[Cite as Nationstar Mtge., L.L.C. v. Williams, 2014-Ohio-4553.]
COURT OF APPEALS DELAWARE COUNTY, OHIO FIFTH APPELLATE DISTRICT
JUDGES: NATIONSTAR MORTGAGE LLC : Hon. W. Scott Gwin, P.J. : Hon. Sheila G. Farmer, J. Plaintiff-Appellee : Hon. John W. Wise, J. : -vs- : : Case No. 14 CAE 04 0029 CRAIG A. WILLIAMS, ET AL : : Defendants-Appellants : OPINION
CHARACTER OF PROCEEDING: Civil appeal from the Delaware County Court of Common Pleas, Case No. 13 CV E 02 0158
JUDGMENT: Affirmed
DATE OF JUDGMENT ENTRY: October 13, 2014
APPEARANCES:
For Plaintiff-Appellee For Defendants-Appellants Nationstar Mortgage LLC Craig and Liz Williams DAVID CAREY MARC DANN LAW FIRM JOHN KOPF III JAMES R. DOUGLASS 41 S. High St., Ste 1700 4600 Prospect Avenue Columbus, OH 43215 Cleveland, OH 44103
SARAH LEIBEL Reisenfeld & Associates 3962 Red Bank Road Cincinnati, OH 45117 [Cite as Nationstar Mtge., L.L.C. v. Williams, 2014-Ohio-4553.]
Gwin, P.J.
{¶1} Appellants appeal the March 27, 2014 judgment entry of the Delaware
County Court of Common Pleas granting appellee’s motions for default judgment and
summary judgment and entering a decree of foreclosure.
Facts & Procedural History
{¶2} On August 8, 2005, appellant Craig Williams executed a promissory note
in favor of PrimeLending (“PrimeLending”), a PlainsCapital Company, in the amount of
$359,650.00. The note was first indorsed to Lehman Brothers Bank, FSB, then from
Lehman Brothers Bank to Lehman Brothers Holdings, Inc., then from Lehman Brothers
Holdings, Inc. to blank. Also on August 8, 2005, appellants Craig Williams and Liz
Williams executed a mortgage that secured the note and encumbered the property
located at 3400 Ostrander Road, Ostrander, Ohio, 43061. The mortgage indicated the
lender was PrimeLending and listed Mortgage Electronic Registrations Systems
(“MERS”) as mortgagee and nominee for Lender and Lender’s successors and assigns.
The mortgage was recorded on August 9, 2005. In a document entitled “Assignment of
Mortgage,” that was dated November 5, 2012 and recorded on December 6, 2012,
MERS, as nominee for PrimeLending, assigned the August 8, 2005 mortgage to
appellee Nationstar Mortgage, LLC (“Nationstar”).
{¶3} Appellee filed a complaint for foreclosure on February 20, 2013, stating
appellants were in default due to lack of payment. Appellee attached to its complaint a
copy of the note, mortgage, and assignment of mortgage. The complaint alleged that
appellee was the holder of the note and mortgage. Further, that the foreclosing party or Delaware County, Case No. 14 CAE 04 0029 3
creditor, directly or indirectly through an agent, has possession of the note that has
been duly indorsed.
{¶4} Appellee attempted certified mail service on appellants at two different
addresses that was returned “unclaimed, unable to forward.” In both May of 2013 and
July of 2013, appellee filed a request for ordinary mail service to appellants. The
regular mail was returned unable to deliver. On September 3, 2013, appellee filed an
affidavit for service by publication. The attorney for appellee submitted an affidavit
stating that he attempted to locate addresses for appellants, that he attempted to serve
each multiple times at two addresses, and that he had used all reasonable efforts in
trying to locate appellants, including a review of client records, search of the internet,
and other skip-tracing sources. The affidavit provided that it is likely that future effort to
ascertain the location of appellants will be unsuccessful. Proof of the service of
publication was filed on October 18, 2013, which states that the last publication in the
Delaware Gazette was on September 25, 2013.
{¶5} On October 23, 2013, Craig Williams filed a motion requesting an
extension of time to move or plead in response to the complaint and gave P.O. Box 10,
Ostrander, Ohio, as his address, which is one of the addresses where appellee
attempted to serve appellants by certified and regular mail. The trial court granted
Craig’s motion on October 30, 2013. Craig Williams filed an answer on November 20,
2013. On February 26, 2013, appellee filed a motion for default judgment against Liz
Williams and moved for summary judgment against Craig Williams. Appellee served
both motions upon appellants at the P.O. Box 10, Ostrander address. Appellee
submitted the affidavit of Tiera Thune (“Thune”), assistant secretary for appellee, in Delaware County, Case No. 14 CAE 04 0029 4
support of its motion for summary judgment. Appellants did not respond to the motion
for default judgment or motion for summary judgment. The trial court granted appellee’s
motion for default judgment and summary judgment on March 27, 2014 and entered a
decree of foreclosure.
{¶6} Appellants appeal the March 27, 2014 judgment entry of the Delaware
County Court of Common Pleas and assign the following as error:
{¶7} “I. THE TRIAL COURT ERRED WHEN IT AWARDED SUMMARY
JUDGMENT TO PLAINTIFF BASED UPON AN AFFIDAVIT WHEREIN THE AFFIANT
FAILED TO DEMONSTRATE PERSONAL KNOWLEDGE OR THE FACTS
NECESSARY TO DEMONSTRATE ENTITLEMENT TO RELIEF.
{¶8} "II. THE TRIAL COURT ERRED WHEN IT AWARDED A PLAINTIFF
WHO FAILED [TO] DEMONSTRATE THAT IT COMPARED THE ORIGINAL NOTE
WITH THE COPY OFFERED IN SUPPORT OF SUMMARY JUDGMENT.
{¶9} "III. THE TRIAL COURT ERRED WHEN IT AWARDED A DEFAULT
JUDGMENT AGAINST DEFENDANT LIZ WILLIAMS WHEN PLAINTIFF FAILED TO
PERFECT SERVICE.”
I. & II.
{¶10} We consider appellants’ first two assignments of error together because
they raised interrelated issues regarding the trial court’s grant of summary judgment in
favor of appellee. We refer to Civil Rule 56(C) in reviewing a motion for summary
judgment which provides, in pertinent part:
Summary judgment shall be rendered forthwith if the pleadings,
depositions, answers to interrogatories, written admissions, affidavits, Delaware County, Case No. 14 CAE 04 0029 5
transcripts of evidence, and written stipulations of fact, if any, timely filed
in the action, show that there is no genuine issue of 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. A summary
judgment shall not be rendered unless it appears from the evidence or
stipulation, and only from the evidence or stipulation, that 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, that
party being entitled to have the evidence or stipulation construed mostly
strongly in the party’s favor. A summary judgment, interlocutory in
character, may be rendered on the issue of liability alone although there is
a genuine issue as to the amount of damages.
{¶11} A trial court should not enter a summary judgment if it appears a material
fact is genuinely disputed, nor if, construing the allegations most favorably towards the
non-moving party, reasonable minds could draw different conclusions from the
undisputed facts. Hounshell v. Am. States Ins. Co., 67 Ohio St.2d 427, 424 N.E.2d 311
(1981). The court may not resolve any ambiguities in the evidence presented. Inland
Refuse Transfer Co. v. Browning-Ferris Inds. of Ohio, Inc., 15 Ohio St.3d 321, 474
N.E.2d 271 (1984). A fact is material if it affects the outcome of the case under the
applicable substantive law. Russell v. Interim Personnel, Inc., 135 Ohio App.3d 301,
733 N.E.2d 1186 (6th Dist. 1999).
{¶12} When reviewing a trial court’s decision to grant summary judgment, an
appellate court applies the same standard used by the trial court. Smiddy v. The Delaware County, Case No. 14 CAE 04 0029 6
Wedding Party, Inc., 30 Ohio St.3d 35, 506 N.E.2d 212 (1987). This means we review
the matter de novo. Doe v. Shaffer, 90 Ohio St.3d 388, 2000-Ohio-186, 738 N.E.2d
1243.
{¶13} The party moving for summary judgment bears the initial burden of
informing the trial court of the basis of the motion and identifying the portions of the
record which demonstrate the absence of a genuine issue of fact on a material element
of the non-moving party’s claim. Drescher v. Burt, 75 Ohio St.3d 280, 662 N.E.2d 264
(1996). Once the moving party meets its initial burden, the burden shifts to the non-
moving party to set forth specific facts demonstrating a genuine issue of material fact
does exist. Id. The non-moving party may not rest upon the allegations and denials in
the pleadings, but instead must submit some evidentiary materials showing a genuine
dispute over material facts. Henkle v. Henkle, 75 Ohio App.3d 732, 600 N.E.2d 791
(12th Dist. 1991).
Personal Knowledge
{¶14} Appellants argue that Thune’s affidavit failed to satisfy the requirement of
Civil Rule 56(E) that affidavits must be made on personal knowledge with respect to the
attached documents’ admissibility as records of regularly conducted activity pursuant to
Evid.R. 803(6). We disagree.
{¶15} Evidence Rule 803(6) provides that records of regularly conducted
business activity are admissible, as an exception to the rules of hearsay, if shown to be
such “by the testimony of the custodian or other qualified witness.” The question of who
may lay a foundation for the admissibility of business records as a custodian or other
qualified witness must be answered broadly. Citimortgage v. Cathcart, 5th Dist. Stark Delaware County, Case No. 14 CAE 04 0029 7
No. 2013CA00179, 2014-Ohio-620. It is not a requirement that the witness have
firsthand knowledge of the transaction giving rise to the business record. Id. “Rather, it
must be demonstrated that: the witness is sufficiently familiar with the operation of the
business and with the circumstances of the record’s preparation, maintenance and
retrieval, that he can reasonably testify on the basis of this knowledge that the record is
what it purports to be, and that it was made in the ordinary course of business
consistent with the elements of Rule 803(6).” Id.
{¶16} Affidavits which merely set forth conclusions or opinions without stating
supporting facts are insufficient to meet the requirements of Civil Rule 56(E). Tolson v.
Triangle Real Estate, 10th Dist. Franklin No. 03AP-715, 2004-Ohio-2640. However,
Ohio law recognizes that personal knowledge may be inferred from the contents of an
affidavit. Wells Fargo Bank, N.A. v. Dawson, 5th Dist. Stark No. 2013CA00095, 2014-
Ohio-269. The assertion of personal knowledge in an affidavit satisfies Civil Rule 56(E)
if the nature of the facts in the affidavit combined with the identity of the affiant creates a
reasonable inference that the affiant has personal knowledge of the facts in the affidavit.
Id.
{¶17} In the affidavit, Thune avers that the statements made in the affidavit are
based on her personal knowledge and her review of the business records for and
relating to the loan including the note, mortgage, and appellee’s electronic servicing
system. She states that in her capacity as assistant secretary for Nationstar Mortgage
LLC, she has access to the business records of Nationstar Mortgage LLC, maintained in
the ordinary course of regularly conducted business activity, and the affidavit was based
on her personal knowledge from her review of the records and from her own personal Delaware County, Case No. 14 CAE 04 0029 8
knowledge of how they are kept and maintained. She states that loan records are
maintained by appellee in the course of its regularly conducted business activities and
are made at or near the time of the event, by or from information transmitted by a
person with knowledge. Thune avers that the records she reviewed and relied upon for
the statements made in the affidavit include, but are not limited to, the note, the
mortgage, and appellee’s electronic servicing system.
{¶18} From her position as assistant secretary of Nationstar Mortgage LLC and
her statement that she reviewed the documents in the instant case, it may be
reasonably inferred that Thune has personal knowledge to qualify the documents as an
exception to the hearsay rule as a business document. See OneWest Bank, FSB v.
Albert, 5th Dist. Stark No. 2013CA00180, 2014-Ohio-2158; Citimortgage, Inc. v.
Cathcart, 5th Dist. Stark No. 2013CA00179, 2014-Ohio-620. The affidavit is properly
admissible Civil Rule 56 evidence and appellants, in failing to respond to appellee’s
motion for summary judgment, did not submit any Civil Rule 56 evidence to contradict
the affidavit and thus failed to establish any genuine issue of material fact. The trial
court did not err in granting summary judgment based on Thune’s affidavit.
Standing
{¶19} Appellants also argue that Nationstar does not have standing and is not
a party entitled to enforce the note and mortgage. We disagree.
{¶20} To have standing to pursue a foreclosure action, a plaintiff “must establish
an interest in the note or mortgage at the time it filed suit.” Home Loan Mtge. Corp. v.
Schwartzwald, 134 Ohio St.3d, 2012-Ohio-5017, 979 N.E.2d 1214. The current holder
of the note and mortgage is the real party in interest in foreclosure actions. U.S. Bank Delaware County, Case No. 14 CAE 04 0029 9
Nat’l. Assoc. v. Marcino, 181 Ohio App.3d 328, 908 N.E.2d 1032 (7th Dist.), citing
Chase Manhattan Mtge. Corp v. Smith, 1st Dist. Hamilton No. CO61069, 2007-Ohio-
5874. R.C. 1303.31 provides:
(A) “Person entitled to enforce” an instrument means any of the
following persons:
(1) The holder of the instrument;
(2) A non-holder in possession of the instrument who has the
rights of a holder;
(3) A person not in possession of the instrument who is entitled
to enforce the instrument pursuant to Section 1303.38 or
division (D) of section 1303.58 of the Revised Code.
{¶21} In this case, appellee attached to its complaint copies of the note and
mortgage and alleged it was the holder of the note, which was endorsed in blank, and
mortgage. Further, that the foreclosing party or creditor, directly or indirectly through an
agent, has possession of the note that has been duly endorsed. Also attached to the
complaint is an assignment of mortgage dated November 5, 2012 and recorded on
December 6, 2012, in which MERS, as nominee for PrimeLending, assigned the August
8, 2005 mortgage to appellee. When an instrument is endorsed in blank, the instrument
becomes payable to bearer and may be negotiated by transfer of possession alone until
specially indorsed. R.C. 1303.25(B). In addition, the affidavit of Thune, attached to
appellee’s motion for summary judgment, states that true and exact copies of the note
and mortgage are attached to the affidavit. The affidavit avers that appellee holds the
note and is the servicer of the loan. Accordingly, appellee presented sufficient evidence Delaware County, Case No. 14 CAE 04 0029 10
to demonstrate that it was the current holder of the note and mortgage when the
complaint was filed. Appellants did not provide any Civil Rule 56 evidence to create a
genuine issue of material fact that appellee was not the owner and holder of the note
and mortgage at the time the complaint was filed.
{¶22} We further find that even if appellee was not in possession of the note at
the time the complaint was filed, the assignment of the mortgage is sufficient to transfer
both the note and the mortgage because the documents evidence the parties’ intent to
keep the instruments together. In Bank of New York v. Dobbs, 5th Dist. Knox No. 2009-
CA-000002, 2009-Ohio-4742, we held that the assignment of a mortgage, without an
express transfer of the note, is sufficient to transfer both the mortgage and the note if
the record indicates the parties intended to transfer both the note and the mortgage.
{¶23} This case is analogous to the Dobbs case as the record indicates the
parties intended to transfer both the note and the mortgage. The note dated August 8,
2005 provides, “in return for a loan that I have received, I promise to pay U.S.
$359,650.00 plus interest, to the order of Lender.” Further, the note states, “In addition
to the protection given to the Note Holder under this Note, a Mortgage, Deed of Trust, or
Security Deed (‘Security Instrument”) dated the same date as this Note, protects the
Note Holder from possible losses that might result if I do not keep the promises that I
make in this Note.” The mortgage, signed and August 8, 2005, provides, “This Security
Instrument secures to Lender: (i) the repayment of the Loan, and all renewals,
extensions, and modifications of the Note; and (ii) the performance of Borrower’s
covenants and agreements under this Security Instrument and the Note.” Delaware County, Case No. 14 CAE 04 0029 11
{¶24} The note refers to the mortgage and the mortgage refers to the note.
Thus, we find a clear intent by the parties to keep the note and mortgage together rather
than transferring the mortgage alone. Since the mortgage assignment was recorded on
December 6, 2012, prior to the filing of the complaint on February 20, 2013, the note
was effectively transferred on that date.
{¶25} Accordingly, there are no genuine issues of material fact as to whether
appellee is the real party in interest with standing to pursue this foreclosure action.
Affidavit & Comparison of Documents
{¶26} Appellant next argues the trial court erred in relying on Thune’s affidavit in
granting summary judgment because Thune failed to demonstrate she compared the
original note with the copy submitted in support of the summary judgment as required
by Wachovia Bank of Delaware, N.A. v. Jackson, 5th Dist. Stark No. 2010-CA-00291,
2011-Ohio-3202.
{¶27} First, as discussed above, appellee has standing via the assignment of the
mortgage separate from the possession of the blank-endorsed note. Further, Thune
states that she actually saw the note, not a copy of the note, and that the attachment to
the affidavit is a “true and exact” copy of the note. The copy of the note attached to the
affidavit is also stamped “ORIGINAL.” Unlike in the cases cited by appellant, appellants
failed to submit any Civil Rule 56 evidence to support their contention that Thune did not
compare the original note with the copy. Accordingly, we find there in no genuine issue
of material fact as to whether Thune’s affidavit sufficiently authenticated the note
submitted in support of appellee’s motion for summary judgment. Delaware County, Case No. 14 CAE 04 0029 12
{¶28} Based on the foregoing, we find the trial court did not err in granting
appellee’s motion for summary judgment. Appellants’ first and second assignments of
error are overruled.
III.
{¶29} Appellant Liz Williams contends appellee failed to perfect service on her
because appellee failed to demonstrate it took any steps to ascertain her residence.
We disagree.
{¶30} As an initial matter, we note that a question of personal jurisdiction may
not be raised for the first time on appeal. In re Bailey Children, 5th Dist. Stark No.
2004CA00386, 2005-Ohio-2981. A party may challenge the entry of default judgment
against them by filing either a Rule 60(B) motion for relief from judgment or a motion to
vacate the judgment on grounds that it is void ab initio for lack of personal jurisdiction.
Linquist v. Drossel, 5th Dist. No. 2006 CA 00119, 2006-Ohio-5712. In this case, Liz
Williams failed to challenge the default judgment against her by filing a motion to vacate
based on a claim of insufficiency of service and thus she cannot raise this issue for the
first time on appeal.
{¶31} However, we find even if appellant Liz Williams filed a proper motion to
vacate for lack of personal jurisdiction, the trial court did not lack jurisdiction to grant
service by publication or subsequently lack jurisdiction to grant default judgment based
on defective due process of service.
{¶32} This Court reviews a grant of default judgment for an abuse of discretion.
See Snyder v. Swick, 5th Dist. Stark No. 2010CA0006, 2010-Ohio-5138. When a party
challenges the existence or sufficiency of service of process, the court is “guided by the Delaware County, Case No. 14 CAE 04 0029 13
premise that service is proper where the civil rules on service are followed, unless
sufficient evidence exists to rebut this principle.” Harris v. Johnson, 5th Dist. Perry No.
10 CA 22, 2011-Ohio-3102. In this case, appellee complied with the rules by attempting
to serve appellant Liz Williams by certified mail, twice by ordinary mail at two different
addresses, one being the address given as the address of her husband, appellant Craig
Williams, and by publishing a notice in the Delaware Gazette.
{¶33} Civil Rule 4.4(A) provides:
Before service by publication can be made, an affidavit of a party or his
counsel shall be filed with the court. The affidavit shall aver that service of
summons cannot be made because the residence of the defendant is
unknown to the affiant, all of the efforts made on behalf of the party to
ascertain the residence of the defendant, and that the residence of the
defendant cannot be ascertained with reasonable diligence.
{¶34} Whether a party exercised reasonable diligence is fact dependent and
conducted at the trial court’s discretion and requires “taking steps which an individual of
ordinary prudence would reasonably expect to be successful in locating a defendant’s
address.” In re Thompkins, 115 Ohio St.3d 409, 2007-Ohio-5238, 875 N.E.2d 582.
{¶35} In support of its request for service by publication, appellee submitted the
affidavit of its attorney detailing its reasonable diligence in attempting to locate Liz
Williams and specifies that appellee: attempted service upon Liz Williams on three
different occasions at two different addresses; reviewed its records; searched the
Internet; and tried using other skip-tracing sources, but was unable to ascertain Liz
Williams’ location. Though appellant argues that the affidavit is inadmissible hearsay, Delaware County, Case No. 14 CAE 04 0029 14
Civil Rule 4.4(A) itself states such an affidavit can be submitted by the party’s attorney,
and any effort to locate an address involves contact with outside sources. In re Walters,
5th Dist. Fairfield No. 2005 CA 66, 2006-Ohio-631. Accordingly, the trial court’s
conclusion that service by publication had been completed was not an abuse of
discretion. Appellants’ third assignment of error is overruled.
{¶36} Based on the foregoing, appellants’ assignments of error are overruled
and the March 27, 2014 judgment entry of the Delaware County Court of Common
Pleas is affirmed.
By Gwin, P.J.,
Farmer, J., and
Wise, J., concur