Deutsche Bank Nat'l Trust Co. v. Ayers

• Decision Date: 06 April 2020
• Docket Number: NO. 2019-P-0094,2019-P-0094
• Parties: DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE FOR AMERICAN HOME MORTGAGE ASSETS TRUST 2007-2, MORTGAGE-BACKED PASS-THROUGH CERTIFICATES SERIES 2007-2, Plaintiff-Appellee, v. Julie A. AYERS, et al., Defendants-Appellants.
• Court: Ohio Court of Appeals

153 N.E.3d 452

2020 Ohio 1332

DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE FOR AMERICAN HOME MORTGAGE ASSETS TRUST 2007-2, MORTGAGE-BACKED PASS-THROUGH CERTIFICATES SERIES 2007-2, Plaintiff-Appellee,

v.Julie A. AYERS, et al., Defendants-Appellants.

NO. 2019-P-0094

Court of Appeals of Ohio, Eleventh District, Portage County.

Decided April 6, 2020

John R. Wirthlin and William L. Purtell, Blank Rome LLP, 1700 PNC Center, 201 East Fifth Street, Cincinnati, Ohio 45202, and Robert R. Hoose, The Law Offices of John D. Clunk Co., 4500 Courthouse Boulevard, Suite 400, Stow, Ohio 44224 (For Plaintiff-Appellee).

Grace M. Doberdruk, Law Office of Grace M. Doberdruk, 2000 Auburn Drive, One Chagrin Highlands, Suite 200, Beechwood, Ohio 44122 (For Defendants-Appellants).

MARY JANE TRAPP, J.

{¶1} Appellants, Julie Ayers ("Ms. Ayers") and Richard Paton ("Mr. Paton"), appeal the judgment of the Portage County Court of Common Pleas granting summary judgment and issuing a decree of foreclosure to appellee, Deutsche Bank National Trust Company, as Trustee for American Home Mortgage Assets Trust 2007-2, Mortgage-Backed Pass-Through Certificates Series 2007-2 ("Deutsche Bank"). Ms. Ayers and Mr. Paton also appeal the trial court's judgment entry dismissing their counterclaims against Deutsche Bank.

{¶2} Ms. Ayers and Mr. Paton argue that the trial court erred by granting Deutsche Bank's motion for summary judgment because: (1) Deutsche Bank inappropriately attempted to introduce new evidence and argument in its reply brief; (2) the affidavit submitted with Deutsche Bank's motion for summary judgment was not made on personal knowledge and did not properly authenticate Ms. Ayers' original note or her loan payment history; (3) genuine issues of material fact exist regarding whether Deutsche Bank had possession of Ms. Ayers' original note when the complaint was filed and whether Deutsche Bank is the holder of the mortgage; and (4) Deutsche Bank did not comply with all conditions precedent to foreclosure. Ms. Ayers and Mr. Paton also argue that the trial court erred by granting Deutsche Bank's motion to dismiss their counterclaims.

{¶3} After a careful review of the record and pertinent law, we find the trial court properly granted summary judgment to Deutsche Bank because: (1) Deutsche Bank's reply brief did not introduce new evidence and argument in its reply brief. Even if it did, Ms. Ayers and Mr. Paton waived this argument by failing to seek leave to file a surreply or to move to strike the reply brief prior to the trial court's granting of summary judgment; and (2) Ms. Ayers and Mr. Paton have not raised genuine issues of material fact regarding the affiant's personal knowledge, authenticity of the note or loan payment history, or Deutsche Bank's possession of Ms. Ayers' original note when the complaint was filed, status as the holder of the mortgage, or compliance with all conditions precedent to foreclosure. As a result of the trial court's granting of summary judgment to Deutsche Bank and our affirmance, Ms. Ayers' and Mr. Paton's counterclaims are moot.

{¶4} Thus, we affirm the judgments of the Portage County Court of Common Pleas.

Substantive and Procedural History

The Note and Mortgage

{¶5} On December 26, 2006, Ms. Ayers signed a promissory note in the principal amount of $1,481,000, plus interest, payable to American Brokers Conduit ("ABC"). The same day, Ms. Ayers granted a mortgage in the same amount to Mortgage Electronic Registration System ("MERS"), as nominee for ABC and its successors and assigns, on the real property located at 695 Club Drive, Aurora, Ohio. The mortgage was recorded on March 8, 2007 in Portage County. The note contains an undated blank endorsement from ABC.

{¶6} Ocwen Loan Servicing, LLC ("Ocwen") sent Ms. Ayers a "Notice of Default" dated March 22, 2016, informing Ms. Ayers that her payments were past due and she was in default. It listed the total amount past due and informed her that failure to bring her account current may result in acceleration of the note and foreclosure. It also informed her that she "may have the right to reinstate the mortgage loan" after acceleration.

{¶7} MERS assigned Ms. Ayers' mortgage to Deutsche Bank on January 26, 2017, and the assignment was recorded on February 1, 2017. The instrument indicates it was prepared by an individual named Leonora Jones Williams.

The Complaint, Answer, and Counterclaims

{¶8} On March 6, 2017, Deutsche Bank filed a complaint in foreclosure against Ms. Ayers and Mr. Paton, also naming Ms. Ayers' unknown spouse and unknown tenants, if any, and the county treasurer. Deutsche Bank alleged that it was the "person entitled to enforce" and "in lawful possession" of Ms. Ayers note by virtue of the blank endorsement. Attached to the complaint were copies of the note, mortgage, and mortgage assignment.

{¶9} Deutsche Bank's complaint alleged that Mr. Paton has or may claim to have an interest in the real property. The preliminary judicial report lists that a marriage license between Ms. Ayers and Mr. Paton was filed in Portage County in 2008.

{¶10} Ms. Ayers and Mr. Paton filed a joint answer with a jury demand, raising numerous affirmative defenses. They also asserted three counterclaims, alleging that Deutsche Bank violated the Fair Debt Collection Practices Act (Count 1), committed common law fraud (Count 2) and invaded their privacy by filing the foreclosure complaint (Count 3). All three counterclaims are premised on allegations that Deutsche Bank is not entitled to enforce the note and mortgage at issue in this case.

Motion to Dismiss Counterclaims and Opposition

{¶11} Deutsche Bank filed a motion to dismiss Ms. Ayers' and Mr. Paton's counterclaims for failure to state claims upon which relief can be granted pursuant to Civ.R. 12(B)(6). Ms. Ayers and Mr. Paton filed a brief in opposition. Deutsche Bank filed a reply memorandum in support of its motion to dismiss. Ms. Ayers and Mr. Paton filed a motion for leave to file a surreply, attaching the original of the proposed surreply. Deutsche Bank filed a brief in opposition to the motion for leave. Approximately one month later, the trial court issued a judgment entry granting Deutsche Bank's motion to dismiss Ms. Ayers' and Mr. Paton's counterclaims without expressly ruling on Ms. Ayers' and Mr. Paton's motion for leave and without discussing its reasoning.

Motion for Summary Judgment and Opposition

{¶12} A magistrate conducted a status conference and scheduled discovery and dispositive motion deadlines. In April and June of 2018, Deutsche Bank filed notices to stay the deadlines due to Ms. Ayers' pending loan modification application. Ultimately, the parties were not able to reach a settlement. In May 2019, pursuant to Deutsche Bank's request, the trial court lifted the stay and scheduled a dispositive motion deadline. Shortly thereafter, Deutsche Bank filed a motion for summary judgment and an affidavit from Howard R. Handville.

{¶13} With respect to his qualifications and personal knowledge, Mr. Handville's affidavit states: (1) he is a senior loan analyst with Ocwen Financial Corporation, whose indirect subsidiary is Ocwen; (2) his statements are based on his personal knowledge; (3) he is familiar with the business records that Ocwen maintains for the purposes of servicing mortgage loans, collection payments, and pursuing any delinquencies (collectively, "servicing records"); and (4) based on his training and general knowledge of the processes by which Ocwen's servicing records are created and maintained, and by or from information provided by persons with knowledge of the activity and transactions reflected in the records, servicing records relating to Ms. Ayers' loan are kept in the ordinary course of Ocwen's regularly conducted business activities.

{¶14} With respect to the note, Mr. Handville's affidavit states: (1) the note is contained in Ocwen's records; (2) the date of the note's execution and original principal amount; and (3) a true and accurate copy of the note is attached as Exhibit A and incorporated by reference.

{¶15} With respect to the mortgage, Mr. Handville's affidavit states: (1) the mortgage secured repayment of the note; (2) information regarding the encumbered real property and mortgage recording; and (3) a true and accurate copy of the mortgage is attached as Exhibit B and incorporated by reference.

{¶16} With respect to the mortgage assignment, Mr. Handville's affidavit states MERS assigned its interest to Deutsche Bank and a true and accurate copy of the assignment is attached as Exhibit C and incorporated by reference.

{¶17} Mr. Handville's affidavit furthers states: (1) Ocwen is the attorney-in-fact and servicer of Ms. Ayers' loan and is authorized to act on behalf of Deutsche Bank; and (2) a true and accurate copy of a power of attorney is attached as Exhibit D and incorporated by reference.

{¶18} With respect to possession of the note, Mr. Handville's affidavit states: (1) Deutsche Bank was in possession of the Note, and was the holder thereof, when the foreclosure case was filed on March 6, 2017; (2) Deutsche Bank's record custodian received the original Note on or around February 21, 2007, which it then delivered to Ocwen to hold on its behalf; (3) a copy of the custodial record verifying possession is attached as Exhibit O; and (4) Deutsche Bank is in possession of the Note and is currently the holder thereof.

{¶19} With respect to default, Mr. Handville's affidavit states: (1) the account is in default for the payment date of February 1, 2016 and all subsequent payments; (2) Deutsche Bank elected to call the entire balance due and payable in accordance with the terms of the note and mortgage; (3) the amount due is $1,428,562.54, plus interest at the rate of 3.935% per annum from January 1, 2016, fees, and expenses; (4) the payoff amount through May 9, 2019 is $1,742,199.14; (5) true and accurate copies of the payoff quote and the payment history are attached as Exhibit E and...