Bank of New York Mellon v. Brock
2014 Ohio 3085
Ohio Ct. App.2014Background
- In 2006 Wavelene Brock executed a promissory note and both Wavelene and Carlos executed a mortgage securing property on State Route 123; the loan was later endorsed in blank and assigned to The Bank of New York Mellon (BONYM).
- BONYM filed a foreclosure complaint in February 2012; the Brocks answered, asserting defects in BONYM’s right to enforce the note and lack of Wavelene’s capacity, and asserting counterclaims under TILA, RESPA, and the FDCPA.
- The Brocks’ FDCPA claim alleged BONYM was a “debt collector” because it acquired the note after default and made misleading representations while collecting the debt.
- BONYM moved for summary judgment on the foreclosure claim and on the Brocks’ counterclaims, submitting an affidavit from a servicer employee (Zachary Jaffe) that referenced a Pooling and Servicing Agreement (PSA) not attached to the affidavit.
- The trial court denied summary judgment on foreclosure (capacity issue) but granted summary judgment for BONYM on the TILA, RESPA, and FDCPA counterclaims; BONYM then voluntarily dismissed the foreclosure complaint and final judgment entered for BONYM on counterclaims.
- On appeal the Twelfth District reversed the grant of summary judgment on the FDCPA claim, holding parts of Jaffe’s affidavit (paragraphs 11 and 16) improperly relied on an unattached PSA and therefore must be stricken; after striking them, BONYM failed to meet its initial summary-judgment burden on whether it held the note before default.
Issues
| Issue | Plaintiff's Argument (BONYM) | Defendant's Argument (Brocks) | Held |
|---|---|---|---|
| Whether paragraphs of servicer affidavit referencing an unattached PSA are admissible on summary judgment | Jaffe’s affidavit is based on personal knowledge and business records; admissible under Civ.R. 56(E) | The PSA was not attached as required by Civ.R. 56(E); portions relying on it must be stricken | Court: Abuse of discretion to admit paragraphs 11 and 16; those paragraphs stricken |
| Whether BONYM is a “debt collector” under the FDCPA (i.e., did it acquire the debt after default) | BONYM acquired the endorsed-in-blank note on or about May 1, 2006, before any default, so it is not a "debt collector" | BONYM’s evidence does not reliably establish when it acquired possession; genuine factual dispute exists | Court: After striking inadmissible affidavit portions, BONYM failed to meet its burden; summary judgment reversed on FDCPA claim |
| Whether BONYM is vicariously liable under TILA/RESPA for prior servicer’s conduct | BONYM not liable for prior servicer’s alleged failure to respond or disclose; wrongful acts by predecessor | Brocks argued vicarious liability for prior servicer’s alleged TILA/RESPA violations | Trial court ruled for BONYM on TILA/RESPA (affirmed as to trial-court disposition in this opinion) |
| Whether prior complaints/pleadings from other cases create admissible evidence about note endorsement | BONYM contends its record shows endorsement and possession; relied on servicer affidavit | Brocks pointed to prior complaints suggesting lack of endorsement then | Court: Unauthenticated pleadings from other cases are not admissible to defeat summary judgment and were not considered |
Key Cases Cited
- Dresher v. Burt, 75 Ohio St.3d 280 (establishes moving party’s burden in Ohio summary-judgment practice)
- Schlosser v. Fairbanks Capital Corp., 323 F.3d 534 (7th Cir.) (assignees are debt collectors if they acquired debt after default)
- Williams v. McFarland Properties, L.L.C., 177 Ohio App.3d 490 (12th Dist.) (summary-judgment standard application)
- Carlton v. Davisson, 104 Ohio App.3d 636 (6th Dist.) (definition of personal knowledge for affidavits)
- Morris v. First Natl. Bank & Trust Co., 21 Ohio St.2d 25 (Ohio 1970) (evidence on summary judgment must be construed most strongly against moving party)