A 2012 Ohio Supreme Court decision doesn’t require plaintiffs to prove they have the right to sue at the time of filing a foreclosure action.

A 2012 Ohio Supreme Court decision doesn’t require plaintiffs to prove they have the right to sue at the time of filing a foreclosure action.

Although the party seeking a foreclosure must have standing (the right to sue) when the lawsuit is filed, proof of standing may be submitted after the filing of the complaint, the Ohio Supreme Court unanimously ruled today.

The opinion, written by Justice Sharon L. Kennedy, clarifies that the Supreme Court’s 2012 decision in Fed. Home Loan Mtge. Corp. v. Schwartzwald does not require a plaintiff to prove standing at the time a foreclosure action is filed.

In this case, the court determined that Wells Fargo Bank, N.A., established it was the interested party in the foreclosure action through documents submitted to the court after the initial complaint was made in Lorain County.

The ruling reinstates Wells Fargo’s lawsuit, reverses the Ninth District Court of Appeals’ judgment, and returns the case to the appeals court to consider unaddressed claims from the homeowners.

Background
In April 2010, Wells Fargo Bank, N.A., sought foreclosure on a house purchased by Brian and Carol Horn in Columbia Station. Copies of the promissory note and mortgage attached to the complaint listed Norwest Mortgage as the lender on the loan. The named plaintiff was “Wells Fargo Bank, N.A. successor by merger to Wells Fargo Home Mortgage, Inc. fka Norwest Mortgage, Inc.”

In a request to the trial court for summary judgment in the case, Wells Fargo provided an employee’s affidavit, which stated Norwest Mortgage changed its name in 2000 to Wells Fargo Home Mortgage, which later merged into Wells Fargo. The company also included an Ohio secretary of state document showing that Norwest Mortgage became Wells Fargo Home Mortgage, and a California secretary of state filing indicating that Wells Fargo Home Mortgage merged with Wells Fargo in 2004.

The trial court granted summary judgment to Wells Fargo and later issued a foreclosure order to the company.

Representing himself, Brian Horn appealed the decision to the Ninth District. The court held that, based on Schwartzwald, Wells Fargo had to attach proof of standing to the foreclosure action, and the court ordered the case back to the trial court for dismissal.

Wells Fargo appealed the decision.

Court’s Ruling
Justice Kennedy reviewed the Schwartzwald ruling and explained its meaning.

“The import of our holding in Schwartzwald is that the plaintiff in a foreclosure action must have standing at the time that it files its complaint,” she wrote. “But nowhere in the opinion did this court indicate that the plaintiff must also submit proof of standing at that time. … Proof of standing may be submitted subsequent to filing the complaint.”

“After filing the complaint, Wells Fargo submitted proof of standing regarding the fact that it was the real party in interest through an affidavit and other documents attached to its motion for summary judgment,” she explained. “Documents attached to the motion for summary judgment confirmed the name change and merger and the timing of each event. These materials verified that Wells Fargo had standing to file the foreclosure action against the Horns at the time that it filed the complaint in 2010.”

2013-1534. Wells Fargo Bank, N.A. v. Horn, Slip Opinion No. 2015-Ohio-1484.

View oral argument video of this case.

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