IN THE COMMON PLEAS COURT OF FAIRFIELD COUNTY, OHIO. Plaintiff, : Case No. 12CV557. v. : Judge Berens

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1 IN THE COMMON PLEAS COURT OF FAIRFIELD COUNTY, OHIO BANK OF AMERICA, NA, : Plaintiff, : Case No. 12CV557 v. : Judge Berens STEVEN L. WISE, ET AL. : ENTRY DENYING DEFENDANT S MOTION TO DISMISS Defendants. : This matter is before the Court upon Defendants Motion to Dismiss, filed November 21, Defendants James Lyons, Judy Lyons, Steven Wise, and Brian Urbanski, trustee of the 9385 Busey Road Trust ( Defendants ) assert that Plaintiff Bank of America, N.A., is not the real party in interest and is therefore not entitled to enforce the Note at issue. Plaintiff asserts it is the holder of the Note and owner of the Mortgage and therefore has standing to pursue the foreclosure action against Defendants. LAW & ANALYSIS A court must rule on a legal issue such as standing within the framework of Civ. R. 12. A-1 Nursing Care of Cleveland, Inc. v. Florence Nightingale Nursing, Inc., 97 Ohio App. 3d 623, 627, 647 N.E.2d 222 (1994); U.S. Bank Natl. Assn. v. Duvall, 8th Dist. No , Ohio-6478, 10 ( Lack of standing is properly raised by a Civ.R. 12(B)(6) motion to dismiss for failure to state a claim upon which relief can be granted. ). In determining whether a pleading fails to state a claim upon which relief can be granted, the Court must accept all factual allegations as true and draw all reasonable inferences in favor of the non-moving party. State ex rel. Midwest Pride IV, Inc. v. Pontious, 75 Ohio St.3d 565, 570, 664 N.E.2d 931 (1996). Dismissal is then appropriate only if the Court finds beyond doubt, that the [non-moving party] could prove no set of facts... that would entitle him to relief. Id. 1

2 The Court finds the written memoranda and evidence attached thereto demonstrates the following: (1) Defendants Steven Wise, James Lyons, and Judy Lyons executed a Promissory Note in favor of United Wholesale Mortgage on September 23, 2008; (2) United Wholesale Mortgage subsequently endorsed the Note to Countrywide Banks, FSB; (3) Countrywide Banks, FSB subsequently endorsed the Note in blank; and (4) Plaintiff Bank of America, NA is currently in possession of the Note. See Note (Complaint, Exhibit A) As regards the Mortgage, the Court finds (1) Defendants Steven Wise, Ricki Wise, James Lyons, and Judy Lyons executed a mortgage in favor of MERS, as nominee for United Wholesale Mortgage, on September 23, 2008; and (2) MERS, as nominee for United Wholesale Mortgage, subsequently assigned the Mortgage to Plaintiff. See Mortgage (Complaint, Exhibit B); Assignment of Mortgage (Complaint, Exhibit C). Defendants argue that there is a flaw in the chain of title to the Note and Mortgage which precludes Plaintiff from enforcing the Note. Specifically Defendants assert that the Note was negotiated by United Wholesale Mortgage to Countrywide Bank, FSB prior to being endorsed in blank, whereas the Mortgage was assigned directly from United Wholesale Mortgage to Plaintiff. Therefore Defendants reason that the Note and Mortgage were severed and cannot be reunited. For the following reasons, the Court finds Defendants defective chain-of-title argument unpersuasive. A. The Note was Endorsed in Blank. The current holder of a note and mortgage is the real party in interest in foreclosure actions. Cent. Mtge. Co. v. Webster, 5th Dist. No CA-00242, 2012-Ohio-4478, 27; U.S. 2

3 Bank Natl. Assn. v. Marcino, 181 Ohio App. 3d 328, 2009-Ohio-1178, 908 N.E.2d 1032, 32. When a negotiable instrument is endorsed in blank, it becomes bearer paper. R.C Bearer paper does not require specific endorsement to effect negotiation; rather it may be negotiated by possession alone. See id. ( When an instrument is indorsed in blank, the instrument becomes payable to bearer and may be negotiated by transfer of possession alone until specially indorsed. ); R.C (B)(21)(a) (defining a holder as being [t]he person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession ). The Note was endorsed in blank by Countrywide Bank, FSB. See Note (Complaint, Exhibit A). Construing all factual allegations in favor of the non-moving party, the Court finds that Plaintiff is in possession of the Note. Id.; Complaint at 1. As the holder of a note endorsed in blank is the party with the authority to enforce it, the Court finds Plaintiff is entitled to commence action against the Defendants upon the alleged default. II. The Assignment of Mortgage Impliedly Transferred the Note to Plaintiff. Ohio courts have held that a transfer of the Note implies a transfer of the mortgage. Bank of New York v. Dobbs, 5th Dist. No CA , 2009-Ohio-4742, 29. Importantly, the Fifth District Court of Appeals has applied this reasoning to transfers of a mortgage, despite an express transfer of the note, where the record indicates it was the intention of the parties to transfer both. Id. at 31. In Bank of New York v. Dobbs, Appellant-homeowners similarly argued that Appelleebank did not sufficiently prove it was the holder of the subject note and mortgage and therefore did not have the right to foreclose. In Dobbs, the note at issue was never expressly negotiated to 3

4 Appellee, but rather was endorsed to another entity. The mortgage, however, was assigned to Appellee via a recorded document titled Assignment of Note and Mortgage. Appellants argued that the chain of title was incomplete and Appellee was not entitled to foreclose on the property. In overruling the Appellants arguments, the Fifth District Court of Appeals looked to the language of the Note and Mortgage and reasoned: 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. We conclude the chain of title... is not broken. Id. at 36. Similar to the written instruments addressed in Dobbs, both the Note and Mortgage in the case sub judice make reciprocal references to the other. See Mortgage at 3 (Complaint, Exhibit B) ( Borrower s promise to pay is secured by a mortgage, deed of trust or similar security agreement that is dated the same date as this Note, called the Security Instrument. The Security Instrument protects the Lender from losses which might result if Borrower defaults under this Note. ); Note at 1 (Complaint, Exhibit A) ( This debt is evidenced by Borrower s note dated the same date as this Security Instrument ( Note ), which provides for monthly payments, with the full debt, if not paid earlier, due and payable on October 1, ) Further, the Assignment of Mortgage also incorporates language concerning the transfer of the Note: For Value Received, the undersigned holder of a Mortgage... does hereby grant, sell, assign, transfer and convey unto [Plaintiff]... all beneficial interest under that certain Mortgage described below together with the note(s) and obligations therein described.... Assignment of Mortgage 4

5 at 1 (Complaint at Exhibit C). Therefore, the Court finds the parties intended to keep the Note and Mortgage together, and Plaintiff acquired any and all interest in the Note via the August 30, 2011 Assignment. CONCLUSION Therefore, the Court finds that Plaintiff is entitled to enforce the terms of the Note and Mortgage on two bases: (1) the Note is endorsed in blank and in Plaintiff s possession; and (2) the language included in the Note, Mortgage, and Assignment of Mortgage demonstrates an intention to transfer the two documents together. Therefore, Defendants Motion to Dismiss is DENIED. IT IS SO ORDERED. Copies to: Judge Richard E. Berens Jeffrey Jinkens, 50 W. Broad St., Ste. 1200, Columbus, OH Jennifer Routte, 6895 E. Main St., Reynoldsburg, OH Ricki Wise, 6292 Lowridge Dr., Canal Winchester, OH Fairfield County Treasurer, 210 E. Main St., Lancaster, OH

IN THE COURT OF APPEALS OF OHIO FOURTH APPELLATE DISTRICT PICKAWAY COUNTY APPEARANCES:

[Cite as JPMorgan Chase Bank, Natl. Assn. v. Fallon, 2014-Ohio-525.] IN THE COURT OF APPEALS OF OHIO FOURTH APPELLATE DISTRICT PICKAWAY COUNTY JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, : Plaintiff-Appellee,