High court sides with estate of mother defrauded by son

By Marc Kovac

The high court said a records check should have been made before a mortgage was provided.

COLUMBUS — The Ohio Supreme Court sided with the estate of a Trumbull County woman whose son had defaulted on a mortgage he obtained on property that was not rightly his.

According to court documents, Dale Ellis fraudulently obtained quit-claim deeds about a decade ago on six lots from his mother, who had agreed to give him only one.

A quit-claim deed allows you to transfer your share of interest in the property to some other person.

Ellis subsequently secured mortgages on all six lots, starting in 1999, a few weeks after the fraudulent deeds were recorded, according to documents.

His mother eventually discovered the fraud and filed a lawsuit in Trumbull County Common Pleas Court seeking the return of five of the six lots.

Shortly before he was served with the complaint, but after the mortgage provider had received its copies, Ellis obtained another loan from a different provider on the lots, using the proceeds to pay off the other mortgages, according to documents.

The court eventually ruled in Ellis’ mother’s favor, returning ownership of five of the lots to her. She died about two years later.

Ellis defaulted on the final mortgage he took out, and the provider filed foreclosure actions against him and his mother’s estate, according to documents.

The legal question considered by the Supreme Court focused on whether the second mortgage company could rightly acquire an interest in the lots in question while legal action was pending with the original lender.

The executor of the estate argued that Ellis had no legal ownership interest in the five lots he used to secure the mortgage.

The mortgage company argued that no legal action was pending against Ellis at the time the loan was made.

A trial court ruled in favor of the mortgage provider, but an appeals court reversed that decision in favor of the estate.

The Supreme Court sided with the appellate ruling.

According to the decision, “A person who seeks to acquire an interest in property should bear the responsibility for checking county records seems best exemplified by the facts of this case.

“Could [the mortgage company] have assumed that Ellis, the man who had swindled his widowed mother, would have alerted it that the property he was mortgaging was the subject of a lawsuit, had he been served two days sooner? No, [the mortgage company] would have been best served to check courthouse records.”