Discussions on Glaski vs Bank of America

Rules for Pleading Fraud

  • Deception
  • Knowledge of the untruth or scienter
  • Intent to defraud—that is, induce reliance
  • Reasonable reliance
  • Consequent damages are the elements of a fraud cause of action.

Fraud must be pled precisely, which means a plaintiff must allege facts that establish the elements of the cause of action in detail.

Defendants argued in their demurrer that facts indicating harmful reliance were not alleged.

First Cause of Action for Fraud, Lack of Specific Allegations of Reliance

Glaski’s first claim, based on fraudulent documents, claims that the defendants’ actions “led Plaintiff to rely on the recorded documents and ultimately lose the property that served as his principal residence, as well as cause Plaintiff more loss, proof of which will be produced at trial.”

This is a broad charge of reliance and harm. It doesn’t say what actions Glaski took as a result of the suspected forgeries. Similarly, because of his dependence on the alleged forgeries, it does not identify any actions that Glaski did not conduct. As a result, we decide that Glaski’s conclusory charge of reliance is insufficient under the norms of law, which require specific allegations of fraud.

The next point is whether the trial court abused its authority by upholding the demurrer to the first fraud cause of action without allowing the plaintiff to amend his complaint.

When deciding on the defendants’ request for judgment on the pleadings in March 2011, the trial court granted Glaski leave to amend. Glaski’s complaint had jumbled together numerous distinct statutes and theories of responsibility, according to the court, and Glaski was advised to avoid “chain letter” assertions in his amended filing.

Glaski’s first revised complaint included two fraud causes of action that were comparable to the SAC’s.

The first revised lawsuit was met with denials from the defendants. “Plaintiff is instructed for the last time to allege each cause of action such that just the essential components of the claim are set forth without reincorporation of long ‘general allegations,'” the trial court’s minute order adds. In other words, the “facts” that must be pleaded are the ones that determine culpability (i.e., “the facts creating the cause of action”).

Defendants submitted a demurrer after Glaski filed his SAC. Glaski responded with an opposition, claiming that he had adequately alleged detrimental reliance. He did not contend that he could amend his complaint to specifically identify the action he took or did not take as a result of his reliance on the alleged forgeries.

As a result, Glaski failed to meet his burden of proving he could establish the components of justified reliance and damages stemming from that reliance with sufficient precision. As a result, we believe that the trial court did not abuse its discretion in denying the SAC’s first cause of action for fraud leave to amend.

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Second Fraud Cause of Action, Lack of Specific Allegations of Reliance

WaMu neglected to transfer Glaski’s note and deed of trust into the WaMu Securitized Trust in 2005, according to his second cause of action for fraud. Glaski further claimed that the defendants intended to make up for WaMu’s failure by defrauding him by assigning his note and deed of trust to the WaMu Securitized Trust. The strategy was implemented in 2008 and 2009 with the goal of allowing defendants to foreclose on the property fraudulently.

The second cause of action for fraud alleges detrimental reliance in the following sentence: “Defendants, and each of them, also knew that the act of recording the Assignment of Deed of Trust without the authorization to do so would cause Plaintiff to rely on Defendants’ actions by attempting to negotiate a loan modification with representatives of Chase Home Finance, LLC, agents of Defendants by attempting to negotiate a loan modification with representatives of Chase Home Finance, LLC, agents of Defendants by attempting to The assignment cited in this accusation is the deed of trust assignment recorded in June 2009; no other deed of trust assignment is referenced in the second cause of action.

The claim of reliance does not hold up to scrutiny. After the trustee’s sale of the Property, the act of documenting the allegedly fraudulent assignment took place in June 2009. If Glaski was persuaded to arrange a loan modification at the time, it’s unclear how subsequent conversations after the trustee’s sale in May 2009 could have swayed him from stopping the sale. As a result, Glaski’s claim of reliance is unrelated to any loss or injury.

We hold that the trial court did not misuse its discretion in refusing Glaski leave to amend the second cause of action in the SAC because he has not indicated how this deficiency in his fraud accusations may be remedied by modification.


Glaski’s Request for Judicial Notice

Glaski also requested judicial notice of

  1. Consent Judgment entered on April 4, 2012, by the United States District Court for the District of Columbia in the United States v. Bank of America Corp. (D.D.C. No. 12–CV–00361);
  2. The Settlement Term Sheet attached to the Consent Judgment;
  3. The federal and state release documents attached to the Consent Judgment when he filed his opening brief.

Defendants objected to the request for judicial notice because it was not filed with a separate proposed order, did not state why the matter to be noticed was relevant to the appeal and did not state whether the matters were submitted to the trial court and, if so, whether that court took judicial notice.

The documents included in Glaski’s request for court notice could provide background information and insight into robo-signing 18 and other issues that the lending sector has experienced with foreclosure procedures. These papers, however, have no bearing on whether the claims in the SAC are adequate to form a claim. As a result, we refuse Glaski’s court notice request.

Defendants’ Request for Judicial Notice of Assignment

The “ASSIGNMENT OF DEED OF TRUST,” which stated that JP Morgan transferred and assigned all beneficial interest under the Glaski deed of trust to “LaSalle Bank NA as trustee for WaMu [Securitized Trust]” along with the note described in and secured by the Glaski deed of trust, was not attached to the SAC as an exhibit. The defendants’ request for judicial notice, filed in June 2011 to support a move for judgment on the pleadings, is included in the respondents’ appendix, which is part of the appellate record.

The trial court ruled in its judgment on the defendants’ request for judicial notice that it could only take judicial notice of the fact that certain documents in the request, such as the assignment of deed of trust, had been registered, but not of the factual items indicated in those papers. This decision is accurate and will not be overturned on appeal. As a result, we will take judicial notice of the presence and recording of the December 2008 assignment, but we will not “take notice of the truth of items contained therein,” as the trial court did. As a result, the assignment of deed of trust does not prove that JP Morgan was the beneficial owner of the Glaski deed of trust that was transferred to LaSalle Bank, as stated in the assignment. It also doesn’t prove that LaSalle Bank actually became the owner or holder of the beneficial interest.

The document does not cure any of the breakdowns in the two alternate chains of ownership contested in the SAC because it does not prove these facts for the purposes of this demurrer. As a result, the December 2008 assignment is insufficient to sustain the demurrer.

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