Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caeb-2_11-ap-02024/USCOURTS-caeb-2_11-ap-02024-4/pdf.json

Parties Involved:
James L. Macklin
Plaintiff
Deutsche Bank National Trust Co.
Defendant
Thomas A. Aceituno
Trustee

Document Text:

FiLED 

APR - 8 Z015 

POSTED ON WEBSITE 

NOT FOR PUBLICATION UNITED STATES BAN 

EASTERN 

UNITED STATES BANKRUPTCY COURT 

EASTERN DISTRICT OF CALIFORNIA 

In re Case No. 10-44610-5-7 

JAMES L. MACKLIN, 

Debtor. 

JAMES L. MACKLIN, Adv. Proc. No. 11-2024 

Docket Control No. JLM-1 

Plaintiff, 

V. 

DEUTSCHE BANK NATIONAL TRUST 

CO., 

Defendant. 

This memorandum decision is not approved for publication and may 

not be cited except when relevant under the doctrine of law of the 

case or the rules of claim preclusion or issue preclusion. 

MEMORANDUM OPINION AND DECISION 

James Mackim ("Mackim") is the Plaintiff in this adversary 

proceeding, naming Deutsche Bank National Trust Co., as Indenture 

Trustee for the Accredited Mortgage Loan Trust 2006-2 Certificate 

Holders ("DBNTC") as the only defendant. The Adversary Proceeding 

was commenced on January 13, 2011, and judgment was entered for 

DBNTC on July 2, 2013. Dckt. 349. On January 22, 2015, Macklin 

filed the present Motion for Relief Under Federal Rule of Civil 

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Procedure 60(b),' seeking to vacate orders and the judgment entered 

in this Adversary Proceeding. Dckt. 380. 

HISTORY OF ADVERSARY PROCEEDING 

AND MCKLIN'S MULTI-COURT PARALLEL LITIGATION 

The court begins with a review of what has transpired in this 

Adversary Proceeding (for which there are now 472 docket entries) 

Macklin has chosen to be represented by four different attorneys in 

this Adversary Proceeding (including having terminated an attorney 

and then rehiring her when Macklin terminated her replacement) . A 

review of the representation of Macklin is summarized in the 

following chart: 

Holly S. Burgess, Esq. 2 January 13, 2011 - October 3, 2011 

Filed Original Complaint January 13, 2011 

Filed Motion for TRO February 7, 2011 

(TRO Issued) 

Filed Motion for Preliminary February 24, 2011 

Inj unction 

(Preliminary Injunction 

Granted) 

Opposed Motion to Dismiss March 17, 2011 

Original Complaint 

Filed Motion to Compel May 10, 2011 

Chapter7 Trustee to Abandon 

Claims against DBNTC 

' Unless other wise stated, the court shall refer to the 

Federal Rules of Civil Procedure as "Rule [number]" and the 

Federal Rules of Bankruptcy Procedure as "Bankruptcy Rule 

[number] ." 

2 Ms. Burgess was also Macklin's counsel in his Chapter 13 

case filed on September 16, 2010, and continued in that 

representation when it was converted to one under Chapter 7. On 

October 28, 2011, Allan Frumkin, Esq. was substituted in as 

counsel for Macklin in the bankruptcy case and Ms. Burgess was 

allowed to withdraw. On January 31, 2015, Charles T. Marshall, 

Esq. was substituted in as counsel for Macklin in the bankruptcy 

case. 

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Filed First Amended Complaint June 17, 2011 

Opposed Motion to Dismiss September 2, 2011 

First Amended Complaint 

Opposed Motion to Vacate September 1, 2011 

Preliminary Injunction 

(Preliminary Injunction 

dissolved due to Macklin's 

failure to comply with 

conditions of injunction) 

Allan R. Frumkin, Esq. October 3, 2011 - April 23, 2012 

Filed Motion For Re-Argument October 17, 2011 

of Motion to Dismiss First 

Amended Complaint 

Prepared Draft Second Amended October 17, 2011 (Dckt. 201) 

Complaint 

Filed Status Conference October 24, 2011 

Statement 

Filed Notice of Macklin February 21, 2012 

Discharging Allan R. Frumkin 

as Attorney 

Filed Ex Parte Motion to March 2, 2012 

Withdraw as Counsel to Leave 

Macklin In Propia Persona 

(Motion denied without 

prejudice) 

Filed Noticed Motion For March 29, 2012 

Substitution of Attorney 

(With Holly S. Burgess, Esq. 

to be substituted to replace 

Mr. Frumkin) 

Holly S. Burgess, Esq. April 23, 2012 - October 2, 2012 

Filed Status Conference May 16, 2012 

Statement 

Represented Macklin For Court June 4, 2012 

Setting Discovery Scheduling 

Order, Dispositive Motion 

Deadline, and Pre-Trial 

Conference. 

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Opposed DBNTC Motion to Have June 2012 

Reference Withdrawn 

(Motion denied by District 

Court) 

Filed Pleadings Regarding July 30, 2012 

Discovery Disputes 

Filed Ex Parte Substitution of August 23, 2012 

Attorney 

(Daniel Hanecak, Esq. to be 

counsel for Macklin) 

Filed Noticed Motion to September 13, 2012 

Withdraw as Counsel for 

Macklin 

Daniel J. Hanecak, Esq. October 2, 2012 - February 23, 2015 

Filed Motion to Amend October 4, 2012 

Complaint 

(Motion Denied After Noticed 

Hearing) 

Filed Motion For Summary February 21, 2013 

Judgment 

Opposed DBNTC Request for March 14, 2013 

Summary Judgment 

Filed Motion to Withdraw as June 6, 2013 

Attorney 

(Motion Denied) 

Charles T. Marshall, Esq. January 22, 2015 - Current 

Motion to Reopen Adversary January 22, 2015 

Proceeding 

Motion For Relief Pursuant to January 22, 2015 

Rule 60(b) 

When Macklin commenced this Adversary Proceeding, he also 

filed a Motion for a Temporary Restraining Order and a Motion for 

Preliminary Injunction. Dckts. 6 and 26. The court granted both 

the Motion for Temporary Restraining Order and Motion for 

Preliminary Injunction. Orders, Dckts. 66 and 100. The 

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1 preliminary injunction was subsequently dissolved when Macklin's 

2 failed to provide a self-funded Rule 65(c), Bankruptcy Rule 7065, 

3 bond. Order, Dckt. 187. No payment was being made by Macklin on 

4 the disputed secured claim of DBNTC. The court, in lieu of 

5 requiring a third-party bond, allowed Macklin to self-fund a bond, 

6 making $1,500.00 a month (which approximated the monthly payment 

7 asserted to be due on the claim by DBNTC) into a segregated 

8 account. Macklin failed to make the $1,500.00 a month payments 

9 into the segregated account. Civil Minutes, Dckt. 186. 

10 On April 4, 2011, the court granted DBNTC's motion to dismiss 

11 the original Complaint. Dckt. 64. Macklin filed his First Amended 

12 Complaint on June 17, 2011. Dckt. 120. On February 16, 2012, the 

13 court entered its order granting the Motion to Dismiss the First 

14 Amended Complaint, dismissing the causes of action 1 through 8. 

15 Order, Dckt. 222. The court's Memorandum Opinion and Decision for 

16 the Motion contains a detailed review of the history of the 

17 Adversary Proceeding to that time. Dckt. 221. 

18 While the Motion to Dismiss the First Amended Complaint was 

19 under submission, Macklin replaced his first counsel, Holly S. 

20 Burgess, with Allan Frumkin. Mackim, represented by Mr. Frumkin, 

21 filed a Motion to Allow Re-Argument of the Motion to Dismiss. 

22 Dckt. 198. In the Motion and Mr. Frumkin's declaration 

23 (Dckt. 199), the court was advised that Macklin and his new 

24 attorney recognized that the First Amended Complaint should be 

25 amended, asserted prior counsel had failed to adequately represent 

26 Mackim, and represented that Mr. Frumkin was ready, willing, and 

27 able to prosecute this Adversary Proceeding. 

28 The court denied Macklin's request for re-argument of the 

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1 Motion to Dismiss the First Amended Complaint. Order, Dckt. 220. 

2 In its ruling, the court noted that, if the court's ruling on the 

3 Motion to Dismiss the First Amended Complaint was adverse to 

4 Mackiln, then Mackiln could seek leave to file a further amended 

5 complaint at that time. Civil Minutes, Dckt. 219. 

6 Though Macklin and Mr. Frumkin stated that they knew what 

7 amendments they wanted to make to the First Amended Complaint, no 

8 motion for leave to file a second amended complaint was filed by 

9 Macklin and Mr. Frumkin. 

10 On April 23, 2012, the court filed its order authorizing 

11 Allan R. Frumkin to withdraw as counsel for Macklin in this 

12 Adversary Proceeding. Dckt. 243. Macklin requested, and the court 

13 so substituted in, Holly S. Burgess as Macklin's attorney in this 

14 Adversary Proceeding. Dckt. 244. 

15 On June 4, 2012, the court issued its Scheduling Order in 

16 this Adversary Proceeding. Dckt. 250. Macklin was represented by 

17 Holly S. Burgess and the Scheduling Order was set with input from, 

18 and the participation of, Mackim's attorney. Non-Expert Witness 

19 discovery closed on October 15, 2012, and Expert Witness Discovery 

20 closed on January 31, 2013. Dispositive Motions were to be heard by 

21 March 22, 2013, and the Pre-Trial Conference was to be conducted in 

22 April 2013. Id. 

23 In June 2012, DBNTC sought to have the District Court 

24 withdraw the reference to this bankruptcy court for the Adversary 

25 Proceeding. Dckt. 215. This request was opposed by Mackiln. 

26 Dckt. 259. The Motion to Withdraw the Reference was denied by the 

27 District Court. Dckt. 262. 

28 The parties proceeded with discovery. On July 30, 2012, 

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Macklin filed a Joint Statement re: Discovery Agreement. Dckt. 263. 

The court denied the Motion to Compel Production. Order, 

Dckt. 268; Civil Minutes, Dckt. 267. 

On August 23, 2012, Macklin filed another Notice of 

Substitution of Counsel. Macklin sought to terminate Holly S. 

Burgess as his attorney (who replaced Allan Frumkin, who replaced 

Holly S. Burgess the first time) . The Motion to Substitute was 

filed on September 13, 2012. Dckt. 275. At the September 27, 2012 

hearing on the Motion to Substitute, the court confirmed with the 

proposed new counsel that he understood discovery was closing 

shortly in the Adversary Proceeding and that Mackim's desire to 

engage a fifth attorney to represent him (counting the termination 

and re-hiring of Ms. Burgess as two attorneys) was not, in and of 

itself, a basis for reopening discovery and further delaying the 

prosecution of this Adversary Proceeding. When the proposed fifth 

counsel for Macklin confirmed that he clearly understood and was 

able to represent Macklin in the case as it then stood (with 

discovery closing), the court allowed Daniel J. Hanecak to be 

substituted in as the fifth attorney for Macklin in this Adversary 

Proceeding. Order Dckt. 287; Civil Minutes, Dckt. 285. 

On this point, the court's findings and conclusions 

stated in the Civil Minutes for the September 27, 2012 hearing on 

the motion to substitute counsel include: 

This Adversary Proceeding has been pending for 21 months. 

While such a time period may not seem long when compared 

to California Superior Court cases or even cases pending 

in the District Court, this is a very old case for 

bankruptcy courts in this District. The Plaintiff-Debtor 

has changed counsel in this case multiple times, and for 

at lease one counsel firing her and then rehiring her 

when he became dissatisfied with her replacement counsel 

(Allan R. Frumkin) who apparently told a tale of the 

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On October 4, 2012, two days later, Mackim, represented by 

Mr. Hanecak, filed his Motion to File a Second Amended Complaint. 

Dckt. 288. The court denied that Motion. Dckt. 306. The court 

discusses in greater detail below this Motion and the grounds for 

denial of that motion. 

On February 21, 2013, Macklin filed his Motion for Summary 

Judgment. Dckt. 307. DBNTC opposed and requested that summary 

judgment be granted in its favor pursuant to Rule 56(f) 

virtues of hiring him. That counsel sought to withdraw 

after losing one motion to file a second amended 

complaint in this Adversary Proceeding. In requesting to 

withdraw from representing the Plaintiff-Debtor, Allan R. 

Frumkin sought to leave the Plaintiff-Debtor 

unrepresented. 

At the hearing, Daniel J. Hanecak, the proposed new 

counsel, confirmed that he has reviewed the file and has 

knowledge of the deadlines in this case. Further, he 

confirmed that he has spoken with the Plaintiff-Debtor 

and with full knowledge of the deadlines and scheduling 

in this case, is prepared to accept the responsibility of 

being counsel for the Plaintiff-Debtor. The court also 

reviewed with Mr. Hanecak the causes of action which 

remain in this case following the partial granting of the 

motion to dismiss filed by the Defendant. Order, Dckt. 

222. 

Civil Minutes, pg. 3; Dckt. 285. 

In Ms. Burgess' declaration in support of the present 

motion she professionally and tactfully states the basis 

for the Plaintiff-Debtors desire to once again change 

counsel. The court paraphrases these grounds as follows. 

The Plaintiff-Debtor does not believe that Ms. Burgess 

understands the causes of action he wants to present and 

does not arguments [sic] the way the Plaintiff-Debtor 

would if he were the attorney. Because of the differences 

as to how Ms. Burgess believes that the case should be 

presented and that of the Plaintiff-Debtor, there has 

been a strain created on the attorney-client 

relationship. 

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Dckt. 314. The court denied summary judgment for Macklin and 

granted summary judgment for DBNTC for the remaining two causes of 

action. Order, Dckt. 327; Memorandum Opinion and Decision, 

Dckt. 325. Judgment was entered for DBNTC and against Macklin on 

July 2, 2013. Dckt. 349. (The court having to address another 

motion to withdraw filed by Mr. Hanecak, the attorney for Mackim. 

Order denying, Dckt. 344.) 

On June 20, 2013, Macklin filed a motion to vacate the order 

granting DBNTC summary judgment and denying Macklin summary 

judgment. Dckt. 338. Macklin filed the motion in pro Se, with the 

consent of his attorney of record. 4 The Motion to Vacate was 

denied on July 29, 2013. Dckt. 357. 

Appeal of Judgment Entered In This Adversary Proceeding 

The final judgment was issued in this Adversary Proceeding 

on July 2, 2013. Dckt. 349. On Auguèt 26, 2013, Macklin filed a 

Notice of Appeal of the order granting DBNTC summary judgment, 

order denying Mackim's motion to vacate, and "all interlocutory 

Orders as evidenced in the Record, including the Order on Debtor's 

First Amended Complaint." Dckt. 361. 

On October 25, 2013, the Bankruptcy Appellate Panel issued 

a "Notice of Deficient Appeal and Impending Dismissal." Dckt. 372. 

The Notice states that the Notice of Appeal was filed beyond the 

fourteen day period required pursuant to Bankruptcy Rule 8002 and 

8019. Macklin was instructed to file a "legally-sufficient 

The court allowed Macklin to essentially serve as cocounsel to afford Macklin the opportunity to present whatever 

arguments he believed appropriate, notwithstanding his attorney 

of record not being willing to present the motion or Mackim 

believing that this attorney, as others, did not have the same 

understanding of the law as Mackim. 

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explanation" as to why the appeal should not be dismissed as 

untimely. Macklin did not respond to the Notice or attempt to 

prosecute the appeal. On December 16, 2013, the Bankruptcy 

Appellate Panel issued an order dismissing the appeal of the 

judgment and interlocutory orders issued in this Adversary 

Proceeding. Dckt. 3735 

No other appeals have been identified by Macklin as having 

been taken from the judgment or any orders issued in this Adversary 

Proceeding. No action, other than as stated above, had been taken 

(as reflected on the court's docket for this Adversary Proceeding) 

by Macklin to attempt prosecute any appeal from the orders and 

judgment of this court in this Adversary Proceeding. 

Parallel District Court Lawsuit 

When this Adversary Proceeding was commenced, Macklin was 

already litigating the same issues in the United States District 

Court for the Eastern District of California. Dist. Ct. 2:10-cv01097 ("District Court Action") . When DBNTC's motion for summary 

judgment in the District Court Action was pending, Mackim 

commenced his Chapter 13 bankruptcy case in this court. Over the 

opposition of DBNTC, the District Court stayed the District Court 

Action, erroneously believing that the automatic stay prevented 

that action from proceeding. 6 

On April 15, 2014, Macklin filed a motion for leave to file 

Bankruptcy Rule 8002 (c) (2) in effect at the time of the 

Notice of Appeal allowed a party to seek leave to file a notice 

of appeal after the 14-day period expired upon the grounds of 

excusable neglect. 

6 Memorandum Opinion and Decision, FN. 8, Motion to Dismiss 

First Amended Complaint, Dckt. 221. 

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1 a second amended complaint in the District Court Action. 10-01097, 

2 Dckt 40. This was ten months after this court entered the final 

3 judgment in this Adversary Proceeding. The motion was granted by 

4 the District Court and on July 1, 2014, the second amended 

5 complaint was deemed filed by Mackiln in the District Court Action. 

6 DBNTC filed a motion to dismiss the second amended complaint, 

7 asserting that Macklin was barred from attempting to re-litigate 

8 those issues, the final judgment having been entered in this 

9 Adversary Proceeding. 

10 On September 29, 2014, Charles T. Marshall, Esq. substituted 

11 into the District Court Action as Macklin's attorney. 10-01097, 

12 Dckt. 73. Mackim's opposition (totaling 116 pages) to the motion 

13 to dismiss the second amended complaint in the District Court 

14 Action was filed on October 10, 2014. 10-01098, Dckt. 79. The 

15 motion to dismiss the second amended complaint in the District 

16 Court Action was granted on January 14, 2015, and it was dismissed 

17 with prejudice. 10-01098, Dckts. 87 and 88. 

18 Macklin has filed a motion to vacate the order dismissing the 

19 second amended complaint in the District Court Action pursuant to 

20 Rule 60 (b) . That motion is now under submission in the District 

21 Court. 

22 REVIEW OF MOTION FOR RELIEF UNDER RULE 60 

23 The court begins its review of the Motion with consideration 

24 of Rule 7 (b), as incorporated into this Adversary Proceeding by 

25 Bankruptcy Rule 7007. This requires that the motion must state 

26 with particularity the grounds upon which the relief is based. In 

27 addition to the pleading requirement for the motion, the Local 

28 Bankruptcy Rule and Revised Guidelines for Preparation of Documents 

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1 in this District require that "[m]otions, notices, objections, 

2 responses, relies, declarations, affidavits, other documentary 

3 evidence, memoranda of points and authorities, other supporting 

4 documents, proofs of service, and related pleadings shall be filed 

5 as separate documents." Local Bankruptcy Rule 9014-1(d) (1) and 

6 Revised Guidelines for the Preparation of Documents, 1 (3) (a). 

7 Here, Macklin has failed to comply with the rule and instead filed 

8 a "Mothorities," which is a pleading in which the Rule 7(b) grounds 

9 are placed between extensive citations, quotations, arguments, 

10 speculation, facts, and conjecture. Macklin has left it to the 

11 court to decipher what are the actual grounds (subject to the 

12 warranties of Bankruptcy Rule 9011) and the mere "argument" or 

13 "'speculation." The court has done the best it can to extract from 

14 the Mothorities the grounds asserted by Macklin. 

15 From the 11-page Motion, the court identifies the following 

16 grounds: 

17 I. Macklin seeks to vacate all, unspecified, orders which are 

18 in conflict with the U.S. Supreme Court's 2015 decision in 

19 Jesinoski v. Countrywide Home Loans, U.S. , 135 S. Ct. 790, 

20 190 L. Ed. 2d 650 (2015), and the Ninth Circuit 2014 decisions in 

21 Merritt v. Countrywide Financial Corporation, 759 F.3d 1023 (9th 

22 Cir. 2014) 

23 II. The grounds are stated to be: 

24 A. There was no mortgage or deed of trust encumbering the 

Property at the time the bankruptcy case was filed by 

25 Macklin. 

26 B. Under the terms of the Truth in Lending Act ("TILA"), 

an unidentified "lender" failed to return Macklin's 

27 money or file a declaratory action defending the 

rescission of the loan transaction. 

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1 C. The loan transaction was nullified and the debt became 

void as of the March 3, 2009 rescission. 

2 

D. Macklin is entitled to recovery of all payment made to 

3 the (unidentified) "original lender." 

4 E. Because Macklin assets that the loan transaction was 

rescinded, DBNTC does not have standing to assert any 

5 rights with respect to the note or the asserted 

rescission of the loan transaction. 

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F. All orders, judgments and decisions issued by the 

7 court are void by operation of law based upon the 2015 

Supreme Court decision in Jesinoski. 

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G. Macklin asserts he is entitled to relief pursuant to 

9 Rule 60(b) (1), (4) , (5) and (6) , and (d) 

10 H. Since DBNTC could not have had any interest in note 

because Macklin asserts that it was rescinded, DBNTC 

11 is not prejudiced by vacating all orders, judgments, 

and decisions of the court in this Adversary 

12 Proceeding. 

13 I. Macklin is prejudiced, as he lost possession of his 

home. 

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J. Macklin executed a note and two deeds of trust with 

15 Accredited Home Loans, Inc. ("AHL") totaling 

$632,000.00. 

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K. Macklin was not provided with the required disclosures 

17 at the time of the transaction with AHL and 

unidentified persons used false information to qualify 

18 Macklin for the $632,000.00 loan. 

19 L. On May 3, 2009, Macklin perfected a rescission of the 

AHL loan transaction under TILA 1635(a) . An 

20 unidentified "lender" received a rescission notice 

from Macklin and failed to respond with the 21-day 

21 period. 

22 M. On March 3, 2009, counsel for the unidentified lender 

provided an untimely response disputing the notice of 

23 rescission. 

24 N. On November 30, 2009, AHL executed what Mackim 

asserts was a false or forged assignment of the deed 

25 of trust to a trust, for which DBNTC is the trustee. 

26 0. As of the November 30, 2009, assignment AHL had no 

rights or interest to assign in the note and deed of 

27 trust because of the rescission by Mackim. 

28 P. On February 16, 2012, the court dismissed all causes 

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1 of action in Mackim's First Amended Complaint except 

that the Ninth Cause of Action for Wrongful 

2 Foreclosure, and the Tenth Cause of Action for Quiet 

Title. The dismissal included the cause of action 

3 under TILA. 

4 Q. On October 4, 2012, Macklin sought to amend his 

complaint to assert TILA claim for rescission. The 

5 court denied the amendment based on Ninth Circuit 

controlling law that Macklin failed to file an action 

6 within one-year of the rejection of the notice of 

rescission. 

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R. The court granted DBNTC summary judgment on July 2, 

8 2013, on the causes of action for wrongful foreclosure 

and to quiet title. 

S. In Merritt V. Countrywide, the Ninth Circuit 

10 determined that pleading a claim for rescission 

pursuant to TILA does not require that Macklin plead 

11 that tender has been made or is possible by the party 

seeking to rescind. 

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T. In Jesinoski, the Supreme Court held that rescission 

13 under TILA requires only that the notice be given, 

altering the common law requirements for rescission. 

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U. The decisions of the trial court, while consistent 

15 with controlling Ninth Circuit law in 2011 and 2012, 

are not consistent with the subsequent ruling of the 

16 Supreme Court in Jesinoski in 2015 and the Ninth 

Circuit in Merritt in 2014. 

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V. The 2015 and 2014 decisions render DBNTC to not have 

18 had standing in the 2011 and 2012 litigation by which 

it asserted to have an interest in the note and deed 

19 of trust or to challenge Mackim's assertion that the 

loan transaction had been rescinded. 

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21 Motion to Vacate, Dckt. 380. 

22 Most of Mackim's extensive arguments relate to why Mackim 

23 should have won, why DBNTC should not have been allowed to defend 

24 itself against the claims asserted by Mackim, and that it is 

25 "unfair" for Macklin to be bound by the orders and judgment in this 

26 litigation he commenced, prosecuted, and sought summary judgment 

27 against DENTC, and from which he failed to prosecute an appeal. 

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1 Mackiln Asserts Lack of Subject Matter Jurisdiction 

2 In this Adversary Proceeding, Macklin sought to obtain a 

3 monetary judgment against DBNTC under several stated theories: 

4 (1) Violation of the TILA federal law claim which was property of 

5 the bankruptcy estate; (2) Violation of RESPA federal law claim 

6 which was property of the bankruptcy estate; (3) Violation of the 

7 Fair Credit Reporting Act federal law claim which was property of 

8 the bankruptcy estate; (4) Fraud state law claim which was property 

9 of the bankruptcy estate; (5) Unjust Enrichment state law claim 

10 which was property of the bankruptcy estate; (6) Violation of RICO 

11 federal law claim which was property of the bankruptcy estate; 

12 (7) Violation of state Unfair Competition (Business Practices) law 

13 which was property of the bankruptcy estate; (8) Breach of Trust 

14 Instrument state law claim which was property of the bankruptcy 

15 estate; (9) Wrongful Foreclosure under state law claim which was 

16 property of the bankruptcy estate; and (10) Quiet Title state and 

17 federal law claims, for which the Property and claim were property 

18 of the bankruptcy estate. First Amended Complaint, Dckt. 120. 

19 Discussing the effect of the post-judgment decisions in Jesinoski, 

20 Macklin contends that DBNTC "never had constitution or prudential 

21 standing and this court lacked subject matter jurisdiction over 

22 DBNTC, ab initio." Motion, p.2:14-16; Dckt. 380. It appears that 

23 Macklin contends since he alleges DBNTC does not have a valid 

24 interest or rights, and further that the bankruptcy estate and 

25 Macklin have multiple federal and state claims against DBNTC, this 

26 bankruptcy court could not have "subject matter jurisdiction" over 

27 DBNTC. However, it appears from the Motion that Macklin admits 

28 that the federal courts (district and this bankruptcy court) had 

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both in personam and subject matter jurisdiction over Mackim, the 

claims, and the Property, and had ability to adjudicate the rights 

asserted by Macklin against DBNTC. 

After receiving DBNTC's opposition to the Motion, Mackim 

expanded his subject matter jurisdiction argument in his Response. 

Dckt. 400. Macklin states that he objects to the federal court's 

subject matter jurisdiction "for the reason that Defendant DBNTC 

has never had standing in this court, or any court, as an operation 

of law under Truth in Lending Act § 1635 et. seq. [asserting that 

Macklin had rescinded the loan and therefore DBNTC could not have, 

and cannot assert, any rights, or defend itself against the various 

claims asserted by Mackiln] ." Response, p. 2:1-12, Dckt. 400. 

Though the fallacy of Mackiln's logic is evident, the court will 

specifically address the issue of subject matter jurisdiction 

infra . 

REVIEW OF PRIOR ORDERS 

In order to consider whether proper grounds exist to vacate 

an order or judgment under Rule 60, the court must first review the 

actual grounds upon which the orders and judgment of this court 

were based. Below is the court's analysis of the prior orders and 

judgments, specifically highlighting the grounds upon which the 

If Mackim's contention is correct that, by virtue of the 

alleged rescission, DBNTC could have no rights and federal 

subject matter jurisdiction could not exist, then the Supreme 

Court in Jesinoski would have concluded that it did not have 

subject matter jurisdiction to determine the dispute between that 

borrower, who asserted that it had timely rescinded the loan and 

the defendant who disputed the alleged rescission, and dismissed 

the federal action. The same would be true for the Ninth Circuit 

in Merritt, and the Ninth Circuit would not of had subject matter 

jurisdiction to determine the TILA claims. 

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ii court based the rulings. 

2 First Amended Complaint Prosecuted By Macklin 

3 On June 17, 2011, Macklin filed his First Amended Complaint. 

4 Dckt. 120. The First Amended Complaint names DBNTC as the only 

5 defendant. Macklin alleges that there are other unnamed defendants 

6 at the time of filing the First Amended Complaint. The prayer for 

7 the First Amended Complaint requests the following relief: 

8 A. An order compelling "Defendants" to transfer or 

release legal title and any encumbrance to, and 

9 possession of, the Property. 

10 B. For a declaration and determination that Macklin is 

the rightful holder of title to the Property, and 

11 "Defendants" have no interest in the Property. 

12 C. For a judgment forever enjoining "Defendants" from 

claiming any interest in the Property. 

13 

D. For a declaration that the foreclosure which was 

14 instituted be deemed illegal and void, and further 

foreclosure proceedings be declared void. 

15 

16 The prayer does not request that the court enter judgment for 

17 the rescission of the loan transaction, but only seeks to have a 

18 declaration that Macklin has all rights and interests in the 

19 I Property and "Defendants" have none, without Macklin having any 

20 I corresponding obligations arising from a rescission. 

21 

Dismissal Of Causes Of Action From 

22 First Pamended Complaint 

23 The court's findings and conclusions in dismissing the causes 

24 of action one through eight of the First Amended Complaint, include 

25 the following statements by the court in the Memorandum Opinion an 

26 Decision, Dckt. 221: 

27 I. First Cause of Action - Truth in Lending 

28 Here, however, Macklin admits that DBNTC was not the 

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1 creditor in the original transaction that allegedly 

triggered the statutory disclosure requirements. 

2 According to Mackim's FAC, the creditor was either 

Accredited Home Lenders, Inc. or Centennial Bank of 

3 Colorado. Therefore, the court finds that Macklin has 

not stated a claim against DBNTC, who was not an 

4 original party to the original underlying loan 

transaction. 

5 

6 Id. at 18:6-12. 

7 In Mackim's letter to the loan servicer, however, he 

demanded to be repaid all of his payments on the loan 

8 ($125,713.46), have the promissory note returned by 

him, and retain the Property free and clear of any 

9 liens. This not a rescission, but a demand by Mackim 

to be paid money, have his note returned to him, and 

10 be given property free and clear of the deed of trust. 

11 Id. at 18:21-24, 19:1-3. 

12 Section 1641(g) applies to a mortgage loan . . . sold 

or otherwise transferred or assigned to a third 

13 party." Section 1641 (g) was added by an Act of 

Congress dated May 20, 2009, and therefore may not 

14 apply to the mortgage loan transaction at issue here 

- the transfer of the promissory note into the Trust, 

15 not the assignment of the deed of trust or the 

substitution of trustee. 

16 

17 I Id., 20:7-12. 

18 Though this Notice of Rescission is undated, it had to 

predate the March 31, 2009 response and demonstrates 

19 that as early as March 2009 Macklin was aware of 

potential TILA and other claims arising out of the 

20 loan. Therefore, the motion to dismiss the TILA claim 

(First Cause of Action) as untimely due to the Statute 

21 of Limitations is also granted, without leave to 

amend. 

22 

23 Id. at p. 21:12-17. 

24 II. Second Cause of Action - Real Estate Settlement Procedures 

Act ("RESPA") 

25 

An action alleging violation of 12 U. S. C. § 2605 

26 must be brought within three years of such violation, 

and an action alleging violation of 12 U.S.C. § 2607 

27 must be brought within one year of such a violation. 

The loan transaction at issue here closed in April 

28 2006. Macklin did not file this action until January 

18 

Case 11-02024 Filed 04/08/15 Doc 423
1 13, 2011, almost five years later. Accordingly, the 

court finds that the cause of action under RESPA is 

2 time-barred. 

3 Id. at 22:3-10. 

4 "Section 2605 of RESPA requires a loan servicer to 

provide disclosure relating to the assignment, sale, 

5 or transfer of loan servicing to a potential or actual 

borrower: (1) at the time of the loan application, and 

6 (2) at the time of transfer." Likewise, "[t]he loan 

servicer also has a duty to respond to a borrowers's 

7 inquiry or 'qualified written request.," 67 Defendant 

DBNTC alleges without dispute that it is not a loan 

8 servicer. Macklin does not allege that DBNTC is a 

"servicer," instead he makes general, nonspecific 

9 allegations that "Defendant and/or its agents" were a 

servicer. The [First Amended Complaint] goes further 

10 to allege that Qualified Written Responses and 

inquiries were made of others, and attempts to bring 

11 in the current Defendant, DBNTC, based upon Macklin's 

interaction with others or predecessor owners of the 

12 Note. Accordingly, Macklin fails to state a claim upon 

which relief can be granted. 

13 

14 Id. at 22:13-20, 23:1-7. 

15 III. Third Cause of Action - Fair Credit Reporting Act ("FCRA") 

16 While not clear from the FAC, the court understands 

the argument to be that servicer was obligated on a 

17 contract, to which Macklin is not a party, that if 

Macklin (or obligors on other notes) defaulted in his 

18 payments, the servicer would advance monies to the 

then current note holders while the default under the 

19 note was enforced . . . Thus Macklin argues that even 

though he has defaulted on his obligation and there 

20 have been defaults, the "servicer" making advances on 

an unrelated contract constitutes a payment for the 

21 benefit of Macklin and reduces his obligation on the 

Note. Though argued, Macklin does not allege the 

22 legal or contractual basis for his being the 

beneficiary of any third-party contract. 

23 

24 Id. at 25:8-23. 

25 What Macklin also fails to allege is that DBNTC knew 

or had reasonable cause to believe that Macklin's 

26 defaults under the Note were false. Just as Macklin 

alleges, the payments were in default. Merely because 

27 there is a disagreement as to an amount due, that does 

not automatically create a FCRA violation. The FCRA 

28 establishes a clear process by which disputes 

19 

Case 11-02024 Filed 04/08/15 Doc 423
1 concerning furnished information are addressed. There 

is no indication that the process has been employed 

2 with respect to this 'matter. 

3 Id. at 25:24-28, 26:1-3. 

4 Macklin admits that he first received a notice of 

default in December 2008, and did not commence the 

5 instant adversary proceeding until January 13, 2011, 

a month after the statute of limitations expired. No 

6 sufficient basis for tolling the statue of limitations 

as to a claim arising under the FCRA has been alleged 

7 or argued. Merely because Mackiln chose to ignore 

information furnished by DBNTC to a consumer reporting 

8 agency until he decided to file a lawsuit alleging 

various claims is not sufficient. 

9 

10 Id. at 26:13-21. 

11 IV. Fourth Cause of Action - Fraud 

12 With respect to the alleged misrepresentations, 

Mackiln does not allege that he did not receive what 

13 was represented to him at the time of the loan 

transaction. He sought, and obtained, monies on the 

14 terms he negotiated. All of the alleged 

misrepresentations occurred after he obtained the 

15 monies and given the note and deed of trust. 

16 Id. at 29:17-22. 

17 There are no allegations of any reasonable reliance on 

the alleged misrepresentations to Mackim's detriment. 

18 

19 Id. at 29:22, 30:1. 

20 At least two of the necessary elements of fraud are 

missing - justifiable reliance on the alleged 

21 misrepresentation and damages arising from reliance on 

the alleged misrepresentation. 

22 

23 Id. at 30:5-8. 

24 V. Fifth Cause of Action - Unjust Enrichment 

25 What Macklin does not allege or explain is what 'fees' 

are charged as a loan transaction which are applied to 

26 pay the loan (principal and interest) . By their very 

nature, fees are owed in addition to the principal and 

27 interest. 

Id. at 30:20-23. 

20 

Case 11-02024 Filed 04/08/15 Doc 423
1 Although Macklin alleges that he received less than 

what he paid for because defendant extracted fees, he 

2 does not assert that he suffered an actual injury. 

3 Id. at 31:10-13. 

4 Here, there is a valid loan agreement (express 

contract) between Macklin and Defendant. 85 

5 

6 Id. at 31:18-19, EN. 85. [Footnote 85, from which there cannot then 

be a claim for quasi-contract or implied-in-fact contract, citing 

7 Lance Camper Mfb. Corp. v. Republic Indem. Co., 44 Cai.App. 4th 

194, 203 (1996).] 

8 

9 VI. Sixth Cause of Action - Civil Racketeer Influenced and 

Corrupt Organizations Act (RICO) 

10 

The RICO claim does not attribute specific conduct to 

11 individual defendants. The claim also does not 

specify either the time or the place of the alleged 

12 wrongful conduct, except to state that "[a]t all 

relevant times, Defendants have engaged in a 

13 conspiracy, common enterprise, and common course of 

conduct, the purpose of which is to engage in the 

14 violations of law alleged in the complaint." This is 

insufficient. 

15 

16 I Id. at 34:9-15. 

17 VII. Seventh Cause of Action - Unfair Business Practices, Cal. 

Bus. & Professional §§ 17200 et seq. 

18 

In this case, the seventh claim for relief is 

19 dismissed because it does not state a claim under any 

of the three prongs of the UCL. As to the "unlawful" 

20 prong, the Complaint does not allege the violation of 

any other law that would serve as an underlying 

21 violation for the UCL. As to the 'unfair" prong, the 

Complaint does not allege any legislatively-declared 

22 policy to which allegedly wrongful conduct may be 

tethered. 

24 Id. at 36:21-22, 37:1-5. 

25 VIII. Eighth Cause of Action - Breach of Trust Instrument 

26 The Notice of Default [attached as Exhibit 2 First 

Amended Complaint, Dckt. 129],however, clearly states 

27 that Macklin could bring his account into good 

standing by paying the past-due amounts no later than 

28 five days before the foreclosure sale. The Deed of 

21 

Case 11-02024 Filed 04/08/15 Doc 423
1 Trust contained an acceleration clause, and the Notice 

of Default was therefore allowed to contain a notice 

2 of acceleration. 

3 Because the text of the Notice of Default contradicts 

Mackim's claim that Defendant did not to inform him 

4 of the possibility of acceleration and his right to 

cure, the Motion is granted and the Eighth Cause of 

5 Action is dismissed, without leave to amend. 

6 Id. at 39:2-12. 

7 Summary Judgment For Ninth and Tenth Causes of Action 

8 For the remaining two causes of action, the parties completed 

9 discovery. The court's discovery, dispositve motion, and pre-trial 

10 conference order was filed on June 4, 2012 (after approximately 

11 18 months of motions to dismiss, amended complaint, and an answer 

12 being filed) . Dckt. 250. All discovery closed on January 31, 

13 2013. Dispositive motions were to be heard by March 22, 2013. 

14 After discovery was completed, on February 21, 2013, Mackiln 

15 filed his motion for summary judgment. Dckt. 307. DBNTC filed its 

16 opposition and requested summary judgment in its favor [citing Cool 

17 Fuel, Inc. V. Connett, 685 F.2d 309, 311-12 (9th Cir. 1982); see 

18 also Rule 56(f) (1)]. After hearing and considering the evidence 

19 and determining material facts for which there was no genuine 

20 dispute (Rule 56(a), Bankruptcy Rule 7056), the court granted 

21 summary judgment for DBNTC and against Macklin on all remaining 

22 claims. 

23 The court issued a Memorandum Opinion and Decision stating 

24 the ruling on the motion for summary judgment. Dckt. 325. A 

25 summary of the specific grounds upon which summary judgment was 

26 granted by the court for the Ninth Cause of Action (Wrongful 

27 Foreclosure) and Tenth Cause of Action (Quiet Title) is: 

28 At this juncture the court notes that many of the 

22 

Case 11-02024 Filed 04/08/15 Doc 423
1 "undisputed facts" asserted by Plaintiff [Mackim] are 

actually his own personal conclusions of law based 

2 upon his review of the undisputed evidence presented 

by the Parties. Plaintiff's reading of the Assignment 

3 of the Deed of Trust and Substitution of Trustee, 

results in his legal determination that Defendant 

4 [DBNTC] had no interest in the Note. Plaintiff shows 

no basis for having any personal knowledge of what 

5 Defendant did or did not do with respect to the Note, 

Allonge, Assignment of Deed of Trust, and Substitution 

6 of Trustee, but only draws conclusions in his 

declaration from the undisputed documents. 

7 

8 Dckt. 325; Memorandum Opinion and Decision, p. 16:13-22. 

9 The court has before it requests for summary judgment 

asserted by both the Plaintiff and Defendant. Neither 

10 provides conflicting evidence with respect to a 

material fact. Rather, both sides argue what 

11 conclusions of law should be made from this undisputed 

universe of evidence presented to the court. 

12 

13 I Id. at p. 18:16-21. 

14 Therefore, the court concludes that [Cal. Civ.] 

§ 2932.5 only applies to mortgages and not to deeds of 

15 trust. 

16 I Id. at p. 29:11-12. 

17 However, the undisputed evidence presented to the 

court is that Defendant holds the Note, with the 

18 Allonge transferring the Note to the Defendant. 

Defendant recorded the Assignment of Deed of Trust and 

19 Substitution of Trustee in advance of the substitute 

trustee conducting the non-judicial foreclosure sale. 

20 No evidence has been presented that the Defendant did 

not have the Note or the right to enforce the Note 

21 when the substitute trustee conducted the non-judicial 

foreclosure sale. 

22 

23 I Id. at p. 29:18-26. 

24 The Plaintiff has come before this court seeking a 

determination that the Trustee's Deed held by 

25 Defendant is invalid. In attacking that deed, the 

Plaintiff bears the burden of proof that such deed is 

26 ineffective or may be avoided. The Trustee's Deed 

contains the recitals that the requirements of law for 

WA mailing, posting, and publication of the notice of 

sale have been complied with for the December 14, 2009 

A1 non-judicial foreclosure sale. Trustee's Deed, P1. 

23 

Case 11-02024 Filed 04/08/15 Doc 423
1 Ex. D, Dckt. 129 at 15. This constitutes prima facie 

evidence that all such notices were given in 

2 compliance with the statute. Cal. Civ. Code 

§ 2924 (c) 

3 

4 Id. at p. 30:20-28, 31:1. 

5 The undisputed evidence presented to the court is that 

Defendant holds the Note, with the Allonge 

6 transferring the Note to Defendant. 

7 Id. at p. 31:10-12. 

8 At best, after two years of discovery Plaintiff 

presents this court with only his speculation and 

9 argument that the transfer must be defective. 

10 Id. at p. 31:15-17. 

11 Based on the uncontroverted evidence presented, the 

Plaintiff has not provided the court with any basis 

12 for concluding that the Note was not transferred to 

Defendant, that Defendant did not have the right to 

13 substitute the trustee, or that Defendant did not have 

the right to enforce the deed of trust at the time of 

14 the December 2009 non-judicial foreclosure sale. 

15 I Id. at p. 32:19-24. 

16 The absence of any discovery obtained during the two 

years of this litigation by Plaintiff on the point is 

17 deafening in its absence. The Plaintiff offers no 

evidence to counter the Trustee's Deed. There is no 

18 evidence of any material dispute to Defendant 

asserting ownership of the Property pursuant to the 

19 Trustee's Deed. 

20 I Id. at p. 33:3-8. 

21 The court having determined that § 2932.5 does not 

apply to deeds of trust and that there is no evidence 

22 contrary to Defendant having been transferred the Note 

and being entitled to enforce the Deed of Trust, no 

23 basis exists to quiet title to the Property in favor 

of the Plaintiff exists. 

24 

25 I Id. at p. 33:17-21. 

26 Plaintiff was afforded an opportunity and has opposed 

Defendant's request for entry of summary judgment 

27 based on Plaintiff's Motion. Plaintiff has not 

provided the court with any evidence disputing the 

28 ownership of the Note and right to enforce the Deed of 

24 

Case 11-02024 Filed 04/08/15 Doc 423
Trust as of the 2009 substitution of trustee and 

foreclosure. 

Id. at p. 34:15-20. 

The Plaintiff put his best evidence forward, which are 

copies of the Substitution of Trustee, Assignment of 

Deed of Trust, the two undated allonges, and the 

Trustee's Deed. Defendant adds the Note and Deed of 

Trust, Allonge, additional substitutions of attorneys 

by prior holders of the Note, the Notice of Default, 

and the Notice of Sale. It is from this undisputed 

universe of documents that the Parties assert their 

competing interests. 

Id. at p. 35:7-13. 

Based on the uncontroverted evidence presented to the 

court, the court finds that Defendant has title to the 

Property pursuant to the Trustee's Deed. 

Id. at p.35:20-22. 

Order Denying October 4, 2012 Motion To 

File Second Amended Complaint 

While not addressing the specifics of the court's ruling on 

the Motion to Dismiss and the Motion for Summary Judgment, Mackim 

does point to the court's ruling on Mackim's Motion to File a 

Second Amended Complaint, which was filed on October 4, 2012. 

Dckt. 304. Mackiln provides what appears to be a block quote from 

this court's ruling on the Motion to Amend in his Rule 60(b) 

Motion. The quote as stated by Macklin makes it appear that the 

only reason for denying the Motion to Amend is that the one-year 

and three-year statutes of limitation has expired. Such is not a 

"fair representation" of the ruling, which is set forth in the 

Civil Minutes for that hearing and states the grounds for the 

ruling. Dckt. 304. 

The court attaches as Addendum A to this ruling the Civil 

Minutes from the November 8, 2012 hearing on the Motion for File a 

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Case 11-02024 Filed 04/08/15 Doc 423
1 Second Amended Complaint. The grounds are summarized, and cross2 referenced to Addendum A, as follows: 

3 A. "First and foremost, the Plaintiff brings this Motion 

for Leave to Amend on the close of discovery in the 

4 Adversary Proceeding." The court concluded that after 

more than two years and discovery closing, Macklin had 

5 ample opportunity to amend his complaint and raise 

additional claims. The court determined that granting 

6 such leave at the close of discovery, and in light of 

the prosecution of the Adversary Proceeding by the 

7 various attorneys of Macklin's choosing, allowing such 

further amendment "[us prejudicial to the Defendant 

8 and frustrating to the court." Addendum A, p. 5 at A. 

9 B. Allan Frumkin, counsel for Macklin, represented to the 

court in October 2011 that the First Amended needed to 

10 be amended to address the deficiencies which resulted 

in the court having dismissed Causes of Action 1 

11 through 8. Mr. Frumkin testified that he had advised 

Macklin of such necessary amendments at that time. 

12 Addendum A, p. 5 at B. 

13 C. Though Macklin and his counsel knew they need to amend 

the complaint and Macklin was aware of such possible 

14 amendments and claims as early as October 2011, when 

represented by Alan R. Frumkin, Macklin and Mr. 

15 Frumkin did not seek leave to amend the First Amended 

Complaint. Addendum A, p. 6 at C. 

16 

D. At the September 27, 2012 hearing on the Motion to 

17 Substitute Daniel Hanecak, Esq. as new counsel in the 

place of Holly Burgess, Esq. (Macklin terminating her 

18 a second time in this Adversary Proceeding), Mr. 

Hanecak assured the court he was aware of the 

19 discovery and pre-trial conference deadlines in this 

Adversary Proceeding. Addendum A, pg. 6 at D. 

20 

E. After 22 months of prosecution of the Adversary 

21 Proceeding and the close of discovery, the attempted 

amendment occurred too late. Mackim's counsel 

22 clearly was aware of (and so testified previously) 

that possible amendments were desired by Mackim. 

23 Macklin and his attorneys did not timely seek leave to 

amend the First Amended Complaint. Addendum A, p. 6 

24 at E. 

25 F. In denying the Motion, the court concluded, 

26 To allow for Mr. Macklin and his latest 

counsel to reset all of the litigation at 

27 the close of discovery for claims which 

Mr. Macklin and Mr. Frumkin testified that 

28 they were well aware of more than 

Cal 

Case 11-02024 Filed 04/08/15 Doc 423
1 20 months earlier is an abuse of the 

judicial process. As is clear from this 

2 courts decision on the motion to dismiss 

the FAC, leave was not given to file a 

3 second amended complaint due to the 

abusive and unclear pleading practices of 

4 Mr. Macklin and his counsel. The 

requirement for filing a motion for leave 

5 to amended, with a copy of any proposed 

second amended complaint, afforded the 

6 court with a minimally intrusive 

opportunity to insure that the pleading 

7 practices and deficiencies from the 

original Complaint and [First Amended 

8 Complaint] would not be repeated wasting 

judicial resources and putting the 

9 Defendant to unreasonable and repeated 

duplicate pleadings. Mr. Macklin and his 

10 counsel chose not to take up the court on 

the opportunity to timely and reasonably 

11 seek leave to file a second amended 

complaint. 

12 

Addendum A, p. 6 at F. 

13 

14 Macklin's reference to this denial fails to address these 

15 grounds for denying the Motion to File a Second Amended Complaint. 

16 Rather, the Motion merely strings together several sentences in 

17 another portion of the ruling where the court considered the 

18 possible amendments and see whether they represented some grossly 

19 extraordinary circumstances by which a close of discovery amendment 

20 would be warranted. The court found none. 

21 With respect to this review of the proposed Second Amended 

22 Complaint, which merely attempted to rehash the First Amended 

23 Complaint, the court's comments include the following: 

24 G. Macklin failed to show any basis for a failure to 

verify income as the basis of a TILA violation. 

25 Addendum A, p. 7 at G. 

26 H. Macklin failed to show or plead any basis for an 

assignee of a note assuming personal liability for 

27 TILA violations of the lender. Addendum A, p. 7 at H. 

28 I. The court applied then controlling Ninth Circuit law 

27 

Case 11-02024 Filed 04/08/15 Doc 423
1 in determining whether a claim for rescission was 

stated, concluding it was not. Addendum A, p. 8 at 

2 1. 8 

3 J. The court also still concluded that what Macklin 

pleads as a Notice of Rescission was not a notice of 

4 rescission. Addendum A, p. 8 at J. 9 

5 K. Macklin did not plead a claim for a ''table-funded 

loan" and any basis of liability for DBNTC for such a 

6 loan. Addendum A, p. 8 at K. 

7 L. Macklin did not plead an unfair business practices 

claim under California Business and Professionals Code 

8 §§ 17200 et seq. Additionally, Macklin failed to plead 

a basis for DBNTC being liable for the acts of others 

9 asserted to be such violations. Addendum A, p. 9 at 

L. 

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Macklin failed to plead a claim for failure to form a 

contract, by which the loan money could only be funded 

from a bank account of AHL. Addendum A, p. 9 at M. 

Macklin failed to plead grounds by which Mortgage 

Electronic Registration Systems, Inc. could not serve 

as a nominee of the lender. Additionally, why the 

current holder of the note could not enforce the note 

and deed of trust. Addendum A, p. 10 at N. 

0. Macklin failed to plead grounds for which the holder 

of the note obtaining insurance in the event the 

borrower defaults absolves Macklin of paying the 

obligation on the note. Plaintiff failed to plead 

grounds for how DBNTC, as the asserted holder of the 

note, was liable for the alleged misconduct of others. 

Addendum A, p. 11 at 0. 

P. Macklin failed to address several other legal issues 

which were identified by the court if Macklin sought 

leave to amend after the order dismissing the Causes 

of Action 1 through 8 of the First Amended Complaint. 

Addendum A, pp. 11-12 at P. 

The Conclusion to the Memorandum Opinion and Decision ties 

8 While Macklin latches on this one point, this was not the 

basis for the court denying the Motion to File Second Amended 

Complaint. 

Again, this was not the basis for denying the Motion to 

File Second Amended Complaint. It reflects that Macklin was 

merely continuing to rehash old pleadings, attempting to 

repeatedly present the same thing to the court. 

28 

Case 11-02024 Filed 04/08/15 Doc 423
1 together the grounds for denying the Motion to File a Second 

2 Amended Complaint - which would not be altered by the subsequent 

decisions in Jesinoski or Merritt. 

The court summarizes above the review of the prior Memorandum 

Opinion and Decision not as an invitation for Mackim' s current 

counsel to "re-chew the cud," but to demonstrate that: (1) the 

issues presented to the court by Macklin's counsel at the time 

concerning dismissal of the case were not as "simple" as phrased by 

Macklin in the current Motion and (2) the court went to 

extraordinary lengths to review the proposed Second Amended 

Complaint to see if there was anything presented which would 

warrant an eleventh and one-half hour, eve of trial amendment.' ° 

SUBJECT MATTER JURISDICTION EXISTS 

FOR THIS ADVERSARY PROCEEDING 

Mackim, in his Reply, makes the argument that the court does 

not have subject matter jurisdiction over the instant Adversary 

Proceeding in light of the Jesinoski and Merritt decision. This 

argument is similar to the standing argument Macklin makes, 

contending DBNTC cannot have standing to defend itself since 

Macklin has determined that DBNTC cannot have any rights. 

10 As bankruptcy attorneys know, Congress has done parties 

a great favor in establishing the bankruptcy courts and having 

judges dedicated to getting matters quickly to trial. Because a 

bankruptcy judge is able to focus on the bankruptcy and the state 

and federal law bankruptcy related matters (as opposed to state 

court and district court judges who are presented with criminal, 

family law, immigration, Social Security, environmental, 

Constitutional challenges, administrative, maritime cases; to 

name just a few), a bankruptcy judge can get a matter to a 

guaranteed trial date within two months of a pre-trial conference 

- if the parties are actively prosecuting their matter in good 

faith. 

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Case 11-02024 Filed 04/08/15 Doc 423
1 Subject matter jurisdiction is the cornerstone of federal 

2 judicial proceedings. Parties may not "consent" to create federal 

3 court jurisdiction, and even if not raised by the parties, a 

4 federal judge may, and must, raise the issue if he or she believes 

5 that subject matter jurisdiction does not exist. The United States 

6 Constitution provides that, 

7 The [federal] judicial Power shall extend to all 

Cases, in Law and Equity, arising under this 

8 Constitution, the Laws of the United States, and 

Treaties made, or which shall be made, under their 

9 Authority; --to all Cases affecting Ambassadors, other 

public Ministers and Consuls;--to all Cases of 

10 admiralty and maritime Jurisdiction;--to Controversies 

to which the United States shall be a Party;--to 

11 Controversies between two or more States;--between a 

State and Citizens of another State;--between Citizens 

12 of different States,--between Citizens of the same 

State claiming Lands under Grants of different States, 

13 and between a State, or the Citizens thereof, and 

foreign States, Citizens or Subjects. 

14 

15 U.S. Const. Art. III, Sec. 2. The federal judicial power is vested 

16 in the Supreme Court and such other inferior court's as Congress 

17 establishes. U.S. Const. Art. III, Sec. 1; Art. I, Sec.8, Cl 9. 

18 I The Constitution also vests in Congress the responsibility, and 

19 authority, to establish, as a matter of federal law, "uniform Laws 

20 on the subject of Bankruptcies throughout the United States." U.S. 

21 Const. Art. 1, Sec.8, Cl 4. 

22 Congress has generally provided for the United States 

23 District Courts to exercise federal court jurisdiction when, 

24 § 1331. Federal question 

25 The district courts shall have original jurisdiction 

of all civil actions arising under the Constitution, 

26 laws, or treaties of the United States. 

27 28 U.S.C. § 1331. 

28 Congress has enacted various uniform bankruptcy laws over 

I,1 

Case 11-02024 Filed 04/08/15 Doc 423
1 time. The current Bankruptcy Code (11 U.S.C. § 101, et seq.) 

2 provides a comprehensive legal and jurisdictional scheme for the 

3 determination of matters arising under the Bankruptcy Code, arising 

4 in a bankruptcy case, and state and federal non-Bankruptcy Code 

5 matters to a bankruptcy case. A much broader grant of federal 

6 judicial power, for which the federal courts (district and 

7 bankruptcy judges) has been enacted by Congress in 28 U.S.C. 

8 §§ 1334 and 157. In addition to providing that district courts and 

9 bankruptcy courts have jurisdiction for all matter arising under 

10 the Bankruptcy Code, in a bankruptcy case, and related to the 

11 bankruptcy case, the federal courts have exclusive jurisdiction 

12 over property of the bankruptcy estate. 28 U.S.C. § 1334 (e) 

13 First, most of the claims asserted by Macklin arise under 

14 federal statutes. Second, the claims were property of the 

15 bankruptcy estate and the bankruptcy estate retained the right to 

16 the first $150,000.00 recovered, if any, in this litigation. 

17 Third, the claims are related to the bankruptcy case, both as an 

18 asset of the estate and as litigation initially commenced by 

19 Macklin as the Chapter 13 debtor (exercising the powers of a 

20 bankruptcy trustee with respect to the management of property of 

21 the estate), the Chapter 7 Trustee after conversion, and then 

22 Macklin in continuing to litigate the claims for the benefit of the 

23 bankruptcy estate and himself pursuant to the agreement with the 

24 Trustee. 

25 This federal court has subject matter jurisdiction for the 

26 I claims asserted by Macklin, and the defenses, rights, and interests 

27 raised by DBNTC to the First Amended Complaint. 

28 /// 

31 

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1 DBNTC HAS SThNDING TO ASSERT AND DEFEND ITS RIGHTS, 

PND LITIGATE TO JUDGMENT THE ACTION COMMENCED BY MACKLIN 

2 

3 Standing is a fundamental requirement for the exercise of 

4 federal judicial power. Article III of the Constitution confines 

5 federal courts to decisions of "Cases" or "Controversies." 

6 Article III of the Constitution confines federal 

courts to decisions of "Cases" or "Controversies." 

7 Standing to sue or defend is an aspect of the case-orcontroversy requirement. (Citations omitted.) To 

8 qualify as a party with standing to litigate, a person 

must show, first and foremost, "an invasion of a 

9 legally protected interest" that is "concrete and 

particularized" and "actual or imminent.' (Citations 

10 omitted.) . . . Standing to defend on appeal in the place 

of an original defendant, no less than standing to 

11 sue, demands that the litigant possess 'a direct state 

in the outcome.' (Citations omitted.) 

12 

13 Arizonans for Official English v. Arizona, 520 U.S. 43, 64, 117 

14 I S.Ct. 1055 (1997) 

15 As the court understands Mackim's standing argument, since 

16 IMacklin asserts that the loan transaction has been rescinded, the 

17 note and deed of trust are void. Therefore, DBNTC cannot have any 

18 rights therein and cannot attempt to assert such rights that 

19 Macklin alleges do not exist. Further, DBNTC cannot contest or 

20 defend itself and any interest it asserts in the note, deed of 

21 trust, or in any rescission asserted by Macklin to have been or to 

22 be completed. 

23 Macklin overstates the effect of the asserted rescission - 

24 turning himself into the judge, jury, and executioner. DBNTC 

25 asserts that it obtained the note and deed of trust from AHL. 

26 DBNTC disputes that the loan transaction was rescinded and asserts 

27 that it, as the owner of whatever interests there are in the note 

MA and deed of trust, and the owner of the property pursuant to a non32 

Case 11-02024 Filed 04/08/15 Doc 423
judicial foreclosure sale, can defend such interests and rights. 

The court also understands DBNTC to assert that it, as the 

transferee of the note and deed of trust, is the real party in 

interest to receive any monies which Macklin would have to pay for 

his part of the rescission. 11 

While Macklin asserts that he has rescinded the loan 

transaction, DBNTC contends it is the holder of the note which is 

the subject of the asserted rescinded transaction, and that it is 

the owner of the Property, having acquired it through a nonjudicial foreclosure sale. DBNTC has standing to: (1) defend the 

interests in the note and deed of trust from the asserted 

rescission; (2) defend the asserted rights and interests in the 

I Property obtained through the non-judicial foreclosure sale; and 

if the rescission has been properly made, to receive payment of 

all of the monies due from Macklin as part of the rescission. 

FEDERAL RULE OF CIVIL PROCEDURE 60(b) RELIEF 

Rule 60(b), as made applicable by Bankruptcy Rule 9024, 

governs the vacating of a judgment or order. Grounds for relief 

from a final judgment, order, or other proceeding are limited to: 

mistake, inadvertence, surprise, or excusable neglect; 

newly discovered evidence that, with reasonable 

diligence, could not have been discovered in time to 

move for a new trial under Rule 59(b); 

" In Merritt, the Ninth Circuit concluded that for 

purposes of basic pleading, the borrower seeking rescission need 

not plead that tender had been made or was possible. However, 

the Ninth Circuit stated that tender, and the ability of the 

borrower seeking to enforce rescission could be a requirement at 

the time of summary judgment or judgment. Clearly, a party had 

standing to assert the rights of the holder of the note being 

rescinded to receive the required tender of monies back from the 

borrower. 

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1 (3) fraud (whether previously called intrinsic or 

extrinsic), misrepresentation, or misconduct by an 

2 opposing party; 

3 (4) the judgment is void; 

4 (5) the judgment has been satisfied, released, or 

discharged; it is based on an earlier judgment that 

5 has been reversed or vacated; or applying it 

prospectively is no longer equitable; or 

6 

(6) any other reason that justifies relief. 

7 

8 Red. R. Civ. P. 60(b). A Rule 60(b) motion may not be used as a 

9 substitute for a timely appeal. Latham v. Wells Fargo Bank, N.A., 

10 987 F.2d 1199 (5th Cir. La. 1993) . The court uses equitable 

11 principals when applying Rule 60(b). See 11 CHARLES ALAN WRIGHT ET AL., 

12 FEDERAL PRACTICE AND PROCEDURE §2857 (3rd ed. 1998) . The so-called 

13 catch-all provision, Rule 60(b) (6), is "a grand reservoir of 

14 equitable power to do justice in a particular case." Compton v. 

15 Alton S.S. Co., 608 F.2d 96, 106 (4th Cir. 1979) (citations 

16 omitted) . The other enumerated provisions of Rule 60 (b) and Rule 

17 60(b) (6) are mutually exclusive, Liljeberg V. Health Servs. Corp., 

18 486 U.S. 847, 863 (1988), and relief under Rule 60(b) (6) may be 

19 granted in extraordinary circumstances. Id. at 863 n.11. 

20 A condition of granting relief under Rule 60(b) from the 

21 entry of a default judgment is that the requesting party show that 

22 there is a meritorious claim or defense. This does not require a 

23 showing that the moving party will or is likely to prevail in the 

24 underlying action. Rather, the party seeking the relief must 

25 allege enough facts, which if taken as true, allows the court to 

26 determine if it appears that such defense or claim could be 

27 meritorious. 12 JAMES WM. MOORE ET AL., MOORE'S FEDERAL PRACTICE 

28 9191 60.24[1]-[2] (3d ed. 2010); Falk v. Allen, 739 F.2d 461, 463 

34 

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1 (9th Cir. 1984) ("Second, judgment by default is a drastic step 

2 appropriate only in extreme circumstances; a case should, whenever 

3 possible, be decided on the merits.") 

4 The Ninth Circuit in Falk further addressed the proper 

5 application of Rule 60(b) in even the default judgment context, 

6 stating, 

7 We note, however, that these concerns are not intended 

to allow challenges to the correctness of the judgment 

8 itself. See Inryco, Inc. v. Metropolitan Engineering 

Co. Inc., 708 F.2d 1225, 1230. (7th Cir.), cert. 

9 denied, 464 U.S. 937, 104 S. Ct. 347, 78 L. Ed. 2d 313 

(1983). A Rule 60(b) motion to vacate should not be 

10 treated as a substitute for an appeal. De Filippis v. 

United States, 567 F.2d 341, 342 (7th Cir. 1977) 

11 

12 Id. 

13 The judgment in this Adversary Proceeding was not granted as 

14 a default judgment, but based on the evidence Macklin and DBNTC 

15 chose to present on cross summary judgment requests. As stated by 

16 the court, the evidence was not in dispute. Even considering the 

17 standard for vacating default judgments, in which the defendant is 

18 not afforded the opportunity to conduct discovery and present 

19 evidence, Macklin has not shown (1) he has meritorious claims; 

20 (2) that DBNTC will not be prejudiced by continued delay and 

21 further multiple court litigation over the same issues with respect 

22 to its interests in the note and Property; and that (3) that 

23 Macklin and his multiple attorneys are not culpable in connection 

24 with the entry of the final judgment in this case in light of how 

25 they chose to draft the complaints, prosecute the case, not seek to 

26 amend the complaint, conduct discovery, requesting summary 

27 judgment, and present evidence to the court. See discussion in 

28 Falk of the three basic considerations of vacating a. default 

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1 judgment. Id. 

2 THE POST-JUDGMENT RULINGS IN JESINOSKI AND MERRITT 

DO NOT WARRANT VACATING THE JUDGMENT AND ORDERS IN THIS 

3 ADVERSARY PROCEEDING PURSUANT TO RULE 60(b) (6) 

4 Conspicuously missing from Mackim' s Motion is any discussion 

5 of the controlling law of when a final judgment may be vacated 

6 based upon a post-final judgment change in controlling law stated 

7 by an appellate court. Macklin merely asserts that it is fair, 

8 right, equitable, and necessary to prevent Macklin from being 

9 further prejudiced. 

10 The court begins its consideration of the application of Rule 

11 60(b) (6) based on the 2015 decision in Jesinoski and the 2014 

12 decision in Merritt by reviewing the Supreme Court ruling in 

13 Ackermann v. United States, 340 U.S. 193 (1950) . When presented 

14 with a request for relief under Rule 60(b) (6), the Supreme Court 

15 held that the requisite "extraordinary circumstances" warranting 

16 such relief did not exist where a party, who was otherwise able to, 

17 failed or elected not to prosecute an appeal of the judgment. Id. 

18 at 201. 

19 More recently, the Supreme Court addressed the Rule 60(b) (6) 

20 standards in Gonzalez v. Crosby, 545 U.S. 524 (2005), stating: 

21 Second, our cases have required a movant seeking 

relief under Rule 60(b) (6) to show "extraordinary 

22 circumstances" justifying the reopening of a final 

judgment. Ackermann v. United States, 340 U.S. 193, 

23 199, 95 L. Ed. 207, 71 S. Ct. 209 (1950); accord, 

id., at 202, 95 L. Ed. 207, 71 S. Ct. 209; Liljeberg, 

24 486 U.S., at 864, 100 L. Ed. 2d 855, 108 S. Ct. 2194; 

id., at 873, 100 L. Ed. 2d 855, 108 S. Ct. 2194 

25 (Rehnquist, C. J., dissenting) ("This very strict 

interpretation of Rule 60(b) is essential if the 

26 finality of judgments is to be preserved") 

27 Petitioner's only ground for reopening the judgment 

denying his first federal habeas petition is that our 

28 decision in Artuz showed the error of the District 

36 

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1 Court's statute-of-limitations ruling. We assume for 

present purposes that the District Court's ruling was 

2 incorrect. As we noted above, however, relief under 

Rule 60(b) (6)--the only subsection petitioner invokes3 -requires a showing of "extraordinary circumstances." 

Petitioner contends that Artuz's change in the 

4 interpretation of the AEDPA statute of limitations 

meets this description. We do not agree. The 

5 District Court's interpretation was by all appearances 

correct under the Eleventh Circuit's then-prevailing 

6 interpretation of 28 U.S.C. § 2244 (d) (2). It is 

hardly extraordinary that subsequently, after 

7 petitioner's case was no longer pending, this Court 

arrived at a different interpretation. 

8 

The change in the law worked by Artuz is all the less 

9 extraordinary in petitioner's case, because of his 

lack of diligence in pursuing review of the statute10 of-limitations issue. At the time Artuz was decided, 

petitioner had abandoned any attempt to seek review of 

11 the District Court's decision on this statute-oflimitations issue. 

12 

This lack of diligence confirms that Artuz is not an 

13 extraordinary circumstance justifying relief from the 

judgment in petitioner's case. Indeed, in one of the 

14 cases in which we explained Rule 60 (b) (6) 's 

extraordinary-circumstances requirement, the movant 

15 had failed to appeal an adverse ruling by the District 

Court, whereas another party to the same judgment had 

16 appealed and won reversal. Ackermann, 340 U.S., at 

195, 95 L. Ed. 207, 71 S. Ct. 209. Some years later, 

17 the petitioner sought Rule 60(b) relief, which the 

District Court denied. We affirmed the denial of Rule 

18 60(b) relief, noting that the movant's decision not to 

appeal had been free and voluntary, although the 

19 favorable ruling in the companion case made it appear 

mistaken in hindsight. See id., at 198, 95 L. Ed. 

20 207, 71 S. Ct. 209. 

21 I Id. at 535-538. 

22 In 2009, the Ninth Circuit visited the "extraordinary 

23 circumstances" requirement for Rule 60(b) (6) in Phelps v. Alameida, 

24 569 F.3d 1120 (9th Cir. 2009) . As with Gonzales, the Ninth Circuit 

25 was considering whether an order relating to a habeas corpus 

26 petition (involving the liberty interests of an incarcerated 

27 person) should be vacated. The vast majority of the appellate 

cases addressing this issue relate to such writs, as opposed to 

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basic civil litigation. 12 

In applying the "extraordinary circumstances" requirements 

for Rule 60(b) (6) relief required under the Supreme Court decisions 

in connection with habeas corpus petitions, the Ninth Circuit 

considered factors used by the Eleventh Circuit in Ritter v. Smith, 

811 F.2d 1398 (11th Cir. 1987) and the Supreme Court in Gonzales. 

The factors considered (and expressly stated not to be a "rigid or 

exhaustive checklist") in Phelps were: 

Did the change in law overrule what was otherwise 

settled legal precedent and was the trial court ruling 

correct under the prior law? Gonzales, 545 U.S. at 

536. "It is hardly extraordinary that subsequently, 

after petitioner's case was no longer pending, this 

Court arrived at a different interpretation [of the 

law]." Id. 

Had the party seeking the Rule 60(b) (6) been diligent 

in pursuing review of the issue for which the relief 

is now sought? Id. The lack of diligent pursuing an 

appeal "[c]onfirms that [a subsequent change in the 

law by the Supreme Court] is not an extraordinary 

circumstance justifying relief from the judgment 

" Id.' 

Would reconsidering the final judgment undo the past, 

executed effects of the judgment. Ritter v. Smith, 

811 F.2d at 1402. 

12 In Phelps, the Ninth Circuit noted that Rule 60(b) (6) 

has application well beyond petitions for habeas corpus, and 

"while some of the factors we emphasize here may be useful in 

contexts other than the one before us, we express no opinion on 

their applicable vel non [ or not] beyond the scope of habeas 

corpus. Phelps v. Alameida, 569 F.3d at 1135 n. 19. 

13 In making this point, the Supreme Court cited to its 

decision in Ackermann in which it denied Rule 60(b) (6) relief to 

one party to the action who failed to appeal, notwithstanding 

another party to the same action who did prosecute an appeal and 

won reversal of the ruling as to that party. "We affirmed the 

denial of Rule 60(b) relief, noting that the movant's decision 

not to appeal had been free and voluntary, although the favorable 

ruling in the companion case made it appear mistaken in 

hindsight." Id. at 538. 

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The delay between the finality of the judgment and the 

Rule 60(b) (6) motion. Id. at 1403. 

The close relationship between the original judgment 

and the subsequent decision changing the law. Id. at 

1402. 14 

When considering a petition for habeas corpus, there 

is a serious issue of comity between the state and 

federal judiciaries. Id. at 1404. 

In Phelps, the Ninth Circuit concluded that the movant hit 

all six of the non-exclusive, non-mechanical application factors: 

In this case, the lack of clarity in the law at the 

time of the district court's original decision, the 

diligence Phelps has exhibited in seeking review of 

his original claim, the lack of reliance by either 

party on the finality of the original judgment, the 

short amount of time between the original judgment 

becoming final and the initial motion to reconsider, 

the close relationship between the underlying decision 

and the now controlling precedent that resolved the 

preexisting conflict in the law, and the fact that 

Phelps does not challenge a judgment on the merits of 

his habeas petition but rather a judgment that has 

prevented review of those merits all weigh strongly in 

favor of granting Rule 60(b) (6) relief. 

Phelps, 569 F.3d at 1140.' 

14 This factor presents the court with an interesting 

dilemma. If the change in law in the second case is not closely 

related, then it is unlikely that the change will have a 

significant impact on other case. Thus, the subsequent change in 

law decision will be relevant only when it is closely related. 

To give this factor disproportionately significant weight would 

be to say that it is a per se basis for granting such relief. 

That interpretation would be contrary to the well-established 

Supreme Court rulings for when Rule 60(b) (6) relief should be 

granted. 

15 The facts considered by the Ninth Circuit in coming to 

ithis conclusion included: 

(1) the prevailing law upon which the trial court decision was 

based was not well settled, but in flux. The same issue was 

pending before three different Ninth Circuit, which reached 

diametrically opposite outcomes, for which no published decisions 

were issued. The law was unsettled. 

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Case 11-02024 Filed 04/08/15 Doc 423
Macklin Fails to Provide Grounds For 

Relief Pursuant to Rule 60(b) (6) 

Macklin requests the court vacate the judgment and order 

dismissing Causes of Action 1-8 based on the pronouncement of law 

in Jesinoski and Merritt. However, the Motion does not have any 

discussion of the proper application of Rule 60(b) (6) based on a 

change of law for cases in which there is a final judgment. 

Rather, it contains only a general discussion of Rule 60(b) itself 

and the conclusion, "[t]he catch-all provision, Rule 60(b) (6), has 

Phelps had actively appealed the decision and sought 

reconsideration, including seeking a rehearing en banc and a 

petition for certiorari, all while litigating from his jail cell. 

We cannot imagine a more sterling example of diligence 

than Phelps has exhibited. At every stage of this case 

over the past decade, Phelps has pressed all possible 

avenues of relief, has been remarkably undeterred by 

the repeated and often unjustified setbacks he has 

suffered, and has put forward cogent, compelling, and 

correct legal arguments, at times doing so without the 

benefit of professional legal advice. No one should 

have to work so hard to have the merits of his 

constitutional claims reviewed by a federal judge. 

Id. at 1137. 

. The judgment at issue did not alter the positions of the 

parties taken in reliance thereon. For Phelps, he merely stayed 

in custody and the state held him in custody. 

. The Motion for relief was originally filed only four months 

after the original judgment became final. 

. The change in law was directly related to the issue 

advanced by Phelps and resolved a conflict between competing and 

coequal legal authorities. 

(6). Granting 60(b) (6) relief does not raise significant comity 

concerns because the order being vacated was not one based on the 

merits. 

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Case 11-02024 Filed 04/08/15 Doc 423
1 been invoked to relive a party of a final judgment in 

2 'extraordinary circumstances.' This case warrants extraordinary 

3 circumstance." Motion, p. 10:16-17. 

4 As addressed above, Rule 60(b) (6) is not a "catch-all," 

5 "judge make up whatever rule you want" grant of power. It is a 

6 very carefully circumscribed power which is to be executed only in 

7 limited "extraordinary circumstances." It cannot overlap with or 

8 be used to circumvent the requirements of other provisions of 

9 Rule 60. 

10 In Jesinoski, the Supreme Court was presented with a very 

11 narrow issue to address - whether a borrower was required to 

12 commence suit to enforce a rescission under 15 U.S.C. § 1635 within 

13 three years of the transaction, or provide notice of the election 

14 to rescind within the three-year period. The Supreme Court 

15 decided, 

16 

The language leaves no doubt that rescission is 

17 effected when the borrower notifies the creditor of 

his intention to rescind. It follows that, so long as 

18 the borrower notifies within three years after the 

transaction is consummated, his rescission is timely. 

19 The statute does not also require him to sue within 

three years. 

20 

21 Jesinoski v. Countrywide Home Loans, 135 S. Ct. at 792. 

22 The first question for the court is whether any portion of 

23 the prior ruling on the motion to dismiss or the summary judgment 

24 is based on the grounds that suit had to be commenced within three 

25 years, not merely a notice of rescission provided by Mackim. 

26 With respect to the Supreme Court determining that the suit 

27 for rescission need not be filed within the three-year period, 

28 Macklin does not direct the court to any portion of the ruling on 

41 

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the motion to dismiss or ruling on the summary judgment motion in 

which the decision was made on that ground. The court's own review 

of both rulings, as discussed supra, does not uncover any such 

grounds being relied upon by the court. 

The Ninth Circuit decision in Merritt is equally narrow, 

addressing only whether the tender, or the ability to tender, by 

borrower as a condition of rescission must be pleaded. The Merritt 

court held: 

For all these reasons, we hold that plaintiffs can 

state a claim for rescission under TILA without 

pleading that they have tendered, or that they have 

the ability to tender, the value of their loan. Only 

at the summary judgment stage may a court order the 

statutory sequence altered and require tender before 

rescission -- and then only on a "case-by-case basis," 

Yamamoto, 329 F.3d at 1173, once the creditor has 

established a potentially viable defense. 

Merritt v. Countrywide Financial Corporation, 759 F.3d at 1033. 

With respect to the Ninth Circuit decision in Merritt, the 

court again looks to the ruling on the motion to dismiss and the 

ruling on the motion for summary judgment. In ruling on these, the 

court did not base the decision on Macklin failing to plead tender 

or the ability to tender. The various causes of action were 

dismissed for much more substantial deficiencies. 

The Motion fails for this reason. 

Consideration Of Gonzalez, Ackermann, and Phelps Factors 

Assuming, arguendo, that the decisions in Jesinoski and 

Merritt changed the law upon which the orders dismissing Causes of 

Action 1-8 and denying the Motion to File a Second Amended 

Complaint after discovery closed, and the Summary Judgment were 

based, Macklin has failed to show that such changes should apply to 

vacate the orders and judgment. 

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1 First, the law at the time of the orders and Summary Judgment 

2 was not unsettled in this Circuit and other Circuits. All of the 

3 rulings of this court were in compliance with the then-binding 

4 appellate case law. Those appellate cases were consistent with 

5 ruling in other Circuits. 

6 Second, Macklin has not been diligent in pursuing an appeal 

7 of the orders and judgment. Rather, he abandoned the appeal, 

8 failing to respond to the Bankruptcy Appellate Panel notice or seek 

9 relief pursuant to Bankruptcy Rule 8002(c) (2) in effect at the time 

10 of the appeal. Further, it is clear that Mackim's strategy has 

11 been to pursue a parallel action in the District Court rather than 

12 pursuing an appeal. It is now, after the District Court dismissed 

13 that action, that Macklin now seeks to reopen the final orders and 

14 judgment in this Adversary Proceeding. 

15 At this juncture, denying the Motion falls squarely in the 

16 rulings of the Supreme Court in Gonzalez and Ackermann. Nothing 

17 more is required for denial of a Rule 60(b) (6) motion pursuant to 

18 the standard established by Supreme Court. 

19 Third, this court issued a final judgment in which it has 

20 determined that DBNTC owns the Property. While Macklin may have 

21 worked to cloud the title to the Property and collaterally undo the 

22 judgment of this court by improperly pursuing the parallel action 

23 in District Court after final judgment in this Adversary 

24 Proceeding, that does not diminish the rights and interests of 

25 DBNTC as owner of the Property. The court determined that title 

26 had changed and DBNTC is the owner of the Property. With that 

27 judgment, from which no appeal was taken, DBNTC could move forward 

28 as the judicially determined owner of the Property. 

43 

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1 Fourth, this Rule 60 (b) motion is being brought twenty months 

2 after the Judgement was entered. It is nineteen months after 

3 Mackiln abandoned any effort to pursue an appeal of that Judgment. 

4 It is being made after Macklin has attempted to relitigate, and 

5 ultimately lost, in the District Court the same issues which were 

6 determined in the final judgment issued by the bankruptcy court. 

7 Macklin has engaged in slipping back and forth between the 

8 Bankruptcy Court and District Court, attempting to shop for the 

9 most favorable ruling from whomever Macklin believes is the most 

10 favorable judge at the moment. Macklin has not been diligent in 

11 the prosecution of his rights and the appeal of the final judgment 

12 of this court. 

13 Fifth, the changes in law stated in Jesinoski and Merritt 

14 I bear no relation to the basis for the rulings in the Order and the 

15 Judgment. Therefore, Mackiln's request for relief pursuant to Rule 

16 60(b) (6) is denied. 

17 THE POST-JUDGMENT RULINGS IN 1ESINOSKI AND MERRITT 

ARE NOT A BASIS FOR RELIEF PURSUANT 

18 TO FEDERAL RULE OF CIVIL PROCEDURE 60(b) (4) 

19 Macklin argues that, pursuant to Rule 60(b) (4), Jesinoski 

20 I and Merritt have made the court's decisions void and that the 

21 orders violated due process. Rule 60(b) (4) allows for a party to 

22 seek relief from a final judgment if the judgment is void. Rule 

23 60(b) (4) applies "only in the rare instance where a judgment is 

24 premised either on a certain type of jurisdictional error or on a 

25 violation of due process that deprives a party of notice or the 

26 opportunity to be heard." United Student Aid Funds, Inc. v. 

27 Espinosa, 559 U.S. 260, 271 (2010) . For instance, a judgment is not 

28 void "simply because it is or may have been erroneous." Id. at 270 

Case 11-02024 Filed 04/08/15 Doc 423
1 I (internal citations omitted). A motion under Rule 60(b) (4) is not 

2 a substitute for a timely appeal. Id. 

3 Under Rule 60(b) (4), a judgment may be set aside as void for 

4 lack of jurisdiction generally when the rendering court lacked even 

5 an "'arguable basis' for jurisdiction." DiRaffael v. California 

6 Military Dep't, No. 12-57200, 2015 WL 625197, at *1 (9th Cir. 

7 Feb. 13, 2015) (citing Espinosa, 559 U.S. at 271) 

8 It is worth noting first that Mackiln does not specifically 

9 argue anywhere in the Motion or the Reply specifics grounds to 

10 justify relief under Rule 60(b) (4). Rather, the one reference to 

11 Rule (b) (4) is the reference to the Seventh Circuit decision in 

12 Simer v. Rios, 661 F.2d 655 (7th Cir. 1981), for the proposition 

13 that vacating a judgment is proper when it is void because it was 

14 obtained in violation of the party's procedural Due Process rights. 

15 Macklin fails to state what Due Process violation was sufficient 

16 for vacating the judgment in Simer. The Seventh Circuit provides 

17 the following guidance in its decision: 

18 Mere error in the entry of a judgment does not render 

a judgment void for purposes of Rule 60(b) (4) . Chicot 

19 County Drainage District v. Baxter State Bank, 308 

U.S. 371, 374-78, 60 S. Ct. 317, 318-20, 84 L. Ed. 329 

20 (1940) . But where an error of constitutional dimension 

occurs, a judgment may be vacated as void. One such 

21 constitutional error for concluding that a judgment is 

void for purposes of Rule 60(b) (4) is if the judgment 

22 was entered in violation of due process. 

23 As is discussed below, in greater detail, entry of the 

settlement decree without notice to putative class 

24 members violated the due process rights of the class 

members. Entry of the settlement decree, while not 

25 binding on absent individuals, nonetheless did 

prejudice the rights of these individuals. Therefore, 

26 as a matter of due process, notice was required to 

protect their rights. Because this notice never was 

27 delivered the judgment must be vacated as void. Sertic 

v. Cuyahoga Lake, etc., Carpenters District Council, 

28 459 F.2d 579, 581 (6th Cir. 1972); Sagers v. Yellow 

45 

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1 Freight System, Inc., 68 F.R.D. 686 (N.D. Ga.1975). 

2 Id. at 663-664. 

3 Macklin does not contend that he was not provided notice, nor 

4 provided with the opportunity to petition the court, nor provided 

5 the opportunity to file his motion for summary judgment, nor 

6 provided the opportunity to respond to the defense and request for 

7 relief by DBNTC. Macklin does not allege any procedural 

8 deficiency. Rather, he merely argues that the court got it wrong, 

9 based on his reading of the post-judgment decisions in Jesinoski 

10 and Merritt (and ignoring the detailed rulings of the court on the 

11 various motions in this Adversary Proceeding) 

12 First, as discussed supra, DBNTC clearly is a party-in-- 

13 interest with standing. Macklin attempts to argue that under 

14 Jesinoski and Merritt that the recession was valid and thus the 

15 I security interest is void. As such, Macklin argues that DBNTC has 

16 no interest and thus the court has no subject-matter jurisdiction. 

17 This is incorrect and DBNTC can defend its rights and interests 

18 against Mackim's claims, including asserting that it held the 

19 title to the Property. Further, this federal court had and has 

20 subject matter jurisdiction. 

21 Second, a motion under Rule 60(b) (4) cannot be a substitute 

22 for an appeal. Macklin, after having attempted and lost in both 

23 the District Court and this court in his actions against DBNTC, 

24 Macklin now seeks to reverse the final judgment of this court. 

25 Macklin's grounds are that because the court made an alleged error 

26 of law, the final judgment of this court is void. It is clear that 

27 Macklin has engaged in forum shopping in order to try and achieve 

28 a favorable ruling. Once Macklin the final judgment was entered in 

MM 

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1 I this court, Macklin attempted to prosecute a nearly identical 

2 I complaint in the district court. 

3 Instead of taking an appeal from this court's ruling, Mackim 

4 implemented a litigation strategy to prosecute the same claims in 

5 the District Court. Macklin made a conscious decision to forego 

6 I the appellate process and instead circumvent it through 

7 collaterally attacking the judgment by seeking a different decision 

8 in another court. The time to appeal the final judgment in this 

9 court has come and gone, and a Rule 60(b) (4) motion will not serve 

10 as a substitute for Macklin's decision not to pursue an appeal. 

11 I This court has and had subject matter jurisdiction, has and 

12 had in personam jurisdiction of parties who have and had standing 

13 to litigate the rights and interests at issue, and no Due Process 

14 violation have been identified (such as failure to be provided 

15 notice of the proceeding(s)). Mackim's request for relief under 

16 Rule 60(b) (4) is denied. 

17 THE POST-JUDGMENT RULINGS IN JESINOSKI AND MERRITT 

ARE NOT A BASIS FOR GRANTING RELIEF PURSUANT TO 

18 FEDERAL RULE OF CIVIL PROCEDURE 60(b) (5) 

19 Rule 60(b) (5) allows a party to obtain relief from a judgment 

20 or order if, in relevant part, "applying [the judgment or order] 

21 prospectively is no longer equitable." A party may not challenge 

22 the legal conclusions on which a prior judgment or order rests. 

23 Home v. Flores, 557 U.S. 433, 447, 129 S. Ct. 2579, 2593, 174 L. 

24 Ed. 2d 406 (2009). Instead, Rule 60(b) (5) provides a means by 

25 which a party can ask a court to modify or vacate a judgment or 

26 order if "a significant change either in factual conditions or in 

27 law" renders continued enforcement "detrimental to the public 

28 interest." Id. (citing Rufo v. Inmates of Suffolk County Jail, 

47 

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1 502 U.s. 367, 384, 112 5.Ct. 748, 116 L.Ed.2d 867 (1992)) . The 

2 party seeking relief bears the burden of establishing that changed 

3 circumstances warrant relief. Rufo at 383. 

4 Rule 60(b) (5) applies only to those judgments that have 

5 prospective application. "The standard used in determining whether 

6 a judgment has prospective application is whether it is executory 

7 or involves the supervision of changing conduct or conditions." 

8 Harvest v. Castro, 531 F.3d 737, 748 (9th Cir. 2008) (citing 

9 Maraziti v. Thorpe, 52 F.3d 252, 254 (9th Cir.1995) (internal 

10 quotation marks and citations omitted) . Merely because a court' s 

11 actions have some continuing consequences, "does not necessarily 

12 mean that it has 'prospective application' for the purposes of Rule 

13 60(b) (5) ." Twelve John Does v. District of Columbia, 841 F.2d 1133, 

14 1138-1139 (D.C. Cir. 1988) . For instance, declaratory judgments 

15 that have no "future-directed" declarations are not considered 

16 prospective for purposes of Rule 60(b) (5). 12 MooRE's FEDERAL PRACTICE, 

17 § 60.47[1] [c] (Matthew Bender 3d ed.) 

18 Here, Macklin asserted various federal law and related state 

19 law claims against DBNTC, as well as seeking a determination of 

20 whether Macklin or DBNTC held title to the Property. The court has 

21 made those determinations, which are embodied in the final judgment 

22 I issued by this court, for which no appeal was prosecuted. The 

23 court in its final judgment made determinations as to the rights 

24 and obligations of the parties as they existed at the time of the 

25 litigation. No part of the judgment is prospective. The court has 

26 not ordered parties to do anything in the future, does not have to 

27 I "supervise" the enactment of the judgment, and has no further 

28 hearings to determine the rights, conduct, and actions of the 

Case 11-02024 Filed 04/08/15 Doc 423
ii I parties in the future. There was nothing in either the order 

2 dismissing, the order granting summary judgment, nor the final 

31 judgment which has prospective application. The determinations made 

4 by the court were not ones that required continued court oversight 

5 nor were they executory - they were determinations of the rights of 

6 the parties. 

7 Macklin argues, though not stating grounds with particularity 

8 as required by Rule 7(b) nor specifically citing Rule 60(b) (5) (C), 

9 that the rulings in Jesinoski and Merritt have somehow altered the 

10 court's rulings in such a way that the orders themselves are "no 

11 longer equitable." However, relief under Rule 60(b) (5) requires 

12 that the judgment is prospective before the court determines 

13 whether its continued application is no longer equitable. Mackim 

14 has failed to reach the initial burden of showing that the 

15 dismissal and summary judgment orders (although Macklin attempts to 

16 have all orders vacated) are somehow executory or require further 

17 court oversight. Instead, Macklin merely makes a blanketed 

18 assertion that the two recent cases act as an automatic reset for 

19 Macklin's claim with no regard to the requirements under Rule 

20 60(b) (5). 

21 Macklin's request to vacate under Rule 60(b) (5) is denied. 

22 RELIEF PURStThNT TO FEDERAL RULE OF CIVIL PROCEDURE 60(b) (1) 

IS NOT PROPER, MACKLIN FAILING TO SEEK RELIEF 

23 WITHIN ONE YEAR OF THE JUDGMENT 

24 Macklin argues that under Rule 60(b) (1), the court should 

25 vacate all prior orders and judgments. However, the time for 

26 Macklin to make a motion to vacate under 60(b) (1) has come and 

27 I gone. 

28 Pursuant to Rule 60 (b) (1), the court may vacate a final 

19 

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1 judgment, order, or proceeding for "mistake, inadvertence, 

2 surprise, or excusable neglect." However, Rule 60(c) (1) 

3 specifically limits the timing of motions "for reasons (1), (2), 

4 and (3) no more than a year after the entry of the judgment or 

5 order of the date of the proceeding." 

6 Here, the order dismissing the first (Trust in Lending Act), 

7 second (Real Estate Settlement Procedures Act), third (Fair Credit 

8 Reporting Act), fourth (Fraud), fifth (Unjust Enrichment), sixth 

9 (Civil RICO, seventh (Business and Professions Code § 17200), and 

10 eighth (Breach of Security Agreement) causes of action was entered 

11 February 16, 2012. Dckt. 221. The order granting summary judgment 

12 to DBNTC for the ninth (Wrongful Foreclosure) and tenth (Quiet 

13 Title) cause of action was entered May 24, 2013. 

14 Macklin did not file the instant Motion until January 22, 

15 2015. This is thirty-four months after the order dismissing the 

16 first eight causes of action and eighteen months after the judgment 

17 was entered by this court. As stated by the Supreme Court in 

18 Ackermann, " IA] motion for relief because of excusable neglect as 

19 provided in Rule 60 (b) (1) must, by the rule's terms, be made not 

20 more than one year after the judgment was entered." Ackerman v. 

21 United States, 340 U.S. at 197. "The one-year limitations period 

22 for filing a Rule 60(b) (1) motion is absolute. Warren v. Garvin, 

23 219 F.3d 111, 114 (2d Cir. 2000) (citing 12 James Wm. Moore, 

24 Moore's Federal Practice, P 60.65[2][a], at 60-200 (3d ed. 1997)); 

25 United States v. Serenguer, 821 F.2d 19, 21 (1st Cir. 1987) (citing 

26 11 Wright & Miller, § 2866) ." Tool Box, Inc. V. Ogden City Corp., 

27 419 F.3d 1084, 1088 (10th Cir. 2005). 

28 'Therefore, because Macklin filed the present Motion seeking 

50 

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1 I relief pursuant to Rule 60(b) (1) more than one year after the 

2 orders and the judgment were entered, the relief is denied. 

3 THE POST-JUDGMENT RULINGS IN JESINOSKI AND MERRITT 

DO NOT WARRANT VACATING THE JUDGMENT AND ORDERS IN THIS 

4 ADVERSARY PROCEEDING PURSUANT TO RULE 60(d) 

5 Macklin lastly requests relief under Rule 60 (d) . In Mackim' s 

6 Motion, the only mention of Rule 60(d) is where Macklin states: 

7 "FRCP Rule 60(d) Other Powers to Grant Relief. This rule does not 

8 limit a court's power to: (1) entertain an independent action to 

9 relieve a party from a judgment, order, or proceeding." Dckt. 380, 

10 pg. 3. Even in Mackim's conclusion, Macklin fails to raise any 

11 grounds that would support relief pursuant to Rule 60 (d) . Rather, 

12 Macklin leaves it for the court to determine what, if any, of the 

13 statements in the Motion would be the grounds that Macklin seeks to 

14 assert to support this relief. Macklin does not even address any 

15 grounds for Rule 60(d) relief in Macklin's reply to the Opposition. 

16 Dckt. 400. 

17 Rule 60(d) provides that the rule does not limit a court's 

18 power to: "(1) entertain an independent action to relieve a party 

19 from a judgment, order, or proceeding; (2) grant relief under 

20 28 U.S.C. § 1655 to a defendant who was not personally notified of 

21 the action; or (3) set aside a judgment for fraud on the court." 

22 Rule 60(d) does not create a new right of action but rather it 

23 merely preserves the existence of a "procedural remedy . . . by a 

24 new or independent action to set aside a judgment upon those 

25 principles which have heretofore been applied in such an action." 

26 Rule 60, Advisory Committee note of 1946. The typical grounds 

27 justifying an independent actions in equity is fraud. See United 

28 States v. Beggerly, 524 U.S. 38 (1998) 

51 

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1 In order for a party to seek relief under Rule 60(d), the 

2 moving party must also show a meritorious claim or defense. 

3 Furthermore, courts have found that when there is both a Rule 60(b) 

4 motion and an independent action based on the very same ground, the 

5 Rule 60(d) motion should be dismissed since the court is 

6 considering the same issues in the context of Rule 60 (b) . Goodyear 

7 Tire & Rubber Co. v. H.K. Porter Co., 521 F.2d 699, 700 (6th Cir. 

8 1975) 

9 Here, Macklin has not provided any grounds in which a motion 

10 under Rule 60(d) (1) is proper. Nowhere in the Motion nor Reply 

11 does Macklin mention any fraud or independent actions in equity 

12 that may even be construed as a ground for relief under Rule 

13 60(d) (1). 

14 From the court's review of the case law, the court finds no 

15 basis that justifies relief under Rule 60 (d) (1) for the post16 judgment rulings. Rule 60(d) (1) is not the catch-all provision that 

17 allows a party a last gasp attempt to retry litigation which they 

18 lost. Instead, Rule 60(d) (1) was meant to "preserve whatever power 

19 federal courts had prior to the adoption of Rule 60 to relieve a 

20 party of judgment by means of an independent action according to 

21 traditional principles of equity." 12 MooRE's FEDERAL PRAcTIcE, 

22 § 60.80 (MATTHEW BENDER 3D ED.) (citing Treadaway v. Academy of Motion 

23 Picture Arts & Sciences, 783 F.2d 1418 (9th Cir. 1986) 

24 Macklin has not identified any independent action which pre25 dates Rule 60 that would justify relief under Rule 60(d) (1) 

26 Rather, this appears to be a hail mary reference for the court to 

27 just set the judgment aside because Macklin lost, irrespective of 

28 Macklin not having, and failing to show, proper grounds for relief 

52 

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1 

2 

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4 

5 

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22 

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25 

26 

27 

28 

under Rule 60(b). 

Therefore, because Macklin failed to provide grounds of an 

independent action in equity and failed to plead with particularity 

as required by Rule 7(b), the relief is denied. 

CONCLUSION 

After review of the law; consideration of all arguments 

presented by the parties; the orders, findings of fact and 

conclusions of law, and final judgment in this Adversary 

I Proceeding; the documents and evidence presented; and the 

proceedings in the District Court; this court concludes that 

Mackiln has failed to show grounds for relief under Federal Rule of 

Civil Procedure 60. The court denies Mackim's Motion in its 

entirety. 

This Memorandum Opinion and Decision constitutes the court's 

findings of fact and conclusions of law pursuant to Rule 52 and 

Bankruptcy Rule 7052. 

The court shall issue a separate order consistent with this 

Memorandum Opinion and Decision. 

Dated: April 8, 2015 In 

53 

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Case Number: 2011-02024 Filed: 11/8/2012 Doc #304 

ADDENDUM A 

UNITED STATES BANKRUPTCY COURT 

EASTERN DISTRICT OF CALIFORNIA 

CIVIL MINUTES 

Adversary Title: 

Matter: 

Macklin v. Deutsche Bank Case No: 10-44610 - E - 7 

National Trust Co. 

AdvNo: 11-02024-E 

Date: 11/8/12 

Time: 09:30 

[288] - Motion/Application to Amend [DJH-1] 

120 Amended Complaint Filed by Plaintiff 

James L. MackIm (pdes) 

Judge : Ronald H. Sargis 

Courtroom Deputy: Janet Larson 

Reporter: Diamond Reporters 

Department: E 

APPEARANCES for: 

Movant(s) : 

Plaintiffs Attorney - Daniel J. Hanecak 

Respondent(s) : 

Defendant's Attorney - Craig Crawford 

MOTION was: 

Denied 

See Findings of fact and conclusions of law below 

The court will issue a minute order. 

Local Rule 9014-1(f)(1) Motion Opposition Filed. 

Proper Notice Provided. The Proof of Service states that the Motion and Notice of Hearing were served on 

the Defendants Attorneys on October 4, 2012. By the courts calculation, 35 days notice was provided. 28 

days notice is required. 

The Motion for Leave to Amend Complaint has been properly set for hearing on the notice required by 

Local Bankruptcy Rule 9014-1(f)(1). The failure of the respondent and other parties in interest to file written 

opposition at least 14 days prior to the hearing as required by Local Bankruptcy Rule 9014-1 (f)(1 )(ii) is 

considered to be the equivalent of a statement of nonopposition. Cf. Ghazali v. Moran, 46 F.3d 52, 53 (9th 

Cir. 1995). As Defendant filed an opposition, the court will address the merits of the case. 

The courts decision is to deny the Motion for Leave to Amend Complaint. 

Plaintiff seeks leave to amend his First Amended Complaint (FAC) which was filed in this case on June 17, 

2011. 

Legal Standard for Leave to Amend Pleading 

A party may amend its pleading only with the opposing partys written consent or the courts leave. The court 

should freely give leave when justice so requires. Fed. R. Civ. P. § 1 5(a)(2), as incorporated by Fed. R. 

Bankr. P. 7015. There is a strong policy of liberal authorization to amend pleadings in the Federal Courts. 

In re Kashami, 190 B.A.P. 875 (9th Cir. 1995). In situations where Plaintiffs causes of actions have been 

dismissed without leave to amend, the Plaintiff bears the burden of proving there is a reasonable possibility 

of amendment. Blank v. Kirwan, 39 Cal.3d 311(1985). 

ADDENDUM A 

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Case Number: 2011-02024 Filed: 11/8/2012 Doe # 304 

While there is a strong policy of liberal authorization to amend pleadings in the Federal Courts, the court is 

correct to deny leave where there is undue delay, bad faith, repeated failure to cure deficiencies by 

amendments previously allowed, or undue prejudice to the opposing party. Foman v. Davis, 371 U.S. 178, 

182 (1962); Moore v. Kayport Package Exp., Inc. 885 F.2d 531 (9th Cir. 1989). Furthermore, an 

amendment that would serve no useful purpose, i.e. be subject to a motion to dismiss, should not be 

allowed. Foman v. Davis 371 U.S. at 182. 

Original Complaint 

The Plaintiff filed his Original Complaint (17 pages of pleading in length) on January 13, 2011. Dckt. 1. The 

court entered an order on May 20, 2011, granting the Defendants motion and dismissed the Third, Fourth, 

Fifth, and Sixth Causes of Action with leave to amend. The Plaintiff was represented by Holly S. Burgess 

when filing the Original Complaint. 

First Amended Complaint 

The Plaintiff filed the FAC (46 pages of pleadings, without exhibits, in length) on June 17, 2011. He was 

again represented by Holly S. Burgess. 

On October 3, 2011, the Plaintiff filed a substitution of attorney, replacing Holly Burgess with Allan R. 

Frumkin. Dckt. 192, Order authorizing, Dckt. 193. 

On February 16, 2012, the court granted the Defendants motion to dismiss this Adversary Proceeding, 

ordering that the First, Second, Third, Fourth, Fifth, Sixth, Seventh, and Eighth Causes of Action were 

dismissed. Order, Dckt. 222. The court denied the motion as to the Ninth and Tenth Causes of Action. The 

court ordered that the Defendant file its answer on or before February 28, 2012. No leave to amend was 

automatically granted for the Plaintiff. 

The court issued a detailed ruling explaining the dismissal of the various claims in the FAC and not granting 

leave to amend. Memorandum Opinion and Decision, Dckt. 221. In the Decision the court addressed a 

proposed second amended complaint that Alan Frumkin stated that he intended to file for the Plaintiff. The 

draft second amended complaint was 45 pages in length and (as described by this court), 

[c]continues to use dense text in attempting to communicate the grounds upon which the relief is based, 

including single paragraphs running more than a page in length. Rather than alleging the basis for a claim, 

the FAC is written more as an editorial and argumentative treatise in support of Macklins contention that he 

owns the Property and has no obligation to pay for the monies he received as part of the loan transaction. 

Decision, EN. 112, Dckt. 221. 

In denying any automatic right to file a second amended complaint, the court addressed the pleading 

deficiencies and outlined the process for Plaintiff to file a motion for leave to file a second amended 

complaint. In the February 16, 2012 Decision the court outlined the following minimum requirements for 

granting leave to amend: 

(1) Provide the legal authorities which are identified to support their good faith contentions; 

(2) Preemptively address, 

Established California law that the deed of trust always follows the note; 

California Commercial Code provisions governing the negotiation, enforceability, and enforcement of 

notes; 

That forfeiture of property rights is not favored; 

How payments made by insurance companies, loan servicers, or others pursuant to a separate 

agreement not including Macklin provide for the payment of Macklins obligations under the Note and why 

the principles of subrogation do not apply; and 

The holding of the Ninth Circuit Court of Appeals in Cervantes v. Countrywide Home Loans, Inc., 650 

F.3d 1034 (9th Cir. 2011). 

(3) Further, Macklins practice of routinely and indiscriminately for each cause of action incorporating all of 

the prior paragraphs of the complaint does not lead to the court and other parties being able to clearly 

ADDENDUM A 

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Case Number: 201 1-02024 Filed: 11/8/2012 Doe # 304 

understand the short and plain statement of the claim showing that the pleader is entitled to relief as 

required by Fed. R. Civ. P. 8(a)(2) and Fed. R. Bankr. P. 7008. 

Memorandum Opinion and Decision, pg. 47:13-28,48, 49:1-5. 

The plaintiff has generally addressed items 1 and 2(e), Plaintiff has clearly ignored items 2(a), 2(b), 2(c), 

2(d) and 3 for the Proposed Second Amended Complaint. 

On February 21,2012, merely one week after granting the motion to dismiss various causes of action in the 

FAC, James Macklin and Allan Frumkin filed a Notice that Alan Frumkin was being substituted out of the 

case and seeing to have the court order that James MackIm, having most of his claims stricken, but 

substituted to represent himself in pro Se. Mr. Macklin and Mr. Frumkin ignored the Local Bankruptcy Rules 

and Local District Court Rules (which are incorporated into the Bankruptcy Rules, requiring that the court 

allow and order the withdrawal and substitution of counsel. 

On March 2, 2012, Allan R. Frumkin filed a Motion for leave to withdraw as counsel, leaving James MackIm 

to continue in the case in pro se. The court denied this request, ordering Mr. Frumkin to file a noticed 

motion to withdraw. Order, Dckt. 235. By orders filed on April 23, 2012 the court allowed Alan Frumkin to 

withdraw as counsel and allow Holly S. Burgess to reenter the case as Mr. Macklins counsel. Dckt. 243, 

244. In approving this substitution, the court notified Mr. Macklin and Holly S. Burgess that the court would 

not allow the Plaintiff to engage in a game of musical chairs, changing attorneys to disrupt the reasonable 

prosecution of this Adversary Proceeding. 

The Defendant filed its answer on February 28, 2012. Based on the discovery plans submitted by the 

Plaintiff (represented by counsel Holly S. Burgess) and Defendant, the court issued a scheduling order 

providing that (1) expert witnesses be disclosed by August 15, 2012, (2) expert witness reports be 

exchanged by September 15, 2012, (3) non-expert discovery closed on October 15, 2012, (4) rebuttal 

expert witnesses disclosed by October 15, 2012, and expert witness discovery closed January 31, 2013. 

Pretrial Conference and Scheduling Order, Dckt. 250. 

On August 23, 2012, Holly Burgess filed a third motion to substitute attorneys for the Plaintiff, proposing to 

substitute Daniel Hanecak as Plaintiffs counsel. Dckt. 270. The court denied the substitution, without 

prejudice, requiring the Plaintiff to file a noticed motion to explain this third substitution of counsel in this 

Adversary Proceeding. Civil Minutes, Dckt. 272; Order, Dckt. 274. 

On September 27, 2012, the court held a hearing on a new motion to allow Holly Burgess to withdraw as 

counsel and allow Daniel Hanecak to substitute in as counsel. Though the Plaintiff sought this substitution 

of counsel on the eve of discovery closing, the court granted the request, relying on the representations of 

Daniel Hanecak that he was not only up to speed on the case, but also cognizant of the impending close of 

discovery and the fact that trial would be set shortly after the Pretrial Conference. Civil Minutes, Dckt. 285; 

Order, Dckt. 287. Holly Burgess was allowed to withdraw as counsel for the Plaintiff. The court expressly 

advised Mr. Hanecak that the scheduling order was issued in this case and discovery was closing shortly. 

Mr. Hanecak assured the court that he was familiar with the file and order in this Adversary Proceeding. 

Further, he represented to the court that he was an experienced attorney and up to the task of taking on a 

client on the eve of trial. The court accepted Mr. Hanecaks representations as to his experience and ability 

to represent Mr. MackIm. For his party, Mr. Macklin enthusiastically sought this substitution of counsel 

(much in the same way that he enthusiastically sought the substitution of his prior attorneys). 

On October 4, 2012, after the time for disclosing expert witnesses and expert reports exchanged expired, 

and with non-expert discovery (including the hearing of all discovery motions) closing on October 15, 2012, 

the Plaintiff, represented by Daniel Hanecak, filed the present motion for leave to file the Proposed Second 

Amended Complaint. 

Grounds Stated in Motion 

The Motion states with particularity (as required by Federal Rule of Civil Procedure 7(b) and Federal Rule 

of Bankruptcy Procedure 7007) the following grounds upon which the requested leave to file the Proposed 

Second Amended Complaint should be granted, to add three new claims. 

Truth in Lending Act Violations 

A.Plaintiff seeks to amend his complaint and set forth these allegations and amended causes of action 

under the Truth in Lending Act. 

B.Deutsche Bank National Trust Company has liability as a co-venturer and alleged creditor for the 

ADDENDUM A 

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Case Number: 2011-02024 Filed: 11/8/2012 Doe # 304 

underlying failed disclosures. 

C.Plaintiff has the right to rescind under 11 U.S.C. § 1635. 

D.Plaintiffs loan was table funded and presumed to be predatory by the 0CC. 

E.Plaintiff has a claim under California Business & Professions Code §§ 17200 et seq. 

Failed Contract Assertions 

F.The material terms of the agreement for the loan were never set forth and the transaction as stated in the 

deed and note never transpired as stated. 

G.Conditions precedent could never have been met because the wrong parties were named. 

H.Plaintiff challenged the documents and MERS standing as nominee. 

J.MERS never carried a beneficial interest and could never have assigned anything. 

K.Deutsche Bank National Trust Company was a co-venturer in the alleged failed securitization of the 

Plaintiffs note and deed of trust, and does not hold any interest in the loan obligation. 

Addressing Issues From Prior Ruling 

L.The ruling in Cervantes is distinguishable because Plaintiff did not bring a fraud count against MERS. 

Motion, Dckt. 288. Conspicuously absent are any grounds relating to the closing of discovery and the 

bringing of this Motion 22 months after the Original Complaint was filed by the Plaintiff. 

Defendants Opposition 

Defendant Deutsche Bank National Trust Company (Defendant) opposes the motion on the basis that 

Plaintiff Mackiln fails to offer an legitimate reason for amending the same claims that the court has 

previously considered and dismissed. Defendant argues that after the close of discovery, Plaintiffs third 

substitution of counsel and after four prior unsuccessful attempts to plead legally sufficient causes of action 

related to the origination, underwriting and servicing of his home loan, that the Motion to Amend be denied. 

Defendant cites the following to support denial of the Motion: 

A.Plaintiff seeking leave to amend three weeks after discovery closed and just before trial was imminently 

prejudicial as the Defendant was unable to prepare for an defend itself at trial. 

B.Plaintiffs failure to meet his burden to establish a satisfactory explanation for the undue delay. Defendant 

asserts that substituting new counsel is not an excuse for filing an amended complaint. 

C.Prejudice exists against a party if extensive additional discovery would be required, if proceedings would 

be delayed significantly or if an imminent danger exists that the moving party would seek to abuse the 

discovery process. Defendant cites Plaintiffs previous broad discovery requests and Plaintiffs agreement on 

a discovery plan. 

D.Plaintiffs failure to cure the defects in his amended claim. 

E.Plaintiffs failure to cure the defects in his TILA claims, specifically statute of limitations defects and failure 

to state a claim against Defendant as they were not a party to the alleged transactions. 

F.Plaintiff has failed to argue how the alleged disclosure violation would have been plain on its face to 

Deutsche Bank National Trust Company when transferred three years later. 

G.Even if disclosure was plain on its face, the statute of limitations had run on Plaintiffs claim. 

H.Plaintiffs assertion of rescission is contrary to the courts finding that rescission had not occurred. 

I.Plaintiffs failure to properly plead the elements of a UCL violation. 

Plaintiffs Response 

ADDENDUM A 

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Case Number: 2011-02024 Filed: 11/8/2012 Doc # 304 

Plaintiff responds to Defendants opposition, arguing that Defendants will not be prejudiced by allowing the 

amendment, that the court order has been thoroughly addressed, and Plaintiffs claims are not time barred. 

The Plaintiff asserts the following: 

A.New facts are not being asserted, simply addressed to better plead the issues in the case. As such, 

discovery would not be burdensome, since Plaintiff intends to request Defendant to produce only its own 

documents 

B.Plaintiff did properly address the requirements in the Order 

C.Defendant did not address the authorities cited by Plaintiff 

D.The amended pleading presents support that Plaintiffs claims are not time barred 

E.Plaintiff reargues his positions from his Motion 

DISCUSSION 

Timeliness of the Motion A 

First and foremost, the Plaintiff brings this Motion for Leave to Amend on the close of discovery in the 

Adversary Proceeding. This Adversary Proceeding case has been pending for over two years and Plaintiff 

has had ample opportunity to amend his complaint and raise additional claims. Plaintiff has been 

represented by various counsel of his choosing, each with their own opportunities to seek to amend the 

Complaint. However, Plaintiff now chooses to do so, with his latest attorney, as discovery is closing. This is 

prejudicial to the Defendant and frustrating to the court. 

Plaintiff is on his fourth attorney in the present case. This includes firing and the rehiring one counsel when 

he became dissatisfied with her replacement counsel, who apparently told a tale of the virtues of hiring him. 

When Alan R. Frumkin was substituted in as Mr. Macklins counsel in this Adversary Proceeding he filed a 

Motion seeking re-argument on the motion to dismiss the FAC. October 17, 2011 Motion, Dckt. 198. In that 

Motion Mr. Frumkin argues that Mr. Frumkin was only recently substituted in as counsel and that being the 

new counsel constitutes new or changed circumstances. In support of that Motion Mr. Frumkin provided his 

declaration and testified under penalty of perjury, 

A.I have reviewed the file in this matter and concur that certain causes of action were not plead with B 

sufficient specificity and/or did not allege necessary facts to withstand Defendants motion to dismiss. I 

believe deficiencies in some or all of these causes of action can be remedied through filing of a Second 

Amended Complaint. Declaration 5, Dckt. 199. 

B.It would be unconscionable for the complaint to be or remain dismissed as the result of the negligence 

and inattention of Plaintiffs previously counsel; any error or neglect by Plaintiff himself was understandable 

and excusable.... Declaration 6, Dckt. 199. 

Mr. Frumkin also provided the Declaration of James Macklin in support of the motion for re-argument. In 

his Declaration Mr. Macklin testifies under penalty of perjury, 

A.He testifies to having been rushed through signing of the loan application because the notary public had 

to leave. Declaration 2, Dckt. 200. 

B.I later discovered the documents I was pressured into signing did not accurately reflect information 

crucial to an appropriate determination as to my eligibility. Declaration 2, Dckt. 200. 

C.In early June 2011, Mr. Macklin contacted his former (and future repeat) counsel (Holly S. Burgess) 

concerning the drafting of the FAC. He was told that the FAC was not completed and not available for his 

review. Declaration 3, Dckt. 200. 

D.On June 17, 2011, he was contacted his former (and future repeat) counsel (Holly S. Burgess) to come in 

and verify the FAC. Mr. Macklin states that again, this time by his counsel, he was given only minutes to 

sign his name because it had to be filed immediately. He states that he has insufficient time to review the 

FAC before filing it. Declaration 4, Dckt. 200. 

E.Some time later he carefully read the FAC and learned that many of the causes of action were 

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inaccurately pled. (He does not testify when this occurred, but he court would believe that within a day or 

two of June 17, 2011 he would have read his copy of the FAC.) Declaration 5, Dckt. 200. 

F.Mr. Macklin testified that he review this with his former (and future repeat) counsel, and the decision was 

made to address the issues at trial. Declaration 5, Dckt. 200. 

Though Mr. Frumkin was confident that the FAC could and should be amended by competent counsel MC (such as himself), when the court issued its ruling granting the motion to dismiss most of the causes of 

action in the FAC, Mr. Frumkin and Mr. Macklin did not file a motion for leave to amend the FAC. The 

courts order granting the motion to dismissed was entered on the docket on February 16, 2011 (Dckt. 222). 

On February 21, 2011, rather than filing a motion to amend the FAC as Mr. Frumkin earlier testified was 

warranted and could be done in good faith, he instead filed a notice that he was discharged as counsel and 

Mr. Macklin was being left to appear in pro se (ignoring the Local District Court and Local Bankruptcy Court 

Rules for substitution of counsel and substitution of a party in pro Se). 

Mr. Macklin then sought to re-hire Holly S. Burgess, the former attorney that he and Mr. Frumkin sought to 

blame for the FAC. Apparently satisfied with Ms. Burgess representation, possibly in light of Mr. Frumkin 

seeking to tell the court that he was withdrawing from the Adversary Proceeding without leave of the court, 

Mr. Macklin continued to be represented by counsel 

The court then allowed the substitution of attorney, Daniel J. Hanecak, on September 27, 2012. At this 

hearing, all parties were made aware of the Discovery Scheduling and Pre-trial Conference Order (Dckt. 

250) in the adversary proceeding, which stated all non-expert witness discovery must be completed o (including the hearing of all discovery motions) on or before October 15, 2012. Further, Mr. Hanecak 

confirmed at the hearing that he reviewed the file and was aware of the deadlines in the case. See Civil 

Minutes, Dckt. 285. However, the following Motion for Leave to Amend was filed to be heard three weeks 

after the end of the October 15, 2012 closing of discovery. 

After the 22 months this case has been pending, the number of attorneys involved, and the disclosure of 

the deadlines, the Plaintiffs Motion comes too little, too late. There is no dispute that as early as October RE 17, 2011, Mr. Macklin and his attorneys (Mr. Frumkin and Ms. Burgess from reading the pleadings in this 

case) knew that the claims had been dismissed and a motion for leave to file a second amended complaint 

was required if additional bona fide claims existed. The court accepts Mr. Frumkins testimony under penalty 

of perjury that he advised Mr. Macklin of those claims. Further, that if such bona fide claims existed, Mr. 

Frumkin stood ready to fulfill his obligations to Mr. Macklin and advance those claims (which merely 

required the filing of a motion for leave to file a second amended complaint). Mr. Frumkin chose not to file 

such a motion, instead electing to terminate the representation with Mr. MackIm. 

Whatever basis Mr. Macklin had for disparaging the prior representation by Ms. Burgess, which arose when 

it was part of Mr. Frumkins motion to be granted leave to re-argue the motion to dismiss the FAC (while the 

pleadings admitted that the claims had not been sufficient pled), those concerns evaporated when he 

rehired her to continue in the prosecution of this Adversary Proceeding. No steps were taken to file a 

motion for leave to file a second amended complaint by Mr. Mackim. 

Now, on the eve of getting his day in court, a new attorney arises who seeks leave to file a second 

amended complaint, adding complex causes of actions and claims. No credible, good faith explanation is 

provided for why Mr. MackIln did not file a motion for leave to file a second amended complaint for 20 

months after the motion to dismiss the FAC was granted. 

F 

To allow for Mr. Macklin and his latest counsel to reset all of the litigation at the close of discovery for 

claims which Mr. Macklin and Mr. Frumkin testified that they were well aware of more than 20 months 

earlier is an abuse of the judicial process. As is clear from this courts decision on the motion to dismiss the 

FAC, leave was not given to file a second amended complaint due to the abusive and unclear pleading 

practices of Mr. Macklin and his counsel. The requirement for filing a motion for leave to amended, with a 

copy of any proposed second amended complaint, afforded the court with a minimally intrusive opportunity 

to insure that the pleading practices and deficiencies from the original Complaint and FAC would not be 

repeated wasting judicial resources and putting the Defendant to unreasonable and repeated duplicate 

pleadings. Mr. MackIln and his counsel chose not to take up the court on the opportunity to timely and 

reasonably seek leave to file a second amended complaint. 

The court denies the motion to file the Proposed Second Amended Complaint at this late date. 

THE PROPOSED SECOND AMENDED COMPLAINT FAILS TO STATE PLAUSIBLE CLAIMS 

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The court has also considered the merits of the motion, and denies it for each of the following separate and 

independent grounds. 

Truth in Lending Act Violations 

Failure To Verify Income 

The Plaintiff seeks to amend his cause of action by adding a second count under TILA for failure to verify 

his income. The court finds no requirement under the applicable statute (15 U.S.C. § 1602) or regulation 

(Regulation Z, 12 C.F.R. § 226.32) to verify income in this transaction. 

The Plaintiff in his Points and Authorities asserts a violation of 12 C.F.R. § 226.32(e)(1). The court is unable 

to find this statute, finding § 226(d)(8)(iii) as the final text in § 226.32. FN.1. Since the Plaintiff has cited 

Reg. Z, 12 C.F.R. § 226.34 to support an income verification requirement and 15 U.S.C. § 1641(e)(1)to 

support assignee liability, the court has reviewed the issue in this light. 

Subsection (a) of 12 C.F.R. § 226.34 cites meeting the requirements of § 226.32 as a condition precedent 

to the application of § 226.34. The Plaintiff has not plead that this transaction meets those requirements. 

Exhibit B, attached to the motion, is a copy of the Note that shows a 6.125% interest rate. Dckt. 290, Ex. B. 

Section 226.32(a)(1 )(l) applies only to loans that are more than eight (8) percent above the current G 

Treasury rate for a similar term. Subsection (ii) indicates it would apply to loans where more than eight (8) 

percent was spent on points and fees. Section 226.32(a)(2)(I) indicates it does not apply to a residential 

mortgage transaction. The court finds that a 6.125% interest rate cannot be more than eight percent above 

a Treasury rate, even if that rate was zero. The Plaintiff has not plead that he has met this condition 

precedent. 

The court finds the condition precedent was not met, hence the lender had no requirement to verify income 

under TILA for this transaction, thus no TILA violation. 

FN.1. The court reviewed 12 C.F.R. § 226.23 [presuming a typographic error] which discusses the right to 

rescind. However, subsection (e) refers to the Consumers waiver of the right to rescind, which clearly is not 

Plaintiff intention. 

Assignee Liability For Failure To Verify Income 

The plaintiff argues that liability for TILA violations at signing extend to Deutsche Bank National Trust 

Company as an assignee of the deed of trust. To be liable for TILA violations as an assignee, the TILA 

violation must be apparent on the face of the disclosure statement from the assignor. 15 U.S.C. § 

1641 (e)(1 )(A). 

To support that the violation was plain on its face, the Plaintiff cites Reg. Z, 15 U.S.C. 226.34(a)(4)(ii)(A) 

requiring the lender to verify income or assets relied upon to determine the borrowers ability to repay by 

using IRS forms or other reasonably reliable documents. To support a TILA violation, the lack of income 

documentation as described by this statute must make it apparent to a purchaser of the note that a violation 

existed at inception. The Plaintiff does not allege the disclosure statement would make it apparent that a 

violation existed at inception to a later purchaser of the note. 

As discussed above, the court does not find a TILA violation linked to income verification. Assuming H 

arguendo there is an income verification requirement, the court finds the Plaintiff has not plead how a 

person purchasing the note would realize there was a failure to verify income from the documents 

accompanying the note. The Plaintiff alleges that his production of the documents would make it apparent if 

someone researched the materials supporting the disclosure statement. Requiring research to validate the 

disclosure statement against underlying documentation does not make a violation plain on its face. 

Presumably there would be an assertion in the contract language that such had been checked. As such, 

Deutsche Bank National Trust Company would have a fraud action against the seller, but unlikely that 

assignee liability would arise. The court finds in the alternative that the falsified income contained within the 

disclosure statement would not appear plain on its faceto a future purchaser. 

Plaintiffs Right To Litigate His Rescission Under 11 U.S.C. § 1635 

The Plaintiff argues that under 11 U.S.C. § 1635, the Plaintiff has an absolute right to rescind for TILA 

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violations. Plaintiff asserts only notice to the lender is required to effect rescission. The court finds the 

Plaintiff was entitled send a notice of his intent to rescind, however, the court finds the time to litigate the 

validity of the rescission has passed. 

The Plaintiff cites extensively the Consumer Financial Protection Bureaus (CFPB) Amicus Curae brief filed 

in Rosenfield v. HSBC Bank, USA, et al. Case No. 10-1442, (10th Cir. 2012). The CFPB has been granted 

the authority to interpret and promulgate TILA rules as of July 21, 2011. See 12 U.S.C. §5581(b)(1),(d). In 

the cited brief, the CFPBs interpretation of the regulation is that a Debtor must provide notice of an intent to 

rescind within the three year period. 

The CFPB Amicus brief states in several places that as part of the rescission, the consumer must offer to 

tender the loan principal. The CFPB interprets the statute to mean that notifying the lender either effects the 

rescission as a matter of law (because the consumer had the right to rescind and properly exercised it), or 

does nothing (because the consumer did not have the right to rescind or improperly exercised it). 

Subsequent judicial proceedings are for the purpose of confirming and enforcing the rescission. Peterson v. 

Highland Music, Inc., 140 F.3d 1313, 1322 (9th Cir. 1998). 

The requirement to return the loan principal is further supported by the Bureaus citing of Griggs v. E.I. 

DuPont de Nemours & Co., 385 F.3d 440, 445-56 (4th Cir. 2004), Rescission itself is effected when the 

plaintiff gives notice to the defendant that the transaction has been avoided and tenders to the defendant 

the benefits received by the plaintiff under the contract. CFPB, Amicus Curae Brief, at 15 (Emph. added). 

Assuming a proper rescission notice was sent, the CFPB Amicus brief states that once the notice is sent, 

the lender has two options. Either the lender will unwind the transaction as contemplated by 15 U.S.C. § 

1635(b) or if the lender contests the rescission, litigation will ensue: either the lender will refuse to unwind 

the transaction (and the consumer will sue), or the consumer will stop paying (and the bank will sue or 

attempt to foreclose). Challenges to the validity of the rescission will be litigated at that time. CFPB, Amicus 

Curae Brief, at 23-24. 

The CFPB brief states the fact that § 1635 does not expressly limit the time period for litigation does not 

mean no limit exists. Some courts have concluded that TILAs general one-year statute of limitations, 15 

U.S.C. § 1640, permits consumers to bring suit to compel compliance with their rescission within one year 

of the lenders refusal to unwind the transaction after receiving the notice of rescission. CFPB, Amicus 

Curae Brief, at 24, FN. 4. The Ninth Circuit ruling in Miguel v. Country Funding Corporation, 309 F.3d 1161, 

1165 (9th Cir. 2002), holds that 15 U.S.C. § 1640(e) provided the borrower one year from the refusal of 

cancellation to file a suit. M 

The court follows the controlling Ninth Circuit precedent finding the one-year statute of limitations began 

when the lender made clear its intention not to unwind the transaction in the March 31, 2009 letter from 

Roup & Associates. FN.2. 

FN.2. The court finds that even if the one year statute of limitations did not begin until the actual foreclosure 

sale on December 14, 2009, the statute of limitations had run prior to the filing of this suit. 

I J I 

In the alternative, the court finds that the Plaintiffs Notice of Rescission was not a proper notice of 

rescission because it did not offer to tender the loan principal. 12 C.F.R. §§ 1026.15(d)(3), 1026.23(d)(3). 

As such, the Plaintiffs right to assert TILA violations would have expired at the later of 3 years or sale of the 

property, which occurred on December 19, 2009. 

Table Funded Loan Presumed Predatory 

In the Points and Authorities, the Plaintiff makes reference to the loan as a table-funded loan. However, 

there are no allegations in the complaint regarding the table-funded nature of the loan. The Plaintiff fails to 

link why table-funded loans create a liability for Deutsche Bank National Trust Company. The Plaintiff cites 

an advisory letter from the Office of the Comptroller of the Currency (0CC), asserting it holds that 

table-funded loans are presumed predatory. The court does not find the letter to hold that such loans are 

per se predatory. The 0CC letter defines table funded loans as loans that are brought to the table by a El 

broker and funded and immediately acquired by the lender. Here the loan was brought to the table by 

Accredited Home Loans, Inc., who acquired the note and according to the complaint, retained the loan until 

just prior to foreclosure in December 2009. The court finds that a three year retention period fails to meet 

the immediacy element of a table-funded loan. 

The defendant in this case, Deutsche Bank National Trust Company is not acting as a bank in this 

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environment and is acting solely as the Trustee for the pool of mortgages. 

The court does not find a cause of action relevant to this argument. The court finds the Plaintiff has failed to 

plead sufficiently for the court to hold the loan to be per se predatory. 

Amendment to Add California Business & Professions Code §§ 17200 et seq. Claim 

The Plaintiff has reiterated his claim under California Business & Professions Code § 17200 et seq. The 

Points and Authorities seek to amend the complaint to plead a violation of Californias Unfair Competition_______ 

Law (UCL) under the unlawful prong based on the TILA violations. 

The Plaintiff has alleged two different basis for his TILA violations, failure to verify income and failure to 

rescind following notification. The court has addressed both of these issues above and found no support for 

the alleged TILA violations. Since no violation was found, the Plaintiffs pleading of unlawful acts fails to 

support the motion to amend the UCL cause of action. 

In the alternative, the court finds that Plaintiff has failed to plead sufficiently Deutsche Bank National Trust 

Company liability since it was not a party to any of stated TILA violations. 

Failure To Form A Contract 

The Contemplated Contract Was Never Formed 

The Plaintiff asserts that he attempted to enter into a contract with Accredited Home Loans, Inc. Plaintiff 

asserts reliance upon representations by Accredited Home Loans, Inc. that they were a bona fide lender 

capitalized sufficiently to lend funds in a consumer finance transaction memorialized by a trust deed and 

note. Plaintiff states that since the wire transfer into escrow arrived from a different source, the money was 

not advanced by Accredited Home Loans, Inc. Thus no contract was formed between the Plaintiff and 

Accredited Home Loans, Inc. FN.3. The court views this transaction as follows: 

Borrower wants to borrow ten dollars, he asks Lender who agrees and they enter a contract. When it 

comes time to perform by delivering the money, Lender contracts with Funding Source to provide the 

money for Lender to make the loan to Borrower. Nothing in the entirety of common law contract prohibits a 

party from contracting with another to fulfill a obligation. In fact, we often refer to those people as 

sub-contractors. M 

FN.3. The essential elements of a contract are: (1) Parties capable of contracting; (2) Their consent; (3) A 

lawful object; (4) A sufficient cause or consideration. 1 Witkin, Summary of California Law 10th, Contracts, 

§ 3 (2012); Calif. Civil Code § 1550. If consent is not freely given to the contract, for example due to fraud, 

the contract is not absolutely void, but may be rescinded by the parties. Calif. Civ. Code § 1566. 

Plaintiff asserts that he relied upon these disclosures that the loan was from Accredited Home Loans, Inc. 

Assuming the plaintiffs belief that a transfer from a bank into escrow meant the loan was not funded by 

Accredited Home Loans, the plaintiff has failed to allege how that such reliance was detrimental. The 

transaction was consummated by Accredited Home Loans, and the note and deed of trust were issued to 

Accredited Home Loans. 

Furthermore, even if Plaintiff were to plead that his consent was not freely given to the contract, California 

Civil Code § 1556, holds the contract is not void. Instead, the contract must be rescinded under the rules 

addressing proper rescission. 

The Inclusion of MERS Means The Wrong Parties Were Named In Escrow 

The Plaintiff argues that identifying MERS as the beneficiary in the Deed of Trust violates the escrow 

instructions to record a deed of trust in favor of Accredited Home Loans, Inc. The Deed of Trust contains a 

common paragraph identifying MERS as the nominee of the Lender (Accredited Home Loans, Inc.) and 

Lender's successors and assigns. MERS is then identified as the beneficiary" under the Deed of Trust. 

The beneficiary is identified on page 2 of the Deed of Trust, as the nominee of the Lender and Lender's 

successors and assigns. 

The Deed of Trust secures the repayment of the Note to Lender and Plaintiffs performance under the Deed 

of Trust and Note. Page 3 of the Deed of Trust continues to state that Borrower understands and agrees 

that MERS holds only legal title to the interests granted to the Lender, but MERS, as the nominee for the 

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Lender and Lenders successors and assigns, may exercise the interests of the lender and take any action 

of Lender. 

Courts have widely found that MERS may act as an agent for the owner of a note secured by the deed of 

trust, including assigning the beneficial interest in the deed of trust. See Baisa v. Indymac Fed. Bank, No 

CIV-09-1464 WBS JMR, 2009 WL 3756682, *3 (E.D. Cal. Nov. 6, 2009) ("MERS had the right to assign its 

beneficial interest to a third party"); Weingartner v. Chase Home Finance, LLC, 702 F. Supp. 2d 1276, 1280 

(D. Nev. 2010) ("Courts often hold that MERS does not have standing as a beneficiary because it is not 

one, regardless of what a deed of trust says, but that it does have standing as an agent of the beneficiary 

where it is the nominee of the lender (who is the 'true' beneficiary)." (emphasis added)); Taasan v. Family 

Lending Services, Inc., No. Al 32339, 2012 WL 2774967 (July 10, 2012) (MERS as nominee beneficiary 

holds only the right to title, not to the underlying note, but may assign that right to others, enabling 

foreclosure by other entities). 

Additionally, this argument misses the mark because the focus has to remain on who owns or has the right 

to enforce the Note. The security, irrespective of what the Deed of Trust originally states, will follow the 

Note. Here, Accredited Home Loans, Inc. is the holder of the bearer paper, the Note. 

MERS Standing As Nominee 

As discussed above, the legal limits of the nominee beneficiary role of MERS was clearly acknowledged 

and agreed to on page 3 of the deed of trust. The security follows the note. The borrower acknowledged 

the right of MERS to foreclose by placing his initials on the page and signing at the bottom of the Deed of 

Trust. 

Plaintiff argues that he was never the principal over MERS, and as such, he cannot grant MERS any 

agency relationship with alleged principal Accredited Home Loans, as written in the deed. This confuses 

the concept of agency law. MERS would be the agent of the lender, Accredited Home Loans, Inc. A person 

may enter a contract with an agent acting on behalf of another, which may grant the agent certain powers. 

The ability of a lender to insert an agent between the borrower and the lender is not a right that can be 

granted by a borrower. Its an action that can be taken by either party. Conceivably, if the borrower had 

sufficient negotiation power, the borrower could have placed an agent between himself and the lender. The 

principal/agent relationship between Accredited Home Loans, Inc. and MERS, Inc. is not a relationship the 

borrower has any say in. 

By signing the deed of trust, the borrower acknowledged that under the terms the lender was willing to 

offer, MERS would be the nominee beneficiary and have these powers. 

MERS Not A True Beneficiary And Could Not Assign Anything 

As discussed above, the legal limits of the nominee beneficiary role of MERS was clearly acknowledged 

and agreed to on page 3 of the deed of trust. The security follows the note. The borrower acknowledged 

the right of MERS to foreclose by placing his initials on the page and signing at the bottom of the Deed of 

Trust. 

Next, Plaintiff argues that the parent of AHL, Accredited Home Loans Holding Company, filed Chapter 11 El 

and that the agency relationship between AHL and MERS was extinguished at that time. However, Plaintiff 

fails to state any legal authority on which to base this claim. 

Plaintiff then argues that there are two undated allonges, used a alleged endorsements of the note, which 

Defendant contends are executed by them for the purpose of facilitating an endorsement. Plaintiff argues 

that these carry no evidentiary weight and support the fact that MERS never transferred any interest in the 

debt and never held the note. Again, the MERS argument has been addressed in the prior ruling, and 

Debtor has not brought any new legally supported contentions against the present Defendant, Deutsche 

Bank National Trust Company. 

Deutsche Bank National Trust Company Does Not Hold Any Interest In The Loan Obligation. 

Plaintiff argues that all the contracts involved including the alleged consummation of Plaintiffs loan and its 

alleged transfer into the AMLT 2006-2 Trust should be taken together under the step transaction doctrine. 

Plaintiff argues that the doctrine is met here because the plaintiff signing the note and trust deed as 

contracts and taking a loan was essential to the end result. 

As a result, Plaintiff argues that the step doctrine requires all associated contracts be considered as one. 

Thus, a separate contract between the Trust and a servicer is only effective because of Plaintiffs execution 

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of the loan documents. The specific language in the trust contract with the servicer indicates a servicer is 

obligated to fund advances to the trust for accounts that are delinquent. The Plaintiff argues the Servicers 

obligation to advance funds against a delinquent account means he cannot be delinquent because his 

obligation to the trust is being paid by a guarantor. I n I 

As requested by the Court, this analysis fails to address how these payments eliminate his obligation. The 

Plaintiff does not plead that the Servicer is obligated to provide advances for delinquent payees for the 

entire term of the trust. The court finds it illogical that an advance would be something that would be 

unrecoverable by the Servicer. Were it unrecoverable, it would not be an advance but instead would simply 

be a payment of the debt owed by the mortgagor. 

Even if the payments were permanent and were to continue until the end of the trust, the Plaintiff has not 

plead how the principal of subrogation would not apply leaving the Plaintiff obligated to pay the servicer for 

their pre-payment of his delinquency. 

The Plaintiff pleads that Deutsche Bank National Trust Company is required to maintain a detailed 

accounting on a loan-by-loan basis, but cites language in the Trust document indicating it is the obligation 

of the Servicer to maintain those documents. Plaintiff has not plead how this contractual obligation of one 

party is transmuted to the other, regardless of if all of the contracts must be considered terms in one giant 

contract. 

Plaintiff fails to state how this imputes liability onto Defendant Deutsche Bank National Trust Company. 

Addressing Issues From Prior Ruling 

Distinguishing Cervantes v. Countrywide Home Loans 

Lastly, Plaintiff attempts to distinguish Cervantes v. Countrywide Home Loans, Inc. 656 F.3d 1034 (9th Cir. 

2011) by arguing that Plaintiff has not named or alleged fraud against MERS, as in Cervantes. Plaintiff 

asserts that any involvement by MERS is simply void. Plaintiff also states that he denies that MERS has 

any agency relationship and MERS failed to assign an interest in debt on behalf of the lender Accredited 

Home Loans, Inc. Plaintiff also asserts the pleadings in Cervantes were grossly insufficient as they failed to 

object to the use of a nominee coupled with an unsubstantiated agency relationship. Plaintiff then 

concludes that Defendant has no evidence of the assignment of the deed, together with the note with the 

required consideration, acceptance and accounting showing a valid transaction. 

Basically Plaintiff attempts to distinguish Cervantes by stating that they are not naming or alleging fraud 

against MERS, but rather Deutsche Bank National Trust Company. This does not address the legal 

principals and 9th Circuit law stated in Cervantes, including the conclusion that even if MERS were a sham 

beneficiary, the lenders would still be entitled to repayment of the loans and would be the proper parties to 

initiate foreclosure after the plaintiffs defaulted on their loans. Cervantes at 1044. 

MackIm's argument would essentially eviscerate the Commercial Code and the concept of negotiable 

instruments. Division 3 of the California Commercial Code establishes a comprehensive body of law 

addressing instruments and negotiable instruments (such as a promissory Note), the negotiation of such 

instruments, and the rights of persons acquiring instruments. Division 3 is substantially the same as Article 

3 of the Commercial Codes enacted in other states. By his argument, Macklin attempts to rewrite 

commercial law, Division 3 of the Commercial Code, and alter the Note he executed and delivered to obtain 

the loan monies he desired. The fact that the Note is purchased by entities which sell securities does not 

alter the Note. Thus, MackIm's contention does not have merit. 

Unaddressed Issues 

In denying any automatic right to file a second amended complaint, the court addressed the pleading 

deficiencies and outlined the process for Plaintiff to file a motion for leave to file a second amended 

complaint. Those issues were listed above. The Plaintiffs motion has not adequately addressed: 

Established California law that the deed of trust always follows the note; 

California Commercial Code provisions governing the negotiation, enforceability, and enforcement of 

notes; 

That forfeiture of property rights is not favored; 

Memorandum Opinion and Decision, pg. 47:13-28,48, 49:1-5. 

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The Plaintiff has argued extensively about defects in the deed of trust, but has failed to address established 

California law that the deed of trust follows the note. The sole mention is that a nominee cannot assign a 

note, but does not address the issue related to rights granted to MERS by virtue of the deed of trust. 

No discussion was presented regarding the California Commercial Code and its applicability to the facts. 

No discussion about the disfavor of forfeiture of property rights under California law. 

CONCLUSION 

Furthermore, the plaintiff has not addressed the minimum requirements for granting leave in its ruling on 

February 16, 2012. 

First, the Plaintiff consciously and with the assistance of at least two attorneys elected not to file a motion 

for leave to file a second amended complaint for 20 months. At the close of discovery, the Plaintiff, with his 

fourth and newly hired attorney, comes in to file a second amended complaint to assert retreaded claims 

which were earlier dismissed. The Plaintiff offers no credible or good faith reasons why these known 

claims, to the extent that actually exist, were not acted on earlier. This is a situation where the Plaintiff has 

engaged in undue delay, bad faith in failing for 20 months to assert the claims and waiting to do so until the 

close of discovery, failure to cure the deficiencies with the FAC or take advantage of seeking leave from the 

court to file a second amended complaint, and will cause undue prejudice on the Defendant by either 

prosecuting new claims after discovery has closed or unreasonably protract the case by forcing the court to 

reopen discovery. 

Second, Plaintiff ignored the courts direction that each cause of action not incorporate all of the prior 

paragraphs of the complaint by reference so that the court and other parties would be able to clearly 

understand the short and plain statement of the claim showing that the pleader is entitled to relief. This 

pleading style adopted by the Plaintiff results in an abusive pleading which creates unnecessary and 

unreasonable burden on the court and Defendant to determine what allegations actually relate to a cause 

of action and which are merely swept up in a I dont know what applies but Ill just say everything pleading 

strategy. The court specifically stated that the complaint should clearly state the relevant alleged grounds 

upon which each cause of action is based as required by the Federal Rules of Civil Procedure and the 

Federal Rules of Bankruptcy Procedure. The Proposed Second Amended Complaint fails to do this. 

Third, as discussed above, Plaintiff has merely re-alleged causes of actions from his FAC, which the court 

had previously dismissed as having no merit. The court warned Plaintiff that the complaint amendment 

process is not one in which repeated, unsupported contentions are made with impunity. Plaintiff further 

failed to properly distinguish Cervantes, as required by the court. Simply stating that MERS is not a proper 

party to the present action does not distinguish the legal principals and allow this court to ignore current 9th 

circuit law. 

Lastly, Plaintiff has failed to explain to the court how payments made by insurance companies, loan 

servicers, or others pursuant to a separate agreement not including Mackiln provide for the payment of 

Macklins obligations under the Note and why the principles of subrogation do not apply. 

As Plaintiff has not timely brought this motion, failed to address the minimum requirements stated by this 

court, and attempted to raise issues already determined by this court to be without merit, the Motion for 

Leave to Amend Complaint is denied. 

ADDENDUM A 

Case 11-02024 Filed 04/08/15 Doc 423
Instructions to Clerk of Court 

Service List - Not Part of Order/Judgment 

The Clerk of Court is instructed to send the Order/Judgment or other court generated 

document transmitted herewith to the parties below. The Clerk of Court will send the Order via 

the BNC or, if checked , via the U.S. mail. 

Debtor(s), Attorney for the Debtor(s), Bankruptcy Trustee (if appointed in the case), 

and XX Other Persons Specified Below: 

Office of the U.S. Trustee 

Robert T. Matsui United States Courthouse 

5011 Street, Room 7-500 

Sacramento, CA 95814 

Gregory J. Hughes 

3017 Douglas Blvd., #300 

Roseville, CA 95661 

Thomas A. Aceituno 

Chapter 7 Trustee 

2795 E. Bidwell Street, Ste. 100 4321 

Folsom, CA 95630 

James L. Macklin 

P.O. Box 789 

Crystal Bay, NV 89402 

Charles T. Marshall 

415 Laurel Street, #405 

San Diego, CA 92101 

Robert A. Bleicher 

216 Park Road 

P.O. Box 513 

Burlingame, CA 94001 

John C. Crawford 

216 Park Road 

P.O. Box 513 

Burlingame, CA 94001 

Case 11-02024 Filed 04/08/15 Doc 423