WBCMT 2007-C33 OFFICE 7870, LLC, Plaintiff-Appellant, vs. BREAKWATER EQUITY PARTNERS, LLC, THOMPSON NATIONAL PROPERTIES, LLC, TNPPM KEMPER POINTE, LLC, and ANTHONY W. THOMPSON, Defendants-Appellees.
APPEAL NO. C-180127
TRIAL NO. A-1304126
IN THE COURT OF APPEALS FIRST APPELLATE DISTRICT OF OHIO HAMILTON COUNTY, OHIO
September 27, 2019
[Cite as WBCMT 2007-C33 Office 7870, L.L.C. v. Breakwater Equity Partners, L.L.C., 2019-Ohio-3935.]
BERGERON, Judge.
Civil Appeal From: Hamilton County Court of Common Pleas. Judgment Appealed From Is: Reversed and Cause Remanded.
Edward J. McTigue, for Defendants-Appellees.
BERGERON, Judge.
{¶1} The genesis of this appeal begins with a seemingly-innocuous decision to seek leave to amend a complaint. The trial court obliged, setting off a cascade of subsequent events that might render this case a fixture in the lore of civil procedure professors for years to come.
{¶2} The decision to amend the complaint arose at an unusual juncture: after the plaintiff had secured a partial agreed judgment. We are called upon to decide whether orders preceding the amendment divested the trial court of its jurisdiction over this particular case and whether we must undo over three years of litigation—during which that jurisdiction was never questioned by anyone.
{¶3} Part of the problem here is that “jurisdiction” is a term of many stripes, and one that is oft-misunderstood based on its somewhat haphazard use. This case generated confusion between “jurisdiction over the case” and “subject matter jurisdiction,” as the trial court essentially conflated the two concepts. But defects in the former are waivable, whereas defects in the latter are not. This case involves “jurisdiction over the case,” and by sitting on their hands for three years, the defendants waived any objection to the trial court‘s jurisdiction over this case. We ultimately conclude that the trial court correctly allowed the amendment of the complaint and that even if that were erroneous, any jurisdictional defect has long since been waived. We accordingly reverse the decision to dismiss the case for lack of jurisdiction and remand this matter to the trial court.
I.
{¶4} Plaintiff-appellant WBCMT 2007-C33 Office 7870, LLC, (“WBCMT“) initially filed a two-count lawsuit for breach of contract and foreclosure against 22 separate borrower entities (“Borrowers“), the Hamilton County Treasurer, and 100
{¶5} Subsequent to the Partial Agreed Judgment, WBCMT sought leave to amend its complaint (without opposition) in mid-2014. The trial court entered the order granting leave and the Confirmation Order on the same day. The amended complaint substituted the Borrowers with Breakwater Equity Partners, LLC, (“Breakwater“); Thompson National Properties, LLC, (“TNP“); TNPPM Kemper Pointe, LLC, (“TNPPM“), and Anthony W. Thompson (president of TNP); and substituted conversion, fraudulent conveyance, and unjust-enrichment claims for the breach-of-contract and foreclosure claims. The latter three defendants have responded as appellees in this appeal, and we refer to them, collectively, as “the Thompson Defendants.” According to WBCMT‘s allegations, the Borrowers had engaged TNP, by and through TNPPM, to manage their collateral real estate. TNP and TNPPM allegedly transferred significant sums generated from that real estate (also its collateral) to Breakwater (thereby stripping assets from which debt service payments could have been made), which WBCMT sought to recover via the amended complaint. But to the untrained eye, the amended complaint bears little, if any,
{¶6} Although the procedure was novel, no one complained about the move. The Thompson Defendants simply got on with the business of litigating the case, and after the case lingered for a while, WBCMT moved for, and secured, summary judgment on the amended complaint. The Thompson Defendants appealed, but we dismissed that appeal by a Judgment Entry—noting that the judgment entered in favor of WBCMT on the amended complaint did not determine punitive damages, attorney fees, or certain indeterminate amounts payable under the loan documents. Therefore, we dismissed the appeal for lack of a final order.
{¶7} Back in the trial court, WBCMT sought to render the judgment final by filing a “Notice of Conditional Waiver of Claims” related to its summary judgment. But the matter was assigned to a new judge in June of 2017, and the judge never acted on that request. Instead, following its review of the case, the trial court sua sponte ordered briefing on its continuing jurisdiction over the case—raising numerous questions about the finality of the Partial Agreed Judgment; the finality of the Confirmation Order, the effect of such finality (if any) on the amended complaint and the trial court‘s continuing jurisdiction; and the effect of the amended complaint (if valid) on prior orders of the trial court. After briefing and argument, the trial court concluded that it never had jurisdiction over the amended complaint because the Partial Agreed Judgment and Confirmation Order were final, appealable orders. It correspondingly vacated all orders and entries related to the amended complaint and dismissed the amended complaint without prejudice. With the stroke of a pen, the court erased three years of litigation. WBCMT now appeals the trial court‘s judgment.
{¶9} Jurisdiction over a particular case (also referred to as “jurisdiction over the case“), by contrast, connotes “the court‘s authority to proceed or rule on a case that is within the court‘s subject-matter jurisdiction.” Id., citing Pratts v. Hurley, 102 Ohio St.3d 81, 2004-Ohio-1980, 806 N.E.2d 992, ¶ 12. Put differently, “an inquiry into a party‘s ability to invoke a court‘s jurisdiction speaks to jurisdiction over a particular case, not subject-matter jurisdiction.” (Emphasis sic.) Id. at ¶ 22. Errors in that invocation “cause[] a judgment to be voidable rather than void.” Id. at 19, citing Pratts at ¶ 12.
{¶10} The third strand, personal jurisdiction, refers to the principle that the “Due Process Clause of the Fourteenth Amendment to the United States Constitution requires that a valid judgment imposing a personal obligation or duty in favor of the plaintiff may be entered only by a court having jurisdiction over the person of the defendant.” Meadows v. Meadows, 73 Ohio App.3d 316, 319, 596 N.E.2d 1146 (3d Dist.1992), citing Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565 (1877), and Internatl. Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). Generally, Ohio courts have personal jurisdiction over Ohio residents. Prouse, Dash & Crouch, L.L.P. v. DiMarco, 116 Ohio St.3d 167, 2007-Ohio-5753, 876 N.E.2d 1226, ¶ 5. A court‘s personal jurisdiction over a nonresident requires a more complex inquiry concerning the applicable long-arm statute, the civil rules, and/or relevant due-process considerations.
{¶11} Although the lines were blurred somewhat below, and to a certain extent on appeal, the parties all now agree the asserted defect that we consider today relates to jurisdiction over a particular case. That version of jurisdiction, however, has generated perhaps the least case law, so we must consider authority proffered on all three types of jurisdiction as we navigate the arguments of the parties and the decision of the trial court below. While analogies may be appropriate in certain respects, it is crucial to maintain appropriate distinctions between these legal concepts in considering this appeal, lest we fall into the same trap about which we have warned.
II.
{¶12} The jurisdictional questions raised by the trial court are rooted in the premise that the trial court lacked jurisdiction to grant the motion to amend the complaint, matters we review de novo. A threshold issue then, it seems to us, is whether
A.
{¶13} Under
{¶14} The rule also contemplates certain, specific situations in which tardy amendments, even postjudgment, may be appropriate: “[A]mendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion * * * at any time, even after judgment.”
{¶16} We do not see, nor have the Thompson Defendants directed our attention to, any line in the sand under the Civil Rules for purposes of when a complaint may be amended. Rather, flexibility informed by the trial court‘s discretion seems to rule the day. See Birmingham Fire Ins. Co. v. River Downs Race Track, 26 Ohio App.3d 139, 141, 499 N.E.2d 18 (1st Dist.1985) (upholding amendment to add claims more than four years after filing). Guidance from the Ohio Supreme Court suggests that, when weighing the propriety of a belatedly-amended pleading, courts should consider whether it is the product of bad faith, results in undue delay, or inflicts undue prejudice. See Hoover, 12 Ohio St.3d at 6; Peterson, 34 Ohio St.2d at 175; Patterson, 63 Ohio St.3d at fn. 1. On the record at hand, none of those considerations apply.
{¶17} We see no evidence—let alone any allegation—of bad faith against WBCMT. Nor have the Thompson Defendants articulated any undue prejudice
B.
{¶18} Rather than mounting a rule-based defense, the Thompson Defendants frame the operative timing question slightly differently—asking whether a final judgment in the original action preceded the amended complaint and accordingly divested the trial court of jurisdiction. The second trial court judge concluded that the presence of final judgments, both the Partial Agreed Judgment and Confirmation Order, stripped the court of further jurisdiction.2 For the reasons discussed below, we reach a different conclusion.
{¶20} WBCMT answers by pointing to Chatfield and Woods Sack Co., Inc. v. Nusekabel, 1st Dist. Hamilton No. C-980315, 1999 WL 960782 (Oct. 22, 1999), for the proposition that the number of formal counts of a complaint does not necessarily equate to the number of claims subject to disposition when considering finality for purposes of appeal. In Chatfield, the underlying complaint brought counts for a money judgment under a promissory note and for foreclosure on the mortgage. Id. at *2. Given the context of the complaint as a whole, however, this court concluded that the complaint set forth two additional claims for legal fees and protection costs. Id. It found that, given the presence of
{¶21} The Thompson Defendants say not so fast, endeavoring to limit the applicability of Chatfield by noting that it held that the foreclosure judgment aspect
{¶22} The trial court‘s opinion did not address Chatfield and instead primarily relied on CitiMortgage, Inc. v. Roznowski, 139 Ohio St.3d 299, 2014-Ohio-1984, 11 N.E.3d 1140, in finding that the Partial Agreed Judgment constituted a final order. Roznowski held: “[A] judgment decree in foreclosure that includes as part of the recoverable damages amounts advanced by the mortgagee for inspections, appraisals, property protection, and maintenance but does not include specific itemization of those amounts in the judgment is a final, appealable order pursuant to
{¶23} Perhaps anticipating this comeback, the Thompson Defendants are adamant that, if the Partial Agreed Judgment was not final, then WBCMT‘s subsequent execution upon it was not appropriate, featuring Marion Prod. Credit Assn. v. Cochran, 40 Ohio St.3d 265, 533 N.E.2d 325 (1988), in this regard. But that case concerned the propriety of foreclosure and sale where the mortgagees’ counterclaim remained outstanding: “It is reasonably well-settled in Ohio that a court which has before it both a claim and a counterclaim cannot enter a final judgment in favor of either party until both claims have been determined.” Id. at 270. That is not the case here—indeed, we consider a negotiated and agreed judgment without a counterclaim. We are not persuaded that Marion controls given the facts at hand.
{¶24} Moreover, in the Second District‘s opinion in Farmers State Bank v. Sponaugle, 2017-Ohio-4322, 92 N.E.3d 355 (2d Dist.) (“Sponaugle I“), modified on reconsideration, 2017-Ohio-7744, cause dismissed, 152 Ohio St.3d 1403, 2018-Ohio-723, 92 N.E.3d 876, appeal allowed in part, 152 Ohio St.3d 1405, 2018-Ohio-723, 92 N.E.3d 878, rev‘d on other grounds, Slip Opinion No. 2019-Ohio-2518, cited favorably by the Thompson Defendants for the proposition that execution on nonfinal judgments is improper, the court made a point that underscores the insignificance of any error in the sale to this appeal. It
{¶25} Relatedly, we point out that the Supreme Court nearly (but did not) decide a similar issue recently—the appellant therein presenting as an issue of law in the latest iteration of the Sponaugle case, Sponaugle II, Slip Opinion No. 2019-Ohio-2518, at ¶ 17: “A sheriff‘s sale can be confirmed even if the underlying foreclosure decree was a non-final order.” The court decided the case on different grounds (concluding the underlying foreclosure had been, contrary to what the Second District had determined, a final order), leaving the question open for another day. The concurring opinion, however, analyzed this point and concluded: “[N]othing in
{¶26} Unpersuaded that the Partial Agreed Judgment constituted a final order that would terminate further jurisdiction over the case, we shift to consideration of the Confirmation Order to see whether that changes the jurisdictional calculus. As the Supreme Court recently explained, “[t]he confirmation of sale is an ancillary proceeding limited to whether the sheriff‘s sale conformed to law.” Sponaugle II at ¶ 19. The trial court and the Thompson Defendants point to the Confirmation Order as a separate and independent basis that divested the court of jurisdiction. But their arguments miss the forest for the trees. Although we need not expound upon the nuances of confirmation orders and finality, suffice it to say that not every sale confirmation order is necessarily final for purposes of appeal. See JP Morgan Chase Bank v. Dewine, 3d Dist. Logan No. 8-08-20, 2009-Ohio-87 (dismissing appeal of confirmation of sheriff sale where such order was not a final order); Brake v. Keegan, 6th Dist. Sandusky No. S-17-034, 2018-Ohio-3979, ¶ 9 (“[W]here claims are still pending in the trial court after the order confirming the sale, the order must have a
{¶27} While a confirmation order certainly could be final (depending on the circumstances), the specific Confirmation Order here did not wrap up any of the loose ends left open by the Partial Agreed Judgment (nor did it contain
{¶28} Buttressing our analysis that neither the Partial Agreed Judgment nor the Confirmation Order were sufficiently final to terminate further jurisdiction over the case is our prior Judgment Entry in this case, which we view as more relevant than the Thompson Defendants or the trial court appreciated. In that entry, we dismissed the Thompson Defendants’ appeal of the grant of summary judgment to WBCMT on its amended complaint—explaining that the appealed entry did not determine punitive damages, amounts payable under the loan documents, or attorneys fees. Therefore, and consistent with cases like Roznowski, 139 Ohio St.3d 299, 2014-Ohio-1984, 11 N.E.3d 1140, and Miller, 113 Ohio St.3d 474, 2007-Ohio-2457, 866 N.E.2d 1059, discussed above, we held: “Because the trial court‘s order did not determine the action and prevent a judgment, it is not a final order.” While we
{¶29} Accordingly, for the reasons discussed above, we hold that the amended complaint was proper notwithstanding the Partial Agreed Judgment, Confirmation Order, and the execution thereon; the trial court properly continued to exercise jurisdiction over the case. We therefore sustain WBCMT‘s second, third, and fourth assignments of error. In any event, as we shall see below, any procedural irregularities or errors above relating to jurisdiction over the case ultimately fall victim to waiver.
C.
{¶30} Even if our journey through
{¶31} At oral argument, however, the Thompson Defendants maintained, for the first time, that WBCMT waived its waiver argument. Waiver constituted WBCMT‘s lead argument on appeal, and the Thompson Defendants never countered
{¶32} Having concluded that WBCMT did not waive its waiver argument, we turn to it now. It requires a study of the nature and characteristics of jurisdiction over the case—as the briefing, history below, and extant case law all suggest that this subject is prone to confusion and conflation. We hope—notwithstanding the convoluted path winding its way to this appeal—to elucidate this issue.
{¶33} As previewed at the outset of this opinion, “jurisdiction” may connote different things depending on the context. In Pratts, 102 Ohio St.3d 81, 2004-Ohio-1980, 806 N.E.2d 992, the Supreme Court of Ohio drew the distinction, in particular, between subject-matter jurisdiction and jurisdiction over the case:
“Jurisdiction” means “the courts’ statutory or constitutional power to adjudicate the case.” (Emphasis omitted.) Steel Co. v. Citizens for a Better Environment (1998), 523 U.S. 83, 89, 118 S.Ct. 1003, 140 L.Ed.2d 210 * * *. The term encompasses jurisdiction over the subject matter and over the person. * * * Because subject-matter jurisdiction goes to the power of the court to adjudicate the merits of a case, it can never be waived and may be challenged at any time. * * * It is a “condition precedent to the court‘s ability to hear the case. If a court acts without jurisdiction, then any proclamation by that court is void.” [State ex rel. Tubbs Jones v. Suster, 84 Ohio St.3d 70, 75, 701 N.E.2d 1002 (1998).]
* * *
The term “jurisdiction” is also used when referring to a court‘s exercise of its jurisdiction over a particular case. * * * ” ‘The third category of jurisdiction [i.e., jurisdiction over the particular case] encompasses the trial court‘s authority to determine a specific case within that class of cases that is within its subject matter jurisdiction. It is only when the trial court lacks subject matter jurisdiction that its judgment is void; lack of jurisdiction over the particular case merely renders the judgment voidable.’ ” [State v. Parker, 95 Ohio St.3d 524, 2002-Ohio-2833, 769 N.E.2d 846, ¶ 22 (Cook, J., dissenting.)], quoting [State v. Swiger, 125 Ohio App.3d 456, 462, 708 N.E.2d 1033 (9th Dist.1998)]. “Once a tribunal has jurisdiction over both the subject matter of an action and the parties to it, ‘* * * the right to hear and determine is perfect; and the decision of every question thereafter arising is but the exercise of the jurisdiction thus conferred * * *.’ ” State ex rel. Pizza v. Rayford (1992), 62 Ohio St.3d 382, 384, 582 N.E.2d 992, quoting Sheldon‘s Lessee v. Newton (1854), 3 Ohio St. 494, 499.
(Citations omitted.) Pratts at ¶ 11-12. Succinctly, the Pratts court concluded: “Subject-matter jurisdiction is a court‘s power over a type of case. * * * [O]nce conferred, it remains.” Id. at ¶ 34.
{¶34} Subsequent Supreme Court cases have returned to this analysis and built upon it. In In re J.J., 111 Ohio St.3d 205, 2006-Ohio-5484, 855 N.E.2d 851, the court determined whether the improper referral of an evidentiary panel to a visiting judge rendered a judgment void. The court characterized this improper referral as a “procedural irregularity” that impacts jurisdiction over the case rather than subject-matter jurisdiction. Id. at ¶ 15. Consistent with the distinction between the two doctrines, it held that failure “to preserve the error at the trial level * * * waive[s] all but plain error.” Id. at ¶ 13. The court even went so far as to enunciate a “duty of a complaining party seeking review [of jurisdiction over the case] to object in the trial court and timely preserve the error for appeal * * *.” Id. at ¶ 15.
{¶35} In Barnes v. Univ. Hosps. of Cleveland, 119 Ohio St.3d 173, 2008-Ohio-3344, 893 N.E.2d 142, the court considered whether a retired, appointed judge had authority to hear the case in issue. Like in J.J., the Supreme Court rejected the premise that the appellant challenged the court‘s subject-matter jurisdiction; therefore, it analyzed the exercise of jurisdiction over the case and concluded that the appellant “had a duty to object in the trial court * * *. Since [appellant] did not object, the error, if any, has been waived.” Id. at ¶ 27.
{¶36} State ex rel. Bell v. Pfeiffer, 10th Dist. Franklin No. 10AP-490, 2011-Ohio-2539, aff‘d, 131 Ohio St.3d 114, 2012-Ohio-54, 961 N.E.2d 181, concerned the propriety of a transfer of a case from one judge to another. Again, the court
{¶37} The term “procedural irregularity,” employed by the authority above, seems uniquely appropriate to the situation we encounter. Indeed, the Thompson Defendants even described the situation below in their appellate brief as a “procedural irregularity.” Supreme Court authority on procedural irregularities affecting jurisdiction over the case confirms that not only does such an irregularly
result in entries that are voidable as opposed to void; the irregularity is also waivable. See J.J., 111 Ohio St.3d 205, 2006-Ohio-5484, 855 N.E.2d 851, at ¶ 17 (“A party may timely object to [the procedural irregularity], but failure to timely enter such an objection waives the procedural error.“). Perhaps cognizant of their waiver problems, the Thompson Defendants insist that jurisdiction over the case is of the same ilk as subject-matter jurisdiction, and thus its defects can never be waived. But this proposition cannot be squared with the Supreme Court‘s repeated clarifications of the distinction between the two concepts. J.J. and Barnes both directly refuted that principle, and the Thompson Defendants prove unable to reconcile their argument with those cases. Consistent with that authority, we hold that jurisdiction over the case can be waived if not timely raised by the parties.{38} In addition to being mandated by the Supreme Court, this rule makes practical sense. Otherwise, if a party harbored doubts about the court‘s jurisdiction over the case, it could lie in wait—and see how the litigation unfolds before making a call on whether to challenge jurisdiction. If it prevailed in the case, it could then tuck the jurisdictional objection in its pocket and congratulate itself for the wisdom of proceeding in court. But if it lost, it could effectively try to secure a mulligan and litigate the entire case over again in the hopes of obtaining a more favorable outcome. Needless to say, we cannot countenance such a result.
{39} We need not decide today the precise contours of what it means to “timely” raise the defense of lack of jurisdiction over the case (but in most cases, we would expect that to be an affirmative defense in an answer and/or the subject of a motion to dismiss, or raised at the point in the proceedings at which the “procedural irregularity” arose), because the Thompson Defendants do not claim that they preserved the point. See J.J. at ¶ 15 (“These cases establish the duty of a complaining
{40} The only loose end remaining, therefore, is whether—notwithstanding the Thompson Defendants’ waiver—the trial court could sua sponte raise the point three years after the “procedural irregularity” occurred. Looking at Ohio case law on personal jurisdiction as a guide, we answer that question in the negative.
{41} Jurisdiction over the case is similar to personal jurisdiction because defects in either type of jurisdiction result in voidable—not void—judgments and are waivable. And it is well-settled that personal jurisdiction should not be raised sua sponte when the parties have waived the point. See, e.g., Brislin v. Albert, 9th Dist. Summit No. 27052, 2014-Ohio-3406 (reversing trial court‘s sua sponte dismissal for lack of personal jurisdiction because the defendant waived the objection); Snyder Computer Sys., Inc. v. Stives, 175 Ohio App.3d 653, 2008-Ohio-1192, 888 N.E.2d 1117, ¶ 16 (7th Dist.) (“[O]nce Stives waived personal jurisdiction, it was procedurally incorrect for the trial court to raise it on its own motion.“); D‘Amore v. Matthews, 193 Ohio App.3d 575, 2011-Ohio-2853, 952 N.E.2d 1212, ¶ 34 (12th Dist.) (“[O]nce the lack of personal jurisdiction was waived, the trial court could not sua sponte address the issue of personal jurisdiction in its judgment entry.“); Weiss, Inc. v. Pascal, 8th Dist. Cuyahoga No. 82565, 2003-Ohio-5824. The reason for this restriction is consistent with its character: “While
{42} We see no reason to fashion a different result here. While we did not locate controlling authority on this point relative to jurisdiction over the case, the characteristics that it shares with personal jurisdiction satisfy us that it is the duty of the affected party to raise it, and it should not be raised by the court sua sponte after waiver by the parties. It is beyond question that a court has inherent authority—even responsibility—to raise subject-matter jurisdiction sua sponte. But subject-matter jurisdiction is in a class of its own; as noted in Pratts, it “is a court‘s power over a type of case.” (Emphasis added.) Pratts, 102 Ohio St.3d 81, 2004-Ohio-1980, 806 N.E.2d 992, at ¶ 34. The trial court unquestionably had the power to hear the type of case presented by the amended complaint; the issue, instead, relates instead to an alleged “improp[er] exercise[]” of subject-matter jurisdiction “once conferred” and the procedural mechanism by which it arrived at bar. Id. at ¶ 10.
{44} The reasons for requiring the timely raising of a jurisdictional defense like this are manifold, and this case illustrates the point. We obligate parties to raise these defenses to avoid the untold wastes concomitant with eleventh-hour jurisdictional epiphanies. See Detroit, Toledo & Ironton Ry. Co. v. Maxine‘s Potato Service, Inc., 13 Ohio App.3d 157, 161, 468 N.E.2d 361 (2d Dist.1983) (holding lack-of-personal-jurisdiction defense was waived “[i]n accordance with the policy of encouraging diligence in challenging personal jurisdiction“); T.S. Expediting Servs., Inc. v. Mexican Industries, Inc., 6th Dist. Wood No. WD-01-060, 2002-Ohio-2268, ¶ 24 (favorably citing Detroit, Toledo & Ironton Ry. Co.). Here, the trial court‘s decision would have erased three years of litigation, which could have been avoided if the Thompson Defendants had timely sounded the jurisdictional alarm.
{45} We also point out that this rule does not operate to diminish the authority of trial courts to police their proceedings. The trial court here could have rejected the effort to amend the complaint if it found, in its discretion, the belated amendment improper. In other words, courts can and should take appropriate
III.
{46} For the reasons explained above, we sustain each of WBCMT‘s assignments of error, reverse the decision of the trial court, and remand for further proceedings consistent with this opinion.
Judgment reversed and cause remanded.
WINKLER, J., concurs.
ZAYAS, P. J., dissents.
ZAYAS, P.J., dissenting.
{47} I must respectfully dissent. WBCMT‘s amended complaint—which named entirely new parties and new claims, replacing all of the original defendants and all of the claims against them, after the entry of a final judgment—does not comport with
{48} The majority reverses this case by determining that, because there was not a final judgment, WBCMT‘s complaint was properly amended, and the trial court
I. The Trial Court Rightly Dismissed WBCMT‘s Amended Complaint
{49} In its second, third, and fourth assignments of error, WBCMT argues that the trial court appropriately granted its motion to amend its original complaint pursuant to
A. Final Judgment was Entered Prior to WBCMT‘s Move to Amend
{51} In its second assignment of error, WBCMT asserts that the trial court erred in determining that it did not have jurisdiction over the case, arguing, in part, that no final judgment had been entered. The trial court concluded otherwise—that it lacked jurisdiction to grant leave to amend the complaint because it had in fact entered final judgment. For the following reasons, I agree with the trial court.
{53} In this case, the Partial Agreed Judgment satisfied the criteria for a final judgment for a foreclosure decree by granting a judgment in favor of WBCMT and against the Borrowers for the amount due on the underlying note, including costs and expenses related thereto; it identified the priority of any liens against the collateral securing the note; and foreclosed the mortgage and directed the sale of the property.
{54} The Partial Agreed Judgment also included
{55} Moreover, the Partial Agreed Judgment entered judgment in the amount of the “Indebtedness,” which is defined in the entry to specifically include “attorneys‘/professional fees and costs, with interest, default interest, late fees and costs continuing to accrue on the unpaid balance.” While some courts have previously held that where attorney fees are awarded but the amount is not specified, the foreclosure order is not final and appealable, Roznowski settled this issue by concluding that “[a] judgment decree in foreclosure that allows as part of recoverable damages unspecified amounts advanced by the mortgagee for inspections, appraisals, property protection, and maintenance is a final, appealable order pursuant to
{56} Any doubts as to finality were also resolved by the fact that the Partial Agreed Judgment is a judgment entered by consent. “A judgment entry to which the parties voluntarily agree and/or consent is essentially a contract between the parties.” Deutsche Bank Natl. Tr. Co. Americas v. Weber, 12th Dist. Butler No. CA2009-10-264, 2010-Ohio-1630, ¶ 13, citing Ohio State Med. Bd. v. Zwick, 59 Ohio App.2d 133, 139, 392 N.E.2d 1276 (9th Dist.1978); Spercel v. Sterling Industries, Inc., 31 Ohio St.2d 36, 39, 285 N.E.2d 324 (1972). “As such, the parties are bound by its terms.” Deutsche Bank at ¶ 13. Additionally, a party to a judgment entered by consent may not appeal said judgment unless it explicitly reserves the right to appeal. Id. at ¶ 14. “The purpose of a consent judgment is to resolve a dispute without further litigation, and so would be defeated or at least impaired by an appeal. The presumption, therefore, is that the consent operates as a waiver of the right to appeal. It is because the parties should not be left guessing about the finality and hence efficacy of the settlement that any reservation of a right to appeal should be explicit.” (Internal quotations omitted.) Deutsche Bank at ¶ 14. In this case, the agreed judgment by its terms—one of which expressly states that the Borrowers waived their right to appeal—indicates that the parties had settled their claims, including but not limited to the claim for attorney fees. Moreover, in another entry of the court, entered shortly before the Partial Agreed Judgment and journalizing the results of a status conference, the court noted that “Counsel for Defendants [Borrowers] further explained that his law firm is holding in escrow the funds to pay the proposed settlement and the agreed upon proposed attorney fees which remain unpaid.” Thus, neither party was anticipating an untold amount of attorney fees which might require subsequent and contentious litigation; they were entering an agreed judgment that each considered to be final.
{57} It is for this reason that I would find Chatfield and Woods Sack Co., Inc. v. Nusekabel, 1st Dist. Hamilton No. C-980315, 1999 WL 960782 (Oct. 22, 1999)—cited by WBCMT and the majority for the proposition that an entry of foreclosure that leaves undefined protection costs and legal fees is not a final order—
{58} Furthermore, as the trial court noted, WBCMT took actions following the foreclosure decree in recognition of the Partial Agreed Judgment as a final judgment. WBCMT proceeded with execution of the Partial Agreed Judgment through the filing of the Precipe for Order of Sale, which could only occur if there existed a judgment lien against the real estate—which in turn could only exist if the Partial Agreed Judgment was a final judgment. “[A] trial court cannot execute on a judgment that is not final and appealable.” Farmers State Bank v. Sponaugle, 2d Dist. Darke No. 2016-CA-4, 2017-Ohio-4322, 92 N.E.3d 355, ¶ 26, modified on reconsideration, 2d Dist. Darke No. 2016-CA-4, 2017-Ohio-7744, ¶ 26, cause dismissed, 152 Ohio St.3d 1403, 2018-Ohio-723, 92 N.E.3d 876, appeal allowed in part, 152 Ohio St.3d 1405, 2018-Ohio-723, 92 N.E.3d 878, citing Franklin Mgt. Industries, Inc. v. Motorcars Infiniti, Inc., 8th Dist. Cuyahoga No. 93630, 2010-Ohio-1871, ¶ 14.
{59} Like the Partial Agreed Judgment, the Confirmation Order also satisfied the criteria for a final judgment. “The confirmation process is an ancillary one in which the issues present are limited to whether the sale proceedings
{60} The majority disagrees, citing cases in which the order confirming the property sale was not final because it did not contain a
On August 22, 2013, the Receiver filed the Motion to Compel Turnover of Funds by Defendants (the “Turnover Motion“). On November 8, 2013, the Court issued the Agreed Entry ordering the Borrowers to turn over the funds held by Breakwater to Borrowers’ counsel‘s IOLTA account. As a result of the Court‘s Order, $696,330.42 was returned to the Borrowers from Breakwater.
Subsequently, the Plaintiff and Borrowers entered into that certain Settlement and Release Agreement (the “Settlement Agreement“) and Partial Agreed Judgment and Decree of Foreclosure (“Agreed Judgment“).
Based on the terms of the Settlement Agreement which along with the Agreed Judgment Entry, the Borrowers agreed to return
$650,000 to the Plaintiff, and settled the Plaintiff‘s claims against the Borrowers in this litigation.
Likewise, WBCMT‘s subsequently-filed amended complaint states as a follows:
13. On January 16, 2014, Borrowers and Plaintiff filed the Partial Agreed Judgment and Decree of Foreclosure (the “Partial Agreed Judgment“) whereby the Borrowers agreed to a judgment for breach of contract and foreclosure of the Real Estate and Collateral.
14. Contemporaneously therewith, Borrowers and Plaintiff had entered into that certain Settlement and Release Agreement (the “Settlement Agreement“) whereby the Borrowers agreed to return to the Plaintiff $650,000 of the Transferred Funds (hereinafter defined), which along with the Partial Agreed Judgment, resolved the issues between Borrowers and Plaintiff.
{62} Accordingly, the Partial Agreed Judgment and Confirmation Order were final judgments in this case.
B. Final Judgment Precluded WBCMT‘s Amended Complaint
{63} In its third and fourth assignments of error, WBCMT argues that even if the Partial Agreed Judgment and Confirmation Order were final appealable orders, the trial court erred in determining that it did not have jurisdiction to grant leave for WBCMT to amend its complaint because
{64} The trial court determined that this case came to a conclusion upon the entry of the Partial Agreed Judgment and the Confirmation Order, final judgments which divested the trial court of jurisdiction save collateral matters related to those final judgments. This determination—that a court‘s jurisdiction continues until the final judgment on the merits of a dispute—is supported by the general principle that a court‘s jurisdiction does not continue indefinitely and “that final judgments are meant to be just that—final.” Allstate Ins. Co. v. Witta, 9th Dist. Summit No. 25738, 2011-Ohio-6068, ¶ 7, citing Ohio Pyro, Inc. v. Ohio Dept. of Commerce, 115 Ohio St.3d 375, 2007-Ohio-5024, 875 N.E.2d 550, ¶ 22; see State v. Stefen, 70 Ohio St.3d 399, 409, 639 N.E.2d 67 (1994) (“The purpose of a court is to resolve controversies, not to prolong them.“).
{65} The Ohio Rules of Civil Procedure also support this principle. See
{66}
When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had
been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgment. Failure to amend as provided herein does not affect the result of the trial of these issues. If evidence is objected to at the trial on the ground that it is not within the issues made by the pleadings, the court may allow the pleadings to be amended and shall do so freely when the presentation of the merits of the action will be subserved thereby and the objecting party fails to satisfy the court that the admission of such evidence would prejudice him in maintaining his action or defense upon the merits. The court may grant a continuance to enable the objecting party to meet such evidence.
{67} “The rule expresses a liberal policy toward the allowance of amendments.” Hall v. Bunn, 11 Ohio St.3d 118, 120, 464 N.E.2d 516 (1984), citing Burton v. Middletown, 4 Ohio App.3d 114, 120, 446 N.E.2d 793 (12th Dist.1982). It “‘was promulgated to provide the maximum opportunity for each claim to be decided on its merits rather than on procedural niceties.‘” Hall at 120, quoting Hardin v. Manitowoc-Forsythe Corp., 691 F.2d 449, 456 (10th Cir.1982).
{68} There are two types of amendments provided for under
{69} “A second type of amendment may arise where there is an objection to the evidence offered on grounds that it is not within the issues framed by the pleadings.” Hall at 121 (explaining the circumstances under which this situation occurs). The court may allow the pleadings to be amended if: “(1) the presentation of the case‘s merits will be subserved thereby, and (2) the objecting party does not satisfy the court that admission of the evidence would prejudice him in maintaining his case upon the merits.” Id.
{70} Neither one of the two types of amendments provided for under the rule is presented by WBCMT‘s amended complaint because the amended complaint resulted in entirely new claims against all new parties. It is a non sequitur to suggest that
{71} “It is well settled that a trial court loses jurisdiction over a case after issuing the final judgment that resolves all claims before it.” In re Criminal Charges Against Groves, 4th Dist. Hocking No. 17CA9, 2018-Ohio-1406, ¶ 22, citing Palmer v. Bowers, 9th Dist. Lorain No. 15CA010836, 2017-Ohio-355, ¶ 11; see Fiore v. Larger, 2d Dist. Montgomery Nos. 05-CV-6054 and 07-CV-8371, 2009-Ohio-5408, ¶ 36. Accordingly, “after a case has ended, the trial court may not continue to act, absent specific authority as prescribed by the Ohio Rules of Civil Procedure.” In re Criminal Charges, citing Allstate Ins. Co. v. Witta, 9th Dist. Summit No. 25738, 2011-Ohio-6068, ¶ 8. “If a trial court does act outside of the specific post-judgment motions set forth in the civil rules, its ruling will be considered void.” In re Criminal Charges, citing Pitts v. Ohio Dept. of Transp., 67 Ohio St.2d 378, 380, 423 N.E.2d 1105 (1981); see Kitson v. Gordon Food Serv., 9th Dist. Summit No. 15CA0078-M, 2016-Ohio-7079, ¶ 7.
{72} In the case before us, the trial court dismissed without prejudice an amended complaint for want of jurisdiction after the entry of two final judgments, and vacated all of the interlocutory entries made pursuant to that amended complaint. Thus, the trial court effectively vacated its void rulings, which it had the inherent authority to do. See Lingo v. State, 138 Ohio St.3d 427, 2014-Ohio-1052, 7 N.E.3d 1188, ¶ 48 (“A court has the inherent authority to vacate its own void judgments.“).
II. WBCMT Waived Its Waiver Argument
{73} In its first assignment of error, WBCMT argues that “the trial court erred in sua sponte dismissing on non-existent jurisdictional grounds that the
{74} The majority initially counters that the Thompson Defendants never asserted prior to oral argument that WBCMT had waived its waiver argument. In support, the majority notes that we do not consider arguments raised for the first time at oral argument, citing Andrekyo v. Cincinnati, 153 Ohio App.3d 108, 2003-Ohio-2759, 791 N.E.2d 1025, ¶ 20 (1st Dist.). While Andrekyo holds that an appellant cannot raise in oral argument an issue that was not raised in its appellate brief—consistent with the appellate rules, the majority falters in applying Andrekyo to the oral response of the Thompson Defendants, the appellees. It is irrelevant that the Thompson Defendants did not include this argument in their appellate brief—that WBCMT had waived its waiver argument by not asserting the issue in the trial court. While they could have raised it, they were not required to, as it is ultimately the duty of the appellate court to review the record and discern whether an error about which a party is complaining could have been called out and corrected by the trial court. See
{75} The majority then inexplicably takes arguments out of context to piece together a waiver argument on behalf of WBCMT. In this case, the trial court sua sponte ordered supplemental briefing on its continuing jurisdiction over the case
{76} Within its order directing supplemental briefing on the scope of the court‘s jurisdiction, the trial court asked the parties to answer, among other things, “what is the legal basis and authority for the Court to continue to exercise jurisdiction in this case.” Perhaps more significantly, the court also stated that “[i]n the interest affording the parties notice of the Court‘s concern over its continued jurisdiction, as well as to enable the Court to make a fully-informed decision on the issues identified above and any other issues related thereto that the parties may wish to address, the Court is requesting supplemental briefing from the parties on the foregoing.” (Emphasis added.) Thus, WBCMT had ample opportunity to argue that questioning the trial court‘s jurisdiction over the case was waived. They simply failed to argue it.
{77} Instead, WBCMT argued that the Thompson Defendants were not prejudiced by WBCMT‘s amended complaint in the limited context that its motion to amend was granted in accordance with
{78} Yet, the majority is “comfortable” that WBCMT‘s
{79} The majority‘s discussion of waiver is troubling in light of the fact that this assignment of error is mooted by the majority‘s determination that the Partial Agreed Judgment and Confirmation Order are not final appealable orders and that the amended complaint was proper under
{80} In order to preserve the issue on appeal, it was incumbent on the appellant to bring it to the attention of the trial court. Because WBCMT failed to do so, when it had ample opportunity to present a waiver argument, the trial court was not given an opportunity to rule on the issue and it is therefore waived.
Conclusion
{81} In light of the foregoing, I would hold that the trial court in the exercise of its inherent authority appropriately vacated WBCMT‘s amended complaint after final judgment had been rendered. I would affirm the trial court‘s judgment.
Please note:
The court has recorded its own entry this date.