Why Homeowners Must Know these Important Points of Bankruptcy Appeal

23 Wednesday Sep 2015

Posted by BNG in Appeal, Bankruptcy, Federal Court, Foreclosure Defense, Judicial States, Non-Judicial States

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Bankruptcy, bankruptcy appeal, bankruptcy court, homeowners, Plaintiff, Pro se legal representation in the United States

Every appeal requires an appellate advocate to understand and follow
a series of rules. When an appeal is from a decision by a federal
bankruptcy court, there is yet another layer of rules and complexity
to consider. This article briefly identifies a dozen important points
about bankruptcy appeals.

1. The Time for Filing a Notice of Appeal in a Bankruptcy Appeal Is Generally Shorter Than in Other Appeals.

Under 28 U.S.C. § 158(c)(2) and Federal Rule of Bankruptcy Procedure (“Bankruptcy Rule”) 8002(a), a party seeking to appeal a decision by a bankruptcy court has 14 days to file its appeal.1 This is 16 days less than the 30 days a party generally is given under the Federal Rules of Appellate Procedure (“F.R.A.P.”) to appeal from district court to a federal appellate court.2 As with F.R.A.P. 4(a)(5), the Bankruptcy Rules permit some leeway if an appellant misses its deadline. Under the Bankruptcy Rules, a bankruptcy court may allow an appellant who fails to timely file up to 20 additional days to file where that appellant can demonstrate “excusable neglect.”3 After 30 days, however, a bankruptcy appellant loses its right to appeal even if there is excusable neglect.4 Factors to be considered in determining whether there is excusable neglect include the danger of prejudice to the appellee; the length of delay and its impact on the judicial proceeding; the reason for the delay; whether the delay was in the movant’s control; and the movant’s good faith.5

2. An Appellant May Waive an Issue Not Raised at the Outset of its Bankruptcy Appeal.

Under Bankruptcy Rule 8006, within 14 days of filing its Notice of
Appeal, an appellant must file and serve a designation of the items to be
included in the record on appeal and a statement of issues to be presented
on appeal. If an appellant fails to include an issue in this Statement, the
issue is waived even if this had been raised and/or decided by the bankruptcy
court.6

3. Those Who Ignore Deadlines and Procedural Rules May Forfeit Their Appeal.

Bankruptcy Rule 8001(a) authorizes dismissal of a bankruptcy appeal when a party fails to take any required step other than filing its Notice of Appeal. Courts adjudicating bankruptcy appeals may dismiss appeals when a party fails to take a necessary step, such as filing its record designations, statement of issues or its brief.7
While the Bankruptcy Rules permit dismissal, however, certain circuits require the appellate court to weigh a series of factors before it dismisses a case in its entirety. For example, the Third Circuit requires the balancing of six factors before a case is dismissed. These are:
• The extent of the party’s personal responsibility;
• The prejudice to the adversary caused by the failure to meet scheduling
orders;

• A history of dilatoriness;
• Whether the conduct of the party or the attorney was willful or in bad
faith;
• The effectiveness of sanctions other than dismissal, which entails an
analysis of alternative sanctions;
• The meritoriousness of the claim or defense.8

4. In Five Circuits, Bankruptcy Appeals May Be Heard in the First Instance by Two Different Types of Courts.

Under 28 U.S.C. § 158(c)(1), an appellant in an appeal from bankruptcy court may choose in the first instance to appeal either to a district court acting as an appellate court or, if the relevant circuit provides for one, to a Bankruptcy Appellate Panel (“BAP”). Even if the appellant chooses a BAP, however, any other party to the appeal may, no later than 30 days after service of the notice of appeal, ask to have the appeal heard by the relevant district court. The First, Sixth, Eighth, Ninth and Tenth Circuits each have a BAP. If an appeal is to a BAP, then the Bankruptcy
judge’s decision will be reviewed by fellow sitting bankruptcy judges.
Usually a BAP consists of three sitting bankruptcy judges in the circuit who are assembled for a particular day of argument. By their very nature, BAPs will consist of judges who have special expertise regarding bankruptcy issues, while district courts may not. The BAP may sit in different places in the circuit. For example, the Eighth Circuit BAP conducts hearing in Omaha, St. Louis, Kansas City, and other locations where its bankruptcy courts sit.

5. BAP Rules Vary by Circuit.

Just like the individual federal circuit courts of appeal, the various BAPs each have their own rules. These vary between each circuit. Any party in a BAP appeal, therefore should know the specifics and particularities of the specific BAP’s rules and should follow these.
Among these specialized rules, for example, are that, in the Eighth Circuit BAP, parties are limited to opening briefs of 6500 words.9 The Ninth Circuit BAP Rules provide that only those portions of transcripts included in the excerpts of the record will be considered in an appeal and that these must include excerpts necessary for the BAP to apply the required standard of review to a matter.10 The First Circuit BAP Rules generally limit argument to 15 minutes per side.11 The Tenth Circuit BAP requires that a brief include a statement of related cases—i.e., one that includes the same litigants and substantially the same fact pattern or legal issues – that are
pending in any other federal court.12 The Sixth Circuit BAP Rules provide
for a possible pre-argument conference and mediation.13

6. The Bankruptcy Rules Generally Govern Appeals to the District Court.

As noted in the prior section, BAPs have elaborate rules that govern all aspects of appeals before them. By the terms of the Bankruptcy Rules, these specific rules can supersede conflicting terms in the Bankruptcy Rules. However, when an appeal is to the district court, the Bankruptcy Rules generally apply in the absence of a local rule or district court rule specifically addressing bankruptcy appeals, which are much less common.
While not as comprehensive as the F.R.A.P., the Bankruptcy Rules have 20 provisions governing all aspects of appeals.14 These rules addresses appellate issues, including, among others, the filing and service of appellate papers;15 the filing and service of briefs and appendices;16 the form of briefs and their length;17 motions;18 oral argument;19 disposition of the appeal;20 costs;21 and rehearing,22 among others. (These rules also provide for the accelerated filing of district court appeals, as an appellant is to serve and file its brief within 15 days after entry of the appeal on the docket; the appellant is to serve its brief within 15 days after service of the appellant’s brief and the appellant is to serve its reply within 10 days after service of the appellee’s brief.)23 In the absence of rules to the contrary, opening briefs may be up to 50 pages and reply briefs up to 25 pages.
Under Bankruptcy Rule 8012, oral argument is to be generally allowed in all cases. In practice, however, oral argument is much less common before district courts. When an appeal is before district court, there is some question about whether its decision has precedential effect.24

7. Bankruptcy Appeals Often Include an Extra Tier of Review.

Generally, before an appeal reaches a federal circuit court of appeals, it is adjudicated by either a BAP or a district court. The findings of these first tier courts are not binding on the circuit court of appeals and, the appellate court owes no deference to the decisions by the BAP or district court.
Review by the circuit court of appeals is plenary.25 Nonetheless, some circuit courts have noted that the first tier of appeal acts as a helpful filter.26
An appellate court may reach issues brought up before but not decided by the district court or BAP.27

8. Direct Appeal to the Circuit Court of Appeals Is Allowed in Limited Instances.

Pursuant to Section 1233 of the Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”), a circuit court of appeals has discretion to permit a direct appeal frombankruptcy court where there is uncertainty in the bankruptcy court, either due to the absence of a controlling legal decision or a conflicting decision on the issue and the issue is of great importance, or where the court finds it is patently obvious that the bankruptcy court’s decision either was correct or incorrect, such that the first tier of review in the district court or BAP is less efficient and helpful.28

9. At Each Tier of the Appeal, The Bankruptcy Court Is Given the Same Level of Deference and Same Form of Scrutiny.

Courts in bankruptcy appeals review issues of law de novo and findings of fact for clear error.29 Courts of appeal apply the same standard of review as do BAPs and district courts.30 Courts of appeal generally review issues of procedure under an abuse of discretion standard. These include motions to compromise or to lift a stay, for example.31

10. This Is a Greater Threat of Mootness in Bankruptcy Appeals Than in Other Federal Appeals.

A bankruptcy appeal may become constitutionally moot where events may occur that make it impossible for the appellate court to fashion effective relief.32 Thus, for example, if, while an appeal is pending, a plan is confirmed pursuant to which all assets are distributed, all creditors with allowed claims are paid in full, and the bankruptcy case is closed such that the debtor no longer exists, an appeal against that debtor is moot because there is no meaningful relief that may be granted.33 An appeal may also be considered “equitably moot” where a change in circumstances makes it inequitable for a court to consider the merits of an appeal.34
However, if there remains any possibility that an appeal may result in a tangible benefit to the appellant, it is not moot.35

11. Only Those Persons Aggrieved Have Standing to Bring a Bankruptcy Appeal.

Only those whose rights or interests are directly and adversely affected pecuniarily by an order of the bankruptcy court have standing to bring an appeal.36

12. Appellate Courts Take a Broader Notion of “Finality” in Bankruptcy Appeals Than in Other Appeals.

Because of the length of many bankruptcy proceedings and the waste of time and resources that may result if the court denied immediate appeals, federal courts of appeal apply a broader concept of “finality” when considering bankruptcy appeals under 28 U.S.C. § 1291 than in considering non-bankruptcy appeals.37 Courts apply a number of factors in determining whether to assert appellate jurisdiction. These include:
1) the impact on the assets of the bankruptcy estate;
2) the necessity for further fact-finding on remand;
3) the preclusive effect of the court’s decision on the merits in further litigation,
and
4) the interest of judicial economy.38
Each of these issues, of course, could justify an article in itself. I hope
these provide some helpful thoughts and issues to consider when participating
in a bankruptcy appeal.

NOTE

1 Certain types of motions toll this time for filing until the last such motion
is disposed of. See Bankruptcy Rule 8002(b).
2 See F.R.A.P.4(a).
3 Bankruptcy Rule 8002(c)(2); Bankruptcy Rule 9006(b). Of course where
an appeal is from a district court to a federal circuit court on a bankruptcy
issue, F.R.A.P. 4’s 30-day rule applies.
4 See Shareholders v. Sound Radio, Inc., 109 F.3d 873, 879 (3d Cir. 1997).
The law is unsettled as to whether bankruptcy appellate deadlines are “jurisdictional,”
such that objections to untimeliness may be waived if not promptly
made. See In re Fryer, 2007 WL 1667198 (3d Cir. June 11, 2007) (citing
Kontrick v. Ryan 540 U.S. 443 (2004), and Eberhart v United States, 546 U.S.
12 (2005)).
5 See Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’Ship, 507 U.S. 380,
395 (1993).
6 See In re GGM, P.C., 165 F.3d 1026, 1032 (5th Cir. 1999). Of course, one
may not first raise new issues on appeal that were not presented before the
bankruptcy court. See In re Ginther Trusts, 238 F.3d 686, 689 & n.3. (5th Cir.
2001).
7 See, e.g., In re Lynch, 430 F.3d 600 (Cir. 2005); In re Braniff Airways, Inc.,
774 F.2d 1303, 1305 n.6 (5th Cir. 1985).

8 Poulis v. State Farm Fire & Cas. Co., 747 F.2d 863, 868 (3d. Cir. 1984).
See also In re Harris, 464 F.3d 263 (2d Cir. 2006) (failure to include required
transcript of oral argument did not warrant dismissal of appeal where lesser
sanctions were available); In re Beverly Mfg. Corp., 778 F.2d 666, 667 (11th
Cir. 1985) (“Dismissal typically occurs in cases showing consistently dilatory
conduct or the complete failure to take any steps other than the mere filing
of a notice of appeal.”).
9 8th Cir. BAP Rule 8010A.
10 9th Cir. BAP Rule 8006-1.
11 1st Cir. BAP Rule 8012-1.
12 10th Cir. BAP Rule 8010-1.
13 6th Cir. BAP Rule 8080-2.
14 Bankruptcy Rules 8001-8020.
15 Bankruptcy Rule 8008.
16 Bankruptcy Rule 8009.

17 Bankruptcy Rule 8010.
18 Bankruptcy Rule 8011.
19 Bankruptcy Rule 8012.
20 Bankruptcy Rule 8013.
21 Bankruptcy Rule 8014.
22 Bankruptcy Rule 8015.
23 Bankruptcy Rule 8009.
24 See In re Shattuck Cable Corp., 138 B.R. 557, 565 (Bankr. N.D. Ill. 1992).
25 See In re Best Prods. Co., 68 F.3d 26, 30 (2d Cir. 1995).
26 See Weber v. United States Trustee, 484 F.3d 154 (2d Cir. 2007) (“In many
cases involving unsettled areas of bankruptcy law, review by the district court
would be most helpful. Courts of appeal benefit immensely from reviewing
the efforts of the district court to resolve such questions”).
27 See Hartford Courant Co. v. Pellegrino, 380 F.3d 83, 90 (2d Cir. 2004).
28 See Weber, 484 F.3d at 157 (citing BAPCPA § 1233, 28 U.S.C.
§ 158(d)(2)(a)(i)-(iii)).
29 See In re ABC-Naco, Inc., 483 F.3d 470, 472 (7th Cir. 2007).
30 See In re Senior Cottages of Am., 482 F.3d 997, 1000-1001 (8th Cir. 2002)
31 See In re Martin, 222 Fed. Appx. 360, 362 (5th Cir. 2007).
32 See In re Focus Media Inc., 378 F.3d 916, 922 (9th Cir. 2004).
33 See In re State Line Hotel, Inc., 2007 WL 1961935 (9th Cir. July 5, 2007);
see also Gardens of Cortez v. John Hancock Mut. Life Ins. Co., 585 F.2d 975,
978 (10th Cir. 1978) (dismissal of bankruptcy petition moots appeal to lift
stay).

34 See Ederel Sport v. Gotcha, Int’l, L.P., 311 B.R. 250, 254 (9th Cir. BAP
2004).
35 See In re Howard’s Express, Inc., 151 Fed. Appx. 46 (Oct. 5, 2005) (conversion
from Chapter 11 to Chapter 7 did not moot appeal because liquidation
was not complete and preference actions remained to be tried, which
could generate assets to satisfy claims of appellants).
36 See In re PWS Holding Corp., 228 F.3d 224, 249 (3d Cir. 2000).
37 See In re Owens Corning, 419 F.3d 196, 203 (3d Cir. 2005).
38 Id.

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What Homeowners Must Know About Bankruptcy Appeals

23 Wednesday Sep 2015

Posted by BNG in Appeal, Bankruptcy, Federal Court, Foreclosure Defense, Pro Se Litigation, Your Legal Rights

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Tags

Bankruptcy Appeals, bankruptcy court, homeowners, Pro se legal representation in the United States

When challenging Bankruptcy dismissals or Adversary proceeding on appeal, homeowners should bear the following in mind.
A district court may dismiss a bankruptcy appeal for any of a number of procedural reasons having nothing to do with the merits of the appeal.

Is the appeal timely?

Bankruptcy Rule 8002(a) requires that a notice of appeal be filed within
14 days of the bankruptcy court order or judgment at issue. A district court lacks
jurisdiction over an untimely appeal.

Shareholders v. Sound Radio, Inc., 109 F.3d 873, 878-79 (3d Cir. 1997).

Did the appellant refer to the order or judgment at issue in its notice of appeal?

A district court lacks jurisdiction over a bankruptcy court order or judgment that is not directly or indirectly referred to in the notice of appeal. In re Smith, WL 1716684 at *2 (3d Cir. June 22, 2006).

Is the bankruptcy court order final?

Under 28 U.S.C. § 158(a), a district court may hear appeals only from
final judgments, orders and decrees of a bankruptcy court. Although district courts liberally construe finality in bankruptcy appeals, an order in a bankruptcy case may be considered interlocutory, and hence, subject to dismissal, if the order does not implicate a discrete issue which in and of itself will determine the rights and liabilities of the parties concerned. Thus, for example, in In re Elsinore Shore Assocs., a district court lacked jurisdiction over an appeal from an order approving a disclosure statement. 82 B.R. 339, 341-42 (D.N.J. 1988). Moreover, the general antipathy toward piecemeal appeals still prevails in individual bankruptcy adversary proceedings. Thus, for example, in Natale
v. French & Pickering Creeks Conservation Trust, Inc. (In re Natale), the
Third Circuit held that an order granting summary judgment regarding the priority of competing liens, but not deciding whether the debtor could avoid a particular lien, was not a final appealable order. 295 F.3d 375, 379-80 (3d Cir. 2002).

Does the appellant meet the standard for interlocutory review?

If the appellant seeks review of an interlocutory bankruptcy court order, a district court may grant leave to hear an appeal from the order only upon the satisfaction of three elements: (i) the appeal involves a controlling question of law; (ii) the question is one on which a substantial ground for difference of opinion exists; and (iii) an immediate appeal would materially advance the ultimate termination of the litigation. Orr v. Ameriquest Mortg. Co. (In re Hollis), 2010 WL 336132 at **1-4 (D.N.J. Jan. 22, 2010).

Does the appellant have standing to appeal?

Only a party whose rights or interests are directly and adversely affected
in a pecuniary fashion by a bankruptcy court order may appeal from the order.
In re PWS Holding Corp., 228 F.3d 224, 248-49 (3d Cir. 2000).

Is the appeal constitutionally moot?

Generally, a bankruptcy appeal, like an appeal in civil litigation, is dismissed as moot when events during the pendency of the appeal prevent the appellate
court from granting any effective relief.
So, for instance, in In re Highway Truck Drivers & Helpers Local Union No. 107,
the Third Circuit held that an appeal relating to an order granting relief from the
automatic stay to permit a debtor to move for reconsideration of a decision entered by a state court was rendered moot by an intervening state court judgment relieving the debtor of its liability to the appellants. 888 F.2d 293, 297-99 (3d Cir. 1989).

Is the appeal equitably moot?

A bankruptcy appeal is equitably moot when, even if the district court has jurisdiction to grant relief, implementation of such relief would result in an inequitable outcome. The doctrine usually applies in appeals involving a confirmed Chapter 11 plan of reorganization. In Nordhoff Invs. Inc. v. Zenith Elecs. Corp., the Third Circuit found an appeal from an order confirming a Chapter 11 plan equitably moot on the following grounds: (i) the plan had required 18 months of negotiation among several parties and implicated hundreds of millions of dollars, restructured debt, assets, and management of a major corporation; (ii) the plan had successfully rejuvenated the corporation; (iii) the appellants had not offered evidence that the plan could be reversed without great difficulty and inequity; (iv) the appellants had failed to seek a stay of the order; (v) third parties had relied on the order; and (vi) reversal would be contrary to the public policy of encouraging successful reorganizations. 258 F.3d 180, 184-91 (3d Cir. 2001).

Is the appeal moot under section 363(m)?

According to Bankruptcy Code section 363(m), a sale or lease to a good-faith purchaser or lessee under section 363(b) or (c), once consummated, cannot be reversed or modified on appeal absent a stay. In Krebs Chrysler-Plymouth, Inc. v. Valley Motors, Inc., the Third Circuit dismissed as moot a buyer’s appeal from an order approving a debtor’s sale of franchises because the buyer had failed to obtain a stay of the sale pending appeal, the sale had closed, and the relief sought would have impacted the validity of the sale. 141 F.3d 490, 499-500 (3d Cir. 1998).

Is the appeal moot under section 364(e)?

Under Bankruptcy Code section 364(e), an order authorizing a trustee or debtor to obtain credit or incur debt from, or granting a priority or lien to, a good-faith lender, once implemented, cannot be reversed or modified on appeal absent a stay. In Resolution Trust Corp. v. Swedeland Dev. Group, Inc. (In re Swedeland Dev. Group, Inc.), the Third Circuit held that an appeal from a post-petition financing order was moot because the proceeds of the loan had been immediately distributed to the debtor in possession, the district court had denied a stay of the order and the debtor in possession had apparently expended the loan proceeds. 16 F.3d 552, 559-63 (3d Cir. 1994).

Did the appellant fail to timely file a designation of record and statement of issues?

Bankruptcy Rule 8006 requires an appellant to file and serve, within 14 days after filing the notice of appeal or the entry of an order granting leave to appeal, a designation of items to be included in the appellate record and a statement of issues on appeal. Local Bankruptcy Rule 8006-1 requires the clerk to file and serve a certification of any failure to comply with the requirement. Such failure constitutes cause for dismissal of the appeal. In re Mondelli, 2009 WL 3358465 at **2-3 (3d Cir. Oct. 20, 2009).

Did the appellant fail to obtain a copy of the bankruptcy court hearing transcript?

If an appellant has designated a bankruptcy court hearing transcript as part of the record, Bankruptcy Rule 8006 requires the appellant to immediately deliver to the reporter and file with the clerk a written request for the transcript and to pay its cost. Failure to comply with this requirement constitutes cause for dismissal of the appeal. Orr v. Buccolo (In re Buccolo), 2009 WL 146528 at **1-2 (3d Cir. Jan. 22, 2009).

Did the appellant fail to designate any issues in its statement of issues?

An appellant waives its right to assert an issue on appeal if it fails to designate the issue in its statement of issues. Interface Group-Nevada, Inc. v. Trans World Airlines, Inc. (In re Trans World Airlines, Inc.), 145 F.3d 124, 132 (3d Cir. 1998).

Did the appellant fail to timely file its appellate brief?

Bankruptcy Rule 8009 requires an appellant to file its brief within 14 days after entry of the appeal on the docket. Failure to comply with this requirement constitutes cause for dismissal of the appeal. Nyholm v. Israel (In re Nyholm), 2009 WL 114884 at *2 (D.N.J. Jan. 12, 2009).

Did the appellant fail to raise its argument before the bankruptcy court?

A district court generally may not consider in a bankruptcy appeal an argument that was not raised before the bankruptcy court. Buncher Co. v. Off. Comm. of Unsecured Creditors of GenFarm Ltd. P’ship IV, 229 F.3d 245, 253 (3d Cir. 2000).

Did the appellant fail to make its argument in its appellate brief?

An appellant may waive its right to raise an argument before the district court if its fails to make the argument in its appellate brief. Interface Group-Nevada, Inc. v. Trans World Airlines, Inc. (In re Trans World Airlines, Inc.), 145 F.3d 124, 132-33 (3d Cir. 1998).

As a homeowner, once you follow these pointers, you’ll have a better chance of winning your Bankruptcy Appeal.

When Homeowner’s good faith attempts to amicably work with the Bank in order to resolve the issue fails;

What Homeowners in Foreclosure Need to Know About Bankruptcy Jurisdiction

20 Sunday Jul 2014

Posted by BNG in Appeal, Bankruptcy, Federal Court, Foreclosure Defense, Judicial States, Litigation Strategies, Non-Judicial States, Pro Se Litigation, Your Legal Rights

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Many Homeowners in foreclosure that are considering filing for Bankruptcy, often wonder how the court system and jurisdiction is structured. This post is designed to get homeowners familiarized with the bankruptcy Jurisdiction.

Bankruptcy courts are the only venue in which bankruptcy cases may be heard in the United States. These specialized courts are subunits of the federal district courts, as established by Congress in 1979. Understanding the system of bankruptcy courts is essential to a clear picture of possible the avenues which your bankruptcy case may take.

How Bankruptcy Jurisdiction is Structured

Unlike the other federal courts, such as the United States District Courts, bankruptcy courts are legislatively created. This means that the courts were established by Congress under its legislative authority to create courts under Article I of the Constitution. Under the federal statute 28 U.S.C. 1334, bankruptcy courts have exclusive jurisdiction over bankruptcy cases. This means that a bankruptcy case cannot be filed in state court. The reason behind this law is that a uniform bankruptcy system requires cases to be filed in a uniform federal system, instead of in different state courts, which may have different rules and regulations.

How Bankruptcy Judges Were Appointed

Bankruptcy judges are appointed for 14 year terms by the United States Court of Appeals for the particular federal circuit in which the bankruptcy court resides. Thus, unlike federal district court and appellate judges, whom are appointed for life, the term of a bankruptcy judge must be renewed every 14 years by the appellate court. It is therefore quite possible for an appellate court to not renew a bankruptcy judge’s term if it is unhappy with his or her performance.

How the Appeal System Works in Bankruptcy

Although all initial bankruptcy matters are handled by a bankruptcy court, appeals of orders, decisions, and judgments on these matters are handled by appellate courts. Some circuits have what is known as a bankruptcy appellate panel. The appellate panel consists of bankruptcy judges from the same circuit who hear bankruptcy appeals. Even in circuits which have a bankruptcy appellate panel, an appellant may choose to have his appeal heard by the local federal district court. The next level of appeal is the United States Court of Appeals for the particular circuit in which the bankruptcy court sits. For example, an appeal from the bankruptcy court in San Francisco will eventually move up to the Ninth Circuit Court of Appeals. The final level of appellate review is the Supreme Court of the United States.

Federal Rules of Bankruptcy Procedure

The proceedings in a bankruptcy courts are governed by the Federal Rules of Bankruptcy Procedure. As the name suggests, these rules govern the procedural aspects of bankruptcy proceedings and trials, such as the time within which you must file your bankruptcy schedules. In large part, the bankruptcy rules of procedure mirror and incorporate the Federal Rules of Civil Procedure, which govern litigation in other federal courts. Thus, litigation in bankruptcy court is very similar to litigation in federal district courts.

How Homeowners Can Find Bankruptcy Courts

If you are considering filing for bankruptcy, it is important to identify and locate the appropriate bankruptcy court. According to federal statute, you must file your bankruptcy case in the federal district in which you were domiciled, had a principal place of business, or principal assets in the United States, within the 180 days prior to filing. Your domicile is your primary residence in which you live. For example, if you have a summer home in Texas, but live nine months of the year in California, your domicile is likely California and not Texas. Once you have determined your domiciled city, go to the US Courts Website. http://www.uscourts.gov/court_locator.aspx. Click your domiciled state on the colored map, then, click “Advanced Search.” Click “Search by Circuit,” choose “Bankruptcy Court” in the drop down menu. Choose your federal circuit according to the colored map and click “Locate.” Find the geographically closest bankruptcy court. Many states have multiple bankruptcy courts. Contact one of the courts to ensure that you choose the proper court.

When Homeowner’s good faith attempts to amicably work with the Bank in order to resolve the issue fails;

What Homeowners Needs to Know About Summary Judgment Motions

06 Tuesday May 2014

Posted by BNG in Appeal, Federal Court, Foreclosure Defense, Judicial States, Litigation Strategies, Non-Judicial States, Pleadings, Pro Se Litigation, Your Legal Rights

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Many times pretender lenders rush to the court towards the beginning of a litigation to furnish worthless pieces of papers with a dubious affidavit in hopes of convincing the court that they have everything necessary to lay claim on a Homeowner’s property.

If you find yourself in a lawsuit from your lender, you could be served with a motion for summary judgment, which is a request to end a case without a trial. A motion for summary judgment filed by an opposing party claims that you cannot prevail in the case because there is no legal dispute or your claim is without merit or a defense. Failure to respond to a motion for summary judgment can result in your case being dismissed or a judgment being rendered against you.

What Does a Motion for Summary Judgment do?

A motion for summary judgment asks the court to dispose of all or some of the issues related to your case. A motion that disposes of all issues is called a final summary judgment. A motion that only disposes of some issues is called a motion for partial summary judgment. A motion for partial summary judgment can eliminate, or narrow, the issues that are not in dispute. The case continues only on the remaining disputed issues.

What Documents are Required to File a Motion for Summary Judgment?

Generally, a motion for summary judgment should include supporting documents from the case such as declarations, affidavits, depositions, admissions, answers to interrogatories, along with a statement of facts in support of the motion. Filing a motion also requires a supporting memorandum of points and authorities, which are the legal support for the motion such as cases or statutes. The other side must receive a copy of the motion and notice of the day the hearing is to be held on the motion. The exact format and timing of summary judgment motions are determined by your state’s rules of civil procedure.

Filing an Opposition to a Motion for Summary Judgment

If a motion for summary judgment is filed against you, you must file an opposition to the motion for summary judgment showing that there are issues of fact in dispute. A response must be in writing and include the same supporting documents as a motion for summary judgment. The opposition to the motion for summary judgment should also include a statement of facts showing the dispute and supporting documents.

Your response should include a supporting memorandum of points and authorities. Prior to filing your response, consult Pleadings and Practice for the appropriate format and Points and Authorities for case law supporting your position. When you file your motion or opposition to the motion for summary judgment with the court, you will need to include a proof of service verifying the date your documents were mailed to the opposing party or their attorney.

Other Requirements for Filing a Motion for Summary Judgment or Response

Whether you are filing a motion or response, you will need to look in Pleading and Practice at the law library for the appropriate format for your motion or response. You will also need to consult Points and Authorities to find case law supporting your position. Because of the overlap in local rules and state law, it would be advisable to have an attorney prepare and file the motion for summary judgment or the opposition to the motion for summary judgment. They can make sure that your evidence and arguments are properly presented to the court.

What Happens after the Court Receives the Motion for Summary Judgment and Response?

After the court receives the original motion for summary judgment and your response, the court will review the motions and allow both sides to argue their positions. Most rules of civil procedure will not allow live testimony at a summary judgment hearing. If there are any issues in dispute, the motion for summary judgment will be denied. Failure to comply with any rules of procedures can also result in a denial of a motion or a response. If a motion for final summary judgment is granted, the decision can be appealed. If a motion for partial summary judgment is granted, you will have to wait until the lawsuit is finished to appeal the court’s decision.

Getting Further Help With Summary Judgment

If a motion for final summary judgment is granted, the decision can be appealed. If a motion for partial summary judgment is granted, you will have to wait until the lawsuit is finished to appeal the court’s decision. In either case, Homeowners should learn what procedures and timelines apply in your motion for summary judgment case to perfect your right to appeal an adverse decision.

If you find yourself in an unfortunate situation of losing or about to your home to wrongful fraudulent foreclosure, and need a complete package that will help you challenge these fraudsters and save your home from foreclosure visit: http://www.fightforeclosure.net

How Homeowners Can Effectively Use TROs to Save Their Home from Foreclosure

20 Monday Jan 2014

Posted by BNG in Appeal, Federal Court, Foreclosure Defense, Judicial States, Litigation Strategies, Non-Judicial States, Pleadings, Pro Se Litigation, Trial Strategies, Your Legal Rights

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How hard it is to fight a foreclosure depends to a great extent on where you live. If your state requires the foreclosing party to sue you (this is called judicial foreclosure), then it’s easier (and less expensive) to jump into the existing lawsuit. If, in your state, foreclosures proceed without court supervision (nonjudicial foreclosure), then you’ll have to bring your own lawsuit—a more worky and costly process.

Because nonjudicial foreclosures proceed outside of court, you’ll have to file a lawsuit to get a judge’s attention. And you’ll have the burden of proof because you want the judge to stop a proceeding—the foreclosure—that is already authorized by the mortgage.

Fightforeclosure will provide extremely helpful guidance if you choose to do this yourself, or you may hire a lawyer if you wish at a more costly price. Unfortunately, litigation in which an attorney’s services are used is always expensive when you have the burden of proof. So unless the lawyer thinks you have a very good case, you may not want to bother with a lawsuit. If the only basis for your challenge is that the foreclosing party made a technical procedural violation, you’ll probably gain only a few weeks of delay even if you win, but if you follow the well crafted causes of auction in fight Foreclosure defense package, you have a better chance of stopping foreclosure in its tracks.

To get your day in court to challenge a nonjudicial foreclosure, you must sue the lender and the foreclosing agent (typically, the trustee). In the lawsuit, you ask the court to enjoin (stop) the foreclosure proceedings until a judge can hear your reasons as to why the foreclosure shouldn’t proceed.

In this kind of lawsuit, you typically ask the court for three things, in this order:

a temporary restraining order
a preliminary injunction, and
a permanent injunction.

Your application for a temporary restraining order (TRO) must convince the judge that you will suffer “irreparable injury” if the judge doesn’t stop the foreclosure immediately. Because you will lose your home if the foreclosure is allowed to proceed, most courts accept that a foreclosure causes irreparable injury.

TROs are typically granted without a formal notice or hearing, which means the foreclosing party may have only a day or two of notice in which to prepare a response. If no response is filed, the judge may well grant the TRO, but require you to post a bond to protect the foreclosing party from economic harm in case you lose. A bond can be costly, assuming you can get one at all. You might be able to get the bond requirement waived if your income is low enough.

Getting the Bond Requirement Waived

The court may grant a waiver if:

* the delay required by the lawsuit will not cause unreasonable harm to the lender

* the validity of your mortgage is in question (for example, the deed was not properly acknowledged or recorded), or

* the lender’s interest in pushing ahead with the foreclosure can be protected by some other method, such are requiring you to make reasonable monthly payments during the course of the lawsuit.

The TRO will typically last until the date set for a hearing on whether the court should issue a preliminary injunction—which would stop the foreclosure pending a full trial on the matter. A hearing on the preliminary injunction is typically held between ten days and two weeks after the TRO is issued.

At the preliminary injunction hearing, the court will review each party’s paperwork—essentially the same paperwork submitted in a judicial foreclosure hearing, described earlier. At this hearing, the court must decide whether or not:

* you are likely to prevail at a trial, and

* the injury that you would suffer from the foreclosure outweighs the injury that the foreclosing party is suffering by not getting paid (called balancing the equities).

If the judge decides these issues in favor of the foreclosing party, the TRO will end, and your lawsuit will be dismissed.

But if the judge decides these issues in your favor, then the judge will issue a preliminary injunction. The preliminary injunction may order the foreclosing party to take corrective action—for example, by issuing a new pay-off statement and giving you a chance to reinstate the mortgage. Or it may simply keep the TRO in effect.

Because it often takes a year or two to bring a case to trial on a permanent injunction, getting a preliminary injunction is pretty much equivalent to a victory for you. Typically, the foreclosing party will either attempt to reach a settlement with you, drop the current foreclosure and begin from scratch, or meet any conditions laid down by the court and then go back into court asking that the injunction be lifted.

The burden is on you to prove that the foreclosing party didn’t comply with state laws or the terms of the deed of trust. You meet this burden with the documents you file—typically, declarations or affidavits from you and various witnesses that establish the facts you believe entitle you to stop the foreclosure. For example, if you contest the accuracy or legality of the fees the foreclosing party required you to pay to reinstate the mortgage, you would attach a sworn statement to your application for a TRO or preliminary injunction, setting out the facts as you know them.

If the foreclosing party produces documents that contradict yours, then you will need to convince the judge at the preliminary injunction stage that you deserve to have the foreclosure put on hold until you can produce your full case at trial. Because most preliminary injunction hearings don’t involve live witnesses, your paperwork may have to carry the day.

Consider Recording a Lis Pendens

Instead of seeking a TRO or preliminary injunction to delay the foreclosure sale until you can have a hearing, consider recording a “lis pendens” and filing a regular civil complaint attacking the foreclosure. A lis pendens is a simple document providing notice to the world that title to the property is a subject of litigation. As long as it is on record, any sale of the property can be undone if your lawsuit succeeds, because the buyer had notice of the controversy. Also, no title company will insure title to property subject to a lis pendens.

Due Process Suffers in Nonjudicial Foreclosures

When attempting to foreclose on your house, the lender must comply not just with your state’s laws and the terms of your deed of trust. It must also comply with the due process requirements of the United States Constitution.

In the foreclosure context, this means:

* You must receive adequate notice of the proceedings that may cause you to lose your house;

* You must have an opportunity to question the legality of the foreclosure proceedings before a neutral magistrate.

By agreeing to a nonjudicial foreclosure (as a practical matter, you have no choice) when you get a loan, you give up a fundamental due process right: the right to an evaluation of the foreclosure’s legality by a neutral magistrate before a foreclosure sale. To challenge a nonjudicial foreclosure in court and come out successful, you almost certainly will needs a well crafted package like Fightforeclosure.net package. Because people facing foreclosure are almost always strapped for cash, lawyers are often unaffordable. For that reason, for many people, the ability to file an action in court challenging a foreclosure is only theoretical. Is the entire nonjudicial foreclosure scheme even constitutional? I don’t think it is, but the courts say otherwise.

What Homeowners Must Know About Appealability and Reviewability of Court Orders and Judgments

16 Thursday Jan 2014

Posted by BNG in Appeal, Case Laws, Case Study, Federal Court, Foreclosure Defense, Judicial States, Legal Research, Litigation Strategies, Non-Judicial States, Pro Se Litigation, State Court, Your Legal Rights

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This Post is to guide Homeowners in deciding whether to appeal their cases to the higher courts upon judgment or order.
A. Definitions

The concepts of appealability and reviewability are constitutional limitations on the Court’s power to hear cases. More precisely, appealability rules act to limit the kinds of cases which may be heard by the Court of Appeals. Reviewability rules, on the other hand, limit the issues which the Court may determine once the case is before the Court. Article VI, § 3(b) of the State Constitution prescribes what kinds of orders are appealable to the Court, and article VI, § 3(a) states that in most cases “the jurisdiction of the Court of Appeals shall be limited to the review of questions of law.”

B. Appealability

In addition to the jurisdictional requirements discussed above for appeals as of right and motions for leave to appeal, certain other appealability requirements must be met.

1. Appropriate Court

Action must originate in an appropriate court. For example, the Court lacks jurisdiction to entertain a motion for leave to appeal from an order of the Appellate Division where the appeal to that court was from a judgment or order entered in an appeal from a third court (Matter of Thenebe v Ansonia Assocs., 89 NY2d 858). This jurisdictional problem will arise when an action originates in a court other than Supreme Court, County Court, Surrogate’s Court, Family Court, Court of Claims or an administrative agency or an arbitration. The motion will be dismissed regardless of whether the Appellate Division order is final.

Note: The Court does not have jurisdiction to entertain a motion for leave to appeal from a determination of a court other than the Appellate Division, except in the circumstances specified in CPLR 5602(a)(1)(ii). Regarding appeals as of right, see CPLR 5601.

2. Aggrievement

a. CPLR 5511 states that only an aggrieved party may appeal (see, Hecht v City of New York, 60 NY2d 57, 61). A party may appeal if the order appealed from does not grant complete relief to it. A party which is granted complete relief but is dissatisfied with the court’s reasoning is not aggrieved within the meaning of CPLR 5511 (see, Matter of Sun Co. v City of Syracuse Indus. Dev. Agency, 86 NY2d 776; Parochial Bus Sys. v Board of Educ., 60 NY2d 539, 545).

b. No appeal lies from an Appellate Division order dismissing an appeal from a determination entered upon a default judgment (CPLR 5511; Matter of Lizette Patricia C., 98 NY2d 688).

c. Where the Appellate Division reverses a trial court’s judgment and orders a new trial limited to the issue of damages unless plaintiff stipulates to a reduction of damages, and plaintiff so stipulates, plaintiff is not aggrieved by the Appellate Division order (see, Whitfield v City of New York, 90 NY2d 777, 780 n *; see also, Smith v Hooker Chem. & Plastics Corp., cross mot for lv dismissed 69 NY2d 1029). Similarly, where the Appellate Division reverses and grants a new trial on the issue of damages unless defendant stipulates to an increase in damages and defendant stipulates, defendant’s attempt to appeal to the Court and to argue liability issues will be dismissed for lack of aggrievement (see, Whitfield, supra; see also, Sharrow v Dick Corp., mot to dismiss appeal granted 84 NY2d 976). Note that a party who, as a result of a conditional order, stipulates at the trial or appellate court to a different amount of damages in lieu of a new trial on a cause of action forgoes review of other issues raised by that order, including those pertaining to any other cause of action and, therefore, is not a party aggrieved (see, Batavia Turf Farms v County of Genesee, lv dismissed 91 NY2d 906). Only the non-stipulating party may appeal or move for leave to appeal (Whitfield, supra).

3. Finality — covered in detail in Section VI of this outline.

4. Miscellaneous Appealability Problems

a. Dual Review — Where the same party both appeals to the Appellate Division and appeals to the Court of Appeals, the appeal to the Court will be conditionally dismissed. Where the same party both appeals to the Appellate Division and moves for leave to appeal to the Court of Appeals, the motion will be dismissed outright. Dual review is generally not permitted (Parker v Rogerson, 35 NY2d 751, 753; see also, CBS Inc. v Ziff Davis Pub., lv dismissed 73 NY2d 807). However, where different parties pursue different avenues of appeal or motion before the Court will be permitted to continue (Defler Corp. v Kleeman, 18 NY2d 797).

b. Appealable paper — An appeal will be dismissed where the improper paper is sought to be appealed.

i. No order or judgment — Where appellant/movant seeks to appeal from something other than an order or judgment, the appeal/motion will be dismissed (Matter of Sims v Coughlin, appeal dismissed 86 NY2d 776 [decision]; Matter of Abdurrahman v Berry, lv dismissed 73 NY2d 806 [letter]).

ii. Subsequent Supreme Court order or judgment — CPLR 5611 reads in part “If the Appellate Division disposes of all the issues in the action its order shall be considered a final one, and a subsequent appeal may be taken only from that order and not from any judgment or order entered pursuant to it” (see, American Acquisition Co. v Kodak Electronic Printing Sys., 87 NY2d 1049).

iii. Order of individual Appellate Division Justice — No appeal lies from an order of an individual Justice of the Appellate Division (People ex rel. Mahler v Jablonsky, appeal dismissed 82 NY2d 919).

iv. The finality of an Appellate Division order dismissing an appeal to that court is determined by an examination of the finality of the underlying order (Langeloth Found. v Dickerson Pond Assocs., lv dismissed 74 NY2d 841).

v. No civil motion for leave to appeal or appeal as of right lies directly from the order of the Appellate Term of Supreme Court (Williamson v Housing Preservation and Dev. of City of New York, lv dismissed 82 NY2d 919).

c. Dismissal of Prior Appeal for Failure To Prosecute — A prior dismissal of an appeal for failure to prosecute is a determination on the merits and acts as a bar to a subsequent appeal raising the issues that could have been raised on the prior appeal (see, Bray v Cox, 38 NY2d 350). Thus, the subsequent motion/appeal may be dismissed (see, id.; compare Rubeo v National Grange Mut. Ins. Co., 93 NY2d 750; Faricelli v TSS Seedman’s, 94 NY2d 772 [Appellate Division has discretion to entertain appeal notwithstanding dismissal of prior appeal for failure to prosecute]).

d. Criminal Appeals — Appeals in criminal cases must be taken pursuant to the Criminal Procedure Law, not CPLR 5601 or 5602 (Matter of Newsday, Inc. 3 NY3d 651 [newspaper’s motion to intervene and obtain access to record in criminal case]; People v Blake, appeal dismissed 73 NY2d 985 [CPL 450.15, 460.15 application]; People v Dare, appeal dismissed 74 NY2d 707 [application for writ of error coram nobis]).

e. Corporation Appearance — CPLR 321(a) dictates that a motion or appeal by a corporate party must be filed by an attorney.

f. Mootness — Where the issues presented are no longer determinative of a live controversy, the Court will not entertain an appeal or motion for leave to appeal. The Court cannot entertain the motion or appeal because it cannot give advisory opinions (see, Matter of Hearst Corp. v Clyne, 50 NY2d 707, 713-714). However, the Court may entertain an appeal or motion when each of the three prongs of the mootness exception is satisfied: “(1) a likelihood of repetition * * *; (2) a phenomenon typically evading review; and (3) a showing of significant or important questions not previously passed on, i.e. substantial and novel issues” (id. at 714-715).

C. Reviewability

Once it is determined that an order is appealable, a litigant must consider which issues and orders that arose in the litigation are reviewable by the Court of Appeals.

1. Preservation — Issues Reviewable

a. The Court of Appeals’ power to review lower court rulings made on motions, applications and points of evidence is, in part, limited by statutes and case law requiring that appropriate objections be registered below as a prerequisite to appellate review (see, CPLR 4017, 4110-b and 5501[a][3] and [4]). The Court will, on its own, determine whether an issue has properly been preserved below, whether or not the parties raise the question of preservation (see, Halloran v Virginia Chems., 41 NY2d 386, 393). Counsel bears the responsibility of showing the Court where each issue raised has been preserved in the record.

b. Differences in Appellate Division and Court of Appeals review

The Appellate Division may reach questions of trial error, even if unpreserved, in an exercise of its “interest of justice” jurisdiction (see, Martin v City of Cohoes, 37 NY2d 162, rearg denied 37 NY2d 817, on remand 50 AD2d 1035, appeal dismissed 39 NY2d 740, lv denied 39 NY2d 910). The Court of Appeals, on the other hand, generally may only review questions of law and, therefore, may not review unpreserved error even if the Appellate Division has chosen to do so (see, Brown v City of New York, 60 NY2d 893, 894).

c. Preservation of legal issues and theories

i. As a general matter, appellate courts are reluctant to review legal arguments raised for the first time on appeal. Several policy reasons underlie this rule, such as avoiding unfairness to the other party, giving deference to the lower courts and encouraging the proper administration of justice by demanding an end to litigation and requiring the parties and trial courts to focus the issues before they reach the Court of Appeals (Bingham v New York City Trans. Auth., 99 NY2d 355, 359 [2003]).

Under appropriate circumstances, however, the Court of Appeals may entertain new legal arguments and theories raised on appeal. Those very limited circumstances include: (1) new arguments based on a change in statutory law while the appeal is pending (see, Post v 120 East End Ave. Corp., 62 NY2d 19, 28-29); (2) where the new argument could not have been obviated or cured by factual showings or legal countersteps had the arguments been tendered below (People ex rel. Roides v Smith, 67 NY2d 899, 901); (3) questions of pure statutory interpretation (Matter of Richardson v Fiedler Roofing, 67 NY2d 246, 250). These “exceptions” are narrowly construed.

ii. The general rule requires that constitutional questions be raised at the first available opportunity as a prerequisite to review in the Court of Appeals (see, e.g., Matter of Barbara C., 64 NY2d 866, 868). There is some indication that the Court may make an exception to this doctrine and examine a constitutional issue raised for the first time in the Court of Appeals if the issue implicates grave public policy concerns (see, Park of Edgewater v Joy, 50 NY2d 946, 949, citing Massachusetts Natl. Bank v Shinn, 163 NY 360, 363).

d. Preservation in the administrative agency context

The Court’s reluctance to review new legal arguments is equally applicable in the administrative agency context for policy reasons similar to those discussed above. Thus, arguments which were not raised by a party at the administrative level are considered unpreserved and not reviewable by the Court of Appeals, subject to very limited exceptions (see, Matter of Crowley v O’Keefe, mot to dismiss appeal granted 74 NY2d 780; Matter of Samuels v Kelly, lv denied 73 NY2d 707).

2. CPLR 5501(a) — Review of Prior Nonfinal Orders and Determinations

a. CPLR 5501(a) provides that an appeal from a final judgment brings up for review, among other things:

i. any nonfinal judgment or order which necessarily affects the final judgment, including any which was adverse to the respondent on appeal from the final judgment and which, if reversed, would entitle the respondent to prevail in whole or in part on that appeal (CPLR 5501[a][1]),

ii. any order denying a new trial or hearing which was not previously reviewed by the court to which the appeal was taken (CPLR 5501[a][2]), and

iii. any ruling to which the appellant objected or had no opportunity to object or which was a refusal or failure to act as requested by the appellant, any charge to the jury, or failure to charge as requested by the appellant, to which the appellant objected (CPLR 5501[a][3]).

b. Note that CPLR 5501(a)(1), which applies to prior nonfinal orders and judgments, contains the “necessarily affects” requirement. CPLR 5501(a)(3), which applies to trial rulings, however, does not.

c. For an in-depth discussion of the “necessarily affects” requirement, see Section VII of this outline.

3. Scope of Review

Once it is determined which orders, determinations, and issues are reviewable, the scope of the Court’s review must be considered.

a. Limited to questions of law

As noted earlier, the State Constitution limits the Court’s review powers to questions of law. Questions of fact are not reviewable except in:

i. death penalty cases (CPL 470.30[1]);

ii. Commission on Judicial Conduct matters (see, e.g., Matter of Edwards, 67 NY2d 153);

iii. cases where the Appellate Division reverses or modifies and finds new facts, in which case the Court’s review power is limited as discussed further below (CPLR 5501[b]); and

iv. defamation cases involving a public figure defendant — where the issue concerns whether plaintiff has proven the essential element of actual malice, the Court has a constitutional duty to review the evidence and to “exercise independent judgment to determine whether the record establishes actual malice with convincing clarity” (Prozeralik v Capital Cities Communications, 82 NY2d 466, 474-475, quoting Harte-Hanks Communications v Connaughton, 491 US 657, 659).

b. Questions that are never reviewable

i. An Appellate Division determination whether the trial judge correctly decided a CPLR 4404(a) motion to set aside the verdict as “contrary to the weight of the evidence” is not reviewable (Levo v Greenwald, 66 NY2d 962; Gutin v Frank Mascali & Sons, Inc., 11 NY2d 97, 98-99 [emphasis added]).

However, where a jury verdict has been set aside on the ground that, as a matter of law, the verdict is not supported by sufficient evidence, that determination is reviewable. The relevant inquiry is whether there is any “valid line of reasoning and permissible inferences which could possibly lead rational [people] to the conclusion reached by the jury on the basis of the evidence presented at trial” (Cohen v Hallmark Cards, 45 NY2d 493, 499). Where it is not clear from the Appellate Division writing whether the Appellate Division has set aside a verdict on sufficiency of evidence or weight of evidence grounds in a jury tried case, examine the court’s corrective action. New trial ordered — weight; dismissal of complaint — sufficiency (see, id. at 498). The foregoing analysis cannot be used in bench trial cases because the Appellate Division can render judgment for the appealing party as a matter of fact without the need for a new trial. When, in a jury case, the Appellate Division reverses a judgment entered on a plaintiff’s verdict, on both sufficiency and weight of the evidence grounds, the Court can review whether the legal sufficiency ruling was correct. If the Court disagrees with the Appellate Division and concludes that the verdict is supported by legally sufficient evidence, the Court cannot reinstate the judgment entered on the verdict; instead, it must order a new trial because it cannot disturb the Appellate Division’s weight of evidence determination (Sage v Fairchild-Swearingen, 70 NY2d 579, 588).

ii. A determination of excessiveness (or inadequacy) of the jury’s verdict (Rios v Smith, 97 NY2d 647, 654; Woska v Murray, 57 NY2d 928; Zipprich v Smith Trucking Co., 2 NY2d 177, 188).

iii. An Appellate Division determination to reverse a judgment in a civil action on the basis of unpreserved legal error (Brown v City of New York, 60 NY2d 893). The Court of Appeals has no power to review either the unpreserved error or the Appellate Division’s exercise of discretion in reaching the issue (see, Elezaj v Carlin Constr. Co., 89 NY2d 992, 994).

c. Limited Review

i. Findings of fact that are affirmed by the Appellate Division are only reviewable to determine if there is evidence in the record to support them (Cannon v Putnam, 76 NY2d 644, 651; Morgan Servs. v Lavan Corp., 59 NY2d 796, 797).

ii. In situations where the Appellate Division reverses or modifies and expressly or impliedly finds new facts, the Court of Appeals can determine which of the findings more nearly comports with the weight of the evidence (CPLR 5501[b]; Matter of Y.K., 87 NY2d 430, 432; Loughry v Lincoln First Bank, N.A., 67 NY2d 369, 380).

iii. Provided the lower courts had the power to exercise discretion (Brady v Ottaway Newspapers, 63 NY2d 1031), the Court of Appeals will not interfere with the exercise of that discretion absent an abuse (Herrick v Second Cuthouse, 64 NY2d 692). However, an issue of law will be presented where the Appellate Division in exercising its discretion expressly fails to take into account all the various factors that are properly entitled to consideration (Varkonyi v Varig, 22 NY2d 333, 337). In such cases, the Court can set out the proper factors and, if judgment cannot be rendered as a matter of law, remit the case to the Appellate Division to exercise its own discretion on the basis of all the relevant factors (id. at 338).

Consider these facts: The federal district court grants the defendant’s motion to dismiss and states that the court may amend its order with a more specific statement of grounds for its decision.
However, the court never amends its order. Is the order appealable?
No, answered the 9th U.S. Circuit Court of Appeals in National Distribution Agency v. Nationwide Mutual Insurance Company, 117 F.3d 432 (9th Cir. 1997). The court said: “A district court ruling is not final if the court reserves the option of further modifying its ruling.” Therefore, the plaintiff’s appeal is dismissed.

This is a specific application of the general rule that to invoke federal-appellate jurisdiction, the appellant must timely appeal from an appealable judgment. Price v. Seydel, 961 F.2d 1470, 1473 (9th Cir. 1992). Stating that rule is simple. Applying it, however, presents formidable challenges for the appellate practitioner. Virtually every aspect of the rule is subject to interpretation and debate, and there is little leeway for error. Had the plaintiff in National not appealed, and the order later was deemed a final judgment, the plaintiff’s opportunity for appellate review would have been lost.

In determining whether a judgment or an order is appealable, the practitioner should consider
the following issues:

Is the challenged judgment or order appealable by statute?
Federal appeals courts (other than the Federal Circuit, which has unique jurisdiction) have jurisdiction of appeals from “all final decisions of the district courts.” 28 U.S.C. Section 1291. In addition, they have
jurisdiction over appeals from specified interlocutory orders in injunction, receivership and admiralty cases. 28 U.S.C. Section 1292(a). Appellate courts also have discretion to hear appeals from interlocutory orders when the district court determines, in its discretion, that the order involves a controlling question of law and immediate appeal may materially advance the ultimate termination of the litigation. 28 U.S.C. Section 1292(b).

When a case involves more than one claim or multiple parties, the district court also has the option of entering judgment on all or some of the claims or parties. That judgment is immediately appealable if the district court expressly determines there is no just reason for delay. Fed. R. Civ. P. 54(b).

If the appeal is from a judgment, is the judgment final?
For a judgment to be final — absent any of the exceptions noted above — it must end the litigation on the merits for all claims and all parties.
FirsTier Mortg. Co. v. Investors Mortg. Ins. Co., 498 U.S. 269, 273-74
(1991). For example, a judgment is not final if the court has yet to resolve a claim for prejudgment interest. Pace Communications Inc. v. Moonlight Design Inc., 31 F.3d 587, 591 (7th Cir. 1994). On the other hand, a judgment is final even though the court has not yet determined costs. Budinich v. Becton Dickinson & Co., 486 U.S. 196, 202 (1988).

Moreover, the court’s ruling itself is not an appealable final judgment. The clerk is supposed to enter judgment as a separate document. Fed. R. Civ. P. 58. The mere fact that the court added a seemingly final and dispositive phrase such as “judgment accordingly” to its findings of fact and conclusions of law does not make the order a final judgment.

Whether a ruling is final depends ultimately on its substance. Thus, a ruling entitled a “judgment” may not be final for purposes of appeal where further issues remain to be resolved. Zucker v. Maxicare Health Plans Inc., 14 F.3d 477, 483 (9th Cir. 1994). But a ruling entitled an
“order” may be a final judgment for purposes of appeal where there is no substantive issue left for the court to resolve. United States v. Lee, 786 F.2d 951, 955-56 (9th Cir. 1986).

Although the appeals courts will apply a common-sense interpretation to the finality requirement, Sutton v. Earles, 26 F.3d 903, 906 n.1 (9th Cir. 1994), the parties cannot stipulate to appellate jurisdiction where there is none, Dannenberg v. Software Toolworks Inc., 16 F.3d 1073, 1076-78 (9th Cir. 1994), nor can they create appellate jurisdiction by dismissing unresolved claims and reserving the option of litigating them at some future time, Cheng v. Commissioner, 878 F.2d 306, 310 (9th Cir. 1989)

The finality requirement has only rare exception, usually involving cases in the “‘twilight zone’ of finality.” Gillespie v. United States Steel Corp.
, 319 U.S. 148, 152-54 (1964). In extraordinary circumstances, a federal appeals court will consider an appeal from a seemingly nonappealable ruling where the ruling is “marginally final,” involves an issue of “national significance” and has been “fully briefed and argued.” Service Employees Int’l Union, Local 102 v. County of San Diego, 60 F.3d 1346, 1350 (9th Cir. 1995)

Is the appeal timely?
If notice of appeal is filed either too early or too late, and no
exception applies, the appeal is invalid and cannot be heard. Generally, the prescribed time within which to file notice of appeal is 30 days after entry of the judgment or other appealable order. If the United States or one of its officers or agencies is a party, the prescribed time is 60 days. Fed. R. App. P. 4(a)(1).

Time to appeal is extended to accommodate certain post-judgment proceedings that may affect the judgment. If any party timely files one of several specified post-judgment motions, including a motion for new trial or for judgment as a matter of law, the time for all parties to appeal begins to run from the entry of the order disposing of the post-trial motion. Fed. R. App. P. 4(a)(4). The district court may deem a motion for attorney fees to be in the nature of a motion to amend the judgment and
thus extend the time for appeal. Fed. R. Civ. P. 38. If the post-judgment motion is not timely, the time to appeal is not extended. Cel-A-Pak v. California Agric. Labor Relations Bd., 680 F.2d 664, 666 (9th Cir. 1982).

An appeal filed while one of the specified post-judgment motions is pending is held until the motion is decided; then the appeal becomes effective. Leader Nat’l Ins. Co. v. Industrial Indem.
Ins. Co., 19 F.3d 444, 445 (9th Cir. 1994). When it becomes effective, that appeal still applies only to the original judgment; if the appellant intends to challenge the ruling on the postjudgment motion or any modifications to the judgment, the existing notice of appeal must be amended. Fed. R. App. P. 4(a)(4).

There is some leeway on either side of the prescribed time period for appeal. A notice of appeal is treated as filed on the date of entry, if it’s filed before entry of the appealable order or judgment but after the district court-announced decision. Fed. R. App. P. 4(a)(2). This is a relatively recent liberalization in federal appellate procedure. Previously, a premature appeal was invalid and a new notice of appeal had to be filed at the appropriate time. Schroeder v. McDonald, 55 F.3d 454, 458-60 (9th Cir. 1993). However, even under the present rule, a notice of appeal remains invalid if it’s filed before the court announces the decision that will ripen into an appealable judgment. Kennedy v. Applause Inc., 90 F.3d 1477, 1482 (9th Cir. 1996).

On a motion filed within 30 days after the filing deadline, and on a showing of excusable neglect or good cause, the district court may extend the time for filing a notice of appeal up to 30 days or 10
days from the order’s entry date, whichever occurs later. Fed. R. App. P. 4(a)(5).

The courts abide by strict standards for excusable neglect in failing to file a timely notice of appeal. Oregon v. Champion Int’l Corp., 680 F.2d 1300, 1301 (9th Cir. 1982). An extension to appeal will be granted only in “extraordinary circumstances.” National Industries Inc. v. Republic
Nat’l Life Ins. Co., 677 F.2d 1258, 1264 (9th Cir. 1982). One such circumstance is provided by express rule. The court may reopen the appeal time for 14 days if the aggrieved party files a motion within 180 days of the judgment’s entry or within seven days of receiving notice of the judgment’s entry, whichever is earlier – and if the district court finds that the party didn’t receive notice of the judgment’s entry within 21 days, and no party would be prejudiced. Fed. R. App. P. 4(a)(6)

Yet another wrinkle in the rules for timely filing of federal appeals is that the time begins to run only upon entry of judgment. Fuller v. M.G. Jewelry
, 950 F.2d 1437, 1441 n.4 (9th Cir. 1991). Nevertheless, absent objection, the court can consider an appeal from a judgment that has been
rendered but not entered. Allah v. Superior Court of California, 871 F.2d 887, 890 n.1 (9th Cir. 1989). The appellate court will not engage in the “pointless exercise of dismissing the appeal and waiting for the district court to enter a separate judgment.” Vernon v. Heckler , 811 F.2d 1274, 1276-77 (9th Cir. 1987).

As National demonstrates, despite potential loopholes in the rules of appealability, the practitioner cannot count on extraordinary exceptions or discretionary relief to salvage an unauthorized or untimely appeal. To ensure a timely and valid appeal in federal court, the practitioner must carefully monitor the district court’s actions, diligently follow the rules, and count the days precisely.

A fundamental rule of appellate law is that an appeal only lies from an order or judgment that is appealable. An appellate court does not have jurisdiction to hear the case unless there is an appealable order or judgment.
The following is an overview of appeal-able orders and judgments under California law. Note that judgments and orders issued in federal courts are subject to different rules.

Right to Appeal is Statutory
The right to appeal in California is wholly statutory.
Thus, no appeal may be taken unless there is a statute that expressly allows the appeal. Most of the appeal-able orders and judgments are listed in Code of Civil Procedure §904.1. Some orders are made
appealable by other statutes as well.

The most common type of appealable order is a judgment.
See Code Civ. Proc. §904.1(a)(1). Judgments are generally appealable, except for most interlocutory judgments, judgments of contempt
(they may be reviewed by writ), and judgments in limited civil cases
(appeal is to the superior court).

One Final Judgment Rule

Under the “one final judgment” rule, an appeal from a judgment
can only be from a single, final judgment in the action. The rule is codified in Code of Civil Procedure section 904.1(a), which authorizes an appeal “[f]rom a judgment, except … an interlocutory judgment.” The California Supreme Court has held that this means that the appeal must be “from a judgment that is not intermediate or nonfinal but is the one final
judgment.” Morehart v. County of Santa Barbara, 7 Cal.4th 725, 741 (1994). “Judgments that leave nothing to be decided between one or more parties and their adversaries, or that can be amended to encompass all controverted issues, have the finality required by section 904.1, subdivision (a).” Id. Conversely, a “judgment that disposes of fewer than all of the causes of action framed by the pleadings, however, is necessarily „interlocutory‟ … and not yet final, as to any parties be
tween whom another cause of action remains pending.” Id.

The reason for this rule is to avoid multiple appeals in the same case, which places a huge burden on the courts and the parties.
See id. at 741 n.9. Moreover, if the parties have to wait until a
final judgment is entered, “the trial court may completely obviate an appeal by altering the rulings from which an appeal would otherwise have been taken.” Id. It also gives the appellate court a more comprehensive record. Id

To determine if a judgment is final, courts look to the substance and effect, rather than the form or title. The judgment is considered
final when it ends the litigation between the parties on the merits of the case, and nothing is left to be done other than to enforce the judgment.
See San Joaquin County Dept. of Child Services v. Winn, 163 Cal.App.4th 296, 300 (2008). If the judgment contemplates any future judicial action
— other than simple enforcement of the judgment — essential to determining the rights or responsibilities of the parties, the judgment is not final.

Once a final judgment is entered, the appellate court may generally review any order or ruling made in the proceeding leading up to that final, appealable judgment. See Code Civ. Proc. §906.

Judgments Where There Are Multiple Parties

A judgment is immediately appealable if it terminates the litigation with respect to one or more parties. So, if a plaintiff sues several defendants, and the court dismisses the lawsuit against one of the defendants, the
judgment is final as to that defendant, and plaintiff may appeal the
judgment without waiting for the rest of the case to be resolved.
See Nguyen v. Calhoun, 105 Cal.App.4th 428, 437 (2003). Likewise, if there are multiple plaintiffs, and judgment is entered against some of the plaintiffs but not against others, the plaintiffs against whom judgment was entered may immediately appeal. See Panicov. Truck Ins. Exchange, 90 Cal.App.4th 1294, 1300-1301 (2001). With respect to defendants, there is an exception where the liability of one defendant is intertwined with and dependent on the liability of other defendants and their liability
has not yet been established. See Entertainment, Inc. v. Arthur J. Gallagher & Co., 125 Cal.App.4th 1022 (2005)(liability of insurance agency and insurance company in duty to defend and bad faith action were intertwined, and therefore appeal of dismissal of insurance agency was
premature)

Note that if you file an appeal with respect to one party, but there are claims against other parties remaining in the trial court, it might be prudent to ask the trial court to stay the action until the appeal has been decided.

Other Appealable Orders

Some other types of orders are made appealable by statute. For example, orders made after a final judgment are appealable. Code Civ. Proc. §904.1(a)(2). Other types of appealable orders listed in Code of Civil Procedure section 904.1 include: orders granting a motion to quash service of a summons or granting a motion to stay an action on the
grounds of an inconvenient forum; orders granting a new trial or denying a motion for judgment notwithstanding the verdict; orders granting, discharging or refusing to discharge an attachment; orders granting or dissolving an injunction; orders appointing a receiver; certain orders in partition actions; certain orders issued under the Family and Probate Code; orders directing the payment of sanctions over $5,000; an orders granting or denying a special motion to strike in anti-SLAPP cases.
Certain orders related to arbitration proceedings are also made appealable under Code of Civil Procedure section 1294

Non-Appealable Orders

Any judgment or order that is not expressly appealable by statute is non
– appealable. Many orders that fall into this category. Some of the more common types include: orders overruling a demurrer; orders sustaining a demurrer (an appeal lies from the judgment dismissing the complaint with prejudice); discovery orders; orders denying a motion for a new trial; orders granting a mistrial due to a hung jury; orders directing a verdict (an appeal lies from the judgment issued); orders granting or denying a motion for summary judgment (a judgment following the order granting summary judgment is appealable); tentative decisions; and statements of decision.

Keep in mind that it is the substance and effect, not the form, that governs whether an order is appealable. For example, if a court sustains a demurrer and in the same document dismisses the complaint with prejudice, then that document likely would be considered a final judgment.
But if the court sustains the demurrer without dismissing the complaint,
the order sustaining the demurrer is not appealable.
See City of Morgan Hill v. Bay Area Quality Management Dist., 118 Cal.App.4th 861, 867 n. 3 (2004).

Finally, remember that interlocutory orders may be reviewed after a final
judgment has been entered, so long as the appealing party has preserved his or her arguments on appeal by raising those arguments in the trial court.

Conclusion
Before filing an appeal, a litigant must ensure that the order or judgment he or she wishes to challenge is appealable, or risk dismissal of the appeal. Determining whether an order is appealable is also important
to identify when the time to appeal will expire.

Respondents should also evaluate whether the order being appealed is appealable, and if not, should immediately file a motion to dismiss the appeal. Taking these simple steps at the outset of an appeal can save a party significant time and money in the long run

What Homeowners Must Know About Appealing Their Wrongful Foreclosures

16 Thursday Jan 2014

Posted by BNG in Appeal, Federal Court, Foreclosure Defense, Judicial States, Non-Judicial States, Pro Se Litigation, State Court, Your Legal Rights

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Appeal

Timely resort by an unsuccessful party in a lawsuit or administrative proceeding to an appropriate superior court empowered to review a final decision on the ground that it was based upon an erroneous application of law.

A person who initiates an appeal—the appellant, sometimes called the plaintiff in error, must file a notice of appeal, along with the necessary documents, to commence appellate review. The person against whom the appeal is brought, the appellee, then files a brief in response to the appellant’s allegations.

There are usually two stages of review in the federal court and in many state court systems: an appeal from a trial court to an intermediate appellate court and thereafter to the highest appellate court in the jurisdiction. Within the appellate rules of administrative procedure, there might be several levels of appeals from a determination made by an Administrative Agency. For example, an appeal of the decision of an administrative law judge may be heard by a reviewing body within the agency, and from that body, the appeal may go to a trial court, such as a federal district court. Thereafter, the appeal might travel the same route as an appeal taken from a judicial decision, going from an intermediate to a superior appellate court, or it might go directly to a superior appellate court for review, bypassing the intermediate stage. The rules of appellate procedure applicable to a particular court govern its review of cases.

Right to Appeal

There is no absolute right of appeal for all decisions rendered by a lower court or administrative agency. Federal and state constitutions and statutory provisions create appellate courts and prescribe the types of cases that are within their jurisdiction. An appeal may be granted as a matter of right, such as from a trial court to an intermediate appellate court or only at the discretion of a superior appellate court, for example, by a grant of certiorari by the Supreme Court. If the decision presented does not meet the statutory requirements for review, the appellate court is powerless to hear the appeal and review is denied.

The right to appeal a decision is limited to those parties to the proceeding who are aggrieved by the decision because it has a direct and adverse effect upon their persons or property. In addition, an actual case or controversy must exist at the time of review. Issues that have become moot while the appeal is pending and cases that have been settled during that time are not reviewable.

Final Decision

A final judgment or order must have been reached by the trial court in order for a case to be appeal-able. A judgment is considered final for purposes of appeal when it ends the action in the court in which it was brought and nothing more is to be decided. This rule is intended to prevent the piecemeal litigation of a lawsuit, to avoid delay resulting from Interlocutory appeals, and to give the trial court the opportunity to render a decision in the case to the satisfaction of both parties, thereby obviating the need for appeal. The consideration of incidental matters, such as the computation of interest, attorneys’ fees, or court costs, does not prevent a judgment or order from being appealed.

Grounds

Error is the basis for review of a final decision rendered by a court or administrative agency. Error is called to the attention of a court through the use of objections, protests made during the course of a proceeding that an action taken by the opposing side in a controversy is unfair or illegal. Decisions rendered in favor of one party at trial level are presumed by an appellate court to be correct unless objections have been made to the issues in question during the trial. Failure to do so will preclude their review on appeal. An objection must be made as promptly and specifically as possible for each act to which it is directed so that the court may make an intelligent decision regarding its merits. The trial judge rules on the objection, and the decision is included in the trial record. If the attorney for either party disagrees with the ruling, he or she may take an exception, an objection taken to a decision of a court on a Matter of Law, which is noted in the trial record to be preserved for purposes of appeal. Appellate jurisdiction is limited only to a review of actions taken by an inferior court. No new objections can be raised before an appellate court for its consideration unless exceptional circumstances exist to justify the appellate court raising the issues sua sponte, on its own motion. Exceptional circumstances mean the presence at trial of plain error, a mistake in the proceedings that substantially affects the rights of the party against whom the decision has been made and undermines the fairness and integrity of the judicial system, causing a miscarriage of justice.

Time of Appeal

Appeals must be made within the time prescribed by statute or by the governing rules of the appellate court. Such statutes begin to run only after a final decision has been made. The timely filing of the notice of appeal with the clerk of the appellate court and the appellee completes, or perfects, the procedure. If the appeal is not taken and perfected within the time set by statute, the right to appeal is foreclosed. Extensions of time for the filing of an appeal may be granted, however, if extenuating circumstances exist, such as if either party is adjudicated incompetent or dies.

Notice of Appeal

A notice of appeal—a written document filed by the appellant with the court and a copy of which is sent to the appellee—is the initial step in the appeals process. It informs the court and the party in whose favor a judgment or order has been made that the unsuccessful party seeks a review of the case. Failure to file a notice of appeal according to the statutory requirements will preclude appeal.

Bonds

An appeal bond, a promise to pay a sum of money, must often be posted by an appellant to secure the appellee against the costs of the appeal, if the appellee is successful and the appellant fails to pay. Its amount is determined by the court itself or by statute. The imposition of such a bond discourages frivolous appeals. If successive appeals are taken from an intermediate appellate court to a superior one, a new bond is usually required.

Record on Appeal

The function of the appellate court is limited to a review of the trial record sent up from the lower court and the briefs filed by the appellant and appellee. Amicus Curiae briefs, if permitted by the appellate court, also become part of the record on appeal. The trial record, sometimes called the record proper, must show the pleadings that initiated the case, the complete transcript (in cases of jury trial) of lower court proceedings, the verdict, and the entry of the final judgment or order. The appellant must clearly demonstrate that the grounds for review had been raised and unsuccessfully decided upon at the trial level and, therefore, prejudicial error exists to warrant the reversal of the decision of the lower court.

In some jurisdictions, a bill of exceptions—a written statement of the objections made by a party to the ruling, decision, charge, or opinion of the trial judge—must be submitted to the appellate court to provide a history of the trial proceedings. It should not include matters that belong in the record proper but, instead, should state those points concerning questions of law raised by the exceptions taken during the trial. The appellant’s attorney prepares the bill and presents it to the trial judge for settlement, an agreement between the trial judge and the appellant that the bill contains a truthful account of the events of the trial. If there is disagreement, the judge returns the bill to the appellant with an explanation. The appellee must be given notice of the time and place of the settlement of the bill of exceptions in order to object to or approve its contents. The settled bill of exceptions becomes part of the trial transcript, which is part of the record on appeal. The appellant must submit a complete unabridged transcript of the trial that is prepared by the clerk of the trial court.

The entire trial record is printed and filed with the appellate court, and a copy is also sent to the appellee.

Assignment of Errors

A statement by the appellant of the errors alleged to have been committed in the lower court is an assignment of errors, a type of appellate Pleading used to point out to the appellate court the grounds for review. It controls the scope of an appeal because if a ground for review is not contained in it, it will not ordinarily be considered by the court. The assignment of errors is usually part of the notice of appeal, the bill of exceptions, the transcript of the record, or the brief, although in some jurisdictions, it is a separate document.

Appellate Brief

The appellant and appellee must file individual briefs to aid the appellate court in its consideration of the issues presented. Failure to do so results in a dismissal of the appeal. The facts of the case, the grounds for review, and the arguments relating to those questions must be concisely stated. Any statements referring to the trial record must be supported by an appropriate reference to it.

The appellant’s brief must specifically discuss the alleged errors that entitle the appellant to a reversal and discuss why each ruling of the lower court was wrong, citing authority, such as a case in which a similar point of law has been decided or a statute that applies to the particular point in issue. Disrespectful or abusive language directed against the lower court, the appellate court, the parties, witnesses, or opposing counsel cannot be used. If it is, it will be stricken from the brief, and the costs of the brief that might have been awarded are disallowed.

Review

Appellate courts have jurisdiction to decide only issues actually before them on appeal and nothing else. They cannot render opinions on controversies or declare principles of law that have no practical effect in settling the rights of the litigants.

Only conclusions of law, not findings of fact made by a lower court, are reviewable.

Harmless Error The appellate court must decide whether the errors alleged to have been made by the trial court are harmless or prejudicial. An error that substantially injures the rights of one party is called a prejudicial or reversible error and warrants the reversal of the final judgment or order. However, an error that is technical or minimally affects the rights of the parties or the outcome of the lawsuit is considered a Harmless Error, insufficient to require a reversal or modification of the decision of the lower court.

Hearing

The clerk of the appellate court schedules on the court calendar the date of the hearing on which each side may present an oral argument. Oral arguments, usually ten to fifteen minutes for each side, help the court understand the issues argued in the brief and persuade the court to rule in favor of the arguing party. During the arguments of appellant and appellee, it is not unusual for the appellate judge to interrupt with questions on particular issues or points of law.

The appellant’s argument briefly discusses the facts on which the Cause of Action is based and traces the history of the case through the lower courts. It includes the legal issues raised by the exceptions taken to the allegedly erroneous rulings of the trial judge. Thereafter, the appellee’s counsel presents arguments in favor of affirming the original decision.

Determination

An appellate court has broad powers over the scope of its decision and the relief to be granted. After reviewing the controlling issues in an action, it may affirm the decision of the inferior tribunal, modify it, reverse it, or remand the case for a new trial in the lower court pursuant to its order.When a decision is affirmed, the appellate court accepts the decision of the lower court and rejects the appellant’s contention that it was erroneously made. The modification of a decision by an appellate court means that, while it accepts part of the trial court’s decision, the appellant was correct that the decision was partly erroneous. The trial court’s decision is then modified accordingly.

A reversal of a decision means that the appellate court agrees with the appellant that the decision was erroneously made. The party who lost the case at the trial level becomes the winning party in appellate court.

In some cases, a decision might be reversed but the lawsuit is still unresolved. The appellate court then orders the reversal with the direction that the case be remanded to a lower court for the determination of the issues that remain unsettled.

If a judgment or order is reversed in an intermediate appellate court, the losing party may file an appeal with a superior appellate court for relief, and the appellate process begins again. The decision rendered by a superior appellate court cannot ordinarily be reviewed. In state cases involving issues based on federal statutes or the Constitution, however, an appeal may be brought in the federal court system on those questions that are within its jurisdiction.

Wrongful Foreclosure Homeowner Wins – State Law Prevailed While Securitizatiion Failed

22 Sunday Dec 2013

Posted by BNG in Affirmative Defenses, Appeal, Case Laws, Case Study, Federal Court, Foreclosure Defense, Fraud, Judicial States, Legal Research, Litigation Strategies, Loan Modification, Non-Judicial States, Pleadings, Pro Se Litigation, Securitization, State Court, Trial Strategies, Your Legal Rights

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Tags

Bank of America, California Court of Appeal, Deed of Trust, Foreclosure, Glaski, New York, Thomas Glaski, Washington Mutual

CASE STUDY:

INTRODUCTION

Many of the loans went into default, which led to nonjudicial foreclosure proceedings.

Some of the foreclosures generated lawsuits, which raised a wide variety of claims.

The allegations that the instant case shares with some of the other lawsuits are that

(1) documents related to the foreclosure contained forged signatures of Deborah Brignac and (2) the foreclosing entity was not the true owner of the loan because its chain of ownership had been broken by a defective transfer of the loan to the securitized trust established for the mortgage-backed securities. Here, the specific defect alleged is that the attempted transfers were made after the closing date of the securitized trust holding the pooled mortgages and therefore the transfers were ineffective.

In this appeal, the borrower contends the trial court erred by sustaining defendants’ demurrer as to all of his causes of action attacking the nonjudicial foreclosure. We conclude that, although the borrower’s allegations are somewhat confusing and may contain contradictions, he nonetheless has stated a wrongful foreclosure claim under the lenient standards applied to demurrers. We conclude that a borrower may challenge the securitized trust’s chain of ownership by alleging the attempts to transfer the deed of trust to the securitized trust (which was formed under New York law) occurred after the trust’s closing date. Transfers that violate the terms of the trust instrument are void under New York trust law, and borrowers have standing to challenge void assignments of their loans even though they are not a party to, or a third party beneficiary of, the assignment agreement.

H. Causes of Action Stated Based on the foregoing, we conclude that Glaski’s fourth cause of action has stated a claim for wrongful foreclosure. It follows that Glaski also has stated claims for quiet title (third cause of action), declaratory relief (fifth cause of action), cancellation of instruments (eighth cause of action), and unfair business practices under Business and Professions Code section 17200 (ninth cause of action).

We therefore reverse the judgment of dismissal and remand for further proceedings.

THOMAS A. GLASKI, Plaintiff and Appellant,
v.
BANK OF AMERICA, NATIONAL ASSOCIATION et al. Defendants and Respondents.

No. F064556.
Court of Appeals of California, Fifth District.
Filed July 31, 2013.
Publish order August 8, 2013.
Law Offices of Richard L. Antognini and Richard L. Antognini; Law Offices of Catarina M. Benitez and Catarina M. Benitez, for Plaintiff and Appellant.

AlvaradoSmith, Theodore E. Bacon, and Mikel A. Glavinovich, for Defendants and Respondents.

CERTIFIED FOR PUBLICATION
OPINION

FRANSON, J.

INTRODUCTION

INTRODUCTION

Before Washington Mutual Bank, FA (WaMu) was seized by federal banking regulators in 2008, it made many residential real estate loans and used those loans as collateral for mortgage-backed securities.[1] Many of the loans went into default, which led to nonjudicial foreclosure proceedings. Some of the foreclosures generated lawsuits, which raised a wide variety of claims. The allegations that the instant case shares with some of the other lawsuits are that (1) documents related to the foreclosure contained forged signatures of Deborah Brignac and (2) the foreclosing entity was not the true owner of the loan because its chain of ownership had been broken by a defective transfer of the loan to the securitized trust established for the mortgage-backed securities. Here, the specific defect alleged is that the attempted transfers were made after the closing date of the securitized trust holding the pooled mortgages and therefore the transfers were ineffective.

We therefore reverse the judgment of dismissal and remand for further proceedings.

FACTS – The Loan

Thomas A. Glaski, a resident of Fresno County, is the plaintiff and appellant in this lawsuit. The operative second amended complaint (SAC) alleges the following: In July 2005, Glaski purchased a home in Fresno for $812,000 (the Property). To finance the purchase, Glaski obtained a $650,000 loan from WaMu. Initial monthly payments were approximately $1,700. Glaski executed a promissory note and a deed of trust that granted WaMu a security interest in the Property (the Glaski deed of trust). Both documents were dated July 6, 2005. The Glaski deed of trust identified WaMu as the lender and the beneficiary, defendant California Reconveyance Company (California Reconveyance) as the trustee, and Glaski as the borrower.

Paragraph 20 of the Glaski deed of trust contained the traditional terms of a deed of trust and states that the note, together with the deed of trust, can be sold one or more times without prior notice to the borrower. In this case, a number of transfers purportedly occurred. The validity of attempts to transfer Glaski’s note and deed of trust to a securitized trust is a fundamental issue in this appeal.

Paragraph 22—another provision typical of deeds of trust—sets forth the remedies available to the lender in the event of a default. Those remedies include (1) the lender’s right to accelerate the debt after notice to the borrower and (2) the lender’s right to “invoke the power of sale” after the borrower has been given written notice of default and of the lender’s election to cause the property to be sold. Thus, under the Glaski deed of trust, it is the lender-beneficiary who decides whether to pursue nonjudicial foreclosure in the event of an uncured default by the borrower. The trustee implements the lender-beneficiary’s decision by conducting the nonjudicial foreclosure.[2]

Glaski’s loan had an adjustable interest rate, which caused his monthly loan payment to increase to $1,900 in August 2006 and to $2,100 in August 2007. In August 2008, Glaski attempted to work with WaMu’s loan modification department to obtain a modification of the loan. There is no dispute that Glaski defaulted on the loan by failing to make the monthly installment payments.

Creation of the WaMu Securitized Trust

In late 2005, the WaMu Mortgage Pass-Through Certificates Series 2005-AR17 Trust was formed as a common law trust (WaMu Securitized Trust) under New York law. The corpus of the trust consists of a pool of residential mortgage notes purportedly secured by liens on residential real estate. La Salle Bank, N.A., was the original trustee for the WaMu Securitized Trust.[3] Glaski alleges that the WaMu Securitized Trust has no continuing duties other than to hold assets and to issue various series of certificates of investment. A description of the certificates of investment as well as the categories of mortgage loans is included in the prospectus filed with the Securities and Exchange Commission (SEC) on October 21, 2005. Glaski alleges that the investment certificates issued by the WaMu Securitized Trust were duly registered with the SEC.

The closing date for the WaMu Securitized Trust was December 21, 2005, or 90 days thereafter. Glaski alleges that the attempt to assign his note and deed of trust to the WaMu Securitized Trust was made after the closing date and, therefore, the assignment was ineffective. (See fn. 12, post.)

WaMu’s Failure and Transfers of the Loan

In September 2008, WaMu was seized by the Office of Thrift Supervision and the Federal Deposit Insurance Corporation (FDIC) was appointed as a receiver for WaMu. That same day, the FDIC, in its capacity as receiver, sold the assets and liabilities of WaMu to defendant JPMorgan Chase Bank, N.A., (JP Morgan). This transaction was documented by a “PURCHASE AND ASSUMPTION AGREEMENT WHOLE BANK” (boldface and underlining omitted) between the FDIC and JP Morgan dated as of September 25, 2008. If Glaski’s loan was not validly transferred to the WaMu Securitized Trust, it is possible, though not certain, that JP Morgan acquired the Glaski deed of trust when it purchased WaMu assets from the FDIC.[4] JP Morgan also might have acquired the right to service the loans held by the WaMu Securitized Trust.

In September 2008, Glaski spoke to a representative of defendant Chase Home Finance LLC (Chase),[5] which he believed was an agent of JP Morgan, and made an oral agreement to start the loan modification process. Glaski believed that Chase had taken over loan modification negotiations from WaMu.

On December 9, 2008, two documents related to the Glaski deed of trust were recorded with the Fresno County Recorder: (1) an “ASSIGNMENT OF DEED OF TRUST” and (2) a “NOTICE OF DEFAULT AND ELECTION TO SELL UNDER DEED OF TRUST” (boldface omitted; hereinafter the NOD). The assignment stated that JP Morgan transferred and assigned all beneficial interest under the Glaski deed of trust to “LaSalle Bank NA as trustee for WaMu [Securitized Trust]” together with the note described in and secured by the Glaski deed of trust.[6]

Notice of Default and Sale of the Property

The NOD informed Glaski that (1) the Property was in foreclosure because he was behind in his payments[7] and (2) the Property could be sold without any court action. The NOD also stated that “the present beneficiary under” the Glaski deed of trust had delivered to the trustee a written declaration and demand for sale. According to the NOD, all sums secured by the deed of trust had been declared immediately due and payable and that the beneficiary elected to cause the Property to be sold to satisfy that obligation.

The NOD stated the amount of past due payments was $11,200.78 as of December 8, 2008.[8] It also stated: “To find out the amount you must pay, or to arrange for payment to stop the foreclosure, … contact: JPMorgan Chase Bank, National Association, at 7301 BAYMEADOWS WAY, JACKSONVILLE, FL 32256, (877) 926-8937.”

Approximately three months after the NOD was recorded and served, the next official step in the nonjudicial foreclosure process occurred. On March 12, 2009, a “NOTICE OF TRUSTEE’S SALE” was recorded by the Fresno County Recorder (notice of sale). The sale was scheduled for April 1, 2009. The notice stated that Glaski was in default under his deed of trust and estimated the amount owed at $734,115.10.

The notice of sale indicated it was signed on March 10, 2009, by Deborah Brignac, as Vice President for California Reconveyance. Glaski alleges that Brignac’s signature was forged to effectuate a fraudulent foreclosure and trustee’s sale of his primary residence.

Glaski alleges that from March until May 2009, he was led to believe by his negotiations with Chase that a loan modification was in process with JP Morgan.

Despite these negotiations, a nonjudicial foreclosure sale of the Property was conducted on May 27, 2009. Bank of America, as successor trustee for the WaMu Securitized Trust and beneficiary under the Glaski deed of trust, was the highest bidder at the sale.

On June 15, 2009, another “ASSIGNMENT OF DEED OF TRUST” was recorded with the Fresno County Recorder. This assignment, like the assignment recorded in December 2008, identified JP Morgan as the assigning party. The entity receiving all beneficial interest under the Glaski deed of trust was identified as Bank of America, “as successor by merger to `LaSalle Bank NA as trustee for WaMu [Securitized Trust]. …”[9] The assignment of deed of trust indicates it was signed by Brignac, as Vice President for JP Morgan. Glaski alleges that Brignac’s signature was forged.

The very next document filed by the Fresno County Recorder on June 15, 2009, was a “TRUSTEE’S DEED UPON SALE.” (Boldface omitted.) The trustee’s deed upon sale stated that California Reconveyance, as the duly appointed trustee under the Glaski deed of trust, granted and conveyed to Bank of America, as successor by merger to La Salle NA as trustee for the WaMu Securitized Trust, all of its right, title and interest to the Property. The trustee’s deed upon sale stated that the amount of the unpaid debt and costs was $738,238.04 and that the grantee, paid $339,150 at the trustee’s sale, either in lawful money or by credit bid.

PROCEEDINGS

In October 2009, Glaski filed his original complaint. In August 2011, Glaski filed the SAC, which alleged the following numbered causes of action:

(1) Fraud against JPMorgan and California Reconveyance for the alleged forged signatures of Deborah Brignac as vice president for California Reconveyance and then as vice president of JPMorgan;

(2) Fraud against all defendants for their failure to timely and properly transfer the Glaski loan to the WaMu Securitized Trust and their representations to the contrary;

(3) Quiet title against Bank of America, Chase, and California Reconveyance based on the broken chain of title caused by the defective transfer of the loan to the WaMu Securitized Trust;

(4) Wrongful foreclosure against all defendants, based on the forged signatures of Deborah Brignac and the failure to timely and properly transfer the Glaski loan to the WaMu Securitized Trust;

(5) Declaratory relief against all defendants, based on the above acts by defendants;

(8) Cancellation of various foreclosure documents against all defendants, based on the above acts by the defendants; and

(9) Unfair practices under California Business and Professions Code section 17200, et seq., against all defendants.

Among other things, Glaski raised questions regarding the chain of ownership, by contending that the defendants were not the lender or beneficiary under his deed of trust and, therefore, did not have the authority to foreclose.

In September 2011, defendants filed a demurrer that challenged each cause of action in the SAC on the grounds that it failed to state facts sufficient to constitute a claim for relief. With respect to the wrongful foreclosure cause of action, defendants argued that Glaski failed to allege (1) any procedural irregularity that would justify setting aside the presumptively valid trustee’s sale and (2) that he could tender the amount owed if the trustee’s sale were set aside.

To support their demurrer to the SAC, defendants filed a request for judicial notice concerning (1) Order No. 2008-36 of the Office of Thrift Supervision, dated September 25, 2008, appointing the FDIC as receiver of Washington Mutual Bank and (2) the Purchase and Assumption Agreement Whole Bank between the FDIC and JP Morgan dated as of September 25, 2008, concerning the assets, deposits and liabilities of Washington Mutual Bank.[10]

Glaski opposed the demurrer, arguing that breaks in the chain of ownership of his deed of trust were sufficiently alleged. He asserted that Brignac’s signature was forged and the assignment bearing that forgery was void. His opposition also provided a more detailed explanation of his argument that his deed of trust had not been effectively transferred to the WaMu Securitized Trust that held the pool of mortgage loans. Thus, in Glaski’s view, Bank of America’s claim as the successor trustee is flawed because the trust never held his loan.

On November 15, 2011, the trial court heard argument from counsel regarding the demurrer. Counsel for Glaski argued, among other things, that the possible ratification of the allegedly forged signatures of Brignac presented an issue of fact that could not be resolved at the pleading stage.

Later that day, the court filed a minute order adopting its tentative ruling. As background for the issues presented in this appeal, we will describe the trial court’s ruling on Glaski’s two fraud causes of action and his wrongful foreclosure cause of action.

The ruling stated that the first cause of action for fraud was based on an allegation that defendants misrepresented material information by causing a forged signature to be placed on the June 2009 assignment of deed of trust. The ruling stated that if the signature of Brignac was forged, California Reconveyance “ratified the signature by treating it as valid.” As an additional rationale, the ruling cited Gomes v. Countrywide Home Loans, Inc. (2011) 192 Cal.App.4th 1149 (Gomes) for the proposition that the exhaustive nature of California’s nonjudicial foreclosure scheme prohibited the introduction of additional requirements challenging the authority of the lender’s nominee to initiate nonjudicial foreclosure.

As to the second cause of action for fraud, the ruling noted the allegation that the Glaski deed of trust was transferred to the WaMu Securitized Trust after the trust’s closing date and summarized the claim as asserting that the Glaski deed of trust had been improperly transferred and, therefore, the assignment was void ab initio. The ruling rejected this claim, stating: “[T]o reiterate, Gomes v. Countrywide, supra holds that there is no legal basis to challenge the authority of the trustee, mortgagee, beneficiary, or any of their authorized agents to initiate the foreclosure process citing Civil Code § 2924, subd. (a)(1).”

The ruling stated that the fourth cause of action for wrongful foreclosure was “based upon the invalidity of the foreclosure sale conducted on May 27, 2009 due to the `forged’ signature of Deborah Brignac and the failure of Defendants to `provide a chain of title of the note and the mortgage.’” The ruling stated that, as explained earlier, “these contentions are meritless” and sustained the general demurrer to the wrongful foreclosure claim without leave to amend.

Subsequently, a judgment of dismissal was entered and Glaski filed a notice of appeal.

DISCUSSION
I. STANDARD OF REVIEW

The trial court sustained the demurrer to the SAC on the ground that it did “not state facts sufficient to constitute a cause of action.” (Code Civ. Proc., § 430.10, subd. (e).) The standard of review applicable to such an order is well settled. “[W]e examine the complaint de novo to determine whether it alleges facts sufficient to state a cause of action under any legal theory. …” (McCall v. PacifiCare of Cal., Inc. (2001) 25 Cal.4th 412, 415.)

When conducting this de novo review, “[w]e give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.] Further, we treat the demurrer as admitting all material facts properly pleaded, but do not assume the truth of contentions, deductions or conclusions of law. [Citations.]” (City of Dinuba v. County of Tulare (2007) 41 Cal.4th 859, 865.) Our consideration of the facts alleged includes “those evidentiary facts found in recitals of exhibits attached to a complaint.” (Satten v. Webb (2002) 99 Cal.App.4th 365, 375.) “We also consider matters which may be judicially noticed.” (Serrano v. Priest (1971) 5 Cal.3d 584, 591; see Code Civ. Proc., § 430.30, subd. (a) [use of judicial notice with demurrer].) Courts can take judicial notice of the existence, content and authenticity of public records and other specified documents, but do not take judicial notice of the truth of the factual matters asserted in those documents. (Mangini v. R.J. Reynolds Tobacco Co. (1994) 7 Cal.4th 1057, 1063, overruled on other grounds in In re Tobacco Cases II (2007) 41 Cal.4th 1257, 1262.) We note “in passing upon the question of the sufficiency or insufficiency of a complaint to state a cause of action, it is wholly beyond the scope of the inquiry to ascertain whether the facts stated are true or untrue” as “[t]hat is always the ultimate question to be determined by the evidence upon a trial of the questions of fact.” (Colm v. Francis (1916) 30 Cal.App. 742, 752.))

II. FRAUD
A. Rules for Pleading Fraud

The elements of a fraud cause of action are (1) misrepresentation, (2) knowledge of the falsity or scienter, (3) intent to defraud—that is, induce reliance, (4) justifiable reliance, and (5) resulting damages. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.) These elements may not be pleaded in a general or conclusory fashion. (Id. at p. 645.) Fraud must be pled specifically—that is, a plaintiff must plead facts that show with particularity the elements of the cause of action. (Ibid.)

In their demurrer, defendants contended facts establishing detrimental reliance were not alleged.

B. First Cause of Action for Fraud, Lack of Specific Allegations of Reliance

B. First Cause of Action for Fraud, Lack of Specific Allegations of Reliance

Glaski’s first cause of action, which alleges a fraud implemented through forged documents, alleges that defendants’ act “caused Plaintiff to rely on the recorded documents and ultimately lose the property which served as his primary residence, and caused Plaintiff further damage, proof of which will be made at trial.”

This allegation is a general allegation of reliance and damage. It does not identify the particular acts Glaski took because of the alleged forgeries. Similarly, it does not identify any acts that Glaski did not take because of his reliance on the alleged forgeries. Therefore, we conclude that Glaski’s conclusory allegation of reliance is insufficient under the rules of law that require fraud to be pled specifically. (Lazar v. Superior Court, supra, 12 Cal.4th at p. 645.)

The next question is whether the trial court abused its discretion in sustaining the demurrer to the first fraud cause of action without leave to amend.

In March 2011, the trial court granted Glaski leave to amend when ruling on defendants’ motion for judgment on the pleadings. The court indicated that Glaski’s complaint had jumbled together many different statutes and theories of liability and directed Glaski to avoid “chain letter” allegations in his amended pleading.

Glaski’s first amended complaint set forth two fraud causes of action that are similar to those included in the SAC.

Defendants demurred to the first amended complaint. The trial court’s minute order states: “Plaintiff is advised for the last time to plead each cause of action such that only the essential elements for the claim are set forth without reincorporation of lengthy `general allegations’. In other words, the `facts’ to be pleaded are those upon which liability depends (i.e., `the facts constituting the cause of action’).”

After Glaski filed his SAC, defendants filed a demurrer. Glaski then filed an opposition that asserted he had properly alleged detrimental reliance. He did not argue he could amend to allege specifically the action he took or did not take because of his reliance on the alleged forgeries.

Accordingly, Glaski failed to carry his burden of demonstrating he could allege with the requisite specificity the elements of justifiable reliance and damages resulting from that reliance. (See Blank v. Kirwan (1985) 39 Cal.3d 311, 318 [the burden of articulating how a defective pleading could be cured is squarely on the plaintiff].) Therefore, we conclude that the trial court did not abuse its discretion when it denied leave to amend as to the SAC’s first cause of action for fraud.
C. Second Fraud Cause of Action, Lack of Specific Allegations of Reliance

Glaski’s second cause of action for fraud alleged that WaMu failed to transfer his note and deed of trust into the WaMu Securitized Trust back in 2005. Glaski further alleged, in essence, that defendants attempted to rectify WaMu’s failure by engaging in a fraudulent scheme to assign his note and deed of trust into the WaMu Securitized Trust. The scheme was implemented in 2008 and 2009 and its purpose was to enable defendants to fraudulently foreclosure against the Property.

The second cause of action for fraud attempts to allege detrimental reliance in the following sentence: “Defendants, and each of them, also knew that the act of recording the Assignment of Deed of trust without the authorization to do so would cause Plaintiff to rely upon Defendants’ actions by attempting to negotiate a loan modification with representatives of Chase Home Finance, LLC, agents of JP MORGAN.” The assignment mentioned in this allegation is the assignment of deed of trust recorded in June 2009—no other assignment of deed of trust is referred to in the second cause of action.

The allegation of reliance does not withstand scrutiny. The act of recording the allegedly fraudulent assignment occurred in June 2009, after the trustee’s sale of the Property had been conducted. If Glaski was induced to negotiate a loan modification at that time, it is unclear how negotiations occurring after the May 2009 trustee’s sale could have diverted him from stopping the trustee’s sale. Thus, Glaski’s allegation of reliance is not connected to any detriment or damage.

Because Glaski has not demonstrated how this defect in his fraud allegations could be cured by amendment, we conclude that the trial court did not abuse its discretion in denying leave to amend the second cause of action in the SAC.
III. WRONGFUL FORECLOSURE BY NONHOLDER OF THE DEED OF TRUST
A. Glaski’s Theory of Wrongful Foreclosure

Glaski’s theory that the foreclosure was wrongful is based on (1) the position that paragraph 22 of the Glaski deed of trust authorizes only the lender-beneficiary (or its assignee) to (a) accelerate the loan after a default and (b) elect to cause the Property to be sold and (2) the allegation that a nonholder of the deed of trust, rather than the true beneficiary, instructed California Reconveyance to initiate the foreclosure.[11]

In particular, Glaski alleges that (1) the corpus of the WaMu Securitized Trust was a pool of residential mortgage notes purportedly secured by liens on residential real estate; (2) section 2.05 of “the Pooling and Servicing Agreement” required that all mortgage files transferred to the WaMu Securitized Trust be delivered to the trustee or initial custodian of the WaMu Securitized Trust before the closing date of the trust (which was allegedly set for December 21, 2005, or 90 days thereafter); (3) the trustee or initial custodian was required to identify all such records as being held by or on behalf of the WaMu Securitized Trust; (4) Glaski’s note and loan were not transferred to the WaMu Securitized Trust prior to its closing date; (5) the assignment of the Glaski deed of trust did not occur by the closing date in December 2005; (6) the transfer to the trust attempted by the assignment of deed of trust recorded on June 15, 2009, occurred long after the trust was closed; and (7) the attempted assignment was ineffective as the WaMu Securitized Trust could not have accepted the Glaski deed of trust after the closing date because of the pooling and servicing agreement and the statutory requirements applicable to a Real Estate Mortgage Investment Conduit (REMIC) trust.[12]
B. Wrongful Foreclosure by a Nonholder of the Deed of Trust

The theory that a foreclosure was wrongful because it was initiated by a nonholder of the deed of trust has also been phrased as (1) the foreclosing party lacking standing to foreclose or (2) the chain of title relied upon by the foreclosing party containing breaks or defects. (See Scott v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 743, 764; Herrera v. Deutsche Bank National Trust Co., supra, 196 Cal.App.4th 1366 [Deutsche Bank not entitled to summary judgment on wrongful foreclosure claim because it failed to show a chain of ownership that would establish it was the true beneficiary under the deed of trust]; Guerroro v. Greenpoint Mortgage Funding, Inc. (9th Cir. 2010) 403 Fed.Appx. 154, 156 [rejecting a wrongful foreclosure claim because, among other things, plaintiffs “have not pleaded any facts to rebut the unbroken chain of title”].)

In Barrionuevo v. Chase Bank, N.A. (N.D.Cal. 2012) 885 F.Supp.2d 964, the district court stated: “Several courts have recognized the existence of a valid cause of action for wrongful foreclosure where a party alleged not to be the true beneficiary instructs the trustee to file a Notice of Default and initiate nonjudicial foreclosure.” (Id. at p. 973.) We agree with this statement of law, but believe that properly alleging a cause of action under this theory requires more than simply stating that the defendant who invoked the power of sale was not the true beneficiary under the deed of trust. Rather, a plaintiff asserting this theory must allege facts that show the defendant who invoked the power of sale was not the true beneficiary. (See Herrera v. Federal National Mortgage Assn. (2012) 205 Cal.App.4th 1495, 1506 [plaintiff failed to plead specific facts demonstrating the transfer of the note and deed of trust were invalid].)
C. Borrower’s Standing to Raise a Defect in an Assignment

One basis for claiming that a foreclosing party did not hold the deed of trust is that the assignment relied upon by that party was ineffective. When a borrower asserts an assignment was ineffective, a question often arises about the borrower’s standing to challenge the assignment of the loan (note and deed of trust)—an assignment to which the borrower is not a party. (E.g., Conlin v. Mortgage Electronic Registration Systems, Inc. (6th Cir. 2013) 714 F.3d 355, 361 [third party may only challenge an assignment if that challenge would render the assignment absolutely invalid or ineffective, or void]; Culhane v. Aurora Loan Services of Nebraska (1st Cir. 2013) 708 F.3d 282, 291 [under Massachusetts law, mortgagor has standing to challenge a mortgage assignment as invalid, ineffective or void]; Gilbert v. Chase Home Finance, LLC (E.D.Cal., May 28, 2013, No. 1:13-CV-265 AWI SKO) 2013 WL 2318890.)[13]

California’s version of the principle concerning a third party’s ability to challenge an assignment has been stated in a secondary authority as follows:

“Where an assignment is merely voidable at the election of the assignor, third parties, and particularly the obligor, cannot … successfully challenge the validity or effectiveness of the transfer.” (7 Cal.Jur.3d (2012) Assignments, § 43.)

This statement implies that a borrower can challenge an assignment of his or her note and deed of trust if the defect asserted would void the assignment. (See Reinagel v. Deutsche Bank National Trust Co. (5th Cir. 2013) ___ F.3d ___ [2013 WL 3480207 at p. *3] [following majority rule that an obligor may raise any ground that renders the assignment void, rather than merely voidable].) We adopt this view of the law and turn to the question whether Glaski’s allegations have presented a theory under which the challenged assignments are void, not merely voidable.

We reject the view that a borrower’s challenge to an assignment must fail once it is determined that the borrower was not a party to, or third party beneficiary of, the assignment agreement. Cases adopting that position “paint with too broad a brush.” (Culhane v. Aurora Loan Services of Nebraska, supra, 708 F.3d at p. 290.) Instead, courts should proceed to the question whether the assignment was void.

D. Voidness of a Post-Closing Date Transfers to a Securitized Trust

Here, the SAC includes a broad allegation that the WaMu Securitized Trust “did not have standing to foreclosure on the … Property, as Defendants cannot provide the entire chain of title of the note and the [deed of trust].”[14]

More specifically, the SAC identifies two possible chains of title under which Bank of America, as trustee for the WaMu Securitized Trust, could claim to be the holder of the Glaski deed of trust and alleges that each possible chain of title suffers from the same defect—a transfer that occurred after the closing date of the trust.

First, Glaski addresses the possibility that (1) Bank of America’s chain of title is based on its status as successor trustee for the WaMu Securitized Trust and (2) the Glaski deed of trust became part of the WaMu Securitized Trust’s property when the securitized trust was created in 2005. The SAC alleges that WaMu did not transfer Glaski’s note and deed of trust into the WaMu Securitized Trust prior to the closing date established by the pooling and servicing agreement. If WaMu’s attempted transfer was void, then Bank of America could not claim to be the holder of the Glaski deed of trust simply by virtue of being the successor trustee of the WaMu Securitized Trust.

Second, Glaski addresses the possibility that Bank of America acquired Glaski’s deed of trust from JP Morgan, which may have acquired it from the FDIC. Glaski contends this alternate chain of title also is defective because JP Morgan’s attempt to transfer the Glaski deed of trust to Bank of America, as trustee for the WaMu Securitized Trust, occurred after the trust’s closing date. Glaski specifically alleges JP Morgan’s attempted assignment of the deed of trust to the WaMu Securitized Trust in June 2009 occurred long after the WaMu Securitized Trust closed (i.e., 90 days after December 21, 2005).

Based on these allegations, we will address whether a post-closing date transfer into a securitized trust is the type of defect that would render the transfer void. Other allegations relevant to this inquiry are that the WaMu Securitized Trust (1) was formed in 2005 under New York law and (2) was subject to the requirements imposed on REMIC trusts (entities that do not pay federal income tax) by the Internal Revenue Code.

The allegation that the WaMu Securitized Trust was formed under New York law supports the conclusion that New York law governs the operation of the trust. New York Estates, Powers & Trusts Law section 7-2.4, provides: “If the trust is expressed in an instrument creating the estate of the trustee, every sale, conveyance or other act of the trustee in contravention of the trust, except as authorized by this article and by any other provision of law, is void.”[15]

Because the WaMu Securitized Trust was created by the pooling and servicing agreement and that agreement establishes a closing date after which the trust may no longer accept loans, this statutory provision provides a legal basis for concluding that the trustee’s attempt to accept a loan after the closing date would be void as an act in contravention of the trust document.

We are aware that some courts have considered the role of New York law and rejected the post-closing date theory on the grounds that the New York statute is not interpreted literally, but treats acts in contravention of the trust instrument as merely voidable. (Calderon v. Bank of America, N.A. (W.D.Tex., Apr. 23, 2013, No. SA:12-CV-00121-DAE) ___ F.Supp.2d ___, [2013 WL 1741951 at p. *12] [transfer of plaintiffs’ note, if it violated PSA, would merely be voidable and therefore plaintiffs do not have standing to challenge it]; Bank of America National Association v. Bassman FBT, L.L.C. (Ill.Ct.App. 2012) 981 N.E.2d 1, 8 [following cases that treat ultra vires acts as merely voidable].)

Despite the foregoing cases, we will join those courts that have read the New York statute literally. We recognize that a literal reading and application of the statute may not always be appropriate because, in some contexts, a literal reading might defeat the statutory purpose by harming, rather than protecting, the beneficiaries of the trust. In this case, however, we believe applying the statute to void the attempted transfer is justified because it protects the beneficiaries of the WaMu Securitized Trust from the potential adverse tax consequence of the trust losing its status as a REMIC trust under the Internal Revenue Code. Because the literal interpretation furthers the statutory purpose, we join the position stated by a New York court approximately two months ago: “Under New York Trust Law, every sale, conveyance or other act of the trustee in contravention of the trust is void. EPTL § 7-2.4. Therefore, the acceptance of the note and mortgage by the trustee after the date the trust closed, would be void.” (Wells Fargo Bank, N.A. v. Erobobo (Apr. 29, 2013) 39 Misc.3d 1220(A), 2013 WL 1831799, slip opn. p. 8; see Levitin & Twomey, Mortgage Servicing, supra, 28 Yale J. on Reg. at p. 14, fn. 35 [under New York law, any transfer to the trust in contravention of the trust documents is void].) Relying on Erobobo, a bankruptcy court recently concluded “that under New York law, assignment of the Saldivars’ Note after the start up day is void ab initio. As such, none of the Saldivars’ claims will be dismissed for lack of standing.” (In re Saldivar (Bankr.S.D.Tex., Jun. 5, 2013, No. 11-10689) 2013 WL 2452699, at p. *4.)

We conclude that Glaski’s factual allegations regarding post-closing date attempts to transfer his deed of trust into the WaMu Securitized Trust are sufficient to state a basis for concluding the attempted transfers were void. As a result, Glaski has a stated cognizable claim for wrongful foreclosure under the theory that the entity invoking the power of sale (i.e., Bank of America in its capacity as trustee for the WaMu Securitized Trust) was not the holder of the Glaski deed of trust.[16]

We are aware that that some federal district courts sitting in California have rejected the post-closing date theory of invalidity on the grounds that the borrower does not have standing to challenge an assignment between two other parties. (Aniel v. GMAC Mortgage, LLC (N.D.Cal., Nov. 2, 2012, No. C 12-04201 SBA) 2012 WL 5389706 [joining courts that held borrowers lack standing to assert the loan transfer occurred outside the temporal bounds prescribed by the pooling and servicing agreement]; Almutarreb v. Bank of New York Trust Co., N.A. (N.D.Cal., Sept. 24, 2012, No. C 12-3061 EMC) 2012 WL 4371410.) These cases are not persuasive because they do not address the principle that a borrower may challenge an assignment that is void and they do not apply New York trust law to the operation of the securitized trusts in question.
E. Application of Gomes

The next question we address is whether Glaski’s wrongful foreclosure claim is precluded by the principles set forth in Gomes, supra, 192 Cal.App.4th 1149, a case relied upon by the trial court in sustaining the demurrer. Gomes was a pre-foreclosure action brought by a borrower against the lender, trustee under a deed and trust, and MERS, a national electronic registry that tracks the transfer of ownership interests and servicing rights in mortgage loans in the secondary mortgage market. (Id. at p. 1151.) The subject trust deed identified MERS as a nominee for the lender and that MERS is the beneficiary under the trust deed. After initiation of a nonjudicial forclosure, borrower sued for wrongful initiation of foreclosure, alleging that the current owner of the note did not authorize MERS, the nominee, to proceed with the foreclosure. The appellate court held that California’s nonjudicial foreclosure system, outlined in Civil Code sections 2924 through 2924k, is a “`comprehensive framework for the regulation of a nonjudicial foreclosure sale’” that did not allow for a challenge to the authority of the person initiating the foreclosure. (Gomes, supra, at p. 1154.)

In Naranjo v. SBMC Mortgage (S.D.Cal., Jul. 24, 2012, No. 11-CV-2229-L(WVG)) 2012 WL 3030370 (Naranjo), the district court addressed the scope of Gomes, stating:

“In Gomes, the California Court of Appeal held that a plaintiff does not have a right to bring an action to determine the nominee’s authorization to proceed with a nonjudicial foreclosure on behalf of a noteholder. [Citation.] The nominee in Gomes was MERS. [Citation.] Here, Plaintiff is not seeking such a determination. The role of the nominee is not central to this action as it was in Gomes. Rather, Plaintiff alleges that the transfer of rights to the WAMU Trust is improper, thus Defendants consequently lack the legal right to either collect on the debt or enforce the underlying security interest.” (Naranjo, supra, 2012 WL 3030370, at p. *3.)

Thus, the court in Naranjo did not interpret Gomes as barring a claim that was essentially the same as the post-closing date claim Glaski is asserting in this case.

Furthermore, the limited nature of the holding in Gomes is demonstrated by the Gomes court’s discussion of three federal cases relied upon by Mr. Gomes. The court stated that the federal cases were not on point because none recognized a cause of action requiring the noteholder’s nominee to prove its authority to initiate a foreclosure proceeding. (Gomes, supra, 192 Cal.App.4th at p. 1155.) The Gomes court described one of the federal cases by stating that “the plaintiff alleged wrongful foreclosure on the ground that assignments of the deed of trust had been improperly backdated, and thus the wrong party had initiated the foreclosure process. [Citaiton.] No such infirmity is alleged here.” (Ibid.; see Lester v. J.P. Morgan Chase Bank (N.D.Cal., Feb. 20, 2013) ___ F.Supp.2d ___, [2013 WL 633333, p. *7] [concluding Gomes did not preclude the plaintiff from challenging JP Morgan’s authority to foreclose].) The Gomes court also stated it was significant that in each of the three federal cases, “the plaintiff’s complaint identified a specific factual basis for alleging that the foreclosure was not initiated by the correct party.” (Gomes, supra, at p. 1156.)

The instant case is distinguishable from Gomes on at least two grounds. First, like Naranjo, Glaski has alleged that the entity claiming to be the noteholder was not the true owner of the note. In contrast, the principle set forth in Gomes concerns the authority of the noteholder’s nominee, MERS. Second, Glaski has alleged specific grounds for his theory that the foreclosure was not conducted at the direction of the correct party.

In view of the limiting statements included in the Gomes opinion, we do not interpret it as barring claims that challenge a foreclosure based on specific allegations that an attempt to transfer the deed of trust was void. Our interpretation, which allows borrowers to pursue questions regarding the chain of ownership, is compatible with Herrera v. Deutsche Bank National Trust Co., supra, 196 Cal.App.4th 1366. In that case, the court concluded that triable issues of material fact existed regarding alleged breaks in the chain of ownership of the deed of trust in question. (Id. at p. 1378.) Those triable issues existed because Deutsche Bank’s motion for summary judgment failed to establish it was the beneficiary under that deed of trust. (Ibid.)
F. Tender

Defendants contend that Glaski’s claims for wrongful foreclosure, cancellation of instruments and quiet title are defective because Glaski failed to allege that he made a valid and viable tender of payment of the indebtedness. (See Karlsen v. American Sav. & Loan Assn. (1971) 15 Cal.App.3d 112, 117 [“valid and viable tender of payment of the indebtedness owing is essential to an action to cancel a voidable sale under a deed of trust”].)

Glaski contends that he is not required to allege he tendered payment of the loan balance because (1) there are many exceptions to the tender rule, (2) defendants have offered no authority for the proposition that the absence of a tender bars a claim for damages,[17] and (3) the tender rule is a principle of equity and its application should not be decided against him at the pleading stage.

Tender is not required where the foreclosure sale is void, rather than voidable, such as when a plaintiff proves that the entity lacked the authority to foreclose on the property. (Lester v. J.P. Morgan Chase Bank, supra, ___ F.Supp.2d ___, [2013 WL 633333, p. *8]; 4 Miller & Starr, Cal. Real Estate (3d ed. 2003) Deeds of Trust, § 10:212, p. 686.)

Accordingly, we cannot uphold the demurrer to the wrongful foreclosure claim based on the absence of an allegation that Glaski tendered the amount due under his loan. Thus, we need not address the other exceptions to the tender requirement. (See e.g., Onofrio v. Rice (1997) 55 Cal.App.4th 413, 424 [tender may not be required where it would be inequitable to do so].)
G. Remedy of Setting Aside Trustee’s Sale

Defendants argue that the allegedly ineffective transfer to the WaMu Securitized Trust was a mistake that occurred outside the confines of the statutory nonjudicial foreclosure proceeding and, pursuant to Nguyen v. Calhoun (2003) 105 Cal.App.4th 428, 445, that mistake does not provide a basis for invalidating the trustee’s sale.

First, this argument does not negate the possibility that other types of relief, such as damages, are available to Glaski. (See generally, Annot., Recognition of Action for Damages for Wrongful Foreclosure—Types of Action, supra, 82 A.L.R.6th 43.)

Second, “where a plaintiff alleges that the entity lacked authority to foreclose on the property, the foreclosure sale would be void. [Citation.]” (Lester v. J.P. Morgan Chase Bank, supra, ___ F.Supp.2d ___, [2013 WL 633333, p. *8].)

Consequently, we conclude that Nguyen v. Calhoun, supra, 105 Cal.App.4th 428 does not deprive Glaski of the opportunity to prove the foreclosure sale was void based on a lack of authority.
H. Causes of Action Stated

Based on the foregoing, we conclude that Glaski’s fourth cause of action has stated a claim for wrongful foreclosure. It follows that Glaski also has stated claims for quiet title (third cause of action), declaratory relief (fifth cause of action), cancellation of instruments (eighth cause of action), and unfair business practices under Business and Professions Code section 17200 (ninth cause of action). (See Susilo v. Wells Fargo Bank, N.A. (C.D.Cal. 2011) 796 F.Supp.2d 1177, 1196 [plaintiff’s wrongful foreclosure claims served as predicate violations for her UCL claim].)
IV. JUDICIAL NOTICE
A. Glaski’s Request for Judicial Notice

When Glaski filed his opening brief, he also filed a request for judicial notice of (1) a Consent Judgment entered on April 4, 2012, by the United States District Court of the District of Columbia in United States v. Bank of America Corp. (D.D.C. No. 12-CV-00361); (2) the Settlement Term Sheet attached to the Consent Judgment; and (3) the federal and state release documents attached to the Consent Judgment as Exhibits F and G.

Defendants opposed the request for judicial notice on the ground that the request violated the requirements in California Rules of Court, rule 8.252 because it was not filed with a separate proposed order, did not state why the matter to be noticed was relevant to the appeal, and did not state whether the matters were submitted to the trial court and, if so, whether that court took judicial notice of the matters.

The documents included in Glaski’s request for judicial notice may provide background information and insight into robo-signing[18] and other problems that the lending industry has had with the procedures used to foreclose on defaulted mortgages. However, these documents do not directly affect whether the allegations in the SAC are sufficient to state a cause of action. Therefore, we deny Glaski’s request for judicial notice.
B. Defendants’ Request for Judicial Notice of Assignment

The “ASSIGNMENT OF DEED OF TRUST” recorded on December 9, 2008, that stated JP Morgan transferred and assigned all beneficial interest under the Glaski deed of trust to “LaSalle Bank NA as trustee for WaMu [Securitized Trust]” together with the note described in and secured by the Glaski deed of trust was not attached to the SAC as an exhibit. That document is part of the appellate record because the respondents’ appendix includes a copy of defendants’ request for judicial notice that was filed in June 2011 to support a motion for judgment on the pleadings.

In ruling on defendants’ request for judicial notice, the trial court stated that it could only take judicial notice that certain documents in the request, including the assignment of deed of trust, had been recorded, but it could not take judicial notice of factual matters stated in those documents. This ruling is correct and unchallenged on appeal. Therefore, like the trial court, we will take judicial notice of the existence and recordation of the December 2008 assignment, but we “do not take notice of the truth of matters stated therein.” (Herrera v. Deutsche Bank National Trust Co., supra, 196 Cal.App.4th at p. 1375.) As a result, the assignment of deed of trust does not establish that JP Morgan was, in fact, the holder of the beneficial interest in the Glaski deed of trust that the assignment states was transferred to LaSalle Bank. Similarly, it does not establish that LaSalle Bank in fact became the owner or holder of that beneficial interest.

Because the document does not establish these facts for purposes of this demurrer, it does not cure either of the breaks in the two alternate chains of ownership challenged in the SAC. Therefore, the December 2008 assignment does not provide a basis for sustaining the demurrer.
DISPOSITION

The judgment of dismissal is reversed. The trial court is directed to vacate its order sustaining the general demurrer and to enter a new order overruling that demurrer as to the third, fourth, fifth, eighth and ninth causes of action.

Glaski’s request for judicial notice filed on September 25, 2012, is denied.

Glaski shall recover his costs on appeal.

Wiseman, Acting P.J. and Kane, J., concurs.
ORDER GRANTING REQUEST FOR PUBLICATION

As the nonpublished opinion filed on July 31, 2013, in the above entitled matter hereby meets the standards for publication specified in the California Rules of Court, rule 8.1105(c), it is ordered that the opinion be certified for publication in the Official Reports.

KANE, J., concur.

[1] Mortgage-backed securities are created through a complex process known as “securization.” (See Levitin & Twomey, Mortgage Servicing (2011) 28 Yale J. on Reg. 1, 13 [“a mortgage securitization transaction is extremely complex”].) In simplified terms, “securitization” is the process where (1) many loans are bundled together and transferred to a passive entity, such as a trust, and (2) the trust holds the loans and issues investment securities that are repaid from the mortgage payments made on the loans. (Oppenheim & Trask-Rahn, Deconstructing the Black Magic of Securitized Trusts: How the Mortgage-Backed Securitization Process is Hurting the Banking Industry’s Ability to Foreclose and Proving the Best Offense for a Foreclosure Defense (2012) 41 Stetson L.Rev. 745, 753-754 (hereinafter, Deconstructing Securitized Trusts).) Hence, the securities issued by the trust are “mortgage-backed.” For purposes of this opinion, we will refer to such a trust as a “securitized trust.”

[2] Civil Code section 2924, subdivision (a)(1) states that a “trustee, mortgagee, or beneficiary, or any of their authorized agents” may initiate the nonjudicial foreclosure process. This statute and the provision of the Glaski deed of trust are the basis for Glaski’s position that the nonjudicial foreclosure in this case was wrongful—namely, that the power of sale in the Glaski deed of trust was invoked by an entity that was not the true beneficiary.

[3] Glaski’s pleading does not allege that LaSalle Bank was the original trustee when the WaMu Securitized Trust was formed in late 2005, but filings with the Securities and Exchange Commission identify LaSalle Bank as the original trustee. We provide this information for background purposes only and it plays no role in our decision in this appeal.

[4] Another possibility, which was acknowledged by both sides at oral argument, is that the true holder of the note and deed of trust cannot be determined at this stage of the proceedings. This lack of certainty regarding who holds the deed of trust is not uncommon when a securitized trust is involved. (See Mortgage and Asset Backed Securities Litigation Handbook (2012) § 5:114 [often difficult for securitized trust to prove ownership by showing a chain of assignments of the loan from the originating lender].)

[5] It appears this company is no longer a separate entity. The certificate of interested entities filed with the respondents’ brief refers to “JPMorgan Chase Bank, N.A. as successor by merger to Chase Home Finance, LLC.”

[6] One controversy presented by this appeal is whether this court should consider the December 9, 2008, assignment of deed of trust, which is not an exhibit to the SAC. Because the trial court took judicial notice of the existence and recordation of the assignment earlier in the litigation, we too will consider the assignment, but will not presume the matters stated therein are true. (See pt. IV.B, post.) For instance, we will not assume that JP Morgan actually held any interests that it could assign to LaSalle Bank. (See Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366, 1375 [taking judicial notice of a recorded assignment does not establish assignee’s ownership of deed of trust].)

[7] Specifically, the notice stated that his August 2008 installment payment and all subsequent installment payments had not been made.

[8] The signature block at the end of the NOD indicated it was signed by Colleen Irby as assistant secretary for California Reconveyance. The first page of the notice stated that recording was requested by California Reconveyance. Affidavits of mailing attached to the SAC stated that the declarant mailed copies of the notice of default to Glaski at his home address and to Bank of America, care of Custom Recording Solutions, at an address in Santa Ana, California. The affidavits of mailing are the earliest documents in the appellate record indicating that Bank of America had any involvement with Glaski’s loan.

[9] Bank of America took over La Salle Bank by merger in 2007.

[10] The trial court did not explicitly rule on defendants’ request for judicial notice of these documents, but referred to matters set forth in these documents in its ruling. Therefore, for purposes of this appeal, we will infer that the trial court granted the request.

[11] The claim that a foreclosure was conducted by or at the direction of a nonholder of mortgage rights often arises where the mortgage has been securitized. (Buchwalter, Cause of Action in Tort for Wrongful Foreclosure of Residential Mortgage, 52 Causes of Action Second (2012) 119, 149 [§ 11 addresses foreclosure by a nonholder of mortgage rights].)

[12] This allegation comports with the following view of pooling and servicing agreements and the federal tax code provisions applicable to REMIC trusts. “Once the bundled mortgages are given to a depositor, the [pooling and servicing agreement] and IRS tax code provisions require that the mortgages be transferred to the trust within a certain time frame, usually ninety dates from the date the trust is created. After such time, the trust closes and any subsequent transfers are invalid. The reason for this is purely economic for the trust. If the mortgages are properly transferred within the ninety-day open period, and then the trust properly closes, the trust is allowed to maintain REMIC tax status.” (Deconstructing Securitized Trusts, supra, 41 Stetson L.Rev. at pp. 757-758.)

[13] “Although we may not rely on unpublished California cases, the California Rules of Court do not prohibit citation to unpublished federal cases, which may properly be cited as persuasive, although not binding, authority.” (Landmark Screens, LLC v. Morgan, Lewis & Bockius, LLP (2010) 183 Cal.App.4th 238, 251, fn. 6, citing Cal. Rules of Court, rule 8.1115.)

[14] Although this allegation and the remainder of the SAC do not explicitly identify the trustee of the WaMu Securitized Trust as the entity that invoked the power of sale, it is reasonable to interpret the allegation in this manner. Such an interpretation is consistent with the position taken by Glaski’s attorney at the hearing on the demurrer, where she argued that the WaMu Securitized Trust did not obtain Glaski’s loan and thus was precluded from proceeding with the foreclosure.

[15] The statutory purpose is “to protect trust beneficiaries from unauthorized actions by the trustee.” (Turano, Practice Commentaries, McKinney’s Consolidated Laws of New York, Book 17B, EPTL § 7-2.4.)

[16] Because Glaski has stated a claim for relief in his wrongful foreclosure action, we need not address his alternate theory that the foreclosure was void because it was implemented by forged documents. (Genesis Environmental Services v. San Joaquin Valley Unified Air Pollution Control Dist. (2003) 113 Cal.App.4th 597, 603 [appellate inquiry ends and reversal is required once court determines a cause of action was stated under any legal theory].) We note, however, that California law provides that ratification generally is an affirmative defense and must be specially pleaded by the party asserting it. (See Reina v. Erassarret (1949) 90 Cal.App.2d 418, 424 [ratification is an affirmative defense and the defendant ordinarily bears the burden of proof]; 49A Cal.Jur.3d (2010) Pleading, § 186, p. 319 [defenses that must be specially pleaded include waiver, estoppel and ratification].) Also, “[w]hether there has been ratification of a forged signature is ordinarily a question of fact.” (Common Wealth Ins. Systems, Inc. v. Kersten (1974) 40 Cal.App.3d 1014, 1026; see Brock v. Yale Mortg. Corp. (Ga. 2010) 700 S.E.2d 583, 588 [ratification may be expressed or implied from acts of principal and “is usually a fact question for the jury”; wife had forged husband’s signature on quitclaim deed].)

[17] See generally, Annotation, Recognition of Action for Damages for Wrongful Foreclosure—Types of Action (2013) 82 A.L.R.6th 43 (claims that a foreclosure is “wrongful” can be tort-based, statute-based, and contract-based).

[18] Claims of misrepresentation or fraud related to robo-signing of foreclosure documents is addressed in Buchwalter, Cause of Action in Tort for Wrongful Foreclosure of Residential Mortgage, 52 Causes of Action Second, supra, at pages 147 to 149.

INDEPENDENT REVIEW & COMMENTS:

Glaski v Bank of America: Mortgagor’s Defense Based on Lender’s Failure to Properly Securitize a Loan

Roger Bernhardt

Golden Gate University – School of Law

September 29, 2013

CEB 36 Real Property Law Reporter 111, September 2013

Abstract:

Commentary on a recent California decision holding that a lender might be unable to enforce an improperly securitized loan.

Accepted Paper Series

Glaski v Bank of America: Mortgagor’s Defense Based on Lender’s Failure to Properly Securitize a Loan.
Glaski v Bank of America (2013) 218 CA4th 1079 Before being placed into receivership, Washington Mutual Bank (WaMu) established a pool of residential loans as collateral for mortgage-backed securities. New York law governed the resulting securitized trust. According to the lender, the trust included Borrower’s defaulted loan. Bank of America, which claimed it was successor trustee and beneficiary of the trust, purchased Borrower’s property at the trustee’s sale. There were two possible chains of title through which Bank of America could have claimed
to be successor trustee. (Notably, at the demurrer stage, the parties acknowledged that they could not be certain who truly held Borrower’s note.) Borrower challenged both conceivable chains of title as having
been assigned after the trust closing date. The trial court sustained Bank of America’s demurrer without leave to amend.
The court of appeal reversed in part. The court ruled that a borrower may challenge an assignment as being void even if that borrower was not a party to, or a third party beneficiary of, that assignment. Such a
challenge effectively states a claim for wrongful foreclosure. Disagreeing with Texas and Illinois courts, the court literally and strictly construed the applicable New York statute, which states that any act by a trustee in contravention of the trust document is void (218 CA4th at 1096): Because the WaMu Securitized Trust was created by the pooling and servicing agreement and that agreement establishes a closing date after which the trust may no longer accept loans, this statutory provision provides a legal basis for concluding that the trustee’s attempt to accept a loan after the closing date would be void as an act in contravention of the trust document.
This is significant because the borrower need not tender payment of indebtedness when the foreclosure sale is void.
THE EDITOR’S TAKE: If some lenders are reacting with shock and horror to this decision, that is probably only because they reacted too giddily to Gomes v Countrywide Home Loans, Inc. (2011) 192 CA4th 1149 (reported at 34 CEB RPLR 66 (Mar. 2011)) and similar decisions that they took to mean that their nonjudicial foreclosures were completely immune from judicial review. Because I think that Glaski simply holds that some borrower foreclosure challenges may warrant factual investigation (rather than outright dismissal at the pleading stage), I do not find this decision that earth-shaking.
Two of this plaintiff’s major contentions were in fact entirely rejected at the demurrer level: —That the foreclosure was fraudulent because the statutory notices looked robosigned (“forged”); and —That the loan documents were not truly transferred into the loan pool.
Only the borrower’s wrongful foreclosure count survived into the next round. If the bank can show that the documents were handled in proper fashion, it should be able to dispose of this last issue on summary
judgment.
Bank of America appeared to not prevail on demurrer on this issue because the record did include two deed of trust assignments that had been recorded outside the Real Estate Mortgage Investment Conduit (REMIC) period and did not include any evidence showing that the loan was put into the securitization pool within the proper REMIC period. The court’s ruling that a transfer into a trust that is made too late may constitute a void rather than voidable transfer (to not jeopardize the tax-exempt status of the other assets in the trust) seems like a sane conclusion. That ruling does no harm to securitization pools that were created with proper attention to the necessary timetables. (It probably also has only slight effect on loans that were improperly securitized,
other than to require that a different procedure be followed for their foreclosure.)

In this case, the fact that two assignments of a deed of trust were recorded after trust closure proves almost nothing about when the loans themselves were actually transferred into the trust pool, it having been a common practice back then not to record assignments until some other development made recording appropriate. I suspect that it was only the combination of seeing two “belatedly” recorded assignments and also seeing no indication of any timely made document deposits into the trust pool that led to court to say that the borrower had sufficiently alleged an invalid (i.e., void) attempted transfer into the trust. Because that seemed to be a factual possibility, on remand, the court logically should ask whether the pool trustee was the rightful party to conduct the foreclosure of the deed of trust, or whether that should have been done by someone else.

While courts may not want to find their dockets cluttered with frivolous attacks on valid foreclosures, they are probably equally averse to allowing potentially meritorious challenges to wrongful foreclosures to be rejected out of hand. —Roger Bernhardt

From CEB 36 Real Property Law Reporter 111, September 2013, © The Regents of the University of California, reprinted with permission of CEB.”

B. First Cause of Action for Fraud, Lack of Specific Allegations of Reliance – See more at: http://stopforeclosurefraud.com/2013/08/01/glaski-v-bank-of-america-ca5-5th-appellate-district-securitization-failed-ny-trust-law-applied-ruling-to-protect-remic-status-non-judicial-foreclosure-statutes-irrelevant-because-sa/#sthash.jRAaLypz.dpuf

II. FRAUD

A. Rules for Pleading Fraud

We therefore reverse the judgment of dismissal and remand for further proceedings. – See more at: http://stopforeclosurefraud.com/2013/08/01/glaski-v-bank-of-america-ca5-5th-appellate-district-securitization-failed-ny-trust-law-applied-ruling-to-protect-remic-status-non-judicial-foreclosure-statutes-irrelevant-because-sa/#sthash.jRAaLypz.dpuf

How Nevada Homeowners Can Effectively Plead Foreclosure Fraud and Misrepresentation

20 Friday Dec 2013

Posted by BNG in Affirmative Defenses, Appeal, Case Laws, Case Study, Federal Court, Foreclosure Defense, Fraud, Judicial States, Legal Research, Litigation Strategies, Mortgage Laws, Non-Judicial States, Pleadings, Pro Se Litigation, State Court, Your Legal Rights

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Dingwall, Federal Court, Foreclosure, Fraud, Legal burden of proof, Nevada Bell, Plaintiff, Reno Air

This post is designed to guide homeowners in wrongful foreclosure litigation when pleading their Fraud and Misrepresentation cases in State and Federal Courts.

Fraudulent or Intentional Misrepresentation

Elements:

Standard Intentional Misrepresentation

(1) defendant made a false representation,
(2) with knowledge or belief that the representation was false or without a sufficient basis for making the representation,
(3) the defendant intended to induce the plaintiff to act or refrain from acting on the representation,
(4) the plaintiff justifiably relied on the representation, and
(5) the plaintiff was damaged as a result of his reliance.

J.A. Jones Const. Co. v. Lehrer McGovern Bovis, Inc., 120 Nev. 277, 290–91, 89 P.3d 1009, 1018 (2004);

Fraud By Omission
With respect to the false representation element, the suppression or omission ” ‘of a material fact which a party is bound in good faith to disclose is equivalent to a false representation, since it constitutes an indirect representation that such fact does not exist.’ Nelson v. Heer, 123 Nev. 217, 163 P.3d 420 (Nev. 2007) (quoting Midwest Supply, Inc. v. Waters, 89 Nev. 210, 212-13, 510 P.2d 876, 878 (1973).

Example Cases:

Foster v. Dingwall, — P.3d —, 2010 WL 679069, at *8 (Nev. Feb. 25, 2010) (en banc); Jordan v. State ex rel. Dep’t of Motor Vehicles & Pub. Safety, 121 Nev. 44, 75, 110 P.3d 30, 51 (2005);J.A. Jones Const. Co. v. Lehrer McGovern Bovis, Inc., 120 Nev. 277, 290–91, 89 P.3d 1009, 1018 (2004); Chen v. Nev. State Gaming Control Bd.,116 Nev. 282, 284, 994 P.2d 1151, 1152 (2000); Albert H. Wohlers & Co. v. Bartgis, 114 Nev. 1249, 1260, 969 P.2d 949, 957 (1998); Barmettler v. Reno Air, Inc., 114 Nev. 441, 956 P.2d 1382 (1998); Blanchard v. Blanchard, 108 Nev. 908, 911, 839 P.2d 1320, 1322 (1992); Bulbman, Inc. v. Nevada Bell, 108 Nev. 105, 110–11, 825 P.2d 588, 592 (1992); Collins v. Burns, 103 Nev. 394, 397, 741 P.2d 819, 821 (1987); Epperson v. Roloff, 102 Nev. 206, 211, 719 P.2d 799, 802 (1986); Hartford Acc. & Indem. Co. v. Rogers, 96 Nev. 576, 580 n.1, 613 P.2d 1025, 1027 n.1 (1980); Lubbe v. Barba, 91 Nev. 596, 540 P.2d 115 (1975).

Proof

“The intention that is necessary to make the rule stated in this Section applicable is the intention of the promisor when the agreement was entered into. The intention of the promisor not to perform an enforceable or unenforceable agreement cannot be established solely by proof of its nonperformance, nor does his failure to perform the agreement throw upon him the burden of showing that his nonperformance was due to reasons which operated after the agreement was entered into. The intention may be shown by any other evidence that sufficiently indicates its existence, as, for example, the certainty that he would not be in funds to carry out his promise.” REST 2d TORTS § 530, comment d.

A plaintiff has the burden of proving each element of fraud claim by clear and convincing evidence. Albert H. Wohlers & Co. v. Bartgis, 114 Nev. 1249, 1260, 969 P.2d 949, 957 (1998);Bulbman, Inc. v. Nevada Bell, 108 Nev. 105, 110–11, 825 P.2d 588, 592 (1992); Lubbe v. Barba, 91 Nev. 596, 540 P.2d 115 (1975).

“Whether these elements are present in a given case is ordinarily a question of fact.” Epperson v. Roloff, 102 Nev. 206, 211, 719 P.2d 799, 802 (1986).

“Further, ‘[w]here an essential element of a claim for relief is absent, the facts, disputed or otherwise, as to other elements are rendered immaterial and summary judgment is proper.’ Bulbman, 108 Nev. at 111, 825 P.2d at 592.” Barmettler v. Reno Air, Inc., 114 Nev. 441, 447, 956 P.2d 1382, 1386 (1998).

“‘[f]raud is never presumed; it must be clearly and satisfactorily proved.’” J.A. Jones Const. Co. v. Lehrer McGovern Bovis, Inc., 120 Nev. 277, 291, 89 P.3d 1009, 1018 (2004) (quoting Havas v. Alger, 85 Nev. 627, 631, 461 P.2d 857, 860 (1969)).

“the essence of any misrepresentation claim is a false or misleading statement that harmed [the plaintiff].” Nanopierce Techs., Inc. v. Depository Trust & Clearing Corp., 123 Nev. 362, 168 P.3d 73, 82 (2007).

False Representations:

Estimates and opinions are not false representations. Commendatory sales talk (puffing) isn’t either.

“Nevada Bell’s representations to Bulbman about the cost of Centrex and the installation time are estimates and opinions based on past experience with the system. As such, these representations are not actionable in fraud. See Clark Sanitation v. Sun Valley Disposal, 87 Nev. 338, 487 P.2d 337 (1971). Nevada Bell’s representations as to the reliability and performance of the system constitute mere commendatory sales talk about the product (‘puffing’), also not actionable in fraud. See e.g., Coy v. Starling, 53 Or.App. 76, 630 P.2d 1323 (1981). Furthermore, in his deposition, Gerald Roth, Jr., testified that he did not believe Nevada Bell had intentionally lied to him about its Centrex system. Rather, Roth stated that Nevada Bell might have been ‘more careful’ in making certain representations, particularly with respect to how long it would take to install a Centrex system. Roth’s testimony establishes the absence of fraudulent intent on the part of Nevada Bell.” Bulbman, Inc. v. Nev. Bell, 108 Nev. 105, 111, 825 P.2d 588, 592 (1992).

“An estimate is an opinion and an estimate of value is an opinion as to value upon which reasonable and honorable men may hold differing views. This is the basis for the frequently announced rule that a charge of fraud normally may not be based upon representations of value. Frankfurt v. Wilson, 353 S.W.2d 490 (Tex.Civ.App.1961); Burke v. King, 176 Okl. 625, 56 P.2d 1185 (1936).” Clark Sanitation, Inc. v. Sun Valley Disposal Co., 87 Nev. 338, 341, 487 P.2d 337, 339 (1971).

“Story, in his work on contracts, in discussing the various questions presented by the misrepresentations of the vendor, lays down the rule as follows: ‘If the seller fraudulently misrepresents facts, or states facts to exist which he knows not to exist, his fraud would vitiate the contract, provided the misstatements were in respect to a material point.’ (Section 636.) But where a statement is not made as a fact, but only as an opinion, the rule is quite different. Thus a false representation as to a mere matter of opinion * * * does not avoid the contract. * * * Ordinarily, a naked statement of opinion is not a representation on which a buyer is legally entitled to rely, unless, perhaps, in some special cases where peculiar confidence or trust is created between the parties. The ground of this rule is, probably, the impracticability of attempting to discover by means of the rules of law the real opinion of the party making the representation, and also because a mere expression of opinion does not alter facts, though it may bias the judgment. Mere expressions of opinion are not, therefore, considered so tangible a fraud as to form a ground of avoidance of a contract, even though they be falsely stated. * * * Yet, where a representation is made, going to the essence of a contract, the party making it should be careful to state it as an opinion, and not as a fact of which he has knowledge, or he may be liable thereon. The question whether a statement was intended to be given as an opinion, and was so received, is, however, one for a jury to determine, upon the peculiar circumstances of the case. But whenever a belief is asserted, as in a fact, which is material or essential, and which the person asserting knows to be false, and the statement is made with an intention to mislead, it is fraudulent and affords a ground of relief.’” Banta v. Savage, 12 Nev. 151, 0–4 (1877).

Fraudulent or Intentional Misrepresentation

Pleading Standards

Standard

In actions involving fraud, the circumstances of the fraud are required by Nev.R.Civ.P. 9(b) to be stated with particularity. The circumstances that must be detailed include averments to the time, the place, the identity of the parties involved, and the nature of the fraud or mistake.”
Brown v. Kellar, 97 Nev. 582, 583-84, 636 P.2d 874, 874 (Nev. 1981).

Allegations of fraud upon “information or belief” must be backed up with reasons for the belief

[i]t is not sufficient to charge a fraud upon information and belief…without giving the ground upon which the belief rests or stating some fact from which the court can infer that the belief is well founded.
Tallman v. First Nat. Bank of Nev., 66 Nev. 248, 259, 208 P.2d 302, 307 (Nev. 1949).

Requirements for pleading fraud generally: The “Relaxed Standard”

The federal district court found that the plaintiffs’ allegations did not meet the strict requirement of FRCP 9(b), but it also found that “[w]here a plaintiff is claiming . . . to have been injured as the result of a fraud perpetrated on a third party, the circumstances surrounding the transaction are peculiarly within the defendant’s knowledge.”[22] Therefore, the court applied the relaxed standard and, pointing to the above facts, allowed the plaintiffs to conduct discovery and to amend their complaint to meet FRCP 9(b)’s pleading requirements.[23]

This exception strikes a reasonable balance between NRCP 9(b)’s stringent requirements for pleading fraud and a plaintiff’s inability to allege the full factual basis concerning fraud because information and documents are solely in the defendant’s possession and cannot be secured without formal, legal discovery. Therefore, we adopt this relaxed standard in situations where the facts necessary for pleading with particularity “are peculiarly within the defendant’s knowledge or are readily obtainable by him.”[24]

In addition to requiring that the plaintiff state facts supporting a strong inference of fraud, we add the additional requirements that the plaintiff must aver that this relaxed standard is appropriate and show in his complaint that he cannot plead with more particularity because the required information is in the defendant’s possession. If the district court finds that the relaxed standard is appropriate, it should allow the plaintiff time to conduct the necessary discovery.[25] Thereafter, the plaintiff can move to amend his complaint to plead allegations of fraud with particularity in compliance with NRCP 9(b).[26] Correspondingly, the defendant may renew its motion to dismiss under NRCP 9(b) if the plaintiff’s amended complaint still does not meet NRCP 9(b)’s particularity requirements.

Rocker v. KMPG LLP, 122 Nev. 1185, 148 P.3d 703, (2006) (overruled on other grounds Buzz Stew, LLC v. City of N. Las Vegas, 181 P.3d 670 (Nev.2008)).(emphasis added).

Particular pleading

NRCP 9(b) requires that special matters (fraud, mistake, or condition of the mind), be pleaded with particularity in order to *473 afford adequate notice to the opposing party.
Ivory Ranch, Inc. v. Quinn River Ranch, Inc., 101 Nev. 471, 73, 705 P.2d 673 (Nev. 1985).

Particular pleading

NRCP 8(a) requires that a pleading contain only a short and plain statement showing that the pleader is entitled to relief. In actions involving fraud, the circumstances of the fraud are required by NRCP 9(b) to be stated with particularity. The circumstances that must be detailed include averments to the time, the place, the identity of the parties involved, and the *584 nature of the fraud or mistake. 5 Wright and Miller, Federal Practice and Procedure s 1297 at p. 403 (1969). Malice, intent, knowledge and other conditions of the mind of a person may be averred generally. NRCP 9(b); see Occhiuto v. Occhiuto, 97 Nev. 143, 625 P.2d 568 (1981).

Brown v. Kellar, 97 Nev. 582, 584, 636 P.2d 874 (Nev. 1981).

Damages

Damages must have been proximately caused by the reliance and must be reasonably foreseeable

“with respect to the damage element, this court has concluded that the damages alleged must be proximately caused by reliance on the original misrepresentation or omission. Collins, 103 Nev. at 399, 741 P.2d at 822 (determining that an award of damages for intentional misrepresentation based on losses suffered solely due to a recession was inappropriate). Proximate cause limits liability to foreseeable consequences that are reasonably connected to both the defendant’s misrepresentation or omission and the harm that the misrepresentation or omission created. See Goodrich & Pennington v. J.R. Woolard, 120 Nev. 777, 784, 101 P.3d 792, 797 (2004); Dow Chemical Co. v. Mahlum, 114 Nev. 1468, 1481, 970 P.2d 98, 107 (1998).” Nelson v. Heer, 123 Nev. 26, 426, 163 P.3d 420 (2007).

“Chen’s skill in playing blackjack, rather than his misrepresentation of identity, was the proximate cause of his winnings. The false identification allowed Chen to receive $44,000 in chips, but it did not cause Chen to win. Thus, we hold that the Gaming Control Board’s determination that Chen committed fraud is contrary to law because the Monte Carlo did not establish all of the elements of fraud.” Chen v. Nev. State Gaming Control Bd., 116 Nev. 282, 285, 994 P.2d 1151, 1152 (2000).

“Appellants contend they should recover all their losses throughout the life of the business. We cannot agree. The district court found subsequent operating losses were solely due to a recession that devastated the Carson City area in the early 1980’s. The trial court’s determination of a question of fact will not be disturbed unless clearly erroneous or not based on substantial evidence. Ivory Ranch v. Quinn River Ranch, 101 Nev. 471, 472, 705 P.2d 673, 675 (1985); NRCP 52(a).

Since there is substantial evidence in the record indicating a severe economic recession in the period following the sale of the store, we will not disturb the district court’s finding that the economic climate caused subsequent losses. Collins v. Burns, 103 Nev. 394, 399, 741 P.2d 819, 822 (1987).

Defenses

‘As a general rule, it is not sufficient to charge a fraud upon information and belief (and here there is not even an allegation of ‘information’) without giving the ground upon which the belief rests or stating some fact from which the court can infer that the belief is well founded.’ Bancroft Code Pleading, Vol. 1, page 79. See also-Dowling v. Spring Valley Water Co., 174 Cal. 218, 162 P. 894.
Tallman v. First Nat. Bank of Nev., 66 Nev. 248, 259, 208 P.2d 302, 307 (Nev. 1949).

Misrepresentations may be implied

“a defendant may be found liable for misrepresentation even when the defendant does not make an express misrepresentation, but instead makes a representation which is misleading because it partially suppresses or conceals information. See American Trust Co. v. California W. States Life Ins. Co., 15 Cal.2d 42, 98 P.2d 497, 508 (1940). See also Northern Nev. Mobile Home v. Penrod, 96 Nev. 394, 610 P.2d 724 (1980); Holland Rlty. v. Nev. Real Est. Comm’n, 84 Nev. 91, 436 P.2d 422 (1968).” Epperson v. Roloff, 102 Nev. 206, 212–13, 719 P.2d 799, 803 (1986).

False statement may be conveyed through an agent

“a party may be held liable for misrepresentation where he communicates misinformation to his agent, intending or having reason to believe that the agent would communicate the misinformation to a third party. See generally W. Prosser, supra, § 107 at 703; Restatement (Second) of Torts, § 533 (1977).” Epperson v. Roloff, 102 Nev. 206, 212, 719 P.2d 799, 803 (1986).

There is a duty to disclose where the defendant alone has knowledge of material facts not accessible to the plaintiff

“Finally, with regard to the leakage problem, respondents argue that no affirmative representation was ever made that the house was free of leaks. At least implicitly, they argue that an action in deceit will not lie for nondisclosure. This has, indeed, been described as the general rule. Seediscussion, W. Prosser, supra, § 106, at 695-97. An exception to the rule exists, however, where the defendant alone has knowledge of material facts which are not accessible to the plaintiff. Under such circumstances, there is a duty of disclosure. Thus, in Herzog v. Capital Co., supra, the court upheld a jury’s award of damages to the purchaser of a leaky house, holding under the circumstances of that case, that the jury correctly found that the vendor had a duty to reveal ‘the hidden and material facts’ pertaining to the leakage problem. Id. at 10. In numerous other cases, involving analogous facts, a jury’s finding of a duty of disclosure has been upheld. See, e.g., Barder v. McClung, 93 Cal.App.2d 692, 209 P.2d 808 (1949) (vendor failed to disclose fact that part of house violated city zoning ordinances); Rothstein v. Janss Inv. Corporation, 45 Cal.App.2d 64, 113 P.2d 465 (1941) (vendor failed to disclose fact that land was filled ground).” Epperson v. Roloff, 102 Nev. 206, 213, 719 P.2d 799, 803–804 (1986).

Intent to Induce the Plaintiff to Act or Refrain from Acting

The intent to defraud must exist at the time the promise is made.

“The mere failure to fulfill a promise or perform in the future, however, will not give rise to a fraud claim absent evidence that the promisor had no intention to perform at the time the promise was made. Webb v. Clark, 274 Or. 387, 546 P.2d 1078 (1976).” Bulbman, Inc. v. Nev. Bell, 108 Nev. 105, 112, 825 P.2d 588, 592 (1992).

“Intent must be specifically alleged.” Jordan v. State ex rel. Dep’t of Motor Vehicles & Pub. Safety, 121 Nev. 44, 75, 110 P.3d 30, 51 (2005); see also Tahoe Village Homeowners v. Douglas Co., 106 Nev. 660, 663, 799 P.2d 556, 558 (1990) (upholding the dismissal of an intentional tort complaint that failed to allege intent).

‘[F]raud is not established by showing parol agreements at variance with a written instrument and there is no inference of a fraudulent intent not to perform from the mere fact that a promise made is subsequently not performed. 24 Am.Jur. 107; 23 Am.Jur. 888.” Tallman v. First Nat’l Bank of Nev., 66 Nev. 248, 259, 208 P.2d 302, 307 (1949).

“It is only when independent facts constituting fraud are first proven that parol evidence is admissible. ‘Our conception of the rule which permits parol evidence of fraud to establish the invalidity of the instrument is that it must tend to establish some independent fact or representation, some fraud in the procurement of the instrument, or some breach of confidence concerning its use, and not a promise directly at variance with the promise of the writing. We find apt language in Towner v. Lucas’ Ex’r, 54 Va. (13 Grat.) 705, 716, in which to express our conviction: ‘It is reasoning in a circle, to argue that fraud is made out, when it is shown by oral testimony that the obligee contemporaneously with the execution of a bond promised not to enforce it. Such a principle would nullify the rule: for conceding that such an agreement is proved, or any other contradicting the written instrument, the party seeking to enforce the written agreement according to its terms, would always be guilty of fraud. The true question is, Was there any such agreement? And this can only be established by legitimate testimony. For reasons founded in wisdom and to prevent frauds and perjuries, the rules of the common law exclude such oral testimony of the alleged agreement; and as it cannot be proved by legal evidence, the agreement itself in legal contemplation cannot be regarded as existing in fact. Neither a court of law or of equity can act upon the hypothesis of fraud where there is no legal proof of it.’’ Bank of America Nat. Trust & Savings Ass’s v. Pendergrass, 4 Cal.2d 258, 48 P.2d 659, 661.” Tallman v. First Nat’l Bank of Nev., 66 Nev. 248, 258–59, 208 P.2d 302, 307 (1949).

Justifiable Reliance

The false representation must have played a material and substantial role in the plaintiff’s decisionmaking, and made him make a decision he would not otherwise have made.

“In order to establish justifiable reliance, the plaintiff is required to show the following:’The false representation must have played a material and substantial part in leading the plaintiff to adopt his particular course; and when he was unaware of it at the time that he acted, or it is clear that he was not in any way influenced by it, and would have done the same thing without it for other reasons, his loss is not attributed to the defendant.’ Lubbe v. Barba, 91 Nev. 596, 600, 540 P.2d 115, 118 (1975) (quoting Prosser, Law of Torts, 714 (4th ed. 1971)) (emphasis added).” Blanchard v. Blanchard, 108 Nev. 908, 911, 839 P.2d 1320, 1322 (1992).

If the plaintiff made independent investigations and discovered facts that he is now claiming the defendant disclosed, he cannot be said to have justifiably relied on any of the defendant’s statements.

“Generally, a plaintiff making ‘an independent investigation will be charged with knowledge of facts which reasonable diligence would have disclosed. Such a plaintiff is deemed to have relied on his own judgment and not on the defendant’s representations.’ Id. at 211, 719 P.2d at 803 (citingFreeman v. Soukup, 70 Nev. 198, 265 P.2d 207 (1953)). However, we also recognize that ‘an independent investigation will not preclude reliance where the falsity of the defendant’s statements is not apparent from the inspection, where the plaintiff is not competent to judge the facts without expert assistance, or where the defendant has superior knowledge about the matter in issue.’ Id. 102 Nev. at 211-12, 719 P.2d at 803 (emphasis added) (citations omitted).” Blanchard v. Blanchard, 108 Nev. 908, 912, 839 P.2d 1320, 1323 (1992).

Where falsity of defendant’s statements is not apparent from the inspection, the plaintiff will not be charged with this knowledge.

“We have previously held that a plaintiff who makes an independent investigation will be charged with knowledge of facts which reasonable diligence would have disclosed. Such a plaintiff is deemed to have relied on his own judgment and not on the defendant’s representations. See Freeman v. Soukup, 70 Nev. 198, 265 P.2d 207 (1953). Nevertheless, an independent investigation will not preclude reliance where the falsity of the defendant’s statements is not apparent from the inspection, where the plaintiff is not competent to judge the facts without expert assistance, or where the defendant has superior knowledge about the matter in issue. See Stanley v. Limberys, 74 Nev. 109, 323 P.2d 925 (1958); Bagdasarian v. Gragnon, 31 Cal.2d 744, 192 P.2d 935 (1948).” Epperson v. Roloff, 102 Nev. 206, 211–12, 719 P.2d 799, 803 (1986).

There is only a duty to investigate where there are red flags–where the hidden information is patent and obvious, and when the buyer and seller have equal opportunities of knowledge.

“Lack of justifiable reliance bars recovery in an action at law for damages for the tort of deceit. Pacific Maxon, Inc. v. Wilson, 96 Nev. 867, 870, 619 P.2d 816, 818 (1980). However, this principle does not impose a duty to investigate absent any facts to alert the defrauded party his reliance is unreasonable. Sippy v. Cristich, 4 Kan.App.2d 511, 609 P.2d 204, 208 (1980). The test is whether the recipient has information which would serve as a danger signal and a red light to any normal person of his intelligence and experience. Id. It has long been the rule in this jurisdiction that the maxim of caveat emptor only applies when the defect is patent and obvious, and when the buyer and seller have equal opportunities of knowledge. Fishback v. Miller, 15 Nev. 428, 440 (1880). Otherwise, a contracting party has a right to rely on an express statement of existing fact, the truth of which is known to the party making the representation and unknown to the other party. Id. The recipient of the statement is under no obligation to investigate and verify the statement. Id.” Collins v. Burns, 103 Nev. 394, 397, 741 P.2d 819, 821 (1987).

Successful Appeal Guidelines For Wrongful Foreclosure

18 Wednesday Dec 2013

Posted by BNG in Appeal, Discovery Strategies, Federal Court, Judicial States, Litigation Strategies, Non-Judicial States, Pleadings, Pro Se Litigation, Trial Strategies, Your Legal Rights

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Appeal, Appellate court, Jury instructions, Law, Motion (legal), Oral argument in the United States, Services, Trial court

In the heat of battle at trial, it can be challenging to remember that the legal war may not end with the trial court’s judgment. The final victory ultimately may depend upon the record created and preserved for appeal. Here are ten important guide to help ensure that your case is appealable—and “appealing”—to a reviewing court.

1: Make an appellate battle plan. Start by preparing a thorough written analysis of the legal theories at issue in your case. Be certain to include the elements of each cause of action and defense you plan to allege, and of those you anticipate your opponent will raise. Include all applicable standards and burdens of proof for getting to the jury (such as requiring expert testimony on the standard of care). As you analyze, consider whether your case presents any potential constitutional claims. Constitutional issues are of keen interest to appellate courts, and presenting interesting constitutional arguments may increase the chances for a grant of discretionary review or of oral argument on appeal.

2: As the battle begins, begin building the record. If it’s not in the record, it didn’t happen. There is nothing more important to an appeal than ensuring that there is an adequate record to present to the appellate court. The trial record is all that the appellate court may consider when deciding appellate issues. As you move into the pretrial and trial phases, you must make sure that all issues are presented to the trial court, that error is preserved, and that harm from the error is shown on the appellate record. The court of appeals is not the place to try to perfect the trial record: Almost every appellate argument must first be raised in the trial court to be preserved for appeal. This means you must be thorough in your writings to the court and ensure the record is complete, clean, and comprehensive.

3: Aim, fire, and engage with an appeal in mind. Because your pleadings will prescribe the universe of substantive issues to be tried—and ultimately to be considered on appeal—plead properly and well. In federal court, make sure the Rule 16 pretrial order properly states all your claims and defenses. Because the pretrial order supersedes the pleadings and controls the subsequent course of the action, Rule 16 may bar review of an issue that was omitted from the pretrial order. Check your pleadings and pretrial order against your battle plan analysis and draft charge to make sure nothing is waived. Remain mindful of record preservation as you begin to narrow the battlefield through discovery, pretrial motions, and hearings. The history of all pretrial skirmishes will be told at the appellate level only through the record, and you might be relying on these early rulings to establish reversible error.

4: Tell a clear and compelling story . . . on the record. Once you are in trial, you (properly) will be thinking about the story that is unfolding in front of the jury. However, you must also be aware that the record will have to tell a story to the appellate court as well. As you move through pretrial and trial, look ahead to the statement of facts on appeal. Because the appellate court will view your case only through the cold record, the statement of facts is a critically important section of an appellate brief: It must tell a coherent tale, preferably an interesting one. So plan your presentation of evidence at trial so that you will have fully fleshed out facts on appeal. There is nothing more tedious in preparing an appellate brief than searching the record for that one small—but now essential— fact that you are certain was mentioned somewhere, sometime.

5: Make good objections and get a ruling . . . on the record. Here are the four saddest words you can hear from an appellate court: “Great argument; not preserved.” To preserve the issue for appeal, you must raise an objection, ask for a cure, and secure a ruling. You must ensure that the trial record accurately reflects timely, meaningful objections, made on clearly stated grounds and followed by a ruling by the court (or a clear request to rule). Pay attention to the timeliness of your objections. Generally, the objection must be made as soon as the objectionable situation arises. Timing is key: A premature or late objection is like no objection and does not preserve error. When in doubt, object. If an aligned co‑party is making the objection, motion, or request, and you want to join, be sure that the record shows it. If you end up being the only appellant, you will want the benefit of the other party’s objections. And here’s a cautionary note: A key record-preservation mistake is “inviting error” by relying upon evidence that you have objected to at trial.

6: Keep the record complete. To present your case fully on appeal—and to preserve clearly an error for review—you must be sure that the appellate record be complete, reflecting all substantive issues argued, any complaint about error and its preservation, and the harm that error caused. o begin, make sure the clerk has filed all your pleadings and motions, as well as all orders, the jury verdict, and the judgment. Get a file-marked copy for your file. Ensure that exhibits are actually admitted into evidence or made part of the record as excluded. Exhibits that are merely marked and offered are not part of the record on appeal. If the trial court excludes an exhibit, ask the court to admit the document as a “court exhibit” so you can show the appellate court what was excluded in order to obtain reversal on appeal. An erroneous exclusion of any other type of evidence likewise is generally not reviewable on appeal unless the proponent makes an adequate offer of proof. Keep your own list of all exhibits as they are offered into evidence, indicating what has and has not been admitted. If you go off the record for conversation and sidebar discussions, make sure you request to be put back on the record when ready. Also, make sure you memorialize any requests and rulings that occurred off the record when you go back on. Particularly, make sure the court reporter is recording your objections, and see to it that the court reporter’s fingers are moving when you want what is being said to be on the record.

7: Keep the record clean. Correct any misstatement of the court or opposing counsel immediately—these can come back to haunt you on appeal. Also, take remedial measures to clean up prejudicial evidence in the record and preserve the error if it remains: a motion for mistrial (if prejudicial evidence is before the jury), a motion to strike (if evidence that should not be in the record finds its way into the record), or a request for curative instructions to the jury (if the court denies either of the other two motions). Let the court know if these instructions are insufficient, and object if denied.

8: Craft the perfect jury charge and preserve objections to the court’s imperfect one. Many appellate issues arise from the court’s instruction to the jury. As a result, error in the court’s charge is among the most likely sources of reversible error on appeal. Generally, parties are presumed to have consented to erroneous submissions in the absence of an objection by either party, and a party cannot claim error in the court’s failure to give a particular instruction if the party did not request that instruction. Similarly, a party cannot claim that a correct jury instruction was too general or incomplete unless it requested a clarifying instruction. Questions, instructions, and definitions submitted to the jury are restricted to those raised by the written pleadings and the evidence—an opponent’s proposed submission of an unpleaded theory of recovery or affirmative defense should be the subject of an objection. Specificity in objections is the key to preserving arguments about charge error: A party objecting to a charge must point out distinctly the objectionable matter and the grounds of the objection. To avoid waiving complaints of harmful charge error, be certain to make all objections to the charge on the record (even if those objections have been thoroughly discussed in an informal, off-the-record charge conference). Object before the charge is read to the jury and be sure to obtain rulings on the record to all oral objections to the charge. Another cautionary note: An appellant cannot complain about an error that it created or invited. A classic example of “invited” error is an erroneous jury instruction that an appellant requested—parties may not request a submission and then object to it.

9: What is the best way to set the stage for a successful appeal? Win at trial and be the appellee! One exception to this rule is to be the appellant if you have a default judgment.

10: Preserve appellate arguments post-trial, and prepare for attack on the appellate front. Preservation of the record after verdict and judgment is critical to an effective appeal. It is essential that post‑trial motions be carefully drafted to preserve appellate arguments. These motions include motions for judgment, motions for judgment notwithstanding the verdict, motions to disregard certain parts of the jury’s verdict, motions for new trial, and motions to modify, correct, or reform the judgment. If your trial was before the court rather than a jury, carefully follow your jurisdiction’s rules for preserving appellate complaints about the court’s findings of fact and conclusions of law. Also, be mindful of time limitations for filing post-trial motions. In both state and federal courts, generally a narrow window exists to take this important step on the way to appeal.

Legal issues, which are reviewed de novo, have better odds for reversal than fact issues, which will be reviewed more deferentially. And post-trial motions are a good time for losing parties to find constitutional issues, which may help you obtain discretionary review in higher-level appellate courts as well as improve your chances for a grant of oral argument.

Victory in litigation is often elusive—a win in the trial court can become a loss on appeal, and vice versa. Every homeowner involved in a wrongful foreclosure lawsuit must focus not only on the trial but also on the possibility of appeal. This requires early planning and constant vigilance.

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What Documents are Required to File a Motion for Summary Judgment?

Filing an Opposition to a Motion for Summary Judgment

What Happens after the Court Receives the Motion for Summary Judgment and Response?

Getting Further Help With Summary Judgment

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Getting the Bond Requirement Waived

Consider Recording a Lis Pendens

Due Process Suffers in Nonjudicial Foreclosures

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Right to Appeal

Final Decision

Grounds

Time of Appeal

Notice of Appeal

Bonds

Record on Appeal

Assignment of Errors

Appellate Brief

Review

Hearing

Determination

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II. FRAUD

A. Rules for Pleading Fraud

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Proof

False Representations:

Pleading Standards

Damages

Defenses

Intent to Induce the Plaintiff to Act or Refrain from Acting

Justifiable Reliance

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