Everbank v. Vanarnhem
| Decision Date | 09 September 2013 |
| Docket Number | CASE NO. 14-13-02 |
| Citation | 2013 Ohio 3872 |
| Parties | EVERBANK, PLAINTIFF-APPELLEE, v. JAY B. VANARNHEM, DEFENDANT-APPELLANT, and JP MORGAN CHASE BANK, N.A., ET AL., DEFENDANTS-APPELLEES. |
| Court | Ohio Court of Appeals |
Appeal from Union County Common Pleas Court
Judgment Affirmed
APPEARANCES:
Audra J. Tidball for Appellant, Vanarnhem
Scott A. King and Jessica E. Salisbury for Appellee, Everbank
{¶1} Defendant-appellant, Jay B. Vanarnhem, appeals the Union County Court of Common Pleas' judgment entry of foreclosure. We affirm.
{¶2} On August 9, 2005, Vanarnhem executed an interest-first adjustable-rate promissory note in the amount of $276,850.00 payable to M/I Financial Corporation as lender to purchase a home located at 7036 Post Preserve Boulevard, Dublin, OH 43016. (Doc. No. 2, attached); (Cliatt Aff., Doc. No. 26, at ¶ 5); (Weatherly Aff., Doc. No. 42, at ¶ 6). The note was indorsed by Wells Fargo Bank, N.A., the servicing agent for the note. (Doc. No. 2, attached); (Cliatt Aff., Doc. No. 26, at ¶ 1); (Weatherly Aff. Doc. No. 42, at ¶ 1). That same day, Vanarnhem executed a mortgage against the property to secure the debt in favor of Mortgage Electronic Registration Systems ("MERS") as nominee for M/I Financial and its successors and assigns. (Doc. No. 2, attached); (Cliatt Aff., Doc. No. 26, at ¶ 6). The mortgage was filed on September 6, 2005, recorded in Volume 634 of the Official Records at Page 664, in the Union County, Ohio Recorder's Office. (Doc. No. 2, attached).
{¶3} According to the terms of the note, the first five years of payments, up to and including the September 1, 2010 payment, were interest-only payments. (Weatherly Aff., Doc. No. 42 at ¶ 9). Beginning with the October 1, 2010 payment, payments would be made toward interest and principal. (Id. at ¶ 10-11).Vanarnhem made the October 1, 2010 payment, of which $620.72 was applied to principal, $692.13 was applied to interest, and $666.09 was escrowed. (Id. at ¶ 13). Vanarnhem failed to make payments on the note thereafter, leaving a principal balance of $276,229.28. (Id. at ¶ 14); (Cliatt Aff., Doc. No. 26, at ¶ 8-9).
{¶4} On January 25, 2012, MERS, as nominee for M/I Financial, assigned the mortgage to Everbank. (Doc. No. 2, attached). The assignment was recorded on February 1, 2012 in Volume 949, Page 906 of the Official Records in the Union County, Ohio Record's Office.
{¶5} On February 17, 2012, Everbank filed a foreclosure complaint against Vanarnhem, his unknown spouse (if any), J.P. Morgan Chase Bank, N.A., Park Place/Post Preserve Homeowners' Association, Inc., and the Union County Treasurer. (Doc. No. 2). Vanarnhem was served with a copy of the complaint by certified mail on February 24, 2012. (Doc. No. 15).
{¶6} On February 27, 2012, the Union County Treasurer filed an answer claiming an interest in the property for current and delinquent taxes. (Doc. No. 20). No other defendant, including Vanarnhem, filed an answer.
{¶7} On September 27, 2012, Everbank filed a motion for default judgment against all the named defendants who failed to file an answer, including Vanarnhem. (Doc. No. 25).
{¶8} On October 4, 2012, Vanarnhem filed a motion for leave to file a responsive pleading alleging that he was unable to previously seek counsel due to a chronic medical illness that required frequent hospitalization. (Doc. No. 30).
{¶9} On October 30, 2012, the trial court denied Vanarnhem's motion, finding that he failed to demonstrate excusable neglect under Civ.R. 6(B)(2). (Doc. No. 31). That same day, the trial court granted Everbank's motion for default judgment but held the motion in abeyance on the issue of damages upon Everbank filing supporting documentation. (Doc. No. 33).
{¶10} On November 7, 2012, Vanarnhem filed a motion for reconsideration and motion to dismiss the complaint pursuant to Civ.R. 12(B)(1) and Fed. Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017. (Doc. No. 35). Everbank filed a memorandum in opposition on November 20, 2012. (Doc. No. 36).
{¶11} On November 30, 2012, Everbank filed notice of its compliance with the trial court's October 30, 2012 judgment entry and the affidavit of Amanda Weatherly, the Vice President of Loan Documentation for Wells Fargo Bank, N.A., representing that, as of August 30, 2012, Vanarnhem owed a total of $305,365.52 on the note. (Doc. Nos. 41-42)
{¶12} On December 4, 2012, Vanarnhem filed a reply to Everbank's memorandum in opposition. (Doc. No. 44).
{¶13} On December 7, 2012, Vanarnhem filed a motion to strike Weatherly's affidavit for lack of personal knowledge. (Doc. No. 45).
{¶14} On December 11, 2012, the trial court denied Vanarnhem's motion for reconsideration/dismissal of the complaint. (Doc. No. 47).
{¶15} On December 21, 2012, Everbank filed a memorandum in opposition to Vanarnhem's motion to strike. (Doc. No. 49).
{¶16} On January 8, 2013, the trial court denied Vanarnham's motion to strike and granted Everbank default judgment. (Doc. Nos. 50-51).
{¶17} On January 24, 2013, Vanarnhem filed a notice of appeal. (Doc. No. 55). Vanarnhem raises three assignments of error for our review.
The trial court abused its discretion when it denied Mr. Vanarnhem's Motion For Leave to File an Answer, holding that Mr. Vanarnhem's illness did not constitute excusable neglect under Civ.R. 6(B) for failure to timely file his Answer, and doing so without holding a hearing.
{¶18} In his first assignment of error, Vanarnhem argues that the trial court abused its discretion by denying him leave to file an answer out of rule because he had a serious medical illness requiring frequent hospitalization and Everbank did not request default judgment until nearly eight months after the complaint was filed. Vanarnhem also argues that the trial court abused its discretion by failing to hold a hearing on the motion for leave.
{¶19} The defendant is required to file an answer within 28 days after service of the summons and complaint upon him. Civ.R. 12(A)(1). Civ.R. 6(B)(2) provides the trial court broad, but not unlimited, discretion to extend this time limit upon motion after the time limit's expiration where the party's failure to act was due to excusable neglect. Davis v. Immediate Med. Servs., Inc., 80 Ohio St.3d 10, 14 (1997). A reviewing court will not reverse a trial court's decision to deny a Civ.R. 6(B)(2) motion for an extension of time absent an abuse of discretion. Id., citing Marion Prod. Credit Assn. v. Cochran, 40 Ohio St.3d 265, 271 (1988). The term "abuse of discretion" connotes more than an error of judgment; rather, it implies that the court's attitude is unreasonable, arbitrary, or unconscionable. Rock v. Cabral, 67 Ohio St.3d 108, 112 (1993).
{¶20} "Although excusable neglect cannot be defined in the abstract, the test for excusable neglect under Civ.R. 6(B)(2) is less stringent than that applied under Civ.R. 60(B)." State ex rel. Lindenschmidt v. Butler Cty. Bd. of Commrs., 72 Ohio St.3d 464, 466 (1995). To determine whether neglect is excusable or inexcusable, the trial court must evaluate all the surrounding facts and circumstances ever-mindful that cases should be decided, where possible, on the merits rather than on procedural grounds. Id., citing Cochran, 40 Ohio St.3d at 271; Griffey v. Rajan, 33 Ohio St.3d 75 (1987), syllabus.
{¶21} Vanarnhem argues that he demonstrated excusable neglect because he suffers from histoplasmosis,1 a debilitating illness which requires frequent hospitalization. We conclude, however, that the trial court did not abuse its discretion by determining that Vanarnhem failed to demonstrate excusable neglect. To begin with, Vanarnhem failed to file any responsive pleading for almost eight months, and then only filed his motion for leave after Everbank requested default judgment. Then, when he did file his motion for leave, Vanarnhem failed to attach any affidavit or other documentation supporting his alleged debilitating illness. In his motion for leave, Vanarnhem alleged that he was unable to "retain" counsel prior to filing his motion, though he sought counsel prior to Everbank's motion for default judgment. (Doc. No. 30). It appears that Vanarnhem's failure to retain counsel was for financial reasons. (Id.). A litigant's inability to afford an attorney is generally not "excusable neglect" under Civ.R. 6(B)(2). Rudolf v. Rudolf, 7th Dist. Mahoning No. 96 CA 60, *3 (Aug. 26, 1999). See also Doe v. Canton Regency, 5th Dist. Stark No. 2010 CA 00048, 2010-Ohio-5976, ¶ 65 (); Brooke v. James R. Rea Ents., Inc., 9th Dist. Summit No. 25433, 2011-Ohio-1531, ¶ 11 (same).
{¶22} Furthermore, while a sudden illness can constitute "excusable neglect," a pre-existing, chronic illness is substantially different. Lindenschmidt, 72 Ohio St.3d at 466. See Resolution Trust Corp. v. Maricopa Cty., 176 Ariz. 631, 635, 863 P.2d 923 (1993) (); In re LaClair, 360 B.R. 388, 397-398 (Bankr.D.Mass.2006) (). A sudden illness, by definition, is unanticipated and may prevent a party from timely responding. A party suffering from a pre-existing, chronic illness, on the other hand, knows about the condition and must account for it when responding to the pleadings. That is not to say that a litigant suffering from a pre-existing, chronic illness could never demonstrate excusable neglect. Circumstances related to the pre-existing, chronic illness might arise that could constitute excusable neglect—we leave that to trial courts' discretion in individual cases. This case does not involve circumstances beyond the existence of the pre-existing, chronic illness itself constituting excusable neglect. Furthermore,...
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