Fear of Being Called a Vexatious Litigant.

Editor’s comment: While I agree with the Appellate Court and its findings, reversing the judgment against the borrower for being a vexatious litigant, I strongly disagree with the characterization of the case which probably comes from bad pleading and bad argument in court. That is the danger of going into court without at least getting a consult from a knowledgeable attorney and why the number of people purchasing time from me for exactly that purpose is rising exponentially. Click Now to Consult with Neil Garfield

The obvious error here is at the  beginning, in the facts. The writer says “Factually it is yet another story of a debtor who borrowed money to buy a home, couldn’t repay it, and then filed everything she could think of pro se to prevent foreclosure.”

If the deal was subject to claims of securitizations and assignments, then the case was probably started improperly and argued improperly. Deny and Discover is getting the traction across the country. The simple reason is that if you admit that  you borrowed the money and impliedly or expressly admit that you borrowed it from the people foreclosing or their predecessors, you are already dead in the water. The transaction should have been denied.

If you admit non-payment and impliedly or expressly admit that the payment was due, you are once again, dead in the water. How do you know the payment was due? How do you whether the creditor has not already been settled out years ago with insurance, credit default swaps, federal bailouts, or Federal Reserve purchases? How do you know whether the investor-creditors made claims against the investment bank that sold them bogus mortgage bonds and then settled the case out? Why would you admit either principal or payment is due without a complete accounting from the subservicer, Master Servicer and Trustee (who by the way  knows nothing because there is probably an unfunded trust with a “trustee” who has no powers). Why would you admit something you know nothing about except that in the public domain you know these things were happening?

Deny and Discover is the way to force the other side to put up or shut up. This case was dismissed probably because the borrower admitted everything that was an element of a proper foreclosure. There was nothing left for the Judge to do except let it go through.

Madison v. Groseth (CA1 6/5/12)

Posted on June 5, 2012 by azappblog

This will interest those involved in foreclosures but for our purposes is significant as a useful discussion of the nuts and bolts of handling a vexatious litigant.

Factually it is yet another story of a debtor who borrowed money to buy a home, couldn’t repay it, and then filed everything she could think of pro se to prevent foreclosure. When she eventually lost, the trial court declared her a “vexatious litigant” and ordered her not to file further lawsuits about the property without court permission.

The court tells us in a footnote that such things are normally done by unappealable administrative order but that since this order was in a judgment (dismissing Madison’s Complaint) it is “essentially” an award of injunctive relief, which is appealable. Sometimes court are very strict about jurisdiction; other times, it seems, “essentially” having it is good enough.

A court has inherent authority over vexatious litigants but this opinion adopts a Ninth Circuit case (DeLong 1990) establishing procedural requirements. The trial court has to give notice and an opportunity to be heard, make a record for review, make “substantive findings as to the frivolous or harassing nature of the litigant’s actions,” and tailor the order narrowly.

The third step was at issue here and the Court of Appeals decides that the trial court got it wrong. Although it apparently made findings about all the lawsuits she had filed, it didn’t specifically find that any or all were frivolous or harassing. “[A] vexatious litigant order must rest on more than a recitation of the number of previously filed lawsuits.” In fact, it impliedly found to the contrary, at least about this particular lawsuit, by denying the defendants’ Rule 11/12-341.01C motion for fees. The court affirms the dismissal of Madison’s lawsuit but reverses the “vexatious litigant” order judgment.

Sometimes we like to think we have some effect on opinion writing, more often we realize we probably don’t, and once in a while we get paranoid and think that courts throw in things we won’t like just to spite us. One or two of the nine footnotes here might possibly be missed if they weren’t there. If jurisdiction is important enough to mention then its one of the more important things in the opinion and shouldn’t be stuck in a footnote. But what, for example, can possibly be the need, after mentioning in passing that this pro se plaintiff sued, among other things, for “conversion” of her home, for a footnote saying (and citing a case) that conversion applies only to chattels? The court sees the problem and so throws in a justification: “to avoid future confusion.” But who will be or has been confused? As for the people in this case, its over – and if it weren’t, if the case were going back on remand, then the court wouldn’t dare mention it. Does the court really think that somebody is going to read this case in the future and decide that it changed the law of conversion? Or is the court going out of its way to augment Ms. Madison’s legal education (for the next time she files one of those non-vexatious lawsuits)? And if it thinks that mentioning this allegation that had nothing to do with anything before the court will confuse, why mention it?

(link to opinion)

45 Responses

  1. Beware their “fixes” for fraud….that is precisely how they are sneaking in complete communism..under the guise of “someone is owed this money.” It’s all a lie….The only proper correction for all of this FED FRAUD is complete Satisfaction of mortgage…clear title to all U.S. TAXPAYERS …….WHO ARE THE ONLY TRUE TITLE HOLDERS OF RECORD……..BECAUSE OF THE ORIGINATION FRAUD….& USURY FRAUD…A BIG FAT GOLD & SILVER DEPOSIT TO THE TREASURY FOR THE ORIGINATION FRAUD…….A BIG FAT CASH REFUND ISSUED IN OUR OWN CURRENCY TO EACH U.S. TAX PAYER FOR THE USURY FRAUD…..JAIL THE CROOKS…ABOLISH THE FED….

  2. Dead in the Water …

  3. Guess what Dc….? In Illinois they are fraudclosing on the mortgage…not the notes..! Didn’t the Supreme Court rule that you can’t separate the 2…? MWAHAHA…..ILLINOIS MORTGAGE FORECLOSURE LAW AKA ILMFL..says a recorded mortgage is a lien….evidence that a debt exists…what ILMFL doesn’t say is the ILLINOIS CONVEYANCES ACT REQUIRES ANY TRANSACTIONS RELATED TO REAL ESTATE MUST BE RECORDED IN SAID COUNTY WHERE REAL ESTATE IS SITUATED….AHA….And the TRUTH OF THE MATTERS ARE, in Illinois fraud, forgery, uttering forged instruments and counterfeiting are FELONIES…….and anyone with knowledge of these crimes who fails to recognize the criminality is a criminal too…Therefore, what we have going on in these “courtrooms” is a crime syndicate, operating under color of law…and….they are doing this right in front of the cops….! Cases dismissed you dirty crooks….!

  4. Is that a personal attack or a general statement…..? Stop the charades….&….just say it.

  5. dead in the water

  6. Rrrrrrright….in the Dr. Evil voice…..frau…cue the laser…!

  7. Imbecile

  8. And none of the trolls seem to have any answers ….just fake ignorance…..these trolls…all wear a disguise….we have the pretend victims…… then we have a pretend lawyer & they all act like cops…. they are just IMPOSTERS here at this site…. imposing b.s. on all of us and calling us imbeciles. Yep…they are traitors right in our midst….I can recognize them almost instantly now…AKA our FRENEMIES…

  9. Yeah right imbecile …

  10. In my comment at 2:03 I meant M&A’s….Mergers & Aquisitions ….not mergers & inquisitions. Even though it sure feels at times like a Roman Merger & Inquisition to those of us in fraudclosure…! Think back to the begining of this…..it sure seemed well organized for such a “shock” to the system….from the beginning it seemed like it was well organized chaos…Like the calmness of Bush & Giulliani during the chaos on 9/11…yeah…just like that.

  11. Imbecile

  12. The so called “good property owners” who kept paying on time….their. failed mortgages are in a different tranche. That’s why the latest wave of refis is here. The repurchases of insolvent mortgages by the FED ….QE 3 will implode everything. The set up for the country to fail is set in place. It makes no difference who you are….doctor, lawyer…if you have a mortgage, its going to fail unless we all stop participating, complying & conforming with fraud. Or unless they end TBTF and the ongoing bailout of the FED….they need to eat their losses or we are headed for a nation of renter slaves…..the microchip is already in OBAMACARE …..and it is in your hand right now ….that credit/debit bankcard you are carrying…The World Bank monetary system…via the FED is the MICROCHIPPED mark of the beast..& Obama already ushered it in for the commies……

  13. All my Grannies called me a Hard Head. So they put a Helment on me Years Ago ……

  14. LOL @ Enraged! What company makes that Helment you are Wearing? I just want to compare our tags …..

  15. There was an exit door from MERS…..when the title company released the deed to PUBLIC……THE BLACK POOLS….where shit mortgages went to die their slow painful death only felt by the property owners who were hurled into fraudclosure.

  16. DCB,

    I am saying nothing because… they haven’t even broached the subject! And it’s been over 2 1/2 years. Doubtful that they will.

    What they tried to do when sued was negotiate a mod. I would have gone for it originally (that was really my first intent) but they flat out refused to consider a principal reduction, which is what i really wanted since property values had already gone down.

    I continued researching and realized that they didn’t exist in the recorder’s file. No transfer or assignment recorded (and that was years after I had started paying them regularly). I concluded that they didn’t have the note and we talked rescission but they didn’t want to hear about it. 6 months later, while I was actively involved in discovery, they offered a mod with a decent principal reduction. By then, I had found out about a very old, non satisfied loan preexisting my purchase of the house and I said “Well, I will insist on a hold harmless and indemnification agreement first.” They were supposed to get back to me but never did.

    10 months ago, after having refused to comply with discovery and allow us to depose the employee “most knowledgeable about this account”, they approached me with an offer to rewrite the entire contract and slash more than half my principal (over $100K). Again, I answered the same thing: “It will have to be subject to a solid hold harmless and indemnification agreement. In addition, I pay no closing costs and I don’t extent the length of my mortgage. Lastly, I don’t want it to be an FHA, FNMA, Freddie or what not and no MERS involved.” They were supposed to get back to me and never did. Since it’s been getting better and better, I’m waiting.

    They don’t have the note. I know it, they know it and they know that I know it. We’ll see who caves in first. I’ve got nothing to lose and I’m saving a bundle in the meantime.

  17. The TRUTH IS….the financial transaction never occurred because of the ORIGINATION FRAUD…that is what they are really hiding. What if the note never went into MERS …and there is no legal assignment..? There were obviously other ways they played the game…..M& I’s maybe…?

  18. Let me say this differantly… They never built an EXIT door at MERS. That is why it Exploded. Lack of Performence. Limp in the Water. Elephant in the Room. etc…

  19. I am not an Attorney … and your Question is of a Legal Matter. 🙁

  20. OK but im assuming that the debtor homeowners are not paying the monthly pmts—so if you get a notice of default under UCC you can demand presentment —because they must present the original 3-301-9—-it should not be technically in default unless UCC conformity—people admit default—but default only occurs if you do not pay the holder of the note–another party cannot assert you are in default without establishing there is a nonpayment to the proper recipient–or his appointed agent—-

    so would you incoprorate a demand for presentment with denial of default?? do you simply allege i am not in default?

  21. To Error is Human … to deny or fluff it up is Not Being Truthful. To continue to operate above the law is unacceptable. And Performance of a Contract is the Law. They Never opened the back door at MERS to let the notes or titles out. EVER!

  22. Colin Powell & George Stephanopolous are C.F.R members too…

  23. Surprise…NY MAYOR BLOOMBERG IS A MEMBER OF THE C.F.R. SO IS LARRY SUMMERS..! THEY ARE ALL IN THE BIG CLUB..!

  24. BLOOMBERG NEWS HEADLINE……FORECLOSURES DROP TO 5 YEAR LOW FOR SEPTEMBER……

  25. Read about….THE HIDDEN CONTROL OF THE C.F.R…
    http://www.crossroad.to/Quotes/globalism/cfr.htm

  26. Very Nice Enraged! *5* You get moved back up to the first row!

  27. sure sounds like Arizona is no longer part of the United States of Amerikkka

  28. Oh yeah shadowcat…..read this….NEW WORLD ORDER…
    http://commieblaster.com/nwo-cfr-bilderberg/index.html

  29. DCB,

    ER —in an advance case as plaintiff–how can you raise the failure to present for dishonor?

    Interestingly, (and I have since learned that it is not uncommon: banks are immediately put on the defensive when homeowners go on the attack and accuse them of conversion and unjust enrichment with evidence to back it up and it becomes more difficult for them to assert their standing to foreclose), going on the attack for statutory violations has not resulted in any counterclaim. So the issue of note is still moot at this point.

    What people need to understand is that, when banks are sued, they don’t know how much information the homeowner really holds. Countering in foreclosure has the potential to blow in their face and to render their defense even more difficult.

    Makes sense?

  30. Read all about it here..THE COUNCIL ON FOREIGN RELATIONS AND THE TRILATERAL COMMISSION….THE TWO ORGANIZATIONS THAT RUN THE UNITED STATES…
    http://www.theforbiddenknowledge.com/hardtruth/cfr_and_trilateral_commission.htm

  31. YES DCB…. YES!!!!!

  32. 67 bottles of rum missing from the wall … Its apparent that the student in the 6th row, seat 4, will not be moving to the next level, she has failed reading comprehension. Sheeeesh! Does somebody want to explain it to her?

  33. THE COUNCIL ON FOREIGN RELATIONS IS THE COMMUNIST PARTY U.S.A….Here is a list of their members..
    http://www.cfr.org/about/membership/roster.html

  34. They were 10 year bonds….they weren’t conventional mortgages….it was all in the structuring of the dirty deals….that is how they set us up to fail…& never recover……all done without our knowledge….The FED Repurchasing of their own insolvent debt they created is going to create complete communism …when those repurchases fail & they will….the whole place is going to go down in flames..

  35. This is an evil communist plan to steal everything from the American people….This tyranny was all fraudulently induced by legalizing crime. This was done mainly by way of the COUNCIL ON FOREIGN RELATIONS…..THE CFR….CRIMINAL FRAUD RING….THIS IS HIGH TREASON..!

  36. I really think as far as what people could most easily claim–is that they simply have not been released from debt in accordance with the UCC—-and that constitutes the financial injury. Releases of debt [to be distinguished from mortgage] by non-existent trusts —that you cant go back on if a holder comes along later.

    This happens commonly–it is especially irksome when the “trust” has had no mortgage loan schedule filed per the PSA, IRC SEC rules and UCC Art 9—-that is a lot of gaffes. Strongly suggests notes sold miltiple times. It could be on two internal trust records serviced by the same collection agency for example. Since these are the worst operators anyway—they would just write t off to industry confusion–but still want that 2nd collection anyway. Thus it is the 1st payoff that is the fraudulent one–the 2nd is the original note-holder. you have to assume that.

    ER —in an advance case as plaintiff–how can you raise the failure to present for dishonor?

    They dont that very much—-its like being handed a hot potato—a supposed original note—–once they hand it to you what do you do with it—think about what happens if you next day hand it back saying its a copy? what will they say? where is your evidence of deceit?

  37. This has nothing to do with the rule of law. This is color of law….it’s a theory….it’s hidden tyranny.

  38. @DCB … Let me know when you Pass the Bar. I know lots of sober folks who can use the help. 5*

  39. taking by deceit–how many ways can it happen—or see expansion, as where they might take the home lawfully but deliberately freeze it on your insurance policy—would that be deceitful taking of house for wrongful purpose–ie to set up an insurance fraud, Or would it be a taking of your insurance profile—reputational damages?

    Would trickery used to seize a house where the claimant lacked authority to release you on the note–would that be a “taking by deceipt” —–do you have to suffer it as contracting party or can it simply be a reopener of a closed foreclosure case?

  40. It appears the underlying reason this case failed so miserably (for the homeowner) is that the Arizona Legislature has done such a miserable job of legislative writing. In essence, if you sign a Deed of Trust (“DOT”) in Arizona, then you hand a blank check to the nominal trustee to go sell it off at his whim. The failure – or inability – of the owner to obtain ex-parte injunctive relief prior to the sale date, instead of a hearing after the sale date, proves fatal.

    Yet that is irrational. Is suit is brought against the Trustee, surely he is on notice that the proposed “sale” is under challenge. Continuing with a sale under those circumstances is foolhardy pretty much everywhere – except apparently in Arizona. Who would anticipate (or know) that? I wouldn’t. I would anticipate that a trustee proceeding in face of a suit would be open to huge damages. The AZ Legislature deftly disarmed that by writing in a provision (or, at least, so it has been interpreted by the Courts) that says: no injunction in place (not one applied for, but actually in place), you waive your rights. Is that absurd? Yes. Irrational? Yes. Conclusion: do not buy land in Arizona. Avoid the place; it is insane.

    There are other sidesteps, “errors” if you will, that Homeowner Madison made: by leasing a portion or all of the property to another prior to the “sale,” possessory rights would ensue and those remain unaffected by an ejectment action against Miss Madison. Also, by filing a Writ of Audita Querella, she could have forced the matter into further review (although the prospects seem dreadful in Arizona). Yes, she can still sue for damages, but the presumptive waiver by failure to obtain an ex-parte injunction seems a mighty hurdle.

    I further think that the B.A.P. got it wrong in “In re White,” see fn. 5, where the automatic stay is held not to apply to debtor-initiated suits. the reason is logic: the purpose of the stay is to allow the debtor time to reorganize his affairs, which cannot be done if the debtor is enmeshed in suits, including those of his own filing. That logic has not penetrated within the 9th Cir. B.A.P.

    Finally, the big evil is the way the Court interprets Statute 33-811(c) [pgs 7-8]; the “trustee” is not even required to mail the trustor a notice of sale, only mailing to “other parties.” Although the court recognizes the inherent inequity of this in reciting Cook v. Losngard [para 12], it is hardly palliative. So, in sum: you could have a vacation home, not be in the State for a few months, and the trustee sells it doe to some internal error on his part, but since you did not object by obtaining an ex-parte injunction, you have waived all rights and defenses, and have to lump it. Just lovely. Don’t buy property in Arizona. And, given their politics, who would want to? Boycott the entire State.

  41. Shelley Ericsson
    If Feel ya. I’ve never been vivacious anything in my life. Yet, opposIng council can walk into court perjure themselves play procedural tricks and ex parte amongst themselves up the yazoo. We know it’s an unlevel playing field
    Who said life was fair.

  42. @Shelly… a BK Attorney .. The Federal Court is where you will Find the Truth. God Bless!

  43. The chattels conversion—its aka theft in some instances. The difference is intent to deprive. So if im driving my herd up the valley and a couple neighbors cows get mixed in without my specific knowledge—then its unintended conversion—not theft

    In the real estate context conceivably different terms might be offered–but the allegations should be similar: I had property, my property was seized without the proper authority of the person to do it. ie unlawfully. Problem is that the literal application absent fraud [particularity] would mean taking the house by force without legal cover. Landlords do it all the time–but its their house. if the title is in homeowners name–then either by court action or agreement, the taking becomes authorized. Theft is fraudulent—intent to deceive, to obtain by a deceit—but what would it be called if taking by deceit–maybe just that —no fancy words–just taking by deceit–and lay out how: 60 days late to be able to discuss mods; dual tracking, part of greater investor fraud which is relevant to motivation of defendant.

  44. In so many states homeowners like myself have tried to pay attorneys to help us and after as much as nine thousand found we were not being represented. Many attorneys tell us, you dont have enough money to fight the banks. Or if I help you I will be disbarred. So we go out without the education and knowledge to throw rocks in every way we know how to due to we know one thing well. We have been screwed and we are not going down without a battle. After we begin our fight and have lost it due to improper proceedings we sometimes luck out and find attorneys finally. Some never do. The banks count on this and we fall prey to them daily. Some homeowners are so financially distressed due to we had incomes to support us and they were swiped out from under us at a fast speed. The bills dont die with the economy. The bills are still alive and owed to the crooks that screwed us. We are victimized over and over and our government thqt should be protecting us are protecting and enabling the crooks. Now as I understand it the rule of law states Pro Se should not loose their case due to technicalities. I have seen this somewhere along the line more than one. So is not the process of deny and objection missing a technicality.? The judge can see we are aguing we dont owe the imposter fraud for the note. Most of us believed we owed this party until we discovered fraud. And found we did not. I agree get an attorney when and if you can and to make sure they are good at what they do and get it. But when you can not what then? Who is going to protect us. I took mine to a lititagating attorney who told me to submit it, myself I had done a good job and could possibly win and I am in the appeals court over proceeder failure.

  45. It strikes me that the style of the courts writing was aimed at laymen. The chattels issue for example. Chattels means cattle.

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