Destroying, Hiding or Fabricating Evidence: Doctrines Regarding Spoliation of Evidence

The latest issue of the Florida Bar journal contains several interesting articles. One of them is entitled “Spoliation of Evidence and Non-party witnesses.” The author is Gary M Glassman, who is the attorney for Daytona Beach.

The major points of the article that I think are relevant to Foreclosure Defense litigation are that (A) spoliation has a very broad meaning and (B) the refusal to produce documents that are relevant to the case at Bar raises an inference in favor of the homeowner, and might even give rise to a cause of action for damages.

Foreclosure lawyers have long relied on the fact that they could stonewall request for information and then use fabricated documentation containing false information with impunity. But a proper document request during an open discovery period can itself be the subject of an affirmative defense or even a claim for damage to the homeowner’s ability to defend.

This enhances the relevance of having previously sent a qualified written request and a debt validation letter, together with a complaint to the CFPB and the state attorney general.

In judicial states, I think that it is possible and even probable that the court would sustain an affirmative defense consisting of both fabrication and spoliation. Combined with an action for damages under the FDCPA (potentially as a counterclaim) the homeowner could claim the inference that the missing documents would show that the exhibits to the complaint are false and fabricated. There is some pretty clear law in both Florida and California supporting this proposition.

In non-judicial states where the homeowner must initiate judicial action, one of the claim should be spoliation, along with fabrication.

The other point is the duty to preserve evidence. It is clear that a party that is used may not destroy or hide evidence and must produce such evidence when requested to do so in formal discovery.

One of the tactics employed by the banks is to hide information about the identity and last known address of relevant third parties like the “employees” or “independent contractors” who supposedly executed the documents upon which the entire foreclosure case rests.

Third parties have no absolute duty to maintain documents in their possession unless they know that the documents in their possession are relevant to pending legal claims and defenses. So the answer is that you want to give them notice and the best way to give them notice is with a subpoena duces tecum. This could include such companies as Black Knight and CoreLogic — not just individuals.

Asking for such information and not getting an answer is evidence of spoliation. Finding the “signor” with a private investigator is often very productive. In many cases, they deny ever signing anything. And they’re probably telling the truth.

The failure to provide such information is part of the doctrines utilized in claims o spoliation and the inability of the responding party to provide a satisfactory explanation for failing to produce the records raises, in and of itself, an inference that those records would show that the discovery requests establish a negative inference as to authenticity and validity of those documents — but, in my opinion, only if the discovery request is accompanied by requests for admissions that carefully track the request to produce which carefully tracks the interrogatories.

The bottom line is that spoliation is a recognized foundation for asserting that the opposing party has either acted or refused to act in a way that interferes with the ability of the homeowner to prove affirmative defenses or claims which resulted in substantial prejudice to the homeowner. This has not been previously applied to Foreclosure litigation. But I can think of no other area of litigation in which fabrication and spoliation are more relevant.

PRACTICE HINT: There is a significant difference — and  often overlooked —between the “entity” named as Plaintiff (or beneficiary in nonjudicial states) and the entity named or claimed to be a “servicer.”

In the context of this article, one should not assume that a mere request to produce is sufficient. The request to produce only has legal effect against, for example, U.S. Bank, N.A. if it is named as Plaintiff trustee in a judicial foreclosure or beneficiary trustee in a nonjudicial case. First, the request to U.S. Bank should be directed solely at records kept by U.S. Bank in its role of administering the affairs of a trust account in which there is a loan account receivable due from the homeowner. Second, the “servicer” should receive a subpoena duces tecum asking for the same records. All too often the “records” are “produced” by the “servicer” which is a response from a third party and not the claimant as plaintiff or beneficiary. 

*

DID YOU LIKE THIS ARTICLE?

Nobody paid me to write this. I am self-funded, supported only by donations. My mission is to stop foreclosures and other collection efforts against homeowners and consumers without proof of loss. If you want to support this effort please click on this link and donate as much as you feel you can afford.
Please Donate to Support Neil Garfield’s Efforts to Stop Foreclosure Fraud.

CLICK TO DONATE

Click

Neil F Garfield, MBA, JD, 74, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
*

FREE REVIEW: Don’t wait, Act NOW!

CLICK HERE FOR REGISTRATION FORM. It is free, with no obligation and we keep all information private. The information you provide is not used for any purpose except for providing services you order or request from us. In  the meanwhile you can order any of the following:
CLICK HERE TO ORDER ADMINISTRATIVE STRATEGY, ANALYSIS AND NARRATIVE. This could be all you need to preserve your objections and defenses to administration, collection or enforcement of your obligation. Suggestions for discovery demands are included.
*
CLICK HERE TO ORDER TERA – not necessary if you order PDR PREMIUM.
*
CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
*
*
CLICK HERE TO ORDER PRELIMINARY DOCUMENT REVIEW (PDR) (PDR PLUS or BASIC includes 30 minute recorded CONSULT)
FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. 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.
  • But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
  • Yes you DO need a lawyer.
  • If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.
Please visit www.lendinglies.com for more information.

 

3 Responses

  1. And even with a final foreclosure code — records must exist for a long time thereafter.

  2. And all the PLMBS the GSE REMICs invested in via PLMBS top tranches? Hmm — where are those records? Not direct GSE investment. Indirect. Thus, – likely – Gone with the Wind. Don’t forget the FHFA settlements for repurchases – records may still be there as no finality. Have to jump through hoops to get. Very hard to get. Won’t get. But Neil is correct – where is the claimed beneficiary??? And legal holder???? Forget the note — where is the mortgage holder???? A note without a valid mortgage (that pays off prior mortgage loan by the borrower – with actual funding) is nothing more than unsecured credit card debt. That is all we got — extensions of credit — no funding, no mortgage, no note.
    Records please. I don’t think there can be spoliation without a final foreclosure code. Of course, courts unaware.

  3. Right on – Neil!!! Spoliation is a huge issue. Particularly when prior servicer records have been disposed of. And when vendor records are also disposed of. Only 7 years, or shorter, required for retention of records. However, I believe GSE records are of permanent record. Correct me if I am wrong. Of course, those records are not subject to FOIA.

Leave a Reply

%d bloggers like this: