[Cite as Christiana Trust v. Barth, 2017-Ohio-6924.]


STATE OF OHIO                     )                         IN THE COURT OF APPEALS
                                  )ss:                      NINTH JUDICIAL DISTRICT
COUNTY OF LORAIN                  )

CHRISTIANA TRUST, A DIVISION OF                             C.A. No.   16CA010959
WILMINGTON SAVINGS FUND
SOCIETY FSB, AS TRUSTEE FOR
NORMANDY MORTGAGE LOAN
TRUST, SERIES 2013-9                                        APPEAL FROM JUDGMENT
                                                            ENTERED IN THE
        Appellee                                            COURT OF COMMON PLEAS
                                                            COUNTY OF LORAIN, OHIO
        v.                                                  CASE No.   14 CV 184002

CARMEN BARTH, et al.

        Appellants

                                 DECISION AND JOURNAL ENTRY

Dated: July 24, 2017



        TEODOSIO, Judge.

        {¶1}     Valerie Barth appeals from the judgment entry of the Lorain County Court of

Common Pleas adopting the magistrate’s decision, overruling the objections thereto, and

granting judgment in favor of Christiana Trust, a Division of Wilmington Savings Fund Society

FSB, as Trustee for Normandy Mortgage Loan Trust, Series 2013-9 (“Christiana Trust”). This

Court affirms.

                                                       I.

        {¶2}     In 2002, a promissory note was signed by Carmen J. Barth and secured by a

mortgage on the subject property, which was signed by Carmen, Carol, and Valerie Barth.

CitiFinancial Mortgage Company, Inc. (“CitiFinancial”) was the original holder of the note and

mortgage. In August 2013, CitiMortgage, Inc., successor by reason of merger to CitiFinancial,
                                                2


assigned the mortgage to Christiana Trust. After Christiana Trust acquired the subject loan,

Carrington Mortgage Services acted as the servicer until June 2014, when Selene Finance, LP,

took over as the servicer of the loan. A complaint in foreclosure was filed by Christiana Trust in

July 2014, and a trial was held before a magistrate in 2016, who subsequently issued a decision

granting the foreclosure. On May 4, 2016, the trial court overruled objections and adopted the

magistrate’s decision. Valerie Barth now appeals, raising two assignments of error.

                                                II.

                               ASSIGNMENT OF ERROR ONE

       THE TRIAL COURT ERRED BY GRANTING A JUDGMENT OF
       FORECLOSURE BASED UPON UNAUTHENTICATED HEARSAY
       EVIDENCE THAT DID NOT QUALIFY UNDER THE BUSINESS RECORDS
       EXCEPTION.

       {¶3}    In her first assignment of error, Ms. Barth argues that the trial court erred by

granting judgment based upon inadmissible records. She contends the records were not properly

authenticated and did not qualify under the business records exception to hearsay. We disagree.

Specifically, Ms. Barth questions the authentication and admission of the note, the mortgage, the

assignment of the mortgage, a corporate resolution from CitiMortgage to Orion, and the payment

history. For the purposes of analysis, we will begin by addressing the first four documents; the

payment history will be discussed separately thereafter.

       {¶4}    “The admission or exclusion of relevant evidence rests within the sound

discretion of the trial court.” State v. Sage, 31 Ohio St.3d 173 (1987), paragraph two of the

syllabus. A trial court is afforded broad discretion in admitting evidence and we will not reject

an exercise of this discretion unless it has clearly been abused and the appealing party has

thereby suffered material prejudice. Packard v. Packard, 9th Dist. Summit No. 19870, 2000 WL

1729459, *2 (Nov. 22, 2000); accord State v. Long, 53 Ohio St.2d 91, 98 (1978). An abuse of
                                                 3


discretion is more than an error of judgment; it means that the trial court was unreasonable,

arbitrary, or unconscionable in its ruling. Blakemore v. Blakemore, 5 Ohio St.3d 217, 219,

(1983). When applying this standard, a reviewing court is precluded from simply substituting its

own judgment for that of the trial court. Pons v. Ohio State Med. Bd., 66 Ohio St.3d 619, 621

(1993).

          {¶5}   We first address the issue of authentication. Evid.R. 901(A) provides: “The

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.” As to the self-authenticating documents enumerated under Evid.R. 902,

“[e]xtrinsic evidence of authenticity as a condition precedent to admissibility is not required.” In

the case before us, the certified copies of the mortgage and the assignment of mortgage admitted

into evidence are self-authenticating under Evid.R. 902(4), which provides for the self-

authentication of certified copies of public records.

          {¶6}   With regard to the promissory note, the original note was introduced into

evidence at trial by Christiana Trust. Carmen Barth, who signed the note in question, was not

present for trial, and therefore was not available to be examined as a witness or to authenticate

the promissory note or the signature upon it. Consequently, Christiana Trust moved to separate

the trial as to the issue of Carmen Barth’s default on the note, which was denied by the trial

court.

          {¶7}   The original note was identified at trial by Eric Wheeler, a case manager with

Selene Finance—the servicer of the subject loan. He testified that he had personal access to the

subject loan file, which contained the original note, and that he was familiar with it. He further

testified that Christiana Trust had possession of the original note and allonge on the date the
                                                4


complaint was filed, and that the copies of the note and allonge attached to the complaint were

true and accurate copies of the originals.      Ms. Barth made no claims that the presented

promissory note was not the one signed by Carmen Barth or that the note contained different

terms, nor did Ms. Barth produce any evidence that the note was not what it was purported to be.

Mr. Wheeler also identified the corporate resolution from CitiMortgage to Orion as part of the

subject loan file. Ms. Barth did not question the authenticity of the corporate resolution from

CitiMortgage to Orion, which was stamped with the seal of CitiMortgage, Inc. as evidence that

the document was, in fact, what it was purported to be. Again, Ms. Barth presented no evidence

to the contrary.

       {¶8}    We reiterate that a trial court is afforded broad discretion in admitting evidence

and we will not reject an exercise of this discretion unless it has clearly been abused and the

appealing party has thereby suffered material prejudice. Ms. Barth objected to the introduction

of the note and the corporate resolution into evidence on the basis that Mr. Wheeler did not lay a

proper foundation as to his knowledge of Christiana Trust’s or CitiMortgage’s business records;

the objection was not based upon an argument that the original note produced by Christiana

Trust was not the authentic original note or that the corporate resolution was not authentic. At

trial, Ms. Barth had the opportunity to present evidence to challenge the authenticity or accuracy

of the admitted documents. In the absence of any such argument, we cannot conclude Ms. Barth

was materially prejudiced by their admission into evidence.        Neither can we, under these

circumstances, conclude the trial court abused its discretion in finding the original promissory

note and the corporate resolution properly authenticated.

       {¶9}    We next turn to Ms. Barth’s argument regarding the alleged hearsay documents

and the business records exception to hearsay.       Pursuant to Ohio Rule of Evidence 801,
                                                5


“‘[h]earsay’ is a statement, other than one made by the declarant while testifying at the trial or

hearing, offered in evidence to prove the truth of the matter asserted.”         “Hearsay is not

admissible except as otherwise provided * * * by [the Ohio Rules of Evidence].” Evid.R. 802.

The Rules of Evidence enumerate multiple exceptions to the rule that hearsay is inadmissible,

including the “business records exception.” Evid.R. 803.

       {¶10} First, we recognize that the note, the mortgage, the assignment of the mortgage,

and the corporate resolution from CitiMortgage to Orion are not hearsay. These documents were

not offered to prove the truth of the matters asserted therein; rather, they “were offered to prove

that persons engaged in transactions creating legal rights and responsibilities.” Wells Fargo

Bank v. Maxfield, 12th Dist. Butler No. CA2016-05-089, 2016-Ohio-8102, ¶ 40. The Staff Note

to Evid.R. 801(C) recognizes this distinction by providing: “Words constituting conduct are not

hearsay, e.g., words of a contract * * * and the like.” Here, the note is a contract and the

mortgage, the assignment of mortgage, and the corporate resolution are contract-like in that they

all create legal rights and responsibilities. See Maxfield at ¶ 40. Additionally, the mortgage, the

assignment of mortgage, and the statements contained therein are excepted from the hearsay rule

under Evid.R. 803(14) and (15) as records of documents affecting an interest in property and

statements in documents affecting an interest in property. Id.

       {¶11} We now turn to the issue of the payment history.             Ms. Barth argues that

authentication was not proper because the witness, Eric Wheeler, did not have the requisite

personal knowledge. Ms. Barth further argues the payment history was not admissible under the

business records exception to the hearsay rule. The payment history, introduced as Plaintiff’s

Exhibit 5, contains account activity statements for Selene Finance, Carrington Mortgage

Services, and CitiMortgage, Inc.
                                                6


        {¶12} With regard to the business records exception to the hearsay rule, Evid.R. 803(6)

provides that records of regularly conducted business activity are an admissible form of hearsay,

stating in pertinent part:

        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.

“To qualify for admission under Evid.R. 803(6), a business record must manifest four essential

elements: (i) the record must be one regularly recorded in a regularly conducted activity; (ii) it

must have been entered by a person with knowledge of the act, event or condition; (iii) it must

have been recorded at or near the time of the transaction; and (iv) a foundation must be laid by

the custodian of the record or by some other qualified witness.” PNC Bank, N.A. v. West, 9th

Dist. Wayne No. 12CA0061, 2014-Ohio-161, ¶ 12. The theory supporting the business records

exception is that such records are accurate and trustworthy because they are “made in the regular

course of business by those who have a competent knowledge of the facts recorded and a self-

interest to be served through the accuracy of the entries made and kept with knowledge that they

will be relied upon in a systematic conduct of such business[.]” Weis v. Weis, 147 Ohio St. 416,

425-426 (1947).

        {¶13} Pursuant to Evid.R. 901(B)(10), “authentication of business records * * * is

governed by Evid.R. 803(6).” Great Seneca Fin. v. Felty, 170 Ohio App.3d 737, 2006–Ohio–

6618, ¶ 9 (1st Dist.); see also State v. Quarles, 2d Dist. Clark No. 2014CA72, 2015-Ohio-3050, ¶

38. Therefore, proper authentication of a business record under Evid.R. 901(A) requires that a

proponent of a document produce evidence sufficient to support a finding that the matter in
                                                 7


question is what the proponent claims it to be, and to accomplish this, a witness must testify as to

the regularity and reliability of the business activity involved in the creation of the record. State

v. Cassano, 8th Dist. Cuyahoga No. 97228, 2012-Ohio-4047, ¶ 24; accord Quarles at ¶ 38. A

witness authenticating a business record must be “‘familiar with the operation of the business

and with the circumstances of the preparation, maintenance, and retrieval of the record in order

to reasonably testify on the basis of this knowledge that the record is what it purports to be, and

was made in the ordinary course of business.’” State v. Baker, 9th Dist. Summit No. 21414,

2003–Ohio–4637, ¶ 11, quoting Keeva J. Kekst Architects, Inc. v. George, 8th Dist. Cuyahoga

No. 70835, 1997 WL 253171, *5 (May 15, 1997). Evid.R. 803(6) does not require personal

knowledge of the exact circumstances of the preparation and production of the document or of

the transaction giving rise to the record. Bank of America, N.A. v. Jackson, 12th Dist. Warren

No. CA2014-01-018, 2014–Ohio–2480, ¶ 12.

        {¶14} Mr. Wheeler testified that he was a case manager with Selene Finance, the

servicer of the subject loan. He testified that he had personal access to the subject loan file and

that he was familiar with it. He testified that the loan file contained the original note with

allonge, the mortgage with assignment, the payment history, merger documents, and corporate

resolution documents. Mr. Wheeler also testified that Christiana Trust had possession of the

original note and allonge on the date the complaint was filed, and that the copies of the note and

allonge attached to the complaint were true and accurate copies of the originals. He identified

the certified copy of the mortgage produced at trial and testified that based upon his review of

the loan file and his own personal knowledge, Christiana Trust satisfied all conditions precedent

prior to initiating the foreclosure action.
                                                8


       {¶15} Mr. Wheeler testified that Plaintiff’s Exhibit 5 was a true and accurate copy of the

payment history of the subject account as it appeared in Christiana Trust’s business records for

the subject loan, and that based upon his review of the document, Carmen Barth was currently in

default pursuant to the terms of the subject loan and mortgage. He testified that the unpaid

principal balance was currently $72,475.88. We note there is also uncontroverted testimony that

the mortgage was breached when Carmen Barth’s interest in the property was sold to Valerie and

Carol Barth.

       {¶16} With regard to the payment history documents from Selene Finance, as servicer

for Christiana Trust, Mr. Wheeler testified that he was familiar with the policies and procedures

for Christiana Trust’s recordkeeping practices through the performance of his job duties. He

testified that, based upon his personal knowledge, the business records were kept in the course of

Christiana Trust’s regularly conducted business activities and were created by them as a regular

practice. He testified that based upon his personal knowledge, the records contained within the

loan file were made at or near the time of the occurrence of the matters and were recorded by

persons with personal knowledge of the information in the business record or from information

transmitted by persons with personal knowledge. He also testified that he was familiar with the

recordkeeping practices of Carrington Mortgage Services.

       {¶17} We conclude that the trial court did not abuse its discretion in considering the

payment history as it relates to Selene Finance as servicer for Christiana Trust. The trial court

was not unreasonable, arbitrary, or unconscionable in its ruling to admit the evidence, as Mr.

Wheeler provided testimony to properly authenticate the documents and to support the four

essential elements for admission under Evid.R. 803(6).
                                                  9


       {¶18} In support of a foreclosure action, a plaintiff must present evidence showing: (1)

the movant is the holder of the note and mortgage, or is a party entitled to enforce the instrument;

(2) if the movant is not the original mortgagee, the chain of assignments and transfers; (3) the

mortgagor is in default; (4) all conditions precedent have been met; and (5) the amount of

principal and interest due. Deutsche Bank Natl. Trust Co. v. James, 9th Dist. Summit No. 28156,

2016-Ohio-7950, ¶ 8.

       {¶19} Plaintiff’s burden of proof at trial was a preponderance of the evidence. See

Merrick v. Ditzler, 91 Ohio St. 256, 260 (1915). Plaintiff presented evidence in support of all

elements of its claim, and the trial court, as the trier of fact, was best situated to evaluate the

credibility and weight of the evidence. See In re KR.E., K.E., & A.E., 9th Dist. Lorain No.

06CA008891, 2006–Ohio–4815, ¶ 19. The trial court had before it a self-authenticated note and

mortgage, a self-authenticated assignment of mortgage, and testimony that the mortgagor was in

default and that all condition precedents were met. The customer account activity statement

documents from Selene Finance provided evidence that the subject loan was in default, that no

payments were being made, and that the current balance was $72,475.88. It was not necessary

for the trial court to rely on the payment history documents for Carrington Mortgage Services or

CitiMortgage, Inc. in making its determination.

       {¶20} During the bench trial before the magistrate, Ms. Barth had the opportunity to

present evidence to contradict or challenge the veracity of the testimony and exhibits presented

by Christiana Trust; however, she presented no evidence to the contrary. Ms. Barth has failed to

show that the trial court’s judgment relied upon inadmissible records, and consequently, Ms.

Barth is unable to show prejudice.

       {¶21} Ms. Barth’s first assignment of error is overruled.
                                                10


                               ASSIGNMENT OF ERROR TWO

       THE TRIAL COURT ERRED IN FINDING THAT APPELLEE WAS
       ENTITLED TO ENFORCE THE NOTE AND MORTGAGE OR TO
       FORECLOSE.

       {¶22} In her second assignment of error, Ms. Barth argues that the trial court erred when

it held that the law does not require that an allonge be “permanently” affixed to the note. We

disagree.

       {¶23} In the present case, there is evidence that the allonge to the note was attached by a

paperclip rather than by a staple. Ms. Barth argues that an allonge must be “permanently”

affixed, but provides no case law that supports the proposition, and the cases cited to by Ms.

Barth, discussed below, set forth no such requirement.

       {¶24} In HSBC Bank USA, N.A. v. Thompson, 2d Dist. Montgomery No. 23761, 2010-

Ohio-4158, ¶ 64-65, the Second District Court of Appeals merely noted that Ohio has adopted

revisions to the UCC that changed “firmly affixed” to simply “affixed,” and that R.C.

1303.24(A)(2) “requires that a paper be affixed to an instrument in order for a signature to be

considered part of the instrument.” The Thompson court made no determination of the meaning

of affixed, and engaged in no discussion as to permanency. Moreover, unlike the case before us,

in Thompson, “no evidence was presented * * * to indicate that the allonges were ever attached

or affixed to the promissory note. Instead, the allonges [were] presented as separate, loose sheets

of paper, with no explanation as to how they may have been attached.” Id. at ¶ 67. In Wells

Fargo Bank N.A. v. Freed, 3d Dist. Hancock No. 5-12-01, 2012-Ohio-5941, ¶ 25, also cited by

Ms. Barth, the court cited to Thompson for the proposition of law requiring an allonge to be

affixed to the instrument, and noted that the allonge in their present case “was merely attached to
                                                11


the file folder” rather than to the note itself. The Freed court did not engage in a discussion of

permanency.

       {¶25} Not only are both cases distinguishable from our present case whereby the allonge

was affixed with a paperclip, but neither case supports Ms. Barth’s argument that an allonge

must be permanently affixed to a note. R.C. 1303.24 provides: “For the purpose of determining

whether a signature is made on an instrument, a paper affixed to the instrument is a part of the

instrument.” There is no additional requirement of “permanency.” The trial court’s statement

that the law does not require an allonge to be permanently affixed to an instrument is not

contrary to the law of Ohio, and the court did not err in its conclusion. Therefore, Ms. Barth’s

second assignment of error is overruled.

                                                III.

       {¶26} Ms. Barth’s assignments of error are overruled. The judgment of the Lorain

County Court of Common Pleas is affirmed.

                                                                              Judgment affirmed.




       There were reasonable grounds for this appeal.

       We order that a special mandate issue out of this Court, directing the Court of Common

Pleas, County of Lorain, State of Ohio, to carry this judgment into execution. A certified copy of

this journal entry shall constitute the mandate, pursuant to App.R. 27.

       Immediately upon the filing hereof, this document shall constitute the journal entry of

judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the

period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is
                                                12


instructed to mail a notice of entry of this judgment to the parties and to make a notation of the

mailing in the docket, pursuant to App.R. 30.

       Costs taxed to Appellants.




                                                     THOMAS A. TEODOSIO
                                                     FOR THE COURT



HENSAL, P. J.
CALLAHAN, J.
CONCUR.


APPEARANCES:

MARC E. DANN, EMILY WHITE, and WILLIAM BEHRENS, Attorneys at Law, for
Appellants.

MATTHEW W. FABER and JOSHUA J. EPLING, Attorneys at Law, for Appellee.
