2016 Ohio 311
Ohio Ct. App.2016Background
- On Sept. 22, 2012 Virginia Whitman was bitten by a dog at a Winton Road residence occupied by Charles, Kimberly, and Marcus Toran; she and her family sued the Torans and also sued Michael Gerson (and his company) alleging the Torans’ October 2012 deed-in-lieu back to Gerson was a fraudulent conveyance.
- The Torans had purchased the property from Gerson in 2008, executing a $120,000 note secured by a mortgage in Gerson’s favor.
- After the bite, Woods Cove, LLC initiated foreclosure proceedings based on a tax certificate; four days later the Torans conveyed the property to Gerson by deed in lieu.
- The trial court entered a temporary restraining order preventing further transfer; the Whitmans posted a $10,000 bond, later withdrew the injunction, and sought release of the bond.
- The trial court granted summary judgment for Gerson on the fraudulent-transfer claim (finding the property was not an “asset” under R.C. 1336.01), denied forfeiture of the bond, and later granted summary judgment for the Whitmans on Gerson’s counterclaims (slander of title/quiet title); both sides appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether R.C. 1336 (Uniform Fraudulent Transfer Act) applied to the 2012 deed-in-lieu | Whitmans: the deed was a fraudulent transfer intended to hinder/delay creditors (including bite victims); badges of fraud (insider transfer, concealment, post-threat transfer, Torans retained possession) raise factual disputes | Gerson: the property was encumbered by a valid $120,000 mortgage and thus was not an “asset” under R.C.1336.01(B); no genuine-issue of fact | Court: Property value (county auditor $85,000) was less than lien; property not an “asset” → summary judgment for Gerson on fraudulent-transfer claim |
| Validity/effect of mortgage lien | Whitmans: mortgage was a sham/illusory because Gerson did not diligently enforce payments | Gerson: mortgage was valid; prior ownership and steps to protect interest show lien authenticity | Court: Whitmans produced no legal authority or evidence to show lien was sham; mortgage valid |
| Forfeiture of preliminary-injunction bond (Civ.R.65(C)) | Whitmans: bond should be returned after they voluntarily withdrew injunction | Gerson: withdrawal entitles him to forfeiture and attorney fees because injunction proved unwarranted | Court: No judicial finding that injunction "should not have been granted"; Whitmans acted in good faith; denial of forfeiture affirmed |
| Slander of title / quiet-title counterclaims and sanctions | Gerson: Whitmans’ lawsuit and filings cloud title, were malicious, and sanctions are warranted for frivolous litigation | Whitmans: complaint and court filings are privileged; they did not record encumbrances; they did not assert title | Court: Court pleadings are absolutely privileged; no recorded lien or encumbrance existed; no cloud on title; sanctions not warranted; summary judgment for Whitmans on counterclaims |
Key Cases Cited
- Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 671 N.E.2d 241 (Ohio 1996) (standard of review and law for summary judgment)
- State ex rel. Howard v. Ferreri, 70 Ohio St.3d 587, 639 N.E.2d 1189 (Ohio 1994) (summary-judgment standard discussion)
- Green v. Lemarr, 139 Ohio App.3d 414, 744 N.E.2d 212 (Ohio Ct. App. 2000) (elements of slander of title and required proof)
- Buehrer v. Provident Mut. Life Ins. Co. of Philadelphia, 123 Ohio St. 264, 175 N.E. 25 (Ohio 1931) (judicial pleadings are privileged; cannot form basis for slander-of-title claims)
- Surace v. Wuliger, 25 Ohio St.3d 229, 495 N.E.2d 939 (Ohio 1986) (absolute privilege for statements in judicial pleadings)