Ohio Supreme Court Holds Website Notice of Sheriff's Sale Does Not Satisfy Due Process

Foreclosure Mortgage Servicing

On September 6, the Supreme Court of Ohio held that notice of a sheriff's sale via the sheriff's website was insufficient to satisfy due process and reversed an appellate court decision that denied a foreclosing lender's motion to set aside the sheriff's sale. PHH Mortg. Corp. v. Prater, No. CA2010-12-095, WL 3848454 (Ohio Sept. 6, 2012). The lender obtained a motion for default judgment and permission to foreclose on a borrower. The sheriff's office tried multiple times to schedule a sale and each time withdrew the sale at the lender's request. The sheriff's office informed the lender in a letter that the sheriff's office no longer would send notices of scheduled sales via letter, and that the lender would need to check the sheriff's website for future notices. Notice subsequently was posted on the website and the property was sold. Both the trial court and intermediate appellate court denied the lender's request to set aside the sale. The lender argued that the sale was invalid because it had not received written notice. In a unanimous decision, the Ohio Supreme Court held that the notice directing the lender to check the sheriff's website was notice of a change in procedure and did not constitute actual notice of the sale. While the court acknowledged that Internet publication may conserve resources, it held that such notice is akin to newspaper notice and is insufficient to satisfy due process. The court agreed with a dissenting appellate court judge who identified e-mail notice as a closer substitute for mail notice, and explained that, in any event, such a change in notice requirements would have to be effectuated through a change to state or local law. The court reversed the appellate court's decision and set aside the sheriff's sale.