CitiMortgage, Inc. v. Kermeen
2012 Ohio 1655
Ohio Ct. App.2012Background
- CitiMortgage, Inc. appeals a Darke County, Ohio trial court foreclosing and reforming a mortgage on the Kermeen property.
- The note, dated 9/12/2002, was originally $70,000 with a 6.25% interest rate; a 2007 loan modification increased the stated unpaid balance to roughly $85,134.36.
- Kimberly Kermeen’s name was omitted from the granting clause and notary acknowledgment in the Mortgage, creating a potential co-owner issue.
- CitiMortgage sought foreclosure, reform of the Mortgage to include Kimberly, and admission of averments or summary judgment; the Kermeens failed to answer.
- The trial court found Christopher alone signed the Note and granted foreclosure against him but did not grant monetary relief against Kimberly; it declined reformation for lack of ambiguity.
- On appeal, the court reversed in part, concluding Kimberly’s interest could be treated as encumbered by the Mortgage and ordered reformation and distribution of sale proceeds accordingly.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether default judgment was proper when not all defendants appeared | CitiMortgage entitlement to default judgment. | Court should adjudicate on the merits; default not automatic. | Not entitled to default judgment; trial on the merits permitted. |
| Whether the Mortgage should be reformed to include Kimberly | Omission was scrivener's error and mutual mistake; reform necessary. | Mortgage unambiguous; no basis for reform. | Reformation warranted; mortgage fully secures Kimberly’s interest. |
| Whether Kimberly’s signature secures her undivided interest despite omission from grant | Co-signer provision renders Kimberly a mortgagor. | Omission prevents treating her as a grantor. | Mortgage valid to encumber Kimberly’s full interest. |
| Distribution of sale proceeds between CitiMortgage and Kimberly | CitiMortgage entitled to proceeds; half to Kimberly not appropriate. | Kimberly entitled to half as co-owner. | One-half of gross sale proceeds awarded to Kimberly; remand for judgment consistent with reform. |
Key Cases Cited
- SFJV 2005, L.L.C. v. Ream, 187 Ohio App.3d 715 (2d Dist. 2010) (extrinsic evidence may be used to supply missing contract terms; co-signer treatment)
- Citizen’s National Bank v. Denison, 165 Ohio St. 89 (1956) (defectively executed conveyance valid between parties; intent controls)
- Lykins v. Miami Valley Hospital, 157 Ohio App.3d 291 (2d Dist. 2004) (default judgments and merits-based review; Civ.R. 55 discretion)
- Buckeye Supply Co. v. Northeast Drilling Co., 24 Ohio App.3d 134 (9th Dist. 1985) (discretion to determine need for further evidence in default cases)
- Streeton v. Roehm, 1948 (Ohio App.) (evidence rules when determining entitlement in default)