Nationstar Mtge., L.L.C. v. Ritter
2015 Ohio 3900
Ohio Ct. App.2015Background
- Nationstar filed separate foreclosure complaints for eight rental properties owned by William and Rosemarie Ritter; initial 2010 complaints were voluntarily dismissed and new complaints were filed in 2013.
- Nationstar alleged the Ritters defaulted on eight notes secured by mortgages and that a cross-collateralization clause made defaults on one note trigger defaults on the others.
- The Ritters counterclaimed for fraud, slander, and intentional infliction of emotional distress based on foreclosure filings and Nationstar’s reporting to credit agencies; they also pleaded defenses including estoppel, accord and satisfaction, mistake, and waiver.
- The trial court dismissed the counterclaims under Civ.R. 12(B)(6) (finding FCRA preemption and absolute privilege for judicial pleadings) and later granted Nationstar summary judgment on foreclosure after finding the notes were in default.
- Ritters’ factual contentions (in affidavits) included claims that Nationstar improperly imposed escrow requirements, misapplied or failed to credit payments, overcharged escrow, and advised them to stop payments during mediation.
- On appeal the Tenth District reviewed (de novo) the dismissal of counterclaims and the grant of summary judgment and affirmed both rulings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether counterclaims based on Nationstar's reporting to credit agencies survive state-law claims | Nationstar: reporting is proper and any related state claims are preempted by federal FCRA enforcement scheme | Ritters: reporting harmed their credit and supports state tort claims (e.g., slander) | Dismissed: state-law claims related to credit reporting are preempted by FCRA enforcement provisions |
| Whether counterclaims based on filing foreclosure pleadings are actionable | Nationstar: foreclosure pleadings and related statements are absolutely privileged | Ritters: filings were defamatory and caused tenant loss and other harms | Dismissed: statements in judicial pleadings are absolutely privileged and bar those tort claims |
| Whether errors in Nationstar’s escrow/accounting and alleged failure to give escrow notice excuse Ritters’ mortgage defaults (estoppel/prevention of performance) | Nationstar: notes and mortgages are in default; Ritters still obligated and summary judgment appropriate | Ritters: Nationstar’s mishandling (failure to notify, overbilling, misapplication) prevented performance and should bar foreclosure | Rejected: factual record did not show Nationstar’s conduct excused performance; no genuine issue preventing summary judgment for foreclosure |
| Whether summary judgment was improper because Ritters raised disputed facts in opposition | Nationstar: presented prima facie proof of default; Ritters bear burden to raise material factual disputes on affirmative defenses | Ritters: affidavits and accounting show disputes on payment history and servicing | Rejected: Ritters failed to present facts showing performance was excused; summary judgment affirmed |
Key Cases Cited
- Perrysburg Twp. v. Rossford, 103 Ohio St.3d 79 (2004) (de novo standard for Civ.R. 12(B)(6) review)
- Surace v. Wuliger, 25 Ohio St.3d 229 (1986) (absolute privilege bars defamation claims based on judicial pleadings)
- Tokles & Son, Inc. v. Midwestern Indemn. Co., 65 Ohio St.3d 621 (1992) (summary judgment standard under Civ.R. 56)
- Todd Dev. Co., Inc. v. Morgan, 116 Ohio St.3d 461 (2008) (burden allocation where movant is plaintiff; nonmoving party must raise genuine issues on affirmative defenses)
- York v. Ohio State Hwy. Patrol, 60 Ohio St.3d 143 (1991) (pleading must show set of facts that would allow recovery to survive dismissal)