Court of Appeals of Ohio, Eighth District, Cuyahoga
U.S. BANK NATIONAL ASSOCIATION AS TRUSTEE PLAINTIFF-APPELLEE
MARY CLAIRE FRANKO, ET AL. DEFENDANTS-APPELLANTS
Appeal from the Cuyahoga County Court of Common Pleas Case
ATTORNEYS FOR APPELLANTS William C. Behrens Marc E. Dann The
Dann Law Firm Co., L.P.A. Thomas J. Kraus
ATTORNEYS FOR APPELLEE Justin M. Ritch Matthew J. Richardson
Manley, Deas & Kochalski, L.L.C. Tyler K. Ibom David A.
Wallace Carpenter, Lipps & Leland, L.L.P.
BEFORE: S. Gallagher, J., McCormack, P.J., and Boyle, J.
JOURNAL ENTRY AND OPINION
C. GALLAGHER, J.
Mary Claire Franko and Charles Stimac, Jr.
("mortgagors") appeal the decree of foreclosure on
the property at 33400 Pinetree Road, Pepper Pike, Ohio. We
Franko executed a promissory note for $300, 000, secured by a
mortgage signed by both Franko and Stimac in 2005. The
complete mortgage instrument named RBC Mortgage Company as
the lender and Mortgage Electronic Registration Systems, Inc.
("MERS") as the mortgagee and as nominee for RBC
Mortgage Company and its successor and assigns. The loan was
immediately securitized  and placed into trust, the Washington
Mutual Mortgage Pass-Through Certificates WMALT Series 2005-4
Trust ("trust"). LaSalle Bank National Association
was the initial trustee, and Washington Mutual Bank was the
servicer on the loan. Washington Mutual Bank began collecting
the monthly payments.
Washington Mutual Bank went into federal receivership during
the financial crisis of the early 2000s. JPMorgan Chase
purchased and otherwise assumed some assets of Washington
Mutual Bank through the receivership, which at the time made
JPMorgan Chase the new servicer of the mortgage. MERS
assigned the mortgage to Washington Mutual Bank in 2007. That
assignment was duly recorded.
Washington Mutual Bank, through the receiver, then assigned
the mortgage to Bank of America, National Association in
2009, which was the successor trustee to LaSalle Bank through
merger. Approximately three years later, the receiver of
Washington Mutual Bank issued a corrective assignment,
assigning the mortgage to U.S. Bank. The corrective assignment
was recorded and replaced the 2009 assignment. U.S. Bank was
the successor trustee to Bank of America by sale. Although
the mortgage was assigned several times and there were
multiple servicers of the debt, the trust remained as the
holder of the note.
The mortgagors originally defaulted sometime in 2007. By the
time U.S. Bank filed the foreclosure action in 2012, there
had been three earlier actions on behalf of the trust seeking
foreclosure - Washington Mutual Bank in 2007 and Bank of
America in 2009 and 2010.
In the latest action, U.S. Bank indicated that the trust was
in possession of the promissory note, but the note could not
be located. U.S. Bank proceeded to enforce the note under
R.C. 1303.38, which provides that a person not in possession
of an instrument is entitled to enforce the instrument if (1)
that person possessed the instrument at the time the loss of
possession occurred, or if ownership of the instrument was
acquired from the person who was entitled to enforce the
instrument when the loss of possession occurred; (2) the loss
of possession was not the result of a transfer or lawful
seizure; and (3) the person seeking enforcement cannot
reasonably obtain possession of the instrument.
The trial court granted summary judgment in May 2016 and
indicated the court's magistrate would issue a decision
"making specific findings as to the rights and
liabilities of the parties." Thus, the only issue before
the magistrate was limited: the magistrate was not resolving
the motion for summary judgment in its entirety. The
magistrate concluded, in pertinent part, (1) that U.S. Bank
was the real party in interest when the complaint was filed
and maintained standing throughout the proceedings; (2) that
$292, 312.31 plus interest at 6 percent from April 1, 2007,
was due as a secured sum and owed by Franko; and (3) that the
mortgagors jointly guaranteed the outstanding debt with the
property located at 33400 Pinetree Road, Pepper Pike, Ohio.
The mortgagors objected to the magistrate's decision,
asserting the following errors: (1) the magistrate failed to
consider the defendants' submissions or pending defenses;
(2) the magistrate erred in finding that U.S. Bank had
standing to seek foreclosure based on the note and mortgage;
(3) the magistrate erroneously applied R.C. 1303.38, dealing
with actions upon lost notes; (4) that U.S. Bank failed to
prove a defect-free chain of title on the note and mortgage;
and (5) the magistrate's decision relied on inadmissible
evidence. The trial court overruled the objections, and upon
the decision of the magistrate, the evidence admitted at the
hearing, and the motions and pleadings, summary judgment was
granted in favor of U.S. Bank upon the trial court's
conclusion that reasonable minds could come to one conclusion
based on the undisputed evidence.
In the first assignment of error, the mortgagors claim that
the trial court's decision was devoid of
"sufficiently detailed reasoning to ...