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NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________

No. 13-2220
___________

IN RE: NEW CENTURY TRS HOLDINGS, INC, et al.,
Debtors

ANITA B. CARR,
Appellant

v.

NEW CENTURY TRS HOLDINGS, INC, A DELAWARE CORPORATION;
NEW CENTURY LIQUIDATING TRUST
____________________________________

On Appeal from the United States District Court
for the District of Delaware
(D.C. Civil Action No. 1:12-00288 )
District Judge: Honorable Sue L. Robinson
____________________________________

Submitted Pursuant to Third Circuit LAR 34.1(a)
November 7, 2013

Before: FUENTES, GREENBERG and VAN ANTWERPEN, Circuit Judges

(Opinion filed: November 7, 2013)
___________

OPINION
___________

PER CURIAM
Appellant Anita B. Carr appeals pro se from orders of the United States District
Court for the District of Delaware, which dismissed her appeal from the Bankruptcy
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Court and denied her motion for reconsideration and petition for a writ of mandamus.
We will affirm.
I.
In October 2009 Carr commenced an adversary proceeding in the United States
Bankruptcy Court for the District of Delaware against New Century TRS Holdings, Inc.
("TRS Holdings") and its affiliates (collectively, the Debtors), asserting several claims
1

arising out of a 2006 loan transaction between Carr and Home 123 Corporation, an
affiliated debtor. In addition to the adversary proceeding, Carr filed a proof of claim
against the Debtors seeking damages for, among other things, alleged mortgage fraud and
alleged violations of the Truth-in-Lending Act.
In October 2010 Carr and the Debtors entered into a settlement agreement where
the Debtors paid a sum of $60,000 in full and final satisfaction of the causes of action
and any other claim(s) that [Carr] may have against the Debtors . . . . The settlement
agreement provided that Carr released the Debtors from any and all claims, damages,
actions, suits, causes of action, rights, liens, demands, obligations and/or liabilities. It
further provided that, should a dispute arise between the parties after the execution of the
settlement agreement, the Parties consent and subject themselves to the jurisdiction of
this United States Bankruptcy Court, District of Delaware . . . to resolve such dispute(s).
In November 2010 Carr filed a notice of dismissal with prejudice, and the Bankruptcy
Court closed the adversary proceeding. Subsequently, though, Carr sought to stay the

1
Carr asserted claims for: (1) fraudulent conveyance; (2) violation of chapter 11 of the Bankruptcy Code; (3)
fraudulent misrepresentation and negligence; (4) violation of the Truth-in-Lending Act, 15 U.S.C. 1601 et seq.; (5)
violation of Cal. Bus. & Prof. Code
17200, et seq.; (6) violation of the Real Estate Settlement Procedures Act, 12 U.S.C. 2605; and (7) quiet title to
real property.
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dismissal and to schedule an evidentiary hearing, asserting that she was fraudulently
induced to enter into the settlement agreement. The Bankruptcy Court rejected Carrs
fraud claim, and Carr timely appealed to the District Court.
In March 2013 the District Court entered an order affirming the Bankruptcy
Courts decision. In April 2013 the District Court entered an order denying Carrs
motion for reconsideration and her petition for a writ of mandamus, which sought to
compel the Bankruptcy Court to preserve evidence in this case. Carr timely appealed.
II.
We have appellate jurisdiction pursuant to 28 U.S.C. 158(d)(1). On an appeal
from a bankruptcy case, our review duplicates that of the district court and view[s] the
bankruptcy court decision unfettered by the district courts determination. In re Orton,
687 F.3d 612, 614-15 (3d Cir. 2012) (internal quotation and citation omitted).
III.
Carr argues that (1) the Bankruptcy Court did not have statutory or constitutional
authority to adjudicate her fraudulent inducement to settle claim; (2) the Bankruptcys
Courts order granting creditors relief from the automatic stay to adjudicate the Debtors
interest in real property was contrary to law; (3) her due process rights were violated; (4)
she was entitled to a writ of mandamus; and (5) the District Court should have considered
the bankruptcy plan prior to dismissing the appeal.
Regarding the statutory and constitutional jurisdictional issues, Carr did not
dispute that the Bankruptcy Court had authority to adjudicate the underlying adversary
proceeding and to approve the settlement of her claims. Instead, Carr asserted only that
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her later raised claim of fraudulent inducement to settle was not a core proceeding and
that, pursuant to the Supreme Courts decision in Stern v. Marshall, 131 S. Ct. 2594
(2011), only an Article III court had constitutional jurisdiction to adjudicate the claim.
Regarding the statutory assertion, federal bankruptcy courts have statutory
authority to enter final decisions in all core proceedings. See 28 U.S.C. 157(b). In
this matter, Carr filed both a proof of claim and an adversary proceeding against the
Debtors estate. The settlement of these claims clearly constitutes a core proceeding, and
the Bankruptcy Courts resolution of any disputes over the settlement are also clearly
core proceedings related to the underlying settlement. See id. at 157(b)(2)(B) (Core
proceedings include . . . allowance or disallowance of claims against the estate . . . .). In
addition, the Supreme Court has noted that a creditor could consent to the bankruptcy
courts exercise of statutory authority to resolve a claim, and it is clear that Carr, in the
settlement agreement, did give such consent. See Stern, 131 S. Ct. at 2608.
As to constitutional jurisdiction, Stern does not support Carrs contention.
2
Stern
involved a state-law counterclaim asserted by the debtor that was not related to the
creditors claims against the estate or the underlying bankruptcy in any way. In that case,

2
Stern involved the bankruptcy estate of Vickie Lynn Marshall (also known as Anna Nicole Smith). Vickie was
involved in a dispute with E. Pierce Marshall, who was the son of Vickie's husband, J. Howard Marshall II. Prior to
J. Howards death, Vickie filed an action against Pierce in Texas asserting that Pierce had fraudulently induced J.
Howard to sign a living trust that did not include her. After J. Howard's death, Vickie filed a petition for
bankruptcy, and Pierce filed an adversary complaint against Vickies estate alleging defamation. Vickie filed a
counterclaim against Pierce in which she made the same allegations that she had previously filed in Texas (which
ruled in Pierces favor). The bankruptcy court ruled in Vickies favor, and the case eventually reached the Supreme
Court. The Supreme Court held that, while the bankruptcy court had statutory authority to adjudicate the state law
counterclaim under 28 U.S.C. 157(b)(2)(C), the bankruptcy court was nevertheless without constitutional authority
to enter such a judgment under Article III. The Court found that Vickie's claim was a state law action independent
of the federal bankruptcy law and not necessarily resolvable by a ruling on [Pierce's] proof of claim in bankruptcy.
Stern, 131 S. Ct. at 2611. Accordingly, the Supreme Court held that only an Article III court could enter final
judgment.
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the Supreme Court held that the judicial power of the United States may only be invested
in Article III courts and that, in that one isolated respect, the authority granted by
Congress to the bankruptcy courts exceeded the limitations of Article III. Id. at 2620. In
this matter, Carrs claims were not unrelated counterclaims asserted by a debtor, but
were, rather, direct claims by a creditor that the Debtors fraudulently induced her to enter
into a settlement agreement concerning indisputably core proceedings within the
jurisdiction of the Bankruptcy Court. See 28 U.S.C. 157(b)(2)(B). Thus, Carrs claim
of fraud is not independent of the bankruptcy but rather irreversibly intertwined with the
Bankruptcy Court-approved resolution of Carrs underlying claims against the
bankruptcy estate, rendering Stern inapposite.
3
Neither the Supreme Court nor we have
held that a claim such as Carrs is outside the jurisdiction of the bankruptcy courts to
adjudicate. Cf. Travelers Indem. Co. v. Bailey, 557 U.S. 137, 151 (2009) (bankruptcy
courts have jurisdiction to interpret and enforce their own orders); In re Lazy Days' RV
Ctr. Inc., 724 F.3d 418, 423-24 (3d Cir. 2013) (holding that the bankruptcy court had
jurisdiction to resolve a dispute over whether, in light of 11 U.S.C. 365(f)(3), an anti-
assignment clause survived a settlement agreement it had confirmed as part of the
bankruptcy). We conclude that the Bankruptcy Court had the constitutional authority to
adjudicate Carrs fraudulent inducement to settle claim.
4


3
In her brief in support of her appeal, Carr also referenced, without explanation, N. Pipeline Const. Co. v. Marathon
Pipe Line Co., 458 U.S. 50 (1982), in support of her constitutional claim. As Marathon, a precursor to Stern, also
concerned a state-law claim unrelated to the underlying bankruptcy, it is inapposite to this matter.
4
We also find that the Bankruptcy Court properly adjudicated Carrs fraudulent inducement to settle claim, as Carr
did not assert any evidence concerning fraud in relation to the settlement, but rather merely asserted facts that
bolstered the underlying, settled claims. Accordingly, Carr did not satisfy her burden to show that she entered into
the settlement agreement as a result of fraud.
Case: 13-2220 Document: 003111446077 Page: 5 Date Filed: 11/07/2013

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Carr has also appealed on the grounds that the District Court incorrectly upheld
the Bankruptcy Courts clarification of an order it issued in 2008 providing global relief
from the automatic stay.
5
After review of both the 2008 order and the 2011 clarification,
we conclude that the Bankruptcy Court did not abuse its discretion when it clarified its
2008 order to explain that it did not lift the automatic stay for monetary claims against the
Debtors. See In re Shenango Grp. Inc., 501 F.3d 338, 346 (3d Cir. 2007) (bankruptcy
courts interpretation of its own order is reviewed for abuse of discretion).
Carrs additional arguments are without merit. It is clear that Carrs due process
rights were not violated, as the Bankruptcy Court entered proper final orders on Carrs
claims, did not prevent Carr from obtaining discovery in the adversary proceeding (which
was settled prior to discovery being completed), and properly considered all filings
concerning Carrs claims. Carrs further due process claims are equally without merit.
Carrs additional assertion that the District Court erred in not considering that fraud and
fraudulent inducement to settle is inconsistent with the bankruptcy code and not in the
approved bankruptcy plan is also without merit. The District Court properly reviewed
the record on appeal and rejected Carrs claims, and nothing in the Bankruptcy Code nor
the approved plan is inconsistent with the District Court or the Bankruptcy Courts
decisions.

5
Carr misconstrued the 2008 order as a general lifting of the stay that applied to the state court litigation she was
engaged in at the time of the bankruptcy. Carr contended that the Debtors misled her by asserting stay protection in
the state court litigation when, according to her reading of the 2008 order, the stay had been lifted. She further
claimed that the Bankruptcy Court violated the law in reinterpreting the 2008 order to only have lifted the stay for
actions against the Debtors interest in real property. We do not agree with Carrs interpretation of the 2008 order.
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Finally, the District Court properly denied Carrs petition for a writ of mandamus
and her motion for reconsideration. Mandamus is a drastic remedy available in only the
most extraordinary circumstances, and Carr has not demonstrated that her right to the writ
is clear and indisputable. See Cheney v. United States Dist. Court, 542 U.S. 367, 380
(2004); In re Diet Drugs Prods. Liab. Litig., 418 F.3d 372, 378 (3d Cir. 2005). The
District Court properly denied Carrs motion for reconsideration because it did not meet
the requirements under Federal Rule of Civil Procedure 59(e) or, if construed as a motion
for relief from judgment due to mistake, under Federal Rule of Civil Procedure 60(b). See
Lazaridis v. Wehmer, 591 F.3d 666, 669 (3d Cir. 2010).
6


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The District Court held that the Bankruptcy Court properly denied Carrs two motions for reconsideration filed in
that case on the grounds that they introduced no new grounds for relief and merely sought an adjudication on the
merits of the underlying adversary claims which had been settled. We agree.
Case: 13-2220 Document: 003111446077 Page: 7 Date Filed: 11/07/2013
INFORMAL APPELLANT REPLY BRIEF
1

IN THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

Case No.13-2220


In re:
NEW CENTURY TRS HOLDINGS, INC.,
A Delaware Corporation, et al., Jointly Administered

Debtors.
________________________________________________

ANITA B. CARR,
Appellant,

v.

ALAN M. JACOBS, as liquidating trustee of the New Century Liquidating Trust,

Appellee,



APPELLANTS INFORMAL REPLY BRIEF BY ANITA B. CARR

-------------------------------------------------------
Appeal of Orders of the United States District Court
for the District of Delaware
Case No. 12-00288 SLR
and the
Appeal Of Orders Of The United States Bankruptcy
Court for the District of Delaware
Case No. 07-10416 KJC and AP 09-52251 KJC
------------------------------------------------------


Anita B. Carr
11801 Bloomington Way
Dublin, California
Telephone: (925-353-2787)
Fax: (888-703-8165)
Email: ab-carr@att.net

Appellant in Pro Per
INFORMAL APPELLANT REPLY BRIEF
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STATEMENT OF APPEALABILITY
The courts of appeal have jurisdiction over appeals from all final decisions
of the district courts of the United States. See 28 U.S.C. 1291.

This is an Informal Reply Brief by Appellant Carr.
INTRODUCTION
At all times herein Appellant Carr resides on her property in California at
11801 Bloomington Way in Dublin, CA 94568. The property description is
All that certain real property situate in the County of Alameda, State of
California, described as follows:
(City of Dublin) Lot7, Block C, Tract 4668, filed April 23, 1981, in Book
126 of Maps, page 88, Alameda County Records. Assessors Parcel Number
941-2757-064.
This appeal deals with Appellant Carrs real property and involves a state
law claim.
The Appellees continue to argue incorrect theories based upon fraud and
deceit.
This Court, with all due respect, is required to consider, and not set aside,
the underlying fraud and deceit which is the continued basis for the Appellees
arguments. The Appellee has unclean hands.
One cannot merely dismiss, as the District Court found, because the
nature of her fraud claims were well-known to appellant at the time she signed
the settlement agreement, there is no bases for a claim of fraudulent
inducement to settle, when in fact the Appellees assured Appellant Carr
(Carr) in the letter dated August 17, 2010, that It does not appear that Mr.
Nagys signature is forged.
INFORMAL APPELLANT REPLY BRIEF
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I will, affirm once again, that the Affidavit from the Home123 Corporation
employee-notary Andres Rojas about his notary journal entry, was not
obtained until June of 2011. Andres Rojas was not located by Carr until late
November of 2010, after the settlement.
The Appellees are misrepresenting to each court what is the evidence and
what did Carr know prior to the settlement. The courts are mistaken.
Perhaps the new case law below will now offer clarity in this matter. No
matter how much Appellees counsels argue that they believe the assignment,
executed by the Home123 Corporation employee Steve Nagy in May of 2007
to U.S. Bank N.A. is valid, it is VOID and of no effect. The Appellee and
counsels continue on their quest of deceit and fraud and have unclean hands.
The Appellee and counsels pretend as if they have done Carr acts of
kindness by not opposing her requests for extensions to file pleadings, when
the fact of the matter is that Carr is permanently disabled with a cognitive
impairment and she provides medical excuses from her MD every single time
she motions the court for an extension.
Instead of the Appellee and counsels trying to resolve this matter decently,
so that Carr has peace in her life with her property restored to her name in
title, they continue to cover-up the deceit and fraud and run-up their billable
hours.
Due to the complexities of the securitization scheme, many experts and
attorneys are still uncovering the deceit and fraud. In fact the FHFA filed a
suit in late 2011 against 18 (now 17) large banking entities over securitization
& underwriting practices and it involves the debtors Home123 Corporation
and New Century Mortgage Corporation. Subpoenas were issued against the
INFORMAL APPELLANT REPLY BRIEF
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debtors in the spring of 2013. The FHFA is suing on behalf of the GSEs such
as Freddie Mac and Fannie Mae---for fraud!
As to the hearsay claim that the Carr loan was sold to Chase in February of
2006, there has been not one scintilla of evidence entered in this matter that
proves that. In fact, to the contrary when Home123 Corporation executes as
assignment of both the deed and the note in May of 2007, several months
AFTER Home123 Corporation declared a Chapter 11 bankruptcy and over 13
months after the JPMAC2006-NC trust closing date of 4-1-2006.
It is prayed by Appellant that this honorable appeal court put a stop to the
deceit and fraud and not condone its continuance. Carrs real property in the
state of California is central to this entire matter. Deceit and fraud in this
matter are criminal and violate California penal codes.
Will this honorable court determine deceit, fraud and fraudulent
inducement is OK? Or will this court allow Carr her due process rights and
allow her to adjudicate the matter in an Article III court?
I. NEW CASE LAW
On August 8, 2013 the Fifth Appellate District in the Court of Appeal of
the State of California ordered the Thomas A. Glaski vs Bank of America, NA
et al decision published, stating:
As the non-published opinion filed on July 31, 2013, in the above
entitled matter hereby meets the standards for publication specified in the
California Rules of Court, rule 8.1105(c), it is ordered that the opinion be
certified for publication in the Official Reports.
See Thomas A. Glaski vs Bank of America, NA In the Court of Appeal
State of California case no. F064556 (Superior Ct. Case No. 09CECG03601).
Appendix A.
INFORMAL APPELLANT REPLY BRIEF
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This decision supports what Appellant Carr (Carr) has been stating in her
pleadings in the Delaware bankruptcy court; in the USDC in Delaware and in
Appellants Opening Brief in this Court- that the Assignment is VOID and not
voidable.
In early 2006 the J.P. Morgan Mortgage Acquisition Corporation 2006
NC1 Asset Backed Pass-Through Certificates Series 2006-NC1
(JPMAC2006-NC1) under the New York trust laws. The corpus of the trust
consists of a pool of residential mortgages purportedly secured by liens on
residential real estate. U.S. Bank National Association is the named securities
trustee in the trust documents as evidenced by the trust filings at the Securities
and Exchange Commission. http://www.secdatabase.com/CIK/1357599/Company-
Name/JPMAC-2006-NC1
The closing date of the securities trust was April 1, 2006 or 90 days
thereafter.
Carr has alleged and continues to allege that the attempt to assign her note
and deed of trust to JPMAC2006-NC1 was made long after the closing date of
the securities trust and therefore the assignment is ineffective.
The attempted assignment, in 2007, of her note and deed of trust to the
JPMAC2006-NC1 securities trust is also in violation of the IRS REMIC laws
and nothing more than a tax evasion scheme.
The Appellant states again, that the Home123 Corporation and New
Century Mortgage Corporation employees executed and then notarized the
fraudulent assignment in 2007 after the bankruptcy Chapter 11 was declared
on 4-2-2007. The Debtors have a direct role in the scheme to defraud not only
the creditor-homeowner-borrower but also any investors in the JPMAC2006-
INFORMAL APPELLANT REPLY BRIEF
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NC1 and/or any Mutual Funds which contain that Mortgage Backed Security
(MBS).
The foregoing is merely one solid fact that the assignment attempt is deceit
and a fraudulent and a feeble attempt to cover up further fraud. The
Assignment is VOID.
Carr has prior acknowledged in her pleadings that federal and state
employees retirement plans are invested in JPMAC2006-NC1 and possibly
derivatives of that investment offering. Carr prays that the Courts disclose
such an investment and conflict of interest.
One cannot have a settlement based upon deceit and fraudulent inducement
to settle nor can one have a settlement based upon fraud and deceit. The
Assignment was executed by Home123 Corporation and New Century
Mortgage Corporation employee and it was executed AFTER the declaration
of the Chapter 11 bankruptcy filing in Delaware.
The Assignment was notarized by Home123 Corporation and New Century
Mortgage employee-notary. The Assignment was executed AFTER the
JPMAC2006-NC1 securities trust cut-off date of April 1, 2006. The
Assignment is VOID. The Assignment is fraud.
______________________
1
Mortgage-backed securities are created through a complex process known as securitization. (See Levitin &
Twomey, Mortgage Servicing (2011) 28 Yale J. on Reg. 1, 13 [a mortgage securitization transaction is extremely complex].)
In simplified terms, securitization is the process where (1) many loans are bundled together and transferred to a passive
entity, such as a trust, and (2) the trust holds the loans and issues investment securities that are repaid from the mortgage
payments made on the loans. (Oppenheim & Trask-Rahn, Deconstructing the Black Magic of Securitized Trusts: How the
Mortgage-Backed Securitization Process is Hurting the Banking Industrys Ability to Foreclose and Proving the Best Offense
for a Foreclosure Defense (2012) 41 Stetson L.Rev. 745, 753-754 (hereinafter, Deconstructing Securitized Trusts).) Hence,
the securities issued by the trust are mortgage-backed. For purposes of this opinion, we will refer to such a trust as a
securitized trust.


INFORMAL APPELLANT REPLY BRIEF
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The letters from the counsels for the bankruptcy trustee Alan Jacobs are
what Appellant Carr relied upon in order to settle. The re-assurances by the
counsels and Alan Jacobs that the Assignment is valid was relied upon by
Appellant Carr. The counsels even assert, even though they have no first-
hand knowledge and never witnessed the execution of the Assignment, that
the signature on it is valid.
Furthermore Mark S. Indelicato, the managing partner of Hahn & Hessen,
as lead counsel for Alan Jacobs, published in 2002 Asset Securitization, The
Bankruptcy Perspective see
http://www.hahnhessen.com/uploads/39/doc/2002_06_msi_assetsecuritizat
ion0.pdf
Mr. Indelicato professes to have a great deal of knowledge about the
securitization process, the SPE and how to keep the SPE and its assets from
being affected by the bankruptcy of the originator. In this appeal matter, Alan
Jacobs, the appointed bankruptcy trustee, had an incentive to deceive and
fraudulently induce Carr into settling for minimal monetary amount by
reassuring her that the assignment was valid. Alan Jacobs does not want more
homeowners showing up in the bankruptcy with their fraudulent & robo-
signed, robo-notarized assignments.
Alan Jacobs has an even bigger incentive, that being that quite possibly a
homeowner-creditor could file a motion to include the solvent SPE in the
debtors bankruptcy.
The Appellee (Alan Jacobs) and his counsels have unclean hands and
continue to perpetrate a massive fraud and tax evasion scheme and continue to
deny Carr her due process rights and the lawful rights to her property.
INFORMAL APPELLANT REPLY BRIEF
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Carr has alleged and continues to allege many of the same invalid and
illegal acts as brought forth and decided by the recent California Appellate
decision in the Glaski case against Bank of America with Chase involvement.
Mortgage Backed Securities Trust (MBS) transfers done in
contravention to New York Trust laws are void, not merely voidable.
The Court in the Glaski appeal opinion states We conclude that a
borrower may challenge the securitized trusts chain of ownership by alleging
the attempts to transfer the deed of trust to the securitized trust (which was
formed under New York law) occurred after the trusts closing date. Transfers
that violate the terms of the trust instrument are void under New York trust
law, and borrowers have standing to challenge void assignments of their loans
even though they are not a party to, or a third party beneficiary of, the
assignment agreement. We therefore reverse the judgment of dismissal and
remand for further proceedings.
The Court goes on to say We conclude that Glaskis factual allegations
regarding post-closing date attempts to transfer his deed of trust into the
WaMu Securitized Trust are sufficient to state a basis for concluding the
attempted transfers were void. As a result, Glaski has a stated cognizable
claim for wrongful foreclosure under the theory that the entity invoking the
power of sale (i.e., Bank of America in its capacity as trustee for the WaMu
Securitized Trust) was not the holder of the Glaski deed of trust.
Probably one of the most damaging conclusions by the California appellate
court is that an examination of whether the loan ever made it into the asset
pool is proper in determining the proper party to initiate a foreclosure or to
offer a credit bid at a foreclosure auction. The court said that alleged transfers
into the trust after the cutoff date are void under New York State law which is
INFORMAL APPELLANT REPLY BRIEF
9

the law that governs the common-law trusts created by the banks as part of the
fraudulent securitization scheme.
This Glaski case has many of the elements that Plaintiff Carr has alleged
for years. Fabricated documents, forgeries, perjury, false affidavits and no
money trail to backup the story painted by the fabricated documents.
The allegations that the instant case shares with some of the other lawsuits
are that (1) documents related to the foreclosure contained forged signatures
and illegal notary acts and (2) the foreclosing entity was not the true owner of
the loan because its chain of ownership had been broken by a defective
transfer of the loan to the securitized trust established for the mortgage-backed
securities. Here, the specific defect alleged is that the attempted transfers
were made after the closing date of the securitized trust holding the pooled
mortgages and therefore the transfers were ineffective.
What is being played out here in this case and hundreds of thousands of
other cases is a representation by the foreclosing entity that the trust owns the
loan when in fact it never owned the loan nor could it because the money that
was advanced by investors was never deposited into the trust.
Alan Jacobs and debtors acted in bad faith, fraudulently and with malice &
oppression and Plaintiff, being disabled since 2001, requests punitive damages
pursuant to California Civil Code 3294, and a trebling of any punitive
damages awarded by the trier of fact pursuant to California Civil Code 3345.
Alan Jacobs and debtors have vicarious liability. Debtors (loan
originators) entered into contractual transactions with Chase as early as 2005
to provide the mortgage loans for the pools which then were formed into
Mortgage Backed Securities (MBS) and the securities (certificates) sold to
investors, many very large institutional investors.
INFORMAL APPELLANT REPLY BRIEF
10

In fact the FHFA, in the USDC Southern District of New York is suing 17
large banking entities, including JPMorgan Chase & Co. and its subsidiaries
over the fraud involved with securitization, including the JPMAC2006-NC1
securities trust where the Carr loan allegedly was supposed to be included in.
All the mortgage loans in JPMAC2006-NC1 were originated by Home123
Corporation or New Century Mortgage Corporation. The FHFA is suing on
behalf of the GSEs (government sponsored entities such as Fannie Mae and
Freddie Mac). Freddie Mac purchased some of the JPMAC2006-NC1. Find
information on the lawsuit on the FHFA website at
http://www.fhfa.gov/Default.aspx?Page=5
Or in Pacer FHFA v JPMorgan Chase & Co. et al 11Civ. 6188 SDNY
(DLC).
Additionally, some of the banking entities named in that FHFA lawsuit
have recently subpoenaed records from Alan Jacobs with respect to the
mortgage loan files and underwriting practices of the debtor(s).
Additionally, the assignment executed by the Home123 Corporation
employee Steve Nagy assigns the Carr Deed and Note to U.S. Bank, N.A.
which is not even the correct assignee. U.S. Bank, N.A. never gave any
value received to Home123 Corporation. Carr never owed U.S. Bank, N.A.
any monies. If U.S. Bank, N.A. is the alleged securities trustee for the
JPMAC2006-NC1 trust, then the assignment should read U.S. Bank National
Association as Trustee for The J.P. Morgan Mortgage Acquisition
Corporation 2006-NC1 Asset Backed Pass-Through Certificates Series 2006-
NC1. Furthermore, the assignment would have to be from a Chase entity as
assignor to such a securities trustee. Not from Home123 Corporation.
This honorable court cannot let this deceit and fraud stand.
INFORMAL APPELLANT REPLY BRIEF
11

The easiest and best solution for Carr is for this Court to order the
immediate cancellation of the assignment instrument. This should be
executed and filed with the Alameda County Recorders Office forthwith.
The assignment is void and of no effect.

II. STERN MATTER AND THE U.S. SUPREME COURT
The Appellee seeks to minimize or negate the relevance of Stern in this
matter, however the U.S. Supreme Court is about to return to its new term on
the first Monday of October.
On June 24, 2013 the United States Supreme Court granted a petition for
Writ of Certiorari in the case No. 12-1200 Executive Benefits Insurance
Agency v. Peter H. Arkison, Chapter 7 Trustee of the Estate of Bellingham
Insurance Agency, Inc.
From the U.S. Supreme Courts website on its jurisdiction:
According to the Constitution (Art. III, 2): "The judicial Power shall extend to all
Cases, in Law and Equity, arising under this Constitution, the Laws of the United
States, and Treaties made, or which shall be made, under their Authority;-to all Cases
affecting Ambassadors, other public Ministers and Consuls;-to all Cases of admiralty
and maritime Jurisdiction;-to Controversies to which the United States shall be a Party;-
to Controversies between two or more States;between a State and Citizens of another
State;-between Citizens of different States;between Citizens of the same State
claiming Lands under Grants of different States, and between a State, or the Citizens
thereof, and foreign States, Citizens or Subjects.
In its petition for certiorari, Appellant EBIA points to the conflict between
the 9
th
Circuits Bellingham holding and the 6
th
Circuits decision in Waldman
v. Stone, 698 F.3d 910 (6
th
Cir. 2012). There the 6
th
Circuit held exactly the
opposite: a litigant cannot waive the constitutional requirement that only
Article III judges, not bankruptcy judges, could exercise the federal judicial
power of the United States. The Waldman court found that the requirement
INFORMAL APPELLANT REPLY BRIEF
12

that federal judiciary power be exercised only by Article III district courts is a
structural principal that a litigant did not have power to waive. 698 F. 3d. at
917 (This requirementis an inseperable element of the constitutional
system of checks and balances that both defines the power and protects the
independence of the Judicial Branch. (citing Stern, 131 S. Ct. at 2608)).
The U.S. Supreme Court will clarify and resolve the circuit split.
A circuit split has emerged as a result of recent decisions from the Sixth
and Ninth Circuit Courts of Appeals regarding whether a bankruptcy court
judge may, with the consent of the parties, enter a final order on a matter that
would normally require final adjudication by an Article III judge. The split
comes less than two years after the U.S. Supreme Courts landmark decision
in Stern v. Marshall, in which it narrowed the authority of the bankruptcy
judges. The recent circuit split has heightened the uncertainty regarding the
extent of constitutional power held by bankruptcy judges, making it likely
that, sooner rather than later, the Supreme Court will again take up and clarify
the constitutional role of the bankruptcy courts. The time is now with the
granting of certiorari for the Executive Benefits Insurance Agency v. Arkison
on June 24, 2013 by the U.S. Supreme Court for case 12-1200.
The two questions presented to the U.S. Supreme Court in case 12-1200
are:
1. Whether Article III permits the exercise of the judicial power of the
United States by bankruptcy courts on the basis of litigant consent, and,
if so, whether implied consent based on litigants conduct, where the
statutory scheme provides the litigant no notice that its consent is
required, is sufficient to satisfy Article III.
INFORMAL APPELLANT REPLY BRIEF
13

2. Whether a bankruptcy judge may submit proposed findings of fact and
conclusions of law for de novo review by a district court in a core
proceeding under 28 U.S.C. 157(b).
Appellant believes that the case 12-1200 now before the U.S. Supreme
Court will directly impact this appeal case.

III. APPELLANT CARR OBJECTS TO EACH COUNTER-ARGUMENT
For all the reasons stated in the Appellant Opening Appeal Brief, this
Appellant asserts to the following:
IV. The district court improperly found that the bankruptcy
court had jurisdiction over Carrs claims.
V. The district court improperly affirmed both the first
memorandum on reconsideration and the second
memorandum on reconsideration.
VI. The district court improperly denied the dc motion for
reconsideration.
VII. The district court improperly denied appellants request for
a writ of mandamus.
Appellant Carr has pleaded reliance and harm. The bankruptcy court did
not allow discovery or a trial nor access to an Article III court for adjudication
of the fraudulent inducement to settle claim which overlays continued deceit
and fraud, on the part of Appellee and debtors, regarding the Carr real
property.
A fraudulent inducement to settle matter is NOT merely a dispute.
Appellees statement of facts is incorrect. The incorrect statement of facts
has percolated through the bankruptcy court to the district court.
INFORMAL APPELLANT REPLY BRIEF
14

Appellant had not located the notary Andres Rojas nor the location of his
California Notary Journal until late in November 2010 (after the settlement).
This California notary, a former employee of debtors, was supposed to turn
his notary journal (by law) in to the Orange County California Recorders
office since his commission expired. The Appellant was NOT aware of the
notary fraud prior to the settlement.
The Appellees & debtors risk a huge exposure to thousands of other
homeowners bringing their fraudulent assignments into the bankruptcy court.
Thousands of those fraudulent assignments are still being signed by Steve
Nagy (the debtor employee) in 2013 even though he left the employment in
2007!
The exposure will be even greater if the homeowner-borrower-creditors
learn that every single notary employed by the debtor(s) were instructed to not
make entries in their notary journals, even though that is a criminal act in the
State of California.
Appellant Carrs Adversary Proceeding was not opened to allow for
discovery and a trial and she has been denied her due process rights to have
the matter heard in an Article III court.

FRAUDULENT INDUCEMENT VITIATES A CONTRACT

The centuries old legal principal, Fraus Omnia Vitiate, Fraud vitiates
everything applies in this matter. One cannot have a settlement based on
fraud.
Nudd v. Burrows, 91 US 426 (1875), Fraud destroys the validity of
everything into which it enters. Boyces Executors v. Grundy, 3 Pet. (28
US) 210 (1830), Fraud vitiates everything. United States v. Throckmorton,
INFORMAL APPELLANT REPLY BRIEF
15

98 US 61, 70 (1878) Fraud vitiates the most solemn contracts, documents
and even judgments.
The dispute is unresolved. The fraud and fraudulent conveyance matter is
not resolved. The fraudulent conveyance matter impacts the property rights of
Appellant in California. Appellant had been denied her due process rights and
fairness in this circuit. The USDC in DE has gotten the facts wrong.
Lastly, as noted by the Trustee and in other circuits, Bankruptcy
Court approval of a settlement or compromise under Rule 9019(a) should only
be given if the settlement is fair and equitable and in the best interest of the
estate. Cajun Electric, 119 F.3d 349 at 355, citing Connecticut Gen. Life Ins.
Co. v. United Cos. Fin. Corp. (In re Foster Mortgage Corp.), 68 F.3d 914,
917 (5th Cir. 1995). The terms fair and equitable are treated as terms of art,
meaning that senior interests are entitled to full priority over junior ones.
Cajun Electric, 119 F.3d at 355-56, citing United States v. AWECO, Inc. (In
re AWECO, Inc.), 725 F.2d 293, 297 (5th Cir.1984) at 298.
Even if the issue of illegality has not been pursued in the trial court,
an appellate court may itself raise the issue and remand for findings on the
point, Waring v. Lobdell, 63 Wash.2d 532, 387 P.2d 979 (1964), or if further
findings are not necessary, the appellate court may order the case dismissed
though the issue of illegality was not raised in the trial court. Gaudiosi v.
Mellon, 269 F.2d 873 (3d Cir. 1959); Primeau v. Granfield, 193 F. 911 (2d
Cir. 1911); Armstrong v. Gresham, 73 Colo. 13 (1923).

The Trustees settlement agreement was based on misinformation and
apparent misunderstanding of the issues. Therefore, the Trustees settlement
INFORMAL APPELLANT REPLY BRIEF
16

agreement with Appellant Carr should be set aside and the Trustee given more
time to review and evaluate the significant exhibits and issues presented
within the Appellant- Creditors Adversary Proceeding as he has the duty to
maximize the value of the estate, Weintraub at 1993, and in so doing is
"bound to be vigilant and attentive in advancing [the estate's] interests." In re
Baird, 112 F. 960, 960 (E.D.Pa.1902). In sum, "it is the trustee's duty to both
the debtor and the creditors to realize from the estate all that is possible for
distribution among the creditors." 4 Collier on Bankruptcy p 704.01 (15th
ed.1993).
Appellant has been denied fairness in this matter and she has not been
equitably treated. Appellants property is at stake here and the courts appear
to not want to uphold the laws.
There is a fraudulent document (done by the debtor) which is indicia of fraud
and a fraudulent conveyance and then fraudulent inducement to settle to cover
everything up.
The Trustee has repeatedly complained in open court that he did not wish
to have to re-calculate the distributions to date. Of course, the large banking
entity-creditors received the bulk of the distributions since the homeowner-
borrower-creditors were never notified of the bankruptcy or the bar date.
Appellants settlement with the bankruptcy trust in 2010 was not fair and
not equitable and based upon fraud, deceit and a fraudulent inducement to
settle.

VIII. CONCLUSION
1. Appellant prays for this Court to Order the Assignment declared
VOID and to issue a cancellation of instrument order, with haste.
INFORMAL APPELLANT REPLY BRIEF
17

2. Appellant prays for this Court to forever enjoin the Appellee, the
debtors, the debtor successors and/or assigns, whether known or unknown,
from claiming any estate, right, title or interest in subject property.
3. Appellant prays for an Order to have Appellees pay for and correct
all filings in the Alameda County Recorders Office.
4. Appellant prays for an Order to have Appellees pay for and correct
her credit reports as to any default and/or foreclosure.
4. Appellant prays for further relief this court deems proper.

Dated: August 23, 2013 Respectfully Submitted,
/s/Anita B. Carr
Anita Carr, Appellant in pro per



CERTIFICATE OF WORD COUNT

The foregoing brief complies with the type-volume limitation of Fed. R. App. P.
32(a)(7)(B). The brief contains 4,532 words in the entire document, excluding the parts of the
brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii) (e.g., the title page, statement, certifications
of counsel, and tables of content and authorities).

This brief also complies with the typeface requirements of Fed. R. App. P. 32(a)(5) and
the type style requirements of Fed. R. App. P. 32(a)(6). The brief has been prepared in a
proportionately spaced typeface in 14-point Times Roman font.

I certify that the Appellants Informal Reply Brief is in compliance with Rule
32(a)(7)(B) and (C).

Dated: August 23, 2013


/s/Anita B. Carr
Anita B. Carr, in pro per

INFORMAL APPELLANT REPLY BRIEF
19
















APPENDIX

The Glaski Case



Filed 7/31/13; pub. order 8/8/13 (see end of opn.)







IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIFTH APPELLATE DISTRICT

THOMAS A. GLASKI,

Plaintiff and Appellant,

v.

BANK OF AMERICA, NATIONAL
ASSOCIATION et al.

Defendants and Respondents.


F064556

(Super. Ct. No. 09CECG03601)


OPI NI ON

APPEAL from a judgment of the Superior Court of Fresno County. Alan M.
Simpson, Judge.
Law Offices of Richard L. Antognini and Richard L. Antognini; Law Offices of
Catarina M. Benitez and Catarina M. Benitez, for Plaintiff and Appellant.
AlvaradoSmith, Theodore E. Bacon, and Mikel A. Glavinovich, for Defendants
and Respondents.
-ooOoo-

2

I NTRODUCTI ON
Before Washington Mutual Bank, FA (WaMu) was seized by federal banking
regulators in 2008, it made many residential real estate loans and used those loans as
collateral for mortgage-backed securities.
1
Many of the loans went into default, which
led to nonjudicial foreclosure proceedings. Some of the foreclosures generated lawsuits,
which raised a wide variety of claims. The allegations that the instant case shares with
some of the other lawsuits are that (1) documents related to the foreclosure contained
forged signatures of Deborah Brignac and (2) the foreclosing entity was not the true
owner of the loan because its chain of ownership had been broken by a defective transfer
of the loan to the securitized trust established for the mortgage-backed securities. Here,
the specific defect alleged is that the attempted transfers were made after the closing date
of the securitized trust holding the pooled mortgages and therefore the transfers were
ineffective.
In this appeal, the borrower contends the trial court erred by sustaining
deIendants` demurrer as to all oI his causes oI action attacking the nonjudicial
Ioreclosure. We conclude that, although the borrower`s allegations are somewhat
confusing and may contain contradictions, he nonetheless has stated a wrongful

1
Mortgage-backed securities are created through a complex process known as
'securization. (See Levitin & Twomey, Mortgage Servicing (2011) 28 Yale J. on Reg. 1,
13 |'a mortgage securitization transaction is extremely complex|.) In simpliIied terms,
'securitization is the process where (1) many loans are bundled together and transferred
to a passive entity, such as a trust, and (2) the trust holds the loans and issues investment
securities that are repaid from the mortgage payments made on the loans. (Oppenheim &
Trask-Rahn, Deconstructing the Black Magic of Securitized Trusts: How the Mortgage-
Backed Securiti:ation Process is Hurting the Banking Industrvs Abilitv to Foreclose and
Proving the Best Offense for a Foreclosure Defense (2012) 41 Stetson L.Rev. 745, 753-
754 (hereinafter, Deconstructing Securitized Trusts).) Hence, the securities issued by the
trust are 'mortgage-backed. For purposes oI this opinion, we will reIer to such a trust as
a 'securitized trust.

3

foreclosure claim under the lenient standards applied to demurrers. We conclude that a
borrower may challenge the securitized trust`s chain oI ownership by alleging the
attempts to transfer the deed of trust to the securitized trust (which was formed under
New York law) occurred aIter the trust`s closing date. TransIers that violate the terms oI
the trust instrument are void under New York trust law, and borrowers have standing to
challenge void assignments of their loans even though they are not a party to, or a third
party beneficiary of, the assignment agreement.
We therefore reverse the judgment of dismissal and remand for further
proceedings.
F ACTS
The Loan
Thomas A. Glaski, a resident of Fresno County, is the plaintiff and appellant in
this lawsuit. The operative second amended complaint (SAC) alleges the following:
In July 2005, Glaski purchased a home in Fresno for $812,000 (the Property). To
finance the purchase, Glaski obtained a $650,000 loan from WaMu. Initial monthly
payments were approximately $1,700. Glaski executed a promissory note and a deed of
trust that granted WaMu a security interest in the Property (the Glaski deed of trust).
Both documents were dated July 6, 2005. The Glaski deed of trust identified WaMu as
the lender and the beneficiary, defendant California Reconveyance Company (California
Reconveyance) as the trustee, and Glaski as the borrower.
Paragraph 20 of the Glaski deed of trust contained the traditional terms of a deed
of trust and states that the note, together with the deed of trust, can be sold one or more
times without prior notice to the borrower. In this case, a number of transfers purportedly
occurred. The validity oI attempts to transIer Glaski`s note and deed oI trust to a
securitized trust is a fundamental issue in this appeal.

4

Paragraph 22another provision typical of deeds of trustsets forth the remedies
available to the lender in the event oI a deIault. Those remedies include (1) the lender`s
right to accelerate the debt after notice to the borrower and (2) the lender`s right to
'invoke the power oI sale aIter the borrower has been given written notice oI deIault and
oI the lender`s election to cause the property to be sold. Thus, under the Glaski deed oI
trust, it is the lender-beneficiary who decides whether to pursue nonjudicial foreclosure in
the event of an uncured default by the borrower. The trustee implements the lender-
beneIiciary`s decision by conducting the nonjudicial Ioreclosure.
2

Glaski`s loan had an adjustable interest rate, which caused his monthly loan
payment to increase to $1,900 in August 2006 and to $2,100 in August 2007. In August
2008, Glaski attempted to work with WaMu`s loan modiIication department to obtain a
modification of the loan. There is no dispute that Glaski defaulted on the loan by failing
to make the monthly installment payments.
Creation of the WaMu Securitized Trust
In late 2005, the WaMu Mortgage Pass-Through Certificates Series 2005-AR17
Trust was formed as a common law trust (WaMu Securitized Trust) under New York
law. The corpus of the trust consists of a pool of residential mortgage notes purportedly
secured by liens on residential real estate. La Salle Bank, N.A., was the original trustee
for the WaMu Securitized Trust.
3
Glaski alleges that the WaMu Securitized Trust has no

2
Civil Code section 2924, subdivision (a)(1) states that a 'trustee, mortgagee, or
beneficiary, or any oI their authorized agents may initiate the nonjudicial Ioreclosure
process. This statute and the provision of the Glaski deed of trust are the basis for
Glaski`s position that the nonjudicial Ioreclosure in this case was wrongfulnamely, that
the power of sale in the Glaski deed of trust was invoked by an entity that was not the
true beneficiary.
3
Glaski`s pleading does not allege that LaSalle Bank was the original trustee
when the WaMu Securitized Trust was formed in late 2005, but filings with the Securities
and Exchange Commission identify LaSalle Bank as the original trustee. We provide this


5

continuing duties other than to hold assets and to issue various series of certificates of
investment. A description of the certificates of investment as well as the categories of
mortgage loans is included in the prospectus filed with the Securities and Exchange
Commission (SEC) on October 21, 2005. Glaski alleges that the investment certificates
issued by the WaMu Securitized Trust were duly registered with the SEC.
The closing date for the WaMu Securitized Trust was December 21, 2005, or 90
days thereafter. Glaski alleges that the attempt to assign his note and deed of trust to the
WaMu Securitized Trust was made after the closing date and, therefore, the assignment
was ineffective. (See fn. 12, post.)
WaMu`s Failure and TransIers oI the Loan
In September 2008, WaMu was seized by the Office of Thrift Supervision and the
Federal Deposit Insurance Corporation (FDIC) was appointed as a receiver for WaMu.
That same day, the FDIC, in its capacity as receiver, sold the assets and liabilities of
WaMu to defendant JPMorgan Chase Bank, N.A., (JP Morgan). This transaction was
documented by a 'PURCHASE AND ASSUMPTION AGREEMENT WHOLE BANK
(boldface and underlining omitted) between the FDIC and JP Morgan dated as of
September 25, 2008. II Glaski`s loan was not validly transIerred to the WaMu
Securitized Trust, it is possible, though not certain, that JP Morgan acquired the Glaski
deed of trust when it purchased WaMu assets from the FDIC.
4
JP Morgan also might
have acquired the right to service the loans held by the WaMu Securitized Trust.

information for background purposes only and it plays no role in our decision in this
appeal.
4
Another possibility, which was acknowledged by both sides at oral argument, is
that the true holder of the note and deed of trust cannot be determined at this stage of the
proceedings. This lack of certainty regarding who holds the deed of trust is not
uncommon when a securitized trust is involved. (See Mortgage and Asset Backed
Securities Litigation Handbook (2012) 5:114 [often difficult for securitized trust to


6

In September 2008, Glaski spoke to a representative of defendant Chase Home
Finance LLC (Chase),
5
which he believed was an agent of JP Morgan, and made an oral
agreement to start the loan modification process. Glaski believed that Chase had taken
over loan modification negotiations from WaMu.
On December 9, 2008, two documents related to the Glaski deed of trust were
recorded with the Fresno County Recorder: (1) an 'ASSIGNMENT OF DEED OF
TRUST and (2) a 'NOTICE OF DEFAULT AND ELECTION TO SELL UNDER
DEED OF TRUST (boldIace omitted; hereinaIter the NOD). The assignment stated that
JP Morgan transferred and assigned all beneficial interest under the Glaski deed of trust
to 'LaSalle Bank NA as trustee Ior WaMu |Securitized Trust| together with the note
described in and secured by the Glaski deed of trust.
6

Notice of Default and Sale of the Property
The NOD informed Glaski that (1) the Property was in foreclosure because he was
behind in his payments
7
and (2) the Property could be sold without any court action.

prove ownership by showing a chain of assignments of the loan from the originating
lender].)
5
It appears this company is no longer a separate entity. The certificate of
interested entities Iiled with the respondents` brieI reIers to 'JPMorgan Chase Bank, N.A.
as successor by merger to Chase Home Finance, LLC.
6
One controversy presented by this appeal is whether this court should consider
the December 9, 2008, assignment of deed of trust, which is not an exhibit to the SAC.
Because the trial court took judicial notice of the existence and recordation of the
assignment earlier in the litigation, we too will consider the assignment, but will not
presume the matters stated therein are true. (See pt. IV.B, post.) For instance, we will
not assume that JP Morgan actually held any interests that it could assign to LaSalle
Bank. (See Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366,
1375 |taking judicial notice oI a recorded assignment does not establish assignee`s
ownership of deed of trust].)
7
Specifically, the notice stated that his August 2008 installment payment and all
subsequent installment payments had not been made.

7

The NOD also stated that 'the present beneIiciary under the Glaski deed oI trust had
delivered to the trustee a written declaration and demand for sale. According to the
NOD, all sums secured by the deed of trust had been declared immediately due and
payable and that the beneficiary elected to cause the Property to be sold to satisfy that
obligation.
The NOD stated the amount of past due payments was $11,200.78 as of December
8, 2008.
8
It also stated: 'To Iind out the amount you must pay, or to arrange Ior payment
to stop the Ioreclosure, . contact: JPMorgan Chase Bank, National Association, at 7301
BAYMEADOWS WAY, JACKSONVILLE, FL 32256, (877) 926-8937.
Approximately three months after the NOD was recorded and served, the next
official step in the nonjudicial foreclosure process occurred. On March 12, 2009, a
'NOTICE OF TRUSTEE`S SALE was recorded by the Fresno County Recorder (notice
of sale). The sale was scheduled for April 1, 2009. The notice stated that Glaski was in
default under his deed of trust and estimated the amount owed at $734,115.10.
The notice of sale indicated it was signed on March 10, 2009, by Deborah
Brignac, as Vice President for California Reconveyance. Glaski alleges that Brignac`s
signature was Iorged to eIIectuate a Iraudulent Ioreclosure and trustee`s sale oI his
primary residence.
Glaski alleges that from March until May 2009, he was led to believe by his
negotiations with Chase that a loan modification was in process with JP Morgan.

8
The signature block at the end of the NOD indicated it was signed by Colleen
Irby as assistant secretary for California Reconveyance. The first page of the notice
stated that recording was requested by California Reconveyance. Affidavits of mailing
attached to the SAC stated that the declarant mailed copies of the notice of default to
Glaski at his home address and to Bank of America, care of Custom Recording Solutions,
at an address in Santa Ana, California. The affidavits of mailing are the earliest
documents in the appellate record indicating that Bank of America had any involvement
with Glaski`s loan.

8

Despite these negotiations, a nonjudicial foreclosure sale of the Property was
conducted on May 27, 2009. Bank of America, as successor trustee for the WaMu
Securitized Trust and beneficiary under the Glaski deed of trust, was the highest bidder at
the sale.
On June 15, 2009, another 'ASSIGNMENT OF DEED OF TRUST was recorded
with the Fresno County Recorder. This assignment, like the assignment recorded in
December 2008, identified JP Morgan as the assigning party. The entity receiving all
beneIicial interest under the Glaski deed oI trust was identiIied as Bank oI America, 'as
successor by merger to LaSalle Bank NA as trustee Ior WaMu |Securitized Trust| ..
9

The assignment of deed of trust indicates it was signed by Brignac, as Vice President for
JP Morgan. Glaski alleges that Brignac`s signature was Iorged.
The very next document filed by the Fresno County Recorder on June 15, 2009,
was a 'TRUSTEE`S DEED UPON SALE. (BoldIace omitted.) The trustee`s deed upon
sale stated that California Reconveyance, as the duly appointed trustee under the Glaski
deed of trust, granted and conveyed to Bank of America, as successor by merger to La
Salle NA as trustee for the WaMu Securitized Trust, all of its right, title and interest to
the Property. The trustee`s deed upon sale stated that the amount oI the unpaid debt and
costs was $738,238.04 and that the grantee, paid $339,150 at the trustee`s sale, either in
lawful money or by credit bid.
PROCE EDI NGS
In October 2009, Glaski filed his original complaint. In August 2011, Glaski filed
the SAC, which alleged the following numbered causes of action:

9
Bank of America took over La Salle Bank by merger in 2007.

9

(1) Fraud against JPMorgan and California Reconveyance for the alleged forged
signatures of Deborah Brignac as vice president for California Reconveyance and then as
vice president of JPMorgan;
(2) Fraud against all defendants for their failure to timely and properly transfer the
Glaski loan to the WaMu Securitized Trust and their representations to the contrary;
(3) Quiet title against Bank of America, Chase, and California Reconveyance
based on the broken chain of title caused by the defective transfer of the loan to the
WaMu Securitized Trust;
(4) Wrongful foreclosure against all defendants, based on the forged signatures of
Deborah Brignac and the failure to timely and properly transfer the Glaski loan to the
WaMu Securitized Trust;
(5) Declaratory relief against all defendants, based on the above acts by
defendants;
(8) Cancellation of various foreclosure documents against all defendants, based on
the above acts by the defendants; and
(9) Unfair practices under California Business and Professions Code section
17200, et seq., against all defendants.
Among other things, Glaski raised questions regarding the chain of ownership, by
contending that the defendants were not the lender or beneficiary under his deed of trust
and, therefore, did not have the authority to foreclose.
In September 2011, defendants filed a demurrer that challenged each cause of
action in the SAC on the grounds that it failed to state facts sufficient to constitute a
claim for relief. With respect to the wrongful foreclosure cause of action, defendants
argued that Glaski failed to allege (1) any procedural irregularity that would justify
setting aside the presumptively valid trustee`s sale and (2) that he could tender the
amount owed iI the trustee`s sale were set aside.

10

To support their demurrer to the SAC, defendants filed a request for judicial notice
concerning (1) Order No. 2008-36 of the Office of Thrift Supervision, dated September
25, 2008, appointing the FDIC as receiver of Washington Mutual Bank and (2) the
Purchase and Assumption Agreement Whole Bank between the FDIC and JP Morgan
dated as of September 25, 2008, concerning the assets, deposits and liabilities of
Washington Mutual Bank.
10

Glaski opposed the demurrer, arguing that breaks in the chain of ownership of his
deed oI trust were suIIiciently alleged. He asserted that Brignac`s signature was forged
and the assignment bearing that forgery was void. His opposition also provided a more
detailed explanation of his argument that his deed of trust had not been effectively
transferred to the WaMu Securitized Trust that held the pool of mortgage loans. Thus, in
Glaski`s view, Bank oI America`s claim as the successor trustee is Ilawed because the
trust never held his loan.
On November 15, 2011, the trial court heard argument from counsel regarding the
demurrer. Counsel for Glaski argued, among other things, that the possible ratification of
the allegedly forged signatures of Brignac presented an issue of fact that could not be
resolved at the pleading stage.
Later that day, the court filed a minute order adopting its tentative ruling. As
background Ior the issues presented in this appeal, we will describe the trial court`s ruling
on Glaski`s two Iraud causes oI action and his wrongIul Ioreclosure cause oI action.
The ruling stated that the first cause of action for fraud was based on an allegation
that defendants misrepresented material information by causing a forged signature to be

10
The trial court did not explicitly rule on deIendants` request for judicial notice
of these documents, but referred to matters set forth in these documents in its ruling.
Therefore, for purposes of this appeal, we will infer that the trial court granted the
request.

11

placed on the June 2009 assignment of deed of trust. The ruling stated that if the
signature oI Brignac was Iorged, CaliIornia Reconveyance 'ratiIied the signature by
treating it as valid. As an additional rationale, the ruling cited Gomes v. Countrywide
Home Loans, Inc. (2011) 192 Cal.App.4th 1149 (Gomes) for the proposition that the
exhaustive nature oI CaliIornia`s nonjudicial Ioreclosure scheme prohibited the
introduction oI additional requirements challenging the authority oI the lender`s nominee
to initiate nonjudicial foreclosure.
As to the second cause of action for fraud, the ruling noted the allegation that the
Glaski deed of trust was transIerred to the WaMu Securitized Trust aIter the trust`s
closing date and summarized the claim as asserting that the Glaski deed of trust had been
improperly transferred and, therefore, the assignment was void ab initio. The ruling
rejected this claim, stating: '|T|o reiterate, Gomes v. Countrywide, supra holds that there
is no legal basis to challenge the authority of the trustee, mortgagee, beneficiary, or any
of their authorized agents to initiate the foreclosure process citing Civil Code 2924,
subd. (a)(1).
The ruling stated that the fourth cause of action for wrongful foreclosure was
'based upon the invalidity oI the Ioreclosure sale conducted on May 27, 2009 due to the
Iorged` signature oI Deborah Brignac and the Iailure oI DeIendants to provide a chain
oI title oI the note and the mortgage.` The ruling stated that, as explained earlier, 'these
contentions are meritless and sustained the general demurrer to the wrongIul Ioreclosure
claim without leave to amend.
Subsequently, a judgment of dismissal was entered and Glaski filed a notice of
appeal.

12

DISCUSSI ON
I. STANDARD OF REVIEW
The trial court sustained the demurrer to the SAC on the ground that it did 'not
state Iacts suIIicient to constitute a cause oI action. (Code Civ. Proc., 430.10, subd.
(e).) The standard oI review applicable to such an order is well settled. '|W|e examine
the complaint de novo to determine whether it alleges facts sufficient to state a cause of
action under any legal theory .. (McCall v. Pacifi Care of Cal., Inc. (2001) 25 Cal.4th
412, 415.)
When conducting this de novo review, '|w|e give the complaint a reasonable
interpretation, reading it as a whole and its parts in their context. [Citation.] Further, we
treat the demurrer as admitting all material facts properly pleaded, but do not assume the
truth oI contentions, deductions or conclusions oI law. |Citations.| (City of Dinuba v.
County of Tulare (2007) 41 Cal.4th 859, 865.) Our consideration of the facts alleged
includes 'those evidentiary Iacts Iound in recitals oI exhibits attached to a complaint.
(Satten v. Webb (2002) 99 Cal.App.4th 365, 375.) 'We also consider matters which may
be judicially noticed. (Serrano v. Priest (1971) 5 Cal.3d 584, 591; see Code Civ. Proc.,
430.30, subd. (a) [use of judicial notice with demurrer].) Courts can take judicial notice
of the existence, content and authenticity of public records and other specified
documents, but do not take judicial notice of the truth of the factual matters asserted in
those documents. (Mangini v. R.J. Reynolds Tobacco Co. (1994) 7 Cal.4th 1057, 1063,
overruled on other grounds in In re Tobacco Cases II (2007) 41 Cal.4th 1257, 1262.)
We note 'in passing upon the question oI the suIIiciency or insuIIiciency oI a
complaint to state a cause of action, it is wholly beyond the scope of the inquiry to
ascertain whether the Iacts stated are true or untrue as '|t|hat is always the ultimate
question to be determined by the evidence upon a trial oI the questions oI Iact. (Colm v.
Francis (1916) 30 Cal.App. 742, 752.) )

13

II. FRAUD
A. Rules for Pleading Fraud
The elements of a fraud cause of action are (1) misrepresentation, (2) knowledge
of the falsity or scienter, (3) intent to defraudthat is, induce reliance, (4) justifiable
reliance, and (5) resulting damages. (Lazar v. Superior Court (1996) 12 Cal.4th 631,
638.) These elements may not be pleaded in a general or conclusory fashion. (Id. at p.
645.) Fraud must be pled specificallythat is, a plaintiff must plead facts that show with
particularity the elements of the cause of action. (Ibid.)
In their demurrer, defendants contended facts establishing detrimental reliance
were not alleged.
B. First Cause of Action for Fraud, Lack of Specific Allegations of Reliance
Glaski`s Iirst cause of action, which alleges a fraud implemented through forged
documents, alleges that deIendants` act 'caused PlaintiII to rely on the recorded
documents and ultimately lose the property which served as his primary residence, and
caused Plaintiff further damage, prooI oI which will be made at trial.
This allegation is a general allegation of reliance and damage. It does not identify
the particular acts Glaski took because of the alleged forgeries. Similarly, it does not
identify any acts that Glaski did not take because of his reliance on the alleged forgeries.
ThereIore, we conclude that Glaski`s conclusory allegation oI reliance is insuIIicient
under the rules of law that require fraud to be pled specifically. (Lazar v. Superior Court,
supra, 12 Cal.4th at p. 645.)
The next question is whether the trial court abused its discretion in sustaining the
demurrer to the first fraud cause of action without leave to amend.
In March 2011, the trial court granted Glaski leave to amend when ruling on
defendants` motion Ior judgment on the pleadings. The court indicated that Glaski`s

14

complaint had jumbled together many different statutes and theories of liability and
directed Glaski to avoid 'chain letter allegations in his amended pleading.
Glaski`s Iirst amended complaint set forth two fraud causes of action that are
similar to those included in the SAC.
DeIendants demurred to the Iirst amended complaint. The trial court`s minute
order states: 'PlaintiII is advised for the last time to plead each cause of action such that
only the essential elements for the claim are set forth without reincorporation of lengthy
general allegations`. In other words, the Iacts` to be pleaded are those upon which
liability depends (i.e., the Iacts constituting the cause oI action`).
After Glaski filed his SAC, defendants filed a demurrer. Glaski then filed an
opposition that asserted he had properly alleged detrimental reliance. He did not argue he
could amend to allege specifically the action he took or did not take because of his
reliance on the alleged forgeries.
Accordingly, Glaski failed to carry his burden of demonstrating he could allege
with the requisite specificity the elements of justifiable reliance and damages resulting
from that reliance. (See Blank v. Kirwan (1985) 39 Cal.3d 311, 318 [the burden of
articulating how a defective pleading could be cured is squarely on the plaintiff].)
Therefore, we conclude that the trial court did not abuse its discretion when it denied
leave to amend as to the SAC`s Iirst cause oI action Ior Iraud.
C. Second Fraud Cause of Action, Lack of Specific Allegations of Reliance
Glaski`s second cause oI action Ior Iraud alleged that WaMu Iailed to transIer his
note and deed of trust into the WaMu Securitized Trust back in 2005. Glaski further
alleged, in essence, that deIendants attempted to rectiIy WaMu`s Iailure by engaging in a
fraudulent scheme to assign his note and deed of trust into the WaMu Securitized Trust.
The scheme was implemented in 2008 and 2009 and its purpose was to enable defendants
to fraudulently foreclosure against the Property.

15

The second cause of action for fraud attempts to allege detrimental reliance in the
Iollowing sentence: 'DeIendants, and each oI them, also knew that the act oI recording
the Assignment of Deed of trust without the authorization to do so would cause Plaintiff
to rely upon Defendants` actions by attempting to negotiate a loan modification with
representatives oI Chase Home Finance, LLC, agents oI JP MORGAN. The assignment
mentioned in this allegation is the assignment of deed of trust recorded in June 2009no
other assignment of deed of trust is referred to in the second cause of action.
The allegation of reliance does not withstand scrutiny. The act of recording the
allegedly Iraudulent assignment occurred in June 2009, aIter the trustee`s sale oI the
Property had been conducted. If Glaski was induced to negotiate a loan modification at
that time, it is unclear how negotiations occurring aIter the May 2009 trustee`s sale could
have diverted him Irom stopping the trustee`s sale. Thus, Glaski`s allegation oI reliance
is not connected to any detriment or damage.
Because Glaski has not demonstrated how this defect in his fraud allegations could
be cured by amendment, we conclude that the trial court did not abuse its discretion in
denying leave to amend the second cause of action in the SAC.
III. WRONGFUL FORECLOSURE BY NONHOLDER OF THE DEED OF TRUST
A. Glaski`s Theory oI WrongIul Foreclosure
Glaski`s theory that the Ioreclosure was wrongful is based on (1) the position that
paragraph 22 of the Glaski deed of trust authorizes only the lender-beneficiary (or its
assignee) to (a) accelerate the loan after a default and (b) elect to cause the Property to be
sold and (2) the allegation that a nonholder of the deed of trust, rather than the true
beneficiary, instructed California Reconveyance to initiate the foreclosure.
11


11
The claim that a foreclosure was conducted by or at the direction of a
nonholder of mortgage rights often arises where the mortgage has been securitized.
(Buchwalter, Cause of Action in Tort for Wrongful Foreclosure of Residential Mortgage,


16

In particular, Glaski alleges that (1) the corpus of the WaMu Securitized Trust was
a pool of residential mortgage notes purportedly secured by liens on residential real
estate; (2) section 2.05 oI 'the Pooling and Servicing Agreement required that all
mortgage files transferred to the WaMu Securitized Trust be delivered to the trustee or
initial custodian of the WaMu Securitized Trust before the closing date of the trust
(which was allegedly set for December 21, 2005, or 90 days thereafter); (3) the trustee or
initial custodian was required to identify all such records as being held by or on behalf of
the WaMu Securitized Trust; (4) Glaski`s note and loan were not transIerred to the
WaMu Securitized Trust prior to its closing date; (5) the assignment of the Glaski deed of
trust did not occur by the closing date in December 2005; (6) the transfer to the trust
attempted by the assignment of deed of trust recorded on June 15, 2009, occurred long
after the trust was closed; and (7) the attempted assignment was ineffective as the WaMu
Securitized Trust could not have accepted the Glaski deed of trust after the closing date
because of the pooling and servicing agreement and the statutory requirements applicable
to a Real Estate Mortgage Investment Conduit (REMIC) trust.
12


52 Causes of Action Second (2012) 119, 149 [ 11 addresses foreclosure by a nonholder
of mortgage rights].)
12
This allegation comports with the following view of pooling and servicing
agreements and the Iederal tax code provisions applicable to REMIC trusts. 'Once the
bundled mortgages are given to a depositor, the [pooling and servicing agreement] and
IRS tax code provisions require that the mortgages be transferred to the trust within a
certain time frame, usually ninety dates from the date the trust is created. After such
time, the trust closes and any subsequent transfers are invalid. The reason for this is
purely economic for the trust. If the mortgages are properly transferred within the ninety-
day open period, and then the trust properly closes, the trust is allowed to maintain
REMIC tax status. (Deconstructing Securitized Trusts, supra, 41 Stetson L.Rev. at pp.
757-758.)

17

B. Wrongful Foreclosure by a Nonholder of the Deed of Trust
The theory that a foreclosure was wrongful because it was initiated by a nonholder
of the deed of trust has also been phrased as (1) the foreclosing party lacking standing to
foreclose or (2) the chain of title relied upon by the foreclosing party containing breaks or
defects. (See Scott v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 743, 764;
Herrera v. Deutsche Bank National Trust Co., supra, 196 Cal.App.4th 1366 [Deutsche
Bank not entitled to summary judgment on wrongful foreclosure claim because it failed
to show a chain of ownership that would establish it was the true beneficiary under the
deed of trust ]; Guerroro v. Greenpoint Mortgage Funding, Inc. (9th Cir. 2010) 403
Fed.Appx. 154, 156 [rejecting a wrongful foreclosure claim because, among other things,
plaintiIIs 'have not pleaded any Iacts to rebut the unbroken chain oI title|.)
In Barrionuevo v. Chase Bank, N.A. (N.D.Cal. 2012) 885 F.Supp.2d 964, the
district court stated: 'Several courts have recognized the existence oI a valid cause oI
action for wrongful foreclosure where a party alleged not to be the true beneficiary
instructs the trustee to Iile a Notice oI DeIault and initiate nonjudicial Ioreclosure. (Id.
at p. 973.) We agree with this statement of law, but believe that properly alleging a cause
of action under this theory requires more than simply stating that the defendant who
invoked the power of sale was not the true beneficiary under the deed of trust. Rather, a
plaintiff asserting this theory must allege facts that show the defendant who invoked the
power of sale was not the true beneficiary. (See Herrera v. Federal National Mortgage
Assn. (2012) 205 Cal.App.4th 1495, 1506 [plaintiff failed to plead specific facts
demonstrating the transfer of the note and deed of trust were invalid].)
C. Borrower`s Standing to Raise a Defect in an Assignment
One basis for claiming that a foreclosing party did not hold the deed of trust is that
the assignment relied upon by that party was ineffective. When a borrower asserts an
assignment was ineffective, a question often arises about the borrower`s standing to

18

challenge the assignment of the loan (note and deed of trust)an assignment to which
the borrower is not a party. (E.g., Conlin v. Mortgage Electronic Registration Systems,
Inc. (6th Cir. 2013) 714 F.3d 355, 361 [third party may only challenge an assignment if
that challenge would render the assignment absolutely invalid or ineffective, or void];
Culhane v. Aurora Loan Services of Nebraska (1st Cir. 2013) 708 F.3d 282, 291 [under
Massachusetts law, mortgagor has standing to challenge a mortgage assignment as
invalid, ineffective or void]; Gilbert v. Chase Home Finance, LLC (E.D.Cal., May 28,
2013, No. 1:13-CV-265 AWI SKO) 2013 WL 2318890.)
13

CaliIornia`s version oI the principle concerning a third party`s ability to challenge
an assignment has been stated in a secondary authority as follows:
'Where an assignment is merely voidable at the election oI the assignor,
third parties, and particularly the obligor, cannot . successIully challenge
the validity or effectiveness oI the transIer. (7 Cal.Jur.3d (2012)
Assignments, 43.)
This statement implies that a borrower can challenge an assignment of his or her
note and deed of trust if the defect asserted would void the assignment. (See Reinagel v.
Deutsche Bank National Trust Co. (5th Cir. 2013) ___ F.3d ___ [2013 WL 3480207 at
p. *3] [following majority rule that an obligor may raise any ground that renders the
assignment void, rather than merely voidable].) We adopt this view of the law and turn
to the question whether Glaski`s allegations have presented a theory under which the
challenged assignments are void, not merely voidable.
We reject the view that a borrower`s challenge to an assignment must Iail once it
is determined that the borrower was not a party to, or third party beneficiary of, the

13
'Although we may not rely on unpublished CaliIornia cases, the CaliIornia
Rules of Court do not prohibit citation to unpublished federal cases, which may properly
be cited as persuasive, although not binding, authority. (Landmark Screens, LLC v.
Morgan, Lewis & Bockius, LLP (2010) 183 Cal.App.4th 238, 251, fn. 6, citing Cal. Rules
of Court, rule 8.1115.)

19

assignment agreement. Cases adopting that position 'paint with too broad a brush.
(Culhane v. Aurora Loan Services of Nebraska, supra, 708 F.3d at p. 290.) Instead,
courts should proceed to the question whether the assignment was void.
D. Voidness of a Post-Closing Date Transfers to a Securitized Trust
Here, the SAC includes a broad allegation that the WaMu Securitized Trust 'did
not have standing to Ioreclosure on the . Property, as DeIendants cannot provide the
entire chain oI title oI the note and the |deed oI trust|.
14

More specifically, the SAC identifies two possible chains of title under which
Bank of America, as trustee for the WaMu Securitized Trust, could claim to be the holder
of the Glaski deed of trust and alleges that each possible chain of title suffers from the
same defecta transfer that occurred after the closing date of the trust.
First, Glaski addresses the possibility that (1) Bank oI America`s chain oI title is
based on its status as successor trustee for the WaMu Securitized Trust and (2) the Glaski
deed oI trust became part oI the WaMu Securitized Trust`s property when the securitized
trust was created in 2005. The SAC alleges that WaMu did not transIer Glaski`s note and
deed of trust into the WaMu Securitized Trust prior to the closing date established by the
pooling and servicing agreement. II WaMu`s attempted transIer was void, then Bank oI
America could not claim to be the holder of the Glaski deed of trust simply by virtue of
being the successor trustee of the WaMu Securitized Trust.
Second, Glaski addresses the possibility that Bank oI America acquired Glaski`s
deed of trust from JP Morgan, which may have acquired it from the FDIC. Glaski

14
Although this allegation and the remainder of the SAC do not explicitly
identify the trustee of the WaMu Securitized Trust as the entity that invoked the power of
sale, it is reasonable to interpret the allegation in this manner. Such an interpretation is
consistent with the position taken by Glaski`s attorney at the hearing on the demurrer,
where she argued that the WaMu Securitized Trust did not obtain Glaski`s loan and thus
was precluded from proceeding with the foreclosure.

20

contends this alternate chain of title also is deIective because JP Morgan`s attempt to
transfer the Glaski deed of trust to Bank of America, as trustee for the WaMu Securitized
Trust, occurred aIter the trust`s closing date. Glaski speciIically alleges JP Morgan`s
attempted assignment of the deed of trust to the WaMu Securitized Trust in June 2009
occurred long after the WaMu Securitized Trust closed (i.e., 90 days after December 21,
2005).
Based on these allegations, we will address whether a post-closing date transfer
into a securitized trust is the type of defect that would render the transfer void. Other
allegations relevant to this inquiry are that the WaMu Securitized Trust (1) was formed in
2005 under New York law and (2) was subject to the requirements imposed on REMIC
trusts (entities that do not pay federal income tax) by the Internal Revenue Code.
The allegation that the WaMu Securitized Trust was formed under New York law
supports the conclusion that New York law governs the operation of the trust. New York
Estates, Powers & Trusts Law section 7-2.4, provides: 'II the trust is expressed in an
instrument creating the estate of the trustee, every sale, conveyance or other act of the
trustee in contravention of the trust, except as authorized by this article and by any other
provision oI law, is void.
15

Because the WaMu Securitized Trust was created by the pooling and servicing
agreement and that agreement establishes a closing date after which the trust may no
longer accept loans, this statutory provision provides a legal basis for concluding that the
trustee`s attempt to accept a loan aIter the closing date would be void as an act in
contravention of the trust document.

15
The statutory purpose is 'to protect trust beneIiciaries Irom unauthorized
actions by the trustee. (Turano, Practice Commentaries, McKinney`s Consolidated
Laws of New York, Book 17B, EPTL 7-2.4.)

21

We are aware that some courts have considered the role of New York law and
rejected the post-closing date theory on the grounds that the New York statute is not
interpreted literally, but treats acts in contravention of the trust instrument as merely
voidable. (Calderon v. Bank of America, N.A. (W.D.Tex., Apr. 23, 2013, No. SA:12-CV-
00121-DAE) ___ F.Supp.2d ___, [2013 WL 1741951 at p. *12| |transIer oI plaintiIIs`
note, if it violated PSA, would merely be voidable and therefore plaintiffs do not have
standing to challenge it]; Bank of America National Association v. Bassman FBT, L.L. C.
(Ill.Ct.App. 2012) 981 N.E.2d 1, 8 [following cases that treat ultra vires acts as merely
voidable].)
Despite the foregoing cases, we will join those courts that have read the New York
statute literally. We recognize that a literal reading and application of the statute may not
always be appropriate because, in some contexts, a literal reading might defeat the
statutory purpose by harming, rather than protecting, the beneficiaries of the trust. In this
case, however, we believe applying the statute to void the attempted transfer is justified
because it protects the beneficiaries of the WaMu Securitized Trust from the potential
adverse tax consequence of the trust losing its status as a REMIC trust under the Internal
Revenue Code. Because the literal interpretation furthers the statutory purpose, we join
the position stated by a New York court approximately two months ago: 'Under New
York Trust Law, every sale, conveyance or other act of the trustee in contravention of the
trust is void. EPTL 7-2.4. Therefore, the acceptance of the note and mortgage by the
trustee aIter the date the trust closed, would be void. (Wells Fargo Bank, N.A. v.
Erobobo (Apr. 29, 2013) 39 Misc.3d 1220(A), 2013 WL 1831799, slip opn. p. 8; see
Levitin & Twomey, Mortgage Servicing, supra, 28 Yale J. on Reg. at p. 14, fn. 35 [under
New York law, any transfer to the trust in contravention of the trust documents is void].)
Relying on Erobobo, a bankruptcy court recently concluded 'that under New York law,
assignment oI the Saldivars` Note aIter the start up day is void ab initio. As such, none

22

oI the Saldivars` claims will be dismissed Ior lack oI standing. (In re Saldivar
(Bankr.S.D.Tex., Jun. 5, 2013, No. 11-10689) 2013 WL 2452699, at p. *4.)
We conclude that Glaski`s Iactual allegations regarding post-closing date attempts
to transfer his deed of trust into the WaMu Securitized Trust are sufficient to state a basis
for concluding the attempted transfers were void. As a result, Glaski has a stated
cognizable claim for wrongful foreclosure under the theory that the entity invoking the
power of sale (i.e., Bank of America in its capacity as trustee for the WaMu Securitized
Trust) was not the holder of the Glaski deed of trust.
16

We are aware that that some federal district courts sitting in California have
rejected the post-closing date theory of invalidity on the grounds that the borrower does
not have standing to challenge an assignment between two other parties. (Aniel v. GMAC
Mortgage, LLC (N.D.Cal., Nov. 2, 2012, No. C 12-04201 SBA) 2012 WL 5389706
[joining courts that held borrowers lack standing to assert the loan transfer occurred
outside the temporal bounds prescribed by the pooling and servicing agreement];
Almutarreb v. Bank of New York Trust Co., N.A. (N.D.Cal., Sept. 24, 2012, No. C 12-

16
Because Glaski has stated a claim for relief in his wrongful foreclosure action,
we need not address his alternate theory that the foreclosure was void because it was
implemented by forged documents. (Genesis Environmental Services v. San Joaquin
Valley Unified Air Pollution Control Dist. (2003) 113 Cal.App.4th 597, 603 [appellate
inquiry ends and reversal is required once court determines a cause of action was stated
under any legal theory].) We note, however, that California law provides that ratification
generally is an affirmative defense and must be specially pleaded by the party asserting it.
(See Reina v. Erassarret (1949) 90 Cal.App.2d 418, 424 [ratification is an affirmative
defense and the defendant ordinarily bears the burden of proof]; 49A Cal.Jur.3d (2010)
Pleading, 186, p. 319 [defenses that must be specially pleaded include waiver, estoppel
and ratiIication|.) Also, '|w|hether there has been ratification of a forged signature is
ordinarily a question oI Iact. (Common Wealth Ins. Systems, Inc. v. Kersten (1974) 40
Cal.App.3d 1014, 1026; see Brock v. Yale Mortg. Corp. (Ga. 2010) 700 S.E.2d 583, 588
[ratification may be expressed or implied Irom acts oI principal and 'is usually a Iact
question Ior the jury; wiIe had Iorged husband`s signature on quitclaim deed|.)

23

3061 EMC) 2012 WL 4371410.) These cases are not persuasive because they do not
address the principle that a borrower may challenge an assignment that is void and they
do not apply New York trust law to the operation of the securitized trusts in question.
E. Application of Gomes
The next question we address is whether Glaski`s wrongIul Ioreclosure claim is
precluded by the principles set forth in Gomes, supra, 192 Cal.App.4th 1149, a case
relied upon by the trial court in sustaining the demurrer. Gomes was a pre-foreclosure
action brought by a borrower against the lender, trustee under a deed and trust, and
MERS, a national electronic registry that tracks the transfer of ownership interests and
servicing rights in mortgage loans in the secondary mortgage market. (Id. at p. 1151.)
The subject trust deed identified MERS as a nominee for the lender and that MERS is the
beneficiary under the trust deed. After initiation of a nonjudicial forclosure, borrower
sued for wrongful initiation of foreclosure, alleging that the current owner of the note did
not authorize MERS, the nominee, to proceed with the foreclosure. The appellate court
held that CaliIornia`s nonjudicial Ioreclosure system, outlined in Civil Code sections
2924 through 2924k, is a 'comprehensive Iramework Ior the regulation of a nonjudicial
Ioreclosure sale` that did not allow Ior a challenge to the authority oI the person
initiating the foreclosure. (Gomes, supra, at p. 1154.)
In Naranjo v. SBMC Mortgage (S.D.Cal., Jul. 24, 2012, No. 11-CV-2229-
L(WVG)) 2012 WL 3030370 (Naranjo), the district court addressed the scope of Gomes,
stating:
'In Gomes, the California Court of Appeal held that a plaintiff does not
have a right to bring an action to determine the nominee`s authorization to
proceed with a nonjudicial foreclosure on behalf of a noteholder.
[Citation.] The nominee in Gomes was MERS. [Citation.] Here, Plaintiff
is not seeking such a determination. The role of the nominee is not central
to this action as it was in Gomes. Rather, Plaintiff alleges that the transfer
of rights to the WAMU Trust is improper, thus Defendants consequently

24

lack the legal right to either collect on the debt or enforce the underlying
security interest. (Naranjo, supra, 2012 WL 3030370, at p. *3.)
Thus, the court in Naranjo did not interpret Gomes as barring a claim that was
essentially the same as the post-closing date claim Glaski is asserting in this case.
Furthermore, the limited nature of the holding in Gomes is demonstrated by the
Gomes court`s discussion oI three federal cases relied upon by Mr. Gomes. The court
stated that the federal cases were not on point because none recognized a cause of action
requiring the noteholder`s nominee to prove its authority to initiate a Ioreclosure
proceeding. (Gomes, supra, 192 Cal.App.4th at p. 1155.) The Gomes court described
one oI the Iederal cases by stating that 'the plaintiII alleged wrongIul Ioreclosure on the
ground that assignments of the deed of trust had been improperly backdated, and thus the
wrong party had initiated the foreclosure process. [Citaiton.] No such infirmity is
alleged here. (Ibid.; see Lester v. J.P. Morgan Chase Bank (N.D.Cal., Feb. 20, 2013)
___ F.Supp.2d____, [2013 WL 633333, p. *7] [concluding Gomes did not preclude the
plaintiff from challenging JP Morgan`s authority to Ioreclose|.) The Gomes court also
stated it was signiIicant that in each oI the three Iederal cases, 'the plaintiII`s complaint
identified a specific factual basis for alleging that the foreclosure was not initiated by the
correct party. (Gomes, supra, at p. 1156.)
The instant case is distinguishable from Gomes on at least two grounds. First, like
Naranjo, Glaski has alleged that the entity claiming to be the noteholder was not the true
owner of the note. In contrast, the principle set forth in Gomes concerns the authority of
the noteholders nominee, MERS. Second, Glaski has alleged specific grounds for his
theory that the foreclosure was not conducted at the direction of the correct party.
In view of the limiting statements included in the Gomes opinion, we do not
interpret it as barring claims that challenge a foreclosure based on specific allegations
that an attempt to transfer the deed of trust was void. Our interpretation, which allows
borrowers to pursue questions regarding the chain of ownership, is compatible with

25

Herrera v. Deutsche Bank National Trust Co., supra, 196 Cal.App.4th 1366. In that case,
the court concluded that triable issues of material fact existed regarding alleged breaks in
the chain of ownership of the deed of trust in question. (Id. at p. 1378.) Those triable
issues existed because Deutsche Bank`s motion Ior summary judgment Iailed to establish
it was the beneficiary under that deed of trust. (Ibid.)
F. Tender
Defendants contend that Glaski`s claims Ior wrongIul Ioreclosure, cancellation oI
instruments and quiet title are defective because Glaski failed to allege that he made a
valid and viable tender of payment of the indebtedness. (See Karlsen v. American Sav. &
Loan Assn. (1971) 15 Cal.App.3d 112, 117 |'valid and viable tender oI payment oI the
indebtedness owing is essential to an action to cancel a voidable sale under a deed of
trust|.)
Glaski contends that he is not required to allege he tendered payment of the loan
balance because (1) there are many exceptions to the tender rule, (2) defendants have
offered no authority for the proposition that the absence of a tender bars a claim for
damages,
17
and (3) the tender rule is a principle of equity and its application should not
be decided against him at the pleading stage.
Tender is not required where the foreclosure sale is void, rather than voidable,
such as when a plaintiff proves that the entity lacked the authority to foreclose on the
property. (Lester v. J.P. Morgan Chase Bank, supra, ___ F.Supp.2d____, [2013 WL
633333, p. *8]; 4 Miller & Starr, Cal. Real Estate (3d ed. 2003) Deeds of Trust, 10:212,
p. 686.)

17
See generally, Annotation, Recognition of Action for Damages for Wrongful
ForeclosureTypes of Action (2013) 82 A.L.R.6th 43 (claims that a foreclosure is
'wrongIul can be tort-based, statute-based, and contract-based).

26

Accordingly, we cannot uphold the demurrer to the wrongful foreclosure claim
based on the absence of an allegation that Glaski tendered the amount due under his loan.
Thus, we need not address the other exceptions to the tender requirement. (See e.g.,
Onofrio v. Rice (1997) 55 Cal.App.4th 413, 424 [tender may not be required where it
would be inequitable to do so].)
G. Remedy oI Setting Aside Trustee`s Sale
Defendants argue that the allegedly ineffective transfer to the WaMu Securitized
Trust was a mistake that occurred outside the confines of the statutory nonjudicial
foreclosure proceeding and, pursuant to Nguyen v. Calhoun (2003) 105 Cal.App.4th 428,
445, that mistake does not provide a basis Ior invalidating the trustee`s sale.
First, this argument does not negate the possibility that other types of relief, such
as damages, are available to Glaski. (See generally, Annot., Recognition of Action for
Damages for Wrongful ForeclosureTypes of Action, supra, 82 A.L.R.6th 43.)
Second, 'where a plaintiII alleges that the entity lacked authority to Ioreclose on
the property, the foreclosure sale would be void. [Citation.| (Lester v. J.P. Morgan
Chase Bank, supra, ___ F.Supp.2d____, [2013 WL 633333, p. *8].)
Consequently, we conclude that Nguyen v. Calhoun, supra, 105 Cal.App.4th 428
does not deprive Glaski of the opportunity to prove the foreclosure sale was void based
on a lack of authority.
H. Causes of Action Stated
Based on the Ioregoing, we conclude that Glaski`s Iourth cause oI action has
stated a claim for wrongful foreclosure. It follows that Glaski also has stated claims for
quiet title (third cause of action), declaratory relief (fifth cause of action), cancellation of
instruments (eighth cause of action), and unfair business practices under Business and
Professions Code section 17200 (ninth cause of action). (See Susilo v. Wells Fargo Bank,

27

N.A. (C.D.Cal. 2011) 796 F.Supp.2d 1177, 1196 |plaintiII`s wrongIul Ioreclosure claims
served as predicate violations for her UCL claim].)
IV. JUDICIAL NOTICE
A. Glaski`s Request Ior Judicial Notice
When Glaski filed his opening brief, he also filed a request for judicial notice of
(1) a Consent Judgment entered on April 4, 2012, by the United States District Court of
the District of Columbia in United States v. Bank of America Corp. (D.D.C. No. 12-CV-
00361); (2) the Settlement Term Sheet attached to the Consent Judgment; and (3) the
federal and state release documents attached to the Consent Judgment as Exhibits F and
G.
Defendants opposed the request for judicial notice on the ground that the request
violated the requirements in California Rules of Court, rule 8.252 because it was not filed
with a separate proposed order, did not state why the matter to be noticed was relevant to
the appeal, and did not state whether the matters were submitted to the trial court and, if
so, whether that court took judicial notice of the matters.
The documents included in Glaski`s request Ior judicial notice may provide
background information and insight into robo-signing
18
and other problems that the
lending industry has had with the procedures used to foreclose on defaulted mortgages.
However, these documents do not directly affect whether the allegations in the SAC are
suIIicient to state a cause oI action. ThereIore, we deny Glaski`s request Ior judicial
notice.

18
Claims of misrepresentation or fraud related to robo-signing of foreclosure
documents is addressed in Buchwalter, Cause of Action in Tort for Wrongful Foreclosure
of Residential Mortgage, 52 Causes of Action Second, supra, at pages 147 to 149.

28

B. DeIendants` Request Ior Judicial Notice oI Assignment
The 'ASSIGNMENT OF DEED OF TRUST recorded on December 9, 2008, that
stated JP Morgan transferred and assigned all beneficial interest under the Glaski deed of
trust to 'LaSalle Bank NA as trustee Ior WaMu |Securitized Trust| together with the
note described in and secured by the Glaski deed of trust was not attached to the SAC as
an exhibit. That document is part oI the appellate record because the respondents`
appendix includes a copy oI deIendants` request Ior judicial notice that was Iiled in June
2011 to support a motion for judgment on the pleadings.
In ruling on deIendants` request Ior judicial notice, the trial court stated that it
could only take judicial notice that certain documents in the request, including the
assignment of deed of trust, had been recorded, but it could not take judicial notice of
factual matters stated in those documents. This ruling is correct and unchallenged on
appeal. Therefore, like the trial court, we will take judicial notice of the existence and
recordation of the December 2008 assignment, but we 'do not take notice oI the truth oI
matters stated therein. (Herrera v. Deutsche Bank National Trust Co., supra, 196
Cal.App.4th at p. 1375.) As a result, the assignment of deed of trust does not establish
that JP Morgan was, in fact, the holder of the beneficial interest in the Glaski deed of
trust that the assignment states was transferred to LaSalle Bank. Similarly, it does not
establish that LaSalle Bank in fact became the owner or holder of that beneficial interest.
Because the document does not establish these facts for purposes of this demurrer,
it does not cure either of the breaks in the two alternate chains of ownership challenged in
the SAC. Therefore, the December 2008 assignment does not provide a basis for
sustaining the demurrer.

29

DISPOSI TI ON
The judgment of dismissal is reversed. The trial court is directed to vacate its
order sustaining the general demurrer and to enter a new order overruling that demurrer
as to the third, fourth, fifth, eighth and ninth causes of action.
Glaski`s request Ior judicial notice Iiled on September 25, 2012, is denied.
Glaski shall recover his costs on appeal.


_____________________
Franson, J.
WE CONCUR:

_____________________
Wiseman, Acting P.J.

_____________________
Kane, J.

30











CERTI F I ED F OR PUBLI CA TI ON

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIFTH APPELLATE DISTRICT

THOMAS A. GLASKI,

Plaintiff and Appellant,

v.

BANK OF AMERICA, NATIONAL
ASSOCIATION et al.

Defendants and Respondents.


F064556

(Super. Ct. No. 09CECG03601)


ORDER GRANTI NG
RE QUEST F OR
PUBLI C ATI ON

As the nonpublished opinion filed on July 31, 2013, in the above entitled matter
hereby meets the standards for publication specified in the California Rules of Court, rule
8.1105(c), it is ordered that the opinion be certified for publication in the Official
Reports.


_______________________
FRANSON, J.

I CONCUR:


_____________________
KANE, J.

INFORMAL OPENING APPELLANT BRIEF
1

IN THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

Case No.13-2220


In re:
NEW CENTURY TRS HOLDINGS, INC.,
A Delaware Corporation, et al., Jointly Administered

Debtors.
________________________________________________

ANITA B. CARR,
Appellant,

v.

ALAN M. JACOBS, as liquidating trustee of the New Century Liquidating Trust,

Appellee,



APPELLANTS INFORMAL APPEAL BRIEF BY ANITA B. CARR

-------------------------------------------------------
Appeal of Orders of the United States District Court
for the District of Delaware
Case No. 12-00288 SLR
and the
Appeal Of Orders Of The United States Bankruptcy
Court for the District of Delaware
Case No. 07-10416 KJC and AP 09-52251 KJC
------------------------------------------------------


Anita B. Carr
11801 Bloomington Way
Dublin, California
Telephone: (925-353-2787)
Fax: (888-703-8165)
Email: ab-carr@att.net

Appellant in Pro Per
THIRD CIRCUIT COURT OF APPEALS CASE NO. 13-2220

TABLE OF CONTENTS
TABLE OF CONTENTS

PAGE
TABLE OF AUTHORITIES i-iv
STATEMENT OF APPEALABILITY 2
INTRODUCTION 2-4
STATEMENT OF THE CASE 4-11
ISSUES PRESENTED/ARGUED 11-21
CONCLUSION 21-22
CERTIFICATE OF WORD COUNT 22
ADDITIONAL ITEMS REQUESTED BY COURT
DOCKET ENTRIES
NOTICE OF APPEAL
ORDERS/MEMORANDUM BEING APPEALED

-NO APPENDIX
i

TABLE OF AUTHORITIES

PAGE
SUPREME COURT CASES
Butz b. Economou, 98, S.Ct. 2894 (1978)...10

Commodity Futures Trading Comm/n v. Weintraub, 471 U.S. 343, at 35-55, 105 S.
Ct. at 1993-94.17

Weintraub, 471 U.S. 343, at 353, 105 S. Ct. at 1993.17

Protective Committee for Independent Stockholders of TMT Trailer Ferry, Inc. v.
Anderson, 390 U.S. 414, 424-25, 88 S.Ct. 1157, 1163-64, 20 L.Ed.2d 1
(1968)..17

Stern v. Marshall,
131 S.Ct. 2594 (2011)...............................................................3,5,7,11,12,13,21,22

Stone v. Powell, 428 US 465 n 35, 96 S.Ct.3037 49 L.Ed. 2d 1067 (1976).11

United States v. Lee, 106 U.S. at 220, 1 S. Ct. at 261 (1882)10
U.S. v. Will, 449 U.S. 200, 216, 101 S. Ct. 471, 66 Ed.2d 392, 406 (1980)11

CIRCUIT CASES
FIRST
Culhane v. Aurora Loan Services, 2013 WL 563374, at *520
SECOND
Primeau v. Granfield, 193 F. 911 (2d Cir. 1911)..18
THIRD
Gaudiosi v. Mellon, 269 F 2d 873 (3d Cir. 1959)..18
ii

FIFTH
Cajun Electric, 119 F. 3d 349 at 355 citing Connecticut Gen. Life Ins. Co. v.
United States Cos. Fin. Corp. (In re Foster Mortgage Corp.), 68 F 3d 914, 917 (5
th

Cir. 1995)18

Cajun Electric, 119 F. 3d at 355-56, citing United States v. AWECO, Inc. (In re
AWECO, Inc.), 725 F.2d 293, 297 (5
th
Cir. 1984) at 29818
SIXTH
Waldman v. Stone, 698 F.3d 910 (6
th
Cir. 2012), cert.denied, 133 S. Ct. 1604
(2013) LEXIS 22230.2,3,7,13

Machine & Fabrication, LLC v. Stone (in re Waldman),No. 10-6497, 2012 WL
5275241 (6th Cir. Oct. 26, 2012)13
NINTH
Executive Benefits Insurance Agency v. Peter H. Arkison, cert. granted(2013)....2
FEDERAL CASES
Boyces Executors v. Grundy, 3 Pet. (28 US) 210 (1830)10

Cohens v. Virginia, 19 U.S. (6 Wheat) 264, 404, 5 L.Ed 257 (1821)..11

Columbia Gulf Transmission Co. v. Louisiana Natural Gas Pipeline, Inc., 1994
WL 693361 at *3 (E.D. La. 1994)..17

Kirschner v. Agoglia, 2012 WL 1622497 (S.D.N.Y. May 9, 2012)12

Nudd v. Burrows, 91 US 426 (1875)10

In re Baird, 112 F. 960, 960 (E.D. Pa. 1902)17,19

In re Blixseth 2011 WL 3274042 (Bankr. D. Mont. Aug. 1, 2011)12

In re Byce 2011 WL 6210938 (D. Idaho ec. 14, 2011)..12

In re Davis, 2011 Bankr. Lexis 3764 (Bankr. W.D. Tenn. Oct. 5, 2011)12

In re Heller Ehrman, LLP, 464 B.R. 348 (N.D. Cal. 2011)12
iii


In re Lyondell Chemical Co., 467 B.R. 712 (S.D.N.Y. 2012)..12

In re Masters, Inc., 141 B.R. 13 (Bankr. E.D.N.Y)17

In re Murchinson, 349 U.S. 133, 136 (1955)..10

In re Neshaminy Office Bldg. Assoc., 62 B.R. 798, 803 (E.D. Pa. 1986)..17

In re Sawyer, 124 U.S. 200 (1888).11

In re Se. Materials, Inc., 467 B.R. 337 (Bankr. M.D.N.C. 2012)12

In re Shenango Group, Inc., 501, F.3d 338 (3d Cir. Sept. 6,
2007).14

In re Teleservices Group, Inc., 456 B.R. 318 (Bankr. W.D. Mich. 2011)12

Squires v. BAC Home Loans Servicing, LP,
2011, U.S. Dist. LEXIS 137581.16

United States v. Throckmorton, 98 US 61, 70 (1878)..10

Uy v. Wells Fargo Bank,N.A. as Trustee, et al, 2011, U.S.D.C. HI,
case no. 1:10-cv-0020414

STATE CASES
Armstrong v. Gresham, 73 Colo. 13 (1923)..18

Dakota Partners v. Glopak, Inc. 2001 ND 168 North Dakota Supreme Court..10

Ellett v. Ellett Virginia 0824-00-2 (2001)..10

In Re Jose Alejandro Penafiel, Relator, No. 05-0213 Texas Supreme Court
(2001)....10

Shinn v. Edwin Yee, Ltd., 57 Haw. 215 (Hawaii 1976)..18

Sinnair v. Le Roy, 44 Wash. 2d 728, 270 P.2d 800 (1954)18

iv

Waring v. Lobdell, 63 Wash. 2d 532, 387 P.2d 979 (1964)..18

OTHER
California Homeowner Bill of Rights (HBOR)
http://oag.ca.gov/hbor............................................................................................8

STATUTES & ARTICLES
Article III of the U.S. Constitution.13

15 U.S.C. 1641(g) Federal Reserve Rule, 74 Fed. Reg. 60143 (November 20,
2009) and Final Rule at 75 Fed Reg. 58489 (September 24, 2010)..15,16

28 U.S.C. 1334 2
28 U.S.C. 157 (b).4
28 U.S.C. 157 (c)(1)11

157(b)(2)(C)7
157(b)(2)(H)12
F.R.C.P 59(e)..6

Miscellaneous
Principal of Fraus Omnia Vitiate-Fraud Vitiates Everything..9

4 Collier on Bankruptcy p 704.01 (15
th
ed 1993).18, 19
9 Collier on Bankruptcy p 9019.03 (15
th
ed 1993).17

Lazarus Estates Ltd v Beasley [1956] 1 QB 702 from the UK.10

Bankruptcy Act of 197813


INFORMAL OPENING APPELLANT BRIEF
2

STATEMENT OF APPEALABILITY
Pursuant to the Federal Rules of Appellate Procedure Title II Appeal from a judgment
order of a District Court-Rule 6 et seq.: Appeal in a bankruptcy case from a final judgment
order or decree of a District Court or Bankruptcy Appeal Panel
(a) Appeal from a Judgment, Order or Decree of a District Court exercising Original
Jurisdiction in a Bankruptcy Case. An appeal to a court of appeals from a final
judgment, order or decree of a district court exercising jurisdiction under 28 U.S.C.
1334 is taken as any other civil appeal under these rules.

This is an Appeal, pursuant to F.R.A.P. Title II et seq., from various orders issued by
the United States District Court for the District of Delaware and the U.S. Bankruptcy Court
in the District of Delaware and the Courts failure to adjudicate the matter with
impartiality, resulting in Carr suffering manifest injustice and denial of her due process
rights.

I. INTRODUCTION
On June 24, 2013 the United States Supreme Court granted a petition for Writ of
Certiorari in the case No. 12-1200 Executive Benefits Insurance Agency v. Peter H.
Arkison, Chapter 7 Trustee of the Estate of Bellingham Insurance Agency, Inc.
In its petition for certiorari, Appellant EBIA points to the conflict between the 9
th

Circuits Bellingham holding and the 6
th
Circuits decision in Waldman v. Stone, 698 F.3d
910 (6
th
Cir. 2012). There the 6
th
Circuit held exactly the opposite: a litigant cannot waive
the constitutional requirement that only Article III judges, not bankruptcy judges, could
exercise the federal judicial power of the United States. The Waldman court found that the
requirement that federal judiciary power be exercised only by Article III district courts is a
structural principal that a litigant did not have power to waive. 698 F. 3d. at 917 (This
requirementis an inseperable element of the constitutional system of checks and
INFORMAL OPENING APPELLANT BRIEF
3

balances that both defines the power and protects the independence of the Judicial
Branch. (citing Stern, 131 S. Ct. at 2608)).
Appellant Carr, in this matter, cited the Waldman case and decision to the USDC in DE
court in her Motion for Reconsideration [D.I. 27 USDC DE] filed 4/4/2013. The USDC in
DE chose to ignore the 6
th
Circuit Appeal decision for Waldman and denied the Motion for
Reconsideration [D.I. 31 USDC DE] and affirming the Bankruptcys Courts Orders and
dismissing the appeal in the USDC of DE [D.I. 26 USDC DE]. The USDC in DE elected
to take the narrow 3
rd
Circuit holding and deny Appellant her due process rights to an
Article III court.
A circuit split has emerged as a result of recent decisions from the Sixth and Ninth
Circuit Courts of Appeals regarding whether a bankruptcy court judge may, with the
consent of the parties, enter a final order on a matter that would normally require final
adjudication by an Article III judge. The split comes less than two years after the U.S.
Supreme Courts landmark decision in Stern v. Marshall, in which it narrowed the authority
of the bankruptcy judges. The recent circuit split has heightened the uncertainty regarding
the extent of constitutional power held by bankruptcy judges, making it likely that, sooner
rather than later, the Supreme Court will again take up and clarify the constitutional role of
the bankruptcy courts. The time is now with the granting of certiorari for the Executive
Benefits Insurance Agency v. Arkison on June 24, 2013 by the U.S. Supreme Court for
case 12-1200.
The two questions presented to the U.S. Supreme Court in case 12-1200 are:
1. Whether Article III permits the exercise of the judicial power of the United States
by bankruptcy courts on the basis of litigant consent, and, if so, whether implied
consent based on litigants conduct, where the statutory scheme provides the
litigant no notice that its consent is required, is sufficient to satisfy Article III.
INFORMAL OPENING APPELLANT BRIEF
4

2. Whether a bankruptcy judge may submit proposed findings of fact and conclusions
of law for de novo review by a district court in a core proceeding under 28 U.S.C.
157(b).
Appellant believes that the case 12-1200 now before the U.S. Supreme Court will
directly impact this appeal case.

II. STATEMENT OF THE CASE
This matter comes before the Third Circuit as a result of an Adversary Proceeding filed
by Appellant in the New Century TRS Holdings, Inc. Chapter 11 bankruptcy on October 5,
2009, alleging, amongst other things, fraudulent conveyance. Appellant had also filed a
proof of claim. Even though Appellant had not been provided notice of the bankruptcy, nor
been provided notice of the bar date, she filed a Motion to Accept Late Filed Claim as
Timely Filed, which was granted on 1/20/2010. The New Century TRS Holdings, Inc.
bankruptcy had been filed on April 2, 2007. Most of the companies within this bankruptcy
had the primary business of brokering and/or originating mortgage loans and either
securitizing pools of loans or bundling pools of loans to sell to other large financial entities,
which in turn may securitize the pools of loans. Each pool of loans may contain nearly a
billion dollars or more of mortgage loans. It is now believed that these so called
mortgages were not true mortgages as homeowners in the USA had gotten used to. These
mortgages were converted immediately into a bond and sold to institutional investors.
Appellant was driven to file the Adversary Proceeding up in the Delaware Bankruptcy
Court ever since the debtor attorneys filed in Appellants California Superior Court case, in
April of 2009 that the debtor was protected by the Chapter 11 Stay. Appellant had named
both debtors Home123 Corporation and New Century Mortgage Corporation in the
California case. Again, Appellant had no prior knowledge that the debtor(s) had declared
INFORMAL OPENING APPELLANT BRIEF
5

bankruptcy. Also unknown at this time were the 2008 Global Orders for Relief From Stay
entered by the bankruptcy court in Delaware (hereinafter DEBKR).
Both Appellants AP and Discovery were stayed by the DEBKR for over 9 months. By
a written order of the DEBKR Appellant was finally allowed to proceed with only informal
discovery but the AP was still stayed. Shortly thereafter the Appellant, who relied on
several letters and statements by the bankruptcy trustee attorneys, that a key document
which is public record at the Alameda County Recorders Office in California was valid
and legal, subsequently settled with the New Century Liquidating Trust for $60.000 in
October of 2010. The settlement agreement was approved by the bankruptcy court.
However, shortly thereafter, Appellant located the former employee-notary of
Home123 Corporation who provided information contrary to what the bankruptcy trustee
attorneys had provided to Appellant, and upon which she had relied.
Effectively, the new evidence conclusively proved that a fraudulent conveyance indeed
had occurred after the bankruptcy was filed and further indicia of fraud.
Appellant filed on December 10, 2010 a Motion to Stay the Dismissal of the AP and for
an Evidentiary Hearing. The settlement agreement of 2010 (pre Stern) provided that, to
the extent a dispute arose between the parties at any time after the execution of the
settlement agreement, the Parties consent and subject themselves to the jurisdiction of the
U.S. Bankruptcy Court, District of Delaware in front of the Honorable Judge Kevin J.
Carey to resolve such dispute(s).
There was no scheduling order and Appellant was not allowed discovery on the
fraudulent inducement to settle matter, which was much more than a mere dispute,
The fraud and fraudulent inducement to settle matter overlays the fraudulent
conveyance matter. Appellant believes that the original claim against the debtor may have
been settled by virtue of the settlement, which she asked to rescind or set aside in lieu of
INFORMAL OPENING APPELLANT BRIEF
6

Appellant executing a note for $60,000 should the settlement be set aside. Appellant is not
sure where or what account the $60,000 was paid from by the Trustee.
Appellant does not believe the $60,000 was paid as a claim from any distribution for
creditors. Appellant does recall that at one point she was in a group of 5 (homeowner-
borrower-creditors) for which the DEBKR had set aside $1.5 million dollars to settle
claims. This was a reserve fund. Appellant does not believe the $60,000 came from the
reserve fund and that is not reflected as such on any of the financial statements filed by the
appointed bankruptcy trustee.
Appellant Carr never intended to give up her rights to an Article III Court, a jury trial or
her right to discovery and due process. Appellant disputes, and it states in her pleadings,
that the fraudulent inducement to settle matter is NOT a core proceeding of bankruptcy.
Appellant never agreed to final judgment orders by the bankruptcy court and it so states in
her pleadings.
If the claim was settled by the settlement, then the fraudulent inducement to settle
matter is a private right and should only be adjudicated by an Article III court. It is not a
core proceeding.
The DEBKR denied the request for stay. Appellant filed two timely Motion for
Reconsiderations (hereinafter MFR) which were denied. Appellant comported to the
F.R.C.P. and local rules for MFRs. The Appellees counter-statement raised two issues on
appeal: (1) whether the bankruptcy court properly denied appellants first motion for
reconsideration pursuant to F.R.C.P. 59(e); and (2) whether the bankruptcy court properly
denied appellants second motion for reconsideration pursuant to F.R.C.P 59(e), which
states (e) Motion to Alter or Amend a Judgment. A motion to alter or amend a judgment
must be filed no later than 28 days after the entry of the judgment.
The USDC of Delaware court states in the Order of March 25, 2013 that Appellant had
timely filed both Motions for Reconsideration.
INFORMAL OPENING APPELLANT BRIEF
7

Appellant hereby challenges that Article III of the U.S. Constitution does not allow the
bankruptcy court to enter judgment and it does not matter if it is a core matter or a non-core
matter. Article III trumps bankruptcy law. Stern states Although we conclude that
157(b)(2)(C) permits the Bankruptcy Court to enter final judgment on Vickies
counterclaim, Article III of the Constitution does not. Stern v. Marshall, No. 10-179, 564
U.S. ___ (June 23, 2011).
Appellant filed timely notice of appeal to the USDC in DE and her appeal was
dismissed and the court affirmed the bankruptcy courts opinions and orders. Appellant
filed a Motion for Reconsideration in the USDC of DE, citing in particular the new Sixth
Circuit Appeal Court decision in Waldman v. Stone. The Motion for Reconsideration was
denied. The USDC in DE has gotten the facts wrong surrounding the Assignment.
The bankruptcy court had the right to approve the settlement but not to hear
a matter of fraud and fraudulent inducement to settle matters. Fraudulent inducement to
settle is not a core proceeding and since Stern v. Marshall No. 10-179 was decided by the
U.S. Supreme Court on June 23, 2011 it is clear that the Appellants matter should be heard
in an Article III court. The settlement cannot be derived from fraud and it should be set
aside. The bankruptcy court failed to allow Carr the opportunity for discovery to state her
case or review evidence she presented to bar with impartiality, thereby denying Appellant
Carr due process. The dispute is not settled. The Trust has unclean hands.
Appellant Carr continues to reside in her home which she has owned since 1999 but
due to a Trustees Sale in October of 2008, the home is in the name of a banking entity and
this is a direct and proximate result of fraudulent & illegal actions taken in the New
Century bankruptcy case. California is a non-judicial foreclosure state and as such heavy
weight and law is afforded the recordation of documents, including any Assignments.
When Home123 Corporation executed and notarized the Deed Assignment for the
Appellants property, after the bankruptcy was declared, it did so illegally and fraudulently.
INFORMAL OPENING APPELLANT BRIEF
8

Appellants loan to Home123 Corporation was paid in full in 2006, yet they effectuated a
wrongful foreclosure action in California. Appellant has suffered great harm already,
including, but not limited to, negative effects to her already compromised health.
Appellant has been disabled since 2001. Appellant stands to lose any equity she has in her
home, including funds she invested for a major 3 room remodel with a custom kitchen and
expansion of sq. footage. Appellant stands to lose her down payment. Appellants credit
has been severely and probably irreversibly damaged.
CALIFORNIA ATTORNEY GENERAL KAMALA HARRIS AND THE
NATIONAL MORTGAGE SETTLEMENT AND HOBR
Appellant is a member of the AG of Californias National Mortgage Settlement class of
homeowners and is entitled to restitution for mortgage abuses, including robo-signing, and
Appellant still retains all rights to pursue litigations in the courts.
Additionally, the California Homeowner Bill of Rights (HOBR), which became
effective on January 1, 2013 now protects Appellant. AG Harris sponsored the HOBR and
Governor Jerry Brown signed it into law.
MOTIVE
The motive for the bankruptcy Trust to fraudulently induce Appellant to settle and to
provide to her false information, upon which she relied, was to mislead Appellant into
thinking that all was hunky dory (ok) with the alleged sale/transfer/assignment of
Appellants note and deed and that indeed her alleged loan was sold to Chase which then
securitized it in a bond offering titled JPMAC2006-NC1, which was supposed to be an IRS
REMIC securities trust which passes through revenue streams. However, due to strict NY
trust laws and strict IRS REMIC laws, Appellants note and deed never comported to meet
the legal requirements of those laws, especially not for the IRS REMIC laws. Appellant
had discovered massive fraud and maintains that the bankruptcy Trust is involved in
perpetrating a tax evasion scheme with violations of the IRS REMIC laws and other
INFORMAL OPENING APPELLANT BRIEF
9

Federal and State laws. Appellant maintains that there is bankruptcy fraud in DEBKR and
that assets are hidden in entities not known to the bankruptcy court. Assets, such as
homeowner-borrowers mortgage notes and deeds.
Recently in 2013, 17 large banking entities such as Goldman Sachs, JPMorgan Chase,
Wells Fargo, Morgan Stanley etc., have subpoenaed records and files from the debtor(s),
including records and files and data about mortgage loans. This is a result of a large FHFA
lawsuit against those banking entities for fraud and the court in that matter wants the
banking entities to re-underwrite the mortgage loans to determine who is responsible. That
court need not look much further than the debtors, New Century Mortgage and Home123
Corporation.
Additionally, the debtors have been involved in numerous SEC lawsuits over securities
violations (some based upon the mortgage loan underwriting business) and at one point just
prior to declaring Chapter 11, the debtors were under Federal Grand Jury Investigation by
a federal prosecutor in California. Testimony has been given to the U.S. Congress on the
fraudulent actions taken by the debtors and their role in the Great Financial Crisis in the
history of the world. These companies were a prime contributor for causation of that Great
Financial Crisis. These companies have placed into extreme jeopardy federal and state
pension plans, as well as private pension plans.
The bankruptcy Trust had motive to settle with Appellant. Appellant was close to
exposing the massive fraud.
Appellant Carr respectfully presents to the Third Circuit Court of Appeals these issues
on appeal. Appellant Carr believes the lower Court has incorrectly dismissed the matters at
hand.
FRAUDULENT INDUCEMENT VITIATES A CONTRACT

The centuries old legal principal, Fraus Omnia Vitiate, Fraud vitiates everything
applies in this matter. One cannot have a settlement based on fraud.
INFORMAL OPENING APPELLANT BRIEF
10

Nudd v. Burrows, 91 US 426 (1875), Fraud destroys the validity of everything into
which it enters. Boyces Executors v. Grundy, 3 Pet. (28 US) 210 (1830), Fraud vitiates
everything. United States v. Throckmorton, 98 US 61, 70 (1878) Fraud vitiates the most
solemn contracts, documents and even judgments.
For those of you think this legal maxim does not apply now that the US Constitution is a
living document of no fixed meaning, here are some more recent citations from around the
US and the world:
Ellett v Ellett Virginia 0824-00-2 (March 13, 2001) where a property settlement is over
turn and specifically cites Throckmorton. Dakota Partners v. Glopak, Inc, 2001 ND 168
North Dakota Supreme Court . In Re Jose Alejandro Penafiel, Relator, No. 05-0213

Texas
Supreme Court (2001) "Texas law holds that fraud vitiates every transaction tainted by the
fraud". Lazarus Estates Ltd -v- Beasley [1956] 1 QB 702 from the UK.
Appellant has been discriminated against and treated with unfairness, bias and
prejudice by this Court and the opposing counsel. An uninterested, lay person, would
question the partiality and neutrality of this Court.
Fairness of course requires an absence of actual bias in the trial of cases. But our
system of law has always endeavored to prevent even the probability of unfairness. In re
Murchinson, 349 U.S. 133, 136 (1955)
No man in this country is so high that he is above the law. No officer of the law may
set that law at defiance with impunity. All the officers of the government from the highest
to the lowest, are creatures of the law, and are bound to obey it. Butz v. Economou, 98
S.Ct. 2894 (1978); United States v. Lee, 106 U.S. at 220, 1 S.Ct. at 261 (1882)
Further it is the obligation of every Judge to honor, abide by, and uphold not only the
Constitution and laws of the State, but they are bound by the laws and Constitution of the
United States as well.
INFORMAL OPENING APPELLANT BRIEF
11

State courts, like federal courts, have a constitutional obligation to safeguard personal
liberties and to uphold federal law. Stone v Powell, 428 US 465, 483 n 35, 96 S. Ct 3037,
49 L Ed. 2d 1067 (1976)
Any judge who does not comply with his oath to the Constitution of the United States,
wars against that Constitution and engages in violation of the Supreme Law of the Land. If
a judge does not fully comply with the Constitution, then his orders are void, In re Sawyer,
124 U.S. 200 (1888), he is without jurisdiction, and he/she has engaged in an act or acts of
treason.
U.S. v. Will, 449 U.S. 200, 216, 101 S. Ct. 471, 66 Ed.2d 392, 406 (1980); Cohens v.
Virginia, 19 U.S. (6 Wheat) 264, 404, 5 L.Ed 257 (1821)
The dispute is unresolved. The fraud and fraudulent conveyance matter is not
resolved. The fraudulent conveyance matter impacts the property rights of Appellant in
California. Appellant had been denied her due process rights and fairness in this circuit.
The USDC in DE has gotten the facts wrong.
III. ISSUES PRESENTED
a. Whether the Court committed an error of law or an abuse of discretion in its
determination that the fraudulent inducement to settle matter was a core
proceeding, which should meet Congress definition of a core proceeding and
arises under or arises in title 11, [***21] Bankruptcy Code. The Appellant did
dispute that it was not a core proceeding in the bankruptcy court.

Statutory Gap Issue
28 U.S.C. 157(c)(1) Provides that the bankruptcy judge is to submit proposed
findings of fact and conclusions of law to the district court for a proceeding that is not a
core proceeding.

Going forward, what about statutorily core proceedings where, under Stern, the
bankruptcy court may not enter a final judgment?

INFORMAL OPENING APPELLANT BRIEF
12

By its terms, 157(c)(1) should not apply. There is no other statutory provision that
gives the bankruptcy court authority to submit proposed findings of fact and conclusions of
law. Arguably, the only thing a bankruptcy court can do is recommend to the district court
that it withdraw the reference under 157(s), on the grounds that the bankruptcy court cannot
do anything else. Most courts have determined that a bankruptcy court can issue proposed
findings and conclusions in such proceedings. Kirschner v. Agoglia, 2012 WL 1622497
(S.D.N.Y. May 9, 2012). In re Blixseth 2011 WL 3274042 (Bankr. D. Mont. Aug. 1,
2011). In re Byce 2011 WL 6210938 (D. Idaho Dec. 14, 2011).

Fraudulent Transfers/Preferences
One of the most debated issues in the post-Stern world is whether fraudulent transfers
and preferences against non-creditors (which are also listed as core proceedings) may
constitutionally be decided by the bankruptcy courts. Most courts have concluded that, in
light of Stern and prior Supreme Court precedent (Granfinanciera), Article III does not
permit a bankruptcy court to enter final judgment in such actions absent consent because
they involve private rights. In re Lyondell Chemical Co., 467 B.R. 712 (S.D.N.Y. 2012).
In re Se. Materials, Inc., 467 B.R. 337 (Bankr. M.D.N.C. 2012). In re Davis, 2011 Bankr.
Lexis 3764 (Bankr. W.D. Tenn. Oct. 5, 2011). In re Teleserivces Group Inc., 456 B.R. 318
(Bankr. W.D. Mich. 2011). In re Heller Ehrman, LLP, 464 B.R. 348 (N.D. Cal. 2011).

The Court's opinion in Stern v. Marshall at pages 33-34 makes pretty clear that Section
157(b)(2)(H)which provides that fraudulent conveyance actions are "core
proceedings"is also unconstitutional. ("We see no reason to treat Vickie's counterclaim
any differently from the fraudulent conveyance action in Granfinanciera.")

As Stern made clear, and as the court of appeals recognized, courts must honor
Congress's designation of proceedings as core or non-core. 131 S. Ct. at 2604-2605; Pet.
App. 24-25a.


b. Whether the Court committed an error of law or an abuse of discretion by
ignoring precedent set by the United States Supreme Court in Stern v. Marshall,
INFORMAL OPENING APPELLANT BRIEF
13

131 S.Ct. 2594 (2011), removing the power of the United States Bankruptcy
Court to hear the fraudulent inducement of settlement matter and allowing the
Appellant her due process right to a jury trial in an Article III court.

In Stern v. Marshall, 131 S. Ct. 2594 (2011) it was determined that bankruptcy courts
will no longer be able to enter final judgments "on a common law cause of action, when the
action neither derives from nor depends upon any agency regulatory regime ... [and] is not
resolved in the process of ruling on a creditor's proof of claim." (Op. at 29, 38.)


c. Whether the Court committed an error of law or an abuse of discretion in its
decision on the Appellants Motion for Reconsideration, to the USDC in DE, by
failing to consider:

In Waldman v. Stone, 2012 WL 5275241 (6th Cir. Oct. 26, 2012), Waldman rejects any
notion of waiver and effectively enables a party to object to a bankruptcy courts
constitutional authority at any time, even for the first time on appeal. The Sixth Circuit
has made it clear that parties may not waive the right to an Article III judge. The appeal in
the USDC of Delaware was pending when this decision came down from the 6
th
circuit.
The Sixth Circuit Court of Appeals in Machine & Fabrication, LLC v. Stone (In re
Waldman), No. 10-6497, 2012 WL 5275241 (6th Cir. Oct. 26, 2012), held that the
bankruptcy court did not have the constitutional authority to enter a final order on fraud
claims.



d. Whether the Court committed an error of law or an abuse of discretion in its
dismissal of the appeal by failing to correctly consider or interpret Northern
Pipeline, which considered whether bankruptcy judges serving under the
Bankruptcy Act of 1978 -- appointed by the President and confirmed by the
Senate, but lacking the tenure and salary guarantees of Article III -- could
"constitutionally be vested with jurisdiction to decide [a] state-law contract
claim" against an entity [*2610]. The Court concluded that assignment of such
state law claims for resolution by those judges violates Art. III of the
Constitution." Id., at 52, 87, 102 S. Ct. 2858, 73 L. Ed. 2d 598 (plurality
opinion); id., at 91, 102 S. Ct. 2858, 73 L. Ed. 2d 598 (Rehnquist, J., concurring
in judgment).


INFORMAL OPENING APPELLANT BRIEF
14

e. Whether the Court committed an error of law or an abuse of discretion in its
opinion on the bankruptcy courts reinterpretation of the 2008 Global Orders in
2011 after Carr brought to the Delaware Bankruptcy Courts attention the
Hawaii Federal District Court Judge Alan C. Kays Opinion in the Eustaquio N.
Uy case Civ. No. 10-00204 ACK-RLP decided in 2011.

In the precedential opinion, the U.S. Court of Appeals for the Third Circuit, in a case of
first impression, adopted a standard form reviewing a bankruptcy courts own
interpretation of its own order. If the appeal concerns a bankruptcy courts interpretation of
its own order, the Court held that an abuse of discretion standard should be applied. In re
Shenango Group, Inc., 501 F.3d 338 (3d Cir. Sept. 6, 2007).
Both 2008 Global Orders for Relief from Stay by the bankruptcy court are ambiguous
as to whether the orders are for only large banking entity Creditors or for all, including
homeowner-borrower-creditors. The homeowner-borrower-creditors were never provided
with the bankruptcy notice nor the bar date notice. As such the homeowner-borrower-
creditors, including Appellant, were not given equal access to the law. Appellant was not
able to represent herself in the bankruptcy court to defend her property, especially in any
motion to lift stay matters. Additionally, Appellant was not adequately represented on any
Creditors committee nor was she allowed to be part of any Plan or its confirmation for the
bankruptcy.

The 2008 Global Orders for Relief from Stay seemingly read as if they would apply to all
persons and entities. However, when brought to the attention of the bankruptcy court by
Appellant, the court immediately re-interpreted those 2008 Global Orders for Relief from
Stay. Essentially, slamming the barn door shut after the horses got out. The re-
interpretation also came after a Federal Judge in Hawaii had specifically cited the 2008
Global Orders of the Delaware bankruptcy court in the Uy case. It is unknown how many
other courts may have cited the 2008 Global Orders, before the bankruptcy courts 2011 re-
interpretation and used the original Global Orders in a contrary manner than the bankruptcy
court had intended but was careless to write an unambiguous order. Again, no homeowner-
borrower-creditors were up in the bankruptcy court (due to lack of notification) in order to
defend or respond to the Global Orders for Relief from Stay. This is unfairness and one-
INFORMAL OPENING APPELLANT BRIEF
15

sidedness. Homeowner-borrower-creditors were not provided equal access under the law
and this includes Appellant.
Appellant maintains that the 2008 Global Orders would have allowed her to continue
her California fraud & RICO case against New Century Mortgage and Home123
Corporation which she filed in March of 2009. In Appellants California case in April of
2009, the debtor New Century Mortgage and Home123 Corporation filed that they were
protected by the Delaware bankruptcy stay, which is in complete contradiction to the 2008
Global Orders for Relief from Stay.
There is ambiguity and confusion and Appellant seeks this courts review of the
bankruptcy courts 2011 re-interpretation of those 2008 Global Orders [D.I. 8595 & 8892
DEBKR] as well as the context of the 2008 Global Orders and whether they do mean that
any party is permitted to exercise its rights in any court.
Could Appellant have proceeded in her California Superior Court Case in 2009 against
the named defendants Home123 Corporation and New Century Mortgage Corporation with
the allegations of Fraud, Civil RICO, TILA violations and violations of California 17200
etc., based on those 2008 Global Orders? If that is the case, then why did the debtor
attorneys file in the Appellants California case that the debtor(s) were protected by the
automatic stay of Chapter 11.this in April of 2009.
In particular, the 9/3/08 Amended Global Order for Relief from Stay or Termination
Order [D.I. 8892 DEBKR] provides that the automatic stay and/or any injunction(s)
triggered by New Century's bankruptcy "are terminated[] with respect to any interest in real
property which may now be or some time in the past have been deemed to be property of
[New Century] ('Real Property'). Any party is hereby permitted to exercise its rights, if any,
under applicable non-bankruptcy law against any Real Property . . . ." 9/3/08 Termination
Order at 2. It also provides that "[t]he relief granted in this order shall apply without further
order of [*5] the Court. Any party seeking to exercise its non-bankruptcy rights and
remedies against Real Property shall not file a motion for relief from the automatic stay . . .
." Id. at 3.

f. Whether the Court committed an error of law or an abuse of discretion by
denying Carr her due process rights regarding the new codified TILA 15 U.S.C.
1641(g) Federal Reserve Rule, 74 Fed. Reg. 60143 (November 20, 2009) and
INFORMAL OPENING APPELLANT BRIEF
16

Final Rule at 75 Fed Reg. 58489 (September 24, 2010), whereby the NCLT was
obligated to disclose to Carr the identity of the true creditor. Carr has asked
repeatedly for the identity of the true creditor but still does not know who the
creditor is.

Squires v. BAC Home Loans Servicing, LP, 2011, U.S. Dist. LEXIS 137581 is the only
known case dealing with the new TILA Rule to the Law.
The Federal Reserve Board has issued an Interim Final Rule which you can review at
the following website:
http://www.federalreserve.gov/reportforms/formsreview/RegZ_20091120_ifr.pdf
Key points have been clarified by the Interim Rule: whoever is identified as the owner
of the loan must be the actual owner (and not any appointed loan servicer agent); If there
are multiple alleged owners (covered persons) in regard to a mortgage loan, identifying
information must be provided for each covered person, and the covered persons can decide
amongst themselves which entity will actually provide the notice to the borrower; The date
of acquisition of the loan (which triggers the 30 day notification rule) is the date of the
acquisition that is recognized in the books and records of the covered person; Other rules
and clarifications are also set forth in the Interim decision of the Federal Reserve Board.

g. Whether the Court committed an error of law or an abuse of discretion by
dismissing the Petition of Writ of Mandamus as frivolous and inappropriate.

Appellant was verbally ordered by the bankruptcy court to not file any pleadings
once she filed the Notice of Appeal. Effectively Appellant could not enter an objection
in the bankruptcy court to the New Century Liquidating Trusts pleadings to destroy
and abandon files and data. Appellant only, at that time, had a stayed California case
which thus precluded her from doing any subpoenas for the files and data. Appellant
had no other recourse but to file the Petition of Writ of Mandamus in order to attempt to
at the very least preserve the required files, information and data or at most, get the
files, information and data. The Courts painted Appellant into a corner and she had no
other recourse. Once the data, files and information is destroyed..it is gone forever.

INFORMAL OPENING APPELLANT BRIEF
17

h. Whether the Court committed an error of law or an abuse of discretion by
dismissing the appeal without considering the approved bankruptcy plan and the
fact that fraud and fraudulent inducement to settle is inconsistent with the
bankruptcy code and not in the approved bankruptcy plan?

11 USC 704 - Duties of trustee
The policy behind Rule 9019, as articulated by several courts, is to prevent debtors
from entering into secret agreements and to provide interested creditors the right to weigh
and review the proposed settlement and, if necessary, object. See id., citing Columbia Gulf
Transmission Co. v. Louisiana Natural Gas Pipeline, Inc., 1994 WL 693361 at * 3 (E. D.
La. 1994); In re Masters, Inc., 141 B.R. 13 (Bankr. E.D.N.Y. 1992) (stating that the clear
purpose of Rule 9019 is to prevent the making of concealed agreements which are
unknown to the creditors and unevaluated by the court.).
Further, the purpose of Rule 9019 is to minimize litigation and expedite the
administration of a bankruptcy estate, "[c]ompromises are favored in bankruptcy." 9 Collier
on Bankruptcy p 9019.03 (15th ed.1993). The standard of review has been defined by
Protective Committee for Independent Stockholders of TMT Trailer Ferry, Inc. v.
Anderson, 390 U.S. 414, 424-25, 88 S.Ct. 1157, 1163-64, 20 L.Ed.2d 1 (1968), where four
criteria exist that a bankruptcy court should consider in striking the balance in the
administration of the estate: (1) the probability of success in litigation; (2) the likely
difficulties in collection; (3) the complexity of the litigation involved, and the expense,
inconvenience and delay necessarily attending it; and (4) the paramount interest of the
creditors. See In re Neshaminy Office Bldg. Assocs., 62 B.R. 798, 803 (E.D.Pa.1986).
However, a trustee has a fiduciary relationship with all creditors of the estate. See
Commodity Futures Trading Comm'n v. Weintraub, 471 U.S. 343, at 354-55, 105 S.Ct. at
1993-94. Indeed, under the Code a trustee must investigate all sources of income for the
estate and "collect and reduce to money the property of the estate." 11 U.S.C. 704(1). He
has the duty to maximize the value of the estate, Weintraub, 471 U.S. at 353, 105 S.Ct. at
1993, and in so doing is "bound to be vigilant and attentive in advancing [the estate's]
interests." In re Baird, 112 F. 960, 960 (E.D.Pa.1902). In sum, "it is the trustee's duty to
INFORMAL OPENING APPELLANT BRIEF
18

both the debtor and the creditor to realize from the estate all that is possible for distribution
among the creditors." 4 Collier on Bankruptcy p 704.01 (15th ed.1993).
Lastly, as noted by the Trustee and in other circuits, Bankruptcy Court approval
of a settlement or compromise under Rule 9019(a) should only be given if the settlement is
fair and equitable and in the best interest of the estate. Cajun Electric, 119 F.3d 349 at
355, citing Connecticut Gen. Life Ins. Co. v. United Cos. Fin. Corp. (In re Foster Mortgage
Corp.), 68 F.3d 914, 917 (5th Cir. 1995). The terms fair and equitable are treated as
terms of art, meaning that senior interests are entitled to full priority over junior ones.
Cajun Electric, 119 F.3d at 355-56, citing United States v. AWECO, Inc. (In re AWECO,
Inc.), 725 F.2d 293, 297 (5th Cir.1984) at 298.
In Shinn v. Edwin Yee, Ltd. 57 Haw. 215 (Hawaii 1976) where the issue was illegality
of the method of obtaining the construction loan, the court stated:
Illegality, if of a serious nature, need not be pleaded. .. If it appears in
evidence the court of its own motion will deny relief to the plaintiff. The
defendant cannot waive the defense if he wishes to do so. Indeed, if the court
suspects illegality, it may examine witnesses and develop facts not brought out by
the parties, and thereby establish illegality that precludes recovery by the plaintiff.
. . . Restatement of Contracts s 600, Comment a; Sinnar v. Le Roy, 44 Wash.2d
728, 270 P.2d 800 (1954).

Even if the issue of illegality has not been pursued in the trial court, an appellate
court may itself raise the issue and remand for findings on the point, Waring v. Lobdell, 63
Wash.2d 532, 387 P.2d 979 (1964), or if further findings are not necessary, the appellate
court may order the case dismissed though the issue of illegality was not raised in the trial
court. Gaudiosi v. Mellon, 269 F.2d 873 (3d Cir. 1959); Primeau v. Granfield, 193 F. 911
(2d Cir. 1911); Armstrong v. Gresham, 73 Colo. 13 (1923).

The Trustees settlement agreement was based on misinformation and apparent
misunderstanding of the issues. Therefore, the Trustees settlement agreement with
INFORMAL OPENING APPELLANT BRIEF
19

Appellant Carr should be set aside and the Trustee given more time to review and evaluate
the significant exhibits and issues presented within the Appellant- Creditors Adversary
Proceeding as he has the duty to maximize the value of the estate, Weintraub at 1993, and
in so doing is "bound to be vigilant and attentive in advancing [the estate's] interests." In re
Baird, 112 F. 960, 960 (E.D.Pa.1902). In sum, "it is the trustee's duty to both the debtor
and the creditors to realize from the estate all that is possible for distribution among the
creditors." 4 Collier on Bankruptcy p 704.01 (15th ed.1993).

i. Whether the Court committed an error of law or an abuse of discretion by
dismissing the appeal by opining that the nature of her fraud claims were well-
known to appellant at the time she signed the settlement agreement, there is no
basis for a claim of fraudulent inducement to settle. When the former notary-
employee had not yet been located yet and was not located until late November
of 2010 by Appellant. The former notary-employee, once located after the
settlement by Appellant, provided brand new information on newly discovered
fraud and fraudulent activities which is new evidence. The subsequent
Affidavit from said notary-employee is new evidence as well. Appellant does
not have a crystal ball in which to discover the extent of the frauds. Even to this
day, the Appellant is discovering still more new fraud.

The USDC in DE still does not understand the nuances of the matter at hand.
Appellant was reassured by the New Century Liquidating Trust counsels, both at
hearings and in settlement offer letters, that the Assignment in question was valid and
legal. Appellants reservations about the validity of the Assignment were alleviated by
what the counsels stated. Thus, Appellant relied on that information and proceeded to
settle.
Subsequent to the settlement, Appellant discovered new evidence which solidly
proved that the New Century Liquidating Trust counsels had not only fraudulently
induced her to settle, but also voided the illegal Corporation Deed of Assignment for
the Appellant property. In the fraudulent conveyance matter brought to the bankruptcy
court in the Adversary Proceeding, which underlays the fraudulent inducement to settle
matter, the debtor executed the assignment within several months of declaring
bankruptcy and without the courts approval and without the trustee being involved and
all prior to the confirmation of the bankruptcy plan. Appellant respectfully reminds this
INFORMAL OPENING APPELLANT BRIEF
20

court that she had never been notified of the bankruptcy filing nor the bar date notice
and as such, was not represented by any Creditors Committee nor did she participate in
any Plan.

The New Century Liquidating Trusts counsels insist that the Appellant loan was
sold in February 2006 to a Chase bank, however no evidence has ever been provided to
substantiate this wild claim. And even if that were to be the case, then how did it come
to be, that the debtor executed and notarized an Assignment in May of 2007, several
months after the debtor bankruptcy was declared in April of 2007. It was the debtor
employees who executed and notarized an Assignment of both the Note and Deed in
May of 2007.
Thus, it is either this for the debtor:
A mortgage assignment executed by an assignor who has no interest to assign or
"no authority to make an assignment to a particular assignee" is thus void and does not
confer upon the assignee the legal status required to exercise the power of sale.
Culhane, 2013 WL 563374, at *5. Additionally the debtor assignment does not go to
Chase, it goes to another banking entity. This is in complete contradiction to the
assertions of the trustees counsels.
Or this for the debtor:
A fraudulent conveyance.
The dispute and the fraud has not been resolved. One cannot have a settlement based upon
fraud. The New Century Liquidating Trust is perpetrating fraud upon fraud and Appellant
has not been allowed her due process rights and has been denied access to Article III
courts.
Appellant has been denied fairness in this matter and she has not been equitably treated.
Appellants property is at stake here and the courts appear to not want to uphold the laws.
There is a fraudulent document (done by the debtor) which is indicia of fraud and a
fraudulent conveyance and then fraudulent inducement to settle to cover everything up.
The Trustee has repeatedly complained in open court that he did not wish to have to re-
calculate the distributions to date. Of course, the large banking entity-creditors received
INFORMAL OPENING APPELLANT BRIEF
21

the bulk of the distributions since the homeowner-borrower-creditors were never notified of
the bankruptcy or the bar date.
Appellants settlement with the bankruptcy trust in 2010 was not fair and not equitable
and based upon fraud and a fraudulent inducement to settle.
IV. APPEARANCE OF IMPROPRIETY

Even after citing the California penal codes and other California and Federal law
violations to the DEBKR, the court states to Appellant I dont see any crime here. Yet,
the Alameda County District Attorney began an investigation and called Appellant several
times to tell her the case had been turned over to the FBI and to Kamala Harris(California
AG) Fraud Task Force.
Of course, the Delaware bankruptcy court is the same court which states during the first
day hearing of the New Century bankruptcy 07-10416 in Exhibit F (p.126) from April 3,
2007 the following:
As one of my colleagues in another district says, If you want to rent the courthouse,
you have to pay the rent, and thats what I expect.
Persons with very little court exposure and many attorneys would take that to mean the
court wants to be paid.perhaps under the table. This gives an appearance of impropriety.
This was stated to the attorneys for the big banking entities.not the homeowner-
borrowers.

V. CONCLUSION
Appellant hereby states that Article III of the U.S. Constitution does not allow the
bankruptcy court to enter judgment and it does not matter if it is a core matter or a non-core
matter. Article III trumps bankruptcy law. Stern states Although we conclude that
157(b)(2)(C) permits the Bankruptcy Court to enter final judgment on Vickies
counterclaim, Article III of the Constitution does not. Stern v. Marshall, No. 10-179, 564
U.S. ___ (June 23, 2011).
INFORMAL OPENING APPELLANT BRIEF
22

Appellant hereby states that she can never give up her rights to an Article III court, a
jury trial, discovery and due process.
Appellant contends that any judgments entered by the bankruptcy are void due to lack
of jurisdiction and in contravention to the U.S. Supreme Court ruling in Stern v. Marshall
No. 10-179 (2011) and in contravention to the U.S. Constitution.

Appellant respectfully prays for relief from the Third Circuit Court of Appeals.

Should the Appeal Court determine to refer the matter for trial to a U.S.D.C. then
Appellant respectfully requests it be referred to the U.S.D.C in Northern District of
California, where Appellant resides.

Dated: June 30, 2013 Respectfully Submitted,
/s/Anita B. Carr
Anita Carr, Appellant in pro per



CERTIFICATE OF WORD COUNT

The foregoing brief complies with the type-volume limitation of Fed. R. App. P.
32(a)(7)(B). The brief contains 7,278 words in the entire document, excluding the parts of the
brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii) (e.g., the title page, statement, certifications
of counsel, and tables of content and authorities).

This brief also complies with the typeface requirements of Fed. R. App. P. 32(a)(5) and
the type style requirements of Fed. R. App. P. 32(a)(6). The brief has been prepared in a
proportionately spaced typeface in 12-point Times Roman font.

I certify that the Appellants Informal Opening Brief is in compliance with Rule
32(a)(7)(B) and (C).

Dated: June 30, 2013


/s/Anita B. Carr
Anita B. Carr, in pro per
8
APPELLANTS ISSUES ON APPEAL AND DESIGNATION OF RECORD

III. DESIGNATION OF RECORD ON APPEAL
Anita B. Carr designates the following from U.S.D.C. 12-00288(SLR) docket items as
well as all docket items and transcripts from the Bankr. D. Del., Case No. AP-09-52251
and 07-10416 KJC. The designation of a docket item is intended to include all exhibits
and/or attachments thereto.

Date Filed # Docket Text
05/07/2013 35 NOTICE of Docketing Record on Appeal from USCA for the Third Circuit
re 32 Notice of Appeal (Third Circuit) filed by Anita B. Carr. USCA Case
Number 13-2220. USCA Case Manager: Pamela (DOCUMENT IS
RESTRICTED AND CAN ONLY BE VIEWED BY COURT STAFF) (pb,
) (Entered: 05/07/2013)
05/04/2013 34 MOTION for Extension of Time to file designation of record and issues on
appeal to 3rd circuit - filed by Anita B. Carr. (Carr, Anita) (Entered:
05/04/2013)
04/30/2013 33 TRANSCRIPT REQUEST - filed by Anita B. Carr. TRANSCRIPT NOT
NEEDED. (cla, ) (Entered: 04/30/2013)
04/24/2013 32 NOTICE OF APPEAL of 26 Terminated Case, Memorandum and Order,
31 Memorandum and Order . Appeal filed by Anita B. Carr. (Carr, Anita)
(Entered: 04/24/2013)
04/17/2013 31 MEMORANDUM ORDER - denying 27 MOTION for Reconsideration,
denying 28 Application for Writ of Mandamus. Signed by Judge Sue L.
Robinson on 4/17/13. (mdb) (Entered: 04/17/2013)
04/16/2013 30 Proof of Service - re 27 MOTION for Reconsideration. (mdb) (Entered:
04/17/2013)
04/16/2013 29 Proof of service - re 28 Application for Writ. (mdb) (Entered: 04/17/2013)
04/09/2013 28 APPLICATION for Writ of Mandamus Petition Emergency by Anita B.
Carr. (Carr, Anita) (Entered: 04/09/2013)
04/04/2013 27 MOTION for Reconsideration - filed by Anita B. Carr. (Carr, Anita)
(Entered: 04/04/2013)
03/25/2013 26 MEMORANDUM ORDER - affirming the Bankruptcy Court's Orders. The
appeal is dismissed. ***Civil Case Terminated. Signed by Judge Sue L.
Robinson on 3/25/13. (rwc) (Entered: 03/25/2013)
08/16/2012 25 Appellant's REPLY BRIEF by Anita B. Carr. (Carr, Anita) (Entered:
08/16/2012)
9
APPELLANTS ISSUES ON APPEAL AND DESIGNATION OF RECORD

08/10/2012 24 AFFIDAVIT of Service for Answering Brief of Appellee served on Anita
B. Carr on 8/2/12, filed by Alan M. Jacobs. (Carickhoff, David) (Entered:
08/10/2012)
08/06/2012 CORRECTING ENTRY: The incorrect docketing event was used to docket
D.I. 23 . The docket text has been corrected. The event "Bankruptcy
Appeal - Appellees Brief" should have been used. (fms) (Entered:
08/06/2012)
08/02/2012 23 APPELLEE'S BRIEF filed by Alan M. Jacobs.(Carickhoff, David)
Modified on 8/6/2012 (fms). (Entered: 08/02/2012)
07/02/2012 22 Appellant's BRIEF by Anita B. Carr. Appellee Brief due by 7/19/2012.
(Carr, Anita) (Entered: 07/02/2012)
06/19/2012 Clerk's Note: Pursuant to Order, D.I. 21 , Appellant Anita B. Carr, has
completed the registration process for CM/ECF e-filing and noticing in CA
12-288 SLR, effective this date. (rbe) (Entered: 06/19/2012)
06/05/2012 21 ORDER granting 15 MOTION Permission to E-File. The Clerk of Court is
directed to provide the attached CM/ECF Filing Registration form to Ms.
Carr, for completion and return. Upon receipt, the Clerk is directed to issue
a CM/ECF login and password to Ms. Carr; the account to be valid for
filing and noticing purposes in this case only, in accordance with all
District of Delaware rules, orders and procedures governing CM/ECF.
Signed by Judge Sue L. Robinson on 6/4/2012. (fms) (Entered:
06/05/2012)
06/04/2012 20 ORDER setting briefing schedule: D.I. 13 is granted. Appellant Brief due
by 7/2/2012. Appellee Brief due by 8/2/2012. Appellant Reply Brief due by
8/16/2012. Signed by Judge Sue L. Robinson on 6/1/2012. (fms) (Entered:
06/04/2012)
05/18/2012 18 SEALED EXHIBITS A and B re 17 MOTION for Extension of Time to
File by Anita B. Carr. (dzs, ) (Entered: 05/18/2012)
05/18/2012 17 AMENDED MOTION for Extension of Time to File Opening Brief - filed
by Anita B. Carr. (dzs, ) (Entered: 05/18/2012)
05/18/2012 16 Letter to Clerk from Anita Carr enclosing originals of D.I. 13 and
requesting Court allow Parcels to deliver her filings. (dzs, ) (Entered:
05/18/2012)
05/17/2012 19 Letter to Judge Robinson from Alan M. Root, Esq. enclosing Memorandum
and Order entered by the Bankruptcy Court. (fms) (Entered: 05/22/2012)
05/15/2012 15 MOTION Requesting Permission to E-File - filed by Anita B. Carr.
(Attachments: # 1 Text of Proposed Order)(dzs, ) (Entered: 05/15/2012)
05/14/2012 14 SEALED EXHIBIT A - (Medical Note) - re 13 MOTION for Extension of
Time to File Opening Brief - filed by Anita B. Carr. (rwc) (Entered:
05/15/2012)
10
APPELLANTS ISSUES ON APPEAL AND DESIGNATION OF RECORD

05/14/2012 13 MOTION for Extension of Time to File Opening Brief - filed by Anita B.
Carr. (rwc) Modified on 5/15/2012 (rwc). (Entered: 05/15/2012)
04/17/2012 12 ORDER setting briefing schedule: D.I. 9 is granted. Appellant Brief due by
5/21/2012. Appellee Brief due by 6/21/2012. Appellant Reply Brief due by
7/6/2012.. Signed by Judge Sue L. Robinson on 4/17/2012. (fms) (Entered:
04/17/2012)
04/16/2012 11 CERTIFICATE OF SERVICE of Emergency Notice and Motion for
Extension - filed by Anita B. Carr - re 9 MOTION for Extension of Time
to File (rwc) (Entered: 04/17/2012)
04/12/2012 CORRECTING ENTRY: removed sealed exhibit from DI#9. (rwc)
(Entered: 04/12/2012)
04/11/2012 10 SEALED EXHIBIT - in support of re 9 EMERGENCY MOTION for
Extension of Time - by Anita B. Carr. (rwc) (Entered: 04/12/2012)
04/11/2012 9 EMERGENCY NOTICE AND MOTION for Extension of Time to File
Appellant's Opening Brief - filed by Anita B. Carr. (rwc) (Main Document
9 replaced on 4/12/2012) (rwc). (Entered: 04/11/2012)
03/19/2012 8 ORDER setting briefing schedule: Appellant Brief due by 4/20/2012.
Appellee Brief due by 5/21/2012. Appellant Reply Brief due by 6/5/2012.
Signed by Judge Sue L. Robinson on 3/19/2012. (nmf) (Entered:
03/19/2012)
03/14/2012 Case Assigned to Judge Sue L. Robinson. Please include the initials of the
Judge (SLR) after the case number on all documents filed. (rjb) (Entered:
03/14/2012)
03/13/2012 CORRECTING ENTRY: Order relating to Amended Notice of Appeal
added to D.I. 1 . PDF of Notice of Docketing D.I. 7 replaced with a
corrected version including both Orders being appealed. (dzs, ) (Entered:
03/13/2012)
03/09/2012 7 NOTICE of Docketing Bankruptcy Appeal. Mailed to pro se appellant.
(dzs, ) (Main Document 7 replaced on 3/13/2012) (dzs, ). (Main Document
7 replaced on 3/13/2012) (dzs, ). (Entered: 03/09/2012)
03/08/2012 6 SEALED EXHIBIT re 5 MOTION for Extension of Time to File by Anita
B. Carr. (dzs, ) (Entered: 03/09/2012)
03/08/2012 5 MOTION for Extension of Time to File Opening Brief and to Reset Time
to File Reply and REQUEST for Clarification of Mediation Schedule -
filed by Anita B. Carr. (dzs, ) (Entered: 03/09/2012)
03/08/2012 DESIGNATED RECORD on Appeal is available electronically from the
docket sheet on file in the Bankruptcy Court in case number 07-10416.
(dzs, ) (Entered: 03/09/2012)
03/08/2012 4 DESIGNATION OF RECORD on Appeal filed by Alan M. Jacobs (dzs, )
11
APPELLANTS ISSUES ON APPEAL AND DESIGNATION OF RECORD

(Entered: 03/09/2012)
03/08/2012 DESIGNATED RECORD on Appeal is available electronically from the
docket sheet on file in the Bankruptcy Court in case number 07-10416.
(dzs, ) Modified on 3/9/2012 (dzs, ). (Entered: 03/09/2012)
03/08/2012 3 AMENDED DESIGNATION OF RECORD on Appeal filed by Anita B.
Carr (dzs, ) (Entered: 03/09/2012)
03/08/2012 DESIGNATED RECORD on Appeal is available electronically from the
docket sheet on file in the Bankruptcy Court in case number ADV 09-
52251. (dzs, ) (Entered: 03/09/2012)
03/08/2012 2 STATEMENT OF ISSUES AND DESIGNATION OF RECORD on
Appeal filed by Anita B. Carr (dzs, ) Modified on 3/9/2012 (dzs, ).
(Entered: 03/09/2012)
03/08/2012 1 AMENDED Notice of APPEAL FROM BANKRUPTCY COURT
appealing the Order entered on 1/9/12 by Judge Carey in Bankruptcy case
number ADV 09-52251. Fee Status not Paid. IFP granted.- filed by Anita
B. Carr. (Attachments: # 1 First Notice of Appeal appealing the Order
entered on 12/7/11, # 2 BK Order on Motion for Reconsideration dated
12/7/11, # 3 BK Memorandum dated 12/7/11, # 4 Bankruptcy Court
Transmittal)(dzs, ) Modified on 3/9/2012 (dzs, ). (Additional attachment(s)
added on 3/13/2012: # 5 BK Order on Second Motion for Reconsideration
dated 1/9/12) (dzs, ). Modified on 3/13/2012 (dzs, ). (Entered: 03/09/2012)








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IN THEUNITED STATES DISTRICTCOURT
FORTHEDISTRICTOF DELAWARE
In re: ) Chapter11
NEWCENTURYTRSHOLDINGS, INC., ) Bank. No. 07-10416(KJC)
aDelawareCorporation, etaI., ) Adv. No. 09-52251(KJC)
)
Debtors. ) JointlyAdministered
ANITAB. CARR, )
)
Appellant, ) Civ. No. 12-288-SLR
)
v. )
)
ALAN M. JACOBS,as liquidatingtrustee )
oftheNewCenturyLiquidating Trust, )
)
Appellee. )
MEMORANDUM ORDER
AtWilmingtonthis25
th
dayofMarch, 2013, having reviewedthe papers
submitted in connectionwiththeabovecaptioned appeal:
ITIS ORDEREDthattheabovecaptioned appealisdismissedandtheordersof
thebankruptcycourtareaffirmed, forthereasonsthatfollow:
1. Standard of review. Thiscourthasjurisdictionto hearan appealfromthe
bankruptcycourtpursuantto28U.S.C. 158(a). In undertaking areviewoftheissues
on appeal, the courtappliesaclearlyerroneousstandardtothebankruptcycourt's
findings offactand aplenarystandardtothatcourt'slegalconclusions. See American
Flint Glass Workers Union v. Anchor Resolution Corp., 197F.3d 76,80(3d Cir. 1999).
With mixedquestionsoflawandfact, thecourtmustacceptthebankruptcycourt's
"findingofhistoricalornarrativefactsunlessclearlyerroneous, butexercise[s]'plenary
reviewofthe[bankruptcy] court'schoiceand interpretationoflegal preceptsand its
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application of those precepts to the historical facts. '" Mellon Bank, N.A. v. Metro
Commc'ns, Inc., 945 F.2d 635, 642 (3d Cir. 1991) (citing Universal Minerals, Inc. v. C.A.
Hughes & Co., 669 F.2d 98, 101-02 (3d Cir. 1981)). The district court's appellate
responsibilities are further informed by the directive of the United States Court of
Appeals for the Third Circuit, which effectively reviews on a de novo basis bankruptcy
court opinions. See In re Hechinger, 298 F.3d 219, 224 (3d Cir. 2002); In re Telegroup,
281 F.3d 133, 136 (3d Cir. 2002).
2. Background. In April 2007, New Century TRS Holdings, Inc. ("TRS
Holdings") and its affiliates (collectively, "debtors"1) filed chapter 11 bankruptcy petitions
in the United States Bankruptcy Court for the District of Delaware ("bankruptcy court") in
Bank. No. 07-10416(KJC) (the "bankruptcy proceeding"). See In re New Century TRS
1Debtors are the following entities: New Century Financial Corporation (flkla New
Century REIT, Inc.), a Maryland corporation; New Century TRS Holdings, Inc. (flkla
New Century Financial Corporation), a Delaware corporation; New Century Mortgage
Corporation (flkla JBE Mortgage) (d/b/a NCMC Mortgage Corporate, New Century
Corporation, New Century Mortgage Ventures, LLC), a California corporation; NC
Capital Corporation, a California corporation; Home123 Corporation (flk/a The Anyloan
Corporation, 1800anyloan.com, Anyloan.com), a California corporation; New Century
Credit Corporation (f1k1a Worth Funding Incorporated), a California corporation; NC
Asset Holding, L.P. (flk/a NC Residual II Corporation), a Delaware limited partnership;
NC Residual Corporation, a Delaware corporation; NC Residual IV Corporation, a
Delaware corporation; New Century RE.O. Corp., a California corporation; New
Century RE.O. " Corp., a California corporation; New Century RE.O. III Corp., a
California corporation; New Century Mortgage Ventures, LLC (d/b/a Summit Resort
Lending, Total Mortgage Resource, Select Mortgage Group, Monticello Mortgage
Services, Ad Astra Mortgage, Midwest Home Mortgage, TRA TS Financial Services,
Elite Financial Services, Buyers Advantage Mortgage), a Delaware limited liability
company; NC Deltex, LLC, a Delaware limited liability company; and NCoral, L.P., a
Delaware limited liability partnership. (bankruptcy proceeding, 0.1. 8254 at 1 n.1)
"Debtors" also include New Century Warehouse Corporation (a/k1a Access Lending), a
California corporation, which filed its voluntary chapter 11 petition on August 3, 2007.
(ld.)
2
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Holdings, Inc., 407B.R. 675(D. Del. 2009). On October5.2009.appellantAnita B.
Carr("appellant")commencedAdv. No. 09-52251(KJC)("theadversaryproceeding")by
filing acomplaintagainstthedebtorsassertingclaimsfor: (1)fraudulentconveyance;
(2) violationofchapter11 oftheBankruptcyCode; (3) fraudulentmisrepresentationand
negligence; (4) violationoftheTruth-in-LendingAct. 15U.S.C. 1601 et seq.; (5)
violationoftheBusinessand ProfessionsCodeSection 17200et seq.; (6)violationof
theReal EstateSettlementProceduresAct. 12U.S.C. 2605; and (7)quiettitletoreal
property. See Adv. No. 09-52251(KJC); In re New Century Holdings, Inc., 2011 WL
1792544(Bankr. D. Del. May10, 2011). Theclaimsaroseoutofaloantransaction
betweentheappellantanddebtorHome123Corporationthattookplaceonorabout
January25, 2006. Id. Thepropertyhassincebeenthesubjectofaforeclosuresale.
3. On November10, 2009, appelleetrusteeAlan M. Jacobs("appellee")filed a
motiontodismisstheadversaryproceedingpursuanttoFed. R. Civ. P. 12(b)(6),
opposedbyappellant. Id. In addition, inthebankruptcyproceeding, appellantfiled an
unliquidated unsecuredclaimagainstthedebtorsonAugust24, 2009("proofofclaim"),
andamotiontoconsiderherclaimtimelyfiled. (Bank., 0.1. 9975) On January20,
2010.withtheconsentofappellee. thebankruptcycourtenteredan ordergrantingthe
motiontoconsiderappellant'sproofofclaimas timelyfiled. (Bank., 0.1. 10017)
4. Appellantandappelleeentered intoasettlementon oraboutOctober5. 2010
wherein appelleeagreedtopayappellantasettlementsumof$60.000"infull andfinal
satisfactionofthecausesofactionand anyotherclaim(s)that[appellant]mayhave
againsttheDebtorsortheTrust." In re New Century Holdings, Inc., 2011 WL1792544.
3
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The settlement sum, paid to appellant, was consideration for the full and final
settlement of all claims appellant had against the trust and the debtors through
appellant's release of the debtors, the trust, the trustee, the plan advisory committee,
and their respective retained professionals of and from "any and all claims, damages,
actions, suits, causes of action, rights, liens, demands, obligations and/or liabilities."
Id.; see also (Adv., 0.1. 3,11 5) The settlement agreement further provided that, to the
extent a dispute arose between the parties at any time after the full execution of the
settlement agreement, "the Parties consent and subject themselves to the jurisdiction of
this United States Bankruptcy Court, District of Delaware in front of the Honorable Kevin
J. Carey to resolve such dispute(s)." Id. at 11 7. On November 2,2010, in accordance
with the terms of a settlement agreement, appellant filed the notice of dismissal of the
adversary proceeding with prejudice. In re New Century Holdings, Inc., 2011 WL
1792544. The adversary proceeding was closed on November 3, 2010, and its closing
was docketed in the bankruptcy proceeding on the same date.
5. On December 13,2010,appellant filed a request to stay the dismissal and for
evidentiary hearing. Id. On March 9, 2011, appellant filed a motion for an order to
show cause. (Adv., 0.1. 65) An evidentiary hearing was held on April 20, 2011, and on
May 10, 2011, the bankruptcy court denied the request for stay. In re New Century
Holdings, Inc., 2011 WL 1792544. The adversary proceeding was reopened and
closed the same day, May 11,2011. On May 18, 2011, appellant timely filed her first
motion for reconsideration, denied by the bankruptcy court on December 7,2011. See
In re New Century Holdings, Inc" 2011 WL 6097910(Bankr. D. Del. Dec. 7, 2011).
4
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Appellant timely filed a second motion for reconsideration on December 14, 2011,
seeking reconsideration of the December 7, 2011 order. On December 15, 2011,
appellant filed a notice of appeal of the order denying the first motion for
reconsideration. See In re New Century Holdings, Inc., 2012 WL 38974 (D. Del. Bankr.
Jan. 9, 2012) (noting that the appeal was not effective entry of the order disposing of
the second motion for reconsideration). On January 9, 2012, the bankruptcy court
denied the second motion for reconsideration. In re New Century Holdings, Inc., 2011
WL 1792544. Appellant timely filed an amended notice of appeal on January 17, 2012.
(See 0.1. 1)
6. Appellant raises the following issues for review: (1) whether the bankruptcy
court lacked the constitutional authority to adjudicate appellant's claims, and whether
the bankruptcy court erred by submitting proposed findings and conclusions;
(2) whether the bankruptcy court erred in failing to grant appellant due process;
(3) whether the bankruptcy court erred by failing to apply the current law to the matters
with NCL T (i.e., New Century Liquidating Trust); (4) whether the bankruptcy court erred
in its application of the 2008 global orders for relief from stay, abused its discretion,
erred by its reinterpretation of the 2008 global orders for relief from stay in 2011, and
whether the 2008 global orders for relief from stay are contrary to law on their face;
(5) whether the bankruptcy court erred by failing to acknowledge new evidence of
"robo-signing," "robo-notary," and other fraudulent acts subsequent to settlement;
(6) whether the bankruptcy court erred by failing to fairly examine the parameters of the
settlement agreement and settle the dispute, and whether the bankruptcy court erred by
ignoring legal detriment and fraud; (7) whether the bankruptcy court erred by failing to
5
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adviseappellantthatitmayhaveaconflictofinterest, and shouldthebankruptcyjudge
haverecused himself; and (8) whetherthebankruptcycourtis prejudicedagainst
homeowners. Portionsofissue2and issues3,7,and 8werenotraised byappellantin
herrequesttostaythedismissalandforevidentiaryhearing,themotionforanorderto
showcause, orin eitherofthemotionsforreconsideration and, therefore, arenot
properlybeforethiscourt. Appellee'scounter-statementraisestwoissueson appeal:
(1)whetherthebankruptcycourtproperlydenied appellant'sfirstmotionfor
reconsideration pursuantto Fed. R. Civ. P. 59(e); and (2)whetherthebankruptcycourt
properlydeniedappellant'ssecond motionforreconsideration pursuantto Fed. R. Civ.
P. 59(e).
7. Authority of bankruptcy court. "[T]hedistrictcourtsofthe UnitedStates
have'originalandexclusivejurisdictionofallcases undertitle 11.'" Stern v. Marshall,
_U.S._.131 S.Ct. 2594, 2603(2011)(quoting28U.S.C. 1334(a)). Districtcourts
haveoriginal, but notexclusive,jurisdictionof"civil proceedingsarising undertitle11, or
arisingin title 11 cases, orrelatedtothosecases." 28 U.S.C. 1334(a). Congresshas
dividedbankruptcyproceedings intothreecategories: (1)thosethat"aris[e]underTitle
11"; (2) thosethat"aris[e]in"aTitle 11 case; and (3) thosethatare"relatedtoacase
undertitle 11." Stern, 131 S.Ct. at2603(quoting28 U.S.C. 157(a)). Congresshas
authorizedthedistrictcourtsto"referanyorall such proceedingstothebankruptcy
judgesoftheirdistrict." Id.
8. Abankruptcyjudge'sauthorityvariesdepending"onthetypeofproceeding
involved." Stern, 131 S.Ct. at2604. Thebankruptcycode identifiessixteentypesof
6
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core proceedings. See 28 U.S.C. 157(b)(2). "Bankruptcy judges may hear and enter
final judgments in 'all core proceedings arising under title 11, or arising in cases under
title 11.'" Stern, 131 S.Ct. at 2604 (quoting 28 U.S.C. 157(b)). "Parties may appeal
from "final judgments of a bankruptcy court in core proceedings to the district court,
which reviews them under traditional appellate standards." Id. at 2603-04.
9. This matter falls within the ambit of 157(b)(2)(B), and the parties do not
dispute that this is a core proceeding.
2
Appellant, however, relies upon Stern, supra, to
argue that the bankruptcy court had no authority to adjudicate her claim of "fraudulent
inducement of settlement. In Stern, the Supreme Court held that a bankruptcy court
"lacked the constitutional authority to enter a final judgment on a state law counterclaim
that is not resolved in the process of ruling on a creditor's proof of claim." Stern, 131
S.Ct. at 2620. Having considered Stern and its progeny, the court adopts the narrow
construction of Stern and its holding, that is, that Stern is restricted to the case of a
"state-law counterclaim that is not resolved in the process of ruling on a creditor's proof
of claim" as set forth in 28 U.S.C. 157(b)(2)(C). Stern, 131 S.Ct. at 2620.
2Approval of a settlement is "core" to the bankruptcy code. See In re WorldCom,
Inc., 347 B.R. 123, 138 (Bankr. S.D.N.Y. 2006) (finding jurisdiction to approve
settlement agreement); In re Harris, 590 F.3d 730 (9th Cir. 2009) (explaining that
matters involving the implementation of the parties' settlement agreement was within
bankruptcy court's core jurisdiction). Stern, 131 S.Ct. 2594, and its narrow limit on
bankruptcy court jurisdiction does not extend to the compromise and settlement of a
claim which is "indisputably property of a debtor's estate." In re Ambac Fin. Group, Inc.,
457 B.R. 299, 308 (Bankr. S.D.N.Y. 2011) (overruling Stern v. Marshal/-based
objections and approving settlement and release of claims under Fed. R. Bankr. P.
9019); see also In re Madoff, 848 F.Supp. 2d 469, 484 (S.D.N.Y. 2012) (finding that
Stern did not impact the bankruptcy court's authority to approve a settlement
agreement).
7
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10. Here, the bankruptcy court approved a settlement between appellant and
appellee that initially resulted in dismissal of Adv. No. 09-52251 (KJC) and settled all
claims.
3
(Bank., D.1. 10244; Adv., D.1. 52, 63) The terms of the settlement agreement
provide that the parties "consent and subject themselves to the jurisdiction" of the
bankruptcy court to resolve disputes, to the extent a dispute arose subsequent to
execution of the settlement agreement. (Adv., D.1. 63) In addition, appellant, in her
request for dismissal dated November 1, 2010, stated, "should any disputes or other
discrepancies or any portion of the settlement be deemed unenforceable, or unlawful,"
the bankruptcy court retains jurisdiction to address those matters. (ld. at D.1. 52)
Finally, during the April 20, 2011 evidentiary hearing, appellant acknowledged that the
parties consented to the jurisdiction of the bankruptcy court in the settlement
agreement. (Bank., D.1. 10466 at 71)
11. The bankruptcy court had jurisdiction over the matter pursuant to 28 U.S.C.
1334 and 157(a); the parties' dispute was a core proceeding pursuant to 28 U.S.C.
157(b)(1) and (b)(2)(B). The parties consented to the jurisdiction of the bankruptcy
court. The bankruptcy court has the constitutional authority to enter the orders
appealed by appellant. Appellant's challenge to the bankruptcy court's jurisdiction to
determine issues related to settlement of the adversary proceeding is an integral part of
the whole appeal. Therefore, the court rejects appellant's position that the bankruptcy
court did not have authority to enter orders with regard to settlement issues.
31n Stem, the court observed that a creditor can be held to have agreed to the
court's jurisdiction by filing a proof of claim. Stem, 131 S.Ct. at 2608.
8
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12. Settlement. Appellant and appellee entered into a settlement agreement on
October 5, 2010, and appellant was paid the agreed settlement amount. Appellant filed
a notice of voluntary dismissal with prejudice on November 2, 2010 in accordance with
the settlement agreement. The adversary proceeding was closed on November 3,
2010 in accordance with the notice for voluntary dismissal and its dismissal was
docketed in the bankruptcy proceeding. On December 13, 2010, appellant filed a
request to stay dismissal of the adversary proceeding contending that she had obtained
new evidence that demonstrated appellant made false representations to induce her to
enter into the settlement agreement (Le., fraudulent inducement to settle). The
bankruptcy court treated the request to stay as a motion to reopen the adversary
proceeding. On March 9, 2011, appellant filed a request for a show cause order for the
court to require the appellee to show cause why the bankruptcy court should not issue
an order staying all proceedings based on documents notarized by certain individuals
employed by the debtors and, further, ordering the appellant to produce "notarial
journals." At the April 20, 2011 evidentiary hearing, the parties appeared and
presented evidence.
13. Standard for fraudulent inducement to settle. In resolving the issue of
fraudulent inducement to settle, the bankruptcy court applied Delaware state law. The
parties do not dispute that Delaware state law governs the analysis.
4
Under Delaware
4While appellant cites to California law, she does not assign error to the
bankruptcy court's choice of law and in construing the release in the settlement
agreement in accordance with Delaware law. The bankruptcy court noted that.
alternatively. appellant gained no advantage had California law applied. In fe New
Century TRS Holdings, Inc .. 2011 L 1792544, at *4 n.6.
9
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law, to state a claim for common law fraud, a party seeking rescission must
demonstrate: (1) a false statement or misrepresentation; (2) with the knowledge the
statement was false or made with reckless indifference to the truth; (3) the statement
induced the plaintiff to enter the agreement; (4) the plaintiff's reliance was reasonable;
and (5) the plaintiff was injured as a result. Rohm and Haas Elec. Materials, LLC v.
Honeywelllntem'l, Inc., 2009 WL 1033651 (D. Del. Apr. 16,2009) (citing Lord v.
Souder, 748 A.2d 383, 402 (Del. 2000)).5
14. Appellant challenges the bankruptcy court's application of the law to the
facts to find there was no fraudulent inducement to settle and, therefore, denied the
motion to reopen. As this issue presents a mixed question of law and fact, the court
applies plenary review of the bankruptcy court's interpretation of legal precepts and its
application of those precepts to the facts. See Mel/on Bank, N.A., 945 F.2d at 642.
Appellant asserts that the bankruptcy court erroneously decided not to set aside the
settlement nor to reopen the adversary proceeding when it: (1) failed to acknowledge
the new evidence and other fraudulent acts subsequent to settlement; (2) failed to
examine the parameters of the settlement agreement and settle the dispute; and
(3) ignored legal detriment and fraud.
5The bankruptcy court cited California law to conclude there was no
misrepresentation by appellee. In re New Century TRS Holdings, Inc., 2011 SL
1792544, at * 4 (quoting Wilke v. Coinway, Inc., 257 Cal. App. 2d 126,64 Cal. Rptr. 845
(Cal. App. 1 Dist.1967) (UA fraudulent misrepresentation is one made with the
knowledge that it is or may be untrue, and with the intention that the person to whom it
is made act in reliance thereon."). Given the similarity of the law, the outcome is the
same when applying either Delaware or California law.
10
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15. Theevidenceadduced atthe hearingdoesnotsupportappellant's
contentionsthatshewasfraudulentlyinducedto enterintothesettlementagreement.
Morespecifically, atthetimethesettlementagreementwassigned, appellant's
concernsregardingtheassignmentandauthenticityofsignatureswereraised and
discussedbytheparties; i.e., anyissuesregardingthevalidityoftheassignmentwere
knownto and asserted byappellantpriortosigningthesettlementagreement. (Bank.,
0.1. 10466at64-68) Moreover,thereis noevidencethatappelleemadeany
representations in this regardtoappellantthatheknewtobeuntrueorthatwere, in
fact, untrue. (Id. at74-75, 78-87) In sum, becausethenatureofherfraud claimswere
well-knowntoappellantatthetimeshesignedthesettlementagreement,thereis no
basisforaclaim offraudulentinducementto settle. Therefore,thebankruptcycourt
properlydeniedappellant'smotionto reopen, aswell astherequestforashowcause
order.
16. Motions for reconsideration. Followingentryofthe May10, 2011
memorandumandorder, appellantfiled herfirstmotionforreconsiderationtoconsider
newevidenceand to preventmanifestinjustice. Thepurposeofamotionfor
reconsideration isto"correctmanifesterrorsoflaworfactorto presentnewly
discoveredevidence." Max'sSeafood Cafe ex reI. Lou-Ann, Inc. v. Quinteros, 176F.3d
669,677(3d Cir. 1999). "AproperRule59(e) motion ...mustrelyon oneofthree
grounds: (1) an interveningchangein controlling law; (2)theavailabilityofnew
evidence; or(3)theneedtocorrectaclearerroroflaworfactortopreventmanifest
injustice. Lazaridis V. Wehmer, 591 F.3d666, 669(3d Cir. 2010) (citing N. River Ins.
11
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Co. v. C/GNA Reinsurance Co., 52 F.3d 1194, 1218 (3d Cir. 1995). The denial of a
motion for reconsideration is reviewed for an abuse of discretion, but underlying legal
determinations are reviewed de novo and factual determinations for clear error.
Howard Hess Dental Labs. Inc. V. Dentsply Int'l, Inc., 602 F.3d 237, 246 (3d Cir. 2010).
17. In appellant's first motion for reconsideration, she contended that: (1) new
evidence became available that points to mortgage and bankruptcy fraud; (2) the
bankruptcy court should have stayed dismissal of the case; (3) the bankruptcy court
ignored the fact that it was being used to conceal assets; and (4) the bankruptcy court
denied her right to due process when it did not reopen discovery as to fraud in the
settlement agreement. In addition, she sought clarification of the 2008 global relief
order as to her ability to pursue claims for fraud against the debtors in another venue.
The bankruptcy court denied the motion. Unhappy with denial of the first motion for
reconsideration, appellant filed a motion to vacate, alter or amend memorandum on
reconsideration and order on reconsideration and request for judicial notice (Adv., D.1.
93, 94, 96) In her second motion for reconsideration, appellant again sought relief on
the grounds of new evidence, fraud and misrepresentation in inducing appellant into the
settlement agreement, and manifest injustice and equitable grounds for relief.
6
18. 2008 global relief order. In 2008, the bankruptcy court entered a global
relief order to address the innumerable motions to lift stay being filed in bankruptcy
proceedings and to relieve estates from incurring unnecessary costs in connection with
such motions. The global relief order terminated the automatic stay to permit lenders to
SThe bankruptcy court analyzed the second motion for reconsideration under
Fed. R. Civ. P. 59(e) and Fed. R. Civ. P. 60(b).
12
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add thedebtorsorthe trustasdefendantsin non-bankruptcycourtactionsseekingto
adjudicatethedebtors' ortrust'sinterestin real property, usuallyin foreclosure
proceedings. See In re New Century TRS Holdings, Inc., 2011 WL60197910,at*4
(8ankr. D. Del. Dec. 7, 2011). Appellantcontendsthatthebankruptcycourterred in its
applicationofthe globalrelieforderforrelieffrom stay, erred in its 2001
reinterpretationoftheglobal relieforder, and thattheglobalorderis contraryto law.
Appellantsoughtclarificationoftheglobal relieforderin herfirstmotionfor
reconsideration, relying uponadecisionfromthe UnitedStatesDistrictCourtforthe
DistrictofHawaii, Uy v. Wells Fargo Bank, N.A., 2011 WL1235590(D. Haw. Mar. 28,
2011).
19. Thebankruptcycourtclarifiedthattheglobalrelieforderwas notdesignedto
allow, anddoesnotpermit, partiestopursueclaimsagainstthedebtorsorthetrustfor
monetarydamages. (8ank., D.1. 10491) Itfurthernotedthat Uy hascaused some
confusion, sincethecomplaintat issuein thatcaseincludedclaimsformonetary
damages. See In re New Century TRS Holdings, Inc., 2011 WL60197910, at*4 n.8.
In theinstantmatter,theglobalrelieforderdid notterminatetheautomaticstayto
permitclaimsformonetarydamagesagainstthedebtorsorthetrust, butwasdesigned
toallowplaintiffstoaddthedebtorsorthetrustasdefendantsto complaintsseekingto
determinethedebtors'ortrust's interestin particularreal property. Id. at4. Thecourt
finds noerrorbythebankruptcycourt. Indeed,the issuingcourtis in thebestposition
to provideguidanceand clarifyordersshouldthepartiesrequireit. See re New Power
Co., 438 F.3d 1113, 1119n.5(11th Cir. 2006); Matter of Chicago, Rock Island and
13
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Pacific R. Co., 860 F.2d 267, 272 (7th Cir. 1988);Amzura Enterprises, Inc. v. Ratcher,
18F. App'x95,107(4th Cir. 2011)(unpublished).
20. Due process. Appellantcontendsthatthe bankruptcycourtviolated her
righttodueprocessthroughoutthe proceedings. Shefirstcontends herdueprocess
rightswereviolated becausethe bankruptcycourtfailedtoenterafinalorder.
However,theorderdenyingthe second motionforreconsideration isafinal order. See
In re Brown, 409F. App'x591, 592 (3d Cir. 2011)(unpublished)(denialofaRule 59(e)
motionforreconsideration is afinal order). Next, appellantcontendserroroccurred
whenthe bankruptcycourtfailed to resolvewhatshetermsthe"settlementagreement
dispute." In ruling uponappellant'smotiontostaydismissalofthe case, the bankruptcy
courtresolved all disputessurroundingthe settlementagreement.
21. Appellantfurtherassertsthatviolationsofherrighttodueprocessoccurred
whenshewasnotallowedtoproceedwithdiscoveryortopresentcertainevidenceby
reason ofthedenialofdiscovery. Discoverywasstayed in the adversaryproceeding
pending resolutionofappellant'sproofofclaim in thebankruptcyproceeding. The
parties, however, agreedthatdiscoverywouldtakeplace underthe contested matter,
andthe partiesultimatelyresolved all issuesthrough settlement. Thebankruptcycourt
properlyfound thatappellantwas notdenieddueprocessbygoingforward
consensuallyon all issuesasan objectionto herproofofclaimwhiletheadversary
proceedingwasstayed. Finally, appellantcontendsherrighttodueprocesswas
violatedwhen thebankruptcycourtentered its December7,2011 decisionwithout
benefitofthe"briefingbinder." Itisevidentin readingtheDecember7, 2011
14
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memorandum on reconsiderationthatthebankruptcycourtconsidered allfilings
submittedbytheparties. Thisassignmentoferroriswithoutmerit.
22. Despitethesettlementagreement, appellant'smotionsforreconsideration
sought, in essence,adeterminationbythebankruptcycourtofthe underlying meritsof
appellant'sclaims. Suchdeterminationsarenotmadeuponreconsideration. With
respecttothe bankruptcy'scourtdecisionsdenyingthefirstandsecond motionfor
reconsideration, thecourtfindsthatappellanthas notpresentedanycontrolling case
law, evidence, orinformationthatthebankruptcycourtoverlookedwhich would change
theconclusionsreached bythebankruptcycourt. Budget Blinds, Inc. v. White, 536
F.3d 244, 251 (3d Cir. 2008).
23. Conclusion. Forthereasons explained,thebankruptcycourt'sordersare
affirmed, andtheappealtherefrom is dismissed.
15
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IN THEUNITEDSTATESDISTRICTCOURT
FORTHE DISTRICTOFDELAWARE
In re: ) Chapter11
NEWCENTURYTRSHOLDINGS, INC., ) Bank. No. 07-10416(KJC)
aDelawareCorporation,etaL, ) Adv. No. 09-52251(KJC)
)
Debtors. ) JointlyAdministered
ANITAB. CARR, )
)
Appellant, ) Civ. No. 12-288-SLR
)
v. )
)
ALAN M. JACOBS,asliquidatingtrustee )
ofthe NewCenturyLiquidatingTrust, )
)
Appellee. )
MEMORANDUM ORDER
AtWilmingtonthis {1f'dayofApril, 2013, havingconsidered appellantAnita B.
Carr's("appellant")motionforreconsideration (0.1. 27)andpetitionforawritof
mandamus(0.1. 28);
ITIS ORDEREDthatthemotion(0.1. 27)and petition (0.1. 28) aredenied,for
thefollowing reasons:
1. Background. Appellantmovesforreconsiderationofthiscourt'sMarch25,
2013memorandumorder(0.1. 26) affirmingtheordersoftheUnited StatesBankruptcy
CourtfortheDistrictofDelaware("bankruptcycourt"). Inthealternative, she seeks
reliefpursuanttoFed. R. Civ. P60(b). Inaddition, appellantseeksmandamusrelieffor
thebankruptcycourttopreserveinformationand dataand toproducediscovery.
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2. Motion for reconsideration. The purpose of a motion for reconsideration is
to "correct manifest errors of law or fact or to present newly discovered evidence."
Max's Seafood Cafe ex reI. Lou-Ann, Inc. v. Quinteros, 176 F.3d 669,677 (3d Cir.
1999). "A proper Rule 59(e) motion ... must rely on one of three grounds: (1) an
intervening change in controlling law; (2) the availability of new evidence; or (3) the
need to correct a clear error of law or fact or to prevent manifest injustice. Lazaridis V.
Wehmer, 591 F.3d 666, 669 (3d Cir. 2010) (citing N. River Ins. Co. v. C/GNA
Reinsurance Co., 52 F.3d 1194, 1218 (3d Cir. 1995.
3. Appellant has failed to demonstrate any of the aforementioned grounds to
warrant reconsideration of the March 25, 2013 memorandum order affirming the orders
of the bankruptcy court.
4. Rule 60(b). Alternatively, appellant seeks relief pursuant to Fed. R. Civ. P.
60(b). Rule 60(b) provides that a party may file a motion for relief from a final judgment
for the following reasons:
(1) mistake, inadvertence, surprise, or excusable neglect; (2) newly
discovered evidence by which due diligence could not have been
discovered in time to move for a new trial under Rule 59(b); (3) fraud
(whether heretofore denominated intrinsic or extrinsic), misrepresentation
or other misconduct of an adverse party; (4) the judgment is void; (5) the
judgment has been satisfied, released or discharged, or a prior judgment
upon which it is based has been reversed or otherwise vacated, or it is no
longer equitable that the judgment should have prospective application; or
(6) any other reason justifying relief from the operation of the judgment.
Fed. R. Civ. P. 60(b). A motion filed pursuant to Rule 60(b) is addressed to the sound
discretion of the trial court guided by accepted legal principles applied in light of all
2
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relevant circumstances. Pierce Assoc. Inc., v. Nemours Found., 865 F.2d 530, 548 (3d
Cir. 1988).
5. Appellant does not indicate under which section of Rule 60(b) she relies.
However, she appears to argue that the court erred in its application of the law. To the
extent appellant relies upon Rule 60(b)(1), the Third Circuit has not yet decided whether
legal error may be characterized as "mistake" within the meaning of Rule 60(b)(1).
Bernheim v. Jacobs, 144 F. App'x 218,221,223 (3d Cir. 2005) (unpublished). Legal
error, without more, cannot justify granting a Rule 60(b) motion. Smith v. Evans, 853
F.2d 155,158 (3d Cir. 1988) (citations omitted); see also Ibarra v. WO.S.u. Radio
Broad. Org., 218 F. App'x 169,170 (3d Cir. 2007) (unpublished); Peterson v. Brooks,
2007 WL 2306589, at *4 (ED. Pa. Aug. 9, 2007) ("Petitioner's first argument-that the
Court erred in ruling that petitioner's claims were procedurally defaulted-is not properly
construed as a 'mistake' under Rule 60(b)(1), or as ground for relief under Rule
60(b)(6).").
6. Relief is also not appropriate under Rule 60(b)(6), to the extent that appellant
relies upon it. Rule 60(b)(6) "is a catch-all provision that allows relief for any reason
justifying relief from the operation of the judgment." United States v. Witco Corp., 76 F.
Supp. 2d 519, 527 (D. Del. 1999). It is within the sound discretion of the trial court to
grant or deny relief under this section. Lasky v. Continental Products Corp., 804 F.2d
250, 256 (3d Cir. 1986). The Third Circuit "has consistently held that the Rule 60(b)(6)
ground for relief from judgment provides for extraordinary relief and may only be
invoked upon a showing of exceptional circumstances." Coltec Indus., Inc. v. Hobgood,
3
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280 F.3d 262, 273 (3d Cir. 2002) (internal citations and quotations omitted); see also
Gonzalez v. Crosby, 545 U.S. 524, 535 (2005) ("[O]ur cases have required a movant
seeking relief under Rule 60(b)(6) to show 'extraordinary circumstances' justifying the
reopening of a final judgment."). Rule 60(b)(6) generally requires the movant to make
"a more compelling showing of inequity or hardship" than would normally be required to
reopen a case under anyone of the first five subsections of Rule 60(b). Project Mgmt.
Inst., Inc. v. Ireland, 144 F. App'x 935 n.1 (3d Cir. 2005) (unpublished).
7. The court thoroughly reviewed the record and the caselaw before affirming
the rulings issued by the bankruptcy court. It is evident appellant disagrees with the
court's ruling. Regardless, this is an insufficient basis for relief under Rule 60(b)(6).
8. Petition for writ of mandamus. Appellant petitions the court to command
the bankruptcy court "to preserve and not abandon evidence and to produce" to her
certain evidence because she has litigation pending in other courts and, thus, "requires
[the] evidence be preserved and not abandoned."
9. To be eligible for mandamus relief under 28 U.S.C. 1361, appellant must
satisfy three conditions. First, she must demonstrate that she has "no other adequate
means to attain the relief [s]he desires." Cheney v. United States Dist. Court, 542 U.S.
367, 380 (2004) (citation omitted). Next, she must carry the burden of showing that
"[her] right to the issuance of the writ is clear and indisputable." Id. at 381 (citations
omitted). Finally, "the issuing court ... must be satisfied that the writ is appropriate
under the circumstances." Id.
4
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10. Appellant has failed to demonstrate her entitlement to a writ of mandamus.
She has not demonstrated that she has no other means tp attain the relief she desires.
Nor has she carried her burden to demonstrate that her right to issuance of the writ "is
clear and indisputable." Cheney, 542 U.S. at 381 (citations omitted). Issuance of a writ
is inappropriate under the circumstances and the petition is frivolous. Accordingly, the
court denies the petition for writ of mandamus.
UNITED STA SDiSTRlCT JUDGE
5
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