Wells Fargo Bank, N.A. v. Aey
2013 Ohio 5381
Ohio Ct. App.2013Background
- In 2003 the Shanes borrowed ~$98,000 from Wells Fargo secured by a Canfield condominium; they defaulted in Sept. 2010 and entered the bank’s loan-modification process.
- Wells Fargo filed a foreclosure complaint in May 2011 and later moved for summary judgment after alleging acceleration of the loan.
- The Shanes opposed summary judgment with an affidavit stating they provided documents, were in modification, were never offered a HUD-required face-to-face meeting, and that the bank failed to complete a loss-mitigation evaluation.
- The trial court granted summary judgment for Wells Fargo; the entry did not mention the borrowers’ opposition and the bank did not reply to some of the borrowers’ factual assertions before judgment.
- On appeal the Seventh District considered whether HUD regulations (incorporated by the note/mortgage) limiting acceleration/foreclosure created triable issues: (1) failure to offer a face-to-face meeting and (2) failure to evaluate/complete loss mitigation after starting the process.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the borrowers raise a triable issue that Wells Fargo failed to offer a HUD-required face-to-face meeting? | Wells Fargo: borrower must negate exceptions (e.g., no servicing branch within 200 miles) to create a genuine issue. | Shanes: affidavit saying no meeting was offered is sufficient to raise a genuine issue; bank must prove any exception. | Held: Borrowers’ affidavit created a genuine issue; burden shifts to bank to show an applicable exception. |
| Did the borrowers raise a triable issue that the bank failed to properly evaluate them for loss mitigation after initiating the process? | Wells Fargo: providing/ requesting documents shows evaluation occurred; borrowers must prove the regulations apply to them or that they were viable candidates. | Shanes: affidavit shows process was started but not completed and facts (medical leave, job loss) support entitlement to evaluation. | Held: Affidavit raised a genuine issue that the bank began but did not complete required loss-mitigation evaluation; summary judgment improper. |
| Was the trial court permitted to ignore the borrowers’ late-filed opposition and affidavit under local rules? | Wells Fargo: local rule deadlines control and borrowers’ opposition might be untimely. | Shanes: Civ.R. 56(C) permits opposing affidavits up to the day before hearing; magistrate set hearing date before local rule cutoff. | Held: Civ.R. 56(C) timeframe controls where scheduling order set the hearing date; the borrowers’ response was timely and must be considered. |
| Could the court rely on an unauthenticated acceleration letter attached to the bank’s motion? | Wells Fargo: borrowers never disputed receipt; the unauthenticated letter was immaterial. | Shanes: objected to unauthenticated document; it should not be considered. | Held: The letter was not properly authenticated and could not be considered if contested, but borrowers had not claimed non-receipt; nevertheless HUD-related defenses required remand. |
Key Cases Cited
- Byrd v. Smith, 110 Ohio St.3d 24, 850 N.E.2d 47 (Ohio 2006) (summary-judgment standard and movant’s initial burden)
- Dresher v. Burt, 75 Ohio St.3d 280, 662 N.E.2d 264 (Ohio 1996) (nonmovant’s burden to present specific facts in response to summary judgment)
- Leibreich v. A.J. Refrigeration, Inc., 67 Ohio St.3d 266, 617 N.E.2d 1068 (Ohio 1993) (courts must construe evidence in favor of nonmoving party)
- Hooten v. Safe Auto Ins. Co., 100 Ohio St.3d 8, 795 N.E.2d 648 (Ohio 2003) (Civ.R.56 notice requirements and fairness in summary-judgment scheduling)
- Farmers Prod. Credit Assn. of Ashland v. Johnson, 24 Ohio St.3d 69, 493 N.E.2d 946 (Ohio 1986) (regulatory directives lacking force of law do not create foreclosure defenses — distinguished on facts)
- Wells Fargo v. Phillabaum, 192 Ohio App.3d 712, 950 N.E.2d 245 (Ohio App. 2011) (discusses burden-shifting on HUD face-to-face meeting exception)
- State ex rel. Gilmour Realty, Inc. v. Mayfield Heights, 122 Ohio St.3d 260, 910 N.E.2d 455 (Ohio 2009) (restricting consideration of noncompliant summary-judgment materials)