LPS seeks dismissal of Nev. AG's robo-signing lawsuit

John O'Brien Jan. 31, 2012, 12:50pm


LAS VEGAS (Legal Newsline) - Lender Processing Services is asking a Nevada judge to dismiss the robo-signing lawsuit filed against it by Nevada Attorney General Catherine Cortez Masto.

The company on Tuesday filed a motion to dismiss the lawsuit, citing on a long list of what it says are defects in the complaint. The lawsuit says the company engaged in a pattern and practice of forging, falsifying and fraudulently executing foreclosure-related documents.

"Although we have to defend ourselves against allegations that we believe are untrue, we remain committed to working with the Attorney General's Office to resolve these matters," LPS CEO Hugh Harris said.

LPS previously said it cooperated with Masto's investigation for 14 months, but its efforts were frustrated when she decided to hire Washington, D.C., plaintiffs firm Cohen Milstein Sellers & Toll to pursue the case.

Masto says the actions of LPS resulted in countless foreclosures that were predicated upon incomplete documentation and fraudulently notarized documents. Those documents were notarized without making sure that the notary did so in the presence of the person who was signing the document and made it a requirement that employees execute and/or notarize up to 4,000 foreclosure-related documents every day, Masto says.

In addition, the lawsuit alleges that LPS implemented a pervasive scheme to forge signatures on key documents, to make certain that speed and volume quotas were met and improperly controlled and/or directed the work of foreclosure attorneys by imposing arbitrary and inappropriate deadlines that forced attorneys to work through foreclosures at a rate that sacrificed accuracy for speed.

LPS said Masto's complaint failed to allege that it engaged in the sale of goods and services, and therefore fails to state a claim for relief.

"Conspicuously absent from Plaintiff's allegations is any contention that the contents of the documents were false," LPS added. "Rather, Plaintiff's sole allegation is that the documents contain defects intheir execution.

"Notwithstanding defects in execution, recorded documents affecting real property are effective as to the parties to such documents, and, in the case of assignments, the affected parties are the assignor and assignee. Accordingly, borrowers are neither parties to an assignment nor third-party beneficiaries, and, therefore, as a matter of law cannot be harmed by any defects in execution, particularly in the absence of any allegation that such borrowers were not in default."

Cited is a Georgia decision that held the person signing a grantor's name is not deemed an agent but is instead regarded as a mere instrument of the grantor - "Plaintiff's repeated references that surrogate signing is forgery are nothing more than misguided legal conclusions and inflammatory rhetoric," the company said.

Two assistant attorneys general in Florida who called referred to such documents as "forgery" were fired, the motion says. It is a reference to the story of June Clarkson and Theresa Edwards, whose firings were investigated by the state's chief financial officer.

State lawmakers claimed the two were fired during successful mortgage fraud litigation because Joe Jacquot had quit his job as special counsel to AG Pam Bondi's office to become senior vice president of LPS. State CFO Jeff Atwater said that wasn't the case.

From Legal Newsline: Reach John O'Brien by e-mail at obrienwv@gmail.com.

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