Hall v. Trapper John's Canoe Livery, Inc.

Citations: 684 N.E.2d 1277; 115 Ohio App. 3d 162Docket: No. 96APE04-519.

Court: Ohio Court of Appeals; October 30, 1996; Ohio; State Appellate Court

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The case is a second appeal stemming from a foreclosure action initiated in 1992 by Bobbie M. Hall, the Franklin County Treasurer, against several parties, including Trapper John's Canoe Livery, for unpaid land taxes. After the appellees defaulted, a foreclosure judgment was entered, and the property was sold to Butterworth Properties in July 1994. Butterworth subsequently transferred the property to John J. Vlahos via quitclaim deed. In November 1994, the appellees sought relief from the judgment, claiming they had not received proper notice of the sheriff's sale. The trial court initially granted this relief, citing the necessity of actual notice for all parties, but the appellate court reversed this decision, noting that the appellants had not been allowed to respond to the relief motion.

Upon remand, the trial court again granted the motion for relief, finding that the appellees had been entitled to actual notice despite their default, that their motion was timely, and that they had a valid defense concerning lack of notice. The appellants contended that the trial court erred by granting relief under Civ.R. 60(B), which requires a showing of timeliness, a meritorious defense, and entitlement to relief based on specific grounds. The court ruled that while the appellees filed their motion within one year and it was therefore timely, the trial court erred in determining they were entitled to relief. The trial court's reliance on a precedent case (Cent. Trust Co. N.A. v. Jensen) was deemed inappropriate, as it asserted that mere publication notice is insufficient when the party's address is known or easily ascertainable.

In Jensen, the bank initiated a foreclosure on the Jensens' mortgage, obtaining a judgment and order of sale. Jerry Maxwell bid $19,200 but failed to pay the remaining purchase price, resulting in the sale being vacated. After subsequent sales, Maxwell received notice of the third sale but not of the sale's specifics. The property was sold to another buyer, and the bank sought to apply Maxwell's deposit to cover costs. The Ohio Supreme Court ruled that Maxwell had a sufficient property interest warranting due process protections, including actual notice of the sale.

In a related case involving foreclosure for delinquent taxes, the county treasurer served Norman Tracy, a mortgage holder's agent, and attempted to serve Leonard and Barbara Gross by publication, claiming their address was unknown despite their mortgage being satisfied prior to the foreclosure. The trial court determined that all necessary parties were properly notified and found in default, stating that the circumstances differed from Jensen. The court contrasted this with Martin v. M S Dev. Co., where M S Development received notice of the foreclosure action, unlike Maxwell in Jensen, emphasizing that Maxwell had no stake in the initial proceedings.

The Jensen court referenced the Supreme Court cases Mennonite Bd. of Missions v. Adams and Mullane v. Central Hanover Bank Trust Co. to address due process regarding notice in foreclosure actions. It emphasized that an interested party must be notified of actions affecting their rights, but if the party chooses not to participate after receiving notice of a foreclosure and a motion for default judgment, no further notice is required for subsequent proceedings. In this case, M S was not denied due process by not receiving notice of the sheriff's sale, as they, like other appellees, were properly served and failed to defend against the foreclosure.

The appellees contended that a telephone call made by Mark Schell to the county prosecutor's office constituted an appearance, thereby entitling them to notice under Civ. R. 55(A). However, the court noted that the call occurred after the sheriff's sale was confirmed, lacked context regarding Schell's relationship to the appellees or the property, and did not indicate an intention to contest the action. Thus, even if previous case law supported the idea that such a call could represent an appearance, it was ineffective in this instance.

Moreover, the trial court's finding that the lack of notice constituted a valid defense was deemed erroneous, as the appellees did not assert any defense against their tax delinquency. Consequently, the appellants' assignment of error was upheld, the trial court's judgment was reversed, and the case was remanded with instructions to reinstate the confirmation of the property sale to Butterworth Properties. Only specific parties, including Trapper John's Canoe Livery, Inc., Norman L. Tracy, and All Star Limited Partnership, were involved in the appeal, even though several other entities were named in the original foreclosure action.