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U.S. Bank N. A. v. Broadnax

Court of Appeals of Ohio, First District, Hamilton

December 18, 2019

U.S. BANK NATIONAL ASSOCIATION as Trustee Successor in Interest to Bank of America, National Association as Trustee, successor by merger to LaSalle Bank National Association, as Trustee for Structured Asset Investment Loan Trust Mortgage Pass-Through Certificates, Series 2004-8, Plaintiff-Appellee,
v.
WALTER G. BROADNAX, JR., Defendant-Appellant, and JANE DOE, name unknown, Spouse of WALTER G. BROADNAX, JR., UNITED STATES OF AMERICA, ATTORNEY GENERAL, U.S. DEPARTMENT OF JUSTICE, UNITED STATES OF AMERICA, U.S. ATTORNEY (Cinti), CHAMPION WINDOWS MANUFACTURING & SUPPLY CO., STATE OF OHIO, DEPARTMENT OF TAXATION, OHIO ATTORNEY GENERAL REVENUE RECOVERY, and STATE OF OHIO, BUREAU OF WORKERS' COMPENSATION, OHIO ATTORNEY GENERAL REVENUE RECOVERY SECTION, Defendants.

          Civil Appeal From: Hamilton County Court of Common Pleas Trial No. A-1307447

          Eckert Seamans Cherin & Mellott, LLC and Gwenn S. Karr, for Plaintiff-Appellee,

          Robbins, Kelly, Patterson & Tucker, Michael A. Galasso and Robert M. Ernst, for Defendant-Appellant.

          OPINION

          Bergeron, Presiding Judge.

         {¶1} In this foreclosure action, the parties devote most of their briefing attention on appeal to issues that were never broached with the trial court below. Resisting the temptation to wade into this thicket, we instead confine ourselves to the arguments properly preserved in the record. We ultimately find the defendant's statute of limitations argument meritorious, as the bank waited for too long to commence this suit after accelerating the loan (granted, there were some twists and turns along the way, which we describe below). We accordingly reverse summary judgment in favor of the bank and remand with instructions to enter judgment for the defendant.

         I.

         {¶2} The roots of this case stretch back to April 2004, as it involves a promissory note, executed by defendant-appellant Walter Broadnax and secured by a mortgage on a residential property located in Cincinnati. Nearly three years into his payments (and on the cusp of the global financial crisis), Mr. Broadnax defaulted on the note, failing to make his March 2007 payment. LaSalle Bank, the holder of the note at that time (and predecessor in interest to plaintiff-appellee U.S. Bank) dutifully sent him a notice of default, informing him of the default and advising that, in the absence of curing the default within 30 days, the bank had the right to accelerate the full amount due under the note. The 30 days came and went without any payment from Mr. Broadnax, prompting LaSalle Bank to file, on June 13, 2007, the first (of several) foreclosure complaints against Mr. Broadnax and other parties with interests in the property. After two years of litigation, LaSalle Bank and Mr. Broadnax agreed to a stipulated dismissal signed by counsel, resulting in the court dismissing the case without prejudice.

         {¶3} The record stands silent on what motivated the parties to dismiss the first suit, but in any event, Mr. Broadnax persisted in his failure to satisfy his payment obligations under the note. As a result, roughly three years from dismissal of the first action, in June 2012, LaSalle Bank filed another foreclosure complaint against Mr. Broadnax based upon the same default. This suit enjoyed a shorter lifespan than the first, but ended in similar fashion with a stipulated dismissal without prejudice in May 2013.

         {¶4} In November 2013, after a merger with LaSalle Bank, U.S. Bank joined the festivities, filing a third complaint against Mr. Broadnax-once again seeking to obtain judgment on the same promissory note and to foreclose on the mortgage securing the note. In response to this complaint, Mr. Broadnax raised myriad affirmative defenses, chief among them that the statute of limitations barred U.S. Bank from bringing its claims. Following discovery, both parties moved for summary judgment. In Mr. Broadnax's motion, he argued that because the first complaint filed in June 2007 triggered acceleration of the entire debt, the statute of limitations ran six years later, in June 2013, thereby barring the complaint filed in November 2013. To get around the statute of limitations, U.S. Bank staked out the position that the statute never ran because the third complaint filed in November 2013 accelerated the loan, not the first complaint filed in June 2007. Buttressing the point, U.S. Bank explained (1) that the filing of a complaint alone is not necessarily evidence of acceleration, and (2) that even if the first complaint did somehow prompt acceleration of the loan, then the first complaint's dismissal without prejudice "deaccelerated" the loan.

         {¶5} Upon considering the competing arguments, the magistrate granted summary judgment for U.S. Bank and accordingly denied Mr. Broadnax's motion for summary judgment. Over Mr. Broadnax's objections, the trial court adopted the magistrate's decision granting summary judgment in favor of the bank. Neither the trial court nor the magistrate discussed the statute of limitations defense in the decisions.

         {¶6} Mr. Broadnax now appeals the trial court's judgment, raising a single assignment of error challenging the court's failure to apply the statute of limitations as a bar to the suit. Complicating this appeal, U.S. Bank scuttles its legal theories below (about deacceleration and the like) and now concedes that the first complaint filed in June 2007 accelerated the debt. But to stave off reversal, U.S. Bank fashions a new argument out of whole cloth, insisting that the saving statute pursuant to R.C. 2305.19(A) nevertheless shields its third complaint. In response to this newly-minted argument, Mr. Broadnax features a new argument of his own in his reply brief, asserting that the "double dismissal" rule applies and bars U.S. Bank's present claim for relief. Although the saving statute and the double dismissal rule present interesting questions, as neither made even a cameo below, we need only consider the issue before the trial court-whether the first complaint filed on June 13, 2007 triggered acceleration of the entire debt, thereby starting the statute of limitations clock, and rendering the most recent complaint untimely.

         II.

         {¶7} Construing the facts in the light most favorable to Mr. Broadnax, summary judgment is proper where no genuine question of material fact exists and the moving party is entitled to judgment as a matter of law. First Fin. Bank, N.A. v. Mendenhall, 2017-Ohio-7628, 84 N.E.3d 1113, ¶ 6 (1st Dist.). We review a grant of summary judgment de novo. Ligon v. Winton Woods Park, 1st Dist. Hamilton No. C-180073, 2019-Ohio-1217, ¶ 6.

         {¶8} As noted above, the dispute below turned on whether the first complaint filed in June 2007 accelerated the entire debt, thus triggering the six-year statute of limitations period. Notably, both parties agree that, because the promissory note here is a "negotiable instrument" under Ohio law, the statute of limitations provided within R.C. 1303.16(A) governs. See R.C. 1303.03(A) (" '[Negotiable instrument' means an unconditional promise or order to pay a fixed amount of money * * *."); Mohammad v. Awadallah, 8th Dist. Cuyahoga No. 97590, 2012-Ohio-3455, ΒΆ 19 ("Because the Note in this case was a negotiable instrument, it was governed by a six-year statute of limitations under R.C. 1303.16(A)."). Pursuant to R.C. 1303.16(A), "an action to enforce ...


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