Court of Appeals of Ohio, Fourth District, Gallia
APPEAL FROM COMMON PLEAS COURT
E. Dann and Emily White, Cleveland, Ohio, for appellants.
Matthew J. Richardson, Columbus, Ohio, for appellee.
DECISION AND JUDGMENT ENTRY
B. ABELE, JUDGE.
1} Doyle J. Saunders and Sharon A. Saunders,
defendants below and appellants herein, appeal a Gallia
County Common Pleas Court summary judgment in favor of
Beneficial Financial I Inc., successor in interest to HFTA
Corporation, successor by merger to HFTA First Financial
Corporation, formerly known as Transamerica, on its
2} Appellants assign one error for review:
FIRST ASSIGNMENT OF ERROR:
"THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT IN
FAVOR OF APPELLEE WHERE APPELLEE WAS BARRED AS A MATTER OF
LAW FROM ENFORCING A LOST NOTE IT ACQUIRED FROM AN
UNIDENTIFIED ASSIGNOR, AND WHERE IT FAILED TO PRESENT
ADMISSIBLE EVIDENCE DEMONSTRATING THE TERMS OF THE PROMISSORY
NOTE, DEFAULT IN PAYMENTS, OR AMOUNT OWED."
3} In January 1997, Sharon and Doyle Saunders
(appellants) executed a $64, 513.19 promissory note payable
to Transamerica Financial Services. The note was secured by a
mortgage on their property at 178 Church Street in Bidwell,
Ohio. On October 5, 2015, Beneficial Financial I Inc.,
plaintiff below and appellee herein, filed a foreclosure
action and sought (1) relief on the note and the mortgage,
(2) reformation of the legal description of property included
in the mortgage, and (3) a declaratory judgment that appellee
is entitled to enforce the note, which had been lost, over
against HSBC Finance Corporation.
4} Appellee's complaint alleged that they are
entitled to enforce the promissory note, with an unpaid
balance of $46, 226.01 plus interest from April 3, 2011.
Appellee further alleged that appellants were in default in
payment and declared the debt to be immediately due and
payable. Appellee stated that on September 10, 2014, the
mortgage was assigned from HSBC Finance Corporation,
Successor by Merger to HFTA Corporation, Successor by Merger
to HFTA First Financial Corporation f/k/a Transamerica
Financial Services to Beneficial Financial I Inc. Appellee
further stated that Holzer Hospital Foundation, State of Ohio
Department of Taxation and the Treasurer of Gallia County,
have or claim to have an interest in the premises.
5} As part of the complaint, appellee also asserted
that, although the appellants are the owners of the property,
through inadvertence or error, the legal description, as
contained in the mortgage deed, does not conform to the legal
description set forth in the warranty deed book. However, the
parties' intention at the time of the execution of the
mortgage deed was to transfer to the appellee all interest
that the appellants had in the property. Thus, through a
scrivener's error the legal description was not entirely
and properly placed in the mortgage deed and deed of
conveyance. Accordingly, appellee stated that it was entitled
to a declaratory judgment that it is the party entitled to
enforce the promissory note and demanded that the mortgage
deed be reformed to provide for the proper legal description.
Appellee further demanded judgment against the appellants,
jointly and severally, for $46, 226.01 plus interest from
April 3, 2011, plus late charges, any deferred non
interest/interest bearing amounts, advances for taxes and
insurance, and all other expenditures recoverable under the
note, the mortgage and Ohio law.
6} Appellee also attached to the complaint a
lost-note affidavit from Lori Washington, Vice President and
Assistant Secretary of Administrative Services Division of
Beneficial, executed April 22, 2014, that states in part:
3. I am making this Lost Note Affidavit in connection with a
promissory note and/or loan agreement ("Note"), in
which Doyle J. Saunders and Sharon A. Saunders, promised to
pay the Lender the sum of $64, 513.19 (the "Loan").
The Loan is identified as Account Number ***.
4. On or about the date on which this Affidavit was executed,
a diligent search for the original Note was conducted. The
search included looking in the physical files and secure
storage facilities where the original Note and other
documents related to Account * * * are maintained.
5. After conducting the search described in paragraph 4
above, Lender was not able to locate either the original or a
copy of the Note. Therefore, the Lender cannot reasonably
obtain possession of the original Note because the
whereabouts of the original Note cannot be determined
although the Lender was in possession of the original Note
prior to its whereabouts becoming undeterminable.
6. The records maintained by the Lender, including the
mortgage associated with 178 Church St. Bidwell, OH, 45614 as
well as a payment history are attached as composite Exhibit
1, and were used to establish the terms of the Note and also
established that the Note was not paid, satisfied, pledged,
transferred or lawfully seized.
7. The terms of the Note were input into the servicing
system, and include among other things the principal balance,
property address, the names of the obligors and mortgagers,
interest rate, payment dates, term, and account number. The
information detailed above was then used to service the loan,
including the recording of payments, as well as fees and
costs relating to the Loan.
8. The interest rate set forth in the Note, as detailed by
the Lender's records attached as composite Exhibit 1, was
14.499%, the date of the first payment was due on March 3,
1997 and the final payment was to be made on or before
February 03, 2027.
9. The amount of the monthly principal and interest payments
due under the terms of the Note, as detailed by the
Lender's records attached as ...