Rimby v. Heritage Union Title Co., Ltd.Rimby v. Heritage Union Title Co., Ltd.
JUDGMENT:
Reversed and Remanded.
Atty. Michael O. Kivlighan, 3685 Stutz Drive, Suite 100, Canfield, Ohio 44406 and Atty. Nicholas S. Cerni, The Law office of Nicholas S. Cerni, 755 Boardman Canfield Road, Suite M-1, Youngstown, Ohio 44512 for Plaintiff-Appellant and
Dated: September 29, 2021
Robb, J.
{¶1} Plaintiff-Appellant Jody M. Rimby appeals the decision of the Columbiana County Common Pleas Court granting the motion to dismiss filed by Defendants-Appellees Heritage Union Title Company, Ltd. and David J. Davanzo in her action seeking a declaration on the release of escrowed funds and asserting tort claims against the title company. Appellant contends: her complaint sufficiently alleged an actual and justiciable controversy seeking declaratory relief; the court improperly considered items outside of the complaint in granting dismissal under
{¶2} Appellees contend the court lacked subject matter jurisdiction to rule on the request for declaratory relief. We conclude the court had jurisdiction and the court’s ruling of dismissal and release of escrowed funds was improper. For the following reasons, the trial court’s judgment is reversed, and the case is remanded for further proceedings.
STATEMENT OF THE CASE
{¶3} On September 28, 2020, Appellant filed a complaint seeking declaratory relief against the title company and Davanzo. The complaint also contained tort claims for unjust enrichment and conversion against the title company. The factual section of the complaint said Appellant sold her home in Leetonia on February 27, 2020 and the title company retained part of the proceeds in escrow due to the mistaken belief her former spouse (Davanzo) had a lien in the amount of $12,000 against the residence due to an
{¶4} Attached as Exhibit A was a page from the closing disclosure, which said the title company would hold $12,005 for the clearing of title. Exhibit B was a page from the separation agreement in Columbiana County Common Pleas Court Case No. 1999 DR 157, which starts in the middle of the relevant sentence: “after the parties’ child * * * reaches the age of eighteen years, Wife shall pay to Husband TWELVE THOUSAND DOLLARS ($12,000.00) as and for his interest in said real estate. Husband shall immediately quit claim his interest to wife.” Exhibit C to the complaint was an October 27, 2004 bankruptcy schedule in which she listed Davanzo as a creditor for $12,000 as a result of an “unsecured property claim from prior divorce action”.
{¶5} Appellant’s complaint said: Davanzo never “filed for record” the decree in order to create a lien on the residence; she filed for Chapter 7 bankruptcy on July 30, 2004 listing the equity in the residence as $15,000; the real property exemption was $5,000 at the time; the trustee resolved the unprotected equity claim by having Appellant pay $5,000 into the bankruptcy estate; all creditors were notified to file a proof of claim since assets were recovered; Davanzo never filed a claim; and her debts were discharged on November 17, 2004.
{¶6} After setting forth these facts, count one of the complaint sought a declaration Appellant was entitled to the release of the escrowed funds as there was no existing claim or lien for which the title company could justifiably hold the proceeds from the sale of her home as any claim Davanzo had was discharged in bankruptcy. Count two claimed the title company was unjustly enriched at Appellant’s expense by accepting and retaining her money and refusing to turn it over; she claimed this was willful, wanton, and reckless and sought punitive damages. Count three claimed the title company was liable to her for conversion by exercising unauthorized and wrongful dominion over her property.
{¶7} The title company filed a motion to dismiss. First, the motion claimed: their title search revealed the decree ordering Appellant to pay Davanzo $12,000 for his interest in the residence (listed a marital asset) within a reasonable time of the child turning 18; Appellant informed the title company the debt was discharged in her 2004
{¶8} As to the unjust enrichment and conversion counts, the title company sought dismissal for failure to state a claim under
{¶9} The title company attached: a copy of the signed purchase agreement appointing the title company as the insurer of title; an escrow agent appointment executed by Appellant on February 27, 2020; and additional pages from the closing disclosure in Appellant’s Exhibit A (which showed the funds would be held in escrow to clear title) to demonstrate Appellant signed the closing disclosure on February 27, 2020.
{¶10} As to the claim for declaratory relief, the title company acknowledged a dispute over whether Appellant’s obligation to Davanzo was discharged in the 2004 Bankruptcy, but the title company moved to dismiss under
{¶11} The title company suggested it would (after dismissal) file a
{¶12} In supporting its jurisdictional argument, the title company reviewed bankruptcy law, acknowledging Appellant’s bankruptcy was governed by law prior to the 2005 amendments to
{¶13} Davanzo’s motion to dismiss the declaratory relief claim said: “under 12(B)(6), this Court lacks jurisdiction over the subject matter of the complaint.” He claimed the controversy must be raised in the domestic relations court as the bankruptcy court did not specifically rule on the matter and Appellant’s claim was governed by the separation agreement in 1999 DR 157.
{¶14} Within this discussion, Davanzo said Appellant’s obligation to pay him $12,000 was non-dischargeable in bankruptcy, citing pre-2005 amendment {¶15} Appellant’s response to the two motions to dismiss said her complaint satisfied {¶16} As to the jurisdictional argument, Appellant claimed the law cited in the dismissal motions merely said federal and state courts have concurrent jurisdiction over whether a debt was dischargeable and did not specify the court in the domestic relations {¶17} As to the tort claims, Appellant said the title company cited facts outside of the complaint and presented affirmative defenses which were not the proper subject of a motion to dismiss, claiming she was entitled to discovery to determine if the funds were properly retained. It was also pointed out the two tort claims against the title company would not have been heard in the domestic relations case. {¶18} In addressing the cited bankruptcy law, Appellant’s response pointed out the defense relied on (a)(5), which provided alimony, maintenance, and spousal support are not dischargeable, but the defense failed to disclose (a)(15), which governed the discharge of non-support obligations in connection with divorce proceedings. The latter section required the creditor to request exception of the debt from discharge and required the bankruptcy court, after notice and hearing, to find the debtor lacked the ability to pay the debt or find discharging the debt would result in a benefit to the debtor that outweighs the detrimental consequences to the former spouse. Appellant noted the post-2005 amendment states non-support divorce obligations are not dischargeable (even without an adversarial action balancing the hardships), but the parties agreed that amendment was inapplicable to her pre-existing bankruptcy discharge. {¶19} On January 13, 2021, the trial court granted the motions to dismiss based on {¶20} Appellant filed a timely notice of appeal. Her brief raises four assignments of error. But first, we address Appellees’ argument that the trial court lacked subject matter jurisdiction over the declaratory action. {¶21} The trial court’s dismissal entry cited {¶22} Instead of defending the trial court’s decision in the declaratory action, Appellees both argue the trial court’s dismissal of the request for declaratory relief can be upheld on other grounds: lack of subject matter jurisdiction. See {¶23} {¶24} Davanzo relies on our Loveday case. In the context of determining whether the state court had jurisdiction, we held: “when dischargeability of a marital debt is not raised in bankruptcy court, then it is an issue which may be ruled on by a court with {¶25} Here, the parties agreed a state court has jurisdiction over the specific dischargeability question after the discharge in bankruptcy. Davanzo’s dismissal motion attached the discharge, showing it was a general discharge with notice that a debt for support is not discharged. This was not part of the complaint, but in deciding a question of subject matter jurisdiction, the court can view items outside of the complaint. Southgate Dev. Corp. v. Columbia Gas Transm. Corp., 48 Ohio St.2d 211, 214, 358 N.E.2d 526 (1976). {¶26} We further observed in Loveday: “When determining whether [the former husband’s] obligation to pay the marital debt was in the nature of spousal support, the trial court is not acquiring jurisdiction over [the former husband’s) bankruptcy action. Instead, it is merely exercising its jurisdiction over this divorce action.” (Emphasis added). Loveday, 7th Dist. No. 02 BA 13 at ¶ 22. We remanded to the domestic relations court because that is where the case originated upon the wife’s motion for contempt filed in the domestic case. See id. See also Markley, 9th Dist. Wayne No. 07CA0085 (also arising from a contempt motion filed in the domestic case). These cases did not address whether the trial court can rule on the dischargeability issue in a declaratory judgment action or hold the matter can only be addressed within a prior domestic relations case. {¶27} Davanzo relies on the jurisdictional priority rule and says the domestic relations court first acquired jurisdiction in the 1999 divorce case. Appellant’s response to dismissal argued: because the domestic case had been completely adjudicated, there was concurrent jurisdiction until her declaratory judgment action invoked the jurisdiction of the general division. She also pointed out her action was not an attempt to attack or modify the prior decree. There was also an underlying suggestion that if Appellees wished to ensure the matter proceeded in the domestic relations case, the title company should have filed the {¶28} A court has full power to enforce its divorce decree or decree of dissolution with attached separation agreement. {¶29} The jurisdictional priority rule provides: between courts of concurrent jurisdiction, the court who first acquires jurisdiction over an action acquires jurisdiction, to the exclusion of all tribunals, to adjudicate upon the whole action and to settle the rights of the parties. State ex rel. Dannaher v. Crawford, 78 Ohio St.3d 391, 393, 678 N.E.2d 549 (1997). Once a court acquires jurisdiction of a cause of action, its authority continues until the matter is “completely and finally disposed of” and a court of concurrent jurisdiction cannot interfere. John Weenink & Sons Co. v. Court of Common Pleas of Cuyahoga Cty., 150 Ohio St. 349, 82 N.E.2d 730 (1948), paragraphs two and three of syllabus. {¶30} “The jurisdictional-priority rule requires that both actions be currently pending” and does not apply where a final judgment had been entered before the second action was filed. State ex rel. Consortium For Econ. & Cmty. Dev. v. Russo, 151 Ohio St.3d 129, 2017-Ohio-8133, 86 N.E.3d 327, ¶ 11. We also note “the jurisdictional-priority rule has no applicability when the cases are pending in the same court.” Id. at ¶ 14. “[I]f two actions are pending in the same court before different judges, the parties have a method for vindicating those interests that is not available when the cases are filed in different courts—a motion for consolidation.” Id. at ¶ 10. {¶31} Here, the final judgment in the domestic relations case was entered long ago. There was no pending domestic relations case when this case was filed in order to invoke the jurisdictional priority rule. See Rossi v. Rossi, 7th Dist. Mahoning No. 20 MA 0086, 2021-Ohio-2348, ¶ 26 (stating the domestic relations division was divested of jurisdiction after the final judgment until a new filing in the case; where a contempt action {¶32} We next point out, “the priority doctrine does not apply where two courts have exclusive jurisdiction over different issues.” In re B.N.S., 2020-Ohio-4413, 158 N.E.3d 712, ¶ 18 (12th Dist.). The general jurisdiction of courts of common pleas is provided in {¶33} “The court of common pleas including divisions of courts of domestic relations, has full equitable powers and jurisdiction appropriate to the determination of all domestic relations matters.” {¶34} We first mention that after a final divorce decree is entered, proceedings that may include interpreting a domestic relations decree have been permitted to occur in a division other than the domestic relation division, especially when other parties are involved. In a case cited by Appellant below, the Eighth District said “[w]hen a division of the common pleas has completed the disposition of a matter that is within the division’s special assignment and later a controversy arises implicating both matters within the specialty and other issues not peculiar to it,” the general and domestic relations divisions have concurrent jurisdiction. Price v. Price, 16 Ohio App.3d 93, 95, 474 N.E.2d 662 (8th Dist.1984), citing Wagner v. Wagner, 6th Dist. Lucas No. L-83-072 (July 22, 1983). The court was not dissuaded by the argument that Cuyahoga County had a separate statutory {¶35} More on point, the Eighth District has applied the general holding to a case seeking to enforce the divorce decree: “Because the domestic relations court had issued a judgment granting the divorce and providing for the division of the property, the domestic relations court no longer had exclusive jurisdiction over the matter and the common pleas court, which has concurrent jurisdiction, had the power to enforce the order of the domestic relations court.” Khan v. Hughes, 8th Dist. Cuyahoga No. 102651, 2015-Ohio-4502, ¶ 14 {¶36} The Eleventh District recently held the general division had subject matter jurisdiction in a declaratory judgment action to determine title to alleged estate assets, where the court was required to interpret a separation agreement incorporated into a divorce decree. Szokan v. Stevens, 11th Dist. Lake No. 2020-L-020, 2020-Ohio-7001, ¶ 16-27. The court pointed out the jurisdiction of the domestic relations court ended with the decree and was not then re-invoked by motion. Id. at ¶ 28. {¶37} We need not further delve into an analysis on the particular subject of a general division interpreting a domestic relations division’s decree as that is not the situation before this court. The above-reviewed cases (which allowed general division to exercise jurisdiction after the final decree) involved counties with separate statutory domestic relations divisions with a statutorily assigned domestic relations judge. {¶38} Columbiana County does not have a separate statutory domestic relations division or judge. See {¶39} “Subject-matter jurisdiction is the power of a court to entertain and adjudicate a particular class of cases.” Bank of Am., N.A. v. Kuchta, 141 Ohio St.3d 75, 2014-Ohio-4275, 21 N.E.3d 1040, ¶ 18. “[T]he court of common pleas is a court of general jurisdiction, with subject-matter jurisdiction that extends to ‘all matters at law and in equity that are not denied to it.’ ” Id. at ¶ 20. The prior domestic relations decree was filed in the same court as this complaint. Therefore, the same statutory division of the common pleas court presiding in this case would have presided over any motion which could have been filed under the domestic relations case. The court of common pleas in Columbiana County had the power to entertain and adjudicate the claim. The trial court implicitly and correctly found that its jurisdiction extended to the matters presented in Appellant’s complaint. Accordingly, Appellees’ argument on subject matter jurisdiction is overruled. {¶40} Appellant’s first two assignments of error state: “The Trial Court erred in granting Defendant’s Motion to Dismiss.” “The Trial Court erred as a matter of law by failing to apply the correct standard of review when granting the defendant’s motion to dismiss the plaintiff’s complaint based upon allegations and assertions contained outside the pleadings.” {¶41} A {¶42} “When a motion to dismiss for failure to state a claim upon which relief can be granted presents matters outside the pleading and such matters are not excluded by the court, the motion shall be treated as a motion for summary judgment and disposed of as provided in {¶43} Appellant states the trial court improperly considered items outside of the face of the complaint and items “outside of this action” without converting the motion and providing notice. Appellees complain Appellant’s brief does not specify exactly what items outside of the complaint she believes the court improperly considered. Yet, Appellant refers to the trial court’s consideration of “separate, predecessor actions.” {¶44} Appellant’s complaint contained various allegations about the domestic relations case and the bankruptcy case, and she attached related documents to her complaint: a bankruptcy schedule, one page from the separation agreement which was incorporated into the dissolution decree, and the first page of the closing disclosure. “Material incorporated in a complaint may be considered part of the complaint for purposes of determining a {¶45} Hence, the court could properly consider the attachments to Appellant’s complaint. Yet, this would not allow the court’s perusal of the files in other cases, even cases in the same court. As discussed further infra, the trial court could not have considered attachments to the dismissal motions in ruling on a {¶46} On the opposite side of the coin, there is the issue of an item the trial court found lacking from the complaint. (Davanzo attached the general discharge to his dismissal motion while arguing only the domestic court could exercise jurisdiction to determine whether the obligation was in the nature of support and fell outside of the discharge.) The trial court’s dismissal entry said: “The Plaintiff filed an action in bankruptcy court and claims the debt owed to Defendant, David J. Davanzo, was discharged. However, the only documentation attached to her complaint is a Schedule F form listing her unsecured creditors. There is no certified copy showing those debts were discharged.” {¶47} Nevertheless, a plaintiff need not prove their claim in the complaint. See Pfalzgraf v. Miley, 7th Dist. Monroe No. 19 MO 0006, 2019-Ohio-4920, ¶ 13. We note {¶48} Appellant states her complaint alleged sufficient facts to survive a motion to dismiss for failure to state a claim for a declaratory judgment. Pursuant to {¶49} Appellant emphasizes the complaint set forth facts as to the elements for declaratory relief: a real controversy between the parties, which is justiciable and ripe for speedy relief in order to preserve the rights of the parties which may be impaired. See Burger Brewing Co. v. Liquor Control Comm., 34 Ohio St.2d 93, 97, 296 N.E.2d 261 (1973). She points out a declaratory judgment would terminate the uncertainty or controversy as required by {¶50} Notably, the title company did not argue Appellant insufficiently stated a claim for declaratory relief as to the escrowed funds, raising only subject matter jurisdiction on this claim. Davanzo cited {¶51} As Appellant points out, the complaint must merely contain a short and plain statement of the claim showing entitlement to relief and a demand for relief. {¶52} In effect, the trial court found the complaint sufficiently set forth a claim that could be addressed via declaratory relief as it essentially granted declaratory relief to Davanzo, entering a negative declaration as to Appellant’s right to the escrowed funds. See {¶53} Appellant complains the trial court erred in ruling on the merits of the case without converting the dismissal motion to a summary judgment motion. A {¶54} The trial court stated although many debts are discharged in bankruptcy, a debt for a former spouse for alimony, maintenance, or support of the former spouse in connection with a separation agreement or divorce decree is not discharged in bankruptcy. The court then concluded the obligation was still owed by Appellant to Davanzo (and ordered the title company to release the escrowed funds to him). Constrained to the face of the complaint, the trial court thus concluded Appellant’s obligation in the decree to pay Davanzo $12,000 for his interest in the house after their child turned 18 was a debt for the support of Davanzo. {¶56} Furthermore, the court applied bankruptcy statutes in rendering a legal holding on the merits of the action where Appellant was only aware she was responding to a motion to dismiss on jurisdiction (and failure to state a claim on the torts). And, the court cited bankruptcy law on support which does not appear applicable from the face of the complaint. This leads to Appellant’s next assignment of error. {¶57} Even if the court could apply the bankruptcy law to the face of the complaint to ascertain if a debt was dischargeable at this earlier stage of the proceedings, Appellant states in her third assignment of error: “The Trial Court erred in its interpretation of Bankruptcy Law.” {¶58} The parties agree to the bankruptcy law in effect during Appellant’s 2004 bankruptcy applied. The motions to dismiss cited (a)(5) of {¶59} Pursuant to (a)(5), a discharge “does not discharge an individual debtor from any debt * * * to a spouse, former spouse, or child of the debtor, for alimony to, maintenance for, or support of such spouse or child, in connection with a separation agreement, divorce decree or other order of a court of record * * *.” {¶60} At the time of Appellant’s bankruptcy filing, does not discharge an individual debtor from any debt * * * not of the kind described in paragraph 5 that is incurred by the debtor in the course of a divorce or separation or in connection with a separation agreement, divorce decree or other order of a court of record, a determination made in accordance with State or territorial law by a governmental unit unless— (A) the debtor does not have the ability to pay such debt from income or property of the debtor not reasonably necessary to be expended for the maintenance or support of the debtor or a dependent of the debtor and, if the debtor is engaged in a business, for the payment of expenditures necessary for the continuation, preservation, and operation of such business; or (B) discharging such debt would result in a benefit to the debtor that outweighs the detrimental consequences to a spouse, former spouse, or child of the debtor * * *.” {¶61} Yet, {¶62} In applying (a)(5), the trial court quoted from our Loveday case. In Loveday, the former wife filed a post-decree contempt action in a domestic relations case due to the husband’s failure to pay the marital debts, including the mortgage on the marital {¶63} After citing {¶64} Appellant’s complaint did not admit her debt to Davanzo was in the nature of support. She attached a page from the separation agreement incorporated into the 1999 dissolution decree, and this page gave no indication Appellant’s obligation to pay Davanzo $12,000 for his quit-claimed interest in the residence after the child turned 18 was in the nature of Appellant’s support of Davanzo. She was the debtor in the bankruptcy, and the question under (a)(5) would be whether her debt to her former spouse was for alimony to, maintenance for, or support of her former spouse. {¶65} As to (a)(15), which was raised in response to the motions to dismiss and which was not addressed by the trial court, Appellant’s complaint did not admit Davanzo filed a request under {¶66} Davanzo does not address (a)(5) or (a)(15) on appeal, urging merely the general division of the common pleas court lacked jurisdiction to issue a declaratory judgment about the effect of a bankruptcy discharge on an obligation in a domestic relations decree. The title company cites (a)(5), suggesting if that issue should be determined in domestic relations court, then any issue of dischargeability of an obligation in the decree should be determined in domestic relations court as it is for the domestic relations court to ensure the obligation is not one in support in order to apply (a)(15). See {¶67} Davanzo would need to establish how a property distribution ordering Appellant to pay Davanzo for his share of the house in the future (when the child turns 18) could be considered her obligation to provide support or maintenance of Davanzo or alimony owed to him. From the face of the complaint (including its attachments) and the dismissal arguments, it was erroneous to conclude Appellant could prove no set of facts entitling her to the escrowed funds. In any event, this is another topic remaining for a summary judgment motion if Davanzo feels he can legally support making it. {¶68} As an aside, Davanzo’s brief mentions he would argue on remand that even if the personal debt to him was discharged, he had in rem debt (a lien) which would not have been discharged; he claims he will argue the debt created in the decree was a lien because it specifically related to property and Appellant did not affirmatively seek to discharge a lien in her bankruptcy. The latter fact is outside of the complaint and again the entire decree is not part of the record on a motion to dismiss. {¶69} For a lien to be created in a divorce decree, it must contain sufficient indicators of an intention to make particular identified property a security for an obligation {¶70} Davanzo acknowledges this issue is not before this court. And, he did not raise the issue below (specifying the issue was whether the debt was support and urging the question could only be answered by the domestic relations court). Appellant was thus unable to respond to the topic in the trial court. This was another topic to be addressed in summary judgment motions, rather than through a dismissal, and it does not appear the court rendered a judgment on this unidentified ground. {¶71} As for the unjust enrichment and conversion counts filed against only the title company, Appellant’s brief does not mention the elements of either tort and does not specifically address the dismissal of those counts. Yet, this appears to be because the trial court’s dismissal of the case seemed wholly based on the ruling that Davanzo was entitled to the escrowed funds; i.e., if she was not entitled to the escrowed funds, then she failed to state a claim against the title company for unjust enrichment or conversion. {¶72} The title company asked for {¶74} These items were not part of the face of the complaint and could not be considered at the {¶75} Appellant’s fourth and final assignment of error contends: “The trial court improperly granted relief not prayed for by the litigants.” {¶76} Appellant observes a pleading, including a counterclaim or cross-claim, must contain a short and plain statement of the claim showing entitlement to relief and a demand for relief. {¶77} Davanzo concedes the trial court could not order the release of the funds to him, but this concession is based on his contention the common pleas court lacked jurisdiction to rule on Appellant’s request for declaratory relief. The title company claims, if this appeal had not been filed, it would have filed a post-decree motion under {¶78} As recognized supra, although the trial court granted motions to dismiss, the court essentially ruled on the merits of the declaratory judgment action and entered declaratory judgment in favor of Davanzo. We note a negative declaration is permitted in a declaratory judgment action. See {¶79} In conclusion, the court had subject matter jurisdiction, but the dismissal of the complaint accompanied by a negative declaration was not appropriate. The trial court’s judgment is reversed, and the case is remanded for further proceedings. Donofrio, P J., concurs. D’Apolito, J., concurs. A certified copy of this opinion and judgment entry shall constitute the mandate in this case pursuant to This document constitutes a final judgment entry.JURISDICTION IN DECLARATORY ACTION ON ESCROWED FUNDS
ASSIGNMENTS OF ERROR 1-2: DISMISSAL
ASSIGNMENT OF ERROR THREE: BANKRUPTCY LAW
TORT CLAIMS
ASSIGNMENT OF ERROR 4: ORDER TO RELEASE FUNDS
NOTICE TO COUNSEL