Beneficial Ohio, Inc. v. LeMasterBeneficial Ohio, Inc. v. LeMaster
For Plaintiff-Appellee
TIMOTHY R. BILLICK, ESQ.
LAURA C. INFANTE, ESQ.
JASON A. WHITACRE, ESQ.
The Law Offices of
John D. Clunk, Co., L.P.A.
5601 Hudson Drive, Suite 400
Hudson, Ohio 44236
For Defendant-Appellant
GREGORY S. REICHENBACK, ESQ.
3 North Main Street, Suite 812
Mansfield, Ohio 44902
O P I N I O N
{¶1} Defendants-appellants, Charles and Dycie Lemaster, appeal from the September 22, 2008, Judgment Entry of the Richland Cоunty Court of Common Pleas granting the Motion for Summary Judgment filed by appellee Beneficial Ohio D/B/A Beneficial Mortgage while denying the Motion for Summary Judgment filed by appellants.
STATEMENT OF THE FACTS AND CASE
{¶2} On March 5, 1999, appellants executed a note and mortgage in favоr of appellee Beneficial Ohio D/B/A Beneficial Mortgage in the amount of $66,375.84. The note contained an acceleration clause. Subsequently, on December 18, 2007, appellee filed a complaint in foreclosure аgainst appellants alleging that appellants owed appellee $64, 809.55 plus interest at the rate of 8.992% per annum from August 10, 2006.
{¶3} Appellants, in their answer, which was filed on January 23, 2008, alleged, in part, that appellee’s claims were barred by res judicata because appellee or its predecessor “has twice previously sued [appellants] on the same claims and twice previously dismissed its claims by Notice pursuant to
{¶4} Appellee filed a Motion for Summary Judgment оn May 20, 2008. In response, appellants, on August 27, 2008, filed a combined memorandum opposing appellee’s Motion for Summary Judgment and a Motion for Summary Judgment. Appellants, in the same, alleged that appellee’s claims were barred by the doctrine of claim preclusion because “[t]hrice [appellee] has sued the [appellants] to foreclosure on
{¶5} Pursuant to a Judgment Entry filed on September 22, 2008, the trial court granted appellee’s Motion for Summary Judgment.
{¶6} Appellants now raise the following assignments of error on appeal;
{¶7} “I. THE COURT ERRED BY GRANTING SUMMARY JUDGMENT TO THE PLAINTIFF.
{¶8} “II. THE COURT ERRED BY DENYING SUMMARY JUDGMENT TO THE DEFENDANTS.”
{¶9} Appellants, in their two assignments of error, arguе that the trial court erred in granting summary judgment to appellee while denying appellants’ Motion for Summary Judgment. We agree.
{¶10} Summary judgment proceedings present the appellate court with the unique opportunity of reviewing the evidence in the same manner as the trial court. Smiddy v. The Wedding Party, Inc. (1987), 30 Ohio St.3d 35, 36, 506 N.E.2d 212. Therefore, we must refer to
{¶11} Pursuant to the above rule, a trial court may not enter summary judgment if it appears that a material fact is genuinely disputed. The party moving for summary judgment bears the initial burden of informing the triаl court of the basis for its motion and identifying those portions of the record that demonstrate the absence of a genuine issue of material fact. The moving party may not make a conclusory assertion that the nonmoving party has no еvidence to prove its case. The moving party must specifically
{¶12} At issue in the case sub judice is whether appellee’s complaint in this case was barred by the two-dismissal rule of
{¶13} “(a) filing a notice of dismissal at any time before the commencement of trial * * *.
{¶14} “Unless otherwise stated in the notice of dismissal or stipulation, the dismissal is without prejudice, exceрt that a notice of dismissal operates as an adjudication upon the merits of any claim that the plaintiff has once dismissed in any court.” (Emphasis added.)
{¶15} In the case sub judice, appellee filed a complaint for foreclosurе against appellants on June 14, 2005, (Case No. 05CV596) based on the same note and mortgage. Appellee, in its complaint in such case, alleged that appellants owed appellee $65,573.00 plus interest at the rate of 8.993% per annum from April 10, 2005. Appellee filed a Notice of Voluntary Dismissal of such case without prejudice pursuant to
{¶16} The Ohio Supreme Court, in U.S. National Bank Assn. v. Gullotta, 120 Ohio St.3d 399, 2008-Ohio-6268, 899 N.E.2d 987, recently addressed the apрlication of the two-dismissal rule of
{¶17} On June 2003, Gullotta executed an adjustable rate note and a mortgage in the amount of $164,900.00 with MILA, Inc., which subsequently assigned the note to U.S. Bank. On April 9, 2004, U.S. Bank filed a сomplaint for money judgment, foreclosure, and relief, declared the entire debt due, and prayed for judgment in foreclosure in the entire amount of the principal due on the note, $164,390.91, plus interest at the rate of 7.35 percent per year from November 1, 2003. On June 8, 2004, U.S. Bank voluntarily dismissed that complaint pursuant to
{¶18} Thereafter, on September 9, 2004, U.S. Bank filed a second complaint for money judgment, foreclosure, and relief. Again, the bank alleged a default under the note and mortgage, declared the entire debt due, and prayed for judgment in foreclosure in the amount of the principal due on the note, $164,390.91, plus interest at the rate of 7.35% percent per year from December 1, 2003. On March 15, 2005, U.S. Bank dismissed that complaint pursuant to
{¶20} Gullotta argued to the trial court that the third foreclosure action was barred by the doctrine of res judicatа because, pursuant to
{¶21} In reversing the judgment of this Court and holding that res judicata barred U.S. Bank’s third foreclosure cоmplaint, the Ohio Supreme Court, in Gullotta, held that each missed payment under the promissory note and mortgage did not give rise to a new claim and that
{¶22} “The key here is that the whole note became due upon Gullotta‘s breach, not just the installment he missed. There is a distinction between an action for recovery of installment payments under an installment note where the entire principal is accelerated, and an action to recover for nonpayment under an installment note where only the amount of the principal to date, and no futurе amount, is sought. The general rule that each missed payment in an installment loan gives rise to a separate cause of action does not hold true when there is an acceleration clause in the loan agreement:….
{¶23} “By agreeing to an acceleration clause, the parties in this case have avoided the operation of the general rule that nonpayment on an installment loan does not constitute a breach of the entire contract. In a contract with an acceleration clause, a breach constitutes a breach of the entire contract. Once Gullotta defaulted and U.S. Bank invoked the acceleration clause of the note, the contract bеcame indivisible. The obligations to pay each installment merged into one obligation to pay the entire balance on the note.” Id at paragraphs 28-29, 31.
{¶24} The Ohio Supreme Court, in Gullotta, further noted that although U.S. Bank’s complaint had changed, the operative fact remained the sаme and that U.S. Bank could not save its claims from the two-dismissal rule simply by changing the relief sought in its complaint.
{¶25} In the case sub judice, all of the complaints arose from the same note, the same mortgage and the same default. From the time of аppellants’ original default, the entire principal became due as a result of the acceleration clause in the note. The
{¶26} Based on the foregoing, we find that the two-dismissal rule of
{¶27} Appellants’ two assignments of error are, therefore, sustained.
{¶28} Accordingly, the judgment of the Richland County Court of Common Pleas is reversed and this matter is remanded for further proceedings.
By: Edwards, J.
Wise, P.J. and
Delaney, J. concur
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JUDGES
JAE/d0319
For the reasons stated in our accompanying Memorandum-Opinion on file, the judgment of the Richland County Court of Common Pleas is reversed and this matter is remanded to the trial court for further proceedings. Costs assessed to appellee.
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JUDGES