Bank of Am. v. Smith , 2014 Ohio 2845 ( 2014 )


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  • [Cite as Bank of Am. v. Smith, 
    2014-Ohio-2845
    .]
    IN THE COURT OF APPEALS
    FIRST APPELLATE DISTRICT OF OHIO
    HAMILTON COUNTY, OHIO
    BANK OF AMERICA, N.A.,                            :   APPEAL NO. C-130306
    SUCCESSOR BY MERGER TO BAC                            TRIAL NO. A-1200156
    HOME LOANS SERVICING LP, f.k.a.                   :
    COUNTRYWIDE HOME LOANS                                   O P I N I O N.
    SERVICING, LP,                                    :
    Plaintiff-Appellee,                       :
    vs.                                             :
    SANDRA K. SMITH,                                  :
    Defendant-Appellant,                         :
    and                                            :
    JOHN DOE, SPOUSE OF SANDRA K.                     :
    SMITH, IF MARRIED (NAME
    UNKNOWN),                                         :
    MIDLAND FUNDING LLC,                              :
    CREDIT ACCEPTANCE                                 :
    CORPORATION,
    :
    CITY OF CINCINNATI,
    :
    THE STATE OF OHIO DEPARTMENT
    OF TAXATION,                                      :
    THE UNITED STATES OF AMERICA,                     :
    and                                            :
    HAMILTON COUNTY TREASURER,                        :
    Defendants.                                  :
    Civil Appeal From: Hamilton County Court of Common Pleas
    Judgment Appealed From Is: Reversed and Cause Remanded
    O HIO F IRST D ISTRICT C OURT OF A PPEALS
    Date of Judgment Entry on Appeal: June 30, 2014
    Lerner, Sampson, & Rothfuss and Bill L. Purtell, for Plaintiff-Appellee,
    Dann, Doberdruk & Harshman, Marc E. Dann, Grace M. Doberdruk and Daniel M.
    Solar, for Defendant-Appellant.
    Please note: this case has been removed from the accelerated calendar.
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    O HIO F IRST D ISTRICT C OURT OF A PPEALS
    D INKELACKER , Presiding Judge.
    {¶1}    In two assignments of error, defendant-appellant Sandra K. Smith
    argues that the trial court improperly granted the motion for summary judgment of
    plaintiff-appellee Bank of America, NA, in this foreclosure case. We agree.
    Filing of Foreclosure Action
    Leads To Summary Judgment
    {¶2}    Bank of America filed a complaint alleging that it was the holder of a
    note and mortgage on property owned by Smith, and that Smith had failed to make
    her mortgage payments. In the first paragraph of the complaint, Bank of America
    identified the note as “attached exhibit A.” In paragraph two of the second count,
    Bank of America identified the mortgage as “attached exhibit B.” The documents
    were not authenticated by affidavit. In paragraph one of her pro se answer, Smith
    stated that she “lacks sufficient information and/or knowledge to either admit or
    deny that Plaintiff is the holder of a certain promissory note.” In paragraph four, she
    stated that she “lacks sufficient information and/or knowledge to either admit or
    deny that Plaintiff is the holder of a Mortgage Deed as alleged in paragraph 2 of
    Plaintiff’s Complaint, count 2.”
    {¶3}    One month after filing her answer, Smith, now represented by
    counsel, filed a motion to dismiss the complaint on the basis that the copy of the note
    attached to the complaint was defective. She claimed that the copy attached to the
    complaint was different from the copy filed in a previously-dismissed foreclosure
    action. “The differences in the endorsements indicate that Plaintiff Bank of America
    does not own Defendant Sandra Smith’s note.” In its response to Smith’s argument,
    Bank of America only argued that “the failure to provide the requisite documents
    with the filing of Plaintiff’s complaint is not grounds for dismissal,” and that the
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    O HIO F IRST D ISTRICT C OURT OF A PPEALS
    proper recourse was to serve a motion for a more definite statement pursuant to
    Civ.R. 12(E). Smith did not file a motion for a more definite statement. The trial
    court never ruled on Smith’s motion to dismiss the complaint before granting
    summary judgment in favor of Bank of America.
    {¶4}    When Bank of America filed its motion for summary judgment, it
    concurrently filed an affidavit from an assistant vice president. In the affidavit, the
    affiant stated that she had “reviewed the attached records,” and that Bank of America
    was in possession of the note. But the only record attached to the affidavit was some
    account information showing the amount due to Bank of America. This information
    did not list the complete account history—beginning with a zero balance, listing all
    the payments and charges, and ending with the amount owed. At no point, did the
    affiant identify either the note or mortgage attached to the complaint. Based on the
    motion and affidavit, the magistrate recommended that the trial court grant Bank of
    America’s motion for summary judgment.
    {¶5}    In her objections to the magistrate’s decision granting summary
    judgment, Smith raised the issue of the failure of Bank of America to properly
    authenticate the documents pursuant to Civ.R. 56(E). She argued that “[a]t no point
    in the Motion or Reply does Plaintiff establish through proper evidence under Civ.R.
    56(E) that the alleged Note, attached to the Complaint as Exhibit A, is a true and
    accurate copy of the original blue-ink signed Note in this matter.” In response to this
    argument, Bank of America simply asserted that the documents were attached to the
    complaint and referenced therein, thus “the note and mortgage were identified into
    the record.”   The trial court overruled Smith’s objections, and granted Bank of
    America’s motion for summary judgment.
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    O HIO F IRST D ISTRICT C OURT OF A PPEALS
    Bank Failed To Support Summary Judgment
    Motion With Properly Authenticated Documents
    {¶6}    In her first assignment of error, Smith argues that Bank of America
    failed to meet its burden under Civ.R. 56 by failing to properly submit evidence
    establishing that there was no genuine issue of material fact for trial. We agree.
    {¶7}    In order to establish that it was entitled to summary judgment, Bank
    of America had to establish (1) that there was no genuine issue as to any material
    fact; (2) that it was entitled to judgment as a matter of law; and (3) that reasonable
    minds could come to but one conclusion, and that that conclusion is adverse to
    Smith, who was entitled to have the evidence construed most strongly in her favor.
    See Bostic v. Connor, 
    37 Ohio St.3d 144
    , 
    524 N.E.2d 881
     (1988). Once a motion for
    summary judgment has been made and supported as provided in Civ.R. 56(C), the
    nonmoving party has a reciprocal burden to set forth specific evidentiary facts
    showing the existence of a genuine issue for trial, and cannot rest on the allegations
    or denials in the pleadings. Wing v. Anchor Media, Ltd. Of Texas, 
    59 Ohio St.3d 108
    , 111, 
    570 N.E.2d 1095
     (1991). But, if the moving party does not meet its initial
    burden, then no duty arises on the part of the responding party to produce evidence
    in opposition to the motion, and the motion must be denied. Stinespring v. Natorp
    Garden Stores, 
    127 Ohio App.3d 213
    , 216, 
    711 N.E.2d 1104
     (1st Dist.1998), citing
    Vahila v. Hall, 
    77 Ohio St.3d 421
    , 430, 
    674 N.E.2d 1164
     (1997).
    {¶8}    In a residential foreclosure action, the court is faced with two distinct,
    but related issues. Metro. Life Ins. v. Triskett Illinois, Inc., 
    97 Ohio App.3d 228
    , 234,
    
    646 N.E.2d 528
     (1st Dist.1994). The first issue presents the legal question of whether
    the mortgagor has defaulted on the note. 
    Id.
     The second issue entails an inquiry
    into whether the mortgagor's equity of redemption should be foreclosed. 
    Id.
     We will
    address each issue in turn.
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    O HIO F IRST D ISTRICT C OURT OF A PPEALS
    The Note
    {¶9}    In the first count of its complaint, Bank of America claimed that it was
    the “holder of a certain promissory note,” that Smith had breached the terms of the
    promissory note by failing to make payments, that Bank of America was entitled by
    the terms of the note to accelerate the indebtedness due, and that it was entitled to
    payment of the full amount owed, which it stated was $608,585.98, along with
    assorted other charges and fees. Bank of America also alleged that it had “satisfied
    all conditions precedent pursuant to the promissory note.”
    {¶10}   A promissory note is simply an instrument that evidences an
    agreement to pay a monetary obligation. R.C. 1309.102(A)(65). When a party fails
    to make payments on the note, that party has breached the terms of that agreement.
    In this way, an action to enforce a promissory note is akin to an action for breach of
    contract. See Chattree v. Chattree, 8th Dist. Cuyahoga No. 95051, 
    2011-Ohio-1925
    .
    “It is axiomatic that a promissory note, even though its execution may be a condition
    of another contract, constitutes a separate enforceable contract.” Fisk Alloy Wire,
    Inc. v. Hemsath, 6th Dist. Lucas No. L-05-1097, 
    2005-Ohio-7007
    , ¶ 40, citing Metro.
    Life Ins., 
    97 Ohio App.3d 228
    , 
    646 N.E.2d 528
    .
    {¶11}   To succeed on a breach of contract claim, a plaintiff must
    demonstrate the existence of a contract, performance by the plaintiff, a breach by the
    defendant, and resulting damages. Huttenbauer Land Co., LLC v. Harley Riley,
    Ltd., 1st Dist. Hamilton No. C-110842, 
    2012-Ohio-4585
    , ¶ 8, citing Brunsman v. W.
    Hills Country Club, 
    151 Ohio App.3d 718
    , 
    2003-Ohio-891
    , 
    785 N.E.2d 794
    , ¶ 11 (1st
    Dist.). Where, as here, a party seeks to enforce its rights under the terms of a written
    agreement, the party must produce the writing itself—or some acceptable
    explanation as to why that document cannot be produced. This court has held that
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    O HIO F IRST D ISTRICT C OURT OF A PPEALS
    [w]here proof is to be made of some fact which is recorded in a writing,
    the best evidence of the contents of the writing consists in the actual
    production of the document itself. And the general rule is that
    secondary evidence of the contents of a written instrument cannot be
    admitted until the nonproduction of the original has been satisfactorily
    accounted for.
    Smith v. Andres, 1st Dist. Hamilton No. C-77297, 
    1978 Ohio App. LEXIS 8118
     (June
    28, 1978).
    {¶12}   Throughout the proceedings below, Bank of America had claimed that
    the promissory note was properly incorporated into the record. For the first time on
    appeal, it argues that the note was properly authenticated because it was self-
    authenticating as a negotiable instrument pursuant to Evid.R. 902(9). But Bank of
    America has cited no case law in support of its proposition that a photocopy of a
    promissory note is self-authenticating when no evidence has been presented that it is
    a true and accurate copy.
    {¶13}   Evid.R. 902(9) expressly adopts the tenets of general commercial law
    in applying the doctrine of self-authentication to commercial paper, signatures
    thereon, and documents relating thereto. There are four provisions that relate to
    self-authentication in the commercial code, R.C. 1301.307, 1303.36, 1308.04, and
    1303.65. See Weissenberger, Ohio Evidence, Section 902.97 (2013). But only R.C.
    1301.307 addresses the authentication of entire documents, and that statute is
    limited to certain document types, of which a photocopied promissory note is not
    one. Two of the remaining statutes address only the authentication of signatures on
    certain documents. See R.C. 1303.36 and 1308.04. And the fourth statute addresses
    only the issue of evidence of dishonor and notice of dishonor. R.C. 1303.65. None of
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    O HIO F IRST D ISTRICT C OURT OF A PPEALS
    these statutes, and therefore Evid.R. 902(9), stands for the proposition that a
    photocopy of a promissory note is self-authenticating.
    {¶14}   A review of the case law in Ohio indicates that, in order for a trial
    court to consider the content of a promissory note in a foreclosure action, that note
    must be properly authenticated and admitted into the record. The Sixth Appellate
    District held that an affidavit that failed to properly authenticate a promissory note
    in a foreclosure case precluded its consideration and prevented summary judgment
    in favor of the bank. HSBC Mortg. Servs., Inc. v. Edmon, 6th Dist. Erie No. E-11-
    046, 
    2012-Ohio-4990
    , ¶ 23; see also BAC Home Loans Servicing v. Moore, 5th Dist.
    Licking No. 12 CA 50, 
    2012-Ohio-6284
    , ¶ 27; Wachovia Bank of Delaware v.
    Jackson, 5th Dist. Stark No. 2010-CA-00291, 
    2011-Ohio-3203
    , ¶ 39, 53-57.
    {¶15}   In its complaint, Bank of America’s only claim that Smith owed it
    money arises from its allegation that Smith breached the terms of the promissory
    note. And Bank of America failed to properly introduce the note into the record to
    support its motion for summary judgment.          Therefore, summary judgment was
    improper as to that claim.
    The Mortgage
    {¶16}   Similarly, Bank of America failed to produce an authenticated copy of
    the mortgage in support of its motion for summary judgment. As with the note,
    Bank of America argues for the first time on appeal that the mortgage was self-
    authenticating.   In this instance, the bank claims that the mortgage was self-
    authenticating as a public record. We disagree.
    {¶17}   Evid.R. 1005 provides that “the contents of an official record * * * may
    be proved by copy, certified as correct in accordance with Rule 902, Civ.R. 44,
    Crim.R. 27 or testified to be correct by a witness who has compared it with the
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    O HIO F IRST D ISTRICT C OURT OF A PPEALS
    original.” For domestic public records, the certification will be sufficient if it bears
    an official seal and a signature purporting to be an attestation or execution. State v.
    Dominguez, 1st Dist. Hamilton No. C-980148, 
    1999 Ohio App. LEXIS 184
     (Jan. 29,
    1999). The certification “may be made by any public officer having a seal of office
    and having official duties in the political subdivision in which the record is kept,
    authenticated by the seal of his office.” 
    Id.
    {¶18}   In this case, there is nothing from the Hamilton County Recorder’s
    office certifying that the photocopy was an accurate reproduction of the original.
    Therefore, it does not qualify for self-authentication pursuant to Evid.R. 902.
    Without an affidavit attesting to its authenticity, it was not properly before the trial
    court. Therefore the trial court erred when it considered the mortgage as evidence
    when it granted Bank of America’s motion for summary judgment.
    {¶19}   Smith’s first assignment of error is sustained.
    Reformation of the Mortgage Not Established
    {¶20}   In its second assignment of error, Smith argues that the trial court
    erred by granting a judgment of foreclosure because Bank of America was not
    entitled to reformation of the mortgage when its predecessor was inexcusably
    negligent in its preparation. Bank of America argues that there was no negligence,
    but rather a simple scrivener’s error in the description of the property in the
    mortgage.    But, because the mortgage was not properly in the record, Bank of
    America failed to meet its initial burden to demonstrate that it was entitled to
    summary judgment. Solely for this reason, we sustain Smith’s second assignment of
    error.
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    O HIO F IRST D ISTRICT C OURT OF A PPEALS
    Conclusion
    {¶21}   Without presenting sufficient admissible evidence to support the
    claims set forth in its foreclosure complaint, Bank of America failed to meet its initial
    burden to demonstrate that it was entitled to summary judgment. Had Bank of
    America simply produced properly authenticated copies of the promissory note and
    mortgage, the outcome of this case may have been different. But we must reverse the
    decision of the trial court granting summary judgment in favor of Bank of America,
    and remand this cause for further proceedings consistent with law and this opinion.
    Judgment reversed and cause remanded.
    FISCHER, J., concurs in judgment only.
    DEWINE, J., concurs.
    DEWINE, J., concurring in judgment.
    {¶22}   It is fundamental that “[d]ocuments that have not been sworn, certified,
    or authenticated by way of affidavit ‘have no evidentiary value.’ ” Michell v. Internatl.
    Flavors & Fragrances, Inc., 
    179 Ohio App.3d 365
    , 
    2008-Ohio-3697
    , 
    902 N.E.2d 37
    ,
    ¶ 17 (1st Dist.), citing Lance Acceptance Corp. v. Claudio, 9th Dist. Lorain No.
    02CA008201, 
    2003-Ohio-3503
    , ¶ 15. Simply attaching the note and mortgage to the
    complaint does not make them proper for consideration on summary judgment. As a
    result, I concur with the conclusion reached in the lead opinion.
    Please note:
    The court has recorded its own entry on the date of the release of this opinion.
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