Documenti di Didattica
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In re Chapter 11 Case
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Allana Baroni, Bankr. Case No. 1:12-bk-10986-MB
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Reorganized Debtor. Adv. Proc. No. 1:13-ap-01069-MB
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NOTICE OF MOTION AND MOTION
18 Allana Baroni, FOR RELIEF FROM THE ORDER
SETTING THE DEADLINE TO
19 Plaintiff,
IDENTIFY EXPERT WITNESSES
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21 v.
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2018 at 2:30pm in Courtroom 303 of the United States Bankruptcy Court, located at 21041
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Burbank Blvd, Woodland Hills, CA the Reorganized Debtor, and Plaintiff Allana Baroni
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("Plaintiff" or “Baroni”) will and does move for an order RELIEF FROM THE ORDER
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SETTING THE DEADLINE TO IDENTIFY EXPERT WITNESSES. This motion is brought
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8 pursuant to Federal Rule of Civil Procedure 60 incorporated into the Bankruptcy Code as Fed. R.
9 Bank. P. 9024, and is based on this notice, on the attached Memorandum of Points and
10 Authorities, the Declaration of Michael S. Riley, on the pleadings and records on file in this
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action, and on such argument as may be presented at the hearing on this motion.
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PLEASE TAKE FURTHER NOTICE that this motion is being heard in compliance with the
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Court's September 13, 2018 bench scheduling order setting out the pretrial motion deadlines. If you
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wish to oppose this motion, you must file a written response to this motion with the Bankruptcy Court,
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16 and serve a copy of such response upon the moving party’s attorney at the address set forth above by
17 October 5, 2018. If you fail to timely file and serve a response, the Court may treat such failure as a
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2 I.
3 INTRODUCTION
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The Plaintiff respectfully requests relief from the January 26, 2017 Amended Scheduling
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Order (Adv. Dkt. No. 173), to identify Lora Jones, as a law enforcement witness with expertise in
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forgery, fraud and banking best practices, on the grounds of newly discovered evidence, and for
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9 II.
10 STATEMENT OF FACTS
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On September 15, 2012, Nationstar Mortgage, LLC ("Nationstar") filed Claim 9-1 (the
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"Claim") under penalty of perjury putting forth Nationstar as a secured creditor. Attached to the
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Claim is a promissory note (the "Claim Note") and a deed of Trust (the "DOT"). The signatory of
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15 the Claim attested to the accuracy of the Claim Note. Nationstar maintained the Claim in its own
16 name for over two years never asserting it was acting for another party.
17 On September 24, 2014, two years into the case and upon the filing of its motion for
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summary judgment, Nationstar changed its position and asserted it is not the actual creditor but
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rather acting as an agent for Wells Fargo Bank N.A. as Trustee for Structured Adjustable Rate
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Mortgage Loan Trust, Mortgage Pass Through Certificates, Series 2004-5 ("Wells Fargo").
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22 Through the declarations of Nationstar employee Edward Hyne, and opposing counsel Adam
23 Barasch, both filed in support of Nationstar's September 24, 2014, motion for summary judgment,
24 Nationstar attested to the accuracy of a promissory note with indorsements that is materially
25 inconsistent with the Claim Note (See Barash Decl. Adv. Dkt. No. 50-6) (the "MSJ" Note).
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1 On numerous occasions spanning many years, the Plaintiff and her counsel have requested
2 an explanation setting forth why materially inconsistent promissory notes have been filed with the
3
Court under penalty of perjury, to no avail. (Riley Decl ¶2).
4
On May 3, 2017, Nationstar filed its Motion to Exclude Expert Testimony of Meredith
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Deklab Miller (Adv. Dkt. No. 192). During the May 26, 2017, oral argument on the motion, the
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Court inquired if there was an explanation for the conflicting indorsements. Defendant did not
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8 provide an explanation.
9 On August 28, 2018, for the first time after years of inquiry, Defendant's Rule 30(b)(6)
10 witness Mr. Edward Hyne provided Nationstar's explanation concerning the inconsistent
12 therefore the former servicer Aurora Bank FSB's policy was to create an indorsement page and
13 populate it with executed indorsements years after the underlying transactions purportedly
14 occurred and without permission from the signatories, in order to give the appearance that the
15 Note was duly indorsed to blank. The note, and fabricated indorsements were filed with the Claim
17 True and correct copies of Mr. Hyne's deposition transcript describing the indorsement
18 fabrication practice is excerpted below and attached and incorporated by reference as "Exhibit 1."
19 BY MR. RILEY: Q What is your testimony about the Note, Mr. Hyne?
20 A The Note itself is accurate, but as to the page where the endorsements are, um,
21 there is, actually, um -- the original Note has the endorsements on the backside of the
signature page, and this was an alternate second endorsement sheet that had been
22 prepared by Aurora Bank, it's my understanding. That's why there was a discrepancy
raised relating to the endorsements.
23
MR. OLIVER: Prepared by?
24
26 MR. RILEY: Would you, please, read back his answer, if you would.
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A Um, well, I don't have personal knowledge. I didn't work for Aurora. It's my
2 understanding that the, um -- Aurora had an image of the Note that, um, apparently,
when imaging their system, they didn't have the back page with the endorsements on
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it, and someone at Aurora had gone in and created a separate endorsement sheet, um,
4 for the purposes of having a complete version of the Note with an endorsement, not
knowing that the back of the original Note, um, contained the, um, original
5 endorsements.
6 Q So it's your testimony they prepared an allonge, if you're familiar with the term
"allonge"?
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8 THE WITNESS: I don't know if you would call it an allonge, um, but they prepared,
um, a sheet that had new endorsements so that it could be imaged, um, with, um, an
9 image of the Note that was, um, different from the original Note that already had the
endorsements on the backside of the signature page.
10
11 Q Let's go back to the document you're referring to and that you're looking at in front
of you. What is that?
12
A This page, um, is a page that has three endorsements on it.
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Q So is it your testimony this was the endorsement that was prepared by Aurora that
14 was attached to Claim 1?
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THE WITNESS: Yes.
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BY MR. RILEY: Q Okay. And how do you have knowledge of how this happened?
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A We have -- in our imaging system when the loan came across from Aurora to
18 Nationstar to service. We had images with this Note with this endorsement page, and
19 a separate image of the Note as it, actually, appears with the other endorsements. Um,
I've had discussions with Simon Ward-Brown, who --
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Q I'm sorry, who?
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A Simon Ward-Brown. He's an employee of Nationstar now, but was previously
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employed by Aurora when this loan -- before the loan transferred to Nationstar.
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Q And he's the one that informed you how these signatures came to be on the claim?
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THE WITNESS: We discussed as to how there might be two different, um,
25 endorsement pages.
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BY MR. RILEY:Q When would you have had that conversation?
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A I think it was last year, late last year.
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1 Q Why was an amended Proof of Claim not filed, if that wasn't the accurate Note?
2 A I'm not sure why there wasn't an amended Proof of Claim filed. Certainly
Nationstar wasn't aware of the issue until, I believe, it was raised later on in the
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litigation.
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BY MR. OLIVAR: Q Now, I think you testified you spoke with Mr. Ward-Brown about an
5 alternate second set of -- alternate second endorsement sheet. Do I have that right?
6
A Yes.
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Q And the alternate second endorsement sheet, you believe, was prepared by Aurora
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Bank?
9
A Yes.
10
11 Q Did he know how that was prepared or why that was prepared when you spoke
with him?
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15 Q When you say you discussed what he believed to have happened, were the two of
you just speculating as to possibilities, or did anybody know what had happened?
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A He didn't say that he was there when it happened physically at the time that it was
17 occurring, um, so he was trying -- he believed that that is what happened based upon
18 his, um, knowledge of the servicing policies and processes at Aurora.
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1 Q What was the name of the employee at Aurora who saw there was no endorsement
page?
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A Um, he didn't have a name of a person. He believed that's what would have
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triggered an employee looking at the imaging system.
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Q When did that unnamed Aurora employee create that second page?
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A It's not dated, so I'm not sure if he could tell but, um, there's certainly nothing on
6 the document that would indicate when it occurred.
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Q How did the Aurora employee create a second endorsement page?
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A I don't know.
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Q Do you know whether the page was photo shopped?
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11 A I don't know.
12 Q Do you know whether the page was physically xeroxed with a cut-and-paste
technique?
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A I don't know.
14 III.
15 ARGUMENT
16 A.
17 THE TESTIMONY SOUGHT IS DIRECTLY RELEVANT TO THE CASE
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The BAP opinion in this matter held that the Plaintiff rightfully challenged the authenticity
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of the indorsements, and held that Nationstar must establish the note is duly indorsed to blank. The
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BAP also held that the issue of authority to indorse the note is relevant to the case, specifically
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22 whether the indorsements were placed on the note by a third party without authority to indorse the
23 note:
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"On the other hand, the authenticity of the indorsements is a different matter. Like
25 James’ signature on the note, indorsement signatures on a negotiable instrument
typically are self authenticating. Id. And yet, here, there are genuine and material
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issues regarding whether the original of the Carmel note was duly indorsed in blank.
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1 Here, Nationstar itself created a genuine issue of material fact by presenting with its
proof of claim a copy of the note containing a materially different indorsements page
2
than that contained in the Hyne declaration note copy. As we explained above, the
3 indorsements are configured differently in the POC note copy and in the Hyne
declaration note copy.
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5 More importantly, a reasonable trier of fact also might infer from the divergent
indorsements pages that the original Carmel note never was properly indorsed; rather,
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an indorsements page might have been placed with the original note by some
7 unknown third party without authority to indorse the Carmel note."
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BAP Opinion P.23-24, a true and correct copy of which is attached and incorporated
9 by reference as "Exhibit 2."
10 During the September 24, 2015 BAP oral argument, the panel characterized the
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indorsements filed in the case as "magical," and the filing of the inconsistent indorsements as
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"magical thinking:"
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JUDGE KURTZ: Counsel, counsel, there’s one copy of the endorsements. There’s
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another copy of the endorsements. These are magical endorsements as your copier didn’t
15 move and they changed their relationship to one another.
16 JUDGE TAYLOR: But here’s the problem here. You put one copy in front of the court
17 and you said, this is it. We’re entitled to file proof of claim. And then you put another
copy before the Court and said, this is it. We’re entitled to file this claim and you never
18 explained how both of those are put before the Court. And I’ll tell you, me, I’ve tried
19 those cases and I try it because your client put inconsistent information before the Court
and said both were true and I -- you know, magical thinking is something that I’m not
20 real big on when a financial.
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A true and correct copy of the BAP transcript is attached and incorporated by reference as
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"Exhibit 4."
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In light of Nationstar's August 28, 2018 disclosure of Aurora Bank's practice of preparing
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indorsements, Plaintiff intends to challenge the authenticity of the indorsements, and the authority
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to indorse the note through expert testimony. The testimony will include clarification that the
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practice described by Mr. Hyne violates numerous codes and statutes. This testimony is directly
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1 relevant to the BAP's holdings concerning the authenticity of the indorsements, and authority to
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Fed. R. Civ. Proc. 60 (b) provides: Grounds for Relief from a Final Judgment, Order, or
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5 Proceeding. On motion and just terms, the court may relieve a party or its legal representative
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(2) newly discovered evidence that, with reasonable diligence, could not have been
8 discovered in time to move for a new trial under Rule 59(b); and
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6) any other reason that justifies relief.
10 Mr. Hyne testified that Nationstar became aware that the Claim Note indorsements were
11 likely created, "late last year," but failed to disclose this information, or the underlying records to
12 the Plaintiff. Having disclosed this information to Plaintiff just four weeks ago, the Plaintiff could
13 not have timely designated a law enforcement expert to testify to the legal effect of this practice,
14 the nature of a system in place that allows the creation of indorsements in this manner, and to
15 rebut the presumptions concerning the bona fides of the indorsements to the Note in light of the
16 disclosed processes.
20 a. Whether the “original Carmel note” (as defined by the Panel in its Memorandum) was
duly endorsed in blank and made payable to the bearer and, therefore, whether Nationstar
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qualifies as a holder of the note and a person entitled to enforce the note.
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The Plaintiff is entitled to put forth and support her theory that the low evidentiary
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requirement of simply being in possession of a note purportedly indorsed to blank is enough to
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enforce property rights, was the incentive to forge the indorsements to blank. Plaintiff is also
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entitled to establish that the indorsement creation practices disclosed by Mr. Hyne calls into
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question the veracity of all of the indorsements.
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1 B.
2 PLAINTIFF'S EXPERT JAY PATTERSON IS NOT QUALIFIED TO TESTIFY
TO ISSUES OF LAW
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4 The Plaintiff intends to identify Lora Jones as an expert witness. Ms. Jones CV is attached
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25-years experience in Law Enforcement, including the US Department of Homeland
7 Security (DHS) – U.S. Secret Service in Washington DC;
Secret Service Agent assigned to Headquarters, Criminal Investigative Division, and was
8 the Agency’s Money Laundering and Mortgage Fraud Program Manager;
Regular member of the Department of Justice Bank Fraud Working Group;
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Regular member of the Mid-Atlantic Anti-money Laundering Working Group;
10 Associate Member of the Association of Certified Fraud Examiners;
Partnered, and was a liaison with members of the Regulatory, Financial, and Banking
11 Industries;
Worked directly with Federal, State, and local Law Enforcement entities in the
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Regulatory, Financial, and Banking Industries surrounding “Best Practices,” and
13 formulating solutions in the Regulatory, Enforcement, and Financial Industry
workspaces;
14 A Captain in the U.S. Army Signal Corps; and
A Fairfax, Virginia County Police Officer.
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16 For clarification, Plaintiff's securitization expert and certified fraud examiner Jay Patterson
17 is not qualified to testify to legal issues concerning the indorsement fabrication practices described
18 by Mr. Hyne.
19 C.
20
THE PARTIES HAVE MET AND CONFERRED
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On Monday, September 24, 2018, the parties met and conferred telephonically with respect
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to this motion but could not agree on the issue. During the meet and confer opposing counsel
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24 asserted that Plaintiff is time barred from identifying an expert, notwithstanding that the practice
25 to which Plaintiff seeks testimony in connection with was only disclosed four weeks ago.
26 Defendant's position is particularly disingenuous considering that Mr. Hyne testified that
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Nationstar was aware of the "indorsement preparation" practice at issue "late last year," but failed
28
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2 III.
3 CONCLUSION
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For the reasons described above, the Plaintiff respectfully requests relief from the
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6 scheduling order to indentify a law enforcement expert witness to testify in connection with the
7 indorsement creation practices attested to on August 28, 2018 by Nationstar, through it Rule
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DATED: September 28, 2018 LAW OFFICE OF MICHAEL S. RILEY
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1. I am special counsel to the Plaintiff, and have been admitted pro hac vice to appear before
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this Court. I submit this Declaration in support of Plaintiff's motion for relief from the scheduling
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order to indentify an expert witness. I have personal knowledge of the facts I am about to state
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and, if called on to do so, I can competently testify to those facts.
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8 2. On numerous occasions spanning many years, the Plaintiff and counsel have requested an
9 explanation setting forth why materially inconsistent promissory notes have been filed with the
10 Court under penalty of perjury, to no avail.
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3. True and correct copies of Mr. Hyne's deposition transcript is attached and incorporated by
12
reference as "Exhibit 1."
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4. A true and correct copy of the November 10, 2015 BAP Opinion is attached and
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16 5. A true and correct copy of Ms. Jones CV is attached and incorporated by reference as
17 "Exhibit 3."
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6. A true and correct copy of the BAP transcript is attached and incorporated by reference as
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"Exhibit 4."
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I declare under penalty of perjury of the laws of the United States that the foregoing is true
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23 and correct.
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EXHIBIT 1
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Allana Baroni
v.
Nationstar Mortgage
_________________________________
Page 1 Page 3
1
UNITED STATES BANKRUPTCY COURT INDEX
2
CENTRAL DISTRICT OF CALIFORNIA WITNESS EXAMINATION
3
SAN FERNANDO VALLEY DIVISION EDWARD HYNE PAGE
4
MR. RILEY 9, 108
5
In re )Chapter 11 Case MR. OLIVER 77, 109
) 6
)1:12-bk-10986-MB 8
9
Reorganized Debtor. ) EXHIBITS
10
)Adv. Proc. No.: EXHIBIT DESCRIPTION PAGE
11
)1:13-ap-010689-MB Exhibit 1 Notice of Deposition of
___________________________________) Nationstar Mortgage, LLC,
12
) 3 pages 12
13
ALLANA BARONI, ) Exhibit 3 Proof of Claim, 39 pages 13
14
) Exhibit 4 Lehman Brothers Holdings, Inc.
Plaintiff, ) Seller and Structured Asset
15
) Securities Corporation Purchaser
v. ) Mortgage Loan Sale and Assignment
16
) Agreement, dated as of
NATIONSTAR MORTGAGE, LLC, ) April 1, 2004, 22 pages 24
) 17
Page 2 Page 4
1
APPEARANCES OF COUNSEL: 1
I N D E X (CONTINUED)
2
For Plaintiff: 2
EXHIBITS
3
THE LAW OFFICES OF MICHAEL S. RILEY 3
EXHIBIT DESCRIPTION PAGE
BY: MICHAEL S. RILEY, ESQ. 4
Exhibit 7 Mortgage Loan Schedule,
4
401 East Las Olas Boulevard 4 pages 37
Suite 130 5
5
Fort Lauderdale, Florida 33301
Exhibit 8 Structured Adjustable Rate
(818) 877-6423 6
6 Mortgage Loan Trust Mortgage
-and- Pass-Through Certificates
7
7 Series 2004-5, 27 pages 47
8
QUINN EMANUEL Exhibit 10 Escrow Agreement, 38 pages 65
9
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BY: HARRY A. OLIVER, JR., ESQ. Exhibit 11 Original Note, 9 pages 108
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865 South Figueroa Street Exhibit 12 Original Mortgage/Deed of
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10th Floor Trust, 25 pages 108
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Los Angeles, California 90017
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(213) 443-3176 Exhibit 13 Pass-Through Trust Agreement,
(213) 443-3100 Facsimile 12
dated as of September 7, 2016,
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57 pages 67
12 13
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For Defendants: Exhibit 14 Corporate Assignment of Deed
14
SEVERSON & WERSON 14
of Trust, 2 pages 63
BY: BERNARD KORNBERG, ESQ. 15
Exhibit 15 Plan of Liquidation, 3 pages 73
15
One Embarcadaro Center 16
Suite 2600
Exhibit 16 Release and Assignment, 19 pages 89
17
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San Francisco, California 94111 Exhibit 17 Assignment Agreement, 5 pages 89
18
(415) 677-5548 Exhibit 18 Loan Assignment - Assignment
17 Agreement, 9 pages 90
18
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1 (Pages 1 to 4)
Ben Hyatt Certified Deposition Reporters
888.272.0022 818.343.7040 Fax 818.343.7119 www.benhyatt.com
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Edward Hyne - 8/28/2018
Page 13 Page 15
1 1
Q Sir, I'm handing you a copy of the notice of the Wernick. They are what was called NBS or National
2 2
deposition. Have you seen that before? Bankruptcy Counsel Services, and they filed the Proof of
3 3
A Yes. Claim on behalf of Nationstar.
4 4
Q And you're prepared to give testimony on the Q Do you know if information or documentation was
5 5
topics? provided to Mr. Edelman to file that Proof of Claim?
6 6
A Yes. A The firm had direct access to Nationstar's
7 7
Q Is that the document you understand Nationstar systems and records, and so they were able to pull the
8 8
filed as Proof of Claim -- information as to the debt and amounts owing to Nationstar
9 9
MR. RILEY: We're going to move right to the Proof of and the documents that were necessary to be filed with the
10 10
Claim as Exhibit 2. POC.
11 11
MS. BARONI: That's Exhibit 3. Q Okay. And the Promissory Note and the Deed of
12 12
MR. RILEY: That's Exhibit 1, no? Trust attached to that claim is true and correct? Take a
13 13
MS. BARONI: The document request. look at that.
14 14
MR. RILEY: I got you. So this is Exhibit 3. A The image of the, um, Note, um, contains an
15 15
(Exhibit 3 was marked for identification.) endorsement page that is, um -- this isn't, um -- this was
16 16
BY MR. RILEY: an issue with the endorsements on the Note.
17 17
Q Have you seen that document before, Mr. Hyne? Q So the endorsements aren't correct, is that your
18 18
A Yes. testimony?
19 19
Q Did you review that in preparation for this MR. KORNBERG: Excuse me. Objection. Don't testify
20 20
deposition? for my client.
21 21
A Yes. Don't answer that question.
22 22
Q And on whose behalf was Claim 91 being filed? MR. RILEY: It was a question.
23 23
A Nationstar Mortgage, LLC. MR. KORNBERG: Don't answer that question. You can
24 24
Q And who authorized that filing? ask questions. You can't testify for him.
25 25
A Nationstar did. MR. RILEY: Would you repeat that question, please.
Page 14 Page 16
1 1
Q And would you read the top of page 1 that (The record was read.)
2 2
identifies the creditor? BY MR. RILEY:
3 3
A "Nationstar Mortgage, LLC." Q What is your testimony about the Note, Mr. Hyne?
4 4
Q And it's your understanding that Ms. Baroni owes A The Note itself is accurate, but as to the page
5 5
money pursuant to the claim to Nationstar? where the endorsements are, um, there is, actually, um --
6 6
A Yes. the original Note has the endorsements on the backside of
7 7
Q And would you point out the agreements in that the signature page, and this was an alternate second
8 8
Proof of Claim that represent Ms. Baroni owing money to endorsement sheet that had been prepared by Aurora Bank,
9 9
Nationstar? it's my understanding. That's why there was a discrepancy
10 10
MR. KORNBERG: Objection. Unclear. Would you raised relating to the endorsements.
11 11
clarify what you mean by "agreements"? MR. OLIVER: Prepared by?
12 12
MR. RILEY: I think he needs to go to whatever THE WITNESS: Aurora, the prior servicer.
13 13
document is in there that obligates Ms. Baroni to MR. RILEY: Would you, please, read back his answer,
14 14
Nationstar, so I would think it would be in the documents if you would.
15 15
in there. (The record was read.)
16 16
THE WITNESS: There's a copy of the original Note MR. RILEY: Thank you.
17 17
with blank endorsements. Nationstar had acquired the BY MR. RILEY:
18 18
servicing of the loan from Aurora Bank July 1st, 2012. Q Why would there be an alternate endorsement
19 19
BY MR. RILEY: sheet prepared by Aurora?
20 20
Q I'm sorry, when? A Um, well, I don't have personal knowledge. I
21 21
A On July 1st, 2012. And payments on the account didn't work for Aurora. It's my understanding that the,
22 22
would be paid to Nationstar as the servicer. um -- Aurora had an image of the Note that, um,
23 23
Q And who is Craig Edelman? I notice he signed on apparently, when imaging their system, they didn't have
24 24
behalf of Nationstar. the back page with the endorsements on it, and someone at
25 25
A He is an attorney at Brice, Vander, Linden & Aurora had gone in and created a separate endorsement
4 (Pages 13 to 16)
Ben Hyatt Certified Deposition Reporters
888.272.0022 818.343.7040 Fax 818.343.7119 www.benhyatt.com
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Edward Hyne - 8/28/2018
Page 17 Page 19
1 1
sheet, um, for the purposes of having a complete version MR. RILEY: Are you done?
2 2
of the Note with an endorsement, not knowing that the back MR. KORNBERG: That's it.
3 3
of the original Note, um, contained the, um, original BY MR. RILEY:
4 4
endorsements. Q Let's go back to the document you're referring
5 5
Q So it's your testimony they prepared an allonge, to and that you're looking at in front of you. What is
6 6
if you're familiar with the term "allonge"? that?
7 7
MR. KORNBERG: Objection. Can you, please, just A This page, um, is a page that has three
8 8
restate it with a question, rather than telling him what endorsements on it.
9 9
his testimony is? Q Okay. And what was that document used for since
10 10
MR. RILEY: Okay we have two documents? Which document is that?
11 11
Q My question to you is, I'm not clear on what MR. KORNBERG: Objection. Please restate.
12 12
Aurora did. I heard your answer, but I'm going to need to MR. RILEY: Bear with me. Hold on, let me find it.
13 13
delve further, because I'm confused by your response. Q So is it your testimony this was the endorsement
14 14
Is your response that a separate sheet of paper that was prepared by Aurora that was attached to Claim 1?
15 15
was used, which we call an allonge? MR. KORNBERG: Objection. Asked and answered.
16 16
MR. RILEY: Are you all right with that, Bernard? THE WITNESS: Yes.
17 17
MR. KORNBERG: I'm fine with that. BY MR. RILEY:
18 18
BY MR. RILEY: Q Okay. And how do you have knowledge of how this
19 19
Q What we call an allonge, is that what was used happened?
20 20
by Aurora? A We have -- in our imaging system when the loan
21 21
MR. KORNBERG: And I will object and note for the came across from Aurora to Nationstar to service.
22 22
record that the witness has already stated he does not We had images with this Note with this
23 23
have personal knowledge of these facts. endorsement page, and a separate image of the Note as it,
24 24
MR. RILEY: Okay. actually, appears with the other endorsements. Um, I've
25 25
THE WITNESS: I don't know if you would call it an had discussions with Simon Ward-Brown, who --
Page 18 Page 20
1 1
allonge, um, but they prepared, um, a sheet that had new Q I'm sorry, who?
2 2
endorsements so that it could be imaged, um, with, um, an A Simon Ward-Brown. He's an employee of
3 3
image of the Note that was, um, different from the Nationstar now, but was previously employed by Aurora when
4 4
original Note that already had the endorsements on the this loan -- before the loan transferred to Nationstar.
5 5
backside of the signature page. Q And he's the one that informed you how these
6 6
BY MR. RILEY: signatures came to be on the claim?
7 7
Q So for clarity, they signed on a separate sheet MR. KORNBERG: Objection. Asked and answered.
8 8
of paper, is that your testimony? THE WITNESS: We discussed as to how there might be
9 9
MR. KORNBERG: Objection. Asked and answered. two different, um, endorsement pages.
10 10
THE WITNESS: Yes. BY MR. RILEY:
11 11
MR. RILEY: Give me one second, if you would, please. Q When would you have had that conversation?
12 12
MR. KORNBERG: Before we continue, may I, please, A I think it was last year, late last year.
13 13
make a statement? Q Just one second. Mr. Hyne, why wasn't the true
14 14
MR. RILEY: I'm sorry, what? and correct copy of the original Note filed in the amended
15 15
MR. KORNBERG: Before we continue, may I, please, Proof of Claim?
16 16
make a brief statement? It can be on or off the record. MR. KORNBERG: Objection. I didn't think there was
17 17
MR. RILEY: Absolutely. an amended Proof of Claim, so I'm going to instruct my
18 18
MR. KORNBERG: Just very quickly, I would note here client not to answer that question unless you can provide
19 19
that the scope of discovery is limited to the sale of the an amended Proof of Claim.
20 20
Note. As I stated, we will answer questions regarding BY MR. RILEY:
21 21
that earlier, however, should this deposition have to end Q Why was an amended Proof of Claim not filed, if
22 22
without you not completing and it's because you spent four that wasn't the accurate Note?
23 23
hours discussing stuff outside the scope of discovery, we A I'm not sure why there wasn't an amended Proof
24 24
will use that as a basis to assert you're not entitled to of Claim filed. Certainly Nationstar wasn't aware of the
25 25
a continued deposition. issue until, I believe, it was raised later on in the
5 (Pages 17 to 20)
Ben Hyatt Certified Deposition Reporters
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1 1
BY MR. OLIVER: Q No, I'm not asking whether you provided them.
2 2
Q And you spent those couple weeks reviewing The question was, do you have any personal
3 3
documents? knowledge regarding the preparation or negotiation or
4 4
A Yeah, in preparation for the deposition, for execution of those pre-2012 documents relating to the
5 5
sure. Baroni loan?
6 6
Q Did you spend any time talking with any A No. Neither me nor Nationstar would have been
7 7
individuals who had personal knowledge of how the involved in the preparation of any documents at that time.
8 8
documents were prepared? Q Now, you said you talked to Simon Ward-Brown,
9 9
MR. KORNBERG: To clarify, you're referring to the and I want to make sure I have his name spelled correctly.
10 10
SARM trust documents? I know how to spell "Simon," but is Ward-Brown, W-a-r-d,
11 11
MR. OLIVER: I'm referring to any documents relating hyphen, B-r-o-w-n, just like it sounds?
12 12
to the Baroni loan. A Yes.
13 13
MR. KORNBERG: Okay. Q What is Mr. Ward-Brown's position?
14 14
THE WITNESS: I've talked to people that worked A Um, he holds the same position at Nationstar
15 15
for -- or work for either NRZ or Fortress, its parent that I do.
16 16
company, on telephone calls about the documents that, um, Q Which is, for the record?
17 17
were prepared by NRZ. A I'm a senior assistant secretary of litigation
18 18
BY MR. OLIVER: support and resolution analyst.
19 19
Q In what time frame were those documents Q Is Mr. Ward-Brown one of the people who
20 20
prepared? testifies for Nationstar?
21 21
A I'm sorry? A Yes.
22 22
Q In what time frame were those documents Q How long has he been with Nationstar?
23 23
prepared, what year? A I think it's coming close to a year. Maybe a
24 24
A Oh, those would have been -- well, the documents year. I'm not sure.
25 25
we've talked about, um, at least 2017 for the majority of Q Before that he was with?
Page 82 Page 84
1 1
them. Some go back to 2014, and then some go back to A Aurora.
2 2
2016. Q For what period was he with Aurora?
3 3
Q Did you spend any time talking with anyone who A I know he was there for years, but I don't know
4 4
had any personal knowledge regarding the preparation of the time period.
5 5
any Baroni loan documents for the pre-2012 time period? Q Did Mr. Ward-Brown have any personal knowledge,
6 6
A The only person I've ever talked to about or does Mr. Ward-Brown have any personal knowledge
7 7
pre-2012 would have been Simon Ward-Brown regarding the regarding any of the Baroni loan documents?
8 8
endorsements on the Note, but other than that, no one. A I can't speak to what Mr. Ward-Brown knows or
9 9
Q Were all the Baroni loan documents that you doesn't know.
10 10
reviewed produced in this case, if you know? Q He may have, he may not have, you're not sure?
11 11
A I'm not sure. I would assume we produced A That's correct.
12 12
everything that we've been requested to produce, um, but Q Did he tell you anything that suggested he had
13 13
no, I don't know of every document that's been produced. any personal knowledge regarding the preparation of any of
14 14
Q So you don't know one way or another, but you the Baroni loan documents?
15 15
believe what you reviewed was produced in the case; is A No, that never came up.
16 16
that fair? Q Now, I think you testified you spoke with
17 17
A Yes. Mr. Ward-Brown about an alternate second set of --
18 18
Q Do you have any personal knowledge -- I think alternate second endorsement sheet. Do I have that right?
19 19
this is clear, but I want to make sure it's clear. A Yes.
20 20
Do you have any personal knowledge of any Baroni Q And the alternate second endorsement sheet, you
21 21
loan documents that predate 2012 in the sense that you believe, was prepared by Aurora Bank?
22 22
signed them, negotiated them, drafted them, anything like A Yes.
23 23
that? Q Did he know how that was prepared or why that
24 24
A I'm not aware of any other Baroni documents that was prepared when you spoke with him?
25 25
predate 2012 that we haven't already provided. A We had discussed what he believed to have
21 (Pages 81 to 84)
Ben Hyatt Certified Deposition Reporters
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1 1
happened, um, to provide an explanation why there is a record.
2 2
second endorsement page. There were some pre-2012 transactions regarding
3 3
Q When you say you discussed what he believed to the Aurora loan that involved Platinum Capital, correct?
4 4
have happened, were the two of you just speculating as to A They were the loan originator.
5 5
possibilities, or did anybody know what had happened? Q And they entered into an agreement or assigned
6 6
A He didn't say that he was there when it happened the loan in some respect to Lehman Brothers Bank, FSB; is
7 7
physically at the time that it was occurring, um, so he that correct? You can refer to Exhibit 20, if you want.
8 8
was trying -- he believed that that is what happened based A Yeah, Lehman Brothers Bank, yes.
9 9
upon his, um, knowledge of the servicing policies and Q Do you have any personal knowledge of any
10 10
processes at Aurora. transactions between Platinum Capital Group and Lehman
11 11
Q So based on his knowledge of the general Brothers Bank with respect to the Baroni loan?
12 12
policies at Aurora, he posited some options as to what A I don't have any personal knowledge. I see that
13 13
might have happened, or was it just one option? there's an original endorsement on the back of the Note
14 14
A No. I believe that was the one option. that has their stamp.
15 15
Q So based on his knowledge of Aurora's general Q Okay. The notes you prepared, that's your
16 16
policy, he said he believed that's what had happened? handwriting in Exhibit 20; is that right?
17 17
A Aurora has an imaging system where they image A Yes.
18 18
their own documents. An employee of Aurora had looked at Q What were those notes intended to show?
19 19
the images of the Note and saw that there was not an A Um, that was just for my benefit, because there
20 20
endorsement page image with the Note as part of the Note are so many documents and, um, transactions regarding the
21 21
document. Baroni loan, that I needed to make sure that I had them in
22 22
Even though the original, um, Note has the order.
23 23
endorsements on the back page of the signature page, um, Q Not a memory test even for people who spent a
24 24
it was Simon's understanding or belief that, um, an couple weeks looking at the documents. That's fair.
25 25
employee of Aurora then prepared, um, a separate What is the source of the information in those
Page 86 Page 88
1 1
endorsement page, um, for the purposes of completing the notes, those three pages?
2 2
chain of endorsements for the image of the Note that they A These would have come from the documents
3 3
had in their system. themselves, the individual documents that are referenced
4 4
Q What was the name of the employee at Aurora who in my notes.
5 5
saw there was no endorsement page? Q So the notes are a summary of transactions that
6 6
A Um, he didn't have a name of a person. He are reflected in larger, underlying documents; is that
7 7
believed that's what would have triggered an employee fair?
8 8
looking at the imaging system. A Yes.
9 9
Q When did that unnamed Aurora employee create Q Did you attempt in the notes to include all the
10 10
that second page? important transactions that related to the Baroni loan?
11 11
A It's not dated, so I'm not sure if he could tell A Yes.
12 12
but, um, there's certainly nothing on the document that Q Similar question regarding transactions between
13 13
would indicate when it occurred. Lehman Brothers Bank and Lehman Brothers Holdings, Inc.
14 14
Q How did the Aurora employee create a second Do you have any personal knowledge regarding
15 15
endorsement page? those transactions?
16 16
A I don't know. A Um, I have no personal knowledge of those
17 17
Q Do you know whether the page was photoshopped? transactions, except that we're in possession of the Note
18 18
A I don't know. that has the blank endorsement on them -- I mean, the
19 19
Q Do you know whether the page was physically endorsements.
20 20
xeroxed with a cut-and-paste technique? Q And for the record, similar question regarding
21 21
A I don't know. transactions between Lehman Brothers Holdings, Inc. and
22 22
Q Did Mr. Simon Ward-Brown talk to anyone who, Structured Assets Securities Corp.
23 23
actually, knew what happened? Any personal knowledge of those transactions, as
24 24
A I'm not aware. they relate to the Baroni loan?
25 25
Q I want to make sure this is clear for the A Um, again, no personal knowledge, but the fact
22 (Pages 85 to 88)
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EXHIBIT 2
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FILED
1 NOT FOR PUBLICATION NOV 10 2015
SUSAN M. SPRAUL, CLERK
2 U.S. BKCY. APP. PANEL
OF THE NINTH CIRCUIT
3 UNITED STATES BANKRUPTCY APPELLATE PANEL
4 OF THE NINTH CIRCUIT
5 In re: ) BAP No. CC-14-1578-KuDTa
)
6 ALLANA BARONI, ) Bk. No. 12-10986
)
7 Debtor. ) Adv. No. 13-01069
______________________________)
8 )
ALLANA BARONI, )
9 )
Appellant, )
10 )
v. ) MEMORANDUM*
11 )
NATIONSTAR MORTGAGE, LLC, )
12 )
Appellee. )
13 ______________________________)
14 Argued and Submitted on September 24, 2015
at Malibu, California
15
Filed – November 10, 2015
16
Appeal from the United States Bankruptcy Court
17 for the Central District of California
18 Honorable Alan M. Ahart, Bankruptcy Judge, Presiding
19
Appearances: Louis J. Esbin argued for appellant Allana Baroni;
20 Bernard Kornberg of Severson & Werson argued for
appellee Nationstar Mortgage, LLC.
21
22 Before: KURTZ, DUNN and TAYLOR, Bankruptcy Judges.
23
24
25
26 *
This disposition is not appropriate for publication.
27 Although it may be cited for whatever persuasive value it may
have (see Fed. R. App. P. 32.1), it has no precedential value.
28 See 9th Cir. BAP Rule 8024-1.
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1 INTRODUCTION
2 The debtor Allana Baroni1 commenced an adversary proceeding
3 against Nationstar Mortgage LLC challenging Nationstar’s proof of
4 secured claim, and the bankruptcy court granted summary judgment
5 in favor of Nationstar. The bankruptcy court determined that
6 there was no genuine factual dispute that Nationstar possessed
7 the original promissory note indorsed in blank, so Nationstar
8 qualified as a person entitled to enforce the note and hence had
9 standing to file the proof of claim. Allana asserts that
10 Nationstar demonstrated neither that it had a right to enforce
11 the note and the deed of trust nor that it had an agency
12 relationship with someone else who did.
13 Our resolution of this appeal largely hinges on our answer
14 to a single question: when a creditor, in the process of
15 supporting a proof of claim based on a promissory note, presents
16 the bankruptcy court with two materially different copies of the
17 indorsements supposedly accompanying the note, can the court on
18 summary judgment correctly determine that there is no genuine
19 dispute that the note has been duly indorsed in blank? We answer
20 this question in the negative. While the bankruptcy court’s
21 summary judgment against Allana on one of Allana’s four claims
22 for relief can be affirmed on alternate grounds, summary judgment
23 on the other three claims for relief must be reversed.
24 Accordingly, we AFFIRM IN PART, REVERSE IN PART AND REMAND
25 FOR FURTHER PROCEEDINGS.
26
27
1
For the sake of clarity, we refer to Allana and her husband
28 James Baroni by their first names. No disrespect is intended.
2
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1 FACTS
2 In February 2004, Allana’s husband James refinanced a parcel
3 of residential real property located in Carmel, California.
4 According to several of Allana’s filings in her bankruptcy case,
5 the Baronis did not actually reside in the Carmel property but
6 instead used it as a rental property. In furtherance of the
7 refinancing, James executed a note in the amount of $1,430,000.00
8 and a deed of trust securing repayment of the note.
9 At the time of the refinancing, James owned the Carmel
10 property as his sole and separate property. But shortly after
11 the refinancing, James executed a grant deed conveying the Carmel
12 property to himself and Allana as husband and wife as joint
13 tenants. Allana does not dispute that she took her interest in
14 the Carmel property subject to the deed of trust and in that
15 sense has admitted that she might be obliged to repay the Carmel
16 note in order to prevent foreclosure of her real property
17 interest. On the other hand, Allana claims that she is not
18 certain who she is obliged to pay. She also claims that the
19 Carmel note and the Carmel deed of trust have been irrevocably
20 split, which has rendered the deed of trust unenforceable.
21 In February 2012, Allana commenced her bankruptcy case by
22 filing a voluntary chapter 132 petition. Later that same month,
23 she voluntarily converted her case from chapter 13 to chapter 11.
24
25 2
Unless specified otherwise, all chapter and section
26 references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and
all "Rule" references are to the Federal Rules of Bankruptcy
27 Procedure. All “Civil Rule” references are to the Federal Rules
of Civil Procedure, and all “Evidence Rule” references are to the
28 Federal Rules of Evidence.
3
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4
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1 * * *
2 (F) any person collecting or attempting to collect
any debt owed or due or asserted to be owed or due
3 another to the extent such activity (i) is
incidental to a bona fide fiduciary obligation or
4 a bona fide escrow arrangement; (ii) concerns a
debt which was originated by such person;
5 (iii) concerns a debt which was not in default at
the time it was obtained by such person; or
6 (iv) concerns a debt obtained by such person as a
secured party in a commercial credit transaction
7 involving the creditor.
8 15 U.S.C.A. § 1692a (West).
9 The bankruptcy court did not explain its reasoning for this
10 holding, but it seems to be based on the notion that mortgage
11 servicers generally are not considered debt collectors under the
12 FDCPA, so long as their role as mortgage servicer arose before
13 the borrower defaulted. Perry v. Stewart Title Co., 756 F.2d
14 1197, 1208 (5th Cir. 1985); see also Lal v. Am. Home Servicing,
15 Inc., 680 F.Supp.2d 1218, 1224 (E.D. Cal. 2010) (quoting Perry
16 and stating: “[t]he law is well settled that FDCPA's definition
17 of debt collector ‘does not include the consumer's creditors, a
18 mortgage servicing company, or any assignee of the debt.’”);
19 Mansour v. Cal-Western Reconveyance Corp., 618 F.Supp.2d 1178,
20 1182 (D. Ariz. 2009) (same).
21 Assuming without deciding that Perry, Lal and Mansour have
22 correctly interpreted the FDCPA, we still cannot affirm the
23 bankruptcy court’s ruling on the FDCPA claim on this basis.
24 There are a number of disputed material factual issues that
25 prevent us from doing so, including but not limited to the
26 following: (1) whether the Carmel loan is in default; (2) if so,
27 when that default occurred; (3) whether Nationstar is the
28 mortgage servicer for the Carmel note; and (4) if so, when it
30
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1 became the servicer for that note. The parties contested all of
2 these issues in the adversary proceeding, and the bankruptcy
3 court incorrectly attempted to decide them on summary judgment.
4 As a second alternate theory for granting summary judgment
5 against Allana on her FDCPA claim, the bankruptcy court held that
6 the Carmel refinancing loan was not a “debt” covered by the
7 FDCPA. We agree. Under the FDCPA, a “debt” is defined as:
8 any obligation or alleged obligation of a consumer to
pay money arising out of a transaction in which the
9 money, property, insurance, or services which are the
subject of the transaction are primarily for personal,
10 family, or household purposes. . . .
11 15 U.S.C. § 1692a(5) (emphasis added); see also Miller v.
12 McCalla, Raymer, Padrick, Cobb, Nichols, & Clark, L.L.C.,
13 214 F.3d 872, 874-75 (7th Cir. 2000); Bloom v. I.C. Sys., Inc.,
14 972 F.2d 1067, 1068 (9th Cir. 1992).
15 Here, the summary judgment record establishes that the
16 Carmel loan was used to refinance the Carmel property, and in her
17 bankruptcy filings, Allana repeatedly admitted that the Carmel
18 property was not used as the Baronis’ residence, but
19 rather was used as a rental property to generate income.12 Under
20 these circumstances, we hold that the bankruptcy court correctly
21 determined that the Carmel refinancing loan was not a debt
22 covered by the FDCPA. Cf. Miller, 214 F.3d at 874-75 (indicating
23 that a loan used to refinance property that at the time of the
24
25 12
The loan documentation for the Carmel refinancing loan
26 further supports the notion that the Carmel property was not used
as the Baronis’ residence at the time James entered into the
27 transaction. The Carmel deed of trust included an assignment of
rents rider that, among other things, relieved James from the
28 obligation of occupying the Carmel property as his residence.
31
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32
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33
Case
Case1:13-ap-01069-MB
1:12-bk-10986-AA
Case: 14-1578, Document:
Doc
Claim
318
9-1 29-4,
Part
Filed209/28/18
Filed:
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09/17/12
Entered Desc
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Page
Exhibit
12
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Appendix A
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1:13-ap-01069-MB
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Doc
Doc50-2
318 29-14,
Filed 09/28/18
09/24/14
Filed: 05/12/2015
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Page 12
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Document
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Page557 of
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Exhibit A
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EXHIBIT 3
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Lora A. Jones
Curriculum Vitae
15110 Gibbons Terrace
Upper Marlborough, MD 20774
Telephone: (301) 974-5433
Email: LoraAJones8@gmail.com
PROFESSIONAL EXPERIENCE
EDUCATION
STATEMENT OF QUALIFICATIONS
Lora A. Jones ("LA"), a recent retiree of the US Department of Homeland Security – U.S.
Secret Service Agency, and has amassed 25-years of law enforcement experience. Her
assignments included:
Over the course of her career, LA has conducted numerous white-collar crime
investigations, involving various forms of fraud including:
Credit Card;
False Identification;
False Applications;
Loan Fraud;
Counterfeit Currency; and
Counterfeit financial payment instruments of the government.
Lora's final years in government were spent supervising investigations of more complex
financial crimes such as mortgage fraud, money laundering, investment frauds, and asset
forfeiture.
Assigned to the Headquarters, Criminal Investigative Division for the last few years of
her career, Lora was the agency's Money Laundering and Mortgage Fraud Program Manager,
supervising a small cadre of investigators and analysts, who collectively were responsible for
providing guidance, and resources to field investigators conducting major, organized and trans-
national white-collar criminal activity.
As Program Manager of this complex financial crime unit, Lora and her team researched,
and then wrote a Proposal recommending a new initiative within Secret Service to enhance
investigations creating, and using the addition of a forensic financial analysis unit to address
complex case investigations, and the unit’s utilization of collected large databases housing mega-
data evidence.
This Proposal established the need for a team of contracted Certified Fraud Examiners,
framing the skills, and compensation requirements; the optimal geographical placement, and
utilization of work locations throughout the U.S. Secret Service network of field offices; and also
specified the resources and tools required for examiners and agents to successfully complete
these challenging assignments.
The Proposal was one (1) of three (3) presented to DHS Leadership through to U.S.
Secret Service Executive Management. The Proposal expressed the added-value of forensically
extrapolating volumes of hidden evidence of fraud, and its use to support arrests, prosecution
rates, and asset forfeiture. The project was subsequently approved and implementation began
with the recruitment and hiring of team members to fill the posts prior to Lora's retirement.
While employed with the government, a significant portion of Lora's time was regularly
spent crafting partnerships and liaisons with members of the Regulatory, Financial and Banking
Industries; and with the Federal, State and local Law Enforcement entities. Initiatives included
specifying “Best Practices;” evaluating risk; and formulating solutions in the Regulatory,
Enforcement and Financial Industry workspaces. Jones was a regular member of the Department
of Justice’s Bank Fraud Working Group, and the Mid-Atlantic Anti-Money Laundering Working
Group. Jones is an Associate Member of the Association of Certified Fraud Examiners.
Also, Lora has lectured and conducted presentations at various government inter-agency,
financial industry meetings, and think-tank engagements on new and emerging fraud trends:
Ms Jones’ entire professional life has been spent in service to her country. Early in her
career, she served as a Captain in the U.S. Army Signal Corps; and also served in her local
community as a police officer with the Fairfax, Virginia County Police Department.
EXHIBIT 4
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2 --oOo--
3 ------------------------------x
ALLANA BARONI, )
4 ) Case No. 14-1578
Plaintiff, )
5 )
v. ) September 24, 2015
6 ) Thursday, 9:00 A.M.
NATIONSTAR MORTGAGE, LLC, )
7 )
Defendant. )
8 ------------------------------X
9
10
11 TRANSCRIPT OF PROCEEDINGS
BEFORE THE HONORABLE LAURA S. TAYLOR
12 BEFORE THE HONORABLE FRANK L. KURTZ
BEFORE THE HONORABLE RANDALL L. DUNN
13
14 APPEARANCES:
25
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Page 2
1 P R O C E E D I N G S
2 --oOo—
6 is CC-14-1578.
Page 3
19 transaction.
25 hole. It’s --
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Page 4
3 matter --
13 appeal and every other appeal is that the evidence does not
23 and yet in summary judgment they say that they were just
Page 5
2 says he has the original note. And if the servicer has the
13 (indiscernible).
17 has standing.
20 opinion.
Page 6
8 issue that they were not -- they did not present any
9 evidence as to how they came by the note. And as the
15 endorsed --
18 standing.
22 standing.
Page 7
2 disappears.
4 because I still believe that under the UCC and under the
5 case law you’d have to be able to show how you came by that
Page 8
16 payments, then the entity that comes forth and says that
Page 9
6 dollars, correct?
12 that (indiscernible).
Page 10
4 done that?
8 gone poof.
9 MR. ESBIN: No. We’re asking this court to
14 (indiscernible).
Page 11
1 to this claim.
3 this --
6 severed from the note such that it’s -- how -- who would it
13 monies are actually owed and if the deed of trust does not
15 process --
19 the note --
Page 12
3 Mr. Kornberg.
6 took out five high value loans. She thinks she doesn’t
7 owe --
11 one where she’s not actually a party to the loan, but took
15 fun to be here.
Page 13
7 that’s --
11 note, but the question that was raised and argued quite
21 (indiscernible). So --
Page 14
2 one another.
6 will not move. They’ll always look the same on the copy.
10 apologize.
17 put one copy in front of the court and you said, this is
19 put another copy before the Court and said, this is it.
21 how both of those are put before the Court. And I’ll tell
22 you, me, I’ve tried those cases and I try it because your
Page 15
4 understand --
12 point.
Page 16
12 record.
19 this that some note which you can’t identify as this note
20 has been transferred to the loan trust. How would you know
Page 17
3 but we would --
14 exception?
16 records and the records say that, yes, as long as the note
21 records?
24 charging --
Page 18
19 signed the allonge. I’m not saying you can’t do it, but I
20 just don’t see it in the proof you’ve had and I don’t see
Page 19
25 that as well.
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Page 20
4 (indiscernible).
15 the note? The logical inference was that this allonge was
19 declared that.
25 be?
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Page 21
10 to that.
16 was necessary to use it, found the original note and you
21 with the summary judgment where the Court did not make
Page 22
1 concerned.
6 allonge or they tore the allonge off and put it back on, in
22 lack. I mean --
24 (indiscernible).
Page 23
1 all I can --
5 federal court?
10 can you look me in the eye and say, that’s just okay?
19 litigation analyst?
Page 24
14 from the company I don’t know what the intent of the bare
Page 25
7 show that they were the transferee of the note and that
14 transferee?
16 to the non-holder --
24 the records can see that this -- was trying to chart a loan
Page 26
Page 27
1 Honor?
15 that they --
20 particular one?
Page 28
1 much. Your time is expired and Mr. Esbin will get some
6 interesting.
12 this case and many other cases, the people are -- because
15 out that this note was assigned to this trust and that’s
17 to be paid.
19 the payment?
23 your client.
Page 29
3 rules, and the law and the rules have been thrown out to a
5 here and go, well, she signed the note so she should be
10 these securitized trusts you also find out that there are
15 money.
18 we’re all sitting here trying to figure out, the end of the
19 day --
Page 30
2 steps up and says, I’m owed money because I paid the credit
10 someone has said, I’m owed the money. But maybe they’re
16 intent and that intent is to put that paper here and there
22 money to.
Page 31
1 the original mortgage person, say they gave you the money,
2 you sign the note, they bring in someone from the bank
12 determination?
17 bankruptcy laws and state law to know who she owes the
18 money to. That fact -- that fact should not be swept aside
21 multiple endorsements.
24 and if she pays the person presenting the bearer paper she
Page 32
4 in due course. This court has used the word “holder” and
5 holder is --
10 holder in due course which has its own meaning and we have
21 is (indiscernible).
Page 33
1 allotted in --
5 (Laughter)
12 (indiscernible).
Page 34
12 objections.
23 standing on -- to --
Page 35
2 case that we have in the other one about the nature of the
8 irrelevant.
9 MR. ESBIN: Bank of America filed a claim,
10 though.
Page 36
17 And what they do is they come in and go, here’s the note
19 found in the other case is you have the note and you have
Page 37
12 she pays their paper because she’s paid the obligation and
22 But the fact that she pays it to party A doesn’t mean that
24 fact that there’s some deal behind the note where Party A
Page 38
5 a means --
7 retained (indiscernible).
14 people involved very much saw this law and I think they use
Page 39
15 more --
Page 40
Page 41
11 longer enforceable.
Page 42
6 (indiscernible).
10 ownership, isn’t that why they make down paper bearer paper
Page 43
17 know --
25 Honor.
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Page 44
12 And --
16 thing.
Page 45
2 time.
7 Honors.
18 to?
20 to --
Page 46
6 to that issue.
17 they complied with those orders. He may not be, but there
20 He just admits this over and over again that she complied
21 with that.
Page 47
10 pending.
18 saw (indiscernible).
20 It’s a little off point so it’s going back to the last one,
Page 48
5 did --
10 firm? No, by --
14 analyst?
17 judgment.
23 expert.
Page 49
21 (indiscernible).
Page 50
1 at docket numbers 110 to 113, the note dated May 19, 2005.
23 in due course.
Page 51
4 consideration --
12 capitalized holder.
17 1201 --
Page 52
6 it.
19 and enforce the note. That’s what we’ve been saying all
22 believe --
Page 53
2 (indiscernible) --
8 rest.
9 JUDGE DUNN: Thank you very much.
19 * * * * * * *
23