DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE FOR FIRST FRANKLIN MORTAGE LOAN TRUST 2006-FF11 v. ISABELLE SANTISI, et al.
CASE NO. 2013-T-0048
IN THE COURT OF APPEALS ELEVENTH APPELLATE DISTRICT TRUMBULL COUNTY, OHIO
December 23, 2013
2013-Ohio-5848
Civil Appeal from the Trumbull County Court of Common Pleas, Case No. 2006 CV 3433. Judgment: Affirmed.
Scott A. King and Terry W. Posey, Jr., Thompson Hine, L.L.P., Austin Landing 1, 10050 Innovation Drive, Suite 400, Dayton, OH 45342 and Steven L. Sacks, Lerner, Sampson & Rothfuss, 120 East Fourth Street, Suite 800, P.O. Box 5480, Cincinnati, OH 45202 (For Plaintiff-Appellee).
Philip Zuzolo and Patrick B. Duricy, Zuzolo Law Office, LLC, 700 Youngstown Warren Road, Niles, OH 44446 (For Defendant-Appellant).
DIANE V. GRENDELL, J.
O P I N I O N
{¶1} Defendant-appellant, Isabelle Santisi, appeals from the April 12, 2013 Judgment Entry of thе Trumbull County Court of Common Pleas, denying her Motion to Vacate the July 1, 2009 Amended Decree of Foreclosure. The issues before this court are whether plaintiff-appellee, Deutsche Bank National Trust Company‘s, alleged lack of
{¶2} On December 29, 2006, Deutsche Bank filed a Complaint in Foreclosure in the Trumbull County Court of Common Pleas against Isabelle Santisi, the Trumbull County Treasurer, and John Doe, as Santisi‘s spouse.
{¶3} The plaintiff, captioned as Deutsche Bank National Trust Company, as Trustee for First Frаnklin Mortgage Loan Trust, c/o Wells Fargo Bank, N.A., alleged that it was “the holder and owner of a note, a copy of which is attached hereto.” Deutsche Bank further alleged that the note and the mortgage securing the note were in default. A copy of the mortgage, attached to the Complaint and re-recorded (due to spelling errors)1 on November 27, 2006, identifies “First Franklin, A Division of National City Bank of Indiana,” as the lender. The Complaint stated that the mortgage was “subsequently assigned” to Deutsche Bank. A copy of the note was also attached, identifying First Franklin as the lender.
{¶4} On January 11, 2007, the Trumbull Country Treasurer filed his Answer and Consent to Decree in Foreclosure.
{¶5} On February 12, 2007, Deutschе Bank filed an Affidavit of Status of Account, sworn to by Sean Nix, identified in the affidavit as “Vice President [of] Loan Documentation with Wells Fargo Bank, N.A. as servicing agent for Deutsche Bank.” Nix attested that, by virtue of his employment, he “has the custody of and has personal knowledge of the accounts of said company, and specifically with the аccount of
{¶6} Also on February 12, 2007, Deutsche Bank filed a Motion for Default Judgment against Santisi.
{¶7} On June 14, 2007, the trial court issued a Judgment and Decree in Foreclosure. The court determined that Santisi was properly served and was “in default of * * * Answеr.” The court found that “the allegations contained in the Complaint are true,” Santisi owed the balance of $285,000.00, and “the conditions of [the] Mortgage have been broken and plaintiff is entitled to have the equity of redemption of the defendant-titleholders foreclosed.”
{¶8} In response to a motion by filed by Deutsche Bank, the trial cоurt issued a July 1, 2009 Entry Amending Decree in Foreclosure Nunc Pro Tunc, making the finding that Deutsche Bank was entitled to recover advances made to Santisi totaling $10,848.39.
{¶9} On October 18, 2010, Santisi filed a Motion for Stay of Execution of Sheriff‘s Sale and requested that the matter be scheduled for mediation.
{¶10} On the same date, the trial court ordered the case stаyed and scheduled the matter for mediation.2
{¶11} On January 5, 2012, the stay was lifted following a hearing.
{¶12} On July 24, 2012, Santisi filed a Motion to Vacate Judgment as Void Ab Initio and 60(B) Motion to Vacate Judgment. Santisi asserted that Deutsche Bank did not file its recorded assignment of the mortgage until February 6, 2007, over a month
{¶13} On July 26, 2012, the trial court denied the Motion to Vacate.
{¶14} On February 19, 2013, Santisi filed a Motion to Vacate the July 1, 2009 Amended Decree of Foreclosure. She argued that under the recent Ohio Supreme Court case of Fed. Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017, 979 N.E.2d 1214, Deutsche Bank was required to demonstrate standing as of the date of the Complaint and failed to do so. Deutsche Bank filed a response on April 8, 2013, asserting that Santisi did not establish grounds for granting a 60(B) motion.
{¶15} The trial court denied the Motion to Vacate in an April 12, 2013 Judgment Entry. The court found that since Deutsche Bank attached the note, which contained a blank indorsement, to the Complaint, the jurisdiction of the court was properly invoked at the time of the filing of the Complaint. The court also held that Santisi was unable to satisfy the requirements of
{¶16} Santisi timely appeals and raises the following assignments of error:
{¶17} “[1.] Plaintiff/Appellee failed to present an affidavit or any other record evidence sufficient to meet its burden to establish it had standing to pursue a foreclosure action and, as such, is unable to properly invoke the jurisdiction of the common pleas court or support its motion for default judgment.
{¶18} “[2.] Plaintiff-Appellee fаiled to establish standing as there was no admissible evidence to explain material inconsistencies regarding the promissory note.”
{¶20} Deutsche Bank argues that Santisi has waived any arguments related to standing and that it established standing by being the holder of the note, which was indorsed in blank.
{¶21} “An appellate court reviews a judgment entered on a
{¶22} The issue in this case is whether the trial court had jurisdiction to issue the Decree of Foreclosure, based on Deutsche Bank‘s alleged laсk of standing. There is no defect in Deutsche Bank‘s standing on the face of the record before us. The Complaint alleged that Deutsche Bank was “the holder and owner of a note, a copy of which is attached” to the Complaint and noted that, following the recording of the mortgage, it was “subsequently assigned to the plaintiff herein.” As Santisi did not deny these averments in a responsive pleading, they must be taken as “admitted.”
{¶23} Deutsche Bank asserted its standing to foreclose the mortgage by alleging that it was “the holder and owner of a note” in its Complaint. This allegation is legally sufficient to establish Deutsche Bank‘s standing to foreclose. The holder of a note has
{¶24} Additionally, as was asserted by Deutsche Bank, it also provided evidence of standing by virtue of holding the note, which contained an indorsement in blank, at the time the Complaint was filed. A blank indorsement is “an indorsement that is made by the holder of the instrument and that is not a special indоrsement.”
{¶25} While there may be some argument as to whether a copy of the note in Deutsche Bank‘s possession, with the indorsement in blank by First Franklin, was satisfactory to meet the standing requirement, we again emphasize that this case involves default judgment, that Deutsche Bank met the pleading requirements, and that any such specific standing arguments should havе been raised in a responsive pleading or direct appeal, as will be discussed further.
{¶26} At no point during the course of these proceedings was Deutsche Bank required to establish its standing beyond the allegations of the Complaint. This court
{¶27} Santisi cites Schwartzwald as justification for her arguments regarding Deutsche Bank‘s lack of standing. In that case, the Ohio Supreme Court held that a mortgagee did not have standing to invoke the jurisdiction of the common pleas court “because it failed to establish an interest in the note or mortgage at the time it filed suit.” Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017, 979 N.E.2d 1214, at ¶ 28; Patterson, 2012-Ohio-5894, at ¶ 21 (“a party may establish its interest in the suit, and therefore have standing to invoke the jurisdiction of the court when, at the time it files its complaint of foreclosure, it either (1) has had a mortgage assigned or (2) is the holder of the note“). In the present case, Deutsche Bank established its interest in both the note and the mortgage, which was not disputed by Santisi prior to judgment, and, thus, properly invoked the lower court‘s jurisdiction.
{¶28} Further, Schwartzwald is distinguishable from this case, in that it did not involve a default judgment. The court did not have before it the issue of whether standing was deemed admitted by the defendant and, thus, established by the filing of the Complaint, as is the case here.
{¶30} As described above, Santisi failed to file both a response during the proceedings and a direct appeal. Her 60(B) motion was also untimely. She cannot now raise a challenge under
{¶31} A default judgment “is a final determination of the rights of the parties.” GTE Automatic Elec., Inc. v. ARC Industries, Inc., 47 Ohio St.2d 146, 150, 351 N.E.2d 113 (1976). It is well established that “[a] party may not use a
{¶32} Further, we note that this was Santisi‘s second Motiоn to Vacate/
{¶33} While Santisi argues that the alleged lack of standing deprived the court of its subject-matter jurisdiction and that this issue can be raised at any timе, we disagree.
{¶34} Schwartzwald states that “standing to sue is required to invoke the jurisdiction of the common pleas court,” but did not state that the common pleas court lacked subject-matter jurisdiction where a party lacked standing to sue. 134 Ohio St.3d 13, 2012-Ohio-5017, 979 N.E.2d 1214, at ¶ 24. In fact, there is “a distinction between a court that lacks subject-matter jurisdiction over a case and a court that improperly exercises that subject-matter jurisdiction once conferred upon it.” Pratts v. Hurley, 102 Ohio St.3d 81, 2004-Ohio-1980, 806 N.E.2d 992, ¶ 10.
{¶35} “Jurisdiction” means “the courts’ statutory or constitutional power to adjudicate the case.” (Emphasis omitted.) Steel Co. v. Citizens for a Better Environment (1998), 523 U.S. 83, 89, 118 S.Ct. 1003, 140 L.Ed.2d 210. “The term encompasses jurisdiction over the subject matter and over the person. * * * Because subject-matter jurisdictiоn goes to the power of the court to adjudicate the merits of a case, it can never be waived and may be challenged at any time.” (Citations omitted.) Pratts at ¶ 11. “It is only when the trial court lacks subject matter jurisdiction that its judgment is void; lack of jurisdiction over the particular case merely renders the judgment voidable.” (Citations omitted). Id. at ¶ 12.
{¶36} In the present case, as in Schwartzwald, the trial court had subject matter jurisdiction of the action and the parties. Assuming, arguendo, that Deutsche Bank improperly invoked that jurisdiction by lacking the requisite standing to sue, the court‘s judgment is merely voidable, not void ab initio. State v. Filiaggi, 86 Ohio St.3d 230, 240, 714 N.E.2d 867 (1999) (“[w]here it is apparent from the allegations that the matter alleged is within the class of cases in which a particular court has been empowered to act, jurisdiction is present[;] [a]ny subsequent error in the proceedings is only error in the ‘exercise of jurisdiction,’ as distinguished from the want of jurisdiction in the first instance“) (citation omitted).
{¶37} Thus, Santisi‘s argument that the underlying judgment is void is incorrect. Botts, 2012-Ohio-5383, at ¶ 22 (“[l]ack of standing challenges the capacity of a party to bring an action, not the subject matter jurisdiction of the court“) (citation omitted). On this issue, Schwartzwald stated that “the issue of standing, inasmuch as it is jurisdictional in nature, may be raised at any time during the pendency of the proceedings.” 134 Ohio St.3d 13, 2012-Ohio-5017, 979 N.E.2d 1214, at ¶ 22 (citation omitted). The key words are “during the pendency of the proceedings.” In Countrywide Home Loans Servicing, L.P. v. Nichpor, the Ohio Supreme Court made it clear that, after a judgment entry grants a decree of foreclosure and order of sale, the matter is no longer pending. 136 Ohio St.3d 55, 2013-Ohio-2083, 990 N.E.2d 565, syllabus. As noted above, the challenge to standing in this case was not raised until several years after the Decree of Foreclosure was filed and became final.
{¶38} Further, allowing Santisi to prevail on a standing claim raised over five years after the filing of the Complaint and the Decree of Foreclosure essentially permits her to challenge the issue of standing at any time, potentially in perpetuum. Deutsche Bank properly pled its standing to enforce the note; the foreclosure was not contested; judgment was entered; and no appeal was taken. Santisi argues that she is entitled to vacate that judgment, simply because Deutsche Bank failed to respond to an argument that was never raised during the course of the proceedings. If the present judgment
{¶39} The first assignment of error is without merit.
{¶40} In her second assignment of error, Santisi asserts that Deutsche Bank presented inconsistent evidence to show that standing existed. Specifically, she argues that the recording of the assignment of the nоte and mortgage did not occur until after the filing of the Complaint.
{¶41} As discussed extensively above, there is no basis to challenge standing through a
{¶42} The second assignment of error is without merit.
{¶43} For the foregoing reasons, the Judgment Entry of the Trumbull County Court of Common Pleas, denying Santisi‘s Motion to Vacate the July 1, 2009 Amended Decree of Foreclosure, is affirmed. Costs to be taxed against appellant.
COLLEEN MARY O‘TOOLE, J., dissents.
DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE FOR FIRST FRANKLIN MORTAGE LOAN TRUST 2006-FF11 v. ISABELLE SANTISI, et al.
CASE NO. 2013-T-0048
IN THE COURT OF APPEALS ELEVENTH APPELLATE DISTRICT TRUMBULL COUNTY, OHIO
{¶44} I concur with most of the majority‘s judgment in this case. However, I disagree with any suggestion in the majority opinion that a
{¶45}
{¶46} It is not sufficient to simply allege appellee had no standing. In this case, appellee alleged that it owned the note at the time the complaint was filed. When appellant failed to answer this allegation, it was deemed admitted. If appellant obtained information that this allegation was not true, i.e., establishing appellee did not have authority to invoke the jurisdiction of the trial court at the inception of the case, it would clearly be a meritorious defense. If a meritorious defense was established and timely raised, it should be considered as would any other