THE BANK OF NEW YORK MELLON, f.k.a. THE BANK OF NEW YORK as Trustee For The Certificate Holders, CWALT, Inc., Asset-Backed Certificates, Series 2004-16CB, Plaintiff-Appellant, vs. MARY A. MARTIN, and DONALD L. PARKS, a.k.a. DONALD L. PARKS, JR., Defendants-Appellees, and NATIONAL CITY BANK, Defendant.
APPEAL NO. C-140314
TRIAL NO. A-0900779
IN THE COURT OF APPEALS FIRST APPELLATE DISTRICT OF OHIO HAMILTON COUNTY, OHIO
June 26, 2015
2015-Ohio-2531
CUNNINGHAM, Judge.
Civil Appeal From: Hamilton County Court of Common Pleas
Judgment Appealed From Is: Reversed
Wood & Lamping LLP and Kevin K. Frank, for Defendants-Appellees.
Please note: this case has been removed from the accelerated calendar.
O P I N I O N.
{¶1} On July 1, 2010, the trial court entered judgment in favor of plaintiff-appellant, The Bank of New York Mellon, f.k.a. The Bank of New York, as trustee for the certificate holders, CWALT, Inc., Asset-Backed Certificates, Series 2004-16CB (Bank of New York), on its complaint in foreclosure against defendants-appellees, Mary A. Martin and Donald L. Parks, a.k.a. Donald L. Parks, Jr., (Martin and Parks). While Martin and Parks had raised the issue of standing before judgment, they did not pursue an appeal from that judgment.
{¶2} Four years later, the trial court granted Martin and Parks’
{¶3} Because Martin and Parks had filed a
Martin and Parks Default in Mid-2008
{¶4} In 2004, Martin and Parks purchased a home in Harrison, Ohio, financed through All State Home Mortgage Inc. Martin executed a promissory note in the amount of $279,000 in favor of All State Home Mortgage. From the copy of the note attached to the complaint, it appears that Parks’ signature had been crossed out and the initials MM have been written near the correction. The note was secured by a mortgage, also in favor of All State Home Mortgage. The mortgage was signed by both Martin and Parks.
{¶5} By mid-2008, Martin and Parks had defaulted on their repayment obligations.
{¶6} In January 2009, Bank of New York, claiming to be the current holder of the note and mortgage, filed this action against Martin and Parks. The bank sought judgment on the note and foreclosure on the mortgage. As provided in the loan documents, Bank of New York accelerated repayment of the note. The principal due was $262,500, plus interest from August 1, 2008. The bank attached the original mortgage and note to the complaint. The record certified for our review does not indicate that Martin and Parks filed an answer to the complaint.
{¶7} In July 2009, Bank of New York moved for both default and summary judgment supported by the affidavit of Denise Bailey of Litton Loan Servicing, the bank’s loan servicer. Bailey stated that Bank of New York was the holder of the note as well as the assignee of the mortgage. She stated that Martin and Parks were in default and that $262,500 was due. The bank also filed an allonge, and a recorded assignment of mortgage, executed one month prior to the filing of the complaint, which together purported to transfer the note and mortgage to Bank of New York. The motions were referred to a magistrate for resolution.
Martin and Parks First Challenge Standing in August 2009
{¶8} Martin and Parks did not oppose Bank of New York’s summary-judgment motion. In August 2009, the magistrate granted summary judgment to Bank of New York. Finally, Martin and Parks made an appearance pro se, and filed a brief objection to the magistrate’s decision stating that the note containing Parks’ signature had been defaced and altered without their knowledge. The trial court ordered the magistrate to hold a hearing on the matter.
{¶9} Two days before the December 2009 hearing, Martin and Parks filed a motion to dismiss the complaint on grounds that Bank of New York had committed a fraud upon the court when it brought this action with knowledge prior to the [filing of the complaint, that it lacked] standing and [could not] prove ownership of
{¶10} At the hearing, Parks argued that Bank of New York lacked standing to prosecute the foreclosure action because the assignments had been filed after the commencement of the action. Parks reiterated that his name had been scratched off the note without his knowledge.
{¶11} Nonetheless, the magistrate issued a December 17, 2009 decision denying Martin and Parks’ motions, and again granting summary judgment to Bank of New York. Construing the facts most strongly against the bank, the magistrate determined that no questions of material fact remained as to whether Martin and Parks were in default, whether they owed $262,566.60 plus interest from August 1, 2008, and whether Bank of New York was the holder of the note and mortgage. The magistrate concluded that Bank of New York was entitled to judgment and a decree in foreclosure.
{¶12} Martin and Parks, still appearing pro se, filed an objection to the magistrate’s decision in which Martin declared that I have the right to know that the foreclosing bank is the bank that holds the note. Once assured of that fact, Martin stated that she would apply for a loan modification.
{¶13} On July 1, 2010, the trial court journalized an order overruling the objection and adopting the magistrate’s December 17, 2009 decision granting summary judgment to Bank of New York.
Martin and Parks Forgo Appeal of the July 2010 Judgment
{¶14} Having retained legal counsel, Martin and Parks filed a timely notice of appeal from the trial court’s judgment. In the body of their notice of appeal, Martin and Parks offered an unnecessarily detailed explanation of the basis of their
{¶15} Two months later, Martin and Parks voluntarily dismissed their appeal. The record on review provides no explanation for this action.
Four Years Later, The Trial Court Sets Aside Its July 2010 Judgment
{¶16} In August 2011, 11 months after dismissing the appeal, Martin filed a petition for bankruptcy, and Bank of New York provided notice of an automatic stay of the proceedings under
{¶17} In their
{¶18} In May 2013, the magistrate denied the motion for relief from judgment. At Martin and Parks’ request, the magistrate prepared findings of fact and conclusions of law, including his conclusions that their motion had not been timely filed and that Martin and Parks had failed to set forth evidence of a
{¶19} One year later, the trial court sustained Martin and Parks’ objections. The trial court explained that since a party’s lack of standing in a foreclosure action renders any judgment void for lack of subject-matter jurisdiction, Martin and Parks’ challenge to Bank of New York’s standing had not been waived and could be raised at any time, even by a motion to set aside the judgment.
{¶20} Ratifying the argument that Martin and Parks had made throughout the proceedings, the court found that Bank of New York may have acquired the note after the complaint had been filed, and that the allonge purporting to assign interest in the note was defective. Since a foreclosing plaintiff must have standing at the time a suit is commenced, see Fed. Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017, 979 N.E.2d 1214, ¶ 3, the trial court ordered its July 2010 judgment set aside and dismissed Bank of New York’s then five-year-old complaint without prejudice. Bank of New York timely appealed.
Can Standing Be Challenged By A Civ.R. 60(B) Motion?
{¶21} In two interrelated assignments of error, Bank of New York contends that the trial court erred in granting Martin and Parks’
{¶22} As a preliminary matter, we note that on appeal Martin and Parks maintain that the trial court properly granted their
{¶23} Were we to adopt this position, Martin and Parks’ victory would be a hollow one indeed. Under
{¶24} Martin and Parks’ objection to the 2010 judgment, as expressed in oral argument, was that the judgment was so short that they could not discern the basis for the trial court’s decision. But there is no requirement that the trial court explain or justify its ruling. E.g., Alexander v. LJF Mgt., 1st Dist. Hamilton No. C-090091, 2010-Ohio-2763, ¶ 13 (holding that
Kuchta and Relief Under Civ.R. 60(B)
{¶25} To succeed on a motion for relief from judgment under
{¶27} Without deciding whether there was any justification for an 18-month delay in filing the
{¶28} In Bank of Am., N.A. v. Kuchta, 141 Ohio St.3d 75, 2014-Ohio-4275, 21 N.E.3d 1040, the Ohio Supreme Court recently answered that inquiry in the negative. In Kuchta, after the bank seeking foreclosure had filed its complaint, it filed evidence reflecting that assignment of the note and mortgage had occurred after the filing of the complaint. Id. at ¶ 2-3. The homeowners answered the foreclosure complaint and asserted that the bank lacked standing. Id. But the homeowners failed to respond to the bank’s summary-judgment motion and did not pursue an appeal from the judgment. Id. at ¶ 3-4.
{¶29} The homeowners ultimately sought relief from judgment pursuant to
{¶30} The Ohio Supreme Court rejected the argument that a party’s lack of standing in a foreclosure action renders the judgment void ab initio for lack of subject-matter jurisdiction. While standing is required in order to invoke the jurisdiction of the court over a particular action, lack of standing does not affect the subject-matter jurisdiction of the court. Id. at paragraph three of the syllabus.
{¶31} The court continued that because the alleged fraud and misconduct by the bank had not prevented the homeowners from appearing and raising defenses, including lack of standing, the homeowners had not established their entitlement to relief due to fraud under
{¶32} It is well established that a
{¶33} While Martin and Parks’ motion for relief from judgment was brought under
Martin and Parks Not Entitled to Relief Under Civ.R. 60(B)
{¶34} Here, as in Kuchta, the homeowners filed a
{¶35} Martin and Parks could not rely on their standing argument to vacate the adverse foreclosure judgment pursuant to
{¶36} Because Martin and Parks cannot establish that they are entitled to relief under
Conclusion
{¶37} Having sustained Bank of New York’s assignments of error, we reverse the May 4, 2014 judgment of the trial court granting Martin and Parks’
Judgment reversed.
HENDON, P.J., and FISCHER, J., concur.
Please note: The court has recorded its own entry on the date of the release of this opinion.