Bank of New York Mellon Trust Co. N.A. v. Herres
2014 Ohio 1539
Ohio Ct. App.2014Background
- Sutton Funding filed a foreclosure action against Herres based on a promissory note and mortgage securing 300 Pauly Drive, Clayton, Ohio.
- The note was payable to EquiFirst and stated that the lender could transfer the note to a successor note holder.
- Sutton claimed it acquired the note and mortgage from EquiFirst on October 27, 2007, prior to filing the foreclosure.
- An allonge transferring the note to Sutton was dated October 27, 2007, but the mortgage was not formally assigned to Sutton until February 12, 2008, after the suit began.
- Foreclosure summary judgment was granted to Sutton in July 2009; appellate review followed and ultimately affirmed the judgment in 2010.
- Subsequent motions under Civ.R. 60(B) and related proceedings raised issues about standing and the impact of bankruptcy discharge on the foreclosure judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Sutton have standing to sue when suit was filed? | Sutton had an assignment of the note before suit, and the mortgage automatically followed the note. | Sutton lacked standing because formal mortgage assignment occurred after filing. | Sutton had standing; note transfer abroad predated suit, and mortgage follows note. |
| Did the bankruptcy discharge affect the foreclosure judgment under Civ.R. 60(B)? | Bankruptcy discharge should relieve the debtor from personal liability and may affect the judgment. | Discharge does not extinguish the foreclosure judgment or the right to sell the property. | Discharge did not affect Mellon’s foreclosure judgment; the court did not abuse its discretion. |
Key Cases Cited
- Fed. Home Loan Mortg. Corp. v. Schwartzwald, 134 Ohio St.3d 13 (2012-Ohio-5017) (standing is jurisdictional; must have interest in note or mortgage at filing)
- Wells Fargo Bank, N.A. v. Goebel, 2014-Ohio-472 (2d Dist. Montgomery No. 25745) (pre-filing note and mortgage transfer supports standing)
- PHH Mortgage Corp. v. Unknown Heirs, 2013-Ohio-4614 (2d Dist. Montgomery No. 25617) (mortgage follows note; equitable assignment suffices)
- Bank of New York Mellon v. Loudermilk, 2013-Ohio-2296 (5th Dist.) (mortgage follows the note; standing need not require formal mortgage assignment)
- U.S. Bank Natl. Assn. v. Gray, 2013-Ohio-3340 (10th Dist.) (note transfer creates equitable mortgage security interest)
- Koch v. Geauga, 2013-Ohio-4423 (11th Dist. Geauga No. 2012-G-3084) (assignment necessity and standing discussion post-Schwartzwald)