2016 Ohio 7992
Ohio Ct. App.2016Background
- Betty Wallace purchased a home in 1999 and executed a promissory note secured by a mortgage in favor of Norwest (Directors Acceptance). WaMu later filed a foreclosure complaint in July 2008 alleging it was the holder of the note and mortgage.
- Wallace did not answer; WaMu obtained a default judgment in August 2008. Wells Fargo assigned the mortgage to WaMu 34 days after the complaint was filed.
- Wallace moved (May 2009) to vacate the default judgment, arguing WaMu lacked standing at the time of filing; the trial court denied her Civ.R. 60(B) relief in 2010 and this court initially affirmed (Wallace I). The Ohio Supreme Court reversed in light of Schwartzwald and remanded.
- On remand lower courts considered the impact of Schwartzwald (requiring standing at filing) and Kuchta (limiting collateral attacks on foreclosure judgments). A magistrate ultimately denied Wallace’s motion to vacate in 2016 on grounds she waived the standing/defense by failing to answer; the trial court adopted that decision.
- On this appeal the Twelfth District limited its review to the April 13, 2016 order denying Wallace’s motion to vacate a void judgment and held Wallace forfeited appellate review by not objecting to the magistrate and by failing to preserve Civ.R. 60(B) arguments for this appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether appellate review may consider Wallace's 2009 Civ.R. 60(B) denial | WaMu: not directly at issue on this appeal; prior rulings addressed it | Wallace: sought relief from the 2009 Civ.R. 60(B) denial (excusable neglect due to depression) | Court: Civ.R. 60(B) denial (2010) was not preserved for this appeal and is not before the court |
| Whether Wallace forfeited challenge to the magistrate’s denial of her motion to vacate a void judgment by failing to object | WaMu: Wallace failed to object to the magistrate and thus waived appellate review | Wallace: argued her neglect was excusable and that the default judgment should be vacated | Court: Wallace forfeited review under Civ.R. 53(D)(3)(b); she did not argue plain error, so claim is waived |
| Even applying plain-error review, whether the denial of vacatur was reversible | WaMu: the trial court correctly applied Schwartzwald and Kuchta; no exceptional circumstances | Wallace: default resulted from excusable neglect and warrants relief under vacatur doctrine | Court: plain-error standard is narrowly applied; no extraordinary circumstances shown, so denial affirmed |
Key Cases Cited
- Federal Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13 (2012) (plaintiff must have standing at time complaint is filed to invoke common pleas court jurisdiction in foreclosure)
- Bank of Am., N.A. v. Kuchta, 141 Ohio St.3d 75 (2014) (limits Schwartzwald in collateral attacks; lack of standing to sue does not divest common pleas court of subject-matter jurisdiction in foreclosure)
- Goldfuss v. Davidson, 79 Ohio St.3d 116 (1997) (standard for civil plain error review — reserved for rare, exceptional circumstances)
- Washington Mut. Bank, F.A. v. Wallace, 194 Ohio App.3d 549 (2011) (prior Twelfth District decision addressing WaMu’s standing and default judgment)