U.S. Bank National Association, as Trustee for BNC Mortgage Loan Trust 2007-2, Mortgage Pass-Through Certificates, Series 2007-2 v. The 3076 Representation Terrace Trust, Brian K. Urbanski, as Trustee, Robert L. Hendrix et al.
No. 13AP-520
IN THE COURT OF APPEALS OF OHIO TENTH APPELLATE DISTRICT
June 3, 2014
[Cite as U.S. Bank Natl. Assn. v. Urbanski, 2014-Ohio-2362.]
BROWN, J.
(C.P.C. No. 12CVE03-2924) (REGULAR CALENDAR)
Rendered on June 3, 2014
Dinn, Hochman & Potter, LLC, and Benjamin D. Carnahan, for appellee.
Duncan Simonette, Inc., Brian K. Duncan, and Bryan D. Thomas, for appellant.
APPEAL from the Franklin County Court of Common Pleas.
BROWN, J.
{¶ 1} The 3076 Representation Terrace Trust, Brian K. Urbanski, as Trustee (“Urbanski“), defendant-appellant, appeals the judgment of the Franklin County Court of Common Pleas, in which the court granted the motion for summary judgment filed by
{¶ 2} On January 26, 2007, Robert L. Hendrix and Rhonda C. Wheeler executed a promissory note (“the note“) payable to BNC Mortgage, Inc. (“BNC“), in the sum of $99,200. The note was secured by a mortgage on the property. BNC subsequently executed an allonge to the note indorsed in blank. USB came into possession of the note. Hendrix and Wheeler executed a mortgage to Mortgage Electronic Registration Systems, Inc. (“MERS“), as nominee for BNC, and the mortgage was recorded on February 7, 2007.
{¶ 3} Hendrix and Wheeler quit paying under the note and mortgage sometime in early 2010. On May 16, 2011, Hendrix and Wheeler transferred their interest in the property to Urbanski for zero compensation. MERS assigned the mortgage to USB on February 21, 2012.
{¶ 4} On March 6, 2012, USB filed a complaint in foreclosure against Hendrix, Wheeler, Urbanski, and several other entities with a possible interest in the property. Urbanski filed an answer and counterclaim. Hendrix and Wheeler did not answer the complaint. On May 10, and July 5, 2012, Urbanski filed motions to dismiss, based on the claim that USB was not the holder of the note and mortgage. On July 24, 2012, the trial court denied Urbanski‘s motions to dismiss.
{¶ 5} On March 26, 2013, USB filed a motion for summary judgment, claiming it was the proper holder of the note and mortgage and was entitled to foreclose on the property. On April 1, 2013, Urbanski filed a motion for summary judgment, claiming USB was not the holder of the note and mortgage and that the court should find that USB admitted it was not entitled to foreclose because it failed to respond to Urbanski‘s request for admissions.
{¶ 6} On May 17, 2013, the trial court issued a decision and entry granting USB‘s motion for summary judgment and denying Urbanski‘s motion for summary judgment. The trial court concluded USB was the holder of the note and mortgage and was entitled to foreclose on the property. Of note, the trial court found Urbanski‘s “menagerie of arguments” to be “utter garbage,” with some bordering on “frivolous,” and believed Urbanski “purposely mislead” the court regarding the request for admissions issue.
THE TRIAL COURT ERRED IN DENYING DEFENDANT/APPELLANT‘S MOTION FOR SUMMARY JUDGMENT AND GRANTING PLAINTIFF/APPELLEE‘S MOTION FOR SUMMARY JUDGMENT WITH RESPECT TO ITS COMPLAINT BECAUSE THERE WERE GENUINE ISSUES OF MATERIAL FACT, INCLUDING BUT NOT LIMITED TO, WHETHER PLAINTIFF HAD STANDING TO INITIATE THE ABOVE-CAPTIONED ACTION[;] WHETHER PLAINTIFF WAS A REAL PARTY IN INTEREST; WHETHER PLAINTIFF CAN DEMONSTRATE CHAIN OF TITLE OF THE PROMISSORY NOTE; WHETHER PLAINTIFF‘S AFFIDAVIT COMPLIED WITH THE RULES OF EVIDENNCE AND/OR APPLICABLE LAW, AS WELL AS ITS ACCURACY; WHETHER PLAINTIFF‘S FAILURE TO TIMELY RESPOND TO DEFENDANTS REQUEST FOR ADMISSIONS SHOULD HAVE RENDERED THE SAME AS BEING DEEMED ADMITTED; AND/OR WHETHER ANY UNDERLYING DOCUMENTATION, INCLUDING BUT NOT LIMITED TO, THE ALLONGE HAD BEEN ALTERED.
{¶ 7} Urbanski argues in his assignment of error that the trial court erred when it granted summary judgment in favor of USB and denied his motion for summary judgment. Summary judgment is appropriate when the moving party demonstrates that: (1) there is no genuine issue of material fact, (2) the moving party is entitled to judgment as a matter of law, and (3) reasonable minds can come to but one conclusion when viewing the evidence most strongly in favor of the non-moving party, and that conclusion is adverse to the non-moving party. Hudson v. Petrosurance, Inc., 127 Ohio St.3d 54, 2010-Ohio-4505, ¶ 29; Sinnott v. Aqua-Chem, Inc., 116 Ohio St.3d 158, 2007-Ohio-5584, ¶ 29. Appellate review of a trial court‘s ruling on a motion for summary judgment is de novo. Hudson at ¶ 29. This means that an appellate court conducts an independent review, without deference to the trial court‘s determination. Zurz v. 770 W. Broad AGA, L.L.C., 192 Ohio App.3d 521, 2011-Ohio-832, ¶ 5 (10th Dist.); White v. Westfall, 183 Ohio App.3d 807, 2009-Ohio-4490, ¶ 6 (10th Dist.).
{¶ 8} When seeking summary judgment on the grounds that the non-moving party cannot prove its case, the moving party bears the initial burden of informing the trial court of the basis for the motion and identifying those portions of the record that
{¶ 9} In the present case, Urbanski argues that USB did not have standing at the time it filed its complaint and/or was not the holder of the note and mortgage, asserting several arguments. Urbanski first contends that the note was not properly indorsed because the note attached to the complaint does not contain an indorsement; thus, there was no valid negotiation of the note. Urbanski also contends that USB did not own the note at the time the complaint was filed, because under the trust agreement on file with the United State Securities and Exchange Commission (“SEC“), only the depositor, Structured Asset Securities Corporation can transfer a note to the trust. Urbanski further contends that it is necessary to have a recorded assignment of mortgage in order to comply with the Statue of Frauds.
{¶ 10} We disagree with Urbanski‘s contentions. Pursuant to
{¶ 11} Furthermore, with regard to the mortgage, USB presented unrebutted evidence that the mortgage was assigned to USB, via a copy of the assignment of mortgage attached to the complaint, which indicated that the mortgage was assigned to USB on February 21, 2012. Notwithstanding the explicit assignment of mortgage, this court has also held that an assignment of the interest of the seller or other grantor of a security interest in a note automatically transfers a corresponding interest in the mortgage to the assignee. Pasqualone at ¶ 40. Thus, in the present case, where the note was indorsed in blank and USB was the holder of the note, the mortgage was equitably assigned to USB.
{¶ 12} As for Urbanski‘s argument that USB did not “own” the note at the time the complaint was filed because under the trust agreement on file with the SEC, only the depositor, Structured Asset Securities Corporation could transfer a note to the trust, this argument is without merit. Initially, we point out that Urbanski did not raise this argument in his motion for summary judgment or memorandum contra USB‘s motion for summary judgment; therefore, it is waived. See Cowan v. Interdyne Corp., 3d Dist. No. 1-12-26, 2013-Ohio-642, ¶ 27 (a party‘s failure to raise an issue in response to an adverse party‘s motion for summary judgment waives that issue for purposes of an appeal); McVey v. Carthage Twp. Trustees, 4th Dist. No. 04CA44, 2005-Ohio-2869, ¶ 6 (failure to raise arguments in motion for summary judgment waives them for purposes of appeal). Notwithstanding, while a debtor has the right to challenge whether the creditor is the holder of the note, a debtor generally lacks standing to challenge who the owner of the note is because it does not impact who is entitled to enforce the note. Pasqualone at ¶ 25, citing In re Veal, 450 B.R. 897, 912-13 (Bankr.9th Cir.2011). In other words, the question
{¶ 13} We also find meritless Urbanski‘s contention that it is necessary to have a “recorded” assignment of mortgage in order to comply with the Statue of Frauds. Urbanski cites no authority for his proposition. If by “recorded” Urbanski means that the assignment must be in writing, which is what he seems to suggest in his appellate brief, there was clearly a writing evidencing the assignment of the mortgage, as discussed above. Furthermore, as we also explained above, the mortgage was equitably assigned to USB when USB became the holder of the note. Therefore, we find this argument without merit.
{¶ 14} Urbanski next asserts that the Kelly affidavit submitted by USB failed to comply with the Ohio Rules of Evidence and was inaccurate. Urbanski first contends that Kelly‘s affidavit is generic in nature because it does not mention the allonge attached to the note and inaccurately depicts the assignment of mortgage. Initially, Urbanski cites no authority for the proposition that Kelly was required to note in his averment that the promissory note had an allonge included. It was sufficient that Kelly averred that the note was indorsed in blank. The indorsement in blank was in the allonge. This averment was sufficient to demonstrate USB was a holder.
{¶ 15} As for the argument that Kelly should have observed that the assignment of mortgage assigned the mortgage back to MERS, we also find this argument without merit. The assignment of mortgage provides, in pertinent part:
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, Mortgage Electronic Registration Systems, Inc., as nominee for BNC Mortgage, Inc. A Delaware Corporation, its successors and assigns * * * does hereby assign to U.S. Bank National Association, as Trustee for BNC Mortgage Loan Trust 2007-2, Mortgage Pass-Through Certificates, Series 2007-2 * * * all of its interest in that certain mortgage from Robert L. Hendrix, an unmarried man and Rhonda C. Wheeler, an unmarried woman to Mortgage Electronic Registration Systems, Inc., as nominee for BNC Mortgage, Inc. A Delaware Corporation, its successors and assigns, dated January 26, 2007, recorded February 7, 2007.
(Emphasis added.) Although Urbanski does not develop his argument, he seems to believe the above provision provides that MERS assigned to USB all of its interest in the mortgage, and then USB transferred the mortgage back to MERS. Presumably, Urbanski
{¶ 16} Urbanski also contends that an affidavit filed by Kelly in another jurisdiction appears to have a signature with different characteristics. However, Urbanski presents nothing beyond his speculation to support such an allegation. Besides being unsupported by any legal authority, his demand that USB should have been required to produce “wet ink” originals of Kelly‘s affidavit prior to summary judgment being granted is also untenable, given Urbanski was free to conduct discovery and inspect such if he so desired. Therefore, these arguments are without merit.
{¶ 17} Urbanski next contends that USB‘s request for admissions submitted to appellee should have been deemed admitted by operation of
{¶ 18} We disagree with Urbanski‘s contentions. Urbanski neglects some facts in his recitation of the timeline. Urbanski subsequently filed a motion to compel on January 8, 2013 in which he generally recited the same timeline as above. However, as USB indicated in its notice of submission of discovery and memorandum contra Urbanski‘s motion to compel, Urbanski failed to mention that USB‘s counsel responded to
{¶ 19} In addressing Urbanski‘s argument that USB‘s failure to timely respond to his request for admissions should constitute its admission that it had no interest in the subject property, the trial court noted the failure of Urbanski to divulge to the court that USB, in fact, submitted responses to Urbanski‘s request for admissions on January 11, 2013. The court questioned whether Urbanski and his counsel believed the court was “too stupid to discover the truth.” The court also found that Urbanski‘s attempt to “mislead” the court was “dishonest at best” and “fraudulent at worst.” The court then concluded that Urbanski suffered no prejudice by the late submission and denied Urbanski‘s request that USB be deemed to have admitted it had no interest in the property at issue. We agree with the trial court‘s findings. Therefore, this argument is without merit.
{¶ 20} Urbanski next argues that the allonge included within the promissory note was invalid for the following four reasons: (1) the allonge has a plainly discernible stamped signature rather than an actual signature, and, thus, the actual authority of the person utilizing the stamp has not been confirmed by appellee, (2) it appears the allonge was prepared in advance of Hendrix‘s and Wheeler‘s signatures and in advance of the promissory note being executed, (3) the allonge has a line that indicates the application number, and such line is blank, suggesting that it was prepared prior to the execution of the promissory note, and (4) the indorsement line of the allonge appears to have been altered by an erasure or use of “white out,” as there is an inconsistency between the appearance of the indorsement line and the authorization line on the allonge where the signature is stamped.
{¶ 21} In addressing these arguments, the trial court found that Urbanski presented absolutely no evidence to support his speculation that the transfers of the note and mortgage were not valid, while USB has presented evidence to support that it was the proper holder of the note and mortgage and was entitled to enforce the note and mortgage. We agree with the trial court that Urbanski‘s arguments are mere speculation
{¶ 22} Accordingly, Urbanski‘s sole assignment of error is overruled, and the judgment of the Franklin County Court of Common Pleas is affirmed.
Judgment affirmed.
TYACK and KLATT, JJ., concur.