[Cite as Bank of Am. v. Saadey, 2014-Ohio-3569.]
                           STATE OF OHIO, MAHONING COUNTY

                                 IN THE COURT OF APPEALS

                                       SEVENTH DISTRICT


BANK OF AMERICA                                    )   CASE NO. 12 MA 196
                                                   )
        PLAINTIFF-APPELLEE                         )
                                                   )
VS.                                                )   OPINION
                                                   )
RUSSELL SAADEY, et al.                             )
                                                   )
        DEFENDANTS-APPELLANTS                      )

CHARACTER OF PROCEEDINGS:                              Civil Appeal from the Court of Common
                                                       Pleas of Mahoning County, Ohio
                                                       Case No. 12 CV 338

JUDGMENT:                                              Affirmed.

APPEARANCES:

For Plaintiff-Appellee:                                Atty. Patricia K. Block
                                                       Atty. Romi T. Fox
                                                       Lerner, Sampson & Rothfuss
                                                       120 East Fourth Street, Suite 800
                                                       Cincinnati, Ohio 45202-4007

For Defendant-Appellant:                               Atty. Andrew R. Zellers
                                                       Richard G. Zellers & Associates, Inc.
                                                       3810 Starrs Centre Dr.
                                                       Canfield, Ohio 44406


JUDGES:

Hon. Cheryl L. Waite
Hon. Joseph J. Vukovich
Hon. Mary DeGenaro
                                                       Dated: August 14, 2014
[Cite as Bank of Am. v. Saadey, 2014-Ohio-3569.]
WAITE, J.


        {¶1}    Appellant, Russell Saadey, appeals the decision of the Mahoning

County Court of Common Pleas granting summary judgment in a foreclosure action

filed by Appellee, Bank of America, N.A. His challenge is based on the sufficiency of

the evidence establishing Appellee’s standing to file suit as the real party in interest.

Appellant’s three assignments of error are without merit and are overruled. The

judgment of the trial court is affirmed.

                                 Factual and Procedural History

        {¶2}    Appellee, Bank of America, N.A., filed its foreclosure action against

Appellant, Russell Saadey on February 6, 2012.            Appellee named a number of

additional parties who might hold an interest in the property, including the

condominium association and the federal government.               These additional claims

(including a cross-claim by the condominium association) and defendants are not at

issue in this appeal.

        {¶3}    Appellee attached copies of the subject note and mortgage, which

reflect that Appellant was unmarried when he executed the note as a sole promisor in

May of 2007 to the original lender, Countrywide Bank, FSB.                Two additional

indorsements on the last page of the note indicate that the note was transferred via

specific indorsement from Countrywide Bank, FSB, to Countrywide Home Loans, Inc.

and then indorsed in blank by Countrywide Home Loans, Inc.                 The mortgage

attached to the complaint was executed on the same day between the same parties:

Russell Saadey and Countrywide Bank, FSB. A copy of an assignment of mortgage,

which was executed on July 9, 2009 by Shellie Hill on behalf of Mortgage Electronic
                                                                                    -2-

Registration System, Inc. (“MERS”) “as nominee for Countrywide Bank, FSB, its

successors and assigns” and purported to transfer the subject mortgage to “BAC

Home Loans Servicing, L.P., fka Countrywide Home Loans Servicing, L.P.”

(2/6/12 Complaint, Exh. C.) Also attached to the complaint is a copy of a certificate

of merger from the office of the Secretary of State of Texas which shows that BAC

Home Loans Servicing, L.P. merged into Bank of America, N.A. and a copy of a

second Texas document showing an amendment to a certificate of limited

partnership and changing the name of the partnership from Countrywide Home

Loans Servicing, L.P. to BAC Home Loans Servicing, L.P. as of April 27, 2009.

(2/6/12 Complaint, Exh. D & E.) Appellee also included a notice of a federal tax lien

against Appellant’s property in the amount of $24,879.62. (2/6/12 Complaint, Exh.

F.)

      {¶4}   Appellant filed an answer to the complaint on April 24, 2012 after he

was granted leave by the trial court. Appellant’s answer contains a general denial of

the allegations in the complaint, with the exception of the fact that the mortgage was

filed and appears in the county recorder’s records. Appellant did not assert any

counterclaims or defenses.     Appellee filed a motion for summary judgment and

affidavit in support of the motion on July 19, 2012. According to the affidavit offered

in support, Appellant failed to make the payment due on January 1, 2009 and has not

made any subsequent payment.        The affiant, Shelley Rae Fazio, Assistant Vice

President of Bank of America, stated that the loan was accelerated and was now

due, for a principal amount of $194,286.80 with 7.75% interest accruing from
                                                                                  -3-

December 1, 2008 through April 2012, and 3.25% from May 1, 2012. The note,

mortgage, transfer of mortgage, and a statement of account were attached to the

affidavit and referenced in the affidavit.

       {¶5}   Appellant opposed Appellee’s motion for summary judgment by

challenging Appellee’s status as the real party in interest in the suit.   Appellant

alleges that the 2009 assignment of mortgage did not transfer an interest to Appellee

and therefore prevents Appellee from enforcing the terms of the mortgage. Appellant

filed an amended answer to the complaint without leave of court in conjunction with

his opposition to Appellee’s motion for summary judgment on August 12, 2012. The

amended answer raised a number of defenses and challenged Appellee’s standing to

foreclose. Appellee filed a motion to strike Appellant’s amended answer, as it was

not filed within the 28-day window allowed by Civ.R. 15. The trial court did not rule

on this motion. The trial court did grant Appellee’s motion for summary judgment on

September 28, 2012, however. Hence, the record indicates that Appellee’s motion to

strike the amended answer was denied. Appellant’s timely appeal was filed from the

entry granting summary judgment.

                           ASSIGNMENT OF ERROR NO. 1

       THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT

       MOTION FOR THE PLAINTIFF [SIC] THIS CASE WHEN THERE

       WERE GENUINE ISSUES OF MATERIAL FACT REMAINING TO BE

       PROVED BY THE PLAINTIFF.

                           ASSIGNMENT OF ERROR NO. 2
                                                                                      -4-

       THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT

       FOR THE PLAINTIFF SINCE THEY WERE NOT THE REAL PARTY IN

       INTEREST TO BRING A FORECLOSURE ACTION.

                          ASSIGNMENT OF ERROR NO. 3

       THE TRIAL COURT GRANTED SUMMARY JUDGMENT FOR THE

       PLAINTIFF BASED ON INSUFFICIENT EVIDENCE.

       {¶6}   Appellant’s three assignments of error challenge the sufficiency of the

evidence presented by Appellee in support of its motion for summary judgment.

Appellant’s arguments focus on two issues: Appellee’s identity as the real party in

interest and the sufficiency of the averments in the affidavit filed in support of the

motion. Because an evaluation of these two issues will determine the outcome of all

three assignments of error, the assignments will be considered together.

       {¶7}   A trial court’s decision to grant summary judgment is reviewed under a

de novo standard of review. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105,

671 N.E.2d 241 (1996). Before summary judgment can be granted, the court hearing

the motion must determine: (1) no genuine issue as to any material fact remains to

be litigated; (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,

and viewing the evidence most favorably in favor of the party against whom the

motion for summary judgment is made, the conclusion is adverse to that party.

Temple v. Wean United, Inc., 50 Ohio St.2d 317, 327, 364 N.E.2d 267 (1977).
                                                                                       -5-

        {¶8}   “[T]he moving party bears the initial responsibility of informing the trial

court of the basis for the motion, and identifying those portions of the record which

demonstrate the absence of a genuine issue of fact on a material element of the

nonmoving party’s claim.” (Emphasis sic.) Dresher v. Burt, 75 Ohio St.3d 280, 296,

662 N.E.2d 264 (1996). The nonmoving party has the reciprocal burden of setting

forth specific facts showing that there is a genuine issue for trial. Id. at 293. In order

to prevent summary judgment from being granted, the nonmoving party must

produce some evidence that suggests that a reasonable factfinder could rule in that

party’s favor. Brewer v. Cleveland Bd. of Edn., 122 Ohio App.3d 378, 386, 701

N.E.2d 1023 (1997).

        {¶9}   Appellant argues that there is a genuine dispute as to Appellee’s

standing to foreclose as the owner of the note and mortgage. Appellant contends

that the affidavit filed by Appellee contains the same defects that have led four other

appellate districts to hold that an affidavit filed in support of summary judgment is

insufficient to support a judgment. Appellant is mistaken in this contention. The

conclusions reached in the cases cited by Appellant are based on dispositive facts

that materially differ from the case at bar.

        {¶10} The cases Appellant cites generally fall into two categories: those in

which the affiant is not an employee of the plaintiff bank or lending institution and

those where the note is absent and/or specifically indorsed to an entity other than the

plaintiff.
                                                                                      -6-

       {¶11} Appellant primarily relies on two Sixth District cases, Aurora Loan

Servs., L.L.C. v. Louis, 6th Dist. No. L-10-1289, 2012-Ohio-384 and Fed. Natl. Mtge.

Assn. v. Brunner, 6th Dist. No. L-11-1319, 2013-Ohio 128. Aurora combines both of

the common defects: the complaint was filed without a copy of the note and the note

subsequently produced was specifically indorsed to an entity other than the plaintiff

lending institution.   The original lender bank had closed before the matter was

brought to trial. The affiant, an employee of plaintiff, could not establish personal

knowledge of this closed bank’s records, on which plaintiff relied.         Similarly, in

Brunner, the Sixth District rejected the affidavit of an employee of an entity other than

the plaintiff lender who relied on “access” to his own employer’s records, and not the

plaintiff lender’s, in making the affidavit.

       {¶12} Appellant emphasizes the fact that in this case and in Aurora the affiant

is a bank vice president. Appellant overlooks the fact that in Aurora, the affiant was

not the vice president of the bank whose records were necessary to establish a chain

of title. Similarly, Appellant argues that the affiant in Brunner averred “knowledge”

based on his “position” but the court found this claim insufficient. Appellant ignores

the fact that the Brunner affiant was not an employee of the plaintiff and the affiant’s

purported knowledge was of a third party’s records, not those presented by the

plaintiff. Both of these cases are inapplicable to the matter now before us, in which

the note is bearer paper and the motion for summary judgment is supported by the

affidavit of an employee who has sworn to have personal knowledge of documents
                                                                                        -7-

that are the business records of her own employer and which she reviewed prior to

executing her affidavit. (Fazio Aff.)

       {¶13} Appellant’s other cases are equally inapplicable to the matter before us.

In RBS Citizens N.A. v. Vernyi, 9th Dist. No. 26046, 2012-Ohio-2178 the affidavit was

defective because the affiant did not indicate her relationship to the plaintiff bank; in

Maxum Idemn. Co. v. Selective Ins. Co. of South Carolina, 2012-Ohio-2115 affiant’s

knowledge was purportedly based on a contract not in evidence; in Bank of New York

Mellon Trust Co. v. Mihalca, 9th Dist. No. 25747, 2012-Ohio-567 the employee of a

separate entity who identified herself as “attorney in fact” for the plaintiff bank did not

establish a basis as to her personal knowledge sufficient to authenticate the plaintiff’s

business records; in Wachovia Bank of Delaware, N.A. v. Jackson, 5th Dist. No.

2010-CA-00291, 2011-Ohio-3202, the affiant was, again, an employee of an entity

other than the plaintiff bank and her affidavit did not establish that she could have

personal knowledge of another company’s records or practices. Finally, in TPI Asset

Mgt., L.L.C. v. Conrad-Eiford, 193 Ohio App.3d 38, 2011-Ohio-1405, two affidavits

were rejected, both because the affiants were not employees of the business whose

records they purported to authenticate and because the affidavits did not contain

facts sufficient to establish personal knowledge. The court held that the general

statement that the affiants were “authorized” to execute affidavits for Chase Bank did

not support a finding that the information in the affidavits were based on personal

knowledge.
                                                                                      -8-

       {¶14} The affiant in this matter is an employee of Appellee who swears to

have personal knowledge as to documents produced and maintained in the course of

Appellee’s business.    As each of the districts Appellant cites in support of his

misguided argument have noted:

       Pursuant to Civ.R. 56(E), affidavits submitted in support of, or in

       opposition to, a motion for summary judgment must be “made on

       personal knowledge[.]”     “Unless controverted by other evidence, a

       specific averment that an affidavit pertaining to business is made upon

       personal knowledge of the affiant satisfies th[is] Civ.R. 56(E)

       requirement[.]” Bank One, N.A. v. Swartz, 9th Dist. No. 03CA008308,

       2004-Ohio-1986, ¶ 14, citing State, ex rel. Corrigan v. Seminatore, 66

       Ohio St.2d 459[, 423 N.E.2d 105] (1981).         However, “[i]f particular

       averments contained in an affidavit suggest it is unlikely that the affiant

       has personal knowledge of those facts, then * * * something more than

       a conclusory averment that the affiant has knowledge of the facts would

       be required.”   Bank One at ¶ 14, quoting Merchants Natl. Bank v.

       Leslie, 2d Dist. No. 2072 (Jan. 21, 1994).

Mihalca, supra, ¶16. Appellant has not identified any flaw in the affidavit filed in this

case that would indicate that the affiant lacks the necessary personal knowledge.

Absence proof that the affidavit is insufficient, the general rule applies: “[a] mere

assertion of personal knowledge satisfies Civ.R. 56(E) if the nature of the facts in the

affidavit combined with the identity of the affiant creates a reasonable inference that
                                                                                      -9-

the affiant has personal knowledge of the facts in the affidavit.” Residential Funding

Co., LLC v. Thorne, 6th Dist. No. L-09-1324, 2010-Ohio-4271.

       {¶15} In focusing his argument on the allegedly flawed affidavit, Appellant

neglects to address the purported crux of his appeal, which is Appellee’s legal status

as a holder entitled to enforce the note and mortgage. Under Ohio law, the current

holder of the note and mortgage is the real party in interest in foreclosure actions.

When a party fails to establish that it is the current holder of the note and mortgage,

summary judgment is inappropriate. U.S. Bank Natl. Assn. v. Marcino, 2009-Ohio-

1178, ¶32.    Where, as here, the note produced in support of Appellee’s claim

contains an indorsement that does not specifically identify the payor, it is a note

indorsed in blank and payable to the bearer. R.C. 1303.25(B) states:

       “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.

Appellee’s affidavit states: “Bank of America, N.A. successor by merger to BAC

Home.Loans [sic] Servicing, LP fka Countrywide Home Loans Servicing, LP has

possession of the note. The business records attached, which I have reviewed, are

true and correct copies * * *.” (Fazio Aff., ¶4-5.) In Ohio, a person or entity who is in

possession of an instrument made payable to bearer is entitled to enforce the terms

of the instrument as the “holder.” R.C. 1301.01(T)(1).
                                                                                   -10-

      {¶16} For nearly a century, Ohio courts have held that whenever a promissory

note is secured by a mortgage, the note constitutes the evidence of the debt and the

mortgage is a mere incident to the obligation. Edgar v. Haines, 109 Ohio St. 159,

164, 141 N.E. 837 (1923).      Therefore, the negotiation of a note operates as an

equitable assignment of the mortgage, even when the mortgage is not assigned or

delivered. Kernohan v. Manss, 53 Ohio St. 118, 133, 34 WLB 79 (1895.)

      {¶17} Various sections of the Uniform Commercial Code, as adopted in Ohio,

support the conclusion that the owner of a promissory note should be recognized as

the owner of the related mortgage. See R.C. 1309.109(A)(3) (“this chapter applies to

the following: * * * [a] sale of * * * promissory notes”), 1309.102(A)(73)(d) (“‘Secured

party’ means: * * * [a] person to whom * * * promissory notes have been sold”), and

1309.203(G) (“The 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”). Further, “[s]ubsection (g) [of U.C.C. 9–203] codifies the common-law rule that

a transfer of an obligation secured by a security interest or other lien on personal or

real property also transfers the security interest or lien.”   Official Comment 9 to

U.C.C. 9–203, the source of R.C. 1309.203.

      {¶18} Thus, although the record does not contain an additional recorded

assignment of the mortgage, there is sufficient evidence in the record to establish

that Appellee is the current owner of the note and mortgage.             In addition to

establishing that it is the current holder of the note and the real party in interest,
                                                                                  -11-

Appellee also provided evidence of Appellant’s default due to nonpayment, and

established the amount due and owing. (Fazio Aff.) Appellee also produced the

required accounting showing the date of default as it is identified in the complaint.

This was confirmed in the affidavit. (Fazio Aff., Exh. 1.) Accordingly, Appellant's

three assignments of error are without merit and are overruled.

                                     Conclusion

        {¶19} Appellant’s three assignments of error are without merit. The affidavit

offered in support of summary judgment was legally sufficient, Appellee produced

evidence to establish standing as the real party in interest, identified a default, and

provided an accounting of the amount due on the obligation. The judgment of the

trial court is affirmed in full.


Vukovich, J., concurs.

DeGenaro, P.J., concurs.
