Jan 21, 2011
ONE ON ONE WITH NEIL GARFIELD
TIME FOR A LAWYER TO GIVE SOME HELP HERE
JUDGE CURLEY GETTING READY TO RULE IN HOMEOWNER’S FAVOR
In Re Bailey vs Bank of New York Mellon et al. Case #2:09-01728-SSC
Report and summary: Hearing on Motion to Dismiss Plaintiff’s 4th Amended Complaint, with prejudice.
Chief Bankruptcy Judge Sarah Sharer Curley, Phoenix, AZ. January 19, 2011.
At the previous hearing on Nov 9 the Court ordered BONY Mellon to produce two things:
(1) the custodial file and
(2) certification that the file has not been altered since 2007.
(1) They produced the custodial file at the hearing. Bailey had an extremely limited opportunity to examine the file, which consists of hundreds of pages. He could not find and did not see the most important page, the signature page of the Note with the disputed stamp thereon. The file was then handed to the judge who found everything to be in order.
(2) They did NOT provide certification that the file had not been altered since 2007.
Bailey, to his chagrin, was unprepared for the possibility that they would produce the file.
He was convinced they would be unable to do so.
So there he was, in the courtroom, trying to think on his feet. He reasonably assumed that there would be a future opportunity to examine the documents, but the judge denied his request for a viewing, on the grounds that Bailey would use the docs to invent “yet another new theory” and further prolong the proceedings. BONY’s counsel sincerely tried on two occasions during the hearing to allow Bailey to see the docs, to no avail. The hearing was simply not the place and no expert was present to authenticate. Bailey also failed to bring up the disputed question of exactly when the endorsement stamp was added to the signature page of the note.*
Bailey was successful however, in bringing up a number of issues which the court instructed BONY to respond to by February 22.
FIRST: They must produce an affidavit stating precisely when and how the loan was added to the CWALT trust. Would this satisfy the certification requirements of (2) above? Maybe.
SECOND: They must produce the fully executed PSA and demonstrate that the single endorsement in blank (belatedly) stamped on the note (from Countrywide Bank to Countrywide Home Loans) did not violate the endorsement and transfer terms of the PSA Section 2:01. The judge opined that a single endorsement in blank was sufficient. Bailey argued that the PSA required that the note be specifically endorsed to the trust, and in fact endorsed and transferred every step of the way, from Originator to Trustee. The Judge thinks not.
THIRD: Bailey pointed out that there is no assignment of the Deed of Trust in the record. Opposing counsel conceded that fact. The court ordered BONY to explain the absence. No pre-petition assignment of the DOT should be fatal. There is NO assignment to date. However, this is Arizona, where MERS** can do anything it likes, so we shall see what they come up with.
Bailey also produced, courtesy of William McCaffrey, loan level evidence from the CWALT trust’s August 25, 2009 monthly report that the Note was not added into the Trust until July 2009. The shut-off date for the Trust was August 1, 2007. Additionally the loan was 14 months delinquent in July 2009. The Judge opined that it was fine for the loan to be added to the Trust at any time, not limited by the shut-off date of the PSA. She did not comment on the fact that the loan was delinquent at the time it was added. She did not order any action on the part of the Defendant.
*BONY has not disputed or denied Bailey’s allegation in his 4th Amended complaint that the stamp was added no earlier than November 9, 2009. Admitted as a matter of law pursuant to Rule 7008. Effect of failure to deny. If the stamp was added to the note no earlier than November, 2009, and yet the loan was added to the Trust in July of 2009, it would seem that something is amiss.
** This judge seems to be a big supporter of MERS.
The hearing was well-attended. A lot of people are watching this case. It was hardly a victory, but Bailey survived an hour of oral argument. In the lobby outside, the opinion was expressed that the missing DOT would prove fatal to the Defendants’ position.
SUPPORT Bailey’s film “COPS ‘n ROBBERS vs THE PEOPLE: The Death and Rebirth of the American Dream” http://kck.st/hLX9W5
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