Fed. Natl. Mtge. Assn. v. Brown

[Cite as Fed. Natl. Mtge. Assn. v. Brown, 2017-Ohio-9237.]

STATE OF OHIO, COLUMBIANA COUNTY

IN THE COURT OF APPEALS

SEVENTH DISTRICT

FEDERAL NATIONAL MORTGAGE )

ASSOCIATION )

)

PLAINTIFF-APPELLEE ) CASE NO. 16 CO 0008

)

VS. ) OPINION

)

GREGORY S. BROWN, SR., et al. )

)

DEFENDANTS-APPELLANTS )

CHARACTER OF PROCEEDINGS: Civil Appeal from the Court of Common

Pleas, of Columbiana County, Ohio

Case No. 2014 CV 317

JUDGMENT: Affirmed.

APPEARANCES:

For Plaintiff-Appellee Attorney David Lockshaw, Jr.

Attorney Jonathan Secrest

150 East Gay Street, Suite 2400

Columbus, Ohio 43215

For Defendants-Appellants Attorney Richard Hoppel

Gregory and Shannon Brown 16688 St. Clair Avenue

East Liverpool, Ohio 43920

JUDGES:

Hon. Mary DeGenaro

Hon. Gene Donofrio

Hon. Carol Ann Robb

Dated: December 22, 2017

[Cite as Fed. Natl. Mtge. Assn. v. Brown, 2017-Ohio-9237.]

DeGENARO, J.

{¶1} Defendants-Appellants, Gregory S. Brown, Sr. and Shannon M. Brown

appeal the decision of the trial court granting summary judgment in favor of Appellee

Federal National Mortgage Association in this foreclosure action. In addition, the

Browns challenge the trial court's decision to dismiss their third-party complaint

against Fannie Mae's loan servicer, Appellee Seterus, Inc., along with the dismissal

of the their counterclaim against Fannie Mae. They also contend the trial court erred

by failing to certify its judgment granting Appellees' motions to dismiss immediately

appealable under Civ.R. 54(B). Finally, the Browns argue the trial court erred in

failing to strike the affidavit Fannie Mae relied upon in its motion for summary

judgment and that the court erred by granting Fannie Mae's summary judgment

motion. Because the Browns' assignments of error are meritless we affirm the trial

court's judgment.

Facts and Procedural History

{¶2} Appellant Gregory Brown is the maker of a Note dated September 30,

2002, which contains a promise to repay $101,000.00 plus interest at a rate of

7.875% per annum, to the order of First Federal fsb. As security for the Note, Brown

and his wife Shannon executed a Mortgage on real property located in Lisbon.

Several months later, the Browns and First Federal executed a Loan Modification

Agreement, whereby the principal balance owed was $101,000.00, with an interest

rate of 6.125%. The Note was subsequently endorsed to ABN AMRO Mortgage

Group, Inc., and then endorsed again in blank in an allonge. The Mortgage was

assigned to ABN AMRO, which merged with CitiMortgage, Inc., which then assigned

the Mortgage to Fannie Mae.

{¶3} The Browns defaulted on their Note, Mortgage and Loan Modification

Agreement obligations by failing to pay the amount due October 1, 2013 and any

subsequent installments. On February 1, 2014. Seterus became Fannie Mae's loan

servicer for the Browns' loan. On February 18, 2014, Seterus sent the Browns a

notice of default.

{¶4} The Browns failed to cure the default, and on June 20, 2014, Fannie

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Mae filed a foreclosure complaint against the Browns, along with other parties not

pertinent to this appeal. Attachments to the complaint include the Note executed by

Gregory Brown, the Mortgage executed by the Browns pertaining to the subject

property, along with other documents to establish Fannie Mae's standing. Among

other things, Fannie Mae pled that the Note and Mortgage were in default, and

Fannie Mae satisfied conditions precedent and declared the entire balance due.

Fannie Mae further specified the principal amount due, $83,267.82, plus interest, on

the outstanding principal amount at the rate of 6.125% per annum from September 1,

2013.

{¶5} The Browns filed an answer, along with a counterclaim against Fannie

Mae, and a third-party complaint against Seterus. The Browns' counterclaim against

Fannie Mae raised claims for (1) breach of contract and the covenant of good faith

and fair dealing, (2) fraud, (3) intentional misrepresentation, and (4) negligent

misrepresentation. In a nutshell, these claims center on the Browns' assertions that

Fannie Mae was not the real party in interest and misled the Browns to believe it was,

and also that Fannie Mae failed to properly credit payments the Browns made. The

third-party complaint against Seterus alleged violations of (1) the Real Estate

Settlement Procedures Act (RESPA) and (2) the Fair Debt Collection Practices Act

(FDCPA). The RESPA count alleged that Seterus failed to respond to the Browns'

qualified written requests (QWR's), and the FDCPA count alleged that Seterus is a

debt collector as defined in the FDCPA and that Seterus intentionally failed to credit

payments, attempted to collect amounts that exceeded the amounts owed, attempted

to collect unreasonable fees, failed to respond to the Browns' debt verification

request, and failed to provide notices required by the FDCPA.

{¶6} Fannie Mae and Seterus (sometimes collectively, Appellees) each

responded with motions to dismiss the Browns' claims pursuant to Civ.R. 12(B)(6).

Seterus argued, inter alia, that the Browns' RESPA claim failed because they failed

to allege actual damages and that the FDCPA claim failed because it was not a debt

collector under the meaning of that statute. In moving the trial court to dismiss the

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counterclaims against it, Fannie Mae argued that the breach of contract claim failed

because the Browns failed to fulfil their obligations under the contract, that the fraud

claim was not pled with sufficient particularity, that the tort of negligent

misrepresentation was inapplicable to their business relationship with the Browns,

and that the other claims failed insofar as they stemmed from the alleged breach of

contract and fraud.

{¶7} On March 31, 2015, the trial court granted Appellees' motions to

dismiss. The trial court further observed that "[the Browns'] pleadings are verbose

and largely devoid of any real substance[.]"

{¶8} The Browns then moved the trial court to reconsider its decision or

alternatively to certify its decision granting Appellees' motions to dismiss as

immediately appealable pursuant to Civ.R. 54(B). Following an oral hearing on the

matter, the trial court denied the motions. With respect to the denial of the Browns'

request for a Civ.R. 54(B) certification, the trial court explained: "By taking such

action, the Court is in a position until such time, as there is a final order in this case to

actually reconsider its decision dismissing the Counterclaim [and Third-Party

Complaint] prior to the adjudication of all claims of the parties."

{¶9} On November 25, 2015, Fannie Mae filed a motion for summary

judgment. In support of its motion, Fannie Mae attached the affidavit of Shawann

Hampton, a foreclosure specialist for Seterus, Fannie Mae's loan servicer, along with

the Note, Mortgage, assignments of the Mortgage, payment records for the loan, and

the notice of default sent by Seterus.

{¶10} On December 16, 2015, the Browns filed a brief in opposition to

summary judgment, attaching the affidavit of their attorney, along with truth in lending

disclosure statements for the original loan and the loan modification. The Browns

also moved the trial court to strike the affidavit Fannie Mae attached in support of its

motion for summary judgment.

{¶11} One week later, Fannie Mae filed a motion for leave to file a corrective

affidavit to address a typographical error in the affidavit filed with their motion for

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summary judgment. Fannie Mae also filed a notice of filing merger documents to

address claims by the Browns pertaining to the merger of its predecessors in interest.

On December 28, 2015, the trial court granted Fannie Mae's motion for leave and

deemed the corrected affidavit filed as of that date.

{¶12} The Browns also filed a cross-motion for summary judgment, which was

opposed by Fannie Mae.

{¶13} On January 27, 2016, the trial court issued a decision granting Fannie

Mae's motion for summary judgment and denying the Browns' motion. The trial court

overruled the Browns' motion to strike the affidavit in support of Fannie Mae's motion

for summary judgment referencing its previous order granting Fannie Mae leave to

file a corrected affidavit. The trial court indicated that its decision was not a final

appealable order and requested a proposed entry from Fannie Mae disposing of any

outstanding claims.

{¶14} On March 18, 2016, the trial court issued a foreclosure judgment

disposing of all claims. That same day, the Browns filed a motion asking the trial

court to reconsider its decision regarding summary judgment, along with its judgment

granting Appellees' motions to dismiss. On March 24, 2016, the trial court issued an

amended judgment entry. Browns filed a timely notice of appeal challenging the

judgments in favor of Appellees only; the Browns did not appeal the trial court's

denial of their summary judgment motion. Subsequently, the trial court issued a

judgment entry acknowledging the Browns' notice of appeal and that it no longer had

jurisdiction to rule on the pending motion for reconsideration.

Assignments of Error

{¶15} The Browns raise numerous arguments regarding the trial court's

decisions granting Appellees' motions to dismiss and motion for summary judgment,

along with procedural rulings related to each judgment. Their assignments of error

intermingle arguments about various issues and judgments. For clarity of analysis,

this opinion reorders and regroups many of the arguments within the following five

assignments of error raised by the Browns:

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The Trial Court erred and abused its discretion when it dismissed

Appellant's Counterclaim and Appellant's Third Party Complaint against

Appellee's loan servicer, Seterus, Inc. ("Seterus") while granting

Appellee's Motion for Summary Judgment, as there were genuine

issues of material fact surrounding Appellee's and Seterus' erroneous

account records and attempts to collect amounts that were false, illegal,

deceptive, and unfair.

The Trial Court erred and abused its discretion when it granted

Appellee's Motion for Summary Judgment while genuine issues of

material fact remained surrounding Appellee's failure to satisfy all

conditions precedent pursuant to Civ. R. 9(C) prior to filing Appellee's

Complaint.

The Trial Court erred by failing to strike the Hampton Affidavits despite

their conclusory and self-serving basis, and the false statements and

erroneous account information contained therein, and which Affidavits

Appellee relied upon in support of its Motion for Summary Judgment.

The Trial Court committed prejudicial error in failing to include Civ. R.

54(B) certification making its dismissal of Appellant's Counterclaim and

Third Party Complaint a final appealable order despite remaining

genuine issues of material fact which prejudiced Appellant's case in

chief.

The Trial Court erred in Granting Appellee's Motion for Summary

Judgment while dismissing Appellant's Counterclaim and Third Party

Complaint while genuine issues of material fact existed as to whether

Appellee is the correct party in interest and had standing to bring the

foreclosure action.

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Rulings on and related to Appellees' Motions to Dismiss

{¶16} Parts of the Browns' first, fourth and fifth assignments of error raise

issues regarding the trial court's decision to grant Appellees' motions to dismiss

pursuant to Civ.R. 12(B)(6).

{¶17} A Civ.R. 12(B)(6) motion to dismiss for failure to state a claim upon

which relief can be granted is a procedural motion that tests the sufficiency of the

complaint. State ex rel. Hanson v. Guernsey Cty. Bd. of Commrs., 65 Ohio St.3d 545,

548, 605 N.E.2d 378 (1992). The trial court must construe all reasonable inferences

in the plaintiff's favor as well as that the facts alleged in the complaint are true; and if

after doing so the trial court finds beyond doubt that the plaintiff can prove no set of

facts warranting relief, only then is dismissal warranted. State ex rel. Seikbert v.

Wilkinson, 69 Ohio St.3d 489, 490, 633 N.E.2d 1128 (1994). The trial court must limit

its consideration to the four corners of the complaint. Union Local Assn. of Classroom

Teachers of OEA/NEA v. Ohio Bd. Of Edn., 7th Dist. No. 06 BE 33, 2007-Ohio-5053,

2007 WL 2782620, ¶ 10. Appellate courts review the propriety of dismissal de novo,

independently reviewing the complaint. CitiMortgage, Inc. v. Rudzik, 7th Dist. No. 13

MA 20, 2014-Ohio-1472, 2014 WL 1384596, ¶ 10.

{¶18} To state a claim for relief the complaint must contain "(1) a short and

plain statement of the claim showing that the party is entitled to relief, and (2) a

demand for judgment for the relief to which the party claims to be entitled." Civ.R.

8(A). "A complaint alleges the elements of the claim with sufficient particularity if it

gives reasonable notice of the claim to opposing parties." Bahen v. Diocese of

Steubenville, 7th Dist. No. 11 JE 34, 2013-Ohio-2168, ¶ 11.

{¶19} The Browns assert as a preliminary matter that the trial court erred in

adopting the more stringent pleading standards set forth by the United States

Supreme Court in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167

L.Ed.2d 929. It is true that this court has declined to adopt Twombly. See Bahen at ¶

14 (expressly rejecting the defendant's call to extend Twombly to Ohio civil procedure

jurisprudence.) Thus, it was error for trial court to rely on Twombly as a pleading

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standard. However, this error is harmless. Under Civ.R. 8(A), "to constitute fair notice

[so as to state a claim] the complaint must still allege sufficient underlying facts that

relate to and support the alleged claim, and may not simply state legal conclusions."

Hernandez v. Riggle, 2016-Ohio-8032, 74 N.E.3d 822, ¶ 16 (7th Dist.), quoting Klan

v. Med. Radiologists, Inc., 12th Dist. No. CA2014–01–007, 2014-Ohio-2344, 2014

WL 2526116, *2. As our review is de novo, we will continue to apply Ohio civil

procedure jurisprudence and not evaluate a trial court's ruling on a motion to dismiss

under Twombly.

Dismissal of Third Party Complaint against Seterus

{¶20} The Browns raised two claims against Seterus: violations of FDCPA

and RESPA. Regarding the FDCPA claim, Appellees counter that Seterus is not a

debt collector as defined in that statute and therefore cannot be liable.

Under 15 U.S.C. 1692a(6), a "debt collector" is defined as:

any person who uses any instrumentality of interstate commerce or the

mails in any business the principal purpose of which is the collection of

any debts, or who regularly collects or attempts to collect, directly or

indirectly, debts owed or due or asserted to be owed or due another.

Notwithstanding the exclusion provided by clause (F) of the last

sentence of this paragraph, the term includes any creditor who, in the

process of collecting his own debts, uses any name other than his own

which would indicate that a third person is collecting or attempting to

collect such debts. * * * The term does not include[:]

***

(F) any person collecting or attempting to collect any debt owed or due

or asserted to be owed or due another to the extent such activity (i) is

incidental to a bona fide fiduciary obligation or a bona fide escrow

arrangement; (ii) concerns a debt which was originated by such person;

(iii) concerns a debt which was not in default at the time it was obtained

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by such person; or (iv) concerns a debt obtained by such person as a

secured party in a commercial credit transaction involving the creditor.

{¶21} Although foreclosure constitutes debt collection under the FDCPA,

"under the act, a party is not a debt collector if the debt 'was not in default at the time

it was obtained by such person.' " Wells Fargo Bank, N.A. v. Carver, 2016-Ohio-589,

60 N.E.3d 473, ¶ 37 (8th Dist.), quoting 15 U.S.C. 1692a(6)(F)(iii).

{¶22} The Browns' pleadings establish that Seterus began servicing their loan

on February 1, 2014, and that their debt was not in default until February 18, 2014, at

the earliest. Therefore, Seterus was not a debt collector as defined by the FDCPA

and cannot be held liable under that statute. Accordingly, the Browns' FDCPA claim

fails and the trial court properly dismissed it pursuant to Civ.R. 12(B)(6).

{¶23} Regarding the RESPA claim, as the Eleventh District has explained:

Under RESPA, a loan servicer has the duty to respond to a

borrower's qualified written request stating the borrower's belief that the

account balance is in error. 12 U.S.C. 2605(e)(1). Specifically, "the

servicer shall * * * make appropriate corrections in the account of the

borrower * * * and transmit to the borrower a written notification of such

correction (which shall include the name and telephone number of a

representative of the servicer who can provide assistance to the

borrower);" or "after conducting an investigation, provide the borrower

with a written explanation or clarification that includes[,] * * * to the

extent applicable, a statement of the reasons for which the servicer

believes the account of the borrower is correct as determined by the

servicer." 12 U.S.C. 2605(e)(2)(A) and (B).

HSBC Bank USA, Natl. Trust Co. v. Teagarden, 2013-Ohio-5816, 6 N.E.3d 678, ¶ 66

(11th Dist.).

{¶24} However, a borrower's RESPA claim fails where they fail to present any

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evidence of actual damages that resulted from the alleged violation. Id. at ¶ 68.

" 'Courts have determined that actual damages must be pled as part of any RESPA

claim and any alleged loss must be related to the alleged RESPA violation itself.' "

Id., quoting Mattison v. PNC Bank, N.A., S.D.Ohio No. 3:13–cv–061, 2013 WL

3936373, 9 (July 30, 2013). The Browns failed to allege actual damages in their third-

party complaint with respect to their RESPA claim; therefore, the claim was properly

dismissed.

Dismissal of Counterclaims against Fannie Mae

{¶25} The Browns' counterclaim against Fannie Mae raised four claims:

breach of contract and the covenant of good faith and fair dealing; fraud; intentional

misrepresentation; and, negligent misrepresentation. These claims center on the

Browns' assertions that Fannie Mae was not the real party in interest, misled them to

believe it was, and that Fannie Mae failed to properly credit payments they made.

{¶26} As to breach of contract claim, "[g]enerally, the elements for a breach of

contract are that a plaintiff must demonstrate by a preponderance of the evidence

that: (1) a contract existed, (2) the plaintiff fulfilled his obligations, (3) the defendant

failed to fulfill his obligations, and (4) damages resulted from this failure." Anzalaco v.

Graber, 2012-Ohio-2057, 970 N.E.2d 1143, ¶ 18 (8th Dist.), citing Lawrence v. Lorain

Cty. Community College, 127 Ohio App.3d 546, 549, 713 N.E.2d 478 (9th Dist.1998).

As the Browns failed to fulfill their payment obligations, they did not satisfy this

element which defeats their breach of contract claim.

{¶27} Next, as to a covenant of good faith and fair dealing, this court has held

that this claim stems from a breach of contract claim. Lucarell v. Nationwide, 2015-

Ohio-5286, 44 N.E.3d 319 (7th Dist), appeal accepted on other grounds, 146 Ohio

St.3d 1469. "A claim for breach of the duty of good faith and fair dealing exists as

part of a breach of contract claim. * * * In other words, a party cannot assert a claim

for breach of the duty of good faith without asserting a claim for breach of contract."

Id. at ¶ 69. Accordingly, the failure of the Browns' breach of contract claim defeats

their breach of the covenant of good faith and fair dealing claim.

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{¶28} Third, the Browns' negligent misrepresentation claim fails because a

claim for negligent misrepresentation is a business tort related to professional

malpractice, and they made no such malpractice allegations. See Corporex Dev. &

Constr. Mgt., Inc. v. Shook, Inc., 106 Ohio St.3d 412, 2005-Ohio-5409, 835 N.E.2d

701, ¶ 9.

{¶29} Turning to the fraud claim, it must be plead with particularity in

conformity with Civ.R. 9(B), and consists of the following elements:

(a) a representation or, where there is a duty to disclose, concealment

of a fact,

(b) which is material to the transaction at hand,

(c) made falsely, with knowledge of its falsity, or with such utter

disregard and recklessness as to whether it is true or false that

knowledge may be inferred,

(d) with the intent of misleading another into relying upon it,

(e) justifiable reliance upon the representation or concealment, and

(f) a resulting injury proximately caused by the reliance.

Barnes v. Res. Energy Expl., 2016-Ohio-4805, 68 N.E.3d 133, ¶ 22 (7th Dist.), citing

Cohen v. Lamko, Inc., 10 Ohio St.3d 167, 169, 462 N.E.2d 407 (1984).

{¶30} One who raises a claim of fraud "must establish each of the necessary

elements of fraud with sufficient particularity in order to prevail." Barnes at ¶ 25.

Particularity means the complaint "must state the time, place and content of the false

representation, the fact misrepresented, and what was obtained or given as a

consequence of the fraud. The plaintiff must allege, at a minimum, the time, place

and contents of the misrepresentation on which they relied." Id. at ¶ 22.

{¶31} The Browns' counterclaim makes only very general allegations with

regard to fraud. For example, they allege that Fannie Mae "[c]onceal[ed] facts and

relevant evidence from Brown that is material to the transaction at hand." The trial

court properly dismissed the fraud claim because it failed to comply with the

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specificity required by the Civ.R. 9(B).

{¶32} Finally, the Browns' intentional misrepresentation claim in substance

replicates their fraud claim; they point out in their brief that it is simply an extension of

the fraud claim. As such, the intentional misrepresentation claim fails.

{¶33} Accordingly, the trial court properly granted Appellees' motions to

dismiss the Browns' third-party complaint and counterclaims and these portions of

the Browns' first, fourth and fifth assignments of error are meritless.

Failure to include Civ.R. 54(B) Certification

{¶34} In the balance of their fourth assignment of error, the Browns argue that

the trial court erred by denying their request to make the ruling on the motions to

dismiss final and appealable pursuant to Civ.R. 54(B).

{¶35} The Ohio Supreme Court has stated: "In deciding that there is no just

reason for delay, the trial judge makes what is essentially a factual determination—

whether an interlocutory appeal is consistent with the interests of sound judicial

administration, i.e., whether it leads to judicial economy. Trial judges are granted the

discretion to make such a determination* * *[.]" (Emphasis deleted.) Wisintainer v.

Elcen Power Strut Co., 67 Ohio St.3d 352, 354-355, 617 N.E.2d 1136 (1993).

{¶36} However, trial courts:

should only make a Civ.R. 54(B) finding when it serves the interests of

judicial economy such as avoiding piecemeal appeals. Sullivan v.

Anderson, 122 Ohio St.3d 83, 2009–Ohio–1971, 909 N.E.2d 88, ¶ 10;

Wisintainer at 355. When the interests of judicial economy are not

served, a trial court's Civ.R. 54(B) finding is subject to reversal. Hill v.

Hughes, 4th Dist. Ross No. 06CA2917, 2007–Ohio–3885, ¶ 8.

Third Fed. S. & L. v. Krych, 8th Dist. No. 99762, 2013-Ohio-4483, ¶ 7 (8th Dist.).

{¶37} In its judgment denying the Browns' request for Civ.R. 54(B)

certification, the trial court noted: "The Court declines to treat the Order dismissing

the Counterclaim as a final appealable order. By taking such action, the Court is in a

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position until such time, as there is a final order in this case to actually reconsider its

decision dismissing the Counterclaim prior to the adjudication of all claims of the

parties." The trial court's decision was reasonable and not an abuse of discretion; its

decision both promoted judicial economy and served to avoid piecemeal litigation.

{¶38} The Browns nonetheless claim the trial court's decision to not certify the

judgment as immediately appealable "effectively scuttl[ed] any opportunity [they]

would otherwise have had to seek redress[.]" However, they are afforded a

meaningful and effective remedy by way of this appeal following the trial court's final

judgment. Accordingly, this portion of the Browns' fourth assignment of error is

meritless.

Grant of Summary Judgment in Favor of Fannie Mae

{¶39} When reviewing a trial court's summary judgment, an appellate court

applies a de novo review. Comer v. Risko, 106 Ohio St.3d 185, 2005-Ohio-4559, 833

N.E.2d 712, ¶ 8. Under Civ.R. 56, summary judgment is only proper when the

movant demonstrates that, viewing the evidence most strongly in favor of the

nonmovant, reasonable minds must conclude no genuine issue as to any material

fact remains to be litigated and the moving party is entitled to judgment as a matter of

law. Doe v. Shaffer, 90 Ohio St.3d 388, 390, 738 N.E.2d 1243 (2000).

{¶40} "[T]he moving party bears the initial responsibility of informing the trial

court of the basis for the motion, and identifying those portions of the record which

demonstrate the absence of a genuine issue of fact on a material element of the

nonmoving party's claim." Dresher v. Burt, 75 Ohio St.3d 280, 296, 662 N.E.2d 264

(1996). The nonmoving party has the reciprocal burden of specificity and cannot rest

on the mere allegations or denials in the pleadings. Id. at 293.

Affidavit Issue

{¶41} In their third assignment of error, the Browns argue the trial court erred

by denying their motion to strike the affidavit of Shawann Hampton, which Fannie

Mae attached as evidence in support of its summary judgment motion.

{¶42} "The determination of a motion to strike is within the trial court's broad

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discretion." Wells Fargo v. Smith, 12th Dist. No. CA2012-04-006, 2013-Ohio-855, ¶

13. A trial court's ruling on a motion to strike will not be reversed on appeal absent an

abuse of discretion. Id.

{¶43} The original affidavit in support of Fannie Mae's motion for summary

judgment was flawed in that the date next to the affiant's signature was later in time

than the date filled in by the notary public attesting to that signature. Although the day

handwritten in by the notary is the "6th," the month was pre-typed as "October,

2015." Accordingly, the notarization date of October 6, 2015 does not correspond

with the date next to Hampton's signature, which is November 6, 2015. Fannie Mae

contends this error appears to be the result of the month in the notary's attestation

being pre-typed.

{¶44} The Browns filed a motion to strike the Hampton affidavit. One week

later, Fannie Mae filed a motion for leave to file a corrected affidavit. Accompanying

its motion for leave was the same affidavit substantively as the original, except that

the new affidavit corrected the scrivener's error. Fannie Mae asserted the Browns

would not be prejudiced by the correction because the substance was identical; the

trial court agreed, granting leave.

{¶45} The trial court did not abuse its discretion in permitting Fannie Mae to

file a corrected affidavit and denying the Browns' motion to strike. Contrary to the

Browns' contentions, the affidavit was made upon personal knowledge; Hampton

stated she personally reviewed records specific to the Browns' loan and the relevant

business records are described, authenticated, and attached to the affidavit. See,

e.g., U.S. Bank Natl. Assn. v. Crow, 7th Dist. No. 15 MA 0113, 2016-Ohio-5391, ¶ 19,

citing Civ.R. 56(E).

{¶46} The first affidavit filed was deficient only in that it contained a

typographical error regarding the signature and notarization dates and it was well

within the trial court's discretion to accept the corrected one. Thus, the Browns' third

assignment of error is meritless.

Standing

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{¶47} The Browns argue as part of their fifth assignment of error, that there

are genuine issues of material fact regarding whether Fannie Mae was the real party

in interest and had standing to bring the instant suit.

{¶48} "Generally speaking, standing is '[a] party's right to make a legal claim

or seek judicial enforcement of a duty or right.' " Wells Fargo Bank, N.A. v. Horn, 142

Ohio St.3d 416, 2015–Ohio–1484, 31 N.E.3d 637, ¶ 8, citing Black's Law Dictionary

1625 (10th Ed.2014.) A party "must assert a personal stake in the outcome of the

action in order to establish standing." (Emphasis deleted.) Bank of Am., N.A. v.

Kuchta, 141 Ohio St.3d 75, 2014–Ohio–4275, 21 N.E.3d 1040, ¶ 23, citing Ohio

Pyro, Inc. v. Ohio Dept. of Commerce, 115 Ohio St.3d 375, 2007–Ohio–5024, 875

N.E.2d 550, ¶ 27.

{¶49} "In an action for foreclosure, the mortgagor must establish an interest in

the promissory note or mortgage in order to have standing in the action." Bank of

Am., N.A. v. Beato, 7th Dist. No. No. 15 MA 0028, 2016-Ohio-8035, ¶ 7, citing Fed.

Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13, 2012–Ohio–5017, 979

N.E.2d 1214, ¶ 28. "Although standing to file a foreclosure action must exist at the

time the complaint is filed, it need not be proven by the plaintiff in the complaint and

can be proven if contested later in the action (such as at the summary judgment

stage)." Crow at ¶ 14, citing Horn, 142 Ohio St.3d 416 at ¶ 12, applying

Schwartzwald.

{¶50} The Browns argue there is a genuine issue of material fact about

whether they were the holders of the Note at the time the complaint was filed. A

holder of a note is entitled to enforce the instrument pursuant to R.C. 1301.31. A

holder in possession is a person in possession of a negotiable instrument that is

payable to either bearer or to an identified individual in possession. R.C.

1301.201(B)(21)(a). A note endorsed in blank is bearer paper. R.C. 1303.10(A)(2).

As such, Fannie Mae was required to show it had possession of the note when it filed

the foreclosure complaint. R.C. 1303.201(B)(21)(a). See also Beato at ¶ 10.

{¶51} The evidence established that the Note was endorsed in blank in an

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allonge. "Indorsements can be included in an allonge attached to the note. An

allonge is '[a] slip of paper sometimes attached to a negotiable instrument for the

purpose of receiving further indorsements when the original paper is filled with

indorsements.' Black's Law Dictionary 88 (9th Ed.2009)." Bank of Am., N.A. v.

Pasqualone, 10th Dist. No. 13AP–87, 2013-Ohio-5795, ¶ 33, fn.10. Therefore, the

Note became bearer paper that Fannie Mae was entitled to enforce so long as it was

in possession of the Note at the time the complaint was filed. See id. Hampton avers

in her affidavit that Fannie Mae was in fact in possession of the Note at that time.

{¶52} The Browns also contend that Fannie Mae failed to establish it is the

assignee of the Mortgage. In support of its motion for summary judgment, Fannie

Mae provided evidence demonstrating that the mortgage was assigned from the

original lender, First Federal fsb, to ABN AMRO Mortgage Group, Inc., and that

assignment of mortgage was recorded in the official records of Columbiana County

on December 13, 2002. Pursuant to a merger, CitiMortgage, Inc., became the

successor of ABN AMRO Mortgage Group, Inc. "Once an existing bank takes the

place of another bank after a merger, no further action is necessary to become a real

party in interest." (Citations omitted.) Bank of America v. Laster, 8th Dist. No.

100606, 2014-Ohio-2536, ¶ 15. CitiMortgage then assigned the mortgage to Fannie

Mae, and the assignment of mortgage was recorded on February 24, 2014. The

Browns presented no evidence to rebut the chain of assignments. Accordingly,

Fannie Mae is the real party in interest and had standing to bring the instant suit.

Thus, this portion of the Browns' fifth assignment of error is meritless.

Conditions Precedent

{¶53} The Browns argue, as part of their second assignment of error, that

there are genuine issues of material fact about whether Fannie Mae met all

conditions precedent prior to declaring the Note to be in default and commencing the

instant foreclosure suit.

{¶54} Civ.R. 9(C) provides: "In pleading the performance or occurrence of

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conditions precedent, it is sufficient to aver generally that all conditions precedent

have been performed or have occurred." By contrast, "[a] denial of performance or

occurrence shall be made specifically and with particularity." (Emphasis added.) Id.

"Conditions precedent that are not denied in the manner provided by Civ.R. 9(C) are

deemed admitted." See also PNC Mtge. v. Garland, 7th Dist. No. 12 MA 222, 2014–

Ohio–1173, ¶ 31. Failure to answer with specificity bars the defendants from later

contesting noncompliance in their brief in opposition to summary judgment, and on

appeal. Id. at ¶ 36.

{¶55} In its complaint, in paragraph 6, Fannie Mae generally averred that:

"[t]he Note and Mortgage are in default. Plaintiff has satisfied conditions precedent

and declared the entire balance due and payable." The Browns' answer contains only

a general denial of Fannie Mae's averments about satisfying conditions precedent.

Paragraph six of their answer states: "Brown denies the allegations contained in

Paragraph Six of Plaintiff's Complaint."

{¶56} The Browns assert that Fannie Mae merely pleading in its complaint

that conditions precedent were met, as opposed to stating all conditions precedent

were met, was insufficient; they claim the omission of the word "all" relieved the

Browns of pleading with specificity which conditions precedent Fannie Mae failed to

satisfy. However, Civ.R. 9(C) presents only a general pleading burden on the plaintiff;

even absent the word "all," paragraph 6 of Fannie Mae's complaint complies with

Civ.R. 9(C).

{¶57} The Browns further assert that later portions in their answer somehow

save the condition precedent arguments from waiver. Specifically, they point to

paragraphs 22-24 of their answer, which state, respectively: "Plaintiff's Complaint

should be dismissed due to Plaintiff's failure to properly credit payments Brown made

on the subject Note;" "Plaintiff's Complaint should be dismissed because Brown is

not in default of any payments to Plaintiff;" and, "Plaintiff's claim is barred due to

Plaintiff's failure to submit required documentation substantiating the indebtedness

Plaintiff claims in Plaintiffs Complaint".

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{¶58} These statements are unresponsive to Fannie Mae's averments about

satisfying all conditions precedent. The fact remains that the Browns' response in

their Answer to paragraph 6 of the Complaint specifically responding to Fannie Mae's

assertions about performing conditions precedent makes only a general denial

thereof. Under Civ.R. 9(C) and Garland, paragraph six is deemed admitted and the

Browns' arguments regarding noncompliance are waived for summary judgment

purposes and on appeal. Accordingly, this portion of the Browns' second assignment

of error is meritless.

Amount Due on Note

{¶59} Finally, the Browns argue, as part of their first assignment of error, that

there are genuine issues of material fact regarding the amount due on the Note. The

amount due was specified in the complaint and in summary judgment evidence.

Hampton states in her affidavit, which was filed in support of summary judgment:

"[The Browns owe] the principal sum of $83,267.82 plus interest at 6.125% per

annum from September 1, 2013 plus advances for taxes, insurance, and otherwise to

protect the property, if any. A true and accurate copy of the Payment History for [the

Browns'] loan is attached hereto as Exhibit A-5."

{¶60} In summary judgment proceedings in foreclosure cases, courts have

consistently held that "an averment of outstanding indebtedness made in the affidavit

of a bank loan officer with personal knowledge of the debtor's account is sufficient to

establish the amount due and owing on the note, unless the debtor refutes the

averred indebtedness with evidence that a different amount is owed." Natl. City Bank

v. TAB Holdings, Ltd., 6th Dist. No. E-10-060, 2011-Ohio-3715, ¶ 12 (citing cases).

Thus, the Hampton affidavit is sufficient evidence of the amount owed on the Note.

{¶61} Further, the Browns failed to meet their reciprocal summary judgment

burden by providing evidence of a different amount due. As discussed, the Browns

do not dispute that they defaulted on their payment obligations under the Note. They

failed to provide any evidence demonstrating they complied with their payment

obligations on or after October 1, 2013.

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{¶62} The Browns attempt to make a material issue out of the $195,280.54

principal amount that appears on the first two lines of the loan payment history

authenticated in the Hampton affidavit, filed in support of Fannie Mae's motion for

summary judgment. A review of the payment history reveals that amount was

adjusted to $95,779.26 the same day. Thereafter, the balance steadily decreases

until reaching the principal amount that Fannie Mae pled of $83,267.82.

{¶63} The Browns fail to explain how the $195,280.54 figure, which was

immediately adjusted to an amount below the original principal balance of the loan,

serves to undermine the trial court's judgment in Fannie Mae's favor. The Browns did

not oppose Fannie Mae's Motion for summary judgment with evidence of a different

amount owed to create an issue of material fact. Accordingly, this portion of the

Browns' first assignment of error is also meritless.

{¶64} In sum, all of the Browns' assignments of error are meritless. The trial

court properly dismissed the Browns' third-party complaint and counterclaims and

declined to give that ruling Civ.R. 54(B) certification. The trial court properly granted

summary judgment in favor of Fannie Mae on its complaint. Accordingly, the

judgment of the trial court is affirmed.

Donofrio, J., concurs.

Robb, P. J., concurs.