[Cite as Fifth Third Mtge. Co. v. Bihn, 2012-Ohio-637.]




        IN THE COURT OF APPEALS FOR MONTGOMERY COUNTY, OHIO

FIFTH THIRD MORTGAGE COMPANY                              :

        Plaintiff-Appellee                                :            C.A. CASE NO. 24691

v.                                                        :            T.C. NO.     10CV476

JACQUELINE S. BIHN                                        :          (Civil appeal from
aka JACQUELINE F. BIHN                                           Common Pleas Court)

        Defendant-Appellant                     :

                                                          :

                                              ..........

                                            OPINION

                         Rendered on the        17th          day of     February     , 2012.

                                              ..........

KARL H. SCHNEIDER, Atty. Reg. No. 0012881 and MARK R. METERKO, Atty. Reg.
No. 0080992, 250 Civic Center Drive, Suite 500, Columbus, Ohio 43215
       Attorneys for Plaintiff-Appellee Fifth Third Mortgage Company

TED GUDORF, Atty. Reg. No. 0034574, 8141 N. Main Street, Suite C 250, Dayton, Ohio
45415
      Attorney for Defendant-Appellant Jacqueline S. Bihn

GEORGE PATRICOFF, Atty. Reg. No. 0024506, 301 W. Third Street, 5th Floor, Dayton,
Ohio 45422
      Attorney for Defendant-Appellee Montgomery County Treasurer

DONN ROSENBLUM, Atty. Reg. No. 0016552, 150 E. Gay Street, 21st Floor, Columbus,
Ohio 43215
      Attorney for Defendant-Appellee State of Ohio Department of Taxation
CHRISTOPHER COWAN, Atty. Reg. No. 0018232, 12 W. Monument Avenue, Suite 100,
Dayton, Ohio 45402
                                                                                           2

        Attorney for Defendant-Appellee Thomas Percy


                                        ..........

DONOVAN, J.

        {¶ 1} This matter is before the Court on the Notice of Appeal of Jacqueline S. Bihn,

filed June 17, 2011. Bihn appeals from the grant of summary judgment on a complaint in

foreclosure in favor of Fifth Third Mortgage Company (“FTMC”).

        {¶ 2} On January 20, 2010, FTMC filed its complaint in part against Bihn and her

husband, Thomas J. Bihn, asserting that the Bihns executed and delivered a note, in the

amount of $135,000.00, on April 4, 1983, and that the sum of $33,136.88, with interest of

4.125% per annum from July 1, 2009, plus late charges, was due thereon. FTMC further

asserted that it is the holder and owner of a mortgage deed securing payment of the note.

Attached to the complaint are copies of the Adjustable Rate Note and Open-End Mortgage.

Citizens Federal Savings and Loan Association of Dayton (“CFSL”) is identified as the

lender on the note and as the mortgagee on the mortgage. There are no indorsements on the

note. Also attached to the complaint is an Assignment of Mortgage, executed November 23,

2009, which provides that CFSL assigned its interest in the mortgage to FTMC. The

assignment is signed by Brad Griffith, and it was recorded on November 30, 2009 as

09-079538. Finally, attached to the complaint are several notices of federal tax liens on the

property.

        {¶ 3} In their Answer, the Bihns admitted default, and as affirmative defenses they

asserted that FTMC failed to state a claim upon which relief may be granted and that FTMC

failed to join necessary parties.
                                                                                               3

       {¶ 4} Attached to FTMC’s September 10, 2010, motion for summary judgment is

the Affidavit of Josh Ross, which provides that he is an “FCL analyst” at “Fifth Third Bank”

with personal knowledge of the history of the loan at issue. Ross avers that he is the

custodian of “the records pertaining to the Note and Mortgage,” which have been maintained

in the ordinary course of business, and he avers that true copies of them are attached to the

complaint. Finally, he avers that the balance due, noted above, has been accelerated.

       {¶ 5} The Bihns opposed the motion for summary judgment on October 4, 2010,

arguing that FTMC is not the owner of the note and mortgage because the assignment of

mortgage is invalid. According to the Bihns, the assignment “purports to be signed on

behalf of an entity that ceased to exist in 1998,” and a genuine issue of material fact exists as

to whether FTMC was properly assigned the mortgage.

       {¶ 6} Attached to the memorandum in opposition is the affidavit of Thomas Bihn.

According to Bihn, he executed the note and mortgage and timely made all payments from

April 1983 until December 2009. Bihn further averred that he had a kidney transplant in

March 1996, and subsequent medical problems in 2008 prevented him from paying the taxes

on the property. Bihn asserted that he had a second kidney transplant in February 2010.

Bihn averred that a review of the records of the Ohio Secretary of State reveals that, on

December 16, 1991, CFSL changed its name to Citizens Federal Bank, FSB, (“CFB”), and

that CFB merged with Fifth Third (Western Ohio) on August 14, 1998. Bihn noted that the

assignment was allegedly executed by CFSL, assigning the mortgage to FTMC, but that

CFSL was not in existence on November 23, 2009, the date of the assignment.

       {¶ 7} FTMC filed a reply, asserting that the assignment of mortgage is valid, and
                                                                                            4

that while CFSL “underwent a series of name changes and mergers, the entity itself still held

the mortgage at the time the Assignment” was executed. According to FTMC, on the date

the assignment of mortgage was executed, CFSL was the holder of the mortgage. FTMC

further asserts, “to further clarify the record, a corrective Assignment of Mortgage fully

stating the name changes and mergers was recorded,” in the event the trial court determined

that the initial assignment was invalid. According to FTMC, the fact that it executed the

latter assignment subsequent to the filing of the complaint herein does not preclude it from

prosecuting the foreclosure action as the real party in interest.

       {¶ 8} Attached to the reply is the affidavit of Brad Griffith, which provides in part

that, “on behalf of [CFSL], as Assistant Vice President,” he executed the assignment of

mortgage from “Citizens Federal” to FTMC. According to Griffith, CFSL was renamed

CFB prior to the execution of the assignment; CFB was acquired by Fifth Third Bank,

Western Ohio prior to the execution of the assignment; and Fifth Third Bank, Western Ohio

was acquired by Fifth Third Bank prior to the execution of the assignment. Griffith avers

that he has “signing authority” on behalf of CFSL; Fifth Third Bank, Western Ohio; Fifth

Third Bank; and FTMC. Griffith avers that FTMC was the owner of the note and mortgage

prior to the execution of the assignment and filing of the complaint.

       {¶ 9} According to Griffith, on August 10, 2010, he executed an Assignment of

Mortgage to correct the initial assignment.         The assignment is attached to Griffith’s

affidavit, and it provides, at the top of the page, “Assignment being recorded to correct

assignment recorded as 09-079358.”1        The latter assignment further provides: “* * * that


           1
           As noted above, the original assignment attached to the complaint was
                                                                                         5

Fifth Third Bank successor by merger to Fifth Third Bank, Western Ohio successor by

merger to Citizens Federal Bank, FSB f/k/a Citizens Federal Savings and Loan Association

of Dayton (‘Assignor’)” assigns its interest in the mortgage at issue, together with the

promissory note referred to therein, to FTMC.        The assignment indicates that it was

recorded August 16, 2010, as 10-048841, in the Recorder’s Office, Montgomery County.

       {¶ 10} In sustaining FTMC’s motion for summary judgment, the trial court

determined that no genuine issue as to any material fact exists relative to the complaint.

The court found that the Bihns executed and delivered a mortgage on the premises known as

10585 Kley Road, Vandalia, Ohio 45377; that the mortgage was dated April 4, 1983, and

filed for record on April 6, 1983, in Volume 83-322, page C05; that the mortgage was

assigned to FTMC on August 16, 2010, in Volume 10-048841, Recorder’s Office,

Montgomery County, Ohio. Finally, the court found that FTMC had a valid lien on the

premises.

       {¶ 11} After the trial court granted the motion for summary judgment, the Bihns

filed a motion to stay execution pending appeal, which the trial court granted. We further

note that Jacqueline Bihn filed a Suggestion of Death on August 11, 2011, in which she

indicated that Thomas Bihn died on July 23, 2011. This Court granted her request that his

name be stricken from the matter, and that the action proceed in her name alone.

       {¶ 12} Jacqueline Bihn asserts two assignments of error. Her first assigned error is

as follows:

       {¶ 13} “A GENUINE ISSUE OF MATERIAL FACT EXISTS IN RESPECT TO


            recorded as 09-079538.
                                                                                             6

WHETHER FIFTH THIRD MORTGAGE COMPANY IS THE REAL PARTY IN

INTEREST.”

       {¶ 14} FTMC initially argues that Bihn’s arguments regarding whether it is the real

party in interest and has standing to enforce the note have been waived, because Bihn failed

to raise those arguments in the court below. In reply, Bihn asserts that in answer to the

complaint, she denied that the mortgage was assigned to FTMC, and she asserted in

opposition to FTMC’s motion for summary judgment that FTMC is not the “owner of Note

and Mortgage” attached to the complaint. We also note that FTMC asserted that it was the

real party in interest in its reply in support of its motion for summary judgment. For those

reasons, we will consider Bihn’s first assigned error.

       {¶ 15} Bihn asserts that FTMC “has not shown that they are the ‘holder’ of the note

or a ‘nonholder’ in possession entitled to enforce the note at anytime.” Bihn also asserts

that FTMC “filed suit on its own behalf and acquired the mortgage from [FTB] later,” on

August 10, 2010, and she directs our attention to Wells Fargo Bank, National Association v.

Byrd, 178 Ohio App.3d 285, 2008-Ohio-4603, 897 N.E.2d 722, ¶ 16 (1st Dist.), in which the

First District held that, “in a foreclosure action, a bank that was not the mortgagee when suit

was filed cannot cure its lack of standing by subsequently obtaining an interest in the

mortgage.”

               Civ. R. 56(C) provides that summary judgment may be granted when

       the moving party demonstrates that (1) there is no genuine issue of material

       fact, (2) the moving party is entitled to judgment as a matter of law, and (3)

       viewing the evidence most strongly in favor of the nonmoving party,
                                                                                           7

       reasonable minds can come to but one conclusion and that conclusion is

       adverse to the party against whom the motion for summary judgment is made.

       (Internal citations omitted). Our review of the trial court’s decision to grant

       summary judgment is de novo. Cohen v. G/C Contracting Corp., 2ND Dist.

       Greene No. 2006 CA 102, 2007-Ohio-4888, ¶ 20.

       Civ.R. 17(A) provides:

              Every action shall be prosecuted in the name of the real party in

       interest. * * * no action shall be dismissed on the ground that it is not

       prosecuted in the name of the real party in interest until a reasonable time has

       been allowed after objection for ratification of commencement of the action

       by, or joinder or substitution of, the real party in interest. Such ratification,

       joinder, or substitution shall have the same effect as if the action had been

       commenced in the name of the real party in interest.

       {¶ 16} We have previously noted, in Sugarcreek Twp. v. Centerville, 184 Ohio App.

3d 480, 2009-Ohio-4794, 921 N.E.2d 655, ¶ 42 (2d Dist.):

              The issue of standing “is a threshold question for the court to decide

       in order for it to proceed to adjudicate the action.” State ex rel. Jones v.

       Suster (1998), 84 Ohio St.3d 70, 77, 701 N.E.2d 1002. The issue of “[l]ack

       of standing challenges the capacity of a party to bring an action, not the

       subject matter jurisdiction of the court.”       Id.   To decide whether the

       requirement has been satisfied that an action be brought by the real party in

       interest, “courts must look to the substantive law creating the right being sued
                                                                                              8

       upon to see if the action has been instituted by the party possessing the

       substantive right to relief.” Shealy v. Campbell (1985), 20 Ohio St.3d 23,

       25, 20 OBR 210, 485 N.E.2d 701.

       {¶ 17} Bihn asserts that the real party in interest in foreclosure actions is the current

holder of the note and mortgage, in reliance upon Bank of America, N.A. v. Miller, 194 Ohio

App.3d 307, 2011-Ohio-1403, ¶ 25, (2d Dist.).

       {¶ 18} Promissory notes are negotiable, and they may be transferred to someone

other than the issuer. Miller, id. “‘Negotiation’ means a voluntary or involuntary transfer

of possession of an instrument by a person other than the issuer to a person who by the

transfer becomes the holder of the instrument.”     R.C. 1303.21(A). However, under R.C.

130[3].21(B), if the note is payable to an identified person, “negotiation requires transfer of

possession of the instrument and its indorsement by the holder.”

       {¶ 19} Herein, the note attached to the complaint is payable to an identified person,

namely CFSL. Only CFSL, accordingly, could have negotiated the note, by transferring

possession and either indorsing the note to a specific person or to “bearer.” “A bearer is

defined as ‘the person in possession of an instrument * * * payable to bearer or endorsed in

blank.’” Miller, id.

       {¶ 20} FTMC directs our attention to Bank of New York v. Dobbs, 5th Dist. Knox

No. 2009-CA-2, 2009-Ohio-4724, in which, as here, the plaintiff was not the original lender

and there was no evidence that the note had been indorsed or negotiated to the plaintiff.

The Fifth District held “that the assignment of a mortgage, without an express transfer of the

note, was sufficient to transfer both the mortgage and the note, if the record indicated that
                                                                                          9

the parties intended to transfer both.”        Federal Home Loan Mortgage Corp. v.

Schwartzwald, 194 Ohio App.3d 644, 2011-Ohio-2681, 957 N.E.2d 790, ¶ 54, (2d Dist.),

citing Dobbs, ¶ 31.

       {¶ 21} In Schwartzwald, this Court followed Dobbs and also declined to follow the

holding in Byrd, relied upon by Bihn. The Schwartzwalds executed a note in favor of

Legacy Mortgage and signed a mortgage granting Legacy Mortgage an interest in the

property. Freddie Mac subsequently filed a foreclosure action, alleging it was the holder of

the note, that the note was secured by a mortgage, and that the Schwartzwalds were in

default. A copy of the mortgage was attached to the complaint, but no copy of the note was

attached; Freddie Mac alleged that a copy of the note was unavailable.

       {¶ 22} Subsequently, Freddie Mac filed a copy of the note, the final page of which

was blank except for     two indorsements.     In a separate filing, Freddie Mac filed an

assignment of mortgage (after the complaint was filed), transferring the mortgage from

Wells Fargo Bank to Freddie Mac. Freddie Mac then moved for summary judgment, and it

supported its motion with an affidavit from the Vice President of Loan Documentation for

Wells Fargo, the servicing agent. At the request of the trial court, Freddie Mac filed two

assignments of mortgage, one from Legacy Mortgage to Wells Fargo, dated in 2006, and one

from Wells Fargo to Freddie Mac, dated in 2009. Both were notarized. The court then

granted leave for the Schwatzwalds to file an untimely answer, and Freddie Mac withdrew

its motion for summary judgment.

       {¶ 23} Subsequently, Freddie Mac filed a new motion for summary judgment,

supported by an affidavit from Herman Kennerty, Vice President of Loan Documentation for
                                                                                            10

Wells Fargo. Kennerty averred that he had custody of the Schwartzwalds’ account, and that

the records were kept in the regular course of Wells Fargo’s business. Kennerty averred

that Freddie Mac was the holder of the note and mortgage, and he authenticated copies of the

original note and mortgage, which were attached. The copy of the note attached to the

affidavit did not contain any indorsements.     Kennerty further authenticated the assignment

of the mortgage from Wells Fargo to Freddie Mac.

       {¶ 24} In    opposing    Freddie    Mac’s    motion    for    summary judgment,     the

Schwartzwalds argued that Freddie Mac had not established that it was the holder of the note

and the mortgagee by assignment, relying on the fact that the note attached to Kennerty’s

affidavit did not contain any indorsements or allonges. They asserted that Freddie Mac

lacked standing to prosecute the matter. According to the Schwartzwalds, on the face of the

documents attached, Legacy Mortgage was the mortgagee, and Kennerty’s affidavit did not

explain any right of Wells Fargo to assign the mortgage.

       {¶ 25} In affirming the judgment of the trial court, this Court initially noted that,

while Kennerty’s affidavit did not state that he had reviewed the documents in the

Schwartzwalds’ account, “personal knowledge may be inferred from the contents of an

affidavit.” Id., ¶ 31. This Court noted that the assignments of mortgage were filed with the

trial court, and that they were notarized and self-authenticating.

       {¶ 26} When considering Freddie Mac’s right to enforce the note, this Court noted

that R.C. 1303.31(A) identifies three classes of person who are entitled to enforce a note:

“(1) the holder of the instrument, (2) a nonholder in possession of the instrument who has

the rights of a holder, and (3) a person not in possession of the instrument who is entitled to
                                                                                           11

enforce the instrument pursuant to R.C. 1303.38 or R.C. 1303.58(D).” Id., ¶ 35. Although

Kennerty asserted that Freddie Mac was the “holder” of the note, “nothing on the note

reflected that the note was subsequently negotiated by Legacy Mortgage.” Id., ¶ 41. This

court determined, “although Freddie Mac is apparently now in possession of the note, the

lack of indorsements suggests that Freddie Mac received the note through transfer, but not

negotiation,” belying Kennerty’s assertion that Freddie Mac was the holder of the note. Id.

       {¶ 27} This court further noted, even if it were to consider the indorsements attached

to the note initially filed, there was nothing to identify the page as an allonge, “nor does

the page identify the note to which that page was allegedly affixed.” Id., ¶ 42. Further the

indorsements were in reverse order, the first being from Wells Fargo to Freddie Mac, and

the second being from Legacy Mortgage to Wells Fargo. Neither of them were dated. The

court concluded, because “there is no subsequent indorsement from Wells Fargo, the alleged

allonge does not establish that Freddie Mac was ever the holder of the note.” Id., ¶ 52.

       {¶ 28} Freddie Mac further asserted that the assignments of mortgage from Legacy

Mortgage to Wells Fargo and from Wells Fargo to Freddie Mac established its right to

“enforce the note as a nonholder in possession.” Id., ¶ 53. In reliance upon Dobbs, this

Court reviewed the assignment of mortgage from Legacy Mortgage to Wells Fargo, which

transferred all of Legacy Mortgage’s “‘rights, title and interest in and to a certain

mortgage/deed of trust to secure the debt executed by [the Schwartzwalds].’” Id., ¶ 55. This

Court further noted that the assignment from Wells Fargo to Freddie Mac stated that Wells

Fargo “does hereby sell, assign, transfer, and set over [unto] Federal Home Loan Mortgage

Corporation [the Schwartzwald’s mortgage] * * * , together with the Promissory Note
                                                                                             12

secured thereby * * * .” Id.     This Court concluded, “the assignments reflect the intent of

Legacy and Wells Fargo to convey both the mortgage and the note, along with the attendant

right to enforce the note,” and that Freddie Mac was entitled to bring the foreclosure action

as a nonholder in possession with a right to enforce the note. Id., ¶ 56.

       {¶ 29} In rejecting the view held by the First District in Byrd, that the plaintiff must

own the note and the mortgage at the time the complaint is filed, the Court determined that

“the lack of standing or a real-party-in-interest defect can be cured by the assignment of the

mortgage prior to judgment. To hold otherwise would elevate standing to a jurisdictional

defect, a position that the Ohio Supreme Court has thus far rejected.” Id., ¶ 75.

       {¶ 30} As in Dobbs, the note herein refers to the mortgage, and the mortgage, in turn

refers to the note. The mortgage provides, “TO SECURE TO Lender (a) the repayment of

the indebtedness evidenced by the Note * * * Borrower does hereby mortgage, grant and

convey to Lender the following described property * * * .” The mortgage further provides

that breach of the covenant to pay may result in acceleration of the debt and foreclosure.

       {¶ 31} The note provides in part, “I [the borrower] understand that the Lender may

transfer this Note. The Lender or anyone who takes this Note by transfer and who is

entitled to receive payments under this Note will be called the ‘Note Holder.’” The note

further provides, “In addition to the protections given to the Note Holder under this Note, a

Mortgage, dated April 4, 1983 protects the Note Holder from possible losses which might

result if I do not keep the promises which I make in this Note. That Mortgage describes

how and under what conditions I may be required to make immediate payment in full of all

amounts that I owe under this Note. * * *.”
                                                                                             13

       {¶ 32} Further, as in Schwartzwald, while the note does not establish that it was

negotiated such that FTMC is the holder thereof, the assignment of August 10, 2010,

executed by Griffith, provides that it transfers both the note and the mortgage. Bihn asserts

in her brief, “Defendants do not dispute that [FTB] had physical custody of the Note and

Mortgage.” Griffith’s affidavit, along with the assignment of mortgage, provide that Fifth

Third Bank, successor by merger to Fifth Third Bank, Western Ohio, successor by merger to

CFB, f/k/a CFSL, assigned the mortgage together with the promissory note to FTMC.

Griffith has signing authority for each of the entities in the chain of successor interests, and

we cannot conclude, as Bihn asserts, that the assignment is “invalid” such that FTMC is not

entitled to enforce the note. Further, the assignment was filed prior to judgment. In other

words, pursuant to the assignment of mortgage, FTMC is the real party in interest entitled to

prosecute the foreclosure action.

       {¶ 33} Bihn’s first assigned error is overruled.

       {¶ 34} Bihn’s second assignment of error is as follows:

       {¶ 35} “A GENUINE ISSUE OF MATERIAL FACT EXISTS IN RESPECT TO

WHETHER FIFTH THIRD BANK, THE PURPORTED ASSIGNOR OF THE

MORTGAGE, IS A SUCCESSOR IN INTEREST TO CITIZENS FEDERAL SAVINGS

AND LOAN ASSOCIATION OF DAYTON.”

       {¶ 36} Bihn relies upon Bank of America, N.A. v. Miller for the proposition that

Grifffith’s affidavit does not provide sufficient evidentiary support for the trial court’s

decision. In Miller, the defendants asserted that a genuine issue of material fact existed as

to whether Bank of America (“BOA”) was a successor in interest to Society Mortgage, the
                                                                                             14

original payee of the note and the original mortgagee of the mortgage. In support of that

assertion, BOA filed a “Notice of Filing of Merger Documentation,” attached to which were

copies of documents relating to alleged mergers of various banking entities, many of which

were of poor quality and illegible in places. Id., ¶ 8. Attached was a page entitled “Bank of

America, National Association, Certificate of Secretary,” in which a person identified as an

assistant secretary of BOA related “a history of mergers between various entities, and states

that the documents attached are true and accurate copies of documents filed with certain

states or issued by certain offices.” Id. The certificate was not notarized, and it did not

contain any indication that the matters referred to were within the assistant secretary’s

personal knowledge. Id. BOA also filed a second “Notice,” identical to the first, with

slightly more legible copies. Id.

       {¶ 37} This Court noted that the assistant secretary’s certificate did not comply with

Civ.R. 56(C), which allows summary judgment to be rendered only if competent summary

judgment evidence, as set forth in that rule, which includes affidavits, shows that there is no

genuine issue of material fact. We further noted that a “‘paper purporting to be an affidavit,

but not to have been sworn to before an officer, is not an affidavit.’ In re Disqualification of

Pokorny (1992), 74 Ohio St.3d 1238, 657 N.E.2d 1345.” Miller, ¶ 57. We concluded that

the assistant secretary’s certificate and the attached documents “cannot be used to support

summary judgment in BOA’s favor.” Id.

       {¶ 38} In contrast to the certificate in Miller, FTMC provided Ross’ sworn affidavit,

which authenticated the note and mortgage based on personal knowledge, as well as

Griffith’s affidavit relating his initial execution of the November 23, 2009 assignment of
                                                                                              15

mortgage, as well as the subsequent name changes and mergers of the various entities

involved, and his execution, as Assistant Vice President of FTB, of the attached August 10,

2010 assignment of mortgage from FTB to FTMC.                  Griffith further avers that he is

authorized to sign on behalf of each of the entities listed.    In other words, a direct chain of

succession is established between CFSL, the original mortgagee, and FTB, FTMC’s

assignor. Bihn provided no competent summary judgment evidence to refute that provided

by FTMC. Since FTB is the successor in interest to CFSL, Bihn’s second assigned error is

overruled.

       {¶ 39} There being no genuine issue of material fact, the judgment of the trial court

is affirmed.

                                          ..........

GRADY, P.J. and FAIN, J., concur.

Copies mailed to:

Karl H. Schneider
Mark R. Meterko
Ted Gudorf
George Patricoff
Donn Rosenblum
Christopher Cowan
Hon. Frances E. McGee
