[Cite as Wells Fargo Bank NA v. Arlington, 2013-Ohio-4659.]


                                      COURT OF APPEALS
                                  DELAWARE COUNTY, OHIO
                                  FIFTH APPELLATE DISTRICT


WELLS FARGO BANK NA                                 :    JUDGES:
                                                    :
                                                    :    Hon. William B. Hoffman, P.J.
       Plaintiff-Appellee                           :    Hon. Sheila G. Farmer, J.
                                                    :    Hon. Patricia A. Delaney, J.
-vs-                                                :
                                                    :    Case No. 13CAE030016
                                                    :
DEAN ARLINGTON, ET AL.                              :
                                                    :
                                                    :
       Defendant-Appellant                          :    OPINION


CHARACTER OF PROCEEDING:                                 Appeal from the Delaware County Court
                                                         of Common Pleas, Case No. 2008 CVE
                                                         01 0048



JUDGMENT:                                                AFFIRMED




DATE OF JUDGMENT ENTRY:                                  October 16, 2013




APPEARANCES:

For Plaintiff-Appellee:                                  For Defendant-Appellant:

SCOTT A. KING                                            BRUCE M. BROYLES
JASON P. BICHSEL                                         5815 Market St., Suite 2
Austin Landing I                                         Boardman, OH 44512
10050 Innovation Drive, Suite 400
Miamisburg, OH 45342
Delaware County, Case No. 13CAE030016                                                   2

Delaney, J.

       {¶1} Defendant-Appellant Dean Arlington appeals the March 7, 2013 judgment

entry of the Delaware County Court of Common Pleas.

                        FACTS AND PROCEDURAL HISTORY

       {¶2} On March 3, 2006, Defendant-Appellant Dean Arlington executed a Note

in favor of Taylor, Bean & Whitaker Mortgage Corp (“TBW”). To secure repayment on

the Note, Arlington executed a Mortgage in favor of Mortgage Electronic Registration

Systems, Inc. (“MERS”), as nominee for TBW and its successors and assigns. On

March 20, 2007, MERS assigned the Mortgage to Plaintiff-Appellee Wells Fargo Bank,

N.A. The Assignment of Mortgage stated, “Mortgage Electronic Registration Systems,

Inc. * * * does hereby sell, assign, transfer and set over unto Wells Fargo Bank, N.A. * *

* a certain mortgage from Dean E. Arlington * * *.” The Assignment of Mortgage was

recorded on March 26, 2007.

       {¶3} On January 11, 2008, Plaintiff-Appellee Wells Fargo Bank, N.A. filed a

complaint in foreclosure against Arlington seeking to recover the balance due on the

Note and to foreclose on the Mortgage. The complaint alleged Wells Fargo was the

holder of the Note.    Attached to the complaint was a copy of the Note signed by

Arlington. The Note contained two indorsements: (1) a special indorsement from TBW

to Wells Fargo and (2) a blank indorsement from Wells Fargo. Also attached to the

complaint were copies of the original Mortgage and the Assignment of Mortgage.

       {¶4} Arlington filed an answer on August 29, 2008.

       {¶5} Wells Fargo filed a motion for summary judgment, which the trial court

denied on October 14, 2008. The trial court found there existed a genuine issue of
Delaware County, Case No. 13CAE030016                                                  3


material fact whether Arlington received notice from Wells Fargo of the default on the

Mortgage.

       {¶6} The case was stayed due to bankruptcy notice.

       {¶7} On July 20, 2010, Wells Fargo executed a corrective Assignment of

Mortgage, which was recorded on July 30, 2010. The correction changed the name of

the assignor: “Mortgage Electronic Registration Systems, Inc., as nominee for Taylor,

Bean & Whitaker Mortgage Corp., its successors and assigns.” Wells Fargo did not

supplement the trial court record with the corrective Assignment of Mortgage.

       {¶8} After the bankruptcy stay was lifted, Wells Fargo filed a second motion for

summary judgment on March 24, 2011. The supporting affidavit and exhibits referred to

the original Assignment of Mortgage. Arlington responded to the motion for summary

judgment. In his response, Arlington did not raise the issue of Wells Fargo’s standing to

bring the foreclosure action.

       {¶9} The trial court granted the motion for summary judgment on June 10,

2011. The trial court entered the decree of foreclosure on June 21, 2011.

       {¶10} Arlington filed a notice of appeal of the June 21, 2011 judgment. Arlington

voluntarily dismissed his appeal on November 3, 2011.

       {¶11} On October 3, 2011, Arlington filed an Emergency Motion for Relief from

Judgment pursuant to Civ.R. 60(B).      In the motion, Arlington argued the trial court

should vacate the decree in foreclosure because Wells Fargo did not have standing to

bring the foreclosure action. Arlington referenced the original Assignment of Mortgage

and corrective Assignment of Mortgage in his motion.
Delaware County, Case No. 13CAE030016                                                4


        {¶12} The trial court denied the motion on October 4, 2011. Arlington did not

appeal the judgment.

        {¶13} The Ohio Supreme Court issued Fed. Home Loan Mortg. Corp. v.

Schwartzwald, 134 Ohio St.3d 13, 2013-Ohio-5017, 979 N.E.2d 1214, on October 31,

2012.

        {¶14} On January 29, 2013, Arlington filed a Motion to Vacate the June 10, 2011

Judgment Entry. Arlington cited to Schwartzwald to argue Wells Fargo did not have

standing when it filed the complaint in foreclosure.

        {¶15} The trial court denied the motion to vacate on March 7, 2013. It is from

this judgment Arlington now appeals.

                              ASSIGNMENTS OF ERROR

        {¶16} Arlington raises two Assignments of Error:

        {¶17} “I. THE TRIAL COURT ABUSED ITS DISCRETION IN DENYING THE

MOTION TO VACATE.

        {¶18} “II. A MOTION TO VACATE A VOID JUDGMENT PRESENTS A

QUESTION OF LAW WHICH SHOULD BE DETERMINED PURSUANT TO A DE

NOVO REVIEW.        IN THE ALTERNATIVE, WHILE THE TRIAL COURT MAY NOT

HAVE “ABUSED ITS DISCRETION” IN DENYING THE MOTION TO VACATE, THE

ISSUE OF WHETHER A JUDGMENT IS VOID FOR LACK OF JURISDICTION CAN BE

RAISED AT ANY TIME AND THIS COURT SHOULD DETERMINE WHETHER THE

JUDGMENT IS VOID DE NOVO.”
Delaware County, Case No. 13CAE030016                                                   5


                                       ANALYSIS

                                        I. and II.

       {¶19} We consider the first and second Assignments of Error together to fully

analyze the issues presented. Arlington argues in his first Assignment of Error the trial

court abused its discretion in denying his motion to vacate. He argues in his second

Assignment of Error this court should use a de novo standard of review because issues

of law are presented.      Under either standard of review, we overrule Arlington’s

Assignments of Error.

       {¶20} Arlington stylized his January 29, 2013 motion as a common law motion to

vacate. In the motion, Arlington argued the trial court’s decree in foreclosure was a void

judgment because Wells Fargo lacked standing at the time it filed the foreclosure

complaint, as evidenced by the original Assignment of Mortgage and corrective

Assignment of Mortgage. A common law motion to vacate, instead of Civ.R. 60(B), is

utilized to vacate a void judgment. “A party should not file a Civ.R. 60(B) motion for

relief from judgment in order to have the void judgment vacated or set aside, since

Civ.R. 60(B) motions apply only to judgments that are voidable rather than void.” State

ex rel. DeWine v. 9150 Group, L.P., 2012-Ohio-3339, 977 N.E.2d 112, ¶ 7 (9th Dist.)

quoting Beachler v. Beachler, 10th Dist. Franklin No. CA2006–03–007, 2007-Ohio-

1220, ¶ 18. This is because “[t]he power to vacate a void judgment does not arise from

Civ.R. 60(B), but rather, from an inherent power possessed by the courts in this state.”

Thomas v. Fick, 9th Dist. Summit No. 19595, 2000 WL 727531, *2 (June 7, 2000),

quoting Patton v. Diemer, 35 Ohio St.3d 68, 518 N.E.2d 941 (1988), paragraph four of

the syllabus.
Delaware County, Case No. 13CAE030016                                                     6


       {¶21} A trial court's decision to deny a motion to vacate judgment is reviewed on

appeal for an abuse of discretion whether that motion is made pursuant to Civ.R. 60(B)

or to the court's inherent power at common law to vacate a void judgment. Spotsylvania

Mall Co. v. Nobahar, 7th Dist. Mahoning No. 11 MA 82, 2013-Ohio-1280, ¶ 14 citing

GTE Automatic Elec., Inc., v. ARC Industries, Inc., 47 Ohio St.2d 146, 150, 351 N.E.2d

113 (1976). Determining whether a trial court has subject matter jurisdiction is reviewed

de novo. Wells Fargo Bank, National Assoc. v. Elliot, 5th Dist. No. 13 CAE 03 0012,

2013-Ohio-3690

                        Standing and Subject Matter Jurisdiction

       {¶22} Arlington states that because Wells Fargo lacked standing to bring the

complaint, the lack of standing rendered the trial court without subject matter jurisdiction

to hear the complaint. His motion to vacate is based on the trial court’s allegedly void

judgment granting foreclosure. Because his argument is jurisdictional, Arlington argues

he may raise it at any time. This court recently addressed the issue of standing and

subject matter jurisdiction in Wells Fargo Bank, National Assoc. v. Elliot, 5th Dist. No. 13

CAE 03 0012, 2013-Ohio-3690.

       {¶23} In Elliot, the defendant filed a motion to dismiss a complaint in foreclosure

pursuant to Civ.R. 12(B)(1). The defendant argued in the motion to dismiss the trial

court lacked subject matter jurisdiction to hear the complaint in foreclosure because the

plaintiff bank did not have standing at the time it filed the complaint. We explained the

nuances of standing and subject matter jurisdiction:

              Jurisdiction is the trial court's “statutory or constitutional power to

       adjudicate the case.” Steel Co. v. Citizens for a Better Environment, 523
Delaware County, Case No. 13CAE030016                                                  7

     U.S. 83, 89, 118 S.Ct. 1003 (1998); Morrison v. Steiner, 32 Ohio St.2d 86,

     87, 290 N.E.2d 841 (1972).           The term jurisdiction “encompasses

     jurisdiction over the subject matter and over the person.” State v. Parker,

     95 Ohio St.3d 524, 769 N.E.2d 846 (2002). Subject matter jurisdiction is

     defined as a court's power to hear and decide cases. Pratts v. Hurley,

     102 Ohio St.3d 81, 806 N.E.2d 992 (2004).           Because subject matter

     jurisdiction goes to the power of the court to adjudicate the merits of a

     case, it can never be waived and may be challenged at any time. U.S. v.

     Cotton, 535 U.S. 625, 630, 122 S.Ct. 1781 (2002); State ex rel. Tubbs

     Jones v. Suster, 84 Ohio St.3d 70, 75, 701 N.E.2d 1002 (1998).

            Separate from the requirement of subject matter jurisdiction in a

     case is the requirement of standing. Standing is defined as “[a] party's

     right to make a legal claim or seek judicial enforcement of a duty or right.”

     Ohio Pyro, Inc. v. Ohio Dept. of Commerce, 115 Ohio St.3d 375, 875

     N.E.2d 550 (2007), quoting Black's Law Dictionary (8th Ed.2004).

     Standing depends on “whether the party has alleged such a personal

     stake in the outcome of the controversy* * * as to ensure that the dispute

     sought to be adjudicated will be presented in an adversary context and in

     a form historically viewed as capable of judicial resolution.” Id., quoting

     State ex rel. Dallman v. Franklin Cty. Court of Common Pleas, 35 Ohio

     St.2d 176, 178–179, 298 N.E.2d 515 (1973).             In order to establish

     standing, a plaintiff must show they suffered “(1) an injury that is (2) fairly

     traceable to the defendant's allegedly unlawful conduct, and (3) likely to
Delaware County, Case No. 13CAE030016                                                 8

       be redressed by the requested relief.” Lujan v. Defenders of Wildlife, 504

       U.S. 555, 560–561, 119 L.Ed.3d 351 (1992). “These three factors—injury,

       causation, and redressability—constitute the irreducible constitutional

       minimum of standing.” Id.

                 There is a clear distinction between the requirements of subject

       matter jurisdiction and standing. Standing focuses on injury, causation,

       and redressability between a plaintiff and defendant in a case, while

       subject matter jurisdiction focuses on the court's power and ability to hear

       and decide a case. A lack of standing argument challenges the capacity

       of a party to bring an action, not the court's statutory or constitutional

       power to adjudicate the case and thus is distinguishable from a lack of

       subject matter jurisdiction argument. PNC Bank, N.A. v. Botts, 10th Dist.

       No. 12AP256, 2012–Ohio–5383 (stating standing and capacity to sue do

       not challenge the subject matter jurisdiction of a court); See also Country

       Club Townhouses–North Condominium Unit Assn v. Slates, 9th Dist. No.

       17299, 1996 WL 28003 (stating lack of standing challenges the capacity

       of a party to bring an action, not the subject matter jurisdiction of the

       court); Wells Fargo Bank, N.A. v. Brandle, 2d Dist. No.2012–CA–0002,

       2012–Ohio–3492 (finding lack of standing does not deprive a court of

       subject matter jurisdiction).

Id. at ¶ 9-11.
Delaware County, Case No. 13CAE030016                                                      9


       {¶24} We held Civ.R. 12(B)(1) permits the dismissal of a complaint for lack of

subject matter jurisdiction, but the rule of procedure did not provide for dismissal based

on lack of standing or capacity to sue. Elliot at ¶ 12.

       {¶25} In Fed. Home Loan Mort. Corp. v. Schwartzwald, 134 Ohio St.3d 13,

2012-Ohio-5017, 979 N.E.2d 1214, the Ohio Supreme Court addressed the issue of

standing in a foreclosure action. The Supreme Court determined that a plaintiff in a

foreclosure action must have standing at the time the complaint is filed in order to

invoke the jurisdiction of the common pleas court. Id. at ¶ 24–25. “It is an elementary

concept of law that a party lacks standing to invoke the jurisdiction of the court unless

he has, in an individual or representative capacity, some real interest in the subject

matter of the action.” (Emphasis sic.) Id. at ¶ 22. The Court in Schwartzwald also

found that a lack of standing cannot be cured by “post-filing events” that supply

standing. Id. at ¶ 26. Moreover, a lack of standing “cannot be cured by receipt of an

assignment of the claim or by substitution of the real party in interest.” Id. at ¶ 41.

                                  Standing of Wells Fargo

       {¶26} Standing in a foreclosure case requires the lender to establish “an interest

in the note or mortgage at the time it filed the suit.” Elliot at ¶ 18 quoting Schwartzwald,

134 Ohio St.3d 13, ¶ 28. The current holder of the note and mortgage is the real party

in interest in a foreclosure action. Elliot at ¶ 18 citing U.S. Bank Natl. Assoc. v. Marcino,

181 Ohio App.3d 328, 2009-Ohio-1178, 908 N.E.2d 1032 (7th Dist.).

       {¶27} In the present case, Wells Fargo attached a copy of the Note signed by

Arlington to the complaint in foreclosure. The Note contained two indorsements: (1) a

special indorsement from TBW to Wells Fargo and (2) a blank indorsement from Wells
Delaware County, Case No. 13CAE030016                                                  10


Fargo.     R.C. 1303.25(B) reads, “‘Blank indorsement’ means an indorsement that is

made by the holder of the instrument and that is not a special indorsement. When an

instrument is indorsed in blank, the instrument becomes payable to bearer and may be

negotiated by transfer of possession alone until specially indorsed.” Because the note

is payable to the bearer, negotiation of the note is accomplished by transfer of

possession alone. R.C. 1303.21(B). Arlington does not dispute Wells Fargo was the

holder of the Note when it filed the complaint in foreclosure.

         {¶28} Arlington argued in his motion to vacate Wells Fargo was not the holder of

the Mortgage at the time the complaint was filed due to the differences in the original

Assignment of Mortgage filed with the complaint and the corrective Assignment of

Mortgage recorded on July 30, 2010, after the commencement of the suit.

         {¶29} This Court has previously addressed the matter of standing in a

foreclosure action when the holder of the note is not the holder of the mortgage in Cent.

Mtge. Co. v. Webster, 2012-Ohio-4478, 978 N.E.2d 962 (5th Dist.).               In Central

Mortgage, we reiterated the holding of Kuck v. Sommers, 59 Ohio Law Abs. 400, 100

N.E.2d 68, 75 (3rd Dist.1950), that states:

         [w]here a note secured by a mortgage is transferred so as to vest the legal

         title to the note in the transferee, such transfer operates as an equitable

         assignment of the mortgage, even though the mortgage is not assigned or

         delivered.

         {¶30} This Court has consistently relied on Kuck v. Sommers to find the holder

of the note is the real party in interest entitled to pursue its rights under the note and

mortgage. See Bank of New York v. Dobbs, 5th Dist. No. 2009–CA–000002, 2009-
Delaware County, Case No. 13CAE030016                                                  11

Ohio-4742, 2009 WL 2894601; Duetsche Bank Natl. Trust Co. v. Hansen, 5th Dist. No.

2010 CA 00001, 2011-Ohio-1223, 2011 WL 899625; 2010–1 CRE Venture, LLC v.

Costanzo, 5th Dist. No. 11 CAE 01 003, 2011-Ohio-3530, 2011 WL 2767592.

       {¶31} The Lender in this case was Taylor, Bean & Whitaker Mortgage Corp.

The Mortgage states, “[t]his Security Instrument is given to Mortgage Electronic

Registration Systems, Inc. (‘MERS’) (solely as nominee for Lender, as hereinafter

defined, and Lender’s successors and assigns), as beneficiary.” The Mortgage further

states, “[t]his debt is evidenced by Borrower’s note dated the same date as this Security

Instrument (‘Note’) * * *.” Both Note and Mortgage are dated March 3, 2006.

       {¶32} On March 20, 2007, MERS assigned the Mortgage to Wells Fargo. The

original Assignment of Mortgage stated, “Mortgage Electronic Registration Systems,

Inc. * * * does hereby sell, assign, transfer and set over unto Wells Fargo Bank, N.A. * *

* a certain mortgage from Dean E. Arlington * * *.” The Assignment of Mortgage was

recorded on March 26, 2007. On July 20, 2010, Wells Fargo executed a corrective

Assignment of Mortgage, which was recorded on July 30, 2010.              The correction

changed the name of the assignor to: “Mortgage Electronic Registration Systems, Inc.,

as nominee for Taylor, Bean & Whitaker Mortgage Corp., its successors and assigns.”

       {¶33} Arlington argues Bank of New York Mellon v. Roarty, 7th Dist. Mahoning

No. 10-MA-42, 2012-Ohio-1471 abrogates our holding in Central Mortgage. In Roarty,

the appellee bank was the holder of the note indorsed in blank. At the time the appellee

bank filed the complaint in foreclosure, the mortgage securing the note had not been

assigned to appellee bank.      The mortgage was assigned after the complaint in

foreclosure was filed. The court of appeals found there was a genuine issue of material
Delaware County, Case No. 13CAE030016                                                  12


fact whether the appellee bank was the real party in interest because there could be no

presumption the mortgage followed the note.

       {¶34} We find the facts of the present case are inapposite to Roarty. A reading

of the Mortgage and the Assignment of Mortgage shows that MERS, as nominee for

TBW, assigned the Mortgage to Wells Fargo prior to the filing of the complaint in

foreclosure.

       {¶35} Upon review of the motion to vacate, the trial court concluded

Schwartzwald did not apply to the facts of the case. We agree. Wells Fargo, as holder

of the Note and Mortgage, had standing to invoke the jurisdiction of the trial court when

it filed the complaint in foreclosure.

                                         Res Judicata

       {¶36} The trial court concluded and Wells Fargo argues on appeal Arlington’s

claims as to standing are barred by res judicata. The trial court granted Wells Fargo’s

motion for summary judgment on June 10, 2011. The trial court entered the decree of

foreclosure on June 21, 2011. Arlington appealed the final judgment, but voluntarily

dismissed his appeal.

       {¶37} On October 3, 2011, Arlington filed an Emergency Motion for Relief from

Judgment pursuant to Civ.R. 60(B).         In the motion, Arlington argued the trial court

should vacate the decree in foreclosure because Wells Fargo did not have standing to

bring the foreclosure action. Arlington referenced the original Assignment of Mortgage

and corrective Assignment of Mortgage in his motion.

       {¶38} The trial court denied the motion on October 4, 2011. Arlington did not

appeal the judgment.
Delaware County, Case No. 13CAE030016                                                                   13


        {¶39} Arlington argues that, regardless of his failure to appeal, he may raise the

issue at any time because the issue presented raises the question of the trial court’s

jurisdiction.

        {¶40} Schwartzwald referred to the timing of the question of standing. The Court

stated: “the issue of standing, inasmuch as it is jurisdictional in nature, may be raised at

any time during the pendency of the proceedings.” 132 Ohio St.3d 13, 2012-Ohio-5017,

979 N.E.2d 1214, at ¶ 22 (citation omitted). (Emphasis added.) In Elliot, we noted the

Ohio Supreme Court held subsequent to the issuance of Schwartzwald that, after a

judgment entry grants a decree of foreclosure and order of sale, the matter is no longer

pending. Elliot at ¶ 14 citing Countrywide Home Loans Servicing v. Nichpor, 136 Ohio

St.3d 55, 2013-Ohio-2083 990 N.E.2d 565, at syllabus.

        {¶41} Pursuant to Elliot and this Court’s interpretation of Schwartzwald, we find

Arlington’s time to appeal the issue of standing was through direct appeal of the decree

in foreclosure or an appeal of the denial of Arlington’s original Civ.R. 60(B) motion. As

such, Arlington’s claims raised in the subsequent motion to vacate are barred by res

judicata.1




   1
      The Ohio Supreme Court has certified a conflict between the Ninth and Tenth Districts on the
following question: “When a defendant fails to appeal from a trial court's judgment in a foreclosure action,
can a lack of standing be raised as part of a motion for relief from judgment?” See Bank of Am. v.
Kuchta, 135 Ohio St.3d 1430, 986 N.E.2d 1020, 2013–Ohio–1857.
Delaware County, Case No. 13CAE030016                                            14


                                   CONCLUSION

      {¶42} Pursuant to the above analysis, we overrule the two Assignments of Error

of Defendant-Appellant Dean Arlington.

      {¶43} The judgment of the Delaware County Court of Common Pleas is affirmed.

By: Delaney, J.,

Hoffman, P.J. and

Farmer, J., concur.



                                         HON. PATRICIA A. DELANEY




                                         HON. WILLIAM B. HOFFMAN



                                         HON. SHEILA G. FARMER
