When bank or loan servicer refers a case for foreclosure, the expectation is that it will obtain a proper judgment and ultimately obtain funds sufficient for a full payoff or good and marketable title to the secured property. Unfortunately, sometimes that expectation is dashed by a multitude of service-related problems in the foreclosure action. The Ohio Supreme Court has conclusively held that for a court to acquire jurisdiction there must be a proper service of summons and that a judgment rendered without proper service is a nullity and void. Ohio Courts will reverse foreclosure judgments based on improper service and strip even third party purchasers of title to the subject property post foreclosure sale if service was not properly perfected.
Due process requires that service of process be accomplished in a manner reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action, and to give them an opportunity to appear. In Ohio, this means that service must be made in accordance with the Ohio Rules of Civil Procedure. If there is not compliance with these rules, then service is improper and a valid judgment cannot be rendered against the defendant. Ultimately, the foreclosing Plaintiff bears the burden of ensuring proper service of process. The law firm of Carlisle, McNellie, Rini, Kramer and Ulrich LLC has an expert-level familiarity with the Ohio Rules of Civil Procedure and the many ways to perfect service. Over 20 years of experience solving a great many service problems including some of these:
- If service by certified mail is returned and marked unclaimed, rules allow for service by ordinary mail upon written request filed with the clerk; if ordinary mail is not returned, service is deemed complete.
- The rules on service make clear that service is not completed when attempted service by ordinary mail has been returned with an endorsement showing failure of that service..
- Service may be made upon a corporation by serving the agent authorized by appointment or by law to receive service of process, by serving the corporation by certified or express mail at any of its usual places of business, or by serving an officer or a managing or general agent of the corporation. If the service upon the corporation’s envelope is returned with an endorsement showing failure of delivery, service is complete when the attorney or serving party, after notification by the clerk, files with the clerk an affidavit setting forth facts indicating the reasonable diligence used to ascertain the whereabouts of the party to be served. If the defendant served is a corporation who failed to maintain a statutory agent, service may be perfected through the Secretary of State by filing an affidavit stating that one of several enumerated conditions exists and stating the most recent address of the corporation that the party after diligent search has been able to ascertain, then service of process, notice, or demand upon the Secretary of State, as the agent of the corporation, may be initiated by delivering to the Secretary of State quadruplicate copies of such process, notice, or demand and by paying to the Secretary of State a fee of five dollars.
- Ohio law permits service by publication if authorized by statute. The Ohio Revised Code specifically authorizes service by publication in an action to foreclose a mortgage or to enforce a lien or other encumbrance or charge on real property, when the defendant’s place of residence cannot be ascertained. But if reasonable diligence in locating a defendant to serve process is not used, then service by publication is not permitted and any judgment rendered thereafter is void.
- Ohio law permits personal service of foreclosure defendants by county sheriffs or process servers.
- When a party challenges whether service was proper or effective, the court is guided by the premise that service is proper where the civil rules on service are followed, unless sufficient evidence exists to rebut this principle. Carlisle Law has extensive experience defending the validity of its service attempts and preserving its foreclosure judgments.
- Sometimes a bank or loan servicer will need to prosecute its foreclosure claims as a cross-claim brought in a preexisting foreclosure case filed by another lienholder. In order to determine whether service of the cross-claim is proper a court will first determine whether or not the foreclosure defendants are in default for failure to appear and whether or not the cross-claim asserts new or additional claims for relief or for additional damages. Where a new or additional claim has been asserted against a foreclosure defendant, if such party is in default of answer to the original complaint, no judgment may properly be rendered on such cross-claim until the cross-claim has been served on such party in the manner provided for service of summons.