IN THE COMMON PLEAS COURT OF FAIRFIELD COUNTY, OHIO DITECH FINANCIAL, LLC, : Plaintiff, : Case No. 15 CV 030 v. : Judge Berens WILLIE T. CONLEY, ET AL., : Entry Regarding Plaintiff s Motion for Summary Judgment Defendants. : This matter is before the Court on Ditech Financial, LLC s ( Plaintiff ) Motion for Summary Judgment filed February 18, 2016. Willie T. Conley, et al ( Defendants ) filed a Brief in Opposition to Motion for Summary Judgment on March, 15, 2016. Based on the arguments and evidence presented, the Court OVERRULES Plaintiff s Motion for Summary Judgment. LAW & ANALYSIS Ohio Civ. R. 56(A) and (B) permit both plaintiffs and defendants to move for summary judgment on all or part of any claim. Summary judgment is appropriate when (1) there is no genuine issue as to any material fact; (2) the moving party is entitled to judgment as a matter of law; and (3) reasonable minds can come to but one conclusion, and that conclusion is adverse to the party against whom the motion for summary judgment is made. Harless v. Willis Day Warehousing Co., 54 Ohio St.2d 64, 66, 375 N.E.2d 46, 47 (1978). The party moving for summary judgment has the initial burden of demonstrating the absence of any genuine issues of material fact, and must specifically delineate the basis for which summary judgment is sought in order to allow the opposing party a meaningful opportunity to respond. Mitseff v. Wheeler, 38 Ohio St. 3d 112, 116, 526 N.E.2d 798, 802 (1988); Dresher v. Burt, 75 Ohio St. 3d 280, 293, 1996-Ohio-107, 662 N.E.2d 264, 274. In so doing, the moving party cannot rest on bare conclusory assertions that the non-movant lacks evidence or cannot prove her case. Rather, the Page 1 of 8
moving party must be able to specifically point to some evidence of the type listed in Civ. R. 56(C)[.] Dresher, at 293. If the moving party fails to meet its burden, summary judgment is inappropriate; however, if the moving party meets its initial burden, the burden then shifts to the non-moving party to set forth specific facts showing that there is a genuine issue for trial. Id. at 294. If the non-movant does not so respond, summary judgment, if appropriate, shall be entered against the nonmoving party. Id; Egli v. Cong. Lake Club, 5th Dist. No. 2009-CA-00216, 2010-Ohio-2444 (June 1, 2012), appeal not allowed, 126 Ohio St. 3d 1600, 2010-Ohio-4928, 935 N.E.2d 46; Ohio Civ. R. 56 ( [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.). [I]n order to 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.) all conditions precedent have been met; 4.) the mortgagor is in default; 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. Defendants Brief In Opposition argues Plaintiff s Motion for Summary Judgment fails for: (1) lack of standing to file a claim in foreclosure against Defendants; (2) want of sufficient Oh. Civ. R. 56(C) evidence to support its motion; (3) failing to satisfy all conditions precedent prior to filing for foreclosure; and (4) unresolved genuine disputes of material fact. I. THE PLAINTIFF HAS PROPER STANDING TO PURSUE FORECLOSURE Page 2 of 8
Standing 1 is [a] party s right to make a legal claim or seek judicial enforcement of a duty or right. Black s Law Dictionary 1625 (10th Ed.2014). [S]tanding is required to invoke the jurisdiction of the common pleas court, and therefore it is determined as of the filing of the complaint. Fed. Home Loan Mortg. Corp. v. Schwartzwald (2012), 134 Ohio St.3d 13, 2012- Ohio-5017, 979 N.E.2d 1214, 3 (emphasis added). [T]he plaintiff in a foreclosure action must have standing at the time it files its complaint. But nowhere in the opinion did this court [Ohio Supreme Court] indicate that the plaintiff must also submit proof of standing. Wells Fargo Bank, N.A. v. Horn (2015), 142 Ohio St.3d 416, 2015-Ohio-1484, 31 N.E.3d 637, 12. Proof of standing may be submitted after the filing of the complaint 2. Id. Defendants argue Plaintiff has no standing to pursue a foreclosure action because [p]laintiff has failed to provide evidentiary quality materials that demonstrate any of the five elements necessary to obtain an award of summary judgment. Defendant s Brief in Opposition to Motion for Summary Judgment at p. 15. Defendants question whether Plaintiff is in fact the holder of the note and mortgage as well as the authenticity of those documents as attached to the Complaint and Plaintiff s Motion for Summary Judgment. In its Complaint Everbank attached copies of a note and mortgage purportedly signed by the Defendants as well as a chain of assignments of that mortgage. See generally Complaint. Further, on February 18, 2016 the Court filed an Order Substituting Plaintiff from Everbank to Ditech Financial, LLC. Later, Plaintiff, in support of its Motion for Summary Judgment attached a notarized affidavit from Vicki R. Kennedy, an employee of Ditech Financial, LLC f/k/a Green Tree Servicing, LLC. In this Affidavit Kennedy 1 It is an elementary concept of law that a party lacks standing to invoke the jurisdiction of the court unless he has, in an individual or representative capacity, some real interest in the subject matter of the action. State ex rel Dallman v. Franklin Cty. Court of Common Pleas (1973), 35 Ohio St.2d 176, 179, 298 N.E.2d 515. 2 E.g. An assignment of the mortgage to the plaintiff, dated prior to the filing of the foreclosure complaint and attached to plaintiff s motion for summary judgment demonstrated that the plaintiff was the real party in interest when the complaint was filed. Id. citing Wells Fargo Bank, N.A. v. Stovall, 8th Dist. Cuyahoga No. 91802, 2010- Ohio-236, 2010 WL 320487, 16-17. Page 3 of 8
confirms Ditech Financial LLC s possession of the various documents including the Note, Mortgage, chain of assignments, loan modification etc. and authenticates them as business records compiled within the ordinary course of business. The Kennedy Affidavit lays the proper foundation regarding Kennedy s competency to testify via personal knowledge regarding the nature of the loan documents. Specific documents e.g. the Note, Mortgage, chain of assignments are incorporated by reference thereto and it is stated they are maintained in the ordinary course of business and were compiled at or near the time of each transfer. See Wachovia Bank of Delaware, N.A. v. Jackson, 5th Dist. Stark No. 2010-CA-00291, 2011-Ohio-3203, 46-57. Therefore, the Court finds the Kennedy Affidavit was properly executed and its contents authenticated for purposes of the Plaintiff s Motion for Summary Judgement. Although it is true the initial Complaint was filed by Plaintiff s predecessor, Everbank, on January 14, 2015, the Mortgage was subsequently assigned to Green Tree Servicing, LLC on August 19, 2015, and then came under Plaintiff s control due to merger between Green Tree Servicing, LLC and Ditech Financial, LLC on August 31, 2015. See Plaintiff s Motion for Summary Judgment. Further, the Note was indorsed in blank by its initial holder, Trustcorp Mortgage, Co., providing the bearer the ability to enforce its terms. Wells Fargo Bank NA v. Arlington, 5th Dist. Delaware No. 13CAE030016, 2013-Ohio-4659, 27. The Kennedy affidavit confirms possession of the material documents, to wit, the Note, Mortgage, chain of assignments, etc. just as the Complaint s attachments confirmed Everbank s initial possession of the same. See Complaint.; Id. Therefore, the Court finds Everbank, the previous plaintiff to this action had proper standing, and that Ditech Financial, LLC, the current Plaintiff, is the present holder of the note and mortgage possessing proper standing to proceed as the real party in interest to this matter. Page 4 of 8
II. THE PLAINITFF HAS SUBMITTED PROPER CIV. R. 56 (C) EVIDENCE IN SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT Ohio Civil Rule 56(C) enumerates and limits the nature of evidence which may be considered in a motion for summary judgment as the pleadings, depositions, answers to interrogatories, written admissions, affidavits, transcripts of evidence, and written stipulations of fact, if any, timely filed in the action, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Oh. Civ. R. 56(C). Further, with regard to affidavits, Rule 56 I states [s]upporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated in the affidavit. Sworn or certified copies of all papers or parts of papers referred to in an affidavit shall be attached to or served with the affidavit. Oh. Civ. R. 56(E). Defendants argue the affidavit filed in support of Plaintiff s Motion for Summary Judgment is meritless and the Complaint was deficient because no account history, as required by Civil Rule 10(D) 3, was attached to the Complaint. The first argument is without merit as the Court previously found the Kennedy Affidavit and its contents meet the requirements set out in Oh. Civ. R. 56(C) and 56(E) for evidence in support of a summary judgment motion as well as case law specific to mortgage foreclosure. As to the latter argument, the Defendants waived their right challenge sufficiency of the pleading or move to dismiss the claim via a Civ. R. 12(b)(6) motion when they filed their answer on April 27, 2015, without filing a motion for a more definite statement, or otherwise. Sylvester Summers, Jr. Co., L.P.A. at 31 citing Glenwood Homes, Ltd. V. State Auto Mut. Ins. Co., 8th Dist. No. 72856, 1998 WL 685493 (Oct. 1, 1998). Further, this 3 Civ.R. 10(D)(1) states that when a claim or defense is based on an account or other written instrument, a party must attach a copy of the account or written instrument to the pleading. Page 5 of 8
deficiency alone is not fatal to a claim since [c]ourts have repeatedly held that when a plaintiff fails to attach a copy of a written instrument to his complaint, the proper method to challenge such failure is by filing a Civ.R. 12(E) motion for a more definite statement. Id., quoting Castle Hill Holdings, L.L.C. v. Al Hut, Inc., 8th Dist. No. 86442, 2006 Ohio 1353, 26. Therefore, the Court finds Plaintiff has provided appropriate evidence in support of its Motion for Summary Judgment. III. PLAINTIFF HAS NOT SATISFIED ALL CONDITIONS PRECEDENT TO SUPPORT A SUMMARY JUDGMENT RULING IN ITS FAVOR As stated above, a party moving for summary judgment in a foreclosure action must satisfy five elements: [I]n order to 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.) all conditions precedent have been met; 4.) the mortgagor is in default; 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 (emphasis added). Defendants argue Plaintiff s Motion for Summary Judgment should be overruled based on Plaintiff s failure to satisfy all conditions precedent necessary to foreclose a federally insured loan subject to the regulations of the United States Department of Housing and Urban Development ( HUD ). As an initial matter the Court finds both the mortgage and loan modification agreement are federally insured and subject to HUD Secretary Regulations as stated in the Mortgage Section 9(d). See Complaint Exhibit B Section 9(d). Therefore, the Plaintiff must satisfy conditions precedent enumerated Title 24 C.F.R. Sections 203.602 and 203.604 to Page 6 of 8
carry out foreclosure proceedings. See Complaint Exhibit B Section 9(d); Exhibit E. U.S. Bank, N.A. v. Detweiler, 5th Dist. Stark No. 2011CA00095, 2012-Ohio-73, 12. Specifically, Title 24 C.F.R. Section 203.604 requires a face-to-face meeting, where [a] reasonable effort to arrange a face-to-face meeting with the mortgagor shall consist at a minimum of one letter sent to the mortgagor certified by the Postal Service. Title 24 C.F.R. Section 203.604(d). Section (c) of the same section allows a mortgagee forego this face-to-face meeting given certain conditions 4. In its Complaint Plaintiff submitted website printouts, which show no Everbank locations within 200 miles of the mortgaged property. Everbank is no longer the Plaintiff to this matter. Defendant argues two separate Ditech Financial, LLC locations, Independence, Ohio and Columbus, Ohio, are within 200 miles of the property at issue. Plaintiff has not submitted evidence supporting that it should be excused from Section 203.604(c) s requirement, and if the property is within the set radius no evidence of a certified letter attempting to arrange a meeting has been submitted. Therefore, the Court finds Plaintiff has failed to carry its burden as all conditions precedent necessary to foreclose a federally insured loan have not been satisfied. Based on this and construing the evidence in favor of the non-moving party, Defendants, the Court OVERRULES Plaintiff s Motion for Summary Judgment finding genuine disputes of material fact remain. 4 (c) A face-to-face meeting is not required 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. Page 7 of 8
IT IS SO ORDERED. Judge Richard E. Berens Copies to: Page 8 of 8