COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 71455 H.P.J. LIMITED : : Plaintiff-appellee : : JOURNAL ENTRY -vs- : AND : OPINION A. DALE NATICCIA : : Defendant-appellant : : DATE OF ANNOUNCEMENT OF DECISION: JULY 17, 1997 CHARACTER OF PROCEEDING: Civil appeal from Court of Common Pleas Case No. CV-294648 JUDGMENT: Reversed and Remanded. DATE OF JOURNALIZATION: APPEARANCES: For Plaintiff-Appellee: For Defendant-Appellant: CHARLES MORGAN, ESQ. JOEL I. NEWMAN, ESQ. 11510 Buckeye Road 711 Leader Building Cleveland, Ohio 44104 Cleveland, Ohio 44114 WILLIAM J. COYNE, JR., ESQ. ASST. COUNTY PROSECUTOR Courts Tower - Justice Center 1200 Ontario Street Cleveland, Ohio 44113 MICHAEL MEEHEN, ESQ. 3416 W. 159th Street Cleveland, Ohio 44111 - 2 - DYKE, J.: Catharine Lee Balogh appeals from the trial court's denial of her motion to intervene in the foreclosure action which plaintiff H.P.J. Limited filed against Defendant A. Dale Naticchia, trustee for the Gertrude Vanacek Trust (hereafter referred to as "Naticchia" or "the trustee"). For the reasons set forth below, we reverse and remand for further proceedings consistent with this opinion. The record reveals that plaintiff H.P.J. Limited filed this action against Naticchia seeking to foreclose upon property located at 19060 Rockcliff Drive in Rocky River, Ohio. In relevant part, plaintiff alleged that on June 15, 1995, Naticchia had executed a cognovit promissory note in the amount of $100,000 and that on August 23, 1995 plaintiff was awarded judgment on that note. Plaintiff further alleged that the cognovit promissory note was secured by a mortgage upon the Rockcliff Drive property, that the trustee had not paid anything on the judgment and that the Rockcliff property should be foreclosed upon in order to satisfy the judgment. Plaintiff also named former county treasurer Francis E. Gaul in the action and alleged that he may have an interest in the property. The treasurer denied plaintiff's allegations for want of information and also set forth a cross-claim against Naticchia for unpaid property taxes and penalties. - 3 - On October 23, 1995, plaintiff moved for summary judgment and asserted that pursuant to the preliminary judicial report, it has the first and best lien on the subject property. On October 24, 1995, plaintiff moved for default judgment and asserted that the trustee had failed to answer or otherwise respond to the complaint. The court's magistrate subsequently determined that the trustee was in default and that plaintiff was the first and best lien holder. The magistrate then recommended that the property be foreclosed upon and the following distribution made: FIRST: The costs herein, including the sum of $280.00/payable to Plaintiff for the Judicial Reports filed herein. SECOND: To the Treasurer of this County, the unpaid taxes, assessments, interest and penalties due and payable on said premises. THIRD: To the Plaintiff, the sum of $100,000.00 plus interest thereon at the rate of 13.00% per annum from June 13, 1995 to August 23, 1995 and at the rate of 10.00% per annum thereafter. FOURTH: The balance, if any, to be held by the Sheriff, pending further order of this Court. The trial court adopted the magistrate's decision and entered a final decree for plaintiff on April 17, 1996. The court scheduled the sale of the property for July 8, 1996. On July 2, 1996, appellant Catharine Lee Balogh moved to intervene in the action as "tenant-in-possession of the property" - 4 - and that she has a "recorded interest in the property *** by virtue of the Separation Agreement which terminated her marriage to the beneficiary of the trust." Balogh incorporated the 1993 Separation Agreement which provided in relevant part as follows: DIVISION OF PROPERTY A. R EAL ESTATE: The parties have no ownership interests jointly or individually in any Real Estate. B. TRU ST PROPERTY: Wife presently resides in a residential property purchased and owned by a certain Trust, concerning which Husband is the sole beneficiary ("residential home"). Such Trust was established prior to the marriage and therefore, it is agreed that all assets of such Trust are non-marital assets, including the residential home. David Balogh agrees not to initiate or otherwise take any action that would jeopardize the continued possession by Wife and children of the residential home until the last child reaches the age of majority. During the time the Wife resides at the residential home, the Husband shall pay the next $6,000.00 in property taxes as such taxes become due and payable. At such time as the property tax payments by Husband equal or exceed $6,000.00, the remaining tax payments shall be assumed and paid by the Wife so long as she resides in said property. In addition, during the time Wife resides and has use of the property, Wife shall pay all insurance, maintenance, and utility costs. So long as such residential home remains in the Trust, the parties understand and acknowledge that all decisions regarding the residential home remain with the Trustee within his sole discretion acting in behalf of the Trust, pursuant to his fiduciary duties under such trust. Balogh also filed a motion for leave to file an answer and cross-claim against Naticchia for fraud and for interfering with her right in the property. Balogh demonstrated that on December 3, 1994, the domestic relations court issued an order joining the trustee as a new party defendant to the action and restraining him and the beneficiary of the trust from evicting or accepting - 5 - application to evict Balogh from the subject premises. Balogh also submitted a "Supplemental Final Judicial Report" which cited the divorce proceedings "for information only." In his brief in opposition to Balogh's motion to intervene, Naticchia asserted that he retained discretion over the subject property, that Balogh had no recognizable interest in the subject property, and that she had not pleaded fraud with particularity. He acknowledged, however, that due to Balogh's refusal to pay rent, and property taxes on the property and to furnish proof of insurance, he mortgaged the property and tendered the proceeds to the trust beneficiary, David Balogh. On September 19, 1996, the trial court denied Balogh's motion for leave to intervene and she appeals herein. Balogh's assignment of error states: THE COURT OF COMMON PLEAS ERRED BY DENYING THE MOTION TO INTERVENE OF A PERSON NOT NAMED AS A PARTY TO A FORECLOSURE WHO ASSERTS AN INTEREST IN THE REAL ESTATE BY THE FORCE OF A COURT ORDER RESTRICTING THE ABILITY OF THE OWNER TO ALIENATE THE PROPERTY. Within this appeal, Balogh maintains that the trial court erred in denying her motion to intervene in the action because R.C. 2307.27 authorizes the joinder of persons "claiming an interest in the property." Plaintiff H.P.J. Limited asserts that the trial court's denial of Balogh's motion to intervene is not a final appealable order. - 6 - In Jamestown Village Condominium Owners Association v. Market Media Research, Inc. (1994), 96 Ohio App.3d 678, 694, this court noted that "the denial of a motion to intervene pursuant to Civ. R. 24(A) is a final appealable order." Accord In re Stapler (1995), 107 Ohio App.3d 528, 531; Blackburn v. Hamoudi (1986), 29 Ohio App.3d 350, 352; Likover v. Cleveland (1978), 60 Ohio App.2d 154, 155. Thus, H.P.J. Limited's motion to dismiss is without merit. Motion 79048 is denied. With regard to the merits of Balogh's appeal, we note that motions to intervene are governed Civ. R. 24 which provides as follows: (A) Intervention of right. Upon timely application anyone shall be permitted to intervene in an action: (1) when a statute of this state confers an unconditional right to intervene; or (2) when the applicant claims an interest relating to the property or transaction which is the subject of the action and he is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect that interest, unless the applicant's interest is adequately represented by existing parties. (B) Permissive intervention. Upon timely applica- tion anyone may be permitted to intervene in an action: (1) when a statute of this state confers a conditional right to intervene; or (2) when an applicant's claim or defense and the main action have a question of law or fact in common. When a party to an action relies for ground of claim or defense upon any statute or executive order administered by a federal or state governmental officer or agency or upon any regulation, order, require- ment or agreement issued or made pursuant to the statute or executive order, the officer or agency upon timely application may be permitted to intervene in the action. In exercising its discretion the court shall consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties. - 7 - In Blackburn v. Hamoudi, supra, at 352, this court noted that no statute provides an unconditional right to intervene pursuant to Civ. R. 24(A)(1). This court then set forth the essential elements demonstratinga right to intervene pursuant to Civ. R. 24(A)(2) as follows: * * * [T]he application must be timely and the applicant must show three conditions exist: * * * (1) that he claims an interest relating to the property or transaction which is the subject of the action; (2) that he is [so] situated that the disposition of the action may as a practical matter impair or impede his ability to protect that interest; and (3) that the existing parties do not adequately represent his interest. (Footnote omitted.) McCormac, Ohio Civil Rules Practice (1970), 80-81, Section 4.36. In this instance, Balogh relies upon language in her separation agreement which gives her a right of possession of the subject property for the requisite "interest" pursuant to Civ. R. 24(A)(2). In addition, she relies upon R.C. 2307.27 which provides: Person claiming property interest may be made a party. In an action for the recover of real or personal property, a person claiming an interest in the property, on his application, may be made a party. We find this claimed "interest" is that of possession and quiet enjoyment. In Hembree v. Mid-America Savings & Loan Association (1989), 64 Ohio App.3d 144, 154-155, the court held that such rights were "personal rights" which are not properly determinable in foreclosure proceedings. The Hembree court further held that it was not necessary to join claims concerning such rights in a foreclosure action. Id., citing to Prudential Ins. Co. - 8 - v. Bull Market, Inc. (C.P. Ohio 1979), 66 Ohio Misc. 9. Thus, we cannot say as a matter of law that Balogh's asserted interest was sufficient to establish a right to intervene in the action pursuant to Civ. R. 24(A). Cf. Swirsky v. Iwanyckyj (1967), 11 Ohio St.2d 92 (domestic relations order concerning the rights of the parties in certain real estate was not a bar to action to marshall liens). Nonetheless, as set forth in Metropolitan Life Ins. Co. v. Triskett Illinois, Inc. (1994), 97 Ohio App.3d 228, 234: The right to judgment on a note evidencing the debt secured by a mortgage and the right to foreclose on the mortgage constitute two separate causes of action, one legal and one equitable. Carr v. Cleveland Trust Co. (1947), 48 Ohio L.Abs. 179, 74 N.E. 124. Thus, an action praying for judgment on a note and foreclosure on a mortgage raises two issues. The first issue presents the legal question of whether the mortgagor has defaulted on the note. The second issue entails an inquiry into whether the mortgagor's equity of redemption should be foreclosed. City Loan & Savings Co. v. Howard (1984), 16 Ohio App.3d 185, 475 N.E.2d 154; accord Rosselot v. Heimbrock (1988), 54 Ohio App.3d 103, 561 N.E.2d 555; Wheatstone Ceramics Corp. v. Turner (1986), 32 Ohio App.3d 21, 513 N.E.2d 348. Accordingly, once a court has determined that a default on an obligation secured by a mortgage has occurred, it must then consider the equities of the situation in order to decide whether foreclosure is appropriate. Wheatstone Ceramics Corp., supra. Rosselot v. Heimbrock, supra, at 106. In this instance, the unique equities of this situation as set forth by Balogh are that she was granted an interest in the property by the domestic relations court prior to the mortgage at issue, cf. Prudential Ins. Co. of America v. Bull Market, Inc., - 9 - supraat 10. While the order of that court further indicates that "all decisions regarding the residential home remain with the Trustee within his sole discretion acting in behalf of the Trust, pursuant to his fiduciary duties under such trust," there is no indication that the Trustee obtained the approval of the probate court before mortgaging the property. Cf. R.C. 2109.46-2109.48. In addition, David Balogh accepted the proceeds of the mortgage, with apparent knowledge of the impending cognovit judgment, despite his prior agreement to take no "action that would jeopardize" Catharine Balogh's continued possession of the subject premises until the their youngest child reaches the age of majority. Thus, while we make no comment regarding the ultimate success of Balogh's claim, we find that the unique circumstances she describes in her motion to intervene raise issues which could be of significance to the trial court in its determination of the equitable aspects of the foreclosure action. We therefore hold that Balogh's motion met the requirements for permissive intervention, and that the trial court abused its discretion in denying her motion to intervene. We therefore reverse and remand for further proceedings consistent with this opinion. - 10 - This cause is reversed and remanded to the lower court for further proceedings consistent with this opinion. It is, therefore, considered that said appellant recover of said appellee her costs herein. It is ordered that a special mandate be sent to said 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. DAVID T. MATIA, P.J., CONCURS NAHRA, J., DISSENTS (SEE ATTACHED DISSENTING OPINION) ANN DYKE JUDGE N.B. This entry is an announcement of the court's decision. See App.R. 22(B), 22(D) and 26(A); Loc.App.R. 27. This decision will be journalized and will become the judgment and order of the court pursuant to App.R. 22(E) unless a motion for reconsideration with supporting brief, per App.R. 26(A), is filed within ten (10) days of the announcement of the court's decision. The time period for review by the Supreme Court of Ohio shall begin to run upon the journalization of this court's announcement of decision by the clerk per App.R. 22(E). See, also S.Ct.Prac.R. II, Section 2(A)(1). - 11 - - 12 - COURT OF APPEALS OF OHIO EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 71455 H.P.J. LIMITED, : : Plaintiff-Appellee : : D I S S E N T I N G vs. : : O P I N I O N A. DALE NATICCIA, TRUSTEE : : Defendant-Appellant : DATE: JULY 17, 1997 NAHRA, J.: Because I disagree with the majority's conclusion that appellant Catharine Lee Balogh was entitled to intervene in the foreclosure action, I respectfully dissent. The abuse of discretion standard governs our review of this issue. Young v. Equitec Real Estate Investors Fund (1995), 100 Ohio App.3d 136, 138, 652 N.E.2d 234; Widder and Widder v. Kutnick (Aug. 8, 1996), Cuyahoga App. No. 69945, unreported. An abuse of discretion connotes more than an error of law and requires that the trial court acted arbitrarily, unreasonably, or unconscionably. Young, supra. The majority opinion has failed to identify any abuse of discretion by the trial court. Rather, the majority focuses on a claimed error of law. However, the trial court did not err in denying appellant's motion to intervene. - 13 --13- Appellant argues that the separation agreement conferred upon her a right of possession in the marital residence. Accepting this premise, the majority states that Balogh's interest was that of possession and quiet enjoyment. While appellant obviously desires to remain in possession of the marital residence, the separation agreement does not create a legal basis for such expectation. The separation agreement states in part: B. * * * David Balogh agrees not to initiate or otherwise take any action that would jeopardize the continued possession by Wife and children of the residential home * * *. So long as the residential home remains in the Trust, the parties understand and acknowledge that all decisions regarding the residential home remain with the Trustee within his sole discretion acting in behalf of the Trust * * *. (Emphasis added.) Contrary to the majority's conclusion, this language does not invest Balogh with a right of possession of the subject property, or any other legal interest in the property. Rather, it creates a contractual right obligating Mr. Balogh to refrain from specified conduct, to wit, action that would jeopardize the continued possession by Wife and children of the residential home. It is fundamental that the intent of the parties' is presumed to reside in the language they chose to employ. Skivolocki v. East Ohio Gas Co. (1974), 38 Ohio St.2d 244 (paragraph one of the syllabus). Here, the parties specifically avoided language assigning or conveying his equitable interest; they did not state that he transferred a right of possession to her; instead, the language restricts his conduct. Such language does not comport with a creation of an interest in the property. - 14 --14- The parties cognizance that she had no legal right to possess the residence is further manifest in the separation agreement. The agreement expresses the parties' understanding that only the trustee could make decisions regarding interests in the property. Implicitly, the agreement contemplates the trustee's right to sell the residence, to charge rent, and to evict Balogh. Concomitantly, Balogh's lack of standing to challenge the Trustee's decisions regarding the property is expressly stated. This fact weighs heavily against her instant claim to a property interest. Recognizing that Balogh was not entitled to intervene, the majority opinion holds that appellant met the requirements for permissive intervention. Civ.R. 24(B) governs permissive intervention and states in part: Upon timely application anyone may be permitted to intervene in an action: (1) when a statute of this state confers a conditional right to intervene; or (2) when an applicant's claim or defense and the main action have a question of law or fact in common. There is no statute which permits Balogh to intervene. There is no common question of law or fact which appellant's claim shares with - 15 --15- the underlying foreclosure suit. Accordingly, appellant did not meet the requirements under Civ.R. 24(B) for permissive intervention. Despite appellant's abject failure to demonstrate any basis to intervene, the majority cites unique circumstances in this case which could be of great significance to the trial court and holds that the trial court erred. However, Civ.R. 24(B) does not provide for intervention upon such grounds. Moreover, the trial court was fully apprised of the unique circumstances of appellant's position and chose not to permit appellant's intervention. Most critically, as appellant failed to satisfy the requirements under either Civ.R. 24(A) or 24(B), there is no basis to hold that the trial court's decision amounted to an abuse of discretion. As the trial court did not act arbitrarily, unreasonably or .