June 20, 2019

Archives for June 3, 2013

Morphic Fields and Change (Part 4): Survival of the Fittest

rhodesEditor’s Note: This is Part 4 of a series of articles on Morphic Fields and Change. If you haven’t already read Part 1Part 2, or Part 3, they’re short and well worth it—go read them now. We’ll wait.

Ever wonder why people respond so negatively to change?

In their book Buddha’s Brain: The Practical Neuroscience of Happiness, Love & Wisdom, the co-authors – one a neurologist and the other a neuropsychologist – root our resistance to change in the evolutionary biology of the brain. Apparently our brains have been hardwired with certain survival instincts that trigger our habitual “No way!” response.

One of these instincts is the brain’s version of biological homeostasis – the strong urge to keep the morphic field in balance. Our brains are constantly creating and maintaining “stabilizing systems” in their chemistry. They’re like a waiter carrying a precarious stack of dishes; they’re not going to like it if we mess with their balancing act. But of course that’s precisely what we do when we introduce the idea of change. The result? Our brains aren’t happy, and they let us know.

Another neurological survival instinct is our propensity to remember negative experiences more than positive ones. Turns out our brains learn best that way – which I guess is why we read all those cases in law school about things that went wrong. We’re like the tribe who remembers the guy who ate deadly nightshade and didn’t come back from the hunt. We’re not doing that again.

These survival instincts are why the human race made it this far, and why we view new things with suspicion until we’re sure they’re not going to eat us for lunch.

Well okay, brains, and thanks for the help, but it’s now the year 2013. There aren’t any T-Rexes or saber-toothed tigers anymore, and we can find pictures of deadly nightshade on the internet. Plus, we’ve been at this survival of the fittest thing for a long time now. So how about we get over it and move on?

If only it were that easy. These are survival instincts; they come from the same fight or flight hardwiring that fires in pre-conscious nanoseconds whenever our Morphic Field Danger Alert goes off, which is surprisingly often. We think we’re all grown up as a human race and past all that, but we’re not – at least our brains aren’t.

Fortunately, as the authors of Buddha’s Brain also point out, we can use our minds to rewire our brains. We can cultivate new ways of thinking that create new neural pathways that embrace new perspectives about trying new things. It takes awareness and vigilance, but it can be done.

To be continued.

Kevin Rhodes helps individuals and organizations to make change from the inside out. He leads workshops on change for a variety of audiences, including the CBA’s Job Search and Career Transitions Support Group. You can email Kevin at kevinzdr@gmail.com.

Colorado Court of Appeals: Statute of Limitations Tolled for Cross-Claims In Complicated Foreclosure and Quiet Title Proceeding

The Colorado Court of Appeals issued its opinion in Deutsche Bank Trust Company Americas v. Samora on Thursday, May 23, 2013.

Statute of Limitations—Equitable Tolling—Attorney Fees—Fraud in the Factum—Holder in Due Course—Spurious Lien.

Defendant Veronica E. Samora appealed the trial court’s judgment in favor of Deutsche Bank Trust Company Americas (Deutsche Bank). Samora also appealed the trial court’s dismissal of her claims against Saxon Mortgage, Inc. (Saxon). The Court of Appeals affirmed the judgment and the case was remanded with directions.

On June 30, 1997, Samora purchased real property at 4555 W. 33rd Avenue in Denver (property), financing the purchase with a note and deed of trust. In 2003, Samora fell behind on payments on the note and foreclosure proceedings were commenced. It was disputed whether Samora was aware of the foreclosure action.

In October 2003, Samora approached Randy Gonzales, a mortgage broker, to refinance the property to lower her monthly payments. In October, Samora executed a new promissory note and deed of trust in favor of BNC Mortgage, Inc., which was then transferred to Chase Bank.

On October 21, 2003, Gonzales and Kenneth Medina, his uncle, transferred title to the property into their names by forging Samora’s signature on a quitclaim deed. Medina then obtained a loan for $32,000 from a third party, which he secured by another note and deed of trust. Medina later executed a quitclaim deed conveying the property solely to Gonzales.

Samora was unaware of the foregoing transactions. In May 2004, she sought a second refinancing of the property to obtain an even lower interest rate. Chase Bank told her the property belonged to Gonzales. When Samora confronted him, he acted surprised to learn that title to the property was in his name. On September 9, 2004, Gonzales signed and filed a quitclaim deed conveying the property back to Samora.

Samora continued to work with Gonzales and Medina on the second refinance. When Medina determined Samora was ineligible for refinancing, he sold the property to his girlfriend, Amanda Wasia, who would then lease the property back to Samora. Samora was unaware of this.

In September 2004, Gonzales completed a loan application for Wasia with Saxon. The loan application provided a false income and stated that she would be using the property as her primary residence. Wasia did not qualify for the loan. Matthew Libby, a loan officer with Saxon, suggested to Medina and Gonzales that they submit a falsified gift letter stating that Wasia was Samora’s granddaughter and that Samora was gifting the equity in her home to Wasia. Based on this, Wasia obtained a loan from Saxon for $172,000.

On September 20, 2004, Medina told Samora her loan was approved and had her come to his office to sign the documents. When she arrived, he placed a document in front of her with the top covered by his hand and told her to sign. She noticed it was titled “Warranty Deed” and that Wasia, whom she had never heard of, was on the deed. When she asked Medina about this, he stated that Wasia was a co-signer and on the deed for her protection. She signed it and it was recorded on October 4, 2004.

Also on the same day, Wasia executed a note and deed of trust in favor of Saxon for the $172,000 loan. The proceeds were used in part to pay off Samora’s existing loan on the Property. Saxon endorsed the note in blank, and the note and deed of trust were deposited in the trust res of Saxon Asset Securities Trust 2004-3 (Trust). Deutsche Bank was the indentured trustee of the Trust.

In 2005, this whole scheme fell apart. After investigation by the Denver District Attorney’s Office, Gonzales, Wasia, Medina, and Libby were indicted by a grand jury for crimes, including fraud. They all pleaded guilty and, as part of the plea agreement, each executed a quitclaim deed in favor of Samora.

No payments were made on the note during the criminal proceedings. In October 2006, Deutsche Bank commenced foreclosure proceedings. Based on the fraud committed by the parties and the complexity of the underlying transactions, the magistrate denied the requested foreclosure.

In July 2007, Deutsche Bank filed this CRCP 105 action to quiet title in the Trust. A default judgment was entered, which Samora appealed and a division of this Court reversed (Samora I). After reversal, Deutsche Bank amended its complaint to include a claim for unjust enrichment. Samora filed an amended answer on November 2, 2009, alleging for the first time counterclaims against Deutsche Bank and cross-claims against Saxon.

Saxon filed a motion to dismiss based on the two-year statute of limitations applicable to the cross-claims. On February 17, 2012, the trial court granted the motion to dismiss. A trial to the court was held on Deutsche Bank’s and Samora’s claims and counterclaims, and the court found in favor of Deutsche Bank.

On appeal, Samora argued it was error to grant Saxon’s motion to dismiss based on the statute of limitations. The Court disagreed. Samora filed its cross-claims on November 2, 2009. They sounded in tort and therefore had to be brought within two years after the cause of action accrued. Similarly, its spurious documents and lien claims had to be brought within two years of accrual. Accrual of such claims occurs on “the date both the injury and its cause are known or should have been known by the exercise of reasonable diligence.” Samora argued accrual occurred in October 2006 when Deutsche Bank started its foreclosure proceedings. The Court found that Samora was injured when she executed the deed to Wasia in September 2004, which made it possible for Wasia to execute the note and deed of trust. In December 2005, indictments were issued against Medina, Gonzales, Libby, and Wasia based on their scheme to transfer title to the property. The Court found that Samora either knew of the indictments or should have known of them based on her participation in pursuing these actions against the perpetrators.

Samora argued the doctrine of equitable tolling should have prevented the application of the statute of limitations. The Court disagreed. Equitable tolling of a statute of limitations is restricted to situations in which the defendant has wrongfully impeded the plaintiff’s ability to bring the claim or truly extraordinary circumstances prevented the plaintiff from filing the claim despite diligent efforts. The Court found neither of these circumstances was present.

Saxon was awarded reasonable attorney fees pursuant to CRS § 13-17-201, and the Court held it was entitled to reasonable attorney fees for defending this appeal. The Court remanded the case to the trial court for a determination of reasonable attorney fees.

Samora then argued it was reversible error for the trial court to find that she failed to establish fraud in the factumin the execution of the warranty deed. Fraud in the factum results in an instrument that is void and not merely voidable. The Court agreed with Samora that the trial court erred in using an objective standard of “ordinary prudence,” rather than a subjective standard based on her education, age, and other considerations to determine whether she was excusably ignorant in signing the warranty deed. However, the Court concluded that Samora failed to establish fraud in the factum because she was not fraudulently deceived about the nature of the document she signed and because she had a reasonable opportunity to obtain knowledge; therefore, she was not excusably ignorant. Samora knew the nature of the document she signed; she was deceived by Medina’s fraudulent misrepresentations about the use of the warranty deed. As a result, the deed was voidable but not void. In addition, the Court agreed with the trial court that Samora was not excusably ignorant.

As a result of the warranty deed being voidable and not void, to defeat Deutsche Bank’s claim to quiet title in the trust, Samora needed to show that Deutsche Bank as trustee was not advancing a claim by the trust as a holder in due course of the note and deed of trust. Samora argued that the interrelated Saxon companies and the trust shared such a “close connectedness” that the trust’s status as a holder in due course should be defeated. The trial court simply concluded that Deutsche Bank was a holder in due course.

Samora argued the focus should have been on the status of the trust, and the Court agreed. However, Samora introduced no evidence that Saxon and the other Saxon entities shared employees, officers, directors, or other members, or that any one entity controlled the actions of another. Absent such evidence, the Court was unwilling to decide that corporate status was enough to establish a close relationship causing the conduct of Saxon to be imputed to the Trust.

Finally, Samora contended that it was error not to find that the deed of trust was a spurious document under CRS § 38-35-201(3). A deed of trust is a lien. The Court agreed with Deutsche Bank that the deed of trust should have been examined under CRS § 38-35-201(4) as a spurious lien, not as a spurious document. Samora executed a voidable warranty deed in favor of Wasia. When Wasia executed the note and deed of trust, she was the legal owner of the property and the deed of trust was not a spurious lien. The judgment was affirmed.

Summary and full case available here.

Colorado Supreme Court: Announcement Sheet, 6/3/13

The Colorado Supreme Court issued one published opinion on Monday, June 3, 2013.

People v. Mason

The summary for this case is forthcoming, courtesy of The Colorado Lawyer.

Neither State Judicial nor the Colorado Bar Association provides case summaries for unpublished appellate opinions. The case announcement sheet is available here.

Tenth Circuit: Unpublished Opinions, 5/31/13

On Friday, May 31, 2013, the Tenth Circuit Court of Appeals issued no published opinions and two unpublished opinions.

United States v. Jones

United States v. Perez-Ramos

No case summaries are provided for unpublished opinions. However, published opinions are summarized and provided by Legal Connection.