OneWEST BANK, FSB v. Dorner "CitiMortgage mortgage was defectively executed in that Dorner's signature was not acknowledged by a notary public"


OneWEST BANK, FSB v. Dorner “CitiMortgage mortgage was defectively executed in that Dorner’s signature was not acknowledged by a notary public”

OneWEST BANK, FSB v. Dorner “CitiMortgage mortgage was defectively executed in that Dorner’s signature was not acknowledged by a notary public”

H/T The Home Equity Theft Reporter

2011 Ohio 4177
164 Ohio Misc.2d 63.

OneWest Bank, FSB,
Dorner et al.

No. CI09-7477

Court of Common Pleas of Ohio, Lucas County.

 DATE: January 7, 2011.


Matthew J. Richardson and Robert B. Holman, for plaintiff.Joyce Anagnos, for defendant Toledo Department of Public Utilities.Steven E. Elder, Michelle Polly Murphy, Nicholas D. Donnermeyer, and Andrew P. George for intervening defendant, CitiMortgage, Inc.



McDONALD, Judge.

{¶1} This case is before the court upon the motion for summary judgment as to lien priority filed by plaintiff OneWest Bank, FSB, against intervening defendant CitiMortgage, Inc. Upon consideration of the pleadings, the evidence, the written arguments of counsel, and the applicable law, I find that the motion for summary judgment should be granted.


{¶2} Defendant Kevin Dorner is the current owner of real estate located at 2026 N. Michigan Street, Toledo, Lucas County, Ohio (“the property”).

{¶3} On April 5, 2005, Dorner executed a mortgage and note on the property in favor of mortgagee Mortgage Electronic Registration Systems, Inc. (“MERS”). Mortgage Method, L.L.C. was the lender.[1]

{¶4} On February 8, 2007, Dorner executed a mortgage and note on the property in favor of mortgagee MERS. Indymac Bank, FSB was the lender.[2]

{¶5} On October 13, 2009, OneWest filed its complaint for foreclosure on its mortgage and note against Dorner, unknown spouse (if any) of Dorner, and the city of Toledo, Department of Public Utilities (“the city”). The city filed an answer to the complaint.

{¶6} On October 13, 2009, a preliminary judicial report for the property was filed.

{¶7} On October 22, 2009, the notice of filing of the final judicial report for the property was filed.

{¶8} On November 16, 2009, OneWest filed a motion for default judgment against Dorner and his unknown spouse, if any. This motion was granted.

{¶9} On December 18, 2009, CitiMortgage filed a motion to intervene as a party defendant. This motion was granted.

{¶10} On January 13, 2010, CitiMortgage filed an answer, cross-claim, and counterclaim. In its cross-claim and counterclaim, CitiMortgage alleges that Dorner is in default under the note and mortgage filed April 11, 2005, that it declared the debt due, and that it is entitled to have the mortgage foreclosed. CitiMortgage further alleges that OneWest and the city may claim an interest in the property. CitiMortgage prays that its mortgage be adjudged a valid first lien on the property, that its mortgage be foreclosed, that the property be sold, and that CitiMortgage be paid out of the proceeds of the sale. OneWest filed a reply to the counterclaim.

{¶11} An order of sale for the property was issued on March 5, 2010.

{¶12} On March 15, 2010, OneWest filed its motion for summary judgment as to the lien priority between its mortgage and CitiMortgage’s alleged mortgage.

{¶13} On April 20, 2010, CitiMortgage filed its motion to stay the sheriff sale so that the dispute over the priority of liens could be resolved. This motion was granted on May 4, 2010.

{¶14} On August 23, 2010, CitiMortgage filed an opposition to OneWest’s motion for summary judgment. Thereafter, OneWest filed a reply. The motion is now decisional.


{¶15} The general rules governing motions for summary judgment filed pursuant to Civ.R. 56 are well established. In Harless v. Willis Day Warehousing Co. (1978), 54 Ohio St.2d 64, 66, the Supreme Court of Ohio stated the requirements that must be met before a motion for summary judgment can be granted:

{¶16} “The appositeness of rendering a summary judgment hinges upon the tripartite demonstration: (1) that there is no genuine issue as to any material fact; (2) that the moving party is entitled to judgment as a matter of law; and (3) that reasonable minds can come to but one conclusion, and that conclusion is adverse to the party against whom the motion for summary judgment is made, who is entitled to have the evidence construed most strongly in his favor.

{¶17} “The burden of showing that no genuine issue exists as to any material fact falls upon the moving party in requesting a summary judgment.”

{¶18} A party who claims to be entitled to summary judgment on the ground that a nonmovant cannot prove its case bears the initial burden of (1) specifically identifying the basis of its motion, and (2) identifying those portions of the record that demonstrate the absence of a genuine issue of material fact regarding an essential element of the nonmovant’s case. Dresher v. Burt (1996), 75 Ohio St.3d 280, 293; see also Dresher, 75 Ohio St.3d at 299 (Pfeifer, J., concurring in judgment only). The movant satisfies this burden by calling attention to some competent summary-judgment evidence, of the type listed in Civ.R. 56, affirmatively demonstrating that the nonmovant has no evidence to support his or her claims. Id. Once the movant has satisfied this initial burden, the burden shifts to the nonmovant to set forth specific facts, in the manner prescribed by Civ.R. 56(E), indicating that a genuine issue of material fact exists for trial. Dresher at 293. Accord Mitseff v. Wheeler (1988), 38 Ohio St.3d 112, 114-115.

{¶19} The Sixth District Court of Appeals has consistently held that summary judgment should be granted with caution in order to protect the nonmoving party’s right to trial. As stated by the court in Viock v. Stowe-Woodward Co. (1983), 13 Ohio App.3d 7, 14-15:

{¶20} “We recognize that summary judgment, pursuant to Civ.R. 56, is a salutary procedure in the administration of justice. It is also, however, a procedure which should be used cautiously and with the utmost care so that a litigant’s right to a trial, wherein the evidentiary portion of the litigant’s case is presented and developed, is not usurped in the presence of conflicting facts and inferences. * * * It is settled law that `[t]he inferences to be drawn from the underlying facts contained in the affidavits and other exhibits must be viewed in the light most favorable to the party opposing the motion, * * *’ which party in the instant case is appellant. * * * It is imperative to remember that the purpose of summary judgment is not to try issues of fact, but rather to determine whether triable issues of fact exist.” (Citations omitted.)


{¶21} OneWest contends that it is entitled to summary judgment, as its lien is superior to CitiMortgage’s lien. OneWest argues that CitiMortgage’s alleged mortgage is invalid because it is not notarized. Moreover, OneWest maintains that its knowledge of the defective mortgage is irrelevant. OneWest cites R.C. 5301.01 and 5301.25, as well as numerous cases, including Citizens Natl. Bank v. Denison (1956), 165 Ohio St. 89, and Mtg. Elec. Registration Sys. v. Odita, 159 Ohio App.3d 1, 2004-Ohio-5546.

{¶22} In opposition, CitiMortgage asserts that its mortgage, which properly described the property, was recorded first, and OneWest had actual or constructive notice of the mortgage. CitiMortgage claims that pursuant to R.C. 5301.23, it is entitled to priority because first in time should be first in right, and its mortgage was recorded almost two years before OneWest’s mortgage. CitiMortgage submits that even if there is an error in the acknowledgement clause, this mistake does not void the instrument, as it is subject to reformation pursuant to R.C. 2719.01. CitiMortgage maintains that OneWest would be unjustly enriched if OneWest were allowed to maintain an interest in the property to the exclusion of CitiMortgage.

{¶23} In its reply, OneWest observes that R.C. 5301.23 is not applicable, as it applies to only properly executed mortgages. OneWest agrees with CitiMortgage that first in time means first in right, but OneWest notes that this provision applies to only properly executed mortgages, not defective instruments. OneWest offers that Ohio law is clear that when a notary’s ackowledgement is defective, the instrument is ineffective against subsequent creditors. OneWest maintains that because its mortgage is properly executed, it takes priority over the defective mortgage, which was not entitled to be recorded and is not entitled to reformation.

{¶24} Before the motion for summary judgment is analyzed, it must be noted that the assignment of the mortgage from MERS to OneWest occurred on October 22, 2009, more than a week after OneWest filed its complaint in the present case. The notice of assignment was filed with the court less than one month later. Thus, the notice was sufficient to alert the court, Dorner, and others that OneWest was the real party in interest. See Campus Sweater & Sportswear Co. v. M. B. Kahn Constr. Co. (D.C.S.C.1979), 515 F.Supp. 64, 84-85 (because the assignment took place a year before trial, the defendant was not prejudiced by the assignment, and the assignee was the real party in interest to bring the suit.). Moreover, no party has raised the issue that OneWest is not the real party in interest. See Wachovia Bank, N.A. v. Cipriano, 5th Dist. No. 09CA007, 2009-Ohio-5470, at ¶ 38 (“Pursuant to Civ.R. 17(A), the real party of interest shall `prosecute’ the claim. The rule does not state `file’ the claim”). See also LaSalle Bank Natl. Assn. v. Street, 5th Dist. No. 08 CA 60, 2009-Ohio-1855, at ¶ 28. Accordingly, OneWest, as the real party in interest, has legal standing to bring this foreclosure action.

{¶25} With respect to the motion for summary judgment, OneWest contends that CitiMortgage’s mortgage is defective, yet CitiMortgage maintains that the mortgage should be reformed.

{¶26} R.C. 5301.01 provides:

{¶27} “(A) A deed, mortgage * * * shall be signed by the grantor, mortgagor * * *. The signing shall be acknowledged by the grantor, mortgagor * * * before a judge or clerk of a court of record in this state, or a county auditor, county engineer, notary public, or mayor, who shall certify the acknowledgement and subscribe the official’s name to the certificate of the acknowledgement.”

{¶28} R.C. 5301.23 provides:

{¶29} “(A) All properly executed mortgages shall be recorded in the office of the county recorder of the county in which the mortgaged premises are situated and shall take effect at the time they are delivered to the recorder for record. * * *

{¶30} “(B) A mortgage that is presented for record shall contain the then current mailing address of the mortgagee. The omission of this address or the inclusion of an incorrect address shall not affect the validity of the instrument or render it ineffective for purposes of constructive notice.”

{¶31} In Citizens Natl. Bank v. Denison, 165 Ohio St. at 95, the Ohio Supreme Court held that when the acknowledgment or execution of a deed is defective, the deed is ineffective as against subsequent creditors, but the deed “is valid as between the parties thereto, in the absence of fraud.” Moreover, a defectively executed mortgage is invalid as to a subsequent lienholder, even if the subsequent lienholder had actual knowledge of the prior, defectively executed mortgage. Odita, 159 Ohio App.3d 1, 2004-Ohio-5546, at ¶ 15.

{¶32} R.C. 2719.01 states:

“When there is an omission, defect, or error in an instrument in writing or in a proceeding by reason of the inadvertence of an officer, or of a party, person, or body corporate, so that it is not in strict conformity with the laws of this state, the courts of this state may give full effect to such instrument or proceeding, according to the true, manifest intention of the parties thereto.”

{¶33} Reformation of an instrument is an equitable remedy wherein a court modifies the instrument that, due to mutual mistake on the part of the original parties to the instrument, does not express the real intention of those parties. Greenfield v. Aetna Cas. & Sur. Co. (1944), 75 Ohio App. 122, 128. However, a defectively executed instrument, not acknowledged, cannot be reformed. Delfino v. Paul Davies Chevrolet, Inc. (1965), 2 Ohio St.2d 282, paragraphs two and three of the syllabus (“The curative effect of Section 2719.01, Revised Code, operates to validate instruments in relation to technical defects of content. It does not validate a lease which does not comply with the mandatory requirements of the statute of conveyances (Section 5301.01, Revised Code) as to execution. Where * * * [R.C. 5301.01] requires certain formalities for the execution of an instrument, reformation cannot be granted to supply these formalities”).

{¶34} Applying these principles to the present case, the CitiMortgage mortgage was defectively executed in that Dorner’s signature was not acknowledged by a notary public as required by R.C. 5301.01. Moreover, this defect cannot be cured by reformation. Thus, CitiMortgage’s defectively executed mortgage cannot take priority over a subsequent, valid, recorded mortgage. The record shows that OneWest’s subsequent mortgage was properly executed, valid, and recorded. Accordingly, OneWest’s mortgage is entitled to priority over CitiMortgage’s defective mortgage.


{¶35} The court finds that there are no genuine issues of material fact and that plaintiff OneWest Bank, FSB is entitled to summary judgment as to lien priority against intervening defendant CitiMortgage, Inc. as a matter of law. It is ordered that plaintiff OneWest Bank, FSB have summary judgment against intervening defendant CitiMortgage, Inc. as to lien priority. It is further ordered that plaintiff OneWest Bank, FSB’s mortgage is entitled to priority over the defective mortgage of intervening defendant CitiMortgage, Inc.

So ordered.

[1] MERS assigned the mortgage to CitiMortgage on December 2, 2009.

[2] On November 16, 2009, OneWest filed a notice of filing of assignment of mortgage from MERS to OneWest. The assignment occurred on October 22, 2009.

[ipaper docId=72012695 access_key=key-23z2uxayxxb19og5e6c8 height=600 width=600 /]


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One Response to “OneWEST BANK, FSB v. Dorner “CitiMortgage mortgage was defectively executed in that Dorner’s signature was not acknowledged by a notary public””

  1. DowntownDB says:

    One West Bank, Fannie Mae and MERS Defendants v Brown Motion to Dismiss DENIED.
    First Circuit Court State of Hawaii Honorable Judge Bert I. Ayabe sees the validity of our complaint Civil no. 11-1-0941-05.
    Perhaps my being in compliance and current on my modification with One West Bank and the concurrent sale of my mortgage to Fannie Mae for $10 in Texas didn’t sit right with the judge. It doesn’t pass the smell test. My attorney Dubin Law / Frederick Arensmeyer successfully argued (1) Breach of contract, (2) cancellation under the Federal-Truth-in Lending Act (TILA) (3) unfair and deceptive acts and practices and (4) quiet title for wrongful foreclosure, to the judges satisfaction to allow our lawsuit to continue. No small feat when you are up against these huge government backed institutions.
    This judge shows the courage, insight and compassion to allow David to face Goliath. So many have been denied their 5th amendment rights being stripped of their property never to have their day in court.
    I wonder if the judge had seen this video with regard to the obscene deal One West struck with the FDIC. Some of the details are explained very well in this short video:

    This deal is worthy of a Congressional Hearing.

    “I have never seen a fraud scheme that was so extensive, so pervasive, and had so many different areas of fraud throughout the machine. I have yet to see a single aspect of the banking industry that does not have fraud in it,” said Nevada Deputy Attorney General John Kelleher.
    The self-described “little judge from Brooklyn” has dismissed another foreclosure case, this time in favor of an East New York homeowner who did not even have a lawyer.
    Schack ruled Thursday that California’s OneWest, the last of several banks that relied on an admitted “robo-signer” to transfer the $492,000 mortgage on Covan Drayton’s Hemlock St. home among them, failed to prove it even owns the property in question.

    Read more:

    Judge Slams Indymac, Sets Aside Defendant’s $292,500 Mortgage

    Judge Jeffrey Spinner said that it became clear to the court at a September 2009 settlement conference — one that had been postponed five times due to Indymac’s failure to “cooperate” — that Indymac “had no good faith intention whatsoever of resolving this matter in any manner other than complete and forcible devolution of title…”

    Read more:

    Fletcher v One West Bank Case 1:10-cv-04682
    In the United States District Court for the Northern districtof Illinios
    Pg. 8 line 24
    24. IndyMac has routinely failed to live up to its end of the TPP Agreement and offer
    permanent modifications to homeowners. In February 2010, the U.S. Treasury reported that
    IndyMac’s parent company had 112,200 HAMP-eligible loans in its portfolio. Of these loans, just
    3,087 were granted permanent modifications (approximately 2.75%) even though many more
    homeowners, including Plaintiff, had made the payments and submitted the documentation
    required by the TPP Agreement.
    25. By failing to live up to its obligation under the TPP Agreement, IndyMac is leaving
    homeowners in a complete state of confusion regarding the status of their homes and is preventing
    homeowners from pursuing other avenues of resolution, including using the money they are
    putting towards TPP payments to fund bankruptcy plans, relocation costs, short sales or other

    The eligibility criteria for HAMP, as well as the formula used to calculate monthly mortgage
    payments under the modification, are explained in detail in SD 09-01. Generally speaking, the
    goal of a HAMP modification is for owner-occupants to receive a modification of a first-lien
    loan by which the monthly mortgage payment is reduced to 31 % of their monthly income for the
    next five years.

    IndyMac/OneWest Bank Denied Bid to End HAMP Class Action Lawsuit
    Memorandum opinion and order:
    Click end of second paragraph in red
    Nov 29, 9:14 PM
    Original review:
    The FDIC has given One West Bank a free trip to Vegas with the downside risk covered by the taxpayers.

    This type of collusion with the government and some banks has helped to put me in a grave situation having to go to the Hawaii Supreme Court just to be able to stay in my house. Why?

    In 2009 I fell Ill and am disabled with a long term disability insurance policy. I have been to the Mayo Cinic in Rotchester Minnesota twice in the last two years ( I live in Hawaii). When I was on short term disability I called One West Bank because I’d heard of the HAMP ( Home Affordable Modification Program). I was told by One West to go 90 days delinquent then I would qualify ( I have since heard that that is when they can put the FDIC on the hook for my loan and the credit default kicks in?). I was invited to apply and was granted a modification. It stated that as long as I made my thee trial payments on time I would be granted modification.

    The mod lowered my payment by about $350. I was sure not to mess this opportunity up I even paid by cashiers check. None the less on the 20th of August 2 2/3rds of the way through and always being early with my payment I received a letter along with my last payment returned stating that the amount paid which was exactly what was asked of me was not the outstanding balance. After getting nowhere and being told I could re-apply I was served foreclosure papers soon after. I was devastated. My 8 year old daughter has never known another house and my wife and I had worked and tirelessly on it ourselves to make it our home.

    I started to look for the best attorney in Hawaii for my problem, Gary Dubin’s name kept coming up. I heard he was not the cheapest but the best. I went to see him and he looked over my situation and told me my case was very strong. I retained him with a fairly large retainer. His very capable associate attorney Frederick Arensmeyer found out that my home had been sold to Fannie Mae on the 10th of August while I was current on my mortgage under One West’s terms. The price? $10 This is a clear case of fraud in the inducement and the attempt to take advantage of someone in distress. I am sure my health has become worse in no part because of the stress, lack of sleep and mental anguish this fraudulent bank has put me through. Never knowing if the ax is going to fall is a sure way of taking “the American Dream” and turning it to a nightmare. One West has been committing this modification fraud on a HUGE scale. The sweet heart deal that One West Scored from this administration with our Bail-Out money and the FDIC have made it a much better deal for the bank to screw the people rather than help. Please see the link below for a very brief explanation of this. HAMP is mostly a front when it comes to One West. One need only to Google “modification fraud One West Bank” and you will find scores of other people that have had similar dealings but perhaps not as outstanding council or none at all.

    On top of this the Lahaina District Court has approved eviction orders and only took five minutes to review 300 pages of material,. I am forced to go to the Hawaii Supreme Court to file an Emergency Petiton for a Writ of Mandanumus to the so-called Honorable Bliane Kobayashi;. Without proper jurisdiction this Distict Court Judge would rather throw me on the street than and allow obvious interstate fraud by a bailed out institution to go unchecked;. He would rather side with the out of state bank than a long term resident that has be in Hawaii 15 years and has always been an upstanding citizen having great respect for the law”. I will suffer irreparable harm without the facts ever being heard should I be evicted?. Has this Judge ever heard of the 5th amendment?

    Why would a judge be so one-sided and refuse to follow the same type of respect for the higher courts here in Hawaii? Are judges pension funds and the mutual funds that they contain a possible reason? In the face of all the animus towards banks for taking our money in the form of Bail-Outs then not lending or lending to foreign banks, robo signing and many other scandals why does this judge side with the institutions that seem to not respect the law? My case is fraud pure and simple..

    Fraud definition:

    A false representation of a matter of fact—whether by words or by conduct, by false or misleading allegations, or by concealment of what should have been disclosed—that deceives and is intended to deceive another so that the individual will act upon it to her or his legal injury;.

    One West Sweetheart deal:




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