2014 Ohio 356
Ohio Ct. App.2014Background
- Connie and Laurence Priest (individually and as trustees) obtained loans secured by 7362 Scioto Chase Blvd.; Bank of America (successor to Countrywide) held a first-position mortgage and Huntington held an open-end personal line mortgage.
- Priests defaulted on both loans; Huntington and Bank of America sought foreclosure and filed summary judgment motions (Huntington filed suit March 2011; BofA cross-claimed Feb 2012).
- Huntington’s recorded mortgage was executed in the Priests’ individual capacity, but Priests asserted they signed only as trustees and not individually.
- Trial court found the individual-signature error was a mutual mistake and reformed the instrument, allowing Huntington’s foreclosure; the court also found Bank of America had standing as holder/assignee and granted its summary judgment.
- Appellants appealed, arguing (1) reformation was improper because there was no mutual mistake and (2) BofA lacked standing due to a broken chain of title.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether reformation of Huntington’s mortgage was proper (mutual mistake) | Huntington: prior practice and circumstances show the Priests intended the mortgage to bind their individually owned property; reformation corrects a clerical/ mutual mistake | Priests: they intended to sign only in trustee capacity, not individually; no mutual mistake exists | Court: reformation appropriate; Priests’ contrary affidavits were self-serving and implausible given prior mortgage history; summary judgment for Huntington affirmed |
| Whether Bank of America had standing to foreclose (holder/assignment) | BofA: recorded assignment made it holder/assignee at time of cross-claim; holder of note has equitable interest in mortgage and standing | Priests: note attached did not show specific indorsement to BofA nor bearer paper, so chain of title is broken and BofA lacked standing | Court: BofA was holder/assignee when it filed its cross-claim (assignment recorded Jan 2012; cross-claim filed Feb 2012); BofA had standing; summary judgment affirmed |
Key Cases Cited
- Smiddy v. The Wedding Party, Inc., 30 Ohio St.3d 35 (summary judgment review standard)
- Vahila v. Hall, 77 Ohio St.3d 421 (moving party’s initial burden in summary judgment)
- Dresher v. Burt, 75 Ohio St.3d 280 (burden-shifting framework for summary judgment)
- Inland Refuse Transfer Co. v. Browning–Ferris Indus. of Ohio, Inc., 15 Ohio St.3d 321 (contract interpretation; plain language controls)
- Fed. Home Loan Mortg. Corp. v. Schwartzwald, 134 Ohio St.3d 13 (holder of note or assignee of mortgage has standing to foreclose)
- SFJV 2005, L.L.C. v. Ream, 187 Ohio App.3d 715 (contract interpretation principles)
- Fountain Skin Care v. Hernandez, 175 Ohio App.3d 93 (contract interpretation; intent resides in language chosen)