Aug 25, 2017
This case shows in detail the difference between a nominal party and a real party. It can be used to clarify cases where US Bank and others pretend that the Plaintiff is the Trustee. It isn’t. As trustees they are nominal or formal parties whose citizenship is irrelevant for most purposes and irrelevant as to the facts of the case — except the issue of whether they are in fact a “Trustee” over property that forms the res of the trust.
The real party is the Trust — but only if it is an entity that exists, which means it has received money or property, in trust. And THAT is only relevant if the property held in trust includes a specific loan — not merely the implied authority to enforce a note and mortgage that have been “assigned” but not accepted by the Trustee or the Trust.
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Hat tip to Dan Edstrom
see ARGO GLOBAL SPECIAL SITUATIONS v Wells Fargo Bank 810 F Supp 2d 906-D Minn 2011
See also Navarro v Lee – Trust Type and Person Status 1980 US Supreme Crt
ARGO GLOBAL SPECIAL SITUATIONS v. Wells Fargo Bank, 810 F. Supp. 2d 906 (D. Minn. 2011)Wells Fargo is a nominal party …Although Plaintiffs named Wells Fargo as a Defendant, the other Defendants argue that Wells Fargo is merely a nominal party whose citizenship must be disregarded for purposes of evaluating 910*910 subject-matter jurisdiction. Long ago, the Supreme Court “established that the `citizens’ upon whose diversity a plaintiff grounds jurisdiction must be real and substantial parties to the controversy.” Navarro Savings Ass’n v. Lee, 446 U.S. 458, 460, 100 S.Ct. 1779, 64 L.Ed.2d 425 (1980). “Thus, a federal court must disregard nominal or formal parties and rest jurisdiction only upon the citizenship of real parties to the controversy.” Id. at 461, 100 S.Ct. 1779.[6] As the only “Defendant” alleged to be a U.S. citizen, Wells Fargo’s status as a genuine Defendant — a “real party in interest” — is thus essential to jurisdiction under Section 1332(a)(3).Formal or nominal Party?In general, “a party whose role in a law suit is that of a depositary or stakeholder is a formal or nominal party.” Colman v. Shimer, 163 F.Supp. 347, 350 (W.D.Mich.1958). Thus, a trustee or agent is merely a formal or nominal party “where, though a trustee, agent or depositary has possession of property or funds[,] rights in which are the subject of litigation, he holds them merely in a subordinate or possessory capacity as to which there is no dispute.” Id. at 351. In short, a nominal defendant is one “`against whom no real relief is sought.'” Thorn v. Amalgamated Transit Union, 305 F.3d 826, 833 (8th Cir.2002) (quoting Pecherski v. General Motors Corp., 636 F.2d 1156, 1161 (8th Cir.1981)). In other words, “[a] defendant is nominal if there is no reasonable basis for predicting that it will be held liable.” Shaw v. Dow Brands Inc., 994 F.2d 364, 369 (7th Cir.1993). Thus, the issue is whether Plaintiffs assert any claim of wrongdoing against Wells Fargo. Rose v. Giamatti, 721 F.Supp. 906, 917 (S.D.Ohio 1989) (finding baseball team to be a nominal party where player, in dispute with Commissioner, alleged no wrongdoing against team that player also named as a defendant).
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So the first thing of note here is that this case is about diversity jurisdicition in federal courts. BUT the definitions and reasoning here corroborates what I have been writing for years — that the “Trustee”, even if it is “real” is not a real party in interest. The pattern of pursuing investigation and discovery into the Trustee is an exercise in misdirection. The “powers” claimed by the or on behalf of the “Trustee” are solely derived from whether the Trust assets exist and whether the trust assets, therefore, have been purchased by the Trust.
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This seems to be a point of confusion amongst not only pro se litigants but among attorneys doing foreclosure defense. Assuming that the loan legally exists, the power to exercise any rights of administration or servicing of the subject loan are derived strictly from the Trust governed by a Trust instrument with a Trustor, Trustee and beneficiaries PLUS assets that have been entrusted to the Trustee to hold on behalf of the beneficiaries according to the terms of the Trust. That is a mouthful.
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It is clear that the claimed beneficiaries under a deed of trust or the claimed successor mortgagees under a mortgage deed are most often some sort of trust entity. Lately, we have seen new trust names emerge as there is an illusion of the trust assets of one trust being re-securitized into another trust — thus providing another layer of obfuscation as to the real party in interest.
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The issue is whether anything was transferred. And the answer lies in whether the first “selling” trust ever had ownership of the debt. And the answer to that is NO. We know that because nobody ever alleges that the trust purchased the loans as set forth in the PSA (trust instrument). And we know that is corroborated by the fact that nobody ever makes a claim on behalf of an alleged trust that it is a holder in due course — a claim that would be made if they indeed owned it through a purchase.
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The same analysis applies to the first trust. The narrative is that it was created to hold investor money in trust and to administer those funds for the benefit of the beneficiaries of the trust. In turn the Trustee would, in the name of the Trust, purchase loans (assets) with the money entrusted to the Trustee. If those things didn’t happen then there is no trust. And there is no real party in interest in any action brought by or on behalf of the alleged trust. The Trustee is not merely nominal or formal — it is named but it has no powers under any law.
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If the loan has not been entrusted to the Trustee to be administered as a trust asset, then there is no trust relevant to the subject loan. If there is no trust, then there is no trustee. If there is no trust or trustee then there is no servicer. None of the “records” of any of them are relevant in an action brought on behalf of an either nonexistent trust or a trust that exists but does not own the subject loan.
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The entire securitization scheme is based upon assymetry of information — neither the “lenders” nor the “borrowers” know the existence of each other. The ONLY parties who have any information about the chain of money or the chain of paper are unnamed intermediaries — usually showing up as “Master Servicer” of a nonexistent or irrelevant “trust” — who act in multiple conflicting capacities principally as underwriter for the bogus mortgage bonds and the party ultimately in control of who can claim servicing rights.
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With the alleged “Trust” being indispensable for the valid existence of a trustee or servicer, the inquiry, objections at trial and cross examination should be directed at this fallacy.
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