Washington Mut. Bank v. Wallace
2014 Ohio 5317
Ohio Ct. App.2014Background
- In 1999 Wallace executed a promissory note and mortgage in favor of Norwest to buy a home; Wallace later defaulted.
- WaMu filed a foreclosure complaint on July 11, 2008, attaching the note (with no indorsements shown) and mortgage; Wallace did not answer and default judgment was entered August 20, 2008.
- Wells Fargo assigned the mortgage to WaMu on August 14, 2008 (34 days after the complaint was filed), and later WaMu purchased the property at sheriff's sale while appeals were pending.
- Wallace moved to vacate the default judgment, arguing WaMu lacked standing at the time the complaint was filed; this court initially upheld the judgment (Wallace I) but the Ohio Supreme Court reversed and remanded after deciding Schwartzwald.
- On remand the trial court dismissed the action for lack of standing/jurisdiction; WaMu and Wallace each appealed and supplemental briefing was ordered after the Ohio Supreme Court decided Kuchta, which narrowed Schwartzwald's application in collateral attacks on foreclosure judgments.
- The Twelfth District held the trial court erred to the extent it relied on the law‑of‑the‑case doctrine and reversed the dismissal, directing the trial court to reconsider Wallace’s motion consistent with Schwartzwald as modified by Kuchta.
Issues
| Issue | Plaintiff's Argument (WaMu) | Defendant's Argument (Wallace) | Held |
|---|---|---|---|
| Whether trial court erred in dismissing foreclosure for lack of standing and voiding the 2008 judgment | WaMu: trial court could consider new evidence on remand (possession of the note with blank indorsement) and was not bound by law of the case | Wallace: law of the case and prior record showed WaMu lacked standing when suit was filed; Weatherly affidavit was inadmissible | Court: law of the case did not bind trial court here; trial court erred to the extent it dismissed on that basis — remand for further proceedings consistent with Schwartzwald and Kuchta |
| Whether lack of standing at filing voids judgment for lack of subject‑matter jurisdiction in a collateral attack | WaMu: standing can be established on remand; judgment should not be collaterally voided | Wallace: lack of standing renders judgment void and subject‑matter jurisdiction lacking | Court: under Kuchta, lack of standing does not deprive common pleas court of subject‑matter jurisdiction; collateral attack via lack of standing is limited by res judicata; trial court had subject‑matter jurisdiction |
| Whether Weatherly affidavit should have been stricken as not based on personal knowledge | WaMu: affidavit supported possession/indorsement facts to satisfy Schwartzwald standard | Wallace: affidavit lacks personal knowledge and references unattached documents | Court: issues about the affidavit’s admissibility are not ripe because trial court did not evaluate it; remanded for consideration |
| Standard for assessing standing on remand after Schwartzwald and Kuchta | WaMu: trial court may accept evidence showing plaintiff held note/mortgage at filing | Wallace: remand should be decided from prior record under law of the case | Court: remand must proceed consistent with Schwartzwald but as narrowed by Kuchta — trial court should consider appropriate evidence and legal limits on collateral attacks |
Key Cases Cited
- Federal Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13 (Ohio 2012) (holding plaintiff must have standing at time complaint filed; post‑filing assignment does not cure lack of standing in a direct appeal)
- Nolan v. Nolan, 11 Ohio St.3d 1 (Ohio 1984) (explaining law‑of‑the‑case doctrine)
- Robinson v. Williams, 62 Ohio St. 401 (Ohio 1900) (noting foreclosure actions lie within common pleas court subject‑matter jurisdiction)