... . {^ . . . ^ , . ^ .

^: ^^^^^^ ^

IN THE SUPREME COURT OF OHIO .

LSF6 MERCURY REO INVESTMENTS *. Supreme Court Case No,

I \ ^ ^ ^ ^., ^ ^ `-^

Plaintiff-Appellee * On appeal from the Delaware County ,Court of Appeals, Sth Appellate District

^vs. \

RICK L. GARRABRANT, et al. * Appeals Case 11CAE040037

Defendant-Appellant. ^`

APPELLANT RICK GARRABRANT' S 1VIEMORANDUlVIIN SUPPORT OF JURI5DICTION

MARC E. DANN (0039425) (COUNSEL OF RECORD)GRACE DOBERDRUK (0085547)DANN, DOBERDRUK & HARSHMAN, LLC4600 Prospect AvenueCleveland, Ohio 44103(216) 373-0539 Office(216) 373-0536 Facsimilemdann@dannlaw.comgrace@dannlaw.corn

Counsel for Appellant Rick Garrabrant

AMY CARR (0078061)SHAPIRO, VAN ESS, PHILLIPS & BARRAGATE, LLP4805 Montgomery Road, Suite 320Norwood, OH 45212(513) 396-8100 Phone(847) 627-8805 Faxacarr3 @logs.com .

Counsel for Plaintiff-Appellee LSF6 Mercury REO Investments

^^^^D^^^^^ ^ ^ ^^^ ^ a^

^^^R^ ^^ ^^^R^SUFREdVI^ ^O^R^` 0^ OHIO

ti

TABLE OF CONTENTS

EXPLANATION OF WHY THIS CASE IS A CASE OF PUBLIC OR GREAT GENERALINTEREST AND INVOLVES A SUBSTANTIAL CONSTITUTIONAL QUESTION .......:.. 1

STATEMENT OF THE CASE AND FACTS ..................................:.........................3

ARGUMENT IN SUPPORT OF PROPOSITIONS OF LAW ........:..........:.......:.. ..........6

Proposition of Law l: In order to invoke the subject matter jurisdiction of the common

pleas court there must be a justiciable controversy between the Plaintiff and the Defendant

at the time the complaint is filed .....................:....................................................6

Proposition of Law 2: The lack of standing when the complaint is filed cannot be cured

when there is a deliberate misrepresentation at the time of filing .................................8

Proposition of Law 3: It is an abuse of discretion to deny a motion to vacate a judgment of

foreclosure without a hearing if a Plaintiff files a complaint upon which it is not entitled to

relief and a homeowner files a 60(B) motion that alleges operative facts warranting

, relief ................:. ... ........ . ............ ... ... ... ... ............:.........................................11

CONCLUSION ........................................:.........................................................15

CERTIFICATE OF SERVICE .. ..................................................................:.......15

APPENDIX Appx. Pa^e

Opinion of the Fifth District Court of Appeals(October 12, 2012) ...................................................................... ..................1

Judgment of Fifth District Court of Appeals... ... ... . .: . .. . .. ... ... ..... .... ... ... . ... ....... . ... .......7

(October 12, 2012)

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EXPLANATION OIa' WHY THIS CASE INVOLVES GREAT GENERAL INTEREST^^ ^^ ^ ^ ^ AND A SUBSTANTIAI, CONSTITUTIONAL QUESTION ^ ^ ^, ^ ^ ^^ ^ ^ ^ ^ ^ ^^^^ ^

Appellant Rick Garrabrant's dilemma is of great general interest and involves substantial

constitutional questions because he and hundreds of other homeowners have been systematically

deprived of their due process rights when their homes were taken from them based upon false

allegations. When a plaintiff in a foreclosure case like LSF6 Mercury REO Investments Trust

Series 2008-1 falsely alleges that it is tlie "holder" of the note and mortgage even when the note

was never indorsed to the Plaintiff or anyone else by the original lender then the Plaintiff should

not be allowed to obtain a default judgment against the homeowners because one of the

allegations in the pleadings is false and does not entitle the Plaintiff to judgment. On October 31,

2012 the Supreme Court of Ohio held that invoking the jurisdiction of the court "depends on the

state of things at the time of the action brought... demonstration that the original allegations

were false will defeat jurisdiction." ." Fed. Home Loan Mtge. Corp. v. Schwartzwald, Slip

Opinion No. 2012-Ohio-5017, 25. Since the Court agrees that there is no justi^iable

controversy unless the Plaintiff owns the note and mortgage at the time of filing the complaint

thrs is one of the reasons that the judgment against Appellant Rick Garrabrant should be vacated.

LSF6 Mercury REO Investments Trust Series 2008-1 filed a complaint for foreclosure

against Appellant Rick Garrabrant and attached as an exhibit a note that was originally payable

to The CIT Group/Consumer Finance, Inc. and did not contain any indorsement. At the time the

complaint wa^ filed Appellee did not own or hold Appellant's note and mortgage and made a

false statement in the complaint when it alleged itself to be the "holder" of the note because the

note attached to the complaint was payable to original lender The CIT Group/Consumer Finance,

Inc. See R.C. 1303.21(B) ("If an instrument is payable to an identified person, negotiation

1

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requires transfer of possession of the instrument and its indorsement by the holder.") Appellee

^was not the holder of the note because the note was never indorsed by original lender The CIT

CJroup/Consumer Finance, Inc..

It is a common occurrence in foreclosure cases for entities other than the original lender

to file a complaint for foreclosure and falsely allege that they are the "holder" of the note. These

entities, as in this case obtain judgment based upon this false assertion. If the Plaintiff was not

the original lender then a note .must be negotiated by a written indorsement pursuant to Ohio

Revised Code section 1303.21, the negotiation language in Ohio's version of the Uniform

Commercial Code, in order for the Plaintiff to obtain a judgment of foreclosure as the "holder"

of the note.

Justice requires that if from the face of the complaint it is clear that the Plaintiff is not the

holder of the note the Plaintiff should have no legal right to file a complaint for foreclosure that _

falsely alleges that Plaintiff is the holder of the note. If a homeowner in such a situation obtains

counsel after a default judgment is granted and files a 60(B) motion to vacate the judgment then

it is an abuse of discretion for the trial court to deny the motion. At a minimum, when the face of

the pleadings show a failure to comply with the negotiation provisions of the Ohio version of the

Uniform Commercial code, then before denying a motion to vacate a common pleas court judge

should hold a hearing. It is an abuse of discretion to deny such a motion without a hearing.

The hio Constitution in Article 4 only grants the Common Pleas Courts of hio

jurisdiction over justiciable matters. See Sectiori 4(B), Article 4, Ohio Constitution. A justiciable

matter involves an actual controversy. See Fortne^ v. Thomas (1970), 22 Ohio St.2d 13, 14 ("It

has been long and well established that it is the duty of every judicial tribunal to decide actual

controversies between parties legitimately affected by specific facts and render judgments which

2

can be carried into effect.') For a cause to be justiciable, there must exist a real controversy

presenting issues which are ripe for judicial resolution and which will have a direct and

immediate impact on the parties. See Burger Brewing Co. v. Liquor Control Comm. (1973), 34

Ohio St.2d 93, 97-98. When the complaint was filed the Plaintiff was not the owner and holder

of the note as alleged and thus there were no issues presented that were ripe for adjudication.

Because Plaintiff/Appellee did not prove or even convincingly allege that it was the

owner and holder the note and mortgage at the time the complaint was filed there was no

justiciable controversy between the plaintiff and the defendant homeowner, and thus no subject

matter jurisdiction. A substantial constitutional question arises as to whether or not a justiciable

controversy exists. The right to due process of law guaranteed by amendments five and fourteen

of the United State Constitution were also violated by the Court in this case and in many other

similar cases where the Judge refused to vacate a facially incorrect judgment.

STATEMENT OF THE CASE AND FACTS

On December 21, 2009 Plaintiff LSF61VIercury REO Investments Trust 2008-1 filed a

complaint in foreclosure in the Delaware County Court of Common Pleas and attached a copy of

a note payable to The CIT Group/Consumer Finance, Inc. See Complaint, Exhibit A. The

complaint alleges that LSF6 Mercury RE0 Investments is the "owner and holder" of the note,

but there is no indorsement on the note, See Complaint, Exhibit A. On December 29, 2009

Appellant Rick Garrabrant filed a pro se motion for extension of time to answer or otherwise

plead in order to mediate. On February 3, 2010 the Court granted the motion and referred the

case to mediation. On June 24, 2010 Plaintiff filed a motion to terminate mediation. n June 30,

2010 Appellant filed a motion to strike termination of inediation because Plaintiff had

misrepresented that Rick Garrabrant did not submit the loan modification paperwork when the

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only items missing were his children's and spouse's social security numbers, and account

numbers which he left out for privacy reasons. On July 21, 2010 the Court mediator filed a final

report of inediations that indicated she held a mediation and was not able to contact Defendant's

attorney, Rod Lawrence. However, Appellant Rick Garrabrant was defending himself pro se. On

July 27, 2010 the Court found mediation to have been unsuccessful and stated that Defendant's

answer was due on August 9, 2010 with dispositive motions to be filed on August 30, 2010.

Appellant Rick Garrabrant filed a motion to dismiss on August 9, 2010 that alleged that

the Plaintiff was not the real party in interest because he had received notice that his note was

sold on June 9, 2010. Appellant also argued that no notice of acceleration was given to him and

that he was not in arrears. Plaintiff filed a motion for extension of the dispositive deadline based

on the need to file a brief in opposition to the motion to dismiss. On August 25, 2010 the Court

granted the motion. On August 26, 2010 the Plaintiff filed a motion to substitute party plaintiff,

stating that the note had been sold after the complaint was filed. This motion does not explain

how the Plaintiff could sell a note that was not indorsed to the Plaintiff by original lender

The CIT Group/Consumer Finance, Inc. The motion falsely alleged that "Plaintiff LSF6

Mercury REO Investments Trust Series 2008-1 was the holder at the time the complaint was

filed" and based on this false statement the Court granfed the motion to substitute. While the

Plaintiff and pro se defendant argued over what month the assignment was made, if the note was

never indorsed to Plaintiff by the original lender then Plaintiff had no authority to sell the note.

On November 17, 2010 Substitute Plaintiff filed a notice of filing note with allonge. This

is a judicial admission that sufficient evidence was not in the record at the time the substitution

was granted. The allonge was signed by Paul Laird - Vice President of Vericrest Financial, Inc,

as Attorney-in-Fact for The CIT Crroup/Consumer Finance, Inc. However, there was nothing

4

attached to the complaint to show that the note was ever transferred to Plaintiff so Plaintiff did

not have the ability to transfer the note by allonge. Substitute Plaintiff filed a motion for default

judgment the same day as filing the allonge. On November 19; 2010 the Court scheduled a

hearing on the motion for default for December 16, 2010. Notice was addressed to Appellant, but

may have been mistakenly received by some other person who sent them back to the Court.

There is a docket entry reflecting return on December 6, 2010 with a message that the documents

were "inadvertently received and opened by mistake." Appellant Rick Garrabrant may not have

received notice of the hearing and the motion for default judgment was granted on December 17,

2010. Appellant's home was sold and the sale was confirmed.

On Apri14, 2010 Appellant filed an emergency motion to stay eviction and a 60(B)(1)

and 60(B)(5) motion. On April 15, 2011 the court denied Appellant's emergency motion to stay

eviction and 60(B) motion for relief from judgment. On Apri122, 2011 the Court entered an

amended judgment entry confirming sale and entering distribution. On Apri129, 2011 Appellant

filed a notice of appeal. On August 19, 2011 the case was stayed in the trial court due to

Appellant's bankruptcy filing. On October 18, 2011 the case was stayed by the Fifth District

Court of Appeals. The case was reinstated on April 19, 2012 and on October 12, 2010 the Court

dismissed the appeal. The Fifth District Court of Appeals reasoned that Appellant should have

filed a direct appeal of the December 21, 2010 judgment. Opinion, paragraph 15. However, since

Appellant was seeking relief pursuant to Civil Rule 60(B)(1) since he appeared in the case by

filing a motion to dismiss and was not notified of the default judgment hearing, the Court should

have evaluated his case for relief under Civil Rule 60(B)(1). In addition, Appellant moved for

relief pursuant to Civil Rule 60(B)(5).

5

In Appellant's bankruptcy case a copy of the note was filed that did not include the

allonge. Thus, after judgment was rendered against Appellant Rick Garrabrant the note filed in

the motion for relief from stay did not have an allonge. This is new evidence not available at the

time of the December 21, 2010 judgment that could have been investigated at a hearing on

Appellant's motion to vacate if the Court of Appeals reversed.

In support of its position on these issues, the Appellant presents the following argument:

ARGUMENT IN SUPPORT OF PROPOSITIONS OF LAW

Proposition of Law l: In order to invoke the subject matter jurisdiction of the commonpleas court there must be a justiciable controversy between the Plaintiff and the Defendantat the time the complaint is f.led.

The Ohio Constitution in Article 4 only grants the Common Pleas Courts of Ohio

jurisdiction over justiciable matters. See Section 4(B), Article 4, Ohio Constitution. A justiciable

matter involves an actual controversy. When the foreclosing Plaintiff does not own the note and

mortgage at the time the complaint is filed there is no justiciable controversy between the

plaintiff and the defendant homeowner, and thus no subject matter jurisdiction.

"It has been long and well established that it is the duty of every judicial tribunal to

decide actual controversies between parties legitimately affected by specif c facts and render

judgments which can be carried into effect." Fortner v. Thomas (1970), 22 Ohio Sf.2d 13, 14.

p'or a cause to be justiciable, there must exist a real controversy presenting issues that are ripe for

judicial resolution and which will have a direct and immediate impact on the parties. See Burger

Brewang Co. v. Laquo^ Control Comm. (1973), 34 Ohio St.2d 93, 97-98. More recently, in State

e.^ rel. Barclays Bank PLC v. CouNt of Common Pleas of Hamflton Ctv (1996), 74 Ohio St.3d

536, 542, 1996-Ohio-286, the court stated, "[a]ctual controversies are presented only when the

plaintiff sues an adverse party. This means not merely a party in sharp and acrimonious

disagreement with the plaintiff, but a party from whose adverse conduct or adverse property

interest the plaintiff properly claims the protection of the law."' If at the time that Appellee filed a

complaint for foreclosure and the Appellee misrepresented its legal status by falsely alleging it

was the holder of the note when the note was did not contain an indorsement from the original

lender, then there was no property interest for Appellee to claim protection from because the note

was not held by Appellee.

Appellee LSF6 Mercury REO Investments simply had no dispute with Appellant Rick

Garrabrant. Since the Ohio Constitution grants the Common Pleas Courts jurisdiction only over

justiciable matters, the Court did not have jurisdiction to render a judgment in this case. At the

time this case was filed, Appellee did not produce evidence of ownership of Appellant's note and

mortgage. Thus, no actual controversy existed between Plaintiff and the Defendants. Without

ownership, Appellee suffered no harm by an alleged default in payment and no justiciable

controversy existed. Although the trial court had subject matter jurisdiction over the general

topic area of foreclosures, the trial Court lacked subject matter jurisdiction over the Appellant'

foreclosure case because Appellee failed to attach valid proof of ownership at the time the

complaint was filed. The recent decision in Deutsche Bank Nataonal Trust Company v. Popov,

Cuyahoga County Case hlo. CV-09-691971 held:

THE DISMISSAL OF A FORECLOSURE ACTION IS REQUIRED UPON FINDING

THAT PLAINTIFF WAS NOT REAL PARTY IN INTEREST AT THE TIME IT FiLED THE

ACTION. IF A PARTY LACKS STANDING, BY EXTENSION, THE TRIAL COURT

LACKS SUBJECT MATTER JURISDICTION OVER THE ACTION.

The note attached to complaint was payable to The CIT Group/Consumer Finance Inc.

Thus, Plaintiff LSF6 Mercury REO Investments, from the face of its own pleadings, was not

entitled to any payments under the note from Appellant Rick Garrabrant and has suffered no

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harm from an alleged default. In order to have a justiciable controversy there must be a current

injury. Since Appellee did not own the Appellant's note, there is no justiciable controversy

between Appellee LSF6 Mercury REO Investments and Appellant Rick Garrabrant and the trial

court lacks subject matter jurisdiction under the Ohio Constitution to render a judgment.

The Supreme Court of Ohio ruled that "A judgment rendered by a court lacking subject

matter jurisdiction is void ab initio." Patton v. Diemer, 35 Ohio St. 3d 68, 70 (Ohio 1988).

"Consequently, the authority to vacate a void judgment is not derived from Civ. R. 60(B), but

rather constitutes an inherent power possessed by Ohio courts. See Staff Notes to Civ. R. 60(B);

Lincoln Tavern, Inc. v.. Snader (1956); 165 Ohio St. 61, 59 O.O. 74, 133 N.E. 2d 606, paragraph

one of the syllabus; Westmoreland v. Valley Homes Corp. (1975), 42 Ohio St. 2d 291, 294, 71

O.O. 2d 262, 264, 328 N.E. 2d 406, 409. It was neither incumbent upon appellee to establish a

basis for relief under Civ. R. 60(B) nor was it necessary for the common pleas court to derive its

authority therefrom. Rather, the "judgment" sought to be vacated constituted a nullity, It was

therefore within the inherent power of the trial court to vacate the judgment. Patton v. Diemer,

35 Ohio St. 3d 68, 70 (Ohio 1988).

Proposition of Law 2: The lack of standing when the complaint is filed cannot becured when there is a deliberate misrepresentation at the time of filing

Civil Rule 17 requires action to be prosecuted in the name of the real party in interest.

When Appellee LSF6 Mercury REO Investments filed a complaint for foreclosure against

Appellant Rick Garrabrant, the note was payable to The CIT Group/Consumer Finance, Inc. so

the c'ase was clearly not being prosecuted in the name of the real party in interest. The

unendorsed note attached to the complaint demonstrates LSF6 Mercury REO Investments's lack

of standing.

8

"Every action shall be prosecuted in the name of the real party in interest. Civ.R. 17. In a

foreclosure case the real party in interest is the holder of the note and mortgage at the time the

complaint is filed. Wells Fargo Bank, N.A. v. Jordan, 2009-Ohio-1092. The Eighth District Court

of Appeals based its analysis in Wells FaNgo Bank, N.A. v. Jordan on the following passage cited

by the First District Court of Appeals when it dismissed a foreclosure case due to lack of

standing in Wells Fargo'Bank, N.A. v. Byrd,

"A party lacks standing to invoke the jurisdiction of a court unless he has, in an

individual or a representative capacity, some real interest in the subject matter of

the action. State ex rel. Dallman v. Court of Common Pleas (1973), 35 Ohio St.2d

176, 298 N.E.2d 515, syllabus. The Eleventh Appellate District has held that

`Civ.R. 17 is not applicable when the plaintiff is not the proper party to bring the

case and, thus, does not have standing to do so. A person lacking any right or

interest to protect may.not invoke the jurisdiction of a court.' Northland Ins. Co.

v. Illumfnatang Co., l lth Dist. Nos. 2002-A-0058 and 2002-A-0066, 2004-Ohio-

1529, at 17 (internal quotations and citations omitted). The court also noted that

`Civ.R. 17(A) was not applicable unless the plaintiff had standing to invoke the

jurisdiction of the court in the first place, either in an individual or representative

capacity; with sorne real interest in the subject matter. Civ.R. 17 only applies if

the action is commenced by one who is sui juris or the proper party to bring the

action.' Travelers Indemn. Co. v. R. L. Smith Co. (Apr. 13, 2001), l lth Dist. No,

2000-L-014." LSF6 Mer^cury REO Investments v. Byrd, 178 Ohio App.3d 285,

2008-0hio-4603 at 9, 897 N.E.2d 722.

A foreclosing plaintiff that not own the mortgage and note at the time of filing the Complaint is

not the proper party to bring the case, and thus, Civ. R. 17 which makes reference to ratification,

joinder or substitution is inapplicable. "We hold that in a foreclosure action, a bank that was not

the mortgagee when suit was filed cannot cure its lack of standing by subsequently obtaining an

interest in the mortgage." Wells Fargo Bank, N.A. v. Byrd, 2008-Ohio-4603 at 16.

A sua sponte dismissal by the Court for lack of standing is appropriate because the

Advisory Committee's Notes to Civ,R. 17 "make it clear that this provision is intended to

9

prevent forfeiture when determination of the proper party to sue is difficult or when an

understandable mistake has been made. When determination of the correct party to bring the

action was not difficult and when no excusable mistake was made, the last sentence of Rule

17(a) is inapplicable and the action should be dismissed." Bank of New YoNk v. Gandele, 2010-

Ohio-542, 4 citing Wells Fargo Bank, N.A. v. Byrd, 2008-Ohio-4603.

No excusable mistake was made when Appellee filed a foreclosure case against

Appellant. Appellee lacked any evidence of owriership and then created that evidence to procure

a default judgment through fraud. This result was not intended by the Civil Rules. Furthermore,

Civil Rule 19 requires joinder when a person has an interest in property as an assignee.

Civ. R. 19(a)(3). "A person who is subject to service of process shall be joined as,a party in the

action if (1) in his absence complete relief cannot be accorded among those already parties, or

(2) he claims an interest relating to the subject of the action and is so situated that the disposition

of the action in his absence may (a) as a practical matter impair or impede his ability to protect

that interest or (b) leave any of the persons already parties subject to a substantial risk of

incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed

interest, or (3) he has an interest relating to the subject of the action as an assignor; assignee,

subrogor, or subrogee." Civ. R, 19(A).

Since the note was payable to The CIT Group/Consumer Finance, Inc. the Ohio Rules of

Civil Procedure required joinder of The CIT Group/Consumer Finance, Inc. to the foreclosure

ease pursuant to Civi1 Rule 19(a)(3) but this was never done. If Appellee wanted to file

foreclosure of a note that it did not hold then it had to join The CIT Group/Consumer Finance,

Inc, to the case as a party in order for just adjudication.

,

10

From 2006 until the present day there have been rising foreclosures throughout the

United States which have created an economic crisis. Once homeowners started contesting these^

foreclosures, courts were shocked to learn that many documents submitted by attorneys for

foreclosure plaintiffs were fabricated, robo-signed, and that the plaintiffs lacked standing to

foreclose. hio first recognized this problem starting in 2007 with the now often quoted decision

of Judge Boyko who called the integrity of the court "Priceless" and dismissed 14 foreclosure

cases on the same day due to lack of sfanding. See In re Foreclosure Cases, 2007 U.S. Dist.

LEXIS 84011, (N.D. Ohio, Oct. 31, 2007). Two weeks after Judge Boyko's decision, Judge

Kathleen McDonald O'Malley dismissed thirty two (32) foreclosure actions in the;Northern

District of Ohio for lack of standing, and concluded that "a foreclosure plaintiff...especially who

is not identified on the note and/or mortgage at issue, must attach to its complaint documentation

demonstrating that it is the owner and holder of the note and mortgage upon which suit is filed.

In other words, a foreclosure plaintiff must provide documentation that it is the holder and owner

of the note and mortgage as of the date the foreclosure action is filed." In Re: Foreclosure

Actions, 2007 WL 4034554 (N.D. Ohio Nov 14, 2007).

The Southern District of Ohio came to the same conclusion regarding lack of standing

and ruled that in a foreclosure that the plaintiff must be the holder of both the note and mortgage

at the time the complaint is filed. In re Foreclosure Cases, 3:07CV043, (S.D. Ohio, Nov. 15,

2007). The federal courts measure ownership by a written assignment of mortgage. When a

complaint is filed and the assignment of mortgage is not recorded, the court has reason to doubt

the validity of the plaintiff's claims.

Proposition of I,aw 3: It is an abuse of discretion to deny a motion to vacate a judgment offoreclosure without a hearing if a Plaintiff files a complaint upon which it is not entitled torelief and a homeowner files a 60(B) motion that alleges operative facts warranting relief

11

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Appellant Rick Garrabrant has a meritorious defense to foreclosure because there was no

indorsement on his note. Appellee was not the holder of Appellant Rick Garrabrant's note. The

promissory note attached to the complaint is^payable to The CIT Group/Consumer Finance, Inc.

See Cofnplaint, Exhibit A, There is no indorsement on the note. Based on the Plaintiff s own

pleadings the CIT Group/Consumer Finance, Inc. was the one and only entity entitled to enforce

the note. "If an instrument is payable to an identified person, negotiation requires transfer of

possession of the instrument and its indorsement by the holder." R.C. 1303.21(B). Appellant

Rick Garrabrant's note is payable to an identif ed person, namely The CIT Group/Consumer

Finance, Inc. Therefore, the only way that Appellee LSF6 Mercury REO Investments could have

become a"holder" would for The CIT Group/Consumer Finance, Inc. to transfer possession of

the note to LSF6 Mercury REO Investments and either indorse the note directly to LSF6 '

Mercury REO Investments or indorse the note in blank. Appellant Rick ^Garrabrant's note has no

indorsement at all. See Complaint, Exhibit A. The allonges and assignment of mortgage that

Appellee subsequently used to obtain a judgment was should have been re-examined at a

hearing. Paul Laird signed on behalf of multiple entities. The trial court denied Appellant due

process when his motion to vacate was denied without an evidentiary hearing:

Not only did Appellant raise the issue of a fraudulent assignment of mortgage, but

Appellee made false allegations in the complaint. Appellee falsely stated that it was the "holder"

of Rick Garrabrant's note, a note that it couldn't hold by operation of law because there was no

indorsement on the note. That reason alone is grounds for vacating the judgment and allowing

Appellant to conduct discovery. The lack of indorsement from The CIT Group/Consumer

Finance, Inc. prevented Appellant Rick Garrabrant's note from being negotiated to Appellee or

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anyone else. As the public became more aware of false documents being filed in foreclosure

cases, the Appellant hired counsel to review their case a motion to vacate the judgment was filed.

In addition to presenting a meritorious defense under Civil Rule 60(B), since the note attached to

the complaint was still payable to the original lender and not the Appellee, there was no

justiciable controversy between Appellee and Appellant, and thus no subject matter jurisdiction

for this particular foreclosure case, making the judgment void ab initio. The Second District

Court of Appeals in Countrywide Home Loans Servicing, L.P. v. Burden, 2011-Ohio-5949, . 8

recently stated that "A judgment entered by a court that proceeded without jurisdiction is void ab

initio. Dolla^ Savings & Trust Co. v. Trocheck (1999), 132 Ohio App.3d 531, 535, and is a legal

nullity for all purposes. Hayes v. Kentucky Joint Stock Land Bank of Lexington (1932), 125 Ohio

St. 359."

"Ohio courts, in construing the notice provisions of Civ.R. 55(A), have liberally

interpreted the term 'appeared." Rocha v. Salsbury, 2006-Ohio-2615 ,{ 20 citing Baines v.

Harwood (1993), 87 Ohio App.3d 345(a telephone call is sufficient to satisfy the appearance

requirement of Civ.R. 55). "While the term "appearance" is generally understood to'impl[y]

some sort of presentation or submission to the court in which the action is pending,' the term is

also reasonably construed to apply to informal correspondence between parties or the court as

well, as long as the purpose of the communication is to show an intent to defend the lawsuit,"

Rocha v. Salsbury, 2006-Ohio-2615 19 citing Holthaus Elevator, Inc. v. Siegel, 3d Dist. No.

17-03-18, 2004-Ohio-1050, citing Hyway Logistics Services, Inc. v. Ashc^aft, 3d Dist. No. 5-99-

40, 2000-Ohio-1620. Appellant Rick Garrabrant appeared in this case when he timely filed a

motion to dismiss on August 9, 2010.

13

"If the party against whom judgment by default is sought has appeared in the action, he

(or, if appearing by representative, his representative) shall be served with written notice of the

applacation for judgment at least seven days prior to the hearing on such application." Civ.R.

55(A). The failure to provide the required notice prevents this court form having personal

jurisdiction over the Defendant and renders the judgment of foreclosure void ab initio. On

December 6, 20i0 the Court received a letter that the notice of the default hearing addressed to

Appellant Rick Garrabrant was "inadvertently received and opened by mistake." Based on this

docket entry the trial court erred and Fifth District Court of Appeals erred when determining that

Appellant had received notice. In the trial court decision the court made the specific finding that

notice was mailed to Appellant on November 19, 2010. (Trial Court decision, page 4). However,

the docket entry on December 6, 2010 appears to state that the notice was received by someone

else who then mailed it back to the court. The lack of notice to Appellant Rick Garrabrant of the

time and date of the default judgment hearing was grounds to vacate the judgment.

Appellant also raised a meritorious defense to foreclosure by demonstrating that Appellee

was not the holder of the note when the complaint was filed and the subsequent suspicious

documents filed with the Court should have been examined at a hearing on Appellant's motion to

vacate. Since the Plaintiff falsely alleged it was the holder or the note and the note attached to the

complaint did not have an indorsement. This false allegation also appeared in the motion to

substitute plaintiff. Since the note attached to the complaint was not indorsed then it was not

possible for there to be an allonge to substitute plaintiff. The trial court abused its discretion by

denying Appellant's 60(B) motion without a hearing.

When reversing summary judgment granted to a bank in a case where the defendant did

not file a response, the Court stated:

14

"A failure t respond to a motion for summary judgment does not, byztself, warrant that the motion be.granted. Mora^is v: Ohio Casualty

Insu^ance Co, (1988), 35 Ohio St,3d 45, 47. Even where thenonmovant compietely fails to respond to the summary judgment motion, `the trial court's analysis should focus on whether the movant hassatisfied its initial burden of showing that reasonable minds couldonly conclude the case should be decided against the nonmoving party."

Wachovia Bank of Delawa^e, N.A. v. Jackson, 2011-Ohio-3203, 13.

By the same logic that was used to come to a decision in Wachovia Bank ofDelawaNe,

N.A. v. Jackson, 2011-Ohio-3203 a court is required to examine the documents set before it and

verify that the exhibits attached to the complaint support a claim and when a 60(B) motion to

vacate alerts the court to defects in the documents used to fraudulently procure a judgment the

Court abuses its discretion when ruling on a motion to vacate without first holding a hearing.

CONCLUSION

In order to invoke the Court's jurisdiction the Ohio Constitution requires a justiciable

controversy which was lacking in Appellant Rick Garrabrant's case. Appellant Rick Garrabrant

requests that the Supreme Court of Ohio accept jurisdiction over this case and vacate the

judgment of foreclosure.

Respectful y submitted,

DA BE RUK & HARSI^MAN, LLC

^i ^ ^-^

Marc . Dann (0039425) (Counsel of Record)Grace Doberdruk (0085547)Counsel for Appellant Rick Garrabrant

CERTIFICATE OF SERVICE

I hereby certify that on November ^^012 a copy of the foregoing document asserved by ordinary U.S. mail upon the following: Amy Carr S PIRO, VAN ESS, PHILLIPS& BARRAGATE, LLP 48051VIontgomery Road, Suite 32 , N rwood, OH 45 12.

MA E. DANN (0039425)

15

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Ct^URT OF APPEALSDELAWARE, COUNTY, OHIO

FlFTH APP.ELlATE DlSTRlCT

LSF6 tttIERCURY REO INVESTMENTS JUD^ES:Hon. iN. Scott Gwir^, P.J.

Plaintiff-Appellee r^ Hon. William B. Hoffman, J.Hon. Sheila G. Farmer, J.

-vs- ^^^ Case No: 11 CAE0^0037

R1CK 1,. GARRABRANT

Defendant-Appellant 0 P 1 N I O N

CHARACTER OF PROCEEDING: Appeal #rom the Delaware County Court ofCommon ,Pleas, Case No. Q9CVE1217^0

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. . , . . . . }' a ' ^ .. . :^ .- ^ . . ^r.Pp

. . . ^ . . ' ^ ^ 4.^Y ^ .

JUDGMENT: .e ^ . Dismissed ^ ^ ,-^^, p ^ -t...^' ^ ^ .

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DATE OF JUDGMENT^,ENTRY: ^ r^n^ i" ^^^r`'-,'^

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APPEARANCES: ^ ^ ^^ . ' ... `.c^

For Plaintiff-Appellee . For Defendant-Appellant

AMY CARR JOHN SHERROD. 4805 Montgomery Road, Ste. 320 2130 Arlington Avenue

Cincinnati, Ohio 45212 Columbus, Ohio 43221 a

_ _ _ _ . ---,

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a. Delaware County, Case Na. 11CAE04003r ^

Hc^ffman, J:

{1} qefendant-appellant Rick Garrabrant appea{s the April 15, 2011 Judgment

Entry entered by the De{aware County Court of Common Pleas, which denied his Civ.

^ R. 60{S) rnotion far relief from judgment. _ Piaintiff-appellee is LSF6 IVlercury Reo

Investments.

^ STATEMENT QF THE CASE1

{^2} t^n December 9, ^009, Appellee fiileci a Complaint far Forecrasure against

Appeliant. Appeilant was personally served on or about December 23, 2009. AppeNant

filed a Motion for E^ctension of Time to Answer or Othervuise F'lead in t7rder ta Mediate

with the Plaintiff/Lender, which the trial court granted. The court-appainted mediator

filed a report Qn July 21, 201a, advising the trial court the mediation had been

unsuccessful. The ti'ial court issued a scheduling entry, instructing Appellant to file his

Answer no later than August 9, 2010. Rather than file his Answer on the assigned date, ^

Appellant ^filed a motion to dismiss, which the trial caurt denied on ,4ctober 2^, 2010.

Appellant never filed an Answver in this matter.

{3} Un November 17, 2010, Appelle,e filed a rnation for default ludgment. T'he

triaM caurt scheduled an oral hearing on the motion before the magistrate on December

1G, ^010. Appefiant faiied to appear at the hearing. The magistrate frPed her decisian

granting default judgment in favor of`Appellee an December 17, 2010. 7he trial court

approved and adopted the magistrate's decision on the same day, The tria! court

issued a Final Judgment Entry on Deaember 21, 2'l0. Appellant did nat file an appeal

fram this judgment entry. ,

' A Statement of the Facts is not necessary for our disposition of this Appeal. ,

^, 3

e

2 ^ .

D^laware County, Case No. 11 CAE040p37 3

{4} .A Sheriff s Sale was canducted on February 1^; 201.1, and the property

i was sald for $116,580. The trial court confirmed the sale and ardered distribution via

Judgment Erytry filed March 10, 2011.

{5} On April 4, 2011, Appellant filed a Motion for F^elief from Judgment

Pursuant to Civ. R. 60(B}, alleging, as his meritoriou`s defensd, Appellee's laek af

standing. The trial court denied the mation via Judgment Entry filed April 15, 2011.

Appellant filed a tirnely Notice of Appeal to this Court.

{g} The appea[ was stayed upon Appef'iant's fiiing a pefifion in bankruptcy.

Via Order fifed April 19, 2Q1 Z, this Court reinstated the case ta the active docket.

{^j7} It is from the April 1b, 2{?11 Judgment Er^try Appeilant appeals, assigning

as error:

{8} "!. THE TRIAL C4UR.T ERRED iN GRANTI,NG APPELLE'S MC}TION

FC^R CIEFAULT JUDGMENT BECAtJSE APPELLANT HAD `APPEARED' tN TFIE

ACTIt^N 1N ACCQRDANCE WITH CIV'.R. 55.

{9} "II. THE TRIAL COURT ERRED IN DENYING APPELLANT'S MOT1C N

Ft^R RELIEF FROM JUDGM:ENT PURSUANT TO CIV.R. 60(B}.'

I I

{10} For ease of discussion, we shall begin by addressing Appeflant's second

assignment of errar first.

{11} The decisian to grant ar deny a motian far relief from judgment pursuant tc^

Civ.R. 60(B} lies in the sound discretian af the trial caurt and will not be disturbed

absent an abuse af the discretion. Sfrack v, Pe/ton (1994}, 70 4hio St.3d 172. An abuse

of discretion is more than an errar af judgment; it means that the trial caurt was

^ ^,^ ;,^ I^ ^

^ D^laware Countj^, Case No. 11CAE040937 ^' ^

unreasc^nabie, arbitra,ry, ar unconscianabte in 'tts ruGng. B/akemore v. Blakemore ('1983},

5^hio St.3d 217. An abuse af discretic^n demanstrates "penrersity af will, passion,

prejudice, partia9ity, ar moral delinquency.' Ports v. Ohio Sfate Nled. Btf. (1993), 66 Ohio

St.3d 619. When applying the abuse of dis^retion standard, this Court may not

substitute its judgment for that of the trial court. ld.

{^[^12} Civ.R: 60(B) states, in relevant part; ^`

"C?n motian and upan sucii terms as are just, the court may relieve

a party ar his legal representative fram a final judgment, order ar

praceeding for the fo(Epwing reasans: (1) mistake, inaduertence, surprise

or excusable neglect; {^) newly discovered evidence which by due

diligence could not have been discavered in time to move for a new trial

under Rule 59(B); (3) fraud (whether heretafore denominated intrinsic ar

e^ctrinsic), misrepresentatian ar other misconduct of an adverse party; {^)

the judgment has been satisfied, released or discharged, or a prior

judgment upon +nrhich it is based has been reversed or otherwise vacated,

or it is no langer equitable that the judgment shauld have praspective

application; or (5^ any ather reason justifying relief^from the judgment. The

motion shall be made within a reasonable time, and for reasons (1), (2}

and (3} not more than ane year after the judgment, arder or praceeding

^ras entered ar taken.19

{13^ A party seeking relief fram a default judgment pursuant ta Civ.R. 80(B}

must show (1) the existence of a meritorious defense, (2} entitlement to relief under one

of the graunds set forth in the rufe, and (3) that th^ mation is timePy filed, See GTE

^ ^,,^ ^ . ^ ^

^ Delaware County, Case t^To. 11 CAEq40037 5

Automatic Eledtric, lnc. ^r. ARC lndcrstries, Inc. (1978), 47 C}hio St.2d 146, 351 h1.E.2d

'113; Blasco v. Mislik (1982)> 69 t7hio St.2d 684, 433 N.E:2d 612. '

{14} The December 21, 2010 Final Judgment Entry constituted a final decision

on the merits. AppeNant's remedy was to appeal that decision. Appellant did nat da so.

Rather, Appellant subsequently filed a Civ. R. 60{B) motian for relief from ]udgment.

{15} Civ.R: BO(B} was intended to provide relief from a finai judgment in

specific, enumerated situations and cannot be used as a substitute for a direct, tirnely

^pp^al. See Doe v. Trumbull County Children Services Board (1986}, 28 Ohio St.3d

128, 502 M.E.2d 505, at paragraph two af the syllabus: "If a party raises the same

question in a Civ.R. 6D(B} motion as [it] could have raised on a direct appeal, [that party]

could get an indirect extensian of time for appea! by appealing the denial of the Civ.R.

60(B) motion. 1Vewe11 v. White, Pickaway App. No. 05CA2?, 2006-(Jhio-637, at 15,

citing Parke-Chapley Construction Co. v. Cherrington (C.A.7, 1989}, 865 F:2d 907, 915.

Thus, "[w]hen a Civ.R. 60(B) motion is used as a substitute for a timely appeal, and

when the denial c?f that rnotion is subsequently appealed, the proper response is the

dismissal of the appeal.' Garrett v: Gortz, Cuyahoqa App. No. 90625, 2008-Ohio^-^4369,

at'^ 1^, citing Stafe ex rel. Richard v. Cuyahoga Cty. Commrs., 89 Ohio St.3d 205, 729

^I.E.2d 755, 2000-ahio-135. See, also, E7liott v. 5mead Mfg. Co., Flocking App. Nos

CI8CA13 & 08AP13, 2009-Ohio-3754, at 12-13.

{^i6} Adeordingly, we reject Appellant's second assignment of error and rlismiss

his a.ppeal.

,.,,,a ' W ^ . . ^ . . . .^ . ..

a< .elauvare Cc^unty, Case No. 11 GAE04Q037 , 6

! -

{^17} In fight c^f e^ur dispasition bf Appellants second assignment of error, we

need not address Appellant's first assignm^nt ef errar.

By: Hoffman, J. ,

Gwin, P.J. and

Farmer, J. cencur ` sr

HON. WILLIAM . HOF '

^

. H N. W. SCOTT GWIN^

^ ^ FiC}N. SHEI G. FARMER

rl $ ^`^ .- . . , .. ' ^

:^.d . . ^ . . .

- - ^IN THE C(7URT OF APPEALS FOR DELAWARE COUNTY, C?HIO

^ ^ - FfFTH APPELLATE piSTR)CT ^

LSF6 MERCURY REO INVESTMENT^ : ^^. ^^'"s

Pla^ntiff-Appellee : `

-^s- - n JUDGME^lT ENTRY

R1CK L. GARRABRANT :

Deferldant-Appellant . Case Na. 11 CAE040037,

Far the reasan stated in aur aceampanying Clpinion, this appeal is ord^red

dismissed. Costs to Appeilant. ,

^

^. ^

ON. WILLIAM . H FF

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H N. W. SC TT GWIN

HUN. SHEI . FARMER

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