[Cite as Wilmington Savings Fund Society v. West, 2019-Ohio-1249.]


                                      COURT OF APPEALS
                                   FAIRFIELD COUNTY, OHIO
                                  FIFTH APPELLATE DISTRICT

                                                            JUDGES:
WILMINGTON SAVINGS FUND                             :       Hon. W. Scott Gwin, P.J.
SOCIETY, FSB AS TRUSTEE                             :       Hon. Craig R. Baldwin, J.
                                                    :       Hon. Earle E. Wise, J.
                  Substitute                        :
                  Plaintiff-Appellant               :
                                                    :       Case No. 18CA20
-vs-                                                :
                                                    :
SHEILA R. WEST, ET AL                               :       OPINION

                  Defendants-Appellees




CHARACTER OF PROCEEDING:                                Civil appeal from the Fairfield County
                                                        Court of Common Pleas, Case No.
                                                        14CV718

JUDGMENT:                                               Affirmed in part; Reversed in part


DATE OF JUDGMENT ENTRY:                                 April 3, 2019


APPEARANCES:

For Substitute Plaintiff-Appellant                      For Defendant-Appellee

RICK D. DEBLASIS                                        BRUCE M. BROYLES
WILLIAM P. LEAAN                                        2670 North Columbus Street, Suite L
Lerner, Sampson & Rothfuss                              Lancaster, OH 43130
120 East Fourth St. Suite 800
Cincinnati, OH 45202
Fairfield County, Case No. 18CA20                                                       2

Baldwin, J.,

       {¶1} Wilmington Savings Fund Society appeals the denial of its motion for

summary judgment and the trial court’s verdict in favor of appellees, dismissing

appellant’s complaint for foreclosure. Appellees are Sheila and David West.

                          STATEMENT OF FACTS AND THE CASE

       {¶2} Appellant holds the note and mortgage on a parcel of property appellees

currently possess. Appellees do not dispute that they filed for bankruptcy protection,

executed an Intent to Surrender the property as part of the bankruptcy proceedings and

have not made payments due under the terms of the mortgage and note. Appellant filed

an action to foreclose the mortgage and appellees responded. The trial court dismissed

appellant’s motion for summary judgment and, after a bench trial, dismissed the

complaint, concluding that appellant had failed to establish that it had complied with the

notice provisions of 24 C.F.R. 203.604. Appellant argues it fulfilled the requirements of

the Regulation and that appellees were estopped from objecting to the foreclosure after

executing an intent to surrender the property in bankruptcy court and that, therefore, the

court’s ruling on the motion for summary judgment and dismissal of the complaint were

erroneous.

       {¶3} Appellant’s predecessor in interest loaned appellees $200,740.00 toward the

re-finance of a parcel of property and, in exchange, appellees executed a note promising

repayment and signed a mortgage securing their promise with the purchased property.

Appellees experienced financial problems and filed for bankruptcy protection. During the

bankruptcy proceeding appellees executed and filed a Notice of Intent to Surrender the
Fairfield County, Case No. 18CA20                                                            3


property that was the subject of the mortgage and the Bankruptcy Trustee abandoned the

property. The appellees’ debts were discharged.

        {¶4}   The loan to appellees was insured by HUD so it was subject to various

federal regulations, including the notice requirements of 24 C.F.R. 203.604. Pursuant to

the Regulation, appellant sent a letter to appellees via certified mail offering a face to face

meeting regarding the delinquent mortgage and sent a representative to the property to

arrange such a meeting. Appellees did not respond to the letter and though the agent

who visited the premises taped a notice to the door requesting contact from the appellees,

they did not contact appellant.

        {¶5} Appellant filed a complaint for foreclosure in October 2014 and appellees

filed an answer and counterclaim. Appellant filed a motion for summary judgment and

appellees responded, arguing that appellant failed to comply with 24 C.F.R. 203.604

because the attempt to arrange a face to face meeting did not occur before three full

monthly installments due on the mortgage were unpaid. Appellees contended timing was

mandatory and a condition precedent to filing the complaint and that appellant’s failure to

fulfill this obligation within the time frame described in the Regulations was fatal to its

case.

        {¶6} The trial court arrived at a similar conclusion to deny the motion for summary

judgment, focusing on the date the note was accelerated. The trial court held that:

        There is no dispute by the parties that certain conditions must be satisfied before

        a loan can be accelerated pursuant to HUD regulations, to wit, there must be a

        face-to-face meeting—or if such a meeting is not held, a reasonable effort must be
Fairfield County, Case No. 18CA20                                                          4


        made—and efforts at loss mitigation. Therefore, the Court must consider when the

        loan was accelerated.

   Entry Denying Motion for Summary Judgment, Nov. 23, 2015, p.4-5, Docket #

   28

        {¶7} The trial court found that the affidavit offered by appellant did not clearly

identify the date the appellant “accelerated the default” and that the affiant “used language

that could support Defendants' assertion that the default was accelerated prior to Plaintiff

complying with all conditions precedent.” Id. The trial court held that: “[b]ecause

reasonable minds cannot come to but one conclusion and genuine issues of material fact

remain as to when the loan was accelerated, the Court hereby OVERRULES(sic)

Plaintiff’s Motion for Summary Judgment.” Id.

        {¶8}   A bench trial was conducted during which appellant provided testimony

regarding the execution of the note, delivery of notices pursuant to 24 C.F.R. 203.604

and lack of response from appellees. Appellant further provided testimony regarding the

assignment of the note, confirmed possession of the note and details regarding the

delinquency. Appellees provided no evidence, but did argue that the requirements of 24

C.F.R. 203.604 remained unfulfilled.

        {¶9} The trial court issued an entry, holding that:

        Upon review of the evidence, testimony, and the arguments of the parties

        the Court finds Plaintiff has carried its burden with respect to demonstrating

        its standing to pursue foreclosure as the holder of the Note and Mortgage

        in question. Further, the Court finds that the loan is past due and in default

        from the November 2011 installment to present, with an interest rate of
Fairfield County, Case No. 18CA20                                                                          5


              6.25% plus other fees and advances, from October 1, 2011, on a loan

              balance of $182,472.88.

Trial Court Verdict, Apr. 27, 2015, p.4, Docket # 52

              {¶10} After finding for appellant on several issues, the trial court dismissed the

complaint, finding that that appellant “did not make reasonable efforts to contact

[appellees] to arrange a face-to-face meeting or visit [appellees] at the Property before

three full monthly installments due on the mortgage went unpaid” and that, therefor,

appellant did not fulfill a condition precedent to accelerating the balance of the loan and

initiating foreclosure proceedings. Id, at 6-7

              {¶11} The trial court also held that the appellees’ compliance with the Notice of

Intent to Surrender that they had filed was an issue for the U.S. Bankruptcy Court. The

trial court declined to address that matter.

              {¶12} The appellant had also requested in its complaint a reformation of the

property’s legal description due to what it described as a scrivener’s error. The trial court

held that appellant waived its claim because no testimony or evidence was presented on

this issue at trial.

              {¶13} Appellant filed a timely notice of appeal and submitted three assignments of

error:

         I.        THE TRIAL COURT ERRED AS A MATTER OF LAW IN ITS DECISION

DENYING CITIMORTGAGE'S(SIC)1 MOTION FOR SUMMARY JUDGMENT.




1 CitiMortgage, the original plaintiff, assigned the note to Wilmington Savings Fund Society, FSB and
requested that Wilmington Savings Fund Society be substituted as the plaintiff while this matter was
pending in the trial court. The trial court granted that request in its order of August 9, 2017, Docket # 33.
Fairfield County, Case No. 18CA20                                                            6


     II.     THE TRIAL COURT ERRED AS A MATTER OF LAW BY ENTERING

JUDGMENT        FOR     APPELLEES         ON    APPELLANT'S         FORECLOSURE          AND

REFORMATION CLAIMS.

    III.     THE TRIAL COURT ERRED AS A MATTER OF LAW BY ENTERING

JUDGMENT        FOR     APPELLEES        WITH     PREJUDICE;       ANY     DISMISSAL       OF

APPELLANT'S FORECLOSURE CLAIM SHOULD HAVE BEEN WITHOUT PREJUDICE.

                                     SUMMARY JUDGMENT

       {¶14} Summary judgment proceedings present the appellate court with the unique

opportunity of reviewing the evidence in the same manner as the trial court. Smiddy v.

Wedding Party, Inc., 30 Ohio St.3d 35, 36, 506 N.E.2d 212 (1987).

       {¶15} Civ.R. 56 provides summary judgment may be granted only after the trial

court determines:

       1) no genuine issues as to any material fact remain to be litigated; 2) the moving

       party is entitled to judgment as a matter of law; and 3) it appears *770 from the

       evidence that reasonable minds can come to but one conclusion and viewing such

       evidence most strongly in favor of the party against whom the motion for summary

       judgment is made, that conclusion is adverse to that party.

Temple v. Wean United, Inc., 50 Ohio St.2d 317, 327, 364 N.E.2d 267 (1977).

       {¶16} It is well established the party seeking summary judgment bears the burden

of demonstrating that no issues of material fact exist for trial. Celotex Corp. v. Catrett, 477

U.S. 317, 330, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A dispute of fact is “material” if it

affects the outcome of the litigation, and is “genuine” if demonstrated by substantial

evidence going beyond the allegations of the complaint. Burkes v. Stidham, 107 Ohio
Fairfield County, Case No. 18CA20                                                      7

App.3d 363, 371, 668 N.E.2d 982 (8th Dist.1995), Myers v. Jamar Enterprises, 12th Dist.

Clermont No. CA2001-06-056, 2001 WL 1567352, *2 (Dec. 10, 2001).

      {¶17} The record on summary judgment must be viewed in the light most favorable

to the opposing party. Williams v. First United Church of Christ, 37 Ohio St.2d 150, 151-

152, 309 N.E.2d 924 (1974).

                                          ANALYSIS

      {¶18} The interpretation of 24 C.F.R. 203.604 and its application to the facts are

the central issues in this case. The relevant facts are not in dispute, but the proper

interpretation of the Regulation with the focus upon the time limit contained therein

remains a point of contention. The Regulation directs appellants to send a notice and

complete a visit to the subject premises before three full monthly payments are

delinquent, but neither that section nor any other related section describes the

consequence of missing that deadline. The trial court has interpreted the timing to

comprise a mandatory condition precedent which remained unfulfilled when the

foreclosure complaint was filed. Because this issue is critical to the resolution of the

parties’ arguments we will complete our analysis of 24 C.F.R. 203.604 before we consider

the assignments of error.

      {¶19} Appellees asserted in their answer that appellant failed to comply with HUD

regulations before initiating foreclosure proceedings on the property. The mortgage loan

that is the subject of this cause of action is federally insured and is subject to HUD

regulations. The regulations applicable to federally insured mortgages are found in Part

203, Title 24, C.F.R. for Single-Family Mortgage Insurance.
Fairfield County, Case No. 18CA20                                                    8


      {¶20} Pursuant to the Regulations, if the account in is default, the mortgagee is

required to give notice to the mortgagor:

       “The mortgagee shall give notice to each mortgagor in default on a form

      supplied by the Secretary or, if the mortgagee wishes to use its own form,

      on a form approved by the Secretary, no later than the end of the second

      month of any delinquency in payments under the mortgage. If an account

      is reinstated and again becomes delinquent, the delinquency notice shall

      be sent to the mortgagor again, except that the mortgagee is not required

      to send a second delinquency notice to the same mortgagor more often

      than once each six months. The mortgagee may issue additional or more

      frequent notices of delinquency at its option.”

24 C.F.R. 203.602

      {¶21} If the account is delinquent after the end of the second month, 24 C.F.R.

203.604(b) requires the following:

       (b) The mortgagee must have a face-to-face interview with the mortgagor,

      or make a reasonable effort to arrange such a meeting, before three full

      monthly installments due on the mortgage are unpaid. If default occurs in a

      repayment plan arranged other than during a personal interview, the

      mortgagee must have a face-to-face meeting with the mortgagor, or make

      a reasonable attempt to arrange such a meeting within 30 days after such

      default and at least 30 days before foreclosure is commenced, or at least

      30 days before assignment is requested if the mortgage is insured on

      Hawaiian home land pursuant to section 247 or Indian land pursuant to
Fairfield County, Case No. 18CA20                                                          9


       section 248 or if assignment is requested under § 203.350(d) for mortgages

       authorized by section 203(q) of the National Housing Act.

       (c) A face-to-face meeting is not required if:

                                             ***

             (5) A reasonable effort to arrange a meeting is unsuccessful.

       (d) A reasonable effort to arrange a face-to-face meeting with the

       mortgagor shall consist at a minimum of one letter sent to the mortgagor

       certified by the Postal Service as having been dispatched. Such a

       reasonable effort to arrange a face-to-face meeting shall also include at

       least one trip to see the mortgagor at the mortgaged property, unless the

       mortgaged property is more than 200 miles from the mortgagee, its servicer,

       or a branch office of either, or it is known that the mortgagor is not residing

       in the mortgaged property.

       {¶22} We have had an opportunity to address a similar situation, and we have held

that appellant “must also establish that it sufficiently complied with Section 203.604, Title

24, C.F.R. as a condition precedent to foreclosure. See Washington Mut. Bank v.

Mahaffey, 154 Ohio App.3d 44, 2003-Ohio-4422, 796 N.E.2d 39 (Second District Court

of Appeals found that mortgagee was not entitled to summary judgment when it failed to

establish that it sufficiently complied with Section 203.604, Title 24, C.F.R.).” U.S. Bank,

N.A. v. Detweiler, 191 Ohio App.3d 464, 2010-Ohio-6408, 946 N.E.2d 777, ¶ 56 (5th Dist.)

(emphasis added).

       {¶23} In the case at bar there is uncontroverted evidence that, prior to filing the

foreclosure complaint, the appellant sent a letter to appellees via certified mail and sent
Fairfield County, Case No. 18CA20                                                      10


a representative to the premises, both with the expressed intent to arrange a face to face

meeting in compliance with the obligations imposed by the Code of Federal Regulations.

Appellant did not send the letter and did not complete the visit to the premises before

three full payments were delinquent. In Detweiler we found “that it [was] clear that

appellee made no attempt to establish that it complied with the regulation that it have a

face-to-face interview with the mortgagor, or made a reasonable effort to arrange the

interview, before bringing the foreclosure action, Detweiler, supra, ¶ 56, but we did not

address the consequences of complying with the requirements after three full monthly

installments due on the mortgage were unpaid. The courts that have had the opportunity

to address this issue have determined that the obligation to conduct a face to face

meeting, or a reasonable attempt to do so is mandatory, but the requirement that the

meeting or the attempt occur before three full monthly payments are due is aspirational.

      {¶24} The Seventh District Court of Appeals described the mandatory/aspirational

dichotomy of 24 C.F.R. 203.604:

      Under our reading of the regulations, the specific time deadlines referenced

      by the court are aspirational, whereas the obligation to perform those

      conditions (i.e., the requirement to actually have a face-to-face meeting,

      absent one of the stated exceptions), is mandatory. For example, if a bank

      commences a foreclosure action at the earliest possible time, the day after

      the third payment is missed, the bank's failure to have the face-to-face

      meeting within the first three months of default, would, absent one of the

      exceptions, bar the bank from filing the foreclosure action. On the other

      hand, if the bank waited until the borrower missed six payments, for
Fairfield County, Case No. 18CA20                                                        11


       example, the bank's failure to have the face-to-face meeting within the first

       three months of default, would not bar the foreclosure action, as long as the

       bank held the meeting sometime before filing the action; e.g. in the fourth

       or fifth month.

PNC Mtge. v. Garland, 7th Dist. Mahoning No. 12 MA 222, 2014-Ohio-1173, ¶ 30.

       {¶25} That court recently confirmed its holding that the meeting or attempt to meet

must occur before the filing of foreclosure, but otherwise the timing of the meeting is not

a condition precedent. RBS Citizens NA v. Sharp, 7th Dist. Mahoning No. 17 MA 0059,

2018-Ohio-2480, ¶ 17, appeal not allowed, 153 Ohio St.3d 1504, 2018-Ohio-4285, 109

N.E.3d 1260, ¶ 17. See Also Bank of Am. v. Bobovyik, 7th Dist. Columbiana No. 13 CO

54, 2014-Ohio-5499, ¶¶ 38-39.

       {¶26} The Ninth District came to the same conclusion in Huntington Natl. Bank v.

Anderson, 9th Dist. Lorain No. 17CA011223, 2018-Ohio-3936, ¶¶ 30-31, when it reversed

the trial court’s decision that Huntington “failed to have a face-to-face interview with the

mortgagor, or make a reasonable effort to arrange such a meeting, before three full

monthly installments due on the mortgage went unpaid.” Id. at ¶ 12. The court relied upon

the Seventh District as well as a holding from the Second District.

       {¶27} The Second District examined the application of this Regulation and

concluded:

       A commonsense construction of the regulation is that it requires, subject to

       the exceptions contained in division (c)(2), that a lender either have a face-

       to-face interview or make a reasonable effort to arrange the interview before

       bringing a foreclosure action, and that the mortgagee is urged, by the
Fairfield County, Case No. 18CA20                                                        12


       regulation, to have the interview, or to make a reasonable effort to arrange

       the interview, within the three-month default period.

Washington Mut. Bank v. Mahaffey, 154 Ohio App.3d 44, 2003-Ohio-4422, 796 N.E.2d

39, ¶ 22.

       {¶28} The Second District later confirmed the requirement that the lender act

before three full monthly payments on the mortgage were unpaid was aspirational as a

strict reading would be unduly hard and inequitable. Wells Fargo Bank, N.A. v. Goebel,

2nd Dist. No. 25745, 2014-Ohio-472, 6 N.E.3d 1220, fn 4.

       {¶29} The Tenth District has examined this issue as well. In Wells Fargo Bank, NA

v. Burd, 10th Dist. Franklin No. 15AP-1044, 2016-Ohio-7706 the court considered other

holdings finding the three payment deadline aspirational, but found those cases

distinguishable because “[t]his is not a case where, as theorized in Garland, a bank holds

a face-to-face meeting a few months after a third payment is missed but prior to filing

foreclosure. Rather, in this case, Wells Fargo and Burd participated in a court-sponsored

mediation session after a foreclosure proceeding had been initiated. Outside of that court-

sponsored mediation, Wells Fargo made no other attempt to comply with the

requirements of 24 C.F.R. 203.604(b).” Id at ¶24.

       {¶30} The Tenth District more directly considered the timing in U.S. Bank Natl.

Assn. v. Cavanaugh, 10th Dist. Franklin No. 18AP-358, 2018-Ohio-5365, when the

appellants “contended that U.S. Bank could not foreclose because it had not satisfied the

requirement in 24 C.F.R. 203.604(b) that a lender have a face-to-face meeting with the

borrower, or attempt to arrange such a meeting, before three full monthly installments

due on the mortgage are unpaid.” Id, at ¶ 7. After noting that the appellant failed to raise
Fairfield County, Case No. 18CA20                                                           13


this as an affirmative defense in the court below, the appellate court noted that the issue

of whether the timing was an affirmative defense or a condition precedent would not

impact the outcome because the timing was aspirational.

       Significantly, Burd did not hold that a lender is barred from seeking foreclosure if it

       fails to appropriately act within the time period specified in 24 C.F.R. 203.604(b).

       Thus, contrary to the Cavanaughs' assertion, Burd does not dictate the result in

       this case. We, instead, follow the other Ohio courts that have addressed this issue

       and conclude that a lender complies with 24 C.F.R. 203.604(b) if it conducts a

       face-to-face meeting, or it makes reasonable efforts to arrange a face-to-face

       meeting, prior to filing for foreclosure. Here, U.S. Bank made the mandated efforts

       to arrange a face-to-face meeting before it commenced its action against the

       Cavanaughs for foreclosure. We, therefore, conclude that no genuine issue of

       material fact regarding U.S. Bank's compliance with 24 C.F.R. 203.604(b) remains

       for resolution.”

Id at ¶ 32.

       {¶31} The purpose of the part of the Code of Federal Regulations and related

sections is to provide support for borrower housing counseling and an alternative to

foreclosure to qualified mortgagors. 12 U.S.C.A. 1715u; Bagley v. Wells Fargo Bank,

N.A., E.D. Virginia, Civil Action No. 3:12–CV–617, 2013 WL 350527, *5 (Jan. 29, 2013);

Ferrell v. Pierce, 785 F.2d 1372 (7th Cir. 1986).          With that purpose in mind and

considering the analysis of our colleagues, we hold that the appellant was obligated to

send a letter via certified mail and visit the property to arrange a face to face meeting prior

to the filing foreclosure action. The time-frame described in CFR 203.604 is aspirational,
Fairfield County, Case No. 18CA20                                                           14


not mandatory. The fact that the certified letter and the visit to the property occurred after

the third full monthly payment was unpaid will not serve to bar the foreclosure actions.

We agree that “[i]t seems inconceivable that the HUD regulations, promulgated in respect

to the federal agency's role as an insurer of mortgages, were intended to create a

permanent and impenetrable barrier to foreclosing on the property of a borrower who has

not made a mortgage payment for more than eight years. US Bank Nat. Ass'n v. McMullin,

55 Misc.3d 1053, 1062–63, 47 N.Y.S.3d 882, 889–90 (N.Y. Sup. Ct.2017).

       {¶32} With that conclusion in mind, we move to consideration of appellant’s

assignments of error.

       {¶33} In its first assignment of error, appellant contends that the trial court erred as

a matter of law by denying its motion for summary judgment. As noted above, our

standard of review for summary judgment is de novo.

       {¶34} Appellant sought summary judgment to foreclose the mortgage and

reformation of the deed to correct an error in the description of the property. In support

of its motion, appellant offered the affidavit of Erica Bardua, employed by CitiMortgage as

Vice President-Document Control.

       {¶35} Ms. Bardua established her competency by identifying herself as employed

by CitiMortgage as Vice President, Document Control, and confirmed her statements in

the affidavit were based upon her personal knowledge. The nature of the facts in the

affidavit combined with the identity of the affiant creates a reasonable inference that Ms.

Bardua has personal knowledge of the facts in the affidavit. PNC Bank, N.A. v. Price, 5th

Dist. Morgan No. 15AP0015, 2016-Ohio-2887, 64 N.E.3d 402.
Fairfield County, Case No. 18CA20                                                         15


       {¶36} Ms. Bardua stated that CitiMortgage was in possession of the original

promissory note. She confirmed that a true and accurate copy of the Note with any

applicable endorsements, the Mortgage with any applicable Assignments, Collection

Notes, Acceleration Letter, Face to Face invite, Face to Face Attempt Field Notes, Face

to Face Letter and Payment History as they appear in CitiMortgage, Inc.'s business

records are attached to the affidavit. The affidavit is properly notarized.

       {¶37} Ms. Bardua described the records attached to her affidavit as business

records kept in the regular course of business, stated that she is familiar with and has

access to the records, and that the records were made or maintained in the regular and

usual course of business. She also confirmed the records were made at or near the time

by, or from information from, a person with knowledge of the transactions. Ms. Bardua

also provided sufficient evidence to demonstrate that the appellees were in default, that

all conditions precedent had been satisfied and she stated the amount of principal and

interest due. Consequently, the affidavit and the attached documents are adequate to

satisfy the requirements for issuing a summary judgment in the context of a foreclosure

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

2011-Ohio-3203, and the burden shifts to appellees to demonstrate a material fact

remains for trial. Appellees “may not rest upon the mere allegations or denials of his

pleadings, but [their] response, by affidavit or as otherwise provided in this rule, must set

forth specific facts showing that there is a genuine issue for trial.” Dresher, supra.

       {¶38} Appellees responded by attacking Ms. Bardua’s affidavit and contending

there was insufficient evidence that the appellant fulfilled the conditions precedent to

acceleration of the note and foreclosure. Appellees did not submit any evidence, but
Fairfield County, Case No. 18CA20                                                          16


relied upon their argument that appellant’s evidence fell short of fulfilling the requirements

for granting summary judgment.

       {¶39} We disagree with appellees’ argument that Ms. Bardua was unable to

determine who possesses the original note, that her affidavit suffers from an internal

inconsistency and that she failed to “attach the business records upon which she relied

in order to state that CitiMortgage, Inc. possesses the original note. She stated that

“CitiMortgage, Inc., or its authorized agent, is in possession of the original Note endorsed

in blank, and is the current mortgagee under the Mortgage.” We conclude possession by

the appellant or its agent would satisfy the requirement of Wachovia, supra that the

appellant is the holder of the note and our ruling in Wachovia contains no requirement

that affiant attach documentation in support of a conclusion that appellant is the holder of

the note.

       {¶40} Appellees further contend that Ms. Bardua’s affidavit is similar to the

affidavits in Bank of Am., N.A. v. Loya, 9th Dist. Summit No. 26973, 2014-Ohio-2750 and

Wachovia, supra, but we find distinct differences. In Loya the affidavits were “based on

their review of the business records attached to those affidavits. The only item attached

to Ms. Bradley's affidavit was an account information statement.” Loya, at ¶ 13. The items

attached to the affidavit did not provide any information regarding possession of the note.

Ms. Bardua’s affidavit was based upon “[her] review of those records relating to the

Borrower's loan and from [her] own personal knowledge of how they are kept and

maintained” and was not limited to the documents attached to the affidavit.

       {¶41} The affidavit in Wachovia was rife with defects that are not present in Ms.

Bardua’s affidavit. Wachovia, supra ¶ 28. Ms. Bardua’s affidavit identifies much more
Fairfield County, Case No. 18CA20                                                       17


than the mortgage and the note as accurate copies of the originals, and includes

documents that support her conclusions. She does identify the account as a business

record, kept in the regular course of business, and states the records were compiled at

or near the occurrence of each event by persons with knowledge of said events, unlike

the affidavit in Wachovia. She identifies herself as vice-president of document control at

CitiMortgage and asserts she has personal knowledge of all the facts contained in her

affidavit, and not merely an assistant secretary with questionable access to records.

       {¶42} We hold that Ms. Bardua’s affidavit satisfied the requirements of Wachovia

and that appellees’ criticisms of the format and the content are not well taken.

       {¶43} Appellees next challenge the legal sufficiency of the information provided by

the affidavit, arguing that appellant failed to demonstrate fulfillment of the requirements

of 24 C.F.R. 203.604, focusing on the timing requirement that we previously addressed.

       {¶44} Appellees begin their argument by asserting that the loan was accelerated

on January 25, 2013 based upon the language in Exhibit F attached to the Bardua

affidavit. That document contains a reference to acceleration, but does not support the

conclusion that the appellant had accelerated the payment due date of the loan. The

document warns that “[f]ailure to cure the default by 01/25/13 may result in the

acceleration of all sums due under the Security Instrument”(emphasis added) but it does

not state with certainty that the entire unpaid balance will become due on that date. The

balance of appellees’ argument is based upon this misinterpretation of Exhibit F and we

therefor find it unpersuasive.

       {¶45} Based upon the materials in the record, the acceleration of all sums due

under the note did not occur until the complaint was filed on October 14, 2014.    Nixon v.
Fairfield County, Case No. 18CA20                                                          18

Buckeye Bldg. & Loan Co., 18 Ohio Law Abs. 261, 263 (2nd Dist.1934); See Also In re

Land, 14 B.R. 132, 133 (Bankr. N.D. Ohio 1981). We found above that the timing

described in 24 C.F.R. 203.604 was aspirational and that this Regulation is satisfied when

the notice is sent and the premises visit is completed prior to the filing of the complaint.

Consequently, appellees’ contention that appellant failed to fulfill the requirements of the

Regulation regarding the face to face meeting must fail as both the letter and the visit to

the premises occurred prior to the acceleration of the note and the filing of the foreclosure.

Exhibit G, the certified mail letter to appellees asking for a face-to-face meeting was sent

on June 30, 2014 and the visit to the premises to arrange a face to face meeting occurred

on July 2, 2014 per Exhibits I and J. Both tasks were completed prior to the filing of the

complaint in October 2014.

       {¶46} Appellees’ argument opposing summary judgment next cites to Wells Fargo

Bank, N.A. v. Aey, 7th Dist. Mahoning No. 12 MA 178, 2013-Ohio-5381 contending that

appellant was obligated to consider appellees for loss mitigation prior to filing foreclosure.

We find that case distinguishable as the borrowers therein filed opposing affidavits in

which they “stated that they were in the loan modification process at the time the

complaint was filed, they provided the bank with all documents requested, but the bank

said the documents were missing, had been lost, or had become outdated.” Id at p. 8.

The appellees in the case at bar provided no affidavit or any admissible evidence to

establish that they were likewise in the midst of the loan modification process. They have

not contended that they responded to any of the correspondence they received from the

appellant, that they requested further consideration from the appellant or that they

attempted to contact the appellant. The appellees’ also provide no explanation regarding
Fairfield County, Case No. 18CA20                                                        19


how appellant would complete a loss mitigation evaluation of appellees when they failed

to contact appellant either on their own volition or in response to appellant’s

correspondence. We disagree with appellees contention that appellant’s completion of a

loss mitigation evaluation is a condition precedent to acceleration and foreclosure in this

case.

        {¶47} Appellees did not oppose or otherwise respond to that part of appellant’s

motion for summary judgment seeking a reformation of the property description.

        {¶48} The trial court reviewed the facts and concluded there was a question of

material fact left for trial because Ms. Bardua’s affidavit did not state when the appellant

had accelerated the date the amount under the note was due. Because that fact remained

unknown, the trial court concluded that it was unable to determine if the required notice

under 24 C.F.R. 203.604 had been timely issued and, therefore, summary judgment was

inappropriate. The trial court did not address that portion of the motion for summary

judgment requesting reformation of the deed.

        {¶49} With regard to the issue of foreclosure, we hold that the trial court erred by

failing to grant appellant’s motion for summary judgment. We have concluded above that

the affidavit and attachments submitted by Ms. Bardua fulfills the requirements we

outlined in Wachovia. The trial courts holding that Ms. Bardua’s affidavit contains no

information regarding the acceleration of the affidavit overlooks the fact that the due date

of the note was accelerated by the filing of the complaint on October 14, 2014 and the

record contains no other evidence to suggest the debt was accelerated at an earlier time.

Nothing within the note or mortgage contains a requirement of prior notice of acceleration

and no party has cited to any legal authority that would require such notice. The relevant
Fairfield County, Case No. 18CA20                                                        20


precedent regarding the 24 C.F.R. 203.604 requirements that the appellant conduct a

face to face meeting requires the sending of a letter and a personal visit prior to filing

foreclosure. In this case, the requirements were satisfied prior to acceleration and the

filing of the foreclosure as they occurred simultaneously upon the filing of the complaint.

We conclude that the holding that the date of acceleration was unknown and thus a

question of material fact preventing summary judgment was erroneous.

       {¶50} The appellant contends that its request for summary judgment on the issue

of reformation was also wrongly denied. “Reformation is an equitable remedy that allows

a court to change the language in a contract where the parties' true intentions have not

been expressed due to a ‘mutual mistake’—meaning a common mistake by all the parties

to the contract. * * * The party wishing to reform the [agreement] must demonstrate the

‘mutual mistake’ by clear and convincing evidence. Clear and convincing evidence is the

degree of proof necessary ‘to produce in the mind of the trier of facts a firm belief or

conviction as to the facts sought to be established.’ ” (Citations omitted.) Huber v. Knock,

1st Dist. Hamilton No. C–080071, 2008-Ohio-5900 ¶ 6 as quoted in Huntington Natl. Bank

v. Betteley, 11th Dist. Lake No. 2015-L-057, 2015-Ohio-5067 ¶ 24.

       {¶51} In the case at bar appellant asserts that “as a result of scrivener’s error and

mutual mistake of fact between the parties thereto, the mortgage executed by the

[appellees] and delivered by them to the [appellant] contained an incorrect legal

description. (Complaint, paragraph 10.) Appellant concludes in the complaint that

because the mistakes were the result of scrivener’s error and a mutual mistake of fact

between the parties, they are entitled to have the above described mortgage reformed so

as to have the appropriate legal description rewritten. In paragraph 5 of the complaint
Fairfield County, Case No. 18CA20                                                        21


appellants referred to Exhibit C as containing the correct legal description. Appellees

denied the allegations in paragraphs 5, 10 and 11, putting the facts regarding the alleged

error at issue.

       {¶52} “[S]ummary judgment is not proper on the pleadings alone where the

nonmoving party's answer denies material allegations of fact raised in the complaint.”

Pacific Finance Loans v. Goodwin, 41 Ohio App.2d 141, 142, 324 N.E.2d 578 (8th

Dist.1974). Appellees’ answer denies material factual allegations of the complaint

regarding the nature and existence of the error in the property description in the mortgage,

obligating appellant to produce evidence regarding the same in support of its motion.

Help Children, Bay View Fire Fighters Ass'n v. Dept. of Liquor Control, 10th Dist. Franklin

No. 95APE06-802, 1996 WL 11280, *2–3. (Jan. 11, 1996). Appellant argued the law

regarding reformation and referred to its allegation that the property description in the

mortgage is incorrect due to mutual mistake, but it does not identify the mistake and does

not include any evidence admissible under Civ.R. 56 in support of the error. No affidavit

identifies Exhibit C as the correct property description. Neither that exhibit nor any other

document that corroborates the error is identified by appellant in its motion for summary

judgment.

       {¶53} Under the circumstances we find that summary judgment on the issue of

reformation of the mortgage would not be appropriate as we cannot find there was clear

and convincing evidence of an error or the correct information and we find that a genuine

issue of fact remained to be decided.

       {¶54} The appellant’s first assignment of error is granted regarding the issue of

default and foreclosure, but denied with regard to the reformation of the deed.
Fairfield County, Case No. 18CA20                                                         22


       {¶55} In its second assignment of error, appellant argues that the trial court erred

as a matter of law by entering judgment for appellees on appellant's foreclosure and

reformation claims. Because we have held granted appellant’s first assignment of error

with regard to its foreclosure claims, the portion of the assignment regarding foreclosure

is now moot and will not be considered.

       {¶56} The trial court concluded that appellant had waived its claim for reformation

as it presented no evidence at trial supporting its contention of a mutual mistake, the

nature of the error or the necessary correction. While our standard of review regarding

interpretation of law is de novo, “insofar as factual issues must be determined by the trial

court as a predicate to resolving [legal questions], such factual determinations should be

accorded deference.” Aljaberi v. Neurocare Ctr., Inc., 5th Dist. No. 2017 CA 00176, 2018-

Ohio-1800, ¶ 18. Consequently, we must first consider the trial court’s factual findings.

       {¶57} Appellant insists, in conclusory terms, that it is entitled to reformation based

upon Exhibit C to the complaint and the Preliminary Judicial Report. Appellant does not

cite any portion of the record where these exhibits were submitted as evidence or where

the appellant offered any testimony or other evidence in support of its argument. We

have reviewed the trial transcript and though it contains several exhibits, appellant offered

no testimony or exhibit in support of reformation. No party mentioned reformation during

trial and reformation was not argued by appellant in its post-trial brief.       Under the

circumstances we cannot conclude that the trial court abused its discretion by dismissing

the appellant’s claim for reformation.
Fairfield County, Case No. 18CA20                                                       23


      {¶58} The appellant’s second assignment of error is denied to the extent it

addresses the claim of reformation. The balance of the argument in that assignment was

rendered moot by our decision in the first assignment.

      {¶59} In its third assignment of error, appellant contends that the trial court erred

as a matter of law by entering judgment for appellees with prejudice and that any

dismissal of appellant's foreclosure claim should have been without prejudice. As this

assignment of error is limited to the judgment regarding foreclosure, we find that it is

rendered moot by our decision in the first assignment of error.

      {¶60} The decision of the Fairfield County Court of Common Pleas is affirmed in

part and reversed in part. That part of assignments of error one and two addressing the

claim for reformation of the deed is affirmed as summary judgment was not warranted

and the trial court did not abuse its discretion by finding against appellant for lack of

evidence. That part of the first assignment of error addressing default and foreclosure is

granted and the judgment of the trial court in that regard as well as its verdict regarding

default and foreclosure is vacated and the trial court ordered to grant summary judgment

on those issues in favor of appellant. The third assignment of error is moot.
Fairfield County, Case No. 18CA20                                                      24


       {¶61} This matter is remanded to the trial court for further proceedings consistent

with this opinion and judgment.


By: Baldwin, J.,

Gwin, P.J., and

Wise, Earle, J., concur
