BAD FAITH: Judges Getting Testy About Lawyer’s Representations and Bad Treatment of Borrowers

TOP READER PICKS FOR SERVICES AND PRODUCTS

“the misleading statements made to both the court and plaintiffs’ counsel constituted willful misconduct.

Accordingly, the defendants are hereby adjudged to have accepted the July 1, 2009 agreement signed by the plaintiffs (Adv. Pro. No. 09-4045 AN, Docket No. 20), and are fully bound by the terms thereof. The terms of that agreement supercede and replace any and all terms that are inconsistent therewith in any and all notes and deeds of trust previously executed by the parties, their successors and assigns.”

submitted by Beth Findsen, Esq., (one of the finest writers in the legal profession), Scottsdale, Az

Editor’s Note: One of the wild cards in this drama is the 800 pound gorilla factor — judges can do what they want and if you don’t like it, go on appeal, where your chances are on average 1 out of 6 that you will get a nod from the appellate court. This particular Judge has expressed in writing what many other Judges have expressed orally in court and in background interviews with me — if what I say is true there will be hell to pay.

Well, it’s true and now everyone knows it. The representations by counsel for the pretender lenders are no longer being taken at face value. They have the lost the advantage of the presumptions they were creating. And here, the court took its gavel and hammered a settlement down the pretender lender’s throat. You can expect more of this behavior each day as this epic unfolds.

From an order signed by Judge Newsome, U.S. Bankruptcy Court

Many, perhaps most, of these debtors are not good candidates for a loan modification. But that does not excuse the indifferent and sometimes deplorable treatment they too often receive at the

hands of their lenders; nor does it obviate the desperate and helpless condition in which they find themselves. Indeed, never in my 27 years on the bankruptcy bench have I witnessed such financially and emotionally distressed families as I have seen pass through this court over the past two years.

Ultimately, there is little this court can do to facilitate the loan modification process or right the wrongs that debtors may have suffered from that process. That is particularly true in chapter 7 cases such as this, where the automatic stay lifts upon entry of the discharge, regardless of what the court does with a lender’s motion for relief from the automatic stay. See 11 U.S.C. § 362(c)(2)(C).

But when attorneys come before the court and play “fast and loose” with the truth, or rely on the bureaucratic obfuscations of their clients to dodge commitments they have made, this court is required to act to protect the integrity of its processes. If the court cannot rely on and trust the authority and words of the lawyers that appear before it, it cannot effectively handle the increasingly heavy volume of work confronting it, thus risking systemic collapse. That trust has been breached in this adversary proceeding, and the remedy of judicial estoppel perfectly suits the facts presented.

Accordingly, the defendants are hereby adjudged to have accepted the July 1, 2009 agreement signed by the plaintiffs (Adv. Pro. No. 09-4045 AN, Docket No. 20), and are fully bound by the terms thereof. The terms of that agreement supercede and replace any and all terms that are inconsistent therewith in any and all notes and deeds of trust previously executed by the parties, their successors and assigns.

As for the issue of sanctions, the defendants’ failure to appear at status conferences and respond in timely fashion to court orders alone amply support a finding of bad faith in the conduct of this litigation. The total indifference shown towards the court’s processes, the waste of judicial resources that resulted, and the misleading statements made to both the court and plaintiffs’ counsel constituted willful misconduct. In re Deville, 361 F.3d 539 (9th Cir. 2004); see also U.S. v. McCall, 235 F.3d 1211, 1217 (10th Cir. 2000).

Although the court’s August 7, 2009 Order Scheduling Evidentiary Hearing does not specifically mention that sanctions might be imposed pursuant to the court’s inherent power, the court made its view clear at the August 5 hearing that the bank’s conduct in not consummating a settlement might constitute bad faith. August 5, 2009 transcript, pg. 5, Adv. Pro. No. 09-4045 AN, Docket No 31. See Doi v. Halekulani Corp., 276 F.3d 1131 n. 7 (9th Cir. 2001); see also In re Lehtinen, 564 F.3d 1052, 1060-61 (9th Cir. 2009).

14 Responses

  1. […] BAD FAITH: Judges Getting Testy About Lawyers Representations and Bad Treatment of Borrowers Living One judge warns of systemic meltdown of the judicial process. […]

  2. in regards to comment by david on Oct. 9, 2010 at 9:43 pm. I also have a claim against a bank claiming they own my note where as the true owner is Fannie Mae. If anyone know of any cases involving this issue please contact me.

  3. I’m in Bk court objecting to a motion for relief from stay. I stumbled upon the fact that Freddie mac bought my loan from a bank one week after I signed papers in 2006.

    The bank filed foreclosure docs this year not listing the true owner, but worse, filed federal court docs including a proof of claim alleging the bank, not Freddie, owns the loan.

    These MFRS calendars are full and the judge moves along but luckily the law clerks read my briefs and brought it to the attention of the judge who asked bank counsel, in open court, how it was possible that they own the note and Freddie the loan?

    The judge asked counsel to brief the issue to be head at the end of the month.

    With some work, persistence, and help from some here, I was able to get the attention of the judge.

  4. Bob G.,

    Sometimes disagree with you – but you are 100% correct regarding the sanctions. That is what needs to be done.

  5. Note the Court’s reference to “In re Deville,” a 2004 case in the 9th Circuit.

    The question arises as to whether the production of a phony “Assignment” that was manufactured for the purpose of misleading the Court would be a “statement.” It probably is. Let’s all check out this case cite and see what it implies, and where this may lead us in filing for Sanctions.

  6. I believe, the judges nationwide, are realizing how they were being used as tools. they were given their stupidity and naivete by having been fed a whole bunch of illegal crap.

    Their fault falls in failing to educate themselves, just as the majority of our legislators both at the federal and state level.

    The bankers have spent and will spend billions of dollars in this fight.

    The only thing we have is the truth on our side, our passion, our willingness to educate ourselves.

    We need to take this four weeks and blast the candidates and the incumbents with letters are their town hall meetings, their rallies. we need to be in their face. Write them emails, letters, call into their interviews on the radio, and TV. we need to be even more active today that the balance has tilted slightly.

    Remember that while you are crying at home for your situation, the enemy is wining and dining with the congressional staffers. And funding the PAC’s for the reelection and election of everyone this November.

    We need to be relentless and apply ever more pressure. Our message needs to come across the news and across their political survival radar.

    We need to push even harder, stand in front of our court houses where the crime is getting its final execution.

    Blogging, facebook, twitter, etc . It is our time to shine and to move ever closer to our individual goals.

    The PRETENDERS, ARE SENDING CHAIN robo-letters TO ALL OUR GOVERNMENT OFFICIALS AND REGULATORY AGENCIES TRYING TO MITIGATE THE AMOUNT OF EGG ON THEIR FACES. We need to send our letters certified mails if possible. Email them call them, tell the your story, the way you have been abused, dehumanized, mistreated, lied to and what ever may have happened to you.

    Write to your judges and Attorney generals not to sell out to the banking crowd.

    if some one can come out a couple of sample letters and emails that we all can share and adapt to our personal circumstances, will be super.

  7. I believe, the judges nationwide, are realizing how they were being used as tools. they were given their stupidity and naivete by having been fed a whole bunch of illegal crap.

    Their fault falls in failing to educate themselves, just as the majority of our legislators both at the federal and state level.

    The bankers have spent and will spend billions of dollars in this fight.

    The only thing we have is the truth on our side, our passion, our willingness to educate ourselves.

    We need to take this four weeks and blast the candidates and the incumbents with letters are their town hall meetings, their rallies. we need to be in their face. Write them emails, letters, call into their interviews on the radio, and TV. we need to be even more active today that the balance has tilted slightly.

    Remember that while you are crying at home for your situation, the enemy is wining and dining with the congressional staffers. And funding the PAC’s for the reelection and election of everyone this November.

    We need to be relentless and apply ever more pressure. Our message needs to come across the news and across their political survival radar.

    We need to push even harder, stand in front of our court houses where the crime is getting its final execution.

    Blogging, facebook, twitter, etc . It is our time to shine and to move ever closer to our individual goals.

    The PRETENDERS

  8. I actually had Wells Fargo tell the judge that although its true they can’t find some notes they definitely had mine. However, FAILED TO BRING IT to the TRO hearing. Problem is my attorney didn’t push the issue and the Judge told us since Wells Fargo, “said” they had the note I didn’t have a very strong case and I should consider dropping my lawsuit or I might be liable for their legal fee’s. This is another example of a judge just taking the pretend lenders word that they have the note. By the way I fired my attorney.

  9. Random Musings on African History and How it Relates to “Foreclosuregate”

    A dear friend of mine, a Black man blessed with razor sharp intellect, took the time to present me with a very barbed analogy involving African history.

    It goes as follows…make of it what you will.

    During the slavery era, African Tribes living mere miles from each other, spoke different languages which effectively limited their ability to communicate.

    The merchants who engaged in the vocation of profiting on the sale of human beings were keenly aware of this. In support of their collective business model the human commodities purloined from their various tribes were kept separate.

    Not until they inevitably learned a common language, English, were they able to communicate. That enabled them to pollinate information and therefore exuviate themselves of the shackles that bound them in slavery.

    One may reasonably ask “What rivets the above into the context of the present day foreclosure fiasco?”

    In answer to this question I point out that American Tribes are now learning to communicate in the preferred, synthetic, and ever-changing language used on Wall Street.

    The tribes on the left, the right, the middle, and all the other categories bearing labels are becoming versed in this encrypted, fork-tongued lingo.

    “Pooling and Servicing Agreements”, “MERS”, “Master-Servicers”, “Sub-Servicers”, “Special Purpose Vehicles”, “REMIC”, “GAAP”, “Yield Spread Premiums”.

    These terms are being added to our collective dictionaries and our ability to pollinate information emerges.

  10. The above was from an Arizona court? If so, then I am glad.

    It seems most of the heavy lifting of homeowner defense has come from states other than those most affected by number of foreclosures. Florida even put in a fast lane for fraud.

    I really hope this is a sea change in attitude of those on the bench. When I read about the Tallahassee, FL judge who ruled it to ‘onerous’ for David J. Stern firm to produce routine business records, its hard not to get discouraged.

  11. Co Mingling of Funds. We must encourage people still making payments to stop and sue for Comingling of funds for starter.

    The biggest problem in court is that the Judges have been Allegedly on the Take. In some form or other. . All we ask of the judges is to be judges who apply the Law.

    Not make a new law. They are judges not congress men/woman or Senators, not econonomist setting policy, not philosophers they are freaking Judges.

    WE did not and do not deserve to be Lynched.

    So if you are going up against a Republican Judge then their is a new sherriff in town.

    This whole scenario is reminds me of Blazing Saddle
    by Mel Brooks.

    All we have been asking for is due process.

    Neil Garfifeld and Co. be strong and courageous.

    LONG LIVE RICHARD FINE who sat in Los angeles County Jail for 18months fighting the forces of evil. Judge David Yaffe.

  12. IT IS TIME TO PUT A FEW JUDGES IN JAIL. AND LET THEM BLEND WITH THE GENERAL POPULATION.

    LETS SEE HOW THEY TREAT THE JUDGES AND ATTORNEYS IN JAIL.

  13. Nothing is going to happen until million dollar sanctions or punitive damages are awarded and upheld by appellate courts. And these sanctions need to be awarded against the law firms repping the banks, and not just the banks. The law firms do not have the banks’ resources to pay such sanctions. This would bring these abuses to a screeching halt.

    Unfortunately, to date, the courts don’t realize how effective such sanctions would be in straightening out the foreclosure mess and reducing their workload and demand upon their judicial resources.

  14. This has been one of the biggest problems in courts – the judges trust the attorneys and rarely question documents and representation.

    Attorneys, in foreclosure process, have forgotten the oath they once took.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: