Court of Appeals of Ohio, Eighth District, Cuyahoga
U.S. BANK, N.A. PLAINTIFF-APPELLEE
BRUCE B. MATTHEWS, ET AL. DEFENDANTS-APPELLANTS
Appeal from the Cuyahoga County Court of Common Pleas Case
ATTORNEY FOR APPELLANTS A. Clifford Thornton, Jr.
ATTORNEYS FOR APPELLEE Richard A. Freshwater Thompson Hine
L.L.P. Scott A. King Jessica E. Salisbury-Copper Thompson
Hine L.L.P. Matthew I. McKelvey Carson A. Rothfuss Lerner,
Sampson & Rothfuss
LISTED James R. Bennett U.S. Attorney's Office
BEFORE: E.A. Gallagher, P.J., Stewart, J., and Jones, J.
JOURNAL ENTRY AND OPINION
A. GALLAGHER, PRESIDING JUDGE
In this foreclosure action, defendants-appellants Bruce and
Rhondalyn Matthews (collectively, "appellants")
appeal from the trial court's decision granting summary
judgment in favor of plaintiff-appellee U.S. Bank, N.A., as
trustee, successor in interest to Wachovia Bank, N.A., as
trustee for GSMPS Mortgage Loan Trust 2005-RP3 (the
"trust") ("U.S. Bank"). Appellants claim
that genuine issues of material fact exist as to U.S.
Bank's standing and entitlement to foreclose on the
mortgage at issue. Finding no merit to the appeal, we affirm
the trial court's judgment.
and Procedural Background
On August 29, 2002, appellants executed a note payable to
American Midwest Mortgage Corporation ("American Midwest
Mortgage") for the principal amount of $132, 900 plus
interest at the rate of 7.0% per year (the "note").
To secure payment of the note, appellants executed an
open-end mortgage on real property located at 3372 Silsby
Road, Cleveland Heights, Ohio (the "property") in
favor of American Midwest Mortgage (the
Through a series of transactions, the note and mortgage were
transferred and assigned to U.S. Bank. On August 29, 2002,
American Midwest Mortgage endorsed the note to Washington
Mutual Bank, F.A. ("Washington Mutual") in an
endorsement rubber-stamped at the bottom of the note (the
"rubber-stamped endorsement") and also assigned all
of its "rights, title and interest" in the mortgage
to Washington Mutual. Washington Mutual thereafter endorsed
the note in blank in an allonge attached to the note (the
"allonge"). The mortgage and assignment of mortgage
were recorded on September 4, 2002.
On April 5, 2005, appellants and Washington Mutual entered
into a loan modification agreement that increased the unpaid
principal amount due under the note to $140, 872.68 (the
"2005 loan modification agreement"). Two-and-a-half
years later, appellants and Wells Fargo Bank, N.A.
("Wells Fargo"), the servicing agent for the trust,
entered into a second loan modification agreement, increasing
the unpaid principal due under the note to $148, 255.68 and
extending its maturity date (the "2007 loan modification
agreement"). On August 3, 2009, appellants and Wells
Fargo entered into a third loan modification agreement,
increasing the unpaid principal amount due under the note to
$157, 148.91, reducing the interest rate to 5.625% per year
and again extending the maturity date (the "2009 loan
modification agreement"). (The 2005 loan modification
agreement, 2007 loan modification agreement and 2009 loan
modification agreement are collectively referred to herein as
the "loan modification agreements").
On March 13, 2015, Wells Fargo, as attorney-in-fact for the
Federal Deposit Insurance Corporation ("FDIC") as
receiver for Washington Mutual Bank, Henderson, NV, fk.a.
Washington Mutual, executed a "corrective assignment of
mortgage" assigning the mortgage to U.S. Bank (the
"corrective assignment of mortgage"). (The original
assignment of mortgage and the corrective assignment of
mortgage are collectively referred to herein as the
"assignments of mortgage.") The corrective
assignment of mortgage was recorded on March 25, 2015.
Appellants failed to make the payments due under the note as
modified by the loan modification agreements and, on April
10, 2015, U.S. Bank filed a complaint in
foreclosure. The complaint alleged that U.S. Bank was
the holder of the note and assignee of the mortgage, that
appellants had defaulted under the terms of the note and loan
modification agreements and that U.S. Bank had accelerated
the debt, had complied with all conditions precedent and was
entitled to enforce the note and foreclose on the mortgage.
U.S. Bank averred that plaintiffs had filed a Chapter 7
bankruptcy and that it sought "no personal judgment,
" only the foreclosure and sale of the property. U.S.
Bank alleged that it was due $151, 942.96 together with
interest at the rate of 5.625% from February 1, 2012, court
costs, advances "and other charges as allowed by
law." U.S. Bank requested a finding of default, that the
mortgage be declared a valid first lien on the property, that
the mortgage be foreclosed and the property sold and that it
be paid the amount due it out of the proceeds of sale. Copies
of the note (along with the rubber-stamped endorsement from
American Midwest Mortgage to Washington Mutual and the
allonge endorsing the note in blank), the mortgage, the loan
modification agreements and the assignments of the mortgage
were attached to the complaint.
On December 21, 2015, appellants filed an answer, pro se,
denying the allegations of the complaint and asserting a
laundry list of "affirmative defenses, " including
failure to state a claim for which relief can be granted,
lack of standing, waiver, release, estoppel, breach of
contract, failure to join necessary parties, failure to
mitigate damages, failure or want of consideration and
Bank's Motion for Summary Judgment
On February 12, 2012, U.S. Bank filed a motion for summary
judgment. U.S. Bank asserted that it was entitled to judgment
and a decree of foreclosure as a matter of law because there
was no genuine issue of material fact that (1) U.S. Bank was
the current holder of the note and assignee of the mortgage,
(2) appellants' loan was in default, (3) U.S. Bank had
provided appellants with notice of default and an opportunity
to cure but the default had not been cured, (4) U.S. Bank had
exercised its option to accelerate the balance due on the
note, (5) a principal balance of $151, 942.96 plus interest
at the rate of 5.625% per year from February 1, 2012 was due
on the note and (6) appellants could not establish any of
their claimed affirmative defenses.
U.S. Bank supported its motion with an affidavit from Cynthia
Thomas, vice president of loan documentation for Wells Fargo.
Attached to her affidavit were copies of the note (along with
the rubber-stamped endorsement and the allonge endorsing the
note in blank), the mortgage, the assignments of mortgage,
the loan modification agreements and a notice of default and
intent to accelerate (the "notice of default").
Thomas attested that the copies of the note, mortgage,
assignments of mortgage, loan modification agreements and
notice of default attached to her affidavit were copies of
the originals "redacted solely to protect any private,
personal, financial information" and that at the time of
the filing of the complaint (and through the date of her
affidavit), U.S. Bank had possession of the note (along with
the allonge endorsed in blank). She further attested that
payments had not been made as required under the terms of the
note and mortgage, that the last payment was made on February
26, 2012 and that prior to the filing of the complaint,
appellants had been sent a notice of default but the default
had not been cured. She indicated that as a result of the
default and acceleration, a principal balance of $151, 942.96
plus interest at the rate of 5.625% per year from February 1,
2012 was due on the note.
Appellants did not oppose U.S. Bank's summary judgment
motion. On March 18, 2016, the magistrate issued a decision
granting summary judgment and a decree of foreclosure in
favor of U.S. Bank. On April 7, 2016, appellants filed
objections to the magistrate's decision. U.S. Bank moved
to strike the objections on the grounds that (1) they were
untimely and (2) although they were purportedly filed by
appellants pro se (appellants signed the certificate of
service), the objections were signed, in the form of an
electronic signature, by counsel who had not filed a notice
of appearance in the case and failed to include his attorney
registration number and contact information as required under
Civ.R. 11. Appellants did not oppose the motion to strike.
The trial court granted the motion to strike and, on August
30, 2016, issued a judgment entry adopting the
magistrate's decision and entering summary judgment and a
decree of foreclosure in favor of U.S. Bank.
Appellants appealed the trial court's judgment, raising
the following ...