Cent. Mtge. Co. v. Webster
2012 Ohio 4478
Ohio Ct. App.2012Background
- Esther B. Webster executed a $109,300 promissory note to Midwest Financial & Mortgage Services, with a mortgage to MERS securing the loan.
- Esther’s transfer-on-death deed named Rita May Webster as sole beneficiary of the Canton home upon Esther’s death.
- Esther died on May 1, 2009; Central Mortgage filed a foreclosure complaint on November 12, 2009, naming Rita Webster, Stark County Treasurer, and MERS as defendants, asserting it held the note and mortgage.
- The complaint included the note with an allonge bearing three indorsements and an assignment of mortgage from MERS to Central Mortgage.
- Webster challenged Central Mortgage’s standing, arguing lack of original assignment or certified copy; trial evidence included a copy of the assignment with best evidence rule objections.
- The magistrate dismissed the case for lack of standing, and the trial court adopted the magistrate’s decision; Central Mortgage appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Central Mortgage has standing as real party in interest | Central Mortgage possessed the note indorsed in blank and the mortgage; the note secures the mortgage, so it is the real party. | A copy of the MERS-to-Central Mortgage assignment is insufficient without the original or certified copy to prove standing under Evid.R. 1002. | Yes; lack of a recorded original assignment does not defeat standing; record shows Central Mortgage is the real party. |
| Whether the trial court properly dismissed the case under Civ.R. 41(B)(2) | There was sufficient evidence to prove Central Mortgage as holder and real party; dismissal was improper. | The inability to prove an original or certified assignment warranted dismissal under Civ.R. 41(B)(2). | The dismissal was sustained but reversed on other grounds; the court found sufficient basis to treat Central Mortgage as real party. |
| Whether dismissal on the merits was proper when Central Mortgage proved its position as holder | If holder status is established, merits-based dismissal is inappropriate. | Absent original assignment, Central Mortgage cannot prove holder status to foreclose. | Dismissal on the merits was improper; the court sustained the third assignment of error and remanded. |
Key Cases Cited
- U.S. Bank Natl. Ass'n v. Marcino, 181 Ohio App.3d 328 (2009-Ohio-1178) (holder of the note and possession can establish real party in interest even without a recorded assignment)
- Lasalle Bank Natl. Ass'n v. Street, 2009-Ohio-1855 (5th Dist. 2009) (note as evidence of debt; mortgage is incidental)
- Bank of New York v. Dobbs, 2009-Ohio-4742 (5th Dist. 2009) (note transfer as equitable assignment affecting mortgage ownership)
- Duetsche Bank Natl. Trust Co. v. Hansen, 2011-Ohio-1223 (5th Dist. 2011) (UCC-based rationale for note holding and mortgage security)
- U.S. Bank v. Coffey, 2012-Ohio-721 (6th Dist. 2012) (possession of note indorsed in blank can establish real party in interest)