Busack v. Belmont Savings Bank

Filing 19

OPINION and ORDER overruling 16 Plaintiff's Objection; adopting 15 the Report and Recommendation; granting 4 Defendant's Motion to Dismiss for Failure to State a Claim; denying 11 Plaintiff's Motion for Summary Judgment; denyi ng 14 Plaintiff's Motion for Preliminary Injunction; denying as moot 17 Defendant's Motion for Leave to File. Signed by Judge Michael H. Watson on 3/17/17. (jk) (This document has been sent by regular mail to the party(ies) listed in the NEF that did not receive electronic notification.)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION

Marc C. Busack,

Plaintiff,

Case No. 2:16-cv-751

V.

Judge Michael H. Watson
Magistrate Judge Jolson

Belmont Savings Bank,
Defendant.

OPINION AND ORDER

Marc 0. Busack ("Plaintiff'), a prisoner who is proceeding without the
assistance of counsel, moves to reconsider the United States Magistrate Judge's
Report and Recommendation, EOF No. 15 ("R&R"), recommending that Belmont
Savings Bank's ("Defendant") motion to dismiss, EOF No. 4, be granted and that

Plaintiffs motion for summary judgment, EOF No. 11, and motion for preliminary
injunction, EOF No. 14, be denied. Obj., EOF No. 16. For the reasons that
follow, the Court OVERRULES Plaintiffs objection, ADOPTS the R&R, and
DISMISSES the action.
I.

Plaintiff alleges that on November 5,2014, his father, John Joseph

Busack (now deceased), executed a promissory note in the amount of $103,000
to Defendant ("the Note"), which was secured by a mortgage on his father's

house ("the Property"). According to Plaintiff, Defendant failed to provide certain

"material disclosures" to Plaintiffs father. There Is no dispute that the Property
was previously the subject of a foreclosure proceeding In Belmont County Court
of Common Pleas (the "Foreclosure Proceeding"), In which summary Judgment
was granted In favor of Defendant and Plaintiffs motion to dismiss was denied.

Based on these allegations, Plaintiff filed the Instant action, asserting a claim
under the Truth In Lending Act, 15 U.S.C. § 1638 ("TILA"). Plaintiff seeks

monetary damages In the amount In excess of $190,000, costs, and rescission of
the promissory note.
Defendant moved to dismiss the action, contending that Plaintiff lacks

standing and that the doctrine of res judlcata bars Plaintiffs claims. Mot.
Dismiss, ECF No. 4. Thereafter, Plaintiff moved for summary judgment, ECF No.
11, and for a preliminary Injunction In order to stop a sheriffs sale of the Property
scheduled for September 26,2016. ECF No. 14.
In the R&R, the Magistrate Judge first construed Defendant's motion to
dismiss, which attached matters outside of the Complaint, as a motion for

summary judgment. Finding that Plaintiff was not a party to the mortgage
transaction, the Magistrate Judge concluded that Plaintiff did not have standing

to bring his TILA claims. The Magistrate Judge went on to find that even If
Plaintiff had standing, res judlcata bars his claims. Because the Magistrate
Judge recommended that Defendant's motion for summary judgment be granted
and that judgment be entered In Defendant's favor, she further recommended

that Plaintiffs motion for summary judgment be denied and that his motion for a
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preliminary injunction be denied. PiaintifT moves to reconsider the R&R, which

the Court receives as an objection.
II.

When a party timely objects to a report and recommendation, the
reviewing District Judge "shall make a de novo determination of those portions of
the report or specified proposed findings or recommendations to which objection

is made." 28 U.S.C. § 636(b)(1). See also Fed. R. Civ. P. 72(b)(3) ("The district
judge must determine de novo any part of the magistrate judge's disposition that
has been properly objected to."). The reviewing District Judge "may accept,

reject, or modify, in whole or in part, the findings or recommendations made by
the magistrate judge." 28 U.S.C. § 636(b)(1).
The Court notes that Plaintiff is proceeding without the assistance of
counsel In this action. A pro se litigant's pleadings are to be construed iiberaiiy
and held to a less stringent standard than formal pleadings drafted by lawyers.

Halnes v. Kerner, 404 U.S. 519, 520-21 (1972). "This standard does not mean,
however, that pro se plaintiffs are entitled to take every case to trial." Ashiegbu
V. Pun/lance, 74 F. Supp. 2d 740, 749 (S.D. Ohio 1998).
III.

In his objection. Plaintiff asks the Court to substitute "the Estate of John J.

Busack" for "Mark C. Busack" in this action (the "proposed substitution").
According to Plaintiff, the proposed substitution "corrects the deficiencies cited" in
the R&R regarding standing and res judicata.
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The Court disagrees. Even Ifthe proposed substitution were permitted
and even If doing so cured the deficiencies In standing, res judlcata still bars
Plaintiffs claims. Pursuant to this doctrine, "'a final judgment on the merits bars
further claims by parties or their privies based on the same cause of action.'"

U.S. exrel. Sheldon v. Kettering Health Network, 816 F.3d 399, 414 (2016)
(quoting Montana v. United States, 440 U.S. 147,153 (1979)). Under Ohio law,
which applies here because Defendant argues that the Ohio state court decision
In the Foreclosure Proceeding bars this action. Defendant bears the burden of
proof on the following elements;

(1) a prior final, valid decision on the merits by a court of competent
jurisdiction; (2) a second action Involving the same parties, or their
privies, as the first; (3) a second action raising claims that were or
could have been litigated In the first action; and (4) a second action
arising out of the transaction or occurrence that was the subject
matter of the previous action.

Id. at 415 (quoting Hapgood v. City of Warren, 127 F.3d 490 (6th Clr.1997))
(Intemal quotation marks omitted).
Plaintiff does not dispute that three of the four elements are met but
contends that the second element Is not met because this action and the

Foreclosure Proceeding "do not Involve the same parties" after the proposed

substitution. Obj. 2, EOF No. 16.
Plaintiffs argument Is not well taken. "Ohio courts 'have applied a broad
definition to determine whether the relationship between the parties Is close

enough to Invoke the doctrine' of res judlcata." Kettering Health Network, 816
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F.3d at 415 (quoting Kirkhart v. Keiper, 101 Ohio St.3d 377, 805 N.E.2d 1089,

1092 (2004)). "Thus, a mutuality of Interest, Including an Identity of desired
result, may create privity." Id. (quoting Kirkhart, 101 Ohio St.3d 377, 805 N.E.2d
at 1092) (Internal quotation marks omitted). "A party Is In 'privity' with another IfIt
succeeds to an estate or an Interest formerly held by the other, or where a party
Is so Identified In Interest with another that the party represents the same legal

right." Smith v. Lerner, Sampson & Rothfuss, LP.A., 658 F. App'x 268, 276 (6th

CIr. 2016) (quoting Jarvis v. Weils Fargo Bank, No. 09 CO 6, 2010 WL 2749602,
at *7 (Ohio Ct. App. June 30, 2010)) (Internal quotation marks omitted).
Here, Plaintiff and his father's estate are In privity because both share the

same Interest In fighting Defendant's foreclosure of the Property and seeking

monetary damages, satisfying the second element, id. (finding parties were In
privity with each other where they all shared the same Interest). Notably, Plaintiff
concedes as much by raising the same arguments here on behalf of his father's
estate as he did on his own behalf In the Foreclosure Proceeding. Compare,

e.g., Obj. 4-5, EOF No. 16 (presuming that the Court effects the proposed
substitution and arguing, inter alia, that Defendant failed to provide certain
material disclosures In violation of TILA), with Am. Answer & Counterclaim
PAGEID #87- 89, ECF No. 7 (same). Accordingly, even If"the Estate of John J.
Busack" was substituted for "Mark C. Busack" In this action, the claims are

barred by res judlcata.

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IV.

Having performed a de novo review of the R&R, the Court agrees with the
Magistrate Judge that the doctrine of res judicata bars Plaintiffs claims and that
the claims must be dismissed. The Court therefore OVERRULES Plaintiffs

objection, ECF No. 16, ADOPTS the R&R, ECF No. 15, GRANTS Defendant's
motion to dismiss, ECF No. 4, and DENIES Plaintiffs motion for summary
judgment, ECF No. 11, and motion for preliminary injunction, ECF No. 14. Under
these circumstances. Defendant's motion for leave to file a memorandum in

opposition to Plaintiffs objection, ECF No. 17, is DENIED as moot.
The Clerk is DIRECTED to enter final judgment in this case.
IT IS SO ORDERED.

riCHAEL H. WATSON, JUDGE
UNITED STATES DISTRICT COURT

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