2019 Ohio 3003
Ohio Ct. App.2019Background
- Donald Abston executed a note and mortgage in 2013; mortgage later assigned to Nationstar (doing business as Mr. Cooper). Abston fell behind in 2017.
- Nationstar offered a Trial Period Plan (TPP) in a September 15, 2017 letter requiring three timely payments and later execution of a permanent modification to effectuate a loan modification.
- Nationstar filed foreclosure on October 20, 2017; Abston began TPP payments late (first payment October 27), completed three payments, and returned a signed modification that crossed out his ex-wife’s signature line but did not timely provide a divorce decree.
- Nationstar declined to execute the modification, notified Abston in April and June 2018 that he was not approved, and reactivated the foreclosure; it moved for default judgment and obtained a final foreclosure decree May 31, 2018 after Abston did not respond.
- Abston filed a Civ.R. 60(B) motion claiming (1) he was not in default because a modification had been formed, (2) promissory estoppel, and (3) grounds of excusable neglect and fraud; the trial court denied relief and Abston appealed.
Issues
| Issue | Nationstar's Argument | Abston's Argument | Held |
|---|---|---|---|
| Whether a binding loan modification existed (not-in-default) | No; conditions precedent (timely first payment, spouse signature or divorce decree, Nationstar signature) were not met | Modification became effective after TPP completion and Nationstar accepted payments; Nationstar accepted payments under the agreement | Court: No binding modification; conditions unmet (no spouse signature or timely decree, Nationstar never signed) |
| Promissory estoppel | TPP/letters were not a clear, unambiguous promise to permanently modify; statements were prospective/ambiguous | February 2018 letter amounted to a clear promise and Abston reasonably relied to his detriment by making payments | Court: No promissory estoppel; letter ambiguous, conditions unsatisfied, no detrimental reliance shown |
| Excusable neglect (failure to respond to reactivation/default motions) | Abston had notice opportunities and failed to respond; negotiations don’t excuse default in foreclosure context | Abston did not receive notice of reactivation or default-motion service and reasonably thought modification negotiation was ongoing | Court: No excusable neglect; record showed service by mail and Abston failed to use opportunities to avoid default |
| Fraud (misrepresentation in motion to reactivate) | Representation that loss mitigation failed was not fraudulent given facts | Nationstar misled court and Abston about mitigation status | Court: No fraud; alleged statements not material misrepresentations that would invalidate the judgment |
Key Cases Cited
- GTE Automatic Elec., Inc. v. ARC Indus., Inc., 47 Ohio St.2d 146, 351 N.E.2d 113 (Ohio 1976) (standards for Civ.R. 60(B) relief)
- Huffman v. Hair Surgeon, Inc., 19 Ohio St.3d 83, 482 N.E.2d 1248 (Ohio 1985) (definition of abuse of discretion)
- Herring v. GMAC Mtge., L.L.C., 189 Ohio App.3d 200, 937 N.E.2d 1077 (Ohio Ct. App. 2010) (meritorious-defense standard for Civ.R. 60(B))
- Kay v. Marc Glassman, Inc., 76 Ohio St.3d 18, 665 N.E.2d 1102 (Ohio 1996) (discussion of excusable neglect)
- UBS Real Estate Sec., Inc. v. Teague, 191 Ohio App.3d 189, 945 N.E.2d 573 (Ohio Ct. App. 2010) (lack of notice and excusable-neglect considerations)