U.S. Bank Nat'l Ass'n v. Clarke

234 N.E.3d 1156

2024-Ohio-278

U.S. BANK NATIONAL ASSOCIATION not in Its Individual Capacity but Solely as Trustee for the NRZ Pass-Through Trust VIII, Appellees

v.Elizabeth M. CLARKE, aka Marion E. Clarke, aka M. Elizabeth Clarke, et al., Appellant

C.A. No. 2023-CA-29

Court of Appeals of Ohio, Second District, Greene County.

Rendered on January 26, 2024

(Civil Appeal from Common Pleas Court), Trial Court Case No. 2021 CV 0161.

TIMOTHY J. COOK, Columbus, BRIAN A. BROWN, Dublin, & SEAN M. KOHL, Attorneys for Appellants.

MATTHEW J. RICHARDSON, Attorney for Appellee.

OPINION

LEWIS, J.

{¶ 1} Defendant-Appellant Elizabeth M. Clarke appeals from the April 23, 2023 judgment of the Greene County Court of Common Pleas overruling her motion for summary judgment and granting the motion for summary judgment of Plaintiff-Appellee U.S. Bank National Association, not in its individual capacity but solely as trustee for the NRZ Pass-Through Trust VIII ("U.S. Bank"). For the reasons that follow, we will reverse the judgment of the trial court and remand for further proceedings consistent with this opinion.

I. Facts and Course of Proceedings

{¶ 2} In August 1977, Clarke and her husband acquired title to 1161 Sugarhill Lane in Xenia via warranty deed. Clarke’s husband died on October 3, 1992. The Greene County Probate Court issued a certificate of transfer of her husband’s undivided one-half interest in the property to Clarke in August 1995.

{¶ 3} On October 26, 2004, Clarke executed a note in the principal amount of $222,000 with Wilmington Finance, a division of AIG Federal Savings Bank. The note contained an allonge, which endorsed the note to Popular Financial Services, L.L.C. There also was a blank endorsement on the note from Popular Financial Services, L.L.C. Clarke also executed a mortgage on October 26, 2004, which granted Wilmington Finance a security interest in the property. On November 1, 2004, the mortgage was assigned to Mortgage Electronic Registration Systems, Inc., which then assigned the mortgage to Bank of New York Mellon, f/k/a The Bank of New York ("BONY") on March 13, 2009.

{¶ 4} On November 6, 2014, a notice of default letter was sent to Clarke due to her failure to make timely payments under the note and mortgage. On June 12, 2015, BONY filed a complaint for foreclosure against Clarke in the Greene County Common Pleas Court (Case No. 2015-CV-405). After Clarke filed her answer, the parties participated in mediation and filed respective motions for summary judgment. With leave of court, BONY filed an amended complaint. The parties conducted discovery and filed additional pleadings and motions. Following additional mediation, the parties appeared to settle their dispute by entering into a settlement agreement. On December 1, 2017, the trial court issued a judgment entry stating that the case would be dismissed on January 5, 2018, pursuant to a settlement agreement if the parties did not submit a dismissal entry before that date.

{¶ 5} BONY and Clarke subsequently filed two agreed motions for an extension of time in which to file the dismissal entry contemplated by the trial court’s December 1, 2017 entry. But the parties did not file the dismissal entry. Instead, on March 2, 2018, BONY filed a motion to enforce the settlement agreement or to return the matter to the active trial docket. On July 9, 2018, the magistrate issued a decision resolving BONY’s motion. The magistrate noted that the parties had entered into an agreement in principle around November 21, 2017, that provided for the following: Clarke would pay $75,000 to fully satisfy the loan obligation; BONY would release its mortgage; BONY would pay all costs of the action; Clarke would fully cooperate in the execution of documents; and the parties would dismiss their pending claims with prejudice. A dispute had arisen between the parties regarding potential tax liability resulting from debt forgiveness, but the magistrate found that this dispute did not involve an essential term of the settlement agreement and granted BONY’s motion to enforce the settlement agreement. Clarke filed objections to the magistrate’s decision.

{¶ 6} On October 8, 2018, the trial court overruled the objections and ordered the parties to submit a dismissal entry within 14 days of the decision. On November 26, 2018, the trial court issued a judgment entry that stated, in part: "The Court, having adopted the Magistrate’s Decision * * * and further holding that the parties’ previously submitted settlement agreement is valid and enforceable, the Court hereby orders the parties to finalize and carry out all remaining terms of the settlement agreement. This matter is dismissed without prejudice. The Court shall retain jurisdiction to enforce the settlement agreement in this matter."

{¶ 7} On January 25, 2019, a motion was filed to clarify the trial court’s October 8, 2018 order. On April 12, 2019, Clarke filed a response to the motion in which she stated "that she is unable to obtain the $75,000 payment amount required of her in the Settlement agreement and is therefore unwilling to proceed with any stipulated Settlement at this time." On June 17, 2019, BONY filed a motion to reactivate the case in which it asked the trial court to vacate the dismissal entered on November 26, 2018. According to BONY, "[b]ecause the settlement agreement is now rescinded, Plaintiff wishes to proceed with its claims for foreclosure of the property." On July 30, 2019, the trial court issued an entry and order setting aside the November 26, 2018 dismissal entry and reactivating the case. On March 31, 2020, BONY dismissed the case without prejudice pursuant to Civ.R. 41(A)(1)(b).

{¶ 8} On July 1, 2020, BONY assigned the mortgage to U.S. Bank. On February 23, 2021, U.S. Bank assigned the mortgage to U.S. Bank National Association, not in its individual capacity but solely as Owner Trustee of New Residential Mortgage Loan Trust 2020-NPL2.

{¶ 9} On April 1, 2021, U.S. Bank Trust National Association, not in its individual capacity but solely as Owner Trustee of New Residential Mortgage Loan Trust 2020-NPL2, filed a complaint for foreclosure against Clarke in the Greene County Court of Common Pleas (Case No. 2021-CV-161). After receiving leave of court, it then filed an amended complaint. On February 7, 2023 U.S. Bank National Association, not in its individual capacity but solely as Owner Trustee of New Residential Mortgage Loan Trust 2020-NPL2, transferred the mortgage back to U.S. Bank. On March 1, 2023, the trial court substituted U.S. Bank as the plaintiff in the foreclosure action against Clarke.

{¶ 10} On March 8, 2023, Clarke filed a motion to enforce the settlement agreement and for summary judgment. According to Clarke, the trial court’s October 8, 2018 order in the first foreclosure case filed by BONY had been a final, appealable order from which no party appealed and which the trial court had never vacated. Therefore, in Clarke’s view, both parties were required to comply with that order and perform under the settlement agreement. Clarke stated she was prepared at that time to make the payment contemplated by the settlement agreement and that the trial court should enforce that agreement.

{¶ 11} On March 8, 2023, U.S. Bank also filed a motion for summary judgment requesting a decree of foreclosure as to the entire fee simple interest in the property subject to the note and mortgage. Attached to U.S. Bank’s motion was the affidavit of Janet Gioello, who authenticated copies of the note, mortgage, assignments of the mortgage, the demand letter sent on behalf of BONY, and Clarke’s payment history.

{¶ 12} On April 26, 2023, the trial court overruled Clarke’s motion and granted U.S. Bank’s motion for summary judgment. Clarke filed a timely notice of appeal.

II. U.S. Bank Failed to Satisfy All Conditions Precedent

{¶ 13} For purposes of clarity and convenience, we will address Clarke’s third assignment of error first. Clarke’s third assignment of error states:

The Trial Court erred in holding that U.S. Bank is entitled to foreclosure when it failed to perform the conditions precedent.

{¶ 14} "We review decisions granting summary judgment de novo, which means that we apply the same standards as the trial court." (Citations omitted.) GNFH, Inc. v. W. Am. Ins. Co., 172 Ohio App.3d 127, 2007-Ohio-2722, 873 N.E.2d 345, ¶ 16 (2d Dist.). Under Civ.R. 56, summary judgment is appropriate when (1) no genuine issue as to any material fact exists, (2) the party moving for summary judgment 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 reach only one conclusion that is adverse to the nonmoving party. On a motion for summary judgment, the moving party carries an initial burden of identifying specific facts in the record that demonstrate its entitlement to summary judgment. Dresher v. Burt, 75 Ohio St.3d 280, 292-293, 662 N.E.2d 264 (1996). If the moving party fails to meet this burden, summary judgment is not appropriate; if the moving party meets this burden, the nonmoving party has the reciprocal burden to point to evidence of specific facts in the record demonstrating the existence of a genuine issue of material fact for trial. Id. at 293, 662 N.E.2d 264. Summary judgment is appropriate if the nonmoving party fails to meet this burden. Id.

[1] {¶ 15} " ‘To properly 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 the instrument; (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.’ " (Citations omitted.) JP Morgan Chase Bank, N.A. v. Massey, 2d Dist. Montgomery No. 25459, 2013-Ohio-5620, 2013...