JPMorgan Chase Bank, Natl. Assn. v. Burden
2014 Ohio 2746
Ohio Ct. App.2014Background
- In July 2005 Laurence Burden executed a promissory note and mortgage with Washington Mutual for property in Akron; Washington Mutual’s loan assets were transferred to JPMorgan Chase in October 2008 after FDIC receivership.
- The Burdens defaulted by missing a January 2012 payment; Chase mailed a February 28, 2012 “Acceleration Warning (Notice of Intent to Foreclose)” by first-class mail to the property, giving 35 days to cure.
- Chase filed for foreclosure in May 2012; after unsuccessful mediation, Chase moved for summary judgment in May 2013, attaching affidavits, the loan documents, and the February 2012 letter.
- The Burdens opposed, alleging they never received notice, arguing Chase failed to (1) send certified mail or (2) attempt a face-to-face meeting as required by HUD regulations and their mortgage; they also challenged the sufficiency of Chase’s affidavit.
- The trial court granted summary judgment for Chase; on appeal the Ninth District affirmed, holding (a) the affiant’s statements were sufficient, (b) HUD regulations did not apply because the loan was not FHA-insured and loan documents contained no HUD-incorporation language, and (c) the mortgage permitted notice by first-class mail so notice was effective when mailed.
Issues
| Issue | Plaintiff's Argument (Chase) | Defendant's Argument (Burdens) | Held |
|---|---|---|---|
| Sufficiency of Chase affidavits to support summary judgment | Affidavits from Chase VPs show review of business records and identify loan documents and default; affiants have personal knowledge | Affidavit lacks job duties and thus lacks foundation; hearsay/business-records objections | Affidavits were sufficient; identity and position of affiant permitted inference of personal knowledge and foundation (Civ.R. 56(E)) |
| Applicability of HUD/FHA servicing regulations | Loan is not FHA-insured; no language in note/mortgage incorporating HUD regulations | HUD regs apply; mortgage’s choice-of-law to federal law makes regs applicable; failure to hold face-to-face meeting and certified-mail notice violated regs | HUD regulations do not apply: loan/mortgage contain no FHA/HUD language and supplemental affidavit averred loan was not FHA-insured; choice-of-law clause insufficient to incorporate HUD rules |
| Method and effectiveness of required notice under mortgage | Mortgage and note allow notice by first-class mail; Chase mailed the breach letter by first-class; notice is effective upon mailing | Letter should have been sent certified mail and Burden’s denial of receipt creates genuine issue of fact | Mortgage and note expressly authorize first-class mailing; notice is effective when mailed per contract language, so Chase satisfied notice requirement |
| Whether genuine issue of material fact existed to preclude summary judgment | No material factual dispute: Chase established default, notice mailing, and entitlement to foreclosure | Existence of disputed facts (nonreceipt, improper mailing method, HUD violations) preclude summary judgment | No genuine issue: Burdens failed to show facts or contract language making HUD regs applicable or making first-class mailing insufficient; summary judgment affirmed |
Key Cases Cited
- Temple v. Wean United, Inc., 50 Ohio St.2d 317 (1977) (sets Ohio summary-judgment standard)
- Dresher v. Burt, 75 Ohio St.3d 280 (1996) (allocates burdens in summary-judgment practice)
- Grafton v. Ohio Edison Co., 77 Ohio St.3d 102 (1996) (standard of review: de novo review of summary judgment)
- AAAA Enterprises, Inc. v. River Place Community Urban Redevelopment Corp., 50 Ohio St.3d 157 (1990) (discusses summary judgment as a procedural shortcut and the need to afford response opportunity)