SRB Servicing, LLC v. McIntyre
1:17-cv-00665
N.D. OhioMay 30, 2018Background
- Cynthia and Stedson McIntyre executed a promissory note and mortgage in 2002; Stedson quitclaimed his interest to Cynthia in 2001.
- SRB Servicing, LLC acquired the note and mortgage by assignment (recorded 2010) and filed a foreclosure/breach action in Cuyahoga County on Sept. 22, 2010.
- SRB’s 2010 and 2011 state-court foreclosure actions were dismissed without prejudice for procedural/standing reasons.
- SRB filed the present federal complaint on March 29, 2017 asserting (1) breach of promissory note and (2) foreclosure of the mortgage.
- Defendants moved to dismiss, arguing both claims are time-barred because the statute of limitations began to run when SRB filed the 2010 foreclosure (acceleration).
- The district court dismissed the breach claim as time-barred but denied dismissal of the foreclosure claim, holding an eight-year limitations period applies to foreclosure under recent Ohio law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether breach of the promissory note is time-barred | SRB concedes the six-year limitations for notes began in 2010 but initially pressed claims; implied that claim could survive | Acceleration occurred when SRB filed the 2010 foreclosure, so six-year clock expired before 2017 filing | Breach claim dismissed as barred by the six-year statute for notes |
| Whether foreclosure is time-barred because the note claim is barred | SRB: foreclosure is a separate remedy arising under the mortgage and governed by R.C. §2305.06 (eight-year period), so timely | Defs: longstanding Ohio rule ties foreclosure limitations to the note; foreclosure barred if note action is time-barred | Court: foreclosure is governed by the eight-year statute (post-Holden line); foreclosure claim survives |
Key Cases Cited
- Holden v. Morgan, 147 Ohio St.3d 85 (Ohio 2016) (held note and mortgage actions are separate remedies; foreclosure may proceed even if the debt was discharged in bankruptcy)
- Walker v. Bank of New York Mellon, 78 N.E.3d 930 (Ohio Ct. App. 2017) (applied Holden beyond bankruptcy context and held foreclosure governed by longer statute)
- Kerr v. Lydecker, 51 Ohio St. 240 (Ohio 1894) (historic rule that foreclosure is barred once note action is time-barred)
- Evans v. Beaver, 50 Ohio St. 190 (Ohio 1893) (longstanding principle treating mortgage as security for the underlying obligation)