Bank of New York Mellon v. Argo
2015 Ohio 268
Ohio Ct. App.2015Background
- Bank of New York Mellon (Bank) sued Barry and Lynn Argo on Feb. 1, 2012 seeking foreclosure on a 2005 note and mortgage for property in Shelby, Ohio. Bank attached the note, mortgage, and a 2011 assignment of mortgage to its complaint.
- The original lender was Residential Finance; the recorded mortgage named MERS as mortgagee/nominee for Residential Finance. An assignment recorded Oct. 26, 2011 transferred the mortgage ("together with the note") to Bank.
- Bank moved for summary judgment with an affidavit from a Document Control Officer at Bank’s loan servicer and attached loan documents (including an allonge to the note). Appellants opposed, offering a pro se affidavit asserting attempts to obtain a loan modification.
- Trial court granted summary judgment and entered a decree of foreclosure on June 23, 2014. Appellants appealed only the grant of summary judgment.
- The appellate court addressed: (1) whether Bank was the real party in interest/holder entitled to enforce the note; (2) validity of the MERS assignment; (3) sufficiency of the servicer’s affidavit under Civ. R. 56 and business-records hearsay exception; and (4) equitable defense based on attempted loan modification.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing / real party in interest to foreclose | Bank is a person entitled to enforce the note and mortgage; attached assignment and servicer affidavit show ownership/possession of loan. | Argo: Bank was not holder at filing; assignment of mortgage alone is insufficient without assignment of the note. | Bank had standing: assignment and documents show intent to transfer note and mortgage; Bank was real party in interest. |
| Validity of MERS assignment | Assignment by MERS (as nominee) validly transferred beneficial interest in mortgage (and note). | Argo: MERS lacked interest and Bank failed to prove MERS was nominee of lender. | Assignment valid: mortgage expressly names MERS as nominee; borrower acknowledged MERS’s rights; no dispute between assignor and assignee. |
| Admissibility / sufficiency of servicer affidavit | Affiant is Document Control Officer with access to loan records; her affidavit and attached business records qualify under Civ. R. 56 and Evid. R. 803(6). | Argo: Affidavit lacks personal knowledge and access to collateral file; different copies of note/allonge raise issues. | Affidavit sufficient: affiant reviewed loan records and described basis for knowledge; Argo submitted no contrary Civ. R. 56 evidence. |
| Equitable defense (loan modification attempts) | Bank: no evidence of payment or acceptance that would make foreclosure inequitable. | Argo: attempted loan modification and desire to save home make foreclosure inequitable (citing PHH v. Barker). | Equities do not favor Argo: no evidence of payments curing default or Bank’s acceptance; foreclosure not inequitable. |
Key Cases Cited
- Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 70 (Ohio 2012) (plaintiff must show interest in note or mortgage at time suit filed)
- Hounshell v. Am. States Ins. Co., 67 Ohio St.2d 427 (Ohio 1981) (summary judgment standards and construing evidence for nonmoving party)
- Inland Refuse Transfer Co. v. Browning-Ferris Inds. of Ohio, Inc., 15 Ohio St.3d 321 (Ohio 1984) (court may not resolve ambiguities on summary judgment)
- Drescher v. Burt, 75 Ohio St.3d 280 (Ohio 1996) (movant’s initial burden on summary judgment and burden shift to nonmoving party)
- Smiddy v. The Wedding Party, Inc., 30 Ohio St.3d 35 (Ohio 1987) (appellate review of summary judgment is de novo)