Does CAFA permit appellate review of sua sponte remand orders? – Commercial Law Bulletin,

Ohio

Substantially compliant acknowledgment clause

WWSD, LLC v. Woods, 10th Dist. Franklin No. 20AP-403, 2022-Ohio-952

In this appeal, the Tenth Appellate District affirmed the trial court’s decision, agreeing that although the acknowledgment clause erroneously stated the previous sheriff’s name, the clause substantially complied with Ohio’s statutory requirements and the sheriff’s deed was valid.

The Bullet Point: At issue in this dispute was the sufficiency of a sheriff’s deed that conveyed title in real property to the plaintiffs. Ohio courts have held that where the acknowledgment or execution of a deed is defective, the deed is ineffective as against subsequent creditors. Therefore, according to defendant, a defective acknowledgment does not protect a grantee from third-party claims or confer standing to sue.

Under long-standing Ohio law, a deed is required to be signed by the grantor and a notary must properly acknowledge the grantor’s signature. R.C. 5301.01. However, the purpose of acknowledgment is to afford “proof of the due execution of the deed by the grantor, sufficient to authorize the register of deeds to record it.” That is to say, the acknowledgement of a deed is required solely to provide proof that the grantor executed the deed and is a prerequisite to recording the deed and making it constructive notice of all the facts set forth in it. Thus the validity of a deed does not depend on its acknowledgment. Rather, as between the grantor and grantee, the deed is valid despite a defective acknowledgment, and said deed passes title equally to a deed that is properly acknowledged.

In this matter, the acknowledgment in the sheriff’s deed contained the name of the previous sheriff. Nevertheless, the appellate court determined this error was not fatal to the deed under the doctrine of substantial compliance. When interpreting an acknowledgment under the doctrine of substantial compliance, one may refer to any part of the accompanying document, and “[w]here an error occurs in the name of a party to a written instrument, apparent upon its face, and, from its contents, susceptible of correction, so as to identify the party with certainty, such error does not affect the validity of the instrument.” Simply stated, an acknowledgment substantially complies when it in some way identifies the person making the acknowledgment.

Corporate Trade Name

Gingrich v. G & G Feed & Supply, LLC, 5th Dist. Licking No. 2021 CA 00060, 2022-Ohio-982

In this appeal, the Fifth Appellate District reversed and remanded the trial court’s decision, holding that a corporate entity cannot hide behind its trade name to avoid liability as because a plaintiff is under no duty to determine which legal entity holds the trade name being commencing or maintaining an action against it pursuant to R.C. 1329.10(C).

The Bullet Point: In this matter, the plaintiff obtained default judgment against her former employer and multiple related corporate organizations. The plaintiff attempted to collect on said judgment and discovered one of the named defendants in her lawsuit was a registered trade name for an unnamed corporate entity. The plaintiff filed a motion to correct the record, requesting the trial court amend and correct the record, including the judgment entry, docket, and certificate of judgment, to reflect the legal name of the corporate entity as the judgment debtor. The entity objected, arguing that amending the record to add its name was akin to adding a new defendant. In denying the plaintiff’s motion, the trial court stated that while an action may be maintained against a trade name, a judgment against said trade name is not automatically a judgment against the legal entity that registered it. On appeal, the plaintiff asserted the trial court’s holding that a judgment against the trade name was not enforceable against the entity behind it amounted to denying execution and effectively vacating the judgment. In response, the entity argued the plaintiff had a duty to do her due diligence with the Ohio Secretary of State, as the identification of the registrant of the trade name was easily discoverable. Had the plaintiff done her due diligence, she would have discovered the entity behind the trade name and could have substituted the entity into the lawsuit. The appellate court disagreed, finding that the plaintiff had no such obligation. Pursuant to R.C. 1329.10(C), an action may be commenced or maintained against the user of a trade name or fictitious name, whether or not said name is registered with the state. The appellate court pointed out that nothing in the statute imposed a duty upon a party to determine the legal entity behind the trade name before commencing or maintaining “an action against a party named only by its fictitious name” pursuant to R.C. 1329.10(C). Further, “[a] legal entity’s decision to register a trade name does not create a separate duty on a private party seeking to bring suit against that entity…”

Interpleader

NWO Holdco, L.L.C. v. Hilliard Energy, Ltd., 3d Dist. Paulding No. 11-21-03, 2022-Ohio-881

In this appeal, the Third Appellate District affirmed the trial court’s decision, agreeing that as the judgment debtor had no right to the interpleaded funds, the judgment creditor likewise had no right and did not have a valid judgment lien on said funds.

The Bullet Point: In Ohio, interpleader is governed by Civ.R. 22, which provides in part: “Persons having claims against the plaintiff may be joined as defendants and required to interplead when their claims are such that the plaintiff is or may be exposed to double or multiple liability.” Interpleader is “a two-stage action” involving a stakeholder who “controls a fund [that] is subjected to the claims of two or more claimants” and “does not know who is the proper claimant.” “In the first stage, the stakeholder, in order to avoid a multiplicity of suits and possible multiple liability, interpleads the claimants.” If the trial court determines that interpleader is appropriate and that the claimants should be made to litigate their respective claims to the contested fund, the stakeholder is usually dismissed upon deposit of the fund with the court. The action then moves to stage two, where the court must “decide the claimants’ relative rights and priority to the interpled funds.” In stage two, each claimant must prove it has a title or lien, legal or equitable, with respect to the deposited funds. If multiple claimants establish cognizable interests in the funds, the court then must determine the order of priority amongst the claimants. In this case, there was no dispute that the specific funds interpleaded by plaintiff represented purchase price payments.

Oil and Gas Dispute Not Arbitrable

French v. Ascent Resources-Utica, L.L.C., 2022-Ohio-869

In this appeal, the Supreme Court of Ohio reversed and remanded the Court of Appeals’ judgment, holding that as the action seeking a determination that an oil and gas lease expired by its own terms was a controversy involving the title to or the possession of real estate, it was not subject to arbitration under R.C. 2711.01(B)(1).

The Bullet Point: This discretionary appeal presented the Supreme Court of Ohio with a single question: is an action seeking a determination that an oil and gas lease has expired by its own terms a controversy “involving the title to or the possession of real estate” so that the action is exempt from arbitration under R.C. 2711.01(B)(1)? R.C. 2711.01(A) states, “A provision in any written contract, except as provided in division (B) of this section, to settle by arbitration a controversy that subsequently arises out of the contract * * * shall be valid, irrevocable, and enforceable, except upon grounds that exist at law or in equity for the revocation of any contract.” In turn, R.C. 2711.01(B)(1) provides that R.C. 2711.01 through 2711.16—a statutory scheme that includes the authority for a court to stay proceedings pending arbitration, see R.C. 2911.02(B)—”do not apply to controversies involving the title to or the possession of real estate.” Although defendant in this case argued that the action should be stayed pending arbitration, the oil and gas leases at issue clearly involved the title to or the possession of real property. As the Court explained, it is well settled in Ohio law that an oil and gas lease grants the lessee a property interest in the land. Notably, R.C. 5301.09 provides that all oil and gas leases must be recorded in the applicable county’s land records, “[i]n…