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Lyons v. US Bank | Washington Supreme Court – Violations of the Consumer Protection Act (CPA)

Lyons v. US Bank | Washington Supreme Court – Violations of the Consumer Protection Act (CPA)

H/T Karen Pooley

IN THE SUPREME COURT OF THE STATE OF WASHINGTON

WINNIE LYONS, a single person,
Appellant,

v.

U.S. BANK NATIONAL
ASSOCIATION, as trustee for
Stanwich Mortgage Loan Trust Series
2012-3, by Carrington Mortgage
Services, LLC; WELLS FARGO
BANK, N.A., a chartered national
bank; Wells Fargo Bank, N.A., as
serv1cer,
Defendants,

and

NORTHWEST TRUSTEE
SERVICES, INC., as trustee,
Respondent.

Excerpt:
Lyons alleges three causes of action against NWTS-one under the DT A, one
under the CPA, and one for intentional infliction of emotional distress. All of these
claims are supported by the same underlying conduct that Lyons alleges involves a
violation of RCW 61.24.030(7) in relation to the beneficiary declaration and a
breach of the duty of good faith under RCW 61.24.010(4). The trial court focused
on the issue of whether Lyons could bring a claim for damages under the DTA in
the absence of a trustee’s sale, and there was almost no discussion of the CPA or the
intentional infliction of emotional distress claims during argument on the summary
judgment motion. Yet, the court granted NWTS’ motion on all ofthese claims. We
begin by addressing the causes of action under the DT A and the CPA, including
Lyons’ particular contentions regarding the beneficiary declaration and breach of the
duty of good faith. We then address the cause of action for intentional infliction of
emotional distress.

A. Without a nonjudicial foreclosure sale, a party may not bring a claim for
damages under the DT A, but they can bring a claim under the CPA
Recently we decided Frias v. Asset Foreclosure Services, Inc., _ Wn.2d
_, 334 P.3d 529 (2014). Frias involved two certified questions from the federal
district court regarding whether a plaintiff could bring a claim for damages under
the DT A or the CPA in the absence of a foreclosure sale and what principles would
govern each claim. This court carefully considered the language of the statute, the
intended beneficiaries of the statute, the explicit and implicit legislative intent, and
the purposes of the statute. The court concluded:

We hold that the DTA does not create an independent cause of
action for monetary damages based on alleged violations of its
provisions where no foreclosure sale has been completed. . . . We
further hold that under appropriate factual circumstances, DTA
violations may be actionable under the CPA, even where no foreclosure
sale has been completed …. [T]he same principles that govern CPA
claims generally apply to CPA claims based on alleged DT A violations.
334 P.3d at 531. Without the sale of the property, damages are not recoverable under
the DTA, but a CPA claim may be maintained regardless of the status of the property.
Frias clearly resolves the first issue in this case. Lyons cannot bring a claim for
damages under the DT A in the absence of a sale, but she may bring a claim for
similar actions under the CPA.

B. There were material issues of fact for trial regarding whether NWTS violated
provisions of the DT A, which could be used to support Lyons’ CPA claim, so
granting summary judgment to NWTS on Lyons’ CPA claim was improper
A CPA claim is a preexisting statutory cause of action with established
elements. Id. at 537. A claim under the CPA based on violations of the DTA must
meet the same requirements applicable to any other CPA claim. 3 The availability of
redress for wrongs during nonjudicial foreclosure under the CPA is well supported
in our case law. Id.; Bain v. Metro. Mortg. Grp., Inc., 175 Wn.2d 83, 119, 285 P.3d
34 (2012) (a plaintiff may bring a claim under the CPA arguing the facts specific to
the case); Walker v. Quality Loan Serv. Corp. of Wash., 176 Wn. App. 294, 320, 308
P.3d 716 (2013) (actions taken during the nonjudicial foreclosure process were
sufficient to support all five elements of a CPA claim and survive pretrial dismissal);
Vawter v. Quality Loan Serv. Corp. of Wash., 707 F. Supp. 2d 1115, 1129-30 (W.D.
Wash. 2010) (court discussed the five elements for a CPA claim and considered the
factual allegations supporting Vawter’s DTA claim to support the CPA claim as
well); Klem v. Wash. Mut. Bank, 176 Wn.2d 771, 295 P.3d 1179 (2013) (property
was sold in this case, but court discussed action amounting to CPA claims in depth,
focusing on acts of defendants, not the fact the property was sold). The absence of a
completed sale of the property does not affect the availability of this cause of action.
Whether a plaintiff will prevail on a CPA claim is a case by case determination of
whether the plaintiff can satisfy the requisite elements.

The main question raised by the parties surrounds whether the alleged actions
of NWTS amount to unfair or deceptive practices under the CPA.

[...]

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In Depth: How Big Business Buys State Courts

In Depth: How Big Business Buys State Courts

No comment.


Truth-OUT

Buying Justice

More than 90 percent of judicial business in the United States is decided in state courts, and with business interests tangled up in much of the litigation, it’s easy to understand why corporations spend big on state judicial campaigns.

“Special interest groups continue to dump money into state supreme court races in an attempt to stack the deck in their favor,” Bannon said. “Voters should feel like our courts are fair and impartial, not political playgrounds where business interests and lawyers can tilt the scales of justice with their pocketbooks.”

Since January, political parties, outside groups and candidates spent more than $12.1 million on TV ads for state judicial races across the country. In the past week, outside groups spent a total of nearly $1 million on ads in Michigan, Montana, Ohio, North Carolina and Illinois in a last-minute surge before the election.

The 2012 election cycle was the first full cycle since the Supreme Court’s 2010 Citizens United ruling that struck down caps on outside corporate campaign spending, and special interest groups spent a record $15.4 million on TV ads for state high court races, nearly half the total spent on those races that year, according to a 2013 report by the Brennan Center and other watchdogs.

“Special interest groups have realized that it doesn’t take much money to reshape an entire state court compared to high-cost elections for statewide political offices,” Bannon said.

Last year, the American Constitution Society released analysis of judicial campaign finance data from 2000-2009 showing that the more campaign cash a state justice receives from business interests, the more likely they are to rule in favor of business litigants who show up in their courts.

[TRUTH-OUT]

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Ocwen Announces a Recorded $100 million charge for potential settlement with New York regulator over back-dated letters to homeowners

Ocwen Announces a Recorded $100 million charge for potential settlement with New York regulator over back-dated letters to homeowners

Didn’t this violate a previous settlement? This isn’t the first time either involving letters: Ocwen to Pay $3.7 Million to Massachusetts Over Failure to Provide Notices to Homeowners, Unlawful Foreclosures

How do you track where this money is going? Shouldn’t it be used to repay the homeowners?

Way too much fraud happening and the homeowners always end up screwed by both the government and the bankstas.

Ocwen-

Ocwen Financial Announces Operating Results for Third Quarter 2014

 

  • Recorded $100 million charge for potential settlement with New York regulator

ATLANTA, Oct. 30, 2014 (GLOBE NEWSWIRE) — Ocwen Financial Corporation, (NYSE:OCN), a leading financial services holding company, today reported a Net loss of $(75.3) million, or $(0.58) per share, for the third quarter of 2014 compared to Net income of $60.6 million, or $0.39 per share, for the third quarter of 2013. Ocwen generated revenue of $513.7 million, down 3% compared to the third quarter of 2013. Income from operations was $58.7 million for the third quarter of 2014.

Net income for the nine months ended September 30, 2014 was $52.2 million, or $0.36 per share, as compared to $175.1 million, or $1.17 per share, for the same period in 2013. Revenue for the first nine months of 2014 increased 9% from the first nine months of 2013 to a total of $1.6 billion.

Pre-tax loss on a GAAP basis for the third quarter of 2014 was $(72.3) million, a 194% decrease as compared to the second quarter of 2014. During the third quarter of 2014, Ocwen incurred a total of $137 million in normalized expenses. Ocwen’s normalized pre-tax earnings were $64.8 million, a 41% decrease from the second quarter of 2014. Normalized pretax earnings were impacted by $120.0 million of reserves for various regulatory and legal matters, including a $100.0 million accrual for a potential settlement with the New York Department of Financial Services, $9.0 million for Fair Value changes and $8.1 million of integration, technology-related and severance costs. We have not reached any agreement with the New York Department of Financial Services and cannot predict whether or when we may reach such a resolution. Any future resolution of these regulatory and legal matters may be materially different from what has been accrued.

“I want to emphasize that Ocwen takes great efforts to keep borrowers in their homes and to avoid foreclosures,” commented Bill Erbey, Ocwen’s Executive Chairman. “Ocwen recently reached a significant milestone by making its 500,000th loan modification, including 290,000 HAMP modifications. Ocwen is the leader in foreclosure prevention with 44% more HAMP modifications than any other servicer. We work very hard to keep borrowers in their homes and that is why we take the concerns raised by the New York Department of Financial Services so seriously. We have numerous compensating controls in place which we believe should have prevented borrower harm. Nonetheless, Ocwen is proactively creating a process whereby any borrower, who believes they received a misdated letter, and were harmed as a result, will have the opportunity to receive a complete file review to resolve any issues caused by the misdating.”

[...]

[OCWEN]

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Dale A. Whitman: WHAT WE HAVE LEARNED FROM THE MORTGAGE CRISIS ABOUT TRANSFERRING MORTGAGE LOANS

Dale A. Whitman: WHAT WE HAVE LEARNED FROM THE MORTGAGE CRISIS ABOUT TRANSFERRING MORTGAGE LOANS

WHAT WE HAVE LEARNED
FROM THE MORTGAGE CRISIS
ABOUT TRANSFERRING MORTGAGE LOANS
Dale A. Whitman*

Editors’ Synopsis: The vast expansion of the secondary mortgage market posed great challenges to the legal principles governing the mortgage transfer system. Not only were parties not adhering to the rules set forth under the Uniform Commercial Code, but even some courts were conflating basic principles such as the difference between ownership and entitlement to enforce. This Article analyzes several critical legal principles of the transfer process, discusses what led to the system’s dysfunction during the mortgage crisis, while proposing a more userfriendly system for both lenders and borrowers.

I. INTRODUCTION
II. HOW MORTGAGES ARE TRANSFERRED
III. WHAT WE HAVE LEARNED: A SUMMARY

A. Ownership of the Note and Mortgage Must be
Distinguished from the Right of Enforcement
B. The Right to Enforce Negotiable Notes Can be Transferred
Only by Delivery
C. Negotiability Matters
D. The Mortgage Follows the Right to Enforce the Note
E. Note Endorsements are Helpful but Usually Not Essential
F. Mortgage Assignments are Irrelevant to the Right to
Foreclose by Judicial Proceeding
G. Many Nonjudicial Foreclosure Statutes are Weak and
Inadequate

IV. DETAILED EXAMINATION OF EACH OF THE PRINCIPLES

A. Ownership of the Note and Mortgage Must be Distinguished
from the Right of Enforcement
B. The Right to Enforce Negotiable Notes Can be Transferred
Only by Delivery
C. Negotiability Matters
D. The Mortgage Follows the Right to Enforce the Note
E. Note Endorsements are Helpful, but Usually Not Essential
1. The Use of an Allonge
2. Holder in Due Course
F. Mortgage Assignments are Irrelevant to the Right to
Foreclose by Judicial Proceeding
1. Mortgage Assignments as a Means of Gaining Notice
2. Recording an Assignment as a Tool to Prevent
Wrongful Satisfaction or Subordination by the
Original Mortgagee
G. Many Nonjudicial Foreclosure Statutes are Weak and
Inadequate
1. The Role of the Trustee under a Deed of Trust
2. Lost Notes in Nonjudicial Foreclosures

V. CONCLUSION

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Consumer Bureau Finds Homeowners Harmed by Loan Companies

Consumer Bureau Finds Homeowners Harmed by Loan Companies

Unless they put a stop to this madness, they will continue to find homeowners, students etc etc continue to get screwed by both the Bankstas with their side kick the Government.

We’ve had enough of the regulators BS expressing, “We intend to hold them accountable”.

We don’t believe you.


Bloomberg-

The three-year-old U.S. consumer protection agency said it discovered that the largest mortgage servicers have been mishandling loan modifications and harming borrowers since new rules came into effect in January.

Consumer Financial Protection Bureau supervisors have made spot checks to examine the books and practices of bank and nonbank servicers, the agency said in a report yesterday, without naming the firms. Supervisors found “substantial delays” in modifying loans that resulted in “negative consequences,” such as higher mortgage payments and unjustified blemishes on borrowers’ credit reports, the report said.

“All borrowers should be treated fairly by loan servicers, and through our supervision program, we intend to hold them accountable,” Richard Cordray, the CFPB director, said in a statement.

[BLOOMBERG]

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Screwing Our Vets Is an American Tradition

Screwing Our Vets Is an American Tradition

HuffPO-

We have a long and proud history in this country of neglecting our veterans. It’s a tradition that goes back as far as the Civil War, if not longer. In the last few decades though, that we’ve allowed the behavior to not only continue, but to be ratcheted up a few notches from simple neglect to abuse and predatory behavior. It’s as if we’re saying, “Hell, they’ve been shot at, lived in the dirt, been taken prisoner, and tortured. They can take it.”

In February of this year, an effort to move forward with a $21 billion bill to enhance health care, education and job benefits for veterans, was blocked by the GOP; we’ve cut food stamps, on which at least 900,000 military families rely; blocked a bill that was specifically supposed to create jobs for veterans; cut funding for the VA; sent them into battle with inadequate gear; and barely care for their health issues.

This week alone, there are glaring examples of how we treat our veterans. Steve Dibert over at MFI-Miami has a blog post up about how Deutsche Banks and Ocwen using forged notary stamps, duel tracking and other actions to take the home of a veteran dying of cancer. And then there’s angry lunatic and radio host Michael Savage who went on a disgusting rant, calling vets with PTSD “weak.” “narcissistic” and “losers.”

Nice way to treat the folks that have risked their lives for you to have the right and freedom to talk about and treat them that way, isn’t it?

[HUFFPO]

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Lobbying of FL AG Bondi may have broken law

Lobbying of FL AG Bondi may have broken law

Laws were broken the minute she entered the game in 2010.


Tampa Bay Times-

Partners with a powerful Washington, D.C., law firm aren’t registered as Florida lobbyists, but that hasn’t stopped them from wining and dining Attorney General Pam Bondi the past four years to discuss clients.

Bondi dropped suits or declined to investigate cases after numerous behind-the-scenes interactions with the firm, Dickstein Shapiro, the New York Times reported Wednesday.

A Tampa Bay Times/Miami Herald review shows none of the partners were registered to lobby in Florida, meaning their advocacy may have violated state law. They won’t be prosecuted unless someone files a sworn complaint with the state.

[TAMPA BAY TIMES]

image: New York Times

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[VIDEO] Your foreclosure nightmare may not be over

[VIDEO] Your foreclosure nightmare may not be over

ALJAZEERA-

Since the recession, over 4 million people have made the difficult decision to give up their homes, believing they were walking away from their debt. Lenders hit with more than $1 trillion of foreclosed loans are looking to recoup some of their losses through a legal process known as deficiency judgment, in which borrowers may be liable for the difference between the foreclosure sale proceeds and the mortgage balance.

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SUPPORT GEORGE SHELDON FOR FLORIDA ATTORNEY GENERAL 2014 – The People’s Lawyer

SUPPORT GEORGE SHELDON FOR FLORIDA ATTORNEY GENERAL 2014 – The People’s Lawyer

Why George

George Sheldon’s experiences in various forms of private and government services uniquely prepare him to be a great Attorney General who looks out for the interests of all Floridians.  But more importantly, he is an honest man of principles and one who has experience working across the aisle with Independents and Republicans to make government work for everyone.

George’s View of Role as Attorney General

As Attorney General, George Sheldon is eager to assume the responsibility of making Florida safer for individuals and families by protecting consumers from fraud, targeting criminal activity, and assisting victims of crime.   He sees it as his role to preserve and protect Florida’s natural resources and follow the best advice of esteemed physicians by supporting the legalization of medical marijuana to make treatment and quality of life better for those with severe illnesses and conditions which could be improved through its use.  

George vows to be the the lawyer of all the people and represent their best interests – not those of the Governor or of the Legislature, protecting the civil rights of all Floridians regardless of race, sexual orientation, or religion.  

Advocate of Affordable Healthcare for All

George also supports the adoption of the Affordable Care Act.  It was voted into law by Congress, signed by the President, and passed a legal test in a challenge before the U.S. Supreme Court.  

Regardless of whether you were for or against the program, NOT adopting it results in the loss of tens of millions of Federal dollars for the state each year – money Floridians send to Washington as taxes without return – to fund healthcare for 1.9 million Floridians annually.  So as a state, we unnecessarily spend money paying for healthcare that could be covered by a Federal program, which is almost like paying twice for the same thing.

Represent the People as the Moral Pillar of State Government

George Sheldon believes the Attorney General needs to be the one moral pillar of the state government, and he doesn’t see that happening today in the way his opponent Pam Bondi has represented Floridians.  

As an example of the way he’d serve – enforcing laws and pursuing those who would threaten consumer well-being and safety in Florida, George would use former boss and Attorney General Bob Butterworth as his role model because Bob is someone he holds in highest esteem. He will restore integrity to the office.

http://www.georgesheldon2014.com/

 

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Investor to object to proposed $4.5 billion JPMorgan settlement

Investor to object to proposed $4.5 billion JPMorgan settlement

Reuters-

A group of funds that threw a monkey wrench in Bank of America Corp’s (BAC.N) proposed $8.5 billion settlement with investors in mortgage-backed securities will object to JPMorgan Chase & Co’s $4.5 billion offer to settle claims over similar investments, according to the lawyer that represents them.

The funds, collateralized debt obligations known as the Triaxx entities, received court permission on Wednesday to intervene in a proceeding seeking judicial approval of the JPMorgan settlement, people close to the case said.

JPMorgan last year reached the $4.5 billion agreement with some 20 institutional investors in 330 residential mortgage-backed securities trusts issued by JPMorgan and Bear Stearns, which the bank took over during the financial crisis.

[REUTERS]

IMAGE Credit: Reuters/Eduardo Munoz

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$16.2 million Yuba County mortgage modification verdict mostly tossed out by judge

$16.2 million Yuba County mortgage modification verdict mostly tossed out by judge

SAC BEE-

The case was something of a shocker: A Yuba County jury awarded $16.2million in damages to a Plumas Lake homeowner who nearly lost his home to foreclosure after his loan servicer mishandled his mortgage modification.

But the presiding judge has decided the jury got it mostly wrong.

Yuba Superior Court Judge Stephen Berrier has tossed out the vast majority of damages against New Jersey-based loan servicer PHH Mortgage Services. Homeowner Phillip Linza is entitled to only $159,000 in damages, the judge said.

The original verdict, in July, had represented a huge victory for Linza and his lawyers at the United Law Center in Roseville. The attorneys said it was one of the biggest jury awards they’d seen representing homeowners in mortgage-related cases.

[SAC BEE]

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Whistleblower suit targets accounting, controls in Wachovia’s investment bank

Whistleblower suit targets accounting, controls in Wachovia’s investment bank

Businesses that are built by controlled fraud.

Waiting for the unsealed complaint to drop to post up.


Charlotte Observer-

A newly unsealed federal lawsuit alleges Wachovia’s investment bank violated accounting rules and skirted internal controls to pursue short-term profits, benefiting senior management at the expense of the former Charlotte-based bank’s financial health.

Two whistleblowers, including a former Wachovia controller who lives in Union County, filed their lawsuit on behalf of the federal government, alleging the bank defrauded U.S. agencies that loaned money and provided other assistance to the bank in the financial crisis.

The lawsuit was first filed in 2011 but kept under seal until this week. Under the U.S. False Claims Act, the whistleblowers could be eligible to receive up to 30 percent of any damages or penalties awarded under the action.

[CHARLOTTE OBSERVER]

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DEUTSCHE BANK v. Dvorak – Ohio: Court of Appeals | failed to satisfy its initial burden of demonstrating that it was the holder of the Note

DEUTSCHE BANK v. Dvorak – Ohio: Court of Appeals | failed to satisfy its initial burden of demonstrating that it was the holder of the Note

2014-Ohio-4652

DEUTSCHE BANK NATIONAL TRUST COMPANY, as Trustee for J.P. Morgan Mortgage Acquisition Trust 2007-CH2, Asset Backed Pass-Through Certificates, Series 2007-CH2, Appellee,
v.
NORMA J. DVORAK, et al., Appellants.

C.A. No. 27120.
Court of Appeals of Ohio, Ninth District, Summit County.
October 22, 2014.
JAMES R. DOUGLASS, Attorney at Law, for Appellants.

DAVID A. WALLACE, Attorney at Law, for Appellee.

DECISION AND JOURNAL ENTRY

BELFANCE, Presiding Judge.

{¶1} Norma Dvorak and her son Richard Dvorak appeal the judgment of the Summit County Court of Common Pleas granting the motion for summary judgment of Deutsche Bank National Trust Company, as Trustee for J.P. Morgan Mortgage Acquisition Trust 2007-CH2, Asset Backed Pass-Through Certificates, Series 2007 CH2 (“Deutsche Bank”) and ordering the foreclosure of the property. For the reasons set forth below, we reverse.

I.

{¶2} On September 7, 2006, Ms. Dvorak and Mr. Dvorak signed a promissory note (“the Note”) that was secured by a mortgage (“the Mortgage”), which they also signed. Chase Bank USA, N.A., was the lender and mortgagee on the instruments. Deutsche Bank filed a complaint for foreclosure on September 14, 2012, alleging that it was the holder of the Note and Mortgage and that the Dvoraks were in default on the Note. The Dvoraks filed a pro se answer, and Deutsche Bank moved for summary judgment. The Dvoraks retained counsel and filed an amended answer and a motion in opposition to Deutsche Bank’s motion for summary judgment. Deutsche Bank filed a reply along with a new affidavit. The trial court granted Deutsche Bank’s motion for summary judgment.

{¶3} The Dvoraks have appealed, raising three assignments of error for our review. For ease of discussion, we address their assignments of error together.

II.

ASSIGNMENT OF ERROR I

THE TRIAL COURT ERRED WHEN IT GRANTED SUMMARY JUDGMENT TO PLAINTIFF-APPELLANT AND DENIED THE MOTION FOR SUMMARY JUDGMENT FILED BY DEFENDANT-APPELLANTS,[1] SINCE PLAINTIFF-APPELL[EE] NOT ONLY ADMITTED THAT IT WAS NOT THE HOLDER OF THE NOTE AND ENTITLED TO ENFORCE SAME AND FURTHER FAILED TO ESTABLISH THAT IT WAS THE HOLDER OF THE NOTE AND ENTITLED TO ENFORCE SAME IN ITS MOTION FOR SUMMARY JUDGMENT.

ASSIGNMENT OF ERROR II

THE TRIAL COURT ERRED WHEN IT AWARDED SUMMARY JUDGMENT TO PLAINTIFF-APPELLEE WHO FAILED TO DEMONSTRATE ENTITLEMENT TO RELIEF AS A MATTER OF LAW[.]

ASSIGNMENT OF ERROR III

THE TRIAL COURT ERRED WHEN IT AWARDED SUMMARY JUDGMENT TO A PLAINTIFF THAT FAILED TO DEMONSTRATE STANDING TO SUE[.]

{¶4} The Dvoraks argue that Deutsche Bank failed to demonstrate it had standing because it failed to satisfy its initial burden of demonstrating that it was the holder of the Note at the time it filed the complaint. We agree.

{¶5} This Court reviews an award of summary judgment de novo. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105 (1996). “We apply the same standard as the trial court, viewing the facts in the case in the light most favorable to the non-moving party and resolving any doubt in favor of the non-moving party.” Garner v. Robart, 9th Dist. Summit No. 25427, 2011-Ohio-1519, ¶ 8.

{¶6} Pursuant to Civ.R. 56(C), summary judgment is appropriate when:

(1) No genuine issue as to any material fact remains to be litigated; (2) the moving party is entitled to judgment as a matter of law; and (3) it appears from the evidence that reasonable minds can come to but one conclusion, and viewing such evidence most strongly in favor of the party against whom the motion for summary judgment is made, that conclusion is adverse to that party.

Temple v. Wean United, Inc., 50 Ohio St.2d 317, 327 (1977). To succeed on a summary judgment motion, the movant bears the initial burden of demonstrating that there are no genuine issues of material fact concerning an essential element of the opponent’s case. Dresher v. Burt, 75 Ohio St.3d 280, 292 (1996). If the movant satisfies this burden, the nonmoving party “`must set forth specific facts showing that there is a genuine issue for trial.’” Id. at 293, quoting Civ.R. 56(E).

{¶7} “It is fundamental that a party commencing litigation must have standing to sue in order to present a justiciable controversy and invoke the jurisdiction of the common pleas court.” Fed. Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017, ¶ 41. “The lack of standing at the commencement of a foreclosure action requires dismissal of the complaint * * *.” Id. at ¶ 40. The Dvoraks contend that the trial court erred in granting Deutsche Bank’s summary judgment because the bank did not establish that it had standing to bring the foreclosure action.

{¶8} In support of its motion for summary judgment, Deutsche Bank submitted the affidavit of Candace Reichardt, who averred that she was the vice president of JPMorgan Chase Bank, National Association. Ms. Reichardt further averred that, “[a]s a mortgage servicer, Chase collects payments from [Ms. Dvorak and Mr. Dvorak] and maintains up-to-date electronic records concerning the loans it services in its electronic record-keeping system[.]” According to Ms. Reichardt, the Dvoraks had failed to make a payment and had not subsequently made payments to cure the default.

{¶9} Deutsche Bank also submitted the affidavit of Dana Crawford. Ms. Crawford averred that she was a document control officer for Select Portfolio Servicing, Inc. (“SPS”), which was the servicing agent for Deutsche Bank. She further averred that, based upon her review of the business records of SPS, “[a]t the time of filing the complaint, and continuously since, Deutsche Bank * * * has been in possession of the original promissory Note.” Copies of the Note, Mortgage, the Dvorak’s Payment History, and the “Demand Letter” were attached to Ms. Crawford’s affidavit.

{¶10} “[A]ffidavits submitted in support of or in opposition to motions for summary judgment `shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated in the affidavit.’” Maxum Indemn. Co. v. Selective Ins. Co. of S.C., 9th Dist. Wayne No. 11CA0015, 2012-Ohio-2115, ¶ 18, quoting Civ.R. 56(E). In addition, Civ.R. 56(E) provides that “[s]worn or certified copies of all papers or parts of papers referred to in an affidavit shall be attached to or served with the affidavit.” Generally, “a mere assertion of personal knowledge satisfies the personal knowledge requirement of Civ.R. 56(E) if the nature of the facts in the affidavit combined with the identity of the affiant creates a reasonable inference that the affiant has personal knowledge of the facts in the affidavit.” Bank One, N.A. v. Lytle, 9th Dist. Lorain No. 04CA008463, 2004-Ohio-6547, ¶ 13. “If particular averments contained in an affidavit suggest that it is unlikely that the affiant has personal knowledge of those facts, [however,] then * * * something more than a conclusory averment that the affiant has knowledge of the facts [is] required.” (Internal quotations and citations omitted.) Bank One, N.A. v. Swartz, 9th Dist. Lorain No. 03CA008308, 2004-Ohio-1986, ¶ 14. Averments in an affidavit may also be insufficient to indicate personal knowledge. In any case, “this Court `cannot infer personal knowledge from the averment of personal knowledge alone.’” Bank of Am., N.A. v. Loya, 9th Dist. Summit No. 26973, 2014-Ohio-2750, ¶ 12, quoting Maxum Indemn. Co. at ¶ 22.

{¶11} As noted above, Ms. Crawford averred that she is a document control officer for SPS, an entity she averred was the servicer of the Dvorak’s loan. She also averred that she “ma[d]e this affidavit based upon personal knowledge obtained from [her] personal review of [SPS'] business records for the loan which is the subject of this action.” Thus, it is clear that whatever knowledge Ms. Crawford has about the Note and the Mortgage were obtained from reviewing business records[2] rather than from something she had personally observed (e.g., she had seen the Note in Deutsche Bank’s vault the day that Deutsche Bank filed the complaint).

{¶12} However, Ms. Crawford did not attach the alleged business records that she referred to in support of her averment that she had personal knowledge based on SPS’s business records that Deutsche Bank was continuously in possession of the note. Ms. Crawford attached a copy of the Note endorsed in blank, the Mortgage, the assignment of the Mortgage, and “Demand Letter[.]” None of these documents indicate when, or even if, Deutsche Bank came into possession of the Note or that Deutsche Bank had possession of the note at the time the complaint was filed.[3] See, e.g., Loya at ¶ 11-15. See also Deutsche Bank Natl. Trust Co. v. Reynolds, 9th Dist. Summit No. 27192, 2014-Ohio-2372, ¶ 13-14.

{¶13} To the extent Ms. Crawford relied on documents beyond those attached to her affidavit, she did so in contravention of the provision in Civ.R. 56(E) that “[s]worn or certified copies of all papers or parts of papers referred to in an affidavit shall be attached to or served with the affidavit.” (Emphasis added.) Civ.R. 56(E). See Walls v. Firelands Radiology, Inc., 106 Ohio App.3d 313, 336 (6th Dist.1995). In this regard, the Dvoraks also argue that her affidavit is not based upon personal knowledge but rather impermissible hearsay. We agree that the requirement that averments in an affidavit be made upon personal knowledge and the requirement of attaching sworn or certified copies of all papers to the affiant’s affidavit serve are essentially safeguards against hearsay, which by definition, are statements that are made without personal knowledge. See, e.g., State v. Cicerchi, 182 Ohio App.3d 753, 2009-Ohio-2249, ¶ 52 (8th Dist.), quoting Hayes v. Cleveland Pneumatic Co., 92 Ohio App.3d 36, 44 (8th Dist.1993) (“Although Evid.R. 803(6) permits introduction of records of regularly conducted activity, that exception concerns the introduction of the documents themselves, not oral testimony * * *. `There is no hearsay exception that allows a witness to testify to the contents of business records, in lieu of providing and authenticating the records in question.’”). Thus, we find that the Dvoraks’ argument has merit to the extent Ms. Crawford is averring to the content of the business records that are not attached to her affidavit. Civ.R. 56(E). Therefore, because Ms. Crawford did not attach the business records upon which she relied to make her affidavit as required by Civ.R. 56(E) and because her personal knowledge was derived from SPS’s business records, her affidavit did not satisfy Deutsche Bank’s burden of establishing an absence of a dispute of fact that it was in possession of the Note at the time the complaint was filed. See U.S. Bank, N.A. v. Umphrey, 9th Dist. Summit No. 27172, 2014-Ohio-4461, ¶ 13-14.

{¶14} Similarly, Ms. Reichardt, who identified Chase as Deutsche Bank’s servicer, did not attach the records relied upon in her affidavit. Ms. Reichardt averred that she made the statements in the affidavit based upon her review of Chase’s business records. While Ms. Reichardt, like Ms. Crawford, attached copies of the Note, the Mortgage, and the assignment of the mortgage, those documents, as noted above, do not establish when or if Deutsche Bank came into possession of the Note or that Deutsche Bank was in possession of the Note at the time of the filing of the complaint. Furthermore, Ms. Reichardt averred that, based on Chase’s business records, “Plaintiff, directly or through its agent, is in possession of the original Note and was in possession prior to and at the time of filing the Complaint in this action.” However, Ms. Reichardt never identifies who “Plaintiff[]” is and further indicates that she does not know what entity is actually in possession of the Note: the “Plaintiff[]” or an agent. Thus, Ms. Reichardt’s affidavit also does not establish an absence of a dispute of fact that Deutsche Bank had possession of the Note at the time it filed the complaint in this case. See Civ.R. 56(E).

{¶15} Notwithstanding these problems, Deutsche Bank urges this Court to conclude that the affidavits of Ms. Crawford and Ms. Reichardt require reasonable minds to come to but one conclusion, which is that Deutsche Bank was in possession of the Note at the time it filed its complaint. However, none of the cases cited by Deutsche Bank to support its position actually address the circumstances of this case. Compare with Deutsche Bank Natl. Trust Co. v. Cassens, 10th Dist. Franklin No. 09AP-865, 2010-Ohio-2851, ¶ 13 (Note endorsed as payable to Deutsche Bank prior to the filing of the complaint.); Bank of New York v. Dobbs, 5th Dist. Knox No. 2009-CA-000002, 2009-Ohio-4742, ¶ 40 (Affiant was the employee of the company in possession of the original note and mortgage.); Deutsche Bank Natl. Trust Co. v. Ingle, 8th Dist. Cuyahoga No. 92487, 2009-Ohio-3886, ¶ 9 (Bank submitted affidavits from the loan servicer and the bank’s counsel, both of whom averred that the bank was in possession of the note.).

{¶16} Accordingly, the materials submitted by Deutsche Bank with its motion for summary judgment failed to demonstrate an absence of a dispute of fact that it had standing at the time it filed its complaint. The Dvoraks’ assignments of error are sustained.

III.

{¶17} In light of the foregoing, the judgment of the Summit County Court of Common Pleas is reversed, and the matter is remanded for further proceedings consistent with this opinion.

Judgment reversed, and cause remanded.

There were reasonable grounds for this appeal.

We order that a special mandate issue out of this Court, directing the Court of Common Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy of this journal entry shall constitute the mandate, pursuant to App.R. 27.

Immediately upon the filing hereof, this document shall constitute the journal entry of judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is instructed to mail a notice of entry of this judgment to the parties and to make a notation of the mailing in the docket, pursuant to App.R. 30.

Costs taxed to Appellee.

GALLAGHER, J. CONCURS.

CARR, J. CONCURS IN JUDGMENT ONLY.

(Gallagher, J., of the Eighth District Court of Appeals, sitting by assignment)

[1] This reference to a motion for summary judgment by the Dvoraks appears to be made in error since the Dvoraks never moved for summary judgment in the trial court, nor do they make any argument in their brief regarding such a motion. See App.R. 16(A)(7). In any case, our decision today is limited solely to whether Deutsche Bank should have been awarded summary judgment.

[2] A business record is “[a] memorandum, report, record, or data compilation, in any form, of acts, events, or conditions, made at or near the time by, or from information transmitted by, a person with knowledge, if kept in the course of a regularly conducted business activity, and if it was the regular practice of that business activity to make the memorandum, report, record, or data compilation[.]” Evid.R. 803(6).

[3] Although the Mortgage was assigned to Deutsche Bank by JPMorgan Chase, the Note had previously been transferred by Chase to a separate entity, making the assignment of minimal value at best for establishing the possession of the Note.

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David J. Reiss. “Who Should Be Providing Mortgage Credit to American Households?”

David J. Reiss. “Who Should Be Providing Mortgage Credit to American Households?”

Who Should Be Providing Mortgage Credit to American Households?

David J. Reiss, Brooklyn Law School

Abstract

Who should be providing mortgage credit to American households? Given that the residential mortgage market is a ten-trillion-dollar one, the answer we come up with had better be right, or we may suffer another brutal financial crisis sooner than we would like. Indeed, the stakes are as high as they were in the Great Depression when the foundation of our current system was first laid down. Unfortunately, the housing finance experts of the 1930s seemed to have a greater clarity of purpose when designing their housing finance system. Part of the problem today is that debates over the housing finance system have been muddled by broader ideological battles and entrenched special interests, as well as by plain old inertia and the fear of change. It is worth taking a step back to evaluate the full range of options available to us, as the course we decide upon will shape the housing market for generations to come. This is a Response to Brent Horton, For the Protection of Investors and the Public: Why Fannie Mae’s Mortgage-Backed Securities Should Be Subject to the Disclosure Requirements of the Securities Act of 1933, 89 Tulane L. Rev. __ (forthcoming 2014-2015).

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David J. Reiss and Jeffrey Lederman. “Comment on the FHFA’s Small Multifamily Subgoal”

David J. Reiss and Jeffrey Lederman. “Comment on the FHFA’s Small Multifamily Subgoal”

Comment on the FHFA’s Small Multifamily Subgoal

David J. Reiss, Brooklyn Law School
Jeffrey Lederman, Brooklyn Law School

Abstract

As the FHFA sets the housing goals for 2015-2017, it should focus on maximizing the creation and preservation of affordable housing. Less efficient proposed subgoals should be rejected unless the FHFA has explicitly identified a compelling rationale to adopt them. The FHFA has not identified one in the case of the proposed small multifamily subgoal. Thus, it should be withdrawn.

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City homeowners lose property for just $250 in unpaid taxes

City homeowners lose property for just $250 in unpaid taxes

Baltimore Sun-

Homeowners in Baltimore can lose their houses for as little as $250 in unpaid taxes — a threshold far lower than in other cities — according to a new Abell Foundation report that urges a change in the practice.

The report calls on Baltimore officials and the Maryland General Assembly to add protections for owner-occupied homes and simplify a city system that often confuses homeowners, enriches investors and adds to the number of vacant properties that line neighborhood streets.

City Councilwoman Mary Pat Clarke said she’s seen many residents, often elderly, get swept up in tax lien sales, and she wants the city to raise the threshold that triggers a sale to $750 in back taxes.

[BALTIMORE SUN]

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GARY DUBIN LAW OFFICES FORECLOSURE DEFENSE HAWAII and CALIFORNIA
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Jamie Ranney, www.NantucketLaw.pro
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