[Cite as Fifth Third Mtge. Co. v. Bell, 2013-Ohio-3678.]



                                     IN THE COURT OF APPEALS

                            TWELFTH APPELLATE DISTRICT OF OHIO

                                            MADISON COUNTY




FIFTH THIRD MORTGAGE COMPANY,                              :

        Plaintiff-Appellee,                                :   CASE NO. CA2013-02-003

                                                           :        OPINION
    - vs -                                                           8/26/2013
                                                           :

MARCIA C. BELL, et al.,                                    :

        Defendants-Appellants.                             :



         CIVIL APPEAL FROM MADISON COUNTY COURT OF COMMON PLEAS
                             Case No. CVE2012066



Lerner, Sampson & Rothfuss, Elizabeth S. Fuller, Kirk Sampson, 120 East Fourth Street, 8th
Floor, Cincinnati, Ohio 45202, for plaintiff-appellee

Doucet & Associates, Inc., Troy Doucet, Audra Tidball, 4200 Regent Street, Suite 200,
Columbus, Ohio 43219, for defendant-appellant, Greg A. Bell

Choctaw Lake Property Owners Association, c/o Michael Heyamer, 2875, Oneida Drive,
London, Ohio 43140, defendant, pro se

Susan L. Taylor and Larry R. Taylor, 402 North Broadmoor Boulevard, Springfield, Ohio
45504, defendant, pro se

Landes, Pickett and Troutman, Mark Troutman, Two Miranova Place, Suite 700, Columbus,
Ohio 43215-3742, for defendant, Fifth Third Bank (County Risk Sharing Authority)

Mark Landes, 250 East Broad Street, Suite 900, Columbus, Ohio 43215, for defendant,
County Risk Sharing Authority

Bethany Hamilton, Assistant United States Attorney, 303 Marconi Boulevard, Street 200,
Columbus, Ohio 43215, for United States of America
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        RINGLAND, P.J.

        {¶ 1} Defendant-appellant, Greg A. Bell a.k.a. Greg Bell (Bell), appeals a decision of

the Madison County Common Pleas Court granting summary judgment in favor of plaintiff-

appellee, Fifth Third Mortgage Company (FTMC), in a foreclosure suit.1

        {¶ 2} On July 29, 1997, Bell and his wife, Marcia, purchased a home in London,

Ohio.2 To finance the purchase, the Bells executed a promissory note in favor of State

Savings Bank in exchange for a loan amount of $212,000. The note was secured by an

open-end mortgage executed on the same day. On August 15, 2011, the mortgage was

assigned to FTMC.

        {¶ 3} In late 2011, the Bells defaulted on the payment obligations as set forth in the

note and mortgage. On January 4, 2012, the Bells received a notice of default and a notice

of intent to accelerate the note from FTMC. On February 29, 2012, FTMC filed a complaint

in foreclosure alleging the Bells were in default under the terms of the note and requested

enforcement of the mortgage. In the complaint, FTMC asserted it was in possession of the

note and entitled to enforce it. FTMC also alleged that the note was secured by a mortgage

which it was entitled to have foreclosed. Attached to the complaint was the originally

executed note and mortgage from the Bells to State Savings Bank. The note contained no

endorsements or an allonge.            Also attached to the complaint was an assignment of the

mortgage from Fifth Third Bank f.k.a. Fifth Third Bank, Central Ohio f.k.a. The Fifth Third

Bank of Columbus successor by merger to State Savings Bank to FTMC dated August 15,

2011. The assignment was recorded at the county recorder's office on September 6, 2011.


1. Pursuant to Loc.R. 6(A), we sua sponte remove this case from the accelerated calendar and place it on the
regular calendar for purposes of issuing this opinion.

2. Although Marcia C. Bell was named as a defendant in this action, Greg Bell is the only defendant-appellant to
this appeal. As indicated in the trial court's judgment entry, Marcia Bell filed for Chapter 13 Bankruptcy and
therefore no personal judgment was rendered against her. For ease of discussion, we refer to Greg Bell as
"Bell" and Greg and Marcia Bell as "the Bells."
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        {¶ 4} On August 22, 2012, FTMC moved for summary judgment. In support of the

motion, FTMC filed the affidavit of Jeff Brennan, an affidavit analyst for Fifth Third Bank, the

loan servicer for FTMC. Brennan averred that he had "personal knowledge of the facts

stated in [the] affidavit" and that he had access to the records relating to the mortgage loan

subject to this action. Attached to the affidavit was a copy of the promissory note. This note,

unlike the note attached to the complaint, contained two endorsements; a special
                                                                       3
endorsement to Fifth Third Bank and a blank endorsement.

        {¶ 5} Bell filed a memorandum in opposition to the motion for summary judgment or,

in the alternative, a motion under Civ.R. 56(F) to conduct additional discovery as to FTMC's

standing. Bell asserted that the note attached to the complaint did not confer standing to

FTMC.

        {¶ 6} The trial court granted summary judgment to FTMC on October 22, 2012. The

trial court also denied Bell's motion under Civ.R. 56(F), finding Bell failed to demonstrate that

additional time for discovery was necessary.

        {¶ 7} On November 7, 2012, Bell filed a motion to reconsider and a motion to dismiss

the complaint based on the Ohio Supreme Court's decision in Fed. Home Loan Mortg. Corp.

v. Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017, which was decided just days after the

trial court granted summary judgment. In this motion, Bell asserted FTMC lacked standing

and consequently requested that the complaint be dismissed. The trial court denied Bell's

motion, finding that FTMC had standing as the assignment of the mortgage occurred well

before the filing of the complaint. A final appealable order granting summary judgment, a

decree in foreclosure and reformation of the deed was filed on January 16, 2013. Bell


3. A blank endorsement is an endorsement by the holder that names no specific payee, thus making the
instrument payable to the bearer and negotiable by delivery only. Black's Law Dictionary (9th Ed. 2009); R.C.
1303.25(B). A special endorsement is an endorsement that identifies a person to whom it makes the instrument
payable. R.C. 1303.25(A).


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appeals the trial court's decision, raising three assignments of error for review. For ease of

discussion, we combine Bell's first and second assignments of error.

       {¶ 8} Assignment of Error No. 1:

       {¶ 9} THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT IN

[FTMC]'S FAVOR AND IN FAILING TO DISMISS THE COMPLAINT BECAUSE [FTMC] DID

NOT MEET ITS BURDEN OF ESTABLISHING IT HAD STANDING UNDER THE NOTE.

       {¶ 10} Assignment of Error No. 2:

       {¶ 11} THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT IN

[FTMC]'S FAVOR AND IN FAILING TO DISMISS THE COMPLAINT BECAUSE THE

EVIDENCE SUBMITTED BY [FTMC] DEMONSTRATES IT DID NOT COMPLY WITH

CONDITIONS PRECEDENT SET FORTH IN THE MORTGAGE AS A MATTER OF LAW.

       {¶ 12} In his first and second assignments of error, Bell challenges the trial court's

decision granting summary judgment in favor of FTMC. In his first assignment of error, Bell

asserts that summary judgment was improper and the complaint should have been dismissed

because FTMC failed to demonstrate it had standing under the note on the date the

complaint was filed. In his second assignment of error, Bell argues that summary judgment

was inappropriate because FTMC failed to establish that it had complied with all the

conditions precedent as required by the mortgage before filing this current action.

                                        A. Standing

       {¶ 13} "Standing is a preliminary inquiry that must be made before a trial court may

consider the merits of a legal claim." Kincaid v. Erie Ins. Co., 128 Ohio St.3d 322, 2010-

Ohio-6036, ¶ 9. As standing is a question of law, our review is de novo. In re Dye, 12th Dist.

Fayette Nos. CA2011-04-004, CA2011-04-005 and CA2011-04-006, 2012-Ohio-2570, ¶ 11.

       {¶ 14} Recently, the Supreme Court of Ohio addressed the issue of standing in a

foreclosure action.   Schwartzwald at ¶ 20-28.       In Schwartzwald, the Supreme Court
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determined that a plaintiff in a foreclosure action must have standing at the time the

complaint is filed in order to invoke the jurisdiction of the common pleas court. Id. at ¶ 24-25.

"It is an elementary concept of law that a party lacks standing to invoke the jurisdiction of the

court unless he has, in an individual or representative capacity, some real interest in the

subject matter of the action." (Emphasis sic.) Id. at ¶ 22. The court in Schwartzwald also

found that a lack of standing cannot be cured by "post-filing events" that supply standing. Id.

at ¶ 26. Moreover, a lack of standing "cannot be cured by receipt of an assignment of the

claim or by substitution of the real party in interest." Id. at ¶ 41. In Schwartzwald, the bank

conceded that there was no evidence it suffered any injury at the time it commenced the

foreclosure action, as it did not have an interest in the note or mortgage. Id. at ¶ 28.

Accordingly, the court found the bank did not have standing to invoke the jurisdiction of the

court. Id.

       {¶ 15} Bell asserts there was no evidence that "[FTMC] was in possession of the

[e]ndorsed note on the date of filing its complaint," and accordingly, FTMC lacked standing at

the time of filing the complaint. Bell asserts that "the current holder of the note is the party

with standing under the note." Contrary to Bell's arguments, Schwartzwald does not stand

for the proposition that only the holder of the note has standing.

       {¶ 16} Under the facts of this case, FTMC sufficiently established that it suffered an

injury at the time it filed this foreclosure action as it had an interest in the note and the

mortgage. Accordingly, FTMC satisfied the requirements of Schwartzwald and demonstrated

that it had standing.

       {¶ 17} In its complaint, FTMC alleged it was in possession and entitled to enforce a

note. It also alleged that the note was secured by a mortgage which it was entitled to

foreclose. FTMC attached to its complaint copies of the original promissory note and

mortgage executed by the Bells and State Savings Bank.              The mortgage specifically
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references the note, stating "[t]his debt is evidenced by Borrower's note dated the same date

as this Security Instrument." The note contains no endorsements. FTMC also attached the

assignment of the mortgage to FTMC from "Fifth Third Bank fka Fifth Third Bank, Central

Ohio fka The Fifth Third Bank of Columbus sbmt State Savings Bank."

        {¶ 18} On its face, the assignment shows a transfer of the mortgage from the original

lender, State Savings Bank, by State Saving's successor by merger, Fifth Third Bank, to

FTMC. The assignment was dated August 15, 2011, and recorded at the county recorder's

office on September 6, 2011. FTMC filed suit several months later on February 29, 2012.

Therefore, FTMC established it held an interest in the mortgage prior to the commencement

of the action by way of this assignment.

        {¶ 19} As to the note, the unendorsed copy of the note was insufficient to show that

FTMC was a "holder" of the note; however, this is not to say that FTMC did not have an

interest in the note or that it was not entitled to enforce it.

        {¶ 20} Ohio's version of the Uniform Commercial Code (U.C.C.) governs who may

enforce a note. R.C. 1301.01 et seq.4 Under R.C. 1303.31, a "person entitled to enforce" an

instrument includes the holder of the instrument. R.C. 1303.31(A)(1). A holder includes a

person who is in possession of an instrument payable to bearer. R.C. 1301.01(T)(1)(a).

"When an instrument is indorsed in blank, the instrument becomes payable to bearer and

may be negotiated by transfer of possession alone." R.C. 1303.25(B). Pursuant to R.C.

1303.31(A)(2), a nonholder in possession of the instrument who has the rights of a holder is

also entitled to enforce the instrument. An instrument is transferred when it is delivered by a

person, other than the issuer, for the purpose of giving the person receiving the delivery the



4. R.C. 1301.01 was repealed by Am.H.B. No. 9, 2011 Ohio Laws File 9, effective June 29, 2011. That act
amended the provisions of R.C. 1301.01 and renumbered that section so that it now appears at R.C. 1301.201.
Because R.C. 1301.201 only applies to transactions entered on or after June 29, 2011, we apply R.C. 1301.01 to
this appeal.
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right to enforce. R.C. 1303.22(A). If the transferee is not a holder because the transferor did

not endorse, the transferee is nevertheless a person entitled to enforce the instrument if the

transferor was a holder at the time of transfer. R.C. 1303.22(B); R.C. 1303.22 cmt. 2.

        {¶ 21} FTMC's allegations that it was in possession of a note and entitled to enforce it,

combined with the copy of the unendorsed note, at the very minimum, demonstrated that

FTMC was entitled to enforce as a nonholder in possession. See R.C. 1303.22 (B);

Deutsche Bank Natl. Trust Co. v. Gardner, 8th Dist. Cuyahoga No. 92916, 2010-Ohio-663, ¶

18-22. The note attached to the complaint was payable to State Savings Bank.5 Therefore,

State Savings Bank was the initial holder because the note was payable to it as an identified

person. R.C. 1303.25(A). The fact that FTMC was in possession of the unendorsed note

along with language used in the mortgage and the assignment of the mortgage showed a

chain of custody and indicated that State Savings Bank or some other person transferred the

note to FTMC with the intent that FTMC be entitled to enforce the note. Bell never

challenged FTMC's possession of this unendorsed note. Based on these facts, FTMC had

an interest in the note as a nonholder in possession.

        {¶ 22} FTMC's status as a nonholder in possession established its interest in the note

for the purposes of standing. Moreover, we note that at summary judgment, FTMC further

established its ability to enforce the note as a holder. At summary judgment, FTMC

presented an authenticated copy of the note which contained a blank endorsement. FTMC's

possession of this note sufficiently established its status as a holder. Former R.C.

1301.01(T)(1)(a).

        {¶ 23} Accordingly, based on these facts, FTMC demonstrated that it had standing at

the time it commenced this foreclosure action as it had an interest in the note and the


5. Section 1 of the note states: "In return for a loan that I have received, I promise to pay U.S. $212,000 * * *
to the order of the Lender. The Lender is State Savings Bank."
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mortgage. As FTMC satisfied the requirements of Schwartzwald and demonstrated that it

had standing, we now consider the merits of the foreclosure action.

                              B. Summary Judgment Motion

       {¶ 24} This court reviews a trial court's decision on summary judgment under a de

novo standard of review. Deutsche Bank Natl. Trust Co. v. Sexton, 12th Dist. Butler No.

CA2009-11-288, 2010-Ohio-4802, ¶ 7. Summary judgment is appropriate under Civ.R. 56

when (1) there is no genuine issue of material fact remaining to be litigated, (2) the moving

party is entitled to judgment as a matter of law, and (3) reasonable minds can come to but

one conclusion and that conclusion is adverse to the nonmoving party, who is entitled to have

the evidence construed most strongly in his favor. BAC Home Loans Serv., L.P. v. Kolenich,

194 Ohio App.3d 777, 2011-Ohio-3345, ¶ 17 (12th Dist.), citing Zivich v. Mentor Soccer Club,

Inc., 82 Ohio St.3d 367, 369-370 (1998). The party requesting summary judgment bears the

initial burden of informing the court of the basis for the motion and identifying those portions

of the record that demonstrate the absence of a genuine issue of material fact. Sexton at ¶

7. Once a party moving for summary judgment has satisfied its initial burden, the nonmoving

party “must then rebut the moving party's evidence with specific facts showing the existence

of a genuine triable issue; it may not rest on the mere allegations or denials in its pleadings.”

Id.; Civ.R. 56(E).

       {¶ 25} Specifically, as to foreclosure claims, "[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." Kolenich at ¶ 26; citing Countrywide Home Loans, Inc. v. Baker, 10th Dist. Franklin

No. 09AP-968, 2010-Ohio-1329, ¶ 8. On appeal, Bell does not challenge that the note and

mortgage were executed or delivered or that FTMC is the holder of the mortgage. Bell also

does not challenge the amount owed or that he was in default on the note. Rather, Bell's
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arguments focus on whether FTMC presented admissible evidence to establish that it was a

holder of the note and whether FTMC complied with all conditions precedent, required by the

mortgage, before filing this foreclosure action.

                              1. FTMC as Holder of the Note

       {¶ 26} In support of its motion for summary judgment, FTMC filed an affidavit from Jeff

Brennan, an affidavit analyst for Fifth Third Bank, the loan servicer for FTMC. Bell contends

that the endorsed note attached to Brennan's affidavit should not have been considered by

the trial court because it was not properly authenticated. Bell asserts that Brennan's affidavit

did not: (1) demonstrate his competency to testify and authenticate the note; (2) indicate that

he compared the copy to the original; or (3) indicate that FTMC was in possession of the note

endorsed in blank.

       {¶ 27} To be considered in a summary judgment motion, Civ.R. 56(E) requires an

affidavit to be made on personal knowledge, set forth such facts as would be admissible in

evidence, and affirmatively show that the affiant is competent to testify to the matters stated

in the affidavit. Civ.R. 56(E). "Absent evidence to the contrary, an affiant's statement that his

affidavit is based on personal knowledge will suffice to meet the requirement of Civ.R. 56(E)."

Wells Fargo Bank v. Smith, 12th Dist. Brown No. CA2012-04-006, 2013-Ohio-855, ¶ 16.

Additionally, documents referred to in an affidavit must be attached and must be sworn or

certified copies. Civ.R. 56 (E). Verification of these documents is generally satisfied by an

appropriate averment in the affidavit, for example, that "such copies are true copies and

reproductions." State ex rel. Corrigan v. Seminatore, 66 Ohio St.2d 459 (1981), paragraph

three of the syllabus; Deutsche Bank Natl. Trust Co. v. Najar, 8th Dist. Cuyahoga No. 98502,

2013-Ohio-1657, ¶ 20.

       {¶ 28} After a review of Brennan's affidavit, we find that it sets forth the necessary

information to be considered on summary judgment under Civ.R. 56(E). Brennan's affidavit
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stated his position as an Affidavit Analyst for Fifth Third Bank, the loan servicer for FTMC.

According to Brennan, as servicer, Fifth Third Bank is responsible for, among other things,

receiving and crediting payments made pursuant to the terms of notes and mortgages.

Brennan also stated that he had "personal knowledge of the facts stated in this affidavit" and

had reviewed the business records of Fifth Third Bank, including the mortgage loan at issue

in this case. Accordingly, Brennan's statement that he had "personal knowledge" of the facts

contained in the affidavit sufficiently established the personal knowledge requirement.

Moreover, Brennan's description of the relationship between Fifth Third Bank and FTMC, his

position with Fifth Third Bank, and his description of relevant business records also

sufficiently established his competency to testify to these matters. See Najar at ¶ 27;

Deutsche Bank Natl. Trust Co. v. Gardner, 8th Dist. Cuyahoga No. 92916, 2010-Ohio-663, ¶

10 (servicer of borrower's loan competent to testify regarding content of documents in

borrower's loan file with which he was personally familiar). In addition, contrary to Bell's

assertion, the affidavit specifically stated that Brennan personally examined Fifth Third

Bank's business records and attached a "true and accurate copy" of the promissory note

executed by the Bells. This statement indicates that Brennan compared the attached copy of

the note to the original note contained in Fifth Third Bank's records. Finally, the affidavit

implicitly indicates that FTMC is in possession of the note as Brennan had "direct access" to

Fifth Third's records, and after reviewing the records, attached a "true and accurate copy" of

the promissory note found in these records. Accordingly, Brennan's affidavit properly

authenticated the attached documents, including the note and mortgage.

       {¶ 29} Bell next contends that, even if the note was properly authenticated, the first

endorsement on the note is from Fifth Third Bank, Central Ohio and not the original lender,

State Savings Bank. Accordingly, Bell asserts there is a genuine issue of material fact as to

the validity of the endorsements and which entity was in possession of the note and entitled

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to enforce it. In making this argument, Bell contends FTMC failed to present competent

evidence under Civ.R. 56(E) to establish that State Savings Bank was merged into Fifth Third

Bank, Central Ohio.

       {¶ 30} The record indicates that FTMC filed a "Notice of Filing of Proof of Merger

Documents." These merger documents include a signed certificate by the secretary of

state's office and the seal of the office of secretary of state. Based on the certification, these

documents are self-authenticating under Evid.R. 902(4). SFJV 2005, L.L.C. v. Ream, 187

Ohio App.3d 715, 2010-Ohio-1615, ¶ 51 (2d Dist.). Moreover, this certification rendered the

documents admissible for summary judgment purposes. Koop v. Speedway SuperAmerica,

LLC, 12th Dist. Warren No. CA2008-09-110, 2009-Ohio-1734, ¶ 8-9 (documents submitted in

support or opposition of summary judgment must be sworn, certified, or otherwise

authenticated by affidavit.) These merger documents demonstrate that State Savings Bank

merged out of existence in 1998, with the surviving entity being titled The Fifth Third Bank of

Columbus and this entity later changed its name to Fifth Third Bank, Central Ohio which was

also eventually merged into Fifth Third Bank, Western Ohio, which changed its name to Fifth

Third Bank, in October 2000. Consequently, Fifth Third Bank, Central Ohio as the successor

by merger to State Savings Bank had the authority to endorse the promissory note. Fifth

Third Bank, Central Ohio endorsed the note to Fifth Third Bank, and Fifth Third Bank

subsequently endorsed the note in blank. As FTMC was in possession of the note containing

a valid blank endorsement, FTMC was the holder of the note and entitled to enforce it upon

Bell's default. See R.C. 1303.31; R.C. 1303.25(B).

       {¶ 31} Based on the foregoing, FTMC properly demonstrated its status as a holder of

the note by way of Brenan's affidavit.

                                     2. Notice of Default

       {¶ 32} Although Bell does not dispute that he was in default, in his second assignment
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of error, he argues that FTMC failed to meet its initial burden of showing that there was no

genuine issue of material fact regarding whether FTMC complied with the conditions

precedent as set forth in the mortgage prior to filing this foreclosure action. Specifically, Bell

claims that FTMC failed to provide him with at least 30 days to cure the default and failed to

notify him that the failure to cure would result in "judicial proceedings" and "sale of the

property."

       {¶ 33} If a note or mortgage requires notice of default and/or acceleration, the lender

must comply with the notice terms, or the complaint may be dismissed. See Fifth Third Mtge.

Co. v. Wizzard, 12th Dist. Butler No. CA2012-11-226, 2013-Ohio-3084, ¶ 27 ("under Ohio

law, a foreclosure action brought by a lender who has failed to comply with the notice terms

embodied in the note executed between the parties may be dismissed"). Paragraph 8 of the

note provides, in part:

              (C) Notice of Default
              If I am in default, the Note Holder may send me a written notice
              telling me that if I do not pay the overdue amount by a certain
              date, the Note Holder may require me to pay immediately the full
              amount of principal that has not been paid and all the interest that
              I owe on that amount. That date must be at least 30 days after
              the date on which the notice is delivered or mailed to me.

       {¶ 34} In addition, the mortgage states that the notice must specify "a date, not less

than 30 days from the date the notice is given to Borrower, by which the default must be

cured." (Emphasis added.) As to when notice was deemed to have been received,

Paragraph 14 of the mortgage provides:

              Any notice to Borrower provided for in this Security Instrument
              shall be given by delivering it or by mailing it by first class mail
              unless applicable law requires use of another method. * * * Any
              notice provided for in this Security Instrument shall be deemed to
              have been given to Borrower or Lender when provided in this
              paragraph.

       {¶ 35} In support of its motion for summary judgment, FTMC attached an


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authenticated copy of a demand letter sent to Bell. This letter, dated January 4, 2012, notified

Bell that he was in default on the mortgage loan and provided the amount that was

necessary to cure the default. Moreover, the letter stated: "In order to cure this default we

must receive the past due amount within 30 days from the date of this letter." (Emphasis

added.) The letter also informed Bell that the failure to pay the past due amount "will result in

acceleration of your loan and the foreclosure of the property."

       {¶ 36} After a review of the letter and the notice provisions found within the note and

mortgage, we find that FTMC complied with the conditions precedent before filing the

complaint in this case. As set forth in Paragraph 14 of the mortgage, the letter was deemed

received on the date it was mailed; specifically January 4, 2012. In addition, the letter

specified that Bell must cure the default "within 30 days." The note and mortgage each

provided the Bells with a minimum of 30 days in which to cure the default. As the letter

provided that Bell had the opportunity to cure the default before and up until the 30th day,

FTMC complied with the requirements of the note and mortgage that he receive "at least 30

days" or otherwise stated "not less than 30 days."       In addition, the record indicates that

FTMC did not file this foreclosure action until February 29, 2012, 56 days after Bell received

this notice, and well beyond the minimum 30-days requirement.

       {¶ 37} As to the issue of whether Bell was notified that the failure to cure would result

in "judicial proceedings" and the "sale of the property," the letter specifically stated that the

failure to cure "will result in acceleration of your loan and the foreclosure of the property."

Bell did not aver in his affidavit that he did not understand from this language that

"foreclosure" meant a judicial proceeding or could result in the sale of the property.

Accordingly, there is no genuine issue of fact as to whether Bell was notified that the failure

to cure would result in "foreclosure by judicial proceeding and sale of the property."

Accordingly, FTMC complied with all conditions precedent in the note and mortgage.
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      {¶ 38} As the trial court properly found that FTMC had standing to bring this

foreclosure action and that summary judgment was appropriate, Bell's first and second

assignments of error are overruled.

      {¶ 39} Assignment of Error No. 3:

      {¶ 40} THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT IN

[FTMC]'S FAVOR AND IN FAILING TO GRANT MR. BELL'S MOTION UNDER CIV.R. 56(F)

FOR TIME TO CONDUCT DISCOVERY BECAUSE GENUINE ISSUES OF MATERIAL

FACT EXIST CONCERNING MR. BELL'S DEFENSES OF UNCLEAN HANDS AND

[FTMC]'S FAILURE TO MITIGATE ITS DAMAGES.

      {¶ 41} In his third and final assignment of error, Bell argues the trial court erred in

denying his request under Civ.R. 56(F) for more time to conduct discovery regarding his

defenses of unclean hands and FTMC's failure to mitigate its damages. Bell further asserts

that genuine issues of material fact remained as to these defenses which precluded

summary judgment.

      {¶ 42} We begin by discussing Bell's request for additional time under Civ.R. 56(F).

Civ.R. 56(F) provides as follows:

             Should it appear from the affidavits of a party opposing the
             motion for summary judgment that the party cannot for sufficient
             reasons stated present by affidavit facts essential to justify the
             party's opposition, the court may refuse the application for
             judgment or may order a continuance to permit affidavits to be
             obtained or discovery to be had or may make such other order
             as is just.

Thus, "Civ.R. 56(F) 'affords a party a mechanism whereby it can seek deferral of action on a

motion for summary judgment so that it may obtain affidavits opposing the motion or conduct

discovery related to it.'" BAC Home Loans Servicing, L.P. v. Kolenich, 194 Ohio App.3d 777,

2011-Ohio-3345, ¶ 18 (12th Dist.), quoting Gates Mills Invest. Co. v. Pepper Pike, 59 Ohio

App.2d 155, 168-169 (8th Dist.1978). A party seeking a continuance to conduct discovery
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under Civ.R. 56(F) must support the motion by a proper affidavit. Kolenich at ¶ 18. General

averments requesting a continuance for the purpose of discovery are insufficient as the party

must state a factual basis and reasons why the party cannot present sufficient documentary

evidence without a continuance. Bank of Am., N.A. v. Singh, 12th Dist. Butler No. CA2012-

07-146, 2013-Ohio-1305, ¶ 16.

       {¶ 43} A trial court maintains discretion to manage the discovery process. Id. at ¶ 17.

Accordingly, on appeal, a decision regarding the regulation of discovery will not be reversed

absent an abuse of discretion. Kolenich at ¶ 19.

       {¶ 44} We find that the trial court did not abuse its discretion in refusing to continue the

matter so that additional discovery could be conducted. Bell properly supported the motion

by way of his affidavit. However, the affidavit failed to provide sufficient reasons why he was

unable to present evidence in support of his affirmative defenses without the continuance. In

his affidavit, Bell claimed his failure to conduct discovery in this case was based on FTMC's

alleged lack of standing and because he was "exploring other avenues to resolve this case."

The record indicates that the present lawsuit was commenced on February 29, 2012 and the

motion for summary judgment was not filed until August 22, 2012. At the time Bell filed his

answer, he was aware of his possible defenses including, unclean hands, the failure to

mitigate damages, and standing as he included these defenses in his answer. The Rules of

Civil Procedure allow parties to conduct discovery immediately "after the commencement of

the action." Civ.R. 33; Civ.R. 34. However, Bell admitted that he had "not conducted

discovery in this case." Given the fact that he had ample time to conduct discovery prior to

responding to the motion for summary judgment, yet failed to do so, we find the trial court did

not abuse its discretion in denying Bell's motion under Civ.R. 56(F).

       {¶ 45} As to Bell's defense of unclean hands, he argues that because this "foreclosure

action is based on Mr. Bell's alleged failure to make mortgage payments, the fact that Fifth
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Third [Bank] implied that it would help if Mr. Bell stopped making payments * * * shows that

[FTMC] does not have clean hands in relation to Mr. Bell's alleged default." Essentially, Bell

argues that FTMC's loan servicer, Fifth Third Bank, led him to believe FTMC would modify

his loan after he missed three payments.

       {¶ 46} In order for the doctrine of unclean hands to apply, the offending conduct must

constitute "reprehensible, grossly inequitable, or unconscionable conduct, rather than mere

negligence, ignorance, or inappropriateness. * * * Furthermore, ‘the unclean hands doctrine

should not be imposed where a party has legal remedies available to address an opposing

party's asserted misconduct.'" PNC Mtg. v. Innis, 12th Dist. Preble No. CA2010-10-013,

2011-Ohio-5594, ¶ 14, quoting Deutsche Bank National Trust Co. v. Pevarski, 187 Ohio

App.3d 455, 2010-Ohio-785, ¶ 24 (4th Dist.).

       {¶ 47} As an initial matter, we note that in reviewing the trial court's decision, it

appears the trial court arguably weighed the evidence, finding Bell's "reliance on an oral

statement from a customer service representative directing him to default on his mortgage

obligation was not reasonable." However, we do not find that such a choice of words

warrants a reversal in this case. Even accepting Bell's allegations as true, we cannot

conclude that there is a genuine issue of material fact regarding whether FTMC came to

court with "unclean hands," thus precluding summary judgment.

       {¶ 48} In opposing summary judgment, Bell filed his own affidavit in which he asserted

that after experiencing financial hardship, he contacted Fifth Third Bank "to see about a loan

modification" so that he could keep his home. He further averred: "When I contacted Fifth

Third Bank, the customer service representative to whom I spoke informed me that Fifth

Third [Bank] could not help unless I was three months behind on my mortgage payments."

Based on this representation, Bell claimed that he "reasonably interpreted this to mean that

[FTMC] would help if [he] became three months behind" on mortgage payments. However,
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according to Bell, FTMC later refused to provide any assistance and instead filed this current

action.

          {¶ 49} Even accepting Bell's allegations as true, we cannot conclude that FTMC acted

in bad faith, and thus had unclean hands. "[A lender's] decision to enforce the written

agreements cannot be considered an act of bad faith." Ed Schory & Sons, Inc. v. Soc. Natl.

Bank, 75 Ohio St.3d 433, 443 (1996). As discussed below, other appellate districts of this

state have addressed arguments similar to the arguments presented by Bell and each has

determined that a lender's decision to enforce a written agreement is not an act of bad faith.

          {¶ 50} In U.S. Bank Natl. Assn. v. Mobile Assoc. Natl. Network Sys., Inc., 195 Ohio

App.3d 699, 2011-Ohio-5284 (10th Dist.), borrowers asserted that the bank had agreed to

negotiate a modification and that the bank was estopped from foreclosing until the parties

completed the negotiations. In rejecting this argument, the Tenth District found that the

mortgage provided that the bank was entitled to immediately initiate foreclosure proceedings

in the event of a default, and therefore, the decision to pursue its contractual remedies could

not be considered an act of bad faith. Id. at ¶ 31-32.

          {¶ 51} Similarly, in CitiMortgage Inc. v. Parrish, 5th Dist. Delaware No. 12 CAE 02

0011, 2012-Ohio-3778, the court found the bank did not act in bad faith in pursuing

foreclosure on borrower's default where the mortgage did not require the bank to participate

in loan modification negotiations. Id. at ¶ 29. Rather, the mortgage gave the bank the right

to full payment and foreclosure on the borrower's breach. Id.

          {¶ 52} In GMAC Mtg., LLC v. Jackson, 3d Dist. Marion No. 9-13-01, 2013-Ohio-2150,

the borrower argued the bank had unclean hands because it represented that he should

intentionally miss his contractually obligated mortgage payments in order to qualify for their

modification process and he followed this advice to his detriment. According to the borrower,

if he had not received this advice, he would not have missed the payments. In rejecting this
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argument, the Third District noted that even if it accepted the borrowers allegations as true,

the borrower failed to present evidence that the bank told him he would qualify for a loan

modification or that the bank agreed to waive payment. Id. at ¶ 31, 34. The court also found

that the mortgage contained a clause which permitted the bank to accept payments from the

borrower but that did not waive any of borrower's obligations or prevent the lender from

insisting on strict performance of the mortgage obligations. Id. at ¶ 34. Accordingly, the

court concluded that based upon the "lack of proof of any agreement to waive payment, we

cannot find that the 'unclean hands' doctrine applies here, or that [borrower's] affidavit gives

rise to a genuine issue of material fact." Id. at ¶ 35. We find these cases to be persuasive.

       {¶ 53} Here, the note and mortgage required Bell to make monthly payments on the

first of each month. The failure to do so constituted default. Once Bell defaulted on the note

and mortgage, a fact that he readily admitted, the balance was accelerated, and FTMC was

entitled, pursuant to the parties' agreement, to pursue a foreclosure action against him. See

Wilborn v. BankOne Corp., 121 Ohio St.3d 546, 2009-Ohio-306, ¶ 18. There is nothing in the

mortgage which required FTMC to allow Bell to participate in loan modification or provide him

with "assistance" before exercising its right to foreclose. Rather, the mortgage document

gave FTMC the right, upon Bell's default, to pursue full payment and foreclosure without

satisfying any other conditions besides proper notice. Specifically, paragraph 21 of the

mortgage provides that if the Bells do not timely cure the default, FTMC has the option to

"require immediate payment in full of all sums secured by this Security Instrument without

further demand and may foreclose this Security Instrument by judicial proceeding."

Accordingly, FTMC's decision to pursue its contractual remedies cannot be considered to be

an act of bad faith.

       {¶ 54} Moreover, the allegations set forth in Bell's affidavit are insufficient to create an

inference of a modification of the terms of the parties' written agreement contained within the
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mortgage. This court has recently reiterated that because a modification of a mortgage,

involves a transfer of realty interests, the statute of frauds would apply and require the

modification be in writing. See Wells Fargo Bank, N.A. v. Baldwin, 12th Dist. Butler No.

CA2011-12-227, 2012-Ohio-3424, ¶ 12-13. "Even if [a party] were able to avoid any Statute

of Frauds concerns, * * * for a verbal agreement to have the effect of altering or modifying the

terms of a prior written contract, it must be valid and binding contract itself, resting upon

some new and distinct consideration." Id. at ¶ 14, citing Thurston v. Ludwig, 6 Ohio St. 1, 6-7

(1856). "However, to the extent that an oral agreement of modification of an existing contract

– although without consideration – has been acted upon by the parties, it is binding upon

them and may not be repudiated." Id. at ¶ 18.

        {¶ 55} Bell failed to present any evidence that the parties executed a written
                                                   6
modification of the terms of the original mortgage. Bell also did not provide any evidence of

new consideration to support the alleged promise that FTMC would later modify the terms of

his mortgage. Finally, Bell failed to submit evidence that indicated FTMC engaged in

subsequent conduct acknowledging the alleged modification or its mutual assent to the

modification.7

        {¶ 56} As FTMC choose to enforce the written agreement between the parties and file

this foreclosure action based on Bell's default, we cannot find that the "unclean hands"

defense applies here, or that Bell's affidavit gives rise to a genuine issue of material fact as to

his defenses. Accordingly, the trial court properly granted summary judgment to FTMC.

Bell's third and final assignment of error is overruled.




6. He also did not aver in his Civ.R. 56(F) motion that additional discovery could lead to such evidence.

7. Bell also argues that FTMC's failure to modify the loan and instead encourage him to miss three mortgage
payments created damages which could have been mitigated. As we found that Bell failed to present evidence of
an enforceable modification we find no merit to this argument.
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{¶ 57} Judgment affirmed.


PIPER and M. POWELL, JJ., concur.




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