Page 33 - 2018 October Bar Journal

REAL ESTATE LAW

held that lack of standing is an issue that possession of the original note and had Certified Auto/Motorcycle Appraisals
is cognizable on appeal and cannot be a valid assignment of mortgage. Further, Certified Appraisers for:

used to collaterally attack a foreclosure the court clarified that the issue in All Insurance Claims

judgment. It also held that while standing Schwartzwald was plaintiff acquiring an Bankruptcy
is required to invoke the jurisdiction of the interest in the note or mortgage after the Diminished Value

court, lack of standing does not affect the complaint filed. In Kenney, the original Expert Witness
subject-matter jurisdiction of the court plaintiff held both the original note and Charitable Donations

of common pleas. In Kutcha, plaintiff mortgage at the time of filing the complaint,
was granted summary judgment on its and thus had standing. After the complaint
foreclosure complaint. Three months later, was filed, transferring the note, assigning
the defendants filed a motion to vacate the mortgage, and substituting the plaintiff
judgment under Civ.R.60(B), which was did not cause any issue with respect to Auto Appraisal Group • John Golias
denied by the trial court. The defendants standing. For creditors, this decision helps 440-526-3445 • 800-848-2886
appealed the denial of a Civ.R.60(B) motion illustrate that post-complaint negotiation www.autoappraisal.com
to set aside judgment. On appeal, the Ninth of the note, assignment of the mortgage,
District, interpreting Schwartzwald, held and substitution of plaintiff does not create As set forth herein, standing in

that standing is a jurisdictional matter an issue with respect to standing. foreclosure actions is not generally as
and the alleged lack of standing, if proven, In Ohio’s Seventh Appellate District’s, Bank simple as establishing a sufficient interest

would warrant relief from judgment. The of Am., N.A. V. Stewart, 2014-Ohio-723, in the outcome of the case. For creditors in
Ohio Supreme Court took the case due to defendant also attempted to argue, using foreclosure actions, best practice to comply
a conflict between the Ninth and Tenth Schwarzwald, that a post-filing substitution of with Schwartzwald necessitates attaching
District holdings on whether a defendant the real party in interest under Civ.R.17 (A) a property endorsed note, in blank or
who failed to appeal the trial court was not permissible and that the originally specifically to plaintiff, and an assignment
judgment can raise lack of standing as named plaintiff did not exist rendering the of mortgage to plaintiff; to supplement the
part of a motion for relief from judgment. complaint a nullity. The plaintiff was originally record with evidence of plaintiff’s status
Concentrating the argument specifically to named as “BAC Home Loans Servicing LP as the holder and entitlement to enforce
Schwartzwald, the defendants argued that fka Countrywide Home Loans Servicing, the instruments at judgment stage; and,
a plaintiff’s lack of standing invalidated a LP.” After the complaint filed, but prior to when necessary, substituting the plaintiff
court’s subject-matter jurisdiction, thus defendant’s answer, plaintiff substituted when the interest in the note and mortgage
the judgment rendered in the underlying “Bank of America as successor to … [named are negotiated and assigned, respectively.
action was void. The Court held that plaintiff]” into the action replacing the Proceeding in this manner will decrease
defendants’ inference that Schwartzwald’s originally named plaintiff. The Seventh potential challenges to standing.
use of the term jurisdiction connotated District held that plaintiff’s substitution
subject-matter jurisdiction was incorrect. complies with the dicta of Schwartzwald
A party’s ability to invoke the court’s in that an absorbed company becomes Richard J. Sykora is a default litigation
jurisdiction refers to the jurisdiction part of the remaining company; thus the attorney with Manley Deas Kochalski
over the particular case, and not to the absorbed company suffered the injury by LLC and based out of Cleveland. His
subject-matter jurisdiction of the court defendant’s actions as part of the remaining practice is primarily centered around
in which the party is attempting to obtain company. Thus, plaintiff’s substitution did foreclosure, civil litigation, and
relief. Further, the court held that lack of not violate Schwartzwald’s holding regarding creditor’s rights. He has been a CMBA member
standing is an issue cognizable on appeal post-complaint remediation efforts under since 2018. He can be reached at (614) 767-7001
and cannot be used to collaterally attack a Civ.R.17 (A). or RJSykora@manleydeas.com.

judgment. For creditors, Kutcha provides
protection from collateral attack on the
basis of standing. EXP3RT1S3
In Ohio’s First Appellate District’s,
Bank of Am., N.A. v. Kenney, 2015-Ohio-
2485, the defendant argued that the
plaintiff in foreclosure lacked standing
because it did not produce the original Here, it’s about more than just numbers.
mortgage. Defendant also argued that the
substituted-plaintiff lacked standing based
on Schwartzwald. The court succinctly
dismissed these arguments stating there
was no question that the substitute-plaintiff 216.831.7171
has standing pursuant to Schwartzwald. cp-advisors.com
The substitute-plaintiff was in physical
OctOber 2018 Cleveland Metropolitan Bar Journal | 33