dinsfla | FORECLOSURE FRAUD | by DinSFLA

Author Archives | dinsfla

In one chaotic courtroom, free counselors and attorneys have saved 11,000 Philly homes from foreclosure

In one chaotic courtroom, free counselors and attorneys have saved 11,000 Philly homes from foreclosure

Philly-

Two months and 13 days before Linda DaCosta stepped into Courtroom 676 in Philadelphia City Hall, the single mom of twin girls answered a knock she never expected.

It happened on a Sunday, just before dinner, on one of those crisp April days that made her love West Philadelphia. Inside her newly renovated condo, her grade-school-age girls were watching TV. DaCosta, a 41-year-old nurse, had joined in, taking a reprieve from divorce filings, night shifts, and job applications that had consumed her for the last year.

Then came the knock and the doorbell, buzzing again and again. A man was outside, holding a stack of foreclosure documents. DaCosta was being served.

[PHILLY]

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



Posted in STOP FORECLOSURE FRAUD0 Comments

Jury awards Garland woman $755,000 in lawsuit alleging foreclosure fraud

Jury awards Garland woman $755,000 in lawsuit alleging foreclosure fraud

She purchased her home in 2001, and paid on it for 14 years, but began to fall behind in 2015 and the home fell into foreclosure. Days after the foreclosure notice went public, someone knocked at her door, and offered to help sell her home.

WFAA-

Angelica Garcia is an immigrant from Honduras, a widow, and mother of two. Her version of the American dream was a one level brick home on a quiet street in Garland.

“I was very excited when I bought my house. To me, it was beautiful house,” she said in her native Spanish.

Garcia purchased her home in 2001, and paid on it for 14 years, but began to fall behind in 2015 and the home fell into foreclosure. Days after the foreclosure notice went public, someone knocked at her door, and offered to help sell her home.

[WFAA]

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



Posted in STOP FORECLOSURE FRAUD0 Comments

DYCK-O’NEAL, INC. v. Lanham, Fla: Supreme Court 2018 – section 702.06, Florida Statutes (2014), permits the lender or its assignee to bring its deficiency claim in a separate action at law

DYCK-O’NEAL, INC. v. Lanham, Fla: Supreme Court 2018 – section 702.06, Florida Statutes (2014), permits the lender or its assignee to bring its deficiency claim in a separate action at law

 

DYCK-O’NEAL, INC., Petitioner,
v.
HEATHER LANHAM, Respondent.

No. SC17-975.
Supreme Court of Florida.
July 5, 2018.
Application for Review of the Decision of the District Court of Appeal — Certified Direct Conflict of Decisions First District — Case No. 1D16-1624 (Gadsden County).

David M. Snyder, Tampa, Florida; Susan B. Morrison of Law Offices of Susan B. Morrison, P.A., Tampa, Florida; and Joshua D. Moore of Law Offices of Daniel C. Consuegra, Tampa, Florida, for Petitioner.

Rick A. Savage of Savage Law Office, PLLC, Tallahassee, Florida; and Jacob D. Flentke of Flentke Legal Consulting, PLLC, Orlando, Florida, for Respondent.

Natasha Shaikh of Shaikh & Shaikh, P.A., Orlando, Florida, Amicus Curiae.

LAWSON, J.

This case is before the Court for review of the decision of the First District Court of Appeal in Dyck-O’Neal, Inc. v. Lanham, 214 So. 3d 802 (Fla. 1st DCA 2017). The district court certified that its decision is in direct conflict with decisions of every other district court of appeal—Garcia v. Dyck-O’Neal, Inc., 178 So. 3d 433 (Fla. 3d DCA 2015), Dyck-O’Neal, Inc. v. Hendrick, 200 So. 3d 181 (Fla. 5th DCA 2016),Gdovin v. Dyck-O’Neal, Inc., 198 So. 3d 986 (Fla. 2d DCA 2016), and Dyck-O’Neal, Inc. v. McKenna, 198 So. 3d 1038 (Fla. 4th DCA 2016), regarding whether a complainant may pursue a separate action at law to recover a deficiency judgment when the foreclosure court reserved jurisdiction in its final judgment to adjudicate the deficiency claim. We have jurisdiction, see art. V, § 3(b)(3), Fla. Const., and hold that when a foreclosure court reserves jurisdiction to adjudicate a deficiency judgment claim but has not adjudicated the claim, section 702.06, Florida Statutes (2014), permits the lender or its assignee to bring its deficiency claim in a separate action at law. Because the First District held otherwise, we quash the decision below and approve the certified conflict decisions of the Second, Third, Fourth and Fifth District Courts of Appeal.

BACKGROUND

Heather Lanham’s residential property in Gadsden County, Florida, was foreclosed by final judgement. That judgment expressly reserved jurisdiction to rule on any future deficiency claim, although no one sought to adjudicate the claim in that forum. Instead, Dyck-O’Neal, Inc. (O’Neal), which was assigned the mortgage and note, filed a separate action at law seeking a deficiency judgment against Lanham. The trial court granted summary judgment for Lanham on an issue relating to the validity of O’Neal’s assignment, and O’Neal appealed. The First District quashed the trial court’s decision without reaching the assignment issue based upon its conclusion that the trial court lacked subject-matter jurisdiction over the suit under section 702.06, Florida Statutes (2014), because the foreclosure court had previously reserved jurisdiction to handle the deficiency claim. In so holding, the First District certified conflict with decisions from all four of the other district courts of appeal, and we accepted discretionary review.

ANALYSIS

The sole issue in this case is governed by section 702.06, Florida Statutes (2014), which every district court of appeal except for the First District has read as permitting a separate action at law for a deficiency judgment unless the foreclosure court has already granted or denied a deficiency claim. Questions of statutory interpretation are reviewed de novo. See Borden v. East-European Ins. Co., 921 So. 2d 587, 591 (Fla. 2006).

Section 702.06 reads in relevant part:

In all suits for the foreclosure of mortgages heretofore or hereafter executed the entry of a deficiency decree for any portion of a deficiency, should one exist, shall be within the sound discretion of the court. . . . The complainant shall also have the right to sue at common law to recover such deficiency, unless the court in the foreclosure action has granted or denied a claim for a deficiency judgment.

§ 702.06, Fla. Stat. (2014) (emphasis added).

“When the language of the statute is clear and unambiguous and conveys a clear and definite meaning, . . . the statute must be given its plain and obvious meaning.” Holly v. Auld, 450 So. 2d 217, 219 (Fla. 1984) (quoting A.R. Douglass, Inc. v. McRainey, 137 So. 157, 159 (Fla. 1931)). Here, the statute plainly allows the foreclosure court to adjudicate the deficiency claim but also gives the complainant “the right to sue at common law to recover such deficiency, unless the court in the foreclosure action has granted or denied a claim for a deficiency judgment.” (Emphasis added.) A reservation of jurisdiction is not a grant or denial of the claim. The foreclosure court would have only “granted or denied” the deficiency judgment if it had adjudicated the claim. Therefore, this statute plainly precludes the separate action only where the foreclosure court has actually ruled on the claim—as held by the Second, Third, Fourth and Fifth District Courts of Appeal.

In reaching a different result below, the First District relied on its prior decision in Higgins v. Dyck-O’Neal, Inc., 201 So. 3d 157 (Fla. 1st DCA 2016)See O’Neal, 214 So. 3d at 802. However, in Higgins, the First District examined this Court’s precedent interpreting an older version of section 702.06 that did not contain the “granted or denied” language. See Higgins, 201 So. 3d at 159-63. As correctly explained by the dissent in Higgins: “The clarity of the 2013 statutory language decides this case. . . . [and the cases relied upon by the majority of the First District panel are] immaterial because the 2013 statutory language at issue trumps whatever perceived inconsistency . . . [exists] with prior precedents.” Id. at 167 (Makar, J., dissenting).

CONCLUSION

We quash the decision below in O’Neal, disapprove Higgins, approve Garcia, Hendrick, Gdovin, and McKenna, and hold that section 702.06, Florida Statutes (2014), permits an independent action at law for a deficiency judgment when the foreclosure court has expressly reserved jurisdiction to handle a deficiency claim but has not actually decided the merits of the claim.

It is so ordered.

CANADY, C.J., and PARIENTE, LEWIS, QUINCE, POLSTON, and LABARGA, JJ., concur.

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DETERMINED.

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



Posted in STOP FORECLOSURE FRAUD0 Comments

Soule v. US Bank National Association | FL 2nd DCA – Without testimony based on such personal knowledge, the Bank’s only competent evidence was that the default letter had been prepared—not that it had been mailed.

Soule v. US Bank National Association | FL 2nd DCA – Without testimony based on such personal knowledge, the Bank’s only competent evidence was that the default letter had been prepared—not that it had been mailed.

 

STEVEN E. SOULE, Appellant,
v.
U.S. BANK NATIONAL ASSOCIATION, as trustee for BNC Mortgage Loan Trust 2007-1 Mortgage Pass-Through Certificates, Series 2007-1, Appellee.

Case No. 2D16-3231.
District Court of Appeal of Florida, Second District.
Opinion filed July 13, 2018.
Appeal from the Circuit Court for Pasco County; Kemba Lewis, Judge.

Mark P. Stopa of Stopa Law Firm, LLC, Tampa; and Latasha Scott of Lord Scott, PLLC, Tampa, for Appellant.

David S. Ehrlich of Blank Rome LLP, Fort Lauderdale, for Appellee.

BY ORDER OF THE COURT:

Appellant’s motion for rehearing is granted, the prior opinion dated May 2, 2018, is withdrawn, and the attached opinion is issued in its place. Because full relief has been granted by the panel’s ruling on the motion for rehearing, Appellant’s motion for rehearing en banc is denied as moot. Appellee’s motion to reconsider or strike the court’s order granting appellant’s appellate attorneys’ fees is denied.

VILLANTI, Judge.

Steven E. Soule appeals the final judgment of foreclosure entered in favor of U.S. Bank National Association, as trustee for BNC Mortgage Loan Trust 2007-1 Mortgage Pass-Through Certificates, Series 2007-1 (the Bank). While Soule raised a number of grounds for reversal of the final judgment, we reject all of his arguments except one relating to the sufficiency of the evidence to establish that the Bank complied with paragraph 22 of the mortgage by giving notice of the default to Soule. On this single basis, we reverse and remand for entry of an involuntary dismissal of the Bank’s case.

In November 2013, the Bank filed its foreclosure complaint against Soule based on his alleged failure to make his March 2011 payment and all subsequent payments. In his answer, Soule denied that the Bank had complied with all conditions precedent to bringing the action and alleged as an affirmative defense the Bank’s failure to comply with the notice provisions of paragraph 22 of the mortgage.

At trial, Ocwen employee Nena Kamman testified on behalf of the Bank. Ocwen was the servicer of Soule’s loan at the time of trial, but Ocwen had taken over servicing of the loan from Chase, and Chase was the servicer that had prepared and allegedly mailed the default letter pursuant to paragraph 22 in May of 2011. Kamman testified that she had never worked for Chase.

During trial, Kamman testified that the default letter was part of the business records that Ocwen received from Chase. She also testified to the boarding process for new loans that Ocwen obtained. As part of that testimony, she asserted that Ocwen would not have boarded a loan if there were any “red flags” related to the loan. She testified that such a “red flag” might arise if “there was any indication that a breach letter hadn’t been sent.” But she did not testify to how anyone at Ocwen would know whether a default letter that was imaged into Chase’s system had or had not been mailed or what information might be in Chase’s file to indicate that a default letter had not been mailed. She did testify that a default letter would not have been imaged into Chase’s system if it had not been mailed, but she admitted that she had never been trained in any of Chase’s procedures and she offered no testimony that would show that she had any personal knowledge of this alleged imaging procedure.

Both at trial and in this appeal, Soule argued that Kamman’s testimony was insufficient to establish that the default letter prepared by Chase had actually been mailed. Soule admitted that Kamman’s testimony was sufficient to permit the Bank to introduce the default letter into evidence; however, he argued that simply introducing the letter into evidence was insufficient to show that it was mailed. Relying on Eig v. Insurance Co. of North America, 447 So. 2d 377, 379 (Fla. 3d DCA 1984), Soule argued that the Bank had to introduce competent, substantial evidence of what Chase’s routine business practices were in order to rely on those practices to prove conformity therewith. And because Kamman did not have personal knowledge of Chase’s routine business practices concerning the mailing of default letters, her testimony could not provide competent, substantial evidence of those practices. Therefore, he argued, while the default letter itself was admissible, there was no evidence to prove that it was mailed and so the Bank’s case should be dismissed. The trial court rejected this argument, as initially did we.

At the time of trial and when this case was originally heard at oral argument, there was no law from this district on the issue of what foundational testimony was required to prove that a default letter had been mailed by a prior servicer. However, we recently issued an opinion addressing this exact issue in Spencer v. DiTech Financial, LLC, 43 Fla. L. Weekly D720 (Fla. 2d DCA Apr. 4, 2018). In that case, EverHome was the predecessor servicer to DiTech. Id. at D721. At the foreclosure trial, Ms. Knight, an employee of DiTech, testified that EverHome, as the prior servicer, had prepared and mailed the default letter to Spencer in 2010. Id. However, the testimony established that Ms. Knight had never worked for EverHome, had no personal knowledge of its practices or procedures for preparing and mailing default letters, had not read EverHome’s policies and procedures for preparing and mailing default letters, and had never spoken to anyone at EverHome about how this particular letter had been generated or mailed. Id. Moreover, the evidence showed that the loan was transferred to DiTech in 2014—four years after the default letter had been created and allegedly mailed. Id. In finding Ms. Knight’s testimony insufficient to prove that the default letter had been mailed, this court explained:

This evidence was insufficient to show that the default letter was actually sent. “The fact that a document is drafted is insufficient in itself to establish that it was mailed.” Allen v. Wilmington Tr., N.A., 216 So. 3d 685, 687-88 (Fla. 2d DCA 2017); see also Edmonds v. U.S. Bank Nat’l Ass’n, 215 So. 3d 628, 630 (Fla. 2d DCA 2017) (citing Allen with approval). Rather, “mailing must be proven by producing additional evidence such as proof of regular business practices, an affidavit swearing that the letter was mailed, or a return receipt.” Allen, 216 So. 3d at 688.

Testimony regarding a company’s routine business practices may establish a rebuttable presumption that the default letter was mailed. Id. (citing § 90.406, Fla. Stat. (2014)). But the witness must have personal knowledge of the company’s general mailing practice—meaning that the witness must be employed by the entity drafting the letters and must have firsthand knowledge of the company’s routine practice for mailing letters. See id.; Edmonds, 215 So. 3d at 630; see also CitiMortgage, Inc. v. Hoskinson, 200 So. 3d 191, 192 (Fla. 5th DCA 2016) (holding that there was sufficient evidence to establish mailing based on routine business practices where witness testified that she had personally observed coworkers generate breach letters and deliver them to the mail room to be collected by the postal service). Here, Ms. Knight admitted that she was never employed by EverHome and did not have firsthand knowledge of EverHome’s mailing practices as of the date the default letter was generated. Therefore, her testimony was insufficient to establish that the default letter was mailed.

Id. (emphasis added). And because Ms. Knight’s testimony was insufficient to establish that the default letter was mailed, this court reversed the final judgment and remanded for entry of an involuntary dismissal. Id.

The facts of this case are essentially on all fours with Spencer. Like DiTech, Ocwen here was a successor servicer that had not prepared or mailed the default letter. And Kamman, like Ms. Knight, worked for the successor servicer and had no personal knowledge of the mailing practices of the predecessor servicer. Therefore, while Kamman’s testimony was sufficient to lay the foundation to admit the letter as a business record, it was insufficient to prove that Chase had actually mailed the letter because Kamman had no personal knowledge of either that fact or Chase’s policies and practices for mailing. Without testimony based on such personal knowledge, the Bank’s only competent evidence was that the default letter had been prepared—not that it had been mailed. Therefore, for the same reasons we did in Spencer, we reverse the final judgment in this case and remand for entry of an involuntary dismissal.

Reversed and remanded for dismissal.

CASANUEVA and CRENSHAW, JJ., Concur.

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DETERMINED.

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



Posted in STOP FORECLOSURE FRAUD0 Comments

Trump’s Consumer Banking Lapdog Could Take Complaints Database Offline

Trump’s Consumer Banking Lapdog Could Take Complaints Database Offline

NBC-

Taxpayers have until midnight tonight to share concerns about an end to public access of a consumer banking complaint database — the latest in a series of moves by the Trump Administration to dismantle the Consumer Financial Protection Bureau.

That watchdog agency, also known as the CFPB, was created in the aftermath of the 2007 – 2008 financial crisis.  It takes and reviews complaints from consumers against banks, lenders, and other financial institutions.  In some circumstances, the CFPB has levied fines and other punishments against banks for anti-consumer practices.

A public database of consumer complaints can be viewed on the CFPB website.  It currently lists more than 1 million complaints — with more than 8,000 of those originating in the Bay Area.

[NBC]

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



Posted in STOP FORECLOSURE FRAUD0 Comments

California forced to give back $331 million stolen from home-owners

California forced to give back $331 million stolen from home-owners

American Thinker-

What if the bluest state in the country stole a third of a billion dollars from victims of chicanery and the media refused to notice?

I have been stunned at the lack of media coverage of California’s foiled robbery of almost a third of a billion dollars.  That’s right: under Governor Jerry Brown, the Great State of California helped itself to hundreds of millions of dollars – money that was supposed to go to home-owners – and you probably didn’t hear about it.

Bib Egelko of the San Francisco Chronicle was one of the few to cover this story, and it did not exactly generate nationwide headlines for some reason:

When California received $410 million in 2012 as part of a nationwide settlement with major banks accused of abusive foreclosures, Gov. Jerry Brown used $331 million to pay state agencies in housing and other programs to cover their deficits.

Now a state appeals court has ordered the money be used for its original intent: to help homeowners who suffered foreclosures.

The money was “unlawfully diverted” from a settlement fund that was designated for programs directly assisting homeowners, the Third District Court of Appeal in Sacramento said Tuesday.  A Sacramento County judge had reached the same conclusion but found he lacked authority to order the state to redirect the money, a finding the appeals court rejected.

[AMERICAN THINKER]

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



Posted in STOP FORECLOSURE FRAUD0 Comments

Fischer v. HSBC BANK USA, NATIONAL ASSOCIATION | FL 2nd DCA – we reverse the final judgment of foreclosure. Because the trial court explicitly found that there was no standing at the inception of the lawsuit, we remand for the trial court to enter an involuntary dismissal

Fischer v. HSBC BANK USA, NATIONAL ASSOCIATION | FL 2nd DCA – we reverse the final judgment of foreclosure. Because the trial court explicitly found that there was no standing at the inception of the lawsuit, we remand for the trial court to enter an involuntary dismissal

JAMES FISCHER, Appellant,
v.
HSBC BANK USA, NATIONAL ASSOCIATION AS TRUSTEE FOR DEUTSCHE ALT-A SECURITIES, INC., MORTGAGE LOAN TRUST, SERIES 2006-AR1; and DEBRA FISCHER, Appellees.

Case No. 2D16-5307.
District Court of Appeal of Florida, Second District.

Opinion filed July 6, 2018.
Appeal from the Circuit Court for Charlotte County; James R. Thompson, Judge.

Inger M. Garcia of Florida Litigation Group, P.A., Lighthouse Point; and Rachel M. Coe of Polaris Legal Group, Lighthouse Point, for Appellant.

Zina Gabsi of Bryan Cave LLP, Miami; and W. Bard Brockman of Bryan Cave LLP, Atlanta, Georgia, for Appellee HSBC Bank USA.

No appearance for remaining Appellee.

SILBERMAN, Judge.

James Fischer appeals a final judgment of mortgage foreclosure in favor of HSBC Bank USA, National Association, as Trustee for Deutsche Alt-A Securities, Inc., Mortgage Loan Trust, Series 2006-AR1 (HSBC), and contends that the trial court should have granted his motion for involuntary dismissal for lack of standing at inception. He contends that the trial court erred in taking judicial notice of the Third Amended Chapter 13 Plan in his bankruptcy proceedings and in preventing Fischer, based on the doctrine of judicial estoppel, from presenting a standing defense. We conclude that the judicially noticed bankruptcy documents do not show that Fischer is prohibited from opposing HSBC’s foreclosure action. Because the trial court determined that the original plaintiff lacked standing at the inception of the lawsuit, we reverse and remand for the trial court to enter an involuntary dismissal.

The promissory note was executed in 2005, and the original lender was First National Bank of Arizona. A mortgage on property located at 830 Bloxham Avenue, Punta Gorda, secured repayment of the note. On May 7, 2008, Residential Funding Company, LLC (RFC), filed its two-count complaint against Fischer for mortgage foreclosure and to reestablish a lost note. In 2014, the case was placed on inactive status due to a bankruptcy stay. After RFC gave notice of the Order Confirming Plan (the Order), the trial court granted RFC’s motion to reopen the foreclosure case.

Fischer then filed a verified motion to strike sham pleading on the basis that RFC did not have standing to file the complaint and contended that the complaint was falsely or fraudulently filed. RFC filed a motion to substitute HSBC as party plaintiff, and the trial court granted the motion. In 2016, HSBC voluntarily dismissed the lost note count.

The trial occurred on November 8, 2016, and the trial court prohibited Fischer from raising standing as a defense because the trial court determined, based on judicially noticed bankruptcy documents, that Fischer had surrendered the subject property in the bankruptcy. The trial court judicially noticed the Third Amended Chapter 13 Plan, the Order, and the Discharge of Debtor After Completion of Chapter 13 Plan. Paragraph I of the Third Amended Chapter 13 Plan is entitled “Surrender of Collateral/Leased Property.” It provides that “Debtor will surrender the following collateral/leased property no later than thirty (30) days from the filing of the petition unless specified otherwise in the Plan.” The property at “830 Bloxham Ave.” is one of the three properties listed as “Property/Collateral to be Surrendered” with the creditor for that property listed as “Ocwen Loan Svc.” Paragraph 4 of the Order provides that “[c]laims are allowed and security surrendered to creditors set forth in Exhibit `A.'” But Exhibit A does not list the Bloxham Avenue property or “Ocwen Loan Svc.” or HSBC. The Order provides that modifications to the plan, whether by order or in open court, are incorporated in the Order.

The trial court allowed Fischer to proffer some evidence on standing, and HSBC’s only witness, an employee of Ocwen Financial Servicing, admitted that it was his understanding that RFC did not own or hold the note at the time the lawsuit was filed. The note was not attached to the original complaint. The trial court found that the evidence failed to show that RFC had standing at inception but found that HSBC had standing at the time of trial. Fischer argued for an involuntary dismissal on the basis of lack of standing and other grounds. The trial court entered a final judgment of foreclosure in favor of HSBC.

Fischer contends that the trial court abused its discretion in taking judicial notice of the Third Amended Chapter 13 Plan when HSBC did not comply with the requirements for judicial notice. But regardless of whether judicial notice was proper, the bankruptcy documents that HSBC presented failed to show that Fischer actually surrendered the Bloxham property in his chapter 13 bankruptcy. Thus, the trial court erred in applying the doctrine of judicial estoppel to prevent him from presenting a defense of lack of standing.

The provisions of “a confirmed chapter 13 plan `bind[ ] the debtor and each creditor.'” In re Scott, 567 B.R. 847, 851 (Bankr. S.D. Fla. 2017) (alteration in original) (quoting 11 U.S.C. § 1327(a) (2012)). A “chapter 13 plan provides for the disposition of each piece of property, including whether the debtor will surrender a property.” Id. Although “debtors who surrender their property can no longer contest a foreclosure action,” the creditor must still take the legal action of a foreclosure proceeding to recover the property. In re Failla, 838 F.3d 1170, 1177 (11th Cir. 2016) (dealing with a chapter 7 case); see also Scott, 567 B.R. at 851 (applying Failla to a chapter 13 case); In re Metzler, 530 B.R. 894, 899 (Bankr. M.D. Fla. 2015) (determining in a chapter 13 case that a surrender of property prohibited the debtor from “taking an overt act to prevent the secured creditor from foreclosing its interest in the secured property”). The Failla court recognized that “a creditor may be able to invoke the doctrine of judicial estoppel in state court to force debtors to keep a promise made in bankruptcy court.” Failla, 838 F.3d at 1179.

The doctrine of judicial estoppel prevents a litigant from taking inconsistent positions in separate judicial proceedings. Zeeuw v. BFI Waste Sys. of N. Am., Inc., 997 So. 2d 1218, 1220 (Fla. 2d DCA 2008). For the doctrine to apply, the party to be estopped must have successfully maintained the position assumed in the earlier proceedings. Id. Thus, the court in the first proceeding must have adopted that position for judicial estoppel to apply. Id. In addition, the doctrine of judicial estoppel “requires a mutuality of parties.” Id. at 1221.

In Scott, the court stated that by opposing the state foreclosure action the debtor had violated the confirmed plan. 567 B.R. at 852. The court noted that the debtor was “bound by the confirmed chapter 13 plan” providing “that Debtor will surrender the homestead property.” Id.; see also Rivera v. Bank of Am., N.A., 190 So. 3d 267, 267 (Fla. 5th DCA 2016) (stating that the bankruptcy court had entered an “order confirming the debt and surrender of the property” to Appellee Bank of America); In re Lapeyre, 544 B.R. 719, 720 (Bankr. S.D. Fla. 2016) (“[T]he confirmed plan provides for the surrender of the property.”).

Nothing in the documents judicially noticed shows that by contesting standing Fischer would be violating the confirmed plan. The documents show that he indicated an intent to surrender the property to “Ocwen Loan Svc.” But the Order states that Exhibit A sets forth the “security surrendered to creditors,” and Exhibit A does not include the Bloxham property or “Ocwen Loan Svc.” or HSBC. We do not know if the plan had been modified or what else may have occurred in the bankruptcy proceedings. Because the documents that the trial court judicially noticed do not reflect that the bankruptcy court adopted the surrender of the Bloxham property, the trial court should not have applied the doctrine of judicial estoppel to prohibit Fischer from raising the defense of standing.

Therefore, we reverse the final judgment of foreclosure. Because the trial court explicitly found that there was no standing at the inception of the lawsuit, we remand for the trial court to enter an involuntary dismissal. See Corrigan v. Bank of Am., N.A., 189 So. 3d 187, 189 (Fla. 2d DCA 2016) (en banc) (“[I]t is axiomatic that standing must be shown as of the filing of the complaint.” (quoting Eagles Master Ass’n v. Bank of Am., N.A., 198 So. 3d 12, 14 (Fla. 2d DCA 2015))).

Reversed and remanded with directions.

LaROSE, C.J., and SALARIO, J., Concur.

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DETERMINED.

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



Posted in STOP FORECLOSURE FRAUD0 Comments

TFH 7/15 | The Case Against “Pure Originalism” as the Greatest Internal Danger To American Democracy, and How Homeowners For Example Have Been Victimized by That Endemic Tendency in American Legal Reasoning.

TFH 7/15 | The Case Against “Pure Originalism” as the Greatest Internal Danger To American Democracy, and How Homeowners For Example Have Been Victimized by That Endemic Tendency in American Legal Reasoning.

COMING TO YOU LIVE DIRECTLY FROM THE DUBIN LAW OFFICES AT HARBOR COURT, DOWNTOWN HONOLULU, HAWAII

LISTEN TO KHVH-AM (830 ON THE AM RADIO DIAL)

ALSO AVAILABLE ON KHVH-AM ON THE iHEART APP ON THE INTERNET

.

Sunday – JULY 15, 2018

The Case Against “Pure Originalism” as the Greatest Internal Danger To American Democracy, and How Homeowners For Example Have Been Victimized by That Endemic Tendency in American Legal Reasoning.

.

 ———————

 

Once again America is in the midst of another judicial controversy as Congress is being asked by the President to approve a new Justice of the Supreme Court of the United States.

Although most homeowners are unaware, this renewed controversy between “activist” and “strict constructionist” theories of judicial decision making directly affects and has directly affected homeowners facing foreclosure in many, so far devastating, yet unseen ways.

On today’s show, John and I will explore “originalism” as a pure theory of rule interpretation and its variations by returning to and applying our previous analysis of “The Rule Ritual,” both in the context of contemporary controversies and in the context of foreclosure defense issues, suggesting how and why “originalism” in its pure form continues to pose a grave threat to American Democracy.

Among the topics that John and I will discuss, time permitting, are:

1. Why we have rules in the first place, the starting point for any such discussion of rules.

2. The difference between the source of rules in a dictatorship and the source of rules in a democracy.

3. The first principle of rule interpretation is treating like cases alike.

4. The second principle of rule interpretation is that no two cases are exactly alike.

5. The four change agents for interpreting and applying rules as “precedent” once the transactional facts are determined in an individual case are resources, order, precedent, and ends (“ROPE”).

6. Distinguishing between “rule statements” (the conclusions of thought) and “rules” (the triggers of thought) is crucial to a proper understanding of judicial decision making in all “rule enterprises.”

7. The “separation of powers” 1789 doctrine is itself a rule statement dividing rule related functions into legislative, executive, and judicial rule enterprise management.

8. The Rule Ritual undemocratically protects vested interests against the rules that have been promulgated in a democratic society by applying rule statements from the past as precedent rather than the rules themselves, absent “ROPE” code books.

9. As rule enterprises mature, “whereas” clauses in legislation enlarge, as do policy justifications in judicial opinions.

10. As rule enterprises mature, the role of educational institutions enlarges as the role of legislatures decreases.

American Democracy, it is submitted, will continue to become more and more artificially polarized, literally unable to survive, torn apart from within, its governmental institutions too slow to react to changing needs and therefore less and less useful and respected, until the American legal system replaces “The Rule Ritual,” an inherited, archaic Anglo-Saxon theory of legal reasoning with “Rule Enterprise Analysis” based on an accurate understanding of what a Rule actually is and reforms its governmental institutions according.

Countries that cannot resolve major differences within their legal system often do so only through civil wars.

Homeowners are not the only ones disheartened by American Justice, too often protecting vested interests blinded by The Rule Ritual.

Our governmental institutions too often seem incapable of resolving major social issues peaceably and expeditiously.

Problems are not the problem. How we relate to problems is the problem.

Please join John and me to experience for yourself how basic research and knowledge can positively impact and enlighten everyday courtroom advocacy and judicial decision making, especially when applied to foreclosures, our principal interest on The Foreclosure Hour.

Gary Dubin

Please go to our website, www.foreclosurehour.com, and join your fellow homeowners in the Homeowners SuperPac today.

A Membership Application is posted there waiting for your support.

 

 

.
Host: Gary Dubin Co-Host: John Waihee

.

CALL IN AT (808) 521-8383 OR TOLL FREE (888) 565-8383

Have your questions answered on the air.

Submit questions to info@foreclosurehour.com

The Foreclosure Hour is a public service of the Dubin Law Offices

Past Broadcasts

EVERY SUNDAY
3:00 PM HAWAII 
6:00 PM PACIFIC
9:00 PM EASTERN
ON KHVH-AM
(830 ON THE DIAL)
AND ON
iHEART RADIO

The Foreclosure Hour 12

 

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



Posted in STOP FORECLOSURE FRAUD0 Comments

Credit Suisse nears $360 million deadline in fraud suit built on a hunch

Credit Suisse nears $360 million deadline in fraud suit built on a hunch

Reuters-

Highland ultimately convinced a Texas court that Credit Suisse had breached its contract and aided and abetted fraud in the deal, and the decision was upheld on appeal. Now, Credit Suisse faces a July 18 court deadline to pay Highland $360 million or appeal to the Texas Supreme Court.

The victories to date have enhanced the reputation of a fledgling Texas law firm, and legal experts say they are likely to encourage other investment funds to take big banks to court.

“This case shows the big banks can’t hide behind disclaimers when they know certain facts,” said Carol Gilden, a lawyer who represents pension funds and other institutional investors in financial and securities disputes.

Global banks have settled dozens of lawsuits by governments and shareholders over financial crisis misconduct, but until the Highland suit, it was unusual for an investment fund to pursue tough-to-win fraud actions – especially against a major trading partner, as Credit Suisse was for Highland.

[REUTERS]

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



Posted in STOP FORECLOSURE FRAUD0 Comments

Home foreclosures in key US markets are on the rise again: report

Home foreclosures in key US markets are on the rise again: report

The Real Deal-

Almost a decade after home foreclosures skyrocketed during the financial crisis, they are starting to rise again in some of the country’s hottest real estate markets. And loosening lending standards may be among the reasons, according to one expert.

Twenty two states posted increases in new foreclosure filings in the first six months of 2018, compared to the same period last year, according to a new report by Attom Data Solutions.

Overall, from January to June, foreclosure starts nationwide fell 8 percent to 191,914, compared to the first half of 2017, according to the report, released Thursday.

[THE REAL DEAL]

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



Posted in STOP FORECLOSURE FRAUD0 Comments

GOUDELOCK V. SIXTY-01 ASSOCIATION | 9th Cir. – condominium association (“CA”) assessments that become due after a debtor has filed for bankruptcy under Chapter 13 of the Bankruptcy Code are dischargeable under 11 U.S.C. § 1328(a) and, accordingly, reverse and remand.

GOUDELOCK V. SIXTY-01 ASSOCIATION | 9th Cir. – condominium association (“CA”) assessments that become due after a debtor has filed for bankruptcy under Chapter 13 of the Bankruptcy Code are dischargeable under 11 U.S.C. § 1328(a) and, accordingly, reverse and remand.

H/T Dubin Law Offices

FOR PUBLICATION

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

PENNY D. GOUDELOCK,

Appellant,

v.

SIXTY-01 ASSOCIATION OF APARTMENT

OWNERS,

Appellee.

No. 16-35384

D.C. No. 2:15-cv-01413- MJP

OPINION

Appeal from the United States District Court for the Western District of Washington Marsha J. Pechman, Senior District Judge, Presiding

Argued and Submitted February 6, 2018 Seattle, Washington

Filed July 10, 2018

Before: Milan D. Smith, Jr. and Mary H. Murguia, Circuit Judges, and Eduardo C. Robreno,* District Judge.

Opinion by Judge Robreno

* The Honorable Eduardo C. Robreno, United States District Judge for the Eastern District of Pennsylvania, sitting by designation.

2 GOUDELOCK V. SIXTY-01 ASSOCIATION

SUMMARY**

Bankruptcy

The panel reversed the district court’s decision affirming the bankruptcy court’s summary judgment in favor of a condominium association, which sought in an adversary proceeding to determine the dischargeability of a debtor’s personal obligation to pay condominium association assessments that accrued between the date the debtor filed her Chapter 13 bankruptcy petition and the date the condominium unit was foreclosed upon.

Agreeing with the reasoning of the Seventh Circuit in a Chapter 7 case, the panel held that condominium association assessments that become due after a debtor has filed for bankruptcy under Chapter 13 are dischargeable under 11 U.S.C. § 1328(a). The panel concluded that the debt arose prepetition and was not among exceptions listed in § 1328(a). The panel held that the Takings Clause was not implicated because the condominium association retained its in rem interest. The panel also concluded that equitable arguments did not override the express provisions of the Bankruptcy Code.

** This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader.

GOUDELOCK V. SIXTY-01 ASSOCIATION 3

COUNSEL

Amanda K. Rice (argued), Jones Day, Detroit, Michigan; Nathaniel P. Garrett, Jones Day, San Francisco, California; Christina L. Henry, Henry DeGraaff & McCormick P.S., Seattle, Washington; for Appellant.

Stephen M. Smith (argued), Sound Legal Partners PLLC, Kenmore, Washington, for Appellee.

  1. Erik Heath, San Francisco, California, as and for Amicus Curiae National Association of Consumer Bankruptcy Attorneys.

OPINION

ROBRENO, District Judge:

Appellant Penny Goudelock appeals the district court’s affirmance of the bankruptcy court’s grant of summary judgment in favor of appellee, Sixty-01 Association of Apartment Owners (“Sixty-01”). The issue is whether condominium association (“CA”) assessments that become due after a debtor has filed for bankruptcy under Chapter 13 of the Bankruptcy Code are discharged upon confirmation of the plan. We have jurisdiction pursuant to 28 U.S.C. § 158(d)(1). We conclude that such assessments are dischargeable under 11 U.S.C. § 1328(a) and, accordingly, reverse and remand.

  1. FACTUAL AND PROCEDURAL BACKGROUND

The facts are not in dispute. Goudelock purchased a condominium unit in Redmond, Washington in 2001. Her deed was subject to a declaration of covenants and

4 GOUDELOCK V. SIXTY-01 ASSOCIATION

restrictions (the “Declaration”) that was recorded against the property in 1978. The Declaration provides that Sixty-01, a CA, may charge property owners assessments for monthly fees and for maintenance, repairs, and capital improvements.

The Declaration grants Sixty-01 two methods for collecting unpaid assessments. It provides that all unpaid assessments: (1) constitute a lien on the condominium unit, enforceable through foreclosure; and (2) create a personal obligation through which Sixty-01 can bring suit for damages against the owner of the condominium unit.1

1 This is consistent with the applicable Washington law. In Washington, condominiums formed before 1990 are subject to the Horizontal Property Regimes Act (“HPRA”), codified at RCW § 64.32. Condominiums formed after July 1, 1990, are subject to the Washington Condominium Act (“WCA”), codified at RCW § 64.34, which was modeled after the Uniform Condominium Act. However, certain provisions of the newer WCA apply to pre-1990 condominiums. As relevant here, the WCA specifies that its provision governing a lien for assessments, RCW § 64.34.364, applies to pre-1990 condominiums “with respect to events and circumstances occurring after July 1, 1990,” though it does not “invalidate or supersede existing, inconsistent provisions of the declaration.” RCW § 64.34.010. Because Goudelock acquired her condominium in 2001, all events relating thereto necessarily occurred after July 1, 1990. Thus, to the extent that it is consistent with the Declaration, RCW § 64.34 defines the contours of the lien arising from Goudelock’s unpaid assessments. Here, the Declaration and the WCA are consistent. Like the Declaration, the WCA establishes that an association “has a lien on a unit for any unpaid assessments levied against a unit from the time the assessment is due.” RCW § 64.34.364(1). The WCA also provides that “[i]n addition to constituting a lien on the unit, each assessment shall be the joint and several obligation of the owner or owners of the unit to which the same are assessed as of the time the assessment is due.” RCW § 64.34.364(12). An association may bring a “[s]uit to recover a personal judgment for any delinquent assessment . . . in any court of competent jurisdiction without foreclosing or waiving the lien securing such sums.” Id.

GOUDELOCK V. SIXTY-01 ASSOCIATION 5

Goudelock stopped paying the CA assessments in 2009 and Sixty-01 sought to enforce its lien by initiating foreclosure proceedings in state court. Goudelock moved out of her condominium unit and, in March of 2011, filed for bankruptcy under Chapter 13. As part of her Chapter 13 plan, Goudelock surrendered the condominium unit. Sixty-01 filed a proof of claim attesting to $18,780.39 in unpaid CA assessments and noted that they continued to accrue at a monthly rate of $388.46. Before the plan was confirmed by the bankruptcy court, Sixty-01 canceled the foreclosure sale because the mortgage lender paid the outstanding assessments. The condominium unit sat unoccupied until February 26, 2015, when the mortgage lender foreclosed on it. On July 24, 2015, Goudelock completed her plan obligations and received a discharge pursuant to 11 U.S.C. § 1328(a).

Meanwhile, in April of 2015, Sixty-01 had brought suit in the United States Bankruptcy Court for the Western District of Washington to determine the dischargeability of Goudelock’s personal obligation to pay the post-petition CA assessments that had accrued between March 2011 (when Goudelock filed her Chapter 13 petition) and February 2015 (when the condominium unit was foreclosed upon). The bankruptcy court granted summary judgment in Sixty-01’s favor, concluding that the post-petition CA assessments “were not dischargeable because they arose at the time of their assessment and were an incidence of legal ownership of the burdened property.” Goudelock v. Sixty-01 Ass’n of Apartment Owners, No. C15-1413-MJP, 2016 WL 1365942, at *1 (W.D. Wash. Apr. 6, 2016) (summarizing the bankruptcy court’s holding). The court rejected Goudelock’s argument that the personal obligation to pay CA assessments was a pre-petition debt under 11 U.S.C. § 1328(a) that arose when she initially purchased the condominium unit. Id.

6 GOUDELOCK V. SIXTY-01 ASSOCIATION

Goudelock appealed, and the district court affirmed the bankruptcy court’s grant of summary judgment. Id. at 2. Goudelock then filed a timely appeal in this court.

  1. STANDARD OF REVIEW

“This court reviews de novo a district court’s decision on appeal from a bankruptcy court” as well as “[t]he bankruptcy court’s conclusions of law and interpretation of the Bankruptcy Code.” In re Greene, 583 F.3d 614, 618 (9th Cir. 2009).

III. ANALYSIS

No circuit court of appeals has addressed the dischargeability of CA assessments that have become due after the filing of a Chapter 13 petition. There are, however, two appellate decisions addressing the dischargeability of similar post-petition assessments under Chapter 7. Moreover, a number of lower courts have imported the teachings of these two appellate decisions under Chapter 7 to the dischargeability of post-petition association assessments under Chapter 13. The two appellate decisions (and their progeny) represent polar opposite positions and their applicability to Chapter 13 cases is the starting point of our analysis.

First, in Matter of Rosteck, 899 F.2d 694 (7th Cir. 1990), the Seventh Circuit Court of Appeals found that the obligation to pay CA assessments was an unmatured contingent debt under the Bankruptcy Code that arose pre- petition (when the debtors purchased the property) and that merely became mature when the assessments became due post-petition. Id. at 696–97. As a result, the debt for future assessments was dischargeable, which the court held was

GOUDELOCK V. SIXTY-01 ASSOCIATION 7

“consistent with the Bankruptcy Code’s goal of providing debtors a fresh start.” Id. at 697.

A contrasting view was articulated in In re Rosenfeld, 23 F.3d 833 (4th Cir. 1994), wherein the Fourth Circuit Court of Appeals held that the obligation to pay cooperative association assessments ran with the land and arose each month from the debtor’s continued post-petition ownership of the property. Id. at 837. Thus, the court concluded that any assessments due and payable after the filing of the Chapter 7 petition were not dischargeable as they were not pre- petition debts. Id. at 838.2

Both lines of reasoning have been relied upon by lower courts in this circuit when considering the dischargeability of post-petition association assessments under Chapter 13, ultimately reaching competing results. Compare In re Coonfield, 517 B.R. 239, 243 (Bankr. E.D. Wash. 2014) (following Rosteck’s reasoning and concluding “that the claim against [the debtors] for association assessments arose pre-petition and includes obligations for ongoing assessments”), with In re Foster, 435 B.R. 650, 660–61 (B.A.P. 9th Cir. 2010) (applying Rosenfeld), and In re Batali, No. WW-14-1557-KiFJu, 2015 WL 7758330, at *8– 9 (B.A.P. 9th Cir. 2015) (applying Rosenfeld and Foster).

2 As noted above, Rosteck and Rosenfeld were both Chapter 7 cases. In 1994 Congress embraced Rosenfeld and rejected Rosteck by providing that post-petition assessments are not dischargeable under Chapter 7 per 11 U.S.C. § 523(a)(16). While Congress applied this exception from discharge to Chapter 7, 11, and 12 petitions, as well as Chapter 13 petitions where a debtor is discharged without completing her payments (under 11 U.S.C. § 1328(b)), Congress notably omitted the exception for Chapter 13 petitions where a discharge follows full payment under the plan (under 11 U.S.C. § 1328(a))—which is the posture of this case.

8 GOUDELOCK V. SIXTY-01 ASSOCIATION

We agree with the reasoning of Rosteck and conclude that its teachings in the Chapter 7 context are applicable to Chapter 13 cases. Sixty-01 obtained two state law remedies under the Declaration to address the failure to pay CA assessments: an in rem remedy of a lien and right of foreclosure; and an in personam remedy allowing it to bring suit against the property owner. While the in rem lien is not dischargeable under Chapter 13, the pre-petition in personam obligation is. It is Goudelock’s in personam obligation that ultimately is at issue in this case.

  1. The Personal Obligation to Pay CA Assessments

Is a Debt Under Section 1328(a)

A Chapter 13 discharge is intended to be a “discharge of all debts,” barring a few enumerated exceptions. 11 U.S.C. § 1328(a). Bankruptcy proceedings are intended to grant debtors a “fresh start,” Grogan v. Garner, 498 U.S. 279, 286 (1991), and, as a result, the Bankruptcy Code “is to be construed liberally in favor of debtors,” In re Devers, 759 F.2d 751, 754 (9th Cir. 1985). Moreover, in that Chapter 13 is the preferred route for personal bankruptcy, “[a] discharge under Chapter 13 ‘is broader than the discharge received in any other chapter.’” United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 268 (2010) (quoting 8 Collier on Bankruptcy ¶ 1328.01, p. 1328–5 (rev. 15th ed. 2008)).

The Bankruptcy Code defines “debt” as a “liability on a claim.” 11 U.S.C § 101(12). In turn, 11 U.S.C. § 101(5)(A) defines a “claim,” (and thus, a debt) as a “right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or

GOUDELOCK V. SIXTY-01 ASSOCIATION 9

unsecured.”3 This definition of a claim is very broad, encompassing all of a debtor’s obligations “no matter how remote or contingent.” In re SNTL Corp., 571 F.3d 826, 838 (9th Cir. 2009) (quoting In re Jensen, 995 F.2d 925, 929 (9th Cir. 1993)); see also, e.g., Rosteck, 899 F.2d at 696; In re Christian Life Ctr., 821 F.2d 1370, 1375 (9th Cir. 1987) (stating that Congress intended to provide “‘the broadest possible definition’ of claims so that ‘all legal obligations of the debtor, no matter how remote or contingent, will be able to be dealt with in the bankruptcy case.’” (quoting S. Rep. No. 95-989, at 22 (1978), as reprinted in 1978 U.S.C.C.A.N. 5787, 5808)).

Thus, the obligation to pay CA assessments is a debt since it creates a right to payment. See 11 U.S.C. § 101(5)(A). The fact that the future assessments may be a contingent and unmatured form of the debt does not alter this analysis. See, e.g., id.; SNTL Corp., 571 F.3d at 838.

  1. The CA Assessment Debt Arose Pre-Petition and

Is Dischargeable

Neither party disputes that only debts arising pre-petition may be discharged. Federal law determines when a claim arises under the Bankruptcy Code. SNTL Corp., 571 F.3d at 839. In the Ninth Circuit, courts use the “fair contemplation” test to determine when a claim arises. Id. This test provides that “a claim arises when a claimant can fairly or reasonably contemplate the claim’s existence even if a cause of action has not yet accrued under nonbankruptcy law.” Id. Sixty-01 does not contest seriously that Goudelock’s in personam

3 Section 101(5)(B) includes an additional definition of “claim” regarding the right to an equitable remedy. 11 U.S.C. §101(5)(B). However, that definition is not relevant here.

10 GOUDELOCK V. SIXTY-01 ASSOCIATION

obligation meets the fair contemplation test. Here, at the time of the purchase of the condominium unit, Sixty-01 fairly could have contemplated that the monthly CA assessments would continue to accrue based upon Goudelock’s continued ownership of the condominium unit. Thus, Goudelock’s in personam obligation to pay CA assessments arose pre- petition when she purchased the condominium unit. See Rosteck, 899 F.2d at 696 (concluding that the debtors “had a debt for future condominium assessments when they filed their bankruptcy petition” in light of the pre-petition obligation in the declaration).

Before becoming due each month, the assessments, which are part of the pre-petition debt, are unmatured and are also contingent upon continued ownership of the property. Unmatured contingent debts are, however, dischargeable under Section 1328(a). 11 U.S.C. § 101(5)(A); see Coonfield, 517 B.R. at 242 (providing that a homeowners association “possesses its claim by virtue of [the debtors] acquiring title to the condominium and subsequent assessments are a consequence of, and mature from, the act that gave rise to such claim. Thus, absent the debtors’ pre-petition act of taking title, the Homeowners Association would not have a claim”).

In this case, Goudelock’s personal obligation to pay CA assessments was not the result of a separate, post-petition transaction but was created when she took title to the condominium unit. As a result, the debt for the assessments arose pre-petition and is dischargeable under Section 1328(a), unless the Bankruptcy Code provides an exception to discharge.

GOUDELOCK V. SIXTY-01 ASSOCIATION 11

  1. The Personal Debt Arising from CA Assessments Is Not Excepted from Discharge under Section 1328(a)

Subsections 1328(a)(1)–(4) enumerate the only exceptions to the broad discharge of debts under Section 1328(a).4 In addition, under 11 U.S.C. § 523(a)(16), post- petition association assessments are excepted from discharge for petitions under Sections 727 (Chapter 7), 1141 (Chapter 11), 1228(a) and (b) (Chapter 12), and Section 1328(b) (Chapter 13 cases where the debtor is discharged without completing her payments).5 Notably absent from the list of discharge exceptions in Section 1328(a) is a reference to Section 523(a)(16), the only provision which excepts post-petition association assessments from discharge. See n.5 supra.

Thus, it appears that Congress’ decision not to add post- petition association assessments to the exceptions listed in

4 The exceptions to Section 1328(a) discharge are debts regarding: (1) curing defaults on unsecured claims or secured claims which require payments due after the last payment under the plan is due (under 11 U.S.C. § 1322(b)(5)); (2) required taxes for which the debtor is liable (under 11 U.S.C. § 507(a)(8)(C)); (3) taxes owed under unfiled or late tax returns (under 11 U.S.C. § 523(a)(1)(B)); (4) taxes from fraudulent tax returns or tax evasion (under 11 U.S.C. § 523(a)(1)(C)); (5) valuables obtained by fraud or false pretenses (under 11 U.S.C. § 523(a)(2)); (6) unscheduled debts (under 11 U.S.C. § 523(a)(3)); (7) fraud or defalcation while acting as a fiduciary, embezzlement, or larceny (under 11 U.S.C. § 523(a)(4)); (8) domestic support obligations (under 11 U.S.C. § 523(a)(5)); (9) student loans (under 11 U.S.C. § 523(a)(8)); (10) obligations for personal injuries resulting from a DUI (under 11 U.S.C. § 523(a)(9)); (11) restitution and fines arising from a criminal conviction; and (12) damages awarded in personal injury actions

12 GOUDELOCK V. SIXTY-01 ASSOCIATION

Section 1328(a) was purposeful. See Boudette v. Barnette, 923 F.2d 754, 756–57 (9th Cir. 1991) (describing the rule of statutory interpretation of expressio unius est exclusio alterius as creating “a presumption that when a statute designates certain persons, things, or manners of operation, all omissions should be understood as exclusions”); see also Pa. Dep’t of Pub. Welfare v. Davenport, 495 U.S. 552, 563 (1990) (“Congress secured a broader discharge for debtors under Chapter 13 than Chapter 7 by extending to Chapter 13 proceedings some, but not all, of § 523(a)’s exceptions to discharge.”), superseded by statute, Criminal Victims Protection Act of 1990, PL 101-581, § 3, 104 Stat. 2865; In re Riso, 978 F.2d 1151, 1154 (9th Cir. 1992) (“In order to effectuate the fresh start policy [of bankruptcy], exceptions to discharge should be strictly construed against an objecting creditor and in favor of the debtor.”).

Sixty-01 cautions against giving undue weight to “Congress’ silence” regarding its failure to include post- petition CA assessments as an exception to discharge under Section 1328(a), citing Foster. The court in Foster wondered whether the failure to include this exception was simply the result of a “statutory misstep.” 435 B.R. at 659. We reject this conjecture. This is not a case implicating a drafting error resulting from willful or malicious injury. The parties agree that none of these exceptions are implicated here.

5 As stated, Congress added this exception to resolve the split between the Fourth and Seventh Circuits in Rosenfeld, 23 F.3d 833, and Rosteck, 899 F.2d 694 regarding post-petition association assessments in Chapter 7 cases. Congress recognized in the legislative history of Section 523(a)(16) that “[e]xcept to the extent that the debt is nondischargeable under [Section 523(a)], obligations to pay such fees [(post-petition assessments)] would be dischargeable.” 140 Cong. Rec. H10752-01, H10770 § 309 (citing Rosteck, 899 F.2d 694).

GOUDELOCK V. SIXTY-01 ASSOCIATION 13

or a Congressional oversight. Rather, it is an instance where Congress confronted an issue of policy, and spoke by creating explicit exceptions to discharge in Section 1328(a) but did not include (as it did for other chapters) post-petition CA assessments. See Boudette, 923 F.2d at 756–57.

This very dilemma (whether Congress’ exclusion of a discharge exception was an oversight or purposeful) was addressed by the Supreme Court in Davenport. In that case, the Court concluded that because Congress had not explicitly included the Chapter 7 discharge exception for fines, penalties and forfeitures (Section 523(a)(7)) in Chapter 13, and given Congress’ broad definition of the term “debt,” as well as the fact that Chapter 13 afforded a broader discharge than Chapter 7, criminal restitution orders were dischargeable under Chapter 13. Davenport, 495 U.S. at 562–64. Congress disagreed with the Court’s decision and later overruled it by amending Section 1328(a) to specifically exclude criminal restitution from discharge. See PL 101-581, § 3, 104 Stat. 2865; 11 U.S.C. § 1328(a)(3). Davenport illustrates the proper interaction between Congress and the courts. As applied here, the Bankruptcy Code does not provide an exception to discharge under Section 1328(a) for post-petition association assessments (including CA assessments). If Congress concludes that such an exception is sound public policy, it may amend the Bankruptcy Code to provide for it as it did in response to Davenport.

  1. The Takings Clause and Notions of Equity

The parties raise two additional arguments that warrant brief discussion.

First, Sixty-01 contends that, because it asserts that the personal obligation to pay CA assessments is a real property

14 GOUDELOCK V. SIXTY-01 ASSOCIATION

interest stemming from the Declaration, the Fifth Amendment’s Takings Clause prohibits the government from discharging the obligation. The Takings Clause provides that “private property [shall not] be taken for public use, without just compensation.” U.S. Const. amend. V. Sixty-01 argues just that—that the discharge of the post- petition CA assessments would amount to a taking of a substantial property right without just compensation.

This argument fails. In the bankruptcy context, the Supreme Court has distinguished between secured in rem debts and unsecured in personam debts: in personam debts are dischargeable while the creditor retains its in rem property interests. See Johnson v. Home State Bank, 501 U.S. 78, 82–84 (1991) (concluding that the debtor’s in personam obligation under a mortgage, but not the in rem obligation, was discharged pursuant to a Chapter 7 petition and that, in addition, the remaining in rem property interest was a “claim” under the broad definition in the Bankruptcy Code subject to inclusion in a subsequent Chapter 13 reorganization plan); id. at 84 n.5 (“[A] discharge under the Code extinguishes the debtor’s personal liability on his creditor’s claims.”); see also In re Anderson, 378 B.R. 296, 298 (Bankr. W.D. Wash. 2007) (“A bankruptcy discharge extinguishes only in personam claims against the debtor(s), but generally has no effect on an in rem claim against the debtor’s property.” (quoting Cen-Pen Corp. v. Hanson, 58 F.3d 89, 92 (4th Cir. 1995))). Because Sixty-01 retains its in rem interest (even after the discharge of Goudelock’s in personam debt), the Takings Cause is not implicated.

Second, both parties raise equitable arguments regarding why post-petition CA assessments should or should not be discharged under certain circumstances. Many of these arguments turn on whether the debtor relinquishes his or her

GOUDELOCK V. SIXTY-01 ASSOCIATION 15

property or remains in possession of it post-petition. However, there is no legal basis for distinguishing between whether Goudelock retained possession of her condominium unit post-petition and, thus, continued to enjoy the benefit of occupancy at no cost, or, instead, surrendered it at some point. Sixty-01 points out that bankruptcy courts are “essentially courts of equity,” Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 57 (1989) (quoting Katchen v. Landy, 382 U.S. 323, 327 (1966)), and argues that affording Goudelock what would essentially be “free rent” for four years is inequitable and unjust. However, notions of equity and fairness do not override the express provisions of the Bankruptcy Code. Norwest Bank Worthington v. Ahlers, 485 U.S. 197, 206 (1988) (“[W]hatever equitable powers remain in the bankruptcy courts must and can only be exercised within the confines of the Bankruptcy Code.”). The legislative branch, not the courts, is the appropriate place to balance conflicting policy interests and adjust the Bankruptcy Code accordingly if it is warranted. See Davenport, 495 U.S. at 562–63 (recognizing that Congress makes “policy choice[s] regarding the dischargeability” of debts).

  1. CONCLUSION

For the foregoing reasons, we reverse the district court’s affirmance of the bankruptcy court’s grant of summary judgment in favor of Sixty-01 and remand for further proceedings consistent with this disposition.

REVERSED AND REMANDED.

16-35384-2018-07-10 by DinSFLA on Scribd

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



Posted in STOP FORECLOSURE FRAUD0 Comments

Fifth Circuit to Consider Constitutionality of the BCFP’s Structure

Fifth Circuit to Consider Constitutionality of the BCFP’s Structure

Cov Financial Services-

On July 2, 2018, All American Check Cashing, Inc., Mid-State Finance, Inc., and the president and owner of both companies (collectively, “All American”) filed a briefasking the U.S. Court of Appeals for the Fifth Circuit to find the Bureau of Consumer Financial Protection (“BCFP” or the “Bureau”) (formerly known as the CFPB) unconstitutionally structured and to strike down the Consumer Financial Protection Act (“CFPA”), which created the agency, in its entirety.

The appeal follows a 2016 complaint filed by the Bureau in the U.S. District Court for the Southern District of Mississippi against the two check cashing and payday loan companies and their principal for alleged unfair, deceptive, and abusive acts and practices. In that case, All American moved for a judgment on the pleadings on the basis that the BCFP is unconstitutionally structured as an independent agency with a single head whom the president can remove only “for cause.”

In March 2018, the district court denied the motion by adopting the reasoning of the U.S. Court of Appeals for the D.C. Circuit’s recent en banc majority decision upholding the Bureau’s structure in PHH Corp, et al. v. Consumer Financial Protection Bureau. (Our coverage of the PHH decision is available here.) All American moved to appeal the denial of the motion.

[COV FINANCIAL SERVICES]

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



Posted in STOP FORECLOSURE FRAUD0 Comments

FTC v. Credit Bureau Center, LLC, f/k/a MyScore LLC | FTC Wins $5.2 Million Judgment against Defendants Who Tricked Consumers with Ads for Non-existent Rental Properties and ‘Free’ Credit Reports

FTC v. Credit Bureau Center, LLC, f/k/a MyScore LLC | FTC Wins $5.2 Million Judgment against Defendants Who Tricked Consumers with Ads for Non-existent Rental Properties and ‘Free’ Credit Reports

A federal judge has ordered Credit Bureau Center, LLC and its owner, Michael Brown, to pay more than $5.2 million to return to consumers, to resolve FTC charges that they deceived people with fake rental property ads and deceptive promises of “free” credit reports, and then tricked them into enrolling into a costly monthly credit monitoring service.

Brown and his company, formerly known as MyScore LLC, and their co-defendants placed Craigslist ads for rental properties that did not exist or that they had no right to offer for rent. They impersonated property owners and offered property tours if consumers would first obtain credit reports and scores from their websites. These sites claimed to provide “free” credit reports and scores, but then enrolled consumers in a credit monitoring service with monthly charges of $29.94. Many people did not realize they were enrolled until they noticed unexpected charges on their bank or credit card statements, sometimes after several billing cycles.

At the FTC’s request, a federal court halted the scheme during litigation. In October 2017, the FTC obtained a court order that required Brown’s co-defendants Danny Pierce and Andrew Lloyd to pay a total of $762,000 to resolve the charges against them.

The order announced today grants the FTC’s motion for summary judgment and enters a final judgment and order against Brown and his company, finding they violated the FTC Act, the Restore Online Shoppers’ Confidence Act, the Fair Credit Reporting Act, and the Free Annual File Disclosures Rule.

As part of the $5.2 million judgment, the court entered a permanent injunction that bans Brown and his company from selling any credit monitoring service with a negative option feature, and from misrepresenting material facts about any product or service. The order also specifies how they must monitor their affiliate marketers in the future. For example, they must require certain information from affiliates, including their name and location, and advance copies of all marketing materials. They also must investigate any complaints about affiliate marketers and end the affiliation if they find practices the order prohibits.

The order requires Brown and his company to make certain disclosures when selling any product or service with a negative option feature, and when offering free credit reports. It also bars them from using billing information to obtain payments from consumers without first obtaining their express informed consent.

In addition, the order prohibits Brown and his company from profiting from consumers’ personal information obtained as part of the scheme and failing to dispose of it properly.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook(link is external), follow us on Twitter(link is external), read our blogs and subscribe to press releases for the latest FTC news and resources.

CONTACT INFORMATION

CONTACT FOR CONSUMERS:
Consumer Response Center
877-382-4357

CONTACT FOR NEWS MEDIA:
Frank Dorman(link sends e-mail)
Office of Public Affairs
202-326-2674

STAFF CONTACTS:
Guy G. Ward
FTC Midwest Region
312-960-5612

Samuel A.A. Levine
Bureau of Consumer Protection
312-960-5634

_________________________________________________

LAST UPDATED: 
Federal Trade Commission, Plaintiff, v. Credit Bureau Center, LLC, a limited liability company, formerly known as MyScore LLC, also doing business as eFreeScore.com, CreditUpdates.com, and FreeCreditNation.com; Michael Brown; Danny Pierce; and Andrew Lloyd, Defendants.
FTC MATTER/FILE NUMBER: 

162 3120

X170014

CIVIL ACTION NUMBER: 

17-cv-00194

ENFORCEMENT TYPE: 

Federal Injunctions

FEDERAL COURT: 

Northern District of Illinois

CASE TIMELINE

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



Posted in STOP FORECLOSURE FRAUD0 Comments

TFH 7/8/18 |  WaMu FA Ten-Year Anniversary Special: Lessons Learned from the Biggest Bank Failure in American History and How the FDIC Turned It into the Biggest Financial Fraud in American History

TFH 7/8/18 | WaMu FA Ten-Year Anniversary Special: Lessons Learned from the Biggest Bank Failure in American History and How the FDIC Turned It into the Biggest Financial Fraud in American History

COMING TO YOU LIVE DIRECTLY FROM THE DUBIN LAW OFFICES AT HARBOR COURT, DOWNTOWN HONOLULU, HAWAII

LISTEN TO KHVH-AM (830 ON THE AM RADIO DIAL)

ALSO AVAILABLE ON KHVH-AM ON THE iHEART APP ON THE INTERNET

.

Sunday – JULY 8, 2018

WaMu FA Ten-Year Anniversary Special: Lessons Learned from the Biggest Bank Failure in American History and How the FDIC Turned It into the Biggest Financial Fraud in American History

.

 ———————

 

In June 2008 , Washington Mutual Bank in 9 days experienced a rush by depositors to withdraw $16.7 billion representing 9% of its deposits which led to its being seized by the Office of Thrift Administration and in September 2008 placed into receivership with the FDIC. Its parent, Washington Mutual, Inc., then was forced into bankruptcy.

Virtually the same day of the receivership, the FDIC sold WaMu’s hard net assets, valued in excess well over $100 billion, to JPMorgan Chase Bank for $1.9 billion minus debt and equity claims, which included an unscheduled number of WaMu FA mortgages estimated in the millions, collectively reported to be worth $118.9 billion.

Washington Mutual, Inc. had its origins in Seattle in 1889, and growing under a variety of names and subsidiaries, expanded its operations acquiring mortgage companies in Oregon, Idaho, Utah, Montana, California, Texas, and New York, to become the largest mortgage lender in the United States.

On January 1, 2005 it acquired by merger Washington Mutual FA, a Sacramento Federal Association, which Federal Association then ceased to exist, and WaMu expanded its subprime mortgage leading operations nationwide.

The result has been an incredible fraud waged not only upon WaMu Mortgage borrowers nationwide, but upon the Nation’s Courts as well who, Mr. McGoo-like, at least until very recently, have proceeded to assume mistakenly that federal regulators and Chase could do no wrong.

On today’s show, John and I will discuss the likely reasons why WaMu collapsed and the surprising breadth of the resulting WaMu FA fraud.

Specifically, we will examine ten key aspects of the underlying WaMu FA fraud, and how to use that information to defeat WaMu FA related foreclosures:

1. It is generally recognized that WaMu FA mortgages were sold in securitizations before the FDIC receivership.

2. WaMu FA securitizations specifically stated that the originals of loan documents were not to be immediately deposited in the trusts, with mortgages allowed to be assigned outside the trusts.

3. When original WaMu FA loan documents were deposited in the trusts, loan servicers were instructed that they could destroy the original loan documents as long as they maintained electronic copies from which they could recreate originals.

4. Rubber-stamping of endorsements of notes was done undated and after-the-fact using rubber stamps signed by past WaMu employees without their permission, including Cynthia Riley, and reportedly Jess Almanza and Robin Tange.

5. Robert Schoppe, in charge of the FDIC WaMu Receivership, has admitted in sworn testimony in a criminal case and in taped interviews with others that the FDIC never knew what mortgages WaMu owned at the time of the receivership and anyone asking that question should contact Chase for the answer.

6. WaMu FA ceased to exist on January 1, 2005, but was apparently used by WaMu as “lender” thereafter, defrauding State recording offices, to make millions of loans as an undisclosed and unlicensed dba having no legal capacity to make or record loans, functioning as an undisclosed and unlicensed mortgage broker in order to avoid state licensing laws and to extract yield spread premiums from borrowers in violation of federal law.

7. Chase used its employees to assign mortgages to itself on behalf of the FDIC claiming to be officers of the FDIC, in violation of federal criminal laws.

8. Chase has used its employees and foreclosure attorneys to knowingly submit false affidavits in judicial foreclosure court proceedings and at State recording offices claiming to authenticate false loan documents, committing and suborning perjury.

9. The FDIC, even after the 2008 Purchase and Assumption Agreement (PAA) with Chase, supposedly selling all WaMu mortgages to Chase, nevertheless inconsistently proceeded to assign WaMu pre-receivership mortgages directly from the FDIC to others.

10. Courts have rejected the assignment of mortgages occurring simply by operation of law in federal receivership situations and even automatically resulting from corporate mergers, requiring the FDIC to have to belatedly blindly assign WaMu mortgages to Chase, reportedly with a 2014 deadline cutoff date.

Gary Dubin

Please go to our website, www.foreclosurehour.com, and join your fellow homeowners in the Homeowners SuperPac today.

A Membership Application is posted there waiting for your support.

 

 

.
Host: Gary Dubin Co-Host: John Waihee

.

CALL IN AT (808) 521-8383 OR TOLL FREE (888) 565-8383

Have your questions answered on the air.

Submit questions to info@foreclosurehour.com

The Foreclosure Hour is a public service of the Dubin Law Offices

Past Broadcasts

EVERY SUNDAY
3:00 PM HAWAII 
6:00 PM PACIFIC
9:00 PM EASTERN
ON KHVH-AM
(830 ON THE DIAL)
AND ON
iHEART RADIO

The Foreclosure Hour 12

 

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



Posted in STOP FORECLOSURE FRAUD0 Comments

Chmiel v. US Bank NA, Ind: Court of Appeals | Because we conclude that the statute of limitations did not bar Chmiel’s claim and that there remain genuine issues of material fact regarding whether: (1) the doctrine of laches bars Chmiel’s claim; (2) the 2005 Deed is valid; and (3) U.S. Bank was a bona fide mortgagee

Chmiel v. US Bank NA, Ind: Court of Appeals | Because we conclude that the statute of limitations did not bar Chmiel’s claim and that there remain genuine issues of material fact regarding whether: (1) the doctrine of laches bars Chmiel’s claim; (2) the 2005 Deed is valid; and (3) U.S. Bank was a bona fide mortgagee

Terrance E. Chmiel, Appellant-Plaintiff,
v.
US Bank National Association, Appellee-Defendant.

No. 75A05-1708-PL-1979.
Court of Appeals of Indiana.
June 29, 2018.
Appeal from the Starke Circuit Court, Trial Court Cause No. 75C01-1505-PL-20, The Honorable Kim Hall, Judge.

James R. Bryon, Lisa Gilkey Schoetzow, Thorne Grodnik, LLP, Elkhart, Indiana, Attorneys for Appellant.

Tammy L. Ortman, Jennifer S. Ortman, Lewis & Kappes, P.C., Indianapolis, Indiana, Attorneys for Appellee.

PYLE, Judge.

Statement of the Case

Terrance E. Chmiel (“Chmiel”) appeals the trial court’s grant of summary judgment in favor of U.S. Bank, National Association (“U.S. Bank”) on U.S. Bank’s cross-motion for summary judgment in Chmiel’s quiet title proceedings. Chmiel argues that the trial court erred in determining that: (1) his quiet title action was barred by the statute of limitations; (2) his quiet title action was barred by the doctrine of laches; (3) a 2005 deed in which he purportedly conveyed his property rights to his mother was valid; and (4) U.S. Bank was a bona fide mortgagee[1] of the property at issue. Because we conclude that: (1) Chmiel’s quiet title action was not barred by the statute of limitations; and (2) there remain genuine issues of material fact regarding whether: (a) the doctrine of laches bars Chmiel’s claim; (b) the 2005 deed was valid; and (c) U.S. Bank was a bona fide mortgagee, we agree that the trial court erred when it granted summary judgment. We reverse the trial court’s order and remand for further proceedings.

We reverse and remand.

Issues

1. Whether the trial court erred in granting summary judgment based on its determination that Chmiel’s quiet title action was barred by the statute of limitations.

2. Whether the trial court erred in granting summary judgment based on its determination that Chmiel’s quiet title action was barred by laches.

3. Whether the trial court erred in granting summary judgment based on its determination that a 2005 deed to the property at issue was valid.

4. Whether the trial court erred in granting summary judgment based on its determination that U.S. Bank was a bona fide mortgagee.

Facts

On November 27, 1991, Chmiel’s mother, Ann L. Nied (“Ann”), and step-father, Ovid O. Nied (“Ovid”), conveyed to Chmiel a fee simple interest in their property (“the Property”) subject to life estates in their names. The deed conveying the Property (“1991 Deed”) was recorded in the Starke County Recorder’s Office on December 3, 1991. Ovid then died on November 18, 2000.

On October 31, 2005, a quitclaim deed (“2005 Deed”) conveying Chmiel’s fee

simple interest in the Property back to Ann was registered in the Starke County Recorder’s Office. The 2005 Deed included two signature pages, each containing Ann’s signature and a signature purporting to belong to Chmiel. The first signature page was dated October 13, 2005 and had been notarized by a notary public named Gale J. Davis (“Notary Davis”). The second signature page was dated October 6, 2005 and had been notarized by a notary public named Sandra L. Hansen.

After Ann received title to the fee simple interest in the Property, she executed a promissory note (“Note”) to Homeowners Loan Corporation (“Homeowners”) and a mortgage (“Mortgage”) on the Property securing the Note, in exchange for $40,000. The terms of the Mortgage described Ann’s fee simple interest in the Property rather than the life estate she had retained in the 1991 Deed.

Two years later, on August 9, 2007, Chmiel’s attorney wrote a letter (“First Letter”) to Homeowners to notify the company that Chmiel had become aware of the 2005 Deed and Mortgage and disputed the 2005 Deed’s legitimacy. Specifically, Chmiel claimed that his signature on the 2005 Deed was forged and that he still owned a fee simple interest the Property. Chmiel also asserted that, because he still owned a fee simple interest in the Property, the Mortgage applied to only the life estate interest that Ann had retained in the 1991 Deed. Homeowners did not respond to Chmiel’s letter.

Thereafter, the Note and Mortgage were assigned to other entities, but the dates of those assignments and names of those assignees are not a part of the record. Chmiel’s attorney wrote a letter dated May 27, 2009 (“Second Letter”) to Homecoming Financial, the apparent Mortgage assignee or loan servicer at that time, to notify the company of his allegations regarding the 2005 Deed and the Mortgage. He also attached a copy of the First Letter to this Second Letter. Homecoming Financial did not respond to the Second Letter.

Thereafter, ownership of the Note and Mortgage apparently changed, and on March 29, 2010, Chmiel’s attorney wrote a letter (“Third Letter”) to GMAC Mortgage, LLC (“GMAC Mortgage”), to advise the company of his interest in the Property. He attached copies of his First and Second Letters to this Third Letter. GMAC Mortgage replied to the Third Letter on April 9, 2010, writing that it “acknowledge[d] Mr. Chmiel’s allegations of forgery” but stating that it “[did] not investigate this type of fraud on behalf of third parties.” (App. Vol. 4 at 88). The company suggested that Chmiel might “wish to take legal action against the alleged perpetrator” and requested Chmiel to forward any police reports or other documents pertaining to any such investigation. (App. Vol. 4 at 88).

On July 28, 2011, the Mortgage Electronic Registration System (“MERS”), as “nominee for Homeowners Loan Corporation, its successors and/or assigns,” assigned the Mortgage to U.S. Bank “as trustee for RASC.”[2] (App. Vol. 4 at 152). Shortly thereafter, U.S. Bank initiated foreclosure proceedings because Ann had defaulted on the Mortgage payments. Chmiel filed a motion to intervene in the foreclosure proceedings, claiming again that he owned a fee simple interest in the Property and that his signature on the 2005 Deed had been forged. However, the foreclosure proceedings were stayed when Ann filed a petition for bankruptcy in the Northern District of Indiana United States Bankruptcy Court. Chmiel entered an appearance in the bankruptcy proceedings and filed a motion requesting that the bankruptcy court abandon the Property as an asset of Ann’s bankruptcy estate. In this motion, Chmiel again argued that the 2005 Deed had been forged and that he still owned a fee simple interest in the Property.

Ultimately, Ann and her creditors agreed to a Chapter 13 bankruptcy plan that provided that Ann would make monthly mortgage payments and cure the pre-bankruptcy petition arrearage. Because Chapter 13 bankruptcy plans allow debtors to retain assets and pay off their debts with future income, neither the foreclosure court nor the bankruptcy court ruled on the ownership of the Property after Ann agreed to the Chapter 13 bankruptcy plan. See McCullough v. CitiMortgage, Inc., 70 N.E.3d 820, 826 (Ind. 2017) (explaining Chapter 13 bankruptcy plans) (internal citations and quotations omitted).

Subsequently, Ann made timely mortgage payments until she passed away on January 21, 2015. One year later, on January 19, 2016, Chmiel filed a complaint against U.S. Bank to quiet title to the Property. He argued that the Mortgage was a cloud on his fee simple title and asked the trial court to: (1) determine that he owned a fee simple title to the Property; (2) find that the Mortgage had expired upon Ann’s death because it applied to only her life estate; and (3) quiet his fee simple title to the Property against U.S. Bank. U.S. Bank filed an Answer raising the affirmative defense that it was a holder in due course of the Mortgage.

On March 23, 2017, Chmiel filed a motion for summary judgment. As designated evidence, Chmiel attached an affidavit in which he averred that he had not signed the 2005 Deed and had not been aware that Ann had obtained a mortgage on the Property. He also averred that he had never transferred his interest in the Property to Ann or to any other party.

U.S. Bank filed a response in opposition to Chmiel’s summary judgment motion, as well as its own cross-motion for summary judgment. In its cross-motion, U.S. Bank argued that: (1) it was a bona fide mortgagee because it had purchased the right to enforce the Mortgage in good faith and without any notice of Chmiel’s claims regarding the validity of the 2005 Deed; and (2) Chmiel’s cause of action was barred by either the statute of limitations for forgery or the doctrine of laches. In support of its argument that it had not received notice, U.S. Bank contended that, under Indiana law, the signatures on the 2005 Deed were prima facie valid because they contained a certificate of acknowledgement from a notary public. Therefore, according to U.S. Bank, it had not had cause to question the 2005 Deed’s validity or had notice of Chmiel’s allegations.

U.S. Bank also designated an affidavit from Notary Davis, who had notarized the October 13, 2005 signature page of the 2005 Deed. In the affidavit, Notary Davis averred that she had met with Ann and Chmiel on October 13, 2005 at her office and that she knew, based on her knowledge of the “manner in which [she] kept and maintained records of transactions” that she “would have reviewed and made a photocopy of each of their [d]rivers [l]icenses to confirm their identities” and would have kept those photocopies in her notary journal. (App. Vol. 3 at 41-42). She explained that those records had been “destroyed in the ordinary course after the passage of five years.” (App. Vol. 3 at 42). Notary Davis further averred that she would not have notarized the quitclaim deed unless she had witnessed both Ann and Chmiel personally sign it on October 13, 2005.

Chmiel filed a response to U.S. Bank’s cross-motion for summary judgment in which he disputed U.S. Bank’s arguments. First, Chmiel contended that U.S. Bank had waived its statute of limitations, laches, and bona fide mortgagee arguments by failing to raise them as affirmative defenses in its Answer. Alternatively, he claimed that the statute of limitations and laches arguments failed as a matter of law because he had not unduly delayed in asserting his rights or filed his quiet title claim past the statute of limitations. As for U.S. Bank’s bona fide mortgagee claim, Chmiel argued that: (1) a forged deed cannot convey property rights, even to a bona fide mortgagee; (2) U.S. Bank had not paid consideration for the Mortgage, as required to qualify as a bona fide mortgagee; and (3) U.S. Bank had received notice regarding Chmiel’s claims and, therefore, did not qualify as a bona fide mortgagee.

In support of his arguments, Chmiel designated a supplemental affidavit in which he disputed that he had met with Notary Davis on October 13, 2005. Specifically, he averred:

I have never been in that office. According to a calendar, October 13, 2005 was a Thursday. At that time in my career, I was working as a police officer for the police department of the City of Elkhart, Indiana. The City of Elkhart Police Department’s records show that I was on temporary duty on October 13, 2005. My temporary duty at that time had me at the Indiana State Police Post in Indianapolis for a Governor’s Council meeting for impaired and dangerous drivers. I did not travel to Knox, Indiana on that day to be with my mother to sign the [2005 Deed]. The other date on the [2005 Deed] for my forged signature was October 6, 2005. The City of Elkhart Police Department records show I was working my regular dut[y] that day which was a patrol officer on the midnight shift.

(App. Vol. 4 at 27-28). Also in his affidavit, Chmiel contended that there were “obvious differences observable from a comparison of [his] signature on [his affidavits] . . . and [his] purported signatures on the [2005 Deed].” (App. Vol. 4 at 28). He speculated that his purported signatures on the 2005 Deed appeared to be in Ann’s handwriting.

In addition to his own affidavit, Chmiel designated an affidavit from Mary Chomer (“Chomer”) of the Elkhart City Police Department, as well as his employee service record for 2005. In her affidavit, Chomer explained that her job responsibilities as an employee of the Elkhart Police Department included creating employee service records for the Police Department’s employees. She averred that she had compiled Chmiel’s employee service record in 2005 and that Chmiel had been on “temporary duty” on October 13, 2005. “[T]emporary duty” meant that “Chmiel [had] worked that day but not his usual responsibilities.” (App. Vol. 4 at 174). As for October 6, 2005, the date listed on the second signature page in the 2005 Deed, Chomer averred that Chmiel had performed his “usual responsibilities that day.” (App. Vol. 4 at 174). Chmiel’s employee service record for 2005, which Chomer attached to her affidavit, was consistent with these averments.

Chmiel also designated interrogatories from U.S. Bank. These interrogatories included the following relevant questions from Chmiel and answers from U.S. Bank, which were relevant to the question of whether U.S. Bank had paid consideration for the Note and Mortgage and, thus, qualified as a bona fide mortgagee:

1. How much money did U.S. Bank pay for the assignment of the Note and Mortgage[?]. . . .

ANSWER NO. 1: Subject to and without waiving any General Objection, the Interrogatory seeks information in the possession of a non-party to this litigation, and is not reasonably calculated to lead to relevant or admissible evidence. U.S. Bank is neither the holder of the Note nor the assignee of the Mortgage.

* * * * *

4. When did U.S. Bank purchase the Mortgage and/or take an assignment of the mortgage[?]

ANSWER No. 4: Subject to and without waiving any General Objection, U.S. Bank neither purchased nor is it the assignee of the Mortgage. See also Answer No. 1.

5. Who did U.S. Bank purchase and/or take an assignment of the Mortgage from[?]

ANSWER NO. 5: Subject to and without waiving any General Objection, U.S. Bank neither purchased nor is it the assignee of the Mortgage. See also Answer No. 1, 4.

6. If the consideration for the assignment of the Mortgage was other than money, what was the consideration that U.S. Bank gave for the assignment of the Mortgage[?]

Answer No. 6: Subject to and without waiving any General Objection, U.S. Bank is not the assignee of the Mortgage. See also Answer 1, 4, 5.

(App. Vol. 4 at 161-62) (Emphasis added).

In support of his argument that U.S. Bank had received notice of his claims regarding the 2005 Deed prior to the assignment of the Mortgage, Chmiel designated U.S. Bank’s attorney’s “Notice of Appearance” from Ann’s bankruptcy proceedings. (App. Vol. 4 at 155). Per the Notice of Appearance, U.S. Bank’s attorney had represented “GMAC Mortgage LLC successor by merger of GMAC Mortgage Corp. Servicer for U.S. Bank National Association as Trustee” in the bankruptcy case. (App. Vol. 4 at 155). In his response to U.S. Bank’s cross-motion for summary judgment, Chmiel argued that this notice raised a genuine issue of material fact regarding whether GMAC Mortgage had been the loan servicer for the Mortgage on behalf of U.S. Bank at the time of his March 29, 2010 letter to GMAC Mortgage and that U.S. Bank had, therefore, received notice of his claim before MERS assigned the Mortgage to U.S. Bank on July 28, 2011.

On July 31, 2017, the trial court entered an order denying Chmiel’s motion for summary judgment and granting U.S. Bank’s cross-motion. The court ruled that: (1) Chmiel’s claim was barred by the statute of limitations because it was based on a forgery allegation, which carries a statute of limitations of two years; (2) Chmiel’s claim was barred by the doctrine of laches; (3) the 2005 Deed was valid because an acknowledgment by a notary carries a presumption of validity, and Chmiel had designated only a self-serving affidavit to rebut that presumption; and (4) the Mortgage was valid because U.S. Bank was a bona fide mortgagee. Chmiel now appeals.

Decision

On appeal, Chmiel challenges the trial court’s grant of U.S. Bank’s cross-motion for summary judgment but does not dispute the trial court’s denial of his own motion for summary judgment. We review a grant of summary judgment de novo,applying the same standard as the trial court. Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014). Summary judgment is appropriate only where the designated evidence shows “that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Ind. Trial Rule 56(C). “A fact is `material’ if its resolution would affect the outcome of the case, and an issue is `genuine’ if a trier of fact is required to resolve the parties’ differing accounts of the truth, or if the undisputed material facts support conflicting reasonable inferences.” Williams v. Tharp, 914 N.E.2d 756, 761 (Ind. 2009) (quoting T.R. 56 (C)). On review, we may affirm a grant of summary judgment on any grounds supported by the designated evidence. Catt v. Bd. of Comm’rs of Knox Cty., 779 N.E.2d 1, 3 (Ind. 2002).

The moving party “bears the initial burden of making a prima facie showing that there are no genuine issues of material fact and that it is entitled to judgment as a matter of law.” Gill v. Evansville Sheet Metal Works, Inc., 970 N.E.2d 633, 637 (Ind. 2012). If the moving party meets this burden, the nonmoving party must designate evidence demonstrating a genuine issue of material fact. Id. We “resolve all questions and view all evidence in the light most favorable to the non-moving party, so as to not improperly deny him his day in court.” Alldredge v. Good Samaritan Home, Inc., 9 N.E.3d 1257, 1259 (Ind. 2014) (internal citation omitted). We “consciously err[] on the side of letting marginal cases proceed to trial on the merits, rather than risk short-circuiting meritorious claims.” Hughley, 15 N.E.3d at 1004. In other words, “`summary judgment is not a summary trial.'” Siner v. Kindred Hosp. Ltd. P’ship, 51 N.E.3d 1184, 1190 (Ind. 2016) (quoting Hughley, 15 N.E.3d at 1004-05) (internal quotation omitted). “Defeating summary judgment requires only a genuine issue of material fact, not necessarily a persuasive issue of material fact.” Id.

Chmiel’s claim against U.S. Bank was an action to quiet title. An action to quiet title brings into issue all claims regarding the property in question. Consolidation Coal Co. v. Mutchman, 565 N.E.2d 1074, 1078 (Ind. Ct. App. 1990), trans. denied. A plaintiff may recover only upon the strength of his own title and must show that he has legal title with a present right of possession paramount to the title of the defendant. Id. It is therefore appropriate for a defendant to prove that the plaintiff does not have title or interest in the property. Id. Considering this standard in the context of summary judgment, U.S. Bank had the burden of showing that Chmiel did not have legal title to the Property with a present right of possession paramount to its own interest in the Mortgage. See id.

To meet this burden, U.S. Bank presented four alternate grounds for its argument that it deserved summary judgment on its cross-motion: (1) the statute of limitations for forgery applied to Chmiel’s claim, and that statute of limitations had run; (2) the doctrine of laches warranted judgment in favor of U.S. Bank; (3) the 2005 Deed was valid, so Chmiel did not have legal title to the Property; and (4) U.S. Bank was a bona fide mortgagee, so the Mortgage was valid. The trial court granted summary judgment to U.S. Bank on all of these grounds. Notably, while the trial court split these third and fourth points into separate findings, they are both grounds for concluding that the fee simple interest in the Property—whether owned by Chmiel or not—was subject to the Mortgage, thereby defeating Chmiel’s quiet title action by demonstrating that Chmiel did not have a “paramount” interest in the Property. See Consolidation Coal Co., 565 N.E.2d at 1078. Chmiel disputes each of these four grounds on appeal. We will address each in turn.

1. Statute of Limitations

The trial court concluded that Chmiel’s quiet title action was time-barred because it was based on a forgery claim, which carries a statute of limitations of two years. Because Chmiel had notified Homeowners that he knew about the 2005 Deed in his First Letter in 2007, the trial court ruled that the statute of limitations on his forgery claim had run in 2009. Chmiel disputes this conclusion, arguing that his claim was an action to quiet title and carries a statute of limitation of ten years. He notes that he filed his complaint in 2016, which was within ten years of his 2007 letter.

Statutes of limitation “`are practical and pragmatic devices to spare the courts from litigation of stale claims, and the citizen from being put to his defense after memories have faded, witnesses have died or disappeared, and evidence has been lost.'” Mizen v. State ex rel. Zoeller, 72 N.E.3d 458, 465 (Ind. Ct. App. 2017)(quoting Russo v. S. Developers, Inc., 868 N.E.2d 46, 48 (Ind. Ct. App. 2007)), trans. denied. “`They are enacted upon the presumption that one having a well-founded claim will not delay in enforcing it.'” Id. (quoting Morgan v. Benner, 712 N.E.2d 500, 502 (Ind. Ct. App. 1999), trans. denied). Under Indiana’s discovery rule, a cause of action accrues, and the statute of limitations begins to run, when the plaintiff knew or, in the exercise of ordinary diligence, could have discovered that an injury has been sustained as a result of the tortious act of another. Messmer v. KDK Fin. Servs., Inc., 83 N.E.3d 774 (Ind. Ct. App. 2017). Notably, a statute of limitations defense is a proper consideration on summary judgment. Mizen, 72 N.E.3d at 465. If the undisputed facts establish “`that the complaint was filed after the running of the applicable statute of limitations, the trial court must enter judgment for the defendant.'” Id. at 466.

Here, the trial court cited INDIANA CODE § 34-24-3-1 as the basis for its conclusion that Chmiel’s “claims of forgery were time barred in 2009.” (App. Vol. 4 at 187). However, INDIANA CODE § 34-24-3-1 concerns the damages that a person may recover for property offenses and does not mention statutes of limitation or forgery at all. See id. Also, Indiana courts have previously held that, when an action to quiet title incidentally alleges misconduct such as fraud or forgery, the statute of limitations for quiet title applies. See Detwiler v. Schultheis,23 N.E. 709, 711 (Ind. 1890) (holding that, where the gravamen of the action was for quiet title to real estate, not for relief against fraud, the statute for relief against fraud did not apply because “[f]raud may be, and in fact [was], an incident to the cause of action alleged in the complaint, but that [was] all”); Miladin v. Istrate, 119 N.E.2d 12, 17 (Ind. Ct. App. 1954) (considering plaintiff’s action to foreclose a mortgage, which was dependent on proving defendant’s fraud, and concluding that the fraud statute applied “when the immediate and primary object of the suit [was] to obtain relief from the fraud and not to actions which fall within some other class even though questions of fraud may rise incidentally”), reh’g denied. Because the primary object of Chmiel’s suit was to quiet title to the Property rather than to obtain relief from, or damages for, Ann’s alleged forgery, we conclude that the forgery aspect of his claim was incidental, and the trial court should have applied the statute of limitations for quiet title.

The proper statute of limitations for a quiet title claim is an issue that we have not addressed in several decades; nor do the statutory provisions for quiet title explicitly establish a limit. See I.C. § 32-30-2. Chmiel argues that the proper limit is ten years because a quiet title action is equivalent to an action “for the recovery of the possession of real estate,” which carries a ten-year statute of limitations under INDIANA CODE § 34-11-2-11. While we agree with Chmiel that the proper statute of limitations is ten years, we disagree with the origin of that limit.

Historically, it appears that Indiana courts applied the residual statute of limitation—the statute of limitation for actions not otherwise limited by statute—to quiet title actions, rather than the statute of limitation “for the recovery of possession of real estate.” In Royse v. Turnbaugh, 20 N.E. 485, 488-89 (Ind. 1889), for example, our supreme court noted that the statute of limitations for the recovery of possession of real estate was twenty years, whereas “all actions not limited by any other statute shall be brought within fifteen years.” The supreme court later cited this section of Royse in Stonehill v. Swartz, 28 N.E. 620, 625 (Ind. 1891), as the basis for its conclusion that the proper statute of limitations for a quiet title action was fifteen years. By citing the Royse Court’s reference to the residual statute of limitations, the Stonehill Court inherently determined that the statute of limitations for “the recovery of possession of real estate,” which the Royse Court had also cited, did not apply to quiet title actions. See id. Other courts subsequently followed suit, applying a fifteen-year limit to quiet title actions. See Eve v. Louis, 91 Ind. 457, 472 (Ind. 1883)Bradshaw v. Van Winkle, 32 N.E. 877, 878 (Ind. 1892) (“This is an action to quiet title to real estate, and would not be barred in less than 15 years.”) (citing Eve, 91 Ind. at 472 rather than a statutory basis for its fifteen-year limit).

Our residual statutory limit is no longer fifteen years, but we do still have a provision establishing a residual limit. Under INDIANA CODE § 34-11-1-2, “[a] cause of action that: (a) arises on or after September 1, 1982; and (2) is not limited by any other statute; must be brought within ten (10) years.” The parties have not directed us to any statutes that have been enacted since Royse and Eve that could potentially apply to quiet title claims.[3] Accordingly, we conclude that the residual statute of limitation still applies to quiet title claims. See Stonehill, 28 N.E. at 625. Therefore, a ten-year limit applied to Chmiel’s claim under our current statutory scheme. See I.C. § 34-11-1-2. Because he indicated his knowledge of the 2005 Deed in 2007 and filed his complaint in 2016, he brought his claim within that ten-year limit. Thus, the trial court erred in granting summary judgment on the ground that Chmiel’s claim was time-barred.[4]

2. Laches

Next, Chmiel argues that the trial court erred when it determined that his claim was barred by the doctrine of laches. Laches is an equitable defense that may be raised to stop a person from asserting a claim he would normally be entitled to assert. Angel v. Powelson, 977 N.E.2d 434, 445 (Ind. Ct. App. 2012). “`Laches is neglect for an unreasonable length of time, under circumstances permitting diligence, to do what in law should have been done.'” Id. (quoting Gabriel v. Gabriel, 947 N.E.2d 1001, 1007 (Ind. Ct. App. 2011). “`The general doctrine is well[-]established and long[-]recognized: Independently of any statute of limitation, courts of equity uniformly decline to assist a person who has slept upon his rights and shows no excuse for laches in asserting them.'” Id. (quoting SMDfund, Inc. v. Fort-Wayne-Allen Cty. Airport Auth., 831 N.E.2d 725, 729 (Ind. 2005), cert. deniedreh’g denied) (internal quotation omitted).

The doctrine of laches may bar a plaintiff’s claim if a defendant establishes the following three elements: (1) an inexcusable delay in asserting a known right; (2) an implied waiver arising from knowing acquiescence in existing conditions; and (3) a change in circumstances causing prejudice to the adverse party. Id. A mere lapse of time is not sufficient to establish laches; it is also necessary to show an unreasonable delay that causes prejudice or injury. Id. Prejudice or injury may be created if a party, with knowledge of the relevant facts, permits the passing of time to work a change of circumstances by the other party. Id. Notably, the doctrine of laches “may bar a plaintiff’s claim even though the applicable statute of limitations has not yet expired if the laches are of such character as to work an equitable estoppel (which contains the additional element of reliance by the defendant).” Shafer v. Lambie, 667 N.E.2d 226, 231 (Ind. Ct. App. 1996).

Here, U.S. Bank argues that Chmiel committed inexcusable delay in asserting his rights because he knew about the forged deed for several years before he filed his complaint to quiet title. U.S. Bank again claims that this length of time was several years longer than the two-year statute of limitation for forgery and notes that, because Chmiel did not file a lawsuit to defend his property right, U.S. Bank did not receive notice through the chain of title regarding Chmiel’s prior claims. U.S. Bank also emphasizes that Chmiel did not file a claim to quiet title even after the foreclosure and bankruptcy courts declined to address the merits of his claims as an intervening party.

Even if we assume that U.S. Bank met its initial burden of proving the elements for laches, Chmiel designated evidence raising a genuine issue of material fact. First, we note that, as we determined above, Chmiel did not file his complaint to quiet title outside of the statute of limitations. He also designated evidence that he repeatedly defended his interest in the Property over the years. Specifically, he notified Homeowners and its subsequent assignees in the First, Second, and Third Letters that the 2005 Deed had been forged and that he acquiesced with the Mortgage only to the extent that it applied to Ann’s life estate. Because the companies did not respond to his First and Second Letters, he did not receive any indication that they did not agree with his assertion that the Mortgage applied to only Ann’s life estate. Chmiel also designated evidence that he later moved to intervene in Ann’s foreclosure proceedings and Ann’s bankruptcy proceedings to defend his property interest. Based on this evidence, we conclude that there remains a question of fact regarding the elements of laches, namely whether Chmiel committed inexcusable delay in asserting his known right and knowingly acquiesced in existing conditions. Accordingly, the trial court erred in granting summary judgment on that ground.

3. Validity of 2005 Deed

Next, Chmiel challenges the trial court’s conclusion that the 2005 Deed was valid and, therefore, U.S Bank’s summary judgment motion was warranted because Chmiel did not have an interest in the Property. The trial court based its conclusion on INDIANA CODE § 32-21-9-2, which provides that:

An acknowledgment or other notarial act made substantially in the form prescribed by section 1 of this chapter is prima facie evidence:

(1) that the person named in the instrument as having acknowledged or executed the instrument;

(A) appeared in person before the officer taking the acknowledgment;

(B) was personally known to the officer to be the person whose name was subscribed to the instrument; and

(C) acknowledged that the person signed the instrument as a free and voluntary act for the uses and purposes set forth in the instrument. . . .

Citing this provision, the trial court concluded that the two notarized signature pages in the 2005 Deed were prima facie evidence that Chmiel, rather than another person, signed the 2005 Deed. Although Chmiel designated an affidavit in which he averred that he was employed in a different location on the day the 2005 Deed was signed and notarized, the trial court concluded that this affidavit was self-serving and insufficient to rebut the presumption of the prima facie evidence.

On appeal, Chmiel argues that the trial court improperly weighed the evidence

and that there was a genuine issue of material fact regarding whether he signed the 2005 Deed. We agree. First, we note that the trial court applied the incorrect standard to its decision. The statutory provision the trial court cited, INDIANA CODE § 32-21-9-2, falls within Chapter 9 of Article 21, which concerns “Written Instruments by Members of the Armed Forces.” See I.C. § 32-21-9. The 2005 Deed was not a written instrument by a member of the armed forces, so this provision was inapplicable. Instead, the trial court should have applied INDIANA CODE § 32-21-2-12, which concerns certificates of acknowledgment, and provides that a “certificate of the acknowledgment of a conveyance or instrument of writing” is “not conclusive and may be rebutted and the force and effect of it contested by a party affected by the conveyance or instrument.”

Second, the trial court incorrectly concluded that a self-serving affidavit is insufficient to present a genuine issue of fact. Our supreme court has held otherwise. See Hughley, 15 N.E.3d at 1004. Moreover, Chmiel did not present only his own self-serving affidavit. He also designated Chomer’s affidavit and his employment record, which confirmed that he had been assigned to temporary duty, which Chomer averred meant that he had worked, but “not his usual responsibilities,” on one of the days that the 2005 Deed had been signed and notarized. (App. Vol. 4 at 174). We conclude that this evidence was sufficient to raise a genuine issue of material fact regarding whether Chmiel signed the 2005 Deed, and the trial court therefore erred when it granted summary judgment on this issue.

4. Bona Fide Mortgagee

Finally, Chmiel disputes the trial court’s determination that U.S. Bank is a bona fide mortgagee. Generally, a bona fide mortgagee is entitled to protection from interest-holders outside the chain of title as a matter of equity. Jenner v. Bloomington Cellular Servs., Inc., 77 N.E.3d 1232, 1237 (Ind. Ct. App. 2017), trans. denied. As a result, the trial court’s determination that U.S. Bank was a bona fide mortgagee served to protect U.S. Bank’s interest in the Mortgage, thereby defeating Chmiel’s action to quiet title regarding the Mortgage. See Consolidation Coal Co., 565 N.E.2d at 1078 (holding that a plaintiff seeking to quiet title must show that he has legal title with a present right of possession paramount to the title of the defendant).

In order to qualify as a bona fide purchaser/mortgagee, one must purchase “in good faith, for valuable consideration, and without notice of outstanding rights of others.” U.S. Bank, Nat’l Ass’n v. Jewell Invs., Inc., 69 N.E.3d 524, 529 (Ind. Ct. App. 2017) (emphasis in original and added). Here, Chmiel argues that U.S. Bank was not a bona fide mortgagee because it did not purchase the Note and Mortgage for valuable consideration and because it had notice of his dispute regarding the 2005 Deed and the Mortgage.

With respect to consideration, U.S. Bank contends that it designated evidence that Ann received $40,000 when she executed the Note and Mortgage. However, we disagree that this evidence proves that U.S. Bank gave consideration for the Mortgage because the record shows that Homeowners— not U.S. Bank or RASC—gave $40,000 to Ann in exchange for the Note and Mortgage. It is likely that Homeowners’ subsequent assignees paid consideration to Homeowners in exchange for the right to enforce the Note and Mortgage, but U.S. Bank did not designate any evidence of the consideration it gave for that assignment. Absent such evidence, U.S. Bank did not meet its burden of proving that it qualified as a bona fide mortgagee.

Moreover, even if U.S. Bank had designated evidence regarding its consideration, Chmiel subsequently designated evidence raising a genuine issue of material fact. Specifically, in the interrogatories that Chmiel designated as evidence, he asked U.S. Bank how much money it had paid for the assignment of the Note and Mortgage. In its response, U.S. wrote: “U.S. Bank is neither the holder of the Note nor the assignee of the Mortgage.” (App. Vol. 4 at 161). Likewise, when Chmiel asked U.S. Bank what consideration it had given for the assignment if the consideration “was other than money,” U.S. Bank again responded: “U.S. Bank is not the assignee of the mortgage.” (App. Vol. 4 at 162). It may be that U.S. Bank’s answers in these interrogatories were attempts to avoid Chmiel’s questions by providing the technical truth that it did not purchase the assignment because it served as Trustee for RASC. However, interpreting U.S. Bank’s answers literally and in the light most favorable to the non-movant, U.S. Bank denied paying consideration for the Note and Mortgage. Thus, Chmiel’s designated evidence raised a genuine issue of material fact regarding whether U.S. Bank paid consideration for the Mortgage.

Next, Chmiel argues that there was a genuine issue of fact regarding whether U.S. Bank received notice of his allegations concerning the 2005 Deed prior to the assignment of the Mortgage. In its cross-motion for summary judgment, U.S. Bank argued that it did not have notice because Chmiel’s allegations were not a part of the chain of title for the Property, and it had no cause to believe that a notarized deed would be invalid.

The law recognizes both constructive and actual notice. Bank of N.Y. v. Nally, 820 N.E.2d 644, 648 (Ind. 2005). A “`purchaser of real estate is presumed to have examined the records of such deeds as constitute the chain of title thereto under which he claims, and is charged with notice, actual or constructive, of all facts recited in such records showing encumbrances, or the non-payment of purchase money.'” Id. (quoting Smith v. Lowry, 15 N.E. 17, 20 (1888)). A mortgage provides constructive notice to subsequent purchasers when it is properly acknowledged and recorded. Id. “`[A] record outside the chain of title does not provide notice to bona fide purchasers for value.'” Id. (quoting Szakaly v. Smith, 544 N.E.2d 490, 492 (Ind. 1989)). However, actual notice is equally binding on mortgagees. See Weathersby v. JPMorgan Chase Bank, N.A., 906 N.E.2d 904, 911 (Ind. Ct. App. 2009). Notice is actual when it has been directly and personally given to the person to be notified. Id. Additionally, actual notice may be implied or inferred from the fact that the person charged had means of obtaining knowledge that he did not use. Id. Whether knowledge of an adverse interest will be imputed in any given case is a question of fact to be determined objectively from the totality of the circumstances. Id. These rules apply to both purchasers and mortgagees. Id.

U.S. Bank initially met its burden of producing evidence that it did not receive notice when it demonstrated that none of Chmiel’s allegations were part of the chain of title. See Bank of N.Y., 820 N.E.2d at 648 (“`[A] record outside the chain of title does not provide notice to bona fide purchasers for value.'”) (quoting Szakaly, 544 N.E.2d at 492). However, Chmiel subsequently designated evidence raising a genuine issue of material fact regarding whether, even if U.S. Bank did not have constructive notice of his allegations, it did have actual notice.

Chmiel directs our attention to U.S. Bank’s counsel’s Notice of Appearance in Ann’s bankruptcy proceedings, which he designated as evidence. In this Notice of Appearance, U.S. Bank’s counsel stated that she represented “GMAC Mortgage LLC successor by merger of GMAC Mortgage Corp. Servicer for U.S. Bank National Association as Trustee” in the bankruptcy case. (App. Vol. 4 at 155) (emphasis added). Chmiel argues that this statement proves that GMAC Mortgage was and/or is U.S. Bank’s loan servicer. Because he notified GMAC Mortgage of his allegations regarding the 2005 Deed in his March 29, 2010 Third Letter, he argues that U.S. Bank should have received notice of his allegations through GMAC Mortgage before MERS assigned the Mortgage to U.S. Bank on July 28, 2011.

This argument depends on Chmiel’s contention that GMAC Mortgage received notice of his allegations before U.S. Bank assumed ownership of the Note and Mortgage and that his notice to GMAC Mortgage can therefore be imputed to U.S. Bank. Addressing this second point first, we agree that GMAC Mortgage’s knowledge can be imputed to U.S. Bank. As a loan servicer, GMAC Mortgage was an agent for the owner of the Note and Mortgage, and under agency law, an agent’s knowledge may be imputed to its principal. See Lexington Ins. Co. v. Am. Healthcare Providers, 621 N.E.2d 332, 341 (Ind. Ct. App. 1993) (“[T]he knowledge of an agent acting within the scope of his authority is imputed to the principal.”), trans. denied.

However, the question of whether GMAC Mortgage received notice of Chmiel’s allegations before U.S. Bank assumed ownership of the Note and Mortgage is complicated by the ambiguous nature of MERS and its involvement in mortgage assignments.[5] Chmiel’s argument presumes that U.S. Bank assumed an ownership interest in the Mortgage when MERS officially assigned the Mortgage to U.S. Bank on July 28, 2011. However, that is not necessarily true, based on MERS’ involvement in the Mortgage assignment. Our supreme court explained the complex history of mortgages and the involvement of MERS in mortgage assignments in Citimortgage, Inc. v. Barabas, 975 N.E.2d 805, 809 (Ind. 2012), as follows:

Traditional mortgages were folies á deux; the cast of characters consisted solely of Borrower and Lender. Lender, a bank, raised funds through customer deposits and loaned those funds out to Borrower. Lender retained both the mortgage and the promissory note until Borrower had paid his debt in full. Today, a typical mortgage is better described as a mass delusion, in which Borrower and Lender are joined by Loan Servicer, Title Company, Mortgage Broker, Underwriter, Trustee, and various other characters that facilitate the negotiation of mortgages on the secondary market.

The change began in the 1970s with the invention of the mortgage-backed security, a financial instrument that allowed investors to trade mortgages in the same way that they traded stocks and bonds. First, a borrower works with a broker to obtain a loan from a lender, who receives credit from an investment bank to fund the loan. The lender then sells the loan back to the investment bank, which bundles it together with a few thousand others and divides the bundle into shares. These shares are sold to investors, who receive a certain amount of the income that the bundle earns every month when borrowers make their mortgage payments.

This process, called “securitization,” used to require multiple successive assignments, each of which had to be recorded on the county level at considerable inconvenience and expense to the investment banks involved. In the mid-1990s, seeking to ameliorate those evils, a consortium of investment banks created [MERS]. MERS maintains “a computer database designed to track servicing and ownership rights of mortgage loans anywhere in the United States.” MERS member banks list MERS as both “nominee” for Lender and as “mortgagee” on their mortgage documents. MERS member banks can then buy and sell the note among themselves without recording an assignment of the mortgage. In the event of default, MERS simply assigns the mortgage to whichever member bank currently owns the note, and that bank forecloses on the borrower.

(internal citations omitted).

As the supreme court described, an assignment of a mortgage is no longer necessarily indicative of a transfer of ownership. Instead, it is possible that an assignee may own the rights to a note and mortgage for a period of time within MERS’ records before it becomes the assignee of the mortgage for purposes of title records, as long as it does not need to foreclose on the borrower. See id.Applying this understanding to the instant case, it is possible that U.S. Bank bought the rights to the Note and Mortgage long before MERS officially assigned U.S. Bank the Mortgage. Accordingly, Chmiel’s designated evidence does not prove that U.S. Bank received notice of his allegations from GMAC Mortgage through Chmiel’s Third Letter before U.S. Bank purchased Note. It is possible that U.S. Bank owned the Note before Chmiel sent his Third Letter without undergoing an official assignment of the Mortgage. Nevertheless, we agree with Chmiel that he raised a genuine question of material fact regarding whether GMAC Mortgage received actual notice of his allegations before it became U.S. Bank’s loan servicer and U.S. Bank acquired the Note. That genuine issue of material fact should be resolved in further proceedings.

Because we conclude that the statute of limitations did not bar Chmiel’s claim and that there remain genuine issues of material fact regarding whether: (1) the doctrine of laches bars Chmiel’s claim; (2) the 2005 Deed is valid; and (3) U.S. Bank was a bona fide mortgagee, the trial court erred in granting summary judgment on U.S. Bank’s cross-motion for summary judgment.[6] We reverse and remand for further proceedings.

Reversed and remanded.

Kirsch, J., and Bailey, J., concur.

[1] Throughout the documents in this case, the parties alternately refer to U.S. Bank as a bona fide purchaser and a bona fide mortgagee. We conclude that the parties are using different terminology for the same concept—the doctrine of bona fide purchaser in the context of purchasing the right to enforce a mortgage. Our case law has clarified that the bona fide purchaser doctrine can apply in the mortgage context, so the bona fide mortgagee doctrine is not distinct from the bona fide purchaser doctrine. See Weathersby v. JPMorgan Chase Bank, N.A., 906 N.E.2d 904 (Ind. Ct. App. 2009) (discussing the doctrine of bona fide purchaser in the context of a property dispute). Based on the context of the parties’ arguments, we will use the terminology “bona fide mortgagee” rather than “bona fide purchaser.”

[2] MERS did not have an ownership interest in the Mortgage or Note. It appears that RASC owned the Note, and U.S. Bank served as Trustee for RASC. A trustee of an express trust may sue or be sued in its own name without joining the trust, as long as it states the trustee’s relationship and capacity. Ind. T.R. 17. MERS is “`a computer database designed to track servicing and ownership rights of mortgage loans anywhere in the United States.'” Citimortgage, Inc. v. Barabas, 975 N.E.2d 805, 809 (Ind. 2012)(quoting Christopher L. Peterson, Foreclosure, Subprime Mortgage Lending, and the Mortgage Electronic Registration System, 78 U. CIN. L. REV. 1359, 1367-68 (2009-2010)). We will describe the nature of MERS more fully later in the Discussion section of this Opinion.

[3] Conceivably, the statute governing “[a]ctions for injuries to property other than personal property” could apply to a quiet title action. See I.C. § 34-11-2-7. However, because this statute existed when our supreme court decided Royse and Stonehill, the Court likewise inherently determined that it did not apply to quiet title actions when the Court applied the residual clause, instead. See 1881 S., p. 240, Sec. 293.

[4] Because we have decided in Chmiel’s favor on this issue, we need not address his argument that U.S. Bank waived its argument by failing to plead the statute of limitations as an affirmative defense. Nevertheless, we note that, “our courts have stated that `a statute of limitations defense may properly be raised by a motion for summary judgment’ even if not raised in the pleadings.” Mizen, 72 N.E. 3d at 466 (quoting Honeywell, Inc. v. Wilson, 500 N.E.2d 1251, 1252 (Ind. Ct. App. 1986), reh’g deniedtrans. denied). It is well-settled that the trial rules are “designed to avoid pleading traps,” and the critical inquiry is “not whether the defendant could have raised its affirmative defense earlier,” but “whether the defendant’s failure to raise the affirmative defense earlier prejudiced the plaintiff.” Borne v. Nw. Allen Cty. Sch. Corp., 532 N.E.2d 1196, 1199 (Ind. Ct. App. 1989), trans. denied. In Borne, we held that:

The presumption is that issues can be raised as they, in good faith, are developed. This presumption can be rebutted by the party against whom the new issue is raised by an affirmative showing of prejudice. In this context, delay alone does not constitute sufficient prejudice to overcome the presumption. Instead there must be a showing that the party in opposition will be deprived of, or otherwise seriously hindered in the pursuit of some legal right if injection of the new issue is permitted.

Id. (internal citations and quotations omitted).

Here, Chmiel did not prove that he was prejudiced by U.S. Bank’s delay in raising its affirmative defenses. Accordingly, we will address his arguments regarding those defenses on the merits.

[5] As stated above, on July 28, 2011, MERS, as “nominee for Homeowners Loan Corporation, its successors and/or assigns,” assigned the Mortgage to U.S. Bank “as trustee for RASC.” (App. Vol. 4 at 152).

[6] U.S. Bank also argues that summary judgment was warranted based on the doctrine of equitable estoppel. However, U.S. Bank did not raise this argument in its cross-motion for summary judgment, and it is “well-settled that `[i]ssues not raised before the trial court on summary judgment cannot be argued for the first time on appeal and are waived.'” Herzo v. City of Lawrenceburg, 81 N.E.3d 1146, 1156-57 (Ind. Ct. App. 2017) (quoting Dunaway v. Allstate Ins. Co., 813 N.E.2d 376, 387 (Ind. Ct. App. 2004)). Accordingly, U.S. Bank has waived that argument for appeal.

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



Posted in STOP FORECLOSURE FRAUD0 Comments

Foreclosures to be sold back to owners in ACLU, city settlement

Foreclosures to be sold back to owners in ACLU, city settlement

Detroit News-

The ACLU of Michigan has reached a settlement in its 2016 lawsuit against Detroit that includes a deal to save potentially thousands of foreclosed homes over the next three years by selling them back to low-income owners for $1,000.

Under the plan, a group of homes headed to this year’s fall tax auction will instead be bought by the city and sold to owner-occupants who prove they qualified for the city’s poverty tax exemption, which lowers or eliminates tax bills.

The Detroit City Council voted 7-0 Tuesday to approve the settlement. Council members James Tate and Janee Ayers were not present for the vote.

[DETROIT NEWS]

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



Posted in STOP FORECLOSURE FRAUD0 Comments

Judge Faults BofA, Other Banks for ‘Persistent Neglect’ of Foreclosure Cases

Judge Faults BofA, Other Banks for ‘Persistent Neglect’ of Foreclosure Cases

New York Law Journal-

A Queens judge took Bank of America to task for failing to file a required affidavit in a foreclosure case, but said the bank is not alone in this regard—there is a “pattern of persistent neglect” among foreclosure plaintiffs in prosecuting their cases, the judge said. Queens Supreme Court Justice Martin Schulman denied Bank of America’s motion to vacate dismissal of a foreclosure action originally filed in 2014, finding that the bank took no action in the case from 2015 until almost two years later when counsel for the bank failed to follow a court order to file an order of reference.

Bank of America’s counsel said that the order of reference wasn’t filed because the bank had not yet provided a required affidavit of merit, but the case was dismissed for the bank’s failure to comply with the order.

Schulman’s patience with the bank’s conduct in the case appeared to run thin: He said that he has been “more than lenient” with the bank, noting that he scheduled a status conference in the case after it had been collecting dust for almost two years, and said that the waiting-on-an-affidavit excuse is one that “this court has repeatedly heard over the years from other plaintiffs in these mortgage foreclosure actions.”

[NEW YORK LAW JOURNAL]

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



Posted in STOP FORECLOSURE FRAUD0 Comments

Regulators Extend the Next Resolution Plan Filing Deadline for 14 Domestic Firms

Regulators Extend the Next Resolution Plan Filing Deadline for 14 Domestic Firms

The Federal Reserve Board and the Federal Deposit Insurance Corporation on Monday announced that they have extended the next resolution plan filing deadline for 14 domestic firms by one year to December 31, 2019, to allow additional time for the agencies to provide feedback to the firms on their last submissions and for the firms to produce their next plan submissions.

Resolution plans, required by the Dodd-Frank Act and commonly known as living wills, describe an institution’s strategy for rapid and orderly resolution under bankruptcy in the event of material financial distress or failure.

The 14 domestic firms are: Ally Financial Inc., American Express Company, BB&T Corporation, Capital One Financial Corporation, Citizens Financial Group, Fifth Third Bancorp, Huntington Bancshares Incorporated, KeyCorp, M&T Bank Corporation, Northern Trust Corporation, Regions Financial Corporation, SunTrust Banks, Inc., The PNC Financial Services Group, Inc., and U.S. Bancorp.

Pursuant to the Economic Growth, Regulatory Reform, and Consumer Protection Act (EGRRCPA), firms with less than $100 billion in total consolidated assets are no longer subject to resolution plan requirements.

Separately, pursuant to EGRRCPA, in the next 18 months, the Board will determine which firms with more than $100 billion but less than $250 billion in total consolidated assets will be subject to the resolution plan requirement moving forward. The agencies will announce further actions as a result of the new law at a later date.

###

Media Contacts:
Federal Reserve Eric Kollig 202-452-2955
FDIC Julianne Breitbeil 202-898-6895

FDIC: PR-41-2018

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



Posted in STOP FORECLOSURE FRAUD0 Comments

CHRZUSZCZ v. WELLS FARGO BANK, NA | FL 1st DCA- Bank failed to meet HUD’s face-to-face counseling requirement of section 203.604, the burden of proving the condition precedent was shifted back to the Bank.

CHRZUSZCZ v. WELLS FARGO BANK, NA | FL 1st DCA- Bank failed to meet HUD’s face-to-face counseling requirement of section 203.604, the burden of proving the condition precedent was shifted back to the Bank.

PIOTR CHRZUSZCZ, Appellant,
v.
WELLS FARGO BANK, N.A., Appellee.

No. 1D16-3239.
District Court of Appeal of Florida, First District.

June 28, 2018.
On appeal from the Circuit Court for Duval County, Virginia Norton, Judge.

Mark P. Stopa of the Stopa Law Firm, Tampa, for Appellant.

Michele L. Stocker of Greenberg Traurig, P.A., Fort Lauderdale; Kimberly S. Mello and Danielle M. Diaz of Greenberg Traurig, P.A., Tampa, for Appellee.

M.K. THOMAS, J.

Piotr Chrzuszcz, “the Borrower,” appeals the final judgment of foreclosure in favor of Wells Fargo, “the Bank.” He argues the trial court erred by denying his Motion for Involuntary Dismissal because the Bank failed to comply with a condition precedent to foreclosure. We agree and reverse and remand for entry of an involuntary dismissal.

I. Facts

In 1998, the Borrower executed an FHA fixed-rate promissory note, paragraph 6(B) of which indicated acceleration would only be permitted if the Lender followed Housing and Urban Development, “HUD,” regulations:

If the Borrower defaults by failing to pay in full any monthly payment, then Lender may, except as limited by regulations of the Secretary in the case of payment defaults, require immediate payment in full of the principal balance remaining due and all accrued interest. Lender may choose not to exercise this option without waiving its rights in the event of any subsequent default. In many circumstances regulations issued by the Secretary will limit Lender’s rights to require immediate payment in full in the case of payment defaults. This Note does not authorize acceleration when not permitted by HUD regulations. As used in this Note, “Secretary” means Secretary of Housing and Urban Development or his or her designee.

(Emphasis added).

The HUD regulation at issue in this case requires the Bank, prior to initiating a foreclosure action, to either have a face-to-face interview with the Borrower, or reasonably attempt to do so:

b) The mortgagee must have a face-to-face interview with the mortgagor, or make a reasonable effort to arrange such a meeting, before three full monthly installments due on the mortgage are unpaid. If default occurs in a repayment plan arranged other than during a personal interview, the mortgagee must have a face-to-face meeting with the mortgagor, or make a reasonable attempt to arrange such a meeting within 30 days after such default and at least 30 days before foreclosure is commenced . . . .

24 C.F.R. § 203.604(b) (2012).

In 2012, the Bank filed a verified complaint seeking to foreclose the mortgage and recover the indebtedness under the note as a result of the Borrower’s default. The complaint included a general claim that the Bank had satisfied all conditions precedent to initiating suit: “[A]ll conditions precedent, to acceleration of the subject loan and foreclosure of the subject Mortgage, have been performed, have occurred, or were waived.” In response, the Borrower filed an answer, asserting, “[s]pecifically, and without limitation, [the Bank] failed to comply with the requirements of the National Housing Act, 12 U.S.C. § 1701x(c)(5) and 24 C.F.R. 203.604, under which [the Bank] is required to complete pre-foreclosure counseling with the Defendant.” The Borrower did not, however, plead the failure to complete conditions precedent as a separate affirmative defense.

At the first bench trial, the Borrower argued that the Bank’s failure to comply with the face-to-face counseling requirement was a condition precedent to filing suit. Without explanation, the trial judge declined to entertain the argument. The Bank then called a single witness, Dustin Green, who was employed by the Bank as a loan verification analyst. He testified based on his review of various business records. With the exception of a default letter dated December 4, 2011, and a letter log, Green offered no testimony regarding whether the Bank complied with the face-to-face counseling requirement.

After the Bank rested its case, the Borrower moved for an involuntary dismissal based on the Bank’s lack of standing. The trial court granted the motion, entering an involuntary dismissal over the Bank’s objection; however, the trial court later vacated the involuntary dismissal upon the Bank’s Motion for Rehearing.

At the second bench trial, before a different trial judge, Mr. Green was again the sole witness called by the Bank. He offered no testimony regarding whether the Bank complied with the face-to-face counseling requirement. At the conclusion of the Bank’s case, the Borrower moved for an involuntary dismissal based on the Bank’s failure to comply with the face-to-face counseling requirement as a condition precedent to filing the foreclosure action.

The Bank responded that compliance with HUD regulations was an affirmative defense, as opposed to a condition precedent, and the Borrower had failed to plead noncompliance as an affirmative defense. The Borrower then recalled Mr. Green and elicited testimony that: 1) no documents reflected any face-to-face counseling occurred with the Borrower; and 2) none of the five exceptions to the face-to-face requirement applied. The Bank, as rebuttal evidence, introduced several certified letters it sent to the Borrower. The Borrower objected to the evidence as irrelevant because, with one exception, the letters predated the default.

After the presentation of all the evidence, the Borrower renewed his Motion for Involuntary Dismissal, which the trial court took under advisement. Ultimately, the trial court denied the Borrower’s Motion and entered a Final Judgment of Foreclosure. The Borrower filed a timely Motion for Rehearing, which was also denied by the trial court. This appeal followed.

II. Standard of Review

“A trial court’s ruling on a motion for involuntary dismissal is reviewed de novo.” Citigroup Mortg. Loan Trust Inc. v. Scialabba, 238 So. 3d 317, 319 (Fla. 4th DCA 2018) (citing Deutsche Bank Nat’l Tr. Co. v. Clarke, 87 So. 3d 58, 60 (Fla. 4th DCA 2012)). We likewise review de novo questions of law, such as which party bears the burden of proof. See, e.g., Brown v. Cowell, 19 So. 3d 1171 (Fla. 1st DCA 2009).

III. Analysis

The Borrower argues that the HUD requirement that the Bank either have a face-to-face interview with the Borrower, or make a reasonable effort to arrange a face-to-face meeting constituted a condition precedent to foreclosure. Accordingly, as a condition precedent, the Bank bore the burden of proving its satisfaction at trial. The Bank, on the other hand, asserts the Borrower’s allegation that it failed to comply with the face-to-face interview requirement was an affirmative defense; thus, the Borrower had the responsibility to specifically plead and prove the defense. We agree with the Borrower’s contention that, in the current case, the HUD-mandated face-to-face interview (or attempt to interview) was a condition precedent to the foreclosure action, and the Bank shouldered the burden of proving its satisfaction.

“`Conditions precedent to an obligation to perform are those acts or events, which occur subsequently to the making of a contract, that must occur before there is a right to immediate performance and before there is a breach of contractual duty.'” University Housing by Dayco Corp. v. Foch, 221 So. 3d 701, 704 (Fla. 3d DCA 2017) (quoting Land Co. of. Osceola Cty., LLC v. Genesis Concepts, Inc., 169 So. 3d 243, 247 (Fla. 4th DCA 2015) (emphasis omitted)). Where there are conditions precedent to filing the suit, the plaintiff bears the burden of proving substantial compliance. Scialabba, 238 So. 3d at 319 (citing Liberty Home Equity Sols., Inc. v. Raulston, 206 So. 3d 58, 60 (Fla. 4th DCA 2016)).

On the other hand, “[a]n affirmative defense is an assertion of facts or law by the defendant that, if true, would avoid the action.” Custer Med. Ctr. v. United Auto Ins. Co., 62 So. 3d 1086, 1096 (Fla. 2010). The defendant, as the one who raises the affirmative defense, bears the burden of proving that affirmative defense. Id.

Thus, if the Bank is correct that its alleged failure to conduct the HUD-required face-to-face interview was an affirmative defense, the Borrower bore the burden of proving it below; if, on the other hand, the face-to-face interview was a condition precedent to filing the mortgage foreclosure action, the Bank bore the burden of proving it had complied.

Florida appellate courts have addressed whether face-to-face interviews as required by section 203.604 constitute a condition precedent or an affirmative defense in a foreclosure suit. In Diaz v. Wells Fargo Bank, N.A., 189 So. 3d 279, 285 (Fla. 5th DCA 2016), it was unclear whether the HUD regulations were incorporated into the terms of the mortgage; the Fifth District held that in such cases where it was unclear whether alleged conditions precedent even applied, “the burden is on the party asserting the existence of the conditions precedent to establish their applicability.”

In Harris v. United States Bank National Association, 223 So. 3d 1030, 1032 (Fla. 1st DCA 2017), this Court recognized “[t]his case turns on whether a HUD regulation, the face-to-face counseling rule, is a condition precedent to foreclosure, and if so, whether compliance with those regulations was properly and timely pled.” We determined the HUD regulation of face-to-face counseling was a condition precedent to foreclosure pursuant to the terms of that particular mortgage; however, we also held the issue was waived where the Bank never claimed compliance and Harris did not allege noncompliance until closing arguments. Id. at 1032-33.

The case at hand is most analogous to Palma v. JPMorgan Chase Bank, 208 So. 3d 771 (Fla. 5th DCA 2016). There, as here: 1) the note and mortgage clearly required compliance with HUD regulations, including the face-to-face interview requirements in section 203.604, as a condition precedent to foreclosure; 2) the bank’s complaint alleged compliance with all conditions precedent to foreclosure; and 3) the borrower denied the allegation that conditions precedent had been completed and specifically asserted the bank had failed to comply with the HUD requirement of a face-to-face interview. Id. at 773. The Fifth District determined that Palma’s specific denial of the bank’s allegation it had satisfied all conditions precedent to the mortgage foreclosure action “shifted the burden back to Bank to prove at trial that it complied with [section 203.604].” Id. at 775. The court reasoned there was “no meaningful reason to treat compliance with section 203.604 in an FHA mortgage differently than compliance with paragraph twenty-two in a standard mortgage, which our court has determined is a condition precedent to foreclosure.” Id.

Here, as in Palma, where the Bank asserted in the complaint that all conditions precedent had been satisfied, but the Borrower denied that assertion with the specific claim that the Bank failed to meet the face-to-face counseling requirement of section 203.604, the burden of proving the condition precedent was shifted back to the Bank.

The Bank’s reliance on the Florida Supreme Court case of Custer Med Center v. United Auto Ins. Co., 62 So. 3d 1086 (Fla. 2010), is misplaced. There, the supreme court noted “a defending party’s assertion that a plaintiff has failed to satisfy conditions precedent necessary to trigger contractual duties under an existing agreement is generally viewed as an affirmative defense, for which the defensive pleader has the burden of pleading and persuasion.” Id. at 1096. However, Custer, as noted in Palma, is distinguishable from the case at hand for two main reasons. First, Custer dealt not with conditions precedent to a foreclosure action pursuant to HUD, but rather, with the issue of whether an insured’s attendance at a medical examination was a condition precedent to the existence of an automobile insurance policy that provided personal injury protection (PIP) benefits. Id.; see also Palma, 208 So. 3d at 774 n.3. Further, in Custer, the defendant raised as an affirmative defense the insured’s unreasonable failure to appear at a medical examination. 62 So. 3d at 1096. In Palma and the current case, on the other hand, the Bank initially alleged all conditions precedent had been met, and the Borrowers, in response, specifically denied those allegations. Palma, 208 So. 3d at 774 n.3. The specific denial did not amount to an affirmative defense. Thus, both here and in Palma, the burden of proving compliance with the condition precedent shifted back to the Bank.

As such, the Bank bore the burden of proving it had met the condition precedent, pursuant to section 203.604, of holding or attempting to hold face-to-face interviews with the Borrower. It failed to do so.

REVERSED and REMANDED for entry of a voluntary dismissal of this case.

ROWE and MAKAR, JJ., concur.

Not final until disposition of any timely and authorized motion under Fla. R. App. P. 9.330 or 9.331.

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



Posted in STOP FORECLOSURE FRAUD0 Comments

TFH 7/1 | Foreclosure Workshop #62: Understanding Hawaii’s 25 New Foreclosure Standing Requirements — Coming Soon To Your Jurisdiction?

TFH 7/1 | Foreclosure Workshop #62: Understanding Hawaii’s 25 New Foreclosure Standing Requirements — Coming Soon To Your Jurisdiction?

COMING TO YOU LIVE DIRECTLY FROM THE DUBIN LAW OFFICES AT HARBOR COURT, DOWNTOWN HONOLULU, HAWAII

LISTEN TO KHVH-AM (830 ON THE AM RADIO DIAL)

ALSO AVAILABLE ON KHVH-AM ON THE iHEART APP ON THE INTERNET

.

Sunday – JULY 1, 2018

Foreclosure Workshop #62: Understanding Hawaii’s 25 New Foreclosure Standing Requirements — Coming Soon To Your Jurisdiction?

.

 ———————

 

Probably the most significant positive development in foreclosure defense in the past two centuries has been occurring in Hawaii Courts just recently that promises to be shortly replicated nationwide.

For too long traditional rules of evidence have been virtually ignored in foreclosure cases, specifically and most importantly the evidentiary requirement that a foreclosing plaintiff must first prove that it is the owner of the loan having the right to foreclose.

In recent months Hawai’i appellate courts, reversing direction, have been rapidly overturning foreclosure summary judgments for lack of standing.

John and I will examine these new cases and these new Hawaii standing requirements on today’s show.

Our law firm, for instance, has won 71 appeals overall in the past 25 years in state and federal courts (averaging about 3 a year), including the United States Supreme Court, of which 22 have been foreclosure reversals in just the last 14 months (now averaging about 2 a month) based mostly on Hawaii’s new standing requirements, and we expect more than 50 more standing reversals in the next 12 months.

Every homeowner facing foreclosure and their attorneys need to understand these Hawai’i appellate cases, the opinions in which will soon to be posted on our website at www.foreclosurehour.com in our appellate section.

Some of these new overlapping standing requirements, as applied to foreclosure cases, to be discussed on our show, time permitting, will be:

1. Standing is the new fourth requirement for foreclosing, in addition to proving the loan terms, payment default, and notice of default.

2. A subsequent purchaser of property may challenge a foreclosing plaintiff’s standing.

3. A foreclosing plaintiff has the burden of proof regarding standing.

4. A foreclosing plaintiff to prove standing must prove an injury in fact.

5. A foreclosing plaintiff must prove the ability to return the original note to the borrower as part of the standing requirement.

6. A borrower in foreclosure has the right to conduct discovery on standing issues prior to summary adjudication.

7. A foreclosing plaintiff must prove it was entitled to foreclose at the time its Complaint was filed and the foreclosure case first commenced.

8. To be a qualified witness, one representing a foreclosing plaintiff must prove such personal knowledge as to the specific record keeping of every prior loan servicer and holder of the note.

9. Allonges must similarly be authenticated to prove the standing of a foreclosing plaintiff at the time suit was commenced.

10. Those signing loan documents and affidavits claiming to be attorneys in fact must prove such authority at the time of signing.

11. Proof of the standing of foreclosing plaintiffs is a jurisdictional requirement for invoking a court’s jurisdiction.

12. A verified complaint is not sufficient to prove the standing of a foreclosing plaintiff.

13. Affidavit submitted by an attorney for a foreclosing plaintiff that he or she held the note at the time a foreclosure complaint was filed held not sufficient to prove standing.

14. Being a qualified witness does not answer the next evidentiary inquiry: qualified to testify as to what?

15. An undated endorsement does not prove a foreclosing plaintiff was entitled to foreclose at the time suit was commenced.

16. An undated allonge does not prove a foreclosing plaintiff was entitled to foreclosure at the time suit was commenced.

17. The evidence of standing at a summary judgment hearing in a foreclosure case must be viewed in a light must favorable to the objecting borrower.

18. An Attorney Affirmation as to standing has no evidentiary value in a foreclosure case.

19. An affidavit that someone representing a foreclosing plaintiff viewed the original note prior to the filing of a foreclosure suit does not prove standing at the time the suit was commenced.

20. Standing at the time suit was commenced is in doubt when a copy of the note is not attached to the complaint.

21. Standing at the time suit was commenced is in doubt when a different copy of the note is attached to the complaint than is offered at a summary judgment hearing.

22. A statement in a complaint upon filing that the foreclosing plaintiff has possession of the note is not sufficient to prove standing.

23. Statements that affiant is familiar with the record keeping of another entity, without showing how, is not enough to prove standing.

24. Fact that note and mortgage were assigned to the foreclosing plaintiff prior to filing a foreclosure complaint not enough to prove standing at the time suit commenced.

25. Standing is a jurisdictional issue that can be raised in defense of a foreclosure action at every stage of the proceedings, including on appeal even for the first time or sua sponte by an appellate court.

John and I will also suggest our own two additional standing requirements for proving standing in foreclosure cases:

26. Requiring proof of standing not only at time suit is commenced, but, following the money, requiring evidence of the ownership chain of payment for the mortgage loan.

27. Requiring proof of standing not only at time suit is commenced, but both as to the note and the mortgage, and following the money as to both.

John and I will also explain why we consider the new Hawaii standing requirements embodied in Hawaii’s new Reyes-Toledo, Mattos, and Behrendt Rules as having the same purpose and positive effects in foreclosure cases as has the Miranda Rule in criminal cases.

Gary Dubin

Please go to our website, www.foreclosurehour.com, and join your fellow homeowners in the Homeowners SuperPac today.

A Membership Application is posted there waiting for your support.

 

 

.
Host: Gary Dubin Co-Host: John Waihee

.

CALL IN AT (808) 521-8383 OR TOLL FREE (888) 565-8383

Have your questions answered on the air.

Submit questions to info@foreclosurehour.com

The Foreclosure Hour is a public service of the Dubin Law Offices

Past Broadcasts

EVERY SUNDAY
3:00 PM HAWAII 
6:00 PM PACIFIC
9:00 PM EASTERN
ON KHVH-AM
(830 ON THE DIAL)
AND ON
iHEART RADIO

The Foreclosure Hour 12

 

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



Posted in STOP FORECLOSURE FRAUD0 Comments

Trump/Mulvaney-led U.S. CFPB slashes payday lender penalty

Trump/Mulvaney-led U.S. CFPB slashes payday lender penalty

Reuters-

Mick Mulvaney, head of the U.S. Consumer Financial Protection Bureau, cut in half a fine that his Obama-era predecessor sought against a payday lender and dropped some of the agency’s earlier claims in the case, three people familiar the matter told Reuters.

Mulvaney, appointed by President Donald Trump, has vowed to dial back what he says is overreach by the independent agency, which was created following the 2007-2009 financial crisis to stamp out predatory lending.

The CFPB fined South Carolina-based lender Security Finance $5 million on June 13 for harassing borrowers when collecting debt and mishandling credit report data.

[REUTERS]

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



Posted in STOP FORECLOSURE FRAUD0 Comments

Judge Trims FCA Claims Over Foreclosure Services Billing

Judge Trims FCA Claims Over Foreclosure Services Billing

LAW 360-

A New York federal judge has pared down False Claims Act litigation alleging that Fannie Mae, Freddie Mac and the government were overcharged for foreclosure services, keeping foreclosure law firm Rosicki Rosicki & Associates PC in the case while setting free a host of other defendants, including some of the nation’s biggest banks.

In an 55-page opinion filed Monday, U.S. District Judge Jed Rakoff denied a bid by Rosicki and several affiliates to dismiss complaints against them by relator Peter D. Grubea and the government, which…

[LAW360]

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



Posted in STOP FORECLOSURE FRAUD0 Comments

GARY DUBIN LAW OFFICES FORECLOSURE DEFENSE HAWAII and CALIFORNIA
Advertise your business on StopForeclosureFraud.com

Archives