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Ohio

 

http://www.sconet.state.oh.us/rod/docs/pdf/10/2008/2008-ohio-1282.pdf

 

[Cite as Everhome Mtge. Co. v. Rowland, 2008-Ohio-1282.]

IN THE COURT OF APPEALS OF OHIO

TENTH APPELLATE DISTRICT

Everhome Mortgage Company, :

Plaintiff-Appellee, :

v. : No. 07AP-615

(C.P.C. No. 07CVE04-5165)

Sara E. Rowland et al., :

(REGULAR CALENDAR)

Defendants-Appellees, :

(Gregory E. Vignon, :

Defendant-Appellant). :

O P I N I O N

Rendered on March 20, 2008

Shapiro & Felty, LLP, Richard J. Lacivita and John A. Polinko,

for plaintiff-appellee.

Dinsmore & Shohl, LLP, and Adam R. Todd, for defendantappellant.

APPEAL from the Franklin County Court of Common Pleas

KLATT, J.

{¶1} Defendant-appellant, Gregory E. Vignon, appeals from a judgment of the

Franklin County Court of Common Pleas that granted summary judgment in favor of

plaintiff-appellee, Everhome Mortgage Company ("Everhome"). For the following

reasons, we reverse.

No. 07AP-615 2

{¶2} In April 2003, Vignon and his former wife, Sara E. Rowland, signed a

promissory note and mortgage to secure a loan for the purchase of a house. Vignon and

Rowland executed these instruments in favor of TrustCorp Mortgage Company

("TrustCorp").

{¶3} On April 16, 2007, Everhome filed a foreclosure action against Vignon and

Rowland. In its complaint, Everhome alleged it is the holder of the note and mortgage

Vignon and Rowland signed. Everhome also alleged that Vignon and Rowland defaulted

in payment on the note and, as a consequence, owed Everhome $143,830.83, plus

interest.

{¶4} On June 4, 2007, Vignon filed an answer admitting that he has an interest in

the property but denying that he defaulted in the payments. As an affirmative defense,

Vignon asserted that Everhome was not a real party in interest.

{¶5} Ten days later, Everhome filed a motion for summary judgment. Vignon

subsequently filed his memorandum contra, arguing that: (1) Everhome did not establish

itself as the holder of the note and mortgage; (2) he did not owe the amount Everhome

claimed; and (3) Everhome did not comply with the requirements of Section 203.604(b),

Title 24, C.F.R. In his supporting affidavit, Vignon stated that he executed the note and

mortgage at issue in favor of TrustCorp. He further stated that he never signed an

agreement, note, or mortgage in favor of Everhome.

{¶6} The trial court entered final judgment in favor of Everhome on June 29,

2007. Vignon now appeals from that judgment and assigns the following error:

The trial court erred as a matter of law in granting summary

judgment in favor of Plaintiff-Appellee and against Defendant-

Appellant in the Final Judgment Entry in Foreclosure filed

June 29, 2007.

No. 07AP-615 3

{¶7} Pursuant to Civ.R. 56(C), a court shall render summary judgment if "the

pleadings, depositions, answers to interrogatories, written admissions, affidavits,

transcripts of evidence, and written stipulations of fact, if any, timely filed in the action,

show that there is no genuine issue as to any material fact and that the moving party is

entitled to judgment as a matter of law." In ruling on summary judgment, a court is not

permitted to weigh evidence or choose among reasonable inferences. Tonti v. East Bank

Condominiums, LLC, Franklin App. No. 07AP-388, 2007-Ohio-6779, at ¶25. Instead, a

court must resolve all reasonable inferences in favor of the non-moving party. Dupler v.

Mansfield Journal Co., Inc. (1980), 64 Ohio St.2d 116, 120. Thus, summary judgment is

appropriate only where: (1) no genuine issue of material fact remains to be litigated; (2)

the moving party is entitled to judgment as a matter of law; and (3) viewing the evidence

most strongly in favor of the non-moving party, reasonable minds can come to but one

conclusion, and that conclusion is adverse to the non-moving party. Harless v. Willis Day

Warehousing Co. (1978), 54 Ohio St.2d 64, 66.

{¶8} "[A] party seeking summary judgment * * * bears the initial burden of

informing the trial court of the basis for the motion, and identifying those portions of the

record that demonstrate the absence of a genuine issue of material fact on the essential

element(s) of the nonmoving party's claims." Dresher v. Burt (1996), 75 Ohio St.3d 280,

293. If the moving party demonstrates that there is no genuine issue of fact, "the

nonmoving party then has a reciprocal burden * * * to set forth specific facts showing that

there is a genuine issue for trial * * *." Id.

{¶9} Appellate review of summary judgment is de novo. Brown v. Scioto Cty.

Bd. of Commrs. (1993), 87 Ohio App.3d 704, 711. Thus, an appellate court applies the

No. 07AP-615 4

same standard as the trial court and conducts an independent review without deference

to the trial court's determination. Tonti, at ¶27.

{¶10} By his only assignment of error, Vignon argues that the trial court erred in

granting summary judgment because there is a genuine issue of fact about whether

Everhome is the holder of the note and mortgage. He asserts that he executed the note

and mortgage in favor of TrustCorp—not Everhome. He argues that because Everhome

did not present evidence as to how it became the holder of the note and mortgage, it has

not shown that it is a real party in interest. We agree.

{¶11} "Every action shall be prosecuted in the name of the real party in interest."

Civ.R. 17(A). A real party in interest is one who is directly benefited or injured by the

outcome of the case. Shealy v. Campbell (1985), 20 Ohio St.3d 23, 24. The purpose

behind the real-party-in-interest requirement is " 'to enable the defendant to avail himself

of evidence and defenses that the defendant has against the real party in interest, and to

assure him finality of the judgment, and that he will be protected against another suit

brought by the real party at interest on the same matter.' " Id. at 24-25, quoting In re

Highland Holiday Subdivision (1971), 27 Ohio App.2d 237, 240.

{¶12} In foreclosure actions, the real party in interest is the current holder of the

note and mortgage. Chase Manhattan Mtge. Corp. v. Smith, Hamilton App. No. C-

061069, 2007-Ohio-5874, at ¶18; Kramer v. Millott (Sept. 23, 1994), Erie App. No. E-94-5

(because the plaintiff did not prove that she was the holder of the note and mortgage, she

did not establish herself as a real party in interest). A party who fails to establish itself as

the current holder is not entitled to judgment as a matter of law. First Union Natl. Bank v.

Hufford (2001), 146 Ohio App.3d 673, 677, 679-680. Thus, in Hufford, the Third District

No. 07AP-615 5

Court of Appeals reversed a grant of summary judgment where a purported mortgagee

failed to produce sufficient evidence explaining or demonstrating its right to the note and

mortgage at issue. In that case, the record contained only "inferences and bald

assertions" and no "clear statement or documentation" proving that the original holder of

the note and mortgage transferred its interest to the appellee. Id. at 678. The failure to

prove who was the real party in interest created a genuine issue of material fact that

precluded summary judgment. Id. at 679-680.

{¶13} Similarly, in Washington Mut. Bank, F.A. v. Green (2004), 156 Ohio App.3d

461, the Seventh District Court of Appeals reversed the trial court's finding of summary

judgment where the plaintiff failed to prove that it was the holder of the note and

mortgage. There, the defendant executed a note and mortgage in favor of Check 'n Go

Mortgage Services, not Washington Mutual Bank, F.A. Although Washington Mutual

Bank, F.A. submitted an affidavit alleging an interest in the note and mortgage, it did not

state how or when it acquired that interest. Id. at 467. The court concluded that this lack

of evidence defeated the purpose of Civ.R. 17(A) by exposing the defendant to the

danger that multiple "holders" would seek foreclosure based upon the same note and

mortgage. Id.

{¶14} In the case at bar, the note and mortgage identify TrustCorp—not

Everhome—as the lender. Therefore, Everhome needed to present the trial court with

other evidence to prove its status as the current holder of the note and mortgage. To

accomplish this, Everhome relied upon the affidavit testimony of Becky North, an

Everhome officer. In her affidavit, North stated that "the copies of the Promissory Note

and Mortgage Deed attached to Plaintiff's Complaint are true and accurate copies of the

No. 07AP-615 6

original instruments held by Plaintiff." (Emphasis added.) Beyond this tangential

reference, North's affidavit contains no further averments regarding Everhome's interest

in the note and mortgage.

{¶15} We conclude that North's testimony is insufficient to establish that

Everhome is the current holder of the note. First, Everhome failed to attach the note to its

complaint. Thus, North's statement does not prove anything with regard to the note,

much less that Everhome currently holds the note. Second, North does not specify how

or when Everhome became the holder of the note and mortgage. Without evidence

demonstrating the circumstances under which it received an interest in the note and

mortgage, Everhome cannot establish itself as the holder.

{¶16} Lacking the necessary evidence in the trial court record, Everhome

attempts to introduce that evidence on appeal. In its brief, Everhome alleges that

TrustCorp assigned to it TrustCorp's interest in the note and mortgage on April 19, 2007.

Although evidence of an assignment would establish Everhome's status as the current

holder of the note and mortgage, we cannot consider Everhome's belated allegation that

an assignment occurred. See State v. Ishmail (1978), 54 Ohio St.2d 402, paragraph one

of the syllabus ("A reviewing court cannot add matter to the record before it, which was

not a part of the trial court's proceedings, and then decide the appeal on the basis of the

new matter.").

{¶17} Because Everhome did not present the trial court with evidence explaining

how or when it became the holder of the note and mortgage, a genuine issue of material

fact exists regarding whether it is a real party in interest. Therefore, the trial court erred in

No. 07AP-615 7

granting Everhome summary judgment, and we sustain Vignon's sole assignment of

error.

{¶18} On appeal, Vignon also disputes the amount owed under the note and

argues that Everhome violated Section 203.604, Title 24, C.F.R. Because we reverse the

trial court's judgment based on a factual dispute over the real party in interest, these

remaining issues are moot.

{¶19} For the forgoing reasons, we sustain Vignon's assignment of error.

Therefore, we reverse the final judgment of the Franklin County Court of Common Pleas,

and remand this case for proceedings in accordance with law and this opinion.

Judgment reversed and cause remanded.

BRYANT and TYACK, JJ., concur.

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