Deutsche Bank Natl. Trust Co. v. Mallonn II , 110 N.E.3d 765 ( 2018 )

[Cite as Deutsche Bank Natl. Trust Co. v. Mallonn II, 2018-Ohio-1363.]
COURT OF APPEALS
STARK COUNTY, OHIO
FIFTH APPELLATE DISTRICT
DEUTSCHE BANK NATL TRUST : JUDGES:
COMPANY, AS INDENTURE TRUSTEE : Hon. John W. Wise, P.J.
AND CUSTODIAN FOR OCWEN : Hon. William B. Hoffman, J.
REAL ESTATE ASSET LIQUIDATING : Hon. Craig R. Baldwin, J.
TRUST 2007-1, ASSET BACKED NOTES, :
SERIES 2007-1 :
:
Plaintiff - Appellee :
: Case No. 2017CA00132
-vs- :
:
RICHARD A. MALLONN II, et al., :
:
Defendants - Appellants : OPINION
CHARACTER OF PROCEEDING: Appeal from the Stark County Court
of Common Pleas, Case No. 16 CV
00279
JUDGMENT: Affirmed
DATE OF JUDGMENT: April 9, 2018
APPEARANCES:
For Plaintiff-Appellee For Defendant-Appellants
CHRISSY M. DUNN WILLIAM C. BEHRENS
JOHN R. WIRTHLIN MARC E. DANN
Blank Rome, LLP The Dann Law Firm
1700 PNC Center P. O. Box 6031040
201 E. 5th Street Cleveland, Ohio 44103
Cincinnati, Ohio 45202
Stark County, Case No. 2017CA00132 2
Baldwin, J.
{¶1} Appellants, Freeway Tavern, Inc., Richard A Mallonn, II, and Jill Mallonn
appeal the Stark County Court of Common Pleas’ June 23, 2017, Judgment Entry and
Decree in Foreclosure granting summary judgment to appellee. Appellee is Deutsche
Bank National Trust Company, As Indenture Trustee and Custodian for Ocwen Real
Estate Asset Liquidating Trust 2007-1, Asset-Backed Notes, Series 2007-1.
STATEMENT OF FACTS AND THE CASE
{¶2} Appellants executed a promissory note on December 22, 1998, payable to
appellee’s predecessor-in-interest, American Business Credit, Inc. ("ABC"), in the original
principal amount of $100,000.00, plus interest. ABC endorsed the Note to The Bank of
New York, as Indenture Trustee under the Indenture dated as of March 1, 1999, ABFS
Mortgage Loan Trust 1999-1 ("BONY"). On August 18, 2006, BONY, through it is
attorney- in-fact, Ocwen Loan Servicing, LLC endorsed the Note in blank. The Note was
secured by an open-end mortgage executed by the appellants on December 22, 1998, in
the amount of $100,000.00, pledging three parcels as collateral. The Mortgage was
recorded December 28, 1998, as Instrument Number 1998094436, in the Stark County,
Ohio records.
{¶3} American Business Credit, Inc. assigned the mortgage on March 10, 2015
to OMAT I REO HOLDINGS, LLC. On November 20, 2015 OMAT I REO HOLDINGS,
LLC, assigned the mortgage to Deutsche Bank National Trust Company, As Indenture
Trustee and Custodian for Ocwen Real Estate Asset Liquidating Trust 2007-1, Asset-
Backed Notes, Series 2007-1. Both mortgage assignments were signed by Ocwen Loan
Servicing, LLC as attorney in fact for the assignor.
Stark County, Case No. 2017CA00132 3
{¶4} On January 1, 2015, appellee issued a notice of default and accelerating
the balance due on the note. Appellee filed a complaint on February 5, 2016 seeking
judgment against the appellants upon the note in the sum of $69,863.54 plus interest from
May 22, 2014, plus additional costs and expenses as well as a foreclosure of the
mortgage and an order that the property be sold.
{¶5} Appellants Richard and Jill Mallon and Freeway Tavern Inc. filed a motion
for leave to file a motion to dismiss as well as a motion for leave to file an answer instanter
on April 12, 2016. Both motions were granted October 21, 2016. Appellee filed its
memorandum opposing the motion to dismiss on November 3, 2016. The motion to
dismiss was denied on November 14, 2016.
{¶6} On May 8, 2017 appellee filed a motion for summary judgment supported
by the affidavit of Jesse Rosenthal, a contract management coordinator of Ocwen Loan
Servicing, LLC, loan servicer for the appellee. Appellants filed a memorandum contra on
June 21, 2017 with the affidavits of Richard Mallonn, II and trial counsel, William C.
Behrens attached. The court granted the motion for summary judgment and issued a
decree of foreclosure on June 23, 2017. Appellants filed a motion to stay the sale and
waive bond on July 26, 2017. On July 31, 2017 appellee withdrew its praecipe for order
of sale and the court issued an entry withdrawing the praecipe for order of sale on August
4, 2017.
{¶7} Appellants filed a notice of appeal on July 17, 2017 and listed seven
assignments of error:
Stark County, Case No. 2017CA00132 4
{¶8} “I. THE TRIAL COURT COMMITED (sic) PLAIN ERROR IN ISSUING A
FINAL JUDGMENT THAT WAS DEVOID OF SUFFICIENTLY DETAILED REASONING
NECESSARY FOR MEANINGFUL APPELLATE REVIEW.”
{¶9} “II. THE TRIAL COURT COMMITED (sic) PLAIN ERROR IN WEIGHING
EVIDENCE, FAILING TO CONSTRUE ALL EVIDENCE IN FAVOR OF THE NON-
MOVING PARTY, AND FAILING TO RESOLVE COMPETING INFERENCES AND
QUESTIONS OF CREDIBILITY IN FAVOR OF THE NON-MOVING PARTY.”
{¶10} “III. THE TRIAL COURT ERRED IN FINDING THAT THE AFFIDAVIT IN
SUPPORT OF SUMMARY JUDGMENT WAS MADE ON PERSONAL KNOWLEDGE
AND/OR TRUSTWORTHY BUSINESS RECORDS, AND WAS THEREFORE
SUFFICIENT TO ESTABLISH THE MOVING PARTY'S INITIAL BURDEN UNDER CIV.
R. 56.”
{¶11} “IV. THE TRIAL COURT ERRED IN FINDING THAT THE PLAINTIFF-
APPELLEE HAD ESTABLISHED ITS RIGHT TO ENFORCE THE NOTE AND
MORTGAGE.”
{¶12} “V. THE TRIAL COURT ERRED IN FINDING THAT THE PLAINTIFF-
APPELLEE HAD ESTABLISHED A DEFAULT AND THE AMOUNT DUE.”
{¶13} “VI. THE TRIAL COURT ERRED IN FINDING THAT THE AFFIRMATIVE
DEFENSES OF THE DEFENDANTS-APPELLANTS DID NOT PRECLUDE SUMMARY
JUDGMENT.”
{¶14} “VII. THE TRIAL COURT ERRED IN FINDING THAT THE PLAINTIFF-
APPELLEE WAS ENTITLED TO SUMMARY JUDGMENT WHERE THE ACTION WAS
BARRED BY R.C.1303.16.”
Stark County, Case No. 2017CA00132 5
STANDARD OF REVIEW
{¶15} Appellants list seven assignments of error attacking the trial court’s grant of
appellee’s motion for summary judgment.
{¶16} Summary judgment proceedings present the appellate court with the unique
opportunity of reviewing the evidence in the same manner as the trial court. Smiddy v.
Wedding Party, Inc., 30 Ohio St. 3d 35, 36, 506 N.E.2d 212 (1987).
{¶17} Civ.R. 56 provides summary judgment may be granted only after the trial
court determines: 1) no genuine issues as to any material fact remain 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 such
evidence most strongly in favor of the party against whom the motion for summary
judgment is made, that conclusion is adverse to that party. Temple v. Wean United, Inc.,
50 Ohio St. 2d 317, 364 N.E.2d 267 (1977).
{¶18} It is well established the party seeking summary judgment bears the burden
of demonstrating that no issues of material fact exist for trial. Celotex Corp. v. Catrett, 477
U.S. 317, 330, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). The standard for granting
summary judgment is delineated in Dresher v. Burt, 75 Ohio St. 3d 280, 293, 1996-Ohio-
107, 662 N.E.2d 264 (1996): “ * * * a party seeking summary judgment, on the ground
that the nonmoving party cannot prove its case, bears the initial burden of informing the
trial court of the basis for the motion, and identifying those portions of the record that
demonstrate the absence of a genuine issue of material fact on the essential element(s)
of the nonmoving party's claims. The moving party cannot discharge its initial burden
under Civ.R. 56 simply by making a conclusory assertion the nonmoving party has no
Stark County, Case No. 2017CA00132 6
evidence to prove its case. Rather, the moving party must be able to specifically point to
some evidence of the type listed in Civ.R. 56(C) which affirmatively demonstrates the
nonmoving party has no evidence to support the nonmoving party's claims. If the moving
party fails to satisfy its initial burden, the motion for summary judgment must be denied.
However, if the moving party has satisfied its initial burden, the nonmoving party then has
a reciprocal burden outlined in Civ.R. 56(E) to set forth specific facts showing there is a
genuine issue for trial and, if the nonmovant does not so respond, summary judgment, if
appropriate, shall be entered against the nonmoving party.” The record on summary
judgment must be viewed in the light most favorable to the opposing party. Williams v.
First United Church of Christ, 37 Ohio St. 2d 150, 309 N.E.2d 924 (1974).
{¶19} ***[t]o properly support a motion for summary judgment in a
foreclosure action, a plaintiff 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 satisfied; and (5) the amount
of principal and interest due.
Wachovia Bank of Delaware, N.A. v. Jackson, 5th Dist. Stark No. 2010-CA-00291, 2011-
Ohio-3203, ¶¶ 40-45.
ANALYSIS
{¶20} The appellant’s first assignment of error, that the trial court’s entry granting
summary judgment lacks sufficient detail to permit review, requires that we review the
breadth of our obligation to conduct a de novo review of the decision.
Stark County, Case No. 2017CA00132 7
{¶21} A de novo review requires an independent review of the trial court's decision
without any deference to the trial court's determination. Brown v. Scioto Cty. Bd. of
Commrs., 87 Ohio App. 3d 704, 711, 622 N.E.2d 1153 (4th Dist.1993) as cited in State v.
Standen, 9th Dist. No. 07CA009123, 173 Ohio App. 3d 324, 2007-Ohio-5477, 878 N.E.2d
657, ¶ 7. “Thus, viewing the pleadings in the light most favorable to the [appellee], we
must determine whether [appellee] was entitled to judgment as a matter of law.” Civ.R.
56(C). Troyer v. Janis, 132 Ohio St. 3d 229, 2012-Ohio-2406, 971 N.E.2d 862, ¶ 6 (2012).
Accordingly, we apply the same standard as the trial court and court of appeals in this
case. Bonacorsi v. Wheeling & Lake Erie Ry. Co., 95 Ohio St. 3d 314, 2002-Ohio-2220,
767 N.E.2d 707, ¶ 24 (2002). “*** we afford no deference to the trial court's decision and
independently review the record to determine whether summary judgment is appropriate.”
Tornado Techs., Inc. v. Quality Control Inspection, Inc., 8th Dist. No. 97514, 2012-Ohio-
3451, 977 N.E.2d 122, ¶13.
{¶22} Considering the requirements imposed upon this court by precedent and
the Ohio Civil Rules, the content of the trial court’s entry has little influence. While the
decision of the trial court must contain the basic requirements, our review is focused upon
the record and not the written decision of the trial court.
{¶23} We reject the appellant’s suggestion we adopt the rational of the court in
Schutte v. Summit Cty. Sheriff's Office, 9th Dist. Summit No. CV 28203, 2017-Ohio-4172.
In that case the court reversed the trial court’s grant of a motion for summary judgment
“***because we cannot discern the trial court's basis for the award of summary judgment
in Defendants' favor on all four counts of the complaint ***”. Schutte at ¶ 11. The cases
cited by that court in support of its remand do not address the standard of review for
Stark County, Case No. 2017CA00132 8
summary judgment, but involve abuse of discretion or, in one case, an admonishment
from the court of appeals urging the trial court to set forth its reasoning in its entry so that
the court of appeals may conduct a review of the trial court’s exercise of discretion.
Because we are obligated to conduct a de novo review of the entire record, without any
deference or reliance on the trial court’s ruling, we must respectfully decline to follow the
holding in Schutte.
{¶24} Appellants argues that the rapidity with which the trial court issued its ruling
and the fact that it did not reference their memorandum opposing summary judgment
demonstrates that the trial court failed to consider their arguments. The record shows the
memorandum opposing the motion for summary judgment was filed on June 21, 2017
and the judgment entry was not journalized until June 23, 2017. Nothing within record
demonstrates that the court acted inappropriately under the circumstances.
{¶25} Because we will not follow the holding in Schutte, because we are obligated
to conduct a de novo review of the record, and because the entry issued by the court
does fulfill the basic requirements for a judgment entry granting summary judgment and
was timely journalized, we must overrule appellant’s first assignment of error.
{¶26} In their second assignment of error, appellants contend the trial court erred
by weighing the evidence, failing to construe all evidence in favor of the nonmoving party,
and failing to resolve competing inferences and questions of credibility in favor of the non-
moving party, but appellants do not “set forth specific facts demonstrating there is a
genuine issue of material fact for trial.” Vahila v. Hall, 77 Ohio St. 3d 421, 429, 1997-Ohio-
259, 674 N.E.2d 1164 (1997), citing Dresher, supra.
Stark County, Case No. 2017CA00132 9
{¶27} Appellants’ unsupported contention that the trial court acted inappropriately
is unpersuasive. The case cited by appellants, Nationstar Mtge., L.L.C. v. Waisanen, 9th
Dist. Summit No. 16CA010904, 2017-Ohio-131 is not helpful to appellants. In that case,
the appellate court provided clear examples of the weighing of evidence that violated the
requirements of Civ.R. 56.
This included, but was not limited to, for example, the trial court's
evaluation of the evidence submitted by the parties regarding Nationstar's
communications with the Waisanens after the loan went into default. In that
context, the trial court reviewed the parties' differing versions of the
summary judgment evidence and noted the Waisanens' failure to submit
additional “corroborating evidence” from Nationstar's records to supplement
their own.
Nationstar Mtge., at ¶ 9
{¶28} In the case at bar, appellants contend “Given the contradictory and
competing evidence submitted by the parties, summary judgment was inappropriate” but
they neglect to provide citations to the record for examples of that alleged contradictory
or competing evidence, and thereby fail to fulfill their obligation to “set forth specific facts
demonstrating there is a genuine issue of material fact for trial.” Vahila, supra.
{¶29} For the forgoing reasons, appellant’s second assignment of error is
overruled.
{¶30} Appellant’s assignments of error three through five are attacks on the
propriety of granting summary judgment and require that we review the materials offered
supporting and opposing the motion for summary judgment.
Stark County, Case No. 2017CA00132 10
{¶31} Appellee supported its motion for summary judgment with the affidavit of
Jesse Rosenthal, a contract management coordinator of Ocwen Loan Servicing, LLC,
loan servicer for appellee, with accompanying documents. We hold that this affidavit and
the attachments satisfied the movant’s burden of showing that no genuine issue of
material fact existed, shifting the burden to appellee to supply contrary evidence.
{¶32} Mr. Rosenthal establishes his competency by identifying himself as a
contract management coordinator of Ocwen Loan Servicing, LLC, loan servicer for the
appellee and confirms he has personal knowledge of the facts and matters stated within
the affidavit. The nature of the facts in the affidavit combined with the identity of the affiant
creates a reasonable inference that Mr. Rosenthal has personal knowledge of the facts
in the affidavit. PNC Bank, N.A. v. Price, 5th Dist. No. 15AP0015, 2016-Ohio-2887, 64
N.E.3d 402, ¶ 21
{¶33} Mr. Rosenthal states that appellee is in possession of the original
promissory note and that the copy attached to his affidavit is a true and accurate copy of
that note. He states that a true and accurate copy of the mortgage, assignments of
mortgage, demand letter, and account history are attached to his affidavit. The affidavit
is properly notarized.
{¶34} Rosenthal describes the records attached to his affidavit as business
records kept in the regular course of business, that he is familiar with and has access to
the records, and that the records were made or maintained in the regular and usual course
of business. He also confirms records were made at or near the time by, or from
information from, a person with knowledge of the transactions. Mr. Rosenthal also
provides sufficient evidence to demonstrate that the mortgagor is in default, that all
Stark County, Case No. 2017CA00132 11
conditions precedent have been satisfied and he states the amount of principal and
interest due. Consequently, the affidavit and the attached documents are adequate to
satisfy the requirements for issuing a summary judgment in the context of a foreclosure
action, Wachovia, supra, ¶40-45, and the burden shifts to appellant to demonstrate a
material fact remains for trial. Appellants “may not rest upon the mere allegations or
denials of his pleadings, but [their] response, by affidavit or as otherwise provided in this
rule, must set forth specific facts showing that there is a genuine issue for trial.” Dresher,
supra.
{¶35} Appellants offered the affidavits of appellant, Richard Mallonn II, and
appellant’s counsel, William C. Behrens. Mr. Behren’s affidavit serves only to identify four
exhibits attached to the affidavit and describes them as documents received in response
to defendant’s first set of request for admissions, interrogatories, and request for
production of documents. Mr. Mallonn’s affidavit describes the note in the foreclosure
action but is ambiguous regarding payments made after December 2013. In paragraph 3
he states “to the best of my recollection, all payments due were made on or around the
dates due.” In paragraph 6 of his affidavit he states “I made all payments on or around
the due dates from September 2007 until Ocwen Loan Servicing, LLC, refused to accept
additional payments.” Mr. Mallonn’s sworn statements do not refute appellee’s assertion
that the “last payment received was applied to the May, 2014 payment” (Rosenthal
Affidavit, ¶ 6) and therefore do not create a genuine dispute over the material fact of
default in payment. His contention that he made payments on or around the due dates
does not provide evidence that he made timely and full payment of all amounts due under
Stark County, Case No. 2017CA00132 12
the note prior to the filing of the complaint. Further, he concedes that he stopped making
payments on the note.
{¶36} Within his affidavit Mr. Mallonn questions the calculation of the amount of
the unpaid principal balance and expresses frustration in obtaining an explanation for the
calculation. These issues are matters appellants could have pursued through discovery,
but chose not to do so. Mr. Mallonn’s concerns, frustration, or current questions are
insufficient to create a genuine issue of material fact prohibiting summary judgment. For
those reasons we hold that neither Mr. Mallonn’s nor Mr. Behren’s affidavit raises a
genuine issue of material fact that would bar summary judgment.
{¶37} For the forgoing reasons, we hold that the appellee satisfied the burden of
the movant under Civ.R. 56 and appellants’ affidavits and attachments are insufficient to
create a genuine issue of material fact. We proceed to review the remaining assignments
of error to determine whether summary judgment is appropriate.
{¶38} Appellants’ third assignment of error alleges one discrepancy between the
documents attached to the Rosenthal affidavit and the documents provided in discovery
and concludes from that alleged defect that Mr. Rosenthal’s affidavit should be rejected
because it is not based upon personal knowledge or is based upon inaccurate records.
Appellant’s argument that there are differences in documents provided in discovery by
appellee and documents attached to the Rosenthal affidavit is not persuasive. The
appellant compares a document captioned Life of the Loan Payment History with a
document captioned Detailed Transaction History with no acceptable evidence
supporting their argument that the alleged discrepancy is material or that the asserted
conflict has an impact on any material fact. Appellant insists that this conflict raises
Stark County, Case No. 2017CA00132 13
questions regarding the reliability of all of the evidence attached to the Rosenthal affidavit,
but the record before the court contains no Civ.R. 56 quality evidence to support that
conclusion. Appellant is asking the court to draw an inference that the difference between
the documents is material and, from that inference, draw a second inference that the
materials attached to the Rosenthal affidavit are unreliable. We must reject the appellant’s
invitation to stack an inference upon an inference as impermissible. Boles v. Montgomery
Ward & Co., 153 Ohio St. 381, 388, 92 N.E.2d 9, 13 (1950); See also Haughey v. Twins
Group, Inc., 2nd Dist. Champaign No. 2004-CA-7, 2005-Ohio-1371, ¶ 17 Consequently,
we must reject the basis of their argument that Mr. Rosenthal’s affidavit is defective due
to the discrepancy between these two different documents. Appellants’ third assignment
of error is overruled.
{¶39} In their fourth assignment of error, appellants allege an omission in the
affidavit of Jesse Rosenthal and the attached documents invalidates the transfer of the
note and the mortgage and undermines appellees claim that it is entitled to enforce the
note and mortgage. Specifically, they assert that appellee failed to include a copy of the
power of attorney authorizing the signature on the second allonge and that therefore
appellee is not the holder of the note. They further assert that the assignment is defective
due to a difference in the names listed on the documents. Appellees offer no facts to
contradict James Rosenthal’s statement that appellee is the holder of the note and
mortgage, but instead seeks to undermine the truth of that assertion by referring to alleged
defects in assignment of those documents.
{¶40} Appellants challenge must fail because they have no standing to challenge
the assignment of the note and mortgage. “[B]ecause a debtor is not a party to the
Stark County, Case No. 2017CA00132 14
assignment of a note and mortgage, the debtor lacks standing to challenge their validity.”
U.S. Bank, N.A. v. Lawson, 5th Dist. Delaware No. 13CAE030021, 2014-Ohio-463, ¶ 39,
citing Deutsche Bank Natl. Tr. Co. v. Whiteman, 10th Dist. Franklin No. 12AP-536, 2013-
Ohio-1636, ¶ 16; See Also U.S. Bank N.A. v. Howard, 5th Dist. Perry No. 15-CA-00002,
2015-Ohio-5230, ¶¶ 23-24 and Bank of New York Mellon v. Ettayem, 5th Dist. Delaware
No. 14 CAE 04 0020, 2014-Ohio-4487, ¶ 78. We acknowledge that the status of the
holding in Deutsche has been challenged by another panel in the Tenth District, U.S.
Bank Natl. Assn. v. George, 10th Dist. No. 14AP-817, 2015-Ohio-4957, 50 N.E.3d 1049,
¶ 24, but we share the concern of the dissent in that case and the Second District Court
of Appeals that the ruling of U.S. Bank is dicta and we are unwilling to rely on that case
as a foundation for change in our precedent. Id at ¶ 44-45; U.S. Bank Natl. Assn. for
Registered Holders of GE Commercial Mtge. Corp., Commercial Mtge. Pass-Through
Certificates, Series 2006-C1 v. Courthouse Crossing Acquisitions, LLC, 2nd Dist.
Montgomery No. 27648, 2017-Ohio-9231, ¶ 36 (As a result, the position of the Tenth
District Court of Appeals is unclear.”)
{¶41} For those reasons, appellant’s fourth assignment of error is overruled.
{¶42} In their fifth assignment of error, appellants attack the quality of the evidence
establishing the principal and interest due under the note by repeating their contention
that the information in the affidavit is unreliable and questioning how the amount due
under the note could be possible. We have addressed the appellant’s contention
regarding the reliability of the affidavit and attached evidence and concluded that the
affidavit provides satisfactory evidence in the context of a motion for summary judgment
to establish the principal and interest amount due. We have previously held that:
Stark County, Case No. 2017CA00132 15
“***an averment of outstanding indebtedness in the affidavit of a bank loan
officer with personal knowledge of the debtor's account is sufficient to
establish the amount due and owing on the note, unless the debtor refutes
the averred indebtedness with evidence that a different amount is owed.
PNC Bank, N.A. v. Price, 5th Dist. No. 15AP0015, 2016-Ohio-2887, 64 N.E.3d 402, ¶ 37
The appellants have not offered any evidence to demonstrate a different amount is owed.
Their incredulity regarding the amount due cannot serve as a bar to summary judgment.
Appellants’ fifth assignment of error is overruled.
{¶43} Appellants’ contend in their sixth assignment of error that the affirmative
defenses listed in their answer prevents the grant of summary judgment, but provide no
authority for such conclusion. We find this flies in the face of well-established precedent
that prohibits parties from relying on the allegations in the pleadings to oppose a motion
for summary judgment. Dresher, supra. Appellants’ sixth assignment of error is therefore
overruled.
{¶44} Appellants next argue, in their seventh assignment of error, that a grant of
summary judgment was inappropriate because the action was barred by the statute of
limitations. Appellants contend appellee delivered letters dated January 18, 2005
notifying appellants of default and the intent to accelerate the entire amount due if the
account was not brought current. Appellants argue that appellee was obligated to bring
an action on the note within six years of the date of the letters pursuant to R.C.
1303.16(B), but the record contains no evidence of a continued default after the delivery
of the letters. Instead, the record shows that appellants continued to make payments
toward the balance due on the note and appellee accepted the payments, refuting any
Stark County, Case No. 2017CA00132 16
contention that the default was not cured or the appellee pursued an acceleration of the
note. The record shows that appellants continued to make payments that were accepted
by appellees and:
It is the general rule that the unconditional acceptance of past-due
installments of principal or interest constitutes a waiver of the right to
exercise an option under an acceleration clause in a mortgage or deed of
trust based upon a default in the payment of such principal or interest, at
least where the payment is made before the exercise of the option granted
by the acceleration clause.
{¶45} Bank One of Dover v. Bixler, 5th Dist. Tuscarawas No. 1567, 1982 WL
2962, *1
{¶46} The January 18, 2005 letters are insufficient to establish that the appellee
exercised its option to accelerate the amount due. In fact, the evidence in the record can
only be interpreted as a waiver of the right to accelerate in 2005 as payments were made
and accepted. Consequently, R.C. 1303.16(B) is inapplicable.
{¶47} Appellants’ seventh assignment of error is overruled.
Stark County, Case No. 2017CA00132 17
{¶48} For the forgoing reasons, the decision of the Stark County Court of Common
Pleas is affirmed. Costs assessed to appellants.
By: Baldwin, J.
John Wise, P.J. and
Hoffman, J. concur.