PHH Mortgage Corp. v. Ramsey

Andrew Ramsey (defendant) purchased real property subject to a mortgage held by PHH Mortgage Corporation (PHH) (plaintiff). Ramsey made mortgage payments online through PHH’s website for six years. PHH permitted and, in fact, encouraged its mortgagors to make payments online. Ramsey occasionally received error messages when he attempted to make his payments online. When this occurred, Ramsey would simply try again at a later date, and the payment would process on a subsequent attempt. PHH never rejected a payment Ramsey made this way. In August 2009, Ramsey tried to make his monthly payment online and received the error message he would occasionally see. This time, however, the payment did not process after multiple subsequent attempts. Ramsey called a PHH help line to describe the issue and was told that the payment would be processed. However, the payment was never processed. The September 2009 payment also went unprocessed, despite Ramsey attempting to make the payments both online and in person at a PHH office. Ramsey had also mailed to PHH a check for the late August payment with a letter explaining the situation. This attempted payment was never cashed or returned. PHH filed a complaint foreclosing on the property. PHH argued that although it allowed electronic payments, this payment method was not a mortgagor’s right. The Franklin County Court of Common Pleas held in favor of Ramsey, finding that Ramsey did not default on his mortgage, because PHH had accepted Ramsey’s electronic payments for six years, and thus, had waived any claim that payment could not be made electronically. PHH appealed.