U.S. Bank v. Hill ( 2018 )

[Cite as U.S. Bank v. Hill, 2018-Ohio-4532.]
IN THE COURT OF APPEALS OF OHIO
SIXTH APPELLATE DISTRICT
OTTAWA COUNTY
U.S. Bank N.A., as Trustee, on behalf Court of Appeals No. OT-17-029
of the holders of the J.P. Morgan Mortgage
Acquisition Trust 2006-CH2, Asset Backed Trial Court No. 2016-CV-E-117
Pass-Through Certificates, Series 2006-CH2
Appellees
v.
Marilyn L. Hill, et al. DECISION AND JUDGMENT
Appellant Decided: November 9, 2018
*****
David A. Wallace and Karen M. Cadieux, for appellees.
Grace M. Doberdruk, for appellant.
*****
OSOWIK, J.
{¶ 1} This is an appeal from a judgment of the Ottawa County Court of Common
Pleas which granted appellee’s motion for summary judgment. For the reasons set forth
below, this court affirms the judgment of the trial court.
{¶ 2} The following facts are relevant to this appeal. On April 17, 2006,
defendant-appellant, Marilyn Hill (hereafter “Hill”), and her late husband, obtained a
$52,600 loan from Chase Bank USA, N.A. and signed a note promising to repay the loan.
The promissory note was secured by a mortgage, filed in the public record on May 1,
2006, in favor of Chase Bank USA, N.A. on real property used as a second home located
in Ottawa County, Ohio. Chase Bank USA, N.A. indorsed the promissory note in blank.
{¶ 3} Following the death of Hill’s husband, Chase Home Finance, LLC, as
servicer of the promissory note holder on October 5, 2008, entered into a loan
modification agreement with Hill. The promissory note was modified as set forth in the
loan modification agreement.
{¶ 4} In February 2009, plaintiff-appellee, “U.S. Bank N.A., as trustee, on behalf
of the holders of the J.P. Morgan Mortgage Acquisition Trust 2006-CH2 Asset Backed
Pass-Through Certificates, Series 2006-CH2” (hereafter “U.S. Bank”) filed a complaint
seeking judgment on the promissory note, as modified, and foreclosure on the mortgage
securing the note. U.S. Bank voluntarily dismissed the complaint in March 2009.
{¶ 5} On March 2, 2009, Chase Bank USA, N.A. assigned the mortgage to “U.S.
Bank National Association, as Trustee for J.P. Morgan Mortgage Acquisition Trust 2006-
CH2, Asset Backed Pass-Through Certificates, Series 2006-CH2.”
{¶ 6} In February 2011, U.S. Bank filed a second complaint seeking judgment on
the promissory note, as modified, and foreclosure on the mortgage securing the note.
2.
Thereafter, U.S. Bank and Hill entered into a settlement agreement dated April 11, 2013,
and U.S. Bank stipulated to dismiss the complaint in May 2013.
{¶ 7} In September 2013, U.S. Bank filed a third complaint seeking judgment on
the promissory note, as modified, and foreclosure on a mortgage securing the note. Hill
counterclaimed. Following a period of pre-trial litigation, U.S. Bank and Hill each
voluntarily dismissed their claims against each other in October 2014.
{¶ 8} On November 13, 2015, the 2009 mortgage assignee filed in the public
record a “Corporate Assignment of Mortgage” in favor of U.S. Bank.
{¶ 9} On April 25, 2016, U.S. Bank filed a fourth complaint seeking judgment on
the promissory note, as modified, and foreclosure on the mortgage securing the note,
declaratory judgment and other equitable relief against Hill and other defendants who are
not parties to this appeal. Hill generally denied the allegations and counter-claimed for
bad faith breach of settlement agreement and fraudulent inducement to enter into
settlement agreement. Following a period of discovery by the parties, on July 14, 2017,
U.S. Bank filed a motion for summary judgment on the complaint and on Hill’s
counterclaims, which Hill opposed. On September 6, 2017, the trial court granted U.S.
Bank’s motion stating:
In the present case, [Hill] failed to make payments pursuant to the
[s]ettlement [a]greement. There is no requirement in the settlement
agreement that statements be sent to [Hill]. There is no evidence that [U.S.
Bank] breached the contract and no evidence that [Hill] was fraudulently
3.
induced. There are no material facts yet to be litigated and [U.S. Bank] is
entitled to judgment as a matter of law on its complaint and on [Hill’s]
counterclaim. It is therefore ORDERED, ADJUDGED and DECREED
that [U.S. Bank’s] Motion for Summary Judgment is GRANTED.
(Emphasis sic.) [U.S. Bank] shall submit a further Judgment Entry to
effectuate this Decision.
{¶ 10} On October 3, 2017, the trial court entered a judgment entry and decree in
foreclosure in favor of U.S. Bank and incorporated by reference the September 6, 2017
decision and order. The October 3, 2017 judgment entry included the following orders:
(1) judgment in favor of U.S. Bank due and owing under the note for the amounts stated
in the affidavit attached to the summary judgment motion, (2) the acknowledgment
clause of the mortgage substantially complied with R.C. 5301.01(A), (3) the mortgage
was valid and enforceable by U.S. Bank, as the assignee, (4) reformation of the mortgage
to reflect that Hill and her late husband were married at the time they executed the
mortgage, (5) Hill had broken the conditions of the mortgage, and (6) U.S. Bank was
entitled to have the equity of redemption of Hill in and to the premises foreclosed and to
recover the amounts due and owing under the note out of the proceeds of the foreclosure
sale. No findings were made for any other sums due and owing for other liens, such as
appellee’s advances for taxes, “and continues same until the confirmation of sale.” The
entry concluded “there is no just reason for delay in entering this judgment.”
4.
{¶ 11} Hill then filed this appeal on October 20, 2017, setting forth four
assignments of error:
I. The trial court erred or committed plain error when it granted a
judgment of foreclosure because material issues of fact remained on
possession and appearance of the original note and the appellee’s affidavits
were deficient.
II. The trial court erred by granting summary judgment on appellant
Marilyn Hill’s counterclaims because material issues of fact remained for
trial.
III. The trial court erred by granting a declaratory judgment and
reformation.
IV. The trial court erred by granting a judgment of foreclosure when
Ottawa County Local Rule 26.02 was not complied with.
{¶ 12} We will address the first and second assignments of error together because
they collectively challenge the trial court’s September 6, 2017 summary judgment
decision. The third and fourth assignments of error will be reviewed together as they
collectively challenge the trial court’s October 3, 2017 decree in foreclosure.
A. Summary Judgment
{¶ 13} In support of her first and second assignments of error, Hill argued the trial
court erred when it granted appellee’s summary judgment motion because of the
existence of material issues of fact necessitating a trial. Hill argued multiple material
5.
issues of fact existed with respect U.S. Bank’s complaint and her counterclaims for
breach of contract and fraudulent inducement, including U.S. Bank’s standing to litigate
the foreclosure and the adequacy of the Civ.R. 56 evidence proffered by U.S. Bank.
{¶ 14} In response U.S. Bank argued the trial court properly granted its summary
judgment motion because there were no material issues of fact necessitating a trial. U.S.
Bank argued its standing was clearly established, and the affidavits and other evidence
properly supported its motion for summary judgment on both the complaint and Hill’s
counterclaims. U.S. Bank further argued it was entitled to judgment as a matter of law
because it met its burden for summary judgment purposes and Hill failed to meet her
burdens to withstand summary judgment.
{¶ 15} Our review of trial court summary judgment determinations is de novo,
employing the same Civ.R. 56 standard as trial courts. Levy v. Huener, 6th Dist. Lucas
No. L-17-1081, 2018-Ohio-119, ¶ 11, citing Grafton v. Ohio Edison Co., 77 Ohio St.3d
102, 105, 671 N.E.2d 241 (1996).
{¶ 16} According to Civ.R. 56(C), summary judgment may be granted only:
if the pleadings, depositions, answers to interrogatories, written
admissions, affidavits, transcripts of evidence, and written stipulations of
fact, if any, timely filed in the action, show that there is no genuine issue as
to any material fact and that the moving party is entitled to judgment as a
matter of law *** [and] that reasonable minds can come to but one
conclusion and that conclusion is adverse to the party against whom the
6.
motion for summary judgment is made, that party being entitled to have the
evidence or stipulation construed most strongly in the party’s favor.
{¶ 17} When seeking summary judgment, a party must specifically delineate the
basis upon which the motion is brought and identify those portions of the record that
demonstrate the absence of a genuine issue of material fact. Levy at ¶ 12, citing Dresher
v. Burt, 75 Ohio St.3d 280, 293, 662 N.E.2d 264 (1996).
Supporting and opposing affidavits shall be made on personal
knowledge, shall set forth such facts as would be admissible evidence, and
shall show affirmatively that the affiant is competent to testify to the
matters stated in the affidavit. Sworn or certified copies of all papers or
parts of papers referred to in an affidavit shall be attached to or served with
the affidavit.
Civ.R. 56(E). When a properly supported motion for summary judgment is made, an
adverse party may not rest on mere allegations or denials in the pleadings, but must
respond with specific facts showing that there is a genuine issue of material fact for trial.
Id.{¶ 18} A material fact is one which would affect the outcome of the suit under the
applicable substantive law. Levy at ¶ 12, citing Russell v. Interim Personnel, Inc., 135
Ohio App.3d 301, 304, 733 N.E.2d 1186 (6th Dist.1999). To determine if a genuine issue
exists, we inquire whether the evidence in dispute is sufficient to require submission to a
7.
jury or whether it is so one-sided that one party must prevail as a matter of law. Wall v.
Firelands Radiology, 106 Ohio App.3d 313, 322-323, 666 N.E.2d 235 (6th Dist.1995).
{¶ 19} This court has held:
To properly support a motion for summary judgment in a foreclosure
action, a plaintiff must present evidentiary-quality material showing: (1) the
movant is the holder of the note and mortgage, or is a party entitled to
enforce the instrument; (2) if the mover is not the original mortgagee, the
chain of assignments and transfers; (3) the mortgager [sic] is in default; (4)
all conditions precedent have been met; and (5) the amount of principal and
interest due.
U.S. Bank Trust, N.A. v. Edmon, 6th Dist. Erie No. E-17-048, 2018-Ohio-2987, ¶ 27,
citing U.S. Bank, N.A. v. Coffey, 6th Dist. Erie No. E-11-026, 2012-Ohio-721, ¶ 26.
{¶ 20} We reviewed the record de novo and found U.S. Bank’s motion for
summary judgment complied with Civ.R. 56.
{¶ 21} First, U.S. Bank provided evidence it was the holder of the note and
mortgage, or was a party entitled to enforce the instruments. U.S. Bank pointed to
evidence of its standing at the time of the April 25, 2016 complaint “based on an interest
in both the Note and the Mortgage,” arguing an interest in only one is necessary. U.S.
Bank cited as authority this court’s decision in Bank of New York Mellon v. Matthews,
6th Dist. Fulton No. F-12-008, 2013-Ohio-1707, ¶ 11, quoting Fed. Home Loan Mtge.
Corp. v. Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017, 979 N.E.2d 1214, ¶ 28.
8.
However, thereafter the Ohio Supreme Court clarified it was not specifying the
documents necessary to establish standing due to the particular facts of each case,
Deutsche Bank Natl. Trust Co. v. Holden, 147 Ohio St.3d 85, 2016-Ohio-4603, 60 N.E.3d
1243, ¶ 30-31, and reiterated “the fundamental requirement of standing is that the party
bringing the action must have a personal stake in the outcome of the controversy, i.e., that
it must be the injured party.” Id. at ¶ 32, quoting Schwartzwald at ¶ 21. After filing the
complaint in foreclosure U.S. Bank was permitted to prove thereafter it was the holder of
the note or mortgage on or prior to the April 25, 2016 complaint. Wells Fargo Bank, N.A.
v. Horn, 142 Ohio St.3d 416, 2015-Ohio-1484, 31 N.E.3d 637, ¶ 12, citing United States
Bank Natl. Assn. v. Mitchell, 6th Dist. Sandusky No. S-10-043, 2012-Ohio-3732, ¶ 17-18.
The record shows U.S. Bank attached to its July 14, 2017 motion for summary judgment
evidence of the chain of custody of the indebtedness of Hill to U.S. Bank.
{¶ 22} Exhibit C to U.S. Bank’s motion was an affidavit from U.S. Bank’s outside
attorney, Kathleen Nitschke. Ms. Nitschke averred from personal knowledge that her law
firm had represented U.S. Bank since 2011 in foreclosure actions regarding the April 17,
2006 promissory note by borrowers, Hill and her late husband, to lender, Chase Bank
USA, N.A., in the original principal amount of $52,600. Ms. Nitschke averred that since
October 2012 her law firm had physical possession of the “original blue-ink Note,” and
“[a]ffixed to the original blue-ink note is an Allonge, which contains in-blank
endorsement signed by a representative of Chase Bank USA, N.A.” Ms. Nitschke
averred that on or about October 20, 2012, and again on or about the date of her affidavit
9.
on July 13, 2017, she personally reviewed the original promissory note and confirmed
each time it contained the original signatures by Hill and her late husband. The “Allonge
to Mortgage Note” was executed by “Monica Collins/Assistant Secretary, Authorized
Officer” for Chase Bank USA, N.A., as seller, and was indorsed with the words, “Pay to
the order of,” followed by a blank space and without recourse. True and accurate copies
of all documents averred in the affidavit were attached to the affidavit. Bank of Am., N.A.
v. Hafford, 6th Dist. Sandusky No. S-13-021, 2014-Ohio-739, ¶ 15, citing Civ.R.
10(D)(1). The April 17, 2006 promissory note specifically states: “[The borrowers]
understand that the Lender may transfer this Note. The Lender or anyone who takes this
Note by transfer and who is entitled to receive payment under this Note is called the
‘Note Holder.’”
{¶ 23} U.S. Bank argued “the use of an abbreviation in one [2015 corporate
assignment of mortgage, motion for summary judgment, Weinberger affidavit], and the
spelled-out name in the other [2009 assignment of mortgage and Nitschke affidavit], does
not reflect the existence of two different Trustees or change the Trust’s ownership of the
Note.” U.S. Bank cited as authority U.S. Bank, Natl. Assn. v. Smith, 7th Dist. Mahoning
No. 17 MA 0093, 2018-Ohio-2489, ¶ 34. We agree. U.S. Bank is the real party in
interest. Civ.R. 17(A). Moreover, the precise wording of U.S. Bank in the plaintiff
caption of the complaint is not generally dispositive of determining the real party in
interest because such determinations are to be made upon the merits of the allegations in
the body of the complaint. Civ.R. 10(A); State ex rel. Crossman Communities of Ohio v.
10.
Greene Cty. Bd. of Elections, 87 Ohio St.3d 132, 135, 717 N.E.2d 1091 (1999) (“The
spirit of our * * * Rules of Civil Procedure, is the resolution of cases upon their merits
rather than claimed pleading deficiencies[.]”). Further, any errors pointed out by Hill
regarding the word “trustee” as capitalized or not in U.S. Bank’s pleadings is harmless
error. Civ.R. 61.
{¶ 24} We find U.S. Bank identified those portions of the record that demonstrated
an absence of a genuine issue of material fact it is the holder of the note and mortgage, or
is a party entitled to enforce the instrument. Bank of New York Mellon v. Lewis, 6th Dist.
Erie No. E-13-051, 2014-Ohio-5599, ¶ 40-43. We find that on or before April 25, 2016,
U.S. Bank was the “Note Holder” under the terms of the note and the allonge to the note
with a blank indorsement and was entitled to enforce the note. R.C. 1303.25(B);
1301.201(B)(21)(a); 1303.31(A)(1). “‘An allonge is defined as “[a] slip of paper
sometimes attached to a negotiable instrument for the purpose of receiving further
indorsements when the original paper is filled with indorsements.”’” Deutsche Bank
Trust Co. v. Jones, 8th Dist. Cuyahoga No. 105778, 2018-Ohio-587, ¶ 26, quoting HSBC
Bank USA, N.A. v. Thompson, 2d Dist. Montgomery No. 23761, 2010-Ohio-4158, ¶ 56.
An undated allonge is valid. Id. at ¶ 27, citing Wells Fargo Bank, N.A. v. Byers, 10th
Dist. Franklin No. 13AP-767, 2014-Ohio-3303, ¶ 21.
{¶ 25} Second, U.S. Bank provided evidence of the chain of assignments and
transfers of the mortgage in real property, which secured Hill’s promissory note. Exhibit
B to U.S. Bank’s motion was an affidavit dated July 12, 2017, from a representative of
11.
U.S. Bank’s mortgage servicer Select Portfolio Servicing, Inc. (“SPS”). Diane
Weinberger, a document control officer of SPS. Ms. Weinberger averred from personal
knowledge and personal review that the business records created and maintained by SPS
with respect to Hill’s loan and mortgage included the business records created and
maintained “by prior servicers, including Chase Home Finance, LLC and JP Morgan
Chase.” Effective October 1, 2013, SPS obtained the mortgage servicing rights. Ms.
Weinberger averred:
The entries in these records are made at the time of the events and
conditions they describe, either by people with first-hand knowledge of
those events and conditions, or from information provided by people with
such first-hand knowledge. SPS records this information, and maintains
these loan records, as a routine practice of SPS’s regularly conducted
business activities.
True and accurate copies of all documents averred in the affidavit, including the 2006
promissory note and mortgage, the allonge, the 2008 loan modification agreement, the
2009 mortgage assignment, and the 2015 corporate mortgage assignment were attached
to the affidavit. Ms. Weinberger’s affidavit laid the foundation for admissibility of the
loan records as business records under Evid.R. 803(6). HSBC Bank USA, N.A. v. Takats,
6th Dist. Lucas No. L-14-1155, 2015-Ohio-3077, ¶ 19, citing Lewis, 6th Dist. Erie No. E-
13-051, 2014-Ohio-5599, at ¶ 13-15.
12.
{¶ 26} We find U.S. Bank identified those portions of the record that demonstrated
an absence of a genuine issue of material fact of the chain of origination and assignment
of the mortgage in real property, which secured Hill’s promissory note. We find that on
or before April 25, 2016, U.S. Bank was the mortgagee assignee entitled to enforce the
terms of the mortgage, which mortgagor Hill entered into in 2006 to secure her
obligations under the promissory note. R.C. 5301.01(A); 5301.07(B); 5301.28; 5301.32;
5302.12.
{¶ 27} Third, U.S. Bank provided evidence Hill was in default. U.S. Bank pointed
to Ms. Weinberger’s affidavit as evidence of Hill’s default under the 2006 promissory
note, as modified. Monthly payments under the April 17, 2006 note were $564.93, due
on the 20th of each month starting May 20, 2006. Monthly payments under the October
5, 2008 loan modification agreement were $499.54, due on the 20th of each month
starting October 20, 2008. Finally, monthly payments under the April 11, 2013
settlement agreement were $499.54, due on the 1st of each month starting April 1, 2013.
Ms. Weinberger averred that as of July 12, 2017, she reviewed Hill’s payment history for
the loan, and the payment history “reflects that Hill made no payments after [entering
into the settlement agreement] and the loan went into default. Hill has remained in
default since that time.” True and accurate copies of all documents averred in the
affidavit were attached to the affidavit.
{¶ 28} U.S. Bank also pointed to Hills’ April 10, 2017 deposition as evidence of
Hill’s understanding of her obligation to repay the loan and her default status.
13.
Q: You and your husband fully intended to pay the loan back[?]
A: Yes.
***
Q: Your understanding [under the settlement agreement] was that
you were going to commence making your monthly payments on April 1,
2013, right?
A: Yes.
***
Q: What did you talk to SPS about on October 10th of 2013?
A: I guess, a reinstatement quote.
{¶ 29} Hill testified at her deposition she received the reinstatement quote from
SPS dated October 10, 2013. Hill also admitted during her deposition to receiving SPS
monthly statements dated from October 14, 2013, to September 2, 2016, showing the
specific amount to be paid, $650.89, and the payment address. Hill also averred in her
affidavit attached to her August 31, 2017 opposition to summary judgment that she
received her first mortgage statement dated October 14, 2013. Despite receiving the
monthly statements she requested, Hill did not remit any payments for the nearly three
years leading up to the April 25, 2016 foreclosure complaint. Hill’s reliance on the
absence of a “time is of the essence” phrase in the promissory note is misplaced because
her failure to abide by the fixed times of performance to pay U.S. Bank on the loan was
far beyond any reasonable cure period under the circumstances. See Lake Ridge
14.
Academy v. Carney, 66 Ohio St.3d 376, 378-379, 613 N.E.2d 183 (1993); see also United
States Constr. Corp. v. Harbor Bay Estates, Ltd., 172 Ohio App.3d 609, 2007-Ohio-
3823, 876 N.E.2d 637, ¶ 39 (6th Dist.).
{¶ 30} We find U.S. Bank identified those portions of the record that demonstrated
an absence of a genuine issue of material fact that on or before April 25, 2016, Hill was
in default under the promissory note, as modified. See R.C. 1301.201(B)(17).
{¶ 31} Fourth, U.S. Bank provided evidence that all conditions precedent under
the promissory note and mortgage were met. U.S. Bank pointed to Ms. Weinberger’s
affidavit as evidence of Hill’s failure to cure her default. Ms. Weinberger averred on
May 5, 2015, SPS mailed a “Notice of Default – Right to Cure letters” to Hill at her
residence and the real property subject to the mortgage. Ms. Weinberger further averred:
The notice informed Hill that the loan was due for the March 20,
2013 payment and was in default, stated the amount needed to be paid to
cure the default within 30 days of the letter, and provided other information
required by the Note and Mortgage. * * * Based on the payment history, the
default has not been cured. Thus, the balance due and owing on the loan
has been accelerated pursuant to the terms and conditions of the Note and
Mortgage. All requirements under the Note and Mortgage necessary to
accelerate the loan have been met. All conditions precedent under the Note
and Mortgage have been satisfied by the mailing of the notice of default.
15.
True and accurate copies of all documents averred in the affidavit were attached to the
affidavit.
{¶ 32} We find the 2006 promissory note contained in the record states Hill’s
agreement that, “If I do not pay the full amount of each monthly payment on the date it is
due, I will be in default.” Hill further agreed in the promissory note:
If I am in default, the Note Holder may send me a written notice
telling me that if I do not pay the overdue amount by a certain date, the
Note Holder may require me to pay immediately the full amount of
principal which has not been paid and all the interest that I owe on that
amount. That date must be at least 30 days after the date on which the
notice is delivered or mailed to me.
The May 2015 notice, also in the record, itemized an “amount to Cure” of $17,624.95
with a cure date of June 4, 2015, which is consistent with the terms of the promissory
note.
{¶ 33} U.S. Bank also pointed to Hills’ April 10, 2017 deposition as evidence of
the notice of default and Hill’s right to cure.
Q: Did you receive a letter in May of 2015 from SPS, giving you
notice that there was a default under the note and mortgage and that they’re
providing you information that you had the right to cure it?
A: Yes.
16.
{¶ 34} We find U.S. Bank identified those portions of the record that demonstrated
an absence of a genuine issue of material fact that all conditions precedent under the
promissory note and mortgage were met. We find that on or before April 25, 2016, Hill
received notice of default under the promissory note and mortgage and failed to cure the
default. Lewis, 6th Dist. Erie No. E-13-051, 2014-Ohio-5599, at ¶ 32.
{¶ 35} Fifth, U.S. Bank provided evidence of the amount of principal and interest
due. U.S. Bank pointed to Ms. Weinberger’s July 12, 2017 affidavit to evidence the
damages owed by Hill as “the principal balance of $37,705.86, plus interest at the rate of
6.625% per annum from February 20, 2013, plus late charges, and advances, for taxes,
insurance and property protection, and other costs and fees.” True and accurate copies of
all documents averred in the affidavit were attached to the affidavit.
{¶ 36} We find U.S. Bank identified those portions of the record that demonstrated
an absence of a genuine issue of material fact of the amount of the principal and interest
due. Lewis at ¶ 61.
{¶ 37} Having found U.S. Bank’s motion for summary judgment complied with
Civ.R. 56, Hill then had the burden to respond with specificity showing where in the
record there was a genuine issue of material fact requiring a trial. Civ.R. 56(E). Hill
“may not rest on mere allegations or denials in the pleadings.” Id. Hill argued a number
of genuine issues of material fact existed to defeat U.S. Bank’s motion for summary
judgment.
17.
{¶ 38} Hill pointed to U.S. Bank’s summary judgment motion as evidence of a
genuine question of material fact as to whether U.S. Bank “is the holder of the
promissory note.” Hill argued the February 29, 2016 SPS letter threatening foreclosure
contains the admission that U.S. Bank “is unable to find the promissory note and will
seek to prove the promissory note using a lost note affidavit.” Hill then points out Ms.
Nitschke’s affidavit was not for a lost note, but, instead, about “her firm has been in the
possession of the original promissory note since 2012.” Hill further argued a genuine
issue of material fact of whether U.S. Bank is, in fact, the holder of the note exists
because “nowhere does Ms. Nitschke state that she has been an attorney or agent for U.S.
Bank or its current servicer, SPS, during the pendency of this case.” Hill further pointed
to Ms. Weinberger’s affidavit as evidence she only received a copy of the note provided
to her by “outside litigation counsel” and failed to state anywhere “that U.S. Bank has
possession of the original promissory note, directly or through an agent.” Hill argued that
U.S. Bank’s “own evidence states that [the] promissory note is in the hands of the lawyer
for its previous, dismissed servicer” could lead a reasonable mind to conclude neither
U.S. Bank nor its agent “has had possession of the promissory note now or at any time
during the pendency of this action.”
{¶ 39} We find Hill fails to show the existence of facts that are both genuine and
material. Hill does not raise evidence of a genuine issue in dispute to require submission
to a jury. Nor does Hill raise evidence of a material fact which would affect the outcome
under applicable law. Contrary to Hill’s assertion, U.S. Bank was not required to first
18.
evidence a “lost note” prior to evidencing it is the holder of the note and mortgage, or is a
party entitled to enforce the instrument. Hill does not provide any evidence, other than
speculation, contradicting Ms. Nitschke’s averment from personal knowledge that her
law firm has represented U.S. Bank since 2011 in foreclosure actions regarding the April
17, 2006 promissory note or that since October 2012 her law firm had physical
possession of the original promissory note. Lewis, 6th Dist. Erie No. E-13-051, 2014-
Ohio-5599, at ¶ 15.
{¶ 40} Hill also argued the note was not properly authenticated by any affidavits
“because the top of Page 1 of the note was missing.” We find this argument lacks merit
for two reasons. First, Hill failed to raise this argument at the trial court level in her
opposition to U.S. Bank’s summary judgment motion, so the trial court did not have the
opportunity to first decide the matter. Dzina v. Celebrezze, 108 Ohio St.3d 385, 2006-
Ohio-1195, 843 N.E.2d 1202, ¶ 16, citing Hardy v. McFaul, 103 Ohio St.3d 408, 2004-
Ohio-5467, 816 N.E.2d 248, ¶ 9. Second, even if Hill had raised this argument before the
trial court, the record contains the affidavits of both Ms. Weinberger and Ms. Ms.
Nitschke, as exhibits B and C, respectively, to U.S. Bank’s motion for summary
judgment. Each affidavit attached a “true and accurate copy of the” note, which contains
the top of “Page 1 of 2” beginning with the title, “NOTE.” The top of page 1 is,
therefore, in the record.
{¶ 41} Hill also challenges the validity of the mortgage because the marital status
of Hill and her late husband is not specified. R.C. 5301.04. This court has held that a
19.
genuine issue of material fact does not exist where there is substantial compliance with
R.C. 5301.01. Huntington Natl. Bank v. Kazmaier, 175 Ohio App.3d 130, 2008-Ohio-
603, 885 N.E.2d 314, ¶ 23 (6th Dist.), citing Burgos v. Areway, Inc., 114 Ohio App.3d
380, 383, 683 N.E.2d 345 (8th Dist.1996) and Mid-American Natl. Bank & Trust Co. v.
Gymnastics Internat'l, Inc., 6 Ohio App.3d 11, 13, 451 N.E.2d 1243 (6th Dist.1982). The
record contains the mortgage at issue, and we find substantial compliance with R.C.
5301.04. The borrower names, Marilyn L. Hill and Gerald J. Hill, and their signatures
match both the first and signature pages of the mortgage. Their individual signatures
were duly acknowledged by a notary public. In the absence of fraud for the omission of
their status in 2006 as husband and wife, which Hill does not allege, any defect in the
execution of the mortgage in 2006 remains valid between the parties. Lasalle Bank N.A.
v. Zapata, 184 Ohio App.3d 571, 2009-Ohio-3200, 921 N.E.2d 1072, ¶ 21 (6th Dist.). As
the mortgagee assignee, U.S. Bank succeeded to all the rights of the original mortgagee.
Id.{¶ 42} Hill also pointed to the 2013 settlement agreement itself as evidence of a
number of genuine questions of material fact.
{¶ 43} Hill argued the settlement agreement failed to contain the “key terms” of
“what is the total payment due each month” and “where should the payment be mailed.”
In light of these omissions, Hill argued for the settlement agreement to have “legal effect
* * * it must contain the implication that U.S. Bank would, in the customary manner,
inform Mrs. Hill of how much she must pay and where she must pay it.”
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{¶ 44} We find Hill fails to show the existence of facts that are both genuine and
material. We do not find the settlement agreement signed by Hill on April 11, 2013, is
missing instructions about payment amounts and methods to render it lacking “legal
effect.” Section 1 of settlement agreement between Hill and “JPMorgan Chase As
Attorney In Fact for U.S. Bank National Association, As Trustee for JP Morgan
Mortgage Acquisition Trust 2006-Ch2, Asset Backed Pass-Through Certificates, Series
2006-Ch2” states in exchange for Chase forgiving $27,651.99 of Hill’s arrearages under
the loan, “Hill agrees to resume monthly mortgage payments pursuant to the terms of the
Modification [Agreement] on April 1, 2013. Such payment shall be in the amount of
$499.54, principal and interest plus amounts due for taxes and insurance * * *.”
{¶ 45} The record also contains the modification agreement dated October 20,
2008, and referenced in Section 1 of the settlement agreement. The modification
agreement states, “Effective October 20, 2008, the monthly principal and interest
payment will be $499.54. The principal and interest payment does not include any
amount for the payment of taxes and/or insurance.” We find the same monthly payment
obligation by Hill of $499.54 plus taxes and insurance that was in effect since October
20, 2008, was due on April 1, 2013. The record also contains the underlying note dated
April 17, 2006, and entered into by Hill and her late husband and referenced by the
settlement agreement as evidence of the “Loan.” The promissory note states in Section 3
that monthly payments are to be made at “P.O. Box 78828, Phoenix, AZ 65062-8828 or
at a different place if required by the Note Holder.” The “Note Holder” is defined as
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“The Lender or anyone who takes this Note by transfer and who is entitled to receive
payments under this Note.”
{¶ 46} Hill argued U.S. Bank breached the implied custom of “the sending of the
universally-accepted monthly statement containing payment amounts and instructions.”
Hill urged us to find U.S. Bank’s failure to send monthly statements with payment
information was “required by the implied duty for the parties to act in good faith and deal
fairly towards each other.” Hill does not point to an applicable law to support her
“universally-accepted” claim of a “custom” of monthly mortgage payment statements as
a condition precedent to her payment obligations under the settlement agreement.
{¶ 47} Contrary to Hill’s assertions, we do not find the settlement agreement
omitted any implied provisions advocated by Hill. Section 11 of the settlement
agreement states, “The Parties understand, covenant, and agree that the foregoing
constitutes the entire Agreement and that there exist no other agreements, oral, or written,
between the Parties.” Moreover, the record contains Hills’ April 10, 2017 deposition
where she admitted that neither the promissory note nor the settlement agreement indicate
the lender must first send her a monthly statement before she must make any loan
payments, or that the lender had a duty to send her monthly statements. Hill testified she
simply “didn’t look at it that way” and “assumed” the lender would send her monthly
statements.
{¶ 48} Hill also argued breach of contract by U.S. Bank, which she alleged was
evidence of a genuine question of material fact. Hill argued her deposition testimony was
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evidence of the bad faith breach. She testified Chase bank said “to her face” the loan was
delinquent on May 13, 2013 and then refused to accept payment, even though she
“brought the matter to the bank’s attention at the bank branch” of not receiving monthly
statements in the two months since signing the settlement agreement. Hill argued U.S.
Bank’s bad faith continued with Chase bank’s September 2013 letter urging her to sell
her home to avoid foreclosure, despite never receiving a monthly statement, and with
SPS’s October 14, 2013 monthly mortgage statement that include “unauthorized
charges.” Hill argued any failure to perform by her “is a result of U.S. Bank’s breach,”
which necessarily raises the question of fact of whether U.S. Bank’s breach was material
because a material breach would excuse Hill’s performance under the contract.
{¶ 49} In order to establish a claim for breach of contract, Hill must prove by a
preponderance of the evidence: “(1) a contract existed, (2) one party fulfilled his
obligations, (3) the other party failed to fulfill his obligations, and (4) damages resulted
from that failure.” Lewis, 6th Dist. Erie No. E-13-051, 2014-Ohio-5599, at ¶ 81, citing
Blake Homes, Ltd. v. FirstEnergy Corp., 173 Ohio App.3d 230, 2007-Ohio-4606, 877
N.E.2d 1041, ¶ 77 (6th Dist.).
{¶ 50} We find Hill failed to provide evidence of all four elements for breach of
contract. The record contains the 2013 settlement agreement which resolved the then-
pending 2011 foreclosure. The record also contains Hill’s admissions to failing to pay
U.S. Bank $650.89 from October 14, 2013, to September 2, 2016, despite receiving the
monthly statements she requested, with the amount due and payment address shown on
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the statements. Thus it is undisputed that on or before the foreclosure complaint filing on
April 25, 2016, Hill was in default under the promissory note, as modified.
{¶ 51} Hill also argued fraudulent inducement by U.S. Bank, which she alleged is
evidence of a genuine question of material fact. Hill argued U.S. Bank led her to believe
she would receive monthly statements when she agreed to the settlement agreement.
{¶ 52} In order to establish a claim for fraudulent inducement, Hill must prove by
clear and convincing evidence:
(1) A representation (or concealment of a fact when there is a duty
to disclose), (2) that is material to the transaction at hand, (3) 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, and (4) with
intent to mislead another into relying upon it, (5) justifiable reliance, and
(6) resulting injury proximately caused by the reliance. (Citation omitted.)
BAS Broadcasting, Inc. v. Fifth Third Bank, 6th Dist. Lucas No. L-17-1146, 2018-Ohio-
1324, ¶ 16. The debtor-creditor relationship between Hill and U.S. Bank does not
generally create a fiduciary relationship, absent special circumstances where both parties
understand that a special trust or confidence was created. Id. at ¶ 18. Hill does not allege
any material facts of such special circumstances.
{¶ 53} We find Hill failed to provide evidence of all six elements of fraudulent
inducement. Hill failed to allege any material facts to lead us to ascertain the execution
of the settlement agreement was not arm’s length requiring any duty by U.S. Bank to
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disclose to Hill additional information other than what is contained in the settlement
agreement. Id. at ¶ 20. To be successful, Hill must show the “‘fraud relates not to the
nature or purport of the [settlement agreement], but to the facts inducing its execution.’”
Miano v. Best, 2017-Ohio-343, 77 N.E.3d 555, ¶ 26 (6th Dist.), quoting Haller v. Borror
Corp., 50 Ohio St.3d 10, 14, 552 N.E.2d 207 (1990). Moreover, to seek to void the
settlement agreement in the context of a fraudulent inducement claim, Hill must show she
returned to U.S. Bank the consideration she received for release of her claims. Haller at
14. According to the settlement agreement’s recitation of consideration of “payments,
promises and other benefits provided in the Agreement,” U.S. Bank forgave $27,651.99
in arrearages plus directly paid Hill $20,000. Hill did not allege the return of any such
consideration, which is necessary “so that the parties may be placed in the positions they
enjoyed prior to the practice of the fraud alleged.” Id.{¶ 54} We find there is no genuine issue as to any material fact and that U.S. Bank
is entitled to judgment as a matter of law and that reasonable minds can come to but one
conclusion and that conclusion is adverse to Hill.
{¶ 55} Hill’s first and second assignments of error are not well-taken.
B. Decree in Foreclosure
{¶ 56} In support of her third assignment of error, Hill argued the 2006 mortgage
was void pursuant to R.C. 5301.01(A), resulting in U.S. Bank failing to be the mortgagee
assignee. Hill argued the mortgage “was not properly notarized because the
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acknowledgment clause of the mortgage is blank. The notary signed the mortgage but
did not state than anyone appeared in the notary’s presence to sign the mortgage.”
{¶ 57} In response U.S. Bank argued the 2006 mortgage was not void pursuant to
R.C. 5301.01(A), and any omission of the marital status of Hill and her late husband in
the mortgage was a mutual mistake of the parties and properly remedied by an order for
reformation.
{¶ 58} The trial court’s October 3, 2017 judgment entry and decree in foreclosure
stated:
The Court * * * declares that the acknowledgment clause of the
Mortgage substantially complies with R.C. 5301.01(A), and that the
Mortgage is valid and enforceable; that the Mortgage is reformed to reflect
that Marilyn L. Hill and Gerald J. Hill were married at the time they
executed the Mortgage; * * * .
{¶ 59} Having previously determined the mortgage substantially complied with
R.C. 5301.01(A), we find that even if the certificate of acknowledgment was defective in
any respect, the trial court was authorized to cure pursuant to R.C. 5301.07(C)(3). The
notary acknowledgment from the mortgage states, “This instrument was acknowledged
before me this 17th day of April 2006.” We further find by clear and convincing
evidence the trial court committed no error to order reformation of the 2006 mortgage to
reflect the undisputed marital status of Hill and her late husband at the time they executed
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the mortgage. Wagner v. Natl. Fire Ins. Co., 132 Ohio St. 405, 412-413, 8 N.E.2d 144(1937).
{¶ 60} Hill’s third assignment of error is not well-taken.
{¶ 61} In support of her fourth assignment of error, Hill argued the trial court
abused its discretion when it entered its October 3, 2017 judgment entry before the final
judicial report was filed, in violation of Ottawa County Court of Common Pleas Local
Rule 26.02. In response U.S. Bank argued the trial court did not abuse its discretion
because the purpose and intent of the rule was followed, and it is within a court’s sound
discretion whether specific circumstances warrant deviation from its own rules.
{¶ 62} We review a trial court’s control of its own docket and the progress of
proceedings in its court, including following its own local rules, for abuse of discretion.
Dodson v. Maines, 6th Dist. Sandusky No. S-11-012, 2012-Ohio-2548, ¶ 47, citing
Paramount Parks, Inc. v. Admiral Ins. Co., 12th Dist. Warren No. CA2007-05-066,
2008-Ohio-1351, ¶ 37. Abuse of discretion “‘connotes more than an error of law or
judgment; it implies that the court’s attitude is unreasonable, arbitrary or
unconscionable.’” Blakemore v. Blakemore, 5 Ohio St.3d 217, 219, 450 N.E.2d 1140(1983), quoting State v. Adams, 62 Ohio St.2d 151, 157, 404 N.E.2d 144 (1980).
“‘[L]ocal rules are of the court’s own making, procedural in nature, and not substantive
principles of law. Accordingly, it has been held that there is no error when, in its sound
discretion, the court decides that the peculiar circumstances of a case require deviation
from its own rules.’” Dodson at ¶ 47, quoting Paramount Parks at ¶ 37.
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{¶ 63} The local rule at issue states:
At the time of entry of judgment in any such case a final certificate
of extension of the evidence of title shall be prepared and filed in
accordance with the foregoing requirements showing the address or
location of the property and the record state of title as of a date not more
than thirty (30) days prior to the taking of the decree. Such extension shall
also become and remain a part of the files in the case. Failure to comply
with the foregoing rule shall be grounds for dismissal of an action.
Loc.R. 26.02 of the Court of Common Pleas of Ottawa County, General Division. Since
Loc.R. 26.02 references Loc.R. 26.01, we find that section outlines procedures for the
“evidence of the state of the record title to the premises in question” in actions to “quiet
title, partition and for the marshaling and foreclosure of liens on real property,” making
such evidence of title a part of the files in the case. Loc.R. 26.01 further states, “Where
the evidence of title indicates that necessary parties have not been made defendants, the
attorney for the party filing the same shall proceed without delay to cause such new
parties to be added and served.”
{¶ 64} “The order of foreclosure determines the extent of each lienholder’s
interest, sets forth the priority of the liens, and determines the other rights and
responsibilities of each party in the action.” CitiMortgage, Inc. v. Roznowski, 139 Ohio
St.3d 299, 2014-Ohio-1984, 11 N.E.3d 1140, ¶ 39. The record contains a “Notice of
Filing Final Judicial Report * * * pursuant to Local Rule 26.02” dated October 3, 2017,
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and journalized on October 6, 2017. See R.C. 2329.191. The final judicial report was
dated October 25, 2016, and the supplemental report was dated September 19, 2017. The
supplemental report did not identify any “necessary parties that have not been made
defendants” pursuant to Loc.R. 26.01. The final judicial report, as supplemented, was
dated within 30 days prior to the October 3, 2017 decree in foreclosure pursuant to
Loc.R. 26.02. The final judicial report, as supplemented, was dated and served by e-mail
on October 3, 2017, the same day as the judgment entry and decree in foreclosure.
{¶ 65} We find the trial court did not abuse its discretion when it entered its
judgment entry and decree in foreclosure the same day the final judicial report was
served, but not yet journalized.
{¶ 66} Hill’s fourth assignment of error is not well-taken.
{¶ 67} On consideration whereof, the judgment of the Ottawa County Court of
Common Pleas is affirmed. Hill is ordered to pay the costs of this appeal pursuant to
App.R. 24.
Judgment affirmed.
A certified copy of this entry shall constitute the mandate pursuant to App.R. 27.
See also 6th Dist.Loc.App.R. 4.
Mark L. Pietrykowski, J. _______________________________
JUDGE
Thomas J. Osowik, J.
_______________________________
Christine E. Mayle, P.J. JUDGE
CONCUR.
_______________________________
JUDGE
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This decision is subject to further editing by the Supreme Court of
Ohio’s Reporter of Decisions. Parties interested in viewing the final reported
version are advised to visit the Ohio Supreme Court’s web site at:
http://www.supremecourt.ohio.gov/ROD/docs/.
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