THE BANK OF NEW YORK MELLON, Plаintiff-Appellee, v. WAVELENE BROCK, et al., Defendants-Appellants.
CASE NO. CA2014-01-003
IN THE COURT OF APPEALS TWELFTH APPELLATE DISTRICT OF OHIO WARREN COUNTY
7/14/2014
[Cite as Bank of New York Mellon v. Brock, 2014-Ohio-3085.]
CIVIL APPEAL FROM WARREN COUNTY COURT OF COMMON PLEAS Case No. 12 CV 81441
Doucet & Associates Co., L.P.A., Troy J. Doucet, Patrick G. Warner, 700 Stonehenge Pkwy., Suite 2B, Dublin, Ohio 43017, for defendants-appellants, Wavelene & Carlos Brock
David P. Fornshell, Warren County Prosecuting Attorney, Christopher A. Watkins, 500 Justice Drive, Lebanon, Ohio 45036, for defendant, Warren County Treasurer
HENDRICKSON, P.J.
{¶ 1} Defendants-appellants, Wavelene and Carlos Brock, appeal from a decision of the Warren County Court of Common Pleas granting summary judgment in favor of plaintiff-appellee, The Bank of New York Mellon (BONYM), on appellants’ counterclaim for violations
{¶ 2} On April 24, 2006, Wavelene executed a promissory note in favor of America‘s Wholesale Lender (AWL) in the principal amount of $262,500. Both Wavelene and her husband, Carlos, executed a mortgage in favor of Mortgage Electronic Registration Systems, Inc. (MERS), as the nominee for AWL, to secure the note. The mortgage encumbered the property located at 5350 State Route 123 in Franklin, Ohio (State Route property). This transaction allowed appellants to pay off their previous mortgage and to give approximately $80,000 in loan proceeds to their son, Jimmy D. Brock.
{¶ 3} At some point, the promissory note was endorsed in blank by Countrywide Home Loans, Inc., doing business as AWL, and the note and mortgage were assignеd to BONYM. In February 2012, BONYM filed a complaint in foreclosure. In its complaint, BONYM stated it was the holder of the promissory note secured by the mortgage on the State Route property and the note had been defaulted on in the amount of $290,693.05, together with interest at the rate of 7.25 percent per annum from June 1, 2008. BONYM further alleged it had a valid first lien on the property and sought to have the mortgage foreclosed, the property sold, and the proceeds distributed. Appellants filed an answer setting forth several defenses to the action, including asserting that BONYM did not have the right to enforce the promissory note as it was not a holder in due course and the note was not properly endorsed to BONYM. Additionally, appellants argued Wavelene was incompetent and lacked the capаcity to enter into a contract at the time of the loan transaction.
{¶ 4} Appellants also filed three counterclaims against BONYM, asserting BONYM violated the Truth in Lending Act (TILA),
{¶ 5} On November 6, 2013, BONYM moved for summary judgment, seeking to have judgment entered in its favor on its complaint in foreclosure and on appellants’ counterclaims. BONYM argued it was entitled to foreclose on appellants’ State Route property as it was the holder of the note and mortgage, appellants had failed to make their monthly installment payments, and the debt had been lawfully accelerated. With respect to appellants’ counterclaims, BONYM argued it was entitled to summary judgment as it could not be held liable under TILA and RESPA for the alleged improper conduct of a prior loan servicer and it could not be held liable under the FDCPA as it was not a “debt collector” as defined by
{¶ 6} Appellants simultaneously filed a memorandum in opposition to BONYM‘s motion for summary judgment and a motion to strike Jaffe‘s affidavit. In their motion to strike, appellants argued Jaffe‘s affidavit did not comport with the requirements of Civ.R. 56(E) as not all documents referred to in the affidavit were attached to or served with the affidavit. Appellants argued that, at a minimum, paragraphs 11 and 16 of the affidavit should be stricken as they referred to a “PSA” that was not attached to Jaffe‘s affidavit and was not otherwise introduced into evidence.
{¶ 7} In their memorandum opposing summary judgment, appellants argued genuine issues of material fact existed that made granting summary judgment improper. Specifically, appellants argued issues of fact existed as to whether Wavelene had the capacity to enter into a contract at the time the promissory note and mortgage were exеcuted, whether BONYM could be held vicariously liable for Bank of America‘s TILA and RESPA violations, and whether BONYM had obtained possession of the promissory note after appellants’ default in repayment and was therefore a “debt collector” subject to the FDCPA. In support of their memorandum in opposition, appellants attached BONYM‘s responses to discovery requests, deposition tеstimony from Jaffe, and the affidavits of Carlos, Wavelene, R. Mitchell Daniels, a retired loan officer, and Jolie S. Brams, a licensed clinical psychologist.
{¶ 8} On December 2, 2013, the trial court issued a decision denying appellants’ motion to strike Jaffe‘s affidavit. The trial court held that “the form of the Jaffe affidavit is proper under the Civil Rules as it is based on affiant‘s personal knowledge and may be offеred to support BONYM‘s motion for summary judgment.” That same day the trial court issued a decision denying in part and granting in part BONYM‘s motion for summary judgment. The trial court denied BONYM‘s motion for summary judgment on its foreclosure
{¶ 9} Two days after the trial court issued its decision on BONYM‘s motion for summary judgment, BONYM voluntarily dismissed its foreclosure complaint without prejudice. Thereafter, on December 31, 2013, the trial court issued a final appealable order entering judgment in favor of BONYM on appellants’ TILA, RESPA, and FDCPA counterclaims.
{¶ 10} Appellants timely appealed, raising two assignments of error. For ease of discussion, appеllants’ assignments of error will be addressed out of order.
{¶ 11} Assignment of Error No. 2:
{¶ 12} THE TRIAL COURT ERRED WHEN IT DID NOT STRIKE PLAINTIFF‘S AFFIDAVIT IN SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT.
{¶ 13} In their second assignment of error, appellants argue the trial court abused its discretion when it denied their motion to strike Jaffe‘s affidavit. Appellants contend BONYM relied heavily on the “PSA” to demonstrate when it became the holder of the note, but the “PSA” was not properly introduced into evidence by BONYM as it was not attached to Jaffe‘s affidаvit as required by Civ.R. 56(E).1 Because the “PSA” was not attached to the affidavit, appellants argue the affidavit should have been stricken and should not have been
{¶ 14} “The determination of a motion to strike is within the [trial] court‘s broad discretion.” State ex rel. Ebbing v. Ricketts, 133 Ohio St.3d 339, 2012-Ohio-4699, ¶ 13. An appellate court will not reverse a trial court‘s ruling on a motion to strike absent a finding that thе trial court abused its discretion. Wells Fargo Bank v. Smith, 12th Dist. Brown No. CA2012-04-006, 2013-Ohio-855, ¶ 13. An abuse of discretion constitutes more than an error of law or judgment; it requires a finding that the trial court acted unreasonably, arbitrarily, or unconscionably. Id.
{¶ 15} Civ.R. 56(C) provides an exclusive list of materials that a trial court may consider when deciding a motion for summary judgment. Id. at ¶ 15, citing State ex rel. Varnau v. Wenninger, 12th Dist. Brown No. CA2009-02-010, 2011-Ohio-3904, ¶ 7. Those materials are “pleadings, depositions, answers to interrogatories, written admissions, affidavits, transсripts of evidence, and written stipulations of fact.” Civ.R. 56(C). “[A] party may properly introduce evidence not specifically authorized by Civ.R. 56(C) by incorporating it by reference through a properly framed affidavit pursuant to Civ.R. 56(E).” Wilson v. AIG, 12th Dist. Butler No. CA2007-11-278, 2008-Ohio-5211, ¶ 29; Wenninger at ¶ 7.
{¶ 16} Pursuant to Civ.R. 56(E), “affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to tеstify as to the matters stated in the affidavit.” Personal knowledge is defined as “knowledge of the truth in regard to a particular fact or allegation, which is original, and does not depend on information or hearsay.” Re v. Kessinger, 12th Dist. Butler No. CA2007-02-044, 2008-Ohio-167, ¶ 32, citing Carlton v. Davisson, 104 Ohio App.3d 636, 646 (6th Dist.1995). Absent evidence to the contrary, an affiant‘s statement that his affidavit is based on personal knowledge will suffice to meet the requirement of Civ.R.
{¶ 17} Additionally, documents that are referred tо in an affidavit must be attached to the affidavit and must be sworn or certified copies. Civ.R. 56(E). “When an affiant relies on documents in his affidavit and does not attach those documents, the portions of the affidavit that reference those documents must be stricken.” Wells Fargo at ¶ 17, citing Third Federal S. & L. Assn. of Cleveland v. Farno, 12th Dist. Warren No. CA2012-04-028, 2012-Ohio-5245, ¶ 10.
{¶ 18} In support of its motion for summary judgment, BONYM attached the affidavit of Jaffe, in which Jaffe averred that his knowledge about appellants’ loan transaction was obtained from his review of those records relating to the loan transaction and from his “own personal knowledge” of how such documents are kept and maintained by Bayview. Jaffe explained Bayview became the servicer of appellants’ mortgage loan account on October 16, 2012, when the account was transferred from Bank of America. Jaffe stated that Bayview obtained Bank of America‘s servicing records, which were integrated into Bayview‘s system and became part of Bayview‘s business records. Jaffe then averred, in relevant part, the following:
11. All of the servicing records are maintained for [BONYM], as established by the PSA.
* * *
15. The note bears an endorsement to blank. It is endorsed by Countrywide Home Loans, Inc., doing business as America‘s Wholesale Lender.
16. The note was transferred to [BONYM] on or before May 1, 2006. The PSA with the loan schedule attached sets forth that the loan was transferred into the trust at that time. [BONYM] had physical possession of the note. It was stored in a secure facility maintained by Countrywide at the direction of [BONYM].
* * *
23. The mortgage was assigned to [BONYM] by an assignment dated September 11, 2008 * * *. A true and accurate copy of the assignment is attached as Exhibit G and incorporated herein.
* * *
25. The mortgage loan account first experienced delinquency when the June 2006 payment was returned as having insufficient funds. A true and accurate copy of the payment history is attached as Exhibit H and incorporated herein.
26. On October 17, 2006 Countrywide issued a notice of default and intent to accelerate to Ms. Brock because she failed to make her September and October 2006 payments. A true and accurate copy of the notice is attached as Exhibit I and incorporated herein.
(Emphasis added.)
{¶ 19} The “PSA” referenced in paragraphs 11 and 16 was not attached to Jaffe‘s affidavit. From Jaffe‘s statements in these two paragraphs, it is clear that the “PSA” was utilized by him in determining when the note was transferred to BONYM and when servicing of the account for the benefit of BONYM сommenced. As such, the “PSA” was required by Civ.R. 56(E) to be attached to the affidavit.
{¶ 20} We therefore find that the trial court abused its discretion by admitting those portions of Jaffe‘s affidavit that relied on his review of the “PSA” as the “PSA” was not attached to the affidavit. Accordingly, we find that paragraphs 11 and 16 should have been stricken. The remaining portions of the affidavit, however, were properly admitted by the trial cоurt.
{¶ 21} Appellants’ second assignment of error is therefore sustained to the extent that paragraphs 11 and 16 of Jaffe‘s affidavit should have been stricken. Such paragraphs shall not be considered in our de novo review of BONYM‘s motion for summary judgment on appellants’ FDCPA counterclaim.
{¶ 22} Assignment of Error No. 1:
{¶ 24} In their first assignment of error, appellants argue the trial court erred by entering summary judgment in BONYM‘s favor on their counterсlaim for violations of the FDCPA. Appellants contend that, contrary to the trial court‘s holding, genuine issues of material fact remain as to when BONYM became the holder of the promissory note and whether appellants were in default on the terms of the note at the time BONYM became the holder of the note. Appellants argue Jaffe‘s deposition testimony that he did not know where the note was located as of the date the complaint was filed (February 3, 2012) or the date of his deposition (April 17, 2013) combined with the fact that BONYM was not assigned the mortgage until September 2008, “casts doubt on when BONYM came into possession of the original note, and therefore, whether they were a holder before the time of default as required to be exempt from the FDCPA.”2
{¶ 25} This court‘s review of a trial court‘s ruling оn a motion for summary judgment is de novo. Grizinski v. Am. Express Fin. Advisors, Inc., 187 Ohio App.3d 393, 2010-Ohio-1945, ¶ 14 (12th Dist.). “De novo review means that this court uses the same standard that the trial court should have used, and we examine the evidence to determine whether as a matter of law no genuine issues exist for trial.” Morris v. Dobbins Nursing Home, 12th Dist. Clermont No. CA2010-12-102, 2011-Ohio-3014, ¶ 14, citing Brewer v. Cleveland Bd. of Edn.,
{¶ 26} To prevail on a motion for summary judgment, the moving party must be able to point to evidentiary materials that show there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Dresher v. Burt, 75 Ohio St.3d 280, 293 (1996). “If the moving party fails to satisfy its initial burden, the motion for summary judgment must be denied.” Id. However, if the moving party meets its burden, the burden then shifts to the nonmoving party to present evidence demonstrating that some issue of material fact remains to be resolved. Id. “All evidence submitted in connection with a motion for summary judgment must be construed most strongly in favor of the party against whom the motion is made.” Dobbins Nursing Home at ¶ 15, citing Morris v. First Natl. Bank & Trust Co., 21 Ohio St.2d 25, 28 (1970).
{¶ 27} To establish a claim under the FDCPA, “a plaintiff must establish that: (1) he or she is a ‘cоnsumer’ as defined by
{¶ 28} A “debt collector” is defined by the FDCPA as “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or
{¶ 29} BONYM contends summary judgment is appropriate because it is not a “debt collector” as defined by
{¶ 30} Accordingly, we sustain appellants’ first assignment of error and reverse the grant of summary judgment to BONYM on appellants’ FDCPA counterclaim as BONYM failed to satisfy its initial burden for summary judgment. See Farno, 2012-Ohio-5245 at ¶ 13 (“summary judgment is nоt appropriate as [the moving party] failed to satisfy its initial burden for summary judgment when the last three paragraphs of [the moving party‘s] affidavit for summary judgment are stricken and none of the pertinent material was provided in the record to the trial court“); Dresher, 75 Ohio St.3d at 293.
{¶ 31} Judgment reversed and this cause remanded to the trial court for further proceedings in accordance with the law and consistent with this opinion.
S. POWELL and M. POWELL, JJ., concur.