[Cite as Quicken Loans, Inc. v. Jodlowski, 2017-Ohio-8999.]


                                       COURT OF APPEALS
                                      STARK COUNTY, OHIO
                                   FIFTH APPELLATE DISTRICT


 QUICKEN LOANS, INC.                                   :      JUDGES:
                                                       :
                                                       :      Hon. Patricia A. Delaney, P.J.
        Plaintiff-Appellee                             :      Hon. William B. Hoffman, J.
                                                       :      Hon. Earle E. Wise, Jr., J.
 -vs-                                                  :
                                                       :      Case No. 2017CA00104
                                                       :
 BETTY JEAN JODLOWSKI, ET AL.                          :
                                                       :
                                                       :
        Defendants-Appellants                          :      OPINION


CHARACTER OF PROCEEDING:                                      Appeal from the Stark County Court of
                                                              Common Pleas, Case No.
                                                              2016CV00485



JUDGMENT:                                                     AFFIRMED




DATE OF JUDGMENT ENTRY:                                       December 12, 2017




APPEARANCES:

 For Plaintiff-Appellee:                                      For Defendants-Appellants:

 ASHLEY E. MUELLER                                            TIMOTHY D. MCKINZIE
 JASON A. WHITACRE                                            VINCENT E. SAWYER IV
 4500 Courthouse Blvd., Suite 400                             593 White Pond Dr.
 Stow, OH 44224                                               Akron, OH 44320
Stark County, Case No. 2017CA00104                                                          2



Delaney, P.J.

       {¶1} Defendant-Appellant Betty Jean Jodlowski appeals the May 24, 2017

judgment entry of the Stark County Court of Common Pleas.

                        FACTS AND PROCEDURAL HISTORY

       {¶2} On January 18, 2011, Defendant-Appellant Betty Jean Jodlowski executed

a Note and Mortgage in favor of Plaintiff-Appellee Quicken Loans, Inc. As part of the

mortgage agreement, Quicken Loans maintained an escrow account on behalf of

Jodlowski. The escrow account was funded by Jodlowski’s monthly mortgage payments

and Quicken Loans paid the property taxes on the mortgaged property.

       {¶3} On September 29, 2015, Quicken Loans notified Jodlowski she was in

default of the terms of the Note and Mortgage. Jodlowski’s last mortgage payment was

on August 1, 2015. Jodlowski did not remedy the default.

       {¶4} On March 2, 2016, Quicken Loans filed a complaint in foreclosure against

Jodlowski. Jodlowski filed an answer on March 28, 2016.

       {¶5} On July 11, 2016, Jodlowski filed an amended answer and asserted

counterclaims for negligence and breach of contract. During the discovery process, it was

discovered that Quicken Loans had failed to pay the property taxes due for the 2010 and

2011 tax years. The failure to pay the property taxes resulted in penalties and interest.

       {¶6} On December 30, 2016, Quicken Loans sent a letter to Jodlowski admitting

it erroneously failed to pay the property taxes due for the 2010 and 2011 tax years. The

letter stated upon discovery of the error, Quicken Loans paid the due and owing property

taxes for the 2010 and 2011 tax years with the funds from Jodlowski’s escrow account.

Upon a review of the escrow account, however, Quicken Loans determined that funds
Stark County, Case No. 2017CA00104                                                        3


from the escrow account were used to pay the resulting penalties and interest in the

amount of $356.02. Quicken Loans stated this was in error and remitted a check in the

amount of $356.02 to Jodlowski.

       {¶7} Quicken Loans filed a motion for summary judgment on February 21, 2017.

In its motion, Quicken Loans stated it was entitled to judgment as a matter of law on its

complaint and the counterclaims raised by Jodlowski. Jodlowski did not respond to the

motion for summary judgment and the trial court granted the judgment in favor of Quicken

Loans on March 16, 2017. The decree in foreclosure was issued on March 27, 2017.

       {¶8} Jodlowski filed a motion for relief from judgment on March 23, 2017 and an

amended motion for relief from judgment on April 21, 2017. In her motion, she argued her

failure to respond to Quicken Loan’s motion for summary judgment was due to excusable

neglect. Her attorney did not receive the motion due to an error in office filing. Jodlowski

also contended she had a meritorious claim to present against Quicken Loans. She stated

she had a viable claim for negligence and breach of contract based on the failure of

Quicken Loans to pay her property taxes with her escrow account.

       {¶9} Quicken Loans responded to the motion for relief from judgment. The trial

court did not hold a hearing.

       {¶10} On May 24, 2017, the trial court denied Jodlowski’s motion for relief from

judgment. The trial court found Jodlowski did not assert a meritorious defense and was

not entitled to relief pursuant to Civ.R. 60(B).

       {¶11} It is from this judgment Jodlowski now appeals.
Stark County, Case No. 2017CA00104                                                          4


                                ASSIGNMENT OF ERROR

       {¶12} Jodlowski raises one Assignment of Error:

       {¶13} “THE TRIAL COURT ABUSED ITS DISCRETION IN DETERMINING THAT

DEFENDANT        DID   NOT     HAVE     MERITORIOUS         COUNTERCLAIMS          AGAINST

PLAINTIFF WHEN DENYING THE MOTION TO VACATE SUMMARY JUDGMENT.”

                                        ANALYSIS

       {¶14} Jodlowski argues in her sole Assignment of Error that the trial court abused

its discretion when it denied her motion for relief from judgment. The decision whether to

grant a motion for relief from judgment under Civ.R. 60(B) lies within the trial court's sound

discretion. Griffey v. Rajan, 33 Ohio St.3d 75, 514 N.E.2d 1122 (1987). In order to find

abuse of discretion, we must determine the trial court's decision was unreasonable,

arbitrary, or unconscionable. Blakemore v. Blakemore, 5 Ohio St.3d 217, 219, 450 N.E.2d

1140 (1983).

       {¶15} A party seeking relief from judgment pursuant to Civ.R. 60(B) must show:

“(1) a meritorious defense or claim to present if relief is granted; (2) entitlement to relief

under one of the grounds set forth in Civ.R. 60(B)(1)–(5); and (3) the motion must be

timely filed.” GTE Automatic Electric, Inc. v. ARC Industries, Inc., 47 Ohio St.2d 146, 351

N.E.2d 113 (1976), paragraph two of the syllabus. A failure to establish any one of the

three requirements will cause the motion to be overruled. Rose Chevrolet, Inc. v. Adams,

36 Ohio St.3d 17, 20, 520 N.E.2d 564 (1988); Argo Plastic Prod. Co. v. Cleveland, 15

Ohio St.3d 389, 391, 474 N.E.2d 328 (1984).
Stark County, Case No. 2017CA00104                                                       5


                                   Excusable Neglect

       {¶16} Jodlowski argued in her motion to the trial court that her failure to respond

to the motion to summary judgment was due to excusable neglect, she had meritorious

defense or claim to present if relief was granted, and the motion was made within a

reasonable time. In its judgment entry denying Jodlowski’s motion for relief from

judgment, the trial court stated it did not find Jodlowski demonstrated she had a

meritorious defense or claim. The trial court’s judgment entry did not address the issue of

excusable neglect. In her appeal of the trial court’s judgment entry, Jodlowski argues in

her Assignment of Error that the trial court abused its discretion when it found Jodlowski

did not have a meritorious counterclaim. Jodlowski does not separately assign as error

the issue of excusable neglect, and because she has not assigned this issue as a

separate assignment of error, we decline to address it. App.R. 12(A)(2); App.R. 16(A).

See Weaver v. Pillar, 5th Dist. Tuscarawas No. 2011 AP 03 0017, 2012-Ohio-33, ¶ 14.

Further, pursuant to Rose Chevrolet, Inc., supra, we find the trial court was not required

to address the issue of excusable neglect because the failure of the moving party to

establish any one of the three GTE requirements will cause the motion to be overruled.

                             Meritorious Defense or Claim

       {¶17} Jodlowski argues in her appeal that the trial court abused its discretion

when it found she did not present any meritorious claims if relief was granted. In her

amended answer, Jodlowski raised claims of negligence and breach of contract. She

argued Quicken Loans had a duty to use the funds Jodlowski deposited in escrow to pay

property taxes for the mortgaged property. Quicken Loans admitted it failed to timely pay

the property taxes. She contends that failure caused damages in the form of taxes and
Stark County, Case No. 2017CA00104                                                         6


penalties, as well as damages to Jodlowski’s reputation because the delinquent taxes

were public record.

       {¶18} Quicken Loans addressed Jodlowski’s counterclaims in its motion for

summary judgment. It stated that Jodlowski could not support a claim for negligence

because Quicken Loans did not owe Jodlowski a duty. It cited case law for the legal

proposition that the relationship between a creditor and debtor was not a fiduciary

relationship; therefore, Quicken Loans was not liable for errors in the administration of the

escrow account. Quicken Loans further argued it was entitled to judgment as a matter of

law on Jodlowski’s claim for breach of contract. Quicken Loans contended when it

recognized the error in the administration of the escrow account, it remedied the

outstanding property tax balance and refunded Jodlowski the amount of penalties and

interest. The alleged failure of Quicken Loans to timely pay the property taxes from the

escrow account did not prevent Jodlowski from performing under the terms of the Note

and Mortgage.

       {¶19} Upon our review, we find the trial court did not abuse its discretion to find

Jodlowski did not present a meritorious defense or claim if relief was granted. It has been

held, and Jodlowski concedes, that generally a relationship between a creditor and a

debtor is not fiduciary in nature. Fifth Third Bank of Western Ohio, N.A. v. Grigsby, 2nd

Dist. Miami No. 97CA06, 1997 WL 432213, * 8 (Aug. 1, 1997); Cairns v. Ohio Sav. Bank,

109 Ohio App.3d 644, 648, 672 N.E.2d 1058 (8th Dist.1996).

       {¶20} In Fifth Third Bank of Western Ohio, N.A. v. Grigsby, 2nd Dist. Miami No.

97CA06, 1997 WL 432213 (Aug. 1, 1997), the Second District Court of Appeals

specifically addressed the question of whether a bank administering an escrow account
Stark County, Case No. 2017CA00104                                                       7


based on the terms of a Note and Mortgage could be liable for negligence when the bank

incorrectly calculated the amount in the escrow account. The court found the mortgage

loan and escrow account did not create a fiduciary relationship between the mortgagor

bank and mortgagee:

             We agree that while the relationship of debtor and creditor by itself

      does not constitute a fiduciary relationship, fiduciary duties may adhere to

      an informal relationship where “both parties understand that a special trust

      or confidence has been reposed.” Umbaugh Pole Building Co., Inc. v. Scott,

      et al. (1979), 58 Ohio St.2d 282, 390 N.E.2d 320, paragraph one of the

      syllabus. The Supreme Court of Ohio has recently reaffirmed the principle

      that a debtor-creditor relationship is a fiduciary one only where a “special

      confidence and trust is reposed in the integrity and fidelity of another and

      there is a resulting position of superiority or influence, acquired by virtue of

      this special trust.” Ed Schory & Sons, Inc. v. Society National Bank (1996),

      75 Ohio St.3d 433, 662 N.E.2d 1074, 1081, quoting In re Termination of

      Employment of Pratt (1974), 40 Ohio St.2d 107, 115, 69 O.O.2d 512, 517,

      321 N.E.2d 603, 609.

             In this case, the Grigsbys have failed to adequately allege any

      “special confidence and trust” resulting from their interactions with the Bank.

      Moreover, any “position of superiority or influence” enjoyed by the Bank is

      the result of arm's length negotiations over the commercial mortgage loans,

      not a mutual understanding of special trust or confidence. The Supreme

      Court has expressly held that a fiduciary relationship does not emerge from
Stark County, Case No. 2017CA00104                                                        8

        the arm's length negotiation of terms and conditions of such loans. Blon v.

        Bank One, Akron, N.A. (1988), 35 Ohio St.3d 98, 102, 519 N.E.2d 363,

        368; Umbaugh, supra. The Grigsbys charge that the Bank was “the only

        party with access and control over the records” does not allege

        circumstances that differ from standard relations between banks and their

        customers such that they could give rise to a fiduciary relationship.

               In short, we believe that the trial court did not err in finding that no

        fiduciary relationship existed between the parties with respect to the

        administration of the loans or the escrow account. The Grigsbys entered

        into a relationship with “an institutional lender in a commercial context in

        which the parties dealt at arms length, each protecting his own

        interest.” Umbaugh, supra, 58 Ohio St.2d at 58, 12 O.O.3d at 282, 390

        N.E.2d at 323.

Id. at *8.

        {¶21} The Eighth District Court of Appeals in Cairns v. Ohio Sav. Bank, 109 Ohio

App.3d 644, 672 N.E.2d 1058 (8th Dist.1996) also held that a bank’s role as a mortgage

servicing agent managing an escrow account does not create a fiduciary relationship

between a creditor and lender. The court found the terms of the mortgage agreement did

not create a fiduciary relationship between the parties. Id. at *649. The court found that

the terms of the mortgage agreement required the bank to disburse funds to pay the

appellant’s property taxes and homeowner’s insurance. The agreement to disburse funds,

however, did not create a relationship in which “special confidence and trust is reposed

in the integrity and fidelity” of the bank. Id.
Stark County, Case No. 2017CA00104                                                      9


       {¶22} Based on the above case law, we find the trial court did not abuse its

discretion when it found Jodlowski did not have a meritorious claim for negligence.

Jodlowski entered into a mortgage loan agreement whereby Quicken Loans agreed to

disburse funds held in an escrow account to pay Jodlowski’s property taxes. Jodlowski

did not refer the trial court or this court to any language in the mortgage agreement

creating a fiduciary relationship between Quicken Loans and Jodlowski as to the

management of the escrow account. Jodlowski has not alleged any special confidence

and trust resulting from her interactions with Quicken Loans in the administration of the

escrow account. Accordingly, we find no fiduciary duties were created under these

circumstances.

       {¶23} Jodlowski next argues her claim for breach of contract is meritorious. She

states that by the terms of the mortgage agreement, Quicken Loans was to pay

Jodlowski’s property taxes from funds in the escrow account. Quicken Loans failed to

timely pay the property taxes for the 2010 and 2011 tax years, resulting in penalties and

interest. According to the December 30, 2016 letter from Quicken Loans to Jodlowski,

once Quicken Loans became aware of the error, it paid the property taxes for the 2010

and 2011 tax years. Quicken Loans also acknowledged that it erroneously paid the

penalties and interest from the escrow account. Quicken Loans refunded the amount of

penalties and interest to Jodlowski.

       {¶24} In order to prove a claim for breach of contract by Quicken Loans,

Jodlowski had to show: 1) the existence of a contract; 2) performance by the plaintiff; 3)

nonperformance by the defendant; and 4) damages as a result. Textron Fin. Corp. v.

Nationwide Mutual Insurance Co., 115 Ohio App.3d 137, 144, 684 N.E.2d 1261 (9th
Stark County, Case No. 2017CA00104                                                      10

Dist.1996), citing Garofalo v. Chicago Title Insurance Co., 104 Ohio App.3d 95, 108, 661

N.E.2d 218 (8th Dist.1995). A plaintiff must prove the elements of a breach of contract by

a preponderance of the evidence. Cooper & Pachell v. Haslage, 142 Ohio App.3d 704,

707, 756 N.E.2d 1248 (9th Dist.2001).

       {¶25} In her motion for relief from judgment, Jodlowski does not dispute any

statement made Quicken Loans in the December 30, 2016 letter as to the error made in

the payment of the property taxes and the resolution made by Quicken Loans. Jodlowski

has not alleged how she suffered damages as to the breach of contract beyond what was

addressed in the December 30, 2016 letter. Jodlowski claimed that she suffered damage

to her reputation due to the public records showing a delinquent tax payment, but damage

to reputation is a cause of action separate from breach of contract. We find that Jodlowski

cannot demonstrate the element of damages for breach of contract by a preponderance

of the evidence.

       {¶26} The trial court did not abuse its discretion when it denied Jodlowski’s motion

for relief from judgment based on her failure to demonstrate she had a meritorious

defense or claim if relief was granted. Jodlowski’s sole Assignment of Error is overruled.
Stark County, Case No. 2017CA00104                                                 11


                                   CONCLUSION

       {¶27} The judgment of the Stark County Court of Common Pleas is affirmed.

By: Delaney, P.J.,

Hoffman, J. and

Wise, Earle, J., concur.
