With Trust Law.

8/20/2019 With Trust Law.

1/76

IN THE COURT OF APPEALS OF OHIO SECOND APPELLATE DIVISION

Wells Fargo Bank NA. as Trustee for Securitized C.A. CaseNo. 023136 Asset Backed ecei!a"les ##C 2006$%&1

'ortgage &ass$T(roug( Certi)cates*Series 2006 %&1

&lainti+*

!. ,o(n A. eed* et al.

-efendant

DEFENDANTS MOTION TO VACATE

No co/es -efendant ,o(n A. eed -efendant* for t(is

/otion to !acate t(is Courts No!e/"er 13t( 200 4udg/ent

entr5 granting &lainti+ Wells Fargo Bank NA. as Trustee for

Securitized Asset Backed ecei!a"les ##C 2006$%&1 'ortgage

&ass$T(roug( Certi)cates* Series 2006 %&1 &lainti+7 /otion

of 4udg/ent on t(e "asis of t(e State of %(ios Su8re/e Courts

%cto"er 31* 2012 (olding in Federal 9o/e #oan 'ortgage

Cor8oration !. Sc(artzald* 2012$%(io$:01;.

Respectfully submitted

!!!!!!!!!!!!!!!!!!!!!!!!

"#$% A& Reed


2/76

SERVICE

A t'ue (%d e)(ct c#py #f t$e f#'e*#i%* $(s bee% se'+edt$is ,-t$ d(y #f Au*ust ./,/ +i( em(il (s f#ll#0s1

Atty2s f#' Pl(i%ti3

A/elia A. Boer 0013


3/76

I%t'#duct#'y St(teme%t

As an initial /atter* -efendant freel5 acknoledges t(at

&lainti+ )led t(is lasuit in 200* and /uc( litigation (as since

ensued* including an a88eal and /otion for relief fro/ 4udg/ent

8ursuant to Ci!. . 60B. T(is does not* (oe!er* c(ange t(e

fact t(at t(e Court did not (a!e 4urisdiction to (ear t(is /atter

on Fe"ruar5 2;t(* 200* t(e date &lainti+ )led t(e foreclosure

co/8laint* or at an5 8oint t(ereafter* it(out &lainti+ (a!ing

7'st "een assigned or ot(erise "een legall5 !ested as t(e true

9older in -ue Course of t(e note /ortgage in Huestion.

-efendant su"/its t(at &lainti+ is and as not.

I& Rele+(%t F(ctu(l 8(c5*'#u%d

,&O% Feb'u('y .9t$ .//: ;E)$t Pl(i%ti3 7led

t$e f#'ecl#su'e c#mpl(i%t i% t$is (cti#%&

2. As of 'arc( 6t(* 200 t(e note /ortgage at issue (ad

not "een assigned fro/ (oe!er t(e 8re!ious

(olderIoner as* to &lainti+ (erein.

3. %n August 26t(* 200 &lainti+ )led a Notice of

Assign/ent of 'ortgage (ic( contains t(erein also an

Assign/ent of Note ?( C7* (ic( contained a co85

of a recorded assign/ent of -efendants note

/ortgage to &lainti+. T(e Assign/ent*7 attac(ed

(ereto as ?(. B7.


4/76

-efendant (as continuousl5 (eld t(at &lainti+ in t(e case

at Bar lacked t(e ca8acit5 to e!oke t(e 4urisdiction of t(e court

in t(is actionJ1 (ence &lainti+ lacked standing to initiate t(is

suit.2

II& L(0 (%d A'*ume%t

T(ere are /ore issues it( t(e 8ost dated assign/ent

t(an 4ust t(ose addressed in t(e Sc(artzald -ecision.

T$e POST DATED ASSI?NMENT issue @ ,&

As is e!idenced in &lainti+s alleged Assign/ent7 fro/

%8tion %ne 'ortgage Cor8. to T(e Trust7 t(e date of t(e

transference or Assign/ent7 of "ot( t(e Note 'ortgage did

not occur until after t(e suit to foreclose (ad alread5 "een )led.

Dn Federal Home Loan Mortgage Corporation v.Schwarzwald, et al.* a case recentl5 decided "5 t(e%(io Su8re/e Court* 8lainti+ "ank "roug(t aforeclosure lasuit "efore it o"tained an assign/ent of

/ortgage securing defendant (o/eoners loan.1 August 15, 2008, Memorandum in Opposition to Plaintiffs Motion for Summary Judgment

• Oto!er 15, 2008, "eply to #omplaint• $o%em!er 21,2008, Motion to &aate a &oid Judgment

• 'eem!er 1, 2008, Memorandum in Opposition to Plaintiffs Memorandum in Opposition to 'efendant

Jo(n A) "eed*s Motion to &aate• January 1+, 200, Motion for "eonsideration• April 1,2010, Amended Motion to Appeal "uling of t(e -o.er #O/l1• April 30, 2010, Appliation for mergeny "eonsideration• e!ruary 1,2011, Motion to &aate Judgment ntry

2 #i%)") 10'4 reuires atta(ment to t(e pleading of a opy of t(e .ritten aount or any ot(er .ritten

instrument .(en a laim or defense is founded on t(ose douments)

Fed. Home Loan Mtge. Corp. v. Schwartzwald , 20126O(io65017) Standing is reuired to in%oe t(e 9urisdition of t(e ommon pleas ourt, and it is determined as of t(e filing of t(e omplaint)4Wells Fargo v. Burrows, 20126O(io655 t( 'ist)4A plaintiff must atta( douments e%idening t(e rig(tto enfore !ot( t(e note and t(e mortgage to t(e omplaint to s(o. standing, or !e su!9et to dismissal)4

HSBC Bank USA !.A. v. Sherman, 20136O(io6220 1st 'ist)4'etermination of standing s(ould !e made !ased on atta(ments to a omplaint, !ut standing in a forelosure ation an !e esta!lis(ed !y s(o.ing t(erig(t to enfore eit(er t(e note or mortgage) Also adopted in t(e Seond, ift(, le%ent(, and :.elft('istrits)4

Lu"an v. #e$enders o$ W%ldl%$e, 50 /)S) 555 124 :o sur%i%e a motion for summary 9udgment for la ofstanding, a party must set fort( !y affida%it or ot(er e%idene speifi fats to support its laim)4

http://www.supremecourt.ohio.gov/LegalResources/Rules/civil/CivilProcedure.pdfhttp://www.supremecourt.ohio.gov/LegalResources/Rules/civil/CivilProcedure.pdfhttp://www.supremecourt.ohio.gov/rod/docs/pdf/0/2012/2012-ohio-5017.pdfhttp://www.supremecourt.ohio.gov/rod/docs/pdf/0/2012/2012-ohio-5017.pdfhttp://www.supremecourt.ohio.gov/rod/docs/pdf/9/2012/2012-ohio-5995.pdfhttp://www.supremecourt.ohio.gov/rod/docs/pdf/9/2012/2012-ohio-5995.pdfhttp://www.supremecourt.ohio.gov/rod/docs/pdf/1/2013/2013-ohio-4220.pdfhttp://www.supremecourt.ohio.gov/rod/docs/pdf/1/2013/2013-ohio-4220.pdfhttp://scholar.google.com/scholar_case?case=10150124802357408838&q=504+U.S.+555&hl=en&as_sdt=6,36http://scholar.google.com/scholar_case?case=10150124802357408838&q=504+U.S.+555&hl=en&as_sdt=6,36http://www.supremecourt.ohio.gov/LegalResources/Rules/civil/CivilProcedure.pdfhttp://www.supremecourt.ohio.gov/rod/docs/pdf/0/2012/2012-ohio-5017.pdfhttp://www.supremecourt.ohio.gov/rod/docs/pdf/9/2012/2012-ohio-5995.pdfhttp://www.supremecourt.ohio.gov/rod/docs/pdf/1/2013/2013-ohio-4220.pdfhttp://scholar.google.com/scholar_case?case=10150124802357408838&q=504+U.S.+555&hl=en&as_sdt=6,36


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-efendants /aintained t(at 8lainti+ lacked standing tosue /uc( as -efendant 8re!iousl5 contended in t(iscase "ecause t(e assign/ent of /ortgage (ad not"een recorded 8rior to t(e )ling of t(e lasuit. &lainti+ as assigned t(e /ortgage !ia for/al assign/ent* as(ere* onl5 (fte' t(e )ling of t(e lasuit. T(e trial court

entered a 4udg/ent in fa!or of 8lainti+* and t(e Second-istrict Court of A88eals a+ir/ed.

T(e Su8re/e Court re!ersed* (olding t(at standingis a 4urisdictional reHuire/ent t(at /ust "e satis)ed toe!en initiate a foreclosure lasuitK

e 'ec#*%iBed t$(t st(%di%* is (u'isdicti#%(l 'eui'eme%t2 i% State ex rel.

Dallman v. Franklin Cty. Court of Common Pleas

;,9G> G O$i# St& .d ,9- (%d 0e st(ted1 &

(Schwarzwald, (tt(c$ed $e'et# (s E)$&


6/76

9ence* in accordance it( t(e ruling of t(e Su8re/e

Court of t(e State of %(io* (en &lainti+ )led t(is lasuit on

Fe"ruar5 2;t( 200* &lainti+ lacked t(e ca8acit5 to in!oke t(e

4urisdiction of t(e court or in ot(er ords* &lainti+ did not (a!estanding to in!oke t(e 4urisdiction of t(e court7 "ecause

&lainti+ de"t collector (ad not 5et "een assigned t(e /ortgage

and note* and for reasons stated in s8eci)cit5 "elo it could not

t(en nor can it e!er cure t(is lack of standing t(roug( a later

)ling of t(e /ortgage assign/ent as it atte/8ted to do on

'arc( 2;t(* 200. Id. at 8ara.


7/76

%n ,une =t(* 200:* 9B assigned all of t(eir rig(ts to

t(e note and /ortgage to %8tion %ne 'ortgage Cor8oration*

%8tion %ne7.

%8tion %ne t(en assignsIsellsItransfers3 all of t(eir rig(ts

to t(e N%T? 'ortgage to Barcla5s Bank S8onsor (o t(en

"undles t(e Note 'ortgage along it( a88roi/atel5 :*000

ot(er like kind in!est/ents and uses t(e entire "undle to create

a ne )nancial instru/ent called a S8ecial &ur8ose >e(icle

S&>* (ic( is designed to "e e!entuall5 de8osited into a

?'DC Trust.

Barcla5s Bank t(en sells<

and transfers all of t(eir rig(tsto t(e contents of t(e S&> containing -efendants alleged Note

'ortgage to t(e securitized trusts -e8ositor*: Securitized

Asset Backed ecei!a"les ##C7 SAB7 (o t(en de8osits and

transfers all of t(eir rig(ts t(e notes and /ortgages in t(e S&> 6

to t(e Trust. ;

%8tion %ne t(en alleges to (a!e assigned t(e note and

/ortgage to &lainti+ "5 assign/ent eecuted 'arc( ;t(* 200.

&lainti+ is t(e de"t collector trustee for a securitized trust

entitled Securitized Asset Backed ecei!a"les ##C 2006$%&1

3 As .it( almost all of Plaintiff;s doument su!missions, t(e douments Plaintiff su!mits t(at areto !e representati%e of t(e transfer of t(e $ote < Mortgage from Option One to =arlay;s =anare all unsigned and unaut(entiated so no >true? met(od of transfer is e%en represented) =/:, t(eontrolling -a. @"S < $) P:-4 !ot( reuire full sales and transfer of all rig(ts and o.ners(ip

!efore a true seuritiBation of t(e notes and mortgages into t(e trust an eCist and t(e :rust;sontrolling doument, t(e PSA also mandates a omplete e%identiary trail of all transfers andDorassignments of !ot( t(e note and mortgage !efore !eing allo.ed to !e deposited into t(e trust) Same as ootnote 3 a!o%eE no signed or aut(entiated ontrat)5 Same as ootnote 3 a!o%eE no signed or aut(entiated ontrat)+ Same as ootnote 3 a!o%eE no signed or aut(entiated ontrat)7 @t is important (ere to note t(at in ea( transation listed a!o%e, Plaintiff also produes noreeipts, no deli%ery aeptane, not(ing .(atsoe%er to s(o. proof of on%eyane or transfer ornegotiation or sale of, in t(e end, an alleged F5 =illion .ort( of finanial instruments from any party to any ot(er party .(atsoe%er)

7


8/76

'ortgage &ass$T(roug( Certi)cates* Series 2006 %&17* t(e

Trust7.

THE TRUST

T(e Trust as for/ed as a !e(icle for 8urc(asing

/ortgage "acked securities. T(e Trust is su"4ect to t(e ter/s of

t(e trust indenture controlling docu/ent /e/orialized in a

docu/ent titled t(e &ooling and Ser!icing Agree/ent* t(e

&SA7. T(e &SA as signed "5 t(e -e8ositor* Securitized AssetBacked ecei!a"les ##C SAB7* "5 t(e Ser!icer* %8tion %ne*

and "5 t(e Trustee* W?##S FA% BAN* NA* and is dated

,anuar5 1* 2006.

T(e &SA sets fort( t(e /anner in (ic( /ortgages ould

"e 8urc(ased "5 t(e trust* as ell as t(e duties of t(e trustee

and t(e ser!icer. Dt is t(e trusts on controlling docu/ent.

Section 2.01* su"section 1 of t(e &SA reHuires t(at

transfer and assign/ent of /ortgages /ust "e e+ected "5 (and

deli!er5* for de8osit it( t(e Trustee it( t(e original note

endorsed in "lank.

Section 2.0: of t(e &SA reHuires t(at t(e -e8ositor

transfer all rig(t* title* interest in t(e /ortgages to t(e Trustee*

on "e(alf of t(e trust* as of t(e Cl#si%* D(te. T(e Cl#si%*

D(te (s p'#+ided i% t$e PSA is "(%u('y .-t$ .//-.

T(e -ate of t(e Assign/ent of 'ortgage and Note

referenced infra* is o!er 2 5ears 8ast t(e date alloed for

8


9/76

de8osits into t(e trust. Df t(e trust does not 8erfect legal title "5

taking 8(5sical 8ossession of t(e notes and /ortgages* t(e

Dnternal e!enue Code* s8eci)call5 .- U&S&C& :-/?;d>;,>*

8ro!ides for a 100 8ercent ta 8enalt5 on t(ose non$co/8l5ing

cas( Mos.

As listed in t(e &SA* t(e -e8ositor in t(e case at Bar as

Securitized Asset Backed ecei!a"les ##C7 SAB. Wit(in

t(e sc(e/a of a securitized 'BS trust* t(e -e8ositor is t(e

necessar5 entit5 in t(e title c(ain t(at 8ro!ides t(e Bankru8tc5

re/oteness necessar5 to t(e Notes and t(e 'ortgages

de8osited into t(e trust* so t(at t(e trust can gain a AAA rating

it( t(e securities ratings agencies. T(e -e8ositor is also t(e

designated sole de8ositor to t(e trust.

Dn t(e case at Bar* &lainti+ s(os not 1 iota of 8roof t(at

said -e8ositor e!er recei!ed -efendants Note andIor 'ortgage

% t(e alleged and 8re!iousl5 allegedl5 created S&> containing

-efendants alleged Note andIor 'ortgage*


said -e8ositor SAB e!er de8osited t(e alleged 'ortgage and

Note into t(e &lainti+ Trust.


said &lainti+ Trust e!er transferred t(e alleged 'ortgage and

Note to t(e &lainti+ Trusts Trustee* Wells Fargo Bank N.A. (o

is t(e &lainti+ in t(is case.

Dn fact* Dn t(e case at Bar* &lainti+ s(os not 1 iota of

8roof t(at t(e alleged loan as e!er transferred to Barcla5s

Bank for securitization eit(erO

http://www.law.cornell.edu/uscode/text/26/860Ghttp://www.law.cornell.edu/uscode/text/26/860G


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But it is essential for t(e courts to understand t(at "efore

t(e alleged note /ortgage could "e 8laced it(in an5 ?'DC

trust* eac( of t(ese ste8s as /andated "5 N.G. ?.&.T.#* D..C.

reHuire/ents AN- "5 t(e contractual ter/s found it(in t(e&SA (ic( as signed and agreed u8on "5 t(e 8artici8ants of

t(e securitization. T(e rules for t(e de8osit of all of t(e Notes

'ortgages allegedl5 (eld it(in t(e 8ool of assets oned "5 t(e

trust are strict and are /andated to "e ad(ered to 8unctiliousl5.

As stated in t(e NGSBA NG Business #a ,ournal P

Su//er 2012 P>ol. 16 PNo. 1 8g. ;;J

>:(e Mortgage SeuritiBation :ransation @n 18+, #ongress (anged t(e taCode) One of t(ese (anges .as t(e reation of t(e "eal state Mortgage@n%estment #onduit "M@#4) A "M@# or speial purpose %e(ile SP&4 is anentity t(at is reated for t(e speifi purpose of !eing a taC6free pass6t(roug(for interest inome generated !y pooled mortgages) :(is allo.ed in%estors to pur(ase s(ares or ertifiates in a mortgage pool t(at .as only taCed one att(e in%estor le%el) :(e "M@# rules allo.ed t(e mortgage pools to olletinterest inome from t(e pool and dis!urse t(at inome to t(e ertifiate (olderstaC6free at t(e pool le%el) Prior to t(e "M@#, interest inome from pooledmortgage in%estments .ere taCed t.ie, one at t(e pool le%el and again at t(e

in%estor le%el)"M@# rules are %ery speifi,8 and to ualify as a "M@# under federal and

state taC odes, t(e SP& (ad to meet %ery stringent reuirements) Git( respetto "M=S t(e ontrolling trust doument is no.n as t(e Pooling and Ser%iingAgreement PSA4) One funtion of t(e PSA is to esta!lis( t(e rules go%erningt(e trust su( t(at t(e trust;s ati%ities and management onform to @"# 8+0) @ft(e trust did not onform, it ould lose its "M@# status and its taC6free pass6t(roug( status)?

$S=A $ =usiness -a. Journal HSummer 2012 H&ol) 1+ H$o) 1 pg) 77

8 @"# 8+0 reuires t(at, among ot(er t(ings, t(e "M@# trust !e a >losed entity? and >!anrupty remote)?

$e. or;s state Po.ers < :rust la.s .ere (osen !y "M=S sponsors in t(e PSAs4 as t(e >ontrolling?statutes to go%ern "M@# trusts, as t(e P:-;s rules and onomitant ommon la. esta!lis( >ommon la.trusts? t(at onform t(e "M@# taC free pass6t(roug( reuirements) $S=A $ =usiness -a. Journal HSummer 2012 H&ol) 1+ H$o) 1 end note 7

@f a taC6free pass6t(roug( trust lost its "M@# status, t(e taC penalties to an in%estor t(at pur(asedertifiates .ould !e de%astating) @t .ould also trigger an e%ent alled a >put !a)? :(ere .as onsidera!leargument o%er .(et(er t(ese trusts .ere >!usiness? trusts or ommon la. trusts, !ut t(e trend appears to !e a

9udiial reognition t(at t(ey are in fat ommon la. trusts) $S=A $ =usiness -a. Journal HSummer2012 H&ol) 1+ H$o) 1 end note 8

10


11/76

T(e Trust agree/ent knon as t(e &ooling and

Ser!icing Agree/ent &SA sets fort( in its entiret5 (o t(e

trust acHuires and is alloed to acHuire its assets and t(e Trust

agree/ent sets fort( "ot( 8oers and t(e li/its of t(e 8oers

of t(e Trust.

T(e &SA 10 reHuires t(at eac( 8art5 to t(e sale of t(e

/ortgage loans endorse eac( 8ro/issor5 note to t(e net 8art5

in t(e c(ain of title until t(e 8ro/issor5 note is endorsed to t(e

Trustee for t(e "ene)t of t(e Trust. T(is reHuire/ent is

included in t(e &SA and is found at Section 2.10.

According to t(e reHuire/ents set fort( in t(e Trust

Agree/ent &SA t(ere /ust "e a series of endorse/ents of t(e

8ro/issor5 note reMecti!e of eac( 8art5 (o (ad an oners(i8

interest in t(e 8ro/issor5 note cul/inating it( a "lank

endorse/ent fro/ t(e de8ositor at t(e !er5 /ini/u/.

T(is c(ain of endorse/ents* or rat(er t(e lack t(ereof* in

order to co/8l5 it( t(is &SA* ould (a!e (ad to "e co/8lete

on or "efore t(e closing date7 of t(e trust s8eci)ed it(in t(e

&SA of t(is securitization "ut in no e!ent /ore t(an =0 da5s

fro/ t(e closing date of t(e trust 8ursuant to section 2.02a of

t(e &SA. T(e a"sence of t(ese endorse/ents on t(is 8ro/issor5

note is not onl5 !er5 co/8elling 8roof of lack of note (older

status* "ut also 8roof of &lainti+s fraud in 8roducing t(e

Assign/ent of 'ortgage ?(i"it ?7 (ic( "5 t(e ter/s of t(e

trusts on go!erning docu/ent &SA cannot and does not

legall5 eist.

10 :(e :rust;s Pooling and Ser%iing Agreement is a Pu!li 'oument a%aila!le (ereE(ttpIDD...)seinfo)omDd"Sm+)%8()d)(tm

11

http://www.secinfo.com/dRSm6.v8h.d.htmhttp://www.secinfo.com/dRSm6.v8h.d.htm


12/76

Ender eit(er t(e ter/s of t(e trust* t(e contracts "eteen

t(e 8arties or ECC Q = it reHuires t(e c(ain of title "5 t(e

foreclosing entit5 to "e Huali)ed as a &?T?7 8erson entitled to

enforce. Dn ot(er ords* single endorse/ents in "lank* andclai/ing t(at an5 8art5 in 8ossession of a note* can enforce a

note* e!en a t(ief* does not ork.

T(e e!idence in t(e collateral )le s(os an utter and

co/8lete failure of t(e 8arties to t(is alleged securitization to

actuall5 con!e5 t(is alleged 8ro/issor5 note to t(is Trust as as

articulated "5 t(e -efendant in eac( and e!er5 8re!ious

8leading. T(e 8lainti+ Trust (as o+ered no 8roof of oners(i8

and t(e collateral )le 8ro+ered "5 t(e &lainti+ t(roug(

-isco!er5 clearl5 de/onstrates t(at t(is loan as not

securitized nor as it e!er transferred to t(is Trust.

T(e Court s(ould also "e aare t(at Sections 2.0; d.* e.*

(.* 3.01 c.* 3.1; (* :.02* c* .11 of t(e &SA are all s8eci)c to

t(e case at "ar (ic( set fort( furt(er e8licit restrictions on

t(e 8oers of t(e Trustee* -e8ositor and t(e Ser!icer of t(e

trust7 and (ic( 8ro(i"its t(e Trustee* -e8ositor and t(e

Ser!icer fro/ taking an5 action (ic( ould 4eo8ardize t(e

?'DC status of t(e Trust. T(ese t58es of li/itations are

co//on and are 8resent in t(is or a si/ilar for/ in e!er5

8ooling and ser!icing agree/ent (ic( seeks to create a

securitized trust t(at can clai/ t(e ta "ene)ts of ?'DC status

under t(e ES Ta Code.

An5 atte/8t to acce8t a transfer of t(is alleged

&ro/issor5 note after t(e ,anuar5 26* 2006* =0 da5 closing date

of t(e trust ould (a!e !iolated "ot( S?C code


13/76

t(e ?'DC 8ro!isions of t(e DS ta code 2+ /S# 8+0 A t(ru -for

a nu/"er of reasons.

a. First* t(e alleged loan is in default at t(is ti/e.

T(erefore t(e alleged loan cannot "e a Huali)ed

/ortgage loan7 under t(e DS ta code "ecause a

Huali)ed /ortgage loan is a 8erfor/ing /ortgage loan.

". Second* an atte/8ted transfer to t(e trust is no at

a 8oint in ti/e after t(e closing da5 of t(e Trust and

after t(e certi)cates ere issued* in e+ect* t(e &lainti+

ould "e clai/ing to (a!e transferred an asset to a

trust t(at (ad "5 its on ter/s "een closed for /oret(an 2 5ears at t(e ti/e t(e alleged transfer took 8lace.

c. T(ird* t(e alleged 8ro/issor5 note as ne!er

endorsed to t(e trust "5 t(e de8ositor and as suc( is

de!oid of t(e reHuired c(ain of endorse/ents reHuired

it(in t(e &SA and (ic( an5 reasona"le /arket

8artici8ant ould e8ect to "e 8resent for t(e

8ur8oses of esta"lis(ing t(e series of true sales set

fort( in t(e &SA to esta"lis( a (ole and co/8lete

c(ain of title of t(e 8ro/issor5 note for t(e 8ur8oses of

"ankru8tc5 re/oteness.

d. Fourt(* T(e clai/ t(at t(e alleged note (as "een

transferred to t(e Trust (en it is endorsed in "lank

si/8l5 Mies in t(e face of t(e /andator5 ter/s of t(e

&SA and is an etre/e de!iation fro/ t(e industr5

standards* custo/s and 8ractices (ic( 8re!ailed at all

ti/es /aterial to t(is transaction and (ic( 8re!ail

toda5.

13


14/76

e. Fift(* an5 transfer alloed to "e acce8ted into t(e

trust 8ast t(e trusts on cut$o+ date of de8osits

in!okes t(e rat(er draconian DS /andate of taing t(e

?'DC trusts assets not at t(e fa!ora"le rate of 0R

t(at t(e5 no en4o5* "ut at t(e rate of 100R of t(e !alue of t(eir assets causing* /assi!e )nancial losses

to t(e Certi)cate 9older Dn!estors.

?Huall5* "5 alloing a -e8osit into t(e trust after t(e

trusts closing date7 as &lainti+s Assign/ent of 'ortgage7

alleges* &lainti+ Wells Fargo Bank as Trustee again !iolates t(e

8lain language found it(in t(e &SA at section .11 titled Ta

'atters section 4 8ara. 6 (ic( reads in 8artJ

$eit(er t(e Ser%ier nor :rustee s(all i4 permit t(e reation of any interestsin any :rust "M@# ot(er t(an t(e regular and residual interests set fort( int(e Preliminary Statement,EEE or iii4 ot(er.ise no.ingly orintentionally tae any ation, ause t(e :rust und to tae any ation or fail totae or fail to ause to !e taen4any ation reasona!ly .it(in its ontrol andt(e sope of duties more speifially set fort( (erein, t(at, under t(e "M@#Pro%isions, if taen or not taen, as t(e ase may !e, ould A4 endanger t(estatus of any :rust "M@# as a "M@# or =4 result in t(e imposition of ataC upon any :rust "M@# or t(e :rust und inluding !ut not limited to t(etaC on &proh%'%ted transact%ons& as defined in Setion 8+0a424 of t(e #odeand t(e taC on ontri!utions to a :rust "M@# set fort( in Setion 8+0Kd4 of t(e #ode, or t(e taC on &net %ncome $rom $oreclosure propert(& 4 unless t(e:rustee reei%es an Opinion of #ounsel at t(e eCpense of t(e party seeing totae su( ation or, if su( party fails to pay su( eCpense, and t(e :rusteedetermines t(at taing su( ation is in t(e !est interest of t(e :rust und andt(e #ertifiate(olders, at t(e eCpense of t(e :rust und, !ut in no e%ent at t(eeCpense of t(e :rustee4 to t(e effet t(at t(e ontemplated ation .ill not,.it( respet to t(e :rust und or any :rust "M@# reated (ereunder,endanger su( status or, unless t(e :rustee determines in its sole disretion toindemnify t(e :rust und against su( taC, result in t(e imposition of su( ataC4)

To Su//arize* T(e closing date of t(is trust as ,anuar5

26* 2006. T(e creation date of &lainti+s Assign/ent of

'ortgage is 'arc( ;* 200 or 2: 'ont(s 8ast t(e trusts

1


15/76

closing date in !iolation of t(e trusts on controlling

docu/ent* t(e &ooling and Ser!icing Agree/ent &SA* D..C

regulations and t(e trusts controlling la* N.G. ?.&.T.#.

&lainti+s and &lainti+s counsel clearl5 s(o scienter "5

(a!ing acted in contra!ention to t(e trust "5J

1. creating or /anufacturing* forger5 it( intent to

defraud

2. atte/8ting t(e use of distri"ution and intent to

fraud

3. actuall5 su"/itting selling false* forged and

fraudulent docu/ents it(in t(is !er5 Court of #a

and ?Huit5* e!idenced not onl5 "5 t(eir late creation

date as it concerns legal standing to in!oke t(e

4urisdiction of t(e Court* "ut also in contra!ention of

DS ?'DC #a as e8lained a"o!e and again it(

t(e &SA at Section .11 Ta 'atters g (ic( readsJ

g not knoingl5 or intentionall5 take an5 action or

o/it to take an5 action t(at ould cause t(e

ter/ination of t(e ?'DC status of an5 Trust

?'DC created (ereunderJ


16/76

-efendants ansers 8leadings as in regard to t(e Co/8laint

in its entiret5 and fro/ its ince8tion.

%ne can onl5 gi!eIassign andIor transfer (at one (as to

gi!eIassign andIor transfer. %nl5 t(e legiti/ate rig(ts of t(etransferor can "e transferred to t(e transferee.

T(ere is no trust if t(e trust fails to acHuire t(e 8ro8ert5.

ermani v. !i"erty #ut. $ns. Co& A&D& .d -/G ;N&& App&

Di+& s( Dep('t& ,9>&

T$e POST DATED ASSI?NMENT .

As is referred to a"o!e* &lainti+s Assign/ent of

'ortgage7 and Note as created on 'arc( ; t(* 200. T(e

&lainti+ Trust* "5 !irtue of its ?'DC status (as (at is called

a Cut$%+ date7. T(e Trusts cut$%+ date7 is t(e date in (ic(

t(e Trust is /andated "5 la to sto8 acce8ting de8osits into it.

Aside fro/ t(e creation 8ost foreclosure issue related a"o!e* "5

t(e ter/s of t(e Trusts on &SA* N.G. ?.&.T.#. D..C.

regulations all /andate t(at t(is Assign/ent as !oid at its

ince8tion.

&lainti+ de"t collector in t(is case is a Trustee for a

'ortgage Backed Securitized Trust and as suc( &lainti+ Trustee

and t(e Trust are controlled in t(eir entiret5 "5 t(e Trust

Dndenture or controlling docu/ent* a docu/ent titled t(e

&ooling Ser!icing Agree/ent7 &SA.

1+


17/76

T(e Trust is also a eal ?state 'ortgage Dn!est/ent

Conduit ?'DC trust and as suc( is (eld in strict o"e5ance

it( "ot( D..S. ?'DC trust rules of #a and t(e #as and

ules created s8eci)call5 in accordance it( t(e Trust las of

eit(er t(e State of t(e Trusts creation or "5 t(e contractualc(oice of t(e 8artici8ants of t(e Trust* as is t(e case at "ar. T(e

agreed contractual c(oice of #a to "e ad(ered to "5 t(e

Trusts 8artici8ants in t(e case at Bar is Ne Gork Trust #a

?.&.T.#..

&lainti+s 8roduction of t(e Assign/ent7 is contrar5 to

Ne Gork #a and DS 60. Dn s(ort* t(e &lainti+ Trust

eercised a 8ro(i"ited act on 'arc( ;t(* 200.

T(e afore/entioned Assign/ent7 is contrar5 to t(e

Trusts Dnstru/ents and t(erefore >oid 8ursuant to DS 60A$

and Ne Gork ?states* &oers Trusts ?.&.T.# $ &art 2 $ Q ;

2.< and t(e Trusts Dndenture reHuire/ents.

LAny ation .(i( de%iates from t(e :rust douments is %oid) 762) At of

trustee in ontra%ention of trust @f t(e trust is eCpressed in t(e instrument reating

t(e estate of t(e trustee, e%ery sale, on%eyane or ot(er at of t(e trustee in

ontra%ention of t(e trust, eCept as aut(oriBed !y t(is artile and !y any ot(er

pro%ision of la., is %oidL)

No 8ossession of t(e Asset eists until t(ere (as "een a

deli!er5 and an acce8tance of t(e Asset and t(e gi!er of t(e

Asset (as relinHuis(ed all do/inion and control o!er t(e Asset

signif5ing a true sale of t(e Asset to t(e &lainti+ Trust t(ere"5

/aking t(e Asset* inter alia* "ankru8tc5 re/ote and securel5

it(in t(e Trust >ault.

17


18/76

&lainti+s 8ro+ered Assign/ent7 in t(e case at Bar

8ro!es onl5 t(at it as a forged and fa"ricated docu/ent

created solel5 for t(e 8ur8ose of facilitating t(e eas5 t(eft of

-efendants (o/e it(in a Court of #a.

The Trust is a REMIC Trust

T(e Trust as for/ed as a ?'DC trust&,, Ender t(e

?'DC 8ro!isions of t(e Dnternal e!enue Code DC7 t(e

closing date of t(e Trust is also t(e startu8 da5 for t(e Trust.

T(e closing dateIstartu8 da5 is signi)cant "ecause all assets of

t(e Trust are /andated to "e transferred to t(e Trust on or

"efore t(e closing date to ensure t(at t(e Trust recei!ed its

?'DC status. T(e DC 8ro!ides in 8ertinent 8art t(atK

>Cept as pro%ided in setion 8+0Kd424, if any amount is ontri!uted toa "M@# after t(e startup day, t(ere is (ere!y imposed a taC for t(e taCa!le yearof t(e "M@# in .(i( t(e ontri!ution is reei%ed eual to 100 perent of t(eamount of su( ontri!ution)?2+ /)S)#) 8+0Kd414)

T(e assign/ent of t(e note and t(e /ortgage (ic(

alleges t(e transfer of t(e Note 'ortgage in t(is case as

dated 'arc( ;t(* 200* (oe!er* 8ursuant to t(e ter/s of t(e

&SA t(e trust closed on ,anuar5 1st* 2006. Acce8tance of t(e

alleged Note 'ortgage into &lainti+ Trust at t(e date s(on

on &lainti+s Assign/ent is in !iolation of DC 60d2 and as

suc( is /andated to "e declared >%D- "5 t(e ter/s found it(in

t(e &SA and "5 N.G. ?.&.T.#. D..C. regulations.

11 :(e @nternal "e%enue #ode pro%ides t(at t(e terms real estate mortgage in%estmentonduit; and "M@#; mean any entityN14 to .(i( an eletion to !e treated as a "M@# appliesfor t(e taCa!le year and all prior taCa!le years, 24 all of t(e interests in .(i( are regular interestsor residual interests, 34 .(i( (as 1 and only 14 lass of residual interests and all distri!utions, if any, .it( respet to su( interests are pro rata4, 4 as of t(e lose of t(e 3rd mont( !eginning after t(e startup day and at all times t(ereafter, su!stantially all of t(e assets of .(i( onsist ofualified mortgages and permitted in%estments)

18


19/76

THE POST DATED ASI?NMENT .

Dn t(e case at "ar* Wells Fargo Bank* N.A* as Trustee of t(e

Trust7* clai/s to "e t(e sole and eclusi!e oner of t(esecuritized note /ortgage. Df Wells* as Trustee for t(e

Trust7 is in fact t(e true and legal oner* it /ust (a!e acHuired

legal title to t(e loan it(in =0 da5s of ,anuar5 1* 2006 t(e

trusts closing date7.

For clari)cation of t(e a"o!eJ Ne Gork la states t(at

transfers to a ?'DC trust after t(e closing date of t(e trust are

!oid. N.G. ?states* &oers and Trusts #a QQ 96,&,:* 96.&.

?l(s5i +& 8(%5 #f Ame'ic( N&A .* 21 Cal.8tr.


20/76

unless t(e 8art5 8er/itting t(e acHuisition and t(e ND'S net

interest /argin securities Dnsurer (a!e recei!ed an %8inion

letter fro/ counsel* at t(e 8art5Us e8ense* t(at t(e acce8tance

of t(e asset ill not a+ect t(e ?'DCUs status.

&lainti+ o+ers no suc( e!idence or 8roof t(at a letter (as

"een 8ro!ided to s(o co/8liance it( t(e reHuire/ents of t(e

&SA. &lainti+ (as 8ro!ided no e!idence of -e8ositors de8ositing

of t(e note and /ortgage into t(e Trust and (as 8ro!ided no

e!idence t(at t(e trustee (ad aut(orit5 to acHuire t(e note and

/ortgage (erein after t(e trust (ad closed.

-efendant asserts t(at t(e alleged transfer of t(e note

/ortgage to &lainti+ Trust (erein is !oid "ecause t(e note is

re8resented to (a!e "een acHuired after t(e trusts closing date

is a !iolation of t(e ter/s of t(e &SA.

W(ereas in %(io #a it /a5 "e 8er/issi"le for a 9older7

to eecute suit on a note andIor /ortgage* in t(e case at Bar t(e

alleged contraction "eteen 8arties is not "eing done "5 an

%(ioan against an %(ioanO Dnstead it is "eing co//itted "5 a

de"t collector (o is an alleged re8resentati!e of a NG Trust

(ic( is "ound "5 NG #as and as suc( it is u8 to &lainti+ to

8ro!e (e is indeed t(e true &?T? &erson ?ntitled To ?nforce of

t(e alleged Note 'ortgage.

Dn t(e case at Bar &lainti+ o+ers onl5 1 signed docu/ent*

4ust 1 8iece of 8a8er attesting to t(eir legiti/ac5 to foreclose*

t(eir rig(t to "e &?T?. T(at docu/ent is t(e 8ost dated* 8ost

created and )led it( t(e court /ont(s after foreclosure

initiation* Assign/ent of 'ortgage (ic( is o"o$Signed "5 a

's. To8aka #o!e.

20


21/76

T$e RO8O6SI?NED DOC&

W(en &lainti+* se!eral /ont(s after initiating foreclosure*

introduced into t(e court record a forged and fa"ricated* "ack

dated and o"o$Signed12 docu/ent titled Assign/ent of

'ortgage7* &lainti+s Counsel certi)ed t(e legiti/ac5 of a

docu/ent t(at could* "5 t(e !er5 ter/s it(in t(e controlling

docu/ent of t(e Trust &SA itself* ne!er 8ossi"l5 eist.

T(is docu/ent is titled Assign/ent of 'ortgage7. E8on

ins8ection t(oug(* t(is docu/ent is in realit5 not onl5 t(e

alleged assign/ent of t(e alleged /ortgage "ut also t(e alleged

assign/ent of t(e alleged note.

Also u8 ins8ection it can "e found t(at t(is docu/ent as

attested to and signed "5 one 's. To8aka #o!e. 's. #o!e is an

e/8lo5ee of #ender &rocessing Ser!ices in -akota Count5*

'innesota and as suc( t(e A%' as also fraudulentl5 signed "5

a 8erson (o (ad no aut(orit5 to sign. Dt is 8atentl5 fraudulent

and is an o"!ious forger5 as e8lained infra it as eecuted to

12 .e no. (a%e a legal definition of L"o!o6signerL from t(e /)S)#)O)A) for t(e 5t( #iruit :4 int(e ase of "@$AK- %) '/:S# =A$Q $A:@O$A- :"/S: #OMPA$, $o) 126505+

5t( #ir) Ot) 2, 20134) :(e ourt defined L"o!o6signingL as follo.sR

L>"o!osigning? is t(e ollouial term t(e media, politiians, and onsumer ad%oates (a%e used todesri!e an array of uestiona!le praties !ans deployed to perfet t(eir rig(t to forelose in t(e.ae of t(e su!prime mortgage risis, praties t(at inluded (a%ing !an employees or t(ird6partyontratorsI 14 eCeute and ano.ledge transfer douments in large uantities .it(in a s(ort

period of time, often .it(out t(e purported assignor;s aut(oriBation and outside of t(e presene oft(e notary ertifying t(e ano.ledgment, and 24 s.ear out affida%its onfirming t(e eCistene ofmissing piees of loan doumentation, .it(out personal no.ledge and often outside of t(e

presene of t(e notary)L

21


22/76

5ears after t(e &lainti+ trusts /andated Cut$%+ date7 for

de8osits.

'ortgages /a5 "e enforced onl5 "5* or on "e(alf of* t(e

entit5 t(at is entitled to enforce t(e o"ligation t(e /ortgage

secures. T(e underl5ing o"ligation in all cases is a 8ro/issor5

note. T(e /ortgage is t(e securit5 instru/ent t(at secures t(e

inde"tedness created "5 t(e note to t(e real 8ro8ert5.

T(e 8ractice of &lainti+ Wells Fargo Banks use of

unaut(orized docu/ent forgers in A+ida!it Assign/ent of

'ortgage creation is no co//on knoledge it as e!en on

60 'inutesO. Dt is a /atter t(at (as e!en "een una+ectionatel5

ter/ed o"o$Signing713 1 )n an attempt to prov%de (ou w%th more ass%stance ) have enclosed an a$$%dav%t

s%gned '( me as *eg%ster o$ the Southern +sse, #%str%ct *eg%str( o$ #eeds

attest%ng to the presence o$ a ro'o-s%gned s%gnature on (our document as l%sted

on Mc#onnell ropert( Ana/(t%cs Approved *o'o-s%gners L%st. )$ (ou are

13 :(e term Lro!osigningL does not aurately desri!e t(e pattern and pratie) :(e pattern and pratie are

more aurately desri!ed as ontrat per9ury, ontrat forgery, e%idene fa!riation, fraud upon t(e #ourt,and t(eft in .(i( families are rendered (omeless as a result of riminal !e(a%ior)

1 :(e pratie from in%estopedia, L@n t(e t(ird and fourt( uarters of 2010, a ro!o6signing sandal emerged

in t(e /nited States in%ol%ing KMA# Mortgage and a num!er of ma9or /)S !ans) =ans (ad to (altt(ousands of forelosures in numerous states .(en it !eame no.n t(at t(e paper.or .as illegitimate

!eause t(e signers (ad not atually re%ie.ed it) G(ile some ro!o6signers .ere middle managers, ot(ers.ere temporary .orers .it( %irtually no understanding of t(e .or t(ey .ere doing)L

22


23/76

currentl( 'e%ng $oreclosed upon th%s a$$%dav%t ma( 'e presented to (our attorne(

the lender or the court to show that (our cha%n o$ t%tle has 'een corrupted )?

T(e a"o!e referenced A+ida!it attests to t(e unlaful and

knon o"o$Signer7 signature status of &lainti+s Assign/ent

of 'ortgage ? ?7 as ell as signature status of &lainti+s

sole 8ro+ered and alleged legal conclusor5 A+ida!it titled

STATES %F ACC%ENT AN- 'D#DTAG STATES AFFD-A>DT7

?. F7 (ic( are "ot( signed "5 one 's. To8aka #o!e* as as

8re!iousl5 articulated to t(is Court "5 -efendant in all of

-efendants 8re!ious 8leadings. T(e a"o!e /entioned forged*

fraudulent and conclusor5 A+ida!it7 and Assign/ent of

'ortgage ('e t$e s#lely si*%ed d#cume%ts &lainti+

8resented to t(e court in t(eir case to esta"lis( t(eir oners(i8

of t(e alleged Note 'ortgage and t(eir su"seHuent rig(t to

initiate t(is foreclosure suit against -efendant.

T(e a"o!e #o!e conclusor5 a+ida!it re8resents t(at it is

"ased on #o!es fa/iliarit5 it( -efendants account stating

Aiant ha! acce!! o" and ha! per!onal #nowledge o" the

acco$nt! o" !aid compan%, and !peci&call% with the acco$nt o"

'ohn L. (eed, de"endant herein.7 #o!e also a!ers t(at !aid

acco$nt i! in de"a$lt and that plainti ha! elected to call the

entire )alance o" !aid acco$nt d$e and pa%a)le..7. W(ile t(e

#o!e A+ida!it states t(at #o!es 8ersonal knoledge is li/ited

to (er re!ie of %8tion %ne 'ortgage Co. as Ser!icing Agent

for &lainti+* #o!e fails to identif5* descri"e or anne t(e

8articular "usiness records u8on (ic( (er li/ited knoledge is

"ased.

Signi)cantl5* t(e #o!e 'o!ing A+ida!it /akes t(e

conclusor5 re8resentation t(at 8lainti+ (as "een in continuous

8ossession of t(e note and /ortgage since 8rior to t(e

23


24/76

co//ence/ent of t(is action it(out 8ro!iding an5 factual

details* or t(e source of #o!es knoledge. Dn addition to a lack

of foundation* t(e #o!e 'o!ing A+ida!it fails to 8ro!ide

e!idence t(at t(e originating lender* 9 Block Dnc.* indorsed

and 8(5sicall5 deli!ered t(e alleged eed Note to t(e AssetBacked ecei!a"les Trust.

-efendant (as re8eatedl5 denied 8lainti+s actions on t(e

ground t(at &lainti+ Wells Fargo Bank as Trustee for trust lacks

standing to foreclose.

S8eci)call5* -efendant contends and (as ala5s

contended in eac( and e!er5 of (is 8leadings t(at 's. #o!e also

lacked t(e actual aut(orit5 to eecute t(e %8tion %ne

Assign/ent.

T(e a"o!e referenced a+ida!it of ,o(n %"rien* co/"ined

it( t(e se!eral ot(er factual inconsistencies t(e -efendant (as

8re!iousl5 articulated to t(is Court, ,- ,9 1* 8ro!e "e5ond an5

dou"t t(at &lainti+s 8osition* a 8osition (ic( is co/8letel5

!oid of legal standing to (a!e initiated t(is foreclosure actionagainst -efendant* could not (a!e "een acco/8lis(ed it(out

t(e use of* as as 8re!iousl5 articulated "5 -efendant*1= forged

and fraudulentl5 created docu/ents* created s8eci)call5 "5 and

deli!ered into t(is Court (ile "eing Certi)ed as "eing true* 4ust

15 Ans.er of 'efendant Jo(n "eed 5D2+D20084 8, 11, 12, 13, 1, 15, 17, 18, 1, 20, 21, 22, 23, and

t(roug(out t(e rest of t(e pleadings)1+

Ans.er of 'efendant Jo(n A) "eed Memorandum in Opposition to Plaintiff;s Motion or Summary

Judgment and "euest or :rial =y Jury filed Aug, 15t(

, 20084 :(e opening statement > irstly, ouonor, t(e plaintiff (asn;t e%en pro%en t(at it o.ned or (eld t(e promissory note .(i( is t(e su!9et of t(eomplaintE? 1, 2,17

a( and e%ery ot(er pleading su!mitted !y 'efendant and already a part of t(is legal ation;s reord)18 MO:@O$ :O APPA- : '#@S@O$, O"'" A$' $:" O&""/-@$K '$'A$:SM"K$# AM$'' MO:@O$ :O &A#A: A &O@' J/'KM$: in it;s entirety1

MO:@O$ :O APPA- : '#@S@O$, O"'" A$' $:" O&""/-@$K '$'A$:SM"K$# AM$'' MO:@O$ :O &A#A: A &O@' J/'KM$: at t(ru 1+, 35, 5, +, 7,8,50, 52, 58, +0, +7, 23, 20, 21, 22, )

2


25/76

and accurate "5 &lainti+ and &lainti+s Counsel for t(e sole

8ur8ose of "linding t(is Court to t(e legal realities of t(eir

8osition and t(e situation (ic( t(en lead to t(e ulti/ate t(eft

of -efendants (o/e* loss of -efendants 8ersonal and "usiness

in!entor5 and 8ossessions* forced (o/elessness u8on -efendantand "eca/e t(e cause of -efendants /ental in4ur5 (ile

alloing &lainti+s on un4ust enric(/ent.

As a result* t(e Courts No!e/"er 13t(* 200 entr5

granting &lainti+s /otion for 4udg/ent and issuing a decree of

foreclosure s(ould "e !oid a" initio as o88osed to !oida"le.

Accordingl5* "ased u8on t(e foregoing* -efendant

res8ectfull5 reHuests t(at t(e No!e/"er 13t( 200 entr5 "e

!acated and t(is /atter re/anded "ack to t(e Ci!il Court it(

instruction to dis/iss* instruction to Huiet title and eac( of

-efendants Counterclai/s to "e lafull5 ad4udged.

Respectfully submitted,

________________________

John A. Reed

40 Maple Ave.Centerville, Ohio

[email protected]

25

mailto:[email protected]:[email protected]


26/76

/ntil t(is opinion appears in t(e O(io Offiial "eports ad%ane s(eets, it may !eited as Fed Home Loan Mtge. Corp. v. Schwartzwald Slip Opinion $o) 20126

0(io65017)T

NTICE

:(is slip opinion is su!9et to formal re%ision !efore it is pu!lis(ed in an ad%ane

s(eet of t(e O(io Offiial "eports) "eaders are reuested to promptly notify t(e

"eporter of 'eisions, Supreme #ourt of O(io, +5 Sout( ront Street, #olum!us,

O(io 3215, of any typograp(ial or ot(er formal errors in t(e opinion, in order

t(at orretions may !e made !efore t(e opinion is pu!lis(ed)

!"I# #ININ No. $%&$'%(I')%&*+EERA" (ME "AN MRT-A-E CR#RATIN, A##E""EE, v.

!C(ART/A" ET A"., A##E""ANT!.

01ntil this opinion appears in the hio fficial Reports ad2ance sheets,

it may be cited as Fed. Home Loan Mtge. Corp. v. Schwartzwald,

!lip pinion No. $%&$'%hio')%&*.3

Foreclosure---0ur%sd%ct%onal aspects o$ stand%ng-C%v.*. /12A3-0ur%sd%ct%on

determ%ned as o$ t%me o$ $%l%ng su%t.

$os) 201161201 and 2011613+26Su!mitted April , 20126'eided

Oto!er 31, 2012)4

APPA- from and #":@@' !y t(e #ourt of Appeals for Kreene #ounty,

$o) 2010 #A 1, 1 O(io App)3d +, 20116O(io62+81)

4NNE"", J.

UV1W 'uane and Julie S(.artB.ald appeal from a 9udgment of t(e

Seond 'istrit #ourt of Appeals affirming a deree of forelosure entered in

fa%or of t(e ederal ome -oan Mortgage #orporation) @n addition, t(e appellate

ourt ertified t(at its deision in t(is ase onflits .it( deisions of t(e irst and

2+


27/76

!1#REME C1RT + (I

ig(t( 'istrits on t(e follo.ing issueI L@n a mortgage forelosure ation, t(e

la of standing or a real party in interest defet an !e ured !y t(e assignment of

t(e mortgage prior to 9udgment)L

UV2W ederal ome -oan ommened t(is forelosure ation !efore it

o!tained an assignment of t(e promissory note and mortgage seuring t(e

S(.artB.alds; loan) :(e S(.artB.alds maintained t(at ederal ome -oanlaed standing to sue) :(e trial ourt granted summary 9udgment in fa%or of

ederal ome -oan and entered a deree of forelosure) :(e appellate ourt

affirmed, (olding t(at ederal ome -oan (ad remedied its la of standing .(en

it o!tained an assignment from t(e real party in interest)

UV3W o.e%er, standing is reuired to in%oe t(e 9urisdition of t(e

ommon pleas ourt, and t(erefore it is determined as of t(e filing of t(e

omplaint) :(us, reei%ing an assignment of a promissory note and mortgage

from t(e real party in interest su!seuent to t(e filing of an ation !ut prior to t(e

entry of 9udgment does not ure a la of standing to file a forelosure ation)

VW Aordingly, t(e 9udgment of t(e ourt of appeals is re%ersed, and

t(e ause is dismissed)

+acts and #rocedural (istory

V5W @n $o%em!er 200+, 'uane and Julie S(.artB.ald pur(ased a

(ome in enia, O(io, and reei%ed a mortgage loan from -egay Mortgage in t(e

amount of F251,250) :(ey eCeuted a promissory note and a mortgage granting

-egay Mortgage a seurity interest in t(e property) -egay Mortgage t(en

endorsed t(e promissory note as paya!le to Gells argo =an, $)A), and assigned

it t(e mortgage)

UV +W @n Septem!er 2008, 'uane S(.artB.ald lost (is 9o! at =aro,

27


28/76

@n), and t(e S(.artB.alds mo%ed to @ndiana so (e ould aept a ne. position)

:(ey ontinued maing mortgage payments as t(ey tried to sell t(e (ouse in

enia, !ut t(ey .ent into default on January 1, 200) @n Mar( 200, Gells

2

January :erm, 2012

argo agreed to list t(e property for a s(ort sale, and on April 8, 200, t(e

S(.artB.alds entered into a ontrat to sell it for F25,00, .it( losing set for

June 8, 200)

UV7W o.e%er, on April 15, 200, ederal ome -oan Mortgage

#orporation ommened t(is forelosure ation, alleging t(at t(e S(.artB.alds

(ad defaulted on t(eir loan and o.ed F25,085)18 plus interest, osts, and

ad%anes) @t atta(ed a opy of t(e mortgage identifying t(e S(.artB.alds as

!orro.ers and -egay Mortgage as lender, !ut did not atta( a opy of t(e note,

laiming t(at La opy of t(e noteT is urrently una%aila!le)L

UV8W Julie S(.artB.ald t(en ontated Gells argo a!out t(e

forelosure omplaint) S(e testified, L@ .as told t(at it .as *standard proedure*

and *don*t .orry a!out it* !eause .e .ere doing a s(ort sale)L :(e

S(.artB.alds did not ans.er t(e omplaint)

UVW On April 2, 200, ederal ome -oan filed .it( t(e ourt a opy

of t(e note signed !y t(e S(.artB.alds in fa%or of -egay Mortgage) :(e final

page arries a !lan endorsement !y Gells argo plaed a!o%e t(e endorsement

!y -egay Mortgage paya!le to Gells argo)

UV10W On May 15, 200, Gells argo assigned t(e note and mortgage to

ederal ome -oan, and ederal ome -oan filed .it( t(e ourt a opy of t(e

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29/76

assignment on June 17, 200) @t t(en mo%ed for a default 9udgment and a

summary 9udgment, !ut t(e trial ourt diso%ered t(at ederal ome -oan (ad

failed to esta!lis( a (ain of title !eause no assignment of t(e mortgage from

-egay Mortgage to Gells argo appeared in t(e reord)

56117 'uring t(is time, e%en t(oug( it (ad assigned its interest in t(enote and mortgage to ederal ome -oan, Gells argo ontinued disussing a

s(ort sale of t(e property .it( t(e S(.artB.alds, !ut delays in) t(is proess

e%entually aused t(e S(.artB.alds* !uyer to resind t(e offer) On 'eem!er

1, 200, t(e trial ourt granted t(e S(.artB.alds lea%e to file an ans.er) :(at

3

S/P"M #O/": O O@O

same day, ederal ome -oan filed .it( t(e ourt a opy of t(e assignment of t(e

mortgage from -egay Mortgage to Gells argo dated $o%em!er 27,200+)

UV12W ederal ome -oan again mo%ed for summary 9udgment,

supporting t(e motion .it( t(e affida%it of erman Jo(n Qennerty, %ie president

of loan doumentation for Gells argo as ser%iing agent for ederal ome -oan,

.(o a%erred t(at t(e S(.artB.alds .ere in default and .(o aut(entiated t(e )

note and mortgage as .ell as t(e assignment of t(e note and mortgage from Gells

argo) Su!seuently, ederal ome -oan filed opies of t(e notariBed

assignments from -egay Mortgage to Gells argo and from Gells argo to

2


30/76

ederal ome -oan)

UV13W :(e S(.artB.alds also mo%ed for summary 9udgment, asserting

t(at ederal ome -oan laed standing to forelose on t(eir property)

UV1W :(e trial ourt entered summary 9udgment for ederal ome -oan,

finding t(at t(e S(.artB.alds (ad defaulted on t(e note, and it ordered t(eeuity of redemption forelosed and t(e property sold) ederal ome -oan

pur(ased t(e property at a s(eriff*s sale)

UV15W On appeal, t(e Seond 'istrit #ourt of Appeals affirmed and (eld

t(at ederal ome -oan (ad esta!lis(ed its rig(t to enfore t(e promissory note

as a non(older in possession, !eause assignment of t(e mortgage effeted a

transfer of t(e note it seured) :(e ourt furt(er eCplained t(at standing is not a

9urisditional prereuisite and t(at a la of standing may !e ured !y su!stituting

t(e real party in interest for an original party pursuant to #i%)") 17A4) :(us, t(e

ourt onluded t(at alt(oug( ederal ome -oan laed standing at t(e time it

ommened t(e forelosure ation, it ured t(at defet !y t(e assignment of t(e

mortgage and transfer of t(e note prior to entry of 9udgment)

UV1+W :(e ourt of appeals ertified t(at its deision onflited .it(

Wells Fargo Bank !.A. %) B(rd 178 O(io App)3d 285, 200860(io6+03, 87

$))2d 722 1st 'ist)4, V 1561+R Bank o$ !ew 4ork %) 5%ndele 1st 'ist) $o) #6

January :erm, 2012

30


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00251, 201060(io652, V 36R and Wells Fargo Bank !.A. %) 0ordan 8t( 'ist)

$o) 1+75, 20060(io6@02, V 21, ases t(at (eld t(at a la of standing annot

!e ured !y su!stituting t(e real party in interest for an original party pursuant to

#i%)") 17A4) Ge aepted t(e onflit and t(e S(.artB.alds* disretionaryappeal on t(e same issue)

Ar8uments on Appeal

UV17W :(e S(.artB.alds eCplain t(at t(e essential aspet of standing is

in9ury to a legally proteted rig(t and laim t(at ederal ome -oan (ad not !een

in9ured !y t(eir default at t(e time it ommened t(is forelosure ation, !eause

it (ad not o!tained t(e note and mortgage until after it filed t(e omplaint)

"elying on federal asela., t(ey maintain t(at standing is determined as of t(e

time t(e ation is !roug(t, so t(at su!seuent e%ents do not ure a la of

standing) :(ey furt(er urge t(at alt(oug( t(e reuirement of a real party in

interest an !e .ai%ed, t(at reuirement annot !e euated .it( t(e reuirement

of standing)

UV18W ederal ome -oan asserts t(at pursuant to ")#) 1303)31, it is a

Lperson entitled to enfore t(e noteL !eause it is LaT non(older in possession of

t(e instrument .(o (as t(e rig(ts of a (olderL !y %irtue of t(e negotiation of t(e

note from -egay to Gells argo and t(e assignment from Gells argo) urt(er,

it maintains t(at ")#) 1303)31 defines only .(i( party is entitled to enfore a

note and t(at t(e failure to !e a real party in interest at t(e ommenement of suit

an !e ured pursuant to #i%)") 17A4 !y t(e assignment of t(e mortgage, and

note) @t also ontends t(at t(e 9urisditional reuirement of 9ustiia!ility is

satisfied if t(e allegations of t(e omplaint esta!lis( t(at t(e plaintiff (as standing

to present a 9ustiia!le ontro%ersy and t(at e%en if it is determined t(at t(ose

allegations .ere in fat false, t(e matter remains 9ustiia!le so long as t(e plaintiff

su!seuently o!tains t(e rig(t to forelose prior to 9udgment) On t(is !asis, it

argues t(at !eause Lt(e O(io #onstitution !esto.s general and not limited4

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5

S/P"M #O/": O O@O

9urisdition on ommon pleas ourts, ommon pleas ourts (a%e *9urisdition* to

(ear disputes, e%en if t(e named plaintiff .as not t(e orret person to in%oe it)L

:(us, it onedes t(at t(e reord in t(is ase does not esta!lis( t(at it .as a

person entitled to enfore t(e note as of t(e date t(e omplaint .as filed, !ut it

maintains t(at it Lpro%ed t(at it .as su( a person prior to 9udgment)L

UV1W Aordingly, t(e uestion presented is .(et(er a la of standing

at t(e ommenement of a forelosure ation filed in a ommon pleas ourt may

!e ured !y o!taining an assignment of a note and mortgage suffiient to esta!lis(

standing prior to t(e entry of 9udgment)

"a9 and Analysis .

Stand%ng to Sue

UV20W :(e O(io #onstitution pro%ides in Artile @&, Setion =4R L:(e

ourts of ommon pleas and di%isions t(ereof s(all (a%e su( original 9urisdition

over all "ust%c%a'le matters and su( po.ers of re%ie. of proeedings of

administrati%e offiers and agenies as may !e pro%ided !y la.)L mp(asis

added)4

UV21W @n Cleveland %) Shaker Hts. 30 O(io St)3d , 51, 507 $))2d 323

@ 874, .e statedI

: 4hether a party has a sufficient sta;e in an other9ise


33/76

contro2ersy is 9hat has traditionally been referred to as the

=uestion of standin8 to sue. here the party does not rely on any

specific statute authori>in8 in2ocation of the


34/76

proeedingsL4R Steinglass < Sarselli, 6he 9h%o State Const%tut%on: A *e$erence

5u%de 180 2004 noting t(at t(e 9urisdition of t(e ommon pleas ourt is

limited to 9ustiia!le matters4)

UV23W And reently, in ;%nca%d %) +r%e )ns. Co. 128 O(io St)3d 322,

201060(io6+03+, $))2d 207, .e affirmed t(e dismissal of a omplaint for la of standing .(en it (ad !een filed !efore t(e laimant (ad suffered any

in9ury) :(ere, Qinaid asserted laims t(at (is insurer (ad !rea(ed t(e insurane

ontrat !y failing to pay eCpenses o%ered !y t(e poliyR (o.e%er, (e (ad ne%er

presented a laim for reim!ursement to t(e insurer) Ge onluded t(at Qinaid

laed standing to assert t(e ause of ation, eCplaining, L/ntil rie refuses to pay

a laim for a loss, Qinaid (as suffered no atual damages for !rea( of ontrat,

t(e parties do not (a%e ad%erse legal interests, and t(ere is no 9ustiia!le

ontro%ersy)L )d. at V 13)

7

S/P"M #O/": O O@O

UV2W =eause standing to sue is reuired to in%oe t(e 9urisdition of t(e

ommon pleas ourt, Lstanding is to !e determined as of t(e ommenement of

suit)L Lu"an v. #e$enders o$ W%ldl%$e 50 /)S) 555, 5706571, 112 S)#t) 2130, 11

-)d)2d 351 124, fn) 5R see also Fr%ends o$ the +arth )nc. v. La%dlaw

+nv%ronmental Servs. 269C3 528 /)S) 1+7, 180, 120 S)#t)+3, 15 -)d)2d +10

3


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20004< !ova Health S(s. %) 5and( 1+ )3d 11, 11561155 10t( #ir)20054R

Focus on the Fam%l( %) %nellas Suncoast 6rans%t Auth. 3 )3d 12+3, 1275

11t( #ir)20034R err( %) Arl%ngton Hts. 18+ )3d 82+, 830 7t( #ir)14R Carr

%) Alta =erde )ndustr%es lnc. 31 )2d 1055, 10+1 5t( #ir)114)

UV25W urt(er, in%oing t(e 9urisdition of t(e ourt Ldepends on t(e stateof t(ings at t(e time of t(e ation !roug(t,L Mullan %) 6orrance 22 /)S) 537, 53,

+ -)d) 15 1824, and t(e Supreme #ourt (as o!ser%ed t(at LtT(e state of

t(ings and t(e originally alleged state of t(ings are not synonymousR

demonstration t(at t(e original allegations .ere false .ill defeat 9urisdition)L

*ockwell )nternatl. Corp. %) Un%ted States 5 /)S) 57, 73, 127 S)#t) 137,

1+7 -)d)2d 10 20074)

UV2+W :(us, LpTost6filing e%ents t(at supply standing t(at did not eCist

on filing may !e disregarded, denying standing despite a s(o.ing of suffiient

present in9ury aused !y t(e (allenged ats and apa!le of 9udiial redress)L 13A

Grig(t, Miller < #ooper, Federal ract%ce and rocedure , Setion 3531

28>>?3< see 5rupo #ata$lu, %) Atlas 5lo'al 5roup L.. 51 /)S) 5+7, 575, 12

S)#t) 120, 158 -)d)2d 8++ 2004, uoting Caterp%llar )nc. %) Lew%s 51 /)S)

+1, 75, 117 S)#t) +7, 13+ -)d)2d 37 re9eting argument t(atL *finality,

effiieny, and 9udiial eonomy* L an 9ustify suspension of t(e time6of6filing

rule4R Utah Assn. o$ Count%es %) Bush 55 )3d 10, 1101, and fn) + 10t(

#ir)200+4 a plaintiff annot rely on in9uries ourring after t(e filing of t(e

omplaint to esta!lis( standing4)

8

January :erm, 2012

35


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UV27W :(is priniple aords .it( deisions from ot(er states (olding t(at

standing is determined as of t(e filing t(e omplaint) See e.g. #eutsche Bank

!atl. 6rust %) Brum'augh 2012 OQ 3, 270 P)3d 151, V 11 L@f 'euts(e =an !eame a person entitled to enfore t(e note as eit(er a (older or non(older in

possession .(o (as t(e rig(ts of a (older a$ter the $oreclosure act%on was $%led

t(en t(e ase may !e dismissed .it(out pre9udie Y Y YL emp(asis addedT4R U.S.

Bank !atl. Assn. %) ;%m'all 10 &t) 210, 2011 &: 81, 27 A)3d 1087, V1 L/)S)

=an .as reuired to s(o. t(at at the t%me the compla%nt was $%led it possessed

t(e original note eit(er made paya!le to !earer .it( a !lan endorsement or made

paya!le to order .it( an endorsement speifially to /)S) =anL emp(asis

addedT4R Mtge. +lectron%c *eg%strat%on S(s. )nc.%) Saunders 2010 M 7, 2 A)3d

287, V 15 LGit(out possession of or any interest in t(e note, M"S lacked

stand%ng to %nst%tute forelosure proeedings and ould not in%oe t(e 9urisdition

of our trial ourtsL emp(asis addedT4R *MS *es%dent%al ropert%es L.L.C. %,

M%ller 303 #onn) 22, 22, 232, 32 A)3d 30 20114, uoting H%land v. )ves 28

#onn)Supp) 23, 25, 257 A)2d 822 1++4 eCplaining t(atL *sTtanding is t(e

legal rig(t to set 9udiial ma(inery in motion* L and (olding t(at t(e plaintiff (ad

standing !eause it pro%ed o.ners(ip of t(e note and mortgage at t(e time it

ommened forelosure ation4R Mclean %) 0 Morgan Chase Bank !atl. Assn.

7 So)3d 170, 173 la)App)20124 Lt(e plaintiff must pro%e t(at it (ad standing

to forelose .(en t(e omplaint .as filedL4R see also Burle( v) #ouglas 2+ So)3d

1013, 101 Miss)2004, uoting Lu"an %) #e$enders o$ W%ldl%$e 50 /)S) 555,

571, 112 S)#t) 2130, 11 -)d)2d 351 124, fn) 5 L*standing is to !e

determined as of t(e ommenement of suit* L4R )n re 8>>1 Adm%n%strat%on o$

Appropr%at%ons o$ Water o$ the !%o'rara 278 $e!) 137, 15, 7+8 $)G)2d 20

2004 Lonly a party t(at (as standing may in%oe t(e 9urisdition of a ourt or

tri!unal) And t(e 9unior appropriators did not lose standing if t(ey possessed it

under t(e fats eCisting .(en t(ey ommened t(e litigationL footnote omittedT4)

3+


37/76

S/P"M #O/": O O@O

UV28W ere, ederal ome -oan onedes t(at t(ere is no e%idene t(at it

(ad suffered any in9ury at t(e time it ommened t(is forelosure ation) :(us,

!eause it failed to esta!lis( an interest in t(e note or mortgage at t(e time it filed

suit, it (ad no standing to in%oe t(e 9urisdition of t(e ommon pleas ourt)

6he *eal-art(-%n-)nterest *ule

UV 2W :(e ourt of appeals and ederal ome -oan relied on t(e

plurality opinion in State e, rel. 0ones %) Suster 8 O(io St)d 70, 77, 701 $))2d

1002 184, .(i( suggested t(at LtT(e la of standing may !e ured !y

su!stituting t(e proper party so t(at a ourt ot(er.ise (a%ing su!9et matter

9urisdition may proeed to ad9udiate t(e matter) #i%)") 17)L o.e%er, four

9usties delined to 9oin t(at portion of t(e opinion, and t(erefore it is not a

(olding of t(is ourt) See O(io #onstitution, Artile $, Setion 2A4 LA

ma9ority of t(e supreme ourt s(all !e neessary to onstitute a uorum or to

render a 9udgmentL4)

UV30W At ommon la., all ations (ad to !e !roug(t in t(e name of t(e

person (olding legal title to t(e rig(t asserted, and indi%iduals possessing only

euita!le or !enefiial interests ould not sue in t(eir o.n rig(t) See generall(

#lar < ut(ins, 6he *eal art( %n )nterest 3 ale -)J) 25 1254R +A

Grig(t, Miller < Qane, Federal ract%ce and rocedure Setion 151 20104)

o.e%er, t(e pratie in euity relaCed t(is reuirement, and states later

37


38/76

a!rogated t(e ommon6la. rules and adopted Lrules t(at permitted any *real party

in interest* to !ring suit)L Spr%nt Commun%cat%ons Co. L.. %)AP## Servs. )nc.

55 /)S) 2+, 27, 128 S)#t) 2531, 171 -)d 2d 2 20084)

UV31W @n O(io, #i%)") 17A4 go%erns t(e proedural reuirement t(at a

omplaint !e !roug(t in t(e name of t(e real party in interest and pro%idesI

%ery ation s(all !e proseuted in t(e name of t(e real party in

interest) An eCeutor, administrator, guardian, !ailee,

10

January :erm, 2012

trustee of an eCpress trust, a party .it( .(om or in .(ose name a ontrat

(as !een made for t(e !enefit of anot(er, or a party aut(oriBed !y statute

may sue in (is name as su( representati%e .it(out 9oining .it( (im t(e

party for .(ose !enefit t(e ation is !roug(t) G(en a statute of t(is)state

so pro%ides, an ation for t(e use or !enefit of anot(er s(all !e !roug(t in

t(e name of t(is state) $o ation s(all !e dismissed on t(e ground t(at it is

not proseuted in t(e name of t(e real party in interest until a reasona!le

time (as !een allo.ed after o!9etion for ratifiation of ommenement of

t(e ation !y, or 9oinder or su!stitution of, t(e real party in interest) Su(

ratifiation, 9oinder, or su!stitution s(all (a%e t(e same effet as if t(e

ation (ad !een ommened in t(e name of t(e real party )in interest)

UV32W #onsidering #i%)") 17A4 in Sheal( %) Camp'ell 20 O(io St)3d 23,

2X25,85 $))2d 701 1854, .e o!ser%edI

38


39/76

:(e purpose !e(ind t(e real party in interest rule is > *Y Y Y to

ena!le t(e defendant to a%ail (imself of e%idene and defenses t(at t(e

defendant (as against t(e real party in interest, and to assure (im finality

of t(e 9udgment, and t(at (e .ill !e proteted against anot(er suit !roug(t

!y t(e real party at interest on t(e same matter)* Celanese Corp. o$ Amer%ca %) 0ohn Clark )ndustr%es 5 #ir)l54, 21 )2d 551, 55+)L @)n re

H%ghland Hol%da( Su'd%v%s%on 1714, 27 O(io App)2d 237T 20 273

$))2d 034)

UV33W As t(e Supreme #ourt eCplained in L%ncoln ropert( Co. %) *oche

5+ /)S) 81,0, 12+ S)#t) +0+, 1+3 -)d)2d 15 20054, t(e real6party6in6interest

rule onerns only proper party 9oinder) #i%)") 17A4 does not address standingR

rat(er, t(e point of t(e rule is t(at Lsuits !y representati%e plaintiffs on !e(alf of

t(e real parties in interest are t(e eCeption rat(er t(an t(e rule and s(ould only !e

allo.ed .(en t(e real parties in interest are identifia!le and t(e res 9udiata sope

of t(e 9udgment an !e effeti%ely determined)L) Consumer Fedn. o$ Am. %)

Up"ohn Co. 3+ A)2d 725, 72 ')#)1754 onstruing analogous 'istrit of

#olum!ia rule4)

UV3W :(us, t(e :(ird and t(e $int( #iruits (a%e re9eted t(e notion t(at

ed)")#i%)P) 17a4, on .(i( #i%)") 17A4 is !ased, allo.s a party .it( no

personal stae in a ontro%ersy to file a laim on !e(alf of a t(ird party, o!tain t(e

ause of ation !y assignment, and t(en (a%e t(e assignment relate !a to

ommenement of t(e ation, statingI

L"ule 17a4 does not apply to a situation .(ere a party .it( no

ause of ation files a la.suit to toll t(e statute of limitations and later

o!tains a ause of ation t(roug( assignment) "ule 17a4 is t(e

odifiation of t(e salutary priniple t(at an ation s(ould not !e forfeited

!eause of an (onest mistaeR it is not a pro%ision to !e distorted !y

parties to irum%ent t(e limitations period)L

5ardner %) State Farm F%re < Cas. Co. 5)3d 553, 5+3 3d #ir)20084, uoting

3


40/76

Un%ted States e, rel. Wul$$ v. CMA )nc. 80 )2d 1070, 1075 t( #ir)l84)

UV 35W :(e SiCt( #iruit #ourt of Appeals* deision in ur%ch )ns. Co. v.

Log%trans )nc. 27 )3d 528 +t( #ir)20024, illustrates t(is point) @n t(at ase, a

fire at a .are(ouse destroyed property insured !y Amerian Kuarantee, .(i( paid out a laim for damages) o.e%er, anot(er insurane ompany, Zuri(

S.itBerland, filed a omplaint laiming to !e t(e insured*s su!rogee,

not.it(standing t(e fat t(at Zuri( S.itBerland (ad neit(er issued an insurane

12

January :erm,2012

poliy nor paid out any money to t(e insured) :(e defendants mo%ed to dismiss

for la of standing, and) Zuri( S.itBerland soug(t to su!stitute Amerian

Kuarantee as t(e real party in interest pursuant to ed)")#i%)P) 17a4) :(e distrit

ourt dismissed t(e ation)

UV3+W :(e SiCt( #iruit #ourt of Appeals ano.ledged t(at t(e statute of

limitations .ould !ar Amerian Kuarantee*s laim unless ed)")#i%)P) 17a4

allo.ed it to !e su!stituted for Zuri( S.itBerland) o.e%er, t(e ourt

distinguis(ed !et.een t(e reuirement of standing and t(e o!9etion t(at t(e

plaintiff is not t(e real party in interest, and it (eld t(at !eause LZuri( Amerian

admittedly (as not suffered in9ury in fat !y t(e defendants, it (ad no standing to

!ring t(is ation and no standing to mae a motion to su!stitute t(e real party in

interest)L ld.

UV37W Ot(er ourts (a%e also determined t(at a plaintiff annot rely on

proedural rules similar to #i%)") 17A4 to ure a la of standing at t(e

ommenement of litigation)) #av%s v. 4ageo Corp. 81 )3d ++1, +78 t(

#ir)20074 L.(et(er or not 'uC .as t(e real6party6in6interest, it does not (a%e

standing, and it annot ure its standing pro!lem t(roug( an in%oation of

ed)")#i%)P) 17a4L4R Clark %) 6ra%l%ner Corp. 22 )3d 388 10t( #ir)20004

ta!le4, opinion reported at 2000 G- 1+2 noting t(at t(e plaintiff annot

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&retroact%vel( 'ecome t(e real6party6in6interestL in order to ure a la of

standing at t(e filing of t(e omplaint emp(asis siT4R accord State %) ropert( at

8>/? *a%n'ow #r%ve 70 So)2d 1025, 102761028 Ala)14 re9eting t(e

argument t(at a la of standing an !e ured after filing of t(e omplaint4R

Consumer Fedn. o$ Am. v. Up"ohn Co. 3+ A)2d 725, 72 ')#)App)1754eCplaining t(at dismissal for la of standing is onsistent .it( ')#)

Super)#t)#i%)") 17a44R see also McLean %) 0Morgan Chase Bank !atl. Assn.

7 So)3d 170, 173 la)App)20124 La party is not permitted to esta!lis( t(e rig(t

13

S/P"M #O/": O O@O

to maintain an ation retroati%ely !y auiring standing to file a la.suit after t(e

fatL4)

UV38W Ge agree .it( t(e reasoning and analysis presented in t(ese ases)

Standing is reuired to in%oe t(e 9urisdition of t(e ommon pleas ourt)

Pursuant to #i%)") 82, t(e "ules of #i%il Proedure do not eCtend t(e 9urisdition

of t(e ourts of t(is state, and a ommon pleas ourt annot su!stitute a real party

in interest for anot(er party if no party .it( standing (as in%oed its 9urisdition

in t(e first instane)

UV3W Aordingly, a litigant annot pursuant to #i%)") 17A4 ure t(e

la of standing after ommenement of t(e ation !y o!taining an interest in t(e

su!9et of t(e litigation and su!stituting itself as t(e real party in interest)

Effect of Lack of Standing on Foreclosure ctions

UV0W :(e la of standing at t(e ommenement of a forelosure ation

reuires dismissal of t(e omplaintR (o.e%er, t(at dismissal is not an ad9udiation

on t(e merits and is t(erefore .it(out pre9udie) See State e, rel Coles %)

5ranv%lle 11+ O(io St)3d 231, 200760(io6+057, 877$))2d +8, V 51) =eause

t(ere (as !een no ad9udiation on t(e underlying inde!tedness, our dismissal (as

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no effet on t(e underlying duties, rig(ts, or o!ligations of t(e parties)

Conclusion

UV@&7 @t is fundamental t(at a party ommening litigation must (a%e

standing to sue in order to present a 9ustiia!le ontro%ersy and in%oe t(e

9urisdition of t(e ommon pleas ourt) #i%)") 17A4 does not (ange t(is priniple, and a la of standing at t(e outset of litigation annot !e ured !y

reeipt of an assignment of t(e laim or !y su!stitution of t(e real party in

interest)*

UV 2W ere, it is undisputed t(at ederal ome -oan did not (a%e

standing at t(e time it ommened t(is forelosure ation, and t(erefore it failed

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January :erm, 2012

to in%oe t(e 9urisdition of t(e ourt of ommon pleas) Aordingly, t(e

9udgment of t(e ourt of appeals is re%ersed, and t(e ause is dismissed)

Judgment re%ersed

and ause dismissed)

O*#O$$O", #)J), and P@", -/$'="K S:"Al:O$,

A$Zl$K", #/PP, and M#K ="OG$,JJ), onur)

[[[[[[[[[[[[[[[[[[[[[[[[[[[[[

:(ompson ine, -)-)P), Sott A) Qing, and :erry G) Posey Jr), for

appellee)

Andre. M) ngle, for appellants)

=rue M) =royles, urging re%ersal for amii uriae omeo.ners of t(e

State of O(io and O(iofraudlosure)!logspot)om,

Ad%oates for =asi -egal uality, @n), and Andre. ') $eu(auserR

-egal Aid Soiety of #le%eland and Julie Q) "o!ieR -egal Aid Soiety of

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Sout(.est O(io, -)-)#), and $oel M) MorganR #ommunity -egal Aid Ser%ies,

@n), #(ristina M) Janie, and Paul ) ZindleR and O(io Po%erty -a. #enter and

-inda #oo, urging re%ersal for amii uriae Ad%oates for =asi -egal uality,

@n), -egal Aid Soiety of #le%eland, -egal Aid Soiety of Sout(.est O(io,

-)-)#), #ommunity -egal Aid Ser%ies, @n), O(io Po%erty -a. #enter, -egalAid Soiety of #olum!us, Sout(eastern O(io -egal Ser%ies, -egal Aid of

Gestern O(io, and Pro Seniors, @n)

[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[

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E(IBIT!

C(i!it >A?

ri8inal Complaint


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Ehibit DB

Assignment of Mortgage from Option One Mort) #orp)

to Gells argo =an $a)

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Ehibit DC

$otie of iling of Assignment

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With Trust Law.

Documents

Transcript of With Trust Law.