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Federal National Mortgage Association v. Herren

Court of Appeals of Ohio, Eighth District, Cuyahoga

November 2, 2017


         Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-14-829507

          ATTORNEYS FOR APPELLANTS Dan L. McGookey Kathryn M. Eyster McGookey Law Office, L.L.C.

          ATTORNEYS FOR APPELLEE Michael L. Wiery Jessica Wilson Reimer, Arnovitz, Chernek & Jeffrey Co., L.P.A.

          For JPMorgan Chase Bank, N.A., s.b.m. Bank One, N.A. Nelson M. Reid Bricker & Eckler, L.L.P. Keesha N. Warmsby Baker Hostetler

          For State of Ohio Department of Taxation Mike DeWine Ohio Attorney General

          For United States of America Marlon A. Primes Assistant United States Attorney.

          BEFORE: Celebrezze, J., E.T. Gallagher, P.J., and Blackmon, J.


          FRANK D. CELEBREZZE, JR., J.

         {¶1} Appellants, Sandra J. Herren and Thomas R. Herren, appeal the grant of summary judgment in favor of Federal National Mortgage Association ("Fannie Mae") in a foreclosure case. The Herrens argue that there are genuine issues of material fact that make summary judgment inappropriate. After a thorough review of the record and law, this court reverses and remands.

         I. Factual And Procedural History

         {¶2} Sandra and Thomas executed a note and mortgage on December 1, 2001.[1]The note involved appellants and Nexthome Mortgage Corporation ("Nexthome"). The note submitted in this case bears an endorsement from Nexthome to Metropolitan Bank ("Metropolitan") and a further endorsement from Ohio Savings Bank, N.A. ("Ohio Savings") in blank. Attached to the note is an allonge from Metropolitan to Ohio Savings. The assignments of mortgage submitted with the complaint include three assignments. The first is an assignment from Nexthome to Ohio Savings. The second is a corrective assignment from CitiMortgage, Inc. ("Citi"), as attorney-in-fact for Ohio Savings to Citi. This assignment includes language indicating that the Federal Deposit Insurance Corporation ("FDIC") took over the assets of Ohio Savings and that Citi was acting on behalf of the FDIC when making the assignment.[2] The third assignment is from Citi to Fannie Mae. In 2010, the Herrens were in default and Citi, the purported owner of the note, sent them a default letter setting forth their right to cure and accelerated the note. In 2011, a foreclosure complaint was filed by Citi. This complaint was eventually dismissed without prejudice. The note was then transferred to Fannie Mae, and it instituted a second foreclosure case on July 9, 2014.

         {¶3} The case proceeded through discovery and depositions, and Fannie Mae filed a motion for summary judgment. The Herrens opposed the motion by filing a brief in opposition supported by affidavits and deposition testimony and also filed a motion to strike an affidavit attached to Fannie Mae's motion based on an alleged lack of personal knowledge of the affiant. Fannie Mae then filed a reply brief in support of summary judgment and a brief in opposition to the motion to strike.

         {¶4} On August 22, 2016, the magistrate assigned to the case issued a decision finding that Fannie Mae was entitled to summary judgment and entitled to the relief sought in the complaint. The magistrate also denied the motion to strike. The Herrens filed objections to the magistrate's decision, and Fannie Mae filed a reply in support. On September 21, 2016, the trial court adopted the magistrate's decision in a separate opinion. The Herrens then filed the instant appeal, claiming that "[t]he trial court erred in granting Fannie Mae's motion for summary judgment."

         II. Law and Analysis

         A. Standard of Review

         {¶5} Summary judgment under Civ.R. 56 provides for the expedited adjudication of matters where there is no material fact in dispute to be determined at trial. To obtain summary judgment, the moving party must show that "(1) there is no genuine issue of material fact; (2) the moving party is entitled to judgment as a matter of law; and (3) it appears from the evidence that reasonable minds can come to but one conclusion when viewing evidence in favor of the nonmoving party, and that conclusion is adverse to the nonmoving party." Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996), citing State ex rel. Cassels v. Dayton City School Dist. Bd. of Edn., 69 Ohio St.3d 217, 219, 631 N.E.2d 150 (1994).

         {¶6} The moving party has the initial responsibility of establishing its entitlement to summary judgment. Dresher v. Burt, 75 Ohio St.3d 280, 292-293, 662 N.E.2d 264 (1996). "[I]f the moving party meets this burden, summary judgment is appropriate only if the nonmoving party fails to establish the existence of a genuine issue of material fact." Deutsche Bank Natl. Trust Co. v. Najar, 8th Dist. Cuyahoga No. 98502, 2013-Ohio-1657, ¶ 16, citing Dresher at 293.

         {¶7} Once a moving party demonstrates no material issue of fact exists for trial and the party is entitled to judgment, it is the nonmoving party's duty to come forth with argument and evidence that demonstrates a material issue of fact does exist that would preclude judgment as a matter of law. Id.

         B. Standing

         {¶8} The Herrens first assert that Fannie Mae lacks standing. Standing requires that, in order to invoke the jurisdiction of a court, a party must have a real interest in the litigation at the outset. Fed. Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017, 979 N.E.2d 1214. A plaintiff is required to show it "'suffered (1) an injury that is (2) fairly traceable to the defendant's allegedly unlawful conduct, and (3) likely to be redressed by the requested relief.'" Deutsche Bank Natl. Trust Co. v. Holden, 147 Ohio St.3d 85, 2016-Ohio-4603, 60 N.E.3d 1243, ¶ 20, quoting Moore v. Middletown, 133 Ohio St.3d 55, 2012-Ohio-3897, 975 N.E.2d 977, ¶ 22. In the foreclosure context, that requires a plaintiff to show that it is entitled to enforce the note and has an interest in the mortgage. Fannie Mae v. Hicks, 2016-Ohio-8484, 77 N.E.3d 380, ¶ 4 (8th Dist), fn. 2, citing Holden at ¶ 27.

         1. Entitled to Enforcement

         {¶9} Under Ohio's version of the Uniform Commercial Code ("UCC"), one entitled to enforce an instrument is any of the following:

(1) The holder of the instrument;
(2) A nonholder in possession of the instrument who has the ...

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