Case Information
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[Cite as
Natl. City Real Estate Serv. L.L.C. v. Shields
,
IN THE COURT OF APPEALS ELEVENTH APPELLATE DISTRICT TRUMBULL COUNTY, OHIO
NATIONAL CITY REAL ESTATE : O P I N I O N SERVICES LLC SUCCESSOR BY
MERGER TO NATIONAL CITY :
MORTGAGE INC., f.k.a. NATIONAL CASE NO. 2012-T-0076 CITY MORTGAGE CO., :
Plaintiff-Appellee, :
- vs - :
BRANDON S. SHIELDS :
a.k.a. BRANDON SHIELDS, et al.,
Defendant-Appellant. : Civil Aрpeal from the Trumbull County Court of Common Pleas, Case No. 2009 CV 01385.
Judgment: Affirmed.
Natalia Steele and Lisa Babish Forbes, Vorys, Sater, Seymour & Pease, LLP, 2100 One Cleveland Center, 1375 E. 9th Street, Cleveland, OH 44114 and Julia E. Steelman , Lerner, Sampson & Rothfuss, 120 E. Fourth Street, 8th Floor, Cincinnati, OH 452024 (For Plaintiff-Appellee).
Philip Zuzolo and Patrick B. Duricy , Zuzolo Law Office, LLC, 700 Youngstown-Warren Road, Niles, OH 44446 (For Defendant-Appellant).
COLLEEN MARY O’TOOLE, J. Appellant Brandon Shields appeals the judgment entry of the Trumbull
County Court of Common Pleas, which granted the motion for summary judgment on *2 the foreclosure action filed by National City Real Estate Services. For the following reasons we affirm the judgment of the trial court. Appellant Brandon Shields (“Mr. Shields”) purchased a home in
McDonald, Ohio in 2004. National City Mortgage Company (“NCMC”) originated Mr. Shields’ loan on Seрtember 21, 2004. In 2008, Mr. Shields was laid off from his job, which substantially decreased his income. Additionally, Mr. Shields’ father was diagnosed with cancer and Mr. Shields spent considerable time at his father’s house providing care and transportation for medical appointments. Due to these factors, Mr. Shields was unable to make the required
monthly payments on his loan in March, April or May 2009. Appellee Nаtional City Real Estate Services, LLC (“NCRES”), as successor by merger to National City Mortgage, Inc., fka National City Mortgage Co. (“NCMC”) filed foreclosure proceedings against Mr. Shields in the Trumbull County Court of Common Pleas on May 21, 2009. In its complaint, NCRES alleges that it is the holder and owner of the note
and mortgage. Copies of the note and mortgage are attached to the complaint. Mr. Shiеlds received service of the foreclosure complaint on May 28, 2009, however Mr. Shields did not answer the complaint within the time allowed. Mr. Shields subsequently requested and received a reinstatement
estimate from NCRES’ foreclosure counsel via a letter dated July 8, 2009. The letter estimated that the amount necessary to reinstate Mr. Shields’ loan through July 30, 2008 was $6,573.74. The letter states that the foreclosure fees and costs are an estimate and that past-due monthly payments and late fees alone total $3,283.55. On August 8, 2009 NCRES received a check from Mr. Shields for $3,200. On September 8, 2009 Mr. Shields’ check was returned to him. NCRES moved for default judgment against Mr. Shields on September 9,
2009. Five days before the default judgment hearing, on October 21, 2009, Mr. Shields moved the trial court for leave to file his answer instаnter, and was granted leave. NCRES moved for summary judgment on its complaint for the first time on November 18, 2009. Mr. Shields did not respond to NCRES’ first motion for summary judgment, but instead requested mediation, propounded discovery on NCRES, and moved for additional time to oppose NCRES’ summary judgment motion. In April 2010, Mr. Shields moved the trial court for leave to amend his
answer to add a counterclaim and for additional time to respond to NCRES’ motion for summary judgment. Mr. Shields received leave and filed his counterclaim on May 12, 2010. Mr. Shields’ counterclaim consisted of three counts: one for violation of the Fair Debt Collections Practices Act (“FDCPA”); one for violation of the Ohio Consumer Sales Practices Act (“OCSPA”), and one for fraudulent misrepresentation. NCRES withdrew its motion for summary judgment and answered the сounterclaim on July 29, 2010. The parties then engaged in mediation beginning in July 2010, continuing through December 2011. The parties’ settlement efforts failed, and on April 20, 2012, NCRES, which had now merged with PNC Bank, filed its motion for summary judgment on its complaint and on Mr. Shields’ counterclaim. Mr. Shields opposed NCRES’ motion for summary judgment. NCRES replied in support of its motion. Mr. Shields requested and was granted leave to file a surreply to NCRES’ motiоn, which he filed on August 8, 2012. The trial court granted NCRES’ motion for summary judgment on August 21, 2012. Mr. Shields filed his notice of appeal on September 7, 2012. Mr. Shields assigns the following errors for our review:
{¶10} “[1.] The trial court erred in granting summary judgment to Plaintiff NCRES on the two counts of its complaint when the Appellee did not have standing to file the complaint, the Appellee breached the contract by charging excessive fees and costs, and equity demanded that the foreclosure be denied. “[2.] Although the trial court granted Summary Judgment dismissing the
Appellant’s counterclaims without giving any reasoning, the Trial Court erred if it dismissed Appellant’s claims under the Fair Debt Collection Practices Act by accepting Appellee’s erroneous position that PNC and the named Appellee were not debt collectors under the Act and that Appellee’s conduct in charging unreasonable fees for reinstatement of his mortgage did not violate the FDCPA. “[3.] Although the trial court granted Summary Judgment dismissing the
Appellant’s counterclaims without giving any reasoning, the trial court erred if it dismissed Appellant’s claims under the Ohio Consumer Sales Practices Act ORC 1345.01 et seq. (OCSPA) by accepting the Appellee’s argument that the OCSPA did not apply to the National City Real Estate Services, LLC and PNC. [1] “[4] Although the trial court granted Summary Judgment dismissing Appellant’s fraudulent misrepresentation counterclaim without giving any reasoning, the trial court erred if it accepted the Appellee’s argument that there were no false statements made in connection with the reinstatement and the Appellant did not justifiably rely on any statement.” We review summary judgment rulings de novo, applying the same
standard as the trial court. Lorain Natl. Bank v. Saratoga Apts., 61 Ohio App.3d 127
(9th Dist.1989); Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105 (1996). Under
1. At oral argument of this case, and by motion filed thereafter, Mr. Shields withdrew his OCSPA claims.
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Civ.R. 56(C), summary judgment is appropriate where (1) no genuine issue as to any
material fact exists; (2) the moving party is entitled to judgment as a mаtter of law; and
(3) reasonable minds can come to but one conclusion, and viewing the evidence most
strongly in favor of the nonmoving party, that conclusion is adverse to the nonmoving
party. Harless v. Willis Day Warehousing Co. Inc.,
demonstrating that no genuine issue of material fact exists. Dresher v. Burt, 75 Ohio St.3d 280, 292 (1996). The moving party must point to some еvidence in the record of the type listed in Civ.R. 56(C). Id. at 292-293. Under Civ.R. 56(C ) , the evidence to be considered is limited to the “pleadings, depositions, answers to interrogatories, written admissions, affidavits, transcripts of evidence, and written stipulations of fact, if any, timely filed in the action * * *.” Nevertheless, the trial court may consider a type of document not expressly mentioned in Civ.R. 56(C) if such document is аccompanied by a personal certification that it is genuine or is incorporated by reference in a properly framed affidavit pursuant to Civ.R. 56(E). See Bowmer v. Dettelbach, 109 Ohio App.3d 680, 684 (6th Dist.1996). The burden then shifts to the nonmoving party to provide evidence showing that a genuine issue of material fact does exist. Dresher at 293; Civ.R. 56(E). To properly support a motion for summаry judgment in a foreclosure
action, a plaintiff must present evidentiary-quality materials showing: (1) the movant is
the holder of the note and mortgage, or is a party entitled to enforce the instrument; (2)
if the movant is not the original mortgagee, the chain of assignments and transfers; (3)
the mortgager is in default; (4) all conditions precedent have been met; and (5) the
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amount of principal and intеrest due. Wachovia Bank v. Jackson, 5th Dist. No. 2010-
CA-00291,
that the trial court erred in granting summary judgment since NCRES lacked standing as it was not the holder of the note at the time of the filing of this action in the trial court. In its appellee brief, NCRES states that Mr. Shields failed to properly raise this issue in the trial court and should not be allowed to raise it on appeаl. Mr. Shields argues in his reply brief that subject matter jurisdiction can never be waived and may be challenged at any time. “It is well understood * * * that the lack of subject matter jurisdiction may
be raised anytime.” Hunt v. Hunt , 2d Dist. No. 93-CA-92,
may enforce a note. R.C. 1301.01 et seq . Article 3 of the U.C.C. governs the creation, transfer and enforceability of negotiable instruments, including promissory notes *7 secured by mortgages on real estate. Fed. Land Bank of Louisville v. Taggart, 31 Ohio St.3d 8, 10 (1987). The threshold requirement of standing depends upon whether the plaintiff
has a real interest in the subject mаtter of the action. State ex rel. Dallman v. Court of
Common Pleas, Franklin Cty., 35 Ohio St.2d 176, syllabus (1973). In a foreclosure
action, the holder of the note and mortgage is the real party in interest. Deutsche Bank
Natl. Trust Co. v. Greene, 6th Dist. No. E-10-006,
loaned Mr. Shields the principal amount of $70,000.00 on September 21, 2004. NCMC *8 endorsed the note in blank. Mr. Justice then outlined the sequencе of events and mergers whereby NCMC split into two separate entities on January 1, 2005: NCMC and National City Mortgage Inc. (“NCMI”). NCMI remained the originator of the loan and NCMC serviced the loan. According to Justice’s testimony, NCMI (loan originator) merged with and into National City Real Estate Services (a wholly owned subsidiary of National City Bank) effective January 1, 2007. NCMC (loan servicer) merged with and into National City Bank (“NCB”) effective October 1, 2008. NCB later merged with and into PNC on November 6, 2009. NCRES became a wholly-owned subsidiary of PNC at the time of the merger between NCB and PNC and then was dissolved as a corporate entity the next day. Mr. Justice testified that the original note and mortgage remained in
possession of National City from the origination of Mr. Shields’ loan until the merger with PNC. He further testified that after the mеrger of NCB with PNC, PNC took possession of the original note and mortgage and that these documents have remained in PNC’s possession since. Freddie Mac’s alleged ownership of the loan does not operate to prevent
NCRES from instituting a foreclosure action if NCRES is the holder of the note. Fuller v. Lerner, Sampson, Rothfuss, L.P.A ., N.D. Ohio No. 10 CV 2453, 2012 U.S. Dist. LEXIS 135538 (May 14, 2012). Mr. Shields argues that as NCRES submitted two versions of the note in
different pleadings, a genuine issue of material fact exists regarding NCRES’ standing. As Mr. Shields has noted, the version of the note attached to the initial complaint and in the first motion for summary judgment contained no endorsement. In its second motion for summary judgment NCRES attached a copy of the note containing an endorsement *9 to “NATIONAL CITY MORTGAGE CO.” Mr. Shields alleges that these “inconsistent” versions of the notе are further evidence that NCRES did not have standing on the day the complaint was filed. We disagree. The documentary and testimonial evidence offered by NCRES shows a
clear chain of custody of the note and mortgage from National City Mortgage Company (later named National City Mortgage Inc.) to National City Real Estate Services, LLC (a wholly owned subsidiary of National City Bаnk) finally to PNC Bank through the merger of NCB and PNC. Mr. Shields offers no evidence to refute NCRES’ claim that a copy of the note was made prior to the endorsement and another copy was made after the endorsement. Additionally, Mr. Shields fails to explain how the existence of these two slightly-different versions of the note supports his claim that NCRES lacked standing to institute foreclosurе proceedings. Mr. Shields also argues that as NCRES was dissolved after the merger of
NCB and PNC, the trial court improperly granted summary judgment to an entity that no
longer exists. NCRES correctly notes that R.C. 1701.88 provides that the dissolution of
a corporation does not abate any claim, action or proceeding pending by the
corporation. State ex rel. Falke v. Montgomery Cty. Residential Dev. ,
Shields avers that the trial court erred in granting NCRES summary judgment by failing to consider whether equity would prohibit the relief of foreclosure. Mr. Shields argues that foreclosure is an equitable remedy and that NCRES is not entitled to foreclosure because NCRES refused to accept his check for $3,200.00 and never informed him that *10 Freddie Maс requires that the servicer of a mortgage accept partial reinstatement for fees and costs. Mr. Shields claims that his tender of $3,200.00 to NCRES was sufficient to
satisfy his arrearage. However, as NCRES points out, this amount (even if sufficient to pay the arrearage) was insufficient to cover the late charges, foreclosure fees and other costs. These charges are all outlined in the mortgage at paragraph 19. And Shields cites to no mortgage provision or authority to support his argument that NCRES acted inequitably by failing to accept his offer. The Freddie Mac servicing guidelines that Mr. Shields attached as an
exhibit were obtained from an internet site. As such these guidelines are hearsay and
inadmissible in a motion for summary judgment. Tolliver v. Fed. Republic оf Nigeria ,
claims that NCRES materially breached the contract between them by charging him unreasonable and unearned fees and costs as a condition of reinstatement. Mr. Shields alleges that the charges assessed to his loan, according to NCRES’ own tally, only amounted to $1,716.00—yet NCRES demanded $2,993.00 in costs and fees to reinstate his mortgage. Mr. Shields maintаins that these fees were demonstrably *11 unreasonable and that NCRES’ refusal to reinstate the loan without full payment of these fees amounted to a material breach of the contract which excused Shields’ performance. NCRES states that the $2,993.00 fee included over $2,400.00 in costs to
date, with an additional $500.00 reserved for future service expenses. NCRES properly cites to the record indicating where these figures can be found. Mr. Shields’ citations to the record do not match the numbering established by the Clerk of Courts for the trial docket in this matter. Therefore, Mr. Shields claim that NCRES’ charges exceeded the actual costs by $1,300.00 cannot be confirmed without this court scouring the record— which it is not required to do. Hammond v. Cleveland , 8th Dist. No. 97174, 2012-Ohio- 494, ¶24; see also App.R. 12(A)(2) аnd 16(A)(7). Regardless, the letter from NCRES’ attorneys clearly states that the costs are only an estimate and that any overage would be sent back to NCRES for further handling. Payment of foreclosure expenses as a condition of reinstatement is a
reasonable requirement by the lender. Washington Mutual Bank v. Mahaffey , 154 Ohio
App.3d 44,
party impossible. Mr. Shields fails to explain how the alleged $1,300.00 overcharge made it impossible for him to perform his part of the contract. Mr. Shields’ first assignment of error is without merit.
{¶37} Mr. Shields’ second and fourth assignments of error are based upon his speculation as to why the trial court might have granted NCRES summary judgment regarding the issues raised in his counterclaim. Mr. Shields admits the trial court made no written finding regarding these claims. As these assignments all involve Mr. Shields’ speculation, rather than a written finding, we will address them together. In these assignments of error Mr. Shields states that the trial court erred in granting summary judgment to NCRES if the trial court:
{¶38} Accepted NCRES’ position that it is not a debt collector under the Fair Debt Collection Practices Act (“FDCPA”) (Second Assignment of Error, First Issue); Accepted NCRES’ argument that Shields did not present evidence that the fees and costs required to reinstate his mortgage were unreasonable (Second Assignment of Error, Second Issue); Accepted NCRES’ position that the reinstatement quote did not contain a
false statement regarding the amount of fees and costs necessary to reinstate the loan (Fourth Assignment of Error, First Issue); Accepted NCRES’ argument that Shields did not justifiably rely on
NCRES’ fraudulent misrepresentation regarding the fees and costs necessary to reinstate the loan (Fourth Assignment of Error, Second Issue). Pursuant to Civ.R. 52, a trial court is not required to make findings of fact
or conclusions of law when ruling on a motion for summary judgment. Portfolio
Recovery Assoc. v. Dahlin , 5th Dist. No. 10-CA-000020,
trial court’s actions remains just that: speculation. Without a proper record, addressing
these assignments of error would be tantamount to issuing an advisory opinion, which is
not the role of this court. State ex rel. White v. Kilbane Koch ,
TIMOTHY P. CANNON, P. J.,
DIANE V. GRENDELL, J.
concur.