FILED
NOT RECOMMENDED FOR PUBLICATION Sep 09, 2016
File Name: 16a0524n.06 DEBORAH S. HUNT, Clerk
No. 15-3524
UNITED STATES COURTS OF APPEALS
FOR THE SIXTH CIRCUIT
MSCI 2007-IQ16 GRANVILLE RETAIL, LLC, )
Plaintiff-Appellee, )
)
v. ) ON APPEAL FROM THE
) UNITED STATES DISTRICT
UHA CORPORATION, LLC, ) COURT FOR THE SOUTHERN
) DISTRICT OF OHIO
Defendant-Appellant. )
) OPINION
)
)
BEFORE: DAUGHTREY, MOORE, and STRANCH, Circuit Judges.
STRANCH, Circuit Judge. Following UHA Corporation, LLC’s default on a
commercial loan, MSCI 2007-IQ16 Granville Retail, LLC sought in this diversity action to
foreclose and sell mortgaged premises in Ohio’s Delaware, Fairfield, and Franklin Counties.
The district court granted summary judgment to MSCI. While this appeal was pending, the
property was sold and distributed, and the sale and distribution was confirmed by the district
court. MSCI now files a motion to dismiss the appeal as moot. UHA responds with a motion to
certify the mootness question to the Ohio Supreme Court. We GRANT MSCI’s motion, DENY
UHA’s motion, and DISMISS the appeal as moot.
I. BACKGROUND
MSCI’s predecessor, Bank of America, National Association, originally filed this action.
UHA petitioned for bankruptcy shortly thereafter, prompting the district court to stay the case.
No. 15-3524, MSCI 2007-IQ16 Granville Retail, LLC v. UHA Corporation, LLC
Two years later, following Bank of America’s notice that the bankruptcy petition had been
dismissed, the case was reopened. MSCI, to which the loan documents at issue had been
transferred during the bankruptcy stay, moved to be substituted as plaintiff under Federal Rule of
Civil Procedure 25(c). The district court entered an “agreed order” substituting MSCI.
MSCI eventually moved for summary judgment, which the district court granted, finding
that MSCI owns and holds the note and mortgages on which UHA defaulted and is entitled to
foreclose and sell the properties. Pursuant to the court’s opinion and order, MSCI submitted, and
the court later adopted over UHA’s objections, a proposed judgment entry and decree in
foreclosure. The court noted that UHA owed MSCI more than $13,000,000.
UHA timely appealed, alleging a number of errors by the district court. Because the
judgment entry and decree determined the rights and obligations of the parties and lienholders;
fixed a certain amount to be paid to MSCI that would be supplemented with future interest
accrued, advances made, and other contractual obligations; and identified the property to be sold
in satisfaction of that debt, it is a final decision within the meaning of 28 U.S.C. § 1291.
See, e.g., N.C. R.R. Co. v. Swasey, 90 U.S. 405, 409–10 (1874) (citing Whiting v. Bank of the
U.S., 38 U.S. (13 Pet.) 6 (1839)); Citicorp Real Estate, Inc. v. Smith, 155 F.3d 1097, 1101 (9th
Cir. 1998); Citibank, N.A. v. Data Lease Fin. Corp., 645 F.2d 333, 337–38 (5th Cir. 1981);
CitiMortgage, Inc. v. Roznowski, 11 N.E.3d 1140, 1145–46 (Ohio 2014); see also HSBC Bank
USA, N.A. v. Townsend, 793 F.3d 771, 781–797 (7th Cir. 2015) (Hamilton, J., dissenting).
But see HSBC Bank USA, N.A., 793 F.3d at 773–781 (majority opinion). Thus, we had
jurisdiction over the appeal when it was filed.
While the appeal was pending, UHA failed to move for a stay or post a supersedeas bond,
despite the district court’s directing the parties to address “whether or not further proceedings in
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this action must be stayed pending resolution of [UHA’s] appeal.” In the absence of a stay, the
special master offered the property for sale, and MSCI successfully purchased it and then
assigned its bid to four separate entities. The district court confirmed the sale and distribution of
the property over UHA’s objection. Special master deeds were executed and recorded thereafter.
II. ANALYSIS
MSCI now moves for dismissal of the appeal as moot. “[F]ederal jurisdiction under
Article III, Section 2 of the United States Constitution extends only to actual cases and
controversies.” United States v. City of Detroit, 720 F.2d 443, 448 (6th Cir. 1983) (citations
omitted). “It is basic principle of Article III that a justiciable case or controversy must remain
extant at all stages of review, not merely at the time the complaint is filed.” Ky. Riverkeeper,
Inc. v. Rowlette, 714 F.3d 402, 406 (6th Cir. 2013) (quoting Decker v. Nw. Envtl. Def. Ctr.,
133 S. Ct. 1326, 1335 (2013)). Accordingly, we are not empowered to decide moot issues. City
of Detroit, 720 F.2d at 448 (citations omitted); see also United States v. Alaska S. S. Co.,
253 U.S. 113, 116 (1920). “A case becomes moot only when it is impossible for a court to grant
any effectual relief whatever to the prevailing party, and a change in circumstances that renders a
court unable to grant petitioners meaningful relief may prudentially moot an action.”
Ky. Riverkeeper, Inc., 714 F.3d at 406 (citations and quotation marks omitted).
Under Ohio law, if a judgment is voluntarily paid and satisfied, the “satisfaction of
judgment renders an appeal from that judgment moot.” Blodgett v. Blodgett, 551 N.E.2d 1249,
1250 (Ohio 1990) (citations omitted); see also Schiller v. Penn Cent. Transp. Co., 509 F.2d 263,
266 (6th Cir. 1975) (“Because the judgment has been discharged the appeal therefrom under
Ohio law has become moot.”). “[T]he mere filing of a notice of appeal without a stay order does
not deprive the trial court of authority to enforce its judgment.” White v. White, 362 N.E.2d
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1013, 1019 (Ohio Ct. App. 1977). And where, as here, an appellee successfully collects on a
judgment after the appellant fails to request a stay, Ohio courts consider the appellant to have
satisfied the judgment voluntarily—which, again, renders moot the pending appeal. See, e.g.,
Wiest v. Wiegele, 868 N.E.2d 1040, 1043 (Ohio Ct. App. 2006) (citing Hagood v. Gail,
664 N.E.2d 1373, 1376–77, 1380 (Ohio Ct. App. 1995)); Art’s Rental Equip. Inc. v. Bear Creek
Constr., Nos. C-110544, 2012 WL 5870509, at *1–2 (Ohio Ct. App. Nov. 21, 2012). Consistent
with Ohio law, our sister circuits have routinely dismissed appeals as moot where the property at
issue is sold during the pendency of the appeal. See, e.g., Vegas Diamond Props., LLC v. FDIC,
669 F.3d 933, 936–37 (9th Cir. 2012); Christopher Vill., Ltd. P’ship v. Retsinas, 190 F.3d 310,
314–15 (5th Cir. 1999). As the Seventh Circuit explained,
The rule that if a district court judgment authorizes the sale of property and the
property is sold to a good faith purchaser during the pendency of the appeal
because the appellant failed to obtain a stay of the enforcement of the judgment,
the sale of the property moots the appeal of the judgment ordering the sale, is an
application of the general rule that, “if an event occurs while an appeal is pending
that renders it impossible for an appellate court to grant any relief or renders a
decision unnecessary, the appeal will be dismissed as moot.”
FDIC v. Meyer, 781 F.2d 1260, 1263–64 (7th Cir. 1986) (citation omitted).
In response to MSCI’s motion to dismiss the appeal as moot, UHA cites a line of Ohio
cases finding that the confirmed sale of the property at issue did not moot the pending appeal
because Ohio Revised Code § 2329.45 preserved the possibility of restitution. See Ohio Rev.
Code Ann. § 2329.45 (“If a judgment in satisfaction of which lands, or tenements are sold, is
reversed, such reversal shall not defeat or affect the title of the purchaser. In such case
restitution must be made by the judgment creditor of the money for which such lands or
tenements were sold, with interest from the day of sale.”). Arguing that these cases conflict with
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the principles outlined above, UHA moves us to certify the issue to the Ohio Supreme Court to
resolve.
But the cases cited by UHA, in which there was a possibility of restitution, are inapposite
because UHA cannot obtain restitution. Those cases presume that appellant sought a stay.
See U.S. Bank Nat’l Ass’n v. Mobile Assocs. Nat’l Network Sys., Inc., 961 N.E.2d 715, 720 (Ohio
Ct. App. 2011); LaSalle Bank Nat’l Ass’n v. Murray, 902 N.E.2d 88, 92 (Ohio Ct. App. 2008);
see also Everhome Mortg. Co. v. Baker, No. 10AP-534, 2011 WL 2586751, at *3–4 (Ohio Ct.
App. June 30, 2011) (not stating whether appellant sought a stay, but relying on the reasoning of
Ameriquest Mortgage Co. v. Wilson, No. 2006-A-0032, 2007 WL 1535242 (Ohio Ct. App. May
25, 2007), in which appellant did seek a stay). And Ohio case law confirms that failure to seek a
stay is fatal to receiving restitution under § 2329.45. See, e.g., Bayview Loan Servicing, LLC v.
Salem, No. 27460, 2015 WL 4005890, at *2 (Ohio Ct. App. June 20, 2015) (“[The appellant]
never sought a stay of the distribution of the proceeds in the trial court. Accordingly,
[§] 2329.45 does not apply.”); Ameriquest Mortg. Co., 2007 WL 1535242, at *2 (“Restitution is
appropriate in cases such as these, where the foreclosed property has been sold, and the appellant
filed for a stay, but was unsuccessful due to his or her failure to post a supersedeas bond.”
(citations omitted)).
Read together, the Ohio cases cited by the parties are consistent. Because UHA did not
seek a stay, and MSCI enforced the judgment by selling the property and distributing the
proceeds, satisfaction of the judgment renders this appeal moot. That the Ohio Supreme Court
has declined to take up UHA’s alleged split in state law supports our finding that there is no
conflict, as well as MSCI’s argument that we should decline to certify the question. See, e.g.,
Art’s Rental Equip., Inc. v. Bear Creek Constr., LLC, 984 N.E.2d 1102 (Ohio 2013) (denying
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review of appeal); Saxon Mortg. Servs. v. Whitely, 998 N.E.2d 1176 (Ohio 2013) (finding that no
conflict exists on review of order certifying conflict). Moreover, even if Ohio law were
inconsistent, this case is not an appropriate vehicle for certification. UHA cannot obtain
restitution here because its debt to MSCI is two times greater than the appraisal price for the
foreclosed properties, and thus any restitution would simply offset that debt.
III. CONCLUSION
In sum, because we can no longer grant any effectual relief, this appeal must be
dismissed as moot. UHA’s motion to certify is denied.
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