Second federal suit challenging Colorado foreclosure law emerges
A second federal lawsuit contesting the constitutionality of Colorado’s foreclosure laws has emerged.
Unlike the case of an Aurora woman who obtained an interim federal injunction against the foreclosure auction of her house, the other involves a federal judge who decided a Denver man’s 14th Amendment guarantee of due process was in question.
U.S. District Judge Philip Brimmer last week dismissed the entirety of John Mbaku’s complaint against Bank of America that challenged the bank’s right to foreclose on his condominium. Brimmer determined there was a constitutional issue, though Mbaku didn’t bring it up specifically.
Because Mbaku, a law-school graduate who doesn’t practice law, is representing himself, the judge is given wider latitude to read between the lines of a complaint since plaintiffs might not be as sophisticated or well-versed in the complexities of law.
In the introduction to his lawsuit filed last year, Mbaku noted how Colorado law allows a bank or lender to foreclose without showing how it obtained ownership of the loan.
More important, because loan ownership is determined by who has possession of the document — known as indorsement in blank — Mbaku said anyone could come by that right, even a thief.
“Plaintiffs could illegally obtain or otherwise steal a promissory note … from any bank … and present themselves at a … hearing and be deemed … to be the proper party to foreclose,” Mbaku wrote.
More here…
Lots more below…
| Plaintiffs: | John M. Mbaku and Luvibidila Jolie Lumuenemo |
|---|---|
| Defendant: | Bank of America, National Association |
| Case Number: | 1:2012cv00190 |
| Filed: | January 24, 2012 |
| Court: | Colorado District Court |
| Office: | Denver Office |
| County: | Arapahoe |
| Presiding Judge: | Philip A. Brimmer |
| Referring Judge: | Kristen L. Mix |
| Nature of Suit: | Torts – Property – Truth in Lending |
| Cause: | 28:1331 |
| Jurisdiction: | Federal Question |
| Jury Demanded By: | Plaintiff |
Follow case documents by RSSAvailable Case Documents
| Date Filed | # | Document Text |
|---|---|---|
| May 9, 2013 | 37 |  ORDER CERTIFYING MATTER TO THE COLORADO ATTORNEY GENERAL. Plaintiffs’ challenge to the constitutionality of Rule 120 of the Colorado Rules of Civil Procedure is certified to the Colorado Attorney General. The Clerk of this Court shall forward a copy of this Order, the 1 complaint, and the 26 February 1, 2013 Order, certified under seal, to the Colorado Attorney General. By Judge Philip A. Brimmer on 5/9/13. (mnfsl, ) |
| April 12, 2013 | 36 | MINUTE ORDER denying without prejudice 34 Plaintiffs’ Motion for Leave to File Amended Complaint Pursuant to Fed. R. Civ. P. 15(a). By Magistrate Judge Kristen L. Mix on 4/12/13.(mnfsl, ) |
| January 30, 2012 | 7 | ORDER denying 5 plaintiffs’ Emergency Motion for Temporary Restraining Order. By Judge Philip A. Brimmer on 1/30/12.(pabsec) |
| January 27, 2012 | 4 | ORDER Setting Scheduling Conference for 5/14/2012 at 09:30 AM in Courtroom C204 before Magistrate Judge Kristen L. Mix. By Magistrate Judge Kristen L. Mix on 1/27/12. (Attachments: # 1 Attachment 1, # 2 Attachment 2, # 3 Attachment 3, # 4 Attachment 4) (mnfsl, ) |
| January 26, 2012 | 2 | ORDER re: 1 Complaint for Declaratory and Injunctive Relief. Until such time as plaintiffs file a motion that complies with the Federal Rules of Civil Procedure and the Local Rules, the Court will not take up any request for relief found within their complaint. By Judge Philip A. Brimmer on 1/26/12. (mnfsl, ) |
Mbaku et al v. Bank of America, National Association
Colorado District Court (cod)
Docket Number: 1:12-cv-00190-PAB-KLM
Pacer Case Number: 130970
Date filed: None entered
Date terminated: None entered
Date last filing: None entered
Document List
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On June 15th, 2015, the Tenth Circuit delivered the long awaited opinion in John Mbaku et al vs Bank of America 14-1379. True to form, the court avoided the constitutional issues plaguing Colorado. In a tortured opinion which by academic standards would.” be a cop-out, on paragraph on p. 8 stood as an honest opinion regarding foreclosures in Colorado.
Although a person who does not own the instrument or who wrongfully possesses the instrument “may be . . . entitled to enforce the instrument,” id. § 4-3-301,a mortgagor has a defense to payment, and derivatively, foreclosure, “if the person seeking enforcement of the instrument does not have rights of a holder in due course and the [mortgagor] proves that the instrument is a lost or stolen instrument,” id. § 4-3-305(c).
Why is this important you say? Because it is at the heart to determine that lenders who cannot meet the burden of a “holder in due course” do not have the legal right to foreclose.
In 2012, The Tenth Circuit decided .” McDonald v OneWest Bank, F.S.B., 680 F.3ed 1264, 1266 (10th Cir. 2012) concluding that there was no law requiring that the entity entitled to enforce had to be a holder in due course. This was an issue of state law that should have been Certified to the Colorado Supreme Court to determine.
In 2013, the Colorado Appellate Court decided Deutsche Bank Trust Company Americas v. Samora, 2013 COA 81 that said:
said at ¶ 47 “Because the warranty deed is not void, in order for Samora to defeat Deutsche Bank’s claim to quiet title in the Trust, she must show that Deutsche Bank as trustee is not advancing a claim by the Trust as a holder in due course of the Note and Deed of Trust.”
It is apparent that Samora could defeat the Trust in a Quiet Title Action if the Trust was not a holder in due course. Why should the result be different if the Trust foreclosed on her in a Rule 120 or a Rule 105 and obtained “good title”? If she, or Brumfiel could prove that the Trust was not a holder in Due Course as an “owner” of the note, the Trust should not be able to foreclose.
Colorado law does have much to say on the “Holder in Due Course” issue. They just didn’t bother to look.(See Myrick vs Garcia, 332 P.2d 900 (1958) and Clinton GEORG and Freestyle Sports Marketing, Inc., Petitioners v. METRO FIXTURES CONTRACTORS, INC., No. 07SC26.(2008)
My name is Reuben Nieves, reuben.nieves@yahoo.com