Bank of Am., N.A. v. Edwards

[Cite as Bank of Am., N.A. v. Edwards, 2017-Ohio-4343.]
STATE OF OHIO ) IN THE COURT OF APPEALS
)ss: NINTH JUDICIAL DISTRICT
COUNTY OF LORAIN )
BANK OF AMERICA, N.A. C.A. No. 15CA010848
15CA010851
Appellee/Cross-Appellant
v.
APPEAL FROM JUDGMENT
JOHN D. EDWARDS, et al. ENTERED IN THE
COURT OF COMMON PLEAS
Appellants/Cross-Appellees COUNTY OF LORAIN, OHIO
CASE No. 14CV183464
DECISION AND JOURNAL ENTRY
Dated: June 19, 2017
CANNON, Judge.
{¶1} Appellants/Cross-Appellees, John and Stacey Edwards (collectively, “the
Edwards”), appeal from the judgment of the Lorain County Court of Common Pleas.
Additionally, Appellee/Cross-Appellant, Bank of America, N.A. (“Bank of America”), appeals
from the court’s judgment. This Court affirms in part and reverses in part.
I.
{¶2} On November 29, 2007, John Edwards signed a $151,800 note in favor of Ross
Mortgage Corporation (“Ross Mortgage”) for certain real property located on Cooper Foster
Road in Vermillion (“the Property”). The FHA-insured loan was secured by a mortgage on the
Property in favor of Mortgage Electronic Registration Systems, Inc. (“MERS”), as nominee for
Ross Mortgage. The mortgage identified John Edwards as the mortgagor, but Stacey Edwards
also signed the mortgage for the purpose of releasing her dower interest. Both the note and the
mortgage for the Property were later assigned to other banks.
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{¶3} On May 12, 2014, Bank of America filed a complaint in foreclosure against the
Edwards, alleging that it was the current holder of the note and mortgage for the Property. Bank
of America alleged that the Edwards had defaulted on the note on September 1, 2009, and that it
was entitled to accelerate the balance of the loan and seek a decree of foreclosure. The Edwards
filed an answer with leave of court and raised numerous defenses. Relevant to this appeal, they
alleged that Bank of America lacked standing and had brought suit without first satisfying certain
conditions precedent to foreclosure.
{¶4} Bank of America ultimately moved for summary judgment, and the Edwards filed
a brief in opposition. The court then received a reply brief from Bank of America, a sur-reply
from the Edwards, and a response from Bank of America. Following its review of the filings, the
trial court issued its judgment. The court found that Bank of America had standing to bring suit,
but was not entitled to summary judgment. The court found that Bank of America had failed to
prove that, before filing suit, it had complied with certain HUD regulations that were conditions
precedent to foreclosure. The court wrote: “[Bank of America’s] Motion for Summary
Judgement is denied, [and its] complaint is hereby dismissed without prejudice. This is a
dismissal on the merits. Case Closed.”
{¶5} After the court entered judgment, the Edwards filed a motion to clarify, noting
that the court simultaneously had dismissed the matter without prejudice and had ordered a
dismissal on the merits. The Edwards asked the court to specify that its dismissal was with
prejudice rather than without prejudice. Before the trial court addressed the Edwards’ motion,
both the Edwards and Bank of America appealed from the court’s original judgment entry.
{¶6} This Court consolidated the Edwards’ and Bank of America’s appeals for
purposes of briefing, argument, and decision. Their appeals are now before us and, collectively,
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raise four assignments of error for our review. For ease of analysis, we rearrange several of the
assignments of error.
II.
{¶7} Before turning to the merits of this appeal, this Court pauses to address two points
that concern the scope of our review in this matter. First, a dismissal without prejudice is
ordinarily not a final, appealable order because it “constitutes a dismissal other than on the merits
* * *.” Smirz v. Smirz, 9th Dist. Lorain No. 13CA010408, 2014-Ohio-3869, ¶ 10. Here,
however, the trial court specifically disposed of this matter “on the merits” with the intention of
prohibiting Bank of America from proceeding against the Edwards on the basis of their current
loan default. As further explained below, the court mistakenly referred to the dismissal as one
“without prejudice” before later attempting to amend its entry to reflect that the dismissal was
“with prejudice.” Under these particular facts and circumstances, the general bar against appeals
from dismissals without prejudice does not apply. See id. The court’s judgment entry
constitutes a final, appealable order from which the parties’ may seek relief.
{¶8} Second, this matter involves several procedural abnormalities that we note, but
reserve judgment upon due to the arguments raised on appeal. We note that only Bank of
America moved for summary judgment, but rather than entering judgment in its favor or finding
genuine issues of material fact remained for trial, the court entered a judgment of dismissal in
favor of a nonmoving party (i.e., the Edwards). We further note that the basis for the trial court’s
dismissal on the merits was that the bank had not satisfied a condition precedent to foreclosure.
But see Fifth Third Mtge. Co. v. Berman, 10th Dist. Franklin No. 15AP-394, 2015-Ohio-4466.
This Court will not address issues that neither party has raised, so we caution that our decision,
to the extent it does not address certain issues, should not be construed as a ratification of the
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lower court proceedings. Consistent with this Court’s general practice, the scope of our review
is limited to the issues the parties have chosen to raise in their respective assignments of error.
See Citizens Bank Natl. Assn. v. Ranch Rd. Superior Properties, L.L.C., 9th Dist. Summit No.
28023, 2016-Ohio-7590, ¶ 11, quoting State v. Thomas, 9th Dist. Summit No. 27266, 2015-
Ohio-2935, ¶ 40 (“‘An appellant’s assignment of error provides a roadmap for our review and, as
such, directs our analysis of the trial court’s judgment.’”). With the foregoing in mind, we turn
to the parties’ arguments.
THE EDWARDS’ ASSIGNMENT OF ERROR II
THE TRIAL COURT ERRED WHEN IT DETERMINED THAT BANK OF
AMERICA HAD STANDING TO ENFORCE THE NOTE AND MORTGAGE.
{¶9} In their second assignment of error, the Edwards argue that the trial court erred
when it concluded that Bank of America had standing to enforce the note and mortgage on the
Property. We do not agree.
{¶10} “It is fundamental that a party commencing litigation must have standing to sue in
order to present a justiciable controversy and invoke the jurisdiction of the common pleas court.”
Fed. Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St. 3d 13, 2012-Ohio-5017, ¶ 41. “In
general, ‘[t]o properly support a motion for summary judgment in a foreclosure action, a plaintiff
must present evidentiary-quality materials showing: (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 mortgagor is in default; (4) all
conditions precedent have been met; and (5) the amount of principal and interest due.’”
(Alteration sic.) Deutsche Bank Natl. Trust Co. v. James, 9th Dist. Summit No. 28156, 2016-
Ohio-7950, ¶ 8, quoting HSBC Mtge. Servs., Inc. v. Watson, 3d Dist. Paulding No. 11-14-03,
2015-Ohio-221, ¶ 24. “‘The lack of standing at the commencement of a foreclosure action
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requires dismissal of the complaint * * *.’” Deutsche Bank Natl. Trust Co. v. Dvorak, 9th Dist.
Summit No. 27120, 2014-Ohio-4652, ¶ 7, quoting Schwartzwald at ¶ 40.
{¶11} In support of its motion for summary judgment, Bank of America produced the
affidavit of Carol Ann Yagusic, one of its assistant vice presidents. Yagusic averred that she had
personal knowledge of Bank of America’s business records, including those records associated
with the loan on the Property. She averred that Bank of America, directly or through an agent,
held the note for the loan at the time of filing its foreclosure complaint and that “the original note
was sent to counsel for [Bank of America’s] office prior to the filing of the Complaint at
counsel’s request.”1 Yagusic attached a copy of the note to her affidavit and incorporated it by
reference as a true and accurate copy.
{¶12} Yagusic also attached to her affidavit a copy of the mortgage that the Edwards
signed and an assignment of that mortgage from MERS, as nominee for Ross Mortgage, to BAC
Home Loans Servicing, LP, FKA Countrywide Home Loans Servicing, LP. Yagusic attested to
the fact that, on July 1, 2011, BAC Home Loans Servicing, LP merged with Bank of America.
To evidence her attestation of the merger, she incorporated by reference (1) a copy of the
Institutional History for BAC Home Loans Servicing, LP from the National Information Center;
and (2) a copy of a Certificate of Merger from the Office of the Secretary of State in Texas.
Both documents indicate that, effective July 1, 2011, BAC Home Loans Servicing, LP merged
with Bank of America.
{¶13} The copy of the note for the Property that Yagusic attached to her complaint
contains four endorsements. Specifically, it contains: (1) a special endorsement from Ross
1
We would note that the Edwards never disputed Bank of America’s later assertion in its reply
brief that, on March 23, 2015, their attorney viewed the original note at Bank of America’s
counsel’s office.
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Mortgage to Countrywide Bank, FSB; (2) a special endorsement from Countrywide Bank, FSB
to Countrywide Home Loans Servicing LP; (3) a special endorsement from Countrywide Home
Loans Servicing, LP to Countrywide Bank, FSB; and (4) a blank endorsement by “Bank of
America, N.A. successor by merger to Countrywide Bank, FSB.” Although all four
endorsements are undated, the blank endorsement by Bank of America is stamped below the
other three endorsements that appear on the note. In her affidavit, Yagusic attested to the fact
that, on April 27, 2009, Countrywide Bank, FSB was acquired by Bank of America. To
evidence her attestation of the merger, she incorporated by reference a copy of the Institutional
History of “Centennial Branch” from the National Information Center. The Institutional History
indicates that, on April 27, 2009, Countrywide Bank, FSB was acquired by Bank of America.
Moreover, the endorsements on the note (1) from Countrywide Home Loans Servicing, LP to
Countrywide Bank FSB, and (2) from Bank of America in blank are both signed by the same
individual: “Michele Sjolander.”
{¶14} The Edwards opposed Bank of America’s motion for summary judgment on the
basis that the bank had not shown that it was the current holder of either the note on the Property
or their mortgage. The Edwards argued that Bank of America had failed to set forth “legitimate
summary judgment evidence” that it had acquired Countrywide Bank FSB, such that it had the
authority to endorse the note in blank following the last special endorsement to Countrywide
Bank FSB. They asserted that none of the documents attached to Yagusic’s affidavit were
business records of Bank of America, such that she could attest to their veracity on the basis of
personal knowledge. Likewise, they challenged Bank of America’s evidence with respect to the
chain of assignment on their mortgage. They argued that Bank of America failed to explain why
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BAC Home Loans Servicing, LP would have been assigned their mortgage when, according to
the endorsements on their note, that entity never came into possession of their note.
{¶15} In response to the Edwards’ brief in opposition, Bank of America filed a reply
brief and another affidavit. Its second affidavit was from Celia Hernandez, another one of its
assistant vice presidents. Hernandez averred that she had personal knowledge of Bank of
America’s business records and that she had personally examined the records before completing
her affidavit. She further averred that “from a review of the business records Countrywide Bank,
FSB * * * merged with and into Bank of America, National Association.”
{¶16} Upon review, we cannot conclude that the trial court erred when it determined
that Bank of America had standing to commence suit against the Edwards. “The holder of a note
endorsed in blank is the possessor of the note. Further, a party may gain interest in a note or
mortgage through a chain of mergers.” (Internal citations omitted.) Bank of Am., N.A. v.
McCormick, 9th Dist. Summit No. 26888, 2014-Ohio-1393, ¶ 8. Bank of America set forth
evidence that the Edwards’ note was endorsed in blank and that it was in possession of their note
when it filed its complaint. Further, it set forth evidence that it previously (1) had merged with
Countrywide Bank, FSB, such that it had the authority to endorse the note in blank, and (2) had
merged with BAC Home Loan Servicing, LP, such that it had an interest in the Edwards’
mortgage. Its first affiant attested to the fact that Bank of America had merged with both entities
and set forth documents confirming the mergers. See Wells Fargo Bank, N.A. v. Horn, 142 Ohio
St.3d 416, 2015-Ohio-1484, ¶ 19 (affiant’s attestations regarding merger, viewed in conjunction
with supporting documents, verified that the bank had standing to file foreclosure). In response,
the Edwards failed to set forth any evidence showing that Bank of America had not, in fact,
merged with those entities before filing its complaint. Thus, there was no conflicting evidence in
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the record so as to create a genuine issue of material fact on the issue of whether Bank of
America was the holder of the note and mortgage at the time it filed its complaint. Compare
PNC Bank, Natl. Assn. v. West, 9th Dist. Wayne No. 12CA0061, 2014-Ohio-161, ¶ 13. Even
assuming that it was error for the court to consider the uncertified merger documents attached to
Yagusic’s affidavit, her affidavit itself was evidence of the mergers, and the Edwards made no
attempt to present conflicting evidence. See BAC Home Loans Servicing, LP v. Taylor, 9th Dist.
Summit No. 26423, 2013-Ohio-355, ¶ 8. Upon review, the Edwards have not shown that the
trial court erred by concluding that Bank of America had standing to bring this action. As such,
their second assignment of error is overruled.
BANK OF AMERICA’S ASSIGNMENT OF ERROR II
THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT TO
THE EDWARDS, FINDING NOT ONLY THAT BANK OF AMERICA, N.A.,
HAD FAILED TO SATISFY A CONDITION PRECEDENT TO
FORECLOSURE IN COMPLYING WITH HUD REGULATIONS, BUT THAT
BANK OF AMERICA, N.A., COULD NEVER SATISFY THOSE
REGULATIONS, THEREBY IGNORING THE FACT THAT THE TIMING
FOR COMPLIANCE WITH THOSE REGULATIONS HAVE LONG BEEN
HELD AS ASPIRATIONAL AND NOT MANDATORY.
{¶17} In its second assignment of error, Bank of America argues that the trial court
erred when it granted summary judgment to the Edwards for the reasons set forth in the
assignment of error. We do not agree that the court erred by finding Bank of America failed to
satisfy a condition precedent and finding that this compliance was mandatory.
{¶18} Appellate review of summary judgment is de novo. Grafton v. Ohio Edison Co.,
77 Ohio St. 3d 102, 105 (1996). Summary judgment is appropriate under Civ.R. 56 when: (1)
there is no genuine issue of material fact; (2) the moving party is entitled to judgment as a matter
of law; and (3) viewing the evidence most strongly in favor of the nonmoving party, reasonable
9
minds can come to but one conclusion and that conclusion is adverse to the nonmoving party.
Temple v. Wean United, Inc., 50 Ohio St. 2d 317, 327 (1977), citing Civ.R. 56(C).
{¶19} The party moving for summary judgment bears the initial burden of informing the
trial court of the basis for the motion and pointing to parts of the record that show the absence of
a genuine issue of material fact. Dresher v. Burt, 75 Ohio St. 3d 280, 292 (1996). The movant
must point to some evidence in the record of the type listed in Civ.R. 56(C) in support of the
motion. Id. at 292-293. Once this burden is satisfied, the nonmoving party has the burden, as set
forth in Civ.R. 56(E), to offer specific facts showing a genuine issue for trial. Id. at 293. The
nonmoving party may not rest upon the mere allegations and denials in the pleadings but instead
must point to, or provide, some evidentiary material that demonstrates a genuine dispute over a
material fact. In re Fike Trust, 9th Dist. Wayne No. 06CA0018, 2006-Ohio-6332, ¶ 10.
{¶20} Initially, we note that “‘[a]n appellant’s assignment of error provides a roadmap
for our review and, as such, directs our analysis of the trial court’s judgment.” Citizens Bank
Natl. Assn., 2016-Ohio-7590, at ¶ 11, quoting Thomas, 2015-Ohio-2935, at ¶ 40. In its reply
brief, Bank of America argues that the trial court erred by granting summary judgment to the
Edwards because the Edwards never independently moved for summary judgment. The bank did
not, however, separately assign as error that the trial court procedurally erred when it disposed of
this case by entering judgment in favor of the Edwards in the manner that it did. Moreover, reply
briefs “should not set forth new arguments.” Smith v. Ray Esser & Sons, Inc., 9th Dist. Lorain
No. 10CA009798, 2011-Ohio-1529, ¶ 15. Because Bank of America has not separately assigned
this issue as error, we decline to address it. See Citizens Bank Natl. Assn. at ¶ 11. We limit our
review to Bank of America’s claim that the trial court erred by granting summary judgment to
the Edwards on the merits.
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{¶21} “This Court has held that where a mortgage mandates compliance with HUD
regulations, such compliance is a condition precedent to bringing a foreclosure action.” Wells
Fargo Bank, N.A. v. Horn, 9th Dist. Lorain No. 12CA010230, 2016-Ohio-1573, ¶ 10. 24 C.F.R.
203.604(b) provides, in relevant part, that a
mortgagee must have a face-to-face interview with the mortgagor, or make a
reasonable effort to arrange such a meeting, before three full monthly installments
due on the mortgage are unpaid. If default occurs in a repayment plan arranged
other than during a personal interview, the mortgagee must have a face-to-face
meeting with the mortgagor, or make a reasonable attempt to arrange such a
meeting within 30 days after such default and at least 30 days before foreclosure
is commenced * * *.
In certain instances, a face-to-face meeting is not required. See 24 C.F.R. 203.604(c).
Specifically, the meeting need not occur if
(1) The mortgagor does not reside in the mortgaged property,
(2) The mortgaged property is not within 200 miles of the mortgagee, its servicer,
or a branch office of either,
(3) The mortgagor has clearly indicated that he will not cooperate in the
interview,
(4) A repayment plan consistent with the mortgagor’s circumstances is entered
into to bring the mortgagor’s account current thus making a meeting unnecessary,
and payments thereunder are current, or
(5) A reasonable effort to arrange a meeting is unsuccessful.
Id. A reasonable effort
shall consist at a minimum of one letter sent to the mortgagor certified by the
Postal Service as having been dispatched. Such a reasonable effort to arrange a
face-to-face meeting shall also include at least one trip to see the mortgagor at the
mortgaged property, unless the mortgaged property is more than 200 miles from
the mortgagee, its servicer, or a branch office of either, or it is known that the
mortgagor is not residing in the mortgaged property.
24 C.F.R. 203.604(d).
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{¶22} The trial court determined that the Edwards were entitled to a dismissal on the
merits because Bank of America did not contend that it either conducted a face-to-face meeting
with the Edwards or made a reasonable effort to do so “before three full monthly installments
due on the mortgage [were] unpaid.” 24 C.F.R. 203.604(b). Bank of America argues that the
court erred in its decision because (1) the foregoing regulation constitutes an affirmative defense
rather than a condition precedent to foreclosure, (2) the Edwards failed to adequately plead its
alleged noncompliance with the foregoing regulation, and (3) the three month “timing aspect” of
the regulation “is not a condition precedent to foreclosure, so long as [compliance with the
remainder of the regulation] occurred prior to filing an action.”
{¶23} This Court has already determined that a bank’s compliance with 24 C.F.R.
203.604 is a condition precedent to foreclosure, rather than an affirmative defense. Wells Fargo
Bank, N.A. v. Awadallah, 9th Dist. Summit No. 27413, 2015-Ohio-3753, ¶ 21. Accord Horn,
2016-Ohio-1573, at ¶ 10. Thus, the trial court did not err when it concluded that Bank of
America’s compliance with 24 C.F.R. 203.604 was a condition precedent to foreclosure. Nor did
it err when it concluded that the Edwards adequately alleged Bank of America’s alleged
noncompliance when filing their answer.
{¶24} In its complaint, Bank of America generally alleged that it had satisfied all
conditions precedent in the note and mortgage. In their answer, the Edwards generally denied
Bank of America’s assertion and included as two separate defenses that the complaint was barred
due to Bank of America’s failure to (1) “meet or comply with all conditions precedent prior to
the filing of [the] action,” and (2) “offer a face-to-face meeting, as required by the applicable
servicing guidelines relating to the promissory note and mortgage in question.” The Edwards
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later specified in their brief in opposition that Bank of America had failed to comply with the
provisions of 24 C.F.R. 203.604.
{¶25} Bank of America is correct in its assertion that the Civil Rules require defendants
to deny the performance of conditions precedent “specifically and with particularity” when
pleading. Civ.R. 9(C). “‘The effect of the failure to deny conditions precedent in the manner
provided by Civ.R. 9(C) is that they are deemed admitted.’” Deutsche Bank Natl. Trust Co. v.
Byrd, 9th Dist. Summit No. 27280, 2014-Ohio-3704, ¶ 10, quoting Bank of Am., N.A. v.
Thompson, 2d Dist. Montgomery No. 25952, 2014-Ohio-2300, ¶ 16. The record here, however,
does not support the conclusion that the Edwards failed to comply with the Civ.R. 9(C)
requirement of pleading with specificity the failure to fulfill a condition precedent. The Edwards
alleged in their answer that Bank of America had failed to satisfy conditions precedent to
foreclosure and, more specifically, had not satisfied the servicing guideline requirement of a
face-to-face meeting. The Edwards’ allegations “denied performance of the [face-to-face
requirement] with enough specificity and particularity to preserve the issue.” Wells Fargo Bank,
Natl. Assn. v. Niamke, 9th Dist. Summit No. 27305, 2014-Ohio-4785, ¶ 8. Further, it is of no
import that they addressed their allegations under the heading of “Defense[s]” because any
mistake in their labeling the allegations as such “[did] not relieve [Bank of America] of its
burden to satisfy conditions precedent.” Lakeview Loan Servicing, L.L.C. v. Dancy, 9th Dist.
Summit No. 27889, 2016-Ohio-7106, ¶ 12. The record supports the trial court’s conclusion that
the Edwards’ answer satisfied the pleading requirements of Civ.R. 9(C). Thus, Bank of
America’s argument to the contrary lacks merit.
{¶26} It was Bank of America’s assertion that the Edwards defaulted on the loan on the
Property on September 1, 2009. In seeking summary judgment, Bank of America set forth: (1) a
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copy of a notice of intent to accelerate the loan, dated November 24, 2009; and (2) a copy of a
letter, dated March 8, 2012, from Bank of America to John Edwards, informing him that a
representative from Titanium Solutions would be visiting his home within the next seven to ten
days to review possible loan and assistance options. Yagusic, one of the bank’s affiants,
incorporated the documents by reference in her affidavit and attested to the fact that the letter
dated March 8th was issued to John Edwards on that date and “addressed a face to face meeting
* * *.”
{¶27} In their brief in opposition, the Edwards argued that none of Bank of America’s
evidence showed that it had either conducted a face-to-face meeting with John Edwards or made
a reasonable effort to do so “before three full monthly installments due on the mortgage [were]
unpaid.” 24 C.F.R. 203.604(b). They noted that there was no evidence that the letter the bank
allegedly sent on March 8, 2012, was sent by certified mail and, in any event, the letter was dated
several years after the alleged default. They attached to their brief the affidavit of John Edwards.
In his affidavit, he averred that he never had a face-to-face meeting with Bank of America or any
other lender, never received a loan modification, did not recall ever receiving any letter regarding
a face-to-face meeting, and did not recall any representative from Bank of America ever visiting
his property.
{¶28} In response to the Edwards’ brief in opposition, Bank of America filed a reply
brief in which it included the affidavit of its second affiant, Hernandez. Hernandez averred that
she had personal knowledge of Bank of America’s business records and that those records
showed that four field visits were made to the Property in an attempt to arrange a face-to-face
meeting. She averred that those visits occurred on September 18, 2011, September 20, 2011,
September 21, 2011, and March 12, 2012. She further averred that Bank of America sent two
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letters to the Edwards regarding a face-to-face meeting. She attested to the fact that those letters
were sent on September 7, 2011, and March 8, 2012. She did not aver, however, that the letters
were sent by certified mail.
{¶29} There is no dispute that the loan and the mortgage on the Property were subject to
the regulations contained in 24 C.F.R. 203.604. As noted, 24 C.F.R. 203.604(b) specifically
requires a lender to have “a face-to-face interview with the mortgagor, or make a reasonable
effort to arrange such a meeting, before three full monthly installments due on the mortgage are
unpaid.” (Emphasis added.) Bank of America’s own evidence demonstrated that any attempts it
made to arrange a face-to-face meeting with John Edwards came well after that three month
deadline. Although the default on the loan occurred on September 1, 2009, the earliest date that
Bank of America allegedly issued John Edwards a letter regarding a face-to-face meeting was
September 7, 2011, more than two years later. Thus, the trial court correctly concluded that the
undisputed evidence in the record established Bank of America failed to comply with 24 C.F.R.
203.604(b).
{¶30} Bank of America asserts that the result in this case is unduly harsh because the
“timing aspect” of 24 C.F.R. 203.604(b) itself “is not a condition precedent to foreclosure * * *.”
The bank asks us to conclude that the three month deadline is merely aspirational in nature and
that, so long as the bank complied with the face-to-face meeting requirement before filing for
foreclosure, it should not be penalized for its failure to strictly comply with the deadline. Based
upon this record, however, we need not decide that issue. Bank of America failed to set forth
any evidence that a face-to-face meeting ever occurred with John Edwards. Therefore, to show
that it had complied with 24 C.F.R. 203.604(b), it had to set forth evidence that it made a
reasonable effort to arrange such a meeting. 24 C.F.R. 203.604(d), which defines a “reasonable
15
effort” for purposes of the regulation, “requires both a certified letter and at least one trip to the
mortgaged property, unless an exception applies.” (Emphasis sic.) Awadallah, 2015-Ohio-3753,
at ¶ 29. Bank of America never set forth any evidence that the letters it allegedly sent to John
Edwards were sent by certified mail, despite the Edwards specifically raising that argument in
their brief in opposition. Accordingly, even assuming the three month deadline contained in 24
C.F.R. 203.604(b) is merely aspirational, Bank of America failed to set forth evidence that it ever
complied with 24 C.F.R. 203.604(d)’s reasonable effort requirements before filing suit. As such,
the trial court did not err by dismissing the matter on the merits in favor of the Edwards. Bank of
America’s second assignment of error is overruled.
BANK OF AMERICA’S ASSIGNMENT OF ERROR I
THE TRIAL COURT ERRED AND ACTED WITHOUT JURISDICTION IN
ISSUING A NUNC PRO TUNC ENTRY, CONVERTING ITS FINAL
DISMISSAL WITHOUT PREJUDICE TO A DISMISSAL WITH PREJUDICE.
{¶31} In its first assignment of error, Bank of America argues that the court erred when
it issued a nunc pro tunc entry in this matter. For the reasons outlined below, we agree.
{¶32} Civ.R. 60(A) provides:
Clerical mistakes in judgments, orders or other parts of the record and errors
therein arising from oversight or omission may be corrected by the court at any
time on its own initiative or on the motion of any party and after such notice, if
any, as the court orders. During the pendency of an appeal, such mistakes may be
so corrected before the appeal is docketed in the appellate court, and thereafter
while the appeal is pending may be so corrected with leave of the appellate court.
(Emphasis added.) Once an appeal has been docketed, a trial court lacks jurisdiction to issue a
nunc pro tunc order in the absence of leave from the appellate court. See Evanich v. Bridge, 9th
Dist. Lorain No. 05CA008666, 2006-Ohio-648, ¶ 6.
{¶33} The judgment entry here contains the following language: “[Bank of America’s]
Motion for Summary Judgement is denied, [and its] complaint is hereby dismissed without
16
prejudice. This is a dismissal on the merits. Case Closed.” On September 11, 2015, after both
Bank of America and the Edwards had filed their respective appeals, the court issued a second
entry in which it wrote: “Due to a clerical error, the Judgment Entry * * * is hereby corrected to
reflect that the dismissal is a dismissal with prejudice since it was a dismissal on the merits.”
Neither the parties, nor the trial court, however, sought leave to correct the original judgment
entry. See Civ.R. 60(A). Because appeals from that entry were pending and had been docketed,
the trial court lacked jurisdiction to enter a nunc pro tunc entry in the absence of leave from this
Court. See Evanich at ¶ 6. Thus, its September 11, 2015 judgment entry is a nullity. Bank of
America’s first assignment of error is sustained on that basis.
THE EDWARDS’ ASSIGNMENT OF ERROR I
THE TRIAL COURT ERRED BY INADVERTENTLY STATING THAT THE
DISMISSAL OF THE FORECLOSURE LAWSUIT WAS “WITHOUT
PREJUDICE,” WHEN THE JUDGMENT DISMISSING THE FORECLOSURE
LAWSUIT WAS PROPERLY DISMISSED “ON THE MERITS.”
{¶34} In their first assignment, the Edwards argue that the trial court inadvertently erred
when it stated that this matter was dismissed “without prejudice.” They ask us to reverse this
matter strictly to reflect that the matter was dismissed “with prejudice.”
{¶35} As noted, the judgment entry here provides: “[Bank of America’s] Motion for
Summary Judgement is denied, [and its] complaint is hereby dismissed without prejudice. This
is a dismissal on the merits. Case Closed.” Thus, while the court reviewed the matter on the
merits and dismissed the matter on the merits, it neglected to state that its dismissal was with
prejudice.
{¶36} “[A] dismissal which operates as a failure otherwise than on the merits is without
prejudice * * *.” (Emphasis added.) MBNA America Bank, N.A. v. Berlin, 9th Dist. Medina No.
05CA0058-M, 2005-Ohio-6318, ¶ 10. Conversely, “[a] dismissal with prejudice operates as an
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adjudication on the merits.” Fletcher v. Univ. Hosps. of Cleveland, 120 Ohio St. 3d 167, 2008-
Ohio-5379, ¶ 16. Because the trial court here clearly dismissed this matter “on the merits”
following its review of all the evidence, its entry should have reflected a dismissal with prejudice
rather than without. Although the court later attempted to correct its judgment entry by issuing a
nunc pro tunc entry on September 11, 2015, its nunc pro tunc entry is void for the reasons
outlined in Bank of America’s first assignment of error. Thus, the Edwards’ first assignment of
error is sustained, and this matter is remanded strictly for the purpose of correcting the judgment
to reflect that the matter was dismissed with prejudice.
III.
{¶37} Bank of America’s first assignment of error and the Edwards’ first assignment of
error are sustained. Bank of America’s second assignment of error and the Edwards’ second
assignment of error are overruled. The judgment of the Lorain County Court of Common Pleas
is affirmed in part, reversed in part, and remanded for further proceedings consistent with the
foregoing opinion.
Judgment affirmed in part,
reversed in part,
and cause remanded.
There were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Court of Common
Pleas, County of Lorain, State of Ohio, to carry this judgment into execution. A certified copy of
this journal entry shall constitute the mandate, pursuant to App.R. 27.
Immediately upon the filing hereof, this document shall constitute the journal entry of
judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the
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period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is
instructed to mail a notice of entry of this judgment to the parties and to make a notation of the
mailing in the docket, pursuant to App.R. 30.
Costs taxed equally to both parties.
TIMOTHY P. CANNON
FOR THE COURT
CARR, P. J.
HENSAL, J.
CONCUR.
(Cannon, J., of the Eleventh District Court of Appeals, sitting by assignment.)
APPEARANCES:
JOSHUA E. LAMB, Attorney at Law, for Appellants/Cross-Appellees.
STEFANIE L. DEKA and JASON A. WHITACRE, Attorneys at Law, for Appellee/Cross-
Appellant.