[Cite as LNV Corp. v. Kempffer , 2020-Ohio-4527.]

IN THE COURT OF APPEALS

ELEVENTH APPELLATE DISTRICT GEAUGA COUNTY, OHIO

LNV CORPORATION, : O P I N I O N Plaintiff-Appellee, : CASE NO. 2019-G-0232 - vs - : BARBARA R. KEMPFFER, et al., : Defendants-Appellants. :

Civil Appeal from the Geau g a Count y Court of Common Pleas, Case No. 2019 F 000329.

Jud g ment: Affirmed.

Darryl E. Gormley, Reimer, Arnovitz, Chernek & Jef frey 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 Cha g rin Hi g hlands, Suite 200, Beachwood, OH 44122 ( For Defendants-Appellants )

.

CYNTHIA WESTCOTT RICE, J. {¶1} Appellants, Barbara and Timothy Kempffer, appeal the November 8 , 2019 Judgment Entry of the Geauga County Court of Common Pleas grant ing summary judgment for appellee and foreclosing on certain property. For the reasons stated herein, the judgment is affirmed.2 {¶2} On August 29, 2007, appellants, husband and wife, signed a prom issory note (the “Note”) in the amount of $137,000.00 secured by certa in 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 “L oan”) were assigned to appellee, LNV Corporation (“LNV”). The Loan is serviced by MGC Mortgage Corporation, Inc. (“MGC”). On October 5, 2015, after appellants had apparen tly defaulted, appellants signed a Loan Modification Agreement (the “Modification Agreeme nt”) 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 ag reement.” {¶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 ins ufficient 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, 2 016. {¶4} Thereafter, however, MGC sent appellants a second Notice of Def ault dated August 15, 2016 and purported to give appellants until Septembe r 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 acce lerated 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 previ ously sent to you.”3 {¶5} LNV filed a complaint in foreclosure action against them on Apr il 12, 2019 and moved for summary judgment on August 15, 2019, which the co urt 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 (1996). Summary judgment should only be granted “if the pl eadings, depositions, answers to interrogatories, written admissions, affidavits, tra nscripts of evidence, and written stipulations of fact, if any, timely filed in the actio n, show that there is no genuine issue as to any material fact and that the moving party is enti tled to judgment as a matter of law.” Civ.R. 56(C). {¶7} To support a motion for summary judgment in a foreclosure actio n, “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) th e amount of principal and

interest due.” Citizens Bank, N.A., v. Duchene, 11th Dist. Trumbull No. 2018-T-0085, 2019-Ohio-2972, ¶10, citing JPMorgan Chase Bank, Nat’l Assn. v. Blank, 11th Dist. Ashtabula No. 2013-A-0060 2014-Ohio-4135, ¶14. {¶8} The party moving for summary judgment bears the initial respons ibility of showing there is no triable issue of fact. Morris v. Ohio Cas. Ins. Co. , 35 Ohio St.3d 45, 47 (1988). If the moving party does not meet its initial burde n, then no duty arises on the part of the nonmoving party. Id. If, however, the moving party meets this burden, the4 responsibility shifts to the nonm oving party to show a triable issue of fact. Id.; Dresher v. Burt, 75 Ohio St.3d 280 (1996). The nonmoving party must show eviden ce 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 mo tion for summary judgment when all conditions precedent to foreclosu re were not satisfied. {¶11} Under this assignment of error, appellants argue that appellee failed to send compliant notices of default and acceleration prior to accelera ting 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 sum mary judgment, but was only provided in its reply to appellants’ opposition and supple mental affidavits. Thus, appellants argued, the court erred in considering this notice i n deciding the motion for summary judgment. {¶12} Ignoring, then, what they purport to be an improperly considere d 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 judgme nt, was insufficient to establish that the condition precedent had been met prior to fi ling this action. Particularly, appellants argue that the August 15, 2016 letter gave them unti l 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 rec eived is insufficient to pay what is owed on the loan....” {¶13} Further, appellants argue the July 7, 2016 Notice of Accelerati on failed to meet the requirements of Paragraph 22 of the Mortgage. They al so assert error in that5 the July 7, 2016 notice stated they “may” have the right to cur e, instead of unequivocally stating they have the right to cure. In support, appellants ci te Fed. Natl. Mtge. Assn. v. Marroquin, 477 Mass. 82, 89-90 (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 no tice prior to acceleration. Particularly, it requires appellee, prior to acc eleration, 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 Borr ower, by which the default must be cured; and (d) that failure to cur e the default on or before the date specified in the notice may resul t in acceleration of the sums secured by this Security Instrument, foreclosure by judicial proceeding and sale of the Property. T he notice shall further inform Borrower of the right to reinstate after acceleration and the right to assert in the foreclosure proceed ing 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 inap propriately attempted to introduce new evidence and argument in its reply to appellan ts’ opposition to the motion for summary judgment. This court, however, has held that an af fidavit submitted with a reply brief seeking to clarify a matter previously raised did n ot constitute a new argument. Deutsche Bank Natl. Tr. Co. v. Ayers , 11th Dist. Portage No. 2019-P-0094, 2020-Ohio1332, ¶48. Here, in appellee’s initial motion for summary judg ment, they asserted that all conditions precedent, including proper notice, had been met pri or to filing the complaint in foreclosure. While appellee did not provide the May 13, 201 6 notice of default in the initial motion, they provided the August 15, 2016 notice of def ault; when appellants filed6 their reply and objected, appellee supplemented their motion an d 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 con ditions precedent, and the trial court did not err in considering it. {¶17} Furthermore, “when a new argument is raised in a reply, the pro per procedure is to strike the reply or, alternatively, to allow th e opposing party to file a surreply.” Id. at ¶49, citing Hicks v. Cadle Co., 11th Dist. Trumbull No. 2014-T-0103, 2016-Ohio-4728, ¶18. Appellants failed to move to strike or fo r 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, ¶42. {¶18} Accordingly, we find no error on the part of the trial court fo r considering the May 13, 2016 notice of default. Moreover, upon review of the r ecord, we find that the May 13, 2016 and August 15, 2016 notices were not deficient; bo th 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 contend that the August 15, 2016 notice gave them until September 24, 2016 to cure, but their returned payment no tice, dated August 24, 2016, stated the loan had already been accelerated. In this re gard, appellants argue that appellee prematurely accelerated the Loan. {¶20} The May 13, 2016 notice stated appellants had until June 22, 20 16 to cure, by paying in full the amount passed due. That notice stated th at partial payments may be applied or held in suspense but will not be construed as a c ure or waiver of appellee’s7 rights. Appellee provided exhibits to show that appellants did not cure their default by June 22, 2016, but made a partial payment on June 7, 2016, whic h was unapplied to their balance owed. Appellants failed to cure. Thus, on July 7, 201 6, appellee sent appellants a Notice of Acceleration, notifying them the Loan was accelerat ed as the default had not

been cured. {¶21} Appellee explains the second notice of default stating, “[t]he only reasons that MGC sent these letters on two separate occasions were that the borrowers’ partial payment of $1500 on June 16, 2016 was sufficient to advance the due date for their mortgage loan one month, from April 2016 to May 2016 and furthe r MGC evidently acted

out of an abundance of caution.” It notes that neither the Mor tgage nor Ohio law required multiple notices of default if the borrower fails to cure after the first notice; accordingly, it argues, it had the right to accelerate on June 22, 2016, and pr operly did so as evidenced in its July 7, 2016 notice. {¶22} We agree; while the second notice of default may have stated ap pellants had until September 24, 2016 to cure, appellants had already be en notified that the Loan had been accelerated. Moreover, appellants did not at any poin t before or after September 24, 2016 cure the default but only provided a partial payment that, according to the terms of the Mortgage, appellee had the right to return. Appellee was within its right to accelerate the Loan as it did in July 2016 and gave ap pellants multiple opportunities to cure before filing the action in foreclosure i n April 2019. {¶23} Appellants also argue the July 7, 2016 Notice of Acceleration d id not meet the requirements of Paragraph 22 of the Mortgage. This argumen t is without merit; the July 7, 2016 notice did not have to meet the requirements of Pa ragraph 22 as those8 requirements govern the required notices of default prior to ac celeration, which appellee complied with in its May 13, 2016 notice of default. {¶24} Appellants also argue the July 7, 2016 notice of acceleration w as flawed because it stated that appellants “may” have the right to reins tate after acceleration, instead of unequivocally stating that right, citing Marroquin . In Marroquin, the Supreme Judicial Court of Massachusetts held that use of the word “may, ” as opposed to unequivocal language, failed to strictly comply with the terms of the mortgage, thus rendering the notice insufficient. This court has recently rej ected this argument, stating: {¶25} In addition to being nonbinding, we find Marroquin to be inapposite. Unlike in Ohio, Massachusetts permits foreclosure of mortgages by the exercise of a “power of sale” without “judicial oversight.” See id. at 86, 74 N.E.3d 592. Because of that “substantial power,” the lender must “strictly comply with the terms of a mortgage.” See id. Apparently, the case on which Marroquin relies was decided by a bare majority and has not been followed outside of Massachusett s other than in Alabama. See Aubee v. Selene Fin., LP , D.R.I. No. 19- 37WES, 2019 WL 7282019, *5 (Dec. 27, 2019). Ayers, supra, at ¶87. {¶26} Finally, appellants’ argument that Timothy Kempffer did not rec eive notice prior to acceleration is without merit. Paragraph 15 of the Mo rtgage states that “[n]otice to any one Borrower shall constitute notice to all Borrowers un less Applicable Law expressly requires otherwise.” As appellants do not dispute th at Barbara Kempffer received the May 13, 2016 and August 15, 2016 notices, any argu ment that appellee failed to meet a condition precedent in regard to notice to Tim othy is without merit. {¶27} Accordingly, appellants’ first assignment of error is without m erit. {¶28} The second assignment of error states: {¶29} The trial court erred by granting summary judgment when materia l issues of fact remained for trial[.]9 {¶30} Under this assignment of error, appellants challenge the validi ty of the chain of mortgage assignments. However, the record shows that appell ants signed a Loan Modification Agreement in which they expressly “waived and rele ased any defense * * * to any and all acts, omissions or events occurring prior to the execution of this agreement” and which expressly named appellee as the lender. Appellee als o notes that a few weeks before the case at bar the same trial court ruled that appellee was current holder of the borrowers’ note and mortgage and attached a copy of that judgme nt entry to its motion for summary judgment. Appellants challenge this argument by ar guing they were not made parties to that action. {¶31} Preliminarily, we note that appellants were not necessary parti es to the prior action. As this court has previously held, borrowers do not ha ve standing to challenge mortgage assignments unless they are affected by the assignment

. U.S. Bank Nat’l Assn. v. Blank, 11th Dist. Ashtabula No. 2014-A-0036, 2015-Ohio-1687, ¶12. Her e, appellants do not argue that they were in any way affected by the assignme nt, nor is there any evidence to support such a claim. {¶32} The trial court found that there was a mutual mistake in the ex ecution and recording of the intervening assignment of mortgage to U.S. Ban k; that this intervening assignment was never the intention of the parties; that recordi ng is void; and that appellee

was the current holder. {¶33} Appellants expressly waived any and all defenses from actions o r omissions occurring prior to the signing of the Loan Modification Agreeme nt. The purported discrepancies that appellants point to occurred prior to the si gning of the Loan Modification Agreement. Furthermore, the trial court had previ ously adjudicated the10 matter of whether appellee was the owner of this particular loa n and found that it was.

For the trial court to find otherwise in this case would be to directly contradict its own prior holding. Accordingly, we cannot agree there was a question of material fact as to whether appellee was the owner of the Loan and entitled to bring this a ction. {¶34} Accordingly, appellants’ second assignment of error is without merit. {¶35} Appellants’ third assignment of error states: {¶36} The trial court erred by granting appellee’s motion for summary judgment because the affidavit of Victoria Wolff was not made o n personal knowledge[.] {¶37} Appellants argue that Victoria Wolff’s affidavit was insufficie nt because she was relying on records from other services and she did not stat e that she had personal knowledge of the record-keeping systems of any servicer other t han MGC Mortgage Corporation, Inc. In support, appellants cite Bank of New York Mellon v. Roulston , 8th Dist. Cuyahoga No. 104908, 2017-Ohio-8400

. Appellants assert particular error in that without personal knowledge, the affiant could not authenticate when appelle e obtained possession of the original note, where the note was stored, or whether the note had been transferred. These arguments, however, attempt to question whe ther appellee was a party entitled to enforce this Loan, a matter which, as discuss ed under the second assignment of error, appellants waived in the Loan Modification Agreement. {¶38} They also argue that the affiant claimed appellee had possessio n of the original note on August 21, 2009, but the mortgage was not assi gned to appellee until January 6, 2010; the affiant based her knowledge on a letter fr om Dovenmuehe Mortgage, Inc. (“DMI”) in April 2017 that the note will be sent to appellants’ attorneys; and that there were no properly authenticated records attached to t he affidavit to establish custody of the original note.11 {¶39} Pursuant to Civ.R. 56(E), in a motion for summary judgment “[s] upporting and opposing affidavits shall be made on personal knowledge, sh all set forth such facts as would be admissible in evidence, and shall show affirmativel y that the affiant is competent to testify to the matters stated in the affidavit.” Id. “‘ [The] mere assertion of personal knowledge satisfies the personal knowledge requirement of Civ.R. 56(E) if the nature of the facts in the affidavit combined with the identity of the affiant create a reasonable inference that the affiant has personal knowledge of the facts in the affidavit.’” Ayers, supra, at ¶53, quoting Merlo, at ¶25. {¶40} “[T]he witness must be sufficiently familiar with the operation of the business and with the circumstances of the record’s preparation and main tenance that he or she can reasonably testify, on the basis of this knowledge, that th e record is what it purports to be and that it was made in the ordinary course of business.” Ayers, supra, at ¶54. However, there is no requirement that the affiant have firsthan d knowledge of the transaction giving rise to the record. Id. {¶41} This court recently addressed the application of Roulston to similar

circumstances in Ayers. There, this court noted that this court has not adopted the

Roulston holding and that the Eighth District subsequently narrowed its Roulston holding. Instead, this court has consistently held that “an employee of a loan servicer had the requisite personal knowledge about the material for which he av erred by stating his personal knowledge was based on his position and that he person ally reviewed the loan servicer’s regularly kept business records.” See Ayers, at ¶57; Portage Cty. Commrs. v. O'Neil, 11th Dist. Portage No. 2013-P-0066, 2015-Ohio-808, ¶17-18; U.S. Bank Natl.

Assn. v. Martz , 11th Dist. Portage No. 2013-P-0028, 2013-Ohio-4555, ¶25.12 {¶42} Furthermore, in both the original and supplemental affidavits, Ms. Wolff expressly attested to having “personal knowledge of and [being] familiar with the record keeping system of LNV Corporation and MGC.” While the answers to interrogatories had previously shown that DMI was MGC’s subservicer, in her supplem ental affidavit, Ms. Wolff clarified that she also has personal knowledge of how rec ords are kept and maintained by MGC’s subservicer, DMI. She also stated she had access to and reviewed appellants’ Loan records, which she attested were made “at or n ear the time of the event and by or from information transmitted from a person with knowl edge.” Additionally, she testified that she “personally reviewed and independently verif ied the accuracy of the factual information included in this affidavit through my revie w of the aforementioned business records.” She attested that true and accurate copies were attached to her affidavit, that appellants were in default, and the amount of d efault. {¶43} Thus, appellee presented sufficient evidence to create a reason able inference that Ms. Wolff’s affidavit was based on personal know ledge and the burden shifted to appellants to present evidence demonstrating the aff idavit was not based on personal knowledge. Appellants did not meet this burden but me rely stated in a conclusory fashion that Ms. Wolff did not have personal knowled ge and that the affidavits

contradicted one another. {¶44} No contradiction is apparent from the record. Ms. Wolff expres sly stated her affidavit was based on personal knowledge. She attached co pies of the business records to which she refers to her affidavits, and attested the records were “true and accurate copies” of the originals. Accordingly, appellants’ th ird assignment of error is

without merit.13 {¶45} In light of the foregoing, the judgment of the Geauga County Co urt of

Common Pleas is affirmed.

TIMOTHY P. CANNON, P.J., concurs, THOMAS R. WRIGHT, J., concurs in judgment only.