March 2015 Brief 1.
of 32
Transcript of March 2015 Brief 1.
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SERVICE
A t'ue (%d e)(ct c#py #f t$e f#'e*#i%* $(s bee% se'+ed t$is ,-t$ d(y #f Au*ust ./,/ +i( em(il (s f#ll#0s1
Atty2s f#' Pl(i%ti3
A/elia A. Boer 0013
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I%t'#duct#'y St(teme%t
As an initial /atter* -efendant freel5 acknoledges t(at &lainti+
)led t(is lasuit in 200* and /uc( litigation and ti/e (as since
ensued* including an a88eal and /otion for relief fro/ 4udg/ent
8ursuant to Ci!. . 60B.
&lainti+ de"t collector Wells Fargo Bank as Trustee for Trust7
alleges an i/8ossi"ilit5* to "e t(e real 8art5 in interest to foreclose on
an alleged Note and 'ortgage created "eteen 9 Block and
-efendant eed. -efendant eed (as re8eatedl5 disa!oed an5
knoledge of sa/e.
&lainti+ -e"t collector alleges t(e rig(t to co//ence t(is action
against -efendant eed and su"/its docu/entation (ic( t(e5 allege8ro!es t(eir rig(t to sa/e. -efendant eed 8ro!es t(eir e!idence of
oners(i8 or e!en of 9older7 status of t(e note /ortgage t(at is
t(e su"4ect /atter of t(is litigation is an i/8ossi"ilit5.1
Furt(er* none of t(e a"o!e c(anges t(e fact t(at it(in &lainti+s
&leadings and t(e entiret5 of t(eir on e(i"its* t(e Court ne!er (ad
4urisdiction to (ear t(is /atter* nor as &lainti+ Wells Fargo Bank N.A.
as Trustee* t(e real 8art5 in interest entitled to enforce t(e alleged
note and /ortgage #% Feb'u('y .7t$ .//8* t(e date &lainti+ )led t(e
foreclosure co/8laint* nor can it "e at an5 8oint t(ereafter* it(out
&lainti+ (a!ing 9'st "een assigned or ot(erise "een legall5 !ested as
t(e true 9older in -ue Course of t(e note /ortgage in Huestion.
-efendant su"/its t(at &lainti+ is not* as not* and "5 t(e Trusts on
controlling docu/ents ter/s and agree/ents* could ne!er (a!e "een.
1 "Constructive fraud: A contract or act, which, not originating in evil design and contrivance to perpetuate a positivefraud or injury upon other persons, yet, by its necessary tendency to deceive or mislead them, or to violate a public or
private confidence, or to impair or injure public interest, is deemed equally reprehensible with positive fraud, andtherefore is prohibited by law, " !oviers #aw $ictionary % 1&'( )dition
"*raud vitiates the most solemn contracts, documents, and even judgments" ie $ocuments, Constitutions, Court$ecisions+ - vs .hroc/morton, 0& - (1
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&lainti+ de"t collectors rig(t to initiate t(is suit against -efendant
isIas a legal i/8ossi"ilit5.
-efendant also states t(at "5 t(e ter/s found u8on t(e alleged
'ortgage itself* as is s(on on 8age one* under t(e (eadingB%%W? C%>?NANTSJ
:;#''#0e' 0(''(%ts (%d 0ill defe%d *e%e'(lly t$e title t#
t$e P'#pe'ty (*(i%st (ll cl(ims (%d dem(%ds subells F('*# ;(%5 N&A& (s T'ustee
?>F;@ l(c5ed st(%di%* t# b'i%* i%iti(te #' i%+#5e t$is (cti#%
bec(use it 0(s %#t %#' 0(s it (ll#0ed t# be t$e $#lde' #f t$e
%#te #' t$e (ssi*%ee #f t$e m#'t*(*e (t t$e time it 9led suit
?explained infra@& If ( p('ty d#es %#t $(+e st(%di%* (t t$e time
t$e c#mpl(i%t is 9led it is (
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Since t(e foreclosing "ank relied on an alleged after foreclosure
initiation acHuired interest in t(e alleged note and /ortgage7 to
re8resent its rig(t to enforce t(e agree/ents* -efendant eed D 'o!es
t(e Court to !acate t(e 4udg/ent in its entiret5 or to re/and "ack to
t(e ci!il court it( instruction for sa/e.
D need not 8roceed under Ci!.. 60B "ecause t(e 4udg/ent is !oid.
T(e on 8oint decision of t(e %(io Su8re/e Courts Sc(artzald
decision2 states t(at standing (as to eist at t(e ti/e t(e case is )led*
and if it does not eist* t(e 4urisdiction of t(e co//on 8leas court as
not* it could not (a!e "een in!oked. A court it(out 4urisdiction cannot
enter an5 4udg/ent ece8t one dis/issing t(e case for lack of
4urisdiction. A /otion to !acate a !oid as o88osed to a !oida"le
4udg/ent is not "ased on Ci!. . 60B* it in!okes t(e courts in(erent
8oer. &atton !. -ie/er* 3: %(io St. 3d 6 1=.
&lainti+ -e"t Collector* according to t(e "inding case la in t(e
State of %(io and 'ontgo/er5 Count5* as not entitled to 4udg/ent as
a /atter of la "ecause t(e5 ere not and could not e!er (a!e "een
t(e real 8art5 in interest. T(e 4udg/ent is !oid a" initio. es 4udicata
cannot "e a "ar to 4udg/ent t(at is !oid a" initio.
I& Rele+(%t F(ctu(l ;(c5*'#u%d
,&O% Feb'u('y .7t$ .//8 ?E)& :A=@ Pl(i%ti3 9led t$e
f#'ecl#su'e c#mpl(i%t i% t$is (cti#%&
2. As of 'arc( 6t(
* 200 t(e note /ortgage at issue (ad not"een assigned fro/ (oe!er t(e 8re!ious (olderIoner as*
to &lainti+ (erein.
2 Fed. Home Loan Mtge. Corp. v. Schwartzwald , 2312%4hio%'315 6-tanding is required to invo/e the jurisdiction of thecommon pleas court, and it is determined as of the filing of the complaint7
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http://www.supremecourt.ohio.gov/rod/docs/pdf/0/2012/2012-ohio-5017.pdfhttp://www.supremecourt.ohio.gov/rod/docs/pdf/0/2012/2012-ohio-5017.pdfhttp://www.supremecourt.ohio.gov/rod/docs/pdf/0/2012/2012-ohio-5017.pdf
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3. %n August 26t(* 200 &lainti+ )led a Notice of Assign/ent of
'ortgage (ic( contains t(erein also an Assign/ent of Note
?( C7* (ic( contained a co85 of a recorded assign/ent of
-efendants note /ortgage to &lainti+. T(e Assign/ent*7
attac(ed (ereto as ?(. B7.oid udgment
• $ecember 1, 233&, 8emorandum in 4pposition to 9laintiffs 8emorandum in 4pposition to $efendant ohn A acate; anuary 1(, 2330, 8otion for
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T(ere are /ore issues it( t(is 8ost dated assign/ent ?.B7
t(an 4ust t(ose addressed in t(e Sc(artzald -ecision. But* in!oking
t(e rules of e!idence* t(ats (ere e start.
T$e POST DATED ASSINMENT issue B ,&
As is e!idenced in &lainti+s alleged Assign/ent7 fro/ %8tion
%ne 'ortgage Cor8. to T(e Trust7 t(e date of t(e transference or
Assign/ent7 of "ot( t(e Note 'ortgage did not occur until after
t(e suit to foreclose (ad alread5 "een )led.
Dn Federal Home Loan Mortgage Corporation v. Schwarzwald, et
al.* a case recentl5 decided "5 t(e %(io Su8re/e Court* 8lainti+ "ank
"roug(t a foreclosure lasuit "efore it o"tained an assign/ent of
/ortgage securing defendant (o/eoners loan. -efendants
/aintained t(at 8lainti+ lacked standing to sue /uc( as -efendant
8re!iousl5 contended in t(is case "ecause t(e assign/ent of
/ortgage (ad not "een recorded 8rior to t(e )ling of t(e lasuit.
&lainti+ as assigned t(e /ortgage !ia for/al assign/ent* as (ere*
onl5 (fte' t(e )ling of t(e lasuit. T(e trial court entered a 4udg/ent
in fa!or of 8lainti+* and t(e Second -istrict Court of A88eals a+ir/ed.
T(e Su8re/e Court re!ersed* (olding t(at standing is a
4urisdictional reHuire/ent t(at /ust "e satis)ed to e!en initiate a
foreclosure lasuit* statingJ
>e 'ec#*%ied t$(t st(%di%* is (
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(Schwarzwald (tt(c$ed $e'et# (s E)$& :D= (t p('(& ..@&
Furt(er* t(e Court stated*
:;ec(use st(%di%* t# sue is 'eui'ed t# i%+#5e t$e
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200:* 9B assigned t(e alleged note and /ortgage to %8tion %ne
'ortgage Cor8oration* %8tion %ne7. %8tion %ne t(en alleges to
(a!e assigned t(e note and /ortgage to &lainti+ "5 assign/ent
eecuted 'arc( ;t(* 200. &lainti+ is t(e alleged de"t collector
Trustee7 for a securitized trust titled Securitized Asset Backedecei!a"les ##C 2006$%&1 'ortgage &ass$T(roug( Certi)cates* Series
2006 %&17* t(e Trust7. %n Fe"ruar5 2;t( 200 &lainti+ Trustee
initiated t(e foreclosure suit at Bar.
HISTOR (s s$#0% by t$e EVIDENCE
&lainti+ "roug(t t(is action to foreclose "ased on an alleged
/ortgage* dated ,une =t(* 200:* (ic( secured an alleged loan ofM100*000 issued to t(e -efendant "5 9 Block 'ortgage
Cor8oration* a 'assac(usetts Cor8oration7* 9B7.
%n ,une =t(* 200:* 9B ?ntit5 A* it( t(e use of an Allonge
e(i"it allegedl5 assigned all of t(eir rig(ts to t(e note and
/ortgage to %8tion %ne 'ortgage Cor8oration ?ntit5 B* %8tion
%ne7.
%8tion %ne si/ultaneousl5 using t(e sa/e Signator5 creates a
secondar5 allonge e(i"it transferring all of t(eir rig(ts to t(e note
and /ortgage to OOOOOOOOOOOOOOOOO. :
%8tion %ne t(en allegedl5 t(ere is no assign/ent 8ro+ered "5
&lainti+ for t(is action* t(roug( 2 unsigned and unaut(enticated*
8re!iousl5 created docu/ents intent6*
5 ? would write @!lan/ but according to -)C #aw, if ? did that then ? would be representing that only
@!lan/ was the authoriBed holder, those would be the same -)C laws which require the word @!earer to be inserted before this Allonge can be treated as a !earer instrument
( Black&s 'th intent. 6lc7 1 .he state of mind accompanying an act, esp a forbidden act ; hile motive isthe inducement to do some act, intent is the mental resolution or determination to do it hen the intent todo an act that violates the law eDists, motive becomes immaterial Cf 84.?>)E -C?)=.)
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1. titledJ &urc(ase &rice and Ter/s Agree/ent7 ?..
and
2. titledJ ?P?CETD%N C%&G F#%W A'?N-?- AN-
?STAT?- '%TA? #%AN &EC9AS? AN-
WAANTD?S A??'?NT ?*
it( (ic( e are lead to "elie!e it(out an5 8roof (atsoe!er t(at
%8tion %ne does assignIsellsItransfers; all of t(eir rig(ts to t(e N%T?
'ortgage to Barcla5s Bank ?ntit5 CS8onsor (o t(en* e are led
to "elie!e intent* "undles t(e Note 'ortgage along it(
a88roi/atel5 :*000 ot(er like kind in!est/ents and uses t(e entire
"undle to create a ne )nancial entit5 called a S8ecial &ur8ose >e(icleS&>* (ic( is designed to acce8t de8osit of t(e "undled notes and
/ortgages and is a ?'DC Trust.
Barcla5s Bank ?ntit5 C t(en* e are t(en lead to "elie!e*
allegedl5 sells t(roug( a docu/ent titled BD## %F SA#?7 ? O7 L
in consideration of i t(e su/ of M1*21AB#?S ##C &urc(aser andii t(e Class P* Class & and Class Certi)cates issued 8ursuant toa &ooling and Ser!icing Agree/ent* dated as of ,anuar5 1*2006 t(e&ooling and Ser!icing Agree/ent* a/ong t(e &urc(aser* as-e8ositor* %8tion %ne 'ortgage Cor8oration* as ser!icer* and WellsFargo Bank* National Association* as trustee* does as of ,anuar5 26*2006 (ere"5 sell* transfer* assign* set o!er and ot(erise con!e5 tot(e &urc(aser it(out recourse* all t(e Sellers rig(t* title andinterest in and to t(e 'ortgage #oans descri"ed on ?(i"it A
5
As with almost all of 9laintiffFs document submissions, the documents 9laintiff submits that are to berepresentative of the transfer of the =ote G 8ortgage from 4ption 4ne to !arclayFs !an/ are all unsignedand unauthenticated so no @true method of transfer is even represented !., the controlling #aw 6?
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attac(ed (ereto and /ade a 8art (ereof* including all interest and8rinci8al recei!ed "5 t(e Seller on or it( res8ect to suc( 'ortgage#oans.7
and t(en transfers all of t(eir rig(ts to t(e contents of t(e
"undled notes and /ortgages (ic( contains -efendants alleged Note
'ortgage again it(out a 8(5sical assign/ent* no 8roof of transfer*
no 8roof of negotiation* no recei8t of deli!er5* etc. to t(e securitized
trusts -e8ositor= Securitized Asset Backed ecei!a"les ##C7?ntit5
- SAB7* (o t(en allegedl5 de8osits and transfers all of t(eir
interests and rig(ts 5et again it(out a 8(5sical assign/ent* no 8roof
of transfer* no 8roof of negotiation* no recei8t of deli!er5* etc. to t(e
notes and /ortgages in to t(e Trust7 ?ntit5 ?. 10
%8tion %ne ?ntit5 ; t(en alleges it( intent and scienter11 to
(a!e assigned t(e note and /ortgage to &lainti+ ?ntit5 E "5
assign/ent of 'ortgage e eecuted 'arc( ;t(* 200. &lainti+ (ad
8re!iousl5 initiated suit on Fe"ruar5 2;t(* 200. T(e i/8ortant as8ect
fro/ a"o!e is t(e assign/ent fro/ ?ntit5 ; directl5 to ?ntit5 E.
&lainti+* as re8resented is t(e alleged de"t collector Trustee for
a securitized ?'DC trust titled Securitized Asset Backed ecei!a"les
##C 2006$%&1 'ortgage &ass$T(roug( Certi)cates* Series 2006 %&17*
t(e Trust7.
ASSINMENT ARUMENT . ?besides Sc$0('t0(ld ?p#st
d(ti%*@@
0 -ame as *ootnote ' above+ no signed or authenticated contract13 ?t is important here to note that in each transaction listed above, 9laintiff also proffers no receipts, no
delivery acceptance, nothing whatsoever to show proof of conveyance or transfer or negotiation or sale of, inthe end, an alleged J' !illion worth of financial instruments from any party to any other party whatsoever11 Black’s 9th scienter 6s?%en%tr or see%7, n. K#atin "/nowingly"L 61&271 A degree of /nowledge that ma/es a person legally responsible for the consequences of his or her act oromissionE the fact of an acts having been done /nowingly, esp as a ground for civil damages or criminal punishment -ee M=4#)$N)E 8)=-
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T(e lack of 8ro8er transfers of t(e note /ortgage 8ro8er
ould "e A R B* B R C* C R - and - R ? and in fact* t(e i/8ro8er
transfers as in t(e case at Bar (ere &lainti+s Assign/ent alleges
transfer fro/ ?ntit5 ; to E* to ot(ers creates a series of docu/ent
defects and de)ciencies t(at include* "ut are not li/ited to t(efolloingJ
a Broken endorse/ent c(ains A R B* B R ?L" %riginal Notes it(out signatures on endorse/entsL
c Notes it( ski88ing endorse/entsL
d Notes it( endorse/ents on unattac(ed allongesL
e Allonges unattac(ed to t(eir original et$ink notesLf Allonges co8ied and taken fro/ ot(er notes and 8laced onto a
di+erent note Lg Allonges unattac(ed to original notes it( "lank
endorse/entsL
( Notes ne!er endorsedL
i Allonges ne!er datedL
4 Allonges in "lank and 8re$eecuted and undated for later )ll$
ins "5 unknon 8artiesL
k -ou"le 8ledges of t(e sa/e note andIor loan to di+erent8artiesL
l &ost$dated assign/ents of /ortgages and notesL
/o"o$signed assign/ents of /ortgages and notesL
n &ost$dated assign/ents of /ortgages and notesL
o Assign/ents eecuted it( no laful aut(orit5L
8 Assignors assigning to t(e/sel!esL
H To di+erent 8arties clai/ing t(e oners(i8 of t(e sa/enoteIloan.
C(% t$e T'ustee F#'ecl#se
12
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Furt(er* -efendant reHuests ,udicial Notice t(at in t(e case at
Bar* it is t(e Trustee for t(e Trust7 t(at is "ringing t(e foreclosure
suit. &lainti+ Trustee o+ers no 8roof of an5 transfer of an5 oners(i8*
or rig(ts or aut(orit5 fro/ t(e Trust to t(e Trustee12 ofIor 8ertaining to
t(e alleged Note andIor t(e 'ortgage andIor 8ertaining to t(e rig(tsor aut(orit5 granted to t(e Trustee* in t(e case at Bar to foreclose.
T(e a"o!e state/ent is of ut/ost i/8ortance "ecause it(in t(e
Trusts controlling docu/ent* its Dndenture* t(e &ooling and Ser!icing
Agree/ent &SA* at section 3.1: e )nd t(at "5 contractual
agree/ent it is not t(e Trustees 8osition to engage in an5 foreclosing
related acti!ities* it is instead t(e Ser!icers713 o"ligation. Section
3.1: readsJ
Section 3.15 Realization upon Defaulted Mortgage Loans. @.he Servicer shall use its bestefforts, consistent with Accepted -ervicing 9ractices, to foreclose upon or otherwise comparablyconvert 6which may include an acquisition of
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court and t(erefore* &lainti+ (ad no standing to initiate t(is suit (ic(
/eans t(is suit as >%D- a" initio.
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-e8ositor* Securitized Asset Backed ecei!a"les ##C SAB7* "5 t(e
Ser!icer* %8tion %ne* and "5 t(e Trustee* W?##S FA% BAN* NA*
and is dated ,anuar5 1* 2006.
T(e &SA contractuall5 sets fort( t(e go!erning la of t(e trust
and t(e /anner in (ic( /ortgages ould "e 8urc(ased "5 t(e trust*
as ell as t(e duties of t(e trustee and t(e ser!icer. Dt is t(e trusts
on contractual controlling docu/ent.
Section 2.01* su"section 1 of t(e &SA reHuires t(at transfer and
assign/ent of /ortgages /ust "e e+ected "5 (and deli!er5* for de8osit
it( t(e Trustee it( t(e original note endorsed in "lank.
Section 2.0: of t(e &SA reHuires t(at t(e -e8ositor transfer all
rig(t* title* interest in t(e /ortgages to t(e Trustee* on "e(alf of t(e
trust* as of t(e Cl#si%* D(te. T(e Cl#si%* D(te (s p'#+ided i% t$e
PSA is "(%u('y .-t$ .//-.
T(e -ate of t(e Assign/ent of 'ortgage and Note referenced
infra* is o!er 2 5ears 8ast t(e date alloed for de8osits into t(e trust.
Df t(e trust does not 8erfect legal title "5 taking 8(5sical 8ossession oft(e notes and /ortgages* t(e Dnternal e!enue Code* s8eci)call5 .-
U&S&C& 8-/?d@?,@* 8ro!ides for a 100 8ercent ta 8enalt5 on t(ose
non$co/8l5ing cas( os se!erel5 a+ecting t(e Trusts Dn!estors
eturn %n Dn!est/ent %D.
As listed in t(e &SA* t(e -e8ositor in t(e case at Bar as
Securitized Asset Backed ecei!a"les ##C7 SAB. Wit(in t(e
sc(e/a of a securitized 'BS 'ortgage Backed Securit5 ?'DC eal
?state 'ortgage Dn!est/ent Conduit trust* t(e -e8ositor is t(e
/andated entit5 in t(e title c(ain t(at 8ro!ides t(e Bankru8tc5
re/oteness necessar5 to t(e Notes and t(e 'ortgages de8osited into
t(e trust* for co/8liance to o"tain t(e AAA rating it( t(e securities
1'
http://www.law.cornell.edu/uscode/text/26/860Ghttp://www.law.cornell.edu/uscode/text/26/860Ghttp://www.law.cornell.edu/uscode/text/26/860Ghttp://www.law.cornell.edu/uscode/text/26/860G
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ratings agencies reHuired "5 t(e Trust* and also /andated for
co/8liance it( DS rule 601 fro/ S8onsor
Barcla5s Bank containing -efendants alleged Note andIor 'ortgage.
Dn t(e case at Bar* &lainti+ s(os not 1 iota of 8roof t(at said
-e8ositor SAB e!er recei!ed or de8osited t(e alleged 'ortgage and
Note or S&> into t(e &lainti+ Trust.
Dn t(e case at Bar* &lainti+ s(os not 1 iota of 8roof t(at said
&lainti+ Trust e!er transferred t(e alleged 'ortgage and Note to t(e
&lainti+ Trusts Trustee* Wells Fargo Bank N.A. (o is t(e &lainti+ in
t(is case.
Dt is essential for t(e courts to understand t(at "efore t(e alleged
note /ortgage could "e 8laced it(in an5 ?'DC trust* eac( of
t(ese ste8s as /andated "5 N.G. ?.&.T.#* D..C. reHuire/ents AN- "5
t(e contractual ter/s found it(in t(e &SA (ic( as signed and
agreed u8on "5 t(e 8artici8ants of t(e securitization. T(e rules for t(e
de8osit of all of t(e Notes 'ortgages allegedl5 (eld it(in t(e 8ool
1 ?
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of assets oned "5 t(e trust are strict and are /andated to "e ad(ered
to 8unctiliousl5.
As stated in t(e NGSBA NG Business #a ,ournalUSu//er 2012U>ol.
16 UNo. 1 8g. ;;L @.he 8ortgage -ecuritiBation .ransaction ?n 10&(, Congress changed the taD code 4neof these changes was the creation of the
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T(e &SA 1 reHuires t(at eac( 8art5 to t(e sale of t(e /ortgage
loans endorse eac( 8ro/issor5 note to t(e net 8art5 in t(e c(ain of
title until t(e 8ro/issor5 note and /ortgage is deli!ered to t(e
Trustee for t(e "ene)t of t(e Trust. T(is reHuire/ent is included in
t(e &SA and is found at Section 2.01 " (ic( in 8art readsL6b7 ?n connection with the transfer and assignment of each 8ortgage #oan, the $epositor has deliveredor caused to be delivered to the .rustee for the benefit of the Certificateholders the followingdocuments or instruments with respect to each 8ortgage #oan so assigned:
6i7 the original 8ortgage =ote bearing all intervening endorsements showing a complete chain of endorsement from the originator to the last endorsee
6ii7 the original of any guarantee eDecuted in connection with the 8ortgage =oteE
6iii7 the original 8ortgage with evidence of recording thereon or a certified true copy of such8ortgage submitted for recording10
6iv7 the originals of all assumption, modification, consolidation and eDtension agreements, if any,with evidence of recording thereonE
6v7 the original Assignment of 8ortgage for each 8ortgage #oan endorsed in blan/E
6vi7 the originals of all intervening assignments of 8ortgage 6if any7 evidencing a complete chainof assignment from the applicable originator to the last endorsee with evidence of recordingthereon
6vii7 the original mortgagee title insurance policy
6viii7 the original or, if unavailable, a copy of any security agreement, chattel mortgage orequivalent document eDecuted in connection with the 8ortgage 6if provided7
&lainti+ 8ro+ers no series of endorse/ents of t(e alleged
8ro/issor5 note reecti!e of eac( 8art5 (o (ad an alleged oners(i8
interest in t(e alleged 8ro/issor5 note.
Furt(er* t(is c(ain of endorse/ents* or rat(er t(e lack t(ereof* in
order to co/8l5 it( t(is Trusts &SA* ould (a!e (ad to "e co/8lete
on or "efore t(e closing date7 of t(e trust s8eci)ed it(in t(e &SA of
t(is securitization "ut in no e!ent /ore t(an =0 da5s fro/ t(e closing
1& .he .rustFs 9ooling and -ervicing Agreement is a 9ublic $ocument available here+http:IIwwwsecinfocomId
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date of t(e trust 8ursuant to section 2.02 of t(e &SA. T(e a"sence of
t(ese endorse/ents on t(is 8ro/issor5 note is not onl5 !er5
co/8elling 8roof of lack of note (older status* "ut also 8roof of
&lainti+s fraud in t(e 8roduction to t(e Court of t(e Assign/ent of
'ortgage ?(i"it ?7 (ic( "5 t(e ter/s of t(e trusts ongo!erning docu/ent &SA cannot* does not and cannot no 8ost
trust closing date e!er legall5 eist.
Ender t(e ter/s of t(e trust (ic( are contractuall5* legall5
go!erned under NG ?.&.T.#.* t(e contracts "eteen t(e 8arties &SA*
andIor ECC V = in t(e case at Bar* t(ere are un/et reHuire/ents for
t(e c(ain of title "5 t(e foreclosing entit5 to "e Huali)ed as a &?T?7
8erson entitled to enforce. Dn ot(er ords* single endorse/ents in
"lank* clai/ing t(at an5 8art5 in 8ossession of a note can enforce a
note* e!en a t(ief* ski88ed assignees* no 8roof of 9older in -ue Course
does not ork. Dn t(e case at "ar* t(e trusts Trustee is s8eci)call5
N%T alloed to on an asset acHuired out of t(in air on its on its
sole eistence is for ser!ice to t(e Trust. An5t(ing done "5 an5 trust
8artici8ant in contra!ention to t(e trusts indenture is "5 contractual
agree/ent >%D- at its ince8tion. As suc(* in t(e case at Bar* s(ould
t(e Assign/ent of 'ortgage to &lainti+ "e dee/ed legiti/ate* t(en t(e
&lainti+ Trustee ould "e a non legal entit5. Dn essence its a catc($22.
?it(er a5* &lainti+ lacked t(e ca8acit5 to in!oke t(e 4urisdiction of
t(e court to initiate t(eir action.
T(e e!idence in t(e collateral )le s(os an utter and co/8lete
failure of t(e 8arties to t(is alleged securitization to actuall5 con!e5
t(is alleged 8ro/issor5 note to t(is alleged Trust as as articulated "5
t(e -efendant in eac( and e!er5 8re!ious 8leading. T(e 8lainti+
Trustee (as o+ered no 8roof of oners(i8 and t(e collateral )le
8ro+ered "5 t(e &lainti+ t(roug( -isco!er5 clearl5 de/onstrates t(at
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t(is loan as not securitized into nor as it e!er transferred to t(is
Trust.
Assu/ing t(e note andIor /ortgage at issue could so/e(o
retroacti!el5 "e 8ro8erl5 and legall5 de8osited into t(e Trust* t(eCourt s(ould also "e /ade aare t(at Sections 2.0; d.* e.* (.* 3.01 c.*
3.1; (* :.02* c* .11 of t(e &SA are all s8eci)c to t(e case at "ar
(ic( set fort( furt(er e8licit restrictions on t(e 8oers of t(e
Trustee* -e8ositor and t(e Ser!icer of t(e trust7 and (ic( 8ro(i"its
t(e Trustee* -e8ositor and t(e Ser!icer fro/ taking an5 action (ic(
ould 4eo8ardize t(e ?'DC status of t(e Trust. T(e 8roduction of t(e
8ost dated* forged and fa"ricated Assign/ent of 'ortgage is itself a
8ro(i"ited action. T(ese t58es of li/itations are co//on and are
8resent in t(is or a si/ilar for/ in e!er5 8ooling and ser!icing
agree/ent (ic( seeks to create a securitized trust t(at can clai/ t(e
ta "ene)ts of ?'DC status under t(e ES Ta Code.
An5 atte/8t to acce8t a transfer of t(is alleged &ro/issor5 note
after t(e ,anuar5 26* 2006* 8lus =0 da5 closing date of t(e trust ould
(a!e !iolated "ot( S?C code
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on ter/s "een closed for /ore t(an 2 5ears at t(e ti/e t(e
alleged transfer took 8lace.
c. T(ird* t(e alleged 8ro/issor5 note as ne!er endorsed to
t(e Trust "5 t(e -e8ositor and as suc( is de!oid of t(e
reHuired c(ain of endorse/ents reHuired it(in t(e &SA and
(ic( an5 reasona"le /arket 8artici8ant ould e8ect to "e
8resent for t(e 8ur8oses of esta"lis(ing t(e series of true
sales set fort( in t(e &SA to esta"lis( a (ole and co/8lete
c(ain of title of t(e 8ro/issor5 note for t(e 8ur8oses of
"ankru8tc5 re/oteness.
d. Fourt(* T(e clai/ t(at t(e alleged note (as "eentransferred to t(e Trust onl5 "ecause it is endorsed in "lank
si/8l5 ies in t(e face of t(e /andator5 ter/s of t(e &SA and
N.G. ?.&.T.#. and is an etre/e de!iation fro/ t(e industr5
standards* custo/s and 8ractices (ic( 8re!ailed at all ti/es
/aterial to t(is transaction and (ic( 8re!ail toda5.
e. Fift(* an5 transfer alloed to "e acce8ted into t(e trust
8ast t(e trusts on cut$o+ date of de8osits in!okes t(e rat(er
draconian DS /andate of taing t(e ?'DC trusts assets not
at t(e fa!ora"le rate of 0X t(at t(e5 no en4o5* "ut at t(e rate
of 100X of t(e !alue of t(eir assets causing* /assi!e
)nancial losses to t(e Certi)cate 9older Dn!estors.
?Huall5* "5 alloing a -e8osit into t(e trust after t(e trusts
closing date7 as &lainti+s Assign/ent of 'ortgage7 alleges*
&lainti+ Wells Fargo Bank as Trustee again !iolates t(e 8lain
language found it(in t(e &SA at section .11 titled Ta 'atters
section 4 8ara. 6 (ic( reads in 8artL
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=either the -ervicer nor .rustee shall 6i7 permit the creation of any interests in any.rust
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g not knoingl5 or intentionall5 take an5 action or o/it
to take an5 action t(at ould cause t(e ter/ination of t(e
?'DC status of an5 Trust ?'DC created (ereunderL
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!irtue of its ?'DC status (as (at is called a Cut$%+ date7. T(e
Trusts cut$%+ date7 is t(e date in (ic( t(e Trust is /andated "5 la
to sto8 acce8ting de8osits into it. Aside fro/ t(e creation 8ost
foreclosure issue related a"o!e* "5 t(e ter/s of t(e Trusts on &SA*
N.G. ?.&.T.#. D..C. regulations all /andate t(at t(is Assign/ent as !oid at its ince8tion.
T(e Trust is also a eal ?state 'ortgage Dn!est/ent Conduit
?'DC trust and as suc( is (eld in strict regulations it( "ot( D..S.
?'DC trust rules of #a and t(e #as and ules created s8eci)call5
in accordance it( t(e Trust las of eit(er t(e State of t(e Trusts
creation or "5 t(e contractual c(oice of t(e 8artici8ants of t(e Trust*
as is t(e case at "ar. T(e agreed contractual c(oice of #a to "e
ad(ered to "5 t(e Trusts 8artici8ants in t(e case at Bar is Ne Gork
Trust #a ?.&.T.#..
&lainti+s 8roduction of t(e Assign/ent7 is contrar5 to Ne
Gork #a and DS 60. Dn s(ort* t(e &lainti+ Trust eercised a
8ro(i"ited act on 'arc( ;t(* 200.
T(e afore/entioned Assign/ent7 is contrar5 to t(e Trusts
Dnstru/ents and t(erefore >oid 8ursuant to DS 60A$ and Ne Gork
?states* &oers Trusts ?.&.T.# $ &art 2 $ V ; 2.< and t(e Trusts
Dndenture reHuire/ents.
"Any action which deviates from the .rust documents is void S 5%2 Act of trustee incontravention of trust ?f the trust is eDpressed in the instrument creating the estate of the
trustee, every sale, conveyance or other act of the trustee in contravention of the trust,eDcept as authoriBed by this article and by any other provision of law, is void"
No 8ossession of t(e Asset eists until t(ere (as "een a deli!er5
and an acce8tance of t(e Asset and t(e gi!er of t(e Asset (as
relinHuis(ed all do/inion and control o!er t(e Asset signif5ing a true
2
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sale of t(e Asset to t(e &lainti+ Trust t(ere"5 /aking t(e Asset* inter
alia* "ankru8tc5 re/ote and securel5 it(in t(e Trust >ault.
&lainti+s 8ro+ered Assign/ent7 in t(e case at Bar 8ro!es onl5
t(at it as a forged and fa"ricated docu/ent created solel5 for t(e8ur8ose of facilitating t(e eas5 t(eft of -efendants (o/e it(in a
Court of #a and t(e use of t(e Court in t(e laundering of t(e illegal
8a8erork used to create t(e alleged Note 'ortgage and
su"seHuent alleged 'BS Dn!est/ent Trust.
The Trust is a REMI Trust
T(e Trust as for/ed as a ?'DC trust&./ Ender t(e ?'DC
8ro!isions of t(e Dnternal e!enue Code DC7 t(e closing date of t(e
Trust is also t(e startu8 da5 for t(e Trust. T(e closing dateIstartu8 da5
is signi)cant "ecause all assets of t(e Trust are /andated to "e
transferred to t(e Trust on or "efore t(e closing date to ensure
t(at t(e Trust recei!ed its ?'DC status. T(e DC 8ro!ides in
8ertinent 8art t(atJ
@)Dcept as provided in section &(3N6d7627, Tif any amount is contributed to a
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&lainti+ Trust at t(e date s(on on &lainti+s Assign/ent is in
!iolation of DC 60d2 and as suc( is /andated to "e declared
>%D- "5 t(e ter/s found it(in t(e &SA and "5 N.G. ?.&.T.#. D..C.
regulations.21
THE POST DATED ASINMENT .
Dn t(e case at "ar* Wells Fargo Bank* N.A* as Trustee of t(e
Trust7* clai/s to "e t(e sole and eclusi!e oner of t(e securitized
note /ortgage. Df Wells* as Trustee for t(e Trust7 is in fact t(e true
and legal oner* it /ust (a!e acHuired legal title to t(e loan it(in =0
da5s of ,anuar5 1* 2006 t(e trusts closing date7.
For clari)cation of t(e a"o!eL Ne Gork la states t(at transfers
to a ?'DC trust after t(e closing date of t(e trust are !oid. N.G.
?states* &oers and Trusts #a VV 76,&,8* 76.&. l(s5i +& ;(%5 #f
Ame'ic( N&A .* 21 Cal.8tr.
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Furt(er* Section =.02 of t(e &SA s8eci)call5 8ro(i"its t(e
acHuisition of an5 asset for a ?'DC fund after t(e closing date unless
t(e 8art5 8er/itting t(e acHuisition and t(e ND'S net interest /argin
securities Dnsurer (a!e recei!ed an %8inion letter fro/ counsel* at t(e
8art5Zs e8ense* t(at t(e acce8tance of t(e asset ill not a+ect t(e?'DCZs status.
&lainti+ o+ers no suc( e!idence or 8roof t(at a letter (as "een
8ro!ided to s(o co/8liance it( t(ese reHuire/ents of t(e &SA.
&lainti+ (as 8ro+ered22 no e!idence of -e8ositors de8ositing of t(e
note and /ortgage into t(e Trust and (as 8ro+ered no e!idence t(at
t(e trustee (ad aut(orit5 to acHuire t(e note and /ortgage (erein
after t(e trust (ad closed or for t(e 8ur8ose of foreclosure.
-efendant asserts t(at t(e alleged transfer of t(e note
/ortgage to &lainti+ Trust (erein as >%D- a" initio "ecause t(e note
is re8resented to (a!e "een acHuired after t(e trusts closing date and
as suc( is a !iolation of t(e contractual ter/s esta"lis(ed and
/e/orialized it(in t(e Trusts controlling docu/ent* t(e &SA.
W(ereas in %(io #a it /a5 "e 8er/issi"le for a 9older7 to
eecute suit on a note andIor /ortgage* in t(e case at Bar t(e alleged
contraction "eteen 8arties is not "eing done "5 an %(ioan against an
%(ioan. Dnstead it is "eing co//itted "5 a de"t collector (o is an
alleged re8resentati!e of a NG Trust* a trust (ic( is "ound "5 NG
#as and as suc( it is u8 to &lainti+ to 8ro!e not onl5 t(at (e is indeed
t(e true &?T? &erson ?ntitled To ?nforce of t(e alleged Note
'ortgage* "ut also t(at (e (as an5 legal ca8acit5 (atsoe!er to (old
an5t(ing in contra!ention to t(e trust. Dn t(e case at Bar* &lainti+ de"t
collector (as not t(e legal ca8acit5 to e!en "e a 9older7.
22 !lac/Fs 0th+ proffer 6prof%dr7, v2. 6lc7 .o offer or tender 6something, esp evidence7 for immediate acceptanceKCases: Criminal #aw C::o(53E *ederal Civil 9rocedure 231E .rial 65::PL% proffer, n.
25
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&lainti+ de"t collector o+ers onl5 3 signed docu/ents* 4ust 3
8ieces of 8a8er attesting to t(eir alleged legiti/ac5 to foreclose* t(eir
rig(t to "e &?T?. T(ose docu/ents areJ
1. t(e 8ost dated* 8ost created and )led it( t(e court
/ont(s after foreclosure initiation* Assign/ent of
'ortgage (ic( is o"o$Signed23 "5 a knon o"o$
Signer2
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&lainti+s Assign/ent of 'ortgage7 and &lainti+s A+ida!it of Status
of Account and 'ilitar5 Status7 /arked ?(i"it OO7..
THE ALLONE
%n or a"out ,une =* 200:* as t(e e!idence of record s(os 'r.eedZs alleged original lender* 9 Block 'ortgage Cor8.* clai/s t(at
t(roug( t(e use of an alleged eecuted endorse/ent (ic( as
unattac(ed* is inco/8lete* is non$aut(enticated "5 a+ida!it* and is left
uneecuted &a5 to t(e %rder7as in eisting distinctl5 se8arate under
la fro/ "earer 8a8er7 docu/ent entitled allonge7 dated ,une =*
200: fro/ %8tion %ne to OOOOOOOOOO.26
2( o!!ents "f #$e Lavalle To %lorida Supre!e ourt &age '2 =ye #avalle, 9ew 8ortgage ?nstitute, 35I0(&%0305 mortgagefraudsZaolcom @2 ?n fact, a common industry practice was to create an @unattached and an undated @endorsed in blan/ piece of
paper the industry wrongly inferred was an @allongeQ 2 .he unattached piece of paper with an eDecuted endorsementupon its face would then be placed in a file with or without a note, scanned and imaged into an imaging system and thendiscarded, destroyed, concealed, or even later attached if necessary, upon default by a borrower when a servicer neededto create evidence of note ownership or holder status 2' nder CC Article , @indorsement means a signature @ onan instrument, not on a 2lank p%ece o$ paper 2( ?n order for the endorsement on an allonge to be valid, the properdocument custody process that should have been followed was to: a7 determine if room eDisted on the last page of thenote or its bac/side to see if any room eDisted for the endorsementE b7 only if no room eDisted, a blan/ piece of papershould be firmly affiDed to the @last page of the original wet%in/ note, so as to prevent its removal and replacementE c7the first page on the face of the note should then be stamped @Allonge property address, loan number etc should be
placed upon the blan/ piece of paperE and then e7 the endorsement stamp and signature should be placed on the affiDed piece of paper to the note 6ie an allonge7 25 An unattached to an original note blan/ piece of paper is not an allongeAn unattached to an original note blan/ piece of paper with an endorsement on its face is not an allonge either ?f the
endorsement is placed upon the blan/ piece of paper and then the endorsement and signature are placed on the blan/ piece of paper while unattached, all someone has endorsed was the blan/ piece of paper, not the original note itself 2&$arrell 9ierce is a 8ichigan lawyer for the national law firm of $y/ema Nossett 8r 9ierce served as member of theArticle 0 -tudy Committee for the 9ermanent )ditorial !oard for the niform Commercial Code, as Chair of the Article0 *iling 9roject and as the primary drafter of the ?nternational Association of Commercial AdministratorsF 8odelAdministrative
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Dt is -efendants 8osition t(at along "eside t(e knon "ogus*
forged and fa"ricated Assign/ent of 'ortgage referenced a"o!e* t(e
8ro+ered Allonge7 fro/ %8tion %ne 'ort. Co. to "lank7 is also afraud and a s(a/ created solel5 to re8resent to t(is Court &lainti+s
interest in an alleged Note 'ortgage (ic( in trut( (as no legal
!alue (atsoe!er ece8t to 8ro!e &lainti+s and &lainti+s Counsels
illingness to forge* to fa"ricate* to create and "ring into t(is court
fraudulent docu/ents created solel5 to induce t(e Courts "ias at
-efendants and t(e Courts e8ense.
T$e >ells F('*# M(%u(l
-efendant su"/its ne and 8re!iousl5 uno"taina"le e!idence in
t(is case of &lainti+ Wells Fargo Banks recentl5 8u"licl5 8u"lis(ed* in
?n addition, secured parties in 2!ere possession have priorit$ over other secured parties e4cept those ,hohave control 2possession plus indorse!ent, so the failure to achieve full control does not normally impair
priority 6no one else will have possession eDcept in rare cases7 CC S0%36d7
o! even if a separate indorsement is not initially “affixed” to an instrument! a secured party inAttachedE d7identifying information on the note such as origination date, borrower name,
possession normally maintains first priority and has the power to negotiate the instrument upon
default".here are occasions, however, when having an indorsement is critically important 4ne would be the relatively rarecase where one competing secured party has possession for itself as well as for the other competing secured party,so both would be in possession and priority could depend on the effectiveness of an indorsement Another would bewhere the ma/er of a negotiable instrument has defenses against the named payee but the secured party, with theindorsement, would be a holder in due course Het another would be an assignment of a note or a casual pledgewhere the related documents do not clearly provide the lender with the rights of a holdernder CC Article , which applies to @negotiable instruments 6as defined in Article 7 and whichis commonly applied by courts to non%negotiable instruments, @ indorse!ent* !eans a signature )on aninstru!ent %or the purpose of deter!ining ,hether a signature is !ade on an instru!ent( a paper affi4ed
to the instru!ent is a part of the instru!ent.* - 3/062a 2e!phasis supplied. -nder this rule( a
separate assign!ent docu!ent is not sufficient to create the re7uisite indorse!ent( unless it is )affi4ed* to
the instru!ent.
-ome 8ichigan assignees found out the hard way how important it is to have oneFs separate indorsement @affiDed?n one case, a separate indorsement was not attached to the note in question and the assignee was unwilling to
produce the underlying assignment of loans agreement .he court held the separate indorsement was not effectiveand, because it referenced the unproduced underlying agreement, it did not prove an absolute assignment wasintended Brown Bark 99 L/ v. Ba4 Are Floor Cover%ng : #es%gn 9nc. Case =o 20(((3, 68ich Ct App 8ay 1,23117 ?n the other case, the assignee ultimately had two problems after it too/ a note and placed it in an envelopewith a separate indorsement =ot only was the separate indorsement ineffective because it was not affiDed to thenote, it turned out the @note was in fact a color copy of the original note, so the assignee did not even have
possession of the note ithout ever having had possession, the assignee did have standing to enforce the note as alost note under CC S%30 Sha4a v. ;aram Case =o 3&03' 68ich Ct App 8ay (, 2317 9ledgees and otherassignees of notes need to ensure that original notes are delivered to them, and if indorsements are separately
provided, that transaction documents properly authoriBe them to attach the separate indorsements whenappropriate
3
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(ouse /anual titled >ells F('*# H#me M#'t*(*e F#'ecl#su'e
Att#'%ey P'#cedu'e M(%u(l Ve'si#% ,= 8ro!ing scienter t(roug( a
8attern and 8ractice of &lainti+s and &lainti+s Counsel in t(e
creation of forged and fraudulent docu/ents created solel5 to allo
&lainti+ and &lainti+s Counsel to fraudulentl5 steal free (o/es fro/(o/eoners (en t(e5 lacked t(e legal rig(t to do so "ecause t(e5
lacked t(e /andated 8roof to acco/8lis( it legall5.
A distinguis(ed colleague* Ne Gork "ankru8tc5 attorne5 #inda
Tirelli (as "een orking in e8osing t(ese re/ediation7 8ractices.
T(eir ta$da7 &err5 'ason$like /o/ents of e!idence all of a sudden
a88earing in foreclosure and "ankru8tc5 litigation are not a/using. %n
'arc( 12* 201
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&%'m not here as a human #ein. %'m here as arepresentative of )ells Faro.*
Dn (is o8inion attac(ed as ?(i"it 9* ,udge ?lliott c(astised Wells
Fargo for t(eir outrageous and re8re(ensi"le7 decisions and
dece8ti!e and intentional conduct7 t(at dis8la5ed a co/8lete andtotal disregard for t(e rig(ts of t(e "orroers. 9e ent on to stateJ
Defe%d(%t >ells F('*# #pe'(ted f'#m ( p#siti#% #fsupe'i#'ity p'#+ided by its e%#'m#us 0e(lt$&= :>ellsF('*#2s decisi#% t##5 (d+(%t(*e #f (% #b+i#usly 9%(%ci(lly +ul%e'(ble f(mily=
t(e 4udge continued* noting t(at Wells Fargo s(oed no e!idence of
re/orse for t(e (ar/ caused. T(e 4udge rote.
%n fact the Court recalls the lack of remorse andhumanity illustrated #y a )ells Faro corporaterepresentative who testi+ed ,%'m not here as a human#ein. %'m here as a representative of )ells Faro 7
T$e RO;O6SINED DOCs&
W(en &lainti+* se!eral /ont(s (fte' initiating foreclosure*
introduced into t(e court record a forged and fa"ricated* "ack dated
and o"o$Signed docu/ent titled Assign/ent of 'ortgage7* &lainti+s
Counsel certi)ed t(e legiti/ac5 of a docu/ent t(at could* "5 t(e !er5
ter/s it(in t(e controlling docu/ent of t(e Trust &SA itself* ne!er
8ossi"l5 eist.
T(is docu/ent is titled Assign/ent of 'ortgage7. E8on
ins8ection t(oug(* t(is docu/ent is in realit5 not onl5 t(e alleged
assign/ent of t(e alleged /ortgage "ut also t(e alleged assign/ent of
t(e alleged note.
Also u8on ins8ection it can "e found t(at t(is docu/ent as
attested to and signed "5 one 's. To8aka #o!e. 's. #o!e is an
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Ana,4t%cs Approved 7o2oDT7 ?. OO7 (ic( are
"ot( signed "5 one 's. To8aka #o!e* as as 8re!iousl5 articulated to
t(is Court "5 -efendant in all of -efendants 8re!ious 8leadings. T(e
a"o!e /entioned forged* fraudulent and conclusor5 A+ida!it7 and
Assign/ent of 'ortgage ('e . #f t$e t$'ee s#lely si*%ed
d#cume%ts &lainti+ 8resented to t(e court in t(eir case to esta"lis(
t(eir alleged oners(i8 of t(e alleged Note 'ortgage and t(eir
su"seHuent rig(t to initiate t(is foreclosure suit against -efendant.
T(e a"o!e #o!e conclusor5 a+ida!it re8resents t(at it is "ased
on #o!es fa/iliarit5 it( -efendants account stating #$iant has
access o% and has personal knowledge o% the acco&nts o% said compan!,
and speci'call! with the acco&nt o% (ohn L. )eed, de%endant herein.7
#o!e also a!ers t(at said acco&nt is in de%a< and that plainti$ has
elected to call the entire *alance o% said acco&nt d&e and pa!a*le..7.
W(ile t(e #o!e A+ida!it states t(at #o!es 8ersonal knoledge is
li/ited to (er re!ie of %8tion %ne 'ortgage Co. as Ser!icing Agent
for &lainti+* #o!e fails to identif5* descri"e or anne t(e 8articular
"usiness records u8on (ic( (er li/ited knoledge is "ased.
Signi)cantl5* t(e #o!e 'o!ing A+ida!it /akes t(e conclusor5
re8resentation t(at 8lainti+ (as "een in continuous 8ossession of t(e
note and /ortgage since 8rior to t(e co//ence/ent of t(is action
it(out 8ro!iding an5 factual details* or t(e source of #o!es
knoledge. Dn addition to a lack of foundation* t(e #o!e 'o!ing
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A+ida!it fails to 8ro!ide e!idence t(at t(e originating lender* 9
Block Dnc.* indorsed and 8(5sicall5 deli!ered t(e alleged eed Note*
t(roug( t(e 8ro8er and /andated legal 8rocesses necessar5 to
e+ectuate a true transference of oners(i8 it( co/8lete rig(ts and
interests t(ereof to eac( 8artici8ant in t(e securitization c(ain andt(en )nall5 to t(e Asset Backed ecei!a"les Trust as is a reHuire/ent
found it(in t(e &SA* a reHuire/ent of N.G. ?.&.T.#. and a reHuire/ent
of DC.
-efendant (as re8eatedl5 denied 8lainti+s actions on t(e ground
t(at &lainti+ Wells Fargo Bank as Trustee for trust lacks standing to
foreclose.
S8eci)call5* -efendant contends and (as ala5s contended in
eac( and e!er5 of (is 8leadings t(at 's. #o!e also lacked t(e actual
aut(orit5 to eecute t(e %8tion %ne Assign/ent.
T(e a"o!e referenced a+ida!it of ,o(n %"rien* co/"ined it( t(e
se!eral ot(er factual inconsistencies t(e -efendant (as 8re!iousl5
articulated to t(is Court. G/ G, 32* 8ro!e "e5ond an5 dou"t t(at
&lainti+s 8osition* a 8osition (ic( is co/8letel5 !oid of legalstanding to (a!e initiated t(is foreclosure action against -efendant*
could not (a!e "een acco/8lis(ed it(out t(e use of* as as
8re!iousl5 articulated "5 -efendant*33 forged and fraudulentl5 created
docu/ents* created s8eci)call5 "5 and deli!ered into t(is Court (ile
20 Answer of $efendant ohn
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"eing Certi)ed "5 &lainti+s Counsel as "eing true* 4ust and accurate
for t(e sole 8ur8ose of "linding t(is Court to t(e legal realities of t(eir
8osition and t(e situation (ic( t(en lead to t(e ulti/ate t(eft of
-efendants (o/e* loss of -efendants 8ersonal and "usiness in!entor5
and 8ossessions* forced (o/elessness u8on -efendant and "eca/e t(ecause of -efendants /ental in4ur5 (ile alloing &lainti+s on
un4ust enric(/ent. Dn essence* t(e5 not onl5 got a free (ouse* t(e5 also
got t(e Court to launder t(eir dirt5 /one5.
-efendants 8leadings and e(i"its s(o undenia"le p'##f t(at
eac( of t(e entities in!ol!ed in t(eir entiret5 and t(roug(out t(e entire
c(ronolog5 ti/e$line of t(is alleged /ortgage did fail in t(eir legal
and /andator5 due diligence duties and reHuire/ents to sign* date*
aut(enticate* record and /ore stated in /ore s8eci)cit5 infra. T(e
true (older in due course of t(e alleged Note 'ortgage and true
(older of t(e legal rig(t to foreclose u8on t(is alleged Note
'ortgage is entirel5 a falsit5 and under no circu/stance of fact is it*
as it* nor can it e!er "e t(e &lainti+ Wells Fargo Bank NA. as Trustee
for t(is Trust (o ould (a!e t(e legal aut(orit5 or rig(t to "ring a
foreclosure action against -efendant eed..
As a result* t(e Courts No!e/"er 13t(* 200 entr5 granting
&lainti+s /otion for 4udg/ent and issuing a decree of foreclosure is
!oid a" initio as o88osed to !oida"le.
Accordingl5* "ased u8on t(e foregoing* -efendant res8ectfull5
reHuests t(at t(e No!e/"er 13t(
200 entr5 "e !acated and t(is /atterre/anded "ack to t(e Ci!il Court it( instruction to dis/iss*
instruction to Huiet title and eac( of -efendants Counterclai/s to "e
lafull5 ad4udged.
5
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Respectfull$ su'!itted(
888888888888888888888888
9ohn +. Reed
4 /aple .ve%enterville, 7hio 4545++=?-@[email protected]
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Kntil this opinion appears in the 4hio 4fficial
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)ighth $istricts on the following issue: "?n a mortgage foreclosure action, the
lac/ of standing or a real party in interest defect can be cured by the assignment of
the mortgage prior to judgment"
[\2] *ederal Wome #oan commenced this foreclosure action before it obtained anassignment of the promissory note and mortgage securing the -chwartBwaldsF loan .he
-chwartBwalds maintained that *ederal Wome #oan lac/ed standing to sue .he trial court
granted summary judgment in favor of *ederal Wome #oan and entered a decree of
foreclosure .he appellate court affirmed, holding that *ederal Wome #oan had remedied
its lac/ of standing when it obtained an assignment from the real party in interest
[\] Wowever, standing is required to invo/e the jurisdiction of the common pleas
court, and therefore it is determined as of the filing of the complaint .hus, receiving an
assignment of a promissory note and mortgage from the real party in interest subsequent
to the filing of an action but prior to the entry of judgment does not cure a lac/ of standing
to file a foreclosure action
6\] Accordingly, the judgment of the court of appeals is reversed, and the cause is
dismissed
%acts and &rocedural :istor$
6\'] ?n =ovember 233(, $uane and ulie -chwartBwald purchased a home in
Venia, 4hio, and received a mortgage loan from #egacy 8ortgage in the amount of
J2'1,2'3 .hey eDecuted a promissory note and a mortgage granting #egacy 8ortgage a
security interest in the property #egacy 8ortgage then endorsed the promissory note as
payable to ells *argo !an/, =A, and assigned it the mortgage
[\ (] ?n -eptember 233&, $uane -chwartBwald lost his job at !arco, ?nc, and the
-chwartBwalds moved to ?ndiana so he could accept a new position
.hey continued ma/ing mortgage payments as they tried to sell the house in Venia, but
they went into default on anuary 1, 2330 ?n 8arch 2330, ells 2
anuary .erm, 2312
3
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*argo agreed to list the property for a short sale, and on April &, 2330, the -chwartBwalds
entered into a contract to sell it for J2'0,033, with closing set for une &, 2330
[\5] Wowever, on April 1', 2330, *ederal Wome #oan 8ortgage Corporation
commenced this foreclosure action, alleging that the -chwartBwalds had defaulted on their
loan and owed J2',3&'1& plus interest, costs, and advances ?t attached a copy of themortgage identifying the -chwartBwalds as borrowers and #egacy 8ortgage as lender, but
did not attach a copy of the note, claiming that "a copy of Kthe noteL is currently
unavailable"
[\&] ulie -chwartBwald then contacted ells *argo about the foreclosure
complaint -he testified, "? was told that it was standard procedure and dont worry about
it because we were doing a short sale" .he -chwartBwalds did not answer the complaint
[\0] 4n April 2, 2330, *ederal Wome #oan filed with the court a copy
of the note signed by the -chwartBwalds in favor of #egacy 8ortgage .he final
page carries a blan/ endorsement by ells *argo placed above the endorsement
by #egacy 8ortgage payable to ells *argo
[\13] 4n 8ay 1', 2330, ells *argo assigned the note and mortgage to
*ederal Wome #oan, and *ederal Wome #oan filed with the court a copy of the
assignment on une 15, 2330 ?t then moved for a default judgment and a
summary judgment, but the trial court discovered that *ederal Wome #oan had
failed to establish a chain of title because no assignment of the mortgage from
#egacy 8ortgage to ells *argo appeared in the record
BC11 $uring this time, even though it had assigned its interest in the
note and mortgage to *ederal Wome #oan, ells *argo continued discussing a
short sale of the property with the -chwartBwalds, but delays in this process
eventually caused the -chwartBwalds buyer to rescind the offer 4n $ecember
1, 2330, the trial court granted the -chwartBwalds leave to file an answer .hat
-9
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Civ
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maintains that it "proved that it was such a person prior to judgment"
[\10] Accordingly, the question presented is whether a lac/ of standing
at the commencement of a foreclosure action filed in a common pleas court may
be cured by obtaining an assignment of a note and mortgage sufficient to establish
standing prior to the entry of judgmentLa, and +nal$sis .
Stand%ng to Sue
[\23] .he 4hio Constitution provides in Article ?>, -ection 6!7E ".he
courts of common pleas and divisions thereof shall have such original jurisdiction
over all "ust%c%a2le matters and such powers of review of proceedings of
administrative officers and agencies as may be provided by law" 6)mphasis
added7
[\21] ?n Cleveland v Shaker Hts. 3 4hio -td 0, '1, '35 =)2d 2
6? 0&57, we stated:
A=hether a part$ has a sufficient staFe in an other,ise
Gusticia'le controvers$ to o'tain Gudicial resolution of that
controvers$ is ,hat has traditionall$ 'een referred to as the
7uestion of standing to sue. =here the part$ does not rel$ on an$
specific statute authorizing invocation of the Gudicial process( the
7uestion of standing depends on ,hether the part$ has alleged
...... a personal staFe in the outco!e of the controvers$. H
(
anuary .erm, 2312
9d quoting M%ddletown v Ferguson 2' 4hio -td 51, 5', 0' =)2d &3
610&(7, quoting S%erra Clu2 v Morton 3' - 525, 51%52, 02 -Ct 1(1, 1
#)d2d (( 610527, quoting Baker v Carr (0 - 1&(, 23, &2 -Ct (01, 5
#)d2d (( 610527 -imilarly, the nited -tates -upreme Court observed in
Steel Co. v C%t%zens $or a Better -nv%ronment '2 - &, 132, 11& -Ct 133,
13 #)d2d 213 6100&7, that "KsLtanding to sue is part of the common
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v Alta erde 9ndustr%es lnc. 01 *2d 13'', 13(1 6'th Cir10017
[\2'] *urther, invo/ing the jurisdiction of the court "depends on the state
of things at the time of the action brought," Mullan v 0orrance 22 - '5, '0,
( #)d 1' 61&27, and the -upreme Court has observed that "KtLhe state of
things and the originally alleged state of things are not synonymousEdemonstration that the original allegations were false will defeat jurisdiction"
7ockwell 9nternatl. Corp. v Un%ted States '0 - '5, 5, 125 -Ct 105,
1(5 #)d2d 103 623357
[\2(] .hus, "KpLost%filing events that supply standing that did not eDist
on filing may be disregarded, denying standing despite a showing of sufficient
present injury caused by the challenged acts and capable of judicial redress" 1A
right, 8iller G Cooper, Federal /ract%ce and /rocedure 0, -ection '1
(+88> see ?rupo #ata$lu5 v Atlas ?lo2al ?roup L./. '1 - '(5, '5', 12
-Ct 1023, 1'& #)d2d &(( 62337, quoting Caterp%llar 9nc. v Lew%s '10 -
(1, 5', 115 -Ct (5, 1( #)d2d 5 6rejecting argument that" finality,
efficiency, and judicial economy " can justify suspension of the time%of%filing
rule7E Utah Assn. o$ Count%es v Bush '' *d 130, 1131, and fn ( 613th
Cir233(7 6a plaintiff cannot rely on injuries occurring after the filing of the
complaint to establish standing7
&
anuary .erm, 2312
[\25] .his principle accords with decisions from other states holding that
standing is determined as of the filing the complaint See e.g. #eutsche Bank
!atl. 0rust v Brum2augh 2312 4M , 253 9d 1'1, \ 11 6"?f $eutsche !an/
became a person entitled to enforce the note as either a holder or nonholder in
possession who has the rights of a holder a$ter the $oreclosure act%on was $%led
then the case may be dismissed without prejudice _ _ _" Kemphasis addedL7E U.S.
Bank !atl. Assn. v ;%m2all 103 >t 213, 2311 >. &1, 25 Ad 13&5, \1 6"-
!an/ was required to show that at the t%me the compla%nt was $%led it possessed
the original note either made payable to bearer with a blan/ endorsement or made
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payable to order with an endorsement specifically to - !an/" Kemphasis
addedL7E Mtge. -lectron%c 7eg%strat%on S4s. 9nc.v Saunders 2313 8) 50, 2 Ad
2&5, \ 1' 6"ithout possession of or any interest in the note, 8)
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jurisdiction may proceed to adjudicate the matter Civ
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effect as if the action had been commenced in the name of the real party in
interest
[\2] Considering Civ
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that an action should not be forfeited because of an honest mista/eE it is not a
provision to be distorted by parties to circumvent the limitations period"
?ardner v State Farm F%re G Cas. Co. '*d '', '( 6d Cir233&7, quoting
Un%ted States e5 rel. Wul$$ v. CMA 9nc. &03 *2d 1353, 135' 60th Cirl0&07
[\ '] .he -iDth Circuit Court of Appeals decision in Eur%ch 9ns. Co. v.
Log%trans 9nc. 205 *d '2& 6(th Cir23327, illustrates this point ?n that case, a
fire at a warehouse destroyed property insured by American Nuarantee, which
paid out a claim for damages Wowever, another insurance company, `urich
-witBerland, filed a complaint claiming to be the insureds subrogee,
notwithstanding the fact that `urich -witBerland had neither issued an insurance
12
anuary .erm,2312
policy nor paid out any money to the insured .he defendants moved to dismiss
for lac/ of standing, and `urich -witBerland sought to substitute American
Nuarantee as the real party in interest pursuant to *ed
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standing, and it cannot cure its standing problem through an invocation of
*ed
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no effect on the underlying duties, rights, or obligations of the parties
onclusion
[\61 ?t is fundamental that a party commencing litigation must have
standing to sue in order to present a justiciable controversy and invo/e the
jurisdiction of the common pleas court Civ
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##C, Community #egal Aid -ervices, ?nc, 4hio 9overty #aw Center, #egal
Aid -ociety of Columbus, -outheastern 4hio #egal -ervices, #egal Aid of
estern 4hio, and 9ro -eniors, ?nc
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E:IJITS
)Dhibit @A
"riginal o!plaint
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''
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'(
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'5
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'&
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'0
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(3
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(1
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(2
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(
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(
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('
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A##4=N) *rom WG< !loc/ to 4ption 4ne
((
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Allonge 4ption 4ne to !lan/
(5
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(&
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(0
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53
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51
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52
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5
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5
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5(
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55
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E4hi'it )J*
Assignment of 8ortgage from 4ption 4ne 8ort Corp
to ells *argo !an/ =a
5&
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E4hi'it )*
=otice of *iling of Assignment
50
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&3
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&1
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&2
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&
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E4hi'it )E* &urchase &rice K Ter!s +gree!ent
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Exhibit “E2 Purchase Price ! "er#s Agree#ent signaturepage
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E4hi'it )
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Exhibit “$,%E&FAA'M(PAWA) alidity o. Mortgage *ocu#ents ! /nership
&&
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Exhibit “$%E&FAA'M(PAWA) /rigination *ue *iligence
&0
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Exhibit “$5%E&FAA'M(PAWA) +ignatory page 1
03
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Exhibit “$%E&FAA'M(PAWA) +ignatory page 2
01
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Exhibit “$3%E&FAA'M(PAWA) +ignatory page ,
02
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4F!rien Affidavit 1
0
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0
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Affidavit of .opa/a #ove
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0(
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05
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