The following facts have been extracted from a recent ruling of an Ohio appeals court involving a residential foreclosure action:
- Flagstar Bank files a complaint commencing a foreclosure action against homeowners Moore and Braxton, alleging a default in the loan payments.
- Homeowners file an answer to the complaint, asserting the following affirmative defenses: (1) failure to state a claim; (2) plaintiff was not the real party in interest; and (3) payment.
- In connection with the "payment" defense, Moore averred in court papers to have made his monthly payments to Flagstar Bank and continued to do so through December 2006.
- Moore averred in court papers that after he sent his December 2006 payment to Flagstar Bank, he received a letter dated December 26, 2006, advising that the note had been assigned to Countrywide Mortgage and was no longer serviced by Flagstar Bank; Moore's December payment was returned.
- According to Moore, at no time prior to the December 26 letter was he advised that the note had been assigned and/or that he was to direct payment other than to Flagstar Bank.
- Moore further averred in court papers that after receiving the December 26 letter, he called Flagstar Bank and Countrywide Mortgage and both claimed the note was in default and that no payment on it would be accepted.
- According to Moore, none of the payments made on the note from August 2006 through November 2006 were returned to him. Moore submitted copies of the checks (and postage receipts) sent to Flagstar Bank from June 2006 through November 2006.
- Moore also averred in court papers that he never received notice of being in default on the note.
- Flagstar Bank did not file a reply brief in the trial court addressing any of Moore's contentions.
Despite the bank's failure to reply to any the homeowners' contentions, the magistrate found that no genuine issues of material fact existed and the bank was entitled to judgment as a matter of law. Moore and Braxton filed objections to the magistrate's decision. The trial court overruled the objections and rubber-stamped the bank's motion for summary judgment.
On appeal, Moore and Braxton contended that the trial court erred in granting the bank's summary judgment motion. The bank did not filed a brief on appeal, and, as noted above, did not file a reply brief in the trial court.
The Ohio appeals court reversed the summary judgment granted in favor of the bank. In reaching its decision, the court stated:
- The party moving for summary judgment [ie. the bank] bears the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Dresher v. Burt (1996), 75 Ohio St.3d 280, 292-293, 662 N.E.2d 264. Once the moving party satisfies its burden, the nonmoving party [ie. the homeowner] "may not rest upon the mere allegations or denials of the party's pleadings, but the party's response, by affidavit or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial." Mootispaw v. Eckstein (1996), 76 Ohio St.3d 383, 385, 667 N.E.2d 1197; Civ.R. 56(E). Doubts must be resolved in favor of the nonmoving party. Murphy v. Reynoldsburg (1992), 65 Ohio St.3d 356, 358-59, 604 N.E.2d 138.
Because of the bank's failure to respond to any of the homeowners' claims set forth in his filed affidavit, the Ohio appeals court found that the bank failed to meet its burden of showing that there was no genuine issue of material fact as to who is the real party in interest, the claimed default, and as to whether the bank provided Moore a notice of being in default. Accordingly, summary judgment was deemed inappropriate.(1)
For the court ruling, see Flagstar Bank, FSB v. Moore, 2010-Ohio-375 (February 5, 2010).
(1) Fortunately for Moore, he was in a position to pursue an appeal of the trial court's ruling, an option few homeowners facing foreclosure are in a financial position to avail themselves of. It wouldn't surprise me if the trial judge (and the magistrate) felt, in the back of their minds, that the homeowner was not in a position to appeal their dubious ruling, thereby allowing them to simply "rubber-stamp" the judgment and "keep the foreclosure 'rocket docket' conveyor belt moving forward."
This type of rubber-stamping conduct on the part of some in the judiciary is, I suspect, what New York judge Timothy J. Walker had in mind when, in his recent ruling in Deutsche Bank Natl. Trust Co. v McRae, 2010 NY Slip Op 20020 [Allegany County, January 25, 2010], made this observation expressing his concern for unrepresented homeowners in foreclosure actions:
- For the unrepresented homeowner, the issues of standing and real party in interest status of the foreclosing party are never considered. Without such scrutiny, there is a risk that the courts will give the judicial "seal of approval" to foreclosures against unrepresented homeowners who have little, if any, understanding of these issues, much less the legal significance thereof. To quote my colleague in Kings County, "[a]llowing this case to proceed on behalf of a plaintiff without standing at the commencement of the action would [also] open the door to potential fraud and place in jeopardy the integrity of title to the property to be foreclosed." [Citigroup Global Markets Realty Corp. v. Bowling, 25 Misc 3d 1244; 2009 NY Slip OP 52567U (Kings County, December 18, 2009)].
Even homeowners who have legal representation may be facing impediments in defending themselves as a result of some judges adopting questionable practices when hearing foreclosures. One Central Florida attorney writes in his blog that, overwhelmed by their caseloads, two judges in Pinellas County, Florida have been said to have adopted practices that, in my view, are consistent with use of the "rubber stamp method" of adjudicating foreclosures (see Matt Weidner Blog: An Anarchist’s Strategy To Dismiss Every Foreclosure In Florida):
- Things have gotten so bad for the judges that I’m told at least two Circuit Court Judges in Pinellas County (Linda Allan and Douglas Baird) have announced they were no longer going to hear Motions to Dismiss filed by Defendants in foreclosure cases, but were going to start just denying them across the board without even having a hearing on the matter. Now that’s one way to deal with the crisis. It’s an unconstitutional, unfair and totally biased approach that completely ignores the law and the rights of the citizens these judges took an oath to serve, but it is one way to deal with the crisis. (Look for Appeals To Come If This Practice Really Begins to Take Hold.)