563 N.E.2d 26 (Ohio 1990) (definition of bad faith as importing a dishonest purpose or ulterior motive)
- Green v. Lemarr, 139 Ohio App.3d 414, 744 N.E.2d 212 (Ohio Ct. App. 2000) (elements of slander of title and attorney fees as special damages or as fees recoverable when bad faith is found)