Wells Fargo Bank, Natl. Assn. v. Elliott
2013 Ohio 3690
Ohio Ct. App.2013Background
- Elliott signed a promissory note for $162,000 and a mortgage on 6207 Charmar Drive, Westerville, with MERS as nominee for the lender Ethical Mortgage Lending.
- An Assignment of Mortgage recorded January 12, 2011 transferred the mortgage from MERS (as nominee) to Wells Fargo Bank, N.A., as Trustee for Bear Stearns Asset Backed Securities I LLC, Series 2007-AC2.
- Wells Fargo filed a foreclosure complaint on September 30, 2011, attaching the 2006 note and mortgage; the note bore no endorsement transfer.
- The trial court granted default judgment and a decree of foreclosure on April 19, 2012, and scheduled a sheriff’s sale; Elliott did not appeal the decree.
- Elliott petitioned for dismissal under Civil Rule 12(B)(1) on November 9, 2012; the trial court denied the motion on February 4, 2013, ruling Wells Fargo had standing at filing.
- A sheriff’s sale was scheduled for December 12, 2012, and Elliott later filed for Chapter 7 bankruptcy; Wells Fargo obtained relief from the stay in August 2012.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 12(B)(1) dismisses for lack of subject matter jurisdiction rules apply to standing. | Ellliott argues lack of standing challenges come under 12(B)(1). | Wells Fargo argues standing is distinct from subject matter jurisdiction and was established by the 2011 mortgage assignment. | 12(B)(1) cannot dismiss for lack of standing; jurisdiction existed via assignment. |
| Did the mortgage assignment pre-file transfer give Wells Fargo standing to sue? | Elliott contends no proper transfer of note; hence no standing. | Assignment of mortgage (recorded 2011) transferred both mortgage and note due to intent to transfer both. | Assignment pre-file transferred both note and mortgage; Wells Fargo had standing. |
| Was MERS authority to assign the mortgage proper in this case? | MERS could not assign; no valid transfer of the note. | Mortgage explicitly identifies MERS as nominee; MERS had authority to assign on behalf of Ethical Mortgage. | MERS could assign; authority existed; transfer valid. |
| Does Schwartzwald allow challenging standing at any time, overriding 12(B)(1) dismissal rules? | Schwartzwald holds standing can be raised during pendency. | Nichpor-post-judgment decision renders case not pending; Schwartzwald does not require 12(B)(1) dismissal here. | Schwartzwald does not mandate dismissal under 12(B)(1); standing can be raised during proceedings. |
Key Cases Cited
- U.S. v. Cotton, 535 F.3d 625 (U.S. (2008)) (standing challenges may be raised at any time)
- State ex rel. Tubbs Jones v. Suster, 84 Ohio St.3d 70 (Ohio 1998) (distinguishes standing from subject-matter jurisdiction)
- Pratts v. Hurley, 102 Ohio St.3d 81 (Ohio 2004) (defines subject-matter jurisdiction)
- Schwartzwald, 134 Ohio St.3d 13 (2012 Ohio-5017) (standing may be raised during pendency; post-assignment standing issues)
- Countrywide Home Loans Servicing v. Nichpor, 990 N.E.2d 565 (Ohio 2013) (treatment of judgments and pendency for standing)
- Bank of New York v. Dobbs, 2009-Ohio-4742 (5th Dist. 2009) (assignment of mortgage can transfer note where intent indicates)
- Self Help Ventures Fund v. Jones, 2013-Ohio-868 (11th Dist. 2013) (assignment of mortgage may transfer contemporaneous note)