Cent. Mortg. Co. v. Seye
100 N.E.3d 969
| Ohio Ct. App. | 2017Background
- In 2004 Seye and Kebe obtained a $152,000 loan from Washtenaw Mortgage, secured by a mortgage with MERS as nominee; Pillar Title handled closing. Seye signed for Kebe under a recorded power of attorney.
- Central Mortgage later claimed it was holder of the note and assignee of the mortgage (assignment from MERS recorded in 2008).
- Central Mortgage sued in foreclosure in 2014 alleging default and sought acceleration and foreclosure; defendants counterclaimed and asserted third-party claims against title companies.
- At summary judgment plaintiff submitted an affidavit from its officer stating Central Mortgage possessed the original note indorsed in blank and attached the notice-of-default letters and business logs. Defendants submitted earlier copies of a note from prior proceedings that lacked an indorsement.
- The trial court granted Central Mortgage summary judgment, dismissed defendants’ counterclaims, reformed the mortgage to correct the acknowledgement clause (scrivener’s error), and entered a foreclosure decree. Defendants appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether competing copies of the note preclude summary judgment | Central Mortgage produced the original note indorsed in blank and affidavit showing possession; copies in its filings are identical | Existence of an unindorsed copy (from prior cases) creates factual dispute about holder status | Court: No genuine issue — plaintiff showed possession of the indorsed note and entitlement to enforce it |
| Whether plaintiff satisfied conditions precedent (notice/acceleration) | Affidavit plus attached demand letters and business logs show the required notices were mailed | Affidavit insufficient because it did not attach all underlying mailing proofs | Court: Evidence (affidavit + letters + logs) sufficed to show required notice and acceleration |
| Whether mortgage reformation was proper despite defective acknowledgement | Reformation required to effect parties’ true intent; omission was scrivener’s error and mutual mistake | Defendants argued the statutory acknowledgement requirement was not met, making the mortgage defective | Court: Reformation under R.C. 2719.01 allowed; defect did not render mortgage unenforceable between parties absent fraud |
| Whether prior, dismissed foreclosure/bankruptcy documents (showing different note) undermine plaintiff’s title to enforce | Prior documents are not controlling; plaintiff’s contemporaneous possession and assignment evidence govern | Defendants relied on older filings showing an unindorsed or differently indorsed note to create doubt | Court: Prior filings were not germane; mere existence of differing copies without more does not create authenticity issue |
Key Cases Cited
- Grafton v. Ohio Edison Co., 77 Ohio St.3d 102 (1996) (summary-judgment standard)
- Wagner v. National Fire Ins. Co., 132 Ohio St. 405 (1937) (reformation available for mutual mistake)
- Basil v. Vincello, 50 Ohio St.3d 185 (1990) (acknowledgement statute provides proof of execution for recording; defective acknowledgement does not void conveyance between parties)
- Citizens National Bank v. Denison, 165 Ohio St. 89 (1956) (defectively executed conveyance valid between parties absent fraud)
- Seabrooke v. Garcia, 7 Ohio App.3d 167 (1982) (court may give effect to defective instrument to carry out parties’ intent)