2014 Ohio 3569
Ohio Ct. App.2014Background
- Bank of America (BoA) filed a foreclosure complaint against Russell Saadey on Feb 6, 2012, attaching the original note (with indorsements) and mortgage executed in 2007 to Countrywide Bank, FSB.
- The note bears two indorsements: a specific indorsement from Countrywide Bank, FSB to Countrywide Home Loans, Inc., then a blank indorsement by Countrywide Home Loans, Inc., making the note bearer paper.
- An assignment of mortgage executed by MERS purported to transfer the mortgage to BAC Home Loans Servicing, L.P.; BAC later merged into Bank of America, N.A.; BoA produced corporate documents reflecting the merger/name changes.
- BoA moved for summary judgment supported by an affidavit from a BoA assistant vice president (Shelley Fazio) attesting personal knowledge of BoA’s business records, the note’s possession, default, and amounts due.
- Saadey opposed, arguing BoA lacked standing/real-party-in-interest because the mortgage assignment did not transfer rights and the affidavit was insufficient; the trial court granted summary judgment to BoA and Saadey appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing / real party in interest | BoA is holder in possession of the note (bearer paper) and successor-by-merger to BAC, therefore entitled to enforce the note and mortgage | Assignment and corporate documents do not properly show transfer; BoA lacks title to enforce | Court: BoA showed possession of bearer note and merger documents; holder in possession is real party in interest; standing established |
| Sufficiency/authentication of affidavit | Fazio (BoA employee) swore to personal knowledge and authenticated business records showing possession, default, and accounting | Affidavit mirrors defects in other cases; lacks personal knowledge or foundation to authenticate records | Court: Affiant was an employee of BoA, reviewed its records, and averred personal knowledge; affidavit legally sufficient absent contrary evidence |
| Effect of missing/recorded mortgage assignment | Negotiation of the note operates as equitable assignment of mortgage; recorded assignment not required to enforce mortgage when note holder is shown | Without recorded assignment, BoA cannot enforce mortgage | Court: UCC and Ohio law recognize transfer of note as transferring mortgage rights; evidence sufficed despite absence of separate recorded assignment |
Key Cases Cited
- Grafton v. Ohio Edison Co., 77 Ohio St.3d 102 (court reviews summary judgment de novo)
- Temple v. Wean United, Inc., 50 Ohio St.2d 317 (standards for summary judgment)
- Dresher v. Burt, 75 Ohio St.3d 280 (party moving for summary judgment bears initial evidentiary burden)
- Edgar v. Haines, 109 Ohio St. (note is evidence of debt; mortgage incidental to obligation)
- Kernohan v. Manss, 53 Ohio St. (negotiation of note operates as equitable assignment of mortgage)