Court Opinion

ID: 5119992
Source: CourtListenerOpinion
Date Created: 2021-10-21 16:11:50.312587+00
Date Added: 2024-06-11T08:22:14.997233
License: Public Domain

[Cite as Bank of New York Mellon v. Floyd, 2021-Ohio-3736.]

                              COURT OF APPEALS OF OHIO

                            EIGHTH APPELLATE DISTRICT
                               COUNTY OF CUYAHOGA

BANK OF NEW YORK MELLON,                             :

                Plaintiff-Appellee,                  :
                                                              No. 110248
                v.                                   :

DORIS M. FLOYD, ET AL.,                              :

                Defendants-Appellants.               :

                              JOURNAL ENTRY AND OPINION

                JUDGMENT: AFFIRMED
                RELEASED AND JOURNALIZED: October 21, 2021

            Civil Appeal from the Cuyahoga County Court of Common Pleas
                                Case No. CV-19-922817

                                           Appearances:

                Reimer Law Co. and Mike L. Wiery, for appellee.

                Willie Floyd and Doris Floyd, pro se.

ANITA LASTER MAYS, P.J.:

        {¶ 1}     Defendants-appellants, Doris M. Floyd and Willie Floyd (the

“Floyds”), appeal from the trial court’s January 21, 2021 judgment adopting the

magistrate’s decision and ordering a decree of foreclosure in favor of plaintiff-

appellee Bank of New York Mellon (“BONYM” or the “bank”). For the reasons that

follow, we affirm.
                       Factual and Procedural History

      {¶ 2}   The record demonstrates that in 2006, the Floyds executed an

adjustable rate note in favor of America’s Wholesale Lender in the amount of

$50,850 in order to finance the purchase of property located on Eldamere Avenue

in Cleveland. Along with the execution of the note, the Floyds also executed and

delivered to Mortgage Electronic Registration Systems, Inc. (“MERS”), as nominee

for America’s Wholesale Lender, a mortgage granting it the first and best lien on the

property. The mortgage was recorded in January 2006 in the Cuyahoga County

Recorder’s Office. The note and mortgage were subsequently transferred and

assigned to BONYM that was memorialized by an assignment of mortgage recorded

in October 2009 in the Cuyahoga County Recorder’s Office.

      {¶ 3}   In December 2009, the note and mortgage were modified by a loan-

modification agreement that was recorded in November 2011 in the Cuyahoga

County Recorder’s Office. BONYM contends that the Floyds defaulted under the

note, loan-modification agreement, and mortgage by failing to make payments due

for October 1, 2010, and any subsequent payments. As such, the bank issued a notice

of default to the Floyds in July 2013 and again in July 2014. The default was not

cured, and BONYM filed the within foreclosure proceedings in March 2015.

      {¶ 4}   In April 2015, the Floyds filed a motion for summary judgment that

the bank opposed. In September 2015, BONYM sought leave to file an amended

complaint that was unopposed and granted. In November 2015, the trial court
denied the Floyds’ motion for summary judgment, and the bank filed its first

amended complaint.

      {¶ 5}    In December 2015, the Floyds filed an answer, counterclaims, and a

motion to dismiss the complaint. The bank opposed the Floyds’ motion to dismiss,

and filed its own motion to dismiss the Floyds’ counterclaims. The Floyds then filed

a motion for leave to file an amended answer and counterclaims with the joinder of

an additional party on March 29, 2016, that BONYM opposed. In August 2016, the

trial court denied the Floyds’ motion to dismiss the bank’s complaint, and in

September 2016, the court denied the Floyds’ motion to file an amended answer and

counterclaims with the joinder of an additional party. Also in September 2016, the

trial court granted BONYM’s motion to dismiss the Floyds’ first set of counterclaims.

      {¶ 6}    In July 2017, the bank sought leave to file a second amended

complaint that the trial court granted; the bank’s second amended complaint was

filed in January 2018. In February 2018, the Floyds filed a motion to dismiss the

second amended complaint; the motion was denied. The Floyds then filed a second

amended answer and counterclaims in November 2018. The bank moved to strike

or dismiss the second set of counterclaims. The Floyds filed a motion to file their

second set of counterclaims out of time, and a motion for leave to reply to the bank’s

motion to strike or dismiss. The trial court granted the Floyds’ request to file out of

time, denied the bank’s motion to dismiss, and denied the Floyds’ motion for leave

to reply as moot.
      {¶ 7}   BONYM then filed a renewed motion to dismiss the Floyds’ second

set of counterclaims; the Floyds opposed the motion. The trial court granted the

bank’s motion to dismiss second set of counterclaims. The Floyds filed a motion for

reconsideration that the trial court denied. In May 2019, the Floyds filed their

second motion for summary judgment that the bank opposed. The trial court denied

the Floyds’ second motion for summary judgment in August 2019.

      {¶ 8}   BONYM moved for summary judgment in June 2019; the Floyds

opposed. In August 2019, the magistrate issued his decision granting the bank’s

motion for summary judgment. The Floyds filed objections to the magistrate’s

decision. The trial court overruled the Floyds’ objections in January 2021, and

issued an order adopting the magistrate’s decision and decree of foreclosure in

January 2021. The Floyds now appeal, raising the following six assignments of error

for our review:

      ASSIGNMENT OF ERROR NO. 1: The trial court erred to the prejudice
      of the appellants in adopting the magistrate’s decision and granting the
      appellee’s motion for summary judgment when numerous issues of fact
      exist as to who the real party in interest is. The trial court failed to
      construe the evidence most favorably toward the appellants.

      ASSIGNMENT OF ERROR NO. 2: The trial court erred in denying
      appellants’ motion for summary judgment. The appellants have
      established by admissible evidence that BNYM is not entitled to enforce
      the note and mortgage and the court erred in allowing BNYM to use
      manipulated documents to obtain summary judgment.

      ASSIGNMENT OF ERROR NO. 3: The trial court erred by relying on
      the affidavit of Laura Hovis filed in support of appellee’s motion for
      summary judgment. The trial court erred by failing to strike the
      affidavit as impermissible hearsay or in the alternative failing to strike
      Exhibits A1-A9 and sustaining appellants’ motion for summary
      judgment.
      ASSIGNMENT OF ERROR NO. 4: The trial court erred to the
      prejudice of the appellants in awarding [summary judgment] when
      BNYM failed to prove the amount of principal and interest due on the
      mortgage and not granting summary judgment to the appellants.

      ASSIGNMENT OF ERROR NO. 5: The trial court erred in failing to
      consider appellants’ affirmative defenses of unclean hands, and judicial
      estoppel. Appellants’ [summary judgment] motion should have been
      sustained.

      ASSIGNMENT OF ERROR NO. 6: The trial court erred to the
      prejudice of the appellants in dismissing our counterclaims.

      {¶ 9}    Further facts will be discussed under the assignments of error.

                                Law and Analysis

      {¶ 10} Appellate review of an order granting summary judgment is de novo.

Pursuant to Civ.R. 56(C), the party seeking summary judgment must prove that (1)

there is no genuine issue of material fact; (2) they are entitled to judgment as a

matter of law; and (3) reasonable minds can come to but one conclusion and that

conclusion is adverse to the nonmoving party.

      {¶ 11} In a foreclosure action, the plaintiff is required to prove (1) it was

either the holder of the note and mortgage or a party entitled to enforce those

instruments; (2) the chain of assignments and transfers; (3) the mortgagor was in

default under the terms of the loan; (4) all conditions had been met; and (5) the

amount due. Deutsche Bank Natl. Trust Co. v. Najar, 8th Dist. Cuyahoga No.

98502, 2013-Ohio-1657, ¶ 62.

BONYM’s Standing

      {¶ 12} In their first assignment of error, the Floyds contend that “the trial

court’s decision is against the manifest weight of the evidence regarding the plaintiff
being holder of the note and mortgage.” According to the Floyds, both BONYM and

BAC Home Loan Servicing (“BAC”) are purporting to be the holders of the mortgage

and loan.

      {¶ 13} We initially note that the Floyds cite to previous proceedings

regarding the subject property. Specifically, a foreclosure case was filed in 2009 in

Cuyahoga County C.P. No. CV-09-706593, and again in 2012 in Cuyahoga County

C.P. No. CV-12-778979. In the 2009 case, BONYM obtained default judgment

against the Floyds. The default judgment was later vacated by the bank, and the trial

court dismissed the case without prejudice. The 2012 case was also dismissed

without prejudice.

      {¶ 14} In their motion for summary judgment, the Floyds attempted to rely

on the prior proceedings; they also cite the prior proceedings now on appeal. For

example, they contend that “[d]uring the same time BONYM possessed a default

judgment, BAC sent three letters dated May 2010, September 2010, and February

2012, attempting to collect on the loan and threatening us with foreclosure.”

      {¶ 15} Generally, a trial court may not take judicial notice of prior

proceedings in the court; rather, it may only take judicial notice of prior proceedings

in the immediate case. D & B Immobilization Corp. v. Dues, 122 Ohio App.3d 50,

53, 701 N.E.2d 32 (8th Dist.1997). The rationale for this holding is that if a court

takes notice of a prior proceeding, the appellate court cannot review whether the

trial court correctly interpreted the prior case because the record of the prior case is

not before the appellate court. Id.
      {¶ 16} Further, a dismissal without prejudice, which was the case for both

prior foreclosure cases, has the effect of placing the parties back in the position that

they held prior to the commencement of the action. Zimmie v. Zimmie, 11 Ohio

St.3d 94, 464 N.E.2d 142 (1984), paragraph two of the syllabus. A dismissal without

prejudice has the effect of dissolving all rulings preceding the entry of dismissal.

DeVille Photography, Inc. v. Bowers, 169 Ohio St. 267, 272, 159 N.E.2d 443 (1959).

Therefore, the parties are permitted to litigate claims as if no previous suit had been

commenced. Id.

      {¶ 17} In light of the above, we disregard the Floyds’ arguments relating to

the 2009 and 2012 foreclosure actions.

      {¶ 18} We do consider issues the Floyds raise about the versions of the note

that were before the trial court in this case; the record demonstrates that there were

two versions. The first version of the note contains both a blank endorsement and a

specialty endorsement to BONYM via an allonge (see original Mar. 20, 2015

complaint, Exhibit A). The second version of the note contains the same blank

endorsement that the first version contained, but the allonge containing the

specialty endorsement is no longer affixed to the note (see Jan. 25, 2018 second

amended complaint, Exhibit A). The bank offers the following explanation for the

versions:

      When BONYM’s Counsel received the referral for the subject Loan, it
      was provided a copy of the Note that contained both the blank
      endorsement and an affixed Allonge that contained a specialty
      endorsement. When the appellants served BONYM with Discovery
      Requests, BONYM’s counsel took custody of the original note to permit
      for appellants to inspect the original note. Upon review of the Original
      Note, BONYM’s counsel discovered that at that time no Allonge
      containing the specialty endorsement was affixed to the Note. This
      discovery necessitated the Second Amended Complaint in order to
      plead the current and correct version of the Note.

BONYM’s brief, pg. 6-7.

      {¶ 19} This court has previously held that “[t]he mere fact that there were

two different copies of the note in the record — one with endorsements and one

without — does not mandate a finding that one of the notes was ‘unauthentic’ or

otherwise preclude summary judgment.” Najar, 8th Dist. Cuyahoga No. 98502,

2013-Ohio-1657, at ¶ 59, citing United States Bank, N.A. v. Adams, 6th Dist. Erie

No. E-11-070, 2012-Ohio-6253, ¶ 19-20. In foreclosure cases, standing exists where

a party either has a mortgage assignment or is the holder of the note at the time the

complaint is filed. CitiMortgage, Inc. v. Patterson, 2012-Ohio-5894, 984 N.E.2d

392, ¶ 21 (8th Dist.). In this case, BONYM has met its burden of proof with regard

to standing because it had both the mortgage assignment and was the holder of the

note at the time the complaint was filed.

      {¶ 20} Both versions of the note contain a blank endorsement and there was

evidence before the trial court that BONYM had been in possession of the original

note since January 2006. Specifically, in support of its motion for summary

judgment, the bank attached Exhibit A-3, “Possession Statement of Ditech Financial

LLC,” that indicated that BONYM obtained possession of the subject note on

January 17, 2006. The specialty endorsement on the allonge (that endorsed the

bank) was merely a reinforcement that BONYM was the intended recipient of the
note, in addition to the bank’s possession of the note containing the blank

endorsement. Thus, BONYM was the party entitled to enforce the note by being the

party in possession of the note with a blank endorsement. The allonge was removed

from the note since it was apparently redundant to the blank endorsement.

      {¶ 21} The removal of the allonge to the original note did not create an issue

of material fact. Upon discovery of the present condition of the original note,

BONYM amended its complaint to plead a current and correct version of the original

note. Therefore, there was no genuine issue of material fact as to the different

versions of the note.

      {¶ 22} We also find that there was no genuine issue of material fact created

by the loan modification. According to the Floyds, BONYM was not entitled to

enforce the loan modification because the loan modification identified BAC as the

lender. A careful review of the record shows that BAC was a loan servicer, not the

lender. Other loan servicers were used as well throughout the life of the loan (the

other servicers were Countrywide Home Loans Servicing, L.P.; Bank of America,

N.A.; Green Tree Services, L.L.C.; Ditech Financial, L.L.C.; and Carrington

Mortgage Services, L.L.C. (“Carrington”)). But BONYM has been the holder of the

note for almost the entire span of the subject loan (i.e., since Jan. 17, 2006).

      {¶ 23} The Floyds also take issue with the fact that BONYM’s original

complaint contained two assignments of mortgage. The first was from MERS as

nominee for America’s Wholesale Lender and its successors, and assigned to

BONYM. The second assignment of mortgage was a corrective assignment from
MERS as nominee for America’s Wholesale Lender to BONYM. The corrective

assignment of mortgage had a note that expressly stated, “This corrective

assignment is to correct the assignor name on the assignment of mortgage

previously recorded on January 17, 2006 as Instrument No. 200601170038 of

Cuyahoga County Records.” The only change in the assignor name between the two

assignments of mortgage was that the first assignment included “its successors and

assigns” whereas the second assignment of mortgage did not.

        {¶ 24} As mentioned in the procedural history, in September 2015, BONYM

sought leave to file an amended complaint. The leave, unopposed by the Floyds and

granted by the trial court, was so that the correct assignment of mortgage could be

pled.

        {¶ 25} On November 12, 2015, BONYM filed its first amended complaint

that only included the first assignment of mortgage containing the “its successors

and assigns” notation for the assignor; it removed the superfluous corrective

assignment of mortgage because it was never necessary to assign the mortgage in

the first place. Upon careful review of the mortgage, we find that it indicates in

several places that “MERS is a separate corporation that is acting solely as a nominee

for Lender and Lender’s successors and assigns”; “Lender is America’s Wholesale

Lender”; and “Borrower does hereby mortgage, grant and convey to MERS (solely

as nominee for Lender and Lender’s successors and assigns) and to the successors

and assigns of MERS the following described property * * *.” Thus, the record
contains sufficient evidence to demonstrate that BONYM was validly assigned the

mortgage.

         {¶ 26} Moreover, because BONYM was in possession of the blank endorsed

note, it was the equitable assignee of the mortgage. See Najar, 8th Dist. Cuyahoga

No. 98502, 2013-Ohio-1657, at ¶ 65, citing U.S. Bank N.A. v. Marino, 181 Ohio

App.3d 328, 2009-0hio-1178, 908 N.E.2d 1032, ¶ 52 (7th Dist.) (“Even if the

assignment of mortgage from Argent to Deutsche Bank was invalid, Deutsche Bank

would still be entitled to enforce the mortgage because under Ohio law, the mortgage

‘follows the note’ it secures.”).

         {¶ 27} In light of the above, the first assignment of error is overruled.

BONYM’s Documentation in Support of Summary Judgment

         {¶ 28} In their second assignment of error, the Floyds contend that BONYM

relied on “manipulated documents” to obtain summary judgment. They argue that

the trial court should have considered documentation presented in the dismissed

2009 and 2012 foreclosure cases. But as already discussed, those cases were not

before the trial court and cannot be part of our consideration here.

         {¶ 29} The relevant documentation in this case, as set forth in the affidavit

submitted by BONYM, established the following:

         BONYM’s records contain a Note executed by Doris M. Floyd and
         Willie L. Floyd htta1 Willie Lee Floyd in the amount of $50,850.00. The
         Note is endorsed to BONYM in blank. At some time between when the
         Note was executed by the Borrowers on January 6, 2006 and January
         17, 2006, David A. Spector, Managing Director for Countrywide Home

1In   terms of real estate transactions, “htta” means “having taken title as.”
      Loans, Inc. doing business as America’s Wholesale Lender executed a
      blank indorsement. The Note was then transferred to BONYM, who
      has been in possession of the blank indorsed Note since January 17,
      2006. Reimer Law Co. has been in custody of the original Note on
      behalf of the holder, BONYM, from December 5, 2016 and as of the date
      of this Affidavit.

(Citations to exhibits omitted.) Affidavit of Laura Hovis (“Hovis affidavit”), ¶ 6,

submitted in support of BONYM’s motion for summary judgment.

      {¶ 30} The above averment and the corresponding documentation attached

to the bank’s summary judgment motion were sufficient evidence to establish that

BONYM was the holder of the original note, with standing to enforce it. Likewise,

for the reasons already discussed, there was sufficient evidence of a proper mortgage

assignment to BONYM.

      {¶ 31} In light of the above, the second assignment of error is overruled.

Hovis’s Affidavit

      {¶ 32} The Floyds’ third assignment of error challenges Hovis’s affidavit and

the accompanying exhibits she referred to. According to the Floyds, Hovis lacked

personal knowledge of the matters she averred to, and the accompanying

documentation referred to in her affidavit was inadmissible hearsay. Hovis, a

default document senior analyst with Carrington, averred in relevant part as follows:

      1. I am employed by Carrington Mortgage Services, LLC (“Carrington”)
      as a(n) Default Document, Sr. Analyst, and am authorized to execute
      this affidavit on behalf of Carrington, as servicer for The Bank of New
      York Mellon fka The Bank of New York as trustee for the certificate
      holders CWABS Inc., asset backed certificates, Series 2006-5
      (“BONYM”). The statements made in this Affidavit are based on my
      personal knowledge.
2. I am over the age of 18 and competent to testify as to the matters
contained herein.

***

4. In the regular performance of my job functions in my position, I am
familiar with business records maintained by Bank of America, N.A.,
Green Tree Servicing, LLC, Ditech and Carrington for the purpose of
servicing mortgage loans on behalf of BONYM. These records (which
include data compilations, electronically imaged documents, and
others) are made at or near the time by, or from information provided
by, persons with knowledge of the activity and transactions reflected in
such records, and are kept in the course of business activity conducted
regularly by Carrington. Further, I am familiar with Carrington’s
business records maintained by Carrington which incorporate the
records of their predecessors in interest, and the prior servicers of this
mortgage loan, which are maintained and relied upon the regular
course of business by Carrington. It is the regular practice of
Carrington’s mortgage servicing business to make these records and
rely on the records from prior servicers, which are incorporated,
maintained, and relied upon in the ordinary course of business.

5. BONYM’s business records that relate to the Borrowers’ loan that I
reviewed and relied upon for the statements made in this Affidavit
include but are not limited to the Note, Certificate of Fictitious Name
Registration, Note Possession Statement, Loan Modification
Agreement, Mortgage, Assignment of Mortgage, Demand Letters,
Payment History, and Carrington’s electronic servicing system. True
and exact copies of the Note (Ex. “A-l”), Certificate of Fictitious Name
Registration (Ex. “A-2”), Note Possession Statement (Ex. “A-3”), Loan
Modification Agreement (Ex. “A-4”), Mortgage (Ex. “A-5”),
Assignment of Mortgage (Ex. “A-6”), 2013 Demand Letter (Ex. “A-7”),
2014 Demand Letter (Ex. “A-8”), and Payment History (Ex. “A-9”), are
attached hereto and incorporated herein by reference.

6. BONYM’s records contain a Note executed by Doris M. Floyd and
Willie L. Floyd htta Willie Lee Floyd in the amount of $50,850.00. The
Note is endorsed to BONYM in blank (See, Ex. A-l.) At some time
between when the Note was executed by the Borrowers on January 6,
2006 and January 17, 2006, David A. Spector, Managing Director for
Countrywide Home Loans, Inc. doing business as America’s Wholesale
Lender (See, Ex. A-2), executed a blank endorsement (See, Ex. A-l).
The Note was then transferred to BONYM, who has been in possession
of the blank endorsed Note since January 17, 2006 (See, Ex. A-3).
      Reimer Law Co. has been in custody of the original Note on behalf of
      the holder, BONYM, from December 5, 2016 and as of the date of this
      Affidavit.

      7. BONYM’s records also reflect that the Note is secured by a Mortgage
      on the real property located at 15506 Eldamere Ave., Cleveland, Ohio
      44128. The Mortgage was recorded in the Public Records of Cuyahoga
      County, Ohio as Instrument No. 200601170038. The Mortgage was
      assigned to BONYM prior to the filing of the Complaint. (See, Ex. A-5,
      A-6.).

      8. BONYM’s records also contain a Loan Modification Agreement
      dated December 28, 2009. The Loan Modification Agreement was
      recorded in the Public Records of Cuyahoga County, Ohio on
      November 4, 2011 as Instrument No. 201111040173. (See, Ex. A-4.).

      9. Borrowers have defaulted under the terms of the Note, Loan
      Modification, and Mortgage by failing to submit the payment due
      October 1, 2010 and subsequent installments. On July 23, 2013, Ditech
      on behalf of BONYM caused a Notice of Right to Cure Default to be sent
      via First Class Mail to the Borrower[s] at their notice address * * * See,
      Ex. “A-7”). Further, Ditech on behalf of BONYM issued a second Notice
      of Right to Cure Default on July 30, 2014 (See, Ex. uA-8”). The
      Borrowers’ default in payment on the Note, Loan Modification and
      Mortgage has not been cured, and Ditech on behalf of BONYM has
      accelerated the Note payments making the entire balance due and
      owing in accordance with the terms of the.

      10. The balance due on the Loan as of June 12, 2019 is the principal
      sum of $56,359.74 plus interest at 8.42% per annum from September
      1, 2010, plus sums advanced for taxes, insurance, property
      preservation, and amounts otherwise expended. (See, Ex. “A-9”).

      {¶ 33} Pursuant to Civ.R. 56(E), supporting and opposing affidavits shall:

(1) be made on personal knowledge, (2) set forth such facts as would be admissible

in evidence, and (3) show affirmatively that the affiant is competent to testify to the

matters stated in the affidavit. Olverson v. Butler, 45 Ohio App.2d 9, 340 N.E.2d

436 (10th Dist.1975); Civ.R. 56(E). “Personal knowledge” is “knowledge gained

through firsthand observation or experience, as distinguished from a belief based on
what someone else has said.” Bonacorsi v. Wheeling & Lake Erie Ry. Co., 95 Ohio

St.3d 314, 2002-Ohio-2220, 767 N.E.2d 707, ¶ 26.

      {¶ 34} “In foreclosure actions, the affidavit of a loan servicing agent

employee with personal knowledge provides sufficient evidentiary support for

summary judgment in favor of the mortgagee.” Fifth Third Mtge. Co. v. Salahuddin,

10th Dist. Franklin No. 13AP-945, 2014-Ohio-3304, ¶ 15 (affidavit of bank’s loan

servicer was sufficient for purposes of summary judgment when he averred that the

bank had been in possession of the original note since its origination and that the

defendant was in default under the terms of the note and mortgage due to a failure

to make the required payments), citing Regions Bank v. Seimer, 10th Dist. Franklin

No. 13AP-542, 2014-Ohio-95, ¶ 19 (noting that several appellate courts have found

that, in a foreclosure action, the affidavit of a loan servicing agent employee with

personal knowledge provides sufficient evidentiary support for summary judgment

in favor of the mortgagee); Bank of New York Mellon v. Putman, 12th Dist. Butler

No. CA2012-12-267, 2014-Ohio-1796, ¶ 12 (finding that a review of the case law

reveals that affidavits from servicing agents are routinely used to support a motion

for summary judgment in a foreclosure action); Chase Home, L.L.C. v. Dougherty,

10th Dist. Franklin No. 12AP-546, 2013-Ohio-1464; Deutsche Bank Natl. Trust Co.

v. Germano, 11th Dist. Portage No. 2012-P-0024, 2012-Ohio-5833; Deutsche Bank

Natl. Trust Co. v. Ingle, 8th Dist. Cuyahoga No. 92487, 2009-Ohio-3886, ¶ 18

(affidavit of bank’s loan servicing agent sufficient to show bank was the real party in

interest), and Bank of New York v. Dobbs, 5th Dist. Knox No. 2009-CA-000002,
2009-Ohio-4742, ¶ 40 (affidavit of loan servicing agent, even though not employed

by bank, sufficient to provide authentication of documents).

      {¶ 35} Here, Hovis testified that she had personal knowledge of the matters

to which she averred, and, as an employee of the loan servicing agent for the bank,

she was in the position to have such knowledge. Therefore, for these reasons, we

reject the Floyds’ argument that the trial court should have stricken Hovis’s affidavit

because she lacked the requisite personal knowledge.

      {¶ 36} We also reject the Floyds’ argument that the attached documentation

to Hovis’s affidavit constituted inadmissible hearsay.       Rather, the documents

constituted an exception to the hearsay prohibition as records of regularly

conducted activity pursuant to Evid.R. 803(6). Hearsay is any statement, other than

one which is made by the declarant at trial that is offered in evidence to prove the

truth of the matter asserted. Evid.R. 801(C). Under Evid.R. 802, hearsay is

inadmissible unless it falls within an exception provided by the rules of evidence.

Evid.R. 803(6) provides an exception to the hearsay rule for business records of

regularly conducted activity that is defined as follows:

      Records of regularly conducted activity. A memorandum, report,
      record, or data compilation, in any form, of acts, events, or conditions,
      made at or near the time by, or from information transmitted by, a
      person with knowledge, if kept in the course of a regularly conducted
      business activity, and if it was the regular practice of that business
      activity to make the memorandum, report, record, or data compilation,
      all as shown by the testimony of the custodian or other qualified
      witness or as provided by Rule 901(B)(10), unless the source of
      information or the method or circumstances of preparation indicate
      lack of trustworthiness. The term “business” as used in this paragraph
      includes business, institution, association, profession, occupation, and
      calling of every kind, whether or not conducted for profit.

      {¶ 37} Thus, to qualify for the business records exception, a record must

meet the following criteria (1) the record must be one recorded regularly in a

regularly conducted activity, (2) a person with knowledge of the act, event, or

condition recorded must have made the record, (3) it must have been recorded at or

near the time of the act, event, or condition, and (4) the party who seeks to introduce

the record must lay a foundation through testimony of the record custodian or some

other qualified witness. State v. Davis, 116 Ohio St.3d 404, 2008-Ohio-2, 880

N.E.2d 31, ¶ 171. Even when these prerequisites are met, however, the trial court

may exclude a record “if ‘the source of information or the method or circumstances

of preparation indicate [a] lack of trustworthiness.’” Id., quoting Evid.R. 803(6). A

trial court abuses its discretion when it admits a business record in the absence of

an adequate foundation to establish admissibility under Evid.R. 803(6).

      {¶ 38} Evid.R. 901 governs authentication or identification of evidence. It

states, “[t]he requirement of authentication or identification as a condition

precedent to admissibility is satisfied by evidence sufficient to support a finding that

the matter in question is what its proponent claims.” Evid.R. 901(A). Evid.R.

901(B)(1) provides that the testimony of a witness with knowledge, who testifies that

a matter is what it is claimed to be, conforms with the requirements of Evid.R. 901.

Thus, “‘any competent witness who has knowledge that a matter is what its

proponent claims may testify to such pertinent facts, thereby establishing, in whole
or in part, the foundation for identification.’” TPI Asset Mgt. v. Conrad-Eiford, 193

Ohio App.3d 38, 2011-Ohio-1405, 950 N.E.2d 1018, ¶ 13 (2d Dist.), quoting

Weissenberger’s Ohio Evidence Treatise, Section 901.2 (2010). Thus, verification

of documents attached to an affidavit supporting or opposing a motion for summary

judgment is generally satisfied by an appropriate averment in the affidavit itself, for

example, that “such copies are true copies and reproductions.”            State ex rel.

Corrigan v. Seminatore, 66 Ohio St.2d 459, 467, 423 N.E.2d 105 (1981).

      {¶ 39} There exists competent authority that a loan servicing agent may

properly authenticate copies of business records. The affidavit of the bank’s loan-

servicing agent provides a sufficient foundation for the admissibility of the relevant

loan documents as business records under Evid.R. 803(6).              Najar, 8th Dist.

Cuyahoga No. 98502, 2013-Ohio-1657, ¶ 39; Fifth Third Mtge. Co. v. Bell, 12th Dist.

Madison No. CA2013-02-003, 2013-Ohio-3678, ¶ 28 (loan servicing agent’s

affidavit properly authenticated the attached documents, including the note and

mortgage); U.S. Bank, N.A. v. Martin, 7th Dist. Mahoning No. 13 MA 107, 2014-

Ohio-3874, ¶ 34 (summary judgment affidavit of loan servicer’s employee was

sufficient to authenticate notice of intent to accelerate where affidavit stated that the

copy of the notice of intent to accelerate was a true and accurate copy of notice);

Regions Bank v. Seimer, 10th Dist. Franklin No. 13AP-542, 2014-Ohio-95, ¶ 19,

citing Dobbs, 5th Dist. Knox No. 2009-CA-000002, 2009-Ohio-4742, at ¶ 40 (even

though not employed by the bank, affidavit of bank’s loan servicing agent was

sufficient to authenticate documents). It is clear that a witness providing the
foundation for a recorded business activity need not have firsthand knowledge of

the transaction. Najar at id., citing U.S. Bank N.A. v. Wilkens, 8th Dist. Cuyahoga

No. 96617, 2012-Ohio-1038, ¶ 46, citing Moore v. Vandemark Co., Inc., 12th Dist.

Clermont No. CA2003-07-063, 2004-Ohio-4313, ¶ 18.

      {¶ 40} In light of the above, we find that Hovis properly authenticated the

copies of the business records attached to her affidavit. For all of the reasons

discussed, we find the trial court did not err when it relied upon Hovis’s affidavit in

rendering summary judgment in favor of BOYNM. Therefore, the third assignment

of error is overruled.

Charges

      {¶ 41} In their fourth assignment of error, the Floyds challenge a $414.88

charge dated June 21, 2010, and a $3,000 charge dated April 28, 2010. Although

the Floyds did raise issues as to the payment histories authenticated in BONYM’s

affidavit, they did not raise any challenge to the above-mentioned charges at the

trial-court level. It is well established that an appellant cannot raise any new issues

for the first time on appeal; the failure to raise an issue at the trial-court level waives

it on appeal. First Horizon Home Loan Corp. v. Roberts, 8th Dist. Cuyahoga No.

92367, 2010-Ohio-60, ¶ 10.

      {¶ 42} For the reasons set forth above, the fourth assignment of error is

overruled.
Unclean Hands and Judicial Estoppel

      {¶ 43} In their fifth assignment of error, the Floyds contend that the trial

court erred by not considering their affirmative defenses of unclean hands and

judicial estoppel.

      {¶ 44} In regard to judicial estoppel, that can apply to prevent a party from

taking a position in an action that is inconsistent with a position taken by the party

in a prior judicial proceeding. See Fish v. Bd. of Commrs., 13 Ohio St.2d 99, 102,

234 N.E.2d 590 (1968). However, judicial estoppel only applies where the position

was accepted by the court. Greer-Burger v. Temesi, 116 Ohio St.3d 324, 2007-Ohio-

6442, 879 N.E.2d 174, ¶ 25.

      {¶ 45} The Floyds contend that the bank was estopped from raising

arguments in this case because they were allegedly inconsistent to arguments it

made in the 2009 and 2012 foreclosure cases. As previously discussed, the dismissal

without prejudice of those cases operates as if the cases had never been filed. Thus,

those issues were not properly before the trial court in this case and there was no

error in the court declining to address them.

      {¶ 46} As it relates to their claim of unclean hands, the Floyds raised it as

both an affirmative defense and a counterclaim. In September 2016, the trial court

dismissed the Floyds’ first set of counterclaims that included a claim for unclean

hands for failure to state a claim for which relief could be granted. Their second set

of counterclaims that dealt with the same set of issues that they allege created
unclean hands, was also dismissed for failure to state a claim for which relief could

be granted on July 12, 2019.

       {¶ 47} We review rulings on Civ.R. 12(B)(6) motions to dismiss under a de

novo standard. “A motion to dismiss for failure to state a claim upon which relief

can be granted is procedural and tests the sufficiency of the complaint. * * * Under

a de novo analysis, we must accept all factual allegations of the complaint as true

and all reasonable inferences must be drawn in favor of the nonmoving party.”

NorthPoint Props. v. Petticord, 179 Ohio App.3d 342, 2008-Ohio-5996, 901 N.E.2d

869, ¶ 11 (8th Dist.). “For a trial court to grant a motion to dismiss for failure to state

a claim upon which relief can be granted, it must appear ‘beyond doubt from the

complaint that the plaintiff can prove no set of facts entitling her [or him] to relief.’”

Graham v. Lakewood, 2018-Ohio-1850, 113 N.E.3d 44, ¶ 47 (8th Dist.), quoting

Grey v. Walgreen Co., 197 Ohio App.3d 418, 2018-Ohio-6167, 967 N.E.2d 1249, ¶ 3

(8th Dist.).

       {¶ 48} Under the doctrine of unclean hands, “one who seeks equity must do

equity.” State ex rel. DeWine v. Shadyside Party Ctr., 7th Dist. Belmont No. 13 BE

26, 2014-Ohio-2357, 13 N.E.3d 684, ¶ 29, citing Basil v. Vincello, 50 Ohio St.3d 185,

553 N.E.2d 602 (1990). The doctrine of unclean hands requires that the party

invoking equity “‘not be guilty of reprehensible conduct’” regarding the subject

matter of the action. Id., quoting Basil. A foreclosure action is equitable in nature.

Buckeye Retirement Co. L.L.C. v. Walling, 7th Dist. Mahoning No. 05 MA 119,

2006-Ohio-7059, ¶ 16. “‘[T]he unclean hands doctrine should not be imposed where
a party has legal remedies available to address an opposing party’s asserted

misconduct.’” Deutsche Bank Natl. Trust Co. v. Pevarski, 187 Ohio App.3d 455,

2010-Ohio-785, 932 N.E.2d 887, ¶ 24, (4th Dist.), quoting Safranek v. Safranek,

8th Dist. Cuyahoga No. 80413, 2002-Ohio-5066.

        {¶ 49} The crux of the Floyds’ argument is that BONYM failed to timely

dismiss the 2009 foreclosure case after the Floyds entered into the loan

modification.    Under the loan modification, the Floyds “promise[d] to make

monthly payments of principal and interest of $456.64 beginning on the 1st day of

February, 2010.” A review of the Floyds’ payment history demonstrates that they

were not timely in making their payments under the loan modification. They made

sporadic payments, some being made in March 2010, then June 2010, then October

2010.

        {¶ 50} Moreover, the Floyds had legal remedies that they could have pursued

in the 2009 foreclosure action, such as opposing the bank’s motion for default

judgment, or moving to vacate the default judgment. But regardless of their claims

of impropriety in the 2009 foreclosure action, the default judgment was eventually

vacated and the case was dismissed. Likewise, the 2012 foreclosure action was

dismissed.

        {¶ 51} On this record, the fifth assignment of error is overruled.

Other Counterclaims

        {¶ 52} The sixth and final assignment of error challenges the dismissal of the

remainder of the Floyds’ counterclaims that were for (1) violating the Federal Debt
Collection Practices Act (“FDCPA” or “the Act”); (2) intentional infliction of

emotional distress based on breach of contract; (3) slander of title; (4) quiet title; (5)

punitive damages; and (6) declaratory judgment. For the reasons set forth below,

we find that the trial court properly dismissed the claims.

FDCPA

      {¶ 53} The      Act   involves    restrictions   against   false   or   misleading

representations regarding mortgage debt and the collection thereof. The general

proscription provides that “[a] debt collector may not use any false, deceptive, or

misleading representation or means in connection with the collection of any debt.”

15 U.S.C. 1692e.

      {¶ 54} The purpose of the FDCPA is to “eliminate abusive debt collection

practices by debt collectors”; it is distinguishable in its application to creditors. 15

U.S.C. 1692. A debt collector refers to “any business the principal purpose of which

is the collection of any debts * * *.” A creditor, on the other hand, refers to an entity

that “offers or extends credit creating a debt or to whom a debt is owed.”

      {¶ 55} The Floyds’ counterclaim failed as a matter of law.               It is well

established that creditors and mortgage service companies are not “debt collectors”

and are not subject to liability under the FDCPA. RBS Citizens, N.A. v. Zigdon, 8th

Dist. Cuyahoga No. 93945, 2010-Ohio-3511, ¶ 41, citing Scott v. Wells Fargo Home

Mtge. Inc., 326 F.Supp.2d 709 (E.D.Va.2003); see also Montgomery v. Huntington

Bank, 346 F.3d 693, 699 (6th Cir.2003). Thus, BONYM is not subject to the FDCPA

because it is not a debt collector as envisioned by the Act.
Intentional Infliction of Emotional Distress

      {¶ 56} The intentional infliction of emotional distress occurs when “one

who by extreme and outrageous conduct intentionally or recklessly causes serious

emotional distress to another.” Yeager v. Local Union 20, 6 Ohio St.3d 369, 453

N.E.2d 666 (1983), abrogated on other grounds, Welling v. Weinfeld, 113 Ohio

St.3d 464, 2007-Ohio-2451, 866 N.E.2d 1051. To prevail on such a claim, the Floyds

would have had to prove that: (1) BONYM either intended to cause emotional

distress, or knew or should have known that its conduct would result in serious

emotional distress to the Floyds; (2) BONYM’s conduct was so extreme and

outrageous as to go beyond all possible bounds of decency and was such that it can

be considered utterly intolerable in a civilized community; (3) the bank’s actions

proximately caused psychological injury to the Floyds; and (4) the Floyds suffered

serious emotional distress of a nature no reasonable person could be expected to

endure. Rhoades v. Chase Bank, 10th Dist. Franklin No. 10AP-469, 2010-Ohio-

6537, ¶ 15.

      {¶ 57} The Ohio Supreme Court has described “serious emotional distress”

as “emotional injury which is both severe and debilitating.” Paugh v. Hanks, 6 Ohio

St.3d 72, 78, 451 N.E.2d 759 (1983). Although the Floyds alleged that they suffered

with issues such as sleeplessness, stress, and elevated blood pressure, none of the

allegations in their counterclaims rose to the level of severe and debilitating. On this

record, their claim of intentional emotional distress failed as a matter of law.
Slander of Title

        {¶ 58} Slander of title is a tort action “against one who falsely and

maliciously defames title to property and causes some special pecuniary damages or

loss.” Acme Constr. Co. v. Continental Natl. Indemn. Co., 8th Dist. Cuyahoga No.

81402, 2003-Ohio-434, ¶ 46. To succeed on a claim for slander of title, the claimant

must prove the following “(1) there was a publication of a slanderous statement

disparaging claimant’s title; (2) the statement was false; (3) the statement was made

with malice or made with reckless disregard of its falsity; and (4) the statement

caused actual or special damages.” Green v. Lemarr, 139 Ohio App.3d 414, 430-

431, 744 N.E.2d 212 (2d Dist.2000).

        {¶ 59} In their slander of title claim, the Floyds alleged that the bank was

“claiming we were in default in September 1, 2010. Plaintiff’s payment records

reflect payments from September 2010.” BONYM’s amended complaint, alleges

that “there is due and unpaid thereon the sum of $56,359.74 plus interest at the rate

of 8.42% per annum from September 1, 2010.” Thus, according to the complaint,

the default began in October 1, 2010, and that interest is due from September 1,

2010.

        {¶ 60} Moreover, the lien on the Floyds’ title is the mortgage. The Floyds are

not contending that they did not agree to mortgage the property. The record

demonstrates that there was no false statement as to the mortgage or the assignment

of mortgage. Neither the mortgage or the assignment of mortgage caused the Floyds

damages. BONYM was the real party in interest entitled to judgment on the note
and the mortgage, the Floyds are parties to the note and the mortgage, and there

was a default in payments under those agreements. There simply was no evidence

that BONYM published untruthful allegations that the Floyds were in default of their

mortgage. Thus, the Floyds’ slander of title claim failed as a matter of law.

Quiet Title

      {¶ 61} “An action for quiet title permits a person in possession of real

property to bring an action against a person who claims an adverse interest for the

purpose of determining such adverse interest.” R.C. 5303.01. Quiet title actions are

generally used to remove a cloud on one’s title to real property and are considered

equitable in nature. Maasen v. Zopff, 12th Dist. Warren Nos. 98-10-135, 98-10-138,

and 98-12-153, 1999 Ohio App. LEXIS 3422, 11 (July 26, 1999); W.C. McBride, Inc.

v. Murphy, 111 Ohio St. 443, 447, 145 N.E. 855 (1924). “‘A cloud on the title to

property is an outstanding claim or encumbrance which, if valid, would affect or

impair the title of the owner of a particular estate, and on its face has that effect, but

can be shown by extrinsic proof to be invalid or inapplicable to the estate in

question.’” (Citation omitted.) Gasper v. Bank of Am., N.A., 9th Dist. Medina No.

17CA0091-M, 2019-Ohio-1150, ¶ 31.

      {¶ 62} The existence of defenses to a foreclosure action do not render the

mortgage itself an invalid encumbrance on the property, but rather only potentially

affect a plaintiff’s ability to foreclose on the mortgage at a particular time. This court

explained that point in Bank of N.Y. Mellon Trust Co., N.A. v. Unger, 8th Dist.

Cuyahoga No. 97315, 2012-Ohio-1950.
      {¶ 63} In Unger, the bank sued the borrowers for a default on a note and

foreclosure under a mortgage. The borrowers filed a counterclaim seeking to quiet

title on the grounds that the assignments of the note and mortgage were invalid. The

borrowers alleged that the fraudulent assignments constituted a cloud on their title.

In upholding the trial court’s ruling that the borrowers had not set forth a valid quiet

title action, this court explained as follows:

      The [borrowers] alternatively argue they are entitled to quiet title under
      R.C. 5303.01 because they are in possession of real estate, and Mellon
      claims an “adverse interest” in the property. The [borrowers] claim
      Mellon and certain other parties engaged or failed to engage in various
      activities that nullified the mortgage assignments and the mortgage.
      They are seeking to set aside the mortgage assignments and mortgage
      as a result of these activities, but they are unable to do so under R.C.
      5303.01.

      The mortgage assignments transferred the right to foreclose on the
      [borrowers’] property upon default of the note, from SouthStar, to
      Bank of New York, to Mellon. The [borrowers] voluntarily signed the
      mortgage, and agreed to a lien on their property as security for
      repayment of the note. The mortgage was properly recorded with the
      Cuyahoga County Recorder’s Office. “A mortgage is * * * nothing more
      than a lien on the premises, the purpose of which is to put other lien
      holders on notice that there is a prior claim on the premises.” R.C.
      5301.233; GMAC Mtge. Corp. v. McElroy, 5th Dist. Stark No. 2004-
      CA-00380, 2005-Ohio-2837, ¶ 16. * * *. The mortgage is not a “cloud”
      on the [borrowers’ title], and neither are the mortgage assignments.
      The [borrowers] are not, therefore, entitled to “quiet title” against
      Mellon under R.C. 5303.01.

Id. at ¶ 36-37.

      {¶ 64} The Floyds are not alleging that they did not voluntarily grant the

mortgage to secure repayment of the note or that the mortgage was not properly

recorded. They seek to quiet title based on allegations that BONYM is not in

possession of the note and did not satisfy certain conditions precedent.
      {¶ 65} Assuming the Floyds could successfully prevail on these defenses, this

would only hinder the bank’s ability to pursue foreclosure, but would not void the

mortgage. The mortgage would remain a valid encumbrance on the property to be

pursued by the actual holder of the note or by the bank at a future date upon

satisfying the conditions precedent. The purpose of a quiet title action is to remove

a cloud on a title. As explained by this court in Unger, a validly entered into and

properly recorded mortgage is not a “cloud” on a title. As there are no allegations

challenging the validity of the mortgage, just BOYNM’s ability to enforce the terms

of the mortgage, the Floyds’ counterclaim failed to state a claim for which relief may

be granted.

Punitive Damages

      {¶ 66} Pursuant to statute, a plaintiff must be awarded some measure of

compensatory damages to receive punitive damages. See R.C. 2315.21(C)(1) and (2)

(allowing punitive damages only when (1) the defendant acted with either malice or

aggravated or egregious fraud and (2) the trier of fact awards the plaintiff

compensatory damages). See Malone v. Courtyard by Marriott L.P., 74 Ohio St.3d

440, 447, 659 N.E.2d 1242 (1996) (“As we have held time and again, punitive

damages may not be awarded when a jury fails to award compensatory damages.”).

The compensatory-damages requirement prevents plaintiffs from bringing cases

solely for an award of punitive damages; they are not independent remedies.

“Punitive damages are awarded as punishment for causing compensable harm and

as a deterrent against similar action in the future. No civil cause of action in this
state may be maintained simply for punitive damages.” Bishop v. Grdina, 20 Ohio

St.3d 26, 28, 485 N.E.2d 704 (1985); see also Moskovitz v. Mt. Sinai Med. Ctr., 69

Ohio St.3d 638, 650, 635 N.E.2d 331 (1994) (“[P]unitive damages are awarded as a

mere incident of the cause of action in which they are sought. * * * Thus,

compensable harm stemming from a cognizable cause of action must be shown to

exist before punitive damages can be considered.”).

      {¶ 67} The Floyds contend that they should be awarded punitive damages

for their FDCPA, intentional infliction of emotional distress, and slander of title

claims.   However, as discussed above, those claims were properly dismissed.

Because a prerequisite for punitive damages is that compensatory damages must

first be awarded, the Floyds’ claim for punitive damages was barred.

Declaratory Judgment

      {¶ 68} Although there was no specific declaratory judgment count in their

counterclaims, the Floyds requested the trial court “to enter its judgment against

Plaintiff declaring the Mortgage, null and void, canceling the Mortgage of record;

quieting title to the property purportedly owned by Plaintiff and against Defendant

and all person claiming under Defendant.” For all the reasons discussed above, the

Floyds’ request was without merit.

      {¶ 69} The sixth assignment of error is overruled.

                                     Conclusion

      {¶ 70} The trial court did not err in overruling the Floyds’ objections to the

magistrate’s decision and adopting the magistrate’s decision granting judgment in
favor of BONYM because there were no genuine issues of material fact left for the

trial court to determine. Our de novo review of the record demonstrates that

BONYM presented the appropriate documentation to establish that (1) it is the

holder of the note and loan modification; (2) it is the assignee of the mortgage; (3)

the Floyds are in default under same; (4) that all conditions precedent have been

met; and (5) the amount owed under the note, mortgage, and loan modification

agreement.

      {¶ 71} Judgment affirmed.

      It is ordered that appellee recover from appellants costs herein taxed.

      The court finds there were reasonable grounds for this appeal.

      It is ordered that a special mandate be sent to said court to carry this judgment

into execution.

      A certified copy of this entry shall constitute the mandate pursuant to Rule 27

of the Rules of Appellate Procedure.

ANITA LASTER MAYS, PRESIDING JUDGE

LARRY A. JONES, SR., J.,* and
MARY EILEEN KILBANE, J., CONCUR

* Judge Larry A. Jones, Sr., concurred in this Journal Entry and Opinion prior to his
death on October 7, 2021.

(The Ohio Constitution requires the concurrence of at least two judges when
rendering a decision of a court of appeals. Therefore, this announcement of decision
is in compliance with constitutional requirements. See State v. Pembaur, 69 Ohio
St.2d 110, 430 N.E.2d 1331 (1982).)