Court Opinion

ID: 2698177
Source: CourtListenerOpinion
Date Created: 2014-08-04 17:46:31.414934+00
Date Added: 2024-06-11T12:50:45.914428
License: Public Domain

[Cite as HSBC Mtge. Servs., Inc. v. Frazier, 2014-Ohio-2155.]

                                       COURT OF APPEALS
                                   DELAWARE COUNTY, OHIO
                                   FIFTH APPELLATE DISTRICT

HSBC MORTGAGE SERVICES, INC.                          :    JUDGES:
                                                      :
                                                      :    Hon. William B. Hoffman, P.J.
       Plaintiff-Appellee                             :    Hon. Sheila G. Farmer, J.
                                                      :    Hon. Patricia A. Delaney, J.
-vs-                                                  :
                                                      :    Case No. 13 CAE 10 0076
                                                      :
RONNIE C. FRAZIER, ET AL.                             :
                                                      :
                                                      :
       Defendant-Appellant                            :    OPINION

CHARACTER OF PROCEEDING:                                   Appeal from the Delaware County Court
                                                           of Common Pleas, Case No. 12 CVE
                                                           101265

JUDGMENT:                                                  AFFIRMED

DATE OF JUDGMENT ENTRY:                                    May 16, 2014

APPEARANCES:

For Plaintiff-Appellee:                                    For Defendant-Appellant:

MIKE L. WIERY                                              BRIAN K. DUNCAN
RACHEL M. KUHN                                             BRYAN D. THOMAS
30455 Solon Road                                           600 South High Street, Suite 100
Solon, OH 44139                                            Columbus, OH 43215
Delaware County, Case No. 13 CAE 10 0076                                                   2

Delaney, J.

       {¶1} Defendant-Appellant Eula M. Littlejohn appeals the October 10, 2013

judgment entry of the Delaware County Court of Common Pleas.

                        FACTS AND PROCEDURAL HISTORY

       {¶2} On February 7, 2005, Defendant-Appellant Eula M. Littlejohn and

Defendant Ronnie C. Frazier executed an adjustable rate note in favor of Accredited

Home Lenders, Inc. As security for the note, Littlejohn and Frazier executed a mortgage

granting first and best lien on the property located in Delaware County to Mortgage

Electronic Registration Systems, Inc. (“MERS”) as nominee for Accredited Home

Lenders, Inc. The mortgage was recorded on March 10, 2005. The note was endorsed

in blank.

       {¶3} On April 4, 2012, MERS assigned the mortgage to Plaintiff-Appellee

HSBC Mortgage Services, Inc. The assignment of the mortgage was recorded on April

9, 2012.

       {¶4} Littlejohn and Frazier defaulted under the terms of the note on June 1,

2012. On July 30, 2012, HSBC Mortgage caused a Notice of Right to Cure Default to be

sent to Littlejohn and Frazier at the mortgage property address.

       {¶5} On October 26, 2012, HSBC Mortgage filed a complaint in foreclosure.

Littlejohn and Frazier filed answers to the complaint.

       {¶6} On August 28, 2013, HSBC Mortgage moved for summary judgment. In

support of its motion for summary judgment, HSBC Mortgage submitted the affidavit of

Heather Burgos, vice-president and assistant secretary of the HSBC Mortgage

Administrative Services Division. Attached to the affidavit were copies of the notice of
Delaware County, Case No. 13 CAE 10 0076                                                     3

default/acceleration, the note, the mortgage, and a copy of the payment history of

Littlejohn and Frazier. Littlejohn filed a response to the motion for summary judgment

but failed to attach any affidavit or present any evidence to the trial court for any

defense or counterclaim. Frazier did not respond to the motion for summary judgment.

      {¶7} The trial court granted the motion for summary judgment and decree in

foreclosure in favor of HSBC Mortgage on October 10, 2013.

      {¶8} It is from this decision Littlejohn now appeals.

                             ASSIGNMENTS OF ERROR

      {¶9} Littlejohn raises one Assignment of Error:

      {¶10} “THE TRIAL COURT ABUSED ITS DISCRETION BY GRANTING

PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT BECAUSE THERE WERE

GENUINE ISSUES OF MATERIAL FACT AND PLAINTIFF WAS NOT ENTITLED TO

JUDGMENT AS A MATTER OF LAW.”

                                      ANALYSIS

      {¶11} Littlejohn’s sole Assignment of Error states the trial court erred in granting

summary judgment in favor of HSBC Mortgage. We refer to Civ.R. 56(C) when

reviewing a motion for summary judgment which provides, in pertinent part:

      Summary judgment shall be rendered forthwith if the pleading,

      depositions, answers to interrogatories, written admissions, affidavits,

      transcripts of evidence in the pending case 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. * * * A summary judgment shall not be rendered unless it
Delaware County, Case No. 13 CAE 10 0076                                                           4

       appears from such evidence or stipulation and only from the evidence or

       stipulation, that reasonable minds can come to but one conclusion and

       that conclusion is adverse to the party against whom the motion for

       summary judgment is made, such party being entitled to have the

       evidence or stipulation construed most strongly in the party's favor.

       {¶12} The moving party bears the initial responsibility of informing the trial court

of the basis for the motion, and identifying those portions of the record before the trial

court, which demonstrate the absence of a genuine issue of fact on a material element

of the nonmoving party's claim. Dresher v. Burt, 75 Ohio St. 3d 280, 292, 662 N.E.2d
264 (1996). The nonmoving party then has a reciprocal burden of specificity and cannot

rest on the allegations or denials in the pleadings, but must set forth “specific facts” by

the means listed in Civ.R. 56(C) showing that a “triable issue of fact” exists. Mitseff v.

Wheeler, 38 Ohio St. 3d 112, 115, 526 N.E.2d 798, 801 (1988).

       {¶13} Pursuant to the above rule, a trial court may not enter summary judgment

if it appears a material fact is genuinely disputed. Vahila v. Hall, 77 Ohio St. 3d 421, 429,

674 N.E.2d 1164 (1997), citing Dresher v. Burt, 75 Ohio St. 3d 280, 662 N.E.2d 264

(1996).

       {¶14} Littlejohn contends there is a genuine issue of material fact as to whether

HSBC Mortgage is the holder in due course, whether HSBC assumed the risk of

Littlejohn’s default when it was assigned the mortgage, and whether HSBC Mortgage

sent Littlejohn the notice of default/acceleration prior to filing its complaint in foreclosure.
Delaware County, Case No. 13 CAE 10 0076                                                        5

                                   Holder in Due Course

       {¶15} Littlejohn argues there is a genuine issue of material fact whether HSBC

Mortgage is a holder in due course of the note. Pursuant to R.C. 1303.31, a plaintiff

producing an instrument is entitled to payment if the plaintiff proves that it is entitled to

enforce the instrument pursuant to R.C. 1303.31. HSBC Mortgage is entitled to enforce

an instrument under R.C. 1303.31 because there is no genuine issue of material fact

that it is the holder of the note. R.C. 1303.32 governs holder in due course. Bank of

New York Mellon v. Casey, 5th Dist. Fairfield No. 13-CA-26, 2013-Ohio-4686, ¶ 19.

Subsection (A) states the following:

       (A) Subject to division (C) of this section and division (D) of section

       1303.05 of the Revised Code, “holder in due course” means the holder of

       an instrument if both of the following apply:

       (1) The instrument when issued or negotiated to the holder does not bear

       evidence of forgery or alteration that is so apparent, or is not otherwise so

       irregular or incomplete as to call into question its authenticity;

       (2) The holder took the instrument under all of the following

       circumstances:

              (a) For value;

              (b) In good faith;

              (c) Without notice that the instrument is overdue or has been

       dishonored or that there is an uncured default with respect to payment of

       another instrument issued as part of the same series;
Delaware County, Case No. 13 CAE 10 0076                                                     6

               (d) Without notice that the instrument contains an unauthorized

       signature or has been altered;

               (e) Without notice of any claim to the instrument as described in

       section 1303.36 of the Revised Code;

               (f) Without notice that any party has a defense or claim in

       recoupment described in division (A) of section 1303.35 of the Revised

       Code.

       {¶16} HSBC Mortgage submitted an affidavit with the note attached in support of

its motion for summary judgment. The affidavit states that HSBC Mortgage is in

possession of the original note, which is endorsed in blank. Once the moving party

meets its initial burden to show there absence of a genuine issue of material fact, the

nonmoving party may not rest on the mere allegations of the pleading, but must set forth

specific facts, by affidavit or otherwise, demonstrating there is a genuine triable issue.

CitiMtge., Inc. v. Bennett, 10th Dist. Franklin No. 13AP-228, 2013-Ohio-4062, ¶ 9 citing

Jackson v. Alert Fire & Safety Equip., Inc., 58 Ohio St. 3d 48, 52, 567 N.E.2d 1027

(1991). Littlejohn, as the nonmoving party, has not produced competent evidence

showing there is a genuine issue of material fact for trial. HSBC Mortgage is the holder

of the note and entitled to enforce the same.

                            Assumption of the Risk Doctrine

       {¶17} Littlejohn next argues that HSBC Mortgage assumed the risk of Littlejohn’s

default when it was assigned the note and mortgage. The Third District Court of

Appeals has rejected the argument that the assumption the risk doctrine may apply to a

foreclosure action:
Delaware County, Case No. 13 CAE 10 0076                                                      7

                Next, the Richisons contend that there is a genuine issue of

          material fact as to whether the assumption of risk doctrine applies in a

          foreclosure action. We disagree.

                Determining whether the assumption of risk doctrine applies in a

          foreclosure action is an issue of law. The Richisons fail to cite any

          authority applying the assumption of risk doctrine in a foreclosure action,

          and a review of Ohio case law yields no support for this assertion.

          Because the Richisons fail to support their argument with authority as

          required by App.R. 16(A)(7), we decline to address it. App.R. 12(A)(2). We

          summarily note, however, that the assumption of the risk doctrine is

          primarily, if not exclusively, a defense against a claim of negligence.

          Therefore, we find that without authority in support of their argument, the

          assumption of the risk doctrine is not a defense in a foreclosure action.

Flagstar Bank, F.S.B. v. Richison, 3rd Dist. Union No. 14-12-01, 2012-Ohio-3198, ¶ 17-

18.

          {¶18} In the present case, Littlejohn fails to cite to any authority applying the

assumption of the risk doctrine to a foreclosure action. We agree that the assumption of

the risk doctrine is relevant to a negligence action, not to the defense of a foreclosure

action.

                               Notice of Default or Acceleration

          {¶19} Littlejohn argues that HSBC Mortgage failed to provide Littlejohn with

notice of acceleration of the loan pursuant to her default of the terms of the loan. It has

been held that a term in a mortgage such as one requiring prior notice of a default or
Delaware County, Case No. 13 CAE 10 0076                                                      8

acceleration to the mortgagor is not an affirmative defense but rather a condition

precedent. U.S. Bank, N.A. v. Detweiler, 191 Ohio App. 3d 464, 2010–Ohio–6408, 946
N.E.2d 777, ¶ 52 (5th Dist.) citing LaSalle Bank v. Kelly, 9th Dist. Medina. No.

09CA0067–M, 2010–Ohio–2668, ¶ 13. To prevail in a foreclosure action, the plaintiff

must establish that it complied with conditions precedent under the note and mortgage.

Wachovia Bank of Delaware, N.A. v. Jackson, 5th Dist. Stark No.2010–CA–00291,

2011–Ohio–3202, ¶ 43.

       {¶20} HSBC Mortgage submitted an affidavit in support of its motion for

summary judgment. Attached to the affidavit was a copy of the notice of

default/acceleration letter sent to Littlejohn at the mortgage property address on July 30,

2012. The letter notifies Littlejohn the loan is in default and HSBC Mortgage intends to

declare the loan past due and payable immediately.

       {¶21} In Littlejohn’s response to the motion for summary judgment, she did not

set forth specific facts, by affidavit or otherwise, demonstrating that there is a genuine

issue of material fact as to the notice of default/acceleration.

       {¶22} Upon our de novo review, we find HSBC was entitled to judgment as a

matter of law.

       {¶23} The Assignment of Error of Defendant-Appellant Eula M. Littlejohn is

overruled.
Delaware County, Case No. 13 CAE 10 0076                                             9

                                 CONCLUSION

      {¶24} The judgment of the Delaware County Court of Common Pleas is affirmed.

By: Delaney, J.,

Hoffman, P.J. and

Farmer, J., concur.