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Beneficial Financial I Inc. v. Saunders

Court of Appeals of Ohio, Fourth District, Gallia

August 28, 2019

BENEFICIAL FINANCIAL I INC., Plaintiff-Appellee,
v.
DOYLE J. SAUNDERS, et al., Defendants-Appellants.

          CIVIL APPEAL FROM COMMON PLEAS COURT

          Marc E. Dann and Emily White, Cleveland, Ohio, for appellants.

          Matthew J. Richardson, Columbus, Ohio, for appellee.

          DECISION AND JUDGMENT ENTRY

          PETER 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 foreclosure action.

         {¶ 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.[1]

         {¶ 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 ...

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