BAC Home Loans Servicing, L.P. v. Kolenich

• Decision Date: 05 July 2011
• Docket Number: No. CA2010–11–299.,CA2010–11–299.
• Citation: 2011 -Ohio- 3345,194 Ohio App.3d 777,958 N.E.2d 194
• Parties: BAC HOME LOANS SERVICING, L.P., Appellee, v. KOLENICH et al., Appellants.
• Court: Ohio Court of Appeals

194 Ohio App.3d 777

2011 -Ohio- 3345

958 N.E.2d 194

BAC HOME LOANS SERVICING, L.P., Appellee,

v.KOLENICH et al., Appellants.

No. CA2010–11–299.

Court of Appeals of Ohio, Twelfth District, Butler County.

Decided July 5, 2011.

George J. Annos, Cleveland, for appellee.

James E. and Barbara Kolenich, Cincinnati, appellants, pro se.

HENDRICKSON, Judge.

[Ohio App.3d 780] {¶ 1} Defendants-appellants, James E. Kolenich and Barbara R. Kolenich, appeal pro se the decisions of the Butler County Court of Common Pleas dismissing their counterclaims and granting summary judgment in favor of plaintiff-appellee, BAC Home Loans Servicing, L.P., f.k.a. Countrywide Home Loans Servicing, L.P. (“BAC”), in a foreclosure action. For the reasons discussed below, we affirm in part and reverse in part the judgment and remand the cause.

{¶ 2} On February 27, 2004, James Kolenich executed a promissory note in favor of Countrywide Home Loans, Inc., in the principal amount of $144,000. The note was secured by a mortgage on property located at 4857 Rialto Ridge Drive in West Chester, Ohio. The mortgage document designated James Kolenich as mortgagor, with his wife, Barbara Kolenich, executing the mortgage to release her dower interest in the property. Mortgage Electronic Registration Systems, Inc. (“MERS”), was designated as mortgagee as the nominee for Countrywide.

{¶ 3} On July 23, 2009, BAC filed a foreclosure action against the Koleniches, alleging that James Kolenich was in default on the payment of the note. BAC sought judgment on the note in the amount of $133,985.73 plus late fees and interest from February 1, 2009, and further sought to foreclose on the mortgage.

[Ohio App.3d 781] The Koleniches' Motion to Dismiss

{¶ 4} In September 2009, the Koleniches, appearing pro se, moved to dismiss BAC's complaint pursuant to Civ.R. 12(B)(1). They argued that BAC failed to demonstrate that it was the current holder of the note and mortgage and therefore lacked standing to pursue the foreclosure action. In response, BAC filed an affidavit incorporating by reference a note and mortgage assignment executed on July 17, 2009, in favor of “BAC Home Loans Servicing, L.P., fka, Countrywide Home Loans Servicing L.P.,” by MERS as nominee for Countrywide. The assignment was recorded on July 27, 2009, in the Butler County Recorder's office.

{¶ 5} In its March 15, 2010 decision, the trial court denied the Koleniches' motion to dismiss. The court determined that there was no break in the chain of title between BAC, MERS, and Countrywide, and that BAC was entitled to bring the action as the real party in interest pursuant to the assignment.

BAC's Motion to Dismiss

{¶ 6} Following the denial of their motion to dismiss, the Koleniches answered the complaint and asserted counterclaims against BAC for (1) fraudulent misrepresentation, (2) violation of the Fair Debt Collection Practices Act (“FDCPA”), (3) quiet title, and (4) the establishment of Barbara Kolenich's alleged dower interest in the property. The FDCPA and quiet-title claims were based on the Koleniches' assertion that the mortgage assignment to BAC was not valid, and therefore, BAC was not the proper party-plaintiff in the foreclosure action.

{¶ 7} BAC moved to dismiss the Koleniches' counterclaims pursuant to Civ.R. 12(B)(6). It argued, in part, that the Koleniches were not entitled to relief on their claims for a violation of the FDCPA and to quiet title because the trial court had determined in its March 15, 2010 decision denying their motion to dismiss that the note and mortgage assignment to BAC was valid. According to BAC, as a result of the court's previous decision, the Koleniches failed to state claims upon which relief could be granted.

{¶ 8} In its May 20, 2010 decision, the trial court granted BAC's Civ.R. 12(B)(6) motion to dismiss the Koleniches' counterclaims.

BAC's Motion for Summary Judgment

{¶ 9} BAC also moved for summary judgment on its foreclosure complaint. Thereafter, the Koleniches requested a continuance pursuant to Civ.R. 56(F) to complete discovery and respond to the motion, which was granted by the trial court.

{¶ 10} Following an additional discovery continuance granted by the trial court, the Koleniches filed a “provisional response” in opposition to summary judgment, [Ohio App.3d 782] in which they conceded that James Kolenich had not made payments on the note since in or around February 2009. However, they argued that BAC was not entitled to judgment in its favor, because it did not suffer damages as a result of James Kolenich's default. According to the Koleniches, BAC had been made whole by “collateral sources” through the United States government's Troubled Asset Relief Program (“TARP”) and “at 100 cents on the dollar through [the government's] bailout of insurance company AIG.” The Koleniches also claimed that there were issues of fact related to the validity of the note and mortgage assignment to BAC.

{¶ 11} In connection with their provisional response, the Koleniches filed an additional, Civ.R. 56(F) continuance to complete discovery as well as a motion to compel, claiming that BAC's responses to their discovery requests were insufficient, and that they needed additional time to develop their collateral-source and assignment-validity arguments. In its October 19, 2010 decision, the trial court denied the Koleniches' Civ.R. 56(F) motion and their motion to compel and granted summary judgment in favor of BAC on its foreclosure complaint.

{¶ 12} The Koleniches appeal the trial court's May 20 and October 19, 2010 decisions, raising two assignments of error for our consideration.¹

{¶ 13} Assignment of Error No. 1:

{¶ 14} The [trial] court erred to the prejudice of the defendant[s] by granting summary judgment to plaintiff while plaintiff was resisting discovery.

{¶ 15} In their first assignment of error, the Koleniches challenge the trial court's decision granting summary judgment in favor of BAC on its note and mortgage-foreclosure claims. They argue that summary judgment was improper because BAC “resist[ed]” their attempts at discovering evidence relevant to their collateral source and assignment validity arguments.

{¶ 16} 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. Burkes v. Stidham (1995), 107 Ohio App.3d 363, 370, 668 N.E.2d 982, citing Norris v. Ohio Std. Oil Co. (1982), 70 Ohio St.2d 1, 2, 24 O.O.3d 1, 433 N.E.2d 615. This court reviews summary-judgment decisions de novo, which means that we review the trial court's judgment independently and without deference to its determinations. Burgess v. Tackas (1998), 125 Ohio App.3d 294, 296, 708 N.E.2d 285. We use the same standard in our review that the trial court should have employed. Lorain Natl. Bank v. Saratoga Apts. (1989), 61 Ohio App.3d 127, 129, 572 N.E.2d 198.

[Ohio App.3d 783] {¶ 17} The Ohio Supreme Court has repeatedly held that summary judgment is appropriate under Civ.R. 56 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.” Zivich v. Mentor Soccer Club, Inc. (1998), 82 Ohio St.3d 367, 369–370, 696 N.E.2d 201. The party moving for summary judgment has the initial burden of producing some evidence that affirmatively demonstrates the lack of a genuine issue of material fact. Dresher v. Burt (1996), 75 Ohio St.3d 280, 292–293, 662 N.E.2d 264. 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. Id.; Civ.R. 56(E).

{¶ 18} 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.” Gates Mills Invest. Co. v. Pepper Pike (1978), 59 Ohio App.2d 155, 168–169, 13 O.O.3d 191, 392 N.E.2d 1316. A motion for a continuance to conduct discovery under Civ.R. 56(F) “ ‘must be supported by a proper affidavit.’ ” Silver v. Jewish Home of Cincinnati, 190 Ohio App.3d 549, 2010-Ohio-5314, 943 N.E.2d 577, ¶ 20, quoting St. Joseph's Hosp. v. Hoyt, Washington App. No. 04CA20, 2005-Ohio-480, 2005 WL 293800, ¶ 24. General averments requesting a continuance for the purpose of discovery are insufficient, as “ ‘the party seeking the Civ.R. 56(F) continuance must state a factual basis and reasons why the party cannot present sufficient documentary evidence without a continuance.’ ” Id.

{¶ 19} A trial court maintains the discretion to manage the discovery process. State ex rel. Daggett v. Gessaman (1973), 34 Ohio St.2d 55, 63 O.O.2d 88, 295 N.E.2d 659. Accordingly, a trial court's decision regarding the regulation of discovery will not be reversed on appeal absent an abuse of discretion. Id. at 57, 63 O.O.2d 88, 295 N.E.2d 659. A trial court abuses its discretion only if its decision is unreasonable, arbitrary, or unconscionable. Blakemore v. Blakemore (1983), 5 Ohio St.3d 217, 219, 5 OBR 481, 450 N.E.2d 1140.

{¶ 20} The record indicates that following the Koleniches' initial Civ.R. 56(F) request in April 2010, the court established a trial date of November 10, 2010, with discovery completion and summary judgment deadlines of August 1 and August 15. Subsequently, in July 2010, the Koleniches moved to amend the court's scheduling order to allow for additional time to complete discovery. They claimed that they had served a first set of discovery requests and amended requests upon BAC in early June, but had yet to receive responses. The trial court granted the motion and extended the discovery and summary-judgment [Ohio App.3d 784] deadlines to October 1, 2010. In its...