the helen galope 9th circuit filed appellant reply brief case 12-56892

Selected docket entries for case 12−56892

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08/14/201339 Main Document 2 Submitted (ECF) Reply Brief for review. Submitted byAppellant Helen Galope. Date of service: 08/14/2013.[8743573] (LA)

08/15/201340 Main Document 40 Submitted (ECF) Reply Brief for review. Submitted byAppellant Helen Galope. Date of service: 08/14/2013.[8743579] (LA)

(1 of 73)

https://ecf.ca9.uscourts.gov/docs1/009125226576

https://ecf.ca9.uscourts.gov/docs1/009125226595

Docket No. 12-56892

IN THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

HELEN GALOPE, on behalf of herself and all others similarly situated,

Plaintiffs - Appellants,

v.

DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE UNDER

POOLING AND SERVICING AGREEMENT DATED AS OF MAY 1, 2007

SECURITIZED ASSET BACKED RECEIVABLES LLC TRUST 2007-BR4;

WESTERN PROGRESSIVE, LLC; BARCLAYS BANK PLC, BARCLAYS

CAPITAL REAL ESTATE INC. d/b/a HOMEQ SERVICING; OCWEN LOAN

SERVICING, LLC, and DOES 4 through 10, Inclusive,

Defendant - Appellee.

APPELLANTS’ REPLY BRIEF TO DEUTSCHE BANK NATIONAL TRUST

COMPANY, WESTERN PROGRESSIVE, LLC, AND OCWEN LOAN

SERVICING, LLC’S ANSWERING BRIEF

APPEAL FROM THE U.S. DISTRICT COURT

For the Central District of California, Santa Ana

Case No. 8:12-cv-00323-CJC (RNBx) The Honorable Cormac J. Carney, Presiding

Lenore L. Albert, Esq. SBN 210876

Law Offices of Lenore Albert

7755 Center Avenue, Suite #1100

Huntington Beach, CA 92647

Ph: 714-372-2264 Fx: 419-831-3376

Email: [email protected]

Counsel for Plaintiffs – Appellants, Helen Galope

On behalf of herself and all others similarly situated

Case: 12-56892 08/14/2013 ID: 8743573 DktEntry: 39 Page: 1 of 38 (2 of 73)

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TABLE OF CONTENTS

I. INTRODUCTION ......................................................................................1

II. ARGUMENT..............................................................................................1

A. Article III Standing ....................................................................................... 1

B. Eight Key Pieces of Evidence Existed To Proceed with the Antitrust

Claim ............................................................................................................ 2

1. Mrs. Galope Purchased a LIBOR Loan Product from the

Defendants Who Were Manipulating LIBOR Market

Rates .......................................................................................3

2. The Injury is Fairly Traceable To the Defendants ...................6

3. The Defendants Profited Through the MBS Trust Which

Used LIBOR for The Interest Rate and Cap SWAPS ..............7

4. Mrs. Galope Had Standing as a Direct Purchaser Under

Antitrust Law ..........................................................................8

a. Rational Expectations Test ............................................9

b. Consumer Expectations Test .........................................12

c. Direct Injury Test ..........................................................13

5. There was Evidence of a Contract, Combination or

Conspiracy Between DBNTC and Barclays ............................15

C. UCL Claims Were Not Released, The Alteration of the Modification

Document by Defendants Extinguished the Contract ..................................16

i. The Release is Void Against Public Policy .............................17

ii. DBNTC was Personally Liable for Manipulation ....................19

iii. The Injury-in-Fact Only Requires a Trifle ...............................19

iv. Restitution is Allowed Under the UCL ...................................20


iii

v. Fraudulent Business Practices Do Not Require FRCP

9(b) Pleading ..........................................................................21

vi. Selling the Home During the Bankruptcy Stay Was a

UCL Violation ........................................................................22

D. Evidence Supported a Genuine Issue of Material Fact on the FAL

Claim ..........................................................................................................24

E. The Defendants Are Capable of Foreclosing Again in Violation of

Mrs. Galope’s Federal Rights......................................................................25

i. Equity is Not Required for a Wrongful Foreclosure

Claim ......................................................................................26

F. The Land Records Support Reversal of Summary Judgment on the

Good Faith and Fair Dealing Claim ............................................................26

III. CONCLUSION ..........................................................................................27

IV. STATEMENT OF RELATED CASES .......................................................28

V. CERTIFICATE OF WORD COUNT..........................................................29

VI. PROOF OF SERVICE ................................................................................30


iv

TABLE OF AUTHORITIES

Federal Opinions

American Needle, Inc. v. NFL, 560 U.S. 183 (2010) .......................................... 15

Associated General Contractors of California, Inc. v. California State

Council of Carpenters,

459 U.S. 519, 103 S. Ct. 897, 74 L. Ed. 2d 723 (1983) ......................... 9, 10

Columbia Steel Casting Co., Inc. v. Portland General Electric Co., 111 F.3d

1427, 1443 (9th Cir. 1997) .................................................................... 9, 12

Hollingsworth v. Perry, 133 S. Ct. 2652, 2659 (2013) ........................................... 6

Illinois Brick, 431 US 720, 728-29 (1977) .......................................................... 14

Menk v. Lapaglia 241 B.R. 896 (9th Cir. 1999) ................................................... 22

National Collegiate Athletic Association v. Board of Regents of Univ. of

Okla. 468U.S. 85, 113 [104 S.Ct. 2948, 82 L.Ed.2d 70] (1984) ................. 15

Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26 (1976) .................................... 7

Studio Unions v Loews, Inc., 193 F. 2d 51 (9th Cir. 1951) ................................. 13

Summit Tech. v. High-Line Medical Instruments, Co. 933 F.Supp.

918(C.D.Cal. 1996) .................................................................................. 23

Waller v Blue Cross of Calif., 32 F. 3d 1337, 1341, fn. 6 (9th Cir. 1994) .......... 2, 4

California State Opinions

California Savings & Commercial Bank v McIntosh, 216 Cal. 742 (1932) ......... 16

Cel-Tech Comm’ns, Inc. v. L.A. Cellular Tel. Co., 20 Cal. 4th 163 (1999) ......... 24

Hewlett v. Squaw Valley Ski Corp., 54 Cal. App. 4th 499 (1997) ....................... 23

Hick v. Thomas, 90 Cal. 289 (Cal. 1891) ............................................................ 17

Kasky v. Nike, Inc., 27 Cal. 4th 939, 949-50 (2002) ........................................... 24

Klein v. Chevron U.S.A., Inc. 202 Cal.App.4th 1342 (2012) ............................... 21

Klein v Earth Elements, Inc., 59 Cal. App 4th 965, 969 (1997) ..................... 23, 24

Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 323 .............................. 20

McKell v Washington Mutual, Inc., McKell, 142 Cal. App. 4th 1457 (2006) ..... 24

Morgan v. AT&T Wireless Services, Inc. 177 Cal.App.4th 1235 (2009) .............. 21

Reese v. Wal-Mart Stores, Inc. 73 Cal.App.4th 1225 (1999) ............................... 23


v

Stop Youth Addiction, Inc. v. Lucky Stores, Inc., 17 Cal. 4th 553 (1998) ........... 23

Tunkl v. Regents of University of Cal. 60 Cal.2d 92 (1963) ........................... 17, 18

Walker v. Countrywide Home Loans, Inc. 98 Cal.App.4th 1158 (2002) ............... 23

California State Statutes

Cal. Bus. & Prof. Code § 17200 .......................................................................... 23

Cal Civ Code § 51 ............................................................................................... 23

Cal Civ Code §1668 ............................................................................................ 17

Cal. Civ. Code § 2954.4 ...................................................................................... 23

Cal. Penal Code § 308 ......................................................................................... 23

Cal. Pub. Res. Code § 4511 ................................................................................. 23

Federal Statutes

11 USC § 362 ......................................................................................... 22, 24, 26


I. INTRODUCTION

This is a case of a homeowner who has been fighting to save her home from

a fraudulent foreclosure.

This brief focuses on Deutsche Bank National Trust Company (“DBNTC”),

the trustee of the mortgage backed securities, Western Progressive the foreclosing

trustee, and Ocwen Loan Servicing (“Ocwen”), the sub-servicer for Barclays d/b/a

HomEq. and portions of the record that should have defeated the summary

judgment motion.

The brief addressing Barclay’s issues, primarily concern the issue of

standing.

Since, these defendants have filed a brief separate from the Barclay’s

defendants, rather than reiterating the facts, plaintiff simply incorporates those

facts by reference into this brief. FRAP 28(i); Waller v Blue Cross of Calif., 32 F.

3d 1337, 1341, fn. 6 (9th

Cir. 1994). Any additional facts that are warranted in this

brief will be brought out in the argument section, below.

II. ARGUMENT

A. Article III Standing

The defendants have filed separate Answering briefs in this appeal that

overlap on the issue of Article III standing. The issue of Article III standing was a

primary concern on the motion to dismiss and is fully briefed in the Reply Brief


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addressing Barclay’s Answer. Rather than reiterating those points in this brief,

Mrs. Galope incorporates that brief by reference as to the issue of Article III

standing, and will limit any Article III standing issues in this brief to additional

concerns raised by the Deutsche Bank entities. FRAP 28(i); Waller v Blue Cross of

Calif., 32 F. 3d 1337. 1341, fn. 6 (9th

Cir. 1994).

B. Eight Key Pieces of Evidence Existed To Proceed with the

Antitrust Claim

Defendants contend there was no evidence of injury-in-fact to Mrs. Galope

with regard to the antitrust claim. Mrs. Galope alleged that she was harmed as a

direct purchaser of the LIBOR loan, and said purchase proximately resulted in her

being overcharged, and the later default and loss of her home through foreclosure.

There were eight key pieces of evidence to support a genuine issue of

material fact existed to prove injury to Mrs. Galope: (1) expert Certified Forensic

Accountant, Jay Patterson’s report on the MBS trust (ER 2118-2120); (2) the

Forward Writing Prospectus (FWP) 424b5 of the MBS trust filed by defendants

with the SEC (ER 1396-1714 are the pages containing the definitions,

identification of defendants, the terms, pooling and servicing agreement, Interest

Rate SWAP and Cap SWAP agreements; pages 1720 -1988 are the identification

of loans, loan terms and putative class members); (3) the Declaration of William

Matz (ER 2067-69); (4) the undisputed declaration of Helen Galope (ER 2070-


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2099); (5) the Oral Transcript of Bob Diamond of July 4, 2012 (ER 1998-2030);

(6) BBC News article dated July 31, 2013 “Libor scandal: Deutsche Bank admits

some staff involved” et al (ER: 2035-2040); (7) Admission of facts “Appendix A”

of the Non-Prosecution Agreement dated June 26, 2012 between the USDOJ and

Barclays Bank, PLC (ER 1304-1324); and (8) Order Instituting Proceedings

Pursuant to Section 6(c) of the Commodity Exchange Act against Barclays PLC

(ER 1326-1366).

1. Mrs. Galope Purchased a LIBOR Loan Product From the Defendants

Who Were Manipulating LIBOR Market Rates

Home loan origination expert, Bill Matz declared that it was “standard

industry response was “Don’t worry, we’ll refinance you” when a borrower like

Mrs. Galope would be presented with a LIBOR loan product like the one in this

case. (ER 2067) As to the LIBOR manipulation, he opined borrowers “informed of

the actual manipulation going on” would not accept a LIBOR-based loan on the

grounds it was implicit that the rates were based on independently determined

index. (ER 2068) Mrs. Galope’s uncontradicted testimony is that she expected a

fixed rate loan, but a LIBOR loan was presented to her (bait-and-switch) and if she

had known that Barclays was manipulating the LIBOR rate, she would have never

taken the loan. (ER 2070).


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First, the record contained a report from expert Jay Patterson, CFE, a

certified Forensic Accountant, examiner and analyst from Hot Springs, Arkansas

which demonstrated that 7,533 loans were supposedly to be transferred to the MBS

trust in 2007. (ER 2119). As of the time Mrs. Galope was opposing the motion for

summary judgment, only 1,956 homeowners were still surviving in this toxic trust.

That left only approximately 26% of the loans still surviving. Out of these 1,956

homeowners that were still surviving, 827 of those loans had to be modified (42%).

So, if this court takes away the modified loans, the borrowers who were able to

survive in this toxic set up were 1,129 borrowers or 15% of all borrowers. (ER

2119). These are the hard facts.

The Mortgage Backed Securitized trust (MBS) her loan was allegedly

transferred into, then had Interest and Cap SWAPs for the benefit of the provider

(Barclays), the trustee (Deutsche Bank National Trust Company), the servicer

(Barclays d/b/a HomEq Servicing), and the certificate holders.

The Swap Agreement clearly lays out that “Barclays [Bank PLC) as swap

provider” will pay the “issuing entity” (Barclay’s affiliate) “4.9381% to 5.2600%

per annum, during the first 58 distribution dates. (ER 1480-1488)

Then Barclays would pay itself, the servicers, trustee, and certificate holders

with the proceeds from the “supplemental interest account” which would be the

money from the SWAP. (424b5 s-90)


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The interest rate cap agreement provided that Barclays would pay the one-

month LIBOR rate to the certificate holders as a cap for the first 48 months

(approximately first 2 years).

By suppressing the LIBOR rate while concurrently charging Mrs. Galope

8.775% on her LIBOR loan product, Barclays and DBNTC guaranteed to make

money for itself from Mrs. Galope and those similarly situated. There was zero

risk in this setup because the LIBOR rate was not based on the market but it was

being set by Barclays, DBNTC and other financial institutions.

Mrs. Galope had no knowledge that her LIBOR loan was not based on an

independent market rate.

Going back to the prospectus, it clearly states that both the servicer and

trustee make money from these funds in addition to Barclays as the provider. The

stockholders were also able to make money from this arrangement. The only

person who was stuck like a fly in a spider web was Mrs. Galope.

She voluntarily flew into the web, with the expectation she could refinance

her loan six months down the road. But she was not able to do that, and the reason

for that, in substantial part, was due to the defendants’ collusion in artificially

lowering the LIBOR rate.

Both the Interest Rate and Cap SWAP terminated by 2012 on their own

terms (after the initial 5 year period).


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The manipulation can also be seen by the term in the Agreement where it

says if the servicer changes - then the agreement must be terminated. Barclay’s

d/b/a HomEq was the servicer. The change in servicing rights would not have such

a profound effect if the defendants did not intend to manipulate the servicing of the

loans of the borrowers.

2. The Injury is Fairly Traceable To the Defendants

Article III standing merely means that “for a federal court to have authority

under the Constitution to settle a dispute, the party before it must seek a remedy for

a personal and tangible harm.” Hollingsworth v. Perry, 133 S. Ct. 2652, 2659

(2013).

Mrs. Galope prayed for an injunction, damages, fees and costs for the

foreclosure due to defendants conduct for the harms she sustained due to the

antitrust allegations. (ER 672, 675, 676, 682)

Defendants are not arguing that she was not seeking a remedy but that there

is no causation (e.g. that the injury be fairly traceable to defendants’ conduct).

They argue, as their co-defendants that the court should focus on her initial

fixed interest rate of 8.775% of her loan. (RB 13) The injury is explained in the

incorporated Reply Brief.

Defendants fail to acknowledge that the proper focus here, is not on the

injury, but who caused the injury. That is why the term “fairly traceable” is used.


7

For an injury to be fairly traceable to defendant’s conduct, merely means

that the injury can be fairly traced to the defendant before the court and not some

third party. For example in Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26

(1976) , the plaintiffs were complaining of hospitals turning away indigent people

in need of treatment. But the plaintiffs did not sue any hospitals. Thus, the issue of

whether the harm complained of was “fairly traceable” to the defendants before the

court and not some third party. Id at 60.

Here, Mrs. Galope is complaining about the overcharges, the default and

foreclosing on her home in a LIBOR loan product she was thrown into where the

ones who created the loan and took her money were foreclosing for their benefit as

they bet against her in the MBS trust. This is fairly traceable to the defendants who

were the MBS trustee, servicer, provider, and foreclosing trustee on her LIBOR

loan.

3. The Defendants Profited Through the MBS Trust Which Used LIBOR

for The Interest Rate and Cap SWAPS

The trustee, Deutsche Bank received money from the Interest Rate SWAP

and Cap SWAP in the LIBOR MBS trust. (ER 1568-69, 1480-88)

The provider, Barclays received money from the Interest Rate SWAP and

Cap SWAP in the LIBOR MBS trust. (ER 1568-69, 1480-88)


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The servicers, Barclay’s d/b/a as HomEq and Ocwen also received from the

Interest Rate SWAP and Cap SWAP in the LIBOR MBS trust. (ER 1568-69, 1480-

88)

The servicer pays the foreclosing trustee from this pool. (ER 1488 et seq

Pooling and Servicing Agreement)

One of the multiple smoking guns in the FWP is the “Hypothetical Available

Funds and Supplemental Interest Rate Cap Table” which can be found at ER 1516-

1522)

There is not enough space to fully explain this in a brief but this is an

example of how intertwined market LIBOR was tied to this MBS trust. Here a

hypothecation was made assuming “One-Month LIBOR and the Six-Month LIBR

Loan Index each remains constant at 20%” and indicates how much would be

distributed and when.

So it is not just that her loan was a LIBOR loan making her a direct

purchaser of a LIBOR product, but her loan was placed in a MBS trust where the

terms of that trust made her loan toxic because the defendants could further profit

off of her, in excess of merely servicing rights so long as they could also control

the market rate of LIBOR.

Her harm is fairly traceable to the defendants in this case.


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4. Mrs. Galope Had Standing as a Direct Purchaser Under Antitrust Law

Next defendants contend there was no antitrust standing and base it solely on

Bill Matz declaration. (RB 13).

a. Rational Expectations Test

Defendants argue that new legal theories cannot be raised on appeal for the

first time. (RB 16) New legal theories should be allowed in this case on the

grounds the district court ordered the defendants to file a motion for summary

judgment before an answer was even filed in this case. The summary judgment

motion at issue was filed within one month of the third amended complaint being

filed and approximately four months after the case was initiated. There was no

time to do discovery or develop the case. The LIBOR manipulation orders did not

surface until June 2012. This motion was determined by September 2012 and the

case was over. Such issues are properly brought to the appellate panel’s attention

for the first time on appeal because they are pure issues of law. Columbia Steel

Casting Co., Inc. v. Portland General Electric Co., 111 F.3d 1427, 1443 (9th Cir.

1997).

Defendant contends plaintiff used the “target area” test for the first time on

appeal and that this test has been “discredited” citing, Associated General

Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S.

519, 103 S. Ct. 897, 74 L. Ed. 2d 723 (1983) (“AGC”). First the “target area” test


10

is not mentioned in the plaintiff’s brief. Second, none of the cases plaintiff cited in

her brief at 27-28 are cited for the proposition that they are being discredited based

on their use of the target area test in AGC.

In Associated General Contractors of California, Inc. v. California State

Council of Carpenters, 459 U.S. 519, 103 S. Ct. 897, 74 L. Ed. 2d 723 (1983), the

Supreme Court identified a number of prudential factors for determining whether

an antitrust plaintiff has standing. "These factors include: (1) the nature of the

plaintiff's alleged injury; that is, whether it was the type the antitrust laws were

intended to forestall; (2) the directness of the injury; (3) the speculative measure of

the harm; (4) the risk of duplicative recovery; and (5) the complexity in

apportioning damages." American Ad Mgmt., Inc. v. General Tel. Co. of Cal., 190

F.3d 1051, 1054 (9th Cir. 1999) (citing AGC, 459 U.S. at 535).

Here, the non-prosecution agreement and Order instituting proceedings by

the Commodities Exchange Administration is sufficient to demonstrate that this is

the type of injury anti-trust laws were intended to forestall. Incurring higher

interest rate, losing money and property is the type of injury antitrust law are

intended to forestall and as shown above the injury is directly related to the

conduct. The loss of a home or being forced into default by the excess charges

after a false promise of the ability to refinance to a lower rate in 6 months is not

speculative. All of the data needed to apportion the damages is sitting in


https://www.lexis.com/research/buttonTFLink?_m=2ddb8e5158356f31ef3c9f491260a55d&_xfercite=%3ccite%20cc%3d%22USA%22%3e%3c%21%5bCDATA%5b2009%20U.S.%20Dist.%20LEXIS%20132583%5d%5d%3e%3c%2fcite%3e&_butType=3&_butStat=2&_butNum=26&_butInline=1&_butinfo=%3ccite%20cc%3d%22USA%22%3e%3c%21%5bCDATA%5b190%20F.3d%201051%2c%201054%5d%5d%3e%3c%2fcite%3e&_fmtstr=FULL&docnum=1&_startdoc=1&wchp=dGLbVzB-zSkAW&_md5=92dfb84edd83fdd243e5c3352480e546

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Patterson’s report and in the business records of those managing the MBS trust.

The antitrust scheme was complex, but not the damages. Finally, there is no risk

of duplicative recovery. Either the person obtains the home or the money for it, if

the home is lost.

In a similar nature, Mrs. Galope alleged Barclays and other co-defendants

devised a scheme where it represented that the true cost to borrow money was low

as demonstrated by LIBOR being published in the Wall Street Journal. The same

defendants then represented, through their agents, that borrowers did not need to

fear entering into the LIBOR loans that were initially at a higher rate on the

grounds they could refinance at a lower level (like the ones being published in the

newspapers). In fact, defendants were selling high interest loans to borrowers who

were more likely to default in times of economic hardship while they were

artificially suppressing the true market rate that was being published in the Wall

Street Journal. Even more egregiously, the same defendant Barclays bought SWAP

agreements and bet against the homeowner, cashing out upon the homeowner’s

default of their loan that they initially borrowed.

Deutsche Bank National Trust Company, the co-defendant on this claim,

was the MBS trustee. DBNTC is one of the 16 banks who manipulated LIBOR and

was also making money on the Interest Rate and Cap SWAPS in the MBS toxic

trust (along with Ocwen and even Western Progressive through the PSA).


12

The plaintiff, Mrs. Galope, on behalf of herself and those similarly situated,

alleged that the defendants' practices was a substantial factor which resulted in the

foreclosures on their homes.

It makes perfect sense. There is nothing in defendant’s brief to demonstrate

Antitrust standing does not exist for each and every cause of action lodged against

them in this case.

b. Consumer Expectations Test

Defendants argue that the proposition the consumer expectation test could be

used in this area of law was not briefed before the district court so the appellate

court should ignore this issue. (RB 13-14). But, this is an issue of pure law that

was raised in the opening brief to assist this court in coming to the correct

conclusion. The defendant has briefed a response to the issue and it would not

prejudice the party to have this court consider it. Such issues are properly brought

to the appellate panel’s attention for the first time on appeal because they are pure

issues of law. Columbia Steel Casting Co., Inc. v. Portland General Electric Co.,

111 F.3d 1427, 1443 (9th Cir. 1997).

Second, Defendants argue that no other court in the United States has used

the Consumer Expectation Test on an antitrust claim for LIBOR rate (or other

market rate) manipulation, so this court should not do so either. (RB 15)


13

However, defendants fail to point to any other Circuit who has ever been

confronted with an admitted price fixing scandal by 16 of the world’s largest

financial institutions that were also creating the Notes that the borrowers were

being placed, and on the back end, creating the MBS trusts which then allowed

them to bet against the homeowner and make money off of them based on the

market LIBOR interest rate, as is the case here.

Courts are faced with new schemes all of the time. Not all schemes fall

neatly into a certain category. Seeing how the ingredients create the harm is

simple: Toxic loans + Toxic MBS trusts + Manipulation of the market rate =

Default and foreclosure.

Defendants summed up the reason why this panel should consider the test:

because it is a test “reserved for cases in which the everyday experience of the

[consumer] permits a conclusion that the product[] violated minimum safety

assumptions.” (RB 15-16).

c. Direct Injury Test

None of the defendants briefed whether or not Mrs. Galope fit within one of

the two direct injury groups. Defendant merely argued that the target area test was

discredited. But AGC never addressed Studio Unions v Loews, Inc., 193 F. 2d 51

(9th

Cir. 1951) This case has been cited 46 different times in this Circuit alone

since it was published. It has never been overruled.


14

Defendants have not addressed this issue or how Illinois Brick would apply.

There simply is no application of the facts.

The defendants keep going back to the “modification.” However, that

modification agreement did not have the terms disclosed to Mrs. Galope until three

months after litigation had commenced (half way through the entire life of the

case). Second, the modification was another LIBOR loan product. Initially these

same defendants represented to the court that the modification had an ‘adjustable

interest rate.’ Then after the argument was made, they changed positions and

stated it was a fixed rate. The court allowed plaintiff to amend. (ER 2127-28)

But this is all smoke and mirrors. The damage was already done at this

point in time and Mrs. Galope was facing foreclosure.

In Illinois Brick, 431 US 720, 728-29 (1977) the Supreme Court held that

any benefit gained by the defendant through anticompetitive conduct which

violates the federal antitrust laws is to be taken away from the wrongdoer by the

direct purchaser.

Here, the focus is on the money defendants gained from the interest rate

SWAP and Cap SWAP in the MBS trust; the excess charges and fees from the

foreclosure. Ocwen and Barclays, as the servicer also benefited from having these

loans in the pipeline during default increasing in outstanding principal, thereby


15

increasing their profits as servicers which are based on the bulk outstanding

principal balance.

5. There was Evidence of a Contract, Combination or Conspiracy Between

DBNTC and Barclays

Defendants argue that there was no evidence of a conspiracy. (RB 18).

The relevant test is whether there is evidence of a contract, combination, or

conspiracy. American Needle, Inc. v. NFL, 560 U.S. 183 (2010)

A “contract, combination or conspiracy,” § 1, that is necessary or

useful to a joint venture is still a “contract, combination . . .

or conspiracy” if it “deprives the marketplace of independent centers

of decisionmaking,” Copperweld Corp. v. Independence Tube Corp.

(1984), at page 467. See National Collegiate Athletic Association v.

Board of Regents of Univ. of Okla. (1984) 468 U.S. 85, 113 [104

S.Ct. 2948, 82 L.Ed.2d 70] [“[J]oint ventures have no immunity from

antitrust laws”]. Any joint venture involves multiple sources of

economic power cooperating to produce a product. And for many

such ventures, the participation of others is necessary. But that does

not mean that necessity of cooperation transforms concerted action

into independent action; a nut and a bolt can only operate together,

but an agreement between nut and bolt manufacturers is still subject

to § 1 analysis. Nor does it mean that once a group of firms agree to

produce a joint product, cooperation amongst those firms must be

treated as independent conduct. The mere fact that the teams operate

jointly in some sense does not mean that they are immune. American

Needle, Inc. v. NFL, 560 U.S. 183 (2010).

As shown above, there was a vicarious admission in news articles where

DBNTC admitted that some of its employees were involved in the price fixing

scheme. It was well known that Deutsche Bank was a banking member that

contributed to LIBOR with Barclays. The MBS trust lists DBNTC as the trustee


https://www.lexis.com/research/buttonTFLink?_m=48e3d7bd7fe04e8fca611550cf64d07e&_xfercite=%3ccite%20cc%3d%22USA%22%3e%3c%21%5bCDATA%5b560%20U.S.%20183%5d%5d%3e%3c%2fcite%3e&_butType=4&_butStat=0&_butNum=330&_butInline=1&_butinfo=15%20U.S.C.%201&_fmtstr=FULL&docnum=1&_startdoc=1&wchp=dGLbVzB-zSkAW&_md5=016e5ce608745019e0a18bd5f03d5c58

16

and Barclays as the provider, initial Servicer and then Ocwen as the current

servicer. The Non-prosecution agreement has admissions of Barclays also

partaking in the same price fixing scheme, along with the Commodities order.

Barclays and DBNTC do not dispute that they are separate competitive

entities in the financial world. This type of joint venture was surely damaging,

supporting this element of plaintiff’s antitrust claim.

C. UCL Claims Were Not Released, The Alteration of the

Modification Document by Defendants Extinguished the Contract

Defendants next group together the second, third, and fourth claim for UCL

liability and state the claims due to the “release” in the “modification” that was

faxed to Mrs. Galope on April 7, 2008. (RB 19)

First, the district court never found that the release barred Mrs. Galope’s

claims. The ‘modification’ failed to contain material terms such, namely the terms

of the loan after April 1, 2013. In California Savings & Commercial Bank v

McIntosh, 216 Cal. 742 (1932) the court found the entire mortgage was

extinguished after the lender added part of the legal description to the loan

documents after they were executed. The court noted that under California law that

was an alteration, destruction, or x of a contract making it void and releasing the

other person of all obligations.


17

There is no dispute that Mrs. Galope signed a modification document that

did not contain any terms beyond April 7, 2008. By adding in those terms four

years later during litigation on the premise that the contract was faxed over on a

legal size page, is an alteration of the document Mrs. Galope received and signed

in 2008, thus extinguishing the entire agreement. It was undisputed all she

returned to defendants was the portion she received which did not include those

terms. Consequently, there is no effective release to enforce.

Similarly there is nothing to integrate and it does not bar the oral promises

made. (RB 25-26)

1. The Release is Void Against Public Policy

Second, such a defense is void against public policy and will not be

enforceable. Hick v. Thomas, 90 Cal. 289 (Cal. 1891), See also, Tunkl v Regents

Univ. of Cal., 60 Cal2d 92 (1963).

Releases for intentional conduct such as fraud are void and have been for a

very long time as codified in Cal Civ Code §1668.

As the California Supreme Court explained:

“The traditional skepticism concerning agreements designed to

release liability for future torts, reflected in Gardner v. Downtown

Porsche Audi (1986), at page 180, and many other cases, long has

been expressed in Civil Code section 1668 (hereafter cited as section

1668), which (unchanged since its adoption in 1872) provides: “All

contracts which have for their object, directly or indirectly, to exempt

any one from responsibility for his [or her] own fraud, or willful

injury to the person or property of another, or violation of law,


18

whether willful or negligent, are against the policy of the law.” City

of Santa Barbara v Superior Court 41 Cal 747 (2007). (See also Tunkl

v. Regents of University of Cal. (1963) 60 Cal.2d 92.) [emphasis

added]

Defendant manipulated the LIBOR rate for financial gain in violation of a

myriad of laws making such conduct fraudulent. Defendant also faxed over 2 legal

size pages as part of the modification agreement to plaintiff so the bottom of the

pages containing material terms about repayment were cut off when the fax

transmission was received on letter size paper which was also unfair and

fraudulent.

None of these actions can be released by agreement. These are acts of fraud.

Second, defendants contend that Mrs. Galope did not contact HomEq for her

the rest of the terms of the modification between April 2008 and June 2009.

Defendants contend that this is proof she received the entire agreement. (RB 24).

That is a leap this court should not take. Mrs. Galope declared she did not receive

the terms of her modification. She even moved to amend her complaint because

she relied on Defendants’ version of what those missing terms were in her First

Amended Complaint and then defendant contradicted those very terms. (RJN). At

the very least, this created a genuine issue of material fact which would have

warranted the denial of summary judgment.


19

Defendants try to explain their own forgery away by having the court look at

their signatures. It is well known that Ocwen forges signatures on loan documents.

Furthermore, plaintiff’s version of the modification does not even contain the

signature lines much less the signatures that Ocwen provides this court. There is

no proof that such a document was ever transmitted to plaintiff by Ocwen. The fact

Ocwen has a legal sized document in its possession proves nothing. In fact, it

makes one wonder how they have a legal sized document when Mrs. Galope

“faxed” her letter size document to them.

2. DBNTC was Personally Liable for Manipulation

Defendants next contend that DBNTC is only being held vicariously liable.

DBNTC never identifies who DBNTC believes it is being held vicariously liable

for. (RB 22). As explained above, DBNTC was personally liable for the

manipulation of LIBOR. Without knowing who DBNTC believes it is being held

liable for, there is no way to understand or respond to defendant’s argument on this

issue.

3. The Injury-in-Fact Only Requires a Trifle

As explained in Kwikset, in order to have standing to pursue a UCL claim,

the private party must have suffered a monetary or property loss. In essence, they

must have suffered from some type of economic injury. The injury, however, does

not have to be substantial in order to have standing. In fact, the UCL cause of


20

action is commonly used in consumer class actions where a consumer has been

“nickeled-and-dimed” which would make pursuing an individual private claim too

costly. The Kwikset court confirmed that only an “identifiable trifle” of economic

injury is required. Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 323.

As shown above, plaintiff alleged that she paid a higher interest, had her title

clouded with a default, paid money to an attorney to try to fix it, she finally lost

title completely, and although they rescinded the sale after litigation started, she is

still facing foreclosure and is in imminent danger of losing her home to

foreclosure. During this entire dispute, her loan is ballooning out of control due to

the terms, and she is incurring extra charges and fees, too. More than a “trifle” of

loss of money and property has been alleged, here.

4. Restitution is Allowed Under the UCL

Defendant contends that restitution is not allowed. (RB 29) Restitution is

not the same as damages. It is an equitable concept to restore Mrs. Galope.

Defendants’ argument ignores that Mrs. Galope bought a loan that was

illegal due to the antitrust violations. It was toxic. The modification was

extinguished because the defendants altered it (forgery). Mrs. Galope’s obligations

were extinguished through the defendants’ own wrongful conduct.

Second, recently the California Court of Appeal ruled in favor of the

borrower in Glaski v Bank of America 2013 Cal. App. LEXIS (2013), at page 633.


21

Glaski is relevant on the grounds that it demonstrates California appellate

courts will consider the securitization process when there are concrete facts

alleged, as here, that the defendant is not holding the loan (the note and deed of

trust representing the debt obligation) as evidenced by the terms laid out in the

424b5 and pooling and servicing agreement. The court of appeal found that New

York trust law, when read literally, did in fact make such transfers void in order

to avoid adverse tax consequences to the investors. Consequently, the subsequent

assignments or trustee’s deeds recorded in the California County Recorder’s

office would be void, too.

This is directly relevant here, where we have the plaintiff and some

documents dated December 16, 2006 (not December 26, 2006). This would be

outside the 90 day window to transfer the loan to this MBS trust.

Mrs. Galope is entitled, at the very least to her payments made, and if equity

so finds, to her title to her property.

5. Fraudulent Business Practices Do Not Require FRCP 9(b) Pleading

Standards, but Even if it Did, this was a Summary Judgment Motion

Defendants contend a fraudulent business practice under the UCL must be

pled with specificity. (RB 30). California does not require UCL claims for

fraudulent conduct to be pled with specificity. (Morgan v. AT&T Wireless

Services, Inc. (2009) 177 Cal.App.4th 1235, 1257; see also Klein v. Chevron


22

U.S.A., Inc. (2012) 202 Cal.App.4th 1342, 1381.) There is a split in the federal

courts, but generally, only a complaint that has a separate fraud claim which

requires specificity then requires the heightened pleading of FRCP 9(b).

Even if the defendants were correct, this was a summary judgment motion.

Moreover, the facts of who, what, where, and how were pled.

6. Selling the Home During Bankruptcy Stay Was a UCL Violation

Finally, DBNTC, Ocwen and Western Progressive knew there was a

bankruptcy stay and transferred her property during the stay. Thereafter, when she

demanded the transfer back to her name, they refused until this lawsuit was filed

and they were confronted with a temporary restraining order.

Article III courts enjoy concurrent jurisdiction with the US Bankruptcy court

in order to enforce violations of the stay. (Menk v. Lapaglia (9th Cir. 1999) 241

B.R. 896.)

Violations of 11 USC § 362 entitle plaintiffs to damages, including attorney

fees and costs. It is irrelevant that these defendants were foreclosing. The

automatic stay has no such exception and they were required to obtain an order

from the court granting them relief from stay. Menk.

California’s unfair competition law has three separate prongs. The UCL

prohibits “any unlawful, unfair or fraudulent business act or practice and unfair,


23

deceptive, untrue or misleading advertising.” (Summit Tech. v. High-Line Medical

Instruments, Co. (C.D.Cal. 1996) 933 F.Supp. 918.)

Under this law, a practice can be prohibited as unfair or deceptive even if not

unlawful, and vice versa. (Walker v. Countrywide Home Loans, Inc. (2002) 98

Cal.App.4th 1158; Cal. Civ. Code § 2954.4. “Because Cal. Bus. & Prof. Code

§ 17200 is written in the disjunctive, it establishes three varieties of unfair

competition – acts or practices which are unlawful, or unfair, or fraudulent.” Reese

v. Wal-Mart Stores, Inc. (1999) 73 Cal.App.4th 1225, Unruh Civil Rights Act;

Civ. Code, § 51 et seq.)

An unlawful business practice can be “anything that can properly be called a

business practice and that at the same time is forbidden by law.” Stop Youth

Addiction, Inc. v. Lucky Stores, Inc., 17 Cal. 4th 553 (1998); Cal. Penal Code §

308.

This prong of the unfair competition law allows a plaintiff to enforce a broad

array of state and federal statutes, including consumer-protection statutes Hewlett

v. Squaw Valley Ski Corp., 54 Cal. App. 4th 499 (1997); Cal. Pub. Res. Code §

4511; antidiscrimination statutes; criminal statutes; and environmental statutes.

Klein v Earth Elements, Inc., 59 Cal. App 4th 965, 969 (1997).

The 1992 Amendment to §17203 made clear that the law expressly reaches

prior – and hence discontinued – acts of unfair competition in addition to


24

continuing conduct. Klein v Earth Elements, Inc., 59 Cal. App 4th 965, 969

(1997).

As explained in McKell v Washington Mutual, Inc., McKell, 142 Cal. App.

4th 1457 (2006) “[b]y extending to business acts or practices which are

“unlawful,” “the UCL permits violations of other laws to be treated as unfair

competition that is independently actionable. [Citation] Even if the violation of

another law does not create a private right of action, if the violation constitutes

unfair competition, it is actionable.” Id. at 1474-75 (2006); Kasky v. Nike, Inc., 27

Cal. 4th 939, 949-50 (2002). See Cel-Tech Comm’ns, Inc. v. L.A. Cellular Tel. Co.,

20 Cal. 4th at p. 180.

Furthermore, there is no preemption issue if the state statute which was

violated was created to enforce a federal regulation. McKell v. Washington Mutual,

Inc. (2006) 142 Cal.App.4th 1457, 1485.

Consequently, Mrs. Galope’s UCL claim based on the defendant’s violation

of 11 USC § 362 did not fail as a matter of law.

The trustee’s deed upon sale, notice to the defendants in bankruptcy (ER

337), and order demonstrating the stay was in effect at the time of the sale all

supported a denial of the summary judgment motion. (ER 337-349)

The court erred, and the decision should be reversed.


25

D. Evidence Supported a Genuine Issue of Material Fact on the FAL

Claim

Defendants contend there was no evidence DBNTC was involved in the

publications. (RB) Plaintiff presented evidence of the LIBOR rates that were

published, DBNTC’s authorized agent telling the newspaper that some of their

employees were involved in suppressing the LIBOR rates published in the Wall

Street Journal, and the prosecutorial agreements, and other news articles. For a

fresh case where discovery had not begun, this demonstrated a material issue of

genuine fact existed, enough to defeat a summary judgment motion. (ER 1998-

2030; 2035-2040; 1304-1324; 1326-1366)

Defendant concludes that plaintiff did not address the issue of FAL in her

opening brief. (RB 33). However, the FAL was addressed in pages 45-46.

E. The Defendants Are Capable of Foreclosing Again in Violation of Mrs.

Galope’s Federal Rights

Defendants contention is that these financial institutions can wrongfully take

another person’s property and then after the person has taken the time and expense

to go to court, the defendants merely have to give back title during litigation in

order to absolve it of all wrongdoing. (RB 34)


26

However, this ignores the fact that the defendant is capable of doing it again.

The court has jurisdiction to address any issue that can recur. Here, the defendants

did not rescind their notice of default. Mrs. Galope faces imminent foreclosure.

As shown above, they only did not have a right to foreclose in September

2011, but their contracts have been extinguished by their own bad conduct.

Continuing to violate 11 USC 362 is nothing more than the type of harm that

is part of a "pattern of officially sanctioned behavior" violating the plaintiffs'

federal rights. LaDuke v. Nelson, 762 F.2d 1318, 1323 (9th Cir. 1985).

1. Equity is Not Required for a Wrongful Foreclosure Claim

Equity is not a precondition to recovery for wrongful foreclosure. See, Glaski

v Bank of America, Pfeiffer v Countrywide Home Loans, Inc. 211 CalApp4th

(2012), at page 1250, West v JPMorgan Chase Bank, N.A. 214 CalApp4th 780

(2013), and Jolley v Chase Home Finance 213 CalApp4th 872 (2013).

F. The Land Records Support Reversal of Summary Judgment on the

Good Faith and Fair Dealing Claim

Defendants assert that breach of good faith and fair dealing lacks evidence.

(RB 37). The deed of trust had a RESPA clause in it. (ER 302-320).The

defendants chose to substitute themselves into that contract by way of substitution

of trustee, declaring agency agreements in the Notices of Default, and assignments

of the deed of trust. (ER 329-332, 334-345).


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27

Consequently, it is implied that defendants would comply with TILA.

However, it failed to do so by sending Mrs. Galope a modification agreement that

did not disclose the terms that were cut off from the fax. Defendants never explain

why it took three years and one lawsuit to finally disclose those terms to Mrs.

Galope.

Mrs. Galope declared she did not obtain all terms of the modification. (ER

2070-2099)

Regulation Z promulgated by the Federal Reserve Board under the Trust in

Lending Act (12 CFR §226 et seq) mandates disclosure of those missing terms and

it was implied that the defendants would provide them at the time of signing. It

was surely implied that upon Mrs. Galope’s notice, they would have supplied them

at that time. Instead they waited until the middle of litigation to provide their

terms. That was a clear breach and so supported.

VII. CONCLUSION

For the foregoing reasons, the summary judgment in favor of defendants

should be reversed, and costs should be awarded to appellant.

Dated: August 14, 2013 Respectfully Submitted,

LAW OFFICES OF LENORE ALBERT


28

/s/ Lenore Albert___________________

LENORE L. ALBERT, ESQ.

Counsel for Plaintiffs – Appellants, Helen

Galope on behalf of herself and all others

similarly situated


29

STATEMENT OF RELATED CASES

Plaintiffs/Appellants are not aware of the following cases pending in this

Court that would be deemed related pursuant to Ninth Circuit Rule 28-2.6.



/s/ Lenore Albert___________________




similarly situated


30

CERTIFICATE OF WORD COUNT

I certify that this brief complies with enlargement of brief size permitted by

the Ninth Circuit Rule 28-4. The brief’s type size and type face comply with Fed

Rule of Civ Proc 32(a)(5) and (6). This brief has 6,332 words including this

Certificate and excluding the portions exempted by the Federal Rules of Appellate

Procedure 32(a)(7)(B)(iii), if applicable.



/s/ Lenore Albert___________________

LENORE L. ALBERT, Esq.




31

PROOF OF SERVICE

STATE OF CALIFORNIA, COUNTY OF ORANGE:

I declare that I am over the age of 18 years, and not a party to the within action;

that I am employed in Orange County, California; my business address is 7755

Center Avenue Suite #1100, Huntington Beach, CA 92647.

On August 14, 2013, I served a copy of the following document(s) described as:

APPELLANTS’ REPLY BRIEF TO DEUTSCHE BANK NATIONAL TRUST

COMPANY, WESTERN PROGRESSIVE, LLC, AND OCWEN LOAN

SERVICING, LLC’S ANSWERING BRIEF

on the interested parties in this action as follows:

See attached Mail List

[ ] BY OVERNIGHT MAIL – I caused such document(s) to be placed in pre-

addressed envelope(s) with postage thereon fully prepaid and sealed, to be

deposited as Express/Priority Mail for next day delivery at Westminster,

California, to the aforementioned addressee(s).

[x] BY CM/ECF – I caused such document(s) to be transmitted to the office(s) of

the addressee(s) listed above by electronic mail at the e-mail address(es) set forth

pursuant to FRCP 5(d)(1).

[ ] BY EMAIL – I caused such document(s) to be transmitted to the office(s) of the

addressee(s) listed above by email at the e-mail address(es) set forth pursuant to

agreement between counsel.

[ ] BY FAX – I caused such document(s) to be transmitted facsimile from the

offices located in Westminster, California this business day to the aforementioned

recipients.

I declare under penalty of perjury under the laws of the State of California

and the United States of America that the foregoing is true and correct.

Dated: August 14, 2013

/s/ Lenore Albert__________________

Lenore Albert


32

Mailing List

For Defendant Western Progressive, LLC; Defendant Ocwen Loan Servicing, LLC

and

Defendant Deutsche Bank National Trust Company:

Robert Norman, Esq.

Edward Kramer, Esq.

HOUSER & ALLISON

3780 Kilroy Airport Way, Suite 260

Long Beach, CA 90806

Telephone: (562) 256-1675

Fax: (562) 256-1685



For Defendant BARCLAYS BANK, PLC; BARCLAYS CAPITAL REAL

ESTATE INC. d/b/a HOMEQ SERVICING:

Scott H. Jacobs (SBN 81980)

[email protected]

Brandon W. Corbridge (SBN 244934)

[email protected]

Margaret Anne Grignon (SBN 76621)

[email protected]

REED SMITH LLP

355 South Grand Avenue, Suite 2900

Los Angeles, CA 90071-1514

Tel: (213) 457-8000

Fax: (213) 457-8080

James Meadows

[email protected]

Jonathan D. Schiller

[email protected]

Boies, Schiller & Flexner LLP

575 Lexington Avenue, 7th Floor

New York, NY 10022

Tel: (212) 446-2300


mailto:[email protected]

33

Fax: (212) 446-2350

David H. Braff

[email protected]

Yvonne S. Quinn

[email protected]

Jeffrey T. Scott

[email protected]

Matthew S. Fitzwater

[email protected]

Adam S. Paris

Parisasullcrom.com

Sullivan & Cromwell LLP

125 Broad Street

New York, NY 10004

Tel: (212) 558-4705

Fax: (212) 558-3588

Hon. Cormac J. Carney (by 24 hour hand delivery)

United States District Court

Central District of California

411 W. Fourth Street, #1053

Santa Ana, CA 92701-4518

Attorney General’s Office: (by US Mail)

Appellate Coordinator

Office of the Attorney General

Consumer Law Section

300 S. Spring Street



Docket No. 12-56892

IN THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

HELEN GALOPE, on behalf of herself and all others similarly situated,

Plaintiffs - Appellants,

v.

DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE UNDER

POOLING AND SERVICING AGREEMENT DATED AS OF MAY 1, 2007

SECURITIZED ASSET BACKED RECEIVABLES LLC TRUST 2007-BR4;

WESTERN PROGRESSIVE, LLC; BARCLAYS BANK PLC, BARCLAYS

CAPITAL REAL ESTATE INC. d/b/a HOMEQ SERVICING; OCWEN LOAN

SERVICING, LLC, and DOES 4 through 10, Inclusive,

Defendant - Appellee.

APPELLANTS’ REPLY BRIEF TO BARCLAYS BANK PLC AND

BARCLAYS CAPTIAL REAL ESTATE INC. D/B/A HOMEQ SERVICING

ANSWERING BRIEF

APPEAL FROM THE U.S. DISTRICT COURT

For the Central District of California, Santa Ana

Case No. 8:12-cv-00323-CJC (RNBx) The Honorable Cormac J. Carney, Presiding

Lenore L. Albert, Esq. SBN 210876

Law Offices of Lenore Albert

7755 Center Avenue, Suite #1100

Huntington Beach, CA 92647

Ph: 714-372-2264 Fx: 419-831-3376





ii

TABLE OF CONTENTS

I. INTRODUCTION ......................................................................................1

A. Article III Standing ............................................................................. 7

II. ARGUMENT................................................................................................ 9

A. Article III Standing Was Alleged In this Case............................................... 9

B. Standing Under the UCL was Adopted from Article III .............................. 14

C. The Issue of Statute of Limitations is Jurisdictional So It is Not

Waived ....................................................................................................... 15

D. Aiding and Abetting Was Tied to the UCL Claim ....................................... 20

E. Plaintiff Had Standing to Bring a Breach of Good Faith and Fair

Dealing Claim ............................................................................................. 22

F. Fraud .......................................................................................................... 24

III. CONCLUSION ..........................................................................................26

IV. STATEMENT OF RELATED CASES .......................................................27

V. CERTIFICATE OF WORD COUNT..........................................................28

VI. PROOF OF SERVICE ................................................................................29


iii

TABLE OF AUTHORITIES

Supreme Court Opinions

DaimlerChrysler Corp. v. Cuno, 547 U.S. 332 (2006) ........................................ 13

Hollingsworth v. Perry, 133 S. Ct. 2652 (2013) .................................................... 9

Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) ....................................... 9, 12

Ninth Circuit Opinions

Columbia Steel Casting Co. v. Portland GE, 111 F.3d 1427 (9th Cir. 1996) ....... 16

DeMando v. Morris, 206 F.3d 1300 (9th Cir. 2000) ............................................ 22

Gest v. Bradbury, 443 F.3d 1177 (9th Cir. 2006) ................................................ 12

Maya v. Centex Corp., 658 F.3d 1060 (9th Cir. 2011) ................................... 13, 25

Sherman v. SEC (In re Sherman), 491 F.3d 948 (9th Cir. 2007) .......................... 16

Von Koenig v. Snapple Bev. Corp., 713 F. Supp. 2d 1066 (E.D. Cal. 2010) ........ 24

Waller v. Blue Cross, 32 F.3d 1337 (9th Cir. 1994) .............................................. 2

California State Opinions

Addison v. State, 21 Cal. 3d 313 (1978) .............................................................. 17

Alliance Mortgage Co. v. Rothwell, 10 Cal. 4th 1226 (1995) .............................. 26

Cowan v. Superior Court, 14 Cal. 4th 367 (1996) ............................................... 16

Glaski v Bank of America, 2013 Cal. App. LEXIS 633 (2013) ...................... 1, 8, 26

Kwikset Corp. v. Superior Court, 51 Cal. 4th 310 (2011) .................................... 15

People v. Toomey, 157 Cal. App. 3d 1 (1984) ..................................................... 21

Schulz v. Neovi Data Corp., 129 Cal. App. 4th 1 (2005) ..................................... 21

West v JPMorgan Chase Bank, N.A. (2013) 214 CalApp4th 780 .......................... 26

California State Statutes

Cal. Bus. & Prof. Code § 17200 (Deering) .......................................................... 21

Federal Rules and Statutes

Fed. R. App. P. 32(a)(7)(B)(iii) ........................................................................... 28

12 C.F.R. pt. 226 (2012) ..................................................................................... 23


I. INTRODUCTION

This is a homeowner case about Mrs. Galope, a homeowner has been

fighting to save her home from foreclosure. She was put into a toxic LIBOR loan

product which was transferred to a mortgage backed securitized trust based on

LIBOR drafted and controlled by the defendants.

By the time Mrs. Galope filed her suit, less than 20% of the loans had

survived that were transferred to this pool. Over 5,000 families were foreclosed on

in this trust alone. Out of those that survived, 845 of them required loan

modifications (or over 90% of the surviving loans were modified). (ER 2119)

Defendants contend plaintiff lacks jurisdictional standing. Appellant

contends she was injured by these defendants and the court can address her

grievance. Glaski v Bank of America, 2013 Cal. App. LEXIS 633 (2013).

There is an easy way to describe this case and a much more complex way to

describe it.

Simply stated, Mrs. Galope sought legal redress on the grounds defendants

gave her a subprime high interest rate loan promising her she could refinance to a

lower rate in six months. She believed their hype on the grounds the LIBOR rate

was much lower than the LIBOR loan product she received. She is also suing

because when she started to default, defendants promised her a modification, but

the document she received did not have terms beyond April 1, 2013 in it. When


2

HomEq refused to supply her with those material terms, she sought bankruptcy

protection and eventually filed this lawsuit.

The more complex version requires the court to look at the exotic nature of

the LIBOR loan the defendants crafted; why Barclays and Deutsche Bank National

Trust Company were manipulating LIBOR; and how the LIBOR rate would affect

their profit to be gained from Mrs. Galope’s loan under the terms of the mortgage

backed securitized (MBS) trust that they created and then transferred her loan into.

Barclays Bank plc and Barclays Capital Real Estate Inc. d/b/a HomEq

Servicing (hereinafter “Barclays”) brief is smoke and mirrors.

Defendants’ contention that plaintiff’s brief was long in order to attempt to

confuse the court, implying the defendants were able to address the issues with

fewer words is a mirror. Plaintiff submitted one consolidated brief (63 pages);

whereas defendants submitted two separate briefs, when combined, approximate

the same page length (62 pages).

Defendants contention that the excerpts were “wholly improper” on the

grounds the record in this case exceeded “2,000 pages” is a smoke screen on the

grounds the co-defendants actually added 1,689 pages to the excerpts provided by

the plaintiff in this case.

Smoke and mirrors are a reflection of fear. There is substantial justification

for that fear.


3

Since, these defendants have filed a brief separate from the Deutsche Bank

National Trust Company defendants, rather than reiterating the facts and argument

with citation to the record, plaintiff simply incorporates those items by reference

into this brief. FRAP 28(i); Waller v. Blue Cross, 32 F.3d 1337, 1341 n.6 (9th Cir.

1994). This brief will emphasize the standing issues and general facts.

This case is about Mrs. Galope and her attempts to save her home from

foreclosure. In 2006, she was already living in her home, but she needed to

refinance her loan. So she went to her broker to obtain refinancing. She had a

stable job as a professional engineer in the planning department for the California

State Lands Commission. Yet, she was placed in an exotic subprime exploding

ARM loan product manufactured only for the very wealthy. (Citations to the record

are in the other brief)

Even the defendant’s version of the Note (which plaintiff disputes as being

the true note) clearly says:

ADJUSTABLE RATE NOTE

(LIBOR Six Month Index (as published in the Wall Street Journal) – Rate

Cap)

2 YEAR RATE LOCK, 5 YEAR INTEREST ONLY PERIOD

(ER 295)


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A rate lock is an interest rate that the lender will give the applicant on a loan

for a fixed period of time. The first payment was due in February 2007. Her first

rate change was January 2009. She was paying interest only for the first five years.

After that time, her loan payments would “adjust” aka “explode” and would be

fully amortized over the remaining life of the loan (which means the monthly

mortgage obligation would explode).

The Mortgage Backed Securitized trust (MBS) her loan was allegedly

transferred into, then had Interest and Cap SWAPs for the benefit of the provider

(Barclays), the trustee (Deutsche Bank National Trust Company), the servicer

(Barclays d/b/a HomEq Servicing), and the certificate holders.

The Swap Agreement clearly recites that “Barclays [Bank PLC) as swap

provider” will pay the “issuing entity” (Barclay’s affiliate) “4.9381% to 5.2600%

per annum, during the first 58 distribution dates. (ER 1568-69; 1480-88)

Then Barclays would pay itself, the servicers, trustee, and certificate holders

with the proceeds from the “supplemental interest account” which would be the

money from the SWAP. (424b5 s-90)

The Interest Rate Cap agreement provided that Barclays would pay the one-

month LIBOR rate to the certificate holders as a cap for the first 48 distributions.

By suppressing the LIBOR rate while concurrently charging Mrs. Galope

8.775% on her LIBOR loan product, Barclays and DBNTC guaranteed to make


5

money for itself from Mrs. Galope and those similarly situated. There was zero

risk in this setup because the LIBOR rate was not based on the independent market

but it was being set by Barclays, DBNTC and other financial institutions. The

loans were being serviced by Barclays and the Interest Rates were initially Fixed

by Barclays in the LIBOR loan products like the one purchased by Mrs. Galope so

the entire game was rigged. And it was rigged against Mrs. Galope.

Mrs. Galope had no knowledge that her LIBOR loan was not based on an

independent market rate.

Going back to the prospectus, it clearly states that both the servicer and

trustee make money from these funds in addition to Barclays as the provider. The

stockholders were also able to make money from this arrangement. The only

person who was stuck like a fly in a spider web was Mrs. Galope.

She voluntarily flew into the web, with the expectation she could refinance

her loan six months down the road. But she was not able to do that, and the reason

for that, in substantial part, was due to the defendants’ collusion in artificially

lowering the LIBOR rate.

Both the Interest Rate and Cap SWAP terminated by 2012 on their own

terms (after the initial 5 year period).

The manipulation can also be seen by the term in the Agreement where it

says if the servicer changes; the agreement is terminated. Barclay’s d/b/a HomEq


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was the servicer. The change in servicing rights would not have such a profound

effect if the defendants did not intend to manipulate the servicing of the loans of

the borrowers. (ER 1396-1988)

Ms. Galope filed her action on March 1, 2012. By September, 2012 the

court had dismissed her complaint and on that same granted the defendants

summary judgment.

Barclays requested that this case be joined with the in re LIBOR cases in

New York in the MDL action. After this case was on appeal, the MDL panel found

those separate groups of investors and municipalities lacked standing to sue.

Barclays contends that although Mrs. Galope had a LIBOR Interest Rate

Loan product, she was not injured because the interest rate on her loan exceeded

the actual LIBOR interest rate which Barclays and Deutsche Bank artificially

suppressed when she was paying on her loan. She ultimately defaulted before she

could enjoy the benefits of the rate that was actually suppressed in the Wall Street

Journal.

But that only tells half of the story. It is like reading half of a book. The

other half must be read in order to put it into context. The manipulation in

conjunction with the terms of the MBS trust tell the whole story.


7

The general news media proffered that Barclays manipulated LIBOR in

order to make profits for “SWAP traders.” This MBS trust had both an interest

rate SWAP and a cap SWAP.

This means, that Barclays and DBNTC used the manipulation to make

money by betting against the homeowner.

The published LIBOR rate also had a profound effect upon the consumer.

If the court flips the page, the court will see that peddling LIBOR rate loans

to consumers like Mrs. Galope where the interest rate is initially fixed at a higher

level than actual LIBOR only demonstrate that the consumer would reasonably

expect either (1) that they could refinance at a lower rate in the near future; or (2)

they would soon be enjoying a much lower and hence affordable, loan product.

Consequently, in the reasonable consumers mind, the toxic loan would not do any

harm. (ER 2067-2099)

Here, Mrs. Galope was doomed to fail.

By the time Mrs. Galope filed her suit, less than 20% of the loans had

survived. Over 5,000 families were foreclosed on in this trust alone. Out of those

that survived, 845 of them required loan modifications (or over 90% of the

surviving loans). (ER 2119)

These are hard undisputable facts contained in the record before this court.


8

As a direct and proximate consequence, Mrs. Galope, and those similarly

situated lost money, incurred extra charges and expenses, lost title to their

property, and it was clouded by the recording of defaults which then damaged their

credit and ability to use their home as collateral for other credit purposes.

A. Article III Standing

Barclays continues to insist that although Mrs. Galope purchased a loan

based on LIBOR, she is not a direct purchaser with standing because part of the

toxic loan product required Mrs. Galope to pay an initial higher interest rate.

Consequently, in Barclays’ mind, this means she lacked standing and could not be

harmed by Barclays’ conduct. The court agreed, and it is plaintiff’s position that

this logic is flawed. Glaski v Bank of America, 2013 Cal. App. LEXIS 633 (2013).

Barclays is correct that the Mrs. Galope alleged it was unfair of Barclays to

send over a modification agreement by fax that did not contain the material terms

of the modification for the last 25 years of the life of the loan (meaning the terms

of the modification from 2013 forward). Barclays does not refute that after

litigation started, defendants initially stated the remaining 25 years were adjustable

interest rate, and then several months later, changed the remaining 25 years terms

to a lowered interest rate. Barclay’s contention is that Mrs. Galope received a

modification which lowered her interest rate so there was no injury. This ignores

the fact that when Mrs. Galope demanded the terms in 2009, Barclays answer was


9

throwing Mrs. Galope into default. The default was a concrete injury to Mrs.

Galope. In fact, Barclays then used that default to take title to Mrs. Galope’s home.

The added expense, charges, fees and interest to Mrs. Galope’s loan during this

time was an additional injury, not to mention forcing Mrs. Galope into bankruptcy.

Therefore, even accepting the allegation that Barclays eventually disclosed the

material terms to the modification in 2012, that was four years after the

modification agreement was entered into. The damages associated with that

unreasonable delay cannot be ignored.

II. ARGUMENT

A. Article III Standing Was Alleged In this Case

The District court dismissed every cause of action by way of a Motion to

Dismiss or Summary Judgment on the same grounds: that plaintiff purportedly was

not harmed by any of the Defendant’s conduct so she lacked standing.

“Federal courts have authority under the Constitution to answer such

questions only if necessary to do so in the course of deciding an actual ‘case’ or

‘controversy.’” Hollingsworth v. Perry, 133 S. Ct. 2652, 2659 (2013).

Article III standing merely means that “ for a federal court to have authority

under the Constitution to settle a dispute, the party before it must seek a remedy for

a personal and tangible harm.” Hollingsworth, 133 S. Ct. at 2659.


10

“At the pleading stage, general factual allegations of injury resulting from

the defendant's conduct may suffice, for on a motion to dismiss we "presum[e] that

general allegations embrace those specific facts that are necessary to support the

claim.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992).

Here, plaintiff’s claims were dismissed at the pleading stage.

Defendants do not argue that a favorable decision would redress plaintiff’s

injuries. Instead, defendants insist that plaintiff fails to have Article III standing

because plaintiff was not injured by defendants’ conduct. (RB 13) However,

plaintiff was not required to prove injury at this juncture, she merely needed to

allege it.

Standing under Article III usually arises in the context of a political question

because the court is concerned with usurping the rights of other branches of

government. Here, there is no such concern. Hollingsworth at 2661.

In Hollingsworth v Perry, the United States Supreme Court had to determine

whether the petitioners to the Ninth Circuit who were challenging the District

Court’s injunction prohibiting enforcement of California’s same-sex marriage ban

under Proposition 8 had Article III standing. The United States Supreme Court

found that the petitioners on appeal were interveners who were not enjoined nor

were they petitioners who were being banned from having a same-sex marriage.

Consequently, the United States Supreme Court found the appellants to lack


11

Article III standing, because their interest was only a “generalized grievance.”

Hollingsworth at 2662.

The Article III requirement that a party invoking the jurisdiction of a

federal court seek relief for a personal, particularized injury serves

vital interests going to the role of the Judiciary in our system of

separated powers. “Refusing to entertain generalized grievances

ensures that . . . courts exercise power that is judicial [***34] in

nature,” [], and ensures that the Federal Judiciary respects “the

proper—and properly limited—role of the courts in a democratic

society.” Hollingsworth at 2667 (internal citations omitted).

Mrs. Galope is certainly seeking relief for her personal and particularized

harm of excess rates, defrauded into believing she could accept the product

because she would receive a refinance, and wrongfully losing title to her home by

these defendants.

Defendant narrows Article III standing down to one allegation of financial

injury based on making “over $60,000.00 in interest payments based on

manipulat[ing] market LIBOR.” (RB 11) First, that allegation is not a generalized

grievance but a personal harm of the pocketbook. Second, plaintiff also alleged

that unfairly made money off of plaintiff (ER 659); she incurred attorney fees of

$5,600.00 (ER 664); she was forced into bankruptcy (ER 664-665); and she lost

title to her home (ER 665-666).

Article III standing is required for each cause of action pled. Plaintiff alleged

an injury in each claim:


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Violation of the Sherman Antitrust Act (Price Fixing); Breach of

Good Faith and Fair Dealing; and UCL § 17200 - she was forced to

pay interest on the LIBOR loan product “substantially higher” than

those she would have paid in the absence of these violations and she

was losing/has lost her home. (ER 672, 675, 676, 682)

FAL § 17500 - Plaintiff alleged the publication of the manipulated

lower LIBOR rate in the Wall Street Journal led plaintiff to believe

she could enter a high interest rate and refinance to a lower rate as

represented by defendant’s agents at signing. This was basically the

spider web she was lured into, and then became stuck. As a result she

faced losing her property. (ER 684-685)

Fraud - The fraud here was based on defendant’s pattern and practice

and alleged the same harm as in the preceding causes of action. (ER

689-691). Plaintiff alleged she lost the opportunity to refinance her

mortgage elsewhere when the real estate market was still thriving and

when she still had equity in her home. (ER 690) All of these

allegations of harm caused to Mrs. Galope were in addition to the

harm of making “over $60,000.00 in interest payments.” (ER 691).

As disclosed in the record, Mrs. Galope’s case has absolutely nothing to do

with using the court to attempt to usurp a political branch of government. Her


13

grievances are not generalized and it is hard to fathom how the court could drill

down to a conclusion that because Mrs. Galope never actually made a loan

payment based on LIBOR (because her payments on her LIBOR loan were higher

than the LIBOR rate advertised in the Wall Street Journal) that she lacked Article

III standing.

Moreover, Defendants fail to point to any case where a court reached a

similar result under similar facts, Instead defendants merely relied on Gest v.

Bradbury, 443 F.3d 1177, 1181 (9th Cir. 2006); Lujan, 504 U.S. at 560-61; and

DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 352 (2006) to outline the elements.

Plaintiffs do not take issue with the elements, but with the application.

The complaints Mrs. Galope alleges are similar in nature to those made by a

group of homeowners in Maya v. Centex Corp., 658 F.3d 1060, 1065 (9th Cir.

2011). In Maya v Centex Corporation, Centex Corporation and other co-

defendants devised a scheme where it represented that it was building "stable

family neighborhoods." In fact, defendants were selling homes to high risk buyers

who were more likely to default in times of economic hardship. The plaintiffs, a

group of homeowners in the neighborhood, alleged that the defendants' practices

and the resulting foreclosures reduced the economic value of their own homes.

Maya v Centex, at 1066


14

The defendants argued that the plaintiffs had failed to adequately allege

standing under Article III. Maya v Centex, at 1067.

The Ninth Circuit found the plaintiffs had pled Article III standing by

alleging that they paid more for their homes than they were worth at the time of

sale, as well as alleging that the defendants' actions caused their homes to lose

value above and beyond those losses caused by general economic conditions.

Maya v Centex, at 1069, 1071.

In a similar nature, Mrs. Galope alleged Barclays and other co-defendants

devised a scheme where it represented that the true cost to borrow money was low

as demonstrated by LIBOR being published in the Wall Street Journal. The same

defendants then represented, through their agents, that borrowers did not need to

fear entering into the LIBOR loans that were initially at a higher rate on the

grounds they could refinance at a lower level (like the ones being published in the

newspapers). In fact, defendants were selling high interest loans to borrowers who

were more likely to default in times of economic hardship while they were

artificially suppressing the true market rate that was being published in the Wall

Street Journal. Even more egregiously, the same defendant Barclays bought SWAP

agreements and bet against the homeowner, cashing out upon the homeowner’s

default of their loan that they initially borrowed. The plaintiff, Mrs. Galope, on


15

behalf of herself and those similarly situated, alleged that the defendants' practices

was a substantial factor which resulted in the foreclosures on their homes.

It makes perfect sense. There is nothing in defendant’s brief to demonstrate

Article III standing does not exist for each and every cause of action lodged against

them in this case.

B. Standing Under the UCL was Adopted from Article III

Defendants next contend that the District court dismissed plaintiff’s UCL

claims for lack of statutory standing. (RB 14)

However, California borrowed the concept of standing under the UCL from

Article III standing in federal cases. Consequently, if there is standing under

Article III, there is standing under the UCL.

As explained in Kwikset Corp. v. Superior Court, 51 Cal. 4th 310, 323

(2011), in order to have standing to pursue a UCL claim, the private party must

have suffered a monetary or property loss. In essence, they must have suffered

from some type of economic injury. The injury, however, does not have to be

substantial in order to have standing. In fact, the UCL cause of action is

commonly used in consumer class actions where a consumer has been “nickeled-

and-dimed” which would make pursuing an individual private claim too costly.

The Kwikset court confirmed that only an “identifiable trifle” of economic injury is

required. Kwikset Corp., 51 Cal. 4th at 323.


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Plaintiff alleged that she paid a higher interest, had her title clouded with a

default, paid money to an attorney to try to fix it, she finally lost title completely,

and although they rescinded the sale after litigation started, she is still facing

foreclosure and is in imminent danger of losing her home to foreclosure. During

this entire dispute, her loan is ballooning out of control due to the terms, and she is

incurring extra charges and fees, too. More than a “trifle” of loss of money and

property has been alleged, here.

C. The Issue of Statute of Limitations is Jurisdictional So It is Not

Waived

Defendants contend that the district court dismissed plaintiff’s FAL claim on

the grounds it was time barred by the statute of limitations. (RB 18). Defendants

then state that plaintiff waived her right to challenge that determination. (RB 18).

Statute of limitations is a jurisdictional issue. For example, it is an issue that

the parties cannot stipulate to. Cowan v. Superior Court, 14 Cal. 4th 367 (1996).

Jurisdictional issues are never waived and can be raised for the first time in a

reply brief. Sherman v. SEC (In re Sherman), 491 F.3d 948, 965 n.20 (9th Cir.

2007). Furthermore, this is an issue of pure law and will not prejudice the

opposing party. Columbia Steel Casting Co. v. Portland GE, 111 F.3d 1427, 1443

(9th Cir. 1996).


17

Here, the claim was not time barred because all claims were equitably tolled

while Mrs. Galope was in bankruptcy. Mrs. Galope received the fax on or about

April 17, 2008. She discovered the missing material term from the modification.

When she could not get it rectified she sought advice of counsel and ultimately

bankruptcy in January 2010.

Mrs. Galope’s claim was tolled while she was in bankruptcy. She filed an

Adversary proceeding against the banks that was dismissed without prejudice.

Approximately four months later, she went back to the bankruptcy court in July

2011. Defendants transferred title to her home. She then filed this lawsuit on

March 1, 2012.

An amended complaint relates back to the original complaint, and thus

avoids the statute of limitations as a bar, if it (1) rests on the same general set of

facts as the original complaint and (2) refers to the same accident and the same

injuries as the original complaint. Norgart v. Upjohn Co. 21 Cal.4th 383, 408-409

(1999). Here, Plaintiff originally filed her complaint and this claim in the District

court on March 1, 2012. The exact same set of facts as to the modification were

dismissed without prejudice to re-plead in state court or an Article III court due to

the US Bankruptcy court’s lack of subject matter jurisdiction so the claims relate

back to the filing date of the Adversary complaint in the U.S. Bankruptcy Court.


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"The relation-back doctrine deems a later-filed pleading to have been filed at

the time of an earlier complaint which met the applicable limitations period, thus

avoiding the bar” Quiroz v. Seventh Ave. Center 140 Cal.App.4th 1256,

1278 (2006).

Equitable tolling is a court-fashioned rule which applies in those situations

in which the statute of limitations has run on a state court claim while the plaintiff

has diligently pursued his or her remedies in an alternative forum. The doctrine is

applied "to soften the harsh impact of technical rules which might otherwise

prevent a good faith litigant from having a day in court" Addison v. State, 21 Cal.

3d 313, 316 (1978), and can be applied to prevent a forfeiture in any situation in

which the first action has failed to accomplish its purpose.

Since the federal courts look to state law in order to determine statute of

limitation, the equitable tolling rule should also be considered in a federal forum in

conjunction with the limitations statute. The California Supreme Court held

in Addison v. State of California, supra, 21 Cal.3d 313 (hereafter Addison) that the

filing of a federal district court action suspended the running of the six-month

statute of limitations within which to bring a suit against a public entity in state

court. Like the Galope case, the federal proceeding was dismissed without

prejudice to re-filing in another court. In Addison, the trial court sustained the

defendants' demurrer to the state court action because the complaint was not timely


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filed. (Addison, supra, at pp. 315-316.) The California Supreme Court reversed

that decision on the grounds that "the well-established doctrine of 'equitable

tolling'" to relieve the plaintiff of an otherwise untimely filing applied. (Addison,

supra, at p. 316.)

The Addison court stated: "courts have adhered to a general policy which

favors relieving plaintiff from the bar of a limitations statute when, possessing

several legal remedies he, reasonably and in good faith, pursues one designed to

lessen the extent of his injuries or damage. [Citations.]" (Addison, supra, 21 Cal.3d

at pp. 317-318.)

Application of the doctrine of equitable tolling requires timely notice, and

lack of prejudice, to the defendant, and reasonable and good faith conduct on the

part of the plaintiff. These elements seemingly are present here.

Finally, there is no policy reason which would require plaintiffs to file

simultaneously two separate actions in US Bankruptcy court and elsewhere since

'duplicative proceedings are surely inefficient, awkward and laborious.' (Addison,

supra, 21 Cal.3d at p. 319.) (See also, Collier v. City of Pasadena (1983) 142

Cal.App.3d 917, 924.)

On April 7, 2008 Mrs. Galope received a fax of a modification with missing

material terms. (ER 661) After that time Mrs. Galope noticed the terms were not

stated after April 1, 2013. (ER 662) Mrs. Galope hired an attorney to assist and


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defendants filed a notice of default and started to foreclose on July 31, 2009. (ER

664) On January 15, 2010, Mrs. Galope filed for bankruptcy protection to bring

the creditor of her loan to the bargaining table. (ER 665) She filed again in July

2011. (ER 665). On March 1, 2012 Mrs. Galope filed this action while she was

still in bankruptcy and this action was stayed until that bankruptcy concluded. Mrs.

Galope’s claims were equitably tolled by the bankruptcy proceeding on the

grounds she filed her action as an adversary action in the first proceeding of

January 15, 2010.

Only one year and eight months had passed at that point in time. Defendants

were not able to record another notice of default until March 8, 2011 and there was

only a four month span there in between the bankruptcy actions. Consequently,

Mrs. Galope was within the three year time period.

It was alleged that the same defendant was given notice of the claims and the

bankruptcy to gather evidence to defend against the claim at this time. There is no

argument that a borrower would in good faith seek to litigation in a bankruptcy

forum and it was reasonable to do so based on the related pending bankruptcy

proceeding . This is not the type of conduct that would make a court conclude an

unreasonable delay. The district court proceeding was promptly.


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Consequently, the court should find that equitable tolling applies and Mrs.

Galope was not prevented from maintaining a FAL claim based on the three year

statute of limitations.

D. Aiding and Abetting Was Tied to the UCL Claim

Defendants contend that the Aiding and Abetting was not tied to a tort claim

so the district court was correct in dismissing it. (RB 16).

The claim is captioned “Aiding and Abetting Violation of §17200.” (ER

685). The claim for aiding and abetting was thus “tied to” a §17200 violation in

order to survive a motion to dismiss.

Cal. Bus. & Prof. Code § 17200 (Deering) can act as the predicate claim for

aiding and abetting. Schulz v. Neovi Data Corp., 129 Cal. App. 4th 1

(2005), transferred 56 Cal Rptr 3d 471 (2007), abrogated as stated Perfect 10, Inc.

v. Visa Int'l Serv. Ass'n 494 F 3d 788 (9th

Cir. 2007) (Consumer had adequately

pleaded a cause of action against a credit card processing service for aiding and

abetting the operation of an illegal lottery by a website. The complaint alleged that

the processing service went far beyond merely processing credit cards and that it

had acted with the specific intent of aiding and abetting and facilitating the

website's illegal lottery operations); See also, .McKay v. Hageseth 2007 US Dist

LEXIS 29436 (ND Cal 2007) (motion to dismiss denied because Section 17200

liability could be based on aiding and abetting unlawful business practices, by


22

paying others to participate in a scheme to distribute dangerous drugs to patients

sans appropriate examination.)

As stated on page 43 - 44 of the opening brief, DBNTC has admitted that

some of its staff was involved in this market manipulation. (ER 2037, 2039) A

defendant need not know that the conduct was unlawful, but the defendant who has

knowledge of the conduct and assists by aiding and abetting can be held liable,

such as individual corporate officers or majority stockholders. People v. Toomey,

157 Cal. App. 3d 1 (1984).

Consequently, if the appellate panel should find that the district court’s

dismissal of the UCL claim should be reversed, the aiding and abetting claim

should be reversed, too.

E. Plaintiff Had Standing to Bring A Breach of Good Faith and Fair

Dealing Argument Claim

Defendants assert that breach of good faith and fair dealing was never

argued below, only standing. (RB 19). Their point on standing is well taken, but

not completely accurate. An accurate statement is that Defendants moved to

dismiss the good faith and fair dealing claim (and all claims in the complaint)

solely on the grounds that plaintiff lacked standing. (Appellant’s opening brief was

a brief combined with the motion for summary judgment that was granted.)


23

This does not mean that Plaintiff is prevented from disclosing cases or

regulations which demonstrate injury to the plaintiff when the defendants fail to act

in good faith or deal fairly with her.

Defendant contends that Article III standing cannot rest on a TILA-related

injury. The Ninth Circuit found that injury-in-fact for purposes of Article III

standing on the grounds the appellant suffered the loss of a statutory right under

TILA. DeMando v. Morris, 206 F.3d 1300 (9th Cir. 2000)

The deed of trust clearly states that the parties are bound by RESPA. (ER

302-320) Consequently, it is implied that defendants would comply with TILA.

However, it failed to do so by sending Mrs. Galope a modification agreement that

did not disclose the terms that were cut off from the fax. Defendants never explain

why it took three years and one lawsuit to finally disclose those terms to Mrs.

Galope.

It would be very odd if the Ninth Circuit were to find a loan servicer or

lender who refuses to disclose the material terms of a loan modification including

the amount the borrower is supposed to pay and at what interest rate that would be

at for 25 years on their loan, lacked standing on a good faith and fair dealing claim,

yet Regulation Z promulgated by the Federal Reserve Board under the Trust in

Lending Act (12 C.F.R. pt. 226 (2012) et seq) mandates such disclosure.


24

Finally Defendants assert that the only claims in the breach of good faith and

fair dealing claims are the LIBOR manipulation allegations and the missing fax

page allegations. (RB 20) The missing fax page, which ended up being a legal size

document faxed to plaintiff, hence cutting off the bottom pages of the document, is

the allegation that the defendants failed to supply Mrs. Galope with the material

terms of her loan. (ER 662-663 “Plaintiff was shocked and concerned that her

modification payments may change on April 1, 2013 contrary to what she was

promised in her phone conversations with Taheera Franklin.”...”Defendant placed

material terms of the loan on the bottom three inches of the legal size document

that were cut off through the fax transmission when it was printed out on letter size

paper”). There simply is no change as defendants suggest.

F. Fraud

Again, defendants contend that Mrs. Galope’s loan was not tied to LIBOR.

As plaintiffs demonstrated in the introduction of this brief, Plaintiffs loan was tied

to LIBOR on the front end and back end of the loan. The Note itself was a LIBOR

loan product Mrs. Galope purchased.

Second, her LIBOR loan she purchased was then transferred to a MBS trust

that was tied to LIBOR wherein the defendants could earn extra profits from its

Interest rate SWAP and its Cap SWAP so long as Mrs. Galope paid in excess of


25

the LIBOR rate published in the Wall Street Journal during the 58 distribution

periods.

Ms. Galope asserted that she would not have purchased this LIBOR loan

product if she had known that her loan servicer could manipulate that rate.

Allegations of representations from product labels and statements that, had

consumers not been deceived by the labels, they would not have purchased the

product, are sufficient to plead under Rule 9(b) in a fraud claim. Von Koenig v.

Snapple Bev. Corp., 713 F. Supp. 2d 1066, 1077-78 (E.D. Cal. 2010).

In Maya, 658 F.3d at 1071, the court found that a decrease in a home’s value

was injury-in-fact to support constitutional standing under Article III.

Defendants contend that On March 29, 2013 the United States District Court

for the Southern District of New York dismissed the plaintiff’s claims based on

antitrust violations due to lack of standing. Those four groups consisted of

investors, pension funds, municipalities and distributors. Prior to that time, the

same court found Mrs. Galope’s antitrust claims were inapposite to the other four

groups and sent Mrs. Galope’s case back to the Central District of California.

Thus, the court could infer that, Mrs. Galope, as the direct purchaser of the LIBOR

loan product was the one group who in fact, had standing. She had standing for

every reason those other groups did not. She was a direct consumer of the LIBOR

loan product that the defendants were able to manipulate throughout the entire


26

process from origination, through servicing, and default and foreclosure. As a

direct victim, she deserves for the Ninth Circuit to find that she had standing to

maintain her claims.

Lenders are not immune from suits surrounding MBS trusts. Glaski v Bank of

America, 2013 Cal. App. LEXIS 633 (2013). Plaintiff entered into the higher loan

refinance on the grounds she had the rational expectation that she could refinance

at a better rate on the grounds the market industry rate of LIBOR was lower.

“Except in the rare case where the undisputed facts leave no room for a reasonable

difference of opinion, the question of whether the plaintiff’s reliance is reasonable

is a question of fact.’ “Alliance Mortgage Co. v. Rothwell, 10 Cal. 4th 1226, 1239

(1995). See also, West v JPMorgan Chase Bank, N.A. 214 CalApp4th 780 (2013)

III. CONCLUSION

For the foregoing reasons, the district court’s ruling dismissing the case

should be reversed and appellant should be awarded costs.



/s/ Lenore Albert___________________




similarly situated


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STATEMENT OF RELATED CASES

Plaintiffs/Appellants are not aware of the following cases pending in this

Court that would be deemed related pursuant to Ninth Circuit Rule 28-2.6.



/s/ Lenore Albert___________________




similarly situated


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CERTIFICATE OF WORD COUNT

I certify that this brief complies with enlargement of brief size permitted by

the Ninth Circuit Rule 28-4. The brief’s type size and type face comply with Fed

Rule of Civ Proc 32(a)(5) and (6). This brief has 5,899 words including this

Certificate and excluding the portions exempted by the Fed. R. App. P.

32(a)(7)(B)(iii), if applicable.



/s/ Lenore Albert___________________

LENORE L. ALBERT, Esq.




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PROOF OF SERVICE

STATE OF CALIFORNIA, COUNTY OF ORANGE:

I declare that I am over the age of 18 years, and not a party to the within action;

that I am employed in Orange County, California; my business address is 7755

Center Avenue Suite #1100, Huntington Beach, CA 92647.

On August 14, 2013, I served a copy of the following document(s) described as:

APPELLANTS’ REPLY BRIEF TO BARCLAYS BANK PLC AND

BARCLAYS CAPTIAL REAL ESTATE INC. D/B/A HOMEQ SERVICING

ANSWERING BRIEF

on the interested parties in this action as follows:

See attached Mail List

[ ] BY OVERNIGHT MAIL – I caused such document(s) to be placed in pre-

addressed envelope(s) with postage thereon fully prepaid and sealed, to be

deposited as Express/Priority Mail for next day delivery at Westminster,

California, to the aforementioned addressee(s).

[x] BY CM/ECF – I caused such document(s) to be transmitted to the office(s) of

the addressee(s) listed above by electronic mail at the e-mail address(es) set forth

pursuant to FRCP 5(d)(1).

[ ] BY EMAIL – I caused such document(s) to be transmitted to the office(s) of

the addressee(s) listed above by email at the e-mail address(es) set forth pursuant

to agreement between counsel.

[ ] BY FAX – I caused such document(s) to be transmitted facsimile from the

offices located in Westminster, California this business day to the aforementioned

recipients.

I declare under penalty of perjury under the laws of the State of California

and the United States of America that the foregoing is true and correct.

Dated: August 14, 2013

/s/ Lenore Albert__________________

Lenore Albert


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Mailing List

For Defendant Western Progressive, LLC; Defendant Ocwen Loan Servicing, LLC

and

Defendant Deutsche Bank National Trust Company:

Robert Norman, Esq.

Brent Kramer, Esq.

HOUSER & ALLISON

3780 Kilroy Airport Way, Suite 260

Long Beach, CA 90806

Telephone: (562) 256-1675

Fax: (562) 256-1685



For Defendant BARCLAYS BANK, PLC; BARCLAYS CAPITAL REAL

ESTATE INC. d/b/a HOMEQ SERVICING:

Scott H. Jacobs (SBN 81980)

[email protected]

Brandon W. Corbridge (SBN 244934)

[email protected]

Margaret Anne Grignon (SBN 76621)

[email protected]

REED SMITH LLP

355 South Grand Avenue, Suite 2900


Tel: (213) 457-8000

Fax: (213) 457-8080

James Meadows

[email protected]

Jonathan D. Schiller

[email protected]

Boies, Schiller & Flexner LLP

575 Lexington Avenue, 7th Floor

New York, NY 10022

Tel: (212) 446-2300


mailto:[email protected]

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Fax: (212) 446-2350

David H. Braff

[email protected]

Yvonne S. Quinn

[email protected]

Jeffrey T. Scott

[email protected]

Matthew S. Fitzwater

[email protected]

Adam S. Paris

Parisasullcrom.com

Sullivan & Cromwell LLP

125 Broad Street

New York, NY 10004

Tel: (212) 558-4705

Fax: (212) 558-3588

Hon. Cormac J. Carney

United States District Court

Central District of California

411 W. Fourth Street, #1053

Santa Ana, CA 92701-4518

Attorney General’s Office:

Appellate Coordinator

Office of the Attorney General

Consumer Law Section

300 S. Spring Street



the helen galope 9th circuit filed appellant reply brief case 12-56892

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