Bank of America v. Jones
2014 Ohio 4985
Ohio Ct. App.2014Background
- Bank of America filed a foreclosure complaint on Dec. 8, 2011, asserting it possessed and held the promissory note and mortgage securing a $333,000 loan; unpaid balance claimed $321,500.92.
- Bank of America is successor by merger to BAC Home Loans Servicing, L.P.; Silva, a Bank VP/Operations Manager, submitted an affidavit stating the bank had physical possession of the original note and attaching the note and mortgage assignments.
- The note contained undated indorsements ending in a blank indorsement, and the mortgage had recorded assignments (American Midwest → MERS → BAC Home Loans Servicing/Bank of America).
- Joneses opposed summary judgment, claiming Bank lacked standing/holder status, the note and mortgage were severed (MERS assignment invalid), presentment was not made, and Silva’s affidavit failed to authenticate business records.
- Trial court granted joint summary judgment and decree of foreclosure for Bank of America; Joneses appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing/holder status of the note | Bank had physical possession of the note indorsed in blank and was therefore a holder entitled to enforce the note | Jones: Bank did not show it was the legal holder or real party in interest at commencement | Held: Silva’s affidavit + blank indorsement established Bank as holder with standing to foreclose |
| Validity/effect of mortgage assignment to MERS | Bank: mortgage assignments plus note negotiation gave Bank enforceable rights; even if mortgage assignment to MERS was imperfect, the negotiated note equitably carried the mortgage | Jones: assignment to MERS severed note from mortgage at origination, rendering the mortgage unenforceable and assignment invalid (relying on Carpenter) | Held: Carpenter not controlling; assigning mortgage without note may make mortgage unenforceable but does not prevent Bank (as holder of note) from foreclosing; negotiation of the note equitably assigns the mortgage |
| Presentment requirement under R.C. 1303.61 | Bank: note waived presentment and notice of dishonor under its terms; no presentment required before foreclosure | Jones: Bank failed to make presentment, so foreclosure barred | Held: Waiver of presentment in the note relieved Bank of presentment requirement; claim rejected |
| Authentication of loan documents / business-records foundation | Bank: Silva’s affidavit established personal knowledge and business-records foundation for attached documents | Jones: Silva lacked adequate personal knowledge and failed to properly authenticate records under Civ.R. 56(E) and Evid.R. 803(6) | Held: Silva’s affidavit met Civ.R. 56(E) and qualified documents as business records under Evid.R. 803(6); Jones submitted no contradictory affidavit |
Key Cases Cited
- Fed. Home Loan Mtge. Corp. v. Schwartzwald, 979 N.E.2d 1214 (Ohio 2012) (lack of standing at commencement requires dismissal)
- Carpenter v. Longan, 83 U.S. 271 (U.S. 1873) (historical rule that assignment of note carries the mortgage)
- State ex rel. Corrigan v. Seminatore, 423 N.E.2d 105 (Ohio 1981) (affidavit stating personal knowledge and attaching true copies satisfies Civ.R. 56(E))
- Edgar v. Haines, 141 N.E. 837 (Ohio 1923) (under Ohio law the mortgage is incident to the debt and passes to assignee of the note)