CHEMICAL BANK, N.A. v. FRANK A. KRAWCZYK, ET AL.
No. 98263
Court of Appeals of Ohio, EIGHTH APPELLATE DISTRICT, COUNTY OF CUYAHOGA
August 22, 2013
2013-Ohio-3614
Stewart, A.J., Boyle, J., and Kilbane, J.
JOURNAL ENTRY AND OPINION; Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-700783; JUDGMENT: AFFIRMED; RELEASED AND JOURNALIZED: August 22, 2013
Daniel L. McGookey
Lauren McGookey
Kathryn M. Eyster
McGookey Law Offices, L.L.C.
225 Meigs Street
Sandusky, OH 44870
ATTORNEYS FOR APPELLEE CHEMICAL BANK, N.A.
Chris E. Manolis
Phillip C. Barragate
Ashlyn Heider
Shapiro, Van Ess, Phillips & Barragate, L.L.P.
4805 Montgomery Road, Suite 320
Norwood, OH 45212
FOR APPELLEE CITIBANK, N.A.
Citibank, N.A.
111 Wall Street, 5th Floor
Zone 2
New York, NY 10043
ATTORNEYS FOR APPELLEE UNITED STATES OF AMERICA
Steven M. Dettelbach
United States Attorney
Northern District of Ohio
BY: Kent W. Penhallurick
Assistant United States Attorney
U.S. Courthouse, Suite 400
801 West Superior Avenue
Cleveland, OH 44113
Mike DeWine
Ohio Attorney General
BY: Nicole R. Randall
Assistant Attorney General
150 East Gay Street, 21st Floor
Columbus, OH 43215
{¶1} Frank Krawczyk appeals from the denial of his motion to vacate a decree of foreclosure entered in favor of Chemical Bank. We affirm the decision of the trial court.
{¶2} On December 14, 1999, Frank Krawczyk purchased a home in North Royalton, Ohio, and entered into a mortgage agreement with Republic Bank, secured by mortgages on a parcel located on West 130th Street in North Royalton, and a parcel located on Bunts Road in Lakewood. Krawczyk also signed an adjustable rate note in the amount of $202,500 payable to the order of Republic Bank. In April 2007, Chemical Bank bought Republic Bank.
{¶3} On August 5, 2009, Chemical Bank filed a complaint in foreclosure, alleging that it was the owner and holder of the promissory note following the July 29, 2009 assignment and transfer of the note from Republic Bank, that Krawczyk was in default of his payment obligations under the note, and that the entire principal of $180,444.90 plus interest was due. A copy of the July 29, 2009 assignment, which transferred both the mortgage and the promissory note to Chemical Bank, was appended as an exhibit to Chemical Bank‘s complaint. A copy of the Republic Bank note, with no endorsement, and a copy of the mortgage agreement were also appended to the complaint.
{¶4} On December 10, 2009, Chemical Bank filed a motion for summary judgment in which it presented evidence that Krawczyk was in default of paying the loan and that the entire principal was therefore due. Chemical Bank attached copies of the unendorsed
{¶5} On February 25, 2010, the foreclosure magistrate determined that Chemical Bank‘s motion for summary judgment was properly supported and recommended that the court grant the motion. The trial court adopted this decision on March 25, 2010.
{¶6} On May 25, 2010, Krawczyk filed a motion for relief from judgment under
{¶7} On January 4, 2012, the magistrate issued a decision denying the motion for relief from judgment. The magistrate noted:
In this case, the record contains an assignment instrument that was dated and filed to the public record prior to the filing date of the complaint. The terms of the assignment purport to transfer both the note and the mortgage to plaintiff. These are the same facts that were presented in [Deutsche Bank Natl. Trust Co. v.] Gardner [8th Dist. Cuyahoga No. 92916, 2010-Ohio-663]. Further, as in the Gardner case, there is other evidence in the record to support this court‘s judgment, notably the affidavit submitted
with plaintiff‘s summary judgment motion, which states that plaintiff held the note and mortgage.
{¶8} Krawczyk now appeals and assigns as error for our review: The trial court erred in denying Mr. Krawczyk‘s motion for relief from judgment.
{¶9} Krawczyk insists that he is entitled to relief from judgment under
{¶10} First, it is clear that Krawczyk is attempting to use a motion for relief from judgment as a substitute for a timely appeal. Furthermore, the trial court was presented with sufficient evidence to demonstrate that Chemical Bank is the real party in interest with standing to foreclose.
{¶11} More background on the procedural history of the case helps to highlight the first point. When Chemical Bank filed its complaint against Krawczyk, the bank sued him in his personal capacity and in the capacity of managing trustee of a trust estate. The complaint also named as defendants the state of Ohio Department of Taxation, the United States of America, and Citibank N.A., Trustee. The docket indicates that all defendants were successfully served approximately two weeks later; that the state of Ohio and the United States timely filed answers to the complaint; and that Citibank N.A. and Krawczyk, in either capacity, did not file answers.
{¶13} When the court scheduled a hearing on the motion for default judgment, it held in abeyance the other motions pending before it. After the hearing, the magistrate issued three separate decisions on February 25, 2010. The first decision denied Krawczyk‘s motion to dismiss, the second granted the bank‘s motion for summary judgment, and the third granted default against the nonanswering parties (Citibank N.A.
{¶14} On March 1, 2010, Krawczyk moved the court to set aside the default judgment. This motion was denied on March 4, 2010, because default judgment was not entered against Krawczyk. The court adopted the magistrate‘s decisions by separate order on March 25, 2010, and included
{¶15} Krawczyk did not appeal the trial court‘s March 25 order. Instead, on April 12, 2010, he filed an untimely objection to the magistrate‘s decision on the bank‘s motion for summary judgment. The bank filed a reply to Krawczyk‘s objection, however, the court never addressed the matter because a final order had been entered.
{¶16} On May 25, 2010, a notice of appearance of counsel was filed on behalf of Krawczyk in both of his capacities, along with the motion that is the subject of this appeal. As previously noted, the motion challenged the evidence presented by the bank that demonstrated it was entitled to bring this action against Krawczyk and thus challenged the trial court‘s jurisdiction to decide the matter. These challenges, however, needed to be made by appealing the trial court‘s March 25, 2010 decision. That decision was a final, appealable order. Having missed the deadline for filing a direct appeal,
{¶17} It is well-established that
[F]inal judgment was entered on March 25, 2010, by the Court which adopted the magistrate‘s decision. That adoption order is a final order.
Then we have — the next thing we have of significance on the docket is on April 12, 2010, defendant, Frank Krawczyk, filed an objection to the magistrate‘s decision to grant summary judgment; and nothing was done with that because a final order had already been put on on February — on March 25, 2010, a couple weeks earlier. So an objection to the magistrate‘s decision at that point would be meaningless because the Court had already entered a final judgment and defendant‘s relief from a final judgment is to timely file and appeal. That‘s the primary form of relief anyway.
(Emphasis added.)
{¶18} In spite of the fact that Krawczyk missed the opportunity to appeal the trial court‘s March 25, 2010 final order, he nonetheless argues that Chemical Bank lacked standing to foreclose against him because the bank did not own the note and the mortgage and was therefore not the real party in interest. This argument was raised and decided below.
{¶20} Krawczyk first raised the issue of standing in his motion to dismiss and raised it again in his objection to the bank‘s motion for default judgment. In the motion to dismiss, Krawczyk states in pertinent part:
FIRST:
The summons does not identify the real party in interest according toOhio Rules of Civil Procedure rule [sic] 17a .SECOND:
The Assignment of the Note and Mortgage is a fraud as it has not been registered with the Cuyahoga County Recorders [sic] office and thus fails as evidence for the complaint. The failure of the assignment leads to a lack of standing in law as stated in the following case: MBNA America Ban/c [sic] N.A. v. Nelson, 133777/06, 2007 NY [sic] Slip Op 51200U: 2007 N.Y. Misc. LEXIS 4317 (N.Y. Civ. Ct. May 24, 2007). * * *THIRD:
The complaint in itself fails in it‘s [sic] essence due to the fact that it is without affidavit and proper evidence in hand.
{¶21} Krawczyk‘s objection to the motion for default argued in relevant part that he has “been misled as to who the holder in due course of the said Promissory note is and requests the court to have the Plaintiff provide the original Promissory note so that [he] can ascertain as to the validity of the Plaintiff‘s claim for Money Judgment, Foreclosure and Relief.”
{¶23} This case is not analogous to the Supreme Court of Ohio‘s decision in Fed. Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017, 979 N.E.2d 1214, where the court held that a party who files a foreclosure action must have standing to sue at the time the complaint is filed. In that case, the bank instituted a foreclosure action against the property owner before the bank became the real party in interest. The bank was subsequently assigned the rights to foreclose. Federal Home conceded that it was not a “person entitled to enforce the note” as of the date the complaint was filed, but claimed that it later became a “person entitled to enforce the note” as a “nonholder in possession of the instrument who has the rights of a holder.” The Supreme Court rejected that contention and held that Federal Home‘s standing had to be established as of the commencement of suit.
{¶25} I agree with the concurring opinion in this case that Schwartzwald makes clear that if a party lacks standing at the time it files suit, there is no justiciable controversy and the trial court is without jurisdiction to decide the matter. But as the trial court in this case determined, Chemical Bank‘s standing as a jurisdictional impediment is not an issue in this case, let alone one that can be raised repeatedly to the trial court whenever a ruling on the matter is unfavorable. To hold otherwise would abandon well-established jurisprudence regarding appellate review and would not promote judicial economy.
{¶26} With this analysis, I do not take the position that standing as a jurisdictional impediment can never be properly raised in a motion for relief from judgment. And as the concurring opinion notes, the Supreme Court may well decide this issue in the near
{¶27} Unlike the bank in Schwartzwald, Chemical Bank attached to its complaint all of the necessary paperwork to show its standing to invoke the jurisdiction of the court. Also, unlike in Schwartzwald, the assignment of the note and mortgage from Republic Bank to Chemical Bank was clearly made before the foreclosure action was filed. Krawczyk had every right to challenge the authenticity or the credibility of Chemical Bank‘s documents, but those mere challenges are not proof that the bank lacked standing and they certainly do not rise to the level of divesting the court of jurisdiction. Like the court noted in Schwartzwald, quoting the U.S. Supreme Court, “invoking the jurisdiction of the court ‘depends on the state of things at the time of the action brought,‘” Schwartzwald at ¶ 25, quoting Mollan v. Torrance, 22 U.S. 537, 539, 6 L.Ed. 154 (1824), and the Supreme Court has observed that “[t]he state of things and the originally alleged state of things are not synonymous; demonstration that the original allegations were false will defeat jurisdiction.” Id. at ¶ 25, citing Rockwell Internatl. Corp. v. United States, 549 U.S. 457, 473, 127 S.Ct. 1397, 167 L.Ed.2d 190 (2007).
{¶28} Krawczyk did not prove that the paperwork Chemical Bank attached to its complaint was fraudulent or insufficient to demonstrate standing. The trial court
{¶29} The doctrine of res judicata should bar this subsequent consideration of Krawczyk‘s claims. He did not timely appeal the trial court‘s ruling that decided the issue of standing. The often quoted phrase that “the issue of standing can be raised at anytime”3 does not equate to “the issue of standing can be raised many times” or multiple times. This is exactly the situation in this case. Krawczyk raised the issue in the trial court. The trial court ruled against him. He did not appeal. He goes back to the trial court and raises the issue again couched in terms of a
{¶30} In Waterfall Victoria Master Fund Ltd. v. Yeager, 11th Dist. Lake No. 2012-L-071, 2013-Ohio-3206, a highly-divided court concluded that the trial court properly denied relief from a default judgment to appellants who were the defendants in a foreclosure action. Similar to the case at bar, the appellants in Yeager argued that the plaintiff did not have an interest in the note and mortgage and therefore lacked standing to
{¶31} In any event, even if we were to not find that Krawczyk is attempting to use his motion for relief as a substitute for an appeal, he has failed to allege any grounds that entitle him to relief under
{¶32}
On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order or proceeding for the following reasons: (1) mistake, inadvertence, surprise or excusable neglect; (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(B); (3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation or other misconduct of an adverse party; (4) the judgment has been satisfied, released or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or (5) any other reason justifying relief from the judgment. * * *
{¶33} In order to prevail on a
(1) the party has a meritorious defense or claim to present if relief is granted; (2) the party is entitled to relief under one of the grounds stated in
Civ.R. 60(B)(1) through (5); and (3) the motion is made within a reasonable time, and, where the grounds of relief areCiv.R. 60(B)(1) , (2), or (3), not more than one year after the judgment, order or proceeding was entered or taken.
GTE Automatic Elec., Inc. v. ARC Indus., Inc., 47 Ohio St.2d 146, 351 N.E.2d 113 (1976), paragraph two of the syllabus.
{¶34} In the case at bar, there is no dispute that Krawczyk‘s motion for relief from judgment was timely filed. However, Krawczyk cannot establish grounds for relief or that he has a meritorious defense.
{¶35} Although a claim that a bank lacked standing to commence its foreclosure action may be a basis for relief from judgment pursuant to
{¶36} For his meritorious defense, Krawczyk argues that Chemical Bank was not entitled to summary judgment because it did not demonstrate its standing to obtain foreclosure. In Wachovia Bank v. Jackson, 5th Dist. Stark No. 2010-CA-00291, 2011-Ohio-3203, the court held that in order 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
{¶37} In this case, the note was payable to Republic Bank and was never endorsed to Chemical Bank or endorsed in blank. However, the trial court properly concluded that this matter was governed by this court‘s decision in Deutsche Bank, 8th Dist. Cuyahoga No. 92916, 2010-Ohio-663. In that case, this court observed that the note was not endorsed so it was insufficient to show that the transferee was a “holder” of the note, but the evidence of record demonstrated that the assignment of the note and mortgage transferred and assigned to the transferee all of its rights to the note. Id. at ¶ 22. We stated:
“Under Ohio law, the right to enforce a note cannot be assigned — instead, the note must be negotiated in accord with Ohio‘s version of the Uniform Commercial Code.” See
Ohio Rev. Code § 1301.01 et seq. and§ 1303.01 et seq. ; see also U.C.C. Article 3. An attempt to assign a note creates a
claim to ownership, but does not transfer the right to enforce the note. In re Wells (N.D.Ohio 2009), 407 B.R. 873.
In this case, an unendorsed copy of the note was offered. Therefore, the note itself was insufficient to show that Deutsche Bank was a “holder” of the note. However, the court could consider extrinsic evidence in the record to determine whether Argent transferred the note to Deutsche Bank. See F.D.I.C. v. Cutler (Conn.Super.,1997), 18 Conn.L.Rptr. 640, 1997 Conn.Super. LEXIS 126. Here the assignment of the note and mortgage to Deutsche Bank, together with the servicing of the documents on behalf of Deutsche Bank, demonstrated that Argent transferred and assigned to Deutsche Bank all of its rights and privileges to the note. Also, Padilla testified that Deutsche Bank was the holder of the note and mortgage. Upon this record, the trial court could properly conclude that Deutsche Bank was the holder of the note with the right to enforce payment thereon.
Id. at ¶ 21-22.
{¶38} Similar to the court in Deutsche Bank, the trial court was presented with ample evidence to demonstrate that Chemical Bank is the real party in interest with standing to foreclose. Attached to Chemical Bank‘s complaint were copies of the note, the mortgage, and the assignment of the note and mortgage from Republic Bank to Chemical Bank dated July 29, 2009. The same items were attached to Chemical Bank‘s motion for summary judgment along with the affidavit of Tracy Johnson submitted to establish other elements of the foreclosure claim. These items were sufficient to show that Chemical Bank is the holder of the note. Although the assignment of the note and mortgage does not state that Republic Bank transfers “all of its rights and privileges” in the note as the assignment stated in Deutsche Bank, the assignment from Republic Bank states that Chemical Bank is transferred and assigned the “Mortgage Deed” and the
{¶39} Judgment affirmed.
It is ordered that appellee recover of appellant its costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the Cuyahoga County Court of Common Pleas to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure.
MELODY J. STEWART, ADMINISTRATIVE JUDGE
MARY J. BOYLE, J., CONCURS IN JUDGMENT ONLY WITH SEPARATE OPINION;
MARY EILEEN KILBANE, J., DISSENTS WITH SEPARATE OPINION
CHEMICAL BANK, N.A. v. FRANK A. KRAWCZYK, ET AL.
No. 98263
Court of Appeals of Ohio, EIGHTH APPELLATE DISTRICT, COUNTY OF CUYAHOGA
MARY J. BOYLE, J., CONCURRING IN JUDGMENT ONLY:
{¶40} I agree with the lead opinion that the trial court‘s judgment should be affirmed because Chemical Bank established that it had standing to bring the foreclosure action at the commencement of the suit. I write separately, however, to express my disagreement with the majority‘s assessment of
{¶41} It is my view that Schwartzwald makes clear that the issue of standing is, and always has been, a “jurisdictional requirement” that can be raised at anytime — even post-judgment, and even if the issue of standing had been previously raised. This is because if a party lacks standing, it has no personal stake in the outcome of the controversy. If a party has no personal stake in the outcome of the controversy, then there is no justiciable controversy. If there is no justiciable controversy, then the common pleas court lacks subject matter jurisdiction over the case. See
{¶42} The lead opinion cites to a very recent and “highly-divided” decision of the Eleventh Appellate District, Waterfall Victoria Master Fund Ltd. v. Yeager, 11th Dist. Lake No. 2012-L-071, 2013-Ohio-3206. The facts in Yeager are similar to the facts in the present case.
{¶43} The lower court in Yeager granted the bank default judgment ordering foreclosure of appellants’ property. On direct appeal, appellants argued that the bank lacked standing. See Waterfall Victoria Master Fund Ltd. v. Yeager, 11th Dist. Lake No. 2011-L-025, 2012-Ohio-124. In a pre-Schwartzwald decision, the Eleventh District affirmed the trial court‘s default judgment. See id. Appellants then moved to vacate the trial court‘s default judgment in a
{¶44} In the Yeagers’ appeal from the trial court‘s denial of their
A brief history of the law in this area is warranted given that the issue of standing in the context of a mortgage foreclosure action has developed significantly since the parties filed their briefs in this appeal. Previously, the Ohio Supreme Court, in the plurality opinion of State ex rel. Jones v. Suster, 84 Ohio St.3d 70, 701 N.E.2d 1002 (1998), indicated that standing is not jurisdictional, explaining that, pursuant to
Civ.R. 17 , “lack of standing may be cured by substituting the proper party so that a court otherwise having subject matter jurisdiction may proceed to adjudicate the matter.” Id. at 77. Relying on this proposition, this court held standing to not be jurisdictional, but rather an affirmative defense that can be waived if not timely asserted. Aurora Loan Servs., LLC v. Cart, 11th Dist. No. 2009-A-0026, 2010-Ohio-1157; Waterfall Victoria Master Fund Ltd. v. Yeager, 11th Dist. No. 2011-L-025, 2012-Ohio-124; Everhome Mtge. Co. v. Behrens, 11th Dist. No. 2011-L-128, 2012-Ohio-1454; Bank of New York Mellon Trust Co., N.A. v. Shaffer, 11th Dist. No. 2011-G-3051, 2012-Ohio-3638.After the parties filed their briefs in this case, however, the Ohio Supreme Court released [Schwartzwald], wherein it criticized Jones and held that standing is jurisdictional. Id. at ¶ 22, ¶ 29. As it is a jurisdictional requirement, the Supreme Court concluded that standing must be determined as of the commencement of the suit. Id. at ¶ 24. It further emphasized that
Civ.R. 17(A) , requiring actions to be prosecuted in the name of the real party in interest, does not address standing but instead merely concerns proper party joinder. Id. at ¶ 33. Thus, “a lack of standing at the outset of litigation cannot [subsequently] be cured by receipt of an assignment of the claim or by substitution of the real party in interest.” Id. at ¶ 41 (emphasis added). We recently had occasion to evaluate the import of Schwartzwald as applied to the prior holdings of this court. In Fed. Home Loan Mtge. Corp. v. Rufo, 11th Dist. No. 2012-A-0011, 2012-Ohio-5930, we expressly overruled the holdings in Cart, supra; Yeager, supra; Behrens, supra; and Shaffer, supra, to the extent they were inconsistent with Schwartzwald. Id. at ¶ 29.
Here, appellee argues that appellants are barred by res judicata because they previously argued this matter before this court in Yeager, supra. This is something of a procedural double-edged sword for appellants. In recognizing this court‘s previous decision in Yeager, appellants go to great pains to characterize their argument as not relating to standing or “the correctness of the assignment,” but rather appellee‘s “authority to act” to foreclose upon the real property. However, if we were to accept this characterization, likely made in an effort to avoid the holding in Yeager, then appellants’ argument would indeed be barred by res judicata because this is an argument that could have and should have been raised in their direct appeal. Rather, we find appellants are raising the issue of standing, as they contend appellee had no interest in the note or mortgage and therefore had no authority to bring the action. As set forth above, the law has changed, and following the dictates of the Ohio Supreme Court, we now hold standing to be a jurisdictional requirement. See Rufo, supra. As the lack of jurisdiction is an issue that cannot be waived and may be raised at any time, res judicata does not bar the arguments before this court. Byard v. Byler, 74 Ohio St.3d 294, 296, 658 N.E.2d 735 (1996); see also Mulby v. Poptic, 8th Dist. No. 98324, 2012-Ohio-5731, ¶ 10. As this court‘s previous decision in Yeager was released before Schwartzwald and overruled in part in Rufo, the law-of-the-case doctrine similarly does not bar us from considering this argument. See Hopkins v. Dyer, 104 Ohio St.3d 461, 2004-Ohio-6769, 820 N.E.2d 329, ¶ 15.
Yeager, 11th Dist. Lake No. 2012-L-071, 2013-Ohio-3206, at ¶ 14-16.
{¶45} After setting forth his reasoning, Judge Cannon affirmed the trial court‘s denial of appellants’
{¶46} Similarly, the Second District, which like the Eleventh District had previously held that standing was an affirmative defense that could be waived if not raised because it was not a jurisdictional impediment, has changed its course in light of
In the past, the Supreme Court of Ohio held that a “[l]ack of standing challenges the capacity of a party to bring an action, not the subject matter jurisdiction of the court.” (Citations and footnote omitted.) [Suster, 84 Ohio St.3d at 77]. Accordingly, a standing or real party in interest defense to a foreclosure was considered waived, if not timely asserted. Mid-State Trust IX v. Davis, 2d Dist. No. 07-CA-31, 2008-Ohio-1985, ¶ 56.
Recently, in the context of a mortgage foreclosure action, the Ohio Supreme Court held that standing is jurisdictional and is determined when a lawsuit is commenced. [Schwartzwald, 134 Ohio St.3d at ¶ 24]. The supreme court made clear that post-suit events cannot be considered to determine standing, and lack of standing cannot be “cured” by use of
Civ.R. 17 (real party in interest) or other civil rules. The supreme court stated:Standing is required to invoke the jurisdiction of the common pleas court. Pursuant to
Civ.R. 82 , the Rules of Civil Procedure do not extend the jurisdiction of the courts of this state, and a common pleas court cannot substitute a real party in interest for another party if no party with standing has invoked its jurisdiction in the first instance. Schwartzwald at ¶ 38.Because standing is a jurisdictional requirement, the complaint must be dismissed if standing is lacking. [Schwartzwald] at ¶ 40. Moreover, because standing concerns the subject matter jurisdiction of the court, standing is an issue that cannot be waived and may be raised at any time, even after judgment. BAC Home Loans Servicing, L.P. v. Meister, 11th Dist. No. 2012-L-042, 2013-Ohio-873, ¶ 6, citing Byard v. Byler, 74 Ohio St.3d 294, 296, 658 N.E.2d 735 (1996). “If a trial court lacks subject matter jurisdiction to render a judgment, the order is void ab initio and may be vacated by the court‘s inherent power, even without the filing of a
Civ.R. 60(B) motion.” State v. Wilfong, 2d Dist. No. 2000-CA-75, 2001 Ohio App. LEXIS 1195, *2 (Mar. 16, 2001). See BJ Bldg. Co., L.L.C. v. LBJ Linden Co., L.L.C., 2d Dist. No. 21005, 2005-Ohio-6825, ¶ 20.
Id. at ¶ 17-19.
{¶48} Finally, I would just note that the Ohio Supreme Court has certified a conflict between the Ninth and Tenth Districts on the following question: “When a defendant fails to appeal from a trial court‘s judgment in a foreclosure action, can a lack of standing be raised as part of a motion for relief from judgment?” See Bank of Am. v. Kuchta, 135 Ohio St.3d 1430, 2013-Ohio-1857. Although not directly on point, the outcome of this case will likely shed light on some of these issues.
{¶49} I respectfully dissent. I would find that defendant-appellant, Frank Krawczyk, established each of the requirements for relief from judgment. Accordingly, I would reverse and remand.
{¶50} In 1999, Frank Krawczyk entered into a mortgage agreement with Republic Bank and signed an adjustable rate note in the amount of $202,500 payable to the order of Republic Bank. On August 5, 2009, Chemical Bank filed a complaint for foreclosure, alleging that it was the owner and holder of the promissory note following the assignment and transfer of the note from Republic Bank. An unendorsed copy of the Republic Bank note was appended to the complaint.
{¶51} In support of its motion for summary judgment, Chemical Bank attached a copy of the unendorsed note, the July 29, 2009 assignment of the note, and an affidavit from an officer of its mortgage servicing agent, PHH Mortgage Corporation, which provided in relevant part as follows:
3. That the copies of the Promissory Note and Mortgage Deed attached to Plaintiff‘s Complaint are true and accurate copies of the original instruments held by Plaintiff;
* * *
5. That * * * there is presently due and owing an unpaid principal balance of $180,444.90, with interest thereon[.]
{¶52} Although the majority has determined that Krawczyk‘s motion for relief from judgment was an improper substitute for an untimely appeal,
{¶53} With regard to the first requirement, timeliness, Chemical Bank does not challenge this aspect of the motion. As to the second requirement, grounds for relief under
{¶54} As to the third requirement, a meritorious defense, Krawczyk argued that Chemical Bank was not entitled to summary judgment because it did not demonstrate its standing to obtain foreclosure. To properly support a motion for summary judgment in a foreclosure action, the movant must show: (1) that it is the holder of the note and mortgage, or is a party entitled to enforce the instrument under
{¶55} In this matter, the note was payable to Republic Bank and was never endorsed to Chemical Bank or endorsed in blank, so it is undisputed that Chemical Bank is not a holder of the instrument. As to whether Chemical Bank is a nonholder in possession with the rights of a holder under
An attempt to assign a note creates a claim to ownership, but does not transfer the right to enforce the note. In re Wells (N.D.Ohio 2009), 407 B.R. 873.
In this case, an unendorsed copy of the note was offered. Therefore, the note itself was insufficient to show that Deutsche Bank was a “holder” of the note. However, the court could consider extrinsic evidence in the record to determine whether Argent transferred the note to Deutsche Bank. See F.D.I.C. v. Cutler (Conn.Super.,1997), 18 Conn.L.Rptr. 640, 1997 Conn.Super. LEXIS 126. Here the assignment of the note and mortgage to Deutsche Bank, together with the servicing of the documents on behalf of Deutsche Bank, demonstrated that Argent transferred and assigned to Deutsche Bank all of its rights and privileges to the note. Also, Padilla testified that Deutsche Bank was the holder of the note and mortgage. Upon this record, the trial court could properly conclude that Deutsche Bank was the holder of the note with the right to enforce payment thereon.
Id. at ¶ 21-22.
{¶56} Here, however, the plain language of the assignment did not transfer “all of its rights and privileges” in the note to Chemical Bank, as was the case in Deutsche Bank. In addition, Chemical Bank‘s evidentiary materials did not establish that the affiant had personal knowledge regarding the assignment of the note and mortgage, the affidavit did
{¶57} I would conclude that Krawczyk established each of the requirements for relief from judgment under