Notice: David Boyce

NO. 09-CI-00757 / JEFFERSON CIRCUIT COURT
DIVISION EIGHT
JUDGE MCKAY CHAUVIN
LASALLE BANK NATIONAL ASSOCIATION, AS TRUSTEE UNDER THE POOLING AND SERVICING AGREEMENT DATED AS OF DECEMBER 1, 2006, GSAMP TRUST 2006-HE8 / PLAINTIFF
v. NOTICE-MOTION-ORDER
JULIA SHULTZ DEFENDANT

* * * * * * * * * * * * * * * * * * *

NOTICE

Notice: David Boyce

Bryan Schaefer

Nielson & Sherry, PSC

639 Washington Ave.

Newport, KY 41071

PLEASE TAKE NOTICE that the motion will be will be heard in the above captioned court on Monday, March 1, 2010 at 1:15 A.M. or as soon thereafter as it may be heard.

MOTION TO SET ASIDE VOID JUDGMENT

Comes now the Defendant, Julia Shultz, by and through counsel and pursuant to CR 60.02(e) moves the Court to set aside the void judgment entered on December 14, 2009. In support of this motion, Defendant states as follows:

A Plaintiff must have standing to pursue foreclosure. Standing requires that a Plaintiff have a substantial interest[1] in the loan underlying the suit. Without standing, the Court lacks jurisdiction to decide the merits of the case.[2] Any judgment entered where the Court lacks jurisdiction is void.[3] In this case, Plaintiff trustee does not have a substantial interest in the loan, the court lacks jurisdiction to enter judgment against Defendant, and such entry is void.

CR 60.02 permits the Court to “relieve a party…from its final judgment [if] … (e) the judgment is void.” Such relief is appropriate here as Plaintiff has no interest in the promissory Note underlying this action, suffers no harm from an alleged default, and possesses no right to enjoy a six-figure payday following the sale of Defendant’s home in foreclosure.

On January 26, 2009, Plaintiff chose to file suit in this Court to pursue a foreclosure action against Ms. Shultz. Plaintiff, LaSalle Bank National Association, is the trustee for a securitized trust, GSAMP Trust 2006-HE8, that contains, presumably, thousands of mortgage loans. In response to Defendant’s Request for Production of Documents, Plaintiff provided a copy of a promissory Note made by Defendant Bruce Shultz in favor of Wilmington Finance, Inc.[4] Plaintiff also provided Defendant a copy of an Allonge to the Note that negotiates the Note from Wilmington Finance, Inc. to “Bank of America, National Association as successor by merger to LaSalle Bank National Association, as trustee under the Pooling and Servicing Agreement dated as of December 1, 2006, GSAMP Trust 2006-HE6.”[5] These documents demonstrate that Plaintiff, as trustee for a securitized trust, has no standing because the trust never acquired any interest in the promissory Note.

Plaintiff is the trustee of a trust that was created by a Pooling and Servicing Agreement (PSA).[6] This PSA outlines what party is conveying assets into the trust pool, who will serve as the trustee of the trust, who will service the home loans in the trust, and the duties of each of these parties. It also outlines the dates by which certain events must occur.

For example, the loan “closes” on December 27, 2006.[7] After that date, the trustee is forbidden from accepting assets to the trust pool except in the limited instance of a Qualified Substitute Mortgage Loan. Furthermore, the PSA outlines the mechanism by which loans enter the trust pool. Section 2.01 of the PSA, entitled “Conveyance of Mortgage Loans,” states “The Depositor, concurrently with the execution and delivery hereof, hereby sells, transfers, assigns, sets over and otherwise conveys to the Trustee for the benefit of the Certificateholders, without recourse, all the right, title and interest of the Depositor in and to the Trust Fund, and the Trustee, on behalf of the Trust, hereby accepts the Trust Fund.”

The PSA defines “Depositor” as “GS Mortgage Securities Corp.” The extensive PSA identifies no other party as having the authority to convey assets into the trust. The Depositor, GS Mortgage Securities Corp., is the only party that can convey assets into the trust under the Plaintiff’s Pooling and Servicing Agreement.

Plaintiff’s Attempted Transfer of Defendant’s Loan into the Trust is Void under Applicable Law

Plaintiff’s status as real party in interest with standing to pursue foreclosure depends on Plaintiff having a substantial interest in the suit. Plaintiff’s own documents demonstrate that not only does Plaintiff trustee not have a substantial interest in the promissory Note underlying this suit, it in fact has no interest. Plaintiff has no interest because the Defendant’s loan is not a part of the trust for which it is trustee.

Plaintiff’s own Note and Allonge demonstrate that Wilmington Finance, Inc. negotiated ownership of this note directly to the Plaintiff trustee. Plaintiff’s documents reveal that the Depositor, GS Mortgage Securities Corp., never had an interest in Defendant’s loan that it could convey into the Plaintiff trustee. With no interest in the loan to convey, the Depositor’s conveyance of “all right, title, and interest” under the PSA conveyed precisely no interest into the trust. Plaintiff trustee has no standing to pursue this claim because the only party that conveyed assets into the trust never had an interest in Defendant’s promissory Note to convey.

Furthermore, the “Allonge to Note” raises additional questions about the timing of the purported transfer. The Allonge purports to negotiate the Note from the originator, Wilmington Financial, Inc. to “Bank of America, National Association as successor by merger to LaSalle Bank National Association…”. (Emphasis added.) Bank of America did not acquire LaSalle Bank until October 1, 2007,[8] almost a year after the date the trust closed, December 27, 2006. The inclusion of Bank of America on the Allonge indicates that the Allonge (and thus the negotiation) occurred well after the trust closed. Again, acquisition of additional assets after the start-up date is strictly prohibited by the Plaintiff’s Pooling and Servicing Agreement.

The conveyance described by Defendant’s documents occurred at least nine months after the trust’s start-up date and between parties that were not authorized to convey assets under the Pooling and Servicing Agreement. New York law governs the trust and the parties according to the PSA.[9] Any transfer of a loan into the trust in contravention of the trust agreement is void under New York law. Both the statutory and case law in New York is clear: “If the trust is expressed in the instrument creating the estate of the trustee, every sale, conveyance, or other act of the trustee in contravention of the trust, except as authorized by this article and by any other provision of law, is void.” McKinney’s Consolidated Law of New York Annotated, estates Powers and Trust Laws § 7-2.4 (2003); see Allison & Ver Valen Co. v. McNee, 9 N.Y.S.2d 708 (N.Y. Sur. 1939).

The conveyance of this loan was from an unauthorized party and at an unauthorized time. Plaintiff’s attempted acceptance of a conveyance in contravention of the Pooling and Servicing Agreement is void under New York law. Plaintiff trustee has no interest in the subject mortgage loan, suffers no damage by any alleged default, and has no right to receive the proceeds flowing from a foreclosure sale of Defendant’s home. Plaintiff’s own documents, the Pooling and Servicing Agreement, and applicable law demonstrate that Plaintiff, in fact, has no interest in the underlying note and has no standing to bring this foreclosure suit. The Plaintiff having no standing, the Court has no jurisdiction, and its judgment is void. The Court’s void judgment must be set aside and Plaintiff’s Complaint dismissed with prejudice.

Respectfully submitted,

______

Ben Carter

Legal Aid Society

416 West Muhammad Ali Blvd.

Suite 300

Louisville, KY 40202

(502) 614-3134

Fax: (502) 614-3734

CERTIFICATE OF SERVICE

The undersigned hereby certifies that a copy of the Reply was mailed, postage prepaid to the following parties this 13rd day of February, 2010:

Bryan Schaefer

David Boyce

Nielson & Sherry

639 Washington Ave.

Newport, KY 41071

______

Ben Carter

WHEREAS, this matter having come before the Court upon motion of counsel for Defendant to vacate its December 14, 2009 entry of judgment in favor of the Plaintiff and the Court being otherwise sufficiently advised,

IT IS HEREBY ORDERED that the Court’s December 14, 2009 Order granting judgment in favor of the Plaintiff is SET ASIDE as void for lack of jurisdiction. Plaintiff’s Complaint is DISMISSED WITH PREJUDICE.

______

DATE JUDGE MCCAY CHAUVIN

JEFFERSON CIRCUIT COURT

DIVISION EIGHT

[1] “Standing to bring an action requires a personal interest, often referred to as a “substantial” interest in the subject matter of the litigation…” Porter v. Shelbyville Cemetary Co. (Ky.App. 2009).

[2] “In order to invoke thejurisdictionof the court to enforce a claim, the plaintiffs must show that they havestandingto do so.” Porter v. Shelbyville Cemetary Co. (Ky. App. 2009).

[3] Slone v. Stone, 249 S.W.2d 42 (Ky. 1952). The Kentucky Supreme Court, in deciding whether to honor a custody dispute resolved in West Virginia, looked to the West Virigina court’s jurisdiction over the subject matter and parties to the suit. In affirming the judgment, the Court noted, “We do not find the lack of jurisdiction which would void the judgment.”

[4] Attached as Exhibit A.

[5] Attached as Exhibit B.

[6] This Pooling and Servicing Agreement is available online at http://www.sec.gov/Archives/edgar/data/1383499/000091412107000189/gs6577222-ex4.txt

[7] “Closing Date” and “Start-up Date” are defined in the Pooling and Servicing Agreement, Article I “Definitions” and “Start-up Date,” gains additional definition in §2.05.

[8] http://en.wikipedia.org/wiki/LaSalle_Bank

[9] Section 12.03 states, “THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.” The document governing the Plaintiff trustee dictates that the trustee’s actions must be judged by New York law. That is, the effect of an attempted transfer of a mortgage loan into the trust pool after the startup date (in this case December 27, 2006) must be judged by New York law.