Quote from W. Roper ...
ON THE IMPORTANCE OF TIMELY ANSWERING LAWSUIT
In the course of watching various posts to this Message Board and in hearing from several participants in this Forum, I have become increasingly concerned about what appears to be a misunderstanding or misapprehension regarding how critical it is to file an ANSWER to a judicial complaint or petition in foreclosure.
This post comes with the usual admonission that I am NOT an attorney and CANNOT give any of you legal advice. When you are served with court papers -- any official process showing that you are being sued -- you need to endeavor to find and consult a lawyer IMMEDIATELY. And frankly, you also need to very quickly become as well informed as reasonably possible concerning the subject matter of the suit.
The Danger of a Default Judgment
In most states, if a person is sued and fails to timely answer, the plaintiff can obtain a default judgment against that person. Just like a team failing to show up for ball game, if one fails to show up in a judicial adversarial proceeding, in most states, you will LOSE.
Moreover, in most states, after a plaintiff obtains an order or judgment, there is typically a limited amount of time during which the order or judgment can be appealed. If the plaintiff gets a default judgment, the plaintiff will then very often WAIT until the appeal period runs to begin to take further actions.
The process VARIES from state to state. But in most instances of judicial foreclosure, the defendant is sued under the promissory note under the UCC, while the plaintiff simultaneously seeks a judicial order of foreclosure in equity. Plaintiff strategies vary. But letting the plaintiff get a default under either the promissory note OR the mortgage is usually a very BAD thing.
In most places, after an order or judgment is entered by a trial court, that court loses jurisdiction to set aside its own orders, even if ERRONEOUS, after a certain period of time. Similarly, appellate courts both gain and lose jurisdiction after an order is finalized through the passage of time. That is, an appellate court is typically only entitled to DISTURB a lower court's ruling while that appellate court has jurisdiction over the matter.
So when the appellate period PASSES, the borrower usually LOSES the right to bring an appeal! Moreover, even when appeals are HEARD, many courts limit the arguments that may be made on appeal to issues raised in the lower court. If the borrower fails to make arguments in the lower court, these arguments are frequently deemed WAIVED when the matter is taken up on appeal. So when a borrower LOSES by a default judgment, very often not only has the borrower lost the very first (and usually conclusive round), but also the borrower may have WAIVED some of the very best defensive arguments!
As with any rules their ARE EXCEPTIONS. The exceptions are many and varied and the laws of the borrower's jurisdiction need to be consulted to ascertain whether a matter may be reopened later. If you have already suffered a default judgment, you should still consult a lawyer!
Motion for a New Trial
If you have already suffered a default, READ THE Rules and consult with a lawyer to learn whether you are still eligible to file a motion for a new trial. Do NOT count on getting a new trial. Do your utmost to avoid default. But IF you have suffered a default, check with a lawyer and explore your options.
Restricted Appeal or Bill of Review
Some jurisdictions allow some form of restricted appeal of judgments or for erroneous orders to be set aside by bill of review for a longer period than the normal appeals period. Most often, the later appeal or bill of review is possible only where there is some showing that the defendant was effectively denied an opportunity to make their case, as in when notice was defective or where some material official mistake was made.
There are many cases assuring that defendants are accorded due process rights, and particularly effective, timely notice of adversarial proceedings.
I mention these NOT to give anyone a reason to DELAY, but rather to better assure that those in doubt about their individual circumstances consult a qualified attorney in thier jurisdiction to explore their alternatives.
The THEME of this post, rather, is that it is imperative to AVOID allowing the plaintiff to obtain a default judgment.
Look To Your State's Court Rules and Statutes
Most states have Court Rules which govern civil litigation. Very often these will be called something like the "Rules of Civil Procedure" or "Rules of Court". These vary from state to state and get complicated quickly, so unless you have a very strong legal background, time, patience and a commitment to research, you need to look to an attorney to explain to you what these Rules mean.
But this doesn't mean that you shouldn't acquaint yourself with the Rules. Look the Rules for your state up and READ THEM. Most are available ONLINE. Read them TWICE or THREE TIMES. Then re-read the petition or complaint against you and read the Rules once more.
The Rules will generally set out the time period during which the defendant must ANSWER. And the Rules will usually set forth the circumstances under which a plaintiff is entitled to a default judgment.
Other particularly critical aspects of the Rules as they pertain to the answer include the parties' ability to later supplement and/or amend pleadings. These are the sorts of Rules that vary widely between and amngst the states. Some states allow liberal amendment to the pleadings for an extended period of time. Other states restrict amendments.
The time frame within which the defendant is permitted to answer and the liberality in allowing amendments should usually control the balance between getting things precisely RIGHT and getting things done ON TIME.
The KEY idea is that when properly SERVED, the defendant DOES need to timely answer and the first answer may need to be more or less complete depending upon the Rules as they pertain to amended pleadings.
In reading the Rules, bear in mind that there may be certain other procedural enactments BY STATUTE rather than by RULE. The Statutes and the Rules need to be READ TOGETHER, as in some instances these evolved and devloped separately.
A Note About Service and Special Appearance
To emphasize the complexity of things, it is helpful to add that there exists a special circumstance under which an answer MIGHT prove to be undesirable. But this circumstance is so arcane that it cries out for you to consult a LAWYER.
The unusual circumstance would be where the person named in the suit papers wasn't ever properly SERVED with the suit papers. Suppose, for example, that you were on a business trip to Los Angeles and the suit papers were personally served on another person (other than yourself) at OTHER THAN your place of business or place of residence in Cleveland. Suppose that rather than serving John Q. SMITH at 1234 Main Street that the suit papers are serve on John A. SMYTHE at 1243 Colts' Mane Road. SMYTHE has signed for the papers. John Q. SMITH never received them. SMYTHE and SMITH are unrelated. SMITH can PROVE that he was in Los Angeles on the date of the alleged service.
The circumstances stated above are deliberately stark. There are obviously many more ambiguous cases.
These include MISNOMER cases where the wrong person was named and served and SERVICE cases where the right person was named but the suit papers were served on the wrong person at the wrong place. Some states, such as Texas, prohibit service on Sundays and Sunday service is therefore inherently DEFECTIVE.
The entire area is a minefield and requires a very capable lawyer and a very careful study of applicable cases. But the point is this... When the defendant ANSWERS, the defendant typically WAIVES any defects in service. So IF there is any notice-related defense to the suit (which defense is USUALLY CURED by simply CORRECTING the service defect -- a speed bump for the plaintiff rather than a brick wall), it is important to bear in mind that answering may WAIVE this defense.
There exists in most jurisdictions a special sort of answer called a "special appearance" wherein the defendant answers ONLY to challenge the Court's jurisdiction in the case. And sometimes, such a special appearance can be made in conjunction with an alternative answer. The bottom line though is that unless your notice problem is particularly stark it is probably best to ANSWER in some way rather than to risk a default (this might take the form of special appearance OR of special appearance with alternative answer). But because this is NOT universally true, the best answer is to CONSULT A LAWYER about the advisability of answering. But PLEASE do NOT hesitate to read the Rules YOURSELF and to answer in some way if you have been properly served and do not have or cannot afford a lawyer!
The General Denial
Some jurisdictions allow a defendant to simply generally deny the plaintiff's complaint or petition. The general denial might be as simple as "I generally deny each and every allegation and claim of the plaintiff and demand strict proof of the same", or similar words to this effect.
Look to YOUR STATE's Rule's as to WHETHER a general denial is adequate. Look to legal form's books in YOUR STATE for a standard legal form for a general denial that is acceptable for use in YOUR STATE. But it would be BEST to consult a lawyer with knowledge and experience in consumer debt / foreclosure and even bankruptcy law.
If you MUST file something pro se, and plead various special defenses, investigate whether a blanket general denial is also allowed.
Bear in mind that a general denial in most states is (a) going to constitute an appearance negating any claims regarding defect in service [if not plead in conjunction with a special appearance] and (b) will PRECLUDE the plaintiff from getting an immediate default judgment [though the defendant is still going to have to MAKE subsequent scheduled court appearances for hearings and trials].
Challenges To Jurisdiction and Capacity
In most places, a general denial will NOT serve to raise a jurisdictional question as to the plaintiff's standing. Neither will it usually raise the issue of the plaintiff's capacity. These usually need to be expressly and separately pled.
This Post is NOT about jurisdiction and capacity, but rather about the importance of answering. Defendants are encouraged to study the law and the Rules of thier own jurisdiction to ascertain HOW to plead defects as to jurisdiction and capacity. There is also some other good discussion relating to standing and capacity in other posts within this forum.
It would generally be BEST to consult a capable lawyer!
Other Defects In Parties
Identifiable defects in parties may also need to be expressly pled, sometimes as a plea in abatement. Bear in mind that in Equity, usually ALL of the necessary parties must be before the Court in order to obtain the requested relief. So if everyone (to include other lien holders) is not named and before the court, this can be a valid reason to delay the foreclosure until the defect is cured.
One must balance the desirability to interpose valid defenses with the advisability of showing the plaintiff too any of their mistakes too early. A defect in parties MIGHT be something to save for an amended pleading, IF amendments are freely allowed. This is a tactical question and the correct answer may not only depend upon the LAW, but also the identity and personality of the judge. This is yet another example of why it is HELPFUL to get an attorney who is an experience litigator and who is ACQUAINTED with your judge and practice before that judge.
Again, there are often a number of affirmative defenses that a borrower might plead including TIL and RESPA violations, fraud, failure of consideration, accord and satisfaction, failure to satisfy conditions precedent, usary, limitations, and especially equitable defenses such as the "clean hands doctrine", laches, and "failure of the plaintiff to do equity" [these are intended to be exemplary NOT exhaustive].
In some states, certain affirmative defenses must be pled under oath. Obviously, the defendant must AVOID interposing frivolous or unfounded defenses, and this must be particularly avoided when the defendant must SWEAR to the defense.
If you engage an attorney, then the attorney should be readily able to prepare your answer to include applicable affirmative defenses. If you must prepare your own answer, you need to carefully weigh premature inclusion of defenses against the difficulty in amending the pleading later.
Making the Same Argument in More Than One Way
Sometimes precisely the same FACTS give rise to more than one argument or the same argument presented in slightly different ways. For example, suppose that the plaintiff bringing the action doesn't actually OWN the mortgage indebtedness. This might give rise to a plea to the jurisdiction citing standing and/or real party in interest. It may give rise to a capacity argument. It might also give rise to a plea in abatement alleging that all of the necessary parties have not been named and served and are therefore NOT beforethe court. Similarly, in some jurisdictions, a party may be required to identify certain pleading defects by special exception, requesting the court strike the excepted pleadings and allowing the other party to replead. In those states, the standing problem might also be correctly pled as a special exception as to defect in parties.
One needs to be careful and cognizant NOT to make arguments which are contradictory (EXCEPT in the altrernative) or which appear to be unnecessarily repetitive or repetitious. But an argument might gain better traction clothed one way than the other.
Getting the arguments focused and RIGHT can require a LOT of research, thinking and WORK!
Everybody Needs To Answer
One MISTAKE I have already encountered in postings and correspondence is for less than ALL of the identifiable defendants to ANSWER. For example, suppose that John and Mary SMITH are named and served with the suit, BOTH John SMITH AND Mary SMITH need to ANSWER the suit.
In one instance, someone showed me the complaint and their answer and I asked if the other person (spouse) had answered. When I asked this, I learned that a default had already been enterred against the non-answering spouse.
When John and Mary SMITH engage an attorney, he can usually ANSWER for both defendant's usually in the same pleading. Where John and Mary SMITH are answering pro se, BOTH John SMITH and Mary SMITH may need to answer and occasionally, in some jurisdictions, they may need to answer separately.
That is because neither of these defendant's is permitted to act as the attorney for the other and actually neither should really even be preparing pleadings for the other!
If one person answers and the other fails to answer, the plaintiff will usually obtain a default judgment against the person who fails to answer. This can usually be avoided by pro se litigants by each filing their own separate answer, even if these are substantially identical.
Signing of the Pleadings
Where represented by an attorney, the attorney usually signs the pleadings on the defendant's behalf and thereby enters an appearance on the defendant's behalf. Those who choose to or must represent themselves pro se, because they cannot find or afford an attorney need to carefully read the law and the Rules for their jurisdiction to ascertain the requisites for a signature on the pleadings.
In some places and in some courts, pro se pleadings must be sworn or at least acknowledged. In certain states, certain defenses must be sworn. In preparing your draft or final answer, READ THE RULES AGAIN and verify that your answer is strictly in compliance.
Usually, each pro se litigant is going to have to sign separately and neither can sign for the other.
Understanding the Law
While I would encourage EVERYBODY litigating to get an attorney, I would separately encourage each person to READ the Court Rules and the statutes which pertain to their individual case, as well as at least to survey leading cases interpretting the law.
This can be very time consuming.
But here is the inherent problem in obtaining good competent representation and mounting an effective defense. The BORROWER tends to best understand the FACTS in the case. The attorney tends to generally better understand the law and courtroom practice. But there is so much law to UNDERSTAND that your attorney cannot be readily familiar with all of the relevant cases pertaining to YOUR facts unless he engages in extensive additional research and reading. And if NOT already an expert, you might have to PAY FOR his study.
I learned this painfully once with respect to a matter of intellectual property law. I engaged the services of a blue chip law firm to prepare some non-disclosure agreements and licensing contracts. At some point in the preparation, I was told that there might be an issue relating to franchise law. An associate at the firm then billed many hours to understand this aspect of franchise law. I was aghast at the legal bill! When I later discussed the matter over drinks with my real estate lawyer, he told me that I had gone to the WRONG lawyer. The lawyer who WROTE THE BOOK on franchise law was practicing just down the street and would have ALREADY KNOWN the answer without the necessity of hours of study or research.
Happily, if you obtain an attorney with consumer debt collection, mortgage foreclosure and/or bankruptcy experience, that attorney will already have a very good grounding in the law as it pertains to YOUR CASE. But much has changed in the mortgage marketplace since older attorneys went to law school. And attorneys unfamiliar with mortgage foreclosure practice cannot readily conceive of of the unethical, unscrupulous and illegal tactics in which attorneys for foreclose mills routinely engage. For a general practictioner or lawyer with a different specialty, there is TOO MUCH reading and learning to do to mount an effective defense without charging the borrower / client far more than the client can afford. So the defendant's attorney will very often have to take short cuts.
In short, most borrowers CANNOT AFFORD to pay their attorneys to LEARN the applicable law, NOR can most borrowers AFFORD to pay their attorneys to become intimately acquainted with the FACTS in thier individual case. So if the defendant wants to be WELL REPRESENTED, the defendant is going to need to leverage their lawyer's legal training and experience with some independant research, reading and preparation by the borrower.
Any borrower that thinks that the average lawyer (other than a SPECIALIST in this area) is prepared and equipped to mount a particularly effective defense doesn't understand the nature and dynamics of the foreclosure problem.
Since the borrower CANNOT usually AFFORD to pay the lawyer to become intimately familiar with the facts of the case or of the applicable law, the borrower should do more than a little independent research to better prepare and to be in a position to help to organize and marshal the facts of their case.
I am NOT arguing against obtaining a lawyer. To the contrary, you NEED a lawyer, but you need to be proactive about your case and you need to be prepared to MANAGE your lawyer. You CANNOT do this by simply delegating the problem without becoming engaged. If you think you are going to simply subcontract to the generalist, I fear you will be even MORE BROKE with little to show for it! Read, think, organize. Get a lawyer, but MANAGE and participate.
Find Example Pleadings
If you CANNOT obtain an attorney and must go the pro se route, look to legal forms books for your state to obtain examples of various kinds of defensive pleadings. Bear in mind that some defensive matters, such as pleas to the jurisdiction, pleas in abatement, and pleas in bar may appear separately from the foreclosure forms of pleading.
Also, consider going to the courthouse and looking through the court files / dockets to see the pleadings used by others. They say that imitation is the sincerest form of flattery. There may be some GREAT boilerplate appearing in defensive pleadings filed by others. But also bear in mind that each case is also unique. Be VERY CAREFUL not to simply lift arguments which are irrelevant or inapplicable to your case.
Good defensive pleadings are probably going to be HARD to find! Many defendants lose by default and never file an answer at all. But if your state ALLOWS general denials, there might be an adequate general denial that you might find in a forms book, with additional examples of such denial used in actual practice. Just be VERY, VERY wary of going solely with a general denial IF you have some solid jurisdictional / capacity issues or other good affirmative defenses. You need to be careful NOT to prematurely WAIVE arguments by failing to make them.
Get someone to PROOFREAD your pleadings for spelling, punctuation and grammar. Make your pleadings LOOK PROFESSIONAL. You might even consider trying to summarize YOUR ideas for defensive pleadings and carry your proposed answer in and ask your attorney or ANY attorney to look at it, even if that attorney is NOT going to represent you.
Make Your Deadline
The KEY IDEA of this post though is to make sure that you make your deadlines, so that you do NOT lose by default! A court will typically REFUSE to grant a default judgment based upon a very minimal response. I have seen some case law from some jurisdictions where a copy of the summons returned to the court with the word "Denied" written on it and signed by the defendant was accepted as a valid general denial (I would NOT recommend this! Do it the RIGHT WAY!!). Failing to send ANYTHING is going to earn the plaintiff a default!
Be Prepared To Settle
If the plaintiff gets a default, you have already LOST. If you AVOID a default by ANSWERING, you are already well ahead of most other foreclosure defendants. Getting your answer in prepares you to engage in DISCOVERY.
One of the really surprising things is that like the schoolyard bully who picks on smaller kids, the plaintiff's attorneys are actually LESS READY for real litigation than would seem likely. They are USED TO winning by just showing up. They are used to winning using defective pleadings, false affidavits, and other fabricated evidence! They have RARELY, if EVER, seen an EFFECTIVE defensive pleading. And they are totally unaccustomed to answering good, well thought out discovery questions.
In short, it turns out that the bully really does NOT know how to fight!
The deck is very much legally stacked against the defendant / borrower. But the foreclosure business has become so rife and permeated by corrupt and dishonest practices that a well prepared defendant has a much better chance than might be commonly perceived. This is perhaps the best lesson of the Florida MERS cases. There Florida judges became SO offended by clear patterns of plaintiff misconduct that the Court ruled in favor of defendants even where the defendants had NOT appeared!
The mortgage servicers are planning to roll over most defendants. And the industry is facing a crush of new defaults. Given the choice of applying resources to ten defaulted cases or one contested case, which do you think will command the mortgage investor's attention?
When you RESIST, the mortgage investor may suddently become interested in SETTLING. BEWARE of giving up unnecessary information in any settlement discussions (see other posts at this Forum, particularly those by Moose). And BEWARE of rights given up in settlement. Here is where your need of counsel can be MOST ACUTE.
Settling is a GOOD IDEA where possible. But there are some structural reasons that make settlement particularly problematic where a mortgage trust owns the mortgage indebtedness.
Solicitation of Ideas
I would encourage other veterans of this Forum with ideas and suggestions relating to avoiding default and preparing an initial defensive answer to supplement these musings and suggestions with their own additional insights and experiences!
Get a Lawyer
Permit me to close with that recurring theme. GET A LAWYER! If I FAILED to incorporate this idea into every section above, consider this supplement to be an incorporation by reference.