BANK OF AMERICA, N.A., APPELLANT, v. KUCHTA ET AL., APPELLEES.
No. 2013-0304
Supreme Court of Ohio
October 8, 2014
Slip Opinion No. 2014-Ohio-4275
CERTIFIED by the Court of Appeals for Medina County, No. 12CA0025-M, 2012-Ohio-5562.
NOTICE
This slip opinion is subject to formal revision before it is published in an advance sheet of the Ohio Official Reports. Readers are requested to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65 South Front Street, Columbus, Ohio 43215, of any typographical or other formal errors in the opinion, in order that corrections may be made before the opinion is published.
SLIP OPINION NO. 2014-OHIO-4275
BANK OF AMERICA, N.A., APPELLANT, v. KUCHTA ET AL., APPELLEES.
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as Bank of Am., N.A. v. Kuchta, Slip Opinion No. 2014-Ohio-4275.]
Civil procedure—Civ.R. 60(B)—Vacating judgments—Allegation that plaintiff fraudulently claimed to have standing may not be asserted as ground for vacating judgment under Civ.R. 60(B)(3)—Lack of standing is cognizable on appeal and therefore cannot be used to collaterally attack judgment in foreclosure—Lack of standing does not affect subject-matter jurisdiction.
(No. 2013-0304—Submitted January 8, 2014—Decided October 8, 2014.)
SYLLABUS OF THE COURT
- An allegation that a plaintiff fraudulently claimed to have standing may not be asserted as a ground for vacating the judgment under Civ.R. 60(B)(3).
Lack of standing is an issue that is cognizable on appeal, and therefore it cannot be used to collaterally attack a judgment in foreclosure. - Although standing is required in order to invoke the jurisdiction of the court of common pleas over a particular action, lack of standing does not affect the subject-matter jurisdiction of the court.
O’CONNOR, C.J.
{¶ 1} In this appeal we are asked to resolve a conflict regarding a party’s ability to collaterally attack a judgment in a foreclosure action by asserting the issue of standing in a
RELEVANT BACKGROUND
{¶ 2} On December 19, 2002, defendant-appellees, George and Bridget Kuchta (“the Kuchtas“), executed a promissory note in favor of Wells Fargo Home Mortgage, Inc., and entered into a residential mortgage agreement with Wells Fargo to secure repayment of the note. On June 1, 2010, plaintiff-appellant, Bank of America, N.A., filed a complaint in foreclosure against the Kuchtas, attaching a copy of the original note and mortgage. Bank of America claimed to be the holder of the note and assignee of the mortgage. The Kuchtas filed a pro se answer, in which they challenged the standing of Bank of America to proceed with the complaint, arguing that there was no proof that their mortgage had been assigned to Bank of America.
{¶ 3} On August 10, 2010, Bank of America moved for summary judgment, attaching affidavits in support and a “Notice of Filing Assignment of Mortgage.” The attached assignment document memorialized Wells Fargo’s
{¶ 4} After unsuccessful attempts to facilitate a settlement between the parties, during which time the Kuchtas retained counsel, the trial court granted summary judgment to Bank of America and entered a decree of foreclosure in its favor in June 2011. The Kuchtas did not appeal the judgment. On September 7, 2011, the trial court scheduled a sheriff’s sale of the foreclosed property for September 29, 2011.
{¶ 5} On September 23, 2011, the Kuchtas moved to vacate the summary judgment and decree of foreclosure pursuant to
{¶ 6} The Ninth District reversed the trial court’s decision based on its interpretation of this court’s decision in Fed. Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017, 979 N.E.2d 1214, which was announced while the Kuchtas’ appeal was pending. The Ninth District held that standing is a jurisdictional matter and that Bank of America’s alleged lack of standing, if proven, would warrant relief from judgment. Accordingly, the Ninth District remanded the cause to the trial court for application of Schwartzwald.
{¶ 8} We answer the certified question in the negative and hold that the doctrine of res judicata applies to bar a party from asserting lack of standing in a motion for relief from judgment. We therefore reverse the judgment of the Ninth District Court of Appeals.
ANALYSIS
{¶ 9} The defendants-appellees in both Botts and the present case argued that their judgments in foreclosure should be vacated due to lack of standing under two different areas of the law: the Rules of Civil Procedure and common-law jurisprudence related to jurisdiction. We will address these two arguments in turn.
Motion for Relief from Judgment under the Rules of Civil Procedure
{¶ 10}
“On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order or proceeding for the following reasons: * * * (3) fraud (whether
heretofore denominated intrinsic or extrinsic), misrepresentation or other misconduct of an adverse party * * *.”
{¶ 11} To succeed on a motion for relief from judgment under
{¶ 12} The Kuchtas argued below that the bank’s lack of standing at the time of filing its action in foreclosure both established their entitlement to relief due to fraud or misconduct and established a meritorious defense to the underlying action. We find this position to be without merit.
{¶ 13} We agree with the widely held view, expressed by the Tenth District in Botts, that the fraud, misrepresentation, or other misconduct contemplated by
{¶ 15} Further, because the issue of standing could have been and in fact was raised during the foreclosure proceedings, res judicata prevents the Kuchtas from using the issue to establish entitlement to relief. Ohio’s
{¶ 16} It is well established that a
Common-Law Motion to Vacate for Lack of Subject-Matter Jurisdiction
{¶ 17} To surmount the barrier of res judicata, the Kuchtas expressly argue to this court that a party’s lack of standing does more than merely establish a ground for relief from judgment under
{¶ 18} The general term “jurisdiction” can be used to connote several distinct concepts, including jurisdiction over the subject matter, jurisdiction over the person, and jurisdiction over a particular case. Id. at 11-12. The often unspecified use of this polysemic word can lead to confusion and has repeatedly required clarification as to which type of “jurisdiction” is applicable in various legal analyses. See, e.g., id. at ¶ 33; Barnes v. Univ. Hosps. of Cleveland, 119 Ohio St.3d 173, 2008-Ohio-3344, 893 N.E.2d 142, ¶ 27; In re J.J., 111 Ohio St.3d 205, 2006-Ohio-5484, 855 N.E.2d 851, ¶ 10-16. We again take the opportunity for clarification in the context of this case.
{¶ 19} Subject-matter jurisdiction is the power of a court to entertain and adjudicate a particular class of cases. Morrison v. Steiner, 32 Ohio St.2d 86, 87, 290 N.E.2d 841 (1972). A court’s subject-matter jurisdiction is determined without regard to the rights of the individual parties involved in a particular case. State ex rel. Tubbs Jones v. Suster, 84 Ohio St.3d 70, 75, 701 N.E.2d 1002 (1998); Handy v. Ins. Co., 37 Ohio St. 366, 370 (1881). A court’s jurisdiction over a particular case refers to the court’s authority to proceed or rule on a case that is within the court’s subject-matter jurisdiction. Pratts at ¶ 12. This latter jurisdictional category involves consideration of the rights of the parties. If a court possesses subject-matter jurisdiction, any error in the invocation or exercise of jurisdiction over a particular case causes a judgment to be voidable rather than void. Id. at 12.
{¶ 20} Although courts created by statute, such as municipal courts, are a different matter, see Cheap Escape Co., Inc. v. Haddox, L.L.C., 120 Ohio St.3d 493, 2008-Ohio-6323, 900 N.E.2d 601, ¶ 7, this case involves a constitutionally created common pleas court. Ohio’s common pleas courts are endowed with “original jurisdiction over all justiciable matters * * * as may be provided by law.”
{¶ 22} Standing is certainly a jurisdictional requirement; a party’s lack of standing vitiates the party’s ability to invoke the jurisdiction of a court—even a court of competent subject-matter jurisdiction—over the party’s attempted action. Schwartzwald at ¶ 22; Tubbs Jones, 84 Ohio St.3d at 77, 701 N.E.2d 1002; State ex rel. Dallman v. Franklin Cty. Court of Common Pleas, 35 Ohio St.2d 176, 178, 298 N.E.2d 515 (1973). But an inquiry into a party’s ability to invoke a court’s jurisdiction speaks to jurisdiction over a particular case, not subject-matter jurisdiction.
{¶ 23} A determination of standing necessarily looks to the rights of the individual parties to bring the action, as they must assert a personal stake in the outcome of the action in order to establish standing. Ohio Pyro, Inc. v. Ohio Dept. of Commerce, 115 Ohio St.3d 375, 2007-Ohio-5024, 875 N.E.2d 550, ¶ 27. Lack of standing is certainly a fundamental flaw that would require a court to dismiss the action, Schwartzwald at ¶ 40, and any judgment on the merits would be subject to reversal on appeal. But a particular party’s standing, or lack thereof, does not affect the subject-matter jurisdiction of the court in which the party is attempting to obtain relief. Tubbs Jones at 77. Accordingly, Bank of America’s alleged lack of standing to initiate a foreclosure action against the Kuchtas would have no effect on the subject-matter jurisdiction of the Medina County Court of Common Pleas over the foreclosure action.
CONCLUSION
{¶ 25} An allegation that a plaintiff fraudulently claimed to have standing may not be asserted as a ground for vacating the judgment under
Judgment accordingly.
O’DONNELL, LANZINGER, KENNEDY, and FRENCH, JJ., concur.
PFEIFER and O’NEILL, JJ., dissent.
O’NEILL, J., dissenting.
{¶ 26} I dissent. I would affirm the Ninth District’s decision to remand this case to the trial court for application of Fed. Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017, 979 N.E.2d 1214. While it is axiomatic that
{¶ 27} At the trial court level, the Kuchtas, who appeared pro se, unequivocally asserted that the bank did not have standing to file the complaint in foreclosure. It was error for the trial court to allow the proceedings to go forward, but go forward they did. The Ninth District, having read this court’s recently released decision in Schwartzwald, correctly found that the Kuchtas’
{¶ 28} More than once in Schwartzwald, we stated that standing is a jurisdictional requirement. Schwartzwald at ¶ 22, 24, 27, and 38. This court unanimously agreed that it is fundamental that a party commencing litigation must have standing to sue in order to present a justiciable controversy and invoke the jurisdiction of the common pleas court. Id. at 41. This court repeatedly emphasized that standing must exist at the time of filing of the complaint, id. at ¶ 24, 25, and that lack of standing cannot be cured by postfiling events, such as the receipt of an assignment of the claim or by substitution of the real party in interest. Id. at ¶ 26, 27, 37, 38, and 41.
{¶ 29} But in this case, the majority holds that Bank of America’s lack of standing to initiate the foreclosure action at the time of filing of the complaint has
{¶ 30} What does this rule mean in practical terms? Does it mean that if the defendant in any given case fails to challenge standing on appeal, then the standing issue is forfeited in favor of the party who did not have standing to invoke the jurisdiction of the common pleas court in the first place?
{¶ 31} The majority’s reliance on Pratts v. Hurley, 102 Ohio St.3d 81, 2004-Ohio-1980, 806 N.E.2d 992, is misplaced at a minimum. Rather, application of Pratts to this case demands exactly the opposite outcome. Pratts was a habeas action stemming from a capital case in which, after waiving his right to a jury trial, Pratts submitted his guilty plea to a single judge rather than a three-judge panel as required by statute. Pratts at ¶ 2-3. The Pratts court determined that the statutory errors committed by the trial court did not divest the court of its subject-matter jurisdiction. Id. at ¶ 36.
{¶ 32} There was no dispute in Pratts that the case was properly commenced in the common pleas court. However, that is precisely the issue in this case, since this case was not properly commenced. On June 1, 2010, the date Bank of America filed the complaint, it was not the holder of either the mortgage or the note. The assignment of the mortgage was not complete until at least June 10, 2010. Thus, on the date the complaint was filed there was no injury, and therefore as a matter of law no justiciable controversy, between Bank of America and the Kuchtas. See also Schwartzwald at ¶ 28. As a result the court was without jurisdiction to consider—much less rule on—this complaint. Any judgments the trial court rendered on this complaint were void and subject to attack at any time. Pratts at 11.
{¶ 33} The Ninth District got this case right when it concluded that the Kuchtas’
PFEIFER, J., concurs in the foregoing opinion.
Thompson Hine, L.L.P., Scott A. King, and Terry W. Posey Jr., for appellant.
Dann, Doberdruk & Harshman, Grace M. Doberdruk, Marc E. Dann, Daniel M. Solar, and James R. Douglass, for appellees.
Andrew M. Engel Co., L.P.A., and Andrew M. Engel; and Mills, Mills, Fiely & Lucas, L.L.C., and John Sherrod, urging affirmance for amici curiae Joseph and Lori LaPierre.
Ohio Poverty Law Center, L.L.C., and Linda Cook; Southeastern Ohio Legal Services and Peggy P. Lee; Legal Aid Society of Southwest Ohio, L.L.C., and Noel M. Morgan; Advocates for Basic Legal Equality, Inc., and Andrew D. Neuhauser, urging affirmance for amici curiae Ohio Poverty Law Center, L.L.C., Southeastern Ohio Legal Services, Legal Aid Society of Southwest Ohio, L.L.C., and Advocates for Basic Legal Equality, Inc.