2010-CRE Venture, LLC v. Costanzo
2011 Ohio 3530
Ohio Ct. App.2011Background
- Appellant Costanzo executed a Cognovit Promissory Note in favor of Home Savings (Secured loan).
- Home Savings transferred the Note to First Bank of Beverly Hills via an Assignment of Mortgage, then the FDIC as Receiver for FBBH negotiated the Note to CRE Venture by Allonge.
- Costanzo defaulted, CRE Venture accelerated the Note and filed suit December 10, 2010 for breach of promissory note.
- CRE Venture attached the Note, Assignment, and Allonge to its Complaint and filed related pleadings including a motion for judgment.
- The trial court granted judgment for CRE Venture on December 14, 2010, and Costanzo appealed.
- The sole issue is whether CRE Venture had standing as a “person entitled to enforce” the Note.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CRE Venture had standing to enforce the Note | CRE Venture possessed the Note via possession and endorsements (Assignment and Allonge). | Costanzo argues Home Savings remained the holder and CRE Venture lacks proper evidence of endorsement. | CRE Venture had standing as holder/entitled to enforce under R.C. 1303.01. |
| Whether transfer of the mortgage equates to transfer of the Note | Assignment of mortgage and endorsement to CRE Venture evidenced transfer of the note. | Costanzo contends no clear transfer of note was shown. | Transfer of the mortgage implies transfer of the note; note was effectively transferred. |
| Whether allonge/attachments to the Note sufficed to show affixation to the Complaint | Affidavits and attachments were attached to the Complaint establishing the Note with Assignment and Allonge. | Argues lack of express mention of Allonge attachment. | In record, Allonge and Assignment were affixed to the Note attached to the Complaint; argument rejected. |
Key Cases Cited
- Bank of New York v. Dobbs, 2009-Ohio-4742 (Ohio 2009) (assignment of mortgage transfers note and vice versa; real party in interest)
- Lasalle Bank National Association v. Street, 2009-Ohio-1855 (Ohio 2009) (note transfer implies mortgage transfer; equity governs apparent transfers)
- Provident Bank v. Taylor, 2005-Ohio-2573 (Ohio App. 2005) (relied on for implied transfer/ownership considerations)