[Cite as Citimortgage, Inc. v. Cathcart, 2014-Ohio-620.]


                                        COURT OF APPEALS
                                       STARK COUNTY, OHIO
                                    FIFTH APPELLATE DISTRICT


CITIMORTGAGE, INC.                                  :      JUDGES:
                                                    :
                                                    :      Hon. John W. Wise, P.J.
        Plaintiff - Appellee                        :      Hon. Patricia A. Delaney, J.
                                                    :      Hon. Craig R. Baldwin, J.
-vs-                                                :
                                                    :
DIANA C. CATHCART, ET AL.                           :      Case No. 2013CA00179
                                                    :
        Defendants - Appellants                     :      OPINION



CHARACTER OF PROCEEDING:                                   Appeal from the Stark County Court
                                                           of Common Pleas, Case No.
                                                           2012 CV 836




JUDGMENT:                                                  Affirmed



DATE OF JUDGMENT:                                          February 18, 2014



APPEARANCES:

For Plaintiff-Appellee                                     For Defendants-Appellants

BARBARA A. BORGMANN                                        MARK E. OWENS
Laurito & Laurito, LLC                                     JOHN F. MCINTYRE
7550 Paragon Road                                          J.P. Amourgis & Associates
Dayton, OH 45459                                           3200 W. Market Street, Suite 106
                                                           Akron, OH 44333
Stark County, Case No. 2013CA00179                                                        2



Baldwin, J.

      {¶1}    Appellant Diana Cathcart appeals a judgment and decree in foreclosure

entered by the Stark County Common Pleas Court on August 9, 2013. Appellee is

Citimortgage, Inc.

                             STATEMENT OF FACTS AND CASE

      {¶2}    Appellee filed the instant foreclosure action on March 14, 2012, against

appellant and James Doe, name unknown, spouse of appellant. The complaint alleged

that appellant had signed a promissory note and mortgage, that she was in default, that

appellee had accelerated the note and that appellee had satisfied all conditions

precedent.    Appellant filed an answer, including an affirmative defense that appellee

failed to give the requisite notice pursuant to the terms of the note and mortgage.

      {¶3}    Appellee filed a motion for summary judgment. With the motion, appellee

filed the affidavit of Zachariah Wright, Vice President of Document Control for appellee.

In this affidavit, Wright attested that he has personal knowledge of the business records

he reviewed. He averred that appellee is in possession of the note, the loan is in default,

the amount due has been accelerated, the amount due is $63,497.00, and a demand

letter dated September 1, 2011, was sent to appellant.

      {¶4}    Appellant responded that appellee failed to present evidence of

compliance with conditions precedent set forth in 24 CFR § 201.50, which requires a

face-to-face meeting or telephone meeting before taking action to accelerate the loan

and also requires that written notice of default and acceleration be sent by certified mail.

Appellant also argued that appellee did not present evidence of compliance with 24

CFR § 203.604, requiring a face to face interview with the mortgagor before three full
Stark County, Case No. 2013CA00179                                                     3


monthly installments are unpaid. Appellant filed her own affidavit, averring that she did

not receive notice of default and acceleration in compliance with the terms of the

mortgage.

      {¶5}   The trial court granted the motion for summary judgment and issued a

decree of foreclosure. Appellant assigns two errors on appeal:

      {¶6}   “I. THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT

TO THE PLAINTIFF/APPELLEE WHEN THERE WAS A GENUINE ISSUE OF

MATERIAL FACT AS TO WHETHER THE PLAINTIFF/APPELLEE PROVIDED

PROPER REQUIRED NOTICE OF DEFAULT PRIOR TO ACCELERATION AS

REQUIRED UNDER THE MORTGAGE AND APPLICABLE LAW.

      {¶7}   “II. THE TRIAL COURT ERRED WHEN IT GRANTED SUMMARY

JUDGMENT TO THE PLAINTIFF/APPELLEE WHERE THERE WERE GENUINE

ISSUES OF MATERIAL FACT IN DISPUTE AND THE PLAINTIFF/APPELLEE WAS

NOT ENTITLED TO SUMMARY JUDGMENT AS A MATTER OF LAW.”

                                                I.

      {¶8}   In her first assignment of error, appellant argues that summary judgment

was improper because she raised a genuine issue of material fact as to whether she

received notice of acceleration, notice of default, and notice providing her with an

opportunity to cure the arrearage.    She also argues that appellee failed to present

evidence of compliance with all conditions precedent to foreclosure pursuant to federal

regulations, specifically that notice be sent by certified mail and that a face to face

meeting interview occur prior to foreclosure.
Stark County, Case No. 2013CA00179                                                         4


      {¶9}    Summary judgment proceedings present the appellate court with the

unique opportunity of reviewing the evidence in the same manner as the trial court.

Smiddy v. The Wedding Party, Inc., 30 Ohio St.3d 35, 36 (1987).

      {¶10}   Civ. R. 56(C) governs summary judgment and provides in pertinent part:

“Summary Judgment shall be rendered forthwith if the pleadings, depositions, answers

to interrogatories, written admissions, affidavits, transcripts of evidence, and written

stipulations of fact, if any, timely filed in the action, show that there is no genuine issue

as to any material fact and that the moving party is entitled to judgment as a matter of

law. No evidence or stipulation may be considered except as stated in this rule. A

summary judgment shall not be rendered unless it appears from the evidence or

stipulation, and only from the evidence or stipulation, 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, that party being entitled to have the evidence or

stipulation construed most strongly in the party's favor.”

      {¶11}   Pursuant to the above rule, a trial court may not enter summary judgment

if it appears a material fact is genuinely disputed. The party moving for summary

judgment bears the initial burden of informing the trial court of the basis for its motion

and identifying those portions of the record that demonstrate the absence of a genuine

issue of material fact. The moving party may not make a conclusory assertion that the

non-moving party has no evidence to prove its case. The moving party must specifically

point to some evidence which demonstrates that the non-moving party cannot support

its claim. If the moving party satisfies this requirement, the burden shifts to the non-

moving party to set forth specific facts demonstrating that there is a genuine issue of
Stark County, Case No. 2013CA00179                                                      5

material fact for trial. Vahila v. Hall, 77 Ohio St.3d 421, 429, 674 N.E.2d 1164, 1997–

Ohio–259, citing Dresher v. Burt, 75 Ohio St.3d 280, 662 N.E.2d 264, 1996–Ohio–107.

      {¶12}   Appellant first argues there is a disputed fact as to whether she received

notice of default. The notice requirement found in the note and mortgage states:

      {¶13}   “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. The notice shall be directed to the Property Address or any

other address Borrower designates by notice to Lender. Any notice to Lender shall be

given by first class mail to Lender’s address stated herein or any address Lender

designated by notice to Borrower. Any notice provided for in this Security Instrument

shall be deemed to have been given to Borrower or Lender when given as provided in

this paragraph.”

      {¶14}   Because there is no requirement that Borrower actually receive notice,

appellant has not created a dispute of material fact by her affidavit stating she did not

receive the notice. Notice is deemed to have been given upon mailing.

      {¶15}   Appellant next argues that appellant failed to comply with conditions

precedent to foreclosure pursuant to applicable federal regulations, specifically 24 CFR

§ 201.50 which requires a face-to-face meeting or telephone meeting before taking

action to accelerate the loan and also requires that written notice of default and

acceleration be sent by certified mail, and 24 CFR § 203.604, which requires a face to

face interview with the mortgagor before three full monthly installments are unpaid.

      {¶16}   Where the mortgage at issue is federally insured and therefore subject to

HUD regulations in the case of default or acceleration, the requirements found in these
Stark County, Case No. 2013CA00179                                                        6

regulations are conditions precedent to foreclosure. Wells Fargo Bank v. Gerst, 5th

Dist. Delaware No. 13 CAE 05 0042, 2014-Ohio-80, ¶23.              In the instant case, the

mortgage loan is an FHA loan and thus the federal regulations apply.

      {¶17}       However, appellee argues that appellant waived the right to argue that the

conditions precedent were not met by failing to specifically deny performance of these

conditions in her answer. Civ. R. 9(C) provides:

      {¶18}       “In pleading the performance or occurrence of conditions precedent, it is

sufficient to aver generally that all conditions precedent have been performed or have

occurred. A denial of performance or occurrence shall be made specifically and with

particularity.”

      {¶19}       Appellee’s complaint, Count 2, paragraph five states that appellee had

complied with all conditions precedent. Therefore, appellee generally averred that all

conditions precedent had been met and appellant was required pursuant to Civ. R. 9(C)

to deny performance specifically and with particularity. In response, appellant generally

denied that conditions precedent had been met, and raised as an affirmative defense

that appellee failed to give the proper and requisite notices to appellant pursuant to the

terms of the note and mortgage.

      {¶20}       In U.S. Bank National Assoc. v. Stanze, 2nd Dist. Montgomery No. 25554,

2013-Ohio-2474, the bank had generally averred that it had satisfied all conditions prior

to filing the complaint, including but not limited to mailing the notice of acceleration.

The borrowers generally denied the allegations, and raised as an affirmative defense

that the bank failed to provide notice of acceleration under the note and mortgage. The

trial court granted summary judgment. On appeal the borrowers argued that the bank
Stark County, Case No. 2013CA00179                                                           7


failed to comply with the federal requirement of a face-to-face meeting pursuant to

federal regulations.      The Court of Appeals for the Second District found that the

borrowers waived their right to argue failure of a condition precedent by failing to

specifically argue in their answer or by way of affirmative defense that the bank failed to

comply with the face-to-face meeting requirement. Id. at ¶14, 17-18. See also U.S.

Bank National Assoc. v. Martz, 11th Dist. Portage No. 2013-P-0028, 2013-Ohio-4555,

¶21 (denial that bank satisfied the various notice provisions in the federal regulations

and mortgage was made generally, not specifically and with particularity as required by

Civ. R. 9(C)).

      {¶21}      Appellant failed to deny the satisfaction of conditions precedent

specifically and with particularity. Appellant failed to allege that the bank failed to satisfy

the notice provisions in federal regulations, and failed to specify that appellee failed to

mail notice by certified mail and failed to comply with the face-to-face meeting

requirement.      Appellant only generally alleged that the bank failed to comply with the

notice requirements in the note and mortgage. Appellant therefore could not raise the

issue of failure of conditions precedent for the first time on summary judgment. The trial

court therefore did not err in granting summary judgment.

      {¶22}      The first assignment of error is overruled.

                                                  II.

      {¶23}      In her second assignment of error, appellant first argues that the affidavit

of Francesca Wurm failed to satisfy Civ. R. 56(E)’s requirement that affidavits be made

on personal knowledge with respect to the attached documents’ admissibility as records

of regularly conducted activity pursuant to Evid. R. 803(6).
Stark County, Case No. 2013CA00179                                                         8


      {¶24}   Personal knowledge is required to qualify the records of an affidavit under

the business records hearsay exception. Evid.R. 803(6) governs the admissibility of

business records as an exception to the hearsay rule:

      {¶25}   “(6) Records of regularly conducted activity. A memorandum, report,

record, or data compilation, in any form, of acts, events, or conditions, made at or near

the time by, or from information transmitted by, a person with knowledge, if kept in the

course of a regularly conducted business activity, and if it was the regular practice of

that business activity to make the memorandum, report, record, or data compilation, all

as shown by the testimony of the custodian or other qualified witness or as provided by

Rule 901(B)(10), unless the source of information or the method or circumstances of

preparation indicate lack of trustworthiness. The term ‘business' as used in this

paragraph includes business, institution, association, profession, occupation, and calling

of every kind, whether or not conducted for profit.”

      {¶26}   As this Court stated in Deutsche Bank Natl. Trust Co. v. Hansen, 5th Dist.

Fairfield No. 2010 CA 00001,2011–Ohio–1223, ¶ 21–23:

      {¶27}   “The rationale behind Evid.R. 803(6) is that if information is sufficiently

trustworthy that a business is willing to rely on it in making business decisions, the

courts should be willing to as well. See Staff Note to Evid.R. 803(6). “To qualify for

admission under Rule 803(6), a business record must manifest four essential elements:

(i) the record must be one regularly recorded in a regularly conducted activity; (ii) it must

have been entered by a person with knowledge of the act, event or condition; (iii) it must

have been recorded at or near the time of the transaction; and (iv) a foundation must be

laid by the ‘custodian’ of the record or by some ‘other qualified witness.’ State v. Davis,
Stark County, Case No. 2013CA00179                                                      9


116 Ohio St.3d 404, 880 N.E.2d 31, 2008–Ohio–2, ¶ 171, quoting Weissenberger, Ohio

Evidence Treatise (2007) 600, Section 803.73. See also McCormick v. Mirrored Image,

Inc. (1982), 7 Ohio App.3d 232, 233, 454 N.E.2d 1363.

      {¶28}   “The phrase ‘other qualified witness’ should be broadly interpreted. See

State v. Patton (Mar. 5, 1992), Allen App. No. 1–91–12, unreported, citing 1

Weissenberger's Ohio Evidence (1985) 75, Section 803.79. Further, it is not necessary

that the witness have firsthand knowledge of the transaction giving rise to the record.

State v. Vrona (1988), 47 Ohio App.3d 145, 547 N.E.2d 1189, paragraph two of the

syllabus. ‘Rather, it must be demonstrated that: the witness is sufficiently familiar with

the operation of the business and with the circumstances of the record's preparation,

maintenance and retrieval, that he can reasonably testify on the basis of this knowledge

that the record is what it purports to be, and that it was made in the ordinary course of

business consistent with the elements of Rule 803(6).’ Patton, supra, quoting

Weissenberger at 76.”

      {¶29}   In support of its motion for summary judgment, appellee filed the affidavit

of Zachariah Wright, Vice President of Document Control, not an affidavit of Francesca

Wurm. In the affidavit, Wright avers that the statements made in the affidavit are based

on his personal knowledge and his personal review of the business records for the loan

which is the subject of the action. He stated that in his capacity as Vice President of

Document Control, he has access to the loan documents and account records of

appellee, and the affidavit was based on his personal knowledge obtained from review

of the records and from his personal knowledge of the operation of the maintenance

and retrieval of records in appellee’s record keeping systems. He stated that loan
Stark County, Case No. 2013CA00179                                                     10


account records are compiled and recorded by appellee in the course of its regularly

conducted business activities, and it is the regular practice of appellee to make such

records. He further stated that loan account records are made at or near the time of the

occurrence of each act or event affecting the account by persons with knowledge of

said act or event, or from information transmitted by a person with knowledge of acts or

events described within the loan account records. He also averred that the records are

kept, maintained and relied upon in the ordinary course of business activity. From his

position as Vice President of Document Control and his statement that he has reviewed

the documents in the instant case, it may be reasonably inferred that he has personal

knowledge to qualify the documents as an exception to the hearsay rule as a business

document.

      {¶30}   Finally, appellant again argues that her affidavit averring that she did not

receive notice of default creates a disputed fact. As we discussed in Assignment of

Error One, actual receipt is not required to accomplish notice pursuant to the terms of

the note and mortgage. Further, appellant waived the right to argue that appellee failed

to comply with all conditions precedent, namely mailing notice by certified mail and

conducting a face-to-face meeting, by failing to plead these matters with specificity and

particularity in her answer.
Stark County, Case No. 2013CA00179                                               11


      {¶31}   The second assignment of error is overruled. The judgment of the Stark

County Common Pleas Court is affirmed. Costs are assessed to appellant.

By: Baldwin, J.

Wise, P.J. and

Delaney, J. concur.
