Bank of Am., N.A. v. Calloway
2016 Ohio 7959
| Ohio Ct. App. | 2016Background
- In March 2005 Paul Calloway executed a $138,000 promissory note (payable to Countrywide) and a mortgage (in Paul and Terri Calloway’s names) on Euclid, Ohio property; borrowers made payments through July 2008 and then defaulted.
- Bank of America (BOA) sued in 2011 seeking foreclosure and attached the original note (indorsed in blank), the original mortgage, an assignment history showing MERS → Countrywide servicing → BAC Home Loans Servicing → BOA, and certificates reflecting name changes and merger.
- The trial court denied BOA’s summary judgment motion, the case went to a bench trial before a magistrate, who found BOA the holder of the note, that Calloway defaulted, and that BOA complied with conditions precedent; the trial court adopted the magistrate’s decision.
- Calloways raised six assignments of error challenging BOA’s standing/ownership, evidentiary foundation (BOA witness’s personal knowledge and authentication), validity of signatures, compliance with acceleration/notice conditions precedent, the mortgage assignment, and allowing BOA to amend to add unjust enrichment.
- At trial BOA’s representative Sirdonia Davis (assistant VP of mortgage resolution) authenticated loan files and testified about chain of title, notices sent, and file-keeping practices; original note (indorsed in blank) and mortgage were produced and a handwriting expert testified that Paul’s signatures were genuine.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing / ability to prosecute foreclosure | BOA was holder of the note (note indorsed in blank) and produced mortgage/assignment history; Davis could authenticate records | Calloways argued BOA lacked standing, servicer testimony lacked personal knowledge, and BOA was only servicer not owner | Held: BOA had standing as holder of the note (possession of note indorsed in blank) and Davis was a qualified witness to authenticate business records; claim overruled |
| Authentication / admissibility of prior-servicer records and witness competency | BOA: Davis had personal familiarity with files and BOA recordkeeping; business-records exception applies | Calloways: Davis lacked personal knowledge and was not custodian; prior-servicer records unreliable | Held: Davis competent as "other qualified witness" under Evid.R. 803(6); records admissible; trial court did not abuse discretion |
| Conditions precedent / notice of default and acceleration | BOA: Notices were sent (filed in business records) and Calloways’ general denial failed to specifically deny performance required by Civ.R. 9(C) | Calloways: BOA failed to prove notice/acceleration sent by prior servicer; Davis lacked personal knowledge to authenticate letters | Held: BOA met its burden; Calloways’ general denial deemed insufficient; conditions precedent deemed satisfied |
| Validity of signatures / forgery claim | BOA: Note and mortgage, with signatures, were produced and expert testimony supported genuineness; amended answer did not specifically deny signatures | Calloways: Paul denied signing and alleged misspelling; Terri questioned notary; disputed handwriting analysis | Held: Signatures deemed admitted because not specifically denied; handwriting expert supported genuineness; trial court’s finding not against manifest weight of evidence |
Key Cases Cited
- Beard v. Meridia Huron Hosp., 106 Ohio St.3d 237 (2005) (trial court evidentiary rulings reviewed for abuse of discretion)
- Fed. Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13 (2012) (standing in foreclosure: holder or assignee)
- Eastley v. Volkman, 132 Ohio St.3d 328 (2012) (civil manifest-weight standard and deference to factfinder)
- Seasons Coal Co., Inc. v. Cleveland, 10 Ohio St.3d 77 (1984) (presumption in favor of the finder of fact when weighing evidence)
- Great Seneca Fin. v. Felty, 170 Ohio App.3d 737 (2006) (business records of another entity admissible where trustworthy and foundational evidence shown)