Legal Case Summary

13, 1900, a Nando versus Aquin Lone Services. Morning, Your Honours. Doug Gottren. I'm here on behalf of the Appellants, Mr. and Mrs. Anon. Please the court. I've fought considerably on how to try and introduce this case to the court today. I mean, this case arises from a question relative to the defense, the lender handling and processing of their loan portfolios in what's otherwise referred to as a securitization trust and particularly loans in the fall. And in that regard, I mean foreclosure defense counsel, particularly in Maryland, have had considerable difficulties as the cases have gone on before. And one of the, it was just yesterday that my pair of liand in me a case that that actually was just decided out of the Arizona Court of Appeals that I thought fairly illustrative, particularly in this case. I don't have a citation, but it's a case that goes by the name of Steinberger V Indie Mack, which was issued on January 30 of 2014. And in a 33 page opinion, the court in this synopsis that I have, it says the most significant portion of the holding is towards the end, where the court permitted the claim for payments slash discharge of a debt on the homeowner's allegation that one west had been paid all, or at least 80% of the amounts claim due under the loan due to an FDIC shared loss agreement, which was attached to the complaint. The court permitted the claim, even though at the pleading stage was not clear whether the agreement applied to that particular loan. The court found that the agreement does appear to provide that in exchange for one west assumption of Indie Mack federal loans, the FDIC would reimburse one west at 80% for any default in payments on these loans. The homeowner alleged that this agreement combined with insurance coverage and where other sources of reimbursement has resulted in one west either being paid in full on the note or having received 80% of the payments due on the note. It goes on to indicate that the set off against the amounts claim due on the loan and securitization cases due to insurance and other sources is a matter we have been advancing since 2008. We have had discovery on these issues repeatedly compelled, though never produced, the banks will take a dismissal or attorneys fees against them rather than produce this information

. This case is the first that we know of which now permits an affirmative claim to be made against foreclosing bank that it has been and paid in full from third party sources. This is very similar to the case that we're dealing with. Who was the plaintiff in that case? I'm sorry? Who was the plaintiff in that case? The plaintiff in that case was Steinberger. Was a borrow. In this case. Given your opposing counsel a copy of the case I take. I don't have a copy of the decision. I'll be happy to give him a copy of my. Generally we just go with actual decision or the fact. This is what I was handed. I apologize. I didn't have a chance to. It's hearsay from your paralegal. That's what it is. But your client is the borrower too. That's your point, right? Well, that's true. And you're saying that the load's been discharged? You know what the

. You know, I want to say. Bank had an insurer. I want to say to this court at the very outset because I know that there have been four cases that have come up to this court on appeal coming out of Virginia. One case out of Maryland where it has been raised similar type allegations where. Parties advance a theory that based upon various insurances, monoline insurance, credit default swaps, things of this sort that loans sitting within a credit or any securitization trust have been paid in full. But the arguments have always been. That the loan is discharged and the borrower is wanting a release of the lien based upon the payoff of the loan. And the one thing that I am not saying to you and this is the distinction in this case is that. I am not here and will readily admit to you that my borrower still owes money on the loan. We can get into some questions on who the borrower owes money to. We've had this case too. From South Carolina, we had a borrower who admitted he owed money to somebody. But this wasn't the person. Well, the bank, the one thing that the one thing that we do know and this was submitted by way of affidavit to the court below in the in the 12 be six motion to dismiss. Was an affidavit that was fairly lengthy and it concluded. Consider the affidavits in the 12 be six proceeding. I'm sorry, your honor

. The court consider the affidavits in connection with the 12 be six proceeding. It absolutely did. Particularly that change them to rules 56 or something. Well, that was one of the arguments that I raised in my brief. I think that he considered them in connection with the not answering my question. Were they were the affidavits considered the judge specifically what he stated in his decision and his decision was was made on the right. Can you answer that yes or no? No, I will I will I will I'll tell you what what what judge. Yes or no. I think he did take into consideration the the affidavits. All right, that's all I'm asking. Considered the your affidavits. So it's something this is still a 12 be six or is a rule 56. It's. Well, it went forward on a 12 be six basis. My my argument in part is that it put it perhaps should have been dealt with on a rule 56 basis. And if it was dealt with on a rule 56 basis that that the party should be given a modicum of discovery, right. Relative to the decisions that have been that have been issued by this court previously

. And specifically what what I'm referring to in the judge in his decision. This is in the appendix of page 89. Stated in his decision the affidavits submitted in this case is wholly speculative. Now, I mean in a in a 12 be six motion. It at least it's my understanding that the non moving party has the benefit of any any factual references whether it be set forth in the complaint or what what have you. Well, it's my understanding that you don't have affidavits in 12 be six. Well, that's true. That's true, Your Honor. That's true, but it. But I mean this case started this case started out in the Maryland in the Maryland court system. The Maryland court system. I'm going to have affidavits in some in 12 be in motion. All their emotions in the dismissing in the Maryland court in the Maryland state court system to all I'm suggesting is that the that the complaint. I mean as it was filed in the Maryland court system was sufficient. What's different about the Maryland court system versus the federal system is that the federal system has has a standard set forth under the Supreme Court case and ash craft vehicle and that the plaintiff has the obligation of moving. Moving its allegations in the complaint beyond speculation to to forget the pre-e theology exactly but but the the and this is this is part of the speculation is OK in the Maryland court. Do I think that's speculations OK in the Maryland court

. State courts that's a distinction you're making. I would I think Maryland judges would be surprised to hear that. I'm not it's it's. There's no requirement in the Maryland court system that a complaint be taken beyond that that speculative into that it ball beat or the ash craft the it ball standard. So this case as it was filed was sufficient in my mind under the Maryland system. It was removed over to the district court by the defendants and they filed the motion to dismiss in part based upon the ash craft vehicle issue. Now in response to that motion to dismiss. We had asked the court not recognizing the difficulty that we would face asked the court to to grant plan of leave to amend the complaint based upon what we knew to be true to include those provisions from the affidavit which wouldn't be required in the Maryland system to include provisions from the pooling and servicing agreement which talk at length about the obligations on the part of the securitization trust to maintain to take out the insurance is to maintain insurance is into and to apply for insurance benefits on loans that go into default and in a securitization trust. I mean right here I brought this with me today just to demonstrate for the benefit of the court the three to four in stack of documents is the pooling and servicing agreement that governs this trust that part of the record in this case. The pooling and servicing agreement is not a part of record in this case your honor but but what I am suggesting to the court is that there are many things that could be added into an amended complaint to the extent that the court was was impressed that plaintiff had not satisfied an ash craft the equals standard. And so who's your client? I don't know. Well you said you was a $500,000 mortgage. There's a $500,000 mortgage. If I learned how to do it you say it doesn't know the it doesn't owe the defendant any more money right. The defendant collected but it but you admit they owe the money right exactly are they making house payments. They're not making a payment anymore they live in the house they're living in the house. They're living in the house for nothing and they are not making payments

. It's a pretty good deal. Well maybe it's maybe it's maybe it's maybe it's a pretty good deal your honor but but I have to I have right seems to me like that's probably the end of the loan business in the country. Is that a lender or is loan business I'm talking about right right. Is that is that a securitization trust takes out insurance recognizing and if and if there's a default or something insurance company pays then the insurance company is subrogated that's correct your honor. From what I remember from Prax and Law there's the doctor of subrogation and that is a client owes whoever paid off the loan. That would be absolutely correct. Well then why aren't they is your why and your client paying insurance company. We don't know who the insurance company is we have a lender. So you're not paying anybody. We have a lender that says we have a lender that says we're paid off and we're entitled still to go proceed with foreclosure and get double recovery on this. And I'm saying I'm saying maybe you rent that if you're not going to make any house payment. I'm sorry maybe somebody owes somebody something. Your honor if it's living in the place and not paying anybody if the subregor would come. Why is it bringing all this to stir this stuff up. If the subregor would come forward and say look we paid this note off. We're now owed this amount of money. I am sure my clients would be willing to extend those payments to that lender or to that to that insure why did this came up in the context of your action in state court to quiet title correct on the property

. You weren't looking for the the source of to whom you contend that this money was owed. No what you're seeking to quiet title. I'm seeking quiet title and under the quiet title statute. And again the particular the particular issue under the Maryland quiet title statute that's different that says that if I file this complaint with these allegations which we did. That this action shall be deemed an in-rem action concerning the property itself. So I'm concerned about the property. I'm concerned about the deed of trust that sits within it. I am not concerned about the note or the obligation on the note because that's a personal obligation and by by virtue of the terms of the statute that obligation is irrelevant. What I'm talking about is if that loan was paid off in the hands of this lender. Then by virtue of subrogation somebody else now is entitled to that money but this lender no longer has a right to go forward under under and by virtue of the deed of trust to collect a second time. But even if that's true it doesn't allow you to seek the quiet title to remove any cloud on your clients claim to the property title. I will be happy to continue with this question and if you're on a wood restate the question please I didn't quite understand. Even under your theory yes. That this money is owed to someone other than the lender. It would not support your suit to quiet title to remove any cloud from your clients title to the home. I don't see why not. The statute indicates the statute indicates that if it's the homeowner's intention in filing the quiet title statute and I think in by its own terms it says

. You can seek to perhaps discharge the lien or you can seek perhaps to obtain an injunction and it's the injunction against these lenders that that the plaintiff is seeking. They have been paid. They don't have the right to double collect on this when a loan has by law now been subrogated to the benefit of someone else. Okay let me put this to you a different way. Doesn't your argument result in a windfall for your client? No you're on and I think and I think why not. In fact there's Maryland case law which suggests that if my client receives a benefit as an unintended third party based upon a contract that exists between two other parties. There is no right or obligation rather on the part of the homeowner in this case the third party to make restitution to either of these parties. And I that confirms your view that what you're going to do is if you're successful in this quiet title action then your guys are home free and that does seem to me to give them a windfall. And what you just said to me in response to that just sort of puts the nail in that argument. No what I'm saying is what they're going to get the quiet title action and then they're going to go search for the insurer and make a check of the past due payments and interest. What I think should happen what I think should my question to you is is that what they're going to do if they get a judgment in their favor. Are they then going to take the amount that they've owed an interest on it because they haven't paid for some years. Find the insurer and write a check to the insurer is that their plan. Absolutely. That's their plan. Yes sir. That's what you're saying in federal court today

. Yes ma'am. Okay. I am. Then why are they bringing this action if they're going to owe the same money to the same people. But they don't but they don't owe the money to the same people. They wouldn't be hurt one way or the other if it has been the insurer has paid it. Then whoever they pay to has to pay the insurer. There's going to be they're not going to be hurt by any double payment. There's going to be out paying your attorney's fees. They're paying your attorney's fees and they're going to pay interest on this money. They haven't paid in their on their mortgage. What I'm suggesting to this court is just like. Top going around and around. What I'm suggesting to this court is based upon what has actually gone on factually in this case. It's not and I think the end result of this case should be this. It's not that a deed of trust should be released. But the deed of trust should continue to exist for the benefit of the sub sub-regated party

. But that's not what you asked for. That's not what you asked for. You asked to remove any cloud to the title. That was one of the things I asked for an injunction. That's the only basis that that's what a quiet title action is. I asked for an injunction too. And I think and I think that an injunction doesn't necessarily require that the deed of trust be released. I'm saying the deed of trust can exist based upon the sub-regated interest that continues to exist. But why would you want it to exist when you're going to go out and find the insurer and pay the money and all the interest to? There's no need for it to exist. Is that going to be your first order of business? That's going to be my first order of business. But what I'm suggesting to this court is that I mean... Look, what your honors are suggesting and I appreciate the thought process. I mean, whether we pay party A or party B, you know, we admit we owe the money. But you're confessing liability on a part of your client to the SNE, the sub-regate. Whoever... Yes, sir. You're confessing liability, right? Yes, sir. And the deed of trust, I'd probably consider some of the deed of trust maybe. There's a lot in this deed of trust, but I just want to make sure that... But their provision... The trustee is such... The trustee is not what you have sued here, right? No, I did not. There is no suit against trustee. I think that the

... Yes, sir. You're confessing liability, right? Yes, sir. And the deed of trust, I'd probably consider some of the deed of trust maybe. There's a lot in this deed of trust, but I just want to make sure that... But their provision... The trustee is such... The trustee is not what you have sued here, right? No, I did not. There is no suit against trustee. I think that the... I think that the... There are, too, though, many provisions... Gone in Mercer as the trustee, according to the papers we have here. No, no suit was brought against the... There are additional provisions under the deed of trust. And specifically, I would refer the court's attention to page 28 of the appendix. I mean, I'll read. I mean, we're talks about miscellaneous proceeds being assigned to the lender. It says, miscellaneous proceeds shall be applied to the sum secured by this security agreement, whether or not then do with the excess if any paid to borrower

... I think that the... There are, too, though, many provisions... Gone in Mercer as the trustee, according to the papers we have here. No, no suit was brought against the... There are additional provisions under the deed of trust. And specifically, I would refer the court's attention to page 28 of the appendix. I mean, I'll read. I mean, we're talks about miscellaneous proceeds being assigned to the lender. It says, miscellaneous proceeds shall be applied to the sum secured by this security agreement, whether or not then do with the excess if any paid to borrower. There is recognition on the part of the drafters of this document that... That money's may come in from third sources. And I'm suggesting, in this case, monies came in from third sources. Monies may be due to that third source, but these two lenders no longer have an interest in this at all. There is no dog in this fight on the part of either of these lenders. All right. I think your time is expired. Thank you. Yeah. From your colleague. Good morning, Your Honours. May it please the court. My name is Joshua Tropper, and I'm here to represent the appellees. I'm not really sure how much I have left to say because the three you have made most of my case for me in your questions to opposing council. So I assume you have some for me

. There is recognition on the part of the drafters of this document that... That money's may come in from third sources. And I'm suggesting, in this case, monies came in from third sources. Monies may be due to that third source, but these two lenders no longer have an interest in this at all. There is no dog in this fight on the part of either of these lenders. All right. I think your time is expired. Thank you. Yeah. From your colleague. Good morning, Your Honours. May it please the court. My name is Joshua Tropper, and I'm here to represent the appellees. I'm not really sure how much I have left to say because the three you have made most of my case for me in your questions to opposing council. So I assume you have some for me. Yeah. No, I would appreciate the answer to this question. How long have the appellants failed to pay on their mortgage payment? Actually, I'm not sure that that specific amount is in not how much how long. I'm sorry. I'm not sure. I don't believe that that's in the records, Your Honor. I beg your pardon. You don't know either. No, Your Honor. If I was talking to my client, that's one of the first things that my client would be interested in telling me. Your Honor, that may very well be. It's a reasonable thing to suggest, but I'm here. I'm here with the record. It could be two months. It could be two years. Oh, it's it is. It is certainly longer than that, Your Honor

. Yeah. No, I would appreciate the answer to this question. How long have the appellants failed to pay on their mortgage payment? Actually, I'm not sure that that specific amount is in not how much how long. I'm sorry. I'm not sure. I don't believe that that's in the records, Your Honor. I beg your pardon. You don't know either. No, Your Honor. If I was talking to my client, that's one of the first things that my client would be interested in telling me. Your Honor, that may very well be. It's a reasonable thing to suggest, but I'm here. I'm here with the record. It could be two months. It could be two years. Oh, it's it is. It is certainly longer than that, Your Honor. The. What? Longer than two months or two years. Longer than two years. Why haven't you made any action to get. To get. Okay. Hi, Your Honor, the best answer I would have to that without divulging client confidence is that the client respects the judicial process. I hope that your mortgage or I hope I can borrow from them one of the. Your. Your. Your. Your. Your Honor, I don't mean I don't mean to. To be disrespectful or or flippant, Your Honor, but this this is a very odd case. And. Quite frankly, I'm fairly confident my client didn't expect it to go on this long. Is my understanding correct that the quiet title action in state court was filed in response to the threat of foreclosure? I believe that in the allegation, Your Honor, I actually don't you don't have that information either specifically that also unless that's alleged in the complaint that's also not in the record and I don't remember it

. The. What? Longer than two months or two years. Longer than two years. Why haven't you made any action to get. To get. Okay. Hi, Your Honor, the best answer I would have to that without divulging client confidence is that the client respects the judicial process. I hope that your mortgage or I hope I can borrow from them one of the. Your. Your. Your. Your. Your Honor, I don't mean I don't mean to. To be disrespectful or or flippant, Your Honor, but this this is a very odd case. And. Quite frankly, I'm fairly confident my client didn't expect it to go on this long. Is my understanding correct that the quiet title action in state court was filed in response to the threat of foreclosure? I believe that in the allegation, Your Honor, I actually don't you don't have that information either specifically that also unless that's alleged in the complaint that's also not in the record and I don't remember it. Well, the plaintiff sought a declaration that Aquin and Deutsche Bank no longer held any interest in their home. And I for some reason understood that to be in response to a threatened foreclosure. You don't know that. Well, Your Honor, I have no doubt that there was a threatened foreclosure at least to the extent of notices of default. It's just again. And my memorization of facts was limited to the record. There's there are a lot of things that I that just have slipped my mind this morning because I was focused on what's actually in the record already. So you don't know anything about the notices of default. I have to say that's true, Your Honor. And if it's not in the record, I wouldn't have been prepared to talk about it to this court in any event. And I apologize for not knowing the factual background. The deed of trust has dated January of 2007. Yes. That's eight years ago. Seven years. Seven plus. And there was a notice of default

. Well, the plaintiff sought a declaration that Aquin and Deutsche Bank no longer held any interest in their home. And I for some reason understood that to be in response to a threatened foreclosure. You don't know that. Well, Your Honor, I have no doubt that there was a threatened foreclosure at least to the extent of notices of default. It's just again. And my memorization of facts was limited to the record. There's there are a lot of things that I that just have slipped my mind this morning because I was focused on what's actually in the record already. So you don't know anything about the notices of default. I have to say that's true, Your Honor. And if it's not in the record, I wouldn't have been prepared to talk about it to this court in any event. And I apologize for not knowing the factual background. The deed of trust has dated January of 2007. Yes. That's eight years ago. Seven years. Seven plus. And there was a notice of default. What was it dated? I do not have that date, Your Honor. You don't know how many years they not been paying anything. That is correct. I know that the complaint for. For closure action in your paper. Yes. Where to mercy? I, you know, we have all these cases all week. And we shouldn't be knowing the case better than you all do. You know. Yes, Your Honor. I do apologize to that. You say quite frankly, I was. I was in the state of the Court. I saw that on June 10, 2010, plain to say another attempt to support the foreclosure sale of the subject property by filing a second action in the court. So one time you knew about it. My colleagues actually I've been, this case may even have been prepared in the lower courts by other counsel. I personally was not involved

. What was it dated? I do not have that date, Your Honor. You don't know how many years they not been paying anything. That is correct. I know that the complaint for. For closure action in your paper. Yes. Where to mercy? I, you know, we have all these cases all week. And we shouldn't be knowing the case better than you all do. You know. Yes, Your Honor. I do apologize to that. You say quite frankly, I was. I was in the state of the Court. I saw that on June 10, 2010, plain to say another attempt to support the foreclosure sale of the subject property by filing a second action in the court. So one time you knew about it. My colleagues actually I've been, this case may even have been prepared in the lower courts by other counsel. I personally was not involved. That's absolutely right. And you know, I was in this very court tree one day. This won't count against your time. And I was sitting over there waiting to have my case heard and I had Judge Winter who was chief judge You know from Maryland of the force circuit of the time and Somebody said from the Maryland up from the Virginia Attorney General's office your honor I didn't handle this case below so I really don't know the answer that question He said you go back to the Virginia Attorney General's office over lunch and you find out the answer to that question You come back here and by God I know to myself. I'm never gonna say that to the force circuit No matter what it's your case now. Yeah, yes, you're on it I was prepared to argue legal issues You are Prepared on the facts. Yes, you need to know the facts of your case to be able to help us You need to know them better than anybody in the courtroom you and your colleague on the other side Your honor me ought to be able to depend on you You had given us the facts. We need to be able to depend on you give us the facts Your honor in in this clip and a mess like this in in this particular case You're I absolutely agree and I do apologize for appearing on prepared your honor in this particular case the primary issue Is purely legal and the the the The only Factual question that we have a law to facts. Yes, Your Honor We need to know what the facts are. Yes, Your Honor the we've got this appendix and that need a trust is multiple pages Yes, Your Honor and it's fine for end. Yeah, I'm yes And you're the expert you're a officer of this court. You need to understand it and be able to explain it to it It talks about mortgage insurance in there what happens when there's about mortgage insurance if the mortgage insurance pays off then Who's the lender always money to? The the answer Yes, John Mercer is the trustee. He's not sued here. I Assume he acts on behalf of whoever's entitled to the money and whoever's and and Aquin loan servicing as the name implies is the loan servicer That's the the name defendant which means that Aquin also acts on behalf of whoever is entitled to the money and But John Mercer's the trustee under the need of trust. Yes, I don't know Mr. Mercer, but he's the trustee And it's spelled out what he what he does. He acts on behalf of Whoever's out with the money, right? Yes, Your Honor to make sure to make sure that they get their money back and secured by the real estate

. That's absolutely right. And you know, I was in this very court tree one day. This won't count against your time. And I was sitting over there waiting to have my case heard and I had Judge Winter who was chief judge You know from Maryland of the force circuit of the time and Somebody said from the Maryland up from the Virginia Attorney General's office your honor I didn't handle this case below so I really don't know the answer that question He said you go back to the Virginia Attorney General's office over lunch and you find out the answer to that question You come back here and by God I know to myself. I'm never gonna say that to the force circuit No matter what it's your case now. Yeah, yes, you're on it I was prepared to argue legal issues You are Prepared on the facts. Yes, you need to know the facts of your case to be able to help us You need to know them better than anybody in the courtroom you and your colleague on the other side Your honor me ought to be able to depend on you You had given us the facts. We need to be able to depend on you give us the facts Your honor in in this clip and a mess like this in in this particular case You're I absolutely agree and I do apologize for appearing on prepared your honor in this particular case the primary issue Is purely legal and the the the The only Factual question that we have a law to facts. Yes, Your Honor We need to know what the facts are. Yes, Your Honor the we've got this appendix and that need a trust is multiple pages Yes, Your Honor and it's fine for end. Yeah, I'm yes And you're the expert you're a officer of this court. You need to understand it and be able to explain it to it It talks about mortgage insurance in there what happens when there's about mortgage insurance if the mortgage insurance pays off then Who's the lender always money to? The the answer Yes, John Mercer is the trustee. He's not sued here. I Assume he acts on behalf of whoever's entitled to the money and whoever's and and Aquin loan servicing as the name implies is the loan servicer That's the the name defendant which means that Aquin also acts on behalf of whoever is entitled to the money and But John Mercer's the trustee under the need of trust. Yes, I don't know Mr. Mercer, but he's the trustee And it's spelled out what he what he does. He acts on behalf of Whoever's out with the money, right? Yes, Your Honor to make sure to make sure that they get their money back and secured by the real estate. Yes and and the allegation in this case and acclaim for for Quiet title which is an equitable proceeding which means that if there is as As Judge Mott said a windfall to one point that's not equitable That could be the end of the of the analysis well there should be living there and they haven't made any payments on five hundred thousand Our loan that pretty much getting a windfall I can't disagree with that Your Honor the and the And Your Honor also said earlier that this would be the end of the mortgage loan business as we know it if the Appellance position in this case were made the law I'm not an expert in it But I was just my reaction from reading this and and I agree completely the because I mean no borrower I'm a senator who ever sends me the Notice the send it in I mean I because I know I owe Something and I'm living there if if I think that's about 99.99% of the people out there I guess We like to hope so The if the appellance position in this case were upheld no borrower would ever make the first payment Because they get a free house as soon as they sign the trust document Well, that's the the the the necessary implication from that is that no one would ever make loans No one would ever ensure loans and as your Honor said that would be the end of the loan the mortgage loan business As we know it and there are surely people out there especially in these last six or seven years Who might think that's a good thing? So what do you say that this you say this this lawsuit is frivolous? Your Honor, I I Would say that this lawsuit is very weak And I would probably not like to express an opinion as to whether it's frivolous because that would all you're on the underside of it Yes, Your Honor, that's why I would not like a complaint in the federal court of Maryland and now in the courts or court of Your client I ask you the question is it frivolous? And you're the only person here that's representing the defendant your honor my and I just want to yes or no answer My personal opinion your honor is that it is your opinion as a lawyer and as a lawyer representing the defendant of the the Appalienist case is what as as as counsel for the appalienes in this case your honor I have to say that it is a very creative argument for a change in the law and therefore I would I would have no trouble making the art if the question came up I would have no trouble making the argument that it was frivolous, but it would not this up. Yes, Your Honor There's acid three times I'm I'm trying to avoid imputing the character integrity of another attorney when when it is not necessary your honor I do believe that the facts in the law do not support by any stretch of the imagination this case I think that's I think that that I hope that answers your question You understand now that the next time we depend on you to know the facts and understand another lawyer doing it But Your honor that was not intended as an excuse and I appreciate your indulgence, but I did Approach this case as a purely legal one that the facts were based on what's the wrong way to approach? I yes, Your Honor. I have been to the bigger out the law. We've got only smart law books over here The bigger out the law what we need to understand are the facts Okay, you're your honor judge monster and and you have have both To your rescue No, I'm not expecting rescue your honor Okay, could you turn to page 51 of the J.A.? You have it in front of you Yes, Ron Tell me what this is It's a top help. That's what I want help help for explanation To give me some help your honor if you were looking at a computer screen and you saw that you would probably want to press help What is this? This is I Should Preface if if I might my response by saying that this is Part an exhibit to an affidavit which was which is in the record because it was tender But it is not it was not considered by the experts affidavit. Yes, yeah, okay It's an exhibit to their experts affidavit And what is it and and and and having read the affidavit and looked at the exhibit I could not figure out what it meant any more than the district judged it It is intended. I as if I understand correctly To identify loans as they are on account records of a One of the defendants here No, your honor of the entity that actually owns the note The and and is Okay, so but the their exhibits who you're saying that they should be able to explain it and you can't right? I don't believe they can explain it either your honor. I think I believe that the the plan is expect Understand that their expert can explain it and Our view of it is that it is irrelevant Because as a matter of law even if this showed that there were an accounting Accounting records somewhere that showed that this particular loan was marked as zero balance because their insurance proceeds all of which You speculation and is not facts in the record even if all of that were shown Then as a matter of law it would still not add up to a claim a valid claim for clear title for quiet title And when you sit down you might want to reread your own memorandum of law and support of the motion to dismiss because it's I found it helpful in answering the questions That you seemed unable to respond to what I think your response was that some of the lawyer prepared that another firm And you know you're on or I again I'm I'm not offering that as an excuse that it's That's not an excuse. That's an explanation. Yes, and and I do appreciate That distinction and I apologize for having accidentally and misguidedly actually followed it In preparing for this morning. I do think that the I Need to disagree with the appellance council on one item and that is Whether the district court considered the experts affidavit Because councils answered to that was it absolutely did consider it in fact what's clear from the transcript is that the district or the district court Considered the affidavit as a proffer of evidence And determined that it was not appropriate it was speculative it was not it was not appropriate it was not admissible the court did not convert this to to summary judgment And explain why You can ask you one more question Of course you're not you're gonna know the answer to but anyway In this amphitheater you say that the state court action was no that the district court action was dismissed with prejudice on April 22, 2010 At the time of the dismissal the subject property was scheduled to be sold at poor closure June 16th I never was sold or was it sold? To the best of my knowledge it was not yeah, right and then next paragraph is a cancel cancel just keep have to keep reading these paragraphs Then it's removed federal court in 2013 I'm just Lord that this is you know, I've got to go home and tell my husband that there is a new a New way not to pay your mortgage Your honor, I hope that before you tell your husband that there's a new way not to pay the mortgage That this court will make sure that that way doesn't work and And I think that that the There is The the the difference I think you you mentioned earlier the difference between the pleading standards in Maryland and the federal court May exist it's not as substantial as counsel suggested is but I think more important if Council if if the plaintiff has Evidence that would enable it to plead facts that would raise its claim from purely speculative to plausible Then in the face of a motion to dismiss under 12 b6 in the federal court it has every right to amend freely Well, what what facts would they see in other words? I think let's assume for purposes here that these loan was also Was was the lender does has gotten mortgage payment for them for the loans The insurance Yes, Your Honor the question the the the allegation is that There is insurance the allegation is that the insurance paid It is it is a legal conclusion to say that because of that payment The debt is released that's alleged, but that's really a legal conclusion. That's not a fact I guess if that actually happened why would you have any right any where would you care? You know about standing for plaintiffs your honor be Well that comes in Multiple layers of answers to that the first one is that Precisely because it's purely speculative as to whether there's any question About the appellee standing second because the appellee is the loan servicer so the note itself may Transfer ownership Multiple times the trustee still is responsible for it the service or still services it Somewhere in somebody's records it will indicate who actually owns the note in a particular moment and The the third thing is that if there is a contract of insurance which is alleged then exactly the exact nature of the subrogation depends on the the contract of insurance and it in some contracts it means that the insured Can proceed and or some contracts and and then reimburseing insurance sometimes the insurer proceeds in the name of the insured sometimes the insurer Simply takes over possession of the race All of that here because it's purely speculative as to whether there even is insurance We don't have in the record of this case and I personally do not know What what what the circumstances are there, but I do know that My client believes it still has the right to be here And from that one might even infer that it is Either that there is no insurance or that it hasn't been paid or that It has the right under the insurance contract to continue acting in its own name and just deal with the insurance company as an accounting matter In any of those circumstances it doesn't add up to clear title because as council acknowledged the plaintiff still owes the debt to someone Whether there is I'm sorry, I'm out of time Sure exactly how much time I have left but I would like to answer some of the questions that were posed Firstly This case was filed not under threat of a foreclosure in fact There was a foreclosure case that was pending before this case was filed However that the the lender dismissed that foreclosure case voluntarily On its own I still don't know why they did it But that's what happened The pendency of a foreclosure action would have prevented the ability in the part of the plaintiffs to have initiated this action the Secondly The plaintiff is not seeking a Freehouse I'm and again, and I want to emphasize That all I'm asking the court to recognize are the legalities that are actually going on the facts that are actually going on between the parties and if If a servicer on behalf of a a trust in Which this loan is supposedly been assigned and cannot come out? Has been paid off by somebody It doesn't matter Where where I Mean does does the notion should the notion lie that they should be entitled to collect a second time and this is why I brought up the notion of the right of Subrigation it's the subregor that should have the right to come forward It's the subregor that has the legal ob the legal right to come forward That loan has been in the hands of the trust Pay it off I'm not arguing that it's paid off by the borrower and I'm not suggesting to the court that my that the borrower doesn't continue to owe on that note I want this to be clear the Two the notion of of there being quiet title. There is an aspect of quiet I mean this is the in the quiet title statute itself it talks about an in-rem or quasi-end The in the in the in-rem action is is in action if there was a an order issued that quieted title to this particular property That is an order that goes out to the world at large everyone the quays a quays an in-rem action is Is in action in which the orders that may pertain to that particular case and be issued pertain to the parties that are before it only and And and that is what I'm here to try and get the support to recognize or the court below to recognize I am not again suggesting all in suggesting is that Deutsche Bank as as trustee for the Securitization Trust service by Aquin Bank Have no right to continue collecting on this note that right has now been assigned And I'm asking this court to simply recognize that legal principle The Comment the the notes that that Your Honor had asked to turn to the appendix of page 51 That is an attachment to the half a David that was submitted by William Patallel I would suggest although I don't know particularly I do think that this is Part of a report that would have been issued from the Bloomberg reporting service That is available to Not necessarily to the public at large, but certainly to lenders and to those that have that have Licensed the rights to access this information And this information will give information Relative to the status of a particular loan In a publicly traded trust such as what this such as what goes on in this case I cannot explain it only Mr. William Patallel can explain it

. I'm not I'm not But he attaches this in support of his his affidavit that he had prepared And concluding that that this loan had in fact been paid off I think to the extent that the court below Suggest as it did That that the affidavit itself is wholly speculative I mean I can't understand how a court or anyone can come to a conclusion that something is speculative Unless they've taken a look at it and considered it and And judge Titus below took a look at this affidavit considered it and concluded this is speculative And I think that that is wrong under the standards whether it be under a 12b6 or summary judgment standard for the judge to have come to that sort of a conclusion the If anything If anything Particularly with what's on the line in these in this regard it would seem all the more Important in my mind that That the parties be allowed to engage and discovery defined out exactly what the heck Has happened in here in regards to these these lenders being paid off where the source of funds came from what the subrigation rights may be So one and so forth, but so maybe my argument is a technical one Maybe it is a technical one. I mean we can look at it and say well, yes the borrowers money You know, so who cares he pays party a your party be But and and in that regard I am asking this course and a tech this court in a technical sense that Particularly under the Maryland statute which says That my borrowers out personal obligation on the note is irrelevant that we're looking at this piece of property We're looking at the lenders right if if there is any in that need of trust that continues What might that be and I am suggesting to this court that if anything Again, I am not even though we have what's put in the complaint That that that the lien be released I don't think that that's necessarily the proper answer or conclusion in this case I think that the lien should stay in the property for the benefit of a subregated party But the issue of subrigation again is not before the court in this case And that that issue we don't know who the who the subrigorant the That is an issue for another day The essential problem that I will tell you that I have with your argument is I don't understand if I take everything that you say as an officer of the court as the truth Then I don't understand the reason for this case Because if you owe someone and you're going to pay someone what difference is it make you to whom you pay? Why Break it out for six years why hire an attorney why take an appeal? I'd go to two courts get to miss if the end result is going to be the same. I mean you're just not a Roving assistant attorney general trying to find the correct person to pay your honor It is important. It is important to the extent that we need to understand what goes on in the loan industry It is so easy. It is so easy to say like once to write an expose about The loan industry I'm starting your client wants to write an expose about the loan industry if he wants to I'm not going to stop him I mean I think there are books out there that not gonna stop it But that's the purpose of this lawsuit to expose the loan industry No, it's important to recognize what goes on in the loan industry What is going on in the loan industry and in this case is not right? Anyhow I see my time is about to expire the one thing again. It would be it would be the Plain of request or the appellants request your honors that Again, I I believe that judge Titus aired in Several regards. I've set out I set out that error as as amply as I could in the briefs that I have submitted I do think that the case should be remanded if for no other reason but to but to engage in discovery of You know to to get to the bottom of what is going on? I think we understand your argument your time as a fighter. Well, thank you. Thank you honors I appreciate you're you're you're putting up with m