Bayview Loan Servicing, L.L.C. v. St. Cyr , 90 N.E.3d 321 ( 2017 )

[Cite as Bayview Loan Servicing, L.L.C. v. St. Cyr, 2017-Ohio-2758.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 104655
BAYVIEW LOAN SERVICING L.L.C.
PLAINTIFF-APPELLEE
vs.
DARWIN ST. CYR, ET AL.
DEFENDANTS-APPELLANTS
JUDGMENT:
AFFIRMED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-15-848614
BEFORE: McCormack, P.J., Blackmon, J., and Jones, J.
RELEASED AND JOURNALIZED: May 11, 2017
ATTORNEY FOR APPELLANTS
Ivan G. Haggins
3363 Chelsea Drive
Cleveland Heights, OH 44118
ATTORNEYS FOR APPELLEE
For Bayview Loan Servicing, L.L.C.
Ted A. Humbert
Laura C. Infante
Jason A. Whitacre
Law Offices of John D. Clunk Co. L.P.A.
4500 Courthouse Blvd., Ste. 400
Stow, OH 44224
For City of Cleveland Heights
Sara M. Donnersbach
Weltman Weinberg & Reis Co., L.P.A.
Lakeside Place, Ste. 200
323 Lakeside Ave., West
Cleveland, OH 44113
ALSO LISTED:
Dollar Bank, F.S.B.
3 Gateway Center
401 Liberty Ave.
Pittsburgh, PA 15222
State of Ohio Department of Taxation
150 East Gay Street, 21st Floor
Columbus, OH 43215
Samantha Elizabeth Thorpe
2111 Miramar Blvd.
Cleveland, OH 44121
TIM McCORMACK, P.J.:
{¶1} Defendant-appellant Darwin St. Cyr appeals from a judgment of the
Cuyahoga County Court of Common Pleas granting foreclosure in favor of
plaintiff-appellee Bayview Loan Servicing, L.L.C. (“Bayview”). For the following
reasons, we affirm.
Procedural History and Substantive Facts
{¶2} In June 2008, St. Cyr purchased a home in Cleveland, Ohio. He executed
a promissory note in the amount of $106,575. The note was secured by a mortgage
against this property, executed in favor of Mortgage Electronic Registration Systems, Inc.
(“MERS”) as nominee for Taylor, Bean & Whitaker Mortgage Corp. and its successors
and assigns. In May 2010, MERS assigned the mortgage to BAC Home Loans
Servicing, L.P., f.k.a., Countrywide Home Loans Servicing, L.P. In March 2014, Bank
of America, N.A., successor by merger to BAC Home Loans Servicing, L.P., f.k.a.
Countrywide Home Loans Servicing, L.P., assigned the mortgage to the Secretary of
Housing and Urban Development (“HUD”). Thereafter, in April 2014, HUD assigned
the mortgage to appellee, Bayview, who was the current loan servicer at the time this
action was filed.
{¶3} In July 2015, Bayview filed its complaint in foreclosure, seeking judgment
on the note and foreclosure of the mortgage. Bayview alleged that it was entitled to
enforce the note, it was in possession of the note, and it was the record holder of the
mortgage at the time it filed the complaint. Bayview further alleged that St. Cyr’s loan
account had fallen into default and St. Cyr had not cured the default, which resulted in the
acceleration of the note and mortgage. Bayview stated that it was therefore entitled to
foreclosure.
{¶4} When St. Cyr did not answer the complaint, Bayview moved for default
judgment. At the default judgment hearing, however, St. Cyr filed a motion for leave to
file an answer instanter, which the trial court granted. Thereafter, upon the court’s
instructions, Bayview provided St. Cyr with a loss mitigation packet and trial payment
plan offer. St. Cyr rejected Bayview’s offer and requested a case management
conference be scheduled. The court granted St. Cyr’s motion for a case management
conference and ordered all discovery to be completed by April 18, 2016, and all
dispositive motions due by May 2, 2016.
{¶5} On February 29, 2016, St. Cyr served upon Bayview a request for
admissions, among other discovery requests. On April 15, 2016, Bayview filed its first
notice of service of discovery. On April 18, 2016, Bayview filed a “combined motion to
amend case management schedule and motion for extension to respond” to St. Cyr’s
discovery requests. St. Cyr, however, filed a brief in opposition to this motion. Both
motions were denied on April 20, 2016, and with this order, the court indicated that all
“nonexpert discovery is now closed.” On April 21 and April 25, Bayview filed notices
of service of discovery responses. Bayview filed a notice of service of supplemental
discovery responses on May 9, 2016.
{¶6} After discovery was complete, St. Cyr moved for summary judgment,
alleging, essentially, that because Bayview failed to timely respond to St. Cyr’s discovery
requests, Bayview admitted to certain facts and these facts establish that no genuine
issues of material fact exist and he was therefore entitled to judgment as a matter of
law. Bayview then filed its own motion for summary judgment, a motion for default
judgment, and a brief in opposition to St. Cyr’s motion for summary judgment. Along
with its reply brief in support of its summary judgment, Bayview moved the court to
“withdraw deemed admissions or for the court to rule that the same were not admitted and
allow responses [the] plaintiff provided.”
{¶7} On June 6, 2016, the trial court granted Bayview’s motion for summary
judgment and motion for default judgment, and it denied St. Cyr’s motion. The trial
court issued a supplemental journal entry on June 13, 2016. St. Cyr now appeals,
assigning two errors for our review:
I. The trial court erred in granting Bayview’s motion for summary
judgment and in denying St. Cyr’s motion for summary judgment,
particularly given the deemed admissions by Bayview.
II. The trial court erred in granting Bayview’s motion for summary
judgment and in denying St. Cyr’s motion for summary judgment, as
Bayview failed to provide sufficient evidence of entitlement to foreclosure
and/or damages.
Summary Judgment
{¶8} Summary judgment is appropriate when: (1) there is no genuine issue of
material fact; (2) the moving party is entitled to judgment as a matter of law; and (3) after
construing the evidence most favorably for the party against whom the motion is made,
reasonable minds can reach only a conclusion that is adverse to the nonmoving party.
Civ.R. 56(C); Temple v. Wean United, Inc., 50 Ohio St.2d 317, 327, 364 N.E.2d 267(1977).
{¶9} In a motion for summary judgment, the moving party carries an initial
burden of setting forth specific facts that demonstrate his or her entitlement to summary
judgment. Dresher v. Burt, 75 Ohio St.3d 280, 292-293, 662 N.E.2d 264 (1996). Once
a moving party satisfies its burden under Civ.R. 56(C), the nonmoving party may not rest
upon the mere allegations or denials of the moving party’s pleadings; rather, it has a
reciprocal burden of setting forth specific facts demonstrating that there is a genuine
triable issue. Id.; State ex rel. Zimmerman v. Tompkins, 75 Ohio St.3d 447, 449, 663
N.E.2d 639 (1996). Summary judgment is appropriate if the nonmoving party fails to
meet this burden. Dresher at 293.
{¶10} A motion for summary judgment in a foreclosure action must be supported
by evidentiary quality materials establishing that: (1) the plaintiff is the holder of the note
and mortgage or is a party entitled to enforce the instrument; (2) if the plaintiff bank is
not the original mortgagee, the chain of assignments and transfers; (3) that the mortgagor
is in default; (4) that all conditions precedent have been met; and (5) the amount of
principal and interest due. See, e.g., Deutsche Bank Natl. Trust Co. v. Najar, 8th Dist.
Cuyahoga No. 98502, 2013-Ohio-1657, ¶ 17; Bank of Am., N.A. v. Sweeney, 8th Dist.
Cuyahoga No. 100154, 2014-Ohio-1241, ¶ 8.
{¶11} We review the trial court’s decision on a motion for summary judgment de
novo. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996).
Law and Analysis
{¶12} As the arguments overlap, we address the assignments of error together.
St. Cyr contends that the trial court erred when it denied his motion for summary
judgment and granted Bayview’s motion for summary judgment because Bayview
admitted it had no legal interest in the note or the mortgage by virtue of failing to timely
respond to St. Cyr’s request for admissions. In support, St. Cyr attached to his motion
the request for admissions propounded to Bayview, which called upon the plaintiff to
admit, among other statements, that it has no “legal interest, a beneficial interest, or any
other interest in the mortgage or note” (Request No. 1); it has no documents
demonstrating “the note was physically transferred to the plaintiff before commencement
of the instant matter” (Request No. 9); the plaintiff “was not the party who entered and
maintained MERS records” (Request No. 10); and the original lender, Taylor, Bean &
Whitaker “had no right to assign any purported interest in the property, note, mortgage, or
otherwise” (Request No. 15).
{¶13} St. Cyr also contends that even if the requests were not deemed admitted,
there were no genuine issues of material fact and he was entitled to judgment as a matter
of law. In support, he advances the following arguments: (1) Bayview’s affidavit in
support of summary judgment was insufficient; and (2) Bayview failed to provide
sufficient evidence that it was a real party in interest, it had standing, it was entitled to
foreclosure on the property, and it was entitled to damages in the amount of $104,717.43
with interest from January 1, 2010.
{¶14} We first address St. Cyr’s request for admissions propounded to Bayview.
St. Cyr alleges that because Bayview’s discovery responses were served upon him three
weeks or more past the discovery deadline, the responses must be deemed admitted and,
therefore, he is entitled to judgment as a matter of law. In response, Bayview provides
that, given the voluminous nature of the discovery requests, it required additional time in
which to respond, and on March 24, 2016, it requested and received approval from St.
Cyr’s counsel to extend the time to file its discovery responses until April 18, 2016. On
April 18, Bayview requested another extension and it received approval from defense
counsel to extend the time until May 9, 2016. Bayview further states that after it
received defense counsel’s consent, St. Cyr withdrew its consent that same day via an
after-hours email from defense counsel. Bayview learned that its motion for extension
had been denied on April 20, and it served its response to the defendant’s first set of
admissions the following day. Bayview served supplemental discovery responses (to a
request for production of documents) that included a new payoff quote on May 9, 2016.
{¶15} It is well settled in Ohio that in accordance with Civ.R. 36(A), “‘the matter
set forth in the requests for admissions is deemed admitted if they are not answered within
rule.’” Bank of N.Y. v. Jordan, 8th Dist. Cuyahoga No. 88619, 2007-Ohio-4293, ¶ 34,
quoting Beechwoods, Inc. v. Hosfelt, 10th Dist. Franklin No. 79AP-117, 1979 Ohio App.
LEXIS 12493 (Oct. 9, 1979). Thus, where a party fails to timely respond to the request
for admissions, those admissions become fact. Smallwood v. Shiflet, 8th Dist. Cuyahoga
No. 103853, 2016-Ohio-7887, ¶ 18. It is equally settled law that a motion for summary
judgment may be based upon the admitted matter. Jordan. “[W]here a party files a
written request for admission, a failure of the opposing party to timely answer the request
constitutes a conclusive admission pursuant to Civ.R. 56(C) in case of a summary
judgment.” Klesch v. Reid, 95 Ohio App.3d 664, 674, 643 N.E.2d 571 (8th Dist.1994).
{¶16} However, the trial court may permit withdrawal or amendment of
admissions under certain circumstances:
Subject to the provisions of Rule 16 governing modification of a pretrial
order, the court may permit withdrawal or amendment when the
presentation of the merits of the action will be subserved thereby and the
party who obtained the admission fails to satisfy the court that withdrawal
or amendment will prejudice the party in maintaining his action or defense
on the merits.
Civ.R. 36(B); Jade Sterling Steel Co. v. Stacey, 8th Dist. Cuyahoga No. 88283,
2007-Ohio-532, ¶ 11.
{¶17} Therefore, in accordance with Civ.R. 36(B), the court may permit
withdrawal where allowing withdrawal “‘will aid in presenting the merits of the case and
the party who obtained the admission fails to satisfy the court that withdrawal will
prejudice him in maintaining his action.’” 6750 BMS, L.L.C. v. Drentlau,
2016-Ohio-1385, 62 N.E.3d 928, ¶ 14 (8th Dist.), quoting Cleveland Trust Co. v. Willis,
20 Ohio St.3d 66, 67, 485 N.E.2d 1052 (1985). Thus, this rule “‘emphasizes the
importance of having the action resolved on the merits, while at the same time assuring
each party that justified reliance on an admission in preparation for trial will not operate
to his prejudice.’” Id.{¶18} Civ.R. 36(B) does not require a written motion be filed, nor does it provide a
time when a motion must be filed; rather, such matter is left to the discretion of the trial
court. Jade Sterling Steel Co., citing Balson v. Dodds, 62 Ohio St.2d 287, 291, 405
N.E.2d 293 (1980). In fact, contesting the admissions in a motion for summary
judgment satisfies the requirements of the rule. Id.{¶19} It is within the trial court’s discretion whether it will permit or deny the
withdrawal or amendment of admissions. 6750 BMS, L.L.C. Likewise, it is within the
court’s discretion whether to accept the filing of late responses to a request for
admissions. Id.{¶20} We therefore review a trial court’s decision regarding its consideration of a
party’s motion to withdraw or amend admissions for an abuse of discretion. Jade
Sterling Steel Co. at ¶ 12. An abuse of discretion implies the trial court was arbitrary,
unreasonable, or unconscionable. Id.{¶21} Here, we recognize that Bayview’s response to St. Cyr’s request for
admissions was untimely, and therefore, St. Cyr’s request for admissions was
automatically deemed admitted. However, not only did Bayview move the court to
withdraw or amend the deemed admissions, it also contested the truth of the Civ.R. 36(A)
admissions in its opposition to St. Cyr’s motion for summary judgment and in Bayview’s
own motion for summary judgment. Additionally, Bayview provided responses to St.
Cyr’s request for admissions within one day of receiving notice of the court’s denial of
the requested extension.
{¶22} Moreover, in its motion to withdraw or amend the deemed admissions and
in its summary judgment briefs, Bayview demonstrated that amendment or withdrawal of
the admissions would assist in justly resolving this action on its merits, and conversely,
should the court deny its motion to withdraw or amend, Bayview would effectively be
prevented from presenting its case on the merits. One of the requests for admissions
asked that Bayview admit that it had no legal interest in the note or the mortgage. If
Bayview was deemed to have admitted that it did not have any legal interest in the note or
mortgage, the admission “would effectively nullify its ability to make out its prima facie
case” and the presentation of the merits would be “subserved by permitting appellee to
withdraw the admissions.” Lakeview Loan Servicing, L.L.C. v. Amborski, 6th Dist.
Lucas No. L-14-1242, 2016-Ohio-2978, ¶ 19. “[W]here key controverted issues are
inadvertently or negligently admitted,” the end result “is an unjustified suppression of the
merits, and therefore, that presentation of the merits is subserved by permitting
withdrawal in such cases.” Kutscherousky v. Integrated Communications Solutions,
L.L.C., 5th Dist. Stark No. 2004 CA 00338, 2005-Ohio-4275, ¶ 19.
{¶23} Further, it is unlikely that St. Cyr can demonstrate prejudice. “[W]here a
party all but conceded liability through its admission in a contested case, it is unlikely that
the opposing party could have reasonably relied on the truth of the admission.”
Kutscherousky at ¶ 27. In such a case, it is doubtful that a party that obtained the
deemed admission could reasonably have believed the opposing party “‘intended to admit
liability in [the] contested action.’” Id. at ¶ 28, quoting Westmoreland v. Triumph
Motorcycle Corp., 71 F.R.D. 192, 193 (D.Conn.1976). And even if the party did, in
fact, rely on that assumption, the courts are “‘loathe to reward what would have been an
unreasonable reliance in order to glorify technical compliance with the rules of civil
procedure.’” Id.; Fifth Third Bank v. Meadow Park, L.L.C., 12th Dist. Clinton No.
CA2015-07-012, 2016-Ohio-753, ¶ 30.
{¶24} The record shows that Bayview was working to comply with St. Cyr’s
discovery requests and it had, in fact, obtained at least one extension to respond. The
record also shows that Bayview served its responses within one day of receiving notice
that the court denied its April 18 motion for extension of time, having received the court’s
notice on April 20 and serving its responses to St. Cyr’s request for admissions on April
21. St. Cyr did not file his motion for summary judgment until April 27. Under these
circumstances, St. Cyr could not reasonably claim that he relied on the deemed
admissions.
{¶25} In light of the foregoing, the trial court could reasonably find that Bayview
satisfied the requirements of Civ.R. 36(B). And by virtue of the trial court’s denial of
St. Cyr’s motion for summary judgment and its granting of Bayview’s motion for
summary judgment, the trial court implicitly withdrew the deemed admissions.
{¶26} We are mindful that the manner in which a trial court manages its dockets
and controls discovery, including allowing extensions and addressing pending motions,
rests completely within the discretion of the trial court. 6750 BMS, L.L.C.,
2016-Ohio-1385, 62 N.E.3d 928, at ¶ 18, citing State ex rel. V Cos. v. Marshall Cty. Aud.,
81 Ohio St.3d 467, 469, 692 N.E.2d 198 (1998). A reviewing court will therefore not
disturb a trial court’s decision in this regard absent an abuse of this discretion. 6750
BMS, L.L.C. And under the facts in this case, we cannot say the trial court abused its
discretion.
{¶27} In his motion for summary judgment, St. Cyr contends that, notwithstanding
the deemed admissions, “the plaintiff still cannot prove that it is a true real party in
interest or that it has the mandatory standing to maintain the instant foreclosure
proceeding.” However, the burden is on the moving party to provide evidence to
support its claim that there is no genuine issue of material fact and he is entitled to
judgment in his favor. Dresher, 75 Ohio St.3d at 292-293, 662 N.E.2d 264.
{¶28} Civ.R. 56(C) provides an exclusive list of materials that a party may use in
support of a motion for summary judgment:
Summary judgment shall be rendered forthwith if the pleadings,
depositions, answers to interrogatories, written admissions, affidavits,
transcripts of evidence, and written stipulations of fact, if any, timely filed
in the action, show that there is no genuine issue as to any material fact and
that the moving party is entitled to judgment as a matter of law. No
evidence or stipulation may be considered except as stated in this rule.
Huntington Natl. Bank v. Blount, 8th Dist. Cuyahoga No. 98514, 2013-Ohio-3128, ¶ 18.
“If a document does not fall within one of the categories of evidence listed in Civ.R.
56(C), it can only be introduced as proper evidentiary material when it is incorporated by
reference in a properly framed affidavit pursuant to Civ.R. 56(E).” Lebron v. A&A
Safety, Inc., 8th Dist. Cuyahoga No. 96976, 2012-Ohio-1637, ¶ 8, citing Biskupich v.
Westbay Manor Nursing Home, 33 Ohio App.3d 220, 222, 515 N.E.2d 632 (8th
Dist.1986).
{¶29} Here, St. Cyr has failed to provide any evidence in support of its claim that
it is entitled to judgment as a matter of law. Rather, St. Cyr relies solely upon the
deemed admissions to support his claim, and the affidavit attached in support of his
summary judgment attests only to the circumstances surrounding his request for
admissions and Bayview’s untimely response thereto. Thus, St. Cyr has failed to
identify portions of the record that demonstrate a genuine issue of material fact in
accordance with Civ.R. 56(C).
{¶30} Conversely, Bayview provided the affidavit of Randall Jackson in support of
its motion for summary judgment. St. Cyr claims, however, that Bayview’s affidavit is
insufficient to satisfy Bayview’s summary judgment burden, because the affiant lacks
credibility “and substantiation” and the affidavit does not sufficiently aver that Bayview
was the actual and true holder of the note.
{¶31} Concerning affidavits filed in relation to summary judgment, Civ.R. 56(E)
provides that
[s]upporting and opposing affidavits shall be made on personal knowledge,
shall set forth such facts as would be admissible in evidence, and shall show
affirmatively that the affiant is competent to testify to the matters stated in
the affidavit. Sworn or certified copies of all papers or parts of papers
referred to in an affidavit shall be attached to or served with the affidavit.
{¶32} “Personal knowledge” has been defined as “knowledge gained through
firsthand observation or experience, as distinguished from a belief based upon what
someone else has said.” Bonacorsi v. Wheeling & Lake Erie Ry. Co., 95 Ohio St.3d 314,
2002-Ohio-2220, 767 N.E.2d 707. Where an affiant indicates that he or she is an
employee of the bank, his or her job duties include the supervision of the loan, he or she
has personal knowledge of the loan, and he or she is the records custodian of the records
relating to the mortgage and line of credit at issue, the affidavit complies with Civ.R.
56(E). See Blount at ¶ 20. Moreover, where an affiant attests that he or she has
personal knowledge of the transaction, “this fact cannot be disputed absent evidence to
the contrary.” Household Realty Corp. v. Henes, 8th Dist. Cuyahoga No. 85916,
2007-Ohio-5846, ¶ 12-13; see also Bank One, N.A. v. Swartz, 9th Dist. Lorain No.
03CA008308, 2004-Ohio-1986, ¶ 14 (“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”.).
{¶33} Jackson’s affidavit stated that he was a Bayview employee and authorized to
make the affidavit, that he was familiar with the business records maintained by Bayview
for the purpose of servicing mortgage loans, including the loan at issue, and he attested
that the business records reviewed and produced in this matter were “made at or near the
time by either persons with direct knowledge to the activity and transactions reflected in
such records or from information provided by person with direct knowledge of the
activity and transaction” and they were “kept in the course of its regularly conducted
business activity.” Jackson also stated that he had personal knowledge of the loan and
had personally examined the records of this loan. Finally, Jackson attested that the
documents attached to his affidavit were “true and accurate” copies of the assignment, the
note, and the mortgage.
{¶34} Accordingly, Jackson’s affidavit complied with Civ. R. 56(E). St. Cyr
provided no evidence to the contrary, and mere unsupported allegations that the affiant
lacks credibility or substantiation is insufficient to demonstrate that the affiant is not
competent to testify to the matters stated. Therefore, we find the affidavit of Randall
Jackson is proper summary judgment evidence in accordance with Civ.R. 56(C).
{¶35} St. Cyr also argues that Bayview’s evidence in support of its motion for
summary judgment, including Jackson’s affidavit, failed to establish that Bayview was a
real party in interest, it had standing, it was entitled to foreclosure, or it was entitled to
damages. St. Cyr specifically attacks the “unenforceable ‘blank endorsement’” and the
purported “bogus” assignments of the mortgage.
{¶36} In a foreclosure action, the current holder of the note and the mortgage is the
real party in interest. Bank of Am., N.A. v. Calloway, 8th Dist. Cuyahoga No. 103622,
2016-Ohio-7959, ¶ 15; Wells Fargo Bank v. Stovall, 8th Dist. Cuyahoga No. 91802,
2010-Ohio-236. Under the current law, “a party may establish its interest in the suit, and
thus have standing, when at the time it files its complaint of foreclosure, it either (1) has
had the mortgage assigned to it, or (2) it is the holder of the note.” Wells Fargo Bank v.
Rennert, 8th Dist. Cuyahoga No. 101454, 2014-Ohio-5292, ¶ 11, citing CitiMortgage,
Inc. v. Patterson, 2012-Ohio-5894, 984 N.E.2d 392, ¶ 21 (8th Dist.), citing Fed. Home
Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017, 979 N.E.2d
1214.
{¶37} Bayview therefore had standing and was entitled to enforce the note if it
established either that it was the holder of the note or it had been assigned the mortgage.
Patterson; U.S. Bank Natl. Assn. v. Gray, 10th Dist. Franklin No. 12AP-953,
2013-Ohio-3340, ¶ 27.
{¶38} A note secured by a mortgage is a negotiable instrument that is governed by
R.C. Chapter 1303. Wells Fargo Bank, N.A. v. Carver, 2016-Ohio-589, 60 N.E.3d 473,
¶ 14 (8th Dist.). Under R.C. 1303.31(A), three “persons” are entitled to enforce an
instrument: (1) the holder of the instrument; (2) a non-holder in possession of the
instrument who has the rights of a holder; and (3) a person not in possession of the
instrument who is entitled to enforce the instrument under R.C. 1303.38 or 1303.58(D).
R.C. 1301.201(B)(21)(a) defines a holder of a negotiable instrument as “[t]he person in
possession of a negotiable instrument that is payable either to bearer or to an identified
person that is the person in possession.” When an instrument is endorsed in blank, it is
payable to the bearer. R.C. 1303.25(B).
{¶39} Here, Bayview attached the note endorsed in blank, as well as a copy of the
assignments of mortgage to Bayview, to its complaint and the affidavit of Randall
Jackson in its motion for summary judgment. Jackson attested in his affidavit that
Bayview had been in possession of the note at least since the commencement of the
foreclosure action and the copy attached to his affidavit was a true and accurate copy of
the note in Bayview’s possession. Additionally, Bayview stated that in its discovery
responses to St. Cyr’s request for production of documents, it advised defense counsel
that it was in possession of the note and the note was available for inspection.
Therefore, by virtue of its possession of the note endorsed in blank, Bayview
demonstrated it is the holder of the note and entitled to enforce the note. See, e.g.,
Najar, 8th Dist. Cuyahoga No. 98502, 2013-Ohio-1657, at ¶ 62; Bank of N.Y. Mellon v.
Morgan, 2d Dist. Montgomery No. 25664, 2013-Ohio-4393, ¶ 50; BAC Home Loans
Servicing, L.P. v. Untisz, 11th Dist. Geauga No. 2012-G-3072, 2013-Ohio-993, ¶ 20; U.S.
Bank, N.A. v. Adams, 6th Dist. Erie No. E-11-070, 2012-Ohio-6253, ¶ 16-18.
{¶40} St. Cyr also challenges Bayview’s right to enforce the mortgage, contesting
the assignment of the mortgage as “bogus.” We first note that a mortgagor lacks
standing to challenge a mortgage assignment if the mortgagor is neither a party to, nor a
third-party beneficiary of, the assignment of the mortgage. Bank of New York Mellon v.
Froimson, 8th Dist. Cuyahoga No. 99443, 2013-Ohio-5574, ¶ 17. Here, Bayview
attached to its summary judgment a copy of the assignment of mortgage from MERS, as
nominee for Taylor, Bean & Whitaker Mortgage Corp. and its successors and assigns, to
BAC Home Loans Servicing, L.P., f.k.a., Countrywide Home Loans Servicing, L.P.; a
copy of the assignment of mortgage from Bank of America, N.A., successor by merger to
BAC Home Loans Servicing, L.P., f.k.a. Countrywide Home Loans Servicing, L.P. to the
Secretary of Housing and Urban Development (“HUD”); and a copy of the assignment of
mortgage from HUD to Bayview. St. Cyr was not a named party to any of the above
assignments, nor a third-party beneficiary of the assignments. He therefore lacked
standing to challenge the assignments or any of the circumstances upon which the
assignments were created.
{¶41} Moreover, the allegation of an improper assignment is irrelevant because,
under Ohio law, the mortgage “follows the note” it secures. Najar at ¶ 65, citing U.S.
Bank N.A. v. Marcino, 181 Ohio App.3d 328, 2009-Ohio-1178, 908 N.E.2d 1032, ¶ 52
(7th Dist.).
For nearly a century, Ohio courts have held that whenever a promissory
note is secured by a mortgage, the note constitutes the evidence of the debt,
and the mortgage is a mere incident to the obligation. Therefore, the
negotiation of a note operates as an equitable assignment of the mortgage,
even though the mortgage is not assigned or delivered.
(Citation omitted.) Marcino. Accordingly, the physical transfer of the note endorsed in
blank constitutes an equitable assignment of the mortgage regardless of whether the
mortgage is validly assigned. Najar; Marcino; see also Wells Fargo Bank, N.A. v. Byers,
10th Dist. Franklin No. 13AP-767, 2014-Ohio-3303.
{¶42} Finally, St. Cyr contends that Bayview has failed to establish it is entitled to
damages, stating that Bayview did not submit sufficient substantive evidence or a
competent, credible payment history. However, Bayview attached to its summary
judgment a copy of the payment history, and Jackson attests in his affidavit that the
attached payment history was a true and accurate representation of the account activity on
St. Cyr’s loan account. Jackson further attested to the default and the accuracy of the
notices of default served upon St. Cyr, as well as a “face to face” notice dated September
14, 2011. These documents, and the affidavit that authenticates them, established the
default and the amount due and owing as $104,717.43, with interest.
{¶43} In light of the foregoing, we find that Bayview provided evidence that it was
entitled to enforce the note before filing the complaint in foreclosure and there is no
genuine issue of material fact concerning its standing to commence this action as a real
party in interest. St. Cyr’s response to Bayview’s motion for summary judgment, in
which St. Cyr relies upon Bayview’s deemed admissions, challenges Bayview’s affidavit
in support of its motion for summary judgment, and relied upon his own unsupported
allegations, failed to meet his reciprocal burden to set forth specific facts showing there is
a genuine issue that remains to be litigated. Accordingly, the trial court properly granted
summary judgment in favor of Bayview and against St. Cyr.
{¶44} St. Cyr’s assignments of error are overruled.
{¶45} Judgment affirmed.
It is ordered that appellee recover of appellants costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing 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.
________________________________________
TIM McCORMACK, PRESIDING JUDGE
PATRICIA ANN BLACKMON, J., and
LARRY A. JONES, SR., J., CONCUR