[Cite as BankUnited, N.A. v. Lowe, 2020-Ohio-3742.]




                            IN THE COURT OF APPEALS OF OHIO
                               SECOND APPELLATE DISTRICT
                                  MONTGOMERY COUNTY

                                                      :
 BANKUNITED, N.A.                                     :
                                                      :   Appellate Case No. 28591
         Plaintiff-Appellee                           :
                                                      :   Trial Court Case No. 2019-CV-2184
 v.                                                   :
                                                      :   (Civil Appeal from
 WILLIAM H. LOWE, et al.                              :    Common Pleas Court)
                                                      :
         Defendant-Appellant                          :


                                             ...........

                                             OPINION

                             Rendered on the 17th day of July, 2020.

                                             ...........

PHILLIP BARRAGATE, Atty. Reg. No. 0063017, 4805 Montgomery Road, Suite 320,
Norwood, Ohio 45212
      Attorney for Plaintiff-Appellee

WILLIAM H. LOWE, 2027 Berwyck Avenue, Dayton, Ohio 45414
      Defendant-Appellant, Pro Se

                                            .............

FROELICH, J.
                                                                                           -2-




       {¶ 1} William H. Lowe appeals from a Final Judgment Entry in Rem finding him to

be in default on a promissory note held by BankUnited, N.A. (“BankUnited”) and secured

by a mortgage assigned to BankUnited, and directing the foreclosure and sale of Lowe’s

subject real property unless all sums due were paid within three days. The judgment of

the trial court will be affirmed.

                           Factual and Procedural Background

       {¶ 2} On January 9, 2009, Lowe executed a promissory note payable to United

Wholesale Mortgage in the amount of $91,829.00 plus interest at the rate of 5.5 percent

annually. (See Complaint for Foreclosure in Rem and Relief (“Complaint”) filed on

5/13/19, Exh. A.)1 That note was secured by a mortgage on real property located at 2027

Berwyck Avenue in Dayton. (See id., Exh. C.) The note passed through two subsequent

payees before being endorsed in blank by Bank of America, N.A. BankUnited thereafter

acquired the note; the related mortgage also was assigned to BankUnited.

       {¶ 3} Lowe’s loan was modified on November 14, 2013 to provide for a new

principal balance of $87,362.25 at an interest rate of 4.625 percent, effective January 1,

2014. (See id., Exh. B.) On May 13, 2019, BankUnited, as the holder of the note and loan

modification agreement and as the assignee of the related mortgage, filed a complaint for

foreclosure in rem in the Montgomery County Court of Common Pleas. BankUnited

alleged that Lowe was in default due to his failure to make the required monthly loan


1 An allonge attached to the copy of the note included with BankUnited’s complaint states
that it applies to a promissory note executed by a different individual in a different amount.
(See Complaint, Exh. A, Allonge.) BankUnited acknowledges that such allonge
“references a different loan” (Brief of Appellee BankUnited, p. 4), and that allonge
therefore has no bearing on this action.
                                                                                          -3-


payments, but acknowledged that Lowe was not personally liable for the remaining debt

due to his prior discharge in bankruptcy. BankUnited sought only to foreclose on the

subject real property in order to recover the amount it allegedly was due as the first

mortgage lienholder.

       {¶ 4} BankUnited’s complaint also named as defendants Lowe’s “Unknown

Spouse, if any,” the Montgomery County Treasurer (“Treasurer”), and the United States

of America (“United States”), due to Unknown Spouse’s possible dower or other interest,

the Treasurer’s interest by virtue of a real estate tax lien, and the United States’ interest

through a second mortgage recorded on December 18, 2013. (See Complaint, Exh. D.)

       {¶ 5} Although both Lowe and Unknown Spouse received personal service

through Lowe on May 21, 2019, neither timely answered nor otherwise responded to the

complaint. The Treasurer filed an answer asserting a “paramount” lien in an unspecified

amount for taxes, assessments, interest, penalties, and other charges against the subject

real property. The United States’ answer claimed a lien through a “second mortgage”

Lowe delivered to the Secretary of Housing and Urban Development (“HUD”) to secure

indebtedness in “the principal amount of $27,016.83.” Additionally, the United States

asked that any judgment entered “specifically provide for the Government’s right of

redemption under 28 U.S.C. § 2410(c).”

       {¶ 6} Following a brief delay due to an administrative dismissal without prejudice,2

the matter was returned to the trial court’s active docket on September 25, 2019. Soon


2 The dismissal was in response to BankUnited’s motion representing that it temporarily
was “barred from proceeding with foreclosure” because “the subject property [wa]s
covered under the Major Disaster Declaration the Federal Emergency Management
Agency (“FEMA”) announced on June 18, 2019.” (Parenthetical sic.) (See Motion to Stay
Case filed on June 28, 2019.)
                                                                                         -4-


thereafter, BankUnited moved for default judgment against Lowe and Unknown Spouse

based on their failure to answer or otherwise plead.

       {¶ 7} In granting that motion on October 4, 2019, the trial court entered judgment

in rem, stating in part as follows:

              IT THEREFORE IS ORDERED that [BankUnited] is granted an in-

       rem [sic] Judgment in the amount of $73,908.09 on the promissory note plus

       interest of 4.625% per year from December 1, 2018, plus any

       advancements for taxes, insurance and other expenditures for the

       protection of the Property.

              * * * [The total amount of any such advancements] is undetermined

       at the present time, but will continue to accrue, and will be ascertained at

       the time of the confirmation of the foreclosure sale, and may be added to

       the first mortgage lien of [BankUnited] and shall be paid from the proceeds

       of the sale. The Court reserves for further order a determination of the exact,

       if any, amount due [BankUnited] for said advances.

              ***

              The Court finds that there is due the Treasurer of Montgomery

       County, Ohio, taxes, accrued taxes, assessments and penalties on the

       premises hereinafter described, as shown on the County Treasurer’s tax

       duplicate, the exact amount being unascertainable at the present time, but

       which amount will be ascertained at the time of sale, which are a valid and

       subsisting lien thereon for that amount so owing.

              Defendant, United States of America, filed an Answer herein and
                                                                                  -5-


claims some right, title, interest, lien, or claim, upon the premises described

herein as set forth in the pleading(s) filed herein, but that any right, title,

interest, lien, or claim that said defendant may have is inferior and

subsequent to the lien of [BankUnited].

       No finding is made at this time as to the claim, right, title, interest,

lien, or claim [sic] of the Defendant, United States of America, * * * except

to note that such claim, right, title, interest, lien or claim * * * is hereby

ordered transferred to the proceeds derived from the sale of said premises

and shall be paid according to its priority as shown on the preliminary

judicial report after the payment of the costs of the within action, taxes due

and payable[,] and the amount hereinabove found due [BankUnited] * * *.

The United States of America[ ] shall have the right to redeem within the

time periods provided by 28 U.S.C. § 2410(c).

       And, now to distribute the proceeds of said sale, it is ordered that the

Sheriff or Private Sale Officer out of the funds in his hands pay:

       FIRST: The costs herein payable to Montgomery County
       Clerk of Courts.

       SECOND: To the Treasurer of Montgomery County, the
       unpaid taxes, assessments, interest and penalties due and
       payable on said premises.

       THIRD: To [BankUnited], the sum of $73,908.09 plus interest
       thereon at the rate of 4.625% per annum from December 1,
       2018, together with advances, if any.

       FOURTH: The balance, if any, to be deposited with the clerk,
       pending further order.

       The Court further finds that there is no just reason either legal or
                                                                                          -6-


       equitable for delay in entering judgment for [BankUnited]. It is therefore

       ORDERED, ADJUDGED AND DECREED that unless the sums

       hereinabove found due, together with the costs of this action, be fully paid

       within three (3) days from the date of the entry of this decree, the equity of

       redemption and dower of all the Defendants in and to said premises shall

       be foreclosed, and said premises sold * * *.

       {¶ 8} Lowe filed a timely notice of appeal from that judgment entry. By order dated

November 15, 2019, we sua sponte ordered the parties “to address the finality of the

order on appeal in their merit briefs,” in light of the decisions in Tax Ease Ohio LLC v.

Wells, 2d Dist. Montgomery No. 27920, 2018-Ohio-4346, ¶ 19-24, and Farmers State

Bank v. Sponaugle, 157 Ohio St.3d 151, 2019-Ohio-2518, 133 N.E.3d 470, ¶ 27-32.

       {¶ 9} The substantive content of the pro se filing Lowe thereafter submitted as his

appellate brief reads in its entirety as follows:

       The reason for this appeal is because someone unknowingly [sic] got a

       second mortgage against my house for the amount of $27,000. I deny taking

       this loan out or rec[ei]ving any of the money. I never even knew the loan

       was tak[en] out until 2019 when the loan was tak[en] out in 2013. Nothing

       was br[ought] to my attention about this loan and I am willing to do what it

       takes to look furth[e]r into this and find out where the money went.

                             Preliminary Issue - Jurisdiction

       {¶ 10} As a threshold matter, we must determine whether the judgment in rem

issued by the trial court constitutes a final appealable order. This court lacks jurisdiction

to review an order or judgment that is not final. Tax Ease Ohio at ¶ 11, citing CitiMortgage,
                                                                                            -7-


Inc. v. Roznowski, 139 Ohio St.3d 299, 2014-Ohio-1984, 11 N.E.3d 1140, ¶ 10; Gen. Acc.

Ins. Co. v. Ins. Co. of N. Am., 44 Ohio St.3d 17, 20, 520 N.E.2d 266 (1989). “An order of

a court is a final appealable order only if the requirements of both R.C. 2505.02 and, if

applicable, Civ.R. 54(B), are met.” State ex rel. Scruggs v. Sadler, 97 Ohio St.3d 78,

2002-Ohio-5315, 776 N.E.2d 101, ¶ 5. Pursuant to Civ.R. 54(B), an order that

“adjudicates fewer than all the claims or the rights and liabilities of fewer than all the

parties” is not final and appealable absent “an express determination” by the trial court

“that there is no just reason for delay.”

        {¶ 11} A foreclosure action “ ‘is a two-step process, the first part of which ends with

the judgment and decree of foreclosure’,” while the second part “ ‘involves the sale of the

property, culminating in a confirmation of sale and dispersal of the proceeds.’ ” U.S.

Bank Natl. Assn. v. Conrad, 2018-Ohio-994, 108 N.E.3d 1156, ¶ 14 (2d Dist.), quoting

Fifth Third Bank v. Dayton Lodge LLC., 2d Dist. Montgomery No. 24843, 2012-Ohio-3387,

¶ 18. In proper form, both the judgment and decree of foreclosure and the later

confirmation of sale constitute final orders. Id. A foreclosure decree is final and appealable

if it “determines the extent of each lienholder’s interest, sets out the priority of the liens,

determines the other rights and responsibilities of each party, and orders the property to

be sold by sheriff’s sale.” Sponaugle, 157 Ohio St.3d 151, 2019-Ohio-2518, 133 N.E.3d

470, ¶ 18. “ ‘Liability is fully and finally established when the court issues the foreclosure

decree and all that remains is mathematics, with the court plugging in final amounts due

after the property has been sold at a sheriff’s sale.’ ” Id. at ¶ 32, quoting Roznowski at

¶ 25.

        {¶ 12} In this case, the trial court’s judgment in rem explicitly stated that the court
                                                                                                -8-


made “[n]o finding * * * at this time as to the claim, right, title, interest, lien, or claim [sic]

of the Defendant, United States of America,” through its second mortgage. Instead, the

court ordered the United States’ undetermined interest “transferred to the proceeds

derived from the sale of” the subject premises and “paid according to its priority.” In a

prior case where the trial court’s decision used nearly identical language, we determined

that we lacked jurisdiction. See Tax Ease Ohio. In that case, we concluded that by

deferring any finding as to the validity, amount, and priority of the United States’ lien, “the

trial court failed to properly set forth the rights and priority of the federal government’s

lien.” Id. at ¶ 19, 23. Accordingly, we held that the judgment in Tax Ease Ohio did not

amount to a final appealable order. Id. at ¶ 27.

       {¶ 13} The similarity of the language employed in this case led us to solicit the

parties’ positions as to whether the judgment at issue here was final. Although Lowe’s pro

se filing did not address the issue, BankUnited’s appellate brief maintains that the trial

court’s judgment in rem was a final appealable order. BankUnited first notes that none of

the defendants in this action filed counterclaims or cross-claims. Consequently, “there

were no claims pending when the trial court entered its foreclosure decree.” See

Sponaugle at ¶ 31. Our analysis thus focuses on whether the trial court’s judgment left

unresolved “the rights and liabilities” of any party. See id. at ¶ 29.

       {¶ 14} BankUnited observes that Lowe did not appear in the trial court,

distinguishing this matter from Tax Ease Ohio, where the property owner/mortgagor filed

an answer denying that the United States possessed a valid lien. See Tax Ease Ohio at

¶ 25. We concur as to that distinction. Although our conclusion in Tax Ease Ohio did not
                                                                                            -9-


depend on the property owner’s answer,3 Lowe’s failure to contest either the validity or

amount of the United States’ lien in the trial court is significant, especially in light of

subsequent case law.

       {¶ 15} Since the Ohio Supreme Court’s decision in Sponaugle, we have had

occasion to consider again whether inclusion of the “makes no finding at this time”

language as to a lien of the United States prevents a foreclosure judgment from being a

final order. See M&T Bank Successor by Merger to M&T Mtge. Corp. v. Wood, 2d Dist.

Clark No. 2019-CA-46, 2020-Ohio-10. In Wood, analyzing facts substantially similar to

those presented in this case, we concluded that the judgment entry at issue was a final

appealable order, because the property owners/mortgagors “d[id] not dispute the federal

lien against them” and “the priority of the liens * * * [wa]s clear.” Id. at ¶ 33. We reach the

same conclusion here.

       {¶ 16} As in Wood, the order at issue in this case made clear that the lien of the

United States was “inferior and subsequent” to that of the plaintiff. (Final Judgment Entry

in Rem, p. 3.) The trial court’s judgment entry also set forth the order of priority of payment

as follows:

       FIRST: The costs herein payable to Montgomery County Clerk of Courts.

       SECOND: To the Treasurer of Montgomery County, the unpaid taxes,
       assessments, interest and penalties due and payable on said premises.

       THIRD: To [BankUnited], the sum of $73,908.09 plus interest thereon at the
       rate of 4.625% per annum from December 1, 2018, together with advances,
       if any.

       FOURTH: The balance, if any, to be deposited with the clerk, pending

3 In Tax Ease Ohio, we explicitly rendered “no opinion” as to whether the property owner’s
denials in her answer were sufficient to “dispute” the validity of the United States’ lien. Id.
at ¶ 26.
                                                                                             -10-


        further order.

(Id. at p. 4.)

        {¶ 17} The same judgment entry further ordered that any “right, title, interest, lien,

or claim” of the United States be “transferred to the proceeds derived from the sale of

said premises and * * * paid according to its priority as shown on the preliminary judicial

report[,]4 after the payment of costs * * *, taxes due and payable[,] and the amount * * *

due [BankUnited].” (Id. at p. 3.) As in Wood, the United States will recover on its

subordinate interest only if the amount realized from the sale of the subject real property

exceeds the amount due BankUnited on its first mortgage and the sums due the other

priority lienholders. See Wood at ¶ 33. Although the judgment entry at issue in Wood, like

that here, provided that calculating the amount of the United States’ lien was “continued

until further order,” we there concluded that “[i]f the United States of America disputes

any amount it receives, it may appeal from the confirmation of sale.” Id. The same remedy

remains available to the United States in this matter. All that remains is “ ‘for the trial court

to perform the ministerial task of calculating the final amounts that w[ill] arise during

confirmation proceedings.’ ” See Sponaugle, 157 Ohio St.3d 151, 2019-Ohio-2518, 133

N.E.3d 470, at ¶ 27, quoting Roznowski, 139 Ohio St.3d 299, 2014-Ohio-1984, 11 N.E.3d

1140, at ¶ 20.

        {¶ 18} Consistent with our decision in Wood, 2d Dist. Clark No. 2019-CA-46, 2020-

Ohio-10, no issues remain to be determined regarding the rights and liabilities of the

parties in this matter, and the foreclosure decree before us is a final appealable order.


4The preliminary judicial report likewise reflected that the mortgage interest acquired by
BankUnited predated the United States’ mortgage lien. (Preliminary Judicial Report filed
on 5/13/19, p. 2.)
                                                                                        -11-


                             Lowe’s Challenge on Appeal

       {¶ 19} Lowe challenges on appeal the validity of the second mortgage benefitting

the United States, claiming to have first become aware of that 2013 document in 2019

and denying that he received any of the funds that mortgage purports to secure. Lowe’s

appeal on that basis is not well taken.

       {¶ 20} “ ‘It is settled law that issues raised for the first time on appeal and not

having been raised in the trial court are not properly before this court and will not be

addressed.’ ” Tax Ease Ohio, LLC v. Lucas, 2d Dist. Montgomery No. 27836, 2018-Ohio-

3075, ¶ 6, quoting State v. Schneider, 2d Dist. Greene No. 95-CA-18, 1995 WL 737910,

*1 (Dec. 13, 1995), citing State v. Coleman, 37 Ohio St.3d 286, 294, 525 N.E.2d 792

(1988). As Lowe failed to appear in the trial court and judgment was entered against him

by default, he did not previously challenge the validity of the second mortgage, and he

cannot do so by way of this appeal.

       {¶ 21} Furthermore, the record contains nothing to substantiate Lowe’s contention.

To the contrary, the copy of the second mortgage attached to BankUnited’s complaint

appears to bear Lowe’s signature, was witnessed before a notary public, and was

properly recorded with the Montgomery County Recorder’s office on December 18, 2013.

That second mortgage was signed on November 14, 2013, apparently at the same time

as the November 14, 2013 Loan Modification Agreement, which Lowe does not challenge.

Both documents were witnessed by “Karl J. Zimmerman” and notarized by “Maria J.

Cochran,” and the signatures of William H. Lowe appear to be the same on both.

                                          Conclusion

       {¶ 22} For the foregoing reasons, the judgment of the trial court will be affirmed.
                                                -12-


                                .............



DONOVAN, J. and HALL, J., concur.


Copies sent to:

Phillip Barragate
William H. Lowe
Michele Phipps
Michael Downey
Hon. Timothy N. O’Connell
