U.S. Bank N.A. v. Stocks
2017 Ohio 8108
| Ohio Ct. App. | 2017Background
- U.S. Bank sued Eleanor and James Stocks (May 2012) to foreclose a mortgage on 4755 Fawnwood Road, Dayton, arising from a 2006 adjustable-rate note executed by Eleanor and secured by a mortgage signed by both Stockses. The Stockses admitted signing the note (Eleanor) and mortgage (both).
- The note was endorsed in blank (undated allonge). Mortgage named MERS as mortgagee nominee; a corrective assignment to U.S. Bank was recorded in 2012. U.S. Bank alleged it held the original note and was entitled to enforce it.
- Servicing history: loan was non-escrow initially; Chase (as servicer) paid delinquent taxes in March 2008 and later created an escrow, then notified borrowers of an escrow shortage in Aug. 2011. Payments in Aug–Nov 2011 were returned/placed in suspense; U.S. Bank sent notice of default Oct. 31, 2011 and accelerated the loan.
- U.S. Bank moved for summary judgment (Feb. 2013) attaching servicer affidavits and business records (payment history, breach letter, assignment, escrow statements). Stockses opposed, arguing bank-caused default (unnecessary tax payments; reversed/late posting of payments; improper lender-placed insurance) and predatory lending; they submitted affidavits and county records.
- Trial court struck many of the Stockses’ exhibits for lack of authentication, found U.S. Bank’s affiants properly authenticated Chase records under Evid.R. 803(6), concluded the mortgage was valid between parties despite notary-block irregularities, found Stockses in default, granted summary judgment and a decree of foreclosure; this appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing / authentication of servicer affidavits and business records | U.S. Bank: Chase affiants have personal knowledge of Chase’s recordkeeping, authenticated records as business records; U.S. Bank holds the endorsed note and is assignee of the mortgage | Stocks: Affiants lack personal knowledge about predecessor servicers (CIT, WaMu); records not properly authenticated; some statements false | Court: Affiants sufficiently vouched for Chase’s records; business-records exception applies; U.S. Bank established holder/assignee status and entitlement to enforce note |
| Existence of default / amount due | U.S. Bank: payment history and affidavits show returned/insufficient funds, escrow shortage, cure options offered, no post-acceleration cure; amount due shown | Stocks: Bank’s actions (unnecessary tax payments, reversing deposits, late withdrawals) caused default; submitted county tax plans and canceled check | Court: Payment history corroborates returned payment and escrow shortage; Stockses failed to raise genuine dispute of material fact on default |
| Validity of mortgage (notary/acknowledgment irregularities; identity of mortgagors) | U.S. Bank: Mortgage valid as between parties who executed it; admissions in defendants’ answer authenticate documents; substantial-compliance/non-fraud rule controls | Stocks: Notary block omitted mortgagors’ names and rider lists spouse as non-obligor —mortgage defective and invalid for recordation | Court: Mortgage valid between parties despite acknowledgment omission; Stockses admitted mortgage’s validity in their answer; absent fraud, defect in acknowledgment does not defeat instrument between parties |
| Admissibility of predecessor servicer documents (WaMu tax checks, etc.) | U.S. Bank: WaMu checks and other predecessor records were incorporated into Chase’s business records after asset transfer; admissible under adoptive/business-records rationale | Stocks: Predecessor records not authenticated by original custodian; thus inadmissible hearsay | Court: Chase affidavits and Hall affidavit showed incorporation of predecessor records into Chase records; admissible as business records and considered by court |
Key Cases Cited
- Citizens Natl. Bank v. Denison, 165 Ohio St. 89 (Ohio 1956) (a defectively executed conveyance of land is valid between the parties in the absence of fraud)
- Grafton v. Ohio Edison Co., 77 Ohio St.3d 102 (Ohio 1996) (standard for de novo appellate review of summary judgment)
- Mitseff v. Wheeler, 38 Ohio St.3d 112 (Ohio 1988) (moving party’s initial burden in summary judgment litigation)
- Hudson v. Petrosurance, Inc., 127 Ohio St.3d 54 (Ohio 2010) (summary-judgment standards clarified)
- Seabrooke v. Garcia, 7 Ohio App.3d 167 (Ohio Ct. App. 1982) (recognizing the rule that defective acknowledgments do not void conveyances between the parties)