*1 the general public that the rule lesser [of varies the outcome of the offenses] case.” dismissing Rather than appeal having improvidently this as been
accepted, have parties fully after briefed the issues and presented their oral court, arguments before this we untangle should instead make the effort to this clarify case and I law on these fundamental dissent issues. therefore from the majority’s decision to dismiss this appeal having improvidently as been accepted. I would take the opportunity clarify regarding Ohio law the state of lesser lesser-degree included and in light offenses of Deanda and regarding right defendant’s to have sufficiently proven lesser-degree offenses considered the finder of fact rather than the judge. appellate Because the court came to erroneous conclusions on all of the issues,
foregoing I judgment would reverse the of the Ninth District Court of Appeals hold jury provided should have been a voluntary-man- slaughter instruction and that acquittal the murder did not render the error harmless when Davis was alternatively charged with felony murder. J., opinion. concurs the foregoing
Lanzinger, Walsh, Sheri Bevan County Summit Prosecuting Attorney, and Richard S. Kasay, Prosecuting Assistant Attorney, appellee. for
Timothy Defender, Young, Ohio Public Scott, K. Terrence Assistant Public Defender, appellant. Barclay’s Capital Servicing. Estate, Inc.,
Anderson v.
Real
d.b.a.
Barclay’s Capital
Estate,
[Cite as Anderson v.
Real
{¶ 1} Ohio, District of Western Court the Northern the United States District (“CSPA”), Act Division, Sales Practices we address whether the Ohio Consumer of servicing residential applies in R.C. Chapter codified it not. We determine that does loans. Background
Relevant facts, circumstances, and following The federal court provided {¶2} of from which the law arise: allegations questions Estate, Inc., Servicing doing HomEq business as Barclays Real Capital here, is a “mort- underlying petitioner action and
(“HomEq”), defendant mortgages in the business of residential engages servicer” gage bank, institution, any or other not a HomEq individuals. is defined R.C. 5725.01. payments loan HomEq applies and distributes “accepts,
4}{¶ assessments, doing with exercises fees, in connection so penalties and other particular mortgage to a charged applied fees or regarding discretion “from the and other services HomEq for its loan administration paid account.” mortgages.” generated by stream the consumers’ payment call centers departments customer HomEq “maintains service to call by HomEq are directed being with loans serviced which Ohio residents loans” and customers their “directs concerns about questions [or] loss options concerning it for to contact danger are in default or default who mitigation loan modification and further holds having authority itself out as customers, make any, substantive decisions which if will regarding receive loan modification agreements HomEq loss assistance.” mitigation “handles con- disputes loans,” sumer their regarding and executes loan “negotiates modification, customers,” forbearance and other agreements directly with “makes customer service related on its promises website to which consumers are of, directed the servicer.” It also “purchases homeowner’s insurance on behalf of, and at expense consumers who believes to have purchased insurance required by mortgage.” the note and court federal determined that the interpretation (C) may be determinative of the case it. pending Finding before no
controlling precedent law, on the determinative issue Ohio case the federal court certified the us following questions to for answers:
1. Does the of a borrower’s residential loan mortgage consti- a tute “consumer transaction” as defined in the Consumer Ohio Sales Act, 1345.01(A)? Practices R.C. * * *
2. that Are entities service “suppliers loans engaged effecting in the business of or soliciting consumer transactions” within of meaning Act, Consumer Ohio Sales Practices R.C. 1345.01(C)? § us, Anderson, action, Before Sondra plaintiff the underlying contends
that mortgage servicing is a “consumer transaction” the mortgage because provides borrowers, servicer number a of services including accepting pay- ments and loan working borrowers to obtain modifications. She asserts that we must questions answer the certified affirmative. But counters that institutions, perform servicers services for financial not for bor- rowers, and therefore transactions commercial in nature and are not covered It CSPA. thus avers that we must questions answer the negative. follow, For the reasons that agree we with HomEq.
Analysis
prohibits
deceptive
The CSPA
unfair or
acts and unconscionable acts or
practices by
suppliers
before,
transactions
whether
occur
during,
1345.03(A);
or after the transaction. R.C.
and
Williams v.
Canton, L.L.C.,
Spitzer
546,
goods,
household,
to supply
or
or solicitation
family,
personal,
are primarily
not include transactions
transaction” does
things.
these
“Consumer
any of
institu-
[financial
4905.03 and 5725.01
defined in sections
persons,
between
customers,
for
Code,
except
their
transac-
Revised
defined]
tion
to 1321.48
to sections 1321.35
involving
pursuant
a loan made
tions
mortgages
in connection with residential
and transactions
Revised Code
brokers,
or
lenders
officers,
nonbank
between
customers;
involving
construction service
a home
their
transactions
Code;
4722.01
Revised
contract as defined
section
public
accountants
their
public
accountants
between
clients;
attorneys, physicians, or dentists
their
transactions between
and their
patients;
and transactions between veterinarians
clients
ancillary
treatment
services.
pertain
to medical
but
patients
1345.01(A).
nature,
compensate
been
having
designed
is remedial in
The CSPA
v. Ford
at common law. Einhorn
Motor
consumer remedies available
incomplete
Co.,
27,
(1990);
Martz,
see Roberts &
St.3d
548 N.E.2d
48 Ohio
Age:
Fees in Consumer
Damages
Attorney
Consumerism Comes
Treble
Practices
42 Ohio St.L.J.
Transactions —The Ohio Consumer Sales
(1981). Thus,
in favor of the
liberally
we must
construe
statute
consumer.
Is of a borrower’s
loan a “consumer transaction”? of a borrower’s residential question servicing The first asks whether {¶ 11} constitutes a “consumer transaction” as defined Ohio mortgage 1345.01(A)? It not. Practices does Consumer Sales servicing mortgage, one essential element R.C. In the a real estate lease, sale, chance, assignment, met: no award is not there is of a service a consumer. other transfer
35
Mortgage servicing is a contractual agreement
{¶
between the mortgage
13}
servicer and the financial institution that owns both the note and mortgage.
Mortgage
carried out in the absence of a contract between the
borrower and
servicer. We
recognize
the mortgage servicer’s
duties may involve direct and indirect interactions with borrowers on behalf of
the financial institution. Sometimes the mortgage
may
servicer
even assist in
borrower modifying
note,
the terms of the
but the mortgage servicer under-
takes the negotiation not for itself but on behalf of the financial institution.
These
1345.01(A).
interactions do not satisfy the
language
found R.C.
Instead, mortgage servicing, similar to appraisal
services,
services and title
is a
“collateral service” associated with a pure real estate transaction. Except for the
statute,
specified
the CSPA does not
apply
“collateral
services that
solely
associated
the sale of real estate and are necessary
to effectuate a ‘pure’ real estate
Amir,
transaction.” U.S. Bank v.
8th Dist. No.
¶
97438,
plain and ordinary meaning. See State v. Anthony, 2002-Ohio- ¶ 772 N.E.2d 11. Black’s Law Dictionary defines the term to mean *5 give.” (9th sell or Ed.2009). “[t]o Black’s Law Dictionary 1636 Here, the mortgage servicer neither sells gives nor the borrower the services it provides to the owner of the mortgage and note. A mortgage servicer provides a service to a institution, but providing such a service to a financial institution is neither analogous to transferring a service to a borrower FBS Mtge. See Rossbach v. liability to under the CSPA. impose nor sufficient C9-97-1852, (Apr. 7, *3 and 1998 WL Nos. Minn.App. C3-97-1622 Corp., on 1998) summary to servicer state judgment mortgage order (affirming granting through operated claims because the servicer consumer-protection-act home). plaintiffs the on that owned Accord entity a contract with the 05-238, Assn., D.Minn. WL Group, No. Glass Inc. Indep. Safelite 2005) of violation of state consumer- (dismissing claim (Aug. *7 who third-party administrator was laws where the defendant was protection noting and that the administrator obligation” a contractual insurers “fulfilling than companies” of rather the service for the benefit the insurance “provides consumer). Thus, insureds, provided no service to the under and thus there was statute, of a borrower’s residential plain reading 1345.01(A). as R.C. statute loan is not “consumer transaction” defined a financial institution contracts cannot be read to cover instances which simply entity its loans and mortgages. an service commentary to the Uniform Our conclusion is buttressed Act, which The commentary Sales Practices on the CSPA modeled. Consumer are, be, states, that land transactions and should assumption frequently “On the 7A, I, Part regulated by they altogether.” are excluded specialized legislation, Laws, on National Conference of Commissioners Uniform State Laws Uniform Annotated, Laws, Consumer Business and Financial Uniform Sales Practices 2(1), (Master Ed.2002). at 73 The transactions Official Comment to Section presented acceptance application mortgage payments here include the part of loans in Those transactions do not cease to be management default. originate transaction because that did simply land executes them. Further, that have a consumer-sales-practices other states enacted act specific language referring on the uniform act included to land transactions based See, real when wanted estate to be covered. the statutes 50-624(c) (j) “consumer transaction” to mean e.g., (defining Kan.Stat.Ann. estate). for value of include real property” defining “property” to “disposition That important. Ohio did not. omission is CSPA, In we note of past interpreting decisions have taken Assembly’s language. example, not to certain For
General decision include Hills, rejected attempt bring complaint we a residential tenant’s her Heritage Chapter doing, landlord the ambit of 1345. In so we against her within considered, enacted, Assembly but not a bill that General had recognized within the property have included the lease of real definition “consumer would 82-83, 551 125. 49 Ohio at N.E.2d transaction.” St.3d *6 Here, that recognize Assembly repeatedly we the General has amended Chapter specific 1345 to reach take place mortgage transactions that the industry. But it has not to incorporate mortgage chosen services within the definition of expanded subject provisions. to CSPA’s For General example, Assembly, through the Am.Sub.S.B. No. 185 22} {¶ (“S.B. 185”), 1345.01(A), amended R.C. effective to include expressly types of actively engaged three entities that mortgage market officers, previously subject brokers, were not to the CSPA: loan mortgage But, mortgage notably, nonbank lenders. the has the legislature expanded not application the CSPA to include mortgage servicers. Indeed, passed, after S.B. 185 Assembly 128th General considered 23}
{¶ would bill that have more brought regulation mortgage extensive servicers and them within included the ambit the CSPA. bill was Am.Sub.H.B. No. 3. That enacted, not however. will speculate why We not as to But bill failed. we do take notice of 24}
{¶ the legislative rejected the fact branch considered and amendment that statutory scheme that would have made specifically mortgage servicers liable under CSPA. rejection We conclude that Assembly’s General proposed 25}
{¶
supports
amendment
our
that
conclusion
servicers are
not covered
the current
If
language
Chapter
Assembly
of R.C.
1345.1
the General
See,
dissatisfied
our
it
interpretation, may
e.g.,
amend
Revised Code.
¶
Shay
Shay,
{¶ “supplier”?
Is a servicer a asks, question presented second entities that “Are service residen- * * * loans, tial ‘suppliers engaged in the effecting business of soliciting consumer meaning transactions’ within the of the Ohio Consumer Sales 1345.01(C)?” § Practices O.R.C. We hold that are not. Anderson’s centers on argument her belief because servicers like
HomEq engage borrowers, transactions with and essentially function as curiae, including organizations legal-aid 1. Amici that are about foreclo- concerned the number of Ohio, place thought-provoking arguments. accept that continue to sures take raise some And we argument regulation role, may sake of legislature’s for the But it be warranted. is the ours, bring mortgage scope. within the CSPA’s servicers “suppli- But the term under the CSPA. agencies, they “suppliers” collection not include servicer. under the CSPA does er” “ seller, lessor, franchisor, person or other ‘Supplier’ assignor, means transactions, whether effecting soliciting in the business of engaged *7 1345.01(C). The directly with the consumer.” R.C. person or not the deals statute, the by give are not the so we “effecting” “soliciting” defined terms and ordinary meanings. and plain terms their about; Law bring is to make Black’s happen.” “Effect” defined as “[t]o
{¶ 30} is act an instance of Dictionary at 592. defined as or “[t]he “Solicitation” at petition.” or Black’s something; request to obtain a requesting seeking Thus, CSPA, under those that cause a consumer “suppliers” 1520. the to a consumer happen transaction to or that seek enter into transaction. Here, soliciting in engage effecting does not the business HomEq {¶ 31} a mortgage transactions. The residential transaction is transaction Mortgage the that occurs between the institution and borrower. not is part simply servicing mortgage servicers are of this transaction. And the Similarly, a to causing consumer transaction servicers do happen. to enter borrowers. not seek into consumer transactions with that an a concluding entity We therefore have little trouble that services {¶ 32} 1345.01(C). mortgage loan is not a as defined in “supplier” residential
Conclusion answer in questions negative. We both certified state-law the
{¶ 33} CSPA, a consumer the Mortgage is not transaction under a a “supplier” that services residential is not under the CSPA. answered.
So Kennedy, JJ., O’Donnell, Lanzinger, concur. J.,
French, judgment only. concurs in O’Neill, JJ., dissent.
Pfeifer
O’Neill, J., dissenting. I the majority’s answering questions dissent from the decision certified I court in negative. questions believe that this should answer (“CSPA”) applies affirmative and hold that the Consumer Practices Act Sales mortgage-loan
to servicers. case, many it, In this like contracted homebuyer Subsequent to estate to provide a lender her with residential real loan. the note executing property, for the institution lending entered an agreement servicer, into with a mortgage HomEq Servicing. HomEq receives payment by for its services keeping portion of the consumer’s residential Thus, mortgage payments. the lender is contractually responsible for paying but HomEq, payment incorporated into the paid interest rate and fees consumer, in effect the cost of transferring HomEq’s services to the consum- er. As described the majority opinion, HomEq’s services are extensive and primarily involve interaction with the HomEq consumer. But is not a party contract, and although the consumer does not want necessarily any have sort of relationship with he or she has no HomEq, choice the matter. Anderson, According to Sondra plaintiff/consumer underlying case, complaint her alleges failed to apply mortgage payments her the manner required by her note and mortgage, provide failed to accurate information in response repeated her inquiries about her residential mortgage loan, and accepted payments without acknowledging them and without forward- *8 ing Thus, them to mortgage-loan her lender. subject she was HomEq’s neglect malfeasance, and yet she had no means of recourse because she and/or did not a have contractual relationship HomEq. Although some federal district courts have interpreted Ohio’s CSPA in cases,
similar the federal court reviewing the present case determined that there was no controlling precedent on the definitions of “consumer transaction” and “supplier” in the context of mortgage-loan servicers. I agree with Anderson’s that assertion mortgage-loan-servicing companies transfer their services to the consumers, because the provided services not do constitute part original real estate transaction 1345.01(A) and because the plain language of R.C. does not provide any exceptions for mortgage servicers. provides as follows: sale, lease,
“Consumer transaction” means a assignment, award chance, or other transfer of an goods, service, franchise, item of a a or an intangible, to an individual for purposes that primarily personal, household, family, or or solicitation to supply any of these things. “Con- sumer transaction” does not include transactions persons, between defined in sections Code, 4905.03 and 5725.01 of customers, the Revised and their except for transactions a loan involving pursuant made to sections 1321.35 1321.48 the Revised Code and transactions in connection with residential mortgages officers, brokers, between loan mortgage or non- mortgage customers; bank lenders their transactions a involving home construction service contract as defined in section 4722.01 of the Code; Revised transactions public between certified public accountants or clients; attorneys, physicians, their transactions between accountants and veteri- transactions between patients; their or or dentists and clients medical treatment but pertain patients narians and their ancillary services. a language, the statute establishes foregoing To summarize provision goods, that involve the transaction includes transactions
services, family, for or household intangibles personal, to individual consumers include Those provides exceptions. exceptions then purposes. statute institution, intangi- a a customer and a financial dealer transactions between to those bles, exception The statute then company. provides or an insurance entity, exempted financial institution or other even if the exceptions: if a particular a consumer transaction it is transaction nonetheless constitutes $500, a home involving under or if it is a transaction of short-term loan kind mortgage with a contract or transaction connection construction officer, mortgage or her loan an interaction between a customer his involving broker, Finally, exempts or nonbank the statute lender. professionals certain and their clients but those transactions patients, between controversy. pertinent present are not to the law, must in favor of liberally The CSPA is a remedial so it be construed Co., 27, 29, v. Ford Motor 548 N.E.2d
the consumer. Einhorn institution, (1990), intangi citing HomEq R.C. 1.11. is not dealer officer, bles, it fit within company, or an insurance nor does the definitions of broker, not fit within or nonbank lender. Thus does are not particular entities. Because servicers exceptions any statute, included, and their therefore excluded must be services *9 transactions that are covered the CSPA. constitute consumer is that of majority’s primary holding HomEq’s collection transactions, be- and other services cannot be considered consumer payments only relationship lending the contractual is with the institutions cause consumers’ the that services facilitate is the underlying HomEq’s and because transaction Thus, entirely the focuses on the majority real estate transaction. original However, the than on the transactions. parties transactions rather the underlying that of of R.C. demonstrates the nature language identity does not matter as much as commercial transaction that the transaction Specifically, provides involved transaction. statute qualifies as a consumer between a consumer and “nonbank lender” transaction, will involve real estate though relationship obviously pure even transaction.
41
Further,
in
many
applicability
federal decisions
address the
servicers,
Ohio’s
to mortgage-loan
may
CSPA
the courts have held that the CSPA
L.P.,
2:05-CV-0098,
v.
apply. Dowling
Litton Loan
S.D.Ohio
Servicing,
No.
3498292,
(Dec. 1, 2006);
2006
at
Mtge.
WL
*13-14
Kline v.
Electronic Registra
(Mar.
Inc.,
3:08cv408,
1233642,
29,
tion Sys.,
2011);
S.D.Ohio No.
2011
at *4-5
WL
L.P.,
l:10-CV-00783,
Jent v.
Servicing,
BAC Home Loans
No.
S.D.Ohio
2011 WL
2971846,
21,
Bank,
(July
2011);
at *3
Munger v. Deutsche
N.D.Ohio No. 1:11-
CV-00585,
2930907,
2011);
Inc.,
18,
2011 WL
at *9 (July
CitiMortgage,
Sims v.
(Jan.
2013).
00096,
310236,
25,
1:12
N.D.Ohio No.
CV
2013
at *5
WL
These
decisions
on the
of liberal
rely
principle
application
favor of the
analogize
mortgage servicers
consumer-debt collectors. “Ohio courts have
long held that entities
engaging
collection
consumer debts are suppli
*4,
Research,
ers.”
Kline at
v.
citing
Celebrezze United
Ohio App.3d
19
(9th Dist.1984).
whether debt collectors fall purview within the of the CSPA confirms that the appropriate focus this is on analysis identity of the commercial entity involved in the transaction instead of original the nature of the underlying Early transaction. federal subject decisions on the had determined that debt collecting did not involve consumer transactions under the CSPA if Ohio original was a institution, lender financial even when the debt collection took place after the debt had been transferred to debt collector. See Gionis v. Javitch, Rathbone, (S.D.Ohio 2005). Block & Later, F.Supp.2d rejected federal courts that view and that an assignee determined of a debt who is not a financial institution no has entitlement to the financial-institution exemp- tion to the reasoning CSPA. The A compelling. debt collector is not a institution, much as a mortgage servicing company is not as well. See Javitch, Rathbone, (S.D.Ohio Lee L.L.P., 2007). Block & 522 F.Supp.2d The holding that a nonexempted entity cannot hide exempted behind the status of the original entity is supported the fact that bank “[a] customer has other adequate if remedies a bank engage deceptive should or unfair conduct in making a loan or issuing a card. credit But if the financial past institution sells a due or defaulted debt at a deep discount to party, unrelated whose only collection, business is debt policy sound for the financial exemption institution evaporates.” Id. fact, In exceptions the other to the justified by CSPA also the fact
that the transactions involved are heavily regulated by
statutory
other
schemes.
See,
Hills,
Deacon,
e.g., Heritage
80, 83,
Ltd. v.
Murray Murray & Stewart, respondent. J. Kathleen M. Arthur, L.L.P., D. Curphey, James
Porter, Morris & Wright, L.L.P., Sandler, Benjamin and Buckley Trafford, Hughes; L. Bradfield Klubes, for petitioner. B. Crawford; L.L.C., Law Associates, Ian Wells
Crawford, and G. Lowry & answered questions be Wells, that the certified Office, Amy urging L. Association for Justice. amicus curiae Ohio the affirmative for General, Schimmer, General, Alexandra T. Solicitor DeWine, Attorney Michael Loeser, Solicitor, Assistant Jeffrey R. Hendershot, Deputy Chief Michael J. affirma- answered General, questions that the certified be urging Attorney Attorney General. amicus curiae the Ohio tive for *11 Cook, Dreshman, Greenwald,
Linda E. Tammy Chablani, Lauren L. L. Aneel Neuhauser, D. and Andrew urging that questions be answered affirmative amici curiae Ohio Legal Programs, Services on Coalition Home- Ohio, Housing Center, lessness and Fair Toledo Miami Housing Valley Fair Center, Housing National Consumer Law Center. Appellee. Ohio, Appellant, Athon,
The State
Athon,
State v.
[Cite as
Ohio