Bank of New York Mellon v. MatthewsBank of New York Mellon v. Matthews
DECISION AND JUDGMENT
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David A. Wallace, for appellee.
Daniel P. McQuade and Shawn M. Jones, for appellants.
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JENSEN, J.
{¶ 1} This is an appeal from a judgment of the Fulton County Court of Common Pleas, granting summary judgment in favor of appellee and denying appellants’ motion to compel. For the foregoing reasons, we affirm.
{¶ 2} In November 2004, appellants Scott and Lisa Matthews purchased a home located at 720 North Glenwood Avenue in Wauseon, Ohio. To finance their purchase, appellant Scott Matthews borrowed $290,000 from Encore Credit Corporation and agreed to repay the loan in a promissory note he signed on November 5, 2004. The note called for a monthly payment amount of $2,229.85. The repayment obligations were secured by a mortgage executed by appellants Scott and Lisa Matthews on November 5, 2004.
{¶ 3} In August 2009, appellants defaulted on the payment obligations set forth in the note and mortgage. On September 2, 2009, appellee sent appellants a notice of default and a notice of intent to accelerate the note.
{¶ 4} On July 26, 2010, appellee filed a complaint in foreclosure against appellants. In the complaint, appellee asserted that it was the holder and owner of the note and mortgage. Appellee attached three exhibits to the complaint. Exhibit A is the promissory note between Scott Matthews and the lender, Encore Credit Corporation. The last page of the note provides, in part:
Allonge to Deed of Trust/Mortgage Note
For good and valuable consideration * * * the Assignor does by these presents hereby transfers and set over unto the Assignee * * * all of the rights, title and interest of said Assignor therein, which was transferred on or before the 24th day of December 2009.
For value received, Encore Credit Corp. hereby transfers, endorses and assigns to The Bank of New York Mellon FKA The Bank of New York as Successor in Interest to JPMorgan Chase Bank, N.A., as Trustee for IXIS 2005-HE2, the within Mortgage Note and Deed of Trust securing the same, so far as the same pertains to said Mortgage Note WITHOUT RECORSE.
Encore Credit Corp.
BY: [Illegible Signature]
Sandra Williams
Assistant Vice President
{¶ 5} On September 29, 2011, over a year after the case was filed, appellee was granted leave to substitute exhibit A. The substituted note included an indorsement. It states,
PAY TO THE ORDER OF ____________________________
WITHOUT RECOURSE
ENCORE CREDIT CORP.,
A CALIFORNIA CORPORATION
[Illegible Signature]
JESSIE JONES
SR. SHIPPING ANALYST
{¶ 6} The record does not indicate when the note was indorsed or when appellee came into its possession. Exhibit B to the complaint is the mortgage between appellants
This ASSIGNMENT OF MORTGAGE is made and entered into as of the 24th day of December, 2009, from Mortgage Electronic Registration Systems, Inc. acting solely as nominee for Encore Credit Corp. * * * to The Bank of New York Mellon FKY The Bank of New York as Successor in Interest to JPMorgan Chase Bank N.A., as Trustee for IXIS 2005-HE2 * * *.
This Assignment is made without recourse, representation or warranty.
Dated: APR 20, 2010
Mortgage Electronic Registration Systems, Inc., acting as nominee for Encore Credit Corp.
By: [Illegible Signature]
Name: Sandra Williams
Title: Assistant Vice President
{¶ 7} The “Assignment of Mortgage” was notarized on April 20, 2010, and recorded at the county recorder‘s office on April 29, 2010.
{¶ 8} On December 1, 2011, appellee moved for summary judgment, arguing that it had established a prima facie case of foreclosure and that it was entitled to judgment as a matter of law. On January 17, 2012, appellants filed a motion to dismiss and a motion to compel production of information regarding appellee‘s “status as holder of the note
{¶ 9} Appellants assign the following errors for our review:
I. THE TRIAL COURT ERRED BY NOT GRANTING APPELLANTS’ MOTION TO COMPEL AND THEREBY ALLOWING DISCOVERY OF DOCUMENTS RELEVANT TO THE ISSUE OF APPELLEE‘S RIGHT TO ENFORCE THE NOTE.
II. THE TRIAL COURT ERRED BY GRANTING APPELLEE‘S MOTION FOR SUMMARY JUDGMENT.
{¶ 10} First, we note that appellants have not alleged error with regard to the trial court‘s denial of their motion to dismiss. We begin with appellants’ second assignment of error. Appellants argue that appellee lacked standing to bring this suit because there is no evidence that it possessed both the note and mortgage when the complaint was filed.
{¶ 11} Recently, the Supreme Court of Ohio instructed that standing to sue in the foreclosure arena must be determined at the commencement of the suit. Fed. Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017, 979 N.E.2d 1214.
{¶ 12} Next, we address whether the trial court erred in granting appellee‘s motion for summary judgment. We review summary judgment rulings de novo, applying the same standard as the trial court. Lorain Natl. Bank v. Saratoga Apts., 61 Ohio App.3d 127, 129, 572 N.E.2d 198 (9th Dist.1989); Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996). Under
{¶ 13} To properly support a motion for summary judgment in a foreclosure action, a plaintiff must present evidentiary-quality materials showing: (1) the movant is the holder of the note and mortgage, or is a party entitled to enforce the instrument; (2) if the mover is not the original mortgagee, the chain of assignments and transfers; (3) the mortgager is in default; (4) all conditions precedent have been met; and (5) the amount of principal and interest due. U.S. Bank, N.A. v. Coffee, 6th Dist. No. E-11-026, 2012-Ohio-721, ¶ 26.
{¶ 14} Ohio‘s version of the Uniform Commercial Code (“U.C.C.“) governs who may enforce a note.
{¶ 16} In this case, the language of the note and mortgage evoke a clear intent to remain together. Indeed, the mortgage reads, in relevant part,
This Security Instrument secures to Lender: (i) the repayment of the Loan, and all renewals, extensions and modifications on the Note; and (ii) the performance of Borrowers covenants and agreements under this Security Instrument and the Note. * * *
This Note is a uniform instrument with limited variations in some jurisdictions. In addition to the protections given to the Note Holder under this Note, a Mortgage, Deed of Trust, or Security Deed (the “Security Instrument“), dated the same date as this Note, protects the Note Holder from possible losses which might result if I do not keep the promises which I make in this Note.
{¶ 18} The interlocking references of the two instruments demonstrate a clear intention of the original parties to keep the mortgage and the note together. Therefore, we find that the assignment of the mortgage transferred the note as well.
{¶ 19} In support of its motion for summary judgment, appellee filed an affidavit from Jodi A. Zook, who was authorized on behalf of appellee as an officer of Bank of America, N.A., the servicer of the loan at issue. Appellants challenge the Zook affidavit with regard to their standing argument. Given our finding that standing was established through the assignment of the mortgage, we need not address that argument. We do find, however, that the Zook affidavit is sufficient to establish the other prima facie elements of appellee‘s foreclosure case. Indeed, appellants do not challenge appellee‘s evidence that they were in default or the amount owed. Likewise, appellants do not challenge the notification and acceleration procedures used by appellee.
{¶ 20} In sum, we find that appellee established the prima facie elements of its foreclosure case, and appellants did not set forth any specific facts demonstrating a
{¶ 21} In their first assignment of error, appellants argue that the trial court should have compelled appellee to produce documents which “may show the transfer or delivery date of the Note to the Bank and the chain of transfers of the Note and assignments of the Mortgage.” The standard of review for a motion to compel is an abuse of discretion. Svoboda v. Clear Channel Communications, Inc., 156 Ohio App.3d 307, 2004-Ohio-894, 805 N.E.2d 559, ¶ 9 (6th Dist.). “Abuse of discretion” suggests more than an error of law or judgment; it implies that the court‘s attitude is unreasonable, arbitrary or unconscionable. Blakemore v. Blakemore, 5 Ohio St.3d 217, 219, 450 N.E.2d 1140 (1983).
{¶ 22} First, we note that appellants did not seek the protections of
{¶ 23} Here, because appellants failed to avail themselves of the remedy contained in
{¶ 24} Moreover, we have already found that appellee established itself as the holder of both the note and mortgage when the case was filed. As a result, appellants’ discovery requests regarding the validity or timeliness of the indorsement of the note and assignment of the mortgage are irrelevant. Appellants do not argue that there may be additional evidence they could obtain in discovery that would be pertinent to any other procedural or substantive issue in this case. In sum, we cannot say that the trial court acted unreasonably, arbitrarily or unconscionably in failing to grant appellee‘s motion to compel. Appellants’ first assignment of error is found not well-taken.
{¶ 25} Having found appellants’ assignments of error not well-taken, we hereby affirm the judgment of Fulton County Court of Common Pleas. Costs are assessed to appellants in accordance with App.R. 24.
Judgment affirmed.
A certified copy of this entry shall constitute the mandate pursuant to App.R. 27. See also 6th Dist.Loc.App.R. 4.
Mark L. Pietrykowski, J. _______________________________ JUDGE
Thomas J. Osowik, J. _______________________________
James D. Jensen, J. CONCUR. _______________________________ JUDGE
This decision is subject to further editing by the Supreme Court of Ohio‘s Reporter of Decisions. Parties interested in viewing the final reported version are advised to visit the Ohio Supreme Court‘s web site at: http://www.sconet.state.oh.us/rod/newpdf/?source=6.