[Cite as Huntington Natl. Bank v. Filippi, 2015-Ohio-3096.]


                      IN THE COURT OF APPEALS OF OHIO
                          THIRD APPELLATE DISTRICT
                               UNION COUNTY




THE HUNTINGTON NATIONAL BANK,

       PLAINTIFF-APPELLEE,
                                                              CASE NO. 14-15-03
       v.

LORIE FILIPPI,

       DEFENDANT-APPELLANT,

       -and-                                                  OPINION

TREASURER OF UNION COUNTY, ET AL.,

       DEFENDANTS-APPELLEES.



                  Appeal from Union County Common Pleas Court
                           Trial Court No. 2013-CV-0073

                                      Judgment Affirmed

                             Date of Decision: August 3, 2015



APPEARANCES:

        Thomas M. Tyack for Appellant

        Darryl E. Gormley and Rachel M. Kuhn for Appellee
Case No. 14-15-03



ROGERS, P.J.

       {¶1} Defendant-Appellant, Lorie Filippi (“Lorie”), appeals the judgment of

the Court of Common Pleas of Union County, which granted Plaintiff-Appellee’s,

the Huntington National Bank’s (“Huntington”), motion for summary judgment.

On appeal, Lorie argues that the trial court erred: (1) in finding that the failure of

Huntington to comply with federal regulations promulgated by the Department of

Housing and Urban Development (“HUD”) was an affirmative defense as opposed

to a condition precedent; and (2) by granting Huntington’s motion for summary

judgment. For the reasons that follow, we affirm the trial court’s judgment.

       {¶2} On June 16, 2005, Lorie and Joseph Filippi (“Joseph”) (collectively

“the Filippis”) executed a promissory note (“the Note”) with Dominion Homes

Financial Services (“Dominion Homes”) for a loan in the amount of $237,200.

The last page of the Note bears an endorsement from Dominion Homes to

Huntington, reading “pay to the order of the Huntington National Bank without

recourse.” (Docket No. 1, Exhibit A, p. 2). The Note was secured by a mortgage

(“Mortgage”) encumbering property located at 614 Kentucky Circle, Marysville,

Ohio (“Property”).

       {¶3} On March 15, 2013, Huntington filed a complaint for foreclosure. In

its complaint, Huntington alleged that it was the holder of the Note; that it was the

holder of the Mortgage; that the Filippis were in default of payment of the Note


                                         -2-
Case No. 14-15-03


and Mortgage securing the same; and, that a balance of $210,070.78, plus interest

remained outstanding on the Note. Attached to the complaint was a copy of the

Note, Mortgage, and a mortgage assignment. Huntington requested judgment

against the Filippis for the outstanding balance on the Note, plus interest, and that

the trial court order the sale of the Property.

        {¶4} On March 28, 2013, Lorie filed her answer.1 She generally denied the

allegations in the complaint and also asserted two defenses. She first claimed that

Huntington failed to state a claim upon which relief may be granted. Lorie then

alleged that Huntington “failed to comply with the regulations pronounced by the

Secretary of Housing and Urban Development as to actions which must be taken

prior to initiating any foreclosure action. By reason thereof, this action may not

proceed.” (Docket No. 44, p. 2).

        {¶5} Huntington filed a motion for summary judgment on January 6, 2014,

arguing that there were no genuine issues of material fact and that it was entitled

to judgment as a matter of law. In support of its motion for summary judgment,

Huntington attached a copy of the Note, Mortgage, and mortgage assignment. In

addition to the foregoing documents, Huntington filed an affidavit of one of its

employees, Michael Mantilla. In his affidavit, Mantilla, a litigation specialist,

attested that Huntington holds the Note, that the copies of the Note and Mortgage

1
  We note that only Lorie filed an answer. At some point in between the execution of the Note and the
foreclosure, Lorie and Joseph divorced. As part of the divorce settlement, Lorie received the Property,
which was their marital home. Joseph never filed an answer and default judgment was later entered against
him.

                                                  -3-
Case No. 14-15-03


are true and accurate copies of the original instruments, and that the Filippis are in

default and owe a principal sum of $210,070.78 plus interest.

       {¶6} On April 24, 2014, Lorie filed a memorandum in opposition to

Huntington’s motion for summary judgment. Lorie argued that the trial court

should deny Huntington’s motion as it failed to comply with HUD regulations.

Specifically, Lorie alleged that Huntington was obligated to have a “face to face

meeting [with Lorie] before filing for foreclosure.” (Docket No. 94, p. 2). Lorie

further asserted that Huntington never met with her before it filed its complaint.

In support of her memorandum, Lorie attached her affidavit where she attested

that at no time was she provided with a face to face meeting with Huntington

before the filing of the foreclosure complaint. (Docket No. 95).

       {¶7} On May 21, 2014, Huntington filed a reply to Lorie’s memorandum in

opposition.   Huntington argued that Lorie failed to plead with specificity or

particularity the denial of a condition precedent or affirmative defense as required

by Civ.R. 9(C). By failing to plead the condition precedent with specificity and

particularity, Huntington argued that it was deemed admitted.

       {¶8} Huntington filed a request for ruling on October 17, 2014. The trial

court filed its judgment entry granting summary judgment in favor of Huntington

on December 31, 2014.

       {¶9} It is from this judgment that Lorie appeals, presenting the following

assignments of error for our review.

                                         -4-
Case No. 14-15-03


                            Assignment of Error No. I

      THE TRIAL COURT ERRED IN RULING THAT THE
      FAILURE OF THE FINANCIAL INSTITUTION TO
      COMPLY WITH HUD REGULATION FOUND IN C.F.R. §
      203.64 WAS [AN] AFFIRMATIVE DEFENSE AS OPPOSED
      TO A CONDITION PRECEDENT TO MAINTAINING A
      FORECLOSURE ACTION.

                           Assignment of Error No. II

      THE TRIAL COURT ERRED GRANTING [SIC] SUMMARY
      JUDGMENT TO PLAINTIFF, WHEN DEFENDANT
      ESTABLISHED EVIDENCE, [SIC] PLAINTIFF FAILED TO
      COMPLY WITH THE HUD REGULATION AS TO
      GRANTING FACE-TO-FACE MEETING WITH HER AS AN
      OBLIGOR ON THE NOTE AS MANDATED BY THE HUD
      REGULATIONS.

                            Assignment of Error No. I

      {¶10} In her first assignment of error, Lorie argues that the trial court erred

in finding that HUD regulations are an affirmative defense rather than a condition

precedent. We agree.

                    Condition Precedent or Affirmative Defense

      {¶11} Both parties agree that Lorie’s loan and mortgage were subject to

HUD regulations. On appeal, Lorie argues that Huntington did not comply with

24 C.F.R. § 203.604, which states:

      (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

                                        -5-
Case No. 14-15-03


      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 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:

          (1) The mortgagor does not reside in the mortgaged property,

          (2) The mortgaged property is not within 200 miles of the
              mortgagee, its servicer, or a branch office of either,

          (3) The mortgagor has clearly indicated that he will not cooperate
              in the interview,

          (4) A repayment plan consistent with the mortgagor's
              circumstances is entered into to bring the mortgagor's account
              current thus making a meeting unnecessary, and payments
              thereunder are current, or

          (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.

Lorie argues that the HUD regulations create a condition precedent, whereas

Huntington contends that the failure to comply with the HUD regulations is an

affirmative defense. Such a difference is important as “an affirmative defense is

separate from the merits of the plaintiff’s cause of action and bars recovery even


                                        -6-
Case No. 14-15-03


when the plaintiff has established a prima facie case, [while] a condition precedent

is directly tied to the merits of the plaintiff’s cause of action, which is itself

contingent upon satisfaction of the condition.” Natl. City Mtge. Co. v. Richards,

182 Ohio App.3d 534, 2009-Ohio-2556, ¶ 20 (10th Dist.). Affirmative defenses

and condition precedents each carry a different burden for pleading and summary

judgment purposes. PNC Mtge. v. Garland, 7th Dist. Mahoning No. 12 MA 222,

2014-Ohio-1173, ¶ 23.

       {¶12} If compliance with the HUD regulations is a condition precedent,

then “the bank must generally aver in its complaint that it has complied with all

conditions precedent, the borrower then has a reciprocal burden to allege with

specificity and particularity how the bank failed to comply.” Id., citing Civ.R.

9(C). Thus, in a motion for summary judgment, the bank has the burden to

establish the absence of any material fact on the issue of whether it complied with

a specific HUD regulation. Garland at ¶ 23, citing Dresher v. Burt, 75 Ohio St.3d

280, 294 (1996). “Alternatively, if compliance is deemed an affirmative defense,

the bank has no pleading burden in its complaint; the borrower must generally

allege non-compliance as an affirmative defense in its answer.” Garland at ¶ 24.

On summary judgment, the bank has no burden to discuss compliance with HUD

regulations. Instead, the borrower has the burden of proving his or her affirmative

defense in the brief in opposition to summary judgment. Id., citing Wells Fargo

Bank, N.A., v. Goebel, 2d Dist. Montgomery No. 25745, 2014-Ohio-472, ¶ 16.

                                        -7-
Case No. 14-15-03


         {¶13} This is a matter of first impression for this district.2                         However,

several other Ohio courts of appeals have recently decided this issue. The Fifth

and Seventh Districts have expressly held that compliance with HUD regulations

is a condition precedent, whereas the Second District has held that a bank’s failure

to comply with HUD regulations is an affirmative defense. Compare Garland at ¶

27; and U.S. Bank, N.A. v. Detweiler, 191 Ohio App.3d 464, 2010-Ohio-6408, ¶

54-57 (5th Dist.) with Goebel at ¶ 23-25.

         {¶14} In Goebel, the Second District Court of Appeals found that

noncompliance with HUD regulations is an affirmative defense, in part, because

the law disfavors conditions precedent. Id. at ¶ 24. The court recognized that

“courts will avoid construing a provision as a condition precedent unless the intent

to create such a condition is obvious.” Id., citing Rudd v. Online Resources, Inc.,

2d Dist. Montgomery No. 17500, 1999 WL 397351, *7 (June 18, 1999).

However, we find that there is a clear intent to make the face-to-face meeting

requirement of 24 C.F.R. § 203.604 a condition precedent to foreclosure.

Specifically, we find the following reasoning from the Seventh District Court of

Appeals to be persuasive.


2
 Although rudimentary, we feel obligated to explain that the State of Ohio is divided into 12 judicial court
of appeals districts. See Article IV, section 3, Ohio Constitution; R.C. 2501.01. In her brief, Appellant
argued, multiple times, that this court should “re-examine the position it took in Wells Fargo [Bank, N.A. v.
Goebel, 2d Dist. Montgomery No. 25745, 2014-Ohio-472].” (Appellant’s Br., p. 8); see also (id. at p. 9).
Appellant filed her appeal in the Third District Court of Appeals, not the Second District Court of Appeals.
While opinions of our sister district courts may be persuasive, they are not binding on this court. We have
no authority to re-examine or overrule an opinion issued by a different district, although we may certainly
disagree with its legal reasoning and outcome.

                                                    -8-
Case No. 14-15-03


      [T]he overall regulatory scheme enacted by HUD must be
      considered. Importantly, 24 C.F.R. 203.500 states: “It is the intent
      of the Department [of Housing and Urban Development] that no
      mortgagee shall commence foreclosure * * * until the requirements
      of this subpart have been followed.” As to specific regulatory
      language pertinent to this appeal * * * 24 C.F.R. 203.604(b) * * *
      provides: “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. * * *.” Subsection (c) goes on to provide several
      exceptions to the face-to-face meeting requirement. * * *

      These regulations evince HUD's clear intent that banks must comply
      with the face-to-face interview * * * before commencing foreclosure
      actions. In other words, a bank's foreclosure action is contingent
      upon satisfaction of these regulations and is therefore a condition
      precedent.

(Emphasis added.) Garland, 2014-Ohio-1173, ¶ 26-27.

      {¶15} Also of importance, many Ohio courts have held that “ ‘[w]here prior

notice of default and/or acceleration is required by a provision in a note or

mortgage instrument, the provision of notice is a condition precedent,’ and subject

to the requirements of Civ.R. 9(C).” Richards, 2009-Ohio-2556, ¶ 21, quoting

First Financial Bank v. Doellman, 12th Dist. Butler No. CA2006-02-029, 2007-

Ohio-222, ¶ 20; see also Huntington Bank v. Popovec, 7th Dist. Belmont No. 12

MA 119, 2013-Ohio-4363, ¶ 15.         We find that compliance with the HUD

regulations is analogous to compliance with the notice requirements in Richards,

Doellman, and Popovec. Accord Garland at ¶ 28.




                                        -9-
Case No. 14-15-03


       {¶16} For the aforementioned reasons, we find that compliance with HUD

regulations is a condition precedent and is subject to the pleading requirements of

Civ.R. 9(C).

       {¶17} Accordingly, we sustain Lorie’s first assignment of error.

                            Assignment of Error No. II

       {¶18} In her second assignment of error, Lorie contends that the trial court

erred in granting summary judgment in favor of Huntington. Lorie argues that

there is a genuine issue of material fact as to whether Huntington complied with

the applicable HUD regulations. Specifically, Lorie avers that she was never

afforded a face-to-face meeting with Huntington before the foreclosure complaint

was filed, and thus, the foreclosure cannot proceed. We disagree.

                                Standard of Review

       {¶19} An appellate court reviews a summary judgment order de novo.

Hillyer v. State Farm Mut. Auto. Ins. Co., 131 Ohio App.3d 172, 175 (8th

Dist.1999). Accordingly, a reviewing court will not reverse an otherwise correct

judgment merely because the lower court utilized different or erroneous reasons as

the basis for its determination. Diamond Wine & Spirits, Inc. v. Dayton

Heidelberg Distrib. Co., Inc., 148 Ohio App.3d 596, 2002-Ohio-3932, ¶ 25 (3d

Dist.), citing State ex rel. Cassels v. Dayton City School Dist. Bd. of Edn., 69 Ohio

St.3d 217, 222 (1994). Summary judgment is appropriate when, looking at the

evidence as a whole: (1) there is no genuine issue as to any material fact, and (2)

                                        -10-
Case No. 14-15-03


the moving party is entitled to judgment as a matter of law. Civ.R. 56(C). In

conducting this analysis the court must determine “that reasonable minds can

come to but one conclusion and that conclusion is adverse to the party against

whom the motion for summary judgment is made, [the nonmoving] party being

entitled to have the evidence or stipulation construed most strongly in the

[nonmoving] party’s favor.” Id. If any doubts exist, the issue must be resolved in

favor of the nonmoving party. Murphy v. City of Reynoldsburg, 65 Ohio St.3d

356, 358-359 (1992).

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

producing some evidence which demonstrates the lack of a genuine issue of

material fact. Dresher, 75 Ohio St.3d at 292. In doing so, the moving party is not

required to produce any affirmative evidence, but must identify those portions of

the record which affirmatively support his argument. Id. at 292. The nonmoving

party must then rebut with specific facts showing the existence of a genuine triable

issue; he may not rest on the mere allegations or denials of his pleadings. Id.;

Civ.R. 56(E).

                                      Waiver

       {¶21} Although we found that compliance with HUD regulations is a

condition precedent, Huntington argues that Lorie has waived this argument by

failing to plead it with particularity in her answer.     Under Civ.R. 9(C), “In

pleading the performance or occurrence of conditions precedent, it is sufficient to

                                       -11-
Case No. 14-15-03


aver generally that all conditions precedent have been performed or have

occurred.” However, “A denial of performance or occurrence shall be made

specifically and with particularity.”    (Emphasis added.)      Id.   If conditions

precedent are not denied in the manner outlined by Civ.R. 9(C), then they are

deemed admitted. Garland, 2014-Ohio-1173, ¶ 32.

       {¶22} Here, Huntington’s complaint generally alleged compliance with all

conditions precedent. See (Docket No. 2, p. 4). This was sufficient under Civ.R.

9(C) to shift the burden to Lorie to show noncompliance with specific HUD

regulations. In her answer, Lorie’s allegations regarding noncompliance with

HUD regulations were general in nature, and she failed to cite to any specific

regulation:

                               THIRD DEFENSE

              Defendant avers that Plaintiff has failed to comply with the
       regulations pronounced by the Secretary of Housing and Urban
       Development as to actions which must be taken prior to initiating
       any foreclosure action. By reason thereof, this action may not
       proceed.

(Docket No. 44, p. 2).

       {¶23} We find that Lorie failed to state, with the specificity required by

Civ.R. 9(C), which HUD regulations Huntington failed to comply with before it

filed its foreclosure complaint. Similarly in Garland, in her answer, the defendant

generally alleged that the bank “failed to comply with the regulations issued by the

Secretary of Housing and Urban Development in order to require immediate

                                        -12-
Case No. 14-15-03


payment in full and plaintiff failed to comply with HUD regulations prior to the

acceleration of the promissory note.” 2014-Ohio-1173, ¶ 34. The court found that

the defendant failed to “state with the specificity required by Civ.R. 9(C),

precisely which HUD regulations PNC Mortgage failed to comply with before

filing the instant foreclosure action.” Id. at ¶ 35.

       {¶24} “[T]he effect of the failure to deny conditions precedent in the

manner provided by in Civ.R. 9(C) is that they are deemed admitted.” Wells

Fargo Bank v. Ramsey, 7th Dist. Mahoning No. 13 MA 138, 2015-Ohio-2107, ¶

24, citing Garland at ¶ 32-35; Civ.R. 8(D). As a result, Lorie was barred from

later contesting Huntington’s alleged noncompliance in her brief in opposition to

Huntington’s motion for summary judgment, and now on appeal. Since Lorie

waived the issue of noncompliance, the trial court did not err in granting summary

judgment in favor of Huntington.

       {¶25} Accordingly, we overrule Lorie’s second assignment of error.

       {¶26} In conclusion, we find that compliance with HUD regulations is a

condition precedent to initiating a foreclosure action. In holding otherwise, the

trial court erred.    However, we find that the trial court correctly granted

Huntington’s motion for summary judgment since Lorie waived the argument by

failing to comply with Civ.R. 9(C). Therefore, although the reasoning of the trial

court was flawed, the outcome was correct, and we affirm the judgment of the trial

court based upon different grounds. See In re Estate of Dorothy Mason, 3d Dist.

                                          -13-
Case No. 14-15-03


Hancock No. 5-04-01, 2004-Ohio-5644, ¶ 34; see also State v. Rubes, 11th Dist.

Portage No. 2012-P-0009, 2012-Ohio-4100, ¶ 33 (reviewing courts affirm and

reverse judgments, not reasons).

       {¶27} Having found no error prejudicial to Lorie in the particulars assigned

and argued, we affirm the trial court’s decision.

                                                              Judgment Affirmed

SHAW and WILLAMOWSKI, J.J., concur.

/hlo




                                        -14-
