U.S. Bank v. Williams
2022 Ohio 4590
Ohio Ct. App.2022Background:
- U.S. Bank filed a foreclosure complaint (Aug. 30, 2019) asserting it held the Williamses' promissory note (indorsed in blank) and the mortgage securing it.
- U.S. Bank moved for summary judgment supported by an affidavit from Jordan Kahoalii (asset manager for servicer SN Servicing), which authenticated the note, allonges, recorded assignments, and attached a payment history showing amounts due.
- Williams disputed U.S. Bank's standing to enforce the mortgage, pointing to gaps in the recorded chain of assignments, and also argued Kahoalii’s testimony about the payoff relied on inadmissible hearsay (records from a prior servicer).
- The trial court granted summary judgment and entered a decree of foreclosure; Williams appealed.
- The appellate court held U.S. Bank had standing via equitable assignment (possession of an endorsed-in-blank note equitably assigns the mortgage) but reversed because Kahoalii’s affidavit lacked the foundation to admit prior-servicer records for the amount due.
- The case was remanded for further proceedings; the court also struck new records U.S. Bank attached on appeal as outside the trial record.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to enforce mortgage/note | U.S. Bank was the person entitled to enforce the note and thus held the mortgage (note in possession; allonges authenticated) | Gaps in recorded mortgage assignments broke the chain and deprived U.S. Bank of standing to foreclose | Held: U.S. Bank had standing — possession of an endorsed-in-blank note equitably assigned the mortgage despite defects in recorded assignments |
| Admissibility of payment history / amount due | Kahoalii’s affidavit and attached payment history establish the principal and interest owed | Kahoalii relied on a payment history created by a prior servicer without foundational testimony — hearsay not admissible under Civ.R.56(E) | Held: Reversed summary judgment as to amount due — Kahoalii failed to lay foundation for adoption of prior-servicer business records, so her testimony on amounts was inadmissible |
| Consideration of hearsay argument by trial court | U.S. Bank urged the trial court properly considered and accepted Kahoalii’s evidence | Williams argued the court failed to explicitly resolve his hearsay objection | Held: Appellate court found the trial court implicitly rejected the hearsay objection when it awarded the precise principal amount, but that rejection was erroneous as to the evidentiary foundation for the payment history |
Key Cases Cited
- Hudson v. Petrosurance, Inc., 127 Ohio St.3d 54 (summary judgment standard and de novo review)
- Dresher v. Burt, 75 Ohio St.3d 280 (moving party's initial burden in Civ.R.56)
- Deutsche Bank Natl. Trust Co. v. Holden, 147 Ohio St.3d 85 (standing in foreclosure; person entitled to enforce note vs. mortgagee for foreclosure)
- Fed. Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13 (plaintiff must have requisite stake on the date complaint filed)
- Bonacorsi v. Wheeling & Lake Erie Ry. Co., 95 Ohio St.3d 314 (affidavits must be based on personal knowledge)
- Morgan v. Eads, 104 Ohio St.3d 142 (appellate court cannot consider evidence not in trial record)
- State v. Ishmail, 54 Ohio St.2d 402 (same principle: record on appeal cannot be augmented by new matter)
- Guernsey Bank v. Milano Sports Ents., LLC, 177 Ohio App.3d 314 (appellate review limited to trial court materials)