[Cite as Fifth Third Bank, Natl. Assn. v. Reiser, 2023-Ohio-4167.]
IN THE COURT OF APPEALS OF OHIO SIXTH APELLATE DISTRICT WOOD COUNTY
Fifth Third Bank, National Association Court of Appeals No. WD-23-003
Appellee Trial Court No. 2022CV0134
v.
Tony J. Reiser, et al. DECISION AND JUDGMENT
Appellants Decided: November 17, 2023
*****
Laura C. Infante and Ashley E. Mueller, for appellee.
Francis J. Landry, for appellants.
DUHART, J.
{¶ 1} Appellants, Tony J. Reiser and Shelly Reiser, appeal from the judgment of
the Wood County Court of Common Pleas, granting summary judgment and issuing a
decree of foreclosure in favor of appellee, Fifth Third Bank, National Association (“Fifth
Third”). For the reasons that follow, the trial court’s judgment is affirmed. Statement of the Case
{¶ 2} Fifth Third filed its complaint in foreclosure on April 4, 2022. On May 13,
2022, the Reisers filed an answer raising several affirmative defenses, including estoppel
and unclean hands. Fifth Third served a combined set of discovery requests upon the
Reisers and deposed each of them. Fifth Third filed a motion for summary judgment on
November 14, 2022. The Reisers filed an opposition to Fifth Third’s motion for
summary judgment, and Fifth Third filed a reply brief.
{¶ 3} On December 15, 2022, the trial court issued a judgment entry and decree of
foreclosure in favor of Fifth Third. In the judgment entry, the trial court granted Fifth
Third’s motion for summary judgment. It is from this entry that the Reisers now appeal.
Statement of Facts
{¶ 4} On or about May 22, 2002, Tony Reiser entered into a promissory note for
$130,000 and both Tony Reiser and Shelly Reiser agreed to secure that note with a
mortgage upon their real property located at 424 W Sixth Street, Perrysburg, Ohio 43551.
The loan was modified several times. The latest modification, dated March 8, 2019, set a
new interest-bearing principal balance of $112,266.00, with interest on that balance at a
rate of 4.25% per annum, and a deferred balance of $36,269.38. The loan modification
required payments to start April 1, 2019. The monthly modified payment, including
principal and interest in the amount of $486.81, together with taxes and insurance in the
2. amount of $361.39 (the “estimated escrow payment”), was $848.20. This figure
appeared in the loan modification paperwork that was signed by Tony Reiser on
March 20, 2019, and was identified as the “[t]otal estimated new monthly payment,”
“[e]ffective April 1, 2019.”
{¶ 5} As their first payment under the newly-modified loan, the Reisers issued a
check to Fifth Third, dated April 10, 2019, in the amount of $486.81. The Reisers
contend that the payment was a partial payment intended to cover only the principal and
interest that was due, because -- despite having made certain efforts to speak to someone
at the bank -- they were unable to obtain to “an exact payment amount” for the escrow
portion of the payment.
{¶ 6} Upon receipt of the partial payment, Fifth Third immediately sent a letter to
the Reisers indicating that because the amount of $486.81 did not match their monthly
payment of $848.20, Fifth Third did not know how to apply the funds. The letter then
requested that the Reisers fax or send to a specific address their written instructions as to
how the funds should be applied. The payment was ultimately returned to the Reisers on
May 8, 2019, as a “short payment return.”
{¶ 7} Meanwhile, in a communication dated April 3, 2019, Fifth Third sent the
Reisers an Annual Mortgage Escrow Statement. The statement indicated that there was a
shortage in the Reisers’ escrow account in the amount of $416.56, and it gave the Reisers
two options: (1) they could either do nothing, and the shortage would be added into their
3. monthly mortgage payment; or (2) they could pay the shortage and there would be no
escrow shortage added to their monthly payment. The Reisers returned the statement
with a check for $361.90, dated April 17, 2019. Fifth Third applied the amount to the
escrow shortage. The Reisers contend that they wrote on the check “option 1,”
“indicating they wished the payment go towards their monthly payment” and not into the
escrow account. They further contend that the payment of $361.90 was meant to be
combined with the partial payment of $486.81 that they had previously submitted in order
to fully cover the monthly loan payment for April 2019.
{¶ 8} The Reisers did not submit a payment in May, June, July, August, or
September 2019.1 Instead, they attempted to get another loan modification. In
September 2019, the bank began foreclosure proceedings in case No. 2019CV0488.2
{¶ 9} The Reisers did submit several payments in October 2019. At that point, the
loan was due for seven payments: April, May, June, July, August, September, and
October 2019. The payments were not sufficient to bring the loan current, but they were
applied to the payments for April, May, and June 2019.
1 Any confusion concerning the payment amount that was due should certainly have been cleared up by May 2019, as the monthly mortgage statement dated April 17, 2019 (which was sent to the Reisers) specified that the “regular monthly payment” amount was $848.20. 2 This was an earlier foreclosure action that was voluntarily dismissed by Fifth Third on January 4, 2022.
4. {¶ 10} The Reisers allege that “because they were in default,” Fifth Third refused
to accept any additional payments from them in November 2019.
{¶ 11} Pursuant to provision 1 of the master mortgage, Fifth Third, as the lender,
“may accept any payment or partial payment insufficient to bring the Loan current,
without waiver of any rights hereunder or prejudice to its rights to refuse such payment or
partial payments in the future * * *.”
{¶ 12} On December 15, 2022, the trial court issued its judgment entry in the
current foreclosure action, finding that the conditions in the mortgage deed had been
broken and that Fifth Third was entitled to have “the equity of redemption and dower of
all Defendants in and to said premises foreclosed.”
Assignment of Error
{¶ 13} The Reisers assert the following assignment of error on appeal:
I. The trial court erred in determining that Appellees were not
estopped from pursuing foreclosure due to unclean hands or estoppel in
refusing to accept payments subsequent to the loan modification and then
declaring Appellants to be in default.
Analysis
{¶ 14} It is the Reisers’ position that the bank “refused to accept” and/or
“misapplied” their April 2019 payment, which “resulted in the bank wrongfully
foreclosing on the loan.” According to the Reisers, “[t]his is reprehensible conduct on
5. the Bank’s part, and evidences its unclean hands.” “To establish the affirmative defense
of unclean hands, a defendant must show that the plaintiff seeking relief engaged in
reprehensible conduct with respect to the subject matter of the action.” Wells Fargo
Bank, N.A. v. Lee, 2014-Ohio-4514, 20 N.E.3d 1236, ¶ 57 (6th Dist.), citing State ex rel.
Coughlin v. Summit Cty. Bd. of Elections, 136 Ohio St.3d 371, 2013-Ohio-3867, 995
N.E.2d 1194, ¶ 16.
{¶ 15} In this case, there is no evidence that Fifth Third engaged in any kind of
“reprehensible” conduct in connection with the foreclosure proceedings against the
Reisers.
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[Cite as Fifth Third Bank, Natl. Assn. v. Reiser, 2023-Ohio-4167.]
IN THE COURT OF APPEALS OF OHIO SIXTH APELLATE DISTRICT WOOD COUNTY
Fifth Third Bank, National Association Court of Appeals No. WD-23-003
Appellee Trial Court No. 2022CV0134
v.
Tony J. Reiser, et al. DECISION AND JUDGMENT
Appellants Decided: November 17, 2023
*****
Laura C. Infante and Ashley E. Mueller, for appellee.
Francis J. Landry, for appellants.
DUHART, J.
{¶ 1} Appellants, Tony J. Reiser and Shelly Reiser, appeal from the judgment of
the Wood County Court of Common Pleas, granting summary judgment and issuing a
decree of foreclosure in favor of appellee, Fifth Third Bank, National Association (“Fifth
Third”). For the reasons that follow, the trial court’s judgment is affirmed. Statement of the Case
{¶ 2} Fifth Third filed its complaint in foreclosure on April 4, 2022. On May 13,
2022, the Reisers filed an answer raising several affirmative defenses, including estoppel
and unclean hands. Fifth Third served a combined set of discovery requests upon the
Reisers and deposed each of them. Fifth Third filed a motion for summary judgment on
November 14, 2022. The Reisers filed an opposition to Fifth Third’s motion for
summary judgment, and Fifth Third filed a reply brief.
{¶ 3} On December 15, 2022, the trial court issued a judgment entry and decree of
foreclosure in favor of Fifth Third. In the judgment entry, the trial court granted Fifth
Third’s motion for summary judgment. It is from this entry that the Reisers now appeal.
Statement of Facts
{¶ 4} On or about May 22, 2002, Tony Reiser entered into a promissory note for
$130,000 and both Tony Reiser and Shelly Reiser agreed to secure that note with a
mortgage upon their real property located at 424 W Sixth Street, Perrysburg, Ohio 43551.
The loan was modified several times. The latest modification, dated March 8, 2019, set a
new interest-bearing principal balance of $112,266.00, with interest on that balance at a
rate of 4.25% per annum, and a deferred balance of $36,269.38. The loan modification
required payments to start April 1, 2019. The monthly modified payment, including
principal and interest in the amount of $486.81, together with taxes and insurance in the
2. amount of $361.39 (the “estimated escrow payment”), was $848.20. This figure
appeared in the loan modification paperwork that was signed by Tony Reiser on
March 20, 2019, and was identified as the “[t]otal estimated new monthly payment,”
“[e]ffective April 1, 2019.”
{¶ 5} As their first payment under the newly-modified loan, the Reisers issued a
check to Fifth Third, dated April 10, 2019, in the amount of $486.81. The Reisers
contend that the payment was a partial payment intended to cover only the principal and
interest that was due, because -- despite having made certain efforts to speak to someone
at the bank -- they were unable to obtain to “an exact payment amount” for the escrow
portion of the payment.
{¶ 6} Upon receipt of the partial payment, Fifth Third immediately sent a letter to
the Reisers indicating that because the amount of $486.81 did not match their monthly
payment of $848.20, Fifth Third did not know how to apply the funds. The letter then
requested that the Reisers fax or send to a specific address their written instructions as to
how the funds should be applied. The payment was ultimately returned to the Reisers on
May 8, 2019, as a “short payment return.”
{¶ 7} Meanwhile, in a communication dated April 3, 2019, Fifth Third sent the
Reisers an Annual Mortgage Escrow Statement. The statement indicated that there was a
shortage in the Reisers’ escrow account in the amount of $416.56, and it gave the Reisers
two options: (1) they could either do nothing, and the shortage would be added into their
3. monthly mortgage payment; or (2) they could pay the shortage and there would be no
escrow shortage added to their monthly payment. The Reisers returned the statement
with a check for $361.90, dated April 17, 2019. Fifth Third applied the amount to the
escrow shortage. The Reisers contend that they wrote on the check “option 1,”
“indicating they wished the payment go towards their monthly payment” and not into the
escrow account. They further contend that the payment of $361.90 was meant to be
combined with the partial payment of $486.81 that they had previously submitted in order
to fully cover the monthly loan payment for April 2019.
{¶ 8} The Reisers did not submit a payment in May, June, July, August, or
September 2019.1 Instead, they attempted to get another loan modification. In
September 2019, the bank began foreclosure proceedings in case No. 2019CV0488.2
{¶ 9} The Reisers did submit several payments in October 2019. At that point, the
loan was due for seven payments: April, May, June, July, August, September, and
October 2019. The payments were not sufficient to bring the loan current, but they were
applied to the payments for April, May, and June 2019.
1 Any confusion concerning the payment amount that was due should certainly have been cleared up by May 2019, as the monthly mortgage statement dated April 17, 2019 (which was sent to the Reisers) specified that the “regular monthly payment” amount was $848.20. 2 This was an earlier foreclosure action that was voluntarily dismissed by Fifth Third on January 4, 2022.
4. {¶ 10} The Reisers allege that “because they were in default,” Fifth Third refused
to accept any additional payments from them in November 2019.
{¶ 11} Pursuant to provision 1 of the master mortgage, Fifth Third, as the lender,
“may accept any payment or partial payment insufficient to bring the Loan current,
without waiver of any rights hereunder or prejudice to its rights to refuse such payment or
partial payments in the future * * *.”
{¶ 12} On December 15, 2022, the trial court issued its judgment entry in the
current foreclosure action, finding that the conditions in the mortgage deed had been
broken and that Fifth Third was entitled to have “the equity of redemption and dower of
all Defendants in and to said premises foreclosed.”
Assignment of Error
{¶ 13} The Reisers assert the following assignment of error on appeal:
I. The trial court erred in determining that Appellees were not
estopped from pursuing foreclosure due to unclean hands or estoppel in
refusing to accept payments subsequent to the loan modification and then
declaring Appellants to be in default.
Analysis
{¶ 14} It is the Reisers’ position that the bank “refused to accept” and/or
“misapplied” their April 2019 payment, which “resulted in the bank wrongfully
foreclosing on the loan.” According to the Reisers, “[t]his is reprehensible conduct on
5. the Bank’s part, and evidences its unclean hands.” “To establish the affirmative defense
of unclean hands, a defendant must show that the plaintiff seeking relief engaged in
reprehensible conduct with respect to the subject matter of the action.” Wells Fargo
Bank, N.A. v. Lee, 2014-Ohio-4514, 20 N.E.3d 1236, ¶ 57 (6th Dist.), citing State ex rel.
Coughlin v. Summit Cty. Bd. of Elections, 136 Ohio St.3d 371, 2013-Ohio-3867, 995
N.E.2d 1194, ¶ 16.
{¶ 15} In this case, there is no evidence that Fifth Third engaged in any kind of
“reprehensible” conduct in connection with the foreclosure proceedings against the
Reisers. The Reisers failed to comply with the terms of the note and mortgage and loan
modification by failing to submit timely and complete payments, and the loan went into
default and remained due for the July 1, 2019 payment and for all payments due since
that time.
{¶ 16} Even if there was confusion with respect to the April 2019 payment, the
Reisers knew the amounts to pay in May, June, July, August, and September of 2019,
and, yet, they failed to make those payments. The bank, in accepting the Reisers’
October 2019 payments, in applying them to the April, May, and June 2019 payments,
and in refusing to accept any payments made thereafter, acted within its rights under the
master mortgage contract. The doctrine of unclean hands simply does not apply in this
case to preclude foreclosure on the Reisers’ property.
6. {¶ 17} The Reisers additionally argue that Fifth Third should have been estopped
for “refusing to accept payments subsequent to the loan modification and then declaring
[the Reisers] to be in default.”
{¶ 18} To establish estoppel by conduct:
There must be a misrepresentation of the facts, or a willful concealment of
the same, and this representation or concealment must be made with a
knowledge of the facts, and the party to whom the representations are
made, or from whom there is concealment, must be ignorant of the facts,
and it is very essential that the representation or concealment must be made
with the intention of having the other party act upon it. It must also appear
that the other party was induced to act upon it, and estoppel applies only to
parties and privies, and does not extend to a stranger. Allred v. Smith, 135
N. C. 443, 47 S. E. 597, 599, 65 L. R. A. 924.
Lubric Oil Co. v. Drawe, 26 Ohio App. 478, 480, 160 N.E. 93 (8th Dist.1927). In this
case, there is no evidence to suggest that Fifth Third either misrepresented or willfully
concealed any facts -- let alone any facts upon which the Reisers could have relied to
their detriment. Instead, the documentation that Fifth Third provided to the Reisers, both
before and after April 2019, made clear the monthly mortgage payment amount, with the
proper number provided in: (1) the loan modification documentation that was signed by
Tony Reiser on March 20, 2019; (2) the April 2019 letter that was sent to the Reisers
7. attempting to address the partial payment received; and (3) the relevant monthly
mortgage statements, beginning in April 2019. Further, Fifth Third acted within its rights
under the master mortgage contract when -- after declaring the Reisers to be in default,
months after receiving any payment -- it accepted the Reisers’ October 2019 payments
and applied them to the April, May, and June 2019 payments, and then refused to accept
any payments made thereafter. Estoppel by conduct is not an appropriate defense in this
case. Accordingly, appellants’ assignment of error is found not well-taken.
Conclusion
{¶ 19} The judgment of the Wood County Court of Common Pleas is affirmed.
Appellants are to pay the costs of appeal pursuant to App.R. 24.
Judgment affirmed.
A certified copy of this entry shall constitute the mandate pursuant to App.R. 27. See also 6th Dist.Loc.App.R. 4.
Christine E. Mayle, J. ____________________________ JUDGE Gene A. Zmuda, J. ____________________________ Myron C. Duhart, P.J. JUDGE CONCUR. ____________________________ JUDGE
8. This decision is subject to further editing by the Supreme Court of Ohio’s Reporter of Decisions. Parties interested in viewing the final reported version are advised to visit the Ohio Supreme Court’s web site at: http://www.supremecourt.ohio.gov/ROD/docs/.
9.