[Cite as JP Morgan Chase Bank, NA v. Ackerman, 2013-Ohio-5010.]


                                     COURT OF APPEALS
                                  RICHLAND COUNTY, OHIO
                                 FIFTH APPELLATE DISTRICT


JP MORGAN CHASE BANK, NA                       :           JUDGES:
                                               :
                                               :           Hon. W. Scott Gwin, P.J.
       Plaintiff - Appellee                    :           Hon. John W. Wise, J.
                                               :           Hon. Craig R. Baldwin, J.
-vs-                                           :
                                               :
FREDERIC W. ACKERMAN, ET AL.                   :           Case No. 13CA17
                                               :
                                               :
       Defendants - Appellants                 :           OPINION



CHARACTER OF PROCEEDING:                                   Appeal from the Richland County
                                                           Court of Common Pleas, Case No.
                                                           2011-CV-248 D


JUDGMENT:                                                  Affirmed



DATE OF JUDGMENT:                                          November 7, 2013


APPEARANCES:

For Plaintiff-Appellee                                     For Defendants-Appellants

THOMAS WYATT PALMER                                        BRUCE M. BROYLES
BRAD W. STOLL                                              5815 Market Street, Suite 2
Thompson Hine LLP                                          Boardman, OH 44512
41 S. High Street, Suite 1700
Columbus, OH 43215

STEPHEN D. WILLIGER
Thompson Hine LLP
127 Public Square
3900 Key Tower
Cleveland, OH 44114
Richland County, Case No. 13CA17                                                       2

Baldwin, J.

        {¶1}   Defendants-appellants Frederic and Jill Ackerman appeal from the

January 23, 2013 Judgment Entry Foreclosure Decree issued by the Richland County

Court of Common Pleas.

                          STATEMENT OF THE FACTS AND CASE

        {¶2}   In August of 2001, appellants Frederic and Jill Ackerman signed a Home

Equity Line of Credit Agreement with Bank One, N.A. At such time, they signed an

open end mortgage with Bank One, N.A. securing the same. The mortgage was filed for

record on September 26, 2001.

        {¶3}   Subsequently, on February 23, 2011, appellee JP Morgan Chase Bank,

N.A., the successor by merger to Bank One, N.A., filed a complaint for money and

foreclosure against appellants. Appellants filed an answer to the complaint on March 21,

2011.

        {¶4}   A bench trial commenced on October 17, 2012. At the trial, Peter

Katsikas, a home lending research officer with appellee JP Morgan Chase Bank,

identified a copy of the promissory note for appellants’ loan. He testified that both the

note and mortgage were on Bank One paper, but that appellee had merged with Bank

One on or about July of 2004. Katsikas identified a copy of the agreement to merge the

two banks under the title of JP Mortgage Chase Bank and testified that following the

merger, Bank One accounts became appellee JP Morgan Chase Bank’s records.

According to Katsikas, after the merger, appellee received the original note and

mortgage relative to appellants’ loan from Bank One and also received appellants’

payment history. He stated that appellee JP Morgan Chase Bank has held the original
Richland County, Case No. 13CA17                                                         3


note and mortgage since the merger in 2004 and that they were located in a facility in

Monroe, Louisiana. He did not have the original note with him.

      {¶5}    Katsikas also testified that if appellee JP Morgan Chase Bank was putting

a loan into a trust, the trust would go by a different name. When asked what some of

those names were, he stated that he believed the trust was known as CCP. According

to Katsikas, an acceleration warning letter was sent by Chase Home Finance LLC to

appellants in September of 2010. After the letter was sent, appellants did not try to

apply for any type of loss mitigation efforts.

      {¶6}    On cross-examination, Katsikas testified that prior to May of 2011, Chase

Home Finance LLC was a separate entity from appellee JP Morgan Chase Bank and

was the servicing agent for appellee JP Morgan Chase Bank. He further testified that

on or about January 20, 2010, appellants were advised by Chase Home Finance LLC

that their loan had been sold to CPCC Delaware Business Trust (“Chase”) and that

Chase was the new creditor of their loan. The trial court continued the hearing in order

to allow appellee to produce the original note in order to demonstrate that it possessed

the same.

      {¶7}    Appellant Frederic Ackerman testified that after he realized that his

monthly payments were becoming difficult to make, he called his local branch and was

told that refinancing was not an option and that they had to stop making payments

before any remedies were available to them. When asked what remedies would be

available if they stopped making payments, appellant Frederic Ackerman testified that

he was not sure at that moment but that “[i]t appears now that modification was a

possibility,…” Transcript at 62. He also testified that the female assistant manager at the
Richland County, Case No. 13CA17                                                    4


Chase Bank location advised them to stop making payments. The discussions occurred

at the end of 2009 or the very beginning of 2010. According to appellant Frederic

Ackerman, they continued making payments for another six months or so. On cross-

examination, he agreed that appellants stopped making regular monthly payments in

2010 and had not made payment since July of 2010.

      {¶8}    On November 21, 2012, Frank Dean, a home loan research officer with

appellee JP Morgan Chase Bank, testified that he received the original documents

regarding appellants’ loan and had brought the same to court. He testified that he was

able to determine that the documents were original because they contained original ink

signatures. He also testified, with respect to the promissory note, that “Chase

acknowledges that it is the original document by putting a squiggly mark on the front

page.” Transcript at 73.

      {¶9}    On January 23, 2013, a Judgment Entry Foreclosure Decree was filed.

Appellants now appeal from the same, raising the following assignments of error on

appeal:

      {¶10}   I. THE TRIAL COURT ERRED IN FAILING TO DISMISS THE

COMPLAINT BASED UPON THE LACK OF STANDING AS JPMORGAN CHASE

BANK NA DID NOT ESTABLISH THAT IT WAS THE HOLDER OF THE NOTE AT THE

TIME THE COMPLAINT WAS FILED.

      {¶11}   II. THE TRIAL COURT ERRED IN ALLOWING JPMORGAN CHASE

BANK, NA TO FORECLOSE UPON APPELLANTS WHEN IT INDUCED APPELLANTS

TO   DEFAULT      ON       THE   MORTGAGE    IN   ORDER     TO   OBTAIN     A   LOAN

MODIFICATION.
Richland County, Case No. 13CA17                                                            5


                                                 I

      {¶12}   Appellants, in their first assignment of error, argue that the trial court erred

in failing to dismiss the complaint because appellee JP Morgan Chase Bank, NA failed

to establish that it was the holder of the note at the time the complaint was filed and,

therefore, lacked standing. We disagree.

      {¶13}   “ ‘Standing to sue is part of the common understanding of what it takes to

make a justifiable case.’ “ Federal Home Loan Mortg. Corp. v. Schwartzwald, 134 Ohio

St.3d 13, 2012–Ohio–5017, ¶ 21, 979 N.E.2d 1214, quoting Steel Co. v. Citizens for a

Better Environment, 523 U.S. 83, 102, 118 S.Ct. 1003 (1998). In . Schwartzwald, the

Ohio Supreme Court held that a plaintiff/bank receiving an assignment of a note and

mortgage from the real party in interest subsequent to the filing of a foreclosure action,

but before the entry of judgment, does not cure a lack of standing to file the foreclosure

action. The court held that the lack of standing could not be cured by a subsequent

assignment of the note and mortgage subsequent to filing the complaint. Id. at ¶ 38 . In

Schwartzwald, the record did not establish that the plaintiff/bank was the holder of the

note or mortgage at the time the complaint was filed. As such, it “concede[d] that there

[wa]s no evidence that it had suffered any injury at the time it commenced th[e]

foreclosure action.” Id. at ¶ 28. “Thus, because it failed to establish an interest in the

note or mortgage at the time it filed suit, it had no standing to invoke the jurisdiction of

the common pleas court.” Id.

      {¶14}   In the case sub judice, there was undisputed evidence that appellee was

the holder of the note and mortgage at the time the foreclosure complaint was filed and,

therefore, had standing to file the same. There was evidence presented that appellants
Richland County, Case No. 13CA17                                                        6


signed   the note with Bank One and also signed the mortgage granting a security

interest to Bank One. There was testimony that appellee and Bank One merged in 2004

and that after the merger, Banc One’s accounts became appellee’s records. A copy of

the merger agreement was admitted as an exhibit at the trial as were documents from

the Ohio Secretary of State stating that Bank One had merged with appellee and that

Bank One had merged out of existence. In addition, Frank Dean testified that he had

received the original documents regarding appellants’ loan and had brought the same to

court. The documents had been stored in a facility in Louisiana. There was testimony

that the note had remained in appellee’s possession since the merger in 2004.

      {¶15}   Based on the foregoing, we find that appellee held the note and mortgage

by virtue of merger at the time the foreclosure complaint was filed and had standing to

foreclose. See Huntington Natl. Bank v. Hoffer, 2d Dist. Greene No. 2010–CA–31,

2011–Ohio-242, ¶ 15 (“When an existing bank takes the place of another bank after a

merger, no further action is necessary…. Since Sky Bank merged into Huntington, there

was nothing else that Huntington needed to do to become the real party in interest in

regards to Hoffer's mortgage.”).

      {¶16}   Appellants’ first assignment of error is, therefore, overruled.

                                                II

      {¶17}   Appellants, in their second assignment of error, argue that the trial court

erred in permitting appellee to foreclose when appellee induced appellants to default on

the mortgage in order to obtain a loan modification. We disagree.

      {¶18}   At the trial in this matter, appellant Frederic Ackerman testified that Bart

Ingraham from the local branch of Chase Bank told him that refinancing was not an
Richland County, Case No. 13CA17                                                        7


option and that appellants would have to stop making payments before any remedies

were available to them. He further testified that “at that moment”, he was not sure what

the remedies were but that it “appears now that modification was a possibility,…”

Transcript at 62. Appellant Frederic Ackerman also testified that an assistant branch

manager told him that they had to stop making payments for three months before

anything could be done. There is no evidence in the record that Chase told or induced

appellants to default but rather, as noted by appellee, “Chase merely explained the

requirements for a loan modification to be considered.” Moreover, Peter Katsikas

testified that after the default warning letters were sent out in September of 2010,

appellants did not try to apply for any type of loss mitigation.

      {¶19}   Based on the foregoing, we find that there was no evidence that appellee

induced appellants to default on the mortgage in order to obtain a loan modification.

      {¶20}   Appellants’ second assignment of error is, therefore, overruled.
Richland County, Case No. 13CA17                                                   8


      {¶21}    Accordingly, the judgment of the Richland County Court of Common Pleas

is affirmed.


By: Baldwin, J.

Gwin, P.J. and

Wise, J. concur.



                                       HON. CRAIG R. BALDWIN



                                       HON. W. SCOTT GWIN



                                       HON. JOHN W. WISE


CRB/dr
[Cite as JP Morgan Chase Bank, NA v. Ackerman, 2013-Ohio-5010.]


                 IN THE COURT OF APPEALS FOR RICHLAND COUNTY, OHIO

                                 FIFTH APPELLATE DISTRICT


JP MORGAN CHASE BANK, NA                           :
                                                   :
       Plaintiff - Appellee                        :
                                                   :
-vs-                                               :              JUDGMENT ENTRY
                                                   :
FREDERIC W. ACKERMAN, ET AL.                       :
                                                   :
       Defendants - Appellants                     :              CASE NO. 13CA17


       For the reasons stated in our accompanying Memorandum-Opinion, the

judgment of the Court of Common Pleas of Richland County, Ohio is affirmed. Costs

assessed to appellants.




                                              HON. CRAIG R. BALDWIN



                                              HON. W. SCOTT GWIN



                                              HON. JOHN W. WISE
