JPMORGAN CHASE BANK, NATIONAL ASSOCIATION v. SCOTT T. FALLON, ET AL.
Case No. 13CA3
IN THE COURT OF APPEALS OF OHIO FOURTH APPELLATE DISTRICT PICKAWAY COUNTY
RELEASED 02/10/2014
[Cite as JPMorgan Chase Bank, Natl. Assn. v. Fallon, 2014-Ohio-525.]
Hoover, J.
DECISION AND JUDGMENT ENTRY
John Sherrod, Mills, Mills, Fiely & Lucas, LLC, Columbus, Ohio, for Appellants.
Thomas Wyatt Palmer and David J. Carey, Thompson Hine LLP, Columbus, Ohio, and Stephen D. Williger, Thompson Hine LLP, Cleveland, Ohio, for Appellee.
Hoover, J.
{1} Scott and Kimberly Fallon appeal the judgment of the Pickaway County Common Pleas Court, which awarded summary judgment pursuant to
I. Factual & Procedural Background
{2} On February 25, 2003, Scott and Kimberly Fallon signed a promissory note for $124,700. The note was secured by a mortgage on the Fallons’ property located at 8896 State Route 188, Circleville, Ohio. While the lender of the note was Direction Mortgage Company1
(“Direction“), Mortgage Electronic Registration Systems, Inc. (“MERS“) was listed as the
PAY TO THE ORDER OF
WITHOUT RECOURSE
FLAGSTAR BANK, FSB
The second endorsement is signed by what appears to be two representatives of Flagstar. On August 18, 2011, MERS assigned the mortgage to Chase.
{3} On September 30, 2011, Chase filed a complaint in foreclosure against the Fallons, and others not parties to this appeal, alleging that it was a person entitled to enforce the note and that the Fallons were in default on the note and mortgage. Attached to the complaint were copies of the note, the mortgage, the mortgage assignment, and a preliminary judicial report. The Fallons answered the complaint and denied all of Chase‘s allegations. On September 25, 2012, Chase filed a motion for summary judgment. Attached to its motion, Chase submitted the affidavit of Lanier M. Jeffrey (“Jeffrey“). In the affidavit, Jeffrey averred that: (1) he was an employee of Chase in the capacity of “Vice President,” (2) Chase‘s records contain “a Note executed by Scott T. Fallon [and] Kimberly J. Fallon,” (3) he reviewed business records related to the Fallons’ loan, including “the Note” and “Mortgage,” “[t]rue and exact copies” of which were attached to the affidavit, (4) Chase “holds the Note,” (5) his affidavit was based on a review of business records relating to the Fallons’ loan and on his own personal knowledge, and (6) the Fallons were in default on the note and mortgage, and owed $111,533.74, together with interest at the rate of 6.25 percent per year from July 1, 2010, plus advances for taxes and insurance.
{4} The Fallons filed a memorandum in opposition to summary judgment; and Chase filed a reply memorandum. On November 15, 2012, the trial court granted summary judgment in favor of Chase. This appeal followed.
II. Assignment of Error
{5} The Fallons assert the following sole assignment of error:
THE TRIAL COURT ERRED IN GRANTING APPELLEE‘S MOTION FOR SUMMARY JUDGMENT BECAUSE APPELLEE WAS NOT A PARTY ENTITLED TO ENFORCE THE PROMISSORY NOTE COVERING APPELLANTS’ PROPERTY AND BECAUSE ITS SUMMARY JUDGMENT AFFIANT DID NOT PROPERLY AUTHENTICATE THE NOTE OR SUPPORT THE ATTESTATION IT WAS THE HOLDER OF THE NOTE.
III. Analysis
A. Standard of Review
{6} We review the trial court‘s decision on a motion for summary judgment de novo. Smith v. McBride, 130 Ohio St.3d 51, 2011-Ohio-4674, 955 N.E.2d 954, ¶ 12. Accordingly, we afford no deference to the trial court‘s decision and independently review the record and the inferences that can be drawn from it to determine whether summary judgment is appropriate. Harter v. Chillicothe Long-Term Care, Inc., 4th Dist. Ross No. 11CA3277, 2012-Ohio-2464, ¶ 12; Grimes v. Grimes, 4th Dist. Washington No. 08CA35, 2009-Ohio-3126, ¶ 16.
{7} Summary judgment is appropriate only when the following have been established: (1) that there is no genuine issue as to any material fact; (2) that the moving party is entitled to judgment as a matter of law; and (3) that reasonable minds can come to only one conclusion, and
B. Chase‘s Status as Note and Mortgage Holder
{8} The Fallons argue that the trial court‘s award of summary judgment was inappropriate because Chase failed to demonstrate that it is the real party in interest. Specifically, the Fallons contend that neither the face of the note, nor the Jeffrey affidavit establish that Chase is the current holder of the note. We disagree.
{9} “Every action shall be prosecuted in the name of the real party in interest.”
{10} “In foreclosure actions, the real party in interest is the current holder of the note and mortgage.” Everhome Mtge. Co. v. Rowland, 10th Dist. Franklin No. 07AP-615, 2008-Ohio-1282, ¶ 12. “The failure to prove itself as the real party in interest creates a genuine issue of material fact that precludes summary judgment.” HSBC Mtge. Servs., Inc. v. Edmon, 6th Dist. Erie No. E-11-046, 2012-Ohio-4990, ¶ 25, citing First Union Natl. Bank v. Hufford, 146 Ohio App.3d 673, 679-680, 767 N.E.2d 1206 (3rd Dist.2001); see also U.S. Bank Natl. Assn. v. Marcino, 181 Ohio App.3d 328, 2009-Ohio-1178, 908 N.E.2d 1032, ¶ 32 (7th Dist.) (“Where a party fails to establish itself as the current holder of the note and mortgage, summary judgment is inappropriate“).
{11} “Ohio‘s version of the Uniform Commercial Code governs who may enforce a note.
{12} Under the code, a “person entitled to enforce” an instrument includes the holder of the instrument.
(a) If the instrument is payable to bearer, a person who is in possession of the instrument;
(b) If the instrument is payable to an identified person, the identified person when in possession of the instrument.
{13} In the case sub judice, we agree with the Fallons that the face of the note does not establish Chase as the note holder. The most recent endorsement was a blank endorsement4; and thus, holder status is determined by possession of the note. It follows that possession cannot be established by simply viewing the face of the note. See Deutsche Bank v. Holloway, 9th Dist. Lorain No. 12CA010331, 2013-Ohio-5194, ¶ 8 (noting that because the note was endorsed in
{14} In short, the Jeffrey affidavit along with the attached note established that Direction specifically endorsed the note to Flagstar, and Flagstar subsequently endorsed the note in blank. As Chase was in possession of the note containing a valid blank endorsement, Chase was the holder of the note and was entitled to enforce it upon the Fallons’ default. See
C. Authentication of the Note
{15} The Fallons also argue - “irrespective” of the issue of whether Chase was a real party in interest - that Chase failed to properly authenticate the note through the Jeffrey affidavit. Specifically, the Fallons contend that the affidavit is fatally flawed because Jeffrey did not attest that he compared “the Note” with the original, or explain why he could not.
{16} “To be considered in a summary judgment motion,
{17} Here, we find that the Jeffrey affidavit set forth the necessary information to be considered on summary judgment under
In addition, and contrary to the Fallons’ assertions, the affidavit specifically stated that “Chase‘s records contain a Note executed by Scott T. Fallon [and] Kimberly J. Fallon in the amount of $124,700.00 secured by a Mortgage on a property located at 8896 State Route 188, Circleville, OH 43113[,]” that Jeffrey personally reviewed “the Note” and “Mortgage,” and that “[t]rue and exact copies of the Note and Mortgage are attached [to the affidavit.]” These statements indicate that Jeffrey compared the attached copy of the note to the original note contained in Chase‘s business records. Finally, the affidavit implicitly indicates that Chase is in possession of the note as Jeffrey stated that the Chase records contain the note. Accordingly, Jeffrey was able to swear to the authenticity of the note as required by
{18} The Fallons argue that there is no way of telling whether “the Note” referred to by Jeffrey is the original note, or a reproduction. Thus, they contend that Jeffrey could not attest to the authenticity of the copy attached to the affidavit. This assertion, however, is speculative and is not supported by any evidence that “the Note” is anything other than the original note. Put simply, the Fallons have not met their reciprocal burden of providing sufficient rebuttal evidence demonstrating that the copy of the note filed with the affidavit was not actually a true and exact copy of the original.
IV. Conclusion
{19} Upon consideration of the entire record, we find that the trial court did not error in granting summary judgment. Chase had sufficiently established itself as the holder of the note and mortgage and was therefore entitled to judgment as a matter of law. Furthermore, Chase did properly authenticate the note attached to the summary judgment affidavit. Accordingly, the Fallons’ sole assignment of error is overruled.
{20} Having conducted a de novo review and finding no error prejudicial to the Fallons, we affirm the judgment of the trial court.
JUDGMENT AFFIRMED.
It is ordered that the JUDGMENT BE AFFIRMED. Appellants shall pay the 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 Pickaway County Common Pleas Court to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to
Abele, P.J. & McFarland, J.: Concur in Judgment and Opinion.
For the Court
By:
Marie Hoover, Judge
NOTICE TO COUNSEL
Pursuant to Local Rule No. 14, this document constitutes a final judgment entry and the time period for further appeal commences from the date of filing with the clerk.