FOR THE NINTH CIRCUIT Bankruptcy Appellate Panel Case No. CC-11-1221 Bankruptcy Adversary Case No. 6:11-01001-SC Bankruptcy Case No. 6:10-37900-SC BRIAN W. DAVIES, Debtor, Plaintiff, and Appellant vs. DEUTSCHE BANK NATIONAL TRUST COMPANY As Trustee of the Residential Asset Securitization Trust 2007-A5, Mortgage Pass- Through Series 2007E, under the Pooling and Servicing Agreement Dated March 1, 2007 Defendant, and Appellee, APPELLANTS OPENING BRIEF Diane Beall (SBN 86877) John H. Bauer (SBN 91471) Gary Harre (SBN 86938) 8700 Warner Ave., Suite 200 Fountain Valley, CA 92708 Telephone: (714) 907-4182 Facsimile: (7140 907-4175 Attorneys for Appellant Brian W. Davies Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 1 of 42 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 2 of 42 TABLE OF AUTHORITIES Americana Fabrics, Inc. v. L & L Textiles, Inc., 754 F.2d 1524, 1529 (9th Cir. 1985).............................................................28 American States Ins. Co v. Kearns, 15 F.3d 142, 143-144 (9th Cir. 1994)............14 Beaver v Beaver, 117 NY 421, 428-429.................................................................21 Biggs v. Stovin (In re Luz Int'l, Ltd.), 219 B.R. 837, 842 (9th Cir. BAP 1998)....10 Boone v. United States, 944 F.2d 1489, 1492 (9th Cir. 1991)..................................3 Brown v. Felsen, 442 U.S. 127, 131, 60 L. Ed. 2d 767, 99 S. Ct. 2205 (1979)......28 Brown v. Spohr, 180 N.Y. 201, 209-210 (N.Y. 1904)............................................23 Cen-Pen Corp. v. Hanson, 58 F.3d 89, 92 (4th Cir. 1995)......................................13 Cooter & Gell v. Hartmarx Corp., 946 U.S. 384, 405 (1990)..................................3 Dunmore v. United States, 358 F.3rd 1107, 1112 (9th Cir. 2004)..........................26 Gruen v. Gruen, 68 N.Y.2d 48, 56 (N.Y. 1986)......................................................21 Gratiot County State Bank v. Johnson, 249 U.S. 246, 248, 63 L. Ed. 587, 588, 39 S. Ct. 263 (1919)......................................................................18 Guerra v. Sutton, 783 F.2d 1371, 1376 (9th Cir. 1986)..........................................15 Hauk v. JP Morgan Chase Bank United States, 552 F.3d 1114,(9th Cir. 2009)....19 In re Agard, No. 10-77338-reg, 2011 Bankr. LEXIS 488, at *58-*59 (Bankr. E.D.N.Y. Feb. 10, 2011)..................................................................29 In re Aniel, 427 B.R. 811, 816 (Bankr. N.D. Cal. 2010).........................................10 In re: Becker, 2004 N.Y. Slip Op. 51773U, 4 (N.Y. Sur. Ct. 2004.........................21 In re Bialac, 694 F.2d 625, 627 (9th Cir. 1982)......................................................10 In re Canellas,2010 WL 571808 (Bankr. M.D.Fla. Feb 9, 2010)...........................27 In re Centre de Tricot De Gaspe, Ltee., 10 Bankr. Rep. 148, 149 (Bankr. S.D. Fla. 1981).........................................18 -ii- Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 3 of 42 In re Conejo Enters., 96 F.3d 346, 351 (9th Cir. 1996).............................................2 In re Doble 2011 Bankr. LEXIS 1149 (S.D. Cal. April 2011)................................20 In re Fawn Ridge Partners, LP, BAP No. CC-09-1396-HPD (March 29, 2010)....27 In re Fitch, 2009 WL 1514501 (Bankr. N.D. Ohio May 28, 2009)........................27 In re Gavin, 319 B.R. 27, 32 (BAP 1st Cir. 2004)..................................................10 In re Eleazar Salazar, WL 1398478 (Bankr. S.D. Cal. 2011).................................17 In re Kang Jin Hwang, 396 B.R. 757, 768 (Bankr. C.D. Cal. 2008)......................26 In re Kemp, 391 B.R. 262, 263 (D.N.J. 2008)........................................................13 In re Lee, 179 B.R. 149, 155 (Bankr. 9th Cir. 1995)................................................3 In re Lee, 2009 WL 1917010 (Bankr. C.D. Cal, Jan. 26, 2009).............................27 In re Mansaray-Ruffin, 530 F.3d 230, 237-38 (3d Cir. 2008) ..............................13 In re Maisel, 378 B.R. 19 (Bankr.D. Mass. 2007) .................................................27 In re McCoy, No. 10-63814-fra13, 2011 Bankr. LEXIS 534, at *10 (Bankr. Or. Feb. 7, 2011)..........................29 In re Nat'l Environ. Waste Corp., 129 F.3d 1052, 1054 (9th Cir. 1997)...................2 In re Perry (1983, DC Md) 29 BR 787, 9 CBC2d 93 ...............................................5 In re Urdahl, 07-07227-PB7 (Bankr. S.D. Cal. June 9, 2008)................................27 In re Veal, 9th Circuit BAP Nos. AZ-10-1055, az 10-1056, (June 10, 2011)...13,29 In re Wesband, 427 B.R. 13, 18 (Bankr. D. Ariz 2010)..........................................10 In re Wilhelm, 407 B.R. 392, 400 (Bankr. D. Idaho. 2009)........................10, 11, 27 Katchen v. Landy, 382 U.S. 323 (1966)..................................................................28 Kaspar Wire Works, Inc. v. Leco Eng'g & Mach., Inc., 575 F.2d 530, 535 (5th Cir. 1978).................................................................27 Kermani v. Liberty Mut. Ins. Co., 4 A.D.2d 603 (N.Y. App. Div. 3d Dep't 1957).............................................23 -iii- Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 4 of 42 Kowalski v. Tesmer, 543 U.S. 125, 128-29 (2004) ................................................26 LaSalle Bank Nat'l Ass'n v. Lamy, No. 030049/2005 2006 NY Slip Op 51534U, slip op. 2 (N.Y. Sup. Ct. 2006).........................30 Maryland Cas. Co. V. Pacific Coal & Oil Co., 312 U.S. 270 (1941).....................15 Matter of Cohn, 187 App. Div. 392, 395.................................................................21 Matter of Szabo, 10 N.Y.2d 94, 98-99....................................................................21 McClain v. Apodaca, 793 F.2d 1031, 1033 (9th Cir. 1986)...................................28 MERS v. Saunders, 2 A.3d 289, 295 (Me. 2010)...................................................30 Montana v. United States, 440 U.S. 147.................................................................29 Parklane Hosiery Co. v. Shore, 439 U.S. 322, 58 L. Ed. 2d 552, 99 S. Ct. 645 (1979)................................28 Polhemas v. Trainer, 30 Cal. 686, 688 (1866)........................................................17 Pribus v. Bush, 118 Cal App. 3d 1003 (1981)........................................................16 Rand Corp. v. Yer Song Moua, 559 F.3d 842, 845 (8th Cir. 2009)........................19 Riegel v. Central Hanover Bank & Trust Co., 266 App. Div. 586...................22, 23 Roberts v. Fleet Bank, 342 F.3d 260, 266 (3d Cir. 2003).......................................20 Robi v. Five Platters, 838 F.2d 318; 1988 U.S. App. LEXIS 970; 5 U.S.P.Q.2D (BNA) 1709.............................28 Speelman v. Pascal, 10 N.Y.2d 313, 318-320.........................................................21 United States v. Gould (In re Gould), 401 B.R. 415, 425 n.14 (9th Cir. BAP 2009)................................................10 United States v. Hinkson, 585 F.3d 1247, 1261-63 (9th Cir. 2009) (en banc).........3 US Bank National Association, Trustee vs. Antonia Ibanez, and a consolidated case for ABFC 2005-OPT1 Trust, ABFC Asset Backed Certificates, Series 2005-OPT1.......................................26 -iv- Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 5 of 42 Valley Forge Christian Coll. V. Am. United for Separation of Church and State, 454 U.S. 464, 472 (1982)...................................................................................26 Vincent v. Putnam, 248 N.Y. 76, 82-84 (N.Y. 1928)..............................................22 Vincent v. Rix, 248 N.Y. 76, 83..............................................................................22 Warth v. Seldin, 422 U.S. 490, 498 (1975)............................................................26 STATUTES California Code 2932.5.........................................................................................17 California Commercial Code 1201(21)(A)............................................................14 California Code of Civil Procedure 760.010 et. seq.............................................25 California Uniform Commercial Code 3201 et. seq.............................................13 California Commercial Code 1-201.....................................................................13 California Commercial Code 3-305 to 3-309.....................................................17 California Commercial Code 3-602 to 3-604.....................................................14 California Commercial Code 3817 .......................................................................25 Fed. Rules of Bankruptcy Procedures 3001............................................................29 Fed. Rules of Bankruptcy Procedures 7001....................................................5,13,14 Fed. Rules of Bankruptcy Procedures 8010..............................................vii.,viii, ix. Fed. Rules of Bankruptcy Procedures 8013..............................................................3 Federal Rule Civil Procedure 7.1..............................................................................8 Fed. Rules of Civil Procedure 17...........................................................................26 Federal Rules of Civil Procedure 57.......................................................................14 11 U.S.C. 362(c)(2)(C)...........................................................................................5 11 U.S.C. 362(d)..................................................................................................1, 4 11 U.S.C. 362(g) ..................................................................................................12 11 U.S.C. 506..................................................................................................13, 14 11 U.S.C. 554(b) ....................................................................................................5 15 U.S.C. 1601 .......................................................................................................1 -v- Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 6 of 42 Chapter 7 of Title 11 U.S.C.......................................................................................4 28 U.S.C. 158..........................................................................................................2 28 U.S.C. 2201(a) .................................................................................................14 AUTHORITIES Black's Law Dictionary 264 (8th ed. 2004) ............................................................10 Collier on Bankruptcy, supra, at para. 3.03[7][d][iii] n.213...................................18 L. King, 2 Collier on Bankruptcy, para. 301.07-.08 (15th ed. 1983)......................18 R. Levin, Bankruptcy Appeals, N.C.L. Rev. 967, 985 & n.140 (1980)..................18 Restatement (Third) of Property (Mortgage) 5.4 cmt. a (1997).....................11, 18 Richard R. Powell, Powell on Real Property, 37.27[2] (2000). ..........................12 -vi- Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 7 of 42 CERTIFICATION REQUIRED BY BAP RULE 8010(a)-1(b) CERTIFICATION AS TO INTERESTED PARTIES The undersigned certifies that the following parties have an interest in the outcome of this appeal. These representations are made to enable judges of the Panel to evaluate possible disqualification or recusal: BRIAN WILLIAM DAVIES (Plaintiff-Appellant) DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE OF THE INDYMAC RESIDENTIAL ASSET SECURITIZATION TRUST 2007-A-5, MORTGAGE PASS THROUGH SERIES 2007-E, UNDER THE POOLING AND SERVICING AGREEMENT DATED MARCH 1, 2007 (Defendant-Appellee) Onewest Bank, FSB (Agent of Appellee) Submitted on June 16, 2011 ___________________________ Gary Harre, Esq. -vii- Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 8 of 42 STATEMENT REGARDING FORM OF BRIEF I certify that this brief complies with the form requirements as set forth in 9 th Cir. BAP R. 8010(a)-1 because this brief has been prepared in proportional spaced typeface using Microsoft Word in 14 point Times New Roman, with one-inch margins and clearly printed on white paper, 8 inches by 11 inches. STATEMENT REGARDING LENGTH OF BRIEF I certify that this brief complies with limitation set forth in 9 th Cir. BAP R. 8010(c)-1 because it does not exceed thirty pages. STATEMENT REGARDING ORAL ARGUMENT Appellant respectfully requests oral argument. APPLICABLE STATUTES AND RULES Pursuant to Rule 8010(b) of the Federal Rules of Bankruptcy Procedure, the following statutes and rules are at issue in this appeal and are provided in pertinent part as follows: 1) 11 U.S.C. 362 Automatic Stay: 2) Fed. Rules of Civil Procedure 17(a)(1)8 (made applicable by Rule 7017) for purposes of obtaining relief from stay under 11 U.S.C. 362(d). 3) Federal Rules of Bankruptcy Procedure 7001: (2) to determine the validity, priority, or extent of a lien or other interest in property,. under Rule 4003(d), (6). (7) to obtain an.equitable relief,(9) to obtain a declaratory judgment of the .... 4) 28 U.S.C. 2201(a) provides: ( Declaratory Judgment Act ) In a case of actual controversy within its jurisdiction ..interested party seeking such declaration, whether or not further relief is or could be sought 5) NewYork Trust Laws: a common lawtrust created pursuant to the laws of the State of New York. 6) California Civil Code Section 2932.5: where a power to sell real property is -viii- Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 9 of 42 given to a mortgagee, or ..an instrument intended to secure the payment ...The power of sale ...if the assignment is duly acknowledged and recorded. 7) California Code of Civil Procedure 1060 et. seq. as follows:"The remedies..chapter are cumulative, and shall not be construed as restricting any remedy, provisional ..., provided by law for the benefit of any party to such action, and no judgment under this chapter shall preclude any party from ..additional relief based upon the same facts." 8) Federal Rules of Civil Procedure (hereinafter "FRCP") 57. The request for declaratory relief is, among other things, a safeguard in the event that only a judicial declaration will accomplish the intent to give the law full force and affect to establish the rights and legal relationships between the parties and the various issues raised in the Complaint. 9) 15 U.S.C. 1641 (G): Notification of Sale or Transfer of Mortgage Loans. (G) Notice of New Creditor.- (1) in General. ...this title, not later than 30 days after the date on which a mortgage loan is sold or otherwise transferred ......including (A) the identity...new creditor; (B) the date of transfer; (C) how to reach a... on behalf of the new creditor; (D) ..transfer of ownership of the debt is recorded; and (E) any other relevant information.. the new creditor. 10) Uniform Commercial Code 1-201, 3-201-3-204, 3-305-3-309, 3- 602-3-604, 9-102, 9-109, 9-203 CERTIFICATE REQUIRED BY 9 th CIRCUIT BAP R. 8010(a)-1-(c) The undersigned certifies that there are no known relates cases and appeals. June 16, 2011 _________________________________ Gary Harre, Esq. -ix- Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 10 of 42 ISSUES PRESENTED FOR REVIEW 1. Whether the Bankruptcy Court in Granting Deutsche Bank s Motion for Judgment on the Pleadings abused its discretion. 2. Whether the BankruptcyCourt committed clear error in Denying Davies' Motion for Judgment on the Pleadings with prejudice following prior judicial determination that Deutsche Bank had no constitutional or prudential standings to seek relief sought in the prior Motions under 11 U.S.C. 362(d). 3. Whether the Bankruptcy Court committed clear error in finding that the doctrines of Res Judicata, Collateral Estoppel and Laches were not applicable. 4. Whether the Bankruptcy Court committed clear error in finding that Davies' Declaratory Relief requests to determine validity of liens under Bankruptcy Codes is duplicative of Quiet Title claim. 5. Whether the Bankruptcy Court committed clear error in finding that violation of the Truth and Lending Act found at 15 U.S.C. 1601 et. seq. requires Davies to plead actual general damages or whether statutory damages are sufficient to sustain statutory claims. 6. Whether the Bankruptcy Court committed clear error in dismissing Davies Quiet Title claim with prejudice when prior ruling has determined that Deutsche Bank has no legal standing to assert claims as a secured party under the Deed of Trust. STATEMENT OF JURISDICTION Brian W. Davies (hereinafter Debtor, Plaintiff or Appellant ) is the Debtor in the Bankruptcy Case designated as In re Brian W. Davies, Case No. 6:10- bk-3700-SC(Bankr. C.D. Cal.), and Plaintiff in the Adversary Case Brian W. Davies V. Deutsche Bank National Trust Company (hereinafter Deutsche Bank or 1 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 11 of 42 DBNTC ) et. al. Case No. 6:11-ap-01001 (Bankr. C.D. Cal.). (Exhibit Tab 12, (hereinafter Ex 12), Excerpts of Record (hereinafter ER ) ER 0146 to ER 0167) Appellant s final amended schedules designate that the loan on his primaryresidence property, is disputed and unsecured. Appellant Petitions the Bankruptcy Appellate Panel of the United States Court of Appeals for the Ninth Circuit to review the Bankruptcy Court s ruling on his Adversary Complaint dismissal with prejudice. Final Orders were entered with prejudice on May 10, 2011 Granting the Defendant DBNTC Motion for Judgment on the Pleadings (hereinafter MJOP ) (Ex 36, ER 0870 to ER 0872) and Denying Plaintiff's Motion for MJOPor Alternatively, SummaryAdjudicationagainst DBNTC with prejudice. 1 (Ex 38, ER 0886 to ER 0888) (the Orders ) Appellant Brian W. Davies timely filed his Notice of Appeal on May 6, 2011. (Ex 35, Excerpt of Records (hereinafter ER ) ER 0866 to ER 0868). This Court has jurisdiction to hear appeals fromthe bankruptcy court pursuant to 28 U.S.C. 158(a)(1), because this appeal is taken from final orders issued by the bankruptcyjudge granting Defendants MJOP and denying the Appellant s MJOPwith prejudicewhicheffectivelydismissed Appellant s AdversaryComplaint withprejudice. See In re Natl Environ. Waste Corp., 129 F.3d 1052, 1054 (9th Cir. 1997) (citing In re Conejo Enters., 96 F.3d 346, 351 (9th Cir. 1996). This Appeal arises from the following Bankruptcy Court: United States Bankruptcy Court-Central District of California (Riverside) Honorable Thomas B. Donovan (presiding Until January 2011) Honorable Scott C. Clarkson Federal Courthouse 3420 Twelfth Street Riverside California 92501 1 in the United States Bankruptcy Court for the Central District of California Riverside Division ("the "Bankruptcy Court") 2 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 12 of 42 STANDARD OF APPELLATE REVIEW The Appellate Court may reviewfor abuse of discretion pursuant to Federal Rule of Bankruptcy Procedure 8013. In the 9 th Circuit, where there are mixed questions of fact and law, the appellate court may conduct a de novo review. Boone v. United States, 944 F.2d 1489, 1492 (9 th Cir. 1991); In re Lee, 179 B.R. 149, 155 (Bankr. 9 th Cir. 1995) The abuse of a discretion test involves two distinct determinations: first, whether the court applied the correct legal standard; and second, whether the factual findings supporting the legal analysis were clearly erroneous. United States v. Hinkson, 585 F.3d 1247, 1261-63 (9th Cir. 2009) (en banc). If the court failed to apply the correct legal standard, then it has "necessarily abused its discretion." Cooter & Gell v. Hartmarx Corp., 946 U.S. 384, 405 (1990) This Appellant hereby first asks the court to address whether the Bankruptcy Court abused its discretion in dismissing the complaint without leave to amend. Second, the Appellant requests that the Bankruptcy Appellate Panel review whether Onewest Bank, FSB (hereinafter Onewest ) acted as the agent for Deutsche Bank and whether Deutsche Bank was in privity with both of Onewest s Denied Motions for Relief from Stay (hereinafter MFRS ). Third, the Appellant advances the proposition that the evidence provided to the bankruptcy court was conclusive as a matter of law to determine that the Appellee was "not the proper holder" or "beneficiary entitled to payment of the promissory note" and did not "hold the properly assigned Security Instrument. STATEMENT OF THE CASE A. THE COURTDENIEDONEWEST AS AGENTFORDBNTCMFRS The Appellant challenges Deutsche Bank National Trust Company s 3 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 13 of 42 (hereinafter DBNTC ) 2 status as a secured creditor. DBNTCfailed to convince the Bankruptcy Court of any legal standing in two Denied MFRS under 11 U.S.C. 362. (Ex 9, ER 0124 to ER 0129) By way of history, shortly after Plaintiff filed for Chapter 7 pursuant to the Code, Onewest Bank FSB (hereinafter Onewest ) filed a MFRS ( Ex 1, ER 0002 to ER 0038) and Debtor Objected ( First Objection ). (Ex 2, ER 0040 to ER 0062) Prior to the hearing on the initial Onewest Motion (after reviewing Appellant s objection thereto), Onewest reconfigured itself as Onewest as servicing agent for DBNTC. This newly transformed Movant filed a Second MFRS, (Ex 3,4, ER 0064 to ER 0097) and Debtor filed an Objection ( Second Objection ) to include the New Movant DBNTC. (Ex 4, ER 0098 to ER 0108) No reply papers were filed by Movants to either of the Appellant s Objections. The Hearing on these contested Motions was held concurrently. The consolidated MFRS were Denied. 3 The Second Objection included as exhibits a first proffered Assignment dated August 10, 2009 (Ex 2, ER 0057) and a second alleged Assignment of the DOT dated September 20, 2010. (Ex 2, ER0058). These were part of the consolidated record reviewed bythe Honorable Thomas B. Donovan. The Court s Order Denying the MFRSwas served on DBNTC s Trust Administrator. (Ex 9, ER 0127 and ER 0129) Onewest and DBNTC failed to file any amended MFRS and the bar date for filing a Proof of Claim has expired. DBNTC did not appeal. DBNTC failed on the record to demonstrate there was a proper conveyance 2 as Trustee of the Indymac Residential Asset Securitization Trust 2007-A5 (hereinafter "RAST 2007-A5"), Mortgage Pass-Through Series 2007-E, under the Pooling and Servicing Agreement dated March 1, 2007 (Ex 13, ER 0169 to ER 0386) 3 The Court made changes on the proposed order to include a finding of fact that "Onewest" and "Onewest as Agent of DBNTC" lacked evidence of Standing, and that the declarations and the proffered documents described as "Assignment of the Deed of Trust" (hereinafter "DOT") lack credibility. (Ex 9, ER 0124 to ER 0129) 4 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 14 of 42 of the Promissory Note (and DOT) as outline in the RAST 2007-A5 Pooling & Servicing Agreement ( PSA ). 4 No newsupportive documents were presented in the interim to suggest that DBNTC is a creditor at all or had any standing whatsoever. B. THE APPELLANT FILED AN ADVERSARY AGAINST DBNTC TO DETERMINE THE VALIDITY OF ANY LIEN OR CLAIMS Appellant's Adversary Procedure was filed in part to determine the status and validity of DBNTC's purported secured claim under Federal Rules of Bankruptcy Procedure 7001. (Ex 12, ER 0146 to ER 0168) The Appellant has obtained an order for abandonment 11 U.S.C. 554(b) and no discharge of debt has occurred (Ex 11, ER 0142 to ER 0144) it appears that the Automatic stay remains in effect in accordance with 11 U.S.C. 362(c)(2)(C). In re Perry (1983, DC Md) 29 BR 787, 9 CBC2d 93 ( abandonment of property did not terminate an automatic stay.). C. THECOURTERREDINGRANTINGDEUTSCHEBANK'SMJOPAND DENYINGAPPELLANTS MJOPWITHPREJUDICEANDERRORIN LAW IN DENYING CLAIMS The Panel should find that the Bankruptcy Court abused its discretion in granting DBNTC s Judgment onthe Pleadings and dismissing Plaintiff s MJOP with prejudice, and made numerous errors set forth in The Statement of Issues Presented For Review. This panel should reverse the Bankruptcy Courts Orders, since the record of evidence (including the Securities and Exchange filings, MERS subpoenas, and DBNTC subpoenas) does not support a finding that DBNTC was a properly perfected secured creditor holding a legitimately conveyed promissory note or entitled to a Judgment on the Pleadings. 4 Section 2 Conveyance of the Mortgage Loans for RAST 2007-A5. (Ex 13, ER 0227 to ER 0235) 5 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 15 of 42 STATEMENT OF FACTS A. THE CHAPTER 7 BANKRUPTCY CASE The Appellant is an individual, and debtor of the within captioned bankruptcy case, by voluntary petition. 5 On November 16, 2006, Plaintiff obtained a loan of $441,350 from an undisclosed and unrepresented source. However, Universal American Mortgage Companyof California (hereinafter UAMCC ) was represented to be the creditor secured by a first deed of trust (hereinafter DOT ). 6 On July 14, 2009, a Notice of Default was recorded by an agent of an unknown beneficiary. (Ex 14, ER0418 to ER0420) Subsequently on August 20, 2009, a purported Assignment of DOT to DBNTC was recorded. (Ex 14, ER 0421) Then on October 16, 2009, a Substitution of Trustee was recorded. (Ex 14, ER 0422) On September 20, 2010 a Second Assignment of the DOT was proffered as part of the Motions for Relief from Automatic Stay(hereinafter MFRS ). ( Ex 14, ER0424) On August 2, 2010 a Notice of Trustee Sale was filed. (Ex 21, ER 0651 to ER0652) Plaintiff filed his Chapter 7 petition on August 31, 2010 listing the loan on the subject property as unsecured and disputed on the amended schedules. B. ONEWEST&ONEWESTAGENTDBNTCDENIEDMFRS. On September 23, 2010, Onewest Bank (hereinafter Onewest ) filed an MFRS with respect to the Subject Property in the main Case No. 6:10-bk-37900. (Ex one, ER 0002 to ER 0039) Debtor filed an Objection ( First Objection ) on October 6, 2010. (Ex 2, ER 0039 to ER 0063) Onewest filed a second Motion on October 19, 5 For relief under Chapter 7 of the Bankruptcy Code Central District of California, Riverside Division Case No. 6:10-bk-37900. . 6 43277 Sentiero Drive, Indio, California. (hereinafter "Subject Property") ( Ex 14, ER 0400 to ER 0417). 6 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 16 of 42 2010 indicating that it was the servicing agent for Deutsche Bank. (Ex 3, ER 0063 to ER 0086 and ER 0086 to ER 0098) Debtor filed an objection ( Second Objection ) on November 5, 2010 to address the filing of the new Movant Deutsche Bank. (Ex 4, ER 0098 to ER 0108) On January 7, 2011, the Court entered an order denying the concurrently contested MFRS in which the Court noted that: 1) Onewest Bank, and OneWest Bank as Agent for Deutsche Bank lack standing. 2) Movant's Declaration Lacks Credibility, having signed both as an employee of Movant and as an agent for Mortgage Electronic Registration Systems, Inc. (hereinafter MERS") (Ex 9, ER 0124 to ER 0129) C. APPELLANT FILED AN ADVERSARY AGAINST DBNTC. On January 2, 2011, Appellant filed an Adversary Complaint to determine the status of any adverse interest held by DBNTCand to determine the validity of any lien or claims of DBNTC. (Ex 12, ER0146 to ER0168) Appellant concurrently filed Request for Judicial Notice (hereinafter RJN) #1, of the Securities and Exchange Commission ( SEC ) public filings associated with RAST 2007-A5. 7 RJN #2 requested judicial notice of the land title records. (Ex 14, ER 0427 to ER 0441) On February4, 2011, DBNTCanswered the complaint. (Ex 15, ER0426 to ER 0443) The Scheduling and Case Management Order was filed on March 14, 2011. 8 (Ex 17, ER 0461 to ER 0467) On April 5, 2011 DBNTC filed a Motion for Judgment on the Pleadings (hereinafter MJOP ) (Ex 20, ER 0580 to ER 0593) with 7 These documents included the investor offering documents or "Prospectus" as well as the formation documents creating RAST 2007-A5, including the Pooling and Servicing Agreement (hereinafter "PSA"). (Ex 13, ER 0170 to ER 0385) 8 On February 2, 2011 reassignment was done by administrative order from the Honorable Thomas B. Donovan to the Honorable Scott C. Clarkson. 7 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 17 of 42 RJN #6. 9 (Ex 21, ER 0595 to ER 0654) Plaintiff filed a MJOP or alternatively for Summary Adjudication and Judgment against DBNTC. 10 (Ex 22, ER 0656 to ER 0670) Plaintiff filed Opposition to the MJOP (Ex 23, ER 0671 to ER 0674) and Objection to DBNTC RJN #6. (Ex 24, ER 0677 to ER 0680) DBNTC filed Opposition to the MJOP. (Ex 25, ER 0682 to ER 0703) Plaintiff filed Reply to the Opposition to Plaintiff s MJOP. (Ex 27, ER 0737 to ER 0754) Plaintiffs filed a Request to Strike for Failure to Comply with Federal Rule Civil Procedure 7.1 and Local Rule 7.1-1. (Ex 29, ER 0761 to ER 0766) Initial Disclosures of Defendant DBNTC was served on Plaintiff. (Ex 30, ER 0766 to ER 0771) DBNTC replied in Supported of the MJOP. (Ex 31, ER 0773 to ER 0779) DBNTC filed an Objection to Plaintiff RJN #four. (Ex 32, ER 0781 to ER 0786) Plaintiff replied to DBNTC Objection to RJN #four (Ex 33, ER 0787 to ER 0849), and then filed a Supplemented a reply to the Opposition to Plaintiff s MJOP. (Ex 34, ER 0850 to ER 0865) D. DISPOSITION OF THE ADVERSARY COMPLAINT. The combined MJOP was heard May 3, 2011 and Orders entered on May 10, 2011. DBNTC s motion was granted (Ex 36, ER 0870 to ER0873) Memorandumof Opinion. (Ex 37, ER 0873 to ER 0884) Plaintiff's Motion was Denied with prejudice (Ex 38, ER0885 to ER0889) Memorandumof Opinion. (Ex 39, ER 0890 to ER 0901) Plaintiff timely filed a Notice of Appeal on May 6, 2011 to the Bankruptcy Appellate Court (hereinafter "BAP") as BAP Case No. CC-11-1221. (Ex 9 These land title records are identical (RJN #6 and RJN #7), and include the same records as RJN #2 excepting the Second Assignment of the Deed of Trust, and adding a Notice of Sale. 10 The filing by Plaintiff was Motion for Judgment on the Pleadings or alternatively Summary Adjudication and Judgment against Deutsche Bank (hereinafter MJOP ) 8 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 18 of 42 35, ER 0866 to ER 0868) Plaintiff filed an Emergency Motion to Stay pending Appeal. (Ex 40, ER 0902 to ER 0922) On May 17, 2001 the Motion was denied. (Ex 45, ER 0950 to ER 956) E. THEPSA, DBNTCBANKRUPTCYSUBPOENARESPONSE, MERS SUBPOENA, THEMERS' AUDITTRAILANDTHELANDTITLERECORDS WERE JUDICIALLY NOTICED AS PART OF THE EVIDENCE RECORD. The Plaintiff s 1) RJN #1 11 (Ex 13, ER 0169 to ER 0386); 2) RJN #2, Land Title Records (Ex 14, ER0387 to ER0425); 3) RJN#3, BankruptcySubpoena MERS 12 (Ex 16, ER0444 to ER 0461); 4) RJN # 4, Bankruptcy Subpoena DBNTC 13 (Ex 18, ER 0468 to ER 0528); 5) RJN #5 14 (Ex 19, ER 0528 to ER 579); DBNTC s RJN #6, #7. 15 (Ex 26, ER 0704 to ER 0736) The Subject Property was Abandoned 11 U.S.C. 544 (b) (Order). 16 11 Pooling and Servicing Agreement (hereinafter "PSA") for RAST 2007-A5 from SEC. 12 "Audit Trail" by Mortgage Electronic Registrations Systems, Inc. (hereinafter "MERS") of the purported 1st and 2 nd promissory notes including the Transfer of Servicing ( TOS ) and Transfer of Beneficiary ( TOB ). Document is listed from current to past for reference. 13 Deutsche National Bank as Trustee of the Indymac Residential Asset Securitization Trust 2007-A5, Mortgage Pass-Through Series 2007-E, under the Pooling and Servicing Agreement dated March 1, 2007 subpoena of records prior to adversary filing. 14 Central District of California Riverside Bankruptcy Case No. 6:10-bk-37900 15 The land title records are identical for each notice 16 Additionally it should be noted that to pursue the Davies Adversary, Appellant Davies with the consent of the Trustee filed for abandonment of his property pursuant to 11 U.S.C. 544 (b) (Ex 10, ER 0130 to ER 0141), and on April 7, 2011 the Order Granting Debtor's Motion to Compel Abandonment of the Property by the Trustee was granted and entered. (Ex 11, ER 0141 to ER 0145) 9 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 19 of 42 ARGUMENT Appellant s AdversaryMJOPwas Denied with prejudice, and DBNTC s MJOP was granted. The Record indicates that Onewest acted as the agent of DBNTCin the denied MFRS, therefore the granting of DBNTC s MJOP was not supported by the law or the record. (Ex 46, ER 0960, Line 13 to ER 0964, Line 19) DBNTC s by its agent Onewest clearly filed the MFRS against the debtor and the Honorable Judge Thomas B. Donovan s court held that it did not have standing. A. ONEWEST AND DEUTSCHE BANK POSSESS NO COLORABLE CLAIM. 17 In order to seek relief fromthe stay, a Movant must have a "Colorable Claim" in the property protected by the automatic stay. In re Wesband, 427 B.R. 13, 18 (Bankr. D. Ariz 2010) (Citing In re Wilhelm, 407 B.R. 392, 400 (Bankr. D. Idaho. 2009). All that a bankruptcy court must do before granting relief from the stay is determine whether the moving creditor has presented a colorable claim that stay relief is warranted. Biggs v. Stovin (In re Luz Int'l, Ltd.), 219 B.R. 837, 842 (9th Cir. BAP 1998); United States v. Gould (In re Gould), 401 B.R. 415, 425 n.14 (9th Cir. BAP 2009) Even so, the moving party must establish a prima facie case of its claim or rights against a debtor or its estate to seek relief from stay. In re Bialac, 694 F.2d 625, 627 (9th Cir. 1982); In re Aniel, 427 B.R. 811, 816 (Bankr. N.D. Cal. 2010). A prima facie case of standing requires the moving party demonstrate an undisputed interest in the bankruptcy case that is hindered by the automatic stay. Standing is lacking where a secured creditor cannot present the rudimentaryelements of its claim. In re Gavin, 319 B.R. 27, 32 (BAP 1st Cir. 2004) (holding the moving 17 Black's Law Dictionary 264 (8th ed. 2004) defines a colorable claim as "a claim that is legitimate and that may reasonably be asserted given the facts presented and the current law (or a reasonable and logical extension thereof). 10 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 20 of 42 party could not trace the chain of title through valid endorsements). There are two threshold questions for establishing standing: (1) Has the Movant established an interest in the promissory note? And (2) Is the Movant entitled to enforce the note? In re Wilhelm, 407 B.R. 392, 398 (Bankr. D. Idaho 2009) ("each Movant must show that it has an interest in the relevant note, and that it has been injured by debtor's conduct"). The evidence which was presented to the court was sufficient to determine the issue of standing, chain of title or have an evidentiary hearing and dismissal with prejudice is an abuse and contrary to the law and facts. DBNTC through its agent Onewest brought contested MFRS and the Honorable Thomas B. Donovan s Court, in denying DBNTC s Motion essentially determined fromthe court s record that DBNTChas No Colorable Claim based on the assignments of the DOT 18 or the submitted endorsed promissory note. 19 In essence, the Donovan Court determined that DBNTC was not entitled to enforce the rights provided to the purported original lender in the Note and/or in the DOT. 20 (Ex 9, ER 0124 to ER 0129) B. DBNTC DID NOT FILE A THIRD MFRS DESPITE NOTICE, NORSUPPLYANYADDITIONALDISCOVERYDOCUMENTS. DBNTC did not submit a third MFRS and as such sat on their rights. On the record the Court passively questioned DBNTC with regards to Onewest s agency 18 There were two assignments considered on the record for MFRS one dated August 20, 2009. (Ex 2, ER 0057) and one dated September 20, 2010 (Ex 2, ER 0058) 19 The promissory note was entered for the MRFS (Ex 1, ER 0031 to ER 0035) and submitted by DBNTC in their Bankruptcy Subpoena Response (Ex 18, ER 0476 to ER 0480) 20 When a note is split from a deed of trust "the note becomes, as a practical matter, unsecured." Restatement (Third) of Property (Mortgage) 5.4 cmt. a (1997). Additionally, if the deed of trust was assigned without the note, then the assignee, "having no interest in the underlying debt or obligation, has a worthless piece of paper." 11 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 21 of 42 status. 21 It is clear from the record that Deutsche Bank responded to a Subpoena. 22 It is also clear from the record that RAST 2007-A5" Trust Administrator Jennifer Van Dyne received the Subpoena. (Ex 6, ER 0112) DBNTC s denied MFRS order was served on the Trust Administrator all prior to the Adversary Complaint. 23 C. THEDONOVANCOURTDETERMINEDTHEASSIGNEDDOT TO BE INEFFECTIVE. Since the assignment of the DOTwas ineffective as determine by the Donovan Court in its rulings on the MFRS then DBNTC's standing would depend on the validity of the Endorsements. 24 DBNTC represented itself to be the holder of the Note by virtue of a blank endorsement. (Ex 18, ER 0476 to ER 0480) Appellant previously discussed this promissory note and the purported endorsements in detail in his Objections to the MFRS and refers this court to those discussions and incorporates them herein by reference. 25 An Adversary is properly done by the 21 (Ex 46, ER 0972, line 17 to ER 097, line 3) Transcript of May 3, 2011 Hearing whereby The Honorable Scott C. Clarkson attempts to Question Deutsche Banks agency Relationship with Onewest. 22 (Ex 32, ER 0780 to ER 0786) Deutsche Bank Bankruptcy Subpoena responses. 23 (Ex 9, ER 0124 to ER 0129) Deutsche Bank was served the Denied Order by proof of Service document sent by The Honorable Thomas B. Donovan Court Clerk. 24 The denial of movant's proof of claim suggests , the doctrine that security depends on the debt it secures controls, and with the debt disallowed, the movant normally cannot pursue the real property security outside of bankruptcy. See 4 Richard R. Powell, Powell on Real Property, 37.27[2] (2000). 25 In the first Objection to the MFRS the note was discussed in detail and according the UCC (also in the second Objection to the newly added Movant Deutsche Bank) and is incorporated here. (Ex 2, ER 0044, Line 10 to ER 0046, line 23) and (Ex 5, ER 0103, Line 1, to ER 0108, Line 2). 12 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 22 of 42 debtor or trustee who is challenging the lien's validity, not the creditor. 26 Cen-Pen Corp. v. Hanson, 58 F.3d 89, 92 (4th Cir. 1995). Indeed, 11 U.S.C. 362(g) expressly places the burden of proof on the party opposing the MFRS on all issues except proving debtors' equity in the property. D. UNDER FEDERAL BANKRUPTCY RULE 7001, AN ADVERSARY PROCEEDINGMAYBE INITIATEDTODETERMINETHE VALIDITY, PRIORITY, OREXTENTOFALIENOROTHERINTERESTIN PROPERTY. THE COURT ERRED AS A MATTER OF LAW IN DISMISSING THE FIRST AND SECOND CLAIMS. When a debtor is seeking to invalidate a creditor's lien, the proper procedure is for the debtor to file an adversary proceeding. See In re Kemp, 391 B.R. 262, 263 (D.N.J. 2008). Because the debtor is the party seeking to invalidate the lien, the debtor is the party who has the burden of filing an adversary complaint. See In re Mansaray-Ruffin, 530 F.3d 230, 237-38 (3d Cir. 2008); In re Kinion, 207 F.3d 751, 757 (5th Cir. 2000) (Debtor needed to file adversary); Cen-Pen Corp., 58 F.3d at 93 (finding debtors should have taken the "affirmative step" of filing an adversary proceeding to challenge the validity of a lien). The Appellant was compliant with F.R.B.P. 7001. DBNTC seeks to have it both ways in Court. How can DBNTC point to Onewest as though they do not know what is being filed in the courts? Other bankruptcycases involving RAST2007-A5 suggest that Onewest is DBNTC s Agent. 26 Plaintiff filed his Adversary for Declaratory Relief and to Determine the Validity of the Secured Claims proffered by Onewest individually and Onewest as Agent for DBNTC under F.R.C.P. 7001and 11 U.S.C. 506. 13 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 23 of 42 27 Plaintiff filed this Appeal (Ex 35, ER 0866 to ER 0869) to reverse the bankruptcy court s findings and to obtain a finding that Onewest is the Agent in privity with DBNTC as an unsecured purported creditor and to grant Plaintiff s MJOP or remand to amend the complaint and for further adjudication. LEGAL ARGUMENTS A. THE COURT ERRED IN DISMISSING THE CLAIMS FOR DECLARATORYRELIEFANDTODETERMINETHEVALIDITY, PRIORITY, OR EXTENT OF A LIEN OR OTHER INTERESTS. 28 The Appellant has a right to a "Declaratory Judgment" as is necessary to effectuate the rights and legal status of Plaintiff as pertains to the Subject Property, regardless of whether or not other remedy exists to accomplish the ends that Plaintiff is seeking. The validity of the holdership and ownership of the Note, is determined by following Uniform Commercial Code ("UCC") statutes. 29 The existence of another adequate remedy does not preclude a declaratory judgment that is otherwise appropriate. 30 The Declaratory Judgment Act 28 U.S.C. 2201(a) provides for such. 31 American States Ins. Co v. Kearns, 15 F.3d 142, 143-144 (9 th Cir. 1994) As to a controversy to invoke declaratory relief, the question is whether there is a 27 See Appellant s RJN #1 filed with BAP collecting bankruptcy cases involving Onewest Bank working and filing MFRS as agent for DBNTC including 3 cases with RAST 2007-A5. 28 F.R.B.P. 7001 AND 11 U.S.C. 506 29 California Commercial Code 1201, 3201-3207, 3301-3311, 3602, 9-109. See also: In re Veal, 9th Circuit BAP Nos. AZ-10-1055, AZ-10-1056, (June 10, 2011). 30 Federal Rules of Civil Procedure (hereinafter "FRCP") 57. 31 In a case of actual controversy within its jurisdiction any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. 14 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 24 of 42 substantial controversy, between parties having adverse legal rights, or sufficient immediacy and reality to warrant the issuance of a declaratory judgment. Maryland Cas. Co. V. Pacific Coal & Oil Co., 312 U.S. 270 (1941). Moreover, declaratory relief is only appropriate (1) when the judgment will serve a useful purpose in clarifying and settling the legal relations in issue, and (2) when it will terminate and afford relief from the uncertainty, insecurity, and controversy giving rise to the proceeding. Guerra v. Sutton, 783 F.2d 1371, 1376 (9 th Cir. 1986) Plaintiff has a right to declaratory rulings, under the facts of this case, and supported by prior rulings and evidence that: 1) the assignment of the DOT to DBNTC did not confer Colorable claim; 2) the assignments of the DOT are not credible, 3) DBNTC does not have legal standing and, 4) DBNTC s position in other Bankruptcy Cases would need to be consistent. 32 Evidentiary Irregularities are apparent in the two Assignments of the DOT First on September 20, 2010, a purported Assignment of DOTalong with the note to DBNTCwas done by MERS as Nominee of Universal American Mortgage Company of California, a California Corporation (hereinafter UAMCC ) and submitted for the MFRS.(Ex 2, ER 0057) This assignment included the wording Brian W. Davies, a single man, as Trustor; to Universal American Mortgage Company, LLC as Trustee ( UAM ). UAM does not appear on the note or any endorsements but shows as the beneficiary in the MERS Audit Trail. (Ex 16, ER 0450) ASecond Assignment of the DOT along with the note dated on August 10, 2009 and referenced in Plaintiff s Objection to Movant Onewest s MFRS (Ex 2, ER 0058) 32 The Limited power of Attorney between Onewest and DBNTC was attached to Plaintiff's reply DBNTC's Opposition MJOP. (Ex 27, ER 0744 to ER 0754) 15 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 25 of 42 uses a different wording Brian W. Davies, a single man, as Trustor; to Universal American Mortgage Company, LLC as Trustee ( UAM ). The Appellant s MERS Subpoena result demonstrates that UAM was listed on the MERS Audit Trail as the Old Investor ( Beneficiary ) who assigned beneficial ownership to the New Investor Orchid Island TRS, LLC. , on the January 4, 2007 entries entitled Transfer of Flow TOS/TOB ( Transfer of Servicing/Transfer of Beneficiary ). (Ex 16, ER 0450) The purported endorsed note submitted by DBNTCrepresents that by an undated allonge UAMCC (Not UAM) endorsed without recourse to OpteumFinancial Services an entity which went out of business in June 2007. Such documents would appear to violate the holdings of Pribus v. Bush, 118 Cal App. 3d 1003 (1981). See (Ex 2, ER0044 to ER0048) See also: (Ex 5, ER0105, Line 3 to ER0108, Line 2). The MERS Audit Trail indicates that UAM, but not UAMCC would be the endorsing party. B. MERS ACTING AS A NOMINEE FOR A NON MEMBER UAMCC 33 The original endorsed note was submitted with the MFRS and in DBNTC s Subpoena response. The undated apparent allonge 34 to the endorsed note (Ex 18, ER 0480) makes clear that the purported Original Lender UAMCC represents to assign its interests in the Note (the endorsee Opteum Financial ceased to exist by July 2007). 35 33 (Ex 16, ER 0443 to ER 0461) (Ex 34, ER 0852, Line 5 to ER 0854, Line 16) 34 This would include checking to see if any purported allonge was sufficiently affixed as required by UCC 3-204(a).See In re Weisband, 427 B.R. 13, 19-20 (Bankr. D. Ariz. 2010); In re Shapoval, 441 B.R. 392, 394 (Bankr. D. Mass. 2010). Pribus v. Bush, 118 Cal App. 3d 1003 (1981) 35 Bonfire Of The Builders - By rushing into the mortgage business big-time, homebuilders helped fuel the housing crisis. Mara Der Hovanesian. Business Week, Aug 13, 2007 edition. Homebuilders really started to push these more aggressive mortgages down the throats of potential buyers to boost sales," says G. Hunter Haas IV, who as head of mortgage research 16 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 26 of 42 However, MERS never held UAMCC as a member as documented by MERS. 36 Furthermore at the time of the purported assignments UAMCC (nor UAM) had any interest in the note for MERS to assign. Polhemas v. Trainer, 30 Cal. 686, 688 (1866). Thus, MERS' purported assignment of the DOT and the related note as nominee for the Original Lender (UAMCC) and without a reference to either IndyMac Bank, FSB, Indymac Federal Bank FSB or Onewest appears designed to disguise rather than to illuminate the facts and lead to the conclusion that the proper assignment of the DOT was not done. See Cal. Civil Code 2932.5 See also In re Eleazar Salazar WL 1398478 (Bankr. S.D. Cal. 2011) 37 As judicially determined, DBNTCis not a holder in due course if it does not have possession of the original Note or is not the endorsee. DBNTC would need to demonstrate the transactions which would support the purchase and sales of the Note from origination until the purported assignment of the DOT along with the note. This Appellant would not be required to make payment on this basis alone, pursuant to Cal. Comm. Code 3305, which states that an obligor is not obliged to pay the instrument if the person seeking enforcement of the instrument does not have the rights of a holder in due course. If Plaintiff is not obligated to pay any underlying debt, then there is no and trading for Opteum Financial Services (OPX ) had an insider's perspective on the proceedings. Opteum has served as a middleman between Wall Street and builders. Opteum's home-loan business was going sour. The investment banks and their clients were rejecting builder-originated loans as too shaky and likely "Homebuilders were getting sloppy, and Wall Street was giving more scrutiny," Haas says. In June, 2007 Opteum decided to get out of home-loan brokering business and closed. 36 http://www.mersinc.org/ (Ex, ER 0458 to ER 0460) and in the MERS audit trail. (Ex 16, ER 0450) 37 valid foreclosure under California law requires both that the foreclosing party be entitled to "payment of the secured debt" and that its "status as foreclosing beneficiary appear before the sale in the public record title for the [p]roperty."). 17 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 27 of 42 debt for the DOT to secure, which establishes the DOT to be worthless and without legal effect. 38 Plaintiff is entitled to declaratory relief that 1) Plaintiff is not required to pay DBNTC because it did not have legal standing to assert a Colorable claim; 2) Plaintiff is not required to pay DBNTC because the Note has not been produced to support MFRS. Cal. Comm. Code 3308-3309; and 3) the DOT in this case is of no force and effect because DBNTC failed to produce evidence that it was entitled to payment. MFRS involving RAST 2007-A5 are prevalent and DBNTC would need to keep a consistent position in all MFRS. 39 An order for MFRS, is a judgment in rem, a conclusive determination of the debtor's status in bankruptcy, and res judicata between the actual parties and the proceeding to all the facts and subsidiary questions of lawon which it is based. Gratiot County State Bank v. Johnson, 249 U.S. 246, 248, 63 L. Ed. 587, 588, 39 S. Ct. 263 (1919); In re Centre de Tricot De Gaspe, Ltee., 10 Bankr. Rep. 148, 149 (Bankr. S.D. Fla. 1981); L. King, 2 Collier on Bankruptcy, para. 301.07-.08 (15th ed. 1983). Orders for relief and other final decisions in "proceedings in bankruptcy" should be treated as final and appealable as of right. 40 Plaintiff's position is supported by the filing of the promissory notes as unsecured on his amended schedule F. 38 Restatement (Third) of Property (Mortgages) 5.4 cmt. E (1997) ( in general a mortgage is unenforceable if it is held by one who has no right to enforce the secured obligation ). When a note is split from a deed of trust the note becomes, as a practical matter, unsecured. Additionally, if the deed of trust was assigned without the note then the assignee, having no interest in the underlying debt or obligation, has a worthless piece of paper. 39 Appellant RJN #1, sets forth California Bankruptcy Cases involving Onewest acting as agent for DBNTC in MFRS involving RAST 2007-A5 and where relief was given. 40 MFRS orders have a finality that may be appealed. Collier on Bankruptcy, supra, at para. 3.03[7][d][iii] n.213; R. Levin, Bankruptcy Appeals, N.C.L. Rev. 967, 985 & n.140 (1980). 18 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 28 of 42 C. STATUTORY DAMAGES ARE SUFFICIENT EVEN IN THE ABSENCE OF ACTUAL DAMAGES The Court erred in requiring Plaintiff to showthat actual damages in order to have a claim for relief 15 U.S.C. 1641 (G). (Ex 46, ER 0983, Line 9 to ER 0984, Line 8) This is an error in that 15 U.S.C. 1641 allows for Statutory Damages which are designed to be punitive to the party who violates the Statute. Statutory damages are $4,000 plus attorney fees. Plaintiff alleged and DBNTC admitted that DBNTC received an assignment of the DOT by MERS as a nominee for UAMCC on September 20, 2010, and the Deed of Trust was assigned and recordedinthe Riverside CountyLand Title Records. Complaint (Ex 12, ER 0163, 94) Answer (Ex 15, ER 0437, 94) Plaintiff alleges that transfer of the DOT as proffered on September 20, 2010 is subject to 15 U.S.C. 1641. DBNTC lacked sufficient knowledge or belief to know what documents have been sent to Plaintiff. Complaint (Ex 12, ER 0163, 95) Answer (Ex 15, ER 0437, 95) See also (Ex 46, ER0983, Line 3 to ER 0984, Line 8) But 1641(g)(1) does not merely require action from a creditor only upon a request by the obligor. Rather, 1641(g)(1) puts an affirmative obligation on the creditor to act, regardless of the obligor's conduct. By doing so, it does far more than arguably expand the list of parties who may be liable under 1641(f)(2); it changes the substantive obligations of creditors. TILA designed to protect consumers should be liberally construed. See, e.g., Hauk v. JP Morgan Chase Bank United States, 552 F.3d 1114,(9th Cir. 2009) ("To effectuate TILA's purpose, a court must construe 'the Act's provisions liberally in favor of the consumer' and require absolute compliance by creditors."); Rand Corp. v. Yer Song Moua, 559 F.3d 842, 845 (8th Cir. 2009)("TILA . . . by Congress as a consumer protection act, and its provisions, as well as Regulation 19 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 29 of 42 Z, to be construed broadly in favor of consumers."); Roberts v. Fleet Bank, 342 F.3d 260, 266 (3d Cir. 2003)("As the TILA is a remedial consumer protection statute, . . . construed liberally in favor of the consumer.") The civil liability provision of TILA was amended to afford borrowers such as Appellant a private right of action against the assignee for non compliance with this disclosure obligation. D. TRANSFERINTO A CLOSED MORTGAGE BACKED SECURITY TRUST AFTER IT IS CLOSE IS A LEGAL IMPOSSIBILITY AND IS VOID PURSUANT TO NEW YORK TRUST LAWS Transfer by MERS on behalf of a Non Member into a closed RAST 2007-A5 was legally impossible. To dismiss the Court must decide whether the facts alleged if true, would entitle Plaintiff to some formof legal remedy against the Defendant DBNTC. De La Crux v. Tormey, 582F.2d 45, 48 (1978). To dismiss with prejudice is an abuse by the Court. The misleading representations: 1) that there was a valid transfer into the Trust three years after closing dates of the trust; and 2) the inability for MERS to be a nominee of UAMCC. This would suggest that there are claims for fraudulent transfer which would be suitable for an amended complaint. The Court In re Doble 2011 Bankr. LEXIS 1149 (S.D. Cal. April 2011) looked at this issue of New York Trust Laws and suggested that even though Plaintiff is not a party to the PSA and does not have standing to interfere with trust administration, he does have standing to challenge DBNTC s and in determining if the assignment is valid under New York Trust Laws (Trust Governing Documents). The difference in Doble compared to Appellant s case was inadequate legal support dealing with the details of NewYork Trust Laws, and supportive case law. Appellant delivered details to the Court which was missing in Doble, and overlooked by the Bankruptcy Court. 20 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 30 of 42 "RAST 2007-A5 41 was formed by Agreement under New York Trust Laws any Assignment into the Trust over 720 days after Closing would result in an Internal Revenue Service ( IRS ) prohibited tax transaction for the Real Estate Mortgage Investment Conduit ( REMIC ). (Ex 13, ER 0229 ) (Ex 13, ER 0278 to ER 0279) The PSAwas constructed using NewYork Trust Laws. (Ex 13, ER0292) "RAST 2007-A5" was formed on March 1, 2007 by the execution of the Trust Agreements including the PSA. The Trust's closing date was March 29, 2007. (Ex. 13, ER 0195) RAST 2007-A5 is a common lawtrust created pursuant to the laws of the State of NewYork, and its existence and actions are governed and controlled by NewYork Law. New York Trust Law is ancient and well-settled with respect to the determination of whether an asset is trust property. 42 In order to have a valid inter vivos gift, there must be a delivery of the gift (either by a physical delivery of the subject of the gift) or a constructive or symbolic delivery (such as by an instrument of gift) sufficient to divest the donor of dominion and control over the property 43 and "what is sufficient to constitute delivery must be tailored to suit the circumstances of the case. 41 DBNTC is the Trustee of RAST 2007-A5 as admitted in Complaint at 43 (Ex 12, ER 0155). The Securities and Exchange documents for RAST 2007-A5 demonstrate that Indymac Bank FSB (succeeded in interest by Indymac Federal Bank FSB; and Onewest Bank FSB) served as the Sponsor, Seller, and Servicing Agent of "RAST 2007-A5". (Ex 13, ER 0176) Certified copies from the Securities and Exchange Commission ("SEC") of the PSA were filed with Plaintiff's Adversary Complaint and Judicially Noticed. (Ex 13, ER 0169 to ER 0385) 42 Under New York Law, the analysis of whether an asset is trust property is determined under the law of gifts (See, e.g., In re: Becker, 2004 N.Y. Slip Op. 51773U, 4 (N.Y. Sur. Ct. 2004) ("In the case of a trust where there is a trustee other than the grantor, transfer will be governed by the existing rules as to intent and delivery (the elements of a gift)."). 43 (Matter of Szabo, 10 N.Y.2d 94, 98-99; Speelman v. Pascal, 10 N.Y.2d 313, 318-320; Beaver v Beaver, 117 NY 421, 428-429; Matter of Cohn, 187 App. Div. 392, 395) as cited in Gruen v. Gruen, 68 N.Y.2d 48, 56 (N.Y. 1986) 21 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 31 of 42 The deliveryrule requires that "'[the] deliverynecessaryto consummate a gift must be as perfect as the nature of the property and the circumstances and surroundings of the parties will reasonably permit. Vincent v. Rix, 248 N.Y. 76, 83; Matter of Van Alstyne, supra, at p 309; see, Beaver v. Beaver, supra, at p 428) as cited in Gruen v. Gruen, 68 N.Y.2d 48, 56-57 (N.Y. 1986). 44 New York law is also settled that Until the delivery to the trustee is performed by the settlor, or until the securities are definitely ascertained by the declaration of the settlor, when he himself is the trustee, no rights of the beneficiary in a trust created without consideration arise. 45 The delivery necessary to consummate a gift must be as perfect as the nature of the property and the circumstances and surroundings of the parties will reasonably permit; there must be a change of dominion and ownership; intention or mere words cannot supply the place of an actual surrender of control and authority over the thing intended to be given, Vincent v. Putnam, 248 N.Y. 76, 82-84 (N.Y. 1928) Lastly, under New York Law there are four essential elements of a valid trust of personal property: (1) a designated beneficiary; (2) a designated trustee, who must not be the beneficiary; (3) a fund or other property sufficiently designated or identified to enable title thereto to pass to the trustee; and (4) the actual delivery of the fund or other 44 New York law is also settled that (1) "Until the delivery to the trustee is performed by the settlor, or until the securities are definitely ascertained by the declaration of the settlor, when he himself is the trustee, no rights of the beneficiary in a trust created without consideration arise", Riegel v. Central Hanover Bank & Trust Co., 266 App. Div. 586; Matter of Gurlitz [Lynde], 105 Misc. 30, aff'd 190 App. Div. 907, supra; Marx v. Marx, 5 Misc. 2d 42) as cited in Sussman v. Sussman, 61 A.D.2d 838 (N.Y. App. Div. 2d Dep't 1978) (2). 45 Riegel v. Central Hanover Bank & Trust Co., 266 App. Div. 586; Matter of Gurlitz [Lynde], 105 Misc. 30, aff'd 190 App. Div. 907; Marx v. Marx, 5 Misc. 2d 42) as cited in Sussman v. Sussman, 61 A.D.2d 838 (N.Y. App. Div. 2d Dep't 1978) (2). 22 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 32 of 42 property, or of a legal assignment thereof to the trustee, with the intention of passing legal title thereto to himas trustee, Brown v. Spohr, 180 N.Y. 201, 209-210 (N.Y. 1904). There is no trust under the common law until there is a valid delivery of the asset in question to the trust. Until the delivery to the trustee is performed by the settlor, or until the securities are definitely ascertained by the declaration of the settlor, when he himself is the trustee no rights of the beneficiary in a trust created without consideration arise. 46 Furthermore, when the trust fails to acquire the property, then there is no trust over that property that may be enforced. In an action against the individual defendant as trustee, based on the theory of breach of fiduciary obligation, the complaint was properly dismissed on the ground that he had acquired no title or separate control of the goods and, hence, there was no actual trust over the property to breach. Kermani v. Liberty Mut. Ins. Co., 4 A.D.2d 603 (N.Y. App. Div. 3d Dep't 1957) According to the terms of the PSA 47 all promissory notes transferred to RAST 2007-A5 are required to have a complete chain of endorsements fromthe original payee thereof to either Blank or to DBNTC as Trustee for RAST 2007-A5. (Ex 13, ER 0227 to ER0234) Each promissory note is required to have a complete chain of endorsements and to fully comply within the authorization of the Trust's activities. Under New York Trust Law, there is no effective transfer of the Plaintiff's DOT along with the Promissory Note to the RAST 2007-A5, so the Trust would not be able enforce the note. There is no effective conveyance of Plaintiff's Promissory Note to the 46 ( Riegel v. Central Hanover Bank & Trust Co., 266 App. Div. 586; Matter of Gurlitz [Lynde], 105 Misc 30, affd 190 App Div 907, supra; Marx v Marx, 5 Misc 2d 42) as cited in Sussman v. Sussman, 61 A.D.2d 838 (N.Y. App. Div. 2d Dep't 1978). 47 PSA refers to the Indymac Residential Asset Securitization Trust 2007-A5 documents filed with the SEC, and are the governing documents by which Indymac Bank FSB and its successor servicers and Deutsche Bank are to operate and such is governed by New York Laws. 23 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 33 of 42 Defendant Trust, which has claimed ownership in the MFRS. The PSA, Section 2.01 outlines the proper conveyance of the Mortgage Loans. (Ex 13, ER 0227 to ER 0230) The PSA, Section 2.02 outlines the Trustee's responsibility to confirm that the proper assignments, endorsements to showa complete chain of title is to be included and confirmed in writing. 48 (Ex 13, ER 0230 to ER 0230) It is clear that any assignment done in on either August 10, 2009 (Ex 14, ER 0421) or September 20, 2010 (Ex 14, ER 0424) would not be compliant. Further, PSA Section 2.02 states that if there is any substitution of the mortgage loan within the first 90 days it would require an "Opinion of Counsel" indicating that the loan would not create any unfavorable tax implications due to this Trust being a REMIC. (Ex 13, ER 0229) No substitution is allowed under any circumstances after 720 days of closing ( March 29, 2007") or in the case at bar after March 29, 2009. 49 The two Assignments of the purported DOT by MERS would be in contravention to the governing documents. It appears that there is no trust to enforce over the Subject Property when viewed using 48 Exhibit G-1 (Ex 13, ER 0346 to ER 0347); Form of Initial Certification of Trustee, Exhibit G-2 (Ex 13, ER 0348 to Er 0349) Form of Delay Delivery Certification; and Exhibit H (ER 13, ER 0350 to ER 0351) Form of Final Certification of Trustee which specifically states that the Trustee certifies that it has received all the documents required to convey a complete chain of title and in accordance with Section 2.02 it has received: (I) The original Mortgage Note, endorsed in the form provided in Section 2.01(c) of the Pooling and Servicing Agreement, with all intervening endorsements showing a complete chain of endorsement from the originator to the Seller.(ii) The original recorded Mortgage. (iii) An executed assignment of the Mortgage in the form provided in Section 2.01(c) of the Pooling and Servicing Agreement; provided.... showing a complete chain of assignment from the originator to the Seller. 49 The PSA requires this complete chain of endorsements to be in place by the Trust's closing date or under no circumstances later than 720 days after the Trust's closing date. Therefore the last possible day to transfer to the Trust within the terms of the Trust agreement was March 29, 2009. (Ex 13, ER 0229 ) See also: (Ex 13, ER 0278 to ER 0279) 24 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 34 of 42 the chosen New York Law. The record would be supportive at least of amendment to present more details from the present record and ongoing discovery. E. THE COURT ERRED IN DISMISSING QUIET TITLE. The DOT shows the original lien holder as Universal American Mortgage Company of California (hereinafter "UMACC"), and the two assignments of the DOT have not changed this because of their inconsistency. The beneficiary has an implied duty to correct the public record, personally or by directing the DOT trustee to act. The meaning of the rule is not that the security interest follows holder status of the note. It follows ownership of the note or the loan, of which the note is evidence. Cal. Comm. Code 3817 (Transfer of secured contract). This means that the security interest follows ownership of the loan of which the Note is merely evidence. The security interest does not extend to the "holder" of the Note, unless the holder is also the owner and as discussed fully in the recent BAP opinion. 50 California provides a means by statute to obtain Quiet Title by action against any party including any purported mortgagees, whereby one can have title decreed to be partially or completely free and clear of liens and to obtain a permanent injunction against parties claiming to hold a borrower's mortgage obligation. See Cal. Civ. P. 760.010 et. seq. A DOT that secures nothing is a cloud on title that Plaintiff seeks to be removed by quiet title. If there is a cloud on title, a party does not have to wait until harmed to protect their interest. The quiet title action challenges the rights alleged to be possessed by DBNTC, the party claiming to be the owner of the Note and loan secured by the DOT that has judicially been determined to be unenforceable or at least does not provide a colorable interest. 50 In re Veal, 9th Circuit BAP Nos. AZ-10-1055, az 10-1056, (June 10, 2011) 25 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 35 of 42 The issue of quiet title to the Subject Property involves the security interest that would only be held by DBNTC if it owns the loan. Such proof of a proper chain of endorsements and moneytransfers related to the Note would be required bylawful rights. The same would be true as to proof of whether Plaintiff is at all indebted to DBNTC, which likely involves the same inquiries, and Debtor seeks a declaration not only that Deutsche Bank has no security interest, and that nothing is owed when the proper chain of title does not exist as determined by the Massachusetts Supreme Court when presented with similar issues. 51 A Movant must have both constitutional and prudential standing and be the real party in interest under Fed. R. Civ. P. 17, in order to be entitled to lift-stay relief [citing: Kowalski v. Tesmer, 543 U.S. 125, 128-29 (2004) (quoting Warth v. Seldin, 422 U.S. 490, 498 (1975)]. Constitutional standing under Article III requires, at a minimum, that a party must have suffered some actual or threatened injury as a result of the defendant's conduct, that the injury be traced to the challenged action, and that it is likely to be redressed by a favorable decision. Valley Forge Christian Coll. V. Am. United for Separation of Church and State, 454 U.S. 464, 472 (1982). Beyond the Article III requirements of injuryin fact, causation, and redress ability, Movant must also have prudential standing, which is a judicially-created set of principles that places limits on the class of persons who may invoke the courts' powers. See Warth v. Seldin, 422 U.S. 490, 499 (1975). As a prudential matter, a plaintiff must assert "his own legal interest as the real party in interest," Dunmore v. United States, 358 F.3rd 1107, 1112 (9th Cir. 2004), as found in Fed. R. Civ. P. 17, which provides "an action must be prosecuted in the name of the real party in interest." 51 US Bank National Association, Trustee vs. Antonia Ibanez, and a consolidated case for ABFC 2005-OPT1 Trust, ABFC Asset Backed Certificates, Series 2005-OPT1; In re Kang Jin Hwang, 396 B.R. 757, 768 (Bankr. C.D. Cal. 2008) 26 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 36 of 42 In the case at bar Onewest as purported servicer did join in the purported real party in interest DBNTC after Appellant s Objection to the First MFRS. The Court made findings of facts that DBNTC was not the real party in interest and they lack standing. Other Courts have ruled on these issues. See In re Canellas, 2010 WL 571808 (Bankr. M.D. Fla. Feb 9, 2010) (Motion for Relief from stay denied after movant produced no evidence of ownership of note); See also In re Lee, 2009 WL 1917010 (Bankr. C.D. Cal, Jan. 26, 2009)(sanctioning attorney who pursued stay relief motion knowing named party lacked ownership interest in note); See also In re Fitch, 2009 WL 1514501 (Bankr. N.D. Ohio May 28, 2009)(movant never in chain of title for mortgage and note; had no standing); See also: In re Maisel, 378 B.R. 19 (Bankr. D. Mass. 2007) (servicer bringing stay relief motion failed to document standing as of time motion filed); See also In re Urdahl, 07-07227-PB7 (Bankr. S.D. Cal. June 9, 2008)(finding Deutsche Bank failed to provide evidence that it has a security interest in the property; motion for stay relief denied). The Court is referred to an Unpublished Memorandum Opinion issued by the BAP of the 9th Circuit, reflecting its Decision regarding MFRS standing issues in the Central District of California. 52 F. THE DOCTRINES OF RES JUDICATA, COLLATERAL ESTOPPEL, AND LACHES. The doc-trine of res judicata includes two distinct types of preclusion, claim preclusion and issue preclusion . Claimpreclusion "treats a judgment, once rendered, as the full measure of relief to be accorded between the same parties on the same 'claim'. Kaspar Wire Works, Inc. v. Leco Eng'g & Mach., Inc., 575 F.2d 530, 535 (5th Cir. 52 In re Fawn Ridge Partners, LP, BAP No. CC-09-1396-HPD (March 29, 2010), a case wherein the Movant bank had failed to demonstrate any standing to seek stay relief. Therein, the Panel observed that "Movant is not the payee on the Note securing the Deed of Trust nor a beneficiary under the Deed of Trust." [See: at 10]. Citing In re Wilhelm, supra, the Panel again noted that a "party seeking stay relief must establish standing and be a party in interest." Ibid at 8. 27 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 37 of 42 1978); see also McClain v. Apodaca, 793 F.2d 1031, 1033 (9th Cir. 1986). Claim preclusion "prevents litigation of all grounds for, or defenses to, recovery that were previously available to the parties, regardless of whether they were asserted or determined in the prior proceeding." Brown v. Felsen, 442 U.S. 127, 131, 60 L. Ed. 2d 767, 99 S. Ct. 2205 (1979), quoted in Americana Fabrics, Inc. v. L & L Textiles, Inc., 754 F.2d 1524, 1529 (9th Cir. 1985), and as stated in Katchen v. Landy, 382 U.S. 323 (1966). 53 The doctrine of issue preclusion prevents relitigation of all issues of fact or law that were actually litigated and necessarily decided in a prior proceeding. In both the offensive and defensive use situations the partyagainst whomestoppel (issue preclusion) is asserted has litigated and lost in an earlier action. The issue must have been actually decided after a full and fair opportunity for litigation. 54 The Court observed that offensive issue preclusion allows potential plaintiffs to benefit by waiting on the sidelines rather than joining in the first litigation. This is true because an interested observer will be able to rely on a judgment favorable to his interests against the defendant and yet not be bound by that judgment if the defendant wins. The potential for this abuse exists in a case such as the present one. Under the doctrine of res judicata a final judgment on the merits bars further claims by parties or privities based on the same cause of action. Montana v. United 53 The normal rules of res judicata and collateral estoppel apply to the decisions of bankruptcy courts. More specifically, a creditor who offers a proof of claim and demands its allowance is bound by what is judicially determined; and if his claim is rejected, its validity may not be re-litigated in another proceeding on the claim 54 Robi v. Five Platters, 838 F.2d 318; 1988 U.S. App. LEXIS 970; 5 U.S.P.Q.2D (BNA) 1709 In Parklane Hosiery Co. v. Shore, 439 U.S. 322, 58 L. Ed. 2d 552, 99 S. Ct. 645 (1979), the Supreme Court outlined some potential hazards that could arise if offensive issue preclusion were applied under inappropriate circumstances. 28 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 38 of 42 States, 440 U.S. 147. Collateral Estoppel and laches also apply as the parties and the issues are the same. The determination made with findings of fact as an appealable decision, and Deutsche Bank sat complacently while watching from the sidelines. G. THIS CASE IS ABOUT A DEFECT IN TITLE AND STANDING, AND THE EVIDENCE WAS IGNORED. The issue is not whether the Plaintiff is in default. (Ex 46, ER0974, Line 4 to ER 0981, Line 6) The issue is whether DBNTC who is not the original lender has the legal right to seek the remedy of foreclosure by holding the proper chain of title of the Assignment of the DOT along with the properly held and endorsed Note. 55 See In re Veal, 9th Circuit BAP Nos. AZ-10-1055, AZ 10-1056, (June 10, 2011) DBNTC bases their ability to foreclose the Trust Deed exclusively on two different alleged Assignments of DOT along with the Note by the authority of "MERS" as a Nominee of a non member UAMCC. MERS may not be the agent of many principles at the same time and certainly not the non member UAMCC. DBNTC is attempting to use purported grant of authority to MERS under the DOTalone to have the authority to transfer the Note. There is absolutely no language in the Note transferring the Note to MERS; no assignment from the original lender transferring the Note to MERS; and where MERS cannot as a matter of law, be either the "beneficiary" under the DOT or undertake any action to further a foreclosure. 56 55 the Court discusses the issues of Constitutional Standing, Prudential Standing, the real party in interest issue, the relationship of both Articles 3 and 9 of the Uniform Commercial Code to the sale and transfer of mortgage notes, and then brings all of these theories together under the central concept of who is the "person entitled to enforce the note." 56 Other states that have rejected MERS' offer of an alternative to the public recording system. See: In re Agard, No. 10-77338-reg, 2011 Bankr. LEXIS 488, at *58-*59 (Bankr. E.D.N.Y. Feb. 10, 2011); See also: In re McCoy, No. 10-63814-fra13, 2011 Bankr. LEXIS 534, at *10 (Bankr. Or. Feb. 7, 2011); See also: MERS v. Saunders, 2 A.3d 289, 295 (Me. 2010); See 29 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 39 of 42 CONCLUSION This Appeal is about the Judge s abuse of discretion and clear error in findings of facts that were contrary to the evidence on the record and conclusions of law based on facts not in evidence. Clearly Onewest and Onewest agent for DBNTCfailed to provide any admissible evidence in their MFRS establishing that it had even a "Colorable" interest in the underlying promissory note or the two Assignments of the DOT including the rights to seek relief from the automatic stay thereunder. Furthermore there was no different documents produced to enhance their position in the Adversary Procedure. There was no proof of claim or appeal of the final Judgment denying their motion for relief from the automatic stay. Appellant requests this court to find that DBNTC acted in privity with agent Onewest, reverse the Denial of Plaintiff s MJOP, with prejudice, and find in Appellant s favor or remand to the bankruptcy court for further discovery and amendment. Submitted on June 23, 2011 ______________________________ John Bauer, Esq.( Bar No. 91471) Diane Beall, Esq.(Bar No. 86877) Gary Harre, Esq. (Bar No. 86938) also: LaSalle Bank Nat'l Ass'n v. Lamy, No. 030049/2005, 2006 NY Slip Op 51534U, slip op. 2 (N.Y. Sup. Ct. 2006). 30 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 40 of 42 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Gary Harre, ESQ. (Bar No. 86938) Diane Beall, ESQ. (Bar No. 86877) John H. Bauer ESQ. (Bar No. 91471) 8700 Warner Avenue, Suite 200 Fountain Valley, CA 92708 Phone: (714) 907-4182 Fax: (714) 907-4175 Email: ghcmecf@gmail.com Attorney for Appellant, Brian W Davies UNITED STATES BANKRUPTCY APPELLATE PANEL OF THE NINTH CIRCUIT In re: BRIAN W DAVIES, Debtor. _______________________________ BRIAN W DAVIES, Plaintiff, vs. DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE OF THE RESIDENTIAL ASSET SECUITIZATION TRUST 2007-A5, MORTGAGE PASS THROUGH SERIES 2007-E, UNDER THE POOLING AND SERVICING AGREEMENT DATED MARCH 1, 2007, ITS ASSIGNS AND/OR SUCCESSORS IN INTEREST; et. al.; Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Chapter 7 Bk Case No. 6:10-bk-37900 Ap Case No. 6:11-ap-01001 Bap Case No. CC-11-1221 APPELLANTS OPENINGBRIEF [CERTIFICATE OF SERVICE] Attorneys for the Appellant, Brian W Davies John H. Bauer (Bar No. 91471) Diane Beall (Bar No. 86877) 1 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 41 of 42 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Gary Harre (Bar No. 86938) 8700 Warner Avenue, Suite 200 Fountain Valley, CA 92708 Phone: (714) 907-4182 Attorneys for the Appellee DEUTSCHE BANK NATIONAL TRUST COMPANY as Trustee of the Residential Asset Securitization Trust 2007-A5, Mortgage Pass Through Series 2007-E, under the Pooling and Servicing Agreement Dated March 1, 2007. Andrew E. Miller (Bar No. 213504) Loraine L Pedowitz (Bar No. 120614) Sarina Saluja (Bar No. 253781) 515 South Figueroa Street, Ninth Floor Los Angeles, California 90071-3309 I, Gary Harre, declare as follows: I am a citizen of the United States of America, over the age of 18 years and not a party to the within action. My business address is 8700 Warner Avenue Fountain Valley, California 92708. On this date, I caused to be served the following: APPELLANT'S OPENING BRIEF by mailing a true and correct copy of the above-mentioned documents with postage fully pre-paid, addressed to: Executed this 24th day of June 2011, at Fountain Valley, California 92708. Dated: June 24, 2011 _________________________ DIANE BEALL, ESQ. GARY HARRE, ESQ. JOHN H. BAUER Attorneys for BRIAN W DAVIES Appellant 2 Case: 11-1221 Document: 009187122 Filed: 06/24/2011 Page: 42 of 42 VOLUME 1 PAGES 1 - 527 T A B L E
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1 8 VOLUME 2 PAGES 528 - 1001 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Appellant Brian W. Davies Request For Judicial Notice #1 GLOBAL CAPITAL LAW, PC GARRY HARRE, ESQ. (86938) DIANE BEALL (86877) 8700 WARNER AVE., STE #200 FOUNTAIN VALLEY, CA 92708 PHONE: (714)-907-4182 FAX (714)-907-4175 ghcmecf@gmail.com Attorney for Appellant, Brian W. Davies UNITED STATES BANKRUPTCY APPELLATE PANEL OF THE NINTH CIRCUIT Chapter 7 Bk Case No. 6:10-37900-SC Ap Case No. 6:11-01001-SC Bap Case No. CC-11-1221 In re: BRIAN W. DAVIES, Debtor, ) ) ) ) ) ) ) BRIAN W. DAVIES, an Individual. Plaintiff and Appellant, -vs.- DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE OF THE RESIDENTIAL ASSET SECURITIZATION TRUST 2007-A5, MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2007-E, UNDER THE POOLING AND SERVICING AGREEMENT DATED March 1, 2007, ITS ASSIGNS AND/OR SUCCESSORS IN INTEREST; et. al.; Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) APPELLANT BRIAN W. DAVIES REQUEST FORJUDICIAL NOTICE #1 (RJN #1) 11 U.S.C. 107(a) Fed. Rules of Evidence, Rule 201 // // 1 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 1 of 59 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Appellant Brian W. Davies Request For Judicial Notice #1 Appellant, Brian W. Davies, through his Attorney requests the Appellate Court to take Judicial Notice of four Bankruptcy Cases filed in the Ninth Circuit and pursuant Federal Rules of Evidence, Rule 201. The Appellate Court may take Judicial Notice of Bankruptcy Cases pursuant to 11 U.S.C.S. 107(a) which states that a paper filed in a case under the bankruptcy code and the dockets of a Bankruptcy Court are public record. These four Ninth Circuit Bankruptcy Cases involve Movant Onewest Bank FSB, as servicing agent for DEUTSCHE BANK NATIONAL TRUST COMPANY, as Trustee Of The Residential Asset Securitization Trust 2007-A5, Mortgage Pass- Through Certificates, Series 2007-E, Under The Pooling And Servicing Agreement Dated March 1, 2007(hereinafter RAST 2007-A5). This is important in the case at bar whereby the question of agency relationship with Onewest Bank and Deutsche Bank National Trust Company are at issue. Importantly these sample cases are selected only for the Specific Trust (RAST 2007-A5) from which Appellants Promissory Note along with the Deed of Trust were purported to be transferred pursuant to the Pooling and Servicing Agreement which has been attached to the Appellants Appendix as Appendix Exhibit #13. The various cases are collected from random sampling on Pacer, and are only the tip of the Iceberg. Appellant submits: A true and correct copy of Central District of California Case Number 6:09- bk-27875-MJ, of the Motion for Relief from Automatic Stay filed on 02/12/2010 and the Order Denying the Motion for Relief from Automatic Stay entered on May 17, 2010 attached as Exhibit #1. A true and correct copy of Central District of California Case Number 2:09- bk-27875-ER, of the Motion for Relief from Automatic Stay filed on 12/01/2009 2 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 2 of 59 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Appellant Brian W. Davies Request For Judicial Notice #1 and the Order Denying the Motion for Relief from Automatic Stay entered on 1/19/2010 attached as Exhibit #2. A true and correct copy of Southern District of California Case Number 09- 15455-LA7, of the Motion for Relief from Automatic Stay filed on 12/03/2009 attached as Exhibit #3. A true and correct copy of Northern District of California Case Number 09- 58807 W, of the Motion for Relief from Automatic Stay filed on 11/12/2009 attached as Exhibit #4. The Cases are selected as a sampling, and to illustrate the relationships of the parties Onewest Bank FSB, and Appellee Deutsche Bank National Trust Company which occur throughout the Bankruptcy Courts in this Country. Wherefore the Plaintiff Debtor respectfully requests the aforementioned Documents to be Judicially Noticed. Respectfully Submitted, June 3, 2011 _____________________________________ GARRY HARRE, ESQ. Attorney for Appellant, BRIAN W. DAVIES 3 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 3 of 59 DAVIES RJN #1 4 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 4 of 59 DAVIES RJN #1 5 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 5 of 59 DAVIES RJN #1 6 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 6 of 59 DAVIES RJN #1 7 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 7 of 59 DAVIES RJN #1 8 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 8 of 59 DAVIES RJN #1 9 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 9 of 59 DAVIES RJN #1 10 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 10 of 59 DAVIES RJN #1 11 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 11 of 59 DAVIES RJN #1 12 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 12 of 59 DAVIES RJN #1 13 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 13 of 59 DAVIES RJN #1 14 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 14 of 59 DAVIES RJN #1 15 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 15 of 59 DAVIES RJN #1 16 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 16 of 59 DAVIES RJN #1 17 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 17 of 59 DAVIES RJN #1 18 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 18 of 59 DAVIES RJN #1 19 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 19 of 59 DAVIES RJN #1 20 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 20 of 59 DAVIES RJN #1 21 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 21 of 59 DAVIES RJN #1 22 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 22 of 59 DAVIES RJN #1 23 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 23 of 59 DAVIES RJN #1 24 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 24 of 59 DAVIES RJN #1 25 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 25 of 59 DAVIES RJN #1 26 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 26 of 59 DAVIES RJN #1 27 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 27 of 59 DAVIES RJN #1 28 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 28 of 59 DAVIES RJN #1 29 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 29 of 59 DAVIES RJN #1 30 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 30 of 59 DAVIES RJN #1 31 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 31 of 59 DAVIES RJN #1 32 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 32 of 59 DAVIES RJN #1 33 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 33 of 59 DAVIES RJN #1 34 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 34 of 59 DAVIES RJN #1 35 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 35 of 59 DAVIES RJN #1 36 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 36 of 59 DAVIES RJN #1 37 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 37 of 59 DAVIES RJN #1 38 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 38 of 59 DAVIES RJN #1 39 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 39 of 59 DAVIES RJN #1 40 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 40 of 59 DAVIES RJN #1 41 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 41 of 59 DAVIES RJN #1 42 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 42 of 59 DAVIES RJN #1 43 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 43 of 59 DAVIES RJN #1 44 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 44 of 59 DAVIES RJN #1 45 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 45 of 59 DAVIES RJN #1 46 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 46 of 59 DAVIES RJN #1 47 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 47 of 59 DAVIES RJN #1 48 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 48 of 59 DAVIES RJN #1 49 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 49 of 59 DAVIES RJN #1 50 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 50 of 59 DAVIES RJN #1 51 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 51 of 59 DAVIES RJN #1 52 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 52 of 59 DAVIES RJN #1 53 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 53 of 59 DAVIES RJN #1 54 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 54 of 59 DAVIES RJN #1 55 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 55 of 59 DAVIES RJN #1 56 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 56 of 59 DAVIES RJN #1 57 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 57 of 59 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE OF DOCUMENT I am over the age of 18 and not a party to this bankruptcy case or adversary proceeding. My business address is: 8700 Warner Avenue, Fountain Valley, California 92708 A true and correct copy of the foregoing document described as Appellant Brian W. Davies Request for Judicial Notice #1 will be served or was served in the form and manner required by LBR 5005-2(d); and (b) in the manner indicated below: I. TO BE SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING ("NEF") - Pursuant to controlling General Order(s) and Local Bankruptcy Rule(s) ("LBR"), the foregoing document will be served by the court via NEF and hyperlink to the document. Appellant Brian W. Davies Request for Judicial Notice #1 I checked the CM/ECF docket for this bankruptcy case or adversary proceeding and determined that the following person(s) are on the Electronic Mail Notice List to receive NEF transmission at the email address(es) indicated below: Gary L Harre ghcmecf@gmail.com Andrew E Milleramiller@allenmatkins.com Loraine L Pedowitz lpedowitz@allenmatkins.com United States Trustee (RS) ustpregion16.rs.ecf@usdoj.gov OR EMAIL (indicate method for each person or entity served): Pursuant to F.R.Civ.P. 5 and/or controlling LBR, on June 3, 2011, I served the following person(s) and/or entity(ies) by personal delivery, or (for those who consented in writing to such service method), by facsimile transmission and/or email as follows. Listing the judge here constitutes a declaration that personal delivery on the judge will be completed no later than 24 hours after the document is filed. Bankruptcy Appellate Court I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. June 3, 2011 Emily Khem /s/ Emily Khem Date Type Name Signature 23 Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 58 of 59 I herebv certiIv that I eIectronicaIIv IiIed the Ioregoing with the CIerk oI the Court Ior the United States Court oI AppeaIs Ior the Ninth Circuit bv using the appeIIate CM/ECF svstem on (date) . I certiIv that aII participants in the case are registered CM/ECF users and that service wiII be accompIished bv the appeIIate CM/ECF svstem. CERTIFICATE OF SERVICE When AII Case Participants are Registered Ior the AppeIIate CM/ECF Svstem I herebv certiIv that I eIectronicaIIv IiIed the Ioregoing with the CIerk oI the Court Ior the United States Court oI AppeaIs Ior the Ninth Circuit bv using the appeIIate CM/ECF svstem on (date) . Participants in the case who are registered CM/ECF users wiII be served bv the appeIIate CM/ECF svstem. I Iurther certiIv that some oI the participants in the case are not registered CM/ECF users. I have maiIed the Ioregoing document bv First-CIass MaiI, postage prepaid, or have dispatched it to a third partv commerciaI carrier Ior deIiverv within 3 caIendar davs to the IoIIowing non-CM/ECF participants: Signature (use "s/" Iormat) CERTIFICATE OF SERVICE When Not AII Case Participants are Registered Ior the AppeIIate CM/ECF Svstem 9th Circuit Case Number(s) $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ Signature (use "s/" Iormat) To secure vour input, vou shouId print the IiIIed-in Iorm to PDF (FiIe > Print > PDF PrinterCreator#' $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ Andrew E. Miller (Bar No. 213504) Loraine L Pedowitz (Bar No. 120614) Sarina Saluja (Bar No. 253781) Allen Matkins Leck Gamble Mallory & Natsis LLP 515 South Figueroa Street, Ninth Floor Los Angeles, California 90071-3309 CC-11-1221 Davies v. Deutsche Bank National Trust Co. June 3, 2011 June 3, 2011 /s/ Emily Khem Case: 11-1221 Document: 009184275 Filed: 06/03/2011 Page: 59 of 59
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