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M&T Bank v. Bozickovich

Court of Appeals of Ohio, Eleventh District, Lake

December 18, 2017

M&T BANK, Plaintiff-Appellee,
NICHOLAS M. BOZICKOVICH, et al., Defendants-Appellants.

         Civil Appeal from the Lake County Court of Common Pleas, Case No. 14 CF 000212.

          Matthew J. Richardson, Manley Deas Kochalski, L.L.C., (For Plaintiff-Appellee).

          Glenn E. Forbes, Forbes Law LLC (For Louise Galati and Nicholas M. Bozickovich, Defendants-Appellants).


          THOMAS R. WRIGHT, J.

         {¶1} 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. We affirm.

         {¶2} 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.

         {¶3} Grange Bank transferred the promissory note by way of a special endorsement executed by a vice president to First Federal Savings Bank, without recourse.

         {¶4} 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 and mortgage.

         {¶5} 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.

         {¶6} 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.

         {¶7} 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 foreclosure claim.

         {¶8} 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

         {¶9} 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 action.

         {¶10} 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 ...

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