[Cite as Nationstar Mtge., L.L.C. v. Grund, 2014-Ohio-5612.]


                                   IN THE COURT OF APPEALS

                               ELEVENTH APPELLATE DISTRICT

                                   ASHTABULA COUNTY, OHIO


NATIONSTAR MORTGAGE, LLC,                               :      OPINION

                 Plaintiff-Appellee,                    :
                                                               CASE NO. 2014-A-0024
        - vs -                                          :

LOUIS F. GRUND, JR., et al.,                            :

                 Defendant-Appellant.                   :


Civil Appeal from the Ashtabula County Court of Common Pleas, Case No. 2012 CV
00270.

Judgment: Affirmed.


Robert R. Hoose, The Law Offices of John D. Clunk Co., L.P.A., 4500 Courthouse
Boulevard, Suite 400, Stow, OH 44224, and John B. Kopf, Thompson Hine LLP, 41
South High Street, 17th Floor, Columbus, OH 43215 (For Plaintiff-Appellee).

Dennis M. Callahan, 7665 Mentor Avenue, PMB #203, Mentor, OH                   44060 (For
Defendant-Appellant).



CYNTHIA WESTCOTT RICE, J.

        {¶1}     Appellant, Louis F. Grund, Jr., appeals the summary judgment and

foreclosure decree of the Ashtabula County Court of Common Pleas in favor of

appellee, Nationstar Mortgage, LLC. At issue is whether the original plaintiff in this

case, Aurora Bank, had standing and whether the substituted plaintiff, Nationstar, was a

real party in interest. For the reasons that follow, we affirm.
      {¶2}   Statement of Facts and Procedural History

      {¶3}   On September 13, 2006, appellant obtained a mortgage loan from

Lehman Brothers Bank to purchase real property in Ashtabula County. On that date,

appellant signed a promissory note in favor of Lehman Brothers Bank in the amount of

$78,000. Subsequently, Lehman Brothers Bank endorsed the note to Lehman Brothers

Holdings. Thereafter, Lehman Brothers Holdings endorsed the note in blank.

      {¶4}   On the same date appellant obtained said mortgage loan, September 13,

2006, appellant signed a mortgage in favor of Mortgage Electronic Registration

Systems, Inc. (“MERS”), acting as nominee of the lender, Lehman Brothers Bank, in

order to secure the note.

      {¶5}   Appellant defaulted by failing to make any of the monthly payments due

on the note and mortgage on and after October 1, 2011. The amount due under the

loan as of October 1, 2011 in the amount of $74,349.77 was accelerated.

      {¶6}   On February 23, 2012, MERS assigned the mortgage to Aurora Bank by

written mortgage assignment, which was duly recorded with the Ashtabula County

Recorder.

      {¶7}   On April 5, 2012, Aurora Bank filed the complaint. Aurora Bank alleged

that it was the holder of the note and that MERS had assigned the mortgage to it.

      {¶8}   On June 29, 2012, two months after the complaint was filed, Aurora Bank

assigned the mortgage to appellee, Nationstar Mortgage, LLC.          Shortly thereafter,

Aurora Bank moved to substitute Nationstar as the plaintiff in this case, arguing that the

note and mortgage had been assigned to Nationstar. Appellant did not object or file a




                                            2
brief in opposition to this motion. The court granted the motion to substitute, and the

case proceeded with Nationstar as the plaintiff.

       {¶9}   Appellant filed an answer denying the material allegations of the complaint

and asserting lack of standing as an affirmative defense.

       {¶10} Thereafter, Nationstar moved for summary judgment with the affidavit of

Alyssa Quintanilla, Nationstar’s agent, in support. Appellant filed a brief in opposition.

Subsequently, the trial court entered summary judgment and a foreclosure decree in

favor of Nationstar.

       {¶11} Appellant appeals the trial court’s judgment, asserting two assignments of

error. For his first assigned error, he alleges:

       {¶12} “The trial court committed prejudicial error in granting Plaintiff-Appellee

Nationstar Mortgage LLC’s motion for summary judgment where appellee’s attorneys

admitted that neither Aurora Bank FSB nor Nationstar Mortgage LLC ever owned the

note, and where appellee’s attorneys presented no facts or legal argument connecting

either the first or subsequent plaintiff as a so-called holder with rights to enforce a

promissory note.”

       {¶13} Summary Judgment Principles

       {¶14} Summary judgment is proper 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)

reasonable minds can come to but one conclusion, and that conclusion is adverse to

the nonmoving party, that party being entitled to have the evidence construed most

strongly in his favor. Civ.R. 56(C); Leibreich v. A.J. Refrigeration, Inc., 67 Ohio St.3d

266, 268 (1993).




                                              3
      {¶15} The party seeking summary judgment on the ground that the nonmoving

party cannot prove his case bears the initial burden of informing the trial court of the

basis for the motion and of identifying those portions of the record that demonstrate the

absence of a genuine issue of material fact on the essential elements of the nonmoving

party’s case. Dresher v. Burt, 75 Ohio St.3d 280, 292 (1996).

      {¶16} The moving party must point to some evidence of the type listed in Civ.R.

56(C) that affirmatively demonstrates the nonmoving party has no evidence to support

his case. Dresher, supra, at 293.

      {¶17} If this initial burden is not met, the motion for summary judgment must be

denied. Id. However, if the moving party meets his initial burden, the nonmoving party

must then produce competent evidence showing there is a genuine issue for trial.

Civ.R. 56(E).   When a motion for summary judgment is made and supported as

provided in Civ.R. 56, the adverse party may not rest upon the mere allegations or

denials of his pleadings. The adverse party’s response must set forth specific facts by

affidavit or as otherwise provided by Civ.R. 56, showing that there is a genuine issue for

trial. Id. If the adverse party does not so respond, summary judgment, if appropriate,

shall be entered against him. Id.

      {¶18} Since a trial court’s ruling on a motion for summary judgment involves only

questions of law, we conduct a de novo review of the judgment. DiSanto v. Safeco Ins.

of Am., 168 Ohio App.3d 649, 2006-Ohio-4940, ¶41 (11th Dist.).

      {¶19} The Requirements of Standing in a Mortgage Foreclosure Action

      {¶20} In Ohio, courts of common pleas have jurisdiction over justiciable matters.

Ohio Constitution, Article IV, Section 4(B). “Standing to sue is part of the common

understanding of what it takes to make a justiciable case.” Steel Co. v. Citizens for a


                                            4
Better Environment, 523 U.S. 83, 102 (1998). Standing involves a determination of

whether a party has alleged a personal stake in the outcome of the controversy to

ensure the dispute will be presented in an adversarial context. Mortgage Elec.

Registration Sys., Inc. v. Petry, 11th Dist. Portage No. 2008-P-0016, 2008-Ohio-5323,

¶18.

       {¶21} In a mortgage foreclosure action, the mortgage lender must establish an

interest in the promissory note or in the mortgage in order to have standing to invoke

the jurisdiction of the common pleas court. Fed. Home Loan Mortg. Corp. v.

Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017, ¶28. Further, because standing is

required to invoke the trial court’s jurisdiction, standing is determined as of the filing of

the complaint. Id. at ¶24. This court followed Schwartzwald in Fed. Home Loan Mortg.

Corp. v. Rufo, 11th Dist. Ashtabula No. 2012-A-0011, 2012-Ohio-5930, ¶18.               “The

requirement of an ‘interest’ can be met by showing an assignment of either the note or

mortgage.”     (Emphasis added.) Fed. Home Loan Mtge. Corp. v. Koch, 11th Dist.

Geauga No. 2012-G-3084, 2013-Ohio-4423, ¶24.

       {¶22} The Supreme Court of Ohio recently clarified its holding in Schwartzwald

in Bank of Am., N.A. v. Kuchta, __Ohio St.3d __, 2014-Ohio-4275. In Kuchta, the Court

held that standing is a jurisdictional requirement in that a party’s lack of standing will

prevent him from invoking the court’s jurisdiction over his action. Id. at ¶22. However, a

party’s ability to invoke the court’s jurisdiction involves the court’s jurisdiction over a

particular case, not subject-matter jurisdiction. Id.

       {¶23} Whether standing exists is a matter of law that we review de novo. Bank

of Am., NA v. Barber, 11th Dist. Lake No. 2013-L-014, 2013-Ohio-4103, ¶19.

       {¶24} Aurora Bank’s Standing Under the Uniform Commercial Code


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       {¶25} Appellant argues there is no evidence that Aurora Bank or Nationstar ever

owned the note; had any interest in the note; or had any right to enforce it. Thus,

appellant argues that Aurora Bank lacked standing and Nationstar was not a real party

in interest. We do not agree. R.C. 1303.31 provides in pertinent part:

       {¶26} (A) “Person entitled to enforce” an instrument means any of the

              following persons:

       {¶27} (1) The holder of the instrument; [or]

       {¶28} (2) A nonholder in possession of the instrument who has the rights

              of a holder * * *.”

       {¶29} Further, R.C. 1303.22(A) provides: “An instrument is transferred when it is

delivered by a person other than its [maker] for the purpose of giving to the person

receiving delivery the right to enforce the instrument.”      Moreover, “[t]ransfer of an

instrument, whether or not the transfer is a negotiation, vests in the transferee any right

of the transferor to enforce the instrument * * *.” R.C. 1303.22(B).

       {¶30} The Second District in LaSalle Bank Natl. Assn. v. Brown, 2d Dist.

Montgomery No. 25822, 2014-Ohio-3261, stated, “a person need not be a ‘holder’ of the

instrument in order to be entitled to enforce it. Instead, a person can be a non-holder in

possession of the instrument who has the rights of a holder. This status can be

bestowed in various ways.” Id. at ¶36. By way of explanation, the Second District in

Brown quoted In re Veal, 450 B.R. 897 (Bankr.9th Dist.Ariz. 2011), as follows:

       {¶31} Non-UCC law can bestow this type of status; such law may, for

              example, recognize various classes of successors in interest such

              as subrogees or administrators of decedent’s estates. See

              Comment to UCC § 3-301. * * * Under the UCC, a “transfer” of a


                                            6
                negotiable instrument “vests in the transferee any right of the

                transferor to enforce the instrument.” UCC § 3-203(b). LaSalle at

                ¶36, quoting Veal at 911.

        {¶32} As more fully discussed below, as a result of the assignment of the

mortgage from MERS to Aurora Bank on February 23, 2012, the subject note was also

transferred to Aurora Bank on that date. Thus, the note was transferred to Aurora Bank

before the complaint was filed. Pursuant to R.C. 1303.22(B), MERS’ transfer of the

note vested in Aurora Bank MERS’ right to enforce it. Aurora Bank thus had standing to

file this action.

        {¶33} Appellant attempts to avoid this result by arguing that Citibank owned the

note when the complaint was filed. In support, appellant stated in his affidavit that on

July 15, 2012, Nationstar sent three letters to him, each advising him that “the debt is

owed” to Citibank, but that, effective July 1, 2012, Nationstar would be the servicing

agent for the loan. While it appears that Citibank owned the note as of July 1, 2012,

appellant failed to present any Civ.R. 56(C) evidence showing that Citibank owned the

note prior to that date. The unauthenticated copies of documents (obtained from the

internet) on which appellant relied below to show that Citibank owned the note when the

complaint was filed do not satisfy the requirements of Civ.R. 56(C). Thus, they could

not be considered on summary judgment.          Boop v. Moyer, 9th Dist. Wayne No.

97CA0060, 1998 Ohio App. LEXIS 2989, *12 (June 30, 1998). As a result, there is no

Civ.R. 56 evidence before us that Citibank owned the note when Aurora Bank filed the

complaint.

        {¶34} In any event, even if Citibank owned the note when the complaint was

filed, Aurora Bank would still have had the right to enforce the note because the note


                                            7
was transferred to Aurora Bank before the complaint was filed. Ohio’s version of the

Uniform Commercial Code expressly provides: “[a] person may be a ‘person entitled to

enforce’ the instrument even though the person is not the owner of the instrument * * *.”

R.C. 1303.31(B). (Emphasis added.)

       {¶35} Ohio Appellate Districts have recognized that, “‘because a promissory

note is transferred through the process of negotiation, ownership is not a requirement

for enforcement of the note.’” Bank of Am., N.A. v. Merlo, 11th Dist. Trumbull No. 2012-

T-0103, 2013-Ohio-5266, ¶15, quoting U.S. Bank, N.A. v. Coffey, 6th Dist. Erie No. E-

11-026, 2012-Ohio-721, ¶20. As a result, this court has held that “the holder of a note is

not additionally required to plead that it is the owner of the note in its complaint.” Merlo,

supra, citing Nat’l City Real Estate Services, LLC v. Shields, 11th Dist. Trumbull No.

2012-T-0076, 2013-Ohio-2839, ¶21. Thus, even if Citibank owned the note when Aurora

Bank filed this action, Aurora Bank, as transferee of the note, was entitled to enforce it

by way of the instant action.

       {¶36} Appellant’s argument that Citibank’s ownership of the note means that

Aurora Bank was not entitled to enforce the note demonstrates a lack of understanding

of the separate concepts of ownership of the note and the right to enforce it. Merlo,

supra. Contrary to appellant’s argument, Aurora Bank in its complaint did not allege

that it was the owner of the note. Rather, Aurora Bank alleged that it was the holder of

the note with the right to enforce it.

       {¶37} Because Lehman Brothers Holdings endorsed the note in blank and

MERS transferred the note to Aurora Bank before the complaint was filed, Aurora Bank

had standing to file this action under the U.C.C.         Further, because Aurora Bank




                                             8
transferred the note to Nationstar while this action was pending, Nationstar was a real

party in interest. Civ.R. 17(A); Staff Notes to Civ.R. 17.

       {¶38} Aurora Bank’s Standing as the Mortgage Holder

       {¶39} In any event, MERS’ assignment of the mortgage to Aurora Bank on

February 23, 2012, prior to the filing of the complaint, was sufficient to transfer both the

mortgage and the note to Aurora Bank. Bank of New York v. Dobbs, 5th Dist. No. 2009-

CA-000002, 2009-Ohio-4742, ¶28. In Dobbs, the Fifth District stated:

       {¶40} The Restatement [III, Property (Mortgages)] asserts as its essential

              premise * * * that it is nearly always sensible to keep the mortgage

              and the [note] it secures in the hands of the same party. This is

              because in a practical sense separating the mortgage from the

              [note] destroys the efficacy of the mortgage, and the note becomes

              unsecured. The Restatement concedes on rare occasions a

              mortgagee will disassociate the [note] 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 * * *. Thus, the Restatement [provides] that

              transfer of the [note] also transfers the mortgage and vice versa.

              Section 5.4(b) [provides:] “* * * a transfer of a mortgage also

              transfers the [note] the mortgage secures unless the parties to the

              transfer agree otherwise.” Thus, [the note] follows the mortgage if

              the record indicates the parties so intended. (Emphasis added.)

              Dobbs, supra, at ¶28. (Emphasis added.)




                                             9
       {¶41} The Fifth District in Dobbs held that the assignment of a mortgage, without

an express transfer of the note, is sufficient to transfer both the mortgage and the note,

if the record indicates that the parties intended to transfer both. Id. at ¶31.

       {¶42} In addressing the provisions in the note and mortgage at issue in Dobbs,

supra, which are virtually identical to those at issue here, the Fifth District held:

“Because the note refers to the mortgage and the mortgage, in turn, refers to the note,

we find a clear intent by the parties to keep the note and mortgage together, rather than

transferring the mortgage alone.” Id. at ¶36.

       {¶43} This court followed the Fifth District’s holding in Dobbs in Fed. Home Loan

Mortg. Corp. v. Rufo, 11th Dist. Ashtabula No. 2012-A-0011, 2012-Ohio-5930, ¶44 (“the

assignment of the mortgage, without an express transfer of the note, [is] sufficient to

transfer both the mortgage and the note”).

       {¶44} Here, the mortgage provides that it secures to the Lender, Lehman

Brothers Bank, the performance of appellant’s agreements under the promissory note.

Further, the note provides that the mortgage, dated the same date as the note, protects

the holder of the note from loss that might result if appellant does not keep the promises

made in the note. As a result, the instant note and mortgage evidenced the parties’

intent to keep the instruments together, and the assignment of the mortgage to Aurora

Bank on February 23, 2012, even without an express transfer of the note, was sufficient

to transfer both the mortgage and the note to Aurora Bank. Moreover, appellant did not

satisfy his reciprocal burden under Civ.R. 56 to present competent evidence that the

parties intended to sever the note from the mortgage. Thus, as a matter of law, Aurora

Bank had an interest in the note and mortgage before filing the complaint. Dobbs,

supra. For this additional reason, Aurora Bank had standing to file this action. Further,


                                              10
because Aurora Bank transferred the mortgage and note to Nationstar while this action

was pending, Nationstar was a real party in interest.

       {¶45} We therefore hold that the trial court did not err in granting summary

judgment in favor of Nationstar.

       {¶46} For his second assignment of error, appellant contends:

       {¶47} “The trial court committed prejudicial error in granting Plaintiff-Appellee

Nationstar Mortgage LLC’s motion for summary judgment where direct and inferential

evidence, including correspondence from Nationstar Mortgage LLC stating it was only

the loan servicer and the debt was owed to Citibank N.A., Trustee, LSX Series 2006-17,

showed a genuine dispute as to material facts claimed by appellee.”

       {¶48} Appellant argues that because Nationstar was the servicing agent of the

loan and not the owner of the note, this means Nationstar had no right to enforce the

note and therefore was not a real party in interest. However, as discussed above, a

party need not own the note in order to enforce it. Merlo, supra. Moreover, this court

has held that a servicing agent for a loan is entitled to enforce the note, although it is not

the owner of the note. Id. Thus, Nationstar, as servicing agent of the loan, was entitled

to enforce the note. In addition, the assignment of the mortgage from Aurora Bank to

Nationstar while this action was pending resulted in the transfer of the mortgage and

note to Nationstar. As a result, Nationstar was a real party in interest. The fact that

Citibank owns the note is irrelevant to Nationstar’s right to enforce it and does not

create a genuine issue of material fact. Merlo, supra.

       {¶49} Next, while appellant concedes that MERS assigned the mortgage to

Aurora Bank and that Aurora Bank later assigned the mortgage to Nationstar, appellant

attempts to avoid summary judgment by challenging the validity of these mortgage


                                             11
assignments. However, this court rejected such challenge in Waterfall Victoria Master

Fund v. Yeager, 11th Dist. Lake No. 2012-L-071, 2013-Ohio-3206, ¶21. In Waterfall, a

case decided post-Schwartzwald, this court held that when a mortgagor, such as

appellant, is not a party to the mortgage assignment, and his contractual obligations

under the mortgage are not affected in any way by the assignment, the mortgagor lacks

standing to challenge the validity of the assignment. Id., citing Deutsche Bank Natl.

Trust Co. v. Rudolph, 8th Dist. Cuyahoga No. 98383, 2012-Ohio-6141, ¶24. In

Waterfall, this court stated that its holding was based on the recognition that “an

assignment does not alter the mortgagor/debtor’s obligations under the note or

mortgage and that the foreclosure complaint is based on the mortgagor’s default under

the note and mortgage—not because of the mortgage assignment.” Id. at ¶25.

      {¶50} Appellant asserts various challenges to the mortgage assignment to

Aurora Bank and the later mortgage assignment to Nationstar, arguing that, as a result,

neither of these entities received a valid assignment of the mortgage. However, Aurora

Bank filed the foreclosure complaint (and Nationstar has maintained it) based on

appellant’s default under the note and mortgage, not because of the mortgage

assignments. Waterfall, supra, at ¶23. Appellant therefore does not have standing to

challenge the mortgage assignments at issue here.

      {¶51} In any event, even if appellant had standing to challenge the mortgage

assignments, his arguments would still lack merit.

      {¶52} First, appellant argues that Aurora Bank and Nationstar never held the

note and mortgage based on information allegedly contained in certain documents

appellant attached to his brief in opposition to Nationstar’s motion for summary

judgment. Appellant obtained these documents, marked as Exhibits D through P to his


                                           12
brief in opposition to summary judgment, from various web blogs, internet websites,

Wikipedia, and on-line newspaper articles. However, none of these documents are

authenticated as required by Civ.R. 56(C). Nationstar timely objected to these

documents on this basis in its reply brief. As such, they could not be considered on

summary judgment and are ineffective to create a genuine issue of material fact. See

Lytle v. Columbus, 70 Ohio App.3d 99, 104 (10th Dist.1990).

      {¶53} Next, appellant argues that, “as indicated by the internet,” Regina Lashley,

who signed the mortgage assignment from MERS to Aurora Bank, has signed

thousands of assignments as a MERS vice-president. Again, because this information

is not authenticated as required by Civ.R. 56(C), it could not be considered on summary

judgment. But even if it could, since signing these documents is apparently one of Ms.

Lashley’s duties, her experience in signing such documents would support, rather than

diminish, her authority to sign the mortgage assignment to Aurora Bank.

      {¶54} Appellant appears to be suggesting that Ms. Lashley is a “robo-signer,”

meaning she had no personal knowledge of the information in the mortgage assignment

to which she attested and thus lacked authority to sign it.      Barber, supra, at ¶22.

However, appellant failed to produce any evidence that Ms. Lashley lacked authority to

sign the assignment or that she was a robo-signer. Thus, appellant failed to create a

genuine issue of material fact regarding her authority to sign the assignment. Id.

      {¶55} Next, appellant argues that because the mortgage assignment from

MERS to Aurora Bank states that an individual in Nebraska prepared the instrument,

“[t]his provides cover to appellee’s former attorneys.” Further, appellant argues the

name and address of appellee’s former attorneys were included on the mortgage

assignment in order “to mislead the County Recorder’s Office into believing the


                                           13
instrument complies with the Ohio Revised Code.” Whatever appellant is attempting to

suggest by these arguments, which is far from clear, the arguments are not supported

by any evidence and are thus merely speculative and ineffective to avoid summary

judgment. Moreover, appellant does not reference any case law authority holding that

including these items in a mortgage assignment would affect its validity.

       {¶56} Next, appellant suggests the mortgage assignment from Aurora Bank to

Nationstar was also signed by a robo-signer and is thus invalid. However, because

appellant failed to present any evidence that the signer of this instrument was a robo-

signer or that she lacked authority to sign it, appellant failed to create a genuine issue of

material fact regarding her authority to sign it.

       {¶57} Thus, even if appellant had standing to assert these challenges to the

mortgage assignments at issue here, because none is supported by any evidence and

each is merely conclusory and speculative, they are ineffective to challenge the validity

of the assignments.

       {¶58} Further, appellant argues that because Aurora Bank named MERS as a

defendant, this proves that Ms. Lashley, the officer of MERS who signed the mortgage

assignment on MERS’ behalf, did not have authority to do so. Once again, because this

argument challenges the validity of a mortgage assignment, appellant lacks standing to

make it. In any event, the argument makes no sense. The judicial report filed in this

case shows that MERS had an interest in the property as a mortgage holder. Thus,

Aurora Bank had legitimate grounds to name MERS as a defendant. Further, the mere

fact that MERS was named as a defendant in this action does not prove that Ms.

Lashley lacked authority to sign the mortgage assignment to Aurora Bank.




                                              14
      {¶59} Finally, appellant has not presented any evidence supporting his argument

that Aurora Bank’s former attorneys have “misrepresented” that Aurora Bank and

Nationstar were prior holders of the mortgage and note.      In fact, by virtue of the

assignment of the mortgage to Aurora Bank and later to Nationstar, these two entities

have in fact held both the note and the mortgage.     Further, contrary to appellant’s

argument, there is no evidence that Aurora Bank’s attorneys filed “two false

assignments of mortgages as part of the misrepresentation.”      In fact, the evidence

shows that both assignments were properly executed by authorized representatives of

MERS and Aurora Bank.

      {¶60} For the reasons stated in this opinion, the assignments of error lack merit

and are overruled. It is the order and judgment of this court that the judgment of the

Ashtabula County Court of Common Pleas is affirmed.



TIMOTHY P. CANNON, P.J.,

THOMAS R. WRIGHT, J.,

concur.




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