Fed. Natl. Mtge. Assn. v. BrunnerFed. Natl. Mtge. Assn. v. Brunner
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Elizabeth S. Fuller, for appellee.
George R. Royer, for appellants.
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HANDWORK, J.
{¶ 1} This is yet another appeal from a decision in an action to foreclose on residential property. In this appeal, the borrowers challenge the propriety of the affidavit used by the bank to obtain summary judgment. Finding that the bank‘s affidavit fails to satisfy the requirements of
{¶ 3} On March 14, 2011, CitiMortgage filed a motion to substitute appellee Federal National Mortgage Association (“FNMA“) as plaintiff in the action. The motion was based on a note allonge and mortgage assignment that were executed by CitiMortgage subsequent to the commencement of the action. The trial court granted the motion on March 17, 2011, ordering that FNMA be substituted as party plaintiff in place of CitiMortgage. On May 9, 2011, after obtaining leave to respond out of rule, the Brunners filed separate answers, each raising five affirmative defenses.
{¶ 4} On June 20, 2011, FNMA filed a motion for summary judgment, which included an affidavit signed by Enan Del Rio. In his affidavit, Del Rio averred that he had personal knowledge of the facts and was competent to testify as to the matters contained therein. Del Rio stated that IBM Lender Business Process Services, Inc. (“BPS“) is the loan servicer for FNMA, that his “position” gives him “access to” business
{¶ 5} On August 1, 2011, appellants filed a motion to strike and a memorandum in opposition to FNMA‘s motion for summary judgment. Appellants argued that Del Rio‘s affidavit did not satisfy the personal knowledge and competency requirements of
- (1) The court should not have granted summary judgment motion in this case.
- (2) The court erred in that it did not grant defendants’ motion to strike plaintiff‘s affidavit (as sole support of such summary judgment motion).
{¶ 7} Since these assignments of error present a common and dispositive issue with respect to the sufficiency of Del Rio‘s affidavit, we will consider them together. Essentially, appellants contend that the trial court improperly considered Del Rio‘s affidavit in rendering summary judgment, since the affidavit failed to comply with the requirements of
{¶ 8} Since this case was decided by summary judgment, our review is de novo, in accordance with the standard set forth in
{¶ 9} Pursuant to
{¶ 10} In order to properly support a motion for summary judgment in a foreclosure action, the bank must produce or identify in the record evidentiary-quality
{¶ 11}
{¶ 12} The foundation for personal knowledge may be furnished by the witness‘s own testimony.
{¶ 13} Similarly, in order to properly authenticate business records under
{¶ 14} In RBS Citizens NA v. Vernyi, 9th Dist. No. 26046, 2012-Ohio-2178, ¶ 11, the Ninth Appellate District found:
In the Bank‘s motion for summary judgment, it argued that it was entitled to foreclosure, pointing to Grace Smith‘s February 23, 2010 affidavit, in which she averred that she was a foreclosure specialist and had reviewed Mr. Vernyi‘s loan file. According to Ms. Smith, Mr. Vernyi owed $125,375.54. Ms. Smith‘s affidavit consisted of nine paragraphs and did not contain any indication as [to] what connection Ms. Smith had to the Bank; thus, it is unclear whether she had personal knowledge.
See also Maxum Idemn. Co. v. Selective Ins. Co. of South Carolina, 2012-Ohio-2115, 971 N.E.2d 372, ¶ 22 (9th Dist.) (affidavit held insufficient to satisfy personal knowledge requirement in part because it “does not disclose the position [affiant] holds or the scope of his job responsibilities“); Bank of New York Mellon Trust. Co. Natl. v. Mihalca, 9th
{¶ 15} In this case, Del Rio‘s affidavit does not identify his connection to FNMA or its account-holder records. In fact, the affidavit seems to take grammatical pains to avoid the subject, which suggests that Del Rio‘s assertions of personal knowledge may be problematic. Thus, the affidavit begins, “IBM Lender Business Process Services, Inc., as servicer for Fannie Mae (‘Federal National Mortgage Association‘), substitute Plaintiff herein, and in that capacity I am authorized to execute this Affidavit.” Del Rio then asserts:
The averments provided in this affidavit are within the scope of my duties. In my position, I have access to business records, including loan documents and loan account records maintained by [BPS], and I have
personal knowledge of the operation of and the circumstances surrounding the maintenance and retrieval of records in [BPS‘s] record keeping systems.
{¶ 16} Nowhere in the affidavit, however, not even on the signature line, is there any indication as to the nature of Del Rio‘s “capacity,” “duties,” or “position.” Nothing in the affidavit suggests that Del Rio is employed by BPS, or that he was ever employed by BPS. The affidavit does not explain how or in what manner Del Rio‘s undisclosed “position” gives him “access to” the accounts maintained by BPS or provides him with a working knowledge of its record-keeping system. Indeed, the affidavit does not even reveal what Del Rio does for a living.
{¶ 17} FNMA cites a number of cases for the proposition that affidavits similar to Del Rio‘s affidavit “are used regularly by plaintiffs in foreclosure cases, and their compliance with evidentiary rules has been continually upheld by Ohio courts.” However, all of the affidavits in the cases cited by FNMA clearly identified the nature of the affiant‘s relationship to the plaintiffs in those cases. For example, in Countrywide Home Loans, Inc. v. Rodriguez, 9th Dist. Nos. 03CA008345, 03CA008417, 2004-Ohio-4723, ¶ 15-16, the court explained:
[T]his Court has previously held that an affiant‘s mere assertion that he has personal knowledge of the facts asserted in an affidavit can satisfy the personal knowledge requirement of
Civ.R. 56(E) * * * if the nature of the facts in the affidavit combined with the identity of the affiant creates a
reasonable inference that the affiant has personal knowledge of the facts in the affidavit.
In the instant matter, the affiant, Olchak, stated that she was an officer of Countrywide and a supervisor of Rodriguez’ account. * * * We find that the identity of Olchak as the affiant, combined with the nature of the facts asserted in her affidavit created a reasonable inference that Olchak did in fact have personal knowledge of the amount of money that was due and owing on Rodriguez’ account. As such, Olchak‘s affidavit satisfied the personal knowledge requirement of
Civ.R. 56(E) .
{¶ 18} In fact, our research discloses that Ohio appellate courts have invariably considered evidence of the affiant‘s position, title, or other working relationship with the bank or its servicing agent as a sine qua non of compliance with the personal knowledge requirement of
{¶ 19} FNMA also contends that Del Rio‘s affidavit is “quite similar to” the affidavit considered by this court in Natl. City Bank v. TAB Holdings, Ltd., 6th Dist. No. E-10-060, 2011-Ohio-3715. However, in finding that the affidavit in Natl. City comported with
In determining the propriety of summary judgment in foreclosure actions, courts have consistently held that an averment of outstanding indebtedness made in the affidavit of a bank loan officer with personal knowledge of the debtor‘s account is sufficient to establish the amount due and owing on the note, unless the debtor refutes the averred indebtedness with evidence that a different amount is owed. (Emphasis added.) Id. at ¶ 12.
{¶ 20} We find, therefore, that Del Rio‘s affidavit did not comport with
{¶ 21} Given our disposition of the matter, it is unnecessary for this court to address the procedural propriety of appellants’ post-pleading defense that they never received notice of default or acceleration. That issue will have to be evaluated by the trial court in light of further proceedings. However, in the interest of judicial economy, we do find error in the trial court‘s conclusion that notice is not a condition precedent to accelerating the loan under the terms of the note.
{¶ 22} The acceleration clause in the note provides, “If I am in default, the Note Holder may send me a written notice [of acceleration].” It then states that the date for payment of the accelerated amount “must be at least 30 days after the date on which the notice is mailed to me or delivered by other means.” Contrary to the trial court, we find it rather obvious that the permissive term “may” in this provision relates to the right of acceleration, not to the giving of notice. In other words, the provision gives the note holder a choice between accelerating the loan with notice or not accelerating the loan. It does not give the note holder the option of either accelerating the loan with notice or accelerating the loan without notice. If that were the case, the clause could easily have stated that the loan may be accelerated upon default without notice to the borrowers. Accordingly, appellants’ assignments of error are well-taken.
Judgment reversed.
A certified copy of this entry shall constitute the mandate pursuant to
Peter M. Handwork, J. _______________________________
JUDGE
Arlene Singer, P.J.
_______________________________
Thomas J. Osowik, J. JUDGE
CONCUR.
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JUDGE
This decision is subject to further editing by the Supreme Court of Ohio‘s Reporter of Decisions. Parties interested in viewing the final reported version are advised to visit the Ohio Supreme Court‘s web site at: http://www.sconet.state.oh.us/rod/newpdf/?source=6.