February 7, 2014

For the 9th time, FDN attorneys in New Jersey have obtained a dismissal of a foreclosure action which was originally filed by foreclosure mill Zucker Goldberg and Ackerman, but with the case being later transferred to foreclosure mill Phelan Hallinan. The reason for this 9th dismissal was the same as the others which preceded it: the Plaintiff’s steadfast refusal to comply with discovery. Local New Jersey counsel Michael Jacobson, Esq. of the Cooper Levenson Firm represented the homeowners, assisted by consulting counsel Jeff Barnes, Esq.

The Zucker Firm has a long history of intentionally refusing to comply with discovery. In fact, in one case in Morris County where Mr. Barnes represented the homeowners, the Judge, during a Case Management Conference, specifically directed the attorney for Zucker to comply with the homeowner’s discovery by producing documents responsive to Mr. Barnes’ Request for Production and producing a representative for deposition. The Zucker attorney stated to the Judge “We’re not going to do that. We object to the discovery, so we are not going to produce it and are not going to produce a representative for deposition.” The Judge stated that she would dismiss the case if the discovery and representative were not produced. Zucker did not produce the discovery or a representative, and the case was dismissed.

Separately, on February 3, 2014, the Rhode Island Supreme Court has issued its opinion in the matter of Chhun v. MERS, No. 2012-298-Appeal, which reversed the Superior Court’s granting of a Motion to Dismiss which had been filed by MERS, Deutsche Bank, Aurora Loan Services LLC, and Domestic Bank. The homeowners had sued for declaratory relief, quiet title, and punitive damages, alleging that the MERS Assignment had no effect as it was signed by someone who was an employee of Aurora (and not MERS), and that MERS did not order the assignment to Aurora. The Court found that these allegations satisfied the requisite pleading standard and reversed the Superior Court’s ruling.

The Superior Court had taken the position that the homeowners did not have standing to challenge the assignment. The homeowners challenged Aurora’s authority to foreclose and asserted that the mortgage was not validly assigned.The Supreme Court found that these allegations stated a claim for which relief could be granted.

This decision is further evidence of the evolution of the recent body of case law nationally which is consistently permitting homeowners to challenge assignments. The decisions in Horace (Alabama), Hendricks (Michigan), Williams (Hawaii), Johnson, Naranjo, and Glaski (California), Erobobo (New York), Saldivar (Texas), and the recent Cosajay decision from the Rhode Island Federal court demonstrate where the law is heading on this issue. Further, the Drouin case from the New Hampshire Federal court distinguishes “attacks” on assignments from no assignment having occurred as a matter of fact in situations where the original lender was out of business long before the assignment.

We thank one of our dedicated followers for bringing the Chhun decision to our attention today.

Finally, oral argument was conducted in the Oregon Court of Appeals on Wednesday, February 5, 2014 per our prior post. The Court took the matter under submission and will issue an opinion in the coming months.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com