NATIONSTAR MORTGAGE, L.L.C. v. EDWIN J. WAGENER, ET AL.
No. 101280
Court of Appeals of Ohio, EIGHTH APPELLATE DISTRICT, COUNTY OF CUYAHOGA
April 2, 2015
[Cite as Nationstar Mtge., L.L.C. v. Wagener, 2015-Ohio-1289.]
BEFORE: E.A. Gallagher, P.J., McCormack, J., and E.T. Gallagher, J.
JOURNAL ENTRY AND OPINION
Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-11-763858
RELEASED AND JOURNALIZED: April 2, 2015
James R. Douglass
Marc E. Dann
Grace M. Doberdruk
Daniel M. Solar
The Dann Law Firm
P.O. Box 6031040
Cleveland, Ohio 44103
ATTORNEYS FOR APPELLEES
For Nationstar Mortgage
John B. Kopf III
David J. Carey
Thompson Hine L.L.P.
41 S. High Street, Suite 1700
Columbus, Ohio 43215
Stacy L. Hart
Lerner, Sampson & Rothfuss
P.O. Box 5480
Cincinnati, Ohio 43215
Robert C. Folland
Barnes & Thornburg, L.L.P.
41 South High Street
Columbus, Ohio 43215
For Mortgage Electronic Reg. Sys.
Peter F. Costello
30455 Solon Road
Solon, Ohio 44139
For United States of America
Lori White Laisure
Carl B. Stokes U.S. Court House
801 W. Superior Avenue
Cleveland, Ohio 44113
EILEEN A. GALLAGHER, P.J.:
Procedural and Factual Background
{¶2} On March 12, 2007, the Wageners executed a note payable to Countrywide Home Loans, Inc. (“Countrywide“) for the principal amount of $172,000. To secure payment of the note, the Wageners executed a mortgage on real property located at 10340 Whitewood Rd., Brecksville, Ohio, in favor of Mortgage Electronic Registration Systems, Inc. (“MERS“) as a nominee for Countrywide and its successors and assigns. The mortgage was recorded on March 29, 2007.
{¶3} Countrywide thereafter endorsed the note in blank. On April 26, 2011, MERS assigned the mortgage “together with the note(s) and obligations therein described” to BAC Home Loans Servicing, LP f.k.a. Countrywidе Home Loans Servicing LP (“BAC Home Loans“). The assignment was recorded on May 5, 2011. In July 2011, BAC Home Loans merged into Bank of America, N.A. (“Bank of America“).2
{¶4} The Wageners failed to make payments due on the note and on September 8, 2011, Bank of America filed a complaint against them to recover the unpaid balance due on the note and to foreclose on the mortgaged property. Copies of the note (endorsed in blank by Countrywide), the mortgage, the assignment of mortgage from MERS to BAC Home Loans and copies of documents from the office of the secretary of state of Texas evidencing the merger of BAC Home Loans into Bank of America effective July 1, 2011 (the “certificate of merger“) and Countrywide‘s name change to BAC Home Loans effective April 27, 2009, were attached to the complaint.3 The Wageners filed a pro se answer and the case was referred to mediation.
{¶5} The Wageners filed a Chapter 7 bankruptcy and on June 18, 2012, the trial court entered an order staying the action.4 In October 2012, the stay was lifted and the case reactivated. Thе Wageners (now represented by counsel) filed an amended answer, asserting various affirmative defenses and several counterclaims against Bank of America for alleged violations of the Fair Debt Collection Practices Act and Ohio Consumer Sales Practices Act, fraud and invasion of privacy by intrusion of seclusion.
{¶6} On February 28, 2013, Bank of America, as successor by merger to BAC Home Loans, assigned its interest in the note and mortgage to Nationstar. The assignment was recorded on March 21, 2013. On April 24, 2013, the trial court granted Bank of America‘s motion to substitute Nationstar as the plaintiff pursuant to
{¶7} On May 24, 2013, Nationstar filed a motion for summary judgment on the complaint. Nationstar asserted that it was entitled to judgment and a decree of foreclosure as a matter of law because there were no genuine issues of fact that (1) the Wageners’ loan was in default and had not been cured, (2) notice of default and intent to accelerate the loan balance had been provided to the Wageners and (3) Nationstar, by virtue of the assignment from Bank of America and its possession of the original note endorsed in blank, was the current holder of the note and mortgage.
{¶8} Nationstar supported its motion with an affidavit from Bryan Muncy, an assistant secretary for Nationstar, along with copies of the note, the mortgage, the assignments from MERS to BAC Home Loans and from Bank of America to Nationstar, two notices advising the Wageners that the servicing of their mortgage loan was being transferred to Nationstar, a notice of intent to accelerate the loan due to default and the payment history for the loan — that Muncy attested in his affidavit to be “true and correct copies” of the originals. The Wageners opposed the motion, arguing that Nationstar had failed to establish that (1) Nationstar had standing to enforce the note and mortgage, (2)
{¶9} On September 16, 2013, the magistrate issued her decision granting summary judgment in favor of Nationstar on its complaint and the Wageners’ counterclaims and dismissing the Wageners’ counterclaims with prejudice. The Wageners filed objections to the magistrate‘s decision, raising the same arguments they made in opposing Nationstar‘s motion for summary judgment on its complaint.6 MERS,
{¶10} The Wageners appealed the trial court‘s judgment, raising the following assignment of error for review:
The trial court erred when it granted the substitute plaintiff appellee Nationstar‘s motion for summary judgment when [Bank of America] was unable to demonstrate standing, let alone entitlement to judgment as a matter of law.
Law and Analysis
Standard of Review
{¶11} We review summary judgment rulings de novo, applying the same standard as the trial court. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996). We accord no deference to the trial court‘s decision and independently review the record to determine whether summary judgment is appropriate.
{¶12} Under
{¶13} On a motion for summary judgment, the moving party carries an initial burden of identifying specific facts in the record that demonstrate its entitlement to summary judgment. Dresher v. Burt, 75 Ohio St.3d 280, 292-293, 662 N.E.2d 264 (1996). If the moving party fails to meet this burden, summary judgment is not appropriate; if the moving party meets this burden, the nonmoving party has the reciprocal burden to point to evidence of specific facts in the record demonstrating the existence of a genuine issue of material fact for trial. Id. at 293. Summary judgment is appropriate if the nonmoving party fails to meet this burden. Id.
Standing to Bring Foreclosure Action
{¶14} In support of their sole assignment of error, the Wageners first argue that the trial court erred in granting summary judgment to Nationstar on the complaint because Nationstar failed to establish that the original plaintiff, Bank of America, had standing to bring the foreclosure action at the time it filed the complaint.
{¶15} A party commencing litigation must have standing to sue in order to invoke the jurisdiction of the common pleas court. Fed. Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017, 979 N.E.2d 1214, ¶ 38. To have standing, a plaintiff must have “a personal stake in the outcome of the controversy and have suffered some concrete injury that is capable of resolution by the court.” Bank of Am., N.A. v. Adams, 8th Dist. Cuyahoga No. 101056, 2015-Ohio-675, ¶ 7, citing Tate v. Garfield Hts., 8th Dist. Cuyahoga No. 99099, 2013-Ohio-2204, ¶ 12, and Middletown v. Ferguson, 25 Ohio St.3d 71, 75, 495 N.E.2d 380 (1986). Because standing is required to invoke the jurisdiction of the common pleas court, “‘standing is to be determined as of the commencement of suit,‘” Schwartzwald at ¶ 24, quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 570-571, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992), fn. 5, and “‘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). “‘Post-filing events that supply standing that did not exist on filing may be disregarded, denying standing despite a showing of sufficient present injury caused by the challenged acts and capable of judicial redress.‘” Schwartzwald at ¶ 26, quoting 13A Wright, Miller & Cooper, Federal Practice and Procedure Section 3531, at 9 (2008).
{¶16} In a foreclosure action, a party has standing, “when, at the time it files its complaint of foreclosure, it either (1) has had the mortgage assigned to it, or (2) it is the holder of the note.” CitiMortgage, Inc. v. Patterson, 2012-Ohio-5894, 984 N.E.2d 392, ¶ 21 (8th Dist.), citing Schwartzwald at ¶ 28 (where plaintiff failed to establish an interest in note or mortgage at the time it filed foreclosure action, it had no standing to invoke the jurisdiction of the common pleas court). If a plaintiff lacks standing at the time it commences a foreclosure action, the case must be dismissed; it cannot be cured through an assignment or other transfer prior to judgment. Schwartzwald at ¶ 39-40.
Effect of Substitution of Plaintiff on Standing Requirement
{¶18} As the Ohio Supreme Court clearly stated in Schwartzwald, a plaintiff cannot rely on procedural substitution rules to cure a lack of standing when a foreclosure action is commenced:
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.Accordingly, a litigant cannot pursuant to
Civ.R. 17(A) cure the lack of standing after commencement of the action by obtaining an interest in the subject of the litigation and substituting itself as the real party in interest.
{¶20} Nationstar cites Bank of Am., N.A. v. Jackson, 12th Dist. Warren No. CA2014-01-018, 2014-Ohio-2480, for the proposition that where a party is substituted in as a plaintiff in a foreclosure action, it no longer has to be shown that the original plaintiff had standing on the date the complaint was filed. We do not read Jackson as standing for the proposition for which it is cited by Nationstar. The Jackson court stated:
Acсording to Ohio law, the “current holder” of a note and mortgage is entitled to bring a foreclosure action against a defaulting mortgagor. BAC Home Loans Servicing, LP v. Kolenich, 12th Dist. Butler No. CA2012-01-001, 2012-Ohio-5006, ¶ 38, citing
R.C. 1303.31(A) . Once Bank of America filed its motion to substitute, the court had evidence that Nationstar was the “current holder” of both the Jacksons’ note and mortgage because both the note and mortgage had been assigned to Nationstar from Bank of America on November 8, 2012. Therefore, Bank
of America was not required to produce the original note in order to prove that it had the ability to file the foreclosure suit as the Jacksons contend.
Id. at ¶ 25. The statement quoted above was made in the context of determining whether Bank of America had an obligation to produce the original note in order to establish it had standing at the time of filing of the complaint following the substitution of Nationstar as plaintiff, not whether Nationstar had no obligation, following its substitution as plaintiff, to establish that Bank of America had standing at the time it filed its complaint. Id. at ¶ 21-26. The Twelfth District held that because (1) the defendants had not raised a genuine issue as to the authenticity of the original note, (2) had not demonstrated that admission of the cоpy of the note would be otherwise unfair and (3) the trial court had evidence that Nationstar was now the “current holder” of the note and mortgage based on the assignment of the note and mortgage from Bank of America to Nationstar, the trial court did not err in admitting the copy of the note pursuant to
{¶21} Indymac Bank F.S.B. v. Borosh, 8th Dist. Cuyahoga No. 98520, 2013-Ohio-1180, on which Nationstar also relies, is likewise inapposite. In that case, the plaintiff cured a defect in its original complaint — i.e., that the mortgage had not yet been
Standing of Bank of America When Complaint Filed
{¶22} We now turn to the issue of whether a genuine issue of fact exists regarding whether Bank of America had standing to bring this foreclosure action at the time it filed the complaint. The Wageners argue that the trial court erred in entering summary judgment because genuine issues of fact existed both as to whether Bank of America had standing through possession of the original note and whether it had standing through assignment of the mortgage when the complaint was filed.9
Possession of the Original Note When the Complaint Was Filed
{¶23} The Wageners contend that the evidence Nationstar submitted to prove that Bank of America had pоssession of the original note when the complaint was filed — Bryan Muncy‘s affidavit — was not based on personal knowledge as required under
Requirements for Affidavits on Summary Judgment
{¶25}
Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated in thе affidavit. Sworn or certified copies of all papers or parts of papers referred to in an affidavit shall be attached to or served with the affidavit.
* * *
{¶26} Muncy‘s affidavit sets forth the information necessary to satisfy the requirements of
{¶27} Muncy averred that his affidavit was based on “personal knowledge obtained from [his] personal review of the business records for the loan which is the subject of this action.” Muncy explained that through his position as an assistant secretary at Nationstar he has access to Nаtionstar‘s business records, including loan documents and loan account records, and has personal knowledge regarding “the operation of and the circumstances surrounding the maintenance and retrieval of records in Nationstar‘s record keeping systems.” Although Muncy did not describe his specific job duties in his affidavit, he provided a broad overview of the processes by which Nationstar‘s loan account records are created and maintained, including how Nationstar has incorporated the business records of its predecessors into its own.
{¶28} Muncy incorporated the note endorsed in blank, the mortgage, the assignments from MERS to BAC Home Loans and from Bank of America to Nationstar,
{¶29} Muncy averred, based on the documents, that the Wageners had executed and delivered a promissory note to Countrywide in 2007 and that the note was thereafter endorsed in blank by Countrywide. Muncy further averred that at the time of the filing of the complaint, Bank of America, the “successor by merger to BAC Home Loans,” was in possession of the original note, that Bank of America had maintained continuous possession of the note until servicing of the Wageners’ loan was transferred to Nationstar and that Nationstar “now has possession of the original Note.” Muncy also identified the chain of assignments leading to the assignment of the note and mortgage to Nationstar. Muncy averred that payments had not been made as required under the loan agreement, that the default on the loan had not been cured and that Nationstar had elected to accelerate the balance due under the terms of the note and mortgage. Muncy averred thаt a principal balance of $144,168.73, plus interest at the rate of 6.25 percent per annum from November 1, 2010 was due and owing on the note.
{¶30} The Wageners argue that regardless of the averments in his affidavit, “there is no earthly way” that Muncy (or any other representative of Nationstar) could
{¶31} The facts stated in Muncy‘s affidavit, combined with the position he holds at Nationstar and his assertions regarding his job duties there, create a reasonable inference that Muncy has personal knowledge of the facts contained in his affidavit. With respect to Muncy‘s purported knowledge of the actions taken by Nationstar‘s predecessors with respect to the Wageners’ loan, as Muncy explained in his affidavit, his knowledge of the faсts and circumstances relating to the Wageners’ loan was not based just on his review of the records created by Nationstar but also included the loan account records of Nationstar‘s predecessors, which had been incorporated into Nationstar‘s business records.
Similar averments have been deemed sufficient to satisfy a plaintiff‘s burden on summary judgment in other foreclosure actions. See, e.g., Nationstar Mtge. L.L.C. v. Williams, 5th Dist. Delaware No. 14 CAE 04 0029, 2014-Ohio-4553, ¶ 16-18 (affidavit was “properly admissible Civil Rule 56 evidence” where it could be reasonably inferred from affiant‘s position as assistant secretary of plaintiff and statement that she reviewed the loan documents that affiant had personal knowledge of facts stated in affidavit), citing OneWest Bank, FSB v. Albert, 5th Dist. Stark No. 2013CA00180, 2014-Ohio-2158, ¶ 23-26; see also Wells Fargo Bank, N.A. v. Hammond, 8th Dist. Cuyahoga No. 100141,
{¶32} The Wageners reliance on Bank of N.Y. Mellon Trust Co. Natl. v. Mihalca, 9th Dist. Summit No. 25747, 2012-Ohio-567, is misplaced. In that casе, the affidavit submitted in support of the plaintiff bank‘s motion for summary judgment was from an individual who identified herself as the assistant secretary for Barclay‘s Capital Release Estate, Inc. “as the attorney in fact for the [plaintiff bank]” without explaining how that position related to or made the affiant familiar with the bank‘s records and, specifically, the appellant‘s account records. Id. at ¶ 3, 17. The Ninth District held that these facts along with the affiant‘s “broad averment” that the plaintiff bank was “the holder” of the note without identifying the factual basis that led to such a conclusion “suggest[ed]” that it was “unlikely that she had personal knowledge of the Bank‘s current possession of the note” and that the affidavit was therefore insufficient to establish the bank‘s entitlement to foreclosure. Id. at ¶ 17-18. Muncy, by contrast, clearly identified both his connection to Nationstar and Nationstar‘s connection to Bank of America in his affidavit and explained that his position as assistant secretary for Nationstar made him familiar with the
{¶33} Likewise, this is not a case such as Bank of N.Y. Mellon v. Villalba, 9th Dist. Summit No. 26709, 2014-Ohio-4351, in which ambiguity or imprecise language in the averments of the affidavit “seems to indicate” that the affiant lacked personal knowledge of the plaintiff‘s possession of the note. Id. at ¶ 13-16 (where affiant averred in her affidavit that bank “directly or through an agent” had possession of the note, suggesting that affiant was unsure as to the location of the note, that bank “purchased, acquired and/or otherwise obtained possession of the note and mortgage before June 22, 2011” and that affiant‘s personal knowledge of matters asserted in affidavit came from her review of the particular business records attached to affidavit but documents attached to affidavit did not establish when, if ever, bank came into possession of the note, affidavit did not support claim that affiant had personal knowledge of the bank‘s possession of note as of the date at issue). (Emphasis added.) In his affidavit, by contrast, Muncy clearly and unambiguously stated:
At the time of the filing of the Complaint in foreclosure on September 8, 2011, Bank of America, N.A. successor by mеrger to BAC Home Loans Servicing, LP fka Countrywide Home Loans Servicing, LP was in possession of the original promissory Note and continuously thereafter until servicing of the Wageners’ loan account transferred to Nationstar. Nationstar now has possession of the original Note.
{¶34} Upon Nationstar‘s submission of this evidence, the burden then shifted to the Wageners to present evidence of conflicting facts demonstrating a genuine issue of material fact for trial as to Muncy‘s personal knowledge. The Wageners, however, have
{¶35} Although the Wageners complain that “[n]one of the exhibits attached to [Muncy‘s] affidavit demonstrate[s] that [Bank of America] had possession of the original note when the complaint was filed” and that there is no “‘chain of title’ offered by way of transmittal letters, or otherwise to demonstrate the path the [note] allegedly traveled on its way into the possession of Nationstar,” they cite no authority supporting their contention that specific documentary evidence must be produced establishing how, when and by what means a party came into possession of a note in order to establish standing for summary judgment purposes.
{¶36} Further, the averment in Muncy‘s affidavit that Bank of America was in possession of the note at the time it filed its complaint is supported by the fact that a copy of the note endorsed in blank was attached to the complaint when it was filed by Bank of America. See, e.g., Perry, 2013-Ohio-5024 at ¶ 12; U.S. Bank, N.A. v. Adams, 6th Dist. Erie No. E-11-070, 2012-Ohio-6253, ¶ 18, citing Cent. Mtge. Co. v. Elia, 9th Dist. Summit No. 25505, 2011-Ohio-3188, ¶ 11.
{¶37} The Wageners also contend that Muncy‘s affidavit was deficient because Muncy did not state that he personally viewed the original note (as opposed to an electronic scan of the note) and compared the original to the copy of the note attached to his affidavit before testifying that the copy of the note was a “true and correct copy” of
{¶38} This court previously rejected such an argument in Hammond, 2014-Ohio-5270, as follows:
As for the decision of the Fifth District Court of Appeals in Wachovia Bank of Delaware, N.A., 2011-Ohio-3203 at ¶ 46, 49, which provides that summary judgment affidavits based on documents must include an averment that the affiant compared copies of the documents attached to the affidavit with the originals, this court has not adopted this as a requirement under
Civ.R. 56(E) , nor do we intend to do so because the Ohio Supreme Court has not made this a requirement ofCiv.R. 56(E) . See HSBC Mtge. Servs. v. Williams, 12th Dist. Butler No. CA2013-09-174, 2014-Ohio-3778.* * * [W]e find appellant‘s reliance on Edmon to be misplaced. In Edmon, the Sixth District held that the trial court erred in granting summary judgment to the bank where the borrower demonstrated a triable issue of fact as to the authenticity of the promissory note by offering testimony showing that the loan servicing officer did not review the original promissory note prior to swearing in her affidavit that the copy of the note attached to complaint was a true and accurate copy of the original. In Edmon, the servicing officer admitted at her deposition that she never viewed the original note. In the case at hand, however, appellant has provided this court with no evidence to suggest that [the affiant] reviewed only imaged copies of the documents he claimed to authenticate in his affidavit. Thus, there is no triable issue relating to [the affiant‘s] personal knowledge in this matter.
Id. at ¶ 37-38. In this case, Muncy‘s affidavit included statements from which it could be inferred that he compared the original note and mortgage (and the other documents referenced in his affidavit) to the copies so he could attest that the copies attached to his affidavit were true and correct. See U.S. Bank N.A. v. Bobo, 4th Dist. Athens No. 13CA45, 2014-Ohio-4975, ¶ 30. The Wageners provided no evidence to suggest that Muncy reviewed only an imaged copy of the note he claims to authenticate in his affidavit. Therefore, there is no triable issue of fact relating to Muncy‘s authentication of these documents as set forth in his affidavit.10
{¶39} The summary judgment evidence submitted by Nationstar established that Bank of America had the requisite standing to bring the foreclosure action because it possessed the original note endorsed in blank at the time it filed the complaint. The “holder” of a note is a “person entitled to enforce [it].”
{¶40} Accordingly, there is no genuine issue of material fact as to Bank of America‘s possession of the original note at the time it filed the complaint. The trial court did not err in concluding that Bank of America had standing to bring the foreclosure action.
Standing Through Assignment of the Mortgage Evidence of Merger
{¶42} First, the Wageners did not raise the issue below. Therefore, they have waived it. It is well established that a party cannot raise new issues for the first time on
{¶43} Furthermore, failure to move to strike or otherwise object to documentary evidence submitted by a party in support of, or in opposition to, a motion for summary judgment waives any error in considering that evidence under
{¶45} Third, Muncy‘s affidavit included an averment that Bank of America was the “successor by merger to BAC Homes Loans Servicing, LP fka Countrywide Home Lоans Servicing, LP.” Such averments have been deemed sufficient to establish the fact a merger has occurred for summary judgment purposes in a foreclosure action. See, e.g., Bank of Am., N.A. v. Eten, 12th Dist. Butler No. CA2013-05-087, 2014-Ohio-987, ¶ 17,
{¶46} Therefore, the Wageners did not raise a genuine issue of material fact regarding Bank of America‘s standing to bring the foreclosure action.
Arguments Unrelated to Standing of Bank of America
{¶47} Although the Wageners’ vaguely worded assignment of error is arguably limited to the standing of Bank of America at the time it filed its complaint, the Wageners also raise two additional issues unrelated to the standing of Bank of America that they contend precluded summary judgment in favor of Nationstar. First, the Wageners contend that the trial court erred in entering summary judgment because the documents attached to Muncy‘s affidavit established that the only rights transferred from Bank of America to Nationstar were “servicing rights” and not “holder status.” Second, they argue that summary judgment was improper because genuine issues of material fact existed as to whether all conditions precedent to foreclosurе had been satisfied. Neither of these arguments is persuasive.
Transfer of Servicing Rights
{¶49} In support of their argument that only servicing rights were transferred to Nationstar, the Wageners cite to the following language contained in the “Notice of Assignment, Sale or Transfer of Servicing Rights,” which Nationstar sent the Wageners on or about February 28, 2013:
You are hereby notified that the servicing of your mortgage loan, that is, the right to collect payments from you, is being assigned, sold or transferred from BANK OF AMERICA, N.A. to Nationstar Mortgage, L.L.C., effective 2/16/13.
This assignment, sale, or transfer of the servicing of the mortgage loan does not affect any other terms or condition of the mortgage instruments, other than the terms related to servicing оf the loan.
{¶50} Simply because the Wageners were notified of the transfer of servicing from Bank of America to Nationstar in the “Notice of Assignment, Sale or Transfer of Servicing Rights,” (emphasis added), does not mean Nationstar did not also become the holder of the note and mortgage by virtue of the assignment and/or transfer of possession of the note from Bank of America. Whereas the mortgage required that the borrower be given written notice of a change in servicer, the mortgage did not require that the
The Note or a partial interest in the Note (together with this Security Instrument) can be sold one or more times without prior notice to the Borrower. A sale might result in a change in the entity (known as the “Loan Servicer” that collects Periodic Payments due under the Note and this Security Instrument and performs other mortgage loan servicing obligations under this Note, this Security Instrument, and Applicable Law. There might also be one or more changеs of the Loan Servicer unrelated to a sale of the Note. If there is a change of the Loan servicer, Borrower will be given written notice of the change * * *.
{¶51} As detailed above, the record reflects that Nationstar, by virtue of its possession of the original note endorsed in blank, was the holder of the note and also that the note and mortgage were assigned to Nationstar before it was substituted as the plaintiff. Accordingly, Nationstar established that it was the holder of the note and mortgage and, therefore, that it had standing to enforce the note and mortgage. This argument lacks merit.
Failure to Satisfy Conditions Precedent
{¶52} As its final argument, the Wageners contend that summary judgment was improper because Nationstar failed to establish that it (or its predecessors) provided
{¶53} Where prior notice of default or acceleration is required under the terms of a mortgage, compliance with that requirement is a condition precedent to foreclosure. See, e.g., N.Y. Life Ins. & Annuity v. Vengal, 8th Dist. Cuyahoga No. 100557, 2014-Ohio-4798, ¶ 11, citing Bank of Am., N.A. v. Pate, 8th Dist. Cuyahoga No. 100157, 2014-Ohio-1078, ¶ 8. A plaintiff seeking to foreclose on the mortgaged property must, therefore, prove that such notice has been given.
{¶54} As proof that notice of default and intent to accelerate had been provided to the Wageners as required under the note and mortgage, Nationstar submitted a notice of intent to accelerate, dated December 20, 2010. The notice was attached to Muncy‘s affidavit, and Muncy averred in his affidavit that BAC Home Loans had sent the notice to the Wageners.
{¶55} The Wageners contend that the notice of intent to accelerate “should not have been admissible” because Muncy averred in his affidavit only that “he reviewed the records of Nationstar” and failed to establish that he had personal knowledge of the business records or practices of BAC Home Loans. As such, the Wageners contend, Muncy could not properly “authenticate a letter allegedly sent by” BAC Home Loans or establish that the notice of intent to accelerate letter had, in fact, been sent to the Wageners by BAC Home Loans.
{¶57} The Wageners further claim that, even if the notice of intent to accelerate was properly considered by the trial court, the notice was deficient. The Wageners contend that the notice did not contain “the language contractually required” by the Wageners’ mortgage and failed to properly inform the Wageners of their rights to reinstate the loan after acceleration and to assert defenses to acceleration and foreclosure in the foreclosurе proceeding. They also claim the notice was deficient because the letter was sent by BAC Home Loans as the servicer and because there is no evidence of “the method of mailing” of the notice. None of these arguments has any merit.
{¶58} Paragraph 22 of the mortgage, entitled “Acceleration; Remedies,” provides in relevant part:
Lender shall give notice to Borrower prior to acceleration following Borrower‘s breach of any covenant or agreement in this Security Instrument * * *. The notice shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to the Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument, foreclosure by judicial proceeding and sale of the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to assert in the foreclosure proсeeding the non-existence of a default or any other defense of Borrower to acceleration and foreclosure. If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may foreclose this Security Instrument by judicial proceeding. * * *
{¶59} Paragraph 6(C) of the note states:
If I am in default, the Note Holder may send me a written notice telling me that if I do not pay the overdue amount by a certain date, the Note Holder may require me to pay immediately the full amount of Principal which has not been paid and all the Interest that I owe on that amount. That date must be at least 30 days after the date on which the notice is mailed to me or delivered by other means.
{¶60} The notice, dated December 20, 2010, states that the loan “is in serious default because the required payments have not been made,” that the Wageners have a right to cure the default, that $3,275.60 is the amount “now required to reinstate the loan” and that if the Wageners fail to remit $3,275.60 by January 19, 2011 to cure the default, “the mortgаge payments will be accelerated with the full amount remaining accelerated and becoming due and payable in full and foreclosure proceedings will be initiated at that time. As such, the failure to cure the default may result in the foreclosure and sale of your property.” The notice further provides, in relevant part:
You may, if required by law or your loan documents, have the right to cure the default after acceleration of the mortgage payments and prior to the foreclosure sale of your property if all amounts past due are paid within the time period permitted by law. * * * Further, you may have the right to bring a court action to assert the non-existence of a default or any other defense you may have to acceleration and foreclosure.
{¶61} A review of the notice sent on behalf of Bank of America shows that it conformed to the requirements of the note and mortgage. The Wageners contend that because the notice states “you may have a right to bring a court action to assert the non-existence of a default or any other defense you may have to acceleration and
As for the notice‘s mention of bringing a court action to assert the non-existence of default or any other defense the borrower may have to acceleration and foreclosure, it specifies the possible defense of nonexistence of a default and as per the contract also discloses that other defenses exist, specifying that they are “defensеs to acceleration and foreclosure.” Furthermore, overlooked in the borrowers’ argument is the fact that the recitation of the defenses was made in the context of the bank speaking of its own initiation of foreclosure proceedings. We conclude that the letter did not violate the contractual requirement that the notice inform the borrower of the right to assert a defense in the foreclosure proceeding.
Bank of Am., N.A. v. Stewart, 7th Dist. Mahoning 13 NA 48, 2014-Ohio-723, ¶ 21. We agree with the reasoning of the Seventh District in Stewart.
{¶62} The fact that the notice was sent by the servicer rather than the “lender” or “note holder” is of no consequence. The letter is written on Bank of America letterhead.
Conclusion
{¶63} Upon our review of the record, we find that the trial court properly entered summary judgment in favor of Nationstar on its complaint. Muncy‘s affidavit and the other evidentiary materials submitted by Nationstar established that Bank of America, based on its possession of the original note endorsed in blank and the subsequent assignments of the mortgage and Bank of America‘s merger with BAC Home Loans,12
{¶65} Judgment affirmed.
It is ordered that appellee recover from appellants the costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to said court to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to
_____________________________________________
EILEEN A. GALLAGHER, PRESIDING JUDGE
TIM McCORMACK, J., and
EILEEN T. GALLAGHER, J., CONCUR
Notes
As this court explained in Bank of Am., N.A. v. Later, 8th Dist. Cuyahoga No. 100606, 2014-Ohio-2536:
“[A] merger involves the absorption of one company by another, the latter retaining its own name and identity, and acquiring the assets, liabilities, franchises and powers of the former. Of necessity, the absorbed company ceases to exist as a separate business entity.” Morris v. Invest. Life Ins. Co., 27 Ohio St.2d 26, 31, 272 N.E.2d 105 (1971). “[T]he absorbed company becomes a part of the resulting company following merger [and] the merged company has the ability to enforce * * * agreements as if the resulting company had stepped in the shoes of the absorbed company.” Acordia of Ohio, L.L.C. v. Fishel, 133 Ohio St.3d 356, 2012-Ohio-4648, 978 N.E.2d 823, ¶ 7. Once “‘an existing bank takes the place of another bank after a merger, no further action is necessary’ to become a real party in interest.” [Bank of Am., N.A. v. Harris, 8th Dist. Cuyahoga No. 99272, 2013-Ohio-5749, ¶ 18], quoting Huntington Natl. Bank v. Hoffer, 2d Dist. Greene No. 2010-CA-31, 2011-Ohio-242, ¶ 15.