KeyBank Natl. Assn. v. Robinson ( 2020 )

[Cite as KeyBank Natl. Assn. v. Robinson, 2020-Ohio-6734.]
COURT OF APPEALS OF OHIO
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
KEYBANK NATIONAL ASSOCIATION, :
Plaintiff-Appellee, :
No. 108754
v. :
KATRINA ROBINSON, ET AL., :
Defendants-Appellants. :
JOURNAL ENTRY AND OPINION
JUDGMENT: AFFIRMED
RELEASED AND JOURNALIZED: December 17, 2020
Civil Appeal from the Cuyahoga County Court of Common Pleas
Case No. CV-18-897666
Appearances:
Shapiro, Van Ess, Phillips & Barragate, L.L.P., and Phillip
Barragate, for appellee.
Katrina Robinson, pro se.
FRANK D. CELEBREZZE, JR., J.:
Defendant-appellant Katrina Robinson brings this appeal challenging
the trial court’s judgment granting summary judgment in favor of plaintiff-appellee,
KeyBank National Association (“KeyBank”) in KeyBank’s in rem foreclosure action.1
After a thorough review of the record and law, this court affirms.
I. Factual and Procedural History
The instant matter involves a foreclosure action for the property located
at 3526 West 127th Street, Cleveland, Ohio 44111. Appellant purchased the property
in 2002 for $94,500. Appellant entered into a mortgage with Mortgage Electronic
Registration Systems, Inc. (“MERS”), as nominee for KeyBank, KeyBank’s
successors and assignees, in the amount of $74,500.2 MERS assigned the mortgage
to KeyBank in April 2014, and KeyBank recorded the instrument in August 2014.
Appellant executed a promissory note3 to KeyBank on January 28,
2002, with a principal sum of $74,150 plus interest at an annual rate of 5.75 percent.
In order to secure the payment of the promissory note, appellant executed and
delivered a mortgage deed conveying the property at issue to KeyBank.4 The
mortgage was duly filed with the Cuyahoga County Recorder on January 30, 2002,
and was a valid first lien upon the property at issue.
There are two bankruptcy actions that are relevant to this appeal.
Appellant obtained an initial bankruptcy discharge in 2008 in the United States
Bankruptcy Court for the Northern District of Ohio (Case No. 08-177115).
1 On August 5, 2020, this court granted KeyBank’s motion to substitute Amos
Financial, L.L.C., as appellee.
2 Appellant also entered into a mortgage with the city of Cleveland in the amount
of $20,000.
3 The promissory note was attached to KeyBank’s complaint as exhibit A.
4 The mortgage was attached to KeyBank’s complaint as exhibit C.
Subsequently, after filing the instant appeal, appellant obtained a second
bankruptcy discharge in 2019 (Case No. 19-1415). These discharges will be
discussed in further detail below.
In July 2011, pursuant to a loan-modification agreement, titled “Home
Affordable Modification Agreement,” the unpaid principal balance on appellant’s
loan was modified to $67,387.10, which included $2,745.02 of deferred principal
balance. The borrower set forth in this agreement was appellant and the lender was
BAC Home Loans Servicing, LP.
Appellant defaulted in making payments on the promissory note in
2016, and KeyBank accelerated the amount due on the promissory note in
accordance with the note’s terms. Appellant’s failure to make the requisite
payments constituted a breach of appellant’s mortgage with KeyBank. A demand
letter and notice of intention to foreclose on the property was mailed to appellant in
July 2016.
In February 2017, KeyBank filed a complaint in foreclosure in Cuyahoga
C.P. No. CV-17-875380. KeyBank moved for leave to file an amended complaint on
January 25, 2018. On February 2, 2018, the trial court denied KeyBank’s motion for
leave on the basis that the “case has been pending for a year and must proceed to
judgment or dismissal.” The trial court subsequently dismissed the case without
prejudice on February 23, 2018.
Following the trial court’s dismissal without prejudice, KeyBank refiled
its complaint on May 14, 2018, in Cuyahoga C.P. No. CV-18-897666. KeyBank’s
complaint was filed against appellant and the following defendants that are not
parties in this appeal: appellant’s unknown spouse (if any), Ohio Homeowners
Assistance, L.L.C., and the city of Cleveland Law Department. In its complaint,
KeyBank alleged that it was the holder of a promissory note that appellant executed
in January 2002, appellant defaulted on her obligations under the promissory note
by failing to make the monthly payments, and that KeyBank was entitled to enforce
the note. KeyBank further alleged that it was entitled to enforce a mortgage on
appellant’s property, and by defaulting on the note, appellant breached the
conditions of her mortgage. KeyBank sought in rem foreclosure and relief.
KeyBank attached the following documents to its complaint: (1) the
promissory note, (2) the 2011 loan modification agreement, (3) the mortgage
appellant entered into in January 2002 with MERS, as nominee for lender KeyBank,
in the amount of $74,150, and (4) a “discharge of debtor in a Chapter 7 Case” from
appellant’s 2008 bankruptcy discharge.
Appellant filed a motion for leave to file an answer and an answer on
August 1, 2018. Therein, appellant conceded that KeyBank has “an interest in the
subject property.” However, appellant asserted five affirmative defenses: (1)
KeyBank failed to state a claim upon which relief could be granted, (2) KeyBank
lacks standing to bring the foreclosure action, (3) KeyBank is not the real party in
interest, (4) appellant is entitled to all available equitable defenses, and (5) appellant
is entitled to have her loan evaluated for a loan modification under the “Making
Home Affordable” program. The trial court granted appellant’s motion for leave to
file an answer on March 19, 2019, and deemed her answer filed as of August 1, 2018.
On September 14, 2018, the trial court stayed all motion practice and
referred the matter to mediation. A mediation hearing was held on January 3, 2019.
The parties were unable to resolve the dispute through mediation, and the stay on
motion practice was lifted.
On January 29, 2019, KeyBank filed a motion for default judgment
against appellant’s unknown spouse and Ohio Homeowners Assistance, L.L.C. A
hearing on KeyBank’s motion for default judgment was held on March 21, 2019, and
appellant appeared at the default hearing. On March 22, 2019, the trial court
granted default judgment against appellant’s unknown spouse and Ohio
Homeowners Assistance, L.L.C., based on the failure of these defendants to file an
answer or otherwise respond to KeyBank’s complaint. The trial court’s ruling on
KeyBank’s motion for default judgment is not at issue in this appeal.
KeyBank also filed a motion for summary judgment on January 29,
2019. Therein, KeyBank asserted that it was the holder of the promissory note and
mortgage, appellant defaulted on the promissory note, there was $54,937.41 plus
interest at a rate of 4.75 percent due on the note as of May 1, 2016, and that KeyBank
was exercising the 30-day acceleration provision set forth in the note and calling due
the entire unpaid principal balance. KeyBank argued that there were no genuine
issues of material fact that remained for trial and that KeyBank was entitled to
judgment as a matter of law because appellant was in default, and once appellant
defaulted, KeyBank was entitled to accelerate and call due the entire unpaid
principal balance of appellant’s loan.
On March 19, 2019, appellant filed a motion for leave to file a brief in
opposition to KeyBank’s motion for summary judgment. Therein, appellant
asserted that she had recently obtained documents showing that she “does not owe
all or part of the amount [KeyBank] is seeking.” The trial court granted appellant’s
motion for leave and ordered appellant to file her brief in opposition on or before
April 22, 2019.
Appellant filed a brief in opposition to KeyBank’s motion for summary
judgment on April 22, 2019. Therein, appellant argued that genuine issues of
material fact existed regarding the amount due on the property and the applicable
interest rate that precluded the granting of summary judgment in KeyBank’s favor.
On April 26, 2019, a magistrate determined that KeyBank was entitled
to judgment as a matter of law. As a result, the magistrate recommended granting
KeyBank’s motion for summary judgment and entering in rem judgment in favor of
KeyBank in the amount of $54,937.41 on the promissory note plus interest at 2
percent per year from May 1, 2016, plus $2,745.02 of deferred principal to which
interest does not accrue.
On May 10, 2019, appellant filed objections to the magistrate’s
decision. Therein, appellant argued that KeyBank filed its foreclosure complaint
“without taking into consideration all Defendants and not correctly listing and
calculating the payments made toward the property and the amount currently owed
on the property.” Appellant further asserted that her objections should be sustained
because her brief in opposition “presented numerous issues of disputes of matterial
[sic] fact.” Once again, appellant disputed the amount due on the property, and the
applicable interest rate.
Appellant appeared to argue in her objections that she had been able
to obtain evidence that KeyBank failed to turn over in discovery that proved she did
not owe KeyBank $54,937.41 plus interest on the property. Appellant referenced
several exhibits in her objections to the magistrate’s decision. According to
appellant, these exhibits demonstrated that appellant received money from various
sources that was applied to the principal balance on the loan and that the amount
that was owed on the property was less than the amount awarded to KeyBank by the
magistrate. Appellant failed, however, to attach these exhibits to her objections.
KeyBank filed a brief in opposition to appellant’s objections on
May 15, 2019. Therein, KeyBank argued that the evidence submitted in support of
its motion for summary judgment demonstrated that the amount due on the
principal balance of the loan was $54,937.41 plus interest at an annual rate of 4.75
percent from May 1, 2016, as well as advances for any taxes, insurance, or a need to
protect the property. Furthermore, KeyBank contended that appellant failed to
submit any evidence supporting her objections to the magistrate’s decision.
On June 10, 2019, the trial court overruled appellant’s objections and
adopted the magistrate’s decision finding that KeyBank was entitled to summary
judgment. The trial court’s judgment entry provides, in relevant part, “[appellant]
presents no evidence to support her objection to the magistrate’s decision. The
magistrate decision grants [KeyBank’s] motion for summary judgment as it is
supported by affidavit evidence of an officer of the servicer that establishes the
delinquency and the amount due and owing on the loan.”
On July 5, 2019, appellant filed an appeal challenging the trial court’s
judgment.
After appellant filed the instant appeal, she filed a petition for
bankruptcy pursuant to Chapter 7 in the United States District Court for the
Northern District of Ohio. The bankruptcy court issued an order of discharge on
November 20, 2019.5
Subsequently, on December 31, 2019, KeyBank assigned the note and
mortgage to Amos Financial, L.L.C. On August 5, 2020, this court granted
KeyBank’s motion to substitute Amos Financial, L.L.C., as appellee.
In this appeal, appellant assigns four errors for review:
I. [Appellant’s] property was included in [the 2008] Chapter 7
Bankruptcy that discharge[d] the mortgage debt in this instant matter.
II. The trial [c]ourt wrongly analyzed and interrupted the [appellant’s]
discharge order of 2019.
III. The trial court neglected to consider the Home Affordable
[M]odification Agreement [of] October 2017 for [appellant’s] home
that was signed and accepted by the parties “Save the Dream Ohio”
preventative program in October 2014. This program was to help the
family that was struggling with mortgage payment from [f]ederal
5 According to KeyBank, as of August 13, 2020, the date of the filing of KeyBank’s
appellate brief, this bankruptcy action had not been closed.
government’s efforts to help [appellant] avoid foreclosure and regain
housing recovery.
IV. The trial court erred in dismissing claims with prejudices. (R.C. 41)
II. Law and Analysis
Appellant’s four assignments of error challenge the trial court’s
judgment overruling appellant’s objections and adopting the magistrate’s decision
granting summary judgment in favor of KeyBank. For ease of discussion, appellant’s
assignments of error will be addressed out of order.
A. Summary Judgment
1. Standard of Review
Summary judgment, governed by Civ.R. 56, provides for the expedited
adjudication of matters where there is no material fact in dispute to be determined
at trial. In order to obtain summary judgment, the moving party must show that
“(1) there is no genuine issue of material fact; (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 when viewing evidence in favor of the
nonmoving party, and that conclusion is adverse to the nonmoving party.” Grafton
v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996), citing State ex
rel. Cassels v. Dayton City School Dist. Bd. of Edn., 69 Ohio St.3d 217, 219, 631
N.E.2d 150 (1994).
The moving party has the initial responsibility of establishing that it is
entitled to summary judgment. Dresher v. Burt, 75 Ohio St.3d 280, 292-293, 662
N.E.2d 264 (1996). “[I]f the moving party meets this burden, summary judgment is
appropriate only if the nonmoving party fails to establish the existence of a genuine
issue of material fact.” Deutsche Bank Natl. Trust Co. v. Najar, 8th Dist. Cuyahoga
No. 98502, 2013-Ohio-1657, ¶ 16, citing Dresher at 293.
Once the moving party demonstrates no material issue of fact exists
for trial and the party is entitled to judgment, the burden shifts to the nonmoving
party to put forth evidence demonstrating the existence of a material issue of fact
that would preclude judgment as a matter of law. Dresher at id. In order to meet
his burden, the nonmoving party may not merely rely upon allegations or denials in
his or her pleadings, and must set forth specific facts, by affidavit or as otherwise
provided in Civ.R. 56(E), demonstrating the existence of a genuine issue of material
fact for trial. See Houston v. Morales, 8th Dist. Cuyahoga No. 106086, 2018-Ohio-
1505, ¶ 7, citing Mootispaw v. Eckstein, 76 Ohio St.3d 383, 385, 667 N.E.2d 1197(1996). Summary judgment is appropriate if the nonmoving party fails to meet this
burden. Dresher at id.
2. Foreclosure
In her third assignment of error, appellant challenges the trial court’s
judgment granting KeyBank’s motion for summary judgment and entering in rem
judgment in favor of KeyBank “in the amount of $54,937.41 plus interest at the rate
of 2 percent per year from May 1, 2016 plus $2,745.02 of deferred principal to which
no interest accrues.” Specifically, appellant contends that in awarding $54,937.41
to KeyBank, the trial court failed to consider (1) the “Save the Dream Ohio Mortgage”
loan she received in 2014 from Ohio Homeowner Assistance, L.L.C., in the amount
of $35,000, and (2) the $12,768 loan she received from Ohio Housing Finance
Agency in 2014. Appellant appears to argue that she applied these two loans,
totaling $47,768, towards the principal balance on her KeyBank loan.
To obtain summary judgment in a foreclosure action, the moving
party must present evidentiary quality materials establishing (1) the plaintiff is the
holder of the note and mortgage or is a party entitled to enforce the instrument; (2)
if the plaintiff is not the original mortgagee, the chain of assignments and transfers;
(3) the mortgagor is in default; (4) all conditions precedent have been met; and
(5) the amount of principal and interest due. HSBC Bank USA, N.A. v. Surrarrer,
8th Dist. Cuyahoga No. 100039, 2013-Ohio-5594, ¶ 16, citing U.S. Bank, N.A. v.
Adams, 6th Dist. Erie No. E-11-070, 2012-Ohio-6253, ¶ 10.
“A note secured by a mortgage is a negotiable instrument that is
governed by R.C. Chapter 1303.” JP Morgan Chase Bank v. Stevens, 8th Dist.
Cuyahoga No. 104835, 2017-Ohio-7165, ¶ 37, citing Wells Fargo Bank, N.A. v.
Carver, 2016-Ohio-589, 60 N.E.3d 473, ¶ 14 (8th Dist.). Under R.C. 1303.31(A),
three “persons” are entitled to enforce an instrument: (1) the holder of the
instrument; (2) a nonholder in possession of the instrument who has the rights of a
holder; and (3) a person not in possession of the instrument who is entitled to
enforce the instrument under R.C. 1303.38 or 1303.58(D). R.C. 1301.201(B)(21)(a)
defines a holder of a negotiable instrument as “[t]he person in possession of a
negotiable instrument that is payable either to bearer or to an identified person that
is the person in possession.”
As noted above, in support of its motion for summary judgment,
KeyBank submitted copies of the promissory note and mortgage executed by
appellant in 2002. KeyBank also submitted an affidavit of William Long, the
assistant vice president of PHH Mortgage Corporation (“PHH”), pertaining to the
amount due on the property. Long averred that PHH is the servicer for appellant’s
loan and provides mortgage loan services to KeyBank.
In his affidavit, executed on August 30, 2018, Long asserted that
KeyBank is “the entity entitled to enforce the promissory note and/or loan
agreement,” and that the note “is secured by a [mortgage] dated January 28, 2002,
on real estate together with all improvements thereon.” Long stated that appellant
defaulted on her loan by failing to make the payments due according to the terms
set forth in the promissory note and mortgage. The last payment that had been
made to appellant’s account was on May 3, 2016, in the amount of $654.29. Long
asserted that the default had not been cured.
Long averred that based on appellant’s failure to make the payments
in accordance with the terms of the note and mortgage, “[t]he Loan is currently due
for the June 1, 2016 payment and all payments thereafter pursuant to the terms of
the Note and Mortgage.” Long stated that the amount due on the property as of
August 10, 2018, was $54,937.41 plus interest at 4.75 percent per year from May 1,
2016. Long asserted, in relevant part,
As of August 10, 2018, as reflected in [KeyBank’s] business records
(consisting of the Note, Mortgage and a printout from the electronic
servicing system), true and correct copies of which are attached hereto
as Exhibit “B,” there is due and owing on the loan the principal sum of
$54,937.41, plus interest at 4.75% per annum from May 1, 2016 plus
advances for taxes, insurance and otherwise to protect the property, if
any.
Long submitted documents and statements from appellant’s loan that
supported his assertion and established that the principal balance on appellant’s
loan was, in fact, $54,937.41. Long submitted the following documents with his
affidavit: (1) the demand letter and notice of default under the mortgage that was
mailed to appellant in July 2016; (2) the promissory note appellant executed to
KeyBank in January 2002; (3) the 2011 loan modification agreement; (4) the
mortgage executed between appellant and MERS, as nominee for lender KeyBank,
in January 2002; (5) the corporate assignment of the mortgage from MERS to
KeyBank in April 2014; and (6) a preliminary judicial report with an effective date
of April 2018.
Long also submitted various statements and records pertaining to
appellant’s loan. Long submitted electronic servicing system documents from
appellant’s loan, dated August 30, 2018, that reflected a principal balance of
$54,937.41, a “total interest” figure of $4,436.34, and a “total to payoff” figure of
$68,818. Long submitted customer account activity statements pertaining to
appellant’s loan from February 2017 to August 2018. Long submitted Bank of
America home loan history statements for the “statement period January 2000 to
July 2017,” that contained a “beginning balance” figure of $74,150.
KeyBank’s attorney also submitted an affidavit, executed on
January 25, 2019, in which he averred that he spoke with Long on January 24, 2019,
and that Long “confirms the factual accuracy of [appellant’s loan records] and
[KeyBank’s complaint] as they relate to said loan or loans.” The attorney further
averred that based on his conversation with Long and his own review of the
pertinent records that KeyBank’s complaint is “accurate in all relevant respects.”
The evidence submitted by KeyBank was sufficient to meet its burden
of demonstrating that it was entitled to judgment as a matter of law in the
foreclosure action. The burden then shifted to appellant to put forth evidence
demonstrating the existence of a material issue of fact that precluded summary
judgment in KeyBank’s favor.
Appellant was required to set forth specific facts — such as affidavit
evidence or other evidence under Civ.R. 56(E) — and appellant could not merely rely
on allegations or denials in her brief in opposition. The record reflects that appellant
failed to meet her reciprocal burden of demonstrating the existence of genuine
issues of material facts.
As an initial matter, we note that appellant did not challenge in her
brief in opposition, and does not challenge in this appeal, the validity of the
promissory note and mortgage held by KeyBank, whether KeyBank is the holder of
the note or mortgage or entitled to enforce the same, that she defaulted on her loan
payments, or that the terms of the promissory note and acceleration provision
permitted KeyBank to call the full unpaid principal balance due upon appellant’s
default. Rather, in her brief in opposition, appellant argued that genuine issues of
material fact existed regarding the amount due on the property and the applicable
interest rate that precluded the granting of summary judgment in KeyBank’s favor.6
a. Amount Due on the Property
In arguing that a genuine issue of material fact existed regarding the
amount due on the property, appellant alleged in her brief in opposition that
KeyBank failed to take into consideration the payments appellant had made towards
the principal balance of her loan for the property and that the amount KeyBank
alleged was owed on the property was incorrect.
First, appellant argued that the $54,937.41 figure KeyBank identified
in its complaint was incorrect because she had been making payments toward the
property for more than 17 years and had volumes of records and bank statements
reflecting these payments. Appellant did not, however, specify how much money
was owed on the property or produce evidentiary material contradicting the amount
identified by KeyBank.
Appellant asserted that she received $55,000 in loans toward the
purchase price of the property. At the time she purchased the property, appellant
entered into a mortgage with the city of Cleveland on January 28, 2002, in the
amount of $20,000. Appellant also received a “Save the Dream Ohio Mortgage”
6Although appellant argued that a genuine issue of material fact existed regarding
the applicable interest rate in her brief in opposition to KeyBank’s motion for summary
judgment and her objections to the magistrate’s decision, appellant does not challenge in
this appeal the 2 percent annual interest rate applied by the trial court in entering in rem
judgment in KeyBank’s favor.
loan from Ohio Homeowner Assistance, L.L.C., in the amount of $35,000 in 2014.
Based on these loans, which appellant attached to her brief in opposition, appellant
argued that the amount owed on the property is “well-less than [$54,937.41]” and
that “the $55,000.00 in grant funds paid toward the property in this matter, coupled
with the 17 years of payments made by [appellant] has far exceed[ed] the purchase
price [of $74,150] of the property. Therefore, [KeyBank’s] figure of [$54,937.41] is
purposely and/or negligently incorrect.” Appellant’s brief in opposition at 4.
In support of her brief in opposition, appellant attached (1) the
mortgage appellant entered into in 2002 with the city of Cleveland in the amount of
$20,000; (2) the “Save the Dream Ohio Mortgage” appellant entered into in 2014
with Ohio Homeowner Assistance, L.L.C. in the amount of $35,000; (3) a
satisfaction of mortgage, executed on January 5, 2018, indicating that the mortgage
appellant entered into with Ohio Homeowner Assistance, L.L.C. in the amount of
$35,000 had been fully satisfied and discharged; and (4) a KeyBank monthly
mortgage statement dated August 16, 2017, reflecting a current interest rate of 2
percent.
In her third assignment of error, appellant appears to challenge the
amount due on the property based on the “Save the Dream” loan she received in
2014 in the amount of $35,000. She argues that the trial court failed to take this
loan into consideration in determining that the amount due on the property was
$54,937.41. Appellant also contends that the trial court failed to take into
consideration the loan she received in 2014 in the amount of $12,768 from the Ohio
Housing Finance Agency. See appellant’s brief at 10.
After reviewing the record, we find that appellant failed to submit any
evidence in support of her brief in opposition, or her objections to the magistrate’s
decision, demonstrating that the entire “Save the Dream” loan in the amount of
$35,000 she received in 2014 was applied towards the principal balance on her
KeyBank loan. Appellant also did not submit any evidence in support of her brief in
opposition or objections demonstrating that she received an additional loan in the
amount of $12,768.10 from Ohio Housing Finance Agency in 2014, nor that this loan
was also applied towards the principal balance on appellant’s KeyBank loan.
The loan records attached to Long’s affidavit, which KeyBank
submitted in support of its motion for summary judgment, demonstrate that on
November 4, 2014, a lump sum of $12,768.10 was applied towards appellant’s
KeyBank loan. KeyBank contends that appellant’s loan was delinquent and this
lump sum payment of $12,768.10 was applied to bring the loan current. Although
appellant received the “Save the Dream” loan in the amount of $35,000, appellant
failed to present any evidence indicating that the entire balance was paid towards
her KeyBank loan, or that she paid more than $12,768.10 towards her KeyBank loan
in 2014, as KeyBank’s loan records demonstrated.
Regarding appellant’s argument in her brief in opposition that she
had been making loan payments for more than 17 years and had volumes of records
and bank statements reflecting these payments, the record reflects that appellant
failed to submit any evidence, such as loan records or statements or an affidavit,
showing the payments she made under her KeyBank loan or contradicting the
evidence KeyBank submitted regarding the amount due on the property when
KeyBank filed its complaint in May 2018.
The satisfaction of mortgage submitted by appellant, indicating that
appellant satisfied the $35,000 “Save the Dream” loan, does not involve KeyBank
nor the note and mortgage appellant executed in 2002 at the time she purchased the
property. Appellant failed to demonstrate that the $20,000 loan she received from
the city of Cleveland was applied towards the principal balance on her KeyBank loan.
The mortgage appellant entered into with the city of Cleveland in January 2002, in
the amount of $20,000, was applied towards the $94,500 purchase price for the
property. The $20,000 was not applied towards the principal balance on appellant’s
mortgage with KeyBank in the amount of $74,500.
Based on the foregoing analysis, we find that appellant failed to meet
her burden of demonstrating the existence of a genuine issue of material fact
regarding the amount due on the property. Appellant failed to submit any evidence
of the type listed in Civ.R. 56(C) demonstrating that the $54,937.41 KeyBank alleged
was due on the property was inaccurate. Appellant attached documents to her brief
in opposition and objections to the magistrate’s decision, but the documents were
not authenticated by affidavit, as required by Civ.R. 56(C). None of the documents
appellant submitted in support of her brief in opposition demonstrated a genuine
issue of material fact existed regarding whether KeyBank was entitled to enforce the
note and mortgage, whether appellant defaulted on the note and mortgage with
KeyBank, or whether KeyBank was entitled to accelerate the entire unpaid principal
balance upon appellant’s default.
b. Interest Rate
As noted above, appellant also argued in her brief in opposition to
KeyBank’s motion for summary judgment that genuine issues of material fact
existed regarding the applicable interest rate. Appellant asserted that the applicable
interest rate was 2 percent per year, as alleged in KeyBank’s complaint, rather than
the 4.75 percent interest rate identified in KeyBank’s motion for summary
judgment.
KeyBank’s complaint alleged, in relevant part, “by reason of default in
payment on the said note, [KeyBank] has declared said debt due; that there is due
the sum of $54,937.41 plus interest at a current rate of 2% per annum from May 1,
2016 plus $2,745.02 of deferred principal to which no interest accrues.” Complaint
at ¶ 3. In KeyBank’s motion for summary judgment, however, KeyBank argued, in
relevant part, “[appellant] is in default of payment of said Promissory Note, and
there is due thereon the sum of $54,937.41 plus interest at the Note rate of 4.75%
from May 1, 2016[.]”
After reviewing the record, we find that appellant failed to
demonstrate the existence of a genuine issue of material fact regarding the
applicable interest rate. In support of her brief in opposition, appellant submitted a
KeyBank monthly mortgage statement, dated August 16, 2017, to dispute KeyBank’s
assertion in its motion for summary judgment that the applicable interest rate was
4.75 percent per year. The monthly mortgage statement provides that the current
interest rate in August 2017 was 2 percent. The statement also contains an “account
information” section in which the “outstanding principal balance” is listed at
$54,937.41.7
As noted above, KeyBank alleged in its complaint that the applicable
interest rate was 2%. This is consistent with the interest rate set forth in the monthly
mortgage statement appellant submitted in support of her brief in opposition. This
is also consistent with a “note, closing” statement from appellant’s loan, dated
August 30, 2018, that Long submitted with his affidavit. This statement provided
that the interest rate on the principal balance of $54,937.41 was 2 percent. The trial
court entered in rem judgment in favor of KeyBank “in the amount of $54,937.41
plus interest at the rate of 2% per year from May 1, 2016[.]” (Emphasis added.)
Although KeyBank asserted in its motion for summary judgment that
the applicable interest rate was 4.75 percent, this assertion was based on Long’s
averment that “[a]s of August 10, 2018, * * * there is due and owing on the loan the
principal sum of $54,937.41, plus interest at 4.75% per annum from May 1, 2016[.]”
(Emphasis added.) The record reflects that appellant defaulted on her loan
payments in 2016, not in 2018. The trial court did not apply the 4.75 percent annual
7 Appellant appears to argue that the interest rate set forth in the monthly
mortgage statement is correct, but the outstanding principal balance figure of $54,937.41
is “the wrong amount owed on the property[.]” Appellant’s brief at 2.
interest rate identified in KeyBank’s motion for summary judgment in entering
judgment in favor of KeyBank.
Finally, to the extent that appellant argues that the 4.75 percent
interest rate identified in KeyBank’s motion for summary judgment is “factually
wrong,” appellant’s argument is unsupported by the record. See appellant’s brief at
4. The July 2011 loan modification agreement contained a table setting forth the
applicable interest rates that would be applied to unpaid principal balance. The
agreement provided that for years one through five, the interest rate was 2 percent,
and the interest rate changing date was identified as June 1, 2011; for year six, the
interest rate was 3 percent, and the interest rate changing date was identified as
June 1, 2016; for year seven, the interest rate was 4 percent, and the interest rate
changing date was identified as June 1, 2017; finally, for year eight and beyond, the
interest rate was 4.75 percent, and the interest rate changing date was identified as
June 1, 2018.
Long also submitted electronic servicing system documents that
demonstrated that the interest rate increased over time. First, Long submitted a
statement dated August 30, 2018, titled “payoff fees and [per diem],” that provided
the per diem interest rate was 4.75 percent. Second, Long submitted a statement
dated August 30, 2018, titled “payoff calculation totals,” that provided the interest
rate increased over time: the interest rate from May 1, 2016 was 3 percent; the
interest rate from June 1, 2017 was 4 percent; and the interest rate from June 1, 2018
was 4.75 percent. Accordingly, we find no merit to appellant’s assertion that the 4.75
percent interest rate referenced in KeyBank’s motion for summary judgment was
“factually wrong.”
Based on the foregoing analysis, appellant failed to demonstrate the
existence of a genuine issue of material fact regarding the applicable interest rate.
Appellant’s assertions in her brief in opposition, without supporting
documentary evidence or an affidavit from appellant, were insufficient to satisfy
appellant’s reciprocal burden of demonstrating a genuine issue of material fact that
precluded summary judgment in KeyBank’s favor. Furthermore, appellant’s
assertions in her objections to the magistrate’s decision about discovering evidence
that contradicted KeyBank’s figure that appellant owed $54,937.41 plus interest on
the property do not constitute evidence. Although appellant alleged that she
discovered evidence that contradicted this figure, appellant failed to attach any
evidence that demonstrated the existence of material issues of fact. Furthermore,
although appellant appeared to request a continuance or a hearing to present this
evidence, appellant was required to attach the evidence to her brief in opposition or
her objections to the magistrate’s decision. Appellant failed to do so.
We recognize that appellant represented herself in the trial court
proceedings. It is well-established, however, that appellant, as a pro se litigant, is
held to the same standard as litigants represented by counsel. This court has
previously recognized,
a pro se litigant may face certain difficulties when choosing to represent
oneself. Although a pro se litigant may be afforded reasonable latitude,
there are limits to a court’s leniency. Henderson v. Henderson, 11th
Dist. Geauga No. 2012-G-3118, 2013-Ohio-2820, ¶ 22. Pro se litigants
are presumed to have knowledge of the law and legal procedures, and
are held to the same standard as litigants who are represented by
counsel. In re Application of Black Fork Wind Energy, L.L.C., 138
Ohio St.3d 43, 2013-Ohio-5478, 3 N.E.3d 173, ¶ 22.
Saeed v. Greater Cleveland Regional Transit Auth., 8th Dist. Cuyahoga No. 104617,
2017-Ohio-935, ¶ 7. “‘Pro se litigants are not entitled to greater rights, and they must
accept the results of their own mistakes.’” Fazio v. Gruttadauria, 8th Dist.
Cuyahoga No. 90562, 2008-Ohio-4586, ¶ 9, quoting Williams v. Lo, 10th Dist.
Franklin No. 07AP-949, 2008-Ohio-2804, ¶ 18.
In the instant matter, appellant, as a pro se litigant, was presumed to
have knowledge of the law and legal procedures regarding her reciprocal burden to
put forth evidence demonstrating the existence of a material issue of fact that
precluded summary judgment in KeyBank’s favor, and her obligation to support her
objections to the magistrate’s factual findings with an affidavit pursuant to Civ.R.
53(D)(3)(b)(ii) and (iii).
For all of the foregoing reasons, we find that the trial court did not err
in granting KeyBank’s motion for summary judgment and entering in rem judgment
in favor of KeyBank in the amount of $54,937.41 plus interest at the rate of 2 percent
from May 1, 2016.
Appellant’s third assignment of error is overruled.
B. Bankruptcy Discharges
Appellant’s first and second assignments of error are related because
they both pertain to bankruptcy proceedings commenced by appellant in 2008 and
2019.
As noted above, there are two bankruptcy cases that are relevant in
this case. First, in 2008, in the United States District Court for the Northern District
of Ohio,8 appellant received a bankruptcy discharge. KeyBank acknowledged this
discharge in its complaint, attached the “discharge of debtor in a Chapter 7 Case”
order from the 2008 case to its complaint, and asserted in its complaint that
appellant “is no longer personally liable for the debt [on the note] herein.”
(Emphasis added.) Complaint at ¶ 6.
Second, on July 23, 2019 — after appellant filed the instant appeal on
June 10, 2019, challenging the trial court’s judgment in KeyBank’s foreclosure
action — appellant filed a petition for bankruptcy pursuant to Chapter 7 in the
United States District Court for the Northern District of Ohio.9 The bankruptcy
court issued an order of discharge on November 20, 2019.
In her first assignment of error, appellant appears to argue that the
trial court failed to consider the 2008 bankruptcy discharge and as a result,
improperly permitted KeyBank to commence foreclosure proceedings on appellant’s
property. Appellant’s argument is misplaced.
8 Case No. 08-177115.
9 Case No. 19-1415.
Upon a mortgagor’s default, the mortgagee bank has three separate and
independent remedies that it may pursue in an attempt to collect the
debt secured by the mortgage: a personal judgment against the
mortgagor to obtain the amount owing on the promissory note; an
action in ejectment based on the mortgage; and an action in
foreclosure based upon the mortgage. Deutsche Bank Natl. Trust Co.
v. Holden, 147 Ohio St.3d 85, 2016-Ohio-4603, 60 N.E.3d 1243, ¶ 22-
24.
(Emphasis added.) United States Bank Natl. Assn. v. O’Malley, 2019-Ohio-5340,
150 N.E.3d 532, ¶ 16 (8th Dist.). The record in this case reflects that KeyBank
pursued the third remedy.
We initially note that both the magistrate and the trial court explicitly
referenced appellant’s 2008 bankruptcy discharge in its judgment entries.
Nevertheless, appellant’s 2008 bankruptcy discharge did not extinguish KeyBank’s
interest in the property.
When a bankruptcy court discharges the debtor’s personal liability on
a note in a Chapter 7 bankruptcy proceeding, it is well-established that the discharge
does not extinguish the mortgage interest in the property. See Johnson v. Home
State Bank, 501 U.S. 78, 111 S.Ct. 2150, 115 L.Ed.2d 66 (1991); Holden at ¶ 26
(mortgage interest survives the discharge in a Chapter 7 bankruptcy of the
underlying debt secured by the mortgage). In Johnson, the United States Supreme
Court explained,
A mortgage is an interest in real property that secures a creditor’s right
to repayment. But unless the debtor and creditor have provided
otherwise, the creditor ordinarily is not limited to foreclosure on the
mortgaged property should the debtor default on his obligation; rather,
the creditor may in addition sue to establish the debtor’s in personam
liability for any deficiency on the debt and may enforce any judgment
against the debtor’s assets generally. A defaulting debtor can protect
himself [or herself] from personal liability by obtaining a discharge in
a Chapter 7 liquidation. However, such a discharge extinguishes only
“the personal liability of the debtor.” Codifying the rule of Long v.
Bullard, 117 U.S. 617, 6 S.Ct. 917, 29 L.Ed. 1004 (1886), the Code
provides that a creditor’s right to foreclose on the mortgage survives or
passes through the bankruptcy.
(Citations omitted.) Johnson at 82-83. See also Holden at ¶ 33 (where a bankruptcy
court relieved debtor’s obligation on a promissory note and the bank sought only to
enforce its security interest against the property, the bank had standing to pursue
foreclosure in rem).
In the instant matter, as noted above, appellant executed and
delivered a mortgage deed conveying the property at issue to KeyBank in order to
secure the payment of the promissory note. KeyBank did not attempt to hold
appellant personally liable for defaulting on the note and mortgage. Rather, in an
attempt to collect the debt secured by the promissory note and mortgage, KeyBank
pursued foreclosure in rem.
We find no merit to appellant’s argument that the trial court failed to
consider or erred in interpreting the 2008 bankruptcy discharge. The trial court
properly concluded that KeyBank could foreclosure on its mortgage and that
KeyBank could not obtain a personal judgment against appellant on the note due to
the bankruptcy discharge issued in the 2008 case.
Based on the foregoing analysis, appellant’s first assignment of error
is overruled.
In her second assignment of error, appellant appears to argue that the
trial court “failed to fully analyze and interpret” appellant’s 2019 bankruptcy
discharge. Appellant’s argument is misplaced and entirely unsupported by the
record.
Appellant did not file her bankruptcy petition in Case No. 19-1415 until
July 23, 2019. The magistrate’s decision was issued on April 29, 2019, and the trial
court’s judgment overruling appellant’s objections and adopting the magistrate’s
decision was filed on June 10, 2019.
Because appellant’s bankruptcy petition was not filed until after the
trial court’s judgment was entered, the trial court did not err in analyzing or
interpreting the bankruptcy discharge order that was subsequently issued.
Accordingly, appellant’s second assignment of error is overruled.
C. Dismissal of CV-17-875380
In her fourth assignment of error, appellant appears to argue that the
trial court erred by dismissing CV-17-875380 without prejudice in February 2018.
As noted above, KeyBank filed a complaint in foreclosure on
February 3, 2017, in CV-17-875380. KeyBank moved for leave to file an amended
complaint on January 25, 2018. On February 2, 2018, the trial court denied
KeyBank’s motion for leave on the basis that the “case has been pending for a year
and must proceed to judgment or dismissal.” The trial court subsequently dismissed
the case without prejudice on February 23, 2018. Following the trial court’s
dismissal without prejudice, KeyBank refiled its complaint in CV-18-897666 on
May 14, 2018.
To the extent that appellant is challenging the trial court’s without-
prejudice dismissal, the record reflects that appellant did not oppose the trial court’s
dismissal in CV-17-875380, or file an appeal challenging the trial court’s dismissal
of the case without prejudice within 30 days. Accordingly, appellant failed to comply
with App.R. 4, and any appeal challenging the trial court’s dismissal is untimely.
Finally, appellant appears to argue that the trial court dismissed the
case for failure to prosecute and pursuant to Civ.R. 41(B), and as such, the trial
court’s dismissal was an adjudication on the merits. Appellant appears to argue that
KeyBank’s filing of its second complaint in CV-18-897666 is a “wrongful foreclosure
action.” Appellant’s brief at 11. Appellant’s argument is entirely unsupported by the
record.
The trial court did not dismiss the first action for failure to prosecute,
nor did the trial court indicate that it was dismissing the case pursuant to Civ.R.
41(B)(1). Furthermore, the trial court did not dismiss the case with prejudice, nor
enter an adjudication upon the merits. KeyBank was not precluded or barred from
filing its complaint in CV-18-897666 after the trial court dismissed CV-17-875380
without prejudice.
For all of the foregoing reasons, appellant’s fourth assignment of error
is overruled.
III. Conclusion
After thoroughly reviewing the record, we affirm the trial court’s
judgment. The record reflects that appellant defaulted on the note and mortgage
and that KeyBank is entitled to foreclose on the property in order to collect the debt
secured by the note and mortgage. Appellant failed to demonstrate the existence of
genuine issues of material fact that precluded judgment as a matter of law in
KeyBank’s favor. Accordingly, the trial court did not err in granting KeyBank’s
motion for summary judgment.
Judgment affirmed.
It is ordered that appellee recover from appellant costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to said 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.
________________________________
FRANK D. CELEBREZZE, JR., JUDGE
EILEEN T. GALLAGHER, A.J., and
MARY EILEEN KILBANE, J., CONCUR