Nationside Mtge.., L.L.C. v. Young
2016 Ohio 8287
| Ohio Ct. App. | 2016Background
- Stephanie Young owned property and executed a $57,000 mortgage to her parents (the Youngs) shortly before a lender-assign (Aurora) filed federal foreclosure on her first mortgage; Aurora did not join the Youngs in that foreclosure.
- After the federal court entered a decree of foreclosure, Young filed Chapter 13 bankruptcy, listed the Youngs’ mortgage as a secured claim, and the bankruptcy court confirmed a plan (which she later defaulted on).
- Aurora obtained relief from the bankruptcy stay, purchased the property at the confirmed foreclosure sale, assigned its successful bid to Nationstar, and a Master Commissioner’s Deed to Nationstar was recorded.
- Nationstar sued the Youngs to quiet title, alleging Aurora had failed to detect/join the Youngs in the foreclosure. The Youngs moved for summary judgment arguing res judicata barred Nationstar from challenging their mortgage (the Youngs had been listed as secured creditors in the bankruptcy).
- The trial court granted summary judgment for the Youngs on res judicata grounds. This court previously remanded to clarify whether res judicata had been properly pled; on remand the trial court allowed the defense raised first in a summary judgment motion and again entered judgment for the Youngs. Nationstar appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether res judicata as an affirmative defense can be raised for the first time in a motion for summary judgment | Nationstar: Raising res judicata first in MSJ is waiver; Civ.R. 8(C) requires pleading affirmative defenses | Youngs: Res judicata may be raised in MSJ (State ex rel. Freeman support) | Court: Defense waived where not pled in responsive pleading or amended; cannot be asserted first in MSJ — reversed trial court |
| Whether res judicata precludes Nationstar from disputing the Youngs’ mortgage lien on the merits | Nationstar: Res judicata was not properly preserved; merits not barred | Youngs: Bankruptcy recognition of their claim precludes Nationstar’s challenge | Moot (court reversed on preservation grounds and declined to address merits) |
Key Cases Cited
- Jim’s Steak House, Inc. v. Cleveland, 81 Ohio St.3d 18 (1998) (plurality: affirmative defenses not listed in Civ.R. 12(B) are waived if not pled in responsive pleading)
- State ex rel. Freeman v. Morris, 62 Ohio St.3d 107 (1991) (res judicata is not a proper subject of a Civ.R. 12(B) motion to dismiss; courts may not consider materials outside the complaint on such motions)
- State ex rel. Adkins v. Shanahan, 132 Ohio St.3d 519 (2012) (citing Jim’s Steak House for the proposition that affirmative defenses are waived if not properly asserted in responsive pleading)
- State ex rel. Deiter v. McGuire, 119 Ohio St.3d 384 (2008) (citing Jim’s Steak House on waiver of affirmative defenses)
- Johnson v. Linder, 14 Ohio App.3d 412 (3d Dist. 1984) (discussed in Freeman; treated res judicata as appropriately raised by summary judgment in that court’s analysis)