Wiids Cove II, L.L.C. v. Williams

[Cite as Wiids Cove II, L.L.C. v. Williams, 

.]


                 Court of Appeals of Ohio
                                EIGHTH APPELLATE DISTRICT
                                   COUNTY OF CUYAHOGA


                               JOURNAL ENTRY AND OPINION
                                       No. 105377



                               WOODS COVE II, L.L.C.
                                                               PLAINTIFF-APPELLEE

                                                      vs.

                       TERRENCE WILLIAMS, ET AL.
                                                               DEFENDANTS-APPELLANTS




                                            JUDGMENT:
                                             AFFIRMED


                                      Civil Appeal from the
                             Cuyahoga County Court of Common Pleas
                                    Case No. CV-13-806369

        BEFORE: Stewart, J., Keough, A.J., and E.T. Gallagher, J.

        RELEASED AND JOURNALIZED: December 28, 2017
FOR APPELLANT

Terrence Williams, pro se
1675 Warrensville Center Road
South Euclid, OH 44121


ATTORNEYS FOR APPELLEE

For Woods Cove II, L.L.C. and Mountainside Realty Ventures, L.L.C.

David T. Brady
Andrew M. Tomko
Austin B. Barnes, III
Suzanne M. Godenswager
Brian Steven Gozelanczyk
Sandhu Law Group, L.L.C.
1213 Prospect Avenue, Suite 300
Cleveland, OH 44115

Also Listed:

Consumer Financial Protection Bureau
1700 G. Street, N.W.
Washington, D.C., 20552

Federal Trade Commission
600 Pennsylvania Avenue, N.W.
Washington, D.C., 20580

Ohio Bar Association
1700 Lake Shore Drive
Columbus, OH 43204

For United States of America
U.S. District Attorney Civil Process Clerk
801 West Superior Avenue
400 United States Courthouse
Cleveland, OH 44113
MELODY J. STEWART, J.:

       {¶1} Defendant-appellant Terrence Williams appeals, pro se, from the trial court

order forfeiting real property to plaintiff-appellee Mountainside Realty Ventures, L.L.C.,

successor in interest to plaintiff Woods Cove II, L.L.C. We affirm the decision of the

trial court.

       {¶2} At the outset of this litigation, Williams owned an interest in the property that

was subject to various claims by defendants who are not parties to this appeal. While the

case was pending in the trial court, Williams passed his interest in the property to his

mother, Geri Upton, who then conveyed half of that interest back to Williams such that,

as Williams states in his brief, each owned a one-half interest in the property.1 Upton

was not named in the initial complaint, and the docket does not indicate that she was ever

added as a party or entered an appearance in the case. Nevertheless, Mountainside,

Williams, and the trial court all refer to her as a codefendant.2

       {¶3} There is little disagreement between the parties regarding the facts in this

case. Woods Cove purchased tax certificates relating to Williams’s property. It brought

this tax certificate foreclosure action against Williams claiming the amounts he owed on

the certificates were due and unpaid. Service was perfected, although Williams never


           This court takes judicial notice that as recorded on March 13, 2015, Williams conveyed his
       1


interest in the subject property to Upton via quit claim deed, and that as recorded on November 2,
2015, Upton conveyed 50 percent of that interest back to Williams.

           Upton’s status does not impact our analysis and bears mention only for the sake of clarity.
       2
answered the complaint or entered a formal appearance.              Woods Cove filed an

unopposed motion for default judgment that the trial court granted. The court then

granted a decree of foreclosure.

       {¶4} Woods Cove made numerous attempts to have the property sold by the county

sheriff. During the pendency of this case, Williams and Upton filed seven bankruptcies.

Some of these bankruptcy filings interrupted attempted sales of the property and caused

them to be withdrawn. Nevertheless, two sales attempts were completed. Because the

sales attempts were completed but the property remained unsold for want of a bidder,

pursuant to R.C. 5721.40, the court ordered that the property be forfeited to

Mountainside, the successor in interest to Woods Cove.

       {¶5} Williams assigns two errors for our review: that the trial court erred in

disregarding Woods Cove’s purported violation of an automatic stay filed on November

4, 2016, and that the court erred by granting Woods Cove a decree of forfeiture in light of

the most recent bankruptcy filed. The assignments of error flow from the same premise:

that the most recent bankruptcy filed, Upton’s third within one year, created an automatic

stay of the proceedings before the trial court.

       {¶6} The only question before this court is what effect, if any, Upton’s third

bankruptcy filing had on the underlying case. We resolve that the bankruptcy had no

effect on the proceedings and did not cause an automatic stay.

       {¶7} R.C. 5721.40 directs a trial court to forfeit a tax certificate property, when the

property is twice offered for sale pursuant to R.C. 5721.39, but remains unsold for want
of a bidder. In those cases, the court is required to forfeit the property to the certificate

holder who filed the foreclosure request under R.C. 5721.37.

       {¶8} In this case, on September 22, 2016, the court ordered the sheriff to sell the

subject property on November 7, 2016, and if unsuccessful, the court ordered that a

second attempt be made on November 21, 2016. The docket reflects that on November

21, the sheriff filed a return of sale indicating compliance with the order, and that the

property had not sold for want of a bidder. In light of these failed sales, on December

19, 2016, the court forfeited the property to Mountainside, the current holder of the tax

certificate. Thus, the trial court fully complied with R.C. 5721.40 and properly forfeited

the property.

       {¶9} Williams argues that Upton’s third bankruptcy, filed with the bankruptcy

court on November 4, 2017, automatically stayed all proceedings, rendering the

subsequent attempted sales and ultimate forfeiture improper.

       {¶10} 11 U.S.C. 362 provides a mechanism to automatically stay most actions

against a debtor when that person files a qualifying bankruptcy. See Adams v. Zarnel (In

re Zarnel), 

 (2d Cir.2010). There are, however, limitations to this

provision that apply to subsequent bankruptcies filed by the same person. 

 11 U.S.C.

362(c)(4) states “‘if [two] or more * * * cases of the debtor were pending within the

previous year but were dismissed, * * * the stay * * * shall not go into effect upon the

filing of the later case,’ and the debtor may obtain a stay only if he is able to demonstrate

that the filing of the later case is in good faith.” 

, quoting 11 U.S.C. 362(c)(4).
        {¶11} The trial court’s docket reflects that a notice of the November 4 bankruptcy

was filed on November 9. The filing was not attributed to any party nor was it signed.

It consisted entirely of a general notice from the bankruptcy court with boilerplate

language indicating that Upton filed a bankruptcy. Nowhere in that filing is an order

from the bankruptcy court to stay the proceedings or a request from either party to do so.

Williams does not dispute this, but instead bases his argument on an incorrect reading of

11 U.S.C. 362, the automatic stay provisions of the federal bankruptcy code.            His

argument is simply that “[u]pon the filing of a bankruptcy, an automatic stay goes into

effect.”

        {¶12} The trial court record reflects that Upton had two pending bankruptcies

within the previous year that were dismissed.3 As such, pursuant to 11 U.S.C. 362(c)(4),

there was no automatic stay applicable to the November 4 bankruptcy. As previously

noted, the November 9 filing was a general notice from the bankruptcy court indicating

that Upton filed a bankruptcy; it contained no indication that Upton demonstrated that this

third bankruptcy was filed in good faith or that the bankruptcy court determined as much.

 In light of the exception to the automatic stay provision, we find that the trial court

committed no error.

        {¶13} Judgment affirmed.

        It is ordered that appellee recover of appellant costs herein taxed.


         Bankruptcy case number 16-10808 was filed February 19, 2016, and dismissed April 8,
        3


2016.   Bankruptcy case number 16-12714 was filed May 16, 2016, and dismissed July 12, 2016.
       The court finds there were reasonable grounds for this appeal.

       It is ordered that a special mandate issue out of this court directing the common

pleas court to carry this judgment into execution.

       A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of

the Rules of Appellate Procedure.



______________________________________________
MELODY J. STEWART, JUDGE

KATHLEEN ANN KEOUGH, A.J., and
EILEEN T. GALLAGHER, J., CONCUR