More Traction for Deny and Discover

Sep 26, 2012

Deny and Discover, is the strategy developed by Neil Garfield and presented in recent seminars. The results have been profound. Those who employed it correctly have seen mostly rulings in favor of the borrower/debtor. Become a member (CLICK HERE TO SUBSCRIBE NOW) and you will be invited to our twice monthly discussions of strategies and tactics that work in foreclosure defense, modifications, and mediation. To get a consultation with Neil Garfield Click Now to Consult with Neil Garfield.

A bankruptcy Judge in Northern California found that the claim by the alleged forecloser was insufficient to establish even colorable right to proceed in foreclosure. The logic employed was irrefutable.

The a declaration/affidavit was signed for a company that could only have knowledge of the case AFTER the Notice of Default and Notice of Sale was ordered. If that is what the notice of Default was based upon then the trustee had no right to schedule the sale.

The person signing, used the usual “I am familiar with…” language and the Court found that the declaration/affidavit on its face showed a lack of personal knowledge on the part of the person signing the affidavit. This is important because it is doubtful that many people are around who DO have personal knowledge and if they did, whether they would testify to what the would-be forecloser would want.

The court found a lack of foundation (sound familiar, seminar participants) to proffer ownership of the note not mere possession. As an employee the affiant was not COMPETENT (paying attention, seminar participants) to testify that the movant was the holder of the note, which is a LEGAL CONCLUSION. This left the movant without standing to apply for a lift of the automatic stay.

Notable quotes:

” The simple fact that Ms. Hiatt is over the age of eighteen and is employed at SPS is inadequate, in the presence of an evidentiary objection, to show that she has personal knowledge of the facts necessary to authenticate the Note. The Hiatt Decl. is merely a boilerplate recitation of Rule 803(6) and Rule 902(11). The Hiatt Decl. does not contain testimony of the kind described above that is necessary to show Ms. Hiatt’s personal knowledge of the facts offered to authenticate the Note. If the Hiatt Decl. is an attempt to invoke Rule 902(11), the movant never provided written notice of its intention to offer the records as self-authenticating under that provision. Accordingly, the Hiatt Decl. fails to authenticate the Note.

Possession of the Note

The same personal knowledge requirements apply to Ms. Hiatt’s testimony regarding the movant’s possession of the Note. Fed. R. Evid. 601 and 602. Here, the Hiatt Decl. is absent any statement that would indicate the movant has possession of the Note. Ms. Hiatt simply states that the Bank “is the holder of the Note;” however, as an “employee,” Mr. Hiatt is not competent to testify to legal conclusions.

The movant might establish the requisite personal knowledge of the movant’s possession of the Note if an employee or agent of the movant could truthfully state that he or she has personally reviewed the movant’s files regarding the loan in question and that he or she has personally verified the presence therein of the original Note, a copy of which is attached to the motion.

Standing

Based on the forgoing defects in the movant’s evidence, the movant has failed to demonstrate that it has standing to bring this motion for relief from the automatic stay in this case. As this court recently stated in its decision in In re Jackson, B.R., 2011 WL 2247816 (Bankr. E.D. Cal. June 6, 2011)(Holman, J.) in order to determine a party’s standing in the bankruptcy context, two inquiries are required. First, the court must determine whether the party has constitutional standing, i.e. whether the party has suffered sufficient injury to satisfy the “case or controversy” requirement of Article III. If the movant does not satisfy the first inquiry, the court lacks subject matter jurisdiction to hear the matter. Id. at * 2. Second, the court must determine whether the party has prudential standing, i.e. whether the party is properly able to assert a particular claim; where the party is seeking to enforce a negotiable instrument, as here, the movant’s right to enforce an obligation is determined by the Commercial Code.

The movant in this case has not satisfied the first or the second inquiry. First, the court finds that the movant has not presented sufficient evidence to establish that it as constitutional standing because it has not shown that by admissible evidence that it is the owner or has legal title of the Note. Second, the movant has not shown by admissible evidence that it has prudential standing as the “person entitled to enforce” the Note in any of the ways described in Jackson. Accordingly, the motion is dismissed without prejudice.

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