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Part 1 – How to Challenge an

Assignment of MortgagePosted on August 23, 2013

Have you ever wondered what the phrase “Borrower is lawfully seised of the estate hereby conveyed

and has the right to mortgage” under BORROWER COVENANTS meant?

Glenn Augenstein, a seasoned researcher and expert witness in foreclosure fraud, has taken the time

to research the ancient word “seisin” which gives us better insight into what the mortgage document

was meant to convey.

This two-part post is worth the read and education – and may give you a new perspective on the

intention of the documents and the necessity to defend the title at all costs.

Part 1 – How to Challenge an Assignment of Mortgage

By Glenn Augenstein

We’ve seen numerous times, in numerous cases, a Homeowner/borrower/defendant and plaintiff

(Homeowner) precluded from raising any issues relating to a defective assignment

of mortgage (AOM). This language, or similar, is

frequently uttered by the court in a final order denying the Homeowner has standing to challenge an

assignment of mortgage, and also usually granting summary judgment to plaintiff bank, “Defendant

is not a party to the contract, or a 3 rd party beneficiary, and therefore has no standing to challenge the

validity of the assignment.”

One case frequently cited by banks to support such rulings in the past three (3) years is Livonia

Property Holdings, L.L.C., v. Farmington Road Holdings, L.L.C., 717 F.Supp.2d 724 (E.D.Mich.



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2010), stating “Borrower disputes the validity of the assignment documents on several grounds

outlined above. But, as a non-party to those documents, it lacks standing to attack them.”

It is significant that the same court held differently two (2) years later in another case. “It is true that

the Livonia Properties opinion contains the statement that “there is ample authority to support the

proposition that ‘a litigant who is not a party to an assignment lacks standing to challenge that

assignment, ‘” Livonia Properties, 399 F. App’x at 102 (quoting Livonia Properties Holdings, LLC v.

12840-12976 Farmington Road Holdings, LLC , 717 F.Supp.2d 724, 736-37 (E.D. Mich. 2010)); but

when read carefully the case does not stand for such a general and unqualified position. The Court

believes, therefore, that Livonia Properties does not compel the conclusion that a foreclosure plaintiff

can never attack the foreclosure by challenging the validity of an underlying assignment.” Talton v.

BAC Home Loans Servicing LP , 839 F.Supp.2d 896 (E.D.Mich. 2012).

Banks aren’t nearly as quick (heh, heh) to wrap their arms around this counter holding.

Before making a mere layman’s attempt at providing answer(s) to potential questions raised aboveI’d first like to cover a bit of history in regard to conveyance of interests in, and ownership of, real

estate generally. It is long standing, and well established, that someone ALWAYS owns land, and

that such ownership be a matter of public knowledge, of the public record.

Conveyance Before Writing – Livery of Seisin

Before the Norman Conquest of 1066 writing in England was uncommon, and for several centuries

after. Ownership of land, and changes in ownership, were memorialized in the public’s knowledge

via“livery of seisin.”

Black’s Law Dictionary (8th Edition, 2004) offers the following:

“Livery of seisin. Hist. The ceremony by which a grantor conveyed land to a grantee. • Livery of

seisin involved either (1) going on the land and having the grantor symbolically deliver possession of

the land to the grantee by handing over a twig, a clod of dirt, or a piece of turf (called livery in deed)

or (2) going within sight of the land and having the grantor tell the grantee that possession was being

given, followed by the grantee’s entering the land (called livery in law). See SEISIN. [Cases: Deeds

21.C.J.S. Deeds §§ 12–13.]“

“[W]e may now pause to wonder how transfer of these potentially infinite interests was

accomplished. Without a modern system of land records, it would be desirable that the transfer beeffected with sufficient ceremony not only to mark itself indelibly in the memories of the participants,

but also to give notice to interested persons such as the mesne lord above the transferor. The central

idea was to make ritual livery (meaning ‘delivery,’ from the Old French livrer) of seisin (meaning,

roughly, ‘possession,’ from the Old French saisir or seisir).



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The transferor and transferee would go to the land to be transferred, and the transferor would then

hand to the transferee a lump of soil or a twig from a tree — all the while intoning the appropriate

words of grant, together with the magical words ‘and his heirs’ if the interest transferred was to be a

potentially infinite one.” Thomas F. Bergin & Paul G. Haskell, Preface to Estates in Land and

Future Interests 10–11 (2d ed. 1984).

The ceremony was usually attended by witnesses. I imagine the bigger the parcel of land the more

witnesses were in attendance. In the absence of a writing it was the ceremony and witnesses that

created the public knowledge, and thereby the public record.

Though writing was rare a written “charter of feoffment” would occasionally be drafted. This might

occur when the boundaries of a given parcel were particularly complex. Even when employed the

charter would not by itself be the conveyance. The conveyance was the livery of seisin – and

without same the charter was of no effect.Language utilized in charters helps to illustrate this point. It wasn’t “By this charter I hereby

give…” Rather it was “Know ye that I have given…” Livery of seisin was the present tense

ceremony of conveyance. A charter of feoffment was a past tense writing about an event that had

already occurred. In the presence of a writing it was still the witnesses that created the public record.

Who owns Blackacre? Jones owns Blackacre. How do we know Jones owns Blackacre? There

were seventeen (17) witnesses in attendance at the livery of seisin in which Smith conveyed

Blackacre to Jones.

Livery of seisin was not abolished in England until 1925 with the passage of The Law of Property

Act.

The Statute of Frauds

In the latter part of the seventeenth (17 th) century a new method of conveyance and recordation was,

out of necessity, developed; In the aftermath of the English Civil War in 1642-1651, a midst some

confusion, there were efforts to game the existing system of livery of seisin, and to acquire some ill

booten gotty, er.., um… ill gotten booty.

The method employed was to hire a couple of contract perjurers to act as false witnesses, usually

locals in good standing in the community, to come into court and offer perjured statements in regard

to a land transaction .

“Yes, I saw Jones sell Blackacre to Johnson for £10 sterling, on a handshake.” You can imagine

Jones was rather upset by this. The party employing the more upstanding community member would



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usually win these disputes. Enter the profession of the “contract perjurer.” [Some things never

change. DC Ed]

After several years it became quite clear what was occurring – crooked folks were hiring the best,

most well thought of contract perjures they could find, and stealing properties across the countryside

– and how the courts had become complicit, unwittingly or otherwise, in the fraudulent takings.

Enter the English Statute of Frauds of 1677. The important parts are relatively short. The emphasis

is mine.

For prevention of many fraudulent Practices which are commonly endeavored to be upheld by

Perjury and Subornation of Perjury:

“Be it enacted by the Kings most excellent Majestie by and with the advice and consent of the Lords

Spirituall and Temporall and the Commons in this present Parlyament assembled and by the

authoritie of the same That from and after the fower and twentyeth day of June which shall be in the

yeare of our Lord one thousand six hundred seaventy and seaven All Leases Estates Interests of Freehold or Termes of yeares or any uncertaine Interest of in to or out of any Messuages Mannours

Lands Tenements or Hereditaments made or created by Livery and Seisin onely or by Parole and not

putt in Writeing and signed by the parties soe making or creating the same or their Agents thereunto

lawfully authorized by Writeing, shall have the force and effect of Leases or Estates at Will onely and

shall not either in Law or Equity be deemed or taken to have any other or greater force or effect, Any

consideration for makeing any such Parole Leases or Estates or any former Law or Usage to the

contrary notwithstanding.”

The original § V is the portion relating to conveyances and sales of real estate.

“V. And be it further enacted by the authority aforesaid, That from and after the 4 and twentieth day

of June, all devises and bequests of any lands, or tenements, devisable either by force of the statute of

wills, or by this statute, or by force of the custom of Kent, or the custom of any borough, or any other

particular custom, shall be in writing, and signed by the party so devising the same, or by some other

person in his presence, and by his express directions, by three or four credible witnesses, or else they

shall be utterly void and of none effect.” [ Research source ]

Between the “writing” and the “three or four credible witnesses” this resolved the problems of the

contract perjurer. Now it becomes the writing that effectuates the conveyance.

The Statute of Frauds brought back some stability and reliability to land ownership, and private property rights. It was utilized in America before independence. Recording statutes also grew up

around the Statute of Frauds. After independence the same Statute of Frauds was retained by the

founders, and the land recording systems and statutes as well. Every state has adopted a similar

version of the original English Statute of Frauds into its own statutes.

For centuries this system worked quite well. Until the last decade or so. But now those with bad

intentions have discovered ways around the requirements of the Statute of Frauds. Perjured



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testimony in court as the only proof doesn’t cut it any more. What is required is an executed writing

that also lies. We’re now dealing with rampant contract perjury, and contract forgery. It is utterly

insane.

The astute recorders, of which there aren’t many (John O’Brien, Kelley Monahan, Curtis Hertel, Jeff

Thigpen, Phil Ting [forgive me if I've left any out]), liken their recorders offices, and records, to

being a crime scene, and that seems to be accurate.

Part 2 - How to Challenge an Assignment of Mortgage by Glenn Augenstein continued

from Part 1 on DeadlyClear.

Glenn Augenstein, a seasoned researcher and expert witness in foreclosure fraud, has

taken the time to research the ancient word “seisin” which gives us better insight into what

the mortgage document was meant to convey.

Recent Case Law

Wells Fargo v Erobobo

On this I must first comment that standing, or lack thereof, is considered differently in some

jurisdictions than it is others. Some treat it as an affirmative defense that must be pleaded

timely or it is considered waived. “Because the issue of standing is distinct from the issue of

subject-matter jurisdiction and, thus, can be waived, we hold that an appellate court cannot, on

its own motion, resolve an appeal based upon a lack of standing before the trial

court.” Harrison v. Leach, 323S.W.3d 702 (Ky. 2010).

Others treat it as a brother to jurisdiction, which cannot be waived, and consider being so

closely related that standing, or a lack thereof, cannot be waived and can be raised for the

first time on appeal.

The recent Wells Fargo Bank, N.A. v. Erobobo of Supreme Court Kings County NY engaged in

a brief discussion in re standing, and how it related to the instant case. “Many decisionstreat the question of whether the Plaintiff in a foreclosure action owns the note and mortgage

as if it were a question of standing and governed by CPLR 3211(e).” Citigroup Global Markets

Realty Corp. v. Randolph Bowling , 25 Misc 3d 1244(A), 906 N.Y.S.2d 778 (Sup. Ct. Kings Cty

2009); Federal Natl. Mtge. Assn. v. Youkelsone, 303 AD2d 546, 546—547 (2d Dept 2003); Nat’l

Mtge. Consultants v. Elizaitis,23 AD3d 630, 631 (2d Dept 2005); Wells Fargo Bank, N.A. v.

Marchione, 2009 NY Slip Op 7624, (2d Dept 2009).



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“However, Plaintiff’s ownership of the note is not an issue of standing but an

element of its cause of action which it must plead and prove.” Wells Fargo Bank, N.A.

v. Erobobo, 042913 NYMISC, 2013-50675.

Not to be deterred plaintiff had attempted a bit of misdirection to shift the argument to one of

standing. “Plaintiff argues that Defendant’s claim that Plaintiff does not own the note and

mortgage amounts to a standing argument, and because Defendant failed to raise standing in

his answer as an affirmative defense or pre answer motion, he cannot do so now.” ibid.

This was a well-played “burden of proof” tactic, as the Erobobo general denial was

considered sufficient to place the burden on Wells Fargo. The Erobobo Court went on to

offer an excellent analysis of the relevant Pooling and Servicing Agreement (PSA) that

alleged to own/hold the Erobobo note and mortgage.

“Section 2.01, subsection 1 of the PSA requires that transfer and assignment of mortgages mustbe effected by hand delivery, for deposit with the Trustee with the original note endorsed in

blank.

“Section 2.05 of the PSA requires that the Depositor transfer all right, title, interest in the

mortgages to the Trustee, on behalf of the trust, as of the Closing Date. The Closing Date as

provided in the PSA is November 14, 2006.

“Option One assigned Defendant’s mortgage loan to the Plaintiff, as the Trustee, on July

15, 2008, approximately eighteen months after the trust had closed.” ibid .

“Under New York Trust Law, every sale, conveyance or other act of the trust on contravention

of the trust is void. EPTL §7-2.4. Therefore, the acceptance of the note and mortgage by the

trustee after the date the trust closed, would be void.” ibid

Defendant Erobobo argued that in addition to timely conveyance, pursuant to the strict and

regimented requirements in Section 2.01 and 2.05, conveyance to the trust must be by a

specific party, the Depositor. In Erobobo the “The assignment of the note and mortgage

from Option One rather than from the Depositor ABFC violates section 2.01 of the PSA

which requires that the Depositor deliver to and deposit the original note, mortgage and

assignments to the Trustee.”

“The assignment of the Defendant’s note and mortgage, having not been assigned fromthe Depositor to the Trust, is therefore void as in being in contravention of the PSA .The

evidence submitted by Defendant that the note was acquired after the closing date and that

assignment was not made by the Depositor, is sufficient to raise questions of fact as to

whether the Plaintiff owns the note and mortgage, and precludes granting Plaintiff summary

judgment.” ibid



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Standing to challenge an assignment of mortgage was not a central issue in Well Fargo v

Erobobo. However, the court made a very significant ruling in respect of the requirements of

the PSA, and the application of NY EPTL 7-2.4

It is important to note the ruling in Erobobo is merely interlocutory. At some point there may

be further deliberations. Until a final order is issued the case remains on the Supreme

Court of Kings County NY active docket. No appeal can be taken from an interlocutory

order. The entire interlocutory order is available here.

In re Saldivar

Approximately 5.5 weeks after the Erobobo interlocutory order a Texas Bankruptcy Case, In

re Saldivar, cited to the case.

“As a threshold matter, the court must first address Chase and Deutsche Bank’s assertion

that the Saldivars lack standing to challenge the validity of the assignment of mortgage to

the Trust.” In re Saldivar

, Case No: 11-10689.

The Saldivar court begins its discussion on Saldivar’s standing to challenge the validity of

the assignment stating “’A third party generally lacks standing to challenge the validity of an

assignment.’ Bank of American Nat’l Assoc. v. Bassman FBT, L.L.C., et al., 981 N.E.2d 1, 7 (Ill.

App. Ct. 2012).” ibid

It then considers whether the Trustee’s acts in contravention to the PSA, and NY EPTL 7-

2.4, are ultra vires , and merely voidable , but not void ab initio .

Finally the Saldivar Court states, “Based on the Erobobo decision and the plain language of

N.Y. Est. Powers & Trusts Law § 7-2.4, the Court finds that under New York law,

assignment of the Saldivars’ Note after the start up day is void ab initio. As such, none of

the Saldivars’ claims will be dismissed for lack of standing.” In Re Saldivar , Case No: 11-

10689.

There are likely to be further deliberations in In Re Saldivar . The entire In Re Saldivar opinion

in is available here:

GLASKI v BofA (PUBLISHED Version) This case seems to be a “shot heard round world” based on the amount of attention it has

received since issue, and subsequent publication. There are a number of nuggets.

“We conclude that a borrower may challenge the securitized trust’s chain of ownership by

alleging the attempts to transfer the deed of trust to the securitized trust (which was formed



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under New York law) occurred after the trust’s closing date. Transfers that violate the terms

of the trust instrument are void under New York trust law, and borrowers have standing to

challenge void assignments of their loans even though they are not a party to, or a third party

beneficiary of, the assignment agreement.” Glaski v. Bank of America, National Association,

F064556.

I am particularly fond of footnote 6 in which the court states, “Because the trial court took

judicial notice of the existence and recordation of the assignment earlier in the litigation, we

too will consider the assignment, but will not presume the matters stated therein are true.

(See pt. IV.B, post.) For instance, we will not assume that JP Morgan actually held any

interests that it could assign to LaSalle Bank. (See Herrera v. Deutsche Bank National Trust

Co. (2011) 196 Cal.App.4th 1366, 1375 [taking judicial notice of a recorded assignment

does not establish assignee's ownership of deed of trust].)” ibid

Here the Glaski court is unwilling to extend a presumption of good faith in respect of the

validity or veracity of the recorded document. This seems something of a sea change. By

refusing to presume good faith the court is unwilling to merely accept as true whatever

documents BANA may wave under the Court’s nose. It appears the veracity can be

challenged, and must needs be proven.

Another good nugget, “Despite the foregoing cases, we will join those courts that have read the

New York statute literally. We recognize that a literal reading and application of the statute

may not always be appropriate because, in some contexts, a literal reading might defeat the

statutory purpose by harming, rather than protecting, the beneficiaries of the trust. In this

case, however, we believe applying the statute to void the attempted transfer is justified

because it protects the beneficiaries of the WaMu Securitized Trust from the potential

adverse tax consequence of the trust losing its status as a REMIC trust under the Internal

Revenue Code. Because the literal interpretation furthers the statutory purpose, we join the

position stated by a New York court approximately two months ago:

“Under New York Trust Law, every sale, conveyance or other act of the trustee in contravention of

the trust is void. EPTL § 7-2.4. Therefore, the acceptance of the note and mortgage by the trustee

after the date the trust closed, would be void.” ( Wells Fargo Bank, N.A. v. Erobobo (Apr. 29, 2013)39 Misc.3d 1220(A), 2013 WL 1831799, slip opn. p. 8; see Levitin & Twomey, Mortgage Servicing,

supra, 28 Yale J. on Reg. at p. 14, fn. 35 [under New York law, any transfer to the trust in

contravention of the trust documents is void].)” id

The above section seems to have as its intent protection of the bond or certificate holders,

the beneficiaries, from adverse tax consequences that could result from the trustee violating

the governing trust documents and losing REMIC tax status.



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This position is significantly different from the oft repeated lines put forward by bank PR

firms of “The homeowner just wants a free house.” There may be further deliberations

on Glaski.

The entire Glaski v. Bank of America, National Association opinion, post publication, is

available here.

Choice of Law Provision

Upon satisfying the court one has standing to challenge the invalidity of an assignment, or

substitution of trustee, or conveyance, where do you go next? The above cases of

Erobobo, In re Saldivar , and Glaski all tie in New York Estate Powers and Trust Law (NY

EPTL). Several sections, but particularly §7-2.4. If you’re in Ohio, or Nebraska, gaining that

standing may not help in having the court apply NY EPTL. Enter the choice of law provision

(CLP).If your battling a party different than the originating lender it is likely your loan has been

securitized into a mortgage backed security trust. The PSA is the document that expresses

the duties, authorities, and limits and disabilities of the trustee.

In almost all the PSAs I’ve reviewed there is a section, usually in Article 11.04 titled

“Governing Law; Jurisdiction.” The language in the first sentence or two usually reads

something like:

“This Agreement shall be construed in accordance with the laws of the State of New York,

and the obligations, rights and remedies of the parties hereunder shall be determined in

accordance with such laws.”

It appears the Ohio court is going to be entirely reticent at now having to become

knowledgeable in regard to New York law, and particularly NY EPTL. But a lifesaver has

been thrown out to us on the frigid, choppy waters. One of the cases referenced and cited

to above, Bank of American Nat’l Assoc. v. Bassman FBT, L.L.C ., has some very beneficial

language in respect of a CLP.

“We are cognizant that we have already concluded that defendants are not entitled to rely on

the PSA’s choice-of-law provision; however, we do not view the application of New York law

under these circumstances as an invocation by defendants. Quite simply, plaintiff was a party

to a transaction that took place under and contained a choice-of-law provision expressly

contemplating the application of New York law.”



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Continuing, “In any event, by participating in transactions under the PSA, it is plaintiff’s

actions, rather than defendants’, that make New York law applicable to this issue.” Bank

of American Nat’l Assoc. v. Bassman FBT, L.L.C., et al. 981 N.E.2d 1, 7 (Ill. App. Ct. 2012).

If you scour some legal databases for cases in your jurisdiction it is likely you’ll find some

beneficial appellate level case law in respect of CLP. While CLP isn’t frequently discussed

it is not a new, unproven legal theory. It has substantial history. With such you should be

able to move your court to rule in accordance with New York law.

Bassman continues with this other nugget relating more directly to standing to challenge an

assignment, “Therefore, a borrower generally lacks standing to challenge the

assignment. Id. at 736 . However, a borrower may raise a defense to an assignment

that would render it “absolutely invalid,” that is, void. Id. at 735-36; Tri-Cities

Construction, Inc. v. American National Insurance Co., 523 S.W.2d 426, 430 (Tex. Civ. App.1975) (“The law is settled that the obligors of a claim may defend the suit brought

thereon on any ground which renders the assignment void, but may not defend on

any ground which renders the assignment voidable only, because the only interest or

right which an obligor of a claim has in the instrument of assignment is to insure himself that

he will not have to pay the same claim twice.”);

See also: Greene v. Reed , 486 P.2d 222, 224 (Ariz.Ct.App. 1971); cf.Young v. Chicago Federal

Savings & Loan Ass’n, 180 Ill.App.3d 280, 284 (1989) (“If a valid assignment is effected, the

assignee acquires all of the interest of the assignor in the property that is transferred.”

(Emphasis added.) (Internal quotation marks omitted.)); O’Neill v. De Laney, 92 Ill.App.3d

292, 297 (1980) (holding that third party could challenge validity of a contract where she

established a “significant and direct interest” in its validity) [emphasis added]. Ibid

Back Dating an AOM, or Substitution of Trustee

With livery of seisin it was the ceremony (and witnesses) that created the conveyance. With

the Statute of Frauds it was the writing (and witnesses) that created the conveyance. These

were both “present tense” transactions.

Why have we seen so many back dated, past tense, writings in the past several years? Can a presenttense transaction be converted to one that is past tense?

The 1st Circuit Court of Appeals in Juarez v Select Portfolio, No. 11-2431, February 12,

2013, handed down what many believed to be a new holding in saying “In this case, even a

perfunctory scrutiny of the ‘Corporate Assignment of Mortgage’ attached by Juárez to her

amended complaint reveals that we are before a document that was executed after the



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foreclosure and that it purports to reference, by virtue of its heading, a pre-foreclosure

assignment. Specifically, the heading reads ‘Date of Assignment: June 13, 2007,’ and it

states that the document was executed ‘[o]n October 16, 2008.’ However, nothing in the

document indicates that it is confirmatory of an assignment.”

This section above, and surrounding, was interpreted as meaning back dating of an

Assignment of Mortgage was impermissible, and that this was a new holding. I respectfully

beg to differ.

Doing some random research in late 2012 I came across a nice 6th Circuit case from

1962. It seems our jurists at that time had more awareness in respect of the history of

conveyance of ownership and interests in real property. They weren’t ambiguous about

it. While it appears more recently to have been forgotten, it is long standing and well

established that conveyances of interests in, or ownership of, land and real estate arepresent tense transactions only. “Land cannot be transferred except by writing and

necessarily is in the present tense. The writing itself is the transfer when

executed [emphasis added].” Belcher v Elliot , 312 F.2d 245 (6th Cir. 1962).

Consider in the alternative an analysis by an attorney with whom I consult:

“Here, the purported ‘assignment’ would need to be recorded on or about February 2, 2010,

but the actual assignment had not yet occurred, making the task a legal impossibility. The

soonest the June 11, 2010 ‘assignment’ could have been recorded would be June 11, 2010

– the day it allegedly occurred. Thus, the recording could never be timely completed to

effectuate a February 2, 2010 transfer date. KRS § 382.360(3), supra. (The backdating of a

transfer of interest in real property raises other issues as well.

For example, if A owns Blackacre on June 1, 2010 when B is seriously injured on the land

due to a latent defect, but A transfers his interest in Blackacre on June 11, 2010, backdating

the transfer to be ‘effective’ as of February 2, 2010, does A escape liability for the injuries

incurred by B?

“In the case sub judice, the purported ‘assignment’ executed June 11, 2010 is a ruse

designed solely to hoodwink the Court and party-litigants. The backdated mortgage

assignment was executed several months after this lawsuit was filed; however, it unlawfully

purports to be ‘effective’ at some date in the past. This kind of assignment, if considered

lawful, would wreak havoc on real property law, paving the way for fraudulent takings, the



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dismantling of recording statutes, and a breach of the public’s trust that matters of public

record can be relied upon as what is of public record on February 2, 2010, for example –

more than thirty days after Plaintiff allegedly ‘obtained’ an interest in the mortgage.

For example, a person examining the public records on February 2, 2010 simply would not

know that the ‘future’ June 11, 2010 ‘back dated assignment’ existed. Why? Because June

11, 2010 had not yet happened, as had not the back dated assignment. The record would

be silent about any alleged ownership interest, even though the purported assignment

would have to have been filed by February 2, 2010. On February 2, 2010, the purported

assignment did not exist – and it certainly does not ‘now exist’ as of February 2, 2010 just

because Plaintiff says so.”

Why You Might Want to Pass in Asserting Standing to Raise Challenges to an

AOM, or a Substitution of Trustee, or Conveyance

Bassman (previously referenced) informs us of some of the additional difficulties of asserting,

and proving, standing to challenge an assignment. “To have standing, a party must have

suffered an injury to a legally cognizable interest.” Commercial Credit Loans, Inc. v. Espinoza,

293 Ill.App.3d 923, 929 (1997).” Bank of American Nat’l Assoc. v. Bassman FBT, L.L.C., et al.

981 N.E.2d 1, 7 (Ill. App. Ct. 2012).

Similar is expressed in many state constitutions that have an open courts doctrine. The

concept of standing is implicit in the Kentucky Constitution, Bill of Rights §14 which states,

in relevant part:

‘All courts shall be open, and every person for an injury done him in his lands, goods,

person or reputation, shall have remedy by due course of law, and right and justice

administered without sale, denial or delay’ [emphasis added].

Implicit in the open courts provision of Kentucky’s Constitution is a restraint upon the courts

to the adjudication of actual justiciable controversies. Our Kentucky state Constitution

reinforces this restraint within §112(5), which states, in relevant part:

The circuit court shall have original jurisdiction of all justiciable causes not vested in some other

court [emphasis added].

These provisions limit access to the courts to real parties in interest suffering an “injury.” The

open courts provision expresses that courts are to be open for “justiciable causes”. A

“justiciable cause” has been defined by the Supreme Court of Kentucky as a“controversy in



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which a present and fixed claim of right is asserted against one who has an interest in

contesting it.” West v. Commonwealth, Ky., 887 S.W.2d 338, 341 (Ky. [1994]).

The Kentucky Constitution places substantial restrictions on the power of judicial

intervention by limiting its availability to those real parties in interest who have suffered an

“injury” and pled a “justiciable controversy.” The limitation placed upon the power of judicial

authority via Section 14 of the Kentucky Constitution is a limitation upon the court’s subject-

matter jurisdiction, and as such, it cannot be waived. Cann v. Howard , 850 S.W.2d 57, 59

(Ky. App. [1993]).

When presenting a challenge to a void AOM or conveyance are these the kinds of

arguments you want to force yourself to make, and win? Right from the get go? There is

an easier way.The Contractual Obligation to Defend Generally the Title, or Keep It

Simple Silly: The simpler we make this for our courts the more likely we’ll obtain our

desired result; a fair proceeding, equal and fair application of the rules of procedure, therules of evidence, terminating in justice.

Now, pull out, or up, your mortgage or deed of trust. Find the following language:

“BORROWER COVENANTS that Borrower is lawfully seised of the estate hereby conveyed and has

the right to mortgage, grant and convey the Property and that the Property is unencumbered, except

for encumbrances of record. Borrower warrants and will defend generally the title to the Property

against all claims and demands, subject to any encumbrances of record.”

Over

several years I’ve looked at more mortgages than I care to admit. Given a choice between

knowing any of this stuff and having a lit cigar stuck up my nose I’d opt for the latter. I used

to get paid to start fires without matches. I’d rather be doing that still. The last five (5) years

are not what I had planned. Yet I am here.



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You don’t need to assert standing to challenge the validity of an assignment after all. Did

you see the part that contractually obligates the borrower to “defend generally the title to the

Property against all claims and demands?” To this layman it looks to be “Contract Law

101.” And even better it is found in a seminal document; the mortgage or DOT.

Since reading my own again several months ago (you can’t EVER read your own

documents, your own pleadings, motions and other papers, the pleadings, motions and

other papers of adverse party, or the rules [Read the Rules. Read the Rules.

Readthe Rules] too many times), and noticing that language, I’ve reviewed several hundred

more mortgages and DOTs. Thus far I’ve found the language in every one I’ve reviewed. I

hesitate to say it is universal, but I’m hopeful.

Every example I’ve seen has always started with “BORROWER COVENANTS” in all caps

(that makes it a bit easier to find). I’ve seen it in different places, on different pages, but

thus far it has been in every one I’ve reviewed. Imagine this conversation.

Homeowner: Your Honor, I dispute the validity of the assignment.

Court: You’re a non-party to the assignment. You don’t have standing to challenge it.

Homeowner: I’m not asserting standing to challenge the assignment, Your Honor. I’m

contractually obligated to defend generally the title to the Property against all claims and

demands. Court: Are you trying to get a free house?

Homeowner: No, Your Honor. My contractual obligation, expressed in the mortgage on

page X, par. Y, is to protect the interests of the holder/owner/investor/real party in

interest. It appears that is not the party before this court. Court: Well, I don’t think that is

what it means.

Homeowner: It looks pretty unambiguous to me, Your Honor. Even if it is ambiguous, Your

Honor, the doctrine of “contra proferentem” is applicable; ambiguities are to be construed

unfavorably to the drafter. I didn’t draft the mortgage…

From this point, fulfilling a contractual obligation to protect the interests of the proper party,

connecting the dots that lead to the PSA, a CLP, and NY EPTL may become considerably

easier.

Thank you Glenn Augenstein for a terrific post.



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