Source: https://www.scribd.com/document/61265492/2560-2nd-Adversary-Complaint
Timestamp: 2017-01-21 05:24:53
Document Index: 723828484

Matched Legal Cases: ['§ 1334', '§ 506', '§1123', '§157', '§ 2201', '§ 1367', '§ 1601', '§ 226', '§ 1408', '§ 341', '§ 544', '§ 33', '§33', '§ 544', '§ 33', '§ 544', '§ 362', '§ 549', '§ 33', '§ 544', '§ 1107', '§ 544', '§ 544', '§ 33', '§1692', '§ 1601', '§2605']

2560 2nd Adversary Complaint | Plaintiff | Defendant
BrowseInterestsBiography & MemoirBusiness & LeadershipFiction & LiteraturePolitics & EconomyHealth & WellnessSociety & CultureHappiness & Self-HelpMystery, Thriller & CrimeHistoryYoung AdultBrowse byBooksAudiobooksArticlesSheet MusicBrowse allUploadSign inJoin1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Plaintiff’s Complaint is supported by the record in lead case # 2:09-bk-06979-PHX-RTBP, by the record in adversary proceeding case#: 2:09−ap−01728−SSC, Exhibits “A” through “E”, and the Declaration of Neil Franklin Garfield MBA JD (filed as Exhibit “C”, 2:09−ap−01728−RTBP Doc #7 on January 19, 2010), all of which are incorporated herein by this reference. IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF ARIZONA ANDREW C. BAILEY Plaintiff vs
THE BANK OF NEW YORK MELLON, F/K/A THE BANK OF NEW YORK AS TRUSTEE FOR CWALT, INC. ALTERNATIVE LOAN TRUST 2007- HY4 MORTGAGE PASSTHROUGH CERTIFICATES, SERIES 2007HY4; BAC HOME LOANS SERVICING LP
ANDREW C. BAILEY 2560 N. Page Springs Rd Cornville, AZ 86325 928 634-4335 Self-Represented Litigant
Chapter 11 BK Case #: 2:09-bk-06979-PHX-RTBP [AP Case #: 2:11-ap-00847-RJH]
F/K/A COUNTRYWIDE HOME LOANS; COUNTRYWIDE HOME LOANS; COUNTRYWIDE BANK FSB; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC; KYLE S. HIRSCH, ESQ, OF LAW FIRM BRYAN CAVE LLP; and JOHN DOES "1 10" inclusive, Defendants
DEBTOR ANDREW C. BAILEY'S ADVERSARY COMPLAINT FOR DECLARATORY RELIEF
CHAPTER 11 ADVERSARY PROCEEDING
Plaintiff Andrew C. Bailey sues Defendants and all of them individually and severally and alleges as follows:
I. INTRODUCTION 1. Plaintiff's first Adversary Complaint Case No. 2:09−ap−01728−SSC was dismissed without prejudice on May 3, 2011. The Court declared: "The fact that no assignment has been produced to the Court at this time does not vitiate BNY Mellon’s loan or its security interest in the Plaintiff’s real property. This Court does not absolve the Plaintiff of his responsibility to pay the Loan in question. BNY Mellon’s failure to produce the assignment, however, does not allow this Court to dismiss this Complaint with prejudice and finally end the dispute between these parties. Therefore, the Court hereby dismisses this Adversary Proceeding without prejudice." 2. Further, the Court cautioned Plaintiff: "[n]ot to file another adversary proceeding against any of these Defendants until he has carefully reviewed the law, or retained counsel to assist him, and is able to [assert] a cognizable claim against a third party." 3. Plaintiff takes the Court's advice very seriously, has accordingly consulted with legal counsel, and now submits his second Adversary Complaint as set forth below. 4. For the time being, Plaintiff is compelled to continue acting in propria persona, for purely financial reasons. If Plaintiff had the resources to retain counsel, he would do so without delay. Plaintiff begs the Court's indulgence in this matter.
II. JURISDICTION AND VENUE 5. This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334; 11 U.S.C. § 506(a); 11 U.S.C. §1123(b)(5); and Rule 7001, et seq. Rules of Bankruptcy Procedure in that this proceeding arises under title 11 of the United States Code, arises in
and is related to the above-captioned Chapter 11 case under title 11, and concerns property of the Debtor in that case. 6. This is a core proceeding pursuant to 28 U.S.C. §§§157(b)(2)(A), 157(b)(2)(B), 157(b)(2)(K). 7. Objection to claim arises under Chapter 11 Title 11 of the Bankruptcy Code. 8. Declaratory Relief requested is a matter of Federal Law. 9. Diversity is complete: a. Defendants are residents of multiple states. b. Amount in controversy is in excess of $75,000. 10. Plaintiff’s action for declaratory relief is authorized by 28 U.S.C.§§ 2201, 2202. 11. As to the portions of this matter that are non-core proceedings, the Plaintiff consents to the entry of final order in this proceeding by the Bankruptcy Judge. (Fed. R. Bankr. P. 7008(a). 12. This Court has supplemental jurisdiction over the Plaintiff’s state law claims pursuant to 28 U.S.C. § 1367. 13. This Complaint is also filed under the Truth in Lending Act, 15 U.S.C. § 1601 (“Act”) to enforce the Plaintiff’s right to rescind a consumer credit transaction, to void the Defendants’ security interest in the Plaintiff’s home, and to recover statutory damages, reasonable attorney’s fees and costs by reason of the Defendant’s violations of the Act and Regulation Z, 12 C.F.R. § 226 (“Regulation Z”). 14. Venue is proper in this Court pursuant to 28 U.S.C. §§ 1408 and 1409. III. THE PARTIES 15. Andrew C. Bailey is a resident of Cornville, Arizona and currently resides at 2560 North Page Springs Road, Cornville, Arizona 86325. ("Property") 16. The Bank of New York Mellon (f/k/a The Bank of New York) (BNYM) is a New York Corporation with its principal place of business at 1 Wall Street, New York, NY 10286. BNY is not registered with the Arizona Secretary of State. 17. CWALT INC is a wholly owned subsidiary of Bank of America, N.A. and is not registered with the Arizona Secretary of State.
18. BAC Home Loans Servicing, LP (BAC) is a subsidiary of Bank of America, N.A., located at 4500 Park Granada, Calabasas CA 91302. 19. Mortgage Electronic Registration Systems, Inc (MERS) is an online mortgage registration and tracking service organized in the State of Delaware. MERS is not registered with the Arizona Secretary of State. 20. Countrywide Home Loans and Countrywide Bank FSB (CHL) are defunct corporations now owned by Bank of America, N.A. which has its principal place of business in North Carolina at 401 N. Tryon St, NC1-021-02-20 Charlotte NC 28255. 21. Kyle S. Hirsch, Esq. (#024155) (KSH) is an attorney in the employ of Bryan Cave LLP, a multi-state Law Firm with offices at Two North Central Avenue, Suite 2200, Phoenix, AZ 85004. 22. The true names and capacities, whether individual, corporate, associate, or otherwise, of Defendants DOES 1 through 10, inclusive, are unknown to Plaintiff, who therefore sues said Defendants by such fictitious names. Plaintiff is informed and believes, and on that basis alleges, that each of the Defendants designated herein as a DOE is responsible in some manner, way, form and to some extent for the events and occurrences referred to herein, and for the damages resulting to Plaintiff. At such times as Plaintiff learns the true name and capacity of any Defendant named as a DOE herein, Plaintiff will seek leave of court to amend his complaint to identify said Defendant, and to include accompanying charging allegations. 23. Plaintiff is informed and believes, and thereon alleges, that at all times mentioned and relevant herein, each and every Defendant, including said fictitiously named Defendants, was the principal, agent, master, servant, co-venturer, employer or employee of each and every other Defendant, and at all times relevant herein was acting in such capacity. Plaintiff further alleges that the acts performed by them as agents, principals, servants and employees were performed within the course and scope of their authority and employment. Each of the Defendants is in some way responsible for the damages sustained by Plaintiff. When the complaint references any act of any Defendant or Defendants, such
allegation shall be deemed to mean the act of those Defendants named in the particular cause of action and each of them acting, individually, jointly and severally. IV. BACKGROUND FACTS COMMON TO ALL CAUSES OF ACTION 24. Plaintiff Bailey is the lawful owner of the property located at 2560 N. Page Springs Road, Cornville, AZ 86325 (the “Property”). 25. On April 8th, 2009 three of Plaintiff's unsecured creditors filed an involuntary petition against the Plaintiff for relief under Chapter 7 of title 11 of the United States Code (the “Bankruptcy Code”). 26. On May 28th, 2009 (the “Petition Date”), this Court entered an order granting Plaintiff's motion to convert to Chapter11 thereby commencing the above-captioned case. 27. Plaintiff is operating his businesses and managing his properties as debtor-inpossession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. 28. Plaintiff has subsequently filed and revised all schedules and other necessary documents, and has satisfied all of the requirements of the Bankruptcy Court and the U.S. Trustee in the case to date. 29. The United States Trustee’s office conducted the initial creditors’ meeting pursuant to 11 U.S.C. § 341 on September 4, 2009. 30. Defendant BNYM has instituted a foreclosure proceeding to foreclose on a mortgage as to the Property which mortgage was originally issued in the name of Defendant CHL. 31. CHL was named as the originating “lender” on the Note. BNYM's action seeks to foreclose on the same Property which is the subject of the mortgage and foreclosure action originally issued by Defendant CHL and is the same Property which is the subject of a Proof of Claim filed by Defendant BAC.
32. This Complaint is timely filed in accordance with applicable law to challenge the foreclosure prior to any Trustee Sale or the issuance of any Certificate of Title following sale. 33. On or about September 2, 2005, Plaintiff and his partner Constance Baxter Marlow purchased the Property as evidenced by Warranty Deed B-4306 P-964, Instrument # WD 3908870 recorded at the Yavapai County Recorder's office. 34. In or about November 2006, Plaintiff received an unsolicited telephone call from a salesman for CHL, at that time one of the largest loan originators in the country. The salesman stated that CHL would "beat" Plaintiff's current mortgage terms. 35. On or around March 29, 2007, CHL filed a first deed of trust and executed a loan and promissory note, (hereinafter, collectively, “Loan”) upon Plaintiff’s Property (See Exhibit “A”) Plaintiff executed said note and deed of trust on or about March 29, 2007, and has since occupied and currently occupies subject Property as his primary residence. 36. On September 23, 2008, a Notice of Trustee's Sale was filed with the Yavapai County Recorder’s Office as Instrument # 4265284. (See Exhibit “B”) 37. On or about September 30, 2008, a Statement of Breach or Non-Performance and Election to Sell dated September 26, 2008 was received by Plaintiff. (See Exhibit “C”). The Statement confusingly named CHL as the beneficiary, whereas the Deed of Trust named MERS as the beneficiary, and the Notice of Trustee's Sale named BNYM as the beneficiary. 38. The court should note that the Notice of Trustee's Sale was recorded before the Statement of Breach was issued. 39. It is clear from the foregoing that the Plaintiff's loan was in (alleged) default as of September 26, 2008. 40. It is equally clear that the Deed of Trust was not assigned to BNYM before Plaintiff's Chapter 11 Bankruptcy was commenced on May 28, 2009. In fact, as of the date of this writing, the Deed of Trust has never been assigned to BNYM.
41. Plaintiff is informed believes and thereon alleges that CHL (the Loan Seller) was
not in fact the lender in this transaction, but was paid a fee to pose as a residential mortgage lender. In fact the source of loan funds, and thus the actual lender(s) are the underwriter (Mortgage Aggregator and Investment Banker) and the Investor(s) in Certificates secured by the Loan and other similar instruments (collectively “Lender”). These are other parties whose identities, and the nature and amount of fees they paid to the Loan Seller were withheld from Plaintiff at the closing of the "Loan". Despite numerous requests they have been withheld from Plaintiff by the Defendants contrary to the requirements of Federal Law and applicable State Law. 42. On December 23, 2010 Plaintiff filed adversary proceeding No: 2:09−ap−01728−RTBP against Defendants in the Bankruptcy Court for the District of Arizona. 43. 2:09−ap−01728−RTBP was re-assigned to Judge Curley when Judge Baum recused himself with respect to any action concerning Defendant BNYM. 44. As set forth above, 2:09−ap−01728−SSC was dismissed without prejudice on May 3, 2011. 45.Plaintiff is informed and believes that the wrongful acts of Defendants include violations of federal and state law after the initiation of the Loan as well as during and after the servicing period of the "loan". Additionally, a. Defendant BNYM was never assigned the Deed of Trust. b. Title was not duly perfected. c. Notwithstanding the foregoing, Defendants filed a proof of claim and motions for relief from the automatic stay, knowing that they had no right or authority to do so, and that they had failed to establish a prima facie case as required by the court. d. Apparently, Defendants hoped that the Court would not notice the latter fact. 46. As a proximate result of Defendants' conduct as herein alleged, Plaintiff
sustained damages, including monetary loss, medical expenses, emotional distress, loss of employment, loss of credit, loss of opportunities, and the damages to be determined at trial. As a proximate result of Defendants' breach of duty and all the actions as alleged herein, Plaintiff has suffered severe emotional distress, mental anguish, harm, humiliation, embarrassment, and mental and physical pain and anguish, all to Plaintiff's damage in an amount to be established at trial. 47. Plaintiff's damages include but are not limited to excessive fees, charges, penalties and interest. 48. Each Defendant herein is responsible for the acts of the Defendants and their predecessors based on the doctrine of respondeat superior. Further, each Defendant herein is responsible for the acts of the Defendants because each Defendant negligently supervised the Defendants and is thus therefore directly responsible for the acts of the Defendants. 49. All Defendants are agents, employees and the fiduciaries of each other as set forth within. Each of the wrongful acts by Defendants against Plaintiff set forth within was done in the scope of employment. Defendants were acting as agents and employees and in the transaction of the business of the employment or agency when performing their wrongful actions. Defendants are thus directly, jointly and severally liable to Plaintiff for the actions of Lender, Servicer, the employees of said parties, and all the Defendants as set forth within. 50. The aforementioned conduct of Defendants wa an intentional misrepresentation, deceit, or concealment of material facts known to Defendants with the intention on the part of Defendants to deprive Plaintiff of property or legal rights or otherwise causing injury, and was despicable conduct that subjected Plaintiff to cruel and unjust hardship in conscious disregard of Plaintiff’s rights, so as to justify an award of exemplary and punitive damages, as well as attorney fees and costs, if any.
1ST CAUSE OF ACTION ACTION TO AVOID LIEN PURSUANT TO 11 U.S.C. § 544(a)(3), A.R.S. § 33-818 (ALL DEFENDANTS EXCEPT KSH)
51. Plaintiff incorporates by this reference each and every allegation contained in all foregoing paragraphs, as though set forth in full herein. 52. In its May 3, 2011 Memorandum Decision dismissing Plaintiff's previous adversary complaint, the Court declared: "[H]owever, ARS §33-818 poses a potential problem. It states, in pertinent part:
Given that the Arizona legislature has not rescinded Section 33-818, it must be interpreted in a manner that allows it to be consistent with other statutory provisions without reducing the Section to surplusage. An Arizona appellate court, in reviewing the issues, stated that Arizona law requires that if a secured creditor with a lien on the borrower’s real property wishes to ensure that said interest is not subject to the claims of a bona fide purchaser, that secured creditor should record an assignment of its interest with the Recorder in the County in which the borrower’s real property is located. If notice of the assignment has not been provided, through recordation, the secured creditor may have its interest avoided by a bona fide purchaser. See Rodney v. Arizona Bank, 836 P.2d 434, 172 Ariz. 221 (Ariz. App. Div. 2 1992) (Unless and until the transferee of the beneficial interest in the deed of trust records an assignment of the deed of trust, the security interest in the real property remains unperfected.) Thus, under Arizona law, a potential subsequent bona fide purchaser for value may have a basis to set aside an assignment of real property that is not duly recorded. Because of the avoidance powers of the bankruptcy trustee or the debtor in
possession, this Court requires that if a party seeking relief from the automatic stay asserts a perfected security interest in any property of the estate, that moving party must be able to present at least a prima facie case that it has such a perfected security interest under applicable law. The fact that the transaction is not avoidable between the parties to the underlying loan transaction is not dispositive of whether the transaction may be avoided by third parties that are, for instance, bona fide purchasers. See 11 U.S.C. § 544(a)(3) (West 2010) " 53. On or about September 30, 2008 Plaintiff received a Statement of Breach or Non-Performance and Election to Sell dated September 26, 2008. (see Exhibit "C") 54. The Statement of Breach clearly illustrates Defendants' position that Plaintiff's loan was delinquent or in default as of September 26, 2008. 55. Plaintiff''s Chapter 11 bankruptcy proceeding was commenced on May 28, 2009 56. As set forth above, A.R.S. § 33-818 and 11 U.S.C. § 544(a)(3) require that, subsequent to any default and prior to the commencement of a Chapter 11 bankruptcy case, an assignment be prepared and properly recorded in the County in which the property is located, if the Defendant wishes to protect its interest in the Property. This Court has found and it is admitted and undisputed that Defendant did not execute and record any such assignment prior to the commencement of the above-captioned Chapter 11 proceeding on May 28, 2009. 57. The Deed of Trust cannot belatedly be assigned “post-date”. Execution and recording of an assignment of a deed of trust after the petition date is a violation of the automatic stay pursuant to 11 U.S.C. Section § 362(a)(4) and (5). A post-petition transfer or assignment of a deed of trust would be void pursuant to 11 U.S.C. § 549. 58. In light of the foregoing, it is indisputable that Defendant BNYM has failed to establish or maintain a continuously perfected security interest or acted to preserve its
alleged interest in the Property. 59. Given the status of the Plaintiff as Debtor In Possession, the Plaintiff may consequently avoid the lien which is the subject of this lawsuit pursuant to ARS § 33-818 and 11 U.S.C. § 544(a)(3). 60. Plaintiff, as debtor in possession of his Chapter 11 estate, may exercise the avoidance powers of a trustee under the Federal Bankruptcy Code. 11 U.S.C. § 1107(a) (1984). One avoidance power is the ability of the debtor in possession to avoid a lien he consensually granted prior to filing bankruptcy by assuming the rights of a hypothetical lien creditor and/or a bona fide purchaser of the collateral. The debtor in possession is cloaked with these powers as of the date bankruptcy is commenced, 11 U.S.C. § 544(a) (1984), which in this case was May 28, 2011. 61. It is clear that if, as here, notice of the assignment has not been provided, through recordation, the secured creditor may have its interest avoided by a bona fide purchaser. Plaintiff has the ability to proceed, as a Debtor in Possession, and set aside BNYM’s secured transaction. 62. Accordingly Plaintiff as Debtor in Possession hereby invokes the rights accorded him under 11 U.S.C. § 544(a) (1984) and A.R.S. § 33-818 and requests this Court to declare the subject lien avoided. 2ND CAUSE OF ACTION TO QUIET TITLE (ALL DEFENDANTS EXCEPT KSH)
63. Plaintiff incorporates by this reference each and every allegation contained in all foregoing paragraphs, as though set forth in full herein. 64. The basis of Plaintiff’s title is a Warranty Deed granting the Property in fee simple to plaintiff and plaintiff’s partner dated August 26, 2005 and recorded in the official
records of Yavapai County, Arizona at Book 4306 Page 964 (see Exhibit “D”) 65. Plaintiff and plaintiff’s partner Constance Baxter Marlow are the only parties with any interest in the property. Plaintiff and plaintiff’s partner are the sole owners of the Property. 66. There is slander of Plaintiff’s title and a cloud on Plaintiff’s title. Plaintiff is informed and believes and on such information and belief alleges that Defendants CHL, BAC, MERS and BNYM and CWALT claim or appear to claim an interest adverse to plaintiff in the Property as purported holders of a Deed of Trust against the subject property. A Deed of Trust was recorded on May 4, 2007 and recorded in the official records of Yavapai County, Arizona at Book #4504 Page 231 (see Exhibit “A”) Some of the other known and unknown defendants described as “DOES” may also claim interests in the Property adverse to plaintiff as assignees and successors of defendants. 67. Plaintiff is seeking to quiet title against the claims of defendants, the claims of successor defendants, the claims of all unknown defendants whether or not the claim or cloud is known to plaintiff and the unknown, uncertain or contingent claim, if any, of any defendant. The claims of defendants are without any right whatsoever and such defendants have no right, title, estate, lien or interest whatever in the Property or any part thereof. 68. Plaintiff requests that the court issue a declaratory judgment quieting title to the Property. 69. Plaintiff seeks to quiet title as of the date of this complaint.
3RD CAUSE OF ACTION ABUSE OF PROCESS (ALL DEFENDANTS) 70. Plaintiff incorporates by this reference each and every allegation contained in all foregoing paragraphs, as though set forth in full herein. 71. Defendants and their attorneys of record are guilty of abuse of process. Stated bluntly, they lied to the court. 72. Defendants and their attorneys of record stated and implied in their pleadings and during oral argument that Defendants had a valid duly perfected security interest when they knew or should have known that such was not the case. 73. Defendants did not then and do not now have a valid duly perfected security interest in Plaintiff's property, as affirmed by the Court in its May 3, 2011 ruling. 74. The foregoing deceit is a clear abuse of the United States Justice system. 75. The attorney has the duty of candor. Instead, he knowingly made false representations to the court and to the Plaintiff. 76. In Real Property law it is the duty of the attorney to "run" title. 77. In Real Property law it is the duty of the attorney to notify the court of any discrepancy, such as the absence of an assignment of a deed of trust, as here. 78. The abuse of process appears to be an example of procedural trickery, wherein Defendants and their attorneys of record expected that Plaintiff, who is acting pro se, and the Court, would fail to notice the discrepancy. 79. The abuse of process created months of extra work and emotional and physical stress for Plaintiff. 80. The foregoing abuse of process clearly establishes the issue of constructive fraud.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 4TH CAUSE OF ACTION FRAUD AND FRAUD UPON THE COURT (ALL DEFENDANTS) 81. Plaintiff incorporates by this reference each and every allegation contained in all foregoing paragraphs, as though set forth in full herein. 82. This Court has conclusively established that as of May 3, 2011 BNYM has never had and does not now have a perfected security interest in the Property. 83. Defendants and their various attorneys of record knew or should have known ab initio that BNYM does not have a perfected security interest in the Property. 84. On information and belief, the Court’s reliance upon the presumed Assignment of the Deed of Trust to BNYM (which has now been shown to be non-existent) was pivotal to the Court’s decision to lift the Automatic Stay. 85. On information and belief, the Court’s reliance upon the presumed Assignment of the Deed of Trust to BNYM (which has now been shown to be non-existent) was pivotal to the Court’s decision to dismiss Plaintiff’s earlier amended complaints. 86. Defendants' Attorney Kyle S. Hirsch (KSH) of Bryan Cave LLP knew or should have known that his clients lacked standing to initiate and maintain the foreclosure action. 87. There appears to be an ongoing attempt to commit fraud upon the Court through procedural trickery by Defendants KSH and Bryan Cave LLP and its clients. 88. The Court should consider an order to show cause for contempt and/or sanctions for the foregoing reasons. 89. Defendants CHL, MERS, BAC and BNYM defrauded or attempted to defraud the court by bringing foreclosure actions, creating, recording and filing false documents, concealing parties in interest who may be necessary and indispensable parties pursuant to FRCP Rule 19, and filing proof of claim based on misrepresentation, false documentation and faulty accounting.
90. On information and belief Defendants directly and through their counsel of record misrepresented themselves as beneficiaries or holders in due course knowing they were not such, including but not limited to: CHL on the March 29, 2007 “closing” documents, MERS in the September 26, 2008 notice of trustee’s sale, CHL in its September 26, 2008 foreclosure action, BAC on its proof of claim (#6-1 Filed 9/3/09 in 2:09-06979-RTBP), in BNYM’s November 12, 2009 foreclosure pleading (doc 82), in BNYM’s March 22, 2010 “response” to Plaintiff’s Interrogatories and Request for Production of Documents. (see Exhibit “E”) and in BNYM’s May 14, 2010 Renewed Motion for Stay Relief. 5TH CAUSE OF ACTION OBJECTION TO FRIVOLOUS PRIORITY CLAIM (ALL DEFENDANTS EXCEPT KSH)
91. Plaintiff incorporates by this reference each and every allegation contained in all foregoing paragraphs, as though set forth in full herein. 92. Plaintiff objects to the frivolous priority claim made by BAC on or about September 2, 2009. 93. On or about September 2, 2009, BAC Home Loans Serving, LP, by and through Dean Prober, Esq., of the California law firm Polk, Prober and Rafael as counsel for BAC Home Loans Servicing, LP filed a Proof of Claim stating: “At the time this case filed, the TOTAL SECURED CLAIM (Payoff Amount) was $486,401.44.” 94. The Payoff Amount appears to be inflated by approximately $30,000. 95. Attached to the Proof of Claim were copies of the Note, Deed of Trust, and Fixed/Adjustable Rate Rider to the Note. 96. The Proof of Claim asserts that the creditor is BNYM. As set forth above, BNYM
does not have a perfected security interest in the loan. 97. It is improper and frivolous to file a priority claim unless the interest of the parties has been duly perfected. 98. As such, BAC's priority claim should be voided.
6TH CAUSE OF ACTION DETERMINATION OF CREDITOR’S INTERESTS (ALL DEFENDANTS EXCEPT KSH) 99. Plaintiff incorporates by this reference each and every allegation contained in all foregoing paragraphs, as though set forth in full herein. 100. This is an action to determine value and status of a lienholder’s claim as wholly unsecured and to void the lien of mortgagee pursuant to 11U.S.C. 506(a) and F.R.B.P 3012. 101. Plaintiff requests that the Court determine and declare the value of any interest the Defendants may have in the Property. 102. Accordingly, Plaintiff requests that the Court determine the Defendants’ interests, if any, pursuant to 11U.S.C. 506(a) and F.R.B.P 3012.
7TH CAUSE OF ACTION DEMAND FOR ACCOUNTING (ALL DEFENDANTS EXCEPT KSH) 103. Plaintiff incorporates by this reference each and every allegation contained in all foregoing paragraphs, as though set forth in full herein. 104. Plaintiff demands a full accounting of all transactions relevant to his account, as set forth below. 105. Plaintiff has a right to such accounting, which has been withheld from him.
106. The May 3, 2011 ruling declares: "[H]owever, the Court did find that Plaintiff was entitled to certain information that might normally be provided to a borrower under the Fair Debt Collection Practices Act, 15 U.S.C. §1692 (West 2010), the Federal Truth-inLending Act, 15 U.S.C. §§ 1601-1665 (West 2010), and/or the Real Estate Settlement Procedures Act, 12 U.S.C. §2605 (West 2010)." 107. Defendants willfully failed to provide [Plaintiff] with complete and accurate information and accounting as required by federal and state law, in particular TILA, despite repeated requests including statutory letters under TILA, RESPA and the FDCPA as set forth in Plaintiff’s First Amended Complaint filed January 19, 2010 in case # 2:09−ap−01728−RTBP Doc #7. 108. Plaintiff is entitled to an order directing Defendants to render such accountings.
8TH CAUSE OF ACTION TORTIOUS INTERFERENCE WITH PLAINTIFF'S ECONOMIC ADVANTAGE (ALL DEFENDANTS) 109. Plaintiff incorporates by this reference each and every allegation contained in all foregoing paragraphs, as though set forth in full herein. 110. In committing the wrongful acts herein alleged, Defendants, and each of them, intentionally, maliciously, and tortiously interfered with Plaintiff's right and opportunity to conduct and build his businesses, including but not limited to the bed and breakfast/retreat center that uses the subject Property, where, aside from damage to Plaintiff and his coowner, four full-time jobs have been lost as a collateral result of the wrongful acts herein alleged.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 115. Plaintiff incorporates by this reference each and every allegation contained in all foregoing paragraphs, as though set forth in full herein. 116. On or about January 22, 2010 Plaintiff served his First Set of Interrogatories and First Request for Production of Documents on Defendants (doc # 15, 16) though 10TH CAUSE OF ACTION FAILURE TO COMPLY WITH DISCOVERY (ALL DEFENDANTS) 9TH CAUSE OF ACTION FDCPA VIOLATION (ALL DEFENDANTS) 111. Plaintiff incorporates by this reference each and every allegation contained in all foregoing paragraphs, as though set forth in full herein. 112. Defendant BNYM and its attorneys of record twice violated the Fair Debt Collection Practices Act by their complete failure to reply and provide information and accounting pursuant to their statutory duty to answer the FDCPA Special Notice and Consumer Disclosure request (notice and disclosure filed as doc # 82 in 2:09-bk-06979RTBP on November 12, 2009 page 6 of 6). 113. Plaintiff (the “borrower") timely disputed the “alleged obligation or judgment” and requested the statutorily requisite information and accounting within the 30-day period. The second request was served on December 10, 2009. 114. No response, documentation or accounting was ever forthcoming, in violation of the statute.
counsel of record Kyle S. Hirsch of law firm Bryan Cave LLP (KSH). 117. On or about March 22, 2010 Mr. Hirsch emailed to Plaintiff a cursory noncompliant “response” or consisting mostly of objections, refusals and claims of burdensomeness and confidentiality. (see Exhibit “E”) 118. Defendant’s attorney KSH did not file his “response” with the court, falsely claiming that filing of the Defendants' response was not required by the court. 119. On or about March 22, 2010 Mr. Hirsch filed notices of “Compliance with Discovery Request” as Docs #23 and #162 in the AP and BK tracks respectively. However, the “response” as emailed to Plaintiff shows little or no compliance and was highly improper, especially as the document was never placed in the record. (see Exhibit “E”) 120. Mr. Hirsch openly told Plaintiff after the hearing on March 24 2010, that he, Mr. Hirsch, personally prepared the "response". 121. On information and belief, Mr. Hirsch has no first hand personal knowledge, is not and never was an officer or employee of Defendant and is not a competent witness. Mr. Hirsch's testimony is mere hearsay and must not be considered or admitted as evidence. Rule 803. 122. Defendant BNYM’s “response” alleges it is the “holder in due course” but BNYM is not the holder in due course. Mere possession of the note does not make BNYM the holder in due course, unless its security interest has been duly perfected. BNYM relies entirely upon an alleged pooling and servicing agreement which does not say or even imply that BNYM is the holder in due course. Under UCC Article 3, the evidence presented is clearly insufficient. In In Re: U.S. Bank, N.A. v. Cook, 2009 WL 35286 (N.D. Ill. January 6, 2009) [a] review of the evidence submitted by U.S. Bank showed only that it was the alleged trustee of the securitization pool. U.S. Bank relied exclusively on the “pooling and serving agreement” to show that it was the holder of the note. Id. Under UCC Article 3, the
evidence presented in Cook was clearly insufficient. 123. As set forth above, BNYM was never assigned the Deed of Trust, and consequently does not have a perfected security interest in the Property. 124. Despite the improper notices of Compliance with Discovery filed by KSH, it is clear that Defendants failed in their duty to comply with Plaintiff's legitimate discovery requests. 11TH CAUSE OF ACTION DAMAGES FOR INJURY (ALL DEFENDANTS) 125. Plaintiff incorporates by this reference each and every allegation contained in all foregoing paragraphs, as though set forth in full herein. 126. Plaintiff and his partner are unwitting victims of an organized corrupt syndicate, a coordinated multi-entity joint venture among the named and unknown defendants and intermediaries and certain “Wall Street” individuals and entities which defrauded both the investors and the homeowners. The joint venture was designed willfully, recklessly and unconscionably to leave Plaintiff and his partner homeless and penniless at the ages of 68 and 65 respectively. Defendants and all of them are major players in the so-called “mortgage meltdown” which came close to destroying the world economy, and which resulted at the local level in very specific and personal damage to Plaintiff and his family. Plaintiff had nothing to do with the high-level manipulations, fraud and other malfeasance that are the subject of daily front-page news reports (Goldman, Lehman, Bank of America, et al) and which have resulted directly and indirectly in the destruction of Plaintiff’s business ventures, the loss of his once-substantial real estate equity, the waste of productive years, the interruption of his filmmaking and writing careers and other tangible and intangible damage and loss. 127. Plaintiff was willfully misled by financially and legally sophisticated people
who knew, or should have known, better. Plaintiff put every penny he, his partner and her then 90-year-old father could scrape together into their real estate and related business investments, a cash total of over $500,000 as well as years of sweat equity. Plaintiff and his partner have personally worked long hours seven days a week for the past six years, improving and maintaining the properties, setting up, promoting and operating a bed and breakfast and retreat business intended to cover the monthly payments, even as the economy went down and business became more and more difficult. Since and before the bankruptcy Plaintiff and his partner have spent the last several years in fear and trepidation as they watched their life's work and future security going “down the tubes.” They have been unable to effectively promote their retreat business due to the uncertainty imposed by impending foreclosure and the fact that their foreclosure defense is a full-time occupation. Plaintiff has been forced into a difficult, all-consuming, demanding and stressful bankruptcy and foreclosure defense which has made it all but impossible to build and sustain his businesses. 128. Injury to Plaintiff includes but is not limited to: destruction of business, emotional distress, stress, health, loss of equity, loss of credit, loss of reputation, interruption of career, inter alia. 129. Plaintiff advanced and stands to lose real cash value (cash + the Property + sweat equity/improvements) of at least $542,000.00, whereas Defendants used other people’s money and risked not one cent. Plaintiff invested real value (cash + improvements) in the Property, relying upon the veracity of Defendant’s appraisals and assertions that he qualified for the loan and that he would be able to re-finance in the future. While Plaintiff stands to lose everything and become homeless, Defendants, who already took huge fees, continue to profit from the Transaction.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 130. Plaintiff incorporates by this reference each and every allegation contained in all foregoing paragraphs, as though set forth in full herein. 131. Plaintiff is informed and believes and thereon alleges that the defective documentation, false representations and/or fraud that induced Plaintiff to enter into the Loan render the security interest invalid and unenforceable. 132. Plaintiff prays for a determination that the lien is void ab initio, and a declaratory order of the same. 133. Defendants' claim to Property is adverse to Plaintiff. 134. Because of the wrongful acts alleged herein, Defendants, and each of them, have forfeited any and all interest in the Property. 135. Plaintiff has incurred damages, and prays for remedies as outlined further in the section entitled “Prayer for Relief” enumerated below. 136. As a further direct and proximate result of Defendants' conduct as described herein, Plaintiff is entitled to money damages, and restoration of their credit. 137. As a further direct and proximate result of Defendants, and each of their conduct as hereinabove alleged, Plaintiff has suffered and continues to suffer damages in an amount not known by Plaintiff but determined in good faith to be with in the jurisdictional limits of this court. Plaintiff will amend this Complaint when the exact nature of the damages has been ascertained. 12TH CAUSE OF ACTION DETERMINATION OF VALIDITY OF LIEN (ALL DEFENDANTS EXCEPT KSH)
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 14TH CAUSE OF ACTION REQUEST FOR SANCTIONS (ALL DEFENDANTS) 141. Plaintiff incorporates by this reference each and every allegation contained in all foregoing paragraphs, as though set forth in full herein. 142. Plaintiff requests that the court impose appropriate sanctions on Defendants for the improper and fraudulent activities described above, pursuant to F.R.B.P. 3001(c). 28 U.S.C. 1927, 11 U.S.C. 105. 138. Plaintiff incorporates by this reference each and every allegation contained in all foregoing paragraphs, as though set forth in full herein. 139. As set forth above, Plaintiff herein petitions the Court to issue a declaratory judgment quieting title and avoiding any lien as to Plaintiff. 140. Furthermore, Plaintiff is entitled, and hereby seeks a declaration by the Court by decree of the respective rights and obligations of the parties, and each of them regarding the controversies alleged heretofore, with respect to each of the causes of action. 13TH CAUSE OF ACTION DECLARATORY RELIEF (ALL DEFENDANTS)
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 WHEREFORE, Plaintiff prays for a declaration of judgment against Defendants, and each of them as follows: A. Plaintiff's lien is avoided as to these parties. B. Title is quieted as to any parties adverse to Plaintiff and his co-owner. Plaintiff and his partner are the owners of the subject property, and Defendants have no interest in the property adverse to the Plaintiff; C. Defendants have violated federal statutes including but not limited to TILA, RESPA and FDCPA. D. Sanctions are appropriate and will be imposed. E. Defendants are ordered to provide a full accounting of all amounts charged to Plaintiff or paid by Plaintiff relating to the "loan"; F. Title to the Subject Property be restored to Plaintiff in the name of Plaintiff and; G. That the "loan" be extinguished in its entirety; H. For immediate cease and desist order enjoining all Defendants, and each of them, their agents, servants, heirs, assigns, DBAs, FKAs, corporate affiliates, subsidiaries, employees, and all persons or entities acting under, in concert with, or on their behalf in any capacity from selling or conveying or attempting to sell or convey any interest whatsoever that Plaintiff may have in the real property relating to the "loan". I. For compensatory damages according to proof, including lost credit, lost earnings and the employee benefits, medical expenses, emotional distress, humiliation, mental anguish, and the compensatory damages; J. For general damages according to proof; K. For special damages according to proof; L. For punitive damages in an amount appropriate to punish the defendants and deter others from engaging in similar misconduct; M. For interest on damages according to proof; N. For prejudgment interest on such damages as provided by law;
O. For an order requiring defendants to show cause, if any they have, why they should not be enjoined as set forth in this complaint, during the pendency of this action; P. For costs of suit, if any, incurred in this action; and Q. For such other and further relief as the court deems proper.
Dated May 10, 2011
By: _________________________________________ Andrew C. Bailey, Plaintiff in propria persona
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