Nationstar Mortg. LLC v. Cody

2020 Ohio 5553

Nationstar Mortgage LLC, d/b/a Champion Mortgage of Ohio, et al. Appellees v. F. Kevin Cody, Individually and as Executor of the Estate of Clement J. Cody, et al. Appellants

Court of Appeals No. OT-18-041

COURT OF APPEALS OF OHIO SIXTH APPELLATE DISTRICT OTTAWA COUNTY

December 4, 2020

Trial Court No. 13CV446E

DECISION AND JUDGMENT

Michael J. Sikora III, Alexander E. Goetsch and Richard T. Craven, for appellee Nationstar Mortgage LLC.

Eric T. Deighton, for appellee Generation Mortgage Co.

Joseph B. Jerome and John D. Grauer, for appellants.

SINGER, J.

{¶ 1} Appellants Kevin Cody, individually and as executor of the Estate of Clement J. Cody, Colleen Michelle Clark, and Rick Clark ("appellants") appeal the July 26, 2018 decision of the Ottawa County Court of Common Pleas which granted appellees Nationstar Mortgage LLC ("Nationstar") and Generation Mortgage Co. ("Generation") summary judgment.

{¶ 2} Appellants bring forth five assignments of error for our review:

1. The Trial Court erred as a matter of law when it granted judgment in favor of Plaintiff-Appellee Nationstar on its Motion for Summary Judgment despite the existence of genuine issues of material fact.

2. The Trial Court erred as a matter of law when it granted judgment in favor of New Part Defendant-Appellee Generation Mortgage on its Motion for Summary Judgment despite the existence of genuine issues of material fact.

3. The Trial Court's (sic) erred as a matter of law in finding that the sum of $703,201.45 is due and owing under the mortgage loan agreement and note despite the existence of genuine issues of material fact.

4. The Trial Court abused its discretion by finding that the sum of $703,201.45 is due and owing under the mortgage loan agreement and note because it did not hold a hearing on the issue of damages before it entered its Order of Foreclosure in favor of Plaintiff-Appellee Nationstar.

5. The Trial Court abused its discretion by finding that the equity of redemption of all Defendants shall be foreclosed prior to the confirmation of sale in violation of Ohio Rev. C. 2329.33. (sic).

{¶ 3} In January 2008, Clement Cody purchased two parcels on Put-In-Bay Island for $875,000. One of these parcels contained a home, one parcel contained a concrete dock, and a garage sat partially on each parcel. On August 23, 2010, Clement Cody entered into a home equity loan Agreement, note, and mortgage (collectively "mortgage agreement"). The mortgage agreement was a reverse mortgage whereby Clement Cody received $938,250 in return for encumbering his property which would be payable upon Clement Cody's death. The property served as a vacation home for Clement Cody and his family.

{¶ 4} In the process of obtaining the mortgage agreement, appellee Generation completed an appraisal of the property. This appraisal considered the value of the home, garage, and concrete dock when determining the value of the mortgage. The appraisal only references the street address of the home, rather than the address of the vacant address, 0 Toledo Avenue.

{¶ 5} On December 5, 2013, appellee Generation Mortgage Company ("Generation") filed a complaint for foreclosure alleging Clement Cody defaulted on the mortgage agreement. Clement Cody passed away on October 12, 2012, and the loan was not paid off.

{¶ 6} Clement Cody's son, appellant Kevin Cody, periodically occupied the vacation home during the summer months. The home is located on an island in Lake Erie and is difficult to reach during the winter months. Generation became aware that there would be no one occupying the home from November 2014 through March 2015;Generation sent an agent to winterize the home and secure it. The home was winterized and secured in April of 2015. The mortgage agreement authorized "reasonable action to protect and preserve the Property" as long as the borrower defaulted, the property was vacated, or the property was abandoned.

{¶ 7} On May 18, 2015, the underlying mortgage was assigned from Generation to Nationstar. Nationstar was substituted as plaintiff in the foreclosure matter and Nationstar continued to pursue the foreclosure.

{¶ 8} On April 28, 2017, appellants filed a new amended answer and filed a third-party complaint against Generation for trespass and conversion based on its actions to secure the property. The trial court denied Generation's motion to dismiss the complaint and Generation answered the new complaint.

{¶ 9} On April 4, 2018, Generation filed a motion for summary judgment regarding the new complaint and its claims against Generation. Following an opposition that was filed by appellants, the trial court granted the motion for summary judgment. The trial court found that Clement Cody passed away on October 12, 2012, his death caused a default in the mortgage agreement, and that upon that default, Generation was contractually entitled to enter the home and winterize it.

{¶ 10} On March 15, 2018, Nationstar filed a motion for summary judgment on its foreclosure claim. The trial court granted Nationstar's motion for summary judgment on July 26, 2018, and it found that Clement Cody passed away on October 12, 2012, that hisdeath resulted in a default under the note and mortgage, and that the note and mortgage were not ambiguous.

Assignment of Error One: The Trial Court Erred when itGranted Summary Judgment on the Claims of Nationstar

{¶ 11} Appellants argue that the trial court erred when it granted summary judgment to Nationstar on its complaint in foreclosure because appellants presented evidence which created issues of material fact about whether the mortgage agreement was valid. Appellants argue that there were genuine issues of material fact surrounding whether the mortgage encumbered both parcels, rather than just the parcel with the home. Appellants argue that Clement Cody did not intend to encumber both parcels and informed his family as such. They also argue that the failure of the appraisal report to include addresses for both parcels also indicated that the parties only intended to include the parcel with the home on it. Appellants argue the trial court erred when it failed to take this into consideration when determining whether summary judgment for Nationstar was appropriate.

{¶ 12} Nationstar responds by arguing that there were no genuine issues of material fact that the mortgage agreement was valid because the legal description attached to the mortgage agreement clearly includes both the parcel with the home and the vacant lot. Nationstar also argues that the trial court did not err in failing to consider parol evidence because appellants failed to present clear and convincing evidence demonstrating a mutual mistake between the parties. Nationstar argues that the intent ofthe parties to include both parcels was evidenced also by the inspection report generated when determining the value of the parcels, because it mentions a garage which is mostly located on the vacant parcel and a cement dock which is entirely located on the vacant parcel. Nationstar further argues that the section cited by appellants does not prohibit mortgages on vacant parcels when it is included with an eligible property. Finally, Nationstar argues that appellants improperly attempted to reform the mortgage through an affirmative defense.

{¶ 13} An appellate court reviews a trial court's summary judgment decision de novo. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996). Summary judgment will be granted when no genuine issues of material fact exist when after, construing all the evidence in favor of the nonmoving party, reasonable minds can only conclude that the moving party is entitled to judgment as a matter of law. Civ.R. 56(C). Accord Lopez v. Home Depot, USA, Inc., 6th Dist. Lucas No. L-02-1248, 2003-Ohio-2132, ¶ 7. When a properly supported motion for summary judgment is made, an adverse party may not rest on mere allegations or denials in the pleading, but must respond with specific facts showing there is a genuine issue of material fact. Civ.R. 56(E); Riley v. Montgomery, 11 Ohio St.3d 75, 79, 463 N.E.2d 1246 (1984).

{¶ 14} A de novo review requires an independent review of the trial court's decision without any deference to the trial court's determination. Grafton at 105. A trial court shall grant summary judgment only where: (1) no genuine issue of material fact remains to be litigated; (2) the moving party is entitled to judgment as a matter of law;and (3) viewing the evidence most strongly in favor of the nonmoving party, reasonable minds can come to but one conclusion and that conclusion is adverse to the nonmoving party. Civ.R. 56(C); Harless v. Willis Day Warehousing Co., 54 Ohio St.2d 64, 65-66, 375 N.E.2d 46 (1978).

Intention of Clement Cody and Use of Parol Evidence

{¶ 15} Appellants argued and testified at deposition that their father never intended to encumber both parcels rather than just the parcel with the home on it. Both Kevin Cody and Colleen Michelle Clark, Clement Cody's children, testified at their depositions that their father informed them that the reverse mortgage would only encumber the house and not the vacant parcel. They also contend that the lender did not intend to encumber both properties because the mortgage documents and appraisal report only list the address of the home and not the address of the vacant lot. Appellants argue that because the legal description was attached to the mortgage agreement, rather than being included in the mortgage agreement, the legal description was not integrated into the mortgage agreement and cannot be used to encumber both parcels.

{¶ 16} The construction of a written agreement is a matter of law for the court. Alexander v. Buckeye Pipe Line Co., 53 Ohio St.2d 241, 374 N.E.2d 146 (1976), paragraph one of the syllabus. The court presumes the intent of the parties is reflected in the language of the contract and the court must examine the contract as a whole. Kelly v. Med. Life Ins. Co., 31...