Ummm I’m lost for words… if you deposit cash into these institutions, they can play with it.

WSJ-

As if conjuring up the spirit of his bank’s founder, James Dimon is planning to take the place of the U.S. government if it goes into default—at least as far as his clients’ federal benefits go.

At a meeting of the Institute of International Finance on Saturday, Mr. Dimon, the chief executive of J.P. Morgan Chase & Co., said he expects a deal to be reached between the White House and Congress that will raise the debt ceiling before the borrowing capacity is otherwise forecast to be exhausted on Oct. 17. But in the event that the government runs out of cash to make a $12 billion Social Security payment due on Oct. 23, J.P. Morgan has a plan.

Mr. Dimon said his bank would fund the $6 billion to $8 billion in government benefits that the bank processes each week for its clients, even if the government doesn’t actually pay those obligations.

[WALL STREET JOURNAL]

by Jake Bernstein ProPublica, Oct. 14, 2013, 3:02 p.m.

A federal judge in Manhattan is pondering whether to grant the request of the New York Federal Reserve to seal the case brought by a former senior bank examiner Carmen Segarra.

As reported by ProPublica last week, Segarra filed a lawsuit against the New York Fed and three of its employees alleging she had been wrongfully terminated last year after she determined that Goldman Sachs had insufficient conflict-of-interest policies.

On Friday, the Fed asked for a protective order to seal documents in the case as well as parts of the complaint. In a letter to U.S. District Judge Ronnie Abrams, New York Fed counsel David Gross said the information should be removed from the public docket because it is “Confidential Supervisory Information,” including internal New York Fed emails and materials provided to the Fed by Goldman.

“These documents show that at the time (Segarra) left the employ of the New York Fed, she purloined property of the Board of Governors of the Federal Reserve System,” Gross wrote, citing Fed rules that prohibit disclosing supervisory information without prior approval of the Fed.

Gross argues that the Fed’s obligation to keep bank supervisory records secret outweigh the public’s right to know. “The incantation of a 2018public right to know’ cannot ever be a license to discharged employees that they may violate Federal law simply by filing a complaint in Federal court,” Gross wrote.

Segarra and her lawyer could not be reached for comment.

While Abrams considers her decision, Segarra’s lawsuit and appended documents have been removed from Pacer, the online records system for federal courts. The complaint and related documents are available via links in ProPublica’s story and have been published elsewhere online.

Gross states in his letter that Segarra previously made a $7 million settlement offer. The Fed rejected it.

The New York Fed has historically been one of the most opaque financial regulators and maintains that it is not subject to the Freedom of Information Act because it is not a public agency.

Under new powers granted to it by Congress, the Federal Reserve System carries responsibility for ensuring that the nation’s most complex financial institutions are not posing a systemic threat to the world economy.

Because of its location, the New York Fed supervises the majority of the so-called “Too- Big-to-Fail” banks. New York Fed officials acknowledge that the institution failed in its regulatory responsibilities in the lead-up to the financial crisis.

A hearing on the Fed’s request is scheduled for tomorrow in Abrams’ court.

Follow @Jake_Bernstein

Timing was everything and the cartels knew all along they would have trouble proving standing …so changing the rules was the easiest step back in 2006.

Denver Post-

An Arvada woman’s efforts at challenging the constitutionality of Colorado’s foreclosure laws died a quiet death this month when a federal judge dismissed her case.

Lisa Kay Brumfiel’s legal battle to stop the foreclosure of her house took a fatal hit Oct. 2 when U.S. District Judge William J. Martínez ruled that his jurisdiction to handle the case dissolved months ago when U.S. Bank changed how it would pursue the property.

Brumfiel challenged the constitutionality of Colorado’s most common foreclosure process, known as a Rule 120, which is a streamlined way for lenders to take mortgaged property when homeowners default.

[DENVER POST]

“You’re not gonna to be able to change what Wall Street did with those securitizations of all these things. So we’re dealing with the situation on the ground how we’re trying to sell your house. And if you start requiring the original note that has been gone through I don’t know how many hands — but the collection is being done by a servicing company that we know — if you require that original note, none of you will ever be able to sell your property. You just won’t” – STU HALSAN

WHAT: 

Georgetown University Law Center and Americans for Financial Reform present a symposium on bank regulation: Opening Wall Street’s Black Box, Pathways to Improved Financial Transparency.Gary Gensler, Chairman of the U.S. Commodity Futures Trading Commission, will deliver the keynote address.

WHEN:

Friday, October 11, 2013

WHERE:

Georgetown University Law Center
Gewirz Student Center, 12th Floor
120 F Street, NW
Washington, D.C. 20001 

SCHEDULE:

10:00 a.m. – 10:10 a.m.
Introductory remarks from event sponsors

10:10 a.m. – 11:40 a.m.
Panel – Rethinking the Disclosure Paradigm
Amias Gerety, Deputy Assistant Secretary for the Financial Stability Oversight Council, U.S. Department of Treasury
Henry Hu, Allan Shivers Chair in the Law of Banking and Finance, University of Texas School of Law
Albert “Pete” Kyle, Charles E. Smith Professor of Finance, University of Maryland
Adam Levitin, Professor, Georgetown Law
Marcus Stanley, Policy Director, Americans for Financial Reform (Moderator)

11:45 a.m. – 12:15 p.m.
Keynote Address
Gary Gensler, Chairman, U.S. Commodity Futures Trading Commission

12:30 p.m. – 2:00 p.m.
Panel – Progress Since 2008: Financial Transparency Post-Crisis
Jesse Eisinger, Reporter, ProPublica
David Frenk, Research Director, Better Markets
Zach Gast, Head of Financial Sector Research, Center for Financial Research and Analysis
Antoine Martin, Vice President, New York Federal Reserve Bank
Lisa Donner, Executive Director, Americans for Financial Reform (Moderator)

2:00 p.m. – 3:30 p.m.
Panel – Transparency and Accountability
Brad Miller, Of Counsel, Grais & Ellsworth
Cathy O’Neil, Occupy Wall Street’s Alternative Banking Group and Senior Data Scientist, Johnson Research Labs
Gene Phillips, Director, PF2 Securities Evaluation
Greg Smith, Former Goldman Sachs Executive Director and Author of Why I Left Goldman Sachs
Chris Brummer, Professor, Georgetown Law (Moderator)

courtesy of Propublica

IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK

CARMEN M. SEGARRA,

Plaintiff,

V.

THE FEDERAL RESERVE BANK of
NEW YORK; MICHAEL SILVA;
MICHAEL KOH; and JOHNATHON
KIM,

Defendants.

COMPLAINT

Plaintiff Carmen M. Segarra (hereinafter “Carmen” or “Carmen Segarra”), by and
through her attorney, Linda . Stengle, Esq., brings this action against Defendants Federal
Reserve Bank of New York, Michael Silva, Michael Koh, and Johnathon Kim

(hereinafter “Defendants”). Plaintiff Carmen Segarra alleges as follows:

I. INTRODUCTION

1. This action arises out of Defendants’ violations of 12 U.S.C. 183] and other
laws prohibiting obstruction and interference with a bank examiner’s examination
and retaliation for her preliminary examination findings.

2. On October 31, 2011, Carmen Segarra accepted full time employment offered to
her by Defendant Federal Reserve Bank of New York. Carmen’s title was Senior
Bank Examiner, and she was assigned to examine the Legal and Compliance
divisions of the Goldman Sachs Group (hereinafter “Goldman” or “Goldman
Sachs”).

Through their misconduct, Defendants repeatedly obstructed and interfered with
Carmen’s examination of Goldman over several months. Finally, in May 2012,
Defendants directed Carmen to change the findings of her examination. Carmen
refused. Because Carmen refused to change her findings, Defendants terminated
her three business days later, on May 23, 2012.

In addition, Defendants improperly caused Carmen Segarra reputational and
professional harm by firing her for cause. Specifically, they fired her because
they suddenly, after months receiving evidence, changed their position and said
Carmen’s finding that Goldman Sachs had no conflict of interest policy in
compliance with SR 08-08 was not credible.

Defendants caused Carmen Segarra’s career in banking to be irreparably
damaged.

Plaintiff Carmen Segarra seeks reinstatement to her position as Senior Bank
Examiner, back pay, compensation for lost benefits, compensatory damages,
punitive damages, and attorney’s fees, costs, and expenses, in an amount
determined by the Court, to redress Defendants’ illegal and improper conduct.

[…]

FULL COMPLAINT w/ EMAILS

This corruption must end.

NYT-

In a March 2012 meeting, a group of examiners at the Federal Reserve Bank of New York agreed that Goldman Sachs had inadequate procedures to guard against conflicts of interest — guidelines aimed at stopping firms from putting their pursuit of profit ahead of their clients’ best interests.

The examiners voted to downgrade a confidential rating assigned by the New York Fed that could have spurred costly enforcement actions and other regulatory penalties. It is not known whether the vote materialized in a rating change. The former examiner who pushed for a downgrade, Carmen Segarra, now contends in a lawsuit filed Thursday that just weeks after the vote, her superiors asked her to change her findings on Goldman and fired her after she refused.

The vote to downgrade, which has not been previously reported, could have been a big blow for Goldman.

[NEW YORK TIMES]

New Jersey District Court

CHARLES EDWARD LINCOLN, III and MICHAEL N. MASTORIS

vs

WELLS FARGO BANK, N.A., KIRN POWERS, LLC, SARAH E. POWERS, ESQ., REED SMITH, LLC, DIANE A. BETTINO, ESQ., AMS SERVICING, LLC, DB50 2011-1 TRUST, PHELAN, HALLINAN & SCHMEIG, P.C., GRAND BANK, N.A., ARCHER & GREINER, P.C. and JOHN & JANE DOES 1-10

Excerpt:

Background:

Shams, simulated Process, and Predetermined Outcomes as Court Approved & Judicially Implemented Statewide Systemis Process in New Jersey Residential Home Foreclosures

[…]

Michael T. Pines

1345 Encinitas Blvd., Ste 602E

Encinitas, Ca.  92024

619-534-9046 [CELL]

760-385-3482 [SKYPE]

michaelt.attyconsultant@gmail.com

October 10, 2013

Chief Justice Tani G. Cantil-Sakauye

and the Associate Justices

Supreme Court of California

350 McAllister St.

San Francisco, Ca. 94102

Re:  Request for Depublication

        Glaski v. Bank of America, N.A. et. Al.

       California Court of Appeal, Fifth Appellate District – Case No. F0634556

TO:  The Honorable Chief Justice and Associates of The California Supreme Court

    I am writing in opposition to the request by Deutsche Bank National Trust Company’s request to depublish in the above matter. I will only address one issue – the wrongful conduct of counsel seeking depublication.

COUNSEL IS ACTING IMPROPERLY

Morgan Lewis Has A Conflict Because Deutsche Is Being Sued By The Very Investors It Purports To Act As A Trustee For

    A problem with the securitization of loans, is that the banks and their attorneys, that were, and are, involved in securitization serve no one but their own interests.  They have violated countless laws.  There are of course countless government and private cases pending regarding such. There are government actions, including criminal investigations against foreclosure law firms.

    In the instant matter, counsel purports to represent a trustee of a securitized trust (“Trust”) acting for the benefit of the beneficiaries of the trust (called Certificate Holders, because they are issued certificates, “Investors”).  This is false for many reasons. Deutsche is being sued by the Investors.  Most Investors were institutional investors and most all have sued in connection with the trusts they invested in. It is difficult to find which lawsuit was filed in connection with the specific WaMu Mortgage Pass-­Through Certificates Series 2005-­AR17 Trust, which is the Trust in the instant case.  However, undoubtedly given the virtually every Investor has filed suit against Deutsche, it is likely in one of the legal actions.  The banks have destroyed the retirement funds of countless public entities. (Just a few of the hundreds of such legal actions are: United States District Court, Southern District of New York, Policemen’s Annuity and Benefit Fund v. Bank of America et. al., Case No. 12-cv-2865; United States District Court Western District Of Washington At Seattle; In Re: Washington Mutual  Master Case No.: C09-0037 [settled]; Royal Park Investments SA/NV v. The Goldman Sachs Group et al., Case No. 652732/2013, in the Supreme Court of the State of New York, County of New York.)

    As set forth in the Court Of Appeal opinion, the securitized trust and REMIC are likely void. This is irrefutable, has been stated by many courts around the country, and class actions have already been certified on this basis.  (See, Order Granting Certification, and a few of the cases and commentaries, submitted herewith).

    In addition, in a striking case of “calling the kettle black”; Deutsche itself is claiming it was defrauded when it purchased loans from G.E. Capital. It is suing for the very same conduct Deutsche itself engaged in.  (Deutsche Bank National Trust Company, Solely As Trustee For The Morgan Stanley Abs Capital I Inc.  Trust, Series 2007-He6, Et. Al. v.  Wmc Mortgage L.L.C., et. al. U.S. District Court, District of Connecticut, No. 3:13-cv-01347-CSH.)

    Bank Attorneys Have Been And Are Being Sanctioned

Attorneys all over the country have been, and are being sanctioned, sued, and disbarred for conduct such as Morgan Lewis has engaged in regarding this matter. There are so many cases and articles regarding the wrongful conduct of attorneys representing the “Too Big To Fail” banks, it would difficult if not impossible to provide them all.

It couldn’t have been said better than the eloquent court in, In Re Nosek.

In, In re Nosek, 386 B.R. 374 (Bankr. D. Mass 2008), Ameriquest Mortgage

Company (“Ameriquest”) claimed that it was the holder of Nosek’s mortgage, despite the fact that Ameriquest was the loan originator, had not held the note since November 30, 1997, and ended its mortgage servicer role as of March 31, 2005. Judge Joel B. Rosenthal placed blame on Ameriquest, the mortgage servicer, and Wells Fargo, the mortgage lender, for the mishandling of the Mortgage Assignment, stating: “It is the creditor’s responsibility to keep a borrower and the Court informed as to who owns the note and mortgage and is servicing the loan, not the borrower’s or the Court’s responsibility to ferret out the truth…That Ameriquest had no role after March 2005—well before the trial in Adversary Proceeding 04-4517, was unknown to the court.” Judge Rosenthal also did not allow Ameriquest to claim that PSAs give banks the inherent power to act in their own name on filing proofs of claim: “Ameriquest also seeks to hide behind the Pooling and Servicing Agreement by arguing that the document gave Ameriquest the power to act in its own name, including for the purpose of filing proofs of claim. That may be true but proofs of claim filed under a written power of attorney MUST have the power of attorney attached. Fed. R. Bank. P. 3001 and Official Form 10. No part of the agreement was attached to the proof of claim.” Judge Rosenthal also blamed Wells Fargo, the mortgage lender, for the mishandling of the Mortgage Assignment, stating “This Court will not allow Wells Fargo or any other mortgagee to shirk responsibility by pointing the finger at their servicers.” Judge Rosenthal imposed sanctions of $250,000 on Ameriquest and Wells Fargo, as well as sanctions on the law firms.

On May 28, 2009, U.S. District Court Judge William G. Young upheld the sanctions against Ameriquest, but overturned the sanctions against Wells Fargo. Judge Young’s harshest criticisms were for the lawyers involved:

   “After 43 years at the bar, the saddest thing about this case is the conduct of the lawyers — all the lawyers. A careful reading of the briefs in this case reveals only a single recognition that counsel did anything amiss in their misrepresentations to the Bankruptcy Court. There’s blame aplenty, of course, each one blaming everyone else — including the hapless bankrupt homeowner. … How is it that our profession, the legal profession —which could have and should have strongly counseled against the self interested excesses that set up the collapse — instead has eagerly aided and abetted those very excesses? How could we (all of us who profess to be lawyers) have fallen so low?”

(emphasis added).

In a footnote regarding the arguments of Ameriquest’s national law firm

Judge Young stated: “This argument is singularly unpersuasive. It is tantamount to saying, ‘We’ve been making these misrepresentations for years. Until 2005, no one seemed to care.’”

    The lawyers were reported to their respective State Bars by the court, but in California, the Bar did nothing because of it’s own longstanding misconduct.

MORGAN LEWIS IS ITSELF LIABLE

U.S Supreme Court 2010 – Bank Attorneys Strictly Liable Even For Even Minor Technical Mistake In A Letter

Jerman V. Carlisle, Mcnellie, Rini, Kramer & Ulrich Lpa et al; U.S. Supreme Court, 130 S. Ct. 1605 (2010) is a seminal Supreme Court case against attorneys representing banks.  Many amicus briefs were filed.  

The Fair Debt Collection Practices Act (“FDCPA”) is a strictly liability statute and it is well settled that attorneys are included within the purview of it.

    In Jerman, the defendants, a law firm and one of its attorneys, filed a complaint in state court seeking to foreclose on the plaintiff’s property. They made a minor technical mistake. They attached to the complaint a notice stating, inter alia, that the debt would be assumed valid unless the plaintiff disputed the debt, “in writing” within thirty days of receiving the notice. The district court held that the collector’s notice violated section 1692g(a)(3) of the FDCPA, but also held for defendants on the “bona fide error” defense, because the wording of the notice was based upon their error of law. The Sixth Circuit affirmed the district court, but the U.S. Supreme Court reversed.

The Supreme Court rejected the argument that Congress only meant to impose liability on collectors who know that their conduct is unlawful, citing the “common maxim, familiar to all minds, that ignorance of the law will not excuse any person, either civilly or criminally. The Court also reconfirmed strict liability.

In January 2013, The Sixth Circuit specifically held lawyers involved in foreclosure are “debt collectors” within the FDCPA.  The Sixth Circuit’s holding is consistent with decisions from other circuits that have found lawyers engaged in mortgage foreclosure can qualify as “debt collectors” under the FDCPA. Those circuits include the Second, Third, Fourth, and Eleventh Circuits.

Previously in Wallace v. Washington Mutual et. al. 683 F.3d 323, 326 (6th Cir. 2012) the court held that attorneys are liable when their clients don’t own the loan.

In Wallace, The district court found that plaintiff failed to state a claim under the Fair Debt Collection Practices Act because the failure to record an Assignment of Mortgage before filing a foreclosure action is not a deceptive practice under the Act.  On appeal the court said, the single issue before us is whether the filing of foreclosure action by the law firm claiming ownership of the mortgage by its client Washington Mutual constitutes a “false, deceptive or misleading representation” under the Fair Debt Collection Practices Act when the bank has not received a transfer of the ownership documents. We hold that the complaint states a valid claim and reverse the dismissal of the case.

The case before the Sixth Circuit involved an Ohio law firm Lerner Sampson & Rothfuss, which in 2008 filed foreclosure paperwork against homeowner Betty Wallace. Not until a month later was the mortgage actually assigned to LSR’s client Washington Mutual Bank FA from Wells Fargo Bank NA.  

By falsely claiming WaMu held the mortgage, LSR may have committed the sort of “false representation … to collect or attempt to collect any debt” that is prohibited by the FDCPA, the Sixth Circuit said.

The Consumer Financial Protection Bureau has made clear that it agrees with this interpretation. On January 2, 2013, the CFPB’s final rule defining larger participants of a market for consumer debt collection became effective. In its background discussion of the rule, the CFPB noted its agreement with cases holding that an attorney or other person who enforces security interests can qualify as a debt collector under the FDCPA.

Most states, including California have a state statutory scheme similar to the FDCPA. (In California:  The Rosenthal Act).  Damages of all sorts, including any “actual” emotional and physical distress and unlimited punitive damages can be collected and attorney’s fees.  The Ninth Circuit has held the remedies are cumulative of the FDCPA.  Arrow Financial Services, LLC, 637 F.3d 939 (9th. Cir. 2011).  

Attorneys who try to hide their liability and/or are closely related to a debt collector have been sanctioned also.

Recently, the U.S. Court of Appeals for the Tenth Circuit found that defendant debt collector’s president and chief operating officer (president), along with the debt collector’s lawyer, acted in bad faith by failing to disclose that the debt collector had a professional liability policy sufficient to cover plaintiff’s Fair Debt Collection Practices Act (FDCPA) claims. Plaintiff brought a class action FDCPA suit against the debt collector and was awarded her fees and costs. The debt collector filed for bankruptcy and its insurer refused to cover the loss because the debt collector never tendered a timely claim. The district court found that the debt collector’s attorney and president acted in bad faith to deprive plaintiff of a recovery from the insurer and ordered them to pay plaintiff’s damages and fees owed by the debt collector as well as costs incurred litigating the bad faith issue.

The Tenth Circuit affirmed the sanction. The court noted that not only did the district court not believe the lawyer’s and president’s excuses for failing to disclose the insurance information, but also properly relied upon the facts that: (1) the debt collector had professional liability coverage for suits arising from its wrongful act, (2) the lawyer and president knew this, (3) during discovery the attorney failed to turn over documents reflecting the applicable insurance policy, and (4) the lawyer and president allowed the period for filing a timely claim to lapse. The court also found that there was sufficient evidence to uphold the district court’s ruling that the attorney had a “peculiarly close relationship” with the debt collector to warrant holding him jointly responsible for his “client’s misdeeds in which he actively participated.” Anchondo v. Dunn, 2013 WL 599798 (10th Cir. Feb. 19, 2013).

CONCLUSION

    Counsel in this case should know better. It has a clear conflict. It is liable for violations of the FDCPA and other laws.  Because it has made false statements to this Court, and has a conflict of interest, it’s Request should be stricken or denied.

Respectfully,

Michael T. Pines

1 It is now commonly known that the Colorado Attorney General is conducting a criminal investigation of it’s largest foreclosure law firm. (See: http://blogs.denverpost.com/thebalancesheet/2013/09/11/judge-no-attorney-client-privilege-in-foreclosure-investigation/10871).

2 Royal Park Investments SA/NV said Deutsche Bank failed to disclose in offering documents that, among other things, by the time it sold RPI the last certificate in early 2007, it had taken a $4 billion to $5 billion short position in the MBS market, “essentially betting that the very same certificates they were selling would default at significant rates.”

“Indeed, defendants internally called RMBS investments such as those sold to plaintiff ‘pigs,’ ‘crap’ and ‘generally horrible’ at the time they sold the certificates to plaintiff,” RPI said, citing a U.S. Senate panel’s report on the financial meltdown.

The suit alleges that while RPI’s certificates “are now all rated at junk status or below, and are essentially worthless investments,” Deutsche Bank has “profited handsomely,” making a profit of about $1.5 billion on its shorting of the RMBS market.

3 The California Bar has been engaging in misconduct itself for many years.  See, one example submitted herewith.

From robo-signing to mineral rights to the insane cost for flood insurance in Florida, Real Estate is getting very, very ugly and very, very fast.

Reuters-

Robert and Julie Davidson fell hard for the gleaming new house at the Valencia Golf and Country Club in Naples, Florida. They loved the way the palm-fringed, Spanish-style home backed up to the fifth-hole fairway. And they were taken with the three-bedroom’s high ceilings and open plan. Plus the neighborhood – with its power-washed driveways, blooming hibiscus and guarded gatehouse – seemed all “dressed up.”

But when the Davidsons paid $255,385 in 2011 for the house on Birdie Drive, they didn’t know that they had, in essence, bought only from the ground up, and that their homebuilder, D.R. Horton, had kept everything underneath.

“Wait a second, wait a second,” Robert Davidson said after a reporter told him that a search of county records showed that D.R. Horton still owned the oil, natural gas, water and other natural resources beneath his and his neighbors’ homes. “Let me sit down a minute here. They have the mineral rights to the land I’m on?”

[REUTERS]

Charles W. Cox

California Contract Paralegal

322 West Center Street

Yreka, CA 96097

Tel. (541) 727-2240

Fax. (541) 310-1931

October 9, 2013

Chief Justice Tani G. Cantil-Sakauye

and Associate Justices

Supreme Court of California

350 McAllister Street

San Francisco, CA 94102-4797

Re:    Glaski v. Bank of America, National Association et al.   

    Supreme Court Case No. S213814;

    Appellate Case No. F064556, Disposition Date 07/31/2013;

    Trial Court Case No. 09CECG03601

RESPONSE AND OPPOSITION TO REQUEST FOR DEPUBLICATION

Dear Justices of the Supreme Court:

    Pursuant to California Rules of Court (“CRC”), Rule 8.1125(b) et seq., the undersigned writes to respectfully and timely oppose and object to the requests to depublish the published opinion of the appellate court for the above referenced case by the following response.  

STATEMENT OF INTEREST AND INTRODUCTION

    The undersigned’s interest in this response to the depublication request, relates to clients served in my practice as a California Bus & Prof. Code qualified paralegal which consists of working on these types of cases with attorneys on a regular basis.  We represent many clients who are, and will be affected by this currently citable Appellate Court Opinion.  Some already relying on the Glaski Opinion. The clarity the Appellate Court provided in its well-reasoned Opinion qualified for publication and respectfully, should not be upset.

THE DEPUBLICATION REQUEST PROCESS IS NOT A FORUM TO RE-TRY THE CASE

A DEPUBLICATION REQUEST SHOULD ONLY BE UTILIZED TO CONFIRM THAT THE APPELATE COURT’S OPINION MET STANDARD FOR PUBLICATION

    The depublication process should not be used as a forum to re-try the case.  Supreme Court review was an available option but no petition filed.

    Justice Joseph R. Grodin wrote in 1984 in confirming earlier explanations by the late Chief Justice Donald R. Wright and then Chief Justice Rose Elizabeth Bird, that depublication is only ordered because the majority of the justices consider the opinion to be wrong in some significant way, such that it would mislead the bench and bar if it remained citable as precedent.  Such is not the case here.

    The Appellate Court had no choice but to assume the purported “Trust” was formed under New York Trust Laws because Plaintiff claimed that it was.  Defendants never refuted or objected to this stated fact in the instant case.  This does not change the general concept the Court established that assets are prohibited from entering a trust after it is closed and the restrictive requirements to maintain limited liability for a pass through entity in order to mitigate tax liability or a tax exempt status.  

    Regardless of what law organized under, this was still a REMIC Trust.  I.R.S. Code § 860 et seq. and Del. Code Ann. Title 12 §§ 3801-3824 each provides similar if not more comprehensive requirements related to the actual purpose of the trust; for instance:

“Every direct or indirect assignment, or act having the effect of an assignment, whether voluntary or involuntary, by a beneficiary of a trust of the beneficiary’s interest in the trust or the trust property or the income or other distribution therefrom that is unassignable by the terms of the instrument that creates or defines the trust is void.”

NOTE: IS THIS DEL. CODE OR IRC?  USING THE IRS CODE IS GREAT STUFF!  DO NOT USE     Statements in the requests for depublication that Delaware Statutes provide no comparable provision that would render a belated assignment to a trust void is simply untrue.

    The justices’ reasoning was sound, applicable and well-reasoned.  Defendants’ Petition for Rehearing was rightfully denied and the numerous requests for publication were properly considered and the case was properly certified for publication.

THE APPELLATE COURT’S OPINION MET THE STANDARDS
FOR CERTIFICATION AND PUBLICATION

    The Appellate Court’s Opinion meets the standard for certification and publication as authorized by Cal. Rules of Court, Rule 8.1105(c) which provides that an opinion of a Court of Appeal or a superior court appellate division-whether it affirms or reverses a trial court order or judgment-should be certified for publication in the Official Reports if the opinion:

(1)Establishes a new rule of law;

(2)Applies an existing rule of law to a set of facts significantly different from those stated in published opinions;

(3)Modifies, explains, or criticizes with reasons given, an existing rule of law;

(4)Advances a new interpretation, clarification, criticism, or construction of a provision of a constitution, statute, ordinance, or court rule;

(5)Addresses or creates an apparent conflict in the law;

(6)Involves a legal issue of continuing public interest;

(7)Makes a significant contribution to legal literature by reviewing either the development of a common law rule or the legislative or judicial history of a provision of a constitution, statute, or other written law;

(8)Invokes a previously overlooked rule of law, or reaffirms a principle of law not applied in a recently reported decision; or

(9)Is accompanied by a separate opinion concurring or dissenting on a legal issue, and publication of the majority and separate opinions would make a significant contribution to the development of the law.

    I contend the Appellate Court’s well-reasoned Opinion was published on the grounds of sub-sections 2, 3, 5, 6, and 8 referenced above, more specifically related to Sections III. sub-sections A-H and Section IV. sub-section B of the Appellate Court’s Opinion.

    Section III.A.  The appellate court’s Opinion clarifies securitization issues related to the lack of transfer of the deed of trust into securitized trusts after the closing date, which was deemed not acceptable due to the controlling “pooling and servicing agreement” and statutory requirements applicable to a Real Estate Mortgage Investment Conduit (REMIC) trusts, which is further clarified in FN 12 of the opinion with appropriate citations.  This meets the standard for publication per CRC, Rules 8.1105(c)(3), (5), (6) and (8).

    Section III.B.  Clarifies previous issues and opinions related to wrongful foreclosure by a nonholder of the deed of trust; or when a party alleged not to be the true beneficiary, instructs the trustee to file a Notice of Default and initiate nonjudicial foreclosure which conflicts with other holdings; adopts more applicable holdings and further clarifies that a plaintiff must allege facts that show the defendant who invoked the power of sale was not the true beneficiary.  This meets the standard for publication per CRC, Rules 8.1105(c) (3), (5), (6) and (8).

    Section III. C.  This is an important opinion for these cases not previously held by other opinions clarifying the question of whether the purported assignment was void and not dependent on whether the borrower was a party to, or third party beneficiary of the assignment agreement.  This meets the standard for publication per CRC, Rules 8.1105(c)(2), (3), (5), (6) and (8).

    Section III.E.  This section distinguishes the Gomes case which seems to be utilized by other courts and defendant attorneys in California whether the application applies to the actual facts of the case at bar or not.  Of particular note is the Court’s interpretation allowing borrowers to pursue questions regarding the chain of ownership and such compatibility with Herrera as opposed to Gomes under the circumstances of this and many other cases.  The opinions made by the Court clarify Important distinguishing characteristics authorized by the standards for publication CRC, Rules 8.1105(c)(3), (5), (6) and (8).

    Section III.F.  Banks raise failure to tender as a defense in virtually every case.  The Glaski opinion correctly holds that tender is not required where the foreclosure sale is void, rather than voidable.  This meets the standard for publication per CRC, Rules 8.1105(c)(3), (5), (6) and (8).

GLASKI WAS CORRECTLY DECIDED

    Whether Glaski was a party or third party beneficiary to the purported Securitized Trust Agreement or Pooling and Servicing Agreement (“PSA”) is irrelevant.  The PSA itself did NOT allow transfer into the purported trust AFTER the closing date whether the borrower invokes “standing” or not and whether or not a party to the PSA.  The Appellate Court ruled that such a transfer after the “closing-date” was not allowed as it would violate the purpose of the “securitized trust.”

    Professor Adam Levitin of Georgetown Law School states the following, regarding the view (as expressed in the requests for depublication) that a homeowner has no standing to challenge assignments into a trust because of not being a party to the PSA:

        “I think that view is plain wrong.  It fails to understand what PSA-based foreclosure defenses are about and to recognize a pair of real and cognizable Article III interests of homeowners:  the right to be protected against duplicative claims and the right to litigate against the real party in interest because of settlement incentives and abilities.  

    The homeowner is obviously not party to the securitization contracts like the PSA (query, though whether securitization gives rise to a tortious interference with the mortgage contract claim because of PSA modification limitations…). This means that the homeowner can’t enforce the terms of the PSA.  The homeowner can’t prosecute putbacks and the like.  But there’s a major difference between claiming that sort of right under a PSA and pointing to noncompliance with the PSA as evidence that the foreclosing party doesn’t have standing (and after Ibanez, it’s just incomprehensible to me how this sort of decision could be coming out of the 1st Circuit BAP with a MA mortgage). 

    Let me put it another way.  Homeowners are not complaining about breaches of the PSA for the purposes of enforcing the PSA contract.  They are pointing to breaches of the PSA as evidence that the loan was not transferred to the securitization trust.  The PSA is being invoked because it is the document that purports to transfer the mortgage to the trust.  Adherence to the PSA determines whether there was a transfer effected or not because under NY trust law (which governs most PSAs), a transfer not in compliance with a trust’s documents is void.  And if there isn’t a valid transfer, there’s no standing.  This is simply a factual question–does the trust own the loan or not?   (Or in UCC terms, is the trust a “party entitled to enforce the note”–query whether enforcement rights in the note also mean enforcement rights in the mortgage…)  If not, then it lacks standing to foreclosure.

    It’s important to understand that this is not an attempt to invoke investors’ rights under a PSA. One can see this by considering the other PSA violations that homeowners are not invoking because they have no bearing whatsoever on the validity of the transfer, and thus on standing.  For example, if a servicer has been violating servicing standards under the PSA, that’s not a foreclosure defense, although it’s a breach of contract with the trust (and thus the MBS investors).  If the trust doesn’t own the loan because the transfer was never properly done, however, that’s a very different thing than trying to invoke rights under the PSA.  

    I would have thought it rather obvious that a homeowner could argue that the foreclosing party isn’t the mortgagee and that the lack of a proper transfer of the mortgage to the foreclosing party would be evidence of that point.  But some courts aren’t understanding this critical distinction.  

    Even if courts don’t buy this distinction, there are at least two good theories under which a homeowner should have the ability to challenge the foreclosing party’s standing. Both of these theories point to a cognizable interest of the homeowner that is being harmed, and thus Article III standing.  

    First, there is the possibility of duplicative claims. This is unlikely, although with the presence of warehouse fraud (Taylor Bean and Colonial Bank, eg), it can hardly be discounted as an impossibility. The same mortgage loan might have been sold multiple times by the same lender as part of a warehouse fraud. That could conceivably result in multiple claimants. The homeowner should only have to pay once. Similarly, if the loan wasn’t properly securitized, then the depositor or seller could claim the loan as its property. Again, potentially multiple claimants, but the homeowner should only have to pay one satisfaction.

    Consider a case in which Bank A securitized a bunch of loans, but did not do the transfers properly. Bank A ends up in FDIC receivership. FDIC could claim those loans as property of Bank A, leaving the securitization trust with an unsecured claim for a refund of the money it paid Bank A. Indeed, I’d urge Harvey Miller to be looking at this as a way to claw back a lot of money into the Lehman estate.  

    Second, the homeowner had a real interest in dealing with the right plaintiff because different plaintiffs have different incentives and ability to settle. We’d rather see negotiated outcomes than foreclosures, but servicers and trustees have very different incentives and ability to settle than banks that hold loans in portfolio. PSA terms, liquidity, capital requirements, credit risk exposure, and compensation differ between services/trustees and portfolio lenders. If the loans weren’t properly transferred via the securitization, then they are still held in portfolio by someone. This means homeowners have a strong interest in litigating against the real party in interest.

CONCLUSION

    The arguments proffered supporting depublication are nothing more than meritless attempts to re-argue the case.  The Appellate Court’s Opinion was correctly decided.  It promotes the accurate determination of standing to foreclose based on having the actual authority to do so, not based on a void assignment to a trust after the closing date.   

    For the foregoing reasons and on behalf of clients and persons this case affects, the undersigned respectfully request this Honorable Court NOT depublish the above referenced Appellate Court Opinion due to the importance that the continued ability to cite this well-reasoned Opinion will provide.

Sincerely,

Charles W. Cox

California Contract Paralegal

322 West Center Street

Yreka, CA 96097

Tel.      (541) 727-2240

Fax.     (541) 310-1931
Charles@Bayliving.com 

PROOF OF SERVICE

Glaski v. Bank of America, National Association et al.

Supreme Court Case No. S213814

Appellate Case No. F064556

    I, Charles W. Cox, am over the age of eighteen and not a party to this action.  My business address is 322 West Center St., Yreka, CA 96097.  On the date set forth below, I served the foregoing RESPONSE AND OPPOSITION TO REQUEST FOR DEPUBLICATION for the above referenced case, by placing a copy of the document in a sealed envelope with first-class postage fully prepaid and placing the envelope for collection and mailing with the United States Postal Service following our ordinary business practices, addressed to the following.

    I declare under penalty under the laws of the State of California that the information stated above is true and correct.

Dated: October 10, 2013

By: ______________________

           Charles W. Cox

1 See Joseph R. Grodin, The Depublication Practice of the California Supreme Court, 72 Cal. L. Rev. 514, 514 n.1 (1984).

2 See Julie H. Biggs, Note 8. at 1185 n.20, Decertification of Appellate Opinions:  The Need for Articulated Judicial Reasoning and Certain Precedent in California Law, 50 S. Cal. L. Rev. 1181, 1200 (1977) quoting Chief Justice Wright.

3 In Justice Bird’s address at the State Bar Convention in San Francisco, CA Sept. 10, 1978, in Report, L.A. Daily J., Oct. 6, 1978, at 4, 8, speaking of depublished opinions as ones “with which the court does not agree” and as “erroneous ruling[s]”.

4 Grodin, supra, note 7, at 514-15.

5 Chapter 35, Trusts, Subchapter III. General Provisions § 3536.

6The “Sections” stated herein and below, relate to the applicable Sections of the Appellate Court’s Opinion.

7 Gomes v. Countrywide Home Loans, Inc. (2011) 192 Cal.App.4th 1149.

8 Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366.

9 See: http://www.law.georgetown.edu/faculty/levitin-adam-j.cfm.

10 http://www.creditslips.org/creditslips/2011/07/standing-to-challenge-standing.html.

NOW we all should know by now, that where there is one …there are many.

How is this still happening?

Orlando Sentinel-

South Orange homeowner Francisco Molina thought his house troubles were over a few months ago.

The survivor of two heart attacks lost much of his wages and almost lost his house, but he was able to renegotiate his mortgage only days before the four-bedroom home was to be sold at a government auction.

That’s when things tumbled downhill: The Orange County court system mistakenly sold the house in July, even though a judge had canceled Molina’s foreclosure. The courts tried to right the wrong by overturning the sale. But the buyer — investment giant Blackstone Group — said it never got word. So for months, Blackstone’s Invitation Homes subsidiary tried to get Molina out of his home.

[ORLANDO SENTINEL]

I would call this law firm immediately and have them withdraw this request.

With GREAT thanks to Simonee Cromwell. She was able to get a friend in Fresno to go to the court, pay 50 cents a page and then go and get this faxed to her all within the last few hours.

Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, NY 10110-0060
Tel. 212.309.6000
Fax: 212.309.6001
www.morganlewis,com

Bernard J. Garbutt Ill
(212) 309·6084
bgarbult@morganlewis.com

October 7, 2013

Chief Justice Tani G. Cantil-Sakauye
and the Associate Justices
Supreme Court of California
350 McAllister Street
San Francisco, CA 94 102-4 797

Re: Request for Depublication
Glaski v, Bank of America, N.A., et al.,
California Court of Appeal, Fifth Appellate District – Ga5e No. FOG455<).

To; The Honorable Chief Justice and Associate Justices of the California Supreme Court

We represent Deutsche Bank National Trust Company, solely in its capacity as trustee (the
“Trustee”) of the relevant residential mortgage-backed (“RMBS”) trusts, as a defendant in the
cases Rajamin, Deutsche Bank Nat’ l Trust Co., No. 10-cv-7531 (LTS) (S.D.N .Y. ), on appeal,
13-1614-cv (2c\ Cir.) (“Rajamin”) and Tran. v. Bank of New York, No. 13-cv-580 (RPP)
(S.D.N.Y.) (“Tran”).

With all due respect to the Court of Appeal, Fifth District, California (the “Court”), we write to
request depublication of the Court’s opinion in Glaski v. Bank Of America, N.A .. et al., 218 Cal.
App. 4111 1079, 2013 WL 4037310, issued on July 31, 2013 and certified for publication on
August 8, 2013 (the “Opinion”). This request is made pursuant to Rule of Court 8.1125.

Background

In Glaski, the plaintiff mortgagor brought a wrongful foreclosure claim against an RMBS
trustee, among others, relating to the no11″judicial foreclosure upon plaintiffs mortgage loan. In
sum, the plaintiff alleged that the “attempted” assignment of his mortgage loan to an RMBS trust
was made after the closing date in the pooling and servicing agreement (the “PSA”) for that
RMBS trust, and, therefore, the assignment was ineffective. The plaintiff argued that this
deprived the party that had foreclosed upon his mo1tgage loan of the standing to do so because it
was not the true owner of his loan. The trial court dismissed The of plaintiff’s claims. The Court
reversed.

…

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

remittitur

n. 1) a judge’s order reducing a judgment awarded by a jury when the award exceeds the amount asked for by the plaintiff (person who brought the suit). 2) an appeal’s transmittal of a case back to the trial court so that the case can be retried, or an order entered consistent with the appeals court’s decision (such as dismissing the plaintiff’s case or awarding costs to the winning party on appeal).
See also: remand

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

MARION RUCKER and APRIL
MILLER and CARL MILLER, as
husband and wife and the marital
community thereof,
Appellant,

v

NOVASTAR MORTGAGE, INC., and
QUALITY LOAN SERVICING OF
WASHINGTON,
Respondent.

Dwyer, J. — Marion Rucker and April Miller appeal from a summary
judgment order dismissing their claims under the Washington deeds oftrust act,
chapter 61.24 RCW (DTA). They contend that genuine issues of material fact
exist regarding whether Rucker’s property was actually sold at a trustee’s sale
and that, accordingly, summary judgment in favor of NovaStar Mortgage, Inc.—
the winning bidder at the disputed trustee’s sale—was improperly granted. They
further contend that, even ifthe sale did occur, itwas invalid because the trustee,
Quality Loan Service Corporation of Washington (QLS), was not properly
appointed by an eligible beneficiary prior to the sale taking place. Because there
are genuine issues of material fact regarding QLS’s authority to conduct a valid
trustee’s sale, we reverse the trial court’s summary judgment order and remand
for further proceedings.

lender processing services securities settlement-

The purpose of this website is to inform you of (a) the pendency of this class action (the “Action”), (b) the proposed settlement of the Action, and (c) the hearing to be held by the Court to consider (i) whether the settlement should be approved, (ii) the application of lead plaintiff’s counsel for attorneys’ fees and expenses, and (iii) certain other matters (the “Settlement Hearing”). The Notice describes important rights you may have and what steps you must take if you wish to participate in the settlement or wish to be excluded from the Settlement Class.

If approved by the Court, the settlement will provide a $14 million cash settlement fund for the benefit of eligible investors (the “Settlement”).¹

The Settlement resolves claims by Baltimore County Employees’ Retirement System (“Lead Plaintiff”) that the Defendants misled investors about the financial condition of LPS, avoids the costs and risks of continuing the litigation, pays money to investors like you, and releases the Defendants from liability.

If you are a member of the Settlement Class, your legal rights are affected whether you act or do not act.

The Court will review the Settlement at the Settlement Hearing to be held on October 25, 2013.

[lender processing services securities settlement]

For Immediate Release

Contact:
Corinne Russell
(202) 649-3032

Stefanie Johnson
(202) 649-3030

October 7, 2013

.

FHFA Announces Significant Steps in Organization of Joint Venture to Establish Common Securitization Platform

Washington, DC – The Federal Housing Finance Agency (FHFA) announced today that the joint venture between Fannie Mae and Freddie Mac that will build and operate a new common securitization platform has reached some important milestones. A Certificate of Formation has been filed with the Secretary of State of the State of Delaware, establishing Common Securitization Solutions, LLC? (CSS) as a limited liability company. This establishes CSS as a legally recognized entity and marks an important step in creating the joint venture, which is an equally-owned subsidiary of Fannie Mae and Freddie Mac.

“The filing of the Certificate of Formation represents a significant milestone toward accomplishing the goal of building a new secondary mortgage market infrastructure,” said FHFA Acting Director Edward J. DeMarco. “We are pleased with the progress being made and look forward to further developments.”

FHFA also announced today that after a rigorous process to identify a site, a lease for commercial office space for CSS has been signed by authorized officials from both Fannie Mae and Freddie Mac. The office space is located in Bethesda, Maryland and the lease is for a three-year term.
In addition, an executive recruitment firm has been retained to identify candidates for the positions of Chief Executive Officer and Chairman of the Board of Managers of CSS.

Identification and interviewing of candidates is currently underway.

In a March speech, Acting Director DeMarco announced that the formation of a new joint business entity, to be located separately from Fannie Mae and Freddie Mac and headed by a CEO and Chairman of the Board of Managers, were goals FHFA expected to achieve in 2013. Today’s announcement shows clear progress toward meeting those goals.

###

The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks. These government-sponsored enterprises provide more than $5.5 trillion in funding for the U.S. mortgage markets and financial institutions

Source: http://www.fhfa.gov/webfiles/25553/JointVentureRelease100713final.pdf

13M30

JPMORGAN CHASE & CO., ET AL.

V.

FEDERAL HOUSING FINANCE AGENCY

The motion for leave to intervene to file a petition for a
writ of certiorari is denied. Justice Alito took no part in the
consideration or decision of this motion.

REUTERS-

The U.S. Supreme Court said on Monday that banks sued by the U.S. Federal Housing Finance Agency over mortgage-backed securities that were sold to Fannie Mae and Freddie Mac cannot appeal a preliminary lower court ruling.

In 2011, the FHFA sued 18 banks, including Barclays Plc , Bank of America Corp, Deutsche Bank AG , Goldman Sachs Group Inc and JPMorgan Chase & Co, accusing them of violating securities laws by misleading Fannie and Freddie about $200 billion in mortgage-backed securities they purchased.

The Supreme Court said that banks involved in 13 lawsuits in the same U.S. district court that have yet to be settled did not have permission to seek review of a New York-based 2nd U.S. Circuit Court of Appeals decision from April.

[REUTERS]

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
July Term 2013

VIRGIL M. BENNETT and LISSETTE C. BENNETT,
Appellants,

v.

DEUTSCHE BANK NATIONAL TRUST COMPANY, etc., et al.,
Appellees.

No. 4D12-2471

[August 7, 2013]

JOHNSON, LAURA, Associate Judge.

We reverse a final summary judgment of foreclosure because a
material factual issue existed on a matter pertaining to standing.

Deutsche Bank filed a mortgage foreclosure action against Virgil and
Lissette Bennett, alleging that it was “the current owner of or has the
right to enforce the Note and Mortgage.” With the complaint, Deutsche
Bank filed copies of the note with two allonges and the mortgage. The
first allonge contained an undated endorsement from the original lender
(H&R Block) to Option One Mortgage. The second allonge contained an
undated endorsement in blank from Option One Mortgage. Both
allonges were signed by the same individual, Elizabeth Causseaux.

The Bennetts filed a n amended answer and affirmative defenses,
alleging two affirmative defenses: (1) that Elizabeth Causseaux was not
authorized to sign the allonges on behalf of one or both of the separate
entities; and (2) that the Bank was not in possession of the original note.

Deutsche Bank moved for summary judgment and filed supporting
affidavits. The Bank also filed the original loan documents, which were
identical to the copies attached to the complaint. The trial court granted
the Bank’s motion for summary judgment.

The Bennetts filed a motion for rehearing, raising a number of issues
for the first time, along with those issues first raised in their affirmative
defenses. Because the issues raised for the first time in the motion for
rehearing were not properly preserved for appeal, they will not be
addressed here. See Best v. Educ. Affiliates, Inc., 82 So. 3d 143, 146 (Fla.
4th DCA 2012).

As to the issues that were properly preserved for appeal, this court
reviews the trial court’s entry of summary judgment using the de novo
standard of review. McLean v. JP Morgan Chase Bank Nat’l Ass’n, 79 So.
3d 170, 172 (Fla. 4th DCA 2012). Summary judgment is appropriate
when there is no genuine issue as to any material fact and the moving
party is entitled to judgment as a matter of law. This court must
examine the record in the light most favorable to the Bennetts, the nonmoving
party. Id.

“A crucial element in any mortgage foreclosure proceeding is that the
party seeking foreclosure must demonstrate that it has standing to
foreclose.” Rigby v. Wells Fargo Bank, 84 So. 3d 1195, 1196 (Fla. 4th
DCA 2012) (quoting McLean v. JP Morgan Chase Bank Nat’l Ass’n, 79 So.
3d 170, 173 (Fla. 4th DCA 2012)). We find that Deutsche Bank failed to
prove the absence of any genuine issue of material fact regarding the
authority of the person making the endorsements on the two allonges
attached to the note.

Deutsche Bank relies on this court’s opinion in Riggs v. Aurora Loan
Services, LLC, 36 So. 3d 932 (Fla. 4th DCA 2010), holding that an
endorsement o n a note was self-authenticating pursuant to section
90.902(8), Florida Statutes (2008). In Riggs, this court affirmed the final
summary judgment of foreclosure relying on the statutory presumption
in section 673.3081(1), Florida Statutes (2008), which provides:

In an action with respect to an instrument, the authenticity
of, and authority to make, each signature on the instrument
is admitted unless specifically denied in the pleadings. If the
validity of a signature is denied in the pleadings, the burden
of establishing validity is on the person claiming validity, but
the signature is presumed to be authentic and authorized
unless the action is to enforce the liability of the purported
signer and the signer is dead or incompetent at the time of
trial of the issue of validity of the signature.

§ 673.3081(1), Fla. Stat. (2008). In Riggs, there was no issue of
authentication, and the court found that, “in an action with respect to an
instrument, the authenticity of, a n d th e authority to make, each
signature on the instrument is admitted unless specifically denied in the
pleadings.” Id. at 933 (quoting § 673.3081(1), Fla. Stat. (2008)).

In this case, the Bennetts put the validity of the signatures on both
allonges at issue. In their amended answer and affirmative defenses, the
Bennetts specifically allege that Elizabeth Causseaux was not an
authorized agent of one or both entities. Appellants rely on the inference
that the signatures were not authorized because they were made by the
same person on behalf of two separate entities. Construing this evidence
and resolving all reasonable inferences in the light most favorable to the
non-moving party, the Bennetts, this pleading was sufficient to put the
authenticity of the signatures at issue, thus creating a genuine issue of
material fact. Because a genuine issue of material fact exists, summary
judgment was improper.

Reversed and Remanded.
GROSS and MAY, JJ., concur.

Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; Diana Lewis, Judge; L.T. Case No. 502011CA007145
XXXXMB.
Thomas Erskine Ice of Ice Appellate, Royal Palm Beach, for
appellants.
Kimberly Hopkins and Ronald M. Gache of Shapiro, Fishman &
Gache, LLP, Tampa, for appellee Deutsche Bank National Trust
Company.
Not final until disposition of timely filed motion for rehearing.

FOR PUBLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL

FOR THE FIRST CIRCUIT

_______________________________

BAP NO. MS 13-012

_______________________________

Bankruptcy Case No. 12-30538-HJB

Adversary Proceeding No. 12-03013-HJB

_______________________________

SHAWN G. KELLEY and

ANNEMARIE KELLEY,

Debtors.

_______________________________

STEVEN WEISS, Chapter 7 Trustee,

Plaintiff-Appellant,

v.

WELLS FARGO BANK, N.A.,

Defendant-Appellee.

_________________________________

Appeal from the United States Bankruptcy Court

for the District of Massachusetts

(Hon. Henry J. Boroff, U.S. Bankruptcy Judge)

_______________________________

Before

Haines, Deasy, and Godoy,

United States Bankruptcy Appellate Panel Judges.

_______________________________

Steven Weiss, Esq., and L. Alexandra Hogan, Esq., on brief for Plaintiff-Appellant.

Peter J. Haley, Esq., and David E. Fialkow, Esq., on brief for Defendant-Appellee.

_________________________________

October 1, 2013

_________________________________

Godoy, U.S. Bankruptcy Appellate Panel Judge.

            Steven Weiss, the chapter 7 trustee (the “Trustee”), appeals from: (1) a bankruptcy court order denying his motion for summary judgment against Wells Fargo Bank, N.A. (“Wells Fargo”) on his complaint seeking to avoid a certain mortgage granted by the debtors to Wells Fargo, because of an allegedly defective acknowledgment; and (2) granting Wells Fargo’s cross-motion for summary judgment. For the reasons set forth below, we REVERSE the orders of the bankruptcy court and REMAND to the bankruptcy court for the entry of orders consistent with this opinion.

BACKGROUND

            Shawn G. Kelley and Annemarie Kelley (the “Debtors”) own real property located in Chicopee, Massachusetts (the “Property”). On June 11, 2007, the Debtors executed a Limited Power of Attorney, whereby they designated Shannon Obringer (“Obringer”), among others, as their “Agent” or “Attorney in Fact” to effectuate a refinancing of the Property with Wachovia Mortgage Corporation (now Wells Fargo, by virtue of a merger). The Debtors executed the Limited Power of Attorney in Holyoke, Massachusetts. On the same date, in Allegheny County, Pennsylvania, Obringer executed on their behalf a $280,000.00 mortgage (the “Mortgage”) on the Property in favor of Wachovia Mortgage Corporation.1

            Obringer signed the Mortgage for Shawn as follows: “Shawn G. Kelley by Shannon Obringer as attorney in fact.” She executed the Mortgage on behalf of Annemarie similarly: “Annemarie Kelley by Shannon Obringer as attorney in fact.”

            The acknowledgment, which was affixed to the Mortgage immediately following and on the same page as the Debtors’ proxy signatures, recites: 

COMMONWEALTH OF MASSACHUSETTS, Pennsylvania, Allegheny County ss:

On this 11 day of June 2007, before me, the undersigned notary public, personally appeared Shawn G. Kelley and Annemarie Kelley by Shannon Obringer as Attorney in Fact

proved to me through satisfactory evidence of identification which was/were [left blank]

to be the person(s) whose name(s) is/are signed on the preceding document, and acknowledged to me that he/she/they signed it voluntarily for its stated purpose.

My Commission Expires: 10.4.09

                                                                                    /s/ Magda Esposito

                                                                                    Notary Public

(Seal)

            The Debtors filed a voluntary petition for chapter 7 relief in the United States Bankruptcy Court for the District of Massachusetts in April 2012. Thereafter, the Trustee filed a two-count adversary complaint against Wells Fargo, alleging that the acknowledgment affixed to the Mortgage was defective because: (1) it stated that the Debtors appeared before the notary public when, in fact, they did not; and (2) it failed to state that Obringer personally appeared before the notary public and signed the Mortgage on behalf of the Debtors as their free act and deed. 2 Accordingly, in Count I, he asked the court to “determine the validity, priority and extent of the Mortgage as a lien on the Property and issue an order avoiding the Mortgage,” pursuant to §§ 506(d) and 544 and Bankruptcy Rule 7001(2). 3 In Count II, he asked the court to “preserve the Mortgage for the benefit of the estate.”4

            Wells Fargo filed an answer, and the Trustee then moved for summary judgment as to both counts of the complaint. In his accompanying memorandum of law, the Trustee argued that Massachusetts law imposes a stringent requirement that a grantor or mortgagor express that the execution of the instrument was his or her free act and deed. Accordingly, he maintained that the acknowledgment in this case was materially defective because it “create[d] confusion and uncertainty as to whether the document was signed voluntarily by Ms. Obringer or by the Debtors.” Asserting the status of a bona fide purchaser under § 544(a)(3), the Trustee contended that he was entitled to judgment as a matter of law. In support, he relied on a line of cases highlighted by Agin v. Mortg. Elec. Registration Sys., Inc. (In re Giroux), Adv. No. 08-1261, 2009 WL 1458173 (Bankr. D. Mass. May 21, 2009), aff’d, No. 09-CV-10988-PBS, 2009 WL 3834002 (D. Mass. Nov. 17, 2009); Agin v. Mortg. Elec. Registration Sys., Inc. (In re Bower), Adv. No. 10-1092, 2010 WL 4023396 (Bankr. D. Mass. Oct. 13, 2010); and DeGiacomo v. CitiMortgage, Inc. (In re Nistad), Adv. No. 11-1179, 2012 WL 272750 (Bankr. D. Mass. Jan. 30, 2012).

            Wells Fargo opposed the summary judgment motion and countered with a cross-motion for summary judgment. Wells Fargo challenged the Trustee’s assertion of bona fide purchaser status, arguing that he “had actual and/or constructive knowledge of the Mortgage . . . .” Additionally, Wells Fargo disputed that Massachusetts law requires strict compliance with formalities in the execution of mortgage acknowledgments.

            The bankruptcy court conducted a hearing on the Trustee’s motion for summary judgment and Wells Fargo’s cross-motion and opposition in February 2013. During the course of the hearing, the Trustee reiterated that the acknowledgment was defective because it failed to unequivocally and unambiguously identify who appeared in front of the notary, in what capacity, and whether the execution of the Mortgage was the free act and deed of the mortgagors.

            Wells Fargo countered that the use of the term “by” in the context of the subject acknowledgment meant that the Debtors “were acting by or through or by the agency of their power of attorney Shannon Obringer.” It stressed that “[a]ny objective bona fide purchaser . . . would not be confused that it was Shannon Obringer [who] was appearing before the notary,” but neglected to address whether or how the acknowledgment expressed the voluntary nature of the grantors’ execution of the Mortgage. Although Wells Fargo rejected the notion that Massachusetts is a “strict compliance state,” it contended that the acknowledgment in this case satisfied either a substantial or strict compliance standard.

            The court denied the Trustee’s motion for summary judgment and granted Wells Fargo’s cross-motion, ruling from the bench as follows:

I just don’t find this notarization to be ambiguous. . . . I read the language to mean that these two debtors appeared through a power of attorney and that the holder of that power of attorney personally stood before the notary.

Now, granted it would have been nice if the he/she/it/their references further down were properly attended to, but until you get to that point, it’s clear to me that it’s the holder of the power of attorney that is standing before the notary. And I don’t think that the failure to eliminate the extraneous words he/she/their/its creates sufficient ambiguity or any ambiguity really, other than shaking one’s head and thinking, well, I should have crossed out some of these words, but I had no doubt on reading it who was standing there in front of the notary.

Giroux is different. In Giroux no one was listed as standing in front of the notary and in Bower there was clearly the same ambiguity. And in Nistad it was actually somebody else’s name. That’s not what we have here.

So I don’t think I need to reach the question of whether there needs to be substantial or strict compliance, although I think this — some room for arguing that in Massachusetts the standard ought to be substantially strict, but it doesn’t really make any difference on my reading. I don’t read the notarization to be defective and accordingly I am compelled to grant summary judgment to the defendant.

Thereafter, the court entered an order denying the Trustee’s motion for summary judgment and a separate order, granting Wells Fargo’s cross-motion for summary judgment. This appeal ensued.

            On appeal, the Trustee maintains that the bankruptcy court erred when it denied his motion for summary judgment and granted Wells Fargo’s cross-motion. Continuing to rely on Giroux, Bower, and Nistad, supra, he argues that the Mortgage is materially defective, due to “[t]hree fatal flaws”: (1) the use of the phrase “personally appeared,” when in fact it is undisputed the Debtors did not appear; (2) the failure to specify in the appropriate blank space the method by which the notary identified the signer (or signers) of the Mortgage; and (3) the failure to indicate whose free act and deed the notary was verifying. He continues to insist that in Massachusetts, every acknowledgment must unequivocally express whether the instrument was signed freely by the grantor. As in the proceedings below, Wells Fargo urges that “[t]he word ‘by’ unquestionably indicates through which individual the mortgagors appeared.” There is also no question, Wells Fargo argues, that the execution was the free act and deed of Obringer, on behalf of the Debtors. Wells Fargo warns that voiding this Mortgage “may have grave consequences.”

JURISDICTION

            A bankruptcy appellate panel is “duty-bound” to determine its jurisdiction before proceeding to the merits even if not raised by the litigants. See Boylan v. George E. Bumpus, Jr. Constr. Co. (In re George E. Bumpus, Jr. Constr. Co.), 226 B.R. 724, 725-26 (B.A.P. 1st Cir. 1998). A panel may hear appeals from “final judgments, orders and decrees [pursuant to 28 U.S.C. § 158(a)(1)] or with leave of the court, from interlocutory orders and decrees [pursuant to 28 U.S.C. § 158(a)(3)].” Fleet DataProcessing Corp. v. Branch (In re Bank of New England Corp.), 218 B.R. 643, 645 (B.A.P. 1st Cir. 1998) (internal quotation marks omitted). “An order granting summary judgment, where no counts remain, is a final order.” Frykberg v. JPMorgan Chase Bank (In re Frykberg), 490 B.R. 652, 656 (B.A.P. 1st Cir. 2013) (citation omitted). Thus, we have jurisdiction.

STANDARD OF REVIEW

            We review an order granting summary judgment de novo. DCC Operating, Inc. v. Rivera Siaca (In re Olympic Mills Corp.), 477 F.3d 1, 14 (1st Cir. 2007) (citing Razzaboni v. Schifano (In re Schifano), 378 F.3d 60, 66 (1st Cir. 2004)).

DISCUSSION

I.        The Standards

            A.        The Summary Judgment Standard

            “In bankruptcy, summary judgment is governed in the first instance by Bankruptcy Rule 7056.” Desmond v. Varrasso (In re Varrasso), 37 F.3d 760, 762 (1st Cir. 1994). “By its express terms, the rule incorporates into bankruptcy practice the standards of Rule 56 of the Federal Rules of Civil Procedure.” Id.; see also Fed. R. Bankr. P. 7056; Fed. R. Civ. P. 56. 5 “It is apodictic that summary judgment should be bestowed only when no genuine issue of material fact exists and the movant has successfully demonstrated an entitlement to judgment as a matter of law.” In re Varrasso, 37 F.3d at 763 (citing Fed. R. Civ. P. 56(c)). The “mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986).

            B.        Section 544(a) and The Trustee’s Avoidance Powers

            Referred to as the “strong arm” clause, § 544(a) “gives a trustee various rights and powers, one of which is the power to avoid a transfer by the debtor of an unperfected security interest in real property to the same extent a bona fide purchaser could avoid the transfer, regardless of any actual knowledge of the trustee.” In re Nistad, 2012 WL 272750, at *3 (citing 11 U.S.C. § 544(a)(3); 6 Me. Nat’l Bank v. Morse (In re Morse), 30 B.R. 52, 54 (B.A.P. 1st Cir. 1983)). “While a trustee’s avoidance power is not subject to any actual knowledge he or she may possess, it is subject to constructive knowledge.” In re Nistad, 2012 WL 272750 at *5. “The extent of the [t]rustee’s avoidance powers are determined by state law.” Carrion v. USDA Rural Hous. Serv. (In re Roldan), Adv. No. 11-00094, 2012 WL 2221410, at *7 (Bankr. D.P.R. June 13, 2012) (citations omitted).

            C.        Acknowledgments: Their Purpose and Requirements in Massachusetts 7

            “An acknowledgment is the formal statement of the grantor to the official authorized to take the acknowledgment that the execution of the instrument was his free act and deed.” McOuatt v. McOuatt, 69 N.E.2d 806, 810 (Mass. 1946). Mass. Gen. Laws ch. 183, § 29 provides:

No deed shall be recorded unless a certificate of its acknowledgment or of the proof of its due execution, made as hereinafter provided, is endorsed upon or annexed to it, and such certificate shall be recorded at length with the deed to which it relates . . . .

Mass. Gen. Laws ch. 183, § 29. Thus, “if it is desired to record the deed in order to charge the world with notice of the conveyance, then it is necessary that the deed be acknowledged and that a certificate reciting this fact be attached to the deed.” McOuatt, 69 N.E.2d at 809. “Doubtless, that is the principal function of a certificate of acknowledgment.” Id. (citations omitted). “When ‘an instrument of defeasance, not being acknowledged’ is ‘improvidently admitted to registration’ then ‘the record does not operate as constructive notice’ of the conveyance.” Allen v. Allen, No. 10 MISC 420492 GHP, 2013 WL 139318, at *10 (Mass. Land Ct. Jan. 10, 2013) (quoting Graves v. Graves, 72 Mass. 391, 392-93 (1856)).

            Mass. Gen. Laws ch. 183, § 30 requires certain formalities in the execution of an acknowledgment. That statute provides, in pertinent part:

The acknowledgment of a deed or other written instrument required to be acknowledged shall be by one or more of the grantors or by the attorney executing it. The officer before whom the acknowledgment is made shall endorse upon or annex to the instrument a certificate thereof. Such acknowledgment may be made–

. . .

(b) If without the commonwealth, in any state, territory, district or dependency of the United States, before a justice of the peace, notary public, magistrate or commissioner appointed therefor by the governor of this commonwealth, or, if a certificate of authority in the form prescribed by section thirty-three is attached thereto, before any other officer therein authorized to take acknowledgments of deeds.

Mass. Gen. Laws ch. 183, § 30(b). “It is well established law in Massachusetts that a defectively acknowledged mortgage cannot be legally recorded, and if recorded the mortgage does not, as a matter of law, provide constructive notice to future purchasers.” In re Bower, 2010 WL 4023396, at *5.

            In McOuatt, the seminal case regarding the validity of acknowledgments in Massachusetts, the Supreme Judicial Court instructed that in an acknowledgment “[n]o particular words are necessary as long as they amount to an admission that [the grantor] has voluntarily and freely executed the instrument.” McOuatt, 69 N.E.2d at 810 (citations omitted). In that case, the court was called upon to construe a deed from the grantor to his wife, which was taken while the grantor was near death. According to the court:

McOuatt told the physician that he knew what he was about to do, that he was to sign papers to protect his wife, and that he had been intending to do this for some time. The defendant obtained a deed which the attorney had prepared and brought it to the hospital. She told her husband what it was, and in her presence a hospital clerk, who was a notary public, asked him if he knew what he was about to sign. He said that he did and that he was turning over his property to his wife. He executed the deed by making an X . . . . At some time thereafter he requested the defendant to have the deed recorded, which she did. He died some eight hours after he executed the deed.

Id. at 808. Following a review of a master’s report, the court was “unable to discover anything . . . that would justify a conclusion that McOuatt acknowledged the instrument of conveyance to be his free act and deed.” Id. at 810. The court ruled that the “only conclusion that [could] be reached from the report [was] that the deed was not duly acknowledged as required by the statute.” Id. (citation omitted). Thus, “[n]o effect [could] be given to it.” Id.

            As one Massachusetts bankruptcy court stated, McOuatt signaled the Supreme Judicial Court’s “adherence to a stringent requirement, namely that a grantor or mortgagor expressly state to the notary that the execution of the instrument was his or her free act or deed.” Giroux, 2009 WL 1458173, at *8 (emphasis added). Thus, “Massachusetts requires, in addition to the other formalities associated with acknowledgments, an affirmative declaration by the grantor or mortgagor.” Id. Relying heavily on McOuatt, the bankruptcy courts in both Giroux and Bower held that the omission of the grantor’s name on the acknowledgment form was a material defect that, despite the recording of the instrument, rendered the instrument incapable of providing constructive notice of the conveyance to a subsequent purchaser for value. See Giroux, 2009 WL 1458173, at *7; Bower, 2010 WL 4023396, at *3. Similarly, in Nistad, where an incorrect name was inserted in the identification clause of the acknowledgment, the bankruptcy court concluded that the mortgage was materially defective. Nistad, 2012 WL 272750, at *3-4.

            Although the Massachusetts statutory scheme does not require specific language in an acknowledgment, it provides forms in an appendix which “may be used.” Mass. Gen. Laws ch. 183, § 42. These include a form for the acknowledgment of an individual acting by an attorney. See Mass. Gen. Laws ch. 183 App., Form (14). The language of the statutory form reflects that when a person is acting through an attorney, the attorney should acknowledge that he executed the instrument as the free act and deed of the grantor.8  See supra note 8; see also Byers Bros. & Co. Live Stock Comm. Corp. v. McKenzie, 239 P. 525, 525 (N.M. 1925) (discussing statutory form for New Mexico and explicitly stating that when a natural person is acting by an attorney, the attorney must acknowledge that he executed the instrument as the free act and deed of his principal).

II.       The Standards Applied

            Here, the parties did not use Form (14), the Massachusetts statutory form for the acknowledgment of an individual acting in a representative capacity. Instead, they adapted a pre-printed form for taking the acknowledgment of an individual acting on his or her own behalf. We are therefore confronted with questions concerning the acknowledgment’s sufficiency under Massachusetts law.

            Our examination logically begins with the first paragraph of the acknowledgment, which recites, in pertinent part: “[p]ersonally appeared Shawn G. Kelley and Annemarie Kelley by Shannon Obringer as Attorney in Fact.” (emphasis added). Mindful that “by” means “through the agency or instrumentality of,” see http://www.merriam-webster.com/dictionary/by, we are unpersuaded by the Trustee’s first argument, that this language is so confusing that “one is forced to guess who appeared before the notary public.” Although inartful, the challenged language sufficiently signals that Obringer was present in a representative capacity.                                     Our analysis next proceeds to the remaining paragraphs of the acknowledgment, which provide:

            [p]roved to me through satisfactory evidence of identification which was/were [left blank]

to be the person(s) whose name(s) is/are signed on the preceding document, and acknowledged to me that he/she/they signed it voluntarily for its stated purpose.

We are similarly unconvinced by the Trustee’s second argument, that the notary’s failure to fill in the blank provided for specifying the evidence of identification, which was presented to the notary, standing alone, is a “fatal flaw.” Courts already reject this argument, on the ground that the requirement for “satisfactory evidence of identity” is imposed only by Revised Executive Order No. 455 (04-04), and not by statute. In re Dessources, 430 B.R. 330, 335 (Bankr. D. Mass. 2010). Because the Executive Order does not supersede anything in Mass. Gen. Laws ch. 183, § 42, or the forms set forth in the appendix thereto, the argument that the blank identifiers affect the validity of the acknowledgment is easily dispatched.

            We agree with the Trustee’s third argument, however, namely that the foregoing language fails to unequivocally express that the execution of the Mortgage was the free act and deed of the principals, i.e., the Debtors, and that this flaw is, indeed, fatal. Here, the preprinted form utilized by the notary combined with her failure to attend to the blank space and the inapplicable verbiage creates ambiguity concerning whether the execution of the Mortgage was the voluntary act of the Debtors. Although the acknowledgment contains a recitation that the Mortgage was signed “voluntarily for its stated purpose,” we are left to speculate whether the voluntariness relates to the principals (the Debtors) or to the attorney-in-fact (Obringer). Wells Fargo’s assertion that the acknowledgment was clearly Obringer’sfree act and deed is not only unsupported by the language of this acknowledgment, but, more importantly, misapprehends the essential requirement for a valid acknowledgment of an individual acting in a representative capacity: namely, that the attorney must acknowledge that he executed the instrument as the free act and deed of the grantor. Moreover, a review of the language of this acknowledgment does not justify a conclusion that Obringer ever said anything to the one who made out the certificate of acknowledgment to indicate that the Mortgage was the voluntary act of the Debtors.

            We therefore conclude that the acknowledgment is materially and patently defective under Massachusetts law, such that it is incapable of providing constructive notice to a subsequent purchaser for value. To conclude otherwise would undermine the acknowledgment’s very purpose. Thus, the bankruptcy court erred in denying the Trustee’s motion for summary judgment on his complaint to avoid the Mortgage pursuant to his § 544 strong arm powers and in granting Wells Fargo’s cross-motion for summary judgment.

 CONCLUSION

              For the foregoing reasons, we REVERSE the order granting Wells Fargo’s cross-motion for summary judgment, and REVERSE the order denying the Trustee’s motion for summary judgment. We REMAND to the bankruptcy court for the entry of orders consistent with this opinion.

Footnotes:

1 “Fannie Mae/Freddie Mac Massachusetts” preprinted form.
2 The Trustee also alleged that because Obringer was not in receipt of the actual power of
attorney on the date that she executed the Mortgage, her execution was unauthorized. Because the
Trustee did not pursue this claim in the proceedings below or on appeal, we need not address it herein.
See Evans Cabinet Corp. v. Kitchen Int’l, Inc., 593 F.3d 135, 148 n.20 (1st Cir. 2010) (stating argument
not raised in opening brief is waived).
3 Unless otherwise indicated, the terms “Bankruptcy Code,” “section” and “§” refer to Title 11
of the United States Code, 11 U.S.C. §§ 101, et seq., as amended. All references to “Bankruptcy Rule”
are to the Federal Rules of Bankruptcy Procedure, and all references to “Rule” are to the Federal Rules of
Civil Procedure.
4 The Trustee subsequently amended the complaint to accurately reflect the name of the
defendant, among other things.
5 Fed. R. Civ. P. 56(a) provides, in pertinent part, that “[t]he court shall grant summary
judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law. The court should state on the record the reasons for granting or
denying the motion.” Fed. R. Civ. P. 56(a).
6 Section 544(a) provides:
The trustee shall have, as of the commencement of the case, and without regard to any
knowledge of the trustee or of any creditor, the rights and powers of, or may avoid any
transfer of property of the debtor or any obligation incurred by the debtor that is voidable
by–
. . . .
(3) a bona fide purchaser of real property, other than fixtures, from the debtor,
against whom applicable law permits such transfer to be perfected, that obtains
the status of a bona fide purchaser and has perfected such transfer at the time of
the commencement of the case, whether or not such a purchaser exists.
11 U.S.C. § 544(a)(3).
7 The parties did not raise a choice-of-law issue. Moreover, the Mortgage provides that it “shall
be governed by federal law and the law of the jurisdiction in which the Property is located.”
8 Form (14) provides:
(Caption specifying the state and place where the acknowledgment is taken.)
On this ______ day of _______ 19__, before me personally appeared A B, to me known
to be the person who executed the foregoing instrument in behalf of C D, and
acknowledged that he executed the same as the free act and deed of said C D.
(Signature and title of officer taking acknowledgment. Seal, if required.)
Mass. Gen. Laws ch. 183 App., Form (14).
9 We note that the acknowledgment form provided by Revised Executive Order No. 455 (04-
04), promulgated by the Governor of the Commonwealth of Massachusetts and cited by the parties in
their respective briefs, is at odds with Form (14). Revised Executive Order No. 455 provides, in
pertinent part:
(d) A notary shall take the acknowledgment of the signature or mark of persons acknowledging
for themselves or in any representative capacity by using substantially the following form:
On this ____ day of ______, 20__, before me, the undersigned notary public, personally
appeared ________ (name of document signer), proved to me through satisfactory
evidence of identification, which were ________, to be the person whose name is signed
on the proceeding or attached document, and acknowledged to me that (he) (she) signed
it voluntarily for its stated purpose.
(as partner for ______, a partnership)
(as _______ for ______, a corporation)
(as attorney in fact for ______, the principal)
(as ______ for ______, (a) (the) ______)
___________________ (official signature and seal of notary)
Revised Executive Order No. 455 (04-04) § 5(d). Unlike Form (14), the Executive Order form does not
clearly express that the voluntariness of the execution relates to the principal when the execution is
performed by an individual acting in a representative capacity. This failure reflects the danger of
attempting to craft a one-size-fits-all acknowledgment form. In any event, Form (14) supercedes the
Executive Order form. See Revised Executive Order No. 455 § 1(c) (stating “[n]othing in this Executive
Order supercedes the provisions of any court rule, including court forms, Massachusetts General Law,
including but not limited to, chapter 183, section 42 or the forms set forth in the appendix thereto”).

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK

In the matter of:
EDWIN RAMOS AND MICHELLE Case No. 10-23019-rdd
AVA STOUBER-RAMOS, Chapter 7
Debtors.
– – – – – – – – – – – – – – – – – – – – – – – – – – – x

MODIFIED BENCH RULING ON
MOTION FOR CONTEMPT AGAINST BANK OF AMERICA, NA

APPEARANCES:

For the Debtor: MICHAEL H. SCHWARTZ, ESQ.
Michael H. Schwartz & Associates, PC
One Water Street
White Plains, NY 10601

Hon. Robert D. Drain

I have before me a motion by the debtors, Mr. and Mrs.
Ramos, for an order holding their mortgage lender, Bank of
America, in contempt for violation of their discharge, under
sections 524 and 727 of the Bankruptcy Code. This case was
reopened under section 349 of the Bankruptcy Code for the sole
purpose of permitting the debtors to bring this motion. The
motion to reopen was on notice to Bank of America; the present
motion also was served on Bank of America, including on its
general counsel.

Both motions asserted a course of conduct pursuant to
which Bank of America, with knowledge of the debtors’
bankruptcy and discharge (it was a scheduled creditor),
continued to send the debtors monthly statements in which it
sought to collect its debt from them. Those efforts, as will
be discussed in a moment, were not confined to informing the
debtors what they needed to pay or otherwise do in order to
retain their house, on which Bank of America asserts a lien;
they also clearly involved collection on the debt personally
from the debtors. In addition, the motions referred to
numerous phone calls from agents of Bank of America who sought
to collect on the debt personally from the debtors.
Bank of America has not objected to the motion and
has not appeared at today’s hearing to controvert the motion’s
allegations or otherwise explain its conduct.

Although Bank of America was served with both
motions, and the debtors’ counsel has represented that he has
diligently attempted to contact Bank of America to have it
cease sending such statements and making such phone calls, I
have been provided with a recent statement showing that the
billing activity has continued since the service of the
motion.

The law is clear that the Court has the power to
enforce the discharge which is set forth in this case in an
order that is attached to this motion, and that a violation of
the discharge under section 524(a)(2) of the Bankruptcy Code
is punishable by contempt. See In re Nassoko, 405 B.R. 515,
520 (Bankr. S.D.N.Y. 2009), and the cases cited therein. The
Nassoko case also makes it clear that the enforcement of the
discharge order may be made by means of a contempt motion as
opposed to an adversary proceeding that would be governed by
the Part VII rules of the Bankruptcy Code, id. at 526, citing
among other cases In re Texaco Inc. 182 B.R. 937, 945-46
(Bankr. SDNY 1995). So, procedurally, this motion is proper.
For a finding of contempt, the burden rests with the
movant to show by clear and convincing evidence that the
offending entity has knowledge, actual or constructive, of the
discharge and willfully violated it by continuing with the
activity complained of. Id. at 520 quoting In re Torres, 367
B.R. 478, 490 (Bankr. S.D.N.Y. 2007). And Nassoko also stands
for the proposition that compensatory damages, in addition to,
of course, sanctions, may be awarded as a sanction for civil
contempt if a party willfully violates the section 524(a)(2)
injunction.

Attorney’s fees may also be awarded if, in addition
to willfully disobeying the Court’s order, the party acts in
bad faith, vexatiously, wantonly or for oppressive reasons.
Id., citing In re Dabrowski, 257 B.R. 394, 416 (Bankr.
S.D.N.Y. 2001).

Here, in this context for this type of relief,
willfulness consists of knowingly going forward with
collection activity in respect of an in personam debt knowing
or having reason to know that the debtor was in bankruptcy and
has received a discharge. That’s certainly alleged here, and
it’s consistent with the facts, which show that Bank of
America was provided with notice of both the bankruptcy and
the discharge as well as the fact that the collection activity
continued after this case was reopened for the specific
purpose of enforcing the discharge and after this motion was
filed.

The lender here, which asserts a mortgage on the
debtors’ house, has the ability to enforce that mortgage and
may inform a debtor of that right and may give a debtor
information to establish how the debtor can avoid the
enforcement of the mortgage, i.e. paying the debt or
negotiating a settlement or modification of the debt. That is
because a discharge is of in personam debt and does not affect
a creditor’s lien rights. However, and the law is clear on
this, unless the lender’s communications with the debtor
clearly and conspicuously make that distinction – that is, if
the communications to the debtor instead simply say, “You need
to pay this debt”, the lender will be in contempt of the
discharge injunction. See, for example, In re Stuart, 2010
Bankr. Lexis 2041 at *3 (Bankr. N.D. Cal., June 21, 2010); In
re Harlan, 402 B.R. 703, 714-16 (Bankr. W.D. Va., 2009); In re
Anderson, 348 B.R. 652, 661 (Bankr. D. Del. 2006); In re
Curtis, 322 B.R. 470, 484-85 (Bankr. D. Mass 2005).

This distinction should be particularly clear to
Bank of America, since the District Court for the Western
District of Virginia has twice ruled that where Bank of
America did clearly make notice in its billing to a debtor
that the bill was solely for information purposes in respect
of the enforcement of the lien, as opposed to for any other
purpose, and it made it clear that the debt itself was
discharged, it would not be in contempt of a discharge order,
but otherwise would have been. See Pearson v. Bank of
America, 2012 U.S. Dist. LEXIS 94850 at *14-16 (W.D. Va. July
10, 2012) and Anderson v. Bank of America, 2012 U.S. Dist.
LEXIS 95309 at *8-10 (W.D. Va. July 11, 2012).

I have reviewed the statements sent by Bank of
America to the debtors that are attached as exhibits to the
contempt motion before me, going through June 1, 2013. Each
of them fails to make the distinction that Bank of America
obviously knows how to make because they made it in the
Pearson and Anderson cases that I just cited. They say
nothing about the debtors’ discharge. They say nothing about
the fact that the bill is being sent for information purposes
and only in respect of the bank’s lien interest on the house.
And, in addition, they state, among other things, “Bank of
America N.A. will proceed with collection action until your
account is brought fully current.” They do that on each bill.
And it says, “You are responsible for paying the bill.”
Obviously, that language seeks to enforce a debt not simply in
respect of the house upon which Bank of America has or asserts
a mortgage but, instead, against the debtors directly and,
therefore, it is in contempt of the discharge order – clearly.

I would also note that to the extent that the
debtors through their counsel have represented to me at
today’s hearing that the loan has been sold to someone else,
that very sale could be also in violation of the discharge
order. See In re Nassoko, 405 B.R. 520-22.
Clearly the attorney’s fees here are warranted as
actual damages.

In addition, particularly given that Bank of America
knows how to do this properly, as evidenced by the two Western
District of Virginia cases that I’ve cited, coercive sanctions
are warranted, and they’re especially warranted given the fact
that Bank of America apparently has ignored this matter
notwithstanding being served twice and having been given an
opportunity to correct the problem, which it has not done.
Instead, it has continued to send the bills. So it will be
sanctioned $10,000.00 a month until it corrects this matter
payable to the debtors through their attorney. My reasoning
behind that sanction is that this is not just a stupid
mistake. This is a policy. And frankly, $10,000.00 a month
plus attorney’s fees may not mean much to Bank of America, but
at least it will send a message that other attorneys may pick
up on.

Dated: White Plains, New York
October 1, 2013
/s/Robert D. Drain
UNITED STATES BANKRUPTCY JUDGE

H/T Rob Harrington

(P. 13)

The Senate Subcommittee Investigation and Findings
Washington Mutual Bank was the largest bank failure in history. AC ¶ 10. In April, 2010, the U.S. Senate Subcommittee on Investigations initiated an investigation into “some of the causes and consequences of the financial crisis,” focusing squarely on WaMu’s origination and securitization of mortgage loans “as a case study in the role of high risk loans in the U.S. financial crisis.” Shulman Dec. Ex. A (Wall Street and the Financial Crisis: Hearing before the Permanent Subcomm. On Investigations, April 13, 2010, Hearing Ex. 1a); AC ¶ 65. The Senate Subcommittee found that “WaMu selected and securitized loans that it had identified as likely to go delinquent,, without disclosing its analysis to investors who bought the securities,” and that WaMu “securitized loans tainted by fraudulent information, without notifying purchasers of the fraud that was discovered.”