Discovery Guidelines

It’s part of motion practice and part of other preparation for an evidentiary hearing. Although it is rare that these matters are set for hearings where witnesses testify and documents are proffered in evidence, they are becoming more common. That’s why I am considering doing the “OBJECTION! Workshop” in August or November which is the companion to the Discovery and Motion Practice Workshop this coming Sunday and Monday. In fact I would like some feedback as to whether there is an appetite for a three-day workshop that includes, Discovery, Motion Practice and Trial Practice.

Repetition bears repeating as Yogi Berra is said to have opined. So far, these cases are won or lost in Motion Practice and Enforcement of Discovery demands. If you have a strong set of Discovery Requests that the Judge cannot disagree with (without risking getting slammed by an appellate court) then you should be able to direct the Court’s anger toward your opposition. Remember their weak point is that a full and truthful response to your Discovery Response would open up a can of worms for them with regulatory authority, the Department of Justice, Law enforcement in each state and civil suits. And it wouldn’t hurt to repeat that a few times when you get your chance at each hearing leading up to an evidentiary hearing or trial.

Remember that each jurisdiction has its own rules regarding limits on discovery, but eh over-riding one that has always exited since before there were written rules, is whether the Judge will see that your request is not meant to be annoying. It is meant to lead to the discovery of admissible evidence. The test of leading to the discovery of admissible evidence is important in that (1) that is why they call it “Discovery” instead of “pre-evidence review” and (2) you can ask broader questions than those which would be allowable in the evidentiary hearing, simply because you are searching for what WOULD be allowed in an evidentiary hearing.

The BIG mistake that many lawyers and especially pro se litigants make is that they think that discovery and motions are the time to win the case on its merits. No such thing exists. Unless the Judge strikes the pleadings of your opposition because he has had enough stalling and delay from them, you are not going to win anything by conducting discovery, filing a motion or responding to a motion.

So why do I say these cases are won or lost at the stage of discovery and Motion Practice? because it is at this point, or on the eve of a true evidential hearing, that the other side collapses IF they think you are going to draw blood in that hearing. Remember that experience shows that they give no hint of collapse until the hearing is underway or about to occur. They are not stupid and. Treating your opponent like an idiot, treating the Judge like a dunce, guarantees you more hurdles to jump than you came in with. Since you are already in an uphill battle, first do no harm, as they say in medicine.

The more specific you are, the easier it will be to explain to the Judge why their objection is nonsense. The less specific you are, the more room you give the other side to dance around you.

The tools of discovery applicable to these actions include the following:

  • Interrogatories. I would limit the interrogatories (FIRST SET) to 25 including sub-parts, regardless of the rules. That eliminates or mitigates the argument that they are burdensome and over-reaching even given the wide latitude allowed in discovery.
  • Requests to Produce: I would limit the request to produce (FIRST SET) to 10 items including sub-parts, regardless of the rules. That eliminates or mitigates the argument that they are burdensome and over-reaching even given the wide latitude allowed in discovery.
  • Requests for Admission: Be Specific so it counts. If they answer truthfully, you should have something you can use in motion practice and evidentiary hearings. If they deny it, you can move for fees for having to prove something that they had denied.  If they object, it is an opportunity to bring it up for hearing, possibly along with a Motion to Compel the Answers, or a Motion for Better Answers wherein you point out where they are being evasive. Like other forms of discovery I recommend that you do it in small sets. I would limit the Requests to 10 for each set.
  • Subpoena Duces Tecum for Deposition of Third Parties: This requires them to appear for questioning and to bring ALL documents pertaining to the “Loan” which you will identity in as much detail as possible. Missed by most and employed by virtually none. The signatories, witnesses and notaries are the weak links. The appraiser, the party representing the lender a the borrower’s closing, the title agent, the escrow agent, the mortgage broker, an officer of the appraisal company, an officer of the real estate brokerage, an officer of the mortgage brokerage. Missed by most and employed by virtually none. If you know of other parties who are not YET included in the litigation, you can subpoena them to come for (a) depositions upon written questions (b) deposition upon oral questions (where you are actually there) or (c) give them an out wherein if they produce the question you will continue the deposition until such time as you actually need a live person to testify. I like the last one, because it gives you plenty of time to come up with more targeted questions.
  • Notice and/or Subpoena Duces Tecum for Deposition of Opposing Parties: This requires them to appear for questioning and to bring ALL documents pertaining to the “Loan” which you will identity in as much detail as possible. Missed by most and employed by virtually none. The signatories, witnesses and notaries are the weak links. The appraiser, the party representing the lender a the borrower’s closing, the title agent, the escrow agent, the mortgage broker, an officer of the appraisal company, an officer of the real estate brokerage, an officer of the mortgage brokerage. Missed by most and employed by virtually none. If you know of other parties who are not YET included in the litigation, you can subpoena them to come for (a) depositions upon written questions (i.e., you don’t need to appear) (b) deposition upon oral questions (where you are actually there in person or by video link) or (c) give them an out wherein if they produce the question you will continue the deposition until such time as you actually need a live person to testify. I like the last one, because it gives you plenty of time to come up with more targeted questions.
  • Subpoena Duces Tecum for Deposition of Specific Individuals: This requires them to appear for questioning and to bring ALL documents pertaining to the “Loan” which you will identity in as much detail as possible. Missed by most and employed by virtually none. The signatories, witnesses and notaries are the weak links. The appraiser, the party representing the lender a the borrower’s closing, the title agent, the escrow agent, the mortgage broker, an officer of the appraisal company, an officer of the real estate brokerage, an officer of the mortgage brokerage. If you know of other parties who are not YET included in the litigation, you can subpoena them to come for (a) depositions upon written questions (b) deposition upon oral questions (where you are actually there) or (c) give them an out wherein if they produce the items requested you will continue the deposition until such time as you actually need a live person to testify. I like the last one, because it gives you plenty of time to come up with more targeted questions.
  • Access to premises where records and computers are located. They already have an obligation to preserve evidence. You want to use any skulduggery you can find to justify the assertion that you lack confidence that they are doing so and are probably tampering with the evidence since the start of litigation and through the present and will continue to do so unless a forensic analyst is allowed to review their records, method of record-keeping, and their computer servicers and workstations where the forensic analyst will down load all the data and meta data including emails, memoranda, drafts, IM communication etc.

Make certain you have a memorandum ready to explain each request or question or subpoena. The memorandum should address

  • jurisdiction
  • subject matter (causes of action)
  • Facts
  • Statutory Law
  • Common law precedent – civil
  • Common law precedent – criminal
  • Other criminal investigations regarding this topic. we sometimes refer to this as poisoning the well where the court is supposedly prejudiced by allegations of criminality. But the real purpose is to create greater weight to your persuasion of the Judge that that really IS something to look for here.

15 Responses

  1. Another great post…very helpful and instructive.

  2. DISCO TIP
    In doing discovery with the servicer, one very important things to ask for is the Certificate of non-Recoverability and whether or not it has been issued regarding your loan. If it has, then you MAY be off the hook, as this means the trust has declared the loan nonrecoverable and has passed the losses (and tax credit) to the investors

  3. Well stated Maher

  4. Remember the Basics
    M.Soliman

    Case precedent is the borrower receives a loan frm a lender that was sold before it funded. Lenders sell the loan using a forward commitment negotiated before it was originated. No bank wants to fund a loan and intend to keep the loans as held to maturity. Its entered as “Loans Held for Sale” vs “Loans held to Maturity”.

    Lender & servicer are one in the same so no separation of roles under GAAP accounting rules.

    Acceptance of the borrower is normally not subject to any claims or remedies from a lawful sale of an asset in to a trust. Default, a condition subsequent is a verifiable claim for deceptive and unlawful business practices intended to deceive a borrower solely to reclaim an asset lost to the parties at sale.

    Our hunch is the lender was issued a mandatory repurchase for all California loan originations (for example) sold to the trust. An alternative measure was worked out to allow the lenders a window to make good on reclaiming the asset or otherwise repurchase the loans.

    This is a life long fraud the industry has continued to get away with and conditions a borrower’s loan in default to absolutely no remedies involving a workout, modification or short sale.

    Repurchase the asset or make good on the return of the collateral subject the lender to risk mitigation by putting a new borrower in the same slot. The concept is mentioned in detail in the PSA and labels the problem assets as (each) a “deleted loan.

    The Lender sells the entire asset whole with no ability to further control the loans it sold after sale which is defined under FAS 140.

    GAAP and FAS 140 require that a Trust of assets held in trust in a QSPE:
    • hold only passive investments or financial assets
    • function on “autopilot” and
    • be totally controlled by its operative who is a Trustee

    These three criteria are not being met in foreclosures.

    A Servicing agent has no obligation to forward payments not received. Servicing if it is an Obligor constitutes a linked transaction and must make good the entire balance. No, servicers as agents cannot foreclose. Servicers as the lender and seller are foreclsosing and that triggers an accounting nightmare and recivership.

    FAS 140 does in fact allow in most cases the lender seller to foreclose if the original sale is reclassified as a linked transaction. A Linked transaction will shift the current lenders balance sheet into liability “hell” and drop up top a $ trillion in liabilities back to the lender that till now remained off balance sheet. Lenders can foreclose as they are upon reclassifying the assets they lost upon sale to the investment trust.

    Remember, the QSPE or trust is limited to passive investments.

    The subject obligation is owed by the borrower and that does not change. It’s the inability of the lender; seller and servicing agent all deemed one in the same to enforce the security that is impossible to recover without triggering recognition.

    Here is where the extreme gamesmanship comes into play as seen with MERS, broken promises and use of debt collectors.

    TRUST ASSETS ..OR LOANS CAN ONLY BE DELETED AND OR REPLACED . THEY CANNOT BE FORECLOSED UPON . . .UNLESS

    UNLESS A STRAW BUYER LIKE A LTD PARTNERSHIP IS WAITING IN THE WINGS OR ACTING AS THE BUYER IN A STRUCUTRED EXIT STRATEGY – THAT IS FRAUD BROUGHT IN A INLAWFUL TRUSTEE SALE THAT YOU CAN BANK ON .

    BEEN THERE AND …..SAW IT FIRST HAND!

    msoliman
    expert.witness@live.com

  5. 100% financing, as the name implies, offers complete financing of your property. The other option, 80/20 finance your mortgage with two loans. Loans may be made by the lender, but sometimes the seller or the lender is obligated to reach second mortgage of 20%.

    100% financing is easier to handle, but not all lenders offer this type of loan.

    Qualifications for the Zero-Down

    If a credit score of 600 or more may be best, large cash reserves to qualify, too.

    If you choose 80/20 financing with the seller of the second mortgage, you can be treated with sub-prime lenders with a score 560th

  6. The process is deeply flawed.

    I will give you one word – “Power”.

    Angelo – you are right – and New York happens to be one of the better states.

    I will repeat what I have stated before – the goal is to clear the (home) market of foreclosures and move on. That is what is being communicated at every high level administrative authority.

    However, financial markets are extremely nervous, they know mistakes are being made..

    Nevertheless, the individual people do not matter, the goal is to save the economy as whole (i.e. the CEOs and their employees)..

    You could have the best case, with the most evidence, and still lose. It is the old cliche – if a ship is sinking – who do you save? It is not the little people.

    We are up against far more power than you can even imagine. I have been there (and I am NOT in foreclosure).

    Neils workshops are essential – but Neil – something else, in conjunction, must be done. The “little” people are losing – and DESPITE good case presentation and evidence.

    This has been going on since before any of you even knew what was happening.

    Again, the legal system has become deeply flawed – and politics is the root cause. Our economy and the global economy is in deep trouble. When this happens – there is no help for the “little” people – unless someone , with power, stands up for them.

    Suggestion to Neil, and only a suggestion, about a special site in which bad case law can be published?

  7. So if HAL 9000 is running their outfit how do they know you owe any money at all?

  8. Willow ,

    I read that narrative .. and quite simply it doesn’t surprise me. Wells Fargo’s servicing arm is AHMSI and they have a horrible reputation … as servicing for most of Wells mortgages are retained by AHMSI it seems they use a “one size fits all” mentality and disregard the actual mortgage agreement.. What makes things worse (I dealt with them myself) is that their customer service was moved to India and their Indian reps in addition to being clueless will tell you what you want to hear to get you off the phone.

  9. Thursday 20 May 2010

    angelo:

    If most foreclosures do not get to trial, I am guessing that the defendant is choosing not to defend or respond to the complaint. However, that would not apply to most on this site who are taking a pro-active posture in defending against complainging parties who lack standing, as is being learned on this site, unless challenged.

    Yes, the appeals judges can only review for errors and will not “retry” any case. That is the point of making the objections mentioned, for that is the primary basis for the appellate process. Without objection, arguments are waived and there is nothing to review, so no reason to appeal. Making objections is not hard, and is central to preserving one’s case. It does require doing some homework.

    It is all a learning process, and the information shared on this site is an attempt to lower the learning curve.

    Everyone here should be fighting their case in court, and even if summary judgment has been granted against them, the post-foreclosure process is still timely available in which to pursue “newly discovered” material.

    For example, in Illinois, one can challenge a judgment up to a two-year time frame. Most, if not all states should have something similar, although time frames may differ. I respond for those who may think it is too late for be in control of their foreclosure destiny, for no one else has a greater vested interest.

    Cheers!

  10. edge
    I totally agree with you, but most foreclosures never get to trial, so objecting to things is very hard. Its all motion practice for the most part. Most of the NY foreclosure appeals are just asking for the upper court to see if the judge made a ruling mistake, and kick it back to the lower court for another look.

  11. You guys have got to read this story. It’s in 3 parts on this website. It’ll tell you exactly how these guys operate and why they are such screw-ups. It’ll help in your discovery.

    http://www.familyandconsumerlaw.com/2009/02/mortgage-issues.html

    Go to this link then scroll down to this story in three parts:

    When Banks Screw Up: The Strange, Alarming, Sad, and Ultimately Wonderful Case Of Dorothy Chase Stewart:

    Part One: Late fees and Suspense Accounts.

    Part Two: Inspection notices and Price Opinions.

    Part Three: Lawyers, Findings, and The Outcome.

    This story will tell you how our loan servicers use the HAL 9000 to screw up your loan. The attorney who writes this blog is from WI. Good Hunting!

    Willow

  12. Thursday 20 May 2010

    A subpoena duces tecum is a v powerful tool. Anyone not familiar with it should learn what it is and how to us it to your advantage.

    I once used a subpoena ducus tecum to have an assistant states attorney produce his license to practice law. In court, the judge dismissed the case.

  13. CEA: What you need to do is go to a law library and look up all the procedures for discovery, interrogatories, etc, and know them better than your opponent.

    Object!!! when your opponent does not adhere to the rules, and have a few relavent case cites to back up your position. That somewhat forces the judge to pay attention to your side.

    Always remember, your responses to the complaint and motions are not just for the case in court, you are also building a record for appeals by catching the other side in as many errors as possible, and that includes a biased judiciary…even in appeals.

    HOWEVER…you will never prevail in appeals if you do not have objections made on the record. Build your record with that plan in mind. When you object, you have to state a reason why.

    If you are obejcting to something without stating why, the court, and appeals, can ignore your objections. If you object, and then state why, “Hearsay,” “Irrelvant,” etc, then you are building a proper record.

    Unfortunately, few can expect a judge to be impartial or sympathetic to your side. NEVER go to court expecting fairness. You have to demand it and fight for it.

  14. Agree with Neil – discovery, and proper approach, is critical.

    But CEA is right – what do you do when Bank lawyers do everything possible to avoid and judges protect them?

    A major problem in courts.

  15. Thanks for the good work, Neil.

    Could you please address the following unlawful issues and how Defendants’ should pro-actively respond:

    1) Bank’s lawyers file, in the court records (public domain), their response to Defendants’ discovery request for production, instead of handing it over at a pre-determined time and place.
    2) The response contains hundreds of irrelevant pages NOT requested by Defendants.
    3) These pages include Defendants’ social security numbers, copies of alien registration cards, drivers licenses, etc, now published into the public domain.
    4) Request for admission addressed to authorized employees of the bank, are answered, signed and filed by bank’s lawyers/debt buyers.
    5) Debt buyer/collector-lawyer does not answer Interrogatories; alleges to having “sent them to principal” requesting a total of 2 ½ months time to answer.
    6) Judges do not care; all motions for protective orders to remedy above are denied.

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