Court Opinion

ID: 2705510
Source: CourtListenerOpinion
Date Created: 2014-08-04 22:37:04.312062+00
Date Added: 2024-06-11T12:29:37.363751
License: Public Domain

[Cite as JPMorgan Chase Bank, N.A. v. Byrd, 2013-Ohio-2076.]

STATE OF OHIO                   )                       IN THE COURT OF APPEALS
                                )ss:                    NINTH JUDICIAL DISTRICT
COUNTY OF SUMMIT                )

CHASE HOME FINANCE LLC                                  C.A. No.   26571

        Appellee

        v.                                              APPEAL FROM JUDGMENT
                                                        ENTERED IN THE
ERIC D. BYRD aka ERIC BYRD and                          COURT OF COMMON PLEAS
DENISE BYRD, et al.                                     COUNTY OF SUMMIT, OHIO
                                                        CASE No.   CV 2010 10 06926
        Appellants

                               DECISION AND JOURNAL ENTRY

Dated: May 22, 2013

        MOORE, Presiding Judge.

        {¶1}    Defendants-Appellants, Eric and Denise Byrd (“the Byrds”), appeal from the July

5, 2012 judgment entry of the Summit County Court of Common Pleas. This Court reverses.

                                                   I.

        {¶2}    Plaintiff-Appellee, Chase Home Finance, LLC, filed a complaint in foreclosure

against the Byrds alleging that they defaulted upon their mortgage note and owed $45,086.41,

plus interest at the rate of 7.750% per year from August 1, 2009. In addition, Chase Home

Finance, LLC attached to its complaint copies of three assignments of the Byrds’ mortgage

evidencing transfers from: (1) Country Home Mortgage to Flagstar Bank, FSB, (2) Flagstar

Bank, FSB to Federal National Mortgage Association, in care of, Chase Mortgage Company, and

(3) Federal National Mortgage Association to Chase Home Finance, LLC. The assignments of

the Byrds’ mortgage were notarized and recorded with the Summit County Auditor.
                                                 2

       {¶3}    The Byrds filed an answer in which they denied the allegations in Chase Home

Finance, LLC’s complaint, and raised the affirmative defense of whether Chase Home Finance,

LLC had standing to sue.

       {¶4}    Chase Home Finance, LLC then filed a motion to substitute the party plaintiff due

to a corporate merger with JPMorgan Chase Bank, N.A. In its motion, Chase Home Finance,

LLC asserted that JPMorgan Chase Bank, N.A., successor by merger to Chase Home Finance,

LLC, is the current holder of the note and mortgage which are the subject of this foreclosure

action. Chase Home Finance, LLC attached a notarized and recorded copy of the assignment of

the Byrds’ mortgage from Federal National Mortgage Association to Chase Home Finance, LLC,

as well as a copy of the certificate of merger between Chase Home Finance, LLC and JPMorgan

Chase Bank, N.A. The trial court granted Chase Home Finance, LLC’s motion and substituted

JPMorgan Chase Bank, N.A. as the party plaintiff.

       {¶5}    JPMorgan Chase Bank, N.A. filed a motion for summary judgment arguing that

there are no genuine issues of material fact for trial because the Byrds’ answer is a general denial

of the allegations set forth in the foreclosure complaint and the Byrds’ affirmative defenses all

generally allege legal doctrines without any supporting operative facts.

       {¶6}    The Byrds filed a motion to compel discovery and a brief in opposition to

JPMorgan Chase Bank, N.A.’s motion for summary judgment.                   In their brief, the Byrds

contended that genuine issues of material fact existed as to whether the substitute plaintiff had

standing since it was not the original mortgagee in this case. Specifically, the Byrds contended

that JPMorgan Chase Bank, N.A. provided no merger documents with its affidavit in support of

its motion for summary judgment.
                                                 3

       {¶7}    In response, JPMorgan Chase Bank, N.A. filed a motion to strike the Byrds’

motion to compel claiming that, because it had already responded to the discovery requests, the

motion to compel was moot. Additionally, JPMorgan Chase Bank, N.A. filed a memorandum in

support of its motion for summary judgment pointing out that, based upon its motion to

substitute and supporting documentation of the merger, the trial court had issued an order

acknowledging that “JPMorgan Chase Bank, N.A. successor by merger to Chase Home Finance,

LLC is the current assignee of the subject Note and Mortgage and is therefore the real party

plaintiff in interest herein.” As such, JPMorgan Chase Bank, N.A. argued that it was the real

party in interest and had standing to pursue the foreclosure action.

       {¶8}    The trial court granted the Byrds’ motion to compel and JPMorgan Chase Bank,

N.A. provided supplemental responses to discovery, which included a copy of a limited power of

attorney authorizing Chase Manhattan Mortgage Corporation to assign the Byrds’ mortgage as

Attorney-In-Fact for Federal National Mortgage Association. The corresponding assignment of

the Byrds’ mortgage indicates that Federal National Mortgage Association assigned the

mortgage to Chase Home Finance, LLC, as follows: Chase Home Finance, LLC, successor by

merger to Chase Manhattan Mortgage Corporation, as Attorney-In-Fact for Federal National

Mortgage Association. We note that documentation of the merger between Chase Manhattan

Mortgage Corporation and Chase Home Finance, LLC, is not in the record.

       {¶9}    The Byrds then filed a supplemental brief in opposition to JPMorgan Chase Bank,

N.A.’s motion for summary judgment. In their supplemental brief, the Byrds attacked the

effectiveness of the limited power of attorney from Federal National Mortgage Association to

Chase Manhattan Mortgage Corporation, claiming that paragraph 8 of the document only allows

Chase to assign the mortgage to (1) the Federal Housing Administration, (2) the Department of
                                                   4

Housing and Urban Development, (3) the Department of Veterans Affairs, (4) the Rural Housing

Service, (5) a state or private mortgage insurer, or (6) Mortgage Electronic Registration System.

           {¶10} The trial court granted JPMorgan Chase, N.A.’s motion for summary judgment,

stating:

           The Court finds that the Byrds do not challenge the assignments up to the point
           that Chase Bank obtained the assignment. The Court further finds that []
           [JPMorgan Chase Bank, N.A.] is the successor by merger and as stated in the
           Court’s May 27, 2011 Order, [JPMorgan Chase Bank, N.A.] “is the current
           assignee of the subject Note and Mortgage and is the real party in interest.” The
           Court finds that the Byrds fail to present a genuine issue of material fact on the
           issue of standing.

The trial court then journalized an entry granting JPMorgan Chase, N.A. a decree in foreclosure.

           {¶11} The Byrds appealed, raising one assignment of error for our consideration.

                                                  II.

                                    ASSIGNMENT OF ERROR

           THE TRIAL COURT ERRED WHEN IT GRANTED SUMMARY JUDGMENT
           IN JPMORGAN CHASE BANK, N.A.’S FAVOR AS THERE WAS A
           GENUINE ISSUE REGARDING WHETHER [JPMORGAN CHASE BANK,
           N.A.] HAD STANDING AND [JPMORGAN CHASE BANK, N.A.] WAS NOT
           ENTITLED TO JUDGMENT AS A MATTER OF LAW.

           {¶12} In their sole assignment of error, the Byrds argue that the trial court erred in

granting JPMorgan Chase Bank, N.A.’s motion for summary judgment because a genuine issue

of material fact existed as to whether JPMorgan Chase Bank, N.A. had standing to pursue the

foreclosure action. Specifically, the Byrds argue that JPMorgan Chase Bank, N.A.’s affidavit in

support of its motion does not “reference or incorporate the power of attorney or merger

documents involving its predecessors in interest.”

           {¶13} In response, JPMorgan Chase Bank, N.A. contends that no genuine issue of

material fact existed because the uncontroverted evidence showed that: (1) the Byrds executed
                                                5

and delivered the note and mortgage that were assigned to JPMorgan Chase Bank, N.A., (2) the

mortgage and assignments were validly recorded, (3) the Byrds defaulted on their mortgage

payments, and (4) the Byrds still owe $45,086.41, plus interest at a rate of 7.75% per year, on the

mortgage note.    Further, JPMorgan Chase Bank, N.A. contends that the Byrds’ argument

regarding the Bank’s standing to file the foreclosure action fails as a matter of law because: (1)

the Byrds lack capacity to challenge the validity of the assignment from Federal National

Mortgage Association to Chase Home Finance, LLC, (2) the Byrds have not provided any

evidence showing that the assignment to Chase Home Finance, LLC was invalid, and (3) the

Byrds provided the trial court with a copy of the limited power of attorney authorizing Chase to

assign the mortgage.

       {¶14} An appellate court reviews an award of summary judgment de novo. Grafton v.

Ohio Edison Co., 77 Ohio St.3d 102, 105 (1996). It applies the same standard as the trial court,

viewing the facts of the case in the light most favorable to the non-moving party and resolving

any doubt in favor of the non-moving party. Viock v. Stowe-Woodward Co., 13 Ohio App.3d 7,

12 (6th Dist.1983). Pursuant to Civ.R. 56(C), summary judgment is proper if:

       (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 the 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 (1977). The moving party bears the initial

burden of informing the trial court of the basis for the motion and pointing to parts of the record

that show the absence of a genuine issue of material fact. Dresher v. Burt, 75 Ohio St.3d 280,

292-93 (1996). Specifically, the moving party must support its motion by pointing to some

evidence in the record indicated in Civ.R. 56(C). Id. Once this burden is satisfied, the non-
                                                  6

moving party bears the burden of offering specific facts to show a genuine issue for trial. Id. at

293; Civ.R. 56(E).

       {¶15} Civ.R. 56(C) provides that, in reviewing a motion for summary judgment, the

court should review “the pleadings, depositions, answers to interrogatories, written admissions,

affidavits, transcripts of evidence, and written stipulations of fact[.]” Further, when affidavits

are submitted in support of or in opposition to motions for summary judgment, Civ.R. 56(E)

provides that the affidavits “shall be made on personal knowledge, shall set forth such facts as

would be admissible in evidence, and shall show affirmatively that the affiant is competent to

testify to the matters stated in the affidavit. Sworn or certified copies of all papers or parts of

papers referred to in an affidavit shall be attached to or served with the affidavit.”

       {¶16} In the present matter, JPMorgan Chase Bank, N.A. submitted the following

evidence in support of its motion for summary judgment: (1) the affidavit of Rachit Soni, Vice

President of JPMorgan Chase Bank, N.A., authenticating the Bank’s business records as to the

Byrds’ note and mortgage, (2) a copy of the signed note, (3) a copy of the signed mortgage, (4) a

copy of the recorded assignments, and (5) notice of default and acceleration to the Byrds

advising that they must bring their loan current within thirty-two (32) days from the date of the

notice in order to avoid acceleration of their mortgage note.

       {¶17} Additionally, in support of their supplemental brief in opposition, the Byrds

attached JPMorgan Chase Bank, N.A.’s supplemental discovery responses, including a copy of

the limited power of attorney from the Federal National Mortgage Association to Chase

Manhattan Mortgage Corporation.

       {¶18} In Fed. Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-

5017, the Supreme Court of Ohio recently held that a plaintiff must have a valid assignment of
                                                    7

the mortgage at the time of the filing of the complaint. “The Ohio Constitution provides in

Article IV, Section 4(B): ‘The courts of common pleas and divisions thereof shall have such

original jurisdiction over all justiciable matters and such powers of review of proceedings of

administrative officers and agencies as may be provided by law.’” (Emphasis sic.) Schwartzwald

at ¶ 20.

           Whether a party has a sufficient stake in an otherwise justiciable controversy to
           obtain judicial resolution of that controversy is what has traditionally been
           referred to as the question of standing to sue. Where the party does not rely on
           any specific statute authorizing invocation of the judicial process, the question of
           standing depends on whether the party has alleged * * * a personal stake in the
           outcome of the controversy.

(Internal quotations omitted.) Id. at ¶ 21, quoting Cleveland v. Shaker Hts., 30 Ohio St.3d 49, 51

(1987). Standing is a jurisdictional matter and, therefore, must be established at the time the

complaint is filed. Schwartzwald at ¶ 24.

           {¶19} At the commencement of an action, if a plaintiff does not have standing to invoke

the court’s jurisdiction, the “common pleas court cannot substitute a real party in interest for

another party if no party with standing has invoked its jurisdiction in the first instance.” Id. at ¶

38. “The lack of standing at the commencement of a foreclosure action requires dismissal of the

complaint; however, that dismissal is not an adjudication on the merits and is therefore without

prejudice.” Id. at ¶ 40.

           {¶20} Here, JPMorgan Chase Bank, N.A. provided copies of all three assignments of the

Byrds’ mortgage, as well as a copy of a limited power of attorney authorizing Chase Manhattan

Mortgage Corporation to act as Attorney-In-Fact for Federal National Mortgage Corporation.

Additionally, the bank provided proof of the merger between Chase Home Finance, LLC, and

JPMorgan Chase Bank, N.A.               However, JPMorgan Chase Bank, N.A. did not provide

documentation of the original merger between Chase Manhattan Mortgage Corporation and
                                                  8

Chase Home Finance, LLC, as referenced in the assignment from Federal National Mortgage

Corporation to Chase Home Finance, LLC. As stated above, the assignment between Federal

National Mortgage Corporation and Chase Home Finance, LLC, indicates that Chase Home

Finance, LLC assigned the Byrds’ mortgage to itself as both (1) successor by merger to Chase

Manhattan Mortgage Corporation, and (2) Attorney-In-Fact to Federal National Mortgage

Corporation.

       {¶21} In light of the Supreme Court of Ohio’s recent decision, we reverse and remand

this matter so that the trial court may apply Schwartzwald to the facts of this case in order to

determine whether Chase Home Finance, LLC had standing when it filed its complaint.

                                                 III.

       {¶22} In sustaining the Byrds’ sole assignment of error, the judgment of the Summit

County Court of Common Pleas is reversed, and the cause remanded for further proceedings

consistent with this decision.

                                                                                 Judgment reversed,
                                                                                   cause remanded.

       There were reasonable grounds for this appeal.

       We order that a special mandate issue out of this Court, directing the Court of Common

Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy

of this journal entry shall constitute the mandate, pursuant to App.R. 27.
                                                  9

        Immediately upon the filing hereof, this document shall constitute the journal entry of

judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the

period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is

instructed to mail a notice of entry of this judgment to the parties and to make a notation of the

mailing in the docket, pursuant to App.R. 30.

        Costs taxed to Appellee.

                                                      CARLA MOORE
                                                      FOR THE COURT

HENSAL, J.
CONCURS.

BELFANCE, J.
CONCURRING.

        {¶23} I concur. JPMorgan Chase Bank has not demonstrated that Chase Home Finance,

LLC had standing to invoke the court’s jurisdiction in this case. Specifically, there is no

indication that Chase Home Finance, LLC was the attorney-in-fact for the Federal National

Mortgage Corporation because nothing in the record supports the conclusion that it is a successor

by merger to Chase Manhattan Mortgage Corporation, which was the entity granted attorney-in-

fact status by the Federal National Mortgage Corporation.           Therefore, it is impossible to

conclude that Chase Home Finance had the authority under the attorney-in-fact agreement to

transfer the note and the mortgage to itself. If it lacked the authority to make that transfer, it was

not the holder of the note and mortgage in this case and, thus, would have lacked standing to

initiate the suit.
                                                 10

       {¶24} I also note that the Byrds have argued that the attorney-in-fact agreement did not

give the attorney-in-fact, whether Chase Home Finance or not, the authority to transfer the note

and the mortgage to itself. The Byrds raised this issue below, but the trial court never ruled on

the issue, instead apparently considering the issue moot because it believed that the Byrds were

not challenging the assignments prior to Chase Home Finance filing the complaint. However,

given the uncertainty surrounding Chase Home Finance’s status, this question is not ripe for

review. Furthermore, given that the trial court did not reach this issue, it is appropriate for it to

resolve the issue in the first instance. See Interface Fin. Group, Inc. v. Margagliotti, 9th Dist.

No. 26217, 2012-Ohio-3666, ¶ 13.

APPEARANCES:

JULIUS P. AMOURGIS, Attorney at Law, for Appellants.

THOMAS WYATT PALMER, Attorney at Law, for Appellee.

LAURA A. HAUSER, Attorney at Law, for Appellee.