2014 Ohio 5818
Ohio Ct. App.2014Background
- In 2006 Perdeau executed a $119,000 promissory note to The CIT Group secured by a mortgage recorded in Lucas County; MERS was the mortgagee of record.
- In February 2012 MERS assigned the mortgage to U.S. Bank (as successor trustee for a mortgage-backed trust); U.S. Bank filed a foreclosure complaint seven days later alleging default and attaching the note, mortgage and assignment.
- U.S. Bank moved for summary judgment in March 2012 with an affidavit from a Select Portfolio Servicing officer averring U.S. Bank was owner/holder, Perdeau was in default, and required notices were sent; Perdeau did not oppose; court granted summary judgment and a foreclosure decree on June 27, 2012.
- Perdeau later filed Civ.R. 60(B) and Civ.R. 12(B)(1) motions (claimed lack of standing, fraud, attorney neglect, PSA noncompliance, and defective affidavit); the trial court denied both motions without an evidentiary hearing and Perdeau appealed.
- The Sixth District affirmed: it held lack of standing is not a Civ.R. 12(B)(1) subject-matter jurisdiction defect, Perdeau’s attorney’s inaction was imputed to him (defeating Civ.R. 60(B)(1)), and his fraud/PSA/affidavit challenges failed to plead operative facts warranting a hearing under Civ.R. 60(B)(3).
Issues
| Issue | Plaintiff's Argument (U.S. Bank) | Defendant's Argument (Perdeau) | Held |
|---|---|---|---|
| Whether the complaint should be dismissed under Civ.R. 12(B)(1) for lack of subject-matter jurisdiction because U.S. Bank lacked standing | U.S. Bank: court has jurisdiction; plaintiff raised a cognizable foreclosure claim | Perdeau: U.S. Bank was not holder/assignee at time suit filed; therefore no actual controversy or standing | Court: Denied 12(B)(1) dismissal — lack of standing does not deprive common pleas court of subject-matter jurisdiction (Civ.R.12(B)(1) inappropriate) |
| Whether relief from judgment under Civ.R. 60(B)(1) (mistake/neglect) is warranted because Perdeau’s counsel failed to oppose summary judgment | U.S. Bank: attorney neglect is imputed to client; no excusable neglect shown | Perdeau: counsel’s inaction prevented defense; he is elderly and ill, so relief should be granted | Court: Denied relief — attorney neglect imputed to Perdeau and is not excusable under GTE; fails Civ.R.60(B)(1) |
| Whether relief under Civ.R. 60(B)(3) (fraud/misrepresentation) is warranted based on alleged false affidavit, lack of endorsement, and PSA noncompliance | U.S. Bank: record (note, mortgage, assignment, affidavit) shows it had the right to enforce and met conditions precedent; affidavit is supported | Perdeau: note lacked endorsement to U.S. Bank, assignment post-dated trust closing (PSA breach), affidavit lacked personal-knowledge/payment-history detail and notice was not received | Court: Denied relief — Perdeau lacked standing to challenge PSA adherence; interlocking loan documents and assignment support transfer of note; affidavit allegations not shown false or contradicted by record; no operative facts to warrant an evidentiary hearing |
Key Cases Cited
- Morrison v. Steiner, 32 Ohio St.2d 86 (defines subject-matter jurisdiction of a court)
- GTE Automatic Elec., Inc. v. ARC Indus., Inc., 47 Ohio St.2d 146 (sets Civ.R. 60(B) excusable neglect rule and imputes attorney neglect to client)
- Link v. Wabash R.R. Co., 370 U.S. 626 (party bound by acts/omissions of chosen counsel)
- Kay v. Marc Glassman, Inc., 76 Ohio St.3d 18 (if operative facts are alleged, trial court should hold a Civ.R.60(B) hearing)
- Griffey v. Rajan, 33 Ohio St.3d 75 (standard of review for denial of Civ.R.60(B) without hearing — abuse of discretion)
- Fed. Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13 (standing to sue in foreclosure requires interest in note/mortgage at filing)