[Cite as Fed. Natl. Mtge. Assn. v. DeMartin, 2019-Ohio-2136.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
Federal National Mortgage :
Association et al.,
:
Plaintiffs-Appellees,
: No. 18AP-221
v. (C.P.C. No. 17CV-8487)
:
Joan DeMartin, (REGULAR CALENDAR)
:
Defendant-Appellant.
:
D E C I S I O N
Rendered on May 30, 2019
On brief: Reimer Law Co., Mike L. Wiery, and Katherine D.
Carpenter, for appellees. Argued: Mike L. Wiery.
On brief: Joan DeMartin, pro se. Argued: Joan DeMartin.
ON APPEAL from the Franklin County Court of Common Pleas
McGRATH, J.
{¶ 1} Defendant-appellant, Joan DeMartin, appeals from a judgment of the
Franklin County Court of Common Pleas granting the motion for summary judgment of
plaintiff-appellee, Federal National Mortgage Association ("Fannie Mae"). For the
following reasons, we affirm the trial court judgment.
I. Facts and Procedural History
{¶ 2} On July 16, 2008, appellant borrowed $298,595 from JPMorgan Chase
Bank, N.A., ("Morgan Chase") and signed a note in which she agreed to repay the loan.
The note was secured by a mortgage on the property located at 834 South Lazelle Street in
Columbus. The loan was subsequently modified several times, resulting in a new balance
of $334,909.97, plus interest at 2 percent per annum from April 1, 2017, plus a deferred
principal in the amount of $23,000, plus advances for taxes and insurance. (Gauthier Aff.
No. 18AP-221 2
at ¶ 8.) On September 8, 2016, Morgan Chase assigned the mortgage to appellee. The
servicing of the mortgage loan was transferred from Morgan Chase to Seterus, Inc.
("Seterus"), effective July 1, 2016.
{¶ 3} On September 20, 2017, appellee filed a complaint for foreclosure
contending that appellant was in default under the terms of the note and mortgage.
Appellant had not cured the default and appellee had accelerated the remaining amount
due. On November 28, 2017, appellee filed a motion for summary judgment. Appellant
filed a response. The trial court granted the motion for summary judgment on
February 23, 2018, ordering foreclosure and authorizing the sale of the property.
{¶ 4} Appellant filed a Chapter 7 bankruptcy proceeding on May 3, 2018. The
proceedings were stayed until this court was notified on September 18, 2018 that
appellant's bankruptcy had been discharged.
II. Assignments of Error
{¶ 5} Appellant filed a timely notice of appeal and raised the following
assignments of error for our review:
1. The trial court erred by granting summary judgment
because of the existence of disputed material facts;
specifically the existence of a pending loss mitigation
application, which would preclude foreclosure as a matter of
law, pursuant to CFR 1024.41, and which federal regulation
overrides state law principles according to Article VI of the
U.S. Constitution and the Pre-emption doctrine.
2. The trial court erred in granting summary judgment
despite the existence of disputed material facts; specifically,
the identity of the correct owner of the mortgage loan.
3. The trial court erred by not requiring Appellee to join all
necessary parties to the instant case; specifically J.P. Morgan
Chase Bank.
III. Standard of Review
{¶ 6} The trial court granted appellee's motion for summary judgment pursuant
to Civ.R. 56(C), which requires that:
Summary judgment shall be rendered forthwith if the
pleadings, depositions, answers to interrogatories, written
admissions, affidavits, transcripts of evidence, and written
No. 18AP-221 3
stipulations of fact, if any, timely filed in the action, show
that there is no genuine issue as to any material facts and
that the moving party is entitled to judgment as a matter of
law.
{¶ 7} In Rose v. Ohio Dept. of Rehab. & Corr., 173 Ohio App.3d 767, 2007-Ohio-
6184, ¶ 18 (10th Dist.), this court described its role in reviewing motions for summary
judgment decided by trial court:
Appellate review of summary judgment motions is de novo.
Helton v. Scioto County Bd. of Commrs. (1997), 123 Ohio
App.3d 158, 162, 703 N.E.2d 841. When reviewing a trial
court's decision granting summary judgment, we conduct an
independent review of the record, and the appellate court
"stands in the shoes of the trial court." Mergenthal v. Star
Banc Corp. (1997), 122 Ohio App.3d 100, 103, 701 N.E.2d
383.
{¶ 8} When reviewing an appeal of a judgment granting a motion for summary
judgment, this court uses the same standard as the trial court. Freeman v. Brooks, 154
Ohio App.3d 371, 2003-Ohio-4814, ¶ 6 (10th Dist.), citing Maust v. Bank One Columbus,
N.A., 83 Ohio App.3d 103, 107 (10th Dist.1992). To prevail on a motion for summary
judgment, the moving party must demonstrate that, when the evidence is construed most
strongly in favor of the nonmoving party, no genuine issue of material fact remains to be
litigated and that the moving party is entitled to judgment as a matter of law. Civ.R.
56(C); Harless v. Willis Day Warehousing Co., 54 Ohio St.2d 64 (1978). "Unsupported
allegations in the pleadings do not suffice to necessitate the denial of a summary
judgment." Harless. A genuine issue of material fact exists unless it is clear that
reasonable minds can come to but one conclusion and that conclusion is adverse to the
nonmoving party. Williams v. First United Church of Christ, 37 Ohio St.2d 150, 151
(1974). Summary judgment is a procedural device to terminate litigation, so it must be
awarded cautiously, with any doubts resolved in favor of the nonmoving party. Murphy v.
Reynoldsburg, 65 Ohio St.3d 356, 358-59 (1992).
{¶ 9} A party seeking summary judgment for the reason that a nonmoving party
cannot prove its case bears the initial burden of informing the trial court of the basis for
the motion and it must identify those parts of the record that demonstrate the absence of
No. 18AP-221 4
a genuine issue of material fact on the elements of the nonmoving party's claims. Dresher
v. Burt, 75 Ohio St.3d 280, 292-93 (1996). The moving party does not discharge this
initial burden under Civ.R. 56 by simply making a conclusory allegation that the
nonmoving party has no evidence to support its claims. Id. Rather, the moving party must
affirmatively demonstrate by affidavit or other evidence allowed by Civ.R. 56(C) that the
nonmoving party has no evidence to support its claims. Id. If the moving party satisfies its
initial burden, then the burden shifts to the nonmoving party to set forth specific facts
showing there is a genuine issue for trial. Civ.R. 56(E); Dresher at 293. The nonmoving
party may not rest on the mere allegations or denials of its pleadings, but must respond
with specific facts showing there is a genuine issue for trial. Civ.R. 56(E); Dresher at 293.
If the nonmoving party does not so respond, summary judgment, if appropriate, shall be
entered against the nonmoving party. Id.
IV. Law and Discussion
{¶ 10} In her first assignment of error, appellant contends that the trial court erred
by granting appellee's summary judgment motion because of the existence of a pending
loss mitigation application which would preclude a foreclosure as a matter of law.
Appellant contends that since appellee had received a complete loss mitigation
application from appellant, appellee had an affirmative duty to refrain from moving
forward with a foreclosure sale.
{¶ 11} 12 C.F.R. 1024.41(g) provides that if a borrower submits a complete loss
mitigation application after a servicer has made the first notice or filing for foreclosure but
more than 37 days before a foreclosure sale, a servicer shall not move for foreclosure
judgment or order of sale or conduct a foreclosure sale, unless (1) the servicer informed
the borrower that the borrower is not eligible for any loss mitigation option, (2) the
borrower rejects all loss mitigation options, (3) the borrower fails to perform under an
agreement on a loss mitigation option. Thus, 12 C.F.R. 1024.41(g) prohibits a loan
servicer from moving for judgment or a foreclosure sale when a complete loss mitigation
application is received more than 37 days before a foreclosure sale. Attached to
appellant's brief are correspondence from Seterus to appellant. On February 13, 2018,
Seterus denied appellant's loss mitigation application. The trial court granted appellee's
No. 18AP-221 5
motion for summary judgment on February 23, 2018. All other correspondence is dated
after the trial court's judgment.1
{¶ 12} All of the letters attached to appellant's brief to this court as Appendix A
were not before the trial court. Most of the correspondence is dated after the trial court's
judgment and it indicates that Seterus denied her application. In fact, appellant attached
no Civ.R. 56 materials to her response to appellee's motion for summary judgment. None
of the documents that appellant attached to her brief to this court and argues are relevant
were before the trial court and are not part of the trial court record. An appellate court
cannot consider items not properly made a part of the record. App.R. 9; Wassenaar v.
Ohio Dept. of Rehab. & Corr., 10th Dist. No. 07AP-712, 2008-Ohio-1220, ¶ 20. Further,
the loss mitigation application had been denied at the time of the trial court judgment.
{¶ 13} In her answer, appellant stated, "Plaintiff has failed to provide Defendant
mediation or counseling or other mandatory services before filing this action." (Answer at
¶ 6.) Civ.R. 9(C) provides:
In pleading the performance or occurrence of conditions
precedent, it is sufficient to aver generally that all conditions
precedent have been performed or have occurred. A denial
of performance or occurrence shall be made specifically and
with particularity.
{¶ 14} "The effect of the failure to deny conditions precedent in the manner
provided by Civ.R. 9(C) is that they are deemed admitted." Triangle Props. v. Homewood
Corp., 10th Dist. No. 12AP-933, 2013-Ohio-3926, ¶ 71, quoting R.S. Fling & Partners, Inc.
v. Cent. Natl. Bank, 10th Dist. No. 77AP-605 (Dec. 6, 1977). Appellant was required to
provide in her answer that appellee did not comply with conditions precedent with
specificity and particularity. "A general denial of performance of conditions precedent is
not sufficient to place performance of a condition precedent in issue." Lewis v. Wal-
Mart, Inc., 10th Dist. No. 93AP-121 (Aug. 12, 1993).
{¶ 15} Further, as noted by the trial court, absent a provision within the note or
mortgage, appellee was not required to negotiate with appellant for a loan modification
1 During oral argument to this court, appellant argued that she received an extension of time to submit more
documents in support of her application but the correspondence demonstrates that appellant's application
was again denied on April 5, 2018 and her appeal was denied on April 13, 2018.
No. 18AP-221 6
and a lender's decision " 'to enforce the written agreements cannot be considered an act of
bad faith.' " U.S. Bank, N.A. v. Bryant, 12th Dist. No. CA2012-12-266, 2013-Ohio-3993,
¶ 13, quoting Ed Schory & Sons, Inc. v. Soc. Natl. Bank, 75 Ohio St.3d 433, 443 (1996).
Accordingly, appellant did not meet her Civ.R. 56 burden of setting forth specific facts
showing there is a genuine issue of material fact for trial. Thus, appellant's first
assignment of error is overruled.
{¶ 16} By her second assignment of error, appellant contends that the trial court
erred in granting appellee's motion for summary judgment because there was a question
regarding the identity of the correct owner of the mortgage loan. Appellant argues that
both appellee and Morgan Chase claim an ownership right to the loan, along with Fannie
Mae. Appellant contends that Morgan Chase claimed an ownership interest in the loan by
filing a post-bankruptcy legal claim with TransUnion Credit Reporting Agency.
{¶ 17} While appellant did argue to the trial court that a genuine issue of material
fact existed regarding the ownership of the loan, appellant did not provide any Civ.R. 56
materials in support of her argument. In fact, the materials she attached to her brief in
this court are not dated post-bankruptcy.
{¶ 18} Appellee attached to the complaint a copy of the note and mortgage and the
assignment to Fannie Mae dated September 8, 2016. Further, the affidavit attached to its
motion for summary judgment set forth that appellant defaulted under the terms of the
note and mortgage, the default was not cured, and Fannie Mae accelerated the loan
payment. Accordingly, the record indicates the mortgage was assigned to appellee before
it filed its complaint, and, therefore, it had standing to foreclose. See, Wells Fargo Bank,
N.A. v. Parrish, 10th Dist. No. 15AP-243, 2015-Ohio-4045, ¶ 14, quoting Wells Fargo
Bank, N.A. v. McGowan, 8th Dist. No. 101779, 2015-Ohio-1544, ¶ 13, quoting
CitiMortgage, Inc. v. Patterson, 8th Dist. No. 98360, 2012-Ohio-5894, ¶ 21 (" ' "[A] party
may establish its interest in the suit, and therefore have standing to invoke the
jurisdiction of the court when, at the time it files its complaint of foreclosure, it either (1)
has had a mortgage assigned or (2) is the holder of the note." ' (Emphasis omitted.).").
{¶ 19} Thus, appellant did not dispute with proper Civ.R. 56 materials that
appellee was the correct owner of the mortgage loan before the trial court. Appellant's
second assignment of error is overruled.
No. 18AP-221 7
{¶ 20} In her third assignment of error, appellant contends that the trial court
erred by not requiring appellee to join all necessary parties to the instant case; specifically
Morgan Chase. Appellant argues that Morgan Chase filed a "post-bankruptcy legal
interest" with TransUnion Credit Reporting Agency in the mortgage loan on August 22,
2018 and thus, it appears Morgan Chase still has an ownership interest in appellant's
loan.
{¶ 21} Appellant attached a letter from Morgan Chase from June 16, 2016 that
informs appellant beginning July 1, 2016, the servicing of her mortgage loan will transfer
from Morgan Chase to Seterus. Appellant also attached a partial print out from her
TransUnion credit report that indicated Morgan Chase opened a loan on July 16, 2008
and closed it on July 1, 2016. Appellant attached no document that indicated Morgan
Chase had an ownership interest in the loan after July 1, 2016. Furthermore, these
documents were not submitted to the trial court, but were attached to her brief to this
court.
{¶ 22} As set forth in response to appellant's second assignment of error, appellee
properly had standing to foreclose. Appellee attached to the complaint a copy of the note
and mortgage and the assignment to Fannie Mae dated September 8, 2016. Accordingly,
the trial court did not err in failing to require appellee to join necessary parties because
Morgan Chase was not a necessary party. Appellant's third assignment of error is
overruled.
V. Conclusion
{¶ 23} For the foregoing reasons, appellant's three assignments of error are
overruled and the judgment of the Franklin County Court of Common Pleas is affirmed.
Judgment affirmed.
KLATT, P.J. and BRUNNER, J., concur.
McGRATH, J., retired, of the Tenth Appellate District,
assigned to active duty under the authority of the Ohio
Constitution, Article IV, Section 6(C).
______________