2015 Ohio 3096
Ohio Ct. App.2015Background
- In 2005 Lorie and Joseph Filippi executed a promissory note for $237,200 secured by a mortgage on 614 Kentucky Circle; the note was endorsed to Huntington National Bank.
- Huntington filed a foreclosure complaint in March 2013 alleging default and an outstanding balance; Lorie answered and asserted (generally) that Huntington failed to comply with HUD regulations prior to foreclosure.
- Huntington moved for summary judgment in January 2014, attaching the note, mortgage, assignment, and an affidavit attesting Huntington held the note and the amount due.
- Lorie opposed summary judgment, submitting an affidavit that she never received a HUD-required face-to-face meeting before foreclosure was filed.
- The trial court granted Huntington summary judgment; on appeal the Third District considered (1) whether HUD's face-to-face requirement is a condition precedent or an affirmative defense, and (2) whether summary judgment was improper given Lorie’s evidence.
- The Third District held HUD compliance is a condition precedent but affirmed summary judgment because Lorie failed to plead noncompliance with the specificity required by Civ.R. 9(C), thereby waiving the defense.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is compliance with HUD regulations (24 C.F.R. §203.604) a condition precedent to foreclosure or an affirmative defense? | Huntington: failure to comply is an affirmative defense; bank need not plead compliance. | Filippi: HUD face-to-face requirement is a condition precedent that must be satisfied before foreclosure. | Condition precedent. Court finds HUD scheme shows foreclosure contingent on meeting HUD requirements. |
| Did Lorie preserve a noncompliance claim under Civ.R. 9(C)? | Huntington: Lorie failed to plead noncompliance with specificity; thus she waived it. | Filippi: she alleged HUD noncompliance and submitted affidavit showing no face-to-face meeting. | Waived. Lorie’s answer was too general; Civ.R. 9(C) requires specific denial, so conditions were deemed admitted. |
| Was summary judgment proper after waiver? | Huntington: yes; burden shifted and Huntington met its evidentiary showing. | Filippi: genuine issue exists because she attested she never had the meeting. | Affirmed. With the condition precedent deemed admitted, Huntington was entitled to judgment as a matter of law. |
| Should appellate court reverse because trial court labelled the issue incorrectly? | Huntington: outcome should stand. | Filippi: court erred in treating HUD compliance as affirmative defense. | No reversible error. Although trial court erred on classification, the appellate court affirmed on alternate ground (waiver). |
Key Cases Cited
- Dresher v. Burt, 75 Ohio St.3d 280 (1996) (summary judgment burden-shifting framework)
- Murphy v. City of Reynoldsburg, 65 Ohio St.3d 356 (1992) (nonmoving party entitled to have evidence construed most strongly in its favor)
- Natl. City Mtge. Co. v. Richards, 182 Ohio App.3d 534 (2009) (treatment of conditions precedent and notice requirements in foreclosure context)
- Diamond Wine & Spirits, Inc. v. Dayton Heidelberg Distrib. Co., Inc., 148 Ohio App.3d 596 (2002) (appellate court will affirm correct judgment even if lower court used different reasoning)