Quicken Loans, Inc. v. Jodlowski
2017 Ohio 8999
| Ohio Ct. App. | 2017Background
- In 2011 Jodlowski executed a mortgage and note with Quicken Loans; Quicken maintained an escrow account funded by her payments to pay property taxes.
- Jodlowski stopped payments in August 2015; Quicken notified default in September 2015 and filed foreclosure in March 2016.
- During discovery, it was revealed Quicken failed to pay 2010–2011 property taxes, incurring penalties and interest. Quicken later paid the taxes and refunded $356.02 for penalties/interest.
- Quicken moved for summary judgment in February 2017; Jodlowski did not respond, and the trial court granted summary judgment and issued a foreclosure decree.
- Jodlowski moved for relief from judgment under Civ.R. 60(B), claiming excusable neglect and meritorious counterclaims (negligence and breach of contract). The trial court denied relief for failure to show a meritorious claim.
- Jodlowski appealed, arguing the trial court abused its discretion in finding no meritorious counterclaims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Jodlowski demonstrated a meritorious negligence claim based on escrow mismanagement | No fiduciary duty owed; creditor–debtor relationship alone does not create negligence liability | Quicken’s failure to pay taxes from escrow created negligence/duty and caused damages | No meritorious negligence claim; no fiduciary duty or special trust created by the mortgage/escrow arrangement |
| Whether Jodlowski demonstrated a meritorious breach of contract claim for late tax payments and penalties | Quicken cured the error by paying the taxes and refunded penalties; no actionable nonperformance causing damages | Failure to timely pay taxes breached contract and caused damages (taxes, penalties, reputational harm) | No meritorious breach claim; Quicken remedied the error and refund addressed penalties; reputational harm not proven as contractual damages |
| Whether the trial court abused its discretion in denying Civ.R. 60(B) relief | Trial court erred by finding no meritorious claim and denying relief | Relief properly denied because Jodlowski failed to meet GTE factors (meritorious defense) | No abuse of discretion; failure to establish any GTE requirement (meritorious claim) supports denial |
| Whether the court needed to address excusable neglect separately | N/A (Quicken) | Jodlowski asserted excusable neglect for failing to respond to summary judgment | Appellate court declined to address excusable neglect because trial court’s finding on meritorious claim sufficed to deny 60(B) relief |
Key Cases Cited
- Griffey v. Rajan, 33 Ohio St.3d 75 (Ohio 1987) (standard: trial court’s decision on Civ.R. 60(B) reviewed for abuse of discretion)
- GTE Automatic Elec., Inc. v. ARC Indus., Inc., 47 Ohio St.2d 146 (Ohio 1976) (three-part test for Civ.R. 60(B): meritorious defense, grounds under rule, timeliness)
- Rose Chevrolet, Inc. v. Adams, 36 Ohio St.3d 17 (Ohio 1988) (failure to satisfy any GTE requirement warrants denial of 60(B) motion)
- Blakemore v. Blakemore, 5 Ohio St.3d 217 (Ohio 1983) (abuse of discretion standard explained)
- Cairns v. Ohio Sav. Bank, 109 Ohio App.3d 644 (Ohio Ct. App. 1996) (mortgage-servicing bank managing escrow does not, by contract terms alone, create fiduciary duties)
- Umbaugh Pole Bldg. Co. v. Scott, 58 Ohio St.2d 282 (Ohio 1979) (fiduciary relationship requires special trust and confidence)
- Ed Schory & Sons, Inc. v. Society Nat’l Bank, 75 Ohio St.3d 433 (Ohio 1996) (debtor-creditor relationship is fiduciary only when special trust exists)
- Blon v. Bank One, Akron, N.A., 35 Ohio St.3d 98 (Ohio 1988) (arm’s-length loan negotiations do not create fiduciary duties)
- Textron Fin. Corp. v. Nationwide Mut. Ins. Co., 115 Ohio App.3d 137 (Ohio Ct. App. 1996) (elements required to prove breach of contract)
- Garofalo v. Chicago Title Ins. Co., 104 Ohio App.3d 95 (Ohio Ct. App. 1995) (breach-of-contract proof requires existence, performance, nonperformance, and damages)