[Cite as Bankers Guar. Title & Trust Co. v. Moyer , 2021-Ohio-4058.] 

## IN THE COURT OF APPEALS OF OHIO ELEVENTH APPELLATE DISTRICT LAKE COUNT Y

THE BANKERS GUARANTEE TITLE AND TRUST COMPANY, Plaintiff-Appellee,

- v - JAMES MOYER a.k.a. JAMES MICHAEL MOYER, INDIVIDUALLY AND AS ADMINISTRATOR OF THE ESTATE OF EDWARD EMIL WILLIAM MOYER, et al., Defendant-Appellant. CASE NO. 2021-L-029

Civil Appeal from the Court of Common Pleas

Trial Court No. 2019 CF 001147

O P I N I O N Decided: November 15, 2021 Jud g ment: Affirmed

Eric T. Deighton , Carlisle, McNellie, Rini, Kramer & Ulrich Co., LPA, 24755 Cha grin Boulevard, Suite 200, Cleveland, OH 44122 ( For Plaintiff-Appellee )

. Ralph C. Megargel, Megargel, Eskridge & Mullins, LLP , 231 South Chestnut Street, Ravenna, OH 44266 ( For Defendant-Appellant )

.

MATT LYNCH, J. {¶1} Defendant-appellant, James Moyer, individually and as administr ator of the

estate of Edward Emil William Mo yer, appeals the grant of summa ry judgment in favor of plaintiff-appellee, Bankers Guarantee Title and Trust Company, on its Complaint for Foreclosure filed on the promissory note and mortgage of decede nt Edward Moyer. For2

Case No. 2021-L-029 the following reasons, we affirm the decision of the court belo w. {¶2} On July 20, 2019, Bankers Guarantee filed its Complaint for For eclosure, alleging that it was the holder of a promissory note secured by a mortgage that was in

default. {¶3} On November 4, 2019, Bankers Guarantee filed its Motion for Sum mary Judgment. {¶4} On January 21, 2020, Moyer filed a Reply to the Motion for Summ ary Judgment supported by the Affidavit of James Moyer. He averred that he was Administrator of the Estate of Edward Moyer which included real property encumbered by a promissory note and mortgage held by Bankers Guarantee. I n March 2019, Bankers Guarantee presented its claim against the estate, and, in June, Moyer rejected that claim. On September 19, 2019, Moyer had the Lake County Probate Court issue the following Judgment Entry in In re Estate of Moyer , Case No. 18 ES 1503: The Probate Court of Lake County, Ohio, finds that:

1.) The Estate of Edward Emil William Moyer, in accordance with ORC 2117.11, barred in full, on June 28, 2019, the claim of the Bankers Trust and Guarantee Company [sic], consisting of a securitized promissory note executed by Edward Moyer on June 21 , 2013, a June 20, 2019 unpaid remaining balance on said note of $76,534.73, and its security instrument (“mortgage”) on file wi th the Lake County Recorder’s office (record #2013R019701) whose security is the property at 112 1 Cherokee Trail, Willoughby, O hio.

2.) That under Ohio law (ORC 2117.12) the claimant had two mont hs to take action on the barred claim, otherwise the claim would b e forever barred.

3.) And in the two months from June 28, the Claimant did not di spute the barring, its reasoning or its justice. THEREFORE, this court finds that the aforementioned claim is3

Case No. 2021-L-029 forever barred barred as a claim against the estate pursuant to Chapter 2117 of the Ohio Revised Code. 1 Moyer argued in opposition to granting summary judgment that Ba nkers Guarantee “is forever barred from maintaining an action on the entire claim, including both the Note and Mortgage,” by operation of R.C. 2117.12. {¶5} On January 29, 2021, the trial court granted Bankers Guarantee’ s Motion for Summary Judgment based on the following: The affidavit of Tymara Ehrler, a custodian of plaintiff Banker s Guarantee’s records established that it possessed the promissor y note and was entitled to enforce the mortgage when the complain t was filed, that the mortgagor was in default as of March 2019, that all conditions precedent under the note and mortgage were met, and that there is due on the note $75,926.27 together with 3.875% p er annum interest from February 1, 2019. A copy of the mortgage attached to the affidavit established that Bankers Guarantee wa s the original mortgagee and that the mortgage was never assigned or transferred. The preliminary judicial report accompanying the complaint also confirmed this.

{¶6} On February 25, 2021, Moyer filed a Notice of Appeal. On appea l, he raises the following assignment of error: {¶7} “[1.] The trial court’s decision that Bankers was entitled to f oreclosure on the mortgage because decedent was in default of the terms of th e note was contrary to law where the note was barred as a debt against decedent’s esta te and heirs by judgment of the probate court and operation of law.” {¶8} Before considering the merits of the appeal, it is necessary to address Bankers Guarantee’s argument that, since the subject property h as been sold at sheriff’s sale and an order confirming sale has issued, the appeal is now moot. Chemical Bank v.

1. The italicized portion of the Entry is hand-written.4

Case No. 2021-L-029 Capone , 9th Dist. Medina No. 19CA0079-M, 2020-Ohio-6790, ¶ 10-11. Th e Ohio Supreme Court has stated the matter as follows: “It is a well-e stablished principle of law that a satisfaction of judgment renders an appeal from that jud gment moot.” Blodgett v. Blodgett , 49 Ohio St.3d 243, 245, 551 N.E.2d 1249 (1990). “‘Where the court rendering judgment has jurisdiction of the subject-matter of the action a nd of the parties, and fraud has not intervened, and the judgment is voluntarily paid and sa tisfied, such payment puts an end to the controversy, and takes away from the defendant th e right to appeal or prosecute error or even to move for vacation of judgment.’” (C itation omitted.) Id. {¶9} Moyer responds by citing the following statutory provision: If a judgment in satisfaction of which lands or tenements are s old is reversed on appeal, such reversal shall not defeat or affect th e title of the purchaser. In such case restitution in an amount equal to the money for which such lands or tenements were sold, with interes t from the day of sale, must be made by the judgment creditor.

R.C. 2329.45. {¶10} “Some courts,” but not all, “have carved out narrow exceptions to this precedent [that satisfaction of the judgment renders the appeal moot], recognizing that even where a stay was not obtained, ‘R.C. 2329.45 preserves the remedy of restitution, even after the property has been sold at sheriff’s sale and the proceeds distributed.’” (Citation omitted.) Governors Place Condominium Owners Assn., Inc. v. Unknown Heirs

of Polson , 11th Dist. Lake No. 2016-L-070, 2017-Ohio-885, ¶ 29. In hold ing that such appeals were not moot, this court provided the following justif ications:

In Ameriquest [ Mtge. Co. v. Wilson , 11th Dist. Ashtabula No. 2006- A-0032, 2007-Ohio-2576,] this court held that restitution was appropriate where the debtor filed for a stay, but was unsucces sful due to his inability to post a supersedeas bond. [ Id. ] at ¶ 19, citing Chase Manhattan [ Mtge. Corp. v. Locker , 2d Dist. Montgomery No. 19904, 2003-Ohio-6665,] ¶ 44. The Sixth District Court of Appe als5

Case No. 2021-L-029 has also held that satisfaction of the judgment under those circumstances is involuntary, and therefore the appeal is not m oot. MIF Realty L.P. v. K.E.J. Corp. , 6th Dist. Wood No. 94WD059, 1995 WL 311365, *2 (May 19, 1995). In Everhome [ Mgte. Co. v. Baker , 10th Dist. Franklin No. 10AP-534, 2011-Ohio-3303,] the Tenth District addressed the mootness doctrine and stated: “It is a s uspect argument to assert that a void, voidable, or merely erroneous judgment might evade appellate review simply because it was rendered rapidly, completely, and without notice. * * * [S]uc h a holding would allow no recourse in a case which a foreclosure a ction proceeded, completely in error[.]” [ Id. ] at ¶ 14.

Id. at ¶ 30. {¶11} Moyer’s reliance on R.C. 2329.45 is sufficient to demonstrate t he existence of a remedy so that the present appeal would not be moot if thi s court were to find in Moyer’s favor. Accordingly, w e will address the merits of the appeal. {¶12} “To properly support a motion for summary judgment in a foreclo sure 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; (5) the am ount of principal and

interest due.” JPMorgan Chase Bank, Natl. Assn. v. Blank , 11th Dist. Ashtabula No. 2013-A-0060, 2014-Ohio-4135, ¶ 14; Equitable Fed. S. & L. Assn. v. Hopton , 5th Dist. Stark No. CA-6664, 1985 WL 7309, *1 (“the historic prerequisite s to foreclosure [are] execution and delivery of the note and mortgage; valid recordin g of the mortgage; default; and, establishing an amount due”). {¶13} On appeal, Moyer contends that the element of default has not b een established and, as a matter of law, cannot be established. “I n order for a mortgagor to be found in default of the terms of a mortgage note, the note i tself must be enforceable6

Case No. 2021-L-029 as an obligation of the mortgagor. It is meaningless to find a debtor to be in default of the terms of a Note that is itself barred from enforcement against him by operation of law.

This conclusion would be no different were the reason for the b ar * * * that the note had previously been found to be unenforceable for lack of considera tion, capacity, or illegality. In order to foreclose, the mortgagee must show that the mortgag or is in default of its mortgage note. If the note is not a legally enforceable obliga tion, then the [m]ortgage that secures it is not foreclosable.” Appellant’s brief at 10. {¶14} Moyer’s argument is based on the following: “When a claim again st an estate has been rejected in whole or in part * * *, the claiman t must commence an action on the claim, or that part of the claim that was rejected, with in two months after the rejection if the debt or that part of the debt that was rejecte d is then due, * * * or be forever barred from maintaining an action on the claim or part of the c laim that was rejected.”

R.C. 2117.12. {¶15} Moyer’s argument is fundamentally flawed. The statute relied u pon, R.C. 2117.12, does not support his position that the failure to comm ence an action within two months of a claim’s rejection by the estate precludes the possi bility of the note being in default. On the contrary, if the note were not in default, the re would be no claim against the estate to be barred. The statute does not speak of default being cured but of an action not being maintainable. Not only does the plain meaning of the statute contradict Moyer’s position that default cannot be proved as a matter of law, the facts of this case and relevant case law demonstrate the contrary. {¶16} As a factual matter, the decedent, Edward Moyer, executed a not e whereby he agreed to pay Bankers Guarantee $579.63 per month in repayme nt of a loan of7

Case No. 2021-L-029 $96,700.00. At the same time, the decedent executed a mortgage to secure repayment of the loan. According to the a ffidavit of Tymara Ehrler, a cu stomer service specialist for Bankers Guarantee, “payment of the loan has been and remains in default because monthly installments due pursuant to the note and mortgage for the month of March, 2019 and thereafter have not been made.” According to Moyer’s affid avit, “[a]fter serving the rejection [of the claim] on Bankers[,] the Estate made no furth er payments on the Note and Mortgage.” Accordingly, there is no genuine issue of mater ial fact as to whether the note and mortgage are in default. {¶17} When the decedent’s estate defaulted on the repayment of the lo an, Bankers Guarantee had several options for collecting the debt: “First, the mortgagee may seek a personal judgment against the mortgagor to recover the a mount due on the promissory note, without resort to the mortgaged property. * * * Second, t he mort gagee may bring an action to enforce the mortgage, which ‘is for the exclusive benefit of the mortgagee and those claiming under him.’ * * * Third, based o n the property interest created by the mortgagor’s default on the mortgage, the mortgag ee may bring a

foreclosure action to cut off the mortgagor’s right of redempti on, determine the existence and extent of the mortgage lien, and have the mortgaged propert y sold for its satisfaction.”

Deutsche Bank Natl. Trust Co. v. Holden , 147 Ohio St.3d 85, 2016-Ohio-4603, 60 N.E.3d 1243, ¶ 22-24. {¶18} The Ohio Supreme Court has stated unequivocally that these are separate and distinct remedies which may be pursued concurrently: We have long recognized that an action for a personal judgment on a promissory note and an action to enforce mortgage covenants a re “separate and distinct” remedies. Carr [ v. Home Owners Loan Corp. , 148 Ohio St. 533, 540, 76 N.E.2d 389 (1947)]; accord Giddings v.8

Case No. 2021-L-029 Barney , 31 Ohio St. 80, 82 (1876) (“The right to proceed, in equity, to enforce the mortgage lien, and the right to proceed, at law, to collect the mortgage debt, are different but concurrent remedie s”). Based on the distinction between these causes of action–i.e., o ne is an action on a contract, while the other is an action to enforc e a property interest created by the mortgage–we have explained tha t “the bar of the note or other instrument secured by mortgage do es not necessarily bar an action on the mortgage.” Kerr v. Lydecker , 51 Ohio St. 240, 253, 37 N.E. 267 (1894); accord Bradfield [ v. Hale , 67 Ohio St. 316, 325, 65 N.E. 1008 (1902)] (holding that an action for ejectment can be maintained after the statute of limitations on the note has expired); Simon [ v. Union Trust Co. , 126 Ohio St. 346, 350, 185 N.E. 425 (1933)] (“For the purpose of subjecting the land t o the payment of the mortgage debt, no personal judgment was ever necessary”).

Id. at ¶ 25. {¶19} Significantly, the Ohio Supreme Court recognized, as have inter mediate appellate courts, that an action to foreclose may be maintained even when the note itself

has become unenforceable. See U.S. Bank Natl. Assn. v. Robinson , 8th Dist. Cuyahoga No. 105067, 2017-Ohio-5585, ¶ 8 (“[n]otwithstanding the fact th at the obligation to pay the note is no longer enforceable [having been discharged in ba nkruptcy], U.S. Bank is

entitled to maintain an action in foreclosure to secure its int erest as the mortgagee”); Bank of New York Mellon v. Frey , 6th Dist. Sandusky No. S-12-044, 2013-Ohio-4083, ¶ 15 (“if the mortgagee seeks only to foreclos[e] the mortgage and to sel l the property to satisfy the debt, there is no claim against the estate and the mortgage e may assert its claim at any time against the heirs and devisees who took the property s ubject to the lien”); BAC Home Loans Serv., L.P. v. Mowery Properties, Ltd. , 10th Dist. Franklin No. 10AP-396, 2011-Ohio-1596, ¶ 19 (“[the expiration of] the statutory limita tions period for presentment of claims against an estate did not preclude BAC’s independent right to bring an action in equity to foreclose on the mortgage lien and effectuate a sale of the property to satisfy9

Case No. 2021-L-029 the debt”). To reiterate, the note in the present case is unen forceable against the estate despite being in default. Neither the statute nor the authorit y relied upon by Moyer support the proposition that the default has become cured or nullified. {¶20} Moyer claims the trial court was “distracted by the distinction between

actions in rem and [ in ] personam .” Appellant’s brief at 9. Rather than a distraction, this

distinction underlies the difference between a claim based on t he note and a claim based on the mortgage. “A suit to foreclose property securing a debt is not a suit directly against the debtor,” in this case, the estate, “but, rather, is an acti on ‘in rem,’” in this case, the mortgaged property. BAC Home Loans at ¶ 15. Based on this distinction, the trial court rightly stated that “Bankers Guarantee was not required to nor could it assert its foreclosure claim in the probate court when it filed its claim on the promissory note with the Estate.” Consistent with foregoing, the pr obate court’s September 19, 2019 Entry stated that Bankers Guarantee’s claim against the estate, “cons isting of a securitized promissory note” and the “unpaid remaining balance on said note ,” was “ barred as a claim against the estate pursuant to Chapter 2117 of the Ohio Revised Code .” The present foreclosure action was not a claim against the estate for the p urposes of R.C. 2117.12 and, therefore, is not barred under the operation of that statu te. {¶21} The sole assignment of error is without merit. {¶22} For the foregoing reasons, the grant of summary judgment in fav or of Bankers Guarantee is affirmed. Costs to be taxed against the a ppellant.

MARY JANE TRAPP, P.J., THOMAS R. WRIGHT, J.,

concur.