They Will Get You on Procedure Everytime

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Madison v. MERS et al

Madison v MERS et al

Editor’s Comment:

The Madison decision from the Arizona Appellate Court is an example of two warnings that I have repeatedly stated on these pages, in my books and in my seminars.  First doing an appeal yourself without getting appropriate advice from competent licensed counsel is most likely to result in failure.  It is a rare layman who understands the Rules of Civil Procedure.  And it is even more rare that a layman understands the Rules of Appellate Procedure.

As a result, the Madison decision will be used as yet more ammunition against homeowners, borrowers, and lawyers to “prove” that their defenses are frivolous when in fact the court of appeals decision states the opposite – even while they rule against the borrower.  On appeal the only thing the appellate court is permitted to review are those items on the record.  This is further restricted by the items that are presented as issues on appeal.  The homeowner, appearing on her own behalf, missed two opportunities to force the pretender lenders into a contested adversary position.

Like many other states, Arizona has section 33-811[c]which mandates waiver of all defenses to a trustee’s sale if the objecting party fails to obtain an injunction before the sale date.  The problem here is that the statute is worded improperly but that issue was never raised.  Obtaining an injunction requires a lawsuit filed against the Trustee and the pretender lenders which results in the issuance of a Temporary Restraining Order and which the homeowner will result in the issuance of a permanent restraining order.

Virtually all non-judicial states have a similar provision.  The obvious problem with this provision which violates due process on its face is that it requires the homeowner to first prove his or her case in court before being allowed to assert and pursue defenses and counterclaims. 

This is precisely the issue addressed in the second edition Attorney’s Workbook regarding the realignment of parties.  In a judicial state all that a homeowner is required to do is deny the allegations of the pretender lender.  This puts the matter at issue and allows the homeowner/borrower to proceed with discovery and all other pre-trial motions.  The Arizona statute relied upon by the appellate court requires the homeowner to utilize a crystal ball to determine the allegations of the pretender lender and then win at a preliminary hearing on the merits of the defenses to a claim that has never been filed. 

The issuance of the TRO in non-judicial states is discretionary and not ministerial or mandatory.  Thus the burden of proof is improperly put on the defending party before the proponent seeking affirmative relief (taking the house) is required to file any pleadings or produce any evidence that could be subject to court scrutiny or challenge by the homeowner. 

As applied, Arizona Revised Statue 33-811 [c] is clearly unconstitutional and violates due process.  The homeowner should simply be permitted to deny the factual allegations contained in the Notice of Default and Notice of Sale.  The appropriate party to bring a lawsuit is not the borrower but either the Trustee or Beneficiary.  Once the borrower has denied the factual allegations, the matter should be converted to a judicial foreclosure which is provided for in Arizona Statutes.  In the absence of the beneficiary starting such a lawsuit, it is the trustee who should file an action in interpleader stating that the Trustee is an uninterested party with no stake in the outcome and alleging that there are two parties each of whom allege an interest in the subject matter of the lawsuit and which are in conflict with each other.  The Trustee, not having the power to conduct hearings (the Trustee is not a special master) has no choice but to take unresolved issues to the court and make its claim for attorney’s fees, costs and expenses to having had to file the interpleader.

Naturally Maidson failed to raise any of these issues. So the appellate court was left with a statue which is “on the books” and which operates to waive all defenses of the homeowner to the Trustee’s sale – in the event the homeowner fails to obtain an injunction before the sale date.  In the Madison case, needless to say, the homeowner failed to obtain and apparently failed to seek an injunction prior to the sale.  Therefore the appellate court was perfectly within its right to simply affirm the trial court’s decision that stated that the homeowner had no right in this instance to assert any defenses.

In such cases of such conflicts of obvious due process the ACLU and other such organizations have occasionally been successful in having an appellate court rule on an issue that was never presented in the trial court and may not even have been presented in the initial briefs of the parties on appeal. 

Hence the outcome of this case, like so many others, was a foregone conclusion simply based on the most simple application of statutory law and the rules of civil procedure as they are currently applied in Arizona. 

Failing to obtain the TRO is therefore the same as admitting all of the allegations of fact contained in the Notice of Default and Notice of Sale and all of the allegations that would have been pled in a judicial foreclosure.  The court affirmed the trial court’s decision to dismiss the homeowner’s lawsuit. 

The kicker in this case is that the appellate court went on to overrule the trial court for having declared Madison a vexatious litigant and further restricting her ability to file future lawsuits.  This was not only a violation of due process it was a demonstration of court bias and I invite attorneys who are committed to the movement to assist Madison in attacking the bias of the trail judge and getting the decision of the trial judge vacated thus rendering the appellate decision moot. 

It is plainly outrageous for any judge to declare that a litigant is vexatious or frivolous when they clearly have never been heard on the merits of any of their claims or defenses.  The retired judge who heard this case should be prevented from hearing any further cases involving foreclosures or related evictions or any other such cases. 

Without beating a dead horse the section of the opinion entitled “background” clearly shows that Madison failed to deny the essential elements of the foreclosure and therefore all of the obvious issues regarding the identity of the creditor, the status of the loan, the nature of the actual transaction, the substitution of beneficiary, the substitution of trustee, and all the other claims and defenses were deemed admitted by both the trial court and the appellate court.  If the case can be reopened on the basis of the bias of the judge and the bias can be shown to have predated the decision that was appealed and if that results in vacating the entire order the homeowner might have had an opportunity to obtain the injunction and assert the claims and defenses, and attack the statute as it is applied.

 This is the reason why I reluctantly agreed to start a national law firm to assist homeowners and borrowers and their lawyers.  I have been doing nothing but writing, educating, and consulting for 5 years only to see the work and analysis performed by me or my team to be presented improperly and after which most defenses and claims were waived.  In the GarfieldFirm.com all of the attorneys recruited will be required to follow appropriate professional standards in the research and advocacy of the positions of clients who sign up for representation. 

There is no guarantee of any result when you hire any attorney or any professional.  The only guarantee is that they will apply their best efforts on your behalf.  The GarfieldFirm.com is a operating under a business model which requires a 50-state rollout to oppose all of the foreclosure mills who currently act in concert with each other.  Their opposition will now be an organized and consistent challenge to the fraudulent proffers of false, forged and fabricated facts and evidence in and out of court.  As I have stated before, we are only halfway through this mighty contest.  Until now we have been taking all the punches.  Now it is our turn.

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36 Responses

  1. […] Read more… Posted in AZ, Banks, MERS, News Around The Country, States « Attention Hawaii Homeowners with Bank of America and Ocwen Loans… Let Me Help Inside the Mind of JPMorgan Chase CEO, Jamie Dimon » You can leave a response, or trackback from your own site. […]

  2. Court Procedures can work FOR and AGAINST you—and the bank.

    I won my house FREE & CLEAR because the bank didn’t follow procedures:

    Here’s the signed judgment: http://www.scribd.com/doc/90184879/I-Won-my-House-FREE-CLEAR-Here-s-HOW

    I also have acquired ‘2’ Preliminary Injunctions in [non-judicial] CALIFORNIA now [Note: getting a court to give a P/I in Calif is RARE].

  3. @Guest

    from your link:

    “A nonjudicial foreclosure sale is accompanied by a common law
    presumption that it ‘was conducted regularly and fairly.’ This
    presumption may only be rebutted by substantial evidence of prejudicial
    procedural irregularity. . . . It is the burden of the party challenging the trustee’s
    sale to prove such irregularity and thereby overcome the presumption of the sale’s
    regularity.”

    NICE. The court must assume/presume that these ass–s’cuz me—lawyers—are doing everything correctly…WE—THE HOMEOWNER “MARKS”—must prove the fraud…WE have to do it—

    Get this—the SPOKESMAN for Deutsche Bank (John Gallagher) has said that they—QUOTE: “HAVE NO BENEFICIAL INTEREST IN ANY OF THE LOANS—THEY MERELY ACT AS TRUSTEE”—okay, so–if that guy in your link had presented that to the judge—what would the judge say to that?

  4. judges sold out to banks even against lawyers: http://www.courts.ca.gov/opinions/nonpub/B233529.PDF

  5. Moderator,

    Please replace my name on the previous post “Neil Saaty” with “SilverSky”.

    Thank you.

  6. My heart sank after I read this about Madison case. My attorney screwed up and didn’t file for a TRO, so my home, in California, was sold to a third party at auction. But I was very confident I would prevail at the upcoming unlawful detainer trial by jury because
    1. I have a copy of a notarized Assignment of Deed of Trust to Fannie Mae, yet the originating “lender” was the stated beneficiary in the NoD and NoS,
    2. I had sold some assets to raise the money to make my loan current in case the originating lender were to show me that they are the true owner of the loan,
    3.My situation that led to “default” had been rectified,
    4. I had $100K equity in the house.
    I was certain that all this would convince a jury that the sale was unlawful and that I wasn’t merely using legal technicalities to keep a house that I could no longer make payments on.
    Now it seems that I can’t use these defenses. Is that correct?
    And does failure to file a TRO preclude me from filing a lawsuit seeking to have the sale declared void?

    Neil wrote “There is no guarantee of any result when you hire any attorney or any professional. The only guarantee is that they will apply their best efforts on your behalf.”

    In my case my attorney certainly didn’t apply their best effort–he failed dismally. Anyone know a good legal malpractice attorney?

  7. @Neil Garfield re: They Will Get You on Procedure Every time: This recent opinion & facts behind it prove that U.S. legal system is a an inherently organized crime which goes out of its way to prove that EVERY TIME: http://www.courts.mo.gov/file.jsp?id=52920 thus making no difference by engaging expensive appellate lawyers whose only guarantee is cheating victims even further…

  8. Hey E.ToLLe,

    What if… it was much, much bigger than America? Remember that those guys destroyed the entire world economies (beside Papuasy Guinea’s and that’s only because they don’t want money and want to keep bartering…)

    I keep putting 1 + 1 together. For example, why has Interpol’s budget tripled since 2008? And in case you haven’t noticed, not one day passes by now without some CEO’s name being associated with RICO.
    Today, in the NC article, it is Dimon’s and Corzine’s. Those guys haven’t left the country but… might it be because there really is nowhere to go for them?

    Listen: delusional is pretty good. Keeps me going. It’s a heck of a lot better than moping around, isn’t it? If I ever get there, I’ll know they’ve got to me. I ain’t gona let that happen.

  9. @ET

    Ha…that’s what it’s coming to.
    I just saw this article—
    http://www.bloomberg.com/news/2012-06-05/europe-s-crisis-sees-vulnerable-losing-aid-to-bailed-out-bankers.html

    “You have to rescue the systemic banks because if you let them go bust you can make the depression even worse and unemployment goes up even further,” Van Vliet said in a telephone interview. “If Bankia went bust, what would happen to the other Spanish banks?”

    Yes, friends, RESCUING FRAUD is now the way of the world…to hell with humanity.

    Global collapse is coming.

  10. @ Enraged, there’s a huge divide between positive thoughts and delusional thinking. Has this administration, congress, any of the various regulators – anyone – anywhere – shown even the slightest inkling of what you’re alluding to?

    Remember, Dimon and Obama are Country Club members. We aren’t. Yves Smith has a great piece up right now detailing why Dimon and Corzine should be in leg irons as we speak.

    If there had been even harsh talk about the criminality, maybe. But at some point one needs to realize that the game plan has been, and will continue to be, to recapitalize the banks at any and all cost, and you and I are simply a cost of doing that business by entities that morph one minute from bankers, the next as lobbyists, the next as senior staffers, the next as regulators and senators.

    We will have turned the corner you’re hoping for when Dimon and Corzine are frogmarched to the Greybar Hotel. Until then, enough hoping for change. The only universal change in America are the various address changes of we the people, as we go from being once pretend homeowners to subjects of the rentier class. Bone up on service etiquette, you know….things like, “Can I pour you another Champagne sir?” The bright side is that we’ll always be able to work in their clubs and mow their lawns.

  11. Guys,

    I want to submit something to you. Might be off the wall (been known for getting carried away…) but it’s worth looking at:

    NY wants to reduce drug charges from felony to misdemeanor. Inother words, NY doesn’t want to throw more people in jail for relatively minor offenses. We know that our jails are overcrowded with drug offenders. In fact, per capita, we have the highest percentage of inmates in the entire world!!! Something like 783 inmates fer 100,000 people and 90% of those are on drug charges.

    What if… the idea was to make room for more serious offenders? Think about it: WS is in NY. That’s where the great majority of the crimes have been committed by the banks. So, it would make sense that there should be prosecutions in NY. What if, as we read it over and over in those “fringe” sites, mass arrests were coming down and we’ll need all those cells rather fast?

    I like to think positive thoughts and I really, really like that one…

  12. And someone wrote something very, very telling (can’t remember whom…): “If our administration had been serious about fixing the economy, all they had to do from the very start was reinstate Glass-Steagall. The Volker rule will never accomplish what Glass-Steagll did and the Volker rule is so full of holes that, within a few months of implementation, we will have to deal with yet more fraud and circumvention.”

    Might be Bill Black. Pretty sobering…

  13. I would seriously like to know WHY—almost 4 years later—they still aren’t saying “out loud” that there is no M in the MBS…we know it’s true…where are the whistleblowers for that? I don’t get it. I guess Dr. Lan Pham was the only one? And she was fired because she found out…So hard to believe NO ONE else can come forward…

  14. Support for Repeal of the Glass-Steagall Act
    When he was Treasury Secretary, Larry Summers advocated repeal of the Glass-Steagall Act, which was a target of the financial industry. In their report – “Sold Out: How Wall Street and Washington Betrayed America” – Robert Weissman and Harry Rosenfeld identified the repeal of this legislation as one of the main causes of the 2008 financial crisis. According to Weissman and Rosenfeld, “The Financial Services Modernization Act of 1999 formally repealed the Glass-Steagall Act of 1933 (also known as the Banking Act of 1933) and related laws, which prohibited commercial banks from offering investment banking and insurance services…The 1999 repeal of Glass-Steagall helped create the conditions in which banks invested monies from checking and savings accounts into creative financial instruments such as mortgage-backed securities and credit default swaps, investment gambles that rocked the financial markets in 2008.”

  15. …On July 30, 1998, then-Deputy Secretary of the Treasury Summers testified before the U.S. Congress that “the parties to these kinds of contract are largely sophisticated financial institutions that would appear to be eminently capable of protecting themselves from fraud and counterparty insolvencies.”

  16. Anyways…here is someone who really makes me want to hurl—the person who just had to get rid of Glass-Steagal—and that’s why we are in the mess we are in:

    http://www.huffingtonpost.com/2012/06/06/larry-summers-were-killin_n_1574320.html?ref=business

    “We’re killing the next generation when we defer maintenance,” he said. “We’re killing the next generation when they only go to school for four days a week because that’s all state governments can afford.”

    Yeah, Larry—guess what—YOU KILLED the next generation…We have YOU to thank.

  17. getting really weird here…

  18. Digging gold at the wrong place, pal. I don’t have a pot to piss in. You’re gona have to put your hurt feelings behind you ear and smoke them at a later date…

  19. Tolle v. Enraged et al

    Plaintiff E. Tolle, a resident of the internet without any existence otherwise or anything even remotely resembling a life, upon lack of information and in total disbelief, alleges that defendant Enraged should have known that the misspelling of Tolle into Toile was causing untold mental anguish and slander of a perfectly good ripped off pseudonym.

    I ask for treble damages, and in the alternative, woofer wages.

    And I do also agree that we should kick the banker’s asses as high as we can. This is one huge FELONY from sea to shining sea. Do not give up. Use your last penny. Death to Wall Street.

  20. @Carie,

    No kidding! I had to check in previous posts and OMG! You’re soooo right! E.ToLLe. Not ToiLe but ToLLe!

    Well, when I get rich on suing my servicer (for want of a good whistleblowing gig) 🙂 , it’s another thing I’ll need: new glasses.

    Anyway, E.T. eats lawyers alive. That’s all there is to it.

  21. An L…not an I

  22. No, silly TOLLE—not TOILE

  23. Carie,

    I know it’s E. Toile. And Iwantmynpv. Humor me please…

  24. @enraged

    Of course it’s worth analyzing before hand. But we can’t give up on everyone who’s been kicked out.
    And by the way—it’s E.Tolle…not Toile…sorry, I felt the need “correct”…;)

  25. ergaged- like- what you wrote to neidermeyer, exactly seen it living it.

  26. enraged
    im a nurse i deal with bullet wounds. but if the prverbial hits the fan
    i have skills.

  27. Niedermeyer,

    The only problem with attacking on all fronts is that judges have a very, very short attention span and limited understanding of the extent of the fraud, coupled with an ego the size of Texas. When they feel they’re in over their heads, they hang on to the very few thing they truly understand and throwing at them too much info can derail an otherwise perfectly good defense. It’s a serious risk worth analyzing beforehand. That’s my opinion, for what it’s worth.

  28. And by the way, our friend Toile is gona be delighted to read that Baum has filed Chapter 11 (even though it isn’t his state). He’s been eating lawyers live for quite some time now. The man has a real appetite for those. Especially the fat, despicable and vicious ones. You can serve them to him cooked anyway you want: he’ll eat them!!!

  29. Ray,

    I’m not sure I understood. Are you in the house still? If it’s the case, by all means, stay put! And congratulations! (And I hope I read well…)

    Any way you could file for quiet title while there is stay? Might be worth looking into. because even if Steven Baum filed for chapter 11 reorg, it doesn’t mean the bank can’t find another lawfirm and take back its files. What in reorg is the money end of it. Not the actual files. So, if the bank leaves the files with Baum, it’s their loss!

  30. I am one of many other people who kicked out U.S. Bank GMAC & Steven J. Baum P.C. in New York my case is Quiroz Et Al vs U.S. Bank GMAC & Steven J. Baum P.C. these people have filed chapter 11 Bankruptcy and my Appeal is STAY…I called the Court of Appeal Second Circuit N.Y. and they told me my case STAY and it could take several months or even years for a resolution even do I am in my home over 5 years without paying mortgage taxes and insurance for Fraud they have committed and not handling proper legal foreclosure procedure..I believe you guys can do the same…GOOD LUCK

  31. Deborah,

    Hate to say but… that might be a reason we have guns in this country. Honestly, there has to be a point where it becomes a viable alternative…

  32. everyone- the spartan warrior story- greece wooped peru,s ass- on their own (peru) land- read and be inspired
    and carie- how bout those of us who were supposed to be represented by legal cuncil in court and got default judgement on indymac and still got kicked out – left under duress, forcible filed, so how do you pay a bond/rent AND litigate and pay council, that weekend i called council he diasappeared- poof- evaporated. To Neil- can i be prejudiced against for acts of bad council ? probably under the ‘new” law…theirs. i still believe law is law and sooner or later we will bust their dam.

  33. They’ll get you on procedure, they’ll get you on standing, they’ll get you on venue, they’ll get you on jurisdiction, they’ll get you on law, they’ll get you on pretty much anything they damn well choose to.

    And then, it’s up to us to get them back!!! And we will. We’ve already started to… Slow progress but steady one.

  34. I’m going to join carie here and state that we need to attack on ALL fronts … and in all legal ways …

  35. Hey Neil—how about some info for all the homeowners (not referring to me) who were illegally kicked out of their homes before they even knew what hit them? Isn’t the statute of limitations issue only regarding from the time of KNOWLEDGE of the fraud? So the millions who were kicked out and just now found out about the fraud(s)—can do something NOW–there are SO many people who were already kicked out who need help to get the trustee’s deed upon sale rescinded—or whatever…it can and has been done…I think we need to fight back on all angles…not just issues BEFORE the sale…

  36. […] Madison v MERS et al […]

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