                            RECOMMENDED FOR FULL-TEXT PUBLICATION

                                      File Name: 19b0006p.06

                     BANKRUPTCY APPELLATE PANEL
                                   OF THE SIXTH CIRCUIT



 In re: VODRICK LEE PERRY; MARCY LYNN PERRY,              ┐
                                         Debtors.         │
  ___________________________________________             │
                                                          │    No. 16-8042
                                                          >
 SUSAN L. RHIEL, Trustee,                                 │
                                                          │
                                   Plaintiff-Appellant,   │
                                                          │
        v.                                                │
                                                          │
                                                          │
 THE BANK OF NEW YORK MELLON,
                                                          │
                            Defendant-Appellee.           │
                                                          ┘

                       Appeal from the United States Bankruptcy Court
                        for the Southern District of Ohio at Columbus.
               No. 14-56316; Adv. No. 14-02312—Charles M. Caldwell, Judge.

                                Decided and Filed: May 8, 2019

     Before: DALES, HARRISON and OPPERMAN, Bankruptcy Appellate Panel Judges.

                                     _________________

                                          COUNSEL

ON BRIEF: Kristin Radwanick, Susan L. Rhiel, Jeffrey M. Levinson, LEVINSON LLP,
Cleveland, Ohio, for Appellant. Amelia A. Bower, PLUNKETT COONEY, Columbus, Ohio,
for Appellee.
                                     _________________

                                           OPINION
                                     _________________

       SCOTT W. DALES, Bankruptcy Appellate Panel Judge.             This appeal concerns a
Complaint for Declaratory Judgment filed by chapter 7 trustee Susan Rhiel (the “Appellant”)
 No. 16-8042                                   In re Perry                                         Page 2


seeking a determination that a refinanced mortgage only encumbers the interest of the person
specifically defined within the body of the mortgage as a “Borrower/Mortgagor.”                        The
bankruptcy court considered whether the co-debtor wife’s signature and initials on a mortgage
instrument that listed her as a “Borrower” in the signature block resulted in pledging to the
lender her interest as a joint tenant with rights of survivorship, when the mortgage did not
specifically name her as a “Borrower” within the text of document other than in the signature
block.

         The bankruptcy court regarded the mortgage as ambiguous under these circumstances,
concluding that extrinsic evidence was necessary to determine the parties’ intent and respective
rights in the property. After a trial, the court entered a Memorandum Opinion and Order1 and
Judgment Order finding the property fully encumbered by the mortgage. The trustee appealed
from this ruling.

         During the appeal, the Panel certified two unsettled state law questions to the Ohio
Supreme Court and held the appeal in abeyance pending the high court’s answer. Because the
Ohio Supreme Court has now answered the certified questions, and the parties have offered
supplemental argument in light of the answers, the appeal is now ready for decision.

                                        ISSUES ON APPEAL

         The Appellant frames the issues on appeal as follows:

                1. Did the Bankruptcy Court err in allowing parole [sic] evidence at trial
         regarding Debtor Marcy Lynn Perry’s intent when signing the First Mortgage
         held by the Appellee The Bank of New York Mellon where the First Mortgage
         was unambiguous on its face?
                 2. Did the Bankruptcy Court err in determining that the Property is fully
         encumbered by the First Mortgage held by the Appellee The Bank of New York
         Mellon, including the interest of Marcy Lynn Perry where Marcy Lynn Perry is
         not defined as a “Borrower” in the First Mortgage?




         1Memorandum   Opinion & Order on Chapter 7 Trustee Susan Rhiel’s Complaint for Declaratory Judgment
Against Defendants The Bank of New York Mellon, et al. (Doc. No. 1) (“Mem. Op.”) Adv. No. 14-02312 ECF No.
70.
 No. 16-8042                                In re Perry                                    Page 3


                                        JURISDICTION

       The Panel has jurisdiction to decide this timely-filed appeal because the United States
District Court for the Southern District of Ohio has authorized appeals to this Panel, and neither
party has timely elected to have the district court hear this appeal. 28 U.S.C. § 158(b)(6), (c)(1).
Under 28 U.S.C. § 158(a)(1), a bankruptcy court’s final order in an adversary proceeding may be
appealed as of right.

       For purposes of appeal, an order is final if it “ends the litigation on the merits and leaves
nothing for the court to do but execute the judgment.” Midland Asphalt Corp. v. United States,
489 U.S. 794, 798, 109 S.Ct. 1494 (1989) (citation omitted).            The underlying adversary
proceeding – the “judicial unit” -- was completely resolved on the merits after trial, making the
bankruptcy court’s order final and appealable. Ritzen Grp., Inc. v. Jackson Masonry, LLC (In re
Jackson Masonry, LLC), 906 F.3d 494 (6th Cir. 2018); Lyon v. Eiseman (In re Forbes), 372 B.R.
321, 325 (B.A.P. 6th Cir. 2007).

                                             FACTS

       Vodrick and Marcy Perry (the “Debtors” together; “Vodrick” and “Marcy” separately)
filed a joint chapter 7 bankruptcy petition on September 5, 2014 (Case No. 2:14-bk-56316). As
of the petition date, the Debtors were joint tenants with rights of survivorship with regard to real
estate located in Reynoldsburg, Ohio (the “Property”). The original purchase money mortgage
encumbering the Property before the refinancing at issue in this case identified both Debtors as
“Borrowers.” The Debtors each signed and initialed the original mortgage in that capacity.

       On February 6, 2007, Vodrick refinanced the purchase money mortgage, executing and
delivering a promissory note (the “Note”) to America’s Wholesale Lender. Marcy did not sign
the Note, nor was she listed as a “Borrower” anywhere within the document. On that same day
and in connection with the refinancing, the Debtors executed a mortgage (the “Mortgage”) with
America’s Wholesale Lender, which was recorded in March 2007 and subsequently assigned to
the Bank of New York Mellon (the “Appellee”). The definition of “Borrower” set forth in the
main body of the Mortgage (as opposed to the signature block) named Vodrick as the only
“Borrower” (Mortgage at 4, Adv. No. 2:14-ap-02312, ECF No. 1-1, Exh. C). Marcy, however,
 No. 16-8042                                       In re Perry                                           Page 4


signed the signature page at the end of the Mortgage as “Borrower” within the signature block,
and she initialed each page of the Mortgage. (Id. at 18).

        On November 17, 2014, shortly after the order for relief, Appellant filed a two-count
Complaint for Declaratory Judgment (“Complaint,” Adv. No. 14-02312 ECF No. 1) seeking a
declaration that the Mortgage did not encumber Marcy’s interest in the Property because her
name did not appear in the body of the Mortgage (where Vodrick alone was named as
“Borrower”), even though she signed the Mortgage as “Borrower” without qualification on the
signature page and placed her initials on each page. On cross-motions for summary judgment,
the bankruptcy court found that the Mortgage was ambiguous, and that the court would have to
consider parol evidence (at trial) to determine the intent of the Debtors and the refinancing
mortgagee before declaring the parties’ respective interests in the Property. After trial, the
bankruptcy court entered a Memorandum Opinion and Order and Judgment Order finding that
the Mortgage fully encumbered both Debtors’ interests in the Property. The Appellant trustee
appealed.

        Given the conflicting opinions among federal courts and Ohio state courts,2 and because
the Ohio Supreme Court had not squarely addressed the issues presented on appeal, the Panel
certified two unsettled questions of Ohio law to the state’s highest court pursuant to Rules of
Practice, Supreme Court Ohio 9.01(A), and held this appeal in abeyance pending the high court’s
response. More specifically, the Panel asked the Ohio Supreme Court to answer two state-law
questions:

        1. [W]hether an individual who is not identified in the body of a mortgage, but
        who signs and initials the mortgage, is a mortgagor of his or her interest; and
        2. Is a mortgage signed and initialed by an individual whose name is not
        identified in the body of the mortgage, but whose signature is properly

        2In  Hardesty v. Huntington Nat’l Bank (In re Payne), 450 B.R. 711 (Bankr. S. D. Ohio 2011) and Kindt v.
ABN AMRO Mortg. Grp., (In re Wallace), No. 06-1322, 2007 WL 6510864 (Bankr. S.D. Ohio Nov. 15, 2007), the
courts ruled that individuals who signed and initialed a mortgage document but were not identified as a “Borrower”
within the terms of the Mortgage could not convey their interest in real property as mortgagors regardless of their
intent. Reaching the opposite conclusion, cases such as Mortgage Electronic Registration Systems, Inc. v. Kaehne,
No. 2007-P-0033, 2008 WL 3271249 (Ohio App. Aug. 8, 2008) and CitiMortgage, Inc. v. Kermeen, No. 2011CA2,
2012 WL 1264488 (Ohio App. April 13, 2012), held that if a person signs/initials a mortgage document, she is
conveying her interest in property as a mortgagor despite not being listed within the instrument’s definition of
“Borrower.”
 No. 16-8042                                        In re Perry                                   Page 5


       acknowledged pursuant to Ohio Revised Code § 5301, invalid as a matter of law
       such that parol evidence is not admissible to determine the intent of the individual
       in signing the mortgage?
See Memorandum of Opinion and Order of Certification of Questions of Law to the Supreme
Court of Ohio, dated June 20, 2019 (“Opinion Re: Questions of Law” BAP Case No. 16-8042
ECF No. 19).3

       On December 20, 2018, the Supreme Court of Ohio answered the certified questions by
stating that the failure to identify a signatory by name within the body of the mortgage
instrument did not render the agreement unenforceable against the signatory’s in rem rights as a
matter of law. Bank of New York Mellon v. Rhiel, Slip Opinion No. 2018-Ohio-5087, at 1.
Additionally, Ohio’s high court held that when a mortgage is properly signed, initialed and
acknowledged by a signatory who is not named within the document itself, the mortgage is not
invalid as a matter of law. Id. at 6. Thus, parol evidence is always admissible to determine intent
when ambiguities within the mortgage instrument are present. To reach this conclusion, the high
court looked to both the formal elements of creating a valid mortgage under Ohio statutory law,
e.g., Ohio Rev. Code Ann. § 5301.01 et seq., and the familiar substantive requirements under
general contract law. Bank of New York Mellon v. Rhiel, No. 2018-Ohio-5087, 2018 WL
6778145 at *4-5 (Dec. 20, 2018).

       The Supreme Court of Ohio stated that, under Ohio Rev. Code Ann. § 5301.07, any
mortgage is presumed to pledge the mortgagor’s entire interest in the property unless there is
language within the document itself that states otherwise.                      Under Ohio Rev. Code Ann.
§ 5301.01(A), a mortgagor must sign a mortgage instrument and officially acknowledge it before
an authorized official (including a notary public) affirming that she signed the document in
question for the purpose stated within the mortgage (Ohio Rev. Code Ann. § 147.541(C)(1)).
Finally, Ohio’s highest court said, “as long as a mortgagor’s signature is legible, the mortgagor’s
name need not appear elsewhere in the writing in order to be valid for purposes of recording.”
Rhiel, 2018 WL 6778145 at *4.



       3The   Panel assumes the reader’s familiarity with its certification order.
 No. 16-8042                                      In re Perry                                           Page 6


        Under general principles of contract law, there must be a meeting of the minds regarding
essential, clear, and certain terms within the contract including but not limited to the identity of
the parties to the contract. Kostelnik v. Helper, 96 Ohio St.3d 1, 2002-Ohio-2985, 770 N.E.2d
58, 61-62 ¶ 16-17 (Ohio 2002). When it comes to intent, various aspects of Ohio case law, as
well as Ohio Rev. Code Ann. § 1335.05, emphasize that the signature of a party itself makes a
contract enforceable, rather than other methods of identification within the contract itself.4
Additionally, the high court observed:

        The primary goal in construing any contract is to ascertain and give effect to the
        intention of the parties. We presume that the intent of the parties to a written
        contract is found in the writing of the contract itself. Generally speaking, a
        contracting party’s signature manifests the party’s intent to be bound to a
        contract’s terms. It is the party’s signature, and not any other indication of
        identity, that is fundamental to the enforcement of a contract governed by the
        statute of frauds. If the identity of the party to be charged on a contract is unclear,
        it is the signature that “fixes the actual identity of the party.” Thus, a signature
        should not be considered a mere ornament but a meaningful term of the contract.

Rhiel, 2018 WL 6778145 at *4 (internal citations omitted).

        While the Supreme Court of Ohio emphasized the signature requirement of a contract, it
also discussed the importance of consideration under general contracting principles, most
significantly, that a party’s intent cannot be found by a signature alone. Ohio’s high court also
observed that although a party’s signature on a contract generally indicates a party’s intent to be
bound, language within the document could limit a party’s capacity and willingness to encumber
certain property.5 Overall, the Court concluded that the signature within the contractual terms as
a whole must be considered to determine a party’s intent to be bound to a contract, and further, it
is presumed that a person who signs a mortgage, even if she is not described within the body of
the document, is acting as a mortgagor regarding her own property interest so long as there is
nothing in the mortgage itself that negates this presumption. Id. at *4.

        4See   Westfield Ins. Co. v. Galatis, 797 N.E.2d 1256 (Ohio 2003); Preferred Capital, Inc. v. Power Eng.
Grp., Inc., 860 N.E.2d 741, ¶ 10 (Ohio 2007); Sanders v. McNutt, 147 Ohio St. 408 (1947).
        5For   example, the majority cited Foster’s Lessee v. Dennison, 9 Ohio 121, 125 (1839), where a wife who
signed a deed stating that she “relinquished her rights to dower” in her husband’s property did not convey her
separate interest in property, and mentioned Palmer v. Prunty, 156 N.E.2d 831 (1959), a case involving contractual
limitations on the interest a signatory conveyed.
 No. 16-8042                                In re Perry                                     Page 7


       At the Panel’s request, both parties wrote supplemental briefs to refine their original
arguments, if necessary, in light of the Ohio Supreme Court’s recent ruling.

       The Appellant’s Supplemental Brief focused on two parts of the Ohio Supreme Court’s
opinion. First, the Appellant stressed that the Ohio court held only that it is possible for a person
not listed within the document, who nonetheless signs the document, to pledge her property
interest to a mortgagee, and then only if the mortgage (as a whole) evinces that person’s intent to
be bound. In other words, the Appellant argues that the Ohio Supreme Court reached a middle
ground, directing its focus to the document itself.       Second, the Appellant emphasized the
dissenting justice’s view that Marcy did not convey her interest because there was no
conveyance language pertaining to her within the Mortgage. Of course, the views of the dissent
did not carry the day.

       More specifically, the Appellant first looked to the Mortgage itself, the body of which
expressly states that the “Borrower” is Vodrick Perry, and that the “Borrower” (Vodrick, not
Marcy) was the only person pledging any interest in the Property to the mortgagee. For this
reason, the Appellant regards the Mortgage as concrete and unambiguous in excluding Marcy
from the definition of “Borrower.”        Notwithstanding the answers to the Panel’s certified
questions, the Appellant argues that the bankruptcy court erred in admitting parol evidence. The
Appellant then discussed the case law from other states, including Massachusetts and Kentucky,
along with prior decisions applying Ohio law, such as Kindt v. ABN AMRO Mrtg. Group (In re
Wallace), Slip Op. Adv. No. 06–1322, 2007 WL 6510864 (Bankr. S.D. Ohio Nov. 15, 2007), and
Hardesty v. Huntington Natl. Bank (In re Payne), 450 B.R. 711 (Bankr. S.D. Ohio 2011)), to
show that other bankruptcy courts have held that a person who signs a mortgage has not
encumbered her share of property if she is not defined as a “Borrower” within the body of the
mortgage itself. The Appellant’s pre-certification arguments are consistent with those in her
supplemental brief.

       In its Supplemental Brief (ECF No. 28) the Appellee argues that the Ohio Supreme
Court’s answers to the certified questions are binding precedent, and case law issued before the
high court’s ruling is not dispositive of the present controversy and may not be used to support
the Appellant’s position.     Next, the Appellee argues that the Appellant may not use the
 No. 16-8042                                 In re Perry                                   Page 8


dissenting opinion as a basis for reversal, stating that “[e]ven if this court believes that Justice
DeWine's dissenting opinion is more logical and reasonable than the majority response to the
certified questions, this court is bound by the majority decision.” (Appellee Suppl. Br. at 8, BAP
Case No. 16-8042 ECF No. 28 (citing Osteen v. State Farm Mut. Auto. Ins. Co., No. 1522, 1989
WL 98527 (Ohio App. 1989)).) Finally, regarding the second certified question about parol
evidence, the Appellee emphasizes the Ohio Supreme Court’s conclusion that “a mortgage that is
properly signed, initialed, and acknowledged by a signatory whose name does not appear in the
body of the mortgage is not invalid as a matter of law, and in the event of ambiguity, parol
evidence may be admissible to determine the signatory’s intent.” (Appellee Suppl. Br. at 2, 10
(citing Op. Re: Questions of Law at 6).) The arguments in Appellee’s Supplemental Brief are
consistent with its earlier submission to the Panel.

                                   STANDARD OF REVIEW

       The Panel reviews the bankruptcy court’s legal conclusions de novo. Caradon Doors &
Windows, Inc. v. Eagle-Picher Indus., Inc. (In re Eagle-Picher Indus., Inc.), 447 F.3d 461, 463
(6th Cir. 2006). “De novo means that the appellate court determines the law independently of the
trial court’s determination.” Treinish v. Norwest Bank Minn., N.A. (In re Periandri), 266 B.R.
651, 653 (B.A.P. 6th Cir. 2001) (citations omitted). In other words, “no deference is given to the
trial court’s conclusions of law.” Mktg. & Creative Sols., Inc. v. Scripps Howard Broad. Co. (In
re Mktg. & Creative Sols., Inc.), 338 B.R. 300, 302 (B.A.P. 6th Cir. 2006) (citations omitted).

       The bankruptcy court’s finding that a contract or similar instrument is ambiguous,
requiring parol evidence for its interpretation, raises both a legal and factual question. “The
question of whether the language of a written agreement is ambiguous is one of law[.]” Parrett
v. American Ship Bldg. Co., 990 F. 2d 854, 858 (6th Cir. 1993). However, if the contractual
language has been determined to be ambiguous, the issue then becomes a matter of fact which is
reviewed for clear error, but “[t]he meaning of [ambiguous] terms . . . will not be overturned on
appeal absent a showing that the trial court abused its discretion.” Lincoln Elec. Co. v. St. Paul
Fire & Marine Ins. Co., 210 F. 3d 672, 684 (6th Cir. 2000).
 No. 16-8042                                      In re Perry                                          Page 9


                                               DISCUSSION

        With the benefit of the Ohio Supreme Court’s opinion answering the Panel’s certified
questions, and after reviewing the record on appeal, the Panel affirms the bankruptcy court in all
respects.

        Before trial, while resolving the parties’ summary judgment motions, the bankruptcy
court predicted the Ohio Supreme Court’s answer to the Panel’s certified question regarding the
admissibility of parol evidence under the present circumstances. After finding that the term
“Borrower” as used in the Mortgage is ambiguous, the bankruptcy court announced that it would
require a trial (and evidence beyond the Mortgage itself) to assess the intent of the Debtors and
the refinancing lender, and to declare the competing rights to the Property.

        After an independent review of the Mortgage, the Panel concurs in finding the Mortgage
ambiguous – the text of the document suggests that Vodrick alone was the “Borrower,” but
Marcy’s signature and initials suggest that Marcy, too, pledged her interest in the Property as
“Borrower.” Under the circumstances, the term “Borrower” is susceptible to two competing and
reasonable interpretations rendering the Mortgage ambiguous with respect to the identity of the
mortgagor or mortgagors and the extent of property liable for the Note. 6 Moreover, in view of
the recent ruling of the Supreme Court of Ohio, the bankruptcy court’s decision to consider parol
evidence was also correct, and obviously so. Indeed, the Panel struggles to imagine what else a
bankruptcy court could do to divine the parties’ intent in the face of such ambiguity.

        At trial, looking to the Mortgage itself, as well as to extrinsic evidence in the form of
depositions, two affidavits, several of the Debtors’ other income-property transactions, and
testimony from individuals involved in the refinancing and closing, the bankruptcy court
concluded that the Mortgage encumbered both Vodrick and Marcy’s interest in their joint
tenancy.     More specifically, the court considered the fact that both Vodrick and Marcy

        6Under   Ohio law, “[a] contract is ambiguous if its provisions are susceptible to two or more reasonable
interpretations… [w]hether a contract’s terms are clear or ambiguous is a question of law for the court.” Drone
Consultants, L.L.C. v. Armstrong, 2016 WL 3057969 at *3 (Ohio App. 12th Dist. May 31, 2016). If a contract has a
definite legal meaning, it is unambiguous; if a court cannot ascertain a definite legal meaning, it may consider
extrinsic evidence to determine the parties’ intent. Westfield Ins. Co. v. Galatis, 797 N.E.2d 1256, 1262 (Ohio
2003). “It is generally the role of the finder of fact to resolve ambiguity.” Id.
 No. 16-8042                                 In re Perry                                 Page 10


mortgaged their interests in the Property when they acquired it, and evidently found in the record
nothing to suggest that, in refinancing their purchase money debt, the lender intended to cut its
collateral package in half. The bankruptcy court regarded the suggestion that the refinancing
lender would lend against half of the Property as a “gratuitous gesture [that] seems far afield
from logic, common sense judgment, and reason.” (Mem. Op. at 4, Adv. Case No. 2:14-ap-
02312, ECF No. 70). This is an eminently sensible inference.

       The bankruptcy court also considered the fact that the loan documents were computer-
generated, but that the lender’s agent who prepared the closing documents also prepared explicit
instructions for the closing agent to require both Debtors to sign the Mortgage and other
paperwork associated with the refinancing (including the Truth in Lending Disclosure and Notice
of Right to Cancel). Marcy signed the documents as instructed. The court discounted Marcy’s
testimony (by affidavit) that she intended only to release her dower interest because one of her
affidavits contradicted the other on the key point of her reasons for signing the Mortgage, and
because her confusion between the concepts of “dower” and “dowry” similarly undermined her
testimony. Although the fact that Marcy testified by affidavit prevented the bankruptcy court
from evaluating her demeanor, it did not stop the court from evaluating credibility.          The
bankruptcy court did not credit the portion of Marcy’s testimony that she meant only to release
her dower interest, despite initialing each page of the Mortgage (including where the legal
description of the collateral appeared), and despite signing as “Borrower” on the signature page.

       The court also noted that the Mortgage itself appeared to recognize that “any Borrower
who co-signs this Security Instrument but does not execute the Note (a ‘co-signer’): (a) is co-
signing this Security instrument only to mortgage, grant and convey the co-signer’s interest in
the Property under the terms of this Security Instrument. . . .” (Mem. Op. at 5). The court found
no documentary evidence to suggest that Marcy signed the Mortgage only to release her dower
rights, as she contended in one of her two affidavits (and as Appellant’s counsel argued below).
Tellingly, the description of the Property within the Mortgage contained no language indicating
that the refinancing lender intended to take a first mortgage in half of the Property.

       Having carefully considered the bankruptcy court’s opinion and the record on appeal, the
Panel regards the Mortgage as equivocal regarding the identity of the “Borrower,” and finds no
 No. 16-8042                                 In re Perry                                 Page 11


clear error in the bankruptcy court’s factual finding (based on parol evidence) that by signing the
Mortgage, both Debtors intended to encumber their entire interest in the Property to secure the
Note.

                                            CONCLUSION

        To summarize, in rulings that conformed to the Ohio Supreme Court’s recent opinion
even before the high court issued it, the bankruptcy court properly admitted parol evidence of the
parties’ intent after recognizing a crucial ambiguity in the Mortgage regarding the identity of the
“Borrower.” Following trial on the merits, the bankruptcy court determined that the Mortgage
encumbered not just Vodrick’s interest in the Property, but Marcy’s also. The Panel finds no
error in the bankruptcy court’s decision.

        For these reasons, we AFFIRM the judgment of the bankruptcy court in all respects.
