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Case 1:12-cv-00462-JL Document 18 Filed 02/13/13 Page 1 of 15



* * * * * * * * * * * * * * * * * * * JAMES LINTNER, et al., * Plaintiff, * * v. * * BANK OF NEW YORK, MELLON, * et al., * Defendant. * * * * * * * * * * * * * * * * * * * *

12-cv-462-JL January 29, 2013 10:20 a.m.

TRANSCRIPT OF MOTION HEARING BEFORE THE HONORABLE JOSEPH N. LAPLANTE Appearances: For the Plaintiff: David H. Bownes, Esq. Law Offices of David H. Bownes 486 Union Avenue Laconia, NH 03246 Joshua D. Shakun, Esq. Houser & Allison, APC 45 School Street, 3rd Floor Boston, MA 02108-3204 Alexander G. Henlin, Esq. Edwards Wildman Palmer, LLP 111 Huntington Avenue Boston, MA 02199 Diane M. Churas, LCR, CRR Official Court Reporter U.S. District Court 55 Pleasant Street Concord, NH 03301 (603) 225-1442

For the Defendant, Bank of NY, Mellon:

For the Defendant, Saxon Mortgage:

Court Reporter:

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2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE CLERK: BEFORE THE COURT The Court has before it for

consideration this morning a motion hearing in Civil Case 12-cv-462-JL, Lintner, et al. versus Bank of New York, Mellon, et al. THE COURT: All right. We're here in the

Lintner versus Bank of New York, Mellon and the mortgage servicing company. We've got a couple of motions. The other is a

One's a motion to remand to state court.

motion to dissolve the ex parte attachment on the house. Correct? MR. SHAKUN: THE COURT: pretrial conference. Yes. We also have a preliminary We can probably do that afterward

either here -- is that the Lintners back there? MR. BOWNES: Mary Embree is here. She's

chosen to sit back there. THE COURT: Mr. Lintner here? MR. BOWNES: THE COURT: Mr. Lintner is not here. Okay. We can probably do that That's right, Mary Embree. And is

though either here or just behind here in one of the conference rooms. But let's get down to this first. things first. First

I guess we'll start with the motion to

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3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 remand. Because I guess if I was inclined to remand

it -- and I'll be honest, I'm probably not, but I will hear you out. I probably ought to do that first before So let's talk about the

we deal with the attachment. remand first. Go ahead.


On the motion to remand, we had

noticed this up for the hearing on the ex parte motion to vacate, but I'm prepared to go forward on the motion to remand. THE COURT: Are you saying you didn't know

that we were going to -MR. BOWNES: I didn't anticipate that we'd be My apologies. But you're ready to

doing the motion to remand today. THE COURT: go; right? MR. BOWNES: THE COURT: MR. BOWNES: I'm sorry.

I'm ready to go. Let's pull the trigger. The basic thrust of the motion is

based upon the contract sales price reached by two parties dealing with the value of the property, and they reached a contract price of $62,000 with respect to this matter. The basis of the objection for the defendants

is simply relying on old appraisals at the time of the foreclosure sale, and before that, that had really -- I don't think they meet their burden with respect to

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4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 isn't it? MR. BOWNES: I think it's their burden if establishing the value of the property. If they had a

current appraisal, the way property prices were going -THE COURT: It's actually your burden though;

they're going to say -THE COURT: removed it. case, yeah. Oh, you're right, because they I forgot that it was a removed But

I'm sorry.

So you're right, it is their burden.

the value of the property is certainly more than $75,000. MR. BOWNES: But I know this. I don't know that that's true.

I think that defendants have some

problems, and I've asked -- I know that when I filed in Merrimack County Superior Court, there was a purchase and sale agreement for the property. THE COURT: MR. BOWNES: You mean another one. Yes, between the third party,

which is why I filed on an ex parte basis because the property was going to be sold and got the attachment. know that there's a purchase and sale agreement. I've I I

asked what the purchase and sale agreement price was. haven't been given the answer. interrogatories and admissions. I will ask in I think those are

drafted and probably ready to go by the end of the week.

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5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 P&S? MR. SHAKUN: price is $63,718. Yes, your Honor. The second P&S THE COURT: What is the price on the second

What we have learned through

submissions, what I've learned is that my client's assessment of market value is 75,000 as of September 27th of 2012. So that purchase and sale price

is not necessarily indicative of what the value of the property is. THE COURT: Sure. You're saying the value of

this property is only 75,000? MR. SHAKUN: That was their most recent

assessment as of September 2012. THE COURT: Wow, that makes his argument a lot

stronger because I was assuming it was certainly worth more than -- there's certainly some evidence that it's worth well more than 75. Yeah. I see here. Saxon

Foreclosure deed had the value at 133,000.

pointed out in its opposition plaintiffs have self-insured the dwelling for over 200. But anyway, go ahead, Mr. Bownes. somebody tell me what happened here. a P&S. Why doesn't

We had people with Why

Because the pleadings don't tell the story.

not just sell to the original P&S holders? problem?

What's the

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6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 this? MR. HENLIN: Frankly, your Honor, this dispute By their own admission I MR. SHAKUN: Judge, we do have it under

contract with buyers at this point. THE COURT: them, didn't you? MR. SHAKUN: Your Honor, I represent Ocwen You had it under contract with

Mortgage who's not a party to the case, the current servicer on behalf of Bank of New York, Mellon. When

they took over servicing from the other defendant, Saxon, there seems to be no recognition on Ocwen's part that there was a pending purchase and sale agreement. They just got new property, a loan that property needed to be sold, marketed it, entered into a purchase and sale agreement, and then that's what's pending at this point. THE COURT: Do you want to say anything about

then doesn't involve me. should be dismissed.

On our papers for Saxon, we show

the value of the property exceeds the jurisdictional minimum and we rest on the papers. THE COURT: MR. HENLIN: I think that's probably true. But in terms of what's being said

here in court, the bank is basically saying they made a decision after we were relieved of responsibility, and

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7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 our agency agreement was terminated, not to sell the property under the P&S. principal. We were agents for a disclosed

We at all times acted on that, and we should We should be

not be involved in these proceedings. summarily dismissed. THE COURT: motion to dismiss? MR. HENLIN: I understand.

Have you filed a

I will based on what is being

represented here in court today. THE COURT: I see. Based on what co-defendant

is representing in court here today. MR. HENLIN: THE COURT: Yes, your Honor. I see. Are you really going to

say to me with a straight face that I shouldn't -- let's just jump ahead. I mean, that sounds like a fairly Don't these

outrageous little story you just told me.

people need some protection from exactly what you've just described? MR. SHAKUN: Your Honor, they entered into an When the

agreement with Saxon when it was the servicer.

servicing transferred, Ocwen takes over the servicing. They just carried on in the normal course without any knowledge of this prior transaction with Saxon. THE COURT: Okay. You're making a pretty good

argument for an attachment from where I'm sitting, but

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8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 counsel. MR. BOWNES: -- or Ocwen had any knowledge of they were just not communicating. leave the plaintiffs? MR. SHAKUN: Your Honor, it leaves my client So where does that

in an untenable position of breaching a current purchase and sale agreement. THE COURT: Is that their problem? They had a What am I

P&S on the property you were trying to sell. missing? MR. SHAKUN:

That no one on my end of the Bank

of New York or Ocwen, the parent servicer, had any knowledge of that. THE COURT: back to you. MR. BOWNES: I will take it in good faith that Go ahead. Thank you. I'll get

no one at the Bank of New York -THE COURT: I don't have any reason to doubt

that, but legally they are charged with the knowledge. These are facts and circumstances that they know. It is

in fact the Bank of New York, Mellon that was -- that purchased this property at foreclosure sale. It was in

fact the Bank of New York, Mellon that in fact entered in through Saxon into this purchase and sales agreement. It was the Bank of New York, Mellon that had the

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9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 foreclosure deed and delayed recording it until May -- I may mix the date, but I believe it was May or June of 2012, and nobody notified Mr. Lintner or Mrs. Embree of that fact, that the recording had occurred, and the first time after many inquiries by Doug Embree who was the agent -- the buyer's broker with respect to this matter was finally -- and continually heard from the real estate agent who was representing Saxon that they were waiting for the foreclosure deed to be recorded before they could close. Didn't hear until July that

BONY was backing out of the deal, and then they get the check, the $5,000 deposit that they had put down back when they closed this deal from Saxon. So I don't know

if Saxon gets out now or not in terms of those factual -THE COURT: I was really going to summarily

dismiss them if you were going to agree with it, but I guess we'll have to wait for the motion then. trying. MR. HENLIN: Thank you. THE COURT: Mr. Bownes is generally I appreciate it, your Honor. I'm

reasonable, and if it turns out there's not a case against you, he won't proceed with it, but I think he wants to keep his powder dry at this point.

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10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 All right. Here's the problem though. I

mean, under any scenario it looks like this property is worth $75,000, and there's precedent for the proposition that the measure here, the jurisdictional measure, an action for specific performance or a breach of contract or any piece of real property is the value of the property. The authority I'm relying on is a decision by Judge DiClerico, Feer v. Chapman, 2007 DNH 069 on our system, and Judge DiClerico cites Occidental Chemical Corporation versus Bullard. case, 995 F.2d 1046. Judge DiClerico said in that decision: Where, That's an Eleventh Circuit

quote, a plaintiff seeks to obtain property by specific performance, the amount in controversy is established by the value of the property. So I think, much to your chagrin, Mr. Bownes, it's probably going to remain in federal court on this one. That said, let's move on to the attachment. can't imagine a more appropriate situation for an attachment. When we have a specific performance case, I

it's all about the uniqueness of the property involved. That's the allegation. They said they have a P&S to buy I have pretty good

a specific piece of real estate.

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11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 property? MR. BOWNES: THE COURT: registry of deeds? MR. BOWNES: THE COURT: Yes. So the law says you get a Yes. Have you recorded it at the confidence that Mellon Bank has sufficient assets to satisfy the judgment of course, but it's not really about damages here. They have pled for damages in the

alternative, but they have asked for specific performance. So other than the functional equivalent

which is like maybe enjoining your client from alienating the property, isn't an attachment the perfect provisional remedy? MR. SHAKUN: No, I disagree. I understand

you're saying the functionability of the injunction, but certainly the attachment is exactly wrong in this case. If this case were not for money damages, then it They requested a $63,000

has no application. attachment.

I guess the basis for that is the amount of

the purchase and sale agreement, but that's not going to be the measure of damages if we have to assess that in this case. THE COURT: Does your attachment attach the

prejudgment attachment on real property for specific

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12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 performance. That's what the statute says. Right? RSA

Section 511-A:8, Roman Numeral III:

In equity cases for

the specific performance of an agreement to transfer land or a unique chattel, there is imminent danger of transfer to a bona fide third party. That's the law.

In such land cases as well as those to perfect a labor and materials lien, a mechanics lien under New Hampshire law, a writ of attachment may be filed with the registry of deeds without prior application of notice, etc., etc., etc. I mean, New Hampshire law says specific performance breach of contract case, you get a prejudgment attachment against the property involved. MR. SHAKUN: Judge, there is an aspect of this Mr. Lintner and Ms. Embree

I haven't mentioned yet.

were aware that Ocwen was marketing this property though. They had made multiple efforts to purchase it I have spoken with Ocwen, the real

through Ocwen.

estate broker, when he got this property assigned to him and put it on the market. in fact -- between -THE COURT: because you say so? testify? MR. SHAKUN: They're not. I'm supposed to take this from you Are any of these people here to They made efforts -- twelve

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13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 damages? THE COURT: Come on. We're in court. It's

not that I have any reason to doubt you.

Actually I do

have reason to doubt you based on -- are you the one that filed this motion saying -- is this your objection? You're Joshua Shakun; right? MR. SHAKUN: THE COURT: Correct. You're the one that filed this The amount is not

motion, this memorandum, saying:

related -- I'm looking at page two I guess of your memorandum. This amount, 62,000, is not related to the

measure of damages in a breach of contract action where damages are meant to restore the non-breaching party to his precontract position to provide the benefit of the bargain. Is that how you understand the expectation of To restore you to precontract position?

Because when I went to law school, which wasn't that long ago, expectation damages were to restore you to the position if the contract had been performed, not precontract. That's the problem. They're in

precontract position. contract position.

They're trying to be post-

So not only do you have your

expectation damages completely wrong, you cite a case, Estate of Younge by Bank of New England. So I checked

the case thinking maybe I didn't understand the

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14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 expectation damages. page 468. And you give me a jump cite to

468, quote, in breach of contract cases the

purpose of awarding damages is not merely to restore the plaintiff to his former position, exactly what you just said it was, but to give him the benefit of the bargain to put him in the position he would have been if the contract had been fulfilled. Starting to question you, Mr. Shakun. You're

throwing diametrically opposed propositions at me from what the case stands for and you're just completely misunderstanding contract damages. I'm not sure what to

do with all this, but there's a troubling warning for me. You don't cite the applicable law that the statute Specific performance, You're

-- I mean, the statute says:

prejudgment, ex parte attachment it says. telling me it's inappropriate. different.

The law says something

You're describing expectation damages to me It's been a long time

in a way that makes no sense.

since I did a lot of contract law, but that jumped out at me just right off the page, and then you cite the case and completely misrepresent what it says. Troubling. We're off to a bad start. You lose on remand.

The attachment stays.

You're going to be in federal court. MR. BOWNES: Pleasure to be here.

Case 1:12-cv-00462-JL Document 18 Filed 02/13/13 Page 15 of 15

15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Submitted: 2/13/13 /s/ Diane M. Churas __ DIANE M. CHURAS, LCR, CRR I, Diane M. Churas, do hereby certify that the foregoing transcript is a true and accurate transcription of the within proceedings, to the best of my knowledge, skill, ability and belief. C E R T I F I C A T E THE COURT: We can go off the record now and

have a preliminary pretrial. (Adjourned at 10:35 a.m.)