[Cite as GMAC Mtge., L.L.C. v. Waller, 2013-Ohio-4376.]
Court of Appeals of Ohio EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION No. 99457
GMAC MORTGAGE, L.L.C.
PLAINTIFF-APPELLEE
vs.
CHARLES D. WALLER, ET AL. DEFENDANTS-APPELLANTS
JUDGMENT: AFFIRMED
Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-763264
BEFORE: Stewart, A.J., Rocco, J., and E.T. Gallagher, J.
RELEASED AND JOURNALIZED: October 3, 2013 FOR APPELLANTS
Charles D. Waller, pro se Michelle Waller, pro se 7492 Prairie Dune Court Solon, OH 44139
ATTORNEYS FOR APPELLEE GMAC MORTGAGE, L.L.C.
James S. Wertheim Monica Levine Lacks McGlinchey Stafford, P.L.L.C. 25550 Chagrin Boulevard, Suite 406 Cleveland, OH 44122
Matthew I. McKelvey Lerner Sampson & Rothfuss P.O. Box 5480 Cincinnati, OH 45201
ATTORNEYS FOR APPELLEES CITY OF CLEVELAND HTS., HUNTINGTON NATIONAL BANK, AND PNC BANK, N.A.
W. Cory Phillips Sara M. Donnersbach Robert B. Weltman Weltman, Weinberg & Reis Co., L.P.A. Lakeside Place, Suite 200 323 W. Lakeside Avenue Cleveland, OH 44113
ATTORNEY FOR APPELLEE DOMESTIC LINEN SUPPLY & LAUNDRY CO.
James G. Kozelek Weltman, Weinberg & Reis Co., L.P.A. 175 S. Third Street, Suite 900 Columbus, OH 43215
ATTORNEY FOR APPELLEE CRANBERRY FINANCIAL, L.L.C. John E. Haller Shumaker, Loop & Kendrick, L.L.P. 41 S. High Street, Suite 2400 Columbus, OH 43215
ATTORNEY FOR APPELLEE H & M LANDSCAPING
Mark I. Wachter Wachter Kurant, L.L.C. 30195 Chagrin Boulevard 300 Pepper Pike Place Cleveland, OH 44124
ATTORNEY FOR APPELLEE SIGNATURE OF SOLON MASTER ASSOCIATION
Charles P. Royer McCarthy, Lebit, Crystal & Liffman Co., L.P.A. 101 W. Prospect Avenue, Suite 1800 Cleveland, OH 44115
ATTORNEY FOR APPELLEE STATE OF OHIO, DEPARTMENT OF TAXATION
Amy Keller Kaufman Ohio Attorney General Revenue Recovery 150 E. Gay Street, 21st Floor Columbus, OH 43215
FOR ARROW FINANCIAL SERVICES, L.L.C.
Arrow Financial Services, L.L.C. Assignee of HSBC Bank Nevada N.A. c/o CT Corporation System 5996 N. Touhy Avenue Niles, IL 60714 MELODY J. STEWART, A.J.:
{¶1} This case came to be heard upon the accelerated calendar pursuant to App.R.
11.1 and Loc.R.11.1.
{¶2} Husband and wife Charles and Michelle Waller appeal the grant of summary
judgment in favor of appellee GMAC Mortgage, L.L.C. in a foreclosure action filed
against them. In the Wallers’ sole assignment of error, they argue that the trial court
erred by granting summary judgment in favor of GMAC because it did not have standing
to bring this action against them. For the reasons that follow, we affirm.
{¶3} In July 2006, Charles Waller borrowed $739,200 from Beach First National
Bank in order to finance the purchase of a property on Prairie Dune Court in Solon, Ohio.
He signed an adjustable rate note and secured the loan with a mortgage. The mortgage
designated Mortgage Electronic Registration Systems, Inc. (“MERS”) as nominee for
Beach First National Bank.
{¶4} On August 31, 2011, GMAC filed a complaint in foreclosure against the
Wallers after they fell behind in their mortgage payments. The complaint was amended
on September 26, 2011. Attached to the amended complaint was a copy of the adjustable
rate note and a prepayment addendum to the note signed by Charles Waller. Attached to
the note were two allonges containing a total of three endorsements. The first allonge
contained two endorsements: one by Beach First National Bank to Greenpoint Mortgage
Funding, Inc. and the other endorsed in blank by Greenpoint. The second allonge
contained one endorsement from Greenpoint to GMAC. Also attached to the complaint was a copy of a loan modification agreement from GMAC signed by both Charles and
Michelle Waller, a copy of the mortgage, and a copy of the assignment of the mortgage
from MERS, as nominee for Beach First National Bank, to GMAC.
{¶5} On August 16, 2012, the Wallers filed a motion for summary judgment
against GMAC. On September 18, 2012, GMAC filed a motion for summary judgment
against the Wallers. On October 25, 2012, the magistrate granted GMAC’s motion and
denied the Wallers’ motion. The Wallers filed objections to the magistrate’s decision,
but those objections were overruled and the decision was adopted by the trial court on
November 19, 2012. On appeal, the Wallers argue that summary judgment in favor of
GMAC is improper.
{¶6} Under Civ.R. 56(C), summary judgment is proper when: (1) no genuine
issue as to any material fact remains to be litigated; (2) the moving party is entitled to
judgment as a matter of law; and (3) it appears from the evidence that reasonable minds
can come to but one conclusion, and viewing such evidence most strongly in favor of the
party against whom the motion for summary judgment is made, the conclusion is adverse
to that party. An appellate court reviews a trial court’s decision granting summary
judgment de novo. Huntington Natl. Bank v. Blount, 8th Dist. Cuyahoga No. 98514,
2013-Ohio-3128, 10, citing Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105,
1996-Ohio-336, 671 N.E.2d 241.
{¶7} The Wallers’ basis for arguing that GMAC lacks standing to file this
foreclosure action is unclear from their appellate brief. To the best of our understanding, the Wallers challenge GMAC’s right to foreclose based on invalid assignments of both
the note and mortgage. However, we find that GMAC demonstrated that both the note
and the mortgage were properly assigned to GMAC, thus proving it has standing to
foreclose.
{¶8} Where homeowners are in default on a loan, they are subject to foreclosure
proceedings by the holder of the note. Bridge v. Aames Capital Corp., N.D.Ohio No.
1:09 CV 2947, 2010 U.S. Dist. LEXIS 103154, *12 (Sept. 29, 2010). With respect to the
debt owed by the homeowners under the mortgage contract, the specific holder of the note
is of no consequence. Id. See also Bank of N.Y. Mellon Trust Co., N.A. v. Unger, 8th
Dist. Cuyahoga No. 97315, 2012-Ohio-1950.
{¶9} In this case, the chain of custody of both the note and mortgage establish
GMAC’s right to foreclosure. The allonges attached to the complaint demonstrate that
the note was properly assigned from Beach First National Bank to Greenpoint, then from
Greenpoint to GMAC. Likewise, the mortgage assignment also attached to the
complaint shows the mortgage was assigned from MERS, as nominee for Beach First
National Bank, to GMAC.
{¶10} Furthermore, the Wallers’ assertion that MERS’ assignment of the mortgage
is unenforceable because MERS was never the holder of the note is erroneous. Ohio
courts have held that a party who receives an assignment of mortgage from MERS as
nominee has standing to foreclosure on the mortgage when the borrower defaults on the
loan. See Deutsche Bank Natl. Trust Co. v. Ingle, 8th Dist. Cuyahoga No. 92487, 2009-Ohio-3886, BAC Home Loans Servicing, L.P. v. Hall, 12th Dist. Warren No.
CA2009-10-135, 2010-Ohio-3472. Deutsche Bank Natl. Trust Co. v. Traxler, 12th Dist.
Warren No. 09CA009739, 2010-Ohio-3940.
{¶11} Lastly, the Wallers argue that the assignment of the note and mortgage is
invalid because these assignments took place after the complaint was filed, and that the
mortgage was never recorded with the county recorder’s office. This argument fails
because both the note and the mortgage were assigned before the filing of the complaint,
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[Cite as GMAC Mtge., L.L.C. v. Waller, 2013-Ohio-4376.]
Court of Appeals of Ohio EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION No. 99457
GMAC MORTGAGE, L.L.C.
PLAINTIFF-APPELLEE
vs.
CHARLES D. WALLER, ET AL. DEFENDANTS-APPELLANTS
JUDGMENT: AFFIRMED
Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-763264
BEFORE: Stewart, A.J., Rocco, J., and E.T. Gallagher, J.
RELEASED AND JOURNALIZED: October 3, 2013 FOR APPELLANTS
Charles D. Waller, pro se Michelle Waller, pro se 7492 Prairie Dune Court Solon, OH 44139
ATTORNEYS FOR APPELLEE GMAC MORTGAGE, L.L.C.
James S. Wertheim Monica Levine Lacks McGlinchey Stafford, P.L.L.C. 25550 Chagrin Boulevard, Suite 406 Cleveland, OH 44122
Matthew I. McKelvey Lerner Sampson & Rothfuss P.O. Box 5480 Cincinnati, OH 45201
ATTORNEYS FOR APPELLEES CITY OF CLEVELAND HTS., HUNTINGTON NATIONAL BANK, AND PNC BANK, N.A.
W. Cory Phillips Sara M. Donnersbach Robert B. Weltman Weltman, Weinberg & Reis Co., L.P.A. Lakeside Place, Suite 200 323 W. Lakeside Avenue Cleveland, OH 44113
ATTORNEY FOR APPELLEE DOMESTIC LINEN SUPPLY & LAUNDRY CO.
James G. Kozelek Weltman, Weinberg & Reis Co., L.P.A. 175 S. Third Street, Suite 900 Columbus, OH 43215
ATTORNEY FOR APPELLEE CRANBERRY FINANCIAL, L.L.C. John E. Haller Shumaker, Loop & Kendrick, L.L.P. 41 S. High Street, Suite 2400 Columbus, OH 43215
ATTORNEY FOR APPELLEE H & M LANDSCAPING
Mark I. Wachter Wachter Kurant, L.L.C. 30195 Chagrin Boulevard 300 Pepper Pike Place Cleveland, OH 44124
ATTORNEY FOR APPELLEE SIGNATURE OF SOLON MASTER ASSOCIATION
Charles P. Royer McCarthy, Lebit, Crystal & Liffman Co., L.P.A. 101 W. Prospect Avenue, Suite 1800 Cleveland, OH 44115
ATTORNEY FOR APPELLEE STATE OF OHIO, DEPARTMENT OF TAXATION
Amy Keller Kaufman Ohio Attorney General Revenue Recovery 150 E. Gay Street, 21st Floor Columbus, OH 43215
FOR ARROW FINANCIAL SERVICES, L.L.C.
Arrow Financial Services, L.L.C. Assignee of HSBC Bank Nevada N.A. c/o CT Corporation System 5996 N. Touhy Avenue Niles, IL 60714 MELODY J. STEWART, A.J.:
{¶1} This case came to be heard upon the accelerated calendar pursuant to App.R.
11.1 and Loc.R.11.1.
{¶2} Husband and wife Charles and Michelle Waller appeal the grant of summary
judgment in favor of appellee GMAC Mortgage, L.L.C. in a foreclosure action filed
against them. In the Wallers’ sole assignment of error, they argue that the trial court
erred by granting summary judgment in favor of GMAC because it did not have standing
to bring this action against them. For the reasons that follow, we affirm.
{¶3} In July 2006, Charles Waller borrowed $739,200 from Beach First National
Bank in order to finance the purchase of a property on Prairie Dune Court in Solon, Ohio.
He signed an adjustable rate note and secured the loan with a mortgage. The mortgage
designated Mortgage Electronic Registration Systems, Inc. (“MERS”) as nominee for
Beach First National Bank.
{¶4} On August 31, 2011, GMAC filed a complaint in foreclosure against the
Wallers after they fell behind in their mortgage payments. The complaint was amended
on September 26, 2011. Attached to the amended complaint was a copy of the adjustable
rate note and a prepayment addendum to the note signed by Charles Waller. Attached to
the note were two allonges containing a total of three endorsements. The first allonge
contained two endorsements: one by Beach First National Bank to Greenpoint Mortgage
Funding, Inc. and the other endorsed in blank by Greenpoint. The second allonge
contained one endorsement from Greenpoint to GMAC. Also attached to the complaint was a copy of a loan modification agreement from GMAC signed by both Charles and
Michelle Waller, a copy of the mortgage, and a copy of the assignment of the mortgage
from MERS, as nominee for Beach First National Bank, to GMAC.
{¶5} On August 16, 2012, the Wallers filed a motion for summary judgment
against GMAC. On September 18, 2012, GMAC filed a motion for summary judgment
against the Wallers. On October 25, 2012, the magistrate granted GMAC’s motion and
denied the Wallers’ motion. The Wallers filed objections to the magistrate’s decision,
but those objections were overruled and the decision was adopted by the trial court on
November 19, 2012. On appeal, the Wallers argue that summary judgment in favor of
GMAC is improper.
{¶6} Under Civ.R. 56(C), summary judgment is proper when: (1) no genuine
issue as to any material fact remains to be litigated; (2) the moving party is entitled to
judgment as a matter of law; and (3) it appears from the evidence that reasonable minds
can come to but one conclusion, and viewing such evidence most strongly in favor of the
party against whom the motion for summary judgment is made, the conclusion is adverse
to that party. An appellate court reviews a trial court’s decision granting summary
judgment de novo. Huntington Natl. Bank v. Blount, 8th Dist. Cuyahoga No. 98514,
2013-Ohio-3128, 10, citing Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105,
1996-Ohio-336, 671 N.E.2d 241.
{¶7} The Wallers’ basis for arguing that GMAC lacks standing to file this
foreclosure action is unclear from their appellate brief. To the best of our understanding, the Wallers challenge GMAC’s right to foreclose based on invalid assignments of both
the note and mortgage. However, we find that GMAC demonstrated that both the note
and the mortgage were properly assigned to GMAC, thus proving it has standing to
foreclose.
{¶8} Where homeowners are in default on a loan, they are subject to foreclosure
proceedings by the holder of the note. Bridge v. Aames Capital Corp., N.D.Ohio No.
1:09 CV 2947, 2010 U.S. Dist. LEXIS 103154, *12 (Sept. 29, 2010). With respect to the
debt owed by the homeowners under the mortgage contract, the specific holder of the note
is of no consequence. Id. See also Bank of N.Y. Mellon Trust Co., N.A. v. Unger, 8th
Dist. Cuyahoga No. 97315, 2012-Ohio-1950.
{¶9} In this case, the chain of custody of both the note and mortgage establish
GMAC’s right to foreclosure. The allonges attached to the complaint demonstrate that
the note was properly assigned from Beach First National Bank to Greenpoint, then from
Greenpoint to GMAC. Likewise, the mortgage assignment also attached to the
complaint shows the mortgage was assigned from MERS, as nominee for Beach First
National Bank, to GMAC.
{¶10} Furthermore, the Wallers’ assertion that MERS’ assignment of the mortgage
is unenforceable because MERS was never the holder of the note is erroneous. Ohio
courts have held that a party who receives an assignment of mortgage from MERS as
nominee has standing to foreclosure on the mortgage when the borrower defaults on the
loan. See Deutsche Bank Natl. Trust Co. v. Ingle, 8th Dist. Cuyahoga No. 92487, 2009-Ohio-3886, BAC Home Loans Servicing, L.P. v. Hall, 12th Dist. Warren No.
CA2009-10-135, 2010-Ohio-3472. Deutsche Bank Natl. Trust Co. v. Traxler, 12th Dist.
Warren No. 09CA009739, 2010-Ohio-3940.
{¶11} Lastly, the Wallers argue that the assignment of the note and mortgage is
invalid because these assignments took place after the complaint was filed, and that the
mortgage was never recorded with the county recorder’s office. This argument fails
because both the note and the mortgage were assigned before the filing of the complaint,
and additionally the mortgage was recorded with the county recorder’s office.
{¶12} In Fed. Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13,
2012-Ohio-5017, 979 N.E.2d 1214, the Supreme Court determined that standing to sue is
required to invoke the jurisdiction of the common pleas court and is determined at the
commencement of a suit. Additionally, the court stated that post-filing events attempting
to cure standing may be disregarded. Id. at 24-26. This court reiterated the
requirements to establish standing in a foreclosure action in CitiMortgage, Inc. v.
Patterson, 8th Dist. Cuyahoga No. 98360, 2012-Ohio-5894. In Patterson, we held that a
party who either has a mortgage assignment or is the holder of the note at the time the
complaint is filed has the requisite standing to establish an interest in the suit and invoke
the jurisdiction of the court. Id. at 21.
{¶13} In this case, the record shows that the note was assigned from Greenpoint to
GMAC in July 2004, and the mortgage was assigned to GMAC from MERS in July
2007 and subsequently recorded. These assignments and the recording predate the August 2011 filing of the original complaint, and the September 2011 filing of the
amended complaint. Therefore, the Wallers’ argument is without merit. Moreover,
even if the mortgage had not been recorded, the lack of recording has no bearing on
GMAC’s enforcement rights. See United States Bank Natl. Assn. v. Morales, 11th Dist.
Portage No. 2009-P-0012, 2009-Ohio-5635, 32 (the recording of an assignment is not a
condition precedent to the right of foreclosure).
{¶14} Lastly, the Wallers claim that the mortgage assignment is defective. In
their brief, the Wallers state that Shellie Hill, who signed the assignment on behalf of
MERS as the “Assistant Secretary,” is really an employee of GMAC misrepresenting her
identity for the sole purpose of this litigation. The Wallers do not explain the
significance of this assertion, so we summarily reject it. See App.R. 16(A)(7).
{¶15} Judgment affirmed.
It is ordered that appellee recover of appellants its 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 Cuyahoga
County Court of Common Pleas 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.
MELODY J. STEWART, ADMINISTRATIVE JUDGE KENNETH A. ROCCO, J., and EILEEN T. GALLAGHER, J., CONCUR