[CAMFFG] MENJIVAR VS. WELLS FARGO BANK – Argument at the Ninth Circuit – February 2, 2016 [1 Attachment]
|Feb 6 (4 days ago)|
(please disregard my earlier post a few minutes ago and look at this one instead.)
here is our argument before the Ninth Circuit in Menjivar v. Wells Fargo from last Tuesday, February 2, 2016. Richard Antognini argued our side. we are appealing US Bankruptcy Judge Neil Bason’s order dismissing our complaint with prejudice.
the very OBVIOUS takeaway from this hearing is that everyone better damn-well-plead an EXPLICIT rescission claim in any action on a mortgage.
if you watch it, please send your thoughts to the group or directly to me or Richard Antognini. we are especially interested in whether you agree that all three judges really wish we had used the word “rescission” in the complaint and that they are inclined to rule for us so long as they don’t feel prohibited by the rule – real or not – that arguments not made below are waived.
we lost at the bankruptcy court and the bankruptcy appellate panel (“BAP”) because those four judges believed that our claims for relief for nonformation of contract due, in part, to fraud in the inducement were NOT claims in contract with a four-year statute of limitation. nor were any of our other contract-related claims deemed to be contract claims. instead they said we had pleaded fraud claims which were only entitled to three years SOL and therefore we filed too late.
it was bizarre to me since i hadn’t even included fraud as an alternative to our various contract and fraudulent transfer claims (unless you consider discriminatory lending or predatory lending as fraud claims, which i didn’t. i consider them allegations that undermine the essential element of the formation of any contract – a mutual meeting of the minds).
when Richard Antognini came into the case, he observed that all of the facts we had pleaded fit neatly into a contract rescission claim. we took a gamble and dumped all of the arguments that we had made below and threw everything into the rescission argument. it appears from watching the video that our gamble has almost paid off, but for the pesky problem that arguments not raised below may be waived. we believe its within the Ninth Circuit’s discretion to accept our “rescission” argument now. indeed, we believe it has been there the whole time.
(if someone could explain to me the difference between “nonformation of contract” and “rescission” i would be grateful, because I fear that I have let my great Loyola contracts professor down. i still don’t see the difference.)
all three judges chase Richard around the complaint asking him where the word “rescission” is used and why we didn’t plead “rescission damages.” Hon. Consuelo Callahan starts off pointing out our gall to believe that we can raise “rescission” for the first time at this time. even the Hon. Dorothy Nelson – a truly wonderful presence in the courtroom – jumps right in and Richard adroitly points precisely to the pages in the record that best support our “rescission” claim.
The Hon. N. Randy Smith (“I’ve pled rescission claims many times myself”) is especially annoyed with us/me for leaving it out. (if you listen closely, i am pretty sure you can hear him say “duh.”) as hard as it was to listen silently while my work was thusly criticized, the Judges’ passion and their engagement suggests they are taking the question very very seriously.
of course, we believe that federal court is a notice or fact pleading court and that so long as the facts are there, we should have been allowed to amend the complaint to insert the single word “rescission” into it. we used the words “disallow,” “cancel” and “avoid” throughout the complaint. (see our 18 claims for relief below and in the complaint that i attach.)
it is very encouraging, i think, that the judges ask Wells Fargo what prejudice they would suffer if we are allowed to amend and then they ask us the same question. Wells Fargo’s response is that they would have to keep fighting us in court – pretty lame – but our response is that at this point – because of the statute of limitations that everyone is so keenly aware of – the Menjivars would forever lose their right to challenge the origination of their mortgage. to me, the judges really seem concerned that the Menjivars would be prejudiced if they are not allowed to amend. (i hope i am not projecting.)
thanks for watching and reading.
here are our 18 claims. the complaint was amended by right, not after any court order dismissing with leave to amend so it really should not be thought of as a first amended complaint in the sense that the court gave us any chance to fix it. the dismissal with prejudice came as a complete surprise to us.
FIRST AMENDED COMPLAINT TO DISALLOW CLAIM AS UNENFORCEABLE OR TO DETERMINE CLAIM IS UNSECURED AND NOT TIMELY FILED:
1. TO DECLARE MORTGAGE CLAIM CONSISTS OF IN PERSONAM NOTE OBLIGATION AND IN REM DEED OF TRUST SECURITY INTEREST TRANSFER INCIDENT TO NOTE [11 U.S.C. § 101, Carpenter v. Longan 83 U.S. 271, Johnson v Home State Bank, 501 U.S. 78, Madrid 725 F.2d 1197];
2. TO DISALLOW CLAIM AS UNENFORCEABLE – CONTRACT NOT FORMED [11 U.S.C. § 502(b)(1)];
3. TO DISALLOW CLAIM AS UNENFORCEABLE – PREDATORY LENDING [11 U.S.C. § 502(b)(1), 15 U.S.C. §§ 1601-1667f, 12 C.F.R. pt 226];
4. TO DISALLOW CLAIM AS UNENFORCEABLE – DISCRIMINATION IN LENDING [11 U.S.C. § 502(b)(1), 15 U.S.C. §§ 1691-1691f, 42 U.S.C. §§3601-3619];
5. TO DECLARE DEBTOR HAS STANDING TO AVOID OBLIGATION [Cohen 305 BR 886];
6. TO USE STRONG-ARM POWERS TO AVOID NOTE AS ACTUALLY FRAUDULENT OBLIGATION [11 U.S.C. § 544, Cal.Civ.C. § 3439.04(a)(1)];
7. TO USE STRONG-ARM POWERS TO AVOID NOTE AS CONSTRUCTIVELY FRAUDULENT OBLIGATION [11 U.S.C. § 544, Cal.Civ.C. §§ 3439.04(a)(2), 3439.05];
8. TO DISALLOW CLAIM AS UNENFORCEABLE – SECURITY INTEREST FOLLOWS THE NOTE [11 U.S.C. § 502(b)(1), Carpenter v. Longan 83 U.S. 271];
9. TO DECLARE DEBTOR HAS STANDING TO AVOID TRANSFER [11 U.S.C. § 522(h), Cohen 305 BR 886];
10. TO USE STRONG-ARM POWERS TO AVOID DEED OF TRUST AS ACTUALLY FRAUDULENT TRANSFER [11 U.S.C. § 544, Cal.Civ.C. §§ 3439.04(a)(1)];
11. TO USE STRONG-ARM POWERS TO AVOID DEED OF TRUST AS CONSTRUCTIVELY FRAUDULENT TRANSFER [11 U.S.C. § 544, Cal.Civ.C. §§ 3439.04(a)(2), 3439.05];
12. TO DISALLOW IN REM DEED OF TRUST SECURITY INTEREST AS AVOIDABLE TRANSFER [11 U.S.C. § 502(d)];
13. TO DETERMINE IN PERSONAM NOTE IS UNSECURED [11 U.S.C. § 506];
14. TO DISALLOW UNSECURED CLAIM AS UNTIMELY [11 U.S.C. § 502(b)(9)];
15. FOR QUIET TITLE [28 U.S.C. § 2201];
16. FOR INJUNCTIVE RELIEF [11 U.S.C. §§ 105, 362];
17. FOR DAMAGES;
18. FOR COSTS