KEY POINTS | OHIO COURT OF APPEALS ACKNOWLEDGES PRECEDENT & REVERSES FORECLOSURE JUDGMENT FOR FOR FAILURE OF CONDITIONS PRECEDENT

1. Ohio’s First District appellate court reversed a summary judgment of foreclosure finding the bank failed to comply with conditions precedent because the bank relied on a demand letter sent by its predecessor-in-interest instead of sending out its own demand letter. S. Bank National Association, As Tr. For RMAC Tr., Series 2016-Ctt V. Kenneth E. Tye, 2024-Ohio-2922.

2. In reversing summary judgment, the Court relied on two Second District cases (Young and Clarke) which the Court found to be binding precedent. In both those cases the Second District concluded that a new notice of default must be sent after the dismissal of an unsuccessful foreclosure regardless of whether the same mortgagee files another foreclosure or its successor-in-interest initiates the subsequent foreclosure.

3. Unfortunately, this ruling exposes US Bank to prevailing party attorneys’ fees since US Bank cannot satisfy conditions precedent retroactively. US Bank will be required to dismiss its case and redemand before it can foreclose its loan. Although a harsh result, the holding in Tye sets a clear precedent lenders can easily comply with.

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