Interlocutory appeals are appeals during the litigation. They are successful if the points in dispute are clearly presented and the case is made that the ruling is likely to shorten the litigation time or prevent unfair burdens from falling on the movant. They should be used sparingly, at most. But in my opinion they should be aggressively pursued when a judge refuses to compel answers to discovery that go to the heart of the case.
Too often judges deny such discovery because they apply legal presumptions as though they were at trial. They “forget” that discovery is not just an investigative tool but part of the process of proof. Such rulings strip the borrower of all defenses thus prejudging the case based upon a discovery request instead of a trial.
The court has entered an order that effectively bars the defendant from proving its defense and rebutting the claim made in the complaint. The court already ruled that defendant was entitled to receive responses. When the claimant refused to comply with that order, Defendant moved to compel. The court denied the motion leaving the defendant with no practical way to disprove the assertions of the plaintiff.
Defendant has reports and opinions from experts in the securitization of debt and financial investigators stating that the named plaintiff as claimant herein, was (a) never properly formed as a legal entity and (b) even if properly formed never complied with Article 9 §203 if the Uniform Commercial Code (UCC) as adopted in all U.S. jurisdictions. A condition precedent to initiating foreclosure proceedings is that value was paid for the debt. It is universally accepted that an assignment of mortgage without an assignment of the debt is a legal nullity.
The consensus of U.S. Courts has been that negotiation of the promissory note is tantamount to transferring title to the debt. Further rules concerning enforcement of the note under Article 3 of the UCC allow for enforcement of the note without ownership of the debt or obligation.
But enforcement of the security instrument ( mortgage) is governed by Article 9 which requires as a condition precedent to enforcement, that the claimant have paid value for the underlying debt.
This is also a jurisdictional requirement because foreclosure without owning the underlying debt would result in forced sale of property resulting in payment of proceeds to the claimant as revenue instead of restitution for an unpaid debt.
In other words such proceeds would not result in redress for financial injury. In addition lack of ownership of the debt further raises jurisdictional issues as to subject matter jurisdiction. And the defense narrative regarding the legal existence of the claimant attacks in personam jurisdiction.
If the current action is mislabelled as a foreclosure and it is indeed a ruse to obtain revenue at the expense of the borrower and the legal party who had paid value in exchange for ownership of the debt, then the action must be dismissed both for jurisdictional reasons and as a frivolous misuse of court process. And that would end the matter.
The denial of the motion to compel forces the defendant to proceed through expensive litigation, taking up precious court resources, and to expensive trial without benefit of reasonable, necessary and permissible discovery.
At present the court is proceeding on the assumption that the action is a foreclosure, which is a civil action for restitution of an unpaid debt. The defense narrative is simply that the current action is labelled as a foreclosure but is in actuality a ruse to obtain revenue, since neither the claimant nor anyone else will receive the proceeds of a successful foreclosure as payment for an underlying obligation owed by the borrower to that legal person.
The entire foreclosure case proffered by opposing counsel, at this point, rests upon legal presumptions without corroborative evidence.
The defense narrative is that
(a) the claimant is not entitled to the use of such presumptions and
(b) the defense must be allowed to rebut the presumption by simply asking questions and demanding production of documents that relate to the presumptions, to wit: that the claimant had entered into a financial transaction in which it had acquired the borrower’s debt.
The defense narrative is that the claimant never entered into a transaction in which it paid value for the debt in exchange for ownership of the debt. Further the defense narrative challenges the current action as a foreclosure and instead asserts that the action is not based upon restitution for an unpaid debt nor will it result to payment to anyone who has paid value for the debt in exchange for ownership of the subject debt.
Accordingly, Defendant demands that the court enter the order commanding the opposing counsel to respond to discovery and that the appellate court reverse the decision of the trial court with an opinion that clearly states the right of foreclosure defendants to challenge ownership, authority and jurisdictional elements of legal actions labelled as foreclosures.
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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. IN FACT, STATISTICS SHOW THAT MOST HOMEOWNERS FAIL TO PRESENT THEIR DEFENSE PROPERLY. EVEN THOSE THAT PRESENT THE DEFENSES PROPERLY LOSE, AT LEAST AT THE TRIAL COURT LEVEL, AT LEAST 1/3 OF THE TIME. IN ADDITION IT IS NOT A SHORT PROCESS IF YOU PREVAIL. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
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