2018 Ohio 1879
Ohio Ct. App.2018Background
- Bank of New York Mellon filed foreclosure against Joseph and Rebecca Chappell on Feb. 21, 2012, over a Wellington, Ohio property; complaint included claim to reform legal description.
- Chappells answered and asserted four counterclaims (FDCPA, CSPA, common-law fraud, intrusion upon seclusion).
- Trial court dismissed the fraud and intrusion claims; Bank later obtained summary judgment on the remaining counterclaims.
- Bench trial (magistrate) on foreclosure: Bank offered business records and custodian testimony; Mr. Chappell testified but magistrate found his trial testimony less credible than his deposition.
- Magistrate granted judgment for Bank on note and mortgage; denied need for reformation; trial court adopted the magistrate’s decision and overruled Chappells’ objections.
- Chappells appealed raising two issues: (1) they did not default because they continued payments and lacked notice of an increased payment amount; (2) foreclosure was inequitable under the circumstances.
Issues
| Issue | Plaintiff's Argument (Chappells) | Defendant's Argument (Bank) | Held |
|---|---|---|---|
| Whether Chappells properly pleaded nonperformance of a condition precedent (notice of payment increase) | They contend the note required the Bank to give notice before increased monthly payments and the Bank failed to satisfy that condition, so they did not default | Bank alleged the mortgage conditions were broken and that conditions precedent were satisfied; payment increase was an express term in the note | Held for Bank: Chappells failed to deny the condition precedent with the specificity required by Civ.R. 9(C), so complaint’s averments were deemed admitted and issue is precluded on appeal |
| Whether foreclosure was an inequitable remedy under the facts | Foreclosure was inequitable because Chappells continued making payments and were unaware payment amount had increased; Bank’s communications did not allow curing the alleged deficiency | Bank argued note expressly stated the payment change and Chappells were aware; no conflicting communications occurred | Held for Bank: trial court did not abuse discretion in finding foreclosure equitable; trial court credited Bank’s evidence and rejected Chappell’s testimony as not credible |
Key Cases Cited
- PHH Mtge. Corp. v. Barker, 190 Ohio App.3d 71 (3d Dist. 2010) (review of whether foreclosure is equitable is for abuse-of-discretion standard)
- Blakemore v. Blakemore, 5 Ohio St.3d 217 (Ohio 1983) (abuse-of-discretion standard defined)