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Patch of Land Lending, LLC v. Mayfair Real Estate, LLC

United States District Court, S.D. Ohio, Eastern Division

June 27, 2018

PATCH OF LAND LENDING, LLC, Plaintiff,
v.
MAYFAIR REAL ESTATE, LLC, et al., Defendants.

          Kimberly A. Jolson Magistrate Judge.

          OPINION AND ORDER

          EDMUND A. SARGUS, JR. CHIEF JUDGE UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on the motions for summary judgment filed by Plaintiff Patch of Land Lending, LLC (POL Lending), Defendant/Cross-Claimant Jon Peterson, Treasurer of Delaware County, Ohio (the Treasurer), and Defendant/Counterclaimant/Cross-Claimant Omega Federal Credit Union (Omega) (ECF Nos. 55, 58, 59). For the following reasons, these motions are GRANTED.

         I.

         A. Procedural Background

         Plaintiff POL Lending brought this action on June 6, 2017, against Defendants Mayfair Real Estate, LLC (Mayfair), A. David Wiggins (Mr. Wiggins), the Treasurer, and Omega. (Compl. at 1-2, ECF No. 1.) POL Lending brings three claims: (1) breach of note (against Mayfair); (2) breach of guaranty (against Mr. Wiggins); and (3) mortgage foreclosure (against Mayfair, the Treasurer, and Omega). (Id. at 8-16.) Through this case, POL Lending seeks to foreclose on and determine the priority of interests in the real property commonly known as 458 West Orange Road, Delaware, Ohio 43015 (Property Identification Number 318-233-03-014- 001) (the Property). (See Id. at 16-17.)

         The Treasurer answered the Complaint and brought a cross-claim under O.R.C. §§ 323.25 and 5721.18, et seq., seeking a determination of interests in the Property and foreclosure on and sale of the Property to recover delinquent real estate taxes, interest, assessments, and penalties. (Treasurer Answer at 2, ECF No. 6.)

         Omega answered and brought a counterclaim against POL Lending and cross-claims against Mayfair, Mr. Wiggins, Emily C. Wiggins (Mrs. Wiggins) (collectively, the Wigginses), and the Treasurer. (Omega Answer at 6-16, ECF No. 25.) Like POL Lending and the Treasurer, Omega seeks a determination of interests in the Property. (See Id. at 10, 16.) Omega also seeks foreclosure on and sale of the Property as relief for the Wigginses' default on the mortgages Omega holds on the Property. (See id.)

         POL Lending, the Treasurer, and Omega have now moved for summary judgment. They each request, among other things, foreclosure on and sale of the Property. (See POL Lending Mem. in Supp. at 12, ECF No. 56; Treasurer Mot. for Summ. J. at 5, ECF No. 58; Omega Mot. for Summ. J. at 7, ECF No. 59.) The Treasurer requests that he be permitted to collect "as a first and best lien" from the proceeds of the sale of the Property. (Treasurer Mot. for Summ. J. at 5.) Omega does not ask the Court to assign it a specific position of priority, but it does seek a marshaling of interests in the property. (See Omega Mot. for Summ. J. at 7; Omega Answer at 10, 16.) POL Lending explicitly asks the Court to determine the priority of each party's interests. (POL Lending Mem. in Supp. at 12.)

         No responses or replies to the motions for summary judgment were filed.

         B. Factual Background

         The relevant facts are undisputed.

         1. Facts Relevant to Patch of Land Lending, LLC

         On March 30, 2016, Mayfair executed and delivered to POL Lending a promissory note secured by a deed of trust for the payment of a principal amount of $1 million and interest of 11% per year on the unpaid principal balance. (Pl.'s Statement of Facts ¶¶ 7, 14, ECF No. 57.) That same day, Mr. Wiggins and Mayfair provided security for repayment of the note. (See Id. ¶¶ 8-9.) Mr. Wiggins executed and delivered to POL Lending a guaranty, and Mayfair executed and delivered a mortgage and security agreement and fixture financing statement. (Id.)

         In the mortgage, Mayfair granted, mortgaged, and conveyed to POL Lending all its right, title, and interest to the Property. (Pl.'s Statement of Facts ¶ 10.) POL Lending recorded the mortgage on July 14, 2016. (Id. ¶ 11.)

         Under the terms of the promissory note, Mayfair agreed to pay POL Lending monthly interest of $9, 166.67. (Pl.'s Statement of Facts ¶ 15.) Mayfair also agreed to pay a late charge of $0.18 for each dollar not paid within 10 days of its due date. (Id. ¶ 16.)

         The promissory note states that Mayfair would be in default if it failed to pay any installment or other sum due under the note when due and payable or if Mayfair failed to perform or comply with any term, agreement, or covenant contained in the mortgage. (Pl.'s Statement of Facts ¶ 17.) Upon the occurrence of any event of default, POL Lending may declare the promissory note due and payable immediately, the promissory note bears interest equal to the lesser of 24% per year or the maximum interest allowed by law, and Mayfair must pay all reasonable costs of collection and costs, expenses, and attorney fees paid or incurred in connection with the collection or enforcement of the promissory note. (Id. ¶¶ 18-20.)

         Under the terms of the guaranty, Mr. Wiggins agreed to guarantee the prompt payment of all amounts due under the promissory note (not just the collectability of those amounts) and the prompt performance of all obligations for which Mayfair has recourse liability to POL Lending under the promissory note. (Pl.'s Statement of Facts ¶ 21.) Mr. Wiggins agreed that his default under the guaranty would constitute a default under the promissory note and mortgage and would entitle POL Lending to exercise its rights and remedies under those documents. (Id. ¶ 23.) And Mr. Wiggins agreed to pay all of POL Lending's reasonable attorney fees, costs, and expenses if it retained an attorney to enforce the terms of the guaranty. (Id. ¶ 24.)

         Under the terms of the mortgage, Mayfair agreed that its failure to pay any installment of principal, interest, or other payment under the promissory note within five days of its due date would constitute a default under the mortgage. (Pl.'s Statement of Facts ¶ 25.) Mayfair also agreed that a default ...


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