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Rimmer v. Citifinancial, Inc.

Court of Appeals of Ohio, Eighth District, Cuyahoga

January 16, 2020

KAREN RIMMER, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, Plaintiffs-Appellants,
v.
CITIFINANCIAL, INC., Defendant-Appellee.

          Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-05-564493

          Dworken & Bernstein Co., L.PA., and Patrick J. Perotti; Brian Ruschel, for appellants.

          Thompson Hine, L.L.P., Kip T. Bollin, and Mark R. Butscha, Jr., for appellee.

          JOURNAL ENTRY AND OPINION

          MICHELLE J. SHEEHAN, JUDGE.

         {¶ 1} This case concerns several issues involving the class definition and identification of class members in a class action. This is the seventh appeal by Karen Rimmer in the class action she initiated 15 years ago in 2005. In 2000, Rimmer executed a note and security agreement with Bank of Yorba Linda for $5, 000. Her loan was subsequently assigned to Associates Financial Services, Inc., which then merged with CitiFinancial Inc. ("Citi"), and Citi became the holder of Rimmer's mortgage. On April 10, 2001, Rimmer paid off her loan in full.

         {¶ 2} R.C. 5301.36 requires a bank to file an entry of satisfaction of mortgage with the county recorder within 90 days of full payment of the mortgage. Citi, however, did not file the entry of Rimmer's full payment of her mortgage until August 16, 2001, past the statutory time of 90 days.

         {¶ 3} Four years later, in 2005, Rimmer filed a class action complaint against Citi, alleging Citi failed to file an entry of satisfaction of mortgage with the county recorder within 90 days of full payment of the mortgage, in violation of R.C. 5301.36. Rimmer sought automatic damages ($250), interest, and costs as allowed under R.C. 5301.36(C).

         {¶ 4} Throughout 2005 and 2006, the parties engaged in extensive discovery, including written discovery, document productions, and depositions. Rimmer served more than six dozen requests for production of documents.

         {¶ 5} On January 25, 2006, Rimmer filed a motion for class certification seeking to represent a class of individuals who paid off their mortgages in full but for whom Citi failed to timely file an entry of satisfaction of those mortgage with the county recorder. On March 13, 2006, Citi filed an opposition to class certification. Citi raised the issue of arbitration provisions contained in the majority of the loan agreements. It represented to the trial court that its records showed that out of 98, 206 loans that were paid off during the relevant period (March 8, 1999, to December 31, 2005), all but 5, 254 were subject to an arbitration agreement. Citi submitted affidavits with attached business records identifying the loans subject to arbitration agreements.

         {¶ 6} Citi produced, for the inspection of Rimmer's counsel, spreadsheets that identified loans that were satisfied during the pertinent period but were not released within 90 days. On June 29, 2006, Rimmer's counsel reviewed the documents produced. In addition to the spreadsheets, Citi also identified witnesses available for deposition regarding these loans.

         {¶ 7} Rimmer moved the court to strike Citi's claim regarding the arbitration agreement. The trial court denied the motion. Rimmer then moved for partial summary judgment as to her individual claim against Citi. Citi filed its cross-motion for summary judgment, alleging that it mailed the entry of satisfaction within the statutory time but the recorder failed to timely process the entry. The trial court granted summary judgment in favor of Rimmer on her individual claim. The trial court, however, denied her motion for class certification without providing an analysis.

         Rimmer I

         {¶ 8} Rimmer appealed the trial court's denial of class certification. This court affirmed the summary judgment in favor of Rimmer on her individual claim, rejecting Citi's claim that it timely processed Rimmer's release and was entitled to a presumption of timely delivery.

         {¶ 9} This court, however, reversed the trial court's decision denying class certification. Rimmer v. Citifinancial, 8th Dist. Cuyahoga No. 89407, 2008-Ohio-1814 ("Rimmer I "). This court determined that Rimmer met all seven requirements for class certification under Civ.R. 23:[1] she has defined an identifiable and manageable class; a question of law common to all members of the class predominates over any individual legal issues that may arise; and a single adjudication as a class action is the most efficient and fair manner by which to resolve the matter. Rimmer I at ¶ 30. Regarding the arbitration agreement in many mortgagors' mortgage agreements, this court determined that the existence of the arbitration agreement would not defeat the class certification. [2] Id. at ¶ 27.

         {¶ 10} Citi appealed this court's decision to the Supreme Court of Ohio. That court accepted the case for review but held the case for its decision in Alexander v. Wells Fargo Fin. Ohio 1, Inc., 122 Ohio St.3d 341, 2009-Ohio-2962, 911 N.E.2d 286. The Supreme Court of Ohio subsequently released Alexander, holding that arbitration agreements in loan documents apply to claims for late recording of mortgage satisfactions. After Alexander was released, the Supreme Court of Ohio remanded the case to this court for further consideration of the case in light of Alexander. Rimmer v. CitiFinancial, Inc., 123 Ohio St.3d 128, 2009-Ohio-4902, 914 N.E.2d 406. Upon the remand from the Supreme Court of Ohio, this court in turn remanded the case to the trial court to apply Alexander and to decide whether to certify a class in light of Alexander.

         The Trial Court Certified the Class in 2013

         {¶ 11} Three and one-half years after this court remanded the case, on March 11, 2013, the trial court certified the class, excluding from the class those who had an arbitration agreement in their loan agreements. The trial court defined the class as:

All persons who from March 8, 1999 entered into a residential mortgage agreement (as defined by R.C. 5301.36) with Citifinancial, Inc. without entering into an arbitration provision agreement with Citifinancial, Inc. relating to disputes arising out of said mortgage agreement, and thereafter satisfied their obligation where Citifinancial, Inc. (or any predecessor or other entity acquired or merged with, or otherwise now part of Citifinancial, Inc., including any affiliates, subsidiaries, and/or related lending institutions) was the mortgagee at the time of satisfaction, and, for each such satisfied mortgage, Citifinancial, Inc. did not record the fact of the satisfaction in the appropriate county recorder's office and pay fees required for the recording within 90 days from the date of satisfaction.

(Emphasis added.)

         Rimmer II

         {¶ 12} Rimmer appealed the trial court's class definition. Although the class as defined by the trial court limited its members to those who entered into a mortgage and paid off the loan from March 8, 1999 and thereafter, Rimmer did not challenge this aspect of the class definition. Instead, she raised three other issues regarding the class definition. First, she argued Alexander did not require the trial court to exclude individuals who had an arbitration agreement from the class. This court disagreed, finding the trial court properly applied Alexander in excluding from the class individuals whose loan agreements contained an arbitration agreement. Rimmer v. Citifinancial, Inc., 2013-Ohio-5732, 6 N.E.3d 621, ¶ 32 (8th Dist.) ("Rimmer II ").

         {¶ 13} Second, Rimmer argued that a subgroup of mortgagors whose arbitration agreements lacked a certain sentence should not be excluded from the case.[3] This court rejected the claim as well.

         {¶ 14} Third, Rimmer argued the trial court's definition improperly excluded those individuals who entered into loan agreements with Citi's predecessors or other entities that were acquired by or merged with Citi. This court agreed and remanded the matter to the trial court for a revision of the class definition to properly include these individuals.[4]

         {¶ 15} On remand from Rimmer II, the trial court issued a decision on March 19, 2014, revising the class definition as follows:

All persons who from March 8, 1999 entered into a residential mortgage agreement (as defined by R.C. 5301.36) with Citifinancial, Inc. without entering into an arbitration provision agreement with Citifinancial, Inc. relating to disputes arising out of said mortgage agreement, and thereafter satisfied their obligation where Citifinancial, Inc. (or any predecessor or other entity acquired or merged with, or otherwise now part of Citifinancial, Inc., including any affiliates, subsidiaries, and/or related lending institutions) was the mortgagee at the time of satisfaction, and, for each such satisfied mortgage, Citifinancial, Inc. did not record the fact of the satisfaction in the appropriate county recorder's office and pay fees required for the recording within 90 days from the date of satisfaction.

         Rimmer III

         {¶ 16} The class definition, as stated by the trial court in its March 19, 2014 decision, again failed to include individuals who entered into a mortgage agreement with Citi's predecessors or other entities that were acquired or merged with Citi. Rimmer appealed from the decision; in her sole assignment of error, she argued the trial court did not follow this court's mandate in Rimmer II to include those individuals in the class. This court agreed and remanded the matter for the trial court to correct the class definition as follows:

All persons who from March 8, 1999 entered into a residential mortgage agreement (as defined by R.C. 5301.36) with Citifinancial, Inc. (or any predecessor or other entity acquired or merged with, or otherwise now part of Citifinancial, Inc., including any affiliates, subsidiaries, and/or related lending institutions) without entering into an arbitration provision agreement with Citifinancial, Inc. relating to disputes arising out of said mortgage agreement, and thereafter satisfied their obligation where Citifinancial, Inc. (or any predecessor or other entity acquired or merged with, or otherwise now part of Citifinancial, Inc., including any affiliates, subsidiaries, and/or related lending institutions) was the mortgagee at the time of satisfaction, and, for each such satisfied mortgage, Citifinancial, Inc. did not record the fact of the satisfaction in the appropriate county recorder's office and pay fees required for the recording within 90 days from the date of satisfaction.

Rimmer v. Citifinancial, Inc., 8th Dist. Cuyahoga No. 101254, 2014-Ohio-5287, ¶ 10 ("Rimmer ...


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