OneWest Bank, FSB v. Albert , 2014 Ohio 2158 ( 2014 )

[Cite as OneWest Bank, FSB v. Albert, 2014-Ohio-2158.]
COURT OF APPEALS
STARK COUNTY, OHIO
FIFTH APPELLATE DISTRICT
ONEWEST BANK, FSB : JUDGES:
:
: Hon. W. Scott Gwin, P.J.
Plaintiff-Appellee : Hon. Sheila G. Farmer, J.
: Hon. Patricia A. Delaney, J.
-vs- :
: Case No. 2013CA00180
:
DIANA L. ALBERT :
:
:
Defendant-Appellant : OPINION
CHARACTER OF PROCEEDING: Appeal from the Stark County Court of
Common Pleas, General Division Case
No. 2011CV03450
JUDGMENT: AFFIRMED
DATE OF JUDGMENT ENTRY: May 12, 2014
APPEARANCES:
For Plaintiff-Appellee: For Defendant-Appellant:
MONICA LEVINE LACKS MARK E. OWENS
DUSTIN D. GODENSWAGER J.P. AMOURGIS & ASSOCIATES
MCGLINCHEY STAFFORD LLC 3200 W. Market St., Suite 106
25550 Chagrin Blvd., Suite 406 Akron, OH 44333
Cleveland, OH 44122
Stark County, Case No. 2013CA00180 2
Delaney, J.
{¶1} Defendant-Appellant Diana L. Albert appeals the August 6, 2013 judgment
entry of the Stark County Court of Common Pleas, General Division. Plaintiff-Appellee is
OneWest Bank, FSB.
FACTS AND PROCEDURAL HISTORY
{¶2} On June 26, 2006, Defendant-Appellant Diana L. Albert executed a Note
in the amount of $84,000.00. The Note was secured by a Mortgage on real property
located at 2512 - 12th Street N.W., Canton, Ohio 44708. The lender was Quicken
Loans, Inc.
{¶3} Quicken Loans, Inc. endorsed the Note to IndyMac Bank, F.S.B. IndyMac
Bank F.S.B. endorsed the Note in blank. IndyMac is a division of OneWest Bank. On
October 14, 2011, Mortgage Electronic Registrations Systems, Inc., as nominee for
Quicken Loans, Inc. assigned the Mortgage to Plaintiff-Appellee OneWest Bank, FSB.
OneWest Bank is in possession of the Note and Mortgage.
{¶4} On October 27, 2011, OneWest Bank filed a complaint in foreclosure
against Albert. The complaint alleged Albert was in default of the terms of the Note and
Mortgage. OneWest Bank attempted to serve the complaint on Albert at the 12th Street
property address listed in the Note and Mortgage. OneWest Bank failed to obtain
service on Albert at the 12th Street address. On December 28, 2011, OneWest Bank
completed service on Albert at an address located at 51st Street, Canton, Ohio.
{¶5} Albert filed a motion for leave to plead on January 19, 2012 and her
answer was filed on February 10, 2012. Relevant to this appeal, Albert raised as an
affirmative defense in her answer that OneWest Bank “failed to give the proper and
Stark County, Case No. 2013CA00180 3
requisite notices to Defendant pursuant to RESPA and the terms of the Note and
Mortgage.”
{¶6} On June 15, 2012, the case was placed on an automatic bankruptcy stay.
The case was returned to the active docket on November 15, 2012.
{¶7} OneWest Bank filed a motion for summary judgment on November 13,
2012. In support of its motion for summary judgment, OneWest Bank submitted the
affidavit of Lisa Marie Gonzalez, assistant secretary for OneWest Bank. She averred
that she had personal knowledge of the file and loan history of Albert’s Note and
Mortgage held and serviced by OneWest Bank. Gonzalez stated that on August 31,
2011, One West Bank provided Albert with written notice of default and informed her of
OneWest Bank’s intent to accelerate the debt. A copy of the August 31, 2011 default
notice was attached to Gonzalez’s affidavit as Exhibit D. The default notice letter states
that IndyMac Mortgage Services, a Division of OneWest Bank, sent the written default
notice by first-class certified mail to Albert at the 51st Street address.
{¶8} Albert responded to the motion for summary judgment. She argued there
was a genuine issue of material fact whether OneWest Bank was entitled to judgment in
foreclosure because OneWest Bank failed to meet all the conditions precedent under
the Note and Mortgage. Albert submitted her affidavit stating she never received written
notice of default and the intent to accelerate the debt.
{¶9} On July 23, 2013, the trial court granted OneWest Bank’s motion for
summary judgment. On August 6, 2013, the judgment entry granting the motion for
summary judgment and decree in foreclosure were filed. It is from this judgment Albert
now appeals.
Stark County, Case No. 2013CA00180 4
ASSIGNMENTS OF ERROR
{¶10} Albert raises two Assignments of Error:
{¶11} “I. THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT
TO THE PLAINTIFF/APPELLEE ONEWEST BANK, FSB, AS PLAINTIFF’S AFFIDAVIT
WAS DEFECTIVE AND INADMISSIBLE UNDER CIV.R. 56(E).
{¶12} “II. THE TRIAL COURT ERRED WHEN IT GRANTED SUMMARY
JUDGMENT TO THE PLAINTIFF/APPELLEE ONEWEST BANK, AS THERE WERE
GENUINE ISSUES OF MATERIAL FACT REMAINING AND THE PLAINTIFF WAS
NOT ENTITLED TO SUMMARY JUDGMENT AS A MATTER OF LAW.”
ANALYSIS
I. and II.
Standard of Review
{¶13} We consider Albert’s two Assignments of Error together because they
raise interrelated issues. Albert’s two Assignments of Error regard the trial court’s grant
of summary judgment in favor of OneWest Bank. We refer to Civ.R. 56(C) in reviewing a
motion for summary judgment which provides, in pertinent part:
Summary judgment shall be rendered forthwith if the pleading,
depositions, answers to interrogatories, written admissions, affidavits,
transcripts of evidence in the pending case and written stipulations of fact,
if any, timely filed in the action, show that there is no genuine issue as to
any material fact and that the moving party is entitled to judgment as a
matter of law. * * * A summary judgment shall not be rendered unless it
appears from such evidence or stipulation and only from the evidence or
Stark County, Case No. 2013CA00180 5
stipulation, that reasonable minds can come to but one conclusion and
that conclusion is adverse to the party against whom the motion for
summary judgment is made, such party being entitled to have the
evidence or stipulation construed most strongly in the party's favor.
{¶14} The moving party bears the initial responsibility of informing the trial court
of the basis for the motion, and identifying those portions of the record before the trial
court, which demonstrate the absence of a genuine issue of fact on a material element
of the nonmoving party's claim. Dresher v. Burt, 75 Ohio St. 3d 280, 292, 662 N.E.2d
264 (1996). The nonmoving party then has a reciprocal burden of specificity and cannot
rest on the allegations or denials in the pleadings, but must set forth “specific facts” by
the means listed in Civ.R. 56(C) showing that a “triable issue of fact” exists. Mitseff v.
Wheeler, 38 Ohio St. 3d 112, 115, 526 N.E.2d 798, 801 (1988).
{¶15} Pursuant to the above rule, a trial court may not enter summary judgment
if it appears a material fact is genuinely disputed. Vahila v. Hall, 77 Ohio St. 3d 421, 429,
674 N.E.2d 1164 (1997), citing Dresher v. Burt, 75 Ohio St. 3d 280, 662 N.E.2d 264
(1996).
Notice of Default and Acceleration
{¶16} In Albert’s first Assignment of Error, she argues OneWest Bank failed to
establish, as a matter of law, that it complied with the applicable notice requirements
necessary to accelerate the payments due under the Note and Mortgage. We disagree.
{¶17} Albert first argues that OneWest Bank failed to comply with the notice
provisions contained in 24 CFR 201.50(a) and 24 CFR 203.604(b), which require the
lender to contact the borrower in a face-to-face meeting in a specified time frame to
Stark County, Case No. 2013CA00180 6
discuss the default and to seek its cure. Where the mortgage at issue is federally
insured and therefore subject to HUD regulations regarding default or accelerations, the
requirements found in those regulations are conditions precedent to foreclosure. Wells
Fargo Bank v. Gerst, 5th Dist. Delaware No. 13 CAE 05 0042, 2014-Ohio-80, ¶ 23; BAC
Home Loans Servicing, LP v. Taylor, 9th Dist. Summit No. 26423, 2013-Ohio-355, ¶ 14.
{¶18} In the present case, there is no Civ.R. 56 evidence to demonstrate that
Albert’s Mortgage is federally insured. Albert’s Mortgage is a conventional loan and is
not subject to federal housing regulations regarding notice, default, and acceleration.
Albert may not rely upon such regulations as a defense to the foreclosure action where
the regulations have no application to her Mortgage with OneWest Bank. U.S. Bank
Natl. Assn. v. Martz, 11th Dist. Portage No. 2013-P-0028, 2013-Ohio-4555, ¶16 citing
Fifth Third Mtge. Co. v. Orebaugh, 12th Dist. Butler No. CA2012–08–153, 2013–Ohio–
1730, ¶ 33 and Chase Home Fin. LLC v. Middleton, 5th Dist. Fairfield No. 12 CA 10,
2012–Ohio–5547, ¶ 32.
{¶19} Albert next argues there is a genuine issue of material fact as to whether
OneWest Bank satisfied the condition precedents found in the Note and Mortgage
regarding notice of default and acceleration.
{¶20} Paragraph 15 of the Mortgage reads:
Notices. All notices given by Borrower or Lender in connection with this
Security Instrument must be in writing. Any notice to Borrower in
connection with this Security Instrument shall be deemed to have been
given to Borrower when mailed by first class mail or when actually
delivered to Borrower’s notice address if sent by other means. * * * The
Stark County, Case No. 2013CA00180 7
notice address shall be the Property Address unless Borrower has
designated a substitute notice address by notice to Lender. * * *
{¶21} The notice provision of Paragraph 22 of the Mortgage provides:
Acceleration; Remedies. Lender shall give notice to Borrower prior to
acceleration following Borrower’s breach of any covenant or agreement in
this Security Instrument (but not prior to acceleration under Section 18
unless Applicable Law provides otherwise). The notice shall specify: (a)
the default; (b) the action required to cure the default; (c) a date, not less
than 30 days from the date the notice is given to Borrower, by which the
default must be cured; and (d) that failure to cure the default on or before
the date specified in the notice may result in acceleration of the sums
secured by this Security Instrument, foreclosure by judicial proceeding and
sale of the Property. The notice shall further inform Borrower of the right to
reinstate after acceleration and the right to assert in the foreclosure
proceeding the non-existence of a default or any other defense of
Borrower to acceleration and foreclosure.
{¶22} Albert stated in her affidavit submitted with her response to the motion for
summary judgment that she did not receive written notice of default and acceleration
from OneWest Bank. The affidavit of Lisa Marie Gonzalez, assistant secretary of
OneWest Bank, averred that on August 31, 2011, OneWest Bank mailed written notice
of default and acceleration to Albert pursuant to the terms of the Note and Mortgage.
The August 31, 2011 written notice of default and acceleration was attached to
Gonzalez’s affidavit as Exhibit D. The letter shows it was sent by first-class certified
Stark County, Case No. 2013CA00180 8
mail. OneWest Bank did not mail the notice of default and acceleration to the mortgage
property address located on 12th Street, but rather to Albert’s 51st Street address.
OneWest Bank later obtained service of the foreclosure complaint upon Albert at the
same 51st Street address. The letter was mailed on August 31, 2011, more than 30
days before filing the foreclosure action. We find there is no genuine issue of material
fact that OneWest Bank satisfied its duty to provide Albert with notice of default and
acceleration pursuant to the terms of the Note and Mortgage. Further, this Court has
recently held after interpreting a similarly written notice provision that there was no
requirement that the borrower actually receive the notice. Citimortgage, Inc. v. Cathcart,
5th Dist. Stark No. 2013CA00179, 2014-Ohio-620, ¶ 14.
Personal Knowledge
{¶23} Albert contends that Gonzalez’s affidavit failed to satisfy the requirement
of Civ.R. 56(E) that affidavits must be made on personal knowledge with respect to the
attached documents’ admissibility as records of regularly conducted activity pursuant to
Evid.R. 803(6).
{¶24} Evidence Rule 803(6) provides that records of regularly conducted
business activity are admissible, as an exception to the rules of hearsay, if shown to be
such “by the testimony of the custodian or other qualified witness.” The question of who
may lay a foundation for the admissibility of business records as a custodian or other
qualified witness must be answered broadly.
[I]t is not necessary that the witness have firsthand knowledge of the
transaction giving rise to the record. * * * “Rather, it must be demonstrated
that: the witness is sufficiently familiar with the operation of the business
Stark County, Case No. 2013CA00180 9
and with the circumstances of the record's preparation, maintenance and
retrieval, that he can reasonably testify on the basis of this knowledge that
the record is what it purports to be, and that it was made in the ordinary
course of business consistent with the elements of Rule 803(6).”
(Citations omitted.) U.S. Bank Natl. Assn. v. Green Meadow SWS, LLC, 5th Dist.
Delaware No. 21 CAE 09 0069, 2013–Ohio–2002, ¶ 49.
{¶25} In the affidavit, Gonzalez avers that the statements made in the affidavit
are based on her personal knowledge and her personal review of the business records
for the Note and Mortgage which are the subject of the action. She stated that in her
capacity as assistant secretary for OneWest Bank, she has access to the loan
documents and loan account records of OneWest Bank, and the affidavit was based on
her personal knowledge obtained from review of the records and from her personal
knowledge of the operation of the maintenance and retrieval of records in OneWest
Bank’s record keeping systems. She stated that loan account records are compiled and
recorded by OneWest Bank in the course of its regularly conducted business activities,
and it is the regular practice of OneWest Bank to make such records. She further stated
that loan account records are made at or near the time of the occurrence of each act or
event affecting the account by persons with knowledge of said act or event, or from
information transmitted by a person with knowledge of acts or events described within
the loan account records. She also averred that the records are kept, maintained and
relied upon in the ordinary course of business activity. From her position as assistant
secretary of OneWest Bank and her statement that she reviewed the documents in the
instant case, it may be reasonably inferred that she has personal knowledge to qualify
Stark County, Case No. 2013CA00180 10
the documents as an exception to the hearsay rule as a business document. See
Citimortgage, Inc. v. Cathcart, 5th Dist. No. 2013CA00179, 2014-Ohio-620, ¶ 29.
{¶26} Based on the foregoing, the two Assignments of Error of Diana L. Albert
are overruled. The trial court did not err in granting summary judgment in favor of
OneWest Bank on its complaint in foreclosure.
CONCLUSION
{¶27} The judgment of the Stark County Court of Common Pleas, General
Division is affirmed.
By: Delaney, J.,
Gwin, P.J. and
Farmer, J., concur.