Nationstar Mtge., L.L.C. v. Thompson

2025 Ohio 1088

• Court: Ohio Court of Appeals
• Decided: March 28, 2025
• Docket: 30312
• Status: Published

Opinion

[Cite as Nationstar Mtge., L.L.C. v. Thompson, 2025-Ohio-1088.]

IN THE COURT OF APPEALS OF OHIO SECOND APPELLATE DISTRICT MONTGOMERY COUNTY

NATIONSTAR MORTGAGE LLC : : Appellee : C.A. No. 30312 : v. : Trial Court Case No. 2023 CV 05557 : PETER THOMPSON, ET AL. : (Civil Appeal from Common Pleas : Court) Appellant : :

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OPINION

Rendered on March 28, 2025

PETER THOMPSON, Appellant, Pro Se

JOHN P. MURRAY, Attorney for Appellee

.............

TUCKER, J.

{¶ 1} Peter Thompson appeals pro se from the trial court’s entry of summary

judgment for plaintiff-appellee Nationstar Mortgage, LLC, on its foreclosure complaint and

from the trial court’s overruling of a motion for disqualification based on an ex parte

communication.

{¶ 2} Although Thompson’s appellate brief lacks assignments of error, he primarily -2-

challenges the trial court’s Civ.R. 12(B)(6) dismissal of his counterclaims prior to its entry

of summary judgment for Nationstar. He also contends the trial court erred in overruling

a co-defendant’s motion for disqualification predicated on an alleged ex parte “hearing.”

{¶ 3} We conclude that the trial court did err in dismissing a counterclaim for

breach of contract under Civ.R. 12(B)(6). We see no error, however, in its entry of

summary judgment for Nationstar on the foreclosure complaint. Regarding the trial court’s

overruling of the motion for disqualification, Thompson lacks standing to raise the issue,

and we lack jurisdiction over it.

{¶ 4} The trial court’s dismissal of Thompson’s counterclaims will be reversed with

respect to his breach-of-contract counterclaim. The dismissal will be affirmed as to his

counterclaims for fraudulent misrepresentation, race discrimination, and age

discrimination. The trial court’s entry of summary judgment for Nationstar on its

foreclosure complaint will be affirmed. Finally, the case will be remanded for further

proceedings on the breach-of-contract counterclaim.

I. Background

{¶ 5} In October 2020, Thompson and a co-defendant, Rebecca Kelly, executed a

note to buy a home in Dayton. The note was secured by a mortgage on the property. The

note later was assigned to Nationstar dba “Mr. Cooper.” In October 2023, Nationstar

filed a foreclosure complaint against Thompson and Kelly, alleging that they had defaulted

on their payments under the note. Nationstar sought judgment on the note and

foreclosure of the mortgage.

{¶ 6} In December 2023, Kelly filed a “crossclaim complaint” against Nationstar, -3-

alleging fraudulent and negligent misrepresentations. Thompson also filed his own

separate “crossclaim complaint” against Nationstar, alleging breach of contract,

fraudulent misrepresentation, race discrimination, and age discrimination. Although styled

as crossclaims, the causes of action filed by Kelly and Thompson were counterclaims.

Thereafter, in August 2024, Nationstar moved for summary judgment on its complaint.

Neither Thompson nor Kelly filed any opposition to the motion. In October 2024,

Nationstar separately moved to dismiss Kelly’s and Thompson’s counterclaims under

Civ.R. 12(B)(6). On October 30, 2024, the trial court sustained Nationstar’s two motions

to dismiss the crossclaims. Later that day, the trial court sustained Nationstar’s summary

judgment motion and entered final judgment for Nationstar.

{¶ 7} Following the trial court’s entry of summary judgment, Kelly filed a November

4, 2024 motion to disqualify the trial court judge based on an ex parte communication. In

her motion, Kelly alleged that Thompson had told her about his participation in a

telephone “hearing” conducted by the trial court on October 31, 2024. According to Kelly,

Thompson told her he had participated in the hearing along with the trial court judge and

counsel for Nationstar. Kelly further alleged that Thompson had told her the trial court

judge had ruled on Nationstar’s summary judgment motion during the hearing. Kelly’s

motion alleged that the trial court’s act of conducting a hearing in her absence was a due

process violation and obligated the trial court judge to disqualify himself.

{¶ 8} The trial court overruled Kelly’s motion in a November 5, 2024 order and

entry. Therein, the trial court explained that it had arranged a courtesy call to tell the

parties that it had dismissed the counterclaims and had entered summary judgment for -4-

Nationstar. The trial court also told the parties that it would be vacating the upcoming trial

date. Although it apologized for not including Kelly on the call, it had presumed that

Thompson would inform her of its rulings, which he apparently did. On November 21,

2024, Thompson alone appealed from the final judgment and decree of foreclosure and

from the order and entry overruling Kelly’s disqualification motion.

{¶ 9} Although Thompson’s notice of appeal did not reference the trial court’s order

dismissing his counterclaims, that order was interlocutory until the trial court entered final

judgment for Nationstar on its foreclosure complaint. The order dismissing Thompson’s

counterclaims then merged into the final judgment entry. Therefore, Thompson was not

required to reference the order dismissing his counterclaims in his notice of appeal. 533

Short North LLC v. Zwerin, 2015-Ohio-4040, ¶ 52 (10th Dist.) (recognizing that App.R.

3(D) “does not require an appellant to separately identify each interlocutory order issued

prior to a final judgment”). An appeal from a final judgment incorporates all interlocutory

orders merged into it. USA Freight, LLC v. CBS Outdoor Group, Inc., 2015-Ohio-1474,

¶ 15 (2d Dist.).

II. Analysis

{¶ 10} Thompson’s pro se appellate brief divides his substantive argument into two

sections. The first addresses a “dispute of calculations.” It appears to challenge only the

trial court’s dismissal of his breach-of-contract counterclaim. The second substantive

section of his brief addresses “due process.” It challenges the trial court’s overruling of

Kelly’s motion for disqualification.

{¶ 11} Regarding the breach-of-contract counterclaim, we note that the trial court -5-

purported to dismiss all of Thompson’s counterclaims without prejudice under Civ.R.

12(B)(6). Theoretically, then, Thompson could have refiled the counterclaims. For this

reason, a dismissal without prejudice normally is not appealable. Bland v. Toyota Motor

Sales USA, Inc., 2018-Ohio-1728, ¶ 7 (2d Dist.); Martin v. Ohio Univ., 2023-Ohio-2511,

¶ 20 (4th Dist.). That rule does not apply, however, where a party cannot plead a cause

of action any other way. Bland at ¶ 7.

{¶ 12} Here Thompson cannot plead his breach-of-contract counterclaim another

way. Indeed, he cannot replead it at all. His breach-of-contract counterclaim undoubtedly

was compulsory under Civ.R. 13(A). The counterclaim and Nationstar’s foreclosure

complaint both arose out of the same loan and mortgage transactions. As a result, the

counterclaim had to be brought in Nationstar’s foreclosure action. However, the trial court

entered final judgment for Nationstar on its foreclosure complaint on the same day that it

dismissed Thompson’s counterclaims. By doing so, the trial court deprived Thompson of

any opportunity to refile his counterclaims in the main action. Under these circumstances,

we will treat the Civ.R. 12(B)(6) dismissal as a dismissal with prejudice and will address

Thompson’s argument.

{¶ 13} The essence of Thompson’s appellate argument is that Nationstar

improperly increased his monthly payment after acquiring the note and mortgage. He

perhaps expresses his argument most clearly on pages three and four of his brief,

asserting: “The appellant has proclaimed a breach of contract, as the appellant has

entered evidence that a valid contract existed, by appellee increasing the payments

without cause Rushmore and Nationstar Mortgage LLC failed to perform under their -6-

obligations and has caused damage by having a negative verdict based on improper or

misleading information.” On appeal, Thompson attributes the increased payment to an

improper increase in his monthly escrow obligation without proper notice.

{¶ 14} In response, Nationstar asserts that we should disregard Thompson’s

arguments or dismiss his appeal for failure to follow App.R. 16. Nationstar notes the

absence of assignments of error, issues for review, or a statement of the case or facts.

Nationstar also points out the lack of citations to the record to support Thompson’s

arguments. On the merits, Nationstar maintains that Thompson waived any argument

about escrow-account computations by not raising it below. Nationstar additionally

contends the trial court properly dismissed Thompson’s counterclaims under Civ.R.

12(B)(6) and correctly entered summary judgment on its foreclosure complaint.

{¶ 15} Upon review, we decline to disregard Thompson’s arguments or to dismiss

his appeal based on non-compliance with App.R. 16. This court sometimes overlooks

non-compliance with the appellate rule where the record is clear enough for us to

ascertain the argument raised. That is the case here. Despite his failure to present an

assignment of error or to satisfy other aspects of App.R. 16, Thompson plainly believes

he stated a viable breach-of-contract counterclaim against Nationstar. Therefore, the

essence of his argument is that the trial court erred in dismissing the counterclaim under

Civ.R. 12(B)(6). Resolution of that issue requires little or no analysis of Thompson’s

deficient brief. To determine whether the trial court erred in dismissing the breach-of-

contract counterclaim, we simply may examine the counterclaim itself and apply

applicable legal standards. -7-

{¶ 16} A Civ.R. 12(B)(6) motion tests the legal sufficiency of a complaint or, here,

a counterclaim. For Nationstar to prevail, it must appear beyond doubt from the

counterclaim that Thompson can prove no set of facts entitling him to recovery. O’Brien

v. Univ. Community Tenants Union, Inc., 42 Ohio St.2d 242 (1975), syllabus. We must

construe the counterclaim in the light most favorable to Thompson, presume all factual

allegations are true, and make all reasonable inferences in his favor. Mitchell v. Lawson

Milk Co., 40 Ohio St.3d 190, 192 (1988). Our review of the trial court’s decision is de

novo. Sheldon v. Kettering Health Network, 2015-Ohio-3268, ¶ 5 (2d Dist.).

{¶ 17} Regarding the pleading requirements, “[a] pleading that sets forth a claim

for relief . . . shall contain (1) a short and plain statement of the claim showing that the

party is entitled to relief, and (2) a demand for judgment for the relief to which the party

claims to be entitled.” Civ.R. 8(A). “Under this form of ‘notice pleading,’ less emphasis is

placed on the form of the language in the [counterclaim] when the operative grounds

underlying the claim are set forth so as to give adequate notice of the nature of the action.”

Am. Sales, Inc. v. Boffo, 71 Ohio App.3d 168, 175 (2d Dist. 1991).

{¶ 18} A claimant “is only required to plead sufficient, operative facts to support

recovery under [his] claims.” Moncrief v. Bohn, 2014-Ohio-837, ¶ 22 (8th Dist.). “However,

to constitute fair notice to the opposing party, the [counterclaim] must still allege sufficient

underlying facts that relate to and support the alleged claim, and may not simply state

legal conclusions.” Id. To state a breach-of-contract counterclaim, a defendant must

allege: (1) the existence of a contract; (2) performance by the defendant; (3) breach by

the plaintiff; and (4) damage or loss to the defendant. Id. at ¶ 23. -8-

{¶ 19} Here Thompson’s December 1, 2023 “crossclaim complaint” asserted

several counterclaims against Nationstar. Having reviewed the trial court’s dismissal

ruling, we agree that he inadequately pled fraudulent misrepresentation, race

discrimination, and age discrimination. The counterclaim complaint did not allege facts

showing fraud, and it barely mentioned discrimination. On appeal, Thompson seems to

focus on his counterclaim for breach of contract, and we will do likewise.

{¶ 20} Although his pleading co-mingled multiple legal theories, his primary factual

allegation was that Nationstar improperly and without explanation or notice had increased

his monthly mortgage payment. His pleading alleged that the “agreed amount” of the

payment was $609.91. See Thompson’s Crossclaim Complaint at p. 2. Thompson then

alleged that Nationstar had made “demands for an increased value of a mortgage

payment schedule with the hopes that the defendant would pay the increase[.]” Id. at p.

3. The next paragraph of his pleading alleged that Nationstar’s breach of contract

occurred prior to his own non-payment of the mortgage and without any “disclosure,

approval, [or] agreement” to the increased payment. Id. According to Thompson,

Nationstar improperly began charging him $722.33 per month after obtaining his note and

mortgage. Id. at p. 2. In the context of a breach of contract counterclaim, Thompson

alleged: “The plaintiff used a contract agreed on and increased the value without notice,

with the expectation of [Thompson] paying the increase without question. The plaintiff

further claimed the non-payment as a breach of contract by the defendant for non-

payment.” Id. at p. 5. In the context of his other causes of action, Thompson then

reiterated his central allegation that Nationstar unlawfully had “increase[ed] the loan -9-

amount without disclosure.” Id. at p. 6. Near the end of his pleading, he again claimed

that Nationstar had changed his mortgage payment with no disclosure “as to why the

increase was imposed[.]” Id. at p. 11. Thompson claimed damages in alternative amounts

of $37,773.12, $113,319.36, $198,319.36, $4,000,000, or $12,198,319.36. Id. at p. 10-

11.

{¶ 21} Viewing Thompson’s pleading in the light most favorable to him, accepting

his factual allegations as true, and drawing all reasonable inferences for him, we believe

he adequately stated a counterclaim for breach of contract based on Nationstar’s

improperly increasing his monthly mortgage payment and doing so without explanation

or notice. He alleged that a contract existed requiring him to pay Nationstar $609.91 per

month. He also alleged that he had performed under the contract by making those

payments until Nationstar breached the contract by improperly increasing the payment

amount to $722.33 and doing so without explanation or notice. Finally, he alleged that he

had been harmed by Nationstar's breach, apparently by being retired, disabled, and

unable or unwilling to pay the unjustified increase without notice or explanation, which

resulted in Nationstar’s foreclosing against him.

{¶ 22} In sustaining Nationstar’s motion to dismiss under Civ.R. 12(B)(6), the trial

court itself perceived that Thompson’s and Kelly’s separate counterclaims “appeared to

center around their assertion that no disclosure relating to the increase in mortgage

payments was ever provided to them and that the change in payment amount was made

without an ‘authorized’ change in the agreement.” See October 30, 2024 Decision, Order,

and Entry at p. 7. After reviewing the note and mortgage documents attached to -10-

Nationstar’s complaint, however, the trial court observed that the note and mortgage

“contain[ed] provisions for payment default and grounds for acceleration of debt or the

amount due.” Id. The trial court then concluded: “The Court finds Defendants’ arguments

that Plaintiff changed the payment amount without an authorized change in the

agreement and added an inflated rate that exceeded 10% of the original loan without

disclosure unavailing as Defendants have provided no evidence or documents to support

their claims and allegations.” Id.

{¶ 23} Upon review, we find the trial court’s analysis to be flawed. Thompson’s

argument was not that Nationstar had wrongly accelerated his debt upon default. Rather,

he argued that Nationstar had breached the parties’ contract by increasing his monthly

payment without justification, explanation, or notice prior to his default. As for the trial

court’s assertion that Thompson had not provided any evidence or documents to support

a breach-of-contract counterclaim, evidence was not required at the pleading stage.

Thompson needed only to state a claim, not to prove one.

{¶ 24} Regardless, the record does reflect at least one factual basis for

Thompson’s breach-of-contract counterclaim. The final page of his December 1, 2023

“counterclaim complaint” was an index referencing Exhibits A-1 through A-8. Although

Thompson neglected to attach those exhibits to his pleading, he did attach them to a

motion to dismiss Nationstar’s foreclosure complaint that he filed the same day. Those

exhibits conclusively showed that the increase in Thompson’s mortgage payment from

$609.91 to $722.33 was attributable to a $112.42 increase in his monthly escrow payment

for property taxes and homeowner’s insurance. -11-

{¶ 25} Notably, the copy of the mortgage agreement accompanying Nationstar’s

foreclosure complaint contained terms governing Nationstar’s collection of escrow funds.

It provided in part:

Lender may, at any time, collect and hold Funds in an amount (a)

sufficient to permit Lender to apply the Funds at the time specified under

RESPA, and (b) not to exceed the maximum amount a lender can require

under RESPA.

. . . If there is a shortage of Funds held in escrow, as defined under

RESPA, Lender shall notify Borrower as required by RESPA, and Borrower

shall pay to Lender the amount necessary to make up the shortage in

accordance with RESPA, but in no more than 12 monthly payments. If there

is a deficiency of Funds held in escrow, as defined under RESPA, Lender

shall notify Borrower as required by RESPA, and Borrower shall pay to

Lender the amount necessary to make up the deficiency in accordance with

RESPA, but in no more than 12 monthly payments.

October 16, 2023 Complaint for Foreclosure at Exh. B. p. 4.

{¶ 26} “RESPA” refers to the federal Real Estate Settlement Procedures Act,

which includes language addressing escrow shortages or deficiencies and a lender’s

provision of notice to a borrower about them. Where RESPA’s requirements are

incorporated into a contract between a borrower and a lender, a lender’s failure to follow

those requirements will support a breach-of-contract action. Muller v. ALG Trustee, LLC,

2024 WL 3939103, at *7 (W.D. Va. Aug. 26, 2024) (holding that the plaintiff sufficiently -12-

pled a breach-of-contract claim against her lender for failing to follow RESPA regulations

regarding notice of escrow shortages); see also McGinnis v. Am. Home Mtge. Servicing,

Inc., 817 F.3d 1241, 1256 (11th Cir. 2016) (upholding a substantial judgment for a

borrower where a new loan-service provider foreclosed after increasing the borrower’s

monthly escrow payment in an incorrect amount and without required notice in violation

of RESPA).

{¶ 27} We express no opinion, of course, as to whether Nationstar breached a

contract with Thompson by increasing his monthly escrow payment in an improper

amount and/or without required notice. For present purposes, we hold only that

Thompson adequately stated a breach-of-contract counterclaim based on his allegations

that Nationstar improperly and without notice increased his monthly mortgage payment

from $609.91 to $722.33.

{¶ 28} In reaching our conclusion, we reject Nationstar’s assertion that Thompson

has waived for appeal any argument related to escrow-account computations. Nationstar

maintains that he never raised the escrow account as an issue below. Nationstar also

contends that “Thompson points to no basis for why any escrow account computation

should be required, nor any evidence as to whether or not one occurred.”

{¶ 29} As noted above, however, Thompson’s breach-of-contract counterclaim

alleged that Nationstar improperly increased the amount of his monthly mortgage

payment without explanation or notice. The exhibits referenced on the last page of his

counterclaim complaint and made part of the record showed that his increased mortgage

payment was attributable to an increased escrow obligation. Moreover, the parties’ -13-

contracts, which were attached to Nationstar’s own foreclosure complaint, included

language requiring Nationstar to follow RESPA regulations on escrow changes and notice

to the borrower. Thompson’s counterclaim complaint also cited various federal

regulations promulgated under RESPA. Under these circumstances, it is reasonable to

infer that Thompson’s breach-of-contract counterclaim related to allegedly inaccurate

escrow-account computations and Nationstar’s failure to provide mandated notice about

them.

{¶ 30} Finally, we must consider the effect of our analysis on the trial court’s entry

of summary judgment for Nationstar on its foreclosure complaint. Notably, RESPA

violations affect neither the validity nor enforceability of a loan or mortgage. Uhler v.

Ocwen Loan Servicing LLC, 2011 WL 13202500, *2 (S.D. Ohio Sept. 30, 2011)

(“Essentially, plaintiffs assert a breach of contract claim based on various mortgage

servicing errors that would amount to statutory violations of RESPA[.] . . . RESPA at 12

U.S.C. § 2615, specifically provides in relevant part that ‘[n]othing in this chapter shall

affect the validity or enforceability of any . . . mortgage . . . made or arising in connection

with a federally related mortgage loan.’ In other words, the failure of a servicer to comply

with the requirements of RESPA does not render the mortgage and the promises

contained within it unenforceable.”); Bank of Am., N.A. v. Derisme, 2014 WL 4413438,

*11 (Conn. Super. Ct. July 22, 2014) (recognizing that RESPA violations “are not a

defense to a foreclosure action as a matter of law” but that they are actionable and “may

be brought as a counterclaim in a foreclosure action”).

{¶ 31} In the present case, we see no basis for reversing the trial court’s entry of -14-

summary judgment for Nationstar on its foreclosure complaint. After reviewing

Nationstar’s unopposed motion, the trial court found that it had met all requirements for

foreclosure, including showing that it was the owner of the note and mortgage and that

the loan was in default. See JP Morgan Chase Bank, N.A. v. Johnson, 2015-Ohio-1939,

¶ 10 (2d Dist.) (“An affidavit stating that the plaintiff is the owner of the note and mortgage

and that the loan is in default generally is sufficient to permit a trial court to enter summary

judgment and order foreclosure, unless there is evidence that controverts the

averments.”).

{¶ 32} On appeal, Thompson does not address the trial court’s summary judgment

ruling. Even assuming, arguendo, that Nationstar committed a breach of contract by

incorrectly and without notice increasing his mortgage payment, he has not identified any

grounds for reversing the trial court’s entry of summary judgment for Nationstar on its

foreclosure complaint. Accordingly, the trial court’s entry of summary judgment for

Nationstar will be affirmed.

{¶ 33} We turn now to the second substantive section of Thompson’s appellate

brief. It addresses due process and challenges the trial court’s overruling of Kelly’s motion

for disqualification. The motion alleged a due-process violation based on the trial court’s

holding of a “hearing” with Thompson and counsel for Nationstar in her absence. In

overruling the motion, the trial court explained that it merely had advised Thompson and

Nationstar’s counsel of its summary judgment decision and its dismissal of the

counterclaims.

{¶ 34} We see no due-process violation arising from the trial court’s courtesy call. -15-

In any event, Thompson, who was a party to the call, lacks standing to assert a violation

of Kelly’s due-process rights. Additionally, this court lacks jurisdiction over disqualification

or recusal matters involving common pleas court judges. “Pursuant to R.C. 2701.03, the

Chief Justice of the Supreme Court of Ohio has exclusive jurisdiction to determine a claim

that a common pleas judge is biased or prejudiced.” In re Miller, 1999 WL 960975, *1 (2d

Dist. July 16, 1999). For these reasons, we reject Thompson’s due-process argument.

III. Conclusion

{¶ 35} The trial court’s Civ.R. 12(B)(6) dismissal of Thompson’s counterclaims is

affirmed in part and reversed in part. The dismissal is affirmed with respect to his

counterclaims alleging fraudulent misrepresentation, age discrimination, and race

discrimination. The dismissal is reversed as to his counterclaim alleging a breach of

contract.

{¶ 36} The trial court’s entry of summary judgment for Nationstar on its foreclosure

complaint is affirmed. Regarding Kelly’s motion for disqualification, Thompson lacks

standing to raise the issue on appeal, and we lack jurisdiction over it.

{¶ 37} The case is remanded for further proceedings on the breach-of-contract

counterclaim.

EPLEY, P.J. and HUFFMAN, J., concur.