[Cite as HSBC Bank USA, N.A. v. Wanda, 2013-Ohio-1556.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 98775
HSBC BANK USA, N.A., ETC.
PLAINTIFF-APPELLANT
vs.
DANIEL A. WANDA, ET AL.
DEFENDANTS-APPELLEES
JUDGMENT:
REVERSED AND REMANDED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-782637
BEFORE: Celebrezze, P.J., Keough, J., and Kilbane, J.
RELEASED AND JOURNALIZED: April 18, 2013
ATTORNEYS FOR APPELLANT
Scott A. King
Terry W. Posey, Jr.
Thompson Hine, L.L.P.
Austin Landing I
10050 Innovation Drive
Suite 400
P.O. Box 8801
Dayton, Ohio 45401
Wayne E. Ulbrich
120 E. 4th Street
8th Floor
Cincinnati, Ohio 45202
ATTORNEYS FOR APPELLEE
Allen C. Tittle
Christopher M. Mellino
Mellino Robenalt, L.L.C.
19704 Center Ridge Road
Rocky River, Ohio 44116
FRANK D. CELEBREZZE, JR., P.J.:
{¶1} Appellant, HSBC Bank USA, N.A. (“HSBC”), brings the instant appeal
from the grant of summary judgment in favor of appellee, Daniel Wanda (“Wanda”),
disposing of HSBC’s foreclosure action. HSBC argues the trial court erred in dismissing
the third filing of its foreclosure action because the “double-dismissal rule” does not
apply to this case. After a thorough review of the record and case law, we agree and
reverse the grant of summary judgment.
I. Factual and Procedural History
{¶2} Wanda entered into a loan agreement with Wells Fargo Bank, N.A., on
December 30, 2004, for $135,000. The resultant mortgage was filed with the Cuyahoga
County Recorder’s Office, covering a residence in Parma, Ohio. The note and mortgage
were assigned to HSBC on May 14, 2009, and properly registered with the county
recorder.
{¶3} Wanda failed to timely pay his mortgage, and HSBC instituted a foreclosure
action on March 17, 2011. Service was perfected on Wanda, but he did not respond to
the complaint. On July 11, 2011, the trial court put forth an order directing HSBC to file
for default judgment within ten days or risk dismissal without prejudice for failure to
prosecute. On July 25, 2011, the court did just that after HSBC failed to file for default
judgment.
{¶4} HSBC refiled its foreclosure action on August 20, 2011. After service on
Wanda was again perfected, the trial court instructed HSBC to file for default judgment
within ten days of November 17, 2011, or the case may be dismissed without prejudice
for failure to prosecute. Again, HSBC failed to file a motion for default judgment, and
the trial court, on November 29, 2011, dismissed the case without prejudice.1 The order
of dismissal also instructed HSBC to notify the trial court within seven days of any
refiling of its foreclosure action.
{¶5} HSBC refiled its foreclosure action on May 15, 2012. It complied with the
previous order to notify the original trial judge of the refiling, and the case was
transferred to the docket of that judge. Wanda was served by special process server on
June 11, 2012. He filed an answer and motion for summary judgment on June 21, 2012.
HSBC’s motion in opposition was timely filed on July 20, 2012. The trial court granted
Wanda’s motion for summary judgment on July 26, 2012. HSBC timely filed the instant
appeal assigning one error:
I. The trial court erred in dismissing the complaint.
II. Law and Analysis
{¶6} HSBC argues the trial court erred when it granted summary judgment in favor
of Wanda. This court reviews the trial court’s decision de novo. Parenti v. Goodyear
Tire & Rubber Co., 66 Ohio App.3d 826, 829, 586 N.E.2d 1121 (9th Dist.1990). Under
Civ.R. 56, summary judgment is only proper when the movant demonstrates that, viewing
the evidence most strongly in favor of the non-movant, reasonable minds must conclude
HSBC had sought an extension of time to file its dispositive motion on November 23, 2011,
1
but that was denied by the trial court on November 29, 2011.
that no genuine issue as to any material fact remains to be litigated and the moving party
is entitled to judgment as a matter of law. Doe v. Shaffer, 90 Ohio St.3d 388, 390,
2000-Ohio-186, 738 N.E.2d 1243.
{¶7} Wanda’s first argument in his motion for summary judgment is the
“double-dismissal rule.” This rule is governed by Civ.R. 41(A)(1) and states:
Subject to the provisions of Civ.R. 23(E), Civ.R. 23.1, and Civ.R. 66, a
plaintiff, without order of court, may dismiss all claims asserted by that
plaintiff against a defendant by doing either of the following:
(a) filing a notice of dismissal at any time before the commencement of trial
unless a counterclaim which cannot remain pending for independent
adjudication by the court has been served by that defendant;
(b) filing a stipulation of dismissal signed by all parties who have appeared
in the action.
Unless otherwise stated in the notice of dismissal or stipulation, the
dismissal is without prejudice, except that a notice of dismissal operates as
an adjudication upon the merits of any claim that the plaintiff has once
dismissed in any court. (Emphasis added.)
{¶8} A dismissal for failure to prosecute is not included in this rule. Such a
dismissal is specifically governed by Civ.R. 41(B)(1), stating that “[w]here the plaintiff
fails to prosecute, or comply with these rules or any court order, the court upon motion of
a defendant or on its own motion may, after notice to the plaintiff’s counsel, dismiss an
action or claim.”
{¶9} The trial court can, in its discretion, make a dismissal under Civ.R. 41(B)(1) a
final adjudication because Civ.R. 41(B)(3) specifies that dismissals for failure to
prosecute may be a dismissal upon the merits. See also 1970 Staff Note to Civ.R. 41(B).
{¶10} A recent case addressed the applicability of the double-dismissal rule where
prior dismissals were not initiated by the plaintiff in a case. In a foreclosure action
initiated by a mortgage holder, the mortgagor sought summary judgment arguing that the
foreclosure action was a third filing of the same action and should be dismissed by the
rule outlined in Civ.R. 41(A). Arch Bay Holdings, L.L.C. Series 2010A v. Brown, 2d
Dist. No. 25073, 2012-Ohio-4966. In addressing these pro se arguments raised for the
first time on appeal, the Second District noted, “[t]he ‘double-dismissal rule of Civ.R.
41(A)(1) applies only when both dismissals were notice dismissals under Civ.R.
41(A)(1)(a).’” Id. at ¶ 14, quoting Olynyk v. Scoles, 114 Ohio St.3d 56,
2007-Ohio-2878, 868 N.E.2d 254, ¶ 31.
{¶11} In Olynyk, the Ohio Supreme Court analyzed the applicability of the
double-dismissal rule:
It is well established that when a plaintiff files two unilateral notices of
dismissal under Civ.R. 41(A)(1)(a) regarding the same claim, the second
notice of dismissal functions as an adjudication of the merits of that claim,
regardless of any contrary language in the second notice stating that the
dismissal is meant to be without prejudice. In that situation, the second
dismissal is with prejudice under the double-dismissal rule, and res judicata
applies if the plaintiff files a third complaint asserting the same cause of
action.
Because the double-dismissal rule specifically mentions “a notice of
dismissal” when referring to the second dismissal, it is readily apparent that
the second dismissal must be pursuant to Civ.R. 41(A)(1)(a) for the
double-dismissal rule to operate. (Citations omitted.)
Id. at ¶ 10-11.
{¶12} In the present case, neither dismissal was unilaterally initiated by HSBC.
Both were Civ.R. 41(B) dismissals without prejudice, as specified in the journal entries.
The double-dismissal rule is not implicated here where the first two dismissals were
involuntary dismissals for failure to prosecute. Accordingly, that rationale cannot serve as
the basis for granting summary judgment.
{¶13} Wanda also argued in his motion for summary judgment that HSBC
displayed a clear disregard for the judicial system. Wanda’s arguments below went to
the fact that the trial court’s second dismissal without prejudice instructed HSBC to notify
the court within seven days of any refiled complaint. Wanda incorrectly read this as an
order to HSBC to refile any claim within seven days of the prior dismissal. The trial
court acknowledged this in its journal entry granting summary judgment:
[Wanda] has misinterpreted the journal entry regarding notice within 7 days
of refiling; that notation is to notify the court if a case is refiled, it is not
intended nor worded to imply a case 1) should be refiled 2) that if refiled,
that it must be done in a period of time; the language is there in order to
efficiently notify the assigned judge that under local rules, transfer is
appropriate to the original judge.
Therefore, Wanda’s arguments to the trial court regarding this issue are clearly erroneous.
{¶14} Wanda did not make the same argument below that he now makes — that
HSBC’s prior behavior in failing to prosecute should lead to dismissal in the instant case.
{¶15} The trial court’s sole basis for granting summary judgment was the fact that
“this is the third filing of this case, with previous cases [dismissed without prejudice] by
the court for failure to prosecute * * *.” An independent review of this issue reveals that
prior dismissals based on a failure to prosecute do not implicate the double-dismissal rule.
Here, those dismissals were without prejudice and do not have res judicata effect.
Olynyk, 114 Ohio St.3d 56, 2007-Ohio-2878, 868 N.E.2d 254, ¶ 31. While the trial court
could still dismiss the case with prejudice based on a failure to comply with an order of
the court according to Civ.R. 41(B)(1), there is no indication that HSBC ignored an order
of the court or failed to prosecute the present, refiled case.
{¶16} Wanda claims that the trial court examined HSBC’s prior actions and found
they constituted “a complete disregard of the judicial system or the rights of the opposing
party.” Sazima v. Chalko, 86 Ohio St.3d 151, 158, 1999-Ohio-92, 712 N.E.2d 729.
While a trial court may consider past actions, including prior dismissed actions, as stated
in Sazima, the general rule that, whenever possible, cases are to be decided on their merits
still holds true. Id.
{¶17} Wanda also argues that the trial court’s grant of summary judgment was
appropriate because he has suffered prejudice from the prior dismissed actions.
However, Wanda was not prejudiced by the prior filings. In the previous two cases, he
failed to respond at all. The cases were dismissed because HSBC failed to timely move
for default judgment. Its failure to do so likely inured a benefit to Wanda because he
was able to retain counsel and properly defend against HSBC’s foreclosure action.
Otherwise, he would have missed his opportunity to present a defense. Any harm to
Wanda is minimal and certainly not the type of prejudice that should lead the trial court to
the conclusion that the harshest possible sanction, summary judgment amounting to
dismissal with prejudice, was warranted. The trial court’s grant of summary judgment is
therefore reversed.
III. Conclusion
{¶18} The trial court erred when it granted summary judgment in Wanda’s favor
because he offered no pertinent grounds for dismissing the foreclosure action. The trial
court’s decision was based on the double-dismissal rule, which had no application where
the prior dismissals were not voluntary dismissals under Civ.R. 41(A)(1).
{¶19} This cause is reversed and remanded to the lower court for further
proceedings consistent with this opinion.
It is ordered that appellant recover of said appellees costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the common
pleas court to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of
the Rules of Appellate Procedure.
FRANK D. CELEBREZZE, JR., PRESIDING JUDGE
KATHLEEN ANN KEOUGH, J., and
MARY EILEEN KILBANE, J., CONCUR