affidavit | FORECLOSURE FRAUD | by DinSFLA - Part 2

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The Destruction of a Foreclosure Lawyer’s Faith in the Justice System

The Destruction of a Foreclosure Lawyer’s Faith in the Justice System


If the courts can’t address clear instances of fraud and injustice, how can they protect our citizens?

 New Deal 2.0-

It has been exactly 18 months since I deposed GMAC Mortgage’s prolific document signer, Jeffrey Stephan, in a case where I was defending a Maine homeowner in foreclosure. Stephan admitted to signing 8,000 to 10,000 foreclosure documents a month (that is about one a minute, if you do the arithmetic), including summary judgment affidavits used by courts as the basis for entering forclosure judgments. Stephan’s affidavits were sent by GMAC to courts all over the country. Obviously, and as Stephan admitted, he did not bother to read those affidavits. He also admitted that he had no idea as to whether the foreclosure affidavits that he signed were true. He didn’t even trouble himself to appear before a notary to be sworn, even though his affidavits said that he had done so. While Stephan admitted that he understood that judges were relying upon his affidavits to take away the homes of homeowners all over the country, he seemed serene and untroubled by his dishonesty in signing these false affidavits. (Conduct like this has since been awarded the slang term “robo-signing,” but I never use it because it fails to adequately describe the dishonesty and deception involved.)

[NEW DEAL 2.0]

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Maine Supreme Judicial Court upholds ruling in robo-signing foreclosure

Maine Supreme Judicial Court upholds ruling in robo-signing foreclosure


A Denmark woman whose case touched off a national uproar over foreclosures with faulty paperwork may finally lose her home.

KJOnline-

By a 5-1 decision released this morning, the Maine Supreme Judicial Court upheld a lower court ruling that allowed loan servicer GMAC Mortgage, despite admittedly flawed practices involved in affadavit signing, to foreclose upon a home in Denmark purchased in 2003 by Nicolle M. Bradbury.

[KJONLINE]

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HSBC v. NORTON  [NYSC] “Steven J. Baum PC”, “Plaintiff’s attorney shall supply the supplemental attorney affirmation and plaintiff’s affidavit to the Court”

HSBC v. NORTON [NYSC] “Steven J. Baum PC”, “Plaintiff’s attorney shall supply the supplemental attorney affirmation and plaintiff’s affidavit to the Court”


Decided on November 4, 2011

Supreme Court, Yates County

 

HSBC Bank, USA, National Association, As Trustee for WFHET 2006-2, Plaintiff,

against

William F. Norton, a/k/a William Norton, Michelle L. Norton, Defendants.

2009-0488

Steven J. Baum, P.C.,
John A. Belluscio, Esq., of counsel
Attorneys for Plaintiff,

Barrett Greisberger, LLP,.
Mark M. Greisberger, Esq., of counsel,
Attorneys for Defendant.

W. Patrick Falvey, J.

This is a residential foreclosure proceeding. Plaintiff moves for an order nunc pro tunc validating the court’s January 21, 2010 order of reference, the court’s April 26, 2010 judgment of foreclosure, and substituting nunc pro tunc the affidavit of merit and amount due attached to the motion papers, in place of the affidavit attached to the initial motion papers.

The judgment of foreclosure was executed prior to Chief Administrative Judge Pfau’s Administrative Order 548-10 (revised November 18, 2011) requiring plaintiffs’ attorneys in mortgage foreclosures to confirm the factual accuracy of allegations set forth in the Complaint and any supporting affidavits or affirmations filed with the court, as well as the accuracy of the notarizations contained in the supporting documents filed therewith.

Since the order of reference and judgment predated implementation of AO 548-10, in preparing for the foreclosure sale, plaintiff’s attorney attempted to gather the information required to make the affirmation. In doing so, plaintiff’s attorney could not confirm via the attorney’s contacts with the client, the accuracy of the execution and notarization of the original affidavit of merit and amount due, and so seeks this order.

The plaintiff’s attorney was able to obtain a new affidavit of merit by Kara Dolch, a Vice President of Wells Fargo Bank, the servicer for plaintiff. Ex E. This affidavit confirms:

Plaintiff is the holder of the note and mortgage of record.

There is a default because defendants failed to make the February 1, 2009 payment and subsequent payments.

The 90 day pre-foreclosure notice was sent to borrowers by registered or certified mail and by first class mail to last known address of the borrowers, and if different, to the residence that is the subject of the mortgage.

The 90 day pre-foreclosure notice was mailed prior to February 13, 2010, and there was no filing requirement with the superintendent of banks at that time.

A notice of default was mailed to the mortgagors at the last known address provided by the mortgagors. The default stated in the notice was not cured.

Based on the default, plaintiff elected to call due the entire unpaid principal balance with interest, disbursements, attorney fees, costs.

The amount due as reflected in the complaint is $343,299.46, plus 7.375% interest from 1/1/09, plus late charges, etc.

At the initial return, defendants’ attorney appeared, and informed the court that his clients had recently received a letter from the plaintiff, inviting the defendants to apply for a mortgage modification. The Court then adjourned the matter several times to allow the parties to sort out this new development. At the last appearance date of November 1, 2011, neither of the parties offered any information concerning a modification, and so the court determined that it would decide the motion, and reserved decision.

There are form affidavits and affirmations prepared by the Unified Court System, to cover the information required by Judge Pfau’s order. The attorney’s affirmation in support of plaintiff’s motion by Bridget Faso does not contain all the information contained in this form affirmation, and so the court will not grant the relief requested until Ms Faso, or another attorney from the Baum firm, provides an additional affirmation with the missing information, including:

The date she communicated with which representatives of plaintiff, their names and titles.

Based on her communications with these named representatives, as well as upon her own inspection and other reasonable inquiry under the circumstances, she affirms to the best of her knowledge, information and belief, the summons, complaint and other papers filed or submitted to the court ( with the exception of the prior affidavit of merit) contain no false statements of fact or law. That she understands her continuing obligation to amend the affirmation in light of newly discovered material facts following its filing.

That she is aware of her obligations under 22 NYCRR part 1200 and part 130. [*2]

Additionally, Ms. Dolch’s affidavit does not contain all the information required under the rule, and so the court requires that she, or another officer, with knowledge, on behalf of plaintiff, supplement her affidavit to state, if applicable, that she performed the following actions in order to confirm the truth and veracity of the statements set forth, to wit:

1.That she/he reviewed the summons and complaint to confirm the factual accuracy of the identity of the proper plaintiff, the defaults and the amounts claimed to be due to plaintiff as set forth therein,

2.That she/he confirmed the affidavits executed and submitted by plaintiff together with this application have been personally reviewed by her, that the notary acknowledging the affiant’s signature followed applicable law in notarizing the affiant’s signature, and

3.That she/he is unable to confirm or deny that the underlying documents previously filed with the court have been properly reviewed or notarized.

Upon the foregoing, it is therefore,

ORDERED that plaintiff’s attorney shall supply the supplemental attorney affirmation and plaintiff’s affidavit to the Court and opposing counsel by January 2, 2012; and it is further

ORDERED that if these supplemental papers are not received and served upon opposing counsel by January 2, 2012, or if they do not contain all the information herein required by the court, the court will dismiss the foreclosure action, with prejudice.

Submission of an order by the parties is not necessary. The mailing of a copy of this Order and Judgment by this Court shall not constitute notice of entry.

The foregoing constitutes the Decision, Judgment and Order of this Court.

SO ORDERED.

Dated: November, 2011

________________________________

W. Patrick Falvey

Acting Justice Supreme Court

Yates County

[ipaper docId=72046843 access_key=key-2elhbwpzhli88kuq7y6o height=600 width=600 /]

 

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FELTUS v. US Bank N.A. | FL 2DCA “Affidavit of Indebtedness Fail, Genuine Issue of Material Fact of Who Owned or Held the Note”

FELTUS v. US Bank N.A. | FL 2DCA “Affidavit of Indebtedness Fail, Genuine Issue of Material Fact of Who Owned or Held the Note”


JULIA FELTUS, Appellant,
v.
U.S. BANK NATIONAL ASSOCIATION, as TRUSTEE of MASTR ADJUSTABLE RATE MORTGAGES TRUST 2007-3, Appellee.

 

Case No. 2D10-3727.
District Court of Appeal of Florida, Second District. 

Opinion filed October 19, 2011.
Jacqulyn Mack of The Mack Law Firm, Englewood, for Appellant.Roy A. Diaz and Diana B. Matson of Smith, Hiatt & Diaz, P.A., Ft. Lauderdale for Appellee.

WHATLEY, Judge.

Julia Feltus appeals a final summary judgment of foreclosure in favor of U.S. Bank National Association, as Trustee of Mastr Adjustable Rate Mortgages Trust 2007-3 (U.S. Bank or the Bank). We reverse because material issues of fact as to which entity holding the promissory note executed by Feltus existed at the time the trial court entered summary judgment.

On August 24, 2009, U.S. Bank filed an unverified complaint seeking to reestablish a lost promissory note and to foreclose the mortgage on Feltus’s home. U.S. Bank attached to the complaint a copy of the note and the mortgage, but both documents showed the lender to be Countrywide Bank, N.A. In the count to reestablish the note pursuant to section 673.3091, Florida Statutes (2009), U.S. Bank alleged that the note was executed by Feltus on February 16, 2007; U.S. Bank is the owner and holder of the note; the original note has been lost and is not in U.S. Bank’s custody or control; the note was continuously in the possession and control of the Bank’s assignor and predecessor from the date of execution until the loss, at which time the assignor and predecessor was entitled to enforce the note; and the note has not been paid or otherwise satisfied, assigned, or transferred, or lawfully seized. Notably, these allegations did not include an allegation that Countrywide had assigned the note to U.S. Bank.

After Feltus filed a motion to dismiss alleging that U.S. Bank had failed to establish that it owned or held the subject note, on November 16, 2009, U.S. Bank filed an affidavit of indebtedness executed by Kathy Repka, an assistant secretary of BAC Home Loan Servicing, L.P., f/k/a Countrywide Home Loan Servicing, L.P. Repka asserted that her affidavit was based on the loan payment records of the servicing agent and her familiarity with those records. After she explained that the purpose of the records was “to monitor and maintain the account relating to a note and mortgage that are the subject matter of the pending case,” Repka asserted that U.S. Bank owns and holds the note described in its complaint. Then on November 18, 2009, U.S. Bank filed another copy of the note as a supplemental exhibit to its complaint. In contrast to the copy attached to the complaint that contained no endorsements, this copy contained two endorsements that were side by side on the last page—the first stated “PAY TO THE ORDER OF: COUNTRYWIDE HOME LOANS, INC. WITHOUT RECOURSE COUNTRYWIDE BANK, N.A.” and the second stated “PAY TO THE ORDER OF: __________ WITHOUT RECOURSE COUNTRYWIDE HOME LOANS, INC.” Notwithstanding this filing, eight days after Feltus filed her answer and affirmative defenses, on May 26, 2010, U.S. Bank filed a motion for summary final judgment alleging that it “owns and holds a promissory note and mortgage” and that the original note had been lost and is not in U.S. Bank’s control. But on June 4, 2010, the Bank filed a reply to Feltus’s affirmative defenses in which it asserted that it is now in possession of the original note, which it attached and which is the same note it filed on November 18, 2009. The Bank further asserted that because the note is endorsed in blank and it is in possession of the note, it is the bearer and entitled to foreclose the mortgage. See Riggs v. Aurora Loan Servs., LLC, 36 So. 3d 932, 933 (Fla. 4th DCA 2010) (noting that pursuant to Uniform Commercial Code, negotiation of note by transfer of possession with blank endorsement makes transferee the holder of the note entitled to enforce it).

We view U.S. Bank’s filing of a copy of the note that it later asserted was the original note as a supplemental exhibit to its complaint to reestablish a lost note as an attempt to amend its complaint in violation of Florida Rule of Civil Procedure 1.190(a). U.S. Bank did not seek leave of court or the consent of Feltus to amend its complaint. A pleading filed in violation of rule 1.190(a) is a nullity, and the controversy should be determined based on the properly filed pleadings. Warner-Lambert Co. v. Patrick, 428 So. 2d 718 (Fla. 4th DCA 1983).

Before a court may grant summary judgment, the pleadings, depositions, answers to interrogatories, admissions, and any affidavits must “`conclusively show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'” Allenby & Assocs., Inc. v. Crown St. Vincent Ltd., 8 So. 3d 1211, 1213 (Fla. 4th DCA 2009) (quoting Fini v. Glascoe, 936 So. 2d 52, 54 (Fla. 4th DCA 2006)). The party moving for summary judgment bears the burden to show conclusively that there is a complete absence of any genuine issue of material fact. Id.

The properly filed pleadings before the court when it heard the Bank’s motion for summary judgment were a complaint seeking to reestablish a lost note, Feltus’s answer and affirmative defenses alleging that the note attached to the complaint contradicts the allegation of the complaint that U.S. Bank is the owner of the note, a motion for summary judgment alleging a lost note of which U.S. Bank is the owner, an affidavit of indebtedness alleging that U.S. Bank was the owner and holder of the note described in the complaint, and U.S. Bank’s reply to Feltus’s affirmative defenses asserting that it was now in possession of the original note, which it attached to the reply. But the note attached to the complaint showed the lender to be Countrywide Bank, N.A. And the complaint failed to allege that “[t]he person seeking to enforce the instrument was entitled to enforce the instrument when loss of possession occurred, or has directly or indirectly acquired ownership of the instrument from a person who was entitled to enforce the instrument when loss of possession occurred.” § 673.3091(a). In addition, the affidavit of indebtedness revealed no basis for the affiant’s assertion that U.S. Bank owns and holds the note. The affiant is an assistant secretary for the alleged servicing agent of the Bank, and she asserted that she had personal knowledge of the loan based on the loan payment records. She did not assert any personal knowledge of how U.S. Bank would have come to own or hold the note. See Shafran v. Parrish, 787 So. 2d 177, 179 (Fla. 2d DCA 2001) (“When affidavits are filed to establish the factual basis of the motion [for summary judgment], they must be made on personal knowledge, demonstrate the affiant’s competency to testify, and be otherwise admissible in evidence.”).

The trial court erred in entering final summary judgment of foreclosure because the documents before it created a genuine issue of material fact of who owned or held the note. Accordingly, we reverse and remand for further proceedings.

CRENSHAW, J., Concurs.

CASANUEVA, J., Concurs with opinion.

CASANUEVA, Judge, Concurring.

I fully concur with the majority opinion and write only to point out further failings in the affidavit of indebtedness.

The affidavit of indebtedness was the sole affidavit offered in support of U.S. Bank’s motion for summary judgment. The affiant was an assistant secretary employed by the Bank’s loan servicing agent. She set forth, under oath, that her direct personal knowledge was restricted to that learned in maintaining the loan payment records of the servicing agent. And, as the majority opinion points out, she did not assert any personal knowledge of how U.S. Bank had come to own or hold the note. Beyond this deficiency noted in the majority opinion, the affiant also stated that U.S. Bank had accelerated the entire principal balance due and had “retained Smith, Hiatt & Diaz, P.A. to represent it in this matter.” Because the affiant’s competency was based only on her review of the loan payment records, she was not competent to aver as to actions of the Bank in accelerating the loan or hiring counsel, and her averments are hearsay and inadmissible at trial. The Bank could have easily established the facts of acceleration of the note and hiring of counsel with affidavits from the Bank’s official in charge of foreclosing this loan and/or the Bank’s counsel to establish the fact of hiring and of the fee arrangement. Such bank official or counsel would have direct personal knowledge, would be competent, and would have presented evidence admissible at trial.

The affidavit the Bank submitted fell woefully short of these requirements and could not aid the Bank in any way to support its motion for summary judgment of foreclosure.

NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF FILED.

 [ipaper docId=70313218 access_key=key-4zh4guv7i4lndu77hex height=600 width=600 /]

 

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AURORA v. TOLEDO | NJ SC  “We question whether Lehman’s designation of MERS as its nominee remained in effect after Lehman filed its bankruptcy”

AURORA v. TOLEDO | NJ SC “We question whether Lehman’s designation of MERS as its nominee remained in effect after Lehman filed its bankruptcy”


NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0804-10T3

AURORA LOAN SERVICES, LLC,
Plaintiff-Respondent,

v.

BERNICE TOLEDO,
Defendant-Appellant,

and

MR. TOLEDO, Husband of
BERNICE TOLEDO, MORTGAGE
ELECTRONIC REGISTRATION
SYSTEMS, INC., As Nominee
For LEHMAN BROTHERS BANK FSB;
MORTGAGE ELECTRONIC REGISTRATION
SYSTEMS, INC., As Nominee For
AURORA LOAN SERVICES LLC,
Defendants.
_________________________________________________________

Submitted September 26, 2011 – Decided October 18, 2011

Before Judges Alvarez and Skillman.

On appeal from Superior Court of New Jersey,
Chancery Division, Passaic County, Docket
No. F-10005-09.

Kenneth C. Marano, attorney for appellant.

Victoria E. Edwards (Akerman Senterfitt),
attorney for respondent.

PER CURIAM

Defendant appeals from an order entered on August 31, 2010,
which granted a summary judgment in this mortgage foreclosure
action declaring that defendant’s answer “sets forth no genuine
issue as to any material fact challenged and that [plaintiff] is
entitled to a judgment as a matter of law.” There is no
indication in the record before us that plaintiff ever secured a
final judgment of foreclosure. Therefore, the appeal appears
interlocutory. See Wells Fargo Bank, N.A. v. Garner, 416 N.J.
Super. 520, 523-24 (App. Div. 2010). However, because defendant
did not move to dismiss on that basis and the appeal has been
pending for a substantial period of time, we grant leave to
appeal as within time and address the merits. See R. 2:4-
4(b)(2).

The record before us is rather sparse and disjointed.
However, the following facts may be gleaned from that record.
Defendant owns a home in the Borough of Prospect Park. On
July 24, 2006, defendant executed two promissory notes payable
to Lehman Brothers Bank, the first for $320,000, which was
payable on August 1, 2036, and the second for $60,000, which was
payable on August 1, 2021. Both notes were secured by mortgages
on defendant’s home.

On September 1, 2006, plaintiff began servicing the notes
on behalf of Lehman.

Sometime in 2008, defendant went into default in the
payment of her obligations under the notes.

On January 30, 2009, plaintiff purportedly obtained an
assignment of the $320,000 note from Lehman and the mortgage
securing that note.1 This assignment was signed by a person
named Joann Rein, with the title of Vice-President of Mortgage
Electronic Systems, Inc. (MERS). MERS was described in the
assignment document as a “nominee for Lehman Brothers Bank.”

This document is discussed in greater detail later in the
opinion.

On February 23, 2009, plaintiff filed this mortgage
foreclosure action. The parties subsequently engaged in
negotiations to resolve the matter. Those negotiations were
unsuccessful and are not relevant to our disposition of this
appeal.

Plaintiff filed a motion for summary judgment to strike
defendant’s answer on the ground there was no contested issue of
fact material to plaintiff’s right to foreclose upon defendant’s
property. In support of this motion, plaintiff relied primarily
on an affidavit by Laura McCann, one of its vice-presidents,
and exhibits attached to that affidavit, which are discussed
later in this opinion. Defendant submitted an answering
certification.

After hearing oral argument, the trial court issued a brief
written opinion and order granting plaintiff’s motion. This
appeal followed.

To have standing to foreclose a mortgage, a party generally
must “own or control the underlying debt.” Wells Fargo Bank,
N.A. v. Ford, 418 N.J. Super. 592, 597 (App. Div. 2011) (quoting
Bank of N.Y. v. Raftogianis, 418 N.J. Super. 323, 327-28 (Ch.
Div. 2010)). If the debt is evidenced by a negotiable
instrument, such as the promissory notes executed by defendant,
the determination whether a party owns or controls the
underlying debt “is governed by Article III of the Uniform
Commercial Code (UCC), N.J.S.A. 12:3-101 to -605, in particular
N.J.S.A. 12A:3-301.” Ibid. Under this section of the UCC, the
only parties entitled to enforce a negotiable instrument are
“[1] the holder of the instrument, [2] a nonholder in possession
of the instrument who has the rights of the holder, or [3] a
person not in possession of the instrument who is entitled to
enforce the instrument pursuant to [N.J.S.A.] 12A-3-309 or
subsection d. of [N.J.S.A.] 12A:3-418.” N.J.S.A. 12A:3-301
(brackets added).

In this case, it is clear for the same reasons as in Ford,
418 N.J. Super. at 598, that plaintiff is neither a “holder” of
the promissory notes executed by defendant nor a “person not in
possession” of those notes who is entitled to enforce them
pursuant to N.J.S.A. 12A:3-309 or N.J.S.A. 12A:3-418(d).

Therefore, as in Ford, plaintiff’s right to foreclose upon the
mortgages defendant executed to secure those notes depends upon
whether plaintiff established that it is “a nonholder in
possession of the instrument[s] who has the rights of a holder.”
N.J.S.A. 12A:3-301; see Ford, supra, 418 N.J. Super. at 498-99.

To establish its right to foreclose upon the mortgage
defendant executed to secure her $320,000 note to Lehman,
plaintiff relied upon an affidavit by Laura McCann, a vicepresident
of plaintiff. McCann’s affidavit states that she has
“custody and control of the business records of [plaintiff] as
they relate to [defendant’s] loans.” Regarding each of the
copies of defendant’s notes and mortgages attached to her
certifications, McCann asserts that it is a “true and correct
copy.” However, McCann does not state that she personally
confirmed that those attachments were copies of originals in
plaintiff’s files.

McCann’s affidavit also has attached a copy of a document
that purports to be a “Corporate Assignment of Mortgage” from
MERS, as Lehman’s nominee, to plaintiff. Again, McCann’s
affidavit asserts that this document “is a true and correct copy
of the instrument assigning the Mortgage and Note to
[plaintiff],” but does not state that she personally confirmed
that it was a copy of the original.

A certification in support of a motion for summary judgment
must be based on “personal knowledge.” Ford, supra, 418 N.J.
Super. at 599 (quoting R. 1:6-6); see also Deutsche Bank Nat’l
Trust Co. v. Mitchell, ___ N.J. Super. ___, ___ (App. Div. 2011)
(slip op. at 17-19). Our Supreme Court has recently reaffirmed
the need for strict compliance with this requirement in mortgage
foreclosure actions by adopting, effective December 20, 2010, a
new court rule which specifically states that an affidavit in
support of a judgment in a mortgage foreclosure action must be
“based on a personal review of business records of the plaintiff
or the plaintiff’s mortgage loan servicer.” R. 4:64-2(c)(2).
McCann’s affidavit does not state that she conducted such a
“personal review of [plaintiff’s] business records” relating to
defendant’s notes and mortgages.

Furthermore, even if plaintiff had presented adequate
evidence that the purported assignment of the mortgages and
notes attached to McCann’s affidavit was a copy of the original
in plaintiff’s files, this would not have been sufficient to
establish the effectiveness of the alleged assignment. This
document was signed by a JoAnn Rein, who identifies herself as a
vice-president of MERS, as nominee for Lehman Brothers, and was
notarized in Nebraska. Plaintiff’s submission in support of its
motion for summary judgment did not include a certification by
Rein or any other representative of MERS regarding her authority
to execute the assignment or the circumstances of the
assignment. In the absence of such further evidence, we do not
view the purported assignment of the mortgages and notes to be a
self-authenticating document that can support the summary
judgment in plaintiff’s favor. N.J.R.E. 901; see 2 McCormick on
Evidence § 221 (6th ed. 2006).

There is an additional potential problem with this
purported assignment. The assignment was not made by Lehman, as
payee of the promissory notes secured by the mortgage, but
rather by MERS, “as nominee for Lehman.” Although the notes and
mortgages appointed MERS as Lehman’s nominee, Lehman filed a
petition for bankruptcy protection in September 2008, see Andrew
Ross Sorkin, Lehman Files for Bankruptcy; Merrill is Sold, N.Y.
Times (Sept. 14, 2008), which was before the purported
assignment of defendant’s mortgage and note on January 30, 2009.

Therefore, we question whether Lehman’s designation of MERS as
its nominee remained in effect after Lehman filed its bankruptcy
petition, absent ratification of that designation by the
bankruptcy trustee. On remand, the trial court should address
the question whether MERS was still Lehman’s nominee as of the
date of its purported assignment of defendant’s note and
mortgage to plaintiff.

Accordingly, we reverse the August 31, 2010 order granting
plaintiff’s motion for summary judgment and remand to the trial
court for further proceedings in conformity with this opinion.

[ipaper docId=69388551 access_key=key-22fs56rdfpzf4tuolduu height=600 width=600 /]

 

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Foreclosure Ruling Irks Banks

Foreclosure Ruling Irks Banks


Since they can’t find someone with real knowledge, they probably are stuck because the majority of the originating companies are long gone and so are the employees…just as planned.

Palm Beach Post-

WEST PALM BEACH — An appeals court ruling in favor of Wellington homeowners in foreclosure is causing “calamitous confusion,” according to bank attorneys who say it could snarl hundreds of thousands of pending foreclosure cases.

The bank is asking for a rehearing and clarification of the Sept. 7 decision by the 4th District Court of Appeal, which said a foreclosure affidavit submitted by a bank employee was hearsay because the person relied on computerized information and did not have personal knowledge of the case.

The lack of personal knowledge of foreclosure documents is the foundation of the robo-signing controversy that continues to delay foreclosure proceedings.

The bank is not challenging the court’s decision in Gary and Anita Glarum vs. LaSalle Bank, but it said the ruling has been misinterpreted to mean that the person relying on computerized records must be the one who actually entered them into the computer or the direct custodian of the record.

[PALM BEACH POST]

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NY Appellate Div – 2nd Dept. “Deutsche Bank Affidavit Fail, Submitted Two Different Versions of an Undated Allonge … Purportedly Affixed to the Original Note”

NY Appellate Div – 2nd Dept. “Deutsche Bank Affidavit Fail, Submitted Two Different Versions of an Undated Allonge … Purportedly Affixed to the Original Note”


Decided on October 4, 2011

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE DIVISION : SECOND JUDICIAL DEPARTMENT

.

REINALDO E. RIVERA, J.P.
ANITA R. FLORIO
JOHN M. LEVENTHAL
SHERI S. ROMAN, JJ.
2010-06483
(Index No. 38303/07)

[*1]Deutsche Bank National Trust Company, etc., respondent,
v
Joell C. Barnett, appellant, et al., defendants.

Joell C. Barnett, Brooklyn, N.Y., appellant pro se.

DECISION & ORDER

In an action to foreclose a mortgage, the defendant Joell C. Barnett appeals, as limited by her brief, from so much of an order of the Supreme Court, Kings County (Jackson, J.), dated February 23, 2010, as granted those branches of the plaintiff’s motion which were to strike the answer, for summary judgment on the complaint, and for an order of reference, and denied her cross motion pursuant to CPLR 3211(a)(3) to dismiss the complaint.

ORDERED that the order is modified, on the law, by deleting the provisions thereof granting those branches of the plaintiff’s motion which were to strike the answer, for summary judgment on the complaint, and for an order of reference, and substituting therefor provisions denying those branches the motion; as so modified, the order is affirmed insofar as appealed from, with costs to the appellant.

In order to commence a foreclosure action, a plaintiff must have a legal or equitable interest in the mortgage. A plaintiff has standing where it is the holder or assignee of both the subject mortgage and of the underlying note at the time the action is commenced (see Bank of N.Y. v Silverberg, 86 AD3d 274; Aurora Loan Servs., LLC v Weisblum, 85 AD3d 95; Wells Fargo Bank, N.A. v Marchione, 69 AD3d 204, 207; U.S. Bank, N.A. v Collymore, 68 AD3d 752; Countrywide Home Loans, Inc. v Gress, 68 AD3d 709). An assignment of a mortgage without assignment of the underlying note or bond is a nullity, and no interest is acquired by it (see Merritt v Bartholick, 36 NY 44, 45; Bank of N.Y. v Silverberg, 86 AD3d 274; LaSalle Bank Natl. Assn. v Ahearn, 59 AD3d 911, 912). “Either a written assignment of the underlying note or the physical delivery of the note prior to the commencement of the foreclosure action is sufficient to transfer the obligation” (U.S. Bank, N.A. v Collymore, 68 AD3d at 754; see Aurora Loan Servs., LLC v Weisblum, 85 AD3d at 108). [*2]Here, the plaintiff failed to establish, as a matter of law, that it had standing to commence the action. The Supreme Court thus erred in awarding the plaintiff summary judgment.

Contrary to the contention of the defendant Joell C. Barnett, an affidavit made by the plaintiff was not required, since the plaintiff was not proceeding upon Barnett’s default (cf. CPLR 3215[f]). However, the documentation submitted failed to establish that, prior to commencement of the action, the plaintiff was the holder or assignee of both the note and mortgage. The plaintiff submitted copies of two different versions of an undated allonge which was purportedly affixed to the original note pursuant to UCC 3-202(2) (see Slutsky v Blooming Grove Inn, Inc., 147 AD2d 208, 212). Moreover, these allonges purporting to endorse the note from First Franklin, A Division of National City Bank of Indiana (hereinafter Franklin of Indiana) to the plaintiff conflict with the copy of the note submitted, which contains undated endorsements from Franklin of Indiana to First Franklin Financial Corporation (hereinafter Franklin Financial), then from Franklin Financial in blank.

The plaintiff also failed to establish that the note was physically delivered to it prior to the commencement of this action. The vice president of the plaintiff’s servicing agent and the plaintiff’s counsel both affirmed that the original note is in the possession of the plaintiff’s counsel. However, the affidavits did not state any factual details concerning when the plaintiff received physical possession of the note and, thus, failed to establish that the plaintiff had physical possession of the note prior to commencing this action (see Aurora Loan Servs., LLC v Weisblum, 85 AD3d at 108; U.S. Bank, N.A. v Collymore, 68 AD3d at 754). Finally, the Certificates of Resolution and Incumbency submitted to establish the authority of one Eileen Gonzales to execute a September 14, 2007, assignment of mortgage from Franklin Financial to the plaintiff were executed after the subject assignment and, thus, cannot establish that she had such authority at the time the mortgage assignment was made. These inconsistencies raise an issue of fact as to the plaintiff’s standing to commence this action. Thus, the Supreme Court should have denied those branches of the plaintiff’s motion which were to strike the answer, for summary judgment on the complaint, and for an order of reference; the cross motion was properly denied (see US Bank N.A. v Madero, 80 AD3d 751, 753).
RIVERA, J.P., FLORIO, LEVENTHAL and ROMAN, JJ., concur.

ENTER:

Matthew G. Kiernan

Clerk of the Court

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UT Class Action Lawsuit Alleging Fair Debt Collection Violations to Proceed Against Bank of America and Recontrust Company

UT Class Action Lawsuit Alleging Fair Debt Collection Violations to Proceed Against Bank of America and Recontrust Company


KCSG-

US District Judge Dee Benson ruled Tuesday that a class action lawsuit can proceed against ReconTrust and Bank of America (NYSE: “BAC”).

.

IN THE UNITED STATES DISTRICT COURT, DISTRICT OF UTAH,

CENTRAL DIVISION

JEREMY COLEMAN, DWAYNE WATSON, SAMUEL ADAMSON, ETHNA LYNCH,

Plaintiffs,

vs.

RECONTRUST COMPANY, N.A.,

[…]

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You Must Read This NY Judge’s Order… It’ll Leave You Laughing! – Midland Funding LLC v. Tagliafferro

You Must Read This NY Judge’s Order… It’ll Leave You Laughing! – Midland Funding LLC v. Tagliafferro


Decided on September 27, 2011

Civil Court of the City of New York,
Richmond County

.

 Midland Funding LLC, dba IN NEW YORK, AS MIDLAND FUNDING OF DELAWARE LLC Claimant,

against

Jessica Tagliafferro, Defendant.

15781/11

Philip S. Straniere, J.

“Who are you? Who, who, who, who?”[FN1]

“But it ain’t me , babe. No, no, no, it ain’t me babe. It ain’t me you’re lookin’ for babe.”[FN2]

“I am he as you are me and we are all together.”[FN3]

 

Plaintiff, Midland Funding LLC DBA in New York as Midland Funding of Delaware LLC, commenced this action against the defendant, Jessica Tagliaferro, alleging that the defendant defaulted on the terms of a consumer credit agreement. As set forth below, it is obvious that the plaintiff has taken these classic rock lyrics to heart and created a situation which may be a deceptive business practice.

The court has been informed by the clerk of the court that the plaintiff has filed the summons and complaint in this matter containing the following information:

Midland Funding LLC DBA in New York as Midland Funding of Delaware LLC

Attorneys for the Plaintiff

100 Church Street, 8th Floor

New York, NY 10007

(866)626-5053

No attorney’s name is specifically designated on the summons and complaint. CPLR §321(a) prohibits self-representation by a corporation and requires a corporation to appear by an [*2]attorney. This requirement extends to limited liability companies as they are legal entities distinct from their members [Michael Reilly Design Inc. v. Houraney 40 AD3d 592 (2007)]. No where in the pleadings is the name of an attorney disclosed.

In addition, CPLR §2101(d) provides:

Indorsement by attorney. Each paper served or filed shall be indorsed with the name, address and telephone number of the attorney for the party serving or filing the paper, or if the party does not appear by attorney, with the name, address and telephone number of the party.

The pleadings lack the name of an attorney and are defective.

The Rules of the Chief Administrator of the Courts have expanded this statute to require that all papers and pleadings be signed. 22 NYCRR §130-1.1-1 provides:

Signing of Papers.

(a) Signature. Every pleading, written motion, and other paper, served on another party or filed or submitted to the court shall be signed by an attorney,…with the name of the attorney…clearly printed or typed directly below the signature. Absent good cause shown, the court shall strike any unsigned paper if the omission of the signature is not corrected promptly after being called to the attention of the attorney….

The signing of the pleading becomes a certification by counsel as to the accuracy of the information contained in the document [22 NYCRR §130-1.1-a(b)]. Plaintiff’s summons and complaint lacks a signature and therefore is not a certification as required by the rule. The fact that the complaint has been verified, does not correct this defect.

The complaint is verified by a “Scott Morris, Esq.” He states in the verification that he is the attorney for the plaintiff but does not set forth beneath his signature any address or other information set forth in the above rule by which the court, or a defendant, might communicate with him. The attorney registration records lists only one attorney with that name in New York, but he is practicing law at a different address in New York City and is doing so as a member of law firm. Other consumer credit debt collector’s list their “in-house” legal counsel or department as the attorney of record, but always have the name of an attorney designated on the pleadings. This procedure is not being utilized by the plaintiff. Plaintiff is not even seeking to avail itself of the device literary utilized by Agatha Christie in “And Then There Were None” of using the pseudonym “U.N. Owen” for an “unknown” person, in that story, the host of the weekend party.

The summons and complaint lists the plaintiff’s residence as 8875 Aero Drive, Suite 200, San Diego, California and the complaint alleges that the plaintiff is a “foreign entity.” These facts would permit the complaint to be verified by an attorney as was done here [CPLR§3020(d)(3)]. Interestingly a search of the Department of State, Division of Corporations records lists seven entities registered in New York containing the name “Midland Funding” including both Midland Funding LLC and Midland Funding of Delaware LLC, the two entities [*3]mentioned in this summons and complaint. The Division of Corporations records shows both of these entities as an “Active,” “Foreign Limited Liability Company” formed in “Delaware.” Both names were filed with the Department of State on the same date, January 22, 2008. The website maintained by the California Secretary of State discloses only “Midland Funding LLC” as an active entity. Its address is the one recited in the pleadings for the plaintiff.

Examination with of the pleadings reveals another more substantial problem beyond the failure to disclose the name of counsel. The plaintiff is designated as “Midland Funding LLC DBA in New York as Midland Funding of Delaware LLC.” DBA is generally thought to be an abbreviation for “doing business as,” a term which means that an individual or entity-such as a corporation or limited liability company-is conducting or transacting business in New York under an “assumed name.” This should not be confused with the jurisdictional concept of “doing business” in a particular state so as to be present for the commencement of litigation.

New York law [General Business Law Article 9-b] requires that a person or entity doing business under an assumed name comply with the requirements of GBL §130. The statute requires a limited liability company to file with the secretary of state a certificate setting forth the name under which business is to be carried on, conducted or transacted as well as its legal name [GBL§ 130(1) (b)]. The statute also provides; “the real name’ of a limited liability company shall mean its name as set forth in the articles of organization and any generally accepted, understood or recognizable abbreviation of such names” [GBL §130(1-a)(b)]. This being the case, because both Midland Funding LLC and Midland Funding of Delaware LLC are registered as foreign limited liability companies with the Department of State, both are “real names” under the statute. Therefore, one entity cannot be a “DBA” for the other entity. The idea is that there is only one legal person [GBL§130(1-a)(a)] whether the name being used is either the name of the legally registered entity or individual, or the one under which business is being conducted. There is no evidence that the proper certificate of doing business under an assumed name has been filed by the plaintiff.

For instance, should Clark Kent abandon his altruism and decide to supplement his meager reporter’s income by marketing his alter ego, he would go from “Clark Kent aka Superman” to “Clark Kent dba Superman.” Other proper “doing business as” designations would be “Scrooge McDuck Enterprises, Inc. dba The Duckburg National Bank.” Or even “Rick Blaine dba Rick’s Café Americain.” This issue could get complicated as in the case of the performer “Prince” when he decided to be called “The Artist Formerly Known As Prince.” Was this a change of name or was he now really “Prince dba The Artist Formerly Known As Prince?” (This apparently is an issue for a higher court to resolve). Also an interesting situation was created by Halley Mills playing the twins Susan Evers and Sharon McKendrick in “The Parent Trap” and Patty Duke portraying both Patty Lane and her identical cousin Cathy Lane in “The Patty Duke Show.” Can a person “do business as” more than one other person?

In this litigation, a designation such as either Midland Funding LLC dba “Midland Funding of New York” or Midland Funding of Delaware LLC dba “Midland Funding of New [*4]York” would be a proper. The current attempt to have one registered LLC be designated as another LLC is not permitted. Each entity named in the caption is capable of doing business as or under an assumed name, but cannot do business under each others name.

Perhaps the situation has been complicated because plaintiff alleges that “Plaintiff is a debt collector licensed by the NYC Department of Consumer Affairs, License #1312658.” A search of the Department of Consumer Affairs records shows that license number belongs to Midland Funding of Delaware LLC and not Midland Funding LLC. Which means only Midland Funding of Delaware may attempt to collect this debt in New York City.

In fact, this practice may be a “deceptive” act or practice under General Business Law §349 in that it is impossible for the defendant to know which entity is the correct plaintiff. The complaint alleges that this consumer credit debt was taken by assignment from the original creditor. It is impossible for either the defendant or the court to determine which of the two Midland LLC’s named in the complaint is the proper one. The complaint does not plead which entity actually purchased the defendant’s alleged debt nor which entity is trying to collect it. Plaintiff may be subject to damages and punitive damages under that statute if a deceptive practice is established. The court at this juncture will not conclude any bad faith on the part of the plaintiff and will give the plaintiff the opportunity to correct the pleadings.

In an attempt to resolve these issues and determine the name of counsel, the court recorded the entire summons and complaint and then played it backwards. All to no avail.

The commencement of litigation to collect consumer debt is neither “brain surgery” nor “rocket science.” But it does require some attention to the rules of civil procedure, which based on this court’s experience, apparently is not part of the equation for a significant number of members of the debt collection fraternity. When you buy furniture from IKEA to be assembled, it is generally a good idea to read and follow directions lest the furniture unexpectedly collapse under its own weight. You should not mistake an Allen wrench for a walking stick provided by Obamacare for Thumbelina, it, like the CPLR, is there to help you successfully complete the project.

Based on the foregoing, the clerk is directed to stay placing this matter on a trial or motion calendar or entering a default judgment until plaintiff files an amended summons and complaint designating counsel with the proper contact information and correcting the plaintiff’s “doing business as” status.

The foregoing constitutes the decision and order of the court.

Dated: September 27, 2011

Staten Island, NYHON. PHILIP S. STRANIERE

Judge, Civil Court

Footnotes

Footnote 1: “Who Are You?” by Peter Townshend

Footnote 2: “It Ain’t Me, Babe” by Bob Dylan

Footnote 3: “I Am the Walrus” by John Lennon & Paul McCartney

FYI They Recently Settled:

“Robo-Affidavit” Class Action Settles for $5.2 Million | MIDLAND FUNDING v. BRENT

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NEVADA NEW ‘FORECLOSURE FRAUD REFORM’ BILL TO TAKE EFFECT OCTOBER 1

NEVADA NEW ‘FORECLOSURE FRAUD REFORM’ BILL TO TAKE EFFECT OCTOBER 1


Catherine Cortez Masto, Attorney General
555 E. Washington Avenue, Suite 3900
Las Vegas, Nevada 89101
Telephone – (702) 486-3420
Fax – (702) 486-3283
Web – http://ag.state.nv.us

FOR IMMEDIATE RELEASE
DATE: September 29, 2011

Contact: Jennifer López
702-486-3782

ATTORNEY GENERAL CORTEZ MASTO AND ASSEMBLY MAJORITY LEADER
CONKLIN ANNOUNCE NEW ‘FORECLOSURE FRAUD REFORM’ BILL TO TAKE
EFFECT OCTOBER 1

Las Vegas, NV – Nevada Attorney General Catherine Cortez Masto and Nevada Assembly Majority
Leader Marcus Conklin announced that the new ‘Foreclosure Fraud Reform’ law will take effect on
October 1, 2011.

“This new law helps protect Nevadans from improper foreclosures and protects the integrity of the
system for homeowners,” said Cortez Masto. “I was pleased to work with Majority Leader Conklin on
this important bill that creates security, legitimacy, and transparency in the foreclosure process.
Assembly Bill 284 will protect the Silver State’s housing market by ensuring homeowners and
prospective purchasers can get a clean chain of title and are treated more fairly.”

“There have been widespread instances of foreclosures based on false, improper or incomplete
documents throughout the nation over the past few years,” Conklin said. “This new law is part of our
ongoing commitment to prevent foreclosure fraud in our state and to ensure that the Attorney General
has the tools necessary to prosecute those who defraud homeowners.”

The bill gives Nevada residents access to information on the companies that hold their mortgages by
requiring the documents used in the foreclosure process to be recorded in the county where the
property is located. Additionally, the legislation requires a party seeking to foreclose in Nevada to
record a notarized Affidavit of Authority to Foreclose that includes information showing that the party
seeking to foreclose on the property has the legal right to exercise the power of sale. AB 284 also
strengthens the Attorney General’s enforcement authority over foreclosure fraud, and gives property
owners a new right of action to enforce their own legal rights in foreclosures.

###

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SJC of Maine Vacates SJ No Mention of MERS in Note, HSBC failed to include any facts to “properly presented proof of… all assignments and endorsements of the note

SJC of Maine Vacates SJ No Mention of MERS in Note, HSBC failed to include any facts to “properly presented proof of… all assignments and endorsements of the note


MAINE SUPREME JUDICIAL COURT

HSBC BANK USA, N.A., AS TRUSTEE UNDER THE POOLING AND
SERVICING AGREEMENT DATED AS OF DECEMBER 1, 2005, FREMONT
HOME LOAN TRUST 2005-E

v.

JANELLE GABAY

EXCERPT:

[¶1] Janelle Gabay appeals from a summary judgment entered in the District
Court (Bridgton, Powers, J.) in favor of HSBC Bank USA, N.A., as Trustee under
the Pooling and Servicing Agreement dated as of December 1, 2005, Fremont
Home Loan Trust 2005-E, on HSBC’s complaint for foreclosure and sale pursuant
to 14 M.R.S. §§ 6321-6325 (2010).1 Gabay argues that HSBC’s motion for
summary judgment should have been denied because HSBC’s statement of
material facts left unresolved genuine issues of material fact as to (1) whether
HSBC is the owner and holder, pursuant to a valid endorsement, of the promissory
note due to HSBC’s failure to present adequate evidence of such; (2) the order of
priority among creditors; (3) the sufficiency of identification of the court costs that
HSBC sought to collect; and (4) the identification of the premises to be foreclosed
upon. Because genuine issues of material fact exist, we vacate the judgment and
remand for further proceedings.

[…]

II. LEGAL ANALYSIS

[¶8] We review a grant of summary judgment de novo, viewing the
evidence in the light most favorable to the nonmoving party to determine “whether
the parties’ statements of material facts and the referenced record evidence reveal a
genuine issue of material fact.” JPMorgan Chase Bank v. Harp, 2011 ME 5, ¶ 15,
10 A.3d 718. In so doing, we consider only the material facts set forth, and the
portions of the record referred to, in the statements of material facts. Salem
Capital Grp., LLC v. Litchfield, 2010 ME 49, ¶ 4, 997 A.2d 720. In summary
judgment practice, the court “is neither required nor permitted to independently
search a record to find support for facts offered by a party.” Levine v. R.B.K. Caly
Corp., 2001 ME 77, ¶ 9, 770 A.2d 653. A party’s motion for summary judgment
may not be granted if that party fails to properly put the material facts before the
court, “regardless of the adequacy, or inadequacy, of the nonmoving party’s
response.” Id. ¶ 5.

[¶9] HSBC contends that it need not properly identify which paragraph of a
supporting record reference is the basis for a particular statement of material fact
when (i) the supporting record is included in its entirety in the summary judgment
record, or (ii) the critical paragraph in the record has been cited to support a
different material fact. However, our rules require that each statement of material
fact must directly refer the court to “the specific portions of the record from which
each fact is drawn.” Id. ¶ 9; M.R. Civ. P. 56(h)(1), (4). We have repeatedly noted
the importance of applying the summary judgment rules strictly in the context of
mortgage foreclosures. See HSBC Mortg. Servs., Inc. v. Murphy, 2011 ME 59, ¶ 9,
19 A.3d 815; JPMorgan Chase Bank, 2011 ME 5, ¶ 15, 10 A.3d 718.

[¶10] “In residential mortgage foreclosure actions, certain minimum facts
must be included in a mortgage holder’s statement of material facts on summary
judgment.” HSBC Mortg. Servs., 2011 ME 59, ¶ 9, 19 A.3d 815; see also M.R.
Civ. P. 56(j). To support a summary judgment motion in a residential mortgage
foreclosure action, the mortgage holder must include, at a minimum, the following
facts in its statement of material facts, each supported by evidence of a quality that
could be admissible at trial:

(1) The existence of the mortgage, including the book and page
number of the mortgage, and an adequate description of the
mortgaged premises, including the street address, if any;

(2) Properly presented proof of ownership of the mortgage note and
the mortgage, including all assignments and endorsements of the note
and the mortgage;

(3) A breach of condition in the mortgage;

(4) The amount due on the mortgage note, including any reasonable
attorney fees and court costs;

(5) The order of priority and any amounts that may be due to other
parties in interest, including any public utility easements;

(6) Evidence of properly served notice of default and mortgagor’s
right to cure in compliance with statutory requirements;

(7) After January 1, 2010, proof of completed mediation (or waiver or
default of mediation), when required, pursuant to the statewide
foreclosure mediation program rules; and

(8) If the homeowner has not appeared in the proceeding, a statement,
with a supporting affidavit, of whether or not the defendant is in
military service in accordance with the Servicemembers Civil Relief
Act.

HSBC Mortg. Servs., 2011 ME 59, ¶ 9 n.6, 19 A.3d 815; Chase Home Fin. LLC v.
Higgins, 2009 ME 136, ¶ 11, 985 A.2d 508; see also M.R. Civ. P. 56(j) (providing,
among other things, that a summary judgment may not be entered in a foreclosure
action unless it is determined that “the plaintiff has properly certified proof of
ownership of the mortgage note and produced evidence of the mortgage note, the
mortgage, and all assignments and endorsements of the mortgage note and the
mortgage”).

[¶11] Our analysis focuses on the first, second, fourth, and fifth
requirements listed above. We begin our discussion with the second requirement.
A. Ownership and Endorsement of the Note

[¶12] As noted above, HSBC is required to include the following
properly-supported facts in its statement of material facts: “properly presented
proof of ownership of the mortgage note . . . , including all assignments and
endorsements of the note . . . .” HSBC Mortg. Servs., 2011 ME 59, ¶ 9 n.6, 19
A.3d 815; Chase Home Fin., 2009 ME 136, ¶ 11, 985 A.2d 508.

[¶13] In its statement of material facts, HSBC asserts that it is the “current
holder of the Note,” citing to paragraph seven of its complaint and to paragraph
four of the Lender affidavit. There are multiple deficiencies in this statement of
material fact as it concerns proof of ownership of the note.

[¶14] First, neither of the citations included to support the bare factual
statement that HSBC is the current holder of the note properly supports that factual
statement. The cited paragraph of the Lender’s affidavit refers only to HSBC’s
being the current holder of the mortgage. The cited paragraph of the complaint
asserts that “[HSBC] is the current holder of the Note and Mortgage by virtue of an
assignment dated on or about December 22, 2008.” However, the assignment
expressly referred to in that averment, which assignment was not attached to the
complaint but which is included in the summary judgment record, did not assign
the note to HSBC. The December 22, 2008, assignment, entitled “ASSIGNMENT
OF MORTGAGE,” assigned MERS’s interest in the mortgage, but not the note, to
HSBC.8

[¶15] While an averment in a complaint that a defendant has failed to deny
is generally deemed admitted, see M.R. Civ. P. 8(d), the statement in HSBC’s
complaint that it is the current holder of the note pursuant to the December 22,
2008, assignment is not sufficiently supported in the context of a residential
mortgage foreclosure proceeding. When, as here, the mortgage-holder must
strictly comply with the requirements of 14 M.R.S. §§ 6321-6325 and M.R. Civ. P.
56(j), the paragraph of HSBC’s complaint cited in support of HSBC’s statement of
material facts providing that it is the current holder of the note does not properly
support that fact.

[¶16] An additional deficiency in HSBC’s statement of material facts is that
HSBC failed to include any facts relating to “properly presented proof of . . . all
assignments and endorsements of the note.” Chase Home Fin., 2009 ME 136,
¶ 11, 985 A.2d 508. HSBC was required to provide such proof, as it is undisputed
that the note was originally executed and delivered to Fremont Investment. HSBC
suggests in its brief, but does not specify in its statement of material facts, that the
summary judgment record contains evidence of a valid endorsement of the note to
HSBC including (1) paragraph two of the Lender’s affidavit, which states that
HSBC holds the note pursuant to a special endorsement, and (2) a copy of the
purported endorsement itself, included in the record as a separate page
accompanying, but not discernably affixed to, a photocopy of the note. Because
the statement of material facts contains no fact concerning properly presented
proof as to any endorsement of the note, however, much less a statement supported
by proper record references, we will not independently search the record to find
such evidence, see id. ¶ 12 n.4; Levine, 2001 ME 77, ¶ 9, 770 A.2d 653, and HSBC
would not be entitled to judgment as a matter of law.

[¶17] Our statement that we will not, and trial courts should not,
independently search a record to find evidence to support a party’s claim when that
claim is insufficiently referenced in that party’s statement of material facts is no
mere technicality to make summary judgment practice more difficult. Certainly in
each individual case it can be argued, as HSBC argues here, that review of the
entire record, with the specific facts now identified in the brief on appeal,
demonstrates that there really is no material fact in dispute. Such arguments
illustrate the need to identify material facts with specific citations to the record in
the statement of material facts filed in the trial court. If an essential fact can be
stated, with a proper record reference, in a brief on appeal, that fact could have and
should have been stated, with a proper record reference, in the statement of
material facts filed in the trial court. Before easy identification by brief on appeal,
the information to make an inadequate statement of material facts complete may
have been locatable only by a search of a record of fifty, one hundred, or more
pages. Placing every material fact in the statement of material facts, with a proper
record citation, as the rules require, avoids the necessity for such a time-consuming
search. Trial courts, who may have to consider multiple motions for summary judgment
at a time, could be considerably burdened searching for facts through
hundreds of pages of records, if the rules requiring complete, properly supported
statements of material facts are not enforced on appeal.

[¶18] Because HSBC’s statement of material facts fails to properly present
proof of ownership of the mortgage note, including all assignments and
endorsements of the note, genuine issues of material fact regarding HSBC’s
ownership of the note exist, precluding entry of judgment as a matter of law.

[…]

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Maine Appeal pushes for sanctions in foreclosure

Maine Appeal pushes for sanctions in foreclosure


Portland Press Herald-

PORTLAND – The “robo-signing” foreclosure case of a Denmark woman represents such a serious attack on the integrity of the state’s judicial system that an investigation of the mortgage servicer’s practices is warranted, the woman’s lawyer argued before the Maine Supreme Judicial Court on Wednesday.

Nicolle Bradbury’s attorney, Thomas Cox, also said a lower court erred when it failed to find GMAC Mortgage in contempt because one of its employees signed a sworn document in support of foreclosure on her home without reviewing the relevant records. Cox, who discovered the flawed process, argued that it was part of a pattern and that the trial court should have considered remedial or punitive action against GMAC.

Cox said such affidavits affect all of the 1,152 foreclosure actions brought in Maine by GMAC over the past six years. He said GMAC was sanctioned in Florida for the same problems in 2006, but failed to reform its practices.

[PORTLAND PRESS]

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GLARUM v. LASALLE BANK | FL 4DCA Reverses SJ “Home Loan Services Inc.’s Ralph Orsini Affidavit Fail”

GLARUM v. LASALLE BANK | FL 4DCA Reverses SJ “Home Loan Services Inc.’s Ralph Orsini Affidavit Fail”


DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT

July Term 2011

GARY GLARUM and ANITA GLARUM,
Appellants,

v.

LASALLE BANK NATIONAL ASSOCIATION, as Trustee for
Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed Certificates, Series 2006-FFI, FIRST WELLINGTON, INC., a dissolved
corporation, WELLINGTON SHORES HOMEOWNERS ASSOCIATION,
GREENVIEW SHORES NO.2 AT WELLINGTON HOMEOWNERS
ASSOCIATION, GREENVIEW SHORES HOMEOWNERS ASSOCIATION,
FIRST FRANKLIN FINANCIAL CORPORATION, and any unknown
heirs, devisees, grantees, creditors, and other unknown persons or
unknown spouses claiming by, through and under any of the abovenamed
parties,
Appellees.

No. 4D10-1372

[September 7, 2011]

PER CURIAM.

This appeal presents two issues. First, we consider whether the trial
court improperly granted a summary judgment of foreclosure in favor of
LaSalle Bank. We also consider whether the trial court erred in
sanctioning appellants’ counsel for filing frivolous pleadings pursuant to
section 57.105, Florida Statutes. We reverse the trial court’s entry of
summary judgment in favor of LaSalle in part, as LaSalle’s summary
judgment evidence was insufficient to establish the amount due to
LaSalle under the note and mortgage. We likewise reverse the entry of
sanctions against appellants’ counsel as improper. However, we find no
merit in appellants’ contention that LaSalle lacked standing to seek
foreclosure.

Appellants admitted in their answer that they had not made payments
according to the terms of the note, and as such, they were in default.
Appellants, however, denied LaSalle’s allegations regarding the amount
of the default. To establish the amount of appellants’ indebtedness for
summary judgment, LaSalle filed the affidavit of Ralph Orsini, a “specialist”
at the loan servicer, Home Loan Services, Inc. Orsini claimed
in the affidavit that appellants were in default of their payment
obligations and owed in excess of $340,000 on the note. In opposition to
the motion for summary judgment, appellants filed Orsini’s deposition,
wherein Orsini explained that he derived the $340,000 figure from his
company’s computer system. However, Orsini did not know who entered
the data into the computer, and he could not verify that the entries were
correct at the time they were made. To calculate appellants’ payment
history, Orsini relied in part on data retrieved from Litton Loan Servicing,
a prior servicer of appellants’ loan.

Florida Rule of Civil Procedure 1.510(c) requires a party moving for
summary judgment to “identify any affidavits, answers to interrogatories,
admissions, depositions, and other materials as would be admissible in
evidence.” If this evidence, taken in the light most favorable to the nonmoving
party, shows no genuine issue of material fact, the moving party
is entitled to judgment as a matter of law. Volusia Cnty. v. Aberdeen at
Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000).

We find that Orsini’s affidavit constituted inadmissible hearsay and,
as such, could not support LaSalle’s motion for summary judgment.
Pursuant to section 90.803(6)(a), Florida Statutes, documentary evidence
may be admitted into evidence as business records if the proponent of
the evidence demonstrates the following through a record’s custodian:
(1) the record was made at or near the time of the event; (2)
was made by or from information transmitted by a person
with knowledge; (3) was kept in the ordinary course of a
regularly conducted business activity; and (4) that it was a
regular practice of that business to make such a record.
Yisrael v. State, 993 So. 2d 952, 956 (Fla. 2008).

Orsini did not know who, how, or when the data entries were made
into Home Loan Services’s computer system. He could not state if the
records were made in the regular course of business. He relied on data
supplied by Litton Loan Servicing, with whose procedures he was even
less familiar. Orsini could state that the data in the affidavit was
accurate only insofar as it replicated the numbers derived from the
company’s computer system. Despite Orsini’s intimate knowledge of how
his company’s computer system works, he had no knowledge of how that
data was produced, and he was not competent to authenticate that data.
Accordingly, Orsini’s statements could not be admitted under section
90.803(6)(a), and the affidavit of indebtedness constituted inadmissible
hearsay. Because LaSalle presented no competent evidence to show
$422,677.85 in damages, the amount of the judgment to which LaSalle is
entitled remains at issue. Therefore, we reverse the entry of judgment in
favor of LaSalle and remand for further proceedings.

The trial court also entered sanctions against appellants’ counsel for
filing a “form affidavit” from an expert, Rita Lord, who opined on the
ability of lay persons to distinguish between original and high-quality
copies of promissory notes. Lord did not represent in the affidavit that
she reviewed the papers at issue in this case. Nevertheless, the trial
court was distressed by appellants’ counsel’s habit of filing “the same
affidavit in ten different cases, when [Lord] hasn’t seen the documents in
this case.” The court awarded LaSalle its reasonable attorney’s fees for
having to file a motion to strike Lord’s affidavit.

We note that LaSalle moved for sanctions under section 57.105,
Florida Statutes. That statute permits a trial court to award a
“reasonable attorney’s fee” to the “prevailing party” where the plaintiff’s
claim was frivolous or to a party to compensate for the opposing party’s
dilatory conduct. § 57.105(1)-(2), Fla. Stat. The trial court did not find
that appellants’ claims were frivolous, a n d th e trial court did not
conclude that Lord’s affidavit was filed to cause unreasonable delay.
Thus, section 57.105 could not serve as a basis for the award of
attorney’s fees to LaSalle.

To the extent that the trial court may have been exercising its
inherent authority to sanction parties or their attorneys, we also find
error. “[A] trial court possesses the inherent authority to impose
attorneys’ fees against an attorney for bad faith conduct.” Moakley v.
Smallwood, 826 So. 2d 221, 226 (Fla. 2002). To impose attorney’s fees
as a sanction under its inherent authority, the trial court must make an
“express finding of bad faith conduct” that is “supported by detailed
factual findings describing the specific acts of bad faith conduct that
resulted in the unnecessary incurrence of attorneys’ fees.” Id. at 227.
The trial court did not make any specific findings of bad faith on the
record, and the sanctions order must be reversed without prejudice. See
Finol v. Finol, 912 So. 2d 627, 629 (Fla. 4th DCA 2005). “Upon remand,
should the court be asked to reconsider the issue, any future hearing
and order must comply with the requirements of Moakley.” Id.

In summary, we reverse the judgment of foreclosure and the entry of
sanctions against appellants’ counsel a n d remand for further
proceedings consistent with this opinion.

Reversed and remanded.

CIKLIN, LEVINE, JJ., and THORNTON, JOHN W., JR., Associate Judge, concur.

* * *

Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; Meenu Sasser, Judge; L.T. Case No. CA08-028930 AW.

Thomas Ice of Ice legal, P.A., Royal Palm Beach, for appellant.

Thomasina F. Moore and Dennis W. Moore of Butler & Hosch, P.A.,
Orlando, for appellee LaSalle Bank National Association.

Not final until disposition of timely filed motion for rehearing

[ipaper docId=64200208 access_key=key-2gbo7ur1dwfuhkdraayd height=600 width=600 /]

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“Robo-Affidavit” Class Action Settles for $5.2 Million | MIDLAND FUNDING v. BRENT

“Robo-Affidavit” Class Action Settles for $5.2 Million | MIDLAND FUNDING v. BRENT


From the Memorandum Order from Ohio District Court…

MIDLAND v. BRENT [pdf]

According to that relationship, JBR requested an affidavit to support the Brent debt using the Midland “You’ve Got Claims” computer system, which is a system that allows attorneys like JBR to log on and request certain supporting documentation be generated.

Whether through the “You’ve Got Claims” system or otherwise, Midland receives and fulfills about 200 to 400 requests for affidavits per day. Ivan Jimenez, one of Midland’s ten “specialists” in the department that supports law firms, personally signs between 200 and 400 of such affidavits per day. (Ivan Jimenez Dep., Doc. 35, Ex. E at 15). He finds the stack on a printer, signs them, and sends them by internal mail to the notary. (Id. at 16-17 (“Q: Where do your affidavits come from? A: As far as what I deal with, they just come from the printer as far as where we get them”)). Mr. Jimenez has the ability to check the accuracy of the information on the affidavit via the computer system and he does, but the percentage of those that are checked for accuracy is “very few and far between.” (Id. at 24).

Then, after receipt of the signed affidavit from Midland, JBR attached it to the complaint filed in Sandusky, Ohio Municipal Court. When the affidavit is compared to the deposition of the affiant, Ivan Jimenez, it is apparent that the affidavit itself contains many falsehoods.

In paragraph 1, the affidavit reads “.I make the statements herein based upon my personal knowledge.” It is apparent from the Jimenez deposition that Mr. Jimenez actually had no personal knowledge of Ms. Brent or her account. For instance, while Mr. Jimenez is assigned to support and work with ten law firms, JBR is not one of them, leading to the logical conclusion that he would not have personal knowledge of any matter they were handling. (Jimenez Dep., Doc. 35, Ex. E at 7-8; Id. at 16). It appears to be an entirely random act that he signed this affidavit: he was the signer based entirely on when it came off the printer rather than based on his personal knowledge of Ms. Brent or her account. (Id. at 16-17). Mr. Jimenez never had any contact with Ms. Brent at all, leading to a logical conclusion that he could not have had the “personal knowledge” claimed in paragraph 1. See Id. at 25-26 (“Q: Did you ever have any contact with Ms. Brent, any business contacts at all? A: I did not personally.”).

In paragraph two of the affidavit, the affiant states:. I have personal knowledge of all relevant financial information concerning Midland Credit Management Inc.’s account number 8524186453, which includes the following information: that the defendant did fail to make payments on the account and that demand has been made for defendant to make payment of the balance owing on the account described above more than thirty (30) days prior to making this affidavit; that the attorneys representing the plaintiff Midland Funding LLC were retained on Midland Funding LLC (sic) behalf by me or persons reporting to me for the purpose of collecting the delinquent debt owed on the defendant’s account number set out above; and that there was due and owing to Midland Funding LLC the sum of $4,516.57. (Jimenez Aff. ¶ 2). As is evident in the discussion supra regarding paragraph one of the affidavit, Mr. Jimenez has no personal knowledge about the Brent account. He was not familiar with this account, did not know the last time a payment was made and did not know the outstanding balance. The paragraph also represents that the law firm, JBR, was hired by Mr. Jimenez or one of his employees. However, the following exchange during the deposition makes clear this is not true:

Q: So were you aware when you signed this affidavit that it was going to be used as part of a collection action in a lawsuit?

A: I was not.

Q: Are you aware of any other reasons that affidavits are completed, except for the collection actions that are filed in the courts?

A: I wouldn’t know what the firm uses the affidavits for.

Q: So you simply sign them?

A: Yes.

Q: You work for Midland Credit Management; correct?

A: Yes.

Q This affidavit lists at the top as a plaintiff, Midland Funding, LLC. What’s the relationship between Midland Credit Management and Midland Funding LLC?

A: I wouldn’t be the best person to ask that question. I don’t know.

Q: Okay. If you look at paragraph 2, four lines from the bottom of paragraph 2, you’re attesting to the fact, “that the attorneys representing Plaintiff Midland Funding LLC were retained on Midland Funding LLC behalf by me or persons reporting to me for the purpose of collecting the delinquent debt.” Is that what it says? Did I read that correctly?

A: Yes

Q: When did you retain the attorneys representing Midland Funding LLC?

A: I don’t know when the people in my department retained the attorneys.

Q: Did you personally retain the attorneys?

A: I did not.

Q: Which persons in your department did retain the attorneys?

A: I wouldn’t know specifically.

Q: Are these — how many people do you have reporting to you?

A: I have zero.

Q: Do you know the names of any persons in your department or any persons in Midland Credit who actually do have the responsibility of retaining attorneys?

A: I don’t know who in my department would do that.

Q: Would there be someone from another department that would do that?

A: I wouldn’t know. (Jimenez Dep. at 19-21).

Thus, there are two patently false claims within paragraph two: first that Mr. Jimenez had any personal knowledge regarding Ms. Brent’s debt, and second, that Mr. Jimenez was involved with the decision or act of hiring JBR to pursue legal action.

Paragraph three describes how Midland acquired the debt from Citibank, and if it is read alone, it only states a fact that is very likely true. However, when read in conjunction with paragraph one (“I make the statements herein based upon my personal knowledge”), it is apparently false. The issue of the affiant’s knowledge was raised in the deposition:

Q: Well, it says in this affidavit that, in number 3, “That Plaintiff’s predecessor in interest sold and assigned all right, title, and interest in this account to the plaintiff.” So if it was sold to the plaintiff, my assumption is it was purchased by the plaintiff. And the question I have is, did you have any role or were you involved in any way, shape, or form in the purchase of this account?

A: I was not.

Q: Do you know anything about the terms of the purchase of this account?

A: I do not. (Jimenez Dep. at 21-22). Thus, the statement in paragraph three, however true or not, cannot be based on personal knowledge.

Paragraph five is also of concern. It asserts that Ms. Brent is neither a minor nor mentally incapacitated, which are facts that are probably true. However, the affiant bases those conclusions “upon business dealings with the defendant(s),” which is clearly not possible since he had no contact with Ms. Brent. See supra.

If this is not enough, the affidavit is improperly sworn, as evidenced by the deposition:

Q: You mentioned earlier, when I asked you about that, you signed these affidavits and had them notarized. Was the notary present in the room when you were signing all the affidavits, or do you sign them and give them to the notary?

A: I sign them and give them to the notary. (Jimenez Dep. at 15). Minnesota Revised Code requires that “an oath… shall be administered… [t]o affiants[.]” Minn. Stat. Ann. § 358.07 (West 2004).

In finding assertions in the affidavit to be false and misleading, this Court is not concluding that all the information in the affidavit is incorrect. Brent has provided no evidence that the amount of the debt, the fact that it is unpaid, or other vital account information, is false. As discussed infra, the actual account information is probably either correct or likely thought correct in good faith by Midland and MCM (and likely a bona fide error if so).

However, this Court finds that the affidavit as a whole is both false and misleading for the aforementioned reasons and notwithstanding the fact that some of the data in it are correct. It is unclear to this Court why such a patently false affidavit would be the standard form used at a business that specialized in the legal ramifications of debt collection. Midland, MCM, or JBR could easily prepare a form affidavit that achieved the same goals without being misleading by reflecting the truth, plain and simple. Rather than basing the affidavit on false personal knowledge, they could base it on the accuracy of the records kept and the accuracy of the data.

3. Materiality

In a recent opinion, the Sixth Circuit held that “[a] statement cannot mislead unless it is material, so a false but non-material statement is not actionable.” Miller v. Javitch, Block and Rathbone, 561 F.3d 588, 596 (6th Cir. 2009) (quoting Hahn v. Triumph P’ships LLC, 557 F.3d 755, 758 (7th Cir. 2009)). Both Miller and Hahn allow for a statement to be “false in some technical sense” but still not in violation of the FDCPA. Miller, 561 F.3d at 596 (quoting Wahl v. Midland Credit Mgmt., Inc., 556 F.3d 643, 646 (7th Cir.2009)); Hahn, 557 F.3d at 758.

Generally, material facts are ones which, if known, might influence a person’s decision on a matter. See generally Black’s Law Dictionary 998 (8th ed. 2004) (defining material as “[h]aving some logical connection with the consequential facts [or] [o]f such a nature that knowledge of the item would affect a person’s decision-making; significant; essential[.]”). Thus, the Court evaluates statements for materiality by considering whether they make the proposed assertion more or less likely.

In general, a complaint and attached affidavit act as both a message to the court and a message to the debtor.*fn2 While the creditor seeks different action from either audience (payment from the debtor as opposed to judgment from the court), the general assertions are the same: that the debt is valid, that there is a total amount, that it is delinquent, that it is subject to interest, and that it is now due and owing. Therefore, a statement or claim based on an affidavit would be material if it makes one of those listed assertions more or less likely than if that fact were not considered.

It is unsurprising when a consumer/debtor contacted by a collection agency about a seven-year-old debt would question whether it was a valid obligation. Ms. Brent instantly questioned the validity of the debt. Both the complaint and Jimenez affidavit refer to the debt being owed to “CITIBANK USA,” and in her answer, Brent “denies that she originally owed any claim to CITIBANK USA at any time.” (Doc. 2 at ¶ 1; See also Brent Dep., Doc. 35, Ex. F at 26 (wherein Ms. Brent asserts “[t]o my knowledge, I’ve never had a CitiBank USA.”)). Thus, Ms. Brent clearly questions the validity of the debt. To further add confusion to this particular case, investigation reveals that the debt was originally owed to “Associates,” and was acquired by Citibank before it was acquired by Midland years later. Since neither the complaint nor affidavit mention “Associates” in any form, it would be extremely plausible for Ms. Brent to doubt the validity of this debt.

The claims within the Jimenez affidavit that this Court finds to be false are materially related to supporting the proposition of whether the debt is valid. The affidavit states that the affiant personally knows that this debt is valid, that he personally has “business dealings with the defendant(s),” and specifically that he has personal knowledge of this particular account. These statements are material to the issue of whether the debt is valid at all, and if relied on, help to make the proposition that it is more likely valid than it was without the statements.

Considering public policy, it is also worth noting many debt collection cases of these types place courts in the position of evaluating the validity of the plaintiff’s claim without any response from the defendant. Thus, in general terms, courts rely on the assertions in an affidavit to determine, among other things, whether the debt is valid and judgment, usually default judgment, should be granted.

This case, then, is distinguishable from those with immaterial falsehoods. In Miller, the Sixth Circuit determined that the difference between suing “for money loaned” rather than specifying that it was for an unpaid credit card debt did not amount to a violation of the FDCPA. Miller v. Javitch, Block & Rathbone, 561 F. 3d 588 (6th Cir. 2009). Miller admitted “that she ‘pretty much’ understood [the complaint]” when she received it as being an attempt to collect on a credit card that she stopped paying. Id. at 591. She was aware of the credit card and recalled that she stopped paying on it. Id. at 590.

By contrast, in the case at the bar, Brent claims that she was not aware of any obligation owed to Citibank. Upon receiving the Midland complaint and attached Jimenez affidavit, she had to evaluate whether the debt being sued on was a valid one. The contents of the affidavit itself, and in particular the fact that the affiant allegedly had personal knowledge that the debt was valid, would effectively serve to validate the debt to the reader, whether that was Brent or a court.

Therefore, the affidavit was false, deceptive, and misleading in its use in conjunction with an attempt to collect a debt, and Midland and MCM have violated FDCPA § 1692e.

Below is the Settlement Agreement set in place

[ipaper docId=62460947 access_key=key-25d1nrlzklhzplacelcb height=600 width=600 /]

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Downey Sav. & Loan Assn., F.A. v Trujillo | NY Judge Schack Slams Ebenezer Scrooge “Under the penalties of perjury, Deceptive trick and fraud upon the Court, “Bah, humbug!”

Downey Sav. & Loan Assn., F.A. v Trujillo | NY Judge Schack Slams Ebenezer Scrooge “Under the penalties of perjury, Deceptive trick and fraud upon the Court, “Bah, humbug!”


Decided on August 12, 2011

Supreme Court, Kings County

.

Downey Savings and Loan Association, F.A., Plaintiff,

against

Dario Trujillo, et. al., Defendants.


22268/08

Plaintiff

Nicholas E. Perciballi, Esq.

Druckman Law Group, PLLC

Westbury Jericho NY

Arthur M. Schack, J.

Plaintiff’s counsel, in this foreclosure action, engaged in possible sanctionable conduct by affirming “under the penalties of perjury” to a false statement. In her January 7, 2011 affirmation, required by Administrative Order (AO) 548/10 of October 20, 2010, plaintiff’s counsel, Margaret E. Carucci, Esq., of DRUCKMAN LAW GROUP PLLC (DRUCKMAN), was required to confirm the accuracy of the subject foreclosure papers, documents and notarizations. Ms. Carucci stated that she confirmed the accuracy by communicating, on December 24, 2010, with Tammy Denson, an “Officer of Downey Savings and Loan.” While Ms. Carucci might have communicated with Tammy Denson on Christmas Eve 2010, plaintiff DOWNEY SAVINGS AND LOAN ASSOCIATION, F.A. (DOWNEY) ceased to exist on November 21, 2008. (See Federal Deposit Insurance Company Press Release 124-2008 of November 21, 2008). [*2]DOWNEY, on December 24, 2010, resided with the Ghost of Christmas Past. Tammy Denson, until November 21, 2008 may have been employed by DOWNEY, but is now employed by DOWNEY’s successor in interest, U.S. BANK NATIONAL ASSOCIATION (US BANK). This Court, as will be explained, gave DRUCKMAN an opportunity to correct their AO 548/10 affirmation, in my May 9, 2010 order, but DRUCKMAN failed to do so. Therefore, because DRUCKMAN violated AO548/10 with a false affirmation and my subsequent May 9, 2010 order, the instant foreclosure action, for procedural reasons, is dismissed with prejudice.

Ms. Carucci affirmed “under the penalties of perjury” that she communicated on Christmas Eve 2010 with an officer of a defunct financial institution. This is a deceptive trick and fraud upon the Court. It cannot be tolerated. This Christmas Eve conduct, in the words of Ebenezer Scrooge, is “Bah, humbug!”

Conduct is frivolous if it “asserts material factual statements that are false,” an apt definition for “humbuggery.” Therefore, Margaret E. Carucci, Esq. and DRUCKMAN LAW GROUP PLLC, will be given an opportunity to be heard why this Court should not sanction them for making a “frivolous motion,” pursuant to 22 NYCRR §130-1.1.

Background

Plaintiff DOWNEY commenced this foreclosure action for the premises located at 70 Somers Street, Brooklyn, New York (Block 1542, Lot 21, County of Kings), on July 31, 2008, by filing the summons, complaint and notice of pendency with the Kings County Clerk’s Office. Defendant DARIO TRUJILLO (TRUJILLO) never answered. I issued an order of reference for the subject premises on July 15, 2010. Then, plaintiff DOWNEY’s counsel, DRUCKMAN, filed with the Kings County Clerk’s Office, on January 26, 2011, a motion for a judgment of foreclosure and sale.

At the May 9, 2011 oral arguments, on the motion for a judgment of foreclosure and sale, I discovered that the subject TRUJILLO mortgage and note had been assigned to U.S. BANK NATIONAL ASSOCIATION (US BANK) by the Federal Deposit Insurance Company (FDIC) as Receiver for DOWNEY. The FDIC seized DOWNEY’s assets on November 21, 2008 and assigned them to US BANK. Svetlana Kaplun, Esq., of DRUCKMAN, in her January 21, 2011 affirmation in support of the motion for a judgment of foreclosure and sale, stated, in ¶ 13:

The mortgage at issue has been assigned to US BANK NATIONAL

ASSOCIATION, AS SUCCESSOR IN INTEREST TO THE FEDERAL

DEPOSIT INSURANCE CORPORATION AS RECEIVER FOR DOWNEY SAVING AND LOAN ASSOCIATION, F.A. Accordingly, it is

respectfully requested that name of plaintiff be amended to US BANK NATIONAL ASSOCIATION, AS SUCCESSOR IN INTEREST TO THE FEDERAL DEPOSIT INSURANCE CORPORATION AS RECEIVER FOR DOWNEY SAVING AND LOAN ASSOCIATION, F.A. A copy of

the assignment is attached hereto and made a part hereof.

An executed copy of the April 20, 2009 assignment and assumption of interests and obligations from assignor FDIC as Receiver for DOWNEY to assignee US BANK was attached to the motion.

Also attached to the motion was the January 7, 2011 affirmation of Ms. Carucci, as per AO 548/10. According to the October 20, 2010 Office of Court Administration’s press release [*3]about the filing requirements of AO 548/10:

The New York State court system has instituted a new filing

requirement in residential foreclosure cases to protect the integrity

of the foreclosure process and prevent wrongful foreclosures. Chief

Judge Jonathan Lippman today announced that plaintiff’s counsel in

foreclosure actions will be required to file an affirmation certifying

that counsel has taken reasonable steps — including inquiry to banks

and lenders and careful review of the papers filed in the case —

to verify the accuracy of documents filed in support of residential

foreclosures. The new filing requirement was introduced by the Chief

Judge in response to recent disclosures by major mortgage lenders

of significant insufficiencies — including widespread deficiencies in

notarization and “robosigning” of supporting documents — in residential

foreclosure filings in courts nationwide. The new requirement is

effective immediately and was created with the approval of the

Presiding Justices of all four Judicial Departments.

Chief Judge Lippman said, “We cannot allow the courts in

New York State to stand by idly and be party to what we now know

is a deeply flawed process, especially when that process involves

basic human needs — such as a family home — during this period

of economic crisis. This new filing requirement will play a vital role

in ensuring that the documents judges rely on will be thoroughly

examined, accurate, and error-free before any judge is asked to take

the drastic step of foreclosure.” [Emphasis added]

(See Gretchen Morgenson and Andrew Martin, Big Legal Clash on

Foreclosure is Taking Shape, New York Times, Oct. 21, 2010; Andrew

Keshner, New Court Rules Says Attorneys Must Verify Foreclosure Papers,

NYLJ, Oct. 21, 2010).

Ms. Carucci, in her January 7, 2011 AO 548/10 affirmation, affirmed “under the penalties of perjury”:

2. On December 24, 2010, I communicated with the following

representative or representatives of Plaintiff, who informed me that

he/she/they (a) personally reviewed plaintiff’s documents and records [*4]

relating to this case for factual accuracy; and (b) confirmed the

factual accuracy and allegations set forth in the Complaint and

any supporting affirmations filed with the Court, as well as the

accuracy of the notarizations contained in the supporting documents

filed therewith.

NameTitle

Tammy DensonOfficer of Downey Savings and Loan

949-798-6052

3. Based upon my communication with Tammy Denson, as well

as upon my inspection and reasonable inquiry under the circumstances,

I affirm that, to the best of my knowledge, information, and belief, the

Summons and Complaint, and other papers filed or submitted to the

Court in this matter contain no false statements of fact or law . . .

4. I am aware of my obligations under New York Rules of

Professional Conduct (22 NYCRR Part 1200) and 22 NYCRR Part 130.

[Emphasis added]

The Court is concerned that Ms. Carucci affirmed to a falsehood, namely, that Ms. Denson is an Officer of defunct DOWNEY. In the presence of Svetlana Kaplun, Esq., who appeared on behalf of plaintiff’s counsel, DRUCKMAN, I called the above-listed telephone number for Tammy Denson. Ms. Denson did not answer the phone, but a voice mail message stated that she was an officer of US BANK, not DOWNEY. Therefore, I denied the motion for a judgment of foreclosure and sale, and issued, at the May 9, 2011 oral arguments, the following short-form order:

Plaintiff’s motion for a judgment of foreclosure and sale is

denied without prejudice to renew within sixty (60) days of this

decision and order. Plaintiff’s counsel claims to represent plaintiff

Downey, a defunct financial institution. Further it appears that

Margaret E. Carucci, Esq., an attorney for plaintiff possibly filed a

false affirmation with the Court. Ms. Carucci affirms under penalty of

perjury that a Tammy Denson is an officer of plaintiff Downey S & L,

which did not exist on 12/24/10, when she signed a sworn statement

as an “officer.”

The Court called Ms. Denson in the presence of Svetlana

Kaplun, Esq. today and Ms. Denson, in her voice mail, stated she is [*5]

a loan official of US Bank, not Downey S & L.

Plaintiff has 60 days to file an affirmation from an officer

with the officer’s title with US Bank, if it is the true owner of

the subject mortgage and note, as well as a renewed motion for a

judgment of foreclosure and sale.

Then, I received a letter, dated July 8, 2011 (the 60-day deadline for the affirmation from an officer of US BANK and the renewed motion), from Nicholas E. Perciballi, Esq. of DRUCKMAN, about the instant action. Mr. Perciballi stated “[t]his office represents the Plaintiff . . . Please advised that Margaret E. Carucci, Esq. is no longer employed with this firm. With regard to your Short From Order dated May 9, 2011, we respectfully request an additional 60 days so that we may work with our client to produce the documents needed to comply with your Order [sic].” The Court has no idea why DRUCKMAN waited until the last possible day to send me the July 8, 2011-letter. The termination of Ms. Carucci’s employment is not an acceptable excuse for delay. I gave DRUCKMAN, on May 9, 2011, sixty days to file a correct AO 548/10 affirmation. It is a waste of judicial resources to grant plaintiff “an additional 60 days so that we may work with our client to produce the documents needed to comply with your Order.” Court orders are not issued to be flouted.

Moreover, according to the Office of Court Administration’s Attorney Registry, Margaret E. Carucci, Esq., still lists her business address as DRUCKMAN LAW GROUP PLLC, in Westbury, New York. If she is no longer employed by DRUCKMAN, she might be in violation of 22 NYCRR 118.1 (f). This requires an attorney who changes the business address in his or her registration to “file an amended statement within 30 days of such change.”

Dismissal of the instant action

Plaintiff’s counsel, Mr. Perciballi, in his July 8, 2011-letter, did not present a reasonable excuse for the Court to grant a sixty-day extension to produce the documents required in my May 9, 2011 order. The Court does not work for US BANK and cannot wait for the multibillion dollar financial behemoth US BANK, to “produce the documents need to comply with” my May 9, 2011 order. The failure of plaintiff’s counsel, DRUCKMAN LAW GROUP PLLC to comply with two court orders, Chief Administrative Judge Pfau’s October 20, 2010 AO 548/10 and my May 9, 2011 order, demonstrates delinquent conduct by DRUCKMAN LAW GROUP PLLC. This mandates, for procedural reasons, the dismissal with prejudice of the instant action. Failure to comply with court-ordered time frames must be taken seriously and not ignored. There are consequences for ignoring court orders. The Court of Appeals, in Gibbs v St. Barnabas Hosp. (16 NY3d 74, 81 [2010]), instructed:

As this Court has repeatedly emphasized, our court system is

dependent on all parties engaged in litigation abiding by the rules of

proper practice (see e.g. Brill v City of New York, 2 NY3d 748 [2004];

Kihl v Pfeffer, 94 NY2d 118 [1999]). The failure to comply with

deadlines not only impairs the efficient functioning of the courts and [*6]

the adjudication of claims, but it places jurists unnecessarily in the

position of having to order enforcement remedies to respond to the

delinquent conduct of members of the bar, often to the detriment of

the litigants they represent. Chronic noncompliance with deadlines

breeds disrespect for the dictates of the Civil Practice Law and Rules

and a culture in which cases can linger for years without resolution.

Furthermore, those lawyers who engage their best efforts to comply

with practice rules are also effectively penalized because they must

somehow explain to their clients why they cannot secure timely

responses from recalcitrant adversaries, which leads to the erosion

of their attorney-client relationships as well. For these reasons, it

is important to adhere to the position we declared a decade ago that

[i]f the credibility of court orders and the integrity of our judicial

system are to be maintained, a litigant cannot ignore court orders

with impunity [Emphasis added].” (Kihl, 94 NY2d at 123).

“Litigation cannot be conducted efficiently if deadlines are not taken seriously, and

we make clear again, as we have several times before, that disregard of deadlines should not and will not be tolerated (see Miceli v State Farm Mut. Auto Ins. Co., 3 NY3d 725 [2004]; Brill v City of New York, 2 NY3d 748 [2004]; Kihl v Pfeffer, 94 NY2d 118 [1999]) [Emphasis added].” (Andrea v Arnone, Hedin, Casker, Kennedy and Drake, Architects and Landscape Architects, P.C., 5 NY3d 514, 521 [2005]).As we made clear in Brill, and underscore here, statutory time frames —like court-order time frames (see Kihl v Pfeffer, 94 NY2d 118 [1999]) — are not options, they are requirements, to be taken seriously by the parties. Too many pages of the Reports, and hours of the courts,

are taken up with deadlines that are simply ignored [Emphasis added].” (Miceli, 3 NY3d at 726-726).

Further, the dismissal of the instant foreclosure action requires the

cancellation of the notice of pendency. CPLR § 6501 provides that the filing of a notice of pendency against a property is to give constructive notice to any purchaser of real property or encumbrancer against real property of an action that “would affect the title to, or the possession, use or enjoyment of real property, except in a summary proceeding brought to recover the possession of real property.” The Court of Appeals, in 5308 Realty Corp. v O & Y Equity Corp.[*7] (64 NY2d 313, 319 [1984]), commented that “[t]he purpose of the doctrine was to assure that a court retained its ability to effect justice by preserving its power over the property, regardless of whether a purchaser had any notice of the pending suit,” and, at 320, that “the statutory scheme permits a party to effectively retard the alienability of real property without any prior judicial review.”

CPLR § 6514 (a) provides for the mandatory cancellation of a notice of pendency by:

The Court,upon motion of any person aggrieved and upon such

notice as it may require, shall direct any county clerk to cancel

a notice of pendency, if service of a summons has not been completed

within the time limited by section 6512; or if the action has been

settled, discontinued or abated; or if the time to appeal from a final

judgment against the plaintiff has expired; or if enforcement of a

final judgment against the plaintiff has not been stayed pursuant

to section 551. [emphasis added]

The plain meaning of the word “abated,” as used in CPLR § 6514 (a) is the ending of an action. “Abatement” is defined as “the act of eliminating or nullifying.” (Black’s Law Dictionary 3 [7th ed 1999]). “An action which has been abated is dead, and any further enforcement of the cause of action requires the bringing of a new action, provided that a cause of action remains (2A Carmody-Wait 2d § 11.1).” (Nastasi v Nastasi, 26 AD3d 32, 40 [2d Dept 2005]). Further, Nastasi at 36, held that the “[c]ancellation of a notice of pendency can be granted in the exercise of the inherent power of the court where its filing fails to comply with CPLR § 6501 (see 5303 Realty Corp. v O & Y Equity Corp., supra at 320-321; Rose v Montt Assets, 250 AD2d 451, 451-452 [1d Dept 1998]; Siegel, NY Prac § 336 [4th ed]).” Thus, the dismissal of the instant complaint must result in the mandatory cancellation of plaintiff’s notice of pendency against the subject property “in the exercise of the inherent power of the court.”

Possible frivolous conduct by plaintiff’s counsel

Ms. Carucci affirmed “under the penalties of perjury,” on January 7, 2011, to the factual accuracy of the foreclosure papers by communicating with a representative of the defunct plaintiff DOWNEY. The filing of the motion for a judgment of foreclosure and sale by plaintiff’s counsel, with Ms. Carucci’s false statement, appears to be frivolous. 22 NYCRR § 130-1.1 (a) states that “the Court, in its discretion may impose financial sanctions upon any party or attorney in a civil action or proceeding who engages in frivolous conduct as defined in this Part, which shall be payable as provided in section 130-1.3 of this Subpart.” Further, it states in 22 NYCRR § 130-1.1 (b), that “sanctions may be imposed upon any attorney appearing in the action or upon a partnership, firm or corporation with which the attorney is associated.”

22 NYCRR § 130-1.1 (c) states that:

For purposes of this part, conduct is frivolous if:

(1) it is completely without merit in law and cannot be supported

by a reasonable argument for an extension, modification or

reversal of existing law;

(2) it is undertaken primarily to delay or prolong the resolution of

the litigation, or to harass or maliciously injure another; or

(3) it asserts material factual statements that are false.

It is clear that Ms. Carucci’s January 7, 2011 affirmation “asserts material factual statements that are false.” Further, Ms. Carucci’s January 7, 2011 affirmation, with its false statement, may be a cause for sanctions.

Several years before the drafting and implementation of the Part 130 Rules for

costs and sanctions, the Court of Appeals (A.G. Ship Maintenance Corp. v Lezak, 69 NY2d 1, 6 [*8][1986]) observed that “frivolous litigation is so serious a problem affecting the

proper administration of justice, the courts may proscribe such conduct and impose sanctions in this exercise of their rule-making powers, in the absence of legislation to the contrary (see NY Const, art VI, § 30, Judiciary Law § 211 [1] [b] ).”

Part 130 Rules were subsequently created, effective January 1, 1989, to give the

courts an additional remedy to deal with frivolous conduct. These stand beside Appellate Division disciplinary case law against attorneys for abuse of process or malicious prosecution. The Court, in Gordon v Marrone (202 AD2d 104, 110 [2d Dept 1994], lv denied 84 NY2d 813 [1995]), instructed that:

Conduct is frivolous and can be sanctioned under the court rule if

“it is completely without merit . . . and cannot be supported by a

reasonable argument for an extension, modification or reversal of

existing law; or . . . it is undertaken primarily to delay or prolong

the resolution of the litigation, or to harass or maliciously injure

another” (22 NYCRR 130-1.1[c] [1], [2] . . . ).

In Levy v Carol Management Corporation (260 AD2d 27, 33 [1st Dept 1999]), the Court stated that in determining if sanctions are appropriate the Court must look at the broad pattern of conduct by the offending attorneys or parties. Further, “22 NYCRR

130-1.1 allows us to exercise our discretion to impose costs and sanctions on an errant party . . .” Levy at 34, held that “[s]anctions are retributive, in that they punish past conduct. They also are goal oriented, in that they are useful in deterring future frivolous conduct not only by the particular parties, but also by the Bar at large.”

The Court, in Kernisan, M.D. v Taylor (171 AD2d 869 [2d Dept 1991]), noted that the intent of the Part 130 Rules “is to prevent the waste of judicial resources and to deter vexatious litigation and dilatory or malicious litigation tactics (cf. Minister, Elders & Deacons of Refm. Prot. Church of City of New York v 198 Broadway, 76 NY2d 411; see Steiner v Bonhamer, 146 Misc 2d 10) [Emphasis added].” The instant action, with DRUCKMAN asserting false statements, is “a waste of judicial resources.” This conduct, as noted in Levy, must be deterred. In Weinstock v Weinstock (253 AD2d 873 [2d Dept 1998]) the Court ordered the maximum sanction of $10,000.00 for an attorney who pursued an appeal “completely without merit,” and holding, at 874, that “[w]e therefore award the maximum authorized amount as a sanction for this conduct (see, 22 NYCRR 130-1.1) calling to mind that frivolous litigation causes a substantial waste of judicial resources to the detriment of those litigants who come to the Court with real grievances [Emphasis added].” Citing Weinstock, the Appellate Division, Second Department, in Bernadette Panzella, P.C. v De Santis (36 AD3d 734 [2d Dept 2007]) affirmed a Supreme Court, Richmond County $2,500.00 sanction, at 736, as “appropriate in view of the plaintiff’s waste of judicial resources [Emphasis added].”

In Navin v Mosquera (30 AD3d 883 [3d Dept 2006]) the Court instructed that when considering if specific conduct is sanctionable as frivolous, “courts are required to

examine whether or not the conduct was continued when its lack of legal or factual basis was apparent [or] should have been apparent’ (22 NYCRR 130-1.1 [c]).” The Court, in Sakow ex rel. Columbia Bagel, Inc. v Columbia Bagel, Inc. (6 Misc 3d 939, 943 [Sup Ct,

New York County 2004]), held that “[i]n assessing whether to award sanctions, the Court must [*9]consider whether the attorney adhered to the standards of a reasonable attorney (Principe v Assay Partners, 154 Misc 2d 702 [Sup Ct, NY County 1992]).”

“Nothing could more aptly be described as conduct completely without merit in

. . . fact’ than the giving of sworn testimony or providing an affidavit, knowing the same to be false, on a material issue.” (Sanders v Copley, 194 AD2d 85, 88 [1d Dept 1993]). The Court, in Joan 2000, Ltd. v Deco Constr. Corp. (66 AD3d 841, 842 [2d Dept 2009]), instructed that “[c]onduct is frivolous it . . . asserts material factual statements that are false.”In Curcio v J.P. Hogan Coring & Sawing Corp. (303 AD2d 357 [2d Dept 2003]), plaintiff’s counsel falsely claimed that the parties orally stipulated to a settlement of an employee discrimination case. The Curcio Court, at 358, held that “the conduct of [plaintiff’s counsel] was frivolous because it was without merit in law and involved the assertion of misleading factual statement to the Clerk of the Supreme Court (see 22 NYCRR 130-1.1 [c] [1], [3]).” (See Gordon v Marrone, supra; In re Ernestine R., 61 AD3d 874 [2d Dept 2009]; Glenn v Annunziata, 53 AD3d 565 [2d Dept 2008]; Miller v Dugan, 27 AD3d 429 [2d Dept 2006]; Greene v Doral Conference Center Associates, 18 AD3d 429 [2d Dept 2005]; Ofman v Campos, 12 AD3d 581 [2d Dept 2004]; Intercontinental Bank Limited v Micale & Rivera, LLP, 300 AD2d 207 [1d Dept 2002]; Tyree Bros. Environmental Services, Inc. v Ferguson Propeller, Inc., 247 AD2d 376 [2d Dept 1998]).

Therefore, the Court will examine the conduct of Margaret E. Carucci, Esq. and DRUCKMAN LAW GROUP PLLC in a hearing, pursuant to 22 NYCRR § 130-1.1, to: determine if Margaret E. Carucci, Esq. and DRUCKMAN LAW GROUP PLLC engaged in frivolous conduct; and, allow Margaret E. Carucci, Esq. and DRUCKMAN LAW GROUP PLLC a reasonable opportunity to be heard.

Conclusion

Accordingly, it is ORDERED, that the instant complaint, Index No. 22268/08, is dismissed with prejudice; and it is further

ORDERED, that the Notice of Pendency filed with the Kings County Clerk on July 31, 2008, by plaintiff, DOWNEY SAVINGS AND LOAN ASSOCIATION,

F.A., in an action to foreclose a mortgage for real property located at 70 Somers Street, Brooklyn, New York (Block 1542, Lot 21, County of Kings), is cancelled and discharged; and it is further

ORDERED, that it appearing that Margaret E. Carucci, Esq. and DRUCKMAN LAW GROUP PLLC engaged in “frivolous conduct,” as defined in the Rules of the Chief Administrator, 22 NYCRR § 130-1 (c), and that pursuant to the Rules of the Chief Administrator, 22 NYCRR § 130.1.1 (d), “[a]n award of costs or the imposition of sanctions may be made . . . upon the court’s own initiative, after a reasonable opportunity to be heard,” this Court will conduct a hearing affording Margaret E. Carucci, Esq. and DRUCKMAN LAW GROUP PLLC “a reasonable opportunity to be heard” before me in Part 27, on Monday, September 12, 2011, at 2:30 P.M., in Room 479, 360 Adams Street, Brooklyn, NY 11201; and it is further

ORDERED, that Ronald David Bratt, Esq., my Principal Law Clerk, is directed to serve this order by first-class mail, upon: Margaret E. Carucci, Esq., Druckman Law Group PLLC, 242 Drexel Avenue, Suite 2, Westbury, NY 11590; and, DRUCKMAN LAW GROUP PLLC, 242 Drexel Avenue, Suite 2, Westbury, NY 11590. [*10]

This constitutes the Decision and Order of the Court.

ENTER

___________________________

HON. ARTHUR M. SCHACK

J.S.C.

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DEUTSCHE BANK vs. MITCHELL, BETHEA | NJ Appeals Court Reverse/Remand “ASMT FAIL, AFFIDAVIT FAIL, NO STANDING, POSSESSION OF NOTE”

DEUTSCHE BANK vs. MITCHELL, BETHEA | NJ Appeals Court Reverse/Remand “ASMT FAIL, AFFIDAVIT FAIL, NO STANDING, POSSESSION OF NOTE”


NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION

DOCKET NO. A-4925-09T3

DEUTSCHE BANK NATIONAL TRUST
COMPANY, AS TRUSTEE FOR LONG
BEACH MORTGAGE LOAN TRUST
2006-3,
Plaintiff-Respondent,

v.

CONSTANCE LAWRENCE MITCHELL
and GENERAL MOTORS ACCEPTANCE
CORPORATION,
Defendants,

and

JACQUELINE BETHEA,
Defendant-Appellant

EXCERPTS:

Deutsche Bank
could have established standing as an assignee, N.J.S.A. 46:9-9,
if it had presented an authenticated assignment indicating that
it was assigned the note before it filed the original complaint.
The only evidence presented by Deutsche Bank was to the
contrary. We reverse the grant of summary judgment and remand
for a hearing to determine whether or not, before filing the
original complaint, plaintiff was in possession of the note or
had another basis to achieve standing to foreclose, pursuant to
N.J.S.A. 12A:3-301.

Although our reversal of summary judgment resolves this
appeal, we think it important to note that the proofs presented
by plaintiff in support of summary judgment were inadequate. In
Ford, supra, we explained that “[a] certification will support
the grant of summary judgment only if the material facts alleged
therein are based, as required by Rule 1:6-6, on personal
knowledge.” 418 N.J. Super. at 599. We held that the trial
court should not have considered an assignment that was not
“authenticated by an affidavit or certification based on
personal knowledge.” Id. at 600.

In support of its motion for summary judgment, Deutsche Bank
provided a certification of an attorney dated January 22, 2009,
which stated that “[p]laintiff is the present holder of the Note
and Mortgage. A copy of the Assignment of Mortgage is attached
as Exhibit B.” The attorney certified that his knowledge was
based upon his “custody and review of the computerized records
of plaintiff which were made in the ordinary course of business
as part of plaintiff’s regular practice to create and maintain
said records and which were recorded contemporaneously with the
transactions reflected therein.” This attorney certification
does not meet the requirement of personal knowledge we
articulated in Ford. Attorneys in particular should not certify
to “facts within the primary knowledge of their clients.”7 See
Pressler & Verniero, Current N.J. Court Rules, comment on R.
1:6-6 (2011); Higgins v. Thurber, 413 N.J. Super. 1, 21 n.19
(App. Div. 2010), aff’d, 205 N.J. 227 (2011).

In support of its motion for final judgment, Deutsche Bank
provided a certification of proof of amount due by a specialist
of JP Morgan Chase Bank, N.A., servicer for Deutsche Bank, dated
June 9, 2009, stating, in part, that “[p]laintiff is still the
holder and owner of the aforesaid obligation and Mortgage.”
However, this certification does not make any mention of the
assignment of the mortgage or how the signor knows that Deutsche
Bank became the holder of the note.

At oral argument in the trial court, plaintiff’s counsel
indicated that plaintiff had possession of the note prior to
obtaining the assignment. Deutsche Bank did not present any
certification based on personal knowledge stating that it ever
possessed the original note.

We vacate the sheriff’s sale, the final judgment and the
order granting summary judgment and remand to the trial court
for further proceedings in conformance with this opinion.
Reversed and remanded.

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BANK OF NEW YORK vs. KC BAILEY SJC-10801 | MASS. SJC Vacates Summary JDGMT “Housing Court has jurisdiction to consider the validity of the plaintiff’s title as a defense to a summary process action after a foreclosure sale”

BANK OF NEW YORK vs. KC BAILEY SJC-10801 | MASS. SJC Vacates Summary JDGMT “Housing Court has jurisdiction to consider the validity of the plaintiff’s title as a defense to a summary process action after a foreclosure sale”


NOTICE: The slip opinions and orders posted on this Web site are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports. This preliminary material will be removed from the Web site once the advance sheets of the Official Reports are published. If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA 02108-1750; (617) 557-1030; SJCReporter@sjc.state.ma.us

BANK OF NEW YORK, trustee, [FN1]

vs.

KC BAILEY.

SJC-10801.

April 4, 2011. – August 4, 2011.

Summary Process. Housing Court, Jurisdiction. Jurisdiction, Housing Court, Summary process. Real Property, Record title. Mortgage, Foreclosure. Practice, Civil, Summary process, Summary judgment.

SUMMARY PROCESS. Complaint filed in the Boston Division of the Housing Court Department on January 13, 2009.

The case was heard by Mary Lou Muirhead, J., on a motion for summary judgment.

The Supreme Judicial Court on its own initiative transferred the case from the Appeals Court.

Jennifer Tarr (H. Esme Caramello with her) for the defendant.

Peter Guaetta (Victor Manougian with him) for the plaintiff.

Pamela S. Kogut, for Chelsea Collaborative & others, amici curiae, submitted a brief.

Ilana Gelfman, Richard M.W. Bauer, Nadine Cohen, & Ann Jochnick, for City Life/Vida Urbana, amicus curiae, submitted a brief.

Present: Ireland, C.J., Spina, Cordy, Botsford, Gants, & Duffly, JJ.

DUFFLY, J.

The question we address in this case is whether the Housing Court has jurisdiction to decide the validity of a challenge to a title, raised by a former homeowner as a defense to a summary process eviction action by a party acquiring the property pursuant to a foreclosure sale. The plaintiff, Bank of New York (BNY), asserts that it acquired title to the home of the defendant, KC Bailey, pursuant to foreclosure proceedings. [FN2] Seeking to evict Bailey, BNY filed an action for summary process pursuant to G.L. c. 239, § 1. Bailey’s answer to the complaint alleged, among other claims and defenses, that BNY was not the owner because the sale was not in compliance with the foreclosure statute, due to defective notice, and the deed was thus void. See U.S. Bank Nat’l Ass’n v. Ibanez, 458 Mass. 637, 646 (2011). In its motion for summary judgment, BNY argued that the Housing Court lacked jurisdiction to address the claim raised by Bailey’s defense, and that it had made out a prima facie claim for superior possession by virtue of the deed, a copy of which was attached to the complaint. The motion judge agreed; she allowed BNY’s motion, and entered summary judgment in favor of BNY. Bailey appealed from that judgment and we transferred the case to this court on our own motion. Because we conclude that the Housing Court has jurisdiction to consider the validity of the plaintiff’s title as a defense to a summary process action after a foreclosure sale pursuant to G.L. c. 239, § 1, we vacate the allowance of summary judgment and remand for further proceedings.

1. Background and prior proceedings. In 2005, Bailey obtained a mortgage on a home on West Selden Street in the Mattapan section of Boston, a home he had owned and in which he had lived since 1979. The mortgage was obtained from an entity identified as “Mortgage Electronic Registration Systems, Inc. (‘MERS’), solely as nominee for the Lender (America’s Wholesale Lender)” (MERS as “nominee” [FN3]). The record reflects that on March 6, 2007, proceedings for foreclosure by sale were instituted by MERS as “nominee,” and that MERS as “nominee” was the highest bidder at the foreclosure sale. [FN4] Bailey asserts that on March 26, 2007, he discovered that a notice to evict had been affixed by duct tape to the fence surrounding his West Selden Street property.

[FN5] He thereafter filed an action against MERS as “nominee” in the Superior Court seeking to set aside the foreclosure sale. That complaint eventually was dismissed without prejudice for failure to effect timely service. No further description of the Superior Court proceedings is necessary to an understanding of the issues before us, or the context in which they arose.


Returning to the circumstances that led to this Housing Court action, Bailey asserts that he received no notice of, and was unaware of, the sale by foreclosure that took place on March 6, 2007. [FN6] On December 30, 2008, BNY served Bailey with a notice of its intention to terminate his occupancy. When Bailey failed to vacate the property, BNY instituted the underlying action in the Housing Court and, on January 9, 2009, served Bailey with a summary process (eviction) summons. Bailey answered the summary process complaint, alleging in part that his home was “foreclosed without legally sufficient notice under [G.L. c. 244, § 17B.]” [FN7] Bailey asserted in his answer that he had received all personal, business, and legal correspondence for over thirty years at his United States post office box, the same post office box to which all previous correspondence regarding his mortgage had been sent; but he had received at that post office box no notice of an impending foreclosure.


[FN8] Thereafter, BNY filed its motion for summary judgment, claiming that MERS as “nominee” had assigned to BNY the note and the mortgage; that on Bailey’s default BNY had, on March 6, 2007, foreclosed; that BNY was the highest bidder at the foreclosure sale; and that BNY had served Bailey with a notice to quit and a summary process complaint and summons. [FN9] In a memorandum opposing the motion, Bailey contended that BNY’s “ownership” of Bailey’s home “remains in dispute, because notice of the foreclosure sale … was legally insufficient.” Concluding that Bailey’s challenge to the validity of the foreclosure was not within the Housing Court’s jurisdiction, the judge allowed BNY’s motion. The judge reasoned that “[t]he only issue before the [c]ourt is whether the [p]laintiff is entitled to possession,” and because BNY showed that “its deed was recorded prior to the service of the [n]otice to [q]uit,” BNY had established a prima face case for possession.

2. Discussion. We review a decision to grant summary judgment de novo. See Ritter v. Massachusetts Cas. Ins. Co., 439 Mass. 214, 215 (2003). “The standard of review of a grant of summary judgment is whether, viewing the evidence in the light most favorable to the nonmoving party, all material facts have been established and the moving party is entitled to a judgment as a matter of law.” Augat, Inc. v. Liberty Mut. Ins. Co., 410 Mass. 117, 120 (1991).

a. Subject matter jurisdiction. [FN10] That the Housing Court has jurisdiction over summary process actions pursuant to G.L. c. 239 is not in dispute. The Housing Court may hear summary process actions brought by those who acquire ownership of property via foreclosure by sale. See G.L. c. 185C, § 3. See also Bech v. Cuevas, 404 Mass. 249 (1989); Duggan v. Gonsalves, 65 Mass.App.Ct. 250, 254 n. 6 (2005) (Housing Court has appropriate jurisdiction over summary process action pursuant to G.L. c. 185C, § 3); Metropolitan Credit Union v. Matthes, 46 Mass.App.Ct. 326, 330 (1999); Commentary to Rule 1 of the Uniform Summary Process Rules, Mass. Ann. Laws Court Rules 705 (LexisNexis 2010-2011) (“Four Departments of the Massachusetts Trial Court have jurisdiction over summary process actions [Superior Court, District Court, Boston Municipal Court and Housing Court]”).

The question, as stated above, is whether, in the course of a summary process action brought in the Housing Court by a party acquiring the property pursuant to a foreclosure by sale, the judge may consider the former homeowner’s defense that the plaintiff’s title is invalid because the foreclosure was not conducted strictly according to the statute. See U.S. Bank Nat’l Ass’n v. Ibanez, 458 Mass. 637, 646 (2011). The answer to this question is informed by the historical context of the action for summary process.

Although the Housing Court has only been in existence since 1972, see G.L. c. 185A, inserted by St.1971, c. 843, §§ 1, 27, summary process is a long-standing cause of action. The current summary process statute, G.L. c. 239, § 1, derives from the “summary remedy” statute that has its roots in the beginning of the Eighteenth Century in the Province Laws 1700-1701. See Page v. Dwight, 170 Mass. 29, 31-37 (1897) (discussing evolution of “summary remedy,” St. 1825, c. 89, that provided remedies to “persons having the right of possession of houses and tenements”).

The summary remedy statute was in force when the General Statutes were revised in 1835 and was retained through later revisions, to provide a cause of action to those not in a traditional landlord-tenant relationship. See Page v. Dwight, supra at 34 (statute revised in part so that “in all such cases the like proceedings might be had as if the relation of landlord and tenant had theretofore existed between them. St. 1835, c. 114”). The summary remedy statute, codified in Rev. St. (1836) c. 104, “gave the process only to a ‘person entitled to the premises,’ which required him to prove that he was entitled to this possession, and which said that the defendant should have judgment if the plaintiff failed to prove his right to possession.” Id. at 37. In 1879, legislation was enacted specifically directed at those attempting to gain possession who had acquired property pursuant to foreclosure of the mortgage by sale. See id., citing St. 1879, c. 237.

Challenging a plaintiff’s entitlement to possession has long been considered a valid defense to a summary process action for eviction where the property was purchased at a foreclosure sale. See New England Mut. Life Ins. Co. v. Wing, 191 Mass. 192, 195 (1906) (in summary process action “by the purchaser at a mortgagee’s sale, the legal title may be put in issue, and it therefore became incumbent upon the plaintiff to establish its right of possession to the land demanded”). See also Sheehan Constr. Co. v. Dudley, 299 Mass. 51, 53 (1937) (in summary process action available to purchaser at foreclosure sale “it is incumbent upon such purchaser to establish his right of possession. The legal title in those circumstances plainly may be put in issue”). We have upheld that principle as recently as 1966, when we said, “The purpose of summary process is to enable the holder of the legal title to gain possession of premises wrongfully withheld. Right to possession must be shown and legal title may be put in issue…. Legal title is established in summary process by proof that the title was acquired strictly according to the power of sale provided in the mortgage; and that alone is subject to challenge.” Wayne Inv. Corp. v. Abbott, 350 Mass. 775, 775 (1966), citing Sheehan Constr. Co. v. Dudley, supra, and New England Mut. Life Ins. Co. v. Wing, supra.

The Housing Court was established in order to provide “a specialized forum to handle criminal and civil matters regarding housing that arise in the city of Boston.” LeBlanc v. Sherwin Williams Co., 406 Mass. 888, 891-892 (1990). In 1979, the Legislature enacted St.1979, c. 72, § 3, which further defined and expanded the Housing Court’s jurisdiction. See Tedford v. Massachusetts Hous. Fin. Agency, 390 Mass. 688, 693 n. 7 (1984); Boston v. Kouns, 22 Mass.App.Ct. 506, 510-511 (1986). The Housing Court’s jurisdiction over summary process actions is concurrent with that of the District Court and Superior Court. There is nothing in this jurisdictional scheme that supports a conclusion that the Legislature intended to give the Housing Court concurrent jurisdiction over summary process actions, yet preclude its consideration of the long-recognized validity of title defense to summary process.

Our conclusion that the Housing Court may consider the defense promotes the legislative goal of “just, speedy, and inexpensive” resolution of summary process cases. See Rule 1 of the Rules of Summary Process, supra. The pursuit of “speedy and inexpensive” summary process actions is compromised if the Housing Court must stay summary process proceedings while litigation on the validity of the foreclosure proceedings continues in another court. This creates precisely the type of unnecessary delay and inefficiency that the Legislature intended to eliminate when it reorganized the trial courts in the Commonwealth. See G.L. c. 211B; Konstantopoulos v. Whately, 384 Mass. 123, 129-130 (1981).

b. Proof of possession. Having determined that the Housing Court has jurisdiction to decide Bailey’s defense to the summary process action, we now address BNY’s contention that it nevertheless established possession and that the grant of summary judgment in its favor was appropriate.

To prevail on its motion for summary judgment, BNY “had the burden of showing that there are no material facts in dispute regarding its legal title to the property.” Metropolitan Credit Union v. Matthes, 46 Mass.App.Ct. 326, 330 (1999), citing Mass. R. Civ. P. 56(c), 365 Mass. 824 (1974), and Sheehan Constr. Co. v. Dudley, supra at 53-54. BNY contends, without citation to relevant authority, that to meet its burden it had only to prove that the foreclosure deed was recorded prior to service on Bailey of the notice to quit.
[FN11]

[FN11]

In a summary process action for possession after foreclosure by sale, the plaintiff is required to make a prima facie showing that it obtained a deed to the property at issue and that the deed and affidavit of sale, showing compliance with statutory foreclosure requirements, were recorded. See Lewis v. Jackson, 165 Mass. 481, 486-487 (1896); G.L. c. 244, § 15.
[FN12] BNY failed to submit an affidavit of sale “show[ing] that the requirements of the power of sale and of the statute have in all respects been complied with.” Id. [FN13]

Because BNY failed to make out a prima facie showing of possession, and the issues are disputed, the motion for summary judgment should not have been granted.

Conclusion. The decision granting summary judgment for the plaintiff is vacated. The case is remanded to the Housing Court for further proceedings consistent with this opinion.

So ordered.

FN1. For the certificateholders CWABS, Inc., Asset-Based Certificates Series 2005-13.

FN2. We acknowledge the amicus brief of City Life/Vida Urbana, and the amicus brief of the Chelsea Collaborative, Lynn United for Change, and the Merrimack Valley Project, both in support of the defendant.

FN3. Mortgage Electronic Registration Systems acts as nominee and as mortgagee of record for its members and appoints itself nominee, as mortgagee, for its members’ successors and assigns. See Mortgage Elec. Registration Sys. v. Saunders, 2 A.3d 289, 294 (Me.2010), quoting MERSCORP, Inc. v. Romaine, 8 N.Y.3d 90, 100 (2006) (Kaye, C.J., dissenting in part). In this case, we are not faced with the issue whether MERS may properly be both the mortgagee and an agent of the mortgagee, and we do not decide in which capacity MERS acted here.

FN4. A copy of the notice placed in the newspaper is in the record, but the date is illegible. MERS as “nominee” noticed the foreclosure in the newspaper. In its appellate brief, the Bank of New York (BNY) included a copy of an affidavit from MERS as “nominee,” which states that MERS as “nominee” provided notice of the foreclosure to Bailey via certified mail. The affidavit was not included in the summary judgment record that was before the motion judge, and we do not consider it in our analysis on appeal. See Tetrault v. Mahoney, Hawkes & Goldings, 425 Mass. 456, 458-459 (1997); note 13, infra.

FN5. The notice was not included in the record.

FN6. BNY had previously filed a summary process action against Bailey in the Housing Court. On May 10, 2007, however, that action was dismissed without prejudice by agreement of the parties. That action, and the notice preceding it, is dated several months before the June 29, 2007, date of an “assignment of bid for value” purporting to transfer to BNY, as trustee for the certificateholders CWABS, Inc., Asset-Backed Certificates, Series 2005-13, all of the interests of MERS as “nominee” in the West Selden Street property.

FN7. BNY makes much of the fact that Bailey, in his original answer and on appeal, cited G.L. c. 244, § 17B, in support of his claim that notice of the foreclosure was deficient. This statute governs the manner in which notice must be provided in an action for deficiency. It is apparent from his pleadings and arguments that Bailey’s intended reference was to G.L. c. 244, § 14, which sets forth the requirements of notice in connection with a foreclosure by sale. That statute provides, in relevant part:

“The mortgagee or person having his estate in the land mortgaged, or a person authorized by the power of sale, or the attorney duly authorized by a writing under seal, or the legal guardian or conservator of such mortgagee or person acting in the name of such mortgagee or person, may, upon breach of condition and without action, do all the acts authorized or required by the power; but no sale under such power shall be effectual to foreclose a mortgage, unless, previous to such sale, notice thereof has been published once in each of three successive weeks, the first publication to be not less than twenty-one days before the day of sale, in a newspaper, if any, published in the town where the land lies or in a newspaper with general circulation in the town where the land lies and notice thereof has been sent by registered mail to the owner or owners of record of the equity of redemption as of thirty days prior to the date of sale, said notice to be mailed at least fourteen days prior to the date of sale to said owner or owners to the address set forth in [G.L. c. 185, § 61], if the land is then registered or, in the case of unregistered land, to the last address of the owner or owners of the equity of redemption appearing on the records of the holder of the mortgage …” (emphasis added).

Because we look to the substance, rather than the form, of Bailey’s asserted defense, his incorrect citation is not fatal to his claim. See Quinn v. Walsh, 49 Mass.App.Ct. 696, 704 (2000) (label attached to pleadings should not govern their substance). Bailey argued repeatedly that the foreclosing agent failed to provide him proper notice before conducting the foreclosure sale and thus provided sufficient notice to the plaintiff of the defense being asserted. See Clark v. Greenhalge, 411 Mass. 410, 413 n. 6 (1991).

FN8. Bailey’s answer also set forth various counterclaims which were dismissed and are not a subject of this appeal.

FN9. As earlier stated, the record reflects that MERS as “nominee,” not BNY, was the holder of the mortgage on March 6, 2007, and that the foreclosure was conducted by MERS as “nominee,” which was the highest bidder at the foreclosure sale.

FN10. During oral argument, BNY contended that the case might be moot because BNY had foreclosed the mortgage by entry pursuant to G.L. c. 244, § 2, and Bailey therefore could no longer contest BNY’s title based on defective notice of the foreclosure sale. See Grabiel v. Michelson, 297 Mass. 227, 228-229 (1937) (any defect in foreclosure by sale irrelevant after proper foreclosure by entry completed).

In order to foreclose on a mortgage by entry, BNY must have been the mortgagee at the time of entry. See U.S. Bank Nat’l Ass’n v. Ibanez, 458 Mass. 637, 646 n. 15 (2011); G.L. c. 244, §§ 1-2. Nothing in the record indicates when or by what means the entry was made, and whether at the time of entry BNY was the mortgagee of the West Selden Street property. It may well be that BNY can establish that it has acquired an assignment of the mortgage despite defects in the foreclosure by sale. On the record before us, we are unable to make this determination.

FN11. In support of its motion for summary judgment, BNY submitted only the foreclosure deed and the eviction notice.

FN12. General Laws c. 244, § 15, provides: “The person selling, or the attorney duly authorized by a writing or the legal guardian or conservator of such person, shall, after the sale, cause a copy of the notice and his affidavit, fully and particularly stating his acts, or the acts of his principal or ward, to be recorded in the registry of deeds for the county or district where the land lies, with a note or reference thereto on the margin of the record of the mortgage deed, if it is recorded in the same registry. If
the affidavit shows that the requirements of the power of sale and of the statute have in all respects been complied with, the affidavit or a certified copy of the record thereof, shall be admitted as evidence that the power of sale was duly executed.”

FN13. We do not consider the affidavit submitted by BNY on appeal, which it conceded was not part of the record before the judge. See Tetrault v. Mahoney, Hawkes & Goldings, 425 Mass. 456, 458-459 (1997).

END OF DOCUMENT

FULL CASE DOCKET: http://www.ma-appellatecourts.org/display_docket.php?dno=SJC-10801

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MAZINE v. M & I BANK | FL 1DCA Reversed “Affidavit Fail, Undisputed not the holder of the mortgage and note”

MAZINE v. M & I BANK | FL 1DCA Reversed “Affidavit Fail, Undisputed not the holder of the mortgage and note”


MOSHE MAZINE and JAACOV E. BOUSKILA, Appellants,
v.
M & I BANK, Appellee.

Case No. 1D10-2127.

District Court of Appeal of Florida, First District.

Opinion filed July 22, 2011.

David H. Charlip of Charlip Law Group, LC, Aventura, for Appellants.

Erin Berger, Florida Default Law Group, PL, Tampa, for Appellee.

VAN NORTWICK, J.

Moshe Mazine and Jaacov Bouskila appeal an amended final judgment of mortgage foreclosure in favor of M & I Bank, appellee. Because the documentary evidence necessary to establish the amount owed under the note and mortgage was admitted without proper foundation and it is undisputed that M & I Bank was not the holder of the mortgage and note, we reverse and remand for further proceedings.

The party seeking foreclosure must present evidence that it owns and holds the note and mortgage to establish standing to proceed with a foreclosure action. Servedio v. U.S. Bank Nat. Ass’n, 46 So. 3d 1105 (Fla. 4th DCA 2010). Because a promissory note is a negotiable instrument and because a mortgage provides the security for the repayment of the note, the person having standing to foreclose a note secured by a mortgage may be either the holder of the note or a nonholder in possession of the note who has the rights of a holder. See § 673.3011, Fla. Stat. (2009); Taylor v. Deutsche Bank Nat. Trust Co., 44 So. 3d 618 (Fla. 5th DCA 2010). An allegation of default in a complaint must be proven by competent evidence. See Terra Firma Holdings v. Fairwinds Credit Union, 15 So. 3d 885 (Fla. 2d DCA 2009).

In January 2009, M & I Bank filed a complaint seeking foreclosure of a mortgage naming Mazine and Bouskila as party defendants. An amended complaint later followed, but the named plaintiff remained the same. After several motions challenging the sufficiency of service of process and personal jurisdiction, Bouskila eventually filed an answer which denied almost all of allegations of the amended complaint, including the allegation that Bouskila secured a mortgage on the real property at issue and the allegation as to amount in default. Mazine did not file an answer but moved to dismiss the amended complaint on several grounds, including the ground that the entity listed on the note and mortgage was “M & I Marshall & Ilsley Bank,” not the named plaintiff, “M & I Bank.” The motion to dismiss was not considered by the trial court before the cause was heard at a bench trial.

The only witness to testify at the bench trial regarding the allegations of the amended complaint was David Taxdal, the regional security officer for “M & I Marshall and Ilsley Bank” in the State of Florida. According to Taxdal’s testimony, his “duties and responsibilities are fraud investigation, internal investigation and physical security for the branches” in Florida, and he does not originate loans, service loans or collect loans in default. Through Taxdal, the bank attempted to introduce several documents, including an affidavit as to amounts due and owing. The affidavit was executed by Michael Koontz, who did not appear at trial, and the bank sought to introduce it as a business record. Taxdal testified that he had no knowledge as to who prepared the documents submitted at trial by the bank as he is not involved in the preparation of documents such as the ones proffered by the bank, that he does not keep records as a records custodian, that he has no personal knowledge as to how the information in the affidavit as to the amounts due and owing was determined or whether it was prepared in the normal course of business, and that he did not know whether such information was accurate.

Counsel for the defendants vigorously opposed admission of the affidavit of indebtedness, the only evidence of the amount allegedly in delinquency, as a business record. Counsel observed that the affiant (Koontz) was not subject to cross-examination, and that given the matters to which Taxdal testified it was evident that Taxdal “has no knowledge of the basis upon which this affidavit was prepared.”

The trial court denied defendants’ objection and admitted the affidavit without explanation. This was error. Before a document may be admitted as a business record, a foundation for such admission must be laid. Section 90.803(6), Florida Statutes (2010), allows the admission of records of a regularly kept business activity when the business record was made at or near the time of the matters reported and when the business record is made by a person having personal knowledge of the matters reported or when the information supplied in the record is supplied by a person with knowledge. Further, it must be shown that the business record was kept in the ordinary course of a regularly conducted business activity and that it is the regular practice of the business keeping the record to make such a business record. Yisrael v. State, 993 So. 2d 952 (Fla. 2008). While it is not necessary to call the individual who prepared the document, the witness through whom a document is being offered must be able to show each of the requirements for establishing a proper foundation. Forester v. Norman Roger Jewell & Brooks, 610 So. 2d 1369, 1373 (Fla. 1st DCA 1992).

Here, none of the requirements for admission of a business record were met. As noted, Taxdal candidly admitted that he had no knowledge as to the preparation or maintenance of the documents offered by the bank, including the affidavit as to amounts due and owing. Taxdal did not testify and, indeed, could not testify, that the affidavit as to the amounts owed was actually kept in the regular course of business. Further, he did not know if the source of the information contained in the affidavit was correct. He did not know if the amounts reported in the affidavit were accurate. There was no attempt to admit the affidavit by certification or declaration pursuant to section 90.803(6)(c), Florida Statutes.

Accordingly, because no foundation was laid, the admission of the affidavit was erroneous. Because the affidavit was the only evidence as to the amount of defendants’ default, the error was harmful necessitating that the amended final judgment of foreclosure be reversed.

Furthermore, the trial court erred in denying appellants’ motion for a directed verdict given the lack of proof that the named plaintiff and appellee, M & I Bank, holds the mortgage and note. “M & I Marshall & Ilsley Bank” is shown as the holder of both the note and mortgage. At the time the bank offered the affidavit as to amounts due and owing into evidence, Taxdal testified that M & I Bank FSB — which we assume is M & I Bank — and M & I Marshall and Ilsley Bank are different entities.[1] The amended judgment of foreclosure styles the prevailing party as “M & I Bank,” not “M & I Marshall and Ilsley Bank.” To have standing to foreclose, it must be demonstrated that the plaintiff holds the note and mortgage in question. See Khan v. Bank of America, N.A., 58 So. 3d 927 (Fla. 5th DCA 2011), and Philogene v. ABN Amro Mtg. Group, Inc., 948 So. 2d 45 (Fla. 4th DCA 2006). Therefore, because M & I Bank had not demonstrated it possessed the standing to proceed in the foreclosure action, we must reverse on this issue as well.

REVERSED and REMANDED for further proceedings consistent with this opinion.

LEWIS, and ROBERTS, JJ., CONCUR.

NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF FILED.

[1] Although M & I Bank filed a motion to substitute a party by which M & I Marshall and Isley Bank was to be substituted for M & I Bank, the trial court never acted upon this motion. We note that, while the name of the bank in the mortgage and note is spelled “M & I Marshall and Ilsley“, the motion to substitute spells the name somewhat differently, “M & I Marshall and Isley” (italics added).

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The One Hundred Billion Dollar Problem in Small Claims Court: Robo-Signing and Lack of Proof in Debt Buyer Cases

The One Hundred Billion Dollar Problem in Small Claims Court: Robo-Signing and Lack of Proof in Debt Buyer Cases


Peter A. Holland

University of Maryland School of Law

Journal of Business & Technology Law, Vol. 6, p. 101, 2011

University of Maryland Legal Studies Research Paper No. 2011-32

Abstract: Recent years have seen the rise of a new industry which has clogged the dockets of small claims courts throughout the country. It is known as the “debt buyer” industry. Members of this $100 billion per year industry exist for no reason other than to purchase consumer debt which others have already deemed uncollectable, and then try to succeed in collecting where others have failed. Debt buyers pay pennies on the dollar for this charged off debt, and then seek to collect, through hundreds of thousands of lawsuits, the full face value of the debt. The emergence and vitality of this industry presents several legal, ethical and economic issues which merit exploration, study and scholarly debate.

This article focuses on the problem of robo-signing and the lack of proof in debt buyer cases. Although this problem has received limited attention from the media and from regulators, there is a paucity of legal scholarship about debt buyers in general, and this problem in particular. This article demonstrates that robo-signing and fraud are rampant in this industry, and that the debt buyers who pursue these claims often lack proof necessary to show that they own the debt, and often lack proof even that a debt was ever owed in the first place. The fact that this lack of proof has led to consumers being sued twice on the same debt demonstrates the due process concerns which are implicated when courts enter judgments against consumers based on robo-signing and insufficient proof.

This article calls on courts to hold plaintiffs in debt buyer cases to the same standards required of other litigants. Courts must require a demonstration of personal knowledge of the matter at issue before any affidavit is accepted, before any person testifies, and before any documents are admitted into evidence.

[click image below for pdf]


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BENEFICIAL MAINE INC. v. CARTER | Maine Supreme Judicial Court Vacates SJ “Beneficial’s records, offered through the affidavit of HSBC’s employee Shana Richmond”

BENEFICIAL MAINE INC. v. CARTER | Maine Supreme Judicial Court Vacates SJ “Beneficial’s records, offered through the affidavit of HSBC’s employee Shana Richmond”


MAINE SUPREME JUDICIAL COURT

BENEFICIAL MAINE INC.

v.

TIMOTHY G. CARTER et al.

[…]

[¶3] After the parties were unable to resolve the case through mediation, Beneficial moved for summary judgment and submitted a statement of material facts. See M.R. Civ. P. 56(h)(1). In support of its statement of material facts, Beneficial referred to two affidavits—one from Beneficial’s attorney, which clarified the priority of the Carters’ creditors, and one from Shana Richmond, Vice President of Administrative Services for HSBC Consumer Lending Mortgage Servicing, described in the affidavit as Beneficial’s “servicer.” Beneficial cited to Richmond’s affidavit, with its attached exhibits, as the sole evidentiary support for its allegations of its ownership of the note and mortgage, the Carters’ obligation on the note, the Carters’ default, and the amount that the Carters owed. Richmond’s affidavit states the following as the foundation for her factual assertions:

[…]

[ipaper docId=59836524 access_key=key-272ijous2ldzihvw2sfh height=600 width=600 /]

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PHH MORTGAGE v. ALBUS | Ohio Appeals Court Reverses “Tracy Johnson Affidavit, Illegible Loan History Statment, No Certificate of Service”

PHH MORTGAGE v. ALBUS | Ohio Appeals Court Reverses “Tracy Johnson Affidavit, Illegible Loan History Statment, No Certificate of Service”


STATE OF OHIO, MONROE COUNTY
IN THE COURT OF APPEALS
SEVENTH DISTRICT

PHH MORTGAGE CORPORATION fka
CENTURY 21 MORTGAGE

vs.

MARIA S. ALBUS, et al

EXCERPT:

{6} Appellee also filed the affidavit of Tracy Johnson, the loan supervisor assigned to Appellant’s account. According to the affidavit, Appellant defaulted on the note and Appellee exercised the acceleration option contained in the note. (Johnson Aff., ¶4-5.) Johnson avers that an unpaid principal balance exists in the amount of $56,874.74, with interest to accrue at the rate of 8.308% per annum from November 1, 2006, “plus sums advanced by Plaintiff pursuant to the terms of the Mortgage Deed for real estate taxes, hazard insurance premiums and property protection* * *.” (Johnson Aff., ¶5.) An illegible loan history statement is attached to the affidavit, as well as a customer activity statement and a loan activity statement. No certificate of service is included in the record with the document.

[…]

[ipaper docId=59578472 access_key=key-1nxbe9v65hoxsek6x073 height=600 width=600 /]

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Affidavits of Lost Assignments filed for Mortgage-Backed Trusts

Affidavits of Lost Assignments filed for Mortgage-Backed Trusts


By Fraud Digest

Mortgage Fraud

AFFIDAVITS OF LOST ASSIGNMENTS
Christina Carter
Linda Green
John Kennerty

Action Date: July 6, 2011
Location: West Palm Beach, FL

Is it perjury to submit a sworn affidavit to a Court that a Mortgage Assignment has been lost when there is absolutely no evidence that such Assignment ever even existed?

What if the affiant swears to know WHEN the non-existent Assignment was lost:

“Affiant’s investigation has revealed that the original unrecorded assignment of mortgage is lost or missing through no fault of the Assignee, although it appears Assignee was in possession of the instrument at the time it was lost or became missing.”

This exact statement – and many similar statements – appear in thousands of Affidavits of Lost Assignments – signed by Linda Green, John Kennerty and Christina Carter – employees of Lender Processing Services, America’s Servicing Company and Ocwen Loan Servicing.

These Affidavits are used in foreclosures to explain why mortgage-backed trusts should be allowed to foreclose even though the original lender never assigned the mortgages to the trusts.

Mortgage servicers continue to file these Lost Assignment Affidavits in 2011 – despite the many investigations and regulatory Consent Decrees.

How can you swear something was lost when it never existed? How can you swear as to the no-fault of a bank that is not even your employer?

Only robo-signers and mortgage servicers know for sure.


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