Wading through the difference between substantive claims or theories and the procedural opportunities to present them

A recent exchange of correspondence from a good client of mine (one of the legacy cases I am still directly litigating) produced questions and answers that mirror literally hundreds of inquiries I receive every week. I offer the following as guidance to both lawyers and clients.

The context of such conversation and communications between lawyer and client is that the client is usually completely unaware of the procedural paths and restrictions on presenting answers, affirmative defenses, counterclaims, collateral lawsuits, theories, and facts. While the lawyer must be interested in all the facts, the lawyer must choose to dance those facts that are most likely to lead to a successful judgment in favor of his client.

The friction comes when the client continues t think of new ideas, facts, and other theories or suggestions while the case is already proceeding. Generally speaking, most of those new issues are no longer available to discuss.

The one place where that is NOT true is in the narrow window in which the court allows the pursuit of reasonable discovery demands that reasonably relate to the allegations of a foreclosure complaint or the affirmative defense raised. That narrow window is one in which properly rafted discovery demands are served and all motions and hearings are field and set such as Motion to Compel Motion for Economic Sanctions, Motion for Evidentiary Sanctions (or positive inference), and motion in limine or Motion to exclude certain evidence.

So the following represents the exchange between the lawyer (me) and client, redacted to remove identifiable parties.


Your email contains much in philosophical issues that affect the manner in which mortgages are created, communication with lenders and services are processed, workout requests or settlement demands are processed, and a host of other issues. Virtually none of them have any relationship with your current pending appeal.
None of the issues you raise merit a telephone conference between you and I. Your question would require several hours of instruction on Florida substantive law, Florida substance procedure and Florida customs and practices
My engagement is not educational. Such an endeavor would result in a presentation and questions and answers that (a) you won’t completely understand and (b) would take several hours costing at least $2,000 and possibly more.
My role is as an advocate for you and we appear to have crossed the threshold in which Oral Argument might be canceled. This I am reading the cases cited and preparing myself for oral argument in which I will be questioned by the panel. This means that they will mostly be asking about the procedural and jurisdictional legal issues about which I argued in the brief and defending the argument propounded by opposing counsel.
Except in rare instances specifically and expressly provided by the State Consitution or State law, there are no new arguments or acts allowed unless, as we have done in your current appeal you allege lack of jurisdiction by the lower trial court and the current appellate court. IIn, fact, in the current state where all briefs have been exchanged and filed, there I nothing else to raise in writing.
As a matter of good practices in appellate litigation, it is rarely productive and frequently dismissed by the panel when the advocate for a party attempts to introduce new factual issues or even new emphasis on factual issues or legal conclusions.
Nonetheless, I answer the apparent questions and comments in your email as  follows:

You wrote: shouldn’t we give [my trial lawyer] the Zoom link, so he will better understand how to argue if we go back down to the lower court?   The answer is yes. You take care of that but I assume Ackley will only take the time he is retained to do that and otherwise has no scheduling conflicts. 

You wrote: How can I ensure no one else comes after me for money over this? Would you represent me during the settlement process? Answer: No assurance in court for anything. If I am retained, yes I can represent you.
You wrote: What are our chances of having the 2nd DCA decide in our favor? What are the chances that they will want to settle before it goes back down to lower court? Answer: I don’t know the answer and nobody does. Statistically speaking the overwhelming percentage of appeals fail to produce any correction and foreclosure cases are even worse. It has been done by multiple lawyers but there is no statistical evidence as to what constitutes a successful appeal in foreclosure cases. 
You wrote: Do you think my asking for $5 million to settle would be too much? Answer: Nobody can answer that question yet. First, you need to win. Don’t trip over your own feet. You have no claim if the trial and appellate system decide that the claim against you was valid and enforceable.
You wrote: If it goes back down to lower court, can I switch to Federal court? Answer: No. The time to file a motion for removal has expired and you have no credible grounds for doing so. 
You wrote: How do I prove that their long fraud on the court and the damages thereby done to me were so extensive that compensatory damages should be given for that as well? Answer: You can’t — until you file a lawsuit seeking such damages. It is not possible to make such claims in the current case. The new lawsuit is an entirely new and different matter and will cost at least $15,000 to pursue. 
You wrote: Final Judgement said there is over $375,000 MONEY OWED BY ME to Deutsche Bank National Trust Company as Trustee for Long Beach Mortgage Loan Trust 2006-WL3 when I actually owed (or didn’t owe, as per our theory) $206,000. The house is now worth, according to Zillow, over $360,000 (has been going up in value by $16,000 per month for months). Further, if the loan was sold multiple times, shouldn’t I be entitled to some of that money? Should I be calculating how wrong the judgment was, what they made from my signature through their criminal activity, and what my damages (settlement amount) should be? In my mind, isn’t there a law (you wrote about it at some point on your website)  that says that if a false debt is ascribed to one, one can ask for 3 times that amount ($1.1 million) in damages? Is that considered punitive or compensatory damages? And couldn’t I ask to see exactly how many times my loan was sold, and to whom? Answer: these issues are potentially ripe if and only if you 
(a) win the appeal 
(b) the remand order from the Appellate court allows full inquiry in the  lower court into the naming of a new bidder without consideration 
(c) you prevail in discovery and the evidentiary hearing and 
(d) the court concludes that 
(1) the transfer of bid was void.
(2) the bid at auction was void
(3) the sale of the property was void
(4) the transfer of bid by the attorney of record was a legal nullity
(5) the transfer of bid was without consideration and the reason for that is that no payment was due

(6) that no payment was due because the judgment holder suffered no loss and because the original claim for remedy of nonexistent injury was also nonexistent.

You wrote: Won’t they be anxious to settle if it appears that I understand that they are committing fraud on the court? How they are trying to get them and their buddies (the “registered holders” entity) a free house, on top of all the money they’ve received for their other frauds? Answer: NO. The only thing that is important at this stage is the facts in the record. This MIGHT end up being supplemented by an evidentiary hearing in the lower trial court. Your feelings, knowledge, or added theories have no current significance to the outcome of the case. Second, all foreclosure mills operate under one single main directive — wear out the opposition. The translation of that is that they will litigate to the bitter end in most cases as you have already seen. They do this because most litigants drop out of the fight. 
You wrote: If the lower court decides to reverse the foreclosure, would Chase/SPS still be able to come after me? (This may be theoretical, but I want to know ). Answer: I have no way of knowing what they’ll do. I have cases where we won multiple times but they seeking to pursue administration, collection, and enforcement of a nonexistent obligation on behalf of a nonexistent entity with no injury and no claim. One of them is now 14 years old. In your case, neither Chase nor  SPS has ever stated that THEY have a claim against you. That would make it far more challenging for them to now say that the real party in interest against you was either one of those entities. 
You wrote: So the question I have then is: did Chase at some point actually create an entity called ” Registered Holders of… LBMLT-2006-WL3, Asset-backed certificates WL3-2006″ (the one that got the assignment of bid, and the one SPS listed in a proof of claim in BK court) and then somehow put my loan into (or commit my loan to) that 2nd entity? Was it actually trust for securitized loans, and if so was my loan then actually (or fake-)securitized? Or was it some other nefarious entity? If it wasn’t securitized at all, or fake-securitized, can they somehow still get the lower court to decide in their favor (like with a “no harm done” argument). If it was fake “securitized”, was it the same type of thing as all the others, where it was sold multiple times? Answer: These points MIGHT be relevant if we can get the trial judge to consider the issues that are outlined above. Your points WOULD be relevant in a separate collateral lawsuit. 
You wrote: Modification/Non-HAMP–Recently, XXXXXXXXXXX flew me up to Tallahassee as a Florida homeowner (not as APON Secretary) to publicly discuss my case (at a press conference), in particular the difficult time I had modifying the loan (to get support for the bill they had introduced–see other email). When I explained to that I was able to modify the loan with WAMU before the 2008 crash, and then that during the foreclosure I went through a long modification process (in which they said I did not qualify for a HAMP mod and) which ended with me rejecting their offer of a non-HAMP loan (called something like a “JPM modification”), my friend XXXXX said she felt that the reason that SPS didn’t offer me a HAMP loan modification was that it wasn’t one that was bought by Freddie and Fannie, or maybe it wasn’t ever “securitized” (or even fake-securitized) before Chase took over the loan . This was something I had suspected (using my intuition) before, and I had asked that question during discovery (my own question–though most of my discovery questions I adopted from your guidelines). They denied that there was another trust that Chase created where my loan was “deposited”. Answer: First, you need to recognize and accept that fact that for your case, under the procedural rules that you may no longer challenge or seek a variance, the time for amending your answer, affirmative defense and potentially asking to file a counterclaim is 100% expired. You might include such facts as part of a collateral lawsuit seeking declaratory, injunctive, and supplemental relief. 
Such a suit might have considerably more credibility if you are able to prevail in the appellate court and then prevail in the proceedings that occur pursuant to the order of remand. 
The HAMP violation is probably true (and provable) — but you must remember that the parties with whom you are dealing had no right, title, or interest relating to you, your property, your alleged (nonexistent) underlying obligation or loan account receivable, the note you issued along with eh mortgage. A more accurate description would be interference with your HAMP protections rather than a violation of HAMP itself. You can’t get relief for violation of HAMP or even negligence in processing HAMP applications if your servicer never had a right to receive the application or process it. 
The reason for the foregoing suggestion of interference rather than a violation is simple. 
  • If they were not a creditor who maintained a loan account receivable with a history dating back to the origination of the transaction, legally they were not an authorized claimant under UCC 9-203 UCC, adopted verbatim by the Florida legislature (and all U.S. legislatures). 
  • If they were not a legally authorized representative of a creditor (not just a claimant) then they and no right to even correspond with you (violation of FDCPA and other statutes) much less offer or pursue you to execute forbearance, modification etc. 
  • As such, not being a creditor or servicer in the conventional sense, their defense can and will be that they were not subject to the requirements and restrictions of the lending and servicing statutes since they were neither a lender nor servicer. 

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.
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Neil F Garfield, MBA, JD, 75, 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.

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2 Responses

  1. The Government eats from the plate served to them by crow

  2. When will the government eat crow?

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