Bank of N.Y. Mellon v. Fisher

2020 Ohio 4742

BANK OF NEW YORK MELLON, Plaintiff-Appellee, v. JOHNSON L. FISHER, ET AL., Defendants-Appellants.

No. 108855

COURT OF APPEALS OF OHIO EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA

October 1, 2020

JOURNAL ENTRY AND OPINION

JUDGMENT: AFFIRMED

Civil Appeal from the Cuyahoga County Court of Common Pleas

Case No. CV-18-891635

Appearances:

Carpenter Lipps & Leland, L.L.P., David A. Wallace, and Tyler K. Ibom, for appellee.

Law Office of Grace M. Doberdruk and Grace M. Doberdruk, for appellants.

RAYMOND C. HEADEN, J.:

{¶ 1} Defendants-appellants Johnson L. and Maviese Fisher ("the Fishers") appeal the trial court's ruling that granted plaintiff-appellee The Bank of New York Mellon as Trustee for CWABS, Inc. Asset-Backed Certificates, Series 2005-4's ("BONYM") motion for summary judgment, and entered a decree of foreclosure. For the reasons that follow, we affirm.

I. Factual and Procedural History

{¶ 2} On May 25, 2005, the Fishers borrowed $842,316 from Countrywide Home Loans, Inc. ("Countrywide") and executed an adjustable rate note ("note") in which the Fishers agreed to repay the loan. To secure payment of the note, the Fishers executed a mortgage on real property located in Solon, Ohio ("the property") in favor of Mortgage Electronic Registration Systems, Inc. ("MERS"), acting as a nominee for the lender, Countrywide. The mortgage was recorded in the Cuyahoga County Recorder's Office on June 9, 2005.

{¶ 3} On April 30, 2010, Countrywide executed an assignment of the Fishers' note and mortgage to sell, assign, and transfer the loan documents to BONYM. The assignment was recorded with the Cuyahoga County Recorder's Office on May 6, 2010.

{¶ 4} On May 19, 2010, BONYM filed a motion for relief from a stay in the Fishers' bankruptcy case. Attached to the motion was a copy of the note with an undated allonge that transferred the note from Countrywide to BONYM. No blank indorsement was stamped on the note.

{¶ 5} The Fishers executed a loan modification agreement on April 18, 2015, whereby they agreed to new payment terms effective May 1, 2015. The loan modification agreement — that identified Green Tree Servicing L.L.C. ("GreenTree") as the lender and the Fishers as the borrowers — amended and supplemented the mortgage and note ("the loan documents") previously executed in 2005. The terms of the loan modification agreement stated it was signed by the same parties who executed the loan documents or their authorized representatives. The loan modification agreement did not replace or supersede the loan documents except for the new payment terms; the terms of the loan documents were reaffirmed by the loan modification agreement and remained in full force and effect.

{¶ 6} Due to the Fishers' failure to submit timely payments per their note, BONYM's loan servicer, Select Portfolio Servicing, Inc. ("SPS"), forwarded the Fishers a notice of default — right to cure letter ("notice of default") on September 18, 2017. The letter identified the amounts due from the Fishers and stated the balance due could be accelerated and foreclosure proceedings initiated absent payment to cure the debt. Following receipt of the notice of default, the Fishers did not remit payment.

{¶ 7} At an unknown date, BONYM requested a supplementary preliminary judicial report from Chicago Title Insurance Company ("Chicago Title") to be used in judicial proceedings. Chicago Title's report labeled Countrywide's April 30, 2010 assignment of the Fishers' note and mortgage to BONYM — which was recorded with the Cuyahoga County Recorder's Office on May 6, 2010 — as invalid.

{¶ 8} On December 19, 2017, MERS, as nominee for Countrywide, completed a second corporate assignment of mortgage to BONYM. SPS requested a recording of the assignment, and the assignment was recorded with the CuyahogaCounty Fiscal Office on January 3, 2018. BONYM contends the second assignment was necessitated following the preliminary judicial report that described the May 6, 2010 assignment as invalid.

{¶ 9} The Fishers failed to make payments due under the note and BONYM filed a complaint in foreclosure on January 16, 2018.¹ The foreclosure complaint alleged as follows: the note and mortgage were in default; BONYM satisfied the conditions precedent; the entire balance was due and payable; and BONYM was entitled to enforce the note and mortgage. Attached to the foreclosure complaint were copies of the note indorsed in blank by Countrywide, the mortgage, the December 19, 2017 assignment of the mortgage, the loan modification agreement, and the supplementary preliminary judicial report issued by Chicago Title. The Fishers filed an answer and counterclaims on February 21, 2018. BONYM filed a motion to dismiss the Fishers' counterclaim on March 21, 2018, and the trial court denied that motion. On September 14, 2018, BONYM filed a motion for summary judgment that the Fishers opposed on October 15, 2018. BONYM filed a reply brief on October 25, 2018.

{¶ 10} A magistrate's decision rendered on March 21, 2019, found BONYM had standing to bring the foreclosure action and that BONYM was entitled to summary judgment. Both parties filed objections to the magistrate's decision. OnJuly 16, 2019, the trial court entered an order that overruled the parties' objections and adopted the magistrate's decision in full.

{¶ 11} The Fishers filed a timely notice of appeal on July 29, 2019, and present the following assignments of error, verbatim, for our review:

First Assignment of Error: The trial court erred by not finding that appellee Bank of New York Mellon lacked standing when the modification had the lender Green Tree Servicing L.L.C.

Second Assignment of Error: Appellee was not entitled to judgment as a matter of law because a material issue of fact remained for trial regarding whether appellee had possession of appellants' original note when the complaint was filed and whether the note was altered since there were multiple versions of appellants' original note.

Third Assignment of Error: The trial court erred by granting appellee's motion for summary judgment when affiant Maria Soberon lacked personal knowledge and material issues of fact existed for trial.

Fourth Assignment of Error: The trial court erred finding that all conditions precedent to foreclosure were complied with.

Fifth Assignment of Error: The trial court erred by granting judgment to appellee on the counterclaims.

II. Law and Analysis

A. Standard of Review

{¶ 12} Before a trial court grants a motion for summary judgment, pursuant to Civ.R. 56(C), the court must determine that:

(1) No genuine issue as to any material fact remains to be litigated; (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, and viewing such evidence most strongly in favor of the party against whom the motion for summary judgment is made, that conclusion is adverse to that party.

Temple v. Wean United, Inc., 50 Ohio St.2d 317, 327, 364 N.E.2d 267 (1977).

{¶ 13} On a motion for summary judgment, the moving party's initial burden is to identify specific facts in the record that demonstrate its entitlement to summary judgment. Dresher v. Burt, 75 Ohio St.3d 280, 292-293, 662 N.E.2d 264 (1996). If the moving party does not satisfy this burden, summary judgment is not appropriate. If the moving party meets the burden, the nonmoving party has a reciprocal burden to point to evidence of specific facts in the record that demonstrate the existence of a genuine issue of material fact for trial. Id. at 293. Where the nonmoving party fails to meet this burden, summary judgment is appropriate. Id.

{¶ 14} In a foreclosure action, a plaintiff must prove the following to prevail on a motion for summary judgment:

(1) that the plaintiff is the holder of the note and mortgage, or is a party entitled to enforce the instrument; (2) if the plaintiff is not the original mortgagee, the chain of assignments and transfers; (3) that the mortgagor is in default; (4) that all conditions precedent have been met; and (5) the amount of principal and interest due.

Deutsche Bank Natl. Trust Co. v. Najar, 8th Dist. Cuyahoga No. 98502, 2013-Ohio-1657, ¶ 17.

{¶ 15} An appellate court applies a de novo standard when reviewing a trial court's decision that granted summary judgment. Bayview Loan Servicing, L.L.C. v. St. Cyr, 2017-Ohio-2758, 90 N.E.3d 321, ¶ 11 (8th Dist.).

B. Soberon's Supplemental Affidavit

{¶ 16} Initially, we will address the trial court's consideration of Maria Soberon's ("Soberon") supplemental affidavit that BONYM attached to its reply brief in response to the Fishers' brief in opposition.

{¶ 17} Parties are not permitted to raise new arguments or evidence in a reply brief because the nonmoving party does not have an adequate opportunity to respond under the Civil Rules of Ohio. Foradis v. Marc Glassman, Inc., 8th Dist. Cuyahoga No. 103454, 2016-Ohio-5235, ¶ 8. Specifically, "Civ.R. 56(C) does not provide for the right to a surreply, leaving a party ambushed by new arguments in a reply brief with no opportunity to respond." Id. at ¶ 8. However, courts permit the filing of a reply brief containing a supplemental affidavit where the reply rebuts arguments set forth in the brief opposing the motion for summary judgment and the supplemental affidavit clarifies previously raised issues. Deutsche Bank Natl. Trust Co. v. Ayers, 11th Dist. Portage No. 2019-P-0094, 2020-Ohio-1332, ¶ 47-48.

{¶ 18} Here, BONYM filed a motion for summary judgment and attached the original affidavit of Soberon, an employee of BONYM's loan servicer, SPS. SPS had serviced BONYM's loans since July 16, 2017. Following the Fishers' filing of a brief in opposition, BONYM filed a reply brief and attached Soberon's supplemental affidavit. The reply brief addressed arguments discussed in the Fishers' opposition brief and the supplemental affidavit sought to clarify issues previously raised, including whether the note...