Court of Appeals of Ohio, Eighth District, Cuyahoga
Appeal from the Cuyahoga County Common Pleas Court Case No.
Hoose Co., L.P A., Laura C. Infante, and Ashley E. Mueller,
DannLaw L.L.P., Marc E. Dann, and William C. Behrens, for
JOURNAL ENTRY AND OPINION
C. GALLAGHER, PRESIDING JUDGE
1} Karlean Magby appeals the decree of foreclosure
entered upon summary judgment. For the following reasons, we
Magby purchased the property in November 2006 and made
payments on the note for the first six months. No payments
have been made since that time. After several fits and starts
to foreclosure proceedings on the note and
mortgage in general, the Bank of New York Mellon,
f.k.a. The Bank of New York, as Trustee for the
Certificateholders of the CWABS, Inc., Asset-Backed
Certificates, Series 2006-26 ("Mellon"), filed the
underlying foreclosure action in June 2017 seeking to
foreclose on the property. Mellon does not seek a monetary
judgment on the unsatisfied debt. The trial court granted
summary judgment in Mellon's favor concluding that
foreclosure was warranted based on the undisputed evidence.
Mellon was in possession of the note and mortgage, which had
been directly assigned to it by the original lender,
America's Wholesale Lender, which was a registered,
fictitious name under which Countrywide Homes, Inc., operated
Magby does not dispute her outstanding indebtedness. Instead,
Magby contends that the note and the mortgage are
unenforceable because she entered the agreement with
America's Wholesale Lender, a fictitious entity.
According to Magby, the note and mortgage are invalid because
America's Wholesale Lender did not have the capacity to
lend her the money used to finance the home she purchased. In
the alternative, Magby argues that the trial court erred in
granting the decree of foreclosure without affording her an
opportunity to file a cross-claim against the defaulting
defendants to either force those defendants to enter an
appearance in the action or to disclaim any interest in the
action. The proposed cross-claim attached to Magby's
motion reiterated her argument regarding the invalidity of
the note and mortgage, but it did not contain any claims
asserted against the nonanswering defendants. Instead, the
sole remedy was for a declaration that the nonanswering
defendants held no interest in the note or mortgage.
4} We need not extensively dwell on the decision
denying Magby leave to file the cross-claim against the
nonanswering defendants. Through the default mechanism, the
nonanswering defendants conceded the lack of interest in the
note and mortgage.
5} The granting of leave to amend a pleading is
within the sound discretion of the trial court. Lloyd v.
Cleveland Clinic Found., 8th Dist. Cuyahoga No. 107214,
2019-Ohio-1885, ¶ 31, citing Turner v. Cent. Local
School Dist, 85 Ohio St.3d 95, 99, 1999-Ohio-207, 706
N.E.2d 1261, and Wilmington Steel Prods., Inc. v.
Cleveland Elec. Illum. Co., 60 Ohio St.3d 120, 573
N.E.2d 622 (1991). Although leave to amend should be
liberally granted, the party seeking such must still provide
some good-faith basis for the amendment. Id. at
¶ 33, citing Peterson v. Teodosio, 34 Ohio
St.2d 161, 175, 297 N.E.2d 113 (1973). The relief sought in
the cross-claim was duplicative of the remedy offered through
the default judgment entered against the nonanswering
defendants. We can find no error in the trial court's
decision to deny Magby leave to amend her answer to include
the cross-claim under Civ.R. 15, much less could it be found
that the trial court abused its discretion in this regard.
Magby's argument is overruled.
6} In the remaining assignments of error,
Magby focuses on her general claim that America's
Wholesale Lending is a fictitious entity, and therefore, it
lacked capacity to enter into the note and mortgage
associated with Magby's purchase of residential property.
According to Magby, this invalidates the attempts to
foreclose on her property.
7} The court entered final judgment upon
Mellon's motion for summary judgment. Appellate review of
summary judgment is de novo, governed by the standard set
forth in Civ.R. 56. Comer v. Risko, 106 Ohio St.3d
185, 2005-Ohio-4559, 833 N.E.2d 712, ¶ 8. "Summary
judgment may be granted only when (1) there is no genuine
issue of material fact, (2) the moving party is entitled to
judgment as a matter of law, and (3) viewing the evidence
most strongly in favor of the nonmoving party, reasonable
minds can come to but one conclusion and that conclusion is
adverse to the nonmoving party." Marusa v. Erie Ins.
Co., 136 Ohio St.3d 118, 2013-Ohio-1957, 991 N.E.2d 232,
8} Magby executed the note and mortgage in favor of
America's Wholesale Lender. Shortly thereafter,
Countrywide Home Loans, d.b.a. America's Wholesale
Lender, assigned its interest in the note and mortgage to
Mellon. Magby stopped paying on the note within six months of
obtaining the loan. There is no dispute that she has
defaulted under the terms of the note, or that through the
assignment and being in possession of the note and the
mortgage at the time of filing the underlying action, Mellon
has standing to pursue the remedy of foreclosure.
9} Instead of addressing the merits of the
foreclosure action under the aforementioned standard, Magby
claims the assignment from Countrywide Home Loans to Mellon
was invalid because America's Wholesale Lender held
itself out as a corporation and the entity know as
Countrywide Home Loans could not assign its interest to
Mellon. The undisputed evidence, however, demonstrates that
Countrywide Home Loans registered to operate in Ohio under
the "d.b.a." designation America's Wholesale
Lender. Magby has not presented any authority to demonstrate
that such a practice was contrary to Ohio law. See, e.g.,
Green Tree Servicing L.L.C. v. Luce, 11th Dist.
Ashtabula No. 2015-A-0022, 2016-Ohio-1011, ¶ 21, quoting
McCaskey v. Sanford-Brown College, 8th Dist.
Cuyahoga No. 97261, 2012-Ohio-1543, ¶ 15 (corporations
have the right to adopt and operate under fictitious names in
Ohio "'so long as it is not done with fraudulent
purpose or against public policy.'"); Bank of
Am., NA. v. Lewis, 5th Dist. Ashland No. 12-COA-035,
2013-Ohio-2293, ¶ 37.
10} Magby's argument, in the attempt to
invalidate her agreement, is entirely predicated upon a
Florida state trial court decision in US. Bank, Natl.
Assn. v. Dimant, 2016 Fla. Cir. LEXIS 29485, *1 (19th
Cir. Ct, Feb. 12, 2016), which dismissed a foreclosure
complaint based on the conclusion that America's
Wholesale Lender, a fictitious entity, was not authorized to
conduct business under Florida law, and therefore, the
assignment of the note and mortgage to the plaintiff by
Countrywide Home Loans, doing business as America's
Wholesale Lender was in violation of Florida law. According
to that trial court, this deprived the assignee of the note
and mortgage of ...