Editor: David Reiss
Brooklyn Law School

February 22, 2014

The Court of Appeals of Ohio Upholds Foreclosure Judgment Against Homeowner for Failing to Challenge Bank’s Standing During Trial

By Karume James

In October 2013, the Court of Appeals of Ohio in Wells Fargo Bank N.A., v. Arlington affirmed a trial court’s judgment in favor of the plaintiff bank in a foreclosure action because the homeowner did not properly challenge the bank’s standing to start the foreclosure action during the trial.

In 2006, Dean Arlington (“Defendant”) bought a home in Ohio with a mortgage from Taylor, Bean & Whitaker Mortgage Corp (“TBW”) and MERS. In 2007, MERS sold the mortgage to Wells Fargo Bank, N.A (“Plaintiff”) and in January 2008, Plaintiff initiated a foreclosure action against Defendant. In August 2008, Defendant filed an answer to the foreclosure and Plaintiff moved for summary judgment, but the Court denied Plaintiff’s motion. The case was stayed for three years due to bankruptcy notice. After the bankruptcy stay was lifted, Plaintiff filed a second motion for summary judgment on March 24, 2011. The trial court granted the motion for summary judgment in June  2011 and entered the decree of foreclosure. Defendant first filed a notice of appeal in June 2011 and filed an Emergency Motion for Relief from Judgment in October 2011. Defendant later voluntarily dismissed the appeal in November 2011.

In Defendant’s emergency motion, he argued that the trial court should vacate the foreclosure decree because Plaintiff did not have standing to bring the foreclosure action. The trial court denied the motion in October 2011 and Defendant did not appeal the judgment. One year later in October 2012, the Ohio Supreme Court issued Fed. Home Loan Mortg. Corp. v. Schwartzwald, 134 Ohio St.3d 13. In January 2013, Defendant filed a motion to vacate the trial court’s June 2011 judgment, citing the Schwartzwald case to argue that Plaintiff did not have standing when it filed the complaint in foreclosure. The trial court denied the motion to vacate in March 2013 and Defendant appealed claiming two assignments of error: 1) that the trial court abused its discretion for denying Defendant’s motion to vacate, and alternatively 2) whether the jurisdiction is void for lack of jurisdiction.

The Court of Appeals of Ohio overruled both of Defendant’s assignments of error. The Court of Appeals rejected Defendant’s standing argument under Schwartzwald and held that it did not apply to the facts of this case. The Court of Appeals further held that Defendant’s standing argument was barred by res judicata because he had failed to challenge Plaintiff’s standing in the trial court. The Court therefore held that Plaintiff had standing to initiate the foreclosure action, denied Defendant’s motions and affirmed the trial court’s judgment against Defendant.

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