Ohio Supremes To Decide Whether Foreclosing Party Must Own Both Note, Mortgage At The Time Complaint Is Filed

In connection with foreclosure actions in the State of Ohio, the Ohio Supreme Court has agreed to decide the following question:

• "To have standing as a plaintiff in a mortgage foreclosure action, must a party show that it owned the note and the mortgage when the complaint was filed?"

This issue comes to the state high court upon review of a state intermediate appeals court ruling in U.S. Bank Nat'l. Assn. v. Duvall, 2010 Ohio 6478 (Ohio App. 8th Dist. Cuyahoga County), which held that a lender holding a secured promissory note did not have standing to foreclose a mortgage where the mortgage was in the name of another party.(1)

In deciding to address the issue, the state high court reviewed an order by the 8th District Court of Appeals certifying conflict in the case law from various intermediate appellate districts, and found that a conflict exists.(2)

As it appears that the cases having to address the mess created by the fraudulent conduct of the banksters have sufficiently percolated up the Ohio judicial system, one looks forward to the Ohio Supreme Court putting some order in this area of law both by answering the certified question, and, hopefully and albeit through (authoritative?) dicta, by establishing some guidepost by which the courts can be guided when addressing related bankster-created foreclosure messes not specifically addressed by the certified question here (see, for example, Deutsche Bank Nat'l. Trust Co. v. Greene, 2011 Ohio 1976 (Ohio. App. 6th Dist. April 22, 2011).

For the Ohio Supreme Court's ruling finding the existence of a conflict in the current case law, see U.S. Bank Nat'l. Assn. v. Duvall, 2011 Ohio 1618 (April 6, 2011).

Thanks to Ohio FRAUDClosure for the heads-up on the recent Ohio Supreme Court ruling.

(1) In reaching its conclusion, the 8th District Court of Appeals in Duvall ruled:

• {¶ 13} Ohio law holds that "[a]n action on a note and an action to foreclose a mortgage are two different beasts." Gevedon v. Hotopp, Montgomery App. No. 20673, 2005-Ohio-4597, ¶28. See, also, Third Fed. Savs. Bank v. Cox, Cuyahoga App. No. 93950, 2010-Ohio-4133; Fifth Third Bank v. Hopkins, 177 Ohio App.3d 114, 2008-Ohio-2959, 894 N.E.2d 65.
  
  {¶ 14} In Jordan, supra, this court held that "[t]he owner of rights or interest in property is a necessary party to a foreclosure action. * * * Thus, if plaintiff has offered no evidence that it owned the note and mortgage when the complaint was filed, it would not be entitled to judgment as a matter of law." Id., ¶¶22-23.
  
  {¶ 15} Accordingly, we conclude that plaintiff had no standing to file a foreclosure action against defendants on October 15, 2007, because, at that time, Wells Fargo owned the mortgage. Plaintiff failed in its burden of demonstrating that it was the real party in interest at the time the complaint was filed. Plaintiff's sole assignment of error is overruled.

(2) The conflict cases are:

• U.S. Bank, N.A. v. Bayless, Delaware App. No. 09 CAE 01 004, 2009-Ohio-6115 (5th Dist.),
• U.S. Bank, N.A. v. Marcino, 181 Ohio App.3d 328, 2009-Ohio-1178 (7th Dist.),
• Bank of New York v. Stuart, Lorain App. No. 06CA008953, 2007-Ohio-1483 (9th Dist.), and
• Countrywide Home Loan Servicing, L.P. v. Thomas, Franklin App. No. 09AP-819, 2010-Ohio-3018 (10th Dist.)

An interesting piece of trivia here is that the Bayless, Marcino, and Thomas cases all involved self-represented, pro se homeowners. The Cox and Jordan cases referred to in footnote 1, above, also involved self-represented, pro se homeowners.