Deutsche Bank Nat'l Tr. Co. v. Boreman

2020 Ohio 3545

Deutsche Bank National Trust Company, as Certificate Trustee on Behalf ofBosco Credit II Trust Series 2010-1 Appellee v. Wade Boreman, et al. Appellant

Court of Appeals No. OT-18-031

COURT OF APPEALS OF OHIO SIXTH APPELLATE DISTRICT OTTAWA COUNTY

June 30, 2020

Trial Court No. 2017-CV-E-429

DECISION AND JUDGMENT

James W. Sandy, for appellee.

Marc E. Dann, Brian D. Flick and William C. Behrens, for appellant.

MAYLE, J.

{¶ 1} Appellant, Wade Boreman, appeals the July 26, 2018 judgment of the Ottawa County Court of Common Pleas that granted summary judgment to appellee, U.S. Bank National Association, not in its individual capacity but solely as trustee NRZ-pass through trust X ("U.S. Bank"), and the August 9, 2019 judgment that granted U.S. Bank's Civ.R. 60(A) motion to correct a clerical error in the July 26 entry. For the following reasons, we affirm.

I. Background and Facts

{¶ 2} On July 14, 2005, Boreman signed two notes in favor of MILA, Inc. The first note ("note 1") was for $112,560 and was secured by a mortgage ("mortgage 1") on Boreman's property at 315 West Ottawa Street in Oak Harbor. The second note ("note 2") was for $28,140 and was also secured by a mortgage ("mortgage 2") on the Ottawa Street property. Note 2 was subordinate to note 1, and mortgage 2 was subordinate to mortgage 1.

{¶ 3} On October 19, 2017, appellee, Deutsche Bank National Trust Co., as certificate trustee on behalf of BOSCO Credit II Trust Series 2010-1 ("Deutsche"), filed a complaint in foreclosure alleging that it owned note 2 and mortgage 2 and that Boreman was in default of the terms of the note and mortgage. Among others, Deutsche named Nationstar Mortgage LLC as a defendant, alleging that Nationstar might claim an interest in the Ottawa Street property.

{¶ 4} On December 20, 2017, Nationstar filed a motion seeking to substitute "Citibank, N.A., not in its Individual Capacity but Solely as Trustee of NRZ Pass-Through Trust VI" ("Citibank") as a defendant in the case because the mortgage had been assigned to Citibank and Citibank was the proper party to the action. The trial court granted the motion and substituted Citibank as a defendant on December 28, 2017.

{¶ 5} On April 10, 2018, Citibank filed an amended answer, crossclaim, and counterclaim. In its crossclaim, Citibank alleged that it owned note 1 and mortgage 1, and that Boreman was in default of the terms of the note and mortgage.

{¶ 6} To show that it had the right to enforce note 1 and mortgage 1, Citibank included numerous documents with its amended answer, crossclaim, and counterclaim. First was note 1, i.e., a note in favor of MILA for $112,560 signed by Boreman on July 14, 2005. The note included an undated, blank indorsement from MILA.

{¶ 7} The second document was a loan modification agreement, dated January 17, 2008, between Boreman and Wilshire Credit Corp. ("Wilshire"), as "owner or servicer" of the loan.

{¶ 8} Third was a loan modification agreement between Boreman and BAC Home Loans Servicing, LP ("BAC"), dated September 17, 2010. In addition to Boreman's signature page, the agreement includes two signature pages, each dated December 6, 2012. The first is a signature from "Bank of America, N.A., for itself or as successor by merger to BAC Home Loans Servicing, LP / By: Stewart Lender Services, Inc., its attorney in fact." The second is a signature from "Mortgage Electronic Registration Systems, Inc. (MERS), / as Nominee for Bank of America, N.A., for itself or as successor by merger to BAC Home Loans Servicing, LP."

{¶ 9} The fourth document included with the amended answer, crossclaim, and counterclaim was a loan modification agreement, dated June 11, 2013, between Boreman and Select Portfolio Servicing, Inc. ("SPS"), as "Lender or Servicer" of the loan.

{¶ 10} Next, Citibank attached mortgage 1, i.e., a mortgage on the Ottawa Street property, signed by Boreman on July 14, 2005, as security for note 1.

{¶ 11} Finally, Citibank attached the following series of assignments of mortgage 1:

Date

Assignor

Assignee

August 10, 2009

"Mortgage Electronic

Registration Systems, Inc. as

Nominee for MILA INC. * * *"

"The Bank of New York

Mellon Trust Company,

National Association f/k/a

The Bank of New York Trust

Company, N.A., as successor

to JPMorgan Chase Bank,

National Association, as

Trustee for the MLMI SURF

Trust Series 2005-BC4."

("BONY")

June 5, 2012

"MORTGAGE ELECTRONIC

REGISTRATION SYSTEMS,

INC. AS NOMINEE FOR

MILA, INC."

"THE BANK OF NEW

YORK MELLON FKA THE

BANK OF NEW YORK, AS

SUCCESSOR TRUSTEE TO

JPMORGAN CHASE BANK,

N.A., AS TRUSTEE FOR

THE HOLDERS OF THE

MLMI SURF TRUST,

MORTGAGE LOAN

ASSET-BACKED

CERTIFICATES, SERIES

2005-BC4."

July 30, 2013

"Bank of America, N.A."

"NATIONSTAR

MORTGAGE, LLC."

November 17, 2017

"THE BANK OF NEW YORK

MELLON TRUST

COMPANY, NA FKA THE

BANK OF NEW YORK

TRUST COMPANY NA AS

SUCCESSOR TO JPMORGAN

CHASE BANK, NA, AS

TRUSTEE FOR THE MLMI

SURF TRUST SERIES 2005-

BC4, BY NATIONSTAR

MORTGAGE LLC AS IT'S

[sic] ATTORNEY-IN-FACT"

"CITIBANK, N.A., NOT IN

ITS INDIVIDUAL

CAPACITY BUT SOLELY

AS TRUSTEE OF NRZ

PASS-THROUGH TRUST

VI"

Included with the November 2017 assignment was a limited power of attorney from "The Bank of New York Mellon Trust Company, N.A. as successor-in-interest to all permitted successors and assigns of JPMorgan Chase Bank, National Association" giving Nationstar power of attorney to, among other things, assign mortgages and notes in certain "Pooling and Servicing Agreements" (including those in SURF Trust Series 2005-BC4) in connection with the sale of those mortgages and notes.

{¶ 12} On May 14, 2018, Citibank moved for summary judgment. Citibank argued that it was entitled to enforce note 1 and mortgage 1, and that Boreman breached the terms of the note and mortgage by failing to make payments on the debt after September 1, 2015.

{¶ 13} Attached to Citibank's motion was the affidavit of Hugh Zhao, a "Document Execution Associate of Nationstar Mortgage LLC * * *." He averred that Nationstar "services and maintains records for the loan that is secured by the mortgage being foreclosed in this action in its capacity as Defendant U.S. Bank NationalAssociation, not in its individual capacity but solely as Trustee NRZ Pass-Through Trust X's servicer." He said that he had personal knowledge of the facts in his affidavit from reviewing Nationstar's records and had personal knowledge of Nationstar's procedures for creating and maintaining business records. Following a heading reading, "If Nationstar relies on prior servicer records, include the following language as a separate paragraph," Zhao said that "[b]efore the servicing of this loan transferred to Nationstar, SPS (Prior Servicer) was the servicer for the loan and it maintained the loan servicing records." He went on to say that Nationstar incorporated SPS's records into its own recordkeeping system, and that Nationstar relied on SPS's records in providing its loan servicing functions. Zhao specifically averred that "U.S. Bank National Association, not in its individual capacity but solely as Trustee NRZ Pass-Through Trust X directly or through an agent, has possession of the promissory note and held the note at the time of filing the answer. The promissory note has been duly indorsed."

{¶ 14} In addition to his testimony, Zhao included several documents with his affidavit. He averred that the documents were "true and correct copies of documents electronically stored in Nationstar's business records * * *." Attached to the affidavit were (1) note 1 with a blank indorsement from MILA; (2) mortgage 1; (3) a January 26, 2018 assignment of mortgage listing "CITIBANK, N.A., NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS TRUSTEE OF NRZ PASS-THROUGH TRUST VI, BY NATIONSTAR MORTGAGE LLC ITS ATTORNEY IN FACT" as the assignor and "U.S. BANK NATIONAL ASSOCIATION, NOT IN ITS INDIVIDUAL CAPACITYBUT SOLELY AS TRUSTEE NRZ PASS-THROUGH TRUST X" as the assignee, along with a limited power of attorney from "CITIBANK, N.A., not in its individual capacity but solely as Trustee on behalf of NRZ Pass-Through Trust VI" giving Nationstar power of attorney to, among other things, assign mortgages and notes on Citibank's behalf; (4) the June 11, 2013 loan modification agreement between Boreman and SPS; (5) the September 17, 2010 loan modification agreement between Boreman and BAC; (6) the January 17, 2008 loan modification agreement between Boreman and Wilshire; (7) two default notices sent to Boreman on April 5, 2016; and (8) Boreman's payment history.

{¶ 15} In his June 6, 2018 response to Citibank's motion, Boreman first argued that summary judgment was not appropriate because Citibank was not the proper party to enforce the note and mortgage. Citibank assigned the note and mortgage to U.S. Bank in January 2018. Consequently, Citibank could not prove that it was the party entitled to enforce the note and mortgage.

{¶ 16} Boreman also claimed that there were numerous issues with Zhao's affidavit. First, he argued that Zhao was not authorized to testify on behalf of Citibank because his testimony related to the records Nationstar maintained on behalf of U.S. Bank—not Citibank—which made Zhao's affidavit completely inadmissible as it related to Citibank's motion for summary judgment. Next, Boreman argued that Zhao failed to explain Citibank's ability to enforce the note and mortgage. Zhao did not attest that Citibank had possession of the note or that there was an agency relationship betweenCitibank (which was pursuing foreclosure) and U.S. Bank (on whose behalf Zhao testified) that would allow Citibank to enforce the note. As to the mortgage, Boreman said that a party is required to provide admissible evidence of its ability to enforce a mortgage to survive summary judgment, but Zhao did not provide any testimony "as to any party having an enforceable interest in the Mortgage."

{¶ 17} Further, Boreman argued that Zhao did not properly authenticate Nationstar's business records because he provided...