WILMINGTON TRUST, NATIONAL ASSOCIATION v. GARY L. BOYDSTON, ET AL.
No. 105009
Court of Appeals of Ohio EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA
July 13, 2017
2017-Ohio-5816
Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-15-854837
BEFORE: Keough, A.J., Stewart, J., and S. Gallagher, J.
RELEASED AND JOURNALIZED: July 13, 2017
A. Clifford Thornton
PDC Building, Suite 305
3659 Green Road
Beachwood, Ohio 44122
ATTORNEYS FOR APPELLEE
Justin M. Rich
Matthew P. Curry
Manley, Deas & Kochalski, L.L.C.
P.O. Box 165028
Columbus, Ohio 43216
Melany A. Fontanazza
James W. Sandy
McGlinchey Stafford, P.L.L.C.
25550 Chagrin Blvd., Suite 406
Cleveland, Ohio 44122
{1} Defendant-appellant, Gary L. Boydston (“Boydston“), appeals from the trial court‘s judgment that adopted the magistrate‘s decision granting summary judgment to plaintiff-appellee, Wilmington Trust, National Association, as Successor Trustee to Citibank N.A., as Trustee for Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed Certificates, Series 2006-HE5 (“Wilmington Trust“) on its claim for foreclosure against Boydston. Finding no merit to the appeal, we affirm.
I. Facts and Procedural History
{2} On June 9, 2006, Boydston executed a note in the amount of $110,500 payable to AEGIS Lending Corporation. The note was thereafter endorsed three times: first a specific endorsement from AEGIS Lending Corporation to AEGIS Mortgage Corporation; then a specific endorsement from AEGIS Mortgage Corporation to Citibank N.A., as Trustee for the MLMI Trust Series 2006-HE5 (“Citibank“); and subsequently, in an allonge affixed to the note, an endorsement in blank from Wilmington Trust as successor trustee to Citibank.
{3} To secure payment of the note, Boydston executed a mortgage on real property located in Parma, Ohio in favor of Mortgage Electronic Registration Systems, Inc. (“MERS“) as nominee for AEGIS Lending Corporation and its successors and assigns. The mortgage was recorded on October 6, 2006. On October 3, 2011, MERS assigned the mortgage to Citibank; it later executed a corrective assignment to Citibank to correct the name of the assignor. Subsequently, on October 31, 2012, Citibank and
{4} Boydston failed to make payments on the note and on November 24, 2015, Wilmington Trust filed a complaint seeking to recover the unpaid balance on the note and to foreclose on the mortgaged property. Attached to the complaint were copies of the note, the mortgage, the assignment and corrective assignment of the mortgage by MERS to Citibank, the resignation, successor appointment, and acceptance agreement between Citibank and Wilmington Trust, and a loan modification agreement between Boydston and Bank of America (the original loan servicer).
{5} Boydston answered the complaint. Subsequently, Wilmington Trust moved for summary judgment on its complaint. Attached to its motion was the affidavit of Christy Vieau, a document execution specialist at Nationstar Mortgage L.L.C. (“Nationstar“). Vieau averred that (1) Nationstar was the successor loan servicer after Bank of America for the loan secured by the mortgage on Boydston‘s property on Walter Avenue; (2) loan servicing records from Bank of America regarding Boydston‘s loan had been incorporated into Nationstar‘s records; (3) she had personal knowledge of the facts set forth in her affidavit based upon a review of Nationstar‘s business records and her knowledge of Nationstar‘s procedures for creating those records; (4) Wilmington Trust had possession of the note when the foreclosure complaint was filed; (5) Boydston had defaulted on the note; (6) on April 14, 2014, Nationstar mailed him a notice of default
{6} Boydston did not oppose Wilmington Trust‘s motion. The magistrate subsequently rendered a decision granting Wilmington Trust‘s motion and ordering judgment and a decree of foreclosure against Boydston. Boydston filed objections to the magistrate‘s decision, but the trial court overruled the objections and issued an order adopting the magistrate‘s decision. This appeal followed.
II. Law and Analysis
A. Standard of Review
{7} 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. Id.
{8} Under
B. Affidavit in Support of Motion for Summary Judgment
{10} To support a motion for summary judgment in a foreclosure action, a plaintiff must present evidentiary quality materials establishing: (1) the movant is the holder of the note and mortgage, or is a party entitled to enforce the instrument; (2) if the movant is not the original mortgagee, the chain of assignments and transfers; (3) the mortgagor is in default; (4) all conditions precedent have been met; and (5) the amount of principal and interest due. Deutsche Bank Natl. Trust Co. v. Najar, 8th Dist. Cuyahoga No. 98502, 2013-Ohio-1657, ¶ 17, citing United States Bank, N.A. v. Adams, 6th Dist. Erie No. E-11-070, 2012-Ohio-6253, ¶ 10.
{11} Wilmington Trust presented evidence through Vieau‘s affidavit and the attached authenticated and verified documents that it is the holder of and the party entitled to enforce the note and mortgage; Boydston is in default for failure to pay; Wilmington
{12} Boydston contends in his first assignment of error that Vieau‘s affidavit was deficient, however, and that the trial court therefore erred in adopting the magistrate‘s decision granting summary judgment to Wilmington Trust. He first argues that Vieau‘s affidavit was deficient because it did not set forth in detail the factual basis for her assertion that she has personal knowledge of the facts to which she testified in the affidavit. There is no requirement that an affiant do so.
{13}
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 the 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.
{14} Vieau‘s affidavit set forth the information necessary to comply with
{15} Vieau averred that she “ha[d] personal knowledge of the facts in this affidavit based upon a review of Nationstar‘s business records.” She further averred that as a document execution specialist at Nationstar, she was familiar with the type of records maintained by Nationstar in connection with Boydston‘s loan, and that the information in her affidavit was taken from Nationstar‘s business records. Although Vieau did not describe her specific duties in her affidavit, she 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. Vieau‘s specific assertion that she was testifying based on her personal knowledge, coupled with her position at Nationstar and her assertions regarding her job duties there, create a reasonable inference that she has personal knowledge of the facts contained in her affidavit.
{16} Boydston contends, however, that the information in Vieau‘s affidavit was gleaned from her review of “hearsay business records” that could not serve as the basis for personal knowledge. The Sixth District addressed the same argument recently in Wells Fargo Bank Natl. Assn. v. Maxfield, 12th Dist. Butler No. CA2016-05-089, 2016-Ohio-8102, a foreclosure case in which the appellants argued that the trial court
The Note, the Mortgage, the Mortgage Assignments, and the August 22, 2014 letter to appellants are not hearsay. “Hearsay” is defined as “a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.”
Evid.R. 801(C) . The foregoing documents were not offered to prove the truth of the matters asserted therein. Rather, the Note, the Mortgage, and the Mortgage Assignments were offered to prove that persons engaged in transactions creating legal rights and responsibilities. The August 22, 2014 letter to appellants was offered to prove that notice was given to appellants, not whether the information contained in the letter was true. The Staff Note toEvid.R. 801(C) recognizes this distinction by providing that “[w]ords constituting conduct are not hearsay, e.g., words of a contract * * * and the like.” Here, the Note is a contract and the Mortgage and Mortgage Assignments are “like” a contract in that they all create legal rights and responsibilities. Additionally, the Mortgage, the Mortgage Assignments, and the statements contained therein are excepted from the hearsay rule underEvid.R. 803(14) and(15) as records of documents affecting an interest in property and statements in documents affecting an interest in property.
{17} The court found that the only hearsay document referred to by the affiant was the borrower‘s payment history, which the affiant had qualified as properly excepted from the hearsay rule as a business record pursuant to
{18} Here, in framing her affidavit testimony, Vieau utilized the note, mortgage, mortgage assignments, loan modification agreement, the letter advising Boydston of his default, and Boydston‘s payment history. Consistent with Maxfield, we find that Vieau‘s reliance on these documents to form the basis for her personal knowledge of the facts set forth in the affidavit was proper; the documents she relied upon were either not hearsay or excepted from the hearsay rule.
{19} Even if the documents were considered to be hearsay, Vieau‘s affidavit provided a sufficient foundation to qualify the documents as business records exempted from the hearsay rule under
{20} Vieau testified that as part of her job duties, she was familiar with the records relating to Boydston‘s loan, the records were made at or near the time of the event described in the record by a person with knowledge, the records were made and kept in the ordinary course of Nationstar‘s regularly conducted business activity, and she had
{21} Boydston next contends that Vieau‘s affidavit was insufficient to warrant summary judgment in favor of Wilmington Trust because it failed to establish that Wilmington Trust had standing to bring the foreclosure action or that it was the real party in interest.
{22} 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, ¶ 20. A party has standing if it has a personal stake in the outcome of the controversy and has suffered some concrete injury that is capable of resolution by the court. Tate v. Garfield Hts., 8th Dist. Cuyahoga No. 99099, 2013-Ohio-2204, ¶ 12.
{23} Standing to commence a foreclosure action requires that the plaintiff hold the note and have an interest in the mortgage when the foreclosure complaint is filed. Fannie Mae v. Hicks, 8th Dist. Cuyahoga No. 103804, 2016-Ohio-8484, ¶ 4, fn. 2, citing Deutsche Bank Natl. Trust Co. v. Holden, 147 Ohio St.3d 85, 2016-Ohio-4603, 60 N.E.3d 1243, ¶ 27; Najar, 8th Dist. Cuyahoga No. 98502, 2013-Ohio-1657 at ¶ 56; Wells Fargo Bank, N.A. v. Jordan, 8th Dist. Cuyahoga No. 91675, 2009-Ohio-1092, ¶ 23. The current holder of the note and mortgage is the real party in interest in a foreclosure action.
{24} In this case, the evidence established that Wilmington Trust was the holder of the note and the assignee of the mortgage when it filed the foreclosure action. The “holder” of a note is a “person entitled to enforce [it].”
{25} Wilmington Trust‘s possession of the note was demonstrated by the attachment of a copy of the note to the complaint and affidavit, coupled with Vieau‘s statements in her affidavit that Wilmington Trust had possession of the note when it filed the foreclosure complaint. As the holder of the note endorsed in blank, Wilmington Trust had the right to enforce the note. Despite Boydston‘s assertion otherwise, Vieau was not required to aver that the allonge was physically attached to the note in order to establish Wilmington Trust‘s holder status. Furthermore, Boydston offered no evidence to support his claims that the assignments on the note were “bogus” and that the blank endorsement was “unenforceable.”
{26} Wilmington Trust also established that it was the assignee of the mortgage at the time it filed the foreclosure complaint. The evidence demonstrated that on October
{27} Furthermore, Ohio law is well settled that the mortgage “follows the note” it secures. U.S. Bank N.A. v. Marcino, 181 Ohio App.3d 328, 2009-Ohio-1178, 908 N.E.2d 1032, ¶ 52 (7th Dist.). Thus, “[t]he physical transfer of the note endorsed in blank, which the mortgage secures, constitutes an equitable assignment of the mortgage, regardless of whether the mortgage is actually (or validly) assigned or delivered.” Najar, 8th Dist. Cuyahoga No. 98502, 2013-Ohio-1657 at ¶ 65. Accordingly, in this case, the transfer of the note to Wilmington Trust prior to its filing of the foreclosure complaint operated as an equitable assignment of the mortgage, which Wilmington Trust was entitled to enforce.
C. Evidence that Boydston‘s Account was in Default
{28} In his second assignment of error, Boydston contends that the trial court erred in adopting the magistrate‘s decision ordering foreclosure because Wilmington Trust failed to present a credible payment history to establish payments made and
{29} This court has made clear that there is no requirement that a plaintiff in a foreclosure action provide a complete payment history in order to establish its entitlement to summary judgment. Najar at ¶ 40. In fact, 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.
Natl. City Bank v. TAB Holdings, Ltd., 6th Dist. Erie No. E-10-060, 2011-Ohio-3715, ¶ 12. See also Cent. Mtge. Co. v. Elia, 9th Dist. Summit No. 25505, 2011-Ohio-3188, ¶ 7 (“An affidavit stating [a] loan is in default is sufficient for purposes of
{30} In her affidavit, Vieau testified to the amount due on the note, based on her review of the relevant business records relating to Boydston‘s loan. She attached to her affidavit a copy of Boydston‘s payment history, which showed the unpaid principal balance on the loan, fees, and escrow advances charged to the loan, and the loan due date. Vieau‘s affidavit and supporting documents were sufficient to meet Wilmington Trust‘s
D. Boydston‘s Reciprocal Burden
{31} As noted earlier, if the party moving for summary judgment satisfied its initial burden of setting forth evidence demonstrating its entitlement to summary judgment, the nonmoving party has the reciprocal burden outlined in
{32} Wilmington Trust met its initial burden under
{33} The first and second assignments of error are overruled.
{34} Judgment affirmed.
It is ordered that appellee recover from appellant costs herein taxed.
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 Rule 27 of the Rules of Appellate Procedure.
KATHLEEN ANN KEOUGH, ADMINISTRATIVE JUDGE
MELODY J. STEWART, J., and SEAN C. GALLAGHER, J., CONCUR