Using Equitable Mortgage Defense Against Eviction In A Foreclosure Rescue Situation

(Part 1 of a Multi Part Post)

I came across two (pretty old) court cases (from Florida & New York) which, "in essence," involved the assertion of "equitable mortgage" by a "tenant" as a defense against a "property owner" in an attempted eviction in a landlord-tenant action (the words "equitable mortgage" however, were not actually used in the cases).

(I caution the reader that I have not, in any way, researched this issue, but I've merely "stumbled over" these cases. I've read them, and am simply bringing them to your attention. In quoting from the text of these cases, I've omitted all citations and internal quotations for ease of reading.)

New York

In one case, a New York intermediate appellate court reviewed a case where (according to the court) "[s]ubstantially all the evidence offered by defendant [in asserting an equitable mortgage defense] was excluded by the [lower] court on the theory that being in possession under the lease he was not at liberty to dispute the title of his landlord."

The New York appellate court made the following observation on the foregoing point:

• "That elementary principle does not preclude a tenant when sued for rent from showing as a defense that since the execution of the lease he has acquired a title superior to that of his lessor or has acquired the lessor's title or that the title of his landlord has expired by its own limitations or has been in any manner extinguished subsequent to his entry under the lease or from setting up a title acquired by him since he became tenant, overreaching the title of his landlord, or in any way showing that the relation of landlord and tenant has ceased to exist (my emphasis). Some of the authorities asserting these propositions are here cited."

(citations omitted)

In reversing the lower court's decision, the appellate court stated:

• "It may be that if the evidence of defendant had been received it would fall short of establishing the [equitable mortgage] defense here outlined, but he should have been given the opportunity to establish such defense."

The court also commented:

• "It was not necessary that defendant should surrender possession and institute an action in equity to have his rights formally declared. If unjustly sued for rent he could show the changed character of his possession and assert his rights as a defense."

While this case may not be exactly on point in connection with the typical foreclosure rescue, "sale-leaseback-reconveyance" agreement, it shows the willingness of the court to rule that equitable issues raised by a "tenant" against a "landlord", where the landlord allegedly came about his title by reason of a deed given as security for a loan, are "fair game" in an eviction action.

In the foreclosure rescue context, it seems to me that the equitable argument of the financially strapped homeowner being evicted by a foreclosure rescue operator would simply be that the instrument (the purported "lease") that the operator is trying to enforce in attempting to evict the homeowner is not an agreement to pay rent, but rather, is an agreement to pay interest pursuant to, and a part of, a larger agreement that constitutes an equitable mortgage.

In effect, the homeowner in this scenario is simply arguing that there is no (and never was any) valid landlord-tenant relationship where eviction is appropriate. The relationship between the parties (as the argument would go) is that of a debtor and a secured creditor where the appropriate action to enforce payment would lie in a foreclosure action of the equitable mortgage by the foreclosure rescue operator (notwithstanding the fact that the instrument may actually be "labeled" or "titled" as a "lease").

Kibbe v. Crossman, 139 A.D. 338; 124 N.Y.S. 3; (NY App. Ct., 3rd Dept. 1910)

.

Florida

The second case is a decision of the Florida Supreme Court involving the following facts:

1) An eviction action was brought by a "landlord" in a county court (court of limited jurisdiction) which had jurisdiction to hear landlord-tenant disputes, but did not have jurisdiction to hear actions involving the titles to, or boundaries of, real estate.

2) In response to the attempted eviction, the "tenant" pleaded that the dispute was one involving the title to real estate and that the county court did not have jurisdiction over the matter.

3) The following text represents excerpts from the "tenant's" plea, as extracted from the court case:

• "1. The said cause involves the question of the title to the real estate described in the writ in that the defendant claims to be the owner of the said real estate and of the improvements thereon; that he is not the tenant of the plaintiff, has no agreement with him for the payment of rent and is not indebted to him in any sum for rent of said property; that until very recently the plaintiff has not claimed to be the owner of said property but has claimed to be the holder of a mortgage indebtedness against the same and that inasmuch as said cause involves a controversy as to the title of said real estate the circuit court has under Section 11 of Article 5 of the Constitution of the State of Florida exclusive original jurisdiction of said cause."

• "2. That heretofore the defendant has instituted in the circuit court for Pinellas County, Florida, on the chancery side thereof a suit alleging that the plaintiff is the holder of a mortgage indebtedness against said property, that said mortgage indebtedness is usurious to such an extent that both principal and interest are forfeited and asking that a deed under which plaintiff hols (sic) be declared to be a mortgage and that plaintiff be ordered to reconvey and that defendant be decreed to hold said property free and clear from said indebtedness, that the plaintiff herein demurred to such bill of complaint primarily on the ground that this defendant did not offer to repay the principal of such indebtedness and the demurrer was sustained on that ground, no contention being made that the plaintiff herein was the actual owner of said property, that an appeal has been taken from the order sustaining said demurrer and is now pending in the Supreme Court of the State of Florida, that by virtue of such facts this court has no jurisdiction to try this cause."

4) The County Judge disregarded the plea to the jurisdiction, and the circuit court (a higher court) subsequently issued a writ of prohibition upon the County Judge, thereby halting the eviction action.

5) The Florida high court addressed the matter by first reciting a portion of the then-existing unlawful detention proceedings statute, then went on with the following statements:

• "The above statutory provision as to procedure in cases of landlord and tenant, does not preclude the defendant in possession from pleading to the jurisdiction of the court on the ground that he claims title to the real estate, of which subject the County Judge has (n)o jurisdiction to try or determine."

• "When in proceedings in the County Judge's court to recover the possession of land as from a tenant, a pleading is filed which puts in issue the title or boundaries of the land in controversy, it becomes the duty of the County Judge to dismiss the cause for want of jurisdiction."

• "Prohibition is the defendant's remedy where the County Judge does not dismiss an action for unlawful possession of lands when a plea tenders an issue as to the title of the land."

Based on this, it appears to me that, in the foreclosure rescue context, a homeowner finding himself sued for eviction can temporarily stave off eviction merely by asserting the equitable mortgage doctrine. Stated another way, once this doctrine is asserted, it doesn't seem like a court can properly issue a judgment for eviction until the issue of title to the property is first tried. Further, where a court of limited jurisdiction is hearing the eviction action and has no jursdiction over disputes involving title to property, the judge is duty bound (at least according to this case) to dismiss the action, at which point, the case can be refiled in an appropriate court having proper jurisdiction.

One point that I want to highlight is that in both this case and the New York case, the tenants asserting the equitable mortgage doctrine lost their cases in the initial court that heard the matter. It was necessary to file and litigate an appeal (and incur the cost attendant with such an appeal) to arrive at the correct decision (For anyone representing a homeowner in this situation, I hope you win it on the first "go round").

Hewitt v. State, 101 Fla. 807; 135 So. 130; (Fla. 1931)

_________________________

Re: Subject Matter Jurisdiction

The Florida case dealt with the issue of the court's jurisdiction over the subject matter. Regarding the issue of subject matter jurisdiction generally (and I'm only thinking out loud here), I pose the following questions:

1) What happens if a homeowner in a foreclosure rescue deal is evicted from his home, does nothing about it for a while (whether it be a few months or a few years), and then goes back into court (through counsel) and files an action for a declaratory judgment, wherein an "equitable mortgage" declaration is sought regarding the "sale-leaseback-reconveyance" arrangement?

2) Does a statute of limitations apply to an "equitable action" such as this? If so, how long do you get to bring an action?

3) If successful in obtaining an equitable mortgage declaration regarding the initial sale-leaseback transaction, does this then make the judgment or order of eviction (wherein the homeowner was forced out of his home by order of the court) "void" for lack of subject matter jurisdiction? (after all, if the deal was actually an equitable mortgage all along and not a true sale, then there shouldn't have been any eviction in the first place).

When a judgment is "void" (as opposed to being merely "voidable"), it generally is void from its inception. Typically, when a judgment is void, then everything that happens after the issuance of the void judgment is also void (ie. subsequent sale by foreclosure rescue operator to third party strangers and mortgage lenders financing the third party sale). Claims of the "bona fide purchaser for value, without notice" status may not prevail when the subsequent purchaser's interest in the property purchased devolved from a void judgment. Further, unless I'm mistaken, claims that a judgment is "void" for lack of subject matter jurisdiction may be brought at any time (no statute of limitations applicable, no laches). Finally, I think that the doctrines of res judicata, law of the case, estoppel, etc. may be inapplicable in a matter involving a void judgment.

Obviously, the answers to the foregoing questions will depend, at a minimum, on the specific laws of your home state. Depending on what those laws say, it may be that there are many victimized (and devastated) homeowners throughout the country that have lost their homes in foreclosure rescue deals that still have viable causes of action, not only against the foreclosure rescue operator personally, but also against the property that they had "stolen" from them. If they do, in fact, have valid claims against the property, it may then be that they are entitled to the return of their homes (or possibly damages against the operator), in which case the subsequent buyer and any mortgage lender financing the purchase, may end up being the victims (and, in essence, left "holding the bag"). Of course, if the subsequent third party buyer and mortgage lender insured their purported interests in the property by obtaining a title insurance policy, it may then be that they have a valid claim for indemnification from their title insurer. It would then be up to the title underwriter to go after the rescue operator to recoup its paid out insurance claims. As a practical matter, if the homeowner in this scenario does, in fact, have a legitimate case, it may very well be that some form of financial settlement involving all the parties, including the title insurer, can be reached (After all, the cost of "unwinding" these transactions and "cleaning up the mess" through protracted litigation could become rather expensive and time consuming).

For Part 2, see Equitable Mortgage Defense In Foreclosure Rescue Eviction Action - Part 2

(revised 2-5-07; 10:26 pm) emdefense Florida equitable mortgage alpha New York equitable mortgage puzzling

Search Tips For Finding Equitable Mortgage Cases On The Internet

For those of you interested in searching for equitable mortgage cases on the Internet, you might want to consider the following:

1) Check out the LexisOne website. Upon compliance with their terms and completing their free registration, they offer free limited case law search capabilities (according to their site, the last five years of state cases and Federal appellate cases; U.S. Supreme Court cases back to 1790).

2) When you get to the page that contains the search box, select the radio button for "Search by keyword(s)". Then select your home state from the "drop down" menu.

3) In the search box, enter the following search command exactly as it appears below:

((deed OR conveyance OR title) w/6 absolute w/10 (mortgage OR debt OR loan)) OR equitable mortgage

What you're trying to accomplish with this search command is to find any cases that contain either the phrase "equitable mortgage," or the phrase "(deed OR conveyance OR title), absolute in form, given as security for a (debt OR loan), shall be deemed a mortgage" (or any similar sounding phrase).

More specifically, in the second part of this compound search command, you're specifically searching for the term "absolute" in any case where it appears within 6 words of either deed, conveyance, or title and, at the same time, within 10 words of either debt, loan, or mortgage.

You can try this search both for the state case law of your home state as well as the Federal appellate cases for the Circuit Court of Appeals within which your home state is located.

If your search fails to find anything meaningful, you can obviously "tinker around" with the search command to see if you have better luck.

When I did it, it returned over 100 cases. However, I searched the state cases for the entire country and with no date restrictions. A search limited to one state will obviously yield less cases; hopefully, it will yield at least one or two.

Ultimately, (unless your local courthouse has a law library with high speed Internet access computers with free access to Westlaw or Lexis), you may need to "spring" for the paid services offered by one of these companies. If you're working within "strict budget parameters," you may want to check out the Loislaw website which, the last time I checked, will give you immediate access to their case law collection for a 24 hour period at a charge of $24.99. See the Loislaw website for more details.
.

Equitable Mortgage Cases in Massachusetts

I recently came across a Massachusetts case (decided in 2004) dealing with, among other issues, the equitable mortgage issue in the context of a bitterly contested divorce proceeding. The case involved a title transfer from one party to another where, ultimately, the transfer was held to be an equitable mortgage. The context was significantly different than the context involving a foreclosure rescue sale with a simultaneously executed agreement to reconvey. Nevertheless, this case contains language that indicates to me that there probably are Massachusetts decisions (probably old cases) in the case law that can be used in developing a case in attacking the "sale leaseback with reconveyance" arrangements commonly used in foreclosure rescue situations (I see no reason why Massachusetts would be any different than any of the other states reported on to date in connection with this issue).

In applying the equitable mortgage doctrine, the Massachusetts court observed that:

• "When a deed (absolute on its face) is given at the time a debt is incurred for the purpose of securing payment of the debt, "a court of equity will treat the deed according to its true nature as a mortgage." Fales v. Glass, 9 Mass. App. Ct. 570, 573, 402 N.E.2d 1100 (1980). See Allen v. Mutual Acceptance Corp., 350 Mass. 553, 554, 215 N.E.2d 784 (1966) ("Whether a deed absolute in form is an equitable mortgage depends upon the intention of the parties as shown in the circumstances of its negotiation and execution"); Restatement (Third) of Property (Mortgages) § 3.2(b) (1997)."

• "Under the express terms of the Levensons' separation agreement, the deeds in the present case were intended to serve as additional (or alternative) security for Levenson's obligations under an anticipated loan transaction. Consistent with the provisions of this agreement, when Levenson borrowed funds from Mr. Feuer as trustee of the MB Mortgage Trust, the deeds were placed in escrow as part of the initial loan transaction. The defendants do not argue, and there is nothing in the terms of the separation agreement or the loan documents to suggest, that a conditional sale of the mortgaged property was intended. In these circumstances, delivery of the deeds constituted the delivery of additional instruments of security for the underlying debt. See Carey v. Rawson, 8 Mass. 159, 160 (1811); Woodward v. Pickett, 74 Mass. 617, 8 Gray 617, 618 (1857); Steel v. Steel, 86 Mass. 417, 4 Allen 417, 419-420 (1862)."

• "To the extent that language in the agreement suggests the parties intended to circumvent laws governing foreclosure that otherwise would govern the manner in which title to the properties could be transferred, the language is void as against public policy and we give it no effect. "Though it be ever so strongly expressed that the estate shall be absolute if the money is not paid at the day fixed, such stipulation would be void. It does not depend upon the intent of the parties; because it is an intent contrary to the rules of law, which the law will not carry into effect." Bayley v. Bailey, 71 Mass. 505, 5 Gray 505, 510 (1855). See, e.g., First Ill. Natl. Bank v. Hans, 143 Ill. App. 3d 1033, 1038, 493 N.E.2d 1171, 98 Ill. Dec. 150 (1986) ("parties cannot by an express stipulation in the mortgage transform the instrument into an outright conveyance upon default, [thereby] depriving the mortgagor of his redemptive rights")."

Source:

Levenson v. Feuer, 60 Mass. App. Ct. 428; 803 N.E.2d 341; (Mass. App. Ct. 2004 ) (made available online by Findlaw.com). Massachusetts equitable mortgage saturn

Usurious Loans Masquerading As Sale Leasebacks?

The following collection of cases (available online) involve potential or actual usurious loans that were disguised as sale leasebacks of personal property. While these cases arose in a context that is different from the typical foreclosure rescue "sale, leaseback, buyback, purchase option, etc." transaction (and I don't in any way suggest that there is anything "groundbreaking" or "precedent-setting" about these cases), the persuasiveness of the logic used in the following cases in analyzing and applying the prior case law of the respective states may provide some insight into how courts in those states determine when the form of a "purported sale leaseback" should be disregarded because the deal is nothing more than a contrivance used to evade usury laws (which may be an issue when the application of the equitable mortgage doctrine transforms a foreclosure rescue transaction into a secured loan), and when the form of the sale leaseback transaction should be respected as such.

Maryland

B&S Mktg. Enters., LLC v. Consumer Protection Division, Md. Ct. of Sp. App., 153 Md. App. 130; 835 A.2d 215; 2003

This case involved transactions that involved purported "sale-leaseback-repurchase" agreements involving "home appliances" that were "sold" by financially strapped consumers to a lender for $100 ("regardless of the nature, condition, or actual value of the particular item"), and then "leased back" from the lender until the consumer could afford to "buy back" the appliance. What were dubbed "rental payments" were deemed "interest payments." And those payments were paid at the exorbitant annual interest rate of 730%.

In making its decision, the court in this case relies, in part, on several past decisions of the Maryland high court, and also makes references to court decisions from other jurisdictions that similarly held that, under the facts of those cases, it was proper to declare a transaction clothed as a sale-leaseback a usurious loan.

.
Arizona

Sal Leasing Inc. v. State, 198 Ariz. 434; 10 P.3d 1221; (Ariz. App. Ct. 2000 )

The "lenders" in this case "engaged ostensibly in the purchase and lease of motor vehicles." Most of the consumers were in financial trouble and needed "Fast Cash." The transactions in question required a customer to transfer his or her vehicle to the "lender." The lender would then obtain a new vehicle title in its name. Simultaneously, the "lender" and the customer would enter into a lease agreement which allowed the customer to lease the vehicle for one year.

The lease fees amounted to 218% of the sale proceeds received by the lender's customers.

In ruling that the transactions were loans disguised as sale-leasebacks, the court made the following observations (citatations and internal quotations omitted):

• I) "The mere fact that a transaction is characterized as a lease with an option to repurchase does not save it from the operation of the usury statute. Lease-purchase contracts . . . are often used as devices to disguise usurious loans.”

• II) "In Merryweather v. Pendleton, the Arizona Supreme Court set forth six factors that should be analyzed to determine if a transaction structured as a sale with an option to repurchase is actually a security device for a loan:

• (1) the prior negotiations of the parties;
  (2) the distress of the “grantor”;
  (3) the fact that the amount advanced was about the amount that the grantor needed to pay an existing indebtedness;
  (4) the amount of the consideration paid in comparison to the actual value of the property in question;
  (5) a contemporaneous agreement to repurchase; and
  (6) the subsequent acts of the parties, as a means of discerning the interpretation they themselves gave to the transaction."

• III) "No one of these factors is conclusive, but a combination of several will go a long way in showing that an absolute conveyance was actually a security arrangement. In case of doubt, courts tend to hold an agreement to be a mortgage in order to protect all parties and prevent forfeiture of the pledged property."

The court applied the above "Merryweather factors" (which are strikingly similar to the factors used by courts in the equitable mortgage cases that have been referred to elsewhere in this blog) in their analysis of the case at bar and, using the Merryweather analysis, the court concluded that the transactions were, in reality, loans in which vehicle title transfers served as security devices, and not bona fide sales.

Among other cases cited by the court was the Arizona Supreme Court decision in De Wulf v. Bissell, 83 Ariz. 68, 316 P.2d 492 (1957), which affirmed a trial court’s holding that the sale and leaseback of real estate with an option to repurchase constituted a usurious loan. If you're in Arizona and involved in a foreclosure rescue sale leaseback arrangement, this may be an interesting case to take a look at. (You might also take a look at the Arizona high court decision in Britz v. Kinsvater, 87 Ariz. 385, 351 P.2d 986 (1960), which cites to De Wulf, and involves a usurious "sale-buyback" of an executory real estate contract).

Oklahoma

Aple Auto Cash Express, Inc. v. State ex rel. Oklahoma Department of Consumer Credit, 2003 OK 89, 78 P.3d 1231 (Ok. 2003)

The question presented in this case is whether a company's purchase of customers' vehicles at a reduced price and the subsequent leaseback to the customers as rent-to-own vehicles should be respected as such or whether such transactions be treated as loans. The Oklahoma Supreme Court held that the transactions were nothing more than disguised loans, rather than bona fide sales or rental agreements, and should be regulated as such.

This case also involved doing business with financially strapped customers needing "Fast Cash." While there was considerable discussion about the applicability of specific statutes, the Oklahoma high court stated that

• "[t]he crux of the dispute is not about statutory construction...Rather, it is about how Aple's sale and lease-back transactions should be construed; and whether the transactions, when taken as a whole, fall within the parameters of the Rental Act or whether the transactions were actually disguised consumer loans, governed by the Consumer Credit Code."

In ruling that the transactions were disguised loans, the court relied, in part, on the Arizona decision in Sal Leasing, above.

Texas

In re Steven & Vicki Foster d/b/a Cash On Wheels Action (Before the Office of Consumer Credit Commissioner of the State of Texas)

While this case is a decision of an administrative agency of the State of Texas (and without value as binding precedent), I bring it to the readers' attention and include it in this collection of cases for two reasons:

1) The case involves a "sale repurchase agreement" similar to the facts in Sal Leasing and Aple Auto Cash Express, above, in which the customer "sells" his or her automobile to Cash on Wheels for cash and simultaneously "repurchases" the same automobile on credit for a great deal more than they just received for it. The issue in the case is whether these transactions are "sales" or "loans disguised as sales" (in fact, the decision in this case cites to both of these cases),

2) The case contains the following reference to Texas sale leaseback cases involving real estate transactions (which may have value as precedent for those in Texas in the context of a foreclosure rescue, sale leaseback transaction):

• "While the facts of the following Texas cases are not as close to the facts of this case as are the facts of the out-of-state cases discussed above, the same legal principles apply under Texas case law. See, for example, Johnson v. Cherry, 726 S.W.2d 4 (Tex. 1987), Bantuelle v. Williams, 667 S.W.2d 810 (Tex.App. -- Dallas 1983, writ ref'd n.r.e.), and Sudderth v. Howard, 560 S.W.2d 511 (Tex.Civ.App. -- Amarillo 1978, writ ref'd n.r.e.). These cases hold that in Texas, the intent of the parties, rather than the name the parties call the transaction by, will govern. In these cases, the courts held that transactions which the parties called sales of real estate in the legal papers associated with the transactions were, in fact, intended by the parties to be mortgage loans rather than sales. In each case the Texas courts enforced the transaction as a loan rather than as a sale in keeping with the court's findings regarding the intent of the parties."

Georgia

A Georgia Court of Appeals found that transactions entered into by a finance business with the consumer public that were structured as sale leasebacks of personal property were loans that violated the applicable statutes, and not true sales of property.

The case, Clay v. Oxendine, 285 Ga. App. 50; 645 S.E.2d 553, (Ga. App. Ct., 1st Div., 3-27-07), involved a business with a history of being in the consumer finance business who began engaging in "sale/leaseback" transactions with consumers needing funds, whereby their consumer customers purportedly sold personal property items that they owned to the business, then immediately leased the items back from the business. Following an investigation, the State of Georgia concluded that the "sale/leaseback" transactions were nothing more than disguised, illegal payday loans.

The Georgia appellate court affirmed the trial court decision in ruling that the form of the transaction in this case was to be disregarded, finding that the State of Georgia (the plaintiff-appellee) proved its case that the purpose of the sale leasebacks were simply to disguise loans that bore a rate of interest in excess of the maximum allowed by law.

In support of its decision, the Georgia appeals court cited cases from other jurisdictions where lenders used sale leasebacks to disguise loans bearing interest in excess of the maximum allowed by law:

• Alaska - Moran v. Kenai Towing & Salvage, 523 P2d 1237 (Alaska 1974) (real estate)
• Arizona - SAL Leasing v. State ex rel. Napolitano, 10 P3d 1221 (Ariz. Ct. App. 2000) (sale leaseback of automobiles)
• Washington, D.C. - Browner v. Dist. of Columbia, 549 A2d 1107 (D.C. 1988) (real estate)

For the expanded version of this post describing the Georgia case, see Georgia Appellate Court Recharacterizes Sale Leasebacks As Usurious Loans.

.

The Equitable Mortgage Doctrine, The Truth In Lending Laws, Usury & Foreclosure Rescue

Foreclosure rescue operators are being sued by financially strapped homeowners around the country for the "sale leaseback" / "lease buyback" arrangements they are entering into. They appear to be represented by consumer protection attorneys. The approach for bringing these actions appears to be pretty straightforward. They begin by seeking to have the transaction declared to be an equitable mortgage. If successful, they seem to essentially have a "slam dunk" case as to violations of the disclosure requirements of the Federal Truth In Lending Act ("TILA") (it seems to me that the operators are in a position where they can't comply with the disclosure requirements of the TILA as part of a typical "rescue" sale leaseback / buyback arrangement without necessarily admitting that the transaction is, in fact, a secured loan; in essence, they're "damned if they do comply with the TILA, and damned if they don't").

Further, if the deal is deemed to be an equitable mortgage, the operators' "profit" or "expected profit" is immediately transformed into "interest" on the "deemed" mortgage loan, possibly subject to the Federal Home Ownership and Equity Protection Act of 1994 ("HOEPA") as well as to the civil and criminal usury statutes of your home state. (See Foreclosure Rescue Operator Violates Federal Law, State Usury Law (Tuesday, January 02, 2007), listed here at the Equitable Mortgage index of posts from this blog).

In addition, it appears that proof of actual fraud, deception, excessive overreaching, or any egregious conduct on the part of the operator in dealing with the homeowner is not necessary in having a deed be deemed a mortgage.

To the extent that there is an organized group of people, working together, that makes up a particular foreclosure rescue "operation," and the group typically does these deals as part of their normal course of business, I suppose this may expose the operator and the entire group to possible additional allegations of impropriety (ie. civil conspiracy, civil racketeering).

I have reviewed some of the actual court documents filed in a number of Federal cases from around the country involving foreclosure rescue operators, and for those of you with a strong interest in this area (attorneys, operators, financially strapped homeowners, and anyone else), I suggest that you may want to do the same.

The court documents can all be found on the Federal Courts' PACER system for electronic court filings; click here for login page; registration necessary, you can register from the login page, if needed. The identifying case information follows below.

The court documents I've looked at are from the following U.S. District Court cases:

Moore v. Cycon Enterprises, Inc., et al., Case No. 1:04-cv-800, Western District of Michigan (Southern Division) (decided as to liability and damages against foreclosure rescue operator, order on attorney's fees pending)

• Moore Complaint
• Moore Summary Judgment on Liability
• Moore Motion For Summary Judgment on Damages
• Moore Brief in Support of Motion For Summary Judgment on Damages
• Moore Summary Judgment on Damages - Order (2-9-07)
• Moore Summary Judgment on Damages - Opinion (2-9-07)
• Moore Order on Plaintiff's Attorney Fees (Pending)

Armstrong v. Real Estate International, Inc., et al., Case No. 1:05-cv-05383, Eastern District of New York (Brooklyn Division) (case settled, settlement agreement between homeowner and foreclosure rescue operator filed and made part of the record)

• Armstrong Complaint
• Armstrong Settlement Agreement
• Armstrong Settlement Letter.

Wilson v. Bel Fury Investment Group, LLC., et al., Case No. 8:04-cv-00640, District of Nebraska (Omaha Division) (case settled privately, no settlement agreement in the record)

• Wilson Amended Complaint

Perry v. Queen, et al., Case No. 3:05-cv-00599, Middle District of Tennessee (Nashville Division) (case settled privately, no settlement agreement in the record)

• Perry First Amended Complaint
• Perry v. Queen - Memorandum decision on foreclosure rescue operator's Motion to Dismiss. Court applied Tennessee's equitable mortgage doctrine in denying operator's motion to dismiss.

(revised 2-9-07)
(revised 12-10-14)

Sample Appellate Briefs:

• Opening Brief,
• Reply Brief.

(revised 11-13-15)

Equitable Mortgage Sample Complaints