COURT OF COMMON PLEAS

HAMILTON COUNTY, OHIO

CHASE HOME FINANCE LLC CASE NO.

Plaintiff Judge Andrew West

Vs MOTION TO DISMISS

, et al

Defendants

Comes the Defendant, by and through counsel, and respectfully move this Court to

dismiss the within counts on the ground that the Plaintiff is not the real party in interest and

therefore lacks standing to sue.

______________________________
James V. Magee, Jr. (0006809).
Attorney at Law
36 East 7th Street, Suite 2020
Cincinnati, Ohio 45202
Phone: 513-621-9660
Fax: 513-345-3900
Email: jvmageejr@mageelaw.com
Attorney for Defendants Hunt

MEMORANDUM IN SUPPORT

The Note which is attached to the Complaint, references that the “Lender” (payee) is

Unison Financial Group, Inc. Pursuant to the allonge which is attached to the Note dated July 18,

2003, the Note was assigned to SIB Mortgage Corp. The mortgage which is attached to the
Complaint references that MERS is acting solely as a nominee for Lender, its successors and

assigns and is the mortgagee under the mortgage while Unison Financial Group, Inc. is the

“Lender”. The mortgage is recorded in the Office of the Hamilton County, Ohio Registered Land

Records. It has not been assigned of record; however attached to the Complaint as an unmarked

exhibit is an assignment from MERS, as nominee for Unison Financial Group, Inc. to Chase

Home Finance LLC, executed August 10, 2010. The Preliminary Judicial Complaint lists a

mortgage in favor MERS as nominee for Unison Financial Group, Inc. with no reference to an

assignment having been filed on behalf of Chase Home Finance, LLC.

In Count One of the Complaint at paragraph 9, Chase Home Finance LLC states it is due

a certain sum on the Note. At paragraph 10 of Count One, its states that Plaintiff (Chase Home

Finance, LLC) is entitled to enforce the Note pursuant to Section 1303.31 of the Ohio Revised

Code and the mortgage was given to secure the Note.

A review of the Ohio Secretary of State business filings evidences that on April 28, 2008

Unison Financial Group, LLC filed a Certificate of Dissolution thereby terminating operations as

an Ohio corporation. The question must then be asked who gave MERS the authority to assign

the mortgage in question, as nominee for a company that no longer existed, to the Plaintiff,

Chase Home Finance, LLC. An even more important question, which may need to be answered

by another tribunal, is how did the assignment become executed in Ohio when MERS offices are

in Reston, Virginia and why is it that the alleged Assistant Secretary of MERS is also an attorney

in the employ of the Plaintiff’s counsel and the acknowledgment was taken by an employee of

Plaintiff’s lawfirm?

In Ohio the holder of the note is also the owner and legally entitled person to exercise a

default under the mortgage. This in light of Ohio case law which holds that:

2
 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 underlying mortgage is a mere incident to the obligation.
Therefore the negotiation of a note operates as an equitable assignment
of the mortgage, even though the mortgage is not assigned or delivered.1

The Note is endorsed from Unison Financial Group, Inc. to SIB Mortgage Corp., The

Plaintiff cannot claim that this Note is owned by it for unlike a blank endorsement which

becomes payable to bearer and may not be negotiated by transfer of possession alone until

specially endorsed, this Note is specially endorsed to SIB Mortgage Corp., not the Plaintiff.

Various sections of the Ohio’s Uniform Commercial Code also support the conclusion

that the owner of a promissory note should be recognized as the owner of the related mortgage.

A promissory note is usually a negotiable instrument, which provides the person entitled

to enforce the note the right to payment of the obligation it represents. 2 A person is entitled to

enforce a note when that person falls into one of three categories. 3 One such category is when the

person is a holder of the note. Generally, a person is a holder of the note by having physical

possession of the note, which has either been endorsed to that person or endorsed in blank. 4 A

note may be endorsed by an allonge, which is a paper “affixed to the instrument,” which then

becomes part of the instrument.5

Once a note is endorsed, its negotiation is complete upon transfer of possession.6 The

transfer of possession requires physical delivery of the note “for the purpose of giving the person

1
U.S. Bank National Association v. Marcino (2009), 181 Ohio App. 3d 328, 900 N.E. 2d 1032 citing Kuck v.
Sommers (1950) 50 Ohio Abs 400, 100 N.E.2d 68.
2
ORC. 1303.03, 1303.31
3
ORC 1301.31(A)
4
ORC 1303.22, Comment 1; Citizens Federal Savings & Loan Assn of Dayton v. Core Inc.,(1992) 78 Ohio App 3d
284, 287, 604 N.E. 2d 772, 774, dismissed 64 Ohio St. 3d 1410
5
ORC 1303.24(A)(2); Adams v Madison Realty dev. Inc (3d Cir 1988) 853 F2d 163, 167.
6
ORC 1303.24(A), 1303.21 (A)

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receiving delivery the right to enforce the instrument.”7 However, possession alone does not

establish that the party in possession of the note is entitled to receive payments under it.8

Recently, many foreclosure firms have taken salvation in the Restatement (Third)

Property (Mortgages) § 5.4(b) (1997) which provides:

(b) Except as otherwise required by the Uniform Commercial code,

a transfer of the mortgage also transfers the obligation the mortgage
secure unless the parties to the transfer agree otherwise.

Interestingly, Comment C to Restatement (Third) of Property (Mortgages) §5.4.(b), 1997

also provides:

If the mortgage obligation is a negotiable note, Uniform

Commercial Code §3-203 (1995) is generally understood to make
the right of enforcement of the note transferrable only by delivery
of the instrument itself to the transferee. Hence when a mortgage
is assigned but the negotiable note it secures is not delivered, the
courts may find it necessary to disregard the rule of Subsection (b)
in order to effectuate the Code.

Further, the Restatement (Third) of Property (Mortgages) §5.4 (a) and (c) provides as

follows:

(a) A transfer of an obligation secured by a mortgage also transfers

the mortgage unless the parties to the transfer agree otherwise;

(c) A mortgage may be enforced only by, or in behalf of, a person

who is entitled to enforce the obligation the mortgage secures.

There is no evidence before the court that the Note executed by the Defendants was

negotiated from Unison Financial Group, Inc.. to Chase Home Finance, LLC. It was assigned to

SIB Mortgage Corp. The Note is, therefore, still payable to SIB Mortgage Corp. The corollary is

that Chase Home Finance, LLC has not shown that it had an interest in the Note when it filed its

Complaint. Nor has it shown that it has such an interest today.

7
ORC 1303.22(A) and comment 1, 1301.01(N)
8
Citizens Fed Sav, supra @287.

4
 The Court in Wells Fargo Bank, N.A. v Byrd,9 was faced with a similar situation. In this

case the First Appellate District of Ohio had a plaintiff, Wells Fargo, who was not a real party in

interest at the time it filed its foreclosure action. Wells Fargo claimed it was the owner and

holder of a note and mortgage but both the note and mortgage identified in the complaint named

WMC Mortgage Corp as the lender. It turned out WMC assigned the note and mortgage to

Wells Fargo after the complaint had been filed. The Court of Appeals acknowledged there was

little case-law guidance on the issue of whether Wells Fargo could have subsequently cured this

defect by producing an after-acquired interest in the litigation. It held “that the defect could not

have been cured in that way.”

In analyzing the Civil Rules, and particularly Civ. R. 17(A) which says

“….No action shall be dismissed on the ground that it is not persecuted by

the real party in interest until a reasonable time has been allowed after
objection for ratification of commencement of the action by, or joinder or
substitution shall have the same effect as if the action had been
commenced in the name of the real party in interest,

the Court drew upon two other Ohio Appellate Districts which had determined that the rule was

(1) not applicable unless the plaintiff had standing to invoke the jurisdiction of the Court in the

first place, either in an individual or representative capacity, with some real interest in the

subject matter10 and (2) that the real party in interest is generally considered to be the person who

can discharge the claim on which the suit is brought or is the party who, by substantive law,

possessed the right to be enforced11.

9
(2008)178 Ohio App 3d 285, 2008-Ohio-4603
10
Northland Ins. Co. v. Illuminating Co 11th Dist. Nos 2002-A-0058 and 2002-A-0066, 2004-Ohio 1529
11
Discover Bank v. Brockmeier, 12 Dist No. CA2006-07-078, 2007-Ohio-1552

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 In light of the foregoing authorities, the Court of Appeals held that, in a foreclosure

action, a bank that was not the mortgagee when suit was filed cannot cure its lack of standing by

subsequently obtaining an interest in the mortgage.

In keeping with the statutes, decisions treatises discussed above, this Court must dismiss

the Complaint in the matter presently before it because the Plaintiff Chase Home Finance, LLC.

not being the holder of the Note and therefore authorized to bring an action on the mortgage,

clearly lacks the standing to bring these counts.

Respectfully submitted,

_____________________________
James V. Magee, Jr. (0006809)
Attorney for Defendants Hunt

CERTIFICATE OF SERVICE

I hereby certify that I have served a copy of the foregoing Motion, by ordinary US Mail,
postage prepaid, upon the following parties or counsel of record this __ th day of September,
2010:

_____________________________
James V. Magee, Jr.