New Tactic of Suing Lawyers Defending Homeowners Not Brilliant Strategy

Nationwide Title Clearing, the company that brought us three widely publicized depositions of employees describing an assembly line process of signing assignments and affidavits, is now suing Matt Weidner, Florida foreclosure defense attorney, claiming they were defamed by his characterization of the signers as being robotic.  Pssst, NTC, remember this thing called the First Amendment?  Opinion isn’t a statement of fact? And that truth is an affirmative defense to defamation? 

Three interesting takes on the new scare tactics:

Barry Ritzholtz:

Nationwide Title has now sued a St. Petersburg foreclosure defense lawyer, Matthew Weidner, for alleged libel and slander. For those of you who are not attorneys, I need to point out a few things out Libel and Slander laws. First, in these cases, Truth is a total defense. So if a defendant can demonstrate that the damaging statements were not false, they win. Note also that opinion is also protected.

In civil litigation, the discovery process provides lots of opportunities for a defendant to gather information as to anything related to the accusations to prove they are true. Depositions of senior executives, their accounting books, low level employees are all legitimate aspects of pre-trial discovery.

Why any private firm would subject themselves to this degree of scrutiny is quite baffling to me.

And so the executives who run Nationwide just gave carte blanche to an angry, well connected, deep-pocketed, web & media savvy attorney who wants their blood. Weidner’s blog is widely read amongst the foreclosure congesceti. In the ranks of litigation foolishness, on a scale of 1 to 10, this is a 978.

My advice to Weidner is to is file a counter-suit for harassment and abuse of legal process before the morons who run Nationwide come to their senses and withdraw their nuisance suit. The countersuit preserves the litigation claim, and allows the defendant to continue the action. (In some jurisdictions, it also allows the continued defense of the original claim, in anticipation of future actions. I do not know what the procedural Florida laws are).

Beyond that act of brazen stupidity, what makes this legal action so egregious is what else Nationwide has done: They asked for, and actually got, a Court order to gag another lawyer from posting depositions of their robo-signers employees online. The court ordered injunction, against Sarasota lawyer Christopher Forrest. First amendement be damned, the injunction ordered him to remove videotaped depositions of three Nationwide Title employees. The videos show the employees describing the assembly-line process of robo-signing mortgage and foreclosure-related documents.

The Forrest Law firm’s YouTube page is now down, but mirrors of the depostion are all over the web.  See for example, DinSFL’s page.

The ACLU of Florida filed an emergency appeal of the injunction, which it called a “gag order” and a restraint of free speech.

Here is additional coverage from the St. Petersburg Times:

“The legal action marks another chapter in a storm over the validity of documents used to foreclose on millions of American homes. Earlier this fall, Bank of America and other lenders temporarily halted foreclosure proceedings because of evidence that many documents contained errors and fraudulent statements.

One of the most outspoken critics of the foreclosure process is Weidner, who writes a widely read blog in which he has criticized not only banks, but judges, lawyers and companies like Nationwide Title that process mortgage-related documents.

Nationwide Title does not prepare foreclosure papers. However, lenders have authorized several of its employees to sign for them on assignments of mortgage, which transfer ownership of a loan from one party to another and are key in determining who has the legal right to foreclose.

In a suit filed in Pinellas-Pasco Circuit Court, the company says Weidner has “deliberately and maliciously” used the term robo-signers “to vilify NTC for signing documents … when (Weidner) knew that it is entirely legally and appropriate to do so.”

Talk about an accurate and descriptive phrase: The term “robo-signers” perfectly sums up the mass produced, unreviewed, assembly-line document production.

My only question is why criminal charges have not been brought against these employees and their supervisors for perpretating a fraud on the courts. Even in Florida, Perjury is a felony, and if these documents were intended for use in court, its time for the local District Attorneys to start doing their jobs

Yves at naked capitalism:

I suppose the latest efforts taken by the members of the foreclosure industry to silence and neuter critics represent a perverse form of progress. If you go by the Ghandi timeline, “First they ignore you, then they ridicule you, then they fight you, then you win,” opponents of bad foreclosure practices seem to have done enough damage as to now be worth fighting.

But what is telling are the desperate-looking but nevertheless potentially effective measures being deployed to hamstring the opposition. The vanguard of this effort are foreclosure defense attorneys, many of whom are solo or small firm operators, with not hugely lucrative practices or doing pro bono work (you don’t make a lot of money defending people who have no money).

. . .

The problem is Weidner probably does not have the time or energy to pursue this matter, but by suing him, National Title has opened itself to discovery on the matter of legality of its robo signing operation. If I were in his position, I’d have a field day and start deposing senior executives, particularly on the details of the resolutions that gave the document execution teams the authority to sign and the rigor of the processes by which particular documents got to the robo signers, as well as the matter of employees signing affidavits, which by their nature are attestations of personal knowledge, when they clearly had none.

But even if Weidner is in no mood to take advantage of this opportunity handed to him on a platter by National Title, raising the visibility of these depositions, which are a matter of public record, hardly seems a good PR move. Recall how Goldman’s efforts to shut down backfired spectacularly.

I’ve heard of other methods to silence critics of dubious foreclosure practices. Lisa Epstein of wrote of a Washington attorney who has been particularly effective in foreclosure defense is now being threatened by a major law firm of litigation for frivolous lawsuits. If she’s won, they can hardly be deemed to be frivolous, but fighting a big firm with lots of staff has high odds of being a war of attrition.

And that is far from the only deterrent being used. Two anti-foreclosure attorneys have told me of receiving threats; one of the “you’d better watch it or you will get hurt” sort; the other repeated intimidating phone calls, including the “we know where your kids are” type. I suspect that sort of thing will become more common as this battle gets hotter.

Mark Stopa, attorney:

Am I crazy, or does anyone else see the hypocrisy here?  Think about it.

On the one hand, NTC wants to sue Matt Weidner for damaging its business reputation by using terms like “robo-signer.”  In doing so, NTC wants to take the position that everything is on the “up and up” with how it does business (and it was “defamed” by Matt’s suggestions otherwise).

Meanwhile, NTC is fighting vigorously to shield depositions of its employees from the public, pushing for an injunction requiring Christopher Forrest to remove the video depositions from youtube.

As I see it, if everything is on the “up and up” at NTC, as it wants to allege in the suit against Matt, why is it going to such efforts to shield its the public from learning about its operations?  In other words, if NTC is being “defamed” by use of the term “robo-signer,” then why is it unwilling to let the public see testimony from its employees about the manner in which they execute documents?

Let’s put it this way.  I don’t know what’s going on behind closed doors at Nationwide Title.  It seems to me, though, that if everything were up on the “up and up,” as it wants to contend in the suit with Matt, then it wouldn’t be so hesitant to let everyone see and hear what’s going on at NTC from the mouths of its own employees.  Show us the depositions.  Explain it to us.  If you’re an upstanding, reputable company, open your doors and prove it.

Maybe I’m naive.  If it were me, though, and somebody was falsely accusing me and/or my company of “manufacturing evidence” or doing something illegal, I’d do whatever I could to prove my innocence.  I’d be talkiing to the media, opening my books and records, explaining my company’s operations – doing whatever I could to reveal the truth.  I certainly wouldn’t be going to court to try to shield evidence of my conduct.

If you’re reading this, NTC, consider this a challenge.  If your employees aren’t “robo-signers,” then terminate the injunction.  Heck, give me consent to post the video depositions on this website.  Let the public hear your employees testify – let the public be the judge.  If everything is on the “up and up,” I’m sure you’ll have nothing to worry about.  If you’re not willing to do that, as the injunction suggests, you can’t blame anyone for questioning exactly what’s going on behind closed doors at NTC.


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