[Cite as Nationstar Mtge., L.L.C. v. Cody, 2020-Ohio-5553.]
IN THE COURT OF APPEALS OF OHIO SIXTH APPELLATE DISTRICT OTTAWA COUNTY
Nationstar Mortgage LLC, d/b/a Court of Appeals No. OT-18-041 Champion Mortgage of Ohio, et al. Trial Court No. 13CV446E Appellees
v.
F. Kevin Cody, Individually and as Executor of the Estate of Clement J. Cody, et al. DECISION AND JUDGMENT
Appellants Decided: December 4, 2020
*****
Michael J. Sikora III, Alexander E. Goetsch and Richard T. Craven, for appellee Nationstar Mortgage LLC.
Eric T. Deighton, for appellee Generation Mortgage Co.
Joseph B. Jerome and John D. Grauer, for appellants.
SINGER, J.
{¶ 1} Appellants Kevin Cody, individually and as executor of the Estate of
Clement J. Cody, Colleen Michelle Clark, and Rick Clark (“appellants”) appeal the
July 26, 2018 decision of the Ottawa County Court of Common Pleas which granted appellees Nationstar Mortgage LLC (“Nationstar”) and Generation Mortgage Co.
(“Generation”) summary judgment.
{¶ 2} Appellants bring forth five assignments of error for our review:
1. The Trial Court erred as a matter of law when it granted judgment
in favor of Plaintiff-Appellee Nationstar on its Motion for Summary
Judgment despite the existence of genuine issues of material fact.
2. The Trial Court erred as a matter of law when it granted judgment
in favor of New Part Defendant-Appellee Generation Mortgage on its
Motion for Summary Judgment despite the existence of genuine issues of
material fact.
3. The Trial Court’s (sic) erred as a matter of law in finding that the
sum of $703,201.45 is due and owing under the mortgage loan agreement
and note despite the existence of genuine issues of material fact.
4. The Trial Court abused its discretion by finding that the sum of
$703,201.45 is due and owing under the mortgage loan agreement and note
because it did not hold a hearing on the issue of damages before it entered
its Order of Foreclosure in favor of Plaintiff-Appellee Nationstar.
5. The Trial Court abused its discretion by finding that the equity of
redemption of all Defendants shall be foreclosed prior to the confirmation
of sale in violation of Ohio Rev. C. 2329.33. (sic).
2. {¶ 3} In January 2008, Clement Cody purchased two parcels on Put-In-Bay Island
for $875,000. One of these parcels contained a home, one parcel contained a concrete
dock, and a garage sat partially on each parcel. On August 23, 2010, Clement Cody
entered into a home equity loan Agreement, note, and mortgage (collectively “mortgage
agreement”). The mortgage agreement was a reverse mortgage whereby Clement Cody
received $938,250 in return for encumbering his property which would be payable upon
Clement Cody’s death. The property served as a vacation home for Clement Cody and
his family.
{¶ 4} In the process of obtaining the mortgage agreement, appellee Generation
completed an appraisal of the property. This appraisal considered the value of the home,
garage, and concrete dock when determining the value of the mortgage. The appraisal
only references the street address of the home, rather than the address of the vacant
address, 0 Toledo Avenue.
{¶ 5} On December 5, 2013, appellee Generation Mortgage Company
(“Generation”) filed a complaint for foreclosure alleging Clement Cody defaulted on the
mortgage agreement. Clement Cody passed away on October 12, 2012, and the loan was
not paid off.
{¶ 6} Clement Cody’s son, appellant Kevin Cody, periodically occupied the
vacation home during the summer months. The home is located on an island in Lake Erie
and is difficult to reach during the winter months. Generation became aware that there
would be no one occupying the home from November 2014 through March 2015;
3. Generation sent an agent to winterize the home and secure it. The home was winterized
and secured in April of 2015. The mortgage agreement authorized “reasonable action to
protect and preserve the Property” as long as the borrower defaulted, the property was
vacated, or the property was abandoned.
{¶ 7} On May 18, 2015, the underlying mortgage was assigned from Generation to
Nationstar. Nationstar was substituted as plaintiff in the foreclosure matter and
Nationstar continued to pursue the foreclosure.
{¶ 8} On April 28, 2017, appellants filed a new amended answer and filed a third-
party complaint against Generation for trespass and conversion based on its actions to
secure the property. The trial court denied Generation’s motion to dismiss the complaint
and Generation answered the new complaint.
{¶ 9} On April 4, 2018, Generation filed a motion for summary judgment
regarding the new complaint and its claims against Generation. Following an opposition
that was filed by appellants, the trial court granted the motion for summary judgment.
The trial court found that Clement Cody passed away on October 12, 2012, his death
caused a default in the mortgage agreement, and that upon that default, Generation was
contractually entitled to enter the home and winterize it.
{¶ 10} On March 15, 2018, Nationstar filed a motion for summary judgment on its
foreclosure claim. The trial court granted Nationstar’s motion for summary judgment on
July 26, 2018, and it found that Clement Cody passed away on October 12, 2012, that his
4. death resulted in a default under the note and mortgage, and that the note and mortgage
were not ambiguous.
Assignment of Error One: The Trial Court Erred when it Granted Summary Judgment on the Claims of Nationstar
{¶ 11} Appellants argue that the trial court erred when it granted summary
judgment to Nationstar on its complaint in foreclosure because appellants presented
evidence which created issues of material fact about whether the mortgage agreement
was valid. Appellants argue that there were genuine issues of material fact surrounding
whether the mortgage encumbered both parcels, rather than just the parcel with the home.
Appellants argue that Clement Cody did not intend to encumber both parcels and
informed his family as such. They also argue that the failure of the appraisal report to
include addresses for both parcels also indicated that the parties only intended to include
the parcel with the home on it. Appellants argue the trial court erred when it failed to
take this into consideration when determining whether summary judgment for Nationstar
was appropriate.
{¶ 12} Nationstar responds by arguing that there were no genuine issues of
material fact that the mortgage agreement was valid because the legal description
attached to the mortgage agreement clearly includes both the parcel with the home and
the vacant lot. Nationstar also argues that the trial court did not err in failing to consider
parol evidence because appellants failed to present clear and convincing evidence
demonstrating a mutual mistake between the parties. Nationstar argues that the intent of
5. the parties to include both parcels was evidenced also by the inspection report generated
when determining the value of the parcels, because it mentions a garage which is mostly
located on the vacant parcel and a cement dock which is entirely located on the vacant
parcel. Nationstar further argues that the section cited by appellants does not prohibit
mortgages on vacant parcels when it is included with an eligible property. Finally,
Nationstar argues that appellants improperly attempted to reform the mortgage through
an affirmative defense.
{¶ 13} An appellate court reviews a trial court’s summary judgment decision
de novo. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996).
Summary judgment will be granted when no genuine issues of material fact exist when
after, construing all the evidence in favor of the nonmoving party, reasonable minds can
only conclude that the moving party is entitled to judgment as a matter of law. Civ.R.
56(C). Accord Lopez v. Home Depot, USA, Inc., 6th Dist. Lucas No. L-02-1248, 2003-
Ohio-2132, ¶ 7. When a properly supported motion for summary judgment is made, an
adverse party may not rest on mere allegations or denials in the pleading, but must
respond with specific facts showing there is a genuine issue of material fact. Civ.R.
56(E); Riley v. Montgomery, 11 Ohio St.3d 75, 79, 463 N.E.2d 1246 (1984).
{¶ 14} A de novo review requires an independent review of the trial court’s
decision without any deference to the trial court’s determination. Grafton at 105. A trial
court shall grant summary judgment only where: (1) no genuine issue of material fact
remains to be litigated; (2) the moving party is entitled to judgment as a matter of law;
6. and (3) viewing the evidence most strongly in favor of the nonmoving party, reasonable
minds can come to but one conclusion and that conclusion is adverse to the nonmoving
party. Civ.R. 56(C); Harless v. Willis Day Warehousing Co., 54 Ohio St.2d 64, 65-66,
375 N.E.2d 46 (1978).
Intention of Clement Cody and Use of Parol Evidence
{¶ 15} Appellants argued and testified at deposition that their father never
intended to encumber both parcels rather than just the parcel with the home on it. Both
Kevin Cody and Colleen Michelle Clark, Clement Cody’s children, testified at their
depositions that their father informed them that the reverse mortgage would only
encumber the house and not the vacant parcel. They also contend that the lender did not
intend to encumber both properties because the mortgage documents and appraisal report
only list the address of the home and not the address of the vacant lot. Appellants argue
that because the legal description was attached to the mortgage agreement, rather than
being included in the mortgage agreement, the legal description was not integrated into
the mortgage agreement and cannot be used to encumber both parcels.
{¶ 16} The construction of a written agreement is a matter of law for the court.
Alexander v. Buckeye Pipe Line Co., 53 Ohio St.2d 241, 374 N.E.2d 146 (1976),
paragraph one of the syllabus. The court presumes the intent of the parties is reflected in
the language of the contract and the court must examine the contract as a whole. Kelly v.
Med. Life Ins. Co., 31 Ohio St.3d 130, 590 N.E.2d 411 (1987), paragraph one of the
syllabus. The words of a contract will be given their plain and ordinary meaning unless
7. “manifest absurdity results, or unless some other meaning is clearly evidenced from the
face or overall contents of the instrument.” Alexander at paragraph two of the syllabus.
When the contract language is clear and unambiguous, a court may look no further than
the writing itself to ascertain the intent of the parties. Id. If there is ambiguity in the
language of a contract, the court first looks to extrinsic evidence to determine the parties’
intent. Skivolocki v. E. Ohio Gas Co., 38 Ohio St.2d 244, 246, 313 N.E.2d 374 (1974),
paragraph one of the syllabus.
{¶ 17} Despite appellants’ contentions, the intention of the mortgage agreement
was clearly to include both the parcel with the home and vacant parcel. The mortgage
agreement includes a legal description that measures both parcels by metes and bounds.
The legal description is integrated by reference into the rest of the mortgage agreement.
The mortgage agreement is clear and unambiguous and the legal description clearly sets
out the boundary of both parcels. Therefore, the mortgage agreement clearly
demonstrated the parties’ intentions to encumber both pieces of property and therefore
the trial court could not consider the parol evidence presented by appellees.
HUD Regulations
{¶ 18} Appellants argue that the mortgage on the vacant parcel is invalid because
federal regulations do not permit a mortgage on a vacant parcel. 24 C.F.R. 206.45 has
many requirements for eligible properties. One of these requirements is that “[t]he
property shall include a dwelling designed principally as a residence for one family or
such additional families as the Commissioner shall determine.”
8. {¶ 19} The mortgage in this matter does encumber a dwelling that is principally
used as a residence for one family. The mortgage also includes the vacant lot but there
does not appear any limitation on whether that mortgage can include multiple parcels
which may be a residence. Appellants provide no support for their contention that such a
limitation exists. Therefore, we find appellants’ first assignment of error is found not
well-taken on this basis.
Assignment of Error Two: The Trial Court Erred when it Granted Summary Judgment to Generation on Appellants’ Complaint for Trespass and Conversion
{¶ 20} Appellants argue that there were genuine issues of material fact as to
whether Generation authorized its agent to enter the home without right or authority.
Appellants argue that there were genuine issues of material fact because the property was
never vacant or abandoned by appellants. Generation’s agent broke locks off of doors
and the garage, drained the hot water tank, and took the water meter. Appellants also
argue that Generation was on notice that appellants occupied the property and were
maintaining the property pursuant to their obligations to the estate.
{¶ 21} Generation only responded to appellants’ second assignment of error as
that was the only assignment that directly mentioned Generation. Generation argues that
it was contractually permitted to enter the home and preserve the property pursuant to the
mortgage agreement. The clause on which Generation bases its claims states “If the
property is vacant or abandoned or the loan is in default, Lender may take reasonable
actions to protect and preserve such vacant or abandoned Property without notice to the
9. Borrower.” Generation argues that it does not matter whether the property was
abandoned or vacant because the death of Clement Cody was a default under the
mortgage agreement. Generation also notes that appellants admitted that the home served
as a vacation home that sometimes was unoccupied. The mortgage indicates that
Generation was entitled to accelerate the debt and demand immediate payment in full if
the borrower dies and the property no longer remains the primary residence of the
primary borrower.
{¶ 22} Appellants argues in their reply that the property was occupied and
maintained so therefore the property could not have been abandoned or vacant. Further,
appellants argue it could not have been in default of a mortgage agreement that was not
valid in the first place.
{¶ 23} “‘Trespass is the unlawful entry upon the property of another.’” Kramer v.
Angel’s Path, LLC, 174 Ohio App.3d 359, 2007-Ohio-7099, 882 N.E.2d 46, ¶ 24 (6th
Dist.), quoting Chance v. BP Chems., Inc., 77 Ohio St.3d 17, 24, 670 N.E.2d 985 (1996).
“The elements of trespass include ‘(1) an unauthorized intentional act and (2) entry upon
land in the possession of another.’” Id., quoting Brown v. Cnty. Comms. of Scioto Cnty.,
87 Ohio App.3d 704, 716, 633 N.E.2d 1153 (4th Dist.1993).
{¶ 24} “The essential elements of a conversion claim are (1) ownership or right to
possession of the property at the time of conversion, (2) a wrongful act or disposition of
that property right by the defendant, and (3) damages.” Hutchings v. Hutchings,
10. 2019-Ohio-5362, 150 N.E.3d 548, ¶ 23 (6th Dist.), citing Peirce v. Szymanski, 6th Dist.
Lucas No. L-11-1298, 2013-Ohio-205, ¶ 19.
{¶ 25} As we previously found that the mortgage agreement was valid and
enforceable, we must find that appellants were in default under the same agreement when
Clement Cody passed away. The note states that a default occurs when the borrower
passes away and permits the lender to require immediate payment of all outstanding
principal and interest. A default may also be found if all of the borrower’s title in the
property is otherwise transferred. Therefore, appellants were in default of the mortgage
agreement due to the death of Clement Cody. As such, under the mortgage agreement,
Generation and its representatives had permission from appellants to secure the property.
Generation had permission from appellants to enter the property and take the reasonable
actions it completed. Appellants’ second assignment of error is not well-taken as
Generation was permitted to enter the property under the mortgage agreement.
Assignment of Error Three: The Trial Court Erred when it Determined that 703,201.45 is Due and Owing from the Mortgage Agreement
{¶ 26} Next, appellants argue that the trial court erred when it determined the
amount that was due and owing under the mortgage agreement. The trial court found that
$439,534.23 was still due in principal, $227,458.96 due in interest, $7,133.62 was due for
property taxes, $3,316 was due for insurance, and $475 was due for preservation.
Appellants argue that they put all of these amounts at issue and demonstrated genuine
issues of material fact. Appellants argue that they placed the mortgage agreement under
11. dispute, that there was no evidence that preservation was required or that Generation had
the authority to do so, and appellants paid the property taxes and insurance.
{¶ 27} Nationstar responds by arguing that appellants failed to present valid
evidence under Civ.R. 56(C) that would contradict its affidavit and accounting of
damages. Appellants’ opposition to Nationstar’s motion for summary judgment does not
contest the amount Nationstar claims to be owed, but rather focuses on the intent of
Clement Cody when encumbering the property, whether they are permitted to seek
reformation of the mortgage, and arguing that the mortgage agreement is unenforceable.
In support of its arguments, appellants attached the depositions of Clement Cody’s son
and daughter, a HUD statement, the note, and the appraisal report.
{¶ 28} We cannot find that reasonable minds would differ on the amounts due and
owing on the loan. The only evidence presented to the trial court was the evidence
presented by Nationstar. Nationstar presented evidence of their accounting as well as an
affidavit testifying to the truth of the accounting. By doing so, Nationstar complied with
Civ.R. 56 and demonstrated that there were no genuine issues of material fact
surrounding the amounts. Appellants failed in their response to demonstrate that there
was a genuine issue of material fact in order to demonstrate that the amount was
incorrect. Therefore, appellants’ third assignment of error is found not well-taken.
12. Assignment of Error Four: The Trial Court Erred when it Determined Damages without Holding a Hearing
{¶ 29} Appellants argue that the trial court abused its discretion when it
determined damages without a hearing and such a decision was unreasonable and
unconscionable. Appellants argue that Nationstar never proffered any evidence that it
paid the additional costs it sought to be reimbursed for. Nationstar argues that it was
within the trial court’s discretion to decide whether an evidentiary hearing on damages is
necessary.
{¶ 30} It is within a trial court’s discretion to decide that a damages hearing is
necessary. Lehrer v. McClure, 5th Dist. Stark No. 2013CA00039, 2013-Ohio-4690, ¶ 24,
citing Buckeye Supply Co. v. Northeast Drilling Co., 24 Ohio App.3d 134, 136, 493
N.E.2d 964 (1985).
{¶ 31} Here, we cannot find that the trial court abused its discretion when it
determined damages without a hearing. Appellants were aware and had more than six
years of litigation to respond to claimed damages by Nationstar. Further, appellants
failed to present any evidence contrary to Nationstar’s accounting that would permit the
trial court to come to any other number. Therefore, appellants’ fourth assignment of error
is not well-taken.
13. Assignment of Error Five: The Trial Court Abused its Discretion by Finding that the Equity of Redemption of All Appellants shall be Foreclosed Prior to the Confirmation of Sale
{¶ 32} Appellants argue that the trial court’s order prematurely ended appellants’
right to redemption against R.C. 2329.33. Nationstar states that appellants confused their
equitable right of redemption with the statutory right of redemption and that the trial
court did not abuse its discretion when it provided appellants their statutory right to
redemption.
{¶ 33} R.C. 2329.33 provides that at any time before a sale is confirmed the debtor
may redeem their property by submitting to the clerk the amount of the judgment and
applicable interest.
In Ohio, a mortgagor’s right to redeem is ‘absolute and may be validly
exercised at any time prior to the confirmation of sale.’ This right is dual in
nature, arising both from equity and statute. The mortgagor’s ‘equity of
redemption’ is typically cut off once a mortgagee seeks and is granted a
decree of foreclosure. Generally, a common pleas court grants the
mortgagor a three-day grace period to exercise the ‘equity of redemption,’
which consists of paying the debt, interest and court costs, to prevent the
sale of the property. (Citations omitted.)
Hausman v. Dayton, 73 Ohio St.2d 671, 676, 653 N.E.2d 1190 (1995).
{¶ 34} Here, the trial court provided appellants a three-day period in which to
redeem the property within the meaning of R.C. 2329.33. Therefore, the trial court did
14. not abuse its discretion or incorrectly end appellants’ right to redemption of the property.
Therefore, appellants’ fifth assignment of error is not well-taken.
Conclusion
{¶ 35} We therefore affirm the July 26, 2018 judgment of the Ottawa County
Court of Common Pleas. Appellants are ordered to pay the costs of this 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.
Arlene Singer, J. _______________________________ JUDGE Christine E. Mayle, J. _______________________________ Gene A. Zmuda, P.J. JUDGE CONCUR. _______________________________ JUDGE
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/.
15.