[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
