Bank of New York Mellon v. Crates
2016 Ohio 2700
Ohio Ct. App.2016Background
- In 2002 James Crates executed a $184,000 promissory note to Centex and a mortgage on Granville, Ohio property; the note was indorsed in blank by allonge.
- Centex later became Nationstar; Crates executed a loan modification with Nationstar in 2010 after default, which brought the account current for a time.
- Nationstar sent a default notice in July 2013; Crates did not cure. Centex assigned the mortgage to The Bank of New York Mellon (appellee) on January 14, 2015.
- Appellee filed a foreclosure complaint on February 13, 2015, attaching copies of the note (with indorsement in blank), mortgage, modification, and assignment; defendants (Crates and Gussler) answered, asserting lack of standing and res judicata.
- Appellee moved for summary judgment; defendants countered that appellee lacked possession of the original note when the complaint was filed. Appellee later submitted an affidavit with the reply attesting it possessed the original note at filing.
- Trial court granted summary judgment and decree of foreclosure for appellee; defendants appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether res judicata barred the foreclosure | Bank did not raise res judicata; foreclosure permissible | Crates: prior voluntary dismissals invoked two-dismissal res judicata rule | Court: Defendants waived two-dismissal res judicata by not presenting docket evidence or raising it during summary-judgment proceedings; defense overruled |
| Whether appellee had standing/possession of the note when complaint filed | Bank produced business-records affidavit and later affidavit (in reply) stating it possessed the original note at filing | Crates: initial affidavits did not expressly show possession; reply evidence was new and amounts to "summary-judgment by ambush" | Court: Nguende affidavit in reply directly addressed defendants' motion; defendants did not move to strike or seek leave to file a surreply, so any error was waived; summary judgment for Bank affirmed |
Key Cases Cited
- Smiddy v. The Wedding Party, Inc., 30 Ohio St.3d 35 (1987) (standard for appellate review of summary judgment)
- Vahila v. Hall, 77 Ohio St.3d 421 (1997) (burden-shifting framework for Civ.R. 56 motions)
- Dresher v. Burt, 75 Ohio St.3d 280 (1996) (requiring the movant to specifically point to evidence showing absence of a genuine issue of material fact)