October, 2013 | FORECLOSURE FRAUD | by DinSFLA

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CITIBANK, NA v. Lindland | Conn: SC – [the] plaintiff’s counsel or his firm was fully aware of the existence of the [prior] IndyMac mortgage… SC directed the trial court to consider referring Hunt Leibert to the Statewide Grievance committee for disciplinary action

CITIBANK, NA v. Lindland | Conn: SC – [the] plaintiff’s counsel or his firm was fully aware of the existence of the [prior] IndyMac mortgage… SC directed the trial court to consider referring Hunt Leibert to the Statewide Grievance committee for disciplinary action

 

CITIBANK, N.A., TRUSTEE (SACO 2007-2),
v.
DEBRA LINDLAND, EXECUTRIX (ESTATE OF MADLYN LANDIN), ET AL.

No. (SC 18885).
Supreme Court of Connecticut.
Argued March 19, 2013.
Officially Released September 17, 2013.
Barbara M. Schellenberg, with whom were David A. Ball and, on the brief, Philip C. Pires, for the appellants (defendants Robert Olsen and 17 Ridge Road, LLC).

Peter A. Ventre, for the appellee (plaintiff).

Rogers, C. J., and Zarella, Eveleigh, McDonald and Espinosa, Js.[*]

Opinion

ZARELLA, J.

The principal issue in this certified appeal is whether the trial court had authority to open a judgment of foreclosure by sale and related supplemental judgments after title had passed to the purchaser when a series of errors by the court and the parties caused the purchaser to buy a property that, unbeknownst to him but actually known by the second mortgagee, was in fact subject to a first mortgage that was to be foreclosed shortly thereafter. The defendant Robert Olsen, the purchaser, and the defendant 17 Ridge Road, LLC, a limited liability company in which Olsen has a 50 percent ownership interest, both of whom the trial court permitted to join this action,[1] claim that the Appellate Court incorrectly concluded that the trial court lacked authority to open the judgments under the unique circumstances of the case. The plaintiff, Citibank, N.A., as trustee of SACO 2007-2, maintains that the Appellate Court correctly concluded that the trial court lacked authority to open the judgment of foreclosure and the supplemental judgments because title had vested in the purchaser. We reverse in part the judgment of the Appellate Court.

The record discloses the following facts and procedural history relevant to our resolution of the present appeal. The plaintiff, the mortgagee of the property at 17 Ridge Road in the town of Cromwell, initiated a foreclosure action against the named defendant, Debra Lindland, executrix of the estate of Madlyn Landin (estate), on May 5, 2008. In its complaint, the plaintiff alleged that the estate had defaulted on a mortgage loan secured by the subject property and disclosed that certain encumbrances, including a mortgage held by IndyMac Federal Bank, FSB (IndyMac), were prior in right to the plaintiff’s mortgage. IndyMac, which was represented by the same counsel as the plaintiff, pursued a separate foreclosure action on its mortgage.

On July 10, 2008, the plaintiff filed a motion for judgment of strict foreclosure, along with a foreclosure worksheet in support of the motion. The plaintiff’s foreclosure worksheet contained a significant computational error in that it represented that there was negative equity of $12,815.46. The actual amount of negative equity was, in fact, $72,815.46, a difference of $60,000.[2] Despite this error, the foreclosure worksheet accurately disclosed that (1) the property had a fair market value of $305,000, (2) encumbrances on the property ahead of the plaintiff’s lien totaled $295,200, and (3) the debt arising out of the plaintiff’s second mortgage was $82,615.46.

On August 4, 2008, the plaintiff’s motion for judgment of strict foreclosure appeared on the short calendar. Citing a fair market value of $305,000 and an updated debt of $82,615.46, the trial court, Holzberg, J., determined that there was substantial equity in the property and rendered judgment of foreclosure by sale. The court failed to recognize the existence of the IndyMac priority debt of $295,200. The plaintiff’s counsel, who also represented IndyMac with respect to its prior mortgage, failed to bring this error to the court’s attention.

The court scheduled a foreclosure sale for October 4, 2008. John J. Carta, Jr., an attorney, was appointed as the committee for sale. In the course of his appointment, Carta posted a sign outside of the property, arranged for newspaper advertisements announcing the foreclosure sale, and prepared a notice to bidders to be read at the foreclosure sale. Although the notice to bidders purported to disclose the “encumbrances and restrictions. . . prior in right to the mortgage being foreclosed,” it listed only outstanding taxes that might be owed to the town of Cromwell because Carta, relying on the court’s foreclosure orders, had concluded that the mortgage subject to the foreclosure sale was a first mortgage. The posted sign, newspaper advertisement, and notice to bidders thus made no reference to the IndyMac mortgage. Carta later testified that, if he had known that the property was subject to a prior mortgage, he would have disclosed this information in the notice to bidders.

Prior to the sale, Olsen contacted his attorney, Stephen Small, to inquire about the property. Small, in turn, contacted Carta for additional information. On the basis of his discussion with Carta, Small reported to Olsen that the mortgage being foreclosed was a first mortgage. Small did not perform a title search or inspect the court file, land, or probate court records.

With a bid of $216,000, Olsen was the successful bidder at the foreclosure sale on October 4, 2008, and delivered a deposit of $30,500. Carta prepared a bond for deed, executed by Olsen, which disclosed that taxes owed to the town of Cromwell were prior in right to the plaintiff’s mortgage. The bond for deed, however, failed to disclose the existence of the prior IndyMac mortgage. The trial court, Jones, J., approved the sale on December 10, 2008.

On December 22, 2008, in the separate foreclosure action brought by IndyMac relating to IndyMac’s first mortgage on the property, a judgment of strict foreclosure was rendered. Law days were set for March 23, 2009, and subsequent days. Nevertheless, the plaintiff’s counsel, who concurrently represented IndyMac and the plaintiff in their respective foreclosure actions involving the same property, did not bring this development to the attention of the court, the committee, or Olsen or his attorney.

Meanwhile, Small prepared for the closing by performing a title search, which revealed the existence of the IndyMac mortgage and lis pendens. Small did not contact the parties or the court to clarify this situation, or request that the sale be set aside or postponed. Instead, Small reviewed an entry on the Judicial Branch website, which, due to a clerical error, incorrectly reported that the IndyMac mortgage had been satisfied. Small did not review the official court or land records, which would have revealed that the online entry was incorrect. Small thereafter issued a title insurance policy to Olsen that failed to except the IndyMac mortgage.

The closing took place on January 21, 2009. Olsen testified that he relied on Small’s assurances of title in closing the sale. Olsen tendered the balance of the purchase price to Carta, who delivered the committee deed to Olsen. Olsen immediately transferred his interest in the property to 17 Ridge Road, LLC, by quitclaim deed.

Following the closing, on February 2, 2009, the plaintiff filed a motion for determination of priorities and for supplemental judgment. In support of the motion, the plaintiff submitted an affidavit of debt, which incorrectly represented that the plaintiff was “the holder and owner of the first mortgage” on the property, even though the plaintiff’s counsel also represented IndyMac, the actual holder of the first mortgage, and therefore knew that IndyMac had obtained a judgment of strict foreclosure on December 22, 2008. (Emphasis added.) Thereafter, on February 26, 2009, the trial court ordered a disbursement of $91,854.27, which was paid to the plaintiff.[3] The estate filed a similar motion several weeks later, which the court granted. Disbursement was stayed on April 14, 2009, and the court continues to hold the balance of the proceeds.

In the weeks following the closing, the defendants cleaned and restored the property, and paid the outstanding municipal taxes. On April 12, 2009, however, Olsen attempted to enter the property but discovered that a lock box had been installed, which prevented his access. Shortly thereafter, Olsen learned that IndyMac had a prior mortgage on the property and had obtained a judgment of strict foreclosure in December, 2008, several weeks before the closing took place. Consequently, 17 Ridge Road, LLC’s interest in the property, for which Olsen had paid $216,000, had been foreclosed.

In response, the defendants filed separate motions to be joined as parties in the present case, which the court, M. Taylor, J., granted. On April 23, 2009, Olsen filed a motion to open and to vacate the judgment of foreclosure by sale and the supplemental judgments (motion to open) that had allocated his purchase moneys between the plaintiff and the estate. Counsel for 17 Ridge Road, LLC, indicated to the trial court that it was joining Olsen’s motion to open.

The trial court conducted an evidentiary hearing on the motion to open before issuing a memorandum of decision on August 5, 2010. Among those testifying was the plaintiff’s expert witness, Dennis Anderson, an attorney with significant real estate and foreclosure experience, who opined that Small’s representation of Olsen fell below the standard of care. Anderson acknowledged, however, that the plaintiff could not reasonably have expected to receive $91,854.27 in proceeds from the foreclosure sale and that such amount effectively constituted a windfall.

In its memorandum of decision, the court, Holzberg, J., concluded that “the combination of Olsen’s $216,000 loss and the undeserved windfall of approximately $100,000 each to the plaintiff and the . . . estate require equity to intervene,” and therefore granted the motion to open. The trial court underscored the sui generis nature of this case, describing the “series of cascading mistakes” involved and predicting that such a “calamity” would never be repeated. With respect to the conduct of the plaintiff’s counsel, which it found “highly relevant to the disposition of this matter,” the trial court emphasized its significant concerns. The trial court noted in particular counsel’s unquestionable awareness of the IndyMac foreclosure due to his concurrent representation of IndyMac, his failure to correct the court’s mistaken impression despite this heightened awareness, and the affirmative representations during the supplemental judgment proceedings that the plaintiff was the holder of a first mortgage on the property. Specifically, the trial court explained that, “at the time of the entry of the judgment of foreclosure by sale, through and including the sale itself and subsequent closing, [the] plaintiff’s counsel or his firm was fully aware of the existence of the [prior] IndyMac mortgage. . . . That knowledge is indisputable because the same counsel represented IndyMac in the foreclosure of its first mortgage and filed notice of lis pendens on the land records with respect to both foreclosures. Further, [the] plaintiff’s counsel filed a series of motions for determination of priorities and supplemental judgment in the [present] action, in which [he] continued to incorrectly assert that [the plaintiff] was the holder of the first mortgage on the property . . . . Throughout the pendency of [the present] action, and as late as April 14, 2009, when the court granted the . . . estate’s motion for supplemental judgment, [the plaintiff’s] counsel inexplicably failed to raise the issue, despite multiple opportunities to correct the mistaken conclusion of the court, its committee, [Olsen] and [Olsen’s] attorney as to the priority of the [plaintiff’s] mortgage.”

After granting the motion to open, the trial court instructed Olsen to file a proposed order “specifying with particularity the relief [that] he seeks by way of a final order,” and invited all other parties to do so as well. In response, Olsen and 17 Ridge Road, LLC, jointly submitted proposed orders. The plaintiff then filed a motion in opposition to these proposed orders, and the trial court never issued a final order.

The plaintiff appealed to the Appellate Court from the trial court’s decision to grant the motion to open,[4] claiming that the trial court (1) improperly opened the judgments because it lacked authority to do so, and (2) incorrectly concluded that the defendants had standing to pursue their claims against the plaintiff. See Citibank, N.A. v. Lindland, 131 Conn. App. 653, 656, 666, 27 A.3d 423 (2011). The Appellate Court agreed with the plaintiff on both claims and reversed the trial court’s decision. See id., 659, 670. Thereafter, the defendants appealed to this court, and we granted certification to appeal, limited to the following question: “Did the Appellate Court properly conclude that the trial court lacked the equitable authority to open a judgment of foreclosure by sale under the circumstances of this case?”[5] Citibank, N.A. v. Lindland, 303 Conn. 906, 31 A.3d 1180 (2011).

The defendants claim that the Appellate Court failed to recognize that they sought a remedy relating to the proceeds from the sale rather than the property; thus, even if the trial court were stripped of jurisdiction over the property when title vested in the purchaser, the court still possessed authority to allocate the proceeds at the supplemental judgment proceedings in accordance with the equities of the case. Relatedly, the defendants claim that the Appellate Court incorrectly concluded that they lacked standing to intervene in the supplemental judgment proceedings during which the amount that Olsen paid for the property was to be allocated.

The defendants further claim that the Appellate Court incorrectly concluded that the trial court lacked authority to open the judgment of foreclosure because of the extraordinary factual circumstances of the case, in which virtually all of the actors involved in the transaction made errors, including the court and the committee as an arm of the court. Equitable relief is necessary in the present case, the defendants maintain, to correct the court’s own mistake and to prevent the plaintiff from obtaining an undeserved windfall, and the court is empowered to undertake such action when fraud, mistake, or surprise has inequitably infected the transaction. The defendants further note that, subject to certain equitable exceptions; see, e.g., New Milford Savings Bank v. Jajer, 244 Conn. 251, 260, 708 A.2d 1378 (1998); the legislature has, under General Statutes § 49-15, restricted the opening of judgments of strict foreclosure after title has vested in the encumbrancer, but no equivalent statutory proscription exists with respect to judgments of foreclosure by sale and the vesting of title in the purchaser. Thus, the defendants claim that the Appellate Court improperly expanded this rule without appropriately accounting for either this legislative distinction or the different status of a purchaser as compared to the holder of the equity of redemption.

The plaintiff, however, asserts that the Appellate Court correctly concluded that the trial court lacked authority to open the judgment of foreclosure in the present case after title had vested in the purchaser. Additionally, the plaintiff maintains that this appeal is moot because we did not grant certification on the issue of whether the Appellate Court correctly concluded that the defendants lacked standing; the plaintiff asserts that the Appellate Court therefore correctly and definitively resolved the issue of standing. The plaintiff alternatively maintains that, even if this court considers and resolves the standing question in favor of the defendants, equity cannot afford them relief under the facts of this case because the predicament facing the defendants was attributable, in part, to the conduct of their attorney and a lack of due diligence, and, therefore, was not “unmixed with negligence . . . .”[6] (Internal quotation marks omitted.)

I

Because the defendants’ standing claim implicates our subject matter jurisdiction over this appeal; see, e.g., Soracco v. Williams Scotsman, Inc., 292 Conn. 86, 90, 971 A.2d 1 (2009); we begin by considering that claim. Before reaching the substance of the standing claim, however, we address preliminarily the plaintiff’s argument regarding whether this issue is appropriately before this court. Specifically, the plaintiff asserts that the manner in which we granted certification[7] does not allow for review of the Appellate Court’s conclusion that neither Olsen nor 17 Ridge Road, LLC, had standing to join the present action as defendants and to seek to open the judgments. Accordingly, the plaintiff maintains that, under Practice Book § 84-9,[8] the defendants may not challenge the Appellate Court’s determination that they lacked standing. We disagree.

As the defendants observe, this court did not grant certification with respect to the two distinct questions that they formulated[9] but, rather, recast those questions into a single, broader question involving the propriety of the Appellate Court’s conclusions “under the circumstances of this case . . . .” Citibank, N.A. v. Lindland, supra, 303 Conn. 906. The defendants therefore contend that the certified question, as framed by this court, necessarily encompasses the Appellate Court’s conclusions concerning standing and the trial court’s authority to open the judgments, as both are intertwined under the unique factual circumstances of the present case. We agree with the construction of the certified question that the defendants advance and thus conclude that the issue of their standing is appropriately before us.

We also note that our framing of the certified question addressed the trial court’s authority to consider the motion to open the judgment of foreclosure and did not expressly refer to the supplemental judgments, whereas the question proposed by the defendants refers to “foreclosure judgments . . . .” The briefs of the parties and the decisions of the Appellate Court and the trial court have treated the issue as encompassing the motions to open the supplemental judgments, and, accordingly, we treat the motion to open the supplemental judgments as within the scope of, and ultimately dispositive of, the certified question.

We turn next to the issue of whether the Appellate Court correctly concluded that the trial court improperly had determined that the defendants had standing to be joined as defendants, and that their lack of standing deprived the trial court of jurisdiction to consider Olsen’s motion to open and to grant any relief requested therein. It is well established that, “[i]f a party is found to lack standing, the court is without subject matter jurisdiction to determine the cause. . . . A determination regarding a trial court’s subject matter jurisdiction is a question of law. When . . . the trial court draws conclusions of law, our review is plenary and we must decide whether its conclusions are legally and logically correct and find support in the facts that appear in the record.” (Internal quotation marks omitted.) Pond View, LLC v. Planning & Zoning Commission, 288 Conn. 143, 155, 953 A.2d 1 (2008).

With respect to the applicable legal principles, we have explained that “[s]tanding is the legal right to set judicial machinery in motion. One cannot rightfully invoke the jurisdiction of the court unless he [or she] has, in an individual or representative capacity, some real interest in the cause of action, or a legal or equitable right, title or interest in the subject matter of the controversy.” (Internal quotation marks omitted.) Wilcox v. Webster Ins., Inc., 294 Conn. 206, 214, 982 A.2d 1053 (2009). Nevertheless, “[s]tanding is not a technical rule intended to keep aggrieved parties out of court; nor is it a test of substantive rights. Rather it is a practical concept designed to ensure that courts and parties are not vexed by suits brought to vindicate nonjusticiable interests and that judicial decisions which may affect the rights of others are forged in hot controversy, with each view fairly and vigorously represented.” (Internal quotation marks omitted.) Canty v. Otto, 304 Conn. 546, 556, 41 A.3d 280 (2012). “These two objectives are ordinarily held to have been met when a complainant makes a colorable claim of direct injury he has suffered or is likely to suffer, in an individual or representative capacity. Such a personal stake in the outcome of the controversy . . . provides the requisite assurance of concrete adverseness and diligent advocacy.” (Internal quotation marks omitted.) Pond View, LLC v. Planning & Zoning Commission, supra, 288 Conn. 155. “Standing [however] requires no more than a colorable claim of injury . . . .” (Internal quotation marks omitted.) Electrical Contractors, Inc. v. Dept. of Education, 303 Conn. 402, 411, 35 A.3d 188 (2012).

“It is axiomatic that aggrievement is a basic requirement of standing, just as standing is a fundamental requirement of jurisdiction. . . . There are two general types of aggrievement, namely, classical and statutory; either type will establish standing, and each has its own unique features.” (Citations omitted.) Soracco v. Williams Scotsman, Inc., supra, 292 Conn. 91-92.

“Classical aggrievement requires a two part showing. First, a party must demonstrate a specific, personal and legal interest in the subject matter of the [controversy], as opposed to a general interest that all members of the community share. . . . Second, the party must also show that the [alleged conduct] has specially and injuriously affected that specific personal or legal interest.” (Internal quotation marks omitted.) Pond View, LLC v. Planning & Zoning Commission, supra, 288 Conn. 156.

The Appellate Court nevertheless reasoned that, notwithstanding these principles, “a purchaser at a foreclosure sale who has consummated the closing . . . does not have standing to join the supplemental proceedings in order to seek the refund of his purchase price on the ground that a recorded, outstanding priority lien existed.” Citibank, N.A. v. Lindland, supra, 131 Conn. App. 668-69. The Appellate Court further explained that “supplemental proceedings in a foreclosure action are not a means by which foreclosure sale purchasers, dissatisfied with the condition of the property purchased or the title to the property received, may seek either abatement or [a] refund of the purchase price.” Id., 669. In the alternative, the Appellate Court also reasoned that, “even if a successful bidder at a foreclosure sale generally had a right to intervene in the supplemental proceedings to seek the return of his purchase price after taking title, which he does not, Olsen, who no longer had any individual interest in the property [because he had transferred it to 17 Ridge Road, LLC], could not pursue such right.” Id., 670. Thus, under the Appellate Court’s framework, there never would be a mechanism to correct the errors involved in this case because Olsen had transferred his interest in the property to 17 Ridge Road, LLC, and 17 Ridge Road, LLC, had not expended the funds used to purchase the property. See id.

The Appellate Court also explained that “[t]he purpose of supplemental proceedings is to adjudicate the rights of lienholders to the funds realized from the sale after the sale has been ratified by the court.” Id., 669. This is indisputably an important function of supplemental proceedings, but, as the authors of a leading treatise explain, “[t]he supplemental judgment performs a variety of functions. Not only does it ratify and confirm the sale, but it also determines the priorities of the encumbrancers and finds the debt due to each, as well as orders disbursement of the expenses of the sale and possession to the successful bidder.” (Footnote omitted.) 2 D. Caron & G. Milne, Connecticut Foreclosures (5th Ed. 2011) § 20-4:3, p. 55; see also 1 D. Caron & G. Milne, supra, § 9-1, p. 435. This description of the purposes of the supplemental judgment procedure suggests that it is the mechanism to adjudicate all claims on the proceeds paid into the court and to determine their priorities. This would include the claims of the mortgager and the purchaser, in addition to those of lienors.

By way of analogy, if a successful bidder at a closing mistakenly pays more than the agreed on amount because of an accounting error, and the error is not discovered until after title has vested in the purchaser, the purchaser would have standing to intervene to recoup the overpayment during the supplemental proceedings. We see no reason why a more restrictive standing approach would be warranted under the facts of the present case, given that, in both instances, the purchaser seeks to correct a procedural error relating to the circumstances surrounding the purchase.

In the present case, Olsen possessed a specific legal interest in the funds used to purchase the property. As we noted previously, Olsen, as the purchaser, expended $216,000 to obtain the property, which he immediately transferred to 17 Ridge Road, LLC, of which he had a 50 percent ownership interest; within three months of the closing, that interest had been foreclosed, and neither Olsen nor 17 Ridge Road, LLC, had received any benefit from Olsen’s acquisition. The supplemental judgments Olsen sought to open related to the distribution of the purchase moneys that Olsen had expended. Under the classical aggrievement test, in light of the fact that Olsen had caused the purchase moneys to be deposited with the court, which were subsequently allocated between the plaintiff and the estate, there can be little doubt that Olsen possessed a personal stake in the opening of the judgments and that he has demonstrated a colorable claim of injury. See, e.g., Pond View, LLC v. Planning & Zoning Commission, supra, 288 Conn. 155-56. Because “[s]tanding is not a technical rule intended to keep aggrieved parties out of court”; (internal quotation marks omitted) Canty v. Otto, supra, 304 Conn. 556; we conclude that the Appellate Court incorrectly determined that Olsen lacked standing under the circumstances of the present case.

With respect to the Appellate Court’s conclusion that 17 Ridge Road, LLC, lacked standing, however; see Citibank, N.A. v. Lindland, supra, 131 Conn. App. 670; we do not disturb that conclusion because that issue has been improperly briefed and therefore abandoned. “We repeatedly have stated that [w]e are not required to review issues that have been improperly presented to this court through an inadequate brief. . . . Analysis, rather than mere abstract assertion, is required in order to avoid abandoning an issue by failure to brief the issue properly. . . . [When] a claim is asserted in the statement of issues but thereafter receives only cursory attention in the brief without substantive discussion or citation of authorities, it is deemed to be abandoned.” (Internal quotation marks omitted.) Connecticut Light & Power Co. v. Gilmore, 289 Conn. 88, 124, 956 A.2d 1145 (2008); accord State v. T.R.D., 286 Conn. 191, 213-14 n.18, 942 A.2d 1000 (2008).

The defendants devote little more than one page of their brief to their standing argument, the bulk of which provides support for Olsen’s standing, not that of 17 Ridge Road, LLC. The defendants advance no specific reason why 17 Ridge Road, LLC, is aggrieved under the circumstances, other than to recite that it has been “divested of its ownership in the property.” Indeed, rather than establishing 17 Ridge Road, LLC’s aggrievement directly, the defendants simply describe Olsen’s injury and the inequity that would result if neither Olsen nor 17 Ridge Road, LLC, was able to seek reimbursement. Accordingly, we conclude that the defendants inadequately briefed the issue of 17 Ridge Road, LLC’s standing to intervene as a defendant, and, therefore, the issue is deemed abandoned.

II

We turn next to the primary issue in this appeal, namely, whether the Appellate Court correctly concluded that the trial court lacked authority to open the judgment of foreclosure and related supplemental judgments in this case after title had vested in Olsen, the purchaser. It is well established that “[a] foreclosure action is an equitable proceeding . . . [and that] [t]he determination of what equity requires is a matter for the discretion of the trial court.” (Internal quotation marks omitted.) Deutsche Bank National Trust Co. v. Angle, 284 Conn. 322, 326, 933 A.2d 1143 (2007). Similarly, the determination of whether to grant a motion to open a judgment rests in the trial court’s sound discretion. See, e.g., Priest v. Edmonds, 295 Conn. 132, 138, 989 A.2d 588 (2010); see also Chapman Lumber, Inc. v. Tager, 288 Conn. 69, 95, 952 A.2d 1 (2008) (“We do not undertake a plenary review of the merits of a decision of the trial court to grant or to deny a motion to open a judgment. The only issue on appeal is whether the trial court has acted unreasonably and in clear abuse of its discretion.” [Internal quotation marks omitted.]).

The issue before us in the present case, however, is not whether the trial court properly exercised its discretion in granting the motion to open but, rather, whether the trial court had authority to do so under the circumstances of this case. See, e.g., AvalonBay Communities, Inc. v. Plan & Zoning Commission, 260 Conn. 232, 239-40, 796 A.2d 1164 (2002). This presents a question of law over which we exercise plenary review. See id. (“Whether the trial court had the power to issue the order, as distinct from the question of whether the trial court properly exercised that power, is a question involving the scope of the trial court’s inherent powers and, as such, is a question of law. . . . Accordingly, our review is plenary.” [Citation omitted.]).

Olsen[10] advances several arguments in support of his position that the Appellate Court incorrectly concluded that the trial court lacked authority to grant the motion to open. Olsen claims that, in evaluating the trial court’s authority to open the judgments, the Appellate Court improperly focused solely on the trial court’s authority over the foreclosed property, rather than the proceeds from the sale implicated in the supplemental judgment proceedings, a portion of which is still being held by the court. Olsen further claims that the Appellate Court incorrectly concluded that the trial court lacked authority to open the judgments in the present case, asserting that, under this court’s precedent, a trial court is authorized to open a judgment of foreclosure when equity so requires, and this court never has recognized the vesting of title as an absolute bar to the opening of a judgment of foreclosure by sale. Finally, Olsen asserts that the decision of the Appellate Court improperly narrowed the import of this court’s decision in Citicorp Mortgage, Inc. v. Burgos, 227 Conn. 116, 629 A.2d 410 (1993), limiting it to cases of fraud, rather than to fraud, mistake, and surprise.

The plaintiff, by contrast, maintains that the Appellate Court correctly concluded that the trial court improperly had determined that it possessed authority to grant the motion to open in the present case because title had vested in the purchaser, which strips the court of its jurisdiction over the property. The plaintiff further asserts that, although the proceeds from the sale then take the place of the property, and the court has jurisdiction over the proceeds such that it may conduct supplemental proceedings to distribute the proceeds, the Appellate Court correctly concluded that a purchaser cannot intervene in supplemental proceedings to seek a refund of the purchase price because of the limited functions of such proceedings. Finally, in response to Olsen’s claim regarding the Appellate Court’s construction of our decision in Burgos, the plaintiff asserts that there was no mistake or surprise in the present case to justify equitable relief under Burgos. We agree with Olsen as to his supplemental judgment claim and, therefore, need not reach his remaining arguments.

With respect to the supplemental judgment proceedings, the Appellate Court observed that, “[o]nce title to the property vests in the purchaser, the property itself is placed beyond the power of the court. . . . At that point, the proceeds from the sale take the place of the property, and the court engages in whatever supplemental proceedings may be required to distribute those proceeds.” (Citation omitted.) Citibank, N.A. v. Lindland, supra, 131 Conn. App. 663.

As Olsen explains, however, he does not seek any remedy relating to the property itself; it is the proceeds from the sale and the restitution thereof that is at issue. Thus, in Olsen’s view, the trial court’s authority over the property is immaterial because he does not seek title to the property, and the court’s authority over the proceeds of the sale is clear.[11] See General Statutes § 49-27. We agree.

Although the Appellate Court acknowledged that the vesting of title did not strip the court of its jurisdiction over the proceeds from the sale; see Citibank, N.A. v. Lindland, supra, 131 Conn. App. 663; it nevertheless concluded that a purchaser could not intervene in supplemental proceedings to seek a return of the purchase price, even under the circumstances of the present case, because of the function of supplemental judgment proceedings. Id., 668-69. As we discussed previously, however, supplemental judgments serve many functions, some of which may indeed involve the purchaser. See 2 D. Caron & G. Milne, supra, § 20-4:3, p. 55 (“The supplemental judgment performs a variety of functions. Not only does it ratify and confirm the sale, but it also determines the priorities of the encumbrancers and finds the debt due to each, as well as orders disbursement of the expenses of the sale and possession to the successful bidder.” [Footnote omitted.]); see also 1 D. Caron & G. Milne, supra, § 9-1, p. 435. Nothing about the nature of the supplemental judgment compels the conclusion that the court is stripped of its jurisdiction over the proceeds of the sale once the purchaser takes title to the property.

We therefore are persuaded that the supplemental judgment process comfortably accommodates a limited role for the purchaser under circumstances such as those in the present case. Moreover, because we concluded that Olsen did have standing to join the supplemental proceedings, we conclude that there is no jurisdictional barrier to the trial court’s opening of the supplemental judgments in the present case. Because the relief that Olsen seeks relates to the proceeds from the sale, rather than to the property itself, and, therefore, would be addressed within the supplemental judgment process without regard to the status of the property, our conclusion that the trial court had jurisdiction to open the supplemental judgments in the present case obviates the need to resolve whether the Appellate Court correctly determined that the passing of title divested the trial court of jurisdiction to open the judgment of foreclosure by sale.[12] Accordingly, we reverse the judgment of the Appellate Court insofar as that court concluded that the trial court lacked authority to open the supplemental judgments.

III

A

As an alternative ground for affirmance, the plaintiff claims that the Appellate Court correctly concluded that the trial court lacked authority to open the judgment of foreclosure and related supplemental judgments in the present case because Olsen failed to file a timely motion to open the judgments as required under General Statutes § 52-212a,[13] thereby depriving the trial court of authority to consider such a motion. The plaintiff maintains that the trial court no longer was empowered to entertain a motion to open the judgment of foreclosure and the supplemental judgments as of four months after August 4, 2008, the date on which the trial court rendered judgment of foreclosure by sale.

In applying § 52-212a, the Appellate Court considered both August 4, 2008, and December 10, 2008, the date on which the committee sale was approved, and posited that the motions were untimely using either date. Citibank, N.A. v. Lindland, supra, 131 Conn. App. 661. Framing this restriction “as one affecting the court’s substantive authority rather than . . . its jurisdiction,”[14] however; id.; the Appellate Court determined that it was “not presented with a situation in which the timeliness of the motion pursuant to § 52-212a is dispositive . . . .” Id. Instead, the Appellate Court relied on this court’s statement that “[o]ur case law on [§ 52-212a] recognizes that, in some situations, the principle of protection of the finality of judgments must give way to the principle of fairness and equity.” (Internal quotation marks omitted.) Id., quoting Kim v. Magnotta, 249 Conn. 94, 109, 733 A.2d 809 (1999); cf. Connecticut Savings Bank v. Obenauf, 59 Conn. App. 351, 356, 758 A.2d 363 (2000) (“[when] there is a judicial action of a trial court that requires a change in a judgment because it affects justice, an appellate court should effect that change” [internal quotation marks omitted]).

Although we agree that § 52-212a does not alter the outcome of this action, we analyze the time constraints in a manner different from the Appellate Court. As we noted in part II of this opinion, the defendants, in their briefs and at oral argument before this court, explained that Olsen sought only a return of the purchase price and did not seek any relief relative to the property itself. Thus, because the purchase price was allocated between the plaintiff and the estate during the supplemental judgment proceedings, rather than the proceedings leading to the judgment of foreclosure by sale, we conclude that February 26, 2009, the date on which the trial court rendered supplemental judgment and allocated $91,854.27 to the plaintiff, is the relevant date for purposes of § 52-212a. Cf. Nelson v. Dettmer, 305 Conn. 654, 672, 676, 46 A.3d 916 (2012) (evaluating “when a judgment sought to be set aside is `rendered or passed’ under § 52-212a” and determining that four month period began on date of denial of motion to reargue, not date on which original judgment was rendered). Because Olsen filed his motion to open on April 23, 2009, which was well within four months of February 26, 2009, we conclude that § 52-212a did not limit the trial court’s authority to open the supplemental judgments, which thereby could enable the court to order that the purchase price be returned to Olsen.

If we were instead to conclude that the date on which judgment of foreclosure by sale was rendered, rather than the date on which the supplemental judgment was rendered, governed the operation of § 52-212a, the results would prove anomalous and illogical. Under such an interpretation, a supplemental judgment that is rendered more than four months after the judgment of foreclosure is rendered—as in the present case— never could be opened. Yet, a supplemental judgment is, by definition, a type of judgment, and we cannot fathom why a motion to open could not be directed at a supplemental judgment just as it can be directed at any other judgment. This further supports our conclusion that the trial court’s authority to open the supplemental judgments in the present case was not precluded by the four month limitation set forth in § 52-212a.

B

Finally, the plaintiff offers several other alternative grounds for affirming the judgment of the Appellate Court, all of which essentially depend on the plaintiff’s assertion that the conduct of Olsen’s counsel precludes the trial court from exercising its equitable authority.[15] Although the plaintiff frames these arguments in terms of challenging the trial court’s authority to consider the motion to open, these claims instead appear to challenge the relief that the trial court may award to Olsen once the judgments are opened.

It is well established that our review is limited to appeals from final judgments. See General Statutes § 52-263. As we noted previously; see footnote 4 of this opinion; a decision on a motion to open a judgment ordinarily is not considered a final judgment from which an appeal may lie. See, e.g., Nelson v. Dettmer, supra, 305 Conn. 672. An exception applies when, as in the present case, the appeal challenges the trial court’s authority to open the judgment. See id. The plaintiff’s arguments regarding the purported negligence of Olsen’s attorney and the effect of the lis pendens statute, however, seek to prevent the trial court from exercising its discretion to fashion an equitable remedy after having opened the judgment. Such issues are not properly before this court because the appeal was taken from the granting of the motion to open, and the trial court had not issued a final order. Accordingly, these additional arguments are beyond the scope of our review.[16]

We note that the record reflects the aforementioned “highly relevant” conduct of the plaintiff’s counsel, who elected to remain silent in the face of a known mistake rather than to bring the error to the trial court’s attention. As we noted previously, the plaintiff’s counsel also represented IndyMac, and, therefore, was aware that IndyMac had obtained a judgment of strict foreclosure on December 22, 2008. Nevertheless, the plaintiff’s counsel did not bring this fact to the attention of the court, the committee, or Olsen, the purchaser, prior to the closing on January 21, 2009. And yet, the plaintiff’s counsel still sought a distribution of the proceeds of the sale, representing to the court in an affidavit of debt that the plaintiff was the holder of the first mortgage on the property. The conduct of the plaintiff’s counsel in failing to correct the misimpression that his client was the holder of a first mortgage, and in affirmatively representing as much in subsequent submissions to the court for the purpose of obtaining a disbursement of the proceeds of the sale, raises significant concerns.[17] Accordingly, on remand, the trial court should conduct a hearing to determine whether such conduct warrants a referral to the Statewide Grievance Committee or an exercise of its disciplinary authority under Practice Book § 2-44.[18]

The judgment of the Appellate Court is reversed insofar as that court determined that Olsen lacked standing to intervene in the case and that the trial court lacked authority to grant Olsen’s motion to open with respect to the supplemental judgments, and the case is remanded to the Appellate Court with direction to remand the case to the trial court with direction to grant Olsen’s motion to open with respect to the supplemental judgments only and for further proceedings according to law; the judgment of the Appellate Court is affirmed in all other respects.

In this opinion the other justices concurred.

 

[*] This appeal was originally scheduled to be argued before a panel of this court consisting of Chief Justice Rogers and Justices Palmer, Zarella, Eveleigh, McDonald, Espinosa and Vertefeuille. Justice Vertefeuille, however, has not participated in the argument of this case, and neither Justice Palmer nor Justice Vertefeuille has participated in the decision of this case.

 

[1] The named defendant, Debra Lindland, executrix of the estate of Madlyn Landin, did not take part in this appeal, nor did Lindland in her individual capacity, David Landin, Donna Hassler, Middlesex Hospital, or the Connecticut Department of Revenue Services, who also were named as defendants in the complaint. In the interest of simplicity, we hereinafter refer to Olsen and 17 Ridge Road, LLC, collectively as the defendants.

 

[2] The plaintiff’s expert witness, Dennis Anderson, later acknowledged this error and agreed that the plaintiff had a duty to present the court with correct calculations.

 

[3] In the trial court’s memorandum of decision on Olsen’s motion to open the foreclosure judgment, the trial court clarified that it was unaware of the existence of the prior IndyMac mortgage when it rendered the supplemental judgments.

 

[4] “Although it is well established that an order opening a judgment ordinarily is not a final judgment [for purposes of appeal] . . . [t]his court . . . has recognized an exception to this rule [when] the appeal challenges the power of the court to act to set aside the judgment. . . . Thus, [a]n order of the trial court opening a judgment is . . . an appealable final judgment [when] the issue raised is the power of the trial court to open [the judgment] in light of the four month limitation period of [General Statutes] § 52-212a.” (Internal quotation marks omitted.) Nelson v. Dettmer, 305 Conn. 654, 672, 46 A.3d 916 (2012).

 

[5] Although the parties, the trial court, and Appellate Court use the phrase “equitable authority,” we note that what is at issue is not the court’s exercise of its discretion to open the judgment and grant whatever relief is appropriate but, rather, the court’s authority to act. See part II of this opinion. Accordingly, we refer simply to the court’s authority to open the judgment rather than its equitable authority.

 

[6] The plaintiff’s arguments regarding the negligence of Olsen’s attorney and the effect of the lis pendens statute do not address the trial court’s authority to open the judgment but, rather, are directed at the relief that the defendants seek. Thus, for the reasons set forth in part III B of this opinion, these arguments are beyond the limited scope of our review in the present case.

 

[7] As we noted previously, our grant of certification in the present case was limited to the following question: “Did the Appellate Court properly conclude that the trial court lacked the equitable authority to open a judgment of foreclosure by sale under the circumstances of this case?” Citibank, N.A. v. Lindland, supra, 303 Conn. 906.

 

[8] Practice Book § 84-9 provides in relevant part: “The issues which the appellant may present are limited to those raised in the petition for certification, except where the issues are further limited by the order granting certification.”

 

[9] In their petition for certification, the defendants requested that we consider the following questions: (1) “Did the Appellate Court improperly determine that the trial court lacked jurisdiction to open foreclosure judgments after title had vested, where the trial court acted on equitable grounds to [prevent] the foreclosing bank and defaulting mortgagor from receiving undeserved windfalls, and where the erroneous judgments resulted from a `series of cascading mistakes’ made by: 1) the trial court; 2) the committee; 3) the court clerk; 4) the foreclosing bank; 5) the bank’s attorney; and 6) the purchaser’s attorney?”

 

(2) “Did the Appellate Court improperly determine that a purchaser who was misled at a foreclosure sale and suffered a substantial monetary loss as a result, and that purchaser’s company, which obtained title to the property contemporaneously with the purchaser, lacked standing to seek [a] refund of the purchase price paid for that property at the sale?”

 

[10] Because of our conclusion in part I of this opinion that the issue of 17 Ridge Road, LLC’s standing has been abandoned, we hereinafter refer only to Olsen’s claims.

 

[11] The court’s authority with respect to the proceeds of the sale is expressly set forth in General Statutes § 49-27, which provides in relevant part: “The proceeds of each such sale shall be brought into court, there to be applied if the sale is ratified, in accordance with the provisions of a supplemental judgment then to be rendered in the cause, specifying the parties who are entitled to the same and the amount to which each is entitled. . . .”

 

[12] We note, however, that this court never has adopted this purported requirement, and the legislature likewise has limited the title based statutory restriction to the context of judgments of strict foreclosure. See General Statutes § 49-15. Moreover, despite this statutory bar, we previously have concluded that opening a judgment after title has vested in a strict foreclosure case is permissible if equity so requires. See New Milford Savings Bank v. Jajer, supra, 244 Conn. 257, 260. In Jajer, the plaintiff, New Milford Savings Bank, brought an action for foreclosure in which the plaintiff inadvertently referred to only two of the three properties included in the original mortgage conveyance. Id., 253. After the trial court rendered a judgment of strict foreclosure and title had vested in the plaintiff, the plaintiff became aware of the defect in its foreclosure action, which caused title to the omitted property to remain clouded. See id., 253-54. The trial court granted the plaintiff’s motion to open the judgment of strict foreclosure and permitted it to amend its foreclosure complaint to include the inadvertently omitted parcel. Id., 254. The Appellate Court reversed the judgment of the trial court, concluding that, by operation of § 49-15, the trial court lacked the authority to open the judgment after title had vested absolutely in the plaintiff. Id., 254-55. This court reversed the Appellate Court’s judgment, concluding that the trial court did have jurisdiction to open the judgment of foreclosure. Id., 260, 264, 268. We explained that “the equitable nature of foreclosure proceedings persuades us that § 49-15 does not preclude the trial court from exercising its discretion to open the judgment of strict foreclosure in the circumstances of [the] case.” Id., 257.

 

The court in Jajer also explained that “foreclosure is peculiarly an equitable action”; (internal quotation marks omitted) id., 256; and, therefore, “the trial court may examine all relevant factors to ensure that complete justice is done.” (Internal quotation marks omitted.) Citicorp Mortgage, Inc. v. Burgos, supra, 227 Conn. 120.

 

[13] General Statutes § 52-212a provides in relevant part: “Unless otherwise provided by law and except in such cases in which the court has continuing jurisdiction, a civil judgment or decree rendered in the Superior Court may not be opened or set aside unless a motion to open or set aside is filed within four months following the date on which it was rendered or passed. . . .”

 

[14] “[T]he issue of subject matter jurisdiction is distinct from the authority to act under a particular statute. Subject matter jurisdiction involves the authority of a court . . . to adjudicate the type of controversy presented by the action before it. . . . A court . . . does not truly lack subject matter jurisdiction if it has competence to entertain the action before it. . . . Although related, the court’s . . . authority to act pursuant to a statute is different from its subject matter jurisdiction. The power of the court . . . to hear and determine, which is implicit in jurisdiction, is not to be confused with the way in which that power must be exercised in order to comply with the terms of the statute.” (Internal quotation marks omitted.) Pereira v. State Board of Education, 304 Conn. 1, 43 n.30, 37 A.3d 625 (2012).

 

[15] Specifically, the plaintiff offers the following additional grounds for affirming the judgment of the Appellate Court: (1) the negligence of Olsen’s attorney; (2) the imputation of such negligence to Olsen under principles of agency; (3) the operation of the lis pendens statute, which gave Olsen and his attorney constructive notice of the first mortgage; and (4) the doctrine of superseding cause, under which the plaintiff claims that the negligence of Olsen’s attorney, although not the sole cause of Olsen’s loss, was the superseding cause of that loss.

 

[16] Even if we were to accept the plaintiff’s arguments that these factors limited the trial court’s authority to open the judgments in this case, we would regard with skepticism the plaintiff’s assertion that equity precludes Olsen from obtaining any relief on the ground that Olsen’s attorney, like virtually every actor but Olsen himself, made mistakes that contributed to Olsen’s plight and the plaintiff’s windfall. See, e.g., Farmers & Mechanics Savings Bank v. Sullivan, 216 Conn. 341, 354, 579 A.2d 1054 (1990) (“[s]ince a mortgage foreclosure is an equitable proceeding, either a forfeiture or a windfall should be avoided if possible”). In support of this position, the plaintiff relies on a long line of cases that have limited the application of equitable relief when the party seeking such relief has played a role in creating the predicament at issue. See, e.g., Duncan v. Milford Savings Bank, 134 Conn. 395, 401-403, 58 A.2d 260 (1948); Palverari v. Finta, 129 Conn. 38, 43, 26 A.2d 229 (1942); Hoey v. Investors’ Mortgage & Guaranty Co., 118 Conn. 226, 231, 171 A. 438 (1934); Hayden v. R. Wallace & Sons Mfg. Co., 100 Conn. 180, 186-88, 123 A. 9 (1923); Jarvis v. Martin, 77 Conn. 19, 20-21, 58 A. 15 (1904). As we traditionally have explained, “[e]quity will not, save in rare and extreme cases, relieve against a judgment rendered as the result of a mistake on the part of a party or his counsel, unless the mistake is unmixed with negligence, or . . . unconnected with any negligence or inattention on the part of the judgment debtor, or . . . when the negligence of the party is not one of the producing causes.” (Internal quotation marks omitted.) Jarvis v. Martin, supra, 21. Granting relief to Olsen in the present case, however, would not constitute a departure from this long established principle. Instead, we are of the view that the circumstances of the present case, which the trial court aptly described as “sui generis,” constitute precisely the sort of “rare and extreme [case]”; Jarvis v. Martin, supra, 21; in which equity permits a court to provide relief in response to an egregious mistake. See Lomas & Nettleton Co. v. Isacs, 101 Conn. 614, 620-21, 127 A. 6 (1924) (observing that this court has “upheld the power of a court of equity to grant relief from the consequences of an innocent mistake, although the mistake was not unmixed with negligence . . . and although it was a mistake of law . . . [when] the failure to do so would allow one to enrich himself unjustly at the expense of another” [citations omitted]). This is particularly true in the present case given the “highly relevant” conduct of the plaintiff’s counsel in creating these extraordinary circumstances and given the ease with which this predicament might have been averted if the plaintiff’s counsel had addressed the court with greater accuracy.

 

[17] We express no view regarding the conduct of the plaintiff’s counsel but merely recite facts from the record of this case that give us cause for concern.

 

[18] Practice Book § 2-44 provides in relevant part: “The superior court may, for just cause, suspend or disbar attorneys . . . .”

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Wells Fargo Said to Settle FHFA Claims for Less Than $1 Billion

Wells Fargo Said to Settle FHFA Claims for Less Than $1 Billion

Bloomberg-

Wells Fargo & Co. (WFC) agreed to pay less than $1 billion to settle Federal Housing Finance Agency claims it sold faulty mortgage bonds to Fannie Mae and Freddie Mac, according to a person briefed on the deal.

The bank’s accord with the FHFA, which regulates the government-backed mortgage-finance firms, was subject to a confidentiality agreement, the person said, asking not to be named because of those terms. San Francisco-based Wells Fargo said in a May filing that it had settled Fannie Mae’s claims over mortgage bonds, and that the payment, which it didn’t specify, was covered by reserves.

[BLOOMBERG]

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Eric Holder Says The Justice System He Leads Is Broken. Can He Fix It?

Eric Holder Says The Justice System He Leads Is Broken. Can He Fix It?

Can’t fix what you intentionally broke!


HUFFPO-

The East Elmhurst neighborhood of Queens, near LaGuardia Airport, was mostly Italian immigrants after World War II. But in the years that followed, the New York neighborhood slowly gave way to a black majority as one of the first neighborhoods where African-Americans could buy homes.

Eric Himpton Holder, born in 1951, watched the neighborhood change. He went through New York public schools, seeing how more and more East Elmhurst residents were being locked up. Holder thinks he might have been one of them, if he had made a few different choices in those early years.

“Kids who I grew up with, who I played ball with, basketball, baseball, and went to parties with — for whatever reason — they ended up in a fundamentally different place than I did,” Holder said in an interview with The Huffington Post. “I’m the attorney general of the United States and they are ex-felons. At some point, usually in high school or maybe a little later, they ran afoul of the law and had to serve time.”

[HUFFINGTON POST]

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Video to Raise Awareness About Process Server Assault Video Release by ServeNow

Video to Raise Awareness About Process Server Assault Video Release by ServeNow

Process server assault is a growing issue in the United States. The PAAPRS campaign, Promoting Assault Awareness and Protective Regulations for Servers, focuses on raising awareness about this issue and opening the eyes of the public to the realities of serving legal process.

Process servers protect your right to legal notice. Without them, a court case or legal ruling could continue without your knowledge, affecting your livelihood and emotional and financial well-being. They are disinterested third parties with no vested interest in the outcome of the issue.

Please don’t shoot the messenger.

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Aurora Loan Serv., LLC v Murphy | NYSC – Aurora failed to establish that it transferred an interest to Nationstar … neither language explicitly assigning the Note nor “language show[ing Aurora’s] intention … to transfer it.

Aurora Loan Serv., LLC v Murphy | NYSC – Aurora failed to establish that it transferred an interest to Nationstar … neither language explicitly assigning the Note nor “language show[ing Aurora’s] intention … to transfer it.

STATE OF NEW YORK
SUPREME COURT

AURORA LOAN SERVICES, LLC,
Plaintiff,

-against-

MICHAEL W. MURPHY; KIMBERLY MURPHY;
MORTGAGE ELECTRONIC REGISTRATION
SYSTEMS, INC. AS NOMINEE FOR SMC MORTGAGE
IN LIEU OF TRUE CORPORA TE NAME SUNSET
MORTGAGE COMPANY, LP,
Defendants.

Supreme Court Greene County All Purpose Term, September 30, 2013
Assigned to Justice Joseph C. Teresi

APPEARANCES:
Gerald Roth, Esq.
Stein Weiner & Roth, L.L.P.
Attorneys/or Plaintiff
One Old Country Road, Suite 113
Carle Place, NY 11514

Jonathan E. Cohen, Esq.
Attorney for Defendants Michael and Kimberly Murphy
Four East Court Street
Hudson, New York 12534-2406

TERESI,J.:

Aurora Loan Services, LLC (hereinafter “Aurora”) commenced this action to foreclose
Michael and Kimberly Murphy’s (hereinafter “the Murphys”) Note’ and Mortgage, both dated
March 7, 2007 (hereinafter “Note” and “Mortgage”). Upon each Defendants’ default in
answering, this Court granted Aurora’s motion for the appointment of a referee on July 27, 2010
(hereinafter “Order of Reference”) and subsequently, on October 4, 2010, a Judgment of
Foreclosure and Sale (hereinafter “Judgment”). No sale has yet occurred.

Aurora now moves, in part, to vacate the Order of Reference and Judgment. The
Murphys do not oppose this portion of Aurora’s motion. Accordingly, the Order of Reference
and Judgment are vacated on consent.

Aurora also moves to amend the caption of the action to substitute Nationstar Mortgage,
LLC as the named plaintiff and for a new order of reference. The Murphys oppose these portions
of Arurora’s motion. On this record, Aurora failed to establish its entitlement to amend the
caption of the action or to an order of reference.

Considering first Aurora’s motion to amend the caption, CPLR § 1018 provides that
“[ u ]pon any transfer of interest, the action may be continued by … the original parties unless the
court directs the person to whom the interest is transferred to be substituted or joined in the
action.” (see generally GRP Loan, LLC v Taylor, 95 AD3d 1172 [2d Dept 2012]).
On this record, Aurora failed to establish that it transferred an interest to Nationstar
sufficient to justify amending the caption of this action. In support of its motion, Aurora submits
its Assignment of Mortgage, dated July 5, 2012 (hereinafter “Assignment”). Such Assignment
purportedly assigns all of Aurora’s interests in the Mortgage to Nationstar. It includes, however,
neither language explicitly assigning the Note nor “language show[ing Aurora’s] intention … to
transfer it.” (Bank of New York v Silverberg, 86 AD3d 274, 280-81 [2d Dept 2011], quoting
Suraleb. Inc. v International Trade Club, Inc., 13 AD3d 612 [2d Dept 2004]). The Assignment’s
undefined and vague “including all mortgages that have been consolidated therewith, with all
interest secured thereby, all liens, and any rights due or to become due thereon” terms, reference
only mortgages and do not demonstrate an intent to assign the Note. (cf Chase Home Fin., LLC
v Miciotta, 101 AD3d 1307 [3d Dept 2012]). Aurora submitted no additional documentary proof
to show that it transferred the Note to Nationstar. Instead, Aurora relies solely on Nationstar’s
Assistant Secretary’s affidavit. She does not state that Nationstar is the current holder of the
Note, but rather states only that Nationstar is “the assignee of the plaintiff in this case.” Such
contention fails to demonstrate that Aurora assigned the Note to Nationstar as it is wholly
“conclusory, [and] without probative value.” (Crossett v Wing Farm, Inc., 79 AD3d 1334, 1336
[3d Dept 2010], quoting Morales v Westchester Stone Co., Inc., 63 AD3d 805 [2d Dept 2009]).
Because “a transfer or assignment of only the mortgage without the debt is a nullity and no
interest is acquired by it,” Aurora failed to establish that it transferred to Nationstar an interest
sufficient to support a CPLR §1018 amendment. (Homecomings Fin., LLC v Guidi, 108 AD3d
506, 508 [2d Dept 2013], quoting U.S. Bank Nat. Ass’n v Dellarmo, 94 AD3d 746 [2d Dept
2012]; HSBC Bank USA v Hernandez, 92 AD3d 843 [2d Dept 2012]; Merritt v Bartholick, 36
NY 44 [1867]).

Accordingly, Aurora’s motion to amend the caption of the action is denied.
Aurora similarly failed to demonstrate its entitlement to an order of reference.
On March 2, 2011, the Chief Administrative Judge of the Courts issued Administrative
Order 431/11 (hereina~er “A0/431111 “). It requires Plaintiffs counsel, when submitting a
proposed order of reference, to also submit an affirmation stating, in part, that: “I communicated
with the following representative or representatives of Plaintiff … ” “The filing of this attorney’s
affirmation is mandatory.” (U.S. Bank Nat. Ass’n v Eaddy, 109 AD3d 908 [2d Dept 2013]).

Here, Plaintiff failed to comply with A0/431/11. Despite Plaintiffs counsel’s
submission of an affidavit in the prescribed format, he did not state that he “communicated with
[a] representative or representatives of Plaintiff.” Rather, he allegedly communicated with
“Jaclyn Holloway[,] Assistant Secretary of Nationstar Mortgage, LLC, assignee of plaintiff.”
Such conferral violates the explicit language of A0/431 /11, which demands communication with
Plaintiffs representative not an “assignee of Plaintiff.” Needless to say, the terms representative
and assignee are not synonymous. (Black’s Law Dictionary [9th ed 2009], representative – one
who stands for or acts on behalf of another; assignee – one to whom property rights or powers are
transferred by another). Moreover, as set forth above, this record does not sufficiently establish
that Nationstar is Plaintiffs assignee. Nor could Plaintiffs counsel rely on Ms. Holloway’s
allegations, as her allegations about Plaintiffs business records were unsupported by any
foundational proof. (Colonno v Exec. I Assoc., 228 AD2d 859 [3d Dept 1996]; W. Val. Fire
Dist. No. 1 v Vil. of Springville, 294 AD2d 949 [4th Dept 2002]; Unifund CCR Partners v
Youngman, 89 AD3d 1377 [4th Dept 2011]). Because Plaintiff did not comply with A0/431/11
it failed to demonstrate its entitlement to the order of reference it submitted.

Accordingly, Plaintiffs motion for an order of reference is denied.

This Decision and Order is being returned to the attorney for Defendant. A copy of this
Decision and Order and all other original papers submitted on this motion are being delivered to
the Greene County Clerk for filing. The signing of this Decision and Order shall not constitute
entry or filing under CPLR §2220. Defendant is not relieved from the applicable provision of
that section respecting filing, entry and notice of entry.
So Ordered.

Dated: October 22-2013
Albany, New York

PAPERS CONSIDERED:
1. Notice of Motion, dated May 6, 2013; Affirmation of Gerald Roth, dated May 6, 2013;
Affirmation of Gerald Roth, dated May 6, 2013, Affidavit of Jaclyn Holloway, dated
March 25, 2013, with attached unnumbered exhibits.
2. Order to Show Cause, dated June 23, 2013; Affirmation of Jonathan Cohen, dated July
· 19, 2013, with attached Exhibits A-E.
3. Affirmation of Gerald Roth, dated September 25, 2013, with attached Exhibit A.

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Bank of Am., N.A. v Ramjit | NYSC – Consequently, OneWest is a stranger to this action, even assuming, arguendo, it has an interest concerning the loan at issue

Bank of Am., N.A. v Ramjit | NYSC – Consequently, OneWest is a stranger to this action, even assuming, arguendo, it has an interest concerning the loan at issue

Decided on July 8, 2013

Supreme Court, Kings County

 

Bank of America, N.A., Plaintiff,

against

Wayne Ramjit, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., AS NOMINEE FOR NETBANK, NEW YORK CITY ENVIRONMENTAL CONTROL BOARD, NEW YORK CITY TRANSIT ADJUDICATION BUREAU, PEOPLE OF THE STATE OF NEW YORK, MOSHE DAYAN, SHALOM DAYAN, Defendants.

17161/08

Plaintiff Attorney: Bruce S. Reznick, P.C., 958 East 81st Street, Brooklyn ,NY 11236

Defendant Attorney: Davidson Fink, LLP, 28 East Main Street, Suite 1700, Rochester, NY 14614-1990

David I. Schmidt, J.

Upon the foregoing papers, non-party OneWest Bank, F.S.B. (OneWest) moves, pursuant to CPLR 1003 and CPLR 3215(c), for an order (1) vacating the default of Mortgage Electronic Registration Systems, Inc. (MERS), (2) dismissing MERS “as an improperly joined party;” and (3) declaring that its “[m]ortgage is senior in all respects to that certain mortgage dated as of September 12, 2007 in favor of Bank of America, N.A.” (BOA).

Significantly, OneWest explicitly noticed this motion in four different capacities: (1) “as purchaser of certain assets and servicing rights” from the Federal Deposit Insurance Corporation (FDIC); (2) “as receiver” for Indymac Bank, F.S.B. and Indymac Federal bank, F.S.B. (Indymac); (3) “as servicer of a certain note and mortgage” for non-party “U.S. Bank, N.A., as Trustee for the LXS 2006-12N, as successor, transferee and assignee of the Note and Mortgage, in the name [*2]of Netbank, Inc. (Netbank) and [MERS];” and (4) “as mortgagee and nominee for Netbank.”

OneWest claims that it “has standing to bring this motion as successor in interest to Netbank and MERS, as mortgagee and nominee for Netbank and its successors and assigns in connection with the loan.” However, OneWest failed to move, pursuant to CPLR Article 10, for leave to intervene or for substitution in this foreclosure action. Consequently, OneWest is a stranger to this action, even assuming, arguendo, it has an interest concerning the loan at issue (Grella v Mid-America Realty Invs. Ltd. Partnership, 199 AD2d 18 [1993] [“The IAS court should not have ever considered Firemen’s motion since it is not a party to the underlying action and has never sought leave to intervene”]; see also 103rd Funding Assoc. v Salinas Realty Corp., 276 AD2d 340 [2000], lv dismissed, in part, denied in part 96 NY2d 851 [2001] [“Because the tenants did not move for leave to intervene in the action (see, CPLR 1013), they lack standing to appeal the court’s determinations”]; Weiss v Monaco, 245 AD2d 443, [1997] [holding non-party auto insurer lacked standing to appeal from summary dismissal of insured’s complaint because insurer did not move for leave to intervene in underlying action). OneWest thus lacks standing to move in this action, which moots addressing this motion on the merits. Accordingly, it is

Ordered that OneWest’s motion is denied in its entirety.

This constitutes the decision and order of the court.

E N T E R,

J. S. C.

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U.S. attorney wants DOJ to take civil action against Bank of America – legal costs from mortgage cases could reach $5.1 billion: filing

U.S. attorney wants DOJ to take civil action against Bank of America – legal costs from mortgage cases could reach $5.1 billion: filing

Reuters-

The U.S. Attorney’s office recently told Bank of America Corp that they plan to recommend the U.S. Department of Justice file a civil action against the bank related to securitization of mortgages, according to a regulatory filing on Wednesday.

That investigation is one of several the second-largest U.S. bank is trying to resolve over mortgage practices of its own legacy business, as well as those of Countrywide and Merrill Lynch, which it acquired during the 2007-2009 financial crisis.

[REUTERS]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD11 Comments

Special Report: New Standards For Mortgage Signings developed by executives from major lenders and title companies (LSI/LPS/FNF/CITI/BofA)

Special Report: New Standards For Mortgage Signings developed by executives from major lenders and title companies (LSI/LPS/FNF/CITI/BofA)

What a freaking joke for the National Notary Association to even get involved with those who were involved in Robo-Signing and who couldn’t even follow simple standards that were already in place! This shares similarities to MERS and its shareholders.

.

A special committee called the Signing Professionals Workgroup (SPW) comprised of executives from major lenders and title companies, developed the Standards“.

 

 

 

NNA-

The collapse of the housing market and numerous other crises have caused the government to significantly increase its scrutiny of the mortgage industry. This challenging new environment is forcing lenders, title companies, signing services and others in the mortgage origination world to take a hard look at how business is done.

Of all the people involved in originating mortgages, Notary Signing Agents received little attention. That is changing. In order to comply with federal mandates, lenders now recognize that the tens of thousands of Signing Agents who represent them at the signing table need to be better qualified.

As a result, leading lenders and title companies gathered to create the first set of recommended best-practice standards for Notaries handling loan signings. These standards are called the Certified Signing Specialist Standards and form the basis of a new designation for signing professionals: the Certified Signing Specialist. That is a Notary who has met all of the elements of the standards.

[NATIONAL NOTARY ASSOCIATION]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD2 Comments

BofA Accord With FHFA Could Cost $8 Billion, Fitch Says

BofA Accord With FHFA Could Cost $8 Billion, Fitch Says

These settlements are 0.000000000005 pennies over a dollar compared to what they stole!

WOW!

WE are in the wrong business folks!


Bloomberg-

Bank of America Corp., the second-biggest U.S. lender, may need to pay $5 billion to $8 billion to settle a federal mortgage lawsuit after a rival bank’s deal set “a relatively high bar,” according to Fitch Ratings.

Bank of America had about $57 billion in mortgage-backed securities cited by a Federal Housing Finance Agency lawsuit, compared with about $33 billion tied to JPMorgan Chase & Co.’s suit, which was settled last week for $4 billion, Fitch analysts wrote in a note today.

[BLOOMBERG]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD0 Comments

Ally settles U.S. regulators’ mortgage securities claims for $170 Million

Ally settles U.S. regulators’ mortgage securities claims for $170 Million

Can someone point me in the right direction… I want to steal $6 Billion and only pay out the suckers $170 Million in return.

Thanks in advance.


Reuters-

Ally Financial Inc, the former parent of bankrupt Residential Capital LLC, has agreed to settle lawsuits by two U.S. regulators over alleged misstatements about its residential mortgage-backed securities.

The automotive lender said on Tuesday it had reached a deal to resolve a lawsuit by the Federal Housing Finance Agency (FHFA) over $6 billion in mortgage investments as well as separate claims from the Federal Deposit Insurance Corp. Ally said it expects to record a charge of about $170 million.

“These settlements are key steps in Ally addressing its remaining legacy mortgage risks,” Michael Carpenter, the company’s chief executive, said in the statement.

[REUTERS]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD0 Comments

JPMorgan Proposed Mortgage Accord Said to Meet Resistance

JPMorgan Proposed Mortgage Accord Said to Meet Resistance

Bloomberg-

JPMorgan Chase & Co. (JPM)’s proposed terms for settling state and federal probes of mortgage-bond sales were rejected by the Department of Justice this week, according to two people familiar with the negotiations.

The Justice Department told the bank it won’t agree to language the firm submitted Oct. 27, said the people, who asked not to be named because the talks are private. The sides split over JPMorgan’s plan to seek reimbursement from the Federal Deposit Insurance Corp. for part of the accord and the bank’s bid for exemption from criminal liability in probes unrelated to residential mortgage-backed securities, one person said.

[BLOOMBERG]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD0 Comments

Foreclosure king’s rebuke could help former partner get back $58.5 million

Foreclosure king’s rebuke could help former partner get back $58.5 million

Palm Beach Post-

A judge’s scathing rebuke of David J. Stern might cost the former foreclosure king more than his law license. It also could help a former business partner’s quest to reverse a $58.5 million payday.

Saying Stern inflicted “massive injury” on Florida’s foreclosure system, a judge on Monday sided with the Florida Bar in its push to strip the Plantation attorney of his law license.

[PALM BEACH POST]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD0 Comments

Harmon Law mistake leaves couple without home

Harmon Law mistake leaves couple without home

Turn to 10-

CRANSTON, R.I. –

A little over a month ago, John and Ann Roach bought a foreclosed home near Indian Lake in South Kingstown.

In short order, they sold their home in Rumford.

The couple said at this point in their lives it was time for a change.

“We thought what a wonderful place to create memories with our grandchildren, the next generation. We were close to fishing, planning on kayaking, and getting a small boat,” Ann Roach said.

The Roaches’s closing on the foreclosed home was scheduled for Oct. 21, but then at the very last minute, it was called off.

“Sharon Steel, our Realtor, met with us last Friday and told us because Harmon Law had failed to provide proper notification of foreclosure, we’d be unable to obtain title insurance” Ann Roach said.

[TURNTO10]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD0 Comments

LPS Launches Error Resolution Tracking to Assist Mortgage Servicers With New CFPB Requirements

LPS Launches Error Resolution Tracking to Assist Mortgage Servicers With New CFPB Requirements

JACKSONVILLE, Fla., Oct. 28, 2013 /PRNewswire/ — Lender Processing Services, Inc. (NYSE: LPS), a leading provider of integrated technology, data and analytics to the mortgage and real estate industries, today announced the launch of its Error Resolution Tracking solution, an innovative workflow tool designed to assist mortgage servicers in meeting new Consumer Financial Protection Bureau (CFPB) requirements for recording, tracking and responding to consumer complaints regarding possible errors with their loans. LPS can quickly implement Error Resolution Tracking to help servicers meet the CFPB’s compliance deadline of Jan. 10, 2014.

(Logo:  http://photos.prnewswire.com/prnh/20120802/FL50731LOGO )

“With the CFPB’s deadline fast approaching, servicers are looking for solutions that can be implemented quickly to help them enhance compliance and control,” said Joe Nackashi, CIO and executive vice president of the LPS Servicing Solutions and Technology division. “Error Resolution Tracking delivers highly efficient capabilities for servicers to gain more control over processes, provide a timely response to their borrowers and be better prepared to respond to new CFPB regulatory requirements.”

Using servicer-defined parameters within the configurable settings in its logic and workflow, Error Resolution Tracking links incoming borrower correspondence with the loan number in LPS’ MSP® servicing platform and assigns the borrower inquiry to the appropriate work queue for immediate action. To help streamline servicer response time, the solution auto-generates an initial response to the borrower acknowledging receipt of their complaint, and also preserves an audit trail of all borrower correspondence received and sent. If the servicer determines more time is needed to respond to a borrower’s inquiry, the Error Resolution Tracking solution auto-generates an extension notification to the borrower.

While Error Resolution Tracking is integrated with MSP, the solution may be used by all servicers. Using sophisticated queuing technology, Error Resolution Tracking can help servicers reduce time-intensive manual data entry in off-line systems, improve response time to borrowers and increase accountability by providing proper controls around the error resolution tracking process.

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Posted in STOP FORECLOSURE FRAUD4 Comments

THE FLORIDA BAR vs. DAVID JAMES STERN – Disbarred, Recommends Florida Bar Referee

THE FLORIDA BAR vs. DAVID JAMES STERN – Disbarred, Recommends Florida Bar Referee

via  Michael Alex Wasylik

IN THE SUPREME COURT OF FLORIDA
(Before a Referee)

THE FLORIDA BAR,
Complainant,

v.

DAVID JAMES STERN,
Respondent.

EXCERPTS:

This type of misconduct persisted and was again discovered in the spring of 2009. Assignments of mortgages were filed throughout the state which contained fraudulent notarizations. The Bar submitted 40 assignments into evidence which on their face were notarized by 11 different notaries and revealed that they were not notarized on the date reflected. Not only were the dates false, but the evidence established through the testimony of Kelly Scott that Cheryl Samons executed approximately 1,000 assignments per day, moving from floor to floor in the Stern firm. Kelly Scott testified that there was never any witness or notary present when Ms. Samons executed the document. Tammie Kapusta testified to the same procedure. (The Florida Bar Exhibit 41, page 24). Also, notaries’ stamps were freely exchanged between the notaries, according to Tammie Kapusta. (The Florida Bar Exhibit 41, page 23). Several paralegals actually signed Cheryl Samons’ name, according to Kelly Scott on assignments, without any indication of the true signatory. Mr. Stern failed to present any evidence upon which I should disregard this sworn testimony. I find that the circumstances establish Mr. Stern was aware of these procedures as a result of his regular presence at the firm, his direct and imperviable relationship with Cheryl Samons, as well as the fact, as testified to by several witnesses, that he knew everything that occurred at his firm. His corrective action of additional instructions to the notary with the threat of termination did not resolve the problem as indicated by the Toledo and Suarez affidavits.

Mr. Stern testified about one notary, Terry Rice, who executed an assignment with a notary stamp that could not have been in existence on the date the document existed. He recounted Ms. Rice’s explanation that although she was actually present when the document was signed and mistakenly notarized months later with her new notary stamp. Although plausible, the existence of the 40 assignments by 11 different notaries with the same defect reflects otherwise.

Further, these false notarizations, witnessing, and backdating are not innocuous. Attorney Michael Wasylik testified to the submission of a corrected assignment prepared by David Stern reflecting that it was filed “to correct the effective date”. In fact, the date was not in error. (The Florida Bar Exhibits 16, 17). Rather, the corrected assignment was filed to cover the improper notarization of the original assignment. The “corrected” assignment was a subterfuge and/or fraud.
The preamble to Chapter 4 of the Rules Regulating The Florida Bar provides that actual knowledge can be inferred from the circumstances. Based on the evidence I find that Mr. Stern was aware of the misconduct of Cheryl Samons. She was rewarded by Mr. Stern for her work. In 2009, Cheryl Samons received a bonus which was payable even if terminated. (The Florida Bar Exhibit 37).

[…]

 

IV. STANDARDS FOR IMPOSING LAWYER SANCTIONS

I considered the following Standards to be applicable:
Standard 4.41: Disbarment is appropriate when: (a) a lawyer abandons the practice and causes serious or potentially serious injury to a client; or (b) a lawyer knowingly fails to perform services for a client and causes serious or potentially serious injury to a client; or (c) a lawyer engages in a pattern of neglect with respect to client matters and causes serious or potentially serious injury to a client.

Standard 6.21: Disbarment is appropriate when a lawyer knowingly violates a court order or rule with the intent to obtain a benefit for the lawyer or another, and causes serious injury or potentially serious injury to a party or causes serious or potentially serious interference with a legal proceeding.

Standard 7.1: Disbarment is appropriate when a lawyer intentionally engages in conduct that is a violation of a duty owed as a professional with the intent to obtain a benefit for the lawyer or another, and causes serious or potentially serious injury to a client, the public, or the legal system.

V. CASE LAW

Given the magnitude of the misconduct and its widespread impact on the judiciary and public, disbarment is the appropriate sanction. Most recently the Supreme Court of Florida was confronted with a case in which an office manager of a firm misappropriated funds. The Court addressed the responsibility of the firm’s two partners, who they disbarred.

As the referee stated, “Respondents cannot abdicate, by delegation to the bookkeeper, the ultimate responsibility for trust account maintenance….” Their failure to exercise care and discretion in managing the trust account resulted in a massive theft of client funds—approximately $4.38 million was stolen from the account. If Respondents had adhered to the minimum trust account requirements set forth in the Rules Regulating the Florida Bar, they could have safeguarded their clients from this enormous amount of theft. While recognizing Respondents argument that the funds had been stolen by Bookkeeper, the referee concluded that this argument might hold for an isolated and recent conversion of trust funds, but the sheer size of the $4.38 million deficit proves that Bookkeeper had been embezzling for many months, if not years. Respondents had tried to delegate their responsibilities to a non-lawyer employee in the firm, and did not effectively monitor the employee or the trust account. As the referee noted, the ultimate responsibility for the trust account monies rests with Respondents. They are the lawyers.

The Florida Bar v. Rousso and Roth, 117 So.3dd 756 (Fla. 2013)
Mr. Stern is similarly situated. His failure to exercise care resulted in massive injury to the system. The incidents were not isolated, but rather a representation of the culture of the firm, as to the low level of competence and ethics. He is the lawyer. It was his firm. Mr. Stern is responsible.5

In The Florida Bar v. Riggs, 944 So.2d 167 (Fla. 2006), that attorney was suspended for three years when he assigned responsibilities to his paralegal and failed to supervise her. Here, the lack of supervision is massive.

In The Florida Bar v. Ribowsky-Cruz, 529 So.2d 1100 (Fla. 1988) the Supreme Court of Florida disbarred an attorney who abandoned her law practice. That is precisely what Mr. Stern did when he announced his intentions to the Chief Judges of this state in his letter dated March 4, 2011 and failed to take any action on the remaining cases in which no withdrawal occured.

Further, Mr. Stern was publicly reprimanded in 2002. The misconduct involved an affidavit that contained inaccurate information. The instant matter, in part, involves false information in affidavits and assignments in David Stern’s office. The repetition of the same misconduct establishes that Mr. Stern has no regard for the requirements and responsibilities of the Rules Regulating The Florida Bar.

Additionally, Mr. Stern’s letter of abandonment states that he did not have the financial resources to properly withdraw from his pending cases. Mr. Stern’s declaration revealed his net worth and that he did in fact possess sufficient resources to properly withdraw from cases. I am not persuaded by his argument that his reference to lack of financial resources related to the firm’s net worth only. David Stern and the firm are one entity. His statement was a misrepresentation. I find it to be an aggravating circumstance in these proceedings.

Mr. Stern has not expressed any remorse in these proceedings. He has taken no responsibility. The mistake or difficulties are the actions of others.
Lastly, Mr. Stern has not presented me with any evidence of mitigation. As such, I have no basis to recede from the Bar’s recommendation of disbarment. It is the appropriate result.

VI. RECOMMENDATION AS TO DISCIPLINARY MEASURES TO BEAPPLIED

I recommend that respondent be found guilty of misconduct justifying disciplinary measures, and that respondent be disciplined by:
A. Disbarment.
B. Payment of The Florida Bar’s costs in these proceedings.

VII. PERSONAL HISTORY, PAST DISCIPLINARY RECORD

Prior to recommending discipline pursuant to Rule 3-7.6(k)(1), I considered the following:
A. Personal History of Respondent:
Age: 53
Date admitted to the Bar: November 27, 1991
B. Aggravating Factors:
9.22(a) prior discipline: October 24, 2002 – public reprimand before the Board of Governors
9.22(b) dishonest or selfish motive
9.22(c) a pattern of misconduct
9.22(d) multiple offenses
9.22(g) refusal to acknowledge wrongful nature of conduct
9.22(h) vulnerability of victim (court system)
9.22(i) substantial experience in the practice of law (admitted 1991)
C. Mitigating Factors:
None

VIII. STATEMENT OF COSTS AND MANNER IN WHICH COSTS SHOULD BE TAXED

I find the following costs were reasonably incurred by The Florida Bar:

Administrative Fee $ 1,250.00
Investigative Costs 7,340.33
Bar Counsel Costs 8,374.26
Court Reporters’ Fees 14,810.73
Witness Expenses 2,992.30
Expert Witness Brian Spector 15,000.00
TOTAL $49,767.62

It is recommended that such costs be charged to Respondent and that interest at the statutory rate shall accrue and be deemed delinquent 30 days after the judgment in this case becomes final unless paid in full or otherwise deferred by the Board of Governors of The Florida Bar.

Dated this 28th day of October, 2013.

/s/ Nancy Perez________
Nancy Perez, Referee

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image: PI Bill Warner

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Posted in STOP FORECLOSURE FRAUD5 Comments

Wadsworth v. JP Morgan Chase Bank, NA | FL 4th DCA – Not complied with the notice requirement in the acceleration clause … Chase Bank has filed a partial confession of error

Wadsworth v. JP Morgan Chase Bank, NA | FL 4th DCA – Not complied with the notice requirement in the acceleration clause … Chase Bank has filed a partial confession of error

 

EDWARD A. WADSWORTH, Appellant,
v.
JP MORGAN CHASE BANK, N.A., et al., Appellees.

No. 4D12-3057.
District Court of Appeal of Florida, Fourth District.
October 23, 2013.
Edward A. Wadsworth, West Palm Beach, pro se.

Thomas H. Loffredo and Shayna A. Freyman of GrayRobinson, P.A., Fort Lauderdale, for appellee JP Morgan Chase Bank, N.A.

FORST, J.

In this mortgage foreclosure case, after finding Edward A. Wadsworth in default for failure to file an answer in response to JP Morgan Chase Bank’s (“Chase Bank”) complaint, the trial court granted summary judgment against Wadsworth, in favor of Chase Bank. Wadsworth now appeals the entry of default and the summary judgment order against him. For reasons discussed below, we find that the trial court improperly granted Chase Bank’s motions for default and summary judgment, and thus we reverse these orders and remand for appropriate proceedings.

Facts

The parties executed a mortgage document and mortgage note in March 2007, with Chase Bank as the lender and Wadsworth as the borrower. The mortgage document includes an acceleration clause requiring Chase Bank to notify Wadsworth before accelerating the mortgage note. The provision further specifies that the notice must provide a date by which Wadsworth may cure the default, which cannot be less than thirty days from the date notice is given to Wadsworth.

Wadsworth failed to pay the required installment payment for the mortgage note in December 2007. On April 4, 2008, Chase Bank sent a letter to Wadsworth notifying him that Chase Bank “has accelerated all sums due and owing.” Three days later, on April 7, Chase Bank filed a mortgage foreclosure complaint against Wadsworth, alleging default and requesting payment of the principal of the note, the interest due, and costs of collection. This is the only letter of notice in the record.

Wadsworth responded to the complaint with a motion to dismiss on April 30, 2008, which the trial court denied. Chase Bank filed two motions for default and a motion for summary judgment against Wadsworth for “failure to serve any papers on the undersigned or any papers as required by law.” The trial court denied Chase Bank’s motions for default on January 20, 2009, because Wadsworth had filed a pleading (i.e., his motion to dismiss). Chase Bank later filed a third motion for default against Wadsworth for “failure to file an Answer in this matter” on June 26, 2012. Wadsworth then filed an answer on July 6, 2012.

On July 10, 2012, the trial court granted both Chase Bank’s motion for default and motion for summary judgment against Wadsworth. Wadsworth immediately filed a motion to vacate the final order and for reconsideration, arguing that the default was improper because he had filed an answer and that Chase Bank had not complied with the notice requirement in the acceleration clause. The trial court denied Wadsworth’s motion and this appeal followed.

For this appeal, Chase Bank has filed a partial confession of error, in which it agrees with Wadsworth that the trial court erred in entering a default against him after Wadsworth had filed an answer and that the trial court further erred in granting summary judgment against Wadsworth where issues of material fact remain to be addressed in regards to compliance with the acceleration clause. Thus, we reverse the orders below with brief remarks on the errors and to also briefly address the issue to which Chase Bank does not confess error.

Entry of Default Against Wadsworth

We review an order denying a motion to vacate an entry of default for abuse of discretion. Gibson Trust, Inc. v. Office of the Attorney Gen., 883 So. 2d 379, 382 (Fla. 4th DCA 2004).

Florida Rule of Civil Procedure 1.500(c) allows a party to file a pleading any time before a default is entered. Only after a party has failed to serve any paper in an action may a default be entered. Fla. R. Civ. P. 1.500(a), (b). Because the dates are clear that Wadsworth filed an answer on July 6, before default was entered on July 10, we find that the trial court abused its discretion in entering default against Wadsworth. Therefore, reversal of the order entering default is required.

Summary Judgment Against Wadsworth

We review an order granting summary judgment de novo. Scott v. Williams, 107 So. 3d 379, 384 (Fla. 2013); Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000).

Summary judgment is proper where no genuine issue of material fact exists and the moving party is entitled to a judgment as a matter of law. Fla. R. Civ. Pro. 1.510(c); Volusia County, 760 So. 2d at 130. “Before a plaintiff is entitled to a summary judgment of foreclosure, the plaintiff must either factually refute the alleged affirmative defenses or establish that they are legally insufficient to defeat summary judgment.” Frost v. Regions Bank, 15 So. 3d 905, 906 (Fla. 4th DCA 2009) (quoting Knight Energy Servs., Inc. v. Amoco Oil Co., 660 So. 2d 786, 788 (Fla. 4th DCA 1995)). In Frost, we reversed an order granting summary judgment against a defendant in a foreclosure action where the plaintiff bank “did not meet its burden to refute the [defendant’s] lack of notice and opportunity to cure defense.” Id.

As in Frost, Wadsworth’s answer asserts that Chase Bank did not comply with the notice requirement in the acceleration clause. The only notice of record Chase Bank gave was on April 4 and the bank subsequently filed a foreclosure complaint on April 7, giving Wadsworth less than thirty days of notice of Chase Bank’s intent to accelerate the mortgage and effectively no opportunity to cure the default. No evidence of record exists showing that Chase Bank otherwise complied with the acceleration clause, and the trial court did not address Wadsworth’s defense of lack of notice in its final summary judgment order. Thus, at least one genuine issue of material fact exists to be addressed, making summary judgment improper in this action.

Mediation and Summary Judgment of Foreclosure

Wadsworth also argues in this appeal that summary judgment is improper in a foreclosure proceeding where mediation has not first been held. To this point alone, Chase Bank does not confess error.

In 2009, the Florida Supreme Court mandated mediation in homestead residential mortgage foreclosure cases. In re Final Report & Recommendations on Residential Mortg. Foreclosure Cases, 2009 WL 5227471 (Fla. Dec. 28, 2009). In response, Florida’s Fifteenth Judicial Circuit issued Administrative Order Number 3.308-12/10, which provided for mediation in residential mortgage foreclosure cases filed on or after July 12, 2010. Case Mgmt. of Residential Foreclosure Cases & Mandatory Mediation Referral, Admin. Order No. 3.308-1/12 (Fla. 15th Cir. Ct. Jan. 12, 2012) (emphasis added). The program was later terminated in 2011. Id.

The complaint giving rise to the instant foreclosure case was filed on April 7, 2008, which is outside the time of mandated mediation under Administrative Order Number 3.308-12/10. No such requirement exists outside of this Administrative Order to support Wadsworth’s argument that he is entitled to mediation. We still reverse the order of summary judgment on the grounds stated above, but we note that summary judgment against Wadsworth would not be improper merely because mediation was not held beforehand.[1]

Conclusion

For the reasons set forth above, we reverse the entry of default and the order of summary judgment against Wadsworth.

Reversed and remanded for further proceedings.

GROSS and MAY, JJ., concur.

Not final until disposition of timely filed motion for rehearing.

[1] We need not determine whether a failure to mediate would necessarily preclude a final judgment of foreclosure for a case filed after July 12, 2010.

 

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Posted in STOP FORECLOSURE FRAUD0 Comments

Judge: ‘Foreclosure king’ David J. Stern should lose law license

Judge: ‘Foreclosure king’ David J. Stern should lose law license

Stern along with the rest of the mills should all lose their license.

They should also be forced to forfeit all the money they received.


Palm Beach Post-

Robosigning king David J. Stern visited “massive injury” on Florida’s foreclosure system and should be stripped of his license to practice law, a judge said Monday.

Stern was accused of running a foreclosure mill that used flawed and fraudulent documents to push mortgage defaults through Florida courts during the Great Recession. The Florida Bar asked Stern to give up his license.

[PALM BEACH POST]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD0 Comments

JPMorgan Still Isn’t Sure What It Bought in 2008

JPMorgan Still Isn’t Sure What It Bought in 2008

But it sure knows what homeowner they foreclosed on and continues to evict!


Bloomberg-

You may have heard that JPMorgan Chase & Co. is paying a lot of people billions of dollars to settle those people’s lawsuits over bad mortgages that Washington Mutual sold them back in the day. Some people think that this is unfair to JPMorgan, since it wasn’t selling the bad mortgages,* WaMu was. Why should JPMorgan pay for the sins of WaMu?

Well, because it bought WaMu, is the reasonable answer. When you buy a company you assume its liabilities. “There are always uncertainties in deals,” notorious bank-hater Jamie Dimon once said. “Our eyes are not closed on this one.” This one being WaMu.**

[BLOOMBERG]

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Posted in STOP FORECLOSURE FRAUD1 Comment

Bankruptcy During Foreclosure: Home Preservation Through Chapters 7 and 13

Bankruptcy During Foreclosure: Home Preservation Through Chapters 7 and 13

 

Mark R. Lindblad

UNC Center for Community Capital

Roberto Quercia

University of North Carolina (UNC) at Chapel Hill – Department of City and Regional Planning

Melissa B. Jacoby

University of North Carolina (UNC) at Chapel Hill
– School of Law

Ling Wang

University of North Carolina (UNC) at Chapel Hill

Huifang Zhao

University of North Carolina (UNC) at Chapel Hill

October 23, 2013

Abstract:

Filing for bankruptcy is the primary legal mechanism by which homeowners in foreclosure can exert control over ownership of their home, yet little is known about the interplay between bankruptcy chapters, mortgage servicers, state foreclosure laws, and home foreclosure auctions. We analyze 4,280 lower-income homeowners in the United States who were more than 90 days late paying their 30-year fixed-rate mortgages. Two dozen organizations serviced these mortgages and initiated foreclosure between 2003 and 2012. We identify wide variation between mortgage servicers in their likelihood of bringing the property to auction. We also show that when homeowners in foreclosure filed for bankruptcy, foreclosure auctions were 70% less likely. Chapters 7 and 13 both reduce the hazard of auction, but the effect is five times greater for Chapter 13, which contains enhanced tools to preserve homeownership. Bankruptcy’s effects are strongest in states that permit power-of-sale foreclosure or withdraw homeowners’ right-of-redemption at the time of auction.

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Yves Smith on $13B JPMorgan Settlement: Deal Fails to Ease Pain Of Foreclosed Homeowners

Yves Smith on $13B JPMorgan Settlement: Deal Fails to Ease Pain Of Foreclosed Homeowners

Democracy NOW-

Interview with financial analyst and writer Yves Smith, we look at who wins and loses with the JPMorgan Chase settlement. While the New York Post accused the Obama administration of “robbing” JPMorgan, Smith breaks down how much the nation’s largest bank will actually have to pay.

[DEMOCRACY NOW]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD2 Comments

Merrill Lynch, J.P. Morgan Securities Among Lenders in FNF Financing to acquire Lender Processing Services, Inc. (“LPS”)

Merrill Lynch, J.P. Morgan Securities Among Lenders in FNF Financing to acquire Lender Processing Services, Inc. (“LPS”)

ABL Advisor-

Fidelity National Financial, Inc., a leading provider of title insurance, mortgage services and diversified services, announced the completion of the amendment of its existing $800 million senior unsecured revolving credit facility (“credit facility”) and the amendment of its $1.1 billion delayed-draw term loan (“term loan”) and the signing of a commitment letter (“bridge commitment letter”) that provides for an up to $800 million short-term loan (“bridge loan”). The amendments of the credit facility and the term loan and the bridge commitment letter are all related to FNF’s previous announcement concerning the agreement (“merger agreement”) to acquire Lender Processing Services, Inc. (“LPS”).

Among other changes, the amendments to the credit facility and term loan permit FNF to incur the indebtedness in respect of the bridge loan and incorporate other technical changes to describe the structure of the LPS acquisition.

[ABL ADVISORS]

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Posted in STOP FORECLOSURE FRAUD1 Comment

DAVIES v DEUTSCHE BANK NATIONAL TRUST COMPANY | Ninth Circuit Petitioner – MOTION FOR CERTIFICATION OF QUESTIONS TO NEW YORK STATE COURT OF APPEALS

DAVIES v DEUTSCHE BANK NATIONAL TRUST COMPANY | Ninth Circuit Petitioner – MOTION FOR CERTIFICATION OF QUESTIONS TO NEW YORK STATE COURT OF APPEALS

Docket No. 1260003

IN THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

BRIAN W. DAVIES, as Plaintiff-Appellant,

V.

DEUTSCHE BANK NATIONAL TRUST COMPANY, as Trustee for
Indymac Residential Asset Securitization Trust 2007-A5, under the
Pooling and Servicing Agreement Dated March 1, 2007, Defendant-
Appellee.

MOTION FOR CERTIFICATION OF QUESTIONS TO
NEW YORK STATE COURT OF APPEALS

Appeal from Decisions of the:

  •  Bankruptcy Appellate Court of the Ninth Circuit, No. 11-1221.
  •  Bankruptcy Court of the C.D. Cal. Case No. AP 01-01001.

A California Appeals Court determined that a Plaintiff [nonparty to PSA]
has standing to challenge a securitized trust’s ownership. See Glaski v. Bank of
America, N.A., 218 Cal. App. 4th 1079 (2013) which held:

“We conclude that a borrower may challenge the securitized
trust’s chain of ownership by alleging the attempts to transfer the
deed of trust to the securitized trust (which was formed under N.Y.
law) occurred after the trust’s closing date. Transfers that violate
the terms of the trust instrument are void under New York law, and
borrowers have standing to challenge void assignments of their
loans even though they are not a party to, or a third party
beneficiary of, the assignment agreement.”

Pursuant to Article VI Section 3(b)(9) of the New York State
Constitution, the Plaintiff and Appellant, Brian Davies (“Appellant”) hereby
moves before this Court for an Order certifying the following questions to the
New York State Court of Appeals.

1. Does Appellant have standing to challenge Appellee, Deutsche
National Bank Trust Company’s (“Deutsche Bank”) failure to honor the
specific delivery, time sensitive, and transfer requirements for notes and
mortgages under the applicable Pooling and Servicing Agreement
(“PSA”), the governing document for the trust supposedly holding
Appellant’s note and mortgage?

2. Does New York law control the enforceability of Appellant’s note
and mortgage?

3. Did the delivery and transfer of the Appellant’s note to Appellee,
Deutsche Bank, as trustee, after the trust’s closing date render this transfer
“void” as opposed to “voidable”?

4. Did the assignment of the Appellant’s mortgage over two years
after the purported trusts closing and contrary to the mandates of 26
U.S.C. Section 860D, render this assignment “void” as opposed to
“voidable”?

5. Does the Appellant have the ability to challenge his loan with
Mortgage Electronic Registration Systems, Inc. (“MERS”) [not a party to
the PSA] when the purported assignment listed MERS as a nominee of a
non MERS member who was not a beneficial owner listed on MERS own
audit trail.

6. Does the Appellant have standing to challenge the securitization of
his mortgage?

7. How do the laws of New York, the Uniform Commercial Code, and
California contract and real estate laws prioritize in regards to the
Mortgage [Deed of Trust in California] and Note?

8. How is the security interest perfected prior to trust transfer, and
how is it perfected from the Seller [Indymac Bank, FSB] to the Depositor
[Indymac MBS] and to the Trustee [Deutsche Bank National Trust
Company as Trustee]?

9. Does the Uniform Commercial Code Section 3 control perfection
of a secured interest, i.e. does an endorsed note in blank, alone allow for
security perfection [security interest follows the note], or must more be
demonstrated to show ownership that is perfected?

Appellant respectfully submits that these issues will be determinative of
the pending Appeal, may be determinative of the entire action, and have not
been decided by the New York State Court of Appeals, the jurisdiction of the
controlling law. Accordingly, certification is appropriate pursuant to Article
VI Section 3(b)(9) of the New York State Constitution which provides:

The court of appeals shall adopt and from time to time may
amend a rule to permit the court to answer questions of New York
law certified to it by the Supreme Court of the United States, a
court of appeals of the United States or an appellate court of last
resort of another state, which may be determinative of the cause
then pending in the certifying court and which in the opinion of the
certifying court are not controlled by precedent in the decisions of
the courts of New York.

[…]

 

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