[Cite as Green Tree Servicing L.L.C. v. Hoover, 2016-Ohio-1169.]


                                       COURT OF APPEALS
                                      STARK COUNTY, OHIO
                                   FIFTH APPELLATE DISTRICT



GREEN TREE SERVICING, LLC                         :            JUDGES:
                                                  :            Hon. Sheila G. Farmer, P.J.
        Plaintiff-Appellee                        :            Hon. W. Scott Gwin, J.
                                                  :            Hon. Patricia A. Delaney, J.
-vs-                                              :
                                                  :
KENNETH C. HOOVER, ET AL.                         :            Case No. 2015CA00144
                                                  :
        Defendants-Appellants                     :            OPINION




CHARACTER OF PROCEEDING:                                       Appeal from the Court of Common
                                                               Pleas, Case No. 2013CV02820




JUDGMENT:                                                      Affirmed




DATE OF JUDGMENT:                                              March 21, 2016




APPEARANCES:

For Plaintiff-Appellee                                         For Defendant-Appellant

DAVID J. DEMERS                                                MICHAEL J. LUBES
MICHELLE L. POLLY-MURPHY                                       3200 West Market Street
3 North High Street                                            Suite 106
P.O. Box 714                                                   Fairlawn, OH 44333
New Albany, OH 43054
Stark County, Case No. 2015CA00144                                                         2

Farmer, P.J.

          {¶1}   On October 29, 2013, appellee, Green Tree Servicing, LLC, filed a

complaint in foreclosure against appellant, Catherine Hoover, and her now deceased

husband, Kenneth Hoover, for failing to pay on a note secured by a mortgage. An

amended complaint was filed on November 8, 2013. Appellant filed an answer and

counterclaim on December 31, 2013. The counterclaim alleged wrongful foreclosure and

truth in lending violations.

          {¶2}   The case was referred to mediation. While in mediation, appellant filed a

complaint on May 5, 2014 in federal court against Bank of America, N.A., appellee's

predecessor in interest to the subject loan (Case No. 14-CV-00975). The complaint

alleged claims similar to those alleged in the instant case against appellee. The parties

entered into a settlement agreement on August 12, 2014, and the complaint was

dismissed with prejudice on August 18, 2014.

          {¶3}   Following a failed mediation, the instant foreclosure complaint was referred

back to the trial court.       Appellant filed an amended answer and counterclaim on

September 29, 2014. The counterclaim dropped the previous allegations and alleged

breach of contract and sought injunctive relief

          {¶4}   A bench trial commenced on March 20, 2015. The trial court stopped the

trial for appellee to secure a witness from Bank of America, N.A. During appellee's efforts

to secure a witness, appellee was made aware of the settlement agreement in the federal

action.

          {¶5}   On May 29, 2015, appellee filed a request for expedited hearing to

determine the applicability of the settlement agreement and release on the instant
Stark County, Case No. 2015CA00144                                                         3


complaint. A hearing was held on June 1, 2015. By order filed July 22, 2015, the trial

court dismissed appellant's counterclaims, affirmative defenses, and defenses, finding

the settlement agreement barred appellant's instant claims under the doctrine of res

judicata. The trial court also issued a decree in foreclosure.

       {¶6}   Appellant filed an appeal and this matter is now before this court for

consideration. Assignment of error is as follows:

                                             I

       {¶7}   "THE TRIAL COURT ERRED WHEN IT GRANTED PLAINTIFF-

APPELLEE'S MOTION TO DISMISS THE DEFENDANT-APPELLANT'S DEFENSES,

AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS AS WELL AS AWARDED THE

PLAINTIFF-APPELLEE A DECREE IN FORECLOSURE WHERE THE PLAINTIFF-

APPELLEE FAILED TO PROVE THAT THE SETTLEMENT AGREEMENT BARRED

DEFENDANT-APPELLANT'S COUNTERCLAIMS, DEFENSES, AND AFFIRMATIVE

DEFENSES UNDER THE DOCTRINE OF RES JUDICATA."

                                             I

       {¶8}   Appellant claims the trial court erred in granting appellee's motion to dismiss

her defenses, affirmative defenses, and counterclaim, and claims the doctrine of res

judicata does not apply sub judice. We disagree.

       {¶9}   Appellant argues res judicata does not apply because the settlement

agreement with appellee's predecessor in title in the federal action did not bar her

defenses in the instant case, and the allegations in the counterclaim did not relate to the

settlement agreement.     In support of these positions, appellant directs this court to

Section 2(T) of the settlement agreement which states the following in pertinent part:
Stark County, Case No. 2015CA00144                                                    4




             T. Other Accounts/Future Events. ***To the extent that this

      Agreement keeps the Loan and underlying Note, Deed of Trust and/or

      Mortgage in force (as modified or otherwise herein), this Agreement shall

      not alter the rights, duties and obligations of said Loan by the Parties,

      including but not limited including but not limited (sic) to such actions as

      acceleration and foreclosure as may be appropriate in the event of a future

      default.



      {¶10} In response, appellee argues the following language of Section 1(F) of the

settlement agreement bars appellant's present claims:



             F. PLAINTIFF Release. For consideration of the Payment, the receipt

      and sufficiency of which are hereby expressly acknowledged, the

      PLAINTIFF for herself and each of her present and former heirs, executors,

      administrators, partners, co-obligors, co-guarantors, guarantors, sureties,

      family members, spouses, attorneys, insurers, agents, representatives,

      predecessors, successors, assigns and all those who claim through them

      or could claim through them (collectively "Releasors") unconditionally and

      irrevocably remises, waive, satisfy, release, acquit, and forever discharge

      DEFENDANT and each of its present, former and future parents,

      predecessors, successors, assigns, assignees, affiliates, subsidiaries,

      divisions, departments, subdivisions, owners, partners, principals, trustees,
Stark County, Case No. 2015CA00144                                                    5


     creditors, shareholders, joint ventures, co-ventures, officers and directors

     (whether acting in such capacity or individually), attorneys, vendors,

     accountants,    nominees,     agents    (alleged,   apparent     or   actual),

     representatives, employees, managers, administrators, and/or each person

     or entity acting or purporting to act for them or on their behalf, as well as

     any past, present or future person or any entity that held or holds any

     interests in the Loan(s) and the underlying Note, Deed, of Trust and/or

     Mortgage, including but not limited to Bank of America Corporation and all

     of its subsidiaries and affiliates (collectively the "Releasees"), and each of

     them respectively, from and against any and all past and present claims,

     counterclaims, actions, defenses, affirmative defenses, suits, rights, causes

     of action, lawsuits, set-offs, costs, losses, controversies, agreements,

     promises and demands, or liabilities, of whatever kind or character, direct

     or indirect, whether known or unknown or capable of being known, whether

     existing now or to come into existence in the future, arising at law or in

     equity, by right of action or otherwise, including, but not limited to, suits,

     debts, accounts, bills, damages, judgments, executions, warranties,

     attorneys' fees, costs of litigation, expenses, claims and demands

     whatsoever that the Releasors, or their attorneys, agents, representatives,

     predecessors, successors and assigns, have or may have against the

     Releasees, for, upon, or by reason of any matter, cause or thing,

     whatsoever, in law or equity, including, without limitation, the claims made

     or which could have been made by the PLAINTIFF arising from the
Stark County, Case No. 2015CA00144                                                     6


      origination or servicing of the Loan (in any manner) as well as in any way

      related to the underlying property, Notes, Mortgage and/or Deeds of Trust,

      any servicing act or omission thereon as well as any claim or issue which

      was or could have been brought in the Litigation (collectively "Released

      Matters").



      {¶11} Both parties suggest this court examine appellant's September 29, 2014

amended answer and counterclaim in this case vis-à-vis the claims raised by appellant in

the federal action that generated the settlement agreement.

      {¶12} Appellant's amended answer included a general denial and a denial that

appellee performed all of the conditions precedent in the mortgage. The affirmative

defenses against appellee were: 1) failure to state a claim; 2) failure to name necessary

parties; 3) appellee was not the real party in interest; 4) appellee lacked capacity and

standing to sue; 5) appellee was not entitled to enforce the note against any party; 6)

appellee was barred by the doctrines of waiver, laches, and estoppel; 7) appellee had

unclean hands; 8) appellee engaged in deceptive practices; and 9) appellee failed to

name the estate of Kenneth Hoover. The affirmative defenses against appellee and its

predecessors were: 1) failure to give required notices pursuant to RESPA; 2) failure to

response to a qualified written request under RESPA; 3) negligently failed to properly

apply payments to the account; and 4) failure to mitigate damages.

      {¶13} In her amended counterclaim, appellant alleged appellee and its

predecessors refused and/or misapplied her monthly payments and breached the

contract, and appellant referenced previous dismissals by appellee and its predecessors
Stark County, Case No. 2015CA00144                                                            7


in 2011 and 2013. Appellant alleged breach of contract and sought injunctive relief.

Appellant demanded the following in part:



               C. For an order requiring the Plaintiff to show cause why it should not

       be enjoined from proceeding with the foreclosure of Hoover's home;

               D. For an order requiring the Plaintiff to accurately credit all payments

       made by Mr. Hoover and/or Hoover and to modify the subject mortgage loan

       consistent with its representations and as required by contract and

       applicable federal law;

               E. For an order of set off against any amount owed to the Plaintiff;



       {¶14} The federal complaint filed against Bank of America, appellee's

predecessor in interest, alleged breach of contract, RESPA violations, TILA violations,

breach of fiduciary duty, lack of good faith and fair dealing, infliction of emotional distress,

violations of the Fair Debt Collection Practices Act, violations of the Fair Credit Reporting

Act, and failure to correct inaccurate reporting under §623(a)(2) of the FCRA and 15

U.S.C. section 1681s-2(A)(2). Within the facts of the federal complaint are the following

allegations:



               44. Inconsistent with BOA's April 10, 2013 Notice and Green Tree's

       April 23, 2013 Notice (see Exhibits "C" and "D" hereto), BOA sent

       correspondence to Hoover dated May 5, 2013, wherein BOA advised

       Hoover that the "new Customer Relationship Manager at Bank of America,
Stark County, Case No. 2015CA00144                                                     8


      N.A., your home loan servicer," was Ms. Trista Hines (emphasis added). A

      true and correct copy of this letter is attached hereto and incorporated

      herein as Exhibit E.

             45. BOA purports to have assigned the subject mortgage to Green

      Tree on or about May 16, 2013, which assignment was purportedly

      recorded nearly three months later on August 7, 2013 in the office of the

      Stark County Recorder as Instrument No. 201308070039207 (the

      "Assignment").

             46. BOA continued to prosecute its second foreclosure action

      against Hoover in the State Court (Case No. 2012CV02090) and to defend

      the Hoover's counterclaim until the time of the joint dismissal entry on

      October 9, 2013, with no motion to substitute Green Tree as the party

      plaintiff and no appearance in the case by Green Tree.

             47. In fact, at no time during the prior action was it ever mentioned

      by BOA'S counsel or by any BOA or Green Tree representative, either

      directly to Hoover or to the undersigned counsel, that Green Tree was the

      new owner and holder of the subject mortgage and/or promissory note.



      {¶15} We note the instant complaint was filed on October 29, 2013, with an

amended complaint filed on November 8, 2013, and appellant filed her federal action on

May 5, 2014.    In the federal complaint, appellee was specifically referenced.      The

settlement in the federal action was entered into on August 12, 2014, and appellant filed

her amended answer and counterclaim in this case on September 29, 2014.
Stark County, Case No. 2015CA00144                                                      9

      {¶16} In Grava v. Parkman Twp., 73 Ohio St.3d 379, 1995-Ohio-331, syllabus, the

Supreme Court of Ohio explained res judicata as "[a] valid, final judgment rendered upon

the merits bars all subsequent actions based upon any claim arising out of the transaction

or occurrence that was the subject matter of the previous action." In Taylor v. Sturgell,

553 U.S. 880, 892 (2008), the United States Supreme Court explained the following:



             The preclusive effect of a judgment is defined by claim preclusion

      and issue preclusion, which are collectively referred to as "res judicata."**

      Under the doctrine of claim preclusion, a final judgment forecloses

      "successive litigation of the very same claim, whether or not relitigation of

      the claim raises the same issues as the earlier suit." New Hampshire v.

      Maine, 532 U.S. 742, 748, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001). Issue

      preclusion, in contrast, bars "successive litigation of an issue of fact or law

      actually litigated and resolved in a valid court determination essential to the

      prior judgment," even if the issue recurs in the context of a different claim.

      Id., at 748–749, 121 S.Ct. 1808. By "preclud[ing] parties from contesting

      matters that they have had a full and fair opportunity to litigate," these two

      doctrines protect against "the expense and vexation attending multiple

      lawsuits, conserv[e] judicial resources, and foste[r] reliance on judicial

      action by minimizing the possibility of inconsistent decisions." Montana v.

      United States, 440 U.S. 147, 153–154, 99 S.Ct. 970, 59 L.Ed.2d 210 (1979).

      (Footnote omitted.)
Stark County, Case No. 2015CA00144                                                        10


      {¶17} Even though appellee was not named as a defendant in the federal

complaint, the settlement agreement and release bound Bank of America's assigns.

Appellant conceded appellee was an assign and was an assign during the federal action.

      {¶18} As held by the Taylor court at 893-895:



             Though hardly in doubt, the rule against nonparty preclusion is

      subject to exceptions. For present purposes, the recognized exceptions

      can be grouped into six categories.**

             First, "[a] person who agrees to be bound by the determination of

      issues in an action between others is bound in accordance with the terms

      of his agreement." 1 Restatement (Second) of Judgments § 40, p. 390

      (1980) (hereinafter Restatement).        For example, "if separate actions

      involving the same transaction are brought by different plaintiffs against the

      same defendant, all the parties to all the actions may agree that the question

      of the defendant's liability will be definitely determined, one way or the other,

      in a 'test case.' " D. Shapiro, Civil Procedure: Preclusion in Civil Actions

      77–78 (2001) (hereinafter Shapiro). See also California v. Texas, 459 U.S.

      1096, 1097, 103 S.Ct. 714, 74 L.Ed.2d 944 (1983) (dismissing certain

      defendants from a suit based on a stipulation "that each of said

      defendants…will be bound by a final judgment of this Court" on a specified

      issue).**

             Second, nonparty preclusion may be justified based on a variety of

      pre-existing "substantive legal relationship[s]" between the person to be
Stark County, Case No. 2015CA00144                                                 11

     bound and a party to the judgment. Shapiro 78. See also Richards, 517

     U.S., at 798, 116 S.Ct. 1761. Qualifying relationships include, but are not

     limited to, preceding and succeeding owners of property, bailee and bailor,

     and assignee and assignor. See 2 Restatement §§ 43–44, 52, 55. These

     exceptions originated "as much from the needs of property law as from the

     values of preclusion by judgment." 18A C. Wright, A. Miller, & E. Cooper,

     Federal Practice and Procedure § 4448, p. 329 (2d ed.2002) (hereinafter

     Wright & Miller).**

            Third, we have confirmed that, "in certain limited circumstances," a

     nonparty may be bound by a judgment because she was "adequately

     represented by someone with the same interests who [wa]s a party" to the

     suit. Richards, 517 U.S., at 798, 116 S.Ct. 1761 (internal quotation marks

     omitted). Representative suits with preclusive effect on nonparties include

     properly conducted class actions, see Martin, 490 U.S., at 762, n. 2, 109

     S.Ct. 2180 (citing Fed. Rule Civ. Proc. 23), and suits brought by trustees,

     guardians, and other fiduciaries, see Sea–Land Services, Inc. v. Gaudet,

     414 U.S. 573, 593, 94 S.Ct. 806, 39 L.Ed.2d 9 (1974).          See also 1

     Restatement § 41.

            Fourth, a nonparty is bound by a judgment if she "assume[d] control"

     over the litigation in which that judgment was rendered. Montana, 440 U.S.,

     at 154, 99 S.Ct. 970. See also Schnell v. Peter Eckrich & Sons, Inc., 365

     U.S. 260, 262, n. 4, 81 S.Ct. 557, 5 L.Ed.2d 546 (1961); 1 Restatement §

     39. Because such a person has had "the opportunity to present proofs and
Stark County, Case No. 2015CA00144                                                     12


      argument," he has already "had his day in court" even though he was not a

      formal party to the litigation. Id., Comment a, at 382.

             Fifth, a party bound by a judgment may not avoid its preclusive force

      by relitigating through a proxy. Preclusion is thus in order when a person

      who did not participate in a litigation later brings suit as the designated

      representative of a person who was a party to the prior adjudication. See

      Chicago, R.I. & P.R. Co. v. Schendel, 270 U.S. 611, 620, 623, 46 S.Ct. 420,

      70 L.Ed. 757 (1926); 18A Wright & Miller § 4454, at 433–434. And although

      our decisions have not addressed the issue directly, it also seems clear that

      preclusion is appropriate when a nonparty later brings suit as an agent for

      a party who is bound by a judgment. See id., § 4449, at 335.

             Sixth, in certain circumstances a special statutory scheme may

      "expressly foreclos[e] successive litigation by nonlitigants…if the scheme is

      otherwise consistent with due process." Martin, 490 U.S., at 762, n. 2, 109

      S.Ct. 2180. Examples of such schemes include bankruptcy and probate

      proceedings, see ibid., and quo warranto actions or other suits that, "under

      [the governing] law, [may] be brought only on behalf of the public at large,"

      Richards, 517 U.S., at 804, 116 S.Ct. 1761. (Footnotes omitted.)



      {¶19} We conclude res judicata applies based on the language of Section 1(F) of

the settlement agreement, appellant's specific acknowledgment of appellee as an assign,

the instant complaint preceded the federal action, and the similarity of the claims in the

two cases.
Stark County, Case No. 2015CA00144                                                 13


      {¶20} Upon review, we find the trial court did not err in dismissing appellant's

defenses, affirmative defenses, and counterclaim.

      {¶21} The sole assignment of error is denied.

      {¶22} The judgment of the Court of Common Pleas of Stark County, Ohio is

hereby affirmed.

By Farmer, P.J.

Gwin, J. and

Delaney, J. concur.


SGF/sg 226
