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Kramer and Kaslow

25 Aug

Advocates Alliance

K2 Law NorthWest

Kramer Kaslow, Oceanside

K2 Law Costa Mesa

Genesis Associates

Property Solutions

US Financial Advantage

MPowered Financial Solutions

Tommy J. Guerrazzi

Brian P. Crawley

Lead Producers

Homelife Solution

Sue Your Lenders

Yvonne Israelsen

Metropolitan LG

Prop Solutions Inc.

Real Estate Debt Relief

Reduce Your Loan

Sue My Bank Now

Matt Silverman

Alan Rhein

Kramer Stein Law

Bill Span

Charity Blossom

Loan Mod Bureau
http://www.k2-law.com/
http://www.myk2law.com/

http://kramerkaslow.com/
http://www.AdvocatesAlliance.com/

http://mpoweredfinancial.com/
http://www.sueyourlenders.com/
http://www.suemybank.us/

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http://massjoinderaction.com/
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http://kandklitigation.com/

http://www.youtube.com/OIb9qDar7Ec
http://press-release.com/startoverusa
http://brianpcrowley.com/

http://www.theloanmodificationbureau.com/
http://homeownersadvocateonline.com/
http://kramersteinlaw.com

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http://mpoweredfinancial.com/

http://usk2law.com/
http://thebankslied.com/
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http://www.theamericanrepublic.com/

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http://www.keepusinourhome.com
http://www.massjoindersuit.com

http://www.propsolutionsinc.com/
http://www.robowens01.com/
http://mvipps.com

http://www.keepusinourhome.com/ http://reduceyourloan.info/
http://www.usfinancialadvantage.com

http://suemybanknow.com
http://fidelityfinancegroup.com/
http://thelenderlawsuit.com/

http://www.legalfreeandclear.com/
http://www.charityblossom.org/
http://www.legacycareerdevelopment.com/

http://metropolitanlg.com/
http://tamayohomes.us/
http://kramer-kaslowlaw.com/

http://www.kramerkaslowlaw.com/
http://www.howcanistay.org
http://www.lmtpartners.net/

http://realestateanddebtrelief.com/l
http://kramerkaslow.org/

How Can I Stay

Report: Kramer and Kaslow
Reported By: Stan (San Diego California United States of America)
Kramer and Kaslow Chris Fox and Gary Loan Mod shops use Kramer and Kaslow to push there fake litigation! , Internet
Category: Attorneys & Legal Services

Submitted: Thursday, December 09, 2010
Last posting: Friday, February 18, 2011
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KRAMER AND KASLOW is another Law Firm acting as a front for all these ex loan mod shops who no longer are in business. Kramer and Kaslow used to be a intake office for loan modification companies to submit their loan modifications to them and they just took the money. Now all of a sudden they doing this “MASS JOINDER” called the Roland vs. Bank of America but quite frankly I don’t believe they have any agreement with the main attorney on this case nor have I ever seen ONE retainer signed by the main attorney on all these cases they are taking money on. They also are advertising that Kramer and Kaslow is doing their own “Litigation”. Once again I haven’t seen even one case being filed under Kramer and Kaslow. What I do know is this operation is being run by Gary and Chris Fox. Gary is an EX LOAN MOD agent and Chris Fox.. Well I think his name speaks for himself. He used to OWN Green Credit and that got Raided with a Criminal Search Warrant. (See link below) Then he left to work at United Law Group another operation that was raided and shut down. Chris Fox is back to his old tricks and is going around town getting every broker shop to send their previous loan modifications to Kramer and Kaslow and spin it as Litigation now. Well hers the issue with the business. 1) YOU ARE NOT ALLOWED TO FEE SPLIT WITH NON ATTORNEYS. 2) YOUR ARE NOT ALLOWED TO SOLICIT FOR LITIGATION “CAPPERS”. These are just some of the MANY rules Kramer and Kaslow are violating. I would stay clear from Kramer and Kaslow as they have no idea how to operate as a law office and are using this name to try and bait new victims. Here is my suggestion to any law firm you go to. BE PREPARED! Ask to speak with the attorney. If you don’t feel like he knows anything then don’t waste your time. If the attorney is not there dont waste your time. Ask to see the filing of the case. Ask if you join when your name will be added to the case and get that in writing. If they are representing other firms ask to see the agreements between that firm and the firm they so called are working with. And of course DO YOUR HOMEWORK!!
(Here is just a tip of the ice berg about Chris and those running Kramer and Kaslow)
http://www.loansafe.org/criminal-search-warrant-issued-for-green-credit-solutions-files
http://www.loansafe.org/united-law-group
http://www.loansafe.org/green-credit-solutions-california-dre-accusations-detailed
http://articles.ocregister.com/2010-01-13/crime/24565468_1_law-firms-loan-modification-mortgage-aid
This report was posted on Ripoff Report on 12/9/2010 10:53:21 AM and is a permanent record located here:
http://www.ripoffreport.com/attorneys-legal-services/kramer-and-kaslow/kramer-and-kaslow-chris-fox-an-fe5e2.htm.
Ripoff Report has an exclusive license to this report. It may not be copied without the written permission of Ripoff Report.

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Biggest Defaulters on Mortgages Are the Rich

10 Jul

By DAVID STREITFELD
Published: July 8, 2010

LOS ALTOS, Calif. — No need for tears, but the well-off are losing their master suites and saying goodbye to their wine cellars.

Peter DaSilva for The New York Times

A foreclosed house in Los Altos, Calif., where five such homes were recently set for an auction.

The housing bust that began among the working class in remote subdivisions and quickly progressed to the suburban middle class is striking the upper class in privileged enclaves like this one in Silicon Valley.

Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population.

More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.

By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent.

Though it is hard to prove, the CoreLogic data suggest that many of the well-to-do are purposely dumping their financially draining properties, just as they would any sour investment.

“The rich are different: they are more ruthless,” said Sam Khater, CoreLogic’s senior economist.

Five properties here in Los Altos were scheduled for foreclosure auctions in a recent issue of The Los Altos Town Crier, the weekly newspaper where local legal notices are posted. Four have unpaid mortgage debt of more than $1 million, with the highest amount $2.8 million.

Not so long ago, said Chris Redden, the paper’s advertising services director, “it was a surprise if we had one foreclosure a month.”

The sheriff in Cook County, Ill., is increasingly in demand to evict foreclosed owners in the upscale suburbs to the north and west of Chicago — like Wilmette, La Grange and Glencoe. The occupants are always gone by the time a deputy gets there, a spokesman said, but just barely.

In Las Vegas, Ken Lowman, a longtime agent for luxury properties, said four of the 11 sales he brokered in June were distressed properties.

“I’ve never seen the wealthy hit like this before,” Mr. Lowman said. “They made their plans based on the best of all possible scenarios — that their incomes would continue to grow, that real estate would never drop. Not many had a plan B.”

The defaulting owners, he said, often remain as long as they can. “They’re in denial,” he said.

Here in Los Altos, where the median home price of $1.5 million makes it one of the most exclusive towns in the country, several houses scheduled for auction were still occupied this week. The people who answered the door were reluctant to explain their circumstances in any detail.

At one house, where the lender was owed $1.3 million, there was a couch out front wrapped in plastic. A woman said she and her husband had lost their jobs and were moving in with relatives. At another house, the family said they were renters. A third family, whose mortgage is $1.6 million, said they would be moving this weekend.

At a vacant house with a pool, where the lender was seeking $1.27 million, a raft and a water gun lay abandoned on the entryway floor.

Lenders are fearful that many of the 11 million or so homeowners who owe more than their house is worth will walk away from them, especially if the real estate market begins to weaken again. The so-called strategic defaults have become a matter of intense debate in recent months.

Fannie Mae and Freddie Mac, the two quasi-governmental mortgage finance companies that own most of the mortgages in America with a value of less than $500,000, are alternately pleading with distressed homeowners not to be bad citizens and brandishing a stick at them.

In a recent column on Freddie Mac’s Web site, the company’s executive vice president, Don Bisenius, acknowledged that walking away “might well be a good decision for certain borrowers” but argues that those who do it are trashing their communities.

Mers class action Nevada

3 Jul

A Reno law firm is preparing a class action lawsuit on behalf of Nevada homeowners who face foreclosure by a surrogate company that represents thousands of mortgage owners but doesn’t actually own the loans themselves. If they succeed, the fallout could halt foreclosures

The company, known as Mortgage Electronic Registration Systems (MERS), was created by the mortgage industry years to keep track of the ownership of mortgages that are packaged inside of mortgage pools and often subject to in a series of transactions. This based in Reston, Virginia company didn’t own the mortgages it registered, but it was listed in public records either as a nominee for the actual owner of the note or as the original mortgage holder. Some 60 million loans are registered in the name of MERS.

Last month the Kansas Supreme Court ruled that MERS had “no right to the underlying debt repayment secured by the mortgage.” The court also said that even though MERS was named as mortgagee in the case at hand, it didn’t have an interest in the underlying property. Even though the Kansas decision directly affects only cases in that state, it raises questions about MERS’ legal right to participate in foreclosure filings elsewhere.

Homeowners in Nevada, which ranked number one in foreclosure filings in August with nearly 18,000 in that month, moved swiftly to determine how the Kansas affects their situation. Foreclosure filings in Kansas, which ranked 35th among all states, were only about 1000 in August.

Nevada is a no judicial foreclosure state, meaning foreclosure doesn’t require a judge’s approval. However, when a delinquent homeowner facing foreclosure files for bankruptcy protection, a lender — or, in this case, MERS — that wants to protect its assets must get permission from the federal bankruptcy judge to foreclose.

Federal Bankruptcy Judge Linda Riegle ruled earlier this year in Las Vegas that MERS had no standing because the company is not the real party in interest — it doesn’t actually own the loan. In other words, in the course of bankruptcy proceedings, MERS had no claim to the house
.

The Reno law firm Hager & Hearne is preparing a class action lawsuit that will seek to invalidate the right of MERS to trigger foreclosure in light of the Kansas decision. If successful, it might force the legal ownership of the nearly one million Nevada mortgages on the MERS system to be transferred to the names of their actual owners and slow or halt foreclosures around the country,

Meanwhile, a spokeswoman for MERS, told the Las Vegas Sun the company will appeal the Kansas ruling.

Eviction and the issue of "Duly perfected" foreclosure sale

24 Jun

The Lender has already foreclosed on your house at the time they bring a Unlawful
Detainer action against you. The Unlawful Detainer is just an eviction and not a
foreclosure proceeding. If you want to stop the eviction, you have to claim that they
have no right to evict because of a defective deed due to fact that they are not true
lender, etc.
A qualified exception to the rule that title cannot be tried in an unlawful detainer
proceeding [see Evid Code § 624; 5.45[1][c]] is contained in CCP § 1161a. By extending
the summary eviction remedy beyond the conventional landlord-tenant relationship to
include purchasers of the occupied property, the statute provides for a narrow and
sharply focused examination of title. A purchaser of the property as described in the
statute, who starts an unlawful detainer proceeding to evict an occupant in possession,
must show that he or she acquired the property at a regularly conducted sale and
thereafter “duly perfected” the title [CCP § 1161a; Vella v. Hudgins (1977) 20 C3d 251,
255, 142 CR 414, 572 P2d 28 ]. To this limited extent, as provided by the statute, title
may be litigated in the unlawful detainer proceeding [ Cheney v. Trauzettel (1937) 9 C2d
158, 159, 69 P2d 832 ].
CCP § 1161
1. In General; Words and Phrases
Term “duly” implies that all of those elements necessary to valid sale exist. Kessler v.
Bridge (1958, Cal App Dep’t Super Ct) 161 Cal App 2d Supp 837, 327 P2d 241, 1958
Cal App LEXIS 1814.
Title that is “duly perfected” includes good record title, but is not limited to good record
title. Kessler v. Bridge (1958, Cal App Dep’t Super Ct) 161 Cal App 2d Supp 837, 327
P2d 241, 1958 Cal App LEXIS 1814.
Title is “duly perfected” when all steps have been taken to make it perfect, that is, to
convey to purchaser that which he has purchased, valid and good beyond all
reasonable doubt. Kessler v. Bridge (1958, Cal App Dep’t Super Ct) 161 Cal App 2d
Supp 837, 327 P2d 241, 1958 Cal App LEXIS 1814.
The purpose of CCP 1161a, providing for the removal of a person holding over after a
notice to quit, is to make clear that one acquiring ownership of real property through
foreclosure can evict by a summary procedure. The policy behind the statute is to
provide a summary method of ouster where an occupant holds over possession after
sale of the property. Gross v. Superior Court (1985, Cal App 1st Dist) 171 Cal App 3d
265, 217 Cal Rptr 284, 1985 Cal App LEXIS 2408.
Go to Topic List 2. Construction, Interpretation, and Application
This section extended the former statute to permit persons not in the relationship of
landlord and tenant to maintain an action in unlawful detainer. Hewitt v. Justice’s Court
of Brooklyn Township (1933, Cal App) 131 Cal App 439, 21 P2d 641, 1933 Cal App
LEXIS 731.
Under this section, which was added to the code in 1929, an action in unlawful detainer
by a purchaser at a trustee’s sale under a deed of trust is a proper proceeding to
remove persons from the demised premises; and, the remedy being purely statutory, if
the determination of the question of title to realty becomes necessary, the legislature
had the right to provide for the trial of that issue in such a proceeding. Nineteenth Realty
Co. v. Diggs (1933) 134 Cal App 278, 25 P 2d 522, 1933 Cal App LEXIS 54.
In an action to recover possession of premises under this section, the record title owner
is sufficiently the owner, notwithstanding that he holds title as trustee for some other
person, to maintain the suit. Kraemer v. Coward (1934, Cal App) 2 Cal App 2d 506, 38
P2d 458, 1934 Cal App LEXIS 1455.
This section does not create a new right and an exclusive remedy to enforce it, but
merely creates a new remedy without excluding the old remedy of ejectment where it
may apply. Mutual Bldg. & Loan Asso. v. Corum (1934, Cal App) 3 Cal App 2d 56, 38
P2d 793, 1934 Cal App LEXIS 1138.
This section does not apply to a quiet title action. Duckett v. Adolph Wexler Bldg. &
Finance Corp. (1935) 2 Cal 2d 263, 40 P2d 506, 1935 Cal LEXIS 321.
This section, which extends the summary remedy of unlawful detainer to certain cases
where property has been sold, has no application where the party in possession raises
complete issues as to title and the right of possession in an action to quiet title in a court
of equity; and under such circumstances the court has power not only to decide the
issues presented but to carry its decrees into effect, and it may grant relief by directing
the issuance of a writ of possession even though another and different remedy might
have been available had an action to quiet the title not been brought. Furlott v. Security-
First Nat’l Bank (1936, Cal App) 14 Cal App 2d 118, 57 P2d 952, 1936 Cal App LEXIS
829.
This section is not unconstitutional. St. George v. Meyer (1937) 9 Cal 2d 161, 69 P2d
993, 1937 Cal LEXIS 373.
The unlawful detainer statutes, including CCP 1161 of this section are purely statutory
remedies created by the legislature; hence, it is competent for the legislature to
determine the scope of the issues that may be tried in such an action. Altman v.
McCollum (1951, Cal App Dep’t Super Ct) 107 Cal App 2d Supp 847, 236 P2d 914,
1951 Cal App LEXIS 1990.
CCP 1161a, governing unlawful detainer proceedings, does not require a defendant to
litigate, in a summary action within the statutory time constraints, a complex fraud claim
involving activities not directly related to the technical regularity of a trustee’s sale. Vella
v. Hudgins (1977) 20 Cal 3d 251, 142 Cal Rptr 414, 572 P2d 28, 1977 Cal LEXIS 192.
So long as a person’s possession of real property is achieved through the landlordtenant
relationship, unlawful detainer may be properly used to regain possession in the
event of the tenant’s default (CCP 1161, 1161a). Neither the relationship nor the
remedy is eliminated by the mere fact that, in addition, there is an executory contract of
sale between the parties under which the rent is credited against the purchase price, in
whole or in part. Provouskivitz v. Snow (1977, Cal App 2d Dist) 74 Cal App 3d 554, 141
Cal Rptr 531, 1977 Cal App LEXIS 1943.
Go to Topic List 3. Service and Effect of Notice
Failure to serve the three-day notice upon the trustor of a trust deed, as well as upon his
subtenant, does not vitiate a proceeding under this section, where the subtenant only
and not the trustor contested the plaintiff’s right to possession as a purchaser under the
trust deed, and such failure may be deemed waived by the subtenant. Mailhes v.
Investors Syndicate (1934) 220 Cal 735, 32 P2d 610, 1934 Cal LEXIS 595.
Service of a notice to quit on subtenants is not jurisdictional. San Jose Pacific Bldg. &
Loan Asso. v. Corum (1934, Cal App) 2 Cal App 2d 276, 37 P2d 866, 1934 Cal App
LEXIS 1418.
Go to Topic List 4. Persons by and Against Whom Action May Be Brought
A purchaser or trustee at an execution sale or under a deed of trust may maintain an
action under this section. Pacific States Sav. & Loan Co. v. Hoffman (1933, Cal App)
134 Cal App 601, 25 P2d 1006, 1933 Cal App LEXIS 180.
In an action to recover possession of premises under this section, after sale under a
deed of trust, a foreign corporation, which made the loan to defendants, was not doing
business in this state in making said loan, where the notes and deed of trust were
executed by defendants in favor of a party secured by defendants’ agent, and said
documents, with draft attached, were forwarded by defendants’ agent to an eastern city
where they were approved and accepted by said foreign corporation, which had
theretofore been a stranger to the transaction, and which, upon such acceptance,
honored the draft and sent the money to the state, payable to the order of defendants.
Kraemer v. Coward (1934, Cal App) 2 Cal App 2d 506, 38 P2d 458, 1934 Cal App
LEXIS 1455.
An action under this section is not restricted to cases covered by 1161 where a tenant
holds possession “in person, or by subtenant,” and may be brought against any person
claiming the right of possession as a successor to or under one whose title is terminated
on sale of the property through a deed of trust, pursuant to CC 2924. Stockton Morris
Plan Co. v. Carpenter (1936, Cal App) 18 Cal App 2d 205, 63 P2d 859, 1936 Cal App
LEXIS 191.
Where a vendor remaining in possession for a limited period as part of the consideration
for the sale of realty failed to surrender possession within two years after completion of
the sale as provided by the contract, unlawful detainer was the proper form of action
and the court was authorized to award treble damages. Moss v. Williams (1948, Cal
App) 84 Cal App 2d 830, 191 P2d 804, 1948 Cal App LEXIS 1278.
Mortgagee is not entitled to possession of property, either before or after default, and he
has no right of entry except when he is vested with title to property on foreclosure and
sale; hence, applying provisions of CC 2924 that transfer of interest in property made
only as security for performance of another act is to be deemed mortgage, plaintiff’s
right to maintain unlawful detainer action was not impaired by existence of deed naming
defendant as grantee of property where such deed recited on its face that it was for
security only and said defendant made no attempt to show there had been any
foreclosure of any security interest asserted by him which would have entitled him to
possession. Byrne v. Baker (1963, Cal App 2d Dist) 221 Cal App 2d 1, 34 Cal Rptr 178,
1963 Cal App LEXIS 2099.
Judgment creditor who purchases at his own execution sale and first records sheriff’s
certificate of sale is protected by provisions of CC 1107, 1214, and his rights are
therefore superior to those of holder of unrecorded deed; any interest defendant
acquired by deed in property which is subject of action for unlawful detainer would not
operate as bar to plaintiff’s right to maintain action where defendant’s deed was not
recorded until after plaintiff’s title under execution sale had been perfected and
marshal’s deed to property recorded. Byrne v. Baker (1963, Cal App 2d Dist) 221 Cal
App 2d 1, 34 Cal Rptr 178, 1963 Cal App LEXIS 2099.
A subsequent purchaser from a purchaser at a foreclosure sale was entitled to bring
unlawful detainer actions pursuant to former CCP 1161a, subd. (3) (see now CCP
1161a(b)), against occupants of condominium units; the policy of the statute, to provide
a summary method of ouster when an occupant holds over possession after sale of the
property, would not be served by restricting availability of the action to the original
purchaser at the foreclosure sale. Moreover, the requirements that the subsequent
purchaser prove his acquisition of title from the foreclosure sale purchaser does not
destroy the summary nature of the action. Evans v. Superior Court (1977, Cal App 2d
Dist) 67 Cal App 3d 162, 136 Cal Rptr 596, 1977 Cal App LEXIS 1215.
Homeowners cannot be evicted, consistent with due process guarantees, without being
permitted to raise affirmative defenses which if proved would maintain their possession
and ownership. Accordingly, in an unlawful detainer action brought in municipal court by
a corporation that had acquired title to homeowners’ property through a loan transaction
after the homeowners had defaulted on a prior loan, the homeowners were entitled to
defend the eviction action based on their claims of fraud and related causes which they
asserted; therefore the action necessarily exceeded the jurisdiction of the municipal
court and could not be tried there. Asuncion v. Superior Court of San Diego County
(1980, Cal App 4th Dist) 108 Cal App 3d 141, 166 Cal Rptr 306, 1980 Cal App LEXIS
2038.
The procedure in unlawful detainer is covered in CCP 1161 et seq. The remedy, as
broadened by statutory changes, is available in three situations: (1) landlord against
tenant for unlawfully holding over or for breach of the lease (the traditional and most
important proceeding), (2) owner against servant, employee, agent, or licensee, whose
relationship has terminated, and (3) purchaser at sale under execution, foreclosure, or
power of sale in mortgage or deed of trust, against former owner and possessor. The
statutory situations in which the remedy of unlawful detainer is available are exclusive,
and the statutory procedure must be strictly followed. Berry v. Society of Saint Pius X
(1999, Cal App 2d Dist) 69 Cal App 4th 354, 81 Cal Rptr 2d 574, 1999 Cal App LEXIS
42, review or rehearing denied (1999, Cal) 1999 Cal LEXIS 2245.
Go to Topic List 5. Action Involving Issue of Title and Right to Possession
On a sale under a deed of trust, the purchaser has an immediate right to possession;
and where a party exchanged property for an apartment house encumbered by a deed
of trust, under which notice of default and election to sell was filed before the exchange,
but the sale was conducted after the date of exchange, regardless of the right of
possession prior to foreclosure the party who would have received the property under
the exchange was not entitled to a judgment for possession of it after the sale. Farris v.
Pacific States Auxiliary Corp. (1935) 4 Cal 2d 103, 48 P2d 11, 1935 Cal LEXIS 506.
Proof that he has duly perfected his title by a sale regularly conducted may be made by
the plaintiff in a proceeding under subd 3. Mortgage Guarantee Co. v. Smith (1935, Cal
App) 9 Cal App 2d 618, 50 P2d 835, 1935 Cal App LEXIS 1196.
Matters affecting the validity of a trust deed, primary obligation, or other basic defects in
the title of a plaintiff who purchased at a sale under the trust deed may not be raised by
the defendant in an unlawful detainer action. Cheney v. Trauzettel (1937) 9 Cal 2d 158,
69 P2d 832, 1937 Cal LEXIS 372.
Right to possession alone is involved in a summary proceeding under this section, and
the broad question of title cannot be raised and litigated by a cross-complaint or
affirmative defense. Cheney v. Trauzettel (1937) 9 Cal 2d 158, 69 P2d 832, 1937 Cal
LEXIS 372; Delpy v. Ono (1937, Cal App) 22 Cal App 2d 301, 70 P2d 960, 1937 Cal
App LEXIS 116.
The title of a purchaser at a sale under a trust deed is involved in an action in unlawful
detainer brought by him to the limited extent that he must prove his acquisition of title by
purchase at the sale, and the defendant may attack the sufficiency of the sale. Cheney
v. Trauzettel (1937) 9 Cal 2d 158, 69 P2d 832, 1937 Cal LEXIS 372; Delpy v. Ono
(1937, Cal App) 22 Cal App 2d 301, 70 P2d 960, 1937 Cal App LEXIS 116; Seidell v.
Anglo-California Trust Co. (1942, Cal App) 55 Cal App 2d 913, 132 P2d 12, 1942 Cal
App LEXIS 146.
The validity of a trust deed attacked as part of a conspiracy to evade the Alien Land Law
was an issue relating to title which could not be raised in an unlawful detainer action by
the purchaser at the trust deed sale. Delpy v. Ono (1937, Cal App) 22 Cal App 2d 301,
70 P2d 960, 1937 Cal App LEXIS 116.
Where after a sale of trust property the purchaser sued the trustor in a justice’s court for
unlawful detainer and alleged ownership by virtue of purchase at a trustee’s sale
regularly conducted, denial of such allegations put in issue title to the property and a
judgment which restored possession to such purchaser was sufficient adjudication of
title to render applicable the doctrine of res judicata. Bliss v. Security-First Nat’l Bank
(1947, Cal App) 81 Cal App 2d 50, 183 P2d 312, 1947 Cal App LEXIS 1021.
While the broad question of title cannot be raised in an unlawful detainer action, where
the action is brought under subd 4, the plaintiff must establish the sale of the property
and the title perfected under such sale before recovery can be allowed. Kelliher v.
Kelliher (1950, Cal App) 101 Cal App 2d 226, 225 P2d 554, 1950 Cal App LEXIS 1103.
Where purchaser at trustee’s sale proceeds in unlawful detainer under section, he must
prove his acquisition of title by purchase at sale but is not required to prove more with
respect to title. Abrahamer v. Parks (1956, Cal App 2d Dist) 141 Cal App 2d 82, 296 P2d
341, 1956 Cal App LEXIS 1814.
Under subd 3, title, to the extent required by this section, not only may, but must, be
tried in actions if provisions of statute extending remedy beyond cases where
conventional relation of landlord and tenant exist are to be judicially nullified. Kartheiser
v. Superior Court of Los Angeles County (1959, Cal App 2d Dist) 174 Cal App 2d 617,
345 P2d 135, 1959 Cal App LEXIS 1746.
Question of title is not triable in unlawful detainer action, but only question of right of
possession. Patapoff v. Reliable Escrow Service Corp. (1962, Cal App 2d Dist) 201 Cal
App 2d 484, 19 Cal Rptr 886, 1962 Cal App LEXIS 2618.
Broad questions of title may not be litigated in unlawful detainer action; though
purchaser at execution sale who proceeds in unlawful detainer action under provisions
of this section must prove his acquisition of title by purchase at sale, it is only to this
limited extent, as provided by statute, that title may be litigated in such proceeding.
Byrne v. Baker (1963, Cal App 2d Dist) 221 Cal App 2d 1, 34 Cal Rptr 178, 1963 Cal
App LEXIS 2099.
A proceeding for unlawful detainer is summary in character, and ordinarily, only claims
bearing directly on the right of immediate possession are cognizable. Also, crosscomplaints
and affirmative defenses, legal or equitable, are permissible only insofar as
they would, if successful, preclude removal of the tenant from the premises. As a
consequence, a judgment in unlawful detainer usually has very limited res judicata
effect and will not prevent one who is dispossessed from bringing a subsequent action
to resolve questions of title or to adjudicate other legal and equitable claims between
the parties. However, to the limited extent provided by CCP 1161a, subd. 3, providing
that a person who continues possession of real property may be removed where the
property has been duly sold and the title of the sale has been duly perfected, title may
be litigated in such a proceeding. Vella v. Hudgins (1977) 20 Cal 3d 251, 142 Cal Rptr
414, 572 P2d 28, 1977 Cal LEXIS 192.
In an unlawful detainer action against occupants of condominium units by a subsequent
purchaser from a purchaser at a foreclosure sale, pursuant to CCP 1161a, subd. (3),
questions of title unrelated to compliance with Civ. Code, 2924, concerning a power of
sale contained in a trust deed, and issues which would have been unavailable to the
occupants’ predecessor in interest, the maker of the trust deed, could not be raised as
defenses, but would have to be litigated in a quiet title action. Since such issues were
not cognizable in the unlawful detainer action, the judgment in that action would not be
res judicata as to those issues, nor would the pendency of the unlawful detainer action
be a bar to the simultaneous maintenance of a quiet title action. Evans v. Superior Court
(1977, Cal App 2d Dist) 67 Cal App 3d 162, 136 Cal Rptr 596, 1977 Cal App LEXIS
1215.
In an action for unlawful detainer, the trial court erred in dismissing the tenants’
affirmative defense that raised the issue of title, where the landlord had previously filed
an action seeking declaratory relief and quiet title thereby putting the title in issue.
Greenhut v. Wooden (1982, Cal App 2d Dist) 129 Cal App 3d 64, 180 Cal Rptr 786,
1982 Cal App LEXIS 1304.
Go to Topic List 6. Procedure
Adoption of specific findings on each detail of the proceeding for the sale of the property
under a deed of trust were not necessary, where the court found that the defendant,
who died pending the action, took a deed and possession with full knowledge that his
grantors had no title, that he was in unlawful possession, and had no right thereto at any
time. Stockton Morris Plan Co. v. Carpenter (1936, Cal App) 18 Cal App 2d 205, 63 P2d
859, 1936 Cal App LEXIS 191.
A judgment in unlawful detainer is res adjudicata in a subsequent suit to set aside a
trustee’s deed on the ground of irregularity in the foreclosure proceedings, where the
unlawful detainer action brought by the purchaser at the trust deed sale involved the
same issues which were determined in favor of the regularity of the foreclosure
proceedings and the validity of the deed. Seidell v. Anglo-California Trust Co. (1942, Cal
App) 55 Cal App 2d 913, 132 P2d 12, 1942 Cal App LEXIS 146.
It was improper to grant summary judgment in an unlawful detainer action instituted
under this section, where a supporting affidavit related facts concerning a transfer of title
not within the personal knowledge of the plaintiff concerning which he was incompetent
to testify. Kelliher v. Kelliher (1950, Cal App) 101 Cal App 2d 226, 225 P2d 554, 1950
Cal App LEXIS 1103.
Municipal court has jurisdiction of an unlawful detainer action by the purchaser at a
trustee’s sale against the trustor where the purchaser alleges the reasonable rental
value of the premises to be $100 a month and seeks damages for less than two
months. Karrell v. First Thrift of Los Angeles (1951, Cal App) 104 Cal App 2d 536, 232
P2d 1, 1951 Cal App LEXIS 1656.
Facts that owner of realty was not in default under trust deed executed by her, that the
note secured by such instrument had been fully paid, and that she had no notice that
property was to be sold were available to her as a defense in a prior unlawful detainer
action brought against her by a successor of the purchaser at a trust deed sale, and
having failed to appear in that action she is precluded from asserting such matters in a
subsequent suit instituted by her for a decree setting aside the deed from the trustee to
the original purchaser, the sale to such purchaser and his successor, and the judgment
in the unlawful detainer action. Freeze v. Salot (1954, Cal App) 122 Cal App 2d 561, 266
P2d 140, 1954 Cal App LEXIS 1085.
In summary proceeding of unlawful detainer, only the right to possession is involved, but
when purchaser at trustee sale proceeds under this section, title may be litigated to
limited extent that purchaser must prove his acquisition of title by purchase at sale.
Cruce v. Stein (1956, Cal App 2d Dist) 146 Cal App 2d 688, 304 P2d 118, 1956 Cal App
LEXIS 1522.
Go to Topic List 7. –Pleadings
Conclusions of law and not facts are stated by a complaint alleging that the plaintiff
became the owner in fee and entitled to the possession of the premises by virtue of a
sale under CC 2924, where nothing more about the deed and sale is alleged. American
Nat’l Bank v. Johnson (1932, Cal App Dep’t Super Ct) 124 Cal App 783, 124 Cal App 4th
Supp 783, 11 P2d 916, 1932 Cal App LEXIS 6.
Although a complaint is insufficient as a statement of facts to bring the case within CCP
1161 where the answer shows that the fact and validity of the sale under the deed of
trust is made an issue by the defendants, they cannot on appeal question the
sufficiency of the complaint. Harris v. Seidell (1934, Cal App) 1 Cal App 2d 410, 36 P2d
1104, 1934 Cal App LEXIS 1289.
Taking of the necessary steps to a valid sale is sufficiently alleged by a complaint under
subd 3 alleging that the plaintiff duly performed and caused to be performed all the
conditions on his part required by CC 2924, and by other applicable laws and
provisions of the deed of trust. San Jose Pacific Bldg. & Loan Asso. v. Corum (1934, Cal
App) 2 Cal App 2d 276, 37 P2d 866, 1934 Cal App LEXIS 1418.
A complaint based on subd 3, substantially in the language of the statute is sufficient.
Quinn v. Mathiassen (1935) 4 Cal 2d 329, 49 P2d 284, 1935 Cal LEXIS 547.
An allegation of due compliance with CC 2924 is sufficient without alleging compliance
in haec verba. Quinn v. Mathiassen (1935) 4 Cal 2d 329, 49 P2d 284, 1935 Cal LEXIS
547.
In action by lessee for damages for eviction, where it was obvious from allegations of
the complaint that the parties to the lease intended that the lessee should not be
disturbed in its possession and use of the premises by the foreclosure of a trust deed or
mortgage securing a bond issue, and the complaint alleged facts sufficient to show the
assertion of a paramount title and right to possession by the purchaser on foreclosure
under said deed of trust, the allegations of eviction were sufficient against demurrer.
Stillwell Hotel Co. v. Anderson (1935) 4 Cal 2d 463, 50 P2d 441, 1935 Cal LEXIS 569.
In action in unlawful detainer for rent and possession of property held in part by oral
agreement and in part under a written lease, there was no merit in the contention that
the property covered by the written lease was not sufficiently described in the complaint
where the description was sufficient to enable the appealing defendant to enter on the
same and make avail thereof, and, at the trial, said defendant testified that at all times
he understood what land was referred to both by the lease and the notice to pay or
surrender possession; and, under the circumstances, the addition in the lease of the
word “station,” after the name of a town near which the land was located, did not make
the description doubtful or imperfect. Mendoza v. Castiglioni (1936, Cal App) 14 Cal App
2d 710, 58 P2d 939, 1936 Cal App LEXIS 951.
A cause of action under subd 3 is stated by a complaint alleging that the property was
sold to the original plaintiff in accordance with the terms of a deed of trust executed by
the former owners, and in accordance with CC 2924, where a supplemental complaint
details the proceedings required by CC 2924, including notice of default. Stockton
Morris Plan Co. v. Carpenter (1936, Cal App) 18 Cal App 2d 205, 63 P2d 859, 1936 Cal
App LEXIS 191.
An allegation of due compliance with CC 2924, as authorized by 459, is not merely a
conclusion of law, but an allegation of fact which, if not denied, must be deemed to have
been admitted. Bank of America Nat’l Trust & Sav. Asso. v. McLaughlin Land &
Livestock Co. (1940, Cal App) 40 Cal App 2d 620, 105 P2d 607, 1940 Cal App LEXIS
150, cert den (1941) 313 US 571, 61 S Ct 958, 85 L Ed 1529, 1941 US LEXIS 686.
An unlawful detainer proceeding is summary in character, and use of cross-complaint in
such case would frustrate remedy and render it inadequate. Tide Water Associated Oil
Co. v. Superior Court of Los Angeles County (1955) 43 Cal 2d 815, 279 P2d 35, 1955
Cal LEXIS 387.
It is proper to sustain, without leave to amend, demurrer to a complaint seeking to set
aside a sale under a trust deed, based on alleged failure to comply with the legal
requirements as to notice, where the trust deed, which was made a part of the
complaint, discloses a provision making the recital in the trustee’s deed conclusive, and
where such deed, also made part of the complaint, recites that sale and notice complied
with the law. Pierson v. Fischer (1955, Cal App 3d Dist) 131 Cal App 2d 208, 280 P2d
491, 1955 Cal App LEXIS 2037.
Complaint in unlawful detainer against defaulting trustors of trust deed states facts
sufficient to constitute cause of action where it alleges that plaintiff, to whom property
was sold by trustee, “is owner and entitled to possession of,” property, and where there
is attached to complaint as exhibit a copy of trustee’s deed which recites that default
was made in payment due on note and obligation secured by trust deed specified them.
Abrahamer v. Parks (1956, Cal App 2d Dist) 141 Cal App 2d 82, 296 P2d 341, 1956 Cal
App LEXIS 1814.
In unlawful detainer action based on sale of property by defendants to plaintiff and
agreement to vacate property by specified date “if it is possible,” it is not necessary to
allege facts showing that it was possible for defendants to vacate premises by date set,
and complaint alleging that real property involved had been duly sold to plaintiff and title
under sale had been duly perfected, that plaintiff was entitled to possession, that threeday
notice to quit premises had been personally served on defendants, and that they
held over and continued in possession after three-day notice had been served, is
sufficient. Johnson v. Hapke (1960, Cal App 2d Dist) 183 Cal App 2d 255, 6 Cal Rptr
603, 1960 Cal App LEXIS 1746.
Go to Topic List 8. –Defenses
Equitable defense of cancellation of escrow and withdrawal of defendant’s consent to
transfer before made is properly raised in action by vendee for removal of vendor from
premises and award of damages for withholding possession. Kessler v. Bridge (1958,
Cal App Dep’t Super Ct) 161 Cal App 2d Supp 837, 327 P2d 241, 1958 Cal App LEXIS
1814.
Equitable defense of delivery of deed to plaintiff in violation of escrow is properly raised
in action by vendee for removal of vendor from premises and award of damages for
withholding possession. Kessler v. Bridge (1958, Cal App Dep’t Super Ct) 161 Cal App
2d Supp 837, 327 P2d 241, 1958 Cal App LEXIS 1814.
Equitable defense of failure of consideration is properly raised in action by vendee for
removal of vendor from premises and award of damages for withholding possession.
Kessler v. Bridge (1958, Cal App Dep’t Super Ct) 161 Cal App 2d Supp 837, 327 P2d
241, 1958 Cal App LEXIS 1814.
Equitable defense of fraud in inducement for relinquishment of property is properly
raised in action by vendee for removal of vendor from premises and award of damages
for withholding possession. Kessler v. Bridge (1958, Cal App Dep’t Super Ct) 161 Cal
App 2d Supp 837, 327 P2d 241, 1958 Cal App LEXIS 1814.
Equitable defense of rescission of transaction prior to suit is properly raised in action by
vendee for removal of vendor from premises and award of damages for withholding
possession. Kessler v. Bridge (1958, Cal App Dep’t Super Ct) 161 Cal App 2d Supp
837, 327 P2d 241, 1958 Cal App LEXIS 1814.
Equitable defense of unauthorized unilateral change in escrow instructions by plaintiff to
effect delivery of deed is properly raised, in action by vendee for removal of vendor from
premises and award of damages for withholding possession. Kessler v. Bridge (1958,
Cal App Dep’t Super Ct) 161 Cal App 2d Supp 837, 327 P2d 241, 1958 Cal App LEXIS
1814.
Summary proceeding in unlawful detainer is subject to control of equity in proper case;
hence, if defendant in such action possessed valid equitable rights in property that
would make it inequitable for plaintiff to proceed, defendant could, by seeking injunction
in quiet title suit pending between parties, prevent plaintiff from proceeding. Byrne v.
Baker (1963, Cal App 2d Dist) 221 Cal App 2d 1, 34 Cal Rptr 178, 1963 Cal App LEXIS
2099.
In an unlawful detainer action under CCP 1161a, subd. (3), by a subsequent purchaser
from a purchaser at a foreclosure sale, the subsequent purchaser may not claim the
status of a bona fide purchaser without notice against one in open and notorious
possession of the premises, so as to cut off defenses which would have been available
to the occupant against the original purchaser. Evans v. Superior Court (1977, Cal App
2d Dist) 67 Cal App 3d 162, 136 Cal Rptr 596, 1977 Cal App LEXIS 1215.
The statutory remedies for recovery of possession and of unpaid rent (CCP
1159-1179a; Civ. Code, 1951 et seq.) do not preclude a defense based on municipal
rent control legislation enacted pursuant to the police power imposing rent ceilings and
limiting the grounds for eviction for the purpose of enforcing those rent ceilings. Thus,
CCP 1161 (unlawful detainer), does not preempt a defense based upon local rent
control legislation. Also, since 1161 does not preempt such a defense, it follows that
CCP 1161a (removal of person holding over after notice to quit), does not preempt such
a defense. Accordingly, 1161a did not preempt that portion of a local rent stabilization
ordinance limiting the grounds for eviction. Passage of such legislation by a local
government was an exercise of police power which substantively placed a limitation on
an owner’s property rights. Gross v. Superior Court (1985, Cal App 1st Dist) 171 Cal
App 3d 265, 217 Cal Rptr 284, 1985 Cal App LEXIS 2408.
The county’s motion for summary judgment on plaintiff’s claim of excessive force in
evicting her should be granted, absent evidence the county had a policy or custom other
than to lawfully enforce writs of possession. Under CCP 1161a, a writ of possession
may be effectuated without a warrant; peace officers may obtain possession through
eviction under a valid writ of possession. Busch v. Torres (1995, CD Cal) 905 F Supp
766, 1995 US Dist LEXIS 19998.
Go to Topic List 9. –Evidence
To prevail, in action by vendee against vendor for removal of vendor from premises and
award of damages for withholding possession, plaintiff must prove affirmatively that
property was “duly sold” and that “the title under the sale has been duly perfected,” and,
contrary to rule applying to unlawful detainer where landlord-tenant relationship is
involved, title thus becomes issue. Kessler v. Bridge (1958, Cal App Dep’t Super Ct) 161
Cal App 2d Supp 837, 327 P2d 241, 1958 Cal App LEXIS 1814.
In unlawful detainer action, property involved is shown to have been duly sold by
defendants to plaintiff, within meaning of CCP 1161, by evidence that at request of
defendant husband, joined in by defendant wife as evidenced by her active
participation, both executed escrow constructions and grant deed conveying title to
plaintiff, and that no material representations were made by plaintiff to defendants
concerning escrow instructions, reconveyance of second trust deed, grant deed or
general agreement of parties. Johnson v. Hapke (1960, Cal App 2d Dist) 183 Cal App
2d 255, 6 Cal Rptr 603, 1960 Cal App LEXIS 1746.
In unlawful detainer action based on sale of property to plaintiff and agreement by
defendants to vacate premises by stated date “if it is possible,” such agreement
conditioned defendants’ performance on event that was within their control, placing
collateral duty on them to bring about happening of event of vacating premises within
reasonable time, and placing burden on them to show any reason why it was impossible
to vacate on or before agreed date, and where such burden was not fulfilled finding that
it was possible for defendants to vacate on or before agreed date was supported.
Johnson v. Hapke (1960, Cal App 2d Dist) 183 Cal App 2d 255, 6 Cal Rptr 603, 1960
Cal App LEXIS 1746.
In fixing plaintiff’s damages for unlawful detention of real property purchased at a nonjudicial
sale under a trust deed, the trial court did not err in considering, in part, the rents
received by defendant during the period of unlawful detention. The proper measure of
damages in an unlawful detainer action is the detriment to the owner because of the
detention of the property, and the detriment to plaintiff caused by defendant’s unlawful
detention was measurable in the amount of a reasonable rental value that plaintiff might
have realized had it not been denied possession. MCA, Inc. v. Universal Diversified
Enterprises Corp. (1972, Cal App 2d Dist) 27 Cal App 3d 170, 103 Cal Rptr 522, 1972
Cal App LEXIS 838

Mers brief Florida Taylor v Deutsche Bank Mers Standing

2 Jun

Appeal No. 5D09-4035
IN THE 5TH DISTRICT FLORIDA COURT OF APPEALS
Gregory Taylor
Appellant
v.
Deutsche Bank National Trust Company
as Trustee for FFMLT 2006-FF4, Mortgage Pass-Through Certificates, Series
2006-FF4
Appellee
APPEAL IN CAUSE NO. 05-2008-CA-065811
IN THE CIRCUIT COURT OF BREVARD COUNTY, FLORIDA
David E. Silverman presiding
APPELLANTS’ OPENING BRIEF
George M. Gingo, FBN 879533
P.O. Box 838
Mims, Florida 32754
321-264-9624 Office
321-383-1105 Fax
ggingo@yahoo.com
1
TABLE OF CONTENTS
Table of Contents . . . . . 2
Table of Citations . . . . . 3
Table of Cases . . . . 3 – 7
Table of Statutes . . . . 7 – 8
Table of Secondary Sources . . 8
Statement of the Case and Statement of Facts 9 – 16
Standard on Appeal . . . . 16
Summary of the Arguments. . . . 17
Arguments . . . . . . 18
Issue 1:
The Appellee presented evidence
that it was not entitled to enforce
the promissory note in question. . 18 – 23
Issue 2:
MERS did not pass an enforceable
interest in the promissory note to
the Appellee. . . . . 23 – 33
Conclusion . . . . . . 33
Certificate of Service . . . . 33
Certificate of Font Compliance . . . 34
2
TABLE OF CITATIONS
TABLE OF CASES
Amacher v. Keel,
358 So. 2d 889
(Fla. 2 DCA 1975) . . . . . . . 24
Anderson v. Liberty Lobby, Inc.,
477 U.S. 242
(1986). . . . . . . . . 16
Booker v. Sarasota, Inc.,
707 So.2d 886
(Fla. App. 1 Dist., 1998). . . . . . . 12
Brown v. Snell,
6 Fla. 741 (1856). . . . . . . . 18
Carpenter v. Longan,
16 Wall. 271,
83 U.S. 271,
21 L.Ed. 313
(1872). . . . . . . . . 24, 32
City of Cocoa v. Leffler,
762 So. 2d 1052
(Fla. 5th DCA 2000). . . . . . . 16
Century Group Inc. v.
Premier Fin. Services East L. P.,
724 So. 2D 661
(Fla. 2 DCA 1999) . . . . . . . 18
Case v. Smith,
200 So. 917
(Fla. 1941). . . . . . . . . 23
3
Collins v. Briggs,
123 So. 833
(Fla. 1929). . . . . . . . . 23
Evins v. Gainsville Nat’l Bank,
85 So. 659
(Fla. 1920). . . . . . . . . 23
Grier v. M.H.C. Realty Co.,
274 So. 2d 21
(Fla. 4 DCA 1973). . . . . . . 18
In re Carlyle,
242 B.R. 881
(Bankr. E.D.Va., 1999). . . . . . . 22
In re Foreclosure Cases,
521 F. Supp. 2D 650
(S.D. Oh. 2007). . . . . . . . 26
In Re Hayes,
393 B.R. 259
(Bankr. D. Mass. 2008). . . . . . . 21
In re Kang Jin Hwang,
396 B.R. 757
(Bankr.C.D.Cal., 2008). . . . . . . 22
In re Mitchell,
Case No. BK-S-07-16226-LBR
(Bankr.Nev. 3/31/2009). . . . . . . 25, 27
In re Sheridan,
Case No. 08-20381-TLM
(Bankr.Idaho, 2009). . . . . . . 28
4
In re Vargas,
396 B.R. 511
(Bankr.C.D.Cal., 2008). . . . . . . 28
In re Wilhelm,
Case No. 08-20577-TLM
(Bankr.Idaho, 2009). . . . . . . 22
Krol v. City of Orlando,
778 So. 2d 490, 492
(Fla. 5th DCA 2001). . . . . . . 16
Landmark National Bank v. Kesler,
216 P.3D 158
(Kansas, 2009). . . . . . . . 31
LaSalle Bank NA v. Lamy,
824 N.Y.S.2d 769
(N.Y. Supp. 2006).. . . . . . . 27
Major League Baseball v.Morsani,
790 So. 2d 1071
(Fla. 2001). . . . . . . . . 16
Mellor v. Goldberg,
658 So. 2d 1162
(Fla. 2 DCA 1995). . . . . . . 18
Margiewicz v. Terco Prop.,
441 So. 2d 1124
(Fla. 3 DCA 1983). . . . . . . 18
Mortgage Electronic Registration System, Inc.
v. Southwest Homes of Arkansas,
08-1299 (Ark. 3/19/2009) (Ark., 2009). . . . 31, 33
5
Miami Mtge. & Guar. Co. v. Drawdy,
127 So. 323
(Fla. 1930). . . . . . . . . 23
Pepe v. Shepherd,
422 So. 2d 910
(Fla. 3 DCA 1982). . . . . . . 18
Rollins v. Alvarez,
792 So. 2d 695
(Fla. 5th DCA 2001). . . . . . . 16
Scott v. Taylor,
58 So. 30
(Fla. 1912). . . . . . . . . 18
Sobel v. Mutual Dev. Inc.,
313 So. 2d 77
(Fla. 1 DCA 1975). . . . . . . 18, 24
So. Colonial Mtge. Co. v. Medeiros,
347 So. 2d 736
(Fla. 4 DCA 1977). . . . . . . 23
Stuyvesant Corp. v. Stahl,
62 So.2d 18, 20
(Fla., 1952). . . . . . . . . 32
Tayton v. American Nat’l Bank,
57 So. 678
(Fla. 1912). . . . . . . . . 18
Thomas v. Hartman,
553 So. 2d 1256
(Fla. 5 DCA 1989). . . . . . . 18
6
Vance v. Fields,
172 So. 2d 613
(Fla. 1 DCA 1965). . . . . . . 24
Volusia County v.
Aberdeen at Ormond Beach, L.P.,
760 So. 2d 126
(Fla. 2000). . . . . . . . . 16
Young v. Victory,
150 So. 624
(Fla. 1933). . . . . . . . . 18
TABLE OF STATUTES
§ 673.1031(1)(a), Fla. Stat.(2009). . . . . 12
§ 673.1031(1)(c), Fla. Stat.(2009). . . . . 12
§ 673.1031(1)(e), Fla. Stat.(2009). . . . . 12
§ 673.1041(1), Fla. Stat.(2009). . . . . . 19
§ 673.1041(2), Fla. Stat.(2009). . . . . . 19
§ 673.1041(5), Fla. Stat. (2009). . . . . 12, 19
§ 673.1051(1), Fla. Stat.(2009). . . . . . 19
§ 673.1051(3), Fla. Stat.(2009). . . . . . 19
§ 673.1091(2), Fla. Stat.(2009). . . . . . 19, 21
§ 673.1101(1), Fla. Stat.(2009). . . . . . 19
§ 673.2011(2), Fla. Stat.(2009). . . . . . 21, 25
§ 673.2014(1), Fla. Stat.(2009). . . . . . 21
7
§ 673.2031(1), Fla. Stat.(2009). . . . . . 20
§ 673.2031(3), Fla. Stat.(2009). . . . . . 21, 22, 25
§ 673.2041(1), Fla. Stat.(2009). . . . . . 12
§ 673.3011, Fla. Stat.(2009). . . . . . 19
§ 673.4121, Fla. Stat.(2009). . . . . . 21
§ 673.4151, Fla. Stat.(2009). . . . . . 21
§ 673, et. seq., , Fla. Stat.(2009). . . . . 19
TABLE OF SECONDARY SOURCES
Christopher L. Peterson, Subprime Mortgage Market
Turmoil: Examining the Role of Securitization,
http://banking.senate.gov/public/index.
cfm?FuseAction=Files.View&FileStore_id=
4f40e1b9-ec5b-4752-ba8f-0c14afc44884. . . . 29
MERS, State-by-State, MERS Recommended
Foreclosure Procedures, (2002), http://www.mersinc.org
/filedownload.aspx?id=176&table=ProductFile. . . 26
Richard R. Powell,
POWELL ON REAL
PROPERTY § 37.27[2] (2000). . . . . . 25
R. K. Arnold, Yes, There is Life on Mers,
Probate & Property, (Aug., 1997),
http://www.abanet.org/genpractice
/magazine/1998/spring-bos/arnold.html). . . . 30
8
STATEMENT OF THE CASE AND FACTS
This appeal is taken from the Circuit Court’s decision to render Summary
Final Judgment against the Appellant. The Appellate Court of Florida has
jurisdiction to consider the issues raised in this appeal under authority of the
Florida Rules of Appellate Procedure, Rule 9.130 et seq.
The nature of the case below was Appellee’s Complaint to foreclose the
residential real property owned and occupied by the Appellant, Gregory Taylor.
(R. I/2) Appellant’s First Amended Answer challenged Appellee’s standing in
affirmative defenses and an incorporated Motion to Dismiss. (R. I/111-112, 117,
118-119, 121-124)
On October 9, 2009, a hearing on the Appellee’s Motion for Summary Final
Judgment was held. (R. I/166) The Appellee offered in evidence the promissory
note, the mortgage instrument and an assignment of mortgage. (R. I/62-87)
Appellant’s Response in Opposition to Appellee’s Motion for Summary Final
Judgment (which was also identified as a cross-motion for summary judgment)
stipulated that this evidence was not in dispute. Appellant contended that the
dispute was as to what that evidence actually proved – that being that Appellee was
not entitled to enforce the promissory note against Appellant.1 (R. 174-175) This
1 The clerk’s Index to Record on Appeal has this document as being filed
subsequent to the Summary Final Judgment of Foreclosure. That is incorrect as
9
argument in the Appellant’s Response in Opposition to the Motion for Summary
Final Judgment was not novel. That document referenced that this argument had
been previously raised in the Motion to Dismiss which was incorporated within the
First Amended Answer. (R. 175) On October 9, 2009, Judge Silverman granted
Summary Final Judgment of Foreclosure in Appellee’s favor. (R. 166-172)
Appellee made the following three claims in it’s Complaint: 1) “On or about
December 21, 2005, a promissory note was executed and delivered in favor of
Plaintiff, or Plaintiff’s assignor, in the original principal amount of $168,000.00.”
(R. I/2, para. 2 of complaint); 2) “The Plaintiff is the present owner and
constructive holder of the promissory note and Mortgage.” (R. I/2, para. 2 of
complaint); and, 3) “The above-described Note and Mortgage were assigned to
Plaintiff. The assignment is attached as Exhibit “C”.” (R. I/3, para. 3 of complaint)
On November 26, 2008, Appellant filed an Answer which substantially
denied the foreclosure allegations. (R. I/49-50) On December 9, 2008, Appellee
filed a Motion for Summary Final Judgment. (R. I/51) In support of the Motion
for Summary Final Judgment, the Appellee relied solely upon the promissory note,
the mortgage instrument and the assignment of mortgage to support its’ claim that:
the file stamp on the document indicates it was filed at 8:27 a.m. on October 9,
2009. (R. I/174) This was prior to the hearing on the motion which was noticed
as set for 8:45 a.m. on October 9, 2009. (R. I/149)
10
The Note and Mortgage are in default. Moreover, Plaintiff owns and
holds the Note and Mortgage and is entitled to recover its principal,
interest, late charges, costs, attorney’s fees, and other expenses, all of
which are more fully set forth in the supporting affidavits to be filed
with the court.
(R. I/52, para. 6)
On February 23, 2009, the Appellee filed the original promissory note,
mortgage instrument and the assignment of mortgage. (R. I/62-87) The
promissory note states:
1. BORROWER’S PROMISE TO PAY
In return for a loan that I have received, I promise to pay U.S. $168,000.00
(this amount is called “principal”), plus interest, to the order of the Lender.
The Lender is FIRST FRANKLIN A DIVISION OF NAT. CITY BANK OF
IN. I understand that the Lender may transfer this Note. The Lender or
anyone who takes this Note by transfer and who is entitled to receive
payments under this Note is called the “Note Holder”.
(R. I/63)
Sections 7 and 9 of the promissory note provide that payments are due to the
Lender until the Lender transfers the note, at which time payments shall be made to
the “Note Holder”, who may enforce its rights under the note. (R. I/65) The
promissory note was never transferred, as evidenced by the lack of an indorsement
on the promissory note. (R. I/66-67)
Though the Appellee is Deutsche Bank National Trust Company, the
promissory note is payable to a different person who is specifically identified in
the promissory note as “First Franklin A Division of Nat. City Bank of IN”
11
(hereafter, “First Franklin”). The promissory note was not indorsed by anyone,
including First Franklin.2 (R. I/66) Additionally, the promissory note did not carry
an allonge.3
The mortgage instrument provides that Mortgage Electronic Registration
Systems, Inc. “MERS” is the mortgagee and that it is a separate corporation that is
acting solely as a nominee for the Lender and Lender’s successors and assigns. (R.
I/68, para. (C) and (D) ) The mortgage instrument does not identify MERS as a
2 Florida Statutes section 673.2041 (1) provides that the term “indorsement”
means a signature, other than that of a signer as maker, drawer, or acceptor, that
alone or accompanied by other words is made on an instrument for the purpose
of negotiating the instrument, restricting payment of the instrument, or incurring
indorser’s liability on the instrument. Appellant is the “maker” of the
promissory note pursuant to Florida Statutes section 673.1031(1)(e) which
provides that “Maker” means a person who signs or is identified in a note as a
person undertaking to pay.” The terms “drawer” and “acceptor’ do not apply in
this case as those terms only apply to a “draft” pursuant to Florida Statutes
section 673.1031(1)(a) & (c). Florida Statutes section 673.1041(5) provides
that “An instrument is a “note” if it is a promise and is a “draft” if it is an order.”
3 For the purpose of determining whether a signature is made on an
instrument, a paper affixed to the instrument is a part of the instrument. (§
673.2041(1), Fla. Stat. (2009)) “An allonge is a piece of paper annexed to a
negotiable instrument or promissory note, on which to write endorsements for
which there is no room on the instrument itself. Such must be so firmly affixed
thereto as to become a part thereof.” BLACK’S LAW DICTIONARY (6th
ed.1990). Florida’s Uniform Commercial Code does not specifically mention an
allonge, but notes that “[f]or the purpose of determining whether a signature is
made on an instrument, a paper affixed to the instrument is part of the instrument.”
§ 673.2041(1), Fla. Stat. (1995)). Booker v. Sarasota, Inc., 707 So.2d 886 (Fla.
App. 1 Dist., 1998)
12
payee. Instead, like the promissory note, the mortgage instrument names First
Franklin as the Lender/payee. (R. I/68, para. (E); also see R. I/70)
Appellee had not filed a reply to the Appellant’s Answer, so on June 1, 2009,
Appellant filed his First Amended Answer. (R. I/111) Appellee did not file an
objection to Appellant’s First Amended Answer. (See Index to Record for lack of
filing) In the First Amended Answer, Appellant:
1) denied that he delivered a promissory note in favor of the Appellee or
the Appellee’s assignors (R. I/110, para. 2);
2) denied that the promissory note was assigned by MERS to Appellee
(R. I/111, para. 3);
3) denied that the mortgage instrument was properly assigned to the
Appellee (R. I/111, para. 3);
4) denied that the promissory note and mortgage instrument are in
default with Appellee (R. I/111, para. 5); and,
5) denied that Appellee is owed any sum due and owing on the
promissory note and mortgage instrument (R. I/111, para. 6).
Appellant had admitted in his First Amended Answer that he is in control of
the subject property and that he resides at the property. (R. I/111, para. 12) And
though the Complaint neglected to specifically state that the Appellant had actually
borrowed money, the Appellant admitted in his Response in Opposition to the
Motion for Summary Final Judgment that he did execute a promissory note and
mortgage, but that someone other than the Appellee is entitled to enforce the
subject promissory note and mortgage against him and his property. (R. I/180)
13
Appellant made several affirmative defenses, the first and ninth of which
were to challenge the standing of the Appellee as not being an owner or holder of
the promissory note or an authorized agent for an identifiable owner or holder of
the promissory note. (R. I/111-112; 117)
The First Amended Answer also incorporated within it a Motion to Dismiss.
(R. I/119; 121-124)) The incorporated Motion to Dismiss challenged the
Appellee’s standing and stated the following:
i. The Plaintiff is clearly acting as a trustee in this action for an entity
not named in either the Mortgage or Note. (Complaint, Caption)
The Plaintiff claims that it is the present owner of the Promissory
Note and Mortgage, yet contrarily, it also claims that it is the
constructive holder of the promissory note and Mortgage.
(Complaint, par. 2) The Plaintiff claims that the Note and Mortgage
were both assigned to the Plaintiff and that the assignment is Exhibit
C to the Complaint. (Complaint, par. 3)
ii. Both the Mortgage and the Note state that payment shall be made to
Lender. (Complaint, Note, par. 1; Mortgage, p. 1)
iii. The assignment referenced in Exhibit C is an assignment by MERS of
the Mortgage to Plaintiff, it is not an assignment of the Note – there is
no assignment of the note in any of the Plaintiff’s documents.
(R. I/119)
The First Amended Answer’s incorporated Motion to Dismiss made the
following argument:
The Plaintiff alleges that it is all things – a trustee acting on behalf of
another entity who owns the Note and Mortgage, and that it is the owner of
the Note and Mortgage. The Mortgage provides that there can be multiple
14
owners of fractional interests of the Note and Mortgage. (Complaint,
Mortgage, par. 20) However, that is not what the Plaintiff alleges. The
Plaintiff alleges that there is only one owner of the Note and Mortgage – it
may be the Plaintiff, or it may be the beneficiary of a trust that the Plaintiff
is trustee of – we can’t possibly know because the Plaintiff pled it both
ways. The proof the Plaintiff provides of its ownership interest is
insignificant. The Plaintiff provides an assignment of the Mortgage but not
an assignment of the Note.
(R. I/123)
On October 9, 2009, at 8:27 a.m., which was prior to the hearing on the
Appellee’s Motion for Summary Final Judgment, the Appellant filed an opposition
to the Motion for Summary Final Judgment and Cross-Motion for Summary Final
Judgment. (R. I/174) In this document the Appellant stipulated that Appellee’s
evidence was authentic, uncontested and that there were no genuine issues of
material fact. (R. I/174-175 ) In the document, Appellant argued that there were
solely legal issues pending before the Court, those being: 1) that because the
promissory note was made payable to a specifically identified person who was not
the Plaintiff or the Plaintiff’s principal, that before Appellee could enforce it
against Appellant, the promissory note had to carry either an indorsement or an
allonge making it payable to the Appellant or to Appellant’s principal; (R. I/175)
and, 2) that MERS could not pass an enforceable interest to Appellee. (R. I/177)
The Appellee’s Motion for Summary Final Judgment was heard on October
9, 2009, at 8:45 a.m. (R. I/149; R. I/166) After oral argument in the absence of a
15
court reporter, the Circuit court granted Summary Final Judgment to the Appellee
after argument. (R. I/166)
STANDARD ON APPEAL
The standard of review for summary judgment is de novo. Major League
Baseball v.Morsani, 790 So. 2d 1071 (Fla. 2001); Rollins v. Alvarez, 792 So. 2d
695 (Fla. 5th DCA 2001); Volusia County v. Aberdeen at Ormond Beach, L.P.,
760 So. 2d 126 (Fla. 2000). In reviewing a summary judgment, the Court must
determine whether there is any “genuine issue as to any material fact” and whether
“the moving party is entitled to judgment as a matter of law.” Fla. R. Civ. P.
1.510(c).
Issues of fact are “genuine” only if a reasonable jury, considering the
evidence presented, could find for the non-moving party. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 249 (1986). Generally, “[t]he party moving for
summary judgment has the burden to prove conclusively the nonexistence of any
genuine issue of material fact.” City of Cocoa v. Leffler, 762 So. 2d 1052,1055
(Fla. 5thDCA 2000). The evidence contained in the record, including supporting
affidavits, must be considered in the light most favorable to the non-moving party,
and if the slightest doubt exists, summary judgment must be reversed. Krol v. City
of Orlando, 778 So. 2d 490, 492 (Fla. 5th DCA 2001).
16
SUMMARY OF THE ARGUMENTS
Ownership of the promissory note and the mortgage instrument were
bifurcated. The unindorsed promissory note was not a bearer instrument. Rather,
it was made payable to the lender who is a specifically identified person – First
Franklin – and the mortgage instrument named MERS as the mortgagee, solely as
a nominee. Neither the promissory note nor the mortgage instrument granted
MERS an interest in the promissory note, instead, First Franklin retained
ownership in the promissory note.
The right to foreclose is dependent upon there being an enforceable
promissory note. An assignment of mortgage from MERS to Appellee granted
Appellee all of the interests that MERS had in the promissory note and the
mortgage instrument. By the assignment of mortgage, MERS could not convey a
greater interest to Appellee than that which it already held. Since MERS had no
enforceable interest in the promissory note, it conveyed no enforceable interest in
the promissory note to the Appellee. Even if MERS was an agent of First Franklin
with authority to enforce the promissory note, no evidence of such authority was
presented to the Circuit Court. Without an interest in the promissory note, or
without evidence of authority to enforce the promissory note against Appellant,
Appellee had no standing to foreclose and summary judgment was improper.
17
ARGUMENTS
FIRST ARGUMENT
THE APPELLEE PRESENTED EVIDENCE THAT
IT WAS NOT ENTITLED TO ENFORCE THE
PROMISSORY NOTE IN QUESTION
Every mortgage loan is composed of two documents – the note instrument
and the mortgage instrument. No matter how much the mortgage instrument is
acclaimed as the basis of the agreement, the note instrument is the essence of the
debt. Sobel v. Mutual Dev. Inc., 313 So. 2d 77 (Fla. 1 DCA, 1975); Pepe v.
Shepherd, 422 So. 2d 910 (Fla. 3 DCA 1982); Margiewicz v. Terco Prop., 441 So.
2d 1124 (Fla. 3 DCA 1983).
The promissory note is evidence of the primary mortgage obligation. The
mortgage is only a mere incident to the note. Brown v. Snell, 6 Fla. 741 (1856);
Tayton v. American Nat’l Bank, 57 So. 678 (Fla. 1912); Scott v. Taylor, 58 So. 30
(Fla. 1912); Young v. Victory, 150 So. 624 (Fla. 1933); Thomas v. Hartman, 553
So. 2d 1256 (Fla. 5 DCA 1989). The mortgage instrument is only the security for
the indebtedness. Grier v. M.H.C. Realty Co, 274 So. 2d 21 (Fla. 4 DCA 1973);
Mellor v. Goldberg, 658 So. 2d 1162 (Fla. 2 DCA 1995); Century Group Inc. v.
Premier Fin. Services East L. P . , 724 So. 2d 661 (Fla. 2 DCA 1999)
18
On December 21, 2005, Appellant issued a promissory note. (§673.1051(1),
Fla. Stat. (2009), and § 673.1051(3), Fla. Stat. (2009)) The subject promissory
note is a “negotiable instrument” because it is an unconditional promise to pay a
fixed amount of money and it was payable to the order of First Franklin at the time
it was first issued. (§ 673.1041(1), Fla. Stat. (2009); § 673.1041(2), Fla. Stat.
(2009); § 673.1041(5),Fla. Stat. (2009); and § 673.1091(2), Fla. Stat. (2009)) The
promissory note clearly states the intent of the Appellant to make the Lender, First
Franklin, the Payee. (§ 673.1101(1), Fla. Stat. (2009)) That’s because the
document specifically identifies First Franklin as the Payee.4
Florida law defines those who are entitled to enforce a negotiable instrument
as either a “holder” of the instrument, a non-holder in possession who has the
rights of a holder or a person not in possession who is entitled to enforce it as a lost
instrument. (§ 673.3011, Fla. Stat. (2009)) Florida law goes so far as to permit a
person to be entitled to enforce an instrument even though that person is not the
owner of the instrument or is in wrongful possession of the instrument.
However, the subject promissory note is more restrictive in its’
4 In a mortgage loan, there is only one negotiable instrument, and that is the
promissory note. Neither the mortgage instrument nor the assignment of mortgage
are “negotiable instruments” as the term “instrument” as used in § 673, Fla. Stat.
(2009), et. seq., only means a “negotiable instrument”. (§ 673.1041(2), FLA.
STAT. (2009))
19
characterization of who may enforce it because the subject promissory note and the
subject mortgage instrument together were designed to have been sold in fractional
interests on the secondary market. The subject mortgage instrument provides
“The Note or a partial interest in the Note (together with this Security Instrument)
can be sold one or more times without prior notice to Borrower.” (R. I/77, para.
20)
Having multiple parties attempting to enforce a single promissory note could
destroy the entire secondary market system in mortgages. In order to prevent that
from happening, the subject promissory note does not make a mere possessor of it
a “holder”, rather, one becomes a “holder” of the subject promissory note only
upon “transfer” of the promissory note along with the right to enforce it. The
subject promissory note provides “The Lender or anyone who takes this Note by
transfer and who is entitled to receive payments under this Note is called the “Note
Holder”. (R. I/63, para. 1) This is consistent with Florida Statutes § 673.2031(1)
which provides that an instrument is transferred when it is delivered by a person
other than its issuer for the purpose of giving to the person receiving delivery the
right to enforce the instrument.
At the hearing on the Appellee’s Motion for Summary Final Judgment, there
was no evidence presented as to whether First Franklin actually delivered the
20
subject promissory note either to MERS or to the Appellee. That evidence was
necessary to demonstrate that First Franklin transferred the promissory note with
the purpose of giving the Appellee the right to enforce it. In the case of In Re
Hayes, 393 B.R. 259, 266-268 (Bankr. D. Mass. 2008), the movant seeking relief
from stay failed to show that it ever had any interest in the note at issue. In that
case the court found the movant lacked standing altogether because it failed to
show that the note was ever transferred to it, and thus had no rights of its own to
assert. Having a note in one’s possession is not synonymous with “transfer”.
The obligation of an issuer of a note owes that obligation to a person entitled
to enforce the instrument or to an indorser who paid the instrument under Florida
Statutes § 673.4151. (§ 673.4121, Fla. Stat. (2009)) A transfer of possession of a
bearer instrument is sufficient to transfer enforceable rights in the instrument. (§
673.2011(2), Fla. Stat. (2009)) That stands in stark contrast to a promise or order
that is payable to order, which means that it is payable to the identified person. ( §
673.1091(2), Fla. Stat. (2009)) In the case of an instrument payable to a
specifically identified person, transfer of possession of the instrument along with
an indorsement is necessary.5 (§ 673.2011(2), Fla. Stat. (2009) & § 673.2031(3),
Fla. Stat. (2009)) Without that necessary indorsement, the transferee still receives
5 An “indorsement” means a signature, other than that of a signer as maker,
drawer, or acceptor, made on an instrument for the purpose of negotiating the
instrument. (§ 673.2014(1), Fla. Stat. (2009))
21
an enforceable interest – however, it’s not enforceable against the issuer, rather, the
enforceable interest is the specifically enforceable right to the unqualified
indorsement of the transferor.6 (§ 673.2031(3), Fla. Stat. (2009)) Appellant
admitted in his Response in Opposition to the Motion for Summary Final
Judgment that he executed a promissory note, which someone is entitled to enforce
against him – just not the Appellee. (R. I/180)
In the case at hand, if the subject promissory note were delivered to the
Appellee by First Franklin with the purpose of giving Appellee rights to enforce it
against the Appellant, before Appellee could enforce the promissory note against
the Appellant it had to either obtain an indorsement from First Franklin or get an
Order from a court of competent jurisdiction enforcing it’s right to the unqualified
indorsement of First Franklin – the end result either way is that the promissory
note still must be indorsed. Absent that evidence, there is a material factual
dispute.
6 Addressing the same issue, the Court in the case of In re Kang Jin Hwang,
396 B.R. 757, 763 (Bankr.C.D.Cal., 2008) stated “The transfer of a negotiable
instrument has an additional requirement: the transferor must indorse the
instrument to make it payable to the transferee.” In the case of In re Wilhelm,
Case No. 08-20577-TLM (Bankr.Idaho, 2009) the Court recognized that if the
note instrument, by its terms, is not payable to the transferee, then before the
transferee can enforce it the transferee must account for possession of the
unindorsed instrument by proving the transaction through which the transferee
acquired it. (At page 18) The Court in In re Carlyle, 242 B.R. 881 (Bankr.
E.D.Va., 1999) came to the same conclusion at page 887 of the Opinion.
22
From the evidence admitted in Court, it is impossible to know whether
Appellee was ever a “holder” of the promissory note – as that term is defined by
the subject promissory note. Additionally, since this promissory note was payable
to a specifically identifiable person, before it could be enforced against the
Appellant it had to be indorsed. There was no evidence presented of an
indorsement, either by First Franklin or on Order of a court. Therefore, the
evidence presented proved that Appellee was not entitled to enforce the promissory
note against Appellant.
SECOND ARGUMENT
MERS DID NOT PASS AN ENFORCEABLE INTEREST
IN THE PROMISSORY NOTE TO APPELLEE
The note is the instrument of concern in all assignment situations. There is
an old maxim “the mortgage follows the note”. Evins v. Gainsville Nat’l Bank, 85
So. 659 (Fla. 1920); Case v. Smith, 200 So. 917 (Fla. 1941) The note is evidence
of the primary mortgage obligations or the debt. The assignment of the note
carries with it the mortgage and its rights, even though the mortgage instrument
has not been assigned either orally or in writing. Collins v. Briggs, 123 So. 833
(Fla. 1929); Miami Mtge. & Guar. Co. v. Drawdy, 127 So. 323 (Fla. 1930); So.
Colonial Mtge. Co. v. Medeiros, 347 So. 2d 736 (Fla. 4 DCA 1977)
23
The mortgage, as evidenced by the mortgage instrument, is only a mere
incident to the debt. Therefore, the mortgage instrument is of lesser significance.
Because the assignment of the note is an imperative act as to the transferring of the
mortgagee’s right, the assignment of the mortgage instrument without the note is
an ineffective assignment. Vance v. Fields, 172 So. 2d 613 (Fla. 1 DCA 1965);
Sobel v. Mutual Dev. Inc., 313 So. 2d 77 (Fla. 1 DCA 1975); Amacher v. Keel,
358 So. 2d 889 (Fla. 2 DCA 1975)
In the instant case, the assignment of mortgage claims that it assigns the
beneficial interest in both the note instrument and the mortgage instrument to
Appellee. However, the note instrument was bifurcated from the mortgage
instrument and MERS did not have an interest in the Note that it could assign.
MERS act of assigning the mortgage instrument was invalid as it held no beneficial
interest in the mortgage instrument for two reasons: 1) a security instrument, apart
from the promissory note giving rise to the debt has no value because there is no
debt by which it secures payment; and 2) MERS had no beneficial interest in the
mortgage instrument that it could assign.
In Carpenter v. Longan, 16 Wall. 271, 83 U.S. 271, 274, 21 L.Ed. 313
(1872), the U.S. Supreme Court stated “The note and mortgage are inseparable; the
24
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.”
“Where the mortgagee has ‘transferred’ only the mortgage, the transaction is
a nullity and his ‘assignee,’ having received no interest in the underlying debt or
obligation, has a worthless piece of paper.” (4 RICHARD R. POWELL, POWELL
ON REAL PROPERTY, § 37.27[2] (2000); In re Mitchell, Case No. BK-S-07-
16226-LBR (Bankr.Nev. 3/31/2009)(At page 12))
As previously stated in Argument 1, the Uniform Commercial Code makes a
distinction between a promissory note that is a bearer instrument and one that is
payable to a specifically identified person – the former not requiring an
indorsement to be enforceable, the latter requiring an indorsement to be
enforceable. (§ 673.2011(2), Fla. Stat. (2009); § 673.2031(3), Fla. Stat. (2009))
Additionally, the subject mortgage instrument states that it can only be
transferred with the sale of the note – and not the other way around where the sale
of the mortgage instrument would include the note. (R. I/77, para. 20) The subject
mortgage instrument provides “The Note or a partial interest in the Note (together
with this Security Instrument) can be sold one or more times without prior notice
to Borrower.” (R. I/77, para. 20) In this case, the only relevant transfer that could
occur is a transfer of the promissory note, which would include a transfer of the
25
mortgage instrument if ownership of that instrument were not bifurcated from the
ownership of the promissory note. So an assignment of the mortgage instrument
from MERS to Appellee would not transfer the promissory note to Appellee.
Appellant’s Opposition to the Appellee’s Motion for Summary Final
Judgment included an affidavit of the contents of the MERS website. The
Opposition stated in relevant part:
MERS has nothing to transfer by an assignment. MERS own website listed
“MERS Recommended Foreclosure Procedures for FLORIDA”.7 In this
document MERS states that it is not the beneficial owner of the promissory
note. This document states:
MERS stands in the same shoes as the servicer to the extent that it is
not the beneficial owner of the promissory note. An investor,
typically a secondary market investor, will be the ultimate owner of
the note. (fn 8)
Foot Note 8:
Even though the servicer has physical custody of the note, custom in
the mortgage industry is that the investor (Fannie Mae, Freddie Mac,
Ginnie Mae or a private investor) owns the beneficial rights to the
promissory note.
(R. I/177-178)
In the consolidated cases of In re Foreclosure Cases, 521 F. Supp. 2D 650,
653 (S.D. Oh. 2007), a standing challenge was made and the Court found that there
was no evidence of record that New Century ever assigned to MERS the
7 http://www.mersinc.org/filedownload.aspx?id=176&table=ProductFile
26
promissory note or otherwise gave MERS the authority to assign the note.
Beginning with this case, courts around the country started to recognize that MERS
had no ownership in the notes and could not transfer an interest in a mortgage
upon which foreclosure could be based.
In LaSalle Bank NA v. Lamy, 824 N.Y.S.2d 769 (N.Y. Supp. 2006), the
Court denied a foreclosure action by an assignee of MERS on the grounds that
MERS itself had no ownership interest in the underlying note and mortgage.
In the case of In re Mitchell, Case No. BK-S-07-16226-LBR (Bankr.Nev.,
2009), the Court stated “In order to foreclose, MERS must establish there has been
a sufficient transfer of both the note and deed of trust, or that it has authority under
state law to act for the note’s holder.” (At page 9) The Court found that MERS has
no ownership interest in the promissory note. The Court found that though MERS
attempts to make it appear as though it is a beneficiary of the mortgage, it in fact is
not a beneficiary. The Court stated “But it is obvious from the MERS’ “Terms and
Conditions” that MERS is not a beneficiary as it has no rights whatsoever to any
payments, to any servicing rights, or to any of the properties secured by the loans.
To reverse an old adage, if it doesn’t walk like a duck, talk like a duck, and quack
like a duck, then it’s not a duck.” (At page 7) MERS Terms and Conditions say
this:
27
MERS shall serve as mortgagee of record with respect to all such mortgage
loans solely as a nominee, in an administrative capacity, for the beneficial
owner or owners thereof from time to time. MERS shall have no rights
whatsoever to any payments made on account of such mortgage loans, to
any servicing rights related to such mortgage loans, or to any mortgaged
properties securing such mortgage loans. MERS agrees not to assert any
rights (other than rights specified in the Governing Documents) with respect
to such mortgage loans or mortgaged properties. References herein to
“mortgage(s)” and “mortgagee of record” shall include deed(s) of trust
and beneficiary under a deed of trust and any other form of security
instrument under applicable state law.
In the case of In re Vargas, 396 B.R. 511, 520 (Bankr.C.D.Cal., 2008) , the
Court stated:
MERS is not in the business of holding promissory notes. (fn 10: MERS,
Inc. is an entity whose sole purpose is to act as mortgagee of record for
mortgage loans that are registered on the MERS System. This system is a
national electronic registry of mortgage loans, itself owned and operated by
MERS, Inc.’s parent company, MERSCORP, Inc.)
In the case of In re Sheridan, Case No. 08-20381-TLM (Bankr.Idaho, 2009)
MERS moved for relief from the stay. The Court stated that MERS “Counsel
conceded that MERS is not an economic “beneficiary” under the Deed of Trust. It
is owed and will collect no money from Debtors under the Note, nor will it realize
the value of the Property through foreclosure of the Deed of Trust in the event the
Note is not paid.” The Court stated “Further, the Deed of Trust’s designation of
MERS as “beneficiary” is coupled with an explanation that “MERS is . . . acting
solely as nominee for Lender and Lender’s successors and assigns.” The Court
28
stated “Even if the proposition is accepted that the Deed of Trust provisions give
MERS the ability to act as an agent (“nominee”) for another, it acts not on its own
account. Its capacity is representative.”
In Landmark National Bank v. Kesler, 216 P.3D 158 (Kansas, 2009), the
Kansas Supreme Court extensively analyzed the position of MERS in relation to
the facts in that case and other non-binding court cases and concluded that MERS
is only a digital mortgage tracking service. (At page 168) The Court recited that
MERS never held the promissory note, did not own the mortgage instrument
(though the documents identified it as “mortgagee”), that it did not lend money, did
not extend credit, is not owed any money by the mortgage debtors, did not receive
any payments from the borrower, suffered no direct, ascertainable monetary loss as
a consequence of the litigation and consequently, has no constitutionally protected
interest in the mortgage loan.
Appellant’s Opposition to the Appellee’s Motion for Summary Final
Judgment included reference to professor Christopher L. Peterson’s writings on
MERS and the secondary market as a source for the court to understand what
MERS is and how it operates. (R. I/179) Christopher L. Peterson, Associate
Professor of Law, University of Florida, testified at a hearing before the U.S.
29
Senate Committee on Banking, Housing, and Urban Affairs Subcommittee on
Securities, Insurance, and Investment and stated:8
MERS is merely a document custodian. . . . The system itself
electronically tracks ownership and servicing rights of mortgages. . . .
The parties obtain two principal benefits from attempting to useMERS as a
“mortgagee of record in nominee capacity.” First, under state secured credit
laws, when a mortgage is assigned, the assignee must record the assignment
with the county recording office, or risk losing priority vis-à-vis other
creditors, buyers, or lienors. Most counties charge a fee to record the
assignment, and use these fees to cover the cost of maintaining the real
property records. Some counties also use recording fees to fund their court
systems, legal aid organizations, or schools. In this respect, MERS’ role in
acting as a mortgagee of record in nominee capacity is simply a tax evasion
tool. By paying MERS a fee, the parties to a securitization lower their
operating costs. The second advantage MERS offers its customers comes
later when homeowners fall behind on their monthly payments. In addition
to its document custodial role, and its tax evasive role, MERS also
frequently attempts to bring home foreclosure proceedings in its own name.
This eliminates the need for the trust—which actually owns the loan—to
foreclose in its own name, or to reassign the loan to a servicer or the
originator to bring the foreclosure.
R.K. Arnold, Senior Vice President, General Counsel and Secretary of
Mortgage Electronic Registration Systems, Inc., stated:
MERS® will act as mortgagee of record for any mortgage loan registered
on the computer system MERS® maintains, called the MERS® System. It
will then track servicing rights and beneficial ownership interests in those
loans and provide a platform for mortgage servicing rights to be traded
electronically among its members without the need to record a mortgage
8 Subprime Mortgage Market Turmoil: Examining the Role of Securitization,
http://banking.senate.gov/public/index.cfm?
FuseAction=Files.View&FileStore_id=4f40e1b9-ec5b-4752-ba8f-
0c14afc44884 . (At page 6 -8)
30
assignment in the public land records each time. . . . Members pay annual
fees to belong and transaction fees to execute electronic transactions on the
MERS® System. . . . A mortgage note holder can sell a mortgage note to
another in what has become a gigantic secondary market. . . . For these
servicing companies to perform their duties satisfactorily, the note and
mortgage were bifurcated. The investor or its designee held the note and
named the servicing company as mortgagee, a structure that became
standard. . . . When a mortgage loan is registered on the MERS® System, it
receives a mortgage identification number (MIN). The borrower executes a
traditional paper mortgage naming the lender as mortgagee, and the lender
executes an assignment of the mortgage to MERS®. Both documents are
executed according to state law and recorded in the public land records,
making MERS® the mortgagee of record. From that point on, no additional
mortgage assignments will be recorded because MERS® will remain the
mortgagee of record throughout the life of the loan. . . . MERS® keeps track
of the new servicer electronically and acts as nominee for the servicing
companies and investors. Because MERS® remains the mortgagee of
record in the public land records throughout the life of a loan, it eliminates
the need to record later assignments in the public land records. Usually,
legal title to the property is not affected again until the loan is paid and the
mortgage is released.
(R.K. Arnold, Yes, There is Life on MERS, Prob.& Prop., Aug. 1997, at p.16;
http://www.abanet.org/genpractice/magazine/1998/spring-bos/arnold.html)
Courts around this country are clearly recognizing that MERS is not an
owner of the promissory note and that it is also only a mortgagee in name alone
and has no beneficial interest in the mortgage instrument. Landmark National Bank
v. Kesler, 216 P.3D 158 (Kansas, 2009); Mortgage Electronic Registration
System, Inc. v. Southwest Homes of Arkansas, 08-1299 (Ark. 3/19/2009) (Ark.,
2009) MERS own website says as much. Therefore, the assignment of
mortgage from MERS to Appellee could not transfer an interest in the promissory
31
note; it could not even transfer an enforceable interest in the mortgage instrument.
One hundred and thirty-eight years ago, the U.S. Supreme Court recognized
that the mortgage instrument is inseparable from the promissory note. Carpenter v.
Longan, 16 Wall. 271, 83 U.S. 271, 21 L.Ed. 313 (1872) That was necessary to
ensure that title to property could be deraigned. However, MERS is a product of
the past two decades and was designed to privatize recorded mortgages in order to
avoid the payment of taxes upon the recording of assignments of mortgage. The
design of bifurcating the mortgage instrument from the promissory note is not
based on law and it impairs the historical ability to deraign title. The logical
conclusion of bifurcating the mortgage instrument to MERS is that it renders a
foreclosure impossible as the promissory note is no longer secured by that
mortgage instrument. What they have sown, they should reap.
In Stuyvesant Corp. v. Stahl, 62 So.2d 18, 20 (Fla., 1952), the Florida
Supreme Court stated:
The rule is settled in this State that a principal is bound by the acts of his
agent. The authority of the agent may be real or it may be apparent and the
public may rely on either unless in the case of apparent authority the
circumstances are such as to put one on inquiry. The agent’s authority may
be conferred by writing, by parol, or it may be inferred from the related facts
of the case. (Cites omitted)
There was no evidence presented that MERS had any authority to act as an
agent for First Franklin. The Arkansas Supreme Court came to the same
32
conclusion in Mortgage Electronic Registration System, Inc. v. Southwest Homes
of Arkansas, 08-1299 (Ark. 3/19/2009) (Ark., 2009)(At page 7) By all
appearances, it seems contrary to the interests of First Franklin that the Appellee
would attempt to collect on a promissory note that was payable to First Franklin.
CONCLUSION
WHEREFORE, the Circuit Court’s judgment should be set aside and the
matter remanded.
Respectfully Submitted,
_________________________
George M. Gingo, FBN 879533
Counsel for Appellant
P.O. Box 838
Mims, FL 32754
321-264-9624 Office
321-383-1105 Fax
ggingo@yahoo.com
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the foregoing was
served by U.S. Mail on Jonathan J.A. Paul, Butler & Hosch, P.A., 3185 S. Conway
Road, Suite E, Orlando, Florida 32812 on this 15th day of January, 2010.
___________________________
George M. Gingo, FBN 879533
33
CERTIFICATE OF FONT COMPLIANCE
I certify that the lettering in this brief is Times New Roman 14-point font
and complies with the font requirements of the Florida Rule of Appellate
Procedure 9.210(a)(2).
By: _________________________
George M. Gingo, FBN 8795335-27-10-first-franklin-appeal-george-gingo

non-judicial sale is NOT an available election for a securitized loan

2 Jun

Posted 6 days ago by Neil Garfield on Livinglies’s Weblog
NON-JUDICIAL STATES: THE DIFFERENCE BETWEEN FORECLOSURE AND SALE:

FORECLOSURE is a judicial process herein the “lender” files a lawsuit seeking to (a) enforce the note and get a judgment in the amount owed to them (b) asking the court to order the sale of the property to satisfy the Judgment. If the sale price is lower than the Judgment, then they will ask for a deficiency Judgment and the Judge will enter that Judgment. If the proceeds of sale is over the amount of the judgment, the borrower is entitled to the overage. Of course they usually tack on a number of fees and costs that may or may not be allowable. It is very rare that there is an overage. THE POINT IS that when they sue to foreclose they must make allegations which state a cause of action for enforcement of the note and for an order setting a date for sale. Those allegations include a description of the transaction with copies attached, and a claim of non-payment, together with allegations that the payments are owed to the Plaintiff BECAUSE they would suffer financial damage as a result of the non-payment. IN THE PROOF of the case the Plaintiff would be required to prove each and EVERY element of their claim which means proof that each allegation they made and each exhibit they rely upon is proven with live witnesses who are competent — i.e., they take an oath, they have PERSONAL KNOWLEDGE (not what someone else told them),personal recall and the ability to communicate what they know. This applies to documents they wish to use as well. That is called authentication and foundation.

SALE: Means what it says. In non-judicial sale they just want to sell your property without showing any court that they can credibly make the necessary allegations for a judicial foreclosure and without showing the court proof of the allegations they would be required to make if they filed a judicial foreclosure. In a non-judicial state what they want is to SELL and what they don’t want is to foreclose. Keep in mind that every state that allows non-judicial sale treats the sale as private and NOT a judicial event by definition. In Arizona and many other states there is no election for non-judicial sale of commercial property because of the usual complexity of commercial transactions. THE POINT is that a securitized loan presents as much or more complexity than commercial real property loan transactions. Thus your argument might be that the non-judicial sale is NOT an available election for a securitized loan.

When you bring a lawsuit challenging the non-judicial sale, it would probably be a good idea to allege that the other party has ELECTED NON-JUDICIAL sale when the required elements of such an election do not exist. Your prima facie case is simply to establish that the borrower objects the sale, denies that they pretender lender has any right to sell the property, denies the default and that the securitization documents show a complexity far beyond the complexity of even highly complex commercial real estate transactions which the legislature has mandated be resolved ONLY by judicial foreclosure.

THEREFORE in my opinion I think in your argument you do NOT want to concede that they wish to foreclose. What they want to do is execute on the power of sale in the deed of trust WITHOUT going through the judicial foreclosure process as provided in State statutes. You must understand and argue that the opposition is seeking to go around normal legal process which requires a foreclosure lawsuit.

THAT would require them to make allegations about the obligation, note and mortgage that they cannot make (we are the lender, the defendant owes us money, we are the holder of the note, the note is payable to us, he hasn’t paid, the unpaid balance of the note is xxx etc.) and they would have to prove those allegations before you had to say anything. In addition they would be subject to discovery in which you could test their assertions before an evidentiary hearing. That is how lawsuits work.

The power of sale given to the trustee is a hail Mary pass over the requirements of due process. But it allows for you to object. The question which nobody has asked and nobody has answered, is on the burden of proof, once you object to the sale, why shouldn’t the would-be forecloser be required to plead and prove its case? If the court takes the position that in non-judicial states the private power of sale is to be treated as a judicial event, then that is a denial of due process required by Federal and state constitutions. The only reason it is allowed, is because it is private and “non-judicial.” The quirk comes in because in practice the homeowner must file suit. Usually the party filing suit must allege facts and prove a prima facie case before the burden shifts to the other side. So the Judge is looking at you to do that when you file to prevent the sale.

Legally, though, your case should be limited to proving that they are trying to sell your property, that you object, that you deny what would be the allegations in a judicial foreclosure and that you have meritorious defenses. That SHOULD trigger the requirement of re-orienting the parties and making the would-be forecloser file a complaint (lawsuit) for foreclosure. Then the burden of proof would be properly aligned with the party seeking affirmative relief (i.e., the party who wants to enforce the deed of trust (mortgage), note and obligation) required to file the complaint with all the necessary elements of an action for foreclosure and attach the necessary exhibits. They don’t want to do that because they don’t have the exhibits and the note is not payable to them and they cannot actually prove standing (which is a jurisdictional question). The problem is that a statute passed for judicial economy is now being used to force the burden of proof onto the borrower in the foreclosure of their own home. This is not being addressed yet but it will be addressed soon.

Why So Much Concern about Price Deflation?

31 May

By Richard E. Wagner, Ph.D.

We recently have been hearing a lot about the threat of deflation, doubtlessly inspired by recent falls in indexes of consumer and producer prices. The Great Depression of the 1930s comes to mind when people speak of deflation. No one wants another Great Depression. Nearly everyone would prefer the double-digit inflation of twenty years ago. This preference is reasonable, but it does not follow that deflation is bad. Whether deflation is bad or good depends on why prices fall.

The Great Depression of the 1930s is the prime example of the bad kind of deflation. The Federal Reserve allowed the supply of money to shrink by thirty-five percent between 1930 and 1933. This gigantic destruction in the supply of money sabotaged markets throughout the land. Consumers could not afford to buy products, businesses could not sell their output, and workers could not find jobs. All of this happened because the Federal Reserve failed in its fundamental task of keeping the stock of money intact. This kind of demand-side deflation is clearly an economic scourge of major proportions.

Deflation can also result for supply-side reasons. This type of deflation is a radically different type of animal, and is a good one to have around. It is the kind of deflation that occurred in our economy after the Civil War and existed pretty much continually until the creation of the Federal Reserve in 1913. As productivity increased, consumer prices fell. Workers did not receive the continual wage increases that they have received during our recent inflationary times. Their well-being increased nonetheless. Steady wages with falling prices is a fine recipe for progress. This is, moreover, a recipe that works to the advantage of retired people on fixed incomes. With moderate deflation, a fixed sum for retirement goes ever farther because deflation allows retirees to share in the gains from rising productivity.

There is all the reason in the world to avoid a demand-side deflation. There is no reason at all, however, to oppose a supply-side deflation. No reason, at least, for ordinary citizens to oppose a supply-side deflation. It may be different for politicians and government officials. They are in a different situation with respect to deflation than are ordinary citizens. Inflation allows for increases in government budgets that would never be possible under deflation. Sustained inflation entered the American economy only with the creation of the Federal Reserve in 1913. Until then, the federal government claimed less than ten percent of the output of the American economy. It was only after steady inflation became a way of life that government’s share in the economy grew and now approaches fifty percent.

There are many reasons why inflation promotes growth in government. One of them is that inflation increases the share of total income that is collected through ordinary taxes. A ten percent increase in income increases collections of income tax on the order of twelve percent. This ability of tax rates to rise with inflation is referred to as “bracket creep.” Inflation pushes people into higher rate brackets, where they pay larger shares of their income in taxes.

Besides bracket creep, inflation is also a type of tax in its own right. The inflation tax is a form of public counterfeiting that goes by the technical name “seigniorage.” Seigniorage is the difference between the value of the money the government creates and the cost of creating that money. It is the government’s profit from creating money, and it is of the same character as the profit that a private counterfeiter makes. It costs almost nothing for the government to print another $100 bill, but this new bill is as valuable as all other $100 bills.

To be sure, the collection of this seigniorage tax works differently in different nations. In some nations, the Treasury and the central bank are joined. In those places, the government can finance its activities directly by creating money. It is different in America because the Treasury and the central bank are distinct. The government can still finance its activities by creating money, only this happens indirectly in two stages. In the first stage the government runs a deficit; in the second stage the Federal Reserve buys government bonds. The end result is indistinguishable from the Treasury directly creating money to finance its activities.

Supply-side deflation would put an end to the government’s ability to finance its activities through monetary expansion as well as through bracket creep. It would also eliminate the need for all of the various forms of indexing that have arisen to deal with inflation. The only losers from deflation would be those who live off the tax revenues that inflation generates.

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(Richard E. Wagner is Holbert Harris Professor of Economics at George Mason University and a member of the Board of Scholars of the Virginia Institute for Public Policy, an education and research organization headquartered in Potomac Falls, Virginia. Permission to reprint in whole or in part is hereby granted, provided the author and his affiliations are cited.)