Petition for Writ of Certiorari — Christopher E. Larson, et ux., Petitioners v. Snohomish County, Washington, et al.
Supreme Court briefSep 6, 2022
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No. ___________
___________________________________________________________
In the
SUPREME COURT OF
THE UNITED STATES
CHRISTOPHER and ANGELA LARSON,
v.
Petitioners
SNOHOMISH COUNTY, et al.,
Respondents
On Petition for a Writ of Certiorari from
Washington Supreme Court
Case No. 100619-5
___________________________________________________________
PETITION FOR WRIT OF CERTIORARI
Scott E. Stafne, Counsel of Record
STAFNE LAW Advocacy & Consulting
239 N. Olympic Avenue
Arlington, WA 98223
360.403.8700
scott@stafnelaw.com
i
QUESTIONS PRESENTED
1.
Whether judges in Washington State must specifically address the judicial partiality claims actually asserted by the parties against judicial officers
and court staff in order to adjudicate whether such
claims are properly asserted pursuant to that Due
Process of law standard mandated by the Fourteenth
Amendment?
2.
Whether Washington State judges and judicial
officers are required to inform themselves about their
financial circumstances and disclose those circumstances to the parties when ruling on disqualification
challenges premised on the Fourteenth Amendment?
3.
Whether Washington State judges and judicial
officers must pursuant to the Fourteenth Amendment apply an objective standard to judicial neutrality challenges that requires recusal from a case when
the likelihood of bias on the part of the judge “is too
high to be constitutionally tolerable?”
ii
PARTIES TO THE PROCEEDINGS AND
RULE 29.6 DISCLOSURE STATEMENT
The Petitioners here, Christopher E. Larson
and his wife Angela Larson, were the plaintiffs in Larson v. Snohomish County, et al. The public defendants
they sued in this case are Snohomish County, a municipal subdivision of the State of Washington and
several of its officials including the Snohomish
County Auditor and Registrar, the Snohomish County
Superior Court Clerk, the Snohomish County Examiner of Titles and Legal Advisor to the Registrar, and
all of the Snohomish County Superior Court Judges.
Additional public defendants the Larsons sued in this
case included the State of Washington and its Governor and Attorney General. The private defendants in
this case included: Successors in interest and assigns
to New Century Mortgage Company, Mortgage Electronic Registrations Systems, Inc. (MERS), Deutsche
Bank National Trust Company in its own capacity,
Deutsche Bank National Trust Company as trustee
for Morgan Stanley ABS Capital 1 Inc. Trust 2007HE2 Mortgage Pass Through Certificates, Series
2007, Morgan Stanley ABS Capital I Inc. Trust 2007HE2 as the trust itself, Quality Loan Service Corporation of Washington (a Washington corporation purporting to act as the trustee for Deutsche Bank, the
purported beneficiary of the deed of trust (QLS), Select Portfolio Servicing, Inc. (a Utah corporation acting as the servicer for Deutsche Bank), and Mortgage
Electronic Recording System (a Delaware corporation
which claimed to be the beneficiary of the original
lender, i.e. the purported original lender which went
iii
bankrupt shortly after the deed of trust agreement
was executed.)
The Petitioners here were also the applicants
in the Torrens Title Application proceedings, i.e.
Christopher Larson v. New Century Mortgage Company. A copy of the Snohomish County Superior
Court’s order dismissing the Larsons’ Torrens Application is not reported, but a copy of it is reproduced at
Pet. App. pp.91a-93a. A copy of Judge Okrent’s order
denying the motion for his judicial disqualification is
not published, but is reproduced at Pet. App. pp.87a88a.
iv
RULE 29.6 DISCLOSURE STATEMENT
Christopher Larson and Angela Larson are
natural born persons, i.e. human beings. No corporate
or other entity has an ownership interest in either of
them. The Larsons have no knowledge as to the corporate or other structure of any of the public or private defendants.
v
RELATED PROCEEDINGS
There are no related proceedings. Washington’s
Torrens Land Title Registration Act was repealed as
of July 1, 2022.
vi
TABLE OF CONTENTS
QUESTIONS PRESENTED …………………………….i
PARTIES TO THE PROCEEDINGS …………………ii
RULE 29.6 DISCLOSURE STATEMENT …………..iv
RELATED PROCEEDINGS……………………………v
TABLE OF AUTHORITIES …………………………..vii
PETITION FOR A WRIT OF CERTIORARI ………...1
DECISIONS BELOW……………………………………1
JURISDICTION………………………………………….2
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED ……………………………..3
STATEMENT …………………………………………….3
REASONS FOR GRANTING THE PETITION ……24
CONCLUSION ………………………………………….32
vii
TABLE OF AUTHORITIES
Federal Cases
Aetna Life Ins. Co. v. Lavoie,
475 U.S. 813, 822 (1986)………….………………..16
Bracy v. Gramley,
520 U.S. 899 (1997)…………………………………16
Cain v. White,
937 F.3d 336 (5th Cir. 2019)………………………19
Caliste v. Cantrell,
937 F.3d 525 (5th Cir. 2019)………………………19
Caperton v. A.T. Massey Coal Co.,
556 U.S. 868, 876 (2009)…………………………..16
Deutsche Bank Nat’l Tr. Co. v. Williams,
No. 11-00632 JMS/RLP, 2012 U.S. Dist. LEXIS
43968 at *8 (D. Haw. Mar. 29, 2012)……………30
Gibson v. Berryhill,
411 U.S. 564, 578-79 (1973)…………………………..16
Greenlaw v. United States,
554 U.S. 237, 128 S. Ct. 2559 (2008) …………….31
Hymas v. Deutsche Bank Nat’l Tr. Co.,
No. 2:13-cv-1869-RCJ-GWF, 2013 U.S.
Dist. LEXIS 179164 (D. Nev. Dec. 16, 2013) …..29
In re Murchison,
349 U.S. 133, 136 (1955) …………………………..16
Rippo v. Baker,
137 S. Ct. 905 (2017) ………………………………16
Ross v. Deutsche Bank Nat’l Tr. Co.,
933 F. Supp. 2d 225, 230-32 (D. Mass. 2013) ….29
Tumey v. Ohio,
273 U.S. 510 (1927) ………………………………...16
United States v. Sineneng-Smith,
140 S. Ct. 1575, 1579 (2020) ………………………31
viii
Ward v. Monroeville,
409 U.S. 57 (1972)……………………………..16
Williams v. Pennsylvania,
136 S. Ct. 1899 (2016)……………………………..16
Constitutional and Statutory Provisions
Involved
Fourteenth Amendment……………………….3, 20, 23
Wash. Const. art IV……………………………………20
Federal Statutes
State Cases
Bain v. Metro. Mortg. Grp., Inc.,
175 Wn.2d 83, 285 P.3d 34 (2012)…...…………..20
Dilibero v. Mortg. Elec. Registration Sys.,
108 A.3d 1013 (R.I. 2015)………………………9, 29
Deutsche Bank Nat’l Tr. Co. v. Tanibajeva,
2015 NY Slip Op 07230, ¶ 1, 132 A.D.3d 430,
431, 17 N.Y.S.3d 399, 400-01
(App. Div. 2015) …………………………………..29
New Century Mortg. Corp. v. Braxton,
18 LCR 36 (Mass. Land Ct. 2010) ……………….30
Yvanova v. New Century Mortg. Corp.,
62 Cal. 4th 919, 199 Cal. Rptr. 3d 66, 365 P.3d
845 (2016) ………………………………………10, 30
State Statutes
Wash. Rev. Code § 2.12.06018
Wash. Rev. Code § 2.28.030….……………….3, 20, 23
Wash Rev. Code Chapter 43.33….…………………..14
Wash. Rev. Code Chapter 65.12………….…..3, 15, 18
Wash Rev. Code Chapter 61.24…………………..4, 23
Court Rules
Other
Hamilton, A.,
Federalist Paper No. 78 (1788)………….………. 31
ix
Madison, J.,
Federalist Paper No. 51 (February 8, 1788)…..24
Washington State Civil Legal Needs Study Update
(2015)……………………………………………………24
1
PETITION FOR WRIT OF CERTIORARI
Christopher Larson and his wife Angela Larson, Appellants below, petition for a writ of certiorari
to review the judgment of the Court of Appeals in Larson v. Snohomish Cty., 20 Wn. App. 2d 243, 499 P.3d
957 (2021), which resolved two linked appeals: Christopher Larson et al., v. New Century Mortgage et al.,
and Larson v. Snohomish County, et al.
DECISIONS BELOW
The June 8, 2022 Orders of the Washington Supreme Court denying review of the judicial neutrality
issues raised in the proceedings below is not reported,
but is reproduced at Petition Appendix (Pet. App.) pp.
4a-7a.
The decision of Division One of the Court of Appeals for the State of Washington (Court of Appeals)
denying the Larsons’ challenges to judges adjudicating the underlying cases because the interests of
judges and other government workers in the outcome
of such foreclosure cases precludes them from doing
so is published at Larson v. Snohomish Cty., 20 Wn.
App. 2d 243, 499 P.3d 957 (2021). That published decision can be found at Pet. App. pp. 8a-64a.
The Order of the Superior Court of Skagit
County denying Larsons’ first judicial disqualification
motion and granting Snohomish County’s motion to
dismiss Snohomish County, its officials and superior
court judges from the Larsons’ lawsuit without prejudice in Larson v. Snohomish County, et. al. and transferring the venue of that case to the Snohomish
County Superior Court is not published, but is
2
reproduced at Pet. App. pp. 81a-83a. See also Pet.
App. 73a-74a (Minutes of Court Proceedings).
The judicially-generated documents evidencing
the disqualification of all Snohomish County Superior
Court Judges and Commissioners from adjudicating
Larson v. Snohomish County, et al., is not published,
but those documents are reproduced at Pet. App. pp.
84a-86a.
The Order of Skagit County Superior Court
Judge David Svaren now acting as a pro tempore
Snohomish County Superior Court Judge denying the
Larsons’ second challenge to his judicial neutrality in
Larson v. Snohomish County and granting private defendants’ motion for summary judgment is not published, but is reproduced at Pet. App. pp. 65a-68a.
The Order of Snohomish County Judge Richard
T. Okrent dismissing the Larsons’ Land Title Registration Application is not published, but is reproduced
at Pet. App. 91a-96a. The Order of Snohomish County
Superior Court Judge Okrent denying the Larsons’
disqualification motion is not published, but is reproduced at Pet. App. 87a-90a.
JURISDICTION
The Supreme Court of Washington denied discretionary review of the Washington Court of Appeals
decision affirming the Superior Court’s grant of summary judgment in favor of private defendants on June
8, 2022. See Pet. App. pp. 4a-7a. Accordingly, Larsons’
Petition for Certiorari is being timely filed within this
Court’s 90-day filing period and jurisdiction is being
invoked pursuant 28 U.S.C. § 2101(c).
3
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED
This case is based on Separation of Powers and
Due Process of Law principles which require the exercise of governmental judicial power to be performed
by adjudicators who are -- and appear to be -- neutral
as between the parties to a dispute. The text of Article
III, §§ 1 and 2, and the text of the Fourteenth Amendment underlying these judicial neutrality principles
are set forth in the Pet. App. at p. 120a. Additionally,
this case is based on Revised Code of Washington
2.28.030(2) which established these same judicial
neutrality principles as the law of Washington State
in 1891. That statute is reproduced at Pet. App. p.
121a. Selected provisions of the Torrens Land Title
Registration Act, including those the Snohomish and
Skagit County Superior Court judges violated are reproduced at Pet. App. 122a-128a.
STATEMENT
Threatened with a nonjudicial foreclosure of
their home in 2018 by Quality Loan Service Corporation of Washington (QLC) on behalf of Deutsche Bank
purportedly acting as a trustee of a 2007 Morgan
Stanley Trust seeking to enforce a deed of trust purportedly assigned to it by a New Century lender
(which had long been bankrupt), Petitioner Larsons
filed a Torrens Title Application to register title to
their homestead property pursuant to Chapter 65.12
of the Revised Code of Washington with the
Snohomish County Superior Court on June 5,
2018. This judicial application was filed before QLS,
4
the trustee for the purported beneficiary, Deutsche
Bank, had sold their home.
When Snohomish County and its officials failed
to take those statutory steps necessary to process the
Larson’s title “registration” application, the Larsons
sued Snohomish County and several of its officials—
including Snohomish County Superior Court’s judges
and that county’s court clerk—for noncompliance with
their ministerial duties under that law before QLS
conducted a nonjudicial sale of their home pursuant to the Washington Deeds of Trust Act, Chapter
61.24 Revised Code of Washington. In their complaint, the Larsons alleged these government officials'
noncompliance with their duties under that statute
had prevented the Larsons from accessing Washington’s land registration process to register title to their
home in a way that it could not be stolen from them
by way of the title fraud, which they claimed was being used to steal this property from their family.
In their complaint, the Larsons alleged, among
other things, that New Century had engaged in criminal activities with regard to its subprime lending
business and that it had not funded many of the loans
that it had purportedly closed. Specifically, the Larsons contended New Century had never funded their
mortgage loan. Pertinent allegations of their complaint in this regard included allegations regarding
the demise of the New Century loan entities:
3.45 Loans had begun to slow in the second half of 2006, when New Century
Mortgage Company purportedly funded
Plaintiffs’ loan. In the spring of 2007,
New Century went into a "death spiral".
On March 8, 2007 New Century
5
announced it would stop accepting loan
applications. Four days later trading of
its stock on the NYSE was halted.
3.46 On March 2, 2007, New Century
announced it was the subject of two criminal probes by the federal government,
and that it's auditor KPMG had worries
about the company's ability to stay solvent. Over the subsequent week, the
company lost 78% of its stock value.
3.47 In early March 2007 New Century
reported that it had failed to meet financial requirements of its lenders.
3.48 On March 13, 2007, New Century
Financial Corporation reported in a regulatory filing that it had received a grand
jury subpoena from the U.S. Attorney's
Office for the Central District of California as well as a letter from the Securities
and Exchange Commission notifying the
company of a preliminary investigation.
The filing stated that the U.S. Attorney's
office indicated in a letter dated February 28, 2007 that it was conducting a
criminal inquiry in connection with trading in the company's securities as well as
accounting errors regarding the company's allowance for repurchase losses. The
filing further stated that the Securities
and Exchange Commission requested a
meeting with the company to discuss the
6
company's previous announcement that
it would restate certain financial statements.
3.49 On March 20, 2007, New Century
Financial Corporation said that it could
no longer sell mortgage loans to Fannie
Mae or act as the primary servicer of
mortgage loans for the government sponsored enterprise. In a filing with the Securities and Exchange Commission, New
Century Financial Corporation said that
Fannie Mae terminated "for cause" a
mortgage selling and servicing contract
with it citing alleged breaches of that
contract and others.
3.50 Also in March, 2007 New Century
Financial Corporation received cease
and desist orders from several states, including Washington. On March 16, 2007
New Century Mortgage Company and
other related entities signed an agreed
order with the Washington State
Department of Financial Institutions
(DFI), which agreed that DFI:
has authority pursuant to RCW
31.04.093(5) to issue an order directing
Respondents to:
1. Cease and desist from conducting
business in a manner that is injurious
to the public,
7
2. Take such affirmative action as is
necessary to comply with the [Washington Consumer Loan] Act, and
3. Make restitution to any borrower or
other person who is damaged as a result of the violation of the Act.
Statement of Fact. It is AGREED that
this Order is based on the following stipulated facts:
1. New Century Mortgage Corp. is a subsidiary of New Century Financial Corporation …. It is licensed in Washington as
a consumer loan company under license
no. 17969.
*
*
*
5. New Century Financial Corporation
does not have sufficient warehouse lines
of credit to fund loans that Respondents
closed or intended to close with Washington Consumers.
6. The stock of New Century Financial
Corporation has dropped considerably
and all trading of the stock has been
suspended by the New York Stock Exchange.
7. Respondents presently have closed
and unfunded loans outstanding for
Washington Consumers.
The Larsons also alleged in their initial complaint filed in Larson v. Snohomish County et al. that
defendant MERS did not have the authority to assign
New Century’s beneficiary status under Larson’s
Deed of Trust to Deutsche Bank or anyone else. In this
regard, their complaint alleged that their lender, New
8
Century, had filed for bankruptcy and terminated its
agency relationship with MERS. Specifically, the Larsons’ complaint alleged in this regard:
3.52 On April 2, 2007, New Century Financial Corporation and its related entities (including New Century Mortgage
Company) filed voluntary petitions for
relief under Chapter 11 of the United
States Bankruptcy Code in the United
States Bankruptcy Court, District of
Delaware located in Wilmington, Delaware.
3.53 On April 27, 2007 the bankruptcy
court issued an Order titled: “ORDER
PURSUANT TO SECTIONS 356 AND
554 OF THE THE BANKRUPTCY
CODE (A) AUTHORIZING AND
APPROVING THE REJECTION OF
CERTAIN
LEASES
OF
NONRESIDENTIAL REAL PROPERTY
AND
(B)
AUTHORIZING
AND
APPROVING PROCEDURES FOR THE
REJECTION
OF
EXECUTORY
CONTRACTS
AND
UNEXPIRED
LEASES OF PERSONAL AND NONRESIDENTIAL REAL PROPERTY.”
3.54 In October 2007 MERS, in violation of the fiduciary duty it owed to New
Century Mortgage Company as its nominee and agent, began a non-judicial
foreclosure of Plaintiffs home. This nonjudicial foreclosure was void ab initio because MERS had no authority to act as
the “beneficiary” for the actual lender,
9
which was bankrupt and obliged to follow federal bankruptcy law. Further,
MERS had no authority to act as the
“beneficiary” because it never held the
note and pursuant to express language
in the deed of trust only held legal title
in the deed of trust security agreement.
3.55 On March 19, 2008 the debtor
filed a notice of rejection of its executory
contract with MERS.
3.56 On April 6, 2008, New Century Financial and its subsidiaries, including
New Century Mortgage, filed notice of an
agreement establishing the New Century Liquidating Trust (the "Liquidating
Trust") with the Bankruptcy Court.
3.57 On July 15, 2008 the Bankruptcy
Court confirmed the liquidation plan of
New Century Financial and its subsidiaries, including subsidiary New Century
Mortgage Company. Pursuant to the
plan, all assets of the debtors vested in
the Liquidating Trust effective July 15,
2008. The plan also excluded the debtors
(including New Century Mortgage Company) from any further interest in the
assets or the trust subsequent to the liquidation.
3.58 Because New Century's MERS
membership was terminated, MERS was
prohibited from continuing to act as its
nominee or agent. Accordingly, MERS
lacked the authority to assign the deed
of trust to Defendant Deutsche Bank
10
National Trust Company in the 2010 recorded document. On information and belief this false assignment would likely
not be registered under an operational
Torrens System.
3.59 When New Century filed its rejection of the executory contract with
MERS, the contract was breached and
New Century’s relationship with MERS
was terminated. Thus, the subsequent
assignment of the deed of trust executed
by MERS was void ab initio because the
assignor, MERS, had nothing to assign.
3.60 This analysis of MERS lack of authority to assign New Century liens after
March 19, 2008 has prevailed in several
courts and should prevail before the Title Examiner, who will be required to review and analyze all those documents
related to the bankruptcy proceedings
and securitizations in order to determine
whether MERS had the authority to assign anything to Deutsche Bank as trustee or otherwise. See e.g. Yvanova v. New
Century Mortg. Corp., 62 Cal. 4th 919,
199 Cal. Rptr. 3d 66, 365 P.3d 845
(2016); Dilibero v. Mortg. Elec. Registration Sys., 108 A.3d 1013, 1016-17 (R.I.
2015); Cf. Ross v. Deutsche Bank Nat'l
Tr. Co., 933 F. Supp. 2d 225, 228-29 (D.
Mass. 2013).(“The Court thus concludes
that the Rosses have pleaded a plausible
claim that the Mortgage and the Note
were part of the bankruptcy estate
11
conveyed to the Liquidating Trust under
the confirmation plan.” Id. at 232.)
When the Larsons began preparation of their
complaint in Larson v. Snohomish County, they suspected that many counties in Washington State were
not complying with the Torrens Land Title Registration Act. Therefore, the Larsons included a prayer for
relief in their Complaint in that case which was filed
with the Skagit County Superior Court in hopes of obtaining a neutral judge, which requested:
recusal of all superior court judges in
any county which has failed to comply
with the provisions of the Torrens Act
and/or whom are in a similar position to
these Snohomish County judicial defendants with regards to the issues being
raised in this litigation; i.e.,superior
court judges whose acts and omissions
have prevented landowners within their
respective county from availing themselves of the protections afforded persons
with interests in land by the public and
transparent land registration system established by the Torrens Act.
When the Larsons confirmed that Skagit
County, like Snohomish County did not have an operating land registration system—and the Skagit
County Judges were not complying with Washington’s
Torrens statute in the same way as the Snohomish
County Judges -- the Larsons filed an affidavit of prejudice which asserted that disqualification of Skagit
County Judges was required because the Skagit
12
County judges would be interested in how this case
was resolved as to other judges all of whom were engaging in the same arguably illegal conduct.
Before ruling favorably on dispositive motions
filed by Snohomish County and the State of Washington against the Larsons, Skagit County Superior
Court Judge David Svaren acknowledged the Larsons’
disqualification motion but ruled that he would not
disqualify himself. In this regard, Judge Svaren did
not address the Larsons’ challenge that Skagit
County judges were violating the Torrens Act in the
same way as Snohomish County judges were and
thereby preventing land owners in both counties from
“registering” their land titles.
After denying the Larsons’ disqualification
challenge against him, Judge Svaren then dismissed
Snohomish County, its officials and judges, and
Washington State, and its officials, as defendants
from the Larsons’ lawsuit without prejudice. Judge
Svaren then granted Snohomish County’s motion to
transfer the venue back to Snohomish County Superior Court, notwithstanding that all of its superior
court judges were named personally as defendants in
the Larsons’ lawsuit against Snohomish County.
Pleadings filed with the Clerk of the Skagit
County Superior Court which were required to be
transferred to the Snohomish County Superior Court
as a result of the venue transfer were lost in the transfer process. The Larsons question whether the loss of
these documents by the Defendant Clerk of Court was
intentional and assert that defendant Snohomish
County Superior Court Clerk’s failure to file several
other documents later in the case supports this contention.
13
After the Snohomish County case was transferred by Judge Svaren to the Snohomish County
Court, Defendants Deutsche Bank (purportedly as
trustee for the 2007 Morgan Stanley Trust which
claimed to own Larsons’ Deed of Trust), SPS (the servicer), and MERS (the entity which purportedly assigned the Deed of Trust to Deutsche Bank) moved for
summary judgment. Before that dispositive motion
could be heard, however, the Presiding Judge of the
Snohomish County Superior Court issued an Order
disqualifying all judicial officers in the Snohomish
County Superior Court (both judges and commissioners) from adjudicating the Larsons’ case against the
remaining defendants, which included QLS, Deutsche
Bank, MERS, and Select Portfolio Servicing. Pet. App.
pp. 84a-86a
As part of that same judicial disqualification
process, the Presiding Judge of the Snohomish
County Superior Court appointed Skagit County Superior Court Judge Svaren (the same judge as had
been adjudicating this case in the Skagit County
Court) to act as a judge pro tempore in the Snohomish
County Superior Court for purposes of completing the
adjudication. Id. The Presiding Judge apparently
made this appointment without considering that
Judge Svaren and the entire Skagit County Superior
Court bench, like the Snohomish County Superior
Court bench, were all violating the Torrens Act in precisely the same way as were the Snohomish County
Superior Court judges, thus allowing Judge Svaren to
exonerate his own improper conduct by siding with
his fellow judges in Snohomish County.
Following Judge Svaren’s appointment as a pro
tempore judge by the Snohomish County Presiding
14
Judge, the Larsons asserted two additional grounds
for Judge Svaren’s recusal as the newly appointed pro
tempore judge. First, the Larsons argued Judge
Svaren should be recused because of his personal interest in deciding the case against the Snohomish
County judges in such a way as to not convict himself
and his other Skagit County judges of violations of
their own same ministerial duties.
Secondly, the Larsons challenged that changes
in Washington law occurring in or around 2006-07
(just before the subprime mortgage crash blossomed
in full bloom for everyone to see) were designed to incentivize judicial decision-making in favor of enforcing mortgage-backed securities by way of easy-toobtain foreclosures, which are not consistent with
weighing the equities between the parties in cases
such as this one.
The Larsons claimed the political branches
purposely created this incentive for judicial decisionmaking in favor of money lenders and debt buyers by
enacting a law which pooled the retirement funds of
all Washington’s state and municipal public officials
(including judges) into common profit-based investment funds managed by the Washington State Investment Board (WSIB). The WSIB is an agency of the
Executive Branch of Washington State. See Revised
Code of Washington Ch. 43.33 RCW.
The Larsons challenged that the political
branches of Washington’s state government had enacted these laws to incentivize judges to decide obviously upcoming legal issues involving mortgagebacked securities in favor of their fellow government
employees, banks, and debt buyers by giving judges
the same economic stake these entities had in
15
determining how these issues were decided. Further,
the Larsons demonstrated that WSIB was using State
Street Bank, one of the first of the big bank entities to
admit to selling low-value subprime mortgages and
mortgage-backed securities to investors by falsifying
their value so that it could make a profit on these investments as its investment partner. In this regard,
the Larsons request that this Court take judicial notice of SEC’s February 11, 2012, Cease and Desist Order to establish the nature and extent of State Street
Bank’s admitted wrongdoing. This Order is accessible
on the SEC’s government website.1
After Judge Svaren granted the private defendants’ Motion for Summary Judgment, Judge
Svaren turned briefly to the Larsons’ second recusal
challenges to his acting as a pro tempore judge. Once
again Judge Pro Tempore Svaren ignored the Larsons’ challenges that his undisputed interests in this
case was too high to be constitutionally tolerable because (1) he and the other Skagit County Superior
Court judges had not complied with the ministerial
duties imposed on them by Revised Code of Washington provisions 65.12.050, 65.12.055, 65.12.090 and
therefore had failed to comply with this law in precisely the same way as had the Snohomish County
Judges; and (2) he refused to consider whether the
economic interest he and other Washington State
judges and judicial officers and employees were given
by law in mortgage and mortgage-backed securities
investments was too high to be constitutionally tolerable.
_______________
1 Accessible
9107.pdf
at: https://www.sec.gov/litigation/admin/2010/33-
16
Here’s precisely what Judge Svaren said when
he refused to consider the Larson’ challenges to his
neutrality in acting as a judge in this matter:
THE COURT: . . . Bottom line, motions
for summary judgment are granted. * * *
I haven’t addressed in my oral comments
the request that was brought to have me
disqualify myself. That request is denied. I don’t have a dog in this fight.
But it is Larsons’ position that Judge Svaren
did have a “dog” in this fight because he benefits economically when mortgage-backed securities can be
foreclosed upon without any meaningful consideration of the equities in doing so. The Larsons contend
that this Court’s precedent establishes that the
United States Constitution requires that judicial
power be exercised by judges who do not have a personal stake in the outcome of litigation. See e.g., Rippo
v. Baker, 137 S. Ct. 905 (2017); Williams v. Pennsylvania, 136 S. Ct. 1899 (2016); Caperton v. A.T. Massey
Coal Co., 556 U.S. 868, 876 (2009); Bracy v. Gramley,
520 U.S. 899 (1997); Aetna Life Ins. Co. v. Lavoie, 475
U.S. 813, 822 (1986); Gibson v. Berryhill, 411 U.S.
564, 578-79 (1973); Ward v. Monroeville, 409 U.S. 57
(1972); In re Murchison, 349 U.S. 133, 136 (1955); Tumey v. Ohio, 273 U.S. 510 (1927).
And the Larsons assert that it is especially essential that judges in these United States directly address challenges that parties assert regarding judges’
neutrality in cases like this one where there is evidence in the record which demonstrates (1) the judges
17
being challenged have a personal stake in resolving
questions about their conduct in a way which exonerates judges; (2) the judges and other government
workers benefit economically from judicial decisionmaking favoring one of the parties; and (3) the judicial
branch of government, through its judges and court
staff, have rigged the outcome of judicial decisionmaking by unfairly manipulating the evidence judges
are allowed to consider.
With regard to this last point, the Larsons argued to the Washington Supreme Court in their Petition for Discretionary Review:
But it is the Court of Appeals’
judges, not Larsons, who appear to
have their facts wrong. The Larsons set
forth facts and arguments with regard
to the judicial neutrality issues they
advanced in so many pleadings it is difficult to believe the Panel could have
overlooked them. Those pleadings submitted directly to the Court of Appeals
in this regard include without limitation: App. 82-84 (Motion to Reconsider); 132-138; 140-144; 186-189; - p. 4
of 9.6.
*
*
*
The Larsons produced evidence
(some of it coming directly from
Skagit County) which demonstrated
that Skagit County Judges (which included Judge Svaren) had not complied with their responsibilities under
18
Chapter 65.12 RCW in exactly the
same way Snohomish County Judges
had ignored their duties. See CP
3468–522, and specifically the correspondence from Skagit County to Anderson at CP 3479 (Skagit County
Clerk stating: “I spoke with the
Skagit County Auditor, Jeanne
Youngquist about this matter. The
Torrens Act was used in this County
in the 1800’s and early 1900’s to register lands. The Auditor’s office does
not have any records on site regarding the Land Registration Docket. . . .
Currently the process entitles the recording of a Deed for lands.” (Emphasis Supplied). See also email at
3522.
Certainly, the Court of Appeals
judges (as well as all of this State’s
superior court judges) knew or should
have known that Washington's political branches changed judges’ retirement benefits from being guaranteed
by the State (i.e. benefits which were
paid to judges regardless of the consequences of their judicial decisionmaking) to being paid from the pooled
retirement investments of all government workers being managed by
WSIB, an Executive Branch agency
in 2006, and if that didn’t work, then
directly from the taxpayers. See RCW
2.12.060.
19
And the Larsons did present evidence that WSIB, the entity that was
managing Washington judges’ retirement funds, was partnered up with
State Street Corporation, an entity
WSIB identified as its agent and
counterparty for securities lending
transactions. CP 1033. The Larsons
also submitted evidence demonstrating that while State Street was helping WSIB manage judges’ retirement
accounts the Securities and Exchange
Commission issued a Cease and Desist Order against it in 2010 which
charged that in 2007 State Street was
misleading some investors about the
value of the mortgage-backed securities it was selling them. CP 272–75.
The Larsons complained that
WSIB’s maintenance of a relationship
with State Street after 2010 was “not
consistent with administering a trust
fund for judges who were . . . tasked
with adjudicating the legal consequences of these same type of bank
frauds.” CP 274.13 Further, the Larsons alleged this forced alliance between government workers, judges,
money lenders and debt buyers imposed by state law created federal
Due Process problems, citing Cain v.
White, 937 F.3d 336 (5th Cir. 2019)
and Caliste v. Cantrell, 937 F.3d 525
(5th Cir. 2019).
20
Although the Court of Appeals
judges claim otherwise, it is patently
obvious that the law applicable to
mortgage-backed
securities
and
MERS’ private registration alternative to Washington’s Torrens title
public registration system was not
settled in 2006 at the time these
changes were made lumping judges’
interests in these type of investments
with those of other government workers. See e.g., Bain v. Metro. Mortg.
Grp., Inc., 175 Wn.2d 83, 285 P.3d 34
(2012).
Reasonable people, who are not
economically interested in these retirement funds, understand that if
judges had decided against the enforceability of these types of subprime
mortgages and mortgage-backed securities through foreclosures after
2007 the value of judges’ and other
government workers’ retirement accounts would have declined appreciably. And this is the type of pecuniary
interest which must be evaluated to
determine whether the Fourteenth
Amendment, Wash. Const. art IV,
and RCW 2.28.030 require recusal.
Additional evidence of partiality
by these judicial officers/judges and
the Snohomish County and Skagit
County courts in the record includes:
21
a) Both Snohomish and Skagit
County officials (including all of their
superior court judges and specifically
including Judges Svaren and Okrent)
failed to perform those statutory duties required of them to set up title
registration systems in their counties. And the Court of Appeals outright admits this in its decisions:
“And by the time Judge Okrent dismissed the Larsons' Torrens Act petition, the county had rectified the
procedural issues the Larsons had
raised in their Skagit County lawsuit.”
b) The record before the Court of
Appeals contains evidence of partiality by the Snohomish County Court
Clerk. As is stated above the retirement funds of the Clerk and her staff
(who are government workers) are
also invested in mortgages and mortgage-backed securities, the value of
which has been mostly determined by
judicial decision-making occurring after 2007.
c) The most serious misconduct
brought directly to the Court of Appeals attention was the Clerk’s apparent manipulation of the court
record, including the failure to file a
declaration offered by a Washington
State official in opposition to private
Defendants’ Motion for Summary
22
Judgment. See supra. Other misconduct included making false statements in the Clerk’s certification of
records from the Skagit County Court
to the Snohomish County Court. See
e.g., App. 114-5, 166-171.
d) Still more evidence of misconduct by Judge Svaren, the Snohomish
County Clerk, Deutsche Bank, and
MERS is that following the Larsons’
Motion to Reconsider the Summary
Judgment Order for not identifying
the evidence the Court relied upon,
compare CP 4–9 with 29–32, Judge
Svaren signed an Order prepared by
Deutsche Bank and MERS which
failed to reference virtually any of the
evidence the Larsons filed with the
Snohomish County Superior Court
Clerk in the Snohomish County Case
in opposition to the summary judgment. See e.g., McDermott declaration at CP 989–1171, which included
exhibits documenting WSIB’s investments relating to public workers’ (including judges’), retirement accounts
had invested in mortgages and mortgage-backed securities,14 which was
not considered by Judge Svaren. CP
31. See also Stafne Declaration in Opposition to Summary Judgment
which Judge Svaren indicates at CP
39 was not considered, notwithstanding the Order prepared by Deutsche
23
Bank and MERS and signed by Judge
Svaren provides no basis for excluding this declaration, which included
11 exhibits, including Exhibit 2, public and historical documents, which
the Clerk failed to include as part of
the record CP 1443–1444, ¶ 3; Exhibit
3, various iterations of Washington’s
Deeds of Trust Act, Chapter 61.24
RCW, those parts of this exhibit
which clerk filed appear at 2001–
2239; Exhibit 4 depositions of Michael Maynes, at CP 1417–1429,
1917– 29, the Honorable Judge
Monty J. Cobb, at CP 2457–94; Richard Beresford, at 2510-33; and the
three depositions of Jeffrey Stenman,
at CP 2242–67, 2272–368, and 2373–
448; Exhibit 5, New Century Consent
decree at CP 2534– 2540; Exhibit 6,
New Century Bankruptcy documents
at CP 2541–2551; and etc., i.e. Exhibits 7–11, at CP 2552–2596.15
The Larsons assert that this type of misconduct by the Court through its judges and
staff, which prevented the Larsons from presenting their case based on a record capable
of appellate review because of misconduct, is
not consistent with the legitimate exercise of
judicial power under Wash. Const art. IV or
Due Process under the Fourteenth Amendment or the mandates of RCW 2.28.030.
24
REASONS FOR GRANTING THE PETITION
This Nation’s founders agreed that “Justice is
the end of government. It is the end of civil society. It
ever has been and ever will be pursued until it be obtained, or until liberty be lost in the pursuit.” James
Madison, Federalist Paper No. 51 (February 8, 1788).2
Nonetheless, Washington’s Supreme Court has
long acknowledged that it appears justice is not available from Washington courts for “low income” litigants because of their inability to adequately present
their cases to judges in Washington’s courts. See e.g.,
2015 Washington State Civil Legal Needs Study Update, p. 3.3 Indeed, the Executive summary of the
Washington State Civil Legal Needs Study Update
published by the Washington State Supreme Court in
October 2015 begins with this very acknowledgment:
“Justice is absent for low-income Washingtonians who
frequently experience serious legal problems.” 4
The Larsons assert that the truth is much
darker than this. They claim that justice is not available for most of the middle-class litigating home foreclosures in Washington State, including persons like
them who own their homes, because Washington’s political branches economically incentivized judges and
_____________
2 Accessible at:
https://www.congress.gov/resources/display/content/The+Federalist+Papers#TheFederalistPapers-51
3 Accessible at: https://ocla.wa.gov/wp-content/uploads/2015/10/CivilLegalNeedsStudy_October2015_V21_Final10_14_15.pdf
4 Accessible at: https://ocla.wa.gov/wp-content/uploads/2015/10/CivilLegalNeedsStudy_October2015_V21_Final10_14_15.pdf
25
court staff to decide foreclosure cases in ways which
promote the best economic interests of Washington’s
three branches of government (and those persons who
presently occupy positions within those branches of
government). Washington State’s political branches
intentionally compromised the integrity of that
State’s judicial branch by forcing judges’ retirement
benefits to be based on the success of WSIB’s investments. This incentivized Washington judges to allow
quick and easy foreclosure of mortgages because of
WSIB’s heavy investments in mortgage-backed securities, the value of which depends on the enforceability of mortgages generally. And the Larsons further
assert that Washington’s government -- or at least
those people who have operated that government
since 2006 -- made a calculated (and unlawful decision) to align its three branches of government (including the judicial branch) with banks and debt
collectors so as to allow quick and easy foreclosures
which made the government’s investments in mortgage-backed securities extremely profitable.
Washington courts and judges are of no help in
the Peoples’ longstanding battle against corrupt foreclosures because these judicial institutions and the
people who operate them have been compromised by
Washington’s other branches of government in such a
way so as to assure that foreclosures almost always
occur no matter what the equitable circumstances.
Such conduct, of course, demeans the integrity of
Washington’s judicial branch of government to the
point where its courts and judges no longer even resemble those institutions which have historically exercised judicial power in civilized societies.
26
What reason other than bias could Snohomish
County judges and court staff have for intentionally
manipulating the summary judgment record in this
case? And there is no doubt that such irregularities
are present in the court record of this case. For example, the Larsons’ opposition to the private defendants’
motion for summary judgment stated:
EVIDENCE RELIED UPON:
In opposing the private defendants’ motion for summary judgment the
Larson family relies upon the declarations of Christopher Larson, Angela Larson, Joseph M. Vincent, Donovan
McDermott, Micah Anderson, and Scott
E. Stafne. The Larsons also rely on such
evidence as they request be judicially noticed. The Larsons also rely on the declarations of Mike Maynes, Jeffrey Courser
(attorney), and Robert William McDonald as well as all the pleadings and material filed in these proceedings and the
Larsons’ Torrens application proceedings. Additionally, the Larsons rely on
their responses to discovery and the deposition of the Honorable Judge Monty
Cobb, Richard Beresford, Mr. Maynes,
and three depositions of Jeffrey Stenman.
When Pro Tempore Judge Svaren first granted
summary judgment in favor of the private defendants
and against the Larsons, Judge Svaren failed to identify the evidence he relied upon in doing so. See Pet.
27
App., pp. 69a-70a. When the Larsons filed a motion
for reconsideration based on this failure to support his
judgment, the Private Defendants submitted an
amended version of their original order for Judge
Svaren to sign; which, of course, the judge did. A copy
of this Amended Order can be found at Pet. App. pp.
65a-68a.
That Order reveals that Judge Svaren failed to
consider most of the evidence the Larsons submitted
in opposition to private defendants’ motion for summary judgment, including but not limited to (1) the
declarations of Joseph Vincent (general counsel for
Washington’s Department of Financial Institutions
testifying about facts related to New Century’s failure
to fund loans which had closed in Washington State),
Donovan McDermott (testifying about WSIB’s public
records), Scott E. Stafne (attorney) in support of the
Larsons’ Response to private defendants’ motion for
summary judgment, and the declaration of Mike
Maynes; (2) Those documents the Larsons requested
be judicially noticed; (3) the Larsons’ responses to discovery; and (4) the depositions of the Honorable Judge
Monty Cobb, Richard Beresford, Mr. Maynes, and the
three depositions of Mr. Jeffrey Stenman (the president of QLS).
Private defendants did not object to most of this
evidence so Pro Tempore Judge Svaren should have
considered this evidence before granting private defendants’ motion for summary judgment. But private
defendants’ lawyers carefully avoided having to deal
with that evidence on appeal by just deceptively getting Pro Tempore Judge Svaren to sign off on the fact
that he did not consider it. The Larsons assert Pro
Tempore Judge Svaren and the private defendants’
28
attorneys’ collaboration in this regard, i.e. to establish
the Larsons’ proffered evidence was not considered
during the summary judgment process notwithstanding that it was not objected to, supports the Larsons’
claim of judicial bias in favor of the Deutsche Bank,
MERS, SPS, and Snohomish County, its officials and
judges and against the Larsons in this case.
The Larsons also assert that the declaration of
Joseph Vincent, a government official, which was left
with the Snohomish County Clerk’s Office for filing
but apparently not filed in the court record supports
their assertion that the Snohomish County court staff
have also been compromised by Washington State’s
alliance with money lenders and debt buyers and
their well-paid lawyers. Vincent’s declaration can be
found at Pet. App. pp. 97a-119a.
This assertion of improper conduct by the
Snohomish County Superior Court Clerk, who was a
named defendant in the Larson v. Snohomish County
et al., is further supported by the clerks’ false statements made with regard to the transfer of the court
record from the Skagit County Superior Court to the
Snohomish County Superior Court. Furthermore, it is
revealed by the way in which the Skagit Superior
Court record in this case was handled by the
Snohomish County Superior Court which treated all
the Skagit County filings as a single docket entry.
This, of course, made appellate review of the Skagit
County Superior Court decisions very difficult, if such
a review of the Larsons’ arguments was actually undertaken at all.
To understand the Larsons’ concern that Washington courts purposefully avoided considering the
Larsons’ factual
and legal
arguments by
29
manipulating the evidence in the summary judgment
record all one has to do is look at the judicial decisions
in these cases and appeals. None of the judicial decisions obtained as part of the entire judicial process in
Washington State -- from the decisions of its lower superior courts to this State’s intermediate courts of appeal to the Washington Supreme Court -- ever
addressed the legal issue previously discussed herein
which asserted MERS had no authority to assign the
Larsons’ Deed of Trust to Deutsche Bank or anyone
else notwithstanding the Larsons cited ample authority supporting this legal position. See e.g., Dilibero v.
Mortg. Elec. Registration Sys., 108 A.3d 1013 (R.I.
2015)(specifically holding MERS could not foreclose
after its agency relationship with New Century lending entities was terminated in bankruptcy. Id. at
1017); Deutsche Bank Nat’l Tr. Co. v. Tanibajeva,
2015 NY Slip Op 07230, ¶ 1, 132 A.D.3d 430, 431, 17
N.Y.S.3d 399, 400-01 (App. Div. 2015)(“In light of the
fact that the purported assignment of the mortgage
note to plaintiff [Deutsche Bank National Trust Co.]
by defendant New Century Mortgage Corporation
took place after the effective date of New Century’s
bankruptcy plan, which terminated its officers and
placed all of its assets into a liquidating trust, the
Board established, as a matter of law, that plaintiff
[Deutsche Bank as trustee] does not have standing by
virtue of the alleged assignment.” Id. 17 N.Y.S. at 400;
; Ross v. Deutsche Bank Nat’l Tr. Co., 933 F. Supp. 2d
225, 230-32 (D. Mass. 2013)(holding plaintiffs have
plausible claim that assignment of mortgage was void
which precluded granting a 12(b) motion under the
Federal Rules of Civil Procedure); Hymas v. Deutsche
Bank Nat’l Tr. Co., No. 2:13-cv-1869-RCJ-GWF, 2013
30
U.S. Dist. LEXIS 179164 (D. Nev. Dec. 16, 2013)(holding Plaintiff states a cause of action for statutorily defective foreclosure Plaintiff where he has sufficiently
alleged that Wells Fargo Bank, N.A. as attorney-infact for New Century did not have the authority to execute an assignment of the deed of trust to Deutsche
Bank in November 2011 because New Century had
filed for bankruptcy and had reorganized into a new
entity on July 15, 2008. Further, holding Plaintiffs’
fraud claim based on the corporate assignment of the
deed of trust from New Century to Deutsche Bank
was plausible and could not be dismissed pursuant to
Rule 12(b).); Deutsche Bank Nat’l Tr. Co. v. Williams,
No. 11-00632 JMS/RLP, 2012 U.S. Dist. LEXIS 43968
at *8 (D. Haw. Mar. 29, 2012)(Dismissing foreclosure
claim by Deutsche Bank based on assignment of New
Century debt after 2008 based on lack of standing);
New Century Mortg. Corp. v. Braxton, 18 LCR 36
(Mass. Land Ct. 2010)(Delaware Land Court grants
summary judgment against New Century and its assignee for not demonstrating the assignment between
them was valid.) Cf., Yvanova v. New Century Mortg.
Corp., 62 Cal. 4th 919, 199 Cal. Rptr. 3d 66, 365 P.3d
845 (2016) (California Supreme Court reverses trial
court and court of appeals dismissal Stanley investment trust was void because: New Century’s assets
had previously, in 2008, been transferred to a bankruptcy trustee; and the Morgan Stanley investment
trust had closed to new loans in 2007. Id. at 62 Cal.
4th at 925.
The institutional and political legitimacy of
courts in our system of government is specifically
premised on the integrity of judges as neutral arbiters
of disputes between adverse parties. Because “judges
31
are as honest as other men, and not more so5” our
Founders made clear the People’s expectation that the
authority of the judicial branch of government depends not on the FORCE or WILL of judges, but on
the appropriateness of their judgments. See Alexander Hamilton, Federalist Paper No. 78 (1788)6. And it
was expected that those judgments of judges would be
available to the public for evaluation and rejection, if
necessary; as has occurred throughout this nation’s
history.
In this case, Washington courts have never issued a decision which reflects a resolution of the arguments made by the parties, particularly the
Larsons, to judicial officers in these specific cases and
appeals. This offends our Founders’ expectation
that judicial decisions by neutral judges resolving the
arguments the parties have made will be available for
public review as well as recent cases of this Court
which hold that the job of neutral judges is to adjudicate the competing contentions of the parties to cases.
See United States v. Sineneng-Smith, 140 S. Ct. 1575,
1579 (2020); Greenlaw v. United States, 554 U.S. 237,
128 S. Ct. 2559 (2008).
Our Founders intended to create a Republic in
which the rights of citizens as then historically established were protected. Among the oldest and best
known of the rights our Founders intended to protect
was litigants’ access to a judge who was neutral as between the parties to a case when exercising judicial
_____________
5 Letter from Thomas Jefferson to William Charles Jarvis, 28
September 1820, accessible at https://founders.archives.gov/documents/Jefferson/98-01-02-1540
6 Last accessed on March 31, 2021 at: https://guides.loc.gov/federalist-papers/text-71-80#s-lg-box-wrapper-25493470
32
power based on facts and law. Implementation of this
right must begin with judges carefully considering the
actual circumstances of the alleged bias, especially
where judicial proceedings are held in a “summary”
fashion.
CONCLUSION
The Larsons’ petition for writ of certiorari
should be granted.
DATED this 6th day of September 2022.
Respectfully submitted,
_____/s/ Scott E. Stafne____
SCOTT E. STAFNE, Counsel of Record
STAFNE LAW Advocacy & Consulting
239 North Olympic Avenue
Arlington, WA 98223
360.403.8700
scott@stafnelaw.com
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.