Everything is always much worse than what we know.
ABC-
Arson in America is much more common than is reported by the U.S. government, Scripps News found in a yearlong national investigation.
Most acts of arson in America go unreported to the federal government, the investigation found.
Scripps News conducted an audit of arson fires reported in 9 sample cities and uncovered an alarming rate of deliberate fires that were not reported to the National Fire Incident Reporting System – or NFIRS. Select a city below to see the discrepancy between what NFIRS said was arson and what a Scripps audit found.
IN THE DISTRICT COURT OF APPEAL FIRST DISTRICT, STATE OF FLORIDA
BARBARA STEVENS AND THOMAS STEVENS, AS RELATORS, Appellant,
v.
STATE OF FLORIDA and THE STATE OF FLORIDA through its DEPARTMENT OF REVENUE, GE MONEY BANK, a Federal Savings Bank; Mortgage Electronic Registration Systems, Inc.; U.S. Bank, National Association as Trustee for the Registered Holders of ABFC 2007-WMC1 Trust Asset Backed Funding Corporation Asset Backed Certificates, Series 2007-WMC1, Appellee.
Opinion filed November 20, 2013.
An appeal from the Circuit Court for Leon County. John C. Cooper, Judge.
Albert H. Mickler of the Law Offices of Mickler & Mickler, Jacksonville, for Appellant.
Pamela Jo Bondi, Attorney General, and Russell Kent, Special Counsel, Office of the Attorney General, Tallahassee; Jeff Atwater, Chief Financial Officer, Department of Financial Services, Tallahassee; Katherine E. Giddings and Thomas Range of Akerman Senterfitt, Tallahassee, and William Heller of Akerman Senterfitt, Ft. Lauderdale; Andrew Boese and Robert Brochin, Morgan Lewis & Bockius, LLP, Miami; Elizabeth J. Campbell of Locke Lord, LLP, Atlanta; P. Russell Perdew, Chicago; Andrew R. Louis, Bradley A. Marcus, and Matthew P. Previn, Buckley Sandler LLP, Washington, DC., for Appellee
PER CURIAM. Appellants Barbara Stevens and Thomas Stevens, as relators for the State of Florida, claim Appellees, various parties involved in the financing, sale, and securitization of mortgages, failed to pay Florida documentary sales taxes associated with certain assignments of mortgage notes. Appellants claim the State of Florida did not receive hundreds of thousands of dollars in tax revenue. They sought to hold Appellees accountable for this alleged failure under Florida’s False Claim Act (the FFCA).1 Pursuant to the FFCA, Appellants sought to recover financially for this. Appellants did not seek to recover any monies under section 213.30, Florida Statutes (the Tax Act). The trial court, however, found it lacked subject matter jurisdiction over this private action pursuing recovery for a failure to pay taxes. We agree with the trial court.
Generally, the Tax Act authorizes the Department of Revenue (DOR) “to compensate persons providing information” regarding the failure to pay taxes. § 213.30(1), Fla. Stat. (2011). And, since May 1, 2002,
[n]otwithstanding any other provision of law, this section is the sole means by which any person may seek or obtain any moneys as theresult of, in relation to, or founded upon the failure by another person to comply with the tax laws of this state. A person’s use of any other law to seek or obtain moneys for such failure is in derogation of this section and conflicts with the state’s duty to administer the tax laws.
§ 213.30(3), Fla. Stat. (emphasis added); see Ch. 2002-218, § 37, Laws of Fla. Through its authority to compensate, DOR has promulgated rules to administer this payment. See generally Fla. Admin. Code R. 12-18.001-.004. The determination of “compensation,” however, is at the sole discretion of DOR—“not to exceed ten percent . . . of the total amount of delinquent taxes, penalties, and interest collected as a result of the information provided.” Fla. Admin. Code R. 12-18.003(1). This statutory scheme creates a mandatory administrative process when taxes are involved.
The FFCA, on the other hand, permits private actions where a person knowingly presents a false claim for payment, knowingly makes or uses a false record or statement, or knowingly conceals or improperly avoids an obligation to pay the State of Florida. §§ 68.082(1)-(2), 68.083(2)-(3), Fla. Stat (2011). FFCA violations are subject to a “civil penalty . . . and [to] treble the amount of damages the state sustains because of the act of that person.” § 68.082(2), Fla. Stat. The FFCA additionally provides the person who initiated the litigation “at least 15 percent but not more than 25 percent of the proceeds of the action or settlement.” § 68.085(1), Fla. Stat. This statutory scheme affords a general ability to avail the judicial process for false claims presented to the State.
We are asked to construe, and harmonize if possible, the FFCA and Tax Act in relation to a claim of failure to pay Florida’s documentary stamp tax.
When construing a statute, the starting point must be the language, and the will of the legislature is paramount. See Dep’t of Revenue ex rel. Sherman v. Daly, 74 So. 3d 165, 166-67 (Fla. 1st DCA 2011). It is also key that any interpretation harmonize the laws, “for the Legislature is presumed to have intended that both laws are to operate coextensively and have the fullest possible effect.” Palm Beach Canvassing Bd. v. Harris, 772 So. 2d 1273, 1287 (Fla. 2000). A “well settled” way to harmonize laws is the canon that “a specific statute covering a particular subject area always controls over a statute covering the same and other subjects in more general terms.” See McKendry v. State, 641 So. 2d 45, 46 (Fla. 1994); Adams v. Culver, 111 So. 2d 665, 667 (Fla. 1959); Dep’t of Revenue ex rel. Sherman v. Daly, 74 So. 3d 165, 168 (Fla. 1st DCA 2011); 48A Fla. Jur. 2d Statutes § 185 (2013) (“Thus, a specific statute covering a particular subject area always controls over a statute covering the same and other subjects in more general terms.”); 48A Fla. Jur. 2d Statutes § 111 (2013) (directing use of “settled maxims and principles of statutory interpretation”). In this way, the specific statute is seen as an exception to the general statute. McKendry, 641 So. 2d at 46. Moreover, “[a] later promulgated statute should prevail as the last expression of legislative intent.” Id.
Applying the accepted construction canons here, the Tax Act precludes Appellants’ FFCA claim. First, the Legislature added the “sole means by which any person may seek or obtain any moneys” portion in 2002—some eight years after the enactment of the more general FFCA. Compare § 213.30(3), Fla. Stat., and Ch. 2002-218, § 37, Laws of Fla., with § 68.081, Fla. Stat. (2011), and Ch. 94-316, § 1, Laws of Fla. Thus, it can be presumed the Legislature knew of the FFCA and its broad, general nature when it enacted the more specific Tax Act covering the narrow subject of seeking “moneys” for “the failure by another person to comply with the tax laws of this state.” The Legislature further expressed its intent by declaring it was “in derogation” and “conflict[ed] with the state’s duty to administer the tax laws.” See § 213.30(3), Fla. Stat. (2011).
Second, the Tax Act covers the narrow and specific realm of recovering “moneys” for failure to comply with the tax laws. The FFCA covers the broad and general realm of civil penalties and damages along with private remuneration. And here, Appellants seek remuneration (i.e., “moneys”) for Appellees’ alleged failure to pay document stamp taxes—a specifically described “tax” covered by the Tax Act. Consequently, the Tax Act is but an exception to the general FFCA, and the trial court did not err in finding it did not have subject matter jurisdiction. The Tax Act, mandating a DOR procedure, provides the exclusive means by which a person may obtain “moneys.”
Thus, we agree the trial court lacked subject matter jurisdiction to address this claim. This determination is dispositive, making it unnecessary to address Appellant’s remaining issues. Accordingly, the trial court’s order dismissing Appellants’ action is AFFIRMED.
ROBERTS, CLARK, JJ., and MOSELEY, MARK W., ASSOCIATE JUDGE, CONCUR.
Have fun … Too much for me to cut and paste but it’s all there for your taken below.
UNITED STATES BANKRUPTCY COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA SANTA ANA DIVISION
In re TRUDY KALUSH, Reorganized Debtor.
____________________
TRUDY KALUSH, Plaintiff,
vs.
DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE OF THE INDYMAC INDX DEED OF TRUST LOAN TRUST 2005-AR12, DEED OF TRUST PASS-THROUGH CERTIFICATES, SERIES 2005-AR12, UNDER THE POOLING AND SERVICING AGREEMENT DATED JUNE 1, 2005; ONEWEST BANK, FSB; and DOES 1-100, Inclusive, Defendants.
SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF RICHMOND
THE BANK OF NEW YORK MELLON F/K/A THE BANK NEW YORK, AS SUCCESSOR TO JP MORGAN CHASE BANK, N.A., AS INDENTURE TRUSTEE, ON BEHALF OF THE HOLDERS OF THE TERWIN MORTGAGE TRUST 2006-6, ASSET-BACKED SECURITIES, SERIES 2006-6, Plaintiff
against
BARBARA PERRICONE A/K/A BARBARA ANN PERRICONE, SILVER FALCON PROPERTIES, LLC., CITY OF NEW YORK ENVIRONMENTAL CONTROL BOARD; CITY OF NEW YORK PARKING VIOLATIONS BUREAU; CITY OF NEW YORK TRANSIT ADJUDICATION BUREAU, ET AL., Defendants . Upon the foregoing cited papers, the Decision and Order on this Motion is as follows: Defendant Silver Falcon Properties moves for an order pursuant to CPLR 3211 (a)(5) to dismiss the cause of action for reformation based on statute of limitations, CPLR 3211 (a)(7) to dismiss for failure to state a cause of action, and pursuant to CPLR 3211 (a)(1) for dismissal based on documentary evidence. Defendant Barbara Perricone cross moves for an order pursuant to CPLR 3211 (a)(5) to dismiss the reformation claim based on statute of limitations and pursuant to CPLR 3211 (a)(7) to dismiss for failure to state a cause of action upon which relief can be granted. The motion and cross motion are granted.
Facts
This is a foreclosure action whereby plaintiffs seek to divest defendant Perricone of her equitable interest in the premises known as 1027 Hylan Boulevard, Staten Island, New York due to a default on the accompanying mortgage note. On or about April 6, 2006, defendant Perricone executed a mortgage on what the instrument describes as 1027 Hylan Boulevard, Staten Island, New York. The mortgage application filed in connection with the instrument states defendant Perricone’s current address as 1027 Hylan Boulevard and further identifies the same as the subject property address. The application indicates it is for a refinance loan originally acquired in 1977 for a cost of $60,000. Defendant Perricone is also the record owner of additional piece of land known as 131 Radcliff Road, Staten Island, New York. The Radcliff Road and Hylan Boulevard location are both listed on the application, with 131 Radcliff Road having an existing mortgage or lien of $752,172 and 1027 Hylan Boulevard having an existing $2,821 mortgage or lien. The mortgage itself contains a property description in the “Transfer Of Rights In The Property” section which states it is the first mortgage lien on the premises and identifies the street address as 1027 Hylan Boulevard. However, the legal description in “Schedule A” reads as follows:
BEGINNING at a point on the Northerly side of Radcliff Road distant 80 feet Westerly from the corner formed by the intersection of the Northerly side of Radcliff Road and the Westerly side of Briarcliff Road; RUNNING THENCE South 57 degrees 09 Minutes 19 seconds East, along the Northerly side of Radcliff Road 80 feet; RUNNING THENCE North 32 degrees 50 minutes 41 seconds East, 100 feet; RUNNING THENCE South 57 degrees 09 minutes 19 seconds West, 80 feet; RUNNING THENCE North 32 degrees 50 minutes 41 seconds East, 100 feet to the Northerly side of Radcliff Road to the point or place of beginning
The description also refers to the premises as 131 Radcliff Road, Staten Island, New York and identifies the block and lot as 3232 and 30, respectively. Plaintiffs contend this legal description was recorded with the mortgage in error and is not otherwise incorporated into the mortgage contract. To this end, they submitted defendant Perricone’s initial application and a different “Schedule” which reads as follows:
BEGINNING at a point on the Northerly side of Hylan Boulevard, distant 61.47 feet Westerly from the corner formed by the intersection of the Westerly side of Briarcliff Road and the said Northerly side of Hylan Boulevard;
RUNNING THENCE North 32 degrees 50 minutes 41 seconds East 97.14 feet to a point; THENCE South 67 degrees 55 minutes 43 seconds East 84.01 feet to a point; THENCE south 12 degrees 46 minutes 48 seconds West 101.83 feet to a point on the Northerly side of Hylan Boulevard; THENCE along the said Northerly side of Hylan Boulevard on a curve deflecting to the right having a central angle of 3 degrees 40 minutes 22 seconds a distance of 49.68 feet to the point or place of beginning
Plaintiff’s obtained the note in question via an assignment from Mortgage Electronic Registration Systems which was recorded with the Clerk of Richmond County on May 8, 2013. This assignment purported to transfer Block 3230 Lot 44 which describes the Hylan Boulevard premises and not the Radcliff Road Location. Plaintiffs thereafter filed this action seeking to 1) reform the legal description of the premises recorded with the mortgage and then 2) foreclose on the reformed mortgage. Plaintiff’s main contention is that defendant Perricone intended to mortgage the Hylan Boulevard premises. However, plaintiffs do not submit any affidavits that suggest the parties intent was to ever mortgage the Hylan Boulevard premises. Instead, they rely on the mortgage application which lists 1027 Hylan Boulevard as the subject premises and argue the legal description contained in “Schedule A” was inadvertently included during the closing process without providing evidence suggesting that the mortgagor intended to encumber the Hylan Boulevard location.
In defendant’s verified answer to the plaintiff’s complaint, defendant Perricone denied that 1027 Hylan Boulevard was the subject premises of the disputed mortgage. Defendants also submitted the affidavit of Mr. Achilles Gatanas, a mortgage loan processor for Real Estate Mortgage Network, who averred that he assisted defendant in obtaining the Home Equity line of credit and that defendant intended to mortgage the 131 Radcliff Road location. He further indicated that defendant Perricone had told him the loan documentation incorrectly identified 1027 Hylan Boulevard and wished the loan documentation be changed to reflect the Radcliff Road property. Thereafter, defendants filed a motion pursuant to CPLR 3212(a) (1), (5) and (7) seeking to dismiss the cause of action based on reformation inasmuch as they argue the evidence provided by plaintiffs was insufficient to suggest the mutual agreement of the parties was incorrectly expressed in the written agreement. Defendant Silver Falcon contends they have a money judgement on the 1027 Hylan Boulevard property entered by the Supreme Court, Kings County on May 29, 2012 and that plaintiff’s interest is limited solely to the Radcliff Road location inasmuch as the legal description filed with the mortgage at issue identifies that premises and omits the metes and bounds description of 1027 Hylan Boulevard.
Discussion
CPLR 3211(a)(7)
“A claim for reformation of a written instrument must be grounded upon either a mutual mistake or fraudulently induced unilateral mistake” contained within the recorded document. 1 This is because the purpose of reformation is to “restate the intended terms of an agreement” when the written agreement does not reflect the original intention of the parties.2 It is presumed that “a deliberately prepared and executed document manifests the true intentions of the parties” so much so that “the proponent of reformation is required to proffer evidence, which in no uncertain terms, evinces fraud or mistake and the intended agreement between the parties.”3 Motions based on CPLR 3211 (a)(1) and (a)(5) both require a cognizable claim before one may apply a defense based on documentary evidence or claim the action is untimely.4 Thus, it is proper to evaluate whether the plaintiff’s have stated a cause of action upon which relief may be granted first. A CPLR 3121(a)(7) motion predicated on the plaintiff’s failure to state a claim requires the court to “accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible inference, and determine only whether the facts as alleged fit within any cognizable legal theory.”5 While a court may consider evidentiary material submitted by a defendant, so long as the motion is not converted into one for summary judgement, and, “unless it has been shown that a material fact as claimed by the [plaintiff] to be one is not a fact at all and unless it can be said that no significant dispute exists,” dismissal is inappropriate.6 Although plaintiff’s complaint does not specify whether the alleged mistake in the legal description of the premises was based on either fraud, mutual mistake or a scriveners error, the liberal pleading standard allows the court to find the existence of any cognizable theory.
Reformation based on a scrivener’s error requires “proof of a prior agreement between parties” which was not accurately reduced to writing. If “the only mistake alleged is in the reduction of that agreement to writing,” then such an error may be corrected, no matter how it occurred.7 Here, plaintiff’s contend that “the description to Borrower’s other property was somehow inadvertently placed in and amongst” the closing papers such that the legal description referred to 131 Radcliff Road instead of accurately describing the intended premises of 1027 Hylan Boulevard. As stated in the facts, defendant Perricone’s verified answer to the plaintiff’s complaint denied that 1027 Hylan Boulevard was the subject premises of the disputed mortgage. The affidavit of Mr. Gatanas further erodes the plaintiff’s position since he indicated that defendant had told him the loan documentation incorrectly identified 1027 Hylan Boulevard and wished the loan documentation be changed to reflect the Radcliff Road property. Plaintiff’s have not submitted any evidence which would suggest the parties in fact agreed and intended that the Hylan Boulevard premises was the subject of the loan. Thus, it is clear that the requisite standard of showing prior agreement has not been met. As such, the equitable relief of reformation due to scrivener’s error is unavailable to the plaintiffs.8
Generally, where a written instrument fails to conform to an agreement between parties, a court will reform said instrument to conform it to the intentions of the parties provided the mistake concerns a fundamental assumption of the contract.9 However, reformation based on mutual mistake “requires proof, by clear and convincing evidence,” that the document incorrectly expresses the intentions of either party.10 “In the case of unilateral mistake, it must be alleged that one party to the agreement fraudulently misled the other, and that the subsequent writing does not express the intended agreement.”11 Claims for unilateral mistake cannot be substantiated by conclusory allegations but require pleading misrepresentation of a material fact, falsity, intent and deception.12 Here, it is clear that no cause of action for unilateral mistake has been made out in as much as the plaintiff’s complaint does not specify with any particularity the required elements.
As the legal description of a property contained within a document trumps a conflicting street address13, plaintiffs would need to establish that the intent of the mortgagor and mortgagee was to identify 1027 Hylan Boulevard as the subject premises and that this intent was not carried out in the ultimate memorialization of the agreement. Plaintiffs fail to provide any non-hearsay evidence other than an attorney affidavit which would suggest the intent of either party was to encumber the 1027 Hylan Boulevard premises. This is especially true considering defendant’s verified answer and affidavit of Mr. Gatanas which together indicate that defendant Perricone’s intent entering into the process was to mortgage the Radcliff Road premises. It would be improper to reform the deliberately executed document because plaintiff is unable to show exactly what was agreed upon by the parties and thus is unable to meet the heavy burden required to allow reformation.14 The plaintiff’s have failed to make out a cause of action based on any theory of reformation. Therefore, defendant’s motion based on CPLR 3211(a)(7) is granted.
CPLR 3211 (a)(5)
Assuming, arguendo, that plaintiffs have made out a viable cause of action for reformation, it is otherwise barred by the applicable statute of limitations period which is six years from the date the mistake was made.15 “On a motion to dismiss a complaint pursuant to CPLR 3211(a)(5) on statute of limitations grounds, the moving defendant must establish, prima facie, that the time in which to commence the action has expired.”16 According to plaintiff’s submissions, the mistake was made at the closing when the errant description of the premises inadvertently became part of the executed mortgage. As the closing took place in 2006, in order for the action to be timely filed, it must have initiated by 2012.
CPLR 3211 (a)(1)
To prevail on a CPLR 3212(a)(1) motion, a moving party must demonstrate that “the documentary evidence utterly refutes plaintiff’s factual allegations, conclusively establishing a defense as a matter of law.”17 In order to be considered documentary, the proffered evidence “must be unambiguous” and “essentially unassailable.”18 It is axiomatic that when presented with a discrepancy between the street address and legal description of a piece of property, the legal description controls.19 The legal description attached to the mortgage unequivocally refers to 131 Radcliff Road. Therefore, it trumps any conflicting street addresses contained in the documentation and would warrant dismissal based on CPLR 3211 (a)(1).
Foreclosure
Even though the action for reformation is hereby dismissed, plaintiff may still maintain their foreclosure action on the mortgage they do hold. In order to substantiate a foreclosure action, the plaintiff must establish that the defendant was a party to the mortgage and that she failed to make the required payments inasmuch as the essential elements of a cause of action for breach of a mortgage contract are “the existence of a contract, the plaintiff’s performance under the contract, the defendant’s breach of that contract, and resulting damages.”20 Here, plaintiff has submitted sufficient evidence to buttress their foreclosure claim. The record reveals the existence of a signed and executed mortgage, as well as a mortgage application signed by defendant on April 6, 2006 and required her to “make Minimum Payments” in one-hundred and twenty equal monthly installments until the maturity date of April 1st, 2026. Defendant was further required to pay the entire outstanding balance at the maturity date. The mortgage language also preserved the right of the lender to foreclose on the property by stating that default in payment may result in a loss of the secured premises. The information contained in the record indicates that a principal balance of $398,650.83 remained and that the last monthly installment payed was on August 5, 2011.
Furthermore, any foreclosure action would be timely inasmuch as the statute of limitations for an action “upon a mortgage of real property” is six years.21 This period begins to run “from the due date for each unpaid installment, or from the time mortgagee is entitled to demand full payment, or from the date the mortgage debt has been accelerated.”22 In other words, accrual of the limitations period only begins “when the claim becomes enforceable, i.e. when all elements of the [cause of action] can be truthfully alleged in a complaint.”23 Thus, an action for foreclosure would be timely until September 5, 2017, which is six years from the date of the first unpaid installment.
Accordingly, it is hereby:
ORDERED, that the motions and cross motions to dismiss The Bank Of New York Mellon’s foreclosure action made by Silver Falcon Properties, LLC and Barbara Perricone, respectively are granted.
ENTER, DATED: November 22, 2013 Joseph J. Maltese Justice of the Supreme Court
IN THE SUPERIOR COURT OF THE STATE OF ARIZONA IN AND FOR THE COUNTY OF MARICOPA
KENNETH MCLEOD and CAROL ANN MCLEOD, a married couple, Plaintiffs,
vs
NANCY PERRY et. al. Defendants.
This matter, having regularly come before the Honorable Kirby Kongable, based on Plaintiff s Application for Entry of Default and Affidavit of Default filed with the Clerk of the Court on September 18, 2008 against defendant Securitized Asset Backed Receivables LLC Trust 2007-NC2 (“SABR”) having been duly entered, and, the Plaintiffs Motion for Entry of Default filed with this Court on November 17th, 2008 the Court finds as follows:
1.Defendant SABR was properly served by personal service; 2.Defendant SABR failed to file an Answer or other responsive pleading; 3.Plaintiffs are the owner of the subject property pursuant to a Joint Tenancy Deed dated February 5, 2002 and filed with the Maricopa County Recorder on February 8, 2002 as document number 20020140427.
IT IS HEREBY ORDERED, ADJUDGED AND DECREED as follows:
That the subject property is hereby awarded to, and title quieted in favor of Plaintiffs Kenneth McLeod and Carol Ann McLeod. The subject property is located at 2538 East Virgo Place, Chandler AZ 85249 and described as follows:
1. Lot One Hundred Fourteen (114), Circle G at Riggs Homestead Ranch Unit III, according to the plat of record in the office of the County Recorder ofMaricopa County, Arizona, in Book 421 ofMaps, Page 10 and Certificate of Correction Recorded as 1997-192959, of Official Records.
2. That Defendant SABR is permanently enjoined and prohibited from recording any documents affecting or purporting to affect title of the subject property; and, any acts or recordings now or in the future by Defendant SABR relating to the subject property shall be of no force or effect.
3. The Court has expressly determined there is no just reason for delay and expressly directs entry of this final Judgment as set forth herein. DONE IN OPEN COURT this 24 day of November, 2008.
A federal judge has dismissed a lawsuit filed by 14 Kentucky county attorneys against a mortgage registration firm.
U.S. District Court Judge Henry Wilhoit Jr. said Boyd County Attorney Phillip Hedrick and others lacked statutory standing to sue the Virginia-based Mortgage Electronic Registration Systems, known as MERS.
Hedrick was not immediately available for comment.
[…]
Conway spokeswoman Allison Martin said Tuesday that Conway’s lawsuit against MERS is “active in Franklin Circuit Court. We are awaiting two rulings on motions that were filed back in the summer.”
APOSTOLIC EXHORTATION EVANGELII GAUDIUM OF THE HOLY FATHER FRANCIS
TO THE BISHOPS, CLERGY,
CONSECRATED PERSONS
AND THE LAY FAITHFUL
ON THE PROCLAMATION OF THE GOSPEL
IN TODAY’S WORLD
Vatican-
No to a financial system which rules rather than serves
57. Behind this attitude lurks a rejection of ethics and a rejection of God. Ethics has come to be viewed with a certain scornful derision. It is seen as counterproductive, too human, because it makes money and power relative. It is felt to be a threat, since it condemns the manipulation and debasement of the person. In effect, ethics leads to a God who calls for a committed response which is outside of the categories of the marketplace. When these latter are absolutized, God can only be seen as uncontrollable, unmanageable, even dangerous, since he calls human beings to their full realization and to freedom from all forms of enslavement. Ethics – a non-ideological ethics – would make it possible to bring about balance and a more humane social order. With this in mind, I encourage financial experts and political leaders to ponder the words of one of the sages of antiquity: “Not to share one’s wealth with the poor is to steal from them and to take away their livelihood. It is not our own goods which we hold, but theirs”.[55]
58. A financial reform open to such ethical considerations would require a vigorous change of approach on the part of political leaders. I urge them to face this challenge with determination and an eye to the future, while not ignoring, of course, the specifics of each case. Money must serve, not rule! The Pope loves everyone, rich and poor alike, but he is obliged in the name of Christ to remind all that the rich must help, respect and promote the poor. I exhort you to generous solidarity and a return of economics and finance to an ethical approach which favours human beings.
David J. Reiss, Brooklyn Law School Bradley T. Borden, Brooklyn Law School Joshua Stein, Joshua Stein PLLC
Abstract
In mid-2013, Professors Bradley T. Borden and David J. Reiss published an article in the American Bar Association’s PROBATE & PROPERTY journal (May/June 2013, at 13), about the disconnect between the securitization process and the mechanics of mortgage assignments. The Borden/Reiss article discussed potential legal and tax issues caused by sloppiness in mortgage assignments.
Joshua Stein responded to the Borden/Reiss article, arguing that the technicalities of mortgage assignments serve no real purpose and should be eliminated. That article appeared in the November/December 2013 issue of the same publication, at 6.
Stein’s response was accompanied by a commentary from Professors Borden and Reiss, which also appeared in the November/December 2013 issue, at 8.
Suggested Citation
David J. Reiss, Bradley T. Borden, and Joshua Stein. “Dirt Lawyers and Dirty REMICs: A Debate” Probate & Property (2013).
Most of the time the main lender was also the second.
Reuters-
U.S. borrowers are increasingly missing payments on home equity lines of credit they took out during the housing bubble, a trend that could deal another blow to the country’s biggest banks.
The loans are a problem now because an increasing number are hitting their 10-year anniversary, at which point borrowers usually must start paying down the principal on the loans as well as the interest they had been paying all along.
More than $221 billion of these loans at the largest banks will hit this mark over the next four years, about 40 percent of the home equity lines of credit now outstanding.
On Wednesday, when most people are calculating how early they can slip out of work and begin their Thanksgiving festivities, an awful lot of high-priced New York lawyers will be fighting for seats at 27 Madison Avenue, where the New York Appellate Division, First Department, hears appeals. Billions of dollars of claims for breaches of representations and warranties on mortgage-backed securities hang on what the state appeals court decides about the time limits for these suits. Does the clock start ticking when the securities are issued and representations about underlying mortgage loans take effect? Or does New York’s six-year statute of limitations begin running only when the MBS seller refuses to repurchase loans that breach its contractual assurances? A five-judge appellate panel will confront the issue Wednesday in a case called Ace Securities v. Deutsche Bank Structured Products. The courtroom should be packed with lawyers and clients on both sides of New York’s sprawling MBS put-back litigation docket, who are hoping for clues about what the appeals court will decide.
In an effort to protect their record profits, banks might soon charge you for the privilege of having a savings account.
I know what you’re thinking: Banks already charge customers outrageous fees for the privilege of having bank accounts. But if the Federal Reserve dares to try and help the economy by cutting a special interest rate it pays banks, fees could get even more outrageous, the Financial Times reports (subscription only). Such a move by the Fed would lose banks some easy money, and they could take the difference out of their customers’ hides.
The Fed is desperately trying to find ways to dial back on its $85 billion per month in bond purchases, an extreme stimulus program known as “quantitative easing,” while still supporting the economy. One possible approach would be to stop paying banks a tiny interest rate for money they store at the Fed for safekeeping. The idea being that banks would be more inclined to put money to work with lending and other stuff that helps the economy.
DA 12-0629 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 354
TROY A. PILGERAM and TERESA A. PILGERAM, husband and wife, Plaintiffs and Appellants,
v.
GREENPOINT MORTGAGE FUNDING, INC., a California corporation; COUNTRYWIDE HOME LOANS, INC., a Texas corporation; MANN MORTGAGE, LLC, a Montana limited liability company; and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., an Iowa Corporation, Defendants and Appellees.
APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DV 09-948A
Honorable Ted O. Lympus, Presiding Judge
COUNSEL OF RECORD: For Appellant: Eric Hummel, Attorney at Law, PLLC; Kalispell, Montana W. Jeff Barnes (argued), W.J. Barnes, P.A.; Boca Raton, Florida
For Appellee: Charles K. Smith, Poore, Roth & Robinson, P.C.; Butte, Montana Robert J. Pratte (argued), Brent R. Lindahl, Fulbright & Jaworski, L.L.P.; Minneapolis, Minnesota
Argued and Submitted: September 25, 2013 Decided: November 25, 2013 Filed: __________________________________________
Justice Michael E Wheat delivered the Opinion of the Court.
¶1 Troy A. Pilgeram and Teresa A. Pilgeram (the Pilgerams) appeal from the orders of the Eleventh Judicial District Court, Flathead County, granting GreenPoint Mortgage Funding, Inc., Countrywide Home Loans, Inc., and Mortgage Electronic Registration Systems, Inc.’s (the Lenders’) motion for summary judgment and denying the Pilgerams’ motion to amend judgment. We reverse.
¶2 The dispositive issue on appeal is: Did the District Court err in granting the Lenders’ motion for summary judgment?
BACKGROUND
¶3 On September 7, 2006, the Pilgerams obtained a fixed rate home loan from Mann Mortgage (Mann) for $512,000 and executed a deed of trust (DOT) naming Citizen’s Title & Escrow trustee and Mann lender. Also on September 7, 2006, the Pilgerams signed a promissory note, which Mann endorsed to GreenPoint Mortgage Funding, Inc., (GreenPoint) on the same day.
¶4 The DOT provided that the promissory note could be sold without advance notice to the borrower. The DOT also provided that the loan services entity could be changed with written notice to the borrower. Pursuant to the promissory note, the Pilgerams waived their rights of presentment and notice of dishonor. Mortgage Electronic Registration Systems, Inc., (MERS) was not named in the promissory note but was identified in the DOT as “[t]he beneficiary of this Security Instrument . . . solely as a nominee for Lender and Lender’s successors and assigns.”
¶5 After several transfers of the interest in the DOT and promissory note, the Pilgerams defaulted on the note in April 2008. On July 29, 2008, MERS assigned its interest in the DOT to GreenPoint, which subsequently held the interests in both the promissory note and the DOT. Also on July 29, 2008, GreenPoint appointed and substituted Charles J. Peterson (Peterson) as the successor trustee. In November 2008, the Pilgerams received notice that GreenPoint was assigning the servicing rights to Countrywide effective December 1, 2008. In early December, the Pilgerams received notice from Countrywide that it was now the loan servicing entity and that future payments were to be made in the manner indicated in the notice. They also received notice that the loan was in default and had been accelerated and/or was in foreclosure. They were informed of the manner in which they could bring the note current.
¶6 Following a series of cancelled foreclosure sales, the Pilgerams filed a complaint in the District Court, alleging the Lenders lacked the authority to foreclose. The Lenders moved for summary judgment,1 and the District Court granted the motion on December 13, 2011, reasoning that MERS qualified as a “beneficiary” under Montana’s Small Tract Financing Act (STFA). On January 25, 2012, the Pilgerams filed a motion to amend judgment. The District Court denied this motion on April 20, 2012, because “the time for ruling expired 60 days after the motion was filed.” The Pilgerams subsequently filed an appeal in this Court in October 2012.
¶7 On appeal, the Pilgerams argue that the Lenders failed to meet their burden for summary judgment, and that the complicated assignments between and among MERS, GreenPoint, and Countrywide create genuine issues of material fact. The Lenders counter that the Pilgerams “fail to explain what facts are supposedly in dispute, and why they are material” (emphasis in original). The Lenders argue that the District Court correctly concluded there was “no impediment prohibiting Countrywide from foreclosing the loan and from instructing” Peterson, the successor trustee, “to sell the property to satisfy the default.”
¶8 The Pilgerams further argue MERS “is not, was not, and could never be the ‘beneficiary’ of the DOT.” Thus, it “had no authority to endorse a note which it never owned” or “to assign the Pilgerams’ deed of trust.” According to the Lenders, the DOT specifically provided that MERS was a beneficiary, allowing MERS to act as the agent of the lender and of the lender’s successors and assigns.
STANDARD OF REVIEW
¶9 We review de novo a district court’s grant or denial of summary judgment, applying the same criteria of M. R. Civ. P. 56 as a district court. Fisher v. State Farm Mut. Auto. Ins. Co., 2013 MT 208, ¶ 11, 371 Mont. 147, 305 P.3d 861. We review a district court’s conclusions of law to determine whether they are correct and its findings of fact to determine whether they are clearly erroneous. Brookins v. Mote, 2012 MT 283, ¶ 22, 367 Mont. 193, 292 P.3d 347 (internal citation omitted).
DISCUSSION
¶10 Did the District Court err in granting the Lenders’ motion for summary judgment?
¶11 The District Court granted summary judgment in favor of MERS solely on the grounds that MERS qualified as a beneficiary under the STFA. Although never addressed by the District Court, MERS asserts on appeal that they are special agent of the lender. We find that neither theory warrants summary judgment in favor of MERS.
¶12 Summary judgment “should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show there is no genuine issue as to material fact and that the movant is entitled to judgment as a matter of law.” Feller v. First Interstate Bancsystem, Inc., 2013 MT 90, ¶ 16, 369 Mont. 444, 299 P.3d 338 (citing M. R. Civ. P. 56(c)(3)). We construe all facts in favor of the non-movant in determining whether an issue of material fact exists. LaTray v. City of Havre, 2000 MT 119, ¶ 15, 299 Mont. 449, 999 P.2d 1010. If the movant demonstrates the absence of any material issue of fact and entitlement to judgment, the non-movant must establish with substantial evidence that a genuine issue of material fact does exist or that the movant is not entitled to prevail under the law. Semenza v. Kniss, 2008 MT 238, ¶ 18, 344 Mont. 427, 189 P.3d 1188; Prindel v. Ravalli County, 2006 MT 62, ¶ 19, 331 Mont. 338, 133 P.3d 165. Where the undisputed evidence concerning the relationship of parties is reasonably susceptible to but a single inference, the question of their legal relationship is one purely of law. Elkins v. Husky Oil Co., 153 Mont. 159, 166, 455 P.2d 329, 332 (1969); Estates of Milliron v. Francke, 243 Mont. 200, 204, 793 P.2d 824, 827 (1990); Semenza, ¶ 19. MERS is not a beneficiary under Montana’s STFA.
¶13 The Pilgerams argue that MERS had no authority to assign the Pilgerams’ DOT and request that we follow other jurisdictions that have determined MERS did not qualify as a beneficiary under their trust deed acts. The Lenders argue the Pilgerams ignore the express language of the trust deed and the plain language of the definition of beneficiary under § 71- 1-303(1), MCA. They further argue the Pilgerams disregard Montana authority holding MERS may serve as a beneficiary and have instead “cherry-picked” out-of-state authority.
¶14 This case raises an issue we have not yet addressed, namely whether Montana’s STFA permits MERS to be the designated beneficiary in a trust indenture.2 We are mindful this is an area of law that is still developing, with state and federal courts in different jurisdictions reaching different results. Federal court decisions in the District of Montana on these issues are instructive, as are the decisions of state district courts and state courts in other jurisdictions. We note that the District Court in this case was not the only Montana state district court to consider similar trust language and conclude that MERS qualified as a beneficiary. See Waide v. U.S. Bank Natl. Assn., DV-10-1763, slip op. at 10 (Watters, J., Yellowstone County Dist. Ct., June 28, 2011) (Court Doc. 8-5 at 1-17).
¶15 The STFA defines “beneficiary” as “the person named or otherwise designated in a trust indenture as the person for whose benefit a trust indenture is given or the person’s successor in interest, who may not be the trustee.” Section 71-1-303(1), MCA. “When interpreting a statute, we seek to implement the intention of the Legislature.” Williamson v. Mont. Pub. Serv. Commn., 2012 MT 32, ¶ 36, 364 Mont. 128, 272 P.3d 71 (citing § 1-2-102, MCA). We first look to the plain meaning of the statute’s words. Williamson, ¶ 36. If the language is clear and unambiguous, we will not resort to other means of interpretation. Williamson, ¶ 36 (citing Rocky Mt. Bank v. Stuart, 280 Mont. 74, 80, 928 P.2d 243, 246-47 (1996)). If the language is unclear or ambiguous, however, we resort to rules of statutory construction to discern and give effect to the intention of the legislature. Mont. Contractors Assn. v. Dept. of Hwys., 220 Mont. 392, 394, 715 P.2d 1056, 1058 (1986) (internal citations omitted).
¶16 We find that the definition of “beneficiary” is clear and unambiguous. The section lends itself to only one interpretation, namely that the beneficiary is “the person named . . . in a trust indenture as the person for whose benefit a trust indenture is given or the person’s successor in interest” (emphasis added). Section 71-1-303, MCA. The Lenders argue that MERS received a “benefit” from the DOT even though MERS did not lend the money and has no right to repayment. The alleged benefit is title to the property in the event of foreclosure. However, the DOT was not given for the benefit of MERS but for the benefit of the lender. MERS may ultimately obtain some benefit based on its relationship with the Lenders but that benefit is not granted by the DOT. See Edwards v. MERS, 300 P.3d 43, 49 (Idaho 2013) (“The deed of trust was not given for the benefit of MERS or to secure an obligation owing to MERS. It was given for the benefit of Lehman Brothers to secure the obligation owing to it. Although MERS may obtain a benefit based upon its relationship with Lehman Brothers, the deed of trust was not granted in order to provide MERS with that benefit.”).
¶17 The question of the statutory meaning of “beneficiary” does not depend on the parties’ intent or application of common law principles of contract to the DOT. Rather, “beneficiary” must be interpreted in the context of legislative intent and whether the STFA authorizes nonjudicial foreclosure only when certain statutory conditions are met. The meaning of “beneficiary” is determined by statute and is thus incorporated into the parties’ agreement and may not be otherwise altered. See, R. Lord, 11 Williston on Contracts § 30:24 (4th ed. 1999) (“[i]ncorporation of existing law may act to supersede inconsistent clauses purporting to define the terms of the agreement. For instance, where a statute regulates the amount the government is to pay for a particular service, the statute controls despite a contract between the government and the provider of the service agreeing to lay a lower rate.”). References to “beneficiary” throughout the STFA make it clear that the beneficiary is the entity to whom the secured obligation flows. Section 71-1-305, MCA (“For the purpose of applying the mortgage laws, the grantor in a trust indenture is deemed the mortgagor and the beneficiary is deemed the mortgagee.”); § 71-1-310, MCA (providing that a title insurer is liable to the beneficiary as stated); § 71-1-312(1), (3), MCA (referencing payments made to the beneficiary)). Here, the lender, not MERS, is the entity to whom the secured obligation flows.
¶18 Under the STFA, the beneficiary “may not be the trustee.” Section 71-1-303(1), MCA. A “trustee” is “a person to whom the legal title to real property is conveyed by a trust indenture . . . .” Section 71-1-303(7), MCA. GreenPoint appointed Peterson as the trustee, and the Pilgerams acknowledge “[i]t is undisputed that MERS is not the trustee.” However, the DOT identifies MERS as an entity holding legal title to real property and as the “nominee.” A nominee is “[a] party who holds bare legal title for the benefit of others or who receives and distributes funds for the benefit of others.” Black’s Law Dictionary 1149 (Bryan A. Garner ed., 9th ed., West 2009). MERS holds only legal title to real property and receives no benefit or secured obligation from the DOT. Since § 71-1-303(1), MCA, prohibits holders of legal title from assuming the beneficiary role, we conclude that MERS does not meet the STFA’s definition of “beneficiary.” As the Pilgerams argue, “MERS was not the lender, did not extend any credit, and is nothing more than an electronic tracking entity.”
MERS’ agency relationship with lenders is not sufficiently established to warrant
summary judgment.
¶19 We next address the Lenders’ argument that even if MERS is not a beneficiary, it may properly execute the documents in question because it is a special agent of the lender under § 28-10-102, MCA. That argument, raised by Appellants for the first time on appeal, is not sufficiently grounded in the record to satisfy the exacting standards of summary judgment.
¶20 It is well established that we do not consider new arguments or legal theories for the first time on appeal, even in the agency law context. State v. Ferguson, 2005 MT 343, ¶ 38, 330 Mont. 103, 126 P.3d 463; State v. Peterson, 2002 MT 65, ¶ 24, 309 Mont. 199, 44 P.3d 499; Schlemmer v. N. Cent. Life Ins. Co., 2001 MT 256, ¶ 22, 307 Mont. 203, 37 P.3d 63; Unified Indus., Inc. v. Easley, 1998 MT 145, ¶¶ 15-17, 289 Mont. 255, 961 P.2d 100; Snetsinger v. Mont. Univ. Sys., 2004 MT 390, ¶ 120, 325 Mont. 148, 104 P.3d 445 (Rice, J. & Gray, C.J., dissenting). In Service Funding v. Craft, 234 Mont. 431, 434, 763 P.2d 1131, 1133 (1988), appellants asserted the existence of a principle-agent relationship for the first time on appeal. This Court refused to “apply the law of agency in addition to that which was presented to the District Court.” Service Funding, 234 Mont. at 434, 763 P.2d at 1133. We further held that we are “unwilling to determine the existence of an agency relationship for the first time on appeal.” Service Funding, 234 Mont. at 434, 763 P.2d at 1133.
¶21 This restraint is “rooted in fundamental fairness to the parties . . . .” Gary & Leo’s Fresh Foods, Inc. v. State, 2012 MT 219, ¶ 16, 366 Mont. 313, 286 P.3d 1218; See also, Brookins, ¶ 24; Day v. Payne, 280 Mont. 273, 276-77, 929 P.2d 864, 866 (1996); Payne v. McLemore’s Wholesale & Retail Stores, 654 F.2d 1130, 1144 (5th Cir. 1981). It is fundamentally unfair for a party to withhold an argument at trial, take a chance on a favorable outcome, and then assert a separate legal theory when the trial strategy fails. Day, 280 Mont. at 276-77, 929 P.2d at 866. New issues should only be reviewed on appeal if extenuating circumstances justify the party’s failure to assert their legal theory at trial, such as the emergence of new precedent on the issue. Marcus Daly Memorial Hosp. Corp. v. Borkoski, 191 Mont. 366, 369, 624 P.2d 997, 999 (1981); State v. Carter, 2005 MT 87, ¶ 13, 326 Mont. 427, 114 P.3d 1001.
¶22 Appellees make no mention of an agency theory in any of their answers to the complaint or in their motions for summary judgment and the District Court made no finding of fact or conclusion of law concerning an agent-principal relationship. MERS submitted no evidence to support the agency relationship, nor have the Pilgerams been afforded an opportunity to refute that relationship with evidence of their own. Put simply, the record has not been developed to determine whether agency existed. This fact is especially troubling on summary judgment because a finding of agency requires consideration of all facts and circumstances between the parties, not merely the plain language of the document in question. Dick Anderson Constr., Inc., v. Monroe Prop. Co., 2011 MT 138, ¶ 22, 361 Mont. 30, 255 P.3d 1257. We cannot fault the Pilgerams for mishandling the agency argument in their reply brief and failing to raise sufficient evidence to defeat summary judgment on the agency issue. Instead, we find that these omissions demonstrate the patent unfairness that results when a party is ambushed with a new legal argument on appeal. We refuse to punish the Pilgerams for failing to raise a material fact concerning an issue that never existed in this litigation.
¶23 Nor do extenuating circumstances or new developments in the law justify MERS’ complacency in asserting an agency theory at the trial level. In March 2009, the Supreme Court of Arkansas determined that MERS was the “mere agent” of a lender. Mortgage Elec. Registration Sys. v. Southwest Homes of Ark., 301 S.W.3d 1, 3 (Ark. 2009). The Supreme Court of Kansas considered MERS’ agency relationship with lenders in August 2009. Landmark Nat’l Bank v. Kesler, 216 P.3d 158, 166 (Kan. 2009). Prior to either of those decisions, MERS’ agent status was evaluated by the bankruptcy courts of California and Idaho. In re Vargas, 396 B.R. 511, 516 (Bankr. C.D. Cal. 2008); In re Sheridan, 2009 Bankr. LEXIS 552, 14 (Bankr. D. Idaho 2009). After all of this litigation concerning MERS’ agent status, MERS’ motion for summary judgment in July 2010, makes no mention of an agency theory. MERS remained silent about this legal theory at the summary judgment hearing and, correctly predicting that the Court would disagree with the District Court’s reasoning, now asserts a new legal theory where its first one failed. This surprise appeal unfairly prejudices the Pilgerams’ position and is prohibited by precedent.
¶24 We are especially wary of new arguments in the context of summary judgment. We construe all facts in favor of the non-movant in determining whether an issue of material fact exists. LaTray, ¶ 15. If the movant demonstrates the absence of any material issue of fact and entitlement to judgment, the non-movant must establish with substantial evidence that a genuine issue of material fact does exist or that the movant is not entitled to prevail under the law. Semenza, ¶ 18; Prindel, ¶ 19. Because the issue was never raised at the trial level, the movant never demonstrated an absence of fact and entitlement to judgment on this issue, nor did the non-movant have a chance to present substantial evidence refuting that absence or entitlement.
¶25 With a more complete record, other courts have refused to recognize MERS’ agent status on summary judgment. A New York Bankruptcy Court refused to grant MERS agent status because its membership agreement with lenders contained no grant of authority to MERS. In re Agard, 444 B.R. 231, 252 (Bankr. E.D.N.Y. 2011). That membership agreement is notably absent from this record, even though a principal-agent relationship requires consideration of all facts and circumstances between the parties. Dick Anderson Constr., Inc., ¶ 22. The membership agreement could be dispositive in this case as actual authority requires the principal’s manifestation of assent to the agent’s action. Restatement (Third) of Agency § 3.01; § 28-10-201, MCA. The Supreme Court of Oregon also found that MERS had not sufficiently established its agency theory because no evidence showed “who ultimately holds the relevant interest in the notes and trust deeds, and whether that person and each of its predecessors in interest conferred authority on MERS to act on their behalves in the necessary respects.” Brandrup v. Recontrust, Co., 303 P.3d 301, 323 (Or. 2013). That evidence is missing here as well; the DOT only states that “Borrower understands and agrees” that MERS’ was a nominee of the lenders, not that the lenders themselves granted MERS authority.
¶26 But even if we decided the agency issue using only the language of the DOT, that evidence is reasonably susceptible to more than one inference, therefore, the legal relationship between MERS and the Lenders is not purely a question of law. Elkins, 153 Mont. at 166, 455 P.2d at 332; Estates of Milliron, 243 Mont. at 204, 793 P.2d at 827. MERS relies on the Supreme Court of Idaho’s conclusion that since MERS was identified as the nominee in the DOT, and one definition of nominee is “agent,” then MERS was indisputably an agent as a matter of fact and law. But “nominee” is subject to more than one interpretation based on the context of its use. Landmark Nat’l Bank, 216 P.3d at 166. While “nominee” may mean “agent,” another definition is the one discussed above; “a party who holds bare legal title for the benefit of others or who receives and distributes funds for the benefit of others.” Black’s Law Dictionary at 1149. This definition does not necessitate an agent-principal relationship as a matter of law. MERS appears to fit this definition, as the DOT itself states that “MERS holds only legal title to the interest granted by Borrower” (emphasis added) and MERS presumably holds this title for the benefit of the mortgagee/lender. Further, the Supreme Court of Oregon found that the deed of trust only obfuscated MERS’ agent status by first granting the narrow designation of “nominee” holding “only legal title” but then also granting the right to “exercise any or all” interests of the lender “as necessary.” Brandrup, 303 P.3d at 323. MERS relies on the same vague and confusing claim of authority as dispositive for the agency issue in this case. Especially when construed in the Pilgerams’ favor, the facts of this case are susceptible to a determination that MERS was the kind of nominee that is not an agent.
¶27 We refuse to grant a motion for summary judgment based on an issue never raised below and against a party that never had an opportunity to rebut the facts and law of the issue. We reverse and remand this case to the District Court for further findings of fact regarding MERS’ principal-agent relationship with the lenders.
/S/ MICHAEL E WHEAT
We concur: /S/ MIKE McGRATH /S/ LAURIE McKINNON /S/ BRIAN MORRIS
Securitization deals backed by rental income continue to attract market interest as more families turn to rentals over homeownership amid tighter lending standards.
Even firms not engaged in the space are rolling out initiatives, with single-family property manager, Colony American Homes (CAH), disclosing plans Monday to create a securitization deal backed by rental income.
The company will use single-family homes within its own property portfolios to support the transactions.
COMMONWEALTH OF MASSACHUSETTS NORTHEAST HOUSING COURT
FANNIE MAE Plaintiff
– v.-
RYAN P. CARVALHO et al Defendant
RULINGS AND ORDER
No. 12-SP-1039 After hearing in this post-foreclosure summary process case, the motion by the plaintiff [Doc.#31, 40, 43, 44] for summary judgment is allowed in part and denied in part and the cross motion by the defendants [Doc.#42, 45] is allowed.
I allow the plaintiffs motion to dismiss as a matter oflaw the defendants’ landlord-tenant law defenses and counterclaims [Doc.#14; Doc.#31A Exh.H] except insofar as they are interposed to setoff the plaintiffs claim for use and occupancy rent. The reason is that there was never any landlord tenant relationship between the plaintiff or its predecessor and the defendants. See my decisions in Wells Fargo Bank v. Amero , N.E.Hsg.Ct. No. 12-SP-0870 (May 21, 2012, and August 31, 2012) (as a matter of substantive law, without a leasehold or rental relationship between the parties, there is no warranty or covenant or contractual or quasi-contractual duty to repair as might support a defective housing “conditions” claim or defense under the habitability, quiet enjoyment, rent withholding, or other landlord tenant laws). See also, Deutsche Bank v. Gabriel, 81 Mass.App. 564, 570-573, 965 N.E.2d 875, 880-882 (2012) (as a matter of procedural law, “conditions” claims and defenses by former mortgagors are not available under Gen.L. c.239 §8A). On the present state of the record the defendants’ predatory lending and HAMP-based Chapter 93A and disability-based reasonable accommodation claims shall remain pending.
I allow the defendants’ motion to dismiss the plaintiffs claim for possession that is based on a foreclosure. The reason is that the foreclosure did not comply with the Massachusetts Foreclosure and Redemption of Mortgages Law, Gen.L. c.244 §35A, and therefore did not comply with the terms of the Mortgage which invokes the Statutory Power of Sale and “Applicable Law”) and Gen.L. c.183 §21 (“first complying with the terms of the mortgage and with the statutes relating to the foreclosure of mortgages by the exercise of a power of sale”).
1. Non-compliance
The mortgagee was required by the Massachusetts Foreclosure and Redemption of Mortgages Law, Gen.L. c.244 §35A(b), to “not accelerate maturity of the … mortgage obligation or otherwise enforce the mortgage because of a default … until at least 90 days after the date a written notice is given by the mortgagee to the mortgagor.” The notice was required by Gen.L. c.244 §35A( c)( 4) to include “the name and address of the mortgagee, or anyone holding thereunder” and by Gen.L. c.244 §35A(c)(5) to include “the name of any current and former mortgage broker or mortgage loan originator for such mortgage or note securing the residential property.”
The 90 days notice of default by “Wells Fargo Home Mortgage” dated June 17, 2010, [Doc.#24 Exh.2, 3; Doc.#42A Exh.KRC-3, TBV-l; Doc.#45A] stated “The current mortgagee is Wells Fargo Bank, N.A.” However, a triable issue of fact exists in this case whether Fannie Mae and
not Wells Fargo Bank then owned the mortgage.
Part of the defendants’ evidence that Fannie Mae and not Wells Fargo Bank owned the mortgage consists of findings in the “troubling” case ofJP Morgan Chase Bank, N.A. v. Butler, 40 Misc.3d 1205(A), 2013 WL3359283, 2013 N.Y. Slip Op. 51050(U) (Kings Co. Sup.Ct., Schack, J., July 5,2013), as to “numerous misrepresentations” and “continued subterfuge” about ownership of
the mortgage and note, stating that “Fannie Mae is the ‘Wizard of Oz,’ operating behind the curtain,
and the real owner of the subject … note and mortgage”; that “Fannie Mae evaded its responsibility
to be the real plaintiff in interest in the instant action or other foreclosure proceedings”; by “Fannie
Mae’s roadmap of how to inveigle and deceive a court”; that “Fannie Mae’s Servicing Guide, with
its deceptive practices to fool courts, does not supercede New York law”; and that the Guide which
authorized “an automatic cashless Fannie Mae transaction” in “bad faith” evidenced a “fraud upon
the court” and “unclean hands” by Fannie Mae, its servicer bank, and various counsel.
If in fact the notice of default dated June 17,2010, under Gen.L. c.244 §35A identifying “Wells Fargo Bank, N.A.” as the “current mortgagee” (or the Notice of Mortgage Foreclosure Sale dated September 29, 2011, under Gen.L. c.244 §14 identifying “Wells Fargo Bank, N.A.” as the “Present holder of mortgage” [Doc.#3IA Exh.B,C; Doc.#40A Exh.B]) misidentified the mortgage holder at the time of the notices or sale, such defect would unquestionably void the sale. See, the seminal “strict compliance” case of Roche v. Farnsworth, 106 Mass. (1 0 Browne) 509 (1871 ) (a power of sale must be executed in strict compliance with its terms and bare literal compliance is not enough; a mortgage sale was void where the notice of sale identified the original mortgagor and mortgagee but not the assignee and mortgage holder at the time of the notice and sale).
Regardless, the notice of default was otherwise defective. The notice dated June 17, 2010, was silent as to the existence of any mortgage broker although the Mortgage itself dated June 11, 2008, clearly stated “No Mortgage Broker was Involved with this Mortgage.” The notice stated “The name ofthe person that originated your loan is NI A” although the Mortgage clearly identified “Wells Fargo Bank, N.A.” as the original mortgagee. These defects and omissions rendered the foreclosure sale on November 30, 2011, [Doc.#3lA Exh.D; Doc.#40A Exh.C] and the assignment of bid [Doc.#31 A Exh.E; Doc.#40A Exh.D] and foreclosure deed dated December 5, 2011, [Doc.#31 A Exh.D; Doc.#40A Exh.C] invalid and ineffectual.
See, Eaton v. Federal National Mortgage Ass’n, 462 Mass. 569, 579-581, 969 N.E.2d 1118, 1127 -1128 (2012) (“one who sells under a power [ of sale] must follow strictly [ statutory] tenns”); Bank of New York v. Bailey, 460 Mass. 327,332,951 N.E.2d 331,335 (2011) (“the judge may consider the former homeowner’s defense that the plaintiffs title is invalid because the foreclosure was not conducted strictly according to the statute”); U.S. Bank v. Ibanez, 458 Mass. 637, 646-647, 655, 941 N.E.2d 40, 49-50, 55-56 (2011) (“Recognizing the substantial power that the statutory scheme affords to a mortgage holder to foreclose without immediate judicial oversight, we adhere to the familiar rule that’ one who sells under a power [ of sale] must follow strictly its terms. If he fails to do so there is no valid execution of the power, and the sale is wholly void. “‘; “[ the] power of sale contained in mortgage ‘must be executed in strict compliance with its terms”‘; “what is surprising about these cases is not the statement of principles articulated by the court regarding title law and the law of foreclosure in Massachusetts, but rather the utter carelessness with which the plaintiff banks documented the titles to their assets. There is no dispute that the mortgagors of the properties in question had defaulted on their obligations, and that the mortgaged properties were subject to foreclosure. Before commencing such an action, however, the holder of an assigned mortgage needs to take care to ensure that his legal paperwork is in order. Although there was no apparent actual unfairness here to the mortgagors, that is not the point. Foreclosure is a powerful act with significant consequences, and Massachusetts law has always required that it proceed strictly in accord with the statutes that govern it. As the opinion of the court notes, such strict compliance is necessary because Massachusetts both is a title theory State and allows for extrajudicial foreclosure.”)
Decided on November 22, 2013 Supreme Court, Bronx County
Citibank N.A. AS TRUSTEE ON BEHALF OF BEAR STEARNS ALT-A TRUST PASS THROUGH 2007-3, Plaintiff,
against
Henry McCray, CITIBANK N.A. AS TRUSTEE FOR CERTIFICATEHOLDERS OF BEAR STEARNS SECOND LIEN TRUST 2007-1 MORTGAGE-BACKED CERTIFICATES 2007-1, CRIMINAL COURT OF THE CITY OF NEW YORK, CITY OF NEW YORK ENVIRONMENTAL CONTROL BOARD, and “JOHN DOE #1” through “JOHN DOE No.10”, the last 10 names being fictitious and unknown to the Plaintiff, the persons or parties intended being the persons or parties, if any, having or claiming an interest in or lien upon the mortgaged premises described in the verified complaint., Defendants.
35064/13
For Plaintiff: Cohn & Roth by Alexander Crul, Esq.
For Defendant:Henry McCray, pro se
Lizbeth González, J.
The underlying foreclosure action was filed by plaintiff Citibank N.A. on behalf of Bear Stearns Alt-A Trust Pass Through 2007-3 (“CitiBank”). Defendant Henry McCray is the owner of the mortgaged premises located at 2124 Vyse Avenue in Bronx County (“subject premises”). The self-represented defendant seeks dismissal of the action on standing grounds. In his affirmation in opposition, Citibank’s counsel requests that defendant’s motion be held in abeyance until the action is settled or released from the Bronx County Residential Foreclosure Part. By Order dated 6/28/13, Justice Robert E. Torres released the underlying action from the foreclosure conference part. No further submissions or applications have been filed.
Procedural History [*2]
Mr. McCray previously commenced an action against Colorado Federal Savings Bank (“CFSB”) and MERS as nominee for Colorado Federal Savings Bank (“MERS”) under Index No. 304749/2012 to discharge the first and second Mortgages for the subject premises as null and void. By Stipulation dated 8/23/12 and so-ordered on 8/29/12, Mr. McCray and defendant Colorado Federal Savings Bank agreed that:
1. Colorado FSB had no interest in the mortgages for 2124 Vyse Avenue, Bronx, New York, to wit, a mortgage in the amount of $475,000 recorded with the NYC City Register on 1/25/07 as City Register File No. 2007000047574 (“First Mortgage”) and a mortgage in the amount of $114,000 recorded on the same date as City Register File No. 2007000047575 (“Second Mortgage”), or the debt secured thereby.
2. Mr. McCray would discontinue the action against Colorado FSB with prejudice and amend the caption, thus leaving MERS as the sole defendant.
MERS filed the two McCray mortgages with the NYC City Register on 1/25/07. As the remaining defendant in the McCray action, MERS moved to dismiss the summons and complaint for failure to state a cause of action and on standing grounds because there was no justiciable controversy. By Decision and Order dated 9/11/12, Justice Lucindo Suarez granted the MERS motion to dismiss the action, stating inter alia:
In his complaint, plaintiff had alleged that the mortgages should be deemed nullities because CFSB held the notes and MERS held the mortgages.
In lieu of answering the complaint, MERS moves pursuant to CPLR 3211 (a)(3)(7) for dismissal on the grounds that the plaintiff fails to state a cause of action and that plaintiff lacks standing since there is no justiciable controversy…In support of the application, MERS submits copies of the two mortgages filed with the Office of the City Register in 2007. The mortgages, both dated January 11, 2007 and executed by the plaintiff, contain near identical wording stating that MERS acted solely as the nominee for CFSB. Whether MERS possessed both the notes and the mortgages at the time of recording does not negate MERS’ ability, as CFSB’s nominee, to record each mortgage. The fact that the note and the mortgage may have been separated appears to affect a mortgagee’s ability to foreclose and is not an indication that the mortgage lien itself is invalid…
[*3]
However, the fact that CFSB no longer possesses an interest in the debt does not invalidate the mortgages if the notes and the mortgages have been transferred or assigned to another entity, nor has plaintiff alleged that the debts have been discharged. The complaint lacks any other allegation on which a declaration deeming the subject mortgages null and void may be made.
Defendant McCray now moves to dismiss Citibank’s foreclosure action because it lacks standing. In opposition, Citibank’s counsel maintains that the plaintiff in this matter has standing to foreclose because he holds “the original Note.” The original Note, signed by the defendant and “endorsed in blank,” was allegedly delivered to and held by Citibank prior to the commencement of this action but there is no corroborating affidavit based on personal knowledge. Attached as exhibits to counsel’s affirmation are three Notes executed between Colorado Savings Bank and borrower Henry McCray: 1) an Adjustable Rate Note in the amount of $427,500; 2) an Interest-Only Addendum to Adjustable Rate Promissory Note that immediately superseded the initial Note’s payment schedule and calculation of interest rate, monthly payments and late charges; and 3) a Floor Rate Addendum to Note. Mr. McCray is the only signatory; all three Notes are dated 1/11/07. The holder of the second and third Notes is undisclosed.
Discussion
Citibank relies exclusively on the Second Department’s seminal decision in Bank of New York v Silverburg, 86 AD3d 274 (2d Dept 2011). The borrowers in Silverburg questioned the Bank of New York’s standing to commence a foreclosure action where MERS, its assignor, was listed for recording purposes as a nominee and mortgagee in the underlying mortgage instruments but was never the actual holder or assignee of the underlying Notes.
The Second Department describes the Mortgage Electronic Registration Systems, Inc. (“MERS”) as a system designed in 1993 by several large participants in the real estate mortgage industry to “streamline the mortgage process.” (Silverburg at 278.) By appointing MERS as their common agent on all mortgages registered in the MERS system through the payment of an annual fee, MERS members purport to electronically track ownership interests in residential mortgages; facilitate the transfer of loans into pools of other loans which were then sold to investors as securities; and avoid payment of mortgage recording fees to local governments. (Silverburg, id.) In emphasizing that a “mortgage is merely security for a debt or other obligation” that cannot exist independently of the debt or obligation, the Second Department noted that “the foreclosure of a mortgage cannot be pursued by one who has no demonstrated right to the debt.” (Silverburg at 280.) The appellate court accordingly reversed the lower court and dismissed the complaint against the borrowers on standing grounds as follows:
Here, the consolidation agreement purported to merge the two prior notes and mortgages into one loan obligation. Countrywide, as [*4]noted above, was not a party to the consolidation agreement…The plaintiff relies upon the language of the consolidation agreement, which provides that MERS was “acting solely as a nominee for (Countrywide) and (Countrywide’s) successors and assigns…For purposes of recording this agreement, MERS is the mortgagee of record.” However, as “nominee,” MERS’ authority was limited to only those powers which were specifically conferred to it and authorized by the lender…Hence, although the consolidation agreement gave MERS the right to assign the mortgages themselves, it did not specifically give MERS the right to assign the underlying notes, and the assignment of the notes was thus beyond MERS’ authority as nominee of agent of the lender. (Silverburg at 281.)
(A)ssuming that the consolidation agreement transformed MERS into a mortgagee for the purpose of recording – even though it never loaned any money, never had a right to receive payment of the loan, and never had a right to foreclose on the property upon a default in payment – the consolidation agreement did not give MERS title to the note, nor does the record show that the note was physically delivered to MERS. (Silverburg at 282.)
In sum, because MERS was never the lawful holder or assignee of the notes described and identified in the consolidation agreement, the corrected assignment of mortgage is a nullity, and MERS was without authority to assign the power to foreclose to the plaintiff. Consequently, the plaintiff failed to show that it had standing to foreclose. (Silverburg at 283.)
In the prior action filed by Mr. McCray, the borrower alleged that his two Mortgages should be deemed nullities because Colorado Savings held the Notes and MERS held the Mortgages; there, Judge Suarez determined that while the separation of the Notes and Mortgage did not itself invalidate the mortgage lien it would likely affect a mortgagee’s ability to foreclose.
In a foreclosure action, standing means entitlement to enforce the Note and Mortgage. A plaintiff in a foreclosure action has standing where it is both the holder or assignee of the Mortgage and the underlying Note at the time that the action was commenced. (OneWest Bank FSB v Carey, 104 AD3d 444 [1st Dept 2013]; Bank of New York Mellon Trust Co. NA v Sachar, 95 AD3d 695 [1st Dept 2012]; GRP Loan, LLC v Taylor, 95 AD3d 1172 [2nd Dept 2012].) In the prior McCray action, Judge Suarez found that MERS acted solely as nominee for CFSB in filing the two Mortgages. Here, counsel for Citibank states that he holds the initial Note but makes no reference to the Mortgages. The chain of custody is undisclosed. [*5]
Significantly, there is no proof that Citibank held both the Mortgages and the Notes when it commenced this action. Notwithstanding plaintiff’s representation that “should Defendant not be approved for a loan modification, Plaintiff will respond to the unsubstantiated allegations of the Defendant…and move this Court for Summary Judgment on the Complaint,” no further submissions or applications have been made.
After careful consideration and review, the defendant’s motion is granted for good cause shown. Citibank has no demonstrated right to the debt in the absence of a chain of custody and proof that the Mortgage and Notes were lawfully assigned to and held by Citibank prior to the commencement of this action. This Court accordingly determines that the plaintiff lacks standing to foreclose. The underlying action is dismissed. The defendant shall serve a copy of this Order with Notice of Entry upon the plaintiff within 30 days.
BONNIE R SIMMONS; CLIFFORD SIMMONS; HEATHER A SIMMONS; CAZENOVIA COLLEGE; NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE; “JOHN DOES’ and “JANE DOES”, said names being fictitious, parties intended being possible tenants or occupants of premises, and corporations, other entities or persons who claim, or may claim, an lien against the premises, Defendants.
Supreme Court Greene County All Purpose Term, November 8, 2013 Assigned to Justice Joseph C. Teresi
APPEARANCES: Rosicki, Rosicki & Associates Richard Fay, Esq. Attorneys for Plaintiff 2 Harvester A venue Batavia, New York 14020
Tal G. Rappleyea, Esq. Attorney for Defendant Clifford Simmons 4 Maple Lane, PO Box 793 Valatie, New York 12184
TERESI,J.:
Plaintiff commenced this proceeding to foreclose its mortgage on property located at 12229 State Route 23, Ashland, New York (hereinafter “the property”) and owned, in part, by Clifford Simmons (hereinafter “Simmons”). On this record it is uncontested that neither pursue a mutually agreeable resolution. In response, this Court issued a 90 day stay.
After the stay expired, on December 3, 2010 this Court issued a letter to both attorneys seeking a status update. Simmons’ attorney stated “Defendant Simmons and counsel believe matter to be settled since all ‘workout’ documents have been completed and executed. But no response has been received from Plaintiff.” Plaintiff’s attorney did not dispute such account. Rather, she stated: “following up with our client for affidavit in support as they are currently reviewing their procedures for executing same.” Plaintiff never updated their status after “following up with [their] client,” advised this Court that the parties’ settlement negotiations had· broken down, nor refuted Plaintiff’s allegation that this matter had “settled.”
Now, nearly three years later, Plaintiff makes the instant motion without explaining the circumstances surrounding the failed settlement negotiations. Instead, Plaintiff’s motion asserts CPLR §3408 compliance by alleging only that “a conference was held on August 12, 2010 pursuant to the requirements under CPLR 3408. That Plaintiff requests that it be able to proceed with its action herein as a settlement was unable to be reached.” Such conclusory statement does not establish Plaintiff’s compliance with its CPLR §3408(f) obligation to “negotiate in good faith.” Moreover, Plaintiff offered no excuse for their extensive delay.
In addition, Plaintiff failed to controvert Simmons’ proof of Plaintiff’s failure to negotiate in good faith. Simmons opposed Plaintiff’s motion with an affidavit, in which he recounted his compliance with Plaintiffs mortgage modification requirements. He alleged that after the August 12, 2010 conference he “immediately completed and forwarded the required modification application documents to the Plaintiffs. After not hearing back from the Plaintiffs, I called them on the phone several times but … never received a return call.” Plaintiff neither denies Simmons’ account nor offers an alternative explanation of the prior negotiations. Conspicuously absent from Plaintiff’s submission is any justification for its rejection of Simmons’ prior modification application. Instead, in reply Plaintiff alleges only that “Defendant was given a fair chance to seek a modification, under the court’s supervision.” Contrary to Plaintiff’s assertion, their failure to respond to Simmons’ modification application did not give him a “fair chance.” Rather, such unexplained non-response constitutes a violation of CPLR §3408(f)’s obligation to “negotiate in good faith.”
Moreover, it is uncontested that Plaintiff recently accepted, and is currently considering, Simmons’ re-filed modification application.
Accordingly, Plaintiff’s motion is denied without prejudice. Due to Plaintiff’s demonstrated failure to negotiate in good faith in this action, a new foreclosure settlement conference must be held at the Albany County Courthouse, located at 16 Eagle Street, Albany, New York, on December 17, 2013 at 8:30 am.
This Decision and Order is being returned to the attorneys for Simmons. 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. Counsel is not relieved from the applicable provision of that section respecting filing, entry and notice of entry.
So Ordered.
Dated: Albany, New York November 20, 2013
PAPERS CONSIDERED: 1. Notice of Motion, undated; Affirmation of Richard Fay, dated September 16, 2013; Affidavit of Darren Ollam, dated May 8, 2013, with attached unnumbered exhibits; Affirmation of Richard Fay, dated September 16, 2013; Affirmation of Richard Fay, dated September 16, 2013. . 2. Affidavit of Clifford Simmons, dated October 22, 2013; Affirmation ofTal Rappleya, dated October 22, 2013, with attached Exhibits A-C. 3. Affirmation of Catherine Gran, dated October 26, 2013, with attached Exhibit A.
footnote 1 Defendants Cazenovia College and New York State Department of Taxation and Finance both. served only a notice of appearance.
Using eminent domain to bail out underwater homeowners won’t fix all Irvington’s problems, but Mayor Wayne Smith thinks anything that can help some residents of his economically struggling township is worth trying.
“It’s not a panacea,” Smith said. “But it looks like it could help some people.”
Irvington is the second municipality in the country to declare its intent to use eminent domain to purchase homes in foreclosure, behind Richmond, Calif. Support for the tactic is gaining traction nationwide in municipalities besieged by foreclosures. Irvington’s neighbor Newark, as well as Brockton, Mass., Chicago, and Yonkers, N.Y., have floated or are studying the idea.
The MERS System versus the County Recordation System
Extract Systems-
MERS® is an acronym for Mortgage Electronic Registration Systems, Inc. It was envisioned in 1993 by the major banks who sought to securitize residential mortgage loans on Wall Street through simple data entry, bypassing the county recordation process and fees. The initial MERS mortgage is recorded in the County Clerk’s office with “Mortgage Electronic Registration Systems, Inc.” named as the lender’s nominee or mortgagee of record on the instrument. During the lifetime of the mortgage, the beneficial ownership interest or servicing rights may be transferred among MERS members (MERS assignments), but these assignments are not publicly recorded.
MERS claims to have involved itself in over 70-million mortgages in America and currently boasts over 30-million mortgages currently operating in its electronic database. For all intents and purposes, MERS is a computer. The MERS business model operates in part from this computer system, which is 100% owned by the MERSCORP Holdings, Inc.
In a packed courtroom, 52-year-old Ernie Tertelgte told the judge “I am a living man protected by natural law and I have the right to forage for food when I am hungry… You are trying to create a fictitious, fraudulent action.”
An overhaul of Fannie Mae and Freddie Mac continues to draw chatter in Washington, prompting a number of people to break long-held silence on the legacy of the government-sponsored enterprises.
Adding his voice to the conversation is former Fannie Mae CFO Timothy Howard, who was ousted in late 2004 along with then-CEO Franklin Raines. Howard, who spent 15 of his 22 years at Fannie Mae running its mortgage investment portfolio, is releasing a book Dec. 2, “The Mortgage Wars,” to present his view of what burst the housing bubble and created the 2008 financial crisis.
A Central Indiana family is about to lose its home, because it says the lender it’s using made a big mistake.
Leigh Anne Essex called Fox 59 after she tried everything to keep her Cumberland home. Her family’s nightmare began when her husband lost his job. Unemployed for nine months, Essex said the family was facing a huge financial crisis.
Essex said she got with her lender, Chase, and worked out a loan modification plan.
”The agreement was that we would go into a three-month trial payment plan and upon making the three payments on time we would be considered current and everything would be up to date and we’d be back on track,” she explained. It was a huge relief.
A man was killed in a house fire in Dania Beach on Wednesday.
Friends identified the man as Tad Vaughn, and authorities said they believe he killed himself.
“I was standing in front of his house before the fire department got here,” neighbor Gloria Lawson said. “I had no idea there was such danger, imminent danger.”
Outside the front and back doors, numerous propane tanks were found. If Broward Sheriff Fire Rescue didn’t respond as fast as it did, there could have been multiple explosions, authorities said.
![Man facing eviction on a foreclosed home killed himself on day he was to vacate [VIDEO]](https://stopforeclosurefraud.com/wp-content/themes/gazette/thumb.php?src=wp-content/uploads/2013/11/HouseExplosion1.jpg&w=100&h=57&zc=1&q=90)
Recent Comments