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Griffin v. First National Acceptance Co.

Court of Appeals of Ohio, Eleventh District

September 30, 2013

DONALD L. GRIFFIN, SR., Plaintiff-Appellant,
v.
FIRST NATIONAL ACCEPTANCE COMPANY, Defendant-Appellee.

Civil Appeal from the Trumbull County Court of Common Pleas, Case No. 2009 CV 1864.

Philip Zuzolo, and Patrick B. Duricy, Zuzolo Law Office, LLC, and Gary J. Rosati, Rosati Law Office, LLC, (For Plaintiff-Appellant).

Christopher John Klym, (For Defendant-Appellee).

OPINION

CYNTHIA WESTCOTT RICE, J.

(¶1} Appellant, Donald L. Griffin, Sr., appeals the judgment of the Trumbull County Court of Common Pleas granting summary judgment in favor of Appellee, First National Acceptance Company ("FNAC"), and denying Donald's motion for summary judgment. At issue is whether evidence was presented that FNAC breached the covenant against encumbrances contained in a general warranty deed by which FNAC conveyed the subject property to Donald's predecessor in interest, thus precluding summary judgment. For the reasons that follow, we reverse and remand for proceedings consistent with this opinion.

(¶2} In July 2009, Donald filed a complaint against FNAC. The complaint alleged that Donald is the current owner of a parcel of real property located on West Market Street in Warren, Ohio. The complaint further alleged that FNAC had previously owned the property, and transferred it to Donald's predecessor in interest, his son, David Griffin, in 2003 by general warranty deed. The complaint alleged that David then transferred the property to Donald by quit-claim deed in 2004, and that Donald later discovered the property was encumbered by a mortgage, which pre-dated the 2003 deed transferring the property to David. As David's successor in interest, Donald asserted a claim against FNAC for breach of the covenant against encumbrances contained in the 2003 deed. He also asserted a separate claim for fraud.

(¶3} FNAC filed an answer denying the material allegations of the complaint.

(¶4} In May 2012, FNAC filed a motion for summary judgment. Donald filed a brief in opposition and his own motion for summary judgment, supported by David's affidavit. David stated in his affidavit that in 1992, he entered a land contract with Peter and Anne Perich, as vendors, for the purchase of the West Market Street property. From 1992 to 1997, David made monthly payments under the land contract to the Periches. Then, in 1997, FNAC purchased the property from the Periches along with their interest in the land contract. FNAC thus became the owner of the property, subject to David's land contract. Beginning in 1997, David made his payments under the land contract to FNAC.

(¶5} David stated that in April 2000, he obtained a mortgage loan from FNBA, FNAC's parent company, to buy a home on Heather Lane in Warren. As security for the loan, David granted FNBA a mortgage on the Heather Lane property and on the West Market Street property. As additional security for the loan, David also assigned his interest in the land contract on the West Market Street property to FNBA. The mortgage and assignment were duly recorded. FNAC, which is FNBA's wholly-owned subsidiary, acted as FNBA's mortgage servicer for David's mortgage loan.

(¶6} From 2000 to 2003, David made two separate monthly payments to FNAC, one on the land contract for the West Market Street property (owed to FNAC) and one on the mortgage for the Heather Lane property (owed to FNBA).

(¶7} David stated that in May 2003, he contacted FNAC; told FNAC's representative that his father Donald was interested in buying the West Market Street property; and asked FNAC's representative what it would take to release the property of all liens. FNAC's representative told David that if Donald paid the balance on the land contract, $40, 000, FNAC would release the West Market Street property to David "free of all liens."

(¶8} David stated that in June 2003, he paid the land contract on the West Market Street property in full, and, in return, FNAC gave him a general warranty deed to that parcel. In this deed, FNAC covenanted with David that "the premises are free from all encumbrances" and "to forever warrant and defend the title to the said lands against all claims whatever." The deed did not mention the mortgage on the property that David had given to FNBA in 2000. The deed was duly recorded.

(¶9} In January 2004, David transferred the West Market Street property to Donald by quit-claim deed. David ultimately defaulted on his mortgage loan on the Heather Lane property, and, in 2007, FNBA filed a foreclosure action against David and Donald as to both the Heather Lane and West Market Street properties. David stated in his affidavit that FNAC did not defend the title of Donald, as David's successor in interest, to the West Market Street property. Instead, FNAC assisted FNBA in its efforts to foreclose the mortgage. David ultimately consented to the foreclosure of the Heather Lane property, which was sold at sheriffs sale. FNBA voluntarily dismissed without prejudice the foreclosure action against the West Market Street property pending the outcome of this action.

(¶10} In August 2012, the trial court entered summary judgment in favor of FNAC and denied Donald's motion for summary judgment. The court noted that the facts in this case "are not easily resolved" and that this was a "novel" case.

(¶11} Donald appeals the court's judgment, asserting two assignments of error. For his first assigned error, he alleges:

(¶12} "The trial court erred in granting summary judgment to defendant FNAC and denying summary judgment for the plaintiff on plaintiff Griffin's complaint to enforce the general warranty deed ...


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