Here’s an A.D. 2008 Ohio case that offers an almost spectacular degree of insight into Federal Rule of Civil Procedure 17(a), the concept of standing, and why many of the mortgages in this country can’t be legally foreclosed. As usual, my comments are [bold, bracketed blue]. “You can follow the links to a pristine copy of the case.)
Wells Fargo Bank, N.A. v. Byrd (Ohio 2008)
Docket number: C-070889; C-070890
Permanent Link: http://vlex.com/vid/wells-fargo-bank-n-v-byrd-42545339
Id. vLex: VLEX-42545339
PROCEDURES/RULES: The trial court properly dismissed a foreclosure complaint that was not filed by the real party in interest: At the time the complaint was filed, the plaintiff did not own the mortgage that was the basis for the suit, and its acquisition of the mortgage by assignment after the suit had been was commenced did not, standing alone, cure the initial jurisdictional defect; but the dismissal should have been entered without prejudice. The trial court lacked the authority to sanction the plaintiff’s law firm by requiring it, in any future foreclosure action, to present additional documentation to demonstrate that it would, in fact, be representing a real party in interest
[Cite as Wells Fargo Bank, N.A. v. Byrd, 2008-Ohio-4603.]
IN THE COURT OF APPEALS FIRST APPELLATE DISTRICT OF OHIO HAMILTON COUNTY, OHIO
WELLS FARGO BANK, NATIONAL :
APPEAL NOS. C-070889 ASSOCIATION, ON BEHALF OF THE
C-070890 CERTIFICATE HOLDERS OF :
TRIAL NO. A-0700643 MORGAN STANLEY ABS CAPITAL, IN
TRUST 2005-WMC5 MORTGAGE :
O P I N I O N.
SERIES 2005 C/O COUNTRYWIDE :
THE LAW OFFICES OF JOHN D.
CLUNK CO., LPA, :
GLORIA BYRD :
ELLSWORTH BYRD, :
AUDITOR OF HAMILTON COUNTY :
TREASURER OF HAMILTON :
Civil Appeal From: Hamilton County Court of Common Pleas Judgment Appealed From Is: Affirmed in Part as Modified in Part and Reversed in Part
Date of Judgment Entry on Appeal: September 12, 2008
The Law Offices of John D. Clunk, Jason A. Whitacre, Michael L. Wiery, and Laura C. Landor, for Appellants, Legal Aid Society of Southwest Ohio, Noel M. Morgan, and Elizabeth Tull, for Appellees.
We have removed this case from the accelerated calendar.
[DINKELACKER, DINKELACKER! SISS, BOOM, BAH!
DINKELACKER, DINKELACKER! RAH, RAH, RAH!
(Sorry—I just couldn’t resist.)]
Since plaintiff-appellant Wells Fargo was not a real party in interest at the time it filed suit in this foreclosure action, the trial court properly dismissed the case. But the dismissal should have been without prejudice. Further, the trial court lacked authority to sanction counsel by requiring counsel to adhere to additional pleading requirements in future cases.
Putting the Cart Before the House
On January 23, 2007, Wells Fargo filed a foreclosure action against defendants-appellees Gloria and Ellsworth Byrd. Wells Fargo claimed that it was “the holder and owner of a certain promissory note” and “the owner and holder of a certain mortgage deed, securing the payment of said note.” But both the note and the mortgage identified in the complaint named WMC Mortgage Corp. as the lender.
[First, notice that the mortgage is a security for the Note. This implies that the “real party in interest” might be required to “hold and own” both the Note and the Mortgage. After the case was filed, Wells Fargo claimed to have obtained both the Note and the Mortgage, but I’m doubtful whether this was ever proven. Apparently, a plaintiff might have to “acquire,” “hold” and “own” not only the Mortgage, but also the Note the Mortgage was intended to secure, before that plaintiff could truly claim to be the “real party in interest”.
In this case, Wells Fargo claimed to hold and own the note and mortgage, but the actual note and mortgage named WMC Mortgage as the true owner of the note and mortgage. This is the crux of the entire case. Wells Fargo tried to foreclose on the Byrd’s home based on a mortgage that does not have Wells Fargo’s name on it. Because Wells Fargo’s name is not on the mortgage and there was no other evidence that the mortgage had been assigned to Wells Fargo at the time when the foreclosure suit was filed, Wells Fargo was not a “real party in interest” in the property, had no “standing” to foreclose and the foreclosure was therefore dismissed.]
Wells Fargo filed a motion seeking summary judgment. Attached to the motion for summary judgment was an “Assignment of Note and Mortgage” that acknowledged that WMC had sold, assigned, transferred, and set over the mortgage deed and promissory note to Wells Fargo.
[The list “sold, assigned, transferred” and “set over” suggests that an assignment that did not do all four (and there could be more) of those acts might be legally incomplete.
That, in turn, suggests the possibility that the original owner/holder of the complete mortgage deed might have “sold” mortgage “derivatives” such as one “security” for the “sale” of the mortgage deed, another for the “assignment” of the mortgage deed, a third for the mortgage deed “transfer” and a fourth for a mortgage deed “set off”. Alternatively, the original owner/holder of the mortgage deed might’ve sold purported “mortgage deeds” that only “sold and assigned” or only “transferred and set over” the mortgage deeds.
If all four steps (sale, assignment, transfer and “set over”) are required to lawfully move a mortgage deed from the original party in interest to a new party in interest, then by dividing those four steps among two or more instruments, then two or more “partial” “mortgage deeds” might be created—and sold.
The central idea is that one “real party in interest” cannot create a second “real party in interest” without a legitimate assignment of ALL Right, Title and Interest in a particular property—and must probably achieve that assignment by a very exacting (common law?) procedure. If any element of right, title or interest is not conveyed, you might not have created a new “real” party in interest.
On the other hand, I don’t doubt that it’s legally possible to arbitrarily divide the rights, titles or interests to a particular property and assign some of those rights, title or interests and others to someone else and even retain a few for yourself. If that weren’t so, there’d be no legal foundations for trusts (which are based on dividing perfect title into a legal title for the trustee and an equitable title for the beneficiary).
Therefore, it’s undoubtedly lawful for one entity that “really” holds all or even some of the rights, titles and interests to a particular property to assign some of whatever he owns and/or holds to some second party. And when anyone comes to own even part of the rights, titles and interests to a particular property, I suppose that such person can be described as “a party in interest”. I.e., he has some interest in the particular property.
But I am increasingly suspicious that while there may be several “parties in interest” who own and/or hold several different “interests,” there can be only one “real party in interest”—the man who owns and holds ALL rights, titles and interests to the particular property.
If that suspicion could be proved valid, then NO ONE could probably initiate suit as the “real party in interest” unless the person held all “rights, titles and interests” in a particular property.
Alternatively, perhaps even “real party in interest” does not reflect perfect title to a property. Does “real party in interest” implicate owning all the rights and titles (as well as interests) in a particular property? Or does the “real party in interest” hold only the primary “interests” in the property? I suspect that the “real party in interest” may be nothing more than the beneficiary who owns and holds the pure equitable title to a property. It may be that the phrase “real party in interest” is synonymous with “beneficiary” in a trust relationship.
If so, the “real party in interest” may own/hold equitable title to the property, but who holds the LEGAL title? Gov-co? The Federal Reserve System?
This makes some sense since most courts appear to be acting in equity. Equity is invoked by beneficiaries. Equity exists where legal title does not. Where the legal title is invoked, the case should go to law.
If so, then an individual who truly held “all rights, titles and interests” to a particular property would not only have a superior claim to that of a mere “real party in interest,” but would have a claim that would have to be decided at law rather than in equity.
One other point: The words in the phrase “all right, title and interest” (in a particular property) are singular; the words in the phrase “all rights, titles and interests” are plural; the words in the phrse “all rights, title and interests” are mixed—some plural, some singular. Which phrase is correct? Which is mistaken?
The singular (“all right, title and interest”) implies a unification of each of the subsets (“rights,” “titles” and “interests”) under a single complete heading. That sounds pretty powerful, but I’m not sure that it’s true. For example, to claim “all title” to a particular property implicitly asserts ownership of the one perfect title to the property, but also implicitly denies that existence of the legal and equitable “sub-titles” to that property.
On the other hand, if you claimed “all rights, titles and interests” in a particular property, you would be recognizing several rights, several titles and several interests and alleging that you held them all as a kind of “royal straight flush”. That might be a stronger claim (if you could prove it) than merely claiming to hold “all right, title and interest” (singular).
The “plural” claim is a little ambiguous in that claiming to own/hold all “rights, titles, and interests” is not time-specific. Yes, you might hold all rights, titles and interests today—but you clearly didn’t hold all of those same rights, titles and interests as they existed 100 years ago. This “issue” (if it even deserves to be considered a legitimate “issue”) is largely semantic.
Still, I suspect that the strongest statement might be a claim to “own and hold all current rights, titles and interests”—that would pretty clearly asset one’s total ownership of a particular property. In theory, such claim would implicate a court of law, but where can we find one? More likely, if you are claiming ALL rights, titles and interests in a particular property, you are claiming them “in rem” and the place to so is IN ADMIRALTY. Schedule an admiralty hearing; send notice to any person known to claim any right/title/interest in a particular piece of property; place a public notice in the newspaper for several weeks/months prior to the hearing to invite all who claim any right, title or interest in a particular property to appear at that hearing to give evidence for their claims. Then have the hearing and if you did it exactly right, you might be able to compel the admiralty court to declare “in rem” (against the whole world) that you “own and hold all current rights, titles and interests” to the particular property.
Politically speaking, the Admiralty court would be very reluctant to declare that any of us held “all rights, titles and interests” to a particular property. Such would constitute a declaration of allodial title and probably earn the judge an opportunity to resign his job or be shot. Still, if you could dot all your “i’s” and cross all your “t’s,” you might be able to get an Admiralty court to concede you hold perfect title—largely because gov-co would be unlikely to appear on the record to claim they hold legal title.]
The assignment was dated March 2, 2007–over a month after the complaint had been filed.
[Timing is the first issue. If the assignment had taken place before the case was filed, Wells Fargo’s motion for summary judgment might have been granted.
But even then, if Wells Fargo could only produce such assignment dated, say, one month before the foreclosure case was filed, the property owner could then demand to know by what right Wells Fargo had been collecting mortgage payments for the several previous years. Realistically, the “assignment” or rights would have to preclude the current plaintiff’s collection of mortgage payments. Without such assignment, the collection of mortgage payments would’ve been FRAUDULENT and the current property holder/mortgagee could demand either tha all previous payment be returned to the mortgagee or that they be disgorged to the “real party in interest” who held rights to those payment until that right was assigned to the new plaintiff.
Thus, once the question of “assignment” comes up, the existing plaintiff can be caught between a rock and a hard place. If the assignment was not prior to filing the foreclosure case, the foreclosure case must be dismissed. If the assignment was not prior to collecting the first mortgage payment, all of those payments might be disgorged to the original “real party in interest” or the mortgagee. More, that collection process may have been based on fraud. If the collection process had started over a year earlier, it could be grounds for a RICO suit.
The lawyers who initiated the current foreclosure on behalf of the purported (but false) “real party in interest” might be charged with perpetrating a “fraud on the court” and/or barratry.
Once you begin to discover who is “really” the “real party in interest,” all sorts of interesting information and liabilities might appear.
Another important point: even though Wells Fargo received a post-filing “assignment” of rights to foreclose, that “assignment” was not equivalent to the Rule 17(a) “ratification of commencement of action”. These two instruments (“assignment” and “ratification”) are merely different, they may be mutually exclusive. The “assignment” conveys the right to not only foreclose but also collect the mortgage payments. The post-filing “ratification of commencement” presumes that the party ratifying is the real party in interest. Once the rights have been assigned, the party first deemed to be “real party in interest” forfeits that status and can no longer “ratify the commencement of an action” by some other “real party in interest”.
On the other hand, once the existing plaintiff receives a “ratification of commencement” from the original, ”real party in interest,” the current plaintiff implicitly concedes that the proceeds from the existing lawsuit (and probably all previously collected mortgage payments plus interest) are due to the “real party in interest”.
This places the existing plaintiff in a seemingly untenable position. Once the plaintiff gets the “ratification of commencement” from the “real party in interest,” the plaintiff would not only lose the right to the property being foreclosed upon, but also lose whatever previous mortgage payments had been collected. The only thing the existing plaintiff might retain is the right to pay the attorney fees for prosecuting a foreclosure on behalf of the “real party in interest”. Heh, heh, heh.
The foreclosure defendant might even spice things up a bit by making a motion to the court to 1) decide if previously collected mortgage payments should go to the real party in interest or back to the mortgagor; 2) declare that title the foreclosed property should revert back to the “real party in interest” rather than the current plaintiff, etc..
If this analysis is roughly correct, once you can show that the plaintiff in a foreclosure is not the “real party in interest,” that plaintiff is skuh-rooood—and big time. The plaintiff will not only lose his ass by forfeiting his claim to all previously-collected mortgage payments and right to the property if it is foreclosed, he and his attorneys might even be subject to criminal prosecution for fraud.]
“The case was referred to a magistrate who entered summary judgment for Wells Fargo. The trial court sustained the Byrds’ subsequent objections to that decision. The trial court then took two additional steps not requested by the Byrds: (1) it dismissed the case with prejudice, and (2) it ordered the law firm representing Wells Fargo, appellant Law Offices of John D. Clunk Co., LPA, to submit “proof that their client is, in fact, a real party in interest at the time of the filing” of any future foreclosure complaints that the firm might file.”
[I’ll bet that the appellate court overturns the dismissal with prejudice and/or demand that the law firm show evidence of “real party in interest” in future cases based on the fact that the mortgagee did “not request” such actions.]
“Wells Fargo requested findings of fact and conclusions of law. In response, the trial court issued an entry titled “Findings of Fact, Conclusions of Law, and Amended Judgment Entry” in which it said that the dismissal was “not a dismissal on the merits.” The trial court explained the Clunk firm’s future obligations to the court by stating that “at the time of the filing of a foreclosure action, [the Clunk firm must] file documentation showing that their client is the real party in interest as of the date of the filing of the lawsuit.”
[Apparently, the court does not wish to be further defrauded or implicated in fraud committed by the law firm.]
“Both Wells Fargo and the Clunk firm have appealed. Wells Fargo argues that (1) the trial court erred in dismissing the case with prejudice on jurisdictional grounds [no real party in interest = no subject matter jurisdiction]; (2) the trial court erred in dismissing the case without notice; (3) the trial court should have adopted the decision of the magistrate granting its motion for summary judgment; (4) the trial court misapplied Civ.R. 17; (5) the trial court lacked authority to convert its original dismissal with prejudice to a dismissal without prejudice; and (6) the trial court improperly used its subsequent entry to modify the substance of its prior decision. [Falsified the record/docket.] The Clunk firm argues, in two assignments of error, that the trial court improperly sanctioned it.
“The Dismissal Issue: To Dismiss or Not
“There is little case-law guidance on the issue whether Wells Fargo, which was clearly not a real party in interest when the suit was filed, could later have cured the defect by producing an after-acquired interest in the litigation. We hold that the defect could not have been cured in that way.
Civ.R. 17(A) says that “[e]very action shall be prosecuted in the name of the real party in interest. * * * No action shall be dismissed on the ground that it is not prosecuted in the name of the real party in interest until a reasonable time has been allowed after objection for ratification of commencement of the action by, or joinder or substitution of, the real party in interest. Such ratification, joinder, or substitution shall have the same effect as if the action had been commenced in the name of the real party in interest.”
“A party lacks standing to invoke the jurisdiction of a court unless he has, in an individual or a representative capacity, some real interest in the subject matter of the action.1”
[OK—the plaintiff need not hold “all” real interest in a property, but the plaintiff must hold “some” real interest.
This raises the question of which “real interest(s) does the particular plaintiff hold—and which “interests” does it not hold. Once the plaintiff admits that it doesn’t hold all interests, it’s claim to foreclosure or cash becomes clouded. Who/what hold the other “real interests”? Should thel the proceeds of the suit be divided among all such other holders of “some real interests”? By what ratio should those proceeds be divided? Can the foreclosure suit proceed without the involvement of ALL “real parties in interest”?
What happens if it turns out that the defendant (as the person who created the credit that was originally loaned or as one of the people of The State of Texas or as a citizen of “this state”) also held “some interest” in the property? If the defendant were shown to be one of the persons holding “some real interest” in the property in question (that was based on something other than the mortgage or note), could the suit continue against one “real party in interest” by another “real party in interest”?
Once the issue of “real party in interest” is raised, the issue can become extremely complex in a very short period of time.]
“The Eleventh Appellate District has held that “Civ.R. 17 is not applicable when the plaintiff is not the proper party to bring the case and, thus, does not have standing to do so. A person lacking any right or interest to protect may not invoke the jurisdiction of a court.”2
[Without knowing the context, the previous sentence is extremely (even suspiciously) ambiguous. I presume that the court means the plaintiff must have at least one right or interest to give the plaintiff standing to invoke the court’s jurisdiction. I.e., if the plaintiff has absolutely not one right or interest whatsoever, his suit must be dismissed for lack of subject matter jurisdiction.
But the court’s language could equally be interpreted to mean that if the plaintiff lacks just one of the several rights or interests, he might not be entitled to file the suit. I.e., suppose I owned just one share (interest) in a corporation but didn’t own the other 2 million shares. Do I have a right to sue to the corporation if I don’t own all (or at least a majority?) of the “interests” (shares) in the corporation?
Likewise, if I hold only some interest(s) in a property, can I sue for foreclosure without the express acquiescence of the other parties who hold other rights, titles or interests in that same property?
The idea of “standing” is a fascinating and complex subject that might be an “Achilles heel” for many modern lawsuits. Insofar as most property is entangled in a trust relationship, can any beneficiary truly sue without permission or assistance of the actual trustee? Yes, an attorney may occupy the role of the beneficiary’s fiduciary in a particular case, but who is the real trustee who holds real legal title to the property in question? Can a suit proceed on the mere say-so of a beneficiary against a third-party, non-fiduciary without the “ratification” of the true fiduciary?
For example, suppose the Federal Reserve System and/or Government of the United States held legal title to virtually all the land within The United States of America. Could some bank that lent credit on a parcel of land sue the borrower-beneficiary who held that land without some sort of permission from the “United States” or Federal Reserve? Is that permission found in the various statutes of the United States which authorize individuals to sue on behalf of the United States??]
“The court also noted that “Civ.R. 17(A) was not applicable unless the plaintiff had standing to invoke the jurisdiction of the court in the first place, either in an individual or representative capacity, with some real interest in the subject matter. Civ.R. 17 only applies if the action is commenced by one who is sui juris or the proper party to bring the action.”3
[I gotta read that case. Even if the plaintiff has standing, if he lacks “capacity” the case must be dismissed. Conversely, even if the plaintiff has “capacity” (and I’ll bet he usually does), if he lacks “standing” the case must apparently also be dismissed.
Two BIG questions for your adversary:
Q. What is your standing (interest) to bring this case?
Q. What is your capacity—individual or representative—to bring this case?]
“The Twelfth Appellate District agrees. In 2007, the court held that “[t]he `real party in interest is generally considered to be the person who can discharge the claim on which the suit is brought * * * [or] is the party who, by substantive law, possesses the right to be enforced.’ “4
[Say whuut? “Generally considered” sounds discretionary; this is not an absolute truth.
More, I have no idea what the court means by “discharge the claim”. If only the “real party in interest” can “discharge the claim” and the plaintiff made the claim, then if the plaintiff can’t “discharge the claim” then the plaintiff is not the “real party in interest”.
I understand the word “discharge” to suggest an ability to deal with a debt by means other than payment with lawful money. Thus, I “discharge” my debts with legal tender (Federal Reserve Notes) but I do not pay my debts with lawful money (gold or silver coin).
So, if someone makes a claim against me, I presume that I alone can “discharge” that debt. If I don’t “discharge” the debt by handing over some FRNs, the plaintiff will sue me as a defendant. Thus, I would expect that only a defendant can “discharge a claim”.
But in the previously reported text, the court ruled that that only the “real party in interest” (the presumed plaintiff in a particular case) has the power to “discharge the claim”.
Makes me laugh. The 12th Appellate Court has made a declaration that’s so contrary to common understanding, that I am not merely confused, I am delighted. When I get my hands on that case, the court might teach me something profound. I love it.
If “the ‘real party in interest’ is generally considered to be the person who can discharge the claim on which the suit is brought” and that “person” is not the nominal defendant, who could it be? Is “ADASK” rather than “Adask” the person who can discharge the claim—or is it vice versa? Is the suit brought in “Adask’s” name against “ADASK”?? Makes no sense.
Or is the “person” who can “discharge” virtually all claims for legal tender the Federal Reserve System? Whoever the “person who can discharge the claim” may be, so long as he/it is other than the purported defendant, we have another mystery that “makes my heart soar like an eagle”. Whoever the “person who can discharge claims” may be, he/it sounds generic and all-pervasive. He/it is the “real party in interest”—perhaps as the public trust, maybe as the implied charitable trust of “this state,” maybe as the Federal Reserve System if the property in question was paid for with Federal Reserve Notes, etc..
Ohh, goody, hmm? Another mystery—what fun!
But bear in mind that the court described two persons who were, or were “generally considered” to be, the “real party in interest”:
A person able to “discharge the claim” was “generally considered to be a “real party in interest”; and,
2) “the party who, by substantive law, possesses the right to be enforced.”
Note that Item #1 describes a “person” while Item #2 describes a “party”. I believe that “party” indicates someone who is part of a particular, private relationship. If so, the “person” in Item #1 may be an “inherent” “real party in interest,” without regard to some private relationship. Again, this suggests some generic and omnipresent in the character of the “person” able to “discharge the claim”.
Item #2 sounds as if it could describe the beneficiary of a private trust relationship (express or implied) wherein the defendant was deemed to be a fiduciary. I’m not sure what “by substantive law” means, but “possesses the right” at least sounds like it might implicate an equitable right of possession.
For me, the two descriptions suggest that the “real party in interest” is either 1) “generally considered” to be an unseen “mystery person” who has great, almost universal powers to “discharge claims”; or 2) a private party who has some private (probably equitable right) to make claim against the defendant.
For me, the problem is this: I understand the defendant to be the entity that’s supposed to “discharge” the plaintiff’s claim—so how could the “real party in interest” also be a person who can “discharge” the claim? I know this makes sense, but I do not yet see what that “sense” may be.
How can both the defendant and at least a potential plaintiff both be able to “discharge” the same claim?
I’ve been guessing that the “mystery person” able to discharge the claim might be the Gov-co or the Federal Reserve or some entity other than the purported defendant. But what if the court describes the same individual in both Items #1 and #2? What if the defendant “party” in Item #2 were to counter-claim against the plaintiff? Under the counter-claim does the defendant-party in Item #2 become the plaintiff-person “real party in interest” in Item #1??
But, assuming I counter-claimed as a separate and independent “person” (rather than as a defendant “party” to the original claim), how is it that I could “discharge” the original claim in some manner other than the “discharge” that I might effect as the defendant-party? Are there more than one kind of “discharge”? What advantage might exist for me to “discharge” the plaintiff’s claim as an Item #1 “person” rather than as an Item #2 “party-defendant”?
Is it possible that the man “Adask” can discharge as a “person” under Item #1 while the entity “ADASK” must discharge as a party and with legal tender?
Maybe, by counter-claiming and changing my status from that of defendant-party-fiduciary to plaintiff-person-beneficiary, I could add other counter-plaintiffs to the suit. One of the alternatives under Rule 17(a) is for the plaintiff to “join” or “substitute” the “real party in interest” into the suit. What if I counter-claimed and joined (or even substituted) the Federal Reserve System as co- or sole plaintiff in my counter-claim. This is a fantastic notion, but if it could be achieved, it’s obvious that the Fed could “discharge” any claim that came to court.
There is a fascinating mystery here. I doubt that I’ll resolve until I at least read the cases quoted and cited by the 12th Appellate Court.
But it crosses my mind that maybe, maybe the answer is more simple. Maybe the plaintiff is the only party who can “discharge” the claim. Maybe there’s no mysterious “person” in the background (besides the plaintiff) who can also discharge the debt. Maybe the plaintiff alone has the right and power to demand that the debt be either paid (with lawful money) or merely discharged with legal tender (FRNs).
In other words, maybe, maybe the plaintiff has the option to choose to demand payment or accept a mere discharge of a particular claim. IF that were true then, in theory, we’d each have the right to choose in all of our transactions whether we would 1) demand only gold and silver as payment for the debts we were owed; or 2) allow a mere “discharge” of debts due by means of legal tender (paper dollars).
This suggests that a “claim” should be paid but could be discharged and the plaintiff had the right/power to decide if he would give the insolvent defendant a “break” and allow him to discharge (rather than pay) his debt.
That’s all speculation, of course. I wouldn’t necessarily bet that the plaintiff has a power to demand payment but allow discharge of a claim. But these kinds of possibilities deserve consideration to sharpen our perception of the seemingly mysterious power to “discharge claims”. ]
“Unless a party has some real interest in the subject matter of the action, that party will lack standing to invoke the [subject matter] jurisdiction of the court. The court concluded that, “[i]n a breach of contract claim, only a party to the contract or an intended third-party beneficiary of the contract may bring an action on a contract in Ohio.”5
[By referencing the “contract claim” the court might have implicitly contrasted “contract” to “tort”. Could that distinction apply to Items 1 & 2? Is Item #1 based on tort while Item #2 is based on “contract” (or trust) relations?]
“Such a rule would seem to be in the spirit of Civ.R. 17, which only allows a plaintiff to cure a real-party-in-interest problem by (1) showing that the real party in interest has ratified the commencement of the action, or (2) joining or substituting the real party in interest.6
“Since WMC was not joined or substituted in this case, the only argument Wells Fargo could have made was that WMC had ratified its actions.
“Ratification is a way that an agent can bind a principal.7 But ratification will not apply when the actor is not acting as the agent of the principal.8
[1. “Principal” = “real party in interest”.
2. Even if an attorney attempts to foreclose on behalf of Wells Fargo and later secured “ratification of commencement” from WMC (the real party in interest), that ratification won’t be valid unless the attorney was, in fact, first an AGENT of the “real party in interest”. No ratification for non-agents.
Thus, it appears that the attorney for Wells Fargo (already shown not to be the real party in interest) would have to first approach WMC (the real party in interest) for a “power of attorney” to represent WMC as its agent. Then—once it was established that the attorney was now agent for WMC—the attorney-cum-agent could ask that its new principal “ratify” the commencement of the suit previously begun by the attorney in the name of Wells Fargo—before the attorney became agent for WMC—but now in the name of WMC.
I don’t think so. Here’s the problem:
Can an attorney approach a particular principle with an invitation to hire him as his attorney and then sue someone else? Doesn’t the attorney have to wait until he’s approached by a client before he can ask for a power of attorney and right to represent the client? If an attorney is hired by and fills suit in the name of some entity (like WMC) that’s not a real party in interest isn’t that barratry or champerty or some such (stirring up lawsuits without cause)? Could it be fraud? If a non-agent attorney files a suit and then goes to the real party in interest to seek 1) status as agent; and 2) ratification of commencement—hasn’t that attorney engaged in barratry by filing the suit without subject matter jurisdiction?
This whole thing makes me grin, grin, grin.
I’m beginning to see that Rule 17(a) may have been devised as means to protect attorneys who routinely file suits without authority of the real party in interest. But even the Rule 17(a) device may be only a kind of bluff to bamboozle the unwitting defendant.
If the attorney must truly be an “agent” of the “real party in interest” before he files a lawsuit, but files on behalf of some entity that is not the “real party in interest,” then even a Rule 17(a) ratification won’t suffice to authorize the suit. At least not if the defendant understands the game.
Of course, how many defendants really understand the game? One in 10,000? One in a million?
But IF—as the court seems to declare—the attorney must actually be “agent” for the real party in interest “principal” before the attorney can even apply for a “ratification of commencement,” any attorney who initiates a case for a plaintiff that is not the “real party in interest” from the git-go is at least screwed and might even be subject to criminal liability for fraud, barratry, etc.
Remember The Dukes of Hazard? Remember Boss Hog and his “deppity”. I cain’t recall the “deppity’s” name, but I’m laughing just like him. I have a lot to learn and I could be making some big mistakes, but for the moment, this “real party in interest” stuff is almost too much fun.
And, for the sake of argument, let’s suppose that you’re a defendant and you not only know that the party suing you is not real party in interest, but you also know who the real party in interest is—or even might be. And what if, when a suit was initiated against by some phony “party in interest” you sent a notice to all the possible “real parties in interest” that you felt you were being defrauded by the existing plaintiff and his attorney? What if your notice advised all of those possible “real parties in interest” that if they entered into an agreement with the existing plaintiff and/or its attorney in this matter, their agreement might be construed as evidence of their conspiring with the existing attorney deprive you or your rights under color of law, commit fraud, or perhaps even engage in the sort of racketeering acts prohibited under the RICO laws?
You’d want to think this through before you sent any notices. You wouldn’t want to send a notice that might be construed as a threat or an attempt to obstruct justice.
But what would happen if such notice could be properly drafted and sent to all possible “real parties in interest” before the opposing attorney even tried to contact the “real party in interest” to secure 1) status as agent; and 2) a ratification of the commencement of the action? It’s possible that the real party in interest would cover its own butt and refuse to in any way assist the existing attorney. I.e., the attorney would be screwed.
However, to be safe and avoid any possible adverse ramifications from sending notice to the existing “real party in interest,” you might want to just sit back and watch to see if the “real party in interest” would conspire with the existing attorney to give him a ratification without a previous power of attorney. If they real party in interest conspires with the existing plaintiff’s attorney, the real party might wind up as a co-defendant in a Title 42 or RICO suit. If the real party in interest had “deep pockets,” that might not be a bad thing.]
“In this case, Wells Fargo admitted to the trial court that it was not the real party in interest when the suit was filed. Wells Fargo filed suit on its own behalf and acquired the mortgage from WMC later. It was not acting as WMC’s agent.”
[OK—I made a mistake. I previously assumed that the attorney for Wells Fargo must seek to be confirmed as the agent of the real party in interest/principal WMC. But noooo. I see now that the Wells Fargo corporation itself must be confirmed as the agent for WMC “principal” before the attorney for Wells Fargo can approach WMC for a “ratification of commencement”.
It just gets better and better. How th’ heck could Wells Fargo Inc. claim to be mere “agent” for WMC Inc. if Wells Fargo also claimed to have purchased the property from WMC? If Wells Fargo took possession of the property from WMC as mere agent for WMC, then it’s not only true that Wells Fargo never owned any right, title or interest to the property—it’s also true that we might ask if WMC had any clearer title to the property than Wells Fargo. I.e., before WMC allegedly “sold” the property to its “agent” Wells Fargo, WMC had to purchase the property from some earlier owner. How did the purported sale of property from this earlier owner to WMC differ from the purported sale of the same property from WMC to its “agent” Wells Fargo? If there were no substantial difference, then even WMC might be only “agent” for the earlier seller (real party in interest). So, who/what would be the real “real party in interest”?
And then, if WMC only appeared to sell the property to Wells Fargo—but in fact only transferred the property to Wells Fargo as agent—how close is that to fraud? Such transfer would be certainly confusing and arguably deceptive.
The lesson, so far, is unmistakable: If a defendant can properly raise the issue of “real party in interest,” the plaintiff is screwed, screwed, screwed.
And pay close attention to Texas Rule of Civil Procedure #13 (“Effect of Signing of Pleadings, Motions & Other Papers; Sanctions”) or the equivalent rule in your state. It defines the penalties imposed on anyone (including lawyers) who knowingly signs a fictitious or otherwise groundless pleading.
Again, this is almost tooooo good.]
“There was no evidence that WMC had “ratified” the commencement of the action—only that it had sold the mortgage to Wells Fargo. None of the documents indicated that WMC even knew about this case.”
[The real party in interest (WMC) might sell of assign the property to Wells Fargo after Wells Fargo filed the foreclosure suit against the Byrds. But selling or assigning the property to Wells Fargo, WMC might help create a new standing for Wells Fargo as the “real party in interest”. Base on that new standing, Wells Fargo could file a second lawsuit.
However, if Wells Fargo was not the “agent” of WMC at the time the foreclosure was filed, no amount of razzle-dazzle would allow WMC could to “retroactively” ratify the commencement of the suit by Wells Fargo. The real party in interest/principal (WMC) cannot retroactively ratify the acts of a non-agent (Wells Fargo).
If Wells Fargo was not either the “real party in interest” or at least agent/representative for the “real party in interest” when the suit was filed, then Wells Fargo filed that suit without any authority whatsoever. (That’s probably barratry.) If the defendant objects to Wells Fargo as not being the real party in interest, the court has no apparent choice other than to dismiss the suit—unless Wells Fargo can prove that it was agent for the real party in interest when the suit was filed. Wells Fargo cannot go back, after the fact, to cut some sort of deal with WMC to create the “appearance” of ratification.
A defendant might want to preempt any interference by the real party in interest (in this case, WMC) by sending a notice to the “real party in interest” of the possibly fraudulent attempt by the purported plaintiff (Wells Fargo) to extort funds or property under the color of law even though the plaintiff was not the “real party in interest”. This notice might be sent to the “real party in interest” before such notice was sent to the purported plaintiff or objection raised in the court. The object of such notice might be to create evidence that the “real party in interest” knew about the purported plaintiff’s possible fraud before the purported plaintiff contacted the “real party” for a ratification or assignment of the property.
Once that knowledge was in the real party in interest’s hands, that “real party” might be extremely reluctant to cooperate in any way with the purported plaintiff since such cooperation might be construed as evidence of a conspiracy to defraud the defendant.
Result? The purported plaintiff might not be able to secure any assistance from the real party in interest. Without ratification or assignment, the entire claim to be entitled to foreclose might be stripped from the purported plaintiff with little or no hope of recovery—ever.]
“For ratification to occur, the ratifying party must know what actions it is ratifying.9 While Wells Fargo repeatedly argued that ratification had occurred, it seemed to be confused as to which party had to ratify.
“Below, it argued that “Plaintiff, being a real party in interest, did ratify the commencement of this action * * * .” But Civ.R. 17 makes clear that it was WMC, not Wells Fargo, that had to ratify the commencement of the action.
“Wells Fargo has found one decision that holds to the contrary. In Bank of New York v. Stuart,10 the Ninth Appellate District held that a bank that had filed a foreclosure action could cure a real-party-in-interest problem by subsequently obtaining the mortgage.11 But the only authority for this holding was two federal cases from 1966 and 1979. And the two cases are distinguishable. In the first case, the plaintiff was the one who had done all the work that was the subject of the litigation, and the “real party in interest” was “a mere straw man throughout.”12 In the second case, the plaintiff was already a party in his own right and was assigned the claims of another plaintiff.13
“We find instructive a more recent federal case addressing the application of the rule (but in the context of a statute of limitations).14 In that case, the party suing did not have a claim at the time suit was filed, but received an assignment of the claim after it had commenced the litigation. The court held that “Rule 17(a) does not apply to a situation where a party with no cause of action files a lawsuit to toll the statute of limitations and later obtains a cause of action through assignment.”15 In that case, the court concluded that “B & K’s assignment to the Wulffs of its claim against CMA cannot ratify the Wulffs’ commencement of suit on a claim which theretofore did not exist.”16
[In other words, there is NO CLAIM unless the person making the claim is, or represents, the “real party in interest”.]
“In light of the foregoing authority, we must respectfully disagree with the Ninth Appellate District. We hold that, in a foreclosure action, a bank that was not the mortgagee when suit was filed cannot cure its lack of standing by subsequently obtaining an interest in the mortgage. Wells Fargo’s third, fourth, and sixth assignments of error are overruled.
“The Dismissal Issue: Sua Sponte Dismissal
“Having determined that the trial court could have properly dismissed the case for lack of standing when the suit was filed, we must next determine if dismissal was proper when, as here, it was not requested by the Byrds.
[First, the trial court could have dismissed/discharged the original case/claim if requested by the defendants. But if the trial court can also dismiss “sua sponte” (on its own motion), then the trial court would seemingly have an inherent power to discharge claims. That would be consistent with previous speculation that the courts, themselves, may be among the Item #1 persons able to discharge claims.]
“Sua sponte dismissals ordinarily prejudice appellants, as they deny any opportunity to respond to the alleged insufficiencies.17 [“Opportunity to respond” probably equates the procedural due process element of “opportunity to be heard”. To deny the opportunity to be heard violates procedural due process and probably strips the court of jurisdiction.] But here, both parties argued the real-party-in- interest issue, and the facts were clear in the record. [Note that a mere “argument” (not necessarily the introduction of evidence) was sufficient to qualify as “opportunity to be heard”.] Wells Fargo did not have standing at the time the complaint was filed. The record unequivocally indicates that WMC did not assign its rights under the mortgage to Wells Fargo until March 2, 2007. Under these circumstances, there was nothing left for the trial court to address. We overrule Wells Fargo’s second assignment of error.”
[The term “assign” deserves study. Is “assign” synonymous with “sell”? Or does “assign” signal something less? To what extent is someone who has been “assigned” also the “real party in interest”?
(If I recall correctly, there may be at least one of the Christ’s “hearings” where his accusers alleged that he had claimed to be the Messiah. When asked if this was true, the Christ replied “so you say.” The Christ was subsequently declared to be innocent. By replying “so you say,” the Christ did not enter into an argument. Could it be that the fundamentals of modern procedural due process can be traced all the way into biblical times? It seems unlikely, but could it be that by not “arguing,” the Christ was not “heard” and thereby deprived the administrator of his authority to proceed with the case?) ]
“The Dismissal Issue: With or Without Prejudice
“A dismissal of a claim other than on the merits should be a dismissal without prejudice.18 We agree with Wells Fargo that a dismissal that is premised on jurisdiction “operates as a failure otherwise than on the merits” and should be a dismissal without prejudice.19 The dismissal of an action because one of the parties is not a real party in interest or does not have standing is not a dismissal on the merits.20
“But the trial court dismissed this case with prejudice. While it attempted to correct this with a subsequent entry, a trial court is without jurisdiction to modify an order dismissing a cause with prejudice to one without prejudice, unless the requirements of Civ.R. 60 are met.21
“In this case, the requirements of Civ.R. 60 were not met, and, therefore, the trial court could not have changed its final decision from a dismissal with prejudice to one without prejudice. We sustain Wells Fargo’s first and fifth assignments of error. But since the case should have been dismissed without prejudice, we modify the decision of the trial court from a dismissal with prejudice to a dismissal without prejudice. Wells Fargo, now a proper party to initiate a foreclosure action against the Byrds, is free to do so.”
[When WMC finally assigned the mortgage to Wells Fargo, Wells Fargo became “free” to file a new action. The first foreclosure suit was dismissed. A second could be filed. The total delay could be 90 days to a year. Thus, it might seem that the Rule 17(a) challenge to Wells Fargo’s standing as a “real party in interest” didn’t accomplish much other than a temporary delay in the foreclosure action.
However, I wonder if Wells Fargo did, in fact, file a second foreclosure suit. After all, by admitting that it wasn’t the real party in interest in the first case, Wells Fargo may have compromised its ability or inclination to sue again. (It’s arguable that filing suit as anything other than the real party in interest might even expose the filer to a title 42 suit for conspiracy to deprive the mortgagee of his rights.) Once Wells Fargo admitted that it wasn’t the real party in interest until relative recently, they compromised their claim to have been previously entitled to collect mortgage payments from the mortgagee. If Wells Fargo had not right to foreclose until after the assignment of the mortgage deed, what right did Wells Fargo have to collect mortgage payments before the assignment? If it were true that Wells Fargo did not have legal right to collect mortgage payments before to the actual assignment of mortgage deed, then it is at least arguable that Wells Fargo might be compelled to disgorge those pre-assignment funds.
Perhaps the original mortgagee went no further than to challenge Wells Fargo’s standing under Rule 17(a) as a real party in interest. If so, after Wells Fargo was assigned the mortgage deed, Wells Fargo may have successfully foreclosed on a second foreclosure action.
But I suspect that if the original mortgagee fully appreciated the implications of Wells Fargo admission that it was only recently assigned the interest in the mortgage deed, that admission may have created a liability for Wells Fargo that the mortgagee might’ve exploited to great advantage. If I were such mortgagee, I’d challenge Wells Fargo’s right to collect mortgage payments before Wells Fargo was assigned the mortgage deed.
If Wells Fargo had no right (prior to the assignment) to collect the mortgage payments, Wells Fargo might have to disgorge those pre-assignment payments back to me—the mortgagee. I might threaten to sue Wells Fargo for fraud or civil rights violations for taking funds from me when it knew or should’ve known that it had no right to such funds. I’d make it my business to locate other mortgagees who were similarly exploited by Wells Fargo so I had evidence of a “pattern” of racketeering activity by Wells Fargo to support a RICO suit. And I’d charge the lawyers in the foreclosure mill with barratry, fraud, breach of their “code of ethics,” vexatious litigation, etc..
By the time I was done, Wells Fargo might be reluctant to try to foreclose on me a second time.]
“The Sanction Issue
“The Clunk firm, in two related assignments of error, claims that the trial court improperly ordered it to “file documentation showing that their client is the real party in interest as of the date of the filing of the lawsuit” in all future foreclosure actions filed by the firm. We agree.
“There is no authority for what the trial court did. The Byrds did not seek sanctions [Interesting. The Byrds (defendants) could provide authority to the judge to seek sanctions by requesting he do so.], there was no notice of the possibility that this firm would be sanctioned, and there was no hearing on sanctions.”
[Without 1) notice and 2) opportunity to be heard, the attorney firm was denied procedural due process as a prerequisite for being sanctioned. Without procedural due process, the court presumably had no authority to sanction the lawfirm.]
“The trial court did not limit the sanction to this case, but sanctioned the firm for all of its future conduct. In essence, the trial court crafted an additional pleading requirement that would apply only to one law firm. Apart from the vexatious-litigator statute, there is no authority that would allow a trial court to impose additional pleading requirements on an individual—let alone a law firm—in future litigation. The Byrds have cited no such authority and, in fact, have not addressed these assignments of error in their brief.”
[There’s another possible authority to use as ground to attack those who file suits without the authority of the “real party in interest”—charge them as vexatious litigants. Then, go looking for other cases where they’ve done the same thing to other defendants. Because mortgage deeds have been resold by banks and bundled into “tranches” that are sold all over the earth, you can bet that 30 to 60% of all foreclosures filed by plaintiffs who don’t have the real mortgage deed to prove they are the real party in interest. Therefore, those law firms that function as “foreclosure mills” routinely file foreclosure actions without the authority of the “real party in interest”. That suggests that if you had ten cases filed by those attorneys, at least three of them would be without the authority of the real party in interest.
If the cases were already resolved, the foreclosure actions would probably have been successful in that defendants probably didn’t understand Rule 17(a) and unwittingly “assented” to lose their homes. I wouldn’t bet that such past cases could be used as evidence of “vexatious litigants” since the attorney’s won (if unfairly) those lawsuits.
But if a defendant in one current foreclosure action could find several other foreclosure actions that were filed by the same attorney or law firm but not yet resolved, and if some of those other current actions were also filed without a “real party in interest,” then there’d be evidence of a recurring pattern of lawless conduct by the law firm. Such pattern might be grounds for “vexatious litigant” charges, recurring barratry charges or even a RICO suit.
I don’t know what current barratry laws are but 15 years ago, under Texas law, the 1st proven barratry charge was a misdemeanor, the 2nd was a misdemeanor, and the 3rd barratry charge (that’s proved) constituted a felony. A felony is evidence of “moral turpitude” and grounds for terminating an attorney’s license to steal. Thus, 15 years ago, if you could prove 3 instances of barratry you could cause a lawyer to be disbarred. And that was 3 instances in the attorney’s entire career. Three barratry strikes and they’re out. Being convicted of a single instance of barratry would scare the crap out of any licensed attorney. Being threatened by three would give them screaming diarrhea.
Whether current barratry laws remain as dangerous to attorneys as they were 15 years ago is unknown to me. But I’ll bet at least some states still carry similar barratry laws and penalties.
If the 3-strikes-you’re-out pattern of barratry isn’t enough to scare opposing attorneys, I’d bet that any such pattern of improper behavior of repeatedly filing suits without proper authority and thereby defrauding mortgagees out of their homes and property will constitute sufficient evidence to file RICO suits against those attorneys and/or their law firm (“criminal enterprise”). The nice things about RICO are 1) you don’t need to be a licensed attorney to file a civil RICO suit; 2) subsequent criminal prosecution is possible; 3) conviction of a felony should result in disbarment; and 4) RICO is all about a “pattern” of criminal activity.
Let’s suppose that a particular law firm is a “foreclosure mill” that routinely kicks people out of their homes. Let’s suppose that a lot of people are currently losing their homes to foreclosure due less to their own irresponsibility than to a dramatic change in our national economy. Let’s suppose that a jury consists of 12 people—some of whom have lost their homes to foreclosure, or have friends or relatives that lost their homes to foreclosure, or are simply caught in tough economic circumstances wherein they are afraid that they might be foreclosed on at some time in the future. How much sympathy do you suppose a modern jury would have for a lawyer or law firm that had been routinely foreclosing on people without lawful authority to do so?
What the heck was Boss Hog’s “depitty’s” name? Cletus? Was that it? I’m laughin’ like Cletus.
Y’see, the foreclosure lawyers get away with this crap because:
1) The people being foreclosed upon are too broke to hire even incompetent attorneys, so they are totally defenseless; and,
2) Even if a mortgagee could afford a decent attorney, that attorney would not accuse his fellow attorneys of barratry, RICO or even vexatious litigation. Within the lawyer community, there’s a code of silence (and of ignorance, laziness and incompetence) that protects most lawyers from liability for their criminal, improper and even unethical acts.
As a result, lawyers are so used to getting away with “murder,” that they’ve become not merely arrogant but careless. Therefore, lawyers are vulnerable to attack by non-lawyers who 1) knowledgeable; and 2) not inhibited by codes of silence, ignorance, laziness or incompetence. So, if you happened to be a defendant who understood a little about the law but weren’t a licensed attorney, you might be willing and able to attack the attorneys who were attacking you by threatening their most precious asset—no, not their sex organs, silly—their licenses to steal. If you could learn how to cause lawyers to be disbarred, I guarantee you’ll see a lot less lawyers aimed in your direction.
In law, the best defense is always a good offense.]
“We sustain the law firm’s two assignments of error.
“The trial court properly dismissed the foreclosure complaint filed by Wells Fargo in this case because, at the time the complaint was filed, it did not own the mortgage that was the basis for the suit. Acquiring the mortgage by assignment after the suit was commenced could not have cured the jurisdictional defect arising from the fact that, at the time the lawsuit was filed, Wells Fargo had no claims to make against the Byrds. But while the dismissal was proper, it should have been, and is now ordered to be, without prejudice.
“The trial court lacked authority to order the Clunk firm, upon the filing of future foreclosure complaints, to present additional documentation demonstrating that its clients are the real parties in interest.
“The judgment of the trial court is affirmed in part as modified with respect to dismissal of the action, and reversed in part with respect to the imposition of sanctions.
“HILDEBRANDT, P.J., and CUNNINGHAM, J., concur.
“The court has recorded its own entry on the date of the release of this opinion.”
1 State ex rel. Dallman v. Court of Common Pleas (1973), 35 Ohio St.2d 176, 298 N.E.2d 515, syllabus.
2 Northland Ins. Co. v. Illuminating Co., 11th Dist. Nos. 2002-A-0058 and 2002-A-0066, 2004- Ohio-1529, at ¶17 (internal quotations and citations omitted).
3 Travelers Indemn. Co. v. R. L. Smith Co. (Apr. 13, 2001), 11th Dist. No. 2000-L-014.
4 Discover Bank v. Brockmeier, 12th Dist. No. CA2006-07-078, 2007-Ohio-1552, at ¶7, citing In re Highland Holiday Subdivision (1971), 27 Ohio App.2d 237, 240, 273 N.E.2d 903.
5 Id., citing Grant Thornton v. Windsor House, Inc. (1991), 57 Ohio St.3d 158, 161, 566 N.E.2d 1220.
6 Civ.R. 17(A).
7 See Morr v. Crouch (1969), 19 Ohio St.2d 24, 249 N.E.2d 780 8 See Alban Equipment Co. v. MPH Crane, Inc. (June 2, 1989), 4th Dist. No. 424 (“Ratification does not result from the affirmance of a transaction with a third person unless the one acting purported to be acting for the ratifier.“), quoting 1 Restatement of the Law 2d, Agency (1958), 217, Section 85; see, also, Williams v. Stearns (1898), 59 Ohio St. 28.
9 See Lithograph Bldg. Co. v. Watt (1917), 96 Ohio St. 74, 85, 117 N.E. 25 (before the principal can be held to ratify the unauthorized acts of his agent, it must appear that he had knowledge of all material facts).
[Another beauty. “All material facts”? All? There’s no end to the questions that requirement might pose.
Q. Are you the “real party in interest” in this matter?
Q. Do you have knowledge of all material facts in this matter?
Q. Can you list all the material facts in this matter?]
10 9th Dist. No. 06CA008953, 2007-Ohio-1483.
11 Id. at ¶12.
12 Campus Sweater and Sportswear Co. v. M. B. Kahn Constr. Co. (D.S.C.1979), 515 F.Supp. 64, 84-85 13 Dubuque Stone Prods. Co. v. Fred L. Gray Co. (C.A.8, 1966), 356 F.2d 718, 723-724.
14 United States v. CMA, Inc. (C.A.9, 1989), 890 F.2d 1070, 1074.
16 Id. See, also, Feist v. Consolidated Freightways Corp. (E.D.Pa.1999), 100 F.Supp.2d 273, 274 (plaintiff’s filing of suit in his own name after his Chapter 7 case was closed, and after having failed to list injury claim as estate asset, was not result of honest mistake and thus warranted dismissal rather than substitution of bankruptcy trustee as real party in interest); Automated Information Processing, Inc. v. Genesys Solutions Group, Inc. (D.N.Y.1995), 164 F.R.D. 1, 3 (The rule permitting substitution of real party in interest when necessary to avoid injustice did not permit substitution of newly formed corporation as plaintiff after it was discovered that corporation that originally brought action had been dissolved.).
[Hmph. Is the Item #1 “person” able to “discharge claims” a “bankruptcy trustee”? Is the whole mess presumed to take place in the context of a national bankruptcy? As a presumed “bankrupt” am I presumed to sue other “bankrupts” who are Item #2 “parties” to some private contract/trust agreements that take place within the larger context of a “national bankruptcy”? If so, while the individual bankrupt defendant might discharge the plaintiff’s claim by transferring some FRNs, the “great bankruptcy trustee in the Washington (or state capitol) sky” is always in the background and potentially available to discharge any claim?
Why does anyone “discharge” rather than pay a claim?
A: Because they are insolvent or bankrupt and unable to pay.
Insofar as both the Item #1 “person” and the Item #2 “party” both discharge (rather than pay) claims, could it be that both are presumed to act as bankrupts or at least in the context of bankruptcy?
Do modern “claims” themselves (especially if denominated in legal tender) exist only in bankruptcy?
Hard to say, but the “discharge”/bankruptcy link makes a little sense.
Is that what’s happening??
If this conjecture were roughly correct, it would suggest that anytime I was sued, it might be possible for me to somehow petition the “great bankruptcy trustee” to discharge the claim purportedly against me. Why might this work? Maybe because, if the whole system is presumed to be in bankruptcy, then the plaintiff itself might also be presumed to be a bankrupt and therefore without standing (or perhaps capacity) to sue.
Therefore, if I alleged the plaintiff were bankrupt and the plaintiff couldn’t prove it was solvent, then I might have sufficient evidence to ask the “great bankruptcy trustee” to “discharge” the claim against me.
But who might be the “great and terrible bankruptcy trustee”? The President? Secretary of State? Secretary of the Treasury? Attorney General? Director of the “Fund”?
If some one man was deemed to be the “great bankruptcy trustee” able to discharge all claims in bankruptcy, he’d have to have agents or representatives. Who might they be? Is it possible that the judge sitting on virtually any bench is actually a bankruptcy trustee for the “national bankruptcy”? Truth is, the judge can “discharge” virtually any claim in his court by dismissing it. . . .
Is that what a 12(b)(6) motion is all about? Alleging that the plaintiff is bankrupt and therefore “failed to state a claim [in bankruptcy] for which relief can be granted”? The plaintiff would’ve proved his condition as a bankrupt by discharging the filing fee with legal tender rather than money. Being bankrupt, the plaintiff could not bond the case.
But attorneys—whose creed declares “my word is my bond” would be recognized as able to “bond” a case without lawful money. This suggests that “this state” is a state of bankruptcy and licensed attorneys therein are all trustees for the national bankruptcy. This might explain why pro se suits are routinely dismissed by the courts under 12(b)(6) motions while suits filed by attorneys/bankruptcy-trustees are always heard.
Implication: If the “pro se” (actually “in propria persona”) plaintiff could establish that he’s not bankrupt, he might not be subject to 12(b)(6) (failure to state a claim) dismissals.
If a defendant can allege that the plaintiff is bankrupt, the trial court judge (or even magistrate) might be empowered to dismiss/discharge on that basis. It’s even possible that the magistrate’s primary purpose is to discover if the defendant and plaintiff are bankrupts. If the defendant tells the magistrate that the plaintiff is bankrupt, the case might be dismissed/discharged. Likewise, if the defendant could prove that he is NOT bankrupt, the plaintiff’s case might be dismissed/discharged.
How would a defendant prove he was not bankrupt? Claim to be a creditor rather than a debtor in the matter at hand?
How ‘bout counter-claim? What if I were sued, counter-claimed as a plaintiff and paid my filing fee with lawful money and expressly denied that I was bankrupt and declared myself to be solvent? Would that be sufficient to cause the “bankrupt” plaintiff’s case to be dismissed against a solvent counter-claiming plaintiff?
All of this speculation strikes me as a serious stretch, but there is enough support to consider the possibilities.]
17 MBNA Am. Bank, N.A. v. Canfora, 9th Dist. No. 23588, 2007-Ohio-4137, at ¶ 14.
18 See Chadwick v. Barba Lou, Inc. (1982), 69 Ohio St.2d 222, 226, 431 N.E.2d 660.
19 See Civ.R. 41(B)(4).
20 See State ex rel. Coles v. Granville, 116 Ohio St.3d 231, 2007-Ohio-6057, 877 N.E.2d 968, at ¶51.
21 Young v. Ohio Adult Parole Auth. (Apr. 27, 2001), 2nd Dist. No. 2001 CA 3.