Bank of New York Mellon v. Froimson
2013 Ohio 5574
Ohio Ct. App.2013Background
- Froimson executed a note for $63,750 in June 2004, later endorsed in blank and assigned to the Bank of New York Mellon (the bank).
- A mortgage was executed in favor of MERS as nominee for Countrywide and recorded; in July 2012 MERS assigned the mortgage to the bank.
- The Froimsons defaulted on February 2011, with the bank seeking $57,337.87 plus interest and foreclosing the property.
- A bank witness, an employee of the loan servicer Bank of America, testified to Froimons’ default based on the loan file and records; Froimons objected to lack of personal knowledge and inadmissible hearsay.
- The magistrate found the testimony admissible under Evid.R. 803(6) as a business-records exception and entered judgment for foreclose on the note and mortgage.
- The Froimsons challenged the PSA and the bank’s authority to foreclose as trustee, but the court held they lacked standing to challenge mortgage assignment and that the PSA evidence was inadequate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Admissibility of servicer testimony on default | Froimson primarily attacks hearsay; bank shows personal knowledge via servicer’s file access. | Froimson argues the witness lacked personal knowledge and records were not produced. | Testimony admissible under Evid.R. 803(6) as business records with personal knowledge. |
| Bank’s status as holder and enforcee of the note | Possession of the original note endorsed in blank makes bank holder and entitled to enforce. | Questioned whether bank proved agency or holder status via custodian chain. | Bank held the note and was entitled to enforce it. |
| Standing to challenge mortgage assignment | Unger and related precedents show assignment validity controls foreclosures; Froimsons lack standing to attack assignment. | Froimsons contend assignment may be invalid under PSA terms and impact foreclosure. | Mortgagor lacks standing to challenge mortgage assignment in foreclosure. |
| PSA terms and authority to foreclose | PSA authorized Bank of America to foreclose as servicer/agent; evidence sufficient to show authority. | Bank did not produce PSA or prove PSA terms; testimony about PSA was hearsay and inadequate. | Defense rejected; lack of PSA admission and defense burden failed; no reversible error. |
Key Cases Cited
- Hillstreet Fund III, L.P. v. Bloom, 2009-Ohio-6583 (2d Dist. Miami) (business-records exception supports servicer testimony)
- Deutsche Bank Natl. Trust Co. v. Najar, 2013-Ohio-1657 (8th Dist. Cuyahoga) (servicer testimony competent to testify regarding loan documents)
- Bank of New York Mellon Trust Co. v. Unger, 2012-Ohio-1950 (8th Dist. Cuyahoga) (mortgage assignments lack standing to challenge by debtor)
- Livonia Properties Holdings, L.L.C. v. 12976 Farmington Rd. Holdings, L.L.C., 399 F. App’x 97 (6th Cir. 2010) (assignment defenses are generally not available to debtors in foreclosures)