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OHIO APPEALS COURT REVERSAL “Breach of Contract, Fraud, and Misrepresentation Arising From a Forbearance Agreement” CitiMortgage, Inc. v. Slack

OHIO APPEALS COURT REVERSAL “Breach of Contract, Fraud, and Misrepresentation Arising From a Forbearance Agreement” CitiMortgage, Inc. v. Slack





Civil Appeal from the
Cuyahoga County Court of Common Pleas

Case No. CV-661863

BEFORE: Gallagher, J., Celebrezze, P.J., and Cooney, J.


{¶ 2} Defendant-appellee CitiMortgage, Inc., filed a foreclosure action
on June 10, 2008, alleging appellants were in default on a note and mortgage,
which was secured by appellants’ home. Appellants filed a counterclaim
raising claims for breach of contract, fraud in the inducement, and intentional
or negligent misrepresentation. The counterclaim arose from a forbearance
agreement entered between the parties in May 2007.

{¶ 3} CitiMortgage was ordered to file evidence that it had standing to
file the case in accordance with the ruling in Wells Fargo Bank, N.A. v.
Jordan, Cuyahoga App. No. 91675, 2009-Ohio-1092. In Jordan, this court
held that a party lacks standing to bring a foreclosure action if the party
cannot prove that it owned the note and mortgage on the date the complaint
was filed. Id.

{¶ 4} CitiMortgage opted to voluntarily dismiss its claims without
prejudice pursuant to Civ.R. 41(A). Thereafter, the trial court ordered
appellants to file a notice of intent to proceed on their counterclaim and to
demonstrate their standing to pursue their claims. Appellants eventually
indicated their intent to proceed, asserted standing to pursue their
counterclaim, and stated that their counterclaim was based solely upon facts
and circumstances arising from the parties’ forbearance agreement.


{¶ 12} In this case, appellants’ counterclaim did not arise from the note
or mortgage. Rather, appellants asserted claims of breach of contract, fraud,
and misrepresentation arising from a forbearance agreement they entered
with CitiMortgage in an earlier foreclosure action, CitiMortgage, Inc. v. Slack,
Cuyahoga County Common Pleas Court Case No. CV-606916. The
forbearance agreement was entered in May 2007. The record does not reflect
any basis for concluding the trial court could not adjudicate appellants’
counterclaim independently from the complaint. Upon our review, we find
that the trial court had jurisdiction of the parties and of the controversy and
erred by dismissing the counterclaim.4

{¶ 13} Appellants’ sole assignment of error is sustained.
Judgment reversed; case remanded.

Continue to opinion below…

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