[Cite as FV-I, Inc. v. Lackey, 2014-Ohio-4944.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
FV-I, Inc., in Trust for Morgan Stanley :
Mortgage Capital Holdings LLC,
:
Plaintiff-Appellee, No. 13AP-983
v. : (C.P.C. No. 12CV004862)
Maria E. Lackey, : (REGULAR CALENDAR)
Defendant-Appellant, :
First Franklin Financial Corporation :
et al.,
:
Defendants-Appellees.
:
D E C I S I O N
Rendered on November 6, 2014
Jason Whitacre and Stefani L. Deka, for appellee.
Mills, Mills, Fiely & Lucas, LLC, and Brian D. Flick; Kendo,
Alexander, Cooper & Engel LLP, and Andrew Engel, for
appellant.
APPEAL from the Franklin County Court of Common Pleas
DORRIAN, J.
{¶ 1} Defendant-appellant, Maria E. Lackey ("appellant"), appeals from a
judgment of the Franklin County Court of Common Pleas granting summary judgment in
favor of plaintiff-appellee, FV-I, Inc., in Trust for Morgan Stanley Mortgage Capital
Holdings, LLC ("appellee"), on its complaint for foreclosure. Because we conclude that the
trial court erred by granting judgment in an amount exceeding the face value of the note
and that there was a genuine issue of material fact as to whether appellee was entitled to
enforce the note, we reverse.
No. 13AP-983 2
{¶ 2} In April 2005, appellant executed a promissory note for $91,520 ("the
Note") to First Franklin, a division of Nat. City Bank of IN ("First Franklin"). To secure
payment of the Note, appellant executed a mortgage ("the Mortgage") to First Franklin on
certain property located in Reynoldsburg, Ohio. In April 2012, appellee filed a complaint
for foreclosure, asserting that it was the holder of the Note and assignee of the Mortgage,
and that appellant was in default of the terms and conditions of the Note. Appellee sought
judgment against appellant on the Note for $103,971.23 and accrued interest, along with
certain other costs, charges and advances, as well as foreclosure of the Mortgage and sale
of the property secured by the Mortgage. Appellant filed an answer to the complaint,
asserting various defenses and counterclaims against appellee, and third-party claims
against other entities.
{¶ 3} Appellee moved for summary judgment, asserting that there were no
genuine issues of material fact and that it was entitled to judgment as a matter of law. In
support of its motion for summary judgment, appellee attached an affidavit from Mark
McCloskey ("McCloskey"), an employee of appellee's loan servicing agent, Specialized
Loan Servicing, L.L.C. McCloskey attested that he had examined and had personal
knowledge of appellant's loan account, that appellant was in default under the terms of
the Note, and that there was an unpaid principal balance on appellant's loan account of
$103,971.23. McCloskey also attested to the assignment history of the Mortgage from
First Franklin to appellee. McCloskey also attested to the accuracy of certain
correspondence sent to appellant regarding her loan account.
{¶ 4} The trial court granted summary judgment in favor of appellee, awarding
judgment on the Note for $103,971.23, plus accrued interest, as well as late charges due
under the Note and Mortgage, advances made for the payment of taxes, assessments, and
insurance premiums, and the costs and expenses incurred for enforcement of the Note
and Mortgage. The trial court also ordered foreclosure of the Mortgage and sale of the
property conveyed under the Mortgage.
{¶ 5} Appellant appeals from the trial court's judgment, assigning three errors for
this court's review:
ASSIGNMENT OF ERROR No. 1
The trial court erred in overruling Lackey's Motion to Strike.
No. 13AP-983 3
ASSIGNMENT OF ERROR No. 2
The trial court erred in granting LV-1's [sic] Motion for
Summary Judgment.
ASSIGNMENT OF ERROR No. 3
The trial court erred in certifying its judgment as a final
appealable order.
{¶ 6} We begin with appellant's third assignment of error, which implicates the
jurisdiction of this court. Courts of appeals have jurisdiction to review final orders of
lower courts. Ohio Constitution, Article IV, Section 3(B)(2). Appellant argues that the
summary judgment order was not a final, appealable order and that the trial court erred
by certifying the judgment as final and appealable.
{¶ 7} A trial court order is final and appealable if it meets the requirements of
R.C. 2505.02 and, if applicable, Civ.R. 54(B). Eng. Excellence, Inc. v. Northland Assoc.,
L.L.C., 10th Dist. No. 10AP-402, 2010-Ohio-6535, ¶ 10. Appellate courts employ a two-
step analysis to determine whether an order is final and appealable. Id. at ¶ 11. First, the
court must determine if the order is final within the requirements of R.C. 2505.02.
Second, the court must determine whether Civ.R. 54(B) applies, and, if so, whether the
order being appealed contains a certification that there is no just reason for delay. Id.
{¶ 8} In relevant part, R.C. 2505.02(B) provides that an order is final when it is
"[a]n order that affects a substantial right in an action that in effect determines the action
and prevents a judgment." R.C. 2505.02(B)(1). A "substantial right" is one "that the
United States Constitution, the Ohio Constitution, a statute, the common law, or a rule of
procedure entitles a person to protect." R.C. 2505.02(A)(1). An order that affects a
substantial right is one that, if not immediately appealable, would foreclose appropriate
relief in the future. Hillman v. Kosnik, 10th Dist. No. 05AP-122, 2005-Ohio-4679, ¶ 20.
Generally, " '[a] judgment entry ordering a foreclosure sale is a final, appealable order
pursuant to R.C. 2505.02(B) if it resolves all remaining issues involved in the
foreclosure.' " Whipps v. Ryan, 10th Dist. No. 07AP-231, 2008-Ohio-1216, ¶ 19, quoting
Davilla v. Harman, 7th Dist. No. 06 MA 89, 2007-Ohio-3416, ¶ 18.
No. 13AP-983 4
{¶ 9} Appellant claims that the judgment was not a final, appealable order
because it awarded judgment in favor of appellee for advances appellee made for the
payment of real estate taxes, assessments, and insurance premiums, but did not specify
the amount awarded for those advances. The Supreme Court of Ohio recently considered
a similar claim in CitiMortgage, Inc. v. Roznowski, 139 Ohio St.3d 299 (2014). In
Roznowski, the trial court granted summary judgment in favor of the plaintiff on a
foreclosure claim. In addition to the principal and interest owed on the note, the court
awarded the plaintiff "those sums advanced by Plaintiff for costs of evidence of title
required to bring this action, for payment of taxes, insurance premiums and expenses
incurred for property inspections, appraisal, preservation and maintenance," but did not
specify the amount of those advances in the judgment entry. Id. at ¶ 6. On appeal, the
Fifth District Court of Appeals held that the judgment entry was not a final, appealable
order because the expenses incurred for property inspections, appraisal, preservation and
maintenance were "not easily ascertainable" and were required to be specifically set forth
for the order to be final and appealable. Id. at ¶ 7. The Supreme Court accepted the case
following certification of a conflict between the Fifth District's decision and another
decision from the Seventh District Court of Appeals. Id. at ¶ 8.
{¶ 10} The Supreme Court noted that, in order for a foreclosure judgment to
constitute a final order, "it must address the rights of all lienholders and the
responsibilities of the mortgagor." Id. at ¶ 20. The court concluded that, although the
judgment entry issued by the trial court did not specify the exact amounts due for the
advances paid by the plaintiff, it foreclosed on the mortgage, set forth the principal sum
and interest accrued on the note, and listed the categories of future expenses for which the
defendants would be liable. Id. at ¶ 22. Therefore, the order was final and appealable
because "all that remained was for the trial court to perform the ministerial task of
calculating the final amounts that would arise during confirmation proceedings." Id. at
¶ 20. If the defendants wished to contest the amounts expended for the categories set
forth in the foreclosure judgment, they could do so during proceedings to confirm the
foreclosure sale and could appeal the order confirming the sale. Id. at ¶ 43. The Supreme
Court reversed the Fifth District's decision, holding that "[a] judgment decree in
foreclosure that allows as part of recoverable damages unspecified amounts advanced by
No. 13AP-983 5
the mortgagee for inspections, appraisals, property protection, and maintenance is a final,
appealable order pursuant to R.C. 2505.02(B)(1)." Id. at paragraph one of the syllabus.
{¶ 11} In this case, the trial court awarded unspecified damages for "all advances
made for the payment of real estate taxes and assessments and insurance premiums."
(Judgment Entry, 2.) These were the same types of damages left unspecified in
Roznowski. Therefore, the judgment entry in this case is a final, appealable order. See
Chase Home Fin., L.L.C. v. Smith, 11th Dist. No. 2013-P-0017, 2014-Ohio-3767, ¶ 7
(applying Roznowski).
{¶ 12} Civ.R. 54(B) provides in relevant part that "[w]hen more than one claim for
relief is presented in an action whether as a claim, counterclaim, cross-claim, or third-
party claim, and whether arising out of the same or separate transactions, or when
multiple parties are involved, the court may enter final judgment as to one or more but
fewer than all of the claims or parties only upon an express determination that there is no
just reason for delay." In her answer to the complaint, appellant asserted various
counterclaims and third-party claims. The trial court appears to have dismissed some of
the counterclaims and third-party claims. To the extent any claims, counterclaims, or
third-party claims remain pending in this action, however, the trial court satisfied the
requirements of Civ.R. 54(B) by certifying in the judgment entry that there was no just
reason for delay.
{¶ 13} Accordingly, we overrule appellant's third assignment of error.
{¶ 14} Next, we turn to appellant's second assignment of error, in which she
asserts that the trial court erred by granting appellee's summary judgment motion. We
review a grant of summary judgment de novo. Capella III, L.L.C. v. Wilcox, 190 Ohio
App.3d 133, 2010-Ohio-4746, ¶ 16 (10th Dist.), citing Andersen v. Highland House Co.,
93 Ohio St.3d 547, 548 (2001). "De novo appellate review means that the court of appeals
independently reviews the record and affords no deference to the trial court's decision."
Holt v. State, 10th Dist. No. 10AP-214, 2010-Ohio-6529, ¶ 9 (internal citations omitted).
Summary judgment is appropriate where "the moving party demonstrates 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) reasonable minds can come to but one conclusion, and that conclusion is
adverse to the party against whom the motion for summary judgment is made." Capella
No. 13AP-983 6
III at ¶ 16, citing Gilbert v. Summit Cty., 104 Ohio St.3d 660, 2004-Ohio-7108, ¶ 6. In
ruling on a motion for summary judgment, the court must resolve all doubts and construe
the evidence in favor of the nonmoving party. Pilz v. Ohio Dept. of Rehab. & Corr., 10th
Dist. No. 04AP-240, 2004-Ohio-4040, ¶ 8. See also Hannah v. Dayton Power & Light
Co., 82 Ohio St.3d 482, 485 (1998) ("Even the inferences to be drawn from the underlying
facts contained in the evidentiary materials, such as affidavits and depositions, must be
construed in a light most favorable to the party opposing the motion."). Therefore, we
undertake an independent review to determine whether appellee was entitled to judgment
as a matter of law.
{¶ 15} A party seeking summary judgment in a foreclosure action must
demonstrate that it was entitled to enforce the note and had an interest in the mortgage
on the date the complaint in foreclosure was filed. See Fed. Home Loan Mtge. Corp. v.
Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017, ¶ 28 ("[B]ecause [Federal Home
Loan] failed to establish an interest in the note or mortgage at the time it filed suit, it had
no standing to invoke the jurisdiction of the common pleas court."); Bank of New York
Mellon v. Watkins, 10th Dist. No. 11AP-539, 2012-Ohio-4410, ¶ 18 ("An entity must prove
that it was the holder of the note and mortgage on the date that the complaint in
foreclosure was filed, otherwise summary judgment is inappropriate."); see also
Nationstar Mtge., L.L.C. v. Van Cott, 6th Dist. No. L-12-1002, 2012-Ohio-5807, ¶ 19
(concluding that a party seeking foreclosure was not entitled to summary judgment
because there was a genuine issue of material fact as to whether it owned the note or was
otherwise entitled to enforce the note at the time the foreclosure complaint was filed).
Appellant asserts that there was a genuine issue of material fact in this case regarding
whether appellee was entitled to enforce the Note. Appellant points to the fact that
appellee provided two versions of the Note, each bearing different endorsements. The
version of the Note attached to the original complaint includes an allonge bearing an
undated endorsement from PNC Bank, National Association, as successor by merger to
First Franklin (the original lender), to appellee. The second version of the Note, which
was filed with the trial court as an amended exhibit to the original complaint and also
filed as an exhibit to appellee's amended complaint, does not have an allonge but has two
endorsements stamped directly on the Note below the signature area on the last page. On
No. 13AP-983 7
the left is an undated endorsement from First Franklin to First Franklin Financial
Corporation. On the right is an undated endorsement from First Franklin Financial
Corporation to appellee.
{¶ 16} Appellant argues that the two versions of the Note create a genuine issue of
material fact as to whether appellee was entitled to enforce the Note, pointing to U.S.
Bank, N.A. v. McGinn, 6th Dist. No. S-12-004, 2013-Ohio-8, and Deutsche Bank Natl.
Trust Co. v. Holden, 9th Dist. No. 26970, 2014-Ohio-1333. In McGinn, the Sixth District
Court of Appeals reversed a grant of summary judgment in a foreclosure case, concluding
that a genuine issue of material fact existed because one version of the promissory note
was attached to the complaint and another version was attached to the motion for
summary judgment. The plaintiff seeking foreclosure was not the original lender named
in the note. The plaintiff attached a copy of the note to the complaint bearing certain
endorsements; it then attached to its motion for summary judgment another copy of the
note bearing additional endorsements that were not present on the version attached to
the complaint. McGinn at ¶ 22. The plaintiff provided an affidavit from a litigation analyst
for the servicer of the loan attesting to his belief that an earlier version of the note was
inadvertently attached to the complaint. Id. at ¶ 23. The court of appeals noted that
personal knowledge, rather than belief, was required for an affidavit in support of a
motion for summary judgment. The court further concluded that the inconsistency in the
two notes was sufficient to show a genuine issue of material fact and precludes summary
judgment. Id. at ¶ 25. Similarly, in Holden, the plaintiff was not the original lender. The
plaintiff attached an unendorsed copy of a promissory note to its foreclosure complaint.
Holden at ¶ 3. The plaintiff later filed a motion for summary judgment, attaching a copy of
the note containing an undated blank endorsement made by the original lender. Id. at
¶ 9. The Ninth District Court of Appeals reversed the trial court's grant of summary
judgment, concluding that there was a genuine issue of material fact as to whether the
plaintiff was entitled to enforce the note. Id. at ¶ 15.
{¶ 17} In support of its motion for summary judgment, appellee argued that the
present case is similar to Deutsche Bank Natl. Trust Co. v. Najar, 8th Dist. No. 98502,
2013-Ohio-1657, in which the Eighth District Court of Appeals concluded that "[t]he mere
fact that there were two different copies of the note in the record—one with endorsements
No. 13AP-983 8
and one without—does not mandate a finding that one of the notes was 'unauthentic' or
otherwise preclude summary judgment." Najar at ¶ 59. In Najar, the plaintiff, which was
not the original lender, attached an unendorsed copy of a promissory note to its
foreclosure complaint. Id. at ¶ 7. The plaintiff subsequently filed a motion for summary
judgment, attaching a copy of the note which contained a blank endorsement. Id. at ¶ 58.
In an affidavit, a vice president of the plaintiff's mortgage loan servicer attested that the
unendorsed copy of the note attached to the complaint was from the "closing file," which
contained copies of the relevant documents as they existed on the day the loan was closed,
while the copy of the note endorsed in blank was from the "collateral file." Id. at 59. The
Eighth District Court of Appeals concluded that this was a credible explanation for the
difference between the two notes and that other facts and documents in the record
supported the explanation. Id. at ¶ 59-60.
{¶ 18} Unlike Najar, in the present case, appellee did not offer any explanation of
the different versions of the Note. McCloskey's affidavit in support of the motion for
summary judgment attests that appellee had possession of the Note and Mortgage prior to
the filing of the complaint and addresses the assignment history of the Mortgage, but fails
to address the two versions of the Note. Further, each version of the Note in this case
contains endorsements, but the endorsements are different between the two versions.
Absent any explanation for the discrepancy between the two versions of the Note, and
construing the evidence in favor of appellant as the party opposing summary judgment, it
appears that there is a genuine issue of material fact as to whether appellee was entitled to
enforce the Note.
{¶ 19} Appellant also argues that the trial court committed plain error by granting
summary judgment in an amount that exceeds the face value of the Note. Appellee argues
that appellant waived this argument by failing to raise it before the trial court, which
appellant appears to concede by arguing that the trial court committed plain error.
Generally, "in the absence of plain error, failure to draw the trial court's attention to
possible error at a time at which the error could have been corrected results in a waiver of
the issue for purposes of appeal." In re H.D.D., 10th Dist. No. 12AP-134, 2012-Ohio-6160,
¶ 71. In civil cases, the plain-error doctrine will only apply in the "extremely rare case
involving exceptional circumstances where error, to which no objection was made at the
No. 13AP-983 9
trial court, seriously affects the basic fairness, integrity, or public reputation of the judicial
process, thereby challenging the legitimacy of the underlying judicial process itself."
Goldfuss v. Davidson, 79 Ohio St.3d 116 (1997), syllabus. "The plain-error doctrine
permits correction of judicial proceedings when error is clearly apparent on the face of the
record and is prejudicial to the appellant." Reichert v. Ingersoll, 18 Ohio St.3d 220, 223
(1985).
{¶ 20} Although appellee provided two versions of the Note bearing different
endorsements, both versions indicate that the principal amount of the loan was $91,520,
when the Note was issued on April 1, 2005. In both the complaint and the amended
complaint, appellee asserted that it was entitled to judgment in the amount of
$103,971.23, plus interest, along with other costs, charges, and advances. The trial court's
summary judgment order found that appellant owed $103,971.23 on the Note, plus
interest, and granted judgment in favor of appellee in that amount, along with "all late
charges due under the Note and Mortgage, all advances made for the payment of real
estate taxes and assessments and insurance premiums, and all costs and expenses
incurred for the enforcement of the Note and Mortgage, except to the extent the payment
of one or more specific such items is prohibited by Ohio law." (Judgment Entry, 2.) Thus,
the trial court awarded judgment in an amount greater than the face value of the Note.
{¶ 21} Appellee argues that the McCloskey affidavit attested to the amount due on
the loan and identified and authenticated a payment history for the loan account,
suggesting that the McCloskey affidavit provided evidence supporting its claim for
judgment in excess of the face value of the Note. In the affidavit, McCloskey asserted that
he had examined and had personal knowledge of appellant's loan account and that there
was an unpaid principal balance of $103,971.23. He also attested that a copy of the
payment history attached as an exhibit to the affidavit was a true and accurate
representation of the activity on appellant's loan account. The purported account
statement reflects a principal balance of $103,971.23, and includes multiple pages
detailing transactions and adjustments to the account. A significant portion of the account
statement consists of a spreadsheet that is reproduced in a format and size that makes it
effectively illegible and incomprehensible. Thus, appellee effectively offers no explanation
for the discrepancy between the face value of the Note and the purported principal
No. 13AP-983 10
balance claimed in the complaint, a difference of more than $12,000. Under these
circumstances, absent any explanation for the discrepancy between the face value of the
Note and the amount sought in the complaint, we conclude that the trial court erred by
awarding judgment in excess of the face value of the Note and that the error is prejudicial
to appellant and clearly apparent from the record. Reichert at 223. Given the stakes in a
foreclosure action, this type of error seriously affects the basic fairness and public
reputation of the judicial process. Therefore, we find that the trial court committed plain
error by granting judgment in appellee's favor in an amount exceeding the face value of
the Note.
{¶ 22} Accordingly, we sustain appellant's second assignment of error.
{¶ 23} Finally, in appellant's first assignment of error, she asserts that the trial
court erred by denying her motion to strike one of the exhibits to the McCloskey affidavit
for lack of authentication. Because we conclude that the trial court erred by granting
summary judgment in favor of appellee, appellant's first assignment of error is rendered
moot.
{¶ 24} For the foregoing reasons, we sustain appellant's second assignment of
error and overrule her third assignment of error. Appellant's first assignment of error is
rendered moot. We reverse the judgment of the Franklin County Court of Common Pleas
and remand this matter to that court for further proceedings in accordance with law and
consistent with this decision.
Judgment reversed; cause remanded.
TYACK and O'GRADY, JJ., concur.
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