Wright v. Heller

[Cite as Wright v. Heller, 2018-Ohio-149.]
IN THE COURT OF APPEALS
FIRST APPELLATE DISTRICT OF OHIO
HAMILTON COUNTY, OHIO

PATRICIA WRIGHT, : APPEAL NO. C-160897
TRIAL NO. A-1403169
and :

GLENN WRIGHT, :
O P I N I O N.
Plaintiffs-Appellants, :

vs. :

JOSEPH HELLER, :

TRACY HELLER, :

HUFF-DREES REALTY, d.b.a. HUFF :
REALTY,
:
THOMAS J. SINGER,
:
and
:
CHRISTOPHER PARCHMAN,
:
Defendants-Appellees,
:
and
:
REGAL FIELD SERVICES, LLC, et al.,

Defendants.
:

Civil Appeal From: Hamilton County Court of Common Pleas

Judgment Appealed From Is: Affirmed

Date of Judgment Entry on Appeal: January 17, 2018
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The Schneider Law Firm, LLC, and Louis C. Schneider, for Plaintiffs-Appellants,

Lindhorst & Dreidame, Christopher H. Hurlburt and James Brockman, for Defendants-
Appellees Joseph and Tracy Heller,

Faulkner & Tepe, LLP, John C. Scott and Tracy E. Schwetschenau for Defendant-
Appellee Huff-Drees Realty, Inc.,

Arnzen, Molloy, Storm, & Turner, P.S.C., and Aaron A. Vanderlann for Defendant-
Appellee Huff-Drees Realty, Inc.,

Smith Rolfes & Skavdahl Company, L.P.A., and Carmen Sarge for Defendants-Appellees
Thomas J. Singer and Christopher Parchman.

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ZAYAS, Presiding Judge.

{¶1} Plaintiffs-appellants Glenn and Patricia Wright (“Wrights”) appeal from the

trial court’s grant of summary judgment in favor of defendants-appellees Joseph and Tracy

Heller (“Hellers”), Huff-Drees Realty, Inc., d.b.a. Huff Realty (“Huff”), Thomas Singer,

Christopher Parchman, and Nationwide REO Brokers, Inc., (“Nationwide”) in a case

regarding the removal, disposal, and retention of the personal property that the Wrights

failed to retrieve from their former home at 7329 Waterpoint Lane following a foreclosure.

We affirm the judgment of the trial court because res judicata barred the Wrights from

asserting these claims against the defendants.

The Factual Basis of the Federal Law Suit
{¶2} In February 2009, Bank of America (“BOA”) foreclosed on a home owned

by Glenn and Patricia Wright. The sheriff sold the property back to the bank in

December 2009. The Wrights never removed their personal property from the home.

After the sale, the bank informed the Wrights in writing numerous times that their

property must be removed from the home, to no avail. On March 4, 2010, BOA posted a

“Personal Property Notice” on the home informing the Wrights that any property that

was not removed by April 8, 2010, would be disposed of without further notice. The

notice was also mailed to and received by the Wrights.

{¶3} The Wrights, through broker Tim Atteberry, made two attempts to

repurchase the home. Atteberry made offers in January and March 2010, but BOA never

responded to the offers. On April 7, 2010, Atteberry spoke with Kate McCarthy, a

paralegal who worked for Manley Deas Kolchalski, L.L.C., the law firm that represented

BOA. Atteberry represented that he had a potential buyer for the property who was

interested in purchasing the furniture with the home. Atteberry did not disclose to

McCarthy that the Wrights were the potential buyers. After conferring with BOA,

McCarthy sent an email confirming that the furniture would remain on the property and

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instructing Atteberry to conduct future negotiations with Tom Singer, the listing agent

from Huff Realty.

{¶4} After April 7, 2010, the Wrights never followed up with BOA regarding

their personal property. In the meantime, Atteberry contacted Singer who did not

negotiate with Atteberry. BOA sold the property to the Hellers in July 2010. When the

Wrights visited the home in August 2010, they learned it had been sold to the Hellers.

{¶5} Four months later, the Wrights filed suit against BOA in the United States

District Court for the Southern District of Ohio asserting state-law claims for breach of

contract, negligence, and fraud, claiming they were wrongfully deprived of their personal

property because BOA had a lawful duty to protect the property until the Wrights chose

to retrieve it, BOA failed to retain the property, and BOA conveyed the personal property

to the Hellers.

The Federal Court Proceedings
{¶6} In the district court, the Wrights alleged that BOA had agreed to secure

and maintain their personal property, BOA had breached the agreement by discarding

the property and allowing it to be turned over to the Hellers, the Wrights’ demands for

recovery of the personal property had been refused, and the Wrights had been deprived

of the ownership and benefit of their personal property. The Wrights further alleged that

BOA “was negligent in fulfilling” its duty to maintain custody and control over the

property, and that BOA had falsely misrepresented its intent to maintain and secure the

property.

{¶7} After discovery, the district court granted BOA’s motion for summary

judgment finding that BOA did not enter into a contract with the Wrights to allow them to

leave their property in the home, and that any alleged permission to maintain the personal

property in the home was contingent solely on the successful repurchase of the home by

Atteberry on behalf of the Wrights. The court further found that the Wrights were not in

negotiations to purchase the property, and that they should have known well before July

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2010 that BOA would not sell the property to Atteberry. Once the Wrights knew that they

could not repurchase the home, they should have taken active steps to retrieve their

belongings. Instead, the Wrights sat passively and did nothing to protect their interests.

They made no attempt to contact BOA or retrieve their personal belongings after April 7,

2010, and BOA did not have a duty to protect or preserve their personal property.

{¶8} The Wrights appealed to the Sixth Circuit Court of Appeals, which affirmed

the District Court’s judgment. See Wright v. Bank of Amr., 517 Fed.Appx. 304 (6th

Cir.2013). In reaching its decision, the court concluded that

There is no evidence that BOA intended or attempted to keep Wrights’

personal property; the record makes it clear that the Wrights could have

retrieved their personal property at any time. In fact, the Wrights had over

three months to retrieve the personal property – three months in addition to

the original time frame of four months that BOA gave the Wrights to remove

their personal property after the foreclosure.

Id. at 307.

The Factual Basis of the Second Lawsuit
{¶9} After the Wrights lost the suit in federal court, they filed a second suit

based on the same underlying facts. Again they alleged that they had permission to leave

the personal property in the house because they were in negotiations with BOA to

repurchase the house, and that they were unlawfully deprived of their personal property.

However, this time, they alleged claims of conversion against the Hellers, Huff Realty,

Huff agents Thomas Singer and Christopher Parchman, Nationwide, and Regal Field

Services and its owners Shane and Kathleen Klaber, and sought compensatory and

punitive damages. The Wrights also alleged claims of replevin and unjust enrichment

against the Hellers.

{¶10} The day after BOA purchased the home, JP Morgan Chase Bank (“Chase”),

the servicing agent for BOA, assigned the marketing and sale of the home to Nationwide,

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an asset disposition company located in Braintree, Massachusettes. Nationwide assigned

Huff Realty and Huff agents Singer and Parchman to market and sell the home. Huff

had a contractual agreement to provide these services for properties handled by

Nationwide as the agent for bank owned properties.

{¶11} After receiving the assignment, Huff agents inspected the home and

informed Nationwide the house contained furniture and personal items. Nationwide

notified counsel for BOA, and, in February 2010, BOA sent three letters requesting that

the Wrights remove their personal property from the home. On March 4, 2010, counsel

for BOA instructed Nationwide to post a “Personal Property Notice” on the home

informing the Wrights that any property that was not removed by April 8, 2010, would

be disposed of without further notice. Huff posted the notice at the request of

Nationwide, and McCarthy provided the notice to the Wrights.

{¶12} On April 7, 2010, McCarthy sent an email to Nationwide instructing them

that the home would be sold with the furniture because Atteberry had a buyer who

wished to purchase the furniture with the home. Nationwide was instructed by

McCarthy not to trash the furniture when the April 8, 2010 deadline had passed.

Nationwide, Huff, Singer, and Parchman followed these instructions. BOA also

instructed Nationwide to box up all the small, personal items that remained in the home

and put them in the garage.

{¶13} After McCarthy told Atteberry the furniture would remain in the home,

Atteberry spoke with Singer three or four times in April and early May. Singer informed

Atteberry that he could not entertain any offers until he received authorization to list the

property. Neither Atteberry or Wright contacted Singer after May 4, 2010. The Hellers

purchased the property in July 2010.

{¶14} The Hellers’ purchase contract reflected that Tom Singer and Huff Realty

were acting as agents for BOA, and that BOA reserved the right to dispose of or leave any

personal property at its discretion. Shortly before the closing, Parchman informed the

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Hellers that BOA may leave some of the property in the home instead of trashing it. On

June 22, 2010, Field Asset Services removed the garbage from the garage. When the

Hellers closed on the home on July 6, 2010, BOA exercised its contractual right to leave

the personal property in the home. The Hellers moved into the property on July 24,

2010, and spent the next two weeks discarding all of the trash. They donated some of the

remaining items to charity, and kept the rest.

{¶15} On August 14, 2010, the Wrights visited the home and learned that the

house had been sold to the Hellers. Two and a half months later, the Wrights sent a

letter to the Hellers asking them to call the Wrights if they did not want any of the

property and wanted to give the Wrights an opportunity to recover it. The Hellers’

counsel contacted the Wrights’ attorney, who indicated that the Wrights did not want

any of the personal property, and that the Wrights were going to sue BOA. The Wrights’

attorney requested that the Hellers cooperate with the Wrights in their suit against BOA.

When the Hellers were deposed in September 2011 for the BOA lawsuit, they gave the

Wrights two boxes of family photos that they had salvaged.

The Proceedings in the Second Lawsuit
{¶16} All of the defendants filed answers and asserted, among other affirmative

defenses, that res judicata and collateral estoppel barred the Wrights from raising these

claims and issues again.

{¶17} After discovery, all of the defendants filed motions for summary judgment

alleging that the claims were barred by res judicata, and more specifically, claim

preclusion. The trial court granted the motions for summary judgment, finding that res

judicata barred the plaintiffs’ claims. The Wrights appealed, raising six assignments of

error. However, the Wrights did not appeal the judgment granting summary judgment

to Nationwide.

Standard of Review
{¶18} Under Civ.R. 56(C), summary judgment is appropriate when, looking at

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the evidence as a whole (1) there is no genuine issue as to any material fact, (2)

reasonable minds can come to but one conclusion and that conclusion is adverse to the

party against whom the motion for summary judgment is made, and therefore, (3) the

moving party is entitled to judgment as a matter of law. Civ.R. 56(C); Horton v.

Harwick Chem. Corp., 73 Ohio St.3d 679, 686-687, 653 N.E.2d 1196 (1995). If any

doubts exist, the issue must be resolved in favor of the nonmoving party. Murphy v.

Reynoldsburg, 65 Ohio St.3d 356, 358-359, 604 N.E.2d 138 (1992).

Res Judicata
{¶19} In their first assignment of error, the Wrights argue that the trial court

erred when granting summary judgment to all of the appellees based on res judicata

because none of the appellees were parties to the federal case or in privity with the

original party.

{¶20} Res judicata requires that a party to a lawsuit must present every ground

for relief in that action or be forever barred from asserting any additional grounds. Natl.

Amusements, Inc. v. Springdale, 53 Ohio St.3d 60, 62, 558 N.E.2d 1178 (1990). It is well

established that “an existing final judgment or decree between the parties to litigation is

conclusive as to all claims which were or might have been litigated in a first lawsuit.”

Rogers v. Whitehall, 25 Ohio St.3d 67, 69, 494 N.E.2d 1387 (1986).

{¶21} Res judicata encompasses two related concepts: (1) claim preclusion, also

known as res judicata or estoppel by judgment, which prevents a subsequent action by

the same parties based upon any claim arising out of the transaction that was the subject

of a previous action; and (2) issue preclusion, or collateral estoppel, which bars

relitigation in a second action of an issue that has been actually and necessarily litigated

and determined in a prior action that was based on a different cause of action. See

O'Nesti v. DeBartolo Realty Corp., 113 Ohio St.3d 59, 2007-Ohio-1102, 862 N.E.2d 803,

¶ 6; State ex rel. Schachter v. Ohio Pub. Emps. Retirement Bd., 121 Ohio St.3d 526,

2009-Ohio-1704, 905 N.E.2d 1210, ¶ 27.

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{¶22} Claim preclusion requires proof of the following four elements: (1) there

was a prior valid judgment on the merits; (2) the second action involved the same parties

or their privies as the first action; (3) the present action raises claims that were or could

have been litigated in the prior action; and (4) both actions arise out of the same

transaction or occurrence.

{¶23} The Wrights do not dispute that there was a previous valid judgment, the

present action raises claims that could have been litigated in the federal action, and that

both actions arise from the same occurrence. The Wrights sole challenge is to the trial

court’s determination that all of the defendants were in privity with BOA. Therefore, we

must determine whether each defendant in the second action is in privity with BOA.

{¶24} The Ohio Supreme Court has explained that “[w]hat constitutes privity in

the context of res judicata is somewhat amorphous. A contractual or beneficiary

relationship is not required [.]” Brown v. Dayton, 89 Ohio St.3d 245, 248, 730 N.E.2d

958 (2000). The court further explained that, “In certain situations * * * a broader

definition of ‘privity’ is warranted. As a general matter, privity is merely a word used to

say that the relationship between the one who is a party on the record and another is

close enough to include that other within the res judicata.” (Internal citations omitted.)

Id.

{¶25} A party is in “privity” with another if “he succeeds to an estate or an

interest formerly held by the other,” City of Columbus v. Union Cemetary Assn., 45 Ohio

St.2d 47, 51, 341 N.E.2d 298 (1976), or where a party is so identified in interest with

another that the party represents the same legal right. See Deaton v. Burney, 107 Ohio

App.3d 407, 413, 669 N.E.2d 1 (2d Dist.1995). “[A] mutuality of interest, including an

identity of desired result,” may also create privity between parties. Brown at 248.

Privity of Huff Realty and Agents Tom Singer and Chris Parchman
{¶26} The Wrights first argue that Huff and its agents, Singer and Parchman,

were not in privity with BOA because their contractual relationship was with BOA’s loan

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servicing agent Chase, and BOA was not in privity with Chase. Courts have determined

that privity exists between a loan servicing agent and a mortgage company. See Wicker

v. Seterus, Inc., W.D.Texas No. EP-15-CV-331-KC, 2016 WL 2622017, *5 (May 5, 2016)

(concluding that “privity exists between preceding and succeeding owners of property,”

and “assignees and servicing agents of a loan are in privity with an original mortgage

company”); Ernest v. CitiMortgage, Inc., W.D.Texas No. SA:13-CV-802-DAE, 2014 WL

294544, *4 (Jan. 22, 2014). See also Shore v. Wilmington Trust, N.A. for MFRA Trust

2015-1, S.D.Florida No. 16-25373-CIV-COHN/SHELTZER, 2017 WL 1494509, *4 (April

20, 2017); Taylor v. Sturgell, 553 U.S. 880, 894, 128 S.Ct. 2161, 171 L.Ed.2d 155 (2008)

(explaining that “nonparty preclusion may be justified based on a variety of pre-existing

‘substantive legal relationship[s]’ between the person to be bound and a party to the

judgment” such as preceding and succeeding owners of property). Accordingly, Chase is

in privity with BOA.

{¶27} The record further demonstrates that Huff Realty, Singer, and Parchman

were acting as agents for BOA, and it is well-settled law “that a principal-agent

relationship satisfies the privity requirement of res judicata where the claims alleged are

within the scope of the agency relationship.” ABS Industries, Inc. v. Fifth Third Bank,

333 Fed.Appx. 994, 999 (6th Cir.2009), citing Cook v. Criminger, 9th Dist. Summit No.

22313, 2005-Ohio-1949, ¶ 20 (holding that res judicata precluded consideration of state

claims against individual university employees based on the same conduct that formed

the basis for prior federal claims resolved in favor of the state university because the

state action concerned the employees’ actions as agents of the university and hence

established privity); Waddell v. Boldman, 4th Dist. Adams No. 01CA721, 2002-Ohio-

4229, ¶ 23 (holding that the defendant contractual employee was in privity with the

plaintiff's former husband, through an agency relationship, and thus, a prior divorce

action resolving issues regarding the timbering of land had res judicata effect against the

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plaintiff in her subsequent action alleging that the defendant cut timber on the land

without authorization); Ferrara v. Vicciarelli Funeral Servs., Inc., 2016-Ohio-5144, 69

N.E.3d 171, ¶ 19 (8th Dist.) (concluding that privity was established between funeral

home, employee, and independent contractor because all actions taken by employee and

independent contractor were on behalf of the funeral home).

{¶28} Here, BOA specifically informed Atteberry and Glenn Wright that any

further negotiations to purchase the property were to be done through Huff Realty and

Tom Singer. Wright admitted that he received a notice that Huff and Singer were BOA’s

agents working on behalf of BOA. At all times, Huff, Singer, and Parchman followed

BOA’s instructions with respect to the personal property and acted within the scope of

the agency relationship, and the contract for sale indicated that Huff and Singer were

acting as agents for BOA. Additionally, Huff, Singer, and Parchman shared a mutuality

of interest and common desired result with BOA with regard to the sale of the home.

Therefore, for purposes of res judicata, Huff, Singer and Parchman are in privity with

BOA.

Privity of Joseph and Tracy Heller
{¶29} Next, the Wrights argue that the trial court erred in concluding that the
Hellers were in privity with BOA. Although the Wrights acknowledge that privity may be
established by successors to property interests, they argue it is inapplicable here because
they did not raise a conversion claim against BOA in the first action, and the personal
property was not sold to the Hellers as the Wrights initially believed.
{¶30} However, res judicata operates to “extinguish a claim by the plaintiff
against the defendant even though the plaintiff is prepared in the second action (1) To
present evidence or grounds or theories of the case not presented in the first action, or
(2) To seek remedies or forms of relief not demanded in the first action.” Frye Teachers
Assn., OEA/NEA v. State Emp. Relations Bd., 81 Ohio St.3d 392, 395, 692 N.E.2d 140
(1998). Thus, an attempt to litigate the same claim using a new theory, grounds,
evidence or form of relief will not circumvent res judicata if the Hellers are in privity with

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BOA.
{¶31} Nonparty preclusion may be justified based on a variety of preexisting
“substantive legal relationship[s]” between the person to be bound and a party to the
judgment, such as preceding and succeeding owners of property. Taylor, 553 U.S. at
894, 128 S.Ct. 2161, 171 L.Ed.2d 155. “[S]uccessive ownership interests in the same
property are sufficient to sustain the flow of privity.” Union Cemetery Assoc., 45 Ohio
St.2d at 51, 341 N.E.2d 298.
{¶32} In this case, privity between BOA and the Hellers is established because
the Hellers are succeeding owners of the same property. At the time of the filing of the
federal action, the Wrights were well aware that the Hellers had purchased the home
from BOA, that their personal belongings had been left in the home, and that the Hellers
retained the personal property. Raising several claims, the Wrights alleged that BOA
unlawfully disposed of the personal property by allowing it to remain in the home after
the Hellers had purchased the home. The Wrights, who could have included a
conversion claim against BOA in the federal action, cannot circumvent res judicata by
attempting to litigate this claim against the Hellers because they are in privity with BOA.
{¶33} Therefore, we must overrule this assignment of error. Accordingly, we do
not reach the remaining five assignments of error because they are moot.
{¶34} The judgment of the trial court is affirmed.
Judgment affirmed.

MILLER and DETERS, JJ., concur.

Please note:

This court has recorded its own entry this date.

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