PERRY V.

JPMORGAN CHASE BANK, NA; FEDERAL NATIONAL MORTGAGE ASSOCIATION; QUALITY LOAN SERVICE CORP

APPELLANT'S REPLY BRIEF

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FIRST APPELLATE DISTRICT, DIVISION THREE

LEIGHTON LEE PERRY Plaintiff and Appellant, v. FEDERAL NATIONAL MORTGAGE ASSOCIATION, JP MORGAN CHASE BANK NA, QUALITY LOAN SERVICE CORP, Defendants and Respondents.

Court of Appeal No. A139655

(Super. Ct. No. MSC10-02914)

Appeal From a Judgment Of The Superior Court, County of CONTRA COSTA Hon. Laurel S. Brady, Judge _________________________________________ APPELLANT'S REPLY BRIEF TO RESPONDENTS FEDERAL NATIONAL MORTGAGE ASSOCIATION, JP MORGAN CHASE BANK NA, AND QUALITY LOAN SERVICE CORP _________________________________________ John C. Cox, Esq. Keesal, Young & Logan 450 Pacific Ave San Francisco, CA 94133 (415) 398-6000 Leighton Lee Perry 6724 Waverly Rd, Martinez, CA (925) 949-8377 LL_Perry@att.net Appellant Self-Represented

Charles Bell, Esq McCarthy & Holthus LLP 1770 Fourth Ave San Diego, CA 92101 (619) 685-4800

PERRY V. JPMORGAN CHASE BANK NA et al

TABLE OF CONTENTS

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MEMORANDUM SUMMARY OF ISSUES.

1 3

1.) Did the trial court err in failing to determine whether Respondents have capacity to receive equitable relief from the court as a question of law over jurisdiction of parties?..................................................... 3 Respondents JPM-FNMA present no evidence of capacity for equitable relief The assignment executed to JPM subsequent to the NOD is a nullity 4 4

2.) Did the trial court err in determining subject matter jurisdiction in a summary judgment motion by allowing Respondents new argument in their Reply to their summary judgment motion? ........................... 6 3.) Did the trial court err in taking judicial notice of, and accepting as true, the contents of certain recorded documents? ........................... 10 4.) This case is distinguished from Gomes and Calvo by the Deed of Trust language that overrules the all inclusive language of Civil Code 2924 et seq. and exception to Civ Code 2932.5 as an other encumbrancer.................................................................................. 12 5.) Did the trial court err in its ruling that there is no genuine dispute whether the Notice of Default (NOD) is void?............................. 14 6.) Did the trial court err in ruling that QLS was an agent of the beneficiary and could act as such to pass agency to yet another party to file the NOD? ...................................................................... 17 7.) Does substantial evidence contradict the trial courts ruling that the original promissory note was presented at Appellants deposition as a permissible lay opinion over Appellants objection? ............. 18 8.) Does substantial evidence contradict the trial courts finding that Appellant attested to his signature?.................................................. 20 9.) Was Appellant denied due process by the trial court relinquishing decisions on motions to compel discovery to a discovery facilitator? ....................................................................................... 20 10.) [Did] The Court erred in its decision regarding Plaintiffs objection to judicially noticed documents of Defendants? .............. 20 11.) [Did] The Court erred in its decision that a single beneficiary was properly identified? .......................................................................... 21 12.) The Court erred in its decision to consider the Fourth cause of
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TABLE OF CONTENTS

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action in light of the First, Second, and Third causes of action. ...... 23 13.) Did the trial court deny Appellant due process by allowing new significant argument regarding diversity jurisdiction of the court in a reply to a summary judgment motion?............................................. 23 14.) Plaintiff requested Defendants to produce and identify the common business documents showing their vault custodians either transferred the original promissory note to a subsequent beneficiary, or received the original promissory note, or sent or received bailee letters in its stead. ............................................................................. 23 15.) Post- Appeal Considerations....................................................... 24 Third party payments elevate the question of whether a default was present or cured on the Subject Loan A similar case explaining the protection of title and UCC considerations from New Mexico Supreme Court The California Supreme Court denied review of the motion to depublish the Glaski decision SUMMARY 24

25 25 26

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TABLE OF AUTHORITIES

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Cases Coyle v. Davis, 20 Wis. 564 (1866) ..............................................................5 Cuomo v. Clearing House Association, L. L. C. (2009), 557 U.S. 519........9 Dimock v. EMERALD PROPERTIES, 97 Cal. Rptr. 2d 255, 81 Cal. App. 4th 868 ...................................................................................................18 Fontenot v Wells Fargo Bank NA 198 CalApp4th 256 129 CalRptr 467 ....6 Glaski v. Bank of America (2013) 5th Dist. Ct. App. No. F064556...........25 Lona v. Citibank, N.A. (2011) 202 Cal.App.4th 89, 112............................21 Montgomery v. Middlemiss, 21 Cal 103.......................................................5 Shores v Scott River Co 21 Cal 135..............................................................5 Taguinod v. World Sav. Bank, FSB, 755 F. Supp. 2d 1064, 1071-72 (C.D. Cal. 2010).................................................................................................8

Statutes Cal Civ Code 2924j(a)(4) ..........................................................................14 Cal Civ. Code 2924h(g).............................................................................16 Cal.Civ Code 2943(e)(4) .........................................................................1, 7 Penal Code 115.5.......................................................................................16

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MEMORANDUM Appellant submits this Reply Brief to address salient points unaddressed by Respondents JP Morgan Chase Bank NA (JPM) / Federal National Mortgage Association (FNMA; together JPM-FNMA) in their Opening Brief. This Reply Brief also addresses the pertinent issues presented by Quality Loan Service Corp. (QLS) in their Brief of Respondent. Appellant requests some latitude from this Court for attempting to combine responses to two motions into a single document in the interest of conserving court resources in the event the brief exceeds the word count limitation. Respondents JPM-FNMAs argument is based on 5 premises 1) that the state consumer protection law reflected in Cal Civ Code 2943(e)(4) is preempted by federal law; 2) no tort resulted by their refusal to timely provide all the required documents requested; 3) that the special endorsement to Federal Home Loan Bank San Francisco (FHLB-SF) is of no legal effect on the chain of beneficiary interest claimed by JPMFNMA and therefore the court has jurisdiction of standing to consider equitable relief to Respondents; 4) that they suffered a loss with the purchase and lack of repayment of the Subject Loan and have standing of equitable relief; 5) that they were not knowingly a party to a staged bidrigging ploy of the scheduled trustee sale; 6) no showing of unclean hands was apparent in their actions. The brunt of QLS relevant argument is based on 4 presumptions 1) a bona fide beneficiary was identified at the publication of the NOD; 2) an agency relationship was factually evidenced by QLS to that beneficiary; 3)
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the contract language on the deed of trust conflicts with statutory provisions and is therefore not binding; 4) no showing of unclean hands was apparent in their actions. The trial court erred in misidentifying a bona fide beneficiary; failing to cite the facts used to determine its jurisdiction to provide equitable relief to JPM-FNMA; denying a fair and full briefing of the federal preemption issue; abusing the latitude of facts allowed from noticed documents in citing Fontenot; its assertion that the notice and election to sell is not a title document1; prejudicing Appellant by allowing judicial notice of a press release from a government website for Respondents but denying notice for a similar press release cited by Appellant; making a fact of the rhetorical question who else would know the details of the default if not the beneficiary?2 after denial of the due process of discovery of that fact3; prejudiced Appellant by labeling as a cause of action his point that no required TILA notification of change of beneficiary interest was evidenced by JPM in order to discard the fact; displayed bias in its finding there was no prejudice to Appellant whose property was subject to the staged bidrigging ploy of Respondents who executed an assignment of one of the conflicting beneficiaries after recording and publication of the NOD that

1AA CT3: Pg18 ln21; Order on MSJ 1AA CT3: Pg31 ln 25: Order on MSJ 3 Reporters Transcript of Proceedings May 23, 2013: Pg 13 ln 22; LSI Title, a subsidiary of Lender Processing Services, Inc (LPS) (whose DOCX subsidiary was closed by a Sanctions Order entered by U.S. Bankruptcy Judge Diane Weiss Sigmund (In re Niles C. Taylor, EDPA, Case 07-15385-sr, Doc. 193). DOCX was a primary source of manufactured documents used in foreclosure cases. According to QLS, LSI was acting as their agent, and signed the NOD as LSI Title.
1 2

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constrains the number of bidders and their high bids as a result of clouded title to the Subject Property. The facts evidence that a special endorsement by the original lender to FHLB-SF has no assignment or endorsement by FHLB-SF indicating a subsequent negotiation and transfer of the beneficiary interest; on the face of the DOT is the indication a FHLBB -approved contract form was offered to Appellant containing language exempting a beneficiary statement request of Civ Code 2943 from preemption in its 25, which was executed in 1988, the year before OTS issued its preemption of the field of lending edict4; multiple documents show conflicting beneficiaries were known to all Respondents when the NOD was published; QLS as the party asserting agency provided insufficient evidence to substantiate a claim of agency; the contract specifies only the Trustee may record the notice; no beneficiary statement was ever produced by FNMA; and the source of the copy of the promissory note, produced after the NOD was recorded, is without foundation and uncertain. Summary of Issues.
1.)

Did the trial court err in failing to determine whether Respondents

have capacity to receive equitable relief from the court as a question of law over jurisdiction of parties? Respondent QLS correctly states the court is without power to make findings of fact. The court is, however, able to make findings of law.

The Fed Home Loan Bank Board was the regulating body of the loan originator when the loan was offered. It came under the management of the Office of Thrift Supervision the following year, when the field of banking edict was introduced.
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Respondents JPM-FNMA present no evidence of capacity for equitable relief Appellants request for statement of decision is to the identity of facts used by the trial court to depict with certainty the dates and amount of money paid or received by Respondents JPM-FNMA for the Subject Loan was evaded by the trial court. Appellant used the phrase factual determination that meant to him point out the facts used from the plethora of facts presented. The record shows no applicable facts available to the trial court that clearly and convincingly depict the dates and amount of money paid or received by any beneficiary in any common business records, and therefore there is no conflict of interpretation of any facts to define a finding of fact objected to by Respondent. Furthermore the issue was raised (repeatedly) as a question of jurisdiction of the court to provide equitable relief to a party demonstrating no damages which, according to Respondents JPM-FNMA, may be raised at any time. The assignment executed to JPM subsequent to the NOD is a nullity This case presents the legal conundrum of the satisfaction of the subject loan by having a notice of default and election to foreclose non-judicially recorded and published, followed by recording an assignment to a subsequent beneficiary. By such election no deficiency can be sought unless the notice is rescinded, which did not occur in this case. Because the charge off balance is forgiven, the debt is fully satisfied regardless of the offset from the auction. Even if the NOD was not void5, what, exactly, was

The recorded beneficiary, FNMA, was the alleged investor / note holder when the NOD, which named JPM as beneficiary, was published.
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assigned to JPM a couple of months later just before the scheduled trustee sale? Without a rescission of the NOD the loan is charged off and the amount is zero because of the anti-deficiency restriction. The security follows the obligation, and a zero balance would nullify the security in this circumstance. Even if the power to rescind was passed to JPM, the loan amount could not be restored since FNMA already charged off the loan on their books. The for value received of the assignment to JPM should be applied to the balance. The decree in an action to foreclose a mortgage concludes the rights of all parties to the action, and the sale under it, consummated by the sheriffs deed, passes, as against them, the entire estate held by the mortgagor [Montgomery v. Middlemiss, 21 Cal 103] A decree foreclosing a mortgage cuts off all rights of such subsequent incumbrancers as are made parties to the foreclosure action [Shores v Scott River Co 21 Cal 135]. This was more elegantly stated under the Coyle Rule [Coyle v. Davis, 20 Wis. 564 (1866)]: a release of the mortgagors personal liability will subordinate or even release the lien of the mortgage as to a subsequent mortgage holder. The points above underscore the question of jurisdiction of the court to consider JPMs standing as a party to this action, especially to the quiet title cause of action, and whether JPM had the authority to substitute QLS as the trustee6. These are all questions of law the trial court could have, but failed

Appellant is aware legal presumptions are generally not regarded in appeals, but could not find California case law that addresses this issue which relates to standing of a party. The presumption is that a judicial foreclosure decree is equivalent to the publication of the intent to sell portion of a NOD.
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to raise, based on Fontenot7. For the reasons above Appellant sought the accounting records of that assignment. Appellant asserts the trial court violated his due process rights by denying that discovery and requests that discovery be re-opened and the unopposed motion to reconsider his motions to compel be adjudicated. It is uncontroverted that Appellant requested a beneficiary statement8 together with a contemporary copy of the promissory note, and that despite numerous responses delaying the request in typical dual tracking modus operandi, none was forthcoming. This is consistent with the fact a special endorsement was made by Valley to Federal Home Loan Bank San Francisco (FHLB-SF), and that no endorsement or assignment was subsequently made by FHLB-SF. This fact was pointed out in Appellants Opposition to MSJ9 among other submitted briefs and remains glaringly unaddressed by Respondents10 and the trial court even though it appears on the (back) face of their noticed documents. For the reasons above Appellants causes of action for quiet title, slander of title, and injunctive relief demonstrate sufficient controverted material facts to prevail as defendant in all Respondents motions for summary judgment.
2.)

Did the trial court err in determining subject matter jurisdiction in a

Fontenot v Wells Fargo Bank NA 198 CalApp4th 256 129 CalRptr 467 Respondents FNMA and JP Morgan did not provide a beneficiary statement that would reflect a beneficiarys accounting instead of a loan servicers accounting. 9 Pltf Opp Mtn MSJ of QLS; Pg4 Ln1 10 RB-JPM-FNMA: Pg 9 the recorded title documents illustrate a clear chain of title: Valley Federal, , transferred all beneficial interest in the DOT to [FNMA] through the 1st assignment
7 8

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summary judgment motion by allowing Respondents new argument in their Reply to their summary judgment motion? So, again, we're back to unfair surprise and elder abuse. Furthermore, Plaintiff should have the right to request a second amended complaint to accommodate the issues found in discovery and this issue of preemption. Preemption was first brought up by Defendants in their opposition to Plaintiff's discovery motions and not even as a fact for an affirmative defense. The Court's decision on that motion opposition -- excuse me -- on that motion/opposition was available when he got home from filing his opposition to this motion. So here we are oral arguments on a tentative ruling on a motion for summary judgment, as the first time Plaintiff has had a chance to plead Defendants' amended preemptive issue. Clearly the tactics being employed demonstrate the importance of a fair presentation by both parties, especially if it heads to the Appellate Courts. The Plaintiff was hoping this Court would be able to distinguish between state's rights for real estate title and payment processing by lenders. [Reporters Transcript May 23, 2013: Pg17 ln 22 et seq]11 There is no reason to follow Respondents lead in beating this dead horse. The language of 25 of the Deed of Trust plainly states on a Federal Home Loan Bank Board (and FNMA) approved form that an exemption exists for Cal Civil Code 2943 beneficiary statements. Since the loan and understanding of parties was executed in 1988, preemption of nonretroactive regulations promulgated the following year under HOLA is precluded. HOLA initially created the Federal Home Loan Bank Board
Appellant as a pro se had 2 days to absorb rejection of motions to compel, introduction of issue of preemption of 2943, and incorporate it into coherent oppositions to summary judgment.
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and granted its director broad authority to regulate the powers and operations of every Federal savings and loan association from its cradle to its corporate grave. Id. at 145 (quoting Cal. v. Coast Fed. Sav. and Loan Assn, 98 F. Supp. 311, 316 (S.D. Cal. 1951)). When Congress amended HOLA in 1989, it transferred this power to the Office of Thrift Supervision (OTS). Dixon v. Wells Fargo Bank, N.A., 798 F. Supp. 2d 336, 353 n.6 (D. Mass. 2011) (citing 12 U.S.C. 1462a) . It is for this reason Appellant was consistent in pointing out his QWR was for a beneficiary statement when Respondents repeatedly attempted to mislead the court by citing case law referencing payoff statement issues (Lopez (2003)) and HOLA. Respondents fail to address the contract language in 25 of the DOT in their argument for preemption in their Answer, MSJ, or Response Brief. Clearly at the meeting of minds at the origination of the contract the issue was waived by the act of supplying the document containing the exemption language to federal preemption as a condition of providing the loan. See Taguinod v. World Sav. Bank, FSB, 755 F. Supp. 2d 1064, 1071-72 (C.D. Cal. 2010) (holding that the plaintiffs claim that their lender failed to perform under the loan contract was not preempted by HOLA). Appellant asserts that 2943(e)(4) is such a law as it relates to a mortgagees right to affect title through the power of foreclosure, and not to any origination disclosure. The cases cited by Respondents are off point as their authorities were based on federal decisions that are not binding to California courts

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(Jelsing)12, or related to loan origination issues not present in this action. When Respondents realized that recent case law was determining the body of federal statutes to be used in preemption was based on the status of the party committing the acts instead of the status of the originator of a loan, they added argument in their Reply to their MSJ to point to the National Bank Act provisions, which are more complementary to state consumer protection laws, instead of HOLA. Should the court determine the status of the parties when the conduct at issue occurred prevails over the status of when the loan originated, as most courts do, it would turn to the terms of the National Bank Act under which JPM-FNMA are chartered. To that Appellant points to Cuomo v. Clearing House Association, L. L. C. (2009), 557 U.S. 519, where the SCOTUS overruled OTS preemption of the entire field to allow state consumer protection laws to be considered. Evidence from the time of the NBAs enactment, this Courts cases, and application of normal construction principles make clear that the NBA does not prohibit ordinary enforcement of state law. Pp. 211. Should this Court disregard the plain language on the face of the contract waiving exemption (DOT 25) and recent reinstatement of 2943 by the state legislature and wish to explore this issue in greater depth, Appellant requests leave to file a supplemental brief to afford a full and fair consideration of the matter and permission to modify his Appeal to join the state Attorney General as an interested party. This court should be mindful,

Federal court decisions regarding property title issues are particularly questionable as a states rights issue.
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though, that alternatively under the Federal Banking Act and recent FrankDodd provisions, the trend is to allow complementary state consumer protections laws that affects lenders only incidentally. The uncontroverted facts are that Appellant requested confirmation of the beneficiarys authority outside of the provisions of 2924 and was mislead by Respondents actions to cease making payments. Dodd-Frank, with its similar provisions of 2943, was passed after Appellant reacted to the lack of conformance. If 2943 is determined to be preempted, Appellant requests leave to amend his complaint to reflect state UCL remedies for deceptive actions, and or corresponding federal provisions.
3.)

Did the trial court err in taking judicial notice of, and accepting as

true, the contents of certain recorded documents? Respondents statements of facts of the chain of beneficiary interest endeavor to mislead the Court by their omission of the fact a special endorsement from the original lender, Valley Federal Savings and Loan (Valley), to Federal Home Loan Bank San Francisco (FHLB-SF), appears on the back of the Promissory Note. This fact was pointed out in Appellants Opposition to MSJ13 and directly contradicts Respondents statement the recorded title documents illustrate a clear chain of title.14. If the Promissory Note on which the endorsement appears is accepted as a material fact, then it follows the special endorsement determines the beneficiary until FHLB-SF endorses it in blank or assigns it

13 14

1AA CT49: Pg358 Ln1; Pltf Opp Mtn MSJ of QLS JPM-FNMA RB: Pg 9; Respondents Opening Brief Obviously the clear chain was to FHLB-SF which precludes assignment to FNMA
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to another party. Since there is no evidence that FHLB-SF took such action, the assignment to FNMA is void as the original lender, Valley, could not assign what it no longer possessed. The California Judiciary made matters worse with its Calvo v. HSBC15 ruling that deed of trust loans dont have to be recorded in order to invoke the election of non-judicial foreclosure, which renders land title records hearsay. Appellant properly objected on the grounds of hearsay and foundation, which the trial court dismissed as arguments that go to the weight or legal significance of the evidence. The hearsay is found on the face of the assignment that stated Valley conveyed beneficial interest to FNMA, as cited by Appellant in Herrera. Foundation was raised as an objection to an assignment document submitted to the court for notice that was so illegible neither Appellants name or loan number could be discerned. Despite this, and the reiteration of the special endorsement to FHLB that invalidated the assignment to FNMA, the trial court decided defendant JP Morgan acquired its beneficial interest in the subject note and deed of trust without benefit of any documents corroborating the assignments, and despite objections and documents showing its impossibility.16 Appellant was denied due process by the trial court of discovery of the business records that might show any unrecorded transfer of beneficiary interest from FHLB-SF back to Valley.

Calvo v. HSBC Bank USA NA (2011), 199 Cal.App.4th 118; 130 Cal. Rptr. 3d 815 16 Special indorsement to FHLB-SF, internal documents from JPM indicating FNMA did not receive promissory note so no copy could be provided to answer QWR
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Appellant presented the fact that JPM is an agent of FNMA17. If a question of material fact remains that 1) JPM acted as an agent for FNMA or 2) usurped the duty of the trustee and violated the plain language of the contract, or 3) committed false filing by not indicating it was acting as an agent (who utilized the alleged agent QLS who utilized their agent) to issue the NOD then the cause of action for slander of title is sustained. That remains an unanswered question of material fact that would void the NOD as a false document, and any question should weigh in Appellants favor as defendant in the motion for summary judgment. At the very least there is a question of material fact that should be weighed in Appellants favor as the defender of a motion for summary judgment which validates Appellants causes of action for slander of title, quiet title, and declaratory relief.
4.)

This case is distinguished from Gomes18 and Calvo by the Deed of

Trust language that overrules the all inclusive language of Civil Code 2924 et seq. and exception to Civ Code 2932.5 as an other encumbrancer. Civil code 2924 et seq. neither authorizes nor prohibits the borrower to challenge the legitimacy of the beneficiary who elects to initiate a nonjudicial foreclosure. Unlike Jenkins19, the contract language both authorizes and obligates the borrower to question the authority of a beneficiary who
Reporters Transcript of Proceedings May 23, 2013: Pg13 ln 18 No evidence was presented to support a claim that JPM was an agent of FHLB-SF, but it is possible that the claim that JPM was agent of the beneficiary is accurate. 18 Gomes v. Countrywide Home Loans, Inc. (2011) 192 Cal.App.4th 1149 (Gomes) 19 Jenkins v. JP Morgan Chase Bank, N.A., (2013) Cal App 4th (G046121)
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attempts to slander the clear title to the Subject Property. Respondents cite no legal basis why the contract language should not supersede noncompulsory statute provisions. The rationale of Calvo was based on the Stockwell view that the ability to record the beneficiary chain of interest for deed of trust loans is unnecessary because the trustee is recorded in the land records as holding the (conditional) title, and only they have the power of sale. Yet the trustee of record was not the party who recorded the NOD. That trustee is clueless, literally, as to the beneficiary(s) and agents involved. By a twist of language construction in statutes covering mortgages and deeds of trust as similar but separate, trial courts applied attributes of mortgages to deed of trust loans, allowing agents of a beneficiary (which makes sense for mortgages) to conduct deed of trust loan foreclosures in contradiction to Stockwell. So yet another stranger claiming beneficiary interest came along and presented a foreclosure referral20 which the agent pursued, even though it showed a conflict of beneficiaries21. After the notice of default and election to sell was recorded by the agent, an employee of the agent executed an assignment from one conflicting beneficiary to the other, a copy of the promissory note appears, and the agent was substituted in as trustee to conduct the auction. The single tool the all inclusive 2924 provides to

Likely the referral comes from a computer terminal accessing several databases serving thousands of clients who have authority to add, delete, or edit records used to create the referral, aka, Lender Processing Services, Inc 21 1AA CT 48: Pg 346 et seq; QLS confessed they consulted with both conflicting beneficiaries before proceeding
20

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guarantee that a finality between parties of a regularly conducted process has occurred is found in 2924j(a)(4) in the event of a surplus, proof that the person holds the beneficial interest may include the original promissory note and assignment of beneficial interests related thereto. The impartiality of the trustee envisioned by Stockwell is hardly a bastion of forthrightness in this case, and illuminates the question of the correctness of the Calvo decision that deed of trust loan assignments need not be recorded before the assignee may foreclose non-judicially if agents of the beneficiary are allowed to usurp the role of trustee in deed of trust foreclosures.
5.)

Did the trial court err in its ruling that there is no genuine dispute

whether the Notice of Default (NOD) is void? Respondent JPM-FNMA states Appellant did not argue that this supposed defect voided the nod in the trial court22. The point was raised by Appellant in his Opposition to MSJ23 and in oral argument that language required by the contract was missing, which might represent a cause of action for breach of contract that was not presented as such in the FAC. Appellant would request leave of the court to amend his complaint to include this issue as deceptive practices under the UCL, given a showing of prejudice, should the case be remanded to the trial court. Appellant points out the error of the trial court depicting JPM as being the deed of trust beneficiary of record at the time a trustees sale guaranty was executed simultaneously with the recording of the NOD24, two months

RB-JPM-FNMA: Pg 20 1AA CT 49: Pg 357 ln 27; Opposition to QLS MSJ 24 1AA: Pg 17 ln 2; Order on MSJ for JPM-FNMA
22 23

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before the assignment to JPM was executed by the investor depicted in the guarantee (FNMA), who was the holder of record (FNMA), and depicted as investor (FNMA) in the foreclosure referral to QLS. The trial courts statement25 that Second, it is a reasonable inference from the fact of recordation itself that the defendant QLS acted with the authority of the beneficiary at the time : from whom else would QLS have received the deed of trust information, the dollar amount of the default, etc which is a direct contraction of the Appellate Court in Herrerra, and was based on the faulty premise that QLS was an agent of anyone, given the results of (dis-)allowed discovery. Respondents JPM-FNMA failed to address the plain language in the DOT stating the Trustee must record the notice of default in a paragraph that specifically states when either the beneficiary, or trustee, or both, may perform certain functions. The language of the contract does not conflict with the language of the statute; it removes the choice presented by the statute by agreement of the parties to the contract, which is therefore binding. Likely the contract language is influenced by FHLBB legal opinion that the NOD is a title-affecting document that should not be subject to the prejudice of an agent of the beneficiary. Appellant referenced two documents confirming that on the date the NOD was issued conflicting beneficiaries claimed interest in the Subject Loan. Rather than correcting the conflict before proceeding, QLS proceeded to record the NOD as it had done so many times in the past. Why

25

1AA: Pg 18 ln 27; Order on MSJ for JPM-FNMA

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would Respondents do that instead of taking just a couple more days to effect the subsequent assignment and substitution? Appellant would proffer the following motive for the sloppy paperwork the trial court condones by an agent of the beneficiary. A member of the public in search of investment property might look at the NOD and take note of the beneficiary. Upon due diligence, and being unaware of the recent Calvo ruling that assignments of deed of trust loans dont need to be recorded, he discovers the beneficiary recorded with the county is not the party named in the NOD. To a prudent man this would indicate a clouded title affecting the full estate to the property, and would likely disqualify the property from consideration, or at least reduce the bid price. This is the classic definition of bid-rigging, a violation of Civ. Code 2924h(g) and Penal Code 115.5. This was presented to the trial court26 by Appellant fulfilling his duty to report a crime to a proper authority as possible felonious criminal activity. Appellant presented the court with 7 additional instances of properties sold by QLS at trustee sales that exhibited the same pattern of conflicting beneficiaries at the publication of notices of default, representing $665,000 of potential fines27. Appellant would have the Court note the confession in the form of supplemental discovery28 presented by QLS that it had informed all

Reporters Transcript of Proceedings, May 23, 2013: Pg19 ln 26 et seq; the trial court cut off Appellants argument as he attempted to show prejudice by the effects of bid-rigging as a result of conflicting beneficiaries when NOD is recorded 27 [AA: Pg 81 CT8] Pltf Objection to Decl of Non-Monetary Status; Exh Q4 Q10 28 [AA: Pg 346 CT48] Pltf Declaration Opposition MSJ
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Respondents of the conflict and had their permission to proceed to file the NOD, instead of resolving the conflict in beneficiaries before filing the NOD. It is well settled law that parties are not due equitable relief from a court as a result of criminal activity, which rises above an irregularity that makes the NOD void, and not voidable. Appellant requests leave to amend his complaint to add an appropriate cause of action against all parties for violation of the CA UCL and RICOH provisions.
6.)

Did the trial court err in ruling that QLS was an agent of the

beneficiary and could act as such to pass agency to yet another party to file the NOD? Respondent JPM-FNMA proposes the trial courts absurd argument that an agent (QLS) can authorize themselves as such merely by having a document recorded (NOD) that is not signed by the alleged principal29 to the agency, but rather, by an alleged agent (LSI Title) of QLS. That, apparently, is the sole conduct defining a material fact establishing QLS was an agent (or principal) of any other party. There is no question that FNMA was the recorded investor / beneficiary when the NOD was recorded since the execution date of the alleged assignment to JPM from FNMA was many weeks later. So defining QLS being an agent of JPM by its illegal actions is just plain legal nonsense. Failure by the trial court to improperly consider Appellants point as defendant in a MSJ that FNMA

29

(the beneficiary JPM? FNMA? FHLB-SF?)

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was more likely30 the beneficiary when the NOD was recorded, and as in the Dimock31 case, a wrong beneficiary (or in this case their agent) declaring default is grounds to void the NOD and is basis for the slander of title cause of action. There is no corroborating document such as a Power of Attorney signed by JPM naming QLS in any capacity (except possibly trustee) in either submitted appendix, but there is a copy of a Power of Attorney by FNMA naming JPM. Respondents make no direct reference to any document naming QLS and any other entity with a power of attorney and or any affidavit under penalty of perjury, with supporting documentation, that it was acting under the authority of any party. It is not up to Appellant to prove a negative assertion; it is well settled law that a party claiming agency must prove its claim. Without evidential substantiation the claim of agency of QLS to any party remains a question of material fact that should weigh in favor of Appellant as defender in the motion for summary judgment in the causes of action of slander of title, quiet title, and declarative relief.
7.)

Does substantial evidence contradict the trial courts ruling that the

original promissory note was presented at Appellants deposition as a permissible lay opinion over Appellants objection? The facts show that the requested copy of the note was unavailable in paper format in JPM-FNMA correspondence Appellant on June 9, 2010,

30 31

Special endorsement to FHLB-SF is controlling factor Dimock v. EMERALD PROPERTIES, 97 Cal. Rptr. 2d 255, 81 Cal. App. 4th 868
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the NOD was recorded 6 days later, and correspondence from JPM-FNMA on June 23, 2010 did not include a copy of the note32. Either JPM-FNMA was intentionally withholding the document and lying about its possession, or it didnt exist in paper format when the NOD was recorded. As the trial court ruled that possession of the document is proof of beneficiary interest, conversely, the inability to provide a copy of the document is proof of lack of beneficiary interest. So the question before this court is whether criminal intent was present, or criminal activity was present, and either deny Respondents equitable relief from this court on the basis of unclean hands. Despite the fact the trial court was shown no foundation of the existence of the promissory note except the words of self-serving attorneys, and there is no explanation how a document not available in paper format can magically manifest just in time for a trustee sale, the trial court denied compulsion of the records of the vault custodians showing the physical movement of the original promissory note. This was sanctified by taking words out of context from Appellant to substantiate the claim the original promissory note was presented to Appellant, which was raised in objection by Appellant under Cal Evidence Code 356. An excellent example of the deceit used in the deposition is shown on [1AA CT 14: Pg 188] where the word original does not appear anywhere in the introduction of documents, yet Respondents claim the original note was presented to Appellant in their pleadings. As the defendant in a summary judgment Appellant was denied by the

32

1RA Pg 116, 118

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trial court the concession if a question of material fact remains as a result of contradictory evidence. This was exacerbated by denying discovery of further definitive evidence by the trial court despite these glaring anomalies.
8.)

Does substantial evidence contradict the trial courts finding that

Appellant attested to his signature? This is a sub point of Issue #7 and Appellant apologizes for running out of steam and not cleaning it up in his opening brief. Appellant is not a legal professional and was given 2 days to prepare responses to 2 motions for summary judgment without benefit of a preview from the court of the ruling on his motions to compel discovery.
9.)

Was Appellant denied due process by the trial court relinquishing

decisions on motions to compel discovery to a discovery facilitator? Appellant would point out that the trial court docket shows the motion for reconsideration was unopposed by Respondents, and Appellant requests a writ of mandate regarding restoring the dismissed motion for the (unopposed) reconsideration of Appellants motions to compel further evidence. Appellant did not re-litigate his motion to compel further responses in the opening brief due to obvious limitations on lengths of pleadings. His alternative of including the reconsideration motion in the appendix as a properly served pleading this court can notice violates no rules, and conserves resources.
10.)

[Did] The Court erred in its decision regarding Plaintiffs objection

to judicially noticed documents of Defendants?

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The trial court overruled Appellants objection that cited Herrerra as to the truth of the contents of a recorded assignment on the basis of foundation and hearsay, and the effect of the special endorsement on the promissory note is the reason the Herrerra court has it right, and not Fontenont as cited by the trial court.
11.)

[Did] The Court erred in its decision that a single beneficiary was

properly identified? Respondent QLS attempts to mislead the Court with their statement33 There are exceptions to the tender rule; however, Perry did not plead any facts in his First Amended Complaint that would render any of the exceptions applicable in the present case. Yet the FAC stated34 JPMorgan is depicted as the beneficiary on the Notice of Default, yet the assignment from FNMA to JPMorgan was not effective until August 25, 2010 and was filed August 30, 2010. This is a violation of Penal Code 115.5, false filing of a real property title instrument. Any document used to further an illegal act is void. The legal solution to correct this act was not undertaken by Defendants. It was for this reason, among others, that the trial court requested supplemental briefs on the issue of tender and found tender was not necessary under at least 2 of the exceptions cited in Lona. QLS is silent, as well as the trial court, on why and how an alleged beneficiary would execute an assignment to itself. Put another way, if JPM was the beneficiary when the NOD was filed, FNMA could not assign what it did not possess to JPM several weeks later.
33 34

QLS RB: Pg 12; Brief of Respondent 1AA CT7: Pg62 ln7; FAC
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Respondent JPM-FNMA points out Appellants appendix is missing the page from the sale guaranty depicting FNMA as a title exception as the beneficiary of record when the warranty was executed. The pages were inadvertently left out by Appellant in his haste to answer 2 motions of summary judgment in 2 days that had originally been scheduled weeks apart but were combined by the trial courts own motion. However it is a moot point since Respondent JPM-FNMAs statement of facts state that the assignment from FNMA to JPM was executed after the date the guaranty was executed, and the trial court was well aware of it Thus it is undisputed that the notice of default was recorded by JP Morgan and QLS more than two months before an assignment to JP Morgan was effected (August 25, 2010), and more than three months before QLS was appointed as the foreclosure trustee (September 15, 2010). Defendants have failed to make a persuasive argument why a deed of trust [sic] recorded by persons with no interest in the subject property should not be deemed void [citations] [1RA JPM-FNMA: Pg 233] The trial courts later decision for summary judgment stating QLS was conferred agency status because it was filing on behalf of the beneficiary (JPM) for a void action confounds Appellant. The contorted reasoning by the trial court that its not an irregular procedure because assignments dont have to be recorded is exactly the reason Stockwell got it wrong. The control of the power of the trustee to convey the title is held by the beneficiary in the ability to substitute the trustee. Unrecorded assignments make it impossible for a trustee to confirm the power of a (pretender) beneficiary to substitute them and make it impossible for a borrower to give credibility to non-judicial notices as a question of title.
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Appellant would offer this is a sufficient question of material fact that should weigh in Appellants favor as defender in a summary judgment motion and renders his slander of title and quiet title causes of action valid.
12.)

The Court erred in its decision to consider the Fourth cause of action

in light of the First, Second, and Third causes of action. If this court rules that preemption of 2943 was waived by presenting the form for the loan agreement by Respondents when the loan originated, as found on the face of the document, then 2943 allows for damages to Appellant. It is unquestioned that Appellant ceased making payments in order not to affirm an illegitimate obligation35. If the foreclosure is ruled to be lawful, then the damages to Appellant as a result become a claim under 2943. If the foreclosure is ruled to be unlawful, then the damages to Appellant are still a claim under 2943.
13.)

Did the trial court deny Appellant due process by allowing new

significant argument regarding diversity jurisdiction of the court in a reply to a summary judgment motion? This is a duplication of issue #2 and Appellant apologizes for running out of steam and not cleaning it up in his opening brief. Appellant is not a legal professional and was given 2 days to prepare responses to 2 motions for summary judgment without benefit of a preview from the court of the ruling on his motions to compel discovery.
14.)

Plaintiff requested Defendants to produce and identify the common

business documents showing their vault custodians either transferred the

35

1AA CT57: Pg 403; Order after Hearing March 1, 2012

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original promissory note to a subsequent beneficiary, or received the original promissory note, or sent or received bailee letters in its stead. This is a sub-point of issue #9 and Appellant apologizes for running out of steam and not cleaning it up in his opening brief.
15.)

Post- Appeal Considerations

The following events have occurred since the filing of Appellants Opening Brief which bears directly on this appeal and was not presented to the trial court. Third party payments elevate the question of whether a default was present or cured on the Subject Loan Kamala Harris, Attorney General of California, recently clawed back $300M from JP Morgan stating This settlement returns the money to Californias pension funds that JP Morgan wrongfully took from them.36 Justices from the Appellate courts were thus the recipients of that largesse. But does not that largess represent third party payments to the loans comprising the trusts, as the pension funds were the recipients of the cash flow from mortgage payments? That being the case, did the borrowers of those loans receive credit for those payments? Since Ms. Harris made no attempt to identify the loans in question, and the trial court circumvented such disclosure, can this Court categorically state that Appellants loan was not among them? The Calvo v. HSBC case law has rendered the Land Recording Act neutralized for deed of trust loans, so the answer is no longer to be found there. For all anyone knows, Appellants default was cured by a portion of

36

RJN Exh F: Press release from Office of Atty Genl for CA

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that $300M. Now that California justices got theirs at (possibly) Appellants and other homeowners expense, Appellant requests they share their bounty by granting Appellant leave to amend his complaint to more properly present the facts regarding all payments, including third party, made to the beneficiary should this case be remanded to the trial court with the direction to re-open discovery. A similar case explaining the protection of title and UCC considerations from New Mexico Supreme Court Appellant refers to a slip opinion of the NM Supreme Court37 in his supplemental RJN that is very much on point with the elements of law presented in the instant case of alienation of title. The California Supreme Court denied review of the motion to depublish the Glaski decision Appellant would point out the docket entry for the CA Supreme Ct. of February 26, 2014, stating Depublication request denied (case closed) Case # S213814 re: Glaski v. Bank of America38. Appellant raised the issue of recording the assignment of the subject loan to FNMA years after origination when there was a pool # 066627 clearly printed on the assignment. On the schedule of loans attached to the assignment was the Subject loan, with an identifying number that matches the hand-written number on the bottom of the copy of the promissory note, indicating the intention to subject the note to securitization Although the execution date on the assignment was back-dated to close to the origination date, the statute in effect stated the effective date was operative as of the recording

37 38

RJN Exh E: Slip Opinion of NM Supreme Court Glaski v. Bank of America (5th Dist. Ct. App. No. F064556)
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date years later. These elements of the Glaski case were present in the instant case. Glaski was not raised in Appellants Opening Brief because the trial court denied the authority of the Glaski decision in tentative rulings at the time the brief was filed. Facts supporting Glaski were presented in Appellants opposition to MSJ (QLS)39 and in the FAC40. Should this case be remanded to the trial court, Appellant requests leave to amend his complaint to incorporate Glaski and the authority of the CA Supreme Courts denial of depublication SUMMARY Just as the trial court erroneously presumed that the ability to produce a copy of the note was evidence of its possession, the converse is equally true the failure to produce a copy of the promissory note and beneficiary statement under 2943, which should show third party payments unknown to the servicer, is evident of a lack of beneficiary interest and amount owing. Appellant was justified to cease making payments in order not to affirm an illegitimate debt. This is consistent with the language of the contract that the borrower shall pass clear title to the trustee and then defend that title to the property. In order to do so language in the DOT allows for legal action to defend said title, and required language to that effect in the NOD. The actions of JPM-FNMA are typical of the dual tracking modus operandi referenced in the several national agreements and recent CA Homeowner Bill of Rights Act, and clearly demonstrate a willful intent to

39 40

1AA CT20: Pg 294; Oppn MSJ of QLS by Pltf Stmt Undisputed Facts 1AA CT7: Pg 63 42 44; FAC
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mislead Appellant into defaulting on his loan instead of pursuing a reverse mortgage. Whether Federal law preempts the language of the contract and Civ. Code 2943 or not, the underlying criminality is the same; the issue becomes whether Appellant should be allowed to amend his complaint to point to federal statues (that did not provide for protection of clear title at the time) and / or other state statutes, and whether the trial court should be mandated to re-open discovery. No court should reward a party for criminal acts. Respondents claim that deceiving Appellant into making payments to the wrong party for over 20 years is not prejudicial because it is preempted from defense by federal law is a sad reflection of the legal landscape recently carved out by the California judiciary. The California courts have blessed 10s of thousands of foreclosures with potential clouded titles for the sake of expediency over finality between parties due to a 1908 decision that this arrangement is in todays best public interest. A trustee cant determine if the beneficiary declaring a default is legitimate, or that the beneficiarys agent that substituted them as trustee was authorized to do so; and the title companies dont know about unrecorded assignments. So how is a member of the public supposed to determine the legitimacy of the title they are considering bidding on at a trustees sale auction rigged to the sellers benefit?

DATED: March 3, 2014

Respectfully submitted,

__________________________ Leighton Lee Perry, Appellant

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