In brief, the mortgagee (the company) must deal with the mortgagor (you, the homeowner) with fairness and good faith. That is generic language, and we have not been able to find any case law that provides specifics. So, that raises this question, which we've been wrestling with since our home of 25 years in Birmingham went through a dubious foreclosure in summer 2014: Did our mortgage company (Chase Mortgage), as part of its duty to deal in fairness and good faith, have an obligation to make sure any judgment liens on our property were legitimate and asserted according to law?
The language of Springer suggests the answer is yes. If that is the case, Chase Mortgage failed miserably in its duty to us. That's because Alabama lobbyist Liberty Duke apparently filed a judgment lien on our property and wound up with $7,112 in surplus foreclosure funds that otherwise would have been ours. (The actual surplus was $9,615.82, but it appears bankers and lawyers sucked off more than $2,500 in "fees.")
Duke's lien grew from a "judgment" against me in the defamation case she and GOP thug Rob "Uday" Riley brought. But a cursory review of the record reveals all kinds of problems with Duke's "judgment." We will focus, for now, on three major flaws. Did Chase Mortgage and its representative, Robert Wermuth from the Huntsville law firm of Stephens Millirons, make any effort to discover these flaws, which would have invalidated Duke's lien? Sure doesn't look like it.
Here are the three glaring flaws in question:
(1) Final judgment? What final judgment?
A judgment lien, such as Duke's, must be based on a final judgment. But Judge Claud Neilson never issued a final judgment in the Riley/Duke lawsuit. Here is how we explained it in an earlier post:
"Neilson didn't issue a final judgment, one that could be appealed at all. After all, there was no trial, no jury, no discovery -- nothing that generally is associated with a trial on the merits. After a hearing on November 14, 2013 -- and the document setting the event called it a "hearing," not a "trial" -- Neilson issued a piece of paper titled "Final Order." But here is what Alabama case law says about such matters: (See Civil Appeals 101, Christian and Small.) (Document setting the Nov. 14 "hearing" is embedded at the end of this post.)
"With limited exceptions, an appeal can be taken only from the entry of a final judgment. Ala. Code § 12-22-2. What constitutes a final judgment may seem simple, but in fact it can be difficult to determine. As you might expect, an order adjudicating fewer than all of the claims is not a final judgment. Lloyd v. Cook, --- So. 3d ----, 2010 WL 3075280 (Ala. Civ. App. Aug. 6, 2010). The title of the order is not important. If a trial court enters an order labeled as a final judgment, but the order does not fully dispose of all claims or fully declare the rights of the parties, the judgment is not a final judgment from which an appeal may be taken. Alfa Mutual Ins. Co. v. Bone, 13 So. 3d 369 (Ala. 2009); Hall v. Reynolds, --- So. 3d ----, 2009 WL 1716912 (Ala. June 19, 2009). By the same token, a judgment that conclusively determines the issues before the trial court, even if not labeled “Final Judgment,” will support an appeal."
Did Neilson "fully dispose of all claims or fully declare the rights of the parties"? Not even close, as we explained in our earlier post:
In the Riley matter, Neilson gave my wife, Carol, and me no opportunity to bring claims, much less have them heard and fully disposed. And he certainly did not declare the rights of the parties because we were treated as if we had no rights. (See Neilson's "final order" at the end of this post.) I was in the midst of a five-month stay at the "Shelby County Sheraton" (the jail), thanks to Riley and Duke's unlawful efforts to seek a preliminary injunction that has been prohibited by more than 200 years of First Amendment law, and the time for appeal lapsed during my incarceration. I had no access to a piece of paper or a functioning writing implement, but even if I'd had the basics for preparing an appeal, there was nothing to appeal -- because Neilson issued no final judgment.
Without a final judgment, there could be no judgment lien on our property. Did Chase Mortgage and its lawyers have a duty to check for that? If they were to deal with us in "fairness and good faith," the answer seems to be yes.
(2) As a matter of law, there was no finding of defamation
Under decades of First Amendment law, a finding on alleged defamation only can be made via a trial, usually a jury trial. A case styled Balboa Island Village Inn v. Lemen, (Cal., 2007) spells it out clearly:
Defendant in the present case objects to the imposition of an injunction prohibiting her from repeating statements the trial court determined were slanderous, asserting the injunction constitutes an impermissible prior restraint. We disagree. As explained below, an injunction issued following a trial that determined that the defendant defamed the plaintiff that does no more than prohibit the defendant from repeating the defamation, is not a prior restraint and does not offend the First Amendment.
In the Riley/Duke case, Judge Neilson acted as a one-man censor, which is prohibited by a case styled Bernard v. Gulf Oil, 619 F.2d 459, 460 (5th Cir. 1980). A finding of defamation can be made only at trial, by a jury (and not a one-man censor), and that never happened in the Riley/Duke case. As a matter of law, my posts were not false nor defamatory, meaning Duke had no legal grounds for her judgment lien. Chase Mortgage and its attorneys, who had a trustee relationship with us, apparently never bothered to see if there was any legal basis for Duke's lien.
(3) There was no monetary judgment against me, only an unlawful award of attorney fees
Contrary to what Riley and Duke would like you to believe, Neilson issued no monetary judgment against me. Instead he granted $33,875 in attorney fees ($24,425 for Riley, $9,450 for Duke). However, Alabama law prohibits an award of attorney fees against pro se parties, such as Carol and me. (The "final order," the setting for a "hearing," and Duke's certificate of judgment are embedded at the end of this post.) From an earlier post on the subject:
Alabama law prohibits the awarding of attorney fees against pro se litigants. Here is how Code of Alabama 12-19-272 (Alabama Litigation Accountability Act) addresses the subject:
"No party, except an attorney licensed to practice law in this state, who is appearing without an attorney shall be assessed attorneys' fees unless the court finds that the party clearly knew or reasonably should have known that his action, claim or defense or any part thereof was without substantial justification."
Did the court find that I had brought a claim or defense without substantial justification? Nope. In fact, I brought no claim at all -- Riley and Duke sued me (and Carol), not the other way around. And we were given no opportunity to even bring a defense.
We are left with a lien that had no basis in law. There was no final judgment upon which a judgment lien could be based, no finding at trial of defamation, and no monetary damages (only unlawful award of attorney fees) that would support a lien.
Under the law, I've never owed Liberty Duke a penny, but Chase Mortgage and its representatives allowed her to abscond with more than $7,000 of our surplus mortgage funds.