LSF6 Mercury REO Invests. v. Garrabrant
2014 Ohio 901
Ohio Ct. App.2014Background
- LSF6 Mercury REO Investments (appellee) sued Rick Garrabrant on Dec. 9, 2009 for foreclosure on a 1998 adjustable-rate promissory note and mortgage.
- The complaint included copies of the note and mortgage and two recorded assignments: one (June 2009) to Deutsche Bank as trustee/servicer and another (Nov. 2009) to LSF6 Mercury REO Investments Trust Series 2008‑1.
- Garrabrant moved to dismiss (denied), did not answer, and did not appear at the default-judgment hearing; the trial court entered default judgment Dec. 21, 2010, and confirmed a sheriff’s sale in March 2011.
- Garrabrant’s Civ.R. 60(B) motion to vacate was denied and that denial was affirmed on prior appeal; he then filed a common-law motion to vacate (Mar. 22, 2013) asserting the judgment was void because appellee lacked standing to prosecute the foreclosure.
- The trial court denied the common-law motion, finding appellee was the holder/real party in interest when the complaint was filed and that recorded mortgage assignments reflected intent to transfer both mortgage and note.
- Garrabrant appealed the May 22, 2013 denial; the Fifth District affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was appellee the real party in interest/entitled to enforce the note and thus had standing to bring foreclosure? | Appellee was the holder of the note and mortgage and thus the proper party to file suit. | Garrabrant argued appellee lacked standing because the note was not properly indorsed/transferred by the original lender. | Court held appellee was the holder and real party in interest when complaint filed; standing exists. |
| Does an assignment of the mortgage (without an express transfer of the note) transfer the note too when the record shows intent to keep instruments together? | Assignment of mortgage and attached documents show intent to transfer both instruments; therefore mortgage assignment suffices. | Garrabrant contended absence of express note transfer meant plaintiff could not enforce the note. | Court held the note and mortgage were intended to be kept together (note references mortgage and vice versa); mortgage assignment therefore transferred note. |
Key Cases Cited
- Patton v. Diemer, 35 Ohio St.3d 68 (Ohio 1988) (courts have inherent power to vacate void judgments independent of Civ.R. 60(B))
- GTE Automatic Elec., Inc. v. ARC Indus., Inc., 47 Ohio St.2d 146 (Ohio 1976) (standard of review for trial court decisions on post-judgment motions)
- U.S. Bank Nat’l Assn. v. Marcino, 181 Ohio App.3d 328 (Ohio App.) (current holder of note and mortgage is real party in interest in foreclosure actions)