Monday, October 30, 2017

Texas law has some additional wording Rule 902(10) affidavits need to authenticate business records

In trials, it’s important to object to the submission of certain records by the other side that haven’t been “authenticated.” These records include business records that meet the definition of Texas Rule of Evidence 803(6), and can include credit card statements, cardholder agreements, bank account agreements and so forth. The easy way to avoid this objection is to show that the records have been authenticated by means of a business records affidavit that complies of Texas Rule of Evidence 902(10). What often happens is people tender an affidavit that either completely tracks Rule 902(10) form affidavit (found in Tex. R. Evid. § 902(10)(B)) or basically tracks the Rule (“substantially conforms” or “substantially complies” per court jargon). These affidavits, however, are missing some basic language long held as required in all affidavits by the Supreme Court of Texas, since at least 1887. These requirements are to disclose that the contents are “true” and “within the personal knowledge” of the affiant. So a Rule 902(10) affidavit should always contain these disclosures and also meet the other basics of the Rule to get the business records to survive the hearsay objection.

I will call these requirements that affidavits represent that their contents be “true” and “within the personal knowledge” of the affiant as the “dual requisites”. In this article, I will describe Rule 902(10) (governing the affidavit to authenticate business records), Rule 803(6) (governing business records), Texas case law laying out the dual requisites, and some arguments regarding the Rules that you might hear at trial about the affidavit requisites.

My recent trial

At a recent trial, I argued for the exclusion of purported business records because the affidavit lacked one of the dual requisites – a disclosure that the contents are true. The plaintiff creditor argued that the records’ accompanying affidavit complied with Rule 902(10) by tracking the form affidavit in that Rule, and thus the records should be admitted as authenticated to support recovery on multiple theories, including breach of contract, account stated and open account. This response reflected a confusion as to the purpose and language of the Rule.

I want to explore this because it’s important for debtors and creditors to understand. If debtors understand it, they can tank bad affidavits in court. If creditors understand it, they can debtor-proof their affidavits.

What does Rule 902(10) do?

Texas Rule of Evidence 803 states that certain evidence is “excluded by the rule against hearsay, regardless of whether the declarant is available as a witness.” Rule 803(6) governs “[a] record of an act, event, condition, opinion or diagnosis if” it meets five requirements. A “business” is any “business, institution, association, profession, occupation, and calling of every kind, whether or not conducted for profit.” Id.

Rule 902 is a “self-authenticating evidence” rule, meaning that the usual process of authenticating records sought to be admitted as evidence can be shortcut by complying with the Rule. Evidence in general needs to be authenticated before it can be admitted; that is, admissibility of evidence is conditioned on authentication of the evidence. Tex. R. Evid. § 901(a).

Rule 902(10) says “business records” under Rule 803(6) and 803(7) that accompany an affidavit compliant with both Rule 902(10)(B) “and any other requirements of law” and served together with such affidavit per Rule 902(10)(A) will be considered self-authenticated. The Rule further adds that provided “good cause” is shown, the court can simply order the business record as “presumptively authentic” even if the affidavit is not compliant with Rule 902(10)(A) (the service requirement), but it does not say the Court can do this if the affidavit is not compliant with Rule 902(10)(B) or if it fails to meet “any other requirements of law.”

The Rule says that “[a]n affidavit is sufficient if it includes the [Rule’s form] language, but this form is not exclusive,” and provides for an alternative to an affidavit (unsworn declaration made under penalty of perjury). The proposed form’s only factual recitals are 1) that the affiant is a custodian of records familiar with the manner in which the records are created and maintained thanks to the custodian’s job duties, and 2) that a certain number of pages of records are attached which are originals or duplicates of the originals that meet the business records requisites of Rule 803(6).

It is silent about the dual requisites but because the Rule refers “other requirements of law,” we must keep our eye on these dual requisites in the background.

Texas law requires that all affidavits recite that the facts disclosed are true and within affiant’s personal knowledge

Affidavits have dual requisites in Texas law.  See Humphreys v. Caldwell, 888 S.W.2d 469 (Tex. 1994). Humphreys required that any affidavit submitted to support a factual claim of some sort contain both a recital that its contents are within the personal knowledge of the affiant and that the recitals within the affidavit were true.

“An affidavit which does not positively and unqualifiedly represent the facts as disclosed in the affidavit [1] to be true and [2] within the affiant’s personal knowledge is legally insufficient.” Id. at 470, citing Brownlee v. Brownlee, 665 S.W.2d 111, 112 (Tex. 1984) and Burke v. Satterfeld, 525 S.W.2d 950, 955 (Tex. 1975).
This case has not been vacated or abrogated by statutory law.

The affidavits involved in Humphreys were discovery affidavits to support a claim of privilege to avoid discovery pursuant to Rule 166b(4). Id.

The Brownlee case involved a summary judgment affidavit which the Court found to be legally insufficient because, “[u]nless authorized by statute, an affidavit is insufficient unless the allegations contained therein are direct and unequivocal and perjury can be assigned upon it.” Brownlee, 665 S.W.2d at 112, citing Burke, 525 S.W.2d at 950. Because the affidavit failed to “unqualifiedly represent the ‘facts’ as disclosed in the affidavit to be true and within [the affiant’s] personal knowledge, it was insufficient as a matter of law.” Id.

The above excerpt from Brownlee is a quotation of Burke, even if not attributed in the case; the Burke passage further cites to multiple 20th century Texas cases. See Burke, 525 S.W.2d at 955, citing Spinks v. Matthews, 80 Tex. 373, 15 S.W. 1101 (1891) and Graham v. McCarty, 69 Tex. 323, 7 S.W. 342 (1887). The Burke affidavit was a probate accounting affidavit; it proclaimed that the “‘allegations set out thereunder and same are true and correct to the best of [the affiant’s] knowledge.’” Id. The Court found that such an allegation did “not appear to positively and unqualifiedly represent the facts as disclosed to be true and within the personal knowledge of the affiant.” Id. The Court thus equates the “positive and unqualified” representation that could have perjury “assigned upon it” to one that proclaims the contents of the affidavit “to be true. This line of case law applied to three distinct areas of law – summary judgment, discovery and probate proceedings, and was worded in a general sense in each case so as to apply to all affidavits.

Thus, it appears to be that Texas law since at least the late 1800s has required that affidavits, without qualification and unless excepted by statute, proclaim that their containments be both true and within the personal knowledge of the affiant. Rule 902(10) affidavits must contain certain types of facts according to the Rule (or not, since the form is not exclusive). The facts in the propounded form include 1) that the affiant is a custodian of records for a certain party, 2) that the records meet the Rule 803(6) requisites, and 3) that a certain number of records is attached to the affidavit. It would seem odd for any affidavit not meeting these simple basics are ever held as “valid” by courts. And yet, guess what? Courts bend over backwards to find Rule 902(10) is met in all kinds of apparently, grotesquely deficient affidavits. (I’ll discuss case law in another post. None of the opinions ever dig into the truth requisite, and many opinions, especially in Houston simply hold that tracking Rule 902(10) is good enough for the affidavit. It might be no one is arguing the dual requisites like I would for appeal.)

The Rule 902(10) form affidavit does not recite the dual requisites, but case law needs them. The affidavit would be invalid without them. It seems that the only way for an affidavit to escape this burden is to meet a statutory exception as articulated in the case law above, or for there to be a hard court ruling that such is not required for Rule 902(10) affidavits. I have found no such statutory exception and no such case law.

The text of Rule 902(10) does not minimize the dual requirements

Remember, Rule 902(10) simply declares the requisites of the business records affidavit is sufficient for purposes of authenticating business records. It does not say that the dual requisites are done away with or not necessary for the affidavit’s validity. The chapeau of Rule 902 says: “The following items of evidence are self-authenticating; they require no extrinsic evidence of authenticity in order to be admitted.” Rule 902(10) furthermore states that the affidavit accompanying the Rule 803(6) business record must comport with “subparagraph (B) of this rule and any other requirements of law” to meet the self-authenticating exception.

The other requirements of law are the dual requisites. The business records affidavit would be invalid without these dual requisites, but must contain the Rule 902(10)(B) requisites in order to achieve the more limited function of authenticating the business records.

Is a business records affidavit under Rule 902(10) the type of affidavit addressed by this line of case law?

The line of case law above does not appear to care about the particular contents of the affidavit; all affidavits need to meet the dual requisite unless specifically excepted by statute. See Brownlee, 665 S.W.2d at 112, citing Burke, 525 S.W.2d at 950. Even a business records affidavit should comply with the dual requisites.

A creditor might also point out that Rule 902 effectively supplanted, abrogated or otherwise “repealed” such case law. I disagree.

Texas Government Code § 22.004 provides various laws regarding the Supreme Court of Texas’s “rulemaking power in the practice and procedure in civil actions, except that its rules may not abridge, enlarge, or modify the substantive rights of a litigant.” Id. at § 22.004(a). Any “rule adopted by the supreme court repeals all conflicting laws and parts of laws governing practice and procedure in civil actions, but substantive law is not repealed.”  So the thinking would go from a creditor: the Court’s rules repeal any conflicting procedural rule, including those governing affidavits.

But is common law governing affidavit contents the type of law that this Code provision says a Rule could replace? I didn’t find a definition of “law” in the Government Code. It probably doesn’t include common law, but only “official” law like legislation. Case law is never repealed; it is overturned or abrogated or preempted by legislation or rulemaking. If the legislature had meant that the rulemaking procedure should go so far as to overturn case law now over 100 years old, it could have said so.

A second response would dig into the history of the promulgation of the Rules, but I haven’t done that so I’m not going to play with this response much. I will note that while I haven’t discovered when TRCP 902(10) was promulgated, even if I could a big issue would remain: the Rule definitely came into existence after the 19th century decisions where the affidavit’s dual requisites were (at a minimum) first pronounced. The Supreme Court made reference to the Rule in at least 1998 in a miscellaneous order related to the Harris County local rules. The Federal analog was adopted in 1975, it appears, if not 1944. (Again, haven’t got a copy of Vernon’s laying about). And case law has been made since at least 1944 pertaining to this exact Rule. I would wager a lot of money that the Supreme Court of Texas did not intend by adopting these Rules to repeal its line of case law governing affidavits in general.

Thus it appears that the only argument remaining to plaintiffs to avoid including the dual requisites is that the Rule is itself a statutory exception. But I don’t think it is because statutes aren’t rules.

Is Rule 902(10) a statute such that it could grant a statutory exception to the dual requisites? Doesn’t look like it.

Rule 902(10) is a Texas Rule of Civil Procedure. Is a Rule of Civil Procedure a “statute” that could except the dual requisites? The Rules themselves refer to “statutes” as distinct from the Rules in multiple places. See Tex. R. Civ. P 2 (“Where any statute . . . prescribed a rule of procedure . . . different from these Rules, and not included in the ‘List of Repealed States,’ such statute shall apply”); id. at R. 4 (“In computing any period of time prescribed or allowed by these rules . . . or by any applicable statute. . .”); id. at R. 18a(i) (authorizing Chief Justice of Supreme Court of Texas to assign judges and issue orders “permitted by this rule or pursuant to statute”) and so on. There is a peculiar Rule whose header appears to equate the Rules to “other statutes” – see Rule 110 – but the body of the Rule continues the distinction between statute and the Rules: “Where by statute or these rules citation by publication is authorized, and the statute or rules do not specify the requisites of such citation . . . the provision of these rules shall govern.”

For non-textual evidence, Black’s Law defines a statute as an act embodying or expressing the will of the Legislature, and not the judiciary. Furthermore, the Supreme Court does not issue statutes; it issues Rules.

In short, I do not find a statutory exception carving out the requisites or Rule 902(10) from the Supreme Court of Texas’s century-old case law governing the dual requisites.


Rule 902(10) provides a cheap mechanism to authenticate business records so witnesses don’t have to show up at trial to establish their authenticity. The Rule spells out the basics of a form affidavit to get through this little hurdle. The Rule does not say that simply following the form will result in admission of the records, but will merely solve the authenticity issue (which is tied to the hearsay problem). Finally, the Rule does not say that following the form affidavit is all you need to do for the affidavit to be authorized; in fact, the Rule says you need to follow other requirements of law. These other requirements of law are articulated in ancient case law. This case law has not been overturned or otherwise abrogated by any law. It is still the law of the land.

So, creditors, if you’re trying to submit a Rule 902(10) affidavit for a business records authentication tactic, you need to make sure you meet the dual requisites, which are not described in the form affidavit; you need to add it in. Debtors, if you come across a Rule 902(10) affidavit like commonly seen in credit card cases, point this argument out to the court in a well-briefed format.

What follows are some bullshit notes I had in the original article that I just want as a postscript now. I think they’re all incorporated in the article above.

Some extraneous observations I won’t bother

Key observations about Rule 902(10)

1)      Silent about representing that the affidavit’s contents are true and within personal knowledge of affiant. What Rule 902(10) does not say is anything about requiring a representation that the disclosures within the affidavit be within the affiant’s “personal knowledge” or true (or otherwise assignable with perjury). This is germane because Texas case law requires that affidavits generally contain these representations unless a statutory exception applies. What Rule 902(10) does say is that the affidavit accompanying the business records you seek to have treated as self-authenticating must track the proposed form laid out in Rule 902(10)(B) “and any other requirements of law.” These other requirements of law are the dual requisites.

2)      The form is not exclusive to be “sufficient” to meet the business records affidavit exception. Note the recital in the Rule that the form propounded is “not exclusive.” This has been held to mean that courts can review affidavits that don’t track the Rule’s language for a “sufficient” affidavit and if the affidavits “substantially conform” to the Rule, then it’s okay. (Personally, I read this Rule as simply saying that the affidavit “form is not exclusive” because “an unsworn declaration made under penalty of perjury” can suffice.)

3)      The affidavit may be “sufficient” for the job it seeks to do, but it probably needs to contain the two required disclosures that the contents are both true and in personal knowledge of affiant. It is further noteworthy that the alternative to the form affidavit is a declaration made “under penalty of perjury” – nothing in this particular affidavit on its face is made under penalty of perjury, or otherwise purports to declare its contents to be true. I find this important for the following discussion.

With these notes and basics of the Rules in mind, let’s move to the Texas case law.

Thursday, October 19, 2017

Rip Van Winkle Wakes Up: Time-Barred Debts, FDCPA demand letters, and partial payment

Brief post today, shared on LinkedIn.

On October 4, 2017 the Western District of Washington issued a memorandum opinion denying a debt collector's motion to dismiss a federal class action suit implemented by some opportunists who wanted to mince words for a quick buck.

The case is Bereket v. PRA, LLC.

PRA sends a dunning (demand) letter to a debtor on a time-barred debt, which is a debt you can't sue to collect on without running into the defense of limitations, and which is a no-no under the FDCPA, shamed heartily by the FTC and the CFPB, but totally cool in bankruptcy court (because you're not suing, you're filing a proof of claim! isn't law fun?).

The dunning letter honestly discloses that PRA cannot sue to collect the debt, but offers the debtor a couple payment options. The debtor twirled his mustache and ran to find a lawyer who whipped out his well-worn copy of the FDCPA and said "The Seventh Circuit said letters like these are bad, so we'll try to get this district court in the Ninth Circuit to agree that your rights were violated."

What was wrong with a letter admitting PRA could not sue to collect the debt?

The Western District of Washington said: "It's because of what they DIDN'T say!" That's right, folks: not saying stuff now counts as communications under the FDCPA. The provision in questoin was Section 1692e of the FDCPA:

"Section 1692e of the FDCPA prohibits a debt collector from using "any false, deceptive, or misleading representation or means in connection with the collection of any debt." 15 U.S.C. § 1692e. The statute provides a non-exhaustive list of conduct that constitutes a violation of that section, including "[t]he false representation of —(A) the character, amount, or legal status of any debt. . .," which is at issue in this case. 15 U.S.C. § 1692e(2)(A)."

PRA said "Well, we didn't say anything, so this debtor is just making up stuff."

The Court retorted with snark:

"Had Defendant actually read the Complaint, particularly the paragraphs set forth by the Court in this Order, the facts supporting the Complaint would have been clear. See Dkt. #1 at ¶ ¶ 21, 25 and 28-34. Plaintiff alleges that Defendant's failure to state in its letter that the statute of limitations could be revived or begin anew if he made a partial payment on the alleged debt is a violation of Section 1692e of the FDCPA."

Oh, yeah, you see? "Because you didn't warn them that something "could" happen that counted as a "representation." Of the only representation PRA made (that they can't sue) and then argued showed that they didn't violate the FDCPA by making a misleading representation, the Court had this to say: "This argument is moot. As is clear from his Complaint, Plaintiff does not allege that this statement, in and of itself, is misleading. Thus, the Court will not further address this portion of Defendant's motion."

PRA doubled down, arguing it first had no duty to inform the debtor of the effect of partial payment, and second that state law would not restart limitations on the debt by partial payment. The Court pooh-poohed this question of duty by pointing to an Eastern District of California case, which relied on FTC opinions. The FTC, however, hedged its pronouncement: these efforts "may create a misleading impression as to the consequences of making such a payment," again in violation of the FDCPA, and only in those states where partial payment statutorily restarts limitations on the debt. FTC Report 2010 at 28.

The Court then cited some other discussion in the Eastern District of California case and concluded - there is an actionable claim under the FDCPA, so it would survive a 12b(6) motion to dismiss for failure to state a viable cause of action in federal court.

Having dispensed with the duty question, the Court then went on the narrower issue - does Washington law restart limitations on debts with partial payments? Despite concluding "no" it still said "too bad, PRA, you're liable."

PRA's letter did "not inform Plaintiff that there may be legal consequences for making partial payments either under the 12-month savings plan option or the 33-month installment option." The statute in question did not provide for a reset of limitations by partial payment on the original debt, but ah, what about a new contract which promises to pay down the original debt? In settlement of debts, people often sign "settlement agreements" which can be used by debt collectors as "new contracts" or "new debts" to collect. These are often discounted from the "original debt" and are new debts. They are not the "debt" that the debt collector is collecting, however. "Defendant admits that making a partial payment on the debt could open Plaintiff to litigation whereas making no payment would afford him the protection of the statute of limitations."

The court then turned to Chicago for some Seventh Circuit advice based on a similar situation: "For purposes of this appeal, it does not matter whether a failure to make further payments would revive the original amount of the debt or just the smaller amount of the settlement offer."
The Court dusts its hands and proclaims, maddeningly: "At this stage of the proceedings, the Court views the facts alleged in favor of Plaintiff, and also finds that Plaintiff has presented a plausible argument that a partial payment would restart the statute of limitations on the alleged debt, even, as Defendant admits, that debt would be of a lower amount that the original debt."

There are two totally different debts being discussed here. What this Court is holding, and other courts have apparently held, is that if you want to settle a debt with a consumer, you need to tell them that, even though you are making a brand new contract with all new indebtedness and new obligations, they are still "restarting" or "could restart" limitations on "the debt". In short, the Court is saying that in order to avoid misleading for purposes of the FDCPA, you must misrepresent the legal nature of a debt.

Amusingly, the term collection is not defined in the Fair Debt Collection and Practices Act, but remember what 1692e forbids: "any false, deceptive, or misleading representation or means in connection with the collection of any debt." We've already seen that courts are willing to claim that a representation which tells "half the story" and also fails to tell what "half the story" is in some other state is an FDCPA violation, but is a settlement offer on an old debt that contemplates creating a new debt "collection of any debt"? Debt is defined in the FDCPA: "any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment." Okay, what about consumer? it "means any natural person obligated or allegedly obligated to pay any debt."

Using this more technical definition, you can kinda see how a settlement agreement, which forms a brand new debt, can be a means of collection to pay "any debt", such as the original debt. The Court's problem with this opinion is its failure to engage with these definitions, and to find that, despite there being no statutory rule which would "reset limitations" on the original debt by signing a settlement agreement, there was still an FDCPA obligation to discuss the effects of a settlement agreement as creating a debt all unto itself. I would argue, however, that a "time-barred debt" is like no debt for purposes of discussing limitations; that a settlement agreement's new debt is a creature not yet in existence, and therefore not something to discuss. At this point, the debt collector / creditor is simply a negotiating agent for the creation of a new contract, and in the formation of new contracts there are no FDCPA obligations. This is a very bizarre set of holdings that overextend in trying to do so little for debtors. "Would you repay this old debt we can't sue on?" "Sure." "Okay, here's a new agreement saying you'll repay a certain amount." [month later, default] "Okay, so we're now suing you for breaching our new contract." "DAS AN FDCPA VIOLATION!"

Very troubling for collectors in states where no statute authorizes restarting limitations through partial payments, like in Texas. Should every dunning letter now include the warning that for time-barred debts, we might be able to sue on the new debt formed by settling? That is my takeaway.

Tuesday, September 26, 2017

Spitballing on Reposa's contempt conviction (updated)

The following is a work of legal fiction.

Reposa went on air with Mike Allen on his show tonight.

Reposa is in trouble for, among other things, telling a judge (Hohengarten) that he was trying to show the jury in a felony DWI case how hard it is to get a fair trial in court. Hohengarten (it appears) took umbrage at the idea it was hard to get a fair trial in her court, showing her personal limits of rhetoric, thought and judicial reserve - she took a recess, came back, and declared a mistrial after Reposa made this remark. We'll discuss rhetoric, thought and reserve throughout this piece.

What'd Reposa say?
"I want to show the people how hard it is to get a fair trial in this court." (You can find the whole transcript of the hearing that resulted in his trouble here.)

What Reposa's remark meant, and what it was intending to convey, and its context are all relevant in terms of what its import or impact could have been on the veniremen (the people pooled to be selected into a jury).

The context is simple enough, and thus we need to look at the rhetoric, thinking and reserve of the judge at issue to understand how it blew up so badly (and in my opinion, very unfairly) for Reposa.

Reposa was in a DWI felony jury trial and was selecting jurors out of the veniremen pool. The transcript of this hearing shows that he and Hohengarten were at odds on how to get at a singular issue - could a potential juror contemplate the minimum punishment for a DWI felony, which was a $1.00 fine and no jail time? The transcript shows that Reposa's attempts to elucidate and get at the core of this query were interrupted by the judge multiple times until, fed up, she told him to "approach the bench" (page 9, line 17). Reposa apparently was already at the bench (page 9, line 24) and did not want to participate in an off-the-record conversation (page 9, line 19-20). The judge had just told the jury he was wrong on the law, so why should he participate in this conversation off the record? The judge denied his request for it to be on the record, went off the record, and magically, turned the record back on when Reposa made his "trouble" phrase.

In the interview with Allen on the radio show linked above, Reposa has a great clarification of the "trouble" phrase. He said on air that the intended meaning of his use of this pseudo-constitutional phrase was to show that he was working hard to get a fair trial - asking the tough questions about jurors' punitiveness, about whether they can consider minimum sentences in felony DWI cases, about how hard it is to get his client a fair shake at  trial.

Reposa is in jail now because of this remark and a couple of other "alleged" charges of attorney misconduct, none of which passed my smell test.

Hohengarten was (apparently) furious at this sentence and said that among other things, she didn't like his damn "tone" when he said stuff to her. Hey, judge: we work in an adversarial environment and if you want to tell a lawyer he is wrong on the law out loud and not in a sidebar or an opinion publication, you're probably gonna goad the adversity situation badly. Hohengarten's rhetorical interpretation of this phrase, apparently, was that Reposa was impugning the impartiality of HER in particular. How could she reach that conclusion based on the questions and exchange they'd had is one only her singular mind could describe, and no one else - after a lengthy exchange with different jurors about punitiveness, and arguments the judge initiated with him about these questions, and an off-the-record conversation we're not privy to, and which was not part of his guilt / sentencing hearing with Judge Paul Davis, we are supposed to somehow buy Hohengarten's version of reality: that Reposa was actually shit-talking to the court and calling into question its singular function - the fair dispensation of justice.

I challenge readers to review that transcript and contextualize that conclusion. It's a very bizarre reading to draw.  Assuming Reposa's line of questions to the jury pool, which ostensibly would relate to what he was trying to "show" it was all about punitive attitudes, how in fuck could this ALSO be an attack on Hohengarten's impartiality? This is the main question a "fair" judge would have had to deal with, and a "fair" jury would have had to deal with had Reposa been given a jury for his contempt trial over this remark. Judging from Facebook comments from one of the veniremen and other folks, Reposa was "out of line" or "rude" but who gives a fuck? The predicate for the whole mistrial and other related bullshit came from this utterance - about the difficulty in securing a fair trial. So, context clues, kids: what could make getting a fair trial so hard? Maybe, just maybe, picking out jurors who could fairly decide that a $1.00 fine and no time in jail was a possible punishment in a DWI felony case? And judging from the exchanges with the jurors, this would appear to be the most reasonable reading to draw on it.

But suppose Reposa and you had been talking testily over one another about this very issue, and then Reposa says something about "fairness" - perhaps the ego in you could have warped it into a personal attack, no? Have you ever been fighting with someone and then you don't hear the intent or meaning of their statements - you only hear what you feel is present, an attack, an insult, praise, hate, love, jealousy? Eh? Talking is hard. Talking publicly is harder. Being judicious about what is being said is super fucking hard.

We can thus draw a simple inference from all of this: Hohengarten had a certain rhetorical expectation of the jury selection process, was disagreeing with Reposa on how to ask certain questions related to punitiveness, and then "heard" what was "said" in a way that does not on its face look like a personal attack to her but rather a hyperbolic utterance related to the jury selection process.

So what happened? Hohengarten thought she was being attacked as a judge and (in some folks' opinions) freaked out. And what did our august judge do? She went ham on Reposa for this belief of hers.

Reposa's goal
Let's consider the goal of what Reposa was getting at with his questions.

In the awful death penalty context - you cannot get a juror who would not consider the death penalty as a possible punishment for the death penalty-eligible felony alleged. He MUST be able to consider it in order to be "qualified" for a death panel. Do you know why? Cuz the prosecutors will bitch and bitch and strike and strike and appeal if any juror says he could not consider the death penalty for a case where the MAXIMUM PENALTY is death!

If you can bitch and bitch and fight and appeal for a MAXIMUM SENTENCE, you must have the right to do the same for a MINIMUM SENTENCE. And from a "fair trial" standpoint, all this makes sense - it wouldn't be "fair" to the State if a juror in a death penalty case couldn't consider the death penalty, because that 11-1 decision is more than a 50-50 risk.  Likewise, how is it fair to a defendant to not be able to ask the room full of people if they could consider a sentence where he doesn't go to jail and pays a $1.00 fine? It's not.

Hohengarten was having some severe problems relating to the power exchange between her and Reposa over how to get to this issue, and Reposa in an off-the-record conversation he absolutely did not want to have presumably argued that his line of questioning was fine, for when the record kicked back on to catch his dirty "fair trial" claim, he said, "I got it, and you're wrong." Hey, judges, if you want to debate the law with a lawyer, go to your room so you don't prejudice your own jury and reveal that the lawyer and you disagree on the fundamentals of the law at issue in the case over which you're presiding.

"I got it, and you're wrong" was followed by Reposa's fair trial clause. Hohengarten was clearly not happy. Hohengarten had already arguably prejudiced the entire jury panel by announcing Reposa had "misstated the law" - i.e. the lawyer in the room for the defendant didn't know the law, that he was at a minimum wrong in that instance and at maximum totally incompetent to try this. More than that - she implicitly coached the jurors on how to answer. Of course she had to declare a mistrial. But it was easy to blame it on Reposa after the fact. Hohengarten, however, apparently couldn't even figure out the contempt at issue, so she took a break, came up with an excuse to declare mistrial (Reposa's remarks), declared the mistrial, then filed a motion for contempt against Reposa for five "reasons." Usually, judges simply announce the "direct contempt" charges openly and immediately and would have had Reposa arrested to then bond out. That didn't happen here. Instead, (speculatively) she asked another judge in a back room conversation just between friends if he would personally find Reposa in contempt for this and that and this and that, and when the judge said "yeah" Hohengarten allegedly used a Criminal Code procedure to get the "presiding judge of the administrative judicial region in which the alleged contempt occurred" to assign the task of determining Reposa's "guilt" to this other judge, Judge Paul Davis. Tex. Code of Crim. Pro. art. 21.002(d). But what did the judge assigned to do this actually do?

He assessed a sentence. Which appears to be way more than the powers he was granted under Article 21.002(d) (perhaps - look at what they did to another lawyer, Theresa Caballero (" On August 20, 2012, the Honorable Juanita Vasquez–Gardner, who was assigned to hear the de novo contempt proceeding, found Caballero in contempt of court and assessed punishment at a fine of $100 for each violation for a total of $900, but the court probated the entire fine"). You'll note, however, that this was the de novo contempt proceeding, and by my understanding of the weird procedure in Reposa's case, Hohengarten's motion was ruled on by Judge Paul Davis. That would be very odd. If this is wrong, then perhaps it's less remarkable, but it still does not look like it matches the requisites of article 21.002(d).

So there's a committee of lawyers who allege political conspiracy against Reposa. This looks like a conspiracy in the simplest terms - judges getting together to figure out how to get a lawyer into jail because of, literally, nothing but a rhetorical disagreement over a single sentence taken out of context. Can you IMAGINE a JUDGE getting mad at the idea that getting a fair trial is a hard thing to achieve? Do you know how many lawyers get sued, disbarred, probated or suspended for not taking the threat of a fair trial seriously? Probably not that many because their clients are poor...but if you as an attorney or a judge do not sincerely acknowledge the difficulty in securing a fair trial, you are delusional.

Fair trials are hard. That's why plea deals are so common - those aren't fucking trials. They're contracts.  It's not HARD to sign a plea deal, which is why 95% of the defense attorneys out there do them - their clients want to quit, want to not risk "more" penalty, want to "settle" and so they sell their rights away, and sometimes these piece of shit lawyers advise them to do so - because they smell the money is in another case, or it's not worth it to put up the effort for this Joe Blow on this DWI - a richer Joe Blow, maybe, a less difficult crime perhaps. That is not a "fair trial' - fair trials are hard to get in any court, and if Hohengarten acted this way because she thinks that it's not hard to get a fair trial in her court, or any court, is both maniacal and myopic. But of course she doesn't really think this, right? It was a matter of respect, and tone, and immediately obeying her every word. Right?

Reposa's interview is rife with some interesting juicy details for the crimpro nerd - it sounds as if this was fucked from the word "Go" - no bond, Hohengarten couldn't figure out if Reposa was just mean to her, or if she didn't like his tone (not caught in the transcript, alas), or if he was smelly, or if he was an atheist, or if he was gay - somehow or another, he was in contempt, so she just gave five reasons and begged the powers that be to let another judge figure it out. That judge was Paul Davis, who already found Reposa in contempt for making a cool jack-off motion to an annoying opposing counsel.

This shit rules. Travis County is rotten. Justice for Reposa.

Tuesday, August 29, 2017

Rape 101

I'm a sucker for easy titles.

It came to mind recently that, if you put the camera on, say, a pair of people in a sex act and just look at what's going on, the behavior could look a lot like your typical rape, especially under the "affirmative consent" theory which is now law in many jurisdictions.

But if you look at the action at a different time, before or after the commencement of sex, you may think a little differently about it. In this piece, I'll examine the basic components of rape law in Texas, delving into some of the difficulties of the notion of "capacity to consent" as measured by evidence of diverse physical or mental states of alleged victims, mutual intoxication of suspect and alleged victim, and then the mindboggling theory of affirmative consent (not yet operating in Texas, as I understand Kirk Watson's bill failed). Then I propose a consent theory to clean up the issue - something we can call non-consent opportunity.

Rape in Texas
"Rape" as a common law term is not found in the Texas Penal Code; the idea of forcibly penetrating another person with the penile member (or phalanges, or nose, or tongue, or whatever) is called "sexual assault" in the Lone Star State. The law is found in TPC § 22.011.

It's a peculiar animal.

The crimes in question all focus on the mental state of the suspect/defendant, who I'll just call the Dude for sake of brevity. If the Dude "intentionally or knowingly" does a series of forbidden behavior, including "cause the penetration" of another person's anus or sexual organ through any means, that's a no-no; same goes for "[causing] the penetration of the mouth of another person by the [Dude's] sexual organ" or to otherwise grab someone else's sexual organ and make it touch someone else's anus, sexual organ or mouth - that someone else obviously including the Dude himself.

On top of all this being done intentionally and knowingly, it must also be done "without the other person's consent." This term is then defined in § 22.011(b) as occurring in any of 11 situations. There are some interesting ones I'll focus on.

. . .
(3) the other person has not consented and the actor knows the other person is unconscious or physically unable to resist(4) the actor knows that as a result of mental disease or defect the other person is at the time of the sexual assault incapable either of appraising the nature of the act or of resisting it;
(5) the other person has not consented and the actor knows the other person is unaware that the sexual assault is occurring;
(6) the actor has intentionally impaired the other person's power to appraise or control the other person's conduct by administering any substance without the other person's knowledge;

Subsections (1) and (2) are about violence and threat of violence, respectively, directed at the target (call her Sue). Subsections (8) through (11) are about the status of the Dude - is he a cop, is he a priest, is he a MHMR worker, is he an old folks' home orderly. Subsection (7) is about threatening violence on some other person - it's silent about actually using violence on this other person (not Sue) - say beating the shit out of Sue's kid unless Sue has sex with the Dude. Theoretically, it's covered in subsection (1) which is silent about exactly on whom the violence is being used, so maybe it swallows up third parties, but in reading the structure of these laws, it looks clear that (1) and (2) are for Sue, and (7) is for anyone not Sue (maybe even the Dude! the Dude threatens to kill himself unless Sue has sex with him - so many hypos).

But the ones I've extracted above deal with stickier, more interesting situations. The ones most college students are interested would be (3), (5) and (6).

Sue has not consented, and Dude knows Sue is unconscious or physically unable to resist (3)

This one is interesting. One, probably very bad reading of "has not consented" assumes one of the other conditions listed in (1) - (11) already occurred, and then Sue passed out; the likelier reading by a court and definitely by a prosecutor is Sue did not affirmatively consent before passing out. Structurally, it's badly phrased because the phrase "has not consented" appears in a section defining when sex occurs "without consent." Here, we see the specter of the "yes means yes" laws found in other states raise its head - if you cannot somehow contravene the passed out person's memory about the issue of consent before passing out, you're in deep shit. Advice - don't have sex with an unconscious person or person so messed up they are physically unable to resist your advances. The world of intoxication seems at home in this rule - Dude may say, "Well, Sue didn't exactly say 'Do me, Dude' but I got the hint. Is it my fault she passed out before / during the act?" Maybe not, Dude, maybe not. And what's Dude's defense? "I wasn't intentionally or knowingly doing any of this." Enter the gray rape beast, which a lot of you have heard / read about - when does "risky sex" end and "rape" begin when people are drunk or high?

Dude knows that as a result of Sue's mental disease or defect she incapable either of appraising the nature of the act or of resisting it (4)
This one seems explanatory, but maybe not; not having read any interesting case law or memoranda opinions on this issue, I'm just guessing here - but if someone has some kind of congenital or recently acquired mental illness (a term that in today's eternally, stupidly more permissive society becomes less and less popular and more and more hated), that renders them incapable of interfacing with reality like a "normal" person, they probably lack some kind of essential volition which is a predicate to "consensual sex." Advice - if they're seeing aliens, or drooling on the floor laughing about death, don't have sex with them. I find this area interesting because so many people may find a kind of mental construct simply "neurodivergent" from the baseline, but others might assess them to be "insane." This kind of issue will likely pop up on the back end, and will require medical expert testimony on the lack, but most of it should come down to a gut check - if they're acting insane, try to get them help, or get away from them, don't try to screw.

Sue has not consented and Dude knows Sue is unaware that there is a sexual act occurring to her (5)

This doesn't seem so far removed from (3), does it? It just expands the issue of volition in a general sense to the notion of "awareness." Obviously, if Sue isn't "aware" of what is happening to her, then it's probably difficult for her to consent to it, no? The question of awareness is very interesting to me - as it delves into the beautiful world of intoxication again; the timing of the question when Sue becomes unaware versus when Sue is able to give consent before the sex act begins is important, as it is for (3). (3) and (5) both presuppose the situation is not one where Sue consented, then willfully became sleepy / unconscious / inebriated before sex as some part of kink or laziness. The evidence of when Sue loses ability to process reality becomes all-important. Neither (3) or (5) say that Sue's merely being intoxicated qualifies the Dude's sex as instant rape; they both say that she must have lost the ability to consent, and have failed to consent prior to losing this ability; the loss of ability is presumed in (3) and (5) as, respectively, being unconscious/unable to resist and being unaware sex is happening. Before these mental states are reached, the law apparently presumes Sue could consent to subsequent sexual behavior in those mental states.

Dude has intentionally impaired Sue's power to appraise or control her conduct by administering any substance without Sue's knowledge (6) 

This one seems obvious - if you drug your date, and have sex with her, it's gonna be rape. This issue gets fun when you start mixing drugs and booze at the party, though; maybe Sue is okay with getting drunk on booze, but if you give her some ecstasy without her knowledge, then she may be impaired by your pill, despite the gallon of alcohol in her. Might not be; evidence of mutual wrongdoing could save the Dude's ass in such a situation. Maybe Dude just wanted to share the love. Who knows? Who cares? Advice? Don't give people drugs or alcohol unless they know about it and are DOWN with it. Drugging people without consent is also known as "poisoning" someone.

The theory in operation here is that sometimes, though Dude may think he has consent, he really doesn't, because Sue lacked capacity to consent. Remember when Genie shakes a drowning, unconscious Aladdin until his head nods forward? And then Genie takes Aladdin's slumping skull as evidence of consent? Wouldn't fly in court, Genie; you owe that boy another wish, you wish thief.

All of these laws focus on two states of mind - the victim's, and the suspect's. Presumably speaking, the same rules which say Sue can't consent if she can't tell where she's at would limit the "intentionality" or "knowingness" of Dude in the sexual behavior he undertakes, should he share a mental state like Sue's. Might not. I'm not a criminal expert, but I'd certainly make the defense. Usually, the idea of "voluntary intoxication" doesn't absolve someone of the judiciary's punitive theories of "intentionality / knowingness." If you get yourself drunk, you usually can't point to the fact you were shitfaced as an excuse for the behaviors you undertook, but you might be able to pull it off; not sure, haven't read up on it!

Violence is very interesting. I'm not sure if Texas has ruled on it, but in the state of Washington, there was a Supreme Court opinion that came down which said in the issue of forcible rape, consent was an element the victim needed to prove because of due process concerns. If the victim did not "resist," then the victim consented (the statute was worded in such a way that said if you put force on someone sufficient to overcome resistance, it was rape; ergo no rape if no resistance). Texas is probably similar in reasoning because of the due process concerns; in Texas, the issue is whether Dude compelled Sue to submit to him sexually by the use of force or the threat of it. I'd be interested in seeing if there's an analytical overlap between sexual force and violence and when the good ol' Boys in Blue talk about force and point out they're authorized to use "up to" lethal force to "obtain compliance" - I'd wager a similar sliding scale would apply here in sexual encounters. Is a guy putting his hand on a girl's shoulder "force" sufficient to "compel" her to sex such that it's ineffective consent? Is him spinning a knife in his hand? If a cop can kill a guy to get him to go to jail (oh, that Kafka logic) and be within the "law" then certainly there must be a tipping point in sexual encounters where innocuous behavior turns into sinister antics.

Towards a sane theory of rape
There, is, unfortunately, a disgusting trend in sex law called "affirmative consent" or the "yes means yes" school of "thought."

Read this bullshit from SUNY, a school system implementing Cuomo & Co.'s affirmative consent nonsense. "Affirmative consent is a knowing, voluntary, and mutual decision among all participants to engage in sexual activity. . . . Silence or lack of resistance, in and of itself, does not demonstrate consent. . . . Consent may be initially given but withdrawn at any time. . . . When consent is withdrawn or can no longer be given, sexual activity must stop."

Sexual activity is not defined, so presumably it's the whole shebang - from locking eyes to seeing stars. The theory at work in SUNY and other systems / institutions and states is that, if I touch your zipper, I need permission to unzip it, and more to remove your pants, and more for your shirt, and more for your bra, and more for your panties, and more for arousing you, and more for entering you, and more for every stroke of the whole ordeal. I may even need permission to ejaculate, since that's a "sexual act." [And if consent can be withdrawn at any time, does that make any second longer than necessary to pull out rape, or should our Dude remain still, lest unwanted friction constitute a non-consensual act?] Et cetera. The absurdism of "affirmative consent" is apparent on its face; it is an unworkable melange of jabberwocky.

Without having done any work on the subject, and being too lazy to read cases at this point, I'm just spitballin' here, but I have an idea about how rape prosecutions on consent should work:

Did Sue have the chance to deny sex? If she did not, then sex is rape, unless Sue afterwards ratifies the sexual act through silence, provided she had an opportunity to complain. 

Clean and simple. If you put the camera on a sex act, like I said, chances are it's gonna look like rape under the affirmative consent theory. Most people aren't "constantly" expressing consent in some definable way, mostly because the same sexual behavior that is "non-consenting" looks a lot like consenting sex. So you have to pull the camera back out of frame a bit to see where the consent arose, or, more importantly to me - where the lack of consent failed to arise. If no one has reason to believe sex is forbidden, they should be free to have sex without fear of being prosecuted under a bullshit standard for rape. Suppose a wife wants to wake a husband up with a little of that good ol'fahsioned you know what? Under affirmative consent, it's rape : ) No fun or kink allowed unless everyone's awake and not sleepy or drugged up or drunk. But what if husband wakes up and, you know, doesn't push her off because he's into it? I would say he's ratified the rape such that it's not rape anymore, and he can't later complain of it. Or are we to say, "Well, he might not push her off because he's afraid of her." I guess we could. But then I would argue such a logic would paralyze many social interactions - for the theory at work in these sex laws is not limitable only to the field of sex, but to any number of social interactions, where "consenting" to various behaviors or crudities would become the norm for deciding whether a given offense has happened. You think it can't happen? Lol at you, then.

I hear the counterargument already - "But, Cottle, what about the MILLIONS of women who get BEATEN for denying DUDES sex?" Well, I mean, if she gets beaten for denying sex, then it's a pretty clear case that the guy raped her: I'm not saying rape doesn't exist. If she's hurt or dead afterward, now you have a violent rapist on your hands. What else is there to say? If you think there's a "safe" way out of psychopaths' ways, you're wrong: the onus is on the lover to not be seduced by / hang out with psychopaths. Stop rewarding evil men with sex. Law won't change violent tendencies or bad relationships. Law only catches a handful of shit that floats to the surface. What our laws can do now is clean up the affirmative consent nonsense that's confusing matters already murky to begin with - the ugly trend of "yes is yes," a meaningless mantra chanted by idiots and recited by overpaid, unnecessary bureaucratic scum. A concise approach to the issue of consent will solve the majority of all of the problems. If a person has no opportunity to deny sex, for whatever reason, then sex with them is going to be rape, unless the person clears it afterwards, as indicated by behavior or verbiage. What else is there? All rape prosecutions reduce to evidence of behavior and communications - my theory is no different, it just insists that we focus primarily on opportunity to resist, however that resistance takes shape; if the opportunity is denied, then the meaningful right to keep one's own person from violence is violated. If it's not a big deal, then they'll let it slide. If it is, then they'll protest.

Monday, July 31, 2017

Shutting down Texas constitutional arguments raised in a Rule 736 hearing for expedited foreclosure

Recently, opposing counsel attempted to raise constitutional concerns about a home equity lien during an expedited foreclosure hearing conducted pursuant to Rule 736. By attacking the lien validity under the constitution, he hoped to essentially buy time until the lien defects were cured, or otherwise established as incurable due to the passage of time pursuant to the limitations period spelled out in the Texas Constitution. Failure to cure a lien defect could entitle homeowners, under certain types of contractual suits, to damages to the tune of full reimbursement of all principal and interest paid. However, the Supreme Court of Texas had issued two recent opinions in 2016 which provided several limitations on this remedy, and several limitations on how borrowers could seek to avoid liability under a home equity lien. Neither opinion pretended to apply to a rule 736 proceeding, and a careful reading of the opinions and other case law on the rule, together with the language in the rule itself, should make an applicant confident in resisting a homeowners’ defense about constitutional lien validity in a 736 hearing. If not, just read my piece and come up with your own rebuttals.

   I lost once on a different issue, written about here, but I shouldn’t have, because I wasn’t wrong and the respondent had not shown the law otherwise. You’re free to use my opinions but don’t get mad if you lose.

   The Texas Supreme Court opinions
   The first case was Garofolo v. Ocwen Loan Servicing, LLC, and the second was Wood v. HSBC Bank USA, N.A., both issued in May 2016. In Garofolo, the broad question was whether a borrower had a constitutional right to reimbursement of all principal and interest (“forfeiture”) paid pursuant to a home lien per the terms of Section 50(a)(6), and the more limited question was whether under the facts of Wood, the homeowner had a right to forfeiture under a breach of contract claim. In this case, the home loan’s terms required that the creditor provide the debtor with a “release of lien in recordable form,” the debtor notified the creditor she had not received the release, and after 60 days of the notice, she sued for violation of the Constitution and breach. The Supreme Court characterized that the recordable release term was just a provision to make the loan “foreclosure-eligible.” The Court found that the Texas Constitution does not provide independent terms which should be read into the home loans, such that the failure to comply with the term of the Constitution amounted to constitutional violations.

      “[S]ection 50 of the constitution protects the homestead from foreclosure for the payment of debts subject to eight exceptions, one of which covers only those home-equity loans that contain a litany of exacting terms and conditions set forth in the constitution. . . . It simply describes what a home-equity loan must look like if a lender wants the option to foreclose on a homestead upon borrower default. As to constitutional rights, section 50(a) creates but one: freedom from forced sale to satisfy debts other than those described in its exceptions.”
Therefore, constitutional compliance sufficient to provide a creditor with the right to foreclose must be measurable, and the Court state, “[C]ompliance is measured by the loan as it exists at origination and whether it includes the terms and conditions required to be foreclosure-eligible.” Id., citing Sims v. Carrington Mortg. Servs., LLC, 440 S.W.3d 10, 17 n.28 (Tex. 2014). Lenders who violate origination terms and then fail to honor those terms “[have] not violated the constitution.” Id. Post-origination performance is remediable through forfeiture, but forfeiture itself “is just one of the terms and conditions a home-equity loan must include to be foreclosure-eligible.” Id. If a debtor pays the loan off, and the lender fails to produce the recordable release of lien, there is no right to forfeiture, because “[s]ection 50(a) simply has no applicability outside foreclosure.” Id. The debtor may bring traditional tort and breach claims. The limited question (whether under her facts the debtor could obtain forfeiture as damages for breach) was answered in the negative as well: she needed to prove actual damages as a predicate to forfeiture. The Court found that, at the end of the loan’s life, the six corrective measures commonly available to redress loan origination infirmities do not apply, not even the refund and offer to refinance under Section 50(a)(6)(Q)(x)(f). Forfeiture as a remedy only kicks in if a creditor “fails to correct the failure to comply,” and the Court found that “correction” requires “actually fixing the problem of which the borrower complains;” the “failure to comply” concerns the “fail[ure] to comply with the lender’s or holder’s obligations under the extension of credit.” Id., quoting Tex. Const. art. XVI, § 50(a)(6)(Q)(x). Forfeiture is only available for failure to correct by taking one of the six available corrective measures laid out in § 50(a)(6)(Q)(x); it is not available for the creditor who opts not to undertake such a measure where those measures will not correct the deficiency. A creditor must determine if the six corrective measures would fix the problem. The borrower in Garofolo thought payment of $1,000.00 and a refinance offer would, as it was the “catch-all” provision, but the Court found in the matter of first impression that with nothing to refinance and nothing to refund, there was no point in undertaking that remedy, so it would not apply.

   In Wood, the Court “conclude[d] that liens securing constitutionally noncompliant home-equity loans are invalid until cured,” and so various legal doctrines kick in, including statute of limitations defenses to counterclaims for breach. In Wood, the borrowers notified the lenders of constitutional compliance issues and brought independent suit, seeking various remedies including a declaratory judgment as to the voidness of the loan and the forfeiture remedy. Under the law at the time, the lenders argued they were entitled to summary judgment due to limitations passing on the borrowers’ claims under the logic that the issues they raised were issues that arose at origination, so bringing suit past the four year period of limitations. While Garofolo constructed section 50(a), Wood constructed section 50(c), and found that all liens are invalid which do not comply with section 50. The Court reminded borrowers that homestead liens may be rendered valid through compliance with any broken term of the Constitution, including refunding certain overcharges as stated in section 50(a)(6)(Q)(x). Wood, discussing Doody v. Ameriquest Mortg. Co., 49 S.W.3d 342, 343-47 (Tex. 2001). “[C]omplying with a cure provision validates a lien securing a section 50(a)(6) extension of credit.” Id., quotations and citations omitted. Interestingly, the Court here observed that the “cure provisions are the sole mechanism to bring a loan into constitutional compliance,” and that a lender may undertake the option to cure at any time, as the lender did in Doody, and that there is no deadline to request cure by a borrower. Note that in the Wood case, the Court expressly refused to deal with the issue as to whether the borrowers’ allegations of noncompliance were accurate at all, only describing the conditionals which would obtain if they were accurate, as the matter was appealed on the question of statute of limitations.

   Neither case dealt with a 736 proceeding, and it seems that it would be impossible to obtain a holding in comportment with the rules articulated in these two cases during a 736 hearing. In this memo, I will further articulate why I think 736 proceedings should not be affected by the holdings in Wood and Garofolo. Annoying opposing counsel will attempt to argue that 736 orders can only issue on valid liens, that the lien is invalid, and for proof they’ll just say that something was missing from the deed of trust. However, loans are rarely self-contained in deeds of trust, but come as part of compliance bundles, including the various disclosures and acknowledgments by the homeowners. (It seems that a loan could incorporate by reference the provisions of Section 50(a), per the Fifth Circuit in the intermediate opinion leading up to the ruling in Garofolo and the Court’s remarks in the opinion.) Opposing counsel will point to the language in Wood and say, “See, liens are only valid if they are compliant with Section 50(a), and until cured, they’re not compliant, so there’s nothing to foreclose in this case because there’s no valid lien.” Now, this is a deceptive argument since a 736 order is not a foreclosure order, but merely permission to proceed with foreclosure, and is furthermore deceitful in that 736 hearings are not amenable to discovery. Tex. R. Civ. P 736.4. However, at least one case has permitted respondents to attempt to attack the loan documents’ validity for purposes of asserting the 736.5 nonpayment response, including an assertion of an improper party defense. See Bormio Investments, Inc. v. Wells Fargo Bank, N.A., 2016 U.S. Dist. LEXIS 14368, *15 ("Rule 736 does not prevent a respondent from asserting a 'defense to the Deed of Trust'” because it "expressly allows a respondent to plead in a response why the respondent is not obligated for payment"). Bormio did not deal with a 736 proceeding, but merely asserted what could be raised in a 736 proceeding as part of dispensing with an argument that 736 curtailed constitutional rights of the debtor. In Bormio, the plaintiff argued that it was not a proper party to the loan, and the court concurred, adding that it could raise party status as a defense to payment of the loan obligation. I have yet to find a case saying that a borrower can raise validity of the lien as a responsive defense, and such a provision is nowhere provided in Rule 736.

   What is a 736 proceeding?
   736 proceedings have been described as no “ordinary lawsuit” but rather a “faster, more streamlined alternative to judicial foreclosure.” Huston v. U.S. Bank Nat’l Ass’n, 359 S.W.3d 679, 682 (Tex. App.–Houston [1st Dist.] 2011). The sole issue in a 736 proceeding is whether a creditor has the right to obtain an order to proceed with foreclosure pursuant to the Rule. See TRCP 735.1 (“Rule 736 provides the procedure for obtaining a court order, when required, to allow foreclosure of a lien containing a power of sale” in particular documents such as a security instrument, “including a lien securing any of the following: a home equity loan . . . under article XVI, section[] 50(a)(6) . . . of the Texas Constitution.”

   In Huston, the bank applied for expedited foreclosure pursuant to Rule 736; the homeowners asserted various defenses through an answer, and then filed a counterclaim, in the same application cause. Subsequently, they filed in a separate suit a declaratory action. The district court hearing the 736 application dismissed the application, together with counterclaim. According to the First District Court of Appeals, answers are not permitted, but responses to applications are allowed. The Court of Appeals was dealing with a previous version of Rule 736, which then had explicitly limited the subject matter of a 736 proceeding to “the right of an applicant to obtain an order to proceed with foreclosure under the security instrument and Tex. Prop. Code § 51.002.” Id. at 682, quoting former Tex. R. Civ. P. 736(7). The court found “no provision for any other determination to be made by a factfinder.” Id., citing former Tex. R. Civ. P. 736(6). Applications should be denied if “the respondent establishes that the applicant has not satisfied any element under the rule.” Id. While the Rule was silent on counterclaims being filed, the Court found that “a counterclaim that attempts to address the underlying merits of the applicant’s conduct–and for which discovery would be necessary–is incongruent with the purposes of a rule 736 proceeding.” Id. at 682-83.

   Respondents’ arguments about lien validity in a 736 proceeding
   How would a party argue lien validity in a 736 proceeding beyond the basic responses listed in Rule 736.5? Lien validity is not listed, only “why the respondent is not obligated for payment of the lien.” Even if the borrower argued the lien was invalid, the lien’s validity is only pertinent for purposes of foreclosure, not for payment.

   In my last 736 hearing, opposing counsel simply shrugged and said “736.5 doesn’t limit my client’s responses just to those five issues.” However, the Rule simply says that a respondent may file a response, which could look like a general denial under Rule 92, but that any response must affirmatively lay out any of those five issues, including obligation to pay the lien. Any “independent claim[s] for relief” are not allowed. Claims for relief are treated in Rules 47 and 48. The previous version of Rule 736 treated in Huston permitted respondents to “file a response setting out as many matters, whether of law or fact, as respondent deems necessary or pertinent to contest the application,” but had to be “made on personal knowledge and shall set forth such facts as would be admissible in evidence.” Rule 736 is not as open for respondents any longer.

   Assuming that a respondent could sneak in issues under Wood and Garofolo into a 736 proceeding on lien validity, and the court found a basis to deny the applications seeking expedited foreclosure, there would appear to be no method at law for a creditor to obtain a 736 order; there is no appeal and no review of such orders, and no reconsideration allowed. Without discovery permitted, and with only a few documents required to be tendered under the 736 application checklist, a creditor would not necessarily be capable of investigating the claims of the debtor regarding constitutionality, and the court would need to examine every clause of the documentation attached to satisfy its curiosity regarding foreclosure-eligibility under section 50(a) and lien validity under section 50(c).

   There also does not appear to be any proper procedure to get this question certified before the Supreme Court, either, except on mandamus, which would require that a court denies relief to a creditor under the Wood / Garofolo holdings and there the trial court have abused its discretion in denying relief and there be no other available remedy on appeal. Proving abuse will be quite difficult as it won’t be easy to establish that the denial of a request for a simpler method of foreclosing the lien occurred arbitrarily or unreasonably, especially if due concerns about lien validity are invoked by the applicant’s materials and the respondent’s response.

   Make your own hypo up to show how dumb it is to do this in a 736 hearing
   In short, you could expect savvy opposing counsel to throw monkey wrenches into the system by arguing lien validity issues, but be prepared to point out the significant limitations of a 736 proceeding and the loan process generally: the required materials for a 736 application are not the entire loan packet, but in addition to an application meeting the requisites, “an affidavit of material facts . . . describing the basis for foreclosure” and “a legible copy of the note, original recorded lien, or pertinent part of a property owners’ association declaration or dedicatory instrument establishing the lien, and current assignment of the lien, if assigned” together with a legible copy of “each notice required to be mailed to any person under applicable law and the loan agreement, contract, or lien sought to be foreclosed before the application was filed and proof of mailing of each notice” (I wrote about this already). Tax lien materials need to be attached as well if it’s a tax lien foreclosure. You will note that Rule 736 does not state to attach every single document containing the pertinent disclosures and acknowledgments of the terms and conditions found in section 50(a)(6). Hypothetically, assume the challenge to the loan was something boring like section 50(a)(6)(M)(I), which requires that the home loan not be closed “before the 12th day after the later of the date that the owner of the homestead submits a loan application to the lender for the extension of credit or the date that the lender provides the owner a copy of the notice prescribed by Subsection (g) of this section.” If respondent shows up and says, “Actually, the loan was closed 11 days after the date we submitted our loan application!” What is a court supposed to do? Conduct a lien validity analysis? How would it find facts to make a ruling? Would it require the parties reduce the fight to questions of competing affidavits? Respondents who enter court arguing that the court should conduct a constitutional analysis of liens for defects are just trying to bog the court down with something that it can’t reasonably do with the materials it’s limited to reviewing.

Wednesday, July 19, 2017

Texas Revival of Dormant Judgments: Service of citation needed with motion to revive? Depends on which court you're in.

Recent lawyering has me considering yet another aspect of civil judgment revivals. Opposing counsel reached out to me in a case and made a lowball offer on a judgment we had recently moved to revive, asserting that we could not prove service of the motion to revive and citation thereon. I chortled to myself: the minority position was being asserted as a defense to me, but it was something to think about; when I first wrote about revivals, I undertook this minority position as the historically accurate one, which you can see here. However, I also edited my first post to reflect that this position was wrong (I looked up dockets on the cases, read historical cases, and conducted a closer examination of Rule 154; I am convinced I am right.)

The opposing counsel's argument ran like this: under the opinion issued in F.D.I.C. v. Bauman, Cause No. 90-CV-0614-H (N.D. Tex. Jul. 30, 2004), it is clear that the Texas Rules of Civil Procedure require service of the motion to revive together with a citation, and proof of service must be done by filing a return.

Before I get into this argument, let’s look at the case language.

Under the Federal Rules of Civil Procedure, the “writ of scire facias” was abolished. See Fed. R. Civ. P. 81(b). To obtain the relief previously provided thereby, parties are invited to commence the “appropriate action or appropriate motion under the practice prescribed in these rules.” Id. Well, what’s the “practice prescribed” for dormant judgments? It’s under Fed. R. Civ. P 69(a), which discusses execution on judgments; you need to follow the practice and procedure of the state in which the district court is held. So for a court in the Northern District of Texas, you turn to the rules and laws of Texas.

Without discussing how motions to revive exactly equal out to scire facias, the court simply determined that Texas law permits “for scire facias to be initiated by a motion to revive judgment.” Id., citing Vackar v. Memorial Bank, No. 01-00-01033-CV, 2002 WL 1303424, at *1, 3 (Tex. App.–Houston [1st Dist.] June 13, 2002). Did the court need to spell out that motions are “scire facias”? Maybe. Tex. Civ. Prac. & Rem. Code § 31.006 provides that dormant judgments may be revived in one of two ways - “by scire facias or by action of the debt” brought within the two-year deadline following dormancy. But I’ve already discussed in my original post how the “scire facias” contemplated in TCPRC § 31.006 is not a true blue writ you serve out, like a writ of garnishment. Why is that? Because all of the appellate opinions treating the concept simply “grant scire facias” after it’s asked for; nothing is served outside of the basic materials, and those materials are served pursuant to Rule 21a like any old motion. Look at the docket for Trad (Harris County No. 1989-03027), which was appealed by the judgment creditor. There is an “Order on Petition for Scire Facias” which denied the relief sought, and was appealed, but note that there is not a “writ of scire facias” issued or served. In the Trad opinion, the court simply frames it like so: “The trial court denied appellants’ petition for scire facias to revive a dormant judgment,” which was in error and the appellate court “grant[ed] appellants’ petition for scire facias, and revive[d] appellants’ dormant judgment.” In the Trad case, the only writ discussed was the writ of execution, which is meaningful for date calculations of the dormancy period. Under the facts of Trad, whether a writ of execution was properly issued was germane to whether their petition to revive was timely, and therefore whether the judgment should be revived. There is no discussion of writs of scire facias; the court concludes, “appellants met the requirements for scire facias” (i.e. interpreting scire facias as the relief sought). In Cadle Co. v. Rollins, 2010 WL 670561, at *1 (Tex. App.–Houston [1st Dist.] Feb. 25, 2010) (not reported), another case I’ve discussed, the judgment creditor “sought to revive the judgment by a writ of scire facias” by a motion to revive. Nothing in the underlying docket for Rollins contemplates a “writ for scire facias” was issued or served; the motion it titled “Judgment Plaintiff’s Motion for Scire Facias to Revive a Judgment” and this was set for hearing.

Okay, so my ears are already perked at the idea that we should read the mere term “scire facias” in TCPRC § 31.006 as equivalent to a “writ of scire facias” as if it’s something to be served out. The term “scire facias” has come to be equivocated to the “order to revive” or revivor. How did the court in Bauman reach a contrary conclusion?

Well, the court said that’s what the TRCP requires! What does the TRCP say about scire facias? Almost nothing, but the court in this case glommed onto this tidbit: “Rule 154 of the Texas Rules of Civil Procedure specifically provides that ‘scire facias and returns thereon . . . shall conform to the requisites of citations and returns thereon, under the provisions of these rules.’” Id. (ellipsis in the original). So that means Rule 99 (citation), 106 (service) and 107 (the return) would apply, under the court’s logic. But take careful note of that deceitful ellipsis, and always take note of ellipsis provided to you by the enemy or the opinion.        

What does Rule 154 really say? It’s found as part of a series of Rules under Section 7 of the TRCP, labeled “Abatement and Discontinuance of Suit.” That doesn’t sound like revival of a dormant judgment, does it?

Rule 150 treats abating lawsuits where parties die before decision or verdict; Rule 151 provides that “the heirs, or the administrator or executor” of a dead plaintiff can be made the plaintiff, but if no one shows up on time to do so, “the clerk upon the application of defendant, his agent or attorney, shall issue a scire facias for the heirs or the administrator or executor” of the dead plaintiff, and “[a]fter service of such scire facias” if no one shows up, the defendant can dismiss the suit. Rule 152? If a defendant dies, “the clerk shall issue a scire facias for the administrator or executor or heir requiring him to appear and defend the suit and upon the returns of such service, the suit shall proceed . . .” What if the executor dies? Rule 153 says “the suit may be continued by or against the person succeeding him in the administrator, or by and against the heirs, upon like proceedings being had as provided in the two preceding rules . . . .” And now we’re at Rule 154, which we already know says “[t]he scire facias and returns thereon, provided for in this section, shall conform to the requisites of citations and the returns thereon. . . .”

Wow, it’s as if nothing in the Rules says anything about revivals being governed by the Rules of Civil Procedure. You see where the court in Bauman cut out that delightful little part about how Rule 154 scire facias and returns thereon need to be served out as “provided in this section [Section 7, about abatement and discontinuance]”? Sneaky, sneaky.

I get the opposition: “but service of notice wasn’t an issue in all these other cases” - that’s because it’s not a fucking issue. You think these guys would just sleep for years on such a tiny, crucial aspect as notice being a statutory requirement for revival in the format of a citation versus a mere paper? Hell, no. The feds just got it wrong.

Bad reading makes bad law but I’ll never be a judge because I believe in justice too much. The Southern District of Texas continued this reign of error with F.D.I.C. v. Davis, No. H-92-3759, citing Bauman favorably.

Motions to revive are governed by Rule 21a, which provides that every “motion . . . required to be served under Rule 21, other than the citation to be served upon the filing of a cause of action and except as otherwise expressly provided in these rules, may be served by delivering a copy to the party to be served” in a variety of ways. Motions to revive are motions. So serve them like regular motions. I’ll never get a revival without a notice of setting and satisfying the court that I noticed the setting properly. This is done by a certificate of service, which “is proof of service” under the Rules. Tex. R. Civ. P. 501.4(d).

If anyone has the chance to set the record straight in the Western or Eastern Districts, or hell, to appeal the N.D. or S.D. if they hold so again when they get a chance, please do. This is bad law.