[Cite as U.S. Bank Natl. Assn. v. Stallman, 2016-Ohio-22.]


                 Court of Appeals of Ohio
                               EIGHTH APPELLATE DISTRICT
                                  COUNTY OF CUYAHOGA


                              JOURNAL ENTRY AND OPINION
                                      No. 102732


                 U.S. BANK NATIONAL ASSOCIATION
                                                             PLAINTIFF-APPELLEE

                                                     vs.


                         JAMES J. STALLMAN, ET AL.
                                                             DEFENDANTS-APPELLANTS



                                            JUDGMENT:
                                            AFFIRMED


                                      Civil Appeal from the
                             Cuyahoga County Court of Common Pleas
                                    Case No. CV-13-812128

        BEFORE: Kilbane, P.J., McCormack, J., and E.T. Gallagher, J.

        RELEASED AND JOURNALIZED: January 7, 2016
ATTORNEY FOR APPELLANT

Sam Thomas, III
1510 East 191 Street
Euclid, Ohio 44117


ATTORNEYS FOR APPELLEE

Matthew J. Richardson
David B. Bokor
John E. Codrea
Justin M. Ritch
Matthew P. Curry
Manley, Deas & Kochalski L.L.C.
P.O. Box165028
Columbus, Ohio 43216
MARY EILEEN KILBANE, J.:

       {¶1} Defendant-appellant, James J. Stallman (“Stallman”), appeals from the trial

court’s judgment adopting the magistrate’s decision granting summary judgment in the

foreclosure action brought by U.S. Bank National Association, as Trustee for JP Morgan

Mortgage Acquisition Trust 2006-CW2 (“U.S. Bank”). For the reasons set forth below,

we affirm.

       {¶2} In August 2013, U.S. Bank filed a foreclosure action against Stallman and

his wife, alleging that they are in default on a mortgage and note for their home in North

Olmsted, Ohio. U.S. Bank alleges that the Stallmans owe $165,473.43, plus interest and

late charges from June 1, 2008. U.S. Bank further alleges that it is entitled to enforce the

note pursuant to R.C. 1303.31.

       {¶3} U.S. Bank attached a copy of the note and mortgage to its complaint. The

note was made in favor of Countrywide Home Loans, Inc. (“Countrywide”). On the

signature page of the note, there is a stamp that reads “pay to the order of

_________________ without recourse,” which is signed by David Spector of

Countrywide. U.S. Bank attached an allonge, in which Countrywide indorsed the note to

U.S Bank in May 2006. Also attached was a copy of a mortgage assignment from

Mortgage Electronic Registration System (“MERS”) as nominee for Countrywide to U.S.

Bank in 2010. In response to the complaint, the Stallmans filed an answer, asserting that

U.S. Bank lacks standing to bring the lawsuit and is not the real party in interest, and U.S.
Bank failed to satisfy all conditions precedent, including the notice and acceleration

provisions.

       {¶4} In November 2013, U.S. Bank moved for summary judgment. In support

of its motion, U.S. Bank attached an affidavit from Leanna Johnstun (“Johnstun”)

alleging default.   Johnstun is the document control officer of U.S. Bank’s servicer,

Select Portfolio Servicing, Inc. (“Select”).   Also attached were copies of letters to the

Stallmans notifying them that they were in default, the promissory note and mortgage, the

assignment of mortgage from MERS to U.S. Bank, a power of attorney in favor of Bank

of America, N.A. relating to U.S. Bank, and a power of attorney in favor of Select from

Bank of America, N.A.

       {¶5} The Stallmans opposed U.S. Bank’s motion, challenging the validity of the

documents attached to U.S. Bank’s motion for summary judgment. They argued that

Johnstun’s affidavit did not state “with any clarity who the actual holder of the ‘original

Note’ is nor the location of the ‘original Note.’”     The Stallmans further argued that

Johnstun’s affidavit was “robo-signed” and the mortgage assignment from Countrywide

to U.S. Bank was “notarized by someone likely to be an employee of Lerner, Sampson &

Rothfuss in Columbus, Ohio” whereas MERS’s office is in Florida.

       {¶6} After summary judgment was fully briefed, the trial court stayed the matter

in January 2014, so the parties could mediate their dispute. On October 2, 20l4, the trial

court concluded that mediation was unsuccessful and lifted the stay.       Thereafter, the

magistrate granted U.S. Bank’s summary judgment motion. The Stallmans objected to
the magistrates decision, raising arguments similar to those made in their brief in

opposition to U.S. Bank’s summary judgment motion. The Stallmans also argued that

MERS lacked the legal authority to transfer interests in the note and mortgage, and

Johnstun testified on the basis of hearsay and did not authenticate the documents attached

to the summary judgment motion. The trial court overruled the Stallmans’ objections

and adopted the magistrate’s decision in December 2014.

       {¶7} On January 7, 2015, the magistrate issued another decision on the matter in

favor of U.S. Bank. The Stallmans filed objections to this decision, which the trial court

overruled.     The trial court adopted the magistrate’s decision and issued a decree in

foreclosure.

       {¶8} Stallman now appeals, assigning the following three assignments of error

for review, which shall be discussed together.

                                 Assignment of Error One

       Reviewing [U.S. Bank’s] motion for summary judgment de novo, the record
       is clear and convincing that the trial court erred to the prejudice of
       [Stallman] by granting [U.S. Bank’s] motion for summary judgment in
       favor of [U.S. Bank].

                                 Assignment of Error Two

       The trial court erred to the prejudice of [Stallman] by granting [U.S.
       Bank’s] motion for summary judgment based upon the presence of genuine
       issues of material fact regarding [U.S. Bank’s] failure to establish
       satisfaction of all conditions precedent to institute the foreclosure action.

                                Assignment of Error Three

       The trial court erred to the prejudice of [Stallman] by granting [U.S.
       Bank’s] motion for summary judgment based upon the presence of genuine
       issues of material fact regarding [U.S. Bank’s] failure to provide sufficient
       evidence of entitlement to foreclosure and/or damages.

       {¶9} Within these assigned errors, Stallman challenges the trial court’s grant of

summary judgment in U.S. Bank’s favor. We review an appeal from summary judgment

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

105, 1996-Ohio-336, 671 N.E.2d 241; Zemcik v. LaPine Truck Sales & Equip. Co., 124

Ohio App.3d 581, 585, 706 N.E.2d 860 (8th Dist.1997). In Zivich v. Mentor Soccer

Club, 82 Ohio St.3d 367, 369-370, 1998-Ohio-389, 696 N.E.2d 201, the Ohio Supreme

Court set forth the appropriate test as follows:

       Pursuant to Civ.R. 56, summary judgment is appropriate 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, said party
       being entitled to have the evidence construed most strongly in his favor.
       Horton v. Harwick Chem. Corp., 73 Ohio St.3d 679, 1995-Ohio-286, 653
       N.E.2d 1196, paragraph three of the syllabus. The party moving for
       summary judgment bears the burden of showing that there is no genuine
       issue of material fact and that it is entitled to judgment as a matter of law.
       Dresher v. Burt, 75 Ohio St.3d 280, 292-293, 1996-Ohio-107, 662 N.E.2d
       264.

       {¶10} Once the moving party satisfies its burden, the nonmoving party “may not

rest upon the mere allegations or denials of the party’s pleadings, but the party’s response,

by affidavit or as otherwise provided in this rule, must set forth specific facts showing

that there is a genuine issue for trial.” Civ.R. 56(E); Mootispaw v. Eckstein, 76 Ohio

St.3d 383, 385, 1996-Ohio-389, 667 N.E.2d 1197. Doubts must be resolved in favor of

the nonmoving party.        Murphy v. Reynoldsburg, 65 Ohio St.3d 356, 358-359,

1992-Ohio-95, 604 N.E.2d 138.
          {¶11} To prevail on a motion for summary judgment claim in a foreclosure action,

the plaintiff must prove

          (1) that the plaintiff is the holder of the note and mortgage, or is a party
          entitled to enforce the instrument; (2) if the plaintiff is not the original
          mortgagee, the chain of assignments and transfers; (3) that the mortgagor is
          in default; (4) that all conditions precedent have been met; and (5) the
          amount of principal and interest due.

Deutsche Bank Natl. Trust Co. v. Najar, 8th Dist. Cuyahoga No. 98502, 2013-Ohio-1657,

¶ 17.

          {¶12} Stallman argues that U.S. Bank’s motion for summary judgment fails

because: (1) Johnstun’s affidavit failed to establish she had “personal knowledge of the

matter;” (2) U.S. Bank did not demonstrate that it has standing and is the real party in

interest; (3) U.S. Bank did not demonstrate that it gave Stallman prior notice of default

and acceleration as required by the mortgage; and (4) U.S. Bank did not submit “a

competent, credible ‘payment history.’”

                                      Johnstun Affidavit

          {¶13} In the instant case, U.S. Bank supported its summary judgment motion with

an affidavit from Johnstun, a document control officer of Select, its servicer.           The

affidavit begins with a statement by Johnstun indicating that she, “being first duly sworn

according to law, deposes and says on the basis of personal knowledge[.]”                As a

document control officer, she is authorized to make the certification on U.S. Bank’s

behalf.     Johnstun averred to her familiarity with Select’s record keeping system and the

Stallmans’ specific loan records.     She stated the statements she made in the affidavit are
based upon her personal knowledge of the Stallmans’ records and how those records are

maintained.   Johnstun authenticated the note, mortgage, and default notice letter.     She

further averred that U.S. Bank was the holder of the mortgage and note, the loan was in

default, the Stallmans had been provided notice of the default by letter sent to them, and

the Stallmans owe $165,473.43, plus interest and late charges from June 1, 2008.

      {¶14} Civ.R. 56(E) sets forth the requirements for affidavits submitted with

motions for summary judgment. It provides in relevant part:

      Supporting and opposing affidavits shall be made on personal knowledge,

      shall set forth such facts as would be admissible in evidence, and shall show

      affirmatively that the affiant is competent to testify to the matters stated in

      the affidavit. Sworn or certified copies of all papers or parts of papers

      referred to in an affidavit shall be attached to or served with the affidavit.

      {¶15} Under Civ.R. 56(E ), a summary judgment affiant in a foreclosure action

testifies on the basis of personal knowledge with a “specific averment” that the affidavit

is made on the basis of personal knowledge and pertains to business. Nationstar Mtg.,

L.L.C. v. Wagener, 8th Dist. Cuyahoga No. 101280, 2015-Ohio-1289, ¶26, citing Najar,

8th Dist. Cuyahoga No. 98502, 2013-Ohio-1657. In Najar, we stated:

      “Unless controverted by other evidence, a specific averment that an
      affidavit pertaining to business is made upon personal knowledge of the
      affiant satisfies the Civ.R. 56(E) requirement that affidavits both in support
      or in opposition to motions for summary judgment show that the affiant is
      competent to testify to the matters stated.” 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), paragraph two of
      the syllabus. Where an affiant avers that he or she has personal knowledge
       of a transaction “this fact cannot be disputed absent evidence to the
       contrary.” Household Realty Corp. v. Henes, 8th Dist. No. 89516,
       2007-Ohio-5846, ¶ 12, citing Papadelis v. First Am. Sav. Bank, 112 Ohio
       App.3d 576, 579, 679 N.E.2d 356 (8th Dist.1996). Similarly, verification
       of documents attached to an affidavit supporting or opposing a motion for
       summary judgment is generally satisfied by an appropriate averment in the
       affidavit itself, for example, that “such copies are true copies and
       reproductions.” Seminatore at paragraph three of the syllabus.

Id. at ¶ 20.

       {¶16} Here, Johnstun’s affidavit demonstrates her personal knowledge to testify.

Her affidavit specifically states that her averments were on the basis of personal

knowledge, her direct familiarity with the record keeping system utilized by Select, and

her direct familiarity with the records in that system related to the Stallmans’ loan.

Stallman did not attempt to refute this by producing any admissible evidence.

Accordingly, Johnstun’s affidavit was based on personal knowledge and complied with

Civ.R. 56(E).

                                         Standing

       {¶17} In order to commence an action, a party must have standing, which requires

“‘some real interest in the subject matter of the action.’” HSBC Bank USA, N.A. v.

Surrarrer, 8th Dist. Cuyahoga No. 100039, 2013-Ohio-5594, ¶ 8, quoting State ex rel.

Dallman v. Franklin Cty. Court of Common Pleas, 35 Ohio St.2d 176, 298 N.E.2d 515

(1973). Civ.R. 17(A) provides that a complaint must be brought in the name of the real

party in interest.   Whether standing has affirmatively been established is a question of

law subject to de novo review.    Id., citing Deutsche Bank Natl. Trust Co. v. Rudolph, 8th

Dist. Cuyahoga No. 98383, 2012-Ohio-6141.
      {¶18} A party establishes its interest in the suit and has standing when, at the time

it files its foreclosure complaint, it either (1) has had a mortgage assigned or (2) is the

holder of the note. CitiMortgage, Inc. v. Patterson, 8th Dist. Cuyahoga No. 98360,

2012-Ohio-5894, 984 N.E.2d 392, ¶ 21, citing Fed. Home Loan Mtge. Corp. v.

Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017, 979 N.E.2d 1214.

      {¶19} A party can become the holder of a negotiable instrument by specific

endorsement to an identified payee or by holding the negotiable instrument while it is

indorsed in blank.    R.C. 1303.25(A)-(B).    When the note is indorsed in blank, the

instrument becomes payable to the bearer and may be negotiated by transfer and

possession alone. R.C. 1303.25(B); Bank of Am., N.A. v. Farris, 8th Dist. Cuyahoga No.

102256, 2015-Ohio-4980, ¶ 21, citing Third Fed. S & L Assn. of Cleveland v. Reids, 8th

Dist. Cuyahoga No. 99650, 2013-Ohio-4602.

      {¶20} A review of the record in the instant case reveals that U.S. Bank had an

interest in the note and mortgage.    U.S. Bank had been assigned the mortgage three

years before the complaint was filed. Additionally, Countrywide had indorsed the note

both in blank and specifically to U.S. Bank before the complaint was filed.     Therefore,

U.S. Bank has standing to bring the foreclosure action against the Stallmans.

                                  Conditions Precedent

      {¶21} “This court has held that a term in a mortgage such as one requiring prior

notice of default or acceleration to the mortgagor is a condition precedent subject to the

requirements of Civ.R. 9(C).”    Secy. of Veterans Affairs v. Anderson, 2014-Ohio-3493,
17 N.E.3d 1202, ¶ 15 (8th Dist.), citing Bank of Am., N.A. v. Pate, 8th Dist. Cuyahoga No.

100157, 2014-Ohio-1078; Puzzitiello v. Metro. Savs. Bank, 8th Dist. Cuyahoga No.

71814, 1997 Ohio App. LEXIS 5105 (Nov. 13, 1997).

       {¶22} Here, Johnstun stated in her affidavit that the Stallmans were in default and

that all conditions precedent had been met. U.S. Bank attached two letters notifying the

Stallmans of the default, the amount necessary to cure the default, the possible

acceleration of the loan if the default was not cured, and provided them with the

opportunity to cure the default. U.S. Bank produced one letter from the Stallmans’ prior

servicer, Countrywide, and from the current servicer, Select.           In opposition, the

Stallmans averred that they did not receive notice of the deficiency.       This court has

stated that when the bank produces evidence that a notice was “sent” and the mortgage

does not require the bank to show receipt of notice, the borrower’s affidavit stating he did

not receive the notice does not create a genuine issue for trial. N.Y. Life Ins. & Annuity

v. Vengal, 2014-Ohio-4798, 23 N.E.3d 180, ¶ 16-17 (8th Dist.). Thus based on the

foregoing, we find no issue of fact existed as to whether conditions precedent were

satisfied.

                                     Payment History

       {¶23} We recognize that “[t]here is no requirement that a plaintiff provide a

complete ‘payment history’ in order to establish its entitlement to summary judgment in a

foreclosure action.” Najar, 8th Dist. Cuyahoga No. 98502, 2013-Ohio-1657, at ¶ 40,

citing Cent. Mtge. Co. v. Elia, 9th Dist. No. 25505, 2011-Ohio-3188, ¶ 7 (“‘An affidavit
stating [a] loan is in default, is sufficient for purposes of Civ.R. 56, in the absence of

evidence controverting those averments.’”), quoting Bank One, N.A. v. Swartz, 9th Dist.

Lorain No. 03CA008308, 2004-Ohio-1986, ¶ 14.

       {¶24} In the instant case, Johnstun averred to all of the facts necessary to establish

U.S. Bank’s right to the amount due — the principal balance due, the applicable interest

rate, and date from which interest was due. Stallman did not present any evidence

controverting these averments.       Accordingly, Johnstun’s affidavit and supporting

documents were sufficient to meet U.S. Bank’s burden.

       {¶25} In light of the foregoing, we find the trial court properly adopted the

magistrate’s decision granting summary judgment in U.S. Bank’s favor.

       {¶26} Accordingly, the first, second, and third assignments of error are overruled.

       {¶27} Judgment affirmed.

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

       The court finds there were reasonable grounds for this appeal.

       It is ordered that a special mandate issue out of this court directing the common

pleas 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.




MARY EILEEN KILBANE, PRESIDING JUDGE

TIM McCORMACK, J., and
EILEEN T. GALLAGHER, J., CONCUR
