Bayview Loan Servicing, L.L.C. v. Alex Solomon Family Ltd. Partnership ( 2011 )

[Cite as Bayview Loan Servicing, L.L.C. v. Alex Solomon Family Ltd. Partnership, 2011-Ohio-6168.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 96992
BAYVIEW LOAN SERVICING, LLC
PLAINTIFF-APPELLEE
vs.
THE ALEX SOLOMON FAMILY LIMITED
PARTNERSHIP, ET AL.
DEFENDANTS-APPELLANTS
JUDGMENT:
AFFIRMED
Civil Appeal from the
Cuyahoga County Common Pleas Court
Case No. CV-740983
BEFORE: E. Gallagher, J., Sweeney, P.J., and Keough, J.
RELEASED AND JOURNALIZED: December 1, 2011
2
ATTORNEYS FOR APPELLANTS
David M. Lynch
Meghan N. Seifert
29311 Euclid Avenue
Suite 200
Wickliffe, Ohio 44092
ATTORNEY FOR APPELLEE
Ted Humbert
Law Offices of John D. Clunk Co., L.P.A.
4500 Courthouse Blvd., Suite 400
Stow, Ohio 44224
EILEEN A. GALLAGHER, J.:
{¶ 1} Defendants-appellants, The Alex Solomon Family Limited Partnership,
Alex Solomon, and Georgette Solomon, appeal the trial court’s decision granting
summary judgment in favor of plaintiff-appellee, Bayview Loan Servicing, LLC.
Appellants argue that the trial court erred in granting Bayview’s motion because genuine
issues of material fact precluded summary judgment. For the reasons that follow, we
affirm.
{¶ 2} This case arises out of a promissory note (Exhibit A attached to Bayview’s
complaint), personal guaranty (Exhibit B attached to Bayview’s complaint), and a
mortgage and security agreement (Exhibit C attached to Bayview’s complaint), all of
3
which were entered into by the parties on August 3, 2005. Pursuant to the promissory
note, for value received, The Alex Solomon Family Limited Partnership agreed to pay
Bayview Financial Small Business Funding, LLC, the principal sum of $2,100,000 in
monthly payments through September 1, 2025 at an adjustable interest rate starting at
7.625 percent.1 As a condition of making the loan to the Partnership, Bayview required
individual guarantees on the promissory note’s payment obligations from appellants Alex
Solomon and Georgette Solomon.
{¶ 3} On December 3, 2008, the Partnership and Bayview entered into a
modification agreement of the promissory note which stated that, “[d]ue to adverse
economic circumstances, [the Partnership] has requested [Bayview] to adjust the
scheduled amortization of the Note to permit [the Partnership] to meet [the
Partnership’s] obligation to [Bayview] in a full and in a timely manner.” The
modification agreement further states, “[the Partnership] agrees that the unpaid principal
balance due on the Note of $1,982,658.32, shall be increased by $57,783.25, the amount
of the unpaid installments, interest, late charges, fees and costs, and if applicable, any
advances for unpaid property taxes and/or insurance premiums * * * for a total unpaid
principal balance due of $2,040,441.57.” The modification agreement altered the
monthly payments, set forth a new variable interest rate starting at 4 percent, and
1
Bayview Financial Small Business Funding, LLC subsequently assigned all
of its rights under the note and mortgage to Bayview Loan Servicing, LLC.
4
extended the maturity date of the loan to October 1, 2035.
{¶ 4} On November 9, 2010, Bayview filed a complaint in Cuyahoga County
Common Pleas Court alleging a default by the appellants on the loan and seeking the
unpaid sum of $1,967,769.58, foreclosure, and other equitable relief. On January 10,
2011, Bayview filed a motion for summary judgment against the Partnership as well as
Alex and Georgette Solomon, personally, pursuant to the personal guaranty.
{¶ 5} On March 31, 2011, appellants Alex and Georgette Solomon filed an
opposition to Bayview’s motion for summary judgment arguing that the modification
agreement severed any personal liability they might have on the loan because they did
not individually sign the modification agreement.
{¶ 6} Citing the terms of the personal guaranty executed by the appellants in
their individual capacity, the trial court issued a magistrate’s order on April 13, 2011
granting Bayview’s motion for summary judgment. 2 The magistrate issued a further
decision on April 20, 2011, which the trial court adopted on June 7, 2011, overruling
appellants’ objections. Appellants brought this appeal arguing in their sole assignment
of error that the trial court erred in granting summary judgment to Bayview.
{¶ 7} Our review of a trial court’s grant of summary judgment is de novo.
Grafton v. Ohio Edison Co. (1996), 77 Ohio St.3d 102, 105, 671 N.E.2d 241. Pursuant
2
The record does not reflect that the Partnership advanced any argument in
opposition to Bayview’s motion for summary judgment.
5
to Civ.R. 56(C), summary judgment is appropriate when (1) there is no genuine issue of
material fact, (2) the moving party is entitled to judgment as a matter of law, and (3)
reasonable minds can come to but one conclusion and that conclusion is adverse to the
nonmoving party, said party being entitled to have the evidence construed most strongly
in his favor. Horton v. Harwick Chem. Corp. (1995), 73 Ohio St.3d 679, 653 N.E.2d
1196, paragraph three of the syllabus; Zivich v. Mentor Soccer Club (1998), 82 Ohio
St.3d 367, 369-370, 696 N.E.2d 201. The party moving for summary judgment bears the
burden of showing that there is no genuine issue of material fact and that it is entitled to
judgment as a matter of law. Dresher v. Burt (1996), 75 Ohio St.3d 280, 292-293, 662
N.E.2d 264.
{¶ 8} Appellants’ sole argument is that a genuine issue of material fact exists as
to their personal liability on the loan because they did not individually sign the
modification agreement of the promissory note or execute a new personal guaranty in
regards to the modification agreement. In an affidavit attached to appellants’ reply to
Bayview’s motion for summary judgment, Alex Solomon averred, “[n]either myself, nor
my wife, Georgette, personally signed on the new loan agreement with Bayview Loan
Servicing, LLC and we do not intend to be held liable.”
{¶ 9} As the magistrate pointed out in his April 13, 2011 decision, appellants’
argument is contradicted by the explicit terms of the personal guaranty entered into by
the appellants in their individual capacities. The guaranty provides in relevant part:
6
“2. Guarantor hereby absolutely, unconditionally and irrevocably guarantees to
Lender the full and prompt performance and payment when due, whether
at maturity or earlier, by reason of acceleration or otherwise, * * * of all of
the following:
(a) The entire Debt (defined in Article 2 of the Security Instrument.)
(b) The payment and performance of all of Borrower’s obligations
under Article 2 of the Security Instrument.
***
6. At any time * * * without notice to Guarantor and without affecting the
liability of Guarantor, * * * (a) the time for payment of the principal of or
interest on the Debt may be extended or the Debt may be renewed in whole
or in part; * * * (d) the Note * * * may be modified or amended by Lender
and Borrower in any respect, including, but not limited to, an increase in
the principal amount;
***
13. * * * Neither this Guaranty nor any of its provisions may be waived,
modified, amended, discharged, or terminated except by an agreement in
writing signed by the party against which the enforcement of the waiver,
modification, amendment, discharge, or termination is sought, and then
only to the extent set forth in that agreement.”
{¶ 10} As appellants have offered no argument for the avoidance of the terms of
the guaranty which plainly provide for the appellants’ personal liability to persist despite
modifications to the promissory note between Bayview and the Partnership, we find no
error in the trial court’s decision to grant summary judgment in favor of Bayview.
{¶ 11} The judgment of the trial court is affirmed.
It is ordered that appellee recover from appellant costs herein taxed.
The court finds there were reasonable grounds for this appeal.
7
It is ordered that a special mandate be sent to said lower court to carry this
judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of
the Rules of Appellate Procedure.
EILEEN A. GALLAGHER, JUDGE
JAMES J. SWEENEY, P.J., and
KATHLEEN ANN KEOUGH, J., CONCUR