Huntington Natl. Bank v. Brown

2014 Ohio 2649

• Court: Ohio Court of Appeals
• Decided: June 19, 2014
• Docket: 100567
• Status: Published

Opinion

[Cite as Huntington Natl. Bank v. Brown, 2014-Ohio-2649.]

Court of Appeals of Ohio EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA

JOURNAL ENTRY AND OPINION No. 100567

HUNTINGTON NATIONAL BANK PLAINTIFF-APPELLEE

vs.

BRUCE A. BROWN, ET AL. DEFENDANTS-APPELLANTS

JUDGMENT: AFFIRMED

Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-09-702894

BEFORE: Celebrezze, P.J., S. Gallagher, J., and Stewart, J.

RELEASED AND JOURNALIZED: June 19, 2014 FOR APPELLANT

Bruce A. Brown, pro se 820 West Superior Avenue Suite 840 Cleveland, Ohio 44113

ATTORNEYS FOR APPELLEE

Kriss D. Felty David M. Gauntner Felty & Lembright Co., L.P.A. 1500 West Third Street Suite 400 Cleveland, Ohio 44113 FRANK D. CELEBREZZE, JR., P.J.:

{¶1} Defendant-appellant, Bruce A. Brown, appeals from the trial court’s decision

granting summary judgment to plaintiff-appellee, Huntington National Bank

(“Huntington”). After a careful review of the record and relevant case law, we affirm the

trial court’s judgment.

I. Procedural and Factual History

{¶2} On January 16, 2008, appellant signed a promissory note in the principal

amount of $417,000 in favor of Real Estate Mortgage Corporation. The note was

secured by a mortgage, also dated January 16, 2008, and signed by appellant in favor of

Real Estate Mortgage Corporation, as lender, and Mortgage Electronic Registration

Systems, Inc. (“MERS”) as mortgagee and nominee for the lender. The mortgage

encumbered the property located at 6075 Penfield Lane in Solon, Ohio. The mortgage and note were subsequently assigned to Huntington on August 26, 2009. The assignment

was recorded in the Cuyahoga County Official Records on September 4, 2009.

{¶3} On August 31, 2009, Huntington commenced this foreclosure action as a

result of appellant’s default under the terms of the note and mortgage due to nonpayment.

The note and mortgage attached to Huntington’s complaint included a copy of a

mortgage assignment executed by Huntington Staff Officer Bret Pemoller on behalf of

MERS, which transferred the mortgage from MERS, as nominee for Real Estate

Mortgage Corporation, to Huntington.

{¶4} On October 7, 2009, the trial court stayed the case and referred the parties to

mediation. After mediation failed, the case was returned to the active docket in March

2010. On March 30, 2010, appellant filed an amended motion for summary judgment

arguing, inter alia, that Huntington was not a real party in interest in this foreclosure

proceeding.1 On May 25, 2010, the magistrate denied appellant’s amended motion for

summary judgment, finding that Huntington had standing to invoke the jurisdiction of the

court, “as the record reflects that [Huntington] received assignment of both the note and

the mortgage” prior to “the filing date of the complaint.”

{¶5} On June 4, 2010, Huntington filed a motion for summary judgment arguing

that it was entitled to judgment as a matter of law. In support of its motion, Huntington

attached Bret Pemoller’s affidavit.

Appellant’s original motion for summary judgment filed on March 22, 2010 was dismissed as 1

moot. {¶6} On June 30, 2010, appellant filed a renewed motion for summary judgment

arguing that (1) Huntington lacked standing to pursue the foreclosure action because it

failed to record the assignment of the note and mortgage prior to filing its complaint, and

(2) MERS lacked the authority to assign Huntington an interest in the note and mortgage.

On July 30, 2010, Huntington filed a brief in opposition to appellant’s motion for

summary judgment. Significantly, Huntington’s opposition brief included, for the first

time, the subject note, which contained an endorsement in blank.

{¶7} On December 1, 2011, the magistrate issued a decision denying summary

judgment in favor of Huntington and granting judgment in favor of appellant. In

reaching its judgment, the magistrate stated that it would not consider the additional

evidentiary materials attached to Huntington’s brief in opposition based on its July 1,

2010 order prohibiting any further extensions of time to file motions for summary

judgment beyond July 15, 2010. Thus, the magistrate concluded that without an

endorsement page containing either a specific endorsement to Huntington or an

endorsement in blank, Huntington failed to establish that it was the holder of the note at

the time its complaint was filed, and therefore lacked standing to pursue the foreclosure

action.

{¶8} On December 15, 2011, Huntington filed its objections to the magistrate’s

decision with the common pleas court. Huntington argued that the magistrate’s decision

to not consider the endorsement page attached to its brief in opposition improperly denied

Huntington the opportunity to respond to appellant’s renewed motion for summary judgment. On April 6, 2012, the trial court sustained Huntington’s objections, and the

matter was returned to the magistrate for further proceedings consistent with the trial

court’s order.

{¶9} On September 7, 2012, the magistrate issued a new decision granting

summary judgment in favor of Huntington. In his decision, the magistrate concluded that

he was required to consider the endorsement page of the note attached to Huntington’s

brief in opposition pursuant to Loc.R. 11.0(I)(1) of the Court of Common Pleas of

Cuyahoga County, General Division, which provides a party opposing summary

judgement with 30 days to file a response to the motion. Accordingly, the magistrate

found that Huntington held both the note and mortgage at the time the foreclosure action

was filed, and therefore had standing to invoke the jurisdiction of the court and was a real

party in interest. On September 12, 2012, appellant filed objections to the magistrate’s

decision, which were overruled by the trial court on August 27, 2013. On October 9,

2013, the trial court adopted the magistrate’s decision.2

{¶10} Appellant now brings this timely appeal, raising one assignment of error for

review.

II. Law and Analysis

While the instant action was pending, appellant, going by the name Amir Jamal Tauwab, 2

commenced a separate civil action against Huntington, Safeguard Properties, Premiere Properties of Central Ohio, and individual defendants Chad Lane and Jonathan Lozier on July 29, 2010, in Case No. CV-10-732900. Appellant alleged claims of trespass and conversion against defendants. On June 7, 2011, the trial court granted summary judgment in favor of defendants. The trial court’s judgment was affirmed by this court in Tauwab v. Huntington Bank, 8th Dist. Cuyahoga No. 96996, 2012-Ohio-923. {¶11} In his sole assignment of error, appellant argues that the trial court erred in

granting summary judgment in favor of Huntington.

{¶12} An appellate court reviews a decision granting summary judgment on a de

novo basis. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241

(1996). Summary judgment is properly granted when (1) there is no genuine issue as to

any material fact; (2) the moving party is entitled to judgment as a matter of law; and, (3)

reasonable minds can come to but one conclusion, and that conclusion is adverse to the

party against whom the motion for summary judgment is made. Civ.R. 56(C); State ex

rel. Duganitz v. Ohio Adult Parole Auth., 77 Ohio St.3d 190, 191, 672 N.E.2d 654 (1996).

A. Assignment of Mortgage

{¶13} In challenging the trial court’s judgment, appellant argues that MERS, in its

capacity as nominee and mortgagee for Real Estate Mortgage Corporation, lacked

authority to assign the mortgage to Huntington. Thus, appellant maintains that because

MERS had no authority to execute the assignment, Huntington lacked standing to enforce

the note and mortgage. Appellant’s argument is without merit.

{¶14} Appellant cites numerous out-of-state cases in support of his argument.

However, we are not bound by authorities outside of our jurisdiction. Moreover, Ohio

courts have consistently held that MERS has authority to assign a mortgage when it is

designated as both a nominee and mortgagee. Bank of Am., N.A. v. Harris, 8th Dist.

Cuyahoga No. 99272, 2013-Ohio-5749, ¶ 8 (“a party who receives an assignment of

mortgage from MERS as nominee has standing to foreclose on the mortgage when the borrower defaults on the loan”); BAC Home Loans Servicing, L.P. v. Hall, 12th Dist.

Warren No. CA2009-10-135, 2010-Ohio-3472, ¶ 5-25 (concluding that BAC was entitled

to judgment as the real party in interest where MERS, as a nominee, assigned the

mortgage at issue to BAC); Countrywide Home Loans Servicing, L.P. v. Shifflet, 3d Dist.

Marion No. 9-09-31, 2010-Ohio-1266, ¶ 9-17 (concluding that Countrywide was entitled

to judgment as the real party in interest where MERS, as a nominee, assigned the

mortgage to Countrywide); Deutsche Bank Natl. Trust Co. v. Ingle, 8th Dist. Cuyahoga

No. 92487, 2009-Ohio-3886, ¶ 4-18 (concluding Deutsche was entitled to judgment as the

real party in interest where MERS, as a nominee, assigned a mortgage deed to Deutsche).

{¶15} Applying the foregoing precedent to the case at hand, we find that MERS, as

the mortgagee and nominee under the mortgage, was empowered to assign said mortgage

and note and properly exercised that authority in favor of Huntington on August 26, 2009.

See Tauwab v. Huntington Bank, 8th Dist. Cuyahoga No. 96996, 2012-Ohio-923, ¶ 8.

B. Standing to Bring Foreclosure Action

{¶16} Next, appellant contends that summary judgment was inappropriate because

Huntington was not the holder of the note and mortgage at the time the foreclosure

complaint was filed. We disagree.

{¶17} In a foreclosure action, “a party 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.” 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.

{¶18} With respect to Huntington’s interest in the suit and standing to invoke the

jurisdiction of the trial court, this court has previously determined in appellant’s appeal

from his civil suit that Huntington was the proper holder of both the mortgage and note at

the time the complaint for foreclosure was filed against appellant on August 31, 2009.

Tauwab at ¶ 8. The record supports this court’s prior finding.

{¶19} In regard to the note, Huntington attached the affidavit of Huntington Staff

Officer Bret Pemoller, which averred that Huntington “acquired possession of and

became holder of the subject promissory note, indorsed in blank prior to the filing of this

Complaint, on January 31, 2008.” Under R.C. 1303.25(B), “[w]hen an instrument is

indorsed in blank, the instrument becomes payable to bearer and may be negotiated by

transfer of possession alone until specially indorsed.” R.C. 1301.201 provides that

“holder” means a “person in possession of a negotiable instrument that is payable * * * to

bearer[.]”

{¶20} In this matter, Huntington provided a copy of the note indorsed in blank by

Real Estate Mortgage Corporation as part of the summary judgment process. The note

was accompanied by the affidavit of a Huntington representative attesting to the fact that

the original note indorsed in blank had been in Huntington’s possession since January 31,

2008. Accordingly, Huntington presented sufficient evidentiary material demonstrating

that it was the holder of the note at the time it filed its foreclosure complaint. {¶21} While appellant claims that Huntington’s failure to attach the indorsement

page of the note to its original complaint is fatal, he is incorrect. Although a plaintiff must

establish that it was the holder of the note or mortgage at the time the foreclosure action

was filed, it need not present its proof “on the exact date that the complaint in foreclosure

is filed.” Bank of N.Y. Mellon v. Watkins, 10th Dist. Franklin No. 11AP-539,

2012-Ohio-4410, ¶ 18, citing Countrywide Home Loans v. Montgomery, 6th Dist. Lucas

No. L-09-1169, 2010-Ohio-693, ¶ 13. Rather, a plaintiff can offer additional proof after

the filing of the foreclosure action, including with its motion for summary judgment,

establishing that it became the holder of the note and mortgage prior to or at the time of

the filing of the foreclosure action. Deutsche Bank Natl. Trust Co. v. Najar, 8th Dist.

Cuyahoga No. 98502, 2013-Ohio-1657, ¶ 58. Here, the last page of the note bearing the

indorsement in blank was submitted by Huntington during the summary judgment

process.3 Thus, the trial court properly considered this additional evidence in concluding

that Huntington was the holder of the note at the time it filed its foreclosure complaint

against appellant.

{¶22} Further, Huntington attached the mortgage and an assignment of mortgage

dated August 26, 2009. The mortgage listed appellant as borrower, MERS as a “separate

corporation that is acting solely as a nominee for Lender and Lender’s successors and

assigns,” and Real Estate Mortgage Corporation as the Lender. The assignment stated

At oral argument, counsel for Huntington acknowledged that the failure to attach the 3

indorsement page to its original complaint was an oversight. that MERS, “acting solely as nominee for Real Estate Mortgage Corporation,” transferred

the mortgage to Huntington. Attached to the copy of the assignment document was a

written certification by a notary public that indicated that MERS representatives executed

the assignment instrument before the notary as nominee for Real Estate Mortgage

Corporation. Thus, the documents attached to Huntington’s complaint for foreclosure

established that the bank was the holder of the mortgage at the time the complaint was

filed.

{¶23} We note that Huntington’s failure to record the assignment of mortgage

before filing its complaint was not fatal to its foreclosure claim because all interest in the

note and mortgage had been assigned to Huntington on August 26, 2009, five days prior

to the filing of the complaint. Wells Fargo Bank, N.A. v. Stovall, 8th Dist. Cuyahoga No.

91802, 2010-Ohio-236, ¶ 17.

III. Conclusion

{¶24} Based on the foregoing, and consistent with this court’s previous

determination in Tauwab, we find that Huntington was the real party in interest, and

therefore had standing to bring this foreclosure action. Accordingly, the trial court did

not err in granting summary judgment in favor of Huntington.

{¶25} Appellant’s sole assignment of error is overruled.

{¶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 said 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.

FRANK D. CELEBREZZE, JR., PRESIDING JUDGE

MELODY J. STEWART, J., CONCURS; SEAN C. GALLAGHER, J., CONCURS IN JUDGMENT ONLY