[Cite as U.S. Bank Natl. Assn. N.D. v. Dunham, 2014-Ohio-5747.]



                                    IN THE COURT OF APPEALS

                           TWELFTH APPELLATE DISTRICT OF OHIO

                                        CLERMONT COUNTY




U.S. BANK NATIONAL ASSOCIATION                        :
N.D.,
                                                      :           CASE NO. CA2014-05-034
        Plaintiff-Appellee,
                                                      :                OPINION
                                                                       12/30/2014
   - vs -                                             :

                                                      :
MICHAEL ANDREW DUNHAM, et al.,
                                                      :
        Defendants-Appellants.
                                                      :



       CIVIL APPEAL FROM CLERMONT COUNTY COURT OF COMMON PLEAS
                          Case No. 2013 CVE 00694



Taft Stettinius & Hollister LLP, Timothy C. Sullivan, 425 Walnut Street, Suite 1800,
Cincinnati, Ohio 45202 and Gerner & Kearns, Michael R. Brinkman, 809 Wright's Summit
Parkway, Suite 200, Ft. Wright, KY 41011, for plaintiff-appellee

Mills Mills Fiely & Lucas LLC, Brian D. Flick, 632 Vine Street, Suite 305, Cincinnati, Ohio
45202, for defendants-appellants, Michael Andrew and Jane Marie Dunham



        RINGLAND, P.J.

        {¶ 1} Defendants-appellants, Michael and Jane Dunham ("the Dunhams"), appeal

the decision of the Clermont County Court of Common Pleas granting summary judgment to

plaintiff-appellee, U.S. Bank National Association N.D. ("US Bank"), in a foreclosure action.

        {¶ 2} In January 2006, the Dunhams executed a promissory note in favor of US Bank
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in the amount of $199,500. The note was secured by a mortgage on real property owned by

the Dunhams at 524 Oregano Drive, Cincinnati, Ohio. The mortgage designated the

Dunhams as the borrowers and mortgagors, and US Bank as the lender and mortgagee.

        {¶ 3} In October 2009, the Dunhams failed to pay their property taxes and US Bank

began holding their tax payments in escrow, resulting in a higher monthly payment on their

loan. After the Dunhams failed to make their loan payments in January and February 2010,

US Bank notified them by mail that their financial difficulties may qualify them for a

permanent loan modification under the Housing Affordable Mortgage Program ("HAMP").1

        {¶ 4} The letter from US Bank invited the Dunhams to apply for a Trial Period Plan

("TPP"), and stated "[i]f you qualify under [HAMP] and comply with the terms of the [TPP], we

will modify your mortgage loan * * *." The letter explained that under the terms of a TPP, the

borrower's original loan documents remain in effect, but the borrower is permitted to make

lower payments as if the loan has been modified ("TPP payments") instead of at the higher

level required by the terms of the loan documents. It also explained that the typical TPP lasts

for three months while the lender evaluates the borrower's eligibility for a permanent loan

modification under HAMP, and that, even if the borrower is eligible, the loan would not be

modified unless the parties executed a separate modification agreement.

        {¶ 5} In March 2010, the Dunhams were approved to begin a TPP. After a few

months, US Bank determined the Dunhams were not eligible for a loan modification under

HAMP, and declined to execute a modification agreement for their loan. Nevertheless, the

Dunhams continued to make – and US Bank continued to accept – TPP payments until April


1. During the economic crisis of 2008, Congress passed the Emergency Economic Stabilization Act of 2008,
which charged the Secretary of the United States Department of the Treasury with acting in a manner that
"preserves homeownership and promotes jobs and economic growth." 12 U.S.C. 5201(2)(B). HAMP is part of
the Department of the Treasury's effort to help defaulting homeowners or those at risk for defaulting by providing
financial incentives to participating mortgage servicers to modify terms of eligible loans. Fifth Third Mtge. Co. v.
Orebaugh, 12th Dist. Butler No. CA2012-08-153, 2013-Ohio-1730 at ¶ 22, citing CitiMortgage, Inc. v. Carpenter,
2d Dist. Montgomery No. 24741, 2012-Ohio-1428, ¶ 11-12.
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2012. After April 2012, the Dunhams did not make any further payments on their loan.

       {¶ 6} In May 2013, US Bank filed a complaint for foreclosure. The Dunhams' answer

included several counterclaims alleging violations of the Fair Debt Collection Practices Act

("FDCPA") and the Truth in Lending Act ("TILA"), common law fraud, breach of contract,

breach of the duty of good faith and fair dealing, conversion and unjust enrichment, and

predatory lending under R.C. 1349.27(D). The Dunhams also sought rescission of the note

pursuant to the Ohio Consumer Sales Practices Act ("OCSPA").

       {¶ 7} In January 2014, US Bank moved for summary judgment on the complaint for

foreclosure and the Dunhams' counterclaims.          In response, the Dunhams conceded

judgment on their claims of violations of the FDCPA, breach of the duty of good faith and fair

dealing, and predatory lending, and their request for rescission pursuant to the OCSPA.

However, they maintained that a trial was necessary to resolve genuine issues of material

fact on their remaining claims.

       {¶ 8} On May 1, 2014, the trial court granted US Bank's motion for summary

judgment and issued a decree of foreclosure. The Dunhams now appeal, raising one

assignment of error.

       {¶ 9} THE TRIAL COURT ERRED IN GRANTING THE PLAINTIFF'S MOTION FOR

SUMMARY JUDGMENT ON PLAINTIFF'S COMPLAINT FOR FORECLOSURE AND

DENYING DEFENDANTS' COUNTERCLAIMS.

       {¶ 10} The Dunhams raise three issues with the trial court's grant of summary

judgment in favor of US Bank. They argue US Bank failed to meet its evidentiary burden with

respect to both the complaint for foreclosure, and their counterclaims for breach of contract

and fraud. The Dunhams also argue the trial court erred by failing to consider whether

HAMP creates a private right of action for borrowers against their mortgage servicers.

       {¶ 11} Appellate review of a trial court's ruling on a motion for summary judgment is de
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novo. Bank of Am., N.A. v. Jackson, 12th Dist. Warren No. CA2014-01-018, 2014-Ohio-

2480, ¶ 32. Thus, the appellate court is required to "us[e] the same standard that the trial

court should have used, and * * * examine the evidence to determine whether as a matter of

law no genuine issues exist for trial." Bank of New York Mellon v. Putman, 12th Dist. Butler

No. CA2012-12-267, 2014-Ohio-1796, ¶ 17. Summary judgment is appropriate under Civ.R.

56(C) when (1) there are no genuine issues of material fact to be litigated; (2) the moving

party is entitled to judgment as a matter of law; and (3) when all evidence is construed most

strongly in favor of the nonmoving party, reasonable minds can come to only one conclusion,

and that conclusion is adverse to the nonmoving party. Zivich v. Mentor Soccer Club, Inc.,

82 Ohio St.3d 367, 369-70 (1998).

       {¶ 12} The party moving for summary judgment has the initial burden of producing

evidence that affirmatively demonstrates the absence of a genuine issue of material fact.

First Horizon Home Loans v. Sims, 12th Dist. Warren No. CA2009-08-117, 2010-Ohio-847, ¶

19, citing Dresher v. Burt, 75 Ohio St.3d 280, 292-93 (1996). Once the moving party satisfies

its burden, the nonmoving party may not rest upon the mere allegations or denials of the

pleadings, but must supply evidentiary materials setting forth specific facts that demonstrate

there is a genuine issue for trial. Fifth Third Mtge. Co. v. Orebaugh, 12th Dist. Butler No.

CA2012-08-153, 2013-Ohio-1730, ¶ 9, citing Civ.R. 56(E).

                             1. US Bank's Evidentiary Burden

       {¶ 13} Notwithstanding the Dunhams' assertion to the contrary, this court has

maintained a consistent standard that a plaintiff in a foreclosure action must satisfy to prevail

on summary judgment.

       {¶ 14} "A party seeking to foreclose on a mortgage must establish execution and

delivery of the note and mortgage; valid recording of the mortgage; it is the current holder of

the note and mortgage; default; and the amount owed." BAC Home Loans Servicing, L.P. v.
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Kolenich, 194 Ohio App.3d 777, 2011-Ohio-3345, ¶ 26 (12th Dist.). Civ.R. 56(C) provides an

exclusive list of materials that a trial court may consider when deciding a motion for summary

judgment. Wells Fargo v. Smith, 12th Dist. Brown No. CA2012-04-006, 2013-Ohio-855, ¶ 15.

Those materials are "pleadings, depositions, answers to interrogatories, written admissions,

affidavits, transcripts of evidence, and written stipulations of fact." Id., citing Civ.R. 56(C).

Further, Civ.R. 56(E) articulates the standard for affidavits:

              Supporting and opposing affidavits shall be made on personal
              knowledge, shall set forth such facts as would be admissible in
              evidence, and shall show affirmatively that the affiant is
              competent to testify to the matters stated in the affidavit. Sworn
              or certified copies of all papers or parts of papers referred to in
              an affidavit shall be attached to or served with the affidavit.

       {¶ 15} The Dunhams argue that US Bank failed in two respects to satisfy the

evidentiary burden required to prevail on their motion for summary judgment. First, with

respect to US Bank's complaint for foreclosure, the Dunhams contend there was a genuine

issue of fact as to the amount of principal and interest due on the note at the time of

summary judgment. Second, the Dunhams contend US Bank failed to refute several of the

allegations that formed the basis of their counterclaims for fraud and breach of contract. We

disagree with both contentions.

       {¶ 16} With its motion for summary judgment, US Bank submitted an affidavit from

Tammie E. Denson, an Assistant Vice President at the bank with personal knowledge of the

records related to the Dunhams' loan. Denson's affidavit incorporates by reference several

attachments, including: copies of the original note and mortgage, the Truth in Lending

Disclosure Statement executed at the same time as the note and mortgage, and several

notices to the Dunhams generated by US Bank regarding the TPP and the Dunhams' default

on their loan. These documents are all of evidentiary quality under Civ.R. 56. See, e.g.,

Wilson v. AIG, 12th Dist. Butler No. CA2007-11-278, 2008-Ohio-5211, ¶ 29 ("a party may


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properly introduce evidence not specifically authorized by Civ.R. 56(C) by incorporating it by

reference through a properly framed affidavit pursuant to Civ.R. 56(E)").

       {¶ 17} The affidavit and incorporated documents establish the following. The note and

mortgage were executed and delivered on January 26, 2006, and the TILA statement

indicated the life of the loan would be 180 months. US Bank duly recorded the mortgage on

February 3, 2006, in Clermont County, and has been the holder of the note and mortgage

since the execution of the loan in 2006. The Dunhams ceased making payments on their

loan in April 2012, and soon thereafter US Bank notified them of their default and the bank's

intent to accelerate the loan.

       {¶ 18} In addition, Denson's affidavit avers that as of January 2014, the total unpaid

balance due on the Dunhams' loan was $246,847.64 for unpaid principal, accrued but unpaid

interest, and various advances for real estate taxes, homeowner's insurance, and the like.

Although US Bank failed to attach applicable portions of the Dunhams' payment history to

Denson's affidavit, it is undisputed that the Dunhams expressly waived all "Farno" issues with

respect to the affidavit at a hearing shortly before the trial court issued its judgment. See

Third Fed. S. & L. Assn. of Cleveland v. Farno, 12th Dist. Warren No. CA2012-04-028, 2012-

Ohio-5245, ¶ 11 ("[the bank] needed to attach or serve with its affidavit some * * * documents

material to * * * the default in payment and applicable portions of the payment history").

Therefore, no further documentation was required to establish the amount the Dunhams

owed to US Bank. See, e.g., Smith, 2013-Ohio-855 at ¶ 39 (finding Farno issues are waived

where the borrower does not file a motion to strike the relevant portions of the affidavit).

       {¶ 19} Thus, by virtue of Denson's affidavit and the documents incorporated by

reference therein, US Bank satisfied its initial burden to produce evidence that affirmatively

demonstrated the absence of a genuine issue of material fact with respect to their complaint

for foreclosure.   See Sims, 2010-Ohio-847 at ¶ 19-26.         These documents effectively
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established the execution and delivery of the note and mortgage, a valid recording of the

mortgage, that US Bank is the current holder of both the note and mortgage, default, and the

amount owed. Kolenich, 194 Ohio App.3d 777 at ¶ 26-28.

       {¶ 20} US Bank's evidence also demonstrated the absence of a genuine issue of

material fact with respect to the Dunhams' counterclaims for breach of contract and fraud.

       {¶ 21} The Dunhams' claim for breach of contract was based on the allegation that US

Bank had violated covenants in the original mortgage documents by accepting TPP

payments without notifying them their loan would not be modified, and by failing to notify

them of the acceleration of their loan. In their response to US Bank's motion for summary

judgment, the Dunhams also argued that US Bank breached separate, implied contractual

obligations to modify their loan based on the Dunhams' commencement of a TPP.

       {¶ 22} The Dunhams' claim for fraud was based on the allegation that US Bank had

misrepresented to them the nature of their debt and the status of their application for a

permanent loan modification. They asserted that US Bank led them to believe the life of the

loan would be for 360 months (30 years), rather than the 180 months (15 years) in the loan

documents. They also suggested that by accepting their TPP payments for over a year, US

Bank led them to believe they would receive a loan modification.

       {¶ 23} Yet, US Bank's evidence showed that US Bank timely notified the Dunhams

that they were ineligible for a permanent loan modification, that they were in default on their

loan, and that their loan had been accelerated. See Fifth Third Mtge. Co. v. Wizzard, 12th

Dist. Butler No. CA2012-11-226, 2013-Ohio-3084, ¶ 31 (overruling a borrower's claim of

failure to notify where the lender submitted affidavit evidence that notice was mailed and the

borrower did not submit contrary evidence). The evidence also showed the Dunhams were

approved to begin a TPP in 2010, but that the TPP was not a promise to modify the

Dunhams' loan and that no modification agreement was ever executed by the parties. See,
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e.g., Bank of Am., N.A. v. Robledo, 10th Dist. Franklin No. 13AP-278, 2014-Ohio-1185, ¶ 20

(noting that courts have consistently concluded TPPs are not promises to modify a borrower's

loan). Lastly, the evidence showed that at the time the loan documents were executed, the

Dunhams signed a TILA disclosure statement acknowledging the life of the loan was 180

months, and that they made payments for over three years before raising any issue with the

duration of the loan.

       {¶ 24} Thus, the Dunhams could not rest on the mere allegations of their pleadings,

but had the reciprocal burden to set forth – by affidavit or other Civ.R. 56 evidence – specific

facts showing the existence of a genuine triable issue. Asset Mgt. W. 9, L.L.C. v. McBrayer,

12th Dist. Madison No. CA2014-02-004, 2014-Ohio-2479, ¶ 8, citing Mootispaw v. Eckstein,

76 Ohio St.3d 383, 385 (1996). They failed to do so. Instead, the Dunhams' response was

unaccompanied by any Civ.R. 56 evidence, and for the most part simply reasserted

allegations from their counterclaims.

       {¶ 25} Employing the applicable standard of review and construing the evidence most

favorably for the Dunhams, we therefore find that no genuine issues of material fact remain

and reasonable minds could only conclude that US Bank is entitled to summary judgment on

its complaint for foreclosure upon the Dunhams' mortgage, and on the Dunhams'

counterclaims. CitiMortgage, Inc. v. Davis, 12th Dist. Warren No. CA2013-09-088, 2014-

Ohio-3292, ¶ 31-32; BAC Home Loans Servicing, LP. v. Mullins, 12th Dist. Preble No.

CA2013-12-015, 2014-Ohio-4761, ¶ 37.

                        2. A Private Right of Action Under HAMP

       {¶ 26} Lastly, the Dunhams invite this court to find they have a private right of action

against US Bank under HAMP to enforce applicable loss mitigation procedures. However,

the Dunhams present this argument for the first time on appeal.

       {¶ 27} It is well-settled that a party must adhere to the legal theory argued before the
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trial court, and may not assert a new legal theory for the first time on appeal. Swader v.

Paramount Prop. Mgt., 12th Dist. Butler No. CA2011-05-084, 2012-Ohio-1477, ¶ 29. Where

a party attempts to do so, the argument is considered as having been waived for purposes of

appeal. Ebbing v. Mathis, 12th Dist. Butler No. CA2013-01-014, 2013-Ohio-3880, ¶ 24, citing

Cadwallader v. Scovanner, 178 Ohio App.3d 26, 2008-Ohio-4166, ¶ 45 (12th Dist.).

Therefore, we consider the Dunhams' arguments regarding a private right of action under

HAMP as having been waived.

      {¶ 28} For the foregoing reasons, the Dunhams' assignment of error is overruled.

      {¶ 29} Judgment affirmed.


      S. POWELL and M. POWELL, JJ., concur.




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