BEVERLY FERGUSON v. WILLIE L. DEMORE, ET AL.
No. 103289
Cоurt of Appeals of Ohio, EIGHTH APPELLATE DISTRICT, COUNTY OF CUYAHOGA
September 1, 2016
2016-Ohio-5620
BEFORE: E.A. Gallagher, P.J., E.T. Gallagher, J., and S. Gallagher, J.
Civil Appeal from the Cuyahoga County Court of Common Pleas, Case No. CV-13-806433
John J. Schneider
Gerald R. Walton
Gerald R. Walton & Associates
6060 Rockside Woods Blvd.
Spectrum Bldg., Suite 200
Independence, Ohio 44131
APPELLEE, PRO SE
Willie L. Demore
4378 Neville Road
Cleveland, Ohio 44121
APPELLEE, PRO SE
John C. Ferguson, III
6009 White Pine Drive
Bedford Heights, Ohio 44146
ALSO LISTED:
ATTORNEY FOR PLAINTIFF WOODS COVE II, L.L.C.
Andrew M. Tomko
Law Office of Manbir S. Sandhu, L.L.C.
1213 Prospect Avenue, Suite 300
Cleveland, Ohio 44115
Marlon A. Primes
Assistant United States Attorney
Office of the United States Attorney
United States Courthouse, Suite 400
801 W. Superior Avenue
Cleveland, Ohio 44113
ATTORNEY FOR DEFENDANT, STATE OF OHIO, DEPARTMENT OF TAXATION
Michael DeWine
Attorney General of Ohio
BY: Donn D. Rosenblum
Assistant Attorney General
Ohio Attorney General‘s Office
Collections Enforcement Section
150 East Gay Street, 21st Floor
Columbus, Ohio 43215
ATTORNEY FOR DEFENDANT, CUYAHOGA COUNTY TREASURER
Timothy J. McGinty
Cuyahoga County Prosecutor
BY: Adam D. Jutte
Assistant Prosecuting Attorney
310 West Lakeside Avenue
Courthouse Square, Suite 3000
Cleveland, Ohio 44113
EILEEN A. GALLAGHER, P.J.:
{¶1} Cross-claim plaintiff-third-party plaintiff-appellant Beverly Ferguson (“Ferguson“) appeals from an order entered by the Cuyahoga County Court of Common Pleas granting her default judgment on her cross-claim against cross-claim defendant-appellee Willie Demore (“Demore“) and her third-party complaint against third-party defendant-appellee John C. Ferguson, III (“John Ferguson“) (collectively, “appellees“). Ferguson‘s claims against appellees arise out of John Ferguson‘s forgery of Ferguson‘s signature on a special power of attorney that John Fergusоn then used, without Ferguson‘s knowledge or consent, to execute a warranty deed that transferred her undivided one-half interest in a parcel of real property they jointly owned, along with his own undivided one-half interest in the property, to Demore. Ferguson argues that the trial court erred in vacating the deed only as to the undivided one-half interest Ferguson had previously held in the property. She contends that the trial court should have vacated the deed in its entirety and awarded her the full interest in the property as compensation for the damages she sustained as a result of appellees’ actions. For the reasons that follow, we affirm the trial court‘s judgment.
Factual Background and Procedural History
{¶3} On August 24, 2005, a special power of attorney, purportedly executed by Ferguson, appointed John Ferguson as her attorney-in-fact (the “special power of attorney“). The special power of attorney was recorded on November 18, 2005. Pursuant to the special power of attorney, John Ferguson executed a warranty deed on November 16, 2005, purporting to transfer both his undivided one-half interest in the property and Ferguson‘s undivided one-half interest in the property to Demore (the “deed“). The deed was recorded on November 18, 2005. Ferguson did not sign the special power of attorney and did not otherwise authorize the transfer of her undivided one-half interest in the property to Dеmore or anyone else. John Ferguson had forged her name on the special power of attorney.
{¶5} On December 23, 2013, Woods Cove filed a motion for default judgment.2 Ferguson filed an opposition to the motion and moved for leave to file an file an answer, counterclaim (against Woods Cove), cross-claim (against Demore)3 and third-party сomplaint (against John Ferguson) instanter. The magistrate granted Ferguson‘s motion for leave, and Ferguson‘s answer, counterclaim, cross-claim and third-party complaint “with request for legal and equitable relief” was deemed filed as of January 9, 2014.
{¶6} In her counterclaim, Ferguson alleged that the foreclosure action was a “cloud upon her title” to the property and sought “in part to quiet the title to same.” In her third-party complaint, Ferguson alleged that John Ferguson knew she was “not competent” to execute the special power of attorney because “she was thoroughly loss [sic] within the drug subculture” in 2005 and “did not enter transitory housing to help her achieve sobriety until very late in 2008 and/or early 2009.” Ferguson further alleged that
{¶7} In her cross-claim against Demore, Ferguson alleged that Demore (or others acting on his behalf) “knew or should have known,” “upon examining the necessary documents within the chain of title,” that (1) Ferguson‘s signature on the special power of attorney did not match her signature on the mortgage and (2) the special power of attorney was not recorded at the time the deed was executed. Ferguson further alleged that Demore “knowingly and/or recklessly” caused a “cloud upon [her] title” to the property and damaged her interest in the property by failing to pay property taxes due on the property and by renting the property and retaining the rent payments.
{¶8} In the prayer to her counterclaim against Woods Cove, Ferguson requested the following relief:
WHEREFORE, Counterclaim Plaintiff Beverly A. Ferguson respectfully prays for judgment in her Counterclaim to quiet title to the property identified by Cuyahoga County, Ohiо Permanent Parcel No. 139-13-026; and prays this Honorable Court to restore to her the proper title to the property cleared of Plaintiff‘s and the other parties’ attempts and efforts to besmirch her title to same. Counterclaim Plaintiff prays for judgment in excess of Twenty-Five Thousand Dollars ($25,000.00) and/or the complete restoration of her real property interests which have been degraded; necessary attorney fees, and any and all further actual and/or equitable relief this Honorable Court finds to be warranted.
WHEREFORE, the Third Party Plaintiff respectfully requests judgment against the Third Party Defendant as and for damagеs due to his fraudulent actions undertaken while she was incompetent due to chronic uncontrolled drug abuse and addiction; which actions wrongfully alienated and/or transferred her lawful property interests; and which actions caused her to be damaged economically; and which actions caused her to be required to incur attorney‘s fees so as to vindicate her lawful property interests which were fraudulently taken from her. The Third Party Plaintiff prays for judgment for all her damages to her interest(s) in an amount well in excess of, or greater than Twenty Five Thousand Dollars ($25,000.00). The Third Party Plaintiff further asks for an award of attorney‘s fees and interest upon her damages and further requests reimbursement up to and including recovery of her total real property interests.
{¶10} In the prayer to her cross-claim against Demore, Ferguson requested the following relief:
WHERE[FORE], Cross Claim Plaintiff Beverly A. Ferguson, by and through undersigned counsel, respectfully requests judgment against Cross Claim Defendant Willie L. Demore that he has knowingly and/or recklessly caused a cloud upon the title of Beverly A. Ferguson to the subject property. Beverly A. Ferguson, by and through her counsel, respectfully seeks in excess of Twenty Five Thousand Dollars ($25,000.00) as for appropriate compensation for injuries to her real property interests. Cross Claim Plaintiff further requests this Honorable Court to quiet the title she holds or should hold to the same property. Plaintiff further requests that this Honorable Court find аnd hold that Cross Claim Defendant Willie L.
Demore knew or should have know[n] that the Special Power of Attorney was not filed of record when the Warranty Deed was effectuated; and that this an[d] other irregularities require a finding that Willie Demore was not a[n] “arm[‘]s-length” bona fide purchaser of the subject real property free of any defects in the chain of title. Plaintiff also requests that the Cross Claim Defendant be required to pay and/or redeemed [sic] the property taxes due and owning [sic], as well as an [sic] attorney fees awarded to the Plaintiff, if any.
{¶11} Demore and John Ferguson did not answer Ferguson‘s cross-claim or third-party complaint. On May 27, 2014, Ferguson filed a motion for default judgment against Demore and John Ferguson. A hearing was held on the motion4 and, on September 17, 2014, the magistrate issued his decision granting Ferguson‘s motion for default judgment against Demore on her cross-claim and against John Ferguson on her third-party complaint. The magistrate stated that although Ferguson had characterized her claims against Demore and Ferguson as “quiet title actions,” he considered her claims as claims for declaratory judgment under
{¶12} Based on these admitted facts, the magistrate declared the special power of attorney to be void and determined that Ferguson was entitled to (1) a declaratory judgment invalidating the transfer of her undivided one-half interest in the property to Demore and (2) a partial vacation of the deed “as pertains only to the undivided one-half interest that she previously held.” However, the magistrate determined that the remaining one-half interest in the property that had been previously held by John Ferguson would remain held by Demore. The magistrate concluded that there was “no basis in law or equity for stripping an otherwise valid property interest from one individual and granting it to another individual damaged by the fraudulent actions of the first” and pointed out that Ferguson had not cited any authority supporting the imposition of such a remedy. With respect to Ferguson‘s claim for damages, the magistrate noted that although Ferguson had sought “significant money damages” from appellees “as compensation for the injuries caused to her property interests,” the record contained no evidence of the amount of money damages, if any, she sustained as a result of appelleеs’ actions. Accordingly, the magistrate made no findings concerning the amount of damages, if any, due Ferguson.
{¶13} Demore filed objections to the magistrate‘s decision and a motion for leave to file an answer to the cross-claim instanter. Demore claimed that (1) he was not properly served with the cross-claim and did not have timely notice of the hearing on
{¶14} Ferguson also filed objections to the magistrate‘s decision. She argued that the magistrate erred in vacating only the transfer of her undivided one-half interest in the property to Demore and asserted, based on law governing fraudulent conveyances, that the transaction should have been declared void ab initio and vacated in its entirety. She maintained that “because of his illegal and fraudulent actions,” the undivided one-half interest in the property previously held by John Ferguson could not “legally and equitably” be returned to John Ferguson and that it, therefore, should have been awarded to Ferguson along with her own undivided one-half interest in the property. Ferguson argued that “given the very unique facts of this case,” the court could award her “title to the total property” “by way of [a constructive] trust.” Ferguson also requested that she be permitted to supplement the record with evidence of the rental income she had lost as a result of appellees’ actions or, alternatively, that the court schedule a hearing on damages.
{¶15} The trial court denied Demore‘s motion for leave to answer Ferguson‘s cross-claim and issued a judgment entry overruling Demore‘s and Ferguson‘s objections
{¶16} The trial court concluded that the magistrate‘s entry of a declaratory judgment, invalidating the transfer of Ferguson‘s interest in the property, was “proper.” The trial court vacated the special power of attorney in its entirety, declared the deed void to the extent it transferred Ferguson‘s interest in the property to Demorе and ordered that the special power of attorney and any interest of Demore in the property derived from the deed‘s purported transfer of title from Ferguson to Demore be canceled and released. The trial court further held that Ferguson could present evidence to support her claim for damages and that a hearing on damages could be scheduled, if necessary.
{¶18} Following his and Allam‘s testimony, Ferguson‘s counsel informed the court that Ferguson would accept the remaining оne-half interest in the property held by Demore, i.e., the one-half interest in the property previously held by John Ferguson, in lieu of a judgment against Demore for the $27,446.43 in damages she sustained. The magistrate rejected Ferguson‘s proposal, indicating that Ferguson could not, “at the last minute,” “essentially pull the rug out from under the court and the other parties who were not on notice” and seek “new relief” that had not been requested in her pleadings. The magistrate indicated that he was “not going to stand for” Ferguson‘s attempt to “amend [her pleadings] at this hearing.”
{¶19} On June 17, 2015, the magistrate issued a decision awarding Ferguson $27,446.43 in damages against Demore and $9,885.00 in attorney fees against Demore and John Ferguson, jointly and severally. Onсe again, Ferguson filed objections to the magistrate‘s decision, claiming that she was entitled to the remaining one-half interest in the property held by Demore. She argued that because Demore was “judgment proof,” because the $27,446.43 monetary judgment awarded Ferguson against Demore “vastly exceeds of half of the total value of the property” and that because she “had no ready means” to sell her half-interest in the property for “anything near its objective market value” or to derive income from the property due to the judgment liens and claims of Demore‘s creditors, the “only means of truly making her whole” and to avoid Demore
{¶20} Pursuant to
[T]he Court finds that Ferguson‘s answer/counterclaim/ cross-claim/third-party complaint demanded “appropriate compensation for injuries to her real property interests,” in an amount exceeding $25,000.00, from both defendant Willie Demore (“Demore“) and third-pаrty defendant John Ferguson III (“Ferguson III“). The Court also finds that Ferguson‘s pleading lacks any specific demands that the half-interest in the property at issue currently held by Demore be transferred to her, as compensation for the damages she alleged incurred as result of the actions of Demore and Ferguson III. The Court notes that Ferguson obtained default judgments against Demore and Ferguson III, following their failure to respond to her pleading. While Ferguson argues, in the Objection, that the transfer of Demore‘s half-interest to her was contemplated by the statement included in her pleading that demanded “appropriate compensation for injuries to her real property interests,” the Court notes that the full demand for damages requested “appropriate compensation for injuries to her real property interests” in an amount exceeding $25,000.00, and did not specifically demand transfer of Demore‘s half-interest to her. The Court finds, therefore, that the award of damages entered by the Court in favor of Ferguson is limited to the monetary damages demanded in her pleading. The Court further finds that Ferguson is not entitled, as part of her award of damages, to transfer of Demore‘s half interest in the property at issue, to her.
{¶21} Ferguson has raised the following three assignments of error for review:
Assignment of Error No. 1:
Assignment of Error No. 2:
The magistrate erred by letting crossclaim defendant Willie Demore retain a benefit obtained through fraud. (Magistrate‘s Decisions – September 17, 2014 and June 17, 2015)
Assignment of Error No. 3:
The magistrate erred by denying Beverly Ferguson full equitable relief up to and including the complete restoration of her property interests as demanded in her counterclaim and third-party complaint prayers for relief. (Magistrate‘s Decision – June 17, 2015)
Law and Analysis
{¶22} Ferguson‘s assignments of error are interrelated. We, therefore, address them together. Ferguson argues that the trial court erred in vacating the deed only as to the undivided one-half interest she had previously held in the property and awarding her damages against Demore. She contends that the trial court should have instead vacated the deed in its entirety and, in lieu of damages, awarded her the full interest in the property, i.e., not only the undivided one-half interest she had previously held in the property but also the undivided one-half interest John Ferguson had previously held in the property.
{¶23} Ferguson asserts that the trial court should have “vacate[d] the deed in whole” because (1) Demore knew John Ferguson‘s signature on the deed as Ferguson‘s attorney-in-fact was fraudulent, the “whole deed was fraudulent” and (2) the mortgage lien had to be “extinguished” before Demore could acquire an interest in the property and
{¶24} First, there has been no claim that John Ferguson lacked authority to transfer his undivided one-half interest in the property to Demore or that his transfer of his one-half interest in the property was otherwise fraudulent. Even if the trial court had erred in vacating the deed in part, rather than in total, it would not have provided a basis for transferring the one-half interest in the property previously held by John Ferguson to Ferguson. If the trial court were to have vacated the deed in total, the one-half property interest that John Ferguson had previously held would have reverted back to John Ferguson. Ferguson cites no authority that supports her contention that if the entire deed were to have been vacated, she would have been еntitled to receive the full interest in the property. Second, there is nothing in the record that supports Ferguson‘s claim that “extinguish[ment]” of the mortgage lien was dependent on Demore purchasing a full interest in the property. The mortgage lien could have been “extinguished” at any time simply by paying off the mortgage.
{¶25} Ferguson also contends that the trial court erred in determining that she was not entitled to an award of the full interest in the property based on
{¶26} A constructive trust is a “`“trust by operation of law which arises * * * against one who, by fraud, actual or constructive, * * * or who in any way against equity and good conscience, either has obtained or holds the legal right to property which he ought not, in equity and good conscience, hold and enjoy.“‘” Estate of Cowling v. Estate of Cowling, 109 Ohio St.3d 276, 2006-Ohio-2418, 847 N.E.2d 405, ¶ 18, quoting Ferguson v. Owens, 9 Ohio St.3d 223, 225, 459 N.E.2d 1293 (1984), quoting 76 American Jurisprudence 2d, Trusts, Section 221, at 446, (1975); see also Cundall v. U.S. Bank, 122 Ohio St.3d 188, 2009-Ohio-2523, 909 N.E.2d 1244, ¶ 39. It is “`the formula through which the conscience of equity finds expression.‘” Ferguson at 225, quoting Beatty v. Guggenheim Exploration Co., 225 N.Y. 380, 386, 122 N.E. 378 (1919). By imposing a constructive trust, the court orders a person who owns the legal title to property to hold or use the property for the benefit of another, or to convey the proрerty to another, to avoid unjust enrichment. Everhard v. Morrow, 8th Dist. Cuyahoga No. 75415, 1999 Ohio App. LEXIS 5705, *7-9 (Dec. 2, 1999). The party seeking to have a constructive trust imposed “`bears the burden of producing clear and convincing evidence justifying it.‘” Cowling at ¶ 23, quoting Univ. Hosps. of Cleveland, Inc. v. Lynch, 96 Ohio St.3d 118, 2002-Ohio-3748, 772 N.E.2d 105, paragraph three of the syllabus.
{¶27} “In all cases a judgment by default is subject to the limitations of Rule 54(C).”
{¶28} Ferguson claims that the trial court had authority to award her the full interest in the property or to impose a constructive trust under
{¶29} Ferguson asserts that the facts in this case “do not readily lend themsеlves to some strict [Civ.R.] 54(C) analysis,” that the demands in her answer, counterclaim and third-party complaint were sufficient to satisfy
{¶30} Here, the relevant prayer for relief was the prayer in Ferguson‘s cross-claim against Demore not the prayers in Ferguson‘s answer and counterclaim or third-party complaint. The relief requested in Ferguson‘s answer and counterclaim related to the claims by and against Woods Cove, not Demore. The trial court granted summary judgment against Ferguson on her claim against Woods Cove and, after Ferguson filed a notice of dismissal of her “claim for damages asserted solely against [Woods Cove],” dismissed her counterclaim against Woods Cove without prejudice. The relief demanded in the third-party complaint related to Ferguson‘s claim against John Ferguson. Ferguson cites to nothing in her cross-claim that she contends satisfies
{¶32} Ferguson asserts that Demore was “put on notice,” through the prayer to her cross-claim, that shе was seeking “in excess of Twenty Five Thousand Dollars ($25,000)” against him “as for appropriate compensation for her injuries to her real property interests.” She argues that since her expert testified at the damages hearing that Demore‘s one-half interest in the property is currently worth only $17,500 to $20,000, Demore could not “be surprised” if the trial court had awarded Ferguson the remaining one-half interest Demore holds in the property in lieu of money damages, given that
{¶33} “Civ.R. 54(C) is `clear on its face.‘” First Natl. Bank v. NE Port Invests., LLC, 6th Dist. Ottawa No. OT-14-027, 2015-Ohio-558, ¶ 22, quoting Bishop v. Grdina, 20 Ohio St.3d 26, 28, 485 N.E.2d 704 (1985). It prohibits a judgment by default that exceeds the amount prayed for in the demand or that is “different in kind” from the relief prayed for in the demand.
{¶34} Broad, general “catchalls” by a plaintiff that he or she is entitled to all remedies at law and equity or such relief as may be just and equitable do not negate
{¶36} As in the cases cited above, Ferguson was entitled only to the relief on default judgment that she demanded in her pleading. Because she did not include a demand for a transfer of the undivided one-half interest in the property previously held by John Ferguson, imposition of a constructive trust or even a general request for equitable rеlief in her cross-claim against Demore, the trial court properly concluded that Ferguson was not entitled to have Demore‘s remaining undivided one-half interest in the property transferred to her.6
{¶38} Judgment affirmed.
It is ordered that appellee recover of appellant costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to the common pleas court to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to
EILEEN A. GALLAGHER, PRESIDING JUDGE
EILEEN T. GALLAGHER, J., and SEAN C. GALLAGHER, J., CONCUR