JP Morgan Chase Bank v. Stevens

[Cite as JP Morgan Chase Bank v. Stevens, 2017-Ohio-7165.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 104835
JP MORGAN CHASE BANK
PLAINTIFF-APPELLEE
vs.
MICHAEL M. STEVENS
DEFENDANT-APPELLANT
JUDGMENT:
AFFIRMED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-13-803622
BEFORE: McCormack, P.J., Blackmon, J., and Jones, J.
RELEASED AND JOURNALIZED: August 10, 2017
FOR APPELLANT
Michael M. Stevens, pro se
1935 Coventry Road
Cleveland Heights, OH 44118
ATTORNEYS FOR APPELLEE
Ashlyn Heider
Matthew Murtland
Shapiro, Van Ess, Phillips and Barragate
4805 Montgomery Road, Suite 320
Norwood, OH 45212
Phillip C. Barragate
Shapiro, Van Ess, Phillips and Barragate
1100 Superior Ave., Suite 950
Cleveland, OH 44114
Joseph T. Chapman
Collection Enforcement Section
150 E. Gay Street, 21st Floor
Columbus, OH 43215
Daniel C. Gibson
Nelson M. Reid
Bricker & Eckler L.L.P.
100 South Third Street
Columbus, OH 43215
Marlon A. Primes
U.S. Attorney’s Office
U.S. Courthouse, #400
801 W. Superior Ave.
Cleveland, OH 44113
TIM McCORMACK, P.J.:
{¶1} Defendant-appellant Michael M. Stevens appeals from a judgment in
the Cuyahoga County Court of Common Pleas granting summary judgment in favor of
plaintiff-appellee J.P. Morgan Chase Bank, N.A. (“Chase”) regarding foreclosure of the
property located in Cleveland Heights, Ohio. For the reasons that follow, we affirm.
Procedural History and Substantive Facts
{¶2} On March 15, 2002, Stevens executed a promissory note in the original
principal amount of $110,000 in favor of Washington Mutual Bank (“WaMu”). The
note was secured by a mortgage against the Cleveland Heights property. The mortgage
was executed in favor of Mortgage Electronic Registration Systems, Inc. (“MERS”) as
nominee for WaMu and WaMu’s successors and assigns. Thereafter, MERS assigned
the mortgage to Chase.
{¶3} On March 25, 2013, Chase filed a complaint in foreclosure against Stevens,
seeking judgment on the note and foreclosure of the mortgage. Chase attached copies of
the note, the mortgage, and the assignment of the note and mortgage. Chase alleged that
it is entitled to enforce the note, the mortgage is a valid first lien upon the premises, and
Stevens was in default. According to Chase, Stevens failed to make a payment that was
due in September 2009 and has not subsequently made payments to bring the loan current.
Chase alleged that the total amount due and owing is $98,472.41, plus interest, from
August 2009. Stevens filed his answer to the complaint on May 28, 2013.
{¶4} On January 6, 2014, Chase filed a motion for summary judgment and
motion for default judgment. Chase attached the affidavit of a Chase vice president,
Samuel B. Mueller, in support of its summary judgment, along with a copy of the note,
the mortgage, and an assignment of the note and mortgage to Chase. Mueller attests that
the documents attached to the motion are true and correct copies of the note and mortgage
and that Chase is in possession of the original note and was in possession of the note prior
to commencement of the foreclosure action. Stevens filed an opposition to Chase’s
motion for summary judgment, attaching the affidavits of proffered experts, William J.
Paatalo and James Madison Kelley. In his response, Stevens challenges Chase’s
standing by asserting that the note is not the original document and the assignment from
MERS to Chase is invalid.
{¶5} On January 29, 2016, the magistrate issued a decision with findings of fact
and conclusions of law, determining that there is no genuine issue of material fact and
Chase is entitled to judgment as a matter of law. Specifically, in addressing Stevens’s
claim that the note is not authentic, the magistrate concluded:
Pursuant to R.C. 1303.36(A), in an action with respect to an instrument
such as a note and mortgage, a litigant must specifically deny in his
pleadings “the authenticity of, and authority to make, each signature” in
order to avoid the authenticity of that signature being “admitted.” * * *
Defendant Stevens does not dispute that he executed the note and does not
in his Answer specifically deny that the signature on the note is his. (Rather,
he expresses a belief or allegation that the note “bears a computer forgery of
Stevens’s signature.”) Such a defense, short of a denial, is not sufficient to
defeat the admission set forth in the civil rules. Further, the argument that
Chase is not in possession of the original note is expressly defeated by the
affidavit of Samuel B. Mueller, who, in attaching a true and accurate copy
of the original, testified on personal knowledge that Chase is “in possession
of the original note.” * * * The note is endorsed in blank by the original
lender. Thus, it is payable to bearer * * *.
{¶6} Additionally, with respect to Stevens’s challenge of the validity of the
assignment, the magistrate found that Stevens “ignore[d] the fact that it is the mortgage
assignment that transfers the rights of enforcement of the note and mortgage to Chase.”
The magistrate stated that the evidence of the transfer of a note, including through an
assignment of a mortgage, “that expresses an intent to transfer the right to enforce the
note as well, will suffice to establish holder status in both.” Thus, the magistrate
concluded that the assignment of the note and mortgage attached to Chase’s complaint
“clearly indicates that the mortgage is being assigned to Chase ‘together with the
promissory note secured thereby and referred to therein * * *.’”
{¶7} Finally, the magistrate determined that Stevens had no standing to challenge
the assignment, because he was not a party to it and his interests are not affected by it,
and the unrebutted evidence of the recorded assignment “clearly presents prima facie
evidence of the holder status of the mortgage.”
{¶8} Stevens filed objections to the magistrate’s decision, and Chase responded
to Stevens’s objections. On July 15, 2016, the trial court overruled the objections and
adopted the magistrate’s decision. In adopting the magistrate’s decision, the trial court
specifically addressed Stevens’s allegation that the note includes a “computer forgery,”
and the court noted that Stevens “fails to deny that he signed the note and that the
signature on the note is his.” The court also addressed Stevens’s purported experts who
attest to the alleged forgery. In so doing, the court determined that the proffered experts
were not qualified as experts under Evid.R. 702-705. The court also found the “factual
evidence” of two websites submitted in support of Paatalo’s legal conclusion insufficient.
{¶9} Regarding Stevens’s other proffered expert, James Kelley, the court stated:
Dr. Kelley attests that the attachments to plaintiff’s complaint and motion
for summary judgment are not the wet ink copy of the note, mortgage, and
mortgage assignment. He avers that the attachment is not the original note
but a facsimile thereof. It is customary that the court filings of the loan
documents are not the wet ink copies but duplicates of the originals
pursuant to Evid.R. 1003. Plaintiff’s affiant, Samuel B. Mueller, notably
attests that his review focused on “Chase’s records relating to the
borrower’s loan, including copies of the note and the mortgage.” (Aff. ¶ 5).
However, Mr. Mueller additionally attests that the exhibits attached to his
affidavit are true and correct copies of the note and mortgage (Aff. ¶ 5) and
that plaintiff * * * was in possession of the original note (Aff. ¶ 6).
The court stated that an affiant is not required to aver that he compared the mortgage loan
documents that are attached to his affidavit to the original documents, nor is he required
to explain the basis for his personal knowledge “where such knowledge can be reasonably
inferred based on the affiant’s position and other facts contained in the affidavit.” The
court concluded that Stevens’s proffered computer expert presented no facts that
“establish or infer fraud in the execution of the original loan documents.”
{¶10} Finally, the trial court adopted the magistrate’s conclusion that Stevens has
no standing to challenge the assignment, stating that the current law in this district holds
that a defendant who is not a party to an assignment cannot challenge the assignment.
Thus, the trial court found, Stevens cannot demonstrate any injury.
{¶11} Stevens now appeals, claiming the trial court erred in granting summary
judgment in favor of Chase.
Summary Judgment
{¶12} 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).
{¶13} 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.
{¶14} 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.
{¶15} 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
{¶16} Within his one assignment of error, Stevens advances several arguments.
Stevens contends that Chase failed to demonstrate it has a valid assignment of the note
and mortgage and therefore Chase failed to show it is a holder of the note “bearing the
original unaltered wet ink signature of [the] appellant.” Stevens also takes issue with
various discovery matters, arguing the court erred in not allowing him to depose Chase
regarding Mueller’s affidavit, in excluding the affidavit of his proffered expert, William
J. Paatalo, and in not allowing the defense offered by purported expert James Madison
Kelley. Finally, Stevens claims that Mueller’s affidavit lacked the proper foundation
because Mueller did not aver that he compared the original documents to the copies
attached to his affidavit.
{¶17} In first addressing Stevens’s argument concerning discovery matters, we are
mindful that the manner in which a trial court manages its dockets and controls discovery
rests completely within the discretion of the trial court. 6750 BMS, L.L.C. v. Drentlau,
2016-Ohio-1385, 62 N.E.3d 928, ¶ 18 (8th Dist.), 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. Additionally, a trial court’s decision to exclude expert
testimony will not be disturbed absent an abuse ofdiscretion that causes material
prejudice. Braxton v. Kilbane, 8th Dist. Cuyahoga No. 104166, 2017-Ohio-185, ¶ 9,
citing Krischbaum v. Dillon, 58 Ohio St. 3d 58, 66, 567 N.E.2d 1291 (1991).
{¶18} Here, Stevens claims that the trial court erred by not allowing him to
conduct the deposition of Chase vice president, Samuel Mueller. Stevens alleges that
Mueller’s affidavit lacks the proper foundation because Mueller failed to aver that he
compared the original note and mortgage to the copies attached to his affidavit.
According to Stevens, the court’s preventing Stevens from deposing Mueller was
therefore prejudicial.
{¶19} In support of his claim, Stevens attached to his brief in opposition to
Chase’s summary judgment motion an affidavit of former counsel, who states that
counsel has made three efforts to obtain the plaintiff’s deposition, and each time, the
plaintiff’s lawyer contacted Stevens’s attorney and advised him “that the deposition could
not go forward as planned.” This affidavit, however, is evidence only of counsel’s
attempts to obtain Mueller’s deposition; it is not evidence that the trial court prevented
Stevens from taking Mueller’s deposition. Additionally, there is no evidence that
Stevens ever filed a motion to compel Mueller’s deposition.
{¶20} Moreover, as we discuss later in this opinion, Mueller is not required to aver
that he compared the original documents to the copies that are attached to his affidavit.
Therefore, even if the court did not allow Stevens to depose Mueller in this regard,
Stevens cannot demonstrate that he was prejudiced by his failure to obtain Mueller’s
deposition.
{¶21} Stevens also claims that the trial court erred in excluding the testimony of
his proffered experts, Paatalo and Kelley. Paatalo was a mortgage broker and is a
private investigator. His testimony related to the issues of chain of title and assignment
of the mortgage. Kelley is an electrical and computer engineer. Kelley’s testimony
concerned the authenticity of the signature on the original loan documentation.
{¶22} In most cases, a trial court should admit expert testimony when the
testimony is material, relevant, and is admitted in accordance with Evid.R. 702.
Schwartz v. Honeywell Internatl., Inc., 2016-Ohio-3175, 66 N.E.3d 118 , ¶ 14 (8th Dist.),
appeal accepted, 148 Ohio St. 3d 1442, 2017-Ohio-1427, 72 N.E.3d 656. Evid.R. 702
governs the circumstances under which a witness may testify as an expert:
(A) The witness’ testimony either relates to matters beyond the
knowledge or experience possessed by lay persons or dispels a
misconception common among lay persons;
(B) The witness is qualified as an expert by specialized knowledge, skill,
experience, training, or education regarding the subject matter of the
testimony;
(C) The witness’ testimony is based on reliable scientific, technical, or
other specialized information.
The proffered expert testimony must satisfy all of the above criteria. Id.
{¶23} Thus, in accordance with this rule, a witness may testify as an expert if he is
qualified as an expert, the testimony relates to matters beyond the understanding of lay
persons, and the testimony is based upon reliable information. Azzano v.
O’Malley-Clements, 126 Ohio App. 3d 368, 373, 710 N.E.2d 373 (8th Dist.1998), citing
Nichols v. Hanzel, 110 Ohio App. 3d 591, 597, 674 N.E.2d 1237 (4th Dist.1996). “[T]he
expert must demonstrate some knowledge on the particular subject superior to that
possessed by an ordinary juror.” Azzano, citing Scott v. Yates, 71 Ohio St. 3d 219, 221,
643 N.E.2d 105 (1994).
{¶24} A determination of whether a witness is qualified to testify as an expert is a
matter within the discretion of the trial court and will not be reversed “‘unless there is a
clear showing’” that the trial court abused its discretion. State v. Lumbus,
2016-Ohio-380, 59 N.E.3d 580, ¶ 95 (8th Dist.), quoting State v. Wages, 87 Ohio
App.3d 780, 786, 623 N.E.2d 193 (8th Dist.1993), citing State v. Maupin, 42 Ohio St. 2d
473, 330 N.E.2d 708 (1975).
{¶25} Paatalo opines that the assignment of the mortgage to Chase was fraudulent.
In support of his opinion, Paatalo submits information obtained from websites
concerning the FDIC’s seizure of WaMu, Fannie Mae, and MERS. Paatalo concludes,
based upon his review of the websites, that because WaMu had been seized by the
government, it “ceased to exist” by the date of the assignment to Chase, and Fannie Mae
was the owner of the note and mortgage.
{¶26} However, as the trial court noted, the information obtained by Paatalo is
information available to the general public and not subject to a reasonable dispute. In
addition, Paatalo states in his affidavit that his testimony was based upon the above
websites, it involves “the factual aspects of * * * chain of title,” and his analyses “are not
scientific in nature.” Paatalo’s testimony was therefore not based upon any “scientific,
technical, or other specialized information.” See Evid.R. 702.
{¶27} Moreover, as we discuss later in this opinion, Stevens lacks the standing
necessary to challenge the assignment of the note and mortgage from MERS to Chase.
Therefore, Paatalo’s testimony is irrelevant and not material to the facts at hand. Even if
Stevens could contest the assignment, one’s ownership status is irrelevant to one’s
entitlement to foreclosure. Bank of Am., N.A. v. Calloway, 2016-Ohio-7959, 74 N.E.3d
843, ¶ 15 (8th Dist.). “A person may be a ‘person entitled to enforce’ the instrument
even though the person is not the owner of the instrument or is in wrongful possession of
the instrument.” R.C. 1303.31(B).
{¶28} Kelley attests that the documents attached to Chase’s complaint and motion
for summary judgment are not the “wet ink” copy of the note, mortgage, and mortgage
assignment; Stevens’s signature on the copy of the note is a “computer forgery”; and Liz
Papke’s endorsement is not authentic. The trial court found that “it is customary that the
court filings of the loan documents are not the wet ink copies but duplicates of the
originals,” Chase provided evidence, through Samuel Mueller’s affidavit, that Chase is in
possession of the original note, and Kelley presented no facts that establish or infer fraud
in the execution of the loan documents. As we discuss in this opinion, an affiant is not
required to compare the original note to the copies attached to the pleadings. Nor is he
required to explain the basis of his personal knowledge. Furthermore, Stevens lacks
standing to contest the assignment or its purported signatures. On this record, we cannot
find an abuse ofdiscretion that causes material prejudice when the trial court did not
allow the proffered expert testimony of Paatalo and Kelley.
{¶29} In support of its motion for summary judgment, Chase attached the affidavit
of Samuel B. Mueller, Chase vice president, a copy of the promissory note endorsed in
blank by Liz Papke, vice president of WaMu, the mortgage, and an assignment of the note
and mortgage to Chase.
{¶30} 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).
{¶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} Here, Mueller attests in his affidavit that he is authorized to make this
affidavit on behalf of Chase and he based his affidavit on his review of Chase’s business
records relating to the borrower’s loan, including copies of the note and mortgage, and his
personal knowledge of how the records are maintained. Mueller states that he
“personally verified the accuracy of the factual information in the affidavit” based upon
his review of Chase’s business records. Mueller also averred that the documents
attached to Chase’s motion for summary judgment are true and correct copies of the note
and mortgage and that Chase is in possession of the original note and was in possession
of the note prior to commencement of the foreclosure action. Mueller’s affidavit
therefore complies with Civ.R. 56(E).
{¶34} Stevens’s argument that Mueller’s affidavit lacks the proper foundation
because Mueller never averred that he compared the original note and mortgage to the
copies is without merit. This court has specifically rejected that argument in Wells
Fargo Bank, N.A. v. Hammond, 2014-Ohio-5270, 22 N.E.3d 1140 (8th Dist.):
As for the decision of the Fifth District Court of Appeals in [Wachovia
Bank of Delaware, N.A. v. Jackson, 5th Dist. Stark No. 2010-CA-000291,
2011-Ohio-3203 ¶ 46, 49], which provides that summary judgment
affidavits based on documents must include an averment that the affiant
compared copies of the documents attached to the affidavit with the
originals, this court has not adopted this as a requirement under Civ.R.
56(E), nor do we intend to do so because the Ohio Supreme Court has not
made this a requirement of Civ.R. 56(E).
(Citation omitted.) Hammond at ¶ 37, citing HSBC Mtge. Servs. v. Williams, 12th Dist.
Butler No. CA2013-09-174, 2014-Ohio-3778, ¶ 19 (stating this is not required under
State ex rel. Corrigan v. Seminatore, 66 Ohio St. 2d 459, 467, 423 N.E.2d 105 (1981));
Nationstar Mtge., L.L.C. v. Wagener, 8th Dist. Cuyahoga No. 101280, 2015-Ohio-1289, ¶
37; see also United States Bank N.A. v. Aguilar-Crow, 7th Dist. Mahoning No. 15 MA
0113, 2016-Ohio-5391, ¶ 31. “There is no requirement that an affiant explain the basis
for his personal knowledge where his 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. Perry, 8th Dist. Cuyahoga No. 99497, 2013-Ohio-5024, ¶ 15.
{¶35} Stevens also argues that Chase’s documentary evidence fails to establish that
Chase is the party entitled to enforce the note and mortgage against him. Stevens
specifically challenges Chase’s status as a holder of the note. In support, Stevens
questions the chain of note transfers and assignment of the mortgage.
{¶36} In a foreclosure action, a party may establish its interest in the suit, and thus
have standing to bring a foreclosure suit, when at the time it files its complaint in
foreclosure, it either (1) has had the mortgage assigned to it, or (2) is the holder of the
note. Calloway, 2016-Ohio-7959, 74 N.E.3d 843, at ¶ 13, 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} 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 nonholder 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).
{¶38} Chase therefore has standing and is entitled to enforce the note if it can
establish 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.
{¶39} Here, Chase attached a copy of the note endorsed in blank as well as a copy
of the assignment to its complaint and its motion for summary judgment. Mueller
attested in his affidavit that Chase has been in possession of the note since the
commencement of the foreclosure action and the copy attached to his affidavit is a true
and correct copy of the note in Chase’s possession. Therefore, by virtue of its
possession of the note indorsed in blank, Chase 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} To the extent that Stevens contests the assignment of the mortgage, his
argument is without merit. In his opposition, Stevens claims that the assignment was
“defective” in that it was signed by a “known robo-signor,” and he should be permitted to
contest the assignment on that basis. However, the law in this district provides 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. See, e.g.,
Everbank v. Katz, 8th Dist. Cuyahoga No. 100603, 2014-Ohio-4080, ¶ 8; Bank of New
York Mellon v. Froimson, 8th Dist. Cuyahoga No. 99443, 2013-Ohio-5574, ¶ 17; Bank of
N.Y. Mellon Trust Co., N.A. v. Unger, 8th Dist. Cuyahoga No. 97315, 2012-Ohio-1950, ¶
35. Where the note was indorsed in blank, “defenses relating to chain of title are null
and inapplicable, because it is immaterial how the person became the holder of the note.”
Bank of Am. N.A. v. Farris, 2015-Ohio-4980, 50 N.E.3d 1043, ¶ 27 (8th Dist.), citing
Froimson.
{¶41} Here, Chase attached to its summary judgment motion a copy of the
assignment from MERS, as nominee for WaMu, to Chase. Stevens is not a party to the
above assignment, nor a third-party beneficiary of the assignment. Nor does Stevens
claim he was injured as a result of the assignment. Accordingly, he fails to demonstrate
any injury and therefore lacks standing to challenge the assignment or any of the
circumstances upon which the assignment was created.
{¶42} Moreover, the allegation of an improper assignment is irrelevant because,
under Ohio law, the mortgage “follows the note” it secures. Najar, 8th Dist. Cuyahoga
No. 98502, 2013-Ohio-1657, at ¶ 65, citing U.S. Bank N.A. v. Marcino, 181 Ohio App. 3d
328, 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.
(Citations omitted.) Marcino at ¶ 52. Accordingly, the physical transfer of the note
indorsed in blank constitutes an equitable assignment of the mortgage regardless of
whether the mortgage is validly assigned. Najar; Marcino; see also, e.g., Wells Fargo
Bank, N.A. v. Byers, 10th Dist. Franklin No. 13AP-767, 2014-Ohio-3303.
{¶43} In light of the foregoing, we find that Chase has 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. The
undisputed evidence shows that $98,472.41 plus interest was due on the note. Stevens’s
opposition to Chase’s motion for summary judgment, in which he relies largely upon
inadmissible expert testimony and arguments in favor of changing the law in this district,
failed to meet his reciprocal burden to set forth specific facts showing there is a genuine
issue of material fact that remains to be litigated. Accordingly, the trial court properly
granted summary judgment in Chase’s favor.
{¶44} Stevens’s assignment of error is overruled.
{¶45} Judgment affirmed.
It is ordered that appellee recover of appellant 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