JP Morgan Chase Bank, N.A. v. Loseke

2021 Ohio 68, 166 N.E.3d 676

• Court: Ohio Court of Appeals
• Decided: January 14, 2021
• Docket: 109562
• Status: Published

Opinion

[Cite as JP Morgan Chase Bank, N.A. v. Loseke, 2021-Ohio-68.]

COURT OF APPEALS OF OHIO

EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA

JP MORGAN CHASE BANK, N.A., :

Plaintiff-Appellee, : No. 109562 v. :

NANCY L. LOSEKE, ET AL., :

Defendants-Appellants. :

JOURNAL ENTRY AND OPINION

JUDGMENT: AFFIRMED RELEASED AND JOURNALIZED: January 14, 2021

Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-18-895511

Appearances:

Blank Rome, L.L.P., William L. Purtell and John R. Wirthlin, for appellee.

James S. Wertheim, L.L.C., and James S. Wertheim, for appellant.

EILEEN A. GALLAGHER, J.:

Defendant-appellant Nancy Loseke appeals from the trial court’s

judgment granting summary judgment and decree of foreclosure to plaintiff-

appellee JP Morgan Chase Bank, N.A. We affirm. Assignment of Error:

The Trial Court erred in granting summary judgment to Plaintiff as the evidence, construed most strongly in favor of Defendant, clearly sets forth genuine issues of material fact.

Background

On January 20, 1998, Loseke executed a note payable to Merrill

Lynch Credit Corporation for the principal amount of $325,000 plus a

“fixed/adjustable” interest rate. The note recognizes that Merrill Lynch “may

transfer this Note” and further, recognizes that “anyone who takes this Note by

transfer and who is entitled to receive payments under this Note is called the ‘Note

Holder.”’ The note provides that failure to pay the full monthly payment by the due

date results in default and includes an acceleration clause entitling the holder, upon

notice, to demand full payment of the unpaid principal and interest. Merrill Lynch

indorsed the note in blank.

On the same day, to secure the note, Loseke executed an open-end

mortgage on 135 West Juniper Lane, Moreland Hills, Ohio in favor of Merrill Lynch.

The mortgage defines Loseke as a jointly and severally liable mortgagor. It requires

timely payments and includes an acceleration clause, effective in case of default. The

mortgage provides that “the Note or a partial interest in the Note (together with this

Security Instrument) may be sold one or more times without prior notice to

Borrower.” On September 25, 2001, Merrill Lynch assigned the mortgage to

Cendant Mortgage Corporation. Cendant subsequently changed its name to PHH

Mortgage Corporation.

Loseke defaulted on her payment of the note by failing to submit her

July 2017 payment. Loseke tendered her last payment on August 1, 2017 which was

returned due to insufficient funds and has made no payment since. On August 18,

2017, PHH mailed Loseke a demand letter and notice of default, informing her that

failure to cure the default by September 22, 2017, would result in acceleration and

initiation of foreclosure. The balance due on the note was $200,539.41. From

June 1, 2017, to February 1, 2018, the interest rate on the note was 3.625 percent.

From March 1, 2018, to October 11, 2018, the interest rate on the note was 4.5

percent.

On December 17, 2017, PHH assigned the mortgage to PNC Bank N.A.

On February 6, 2018, PNC assigned the mortgage to JPM Chase.

JPM Chase filed its complaint “for Money Judgment, Foreclosure and

Relief” on April 2, 2018. To the complaint, JPM Chase attached (1) a copy of the

original note executed by Loseke and payable to Merrill Lynch, (2) a copy of the

original open-end mortgage provided to Merrill Lynch to secure the note and (3) the

three properly recorded mortgage assignments, including the most recent to JPM

Chase. Loseke answered. JPM Chase moved for summary judgment, attaching

those same documents to its motion and otherwise supplementing the record with

documents and affidavits from its counsel, a JPM Chase representative and a loan servicer representative. Loseke opposed the motion, basing her opposition entirely

on unsubstantiated claims; she offered no evidence of her own. JPM Chase filed a

reply brief.

The magistrate determined that Chase was entitled to summary

judgment and issued a decision containing factual findings and legal conclusions.

The magistrate found from the evidence presented that Loseke executed a note and

defaulted on the payments due on the note. The magistrate further found that the

amount due on the note was accelerated pursuant to the note’s terms and that

accordingly, Loseke owed JPM Chase $200,539.41 on the note plus 4.5 percent

annual interest from June 1, 2017, and as adjusted pursuant to the terms of the note.

The magistrate found that to secure payment of the note Loseke

executed and delivered a mortgage deed on the West Juniper Lane property, that

the mortgage was recorded and thus became a valid first lien subject to the treasurer.

The magistrate further found that the mortgage was assigned to JPM Chase, that

Loseke defaulted on payment as required by its terms and, as such, JPM Chase was

entitled to foreclosure.

The trial court adopted the magistrate’s decision, rendering judgment

in favor of JPM Chase and against Loseke in the amount of $200,539.42 plus

interest at the annual rate of 4.5 percent from June 1, 2017, and further, unless

Loseke paid the full amount due plus associated costs within three days of the court’s

decision, the property would be foreclosed and sold to satisfy the debt. Law and Analysis

Under Civ.R. 56, summary judgment is appropriate when no genuine

issue exists as to any material fact and, viewing the evidence most strongly in favor

of the nonmoving party, reasonable minds can reach only one conclusion, namely

one adverse to the nonmoving party that entitles the moving party to judgment as a

matter of law. Bank of New York Mellon v. Fisher, 8th Dist. Cuyahoga No. 108855,

2020-Ohio-4742, ¶ 12, quoting Temple v. Wean United, Inc., 50 Ohio St.2d 317, 327,

364 N.E.2d 267 (1977). We review the grant of summary judgment de novo. Bank

of Am., N.A. v. Adams, 8th Dist. Cuyahoga No. 101056, 2015-Ohio-675, ¶ 4.

On a motion for summary judgment, the moving party carries the

initial burden of identifying specific facts in the record that demonstrate entitlement

to summary judgment. Fisher at ¶ 13, citing Dresher v. Burt, 75 Ohio St.3d 280,

292-293, 662 N.E.2d 264 (1996). If the moving party fails to meet this initial

burden, summary judgment is inappropriate. Id., citing Dresher at 293. If the

moving party meets this burden, the nonmoving party has the reciprocal burden to

point to evidence of specific facts in the record demonstrating the existence of a

genuine issue of material fact for trial. Id., citing Dresher at 293. Summary

judgment is appropriate if the nonmoving party fails to meet this burden. Id., citing

Dresher at 293.

In a foreclosure action, summary judgment is appropriate if the

plaintiff establishes: (1) it is the holder of both the note and the mortgage or may

otherwise enforce the instrument, (2) the chain of assignments and transfers if it is not the original mortgagee, (3) the mortgagor is in default, (4) all conditions

precedent have been met and (5) the amount of principal and interest due.

MorEquity, Inc. v. Gombita, 2018-Ohio-4860, 125 N.E.3d 300, ¶ 14 (8th Dist.).

In her assignment of error, Loseke argues that the court erred by

granting JPM Chase summary judgment for two reasons: (1) JPM Chase failed to

establish standing where it failed to prove who owns the note and has the right to

foreclosure, and (2) JPM Chase failed to establish the amount of principal and

interest due. We address each claim in turn.

Standing

“Standing to commence a foreclosure action requires that the plaintiff

hold the note and have an interest in the mortgage when the foreclosure complaint

is filed.” MorEquity, Inc at ¶ 33, citing Fannie Mae v. Hicks, 2016-Ohio-8484, 77

N.E.3d 380, ¶ 4, fn. 2 (8th Dist.). In a foreclosure action, the real party in interest is

the current holder of the note and mortgage. Id.

“A note secured by a mortgage is a negotiable instrument that is

governed by R.C. Chapter 1303.” Id. at ¶ 34, citing Wells Fargo Bank, N.A. v.

Carver, 2016-Ohio-589, 60 N.E.3d 473, ¶ 14 (8th Dist.). R.C. 1303.31(A)(1) entitles

the holder of an instrument to enforce the instrument. Id. A “holder” includes a

person possessing a negotiable instrument payable to “bearer.” R.C.

1301.201(B)(21)(a); id.

Here, as stated, Loseke executed her note in favor of Merrill Lynch.

By virtue of Merrill Lynch’s blank indorsement on the note, it became payable to the bearer and, thus, negotiable by transfer of possession alone. R.C. 1303.25(B);

Gombita at ¶ 35. As such, by virtue of JPM Chase’s undisputed possession of the

note indorsed in blank it is a holder and had standing to enforce the note.

As to the mortgage, this court has observed that a defendant in a

foreclosure action lacks standing to challenge the validity of a mortgage assignment

where the defendant is not a party to the assignment. See, e.g., Gombita at ¶ 38,

citing Bank of New York Mellon Trust Co. v. Unger, 8th Dist. Cuyahoga No. 97315,

2012-Ohio-1950; see also Nationstar Mtge. L.L.C. v. Dimasi, 8th Dist. Cuyahoga

No. 102985, 2016-Ohio-3057, ¶ 16 (“[A] borrower lacks standing to challenge the

mortgage assignment because the mortgage assignment does not alter the

borrower’s obligations under the note or mortgage.”). Nevertheless, we note that

the record reflects that JPM Chase was assigned the mortgage on February 6, 2018,

and that it was recorded the same day, prior to April 2, 2018, when JPM Chase filed

its complaint. Moreover, we reject Loseke’s unsubstantiated claim that “there is a

clear gap in the chain of title,” where the undisputed evidence in the record

establishes the validity of the three mortgage assignments.

Accordingly, based on the evidence attached to its complaint and

motion for summary judgment establishing JPM Chase was the note holder and

assignee of the mortgage at the time it filed its complaint, we conclude that JPM

Chase had standing to bring this action. Amount of Principal and Interest Due

A plaintiff seeking summary judgment in a foreclosure action must

establish the amount of principal and interest due. Gombita at ¶ 14

To establish the amount of principal and interest due, JPM Chase

included affidavits of assistant vice presidents of the loan servicer as well as the

bank. It established each person was competent to testify to matters stated in each

respective affidavit. See Civ.R. 56(E).

Sharon Feeley, a PHH assistant vice president averred that PHH is

the servicer of Loseke’s loan records as they have been maintained by PHH and she

further averred to have reviewed and relied upon those records. She averred that

JPM Chase was in possession of the original indorsed note, the date of Loseke’s last

payment the amount due and owing on the note, the date of Loseke’s last payment

and the notice of default and demand letter sent to Loseke.

Feeley’s affidavit is corroborated by other evidence in the record,

including copies of the original note and mortgage, payment history and notice of

default and demand letter. Based on review of the above, Feeley concluded that the

that amount due was $200,539.41.

Julian Medina, a JPM Chase assistant vice president averred that

PHH maintains the Loseke records. Medina claimed to have personal knowledge of

PHH’s practices and procedures for servicing loans of which he is involved as a

routine function of his job and further that he specifically reviewed and relied on the

Loseke records. Medina averred that the interest rate on the note was 3.625 percent from June 1, 2017, to February 1, 2018 and 4.5 percent from March 1, 2018, to

October 11, 2018.

As stated, Loseke presented no evidence to challenge the amount of

principal or interest due. Moreover, she makes no claim that the amount of

principal due was $200,539.41 and that the amount of interest due was 3.625

percent from June 1, 2017, to February 1, 2018, and 4.5 percent from March 1, 2018,

to October 11, 2018. Instead, she asks rhetorical questions as to the credibility of

Feeley’s affidavit and she complains that there are “charges on the Customer

Account for fees which are not explained” that “range[] from $11 to $94.55.” Loseke

fails to identify these “charges” and fails to affirmatively prove that they are

incorrect. More critically, she fails to establish that these “charges” were part of the

principal or interest due.

Conclusion

We find that JPM Chase met its initial burden of identifying specific

facts in the record that demonstrate it was entitled to summary judgment.

Moreover, we find that Loseke failed to meet her reciprocal burden to point to

evidence of specific facts in the record demonstrating genuine issues of material fact

for trial. Accordingly, we conclude that summary judgment for JPM Chase was

appropriate.

We overrule the assignment of error.

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.

________________________ EILEEN A. GALLAGHER, JUDGE

LARRY A. JONES, SR., P.J., and MICHELLE J. SHEEHAN, J., CONCUR