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U.S. Bank NA v. Schubert

Court of Appeals of Ohio, Ninth District, Lorain

September 5, 2017

U.S. BANK NA Appellants/Cross Appellees
v.
DENNIS M. SCHUBERT, et al. Appellees/Cross-Appellants

         APPEAL FROM JUDGMENT ENTERED IN THE COURT OF COMMON PLEAS COUNTY OF LORAIN, OHIO CASE No. 10 CV 170414

          BENJAMIN D. CARNAHAN, Attorney at Law, for Appellants/Cross-Appellees.

          JACK MALICKI and THOMAS R. THEADO, Attorney at Law, for Appellees/Cross-Appellants.

          DECISION AND JOURNAL ENTRY

          JENNIFER HENSAL JUDGE.

         {¶1} U.S. Bank, N.A. and Ocwen Loan Servicing, LLC have appealed a judgment of the Lorain County Court of Common Pleas that foreclosed on the property of Dennis and Sue Schubert. The Schuberts have cross-appealed the trial court's judgment. For the following reasons, this Court affirms.

         I.

         {¶2} In 2000, the Schuberts obtained a loan from Bank One that they secured with a mortgage of property they owned in Elyria. Shortly after obtaining the loan, Mr. Schubert lost his job, which led to the Schuberts declaring bankruptcy twice. During this period, the Schuberts fell behind in their loan payments. In 2004, Ocwen began servicing the loan, and the mortgage was transferred to U.S. Bank, as trustee for the registered holders of GSRPM 2004-1 mortgage pass-through certificates.

         {¶3} In 2006, the Schuberts discovered there was something wrong with the accounting of the loan. Ocwen also sent the Schuberts a notice of default. Following additional communications, the Schuberts and Ocwen entered into a forbearance agreement. Despite the agreement, the trustee at the time filed a foreclosure action against the Schuberts. The court later dismissed the action in light of the forbearance agreement.

         {¶4} Following the dismissal of the foreclosure action, the Schuberts sought to modify the terms of the note. In 2008, Ocwen entered into a loan modification agreement with the Schuberts, which reduced their monthly loan payments but added a balloon payment to the end of the loan's term. The Schuberts paid the new amount until June 2010, when they stopped making further payments. In December 2010, U.S. Bank filed a foreclosure action against the Schuberts. The Schuberts counterclaimed, alleging claims against U.S. Bank and Ocwen for breach of contract, violations of the Fair Debt Collection Practices Act (FDCPA), intentional infliction of emotional distress, negligence, gross negligence, violations of the Real Estate Settlement Procedures Act, mortgage services abuses, and breach of the covenant of good faith and fair dealing. Following a trial to the bench, the court found that the Schuberts defaulted on the note as modified and that U.S. Bank, as trustee, was entitled to foreclose on the mortgage. It denied the Schuberts' counterclaims. U.S. Bank has appealed the trial court's conclusion that the Schuberts' breach of contract claim was not subject to a three-year statute of limitations period under the Uniform Commercial Code (UCC). The Schuberts have cross-appealed, assigning five errors. For ease of consideration, we will address the cross-appeal first.

         II.

         CROSS-APPEAL ASSIGNMENT OF ERROR I

         THE TRIAL COURT ERRED IN CONCLUDING AS A MATTER OF LAW THAT THE CALCULATIONS FOR THE AMOUNT DUE UNDER THE NOTE COMMENCED WITH THE EXECUTION OF THE LOAN MODIFICATION AGREEMENT.

         {¶5} The Schuberts argue that the trial court erred when it calculated how much they owed on the note. They argue that U.S. Bank had the burden to show the amount due, which it could not in light of the history of accounting issues with the loan. They also argue that the court incorrectly looked at only the credits and debits that were made following the loan modification instead of over the life of the loan. According to the Schuberts, because of the accounting errors, the trial court's calculation is off by approximately $8, 600.

         {¶6} The trial court found that the Schuberts acknowledged being in default of the loan, as modified by the modification agreement, since June 2010. It found that the Schuberts did not present any evidence that rebutted the amount U.S. Bank argued was due on the modified loan and, therefore, found that the amount due was $202, 845.90.

         {¶7} The Schuberts' argument about the trial court's "amount due" finding appears to be a challenge to the weight of the evidence. When reviewing the manifest weight of the evidence in a civil case, this Court

weighs the evidence and all reasonable inferences, considers the credibility of witnesses and determines whether in resolving conflicts in the evidence, the [finder of fact] clearly lost its way and created such a manifest miscarriage of justice ...

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