Court Opinion

ID: 2702270
Source: CourtListenerOpinion
Date Created: 2014-08-04 19:48:47.819272+00
Date Added: 2024-06-11T11:58:17.179415
License: Public Domain

[Cite as Daniely v. Accredited Home Lenders, 2013-Ohio-4373.]

                Court of Appeals of Ohio
                              EIGHTH APPELLATE DISTRICT
                                 COUNTY OF CUYAHOGA

                             JOURNAL ENTRY AND OPINION
                                      No. 99208

                                  MONICA DANIELY
                                                          PLAINTIFF-APPELLANT

                                                    vs.

              ACCREDITED HOME LENDERS, ET AL.
                                                          DEFENDANTS-APPELLEES

                                          JUDGMENT:
                                           AFFIRMED

                                     Civil Appeal from the
                            Cuyahoga County Court of Common Pleas
                                     Case No. CV-789457

        BEFORE: E.T. Gallagher, J., Jones, P.J., and Kilbane, J.

        RELEASED AND JOURNALIZED: October 3, 2013
FOR APPELLANT

Monica Daniely, pro se
16781 Chagrin Blvd., Suite 197
Shaker Heights, Ohio 44120

ATTORNEYS FOR APPELLEES

Melissa Zujkowski
Warren T. McClurg, II
Ulmer & Berne, LLP
Skylight Office Tower
1660 West 2nd St., Suite 1100
Cleveland, Ohio 44113

Accredited Home Lenders
15090 Avenue of Science
San Diego, California 92128
EILEEN T. GALLAGHER, J.:

       {¶1} Plaintiff-appellant, Monica Daniely (“Daniely”), appeals the dismissal of her

complaint against defendants-appellees, Accredited Home Lenders, HSBC Mortgage

Services    (“HSBC”),       and    Mortgage      Electronic     Registration     Systems,     Inc.

(“MERS”)(collectively referred to as “appellees”) pursuant to Civ.R. 12(C). We find no

merit to the appeal and affirm.

       {¶2} Daniely entered into a mortgage loan with Accredited Home Lenders,

HSBC’s predecessor-in-interest, for property located at 4650 Whitehall Road, South

Euclid, Ohio 44121.       The mortgage was duly recorded with the Cuyahoga County

Recorder’s Office and shows MERS as the nominee for the lender and the lender’s

successors and assigns.

       {¶3} According to the complaint, MERS later assigned the mortgage to HSBC and

instructed Daniely to make payments to HSBC.                  Daniely requested a declaratory

judgment declaring that she is not obligated to make mortgage payments to HSBC

because HSBC violated R.C. 5301.25 by failing to record its encumbrance on the property

with the Cuyahoga County Recorder’s Office.             As a result, she alleged, “HSBC is

committing fraud by demanding and accepting payments” from her.1 The complaint also

           Daniely used the word “fraud” in the complaint. In her response to appellees’ motion for
       1

judgment on the pleadings, she denies asserting a fraud claim and explained that she is simply
alleging a claim for unjust enrichment, arguing that “HSBC is unjustly enriched by demanding and
alleged that “MERS Terms And [sic] Conditions prohibit it from exerting any actions

and/or authority over Promissory Notes and Payments.”

       {¶4} HSBC and MERS filed a motion for judgment on the pleadings pursuant to

Civ.R. 12(C), arguing that the complaint failed to state a claim for relief. The trial court

granted the motion and dismissed the complaint. This appeal followed.

       {¶5} In her sole assignment of error, Daniely argues the trial court erred in

dismissing her complaint for declaratory judgment because HSBC has no right to demand

mortgage payments from her.

       {¶6} We review a ruling on a motion for judgment on the pleadings de novo.

Coleman v. Beachwood, 8th Dist. Cuyahoga No. 92399, 2009-Ohio-5560, ¶ 15. Motions

for judgment on the pleadings are governed by Civ.R. 12(C), which states: “After the

pleadings are closed but within such time as not to delay the trial, any party may move for

judgment on the pleadings.” Unlike a motion for summary judgment where the parties

are permitted to submit certain evidentiary materials for the court’s review, the

determination of a motion for judgment on the pleadings is restricted solely to the

allegations in the pleadings and any writings attached to the complaint. Peterson v.

Teodosio, 34 Ohio St.2d 161, 165-166, 297 N.E.2d 113 (1973).

       {¶7} Civ.R. 12(C) requires a determination that no material factual issues exist and

that the movant is entitled to judgment as a matter of law. Burnside v. Leimbach, 71

Ohio App.3d 399, 403, 594 N.E.2d 60 (1991).

receiving mortgage payments to which they are not entitled.”
        Under Civ.R. 12(C), dismissal is appropriate where a court (1) construes the
        material allegations in the complaint, with all reasonable inferences to be drawn
        therefrom, in favor of the nonmoving party as true, and (2) finds beyond doubt,
        that the plaintiff could prove no set of facts in support of his claim that would
        entitle him to relief.

State ex rel. Midwest Pride IV, Inc. v. Pontious, 75 Ohio St3d 565, 570, 664 N.E.2d 931

(1996).

        {¶8} Thus, the granting of judgment on the pleadings is only appropriate where the

plaintiff has failed to allege a set of facts which, if true, would establish the defendant’s

liability.    Chromik v. Kaiser Permanente, 8th Dist. Cuyahoga No. 89088,

2007-Ohio-5856, ¶ 8, citing Walters v. First Natl. Bank of Newark, 69 Ohio St.2d 677,

433 N.E.2d 608 (1982).

        {¶9} Daniely argues MERS lacked authority to assign the mortgage to HSBC and

that, therefore, HSBC has no right to receive mortgage payments from her. Daniely cites

numerous out-of-state cases in support of her argument. However, we are not bound by

authorities outside of our jurisdiction. Moreover, Ohio courts have consistently held that

MERS has authority to assign a mortgage when it is designated as both a nominee and

mortgagee.     BAC Home Loans Servicing, L.P. v. Hall, 12th Dist. Warren No.

CA2009-10-135, 2010-Ohio-3472, ¶ 5-25 (concluding that BAC was entitled to judgment

as the real party in interest where MERS, as a nominee, assigned the mortgage at issue to

BAC); Countrywide Home Loans Servicing, L.P. v. Shifflet, 3d Dist. Marion No. 9-09-31,

2010-Ohio-1266, ¶9-17 (concluding that Countrywide was entitled to judgment as the real

party in interest where MERS, as a nominee, assigned the mortgage to Countrywide);
Deutsche Bank Natl. Trust Co. v. Ingle, 8th Dist. Cuyahoga No. 92487, 2009-Ohio-3886,

¶ 4-18 (concluding Deutsche was entitled to judgment as the real party in interest where

MERS, as a nominee, assigned a mortgage deed to Deutsche).

       {¶10} Although Daniely failed to attach a copy of the mortgage to the complaint,2

she concedes the mortgage designates MERS as the mortgagee, “solely as nominee for

Lender.” Under Ohio law, MERS had authority to assign the mortgage to HSBC, and

Daniely is obligated to make her mortgage payments to HSBC rather than Accredited

Home Lenders, the original lender.

       {¶11} Daniely also argues that, pursuant to R.C. 5301.25, HSBC is not entitled to

payment from her because it failed to properly record its mortgage on the property. R.C.

5301.25 provides, in relevant part:

        (A) All deeds, land contracts referred to in division (A)(2)(b) of section
       317.08 of the Revised Code, and instruments of writing properly executed
       for the conveyance or encumbrance of lands, tenements, or hereditaments,
       other than as provided in division (C) of this section and section 5301.23 of
       the Revised Code, shall be recorded in the office of the county recorder of
       the county in which the premises are situated. Until so recorded or filed
       for record, they are fraudulent insofar as they relate to a subsequent bona
       fide purchaser having, at the time of purchase, no knowledge of the
       existence of that former deed, land contract, or instrument.

(Emphasis added.)

           The court may not consider the unauthenticated copy of the mortgage attached to
       2

appellees’ motion for judgment on the pleadings because, as previously explained, the determination
of a motion for judgment on the pleadings is restricted solely to the allegations in the pleadings and
any writings attached to the complaint. Peterson v. Teodosio, 34 Ohio St.2d at 165-166.
       {¶12} The purpose of recording mortgages and other encumbrances on property is

to give notice to bona fide purchasers of the mortgage holder’s lien. In this way, the

lienholder may claim that all subsequent purchasers of the property have been

constructively notified of the lien. R.C. 5301.25 provides that if a lienholder fails to

record an encumbrance on real property, the lienholder will not have the benefit of being

able to claim constructive notice of the lien against a subsequent purchaser.           The

recorded mortgage also protects the lienholder by giving the lienholder priority of interest

in the secured property.     See, e.g., Swallie v. Rousenberg, 190 Ohio App.3d 473,

2010-Ohio-4573, 942 N.E.2d 1109 (7th Dist.).           R.C. 5301.25 has no effect on a

mortgagor’s obligation to pay the mortgagee, whether or not the mortgage was recorded.

       {¶13} Therefore, Daniely failed to state a claim for relief, and the trial court

properly dismissed the complaint pursuant to Civ.R. 12(C).

       {¶14} The sole assignment of error is overruled.

       {¶15} Judgment affirmed.

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

       The court finds there were reasonable grounds for this appeal.

       It is ordered that a special mandate be sent to the common pleas 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.
EILEEN T. GALLAGHER, JUDGE

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