JP Morgan Chase Bank, NA v. Ackerman , 2013 Ohio 5010 ( 2013 )

[Cite as JP Morgan Chase Bank, NA v. Ackerman, 2013-Ohio-5010.]
COURT OF APPEALS
RICHLAND COUNTY, OHIO
FIFTH APPELLATE DISTRICT
JP MORGAN CHASE BANK, NA : JUDGES:
:
: Hon. W. Scott Gwin, P.J.
Plaintiff - Appellee : Hon. John W. Wise, J.
: Hon. Craig R. Baldwin, J.
-vs- :
:
FREDERIC W. ACKERMAN, ET AL. : Case No. 13CA17
:
:
Defendants - Appellants : OPINION
CHARACTER OF PROCEEDING: Appeal from the Richland County
Court of Common Pleas, Case No.
2011-CV-248 D
JUDGMENT: Affirmed
DATE OF JUDGMENT: November 7, 2013
APPEARANCES:
For Plaintiff-Appellee For Defendants-Appellants
THOMAS WYATT PALMER BRUCE M. BROYLES
BRAD W. STOLL 5815 Market Street, Suite 2
Thompson Hine LLP Boardman, OH 44512
41 S. High Street, Suite 1700
Columbus, OH 43215
STEPHEN D. WILLIGER
Thompson Hine LLP
127 Public Square
3900 Key Tower
Cleveland, OH 44114
Richland County, Case No. 13CA17 2
Baldwin, J.
{¶1} Defendants-appellants Frederic and Jill Ackerman appeal from the
January 23, 2013 Judgment Entry Foreclosure Decree issued by the Richland County
Court of Common Pleas.
STATEMENT OF THE FACTS AND CASE
{¶2} In August of 2001, appellants Frederic and Jill Ackerman signed a Home
Equity Line of Credit Agreement with Bank One, N.A. At such time, they signed an
open end mortgage with Bank One, N.A. securing the same. The mortgage was filed for
record on September 26, 2001.
{¶3} Subsequently, on February 23, 2011, appellee JP Morgan Chase Bank,
N.A., the successor by merger to Bank One, N.A., filed a complaint for money and
foreclosure against appellants. Appellants filed an answer to the complaint on March 21,
2011.
{¶4} A bench trial commenced on October 17, 2012. At the trial, Peter
Katsikas, a home lending research officer with appellee JP Morgan Chase Bank,
identified a copy of the promissory note for appellants’ loan. He testified that both the
note and mortgage were on Bank One paper, but that appellee had merged with Bank
One on or about July of 2004. Katsikas identified a copy of the agreement to merge the
two banks under the title of JP Mortgage Chase Bank and testified that following the
merger, Bank One accounts became appellee JP Morgan Chase Bank’s records.
According to Katsikas, after the merger, appellee received the original note and
mortgage relative to appellants’ loan from Bank One and also received appellants’
payment history. He stated that appellee JP Morgan Chase Bank has held the original
Richland County, Case No. 13CA17 3
note and mortgage since the merger in 2004 and that they were located in a facility in
Monroe, Louisiana. He did not have the original note with him.
{¶5} Katsikas also testified that if appellee JP Morgan Chase Bank was putting
a loan into a trust, the trust would go by a different name. When asked what some of
those names were, he stated that he believed the trust was known as CCP. According
to Katsikas, an acceleration warning letter was sent by Chase Home Finance LLC to
appellants in September of 2010. After the letter was sent, appellants did not try to
apply for any type of loss mitigation efforts.
{¶6} On cross-examination, Katsikas testified that prior to May of 2011, Chase
Home Finance LLC was a separate entity from appellee JP Morgan Chase Bank and
was the servicing agent for appellee JP Morgan Chase Bank. He further testified that
on or about January 20, 2010, appellants were advised by Chase Home Finance LLC
that their loan had been sold to CPCC Delaware Business Trust (“Chase”) and that
Chase was the new creditor of their loan. The trial court continued the hearing in order
to allow appellee to produce the original note in order to demonstrate that it possessed
the same.
{¶7} Appellant Frederic Ackerman testified that after he realized that his
monthly payments were becoming difficult to make, he called his local branch and was
told that refinancing was not an option and that they had to stop making payments
before any remedies were available to them. When asked what remedies would be
available if they stopped making payments, appellant Frederic Ackerman testified that
he was not sure at that moment but that “[i]t appears now that modification was a
possibility,…” Transcript at 62. He also testified that the female assistant manager at the
Richland County, Case No. 13CA17 4
Chase Bank location advised them to stop making payments. The discussions occurred
at the end of 2009 or the very beginning of 2010. According to appellant Frederic
Ackerman, they continued making payments for another six months or so. On cross-
examination, he agreed that appellants stopped making regular monthly payments in
2010 and had not made payment since July of 2010.
{¶8} On November 21, 2012, Frank Dean, a home loan research officer with
appellee JP Morgan Chase Bank, testified that he received the original documents
regarding appellants’ loan and had brought the same to court. He testified that he was
able to determine that the documents were original because they contained original ink
signatures. He also testified, with respect to the promissory note, that “Chase
acknowledges that it is the original document by putting a squiggly mark on the front
page.” Transcript at 73.
{¶9} On January 23, 2013, a Judgment Entry Foreclosure Decree was filed.
Appellants now appeal from the same, raising the following assignments of error on
appeal:
{¶10} I. THE TRIAL COURT ERRED IN FAILING TO DISMISS THE
COMPLAINT BASED UPON THE LACK OF STANDING AS JPMORGAN CHASE
BANK NA DID NOT ESTABLISH THAT IT WAS THE HOLDER OF THE NOTE AT THE
TIME THE COMPLAINT WAS FILED.
{¶11} II. THE TRIAL COURT ERRED IN ALLOWING JPMORGAN CHASE
BANK, NA TO FORECLOSE UPON APPELLANTS WHEN IT INDUCED APPELLANTS
TO DEFAULT ON THE MORTGAGE IN ORDER TO OBTAIN A LOAN
MODIFICATION.
Richland County, Case No. 13CA17 5
I
{¶12} Appellants, in their first assignment of error, argue that the trial court erred
in failing to dismiss the complaint because appellee JP Morgan Chase Bank, NA failed
to establish that it was the holder of the note at the time the complaint was filed and,
therefore, lacked standing. We disagree.
{¶13} “ ‘Standing to sue is part of the common understanding of what it takes to
make a justifiable case.’ “ Federal Home Loan Mortg. Corp. v. Schwartzwald, 134 Ohio
St.3d 13, 2012–Ohio–5017, ¶ 21, 979 N.E.2d 1214, quoting Steel Co. v. Citizens for a
Better Environment, 523 U.S. 83, 102, 118 S. Ct. 1003 (1998). In . Schwartzwald, the
Ohio Supreme Court held that a plaintiff/bank receiving an assignment of a note and
mortgage from the real party in interest subsequent to the filing of a foreclosure action,
but before the entry of judgment, does not cure a lack of standing to file the foreclosure
action. The court held that the lack of standing could not be cured by a subsequent
assignment of the note and mortgage subsequent to filing the complaint. Id. at ¶ 38 . In
Schwartzwald, the record did not establish that the plaintiff/bank was the holder of the
note or mortgage at the time the complaint was filed. As such, it “concede[d] that there
[wa]s no evidence that it had suffered any injury at the time it commenced th[e]
foreclosure action.” Id. at ¶ 28. “Thus, because it failed to establish an interest in the
note or mortgage at the time it filed suit, it had no standing to invoke the jurisdiction of
the common pleas court.” Id.
{¶14} In the case sub judice, there was undisputed evidence that appellee was
the holder of the note and mortgage at the time the foreclosure complaint was filed and,
therefore, had standing to file the same. There was evidence presented that appellants
Richland County, Case No. 13CA17 6
signed the note with Bank One and also signed the mortgage granting a security
interest to Bank One. There was testimony that appellee and Bank One merged in 2004
and that after the merger, Banc One’s accounts became appellee’s records. A copy of
the merger agreement was admitted as an exhibit at the trial as were documents from
the Ohio Secretary of State stating that Bank One had merged with appellee and that
Bank One had merged out of existence. In addition, Frank Dean testified that he had
received the original documents regarding appellants’ loan and had brought the same to
court. The documents had been stored in a facility in Louisiana. There was testimony
that the note had remained in appellee’s possession since the merger in 2004.
{¶15} Based on the foregoing, we find that appellee held the note and mortgage
by virtue of merger at the time the foreclosure complaint was filed and had standing to
foreclose. See Huntington Natl. Bank v. Hoffer, 2d Dist. Greene No. 2010–CA–31,
2011–Ohio-242, ¶ 15 (“When an existing bank takes the place of another bank after a
merger, no further action is necessary…. Since Sky Bank merged into Huntington, there
was nothing else that Huntington needed to do to become the real party in interest in
regards to Hoffer's mortgage.”).
{¶16} Appellants’ first assignment of error is, therefore, overruled.
II
{¶17} Appellants, in their second assignment of error, argue that the trial court
erred in permitting appellee to foreclose when appellee induced appellants to default on
the mortgage in order to obtain a loan modification. We disagree.
{¶18} At the trial in this matter, appellant Frederic Ackerman testified that Bart
Ingraham from the local branch of Chase Bank told him that refinancing was not an
Richland County, Case No. 13CA17 7
option and that appellants would have to stop making payments before any remedies
were available to them. He further testified that “at that moment”, he was not sure what
the remedies were but that it “appears now that modification was a possibility,…”
Transcript at 62. Appellant Frederic Ackerman also testified that an assistant branch
manager told him that they had to stop making payments for three months before
anything could be done. There is no evidence in the record that Chase told or induced
appellants to default but rather, as noted by appellee, “Chase merely explained the
requirements for a loan modification to be considered.” Moreover, Peter Katsikas
testified that after the default warning letters were sent out in September of 2010,
appellants did not try to apply for any type of loss mitigation.
{¶19} Based on the foregoing, we find that there was no evidence that appellee
induced appellants to default on the mortgage in order to obtain a loan modification.
{¶20} Appellants’ second assignment of error is, therefore, overruled.
Richland County, Case No. 13CA17 8
{¶21} Accordingly, the judgment of the Richland County Court of Common Pleas
is affirmed.
By: Baldwin, J.
Gwin, P.J. and
Wise, J. concur.
HON. CRAIG R. BALDWIN
HON. W. SCOTT GWIN
HON. JOHN W. WISE
CRB/dr
[Cite as JP Morgan Chase Bank, NA v. Ackerman, 2013-Ohio-5010.]
IN THE COURT OF APPEALS FOR RICHLAND COUNTY, OHIO
FIFTH APPELLATE DISTRICT
JP MORGAN CHASE BANK, NA :
:
Plaintiff - Appellee :
:
-vs- : JUDGMENT ENTRY
:
FREDERIC W. ACKERMAN, ET AL. :
:
Defendants - Appellants : CASE NO. 13CA17
For the reasons stated in our accompanying Memorandum-Opinion, the
judgment of the Court of Common Pleas of Richland County, Ohio is affirmed. Costs
assessed to appellants.
HON. CRAIG R. BALDWIN
HON. W. SCOTT GWIN
HON. JOHN W. WISE