08 ^.5 ^`^ IN THE SUPREME COURT OF OHIO CLERK OF COURT SUPREME COURT OF OHIO

IN THE SUPREME COURT OF OHIO

SETTLERS VILLAGE CONDOMINIUM :

Appellee

-vs-ROBERT M. NESTOR, et al.

Appellant

On Appeal from the Cuyahoga County

Court of Appeals, Eighth Appellate District

Court of Appeals

Case No. 90028

NOTICE OF APPEAL

08®^.5 ^`^

MEMORANDUM IN SUPPORT OF JURISDICTION

MICHAEL WESTERHAUS (#0022707)

Attorney for Appellant

14255 Peppercreek Dr

Strongsville, OH 44138

(440) 238-1011

Fax No. (440-238-1011)

F

JOSEPH F. SALZGEBER (#0063619) ATTORNEYS FOR APPELLEE FOTH and FOTH CO.

11221 Pearl Rd. Strongsville, OH 44136 (440) 846-0000 Fax No. 440-846-9770

AUG 112008

CLERK OF COURT

SUPREME COURT OF OHIO

TABLE OF CONTENTS

Pape

INTEREST AND INVOLVES A SUBSTANTIAL CONSTITUTIONAL QUESTION . . . I STATEMENT OF THE CASE . . . 1 STATEMENT OF FACTS . . . 2

ARGUMENT IN SUPPORT OF PROPOSITIONS OF LAW . . . 3

Proposition of Law No. 1: Appellant had a constitutional right to have his

Counterclaim and affirmative defenses considered . . . 3 Proposition of Law No. 2: A condominium lien is improper if not provided for

by Ohio Revised Code §5311.18 and its Declaration of Condominium Ownership... 5

CONCLUSION ... 7

SERVICE ... 7

APPENDIX Appx. Page

EXPLANATION OF WHY THIS CASE IS A CASE OF PUBLIC OR GREAT GENERAL INTEREST AND INVOLVES A SUBSTANTIAL CONSTITUTIONAL QUESTION

The case involves a question of public or great general interest in that it involves the right of a person being foreclosed upon to raise defenses to the foreclosure. We are presently in the midst of a foreclosure crises. The present case involves the ability of a Defendant in a

foreclosure to raise an underlying defense to a mortgage if they were to miss a single payment. The ruling of the trial court says that all defenses to a foreclosure are moot if the person being foreclosed misses a single payment. Although the present case involves a condominium association foreclosing, the same principles would apply to a lender.

This Court should think about the consequences for the foreclosure crises if Defendants are unable to raise underlying defenses to the mortgage being foreclosed because they miss a single payment. Are all defenses to a mortgage moot? That is exactly what the present Opinion says. Do we really want banks to delay in providing discovery and then taking advantage of the delay, as in the present case?

The case also involves the interpretation of the new condominium law, ORC §5311.18, and the limits of a condominium association to create a lien, in effect taking a person's property immediately without any oversight.

The case involves constitutional issues of due process, as the court is taking a person's property without considering his legal defenses.

STATEMENT OF THE CASE

Plaintiff, Appellee, filed for foreclosure against Defendant, Appellant's condominium. Appellant filed an answer and counterclaim questioning the ability of the condominium

association to foreclose and the validity of the lien. Appellant requested discovery from Appellee on December 1, 2006. Appellee filed for summary judgment on December 11, 2006. The parties stipulated that Appellee shall have an additional 30 days to respond to Appellant's discovery request from January 1, 2007 until January 31, 2007 and Appellant shall have until February 28, 2007 to respond to Appellee's motion for summary judgment. The court "granted"

the parties joint motion/stipulation, but added "No extensions of these dates will be allowed." The Appellee did not file their response to Appellant's discovery until March 5, 2007 and on April 3, 2007, Appellee's Summary Judgment Motion was granted. On April 4, 2007 the Magistrate's decision was filed and Appellant filed his Motion for Summary Judgment on his Counterclaim and in opposition to Appellee's Summary Judgment Motion. On April 11, 2007 Appellant filed objections to the Magistrate's decision and on April 17, 2007 Appellant's Motion for Summary Judgment was denied as moot. On May 25, the court overruled Appellant's Objections to the Magistrate's Decision and adopted the Magistrate's Decision ordering foreclosure in favor of Appellee and Defendant, Washington Mutual Bank, finding there is no just cause for delay. Appellee appealed to the Eighth District Court of Appeals, who affirmed the trial court.

FACTS

This story starts on the usual dark and stormy nighti when the rain leaked into Appellant's condominium unit. The next day broke bright and cheerful and the Appellee's management sent R.C.'s Home Services Inc., an independent contractor, to repair the condominium roof over Appellant's unit. Appellant seeing the repair man, thought to himself, "why not get him to fix the inside of my unit; after all, the condominium roof's leaking caused the water damage inside my unit?" The repair person called the condominium management who authorized the repair.

Unfortunately, this story is not yet over and the plot.thickens. Appellee changed its mind about paying for the repairs because the Declaration of Condominium Ownership provides that the interior walls are not common property, but the responsibility of the unit owner. So, Appellee billed Appellant $595.29, which it had paid for the repairs. Appellant refused to pay for the repairs because the damage to his ceiling was caused by the exterior water leak from the common roof and he never authorized paying for repairs to his ceiling.

At this point the plot thickens, as Appellee files a lien for $982.25, which included the $595.29 and some costs and filed the present foreclosure action. To make matters worse,

Appellee refused to accept Appellant's monthly maintenance fees and subsequently filed

another lien for $3,578.71 for the refused maintenance fees. This amount goes up every month.

ARGUMENT IN SUPPORT OF PROPOSITIONS OF LAW

Proposition of Law No. 1: Appellant has a constitutional right to have his Counterclaim

and Affirmative Defenses considered.

Appellant's Counterclaim and Affirmative Defense raise the issue that the present lien is improper; that the lien is based on a claim upon which a condominium association has no legal right to record a lien. There is no doubt that Appellee placed a lien on Appellant's property; the real question is whether it is a legal lien and should be foreclosed. Ohio Revised Code

§5311.18(C) specifically gives a unit owner the right to challenge an improper lien charged against his unit, stating:

(C) A unit owner who believes that the portion of the common expenses chargeable to the unit, for which the unit owners association files a certificate of lien pursuant to division (A) of this section, has been improperly charged may commence an action for the discharge of the lien in the court of common pleas of the county in which all or a part of the condominium property is situated. In the action, if it is finally determined that the portion of the common expenses was improperly charged to the unit owner or the unit, the court shall enter an order that it determines to be just, which may provide for a discharge of record of all or a portion of the lien.

When the trial court dismissed Appellant's Affirmative Defense and Counterclaim as moot, it directly violated ORC §5311.18(C). The court's use of the word "moot" shows that it did not even consider the propriety of the lien. There were no other reasons for the court not to consider the counterclaim, as there were no time limits set for filing summary judgments. Appellee's Motion for Summary Judgment did not raise the issue and Appellee clearly had the right under to raise the issue of the validity of the lien.

The trial court's error in the present case arose not from the granting the summary judgment, but by not considering the counterclaim and by making the Summary Judgment instantly appealable. Nestor admits that Settler's Village filed a lien and that he did not pay the underlying amounts Settler's Village claimed were owed it. Replying to the Settler's Village's Summary Judgment Motion would not be necessary because Nestor filed a valid counterclaim. A counterclaim is an independent cause of action capable of standing on its own and in this

case was compulsory since it arose out of the transaction or occurrence of the Plaintiffs Complaint. (Civil Rule 13) Nestor filed a Motion for Summary Judgment on that Counterclaim, which the court ignored; denying it as moot before Appellee had the opportunity to respond.

As the Court of Appeal's Decision correctly stated "Even when a motion for summary judgment is unopposed, the motion and supporting evidence must show the absence of any material fact before the court can grant the motion - the motion can only granted if there are no issues of material fact and the party making the motion in entitled to judgment as a matter of law." Nestor made the validity of the underlying lien a material fact in the case by challenging its validity in his counterclaim.

Appellee neither moved for summary judgment in its favor on Nestor's Counterclaim nor addressed the lien's validity issue in its Motion for Summary Judgment. It could have presented some evidence that it had the legal right to file the lien against Nestor's property instead of just saying that it filed the lien in which instance the Trial Court would be justified in granted

Summary Judgment in favor of Settler's Village. Therefore since Appellee failed to present evidence on a disputed material issue, the court should have denied its Summary Judgment Motion. In the alternative the court could have entered an interlocutory summary judgment in favor of Appellee and then considered Appellant's counterclaim allowing Appellee to respond.

Civil Rule 56(D) provides for a case not fully adjudicated upon a summary judgment motion:

If on motion under this rule summary judgment is not rendered upon the whole case or for all the relief asked and a trial is necessary, the court in deciding the motion, shall examine the evidence or stipulation properly before it, and shall if practicable, ascertain what material facts exist without controversy and what material facts are actually and in good faith controverted. The court shall thereupon make an order on its journal specifying the facts that are without controversy, including the extent to which the amount of damages or other relief is not in controversy, and directing such further proceedings in the action as are just. Upon the trial of the action the facts so specified shall be deemed

established, and the trial shall be conducted accordingly

Clearly the case was not fully adjudicated after the Court granted Settler's Village

Summary Judgment Motion as there was an unresolved counterclaim with a disputed fact as to the validity of Settler's Village lien. There is nothing that makes the Counterclaim moot. The

Complaint seeks foreclosure on the lien. Nestor's Affirmative Defense and Counterclaim question the validity of the lien. The issues are not inherently exclusive and Nestor's Counterclaim is not moot, but crucial to the case.

The ignoring of Appellant's defenses was a violation of his rights of due process. A foreclosure is a taking of the person's property.

Proposition of Law No. 2: A condominium lien is improper if not provided for by

Ohio Revised Code §5311.18 and its Declaration of Condominium Ownership.

There has to be some constitutional limit on a Condominium Association's power to create a lien and ultimately foreclose. The net effect of a condominium lien is that when a lien is filed the person's property is grabbed without any due process of law. Instantly the property is worth less. There is little control over this process. Condominium Associations are limited by the Ohio Revised Code §5311.18 and in the present case Appellee's Declaration of

Condominium Ownership as to what a lien can be created for:

5311.18 Lien for common expenses.

(A)(1) Unless otherwise provided by the declaration or the bylaws, the unit owners association has a lien upon the estate or interest of the owner in any unit and the appurtenant undivided interest in the common elements for the payment of any of the following expenses that are chargeable against the unit and that remain unpaid for ten days after any portion has become due and payable :

(a) The portion of the common expenses chargeable against the unit; Section 14 of the Appellee's Declaration of Condominium Ownership captioned "Assessment Liens" states:

All sums assessed by the Association for common charges applicable to any condominium Unit remaining unpaid for more than ten (10) days after same have become due and payable shall constitute a lien on such condominium Unit prior to all other liens subsequently arising or created, except:

(i) real estates tax and assessment liens of record; and

(ii) (ii) first mortgage liens or record. Such lien may be foreclosed in the same manner as a mortgage on real Property on behalf of all Unit Owners by the President of the association, pursuant to the authorization of the Board of Managers thereof.. .

What are the "common charges"? Section 11 of the Declaration captioned

"Proportionate Representation; Participation in Common Profits, and Expenses: Definition" provides:

Each Unit owner shall share in the common profits and expenses, as hereinafter defined and in the total voting power of the Unit Owners' association in accordance with such Unit owner's interest in the Common Areas as set forth in the Schedule of percentage of Interest attached hereto as Exhibit "C". The share of the expenses of the association is equal to the base price, site feature premiums and plan options of the Purchaser's Unit divided by the total of the base price, site feature premiums and plan options of all Units. However, such proportionate representations maybe limited in accordance with the provisions of the By-Laws attached here as Exhibit "A".

Article VIII, of Appellee's By-Laws captioned "Determination and Payment of

assessments", Section 1. captioned "Obligation of Owners to Pay assessments" provides:

It shall be the duty of every Unit Owner [to] pay his proportionate share of the expenses of administration, maintenance and repair of the Common Areas and Facilities and of the other expenses provided for herein. Such proportionate share shall be in the same ratio as his percentage of Ownership on the Common Areas and Facilities as set forth in Exhibit "C" of the declaration. Payment thereof shall be in such amount and at such times as may be determined by the BOARD of the Association, as hereinafter provided.

The point of these sections is that the Appellee can assess Unit Owners for expenses for the common areas and that these expenses are to be shared in accord with the percentage of ownership. The $595.29 basis for the first lien was not a common expense. It was for the repair to the inside ceiling, not the common ceiling over Appellant's Unit. It was not a proportionate share of anything. Section 7 of the Declaration defines the space within the unit as "Each of the Units shall consist of all of the space bounded by the interior surfaces of the perimeter walls, floors and ceiling of the Unit and such interior walls and other partitions, or roof rafters, necessary to constitute a complete enclosure of space. Wherever such surfaces consist of plaster or plasterboard, all of such plaster and plasterboard contiguous to such surface shall be included with the Unit." Appellee's reason for charging Appellant for the repair of his interior ceiling is that it was not a common expense. Appellee cannot have it both ways. Since the lien was for the repair to Appellant's unit and not for a common expense, it was not a proper lien and is not capable of being foreclosed.

CONCLUSION

For the reasons discussed above, this case involves matters of public and great general interest and a substantial constitutional question. The appellant requests that this court accept jurisdiction in this case so that the important issues presented will be reviewed on the merits.

Respectfully submitted,

Michael Westerhaus

Attorney for Appellant, Robert M. Nestor

PROOF OF SERVICE

I certify that a copy of this Memorandum in Support of Jurisdiction was sent by ordinary mail to Arthur Edward Forth, Attorney for Appellee, at Foth & Foth Co., 11221 Pearl Road, Strongsville, OH 44136, on August 7, 2008.

Michael Westerhaus

Attorney for Appellant, Robert M. Nestor

JUN 2 5 2008

Tnixxf uf Appea1s of 04iu

EIGHTH APPELLATE DISTRICT

COUNTY OF CUYAHOGA

JOURNAL ENTRY AND OPINION

No. 90028

SETTLER'S VILLAGE CONDOMINIUM

PLAINTIFF-APPELLEE

vs.

ROBERT M. NESTOR, ET AL.

DEFENDANTS-APPELLANTS

JUDGMENT:

AFFIRMED

Civil Appeal from the

Cuyahoga County Court of Common Pleas

Case No. CV-587237

BEFORE: Boyle, J., Cooney, P.J., and Stewart, J.

RELEASED: May 29, 2008

JOURNALIZED: JUN 2 5 2008 CA07090028 52262885

1(^^^^^ IN 111111111111111 mil 111111111111111 IIN

-1-ATTORNEY FOR APPELLANT

Michael Westerhaus

14255 Peppercreek Drive

Strongsville, Ohio 44138

ATTORNEYS FOR APPELLEES

FOR: Settler's Village Condominium

Arthur F. Foth

Joseph F. Salzgeber

Foth & Foth Co., L.P.A.

11221 Pearl Road

StrongsviIle, Ohio 44136

FOR: Washington Mutual Bank

Melissa Whalan

P.O. Box 5480

Cincinnati, Ohio 45201

FILED AND JOURNALIZED

PER APP. R. 22(E)

JUN 2 5 2008

MAY 2 9 2003

^^^^^ IN IIII

N.B. This entry is an announcement of the court's decision. See App.R. 22(B), 22(D) and 26(A); Loc.App.R. 22. This decision will be journalized and will become the judgment and order of the court pursuant to App.R. 22(E) unless a motion for reconsideration with supporting brief, per App.R. 26(A), is filed within ten (10) days of the announcement of the court's decision. The time period for review by the Supreme Court of Ohio shall begin to run upon the journalization of this court's announcement of decision by the clerk per App.R. 22(E). See, also, S.Ct. Prac.R. IT, Section 2(A)(1).

-1-BOYLE, M.J., J:

This case came to be heard upon the accelerated calendar pursuant

to App.R. 11.1 and Loc.R. 11.1, the record from the Cuyahoga County Court of

Common Pleas, the oral arguments and the briefs of counsel.

Defendant-appellant Robert Nestor appeals from a summary judgment rendered in favor

of plaintiff'-appellee, Settler's Village Condominium, on its claims that Nestor

failed to reimburse Settler's Village for repairs made to the interior walls of his

condominium after the common area roof failed and caused damage.

Settler's Village filed a complaint for foreclosure and marshaling of liens

against Nestor. The lien arose after Nestor made interior repairs to his

condominium using a company that Settler's Village had hired to make repairs

to the roof of the complex in a common area for the condominium owners.

Settler's Village later realized that the association rules made all owners

responsible for interior loss, regardless whether it occurred because of a failure

of common property, so it billed Nestor for the repair. Nestor refused to repay

Settler's Village, claiming that the association should pay for the repairs because

the common area of the roof failed, causing the damage to his unit. Settler's

Village eventually filed a lien against Nestor and then filed this action to

foreclose.

-2-Settler's Village filed a motion for summary judgment. The parties agreed

that Settler's Village would answer Nestor's request for admissions and

interrogatories by January 31, 2007, and that Nestor would respond to the

motion for summary judgment by February 28, 2007. The court noted that no

extensions would be given to these deadlines. Nestor did not respond to the

motion for summary judgment. A magistrate then granted the motion for

summary judgment. Nestor objected to the magistrate's decision, claiming that

he did not respond within the deadline because Settler's Village failed to produce

the required discovery. He also complained that the magistrate failed to

consider his argument, raised by way of counterclaim, that the lien was invalid

because the money that Settler's Village claimed he owed had been necessitated

by a failure of a common area. The court overruled the objections and adopted

the magistrate's decision.

We find that the court did not err by overruling Nestor's objections and

adopting the magistrate's decision because Nestor failed to respond to the motion

for summary judgment. He conceded that he did not respond to the motion for

summary judgment as required by the court's pretrial order, but said that he did

not do so because Settler's Village did not respond to his request for admissions

by the court's deadline. By his own admission, Nestor did not seek an extension

of the deadline for responding to summary judgment under Civ.R. 56(F), nor did

-3-he file a motion to compel discovery. In Taylor v. Franklin Blvd. Nursing Home,

Inc. (1996), 112 Ohio App.3d 27, 30, we held that a party who fails to seek relief

under Civ.R. 56(F) in the trial court does not preserve its rights thereto for

purposes of appeal. See, also, Maschari v. Tone, 103 Ohio St.3d 411,

2004-Ohio-5342, at ¶20; Stegawski v. Cleveland (1987), 37 Ohio App.3d 78, 86. By failing

to seek the court's intervention pursuant to Civ.R. 56(F), Nestor cannot be heard

to complain that he could not respond to the motion for summary judgment

because Settler's Village failed to respond to discovery requests.

Even when a motion for summary judgment is unopposed, the motion and

supporting evidence must show the absence of any material fact before the court

can grant the motion - the motion can only be granted if there are no issues of

material fact and the party making the motion is entitled to judgment as a

matter of law. Charles Gruenspan Co., L.P.A. v. Thompson, Cuyahoga App. No.

80748, 2003-Ohio-3641. The motion for summary judgment filed by Settler's

Village established the existence of a lien and Nestor's nonpayment of the debt

on which the lien was based. Appended to the motion was a copy of the lien, a

printout showing outstanding payments for the repairs, and an affidavit which

attested to the veracity and accuracy of those documents. With the absence of

any evidentiary material to the contrary, Settler's Village established that it was

entitled to judgment as a`matter of law.

-4-Judgment affirmed.

It is ordered that appellee recover from appellant costs herein taxed.

The court finds there were reasonable grounds for this appeal.

It is ordered that a special mandate be serit to said 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 Proce

COLLEEN CONWAY COONEY, P.J., and

MELODY J. STEWART, J., CONCUR