Fastiggi_Motion for Sanctions_Compel Further Response

8/2/2019 Fastiggi_Motion for Sanctions_Compel Further Response

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IN THE CIRCUIT COURT OF THE 18TH JUDICIAL CIRCUIT

OF FLORIDA, IN AND FOR BREVARD COUNTY

Deutsche Bank National Trust Company as Case #2008-CA-052491

Trustee for Morgan Stanley ABS Capital IInc., MSAC 2007-NC4, Division #: O

Plaintiff,

vs.

John J. Fastiggi and Kristy K. Fastiggi, His Wife;

State of Florida Department of Revenue; Unbeknownst

Parties in Possession #2; If living, and all UnknownParties claiming by, through, under and against the

above named Defendant(s) who are not known to be

dead or alive, whether said Unknown Parties may claim

an interest as Spouse, Heirs, Devisees, Grantees, orOther Claimants,

Defendant(s)._____________________________________________/

DEFENDANT JOHN FASTIGGI'S AND KRISTY FASTIGGI'S

JOINT REPLY BRIEF IN SUPPORT OF MOTION FOR SANCTIONS FOR DISCOVERY

VIOLATIONS, OR IN THE ALTERNATIVE TO COMPEL FURTHER RESPONSES TO

INTERROGATORIES

Defendant John Fastiggi's interrogatories are virtually identical to Defendant Kristy Fastiggi's

interrogatories. They differ in one manner - John Fastiggi's interrogatories seek information regarding

the Note whereas Kristy Fastiggi's interrogatories seek information regarding the mortgage document.

Because they are similar, this joint reply brief is appropriate so as not to duplicate papers unnecessarily.

Counsel for the Fastiggi defendants had a short telephone conversation with Plaintiff's counsel

who contended that Plaintiff has the note so they don't need to provide the requested information.

Defendant's reply to the substance of the statement Plaintiff's counsel made to Defendant's counsel

Defendants Reply Brief in Support of Motion for Sanctions or in the alternative

to Compel Further Response to Defendants First Set of Interrogatories


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about Plaintiff having the note.

The interrogatories in dispute have narrowed since the filing of the Motion for Sanctions. The

dispute now focuses on four different types of interrogatories:

I. 4, 5, 6, 7, 8, 9, 10, 11, 12 and 13.

These relate to UCC issues in F.S. 673, et. seq.

II. 14, 15 and 20.

These relate to the payments made on the note relevant under F.S. 673.3021(5)

III. 17.

This relates to indemnification on the lost note count.

IV. 18 and 19.

These relate to federally required pre-foreclosure default procedures.

The first and second types of interrogatories relate directly to the statement made by the

Plaintiff's counsel about the note. The Plaintiff's 60 page Response to Defendants John Fastiggi and

Kristy Fastiggi's First Request for Production of Documents to Lassalle Bank National Association

(Hereafter, Response) was filed on January 28, 2010 and is document number 54 in the docket. As to

the specific discovery issues, this document is important to the determination of these first two types of

discovery issues.

On page 12 of Plaintiff's Response is the first page of the mortgage document. At the very top

of this document it purports to carry the Clerk of Courts recording stamp which identifies that it was

recorded on 5/3/07 in Book 5775 at page 1445. The remaining relevant documents in the Plaintiff's

Response also carry a Clerk of Court recording stamp as follows:

A. NOTE

1. Page 35 39 of Plaintiff's Response.

2. Book 6015, pages 1048 1052.3. Executed 7/18/06.

4. Payable to Lender. Lender is Old Merchants Mortgage, Inc., DBA OMMB, A New

York Corporation. (p. 1 of note)5. Not indorsed by Lender.

B. ALLONGE


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1. Page 41 of Plaintiff's Response.

2. Book 6015, page 1054.

3. Executed 7/18/06 same date as note executed by borrowers.4. Executed by Lender.

5. Payable toNew Century Mortgage Corporation.

C. ASSIGNMENT OF NOTE


2. Book 6015, page 1055.6. Executed UNKNOWN - UNDATED.

7. Executed by Lender.

8. Blank indorsement.

D. ASSIGNMENT OF MORTGAGE

1. Page 44 of Plaintiff's Response.2. Book 6026, page 2085.

3. Executed 9/10/09 after filing of Complaint in this case.

4. Executed by Saxon Mortgage Services, Inc, as the attorney in fact for New CenturyMortgage Corporation.

5. Transferee Plaintiff.

E. ASSIGNMENT OF MORTGAGE


2. Book 6044, page 534.3. Executed 7/24/06.

4. Executed by Lender.

5. Transferee New Century Mortgage Corporation.

Notable points regarding the Note, the Allonge and the Assignment of Note:

1. The Note is payable to the specifically identified person - Old Merchants Mortgage, Inc.,

DBA OMMB, A New York Corporation, and it is not indorsed.

2. The Allonge was executed the same date as the Note and falls number 2 in line behindthe Note in Plaintiff's Response.

3. The Allonge makes the Note payable to the specifically identified person - NewCentury Mortgage Corporation.

4. There are no documents (allonge, indorsement on the note or assignment of the Note)executed byNew Century Mortgage Corporation that make the Note payable to

another person.

5. The Assignment of Note falls number 3 in line behind the Note and the Allonge in


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Plaintiff's Response, and carries a higher page number in the Clerk's Official Records.

6. The Assignment of Note is undated.

7. The Assignment of Note was executed later in time than the Allonge and has no force oreffect.

8. The Assignment of Note throws into question the validity of the Allonge since they areinconsistent with each other the Allonge making the Note payable toNew Century

Mortgage Corporation and the Assignment of Note being in blank.

Notable points regarding the two Assignments of Mortgage:

1. The earliest Assignment of Mortgage was from Lender to New Century Mortgage

Corporation. (Letter E above)

2. The latest Assignment of Mortgage:

a. was created after the lawsuit was filed;b. was executed by Saxon Mortgage Services, Inc, as the attorney in fact for New

Century Mortgage Corporation;

c. does not carry a power of attorney empowering Saxon Mortgage Services, Inc., toact on behalf of New Century Mortgage Corporation.

Florida Statutes section 673, et. seq., applies to Negotiable Instruments. ( 673.1021(1)) 673.1041 defines what is required to make an instrument negotiable. Subsections (1)(a) and (1)(b) state

the 'positive' elements, and these are further explained in section 673.1081 and 673.1091, respectively.

The subject promissory note is a negotiable instrument.

The obligation of an issuer of a promissory note owes that obligation to a person entitled to

enforce the instrument or to an indorser who paid the instrument under Florida Statutes 673.4151. (

673.4121, Fla. Stat. (2009)) Florida law defines those who are entitled to enforce a negotiableinstrument as either a holder of the instrument, a non-holder in possession who has the rights of a

holder or a person not in possession who is entitled to enforce it as a lost instrument. ( 673.3011, Fla.

Stat. (2009))

Defendant's focus is on the promissory note and not on the mortgage document because in

Carpenter v. Longan, 16 Wall. 271, 83 U.S. 271, 274, 21 L.Ed. 313 (1872), the U.S. Supreme Court

stated The note and mortgage are inseparable; the former as essential, the latter as an incident. Anassignment of the note carries the mortgage with it, while an assignment of the latter alone is a nullity.

The note is the instrument of concern in all assignment situations. There is an old maxim the mortgage

follows the note. Evins v. Gainsville Natl Bank, 85 So. 659 (Fla. 1920); Case v. Smith, 200 So. 917(Fla. 1941) The note is evidence of the primary mortgage obligations or the debt. The assignment of

the note carries with it the mortgage and its rights, even though the mortgage instrument has not been

assigned either orally or in writing. Collins v. Briggs, 123 So. 833 (Fla. 1929); Miami Mtge. & Guar.Co. v. Drawdy, 127 So. 323 (Fla. 1930); So. Colonial Mtge. Co. v. Medeiros, 347 So. 2d 736 (Fla. 4

DCA 1977)


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A transfer of possession of a bearer instrument is sufficient to transfer enforceable rights in the

instrument. ( 673.2011(2), Fla. Stat. (2009)) That stands in stark contrast to a promise or order that is

payable to order, which means that it is payable to the identified person. ( 673.1091(2), Fla. Stat.(2009)) In the case of an instrument payable to a specifically identified person, transfer of possession

of the instrument along with an indorsement is necessary.1( 673.2011(2), Fla. Stat. (2009) & 673.2031(3), Fla. Stat. (2009)) Without that necessary indorsement, the transferee still receives an

enforceable interest however, it's not enforceable against the issuer, rather, the enforceable interest isthe specifically enforceable right to the unqualified indorsement of the transferor. 2 ( 673.2031(3), Fla.

Stat. (2009))

The unindorsed promissory note, being a negotiable instrument payable to a specifically

identified person (New Century Mortgage Corporation) is being held by Plaintiff who attempts to

enforce it on behalf of an entity that is notNew Century Mortgage Corporation. Defendant haschallenged the Plaintiff's standing in the Answer as affirmative defense numbers 16, 17 & 19. There are

two documents that Plaintiff relies on to establish standing, both of which are questionable:

1) The Assignment of Note which is undated indorsed in blank contradicts the Allongewhich is payable toNew Century Mortgage Corporation. The Allonge, having been

executed the very date the Note was executed and which was filed in the Official

Records prior to the Assignment of Note appears to have been executed prior to theAssignment of Note and so the Assignment of Note would have no force or effect; and,

2) The most recent Assignment of Mortgage was created after the lawsuit was filed by

Plaintiff. There is no power of attorney that demonstrates that Saxon Mortgage Services,Inc. was the attorney in fact forNew Century Mortgage Corporation, nor doesNew

Century Mortgage Corporation execute the document, resulting in a nullity as per

Carpenter v. Longan and its progeny.

Defendant is entitled to discovery to challenge the Plaintiff's standing. Because the Allonge and

the Assignment of Note are contradictory, and both purport to originate from the Lender, the Defendant

is entitled to now question which, if any, of the two documents is the genuine article in an attempt to

1 An "indorsement" means a signature, other than that of a signer as maker, drawer, or acceptor, made

on an instrument for the purpose of negotiating the instrument. ( 673.2014(1), Fla. Stat. (2009))

2 Addressing the same issue, the Court in the case of In re Kang Jin Hwang, 396 B.R. 757, 763

(Bankr.C.D.Cal., 2008) stated The transfer of a negotiable instrument has an additional

requirement: the transferor must indorse the instrument to make it payable to the transferee. In

the case of In re Wilhelm, Case No. 08-20577-TLM (Bankr.Idaho, 2009) the Court recognized that ifthe note instrument, by its terms, is not payable to the transferee, then before the transferee can

enforce it the transferee must account for possession of the unindorsed instrument by proving thetransaction through which the transferee acquired it. (At page 18) The Court in In re Carlyle, 242

B.R. 881 (Bankr. E.D.Va., 1999) came to the same conclusion at page 887 of the Opinion.


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deraign title to both the promissory note and the mortgage document. The requested discovery seeks to

establish the chain of title of the Note and Mortgage.

Documentary support is necessary to show whether the Lender actually delivered the subject

promissory noteNew Century Mortgage Corporation and whetherNew Century MortgageCorporation delivered the promissory note to Plaintiff. That is necessary to demonstrate that the

promissory note was transferred with the purpose of giving the Plaintiff and its predecessor the right toenforce it. In the case of In Re Hayes, 393 B.R. 259, 266-268 (Bankr. D. Mass. 2008), the movant

seeking relief from stay failed to show that it ever had any interest in the note at issue. In that case the

court found the movant lacked standing altogether because it failed to show that the note was evertransferredto it, and thus had no rights of its own to assert.

Having a note in one's possession is not synonymous with transfer.

Additionally, interrogatory number 6 addresses whether the Plaintiff is a Holder in Due Course

under 673.3021(1), Fla. Stat. (2009). If Plaintiff is not a holder in due course, then the defensesDefendant raises apply to the Plaintiff. Interrogatory numbers 7, 8, 9, 10 and 12 address whether theNote and Mortgage were part of a bulk transfer pursuant to 673.3021(3)(b), Fla. Stat. (2009), which

provides that holder in due course status is lost in a bulk transfer.

There were no objections to interrogatory numbers 4, 5 & 11, so those should have been

answered without question.

Defendant has been to the Court twice previously in an attempt to enforce discovery. The Court

previously granted both of Defendants requests to compel, and the court reserved the right to attorney

fees.

III

REQUEST

WHEREFORE, Defendant John Fastiggi moves the Court for the entry of an order against

Plaintiff, Deutsche Bank National Trust Company as Trustee for Morgan Stanley ABS Capital I Inc.,

MSAC 2007-NC4, as follows:

a. The establishment of specific facts that Plaintiff:

I. Is not an owner and holder of the subject promissory Note and Mortgage.II. Is not authorized to enforce the subject promissory Note and Mortgage.

b. Refusal to allow the Plaintiff to oppose all of Defendants claims and defenses.

c. Refusal to allow Plaintiff to support its claims under Count 1 and Count 2.d. Striking Plaintiffs Complaint.

e. Entry of a dismissal with prejudice.

f. Awarding fees and expenses.


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i. Other sanctions as deemed appropriate under the circumstances.

Alternatively, to compel further responses to interrogatories, and award fees and expenses.

February 12, 2010

______________________________

George Gingo, FBN 879533P.O. Box 838

Mims, FL 32754

321-264-9624 Office321-383-1105 Fax

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true copy of the foregoing has been furnished by U.S. Mail, this

12th day of February, 2010, to Kimberly Anne Humphrey, Shapiro & Fishman, LLP, 10004 N. Dale

Mabry Highway, Suite 112, Tampa, FL 33168.

______________________________George Gingo, FBN 879533