THIRD FEDERAL SAVINGS & LOAN ASSOCIATION OF CLEVELAND v. RONALD S. FORMANIK, ET AL.
No. 103649
Court of Appeals of Ohio, Eighth Appellate District, County of Cuyahoga
October 27, 2016
2016-Ohio-7478
[Cite as Third Fed. S. & L. Assn. of Cleveland v. Formanik, 2016-Ohio-7478.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 103649
THIRD FEDERAL SAVINGS & LOAN ASSOCIATION OF CLEVELAND
PLAINTIFF-COUNTERCLAIM
DEFENDANT/APPELLEE
vs.
RONALD S. FORMANIK, ET AL.
DEFENDANTS-COUNTERCLAIM
PLAINTIFFS/APPELLANTS
JUDGMENT:
AFFIRMED
Cuyahoga County Court of Common Pleas
Case No. CV-10-738704
BEFORE: E.A. Gallagher, P.J., Stewart, J. and Laster Mays, J.
RELEASED AND JOURNALIZED: October 27, 2016
ATTORNEY FOR APPELLANTS
Kathleen Amerkhanian
Kryszak & Associates Co., L.P.A.
5330 Meadow Lane Court, Suite A
Sheffield Village, Ohio 44035
ATTORNEYS FOR APPELLEE
Jessica M. Wilson
Dean K. Hegyes
Reimer, Arnovitz, Chernek & Jeffrey Co., L.P.A.
P.O. Box 3969
30455 Solon Road
Solon, Ohio 44139
EILEEN A. GALLAGHER, P.J.:
{¶1} Defendants-counterclaim plaintiffs/appellants, Ronald Formanik (“Formanik”) and Vicki Formanik (collectively, the “Formaniks”), appeal the trial court’s judgment in favor of plaintiff-counterclaim defendant/appellee Third Federal Savings & Loan Association of Cleveland (“Third Federal”) on the Formaniks’ claims for breach of implied contract, breach of the covenant of good faith and fair dealing, a violation of R.C. 1345.031(B)(12) and “wrongful foreclosure” arising out of Third Federal’s filing of a foreclosure action following Formanik’s alleged default on a bridge loan he had obtained from Third Federal. The Formaniks argue that the trial court erred in finding that Third Federal did not breach the terms of the bridge loan and that the parties’ course of performance did not give rise to an implied contract that extended the maturity date of the bridge loan. The Formaniks further argue that the trial court erred in finding that Third Federal did not act in bad faith in refusing to accept interest-only payments after the loan was allegedly in default and refusing to remove negative information from Formanik’s credit report regarding the loan. Finally, the Formaniks contend that the trial court erred in concluding that Third Federal had not engaged in unlawful “mortgage flipping” and that their claim for “wrongful attempted foreclosure” is not cognizable under Ohio law.
{¶2} For the reasons that follow, we affirm the trial court’s judgment.
{¶3} In August 2007, Formanik obtained a bridge loan from Third Federal, executing a note payable to Third Federal for the principal amount of $113,000. The
purpose of the bridge loan was to provide funds for the Formaniks’ down payment on a new home in North Royalton and was secured by a mortgage on the Formaniks’ then-residence in Middleburg Heights.1 Under the terms of the note, the principal balance and accrued interest were due on the maturity date, September 1, 2008, with interest accruing on the outstanding principal balance at the rate of 7.75 percent per year until maturity.2
{¶4} With respect to what constitutes a default and the remedies available to the lender upon default, the note provides, in relevant part:
If this note is secured by real estate of a residence that is personal property, the existence of a default and your remedies for such a default will be determined by applicable law, by the terms of any such separate instrument creating the security interest and, to the extent not prohibited by law and not contrary to the terms of the separate security instrument, by the “Default” and “Remedies” paragraphs herein.
No default or remedy provisions are specified in the mortgage.3
{¶5} Under the terms of the note, the borrower is in default if he “fail[s] to make a payment on time or in the amount due.” The note provides that upon default, the lender “may demand immediate payment of all [the borrower] owe[s] [the lender] under this note (principal, accrued unpaid interest and other accrued charges)” and “may use any remedy” available to the lender “under state or federal law.” The note further provides: “by waiving [its] right to declare an event to be a default, [the lender] does not waive [its] right to later consider the event as a default if it continues or happens again.”
{¶6} Further, pursuant to the note’s “waiver” provision, the borrower agrees:
WAIVER. I give up my rights to require you to do certain things. I will not require you to:
(1) demand payment of amounts due (presentment);
(2) obtain official certification of nonpayment (protest); or
(3) give notice that amounts due have not been paid (notice of dishonor). * * *
The note also states, in relevant part:
PAYMENTS: Each payment I make on this note will first reduce the amount I
owe you for charges which are neither interest nor principal. The remainder of each payment will then reduce accrued unpaid interest, and then unpaid principal. If you and I agree to a different application of payments, we will describe our agreement on this note. I may prepay a part of, or the entire balance of this loan without penalty, unless we specify to the contrary on the note. Any partial prepayment will not excuse or reduce any later scheduled payment until this note is paid in full (unless, when I make the prepayment, you and I agree in writing to the contrary). * * *
contained herein.” However, the “master mortgage” is not part of the record. The mortgage further provides that “[i]f for any reason the Master Mortgage Form shall not be deemed a part of this Security Instrument, then this two (2) page instrument, together with any and all attachments, shall stand by itself as a mortgage given as security to Lender * * * for the payment and performance obligations of each Borrower under the Loan * * * .”
OBLIGATIONS INDEPENDENT. * * * You may sue me alone, or anyone else who is obligated on this note, or any number of us together, to collect this note. You may do so without any notice that it has not been paid (notice of dishonor). * * * If you give up any of your rights, with or without notice, it will not affect my duty to pay this note. * * * I agree that you may at your option extend this note or the debt represented by this note, or any portion of the note or debt, from time to time without limit or notice and for any term without affecting my liability for payment of the note. * * *
{¶7} Formanik testified that it was his understanding that he was required to make monthly interest-only payments on the note until its maturity date and then pay off the principal balance when the note matured on September 1, 2008. From September 2007 through August 2008, the Formaniks made monthly interest-only payments on the bridge loan. Vicki Formanik made each payment by bringing the payment into a local Third Federal branch. In addition, in late 2007, after the Formaniks sold a lot they had owned, Formanik paid $48,000 towards the principal balance. As of the September 1, 2008 maturity date, a principal balance of approximately $65,000 remained due on the note.
{¶8} Formanik testified that in August 2008, as the maturity date approached, he received two or three letters from Third Federal reminding him that “the principal was coming due” on the bridge loan. The Formaniks had not yet sold their Middleburg
Heights home4 and lacked the funds to pay off the note. The Formaniks, therefore, failed to pay the $65,000 principal balance due on the maturity date, September 1, 2008.
{¶9} After the maturity date passed, Third Federal continued to send monthly statements to Formanik for interest-only payments on the bridge loan. It made no demand for the payment of the past due principal balance. Formanik testified that in 2009, when the Formaniks refinanced the $221,000 mortgage on their North Royalton home, Third Federal made no mention of the expired maturity date on the bridge loan. The Formaniks continued to make, and Third Federal continued to accept, interest-only payments on the bridge loan without incident until February 2010.
{¶10} In February 2010, when Vicki Formanik went to her local Third Federal branch and attempted to make an interest-only payment on the bridge loan, the bank teller informed her that she could not accept the payment because the account had been frozen. Third Federal also rejected an interest payment tendered by the Formaniks in March 2010.
Federal had rejected — stating that his loan was “seriously delinquent” and threatening foreclosure if the loan was not made current. Third Federal made no demand for the payment of the outstanding principal balance and did not provide any notice of default on the note.
{¶12} Marlo Blackman, a legal analyst on Third Federal’s foreclosure team, testified that Third Federal’s monthly billing statements and demand letters are automatically generated by its systems, signed by the appropriate representative and sent out to its customers. Blackman could not explain why the letters and statements generated by Third Federal’s automated system for the bridge loan showed only interest as having been due. She testified that there was no agreement between Third Federal and Formanik that Third Federal would not initiate foreclosure proceedings so long as he continued making interest-only payments on the bridge loan.
{¶13} In April 2010, Formanik received a “past due notice” and demand letter listing a “total amount due” of $1,242. He began communicating with Third Federal collections department representative Tim Flynn regarding the bridge loan.5 Formanik testified that Flynn told him his account had been “frozen” because the loan was not paid off by the maturity date. As a result of the account “freeze” (and the nonpayment of interest resulting from the “freeze”), the account was reported on Formanik’s credit report as delinquent. Formanik testified that he requested a short-term extension of the bridge
loan (originally a 90-day extension, then later, a 12-month extension) from Third Federal. He also requested that Third Federal remove the delinquency reference from his credit report, claiming that it was not accurate. On April 20, 2010, Formanik received a letter from Flynn requesting “workout documentation” to “aid [Third Federal] in developing a workout solution tailored to your specific situation.”
{¶14} In May 2010, Formanik sent a letter to Third Federal president Mark Stefanski challenging the bank’s authority to refuse payments on invoices it had sent and indicating that he thought Third Federal’s collection practices were “abusive.” On May 17, 2010, Third Federal sent Ronald Formanik a “past due notice” listing a “total amount due” of $1656, representing unpaid interest for February through May 2010. The Formaniks promptly tendered the past due interest and Third Federal accepted the payment. Third Federal also accepted the Formaniks’ interest-only payments for June 2010 and July 2010.
{¶15} Formanik, a vice-president credit audit functional manager at PNC Bank with 32 years of experience in the banking industry, claimed that the delinquency reported by Third Federal on his credit report rendered him “unbankable.” In support of his claim, Formanik introduced printouts of various “alerts” he had received in connection with a credit report monitoring service to which he subscribed, reporting “potentially negative information” that had been posted to his credit report relating to his Third Federal account.
Experian reporting a “current balance” of $64,983 on the account.6 Blackman acknowledged that although the delinquency on Formanik’s account related to the matured bridge loan, it was a delinquency in the monthly interest payments that Third Federal had initially reported to the credit reporting agencies. Formanik testified that after the negative information appeared on his credit report, he was turned down for overdraft protection on a free checking account (in July 2010), denied a car loan on a vehicle for his daughter (in May 2010), rejected for credit from GE Money Bank (in October 2010) and had to make a security deposit before utilities could be placed in his name after a tenant moved out (in October 2010). Formanik introduced “rejection letters” from each of these creditors in support of his claim.
{¶16} Formanik testified that Flynn had told him verbally that Third Federal’s loan committee had denied his request for a loan extension. However, in June 2010, Ronald Formanik received a letter from Deborah Hand, Third Federal’s Collections Manager, indicating that Third Federal “did not deny the extension request but sought to
offer one of two possible solutions”: (1) conversion of the bridge loan into a home equity loan or (2) a deed-in-lieu of foreclosure. As to Formanik’s request that Third Federal delete the negative information on his credit report, Third Federal refused, stating that “[a]s the account still contains a maturity date of September 2008, the trade line is reporting accurately.”
{¶17} Ronald Formanik declined Third Federal’s “solutions.” He testified that he was actively marketing the property to sell it and that because Third Federal had begun accepting his payments again and “hadn’t stepped up any collection efforts,” he did not further inquire if there were any other terms on which Third Federal would grant him a loan extension. Blackman testified that Third Federal never received all of the documents necessary to approve any extension or “work out” at that time.
{¶18} After accepting interest-only payments on the bridge loan for June and July 2010, Third Federal once again refused the Formaniks’ tendered interest payments for August and September 2010 because the loan was placed in foreclosure status. In each instance, Third Federal returned the check to Formanik and gave him a “non-monetary receipt” to evidence the fact that he had attempted to make a payment but that it had been refused.
{¶19} After Third Federal refused the August and September 2010 payments, Formanik contacted Blackman and explained to her what had occurred. Formanik
again requested that Third Federal agree to a short-term extension of the bridge loan and remove the delinquency from his credit report so that he could “refinance someplace else” and “pay [the bridge loan] off in full.” Blackman spoke with Hand, her manager, about Formanik’s request for an extension. Third Federal thereafter offered Formanik a 90-day extension of the bridge loan; however, it would not agree to delete the negative information from his credit report. Ronald Formanik declined Third Federal’s offer, indicating that, without the deletion of the negative credit report information, “[a] 90-day extension does nothing for me.” He testified that he needed a longer extension of the bridge loan because “it would take time for my credit to heal.”7
{¶20} On October 8, 2010, Third Federal filed a foreclosure action based on Formanik’s default on the note secured by the Middleburg Heights property. The Formaniks filed an answer and counterclaim, asserting a laundry list of affirmative defenses and counterclaims for breach of implied contract, breach of the covenant of good faith and fair dealing, violation of R.C. 1345.031(B)(12) and wrongful foreclosure. The Formaniks claimed that an implied contract to extend the maturity date of the bridge loan arose, based on the parties’ course of dealing, when Third Federal continued to accept interest-only payments from the Formaniks after the loan’s maturity date and that Third Federal breached this agreement in February 2010 when it “arbitrarily began to refuse to accept” the Formaniks’ interest payments. The Formaniks further alleged that Third Federal’s actions in (1) refusing to accept their interest payments while simultaneously sending letters urging them to make interest payments and (2) failing to remove negative information from Formanik’s credit report were not in good faith and caused the Formaniks to go into default, resulting in a wrongful foreclosure. In addition, the Formaniks alleged that Third Federal’s offer to convert the bridge loan into a home equity loan constituted unlawful “mortgage flipping” in violation of R.C. 1345.031(B)(12). The Formaniks sought to recover in excess of
denying the remaining allegations of the Formaniks’ counterclaim and asserting that the Formaniks’ claims were barred by the statute of frauds.
{¶21} After the foreclosure action was filed, the Formaniks sold the Middleburg Heights property. Although the Formaniks had originally listed the property at $300,000 in June 2009, they sold the property for $160,000 in December 2010. The Formaniks claimed that Third Federal’s actions forced them to sell the Middleburg Heights property at a price that was well below its fair market value in order to pay off the bridge loan and avoid foreclosure.
{¶22} The Formaniks used the proceeds of the sale to pay off the bridge loan and Third Federal voluntarily dismissed its foreclosure complaint, leaving only the Formaniks’ counterclaims for trial.
{¶23} The Formaniks’ counterclaims were tried to a magistrate. On September 28, 2012, the magistrate issued his decision, ruling against the Formaniks on their counterclaims. The magistrate found that (1) Third Federal had no obligation to extend, modify or replace the bridge loan, (2) the course of dealing between the parties did not create an implied contract that extended the term of, or otherwise modified, the note, (3) the terms of the note were controlling, (4) Formanik had waived any requirement that Third Federal demand payment or declare a default on the note and (5) Formanik had defaulted on the note when he failed to pay off the principal balance by the maturity date. The magistrate also found that, considering the totality of the circumstances, including that Third Federal had offered Formanik an extension of the loan and had made other
efforts to find a solution to the Formaniks’ inability to pay off the bridge loan, Third Federal had not acted in bad faith in accepting interest-only payments from the Formaniks for a period of time and was “entitled to enforce the original loan documents as written.” With respect to the Formaniks’ “mortgage flipping” claim, the magistrate concluded that Third Federal had not violated R.C. 1345.031(B)(12) because a new mortgage loan was never executed, and the magistrate found no legal authority to support a claim for wrongful foreclosure under Ohio law.
{¶24} On October 11, 2012, the Formaniks filed an “objection to magistrate’s decision/motion for leave to file supplemental objection.” Although titled an “objection,” the filing did not contain specific objections to any of the magistrate’s findings of fact or conclusions of law. Rather, defense counsel requested an extension of the deadline to file objections to the magistrate’s decision, asserting that he had not promptly received the magistrate’s decision and had “not yet had time to throughly review the decision” with the Formaniks. He further asserted that the Formaniks were awaiting the preparation of the trial transcript that they needed to “frame their objections.”
{¶25} In January 2013, the trial transcript was filed with the trial court and the Formaniks’ trial counsel filed a motion to withdraw. The trial court granted counsel’s motion to withdraw and granted the Formaniks leave until February 27, 2013, to file supplemental objections to the magistrate’s decision. The Formaniks did not timely file supplemental objections. On September 24, 2013, the trial court
magistrate’s decision and entered judgment in favor of Third Federal on the Formaniks’ counterclaims.
{¶26} On October 24, 2013, the Formaniks appealed the trial court’s judgment and filed a motion for relief from judgment under Civ.R. 60(B). In its Civ.R. 60(B) motion, the Formaniks requested that the trial court vacate its September 24, 2013 judgment, allow the Formaniks a reasonable period of time to file their objections to the magistrate’s decision and issue a final judgment after considering those objections. This court issued a limited remand for the trial court to consider the Formaniks’ Civ.R. 60(B) motion. On remand, the trial court denied the motion. This court then reversed the trial court’s denial of the Civ.R. 60(B) motion, vacated the judgment and remanded the matter for consideration of the Formaniks’ supplemental objections to the magistrate’s decision. Third Fed. S&L Assn. of Cleveland v. Formanik, 8th Dist. Cuyahoga Nos. 100562 and 100810, 2014-Ohio-3234 (“Formanik I”).
{¶27} After the case was remanded, the Formaniks filed supplemental objections, asserting that (1) Third Federal breached an implied contract created by the parties’ course of dealing; (2) the note’s waiver provisions did not apply because Third Federal’s actions “constituted an implied modification of the note”; (3) Third Federal’s reporting of “false delinquencies” prevented the Formaniks’ performance and, therefore, constituted a breach of the original note; (4) the magistrate erred in concluding that Third Federal’s conduct was reasonable and did not constitute bad faith; (5) the magistrate erred in finding that Third Federal did not violate R.C. 1345.031(B)(12); and (6) the magistrate
erred in failing to recognize a claim for “wrongful foreclosure” or “wrongful attempted foreclosure” under Ohio law.
{¶28} On September 25, 2015, the trial court overruled the Formaniks’ supplemental objections. Following an independent review of the record, the trial court determined that the parties’ course of conduct did not give rise to an implied contract. The trial court further found that because Third Federal could have reported the entire principal balance as being delinquent, “which would have had an even larger impact on the Formaniks’ attempts to refinance,” Third Federal’s reported “false delinquencies” relating to the interest-only payments rejected by Third Federal did not prevent the Formaniks from performing under the note. With respect to the Formaniks’ bad faith claim, the trial court noted that Third Federal had no obligation to accept interest-only payments after the maturity date, that “a lender’s decision to enforce its contract rights is not considered an act of bad faith” and that although Third Federal’s conduct in issuing interest only invoices and then refusing to accept interest only payments “isn’t an example of best practices,” it did not constitute “bad faith.” Finally, the trial court agreed with the magistrate’s determinations that because no replacement loan was made, Third Federal did not violate R.C. 1345.031(B)(12) and that Ohio law does not recognize an independent cause of action for wrongful foreclosure.
{¶29} The Formaniks appealed the trial court’s decision and we remanded the case to the trial court for an entry of final judgment. On July 29, 2016, the trial court issued a
final judgment in favor of Third Federal on the Formaniks’ counterclaims. The Formaniks have raised the following four assignments of error for review:
Assignment of Error I:
The trial court erred as a matter of law in finding that Third Federal did not
breach the original terms of its contract with the Formaniks, and also erred as a matter of law in finding that Third Federal did not breach the terms of the contract as modified by the parties’ course of performance, which consisted of Third Federal issuing invoices for interest-only payments, and the Formaniks’ payment on those invoices, for nearly two years after the expiration of the original maturity date. Assignment of Error II:
The trial court erred as a matter of law and fact when it found that Plaintiff-Appellee Third Federal’s conduct was reasonable and did not constitute “bad faith.”
Assignment of Error III:
The trial court erred as a matter of law in failing to find a violation of Ohio Consumer Sales Practices Act due to evidence of Third Federal’s practice of “mortgage flipping.”
Assignment of Error IV:
The trial court erred when it declined to recognize a claim for “wrongful foreclosure” or “wrongful attempted foreclosure.”
Law and Analysis
Standard of Review
{¶30} The standard of review on appeal from a decision of a trial court adopting a magistrate’s decision is whether the trial court abused its discretion. Agnew v. Muhammad, 8th Dist. Cuyahoga No. 100599, 2014-Ohio-3419, ¶ 15, citing Butcher v. Butcher, 8th Dist. Cuyahoga No. 95758, 2011-Ohio-2550, ¶ 7. Under an abuse of discretion standard, the trial court’s decision will be reversed only if it is unreasonable,
arbitrary or unconscionable. Blakemore v. Blakemore, 5 Ohio St.3d 217, 219, 450 N.E.2d 1140 (1983). “‘A decision is unreasonable if there is no sound reasoning process that would support that decision.’” Ockunzzi v. Smith, 8th Dist. Cuyahoga No. 102347, 2015-Ohio-2708, ¶ 9, quoting AAAA Ents. Inc. v. River Place Community Urban Redevelopment Corp., 50 Ohio St.3d 157, 161, 553 N.E.2d 597 (1990). An abuse of discretion may also be found where the trial court “‘applies the wrong legal standard, misapplies the correct legal standard, or relies on clearly erroneous findings of fact.’” Ockunzzi at ¶ 9, quoting Thomas v. Cleveland, 176 Ohio App.3d 401, 2008-Ohio-1720, 892 N.E.2d 454, ¶ 15 (8th Dist.).
Breach of Contract
{¶31} In their first assignment of error, the Formaniks argue that the parties’ course of conduct created a new implied contract that modified the terms of the original note, pursuant to which Third Federal agreed to accept interest-only payments and not collect on the principal balance due until the Formaniks sold the Middleburg Heights property. They further argue that Third Federal breached that implied contract when it refused to accept Formanik’s interest-only payments, reported delinquencies on his account to credit reporting agencies and initiated foreclosure proceedings and that the trial court “erred as a matter of law” in concluding otherwise. We disagree.
{¶32} As this court stated in Formanik I, “[a] contract can be modified when there is clear and convincing evidence of the parties’ mutual intent to modify the contract through their course of dealing.” Formanik I, 2014-Ohio-3234, at ¶ 13, citing Westgate
Ford Truck Sales, Inc. v. Ford Motor Co., 2012-Ohio-1942, 971 N.E.2d 967, ¶ 24-25 (8th Dist.); see also RotoSolutions, Inc. v. Crane Plastics Siding, L.L.C., 10th Dist.
or have breached that obligation and acted in bad faith is a question of fact. Littlejohn at ¶ 28. {¶46} The covenant of good faith and fair dealing is part of a contract claim. A breach of the covenant of good faith and fair dealing “does not stand alone as a separate claim from breach of contract.” Stancik v. Deutsche Natl. Bank, 8th Dist. Cuyahoga No. 102019, 2015-Ohio-2517, ¶ 46 (“Outside of the insurance context * * * the breach of this duty does not exist as a separate cause of action from a breach of contract claim.”); see also Pappas v. Ippolito, 177 Ohio App.3d 625, 2008-Ohio-3976, 895 N.E.2d 610, ¶ 57 (8th Dist.) (“‘Parties to a contract are bound toward one another by standards of good faith and fair dealing. However, this does not stand for the proposition that breach of good faith exists as a separate claim. Instead, good faith is part of a contract claim and does not stand alone.’”), quoting Dawson v. Blockbuster, Inc., 8th Dist. Cuyahoga No. 86451, 2006-Ohio-1240, ¶ 35; Gianetti v. Teakwood, Ltd., 10th Dist. Franklin No. 15AP-413, 2016-Ohio-213, ¶ 35 (“‘[A] claim for breach of contract subsumes the accompanying claim for breach of the duty of good faith and fair dealing.’”), quoting Krukrubo v. Fifth Third Bank, 10th Dist. Franklin No. 07AP-270, 2007-Ohio-7007, ¶ 19. {¶47} On these facts, for the same reasons the Formaniks failed to establish that Third Federal breached its contract with Formanik by allegedly precluding his performance under the note, they also failed to establish a breach of the duty of good faith and fair dealing. See, e.g., Ed Schory & Sons, 75 Ohio St.3d at 443-444, 662 N.E.2d 1074 (bank’s decision to enforce parties’ agreements as written and not lend additional funds to developer could not be considered an act of bad faith; “‘[a]lthough courts often refer to the obligation of good faith that exists in every contractual relation, * * * this is not an invitation to the court to decide whether one party ought to have exercised privileges expressly reserved in the document’”), quoting Kham & Nate’s Shoes, 908 F.2d at 1357. {¶48} Accordingly, the Formaniks’ second assignment of error is overruled.11“‘Good faith performance or enforcement of a contract emphasizes faithfulness to an agreed common purpose and consistency with the justified expectations of the other party.’ * * * [B]ad faith may consist of inaction, or may be the ‘abuse of a power to specify terms, [or] interference with or failure to cooperate in the other party’s performance.’” Littlejohn v. Parrish, 163 Ohio App.3d 456, 2005-Ohio-4850, 839 N.E.2d 49, ¶ 26, quoting Restatement of the Law 2d, Contracts, Section 205, Comments a and d (1981). Whether parties have acted in good faith and have “deal[t]” fairly and “reasonably with each other”
circumstances, including the terms of both the new and refinanced loans, the cost of the new loan, and the consumer’s circumstances. This provision applies regardless of whether the interest rate, points, fees, and charges paid or payable by the consumer in connection with the refinancing exceed any thresholds specified in any section of the Revised Code. (Emphasis added.) {¶51} The trial court found that Third Federal did not violateKnowingly or intentionally engaging in the act or practice of “flipping” a mortgage loan. “Flipping” a mortgage loan is making a mortgage loan that refinances an existing mortgage loan when the new loan does not have reasonable, tangible net benefit to the consumer considering all of the