Nationstar Mtge., L.L.L. v. Billock , 2020 Ohio 4723 ( 2020 )

[Cite as Nationstar Mtge., L.L.L. v. Billock, 2020-Ohio-4723.]
IN THE COURT OF APPEALS OF OHIO
SEVENTH APPELLATE DISTRICT
MAHONING COUNTY
NATIONSTAR MORTGAGE LLC., DBA MR. COOPER
Plaintiff-Appellee,
v.
WENDY B. BILLOCK ET AL,
Defendants-Appellants.
OPINION AND JUDGMENT ENTRY
Case No. 19 MA 0107
Civil Appeal from the
Court of Common Pleas of Mahoning County, Ohio
Case No. 2018 CV 00722
BEFORE:
Gene Donofrio, Cheryl L. Waite, David A. D’Apolito, Judges.
JUDGMENT:
Affirmed
Atty. Eric Deighton, Carlisle, McNellie, Rini, Kramer, Ulrich Co., LPA., 24755 Chagrin
Blvd., Suite 200, Cleveland, Ohio 44122, for Plaintiff-Appellee and
Atty. Daniel McGookey, McGookey Law Offices, LLC., 225 Meigs Street, Sandusky,
Ohio 44870, for Defendants-Appellants.
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Dated:
September 28, 2020
Donofrio, J.
{¶1} Defendants-appellants, Wendy and David Billock, (the Billocks), appeal
from a Mahoning County Common Pleas Court judgment granting plaintiff-appellee,
Nationstar Mortgage LLC dba Mr. Cooper (Mr. Cooper), summary judgment on the
foreclosure of a mortgage.
{¶2} The Billocks executed a note with IndyMac Bank, FSB and a mortgage
with MERS as assignee in 2005. Two assignments of mortgage followed leaving Mr.
Cooper the final assignee in March of 2017. In November 2017, the Billocks ceased
making payments on their note. On January 12, 2018, Mr. Cooper sent a letter to the
Billocks to inform them they were past due and in danger of defaulting if they did not make
payment by February 16, 2018.
{¶3} On March 16, 2018, Mr. Cooper filed a complaint in the trial court for
judgment on the note and foreclosure on the mortgage.
{¶4} Mr. Cooper subsequently filed a motion for summary judgment. In support
of its motion, Mr. Cooper attached the affidavit of Theresa Robertson, its document
executive associate who averred to Mr. Cooper’s business records regarding the Billocks’
note and mortgage. In response, the Billocks filed a motion to strike Robertson’s affidavit
arguing she had no personal knowledge of the matters in the affidavit. They also filed a
response in opposition to summary judgment.
{¶5} The trial court overruled the Billocks’ motion to strike the affidavit and
granted Mr. Cooper’s motion for summary judgment on August 21, 2019. The Billocks
filed a timely notice of appeal on September 20, 2019.
{¶6} The Billocks raise one assignment of error for this court’s review. It
provides:
THE TRIAL COURT ERRED IN GRANTING NATIONSTAR’S
MOTION FOR SUMMARY JUDGEMENT.
Case No. 19 MA 0107
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{¶7} An appellate court reviews a summary judgment ruling de novo. Comer v.
Risko, 106 Ohio St. 3d 185, 2005-Ohio-4559, 833 N.E.2d 712, ¶ 8. Thus, we shall apply
the same test as the trial court in determining whether summary judgment was proper.
{¶8} A court may grant summary judgment only when (1) no genuine issue of
material fact exists; (2) the moving party is entitled to judgment as a matter of law; and
(3) the evidence can only produce a finding that is contrary to the non-moving party.
Mercer v. Halmbacher, 9th Dist. Summit No. 27799, 2015-Ohio-4167, ¶ 8; Civ.R. 56(C).
The initial burden is on the party moving for summary judgment to demonstrate the
absence of a genuine issue of material fact as to the essential elements of the case with
evidence of the type listed in Civ.R. 56(C). Dresher v. Burt, 75 Ohio St. 3d 280, 292, 662
N.E.2d 264 (1996). A “material fact” depends on the substantive law of the claim being
litigated. Hoyt, Inc. v. Gordon & Assoc., Inc., 104 Ohio App. 3d 598, 603, 662 N.E.2d 1088
(8th Dist.1995), citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-248, 106 S. Ct.
2505, 91 L. Ed. 2d 202 (1986).
{¶9} If the moving party meets its burden, the burden shifts to the non-moving
party to set forth specific facts to show that there is a genuine issue of material fact. Id.;
Civ.R. 56(E). “Trial courts should award summary judgment with caution, being careful
to resolve doubts and construe evidence in favor of the nonmoving party.” Welco
Industries, Inc. v. Applied Cos., 67 Ohio St. 3d 344, 346, 617 N.E.2d 1129 (1993).
{¶10} To support a summary judgment motion in a foreclosure action, the plaintiff
must present evidence that: “(1) The movant is the holder of the note and mortgage, or
is a party entitled to enforce the instrument; (2) if the movant is not the original mortgagee,
the chain of assignments and transfers; (3) the mortgager is in default; (4) all conditions
precedent have been met; and (5) the amount of principal and interest due.” U.S. Bank,
Natl. Assn. v. Wigle, 7th Dist. Mahoning No. 13 MA 32, 2015-Ohio-2324, ¶ 25, citing
Wachovia Bank v. Jackson, 5th Dist. Stark Co. No. 2010-CA-00291, 2011-Ohio-3203, ¶
40-45.
{¶11} The Billocks raise four issues corresponding to the elements to prove a
foreclosure action for summary judgment: (1) whether Mr. Cooper is the proper party to
enforce the note and mortgage; (2) whether Mr. Cooper met all conditions precedent prior
to filing foreclosure; (3) whether Mr. Cooper properly filed the supporting documents; and
Case No. 19 MA 0107
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(4) whether Mr. Cooper appropriately set forth the amount owed. Finally, they argue the
trial court abused its discretion in finding foreclosure an equitable remedy.
{¶12} The Billocks first contend that the note does not transfer with the mortgage
when assigned, and that a mortgage without a note is unenforceable. If, they argue, the
note was not properly transferred to Mr. Cooper, Mr. Cooper is not entitled to enforce the
instrument. Mr. Cooper points out that the note was indorsed in blank, which renders the
note payable to the possessor.
{¶13} “When an instrument is indorsed in blank, the instrument becomes
payable to bearer and may be negotiated by transfer of possession alone until specially
indorsed.” R.C. 1303.25(B); see also U.S. Bank Natl. Assn. v. Crow, 7th Dist. Mahoning
No. 15 MA 0113, 2016-Ohio-5391, ¶ 66. Moreover, “the holder of the note is the real
party in interest entitled to pursue its rights under the note and mortgage.” Cent. Mtge.
Co. v. Webster, 5th Dist. Stark No. 2011CA00242, 2012-Ohio-4478, ¶ 32, citing
{¶14} The note authenticated by Robertson’s affidavit was indorsed in blank,
rendering it payable to the bearer. Robertson further attested to reviewing the original
collateral documents (the note) and finding the copies attached to the affidavit to be true
and accurate. (Robertson Aff. ¶ 4). In conjunction to having access to and possession
of the note, as well as the collateral tracking sheet produced from Mr. Cooper’s business
records, Mr. Cooper presented evidence to prove it is the holder of the note and mortgage
and is entitled to enforce those documents. (Robertson Aff. Ex. B); (Robertson Aff. Ex.
F). Thus, the Billocks’ first issue lacks merit.
{¶15} The Billocks’ second issue is whether Mr. Cooper met all conditions
precedent before filing for foreclosure. The note sets forth under section 7 headed “Giving
of Notices”:
Unless applicable law requires a different method, any notice that must be
given to me under this Note will be given by delivering it or by mailing it by
first class mail to me at the Property Address above or at a different address
if I give the Note Holder a notice of my different address.
{¶16} Likewise, section 15 of the mortgage titled “Notices” specifies:
Case No. 19 MA 0107
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Any notice to Borrower in connection with this Security Instrument shall be
deemed to have been given to Borrower when mailed by first class mail or
when actually delivered to Borrower’s notice address if sent by other
means.
{¶17} The notice requirement is a mandatory condition precedent to foreclosure.
Metro. Life Ins. Co. v. Lee, 7th Dist. Jefferson No. 18 JE 0006, 2018-Ohio-4915, ¶ 12,
citing Bank of New York Mellon v. Roarty, 7th Dist. Mahoning No. 10-MA-42, 2012-Ohio-
1471, ¶ 25.
{¶18} The Billocks deny that they received the Right to Cure letter attached to
the Robertson affidavit, being the notice specified in the note and mortgage. Robertson
averred the Right to Cure letter was sent via first class mail, as required by the note and
mortgage. (Robertson Aff. ¶ 6). The letter attached to the affidavit averring a first class
mailing displays clearly “Sent via Certified Mail 9314 7100 1170 0943 6317 49.”
(Robertson Aff. Ex. G). There is no accompanying receipt for delivery, nor is there a
return receipt showing a letter unclaimed. The Billocks did not offer rebutting evidence,
by affidavit or otherwise, that they did not receive the letter.
{¶19} “[A]n adverse party may not rest upon the mere allegations or denials of
the party’s pleadings, but the party’s response, by affidavit or as otherwise provided in
this rule, must set forth specific facts showing that there is a genuine issue for trial.” Civ.R.
56(E). There is no evidence to counter the averment of Robertson that the letter was sent
via first class mail. There is only a denial. Without controverting evidence, the Robertson
affidavit stating the letter was sent by first class mail is sufficient proof of this fact. Based
on the mailbox rule, a letter sent via first class mail has a rebuttable presumption of
delivery. Roarty, supra at ¶ 29, quoting Natl. City Mortg. Co. v. Richards, 182 Ohio App3d
534, 2009-Ohio-2556, 913 N.E.2d 1007, ¶ 28 (10th Dist.). Thus, the Billocks’ second issue
lacks merit.
{¶20} The Billocks’ third issue challenges whether Mr. Cooper properly filed the
supporting documents. They argue Robertson’s affidavit is not of evidentiary quality and
the trial court should not have considered it. They contend the affidavit did not establish
that Robertson had personal knowledge, as required by Civ.R. 56(E). The Billocks further
argue the Robertson affidavit did not meet the elements for a business record exception
Case No. 19 MA 0107
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to the hearsay rule laid out in Evid.R. 803(6). Without the affidavit, the Billocks argue, Mr.
Cooper did not meet the evidentiary standard and was not entitled to judgment.
{¶21} Mr. Cooper submitted the documents under the business records
exception to the prohibition of hearsay rule in Evid.R. 803(6) to meet its burden of proof.
Evid.R. 803(6), “Records of regularly conducted activity,” states:
A memorandum, report, record, or data compilation, in any form, of acts,
events, or conditions, made at or near the time by, or from information
transmitted by, a person with knowledge, if kept in the course of a
regularly conducted business activity, and if it was the regular practice of
that business activity to make the memorandum, report, record, or data
compilation, all as shown by the testimony of the custodian or other
qualified witness or as provided by Rule 901(B)(10), unless the source of
information or the method or circumstances of preparation indicate lack of
trustworthiness.
{¶22} In order to be admissible, “a business record must satisfy four elements:
(1) the record must have been kept in the regular course of business; (2) it must stem
from a source that has personal knowledge of the acts, events or conditions; (3) it must
have been recorded at or near the time of the transaction at issue; and (4) a foundation
must be laid by testimony of the custodian of the record or some other qualified individual.”
Bank of Am., N.A. v. Beato, 7th Dist. Mahoning No. 15-MA-0028, 2016-Ohio-8035, ¶ 11,
citing State v. Davis, 116 Ohio St. 3d 404, 2008-Ohio-2, 880 N.E.2d 31, ¶ 171.
{¶23} Robertson averred that she is a Document Execution Associate familiar
with the record-keeping practices of Mr. Cooper, and that the various files and records
associated with loans are added to Mr. Cooper’s records “contemporaneously by a
person with knowledge and in the normal course of business.” (Robertson Aff. ¶ 1-2).
{¶24} The admission or exclusion of relevant evidence lies within the sound
discretion of the trial court. State v. Sage, 31 Ohio St. 3d 173, 510 N.E.2d 343 (1987). In
order to find an abuse of discretion, a reviewing court must find that the trial court's
decision was arbitrary, unconscionable, or unreasonable. Blakemore v. Blakemore, 5
Ohio St. 3d 217, 219, 450 N.E.2d 1140 (1983).
Case No. 19 MA 0107
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{¶25} Under practically identical circumstances, this court upheld the affidavit of
an employee of a loan servicing agent where the agent averred that the records with
regard to the appellant's note and mortgage were transferred to the appellee; that she
was an employee of the appellee's loan servicing agent; that the loan servicing agent
obtained the records in the regular course of its business; that the loan servicing agent
had possession of the note and mortgage; and that the note and mortgage were in default.
PNC Mortg., a Div. of PNC Bank, Nat'l Ass'n v. Krynicki, 7th Dist. Mahoning No. 15 MA
0194, 2017-Ohio-808, 85 N.E.3d 1024, ¶ 15. We then found that the appellant had not
asserted or offered any evidence to suggest that the records were not what they appear
to be or were in any way inaccurate. Id. Thus, we concluded that the trial court did not
abuse its discretion in considering the affidavit and the note, mortgage, and letter attached
as exhibits to the affidavit. Id.
{¶26} The same facts apply here. The Billocks have not offered any evidence to
suggest that the records are not what they appear to be or are in any way inaccurate.
Robertson’s affidavit set a sufficient foundation to admit the documents under the
business records exception. We cannot conclude that the trial court abused its discretion
in considering it.
{¶27} The Billocks also claim that Mr. Cooper failed to bring all of the proper
documents before the court. Specifically, they claim Mr. Cooper failed to show evidence
that MERS was a nominee for IndyMac Bank FSB when the mortgage was first assigned.
Further, they claim Mr. Cooper failed to show the Power of Attorney for Ocwen Loan
Servicing LLC, who signed the second assignment of mortgage as Attorney-in-Fact for
OneWest Bank.
{¶28} We need not address the debtor standing, however, because Ohio has long
recognized “that whenever a promissory note is secured by a mortgage, the note
constitutes the evidence of the debt and the mortgage is a mere incident to the obligation.
Therefore, the negotiation of a note operates as an equitable assignment of the mortgage,
even though the mortgage is not assigned or delivered.” U.S. Bank Natl. Assn. v.
Marcino, 181 Ohio App. 3d 328, 2009-Ohio-1178, 908 N.E.2d 1032, ¶ 52 (7th Dist.), citing
Edgar v. Haines, 109 Ohio St. 159, 164, 141 N.E. 837 (1923) and Kuck v. Sommers, 100
N.E.2d 68, 75, 59 Ohio Law. Abs. 400 (1950). As stated above, the note was indorsed in blank
Case No. 19 MA 0107
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making it payable to the bearer. Mr. Cooper was in possession of the note at the time
this legal action commenced, based on the unrebutted affidavit of Robertson, making it
the assignee of the mortgage.
{¶29} Accordingly, the Billocks’ third issue lacks merit.
{¶30} The Billocks’ fourth issue is whether the amount due under the note was
established. The Billocks bring this issue based on their objection to Robertson’s affidavit,
which was discussed above. The Notice of Default letter and the transaction history,
which were exhibits to the affidavit, established the amount due as $107,853.56.
(Robertson Aff. ¶ 8, Ex. G, Ex. H). Thus, the Billocks’ fourth issue lacks merit.
{¶31} The Billocks’ final argument concerns the equity of foreclosure as an action
to enforce the note. The Billocks argue that an action seeking judgment on a note and
foreclosure on a mortgage raises two distinct issues. This court has stated, “[A]n action
praying for judgment on a note and foreclosure on a mortgage raises two issues. The first
issue presents the legal question of whether the mortgagor has defaulted on the note.
The second issue entails an inquiry into whether the mortgagor's equity of redemption
should be foreclosed.” Natl. City Mortg. v. Piccirilli, 7th Dist. Mahoning No. 08-MA-230,
2011-Ohio-4312, ¶ 27, quoting Metropolitan Life Ins. Co. v. Triskett Illinois, Inc., 97 Ohio
App.3d 228, 234, 646 N.E.2d 528 (1st Dist.1994). The Billocks challenge the equity issue.
{¶32} The Billocks argue that by weighing the potential harms of the two parties,
they will be harmed much more by losing their home than Mr. Cooper would be harmed
from losing the money secured by the mortgage. Of course, this premise would hold true
in almost all foreclosure cases and would render the use of a mortgage – or any security
instrument – fruitless. But “equity of redemption” is a term of art that allows the mortgagor
to redeem the property following default. Deutsche Bank Nat'l Tr. Co. for Holders of
Morgan Stanley ABS Capital I Inc. v. Eversole, 6th Dist. Erie No. E-16-011, 2017-Ohio-
1217, ¶ 28; see generally Hausman v. Dayton, 73 Ohio St. 3d 671, 1995-Ohio-277, 653
N.E.2d 1190, (examining when a mortgagor’s right of redemption is cut off). The Billocks’
right of redemption was not inequitably cut off, nor was this right disputed. In fact, Mr.
Cooper stayed their case at one point in an effort to allow redemption before continuing.
Thus, the Billocks’ final issue lacks merit.
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{¶33} Accordingly, the Billocks’ sole assignment of error is without merit and is
overruled.
{¶34} For the reasons stated above, the trial court’s judgment is hereby affirmed.
Waite, P. J., concurs.
D’Apolito, J., concurs.
Case No. 19 MA 0107
[Cite as Nationstar Mtge., L.L.L. v. Billock, 2020-Ohio-4723.]
For the reasons stated in the Opinion rendered herein, the sole assignment of error
is overruled and it is the final judgment and order of this Court that the judgment of the
Court of Common Pleas of Mahoning County, Ohio, is affirmed. Costs to be taxed against
the Appellant.
A certified copy of this opinion and judgment entry shall constitute the mandate in
this case pursuant to Rule 27 of the Rules of Appellate Procedure. It is ordered that a
certified copy be sent by the clerk to the trial court to carry this judgment into execution.
NOTICE TO COUNSEL
This document constitutes a final judgment entry.