LNV Corp. v. Kempffer
| Decision Date | 21 September 2020 |
| Docket Number | NO. 2019-G-0232,2019-G-0232 |
| Citation | 159 N.E.3d 303 |
| Parties | LNV CORPORATION, Plaintiff-Appellee, v. Barbara R. KEMPFFER, et al., Defendants-Appellants. |
| Court | Ohio Court of Appeals |
Darryl E. Gormley, Reimer, Arnovitz, Chernek & Jeffrey Co., P.O. Box 39696, 30455 Solon Road, Solon, OH 44139; Kyle E. Timken, Ann Marie Johnson, Angela D. Kirk, Matthew J. Richardson, Matthew P. Curry, Michael E. Carleton, Melissa N. Hamble and Jacqueline M. Wirtz, Manley Deas Kochalski, LLC, P.O. Box 165028, Columbus, OH 43216 (For Plaintiff-Appellee).
Grace M. Doberdruk, Law Office of Grace M. Doberdruk, 2000 Auburn Drive, One Chagrin Highlands, Suite 200, Beachwood, OH 44122 (For Defendants-Appellants).
{¶1} Appellants, Barbara and Timothy Kempffer, appeal the November 8, 2019 Judgment Entry of the Geauga County Court of Common Pleas granting summary judgment for appellee and foreclosing on certain property. For the reasons stated herein, the judgment is affirmed.
{¶2} On August 29, 2007, appellants, husband and wife, signed a promissory note (the "Note") in the amount of $137,000.00 secured by certain property, Parcel No. 10-062010 (the "Property"), as evidenced by a mortgage, signed the same day (the "Mortgage"). The initial lender was National City Mortgage, a division of National City Bank; in 2010, both the Note and Mortgage (collectively, the "Loan") were assigned to appellee, LNV Corporation ("LNV"). The Loan is serviced by MGC Mortgage Corporation, Inc. ("MGC"). On October 5, 2015, after appellants had apparently defaulted, appellants signed a Loan Modification Agreement (the "Modification Agreement") with appellee in which appellants expressly "waived and released any defense * * * to any and all acts, omissions or events occurring prior to the execution of this agreement."
{¶3} In May 2016, appellants again defaulted on the Loan. On May 13, 2016, MGC sent Barbara Kempffer a Notice of Default, giving her until June 22, 2016 to cure. Appellants subsequently made a partial payment in an amount insufficient to cure the default, as MGC notified them in a letter dated June 7, 2016. After appellants failed to cure, MGC sent appellants a Notice of Acceleration on July 7, 2016.
{¶4} Thereafter, however, MGC sent appellants a second Notice of Default dated August 15, 2016 and purported to give appellants until September 24, 2016 to cure. Appellants again sent a partial payment, which MGC returned in a letter dated August 24, 2016, stating "we are returning your funds because we have accelerated your loan and the payment received is insufficient to pay what is owed on the loan or, if applicable, reinstate the loan pursuant to the Notice of Acceleration previously sent to you."
{¶5} LNV filed a complaint in foreclosure action against them on April 12, 2019 and moved for summary judgment on August 15, 2019, which the court ultimately granted. Appellants now appeal, assigning three errors for our review.
{¶6} As each appellee relates to the trial court's award of summary judgment, we shall first set forth the proper standard for our analysis. Appellate courts review summary judgment decisions de novo. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996). Summary judgment should only be granted "if the pleadings, depositions, answers to interrogatories, written admissions, affidavits, transcripts of evidence, 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." Civ.R. 56(C).
{¶7} To support a motion for summary judgment in a foreclosure action, "a plaintiff must present evidentiary-quality materials showing: (1) the movant is the holder of the Note and Mortgage, or is a party entitled to enforce it; (2) if the movant is not the original mortgagee, the chain of assignments and transfers; (3) the mortgagor is in default; (4) all conditions precedent have been met; and (5) the amount of principal and interest due." Citizens Bank, N.A. v. Duchene, 11th Dist. Trumbull No. 2018-T-0085, 2019-Ohio-2972, 2019 WL 3287978, ¶10, citing JPMorgan Chase Bank, Nat'l Assn. v. Blank, 11th Dist. Ashtabula No. 2013-A-0060, 2014-Ohio-4135, 2014 WL 4672381, ¶14.
{¶8} The party moving for summary judgment bears the initial responsibility of showing there is no triable issue of fact. Morris v. Ohio Cas. Ins. Co. , 35 Ohio St.3d 45, 47, 517 N.E.2d 904 (1988). If the moving party does not meet its initial burden, then no duty arises on the part of the nonmoving party. Id. If, however, the moving party meets this burden, the responsibility shifts to the nonmoving party to show a triable issue of fact. Id. ; Dresher v. Burt, 75 Ohio St.3d 280, 662 N.E.2d 264 (1996). The nonmoving party must show evidence beyond mere allegations. Civ.R. 56(E) ; Morris, supra. All questions must be resolved in favor of the nonmoving party. Grafton, supra.
{¶9} Appellants' first assignment of error states:
{¶10} The trial court erred by granting appellee LNV Corporation's motion for summary judgment when all conditions precedent to foreclosure were not satisfied.
{¶11} Under this assignment of error, appellants argue that appellee failed to send compliant notices of default and acceleration prior to accelerating the Loan and filing this action. Particularly, appellants claim error in that the first Notice of Default, dated May 13, 2016, was not provided in appellee's initial motion for summary judgment, but was only provided in its reply to appellants' opposition and supplemental affidavits. Thus, appellants argued, the court erred in considering this notice in deciding the motion for summary judgment.
{¶12} Ignoring, then, what they purport to be an improperly considered notice of default dated May 13, 2016, appellants argue that the August 15, 2016 notice of default, as was attached to appellee's initial motion for summary judgment, was insufficient to establish that the condition precedent had been met prior to filing this action. Particularly, appellants argue that the August 15, 2016 letter gave them until September 24, 2016 to pay, but appellee returned their August 2016 payment stating "[w]e are returning your funds because we have accelerated your loan and the payment received is insufficient to pay what is owed on the loan...."
{¶13} Further, appellants argue the July 7, 2016 Notice of Acceleration failed to meet the requirements of Paragraph 22 of the Mortgage. They also assert error in that the July 7, 2016 notice stated they "may" have the right to cure, instead of unequivocally stating they have the right to cure. In support, appellants cite Fed. Natl. Mtge. Assn. v. Marroquin, 477 Mass. 82, 89-90, 74 N.E.3d 592 (2017). Finally, appellants argue that the purported notice of acceleration was deficient for having been sent only to Barbara, and not Timothy, though both appellants are considered borrowers.
{¶14} Paragraph 22 of the Mortgage sets forth the requirements for notice prior to acceleration. Particularly, it requires appellee, prior to acceleration, to give appellants notice of:
{¶15} (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.
{¶16} Appellee asserts that the letters dated May 13, 2016 and August 15, 2016 by MGC meet these requirements. Appellants argue appellee inappropriately attempted to introduce new evidence and argument in its reply to appellants' opposition to the motion for summary judgment. This court, however, has held that an affidavit submitted with a reply brief seeking to clarify a matter previously raised did not constitute a new argument. Deutsche Bank Natl. Tr. Co. v. Ayers , 11th Dist. Portage, 2020-Ohio-1332, 153 N.E.3d 452, ¶48. Here, in appellee's initial motion for summary judgment, they asserted that all conditions precedent, including proper notice, had been met prior to filing the complaint in foreclosure. While appellee did not provide the May 13, 2016 notice of default in the initial motion, they provided the August 15, 2016 notice of default; when appellants filed their reply and objected, appellee supplemented their motion and included the May 13, 2016 notice of default. This was not a new argument, however, as appellee was not stating for the first time in their reply that they met all conditions precedent, and the trial court did not err in considering it.
{¶17} Furthermore, "when a new argument is raised in a reply, the proper procedure is to strike the reply or, alternatively, to allow the opposing party to file a surreply." Id. at ¶49, citing Hicks v. Cadle Co., 11th Dist. Trumbull, 2016-Ohio-4728, 66 N.E.3d 1255, ¶18. Appellants failed to move to strike or for leave for file a surreply, and, thus, any objection to the consideration of such evidence has been waived. See Ayers, supra, at ¶50 ; Lewis Potts, Ltd. v. Zordich, 11th Dist. Trumbull No. 2018-T-0028, 2018-Ohio-5341, 2018 WL 6839718, ¶42.
{¶18} Accordingly, we find no error on the part of the trial court for considering the May 13, 2016 notice of default. Moreover, upon review of the record, we find that the May 13, 2016 and August 15, 2016 notices were not deficient; both notices orderly and specifically provided the information required by Paragraph 22 of the Mortgage.
{¶19} In the remainder of their arguments, appellants ignore the May 13, 2016 notice of acceleration. Appellants...
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