IN THE DISTRICT COURT OF APPEAL OF FLORIDA THIRD DISTRICT

U.S. BANK, NATIONAL ASSOCIATION, etc., Appellant, v. ROSA PAIZ, et.al., Appellee. Case No. 3D11-891 Lower Case: 09-16102

APPELLEES MOTION FOR REHEARING EN BANC COMES NOW, Rosa Paiz and Rigoberto Paiz, referred herein as Homeowner, by and through the undersigned attorney, and

pursuant to Florida Rules of Appellate Procedure 9.330 and 9.331 (d), hereby moves this Court to grant rehearing en banc. The undersigned counsel expresses a belief, based on a reasoned and studied professional judgment, that the panel decision on

whether the trial court can stay the execution of a writ for possession in a foreclosure case, in order to look further into allegations of fraud on the court resulting from the pattern and practice of the plaintiff in submitting of affidavits in support of summary judgment signed is by individuals whose claim of to of

personal

knowledge

facially

questionable,

pursuant

702.07, and Florida Rule of Civil Procedure 1.540(b) is

exceptional importance as it has a direct bearing on Florida 1

judiciarys struggle to fashion an effective remedy to deal with the worsening foreclosure crisis affecting our state. In support of this Motion, Appellee expressly relies on the Appellants Appendices as filed with the Court and certain

matters of public records and public knowledge cited herein. BACKGROUND FACTS Appellee alleged fraud on the court in their Emergency

Motion under Fla. R. Civ. P. 1.540(b) to set aside judgment, and re-open the case filed post foreclosure sale (A.15). The

challenges raised by Appellee below were whether the subject loan has been included in securitized trust specified by

Plaintiff in the foreclosure suit, whether the affidavits of amounts due and owing executed by notorious robo-signers China Brown and Herman John Kennerty submitted in support of summary judgment were at all reliable, and whether the affidavit of Lisa Cullaro as to the reasonableness of the attorney fee added to the judgment was executed in violation of the Florida Bar Rules of Professional Conduct (A.14, A.17). As a result of the allegations, the trial court held two separate hearings to inquire further into these allegations.

Based on what it learned, the court issued two specific orders; one staying the execution of a writ of possession based on final judgment of foreclosure, and the other continuing the stay of the writ and permitting discovery. In the order dated February 2

18, 2011, Judge Joseph P. Farina cites to, in extending the proceeding, (A.16). US Bank filed an interlocutory order and on August 17, 2011, this Honorable Court reversed the trial court on the Appellees motion alleging Fraud on the Court

ground that Florida Rule of Civil Procedure 1.540 is designed for the correction for of clerical from mistakes and to provide orders a

mechanism

relief

judgments,

decrees,

and

proceedings under certain articulated and limited circumstances. It is not a substitute for a timely appeal. ---So.3d --, 2011 WL 3586132 (Fla. App. 3 Dist., 2011). This motion for re-hearing en banc timely follows. ARGUMENT Appellee respectfully submits that this Court has

inadvertently treated the proceeding below as one considered by the circuit court pursuant to Florida Rule of Civil Procedure 1.540 (b), provisions (1) through (3), which have a one year limitation while the record in fact reflects that the circuit court became sufficiently concerned about fraud on the court to rescind the sale temporarily so that additional discovery can be held. In fact, Appellee relied upon the saving clause of Rule

1.540(b) which provides: This rule does not limit the power of a court to entertain an independent action to relieve a party from a judgment, decree, order, or proceeding, or to set aside a 3

judgment or decree for fraud on the court. Id. that intrinsic fraud or fraudulent

It makes sense between the

misconduct

parties has a higher standard a more strict time table because [I]f fraud on the court were to be given a broad interpretation that encompassed fraudulent misconduct between the parties, a judgment would always remain subject to challenge, and the oneyear time limitation applicable to motions based on [Civil Rule 60(b)(3)] would be meaningless. 12 James Wm. Moore, et. al., Moores Federal Practice [4][c] (3d ed. 2010). On the other hand, there is no time limit to move for relief from judgment due to fraud on the court because any court has the inherent power arising from the control necessary vested in it to manage its own affairs and to achieve the orderly and expeditious disposition of its business. Kokkonen v. Guardian Life Insurance Co. of America, 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). Although the rule language refers to the courts power to entertain an independent action; it makes no sense for the party sounding the alarm of fraud on the court to wait to file a separate action when the court could very well address the

transgression as soon as it is made known in the same case. Valerio v. Boise Cascade Corp., 645 F.2d 699, 700 (9th Cir.1981) (district court had jurisdiction over plaintiff's claims of

fraud on the court in the earlier settlement). 4

In the context of a foreclosure case where fraud on the court has been alleged, it would be enormously unfair for the homeowner to be denied relief from judgment, loses her house, and then try to bring an independent lawsuit to address the fraud committed in the foreclose case by opposing party or their counsel. Fraud has long been recognized as an exception to

finality that justifies setting judgments aside. See Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238, 244-45, 64 S.Ct. 997, 88 L.Ed. 1250 (1944) (From the beginning there has existed alongside [rules of finality] a rule of equity to the effect that under certain circumstances, one of which is afterdiscovered fraud [upon the court], relief will be granted against judgments regardless [of when they were entered].), overruled on other grounds by Standard Oil Co. v. United States, 429 U.S. 17, 97 S.Ct. 31, 50 L.Ed.2d 21 (1976). Federal courts have the inherent power to vacate judgments on proof of fraud. Kokkonen v. Guardian Life Insurance Co., 511 U.S. 375, 380, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994); Universal Oil Products Co. v. Root Refining Co., 328 U.S. 575, 580, 66 S.Ct. 1176, 90 L.Ed. 1447 (1946) (The inherent power of a federal court to investigate whether a judgment was obtained by fraud is beyond question.); Southeastern Colorado Water Conservancy Dist. v. Cache Creek Mining Trust, 854 P.2d 167, 176 (Colo.1993). Additionally, the trial court has proper jurisdiction to 5

rescind the sale and order discovery in this case under the statutory authority of 702.07, Fla. Stat., which provides that: The circuit courts of this state, and the judges thereof at chambers, shall have jurisdiction, power, and authority to rescind, vacate, and set aside a decree of foreclosure of a mortgage of property at any time before the sale thereof has been actually made pursuant to the terms of such decree, and to dismiss the foreclosure proceeding upon the payment of all court costs. This statute has been interpreted and applied by the Florida Supreme Court to grant relief from judgment even post foreclosure sale. Sterling Factors Corp. v. U.S. Bank Nat. Assn, 968 So.2d 658 (Fla. 2d DCA 2007)(Statute granting circuit court authority to rescind, vacate, or set aside a decree of foreclosure of a mortgage of property at any time before sale does not deprive a circuit court of jurisdiction to set aside or reconsider a foreclosure judgment upon a proper motion once a foreclosure sale has been held); see Taylor v. Day, 102 Fla. 1006, 136 So. 701 (1931); see also Maule Indus., Inc. v. Seminole Rock & Sand Co., 91 So.2d 307 (Fla.1956)(The Florida Supreme Court has concluded that section 702.07 does not deprive a court of jurisdiction to set aside a foreclosure judgment once a foreclosure sale occurs). Of importance is Judge Altenbernds explanation of the history of 702.07 and how it is so relevant to modern-day 6

residential foreclosures and its application must be utilized to level the playing field for embattled homeowners: There is no discussion in the case law regarding the legislative history of this statute. It is noteworthy, however, that it was enacted before the modern rules of civil procedure and at a time when many Floridians were facing foreclosure and ruin due to the collapse of the Florida real estate boom. The collapse began in 1925 and 1926. See William W. Rogers, Fortune & Misfortune: The Paradoxical Twenties, in The New History of Florida 294-96 (Michael Gannon ed., 1996). Thus, it seems likely that the statute was enacted during these hard times to give trial judges more power to protect landowners by expressly permitting the court to take actions after the final judgment of foreclosure and before the sale that were not previously authorized. History, at least, would not seem to support the negative inference proposed by the Nesters, which would provide more protection for the banks and purchasers. Sterling Factors, 968 So.2d at 663, n. 5, emphasis added. The pattern and practice of banks in foreclosure litigation has included the use of robo-signers to sign affidavits, assignments, endorsements to promissory notes, and other documents to facilitate summary judgment and foreclose sale of homes in default. This pattern and practice has been on-going and exposed, but not yet remedied. David Streitfeld, a reporter of the New York Times wrote: Chase and GMAC, in their zeal to process hundreds of thousands of foreclosures as quickly as possible and get those properties on the market, employed people who could 7

sign documents so quickly they popularized a new term for them: robo-signer. In depositions taken by lawyers for embattled homeowners, the robo-signers said they or their team had signed 10,000 or more foreclosures affidavits a month. Now that haste has come back to haunt them, the affidavits in foreclosures attest that the preparer personally reviewed the files, which those workers acknowledge they have no time to do. (Schott Vocab, Robos-signers, Nickname for those who processed large numbers of foreclosure affidavits, October 6, 2010) http://schott.blogs.nytimes.com/2010/10/06/robo-signers/. As to the entity involved in the instant case, Wells Fargo, Abigail Field of the Daily Finance wrote: For example, in one case I reviewed, Herman John Kennerty of Wells Fargo gave a deposition describing the department he oversees for Wells Fargo. Its a department dedicated to simply signing documents. Kennerty testified that he signs 50 to 150 documents a day, verifying only the date on each. Although the foreclosure in that case was upheld, Wells Fargo did not dispute Kennertys signing practices. What else might Kennerty want to verify? Well, in one document he signed that Ive reviewed, he supposedly transferred the mortgage from Washington Mutual Bank FA to Wells Fargo on July 12, 2010. But thats impossible because Washington Mutual Bank FA changed its name in 2004, and by any name WAMU ceased to exist in 2008, when the Federal Deposit Insurance Corp. took it over. . . Wells Fargo Flatly stands behind its practice.

(Daily Finance, Robo-Signing: Documents Show Citi and Wells also Committed Foreclosure Fraud, October 2, 2010) http://www.dailyfinance.com/2010/10/02/robo-signing-scandalspreads-documents-show-citi-and-wells-also/). Maryland homeowner asked a court to dismiss any Wells Fargo & Co. foreclosure actions in the state that involve affidavits given by a bank employee who said she signed documents without completely checking their accuracy. Susan Saidman asked a Montgomery County court to recognize as a class all defendants in Maryland cases with foreclosure papers signed by Xee Moua for Wells Fargo. In a March deposition in a Florida case, Moua said she didnt verify all the information in filings she signed, sometimes processing as many as 500 in two hours. To permit foreclosure actions to proceed based upon these false and fraudulent papers would be to accept dishonest and bogus behavior in Maryland courts, Saidman said in a motion filed Oct. 29. Such a result would be an assault on the rule of law. Saidman raised the defense against members of Shapiro & Burson LLP, a law firm that she said brings foreclosure actions on behalf of Wells Fargo and other secured lenders. The law firm couldnt be reached by telephone yesterday after regular business hours. Wells Fargo, the biggest U.S. home lender, said last week that it will file supplemental foreclosure affidavits to courts in about 55,000 proceedings after finding some statements did not strictly adhere to the required procedures. The San Francisco-based bank has said it chose to resubmit the documents out of an abundance of caution and that none of these instances led to foreclosures which should not have otherwise occurred. Ohio Attorney 9

General Richard Cordray last week asked judges in his state for copies of foreclosure affidavits filed in their courts and signed by Moua. He sent a separate letter to Wells Fargo asking the bank to vacate any foreclosure judgment in Ohio involving incorrect affidavits. Marysville, Ohio, homeowner Ann Piwinksi brought a suit yesterday accusing Wells Fargo of violating the states Consumer Sales Practices Act, according to court filings. Hers is the first civil case in the state against Wells Fargo involving the use of so-called robo-signers, according to her lawyer, John Sherrod of Dublin, Ohio. Piwinski said documents in her foreclosure case were signed by China Brown, Mouas supervisor. Shes seeking civil penalties and punitive damages. Without seeing the specific information, it would not be appropriate to provide a response on pending litigation, Vickee Adams, a Wells Fargo spokeswoman, said yesterday. We believe we have designed an appropriate process intended to insure the quality of customer and loan data in foreclosure proceedings, she said. The Maryland case is Burson v. Saidman, 323096V, Circuit Court, Montgomery County (Rockville); the Ohio case is Piwinski v. Wells Fargo Bank, 2010-CV-1373, Fairfield County Court of Common Pleas (Lancaster). http://www.bloomberg.com/news/2010-11-01/wells-fargoforeclosure-robo-signer-draws-maryland-dismissalmotion.html In the case sub judice, Appellee advised the circuit court that said pattern and practice of using robo-signers is present and that the affidavits submitted by Herman John Kennerty and 10

China Brown, on behalf of Wells Fargo as the servicer of Appellees loan are unreliable because these individuals have been documented as lacking sufficient knowledge and information to verify the accuracy of the contents of their affidavits and other documents in aid of Wells Fargos foreclosures. Herman John Kennerty himself submitted two affidavits of amounts due and owing in this case. Kennerty swore in the affidavit that he is a Vice President of Documentation for Wells Fargo Bank, is familiar with the books of account and has similarly examined all books, records, and documents kept by Wells Fargo Bank, and has personal knowledge of the facts contained in the affidavit as well as personal knowledge of facts regarding the sums of money which are due and owing to Plaintiff or its assigns pursuant to the Note and Mortgage which is the subject of the lawsuit. (A.17, Attachment C). To dispute these attestations by Kennerty, Appellee provided the trial court with a copy of Herman John Kennertys deposition in an unrelated case where Kennerty testified at length about Wells Fargos system of generating documents specifically to suit the foreclosures in all states. It becomes crystal clear to the reader of Kennertys deposition that signers like Herman John Kennerty, do not have personal knowledge of anything they attest and affix their signatures to. The signers of these documents do not examine any actual books 11

of account or records of the loan in question. All they do is sign the documents that have been generated for them: Q. How many employees do you supervise? A. 53 full-time employees. And we currently have 15 contract workers. **** Q. How often do you actual sign documents? A. Daily. Q. Can you tell me about how many documents you sign a day? A. Anywhere from 50 to 150 **** Q. Somebody comes and brings you those documents and you sit down to sign them. And youre looking at the documents to make sure that the date is correct and consistent with the date youre signing the document; correct? A. Yes. Q. And youre looking on a computer screen at the foreclosure matrix that you described to me to make certain that the name of the foreclosing-of the beneficiary on the document that youre signing matches with the matrix; is that correct? A. No. Thats not correct. Q. Okay. matrix? What are you looking at on the

A. Im not looking at the matrix. Q. Okay. A. The matrix is updated daily, and information is pulled from that matrix. 12 this

Q. So youre simply signing the document thats presented to you and youre just making sure that the date is correct. A. Correct. Q. So how do you know when youre signing this document that is true and correct? A. There are people that are responsible for the for maintaining that matrix. Q. So youre relying upon your employees to have the correct information in the matrix system? A. Not my employees. Q. Okay. A. Fellow Wells Fargo team members. Q. Who puts the information into the matrix? A. Its generated from our foreclosure departments. Specifically I dont know who. ***** Q. And so when you sign this beneficiary declaration and any other beneficiary declaration, you dont have any independent knowledge about whether or not the information is truthful, youre relying on the other people in the process to make sure that the information is correct on the document that youre signing? A. Correct. (A. 17, Attachment 3, Depo Transcript, pp. 8-9; 61-62, 63-64) In addition to Herman John Kennerty, this case involves an affidavit signed by China Brown as to amounts due and owed the Plaintiff. China Brown, in her affidavit, swore to the following: 13

I am Vice President of Loan Documentation (title) of WELLS FARGO BANK, N.A. . . . I am familiar with the books of account and have examined all books, records and documents kept by WELLS FARGO BANK. I have personal knowledge of the facts contained in this affidavit. Specifically, I have personal knowledge of the sums of money which are due and owing to US Bank National Association, as Trustee for SASCO 2007-WF2 pursuant to the Note and Mortgage which is the subject matter of this lawsuit. (A.17, Attachment A) Because Appellee suffered a default judgment in this case, the circuit court expressly relied upon the foregoing attestations by China Brown, as well as other affidavits filed by plaintiff counsel in support of summary judgment and granted the same. Yet there is cause for concerns because China Brown

is also a robo-signer who swears to and signs different types of documents in foreclosure cases for different banking corporations. For example, in addition to being Vice President of Loan Documentation for Wells Fargo, China Brown also signed as VP of Loan Documentation for USB Mortgage LLC, in an assignment of mortgage recorded in OR Book 23875, Page 0472, Palm Beach County, on May 18, 2010. On that same day, China Brown also signed as VP of Loan Documentation for Wells Fargo Bank, N.A., in another assignment of mortgage recorded in OR Book 23875, Page 0742, Palm Beach County, concerning another property and mortgagors. 14

These are simply matters of public records that this Court could take judicial notice of. Citizens of State of Fla. v.

Florida Public Service Com'n, 440 So.2d 371 (Fla.1st DCA 1983) (both agency and courts can judicially notice existing inflation and its effect on a utility company); Mitchum v. State, 251 So.2d 298 (Fla. 1st DCA 1971) (Judicial notice is the cognizance of certain facts which judges and the jurors may properly take and act upon without proof because they already know them). The fact that China Brown has signed for so many different corporations and has sworn to so many matters so readily where the matters require the average persons utmost attention to detail and careful examination of substantial amount of information and data, is the point that the circuit court wanted to investigate further and for good reason. Again, Appellee brought to the lower courts attention that there were discrepancies between Kennertys affidavit and Browns affidavit as to the per diem interest. The point of this discussion, explained the Appellee in the motion hearing, is not whether the discrepancies harm or help Appellee in the calculations of the final judgment. Rather, it raises the question of what other discrepancies or non-truths that these affidavits represent and whether the court can confidently rely on them to grant Plaintiff summary judgment.

15

As to the affidavit of reasonableness of attorneys fee submitted by Lisa Cullaro, Appellee challenged the propriety of the affidavit in the proceeding below and asserted that Cullaro violated the Florida Rules of Professional Conduct where Cullaro declared that in her opinion, a review of the actual file in this case would be unnecessary and futile and that under no circumstances could the fee be charged by FDLG, P.L., be unreasonable. The reliability of Lisa Cullaros affidavits too, has been questioned in other foreclosure cases, and in one particular case, defense counsel was interviewed by a news reporter: Ice detailed his questions in court documents filed in the 7th Judicial Circuit in Volusia County. Ice said [Erin] Cullaro worked as a lawyer with Florida Default Group before she worked for the attorney general's office. When she left the firm, she continued to serve as an expert witness for the firm, signing affidavits to establish that the firm's fees were reasonable. Her sister-in-law, Lisa Cullaro, notarized the affidavits, according to court documents. When Erin [Cullaro] started work for the attorney general's office, the Cullaros changed roles: Lisa Cullaro served as the expert witness, and Erin Cullaro notarized the documents. Ice said both Lisa and Erin Cullaro's signatures varied in appearance, and he wants to question the two about it. The Cullaros, through lawyers, protested, but a Volusia County judge agreed in early April 16

to allow Ice to ask the two limited questions. This has not yet happened. Ice thinks the questions may help his foreclosure lawsuit. In that case, Florida Default Law Group is representing Wells Fargo Bank.

(TBO.com, State AG Investigates Its Own, May 1, 2010), emphasis added. http://beta2.tbo.com/business/business/2010/may/01/bz-state-aginvestigates-its-own-ar-47218/ Not only does the Affidavit of Lisa Cullaro match this pattern described by the news reporter in that she signed, and her sister, Erin Cullaro, acted as notary (A.20, Attachment 5) , Appellee also referred to the case of Woodard v. Florida Bar, SC03-1351, and attached a copy of the Consent Judgment for the circuit courts consideration where Woodard conceded essentially the same conduct of signing and attesting to reasonableness of fees without ever reviewing the actual file as a violation of the Florida Bar Disciplinary Rule 4.8.4 (c) and (d). In fact, Woodard stated in the consent judgment that he had signed thousands of these affidavits: Once it became apparent to the Respondent that the files involving uncontested matters were all essentially the same, Respondent began providing affidavits to Echavarria without reviewing the files before completing the affidavits in those cases that would be disposed of by Summary Judgment. (A.20, pp. 22-26; A.7, Attachment 6) 17

It is extremely difficult for the average person to comprehend how widespread and persistent the problem of robosigning and faulty documentation is because despite a multitude of publicity, said pattern and practice has yet to abate, especially in Florida where we have been ravaged by residential foreclosures. An article on the American Banker appears just yesterday, August 31, 2011, reads in part: Some of the largest mortgage servicers are still fabricating documents that should have been signed years ago and submitting them as evidence to foreclose on homeowners. The practice continues nearly a year after the companies were caught cutting corners in the robo-signing scandal and about six months after the industry began negotiating a settlement with state attorneys general investigating loan-servicing abuses. Several dozen documents reviewed by American Banker show that as recently as August some of the largest U.S. banks, including Bank of America Corp., Wells Fargo & Co., Ally Financial Inc., and OneWest Financial Inc., were essentially backdating paperwork necessary to support their right to foreclose. Some of documents reviewed by American Banker included signatures by current bank employees claiming to represent lenders that no longer exist. Many banks are missing the original papers from when they securitized the mortgages, in some cases as long ago as 2005 and 2006, according to plaintiffs' lawyers. They and some industry members say the related mortgage assignments, showing transfers from one lender to another, should have been 18

completed and filed with document custodians at the time of transfer. "It's one thing to not have the documents you're supposed to have even though you told investors and the SEC you had them," says Lynn E. Szymoniak, a plaintiff's lawyer in West Palm Beach, Fla. "But they're making up new documents." The banks argue that creating such documents is a routine business practice that simply "memorializes" actions that should have occurred years before. Some courts have endorsed that view, but others, such as the Massachusetts Supreme Judicial Court, have found that this amounts to a lack of sufficient evidence and renders foreclosures invalid. According to a document submitted in a Florida court by Bank of America Corp., bank assistant vice president Sandra Juarez signed a mortgage assignment on July 29 of this year that purported to transfer ownership of a mortgage from New Century Mortgage Corp. to a trustee, Deutsche Bank. Two problems with that: New Century, a subprime lender, went bankrupt in 2007; and the Deutsche Bank trust that purported to hold the loan was created for a securitization completed in 2006 about five years before Juarez signed it over to the trust. (Bank of America, as the servicer of the loan, was seeking to foreclose on behalf of the trust and its bondholders.) Most of the pooling and servicing agreements governing securitizations require a complete chain of endorsements. This means the promissory note (the piece of paper the borrower signs promising to pay the loan) and all intervening mortgage assignments showing transfers from one lender to another must be delivered to a trust within 60 days of the securitization closing date.

19

Jumana Bauwens, a spokeswoman for B of A, says such mortgage assignments are simply "procedural steps" to prove to a court that a trust has the right to foreclose on a borrower. In the Juarez case, B of A had power of attorney to sign on New Century's behalf, she says. But other mortgage industry members argue that the burden of proof is on the banks to show their legal right to enforce a debt, and that servicers are supposed to audit the loan before proceeding with a foreclosure. "They're supposed to make sure the trust is the correct trust, that the loan was properly assigned to the trust and that the debtor is genuinely in default," says Michael Olenick, the chief executive of Legalprise Inc., a West Palm Beach, Fla., research firm that tracks foreclosure filings and other court records for attorneys. American Banker, Robo-Signing Redux: Servicers Still Fabricating Foreclosure Documents, August 31, 2011. http://www.americanbanker.com/issues/176_170/robosigning-foreclosure-mortgage-assignments-10417411.html Clearly our judges too have taken notice of this outrageous phenomenon and are trying to combat it. In Pino v. Bank of N.Y.

Mellon, 57 So.3d 950, 954 (Fla. 4th DCA 2011), Judge Polen cautions the judiciary to address the widespread infection of fraud upon the court via foreclosure proceedings, and wrote: One federal appellate decision makes the point well. In Aoude v. Mobil Oil Corp., 892 F.2d 1115 (1st Cir.1989), the plaintiff filed a complaint based upon a bogus contract and attached that bogus document to its complaint. When the defendant became 20

aware of the falsity of the contract sued upon, it moved to dismiss the case for the attempted fraud on court. The trial court granted the motion. When plaintiff later refiled its claim and attached the real contract, defendant again moved to dismiss, arguing that the dismissal of the first case barred the claim permanently. The trial court again granted the motion. The court of appeals affirmed both holdings. In an appeal plaintiff argued that the attempted fraud arising from the use of the bogus agreement had no effect ultimately on defendant's ability to litigate the case or on the court's ability to make a just decision on the merits. The court rejected the argument on appeal that the attempt to defraud the court had failed and thus could escape punishment, responding: The failure of a party's corrupt plan does not immunize the defrauder from the consequences of his misconduct. When [plaintiff] concocted the agreement, and thereafter when he and his counsel annexed it to the complaint, they plainly thought it material. That being so, [t]hey are in no position now to dispute its effectiveness. 892 F.2d at 1120. So, too, BNY Mellon's attempt to allege and file the assignment of the mortgage was undeniably based on a belief in the necessity forand the materiality ofa valid assignment of mortgage. Defendant's colorable showing of possible fraud in the making and filing of the assignment led to the scheduling of the depositions of those involved in making the document and the notice of depositions led directly to the voluntary dismissal to avoid such scrutiny for an attempted fraud. As Aoude forcefully makes clear, a party should not escape responsibility and appropriate sanctions for unsuccessfully attempting to defraud a court by purposefully evading the issue through a 21

voluntary dismissal. This issue is one of unusual prominence and importance. Recently, the Supreme Court promulgated changes to a rule of procedure made necessary by the current wave of mortgage foreclosure litigation. See In re Amendments to Rules of Civil Procedure, 44 So.3d 555 (Fla.2010). In approving one amendment, the court pointedly explained: [R]ule 1.110(b) is amended to require verification of mortgage foreclosure complaints involving residential real property. The primary purposes of this amendment are (1) to provide incentive for the plaintiff to appropriately investigate and verify its ownership of the note or right to enforce the note and ensure that the allegations in the complaint are accurate; (2) to conserve judicial resources that are currently being wasted on inappropriately pleaded lost note counts and inconsistent allegations; (3) to prevent the wasting of judicial resources and harm to defendants resulting from suits brought by plaintiffs not entitled to enforce the note; and (4) to give trial courts greater authority to sanction plaintiffs who make false allegations. [e.s.] 44 So.3d at 556. I think this rule change adds significant authority for the court system to take appropriate action when there has been, as here, a colorable showing of false or fraudulent evidence. We read this rule change as an important refutation of BNY Mellon's lack of jurisdiction argument to avoid dealing with the issue founded on inapt procedural arcana. Decision-making in our courts depends on genuine, reliable evidence. The system cannot tolerate even an attempted use of fraudulent documents and false evidence in our courts. The judicial branch long ago recognized its responsibility to deal with, 22

and punish, the attempted use of false and fraudulent evidence. When such an attempt has been colorably raised by a party, courts must be most vigilant to address the issue and pursue it to a resolution. I would hold that the trial judge had the jurisdiction and authority to consider the motion under rule 1.540(b) on its merits *960 andshould the court find that a party filed a false and fraudulent document in support of its claimto take appropriate action, including (without limitation) the striking of a voluntary dismissal filed in aid of such conduct. Id at 959-960. This Court statement in the opinion that the instant case is a prime example of allegations that nibble at the edges of fraud would be absolutely correct if Appellee were simply trying to prove intrinsic fraud, i.e., specific instances of fraud committed by US Bank on the Appellee within the litigation. However, Appellee was alerting the circuit court to a widespread and insidious pattern and practice employed by banks in foreclosure cases without any regards for the rules of law, and the circuit court was sufficiently concerned to do something about it, including its decision to rescind the foreclose sale temporarily to allow discovery. Pattern and practice is commonly known as continuous and repeated conduct rather than single isolated occurrence. Courts

have interpreted the term pattern or practice' in accordance with the usually meaning of the words. McLean v. GMAC Mortg. 23

Corp., 595 F.Supp. 2nd 1360, 1365 (S.D.Fla.2009), affd. 398 Fed. Appx. 467 (11th Cir.2010); see also In re Maxwell, 281 B.R. 101, 123 (Bankr.D.Mass.2001) (citing Cortez v. Keystone Bank, Inc., No. 982457, 2000 WL 536666, *10 (E.D.Pa. May 2, 2000). (The term suggests a standard or routine way of operating .); In re Maxwell, 281 B.R. at 123; In re Tomasevic, 273 B.R. 682 (Bankr.M.D.Fla.2002) (failure to respond to one qualified written request did not amount to a pattern or practice); Ploog v. HomeSide Lending, Inc., 209 F.Supp. 2nd 863, 869 (N.D.Ill.2002)(failure to respond to qualified written requests on five occasions was sufficient to establish a pattern or practice). Here, where Appellee introduced evidence showing that the system utilized by Wells Fargo in execution of documents dispositive to the issue of summary judgment is flawed and where all the affidavits submitted in this case are questionable because their signers have engaged in robo-signing several times, perhaps thousands, then a pattern and practice of fraud on the court has been proven to warrant further discovery to see whether this pattern and practice has infected the bench, then the allegations voiced by Appellee are no longer nibbles but the certain and destructive shredding at the fabric of our judiciary. This is proof that the circuit court acted on its own power and discretion to investigate further and whether Appellee 24

has suffered actual prejudice by the discrepancies and irregularities is not a determining factor. BiRite Package, Inc. v. Dist. Court of the Ninth Judicial Dist., 735 P.2d 709, ([c]ourts are vested with very great and far-reaching power to control their business and proceedings and to enforce their orders and process in conducting the business of a court. Courts must have these very great powers to ensure civility, orderly procedure, respect for the court as an institution and for its orders, and in the end an honest development of the facts of a controversy that will end in a just result. Extrinsic fraud has been defined as going to the jurisdiction of the court, or constituting a fraud upon the law of the forum, or which operates to deprive the person against whom the judgment was rendered of an opportunity to defend the action when he has a meritorious defense. It is such as prevents the party complaining from making a full and fair defense. Fahrenbruch v. People ex rel. Taber, 169 Colo. 70, 76, 453 P.2d 601, 605 (1969). Extrinsic fraud corrupts the judicial power and serves to turn a court of law into an instrument of injustice. A fraud upon the court is one which interferes with the judicial machinery itself. Thus, fraud upon the court implicates interests that transcend those of the parties, because it calls into question the legitimacy of the court's judgment. See Calderon v. Thompson, 523 U.S. 538, 557, 118 S.Ct. 1489, 140 25

L.Ed.2d 728 (1998). In 1971, this Court reviewed the dismissal of an independent action challenging a judgment secured by an affidavit made by the adverse parties that was knowingly and falsely made and which formed the basis of summary judgment, reversed the trial court, and held plainly: We find that the complaint alleges the making of an affidavit by the adverse parties which was knowingly and falsely made. The complaint further alleges that the false affidavit was a basis for the summary final judgment entered in the prior action. Kutner v. Kalish, Fla.App.1965, 173 So.2d 763. We think that if these charges are proved they are sufficient for relief authorized by rule 1.540, Florida Rules of Civil Procedure. If a fraudulent affidavit that successfully secured a summary judgment can be challenged in an independent lawsuit down the road, judicial resources would be conserved by this Courts approval of the circuit courts order of discovery to get to the bottom of Appellees allegations of fraud on the court in this case right now. Independent actions of homeowners who had been foreclosed by robo-signed affidavits and manufactured documents because if these were serving as a basis for a judgment, any judgment, are likely because under this scenario, the judgment is not voidable, but void ab initio. Sterling Factors, supra. For the criticism that Appellee failed to address these 26

issues prior to summary judgment, the failure is relevant to the consideration of a motion of vacate judgment pursuant to the grounds enunciated in the subsections of the rule, but not under the saving clause, or 702.07, Fla. Stat. Where banks install this elaborate system of generating whichever documents required in a particular foreclosure case, having people sign them and attesting to their accuracy without any personal knowledge or review, having the lawyers put the legitimacy on these

affidavits and filing them with the courts, who then rely on them to grant summary judgment, the evil of fraud goes directly to the heart of the summary judgment and changes the outcome of the case. See Drobny v. Comm'r of Internal Revenue, 113 F.3d

670, 678 (7th Cir.1997)(alleged improper conduct must have an effect on the outcome of the decision to challenge the rule of finality); Coleman (Parent) Holdings, Inc. v. Morgan Stanley, 20 So.3d 952, 958-959 (Fla. 4th DCA 2009)(A motion for relief from judgment is not the appropriate vehicle for handling attorney misconduct judgment; in discovery such that does not is prejudice more the final

rather,

misconduct

appropriately

vindicated via criminal contempt proceedings and/or grievances filed with the Florida Bar). In particular, the pattern and conduct alerted by Appellee is not fraud involving a single litigant or a single case but an elaborate scheme involving score of lawyers as officers of the 27

court.

Lockwood

v.

Bowles, the court

46 or

F.R.D. its

625,

63234 are not

(D.D.C.1969)([W]here

officers

involved, there is no fraud upon the court within the meaning of [FRCP] Rule 60(b).) Where the reliability of the subject

affidavits in support of summary judgment could/should have been tried in the case prior to sale, the larger issue of creating questionable summary affidavits in and filing them in court other bench; to obtain is no

judgments

cases the

where of

the the

party it is

unrepresented

affects

integrity

longer Appellees missed opportunity but a significant public interest that demands this Courts immediate attention. In Hazel-Atlas Glass Co. v. Hartford-Empire, supra., the United States Supreme Court granted relief from a judgment

obtained through an on-going fraud orchestrated by counsel as fraud upon the court that began nine years earlier: Every element of the fraud here disclosed demands the exercise of the historic power of equity to set aside fraudulently begotten judgments. This is not simply a case of a judgment obtained with the aid of a witness who, on the basis of after-discovered evidence, is believed possibly to have been guilty of perjury. Here, even if we consider nothing but Hartford's sworn admissions, we find a deliberately planned and carefully executed scheme to defraud not only the Patent Office but the Circuit Court of Appeals. Proof of the scheme, and of its complete success up to date, is conclusive. And no equities have intervened through transfer of the fraudulently procured patent or judgment to an innocent purchaser. 28

Hazel-Atlas Co. v. Hartford-Empire, 322 U.S. at 246, internal citations omitted, emphasis added. Appellee exercised its has argued that to the circuit the court and properly ordered

discretion

rescind

sale

discovery pertinent to the named affiants. ruling on a motion is to vacate under Florida

A trial court's Rule of of Civil

Procedure

1.540

reviewed

under

the

abuse

discretion

standard. Rosso v. Golden Surf Towers Condo. Ass'n, 711 So.2d 1298, 1300 (Fla. 4th DCA 1998); if there is factual dispute upon which the trial court based its determination to vacate the default final judgment, then the court of appeal would apply the strict de novo standard. Mourning v. Ballast Nedam Constr. Inc., 964 So.2d 889, 892 (Fla. 4th DCA 2007). The dispute here is whether the circuit court proceeded under the intrinsic fraud or extrinsic fraud and it appears from the record that the circuit judge was sufficiently upon which concerned summary as to the was veracity granted of the

affidavits

judgment

in

their

broader implication. As such, this Court should have found that Judge Farina did not abuse discretion. Moreover, the circuit courts exercise of jurisdiction in rescinding the sale and

allowing discovery is entirely proper under 702.07, Fla. Stat. Additionally, reached the merits this of Court the in its written by opinion, on has the

controversy

commenting

29

substance and quality of the subject affidavits as to their factual representations. The opinion stated that Cullaro did not state in her affidavit that she reviewed the fee affidavit and commented on the figures stated in the China Browns

affidavit as well as the Herman John Kennertys affidavits. The circuit courts order however is completely silent on the

substance of these affidavits but allows for discovery. Sitting as an appellate court, we are precluded from making factual findings ourselves in the first instance. Douglass v. Buford, 9 So.3d 636, 637 (Fla. 1st DCA 2009); Farneth v. State, 945 So.2d 614, 617 (Fla. 2d DCA 2006) (A fundamental principle of

appellate procedure is that an appellate court is not empowered to make findings its of fact.) decision Appellee and prays the that this Court

reconsider

prior

allow

circuit

courts

order to stand on this principle. CONCLUSION Appellee asserts that Appellant Bank has not come into court with clean hands in its tender of the fraudulent documents One of the principle maxims of equity is he who comes into equity must come with clean hands. Bodley v. Jones, 59 A.2d 463, 469 (Del.1947). The purpose of the doctrine of unclean hands is to maintain the integrity of the courts of equity and shield them from misuse by litigants whose actions denigrate the very principles of equity the courts are meant to uphold. See 30

Nakahara v. NS 1991 Am. Trust, 718 A.2d 518, 522 (Del.Ch.1998); In re Enstar Corp., 593 A.2d 543, 552 (Del.Ch.1991); Skoglund v. Ormand Industries, Inc., 372 A.2d 204, 213 (Del.Ch.1976). For that reason, Appellee prays this Court to hear the matter en banc, and affirm the circuit court.

CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the

foregoing has been furnished by U.S. mail to Attorneys for the Appellant, Michael K. Winston, Esq., Dean A. Morande, Esq., and Nancy Blvd, C. Ste Ciampa, 1200, Esq., West Carlton Fields, FL P.A., 525 this Okeechobee 1st day of

Palm

Beach,

33401,

September, 2011. CERTIFICATE OF FONT COMPLIANCE I HEREBY CERTIFY that the size and style of type used in this brief is 12-point Courier New, in compliance with Fla. R. App. P. 9.210(a)(2). Respectfully submitted,

________________________________ JANE M. LETWIN FNB 990329 14251 SW 175th Street Miami, FL 33177 COUNSEL FOR APPELLEE

31