OH Court of Appeals Reverse Summary Judgment on Failed Conditions Precedent: CitiMortgage, Inc. v.

Elia

Author William A. Roper, Jr.

Comment 05/25/11 at 08:10 PM #1

The Ohio Court of Appeals for the Ninth Judicial District reversed a summary judgment based upon CitiMortgage's failure to satisfy conditions precedent in the case CitiMortgage, Inc. v. Elia: CitiMortgage, Inc. v. Elia, No. 25482, 2011 Ohio 2499 (Oh. App. 9th Dist, 2011) http://www.sconet.state.oh.us/rod/docs/pdf/9/2011/2011-ohio-2499.pdf Although the decision turned on CitiMortgage's failure to prove compliance with conditions precedent in respect of Section 22 of the mortgage, the case also has some additional insight on evidentiary issues. First, the Court implicitly NOTED that the plaintiff had not properly authenticated ANY of its documentary evidence, but that the defendant had FAILED TO OBJECT: "In support of its motion for summary judgment, CitiMortgage relied on the affidavit of Aaron Menne, who identified himself as its vice president. Menne averred that he had custody of and familiarity with the records of the payments on the account of Ziad F. Elia. Menne further averred that the September 1, 2008 payment was the last one received on the account and, due to a default thereafter, *CitiMortgage+ *** elected to call the entire balance of said account due and payable, in accordance with the terms of the note and mortgage. The affidavit then noted the amount due and owing on the loan and the applicable interest rate. CitiMortgage did not attach any documents to Mennes affidavit or incorporate any documents by reference through his affidavit. The affidavit was the only item appended to CitiMortgages motion. The copies of the note and mortgage upon which CitiMortgage brought suit were filed with the complaint.

{9} Civ.R. 56(C) limits the types of evidentiary materials that a party may present when seeking or defending against summary judgment. Civ.R. 56(C) (limiting summary judgment evidence to pleadings, depositions, answers to interrogatories, written admissions, affidavits, transcripts of evidence, and written stipulations of fact). The proper procedure for introducing evidentiary matter not specifically authorized by Civ.R. 56(C) is to incorporate it by reference in a properly framed affidavit pursuant to Civ.R. 56(E). Skidmore & Assoc. Co., L.P.A. v. Southerland (1993), 89 Ohio App.3d 177, 179. *P+apers referred to in an affidavit shall be attached to or served with the affidavit. GMAC Mtge., L.L.C. v. Jacobs, 9th Dist. No. 24984, 2011-Ohio-1780, at 17, quoting Civ.R. 56(E). Even so, it is the opposing partys duty to object when a summary judgment motion relies upon improperly introduced materials. Id. *I+f the opposing party fails to object to improperly introduced evidentiary materials, the trial court may, in its sound discretion, consider those materials in ruling on the summary judgment motion. Wolford v. Sanchez, 9th Dist. No. 05CA008674, 2005-Ohio-6992, at 20, quoting Christe v. GMS Mgt. Co., Inc. (1997), 124 Ohio App.3d 84, 90. {10} The Elias did not object to CitiMortgages summary judgment motion on the basis that it referred to improper Civ.R. 56(C) materials, which were not incorporated by reference in Mennes affidavit. Further, they did not object to Mennes affidavit on the basis that it lacked any attachments. See Civ.R. 56(E). . . ." If the defendant had simply OBJECTED to the introduction of the documents without proper authentication, the defendant could have probably avoided summary judgment in the trial court! * The discussion on personal knowledge is also interesting. The bare unsupported assertion that an affiant lacks personal knowledge is usually unavailing UNLESS, as in the Murphy case in Maine the averments seem to undermine the credibility of the affiant. It would usually be better to have deposed the witness OR to have an expert affidavit which could impeach the allegation that the affiant has personal knowledge of the facts. * In the end, the defendant wins this round on the conditions precedent argument. Since the case is being remanded, CitiMortgage might still prevail if it produces the notice of acceleration.

But the case is interesting and instructive. It also has some helpful case citations which should be useful to Ohio defendants.

Bill

05/25/11 at 11:11 PM

#2

Quote: The Elias assertion that CitiMortgages affiant could not have personal knowledge of their default because the alleged default occurred before CitiMortgage was assigned the note and mortgage is inapposite. The authority that the Elias themselves cite in support of that argument provides that *a+ witness providing the foundation [for a recorded business activity] need not have firsthand knowledge of the transaction.

They had an attorney on appeal, I wonder if they had an attorney at the Summary Judgment. This is why it is important to educate yourself in the foreclosure arena even when you have an attorney. There are good attorneys and ones that are not so good. I think this is also apparent when the Plaintiff didn't attach the necessary documents to the affidavit.

My question would be:

1. WHO could authenticate the business records? It appears to me that you would need TWO affidavits.

The SERVICER could do an affidavit of the payments and amount due, but someone from the trust would need to do an affidavit that they are the owner/note holder/have possession of the note and anything else related to the conditions precedent.

2. Can a person acting under a power of attorney authenticate records for another business?

My knee jerk reaction would be NO. Just because I give you a power of attorney to conduct a foreclosure does not impart personal knowledge of my business records/activities.

All of the affidavits I have seen similar to my case are signed as Attorney in Fact by the servicer. What could you legaly have personal knowledge of as an Attorney in Fact?

Anyone have any thoughts?

William A. Roper, Jr.

05/26/11 at 02:04 AM

#3

Quote: Bill said: My question would be: 1. WHO could authenticate the business records? It appears to me that you would need TWO affidavits. The SERVICER could do an affidavit of the payments and amount due, but someone from the trust would need to do an affidavit that they are the owner/note holder/have possession of the note and anything else related to the conditions precedent. 2. Can a person acting under a power of attorney authenticate records for another business? My knee jerk reaction would be NO. Just because I give you a power of attorney to conduct a foreclosure does not impart personal knowledge of my business records/activities. All of the affidavits I have seen similar to my case are signed as Attorney in Fact by the servicer. What could you legaly have personal knowledge of as an

Attorney in Fact? Anyone have any thoughts?

Bill, I think that your analysis is generally sound, but the courts are going to be generally deferential to the sworn averments of an affiant. And the ONLY facts going into the record in a summary judgment setting are going to be those set forth in opposing affidavits, discovery responses or similar evidence actually admissible.

This is WHY having an expert affidavit is critical. It does NOT need to be an expert in "forensic accounting" or securitization. But someone with sufficient familiarity with the structure of the mortgage business can state with some authority that an employee of the servicer is NOT going to be knowledgeable about the business records of the institutional custodian OR the originator. Moreover, a contract perjurer, such as those previously employed is NEVER going to have any real knowledge of the business records!

Neither is an affiant from one servicer going to be a credible witness as to the business records of the prior servicer.

Experienced foreclosure attorneys have begun to catch on to this. But those who have a keen understanding of the industry are inherently better experts and can probably look at the affidavit and its averments, as well as the documents which are purported to be authenticated and can articulate precisely WHY the affiant is LYING.

The worst of the egregious perjury is now probably past. But industry is so accustomed to taking shortcuts and remains is such DENIAL, that it will take some time for business processes to change to reflect honest, ethical and lawful approaches.

angry & NOT TAKING IT!

05/29/11 at 06:13 PM

#4

hey William.. there is some good insight into the details of the fraud factory of

LPS and their role creating records & manipulating the "homeowner" acc info of the servicer ie " manufacturing defaults" .these criminals need a good rope & a high tree ...well a good rope any way cuz they would make a great piata . 5.20.2011 City-of-St-Clair-Shores-Employees-Retirement-System-v-LPS-et-alAmended-Complaint-May-18-2011

William A. Roper, Jr.

05/29/11 at 06:40 PM

#5

Quote: angry & NOT TAKING IT! said: hey William.. there is some good insight into the details of the fraud factory of LPS and their role creating records & manipulating the "homeowner" acc info of the servicer ie " manufacturing defaults" .these criminals need a good rope & a high tree ...well a good rope any way cuz they would make a great piata . 5.20.2011 City-of-St-Clair-Shores-Employees-Retirement-System-v-LPS-et-alAmended-Complaint-May-18-2011

I am already intimately familiar with the details of the criminal enterprise known as LPS and have much evidence of their various frauds from an extensive study of public records. There is much, much more which hasn't yet come into public discussion about LPS and its role.

Ironically, the frauds at DOCX are merely the tip of the iceberg and mostly reflect the carelessness of the Alpharetta, Fulton County, Georgia, operation as the much larger fabrication mill in Dakota County, MN, was shutted in the aftermath of the In Re Wilson discoveries.

Although most of what I know about LPS I learned on my own from independent study of primary records, I first learned about LPS' role from other more senior Forum partipants, particularly Nye LaValle.

Ironically, I found the first assertions I heard about Fidelity National Default Solutions / FIS Foreclosure Solutions (LPS' predescessor) to be far fetched and even fanciful. But when I started studying the underlying data, I found that

Nye and others were mostly correct about the scale of fraud orchestrated and perpetrated by this company.

William A. Roper, Jr.

06/01/11 at 02:32 PM

#6

From the Elias decision is this language: "The Elias rely upon LaSalle Bank, N.A. v. Kelly in support of their argument that CitiMortgage was not entitled to summary judgment. In Kelly, this Court held that the bank at issue made no attempt to establish that it complied with paragraph 22 *of the debtors mortgage,+ which required prior notice of default and acceleration. Kelly at 14. [emphasis added]" "Under these circumstances, we cannot conclude that CitiMortgage met its initial Dresher burden and showed that it complied withparagraph 22 of the mortgage note. Accord Kelly at 14. [emphasis added]"

READ PARAGRAPH 22 OF YOUR MORTGAGE!

William A. Roper, Jr.

06/01/11 at 02:45 PM

# 7

Here is more language from the Kelly case and a link thereto: "Pursuant to paragraph 22 of the mortgage: Lender shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or agreement in this Security Instrument ***. The notice shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument, foreclosure by Judicial proceeding and sale of the Property." LaSalle Bank, N. A. v. Kelly, No. 09CA0067-M, 2010 Ohio 2668; 2010 Ohio App. LEXIS 2211 (Oh. App. 9th Dist. 2010). See: http://scholar.google.com/scholar_case?case=8765462320651885 064

William A. Roper, Jr.

07/03/11 at 11:07 AM

#8

Google Scholar has posted the CitiMortgage, Inc. v. Elia decision: http://scholar.google.com/scholar_case?case=6480164122067767729

This version also contains links to the cited cases. Also see the case Central Mortgage Company v. Elia discussed within thread: Ohio Appellate Court Reverses Another Summary Judgment on Failure To Prove Conditions Precedent: Central Mortgage Company v. Elia http://ssgoldstar.websitetoolbox.com/post?id=5375116

Thomas

07/03/11 at 07:15 PM

#9

Speaking of affidavits and such, has anyone heard of a new practice where the pretender lenders are giving power of attorney to a witness for trial? What kind of implications would that have? It's just something I heard through the grapevine and am looking for any info anyone has. Thanks for all you people do here