[Cite as LSF6 Mercury REO Invests. v. Garrabrant,

.]

COURT OF APPEALS DELAWARE COUNTY, OHIO FIFTH APPELLATE DISTRICT

JUDGES: LSF6 MERCURY REO : Hon. W. Scott Gwin, P.J. INVESTMENTS : Hon. John W. Wise, J. : Hon. Craig R. Baldwin, J. Plaintiff-Appellee : : -vs- : Case No. 13 CAE 06 0050 : RICK L. GARRABRANT, ET AL : : OPINION Defendants-Appellants

CHARACTER OF PROCEEDING: Civil appeal from the Delaware County Court of Common Pleas, Case No. 09- CVE-12-1780

JUDGMENT: Affirmed

DATE OF JUDGMENT ENTRY: March 11, 2014

APPEARANCES:

For Plaintiff-Appellee For Defendant-Appellant

PHILLIP BARRAGATE MARC DANN ASHLYN HEIDER GRACE DOBERDRUK 4805 Montgomery Road, Suite 320 4600 Prospect Avenue Norwood, OH 45212 Cleveland, OH 44103 [Cite as LSF6 Mercury REO Invests. v. Garrabrant,

.]

Gwin, P.J.

{¶1} Appellant appeals the May 22, 2013 judgment entry of the Delaware

County Court of Common Pleas denying his common law motion to vacate the

judgment of foreclosure.

Facts & Procedural History

{¶2} On December 9, 2009, appellee LSF6 Mercury Reo Investments filed a

complaint against appellant Rick Garrabrant seeking foreclosure on an adjustable rate

note and mortgage. Attached to the complaint was a promissory note from appellant as

borrower to CIT Group/Consumer Finance, Inc. as lender dated February 2, 1998 that

was recorded on February 10, 1998 and a mortgage signed and recorded on the same

dates as the promissory note from CIT Group/Consumer Finance as mortgagee to

appellant as mortgagor. Also attached to the complaint was an assignment of the

mortgage dated June 11, 2009 and recorded June 19, 2009, assigning the February 2,

1998 mortgage and note from Vericrest Financial, Inc., as successor to the CIT

Group/Consumer Finance, Inc. to Deutsche Bank National Trust Co. as Trustee on

behalf of Vericrest Financial, Inc., as Servicer for LSF6 Mercury Reo Investments Trust

Series 2008-1. In addition, an assignment of mortgage and note dated November 16,

2009 and recorded November 25, 2009 was attached to the complaint and assigned

appellant’s note and mortgage from Deutsche Bank National Trust Co. as Trustee on

behalf of Vericrest Financial, Inc., as Servicer for LSF6 Mercury Reo Investments Trust

Series 2008-1 to LSF6 Mercury Reo Investments Trust Series 2008-1.

{¶3} Appellant filed a motion to dismiss which the trial court subsequently

denied on October 26, 2010. Appellant did not file an answer in this matter. On Delaware County, Case No. 13 CAE 06 0050 3

November 17, 2010, appellee filed a motion for default judgment. Attached to the

motion for default judgment was an affidavit executed by Paul Laird. Laird stated that

the copies of the promissory note and mortgage filed are true and accurate copies of

the original instruments held by plaintiff prior to the filing of and at all times during the

pendency of this action. Also on November 17, 2010, appellee filed an allonge to the

note. In the allonge, Vericrest Financial, Inc., as attorney-in-fact for The CIT

Group/Consumer Finance, Inc., indorsed the note in blank. The trial court scheduled an

oral hearing on the motion for default on December 16, 2010. Appellant did not appear

at the default judgment hearing and the trial court granted appellee’s motion for default

on December 21, 2010. Appellant did not appeal from the judgment entry granting

default. A sheriff’s sale was conducted on February 16, 2011 and the property at issue

was sold for $116,580. The trial court confirmed the sale and ordered distribution in a

judgment entry on March 10, 2011.

{¶4} On April 4, 2011, appellant filed a motion for relief from judgment pursuant

to Civil Rule 60(B) alleging, as his meritorious defense, appellee’s lack of standing. The

trial court denied appellant’s motion on April 15, 2011. Appellant appealed the trial

court’s denial and, in LSF6 Mercury REO Investments v. Garrabrant, 5th Dist. Delaware

No. 11CAE040037,

, this Court affirmed the trial court’s denial of the

motion for relief from judgment, finding Civil Rule 60(B) could not be used as a

substitute for a direct, timely appeal of December 21, 2010 final judgment entry. On

February 20, 2013, the Supreme Court of Ohio declined to accept jurisdiction of

appellant’s appeal. Delaware County, Case No. 13 CAE 06 0050 4

{¶5} Appellant filed a common law motion to vacate judgment of foreclosure on

March 22, 2013. Appellant argued the trial court should vacate the judgment on the

grounds that appellee lacked standing to invoke the trial court’s jurisdiction making the

judgment void ab initio. The trial court found at the time the complaint was filed,

appellee was the holder of the note and mortgage and thus the proper party to initiate

the action. Further, that even if there was no express transfer of the note, the

assignment of the mortgage is sufficient to transfer both the note and the mortgage

because the documents evidence the parties’ intent to keep the instruments together.

Accordingly, the trial court denied appellant’s common law motion to vacate in a

judgment entry on May 22, 2013.

{¶6} Appellant appeals the May 22, 2013 judgment entry of the Delaware

County Court of Common Pleas and assigns the following as error:

{¶7} “I. THE TRIAL COURT ERRED WHEN IT DENIED APPELLANT RICK

GARRABRANT’S COMMON LAW MOTION TO VACATE BECAUSE THE NOTE AT

THE TIME OF FILING THE COMPLAINT WAS NOT INDORSED BY THE ORIGINAL

LENDER AND SINCE THE FORECLOSING PLAINTIFF FAILED TO INVOKE THE

SUBJECT MATTER JURISDICTION OF THE COURT THERE WAS NO

JURISDICTION TO GRANT THE MOTION TO SUBSTITUE APPELLEE AS THE

PLAINTIFF.”

I.

{¶8} Appellant styled his May 2013 motion as a common law motion to vacate.

A common law motion to vacate, instead of Civil Rule 60(B), is utilized to vacate a void

judgment because “[t]he power to vacate a void judgment does not arise from Civ. R. Delaware County, Case No. 13 CAE 06 0050 5

60(B), but rather, from an inherent power possessed by the courts in this state.”

Thomas v. Fick, 9th Dist. Summit No. 19595,

(June 7, 2000), quoting

Patton v. Diemer,

,

(1988), paragraph four of the

syllabus. A trial court’s decision to deny a motion to vacate judgment is reviewed on

appeal for an abuse of discretion whether that motion is made pursuant to Civ.R. 60(B)

or to the court’s inherent power at common law to vacate a void judgment. Spotsylvania

Mall Co. v. Nobahar, 7th Dist. Mahoning No. 11 MA 82,

, citing GTE

Automatic Elec., Inc. v. ARC Industries, Inc.,

,

(1976). Determining whether a trial court has subject matter jurisdiction is reviewed de

novo. Wells Fargo Bank, N.A. v. Elliot, 5th Dist. Delaware No. 13 CAE 03 0012, 2013-

Ohio-3690.

{¶9} We agree with the trial court that, at the time the complaint was filed on

December 21, 2009, appellee was the holder of the note and mortgage and the real

party in interest to properly initiate the action. The current holder of the note and

mortgage is the real party in interest in foreclosure actions. U.S. Bank Nat’l. Assoc. v.

Marcino,

,

(7th Dist.), citing Chase Manhattan

Mtge. Corp v. Smith, 1st Dist. Hamilton No. CO61069,

. R.C. 1303.31

provides:

{¶10} “Person entitled to enforce” an instrument means any of the following

persons:

{¶11} The holder of the instrument;

{¶12} A non-holder in possession of the instrument who has the rights of a

holder; Delaware County, Case No. 13 CAE 06 0050 6

{¶13} A person not in possession of the instrument who is entitled to enforce the

instrument pursuant to Section 1303.38 or division (D) of section 1303.58 of the

Revised Code.

{¶14} In this case, appellee attached to its complaint copies of the note and

mortgage and alleged it was the holder of the note and mortgage. Also attached to the

complaint are the following assignments: a corporate assignment of mortgage recorded

on June 19, 2009, indicating the mortgage and the note were transferred from the

successor to CIT Group / Consumer Finance, Inc. (Vericrest Financial, Inc.) to Deutsche

Bank National Trust Company as Trustee on behalf of Vericrest Financial, Inc. as

servicer for LSF6 Mercury Reo Investment Trust Series 2008-1; and an assignment of

the note and mortgage recorded November 25, 2009, transferring the note and

mortgage to LSF6 Mercury Reo Investments Trust Series 2008-1.

{¶15} The affidavit of Paul Laird, attached to appellee’s motion for default

judgment, states the copies of the promissory note and mortgage that were filed are

true and accurate copies of the original instruments held by plaintiff prior to the filing of

and at all times during the pendency of the action. The trial court had and properly

considered the complaint, copies of the promissory note, mortgage, and assignments

attached to the complaint, and the affidavit of Paul Laird when it held the hearing on the

motion for default judgment. As noted above, the real party in interest in a foreclosure

action is the current holder of the note and mortgage. At the time the complaint was

filed, appellee was the holder of the note and mortgage and was thus the real party in

interest. Delaware County, Case No. 13 CAE 06 0050 7

{¶16} We further agree with the trial court that even if there was no express

transfer of the note, the assignment of the mortgage is sufficient to transfer both the

note and the mortgage because the documents evidence the parties’ intent to keep the

instruments together. In Bank of New York v. Dobbs, 5th Dist. Knox No. 2009-CA-

000002,

, we held that the assignment of a mortgage, without an

express transfer of the note, is sufficient to transfer both the mortgage and the note if

the record indicates the parties intended to transfer both the note and the mortgage.

{¶17} This case is analogous to the Dobbs case as the record indicates the

parties intended to transfer both the note and the mortgage. The note dated February

2, 1998 provides, “in return for a loan that I have received, I promise to pay the principal

balance show above plus interest to the order of the lender.” Further, paragraph nine of

the note is entitled “This Note Covered by a Mortgage” and states, “[a] mortgage of the

same date as this Note protects you from possible losses which might result if I do not

keep the promises which I make in this Note. That mortgage describes how and under

what conditions I may be required to make immediate payment in full of all amounts that

I owe under this note.” The mortgage, signed and recorded on the same dates as the

note, provides, “to secure payment of a Note I signed today promising to pay you the

Principal Balance as shown above together with interest * * * as provided in the Note

secured by this Mortgage.”

{¶18} The note refers to the mortgage and the mortgage refers to the note.

Thus, we find a clear intent by the parties to keep the note and mortgage together rather

than transferring the mortgage alone. Since the mortgage assignments were recorded Delaware County, Case No. 13 CAE 06 0050 8

on June 19, 2009 and November 25, 2009, prior to the filing of the complaint on

December 9, 2009, the note was effectively transferred on that date.

{¶19} Based on the foregoing, appellant’s assignment of error is overruled. The

May 22, 2013 judgment entry of the Delaware County Court of Common Pleas is

affirmed.

By Gwin, P.J.,

Wise, J., and

Baldwin, J., concur