Wells Fargo Bank, N.A. v. Fortner
2014 Ohio 2212
Ohio Ct. App.2014Background
- Wells Fargo obtained a default judgment and decree of foreclosure against Russell and Cody Fortner; an order of sale issued and the sheriff’s sale occurred.
- A Civil Real Estate Appraisal was filed valuing the property at $87,000; the appraisal form stated appraisers conducted an "actual view."
- Six days after the sheriff’s sale but before confirmation, the Fortners moved to set aside the sale alleging (1) Wells Fargo told them foreclosure would be suspended while a loan-modification application was pending, (2) they were not given notice of the sale, and (3) the appraisal was not made on actual interior view.
- The trial court treated the Fortners’ motion as a Civ.R. 60(B) motion, denied relief, then confirmed the sale and distributed proceeds; the Fortners appealed.
- On appeal the court found the Civ.R. 60(B) analysis improper because the sale had not yet been confirmed when the motion was filed; it reversed confirmation and remanded for consideration of whether Wells Fargo made a representation about suspending foreclosure and whether the Fortners reasonably relied on it.
- The court also held: the Fortners (who defaulted) were not entitled to service of sale notice as a matter of rule, the record showed they received notice, and the Fortners failed to show prejudice from the appraisers’ not inspecting interior.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Fortners’ motion should be judged under Civ.R. 60(B) | Wells Fargo treated the post-sale motion as a Civ.R. 60(B) challenge to confirmation | Fortners: motion filed before confirmation so Civ.R. 60(B) inapplicable | Motion was filed before confirmation; Civ.R. 60(B) requirements did not apply to that interlocutory motion |
| Whether representations that foreclosure would be suspended during loan-mod review estop sale | Wells Fargo: pending modification/application does not prevent foreclosure or sale | Fortners: Wells Fargo told them foreclosure would be on hold and they relied on that | Court found affidavit raised a triable issue whether such a representation was made and relied on; trial court must address it on remand |
| Whether Fortners were entitled to service/notice of sheriff’s sale | Wells Fargo: defaulting parties need not be served postcomplaint pleadings like order of sale; sale notice was provided per record | Fortners: communications with bank constituted an appearance and required notice | Defaulting parties are not entitled to notice of sale; record nonetheless showed service in compliance with law |
| Whether appraisal violated R.C. 2329.17 by not entering interior and thus requires setting aside sale | Wells Fargo: statute requires "actual view" but not necessarily interior inspection; no showing of prejudice | Fortners: appraisers did not enter and therefore appraisal was deficient | Failure to inspect interior is reversible only if interior condition prejudicially affected value; Fortners offered no evidence of prejudice, so appraisal challenge fails |
Key Cases Cited
- Ed Schory & Sons, Inc. v. Soc. Natl. Bank, 75 Ohio St.3d 433 (Ohio 1996) (a lender’s enforcement of written agreements is not necessarily bad faith)
- Kham & Nate's Shoes No. 2, Inc. v. First Bank of Whiting, 908 F.2d 1351 (7th Cir. 1990) (parties negotiating contracts may still enforce contracts strictly)
- Blakemore v. Blakemore, 5 Ohio St.3d 217 (Ohio 1983) (abuse of discretion standard explained)
- Countrywide Home Loans Servicing v. Nichpor, 136 Ohio St.3d 55 (Ohio 2013) (distinguishes foreclosure judgment stage from subsequent enforcement proceedings like appraisal, sale, and confirmation)