BANK OF AMERICA, N.A. Appellee/Cross-Appellant
JOHN D. EDWARDS, et al. Appellants/Cross-Appellees
FROM JUDGMENT ENTERED IN THE COURT OF COMMON PLEAS COUNTY OF
LORAIN, OHIO CASE No. 14CV183464
E. LAMB, Attorney at Law, for Appellants/Cross-Appellees.
STEFANIE L. DEKA and JASON A. WHITACRE, Attorneys at Law, for
DECISION AND JOURNAL ENTRY
TIMOTHY P. CANNON JUDGE.
Appellants/Cross-Appellees, John and Stacey Edwards
(collectively, "the Edwards"), appeal from the
judgment of the Lorain County Court of Common Pleas.
Additionally, Appellee/Cross-Appellant, Bank of America, N.A.
("Bank of America"), appeals from the court's
judgment. This Court affirms in part and reverses in part.
On November 29, 2007, John Edwards signed a $151, 800 note in
favor of Ross Mortgage Corporation ("Ross
Mortgage") for certain real property located on Cooper
Foster Road in Vermillion ("the Property"). The
FHA-insured loan was secured by a mortgage on the Property in
favor of Mortgage Electronic Registration Systems, Inc.
("MERS"), as nominee for Ross Mortgage. The
mortgage identified John Edwards as the mortgagor, but Stacey
Edwards also signed the mortgage for the purpose of releasing
her dower interest. Both the note and the mortgage for the
Property were later assigned to other banks.
On May 12, 2014, Bank of America filed a complaint in
foreclosure against the Edwards, alleging that it was the
current holder of the note and mortgage for the Property.
Bank of America alleged that the Edwards had defaulted on the
note on September 1, 2009, and that it was entitled to
accelerate the balance of the loan and seek a decree of
foreclosure. The Edwards filed an answer with leave of court
and raised numerous defenses. Relevant to this appeal, they
alleged that Bank of America lacked standing and had brought
suit without first satisfying certain conditions precedent to
Bank of America ultimately moved for summary judgment, and
the Edwards filed a brief in opposition. The court then
received a reply brief from Bank of America, a sur-reply from
the Edwards, and a response from Bank of America. Following
its review of the filings, the trial court issued its
judgment. The court found that Bank of America had standing
to bring suit, but was not entitled to summary judgment. The
court found that Bank of America had failed to prove that,
before filing suit, it had complied with certain HUD
regulations that were conditions precedent to foreclosure.
The court wrote: "[Bank of America's] Motion for
Summary Judgement is denied, [and its] complaint is hereby
dismissed without prejudice. This is a dismissal on the
merits. Case Closed."
After the court entered judgment, the Edwards filed a motion
to clarify, noting that the court simultaneously had
dismissed the matter without prejudice and had ordered a
dismissal on the merits. The Edwards asked the court to
specify that its dismissal was with prejudice rather than
without prejudice. Before the trial court addressed the
Edwards' motion, both the Edwards and Bank of America
appealed from the court's original judgment entry.
This Court consolidated the Edwards' and Bank of
America's appeals for purposes of briefing, argument, and
decision. Their appeals are now before us and, collectively,
raise four assignments of error for our review. For ease of
analysis, we rearrange several of the assignments of error.
Before turning to the merits of this appeal, this Court
pauses to address two points that concern the scope of our
review in this matter. First, a dismissal without prejudice
is ordinarily not a final, appealable order because it
"constitutes a dismissal other than on the merits * *
*." Smirz v. Smirz, 9th Dist. Lorain No.
13CA010408, 2014-Ohio-3869, ¶ 10. Here, however, the
trial court specifically disposed of this matter "on the
merits" with the intention of prohibiting Bank of
America from proceeding against the Edwards on the basis of
their current loan default. As further explained below, the
court mistakenly referred to the dismissal as one
"without prejudice" before later attempting to
amend its entry to reflect that the dismissal was "with
prejudice." Under these particular facts and
circumstances, the general bar against appeals from
dismissals without prejudice does not apply. See id.
The court's judgment entry constitutes a final,
appealable order from which the parties' may seek relief.
Second, this matter involves several procedural abnormalities
that we note, but reserve judgment upon due to the arguments
raised on appeal. We note that only Bank of America moved for
summary judgment, but rather than entering judgment in its
favor or finding genuine issues of material fact remained for
trial, the court entered a judgment of dismissal in favor of
a nonmoving party (i.e., the Edwards). We further note that
the basis for the trial court's dismissal on the merits
was that the bank had not satisfied a condition precedent to
foreclosure. But see Fifth Third Mtge. Co. v.
Berman, 10th Dist. Franklin No. 15AP-394,
2015-Ohio-4466. This Court will not address issues that
neither party has raised, so we caution that our decision, to
the extent it does not address certain issues, should not be
construed as a ratification of the lower court proceedings.
Consistent with this Court's general practice, the scope
of our review is limited to the issues the parties have
chosen to raise in their respective assignments of error.
See Citizens Bank Natl. Assn. v. Ranch Rd. Superior
Properties, L.L.C., 9th Dist. Summit No. 28023,
2016-Ohio-7590, ¶ 11, quoting State v. Thomas,
9th Dist. Summit No. 27266, 2015-Ohio-2935, ¶ 40
("'An appellant's assignment of error provides a
roadmap for our review and, as such, directs our analysis of
the trial court's judgment.'"). With the
foregoing in mind, we turn to the parties' arguments.
EDWARDS' ASSIGNMENT OF ERROR II
TRIAL COURT ERRED WHEN IT DETERMINED THAT BANK OF AMERICA HAD
STANDING TO ENFORCE THE NOTE AND MORTGAGE.
In their second assignment of error, the Edwards argue that
the trial court erred when it concluded that Bank of America
had standing to enforce the note and mortgage on the
Property. We do not agree.
"It is fundamental that a party commencing litigation
must have standing to sue in order to present a justiciable
controversy and invoke the jurisdiction of the common pleas
court." Fed. Home Loan Mtge. Corp. v.
Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017, ¶
41. "In general, '[t]o properly support a motion for
summary judgment in a foreclosure action, a plaintiff must
present evidentiary-quality materials showing: (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.'" (Alteration sic.)
Deutsche Bank Natl. Trust Co. v. James, 9th Dist.
Summit No. 28156, 2016-Ohio-7950, ¶ 8, quoting HSBC
Mtge. Servs., Inc. v. Watson, 3d Dist. Paulding No.
11-14-03, 2015-Ohio-221, ¶ 24. "'The lack of
standing at the commencement of a foreclosure action requires
dismissal of the complaint * * *.'" Deutsche
Bank Natl. Trust Co. v. Dvorak, 9th Dist. Summit No.
27120, 2014-Ohio-4652, ¶ 7, quoting
Schwartzwald at ¶ 40.
In support of its motion for summary judgment, Bank of
America produced the affidavit of Carol Ann Yagusic, one of
its assistant vice presidents. Yagusic averred that she had
personal knowledge of Bank of America's business records,
including those records associated with the loan on the
Property. She averred that Bank of America, directly or
through an agent, held the note for the loan at the time of
filing its foreclosure complaint and that "the original
note was sent to counsel for [Bank of America's] office
prior to the filing of the Complaint at counsel's
request." Yagusic attached a copy of the note to her
affidavit and incorporated it by reference as a true and
Yagusic also attached to her affidavit a copy of the mortgage
that the Edwards signed and an assignment of that mortgage
from MERS, as nominee for Ross Mortgage, to BAC Home Loans
Servicing, LP, FKA Countrywide Home Loans Servicing, LP.
Yagusic attested to the fact that, on July 1, 2011, BAC Home
Loans Servicing, LP merged with Bank of America. To evidence
her attestation of the merger, she incorporated by reference
(1) a copy of the Institutional History for BAC Home Loans
Servicing, LP from the National Information Center; and (2) a
copy of a Certificate of Merger from the Office of the
Secretary of State in Texas. Both documents indicate that,
effective July 1, 2011, BAC Home Loans Servicing, LP merged
with Bank of America.
The copy of the note for the Property that Yagusic attached
to her complaint contains four endorsements. Specifically, it
contains: (1) a special endorsement from Ross Mortgage to
Countrywide Bank, FSB; (2) a special endorsement from
Countrywide Bank, FSB to Countrywide Home Loans Servicing LP;
(3) a special endorsement from Countrywide Home Loans
Servicing, LP to Countrywide Bank, FSB; and (4) a blank
endorsement by "Bank of America, N.A. successor by
merger to Countrywide Bank, FSB." Although all four
endorsements are undated, the blank endorsement by Bank of
America is stamped below the other three endorsements that
appear on the note. In her affidavit, Yagusic attested to the
fact that, on April 27, 2009, Countrywide Bank, FSB was
acquired by Bank of America. To evidence her attestation of
the merger, she incorporated by reference a copy of the
Institutional History of "Centennial Branch" from
the National Information Center. The Institutional History
indicates that, on April 27, 2009, Countrywide Bank, FSB was
acquired by Bank of America. Moreover, the endorsements on
the note (1) from Countrywide Home Loans Servicing, LP to
Countrywide Bank FSB, and (2) from Bank of America in blank
are both signed by the same individual: "Michele
The Edwards opposed Bank of America's motion for summary
judgment on the basis that the bank had not shown that it was
the current holder of either the note on the Property or
their mortgage. The Edwards argued that Bank of America had
failed to set forth "legitimate summary judgment
evidence" that it had acquired Countrywide Bank FSB,
such that it had the authority to endorse the note in blank
following the last special endorsement to Countrywide Bank
FSB. They asserted that none of the documents attached to
Yagusic's affidavit were business records of Bank of
America, such that she could attest to their veracity on the
basis of personal knowledge. Likewise, they challenged Bank
of America's evidence with respect to the chain of
assignment on their mortgage. They argued that Bank of