[Cite as A.W.R. v. S.L.R.,
2026-Ohio-3111.]
COURT OF APPEALS OF OHIO
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
A.W.R., :
Plaintiff-Appellant, :
Nos. 114275 and 114321
v. :
S.L.R., ET AL., :
Defendant-Appellee. :
JOURNAL ENTRY AND OPINION
JUDGMENT: AFFIRMED IN PART, REVERSED IN
PART AND REMANDED
RELEASED AND JOURNALIZED:
Civil Appeal from the Cuyahoga County Court of Common Pleas
Domestic Relations Division
Case No. DR-19-379000
Appearances:
Rosenthal │ Lane, L.L.C. and James L. Lane, for appellee.
McCarthy, Lebit, Crystal & Liffman Co., LPA, David
Cuppage and Lauren K. Mayell, for appellant L.C.R.
Scot Stevenson, J.:
Appellant-Plaintiff A.R. and Appellant-Third-Party Defendant L.R.
separately appeal the judgment of the Cuyahoga County Court of Common Pleas,
Domestic Relations Division, granting Plaintiff-Appellee A.R. and DefendantAppellee S.R. a divorce. We affirm in part and reverse in part and remand for
further proceedings consistent with this decision.
I.
A.R. and S.R. were married in May 2005. L.R. is A.R.’s mother.
On July 2, 2007, A.R. and S.R. purchased real estate in Rocky River,
Ohio to be utilized as their marital home (“Marital Home”). On or about
September 17, 2007, A.R. and S.R. executed a promissory note in the principal
amount of $363,895.50 payable to A.R.’s father. To secure payment of the note,
A.R. and S.R. executed a mortgage deed on the Marital Home in favor of A.R.’s
father. In an undated allonge, A.R.’s father made the note payable to himself as
the trustee of a revocable trust. A.R.’s father also assigned all his rights, title, and
interest in the mortgage to the revocable trust. In a second undated allonge, A.R.’s
father, as trustee of the revocable trust, made the note payable to L.R. In a
document dated May 31, 2021, A.R.’s father, as trustee of the revocable trust,
assigned all its rights, title, and interest in the mortgage to L.R. The mortgage was
recorded in the Cuyahoga County Recorder’s office on April 7, 2021.
A.R. filed a divorce complaint on October 28, 2019, initiating the
present matter. S.R. filed an answer and counterclaim for divorce on
November 15, 2019, and the matter proceeded through the pretrial process.
On July 6, 2020, S.R. recorded a Notice of Lis Pendens concerning
the divorce action.
On or about August 30, 2021, L.R. filed a complaint in foreclosure in
the Cuyahoga County Court of Common Pleas, General Division.
On May 10, 2022, A.R.’s legal counsel filed a motion to withdraw as
counsel claiming that the lower court had exhibited bias towards counsel. In a
May 18, 2022, order, the then-trial judge found the allegations were
unsubstantiated. However, the originally assigned judge recused herself, stating
that she did so to avoid any appearance of impropriety. That judge then ordered
the matter be transferred to the administrative judge. It is undisputed that Judge
Leslie Ann Celebrezze was the administrative judge at the time of the order. The
order also confirmed that the matter would proceed to trial as previously
scheduled. No party opposed the May 18, 2022, order.
On July 6, 2022, S.R. issued a subpoena to L.R. commanding her to
appear and testify as a witness at the trial commencing July 11, 2022. On July 11,
2022, L.R.’s legal counsel entered a notice of appearance and filed a motion for a
protective order and to quash the subpoena. Although the trial court did not rule
on L.R.’s motion, L.R. did not appear for trial.
On July 10, 2022, A.R. filed a notice of voluntary dismissal of his
complaint. It appears from a review of the trial transcript that pretrial
proceedings occurred on July 11, 2022. However, no transcript of those
proceedings was made a part of the record.
The matter proceeded to trial on July 12, 2022. Before the trial
commenced, S.R. moved to appoint a receiver to effectuate the sale of a Marital business, expressly requesting the Court appoint Mark Dottore, President and
CEO of Dottore Companies as the Receiver in this matter. When the trial
commenced, the court heard opening statements and the first part of S.R.’s
testimony on her own behalf. The trial was adjourned before S.R. completed her
testimony on direct examination.
On July 13, 2022, the trial court issued a Judgment Entry
appointing the receiver (“the Receiver”) S.R. requested in her motion to effectuate
the sale of the marital business and to protect and preserve the Marital Home.
On July 13, 2022, the trial court also issued an Agreed Judgment
Entry regarding Guardian ad Litem (“GAL”) fees both A.R. and S.R. owed in the
matter. On July 25, 2022, the Clerk of the Common Pleas Court of Cuyahoga
County, Ohio, filed two certificates of judgment lien in favor of the GAL against
A.R. and S.R separately.
When the trial resumed on July 13, 2022, and before S.R. retook the
witness stand, A.R.’s trial counsel requested to address the trial court concerning
the order appointing the Receiver. A.R.’s counsel thereafter informed the trial
court that he intended to immediately appeal the appointment and requested the
trial court grant a stay upon the filing of that appeal. The trial court advised A.R.
that although he was within his right to file an appeal of the order of appointment,
such an appeal would not divest the trial court of jurisdiction to proceed with the
underlying matter and that the court intended to continue with trial. Upon
receiving the trial court’s advisement of the intention to proceed, A.R.’s counsel informed the trial court that he was leaving the courtroom. The transcript reflects
that both trial counsel and A.R. left the courtroom.
After A.R. and his trial counsel left, S.R.’s trial counsel called her
back to the witness stand and continued his direct examination. Upon completion
of S.R.’s testimony on direct, S.R. rested her case. The trial court requested
closing arguments be submitted in writing. S.R. filed her closing arguments on
August 15, 2022. A.R. did not file a written closing argument.
Despite A.R.’s trial counsel’s statement that he intended to file an
immediate appeal of the order appointing the Receiver, A.R. never filed such a
notice. Instead, on August 18, 2022, A.R. filed a notice of filing petition in
bankruptcy, chapter 13, automatically staying the matter pending resolution of
the bankruptcy case.
On June 6, 2023, the Receiver filed an application for authority to
employ a realtor to sell the marital home. No party opposed the Receiver’s
application. Although no relief from the automatic stay is apparent in the record,
the trial court granted the application that same day.
On June 23, 2023, L.R. filed a combined motion to intervene and
motion requesting the trial court deposit the proceeds of the sale of the Marital
Home with the Cuyahoga County Court of Common Pleas, General Division. On
June 27, 2023, the trial court granted L.R.’s motion to intervene but did not rule
on the motion to deposit the proceeds of the sale with Cuyahoga County Court of
Common Pleas, General Division.
On June 28, 2023, the Receiver filed a motion/application for
authority to sell real property free and clear of liens, encumbrances, and interests
with said liens, encumbrances, and interests to attach to the proceeds of the sale
(“Motion to Sell”). The motion/application included a notice of deadline for filing
objections. The preliminary judicial report attached to the Motion to Sell included
the mortgage discussed above and notes that no memorandum of trust was filed
for the revocable trust. The preliminary judicial report also included a traditional
mortgage and an open mortgage recorded before L.R.’s mortgage and the GAL’s
two judgment liens recorded after L.R.’s mortgage.
On July 6, 2023, L.R. filed a response to the Receiver’s Motion to
Sell, wherein L.R. expressly stated that she “does not object to the application to
sell property but objects to the attachment of said liens to the proceeds of the sale.”
In her response, L.R. noted that the property the Receiver requested to sell was
the subject of a pending foreclosure action and, relying on R.C. 2329.44, asserted
that if “there is a dispute as to the validity of amounts of the liens, the Foreclosure
Court must determine the validity and amounts owed and determine whether
there exits any excess proceeds.” L.R. did not request an evidentiary hearing in
her motion.
In a July 6, 2023, judgment entry (“Judgment Entry of Sale”), the
trial court granted the Receiver’s Motion to Sell. In granting the motion, the trial
court indicated it had reviewed the motion, purchase agreement, the preliminary
judicial report, and considered the representations made therein and other statements of parties with respect to the proposed sale. The trial court found it
had jurisdiction to hear and determine the sale motion and authority to approve
a sale of the property free and clear of all encumbrances and interests, and to
transfer the encumbrances and interests to the proceeds derived from the sale.
The trial court then ordered the encumbrances and interests be divested from the
property and transferred to the sale proceeds “in the same priority and to the same
extent they are found to be valid, enforceable, and unavoidable.”
In the Judgment Entry of Sale, the trial court also ordered that
“[t]he balances of the first and second mortgages, as well as the liens held by [the
guardian ad litem appointed in the case] be satisfied out of the Sale Proceeds.”
The trial court further ordered that “[n]o part of the Sale Proceeds remaining after
the payments authorized by this Order shall be disbursed without further order
of this Court.” No party timely appealed the Judgment Entry of Sale.
On July 19, 2023, S.R. filed a Brief in Opposition to [L.R.]’s Motion
to Deposit Funds in the Foreclosure Action. The next day, L.R. filed a Reply in
Support.
On August 2, 2023, A.R.’s trial counsel moved to withdraw, which
was granted that next day. A.R.’s former trial counsel then moved to intervene on
September 7, 2023, which was denied by the trial court on September 13, 2023.
A.R.’s former trial counsel appealed the denial of his motion and the underlying
matter was stayed pending that appeal. See Rennell v. Rennell, 2024-Ohio-2454
(8th Dist.). The Eight District Court of Appeals affirmed on June 27, 2024. Id.
On September 7, 2023, S.R. filed a Notice of Dismissal of
Bankruptcy Case indicating that A.R.’s bankruptcy case had been dismissed on
August 29, 2023.
On August 15, 2024, the trial court issued a Judgment Entry
granting A.R. and S.R. a divorce (“Judgment Entry of Divorce”). Relevant to
L.R.’s appeal, the trial court ordered that the proceeds from the sale of the Marital
Home be divided equally between A.R. and S.R. after the first mortgage had been
satisfied and that the debts owed to [L.R.] be deemed the sole and separate
obligation of [A.R.].
A.R. timely appealed the Judgment Entry of Divorce, raising one
assignment of error for our review. L.R. filed a separate appeal of the Judgment
Entry of Divorce, raising two assignments of error for our review. Pending
resolution of L.R.’s appeal, the trial court issued a limited stay “regarding
distribution of equity” from the sale of the Marital Home. To facilitate our review,
we elect to consider L.R.’s second assignment of error before her first assignment
of error.
II.
A.R.’S ASSIGNMENT OF ERROR ONE
JUDGE CELEBREZZE LACKED AUTHORITY TO ISSUE THE
AUGUST 15, 2024 JUDGMENT ENTRY (1) BECAUSE SHE
WAS NOT RANDOMLY ASSIGNED TO THE CASE AS
REQUIRED BY THE RULES OF SUPERINTENDENCE AND
LOCAL RULES; (2) BECAUSE SHE HAD BEEN PREVIOUSLY
DISQUALIFIED BY THE CHIEF JUSTICE OF THE SUPREME
COURT OF OHIO FROM HANDLING CASES THAT WERE
NOT RANDOMLY ASSIGNED TO HER; AND (3) BECAUSE
JUDGE CELEBREZZE’S OWN CONDUCT AND THE
INDEPENDENT CHARGES LEVIED AGAINST HER BY OHIO
DISCIPLINARY COUNSEL DEMONSTRATE A PATTERN OF
INAPPROPRIATE BEHAVIOR AND CORRUPTION AND,
THEREFORE, HER PRIOR DECISIONS IN THIS CASE
INCLUDING HER AUGUST 15, 2024 JUDGMENT ENTRY
SHOULD BE VACATED.
In his sole assignment of error, A.R. contends the trial court lacked
authority to issue the Judgment Entry of Divorce because, as he asserts, (1) the
matter was not randomly assigned to the trial judge in violation of Sup.R. 36.019,
(2) the Supreme Court of Ohio disqualified the trial judge in an unrelated case
where that matter was not randomly assigned to her, and (3) an Ohio Disciplinary
Counsel’s complaint against the trial judge “demonstrate[s] a pattern of
inappropriate behavior and corruption.” Within the body of his argument
addressing his third assertion, A.R. also appears to contend that the trial court
engaged in judicial misconduct by appointing the specific receiver in this case.
Upon review, we find no merit in A.R.’s assignment of error.
As an initial matter, we must address the exhibits A.R. attached to
his appellate brief because several of those exhibits include documents outside
the record of appeal. “In reviewing an appellant’s claims of error, an appellate
court is limited to the facts and evidence set forth in the record of appeal and
cannot consider facts outside that record.” Nunn v. Mitchell, 2024-Ohio-4586,
¶ 15 (8th Dist.), citing In re Q.S., 2023-Ohio-712, ¶ 105 (8th Dist.), citing App.R.
9; App.R. 12(A)(1)(b); In re K.K., 2021-Ohio-3338, ¶ 16, fn. 3 (4th Dist.) (“It is simply not permissible on direct appeal to consider matters outside of the
record.”); Morgan v. Eads, 2004-Ohio-6110, ¶ 13 (“[A] bedrock principle of
appellate practice in Ohio is that an appeals court is limited to the record of the
proceedings.”); Herron v. Herron, 2021-Ohio-2223, ¶ 19 (9th Dist.) (“‘Matters
outside the record cannot be used to demonstrate error.’”), quoting In re J.C.,
2010-Ohio-637, ¶ 15 (9th Dist.). Accordingly, to the extent the documents
attached to A.R.’s appellate brief are not a part of the record of appeal, we will not
consider them in our review.
On appeal, A.R. first claims the trial judge did not have authority to
issue the Judgment Entry of Divorce because the record is devoid of an entry
showing the case was randomly reassigned to her in accordance with Ohio Rule
of Superintendence 36.019(A) (renumbered as Sup.R. 5.19 effective July 1, 2026).
At the time of the trial court proceedings, that rule stated that “[f]ollowing the
recusal of a judge in a multi-judge court or division, the administrative judge shall
randomly assign the case among the remaining judges of the court or division who
are able to hear the case.” Sup.R. 36.019(A).
A.R.’s reliance on the rule is misplaced. The Rules of
Superintendence do not have the same force of a statute or case law and
“noncompliance with the rules is generally not grounds for reversal.” Bradley v.
Bradley, 2021-Ohio-2514, ¶ 40 (8th Dist.), quoting State v. Henderson, 2018-Ohio-5124, ¶ 70 (7th Dist.). This is because “[t]he Rules of Superintendence are
only general guidelines for the conduct of courts and do not create substantive rights in individuals or procedural law.” (Internal quotations omitted.) Bradley
at ¶ 40.
Regarding A.R.’s additional assertions on appeal - that the Supreme
Court of Ohio disqualified the trial judge in an unrelated matter and that the Ohio
Disciplinary Counsel filed a complaint against the trial judge - the Ohio
Constitution, Article IV, Section 5(C) “vests exclusive authority to pass on
disqualification matters in the chief justice or her designee.” State v. Osie, 2014-Ohio-2966, ¶ 62. “‘Since only the Chief Justice or [her] designee may hear
disqualification matters, [a] Court of Appeals [is] without authority to pass upon
disqualification or to void the judgment of the trial court upon that basis.’”
(Footnote omitted.) Id. at ¶ 63, quoting Beer v. Griffith, 54 Ohio St.2d 440, 444
(1978).
A review of the record shows that A.R. never objected to Judge
Celebrezze presiding over the case, never requested Judge Celebrezze recuse
herself, and never filed an affidavit of disqualification pursuant to R.C. 2701.03
on the basis that the matter was not randomly assigned to Judge Celebrezze.
Consequently, A.R. is barred from raising this issue. See Osie at ¶ 62-66.
“We note, however, that ‘[a]lleged due-process violations . . . may
be addressed on appeal.’” Bertalan v. Bertalan, 2025-Ohio-1443, ¶ 63 (8th Dist.),
quoting State v. Hunt (In re Thomakos), 2020-Ohio-6874, ¶ 4. On appeal, A.R.
contends that the trial court appointed the Receiver in this case without giving
A.R. meaningful opportunity to oppose S.R.’s motion. Nonetheless, “‘[i]t is well settled that an order appointing a receiver is a final, appealable order [because it]
affects a substantial right in a special proceeding.’” Perozeni v. Perozeni, 2023-Ohio-1140, ¶10 (8th Dist.), quoting Hummer v. Hummer, 2011-Ohio-3767, ¶ 7-8
(8th Dist.). Regardless of A.R.’s claim that he was not given a meaningful
opportunity to respond, A.R. did not appeal the judgment entry appointing the
Receiver.
Upon review, we conclude that the argument A.R. raises here could
have been raised on direct appeal. “Where a party fails to timely challenge the
appointment of a receiver, he is precluded from later challenging that
appointment or the authority granted to the receiver.” Hummer at ¶ 8 (8th Dist.).
A.R. has not shown that the trial court was without authority to
issue the Judgment Entry of Divorce. Additionally, because A.R. could have
raised his argument that the trial court appointed the Receiver without giving him
a meaningful opportunity to respond to S.R.’s motion in a direct appeal of
judgment entry appointing the Receiver, he is precluded from raising it here.
A.R.’s sole assignment of error is overruled.
L.R.’S ASSIGNMENT OF ERROR TWO
THE TRIAL COURT LACKED JURISDICTION OVER
MATTERS BROUGHT IN FORECLOSURES
Despite her stated assignment of error, L.R. specifically argues
withing the body of her argument that the trial court (1) lacked authority “to
dispose of [L.R.]’s interest in the Property” and (2) the trial court was required to deposit the proceeds from the sale “with the Foreclosure Court” because “[i]n the
event there is a dispute as to the validity or amount of the liens, the Foreclosure
Court must determine the validity and amounts owed and determine whether
there exists any proceeds. R.C. 2329.44.” However, because L.R. failed to appeal
the Judgement Entry of Sale, we are without jurisdiction to consider her
arguments.
“The jurisdiction of both the common pleas court and the domestic
relations division is defined by the General Assembly.” Herring v. Coleman,
2023-Ohio-3245, ¶ 10 (8th Dist.), citing Pula v. Pula-Branch, 2011-Ohio-2896,
¶ 6, citing Ohio Constitution Article IV, Sections 4(A) and (B). The jurisdiction of
the state domestic relations courts is governed by R.C. 2301.03 and differs by
county. Pursuant to R.C. 2301.03(L)(1), in “Cuyahoga County, the domestic
relations division has jurisdiction over all marriage-related cases, which limits the
ability of other common pleas judges to handle those cases.” Herring, 2023-Ohio-3245, at ¶ 10 (8th Dist.). Notably, in addition to having jurisdiction over all
marriage-related cases, “the legislature has allowed domestic relations judges in
Cuyahoga County to ‘“retain the same powers and jurisdiction * * * as other judges
of the court of common pleas.’” Id., quoting Pula, 2011-Ohio-2896 at ¶ 6, quoting
R.C. 2301.03(L)(1).
Under R.C. 3105.011(A), the domestic relations division of a court
of common pleas “has full equitable powers and jurisdiction appropriate to the
determination of all domestic relations matters.” In a divorce proceeding, the court is required to determine what constitutes marital property and separate
property and has jurisdiction over all property in which one or both spouses have
an interest. R.C. 3105.171(B). A trial court’s authority to appoint a receiver is
governed by Chapter 2735 of the Revised Code, and it is well settled “that ‘Chapter
2329 does not apply to receivership cases.’” Yidi, L.L.C. v. JHB Hotel, L.L.C.,
2016-Ohio-6955, ¶ 14, (8th Dist.), quoting Huntington Bank, L.L.C. v. Prospect
Park, L.L.C., 2012-Ohio-3261, ¶ 1 (8th Dist.).
In this case, L.R. did not object to the Receiver’s Motion to Sell the
Marital Home free and clear of liens. Rather, L.R. expressly consented to the
Receiver’s motion, but requested the trial court order the Receiver to deposit the
proceeds from the sale with the court presiding over L.R.’s complaint in
foreclosure. On appeal, L.R. concedes that “there is no doubt that the Receiver
ha[d] authority to sell the Property” and does not raise an argument that the trial
court lacked authority to grant the Receiver’s Motion to Sell. On appeal, L.R.’s
argument only concerns the trial court’s authority over the proceeds from the sale.
Specifically, she asserts that pursuant to R.C. 2329.44, when there is “a dispute as
to the validity or amounts of the liens, the Foreclosure Court must determine the
validity and amounts owed and determine whether there exist any excess
proceeds.”
However, R.C. 2329.44 provides the statutory procedure for the
distribution of excess funds remaining after the satisfaction of a writ of execution
in a foreclosure proceeding. The proceeds at issue in this case were the result of sale in a receivership case, not the result of a sale pursuant to execution against
property in a foreclosure case. Receivership cases are governed by Chapter 2735
of the Revised Code and not Chapter 2329. See Yidi, L.L.C. at ¶ 14, (8th Dist.),
quoting Huntington Bank, L.L.C., 2012-Ohio-3261, at ¶ 1 (8th Dist.) (it is well
settled “that ‘Chapter 2329 does not apply to receivership cases.’”).
In the context of a receivership case, a trial court’s order granting
an order of sale free and clear of liens is a final appealable order with respect to
the matters contained in the order. R.C. 2735.04(D)(2)(d). In its Judgment Entry
of Sale, the trial court expressly found that it had jurisdiction to (1) hear and
determine the sale motion and authority to approve a sale of the property free and
clear of all encumbrances and interests and (2) transfer the encumbrances and
interests to the proceeds derived from the sale. The trial court then ordered that
(1) the encumbrances and interests be divested from the property and transferred
to the sale proceeds “in the same priority and to the same extent they are found to
be valid, enforceable, and unavoidable[,]” (2) “[t]he balances of the first and
second mortgages, as well as the liens held by [the guardian ad litem appointed in
the case] be satisfied out of the Sale Proceeds[,]” and (3) “[n]o part of the Sale
Proceeds remaining after the payments authorized by this Order shall be
disbursed without further order of this Court. Finally, the trial court expressly
found there was no just reason for delay. See Civ.R. 54(B); but see R.C.
2735.04(D)(2)(d); Sullivan v. Anderson Twp., 2009-Ohio-1971, ¶ 8-13 (reasoning that where the General Assembly has expressly determined that an order is final
and appealable, the inclusion of Civ.R. 54(B) language is not necessary).
“Where an appeal is not timely perfected, ‘the reviewing court is
without jurisdiction to consider issues that should have been raised in the
appeal.’” Malaj v. Abeid, 2024-Ohio-2256, ¶ 30 (8th Dist.), quoting State ex rel.
Pendell v. Adams Cty. Bd. of Elections, 40 Ohio St.3d 58, 60 (1988). This Court’s
review is limited to the trial court’s Judgment Entry of Divorce filed August 15,
2024. Upon review, we conclude that the issues L.R. raises in her second
assignment of error could and should have been raised on appeal of the Judgment
Entry of Sale filed July 6, 2023.
Therefore, L.R.’s second assignment of error is overruled.
L.R.’S ASSIGNMENT OF ERROR ONE
THE TRIAL COURT COMMITTED REVERSIBLE ERROR IN
VIOLATION OF OHIO REV. CODE § 2735.04 BY FAILING TO
ORDER THE TRANSFER OF THE PROCEEDS OF THE SALE
OF REAL PROPERTY IN THE HANDS OF THE RECEIVER
WITH THE SAME PRIORITY AS THOSE LIENS
PREVIOUSLY ATTACHED TO THE REAL PROPERTY.
In her first assignment of error, L.R. contends the trial court erred
by failing to order the transfer of the proceeds of the sale of the Marital Home in
the same order of priority as those liens were previously attached to the Marital
Home prior to the sale. For the reasons that follow, we sustain L.R.’s assignment
of error.
Relevant to L.R.’s appeal, the trial court stated in its Judgment
Entry of Divorce:
The Court finds the parties owned a home located . . . [in] Rocky River,
Ohio. The marital home was sold during the pendency of this action.
The marital residence was subject to a mortgage held by Shellpoint
Bank and a line of credit from held by Key Bank. The Court finds, based
on the evidence and testimony, the line of credit from Key Bank was
used solely for business purposes and was paid for through the parties’
marital business, Resource Title.
[L.R.] recorded a mortgage deed on said property on April 7, 2021 in
the amount of $363,895.00 and a subsequent foreclosure action was
filed. The Court finds no prior attempts had been made to obtain
repayment on the alleged debt until the divorce proceeding was filed.
The Defendant testified she had no knowledge of the alleged debt owed
to Plaintiff’s mother. Plaintiff offered no rebuttal testimony or
evidence. The Court finds the debt was documented only with
paperwork prepared by Plaintiff’s family; no evidence or testimony was
presented that alleged loan was used for marital purposes ; no requests
were made on repayment until the divorce proceedings began, even
though the loan was allegedly made in 2009 and no documentation
regarding the receipt of money was provided by Plaintiff. Defendant
testified she was without knowledge as to the amount of money
received and that it would have to be repaid.
IT IS THEREFORE ORDERED, ADJUDGED, AND DECREED the
proceeds from the sale of the marital home shall be divided equally
among the parties after the first mortgage has been satisfied. The debts
owed to [L.R.] shall be deemed the sole and separate obligation of
[A.R.] and [S.R.] shall be held harmless on such.
On appeal, L.R. contends the trial court erred by concluding A.R.
and S.R.’s separate interests in the proceeds of the sale were superior to her lien.
In response, S.R. asserts that (1) L.R.’s argument is barred because she failed to
appeal the Judgment Entry of Sale approving the sale of the Marital Home free and clear of liens, (2) L.R.’s failure to appear at the trial and present evidence
regarding her superior lien constitutes an invited error, and (3) S.R.’s interest in
the property is superior to L.R.’s interest under the doctrine of lis pendens. A.R.
did not file a responsive brief. Upon review, we conclude that S.R.’s arguments
lack merit.
Concerning S.R.’s first assertion, a review of the Judgment Entry of
Sale shows the trial court did not address the priority between L.R.’s interest in
the property and the parties’ interest. Instead, the trial court ordered that “[t]he
balances of the first and second mortgages, as well as the liens held by [the
guardian ad litem appointed in the case] be satisfied out of the Sale Proceeds.”
The trial court then ordered that “[n]o part of the Sale Proceeds remaining after
the payments authorized by this Order shall be disbursed without further order
of this Court.” Thus, contrary to S.R.’s contention, the trial court made no
determination regarding the priority of interests between S.R. and L.R.
Consequently, L.R.’s failure to appeal the July 6, 2023 Judgment Entry of Sale
does not bar her from asserting that the trial court erred when it made that
determination in the August 15, 2024, Judgment Entry of Divorce.
As to S.R.’s second contention, the doctrine of invited error is
inapplicable. Under the invited-error doctrine, ‘a party will not be permitted to
take advantage of an error that he himself invited or induced the trial court to
make.’” O’Malley v. Laborers’ In’'l Union of N. Am. Loc. 860, 2024-Ohio-3103,
¶ 17 (8th Dist.), quoting State ex rel. Beaver v. Konteh, 83 Ohio St.3d 519, 521 (1998). “‘Invited error is a branch of the waiver doctrine that estops a party from
seeking to profit from an error that the party invited or induced.’” O’Malley at
¶ 17 (8th Dist.), quoting Koch v. Rist, 89 Ohio St.3d 250, 256 (2000). A review of
the record shows that L.R. was not a party to the case at the time of trial and that
the trial took place more than eleventh months before the Receiver filed his
Motion to Sell the Marital Home free and clear of liens.
In her third assertion, S.R. contends her interest in the Marital
Home was superior to L.R.’s mortgage because she caused a notice of lis pendens
to be filed with the Cuyahoga County Recorder before L.R. caused the mortgage
deed to be recorded.
However, the doctrine of lis pendens is inapplicable to the facts of
this of this case. “Under Ohio law, failure to record a mortgage does not make the
mortgage invalid or ineffective between the mortgagor and the mortgagee.” OC
Prop. Mgt., L.L.C. v. Gerner & Kearns Co., L.P.A., 2008-Ohio-4709, ¶ 17 (8th
Dist.). R.C. 5301.23(A) provides, in relevant part, “[a]ll properly executed
mortgages shall be recorded in the office of the county recorder of the county in
which the mortgaged premises are situated and shall take effect at the time they
are delivered to the recorder for record.” “[T]he ‘failure or success of recording
an instrument has no effect on its validity as between the parties to that
instrument.’” Acacia on the Green Condo. Assn., Inc. v. Jefferson, 2016-Ohio386, ¶ 21 (8th Dist.), quoting Bank One, N.A. v. Dillon, 2005-Ohio-1950, ¶ 9 (9th
Dist.).
Here, it is undisputed that although the mortgage deed at issue was
not recorded until April 2021, A.R. and S.R. executed the deed in September 2007.
Moreover, the doctrine of lis pendens is not a substantive right and does not create
a lien. Haber Polk Kabat, L.L.P. v. Condominiums at Stonebridge Owners’ Ass’n,
Inc., 2017-Ohio-8069, ¶ 16, fn.7 (8th Dist.), quoting Whitaker v. Paru Selvam,
LLC, 2015-Ohio-3166, ¶ 31 (2d Dist.), quoting Irwin Mtge. Corp. v. Dupee, 2012-Ohio-1594, ¶ 10 (12th Dist.). The doctrine of lis pendens, codified in R.C. 2703.26,
provides that “[w]hen a complaint is filed, the action is pending so as to charge a
third person with notice of its pendency. While pending, no interest can be
acquired by third persons in the subject of the action, as against the plaintiff’s
title.” “‘The purpose of the recording statutes is to put other lienholders on notice
and to prioritize the liens.’” Jefferson, 2016-Ohio-386, at ¶ 21 (8th Dist.), quoting
GMAC Mtge. Corp. v. McElroy, 2005-Ohio-2837, ¶ 16 (5th Dist.). As such, the
doctrine is inapplicable to the facts of this case.
Our rejection of S.R.’s arguments in response to L.R.’s first
assignment of error does not end our inquiry. The question of whether the trial
court erred when it determined the priority of the transferred liens from the sale
of the Marital Home to the proceeds in the hands of the receiver remains.
R.C. 2735.01(A) authorizes a trial court to appoint a receiver under
certain circumstances, including in an action between parties jointly owning
property when it is shown that property is in danger of being lost, removed, or
materially injured or in an action in which receivers have been appointed by usages of equity. R.C. 2735.01(A); see Jardine v. Jardine, 2022-Ohio-1754, ¶ 13
(8th Dist.), citing R.C. 2735.01(A)(1) and (7). “The use of a receiver to maintain
and administer marital property during the pendency of a divorce is such an
instance.” Jardine at ¶ 13 (8th Dist.), citing Lockard v. Lockard, 2008-Ohio-1577,
¶ 4 (7th Dist.).
“R.C. 2735.04 enables a trial court to exercise its sound judicial
discretion to limit or expand a receiver’s powers as it deems appropriate.”
Williams v. Schneider, 2018-Ohio-968, (8th Dist.) ¶ 76, citing State ex rel.
Celebrezze v. Gibbs, 60 Ohio St.3d 69, 74 (1991). “‘The primary purpose of a
receiver is to carry out the orders of the * * * court, which has the power “to
exercise its sound discretion to limit or expand a receiver’s powers as it deems
appropriate.”’” Carr v. Acacia Country Club Co., 2012-Ohio-4723, ¶ 29 (8th
Dist.), quoting Natl. City Bank v. Semco, Inc., 2009-Ohio-3319, ¶ 8 (3d Dist.),
quoting State ex rel. Celebrezze, 60 Ohio St.3d at 74.
Pursuant to R.C. 2735.04(D)(1)(a), a trial court may authorize a
receiver to sell property free and clear of liens subject to the approval and
supervision of the court. However, when a receiver sells real estate free and clear
of liens, upon the receiver’s recording of the deed from the receiver to the
purchaser, the liens on the real property are cancelled and thereafter transferred
to the proceeds of the sale in the hands of the receiver. R.C. 2735.04(D)(3)(b). A
sale free and clear does not preclude prior lienholders from recovery. Williams at
¶ 80.
In its Judgment Entry of Sale, the trial court ordered that upon the
sale of the Marital Home, the encumbrances and interests be divested from the
property and transferred to the sale proceeds “in the same priority and to the same
extent they are found to be valid, enforceable, and unavoidable.” The preliminary
judicial report attached to the Receiver’s Motion to Sell included L.R.’s mortgage,
a traditional mortgage, an open-mortgage, and the GAL’s two judgment liens.
Although the trial court addressed the traditional mortgage, the open-end
mortgage, and the GAL’s liens, it made no determination about L.R.’s mortgage.
Next, a review of the Judgment Entry of Divorce shows that the trial
court did not find that L.R.’s mortgage deed was invalid, unenforceable, or void.
Instead, the trial court ordered that the debt was the sole and separate obligation
of A.R. However, because the proceeds in the hands of the Receiver are the result
of a sale pursuant to R.C. 2735.04(D)(3)(b), L.R.’s mortgage lien was transferred
by operation of law and L.R. had a vested interest in the remaining proceeds. It
is unclear from the trial court’s Judgment Entry of Divorce whether the trial court
found that L.R.’s mortgage was (1) invalid, unenforceable, or void, (2) invalid,
unenforceable, or void as to S.R. only, or (3) valid and enforceable but junior to
S.R. and A.R.’s equitable interest in the property. Because the trial court’s
determination on this issue is necessary for our review, we conclude that this
matter must be remanded for the trial court to make that determination in the
first instance.
L.R.’s second assignment of error is sustained.
III.
A.R.’s sole assignment of error and L.R.’s second assignment of
error are overruled. L.R.’s second assignment of error is sustained. The judgment
of the Cuyahoga County Court of Common Pleas, Domestic Relations Division is
affirmed in part, reversed in part, and remanded.
We note that A.R. did not appeal the trial court’s division of the
parties’ marital debt. As such, our holding on L.R.’s first assignment of error
should not be read as a determination that the trial court erred with regard to that
division.
Finally, counsel for Appellant L.R. filed a Notice of Suggestion of
Death. Upon remand, the trial court may take any action necessary to appoint a
personal representative. App.R. 29(A); Civ.R. 25.
Judgment affirmed in part, reversed in part and remanded.
SCOT ALLAN STEVENSON, PRESIDING JUDGE
TERRI JAMISON, J., and
MICHAEL C. MENTEL, J., CONCUR
(Sitting by assignment: Scot A. Stevenson, P.J., of the Ninth District Court of Appeals and Terri Jamison, J., and Michael C. Mentel, J., of the Tenth District Court of Appeals.)