On February 19, the Ohio Supreme Court affirmed in part and reversed in part a lower court ruling in a dispute brought under Ohio’s mortgage-release statute (R.C. 5301.36), holding that the trial court erred in certifying the class because of a legislative amendment prohibiting collection of damages for certain violations via class action.

The case arose after a mortgage tied to a property purchase was paid off at closing, triggering a statutory duty for the lender to record a release within 90 days. According to the opinion, the lender recorded the release 22 days late, citing COVID-19 pandemic-related disruptions to county recorder offices as the cause of the delay. The opinion explained that, in recognition of these disruptions, the Ohio legislature amended the mortgage release statute in 2023 to prohibit the collection of damages via class actions for violations occurring in 2020. The trial court denied the lender’s motion for summary judgment, finding the plaintiff had sufficient statutory standing to bring his claims, and certified the class before the 2023 amendment took effect. Subsequently, the court of appeals upheld the trial court’s decision, but did not analyze or apply the amended statute, despite it then being in effect.

Here, the Ohio Supreme Court first held that the statute, which grants borrowers and property owners the right to recover $250 in statutory damages when lenders fail to timely record mortgage releases, confers statutory standing under Ohio’s constitution, even in the absence of any showing of actual harm. The court then ruled that the 2023 amendment to the statute was remedial and not substantive, and thus could apply retroactively, thereby barring class-wide recovery of statutory damages for violations that occurred in 2020. In light of this holding, the court found that the class certification was improper because the 2023 amendment took effect before damages were assessed or collected and prohibited class-wide recovery for the alleged violations. The court’s judgment sends the case back to the trial court to proceed without class certification, while allowing the plaintiff’s individual claim to continue under the statute’s standing rules.