Case Information
*1
[Cite as
Bank of New York Mellon v. Antes
,
IN THE COURT OF APPEALS ELEVENTH APPELLATE DISTRICT TRUMBULL COUNTY, OHIO
THE BANK OF NEW YORK MELLON : O P I N I O N fka THE BANK OF NEW YORK, AS
TRUSTEE FOR THE CERTIFICATE- :
HOLDERS CWABS, INC., ASSET- CASE NO. 2014-T-0028 BACKED CERTIFICATES, SERIES :
2006-BC4,
:
Plaintiff-Appellee,
:
- vs -
:
DANNETTE L. ANTES, et al.,
:
Defendants-Appellants.
:
Civil Appeal from the Trumbull County Court of Common Pleas, Case No. 2012 CV 00717.
Judgment: Affirmed.
Matthew J. Richardson, Manley, Deas, Kochalski, L.L.C., P.O. Box 165028, Columbus, OH 43216-5028 (For Plaintiff-Appellee).
Bruce M. Broyles, 5815 Market Street, Suite 2, Youngstown, OH 44512 (For Defendants-Appellants).
CYNTHIA WESTCOTT RICE, J.
Appellants, James E. Antes and Dannette L. Antes, appeal the summary
judgment and foreclosure decree of the Trumbull County Court of Common Pleas in favor of appellee, The Bank of New York Mellon fna The Bank of New York, as trustee *2 for the certificate-holders CWABs, Inc., Asset-Backed Certificates, Series 2006-BC4 (“Bank of New York”). At issue is whether any genuine issue of material fact existed, precluding the trial court from entering summary judgment in favor of Bank of New York. For the reasons that follow, we affirm.
{¶2} On February 15, 2006, appellants obtained a mortgage loan from the Cit Group/Consumer Finance, Inc. to purchase real property in Leavittsburg, Trumbull County. On that date, appellant, Dannette L. Antes, signed a promissory note in favor of Cit Group in the amount of $71,000. Subsequently, Cit Group endorsed the note to Countrywide Home Loans, Inc. Thereafter, Countrywide endorsed the note in blank.
{¶3} On the same date appellants obtained said mortgage loan, February 15, 2006, appellants signed a mortgage in favor of Mortgage Electronic Registration Systems, Inc. (“MERS”), acting as nominee of the lender, Cit Group, in order to secure the note. The mortgage was duly recorded. On April 22, 2010, MERS assigned the mortgage to Bank of New York by
a written assignment that was duly recorded. One year later, in March 2011, appellants defaulted on the note. On
March 23, 2011, appellant, Dannette L. Antes, signed a loan modification agreement, which amended said note and mortgage by increasing the principal balance of the loan to $90,826, which included unpaid amounts due to appellants’ pre-existing default. Eight months later, in November 2011, appellants defaulted again by failing to make the November 2011 payment or any subsequent payments. Consequently, on March 28, 2012, Bank of New York filed the complaint in this action against appellants. Bank of New York alleged that it is entitled to enforce the *3 note and that MERS had assigned the mortgage to it. Bank of New York attached to the complaint copies of the note, mortgage, assignmеnt of the mortgage, and loan modification agreement.
{¶8} Appellants filed an answer, denying the material allegations of the complaint and asserting Bank of New York’s lack of standing as an affirmative defense.
{¶9} Subsequently, Bank of New York filed a motion for summary judgment supported by the affidavit of Colleen Newsome of Bank of America, Bank of New York’s loan servicer. Ms. Newsome testified by affidavit that as an officer of Bank of America, she is authorized to testify on behalf of Bank of New York. She authenticated the note, mortgage, assignment of mortgage, loan modification agreement, and the account payment history of this loan. She said that Bank of New York has “possession of the note.” She said that, based on her review of these documents, appellants defaulted on this loan by failing to make the payment due on November 1, 2011 or any subsequent payments. She said that Bank of New York had accelerated the debt and that the principal amount of the balance owed is $89,960. Appellants filed a brief in opposition. Subsequently, the trial court entered
summary judgment аnd a foreclosure decree in favor of Bank of New York. Appellants appeal the trial court’s judgment, asserting the following for
their sole assignment of error: “The trial court erred in granting summary judgment to Appellee when
there were genuine issues of material fact still in dispute.” Summary judgment is proper when: (1) there is no genuine issue of
material fact; (2) the moving рarty is entitled to judgment as a matter of law; and (3) *4 reasonable minds can come to but one conclusion, and that conclusion is adverse to the nonmoving party, that party being entitled to have the evidence construed most strongly in his favor. Civ.R. 56(C). The party seeking summary judgment on the ground that the nonmoving
party cannot prove his case bears the initial burden of informing thе trial court of the
basis for the motion and of identifying those portions of the record that demonstrate the
absence of a genuine issue of material fact on the essential elements of the nonmoving
party’s case. Dresher v. Burt ,
56(C) that affirmatively demonstrates the nonmoving party has no evidence to support his case. Dresher, supra , at 293. Such evidence includes affidavits, depositions, written admissions, and answers to interrogatories. Civ.R. 56(C). If this initial burden is not met, the motion for summary judgment must be
denied. Id . However, if the moving party meets his initial burden, the nonmoving party must then produce competent evidence showing there is a genuine issue for trial. Civ.R. 56(E). When a motion for summary judgment is made and supported as provided in Civ.R. 56, the adverse party may not rest on the mere allegations or denials of his pleadings. The adverse party’s response must set forth specific facts by affidavit or as otherwise provided by Civ.R. 56, showing that there is a genuine issue for trial. Id . If the adverse party does not so respond, summary judgment, if appropriate, shall be entered against him. . *5 Since a trial court’s ruling on a motion for summary judgment involves only
questions of law, we conduct a de novo review of the judgment. DiSanto v. Safeco Ins.
of Am .,
Ohio Constitution, Article IV, Section 4(B). “Standing to sue is part of the common
understanding of what it takes to make a justiciable cаse.” Steel Co. v. Citizens for a
Better Environment , 523 U.S. 83, 102 (1998). Standing involves a determination of
whether a party has alleged a personal stake in the outcome of the controversy to
ensure the dispute will be presented in an adversarial context. Mortgage Elec.
Registration Sys., Inc. v. Petry , 11th Dist. Portage No. 2008-P-0016,
interest in the promissory note or in the mortgage in order to have standing to invoke
the jurisdiction of the common pleas court. Fed. Home Loan Mortg. Corp. v.
Schwartzwald , 134 Ohio St.3d 13,
issue, they concede that Ms. Newsome stated in her affidavit that Bank of New York *6 “has possession of the note.” However, аppellants argue this was insufficient because, they contend, in order to be entitled to summary judgment, she was required, but failed, to expressly state that Bank of New York has possession of the original promissory note. We do not agree. In addressing this identical argument, this court in Bank of America, N.A.
v. Merlo , 11th Dist. Trumbull No. 2012-T-0103,
the note, Ms. Newsome was saying that the bank has possession of the original , as opposed to a copy, of the note. Further, Evid.R. 1003 provides that “[a] duplicate is admissible to the
same extent as an original unless (1) a genuine issue is raised as to the authenticity of
the original or (2) in the circumstances it would be unfair to admit the duplicate in lieu of
the original.” The party opposing the introduction of the duplicate has the burden of
proving that there is a genuine question as to the authenticity of the original or that it
would be unfair to admit the duplicate. Natl. City Bank v. Fleming ,
authenticity of the note attached to Ms. Newsome’s affidavit or made any showing that it would be unfair to admit a copy in lieu of the original. Moreover, there is no requirement in Civ.R. 56(E) that Bank of New York
produce the original note in order to be entitled to summary judgment. In fact, that rule
allows copies of documents to be authenticated by affidavit. Regarding documents
referenced in an affidavit, “[ s ] worn or certified copies of all papers * * * referred to in an
affidavit shall be attached to * * * the affidavit.” (Emphasis added.) . This requirement
is sаtisfied by a statement in the affidavit declaring that the documents attached are true
copies. State ex rel. Corrigan v. Seminatore ,
the promissory note because she did not say in her affidavit that the original note is kept as part of the business records or that she compared the copy of the note attached to her affidavit to the original. However, to the contrary, Ms. Newsome in her affidavit said that she has personal knowledge of how Bank of America, as servicing agent for Bank of New York, created and maintained the loan documents in this case, which are Bank of America’s business records. She also indicated that Bank of New York has possession of the original note. She said that she reviewed the note attached to her affidavit and that it is a “true and correct” copy of the business record that was created and maintained by Bank of America on behalf of Bank of New York. She thus indicated *8 that the copy of the note attached to her affidavit is a true and correct copy of the original.
{¶27} Appellants’ first issue lacks merit. For their second issue, appellants argue they created a genuine issue of fact by presenting the affidavit of appellant, Dannette L. Antes, in which she stated that after she and her husband defaulted on the mortgage loan, someone at their mortgage company tоld her they could reinstate the loan. Again, we do not agree. Appellants concede that the subject note and mortgage do not provide
them with the right to reinstate their loan after default. The Supreme Court of Ohio in
Wilborn v. Bank One Corp .,
reinstated. Upon a borrower’s default, a lender is entitled to initiate foreclosure proceedings, to be paid in full, and to sever its relationship with the defaulting borrower. A defaulting borrower’s right to reinstate the mortgage loan arises solely from the terms of the residential-mortgage contract between the parties. . at ¶18. In support of appellants’ argument that the loan was reinstated, aрpellant,
Dannette L. Antes, stated in her affidavit that in February 2012, she sent a check for
$5,000 to the Antes’ mortgage company, as they were instructed, to reinstate the loan,
but that the mortgage company returned the check to them. While appellants concede
they did not have a contractual right to reinstate the loan, they argue that becausе
someone at their mortgage company told them they could reinstate the loan by sending
them $5,000, Bank of New York cannot pursue foreclosure proceedings against them
*9
pursuant to the equitable “clean hands doctrine.” The Seventh District in Crick v. Starr ,
7th Dist. Mahoning No. 08 MA 173,
takes the initiative tо set into motion the judicial machinery to obtain some remedy but has violated good faith by [his] prior-related conduct, the court will deny the remedy.” Bean v. Bean , 14 Ohio App.3d 358, 363-364 ([10th Dist.]1983). A movant cannot obtain relief on a matter if he is “guilty of reprehensible conduct with respect to the subject matter of the suit.” Marinaro v. Major Indoor Soccer League ,81 Ohio App.3d 42 , 45 ([9th Dist.]1991). Howevеr, the movant’s conduct “must constitute reprehensible, grossly inequitable, or unconscionable conduct , rather than mere negligence, ignorance, or inappropriateness.” Wiley v. Wiley , 3d Dist. [Marion] No. 9-06-34,2007-Ohio-6423 , ¶15. (Emphasis added.) Crick, supra , at ¶38. Appellants argue that Bank of New York’s breach of its alleged agreement
to reinstate the loan amounted to unclean hands. However, they do not cite any
pertinent case law in support of this argument. Further, we do not find any hint of the
type of “reprehensible,” “unconscionable,” or “grossly inequitable” conduct, which would
suggest that Bank of New York entered equity with “unclean hands.”
Appellants’ second issue is not well taken.
For their third and final issue, appellants argue that MERS’ assignment of
the mortgage to Bank of New York did not comply with the pooling and servicing
*10
agreement between those two entities and, thus, the assignment of the mortgage to
Bank of New York was invalid. As a result, appellants argue Bank of New York did not
have an interest in the note or mortgage when the complaint was filed and, therefore,
the bank did not have standing to file this action. Once again, we do not agree.
Appellants attempt to defeat summary judgment by arguing that a genuine
factual issue exists regarding Bank of New York’s standing. In support, they contend
that MERS’ assignment of the mortgage to Bank of New York was ineffective because
the assignment did not comply with a pooling and servicing agreement between MERS
and Bank of New York. Thus, they argue that Bank of New York did not receive a valid
assignment of the mortgage and, as a result, lacked standing to file this action.
However, this court rejected this argument in Waterfall Victoria Master Fund v. Yeager ,
11th Dist. Lake No. 2012-L-071,
standing to challenge the mortgage assignment at issue here. Significantly, appellants *11 concede that no Ohio Appеllate courts have disagreed with this court’s holding in Waterfall . Thus, appellants do not cite any Ohio case law authority holding that the failure to follow the terms of a pooling and service agreement renders a mortgage assignment invalid. In addition, the pooling and servicing agreement submitted by appellants
was not properly authenticated. Appellаnts submitted a “Prospectus Supplement and
the Prospectus for the CWABS, Inc., Asset-Backed Certificates, Series 2006-BC4,
which contains a pooling and servicing agreement, in support of their argument that
Bank of New York lacked standing. According to the affidavit submitted by appellant’s
counsel, he obtained these documents from the internet by going on The Securities and
Exchange Commissions’ website. Appellants argue these documents describe the
manner in which mortgage loans, such as the instant mortgage loan, are required to be
transferred to Bank of New York. However, the Prospectus Supplement and the
Prospectus are not authenticated as required by Civ.R. 56(C), and the trial court thus
had discretion to disregard them in entering summary judgment. Lytle v. Columbus , 70
Ohio App.3d 99, 104 (10th Dist.1990); Minshall v. Cleveland Illum. Co. , 11th Dist. Lake
No. 2004-L-156,
materials demonstrating that the pooling and servicing agreement attached to their attorney’s affidavit governed the assignment of thе instant mortgage from MERS to Bank of New York or that the assignment violated its provisions. *12 In any event, any violation of the pooling and servicing agreement is
irrelevant in light of Bank of New York’s standing based on it possession of the
promissory note. The Eighth District in Deutsche Bank Natl. Trust Co. v. Najar , 8th Dist.
Cuyahoga No. 98502,
failed to comply with the terms of [that agreement] is irrelevant to [the bank's] standing as the holder of the note. By virtue of its possession of the note endorsed in blank, [the bank] was the holder of the note, and thus was a person entitled to enforce the note under Ohio law. See R.C. 1301.01(T)(1) and 1303.31(A)(1). Najar, supra , at ¶62. Here, because the note was endorsed in blank, the note was а bearer
instrument payable to anyone holding it. Bank of N.Y. Mellon v. Froimson , 8th Dist.
Cuyahoga No. 99443,
overruled. It is the judgment and order of this court that the judgment of the Trumbull County Court of Common Pleas is affirmed.
THOMAS R. WRIGHT, J., concurs,
COLLEEN MARY O’TOOLE, J., concurs in judgment only.