Davis, Deutsche Bank, Due Process and An Unrestrained Constitutional Lawyer Arrive at the Supreme Court

LIT COMMENTARY

Below is the transcribed Petition by Davis, which would be denied, as per usual at SCOTUS. The United States Supreme Court has never helped a single homeowner obtain relief or granted a petition against Deutsche Bank since the financial crisis. On the other hand, they’ve wholly supported violations of the Constitution against #WeThePeople in favor for the banks and non-banks and their entourage of attorneys and corrupt outlaws in robes.

What’s interesting here is what follows our article after the petition, the story of Colorado creditor rights lawyers and foreclosure mills who were fined millions for fraudulent billing after a pursuit by the attorney general for Colorado. Some firms folded completely, others reinvented themselves, like attorney Robert Hopp Jr., who was not jailed or disbarred for his criminal acts along with his rogue colleagues. It’s unacceptable.

However, in the Davis case, the AG is on the side of Deutsche Bank and the lawyers/law firms they so aggressively pursued…read on to see how familiar this story about inviting foreclosure mill lawyers to help enact legislation which would help them expedite foreclosures in the state.

The same happened in Texas, with foreclosure mill BDF Law Group enjoying the same role.

Understand this folks, it was all premeditated and the federal judiciary was brought in to be the executioners at the instruction of SCOTUS and Wall St. That’s why foreclosure cases – primarily the jurisdiction of the states – were quickly shunted to federal courts by foreclosure lawyers. They would then act as executioners, swiftly. In doing so, the judges would also pen new precedential laws which would make a mockery of 200+ years of property laws and precedents.

That’s justice today for you in America folks – there is none where money is concerned. As a result – the housing market is in a crisis because all the REITs (real estate investment trusts aka Wall St.) bought the foreclosed homes when y’all were evicted. Now Wall St. rent the same stock of homes back to you at extortionate rentals.

In summary, the financial and economic damage has been increasing year after year and nobody seems to care about this material issue – it’s called affordable housing. Y’all are about to get a big wakeup call in 2021. The markets ready to tumble again after the news today about Archegos, a Hedge Fund imploded.

That’s the start of 2008 all over again, except this time, the banks, Wall St. and the judiciary are a well-oiled machine. They will evict homeowners with a rocket docket in place and that’s why they want a 5% increase in their $8.1 billion budget at the judiciary, and also why the states want to rehire retired judges. They know its about to start again – while you worry about coronavirus, your tax refund and your next meal.

John Davis, Petitioner
v.
Deutsche Bank National Trust Co., et al.

JAN 7, 2019 | REPUBLISHED BY LIT: MAR 29, 2021

PETITION FOR A WRIT OF CERTIORARI

Petitioner, John A. Davis, respectfully petitions for a Writ of Certiorari to review the judgment of the United States Court of Appeals for the Tenth Circuit.

The Tenth Circuit Court’s decision is contrary to the Supreme Court’s holding in Fuentes v. Shevin, 407 U.S. 67 (1972) and deprived Mr. Davis of his due process rights prior to being evicted from his home. The lower court’s decision paves the way for creditors to continue to trample consumer rights across the country.

In 2008, the financial crisis caused by mortgage trusts known as Real Estate Mortgage Investment Conduits like the trust herein, spawned nationwide defaulting, undervalued sub-prime collateral. Investors sued mortgage originators and their sponsors who misled them by claiming the trusts were sound investments. The underwriting practices of the mortgage originators contributed to the collapse of the real estate market, and resulted in hardship for thousands of Americans like Mr. Davis. Hundreds of mortgage originators declared bankruptcy overnight, leaving promissory notes lost in the chaos. These orphaned notes became targets of opportunity to mitigate the damage to the trusts, who claimed them as their own years after their closing date, without proof of ownership. See, e.g., Glaski v. Bank of America, 218 Cal. App. 4th 1079 (5th Dist. Cal., 2013).

Efforts by two private foreclosure attorneys, who became de facto staff attorneys of the Colorado legislature by re-writing the foreclosure statute to favor their creditor-clients, were pivotal in allowing alleged creditors to acquire the collateralized notes for which they had no legitimate claim. The legislation drafted by the two defendant attorneys in 2006, to amend the Colorado foreclosure statute § 38-38-101, allowed courts to deem standing, holder, and holder in due course and, therefore, real party in interest, through conclusive presumptions instead of rebuttable presumptions. Resolution Trust Corp. v. Heiserman, 898 P.2d 1049 (Colo. 1995); cf. Myrick v. Garcia, 332 Colo. 900, 903 (1958) (holding that if rebutted, submission of the note was prima facie evidence of holder in due course, and ownership must be proven at trial). This allowed confiscation of homeowners’ property prior to a fair hearing, a practice that continues today.

After passage of the amendments to § 38-38-101, the alleged creditor only needed copies of a deed of trust and promissory note, and an unsworn Statement of Qualified Holder from the alleged creditor or the attorney, stating that the creditor was the real party in interest, or submission of a purported original note, and the court would deem the original and, by statute, conclusively establish standing, holder, holder in due course and therefore the real party in interest, eliminating homeowners’ ability to dispute a creditor’s entitlement to foreclose. Colo. R. Civ. P. 120(c). The eviction that followed was a proceeding to further enforce the Rule 120 to remove the homeowner before the aggrieved homeowner could pursue a lawsuit in a court of competent jurisdiction. Cf., Colo. R. Civ. P. 120(d).

Petitioner’s section 1983 suit arises out of defendant foreclosure attorneys’ interference with Mr. Davis’s due process in the Rule 120 foreclosure, which was part of a broad and ongoing conspiracy to deprive Mr. Davis, and similarly situated homeowners, of due process in order to advance the creditors’ and their attorneys’ financial interests.

This case raises significant questions of due process, including whether Colorado can deprive homeowners of property by allowing statutory conclusive presumptions regarding the authenticity of promissory notes. This case tests whether copies of a deed of trust and promissory note, and an unsworn Statement of Qualified Holder, or possession of the promissory note alone, is sufficient to deem ownership, establishing conclusive presumptions without proof and a fair hearing. The current process allows attorneys and their creditor-clients, who may have illegally obtained the notes, to wrongfully deprive consumers of their homes.

OPINIONS BELOW

The opinion of the Court of Appeals is reported at 2018 WL 2676893 (10th Cir. 2018). The Opinion of the District Court is reported at 2016 WL 8670507 (D. Colo. 2016). These rulings are reprinted in the accompanying Appendix.

JURISDICTION

The judgment and order of the Tenth Circuit Court of Appeals was entered on June 5, 2018. On or about August 10, 2018, this Court granted an extension of time within which to file a petition for a writ of certiorari to and including November 1, 2018. The jurisdiction of this Court rests on 28 U.S.C. 1254(1).

CONSTITUTIONAL AMENDMENTS, AND STATUTES INVOLVED

Relevant parts of Amendment XIV of the U.S. Constitution, 42 U.S.C. § 1983, Colorado Statute § 3838-101 and Colorado Rule 120 are reprinted in the accompanying Appendix.

STATEMENT OF THE CASE

Mr. Davis filed a § 1983 complaint in 2016 as an owner of the property through a 2009 quitclaim deed under which his wife, Valorie Briggs, transferred ownership to Davis (as well as allodial title through a land patent issued by the Bureau of Land Management, and a recorded Lis Pendens warning prospective purchasers of the pending lawsuit for declaratory, injunctive and other relief, and his status as the adverse possessor (via, e.g., payment of taxes on the property for eight years). Mr. Davis sought relief from the unconstitutional amendment and application of Colorado’s foreclosure law in a manner that denied him due process rights.

His complaint alleged that the creditor favoring amendments to the Colorado foreclosure statute drafted by two private creditor attorneys were part of a conspiracy to deny due process to homeowners, and that the trust had knowledge that it was subjecting Mr. Davis to a constitutionally defective foreclosure. The complaint also asserted that Colorado had voluntarily and impliedly waived sovereign immunity by enactment of the foreclosure Rule. The District Court dismissed his complaint for failure to state a claim and the Tenth Circuit Court affirmed the dismissal.

During the eviction proceedings, the court dismissed Mr. Davis’s claim that the bank must show that value was paid in exchange for the Note because the trust was a “qualified holder” of the debt instrument. The court allowed the trust to evict Mr. Davis without the trust having to prove valid ownership of the debt. Possession of the note was deemed sufficient. There was no opportunity for Mr. Davis to present his constitutional challenge. Thus, opportunists now have the ability to steal notes, foreclose and acquire homeowners’ properties without due process. Evicted homeowners have been filing cases, largely pro se because of their poor financial conditions, attempting to challenge these unconstitutional takings, to no avail.

REASON FOR GRANTING THE WRIT

The Tenth Circuit’s Decision Directly Conflicts With This Court’s Decision in Fuentes by Allowing an Eviction Via Application of a Foreclosure Statute That Eliminates Defenses and Deprives Homeowners of Homes Without a Fair and Meaningful

In Fuentes v. Shevin, 407 U.S. 67 (1972), this Court ruled that two state’s replevin provisions, which allowed for temporary deprivation of personal property without due process of law by denying the right to a prior opportunity to be heard, were invalid under the Fourteenth Amendment. Id. at 68, 80-93. Here, a homeowner was deprived of his real property without a prior opportunity to be heard. The summary proceedings, in which conclusive presumptions were allowed to establish ownership of the debt, violated Mr. Davis’s constitutional rights in an even more significant way, as his home is a necessity. See also Goldberg v. Kelly, 397 U.S. 254 (1970). As a result of this unconscionable foreclosure and eviction, Mr. Davis’s home became his car. The same fate has befallen many other consumers whose home has been foreclosed upon and have been evicted through the constitutionally deficient foreclosure and eviction procedure Colorado presently employs. Colo. R. Civ. P. 120.

The Fourteenth Amendment’s due process clause provides that no State may “deprive any person of life, liberty, or property, without due process of law.” U.S.Const. Amend XIV, § 1. “Under the Due Process Clause’s requirements, procedural due process ensures the state will not deprive a party of property without engaging fair procedures to reach a decision, while substantive due process ensures the state will not deprive a party of property for an arbitrary reason.” Pater v. City of Casper, 646 F.3d 1290, 1293 (10th Cir. 2011) (internal quotation marks omitted).

This Court has been a steadfast guardian of due process rights when what is at stake is a person’s right “to maintain control over [his] home” because loss of one’s home is such a great deprivation. United States v. James Daniel Good Real Property, 510 U.S. 43, 5354 (1993). Courts have held that even “a small bank account” is sufficient to trigger due process protections. See Nat’l Council of Resistance of Iran v. Dept. of State, 251 F.3d 192, 202-205 (D.C. Cir. 2001) (citing Russian Volunteer Fleet v. U.S., 282 U.S. 481, 489-92 (1931)).

Yet, under Colorado law, as amended by the two attorney Respondents, Colorado’s non-judicial foreclosures are based only on a reasonable probability that there is a default and that the homeowner is not subject to the Service Members’ Civil Relief Act. The eviction is presided over by a judge who determines only possession. C.R.S.A. § 3838-101. There is no prior or post deprivation hearing provided.

Respondents were not required to produce the original debt documents.

Two private creditor attorneys, who are among the Respondents, had lobbied the Colorado Legislature to modify the foreclosure procedure, which was accomplished in 2006.

The amendments drafted by these attorneys allow, “in lieu of the original evidence of debt,” a copy of the evidence of debt with “a certification signed and properly acknowledged by a holder of an evidence of debt . . . or a statement signed by the attorney for such holder” under specified conditions. C.R.S.A. § 38-38101(1)(b)(II) (2006).

Under this statute, the homeowner is given no opportunity to question such evidence, even if the creditor produces purportedly original home loan documents. Rather, the judge below relied on Deutsche Bank’s production of an indorsed original note. Mr. Davis was not given the opportunity to question Deutsche Bank’s witness regarding the veracity of the note or its endorsement.

Mr. Davis also contended that Deutsche Bank was required to prove that it paid value for the note. However, the court ruled that Colorado foreclosure law provides that a “person in possession of a negotiable instrument evidencing a debt, which has been …indorsed in blank,” is presumed to be the holder of the evidence of debt. § 3838- 100.3(10) (c) (2015) (emphasis added). The court noted that “Colorado law does not limit enforcement of an Obligation to a holder who received the instrument through negotiation. A note may also be enforced by a transferee.” Miller v. Deutsche Bank Nat’l Trust Co. (In re Miller), 666 F.3d 1255, 1264 (10th Cir. 2012). Mr. Davis was given no opportunity to dispute the transfer. It is possible that the note was obtained through unlawful means.

Allowing evictions based on as conclusive presumptions as found in the amended Colorado statutes in summary proceedings against homeowners violates due process rights.

Prior to the amendment changing the Colorado foreclosure process to favor the creditors, in 1989, the Colorado Supreme Court, in response to due process concerns, explicitly required that the real party in interest be considered prior to foreclosure and eviction. Goodwin v. Dist. Ct., 779 P.2d 837 (1989).

According to the Court:

The message of Moreland [v. Marwich, Ltd., 665 P.2d. 613, 617-618 (Colo. 1983) (en banc)] is clear. The due process protections contemplated by Rule 120 will be satisfied only when a court conducting a Rule 120 proceeding considers all relevant evidence in determining whether there is a reasonable probability of a default or other circumstance authorizing the exercise of the power of sale under the terms of the instrument described in the Rule 120 motion. The court’s resolution of the Rule 120 motion, therefore, should necessarily encompass consideration not only of the evidence offered by the creditor seeking the order of sale but also of any evidence offered by the debtor to controvert the moving party’s evidence or to support a legitimate defense to the motion. A court’s refusal to consider such properly offered evidence in resolving the issue of default adversely to the debtor is tantamount to the taking of property in a summary fashion without any hearing at all—a deprivation clearly violative of due process of law.

Id. at 842.

Colorado Rule of Civil Procedure 17(a) requires that “every action “shall be prosecuted in the name of the real party in interest.” The real party in interest is that party who, by virtue of substantive law, has the right to invoke the aid of the court in order to vindicate the legal interest in question. That inquiry is no longer allowed by the Colorado foreclosure and eviction process.

The Colorado Supreme Court observed that Colorado Rule 120(a) authorizes “any interested person” to file a motion for an order of sale, and Rule 120(c) permits the debtor to dispute the moving party’s entitlement to the order.

Implicit in Rule 120 is the requirement that the party seeking an order of sale have a valid interest in the property allegedly subject to the power of sale. Unless the “real party in interest” defense is considered at a Rule 120 hearing, any order for sale might well result in the sale of property in favor of a party who has no legitimate claim to the property at all. Once a debtor in a Rule 120 proceeding raises the “real party in interest” defense, therefore, the burden should devolve upon the party seeking the order of sale to show that he or she is indeed the real party in interest.

Id. at 843-844 (emphasis added).

If the mortgagor asserts a “real party in interest” defense whereby he or she asserts that the party seeking to sell the property “has no legitimate claim to the property at all, . . . the burden should devolve upon the party seeking the order of sale to show that he or she is indeed the real party in interest.” Id. at 843; Mbaku v. Bank of America, 628 Fed. Appx. 968, 973 (10th Cir. 2015) (quoting Goodwin v. Dist. Ct., 779 P.2d at 843).

While requiring plaintiffs in foreclosure actions to prove legal ownership of the underlying note and mortgage would create an administrative burden, it is a burden that is basic to all civil litigation – standing to sue. See Warth v. Seldin, 422 U.S. 490, 498 (1975) (standing “is [a] threshold question in every federal case, determining the power of the court to entertain the suit”); Alpine Associates, Inc. v. KP&R, Inc., 802 P.2d 1119 (Colo. 1990) (it is necessary for the plaintiff to prove, in addition to the basic elements of its case, its status as an assignee). The proper burden of proving standing is ignored under the present Colorado foreclosure process.

Mr. Davis asserted that the trust was not the real party in interest. He maintains, for instance, that there was a failure to pay value for the note. See Baker v. Wood, 157 U.S. 212 (1895) (holding in a Colorado assignment that the holder in possession of the negotiable instrument “…cannot have judgment unless it appears affirmatively from all the evidence, whether produced by the one side or the other, that he in fact purchased for value); Deutsche Bank v. Samora, 321 P.3d 590 (Colo. Ct. App. 2013) (“for Samora to prevail, she must show that Deutsche Bank as trustee is not advancing a claim by the Trust as a holder in due course of the Note and Deed of Trust”). In this case, Deutsche Bank as trustee “is not advancing the claim of the Trust as a holder in due course of the Note and Deed of Trust” which requires the Trust to have paid value for the note. “If the person seeking enforcement of the instrument does not have rights of a holder in due course and the [mortgagor] proves that the instrument is a lost or stolen instrument,” a mortgagor has a valid defense to payment and foreclosure. Mbaku v. Bank of America, 628 Fed. Appx. at 973; U.C.C. § 4–3–305(c). The court ignored this claim.1 Mr. Davis was wrongfully denied his right to raise this defense. Thus, the conclusive presumptions applied under Rule 120, as amended, violate due process rights.

The purpose of a Colorado Rule 120 hearing in a foreclosure action is to subject the creditor’s claim of default to judicial scrutiny to protect the debtor from egregious ex parte foreclosures. Kirchner v. Sanchez, 661 P.2d 1161, 1163-1164 (Colo. 1983) (citing Valley Dev. at Vail v. Warder, 192 Colo. 316, 557 P.2d 1180 (1976)).

 The consumer protection goal of Colorado foreclosures was gutted by the amendments drafted by the creditor attorney Respondents.

The 14th Amendment’s guarantee of procedural due process is meant to protect persons not from deprivation, but from the mistaken or unjustified deprivation of life, liberty or property.

The Court repeatedly has emphasized that “procedural due process rules are shaped by the risk of error inherent in the truth finding process.” Mathews v. Eldridge, 424 U.S. 319, 344 (1976).

Such rules “minimize substantively unfair or mistaken deprivations of life, liberty, or property by enabling persons to contest the basis upon which a State proposes to deprive them of protected interests.” Id. The requirement that governments must generally provide a fair process before confiscating property is a rule, not a suggestion. Colorado’s foreclosures and evictions process, as amended in 2006, conflict with decades of Supreme Court precedent and core constitutional protection. Id.; compare Moreland v. Marwich, Ltd., 665 P.2d. 613, 617-618 (Colo. 1983) (en banc) (Colorado’s foreclosure rule “has been expanded in scope for the purpose of according debtor due process protections against summary foreclosure actions consistent with those protections against deprivations of property without a prior judicial hearing that have received recognition in a line of modern decisions of the United States Supreme Court.

See North Georgia Finishing, Inc. v. Di–Chem, Inc., 419 U.S. 601 (1975) (procedures for prejudgment garnishment of bank accounts violate due process); Fuentes v. Shevin, supra (prejudgment replevin procedures violate due process);

Sniadach v. Family Finance Corp., 395 U.S. 337 (1969) (prejudgment garnishment procedures relating to wages violate due process); cf. Mitchell v. W.T. Grant Co., 416 U.S. 600 (1974) (procedure for writ of sequestration in advance of judgment consistent with due process).

The Supreme Court’s Mathew’s analysis requires consideration of: (1) the private interest affected by the official action; (2) the risk of an erroneous deprivation of that interest through the procedures used, as well as the probable value of additional safeguards; and (3) the Government’s interest, including the administrative burden that additional procedural requirements would impose. The Court determined that the importance of the private interests at risk and the absence of countervailing governmental needs presented in the context of seizure of real property in a civil forfeiture was not one of those extraordinary instances that justify an exception to the general rule requiring predeprivation notice and a meaningful hearing. U.S. v. James Daniel Good Real Property, 510 U.S. 43, 52 (1993) (citing Mathews). “The right [of an individual] to maintain control over his home, and to be free from governmental interference, is a private interest of historic and continuing importance.” Id. at 53- 54.

Despite clear Supreme Court precedent, thousands of homeowners are divested each year of available remedies to dispute creditors’ entitlement to foreclose by statutory conclusive presumptions that courts substitute for proof.2 Merely allowing, as Colorado does, an unsworn statement to attest to the authenticity of loan document copies is constitutionally deficient. “Statutes creating permanent irrebuttable presumptions, which are neither necessarily nor universally true, are disfavored under both the Fifth and Fourteenth Amendments, because they preclude individualized determination of the facts upon which substantial rights or obligations may depend.” Vlandis v. Kline, 412 U.S. 441, 448 (1973); see also Valley Dev. at Vail v. Warder, 192 Colo. 316, 557 P.2d 1180 (1976) (reaffirming Princeville Corp. v. Brooks, 533 P.2d 916 (1975)’s holding that C.R.C.P. 120 entitles debtor and subordinating creditor to a due process hearing on issue of foreclosure or accumulated indebtedness alleged to be in default).

Creditors are relieved from having to prove entitlement, despite Supreme Court precedent to the contrary. There is little regard given to consumers’ property rights. The Supreme Court must settle this important question of federal law, lest corruption of foreclosure proceedings in Colorado will continue, unchallenged.

Two Foreclosure Attorneys’ Agreement to Act in Concert to Benefit Themselves and Their Creditor Clients Is Implied When They Became De Facto Legislative Staff Attorneys Who Acted With Legislators to Statutorily Eliminate Creditors’ Burden of Proof in Foreclosure Actions.

“Broadly described, the intent of section 1983 was to create a civil remedy for persons who prove that one acting under color of state law has illegally deprived them of rights guaranteed by the federal constitution or by federal law.” Espinoza v. O’Dell, 633 P.2d 455, 460 (Colo. 1981). Section 1983 provides:

Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.

42 U.S.C. § 1983.

The actions of Respondents in this case squarely fall within the parameters of this statute.

Between 2002 and 2006, the Public Trustee Association sought to streamline the foreclosure process in the Rule 120 foreclosure process and asked the Colorado State Bar to refer an attorney to make suggestions.

The State Bar referred Lawrence E. Castle and Robert J. Hopp, who were foreclosure attorneys at that time, to the association.

This began an intimate relationship between the foreclosure attorneys and the legislators, who are state officials. Castle and Hopp, private foreclosure attorneys who work on behalf of creditors, became de facto staff attorneys of the legislature. They were given free rein to draft amendments to Colorado statute section 3838-101 that wrongly favored their creditor clients and deprived homeowners of their due process rights.

Their actions were by no means mere “lobbying,” as the District Court characterized their participation in the statutory amendment process.

These creditor attorneys willfully participated with legislators to usurp and corrupt official power.

By their design, there was a surrender of judicial power to private creditors such that the independence of enforcing officers was compromised in the judicial process, rendering homeowners defenseless in the non-judicial Rule 120 foreclosures.

These creditor attorneys acted with state legislators to deprive homeowners of due process rights. Adickes v. H. Kress & Co., 398 U.S. 144, 152 (1970) (“the private party’s joint participation with a state official in a conspiracy to discriminate would constitute both ‘state action essential to show a direct violation of petitioner’s Fourteenth Amendment equal protection rights’ and action ‘under color’ of law for purposes of the statute.”);

Gallagher v. Neil Young Freedom Concert, 49 F.3d 1442, 1453 (10th Cir. 1995) ( “State action is . . . present if a private party is a willful participant in joint action with the State or its agents.”) (internal quotation marks omitted).

They are thus subject to liability under section 1983. Id.

These attorneys drafted the 2006 amendments to favor themselves and their creditor clients. The legislators rubber-stamped their drafts. Castle and Hopp assisted the State in depriving homeowners of their due process rights, as set forth above.

Violations of Established Constitutional Law by Colorado’s Non-Adjudicative, Non- Adversarial Limited Foreclosure and Eviction Proceeding Renders Judges and Public Trustees Without Judicial and Qualified Immunity and Subject to Section 1983

Section 1983 provides a remedy for deprivation of constitutional rights when that deprivation takes place “under color of any statute, ordinance, regulation, custom, or usage” of a State. 42 U.S.C. § 1983.

In Lugar v. Edmondson Oil Co., Inc., The Supreme Court considered the relationship between the requirement of “state action” to establish a violation of the Fourteenth Amendment and the requirement of action “under color of state law” to establish a right to recovery. 57 U.S. 922 (1982). In Lugar, the Court said:

The statutory scheme obviously is the product of state action, and a private party’s joint participation with state officials in the seizure of disputed property is sufficient to characterize that party as a “state actor” for purposes of the Fourteenth Amendment. Respondents were, therefore, acting under color of state law in participating in the deprivation of petitioner’s property.

Id. at 939-942.

State action occurred when the legislature introduced and passed section 38-38-101 with the willful participation of Respondent attorneys and the other Respondents, involving significant state participation by judges, Public Trustees and sheriffs. Id. at 941; Brentwood Academy v. Tennessee Secondary School Athletic Assoc., 531 U.S. 288, 296 (2001).

Private persons, jointly engaged with state officials in a challenged action, are acting “under color” of law for purposes of 1983 actions. Dennis v. Sparks, 449 U.S. 24, 25-29 (1980); see Lugar v. Edmundson Oil, 457 U.S. 922, 939-942 (1982) (insofar as petitioner’s complaint challenged the state statute as being procedurally defecting under the Due Process Clause, he did present a valid cause of action under § 1983).

In Shelley v. Kraemer, 334 U.S. 1 (1948), this Court held that the use of a court to enforce a restrictive covenant could be state action because the court was essentially participating in the discrimination by enforcing the facially discriminatory covenant. Similarly, in Doehr, the Court recognized that although prejudgment remedy statutes ordinarily involve disputes between private parties, there is significant governmental assistance by state officials and through state procedures. Specifically, the Court acknowledged that prejudgment remedy statutes “are designed to enable one of the parties to ‘make use of state procedures with the overt, significant assistance of state officials,’ and they undoubtedly involve state action ‘substantial enough to implicate the Due Process Clause.’ ” Connecticut v. Doehr, 501 U.S. 1, 11 (1991) (quoting Tulsa Professional Collection Services, Inc. v. Pope, 485 U.S. 478, 486 (1988)); see also Brinkerhoff-Faris Trust & Savings Co. v. Hill, 281 U.S. 673 (1930); Dieffenbach v. Attorney General, 604 F.2d 187, 194 (2d Cir. 1979) (finding that the use of Vermont’s strict foreclosure statute, which required the mortgagee to go to court to obtain a foreclosure, granted the court discretionary power to change the statutory period of redemption, obligated the creditor to obtain a writ of possession after the redemption period expired, and generally “directly engage[d] the state’s judicial power in effectuating foreclosure,” was enough to show that there was state action in the foreclosure process); Turner v. Blackburn, 389 F. Supp. 1250 (W.D.N.C. 1975); Valley Dev. at Vail v. Warder, 192 Colo. 316, 557 P.2d 1180 (Colo. 1976); New Destiny Dev. Corp. v. Piccione, 802 F. Supp. 692 (D. Conn. 1992).

Judges enjoy absolute immunity from liability in damages for their judicial or adjudicatory acts, primarily in order to protect judicial independence by insulating judges from vexatious actions by disgruntled litigants.

Truly judicial acts, however, must be distinguished from the administrative, legislative, or executive functions that judges may occasionally be assigned by law to perform.

It is the nature of the function performed–adjudication–rather than the identity of the actor who performed it –a judge– that determines whether absolute immunity attaches to the act. Forrester v. White, 484 U.S. 219, 225-229 (1988).

Qualified immunity is a powerful tool that shields individual officials who are performing discretionary activities unless their conduct violates “clearly established statutory or constitutional rights of which a reasonable person would have known.” Harlow v. Fitzgerald, 457 U.S. 800, 817 (1982).

The Colorado foreclosure proceedings are nonfinal, non-adversarial and non-adjudicative.

The court in a Rule 120 proceeding accepts conclusory allegations to support the creditor’s entitlement to foreclose, as well as conclusive presumptions without proof. 3

Mere possession of the note is deemed sufficient to conclude the creditor’s standing, holder, holder in due course, and therefore the real party in interest, shutting the door to the right of the homeowner to dispute the creditor’s entitlement to foreclose.

The right of due process is a constitutional right of which a reasonable person should know, as here, specially all Respondents in this case.

When actions of judges are not adjudicative, as here, judges are liable for section 1983 claims. Forrester, 484 U.S. at 223-230.

Even if the homeowner raises the real party in interest defense supposedly allowed under Rule 120(c), the judge would not require the creditor to prove entitlement to foreclose as a holder in due course, nor does it require, despite the court’s rules, the alleged holder to identify the real party in interest, which is the owner. Rule 17(a) requires that “[e]very action shall be initiated in the name of the Real Party in Interest.” Colo. 1 Civ. P. 17(a) (emphasis added). Proof of ownership is ignored in these proceedings.

A person acting under color of state law who “subjects, or causes to be subjected, any citizen of the United States . . . to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured.” 42 U.S.C.1983.

Deutsche Bank was a state actor subjecting it to liability under section 1983 because it utilized constitutionally deficient state law to foreclose on Mr. Davis’s property and received significant aid from Respondents Judge Weishaupl and Public Trustee Mares, both of whom are public officials.

Respondent Deutsche Bank acted jointly with a state judge and a public trustee.

“State action is . . . present if a private party is a willful participant in joint action with the State or its agents.”

Gallagher v. Neil Young Freedom Concert, 49 F.3d 1442, 1453 (10th Cir. 1995). All Respondents acted together to deprive Mr. Davis and multiple other homeowners of due process and their homes.

Deutsche Bank, Castle and Hopp conspired together and with state officials to pass the legislation modifying the Colorado foreclosure procedure to favor creditors. The amended complaint alleged that Castle and Hopp drafted the legislative bill and “engag[ed] with” a state elected representative who sponsored the bill.

All Respondents are subject to liability pursuant to section 1983.

CONCLUSION

For all of the foregoing reasons, the petition for a writ of certiorari should be granted. The lower court’s interpretation and application of the foreclosure and eviction rules is a perversion of Rule 120’s purported mandate of protecting homeowners. If Rule 120 and the Fuentes decision are to provide the important consumer protections that have been evaded by multiple creditors like those in this case, certiorari must be granted. Likewise, the State actors who manipulated the legislation to change the foreclosure procedure to favor creditors must be held liable for their actions in depriving multiple homeowners of their due process rights.

Respectfully submitted,

 /s/ Jon D. Pels

Jon D. Pels, Esq.
Counsel of Record

Maria Leonard Olsen, Esq.

The Pels Law Firm, LLC
4845 Rugby Avenue, Third Floor Bethesda, MD 20814
(301) 986-5570;(301) 986-5571 fax
jpels@pelslaw.com

Counsel for Petitioner, John A. Davis

Judge fines foreclosure law firm $1.8 million for bogus billings
Hopp Law Firm found to have over-charged consumers for title policies

AUG 4, 2016 | REPUBLISHED BY LIT: MAR 29, 2021

A Denver judge has fined one of the city’s prolific foreclosure attorneys $1.8 million for billing thousands of consumers facing the loss of their homes for title-insurance policies that did not exist.

Robert Hopp Jr. and his now-defunct law firm billed customers fighting foreclosure for policies that were never issued and inflated the cost of the few that were, the Colorado Attorney General’s office argued in a seven-day trial in February.

The 37-page judgement handed down last week by Denver District Judge Shelley Gilman is the latest in a number of cases the state filed in 2013 against lawyers that specialized in foreclosures and allegedly padded their bills for costs that were ultimately borne by consumers losing their homes, the banks foreclosing on them and taxpayers whose federal insurance agencies covered the costs.

Homeowners facing foreclosure had no choice but to pay the costs in order to stop the foreclosure process, and there was no process in place to challenge any of the fees lawyers said they were owed.

Several firms settled the cases against them, including one of the largest — Aronowitz & Mecklenburg — which closed its doors. The largest foreclosure law firm, The Castle Group, also closed, but remains entwined in a bitter court battle against the state and the fraud allegations made against the firm and its principal, Larry Castle.

Hopp was accused in the civil lawsuit of over-billing consumers on more than 2,200 foreclosure cases The Hopp Law Firm and Robert J. Hopp & Associates handled between 2008 and 2014.

Hopp, who currently works at the Denali Law Firm in Littleton, did not respond to efforts to reach him.

“Lawyers abusing the foreclosure process to enrich their private bank accounts is a practice that undermines citizen’s faith in the legal profession,” Attorney General Cynthia Coffman said in a statement. “The substantial penalties imposed by the court are just, and should serve as a strong deterrent to anyone else who wants to prey on homeowners struggling to keep a roof over their family’s heads.”

The lawsuits were originally filed by former Attorney General John Suthers, now the mayor of Colorado Springs, and came after a number of Denver Post stories that uncovered financial connections between foreclosure lawyers and county public trustees who oversee the foreclosure process. The Post also detailed how some law firms charged consumers for foreclosure lawsuits that never existed, as well as financial improprieties by some of the trustees appointed by the governor, several of whom were asked to resign.

The Hopp verdict brings to seven the number of law firms that have either settled or were fined a total of $18 million as a result of the state’s legal actions.

Only the Castle lawsuit remains.

Judge Gilman initially imposed more than $3.6 million in fines against Hopp for violating the state’s Consumer Protection Act and its Fair Debt Collection Practices Act, but state laws cap the maximum that can be fined at $1.8 million.

Gilman also awarded Coffman’s office the fees and costs expended to prosecute the case, an amount that is still to be determined.

Court of Appeals affirms $1 million judgment against Colorado foreclosure law firms

JUN 5, 2018 | REPUBLISHED BY LIT: MAR 29, 2021

The Colorado Court of Appeals affirmed the 2016 trial verdict and more than $1 million in judgments against Denver-area foreclosure law firms Robert J. Hopp & Associates and The Hopp Law Firm, their affiliated title companies, and Robert J. Hopp personally on Tuesday.

The state Court of Appeals agreed with the Denver District Court’s verdict that the billing practices of the law firms and their affiliated companies violated the Colorado Consumer Protection Act and the Colorado Fair Debt Collection Practices Act, according to a news release from the office of Colorado Attorney General Cynthia Coffman.

The appellate court found that the law firms were unlawfully billing its mortgage servicer clients for foreclosure costs they did not actually incur, according to the release.

These unlawful charges, the news release said, were often worth more than $1,000.

“I am very pleased that the Court of Appeals upheld the judgment against the Hopp law firms and their affiliated businesses,” Coffman said. “These defendants took advantage of vulnerable homeowners facing foreclosure, making it even more expensive for people to try to avoid losing their homes. Those that prey on Coloradans in crisis deserve to be held accountable.”