U.S. Bank Trust, N.A. v. EdmonU.S. Bank Trust, N.A. v. Edmon
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Daniel A. Friedlander, for appellee.
Geoffrey L. Oglesby, for appellant.
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DECISION AND JUDGMENT
SINGER, J.
{¶ 1} Appellant, Dannie Edmon, appeals the August 17, 2017 summary judgment of the Erie County Court of Common Pleas granted in favor of appellee, U.S. Bank, National Association. For the reasons that follow, we affirm.
{¶ 2} Appellant sets forth the following assignments of error:
- I. The court erred in allowing the plaintiff an extension in time to supplement its motion for summary judgment.
- II. The court erred when it denied the motion to dismiss finding the plaintiff had standing to sue.
- III. The court erred in granting summary judgment when the facts were not rehabilitated from the former appellate issue regarding the first-hand knowledge.
- IV. The court erred in considering items found only in the reply brief in deciding the motion for summary judgment.
Background
{¶ 3} Appellant executed a promissory note and mortgage and secured a $155,000 loan from Accredited Home Lenders, Inc. in November of 2005. The note and mortgage were transferred to HSBC Mortgage Services, Inc. in February of 2010.
{¶ 4} Appellant defaulted on the loan, and HSBC filed a complaint to foreclose in March of 2010. See HSBC Mtge. Servs., Inc. v. Edmon, 6th Dist. Erie No. E-11-046, 2012-Ohio-4990, ¶ 2. Attached to the complaint were copies of the note, the mortgage, and a mortgage assignment. On November 24, 2010, HSBC moved for summary judgment, and attached to the motion was an affidavit from an HSBC employee. The contents of the affidavit were summarized as follows:
(1) [The affiant] is an employee of HSBC in the capacity of a loan servicing agent, (2) HSBC is the “owner in possession” of the promissory note and mortgage, “true and accurate copies of which were attached to [HSBC‘s] Complaint as Exhibits thereto,” (3) HSBC acquired the note on February 1, 2010, prior to the execution of the mortgage assignment, (4) HSBC has exercised the option contained in the “mortgage note,” and (5) [The affiant-employee] has personal knowledge of Edmon‘s account, the account is under her supervision, and Edmon is in default on the note and mortgage and owes $148,951.44, together with interest at the rate of 5.25 percent per year from August 1, 2009.
See Edmon at ¶ 3.
{¶ 5} Copies of the original note and mortgage were not attached to the affidavit. Nevertheless, the trial court granted summary judgment in favor of HSBC. The court found HSBC was holder of the original note, and that the note was retained at HSBC‘s office in New York. The court stated that the affiant-employee for HSBC requested the original note from the manager of the New York office and that the affiant-employee then sent the original note to counsel in Ohio. The court explicitly found it immaterial that the affiant employee did not see the note when she made the affidavit, stating that the affiant knew the original was in custody, and that it did not matter because she had a copy in the file she reviewed and the original was held in the New York office. See id. at ¶ 4.
{¶ 7} Subsequent to our remand, HSBC transferred the note and mortgage to appellee, U.S. Bank, National Association, as Trustee for LSF8 Master Trust, in August of 2014. On December 31, 2015, appellee filed for foreclosure against appellant, claiming he defaulted on the loan. Appellant moved to dismiss the case, asserting that appellee did not have standing to bring the foreclosure action. Appellee moved for summary judgment, attaching an unsigned affidavit.
{¶ 8} Appellant opposed summary judgment, noting the deficient affidavit. Appellee eventually filed a reply brief and numerous, additional affidavits in support of summary judgment. More specifically, appellee first filed a “motion for leave to supplement the record, instanter, with the attached affidavit,” on February 2, 2017. The attached affidavit was from Caliber Home Loans, Inc. servicing agent, David Nilsen. Appellee also filed the reply brief on May 12, 2017, and attached was an affidavit from Brian Arnold, the assistant vice president of Caliber Home Loans, Inc.
{¶ 10} The trial court granted appellee‘s motion for summary judgment and disposed of appellant‘s motion to dismiss.
{¶ 11} With respect to appellant‘s motion to dismiss, the judgment entry states that the complaint on its face showed the note had two allonges attached; “one from the original lender, Accredited Home Lender, Inc. to HSBC Mortgage Services, Inc. and a second allonge from HSBC Mortgage Services, Inc. by Caliber Home Loans, Inc. as its Attorney in Fact to [appellee].” The court further noted the existence of the recorded assignments in eventually holding that appellee satisfied the general standing requirements.
{¶ 12} The trial court also addressed and dismissed appellant‘s arguments relating to how appellee was not the proper party, how appellee did not hold the note, and how appellee committed an invited error by buying a faulty promissory note.
{¶ 13} As regards appellee‘s motion for summary judgment, the judgment entry reads that the “Arnold Affidavit established authentication [of the note], but also satisfied the same issues and concerns which caused the Sixth District to reverse previously.” The court held that the note and mortgage were properly transferred, and that authentication was proper.
{¶ 15} The trial court also found that the “evidentiary material” established that appellant was in default, and “that all conditions precedent” had been met. The court stated that the elements of appellee‘s foreclosure claim were met through the Nilsen affidavit, and that the deposition of employee, Lefycia Lopez, on which appellant relied to establish a question of material fact, was not notarized or properly filed. The court found that “even assuming arguendo it was properly in evidence, it merely supports the fact that Ms. Lopez did not discuss the case with the prior holder of the Note, HSBC, and didn‘t discuss it with Mr. Nilsen.” Following, the court held appellant established no genuine issue of material fact, and that the Arnold affidavit properly authenticated the note.
{¶ 16} Based on the findings, the trial court held that appellee met its burden, “albeit not until filing the Arnold Affidavit (on authentication and proper ownership of Note)[.]” The trial court granted summary judgment, and the judgment entry was journalized on August 17, 2017. This is the decision from which appellant now timely appeals.
{¶ 17} When reviewing a trial court‘s summary judgment decision, the appellate court conducts a de novo review. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996). Summary judgment will be granted when there remains no genuine issue of material fact and, when construing the evidence most strongly in favor of the non-moving party, reasonable minds can only conclude that the moving party is entitled to judgment as a matter of law.
Assignments of Error Nos. I and IV
{¶ 18} In his first and fourth assigned errors, appellant argues the court erred in allowing appellee to supplement its motion for summary judgment and subsequent reply brief with affidavits. Appellant labels appellee‘s tactics as “summary judgment by ambush.”
{¶ 19} Appellee contends the trial court did not err in allowing appellee to supplement its motion for summary judgment, and that appellant nevertheless waived the right to assert this challenge on appeal. We will address these assigned errors together.
{¶ 20} “With respect to the moving party raising a new argument in a reply brief, this has been characterized as ‘summary judgment by ambush.‘” See Charlesgate Commons Condominium Assn. v. W. Res. Group, 6th Dist. Lucas No. L-14-1039, 2014-Ohio-4342, ¶ 13, quoting Intl. Fid. Ins. Co. v. T C Architects, Inc., 9th Dist. Summit No. 23112, 2006-Ohio-4869, ¶ 11. “Hence, when a new argument is presented in a reply
{¶ 21} Here, the record reflects that appellant did not file a surreply or move to strike the reply brief or additional affidavits filed by appellee in support of its motion for summary judgment. Consequently, appellant is precluded from now raising the challenge on appeal. Id. The first and fourth assigned errors are not well-taken.
Assignment of Error No. II
{¶ 22} Appellant secondly argues appellee never had standing to foreclose because appellee purchased a defective promissory note, showed no path of ownership, and failed to show it suffered a cognizable injury. Appellee counters, asserting that it properly met its burden and showed it had standing to foreclose.
{¶ 23} The Supreme Court of Ohio has instructed that standing to sue in a foreclosure action must be determined at the start of the suit. See Bank of New York Mellon v. Matthews, 6th Dist. Fulton No. F-12-008, 2013-Ohio-1707, ¶ 11, citing Fed. Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017, 979 N.E.2d 1214. “Thus, if a party seeking to foreclose a mortgage fails to establish ‘an
{¶ 24} Here, there is no dispute appellant received a loan and executed a promissory note on November 15, 2005. To secure the note, appellant executed and delivered a mortgage to Accredited Home Lenders, Inc. This mortgage was recorded in Erie County on November 29, 2005, as Instrument No. 200516149. Accredited Home Lenders, Inc. then transferred the note and mortgage to HSBC Mortgage Services, Inc., who then transferred them to appellee. This transfer of interests to appellee is supported by two allonges stapled to the note and an assignment of the mortgage. The assignment was file-stamped and notarized on July 30, 2014, and then recorded as Instrument No. 201406127 of Erie County on August 4, 2014. Appellee filed suit on December 31, 2015.
{¶ 25} Accordingly we find appellee held the note and mortgage at the start of the suit, and thus had standing to foreclose. This second assigned error is meritless.
Assignment of Error No. III
{¶ 26} Although confusingly stated, the third assigned error seems to present two issues which relate to whether the evidentiary material submitted to support summary judgment showed appellee had a right to foreclose. Appellee contends it produced the necessary evidentiary material, and that appellant never issued subpoenas to seek testimony from any specific agent.
{¶ 28} Here, appellant specifically argues appellee failed to provide the proper agent to testify with firsthand knowledge about the note. Appellant cites
{¶ 29} Ohio‘s version of the Uniform Commercial Code (“U.C.C.“) governs who may enforce a promissory note. See
{¶ 30} In this case, we find appellee has met its burden by producing evidentiary-quality material to support that it held the note and was lawfully assigned the mortgage. Specifically, the affidavit of Brian Arnold satisfies this burden. Arnold is employed by Caliber Home Loans as an assistant vice president, and as such, he had personal knowledge of appellee‘s servicing agent, Caliber‘s business records. Arnold confirmed that Caliber, as reflected in its business records, was in possession of the original note and mortgage for appellee, and that Arnold personally held and examined the original note with two stapled allonges, the original mortgage, and the original assignment. We thus conclude that appellee satisfied its burden by producing evidentiary material to show that it is holder of the note and mortgage, and that it has rights to enforce through foreclosure. Appellant, on the other hand, fails to establish a question of material fact based on evidentiary-quality material and, therefore, fails to meet his reciprocal burden.
{¶ 31} Accordingly, and based on our de novo review of the record, the trial court‘s grant of summary judgment was proper. Appellant‘s third assignment of error is not well-taken.
{¶ 32} The judgment of the Erie County Court of Common Pleas is hereby affirmed. Appellant is ordered to pay the costs of this appeal pursuant to
Judgment affirmed.
A certified copy of this entry shall constitute the mandate pursuant to
Mark L. Pietrykowski, J. _______________________________
JUDGE
Arlene Singer, J. _______________________________
JUDGE
Christine E. Mayle, P.J. CONCUR. _______________________________
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.supremecourt.ohio.gov/ROD/docs/.