Fed. Natl. Mtge. Assn. v. Herren , 99 N.E.3d 1071 ( 2017 )

[Cite as Fed. Natl. Mtge. Assn. v. Herren, 2017-Ohio-8401.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 105088
FEDERAL NATIONAL MORTGAGE ASSOCIATION
PLAINTIFF-APPELLEE
vs.
THOMAS R. HERREN, ET AL.
DEFENDANTS-APPELLANTS
JUDGMENT:
REVERSED AND REMANDED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-14-829507
BEFORE: Celebrezze, J., E.T. Gallagher, P.J., and Blackmon, J.
RELEASED AND JOURNALIZED: November 2, 2017
ATTORNEYS FOR APPELLANTS
Dan L. McGookey
Kathryn M. Eyster
McGookey Law Office, L.L.C.
225 Meigs Street
Sandusky, Ohio 44870
ATTORNEYS FOR APPELLEE
Michael L. Wiery
Jessica Wilson
Reimer, Arnovitz, Chernek & Jeffrey Co., L.P.A.
P.O. Box 96696
30455 Solon Road
Solon, Ohio 44139
Also Listed
For JPMorgan Chase Bank, N.A., s.b.m. Bank One, N.A.
Nelson M. Reid
Bricker & Eckler, L.L.P.
100 South Third Street
Columbus, Ohio 43215
Keesha N. Warmsby
Baker Hostetler
65 East State Street, Suite 2100
Columbus, Ohio 43215
For State of Ohio Department of Taxation
Mike DeWine
Ohio Attorney General
150 East Gay Street, 21st Floor
Columbus, Ohio 43215
For United States of America
Marlon A. Primes
Assistant United States Attorney
U.S. Courthouse, Suite 400
801 West Superior Avenue
Cleveland, Ohio 44113
FRANK D. CELEBREZZE, JR., J.:
{¶1} Appellants, Sandra J. Herren and Thomas R. Herren, appeal the grant of
summary judgment in favor of Federal National Mortgage Association (“Fannie Mae”) in
a foreclosure case. The Herrens argue that there are genuine issues of material fact that
make summary judgment inappropriate. After a thorough review of the record and law,
this court reverses and remands.
I. Factual And Procedural History
{¶2} Sandra and Thomas executed a note and mortgage on December 1, 2001.1
The note involved appellants and Nexthome Mortgage Corporation (“Nexthome”). The
note submitted in this case bears an endorsement from Nexthome to Metropolitan Bank
(“Metropolitan”) and a further endorsement from Ohio Savings Bank, N.A. (“Ohio
Savings”) in blank. Attached to the note is an allonge from Metropolitan to Ohio
Savings. The assignments of mortgage submitted with the complaint include three
assignments. The first is an assignment from Nexthome to Ohio Savings. The second
is a corrective assignment from CitiMortgage, Inc. (“Citi”), as attorney-in-fact for Ohio
Savings to Citi. This assignment includes language indicating that the Federal Deposit
Insurance Corporation (“FDIC”) took over the assets of Ohio Savings and that Citi was
acting on behalf of the FDIC when making the assignment.2 The third assignment is
Thomas was not vested with legal title to the property, so he signed the mortgage to release
1
his dower interest.
The corrective assignment related to an earlier assignment from Ohio Savings Bank to Citi
2
that lacked language or a recorded power of attorney that would evidence Citi’s ability to assign the
from Citi to Fannie Mae. In 2010, the Herrens were in default and Citi, the purported
owner of the note, sent them a default letter setting forth their right to cure and
accelerated the note. In 2011, a foreclosure complaint was filed by Citi. This
complaint was eventually dismissed without prejudice. The note was then transferred to
Fannie Mae, and it instituted a second foreclosure case on July 9, 2014.
{¶3} The case proceeded through discovery and depositions, and Fannie Mae filed
a motion for summary judgment. The Herrens opposed the motion by filing a brief in
opposition supported by affidavits and deposition testimony and also filed a motion to
strike an affidavit attached to Fannie Mae’s motion based on an alleged lack of personal
knowledge of the affiant. Fannie Mae then filed a reply brief in support of summary
judgment and a brief in opposition to the motion to strike.
{¶4} On August 22, 2016, the magistrate assigned to the case issued a decision
finding that Fannie Mae was entitled to summary judgment and entitled to the relief
sought in the complaint. The magistrate also denied the motion to strike. The Herrens
filed objections to the magistrate’s decision, and Fannie Mae filed a reply in support.
On September 21, 2016, the trial court adopted the magistrate’s decision in a separate
opinion. The Herrens then filed the instant appeal, claiming that “[t]he trial court erred
in granting Fannie Mae’s motion for summary judgment.”
II. Law and Analysis
A. Standard of Review
mortgage.
{¶5} Summary judgment under Civ.R. 56 provides for the expedited adjudication
of matters where there is no material fact in dispute to be determined at trial. To obtain
summary judgment, the moving party must show that “(1) there is no genuine issue of
material fact; (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 when
viewing evidence in favor of the nonmoving party, and that conclusion is adverse to the
nonmoving party.” Grafton v. Ohio Edison Co., 77 Ohio St. 3d 102, 105, 671 N.E.2d 241
(1996), citing State ex rel. Cassels v. Dayton City School Dist. Bd. of Edn., 69 Ohio St. 3d
217, 219, 631 N.E.2d 150 (1994).
{¶6} The moving party has the initial responsibility of establishing its entitlement
to summary judgment. Dresher v. Burt, 75 Ohio St. 3d 280, 292-293, 662 N.E.2d 264
(1996). “[I]f the moving party meets this burden, summary judgment is appropriate only
if the nonmoving party fails to establish the existence of a genuine issue of material fact.”
Deutsche Bank Natl. Trust Co. v. Najar, 8th Dist. Cuyahoga No. 98502,
2013-Ohio-1657, ¶ 16, citing Dresher at 293.
{¶7} Once a moving party demonstrates no material issue of fact exists for trial
and the party is entitled to judgment, it is the nonmoving party’s duty to come forth with
argument and evidence that demonstrates a material issue of fact does exist that would
preclude judgment as a matter of law. Id.
B. Standing
 {¶8} The Herrens first assert that Fannie Mae lacks standing. Standing requires
that, in order to invoke the jurisdiction of a court, a party must have a real interest in the
litigation at the outset. Fed. Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St. 3d
13, 2012-Ohio-5017, 979 N.E.2d 1214. A plaintiff is required to show it “‘suffered (1)
an injury that is (2) fairly traceable to the defendant’s allegedly unlawful conduct, and (3)
likely to be redressed by the requested relief.’” Deutsche Bank Natl. Trust Co. v.
Holden, 147 Ohio St. 3d 85, 2016-Ohio-4603, 60 N.E.3d 1243, ¶ 20, quoting Moore v.
Middletown, 133 Ohio St. 3d 55, 2012-Ohio-3897, 975 N.E.2d 977, ¶ 22. In the
foreclosure context, that requires a plaintiff to show that it is entitled to enforce the note
and has an interest in the mortgage. Fannie Mae v. Hicks, 2016-Ohio-8484, 77 N.E.3d
380, ¶ 4 (8th Dist.), fn. 2, citing Holden at ¶ 27.
1. Entitled to Enforcement
{¶9} Under Ohio’s version of the Uniform Commercial Code (“UCC”), one
entitled to enforce an instrument is any of the following:
(1) The holder of the instrument;
(2) A nonholder in possession of the instrument who has the rights of a
holder;
(3) A person not in possession of the instrument who is entitled to enforce
the instrument pursuant to Section 1303.38 [dealing with lost or destroyed
instruments] or division (D) of section 1303.58 of the Revised Code
[dealing with mistaken payments].
R.C. 1303.31(A). Below, Fannie Mae argued that it was a holder of the note signed by
the Herrens, or, at the very least, a nonholder with rights of a holder. The Herrens
dispute that Fannie Mae is a holder or has the rights of a holder.
i. Holder
{¶10} One becomes a holder through the specific process of negotiation.
Deutsche Bank Natl. Trust Co. v. Gardner, 8th Dist. Cuyahoga No. 92916,
2010-Ohio-663, ¶ 21. Negotiation is a defined term under the UCC. “Negotiation”
means “a voluntary or involuntary transfer of possession of an instrument by a person
other than the issuer to a person who by the transfer becomes the holder of the
instrument.” R.C. 1303.21(A). The statute goes on to provide, with limited exception,
“if an instrument is payable to an identified person, negotiation requires transfer of
possession of the instrument and its indorsement3 by the holder. If an instrument is
payable to bearer, it may be negotiated by transfer of possession alone.” R.C.
1303.21(B).
{¶11} Here, Fannie Mae asserts that the note is endorsed in blank, and is therefore
bearer paper; mere possession is sufficient to demonstrate that it is a holder.
{¶12} An endorsement in blank transforms a negotiable instrument into bearer
paper, meaning it is payable to whoever has possession of the instrument absent a limited
set of circumstances or defenses. However, the validity of that blank endorsement from
The statute uses a different spelling, “indorsement,” than the common spelling
3
“endorsement.”
Ohio Savings is in dispute. Ohio Savings must have had rights of a holder in order to
bestow that status on future possessors of the note. R.C. 1303.22(B) (“Transfer of an
instrument, whether or not the transfer is a negotiation, vests in the transferee any right of
the transferor to enforce the instrument, including any right as a holder in due course * *
*.”).
{¶13} The issue becomes whether Metropolitan’s endorsement is valid and the
impact that has on Ohio Savings endorsement in blank when that endorsement came long
before the allonge attached to the note purporting to negotiate the instrument to Ohio
Savings existed.
{¶14} Fannie Mae complicated this question by claiming ignorance as to the
origins of the allonge attached to the note. Fannie Mae’s arguments and the deposition
testimony of its witness indicate that the allonge was merely lost, later found, and
reattached to the note. The Herrens provided the affidavit of Julie DeLucia, a
Huntington National Bank (“Huntington”) employee, who signed the endorsement from
Metropolitan to Ohio Savings. According to DeLucia, in 2011 a representative from
Citi sought to have her sign an undated, already prepared allonge purporting to negotiate
the note from Metropolitan to Ohio Savings. The Herrens demonstrated that
Metropolitan ceased to exist by this time. However, Fannie Mae showed that
Huntington was successor to Metropolitan’s interests by providing records of succession,
and DeLucia averred in her affidavit that she had authority to sign on behalf of
Metropolitan because Huntington was the successor to Metropolitan’s interests. See
Acordia of Ohio, L.L.C. v. Fishel, 133 Ohio St. 3d 345, 2012-Ohio-2297, 978 N.E.2d 814.
While DeLucia could sign the endorsement as a Huntington employee as successor in
interest to Metropolitan, she was not an employee of Metropolitan. The statement that
she was an employee of Metropolitan only goes to demonstrate lack of candor in the
history of this note.
{¶15} The validity of the Metropolitan endorsement and transfer, and thus Ohio
Savings’ endorsement in blank, is addressed by R.C. 1303.22(C). This statute provides,
“[u]nless otherwise agreed, if an instrument is transferred for value the transferee has a
specifically enforceable right to the unqualified indorsement of the transferor, but
negotiation of the instrument does not occur until the indorsement is made by the
transferor.” The UCC contemplates an invalid endorsement that accompanies a transfer
of possession, and gives the transferee an unqualified right to the endorsement of the
transferor. Once that endorsement occurs, negotiation is perfected and any rights,
including rights of a holder, are vested in the transferee. See Whaley, Symposium
Journal — Four More Years? Business Law and the Great Recession: Mortgage
Foreclosures, Promissory Notes, and the Uniform Commercial Code, 39 W.St.U.L.Rev.
313, 319-320 (2012). This provision of the UCC does not concern who is the owner of
the note or even who has possession. This codified right to cure a defective negotiation
indicates that once Huntington, successor in interest to Metropolitan, executed the
endorsement contained within the allonge, the previous transfer to Ohio Savings became
a negotiation, vesting in Ohio Savings all rights and interest that Metropolitan may have
possessed.4 This could make Ohio Savings a holder in due course, and its rights and
status would flow through Ohio Savings’ endorsement in blank to the present possessor
of the note.
{¶16} However, the language of R.C. 1303.22(C) only applies to a transfer for
value. See also Comment three to R.C. 1303.22. The endorsement on the allonge does
not specify whether there was a transfer for value and neither does any other evidence
produced in the case. The endorsement only specifies that it is without recourse.
{¶17} Example three in the comment to R.C. 1303.22 is illustrative and provides,
Payee negotiated the note to X who took as a holder in due course. X sold
the note to Purchaser who received possession. The note, however, was
indorsed to X and X failed to indorse it. Purchaser is a person entitled to
enforce the instrument under section 3-301 and succeeds to the rights of X
as holder in due course. Purchaser is not a holder, however, and under
section 3-308 Purchaser will have to prove the transaction with X under
which the rights of X as holder in due course were acquired.
{¶18} This indicates that Fannie Mae is not a holder, but may be entitled to enforce
where it can prove the transaction wherein it acquired its rights to enforcement.
Attempting to pass off an undated endorsement as though it was executed
contemporaneously with a purported negotiation of the note from Metropolitan to Ohio
Savings does not “prove the transaction” as suggested under the example. The
representative provided by Fannie Mae for deposition had no knowledge of why there
was an endorsement from Nexthome to Metropolitan but no assignment of the mortgage.
This analysis is muddied by DeLucia’s inexact endorsement where she indicated she was an
4
employee of Metropolitan.
She also had no knowledge of the purported negotiation of the note to Metropolitan or
from Metropolitan to Ohio Savings, and did not state that the transfer was for value.
DeLucia had no knowledge of the transaction between Metropolitan to Ohio Savings
either.
{¶19} Fannie Mae may very well be entitled to enforce the note, but on this record,
it has not provided sufficient evidence to show that as a matter of law.
ii. Nonholder with Rights of Enforcement
{¶20} Fannie Mae also argues that even if it is not a holder, it is a nonholder in
possession with rights of enforcement.
{¶21} Under R.C. 1303.22(A) a transfer occurs “when [an instrument] is delivered
by a person other than its issuer for the purpose of giving to the person receiving delivery
the right to enforce the instrument.” If the transferor neglects to endorse, then the
transferee is not a holder, but is entitled to enforce if the transferor was a holder. R.C.
1303.22(B). As explained above, it is unclear from this record whether Ohio Savings
was a holder.
{¶22} When this court was faced with a similar issue, we looked to other evidence
to demonstrate an intent to transfer. Gardner, 8th Dist. Cuyahoga No. 92916,
2010-Ohio-663. There, this court looked to language in the contemporaneous
assignments of mortgage that purported to transfer all rights and interests and referenced
the accompanying note to find an intent to transfer rights of enforcement where a proper
negotiation did not occur. Id. at ¶ 18-22.
{¶23} When the Twelfth District was faced with a defect in the chain of
endorsements, it agreed with this court’s jurisprudence by looking to other evidence to
find a transfer of interests and rights to enforcement:
[Fifth Third’s] allegations that it was in possession of a note and entitled to
enforce it, combined with the copy of the unendorsed note, at the very
minimum, demonstrated that [Fifth Third] was entitled to enforce as a
nonholder in possession. See R.C. 1303.22(B); Deutsche Bank Natl. Trust
Co. v. Gardner, 8th Dist. Cuyahoga No. 92916, 2010-Ohio-663, ¶ 18-22.
The note attached to the complaint was payable to State Savings Bank.
Therefore, State Savings Bank was the initial holder because the note was
payable to it as an identified person. R.C. 1303.25(A). The fact that [Fifth
Third] was in possession of the unendorsed note along with language used
in the mortgage and the assignment of the mortgage showed a chain of
custody and indicated that State Savings Bank or some other person
transferred the note to [Fifth Third] with the intent that [Fifth Third] be
entitled to enforce the note.
Fifth Third Mtge. Co. v. Bell, 12th Dist. Madison No. CA2013-02-003, 2013-Ohio-3678,
¶ 21.
{¶24} The Tenth District, faced with a gap in the chain of a note, disagreed:
It appears that U.S. Bank conflates “transferee” with “holder” to leap-frog
over holes in the chain of transfer that are not supported in the record by
evidentiary-quality materials. Under either R.C. 1303.22(A) or (B), a
transferee gets only what the transferor had to give, no matter the intention
or purpose of the transferor. R.C. 1303.22(A) does not magically transform
a note’s “transfer” to “rights of a holder.” This is especially true, since R.C.
1303.22(B) limits the rights of the transferee to the rights held by the
transferor. Thus, if Wells Fargo Bank, N.A. was not a “holder” or a “person
entitled to enforce” the Georges’ note, neither is U.S. Bank. R.C.
1303.22(B).
U.S. Bank N.A. v. George, 2016-Ohio-7788, 66 N.E.3d 788, ¶ 21 (10th Dist.).
{¶25} This court’s jurisprudence disagrees with some portions of the George
opinion in that this court has held that intent to transfer may be demonstrated with other
evidence such as assignments of the mortgage. Gardner at ¶ 22. However, the chain
of assignments of the mortgage is not helpful in the present case because there is also an
unexplained break in these assignments.
{¶26} The Herrens argue that the chain of transfers of the mortgage differs from
that of the note. In the Eighth District, an assignment of mortgage that purports to
transfer all rights and interests, and references a transfer of the note, can be used as
evidence of an intent to transfer rights of enforcement of the note when accompanied by
delivery of the note. Id. at ¶ 22. Fannie Mae argues that even if it is not a holder of the
note, that it is still a nonholder with rights of enforcement and uses this case law from the
Eighth District to support its argument.
{¶27} However, the assignments of mortgage in the record do not track
the purported endorsements of the note. The note indicates that it was endorsed to
Metropolitan. There is no corresponding assignment of mortgage to Metropolitan. The
mortgage was assigned to Ohio Savings from Nexthome, to Citi from Ohio Savings, and
finally to Fannie Mae from Citi.
{¶28} In its motion for summary judgment, Fannie Mae did not thoroughly address
the conflict in transfers between the note and mortgage or the delayed endorsement from
Metropolitan. Further, in its reply brief, it asserted that “even if the Defendants could
establish the allonge is invalid, Fannie Mae is nonetheless entitled to enforce the Note as
the non-holder in possession pursuant to R.C.1303.31(A).” It goes on to assert that the
affidavit of Nathan Abeln, attached to its motion for summary judgment, “clearly
establishes Fannie Mae’s possession of the original Note and has obtained the right of a
holder by virtue of the chain of assignments of mortgage.” The mortgage assignments
do not show this.
{¶29} The break in the chain of assignments does not evidence a clear intent on
previous holders of the note to transfer rights of enforcement. There is no assignment
from Metropolitan to Ohio Savings. While the Herrens do not have standing to
challenge the assignments of mortgage, that is not the issue here. Fannie Mae is
attempting to use those assignments to buttress its argument that it has a right to enforce
the note. However, because of the conflict between the assignments and the
endorsements, it is unclear from this record whether that is true.
{¶30} The Herrens also attack the validity of the affidavit used to demonstrate that
Fannie Mae possessed the original note. During the proceedings below, Fannie Mae
produced the original note for an in camera inspection and the Herrens, along with a
forensic document examiner, were allowed to inspect it. While the Herrens assert that
there were two copies of the note presented in different proceedings, they do not assert
that the note presented in the present case was not the original document they signed.
The Abeln affidavit averred that Fannie Mae has possession of the original note. The
Herrens have not met their reciprocal burden of demonstrating a material issue of fact
about Fannie Mae’s possession of the note.
{¶31} In response, the Herrens attack the validity of the Abeln affidavit because
they allege that averments were not based on personal knowledge.
{¶32} In order to comply with Civ.R. 56’ s evidentiary requirement and be
considered at the summary judgment phase, an affidavit must be based on personal
knowledge, provide a basis for that knowledge, and provide facts based on that
knowledge that would be admissible in evidence. JPMorgan Chase Bank v. Dattilo, 8th
Dist. Cuyahoga 101239, 2014-Ohio-5286, ¶ 7, citing Civ.R. 56(E).
{¶33} The Abeln affidavit provided that he is a foreclosure specialist at the
servicer employed by Fannie Mae to service the Herrens’ loan. He averred that the
statements in the affidavit are based on personal knowledge, and then set forth that he
personally reviewed the regularly kept business records involving the Herren loan. He
averred that Fannie Mae has possession of the note endorsed in blank and is the assignee
of the mortgage. He further stated that the Herrens were in default and that a notice of
default was sent on July 6, 2010.
{¶34} This affidavit satisfies the requirement for consideration under Civ.R. 56(E).
See Dattilo at ¶ 8. However, it is not sufficient to entitle Fannie Mae to summary
judgment as set forth above. So while it may be considered by this court and the trial
court, it is not determinative on Fannie Mae’s entitlement to foreclosure. There remain
material questions of fact surrounding the chain of endorsements and assignments.
2. Separate Right to Foreclosure
{¶35} Fannie Mae also asserts that even if it is not entitled to enforce the note, it
has a separate and distinct avenue for relief in foreclosure of the mortgage. Holden, 147
Ohio St. 3d 85, 2016-Ohio-4603, 60 N.E.3d 1243. Fannie Mae’s reliance on that recent
decision from the Supreme Court of Ohio regarding a separate right to enforce the
mortgage through foreclosure is also misplaced in this case.
{¶36} Fannie Mae asserts that it is the assignee of the mortgage and therefore, has
a separate right to foreclose under Holden. However, Holden did not disturb the rule in
Ohio that the mortgage follows the note in transfers: “‘the negotiation of a note operates
as an equitable assignment of the mortgage, even though the mortgage is not assigned or
delivered.’” HSBC Bank USA, N.A. v. Thompson, 2d Dist. Montgomery No. 23761,
2010-Ohio-4158, ¶ 80, quoting U.S. Bank Natl. Assn. v. Marcino, 181 Ohio App. 3d 328,
2009-Ohio-1178, 908 N.E.2d 1032, ¶ 52 (7th Dist.).
{¶37} Here, there is a transfer of the note from Nexthome to Metropolitan without
a corresponding assignment of the mortgage. Then, there is a 2011 endorsement of the
note to Ohio Savings long after Fannie Mae asserts that the note was transferred.
Therefore, there is a material question of fact about Fannie Mae’s ability to foreclose on
the mortgage where this conflict remains unexplained. Fannie Mae can cure such an
issue, but here, Fannie Mae ignored it. Fannie Mae’s attempt to cure these defects
requires more explanation to ensure they comply with the applicable rules and qualify as
proper remedies for defective negotiations and assignments.
C. Conditions Precedent
{¶38} The Herrens also claim that Fannie Mae failed to satisfy conditions
precedent, including complying with Fannie Mae policies regarding notice to a defaulting
borrower and a face-to-face meeting, the failure to send a proper default letter, and failed
to establish the amount due under the note.
{¶39} Violations of Fannie Mae’s internal policies do not provide the Herrens with
a defense in this foreclosure action. The Herrens’ loan was not a loan governed by
federal regulations promulgated by the Department of Housing and Urban Development
for Federal Housing Authority insured loans that the Herrens cite to in support. Further,
an in-person interview is not required under the terms of the note. Therefore, any impact
of the loan servicer or Fannie Mae’s failure to live up to its own internal rules does not
impact its right to foreclose. The relationship of the parties is governed by the note in
this case, which does not require satisfaction of any of the provisions on which the
Herrens rely.
{¶40} Another condition precedent to foreclosure is an acceleration of the amount
due under the note with notice and an opportunity to cure. Here, Fannie Mae relies on a
letter sent by Citi informing the Herrens of acceleration in 2010 and the Abeln affidavit.
The 2010 letter indicated that the Herrens were in default and the entire amount due under
the note would be accelerated unless they made a timely payment. When the Herrens
failed to cure, a previous foreclosure action was filed. In the interim, the Herrens did
not attempt to cure by tendering payment. Once a loan is accelerated and the entire
amount is due, absent agreement of the parties, the outstanding balance remains due.
Therefore, Fannie Mae’s reliance on the 2010 notice of default letter is sufficient in this
case to satisfy its burden.
{¶41} Finally, the Herrens claim that because only a partial payment history was
offered, Fannie Mae did not establish the amount due under the note. Fannie Mae is not
required to provide a complete payment history to satisfy its burden of establishing the
amount due. U.S. Bank, N.A. v. Matthews, 8th Dist. Cuyahoga No. 105011,
2017-Ohio-4075, ¶ 33, citing Najar, 8th Dist. Cuyahoga No. 98502, 2013-Ohio-1657, at ¶
40 (“There is no requirement that a plaintiff provide a complete ‘payment history’ in
order to establish its entitlement to summary judgment in a foreclosure action.”). Fannie
Mae’s Abeln affidavit provided that the Herrens were in default. He averred the balance
due under the note had been accelerated and set forth the amount due. Fannie Mae also
provided a detailed payment history and balance going back a number of years. The
Herrens did not offer any contrary evidence that a different amount was due. The Abeln
affidavit and accompanying account statements are sufficient in the absence of contrary
evidence. Matthews at ¶ 43, citing Cent. Mtge. Co. v. Elia, 9th Dist. Summit No.
25505, 2011-Ohio-3188, ¶ 7.
III. Conclusion
{¶42} The UCC has specific provisions that allow a defective negotiation to be
reformed and for Fannie Mae to attain holder status. However, Fannie Mae failed to
aver or even allege that it complied with these provisions or other provisions that Fannie
Mae took the loan without notice of the previous issues. Further, Fannie Mae has not
established that it is a nonholder with rights of enforcement based on the unaddressed
issues in the endorsements and the lack of evidence that previous holders assigned the
mortgage with all rights and interests to the note. Therefore, there are material questions
of fact regarding these issues.
{¶43} This cause is reversed and remanded to the lower court for further
proceedings consistent with this opinion.
It is ordered that appellants recover of said appellee 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.
FRANK D. CELEBREZZE, JR., JUDGE
EILEEN T. GALLAGHER, P.J., and
PATRICIA ANN BLACKMON, J., CONCUR