BAC Home Loans v. Jasnoch , 2011 Ohio 1179 ( 2011 )

[Cite as BAC Home Loans v. Jasnoch, 2011-Ohio-1179.]
STATE OF OHIO, MAHONING COUNTY
IN THE COURT OF APPEALS
SEVENTH DISTRICT
BAC HOME LOANS SERVICING, L.P., ) CASE NO. 10 MA 4
fka COUNTRYWIDE HOME LOANS )
SERVICING, LP )
)
PLAINTIFF-APPELLEE )
)
VS. ) OPINION
)
WHITNEY W. JASNOCH, et al. )
)
DEFENDANTS-APPELLANTS )
CHARACTER OF PROCEEDINGS: Civil Appeal from the Court of Common
Pleas of Mahoning County, Ohio
Case No. 09 CV 3276
JUDGMENT: Affirmed.
APPEARANCES:
For Plaintiff-Appellee: Atty. George J. Annos
Carlisle, McNellie, Rini, Kramer & Ulrich
24755 Chagrin Boulevard, #200
Cleveland, Ohio 44122
Atty. Margaret Koval
Assistant Law Director
26 S. Phelps Street
Youngstown, Ohio 44503
For Defendants-Appellants: Atty. Richard J. Thomas
Atty. Jeremy R. Teaberry
Henderson, Covington, Messenger,
Newman & Thomas Co., L.P.A.
6 Federal Plaza Central, Suite 1300
Youngstown, Ohio 44503
JUDGES:
Hon. Cheryl L. Waite
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Hon. Gene Donofrio
Hon. Joseph J. Vukovich
Dated: March 9, 2011
WAITE, P.J.
{1} Appellants, Whitney W. Jasnoch and Elizabeth A. Jasnoch, appeal the
judgment of foreclosure entered by the Mahoning County Court of Common Pleas on
December 10, 2009. Because Appellants failed to offer any evidence in support of
their fraud claim, the judgment of the trial court is affirmed.
{2} On June 27, 2003, Appellants borrowed $31,200.00 from Stoffer
Mortgage, Inc. in order to purchase a residence then located at 54 E. Ravenwood
Avenue, Youngstown, Ohio. Appellants executed a note secured by a mortgage on
the real property. The mortgage was conveyed to Mortgage Electronic Registration
Systems, Inc. (“MERS”), as nominee for Stoffer Mortgage, Inc.
{3} Stoffer Mortgage, Inc. endorsed the note to RBMG, Inc. on June 27,
2003. The note bears an undated blank endorsement from RBMG, Inc. Appellants
defaulted on the loan, with the last payment applied on April 1, 2007. MERS, as
nominee for Stoffer Mortgage Inc., assigned the note and mortgage to Countrywide
Home Loans, Inc. (“Countrywide”), by separate instrument dated January 3, 2008.
The assignment was recorded in Mahoning County on January 25, 2008.
Countrywide assigned the note and mortgage by separate instrument to Appellee,
BAC Home Loans Servicing, LP, fka Countrywide, on August 20, 2009. The
assignment was recorded in Mahoning County on September 1, 2009.
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{4} Appellee filed the complaint in this action on August 25, 2009.
Appellants filed their answer with leave of court on October 29, 2009. On that same
day, Appellee filed a motion for summary judgment. Attached to the motion for
summary judgment is the affidavit of David Perez, an assistant vice president of
Appellee. According to the affidavit, Appellee is in possession of the note. (Perez
Aff., ¶4.)
{5} Appellants responded to the motion for summary judgment on
November 12, 2009. In their response, they argued that Appellee was not the holder
of the note, and that the appraisal obtained during the loan application process was
fraudulent because at the time the response was filed, the auditor’s website valued
the Ravenwood property at only $7,200.00. Although the response states that the
information from the auditor’s website is attached, the copy in the record has no such
attachment. The parties agreed at oral argument that the 2009 valuation was
attached to the response brief. Based on the auditor’s valuation, Appellants claim
that “[t]he true value of the property at issue, assuming the appraisal is $31,200.00, is
433% lower than its appraised value.” (Response to Motion for Summary Judgment,
p. 2.) The 2009 valuation was the only evidence offered in support of the response
brief. At no time did Appellants request an extension of time to conduct discovery in
this case.
{6} The trial court entered the judgment of foreclosure on December 10,
2009. This timely appeal followed. On the same day that the notice of appeal was
filed, Appellants filed a motion to stay execution of the judgment in this case.
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Pursuant to an agreed judgment entry filed on February 12, 2010, the trial court
authorized Appellee to proceed with execution against the real property, but
prohibited Appellee from pursuing the personal judgment against Appellants until the
completion of this appeal.
{7} An appellate court conducts a de novo review of a trial court’s decision
to grant summary judgment, using the same standards as the trial court as set forth
in Civ.R. 56(C). Grafton v. Ohio Edison Co. (1996), 77 Ohio St.3d 102, 105, 671
N.E.2d 241. Before summary judgment can be granted, the trial court must
determine that (1) no genuine issue as to any material fact remains to be litigated, (2)
the moving party is entitled to judgment as a matter of law, and (3) it appears from
the evidence that reasonable minds can come to but one conclusion, and viewing the
evidence most favorably in favor of the party against whom the motion for summary
judgment is made, the conclusion is adverse to that party. Temple v. Wean United,
Inc. (1977), 50 Ohio St.2d 317, 327, 364 N.E.2d 267. When a court considers a
motion for summary judgment, the facts must be taken in the light most favorable to
the nonmoving party. Id.{8} “[T]he moving party bears the initial responsibility of informing the trial
court of the basis for the motion, and identifying those portions of the record which
demonstrate the absence of a genuine issue of fact on a material element of the
nonmoving party's claim.” (Emphasis sic.) Dresher v. Burt (1996), 75 Ohio St.3d
280, 296, 662 N.E.2d 264. If the moving party carries its burden, the nonmoving
party has the reciprocal burden of setting forth specific facts showing that there is a
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genuine issue for trial. Id. at 293, 662 N.E.2d 264. In other words, in the face of a
properly supported motion for summary judgment, the nonmoving party must produce
some evidence that suggests that a reasonable factfinder could rule in that party’s
favor. Brewer v. Cleveland Bd. of Edn. (1997), 122 Ohio App.3d 378, 386, 701
N.E.2d 1023.
{9} “The elements of fraud are:
{10} “(a) a representation or, where there is a duty to disclose, concealment
of a fact,
{11} “(b) which is material to the transaction at hand,
{12} “(c) made falsely, with knowledge of its falsity, or with such utter
disregard and recklessness as to whether it is true or false that knowledge may be
inferred,
{13} “(d) with the intent of misleading another into relying upon it,
{14} “(e) justifiable reliance upon the representation or concealment, and “
{15} “(f) a resulting injury proximately caused by the reliance.” Burr v. Stark
Cty. Bd. of Commrs. (1986), 23 Ohio St.3d 69, 491 N.E.2d 1101, paragraph two of
the syllabus.
{16} Fraud must be shown by clear and convincing evidence. Mathe v.
Fowler (1983), 13 Ohio App.3d 273, 275, 469 N.E.2d 89.
ASSIGNMENT OF ERROR
{17} “The lower court erred by granting Appellee BAC Home Loans
Servicing, LP’s Motion for Summary Judgment.”
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{18} Appellants contend that Appellee violated R.C. 1322.07. Ohio’s
Mortgage Broker Registration Act, codified in R.C. Chapter 1322, prohibits a
mortgage broker from engaging in conduct that constitutes “improper, fraudulent, or
dishonest dealings,” and “[k]nowingly mak[ing] * * * fraudulent, false, or misleading
statements on any mortgage loan document or on any document related to a
mortgage loan * * * .” R.C. 1322.07(C) and (E). Appellants raise this statutory
violation for the first time on appeal. They raised bare allegations of fraud without
any reference to R.C. 1322.07 in their response to the motion for summary judgment.
{19} A review of the record in this matter reveals no evidence of fraud, here.
At oral argument, Appellants relied exclusively on the appraisal, which was not made
a part of the record, and the 2009 auditor’s valuation to demonstrate fraud. However,
the 2009 valuation, without more, is not sufficient to create a genuine issue of
material fact in light of the fact that the mortgage was entered some six years earlier.
Again, the record is silent as to any evidence that the property was not worth the
mortgage amount at the time the mortgage was entered.
{20} In the alternative, Appellants argue that they did not have the
opportunity to conduct discovery because the summary judgment motion was filed
the same day they filed their answer. Appellants contend that, even if they filed a
discovery request for a copy of the appraisal from Appellee, “there is no guarantee
that Appellee’s responses would have been received before the trial court granted
Appellee’s motion.” (Reply Brf., p. 1.)
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{21} After a properly supported motion for summary judgment was filed,
Appellants had a reciprocal burden to produce evidence that a genuine issue of
material fact exists to preclude summary judgment. Appellants admit they never
even attempted to file a motion for an extension of time to respond to the motion for
summary judgment nor did they file a motion to conduct discovery. Because no such
motions were filed, the trial court was not put on notice that Appellants needed
additional time to file a properly supported response.
{22} Even assuming that Appellants had offered the 2003 appraisal into
evidence, and shown that the appraisal was fraudulent, a violation of the Mortgage
Broker Registration Act is not a defense to a foreclosure claim. The Act imposes civil
liability on brokers who violate its provisions. However, nothing in the civil
enforcement or penalties sections indicate that a violation of the act constitutes a
defense in a foreclosure action. Further, any action for damages under the Act would
lie against Stoffer Mortgage, Inc., not Appellee.
{23} Based on this record, there is no evidence of fraud, and to the extent
that Appellants assert a violation of the Mortgage Broker Registration Act, the
statutory violation is not a defense to this foreclosure action. Accordingly, Appellants’
sole assignment of error is overruled and the judgment of the trial court is affirmed.
Donofrio, J., concurs.
Vukovich, J., concurs.