JPMorgan Chase Bank v. Wanke , 2014 Ohio 444 ( 2014 )


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  • [Cite as JPMorgan Chase Bank v. Wanke, 2014-Ohio-444.]
    IN THE COURT OF APPEALS
    TWELFTH APPELLATE DISTRICT OF OHIO
    BUTLER COUNTY
    JPMORGAN CHASE BANK,                                :
    Plaintiff-Appellee,                          :    CASE NO. CA2013-06-102
    :         OPINION
    - vs -                                                      2/10/2014
    :
    ELIZABETH WANKE, et al.,                            :
    Defendants-Appellants.                       :
    CIVIL APPEAL FROM BUTLER COUNTY COURT OF COMMON PLEAS
    Case No. CV2012-10-3777
    Brickler & Eckler LLP, Anne Marie Sferra, Nelson M. Reid, 100 South Third Street,
    Columbus, Ohio 43215, for plaintiff-appellee
    James E. Kolenich, 9435 Waterstone Blvd., Cincinnati, Ohio 45249, for defendants-
    appellants
    HENDRICKSON, P.J.
    {¶ 1} Defendants-appellants, Elizabeth Wanke and William Wanke, appeal from a
    decision of the Butler County Court of Common Pleas granting summary judgment in favor of
    plaintiff-appellee, JPMorgan Chase Bank, N.A. For the reasons detailed below, we affirm the
    decision of the trial court.
    {¶ 2} On October 11, 2007, Elizabeth Wanke executed a promissory note in favor of
    Butler CA2013-06-102
    JPMorgan in the principal amount of $183,000, with interest of 6.5 percent per annum to
    purchase a home located at 7947 Kennesaw Drive in West Chester, Ohio. The note called
    for monthly payments for a period of 30 years. Appellants executed a mortgage that secured
    the note and encumbered the property.
    {¶ 3} JPMorgan filed a complaint in foreclosure against appellants on July 15, 2011
    due to appellants' failure to make the required payments. That action was subsequently
    dismissed without prejudice on June 14, 2012.
    {¶ 4} On October 15, 2012, JPMorgan commenced the present action regarding the
    same promissory note, mortgage, and property that were involved in the original action. On
    November 19, 2012, appellants removed the case to the U.S. District Court for the Southern
    District of Ohio. However, the case was subsequently remanded to the Butler County Court
    of Common Pleas on January 25, 2013.
    {¶ 5} On March 28, 2013, JPMorgan filed a motion for summary judgment. In
    response, appellants filed a "motion for enlargement of time Civ.R. 56(F) with affidavits
    attached." Appellants' motion stated that additional discovery time was necessary to depose
    certain JPMorgan employees on the issue of "collateral source payments." Essentially,
    appellants argued that JPMorgan was not legally entitled to foreclose on their property
    because JPMorgan received "bailout money" through the federal government's Troubled
    Asset Relief Program. Therefore, appellants maintained that additional discovery time was
    necessary because "if the Plaintiff was 'bailed out' by taxpayers due to mortgage defaults like
    the one at issue here then it would violate equity in Ohio for them to be permitted the 'double
    recovery' of also being permitted to seize the collateral for a loan that had already been paid."
    {¶ 6} On May 31, 2013, the trial court denied appellants' motion for additional
    discovery time under Civ.R. 56(F) and granted JPMorgan's motion for summary judgment.
    Appellants now appeal the trial court's decision, raising one assignment of error:
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    Butler CA2013-06-102
    {¶ 7} THE COURT ERRED TO THE PREJUDICE OF THE DEFENDANT BY
    DENYING DEFENDANTS [sic] R. 56(F) MOTION AND GRANTING SUMMARY JUDGMENT
    TO THE PLAINTIFF.
    {¶ 8} In their sole assignment of error, appellants argue the trial court erred in
    denying their request for additional discovery time under Civ.R. 56(F) and granting summary
    judgment in favor of JPMorgan. Appellants posit that JPMorgan cannot foreclose on their
    property because JPMorgan received TARP "bailout money" from the federal government. In
    essence, appellants believe that the federal TARP money received by JPMorgan should be
    applied to offset the amount due on their promissory note.         Appellants argue that, if
    JPMorgan is permitted to foreclose on the property, JPMorgan would "double recover"
    because JPMorgan would be in receipt of both the foreclosed property and the federal TARP
    money. In other words, appellants contend that JPMorgan cannot foreclose on their property
    because JPMorgan did not suffer any damages as a result of the default on the promissory
    note at issue in the present case. Therefore, appellants maintain that additional discovery
    time pursuant to Civ.R. 56(F) was necessary in order to depose bank employees on the issue
    of damages.
    {¶ 9} We will first address whether the trial court erred in overruling appellants'
    motion for additional discovery time under Civ.R. 56(F). Pursuant to Civ.R. 56(F):
    Should it appear from the affidavits of a party opposing the
    motion for summary judgment that the party cannot for sufficient
    reasons stated present by affidavit facts essential to justify the
    party's opposition, the court may refuse the application for
    judgment or may order a continuance to permit affidavits to be
    obtained or discovery to be had or may make such other order
    as is just.
    Accordingly, "Civ.R. 56(F) 'affords a party a mechanism whereby it can seek deferral of
    action on a motion for summary judgment so that it may obtain affidavits opposing the motion
    or conduct discovery related to it.'" BAC Home Loans Servicing, L.P. v. Kolenich, 194 Ohio
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    Butler CA2013-06-102
    App.3d 777, 2011-Ohio-3345, ¶ 18 (12th Dist.), quoting Gates Mills Invest. Co. v. Pepper
    Pike, 
    59 Ohio App. 2d 155
    , 168-169 (8th Dist.1978); Fifth Third Mtge. Co. v. Bell, 12th Dist.
    Madison No. CA2013-02-003, 2013-Ohio-3678, ¶ 17. A party seeking a continuance to
    conduct discovery under Civ.R. 56(F) must support the motion by a proper affidavit. Kolenich
    at ¶ 18. "General averments requesting a continuance for the purpose of discovery are
    insufficient as the party must state a factual basis and reasons why the party cannot present
    sufficient documentary evidence without a continuance." Bell at ¶ 42.
    {¶ 10} A trial court maintains discretion to manage the discovery process. Bank of
    Am., N.A. v. Singh, 12th Dist. Butler No. CA2012-07-146, 2013-Ohio-1305, ¶ 17. On appeal,
    a decision regarding the regulation of discovery will not be reversed absent an abuse of
    discretion. Id.; Bell at ¶ 43. An abuse of discretion constitutes more than an error of law or
    judgment; it requires a finding that the trial court acted unreasonably, arbitrarily, or
    unconscionably. Blakemore v. Blakemore, 
    5 Ohio St. 3d 217
    , 219 (1983).
    {¶ 11} In support of their motion for additional discovery time under Civ.R. 56(F),
    appellants attached their sworn affidavits, which requested additional discovery time in order
    to depose certain witnesses. Appellants testified "[t]he purpose of [those] deposition[s] would
    be to obtain admissible evidence that [JPMorgan] has not suffered any damages due to my
    alleged default or at least that [JPMorgan's] damages are less than [JPMorgan] request[ed]
    in their Complaint." No additional reasons for additional discovery time were provided in
    appellants' affidavits, except to acknowledge, "[i]f I am not permitted to conduct this discovery
    I will have no other way to provide this Court with the facts necessary to justify my opposition
    to summary judgment."
    {¶ 12} Based on our review of the record, we find the trial court did not abuse its
    discretion in denying appellants' Civ.R. 56(F) motion. Appellants had a sufficient opportunity
    in both state and federal court to conduct discovery. Singh at ¶ 18 (The Ohio Rules of Civil
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    Butler CA2013-06-102
    Procedure "allow parties to conduct discovery after commencement of the action."). The
    original foreclosure action in this lawsuit was commenced on July 15, 2011. Although the
    trial court lacked the ability to order any discovery during the five-month period before the
    case was voluntarily dismissed, appellants still had more than 14 months to conduct relevant
    discovery before JPMorgan filed its motion for summary judgment at issue in this case.
    Wells Fargo Bank, N.A. v. Washington, 12th Dist. Butler No. CA2011-11-211, 2013-Ohio-
    773, ¶ 11 (holding that a trial court is divested of jurisdiction following a voluntary dismissal of
    a complaint).
    {¶ 13} Moreover, appellants' suggestion that JPMorgan cannot foreclose on their
    property because of "collateral source payments," such as TARP bailout money is without
    merit. See Sipple v. A.G. Edwards & Sons, Inc., 1st Dist. Hamilton No. C-10701, 2002-Ohio-
    4342, ¶ 7 (a trial court does not abuse its discretion in denying a Civ.R. 56(F) motion "if
    discovery proceedings would not have aided in establishing or negating the facts material to
    the claims"). Appellants have failed to provide any support for the contention that "collateral
    source payments," such as the TARP bailout money, precludes a creditor from bringing an
    action in foreclosure. In fact, this court has previously considered and rejected identical
    arguments raised on this issue. Kolenich, 2011-Ohio-3345 at ¶ 22-25; BAC Home Loans
    Servicing, L.P. v. Kolenich, 12th Dist. Butler No. CA2012-01-001, 2012-Ohio-5006, at ¶ 40.
    {¶ 14} In conclusion, appellants had ample opportunity to conduct discovery during
    this lengthy foreclosure action and additional time for discovery on the issue of "collateral
    source payments" would not have aided in establishing or negating any material fact involved
    in the litigation. Because appellants did not provide any other specific reason to justify their
    motion for additional discovery time under Civ.R. 56(F), we find the trial court did not abuse
    its discretion in denying appellants' motion.
    {¶ 15} Since we find the trial court did not err when it denied appellants' motion for
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    Butler CA2013-06-102
    additional discovery time, we now address whether the trial court properly granted
    JPMorgan's motion for summary judgment. Summary judgment is a procedural device used
    to terminate litigation and avoid a formal trial where there are no issues in a case to try.
    Simmons v. Yingling, 12th Dist. Warren No. CA2010-11-117, 2011-Ohio-4041, ¶ 19. An
    appellate court's review of a summary judgment decision is de novo. Grafton v. Ohio Edison
    Co., 
    77 Ohio St. 3d 102
    , 105 (1996).
    {¶ 16} Pursuant to Civ. R. 56, summary judgment is appropriate when "(1) there is no
    genuine issue of material fact, (2) the moving party is entitled to judgment as a matter of law,
    and (3) reasonable minds can come to but one conclusion and that conclusion is adverse to
    the nonmoving party, said party being entitled to have the evidence construed most strongly
    in his favor." Whitaker v. Advantage RN, L.L.C., 12th Dist. Butler No. CA2012-04-082, 2012-
    Ohio-5959, ¶ 16, quoting Zivich v. Mentor Soccer Club, Inc., 
    82 Ohio St. 3d 367
    , 368 (1998).
    The party moving for summary judgment has the initial burden of demonstrating no genuine
    issue of material fact exists. Dresher v. Burt, 
    75 Ohio St. 3d 280
    , 292-293 (1996). "The
    nonmoving party must then rebut the moving party's evidence with specific facts showing the
    existence of a genuine triable issue; it may not rest on the mere allegations or denials in its
    pleadings." Deutsche Bank Natl. Trust Co. v. Sexton, 12th Dist. Butler No. CA2009-11-288,
    2010-Ohio-4802, ¶ 7.
    {¶ 17} "A party seeking to foreclose on a mortgage must establish execution and
    delivery of the note and mortgage; valid recording of the mortgage; it is the current holder of
    the note and mortgage; default; and the amount owed." Kolenich , 2011-Ohio-3345 at ¶ 10,
    quoting Countrywide Home Loans, Inc. v. Baker, 10th Dist. Franklin No. 09AP-968, 2010-
    Ohio-1329, ¶ 8.
    {¶ 18} In support of its motion for summary judgment, JPMorgan attached the affidavit
    of Richard Eubanks, a vice president of JPMorgan. Eubanks averred that JPMorgan was in
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    possession of the note, the note was secured by a mortgage on appellants' property, and the
    note was in default due to nonpayment. Eubanks also testified as to the total amount due
    and owing on the promissory note. A copy of the executed note and mortgage were attached
    to the affidavit. Appellants never denied that JPMorgan holds the note which is in default or
    that JPMorgan holds the mortgage on their property.                          Those pertinent facts appear
    undisputed in light of appellants' Civ.R. 56(F) motion, in which appellants acknowledged
    "[t]his case is unusual among modern foreclosure cases in that it does not present issues of
    the assignment date of the mortgage (Schwartzwald/jurisdiction issues)1 or of Plaintiff's ability
    or right to enforce the note (UCC issues)."2 Rather, appellants' sole basis for contesting the
    trial court's decision was based on the allegation that JPMorgan received "collateral source
    payments" through the receipt of TARP bailout money.
    {¶ 19} Because appellants challenged the grant of summary judgment in favor of
    JPMorgan solely on the ground that they were unreasonably denied the opportunity to
    conduct discovery on the issue of "collateral source payments," we likewise find the trial court
    did not err in granting summary judgment in favor of JPMorgan on its foreclosure complaint.
    JPMorgan presented uncontested evidence that appellants had defaulted on the promissory
    note and JPMorgan had standing to foreclose on the property. Based on the evidence
    presented, appellants failed to demonstrate a genuine issue of material fact to survive
    summary judgment in the present action.                     Accordingly, we overrule appellants' sole
    assignment of error.
    {¶ 20} Judgment affirmed.
    S. POWELL and RINGLAND, JJ., concur.
    1. The Ohio Supreme Court in Fed. Home Loan Mortg. Corp. v. Schwartzwald, 134 Ohio St.3d, 2012-Ohio-5017,
    ¶ 24-25, determined that a plaintiff in a foreclosure action must have standing at the time the complaint is filed in
    order to invoke the jurisdiction of the common pleas court.
    2. Ohio's version of the Uniform Commercial Code (U.C.C.) governs who may enforce a promissory note like the
    one at issue in the present case. R.C. 1301.01 et seq.; Bell, 2013-Ohio-3678 at ¶ 20.
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Document Info

Docket Number: CA2013-06-102

Citation Numbers: 2014 Ohio 444

Judges: Hendrickson

Filed Date: 2/10/2014

Precedential Status: Precedential

Modified Date: 10/30/2014