[Cite as Bank of NY Mellon v. Urbanek, 2020-Ohio-985.]


                                  IN THE COURT OF APPEALS

                              ELEVENTH APPELLATE DISTRICT

                                       LAKE COUNTY, OHIO


THE BANK OF NEW YORK MELLON                              :   OPINION
f.k.a. THE BANK OF NEW YORK,
SUCCESSOR INDENTURE TRUSTEE                              :
TO JPMORGAN CHASE BANK, N.A., AS                             CASE NO. 2019-L-067
INDENTURE TRUSTEE ON BEHALF OF                           :
THE NOTEHOLDERS OF THE CWHEQ
INC., CWHEQ REVOLVING HOME                               :
EQUITY LOAN TRUST, SERIES
2006-D,                                                  :

                 Plaintiff-Appellee,                     :

        - vs -                                           :

JAMES A. URBANEK, et al.,                                :

                 Defendant-Appellant.                    :


Civil Appeal from the Lake County Court of Common Pleas, Case No. 2018 CF
001758.

Judgment: Affirmed.


James W. Sandy, McGlinchey Stafford, 3401 Tuttle Road, Suite 200, Cleveland, OH
44122 (For Plaintiff-Appellee).

David N. Patterson, P.O. Box 1423, Willoughby, OH 44096 (For Defendant-Appellant).



CYNTHIA WESTCOTT RICE, J.

        {¶1}     Appellant, James A. Urbanek, appeals the June 29, 2019 judgment of the

Lake County Court of Common Pleas granting summary judgment in favor of appellee,

The Bank of New York Mellon f.k.a. The Bank of New York, Successor Indenture
Trustee to JPMorgan Chase Bank, N.A., as Indenture Trustee on behalf of the

Noteholders of the CWHEQ Inc., CWHEQ Revolving Home Equity Loan Trust, Series

2006-D (“BONY”), and issuing a decree in foreclosure. For the reasons set forth herein,

the judgment is affirmed.

        {¶2}   In March 2006, Mr. Urbanek executed a home equity credit line agreement

(the “Note”) with non-party Aegis Funding d.b.a. Aegis Home Equity (“Aegis”) in the

amount of $185,000 and an open-ended mortgage (the “Mortgage”) (collectively, the

“Loan”) with Mortgage Electronic Registration Systems (“MERS”) as nominee for Aegis,

which granted a security interest in certain property located in Painesville, Ohio,

Permanent Parcel No. 08A024A000250 (the “Property”).

        {¶3}   The Note contained two endorsements on the last page: one from Aegis to

Aegis Mortgage Corporation, and one from Aegis Mortgage Corporation to Countrywide

Bank, N.A. An allonge contained two additional endorsements: one from Countrywide

Bank, N.A. to Countrywide Home Loans, Inc., and one from Countrywide Home Loans,

Inc. in blank. In September 2011, the Mortgage was assigned to BONY by MERS in an

Assignment of Mortgage (the “Assignment”).

        {¶4}   BONY asserts, and Mr. Urbanek does not dispute on appeal, that he

defaulted on the Loan by failing to make the agreed payments beginning in September

2010.     Accordingly, BONY accelerated the Loan and commenced the subject

foreclosure in October 2018. In May 2019, BONY filed a motion for summary judgment,

attaching in support an affidavit from Ms. Regina Irving-Francis, an Assistant Vice

President at Bank of America, N.A. (“BANA”), the servicer of the Loan. To this affidavit,

Ms. Francis attested, was attached a “true and accurate” copy of the Note, Mortgage,




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and the payment history. Mr. Urbanek responded to the motion with objections and his

own affidavit. The court ultimately granted summary judgment in BONY’s favor. Mr.

Urbanek now appeals, assigning two errors for our review.

       {¶5}    “In order to obtain summary judgment, the movant must show 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) it appears from the evidence that reasonable minds can come

to but one conclusion when viewing evidence in favor of the nonmoving party, and that

conclusion is adverse to the nonmoving party.” Grafton v. Ohio Edison Co., 77 Ohio

St.3d 102, 105, 1996-Ohio-336 (1996). Appellate courts review a trial court’s decision

to award summary judgment de novo and review the evidence without giving deference

to the trial court’s decision. Id.

       {¶6}    Furthermore, Civ.R. 56(E) sets forth the requirements for affidavits

submitted in support of summary judgment and provides, in pertinent part, that

“[s]upporting and opposing affidavits shall be made on personal knowledge. * * * [A]n

adverse party may not rest upon the mere allegations or denials of the party’s

pleadings, but the party’s response, by affidavit or as otherwise provided in this rule,

must set forth specific facts showing that there is a genuine issue for trial.”

       {¶7}    Mr. Urbanek’s first assignment of error states:

       {¶8}    Reviewing Appellee-Plaintiff’s Motion for Summary Judgment de
               novo, the record is clear and convincing that the trial court erred to
               the prejudice of the Appellant by granting the Appellee-Plaintiff’s
               Motion for Summary Judgment in favor of the Appellee.

       {¶9}    Under this assignment of error, Mr. Urbanek raises two sub-issues.

       {¶10} [1.] The Affidavit submitted by Appellee-Plaintiff was insufficient to
             warrant summary judgment and should not have been considered
             by the trial court for analyzing the motion for summary judgment
             before it.


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       {¶11} [2.] The evidence and Affidavits submitted by the Appellee-Plaintiff
             was insufficient to warrant summary judgment on the complaint as
             Appellee failed to sufficiently and properly establish that it is the
             true real party in interest and has proper standing.

       {¶12} Under this assigned error, Mr. Urbanek argues that Ms. Francis failed to

indicate if she personally observed the original, blue-ink Note and that she failed to

sufficiently establish that BONY was and remains the holder of the Note, or otherwise

was a real party in interest with standing in the instant matter. We do not find these

arguments meritorious.

      {¶13} First, we address Mr. Urbanek’s challenges to the validity and sufficiency

of BONY’s affidavit. While this court has not had the opportunity to consider whether an

affiant must state in the affidavit that he or she observed the original Note before

attesting to information contained therein, various other Ohio appellate courts have.

      {¶14} In Wachovia Bank of Delaware, N.A. v. Jackson, 5th Dist. Stark No. 2010-

CA-00291, 2011-Ohio-3203, the Fifth District Court of Appeal found that “in order to

properly support a motion for summary judgment in a foreclosure action, a plaintiff must

present evidentiary-quality materials [and] * * * the affiant must state he or she was able

to compare the copy with the original and verify the copy is accurate, or explain why this

cannot be done.” Id. at ¶40, 49.

      {¶15} The Sixth District Court of Appeals has held similarly. See HSBC Mtge.

Servs., Inc. v. Edmon, 6th Dist. Erie No. E-11-046, 2012-Ohio-4990. In Edmon, the

Sixth District reversed the lower court, which found “it immaterial regarding [the affiant]

not seeing the original Note when she made the affidavit * * *. She knew the original

was in Plaintiff's custody. She has a file copy in the file she reviewed and the original

Note was in the * * * office where they are retained.” Id. at ¶4. The Sixth District



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determined that the Civ.R. 56(E) requirement of personal knowledge “is satisfied by a

statement in the affidavit declaring that the copies of the documents submitted are true

and accurate reproductions of the originals.” Edmon, supra, ¶11, citing State ex rel.

Corrigan v. Seminatore, 66 Ohio St.2d 459 (1981).

       {¶16} We do not, however, find Seminatore to support this proposition. In that

case the Ohio Supreme Court held that, “[t]he specific allegation in the affidavit that it

was made upon personal knowledge is sufficient to meet this requirement of Civ.R.

56(E) and, if the adverse party contends otherwise, an opposing affidavit setting forth

the appropriate facts must be submitted. * * * The requirement of Civ.R. 56(E) that

sworn or certified copies of all papers referred to in the affidavit be attached is satisfied

by attaching the papers to the affidavit, coupled with a statement therein that such

copies are true copies and reproductions.” Id. at 467. Absent from this holding is any

requirement that the affiant must make express statement attesting to a review of the

original documents in order to establish personal knowledge.

       {¶17} Moreover, other Ohio appellate courts have also rejected this as a

requirement. In Wells Fargo Bank v. Hammond, 8th Dist. Cuyahoga No. 100141, 2014-

Ohio-5270, the Eighth District held that it “has not adopted this as a requirement under

Civ.R. 56(E), nor do we intend to do so because the Ohio Supreme Court has not made

this a requirement of Civ.R. 56(E).” Id. at ¶37, citing HSBC Mtge. Servs. v. Williams,

12th Dist. Butler No. CA2013-09-174, 2014-Ohio-3778. See also Wells Fargo Bank,

N.A. v. Lundeen, 8th Dist. Cuyahoga No. 107184, 2020-Ohio-28, ¶25 (finding it

sufficient that the affiant “averred that she was a bank officer, had reviewed the bank’s

business records, and had personal knowledge of their contents, * * * that the




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documents attached to her affidavit were copies of the note, mortgage, notice of default,

and merger documents.”); Hancock Fed. Credit Union v. Coppus, 3rd Dist. Seneca No.

13-15-19, 2015-Ohio-5312, ¶22 (“while [Civ.R. 56(E)] requires that documents

referenced in the affidavits be sworn or certified copies, the affiant does not need to

expressly ‘state he or she was able to compare the copy with the original and verify the

copy is accurate, or explain why this cannot be done’ * * *. Rather, ‘[t]he requirement of

Civ.R. 56(E) that sworn or certified copies of all papers referred to in the affidavit be

attached is satisfied by attaching the papers to the affidavit, coupled with a statement

therein that such copies are true copies and reproductions.’”)

       {¶18} We adopt the Third and Eighth District’s reasoning and do not find Ms.

Francis’ affidavit was deficient for failing to expressly state she viewed the original Loan

documents. It is reasonable to assume from her affidavit that she based her affidavit

upon personal knowledge and that BONY was in possession of the original documents.

       {¶19} Ms. Francis stated that “BANA typically maintains a hard-copy file of

certain loan documents, an electronic file of imaged loan documents and

correspondence, and electronic records * * *.” Mr. Urbanek points to this as evidence

that she did not review the original “blue-ink” documents. However, we do not find this

to definitively support Mr. Urbanek’s assertions. It is not unreasonable for the loan

servicer to keep copies of the documents, while the owner or holder maintains the

originals.   Indeed, Ms. Francis averred she had “access to and [has] reviewed the

records of the loan taken out by [Mr. Urbanek].”         She also averred that she has

“personal knowledge of the facts contained in this affidavit by virtue of [her] position at

BANA, [her] familiarity with certain BANA practices and procedures, and based upon




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[her] review and analysis of the relevant business records and other BANA documents

references and attached” and that “[BONY] has possession of the promissory note and

held the note at the time of filing the foreclosure complaint.” It is logical to assume from

these statements that BONY was in possession of the original documents and that Ms.

Francis had access to and reviewed the originals, even though BANA, as servicer, only

kept copies.

       {¶20} This holding aligns with similar findings of this court. In Bank of Am. v.

Merlo, 11th Dist. Trumbull No. 2012-T-0103, 2013-Ohio-5266, this Court found that to

show the bank had standing at the time the complaint was filed, the affiant need not

expressly state the bank was in possession of the “original” note, but a statement that

the bank “had possession of the note” was sufficient. This court reasoned that “[s]ince

[the affiant] did not qualify her testimony by saying the bank has possession of a copy of

the note, she was referring to the actual note itself, i.e., the original, rather than a copy.”

Id. at ¶18.

       {¶21} As Mr. Urbanek did not reference any competent evidence to contradict

Mr. Francis averments, he failed to show there remained an issue of material fact on

this matter.

       {¶22} Moreover, insofar as Mr. Urbanek argues BONY failed to establish it was

a holder with standing to enforce the Note, we also find this argument without merit. Mr.

Urbanek questions whether BONY had standing to commence this action, alleging

“bogus assignments,” “unenforceable blank endorsements,” and a “post-filing

assignment.” The record does not support his assertions.

       {¶23} Whether a plaintiff has standing to initiate a foreclosure action turns
             on whether they are a person entitled to enforce the instrument at



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              issue. * * * R.C. 1303.31(A) identifies three classes of persons who
              are ‘entitled to enforce’ an instrument, such as 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 enforce the
              instrument pursuant to R.C. 1303.38 or R.C. 1303.58(D). PNC
              Bank v. Kereszturi, 11th Dist. Trumbull No. 2014-T-0062, 2015-
              Ohio-957, ¶19 (citation omitted).

       {¶24} Civ.R. 17(A) states, in pertinent part, that “[e]very action shall be

prosecuted in the name of the real party in interest.” “In foreclosure actions, the real

party in interest is the current holder of the note and the mortgage.” Wells Fargo Bank,

N.A. v. Sessley, Franklin App. No. 09AP-178, 2010-Ohio-2902, ¶11.            “Although the

plaintiff in a foreclosure action must have standing at the time suit is commenced, proof

of standing may be submitted subsequent to the filing of the complaint.” Wells Fargo

Bank, N.A. v. Horn, 142 Ohio St.3d 416, 2015-Ohio-1484, ¶17. “Whether standing

exists is a matter of law that we review de novo.” Bank of New York Mellon v. Grund,

11th Dist. Lake No. 2014-L-025, 2015-Ohio-466, ¶25.

       {¶25} A “holder” in this context is “[t]he person in possession of a negotiable

instrument that is payable either to bearer or to an identified person that is the person in

possession.” R.C. 1301.201(B)(21)(a). “When an instrument is endorsed in blank, the

instrument becomes payable to bearer and may be negotiated by transfer of possession

alone * * *.” R.C. 1303.25(B).

       {¶26} Here, the final endorsement on the Note is in blank. Mr. Francis averred

that BONY “has possession of the promissory note and held the note at the time of filing

the foreclosure complaint.”      As discussed above, Mr. Urbanek has not sufficiently

refuted that attestation. Thus, we find BONY sufficiently established it was a holder of

the Note.



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          {¶27} Finally, Mr. Urbanek argues that “the note was severed from the mortgage

at origination, which had the effect of rendering the mortgage unenforceable as such

was subsequently assigned and endorsed.”          He argues it is clear that the original

lender, Aegis, agreed the Note would be held by Aegis and the Mortgage would remain

with the MERS. Thus, he argues, when the Note was transferred, the Mortgage did not

follow.    We find, however, no evidence in the record to suggest the note and the

mortgage were severed.

          {¶28} The Ohio Supreme Court has held that “a mortgage is not property

separate and distinct from the note which it secures, but * * * the mortgage security is

an incident of the debt which it is given to secure, and, in the absence of a specific

agreement to the contrary, passes to the assignee or transferee of such debt.” Edgar v.

Haines, 109 Ohio St. 159, 164 (1923). See also Bank of America v. Jones, 11th Dist.

Geauga No. 2014-G-3197, 2014-Ohio-4985; Bank of Am., N.A., v. Pasqualone, 10th

Dist. Franklin No. 13AP-87, 2013-Ohio-5795 (“where a note refers to the mortgage and

the mortgage refers to the note, the clear intent of the parties is to keep the note and

mortgage together.”); Deutsche Bank Natl. Trust Co. v. Najar, 8th Dist. Cuyahoga No.

98502, 2013-Ohio-1657, (“[t]he attachment of a security interest in a right to payment or

performance secured by a security interest or other lien on personal or real property is

also attachment of a security interest in the security interest, mortgage, or other lien.”);

U.S. Bank Natl. Assn. v. Marcino, 181 Ohio App.3d 328, 2009-Ohio-1178, (7th Dist.)

(“the negotiation of a note operates as an equitable assignment of the mortgage, even

though the mortgage is not assigned or delivered.”); and Section 5.4 of the Restatement

III, Property (Mortgages) (“on rare occasions a mortgagee will disassociate the




                                             9
obligation from the mortgage, but courts should reach this result only upon evidence

that the parties to the transfer agreed. Far more commonly, the intent is to keep the

rights combined, and ideally the parties would do so explicitly.”)

       {¶29} Here, Section 18A of the Note states, “[Aegis] may transfer and assign [its]

rights and obligations under this Agreement and the Mortgage at any time without [Mr.

Urbanek’s] consent.” The Note references the Mortgage and the Mortgage references

the Note, and nothing in the record suggests that any party or parties intended to sever

the two at any time. Furthermore, as discussed above, BONY has established that it

was the holder of the Note with standing to bring this action in foreclosure, and has

submitted the Assignment of Mortgage, showing it was transferred to BONY in 2011.

       {¶30} Accordingly, Mr. Urbanek’s first assignment of error is without merit.

       {¶31} Mr. Urbanek’s second assignment of error states:

       {¶32} The trial court erred to the prejudice of Appellant by granting the
             Appellee’s Motion for Summary Judgment even though the
             Appellee failed to prove that it satisfied all conditions precedent
             mandated by the National Housing Act of 1934 (12 U.S.C. § 1701
             et seq.) and 42 U.S.C. §3534(a) and rescission and other rights set
             forth in 15 U.S.C. 1635 and The Truth and Lending Act (15 U.S.C.
             §1601, et seq).

       {¶33} Under this assigned error, Mr. Urbanek argues that BONY failed to show it

complied with conditions precedent required by the United States Department of

Housing and Urban Development (“HUD”), particularly those of 24 C.F.R. § 203.602

and § 203.604, requiring giving written notice of default and conducting a face-to-face

meeting with the mortgagor before a third month’s default. BONY argues Mr. Urbanek’s

Loan was not HUD/FHA insured and thus those regulations do not apply.

       {¶34} This and other Ohio appellate courts have held that compliance with HUD

regulations is only required in cases in which the loan is HUD/FHA insured. U.S. Bank


                                            10
Nat’l Ass’n v. Martz, 11th Dist. Portage No. 2013-P-0028, 2013-Ohio-4555. Here, there

is no indication that the Loan was HUD/FHA insured. Both the Note and the Mortgage

state that these documents are “governed by federal law to the extent applicable and

that, with respect to state law, the loan * * * is made entirely within the provisions of the

Ohio Mortgage Loans Act, section 1321.51 to 1321.60 of the Ohio Revised Code.”

       {¶35} In Martz, this court found that substantially similar language in a mortgage

failed to establish that the loan was HUD/FUA insured, finding “[t]he recognition of the

fact that the mortgage, as with any business transaction occurring within the territorial

United States, is subject to federal law does not demonstrate that the mortgage is

federally insured or that federal housing regulations have otherwise been incorporated

into the agreement.” Id. at ¶16. As nothing in the Loan documents here indicate this

Loan was HUD/FUA insured, BONY was not required to comply with HUD

requirements.

       {¶36} Accordingly, Mr. Urbanek’s second assignment of error is without merit.

       {¶37} In light of the foregoing, the judgment of the Lake County Court of

Common Pleas is affirmed.


THOMAS R. WRIGHT, J.,

MARY JANE TRAPP, J.,

concur.




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