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Fifth Third Mortgage Co. v. Perry

Court of Appeals of Ohio, Fourth District

July 24, 2013

KENNETH L. PERRY, ET AL., Defendants-Appellants.

James P. Connors, Law Offices of James P. Connors, Columbus, Ohio, for Appellant, Kenneth L. Perry.

Stacy A. Cole and Harry W. Cappel, Graydon Head & Ritchey LLP, Cincinnati, Ohio, for Appellee.


Marie Hoover, Judge



{¶ 1} Kenneth L. Perry appeals from three entries of the Pickaway County Common Pleas Court, which granted summary judgment in favor of Fifth Third Mortgage Company ("Fifth Third Mortgage") on its foreclosure complaint and motion for summary judgment; and entered summary judgment in favor of Fifth Third Mortgage and Fifth Third Bank on Perry's counterclaims/new-party claims and cross motion for summary judgment.

{¶ 2} On July 15, 2004, Richard A. Perry and Audrey M. Perry, appellant's parents, executed a promissory note in favor of The Equitable Mortgage Corporation in the principal amount of $77, 650.00. The note was secured by a mortgage on the property located at 9438 U.S. Route 62 in Orient, OH (the "property"). Shortly, thereafter, the note and mortgage were assigned to Fifth Third Mortgage.

{¶ 3} On June 4, 2005, Audrey M. Perry died and her interest in the property was transferred to Richard A. Perry by Warranty Deed dated July 27, 1988. In February 2008, Richard Perry entered into a Loan Modification Agreement (the "loan modification") with Fifth Third Mortgage, which increased the principal balance on the promissory note to $86, 882.96.

{¶ 4} On October 9, 2009, Richard Perry passed away. A short time later appellant, Kenneth Perry, took title to the property by a transfer on death deed. Both parties agree that while appellant is the current titleholder of the property, he never assumed the note, loan modification, or mortgage by any written agreement. According to the record, no probate estate was opened following Richard Perry's death.

{¶ 5} From here, the parties' portrayal of the facts varies significantly.

{¶ 6} According to appellant, [1] following his father's death he continued to make payments on the debt, but eventually fell behind on the obligations. Once the debt became delinquent, appellant contends that Fifth Third began to threaten legal action.

{¶ 7} In late June 2010, appellant says that Fifth Third contacted him regarding a residential loan assistance program that was being offered from a branch office in Grove City, Ohio. Appellant purportedly accepted the invitation, and in July 2010 he allegedly met with a Fifth Third loan officer named "Kathy." At the meeting, appellant contends that he reached an oral agreement with Fifth Third, under which Fifth Third would withhold from foreclosing the mortgage conveyed by his father, if he would pay a lump sum of $5, 000.00 and agree to a modified payment plan on his father's debt.[2]

{¶ 8} According to appellant, he paid the $5, 000.00 at the July 2010 meeting and was told by "Kathy" that an accounting and new loan payment coupon book would be sent to him in several months; and that once he received the coupon payment book he should resume payments. Appellant was allegedly told that the delay in time was due to the popularity of the program.

{¶ 9} Appellant claims that the new loan payment book arrived in November 2010. Appellant made his first payment of $1, 114.72 pursuant to the new coupon book on November 18, 2010, well in advance of the December 1 due date. Unbeknownst to appellant, however, Fifth Third Mortgage had filed its foreclosure complaint two days earlier, on November 16, 2010. Fifth Third returned the November 18 payment to appellant. Appellant attempted to make a second payment which was due on January 1, 2011, but Fifth Third again refused payment.

{¶ 10} Appellant contends that he never received an accounting and never received any notices, warnings, or other written materials between the July 2010 meeting and receipt of the payment coupon book in November 2010.

{¶ 11} Naturally, the Fifth Third entities convey a significantly different version of the facts.

{¶ 12} The Fifth Third entities, appellees in the instant case, claim that following the death of his father, appellant held himself out as the executor of the Richard Perry estate.[3]Appellees claim that after the loan payments fell behind, appellant contacted them about catching up on the debt. According to appellees, on or about June 10, 2010, appellant discussed the loan with Fifth Third Mortgage and agreed to pay $5, 000.00 by June 30, 2010, and an additional $4, 143.92 in July, 2010 to bring the account current.[4] It appears that in exchange for the payments, Fifth Third agreed to send a forbearance proposal. To that end, appellees contend that they sent a proposed forbearance agreement on June 14, 2010, addressed to the Estate of Richard A. Perry, permitting a single monthly payment to be skipped. The forbearance proposal was never signed or returned. Appellees deny that any other forbearance proposals were discussed, and deny ever entering any agreement or making any representation, in writing or otherwise, to modify the loan.

{¶ 13} Appellees agree that a payment of $5, 000.00 posted to the loan account on July 15, 2010, but contend that the payment covered the existing loan payments and fees through June 2010. Fifth Third also agrees that the next payment received from appellant was on November 18, 2010, after Fifth Third Mortgage had instituted the foreclosure action. Appellees also agree that it returned the November payment. Appellees allege, however, that they sent numerous letters of default to the Richard Perry Estate beginning in August of 2010; to the same address that the coupon book was sent.

{¶ 14} Besides the issue of default on the note and mortgage instruments, a dispute also exists surrounding the payment of insurance proceeds under a homeowners insurance policy covering the property.

{¶ 15} Around February and March 2011, appellant made property damage claims under the policy. The insurance company issued two checks, one in the amount of $1, 729.27, and the second in the amount of $5, 270.00; each check was made payable to the Estate of Richard Perry[5]as well as Fifth Third Bancorp.

{¶ 16} Appellant alleges that Fifth Third somehow intercepted the checks and endorsed or negotiated the checks without his authority or consent. The Fifth Third entities contend that as a result of being listed as a payee under the policy, they received the checks directly from the insurance company.

{¶ 17} Appellees contend that Fifth Third Mortgage used the insurance proceeds to pay subcontractors who performed the repair work on the property, and to pay other miscellaneous fees so that the entire proceeds were accounted for. In particular, appellees allege that on March 29, 2011, Fifth Third Mortgage issued a check to a subcontractor in the amount of $3, 489.64. Approximately two weeks later, appellees allege that an additional check was issued to another subcontractor in the amount of $3, 410.36. Out of the remaining $99.27 balance, appellees assert that $30.77 was deducted for inspection, and that two $10.00 fees were deducted to cover the expense of mailing the subcontractor checks by overnight mail. Finally, appellees allege that the remaining $48.50 in insurance proceeds was paid by check to the Estate of Richard Perry.



{¶ 18} On November 16, 2010, Fifth Third Mortgage filed its Complaint in Foreclosure with the Pickaway County Common Pleas Court. Named as defendants were Kenneth L. Perry; Jane Doe, Unknown Spouse of Kenneth L. Perry; and Kemba Columbus Credit Union. Ultimately Fifth Third Mortgage sought, and the trial court granted, an order adding the Pickaway County Treasurer as a party defendant.

{¶ 19} On March 21, 2011, appellant filed an Answer, Counterclaims, and New party Claims. Appellant brought counterclaims and new-party claims against Fifth Third Mortgage and new-party defendant Fifth Third Bank for breach of contract, conversion, civil conspiracy, abuse of process, fraud, negligent misrepresentation, and violations of the Ohio Consumer Sales Practices Act.

{¶ 20} After responding to the counterclaims and new-party claims, on August 19, 2011, appellees filed their Motion for Summary Judgment seeking judgment on Fifth Third Mortgage's foreclosure claim and on appellant's counterclaims and new party claims. Appellant filed his Memorandum Contra, along with his own Cross-Motion for Summary Judgment on September 21, 2011. In his Cross-Motion for Summary Judgment, appellant sought judgment on his counterclaims and new-party claims, as well as the foreclosure claim asserted by Fifth Third Mortgage. Both motions were fully briefed by October 17, 2011.

{¶ 21} On November 17, 2011, appellant served discovery requests on both of the Fifth Third entities. After initially seeking an extension of time in which to respond to the discovery, until after the summary judgment motions were determined; appellees did eventually respond to the discovery requests.

{¶ 22} Appellant was not satisfied with the responses and sought additional information and supplement to the responses. After attempts to resolve the discovery issues proved unsuccessful, appellees filed a Motion for Protective Order and for Stay of Discovery on January 10, 2012. Appellant responded with a Motion to Compel on January 18, 2012. Both motions were fully briefed by February 21, 2012.

{¶ 23} Meanwhile, the trial court granted appellees' Motion for Summary Judgment and denied appellant's Cross Motion for Summary Judgment by an order dated January 3, 2012 ("Summary Judgment Order"). Inexplicably, however, it appears that the trial court failed to serve the Summary Judgment Order on the parties. The Summary Judgment Order specifically found that Fifth Third Mortgage was entitled to summary judgment on its foreclosure claim and that the appellees were entitled to summary judgment on appellant's counterclaims and new party claims. The Summary Judgment Order further directed counsel for Fifth Third Mortgage to submit a foreclosure decree, to be entered by separate order.

{¶ 24} On February 22, 2012, the trial court filed another order granting appellees' Motion for Protective Order and Stay of Discovery ("Protective Order"). Apparently, the trial court again failed to serve the Protective Order on the parties.

{¶ 25} In late April 2012, counsel for appellees was notified by the trial court that the Summary Judgment Order and Protective Order had been entered. Appellees then circulated a proposed foreclosure decree to the interested parties and submitted the proposed foreclosure decree to the trial court. Ultimately, the final foreclosure decree was entered on May 17, 2012 ("Foreclosure Decree").

{¶ 26} Appellant appeals from: (1) the trial court's January 3, 2012, Summary Judgment Order granting appellees' summary judgment motion and denying appellant's cross-motion for summary judgment; (2) the trial court's February 22, 2012, Protective Order; and (3) the trial court's May 17, 2012, Foreclosure Decree.

{¶ 27} The parties have stipulated to a stay of the execution and enforcement of the Foreclosure Decree pending completion of this appeal.

{¶ 28} Appellant raises the following assignments of error for review. First Assignment of Error:


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