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Wells Fargo Bank v. Smith

Court of Appeals of Ohio, Seventh District

September 11, 2013

WELLS FARGO BANK PLAINTIFF-APPELLEE
v.
PETER M. SMITH DEFENDANT-APPELLANT

Civil Appeal from the Court of Common Pleas of Mahoning County, Ohio Case No. 09 CV 473

For Plaintiff-Appellee: Atty. Rebecca N. Algenio Atty. Sallie A. Conyers Reisenfeld & Associates, LPA LLC.

For Defendant-Appellant: Atty. James E. Lanzo.

JUDGES: Hon. Cheryl L. Waite Hon. Gene Donofrio Hon. Mary DeGenaro

OPINION

WAITE, J.

(¶1} Appellant Peter M. Smith appeals the granting of summary judgment in favor of his mortgage lender, Appellee Wells Fargo Bank, in a disputed foreclosure action. Appellant failed or was late in making most of the monthly mortgage payments. After Appellant was nine months behind in the mortgage payments, Appellee filed a complaint in foreclosure in the Mahoning County Court of Common Pleas and a subsequent motion for summary judgment. Appellant argued in response that he was not in default and that Appellee waived the right to accelerate by previously accepting late payments. The court sustained Appellee's motion for summary judgment and entered a decree of foreclosure. The record shows that Appellant was in default at the time the complaint was filed, and the note and mortgage contained an anti-waiver provision to permit acceleration of the loan even if late payments had been previously accepted. Appellant failed to file any evidence in rebuttal to the motion for summary judgment. The trial court was correct in granting summary judgment to Appellee, and the judgment is affirmed.

History of the Case

(¶2} Appellant entered into an adjustable rate note and mortgage agreement with Appellee on April 6, 2005, for the original sum of $111, 200.00 plus interest. The parties executed a loan modification agreement on August 27, 2008, which increased the unpaid principal balance to $111, 851.13 to account for arrearage which had developed over the prior three years. Under the terms of the note, Appellant was obligated to make monthly payments in the amount of $758.58 on the first day of each month, with late charges accruing for any payment occurring fifteen or more days overdue. Appellant was also required to deposit with the lender timely payments for home owner's insurance and property taxes. If Appellant failed to pay in full the amount of any of these items on the date they were due, then he would be in default. Both the note and the mortgage outlined the acceleration procedure that would take effect if the borrower defaulted on the loan. The agreements also contained specific anti-waiver clauses to preserve the lender's right to accelerate the loan at any time the borrower was in default, regardless of whether the lender had exercised that right during a prior default. Both agreements were signed by Appellant.

(¶3} Over the next few years, Appellant was regularly late or short on his monthly mortgage and insurance payments. In 2005 and 2006, the payments were usually only a few weeks or a month late. Appellee accepted the overdue payments and the corresponding late charges. However, in 2007 and 2008 Appellant fell further behind in the monthly payments. As of August, 2008, Appellant was six months behind in paying his mortgage. This apparently lead to a renegotiation of the mortgage on August 27, 2008, in which the arrears were added to the principal balance of the loan. Soon after the loan renegotiation, though, Appellant once again fell seriously behind in making payments. From December of 2008 until November of 2009, Appellant was anywhere from three to eight months behind in paying his mortgage.

(¶4} While Appellant was in default, a written notice was sent informing him that he had defaulted under the terms of the note. The notice instructed Appellant that if he did not pay the overdue amount by a certain date the note's acceleration clause would be enforced and he would be required to pay the full amount of the unpaid principal plus interest. The deadline for payment outlined in the notice passed without a payment being made.

(¶5} On December 14, 2009, Appellee filed a complaint in foreclosure against Appellant in the Mahoning County Court of Common Pleas. Appellee requested relief in the form of payment of the unpaid sum of $111, 174.37, plus interest at the rate of 7.25 percent per annum from February 1, 2009, late fees, prepayment penalty if applicable, title charges, court costs, reasonable attorney fees, and expenses for the preservation and maintenance of the real estate. Additionally, Appellee requested that the property be sold at a sheriffs sale, with any resulting proceeds paid to the lender for the amounts due and incurred.

(¶6} The complaint also named the State of Ohio Department of Taxation and Mortgage Electronic Registration Systems, Inc., acting solely as nominee for WMC Mortgage Corp., as co-defendants for any lien interest they may have had in the property. The Department of Taxation responded on February 5, 2010, denying any and all interest in the property. Mortgage Electronic Registration Systems, Inc. failed to answer or otherwise respond to the complaint.

(¶7} In response to Appellee's complaint, Appellant filed a cursory answer denying the complaint in its entirety. No defenses were alleged.

(¶8} On February 22, 2010, Appellee filed a motion for summary judgment. Appellee noted that Appellant's answer did not allege any operative facts to be disputed at trial. In support of the motion, Appellee attached the affidavit of Tyira Ganison, Assistant Secretary for BAC Home Loans and an agent for Wells Fargo Bank. The affidavit established that Appellant was in default of payment of the note; that the delinquent payments precipitated the acceleration of the debt; and that Appellant had not cured the ...


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