Citizens Bank, N.A. v. Richer
2019 Ohio 2740
Ohio Ct. App.2019Background
- In 2004 Anthony Richer executed a promissory note and mortgage to purchase 4357 Moonglow Lane; he defaulted after ceasing payments in March 2013. Citizens Bank (successor to Charter One) commenced foreclosure in 2015. The note balance at issue was stipulated at $70,657.66 plus interest.
- The loan/mortgage was assigned from Citizens Bank to Wilmington I in Dec. 2016 and from Wilmington I to Wilmington II in Dec. 2017; Wilmington II was substituted as plaintiff before final judgment.
- Richer filed multiple pleadings and counterclaims asserting rescission (TILA/15 U.S.C. §1635), various federal and state consumer claims, breach of contract, unjust enrichment, and sought declaratory relief. He claimed to have sent a rescission letter in late 2015/April 2016.
- Wilmington II moved for summary judgment; Richer did not respond to that motion. A magistrate found Richer’s rescission attempt untimely (right expired three days after closing unless required disclosures were missing; at latest three years under regulations), accepted the parties’ stipulation as to amount, and granted judgment to Wilmington II; the trial court adopted the magistrate’s decision.
- Richer appealed, arguing (inter alia) the substitution of plaintiff was improper, Wilmington II lacked standing, federal HUD conditions precedent applied, TILA rescission was timely, and genuine issues of material fact existed as to Wilmington II’s entitlement and his counterclaims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Substitution of plaintiff under Civ.R. 25(C) | Assignment chain (recorded) established transfer to Wilmington II; substitution proper | Assignment/transfer evidence insufficient to show Wilmington II acquired rights | Court affirmed substitution; no abuse of discretion in granting Civ.R. 25(C) substitution |
| Standing to foreclose | Recorded assignments of mortgage/note established Wilmington II as real party in interest | Wilmington II lacked standing or failed to prove it acquired the debt | Court held standing established by recorded assignments; Wilmington II was proper plaintiff |
| Summary judgment on foreclosure claim | Movant showed no genuine issue: loan documents, assignments, default notice, and parties’ stipulation on amount | Richer claimed genuine issues of fact, challenged evidentiary submissions and damages | Court granted summary judgment: Richer waived many objections by not moving to strike/respond; stipulation resolved damages; no genuine factual dispute |
| Timeliness of rescission (TILA) | Rescission right expired; borrower’s alleged rescission in 2015/2016 was many years after 2004 closing | Richer argued he timely rescinded and lender failed to honor rescission; sought rescission of note/mortgage | Court found rescission untimely (more than three years after consummation); claim barred — summary judgment proper |
| Applicability of HUD regulations / conditions precedent | HUD regs (24 C.F.R. 203.600+) not incorporated in the note/mortgage; not FHA-insured; therefore not applicable | Richer argued lender failed to satisfy HUD conditions precedent to foreclose | Court held federal HUD conditions inapplicable because loan/mortgage did not incorporate them and were not FHA-insured |
| Counterclaims (FDCPA, RESPA, CSPA, breach) | No evidence raised by Richer; Wilmington II presented supporting loan records and notices | Richer alleged unlawful collection practices, lack of notice, and breach but cited no supporting record evidence | Court found no genuine issues as to counterclaims; summary judgment for Wilmington II was proper |
Key Cases Cited
- Blakemore v. Blakemore, 5 Ohio St.3d 217 (1983) (abuse-of-discretion standard for appellate review of certain trial-court rulings)
- Grafton v. Ohio Edison Co., 77 Ohio St.3d 102 (1996) (standard for de novo appellate review of summary judgment)
- Murphy v. Reynoldsburg, 65 Ohio St.3d 356 (1992) (summary-judgment standard; doubts resolved for nonmovant)
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (movant meets summary-judgment burden by showing nonmoving party lacks evidence on an essential element)
- Fed. Home Loan Mortgage Corp. v. Schwartzwald, 134 Ohio St.3d 13 (2012) (holding on party-with-standing/real-party-in-interest principles in foreclosure context)
- Beach v. Ocwen Federal Bank, 523 U.S. 410 (1998) (limitations on equitable tolling of TILA rescission right)