Court of Appeals of Ohio, Eleventh District, Lake
Appeal from the Lake County Court of Common Pleas, Case No.
14 CF 000212.
Matthew J. Richardson, Manley Deas Kochalski, L.L.C., (For
E. Forbes, Forbes Law LLC (For Louise Galati and Nicholas M.
R. WRIGHT, J.
Appellants, Nicholas M. Bozickovich and Louise Galati, appeal
the trial court's order granting summary judgment in
favor of appellee, M&T Bank, on its foreclosure claim
against appellants and ordering the sale of appellants'
residential property. They argue that appellee, M&T Bank,
failed to establish standing to enforce the promissory note.
In January 2005, appellants purchased a home at 3020
Rockefeller Road, Willoughby Hills, Ohio, borrowing money
from Grange Bank. Bozickovich executed an adjustable-rate
promissory note in the sum of $162, 400. Both Bozickovich and
Galati executed a mortgage on the property in favor of Grange
Bank for the total amount owed.
Grange Bank transferred the promissory note by way of a
special endorsement executed by a vice president to First
Federal Savings Bank, without recourse.
In January 2010, First Federal entered into an agreement with
appellee, under which appellee would "service"
residential mortgage loans including this one. In addition to
the general authority to administer and collect payments, the
agreement also granted appellee authority to sue on the note
Grange Bank assigned the associated mortgage to Franklin Bank
S.S.B. in June 2007. Five years later, Franklin Bank assigned
the mortgage to appellee, some two years after it began
servicing the loan. The typed portion of the mortgage
assignment to appellee references only Bozickovich as the
mortgagor, but a handwritten amendment states that Galati is
likewise a mortgagor, and that she and Bozickovich are
husband and wife.
During the first five years of the loan, appellants made all
necessary payments. At some point after January 2010, though,
they stopped paying their county property taxes. When
appellee became aware of the delinquency, pursuant to the
promissory note, it paid the outstanding property taxes and
then charged appellants. When appellants made their mortgage
payment for January 2012, appellee used the funds to offset
part of the tax payment. Ultimately, appellants failed to pay
both their monthly mortgage payment and reimburse appellee
for the tax payment.
Appellee notified Bozickovich in a letter of the default and,
thereafter, filed suit. The case was referred to mediation,
without success. Thereafter, the trial court gave the parties
four months to conduct discovery and set the matter for trial
in November 2015. Immediately before that date, appellee
submitted its motion for summary judgment on its entire
Appellee asserted it had standing to sue, because First
Federal transferred possession of the note, and the servicing
agreement grants it authority to enforce the note. Appellee
attached to its motion the affidavits of Lisa A. Wilson, a
banking officer with appellee, and Patrick G. O'Brien, a
senior executive vice president with Community Bank. In her
affidavit, Wilson averred that appellee obtained possession
of appellants' promissory note from First Federal in
January 2010 when the servicing agreement took effect. Copies
of the servicing agreement, the note, and the mortgage are
attached to Wilson's affidavit. In his affidavit,
O'Brien averred that Community Bank became the note's
holder when it merged with First Federal in April 2014
In responding to appellee's motion for summary judgment,
appellants focused primarily upon the two affidavits and
whether they are legally sufficient to demonstrate
appellee's standing. First, they argued that neither
affidavit could be considered because the respective
averments are insufficient to show that the affiants have
personal knowledge of the averments. Second, appellants
asserted that Wilson's averments do not establish that
appellee took possession of the promissory note from First
Federal or Community Bank prior to filing the foreclosure
The trial court concluded that appellee has standing as a
nonholder with possession. The court also concluded that
there was no dispute as to appellants' default.
Accordingly, the court entered judgment in appellee's