GMAC Mtge., L.L.C. v. Long , 2015 Ohio 4071 ( 2015 )

[Cite as GMAC Mtge., L.L.C. v. Long, 2015-Ohio-4071.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 102064
GMAC MORTGAGE, L.L.C.
PLAINTIFF-APPELLEE
vs.
DAVID L. LONG, A.K.A.
DAVID LONG, ET AL.
DEFENDANTS-APPELLANTS
JUDGMENT:
AFFIRMED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-13-803368
BEFORE: E.T. Gallagher, J., Kilbane, P.J., and McCormack, J.
RELEASED AND JOURNALIZED: October 1, 2015
ATTORNEYS FOR APPELLANT
James R. Douglass
Marc E. Dann
Grace Mary Doberdruk
Daniel M. Solar
The Dann Law Firm Co., L.P.A.
P.O. Box 6031040
Cleveland, Ohio 44103
ATTORNEYS FOR APPELLEE
For GMAC Mortgage, L.L.C.
Channing L. Ulrich
Carson A. Rothfuss
Lerner, Sampson & Rothfuss
P.O. Box 5480
Cincinnati, Ohio 45201-4007
For Ocwen Loan Servicing, L.L.C.
Brooke Turner Bautista
McGlinchey Stafford, P.L.L.C.
25550 Chagrin Boulevard, Suite 406
Cleveland, Ohio 44122
EILEEN T. GALLAGHER, J.:
{¶1} Defendant-appellant, David L. Long (a.k.a David Long) (“Long”), appeals an
order granting summary judgment in favor of substitute plaintiff-appellee, Ocwen Loan
Servicing, L.L.C. (“Ocwen”), on its complaint in foreclosure. Long assigns one error for
our review:
The trial court erred when it granted appellee Ocwen Loan Servicing,
L.L.C.’s motion for summary judgment.
{¶2} We find no merit to the appeal and affirm the trial court’s judgment.
I. Facts and Procedural History
{¶3} In October 2009, Long executed a promissory note payable to United
Wholesale Mortgage (“United Wholesale”) for the principal amount of $140,974. To
secure payment of the note, Long executed a mortgage on real property located at 16616
Invermere Avenue in Cleveland, Ohio (“the property”) in favor of Mortgage Electronic
Registration Systems, Inc. (“MERS”), as nominee for United Wholesale, its successors,
and assigns.
{¶4} Long subsequently defaulted on the note. On March 20, 2013, GMAC
Mortgage L.L.C. (“GMAC”), successor by merger to GMAC Mortgage Corporation, filed
a complaint in foreclosure against Long to recover the unpaid balance due on the note and
to foreclose on the mortgaged property. A copy of the note attached to the complaint
contained three endorsements. These endorsements indicate that United Wholesale first
endorsed the note to Ally Bank (f.k.a. GMAC Bank). Ally Bank endorsed the note to
GMAC, who subsequently endorsed the note in blank.
{¶5} After the case had been pending for five months, GMAC filed a motion to
substitute Ocwen as the party plaintiff, and the court granted the motion. The assignment
attached to the mortgage indicates that GMAC assigned the mortgage to Ocwen on July
31, 2013. The assignment also shows that Ocwen and GMAC share the same address.
{¶6} Ocwen, as substitute plaintiff, filed a motion for summary judgment, arguing
it was entitled to judgment as a matter of law because (1) Long’s loan was in default and
had not been cured, (2) notice of default and intent to accelerate the loan balance had
been provided to Long, and (3) Ocwen was the current holder of the note and mortgage
by virtue of its possession of the original note endorsed in blank and an assignment of the
mortgage.
{¶7} Ocwen supported its motion with an affidavit from Michael C. Johnston
(“Johnston”). In paragraph one of the affidavit, Johnston identifies himself as the
“Default Specialist of Ocwen Loan Servicing, L.L.C.,” which he avers is the “successor
in interest to GMAC Mortgage L.L.C.” 1 Johnston further averred that, as Ocwen’s
default specialist, he reviewed Long’s loan instruments and account data and based his
statements on his own personal knowledge. For purposes of standing, Johnston stated in
paragraph three:
At the time of the filing of the Complaint, and continuously since[,] Ocwen,
as successor in interest to GMAC, successor by merger to GMAC Mortgage
Corporation has been in possession of the original promissory note. The
Note has been duly endorsed in blank.
Neither Johnston’s affidavit nor any other evidence in the record explains when Ocwen
1
merged with, or acquired, GMAC.
{¶8} Long opposed Ocwen’s motion for summary judgment, arguing that GMAC
lacked standing to file the foreclosure complaint against him because it was not the holder
of the note at the time the complaint was filed. Long also claimed Johnston’s affidavit
was insufficient because it was not based on personal knowledge. Nevertheless, a
magistrate in foreclosure issued a decision specifically finding that “plaintiff has standing
to bring this case.” The magistrate’s decision granted Ocwen’s motion for summary
judgment on its foreclosure claim and ordered the sale of the property.
{¶9} Long objected to the magistrate’s report, again asserting that Ocwen lacked
standing to pursue its claim against him because it was not the holder of the note. The
trial court overruled Long’s objections and adopted the magistrate’s decision. Long now
appeals from that judgment.
II. Law and Argument
{¶10} In his sole assignment of error, Long argues the trial court erred in granting
Ocwen’s motion for summary judgment because Ocwen failed to establish that the
original plaintiff, GMAC, had standing to bring the foreclosure action at the time the
complaint was filed. Long also contends Johnston’s affidavit was insufficient to support
the summary judgment.
A. Standard of Review
{¶11} We review an appeal from summary judgment de novo. Grafton v. Ohio
Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996). The party moving for
summary judgment bears the burden of demonstrating the absence of a genuine issue of
material fact as to the essential elements of the case with evidence of the type listed in
Civ.R. 56(C). Dresher v. Burt, 75 Ohio St.3d 280, 292, 662 N.E.2d 264 (1996). Once
the moving party demonstrates entitlement to summary judgment, the burden shifts to the
nonmoving party to produce evidence related to any issue on which the party bears the
burden of production at trial. Civ.R. 56(E). Summary judgment is appropriate when,
after construing the evidence in a light most favorable to the party against whom the
motion is made, reasonable minds can only reach a conclusion that is adverse to the
nonmoving party. Zivich v. Mentor Soccer Club, 82 Ohio St.3d 367, 369-370, 696
N.E.2d 201 (1998).
B. Standing
{¶12} Long argues Ocwen was not entitled to summary judgment because the
party who filed the complaint was not the holder of the original promissory note at the
time the complaint was filed and therefore lacked standing to bring this action.
{¶13} A party commencing litigation must have standing to sue in order to invoke
the jurisdiction of the common pleas court. Fed. Home Loan Mtge. Corp. v.
Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017, 979 N.E.2d 1214, ¶ 20. To have
standing, a plaintiff must have a personal stake in the outcome of the controversy and
have suffered some concrete injury that is capable of resolution by the court. Tate v.
Garfield Hts., 8th Dist. Cuyahoga No. 99099, 2013-Ohio-2204, ¶ 12; Middletown v.
Ferguson, 25 Ohio St.3d 71, 75, 495 N.E.2d 380 (1986). Thus, lack of standing at the
commencement of the lawsuit cannot be cured through an assignment prior to judgment;
“[t]he lack of standing at the commencement of a foreclosure action requires dismissal of
the complaint.” Schwartzwald at ¶ 37-40.
{¶14} Prior to Schwartzwald, this court held that in order to have standing in a
foreclosure action, the plaintiff must establish that “it owned the note and the mortgage
when the complaint was filed.” (Emphasis added.) Wells Fargo Bank, N.A. v. Jordan,
8th Dist. Cuyahoga No. 91675, 2009-Ohio-1092, ¶ 23. In Schwartzwald, the court
concluded that the lender did not have standing to invoke the jurisdiction of the common
pleas court because “it failed to establish an interest in the note or mortgage at the time it
filed suit.” Schwartzwald at ¶ 19. This statement implies that having an interest in
either the note or the mortgage at the time the complaint is filed is sufficient to establish
standing. However, the court did not expressly state that a plaintiff seeking foreclosure
can establish standing by proving an interest in one or the other; it simply found that the
lender in that case had neither.
{¶15} Nonetheless, in CitiMortgage, Inc. v. Patterson, 2012-Ohio-5894, 984
N.E.2d 392 (8th Dist.), this court interpreted the Schwartzwald language to mean that a
plaintiff seeking foreclosure “may establish its interest in the suit, and therefore have
standing to invoke the jurisdiction of the court when, at the time it files its complaint of
foreclosure, it either (1) has had a mortgage assigned or (2) is the holder of the note.”
(Emphasis sic.) Id. at ¶ 21. This court has followed Patterson in numerous subsequent
cases. See Bank of N.Y. Mellon Trust Co., N.A. v. Hentley, 8th Dist. Cuyahoga No.
99252, 2013-Ohio-3150; U.S. Bank Natl. Assn. v. Perry, 8th Dist. Cuyahoga No. 99608,
2013-Ohio-3814; GMAC Mtge., L.L.C. v. Waller, 8th Dist. Cuyahoga No. 99457,
2013-Ohio-4376; Huntington Natl. Bank v. Brown, 8th Dist. Cuyahoga No. 100567,
2014-Ohio-2649; Bank of Am. v. Lynch, 8th Dist. Cuyahoga No. 100457,
2014-Ohio-3586; Bank of Am., N.A. v. Adams, 8th Dist. Cuyahoga No. 101056,
2015-Ohio-675; Fannie Mae v. Hicks, 8th Dist. Cuyahoga No. 102079, 2015-Ohio-1955.
{¶16} Johnston, Ocwen’s default specialist, averred in his affidavit that Ocwen
was in possession of the original promissory note at the time the complaint was filed.
Long argues that because the note was endorsed in blank, Ocwen, not GMAC, was the
holder of the note when the complaint was filed. However, Johnston authenticated true
and accurate copies of the assignments of Long’s mortgage on the property. GMAC did
not assign the mortgage to Ocwen until July 31, 2013, four months after GMAC filed the
complaint. Thus, GMAC had standing to file the complaint by virtue of its interest in the
mortgage when the complaint was filed. Patterson at ¶ 21.
C. Sufficiency of Johnston’s Affidavit
{¶17} Long argues the trial court erred in granting summary judgment in favor of
Ocwen because Ocwen failed to provide sufficient evidence of the type required by
Civ.R. 56(E). Long contends Johnston’s affidavit is insufficient because it fails to
explain, in detail, how his job duties make him familiar with Long’s note and mortgage.
Long also complains the affiant failed to state that he viewed the original note and
compared it to the copy attached to his affidavit.
{¶18} Civ.R. 56(E) sets forth the requirements for affidavits submitted in support
of summary judgment, and provides, in relevant part, that “[s]upporting and opposing
affidavits shall be made on personal knowledge.” With respect to “personal knowledge,”
Civ.R. 56(E) provides:
Unless controverted by other evidence, a specific averment that an affidavit
pertaining to business is made upon personal knowledge of the affiant
satisfies the Civ.R. 56(E) requirement that affidavits both in support or in
opposition to motions for summary judgment show that the affiant is
competent to testify to the matters stated.
We have held that “[t]here is no requirement that an affiant explain the basis for his or her
personal knowledge where personal knowledge can be reasonably inferred based on the
affiant’s position and other facts contained in the affidavit.” Nationstar Mtge., L.L.C. v.
Wagener, 8th Dist. Cuyahoga No. 101280, 2015-Ohio-1289, ¶ 26, citing Deutsche Bank
Natl. Trust Co. v. Najar, 8th Dist. Cuyahoga No. 98502, 2013-Ohio-1657, ¶ 20.
{¶19} Johnston’s job title, “Default Specialist,” indicates that he works with
accounts in default, presumably to recover unpaid balances. In paragraph two of
Johnston’s affidavit, he explains that through his position as a default specialist at Ocwen,
he has access to Ocwen’s business records, including loan instruments and loan account
records. A default specialist would need to review the debtor’s loan documents in order
to collect the unpaid principal and interest on an account in default.
{¶20} Johnston also states that he has “personal knowledge of the manner in which
the Records are created,” and that he “relied upon the Records in executing this
Affidavit.” In paragraph three, Johnston avers that Ocwen has maintained possession of
the original promissory note since the complaint was filed. Further, Johnston attached
“true and correct” copies of the promissory note, mortgage, and chain of assignments to
his affidavit. These facts, coupled with Johnston’s position as a default specialist, create
a reasonable inference that he had personal knowledge of the facts contained in his
affidavit. This court recently deemed sufficient similar averments in another affidavit.
See Wagener at ¶ 27-31.
{¶21} Once Ocwen submitted evidence that it was entitled to foreclose on Long’s
promissory note and mortgage, the burden shifted to Long to present evidence of
conflicting facts demonstrating a genuine issue of material fact as to Johnston’s personal
knowledge or any of the facts stated in his affidavit. Civ.R. 56(E); Wagener at ¶ 34.
Long cites no evidence in the record to rebut Johnston’s statement that he had personal
knowledge of the facts described in his affidavit or any other fact stated therein.
{¶22} Long also asserts that Johnston’s affidavit was deficient because he failed to
properly authenticate the copy of the note attached to his affidavit because he failed to
state that he personally reviewed the original note and compared it with the copy. This
court has rejected this argument and declined to hold that Civ.R. 56(E) requires that
affidavits based on documents must include an averment that the affiant compared the
documents attached to the affidavit with originals. Wagener at ¶ 38, citing Wells Fargo
Bank, N.A. v. Hammond, 8th Dist. Cuyahoga No. 100141, 2014-Ohio-5270, ¶ 37-38.
{¶23} Furthermore, Johnston’s affidavit contains statements from which we can
infer that he compared the documents attached to his affidavit with the original loan
documents. In one averment, he states that Ocwen has possession of the original
promissory note. In another, he states that he has access to all of Long’s loan
documents, including the note, the mortgage, and assignments. Following these
averments, he states that the copies of documents attached to his affidavit are “true and
correct copies.” Therefore, Johnston established the authenticity of the copies even
though he did not expressly state that he compared them to the originals.
{¶24} The sole assignment of error is overruled.
III. Conclusion
{¶25} The trial court properly granted summary judgment in favor of Ocwen on its
complaint in foreclosure. Ocwen supported its motion with competent sworn evidence
of the type required by Civ.R. 56(C) and (E), because Johnston’s affidavit established he
made the statements with his own personal knowledge. The fact that Johnston did not
expressly state that he compared the copies of the loan documents attached to his affidavit
with the original loan documents was inconsequential because he presented facts upon
which such an inference could be made.
{¶26} Judgment affirmed.
It is ordered that appellee recover from appellant costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to the common pleas court to carry this
judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of
the Rules of Appellate Procedure.
EILEEN T. GALLAGHER, JUDGE
MARY EILEEN KILBANE, P.J., and
TIM McCORMACK, J., CONCUR