- King Solomon's
- Cut to the Chase
- Modern World
- Stress Of It All
The Ibanez Time Bomb
by Elizabeth Renuart
- - -
by Ellen Brown
- - -
Underwater and Not Walking Away: Shame, Fear, and Social Management of a Housing Crisis
by Brent T. White
- - -
Where's The Note, Who's The Holder by Hon. Samuel L. Bufford, Glen Ayer
- - -
The Great Collapse
by Kurt Eggert Connecticut Law Review
- - -
by James R. Barth, Tong Li, et al., Milken Institute
- - -
HAMP=Foreclosure so HAMP is a fraud
by Patrick Pulatie
- - -
The Dream Deferred
by Thomas Brom, California Lawyer
- - -
Send us an email
How to chase Chase
2. RESOURCES Pleadings, Orders, and Exhibits
On this page you will find descriptions and links to various pleadings, orders, and exhibits filed by attorneys as well as individuals representing themselves. Where the outcome is known, that information is included. These documents are public records and are made available for your information, but their accuracy, competency, and effectiveness have not been verified. Only a judge can rule on a pleading and only an appellate court opinion that is certified for publication can be cited as precedent. That said, it can be both educational and entertaining to see how the great race is unfolding in the historic controversy of People v. Banks. For an entertaining public outing of history's all-time greatest pickpockets, go see the documentary "Inside Job."
Naranjo v. SBMC Mortgage, 2012 U.S. Dist. LEXIS 103735, Case No. 11-cv-2229-L(WVG)
M. James Lorenz, District Judge, U.S. District Court, Southern District of California
Deborah Gutierrez, Penelope Bergman, Los Angeles, CA, attorneys for Carmen Naranjo
"The vital allegation in this case is the assignment of the loan into the WAMU Trust was not completed by May 30, 2006 as required by the Trust Agreement. This allegation gives rise to a plausible inference that the subsequent assignment, substitution, and notice of default and election to sell may also be improper. Defendants wholly fail to address that issue. This reason alone is sufficient to deny Defendants' motion with respect to this issue."
Ansanelli v. JPMorgan Chase, 2011 WL 1134451, Case No. CV10-03892 (WHA)
William Alsup, District Judge, U.S. District Court, Northern District of California
Cotchett Pitre & McCarthy, Burlingame, CA, attorneys for Angela Ansanelli
Chase took over servicing two Ansanelli loans after it purchased WaMu's assets. Plaintiffs tried to negotiate a loan modification and landed in loan mod hell. Chase moved to dismiss the SAC, and plaintiff's lawyers prevailed on almost every count. The court refused to dismiss causes of action for breach of contract, fraud and deceit, negligent misrepresentation, RESPA, and unfair business practices (Cal. B&P Code sec. 17200).
Additional motions were filed, plaintiffs filed a Fourth Amended Complaint on May 12, 2011, and defendants filed an Answer. At a mediation session on June 22, 2011, the case was settled.
Bakenie v. JPMorgan Chase, Case No. SACV12-0060 JVS
U.S. District Court, Central District of California (Santa Ana)
Joseph Arthur Roberts, Newport Beach, CA, attorney for Ernest Bakenie
Plaintiff alleges that Chase is engaged in the business practice of deceiving bankruptcy judges, creditors, debtors, and attorneys as to Chase's status as a secured creditor in thousands of bankruptcy cases filed nationwide.
Through fabricated assignments, endorsements and affidavits that purport to transfer Deeds of Trust, notes and the rights to money due under thousands of non-negotiable promissory notes, Chase is playing "hide-and-seek" with debtors and judges.
The 171-paragraph complaint seeks an order vacating all Bankruptcy orders, claims and awards granted based on Chase's misrepresentations and deceptive business practices.
Balderas v. Countrywide, Case No. 10-55064
Opinion by Alex Kozinski, Chief Judge, Ninth Circuit Court of Appeals
Kevin Griffin, Griffin Johnson LLP, Dana Point, CA, attorney for Victor Balderas
Plaintiffs alleged that Countrywide gave them defective copies of the TILA Notice of Right to Cancel, which remained at the bank rather than were given to Plaintiffs. Therefore they were entitled to rescind within three years, rather than three days of signing the papers.
Chief Judge Kozinski's opinion begins, "The Balderases allege that they are immigrants who were rooked by a bank that signed them up for loans it knew they couldn't afford, on terms they didn't agree to."
The opinion continues:
Webster's New International Dictionary defines "deliver" as "to give or transfer" and "to yield possession or control of." Webster's New International Dictionary 693 (2d ed. 1939). We interpret "deliver" to mean that the consumer must be allowed to keep the notice. When you have pizza delivered, you don't sign for it and let the deliveryman take it back to the restaurant. And when a newspaper boy delivers a paper, he doesn't show you the headlines and then return it to the printer.
Countrywide claims that the Balderases didn't allege enough facts to rebut the signed notice's presumption of delivery. But presumptions are not rebutted by allegations; they are rebutted by evidence. And the time for presenting evidence has not yet arrived. Complaints need only allege facts with sufficient specificity to notify defendants of plaintiffs'
claims. Here, the Balderases pleaded that the notice they were given was defective...
As we've said before, "so long as the plaintiff alleges facts to support a theory that is not facially implausible, the court's skepticism is best reserved for later stages of the proceedings when the plaintiff's case can be rejected on evidentiary grounds." In re Gilead Sciences Securities Litigation, 536 F.3d 1049, 1057 (9th Cir. 2008). Here, the Balderases clearly alleged in their complaint that they were never given a Notice of Right to Cancel that complied with TILA. If they can prove up this allegation at trial, they'll win. A complaint containing allegations that, if proven, present a winning case is not subject to dismissal under 12(b)(6), no matter how unlikely such winning outcome may appear to the district court.
Carswell v. JPMorgan Chase, Dist. Ct. No. CV10-5152; 9th Circuit No. 11-55423
George Wu, Judge, U.S. District Court, Central District of California, Los Angeles
Douglas Gillies, attorney for Margaret Carswell
Plaintiff sued to halt a foreclosure initiated by JPMorgan Chase and California Reconveyance Co. on the grounds of failure to contract, wrongful foreclosure, unjust enrichment, RESPA and TILA violations, and fraud. She asked for quiet title and declaratory relief. Chase responded with a Motion to Dismiss. At a hearing on September 30, 2010, Judge Wu granted defendants' motion to dismiss with leave to amend. Plaintiff's First Amended Complaint was filed on October 18. It begins:
It was the biggest financial bubble in history. During the first decade of this
century, banks abandoned underwriting practices and caused a frenzy of real estate
speculation by issuing predatory loans that ultimately lowered property values in
the United States by 30-50%. Banks reaped the harvest. Kerry Killinger, CEO of
Washington Mutual, took home more than $100 million during the seven years that
he steered WaMu into the ground. Banks issued millions of predatory loans
knowing that the borrowers would default and lose their homes. As a direct,
foreseeable, proximate result, 15 million families are now in danger of foreclosure.
If the legions of dispossessed homeowners cannot present their grievances in the
courts of this great nation, their only recourse will be the streets.
Chase responded with yet another Motion to Dismiss, Carswell filed her Opposition to the motion, and at hearing on January 6, 2011, Judge Wu asked Plaintiff for an Offer of Proof. Her Offer of Proof included written argument, 19 exhibits, and a powerpoint presentation. Judge Wu granted Chase's Motion to Dismiss, and Carswell appealed to the 9th Circuit (Case No. 11-55423).
After a hearing on November 7, 2012, the Ninth Circuit Court of Appeal affirmed the District Court's order of dismissal.
Khast v. Washington Mutual, JPMorgan Chase, and CRC, Case No. CV10-2168 IEG
Irma E. Gonzalez, Chief Judge, U.S. District Court, Southern District of California
Kaveh Khast in pro se
A loan mod nightmare where Khast did everything right except laugh out loud when WaMu told him that he must stop making his mortgage payments for 90 days in order to qualify for a loan modification. As Khast leaped through the constantly shifting hoops tossed in the air, first by WaMu, then by Chase, filing no less than four applications, Chase issued a Notice of Trustee's Sale.
Khast filed a pro se complaint in federal court which included a request for a Temporary Restraining Order. The District Court granted a TRO to stop the sale. The court wrote that the conduct by WAMU appeared to be "immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers," and thus satisfied the "unfair" prong of California's Unfair Competition Law, Cal. Bus.&Prof.Code §17200. Plaintiff stated that he possessed documents which supported his contention that Defendant WAMU instructed him to purposefully enter into default and assured him that, if he did so, WAMU would restructure his loan. Accordingly, Plaintiff demonstrated that he was likely to succeed on the merits of his claim.
The court also relied upon the doctrine of promissory estoppel, whereby a promisor is bound when he should reasonably expect a substantial change of position, either by act or forbearance, in reliance on his promise. He who by his language or conduct leads another to do what he would not otherwise have done shall not subject such person to loss or injury by disappointing the expectations upon which he acted.
At a later hearing, the court denied a preliminary injunction when Chase argued that WaMu's immoral conduct was a liability that was not assumed by Chase under the Purchase and Assumption Agreement dated September 25, 2008. The court's TRO on October 26 nevertheless provides borrowers with ammunition to raise claims of unfair competition and promissory estoppel.
Plaintiff's claims under TILA were dismissed because the 3-year Statute of Limitations had passed and Plaintiff did not allege facts in support of suspending the limitations period under the doctrine of equitable tolling. The Fair Debt Collections Practices Act did not apply because mortgagees, servicers, and trustees are not "debt collectors" subject to FDCPA. The court declined to exercise supplemental jurisdiction under 28 U.S.C. Sec. 1367 over Plaintiff's state law claims.
Saxon Mortgage v. Hillery, Case No. C-08-4357
Edward M. Chen, U.S. Magistrate, Northern District of California
Thomas Spielbauer, attorney for Ruthie Hillery
Hillery obtained a home loan from New Century secured by a Deed of Trust, which named MERS as nominee for New Century and its successors. MERS later attempted to assign the Deed of Trust and the promissory note to Consumer. Consumer and the loan servicer then sued Hillery. The court ruled that Consumer must demonstrate that it is the holder of the deed of trust and the promissory note. In re Foreclosure Cases, 521 F. Supp. 2d 650, 653 (S.D. Oh. 2007) held that to show standing in a foreclosure action, the plaintiff must show that it is the holder of the note and the mortgage at the time the complaint was filed. For there to be a valid assignment, there must be more than just assignment of the deed alone; the note must also be assigned. "The note and mortgage are inseparable; the former as essential, the latter as an incident...an assignment of the note carries the mortgage with it, while an assignment of the latter alone is a nullity." Carpenter v. Longan, 83 U.S. 271, 274 (1872).
There was no evidence that MERS held the promissory note or was given the authority by New Century to assign the note to Consumer. Without the note, Consumer lacked standing. If Consumer did not have standing, then the loan servicer also lacked standing. A loan servicer cannot bring an action without the holder of the note. In re Hwang, 393 B.R. 701, 712 (2008).
Serrano v. GMAC Mortgage, Case No. 8:09-CV-00861-DOC
David O. Carter, Judge, U.S. District Court, Central District of California, Los Angeles
Moses S. Hall, attorney for Ignacio Serrano
Plaintiff alleged in state court that GMAC initiated a non-judicial foreclosure sale and sold his residence without complying with the notice requirements of Cal. Civil Code Sec. 2923.5 and 2924, and without attaching a declaration to the 2923.5 notice under penalty of perjury stating that defendants tried with due diligence to contact the borrower. Defendants removed the case to federal court on the basis of diversity jurisdiction. The District Court granted defendants' motion to dismiss without prejudice, and described in detail the defects in the Complaint with directions how to correct the defects. Plaintiff filed his Second Amended Complaint on 4/01/2010.
Sharma v. Provident Funding, Case No. 3:2009-cv-05968
Vaughn R Walker, Judge, U.S. District Court, Northern District of California
Marc A. Fisher, attorney for Anilech and Parma Sharma
Defendants attempted to foreclose and plaintiffs sued in federal court, alleging that defendants did not contact them as required by Cal Civ Code § 2923.5. In considering plaintiffs' request for an injunction to stop the foreclosure, the court found that plaintiffs had raised "serious questions going to the merits" and would suffer irreparable injury if the sale were to proceed. Property is considered unique. If defendants foreclosed, plaintiffs' injury would be irreparable because they might be unable to reacquire it. Plaintiffs' remedy at law, damages, would be inadequate. On the other hand, defendants would not suffer a high degree of harm if a preliminary injunction were ordered. While they would not be able to sell the property immediately and would incur litigation costs, when balanced against plaintiffs' potential loss, defendants' harm was outweighed.
The court issued a preliminary injunction enjoining defendants from selling the property while the lawsuit was pending.
Federal Bankruptcy Court
In re Salazar, No. 10-17456 (Bankr. S.D. Cal. Apr. 12, 2011) Chap. 13
Margaret M. Mann, U.S. Bankruptcy Judge, San Diego, CA
Francisco J. Aldana, attorney for Eleazar Salazar
600 B Street, Suite 2130, San Diego, California 92101
Cal Civil Code 2932.5 applies to Deeds of Trust as well as mortgages. It requires that if the foreclosing beneficiary has acquired its claim by assignment, it must record its assignment of the Deed of Trust before the trustee's sale.
MERS was not the beneficiary at the time of the foreclosure, even if it was initially the nominal beneficiary under the DOT. The DOT does not grant MERS any authority apart from a nominal role. MERS is not an extra-judicial commercial alternative to California's exhaustive nonjudicial foreclosure law (Civil Code sections 2020-2955). This Court joins the courts in other states that rejected MERS' offer of an alternative to the public recording system (citing In re Agard, below)
"The Court rejects the claim that MERS' limited role in the DOT provides it carte blanche authority over the nonjudicial foreclosure process."
In re Agard, No. 10-77338, 2011 Bankr. LEXIS 488, at *58-*59 (Bankr. E.D.N.Y. Feb. 10, 2011) Chap. 7
Robert E. Grossman, U.S. Bankruptcy Judge, Central Islip, NY
George Bassias, Astoria, NY, attorney for Ferrel Agard
21-83 Steinway, Astoria, NY 11105
The membership rules of Mortgage Electronic Registration Systems, or MERS, don't make it an agent of the banks that own the mortgages. "MERS's theory that it can act as a 'common agent' for undisclosed principals is not supported by the law," Grossman wrote. "MERS did not have authority, as 'nominee' or agent, to assign the mortgage absent a showing that it was given specific written directions by its principal."
"MERS and its partners made the decision to create and operate under a business model that was designed in large part to avoid the requirements of the traditional mortgage-recording process," Grossman wrote. "The court does not accept the argument that because MERS may be involved with 50 percent of all residential mortgages in the country, that is reason enough for this court to turn a blind eye to the fact that this process does not comply with the law."
"Without more, this court finds that MERS's 'nominee' status and the rights bestowed upon MERS within the mortgage itself, are insufficient to empower MERS to effectuate a valid assignment of mortgage," the judge wrote. "MERS's position that it can be both the mortgagee and an agent of the mortgagee is absurd, at best."
Grossman said parties coming to him to seek to lift the automatic ban on legal claims in cases involving MERS will have to show they own both the mortgage and the note.
MERS appealed Judge Grossman's order on March 8, 2011.
In re: Hwang, 396 B.R. 757 (2008), Case No. 08-15337 Chapter 7
Samuel L. Bufford, U.S. Bankruptcy Judge, Los Angeles
Robert K. Lee, attorney for Kang Jin Hwang
As the servicer on Hwang's promissory note, IndyMac was entitled to enforce the secured note under California law, but it must also satisfy the procedural requirements of federal law to obtain relief from the automatic stay in a Chapter 7 bankruptcy proceeding. These requirements include joining the owner of the note, because the owner of the note is the real party in interest under Rule 17, and it is also a required party under Rule 19. IndyMac failed to join the owner of the note, so its motion for relief from the automatic stay was denied.
Reversed on July 21, 2010. District Court Judge Philip Gutierrez reversed the Judge Bufford's determination that IndyMac is not the real party in interest under Rule 17 and that Rule 19 requires the owner of the Note to join the Motion.
In re: Vargas, Case No. 08-17036 Chapter 7
Samuel L. Bufford, U.S. Bankruptcy Judge, Los Angeles
Marcus Gomez, attorney for Raymond Vargas
In re: Walker, Case No. 10-21656 Chapter 11
Ronald H. Sargis, Judge, U.S. Bankruptcy Court, Sacramento
Mitchell L. Abdallah, attorney for Rickie Walker
MERS assigned the Deed of Trust for Debtor's property to Citibank, which filed a secured claim. Debtor objected to the claim. Judge Sargis ruled that the promissory note and the Deed of Trust are inseparable. An assignment of the note carries the mortgage with it, while an assignment of the Deed of Trust alone is a nullity. MERS was not the owner of the note, so it could not transfer the note or the beneficial interest in the Deed of Trust. The bankruptcy court disallowed Citibank's claim because it could not establish that it was the owner of the promissory note.
Washington Mutual Inc. Bankruptcy, Case No. 08-12229 Chapter 11
Mary F. Walrath, Judge, U.S. Bankruptcy Court, Delaware
The Washington Mutual, Inc. Chapter 11 Voluntary Bankruptcy Petition was filed by WaMu on September 26, 2008 in Deleware. The filing fee was $1,039. As of the end of February 2012, 11,050 documents had been filed.
California State Court
Mabry v. Aurora Loan Services
185 Cal.App.4th 208, 110 Cal. Rptr. 3d 201 (4th Dist. June 2, 2010)
California Court of Appeal, 4th District, Division 3
California Supreme Court, Petition for Review denied August 18, 2010.
Moses S. Hall, attorney for Terry and Michael Mabry
The Mabrys sued to enjoin a trustee's sale of their home, alleging that Aurora's notice of default did not include a declaration required by Cal. Civil Code §2923.5, and that the bank did not explore alternatives to foreclosure with the borrowers. The trial court refused to stop the sale. The Mabrys filed a Petition for a Writ of Mandate and the Court of Appeal granted a stay to enjoin the sale. Oral argument was heard in Santa Ana on May 18, 2010.
Aurora argued that a borrower cannot sue a lender that fails to contact the borrower to discuss alternatives to foreclosure before filing a notice of default, as required by §2923.5, because §2923.5 does not explicitly give homeowners a "private right of action." Aurora also argued that a declaration under penalty of perjury is not required because a trustee, who ordinarily files the notice of default, could not have personal knowledge of a bank's attempts to contact the borrower. Nobody mentioned that the trustee is not authorized by the statute to make the declaration. §2923.5 states that a notice of default "shall include a declaration from the mortgagee, beneficiary, or authorized agent that it has contacted the borrower..."
The Court of Appeal ruled that a borrower has a private right of action under § 2923.5 and is not required to tender the full amount of the mortgage as a prerequisite to filing suit, since that would defeat the purpose of the statute. Under the court's narrow construction of the statute, §2923.5 merely adds a procedural step in the foreclosure process. Since the statute is not substantive, it is not preempted by federal law. The declaration specified in §2923.5 does not have to be signed under penalty of perjury. The borrower's remedy is limited to getting a postponement of a foreclosure while the lender files a new notice of default that complies with §2923.5. If the lender ignores the statute and makes no attempt to contact the borrower before selling the property, the violation does not cloud the title acquired by a third party purchaser at the foreclosure sale. Therefore §2923.5 claims must be raised in court before the sale. It is a question of fact for the trial court to determine whether the lender actually attempted to contact the borrower before filing a notice of default. If the lender takes the property at the foreclosure sale, its title is not clouded by its failure to comply with the statute. Finally, the case is not suitable for class action treatment if the lender asserts that it attempted to comply with the statute because each borrower will present "highly-individuated facts."
In a petition for review to the California Supreme Court, the Mabrys noted that more than 100 federal district court opinions have considered §2923.5 and an overwhelming majority have rejected a private right of action under the statute. The petition for review was denied.
After the case was remanded to the trial court, Mabry's motion for preliminary injunction was granted. The trial court found that the Notice of Default contained the form language required by the statute, i.e. that the lender contacted the borrower, tried with due diligence to contact the borrower, etc. However, the declaration on the Notice of Default was not made under panalty of perjury, and therefore had no evidentiary value to show whether the defendant satisfied §2923.5
Lange v. JP Morgan Chase, Washington Mutual, Alta Community Investment, and Seaside Capital Fund
California Court of Appeal, 2nd District Case #B233670
Roger Senders, trial attorney
Douglas Gillies, appellate attorney for Susan Lange
Susan Lange was paying Chase $6384 per month to stay in her home under a trial loan modification agreement when she came home to find a Notice to Quit posted on her front door. Without giving notice to Susan, Chase had conducted a Trustee's Sale. The property was purchased by Alta Community Investment, founded by Todd Kaufman, and Seaside Capital Fund, owned by Luke McCarthy. However, Todd Kaufman was not your typical bona fide purchaser of distressed properties. He had designed and managed WaMu's securitization division. He left WaMu during the mortgage meltdown and founded Alta Community Investment so he could buy and sell distressed houses.
Two days later, Lange received a knock on the door from Nancy Mura, who was sent to Lange's home to persuade the residents to move immediately. Mura told Lange that if she didn't get out right away, Luke McCarthy would pay her a visit and he would be "very unpleasant" if he had to come. "He never loses these things."
The trial court sustained demurrers filed by Chase, Alta, and Seaside. Susan Lange appealed. The California Court of Appeal affirmed, stating, "Alta and Seaside sent someone to her door asking her to vacate after the foreclosure sale, but this is not extreme and outrageous."
Herrera v. Deutsche Bank
California Court of Appeal, 196 Cal.App.4th 1366, 3rd District (May 31, 2011)
Herrera was originally an unpublished opinion, but after receiving a request from the public, the Court ordered on June 28, 2011, that the opinion would be published in part.
A trial court errs in taking judicial notice of disputed facts contained within recorded documents.
A matter ordinarily is subject to judicial notice only if the matter is reasonably beyond dispute. "Taking judicial notice of a document is not the same as accepting the truth of its contents or accepting a particular interpretation of its meaning." Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374. While courts take judicial notice of public records, they do not take notice of the truth of matters stated therein. Love v. Wolf (1964) 226 Cal.App.2d 378, 403. "When judicial notice is taken of a document . . . the truthfulness and proper interpretation of the document are disputable." StorMedia, Inc. v. Superior Court (1999) 20 Cal.4th 449, 457, fn. 9.
In Herrera, the Substitution of Trustee recited that Deutsche Bank "is the present beneficiary under" the 2003 deed of trust. This fact was hearsay and disputed. Therefore, the trial court could not take judicial notice of it. Poseidon Development, Inc. v. Woodland Lane Estates, (2007) 152 Cal.App.4th 1106. Nor would taking judicial notice of the Assignment of Deed of Trust establish that the Deutsche Bank was the beneficiary under the deed of trust. A recitation that JPMorgan Chase Bank is the successor in interest to Long Beach Mortgage Company, through Washington Mutual, is hearsay. Plaintiffs disputed the truthfulness of the contents of all of the recorded documents.
A supporting declaration must be made on personal knowledge and "show affirmatively that the affiant is competent to testify to the matters stated." Code Civ. Proc., § 437c, subd. (d). Deborah Brignac's declaration did not affirmatively show that she can competently testify that the bank is the beneficiary under the deed of trust. At most, her declaration shows she can testify as to what the Assignment of Deed of Trust "indicates." The factual contents of the assignment were hearsay and defendants offered no exception to the hearsay rule to make these factual matters admissible.
At oral argument, defendants contended that the recorded documents were actually business records and admissible under the business record exception. However, Brignac did not provide any information in her declaration establishing that the sources of the information and the manner and time of preparation would indicate trustworthiness. (Evid. Code, § 1271 (d).
A declaration that the Substitution of Trustee by Deutsch Bank made CRC trustee would require admissible evidence that the bank was the beneficiary under the 2003 deed of trust and thus had the authority to substitute the trustee. Because defendants failed to present facts to establish that the bank was beneficiary and CRC was trustee under the 2003 deed of trust, and therefore had authority to conduct the foreclosure sale, triable issues of material fact remain.
Gillies v. California Reconveyance Co. and JPMorgan Chase (Gillies I)
California Court of Appeal, Case # B224995, 2nd District, Division 6
Douglas Gillies, Appellant in pro per
Gillies sued on November 25, 2009, to enjoin a trustee's sale, alleging that CRC's Notice of Default (NOD) did not include a declaration required by Cal. Civil Code §2923.5, the NOD mailed to the homeowner was not a copy of the recorded NOD, and the Notice of Default was not recorded in the County Recorder's Office. Defendants filed a Demurrer and attached a recorded NOD in which the name of the trustor was misspelled. The trial court sustained the demurrer without leave to amend and the case was dismissed. Gillies appealed.
The Court of Appeal affirmed the trial court's demurrer, and wrote, "Gillies points out that the notice of default misspells his first name Dougles, instead of the correct Douglas. But no reasonable person would be confused by such a minor error. Gillies last name is spelled correctly and the notice contains the street address of the property as well as the assessor's parcel number."
Gillies filed a second lawsuit against CRC on July 13, 2011 (Gillies II).
Gillies v. California Reconveyance Co. (Gillies II)
California Court of Appeal, Case # B237562, 2nd District, Division 6
Douglas Gillies, Plaintiff in pro per
Gillies sued CRC a second time to enjoin a trustee's sale, alleging that the Deed of Trust did not correctly state the name of trustor, as required by Cal. Civil Code §2924, and that CRC did not attempt to contact the borrower to explore alternatives to foreclosure before filing the Notice of Default. The court granted a Temporary Restraining Order to stop the sale but declined to issue a preliminary injunction.
CRC filed a Motion to Strike the Complaint on the grounds of res judicata and collateral estoppel. Gillies opposed the motion arguing that res judicata does not apply because the Complaint alleges new facts and new theories and the earlier dismissal following a demurrer was not a judgment on the merits. When Judge de Bellefeuille dismissed the complaint in GilliesII, she suggested that it should be resolved by the court of appeal.
Plaintiff filed an appeal on November 16, 2011, Case # B237562. The Second Appellate District, Div. 6, ruled in an unpublished opinion that the action was barred by the doctrine res judicata.
- Complaint and Application for TRO
- CRC's Motion to Strike
- Plaintiff's Opposition to Motion to Strike
- CRC's Reply
- Order Striking Complaint and Judgment of Dismissal
- Gillies' Opening Brief in the Cal. Court of Appeal, May 4, 2012, No. B237562
- CRC's Respondent's Brief Brief
- Gillies' Reply Brief
- Decision of Court of Appeal, September 6, 2012
- Petition for Review - California Supreme Court, October 16, 2012, No. S206021
- CRC's Answering Brief - California Supreme Court, November 10, 2012
- Gillies' Reply Brief - California Supreme Court, November 13, 2012
Gillies filed a third lawsuit, this time against Chase, on December 5, 2012 (Gillies III).
Gillies v. JP Morgan Chase (Gillies III)
US District Court, Case # CV12-10394-GW, Central District of California
Douglas Gillies, Plaintiff in pro per
Gillies sued Chase in Federal Court, alleging that Chase could not identify the Lender and was therefore not authorized to commence foreclosure. Chase's wholly owned subsidiary, CRC, had recorded a Deed of Trust that did not correctly state the name of trustor, followed by a Notice of Default and three Notices of Trustee's Sale. A spelling discrepancy is a clerical error. CRC's remedy is found in the Adjustable Rate Note (Complaint Exhibit 6). The Adjustable Rate Note states in Paragraph 12 that in the event of a clerical error, "I agree, upon notice from the Note Holder, to reexecute any Loan Documents that are necessary to correct any such Errors." The Note Holder can request that the Trustor amend the Deed of Trust to correct a clerical error.
Rather than follow the simple procedure in the contract to correct an error, CRC elected to repeatedly present a false document to the County Recorder with the intention that it be recorded and indexed under a fictitious name. Chase has invested thousands of dollars pursuing a strategy of completing a defective foreclosure based on intentionally stating a fictitious name as the Trustor in a recorded Notice of Default and three recorded Notices of Trustees Sale, when it simply needed to request that the Lender contact Plaintiff and ask him to sign a correctly spelled document. One call, compared to hundreds of hours of attorneys' fees filing demurrers, motions to strike, and appellate briefs in Gillies I and II. Chase cannot identify the Lender, so Chase and its in-house "trustee" CRC cannot initiate foreclosure according to the Note and Deed of Trust.
Chase filed a Motion to Dismiss the Complaint on the grounds of res judicata. At a hearing on February 7, 2013, District Court Judge George Wu granted Chase's Motion to Dismiss. Gillies filed a Notice of Appeal in the 9th Circuit on February 19, 2013.
Cabalu v. Mission Bishop Real Estate
Superior Court of California, Alameda County
Brian A. Angelini, attorney for Cecil and Natividad Cabalu
Davies v. NDEX West, Case No. INC 090697
Randall White, Judge, Superior Court of California, Riverside County
Brian W. Davies, in pro per
Edstrom v. NDEX West, Wells Fargo Bank , Case No. 20100314
Superior Court of California, Eldorado County
Richard Hall, attorney for Daniel and Teri Anne Edstrom
A 61-page complaint with 29 causes of action to enjoin a trustee's sale of plaintiffs' residence, requesting a judicial sale instead of a non-judicial sale, declaratory relief, compensatory damages including emotional and mental distress, punitive damages, attorneys' fees, and rescission.
Moreno v. Ameriquest
Superior Court of California, Contra Costa County
Thomas Spielbauer, attorney for Gloria and Carlos Moreno
Complaint for declaratory relief and fraud against lender for misrepresenting the terms of the loan, promising fixed rate with one small step after two years both orally and in the Truth In Lending Statement. Loan was actually variable rate with negative amortization. Morenos would have qualified for fixed rate 5% for 30 years, but instead received an exploding 7% ARM. Notary rushed plaintiffs through signing of documents with little explanation. Complaint requests a declaration the note is invalid, unconscionable and unenforceable and the Notice of Trustees Sale is invalid.
Other State Courts
Niday v. GMAC, Case No. CV10020001
Oregon Court of Appeals
July 18, 2012
Jeff Barnes, attorney for Rebecca Niday
In sum, we conclude that the "beneficiary" of a trust deed for purposes of the OTDA is the person named or otherwise designated in the trust deed as the person to whom the secured obligation is owed--in this case, the original lender. We further conclude that, because there is evidence that the beneficiary assigned its interest in the trust deed without recording that assignment, there is a genuine issue of material fact on this summary judgment record as to whether ORS 86.735(1), a predicate to nonjudicial foreclosure, has been satisfied. We emphasize, however, that our holding concerns only the requirements for nonjudicial foreclosure. Cf. ORS 86.710 (beneficiary of the trust deed retains the option of judicial foreclosure). And the import of our holding is this: A beneficiary that uses MERS to avoid publicly recording assignments of a trust deed cannot avail itself of a nonjudicial foreclosure process that requires that very thing--publicly recorded assignments.
- Opinion decided 7/18/2012 that if evidence indicates the beneficiary assigned its interest through MERS without recording the transfer, nonjudicial foreclosure is not available.
JPMorgan Chase Bank v. George, Case No. 10865/06
Arthur M. Schack, Supreme Court Judge, Kings County, New York
Edward Roberts, attorney for Gertrude George
Florida Judge tosses foreclosure lawsuit
Homeowners dispute who owns mortgage
by Steve Patterson
St. Augustine Record
June 15, 2010
Changing stories about who owns a mortgage and seemingly fresh evidence from a long-closed bank led a judge to throw out a foreclosure lawsuit. It's the second time in as many months that Circuit Judge J. Michael Traynor has dismissed with prejudice a foreclosure case where homeowners disputed who owns the mortgage. Lawyers representing New York-based M&T Bank gave three separate accounts of the ownership, with documentation that kept changing.
"The court has been misled by the plaintiff from the beginning," the judge wrote in his order. He added that documents filed by M&T's lawyers seemed to contradict each other and "have changed as needed to benefit the plaintiff."
The latest account was that Wells Fargo owned the note, and M&T was a servicer, a company paid to handle payments and other responsibilities tied to a mortgage. To believe that, the judge wrote, the "plaintiff is asking the court to ignore the documents filed in the first two complaints." He added that Wells Fargo can still sue on its own, if it has evidence that it owns the mortgage.
More and more foreclosure cases are being argued on shaky evidence, said James Kowalski, a Jacksonville attorney who represented homeowners Lisa and Larry Smith in the fight over their oceanfront home. "I think it's very representative of what the banks and their lawyers are currently doing in court," Kowalski said.
He said lawyers bringing the lawsuits are often pressed by their clients to close the cases quickly. But it's up to lawyers to present solid evidence and arguments. "We are supposed to be better than that," Kowalski said. "We are supposed to be officers of the court."
Department of Treasury and FDIC Report on WaMu, 4/16/2010
The Offices of Inspector General for Department of the Treasury and Federal Deposit Insurance Corporation released its evaluation of the regulatory oversight of Washington Mutual on April 16. The table of contents tells the story. WaMu pursued a high-risk lending strategy which included systematic underwriting weaknesses. They didn't care if borrowers could pay back their loans. WaMu did not have adequate controls in place to manage its reckless "high-risk" strategy. OTS examiners found weaknesses in WaMu's strategy, operations, and asset portfolio but looked the other way.
OCC Advisory Letters
How could the regulators allow this breakdown to happen? Was it really fraud when banks arranged loans for homeowners who would inevitably go into defrault, sold them to Wall Street to be bundled into securities, then purchased insurance so that the bank would collect the unpaid balances when the borrowers lost their homes? Did anybody really know that repealing Glass-Steagall and permitting Wall Street banks to get under the covers with Main Street banks would cause so many borrowers to lose their homes? The Glass-Steagall Act, enacted in 1933, barred any institution from acting as any combination of an investment bank, a commercial bank, and an insurance company. It was repealed in 1999, and the repercussions have been immense.
The Office of the Comptroller of the Currency (OCC) issued Advisory Letter 2000-7 only months after Glass-Steagall was repealed. It warned regulators to be on the lookout for indications of predatory or abusive lending practices, including Collateral or Equity Stripping - loans made in reliance on the liquidation value of the borrower's home or other collateral, rather than the borrower's independent ability to repay, with the possible or intended result of foreclosure or the need to refinance under duress.
Proving fraud is a painstaking process. Getting inside the mind of a crook requires a careful foundation, and admissable evidence is not always easy to obtain. Many courts will take judicial notice of official acts of the legislative, executive, and judicial departments of the United States and of any state of the United States. See Cal Evidence Code Sec. 452(c).
Here is a set of smoking guns in the form of a series of Advisory Letters issued by OCC:
To add your comments or for permission to reprint, contact Editor, ChaseChase.org