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HSBC Bank USA v. Sherman

Court of Appeals of Ohio, First District

September 27, 2013


Hamilton County Court of Common Pleas TRIAL NO. A-1101137

Thompson Hine LLP, Scott A. King and Terry W. Posey, for Plaintiff-Appellee

Dever Legal Services, Scott A. Hoberg and Jonathan Dever, for Defendant-Appellant.


Cunningham, Judge.

(¶ 1} Defendant-appellant Matthew Sherman, a.k.a. Matt Sherman, appeals the entry of summary judgment for plaintiff-appellee HSBC Bank USA, National Associates as Trustee for Wells Fargo Asset Securities Corporation, Mortgage Pass-Through Certificates Series 2006-15 ("HSBC"), in its foreclosure action.

(¶2} In 2006, Sherman purchased a home on Heekin Avenue in Cincinnati. To finance the purchase, Sherman executed a note in the amount of $405, 000 in favor of American Broker's Conduit ("ABC"). The note was secured by a mortgage in favor of Mortgage Electronic Registration Systems, Inc. ("MERS"), as nominee for ABC and its successors, executed on the same day. On January 26, 2011, MERS assigned the mortgage to HSBC.

(¶3} In 2010, Sherman defaulted on his repayment obligations as the borrower under the note and mortgage. As provided in the note and mortgage, HSBC accelerated repayment of the note. The principal due was $401, 433 plus interest from April 1, 2010.

(¶ 4} On February 7, 2011, HSBC filed this action against Sherman seeking judgment on the note and foreclosure on the mortgage. HSBC attached the original mortgage and note to its complaint. The documents reflect that on January 26, 2011, the mortgage had been properly assigned to HSBC. The note, however, contained an endorsement only to Wells Fargo Bank, N.A., and not to HSBC.

(¶ 5} In January 2012, HSBC moved for summary judgment supported by the affidavit of its vice president of loan documentation. She stated that HSBC was the holder of the note as well as the assignee of the mortgage. HSBC also filed a copy of the note, now including an endorsement from Wells Fargo in blank, making the note payable to the bearer, HSBC. In response, Sherman did not dispute the amount due. He asserted that HSBC was not entitled to summary judgment because it lacked standing to prosecute the action.

(¶ 6} On February 24, 2012, the trial court overruled Sherman's objections to a magistrate's decision in favor of HSBC, and entered an order adopting the decision and issuing a final decree in foreclosure.

(¶ 7} Sherman timely filed an appeal from that entry with the clerk of the Hamilton County Common Pleas Court. We note that the text of the notice of appeal erroneously indicates that the appeal was being taken to the Twelfth District Court of Appeals. See App.R. 3(D) ("The notice of appeal * * * shall name the court to which the appeal is taken."). Because HSBC was apprised of the taking of an appeal and was not prejudiced by this defect in the notice, we exercise our discretion and overlook this non-jurisdictional defect in Sherman's notice of appeal. See Roberts v. Skaggs, 176 Ohio App.3d 251, 2008-Ohio-1954, 891 N.E.2d 827, ¶ 8 (1st Dist).

(¶ 8} Raising a single assignment of error, Sherman asserts that the trial court erred in entering summary judgment "when [HSBC] did not have standing to bring the cause of action as it was not the real party in interest." He asserts that the facts established by HSBC for purposes of summary judgment do not entitle it to judgment as a matter of law. See Civ.R. 56(A); see also Capital Fin. Credit, LLC v. Mays, 191 Ohio App.3d 56, 2010-Ohio-4423, 944 N.E.2d 1184 (1st Dist.). We review cases decided on summary judgment de novo. See Comer v. Risko, 106 Ohio St.3d 185, 2005-Ohio-4559, 833 N.E.2d 712, ¶ 8.

(¶ 9} Sherman argues that HSBC was not the real party in interest because it lacked the ability to enforce the note and mortgage when it filed the complaint, because it had failed to comply with LocR. 45 of the Hamilton County Court of Common Pleas, and because it had failed to follow the terms of a separate Pooling and Servicing Agreement ("PSA").

(¶ 10} In a 2012 decision, the Ohio Supreme Court clarified the rules to establish standing in a foreclosure action. See Fed. Home Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017, 979 N.E.2d 1214, ¶ 21. " 'Standing to sue is part of the common understanding of what it takes to make a justiciable case.' " Id. at ¶ 21, quoting Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 102, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998). Because standing is required to invoke the jurisdiction of the common pleas court, standing is determined as of the commencement of suit by the filing of a complaint. See ...

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