[Cite as Beal Bank S.S.B. v. Elzy, 2014-Ohio-3279.]

IN THE COURT OF APPEALS

ELEVENTH APPELLATE DISTRICT 

TRUMBULL COUNTY, OHIO 

BEAL BANK S.S.B., : O P I N I O N 

 Plaintiff-Appellee, :

CASE NO. 2013-T-0095

 - vs - :

LEVI N. ELZY, SR., et al., :

 Defendants-Appellants. :

Civil Appeal from the Trumbull County Court of Common Pleas. 

Case No. 2011 CV 00703. 

Judgment: Affirmed. 

Kyle E. Timken, Manley Deas Kochalski, LLC, 1400 Goodale Blvd., Suite 200, P.O. 

Box 165028, Columbus, OH 43216-5028 (For Plaintiff-Appellee). 

Bruce M. Broyles, 5815 Market Street, Suite 2, Youngstown, OH 44512 (For 

Defendants-Appellants). 

TIMOTHY P. CANNON, P.J. 

{¶1} Appellants, Levi N. Elzy, Sr. and Carolyn A. Elzy, appeal the judgment 

entry and decree of foreclosure in favor of appellee, Beal Bank S.S.B. (“Beal”). At issue 

is whether the trial court erred in finding that Beal had standing to file this action. For 

the reasons that follow, we affirm the decision of the trial court. 

{¶2} In July 1997, appellants took title to a property at 530 Butler Road NE in 

Warren, Ohio (“the Property”). On July 18, 1997, appellants signed a promissory note 
 2

in favor of One Stop Mortgage, Inc. (“One Stop”). Appellants also granted a mortgage 

on the Property to One Stop to secure the debt evidenced by the note. The mortgage 

was filed July 24, 1997. The record reveals that the mortgage, together with the note, 

was assigned from One Stop to Aames Capital Corporation (“Aames”) and later from 

Aames to Beal. The assignment of the mortgage from Aames to Beal was recorded 

with the Trumbull County Recorder on June 23, 2004. 

{¶3} On March 31, 2011, Beal filed a complaint in foreclosure. Beal alleged it 

was entitled to enforce the note, pursuant to R.C. 1301.31, and that the mortgage was 

executed in connection with the execution of the note. Attached to the complaint was a 

copy of the mortgage and note. Copies of the assignments from One Stop to Aames 

and from Aames to Beal were also attached. The assignment from Aames to Beal was 

notarized and recorded on June 23, 2004, in the Recorder’s Office of Trumbull County, 

Ohio. 

{¶4} In the complaint, Beal alleged that the appellants’ personal obligations on 

the note had been discharged under the United States Bankruptcy Code. Therefore, 

Beal was not seeking personal judgment against appellants, but to enforce its security 

interest. Beal alleged the note had been accelerated and was in default. 

{¶5} Appellants filed an answer. Beal then filed a motion for summary 

judgment, and appellants filed a brief in opposition to Beal’s motion for summary 

judgment. The trial court denied Beal’s motion for summary judgment, indicating there 

was a question of material fact as to whether Beal was entitled to enforce the note 

based upon an endorsement from Aames to Bankers Trust Company of California, 
 3

N.A.1

 that was crossed out with a handwritten “cancelled.” The matter was therefore set 

for a bench trial. 

{¶6} At trial, Beal presented the original note as well as exhibits documenting 

the endorsement chain to Beal. Beal also presented the testimony of Bret Maloney, 

Senior Vice President of Default Management of its master servicer, MGC Mortgage, 

Inc. Mr. Maloney testified with respect to the assignment of the mortgage and further 

stated that Beal acquired the note and its interest in the note prior to filing the 

foreclosure complaint. 

{¶7} In its judgment entry granting the foreclosure and sale of appellants’ real 

estate, the trial court noted that, “[i]n addition to possessing the original note, the note 

contained a proper chain of specific endorsements leading to Plaintiff[,] and this Court 

finds that Plaintiff is the party entitled to enforce the instrument.” The trial court further 

found that the sum due under the note was accelerated in accordance with the terms of 

the note and mortgage; that appellants “executed and delivered the mortgage 

referenced in the complaint[;] and that the mortgage secured the amounts due under 

the note.” 

{¶8} Appellants filed a notice of appeal from the entry and decree in foreclosure 

and assert the following assignment of error for our review: 

{¶9} “The trial court erred in granting judgment in favor of the lender when it 

could not establish that it had standing to file the foreclosure action.” 

{¶10} Under appellants’ sole assignment of error, they present the following two 

issues: 

 

1. Bankers Trust Company of California, N.A. in trust for the benefit of Holders of Aames Mortgage Trust 

1997-C Mortgage Pass-Through Certificates, series 1997-C.
 4

[1.] The Lender did not establish at the time the complaint was filed 

that it had standing to file the complaint as the promissory note 

attached to the complaint did not have the allonge attached to it. 

[2.] The trial court erred in determining that Appellee had standing 

to file the complaint when it could not explain the “cancelled” 

endorsement in the chain of title. 

{¶11} Appellants maintain that Beal did not have standing to file this action. 

Contrary to appellants’ arguments regarding the substance of Beal’s complaint, 

however, Beal attached to its complaint the mortgage, the note, and the applicable 

assignments to establish standing to sue. See Fed. Home Loan Mtge. Corp. v. 

Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017, ¶38-39. 

{¶12} “Standing is a jurisdictional requirement which must be met before a 

common pleas court can proceed.” Fed. Home Loan Mtge. Corp. v. Koch, 11th Dist. 

Geauga No. 2012-G-3084, 2013-Ohio-4423, ¶24, citing Schwartzwald at ¶22. The 

mortgage lender must demonstrate an interest in either the mortgage or promissory 

note to establish standing; this interest must exist at the time the foreclosure complaint 

is filed in the trial court. Koch, citing Schwartzwald at ¶25-27. 

{¶13} At the time the complaint was filed, Beal attached a copy of the 

assignment documents. The first assignment, which was notarized and recorded with 

the Trumbull County Recorder, demonstrated the assignment from One Stop to Aames. 

The second assignment, which was also notarized and recorded with the Trumbull 

County Recorder, demonstrated the assignment from Aames to Beal. The assignment 

from Aames to Beal was recorded on June 23, 2004, prior to the filing of the complaint. 

See R.C. 5301.32. 
 5

{¶14} Beal also provided evidence that it became the holder of the note prior to 

the complaint being filed. The holder of an instrument is a “person entitled to enforce” 

the instrument under R.C. 1303.31. R.C. 1301.201(B)(21)(a) defines a holder of a 

negotiable instrument as “[t]he person in possession of a negotiable instrument that is 

payable either to bearer or to an identified person that is the person in possession.” 

Beal was in possession of the original note, which was inspected by the trial court and 

opposing counsel prior to its admission. The note was also specially endorsed from 

Aames to Beal. And the testimony indicates that this endorsement from Aames to Beal 

occurred prior to Beal filing its complaint. 

{¶15} Both below and on appeal, appellants have maintained that a cancelled 

endorsement from Aames to Bankers Trust Company of California, N.A. raises an issue 

as to Beal’s standing to foreclose on the mortgage. Appellants maintain that Beal 

should have been required to present evidence of the circumstances surrounding the 

use of an “X” and the word “cancelled.” However, at trial, Beal presented the original 

note as well as a valid assignment of the mortgage. Beal also established that its 

interest existed at the time the foreclosure complaint was filed. See Schwartzwald, 

supra, ¶18-24 (holding that standing is required to present a justiciable controversy and 

is a jurisdictional requirement). Nothing suggests the cancelled endorsement affects 

Beal’s status as the holder of the note. This court has previously noted that “the 

presence of voided endorsements does not create a genuine issue of fact in the face of 

evidentiary material establishing appellee as the holder of the note.” M & T Bank v. 

Strawn, 11th Dist. Trumbull No. 2013-T-0040, 2013-Ohio-5845, ¶26. As a result, 

appellants’ assignment of error is without merit. 
 6

{¶16} The judgment of the Trumbull County Court of Common Pleas is hereby 

affirmed. 

DIANE V. GRENDELL, J., concurs, 

COLLEEN MARY O’TOOLE, J., concurs in judgment only.