State ex rel. Midwest Pride IV, Inc., v. Pontious - Ohio Supreme Court Opinion - Ohio Supreme Court Decision

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The State ex rel. Midwest Pride IV, Inc., Appellant, v. Pontious, Judge, Appellee.
[Cite as State ex rel. Midwest Pride IV, Inc., v. Pontious (1996), _____Ohio St.3d
_____.]
Mandamus to compel common pleas court judge to vacate his order
setting aside sheriff's sale of real property successfully bid on by
relator -- Complaint dismissed, when.
(No. 95-1297 -- Submitted April 15, 1996 -- Decided June 5, 1996.)
Appeal
from the Court of Appeals for Fayette County, No. CA94-09-008.

According to its complaint, Midwest Pride IV, Inc. ("M.P."), appellant, was
the successful bidder for real property at a sheriff's sale in Fayette County.
Fayette County Common Pleas Judge Victor D. Pontious, Jr., appellee, ordered the
sheriff's sale in Jean Palmer, Treasurer of Fayette County v. Bobby Ward et al.,
case No. CIV930138, due to Bobby and Betty Ward's failure to pay delinquent
real estate taxes. The other defendants in the foreclosure action were Roger's
Roadside Inns of America, Inc., a mortgagee, and Ohio Motor Inns, Inc., which
did not pursue any claim in the premises.

Prior to the sheriff's sale, three different appraisers estimated the value of
the property at $50,000 pursuant to R.C. 2329.17. Notice of the sale was
published pursuant to R.C. 2329.26 and 2329.27. M.P. bid $65,000, or more than

two-thirds of the appraised value of the property that R.C. 2329.20 requires for a
sale. M.P. also secured its bid with a deposit of ten percent of the bid price, or
$6,500.

On August 2, 1994, before confirmation of the sale pursuant to R.C.
2329.31 (deed of property goes to purchaser if no irregularity in proceedings at
sheriff's sale), the Fayette County Treasurer moved to set the sale aside. The
treasurer represented, without evidentiary basis, that appraisals of the property had
been based on erroneous information, that this information had been announced at
the sale, and that the announcement had "stifled" the bidding process. M.P. was
not named a party in the underlying foreclosure proceeding, but it was served
notice of the treasurer's motion and the September 2, 1994 hearing date scheduled
for the motion. M.P. did not respond to the motion within fourteen days as
required by Rule 5.01 of the Rules of Practice of the Fayette County Common
Pleas Court.

On August 29, 1994, several days before the scheduled hearing, Judge
Pontious granted the treasurer's motion and set aside the sale, finding that
"statements made to the appraisers prior to the taking of bids may have prejudiced
the bidding." The judge granted the motion by an entry approved and filed by

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attorneys for the treasurer and Ward. The day after this filing, M.P. filed a motion
to intervene and a "proposed" complaint seeking confirmation of the sale. Judge
Pontious denied the motion to intervene by entry filed on October 19, 1994, noting
that M.P. had not timely responded to the set-aside motion.

On September 26, 1994, M.P. sought a writ of mandamus to compel Judge
Pontious to vacate the order setting aside the sale and to conduct a hearing on the
treasurer's motion. M.P. claimed it could prove the appraisers had not been
influenced by erroneous information and that erroneous information had not been
announced at the sale. Judge Pontious answered the complaint, admitting the
proceedings in the underlying foreclosure action, and later filed combined motions
for summary judgment, judgment on the pleadings, and dismissal. The Court of
Appeals for Fayette County granted the motion for dismissal, finding that M.P.
had no right to a hearing under R.C. 2329.31 and Ohio Savings Bank v. Ambrose
(1990), 56 Ohio St.3d 53, 563 N.E.2d 1388.

The cause is now before this court upon an appeal as of right.

Berkman, Gordon, Murray & DeVan, J. Michael Murray, Lorraine R.
Baumgardner and Jeremy A. Rosenbaum, for appellant.

John H. Wead, for appellee.

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Per Curiam. For a writ of mandamus to issue, the relator must possess a
clear legal right to the respondent's performance of a clear legal duty and have no
adequate remedy in the ordinary course of law. State ex rel. Scripps Howard
Broadcasting Co. v. Cuyahoga Cty. Court of Common Pleas (1995), 73 Ohio St.3d
19, 20, 652 N.E.2d 179, 181. The court of appeals dismissed this cause on the
grounds that M.P. could not establish its clear legal right to a hearing on the
motion to set aside the sheriff's sale or Judge Pontious's clear legal duty to
conduct such a hearing. For the reasons that follow, we affirm.

In authorizing the transfer of property upon confirmation of a sheriff's sale,
R.C. 2329.31 provides:

"Upon the return of any writ of execution for the satisfaction of which lands
and tenements have been sold, on careful examination of the proceedings of the
officer making the sale, if the court of common pleas finds that the sale was made,
in all respects, in conformity with sections 2329.01 to 2329.61, inclusive, of the
Revised Code, it shall direct the clerk of the common pleas court to make an entry
on the journal that the court is satisfied of the legality of such sale and that the
officer make to the purchaser a deed for the lands and tenements." (Emphasis
added.)

4

M.P. argues that the emphasized language confers a statutory right to a
hearing on the successful bidder at a sheriff's sale. We disagree. In Union Bank
Co. v. Brumbaugh (1982), 69 Ohio St.2d 202, 208, 23 O.O.3d 219, 223, 431
N.E.2d 1020, 1025, we recognized that "[t]here is no statutory dictate that a
hearing be held [after a sheriff's sale]." Thus, the court of appeals correctly
concluded that R.C. 2329.31 does not confer the clear legal right or clear legal
duty M.P. asserts.

M.P. also seems to assert a due process right to a hearing prior to
confirmation or vacation of a sheriff's sale. M.P. provides no authority or analysis
as to whether its successful bid was a property interest protected by the Fourteenth
Amendment to the United States Constitution. We, however, need not decide this
issue because M.P. received all that due process requires -- notice and an
opportunity for some kind of hearing prior to deprivation of a protected interest.
Mullane v. Cent. Hanover Bank & Trust Co. (1950), 339 U.S. 306, 70 S.Ct. 652,
94 L.Ed.865; Bd. of Regents of State Colleges v. Roth (1972), 408 U.S. 564, 92
S.Ct. 2701, 33 L.Ed.2d 548. M.P. admittedly received notice of the treasurer's
motion to set the sheriff's sale aside, but failed to respond within fourteen days as

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required by local rule. This opportunity was sufficient due process under the
circumstances, regardless of whether M.P. was entitled to it.

M.P. mainly relies on Reed v. Radigan (1884), 42 Ohio St. 292, as authority
for its right as the successful bidder or "purchaser" to participate in proceedings to
confirm or vacate a sheriff's sale. Reed, at 294, quoted the statement in Ohio Life
Ins. & Trust Co. v. Goodin (1860), 10 Ohio St. 557, 566, that "parties [to a
foreclosure action] -- the plaintiff, the defendant and the purchaser -- may be
heard" at the confirmation or vacation of a sheriff's sale, and these cases have
been cited to establish the successful bidder's "right" to be heard on the issue of
confirmation. See, e.g., Citizen's Loan & Savings Co. v. Stone (1965), 1 Ohio
App.2d 551, 553, 30 O.O.2d 584, 585, 206 N.E.2d 17, 19; Ohio Savings Bank v.
Ambrose (1990), 56 Ohio St.3d 53, 57, 563 N.E.2d 1388, 1391 (Herbert R. Brown,
J., dissenting). M.P. maintains that this "right" was acknowledged and left
undisturbed by Ambrose , supra. The court of appeals correctly disagreed.

Ambrose cited Reed for the premise that purchasers at a sheriff's sale
generally possess "some type of interest in the proceedings prior to confirmation."
Id. at 54, 563 N.E.2d at 1389. This interest, however, was not enough to give the
purchaser standing to appeal if the defendant-mortgagor later redeemed the

6

property and a court set the sale aside. Rather, we held that "purchasers have no
rights until the sale is confirmed." Id. at 55, 563 N.E.2d at 1389. We based this
holding on another observation in Reed -- that a purchaser has no vested rights in
property until confirmation of a sheriff's sale, and if confirmation is refused, "the
rights of the purchaser fall to the ground." Reed, 42 Ohio St. at 294. In effect, we
found that a purchaser's interest evaporated upon denial of confirmation, such that
the purchaser could not establish the "aggrieved" status necessary for standing.
Ambrose at 56, 563 N.E.2d at 1390, fn. 3. Thus, far from an absolute right to
participate in proceedings to vacate a sheriff's sale, Ambrose recognized only that,
absent confirmation, a purchaser had no actionable interest by virtue of the
successful bid alone.

M.P., however, insists that since Ambrose, courts have continued to
recognize the "right" of potential purchasers to participate in hearings prior to
vacation or confirmation. M.P. cites one relevant case -- Federal Home Loan
Mtge Corp. v. Slagle (Dec. 4, 1992), Lake App. Nos. 92-L-022 and 92-L-035,
unreported. In Slagle, two bidders each asserted that their bid had been accepted
by the deputy sheriff conducting the sale, and both bidders were permitted to
intervene, one of whom successfully moved to have the sale set aside. The Slagle

7

court followed Ambrose as to the unavailability of any appeal for the purchasers,
holding that this rule applied even though these purchasers had intervened and the
purchasers in Ambrose had not. The court later found a right to participate in the
confirmation proceedings that stemmed from Ambrose and Reed.
But
Slagle does not support M.P.'s right to a hearing under the facts alleged
here. The purchasers in Slagle were granted leave to intervene; M.P. was not.
Moreover, to read Slagle as recognizing a right to a hearing, irrespective of
intervention, elevates the purchaser's interest to a level Ambrose did not intend.
Again, in referring to the purchaser as having "some type of interest in the
proceedings prior to confirmation," Ambrose hardly declared the purchaser's
absolute right to be heard. Id. at 54, 563 N.E.2d at 1389. Moreover, Ambrose
affirmed the dismissal of an appeal from the vacation of a sheriff's sale on the
grounds that (1) the purchasers had "no interest in the property prior to
confirmation," id. at 55, 563 N.E.2d at 1390, and (2) "their failure to intervene as
parties divested them of their capacity to appeal the decision of the trial court," id.
at 54, 563 N.E.2d at 1389-1390. Thus, Ambrose is consistent with a finding that
the purchaser's ability to participate in confirmation proceedings as a party, for
any purpose, depends on the purchaser's intervention.

8

M.P.'s final argument on the issues of clear right and clear duty is
essentially that Judge Pontious erred or abused his discretion by setting aside the
sheriff's sale ex parte and without evidence of irregularities. M.P. complains that
the treasurer submitted no evidence with the set-aside motion and that only two of
at least three named defendants in the foreclosure action agreed to the entry setting
aside the sale.

Mandamus does not lie to control judicial discretion, R.C. 2731.03, or to
correct judgments manifesting an abuse of discretion. State ex rel. Keenan v.
Calabrese (1994), 69 Ohio St.3d 176, 180, 631 N.E.2d 119, 122. Moreover, the
allegations in M.P.'s complaint, as well as the incorporated exhibits,1 do not
establish an abuse of discretion.

The record before Judge Pontious contained the agreed entry of the treasurer
and Ward that irregularities had occurred in the sheriff's sale and had "prejudiced
the bidding." True, the unincluded parties to the foreclosure action might have
objected to the entry; however, the entry still had evidentiary value. Judge
Pontious thus permissibly relied on the agreed entry identifying irregularities in
the sheriff's sale. See, e.g., Merkle v. Merkle (1961), 116 Ohio App. 370, 22
O.O.2d 202, 188 N.E.2d 170 (court did not abuse its discretion in setting aside

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judicial sale by relying on disputed testimony of plaintiff that he intended to offer
a more competitive bid).

M.P. also assails the court of appeals' procedural disposition, arguing that
its complaint stated a cause of action sufficient to withstand a Civ.R. 12(B)(6)
motion to dismiss. We disagree with M.P.'s characterization of the court of
appeals' ruling, as well as with M.P.'s claim of procedural error.

A reviewing court must examine the entire journal entry and the
proceedings below where necessary to ascertain the precise basis of a lower
court's judgment. Joyce v. Gen. Motors Corp. (1990), 49 Ohio St.3d 93, 95, 551
N.E.2d 172, 174. Here, the parties concur that the court of appeals reviewed
Judge Pontious's "Motion for Summary Judgment for the Respondent; Motion for
Judgment for Respondent on Pleadings; Motion to Dismiss" as a Civ.R. 12(B)(6)
request for dismissal of the complaint. Upon review of the entire record, however,
we view the court's ruling as having granted the Civ.R. 12(C) motion for judgment
on the pleadings.

We draw our conclusion first from the fact that Judge Pontious filed his
tripartite motion after having answered the complaint. "[A] motion to dismiss
filed after the pleadings have closed * * * is appropriately considered a motion for
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judgment on the pleadings pursuant to Civ.R. 12(C)." Lin v. Gatehouse Constr.
Co. (1992), 84 Ohio App.3d 96, 99, 616 N.E.2d 519, 520. Second, the court of
appeals obviously considered Judge Pontious's answer, if only for the allegation
that he had recently overruled M.P.'s motion to intervene. Civ. R. 12(C) permits
consideration of the complaint and answer, but a Civ.R. 12(B)(6) motion must be
judged on the face of the complaint alone. Burnside v. Leimbach (1991), 71 Ohio
App.3d 399, 402-403, 594 N.E.2d 60, 62. Third, the standards for Civ. R.
12(B)(6) and (C) motions are similar,2 but Civ.R. 12(C) motions are specifically
for resolving questions of law, Peterson v. Teodosio (1973), 34 Ohio St.2d 161,
166, 63 O.O.2d 262, 264, 297 N.E.2d 113, 117. Under Civ. R. 12(C), dismissal is
appropriate where a court (1) construes the material allegations in the complaint,
with all reasonable inferences to be drawn therefrom, in favor of the nonmoving
party as true, and (2) finds beyond doubt, that the plaintiff could prove no set of
facts in support of his claim that would entitle him to relief. Lin, supra, 84 Ohio
App.3d at 99, 616 N.E.2d at 521. Thus, Civ.R. 12(C) requires a determination that
no material factual issues exist and that the movant is entitled to judgment as a
matter of law. Burnside, supra, 71 Ohio App.3d at 403, 594 N.E.2d at 62.
11

In the main, M.P. argues that the court of appeals did not comply with these
standards by accepting its allegations as true and construing in its favor all
reasonable inferences. M.P. cites only one example -- the appellate court's finding
that "the parties in the underlying foreclosure action agreed to set aside the sale."
M.P. claims this finding contradicts the allegation that M.P. and Roger's Roadside
Inns of America, Inc. (a named defendant) did not sign the agreed entry of August
29, 1994.

The absence of M.P.'s consent to the August 29, 1994 entry, however, was
not material to the court of appeals' conclusion that, after Ambrose, this successful
bidder had no right to participate in the underlying foreclosure action. The
allegation indicates that M.P. did not participate as a party, not that it was entitled
to do so. Similarly, Judge Pontious's failure to require a named defendant's
consent has no bearing on M.P.'s legal capacity to be heard.

The court of appeals correctly determined that M.P., as the successful bidder
at a sheriff's sale, was not entitled to be heard prior to vacation of the sale. This
legal conclusion is permissible under Civ.R. l2(C). Accordingly, the court of
appeals did not err in dismissing this cause on the basis of Judge Pontius's motion
for judgment on the pleadings.
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The court of appeals' judgment, therefore, is affirmed.

Judgment affirmed.

MOYER, C.J., DOUGLAS, RESNICK, F.E. SWEENEY, PFEIFER, COOK and
STRATTON, JJ., concur.

Footnotes:
1 Incorporated material may be considered as part of the complaint. State ex rel.
Edwards v. Toledo City School Dist. Bd. of Edn. (1995), 72 Ohio St.3d 106, 109,
647 N.E.2d 799, 802.
2 Under Civ.R. 12(B)(6), a complaint may be dismissed only if the court (1)
accepts all factual allegations as true, (2) draws all reasonable inferences in favor
of the nonmoving party, and (3) still concludes beyond doubt from the complaint
that no provable set of facts warrants relief. State ex rel. Edwards, supra, 72 Ohio
St.3d at 108, 647 N.E.2d at 802; State ex rel. Williams Ford Sales, Inc. v. Connor
(1995), 72 Ohio St.3d 111, 113, 647 N.E.2d 804, 806.
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