UBS Real Estate Securities, Inc. v. TeagueUBS Real Estate Securities, Inc. v. Teague
{¶ 1} Rаymond and Lacosta Teague appeal from a judgment of the Darke County Court of Common Pleas, which denied their
I
{¶ 2} In May 2005, the Teagues borrowed $131,000 from Wells Fargo Bank, N.A., and secured payment of the note with a mortgage on the real property located at 3453 Brock Cosmos Road in Rossburg, Ohio. In 2007, the Teagues filed a petition for bankruptcy under Chapter 7 of the United States Bankruptcy Code; the parties agree that as of result of the bankruptcy case, the Teagues are
{¶ 3} On October 7, 2009, UBS Real Estate Securities, Inc., filed a comрlaint in foreclosure against the Teagues. UBS alleged that it was the holder of the note and mortgage, that the Teagues had defaulted on their mortgage loan as of May 1, 2009, and that $125,769.21 remained due and owing with interest at the rate of 7.375 percent. On October 16, 2009, Wells Fargo executed an assignment of mortgage, assigning the Teagues’ note and mortgage to UBS. Thе Teagues filed an answer to UBS’s complaint, which consisted of a general denial and nine affirmative defenses.
{¶ 4} On January 5, 2010, UBS moved for summary judgment on its claim. It supported its motion with an affidavit from Herman John Kennerty, Vice President of Loan Documentation for Wells Fargo, acting as servicing agent for UBS. Kennerty authenticated copies of the note аnd the mortgage, the assignment of mortgage, and a printout of the payment history for the Teagues’ loan. (The loan history appears to reflect the payment history from May 17, 2005, to December 31, 2007.) Kennerty stated that the account is due for the June 1, 2009 payment and all subsequent payments, that UBS has elected to accelerate the entire balance due, and that there was a principal balance of $125,769.21, with interest from May 1, 2009, at 7.375 percent plus advances for taxes, insurance, and other necessary expenses. Xee Moua, another Vice President of Loan Documentation for Wells Fargo, also submitted an affidavit attesting to the balance due and indicating that neither of the Teagues is in the military service, as defined by the Servicemembers’ Civil Relief Act of 2003.
{¶ 5} The Teagues did not respond to UBS’s motion for summary judgment.
{¶ 6} On February 3, 2010, the trial court granted UBS’s summary-judgment motion. The court found that the Teagues were in default of the loan in the amount of $125,769.21 plus interest, but were immune from personal liability on the note. The court found that the note was secured by а mortgage and that UBS was entitled to have the equity of redemption foreclosed. The court ordered that the property be sold at a sheriffs sale and the proceeds distributed.
{¶ 7} On February 22, 2010, the Teagues filed a “Motion for Relief from and Motion to Vacate Summary Judgment,” seeking relief from the summary judgment pursuant to
{¶ 8} The Teagues further argued that UBS should not have been granted summary judgment. They clаimed that UBS’s evidence in support of its motion did not establish “the status of mortgage payments, cost, fees and other charges from, at the very least, alleged default to the present.” They also asserted that UBS failed to establish that it had sent a notice of default/acceleration, as required by section 22 of the mortgage, prior to commеncing the foreclosure action. The Teagues attached a printout of the page of the mortgage containing section 22.
{¶ 9} UBS opposed the
{¶ 10} The trial court denied the Teagues’
{¶ 11} “At this time, to reverse the Plaintiffs judgment, the Court must be convinced that there is a meritorious defense or [a] failure of notice of the pending motion. Neither a defense nor procedural defect occurred — as Plaintiffs counsel has noted. While the Defendants’ past attempts at loss mitigation are admirable, and should be continued, such attempts are always at the pleasure of the lender. The Court finds that the Plaintiff is entitled to continue with its foreclosure.”
{¶ 12} The Teagues appeal from the trial court’s denial of their motion for relief from judgment, raising two assignments of error. We will address them in reverse order.
{¶ 13} The Teagues’ second assignment of error states:
{¶ 14} “The trial court erred to the рrejudice of the appellants by granting summary judgment in favor of appellee bank.”
{¶ 15} In this assignment of error, the Teagues claim that the trial court erred in granting UBS’s motion for summary judgment. They argue (as they did in their motion for relief from and to vacate summary judgment) that UBS’s affidavits and evidence of their payment history were inadequate to establish that the Teagues’ mоrtgage was in default. The Teagues also claim that summary judgment was improper because UBS failed to demonstrate that it had satisfied the mortgage’s notice-of-default/acceleration requirement.
{¶ 16} The Teagues did not appeal the trial court’s judgment and decree of foreclosure. Instead, they sought relief from that judgment pursuant to
{¶ 17} The second assignment of error is overruled.
Ill
{¶ 18} The Teagues’ first assignment of error states:
{¶ 19} “The trial court erred to the prejudice of appellants by denying appellants’ motion for relief from and motion to vacate summary judgment.”
{¶ 20} “
{¶ 21} We review the trial court’s determination of a
{¶ 22} Beginning with timeliness, the Teagues filed their
{¶ 23} Second, the Teagues were required to demonstrate a meritorious defense under
{¶ 24} In their
{¶ 25} The Teagues’ answer designated nine affirmative defenses, including that UBS “is not entitled to judgment for failure to satisfy all conditions
{¶ 26} In responding to the Teagues’
{¶ 27} Finally, the Teagues were required to establish that they were entitled to relief under one of the grounds stated in
{¶ 28} The phrase “excusable neglect” in
{¶ 29}
{¶ 30} The Teagues asserted that they failed to respond to UBS’s motion for summary judgment because their counsel never received a copy of UBS’s summary-judgment motion. Addressing the trial court’s statement regarding counsel’s presumed “lack of familiarity” with the ten-day response deadline, counsel states: “Appellants could not respond within any period as neither they nor their counsel received a copy of the Motion for Summary Judgment.”
{¶ 31} The failure to respond to a motion for summary judgment due to lack of notice may satisfy the excusable-neglect standard, depending on the facts and circumstances. For example, in Am. Express Travel Related Servs., Inc. v. Carleton, Franklin App. No. 02AP-1400,
{¶ 32} In contrast, the Eighth District found that the plaintiffs’ claim that they did not receive a copy of defendants’ motion for summary judgment did not constitute excusable neglect. Garrett v. Gortz, Cuyahoga App. No. 90625,
{¶ 33} In this case, the trial court found that no “procedural defect” occurred. In so finding, the trial court apparently accepted UBS’s argument thаt the Teagues’ counsel was properly served with the motion for summary judgment. This conclusion was supported by the certificate of service on the motion for summary judgment, which indicated that defense counsel was served on December 31, 2009, at the address listed on his own filings. (As stated above, in opposing the
{¶ 34} With respect to the grounds for relief, the movant must present sufficient operative facts from which the court may make a finding on whether the neglect was excusable. Rose Chevrolet, Inc. v. Adams (1988),
{¶ 35} If the movant fails to allege operative facts, the trial court may deny the motion without a hearing. Conversely, if grounds for rеlief under
{¶ 37} In summary, timeliness wаs not an issue. For the meritorious-defense requirement, with the record before us, the Teagues’ allegation of such a defense (as articulated in the affirmative-defense portion of their answer) was sufficient. And for the
{¶ 38} The Teagues’ first assignment of error is sustained.
IV
{¶ 39} The trial court’s judgment is reversed, аnd the matter is remanded for further proceedings.
Judgment reversed and cause remanded.
Notes
. The Teagues’ other affirmative defenses were that (1) UBS failed to state a claim upon which relief may be granted, (2) UBS had no standing and/or was not the real party in interest, (3) the complaint was barred by waiver, release, and/or estoppels, (4) thе complaint was barred by UBS's failure to mitigate damages, (5) the complaint was barred because UBS failed to join necessary parties, (6) UBS had breached the agreement with the Teagues, (7) the complaint was barred by a failure and/or want of consideration or was otherwise unenforceable, unconscionable, or invalid, and (8) the Teagues had made payments, contrary to UBS’s allegations.
. This is opposed to the necessity, discussed infra, that a movant demonstrate that a ground for relief exists under
. In so holding, the court noted that the circumstances were distinguishable from instances when the parties failed to receive notice of a complaint. Id. at ¶ 16, fn. 2.
. In contrast, the trial court need not make any findings about the viability of a proffered meritorious defense, as discussed above.