Sullivan v. Washington Mutual Bank FA et al

Filing 92

ORDER DIRECTING COUNSEL TO APPEAR IN PERSON AT CMC ON 8/24/12 at 11:30 am. Signed by Judge Edward M. Chen on 8/22/12. (bpf, COURT STAFF) (Filed on 8/22/2012)

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Brian McCauley (CA Bar No. 66762)
[e-mail]
J. BRIAN McCAULEY, Prof. Corp.
425 California Street, Suite 1700
San Francisco, CA 94104
Tel: [phone]
Fax: [phone]
Attorneys for Plaintiff
Katy Sullivan, aka Katy Marie Sullivan

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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KATY SULLIVAN, also known as KATY
MARIE SULLIVAN,

CASE NO.: CV 09-2161 EMC
CASE MANAGEMENT STATEMENT

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Plaintiff,
Court Conference Call:
August 24, 2012; 11:30 a.m.

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v.

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WASHINGTON MUTUAL BANK, FA, JP
MORGAN CHASE BANK, National
Association,
BANK OF AMERICA, National Association,
LASALLE BANK, National Association
CALIFORNIA RECONVEYANCE
COMPANY; and Does 1 through 50, inclusive,

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Trial Date:

None

Action Filed: April 22, 2009
California Superior Court, San Francisco
Case No.: CGC 09-487634

Defendants.
ORDER DIRECTING PARTIES TO
APPEAR IN PERSON

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TO THE CLERK OF THE ABOVE-ENTITLED COURT:

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Plaintiff Katy Sullivan (“Plaintiff”) hereby submits this Case Management Statement in

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preparation for the Court’s conference call on the status of a pending real estate sale, currently set for

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Friday, August 24, 2012.

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1.

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Jurisdiction and Service
Plaintiff has named the following as defendants: WASHINGTON MUTUAL BANK, FA,

JPMORGAN CHASE BANK, National Association, BANK OF AMERICA, National Association,

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LASALLE BANK, National Association, CALIFORNIA RECONVEYANCE COMPANY; and

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Does 1 through 50, inclusive.

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This court has jurisdiction, because Plaintiff, in the initial complaint, alleges violations of the

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Federal Truth in Lending Act (“TILA”). See, Complaint.

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2.

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Status of the Case and Changes Since Previous Joint Statement:
Plaintiff seeks statutory damages under TILA, as well as general damages. Plaintiff also

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seeks rescission under TILA. According to Plaintiff, Defendants failed to make certain disclosures

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required under the TILA at the time the subject loan was issued to Plaintiff.

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that Defendants falsely represented the nature of the loan. Defendants deny these allegations and

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contend that they did not participate in the lending process which is the subject of Plaintiff’s legal

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action.

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B.

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Plaintiff also contends

Disclosures:
The parties have provided initial disclosures.

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D.

Discovery:

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The Parties have accomplished only very limited discovery, which is currently stayed

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pending efforts to sell half of the real estate in question and settle remaining issues; both parties plan

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to conduct substantial discovery in the event that the settlement efforts are not successful, including

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depositions of witnesses for both sides.

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D.

Settlement and ADR:

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This action has attempted sale of one of the two condominium units which are the

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subject of this Truth in Lending case, in order to reduce the existing loan and thereafter settle the

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remaining issues by setting of reduced principal balance and/or modified terms thereon. The Parties

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mediated this initially during December, 2009, but were unsuccessful. The mediating Defendants

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requested further information from Plaintiff regarding financial and income matters (including 3 or 4

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“short sale packages”); such were supplied. Over the past fifteen months, some five (5) offers for

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the property have been received, with several financial packages being provided by Plaintiff to

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Defendants’ counsel. During that same period, at least five (5) appraisals of the unit sought to be

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sold have been engaged, inspections performed and believed completed. The market value of the

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condominium unit for sale is believed to be at $500,000, although $515,000 or even $525,000 may

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be attainable if a buyer had any confidence that a “short sale” approval would be forthcoming.

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Defendants have not yet approved (or disapproved) a sale, notwithstanding the fact that all net

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proceeds of the sale are to be paid to them; they have requested documents, appraisals, and estimated

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settlement statements. Plaintiff has not conditioned her sale on any terms for payment of the

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remaining, contended balance after the sale of the first condominium, or otherwise obstructed the

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sale and payment of proceeds to defendants. For this latest offer, Defendants requested a “short sale

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package”, which request was made on Friday, June 22. Plaintiff provided the completed package on

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Monday, June 25. Further appraisal efforts occurred during the week just prior to the most recent

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CMC appearance in this Court. Defendants were provided with an estimated escrow settlement

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statement; Defendants requested that it instead be provided on a HUD-1 form, which was done.

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The purchasers for this latest offer advised that if the approval was not obtained by the date

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of the most recent CMC, that their offer would likely be withdrawn. Unfortunately, that indeed

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happened; Buyer has withdrawn their offer within the past few days.

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Defendants’ counsel has, during the morning of filing this Statement, advised that defendants

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have two issues on which to confer and agree before an approval – whether to credit the sale

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proceeds against loan principal (it is believed that defendants would likely consent to crediting

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principal), and to confirm that an existing, junior “equity line” deed of trust (“HELOC”) can be

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simply shifted over to the remaining condominium. Plaintiff, for her part, indeed prefers that the

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proceeds of this sale be applied to principal and also believes that the HELOC (also made by one of

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the defendants) be shifted onto just the remaining condominium after sale; she has kept that HELOC

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current throughout this litigation.

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Plaintiff is informed that if a “short sale” of $500,000, or even $515,000 or $525,000 is pre-

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approved, the property will very likely receive an offer and close. The simple hurdle to closing the

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sale and achieving a partial paydown, with remaining security for resulting, remaining balance

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(albeit probably inadequate to cover defendants’ contended balance) is now that the property has

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been on the market for over a year and there has at no time been adherence to any firm, reasonable

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time to review and comment, much less approve.

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This CMC Statement is submitted by Plaintiff’s counsel after receiving the above-mentioned

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response from Defendants’ counsel this morning, which detailed the two remaining issues for his

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clients. Defendants’ counsel also advised that he is involved with several ongoing trial efforts and

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thus has been seriously pressured. Any statement made in this Statement is made without any

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implication that Defendants are in complete agreement with its contents, although it correctly relates

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the undersigned counsel’s understanding of the state of this matter.

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Plaintiff respectfully suggests that the settlement conference currently set for September

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2012 be retained; the upcoming conference call is requested to consider Defendants’ position on

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these issues and some means of getting a prompt response from Defendants unless the same isn’t

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available at that time.

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Respectfully submitted,

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DATED: August 21, 2012

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By: /s/ J. Brian McCauley
J. BRIAN MCCAULEY, ESQ..
Attorneys for Plaintiff,
KATY SULLIVAN

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___________________DISTRIC
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Edward M. Chen T
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U.S. District Judge

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IT IS SO ORDERED that counsel are ordered to appear IN PERSON at the Further
CMC on 8/24/12 at 11:30 a.m.

UNIT
ED

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