Preview
(qishiimuon
moa act 7b A iG UZ
” . 1
gy
COURT OF COMMON PLEAS
MONTGOMERY COUNTY, OHIO
U.S. Bank, N.A., as Trustee for the Structured ' Case No. 2007 CV 9571
Asset Securities Corporation Mortgage Loan !
Trust, 2006- NC1, i Judge Jeffrey E. Froelich
Plaintiff,
| PLAINTIFF'S BRIEF AS TO REAL
“vs- ; PARTY IN INTEREST
Wesley A. Quinn, et al.,
i
i
i
i
i
i
4
‘
Defendants.
Plaintiff, U.S. Bank, N.A., as Trustee for the Structured Asset Securities
Corporation ("SASCO") Mortgage Loan Trust, 2006- NC1 (“Plaintiff”) is the real party in
interest and was the real party in interest prior to filing the within foreclosure action on
November 14, 2007. A real party in interest is one who is directly benefited or injured
by the outcome of the case. Shealy v. Campbell (1985), 20 Ohio St.3d 23, 24, 20 OBR 210,
485 N.E.2d 701. “The current holder of the note and mortgage is the real party in
Case No. 2007 CV 9571
LSR #200725626interest in foreclosure actions”. U.S. Bank Natl. Assn. v. Marcio et al. (2009), 181 Ohio
App.3d 328, 334.
Plaintiff in the present action was the holder of the subject promissory note dated
February 28, 2006 in the amount of $80,750.00 given by Wesley Quinn, as sole obligor
(hereinafter referred to as “the Quinn Note”), when it commenced foreclosure because
Plaintiff had acquired all right, title and interest, in and to the Qwinn Note and
Mortgage in June 2006 pursuant to that certain Trust Agreement for SASCO Mortgage
Loan Trust, 2006-NC1, dated June 1, 2006.1 The original payee on the Quinn Note was
New Century Mortgage Corporation, who endorsed the Note in blank and transferred
the Note as part of the securitization transaction.”
The original Quinn Note in Plaintiffs possession, custody and control bears the
blank endorsement of the original payee, New Century Mortgage Corporation The
blank endorsement of the Quinn Note converted the note to bearer paper. R.C. §
1303.25. “Blank indorsement' means an indorsement that is made by the holder of the
instrument and that is not a special indorsement. When an instrument is indorsed in
blank, the instrument becomes payable to bearer [. . .]”. R.C. § 1303.25(B). Plaintiff's
possession of the original Qwinn Note bearing the blank endorsement of the originating
' Sce Notice of Filing SEC Form 8K, Trust Agreement; Mortgage Loan Sale and Assignment Agreement;
Securitization Subservicing Agreement; and Redacted Mortgage Loan Schedule, being filed contemporancously
herewith.
2 See Notice of Filing Note with Endorsements, filed in this action on February 17, 2009Lender, New Century Mortgage Corporation, is sufficient evidence to establish that
Plaintiff is the real party in interest. R.C. 1303.25; Marcino, 181 Ohio Ap.3d at 337.
For nearly a century, Ohio courts have held that whenever a promissory note is
secured by a mortgage, the note constitutes the evidence of the debt and the mortgage is
a mere incident to the obligation. Edgar v. Haines (1923), 109 Ohio St. 159, 164, 141 N.E.
837. Therefore, the negotiation of the note results in a corresponding transfer of the
mortgage by operation of law, without the necessity of a separate assignment of the
mortgage. Bank of New York as Trustee, v. Dobbs (Sept. 8, 2009), Knox App. No. 2009-CA-
000002, | 26; LaSalle Bank National Association, v. Street, Licking App. No. 08CA60, 2009-
QOhio-1855; Marcino, 337; Kuck v. Sommers (1950), 59 Ohio Law Abs. 400, 100 N.E.2d 68;
Kernohan v. Manss (1895), 53 Ohio St. 118, 41 N.E. 258; Holmes v. Gardner (1893), 50 Ohio
St. 167, 33 N.E. 644; 69 Ohio Jur. 3d Mortgages § 461 (February 2008), R.C. § 1309.203
[UCC 9-203] is a codification of the common-law rule that a transfer of an obligation
secured by a security interest or other lien on personal or real property also transfers the
security interest or lien.’ Marcino, at 337, citing, Official Comment 9 to U.C.C. 9-203, the
source of R.C. 1309.203.
As transferee of the Note, Plaintiff, upon the endorsement of the Note, succeeded
to all the rights of the transferor, New Century Mortgage Corporation., including the
right to enforce the Qwinn Mortgage through this foreclosure proceeding. Dobbs, supra;
Street, supra; Marcino, supra; Cincinnati ex rel. Ritter v. Cincinnati Reds, L.L.C. (2002), 150Ohio App.3d 728, 739, 2002-Ohio-7078, 782 N.E.2d 1225 (citing Leber v. Buckeye Union
Ins. Co. (1997), 125 Ohio App.3d 321, 332, 708 N.E. 2d 726, quoting, Inter Ins. Exchange v.
Wagstaff (1945), 144 Ohio St. 457, 460, 59 N.E.2d 373, “As a general rule, an assignee
stands in the shoes of the assignor . . . and succeeds to all the rights and remedies of the
latter.”) Negotiation and/or transfer of the Note automatically carried with it the
Mortgage and all the attendant benefits of the Mortgage. Id.
With, or without, an Assignment of Mortgage from Mortgage Electronic Registration
Systems, Inc., as nominee for New Century Mortgage Corporation, Plaintiff was the
own and holder of the Qwinn Note and the Qwinn Mortgage as of June 2006. The
Assignment of Mortgage from MERS to Plaintiff dated January 17, 2008 and filed for
record on February 1, 2008, serves a purely administrative function of placing third-
parties on notice of the current mortgagee of record. The Assignment of Mortgage is
not legally operative to transfer the Mortgage, as the Note and Mortgage were
transferred to Plaintiff already, in June 2006. There is a long-standing and fundamental
maxim of real property law in the United States that states that one cannot transfer an
interest in real property that one does not have. This maxim was stated more precisely
by the United States Supreme Court one hundred and fifty years ago in Pennock v. Coe
(1859), 64 U.S. (23 How.) 117, 127-128, 16 L.Ed. 436 as follows:
[A] person cannot grant a thing which he has not: ille non habet, non dat;
and many authorities are referred to at law to prove the proposition, and
many more might have been added from cases in equity, for equity no
more than law can deny it. The thing itself is an impossibility. It may, atonce, therefore, be admitted, whenever a party undertakes, by deed or
mortgage, to grant property, real or personal, in presenti, which does not
belong to him or has no existence, the deed or mortgage, as the case may
be, is inoperative and void, and this either in a court of law or equity.
Pennock, 64 U.S. (23 How.) 117, 127-128.
Based upon the foregoing discussion, the Assignment of Mortgage to Plaintiff,
while serving the function of notice to third-parties, it is irrelevant to the issue of when
and how Plaintiff acquired its interest in the Qwinn Note and Mortgage. To the extent
that Defendants may rely upon the First District Court of Appeals decision in Wells
Fargo Bank, N.A. v. Byrd et al. (Sept. 11, 2008) 2008-Ohio-4603, Ohio 1 Dist App., to .
support their argument that Plaintiff is not the real party in interest, such reliance
would be grossly misplaced. The present case is factually distinguishable from Byrd in
at least one critical respect. The mortgagee-plaintiff in the Byrd case admitted that it
acquired its interest in the Note and Mortgage that were the subject of that action after
the Complaint was filed. No such admission is made by the Plaintiff in the action at
bar. Also, in Byrd, the plaintiff failed to provide the Court with any other evidence that
of how or when the plaintiff acquired its interest, other than the mortgage assignment.
Here, Plaintiff's Complaint alleges that it was owner and holder of the Qwinn Note and
Mortgage when the Complaint was filed and Plaintiff has filed the Note with
Endorsement and all pertinent documents filed with Securities and Exchange
Commission (“SEC”) evidencing the creation of the SASCO Mortgage Loan Trust, 2006-
NCI and the transfer of the Loans to the Trust and the Loan Schedule showing that theQwinn Note and Mortgage were transferred to the Trust as part of the securitization
transaction in June 2006. As such, unlike in Byrd, there is no question as to who the real
party in interest is and has been since prior to the inception of this action.
It warrants mentioning that the Hamilton County Court of Common Pleas, the
same trial court that decided the Byrd case, initially, recently issued a decision clarifying
the holding in Byrd. In ].PMorgan Chase Bank v. Christian (Aug. 31, 2009), the Hamilton
County Common Pleas Court Case No. A0704013, states as follows:
Defendant Christian argues that Byrd is directly on point because the
record in this case shows that the mortgage assignment was executed after
the complaint was filed. On the other hand, Chase argues that the present
case should be distinguished from Byrd since Chase has presented
evidence that it acquired the note and mortgage before the complaint was
filed (the Byrd plaintiffs [siq.] failed to produce any evidence that it
acquired the note and mortgage before the complaint was filed). In fact,
Chase has submitted an affidavit that asserts that it acquired the note and
mortgage in 2002, nearly five years before the complaint was filed, and
that when Plaintiff did so the loan was not yet in default. [...]
The Magistrate held that Byrd was on point. The Magistrate held
that ‘this court is left to conclude that the First District intended the
execution of an assignment of mortgage in the plaintiff's favor as (an
absolute prerequisite) for invoking jurisdiction in foreclosure actions
where the plaintiff is neither the payee of the Note nor the original
mortgage holder’.
The outcome in Byrd turned on acquisition of an enforceable
interest not on execution of a particular document. [. . .] As the First
District explained: ‘[the plaintiff] admitted to the trial court that it was
the real party in interest when the suit was filed [because the plaintiff]
filed suit on its own behalf and acquired the mortgage from [the prior
mortgagee] later’. [Bold typeface added all other emphasis.]J.PMorgan Chase Bank v. Christian (Aug. 31, 2009), the Hamilton County, Case No.
A0704013, page 23 Judge Myers of the Hamilton County Common Pleas Court rejected
the Magistrate’s Decision in Christian “insofar as it finds that Byrd requires an
assignment to be executed before the complaint is filed.” Id., see, Conclusion.
To the extent that Defendants may raise the Eighth District Court of Appeals
Decision in Wells Fargo Bank, N.A. v. Oties [siq] Jordan, et al., (March 12, 2009), Ohio 8
Dist App. No. 91675, supports their assertion that Plaintiff is not the real party in
interest in the within action, once again, Defendants’ reliance on the Oties Jordan case
would be misplaced. The Eighth District Court of Appeals in Oties Jordan, supra,
overturned the Cuyahoga County Common Pleas Court's grant of summary judgment
to the mortgagee-plaintiff based upon its finding the only evidence presented to the
trial court to establish the mortgagee-plaintiff’s interest in the note and mortgage at
issue in that action was the mortgage assignment. As the mortgage assignment was
dated and filed after the date of the foreclosure complaint was filed, the Eighth District
Court of Appeal determined that the mortgagee plaintiff in Jordan had failed to establish
itself as the real party in interest at the time it filed the foreclosure complaint. The
Jordan Court relied upon the Byrd case and two federal foreclosure cases in reaching this
conclusion.
> A copy of J.PMorgan Chase Bank v. Christian (Aug. 31, 2009), the Hamilton County Common Pleas Court
Case No. A0704013 is attached hereto for the Court's convenient reference.The Jordan case is not determinative of the case at bar because it, too, is
distinguishable upon its facts. In Jordan the mortgagee-plaintiff presented no testimony
or evidence, other than the assignment of mortgage, itself, to establish when or how the
plaintiff acquired its interest in the underlying note and mortgage. This is not the case
in the case at bar. Plaintiff has filed all documents necessary to prove precisely when —
June 2006, and how Plaintiff became owner and holder of the Qwinn Note and
Mortgage. Plaintiff filed the Note with endorsement as evidence of the negotiation and
transfer of the Note to Plaintiff. Plaintiff has additionally filed all pertinent documents
filed with the SEC to show how Plaintiff acquired the subject loan. Thus, Plaintiff has
established that it is, and at all times relevant was, the real party in interest in this
action.
Respectfully submitted,
Deanna C. Stoutenborough (# 0069761)
Rick D. DeBlasis, Esq. (# 0012992)
Romi T. Fox, Esq. (# 0037174)
LERNER, SAMPSON é& ROTHFUSS
Attorney for Plaintiff
120 E. Fourth St., 8th Floor
Cincinnati, OH 45202
Ph.: (513) 412-6093
Fx.: (513) 362-3592
Deanna.stoutenborough@lsrlaw.comCERTIFICATE OF SERVICE
This is to certify that a true and exact copy of the ee duly served
upon the following by ordinary U.S. mail, postage prepaid, thi yy of October,
2009:
Colette S. Carr, Esq.
Asst. Prosecuting Attorney
301 West Third Street
Sth Floor
Dayton, OH 45402
Attorney for Defendant, Montgomery County Treasurer
Randall J. Smith, Esq.
Miami Valley Fair Housing Center, Inc
21-23 East Babbitt Street
Dayton, OH 45405
Attorney for Defendants, Wesley and Marion Quinn
Chase Home Finance LLC successor
10790 Rancho Bernardo Road
San Diego, CA 92127
DefendantSEP-@1-20@9 1@:@98 FROM:HAM CTY COMMON PLEA S13 946 5629 TO:Fax Server P.a81/7804
COURT OF COMMON PLEAS
HAMILTON COUNTY, OHIO
JPMORGAN CHASE BANK, : Case No. A0704013
Plaintiff, : (Judge Myers)
vs.
ROSALIND M. CHRISTIAN, ct al., : DECISION
Defendants.
This case is before the Court on Plaintiff JP Morgan Chase Bank's (“Chase”) Objections
to Magistrate’s Decision. For the reasons discussed below, the Magistrate’s Decision is adopted
in part and rejected in part, and the case is remmed to the Magistrate for further proceedings.
STANDARD OF REVIEW
‘This Court must “undenake an independent review as to the objected matters to ascertain
[whether] the magistrate has properly determined the factual issues and appropriately applied the
law.” Civ.R. 53(D)(4)(d). The Court “may adopt or reject a magistrate’s decision in whole or ia
part, with or without modification,” and “may hear a previously-referred matter, take additional
evidence, or return a matter to a magistrate.” Civ.R. 54(D)4)(b).
The Magistrate’s Decision granted summary judgment. Summary judgment is
appropriate where there is no genuine issue of materia} fact which remain to be litigated and the
moving party is entitled to judgment as a matter of law. Civ. R, 56(C); Celotex Corp. v. Catrett
(1986), 477 U.S. 317.
DISCUSSION
The essential issue before the Court is whether the First Diswrict’s holding in Wells Fargo
Bank, N.A. v. Byrd (1st Dist.), 2008-Ohio-4603, applies to this case. In Byrd, the First District
held that the plaintiff was not the real party in interest and thus had no standing to enforce the(-SEP-B1 - 2089 18:88 FROM: HAM CTY COMMON PLEA 513 946 S829 TO:Fax Server P.@@2/084
note and mortgage as alleged in its complaint. The Byrd niling was compelled by the fact that
the plaintiff did not acquire the mortgage until after the complaint had been filed.
Defendant Chaistian argues that Byrd is directly on point because the record in this case
shows that the mortgage assignment was executed after the complaint was filed. On the other
hand, Chasc argues that the present case should be distinguished from Byrd since Chase has
presented evidence that it acquired the note and mortgage before the complaint was filed (the
Byrd plaintiffs failed to produce any evidence that it acquired tbe note and mortgage before the
complaint was filed), In fact, Chase has submitted an affidavit that asserts that it acquired the
note and mortgage in 2002, nearly five years beforc the complaint was filed, and that when
Plaintiff did so the loan was not yet in default. Whether the loan was in default is important
because, if the affiant is to be believed, Chase may be a holder in duc course, which would mean
that Chase would not be subject to any of the personal defenses asserted by Christian. R.C.
1303,.32(A). See Mag. Dec., p. 7.
The Magistrate held that Byrd was on point. The Magistrate held that “this court is left to
conclude that the First District intended the execution of an assignment of mortgage in the
plaintiffs favor as [an absoJute prerequisite] for invoking jurisdiction in foreclosure actions
where the plaintiff is neither the payce of the Note nor the original mortgage holder.” Mag.
Dec., p. 7-8. The Court finds this too broad a reading of Byrd.
The outcome in Byrd tumed on acquisition of an enforceable interest not on execution of
a particular document, The fact that the plaintiff was not the real party in interest wasn’t a
conclusion. It was the starting point. As the First District explained: “(the plaintiff) admitted to
the trial court that it was not the real party in interest when the suit was filed [because the
plaintiff] filed suit on its own behalf and acquired the mortgage from [the prior mortgagee]
later.” Byrd, 113 (Emphasis added). The issue in Byrd was whether a non-party in intcrest can
2SEP-@1-2829 10:08 FROM:HAM CTY COMMON PLEA 513 946 5829 TO:Fax Server P.@@3/604
’ .
become a party in interest by acquiring an ownership interest in a note and mortgage after the
suit is commenced. The First District's answer was no; the plaintiff's lack of an interest when
the case was commenced created an incurable jurisdictional defect. Jd., 7. The only possible
result was dismissal without prejudice. 7d., 23.
Far from admitting that it didn’t own the note and mortgage when it commenced this
action, Chase presented an affidavit that states that it acquired the note and mortgage in 2002.
But Plaintiff also filed an assignment that was executed after the complaint was filed. This
executed assignment could be viewed as evidence that Chase did not acquire the note and
morgage until after it commenced the action. If Chase did not acquire the note and mortgage
until the execution of this assignment, then it is not the reat party in interest under the Byrd
analysis. This is an issue that must be litigated. To determine whether Byrd controls, there must
first be a finding as to when Chase acquired ownership of the note and mortgage. If it was
before the filing of the complaint, jurisdiction is proper. If it was after, jurisdiction is improper
and the casc must be dismissed. To reiterate, the key is the date of acquisition, not the date of
exceution.
‘The date of acquisition is also essential for determining whether Chase is a holder in duc
course. In order to be a holder in due course, Chase must have acquired the note and mortgage
without notice that the note was in default. See R-C. 1303.32(A)(2)(c). In this case, Chase
necessarily admits that the note was in default and that it knew of this default on or before the
day the complaint was originally filed (May 3, 2007). See Amend. Compl, 1. If Chase did not
acquire the note until after complaint was filed, it could not be a holder in due course since it
would have had notice that the note was in default. If Chase acquired the note and mortgage in
2002, it may be a holder in due course since there has been no evidence presented that the note
was in default then.SEP-B1-2809 10:28 FROM: HAM CTY COMMON PLEA 513 946 S829 TO:Fax Server
P.084/004
This conflicting information on when Plaintiff acquired the note and mortgage is 6
genuinc issue of material fact.
CONCLUSION
The Court rejects the Magistrate’s Decision insofar as it finds that Byrd requires an
assignment to be executed before the complaint is filed. The Court, however, adopts the
Magistrate's Decision insofar as it denics Plaintiff's motion for summary judgment. The case is
returned to the Magistrate for further proceedings.
The parties are referred to Local Rule 17 for preparation of an entry.
Copies to;
Christopher Phillips
Benjamin D. Camahan
Shapiro, Van Ess, Phillips & Barragate, LLP
4805 Montgomcry Road, Suite 320
Norwood, OH 45212
Fax: 847-627-8805
Attorney for Plaintiff
Jason A, Fountain
Legal Aid Socicty of Southwest Ohio, LLC
215 East Ninth Street, Suite 500
Cincinnati, OH 45202
Fax: $13-241-7871
Attorney for Defendant
AUT Ca yr
Judge Beth A. Myers ()
ENTER
AUG 3 1 2009
BETH A. MYERS, JUDGE
Preview
(qishiimuon moa act 7b A iG UZ ” . 1 gy COURT OF COMMON PLEAS MONTGOMERY COUNTY, OHIO U.S. Bank, N.A., as Trustee for the Structured ' Case No. 2007 CV 9571 Asset Securities Corporation Mortgage Loan ! Trust, 2006- NC1, i Judge Jeffrey E. Froelich Plaintiff, | PLAINTIFF'S BRIEF AS TO REAL “vs- ; PARTY IN INTEREST Wesley A. Quinn, et al., i i i i i i 4 ‘ Defendants. Plaintiff, U.S. Bank, N.A., as Trustee for the Structured Asset Securities Corporation ("SASCO") Mortgage Loan Trust, 2006- NC1 (“Plaintiff”) is the real party in interest and was the real party in interest prior to filing the within foreclosure action on November 14, 2007. A real party in interest is one who is directly benefited or injured by the outcome of the case. Shealy v. Campbell (1985), 20 Ohio St.3d 23, 24, 20 OBR 210, 485 N.E.2d 701. “The current holder of the note and mortgage is the real party in Case No. 2007 CV 9571 LSR #200725626interest in foreclosure actions”. U.S. Bank Natl. Assn. v. Marcio et al. (2009), 181 Ohio App.3d 328, 334. Plaintiff in the present action was the holder of the subject promissory note dated February 28, 2006 in the amount of $80,750.00 given by Wesley Quinn, as sole obligor (hereinafter referred to as “the Quinn Note”), when it commenced foreclosure because Plaintiff had acquired all right, title and interest, in and to the Qwinn Note and Mortgage in June 2006 pursuant to that certain Trust Agreement for SASCO Mortgage Loan Trust, 2006-NC1, dated June 1, 2006.1 The original payee on the Quinn Note was New Century Mortgage Corporation, who endorsed the Note in blank and transferred the Note as part of the securitization transaction.” The original Quinn Note in Plaintiffs possession, custody and control bears the blank endorsement of the original payee, New Century Mortgage Corporation The blank endorsement of the Quinn Note converted the note to bearer paper. R.C. § 1303.25. “Blank indorsement' means an indorsement that is made by the holder of the instrument and that is not a special indorsement. When an instrument is indorsed in blank, the instrument becomes payable to bearer [. . .]”. R.C. § 1303.25(B). Plaintiff's possession of the original Qwinn Note bearing the blank endorsement of the originating ' Sce Notice of Filing SEC Form 8K, Trust Agreement; Mortgage Loan Sale and Assignment Agreement; Securitization Subservicing Agreement; and Redacted Mortgage Loan Schedule, being filed contemporancously herewith. 2 See Notice of Filing Note with Endorsements, filed in this action on February 17, 2009Lender, New Century Mortgage Corporation, is sufficient evidence to establish that Plaintiff is the real party in interest. R.C. 1303.25; Marcino, 181 Ohio Ap.3d at 337. For nearly a century, Ohio courts have held that whenever a promissory note is secured by a mortgage, the note constitutes the evidence of the debt and the mortgage is a mere incident to the obligation. Edgar v. Haines (1923), 109 Ohio St. 159, 164, 141 N.E. 837. Therefore, the negotiation of the note results in a corresponding transfer of the mortgage by operation of law, without the necessity of a separate assignment of the mortgage. Bank of New York as Trustee, v. Dobbs (Sept. 8, 2009), Knox App. No. 2009-CA- 000002, | 26; LaSalle Bank National Association, v. Street, Licking App. No. 08CA60, 2009- QOhio-1855; Marcino, 337; Kuck v. Sommers (1950), 59 Ohio Law Abs. 400, 100 N.E.2d 68; Kernohan v. Manss (1895), 53 Ohio St. 118, 41 N.E. 258; Holmes v. Gardner (1893), 50 Ohio St. 167, 33 N.E. 644; 69 Ohio Jur. 3d Mortgages § 461 (February 2008), R.C. § 1309.203 [UCC 9-203] is a codification of the common-law rule that a transfer of an obligation secured by a security interest or other lien on personal or real property also transfers the security interest or lien.’ Marcino, at 337, citing, Official Comment 9 to U.C.C. 9-203, the source of R.C. 1309.203. As transferee of the Note, Plaintiff, upon the endorsement of the Note, succeeded to all the rights of the transferor, New Century Mortgage Corporation., including the right to enforce the Qwinn Mortgage through this foreclosure proceeding. Dobbs, supra; Street, supra; Marcino, supra; Cincinnati ex rel. Ritter v. Cincinnati Reds, L.L.C. (2002), 150Ohio App.3d 728, 739, 2002-Ohio-7078, 782 N.E.2d 1225 (citing Leber v. Buckeye Union Ins. Co. (1997), 125 Ohio App.3d 321, 332, 708 N.E. 2d 726, quoting, Inter Ins. Exchange v. Wagstaff (1945), 144 Ohio St. 457, 460, 59 N.E.2d 373, “As a general rule, an assignee stands in the shoes of the assignor . . . and succeeds to all the rights and remedies of the latter.”) Negotiation and/or transfer of the Note automatically carried with it the Mortgage and all the attendant benefits of the Mortgage. Id. With, or without, an Assignment of Mortgage from Mortgage Electronic Registration Systems, Inc., as nominee for New Century Mortgage Corporation, Plaintiff was the own and holder of the Qwinn Note and the Qwinn Mortgage as of June 2006. The Assignment of Mortgage from MERS to Plaintiff dated January 17, 2008 and filed for record on February 1, 2008, serves a purely administrative function of placing third- parties on notice of the current mortgagee of record. The Assignment of Mortgage is not legally operative to transfer the Mortgage, as the Note and Mortgage were transferred to Plaintiff already, in June 2006. There is a long-standing and fundamental maxim of real property law in the United States that states that one cannot transfer an interest in real property that one does not have. This maxim was stated more precisely by the United States Supreme Court one hundred and fifty years ago in Pennock v. Coe (1859), 64 U.S. (23 How.) 117, 127-128, 16 L.Ed. 436 as follows: [A] person cannot grant a thing which he has not: ille non habet, non dat; and many authorities are referred to at law to prove the proposition, and many more might have been added from cases in equity, for equity no more than law can deny it. The thing itself is an impossibility. It may, atonce, therefore, be admitted, whenever a party undertakes, by deed or mortgage, to grant property, real or personal, in presenti, which does not belong to him or has no existence, the deed or mortgage, as the case may be, is inoperative and void, and this either in a court of law or equity. Pennock, 64 U.S. (23 How.) 117, 127-128. Based upon the foregoing discussion, the Assignment of Mortgage to Plaintiff, while serving the function of notice to third-parties, it is irrelevant to the issue of when and how Plaintiff acquired its interest in the Qwinn Note and Mortgage. To the extent that Defendants may rely upon the First District Court of Appeals decision in Wells Fargo Bank, N.A. v. Byrd et al. (Sept. 11, 2008) 2008-Ohio-4603, Ohio 1 Dist App., to . support their argument that Plaintiff is not the real party in interest, such reliance would be grossly misplaced. The present case is factually distinguishable from Byrd in at least one critical respect. The mortgagee-plaintiff in the Byrd case admitted that it acquired its interest in the Note and Mortgage that were the subject of that action after the Complaint was filed. No such admission is made by the Plaintiff in the action at bar. Also, in Byrd, the plaintiff failed to provide the Court with any other evidence that of how or when the plaintiff acquired its interest, other than the mortgage assignment. Here, Plaintiff's Complaint alleges that it was owner and holder of the Qwinn Note and Mortgage when the Complaint was filed and Plaintiff has filed the Note with Endorsement and all pertinent documents filed with Securities and Exchange Commission (“SEC”) evidencing the creation of the SASCO Mortgage Loan Trust, 2006- NCI and the transfer of the Loans to the Trust and the Loan Schedule showing that theQwinn Note and Mortgage were transferred to the Trust as part of the securitization transaction in June 2006. As such, unlike in Byrd, there is no question as to who the real party in interest is and has been since prior to the inception of this action. It warrants mentioning that the Hamilton County Court of Common Pleas, the same trial court that decided the Byrd case, initially, recently issued a decision clarifying the holding in Byrd. In ].PMorgan Chase Bank v. Christian (Aug. 31, 2009), the Hamilton County Common Pleas Court Case No. A0704013, states as follows: Defendant Christian argues that Byrd is directly on point because the record in this case shows that the mortgage assignment was executed after the complaint was filed. On the other hand, Chase argues that the present case should be distinguished from Byrd since Chase has presented evidence that it acquired the note and mortgage before the complaint was filed (the Byrd plaintiffs [siq.] failed to produce any evidence that it acquired the note and mortgage before the complaint was filed). In fact, Chase has submitted an affidavit that asserts that it acquired the note and mortgage in 2002, nearly five years before the complaint was filed, and that when Plaintiff did so the loan was not yet in default. [...] The Magistrate held that Byrd was on point. The Magistrate held that ‘this court is left to conclude that the First District intended the execution of an assignment of mortgage in the plaintiff's favor as (an absolute prerequisite) for invoking jurisdiction in foreclosure actions where the plaintiff is neither the payee of the Note nor the original mortgage holder’. The outcome in Byrd turned on acquisition of an enforceable interest not on execution of a particular document. [. . .] As the First District explained: ‘[the plaintiff] admitted to the trial court that it was the real party in interest when the suit was filed [because the plaintiff] filed suit on its own behalf and acquired the mortgage from [the prior mortgagee] later’. [Bold typeface added all other emphasis.]J.PMorgan Chase Bank v. Christian (Aug. 31, 2009), the Hamilton County, Case No. A0704013, page 23 Judge Myers of the Hamilton County Common Pleas Court rejected the Magistrate’s Decision in Christian “insofar as it finds that Byrd requires an assignment to be executed before the complaint is filed.” Id., see, Conclusion. To the extent that Defendants may raise the Eighth District Court of Appeals Decision in Wells Fargo Bank, N.A. v. Oties [siq] Jordan, et al., (March 12, 2009), Ohio 8 Dist App. No. 91675, supports their assertion that Plaintiff is not the real party in interest in the within action, once again, Defendants’ reliance on the Oties Jordan case would be misplaced. The Eighth District Court of Appeals in Oties Jordan, supra, overturned the Cuyahoga County Common Pleas Court's grant of summary judgment to the mortgagee-plaintiff based upon its finding the only evidence presented to the trial court to establish the mortgagee-plaintiff’s interest in the note and mortgage at issue in that action was the mortgage assignment. As the mortgage assignment was dated and filed after the date of the foreclosure complaint was filed, the Eighth District Court of Appeal determined that the mortgagee plaintiff in Jordan had failed to establish itself as the real party in interest at the time it filed the foreclosure complaint. The Jordan Court relied upon the Byrd case and two federal foreclosure cases in reaching this conclusion. > A copy of J.PMorgan Chase Bank v. Christian (Aug. 31, 2009), the Hamilton County Common Pleas Court Case No. A0704013 is attached hereto for the Court's convenient reference.The Jordan case is not determinative of the case at bar because it, too, is distinguishable upon its facts. In Jordan the mortgagee-plaintiff presented no testimony or evidence, other than the assignment of mortgage, itself, to establish when or how the plaintiff acquired its interest in the underlying note and mortgage. This is not the case in the case at bar. Plaintiff has filed all documents necessary to prove precisely when — June 2006, and how Plaintiff became owner and holder of the Qwinn Note and Mortgage. Plaintiff filed the Note with endorsement as evidence of the negotiation and transfer of the Note to Plaintiff. Plaintiff has additionally filed all pertinent documents filed with the SEC to show how Plaintiff acquired the subject loan. Thus, Plaintiff has established that it is, and at all times relevant was, the real party in interest in this action. Respectfully submitted, Deanna C. Stoutenborough (# 0069761) Rick D. DeBlasis, Esq. (# 0012992) Romi T. Fox, Esq. (# 0037174) LERNER, SAMPSON é& ROTHFUSS Attorney for Plaintiff 120 E. Fourth St., 8th Floor Cincinnati, OH 45202 Ph.: (513) 412-6093 Fx.: (513) 362-3592 Deanna.stoutenborough@lsrlaw.comCERTIFICATE OF SERVICE This is to certify that a true and exact copy of the ee duly served upon the following by ordinary U.S. mail, postage prepaid, thi yy of October, 2009: Colette S. Carr, Esq. Asst. Prosecuting Attorney 301 West Third Street Sth Floor Dayton, OH 45402 Attorney for Defendant, Montgomery County Treasurer Randall J. Smith, Esq. Miami Valley Fair Housing Center, Inc 21-23 East Babbitt Street Dayton, OH 45405 Attorney for Defendants, Wesley and Marion Quinn Chase Home Finance LLC successor 10790 Rancho Bernardo Road San Diego, CA 92127 DefendantSEP-@1-20@9 1@:@98 FROM:HAM CTY COMMON PLEA S13 946 5629 TO:Fax Server P.a81/7804 COURT OF COMMON PLEAS HAMILTON COUNTY, OHIO JPMORGAN CHASE BANK, : Case No. A0704013 Plaintiff, : (Judge Myers) vs. ROSALIND M. CHRISTIAN, ct al., : DECISION Defendants. This case is before the Court on Plaintiff JP Morgan Chase Bank's (“Chase”) Objections to Magistrate’s Decision. For the reasons discussed below, the Magistrate’s Decision is adopted in part and rejected in part, and the case is remmed to the Magistrate for further proceedings. STANDARD OF REVIEW ‘This Court must “undenake an independent review as to the objected matters to ascertain [whether] the magistrate has properly determined the factual issues and appropriately applied the law.” Civ.R. 53(D)(4)(d). The Court “may adopt or reject a magistrate’s decision in whole or ia part, with or without modification,” and “may hear a previously-referred matter, take additional evidence, or return a matter to a magistrate.” Civ.R. 54(D)4)(b). The Magistrate’s Decision granted summary judgment. Summary judgment is appropriate where there is no genuine issue of materia} fact which remain to be litigated and the moving party is entitled to judgment as a matter of law. Civ. R, 56(C); Celotex Corp. v. Catrett (1986), 477 U.S. 317. DISCUSSION The essential issue before the Court is whether the First Diswrict’s holding in Wells Fargo Bank, N.A. v. Byrd (1st Dist.), 2008-Ohio-4603, applies to this case. In Byrd, the First District held that the plaintiff was not the real party in interest and thus had no standing to enforce the(-SEP-B1 - 2089 18:88 FROM: HAM CTY COMMON PLEA 513 946 S829 TO:Fax Server P.@@2/084 note and mortgage as alleged in its complaint. The Byrd niling was compelled by the fact that the plaintiff did not acquire the mortgage until after the complaint had been filed. Defendant Chaistian argues that Byrd is directly on point because the record in this case shows that the mortgage assignment was executed after the complaint was filed. On the other hand, Chasc argues that the present case should be distinguished from Byrd since Chase has presented evidence that it acquired the note and mortgage before the complaint was filed (the Byrd plaintiffs failed to produce any evidence that it acquired tbe note and mortgage before the complaint was filed), In fact, Chase has submitted an affidavit that asserts that it acquired the note and mortgage in 2002, nearly five years beforc the complaint was filed, and that when Plaintiff did so the loan was not yet in default. Whether the loan was in default is important because, if the affiant is to be believed, Chase may be a holder in duc course, which would mean that Chase would not be subject to any of the personal defenses asserted by Christian. R.C. 1303,.32(A). See Mag. Dec., p. 7. The Magistrate held that Byrd was on point. The Magistrate held that “this court is left to conclude that the First District intended the execution of an assignment of mortgage in the plaintiffs favor as [an absoJute prerequisite] for invoking jurisdiction in foreclosure actions where the plaintiff is neither the payce of the Note nor the original mortgage holder.” Mag. Dec., p. 7-8. The Court finds this too broad a reading of Byrd. The outcome in Byrd tumed on acquisition of an enforceable interest not on execution of a particular document, The fact that the plaintiff was not the real party in interest wasn’t a conclusion. It was the starting point. As the First District explained: “(the plaintiff) admitted to the trial court that it was not the real party in interest when the suit was filed [because the plaintiff] filed suit on its own behalf and acquired the mortgage from [the prior mortgagee] later.” Byrd, 113 (Emphasis added). The issue in Byrd was whether a non-party in intcrest can 2SEP-@1-2829 10:08 FROM:HAM CTY COMMON PLEA 513 946 5829 TO:Fax Server P.@@3/604 ’ . become a party in interest by acquiring an ownership interest in a note and mortgage after the suit is commenced. The First District's answer was no; the plaintiff's lack of an interest when the case was commenced created an incurable jurisdictional defect. Jd., 7. The only possible result was dismissal without prejudice. 7d., 23. Far from admitting that it didn’t own the note and mortgage when it commenced this action, Chase presented an affidavit that states that it acquired the note and mortgage in 2002. But Plaintiff also filed an assignment that was executed after the complaint was filed. This executed assignment could be viewed as evidence that Chase did not acquire the note and morgage until after it commenced the action. If Chase did not acquire the note and mortgage until the execution of this assignment, then it is not the reat party in interest under the Byrd analysis. This is an issue that must be litigated. To determine whether Byrd controls, there must first be a finding as to when Chase acquired ownership of the note and mortgage. If it was before the filing of the complaint, jurisdiction is proper. If it was after, jurisdiction is improper and the casc must be dismissed. To reiterate, the key is the date of acquisition, not the date of exceution. ‘The date of acquisition is also essential for determining whether Chase is a holder in duc course. In order to be a holder in due course, Chase must have acquired the note and mortgage without notice that the note was in default. See R-C. 1303.32(A)(2)(c). In this case, Chase necessarily admits that the note was in default and that it knew of this default on or before the day the complaint was originally filed (May 3, 2007). See Amend. Compl, 1. If Chase did not acquire the note until after complaint was filed, it could not be a holder in due course since it would have had notice that the note was in default. If Chase acquired the note and mortgage in 2002, it may be a holder in due course since there has been no evidence presented that the note was in default then.SEP-B1-2809 10:28 FROM: HAM CTY COMMON PLEA 513 946 S829 TO:Fax Server P.084/004 This conflicting information on when Plaintiff acquired the note and mortgage is 6 genuinc issue of material fact. CONCLUSION The Court rejects the Magistrate’s Decision insofar as it finds that Byrd requires an assignment to be executed before the complaint is filed. The Court, however, adopts the Magistrate's Decision insofar as it denics Plaintiff's motion for summary judgment. The case is returned to the Magistrate for further proceedings. The parties are referred to Local Rule 17 for preparation of an entry. Copies to; Christopher Phillips Benjamin D. Camahan Shapiro, Van Ess, Phillips & Barragate, LLP 4805 Montgomcry Road, Suite 320 Norwood, OH 45212 Fax: 847-627-8805 Attorney for Plaintiff Jason A, Fountain Legal Aid Socicty of Southwest Ohio, LLC 215 East Ninth Street, Suite 500 Cincinnati, OH 45202 Fax: $13-241-7871 Attorney for Defendant AUT Ca yr Judge Beth A. Myers () ENTER AUG 3 1 2009 BETH A. MYERS, JUDGE