Ohio Appeals Court: Failure To Assert That Notice Of Acceleration Was Sent To Homeowner Sinks F'closure; Another Lower Court Ruling Suffers Reversal

The failure of a foreclosing lender to present any evidence of a written notice of acceleration having been sent to a homeowner was sufficient to sink another foreclosure judgment, according to a recent ruling by an Ohio appeals court.(1)

A second aspect of this ruling that may be of interest to those avid fans of the Ohio Rules of Civil Procedure is that the attorney for the foreclosing lender was successful in improperly introducing evidence in obtaining its foreclosure judgment. In allowing the foreclosing lender's attorney to get away with it, the appeals court apparently had its hands tied by existing case law, noting that the homeowner had not properly objected to the improper introduction of the materials in the lower court proceeding. Because the appeals court booted the foreclosure judgment on other grounds, the homeowner will now get a renewed opportunity to object to the improper evidence.(2)

Another aspect of the court's ruling that may be of interest is that an "official" for the lender who signed a mortgage assignment and an affidavit filed in the case may have been a multiple corporate hat-wearing robosigner. The homeowner had correctly observed that, within about a month, the "official" signed an assignment of the mortgage at issue as a vice president of MERS, and then he signed the affidavit in question as a vice president of CitiMortgage. Because their was no evidence on the record before the appellate court actually contradicting the official's Citimortgage affiliation at the time of the signing of the affidavit, it had no choice but to accept the affidavit.(3)

For the ruling, see CitiMortgage, Inc. v. Elia, 2011-Ohio-2499 (Ohio App. 9th Dist. Summit County, May 25, 2011).

See Florida Appellate Courts Continue The Clean-Up; Another Lower Court Error In Rubber-Stamped Foreclosure Case Caught, Booted Back, where a Florida lower court ruling also recently suffered reversal involving a homeowner's claim that a notice of acceleration was not properly sent by the foreclosing entity.

Thanks to Ohio FRAUDClosure for the heads-up on the story.

(1) In this regard, the court observed (bold text is my emphasis):

• {¶15} The only statement in Menne’s affidavit that even hints at CitiMortgage having complied with the notice provisions of their mortgage is Menne’s statement that CitiMortgage “has elected to call the entire balance of said account due and payable, in accordance with the terms of the note and mortgage.” CitiMortgage did not present any evidence of written notice actually having been sent to the Elias. Compare GMAC Mtge., L.L.C. v. Jacobs, 9th Dist. No. 24984, 2011-Ohio-1780, at ¶16-18 (upholding summary judgment award to bank where bank’s affidavit provided that “written notice of default was given in accordance with the terms of the note and mortgage”).
  
  Moreover, CitiMortage did not file any response or reply, much less any additional evidence, when the Elias directly challenged the notice deficiency in their own affidavits in support of their memorandum in opposition/cross-motion for summary judgment. Compare Ly at ¶22 (concluding that bank rebutted debtor’s assertion that bank failed to send notice of default/acceleration where bank filed supplemental affidavit, incorporating letters of notice sent to the debtor).
  
  On appeal, CitiMortgage’s response to the Elias’ notice challenge is that it would be “a waste of [] judicial resources” for this Court to remand this matter because the Elias clearly know they defaulted and CitiMortgage would simply re-file its motion, adding language that notice was provided. Had CitiMortgage filed proper materials in the first instance, however, far more judicial resources might have been saved. The plain language of the mortgage clearly requires that the Elias be given notice “prior to acceleration.” It was CitiMortgage’s burden to prove that the notice was given. Under these circumstances, we cannot conclude that CitiMortgage met its initial Dresher burden and showed that it complied with paragraph 22 of the mortgage note. Accord Kelly at ¶14.

(2) In this regard, the court observed (bold text is my emphasis):

• {¶9} Civ.R. 56(C) limits the types of evidentiary materials that a party may present when seeking or defending against summary judgment. Civ.R. 56(C) (limiting summary judgment evidence to “pleadings, depositions, answers to interrogatories, written admissions, affidavits, transcripts of evidence, and written stipulations of fact”). “The proper procedure for introducing evidentiary matter not specifically authorized by Civ.R. 56(C) is to incorporate it by reference in a properly framed affidavit pursuant to Civ.R. 56(E).” Skidmore & Assoc. Co., L.P.A. v. Southerland (1993), 89 Ohio App.3d 177, 179. “[P]apers referred to in an affidavit ‘shall be attached to or served with the affidavit.’” GMAC Mtge., L.L.C. v. Jacobs, 9th Dist. No. 24984, 2011-Ohio-1780, at ¶17, quoting Civ.R. 56(E).
  
  Even so, it is the opposing party’s duty to object when a summary judgment motion relies upon improperly introduced materials. Id. “[I]f the opposing party fails to object to improperly introduced evidentiary materials, the trial court may, in its sound discretion, consider those materials in ruling on the summary judgment motion.” Wolford v. Sanchez, 9th Dist. No. 05CA008674, 2005-Ohio-6992, at ¶20, quoting Christe v. GMS Mgt. Co., Inc. (1997), 124 Ohio App.3d 84, 90.
  
  {¶10} The Elias did not object to CitiMortgage’s summary judgment motion on the basis that it referred to improper Civ.R. 56(C) materials, which were not incorporated by reference in Menne’s affidavit. Further, they did not object to Menne’s affidavit on the basis that it lacked any attachments. See Civ.R. 56(E).
  
  The Elias only challenged the affidavit on the grounds that: (1) Menne lacked personal knowledge to attest to the statements contained therein; and (2) it did not show that CitiMortgage complied with paragraph 22 of the mortgage before pursuing the remedy of foreclosure. Compare U.S. Bank, N.A. v. Richards, 9th Dist. No. 25052, 2010-Ohio-3981, at ¶19. Thus, we limit our review to those issues. See Wolford at ¶20 (holding that trial court may disregard defects in Civ.R. 56 materials if the opposing party fails to object to the defects).

(3) In this regard, the court observed (bold text is my emphasis):

• {¶12} [W]e are troubled by the fact that CitiMortgage opted not to respond, either in the court below or on appeal, to the Elias’ argument that Menne’s affiliation with the bank is questionable.
  
  Specifically, the Elias correctly observed that, on February 2, 2009, Menne signed an assignment of the mortgage at issue as a vice president of MERS and, on March 3, 2009, he signed the affidavit in question as a vice president of CitiMortgage.
  
  Without any additional evidence in the record before us that actually contradicts Menne’s assertion that he was a vice president of CitiMortgage at the time he signed an affidavit on its behalf, however, we cannot reject his averment on the basis of the Elias’ unsupported observation. The Elias’ argument that Menne’s affidavit is deficient because it is not based on personal knowledge lacks merit.