[Cite as Bank of New York Mellon v. Magby, 2019-Ohio-3042.]


                             COURT OF APPEALS OF OHIO

                            EIGHTH APPELLATE DISTRICT
                               COUNTY OF CUYAHOGA

BANK OF NEW YORK MELLON,                            :

                Plaintiff-Appellee,                 :
                                                              No. 107853
                v.                                  :

KARLEAN MAGBY, ET AL.,                              :

                Defendants-Appellants.              :


                              JOURNAL ENTRY AND OPINION

                JUDGMENT: AFFIRMED
                RELEASED AND JOURNALIZED: July 25, 2019


             Civil Appeal from the Cuyahoga County Common Pleas Court
                                Case No. CV-17-881854


                                          Appearances:

                Clunk, Hoose Co., L.P.A., Laura C. Infante, and Ashley E.
                Mueller, for appellee.

                DannLaw L.L.P., Marc E. Dann, and William C. Behrens,
                for appellant.


SEAN C. GALLAGHER, P.J.:

                  Karlean Magby appeals the decree of foreclosure entered upon

summary judgment. For the following reasons, we affirm.
               Magby purchased the property in November 2006 and made

payments on the note for the first six months. No payments have been made since

that time. After several fits and starts to foreclosure proceedings on the note and

mortgage1 in general, the Bank of New York Mellon, f.k.a. The Bank of New York, as

Trustee for the Certificateholders of the CWABS, Inc., Asset-Backed Certificates,

Series 2006-26 (“Mellon”), filed the underlying foreclosure action in June 2017

seeking to foreclose on the property. Mellon does not seek a monetary judgment on

the unsatisfied debt. The trial court granted summary judgment in Mellon’s favor

concluding that foreclosure was warranted based on the undisputed evidence.

Mellon was in possession of the note and mortgage, which had been directly

assigned to it by the original lender, America’s Wholesale Lender, which was a

registered, fictitious name under which Countrywide Homes, Inc., operated in Ohio.

               Magby does not dispute her outstanding indebtedness. Instead,

Magby contends that the note and the mortgage are unenforceable because she

entered the agreement with America’s Wholesale Lender, a fictitious entity.

According to Magby, the note and mortgage are invalid because America’s

Wholesale Lender did not have the capacity to lend her the money used to finance

the home she purchased. In the alternative, Magby argues that the trial court erred

in granting the decree of foreclosure without affording her an opportunity to file a

cross-claim against the defaulting defendants to either force those defendants to


      1 Magby represented that at least three foreclosure proceedings were filed during
the decade that led up to the current action, but each was dismissed for various procedural
reasons, otherwise than on the merits.
enter an appearance in the action or to disclaim any interest in the action. The

proposed cross-claim attached to Magby’s motion reiterated her argument

regarding the invalidity of the note and mortgage, but it did not contain any claims

asserted against the nonanswering defendants. Instead, the sole remedy was for a

declaration that the nonanswering defendants held no interest in the note or

mortgage.

              We need not extensively dwell on the decision denying Magby leave

to file the cross-claim against the nonanswering defendants. Through the default

mechanism, the nonanswering defendants conceded the lack of interest in the note

and mortgage.

              The granting of leave to amend a pleading is within the sound

discretion of the trial court. Lloyd v. Cleveland Clinic Found., 8th Dist. Cuyahoga

No. 107214, 2019-Ohio-1885, ¶ 31, citing Turner v. Cent. Local School Dist., 85 Ohio

St.3d 95, 99, 1999-Ohio-207, 706 N.E.2d 1261, and Wilmington Steel Prods., Inc. v.

Cleveland Elec. Illum. Co., 60 Ohio St.3d 120, 573 N.E.2d 622 (1991). Although

leave to amend should be liberally granted, the party seeking such must still provide

some good-faith basis for the amendment. Id. at ¶ 33, citing Peterson v. Teodosio,

34 Ohio St.2d 161, 175, 297 N.E.2d 113 (1973). The relief sought in the cross-claim

was duplicative of the remedy offered through the default judgment entered against

the nonanswering defendants. We can find no error in the trial court’s decision to

deny Magby leave to amend her answer to include the cross-claim under Civ.R. 15,
much less could it be found that the trial court abused its discretion in this regard.

Magby’s argument is overruled.

               In the remaining assignments of error,2 Magby focuses on her general

claim that America’s Wholesale Lending is a fictitious entity, and therefore, it lacked

capacity to enter into the note and mortgage associated with Magby’s purchase of

residential property. According to Magby, this invalidates the attempts to foreclose

on her property.

               The court entered final judgment upon Mellon’s motion for summary

judgment. Appellate review of summary judgment is de novo, governed by the

standard set forth in Civ.R. 56. Comer v. Risko, 106 Ohio St.3d 185, 2005-Ohio-

4559, 833 N.E.2d 712, ¶ 8. “Summary judgment may be granted only when (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, reasonable minds can come to but one conclusion and that




      2  Magby also argues that the trial court erred in applying R.C. 5301.07, effective
April 6, 2017, to the note and mortgage executed in 2006. That statutory section provides
that a defective real property instrument that is more than four years old from the date of
recording can be enforced. The entire assignment of error dealing with R.C. 5301.07
focuses on the procedural posture of the case and the arguments advanced in the trial
court’s proceeding. Magby acknowledges that the retroactive application of the statute is
a novel issue, but presents no arguments or legal authority in support of her conclusion
that the statute is ineffective against her decade-old real property instrument. Even if we
were to agree with Magby, this court would have to provide the legal rationale that
supports the theory, and doing so would deprive Mellon with the opportunity to present
countervailing arguments. State v. Tate, 140 Ohio St.3d 442, 2014-Ohio-3667, 19 N.E.3d
888, ¶ 21. We decline to consider the issue as briefed. Capital One Bank (USA), N.A. v.
Gordon, 8th Dist. Cuyahoga No. 98953, 2013-Ohio-2095, ¶ 8; App.R. 16(A)(7).
conclusion is adverse to the nonmoving party.” Marusa v. Erie Ins. Co., 136 Ohio

St.3d 118, 2013-Ohio-1957, 991 N.E.2d 232, ¶ 7.

               Magby executed the note and mortgage in favor of America’s

Wholesale Lender. Shortly thereafter, Countrywide Home Loans, d.b.a. America’s

Wholesale Lender, assigned its interest in the note and mortgage to Mellon. Magby

stopped paying on the note within six months of obtaining the loan. There is no

dispute that she has defaulted under the terms of the note, or that through the

assignment and being in possession of the note and the mortgage at the time of filing

the underlying action, Mellon has standing to pursue the remedy of foreclosure.

               Instead of addressing the merits of the foreclosure action under the

aforementioned standard, Magby claims the assignment from Countrywide Home

Loans to Mellon was invalid because America’s Wholesale Lender held itself out as

a corporation and the entity know as Countrywide Home Loans could not assign its

interest to Mellon.     The undisputed evidence, however, demonstrates that

Countrywide Home Loans registered to operate in Ohio under the “d.b.a.”

designation America’s Wholesale Lender. Magby has not presented any authority

to demonstrate that such a practice was contrary to Ohio law. See, e.g., Green Tree

Servicing L.L.C. v. Luce, 11th Dist. Ashtabula No. 2015-A-0022, 2016-Ohio-1011,

¶ 21, quoting McCaskey v. Sanford-Brown College, 8th Dist. Cuyahoga No. 97261,

2012-Ohio-1543, ¶ 15 (corporations have the right to adopt and operate under

fictitious names in Ohio “‘so long as it is not done with fraudulent purpose or against
public policy.’”); Bank of Am., N.A. v. Lewis, 5th Dist. Ashland No. 12-COA-035,

2013-Ohio-2293, ¶ 37.

               Magby’s argument, in the attempt to invalidate her agreement, is

entirely predicated upon a Florida state trial court decision in U.S. Bank, Natl. Assn.

v. Dimant, 2016 Fla. Cir. LEXIS 29485, *1 (19th Cir. Ct., Feb. 12, 2016), which

dismissed a foreclosure complaint based on the conclusion that America’s

Wholesale Lender, a fictitious entity, was not authorized to conduct business under

Florida law, and therefore, the assignment of the note and mortgage to the plaintiff

by Countrywide Home Loans, doing business as America’s Wholesale Lender was in

violation of Florida law. According to that trial court, this deprived the assignee of

the note and mortgage of standing to pursue the foreclosure. The court provided no

legal analysis upon which its legal conclusions were reached, and therefore, the

decision provides little insight in the discussion.

               Dimant is unpersuasive for another reason. The Fifth District Court

of Appeal in Florida reached the opposite conclusion and concluded that Florida law

permitted Countrywide Home Loans to operate under the fictitious name America’s

Wholesale Lender. In Bank of Am., N.A. v. Nash, 200 So.3d 131, 133 (Fla. 5th DCA

2016), the defendant had executed a promissory note secured by a mortgage in favor

of America’s Wholesale Lender. Id. Countrywide Home Loans, listed as a New York

Corporation Doing Business as America’s Wholesale Lender, endorsed the note and

assigned the mortgage to BAC Home Loans Servicing, LP. The Fifth District Court

of Appeal held that under Florida law, the use of a fictitious name did not impair the
validity of the note or mortgage even if Countrywide Home Loans, Inc., failed to

properly register the name. Nash is not an isolated result. See Sparks v. Bank of

New York Mellon, S.D.Tex. No. H-14-813, 2015 U.S. Dist. LEXIS 88055, *9 (July 7,

2015) (disregarding the argument that Countrywide Home Loans, Inc., lacked

capacity to assign the note and mortgage executed in favor of America’s Wholesale

Lender); Bank of New York Mellon v. Henry, 198 A.3d 443 (Pa.App.2018) (same).

At least one Ohio court has reached the same conclusion. See, e.g., Green Tree

Servicing at ¶ 21.

               Magby does not address any of the foregoing. Instead she directs our

attention to Blough v. Smythe Cramer, 9th Dist. Summit No. 25913, 2012-Ohio-

2373. In that case, as is relevant to the current issue, the court concluded that an

owner of a corporate entity cannot argue that the corporation lacks capacity to enter

a contract if the entity is held out to be a valid corporation. Id. at ¶ 11. The plaintiff

in Blough attempted to file a claim on his own behalf based on a contract entered

into by the corporate entity that he operated. Before entering the contract, however,

the plaintiff had permitted the corporate registration to lapse. Id. The court

concluded that the plaintiff could not substitute himself as the real party in interest

to the contract by claiming that the corporation lacked capacity to enter the

agreement based on the fact the registration had expired.             Id.   The case is

inapplicable the current issue. Blough did not address an entity registered to

operate under a fictitious name — it dealt with expired corporate registrations.
                Magby has not presented any arguments warranting a reversal. In

light of the arguments presented for our review,3 we cannot conclude that the trial

court erred in granting the foreclosure in favor of Mellon. We affirm.

       It is ordered that appellee recover from appellant costs herein taxed.

       The court finds there were reasonable grounds for this appeal.

       It is ordered that a special mandate be sent to said court to carry this judgment

into execution.

       A certified copy of this entry shall constitute the mandate pursuant to Rule 27

of the Rules of Appellate Procedure.


                                 _
SEAN C. GALLAGHER, PRESIDING JUDGE

ANITA LASTER MAYS, J., and
FRANK D. CELEBREZZE, JR., J., CONCUR




       3  For the first time in the reply brief, Magby asks this court to revisit our decision
in Bank of New York Mellon Trust Co., N.A. v. Unger, 8th Dist. Cuyahoga No. 97315,
2012-Ohio-1950, ¶ 35, in which it was concluded that a mortgagor lacks standing to
challenge the assignment of the note and mortgage. Magby did not advance this issue in
her merit briefing. We cannot address new arguments raised for the first time in a reply
brief. Smith v. Nationwide Mut. Ins. Co., 2018-Ohio-3758, 120 N.E.3d 72, ¶ 25 (10th
Dist.), fn. 1, citing In re Fuel Adjustment Clauses for Columbus S. Power Co., 140 Ohio
St.3d 352, 2014-Ohio-3764, 18 N.E.3d 1157, ¶ 37.
