Deutsche Bank Trust Co. Americas v. ZieglerDeutsche Bank Trust Co. Americas v. Ziegler
Rendered on the 24th day of April, 2015.
CHARLES F. ALLBERY, III, Atty. Reg. No. 006244, CANICE J. FOGARTY, Atty. Reg. No. 0010046, 137 North Main Street, Suite 500, Dayton, Ohio 45402 Attorneys for Plaintiff-Appellee
TALBOT D. ZIEGLER and ANGELA ZIEGLER, 7720 Iver Court, Centerville, Ohio 45459 Defendants-Appellants-Pro Se
WELBAUM, J.
{¶ 2} We conclude that the trial court did not abuse its discretion in denying the motion for
{¶ 3} We further conclude that Talbot Ziegler failed to establish entitlement to relief under any of the three requirements outlined in
I. Facts and Course of Proceedings
{¶ 4} For purposes of convenience, we incorporate the following factual background, which is listed in Deutsche Bank Trust Co. v. Ziegler, 2d Dist. Montgomery No. 25744, 2014-Ohio-471 (Ziegler I):
On June 30, 2012, Deutsche Bank filed a complaint for foreclosure against Talbot Ziegler, Angela Ziegler, PNC Bank, and the Montgomery County Treasurer. Deutsche Bank alleged in the complaint that Talbot Ziegler had delivered a promissory note for $185,400, at an interest rate of 7.625% per annum, and that Deutsche Bank was the true holder of the note, as successor in interest to National City Mortgage. Deutsche Bank further alleged that the note had not been paid according to its terms, and that $183,976.93 was currently due and owing.
The complaint also alleged that Angela and Talbot Ziegler had executed a mortgage conveying real estate located at 850 Big Hill Road, Dayton, Ohio, to secure payment of the note, and that the mortgage had also been assigned to Deutsche Bank. Deutsche Bank asked for judgment on the note, foreclosure on the premises, and marshaling of liens on the property.
On August 23, 2012, Talbot Ziegler filed an answer, pro se, admitting that he executed a mortgage for the property located at 850 Big Hill Road, and denying the remainder of the allegations in the complaint. Ziegler also asserted 22 affirmative defenses and requested court-ordered mediation. He did not file a counterclaim. Angela Ziegler did not file any response to the complaint.
The trial court held status conferences in September and November 2012, and in January and February 2013. On January 30, 2013, Talbot Ziegler filed a motion, requesting 30 days leave to retain counsel in the
event that the parties could not reach settlement on or before the February 12, 2013 status conference. Ziegler also asked leave to file “counter complaints” in tort and contract. In the motion, Ziegler contended that Deutsche Bank had unreasonably delayed the processing of loan modification requests. Subsequently, on March 4, 2013, Deutsche Bank filed a motion for summary judgment, requesting that the court grant judgment on the amount owed on the note and order foreclosure of the property as requested in the complaint. Angela Ziegler did not file a response to the motion. Talbot Ziegler filed a memorandum opposing summary judgment, arguing the affirmative defenses of promissory estoppel, unclean hands, and laches. In the memorandum, Ziegler detailed various ways in which PNC Mortgage, the loan servicer for Deutsche Bank, had allegedly misled him regarding loan modification, and had unreasonably delayed action on his applications for loan modification between April 2012 and February 2013. Among other things, Ziegler alleged that Deutsche Bank had continued to increase the amount of annual income needed for modification, and that counsel for Deutsche Bank had failed to promptly tender documentation to PNC Mortgage, which showed that the Zieglers’ income was sufficient to meet the terms of the proposed modification. Ziegler did not, however, provide an affidavit or any documents to support his allegations.
On April 12, 2013, the trial court overruled Ziegler’s motion for leave to retain counsel and to file a counterclaim. The court noted that Ziegler
had sufficient time to retain counsel, and that any extensions would serve to delay foreclosure and were unwarranted on the record before the court. On the same day, the trial court rendered summary judgment in favor of Deutsche Bank, and filed a judgment entry and decree of foreclosure.
Ziegler I at ¶ 3-8.
{¶ 5} Prior to the time that Deutsche Bank moved for summary judgment, the Supreme Court had issued its decision in Fed. Home Loan Mortg. Corp. v. Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017, 979 N.E.2d 1214, which indicated that standing was a jurisdictional requirement in foreclosure actions. Although Schwartzwald was issued in October 2012, Talbot Ziegler never raised any issue about Deutsche Bank’s alleged lack of standing prior to the time that the trial court granted summary judgment on the foreclosure claim.
{¶ 6} Talbot Ziegler appealed from the foreclosure judgment, but Angela did not appeal. Ziegler I, 2d Dist. Montgomery No. 25744, 2014-Ohio-471, at ¶ 9. Ziegler asserted only one assignment of error on appeal, i.e., that the trial court had erred in granting summary judgment because it had not considered his affirmative defenses of estoppel, unclean hands, and laches. Id. at ¶ 11.
{¶ 7} Talbot Ziegler’s brief in the first appeal was filed on July 19, 2013. After the time had elapsed for filing briefs, Ziegler filed a motion asking to cite additional authorities. Ziegler I at ¶ 20. We concluded that Ziegler was actually attempting to assert an additional assignment of error, in order to allege that Deutsche Bank was not the holder of the note under Ohio law, and that fraud had been committed in the trial court. Id. at ¶ 23-24. We declined to consider this as an additional assignment of error because
{¶ 8} As a final matter, we stated that “If Ziegler believes that fraud has been committed, he can raise the matter in the trial court pursuant to a
{¶ 9} We affirmed the foreclosure judgment in early February 2014. On April 9, 2014, the Zieglers filed a motion to vacate the summary judgment, pursuant to
{¶ 10} Subsequently, on June 11, 2014, the trial court overruled the motion for stay and the motion to vacate the judgment. The court concluded that Deutsche Bank had standing to sue as of the filing of the complaint, and that the Zieglers had not satisfied the requirements of
{¶ 11} The Zieglers’ sole assignment of error states that:
The Trial Court Abused Its Discretion Because the Decisions to Grant Summary Judgment and Deny the Appellant’s
Civ.R. 60(B)(1-5) collateral action are unreasonable, arbitrary, and unconscionable.
{¶ 12} Under this assignment of error, the Zieglers present three issues for review. Their first issue states that:
When a Defendant in a foreclosure action litigates the issues of standing and fraud at the trial level – and prior to the adjudication of the original appeal – must the trial court objectively resolve the issues, consistent with Ohio law, in a
Civ.R. 60(B)(1-5) action when an Ohio appeals court defers the issues back to the trial court?
{¶ 13} Unfortunately, the Zieglers’ arguments under this assignment of error are difficult to decipher. As an initial matter, we note that the Zieglers did not litigate any standing or fraud issues in the trial court prior to the original appeal. The only issues they litigated were those mentioned above, which concerned the bank’s actions in connection with loan modification.
{¶ 14} We also note that the Zieglers appear to argue that their action involves all five branches of
{¶ 15} In the remainder of the discussion of their first issue, the Zieglers contend that in order to qualify as a “holder,” Deutsche Bank was required to possess and produce an original “blue ink” note payable to bearer or to Deutsche Bank, as well as an
{¶ 16} In view of these alleged facts, the Zieglers argue that the trial court originally improperly granted summary judgment, and that, when the motion to vacate was considered, improperly focused on the fact that Deutsche Bank acquired the interests of National City Mortgage Company pursuant to a merger, rather than negotiation. The Zieglers contend that, contrary to the trial court’s conclusion, Deutsche Bank did not become a successor in interest or merge into National City Bank or National City Mortgage; instead, National City Bank was purchased in 2008 by PNC Financial Services. The Zieglers also contend that Deutsche Bank improperly “switched” arguments in defending against the motion to vacate, by contending that it also had rights as a non-holder.
{¶ 17} In response, Deutsche Bank maintains that res judicata bars a defendant who participated in litigation from using post-judgment motions to contest standing. The bank further argues that the trial court had subject-matter jurisdiction over the action, and that lack of standing may not be collaterally used to attack a judgment.
{¶ 18} As pertinent here,
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: * * * (3) fraud (whether heretofore denominated
intrinsic or extrinsic), misrepresentation or other misconduct of an adverse party; * * * The motion shall be made within a reasonable time, and for reasons (1), (2) and (3) not more than one year after the judgment, order or proceeding was entered or taken.
{¶ 19} “ ‘
{¶ 20} We review the trial court’s decision for abuse of discretion. (Citation omitted.) Id. “A trial court abuses its discretion when its decision is ‘unreasonable, arbitrary or unconscionable.’ ” Herring at ¶ 34, quoting Blakemore v. Blakemore, 5 Ohio St.3d 217, 219, 450 N.E.2d 1140 (1983).
{¶ 21} In the case before us, Deutsche Bank alleged in the complaint that it was
{¶ 22} The note identifies the “lender” as National City Mortgage, a division of National City Bank and the “borrower” as Talbot Ziegler. The note additionally states that the borrower understands that “the Lender may transfer this Note. The Lender or anyone who takes this Note by transfer and who is entitled to receive payments under this Note is called the ‘Note Holder.’ ” Complaint, Ex. A., p. 1.
{¶ 23} The mortgage identifies the “borrowers” as Talbot and Angela Ziegler, and the “lender” as National City Mortgage, a division of National City Bank. The mortgage also identifies the “Note” as “the promissory note signed by Borrower and dated December 22, 2006.” Complaint, Ex. B., p. 1. Pursuant to the mortgage agreement, the Zieglers transferred their interest in the property located at 850 Big Hill Road, Dayton, Ohio, as security for the repayment of the debt evidenced by the note. The mortgage agreement also states that “[t]he Note or a partial interest in the Note (together with this Security Interest) can be sold one or more times without prior notice to Borrower.” Id. at p. 12.
{¶ 24} Deutsche Bank filed a Notice of Filing Preliminary Judicial Report on June 30, 2012, the same day the complaint was filed. The judicial report, issued by First American Title Insurance Company, states that, based on an examination of Montgomery
{¶ 25} Subsequently, Talbot Ziegler filed answers on August 23, 2012 and August 24, 2012, admitting that he had executed a note and mortgage for the property located at 850 Big Hill Road, Dayton, Ohio.1 The answers contain many affirmative defenses, including lack of standing. However, neither Talbot nor Angela Ziegler ever denied signing the notes attached to the complaint, nor did they raise any issues about the authenticity of the notes or any transfers of the notes prior to the time that the trial court granted summary judgment.
{¶ 26} On March 4, 2013, Deutsche Bank filed a motion for summary judgment, attaching a document assigning the note and mortgage from National City Mortgage to Deutsche Bank. The assignment is dated February 13, 2007. Deutsche Bank also attached the affidavit of Justin Pierce, who was an authorized signer of PNC Bank, National Association (“PNC Bank”), which was identified as the servicing agent for Deutsche Bank. Pierce stated that Deutsche Bank was the holder, and had the right to enforce the promissory note signed by Talbot Ziegler. Pierce also indicated that the mortgage had been signed by both Talbot and Angela Ziegler on December 22, 2006, for the amount of $185,400. In addition, Pierce identified the mortgage and note as true copies of the electronically stored duplicates of the originals of the note and mortgage. Pierce further stated that the note and mortgage had been given to National City
{¶ 27} As was noted, in responding to the summary judgment motion, Talbot Ziegler did not challenge the authenticity of the note and mortgage, nor did he ever assert that he had, in fact, not signed the documents. Instead, Ziegler’s response to summary judgment was based solely on allegations that he had attempted to negotiate with PNC Bank, the loan servicer, with respect to loan modification, and that Deutsche Bank had arbitrarily changed the loan modification requirements and had failed to process material documentation. However, Ziegler did not submit any evidentiary materials to support his allegations, nor did he submit any evidentiary materials challenging the matters contained in Deutsche Bank’s motion for summary judgment or the supporting affidavit.
{¶ 28} On April 12, 2013, the trial court granted the bank’s motion for summary judgment. The court concluded that the bank had met its initial burden under
{¶ 29} As was noted in our opinion on appeal, Talbot Ziegler did not raise the issue of standing in his appeal until after the time for filing briefs had expired. We rejected his
{¶ 30} Based on the assignment of error that had been properly submitted, we affirmed the foreclosure judgment of the trial court. Id. at ¶ 13-14. In particular, we observed that “In his appellate brief, Ziegler does not challenge the sufficiency of the evidentiary materials that were submitted. Instead, he contests only the trial court’s failure to let him proceed on the affirmative defenses that he pled. However, Ziegler failed to present evidence in the trial court in the form required by
{¶ 31} Ziegler then filed a motion to vacate in the trial court in April 2014, alleging that Deutsche Bank lacked standing to sue when it filed the complaint, because it was not a “holder” of the note, and because the Bank took eight months to produce the assignment of mortgage and affidavit of status. The trial court disagreed, concluding that the bank had standing to sue as of the filing of the complaint. In this regard, the court relied on the merger alleged in the complaint and Pierce’s affidavit, which confirmed that Deutsche Bank acquired the note when it merged with National City Mortgage Company. Doc. # 32, p. 5. The trial court concluded that a note could be transferred by methods other than negotiation, and that the merger, rather than a negotiation, resulted in transfer of the note.
{¶ 33} As was noted, the Zieglers contend that Deutsche Bank lacked standing to enforce the note because it did not provide a “blue ink” original to the court, and because the note was not endorsed to Deutsche Bank. As an initial matter, no case authority has been presented to indicate that a bank is required to produce an original document for the court. Compare Deutsche Bank Natl. Trust Co. v. Taylor, 9th Dist. Summit No. 25281, 2011-Ohio-435, ¶ 19 (rejecting the mortgagor’s argument that, among other things, the “blue ink” original of a note did not exist. The court observed that the mortgagor failed to provide either relevant citations of authority or evidence to support his point).
{¶ 34} We have previously indicated that “[w]here a note is governed by
{¶ 35} In West, we applied the criteria in
{¶ 36} After deciding that the note was a negotiable instrument, we observed in West that:
Under
R.C. Chapter 1303 , “the question of who has an ownership interest in a note is different from the question of who is entitled to enforce a note. Sometimes the person entitled to enforce the note and the owner of the note are one and the same. Sometimes they are not. Indeed,R.C. 1303.31(B) states that ‘[a] person may be a “person entitled to enforce” the instrument even though the person is not the owner of the instrument or is in wrongful possession of the instrument.’ Furthermore, a plaintiff is not required to plead that it was the ‘owner’ of the note and mortgage in its complaint.” Pasqualone at ¶ 23, citing U.S. Bank Natl. Assn. v. Mitchell, 6th Dist. Sandusky No. S-10-043, 2012-Ohio-3732, ¶ 16, and Bank of New York Mellon Trust Co. v. Fox, 6th Dist. Ottawa No. OT-11-046, 2012-Ohio-6245, ¶ 15. “ ‘An assertion of ownership rights does not indicate entitlement to enforce an instrument, nor does a lack of ownership necessarily prevent a person from being entitled to enforce an instrument.’ ” Pasqualone at ¶ 23, quoting Mitchell at ¶ 16.
West, 2d Dist. Montgomery Nos. 25813, 25837, 2014-Ohio-735, at ¶ 29, quoting
{¶ 37} We further observed in West that:
In Pasqualone, the Tenth District Court of Appeals discussed in detail the difference between a debtor’s interest in the ownership of a note and a debtor’s interest in who has the right to enforce the note. The court explained that if “ ‘the maker pays someone other than a “person entitled to enforce” – even if that person physically possesses the note the maker signed – the payment generally has no effect on the obligations under the note.’ ” (Emphasis sic.) Pasqualone, 10th Dist. Franklin No. 13AP-87, 2013-Ohio–5795, at ¶ 24, quoting In re Veal, 450 B.R. 897, 910 (Bankr.9th Cir.2011). (Other citations omitted.) Thus, “in a promissory note default case, once the court determines that a plaintiff is the person entitled to enforce the note, and judgment is entered against a defendant on that basis, the defendant is generally protected from being subject to subsequent claims for default on the same note to the extent payment is made to the person entitled to enforce the note whether by the proceeds of the mortgage foreclosure sale or otherwise. Therefore, a debtor’s concern with who is the person entitled to enforce a note is paramount.” Pasqualone at ¶ 24.
In contrast, “the question of ownership of a note is not the debtor’s concern * * *.” (Emphasis sic.) Id. at ¶ 25. In this regard, the Tenth District Court of Appeals stressed in Pasqualone that:
“This distinction [between an owner of a note and a person entitled to
enforce a note] further recognizes that the rules that determine who is entitled to enforce a note are concerned primarily with the maker of the note. They are designed to provide for the maker a relatively simple way of determining to whom the obligation is owed and, thus, whom the maker must pay in order to avoid defaulting on the obligation. UCC § 3-602(a), (c) [ R.C. 1303.67(A) ]. By contrast, the rules concerning transfer of ownership and other interests in a note identify who, among competing claimants, is entitled to the note’s economic value (that is, the value of the maker’s promise to pay). Under established rules, the maker should be indifferent as to who owns or has an interest in the note so long as it does not affect the maker’s ability to make payments on the note. Or, to put this statement in the context of this case, the Veals [as the makers of the note] should not care who actually owns the note – and it is thus irrelevant whether the note has been fractionalized or securitized – so long as they do know who they should pay. Returning to the patois of Article 3, so long as they know the identity of the ‘person entitled to enforce’ the note, the Veals should be content.” Pasqualone at ¶ 25, quoting Veal at 912-13.
West, 2d Dist. Montgomery Nos. 25813, 25837, 2014-Ohio-735, at ¶ 30-31, quoting Pasqualone, 10th Dist. Franklin No. 13AP-87, 2013-Ohio-5795, at ¶ 24-25.
{¶ 38} In addition, we noted in West that “
{¶ 39} In Pasqualone, a majority of the panel also concluded that modification should be made of the court’s prior holding that a debtor lacks standing to challenge the validity of an assignment because it “is not a party to the assignment of a note and mortgage.” Pasqualone at ¶ 35, discussing Deutsche Bank Natl. Trust. Co. v. Whiteman, 10th Dist. No. 12AP-536, 2013-Ohio-1636, ¶ 16. A majority of the panel concluded that instead, in limited situations, “where
{¶ 40}
- The holder of the instrument;
- A nonholder in possession of the instrument who has the rights of a holder;
- A person not in possession of the instrument who is entitled to enforce the instrument pursuant to
Section 1303.38 or division (D) ofsection 1303.58 of the Revised Code.
(a) The person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession;
(b) The person in possession of a negotiable tangible document of title if the goods are deliverable either to bearer or to the order of the person in possession; or
(c) The person in control of a negotiable electronic document of title.
{¶ 42} Based on this statute, we have observed that “a person need not be a ‘holder’ of the instrument in order to be entitled to enforce it. Instead, a person can be a nonholder in possession of the instrument who has the rights of a holder.” LaSalle Bank Natl. Assn. v. Brown, 2014-Ohio-3261, 17 N.E.3d 81, ¶ 36 (2d Dist.). We further noted that “[t]his status can be bestowed in various ways.” Id. As an example, we quoted the following remarks from Veal, 450 B.R. 897 (Bankr. 9th Cir.2011):
“Non–UCC law can bestow this type of status; such law may, for example, recognize various classes of successors in interest such as subrogees or administrators of decedent’s estates. See Comment to UCC § 3-301. More commonly, however, a person becomes a nonholder in possession if the physical delivery of the note to that person constitutes a ‘transfer’ but not a ‘negotiation.’ Compare UCC § 3-201 (definition of negotiation) with UCC § 3-203(a) (definition of transfer). Under the UCC, a ‘transfer’ of a negotiable instrument ‘vests in the transferee any right of the transferor to enforce the instrument.’ UCC § 3-203(b). As a result, if a
holder transfers the note to another person by a process not involving an Article 3 negotiation – such as a sale of notes in bulk without individual indorsement of each note – that other person (the transferee) obtains from the holder the right to enforce the note even if no negotiation takes place and, thus, the transferee does not become an Article 3 ‘holder.’ See Comment 1 to UCC § 3-203.”
LaSalle at ¶ 36, quoting Veal at 911.
{¶ 43} Under
(A) An instrument is transferred when it is delivered by a person other than its issuer for the purpose of giving to the person receiving delivery the right to enforce the instrument.
(B) Transfer of an instrument, whether or not the transfer is a negotiation, vests in the transferee any right of the transferor to enforce the instrument, including any right as a holder in due course, but the transferee cannot acquire rights of a holder in due course by a direct or indirect transfer from a holder in due course if the transferee engaged in fraud or illegality affecting the instrument.
{¶ 44} In view of the above discussion, the trial court correctly concluded that Deutsche Bank obtained possession of the note and mortgage prior to suit pursuant to a transfer, and thus, had standing to file suit. The Zieglers contend that this is improper, because Deutsche Bank stated that it was a “holder” of the note, not that it was a non-holder in possession. According to the Zieglers, this change in theory indicates fraud on the part of the bank. We disagree.
{¶ 46} Furthermore, as was noted in Pasqualone and West, the Zieglers should not be concerned about who “owns” the note; their only concern is with who has the right to enforce the note. Pasqualone, 10th Dist. Franklin No. 13AP-87, 2013-Ohio-5795, at ¶ 24-25; West, 2d Dist. Montgomery Nos. 25813, 25837, 2014-Ohio-735, at ¶ 30-31. In fact, under the holding in Pasqualone, the Zieglers would not even be entitled to challenge the assignment of the note, since their alleged meritorious defense does not fit within the requirements for a denial, defense, or recoupment claim found in
{¶ 47} The second requirement for relief under
We agree with the widely held view, expressed by the Tenth District in [PNC Bank, N.A. v.] Botts, [10th Dist. Franklin No. 12AP–256, 2012-Ohio-5383,] that the fraud, misrepresentation, or other misconduct contemplated by
Civ.R. 60(B)(3) refers to deceit or other unconscionable conduct committed by a party to obtain a judgment and does not refer to conduct that would have been a defense to or claim in the case itself. Botts at ¶ 15; GMAC Mtge., L.L.C. v. Herring, 189 Ohio App.3d 200, 2010-Ohio-3650, 937 N.E.2d 1077, ¶ 31 (2d Dist.); First Merit Bank, N.A. v. Crouse, 9th Dist. Lorain No. 06CA008946, 2007-Ohio-2440, 2007 WL 1461173, ¶ 32; Wells Fargo Fin. Leasing, Inc. v. Gilliland, 4th Dist. Scioto No. 03CA2916, 2004-Ohio-1755, 2004 WL 734558, ¶ 19; Tower Mgt. Co. v. Barnes, 8th Dist. Cuyahoga No. 51030, 1986 WL 8623, *3.
{¶ 48} Although the Zieglers discuss Kuchta in their brief, they do not address this particular point. Instead, they focus on the argument that the bank allegedly lacked standing when the complaint was filed, that the defect could not be thereafter cured, and,
{¶ 49} The Zieglers do attempt to distinguish Kuchta, by noting that the parties in Kuchta never argued that they were induced into relying on a promise of loan modification (extrinsic fraud). However, the problem with this argument is that the Zieglers never presented any such evidence in the trial court. We noted this fact in our prior opinion. Ziegler I, 2d Dist. Montgomery No. 25744, 2014-Ohio-471, at ¶ 17-19. In addition, the Zieglers failed to present any such evidence in connection with their motion for relief from judgment. As a result, there is no basis in the record for concluding that the bank committed extrinsic fraud, or that Kuchta should be distinguished on this basis.
{¶ 50} With respect to the Zieglers’ allegations of intrinsic fraud, we rejected similar claims in Herring, 189 Ohio App.3d 200, 2010-Ohio-3650, 937 N.E.2d 1077 (2d Dist.) We noted that:
“In determining the existence of fraud of an adverse party for purposes of
Civ.R. 60(B) , the movant must prove the elements of fraud. * * * In an action for fraud, the plaintiff must prove each of the following elements: (a) a representation, which (b) is material to the transaction at hand, (c) made falsely, with knowledge of its falsity, (d) with the intent of misleading another into relying upon it, (e) justifiable reliance upon the representation, and (f) aresulting injury proximately caused by the reliance.” Hasch v. Hasch, Lake App. No. 2008-L-183, 2009-Ohio-6377, 2009 WL 4547608, ¶ 42. As stated above, the fraud must be material to obtaining a judgment, not fraud or misconduct upon which a defense was or could have been based. Fraud on an adverse party may exist when, for example, a party presents material false testimony at trial, and the falsity is not discovered until after the trial. Seibert v. Murphy, Scioto App. No. 02 CA 2825, 2002-Ohio-6454, 2002 WL 31662598.
(Emphasis sic.) Herring at ¶ 37.
{¶ 51} As a preliminary matter, the representation that Deutsche Bank was the holder of the note was not false. The note, itself, indicated that anyone to whom the note was transferred would be considered the “note holder.” Furthermore, the note was assigned or transferred to Deutsche Bank in 2007 and filed with the recorder in 2011, before the complaint was filed. Deutsche Bank was also in possession of the note at the time suit was filed, and, thereafter. Even if Deutsche Bank may not technically have qualified as a “holder” under the definition in
{¶ 52} Furthermore, assuming for purposes of argument that the bank made a false representation, there is no evidence that Ziegler justifiably relied on the representation. As was noted in Herring, “the irregularities in the assignment of mortgage cited by [the defendant] were apparent on the assignment‘s face and could
{¶ 53} We do agree that a portion of the holding in Kuchta would not necessarily prohibit Talbot Ziegler‘s attempt to file a
{¶ 54} In Kuchta, which was also a foreclosure case, the defendants did not respond to the bank‘s motion for summary judgment and did not appeal the judgment of foreclosure. Id. at ¶ 3-5. They then filed a motion to vacate the summary judgment and decree of foreclosure under
{¶ 55} In view of this holding, res judicata precludes Angela Ziegler from collaterally attacking the judgment, because she failed to appeal from the trial court‘s foreclosure judgment. In fact, Angela Ziegler chose not to appear in the trial court prior to the time the foreclosure judgment was rendered. She had an opportunity to raise the
{¶ 56} Furthermore, Angela Ziegler is merely repeating arguments that concern the merits of the case and could have been raised on appeal. As was noted in Kuchta, “a
{¶ 57} The holding in Kuchta would not necessarily preclude Talbot Ziegler from attempting to collaterally attack the judgment, since he did appeal from the foreclosure judgment. However, for the reasons previously stated, the ground that Talbot Ziegler urges is not the type of fraud contemplated by
{¶ 58} The final consideration under
{¶ 59} In Herring, we concluded that the defendant‘s motion for relief from judgment, even though filed within a year of the amended judgment of foreclosure, was not timely for purposes of
Moreover, even though Herring‘s
Civ.R. 60(B) motion was filed within one year of the amended judgment, Herring did not timely challenge GMAC‘s status as the real party in interest when the complaint was filed. In his motion, Herring asserted that GMAC engaged in fraud by recording an assignment of mortgage that was “so filled with flagrant and fraudulent irregularities that can lead to but one conclusion that the Plaintiff did not become a holder of the Mortgage until after the Complaint was filed.” However, the assignment of mortgage was recorded by the Montgomery County Recorder‘s Office on April 11, 2007, prior to the May 14, 2007 deadline for filing the Herrings’ answer to GMAC‘s complaint. The Herrings were aware of the complaint against them, and the irregularities in the assignment of mortgage cited by Herring were apparent on the assignment‘s face and could have been identified and raised in the trial court in a responsive pleading. The assignment of mortgage was not filedwith the court – and the “irregularities” in that document were not raised in the trial court – until it was attached to Herring‘s Civ.R. 60(B) motion in June 2009. Herring cannot blame GMAC for his and his wife‘s inaction in failing to challenge GMAC‘s status as a real party in interest. See Mid-State Trust IX v. Davis, Champaign App. No. 07-CA-31, 2008-Ohio-1985, 2008 WL 1838350.
Herring, 189 Ohio App.3d 200, 2010-Ohio-3650, 937 N.E.2d 1077, at ¶ 43 (2d Dist.).
{¶ 60} In the case before us, the promissory note and mortgage were attached to the complaint, which was filed on June 30, 2012. The preliminary judicial report, showing the recording of the assignment of the mortgage to Deutsche Bank on April 19, 2011, was also filed on June 30, 2012. The assignment would also have been of public record at the recorder‘s office, and would have been available for Ziegler‘s review. Furthermore, although Talbot Ziegler raised lack of standing in his answer, along with many other defenses, he never mentioned the issue in the trial court prior to the foreclosure judgment.
{¶ 61} When Deutsche Bank filed its motion for summary judgment in March 2013, nearly a year after the complaint was filed, the assignment of the note and mortgage were attached to the bank‘s motion for summary judgment. While any deficiencies in the bank‘s documentation would have been apparent from the time that suit was filed, or at the latest, in March 2013, Ziegler never raised any issues with the trial court prior to the time that the foreclosure judgment was granted. The motion that was ultimately filed, on April 4, 2014, was presented to the court nearly two years after the complaint was filed, and about a year and a half after Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017, 979 N.E.2d 1214, was decided.4 Accordingly, we conclude that the Zieglers failed to file their motion for relief from judgment within a reasonable time, even though the motion was filed a few days prior to expiration of the one-year outer time limit in
{¶ 62} Based on the preceding discussion, we conclude that res judicata precludes Angela Ziegler from collaterally attacking the foreclosure proceeding. In addition, Talbot Ziegler‘s motion fails to meet any of the three criteria for asserting relief under
{¶ 63} The Zieglers’ second issue states that:
When an appellant in a foreclosure action litigates the issues of standing and fraud in an original appeal, is it error for the appeals court to determine the issues are not cognizable, defer them back to the trial court, then refuse to grant a stay of execution after accepting the appeal of a corresponding
Civ.R. 60(B)(1-5) action?
{¶ 64} Under this issue, Ziegler appears to be arguing that we are required to consider the issue of fraud despite the Supreme Court of Ohio‘s statement in Kuchta that
{¶ 65} When we issued our prior opinion, Kuchta had not yet been decided, and the appropriate course was to defer to the trial court, since the matter had never been raised in the trial court. In addition, Ziegler had already filed one motion to vacate in the trial court on those grounds. However, the fact that Talbot Ziegler was not precluded from collaterally attacking the judgment does not mean that he would be successful in doing so. Ziegler‘s success would depend on his ability to satisfy the requirements for
{¶ 66} Ziegler also argues under this issue that his appeal is not being brought under
{¶ 67} We have already indicated that the argument being made in the trial court was based on alleged fraud under
{¶ 68} Moreover, with respect to the trial court‘s alleged failure to consider newly discovered evidence under
{¶ 69} We also note that there was no newly discovered evidence.
{¶ 70} Accordingly, the Zieglers’ second issue is without merit.
{¶ 71} The Zieglers’ third issue states that:
Does an Ohio common pleas court have jurisdiction over a foreclosure action when the plaintiff fails to present any evidence of standing at the commencement of the case?
{¶ 72} Under this issue, the Zieglers appear to be arguing that the decision of the Supreme Court of Ohio in Kuchta is incorrect. They contend that they would be remiss in failing to raise this issue, since a motion for reconsideration was pending before the Supreme Court of Ohio when they filed their brief. We decline to address this issue. The Supreme Court of Ohio clearly stated in Kuchta that “[a]lthough standing is required in order to invoke the jurisdiction of the court of common pleas over a particular action, lack of standing does not affect the subject-matter jurisdiction of the court.” Kuchta, 141 Ohio St.3d 75, 2014-Ohio-4275, 21 N.E.3d 1040, paragraph three of the syllabus. Furthermore, the Supreme Court of Ohio denied the motion for reconsideration in December 2014. See Bank of Am., N.A. v. Kuchta, 140 Ohio St.3d 1523, 2014-Ohio-5251, 20 N.E.3d 730 (Table). As a result, there is no merit in the third issue for review. The issue would be without merit in any event, since Deutsche Bank had standing to assert its claim against the Zieglers when it filed the complaint.
{¶ 73} Based on the preceding discussion, the Zieglers’ sole assignment of error is overruled.
III. Conclusion
{¶ 74} The Zieglers’ sole assignment of error having been overruled, the judgment
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FROELICH, P.J. and FAIN, J., concur.
Copies mailed to:
Charles F. Allbery, III
Canice J. Fogarty
Talbot D. Ziegler
Angela Ziegler
Hon. Michael Tucker