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IN THE COURT OF APPEALS OF OHIO SECOND APPELLATE DIVISION
Wells Fargo Bank NA. as Trustee for Securitized C.A. CaseNo.
023136 Asset Backed ecei!a"les ##C 2006$%&1
'ortgage &ass$T(roug( Certi)cates*Series 2006
%&1&lainti+*
!. ,o(n A. eed* et al.
-efendant
DEFENDANTS MOTION TO VACATE
No co/es -efendant ,o(n A. eed -efendant * for t(is
/otion to !acate t(is Court s No!e/"er 13 t( 200 4udg/ent
entr5 granting &lainti+ Wells Fargo Bank NA. as Trustee
for
Securitized Asset Backed ecei!a"les ##C 2006$%&1
'ortgage
&ass$T(roug( Certi)cates* Series 2006 %&1 &lainti+7
/otion
of 4udg/ent on t(e "asis of t(e State of %(io s Su8re/e Court
s
%cto"er 31* 2012 (olding in Federal 9o/e #oan 'ortgage
Cor8oration !. Sc( artz ald* 2012$%(io$:01;.
Respectfully submitted
!!!!!!!!!!!!!!!!!!!!!!!!
"#$% A& Reed
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SERVICE
A t'ue (%d e)(ct c#py #f t$e f#'e*#i%* $(s bee% se'+edt$is ,- t$
d(y #f Au*ust ./,/ +i( em(il (s f#ll#0s1
Atty2s f#' Pl(i%ti3
A/elia A. Bo er 0013an Sl5ke 00;;;21300 ?ast Broad St.* Suite
:=0Colu/"us* %(io ia e/ail @ (b#0e'4plu%5ettc##%ey&c#m And
d+(%sly5e4plu%5ettc##%ey&c#m
and
Sara '. &eters/ann 00::
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I%t'#duct#'y St(teme%t
As an initial /atter* -efendant freel5 ackno ledges t(at
&lainti+ )led t(is la suit in 200 * and /uc( litigation (as
since
ensued* including an a88eal and /otion for relief fro/
4udg/ent
8ursuant to Ci!. . 60 B . T(is does not* (o e!er* c(ange t(efact
t(at t(e Court did not (a!e 4urisdiction to (ear t(is /atter
on Fe"ruar5 2; t( * 200 * t(e date &lainti+ )led t(e
foreclosure
co/8laint* or at an5 8oint t(ereafter* it(out &lainti+
(a!ing
7'st "een assigned or ot(er ise "een legall5 !ested as t(e
true
9older in -ue Course of t(e note /ortgage in Huestion.
-efendant su"/its t(at &lainti+ is and as not.
Since t(e foreclosing "ank relied on an after$acHuired
interest in t(e note and /ortgage to esta"lis( its rig(t to
enforce t(e agree/ents* t(en D 'o!e t(e Court to !acate t(e
4udg/ent. D need not 8roceed under Ci!. . 60 B "ecause t(e
4udg/ent is !oid. T(e Sc( artz ald decision states t(at
standing (as to e ist at t(e ti/e t(e case is )led* and if
it
doesn t e ist* t(e 4urisdiction of t(e co//on 8leas court as
notin!oked. A court it(out 4urisdiction cannot enter an5
4udg/ent
e ce8t one dis/issing t(e case for lack of 4urisdiction . A
/otion to !acate a !oid as o88osed to a !oida"le 4udg/ent is
not "ased on Ci!. . 60 B * it in!okes t(e court s in(erent 8o
er.
&atton !. -ie/er* 3: %(io St. 3d 6 1= .
WFB* according to t(e "inding case la in t(e State of
%(io and 'ontgo/er5 Count5* as not entitled to 4udg/ent as a
/atter of la . T(e 4udg/ent is !oid a" initio. es 4udicata
cannot "e a "ar to 4udg/ent t(at is !oid a" initio.
3
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I& Rele+(%t F(ctu(l 8(c5*'#u%d
,&O% Feb'u('y .9 t$ .//: ; E)& Pl(i%ti3 7led
t$ef#'ecl#su'e c#mpl(i%t i% t$is (cti#%&
2. As of 'arc( 6 t( * 200 t(e note /ortgage at issue (adnot "een
assigned fro/ (oe!er t(e 8re!ious
(olderIo ner as* to &lainti+ (erein.
3. %n August 26 t( * 200 &lainti+ )led a Notice of
Assign/ent of 'ortgage (ic( contains t(erein also an
Assign/ent of Note ? ( C7 * (ic( contained a co85
of a recorded assign/ent of -efendant s note
/ortgage to &lainti+. T(e Assign/ent*7 attac(ed(ereto as ?
(. B7 .
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II& L(0 (%d A'*ume%t
T(ere are /ore issues it( t(e 8ost dated assign/ent
t(an 4ust t(ose addressed in t(e Sc( artz ald -ecision.
T$e POST DATED ASSI?NMENT issue @ ,&
As is e!idenced in &lainti+ s alleged Assign/ent7 fro/
%8tion %ne 'ortgage Cor8. to T(e Trust7 t(e date of t(e
transference or Assign/ent7 of "ot( t(e Note 'ortgage did
not occur until after t(e suit to foreclose (ad alread5 "een
)led.
Dn Federal Home Loan Mortgage Corporation v.Schwarzwald, et al.
* a case recentl5 decided "5 t(e%(io Su8re/e Court* 8lainti+ "ank
"roug(t aforeclosure la suit "efore it o"tained an assign/ent
of/ortgage securing defendant (o/eo ner s loan.-efendants
/aintained t(at 8lainti+ lacked standing tosue /uc( as -efendant
8re!iousl5 contended in t(iscase "ecause t(e assign/ent of /ortgage
(ad not"een recorded 8rior to t(e )ling of t(e la suit.
&lainti+
as assigned t(e /ortgage !ia for/al assign/ent* as
(ere* onl5 (fte' t(e )ling of t(e la suit. T(e trial
courtentered a 4udg/ent in fa!or of 8lainti+* and t(e
Second-istrict Court of A88eals a+ir/ed.
T(e Su8re/e Court re!ersed* (olding t(at standingis a
4urisdictional reHuire/ent t(at /ust "e satis)ed toe!en initiate a
foreclosure la suitK
e 'ec#*%iBed t$(t st(%di%* is (u'isdicti#%(l 'e ui'eme%t2 i%
State ex rel.
Dallman v. Franklin Cty. Court of Common PleasWells Fargo v.
Burrows , 20126O(io65 5 t( 'ist)4 A plaintiff must atta ( do uments
e%iden ing t(e rig(tto enfor e !ot( t(e note and t(e mortgage to
t(e omplaint to s(o. standing, or !e su!9e t to dismissal)4
HSBC Bank USA !.A. v. Sherman , 20136O(io6 220 1st 'ist)4
'etermination of standing s(ould !e made !ased on atta (ments to a
omplaint, !ut standing in a fore losure a tion an !e esta!lis(ed !y
s(o.ing t(erig(t to enfor e eit(er t(e note or mortgage) Also
adopted in t(e Se ond, ift(, le%ent(, and :.elft('istri ts)4
Lu"an v. #e$enders o$ W%ldl%$e, 50 /)S) 555 1 24 :o sur%i%e a
motion for summary 9udgment for la ofstanding, a party must set
fort( !y affida%it or ot(er e%iden e spe ifi fa ts to support its
laim)4
5
http://www.supremecourt.ohio.gov/rod/docs/pdf/9/2012/2012-ohio-5995.pdfhttp://www.supremecourt.ohio.gov/rod/docs/pdf/9/2012/2012-ohio-5995.pdfhttp://www.supremecourt.ohio.gov/rod/docs/pdf/1/2013/2013-ohio-4220.pdfhttp://www.supremecourt.ohio.gov/rod/docs/pdf/1/2013/2013-ohio-4220.pdfhttp://scholar.google.com/scholar_case?case=10150124802357408838&q=504+U.S.+555&hl=en&as_sdt=6,36http://scholar.google.com/scholar_case?case=10150124802357408838&q=504+U.S.+555&hl=en&as_sdt=6,36http://www.supremecourt.ohio.gov/rod/docs/pdf/9/2012/2012-ohio-5995.pdfhttp://www.supremecourt.ohio.gov/rod/docs/pdf/1/2013/2013-ohio-4220.pdfhttp://scholar.google.com/scholar_case?case=10150124802357408838&q=504+U.S.+555&hl=en&as_sdt=6,36
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;, 9G> G O$i# St& .d ,9- (%d 0e st(ted1 &
(Schwarzwald, (tt(c$ed $e'et# (s E)$&
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HISTOR (s (lle*ed by Pl(i%ti3&
&lainti+ "roug(t t(is action to foreclose on an alleged
/ortgage* dated ,une =t(* 200:* (ic( secured an alleged loan
of L100*000 issued to t(e -efendant "5 9 Block 'ortgage
Cor8oration* a 'assac(usetts Cor8oration7* 9 B7 . %n ,une
=t(* 200:* 9 B assigned t(e note and /ortgage to %8tion %ne
'ortgage Cor8oration* %8tion %ne7 . %8tion %ne t(en alleges
to (a!e assigned t(e note and /ortgage to &lainti+ "5
assign/ent e ecuted 'arc( ;t(* 200 . &lainti+ is t(e
de"t
collector trustee for a securitized trust entitled
Securitized
Asset Backed ecei!a"les ##C 2006$%&1 'ortgage &ass$
T(roug( Certi)cates* Series 2006 %&17* t(e Trust7 .
HISTOR (s (lle*ed by t$e EVIDENCE
&lainti+ "roug(t t(is action to foreclose on an alleged
/ortgage* dated ,une =t(* 200:* (ic( secured an alleged loan
of L100*000 issued to t(e -efendant "5 9 Block 'ortgage
Cor8oration* a 'assac(usetts Cor8oration7* 9 B7 .
%n ,une =t(* 200:* 9 B ?ntit5 A assigned all of t(eir
rig(ts to t(e note and /ortgage to %8tion %ne 'ortgage
Cor8oration ?ntit5 B * %8tion %ne7 .
%8tion %ne t(en assignsIsellsItransfers 3 all of t(eir
rig(ts
to t(e N%T? 'ortgage to Barcla5s Bank ?ntit5 C S8onsor
(o t(en "undles t(e Note 'ortgage along it(
a88ro i/atel5 :*000 ot(er like kind in!est/ents and uses t(e
3 As .it( almost all of Plaintiff;s do ument su!missions, t(e do
uments Plaintiff su!mits t(at areto !e representati%e of t(e
transfer of t(e $ote < Mortgage from Option One to =ar lay;s
=anare all unsigned and unaut(enti ated so no >true? met(od of
transfer is e%en represented) =/:, t(e
ontrolling -a. @"S < $ ) P:-4 !ot( re uire full sales and
transfer of all rig(ts and o.ners(ip !efore a true se uritiBation
of t(e notes and mortgages into t(e trust an eCist and t(e
:rust;s
ontrolling do ument, t(e PSA also mandates a omplete e%identiary
trail of all transfers andDorassignments of !ot( t(e note and
mortgage !efore !eing allo.ed to !e deposited into t(e trust)
7
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entire "undle to create a ne )nancial instru/ent called a
S8ecial &ur8ose >e(icle S&> * (ic( is designed to
"e
de8osited into a ?'DC Trust.
Barcla5s Bank ?ntit5 C t(en sells < and transfers all of
t(eir rig(ts to t(e contents of t(e S&> containing
-efendants
alleged Note 'ortgage to t(e securitized trust s -e8ositor*
:
Securitized Asset Backed ecei!a"les ##C7 ?ntit5 - SAB 7
(o t(en de8osits and transfers all of t(eir rig(ts t(e notes
and
/ortgages in t(e S&> 6 to t(e Trust7 ?ntit5 ? . ;
%8tion %ne ?ntit5 B t(en alleges to (a!e assigned t(e
note and /ortgage to &lainti+ ?ntit5 ? "5 assign/ente ecuted
'arc( ;t(* 200 .
&lainti+ is t(e de"t collector trustee for a securitized
trust
entitled Securitized Asset Backed ecei!a"les ##C
2006$%&1
'ortgage &ass$T(roug( Certi)cates* Series 2006 %&17*
t(e
Trust7 .
AR?UMENT
T(e lack of 8ro8er transfers A M B* B M C* C M - and - M ?
and in fact* i/8ro8er transfers as in t(e case at Bar (ere
&lainti+ s Assign/ent e 8resses transfer fro/ ?ntit5 B to ?
* to
ot(ers creates a series of docu/ent defects and de)ciencies
t(at include* "ut are not li/ited to t(e follo ingK
a Broken endorse/ent c(ains A M B* B M C* - M ? J" %riginal
Notes it(out signatures on endorse/entsJ
Same as ootnote 3 a!o%eE no signed or aut(enti ated ontra t)5
Same as ootnote 3 a!o%eE no signed or aut(enti ated ontra t)+ Same
as ootnote 3 a!o%eE no signed or aut(enti ated ontra t)7 @t is
important (ere to note t(at in ea ( transa tion listed a!o%e,
Plaintiff also produ es nore eipts, no deli%ery a eptan e, not(ing
.(atsoe%er to s(o. proof of on%eyan e or transfer ornegotiation or
sale of, in t(e end, an alleged F5 =illion .ort( of finan ial
instruments from any
party to any ot(er party .(atsoe%er)
8
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c Notes it( ski88ing endorse/entsJ
d Notes it( endorse/ents on unattac(ed allongesJ
e Allonges unattac(ed to t(eir original et$ink notesJf Allonges
co8ies and taken fro/ ot(er notes and 8laced
onto a di+erent note Jg Allonges unattac(ed to original notes
it( "lankendorse/entsJ
( Notes ne!er endorsedJ
i Allonges ne!er datedJ
4 Allonges in "lank and 8re$e ecuted and undated forlater
)ll$ins "5 unkno n 8artiesJ
k -ou"le 8ledges of t(e sa/e note andIor loan todi+erent
8artiesJ
l &ost$dated assign/ents of /ortgages and notesJ
/ o"o$signed assign/ents of /ortgages and notesJ
n &ost$dated assign/ents of /ortgages and notesJ
o Assign/ents e ecuted it( no la ful aut(orit5J
8 Assignors assigning to t(e/sel!esJ
H T o di+erent 8arties clai/ing t(e o ners(i8 of t(esa/e
noteIloan.
Dn t(e case at Bar* it is t(e Trustee for t(e Trust7 t(at is
"ringing t(e foreclosure suit. &lainti+ Trustee o+ers no
8roof of
an5 transfer of an5 o ners(i8* or rig(ts or aut(orit5 fro/
t(e
Trust to t(e Trustee ofIor 8ertaining to t(e Note andIor t(e
'ortgage.
Wit(in t(e &SA at section 3.1: e also )nd t(at "5
contractual agree/ent it is not t(e Trustee s 8osition to
engage
in an5 foreclosing acti!ities* it is instead t(e Ser!icer s7
o"ligation. Setion 3.1: readsK
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Section 3.15 Realization upon Defaulted Mortgage Loans. >:(e
Servicer s(all useits !est efforts, onsistent .it( A epted Ser%i
ing Pra ti es, to fore lose upon orot(er.ise ompara!ly on%ert .(i (
may in lude an a uisition of " O Property4 t(eo.ners(ip of
properties se uring su ( of t(e Mortgage -oans as ome into and
ontinuein defaultE? emphas%s m%ne
Again* lacking a 8ro8er Assign/ent of t(e Note andIor
/ortgage t(at is t(e su"4ect of t(is action* and lacking
an5aut(orit5 gi!en "5 t(e trust s go!erning docu/ent* t(e
&SA*
&lainti+ Trustee lacked t(e ca8acit5 to in!oke t(e
4urisdiction
of t(is court.
Standing is a t(res(old issue. Wit(out standing to in!oke*
no furt(er /utterings or 8rotestations of t(e &lainti+ can
"e
(eard for t(e5 are /oot.
THE TRUST
T(e Trust as for/ed as a !e(icle for 8urc(asing
/ortgage "acked securities. T(e Trust is su"4ect to t(e ter/s
of
t(e trust indenture controlling docu/ent /e/orialized in a
docu/ent titled t(e &ooling and Ser!icing Agree/ent7*
t(e
&SA7 . T(e &SA as signed "5 t(e -e8ositor* Securitized
Asset
Backed ecei!a"les ##C SAB 7 * "5 t(e Ser!icer* %8tion %ne*
and "5 t(e Trustee* W?##S FA % BAN * NA* and is dated
,anuar5 1* 2006.
T(e &SA sets fort( t(e /anner in (ic( /ortgages ould
"e 8urc(ased "5 t(e trust* as ell as t(e duties of t(e
trustee
and t(e ser!icer. Dt is t(e trust s o n controlling
docu/ent.
Section 2.01* su"section 1 of t(e &SA reHuires t(at
transfer and assign/ent of /ortgages /ust "e e+ected "5 (and
deli!er5* for de8osit it( t(e Trustee it( t(e original note
endorsed in "lank.
10
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Section 2.0: of t(e &SA reHuires t(at t(e -e8ositor
transfer all rig(t* title* interest in t(e /ortgages to t(e
Trustee*
on "e(alf of t(e trust* as of t(e Cl#si%* D(te . T(e Cl#si%*
D(te (s p'#+ided i% t$e PSA is "(%u('y .-t$ .//- .
T(e -ate of t(e Assign/ent of 'ortgage and Note
referenced infra* is o!er 2 5ears 8ast t(e date allo ed for
de8osits into t(e trust. Df t(e trust does not 8erfect legal
title "5
taking 8(5sical 8ossession of t(e notes and /ortgages* t(e
Dnternal e!enue Code* s8eci)call5 .- U&S&C&
:-/?;d>;,> *
8ro!ides for a 100 8ercent ta 8enalt5 on t(ose non$co/8l5ing
cas( o s.
As listed in t(e &SA* t(e -e8ositor in t(e case at Bar
as
Securitized Asset Backed ecei!a"les ##C7 OSAB O . Wit(in
t(e sc(e/a of a securitized 'BS trust* t(e -e8ositor is t(e
necessar5 entit5 in t(e title c(ain t(at 8ro!ides t(e
Bankru8tc5
re/oteness necessar5 to t(e Notes and t(e 'ortgages
de8osited into t(e trust* so t(at t(e trust can gain a AAA
rating
it( t(e securities ratings agencies and to co/8l5 it( D S
rule
60 8) T(e -e8ositor is also t(e designated sole de8ositor to
t(e
trust.
Dn t(e case at Bar* &lainti+ s(o s not 1 iota of 8roof
t(at
said S8onsor* Barcla5s Bank ?ntit5 C * e!er recei!ed
-efendant s Note andIor 'ortgage.
Dn t(e case at Bar* &lainti+ s(o s not 1 iota of 8roof
t(at
said -e8ositor ?ntit5 - e!er recei!ed -efendant s Note
andIor
'ortgage % t(e alleged and 8re!iousl5 allegedl5 created
S&>
fro/ S8nosor Barcla5s Bank containing -efendant s alleged
Note andIor 'ortgage.
11
http://www.law.cornell.edu/uscode/text/26/860Ghttp://www.law.cornell.edu/uscode/text/26/860G
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Dn t(e case at Bar* &lainti+ s(o s not 1 iota of 8roof
t(at
said -e8ositor SAB e!er de8osited t(e alleged 'ortgage and
Note into t(e &lainti+ Trust.
Dn t(e case at Bar* &lainti+ s(o s not 1 iota of 8roof
t(at
said &lainti+ Trust e!er transferred t(e alleged 'ortgage
and
Note to t(e &lainti+ Trust s Trustee* Wells Fargo Bank N.A.
(o
is t(e &lainti+ in t(is case.
But it is essential for t(e courts to understand t(at "efore
t(e alleged note /ortgage could "e 8laced it(in an5 ?'DC
trust* eac( of t(ese ste8s as /andated "5 N.G. ?.&.T.#* D.
.C.
reHuire/ents AN- "5 t(e contractual ter/s found it(in t(e
&SA (ic( as signed and agreed u8on "5 t(e 8artici8ants
of
t(e securitization. T(e rules for t(e de8osit of all of t(e
Notes
'ortgages allegedl5 (eld it(in t(e 8ool of assets o ned "5
t(e
trust are strict and are /andated to "e ad(ered to
8unctiliousl5.
As stated in t(e NGSBA NG Business #a ,ournal P
Su//er 2012 P>ol. 16 PNo. 1 8g. ;;J
>:(e Mortgage Se uritiBation :ransa tion @n 1 8+, #ongress
(anged t(e taCode) One of t(ese (anges .as t(e reation of t(e "eal
state Mortgage
@n%estment #onduit " M@#4) A " M@# or spe ial purpose %e(i le
SP&4 is anentity t(at is reated for t(e spe ifi purpose of
!eing a taC6free pass6t(roug(for interest in ome generated !y
pooled mortgages) :(is allo.ed in%estors to
pur (ase s(ares or ertifi ates in a mortgage pool t(at .as only
taCed on e att(e in%estor le%el) :(e " M@# rules allo.ed t(e
mortgage pools to olle tinterest in ome from t(e pool and dis!urse
t(at in ome to t(e ertifi ate (olderstaC6free at t(e pool le%el)
Prior to t(e " M@#, interest in ome from pooledmortgage in%estments
.ere taCed t.i e, on e at t(e pool le%el and again at t(ein%estor
le%el)
12
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" M@# rules are %ery spe ifi ,8 and to ualify as a " M@# under
federal andstate taC odes, t(e SP& (ad to meet %ery stringent
re uirements) Git( respe tto "M=S t(e ontrolling trust do ument is
no.n as t(e Pooling and Ser%i ingAgreement PSA4) One fun tion of
t(e PSA is to esta!lis( t(e rules go%erningt(e trust su ( t(at t(e
trust;s a ti%ities and management onform to @"# 8+0) @ft(e trust
did not onform, it ould lose its " M@# status and its taC6free
pass6t(roug( status)?
$ S=A $ =usiness -a. Journal HSummer 2012 H&ol) 1+ H$o) 1
pg) 77
T(e Trust s agree/ent kno n as t(e &ooling and
Ser!icing Agree/ent &SA sets fort( in its entiret5 (o
t(e
trust acHuires and is allo ed to acHuire its assets and t(e
Trust
agree/ent sets fort( "ot( 8o ers and t(e li/its of t(e 8o
ers
of t(e Trust.
T(e &SA 10 reHuires t(at eac( 8art5 to t(e sale of t(e
/ortgage loans endorse eac( 8ro/issor5 note to t(e ne t
8art5
in t(e c(ain of title until t(e 8ro/issor5 note is endorsed to
t(e
Trustee for t(e "ene)t of t(e Trust. T(is reHuire/ent is
included in t(e &SA and is found at Section 2.10.
According to t(e reHuire/ents set fort( in t(e Trust
Agree/ent &SA t(ere /ust "e a series of endorse/ents of
t(e8ro/issor5 note re ecti!e of eac( 8art5 (o (ad an o ners(i8
interest in t(e 8ro/issor5 note cul/inating it( a "lank
endorse/ent fro/ t(e de8ositor at t(e !er5 /ini/u/.
8 @"# 8+0 re uires t(at, among ot(er t(ings, t(e " M@# trust !e
a > losed entity? and >!an rupt y remote)? $e. or ;s state
Po.ers < :rust la.s .ere (osen !y "M=S sponsors in t(e PSAs4 as
t(e > ontrolling?statutes to go%ern " M@# trusts, as t(e P:-;s
rules and on omitant ommon la. esta!lis( > ommon la.trusts? t(at
onform t(e " M@# taC free pass6t(roug( re uirements) $ S=A $
=usiness -a. Journal H
Summer 2012 H&ol) 1+ H$o) 1 end note 7 @f a taC6free
pass6t(roug( trust lost its " M@# status, t(e taC penalties to an
in%estor t(at pur (ased
ertifi ates .ould !e de%astating) @t .ould also trigger an e%ent
alled a >put !a )? :(ere .as onsidera!leargument o%er .(et(er
t(ese trusts .ere >!usiness? trusts or ommon la. trusts, !ut t(e
trend appears to !e a
9udi ial re ognition t(at t(ey are in fa t ommon la. trusts) $
S=A $ =usiness -a. Journal HSummer2012 H&ol) 1+ H$o) 1 end note
8
10 :(e :rust;s Pooling and Ser%i ing Agreement is a Pu!li 'o
ument a%aila!le (ereE(ttpIDD...)se info) omDd"Sm+)%8()d)(tm
13
http://www.secinfo.com/dRSm6.v8h.d.htmhttp://www.secinfo.com/dRSm6.v8h.d.htm
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T(is c(ain of endorse/ents* or rat(er t(e lack t(ereof* in
order to co/8l5 it( t(is &SA* ould (a!e (ad to "e
co/8lete
on or "efore t(e closing date7 of t(e trust s8eci)ed it(in
t(e
&SA of t(is securitization "ut in no e!ent /ore t(an =0
da5s
fro/ t(e closing date of t(e trust 8ursuant to section 2.02 a
oft(e &SA. T(e a"sence of t(ese endorse/ents on t(is
8ro/issor5
note is not onl5 !er5 co/8elling 8roof of lack of note
(older
status* "ut also 8roof of &lainti+ s fraud in 8roducing
t(e
Assign/ent of 'ortgage ? (i"it ? 7 (ic( "5 t(e ter/s of t(e
trust s o n go!erning docu/ent &SA cannot and does not
legall5 e ist.
Ender eit(er t(e ter/s of t(e trust* t(e contracts "et een
t(e 8arties or ECC Q = it reHuires t(e c(ain of title "5 t(e
foreclosing entit5 to "e Huali)ed as a &?T?7 8erson entitled
to
enforce . Dn ot(er ords* single endorse/ents in "lank* and
clai/ing t(at an5 8art5 in 8ossession of a note* can enforce
a
note* e!en a t(ief* does not ork.
T(e e!idence in t(e collateral )le s(o s an utter and
co/8lete failure of t(e 8arties to t(is alleged securitization
to
actuall5 con!e5 t(is alleged 8ro/issor5 note to t(is Trust as
as
articulated "5 t(e -efendant in eac( and e!er5 8re!ious
8leading. T(e 8lainti+ Trust (as o+ered no 8roof of o
ners(i8
and t(e collateral )le 8ro+ered "5 t(e &lainti+ t(roug(
-isco!er5 clearl5 de/onstrates t(at t(is loan as not
securitized nor as it e!er transferred to t(is Trust.
T(e Court s(ould also "e a are t(at Sections 2.0; d.* e.*
(.* 3.01 c.* 3.1; ( * :.02* c* .11 of t(e &SA are all
s8eci)c to
t(e case at "ar (ic( set fort( furt(er e 8licit restrictions
on
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t(e 8o ers of t(e Trustee* -e8ositor and t(e Ser!icer of t(e
trust7 and (ic( 8ro(i"its t(e Trustee* -e8ositor and t(e
Ser!icer fro/ taking an5 action (ic( ould 4eo8ardize t(e
?'DC status of t(e Trust. T(ese t58es of li/itations are
co//on and are 8resent in t(is or a si/ilar for/ in e!er58ooling
and ser!icing agree/ent (ic( seeks to create a
securitized trust t(at can clai/ t(e ta "ene)ts of ?'DC
status
under t(e ES Ta Code.
An5 atte/8t to acce8t a transfer of t(is alleged
&ro/issor5 note after t(e ,anuar5 26* 2006* =0 da5 closing
date
of t(e trust ould (a!e !iolated "ot( S?C code
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fort( in t(e &SA to esta"lis( a (ole and co/8lete
c(ain of title of t(e 8ro/issor5 note for t(e 8ur8oses of
"ankru8tc5 re/oteness.
d. Fourt(* T(e clai/ t(at t(e alleged note (as "een
transferred to t(e Trust (en it is endorsed in "lank
si/8l5 ies in t(e face of t(e /andator5 ter/s of t(e
&SA and is an e tre/e de!iation fro/ t(e industr5
standards* custo/s and 8ractices (ic( 8re!ailed at all
ti/es /aterial to t(is transaction and (ic( 8re!ail
toda5.
e. Fift(* an5 transfer allo ed to "e acce8ted into t(etrust 8ast
t(e trust s o n cut$o+ date of de8osits
in!okes t(e rat(er draconian D S /andate of ta ing t(e
?'DC trusts assets not at t(e fa!ora"le rate of 0R
t(at t(e5 no en4o5* "ut at t(e rate of 100R of t(e
!alue of t(eir assets causing* /assi!e )nancial losses
to t(e Certi)cate 9older Dn!estors.
?Huall5* "5 allo ing a -e8osit into t(e trust after t(e
trusts closing date7 as &lainti+ s Assign/ent of
'ortgage7
alleges* &lainti+ Wells Fargo Bank as Trustee again !iolates
t(e
8lain language found it(in t(e &SA at section .11 titled
Ta
'atters section 4 8ara. 6 (ic( reads in 8artJ
$eit(er t(e Ser%i er nor :rustee s(all i4 permit t(e reation of
any interestsin any :rust " M@# ot(er t(an t(e regular and residual
interests set fort( int(e Preliminary Statement,EEE or iii4
ot(er.ise no.ingly orintentionally ta e any a tion, ause t(e :rust
und to ta e any a tion or fail tota e or fail to ause to !e ta
en4any a tion reasona!ly .it(in its ontrol andt(e s ope of duties
more spe ifi ally set fort( (erein, t(at, under t(e "
M@#Pro%isions, if ta en or not ta en, as t(e ase may !e, ould A4
endanger t(estatus of any :rust " M@# as a " M@# or =4 result in
t(e imposition of ataC upon any :rust " M@# or t(e :rust und in
luding !ut not limited to t(etaC on &proh%'%ted
transact%ons& as defined in Se tion 8+0 a4 24 of t(e #ode
1+
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ter/ination of t(e ?'DC status of an5 Trust
?'DC created (ereunderJ
&
T$e POST DATED ASSI?NMENT .
As is referred to a"o!e* &lainti+ s Assign/ent of
'ortgage7 and Note as created on 'arc( ; t( * 200 .
T(e&lainti+ Trust* "5 !irtue of it s ?'DC status (as (at is
called
a Cut$%+ date7. T(e Trust s cut$%+ date7 is t(e date in (ic(
t(e Trust is /andated "5 la to sto8 acce8ting de8osits into
it.
Aside fro/ t(e creation 8ost foreclosure issue related a"o!e*
"5
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t(e ter/s of t(e Trust s o n &SA* N.G. ?.&.T.#. D.
.C.
regulations all /andate t(at t(is Assign/ent as !oid at its
ince8tion.
&lainti+ de"t collector in t(is case is a Trustee for
a'ortgage Backed Securitized Trust and as suc( &lainti+
Trustee
and t(e Trust are controlled in t(eir entiret5 "5 t(e Trust
Dndenture or controlling docu/ent* a docu/ent titled t(e
&ooling Ser!icing Agree/ent7 &SA .
T(e Trust is also a eal ?state 'ortgage Dn!est/ent
Conduit ?'DC trust and as suc( is (eld in strict regulations
it( "ot( D. .S. ?'DC trust rules of #a and t(e #a s and
ules created s8eci)call5 in accordance it( t(e Trust la s of
eit(er t(e State of t(e Trust s creation or "5 t(e
contractual
c(oice of t(e 8artici8ants of t(e Trust* as is t(e case at "ar.
T(e
agreed contractual c(oice of #a to "e ad(ered to "5 t(e
Trust s 8artici8ants in t(e case at Bar is Ne Gork Trust #a
?.&.T.#..
&lainti+ s 8roduction of t(e Assign/ent7 is contrar5 to
Ne Gork #a and D S 60. Dn s(ort* t(e &lainti+ Trust
e ercised a 8ro(i"ited act on 'arc( ; t( * 200 .
T(e afore/entioned Assign/ent7 is contrar5 to t(e
Trust s Dnstru/ents and t(erefore >oid 8ursuant to D S
60A$
and Ne Gork ?states* &o ers Trusts ?.&.T.# $ &art 2
$ Q ; 2.< and t(e Trust s Dndenture reHuire/ents.
LAny a tion .(i ( de%iates from t(e :rust do uments is %oid)
762) A t oftrustee in ontra%ention of trust @f t(e trust is
eCpressed in t(e instrument reatingt(e estate of t(e trustee, e%ery
sale, on%eyan e or ot(er a t of t(e trustee in
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ontra%ention of t(e trust, eC ept as aut(oriBed !y t(is arti le
and !y any ot(er pro%ision of la., is %oidL)
No 8ossession of t(e Asset e ists until t(ere (as "een a
deli!er5 and an acce8tance of t(e Asset and t(e gi!er of t(e
Asset (as relinHuis(ed all do/inion and control o!er t(e
Assetsignif5ing a true sale of t(e Asset to t(e &lainti+ Trust
t(ere"5
/aking t(e Asset* inter alia* "ankru8tc5 re/ote and securel5
it(in t(e Trust >ault.
&lainti+ s 8ro+ered Assign/ent7 in t(e case at Bar
8ro!e s onl5 t(at it as a forged and fa"ricated docu/ent
created solel5 for t(e 8ur8ose of facilitating t(e eas5 t(eft
of
-efendant s (o/e it(in a Court of #a .
The Trust is a REMI Trust
T(e Trust as for/ed as a ?'DC trust &,, Ender t(e
?'DC 8ro!isions of t(e Dnternal e!enue Code D C7 t(e
closing date of t(e Trust is also t(e startu8 da5 for t(e
Trust.
T(e closing dateIstartu8 da5 is signi)cant "ecause all assets
of
t(e Trust are /andated to "e transferred to t(e Trust on or
"efore t(e closing date to ensure t(at t(e Trust recei!ed
its
?'DC status. T(e D C 8ro!ides in 8ertinent 8art t(atK
> C ept as pro%ided in se tion 8+0K d4 24, if any amount is
ontri!uted toa " M@# after t(e startup day, t(ere is (ere!y imposed
a taC for t(e taCa!le yearof t(e " M@# in .(i ( t(e ontri!ution is
re ei%ed e ual to 100 per ent of t(e
amount of su ( ontri!ution)?2+ /)S)#) 8+0K d4 14)
11 :(e @nternal "e%enue #ode pro%ides t(at t(e terms real estate
mortgage in%estmentonduit; and " M@#; mean any entityN 14 to .(i (
an ele tion to !e treated as a " M@# applies
for t(e taCa!le year and all prior taCa!le years, 24 all of t(e
interests in .(i ( are regular interestsor residual interests, 34
.(i ( (as 1 and only 14 lass of residual interests and all
distri!utions, if any, .it( respe t to su ( interests are pro
rata4, 4 as of t(e lose of t(e 3rd mont( !eginning after t(e
startup day and at all times t(ereafter, su!stantially all of t(e
assets of .(i ( onsist of
ualified mortgages and permitted in%estments)
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o ners(i8 . T(e I%te'%(l Re+e%ue C#de 8ro!ides for 100
8ercent ta 8enalties for asset transfers to t(e trust after
t(e
closing date of t(e trust and t(e Trust s controlling
docu/ent*
t(e &SA* s8eci)call5 Section =.02* for"ids all 8artici8ants
in t(e
securitization of t(e assets of t(e trust to 8erfor/ an5 action
incontra!ention to t(e D S code.
Furt(er* Section =.02 of t(e &SA s8eci)call5 8ro(i"its
t(e
acHuisition of an5 asset for a ?'DC fund after t(e closing
date
unless t(e 8art5 8er/itting t(e acHuisition and t(e ND'S net
interest /argin securities Dnsurer (a!e recei!ed an %8inion
letter fro/ counsel* at t(e 8art5Us e 8ense* t(at t(e
acce8tance
of t(e asset ill not a+ect t(e ?'DCUs status.
&lainti+ o+ers no suc( e!idence or 8roof t(at a letter
(as
"een 8ro!ided to s(o co/8liance it( t(e reHuire/ents of t(e
&SA. &lainti+ (as 8ro!ided no e!idence of -e8ositor s
de8ositing
of t(e note and /ortgage into t(e Trust and (as 8ro!ided no
e!idence t(at t(e trustee (ad aut(orit5 to acHuire t(e note
and
/ortgage (erein after t(e trust (ad closed or for t(e 8ur8ose
of
foreclosure.
-efendant asserts t(at t(e alleged transfer of t(e note
/ortgage to &lainti+ Trust (erein is !oid "ecause t(e note
is
re8resented to (a!e "een acHuired after t(e trust s closing
date
and as suc( is a !iolation of t(e contractual ter/s of t(e Trust
s
controlling docu/ent* t(e &SA.
W(ereas in %(io #a it /a5 "e 8er/issi"le for a 9older7
to e ecute suit on a note andIor /ortgage* in t(e case at Bar
t(e
alleged contraction "et een 8arties is not "eing done "5 an
22
http://www.law.cornell.edu/uscode/text/26/860Ghttp://www.law.cornell.edu/uscode/text/26/860G
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%(ioan against an %(ioanV Dnstead it is "eing co//itted "5 a
de"t collector (o is an alleged re8resentati!e of a NG Trust
(ic( is "ound "5 NG #a s and as suc( it is u8 to &lainti+
to
8ro!e (e is indeed t(e true &?T? &erson ?ntitled To
?nforce of
t(e alleged Note 'ortgage.
Dn t(e case at Bar &lainti+ o+ers onl5 3 signed
docu/ents*
4ust 3 8ieces of 8a8er attesting to t(eir legiti/ac5 to
foreclose*
t(eir rig(t to "e &?T?. T(ose docu/ents areK
1. t(e 8ost dated* 8ost created and )led it( t(e
court /ont(s after foreclosure initiation*
Assign/ent of 'ortgage (ic( is o"o$Signed"5 a 's. To8aka
#o!e.
2. T(e 8ost dated* 8ost created and )led it( t(e
court /ont(s after foreclosure initiation* A+ida!it
of Status of Account and 'ilitar5 Status again
signed "5 t(e sa/e o"o$Signer 's. To8aka #o!e
3. T(e Allonge fro/ %8tion %ne 'ort. Cor8. to
"lank.
-efendant su"/its ne e!idence in t(is case in t(e for/
of an A+ida!it attesting to t(e o"o$signing e 8lained infra
of
"ot( &lainti+ s Assign/ent of 'ortgage7 and &lainti+
s
A+ida!it of Status of Account and 'ilitar5 Status7.
THE ALLON?E
%n or a"out ,une =* 200:* as t(e e!idence of record s(o s
'r. eedUs alleged original lender* 9 Block 'ortgage Cor8.*
clai/s t(at t(roug( t(e use of an alleged e ecuted
endorse/ent
(ic( as unattac(ed* inco/8lete* non$aut(enticated "5
a+ida!it* une ecuted &a5 to t(e %rder7 as in e isting
distinctl5
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se8arate under la fro/ "earer 8a8er7 * allonge dated ,une =*
200: fro/ %8tion %ne to "lank. 12
Dt is -efendant s 8osition t(at t(e 8ro+ered Allonge7 fro/
%8tion %ne 'ort. Co. to "lank7 is a fraud and a s(a/e
created
solel5 to re8resent to t(is Court &lainti+ s interest in t(e
Note 'ortgage (ic( in trut( (as no legal !alue (atsoe!er e ce8t
to 8ro!e &lainti+ s and &lainti+ s Counsel s illingness
to create12 o!!ents "f #$e Lavalle To %lorida Supre!e ourt &age
52
$ye -a%alle, Pe. Mortgage @nstitute, 07D +86 0 7 mortgagefrauds
aol) om >2 3) @n fa t, a ommon industry pra ti e .as to reate an
>unatta (ed? and an undated >endorsed in !lan ?
pie e of paper t(e industry .rongly inferred .as an >allonge
? 2 ) :(e unatta (ed pie e of paper .it( aneCe uted endorsement
upon its fa e .ould t(en !e pla ed in a file .it( or .it(out a
note, s anned andimaged into an imaging system and t(en dis arded,
destroyed, on ealed, or e%en later atta (ed if ne essary,upon
default !y a !orro.er .(en a ser%i er needed to reate e%iden e of
note o.ners(ip or (older status)2 5) /nder /## Arti le 3,
>indorsement? means a signature > on an instrument, not on a
'lank p%ece o$
paper )? 2 +) @n order for t(e endorsement on an allonge to !e
%alid, t(e proper do ument ustody pro ess t(ats(ould (a%e !een
follo.ed .as toI a4 determine if room eCisted on t(e last page of
t(e note or its !a side tosee if any room eCisted for t(e
endorsementQ !4 only if no room eCisted, a !lan pie e of paper
s(ould !efirmly affiCed to t(e >last page? of t(e original
.et6in note, so as to pre%ent its remo%al and repla ementQ 4t(e
first page on t(e fa e of t(e note s(ould t(en !e stamped
>Allonge property address, loan num!er et )s(ould !e pla ed upon
t(e !lan pie e of paperQ and t(en e4 t(e endorsement stamp and
signature s(ould !e
pla ed on t(e affiCed pie e of paper to t(e note i)e) an
allonge4) 2 7) An unatta (ed to an original note !lan pie e of
paper is not an allonge) An unatta (ed to an original note !lan pie
e of paper .it( an endorsementon its fa e is not an allonge eit(er)
@f t(e endorsement is pla ed upon t(e !lan pie e of paper and t(en
t(eendorsement and signature are pla ed on t(e !lan pie e of paper
.(ile unatta (ed, all someone (as endorsed.as t(e !lan pie e of
paper, not t(e original note itself) 2 8) 'arrell G) Pier e is a Mi
(igan la.yer for t(enational la. firm of 'y ema Kossett) Mr) Pier e
ser%ed as mem!er of t(e Arti le Study #ommittee for t(ePermanent
ditorial =oard for t(e /niform #ommer ial #ode, as #(air of t(e
Arti le iling Pro9e t and ast(e primary drafter of t(e
@nternational Asso iation of #ommer ial Administrators; Model
Administrati%e"ules for Arti le filing offi es) Re is a fre uent le
turer and .riter regarding /## matters)? >2 ) Mr)
Pier e aut(ored an arti le for t(e Asso iation of #orporate
#ounsel titled >AllongesI Separate @ndorsements $ot ffe ti%e
/nless AffiCed)? @n t(is arti le, Mr) Pier e eCposes t(e lender;s
>dirty se ret? of t(e moti%esand use of allonges !y t(e mortgage
industry .(en (e .ritesI
>Se ured lenders routinely ta e pledges of instruments in
luding negotia!le instruments under /##Arti le 3 and ot(er
promissory notes4 as ollateral) @nstruments are su!9e t to spe ial
priority rules)Se urity interests perfe ted merely !y filing a /##1
finan ing statement are 9unior to se urity interests
perfe ted !y possession, .it(out regard to time of filing or
possession)Se urity interests perfe ted !y > ontrol? possession
plus indorsement4 are senior to t(ose perfe tedmerely !y filing or
possession) A ordingly, se ured parties .(o are relying on
instruments as ollateral.ill .ant to (a%e ontrol o%er t(e
instruments)Instru!ents !a$ 'e indorsed to secured parties( ' ut it
is a cumbersome process that has to beunwound when the loan is
repaid as expected . It is( therefore( convenient and common
practiceto have the requisite indorsements supplied on a separate
piece of paper . This keeps the instrument “clean” so that it can
be returned clean when the secured obligations are paid . The
separate piece of
paper is kept with the instrument but is not typically attached
to it ( though the lender or its custodianhas authorit$ to do so(
at least upon default.:(is pra ti e .or s .ell in most ases) Even
though the lender is not $et a )holder* under +rticle 3('ecause the
indorse!ent is not attached( the lender has possession and the
related loan docu!entsshould cause the lender to 'e a )nonholder in
possession of the instru!ent ,ho has the rights of aholder(* that
is one ,ho can enforce the instru!ent as such under - 3/301 ( and
co!pelindorse!ent under - 3/ 03.@n addition,secured parties in
2!ere possession have priorit$ over other secured parties
e4ceptthose ,ho have control 2possession plus indorse!ent , so t(e
failure to a (ie%e full ontrol does notnormally impair priority no
one else .ill (a%e possession eC ept in rare ases4) /## 6330
d4)
So, even if a separate indorsement is not initially “affixed” to
an instrument, a secured party
2
mailto:[email protected]:[email protected]:[email protected]
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and "ring into t(is court fraudulent docu/ents created solel5
to
in uence t(e Court s "ias.
T$e ells F('*# M(%u(l
-efendant su"/its ne and 8re!iousl5 uno"taina"lee!idence in t(is
case of &lainti+ Wells Fargo Banks recentl5
8u"lis(ed in (ouse /anual titled ells F('*# H#me
M#'t*(*e F#'ecl#su'e Att#'%ey P'#cedu'e M(%u(l
Ve'si#% ,= 8ro!ing scienter t(roug( a 8attern and 8ractice
of
&lainti+ s and &lainti+ s Counsel in t(e creation of
fraudulent
docu/ents created solel5 to allo &lainti+ and &lainti+
s
Counsel to fraudulentl5 take (o/es fro/ (o/eo ners (ent(e5
lacked t(e rig(t "ecause t(e5 lacked t(e 8roof to
acco/8lis( it legall5.
in Atta (edQ? d4 identifying information on t(e note su ( as
origination date, !orro.er name, possession normally maintains
first priority and has the power to negotiate the instrument
upondefault.:(ere are o asions, (o.e%er, .(en (a%ing an indorsement
is riti ally important) One .ould !e
t(e relati%ely rare ase .(ere one ompeting se ured party (as
possession for itself as .ell as for t(eot(er ompeting se ured
party, so !ot( .ould !e in possession and priority ould depend on
t(eeffe ti%eness of an indorsement) Anot(er .ould !e .(ere t(e ma
er of a negotia!le instrument (asdefenses against t(e named payee
!ut t(e se ured party, .it( t(e indorsement, .ould !e a (older in
due
ourse) et anot(er .ould !e an assignment of a note or a asual
pledge .(ere t(e related do uments donot learly pro%ide t(e lender
.it( t(e rig(ts of a (older)/nder /## Arti le 3, .(i ( applies to
>negotia!le instruments? as defined in Arti le 34 and .(i (is
ommonly applied !y ourts to non6negotia!le instruments, >
indorse!ent* !eans a signature )onan instru!ent %or the purpose of
deter!ining ,hether a signature is !ade on an instru!ent( apaper
affi4ed to the instru!ent is a part of the instru!ent.* - 3/ 062a
2e!phasis supplied .-nder this rule( a separate assign!ent docu!ent
is not sufficient to create the re7uisiteindorse!ent( unless it is
)affi4ed* to the instru!ent.Some Mi (igan assignees found out t(e
(ard .ay (o. important it is to (a%e one;s separateindorsement
>affiCed)? @n one ase, a separate indorsement .as not atta (ed
to t(e note in uestion andt(e assignee .as un.illing to produ e t(e
underlying assignment of loans agreement) :(e ourt (eld t(e
separate indorsement .as not effe ti%e and, !e ause it referen
ed t(e unprodu ed underlying agreement,it did not pro%e an a!solute
assignment .as intended) Brown Bark )) L* v. Ba( Are Floor Cover%ng
+
#es%gn )nc. #ase $o) 2 +++0, Mi () #t) App) May 31, 20114) @n
t(e ot(er ase, t(e assignee ultimately(ad t.o pro!lems after it too
a note and pla ed it in an en%elope .it( a separate indorsement)
$ot only.as t(e separate indorsement ineffe ti%e !e ause it .as not
affiCed to t(e note, it turned out t(e >note?.as in fa t a olor
opy of t(e original note, so t(e assignee did not e%en (a%e
possession of t(e note)Git(out e%er (a%ing (ad possession, t(e
assignee did (a%e standing to enfor e t(e note as a lost noteunder
/## 3630 ) Sha(a v. ,aram #ase $o) 308 05 Mi () #t) App) May +, 201
4) Pledgees andot(er assignees of notes need to ensure t(at
original notes are deli%ered to t(em, and if indorsements
areseparately pro%ided, t(at transa tion do uments properly
aut(oriBe t(em to atta ( t(e separateindorsements .(en
appropriate)?
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A distinguis(ed colleague* Ne Gork "ankru8tc5 attorne5
#inda Tirelli (as "een orking in e 8osing t(ese re/ediation7
8ractices. T(eir ta$da7 &err5 'ason$like /o/ents of
e!idence
all of a sudden a88earing in foreclosure and "ankru8tc5
litigation are not a/using. %n 'arc( 12* 201
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T(e Wells Fargo /anual /a5 "e re!ie ed and do nloadedat
(tt8KIIsto8foreclosurefraud.co/I 8contentIu8loadsI201
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dis8la5ed a co/8lete and total disregard for t(e rig(ts of
t(e
"orro ers. 9e ent on to stateK
-efendant Wells Fargo o8erated fro/ a 8osition ofsu8eriorit5
8ro!ided "5 its enor/ous ealt(.7 Wells
Fargo s decision took ad!antage of an o"!iousl5 )nanciall5
!ulnera"le fa/il5*7
t(e 4udge continued* noting t(at Wells Fargo s(o ed no
e!idence of re/orse for t(e (ar/ caused.
$n fact, the Court recalls the lack of remorse andhumanity
illustrated "y a )ells Far'o cor oratere resentative who testi+ed,
$&m not here as ahuman "ein'. $&m here as a re resentative
of )ells
Far'o, 7
t(e 4udge rote.
T$e RO8O6SI?NED DOCs&
W(en &lainti+* se!eral /ont(s after initiating
foreclosure*
introduced into t(e court record a forged and fa"ricated*
"ack
dated and o"o$Signed 13 docu/ent titled Assign/ent of
'ortgage7* &lainti+ s Counsel certi)ed t(e legiti/ac5 of
a
docu/ent t(at could* "5 t(e !er5 ter/s it(in t(e controlling
docu/ent of t(e Trust &SA itself* ne!er 8ossi"l5 e ist.
T(is docu/ent is titled Assign/ent of 'ortgage7. E8on
ins8ection t(oug(* t(is docu/ent is in realit5 not onl5 t(e
13 .e no. (a%e a legal definition of L"o!o6signerL from t(e
/)S)#)O)A) for t(e 5t( #ir uit : 4 int(e ase of " @$AK - %) ' /:S#R
=A$T $A:@O$A- :"/S: #OMPA$ , $o) 126505+
5t( #ir) O t) 2 , 20134) :(e ourt defined L"o!o6signingL as
follo.sQ
L>"o!osigning? is t(e ollo uial term t(e media, politi ians,
and onsumer ad%o ates (a%e used todes ri!e an array of uestiona!le
pra ti es !an s deployed to perfe t t(eir rig(t to fore lose in
t(e.a e of t(e su!prime mortgage risis, pra ti es t(at in luded
(a%ing !an employees or t(ird6party
ontra torsI 14 eCe ute and a no.ledge transfer do uments in
large uantities .it(in a s(ort period of time, often .it(out t(e
purported assignor;s aut(oriBation and outside of t(e presen e
oft(e notary ertifying t(e a no.ledgment, and 24 s.ear out
affida%its onfirming t(e eCisten e ofmissing pie es of loan do
umentation, .it(out personal no.ledge and often outside of t(e
presen e of t(e notary)L
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alleged assign/ent of t(e alleged /ortgage "ut also t(e
alleged
assign/ent of t(e alleged note.
Also u8on ins8ection it can "e found t(at t(is docu/ent
as attested to and signed "5 one 's. To8aka #o!e. 's. #o!e
is
an e/8lo5ee of #ender &rocessing Ser!ices in -akota
Count5*
'innesota and as suc( t(e A%' as also fraudulentl5 signed "5
a 8erson (o (ad no aut(orit5 to sign. Dt is 8atentl5
fraudulent
and is an o"!ious forger5 and as e 8lained infra it as e
ecuted
t o 5ears after t(e &lainti+ trust s /andated Cut$%+ date7
for
de8osits.
'ortgages /a5 "e enforced onl5 "5* or on "e(alf of* t(eentit5
t(at is entitled to enforce t(e o"ligation t(e /ortgage
secures. T(e underl5ing o"ligation in all cases is a
8ro/issor5
note. T(e /ortgage is t(e securit5 instru/ent t(at secures
t(e
inde"tedness created "5 t(e note to t(e real 8ro8ert5.
T(e 8ractice of &lainti+ Wells Fargo Bank s use of
unaut(orized docu/ent forgers in A+ida!it Assign/ent of
'ortgage creation is no co//on kno ledge it as e!en on60
'inutesV . Dt is a /atter t(at (as e!en "een una+ectionatel5
ter/ed o"o$Signing7 1< 1: AN- no t(roug( co//on
kno ledge of &lainti+ Wells Fargo Bank s &u"lic
ad/issions
and 8a5/ent of L Billions in )nes concerning sa/e of
8artici8ation in t(e t(at !er5 sa/e illegal action on a
dail5*
/ont(l5 and 5earl5 "asis* -efendant su"/its and 'e uests t$e
1 :(e term Lro!osigningL does not a urately des ri!e t(e pattern
and pra ti e) :(e pattern and pra ti e aremore a urately des ri!ed
as ontra t per9ury, ontra t forgery, e%iden e fa!ri ation, fraud
upon t(e #ourt,and t(eft in .(i ( families are rendered (omeless as
a result of riminal !e(a%ior)
15 :(e pra ti e from in%estopedia, L@n t(e t(ird and fourt(
uarters of 2010, a ro!o6signing s andal emergedin t(e /nited States
in%ol%ing KMA# Mortgage and a num!er of ma9or /)S !an s) =an s (ad
to (altt(ousands of fore losures in numerous states .(en it !e ame
no.n t(at t(e paper.or .as illegitimate
!e ause t(e signers (ad not a tually re%ie.ed it) G(ile some
ro!o6signers .ere middle managers, ot(ers.ere temporary .or ers
.it( %irtually no understanding of t(e .or t(ey .ere doing)L
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C#u'ts "udici(l N#tice of t(e recentl5 and 8re!iousl5
una!aila"le A+ida!it and acco/8an5ing letter attac(ed (ereto
as ? (i"it F 7 stating in 8artJ
> )n an attempt to prov%de (ou w%th more ass%stance ) have
enclosed an a$$%dav%t s%gned '( me as -eg%ster o$ the Southern sse/
#%str%ct -eg%str( o$ #eeds
attest%ng to the presence o$ a ro'o0s%gned s%gnature on (our
document as l%sted
on Mc#onnell *ropert( Ana1(t%cs Approved -o'o0s%gners L%st. )$
(ou are
currentl( 'e%ng $oreclosed upon th%s a$$%dav%t ma( 'e presented
to (our attorne(
the lender or the court to show that (our cha%n o$ t%tle has
'een corrupted )?
T(e a"o!e referenced A+ida!it attests to t(e unla ful and
kno n o"o$Signer7 signature status of &lainti+ s
Assign/entof 'ortgage ? ? 7 as ell as signature status of
&lainti+ s
sole 8ro+ered and alleged legal conclusor5 A+ida!it titled
STATES %F ACC%ENT AN- 'D#DTA G STATES AFFD-A>DT7
? . F7 (ic( are "ot( signed "5 one 's. To8aka #o!e* as as
8re!iousl5 articulated to t(is Court "5 -efendant in all of
-efendant s 8re!ious 8leadings. T(e a"o!e /entioned forged*
fraudulent and conclusor5 A+ida!it7 and Assign/ent of
'ortgage ('e t$e s#lely si*%ed d#cume%ts &lainti+
8resented to t(e court in t(eir case to esta"lis( t(eir o
ners(i8
of t(e alleged Note 'ortgage and t(eir su"seHuent rig(t to
initiate t(is foreclosure suit against -efendant.
T(e a"o!e #o!e conclusor5 a+ida!it re8resents t(at it is
"ased on #o!e s fa/iliarit5 it( -efendants account stating
A iant ha! acce!! o" and ha! per!onal #nowledge o" theacco$nt!
o" !aid compan%, and !peci&call% with the acco$nt o"
'ohn L. (eed, de"endant herein .7 #o!e also a!ers t(at !aid
acco$nt i! in de"a$lt and that plainti ha! elected to call
the
entire )alance o" !aid acco$nt d$e and pa%a)le.. 7. W(ile
t(e
#o!e A+ida!it states t(at #o!e s 8ersonal kno ledge is
li/ited
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!oid of legal standing to (a!e initiated t(is foreclosure
action
against -efendant* could not (a!e "een acco/8lis(ed it(out
t(e use of* as as 8re!iousl5 articulated "5 -efendant* 20
forged
and fraudulentl5 created docu/ents* created s8eci)call5 "5
and
deli!ered into t(is Court (ile "eing Certi)ed as "eing true*
4ustand accurate "5 &lainti+ and &lainti+ s Counsel for t(e
sole
8ur8ose of "linding t(is Court to t(e legal realities of
t(eir
8osition and t(e situation (ic( t(en lead to t(e ulti/ate
t(eft
of -efendants (o/e* loss of -efendant s 8ersonal and
"usiness
in!entor5 and 8ossessions* forced (o/elessness u8on
-efendant
and "eca/e t(e cause of -efendant s /ental in4ur5 (ile
allo ing &lainti+ s o n un4ust enric(/ent.
As a result* t(e Courts No!e/"er 13 t( * 200 entr5
granting &lainti+ s /otion for 4udg/ent and issuing a decree
of
foreclosure s(ould "e !oid a" initio as o88osed to !oida"le
.
Accordingl5* "ased u8on t(e foregoing* -efendant
res8ectfull5 reHuests t(at t(e No!e/"er 13 t( 200 entr5 "e
!acated and t(is /atter re/anded "ack to t(e Ci!il Court it(
instruction to dis/iss* instruction to Huiet title and eac(
of
-efendants Counterclai/s to "e la full5 ad4udged.
Respectfull$ su'!itted(
888888888888888888888888
9ohn +. Reed
+ aple ve.
20
MO:@O$ :O APP A- :R ' #@S@O$, O"' " A$' $:" O& ""/-@$K '
$'A$:SM "K $# AM $' ' MO:@O$ :O &A#A: A &O@' J/'KM $: at
t(ru 1+, 35, 5, +, 7, 8,
50, 52, 58, +0, +7, 23 , 2 0, 2 1, 2 2, )
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3enterville, 6hio> >*
*
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U/ntil t(is opinion appears in t(e O(io Offi ial "eports ad%an e
s(eets, it may !eited as Fed Home Loan Mtge. Corp. v. Schwartzwald
Slip Opinion $o) 20126
0(io65017)V
#"TI E
:(is slip opinion is su!9e t to formal re%ision !efore it is
pu!lis(ed in an ad%an e
s(eet of t(e O(io Offi ial "eports) "eaders are re uested to
promptly notify t(e
"eporter of 'e isions, Supreme #ourt of O(io, +5 Sout( ront
Street, #olum!us,
O(io 3215, of any typograp(i al or ot(er formal errors in t(e
opinion, in order
t(at orre tions may !e made !efore t(e opinion is pu!lis(ed)
SLI& "&I#I"# #o. 01 /0:I"/501;%EDER+L :"ME L"+# M"RT
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S-&REME "-RT "% " :I"
ig(t( 'istri ts on t(e follo.ing issueI L@n a mortgage fore
losure a tion, t(e
la of standing or a real party in interest defe t an !e ured !y
t(e assignment of
t(e mortgage prior to 9udgment)L
WX2Y ederal Rome -oan ommen ed t(is fore losure a tion !efore
it
o!tained an assignment of t(e promissory note and mortgage se
uring t(e
S (.artB.alds; loan) :(e S (.artB.alds maintained t(at ederal
Rome -oanla ed standing to sue) :(e trial ourt granted summary
9udgment in fa%or of
ederal Rome -oan and entered a de ree of fore losure) :(e
appellate ourt
affirmed, (olding t(at ederal Rome -oan (ad remedied its la of
standing .(en
it o!tained an assignment from t(e real party in interest)
WX3Y Ro.e%er, standing is re uired to in%o e t(e 9urisdi tion of
t(e
ommon pleas ourt, and t(erefore it is determined as of t(e
filing of t(e
omplaint) :(us, re ei%ing an assignment of a promissory note and
mortgage
from t(e real party in interest su!se uent to t(e filing of an a
tion !ut prior to t(e
entry of 9udgment does not ure a la of standing to file a fore
losure a tion)
X Y A ordingly, t(e 9udgment of t(e ourt of appeals is re%ersed,
and
t(e ause is dismissed)
%acts and &rocedural :istor$
X5Y @n $o%em!er 200+, 'uane and Julie S (.artB.ald pur (ased
a
(ome in enia, O(io, and re ei%ed a mortgage loan from -ega y
Mortgage in t(eamount of F251,250) :(ey eCe uted a promissory note
and a mortgage granting
-ega y Mortgage a se urity interest in t(e property) -ega y
Mortgage t(en
endorsed t(e promissory note as paya!le to Gells argo =an ,
$)A), and assigned
it t(e mortgage)
WX +Y @n Septem!er 2008, 'uane S (.artB.ald lost (is 9o! at =ar
o,
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ederal Rome -oan)
WX13Y :(e S (.artB.alds also mo%ed for summary 9udgment,
asserting
t(at ederal Rome -oan la ed standing to fore lose on t(eir
property)
WX1 Y :(e trial ourt entered summary 9udgment for ederal Rome
-oan,
finding t(at t(e S (.artB.alds (ad defaulted on t(e note, and it
ordered t(ee uity of redemption fore losed and t(e property sold)
ederal Rome -oan
pur (ased t(e property at a s(eriff*s sale)
WX15Y On appeal, t(e Se ond 'istri t #ourt of Appeals affirmed
and (eld
t(at ederal Rome -oan (ad esta!lis(ed its rig(t to enfor e t(e
promissory note
as a non(older in possession, !e ause assignment of t(e mortgage
effe ted a
transfer of t(e note it se ured) :(e ourt furt(er eCplained t(at
standing is not a
9urisdi tional prere uisite and t(at a la of standing may !e
ured !y su!stituting
t(e real party in interest for an original party pursuant to
#i%)") 17 A4) :(us, t(e
ourt on luded t(at alt(oug( ederal Rome -oan la ed standing at
t(e time it
ommen ed t(e fore losure a tion, it ured t(at defe t !y t(e
assignment of t(e
mortgage and transfer of t(e note prior to entry of
9udgment)
WX1+Y :(e ourt of appeals ertified t(at its de ision onfli ted
.it(
Wells Fargo Bank !.A. %) B(rd 178 O(io App)3d 285, 200860(io6
+03, 8 7
$) )2d 722 1st 'ist)4, X 1561+Q Bank o$ !ew 6ork %)7%ndele 1st
'ist) $o) #6
January :erm, 2012
38
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0 0251, 201060(io65 2, X 36 Q andWells Fargo Bank !.A. %) 2ordan
8t( 'ist)
$o) 1+75, 200 60(io6@0 2, X 21, ases t(at (eld t(at a la of
standing annot
!e ured !y su!stituting t(e real party in interest for an
original party pursuant to
#i%)") 17 A4) Ge a epted t(e onfli t and t(e S (.artB.alds* dis
retionaryappeal on t(e same issue)
+rgu!ents on +ppeal
WX17Y :(e S (.artB.alds eCplain t(at t(e essential aspe t of
standing is
in9ury to a legally prote ted rig(t and laim t(at ederal Rome
-oan (ad not !een
in9ured !y t(eir default at t(e time it ommen ed t(is fore
losure a tion, !e ause
it (ad not o!tained t(e note and mortgage until after it filed
t(e omplaint)
"elying on federal asela., t(ey maintain t(at standing is
determined as of t(e
time t(e a tion is !roug(t, so t(at su!se uent e%ents do not ure
a la of
standing) :(ey furt(er urge t(at alt(oug( t(e re uirement of a
real party in
interest an !e .ai%ed, t(at re uirement annot !e e uated .it(
t(e re uirement
of standing)
WX18Y ederal Rome -oan asserts t(at pursuant to ")#) 1303)31, it
is a
Lperson entitled to enfor e t(e noteL !e ause it is LUaV
non(older in possession of
t(e instrument .(o (as t(e rig(ts of a (olderL !y %irtue of t(e
negotiation of t(e
note from -ega y to Gells argo and t(e assignment from Gells
argo) urt(er,it maintains t(at ")#) 1303)31 defines only .(i (
party is entitled to enfor e a
note and t(at t(e failure to !e a real party in interest at t(e
ommen ement of suit
an !e ured pursuant to #i%)") 17 A4 !y t(e assignment of t(e
mortgage, and
note) @t also ontends t(at t(e 9urisdi tional re uirement of
9usti ia!ility is
satisfied if t(e allegations of t(e omplaint esta!lis( t(at t(e
plaintiff (as standing
to present a 9usti ia!le ontro%ersy and t(at e%en if it is
determined t(at t(ose
allegations .ere in fa t false, t(e matter remains 9usti ia!le
so long as t(e plaintiff
su!se uently o!tains t(e rig(t to fore lose prior to 9udgment)
On t(is !asis, it
argues t(at !e ause Lt(e O(io #onstitution !esto.s general and
not limited4
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5
S/P" M #O/": O OR@O
9urisdi tion on ommon pleas ourts, ommon pleas ourts (a%e
*9urisdi tion* to
(ear disputes, e%en if t(e named plaintiff .as not t(e orre t
person to in%o e it)L
:(us, it on edes t(at t(e re ord in t(is ase does not esta!lis(
t(at it .as a
person entitled to enfor e t(e note as of t(e date t(e omplaint
.as filed, !ut it
maintains t(at it Lpro%ed t(at it .as su ( a person prior to
9udgment)L
WX1 Y A ordingly, t(e uestion presented is .(et(er a la of
standing
at t(e ommen ement of a fore losure a tion filed in a ommon
pleas ourt may
!e ured !y o!taining an assignment of a note and mortgage suffi
ient to esta!lis(
standing prior to t(e entry of 9udgment)La, and +nal$sis .
Stand%ng to Sue
WX20Y :(e O(io #onstitution pro%ides in Arti le @&, Se tion
=4Q L:(e
ourts of ommon pleas and di%isions t(ereof s(all (a%e su (
original 9urisdi tion
over all "ust%c%a'le matters and su ( po.ers of re%ie. of pro
eedings of
administrati%e offi ers and agen ies as may !e pro%ided !y la.)L
mp(asis
added)4
WX21Y @nCleveland %)Shaker Hts. 30 O(io St)3d , 51, 507 $) )2d
323
@ 874, .e statedI
A=hether a part$ has a sufficient staFe in an other,ise
Gusticia'le controvers$ to o'tain Gudicial resolution of
that
0
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controvers$ is ,hat has traditionall$ 'een referred to as
the
7uestion of standing to sue. =here the part$ does not rel$ on
an$
specific statute authorizing invocation of the Gudicial process(
the
7uestion of standing depends on ,hether the part$ has
alleged
...... a personal staFe in the outco!e of the controvers$. H
+
January :erm, 2012
)d uoting M%ddletown%) Ferguson 25 O(io St)3d 71, 75, 5 $) )2d
380
1 8+4, uotingS%erra Clu' %) Morton 05 /)S) 727, 7316732, 2 S)#t)
13+1, 31
-) d)2d +3+ 1 724, uoting Baker %)Carr 3+ /)S) 18+, 20 , 82
S)#t) + 1, 7-) d)2d ++3 1 724) Similarly, t(e /nited States Supreme
#ourt o!ser%ed in
Steel Co. %)C%t%zens $or a Better nv%ronment523 /)S) 83, 102,
118 S)#t) 1003,
1 0 -) d)2d 210 1 84, t(at LUsVtanding to sue is part of t(e
ommon
understanding of .(at it ta es to ma e a 9usti ia!le ase)LZ
WX22Y Ge re ogniBed t(at standing is a L9urisdi tional re
uirementL in
State e/ rel. #allman %) Frankl%n Ct(. Court o$ Common *leas 35
O(io St)2d
17+, 17 , 2 8 $) )2d 515 1 734, and .e statedI L@t is an
elementary on ept of
la. t(at a party la s standing to %nvoke the "ur%sd%ct%onof t(e
ourt unless (e (as,
in an indi%idual or representati%e apa ity, some real interest
in t(e su!9e t matter
of t(e a tion)L mp(asis added)4 See also !ew Boston Coke Corp.
%)8(ler 9:
O(io St)3d 21+, 218, 513 $) )2d 302 1 874 **t(e issue of
standing, inasmu ( as
it is 9urisdi tional in nature, may !e raised at any time during
t(e penden y of t(e
1
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pro eedingsL4Q Steinglass < S arselli, 8he ;h%o State
Const%tut%on< A -e$erence
7u%de 180 200 4 noting t(at t(e 9urisdi tion of t(e ommon pleas
ourt is
limited to 9usti ia!le matters4)
WX23Y And re ently, in ,%nca%d%) r%e )ns. Co. 128 O(io St)3d
322,
201060(io6+03+, $) )2d 207, .e affirmed t(e dismissal of a
omplaint for la of standing .(en it (ad !een filed !efore t(e
laimant (ad suffered any
in9ury) :(ere, Tin aid asserted laims t(at (is insurer (ad !rea
(ed t(e insuran e
ontra t !y failing to pay eCpenses o%ered !y t(e poli yQ
(o.e%er, (e (ad ne%er
presented a laim for reim!ursement to t(e insurer) Ge on luded
t(at Tin aid
la ed standing to assert t(e ause of a tion, eCplaining, L/ntil
rie refuses to pay
a laim for a loss, Tin aid (as suffered no a tual damages for
!rea ( of ontra t,
t(e parties do not (a%e ad%erse legal interests, and t(ere is no
9usti ia!le
ontro%ersy)L )d. at X 13)
7
S/P" M #O/": O OR@O
WX2 Y =e ause standing to sue is re uired to in%o e t(e 9urisdi
tion of t(e
ommon pleas ourt, Lstanding is to !e determined as of t(e ommen
ement of
suit)L Lu"an v. #e$enders o$ W%ldl%$e50 /)S) 555, 5706571, 112
S)#t) 2130, 11
-) d)2d 351 1 24, fn) 5Q see also Fr%ends o$ the arth )nc. v.
La%dlaw
nv%ronmental Servs. 48;C5 528 /)S) 1+7, 180, 120 S)#t)+ 3, 1 5
-) d)2d +10
2
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20004= !ova Health S(s. %)7and( 1+ )3d 11 , 115 61155 10t(
#ir)20054Q
Focus on the Fam%l( %) *%nellas Suncoast 8rans%t Auth. 3 )3d
12+3, 1275
11t( #ir)20034Q *err( %) Arl%ngton Hts. 18+ )3d 82+, 830 7t(
#ir)1 4QCarr
%) Alta >erde )ndustr%es lnc. 31 )2d 1055, 10+1 5t( #ir)1
14)
WX25Y urt(er, in%o ing t(e 9urisdi tion of t(e ourt Ldepends on
t(e stateof t(ings at t(e time of t(e a tion !roug(t,L Mullan
%)8orrance 22 /)S) 537, 53 ,
+ -) d) 15 182 4, and t(e Supreme #ourt (as o!ser%ed t(at LUtV(e
state of
t(ings and t(e originally alleged state of t(ings are not
synonymousQ
demonstration t(at t(e original allegations .ere false .ill
defeat 9urisdi tion)L
-ockwell )nternatl. Corp. %)Un%ted States 5 /)S) 57, 73, 127
S)#t) 13 7,
1+7 -) d)2d 1 0 20074)
WX2+Y :(us, LUpVost6filing e%ents t(at supply standing t(at did
not eCist
on filing may !e disregarded, denying standing despite a s(o.ing
of suffi ient
present in9ury aused !y t(e (allenged a ts and apa!le of 9udi
ial redress)L 13A
Grig(t, Miller < #ooper, Federal *ract%ce and *rocedure , Se
tion 3531
4:??@5= see 7rupo #ata$lu/ %) Atlas 7lo'al 7roup L.*. 5 1 /)S)
5+7, 575, 12
S)#t) 1 20, 158 -) d)2d 8++ 200 4, uoting Caterp%llar )nc. %)
Lew%s51 /)S)
+1, 75, 117 S)#t) +7, 13+ -) d)2d 37 re9e ting argument t(atL
*finality,
effi ien y, and 9udi ial e onomy* L an 9ustify suspension of t(e
time6of6filing
rule4QUtah Assn. o$ Count%es %) Bush 55 )3d 10 , 1101, and fn) +
10t(#ir)200+4 a plaintiff annot rely on in9uries o urring after t(e
filing of t(e
omplaint to esta!lis( standing4)
8
January :erm, 2012
3
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a!rogated t(e ommon6la. rules and adopted Lrules t(at permitted
any *real party
in interest* to !ring suit)L Spr%nt Commun%cat%ons Co.
L.*.%)AP## Servs. )nc.
55 /)S) 2+ , 27 , 128 S)#t) 2531, 171 -) d 2d 2 20084)
WX31Y @n O(io, #i%)") 17 A4 go%erns t(e pro edural re uirement
t(at a
omplaint !e !roug(t in t(e name of t(e real party in interest
and pro%idesI
%ery a tion s(all !e prose uted in t(e name of t(e real party
in
interest) An eCe utor, administrator, guardian, !ailee,
10
January :erm, 2012
trustee of an eCpress trust, a party .it( .(om or in .(ose name
a ontra t
(as !een made for t(e !enefit of anot(er, or a party aut(oriBed
!y statute
may sue in (is name as su ( representati%e .it(out 9oining .it(
(im t(e
party for .(ose !enefit t(e a tion is !roug(t) G(en a statute of
t(is)stateso pro%ides, an a tion for t(e use or !enefit of anot(er
s(all !e !roug(t in
t(e name of t(is state) $o a tion s(all !e dismissed on t(e
ground t(at it is
not prose uted in t(e name of t(e real party in interest until a
reasona!le
time (as !een allo.ed after o!9e tion for ratifi ation of ommen
ement of
t(e a tion !y, or 9oinder or su!stitution of, t(e real party in
interest) Su (
ratifi ation, 9oinder, or su!stitution s(all (a%e t(e same effe
t as if t(e
a tion (ad !een ommen ed in t(e name of t(e real party )in
interest)
WX32Y #onsidering #i%)") 17 A4 inSheal( %)Camp'ell 20 O(io St)3d
23,
2 Z25, 85 $) )2d 701 1 854, .e o!ser%edI
+
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:(e purpose !e(ind t(e real party in interest rule is > *[ [
[ to
ena!le t(e defendant to a%ail (imself of e%iden e and defenses
t(at t(e
defendant (as against t(e real party in interest, and to assure
(im finality
of t(e 9udgment, and t(at (e .ill !e prote ted against anot(er
suit !roug(t
!y t(e real party at interest on t(e same matter)* Celanese
Corp. o$ Amer%ca%) 2ohn Clark )ndustr%es 5 #ir)l 5 4, 21 )2d 551,
55+)L )n re
H%ghland Hol%da( Su'd%v%s%on1 714, 27 O(io App)2d 237V 2 0
U273
$) )2d 034)
WX33Y As t(e Supreme #ourt eCplained in L%ncoln *ropert( Co. %)
-oche
5 + /)S) 81, 0, 12+ S)#t) +0+, 1+3 -) d)2d 15 20054, t(e
real6party6in6interest
rule on erns only proper party 9oinder) #i%)") 17 A4 does not
address standingQ
rat(er, t(e point of t(e rule is t(at Lsuits !y representati%e
plaintiffs on !e(alf of
t(e real parties in interest are t(e eC eption rat(er t(an t(e
rule and s(ould only !e
allo.ed .(en t(e real parties in interest are identifia!le and
t(e res 9udi ata s ope
of t(e 9udgment an !e effe ti%ely determined)L) Consumer Fedn.
o$ Am. %)
Up"ohn Co. 3 + A)2d 725, 72 ')#)1 754 onstruing analogous 'istri
t of
#olum!ia rule4)
WX3 Y :(us, t(e :(ird and t(e $int( #ir uits (a%e re9e ted t(e
notion t(at
ed)")#i%)P) 17 a4, on .(i ( #i%)") 17 A4 is !ased, allo.s a
party .it( no personal sta e in a ontro%ersy to file a laim on
!e(alf of a t(ird party, o!tain t(e
ause of a tion !y assignment, and t(en (a%e t(e assignment
relate !a to
ommen ement of t(e a tion, statingI
L"ule 17 a4 does not apply to a situation .(ere a party .it(
no
ause of a tion files a la.suit to toll t(e statute of
limitations and later
o!tains a ause of a tion t(roug( assignment) "ule 17 a4 is
t(e
odifi ation of t(e salutary prin iple t(at an a tion s(ould not
!e forfeited
!e ause of an (onest mista eQ it is not a pro%ision to !e
distorted !y
parties to ir um%ent t(e limitations period)L
7ardner %)State Farm F%re < Cas. Co. 5 )3d 553, 5+3 3d
#ir)20084, uoting
7
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Un%ted States e/ rel. Wul$$ v. CMA )nc. 8 0 )2d 1070, 1075 t(
#ir)l 8 4)
WX 35Y :(e SiCt( #ir uit #ourt of Appeals* de ision in ur%ch
)ns. Co. v.
Log%trans )nc. 2 7 )3d 528 +t( #ir)20024, illustrates t(is
point) @n t(at ase, a
fire at a .are(ouse destroyed property insured !y Ameri an
Kuarantee, .(i ( paid out a laim for damages) Ro.e%er, anot(er
insuran e ompany, \uri (
S.itBerland, filed a omplaint laiming to !e t(e insured*s
su!rogee,
not.it(standing t(e fa t t(at \uri ( S.itBerland (ad neit(er
issued an insuran e
12
January :erm,2012
poli y nor paid out any money to t(e insured) :(e defendants
mo%ed to dismiss
for la of standing, and) \uri ( S.itBerland soug(t to su!stitute
Ameri an
Kuarantee as t(e real party in interest pursuant to ed)")#i%)P)
17 a4) :(e distri t
ourt dismissed t(e a tion)
WX3+Y :(e SiCt( #ir uit #ourt of Appeals a no.ledged t(at t(e
statute of
limitations .ould !ar Ameri an Kuarantee*s laim unless
ed)")#i%)P) 17 a4
allo.ed it to !e su!stituted for \uri ( S.itBerland) Ro.e%er,
t(e ourtdistinguis(ed !et.een t(e re uirement of standing and t(e
o!9e tion t(at t(e
plaintiff is not t(e real party in interest, and it (eld t(at !e
ause L\uri ( Ameri an
admittedly (as not suffered in9ury in fa t !y t(e defendants, it
(ad no standing to
!ring t(is a tion and no standing to ma e a motion to su!stitute
t(e real party in
interest)L ld.
WX37Y Ot(er ourts (a%e also determined t(at a plaintiff annot
rely on
pro edural rules similar to #i%)") 17 A4 to ure a la of standing
at t(e
ommen ement of litigation)) #av%s v. 6ageo Corp. 81 )3d ++1, +78
t(
#ir)20074 L.(et(er or not 'uC .as t(e real6party6in6interest, it
does not (a%e
standing, and it annot ure its standing pro!lem t(roug( an in%o
ation of
ed)")#i%)P) 17 a4L4QClark %)8ra%l%ner Corp. 2 2 )3d 388 10t(
#ir)20004
ta!le4, opinion reported at 2000 G- 1+ 2 noting t(at t(e
plaintiff annot
8
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49/84
&retroact%vel( 'ecome t(e real6party6in6interestL in order
to ure a la of
standing at t(e filing of t(e omplaint Uemp(asis si V4Q accord
State %) *ropert( at
:?1@ -a%n'ow #r%ve 7 0 So)2d 1025, 102761028 Ala)1 4 re9e ting
t(e
argument t(at a la of standing an !e ured after filing of t(e
omplaint4Q
Consumer Fedn. o$ Am. v. Up"ohn Co. 3 + A)2d 725, 72 ')#)App)1
754eCplaining t(at dismissal for la of standing is onsistent .it(
')#)
Super)#t)#i%)") 17 a44Q see also McLean %) 2*Morgan Chase Bank
!atl. Assn.
7 So)3d 170, 173 la)App)20124 La party is not permitted to
esta!lis( t(e rig(t
13
S/P" M #O/": O OR@O
to maintain an a tion retroa ti%ely !y a uiring standing to file
a la.suit after t(e
fa tL4)
WX38Y Ge agree .it( t(e reasoning and analysis presented in
t(ese ases)
Standing is re uired to in%o e t(e 9urisdi tion of t(e ommon
pleas ourt)
Pursuant to #i%)") 82, t(e "ules of #i%il Pro edure do not
eCtend t(e 9urisdi tionof t(e ourts of t(is state, and a ommon
pleas ourt annot su!stitute a real party
in interest for anot(er party if no party .it( standing (as in%o
ed its 9urisdi tion
in t(e first instan e)
WX3 Y A ordingly, a litigant annot pursuant to #i%)") 17 A4 ure
t(e
la of standing after ommen ement of t(e a tion !y o!taining an
interest in t(e
su!9e t of t(e litigation and su!stituting itself as t(e real
party in interest)
&ffect of "ack of Standing on oreclosure 'ctions
WX 0Y :(e la of standing at t(e ommen ement of a fore losure a
tion
re uires dismissal of t(e omplaintQ (o.e%er, t(at dismissal is
not an ad9udi ation
on t(e merits and is t(erefore .it(out pre9udi e) See State e/
rel Coles %)
7ranv%lle 11+ O(io St)3d 231, 200760(io6+057, 877$) )2d +8, X
51) =e ause
t(ere (as !een no ad9udi ation on t(e underlying inde!tedness,
our dismissal (as
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8/20/2019 Feb 2014 Brief 1.
50/84
no effe t on t(e underlying duties, rig(ts, or o!ligations of
t(e parties)
onclusion
WX61 @t is fundamental t(at a party ommen ing litigation must
(a%e
standing to sue in order to present a 9usti ia!le ontro%ersy and
in%o e t(e
9urisdi tion of t(e ommon pleas ourt) #i%)") 17 A4 does not
(ange t(is prin iple, and a la of standing at t(e outset of
litigation annot !e ured !y
re eipt of an assignment of t(e laim or !y su!stitution of t(e
real party in
interest)*
WX 2Y Rere, it is undisputed t(at ederal Rome -oan did not
(a%e
standing at t(e time it ommen ed t(is fore losure a tion, and
t(erefore it failed
1
January :erm, 2012
to in%o e t(e 9urisdi tion of t(e ourt of ommon pleas) A
ordingly, t(e
9udgment of t(e ourt of appeals is re%ersed, and t(e ause is
dismissed)
Judgment re%ersedand ause dismissed)
O*#O$$O", #)J), and P @ ", -/$'= "K S:"Al:O$,
A$\l$K ", #/PP, and M#K ="OG$,JJ), on ur)
]]]]]]]]]]]]]]]]]]]]]]]]]]]]]
:(ompson Rine, -)-)P), S ott A) Ting, and :erry G) Posey Jr),
for
appellee)
Andre. M) ngle, for appellants)
=ru e M) =royles, urging re%ersal for ami i uriae Romeo.ners of
t(e
State of O(io and O(iofraud losure)!logspot) om,
Ad%o ates for =asi -egal uality, @n ), and Andre. ')
$eu(auserQ
-egal Aid So iety of #le%eland and Julie T) "o!ieQ -egal Aid So
iety of
50
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Sout(.est O(io, -)-)#), and $oel M) MorganQ #ommunity -egal Aid
Ser%i es,
@n ), #(ristina M) Jani e, and Paul ) \indleQ and O(io Po%erty
-a. #enter and
-inda #oo , urging re%ersal for ami i uriae Ad%o ates for =asi
-egal uality,
@n ), -egal Aid So iety of #le%eland, -egal Aid So iety of
Sout(.est O(io,
-)-)#), #ommunity -egal Aid Ser%i es, @n ), O(io Po%erty -a.
#enter, -egalAid So iety of #olum!us, Sout(eastern O(io -egal Ser%i
es, -egal Aid of
Gestern O(io, and Pro Seniors, @n )
]]]]]]]]]]]]]]]]]]]]]]]]]]]]]]
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5
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55
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5+
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57
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58
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5
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+0
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+1
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+2
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+
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+5
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++
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+7
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+8
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+
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71
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72
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7
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75
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7+
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77
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E4hi'it )J*
Assignment of Mortgage from Option One Mort) #orp)
to Gells argo =an $a)
78
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E4hi'it ) *
$oti e of iling of Assignment
7
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80
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81
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82
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83
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