Page 1 of 2 1 2 LastLast
Results 1 to 10 of 14
  1. #1
    Join Date
    Apr 2014
    Posts
    6

    Default Sued for Participation in a Fraudulent Conveyance of Real Estate

    My question involves real estate located in the State of: California

    I am posting this on behalf of my girlfriend who is in a bit of a pickle. Here is the synopsis of the problem:

    4 years ago my GF was living with her mom, she was in her late 20s. Under a lot of duress from her mom who told her that all she wanted to do was transfer title to her because she had bad credit she signed a document. This document was also notarized. Now fast forward to current and she is being named on a lawsuit along with her mom, the bank, the loan servicer, the notary and others (simply listed on the lawsuit as "DOES 1-50", by DOES I am inferring it to mean John Does as it says "yet to be identified individuals"). Apparently this was some sort of refinancing scam that her mom was part of.

    After some research by me I have found out the nature of this scam. It is pretty much this one: http://www.vuwriter.com/vubulletins....24485700000000
    except for the last step: the current homeowner bought the property for cash so there is no title insurance so that is why he is initiating the lawsuit.

    What happened was that her mom I believe owed some money on her home (perhaps a HELOC not exactly sure), then some scam outfit promised to get rid of her HELOC for a fee, she fell for it and as part of that scam a fraudulent reconveyance document was signed by my girlfriend as a "representative of the bank" affirming that the property is unencumbered.

    I believe this document was filed with the county recorder and now the property became free and clear to be sold. It was sold and the mother got some money, her outstanding amount "forgiven" and perhaps the scam organization pocketed something as well. So, this property apparently was sold multiple times, to an LLC etc. just as described in the scam above.

    Now, the last purchasers of the property (the current owners) are the ones that are filing the suit. They bought the property for cash and shortly thereafter received a notice of default since the original outstanding amount was never cleared to begin with (since the document was fraudulent).

    So, here is the issue. My GF has filed a response to the suit but needs some advice on the following:

    - what is her financial culpability in this? She did not financially benefit from this at all and there is no evidence whatsoever that she received any funds. Her mother is a beneficiary of some funds.

    - The suit is for the amount of money owed to the bank ($60,000), plus lawyers fees, plus punitive damages. Since there are a large number of people named on the suit, can my GF somehow be held responsible for the entire amount if the others can't pay? That does not seem right to me since if a negative decision is made on the suit then all the people named should be equally culpable.

    Thanks for any feedback!

  2. #2
    Join Date
    Sep 2011
    Location
    OH10
    Posts
    17,019

    Default Re: Sued for Fraud

    It sounds like her liability is more criminal than financial unless she was a titled owner.

  3. #3
    Join Date
    Apr 2014
    Posts
    6

    Default Re: Sued for Fraud

    I see how there could be criminal liability but this is a civil case so it's mostly monetary. A few lawyers have said that for criminal liability a criminal complaint has to be filed by the state and it's very unlikely that the state is going to expend effort to go after someone who misrepresented 1 document and otherwise is of extremely good moral character etc. My GF has no prior history of anything and is gainfully employed so it's definitely a one off incident and not a big enough case to pursue. She was not the titled owner, her mom was.

    Basically what my GF did was ridiculously stupid under duress to sign a document she didn't even understand herself, her mom badgered her and she trusted her mom.. but of course that is not exactly a defense...

  4. #4
    Join Date
    Sep 2013
    Posts
    833

    Default Re: Sued for Fraud

    1430. An obligation imposed upon several persons, or a right
    created in favor of several persons, may be:
    1. Joint;
    2. Several; or,
    3. Joint and several.



    1431. Joint Liability
    An obligation imposed upon several persons, or a right created in
    favor of several persons, is presumed to be joint, and not several,
    except as provided in Section 1431.2, and except in the special cases
    mentioned in the title on the interpretation of contracts. This
    presumption, in the case of a right, can be overcome only by express
    words to the contrary.


    1431.1. Findings and Declaration of Purpose
    The People of the State of California find and declare as follows:
    a) The legal doctrine of joint and several liability, also known
    as "the deep pocket rule", has resulted in a system of inequity and
    injustice that has threatened financial bankruptcy of local
    governments, other public agencies, private individuals and
    businesses and has resulted in higher prices for goods and services
    to the public and in higher taxes to the taxpayers.
    b) Some governmental and private defendants are perceived to have
    substantial financial resources or insurance coverage and have thus
    been included in lawsuits even though there was little or no basis
    for finding them at fault. Under joint and several liability, if they
    are found to share even a fraction of the fault, they often are held
    financially liable for all the damage. The People--taxpayers and
    consumers alike--ultimately pay for these lawsuits in the form of
    higher taxes, higher prices and higher insurance premiums.
    c) Local governments have been forced to curtail some essential
    police, fire and other protections because of the soaring costs of
    lawsuits and insurance premiums.
    Therefore, the People of the State of California declare that to
    remedy these inequities, defendants in tort actions shall be held
    financially liable in closer proportion to their degree of fault. To
    treat them differently is unfair and inequitable.
    The People of the State of California further declare that reforms
    in the liability laws in tort actions are necessary and proper to
    avoid catastrophic economic consequences for state and local
    governmental bodies as well as private individuals and businesses.




    1431.2. Several Liability for Non-economic Damages
    (a) In any action for personal injury, property damage, or
    wrongful death, based upon principles of comparative fault, the
    liability of each defendant for non-economic damages shall be several
    only and shall not be joint. Each defendant shall be liable only for
    the amount of non-economic damages allocated to that defendant in
    direct proportion to that defendant's percentage of fault, and a
    separate judgment shall be rendered against that defendant for that
    amount.
    (b) (1) For purposes of this section, the term "economic damages"
    means objectively verifiable monetary losses including medical
    expenses, loss of earnings, burial costs, loss of use of property,
    costs of repair or replacement, costs of obtaining substitute
    domestic services, loss of employment and loss of business or
    employment opportunities.
    (2) For the purposes of this section, the term "non-economic
    damages" means subjective, non-monetary losses including, but not
    limited to, pain, suffering, inconvenience, mental suffering,
    emotional distress, loss of society and companionship, loss of
    consortium, injury to reputation and humiliation.



    1431.3. Nothing contained in this measure is intended, in any way,
    to alter the law of immunity.



    1431.4. Amendment or Repeal of Measure.
    This measure may be amended or repealed by either of the
    procedures set forth in this section. If any portion of subsection
    (a) is declared invalid, then subsection (b) shall be the exclusive
    means of amending or repealing this measure.
    (a) This measure may be amended to further its purposes by
    statute, passed in each house by rollcall vote entered in the
    journal, two-thirds of the membership concurring and signed by the
    Governor, if at least 20 days prior to passage in each house the bill
    in its final form has been delivered to the Secretary of State for
    distribution to the news media.
    (b) This measure may be amended or repealed by a statute that
    becomes effective only when approved by the electors.



    1431.5. Severability.
    If any provision of this measure, or the application of any such
    provision to any person or circumstances, shall be held invalid, the
    remainder of this measure to the extent it can be given effect, or
    the application of such provision to persons or circumstances other
    than those as to which it is held invalid, shall not be affected
    thereby, and to this end the provisions of this measure are
    severable.



    1432. Except as provided in Section 877 of the Code of Civil
    Procedure, a party to a joint, or joint and several obligation, who
    satisfies more than his share of the claim against all, may require a
    proportionate contribution from all the parties joined with him.

  5. #5
    Join Date
    Jan 2006
    Posts
    38,534

    Default Re: Sued for Participation in a Fraudulent Conveyance of Real Estate

    After some research by me I have found out the nature of this scam. It is pretty much this one: http://www.vuwriter.com/vubulletins....24485700000000
    except for the last step: the current homeowner bought the property for cash so there is no title insurance so that is why he is initiating the lawsuit.
    purchasing for cash or credit has no bearing on purchasing title insurance. Title insurance is title insurance. It has nothing to do with whether money is borrowed to purchase the property.


    I purchase title insurance on properties I pay with cash.


    What happened was that her mom I believe owed some money on her home (perhaps a HELOC not exactly sure), then some scam outfit promised to get rid of her HELOC for a fee, she fell for it and as part of that scam a fraudulent reconveyance document was signed by my girlfriend as a "representative of the bank" affirming that the property is unencumbered.
    ya, really dumb, unless she was a representative of the bank.

    she better hope this ends at a civil matter. What she did is criminal fraud.



    - what is her financial culpability in this?
    culpability or liability? She is culpable as it was her act of fraud that allowed the scam to move forward. She may be held liable for a lot of money. (all that is sought)

    She did not financially benefit from this at all and there is no evidence whatsoever that she received any funds.
    doesn't alter much of anything

    - The suit is for the amount of money owed to the bank ($60,000), plus lawyers fees, plus punitive damages. Since there are a large number of people named on the suit, can my GF somehow be held responsible for the entire amount if the others can't pay?
    yes and I feel she should rightfully be held liable for the entire amount. It was her single action that allowed everything else to proceed.

    That does not seem right to me since if a negative decision is made on the suit then all the people named should be equally culpable.
    they will likely be but since the judgement is likely to be ordered such that each individual is liable for the entire amount. It's called joint and several liability./

  6. #6
    Join Date
    Apr 2014
    Posts
    6

    Default Re: Sued for Participation in a Fraudulent Conveyance of Real Estate

    I understand your response jk and I also know that it was her signature that caused harm to others but there is also something to say about deliberate intent...in this case there was none. She was tricked into signing the document by her mom. She did not know she was signing as a representative of a bank or committing fraud. Yes, ignorance is not a defense but the way she read the document reaffirmed what her mom told her - that she was putting her name on the trust which she thought was joint ownership of the property. I can sort of see how the document is a little confusing for someone who is less financially sophisticated...again, totally dumb move to sign something without asking a ton of questions and thoroughly investigating the document, however she never imagined her mom would con her.

    In any case, we are trying to figure out what the consequences of this is going to be. I heard most civil matters are settled before they go to trial so we are trying to pressure her mom to cough up some dough to put this matter to rest.

    On another note, can there be a payout from Fidelity title insurance? I believe they insured some of the transactions and there was no due diligence done by them. Wasn't it their responsibility to validate liens directly with the banks? A simple call to the bank would've shown that the reconveyence was false.

  7. #7
    Join Date
    Jan 2006
    Posts
    38,534

    Default Re: Sued for Participation in a Fraudulent Conveyance of Real Estate

    She did not know she was signing as a representative of a bank or committing fraud.
    What did she sign that allowed her to not know she was signing as a person she was not? Seriously. I understand being duped but just what sort of document would she have signed as herself that somehow turned into her being listed as a bank rep?


    In any case, we are trying to figure out what the consequences of this is going to be.
    up to the total amount sued for.

    I heard most civil matters are settled before they go to trial so we are trying to pressure her mom to cough up some dough to put this matter to rest.
    it's up to the plaintiff. If they will settle for less, then they do, as long as somebody is willing to put up the money. One huge problem is often present: who has the money being sought in the suit setting in their bank account?

    On another note, can there be a payout from Fidelity title insurance?
    I thought you said the plaintiff has no title insurance. Just where does Fidelity title come into play?

    Beyond that, if the title insurance paid out for something like this, they would likely sue your wife, her mother, and the whole gang themselves.

  8. #8
    Join Date
    Sep 2013
    Posts
    833

    Default Re: Sued for Participation in a Fraudulent Conveyance of Real Estate

    Quote Quoting trident777
    View Post
    I understand your response jk and I also know that it was her signature that caused harm to others but there is also something to say about deliberate intent...in this case there was none. She was tricked into signing the document by her mom. She did not know she was signing as a representative of a bank or committing fraud. Yes, ignorance is not a defense but the way she read the document reaffirmed what her mom told her - that she was putting her name on the trust which she thought was joint ownership of the property. I can sort of see how the document is a little confusing for someone who is less financially sophisticated...again, totally dumb move to sign something without asking a ton of questions and thoroughly investigating the document, however she never imagined her mom would con her.
    True ignorance here IS a defense as fraud requires an intent to defraud. This is not an ignorance of the law issue, but one of the intent required to be proven. However, the circumstances will more than prove the requisite intent. Having a defendant get out of intent issues with surrounding facts like this would require a LOT more than an "I did not know what I was doing." There would need to be documents and other evidence to prove she was duped.

    In any case, we are trying to figure out what the consequences of this is going to be. I heard most civil matters are settled before they go to trial so we are trying to pressure her mom to cough up some dough to put this matter to rest.
    Joint responsibility for the economic loss and several liability (based on percentage harm caused) for punitive and non-economic damages. Joint means she is completely liable herself with all the others and several means she is only responsible for her portion. If they collect from her under joint, she can sue the others for contribution for any amount paid beyond her own percentage responsibility.

    On another note, can there be a payout from Fidelity title insurance? I believe they insured some of the transactions and there was no due diligence done by them. Wasn't it their responsibility to validate liens directly with the banks? A simple call to the bank would've shown that the reconveyence was false.
    Even if the insurance paid, they would have subrogation rights to sue girlfriend. Nothing gets better if insurance pays.

  9. #9
    Join Date
    Apr 2014
    Posts
    6

    Default Re: Sued for Participation in a Fraudulent Conveyance of Real Estate

    question - if everyone named on the lawsuit has joint responsibility for the dollar amount being sued for then how is one person liable for the whole thing? If one person is liable for the full amount then it explicitly implies that the others are absolved and go scott free. That does not sound right to me. Why aren't others paying towards the amount as well? I guess I don't understand how this works... is it a case of some people on the lawsuit simply shrugging their shoulders and saying they have no money and then the next person is targeted? Or is it upto the plaintiff to figure out who they are going to go after to collect? Or is this determined by the judge?

    Another question - if my GF files bankruptcy then can she dismiss a judgement against her as well? Once a judgement is dismissed in BK can she be sued for the same thing again? I am guessing not?

  10. #10
    Join Date
    Jan 2006
    Posts
    38,534

    Default Re: Sued for Participation in a Fraudulent Conveyance of Real Estate

    trident777;798654]question - if everyone named on the lawsuit has joint responsibility for the dollar amount being sued for then how is one person liable for the whole thing?
    it's called joint and several liability. The aggrieved party can sue any or all parties that would have liability or any combination of them. They would get a judgment that is enforceable against any or all of them with each being liable for the total amount but cumulative from all of them no more than the total.

    The judgment creditor can seek enforcement against anyone he believes has a dollar to take.



    Another question - if my GF files bankruptcy then can she dismiss a judgement against her as well? Once a judgement is dismissed in BK can she be sued for the same thing again? I am guessing not?
    BK is not available in some cases. Given this was a matter of fraud, it may not be available. That is something her BK attorney would have to address.

    1. Sponsored Links
       

Page 1 of 2 1 2 LastLast

Similar Threads

  1. Conveyance of Real Estate Possibly Based on Revoked Power of Attorney
    By Cosmic Zamboni in forum Real Estate Ownership and Title
    Replies: 5
    Last Post: 06-24-2011, 11:41 AM
  2. Business Disputes: May Get Sued on Real Estate Deal Gone Wrong
    By George1971 in forum Business Law
    Replies: 2
    Last Post: 03-01-2011, 10:07 AM
  3. Agents and Brokers: Can I Be Sued by My Real Estate Agent for Commission
    By gabound1956 in forum Buying, Selling and Conveying Real Estate
    Replies: 2
    Last Post: 11-18-2010, 08:07 AM
  4. Fraudulent Conveyance
    By ktm rider in forum Civil Procedure
    Replies: 1
    Last Post: 01-23-2010, 10:29 AM
  5. Mortgages: Fraudulent Real Estate Documents
    By justin10 in forum Buying, Selling and Conveying Real Estate
    Replies: 6
    Last Post: 01-03-2009, 05:30 AM
 
 
Sponsored Links

Legal Help, Information and Resources