Bernstein Law Firm makes “Best of Chicago 2013”

Image“The Bernstein Law Firm recently appeared in a two-page feature in the Chicago Magazine’s “Best of Chicago 2013″ edition – the magazine’s annual issue of the top rated restaurants, events, and companies in the Chicagoland area.

The feature can be found on pages 98-99 of the magazine, where its attorneys and staff, its areas of practice, and its most recent successes are highlighted.”

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Proud to Run 10k and 5k – A Great Success

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The  run this past Saturday, June 29, 2013, was a great success for the Bernstein Law Firm. Although it was a chilly morning, the firm had a great time supporting the annual charity event focused on LGBTQI&A pride. Thanks to all those who ran with the Bernstein Law Firm. Continue to visit the Bernstein Law Firm’s webpage for recent activities and successes and follow us on Facebook for upcoming events!

Proud to Run 10k and 5k Race

On Saturday, June 29, 2013, the Bernstein Law Firm, along with the firm’s friends and supporters, will participate in the Proud to Run 10k and 5k run as part of Chicago’s Gay and Lesbian Pride week. Proud to Run (PTR) is an annual charity event focused on celebrating Lesbian, Gay, Bisexual, Transgender, Queer/Questioning, Intersex/Inquiring, & Allies (LGBTQI&A) pride.  Those that will be running with the firm will be provided an official Bernstein Law Firm race t-shirt and will have the opportunity to attend an after-race party. Please join us as we participate in this charity event. Click Here to sign up today, or contact Sharon Meyers at 312-645-6090 for more information.

Law Firm and Friends Run for the Zoo

ImageOn Sunday, June 2, 2013, the Bernstein Law Firm, along with 22 of the firm’s friends and supporters, ran in the United Run for the Zoo 10k and 5k to benefit the Lincoln Park Zoo. The race was a success and the firm’s presence helped raise funds to keep the Lincoln Park Zoo free and open to the community all year round. Thanks to all those who ran with the Bernstein Law Firm. Stay tuned for upcoming races and events!

United Run for the Zoo – 5k Race

On Sunday, June 2, 2013, the Bernstein Law Firm, along with its friends and supporters will be running in the United Run for the Zoo 5k to benefit the Lincoln Park Zoo, one of only three remaining free zoos in the United States and the last free major cultural institution in Chicago.

Those that will be running with the firm will be provided an official Bernstein Law Firm race t-shirt and will have the opportunity to attend an after-race party.  For more information about registering for the run, please head to: http://www.lpzoo.org/events/calendar/run-for-the-zoo, or contact Sharon Meyers at 312-645-6090 for more information.

Lack of Standing and Mortgagor Protection

The Illinois Second District Appellate Court recently adopted a legal principle aimed at protecting borrowers and further curbing lender wrongs, such as improperly affixing lender’s signatures to foreclosure documents without reviewing them.

As early as 2008, Federal and State jurisdictions around the country began a trend of dismissing foreclosure suits due to a lack of mortgagee standing.  In December 2012, the Second District adopted this trend — which could have significant implications on Illinois mortgagors and mortgagees alike.

In practice, it is not unusual for a mortgagee foreclosing on an assigned note to produce documents evidencing such assignment took place after or even well after initiation of the foreclosure suit.  These late assignments could be a result of a mortgagee’s honest inadvertent act or, more likely, may represent a mortgagee’s standard business practice.  Mortgagees that engage in this behavior intentionally operate on the assumption that no one will notice or raise the timing discrepancy.  Usually, they are correct.

For whatever reason the assignment was late, the servicer will more than likely argue that it should be given retroactive effect because it merely memorialized an earlier assignment or dismissal and refiling would unnecessarily strain judicial resources.  Moreover, a servicer will also most likely attempt to argue that the statutory provision, 735 ILCS 5/2-616(c), allows for liberal amendment of pleadings to correct so that cases are decided on the their merits and not on procedural technicalities.

However, federal courts[1] and state courts in New York[2], Ohio[3] and elsewhere[4] recently began dismissing foreclosure suits in which servicers or mortgagees were assigned the note subsequent to initiating a foreclosure action.  For example, in Saxon Mortgage Servs., Inc v. Hillery, a foreclosure action was dismissed because a plaintiff failed to allege the note had been assigned to it before filing its complaint.  2008 WL 5170180.  Moreover, in Countrywide Home Loans, Inc. v. Gress, a foreclosure suit was dismissed because it was “undisputed that the subject mortgage was not assigned to the plaintiff until . . . more than five months after the commencement of [the] action” and “retroactive assignment cannot be used to confer standing upon the assignee in a foreclosure action.”  888 N.Y.S. 2d 914-15 (2009).  While the factual bases of the foregoing examples differ, the trend of courts scrutinizing plaintiff standing in foreclosure cases is clear.

Recently, in Deutsche Bank National Trust Co. v. Gilbert, the Illinois’ Second District appellate court followed this trend when it dismissed Deutsche Bank’s foreclosure claim on the basis that it lacked standing at the time of filing.  982 N.E. 2d 815, 824 (2012).  Lack of standing is an affirmative defense, and the burden of proving the defense is on the party asserting it.  Therefore, the mortgagor bears the burden to prove the mortgagee lacked standing at the time the foreclosure was initiated.  However, when a prima facie showing is made — such as an assignment executed subsequent to filing of the foreclosure complaint– the mortgagee must rebut that showing with admissible evidence to establish it had standing at the time the action was initiated.

In Gilbert, the mortgagor established a prima facie defense by drawing attention to the fact that Deutsche Bank’s assignment did not explicitly state when it was assigned the mortgage.  That showing established a prima facie defense and shifted the burden to Deutsche Bank National Trust Co. to rebut with admissible evidence.

Deutsche Bank attempted to rebut Gilbert’s prima facie showing by submitting an affidavit stating that the assignment merely memorialized an earlier assignment of the note, but did not attach any documentary evidence to support the assertion.  The appellate court was not persuaded by the affidavit but rather followed the trend of scrutinizing mortgagee standing in foreclosure cases.  Although not addressed in the Gilbert decision, it is important to note that other jurisdictions and courts have expanded on this trend to further securitize mortgagee standing by awarding attorneys’ fees for such deficiencies.[5]

The upshot of the recent Illinois appellate court decision in Gilbert is that counsel for mortgagees and mortgagors alike must diligently examine the dates of any assignments and be prepared to support a prima facie defense or rebuttal with documentary evidence.  A failure to do so could result in a dismissal, a failure to obtain a dismissal or even sanctions.

— James D. Trail
The Bernstein Law Firm, LLC


[1] Saxon Mortgage Servs., Inc. v. Hillery, 2008 WL 5170180 (N.D. Cal. Dec. 9, 2008)

[2] Countrywide Home Loans, Inc. v. Gress, 888 N.Y.S.2d 914 (2009)

[3] Wells Fargo Bank, N.A. v. Jordan, 2009 WL 625560 (Ohio Ct. App. Mar. 12, 2009)

[4] Jeff-Ray Corp. v. Jacobson, 566 So. 2d 885 (Fla. Dist. Ct. App. Sept. 12, 1990)

[5] Bank of New York v. Williams, 979 So. 2d 347 (Fla. Dist. Ct. App. 2008); Countrywide Home Loans, Inc. v. Taylor, 843 N.Y.S.2d 495 (N.Y. Sup. Ct. 2007)

The Constitutionality of the Federal Defense of Marriage Act

On March 27, 2013, the Supreme Court heard arguments dealing with same sex marriage in the matter of United States v. Windsor, which questions whether it is constitutional for the federal government to refuse to recognize same sex marriages that have been recognized by other states.

The law, the Defense of Marriage Act (DOMA), defines marriage, at least for federal purposes, as between a man and a woman.  Section three of the Act, which is the section at issue in the case, states that, “the word ‘marriage’ means only a legal union between one man and one woman as husband and wife” for purposes of “any Act of Congress, or of any ruling, regulation, or interpretation of the various administrative bureaus and agencies of the United States.”

The Plaintiff in the case, Edie Windsor, brought suit against the IRS because it denied her a federal tax refund following the 2009 death of Thea Spyer, her partner for over forty years.  The two were finally married in Canada in 2007, but resided in the State of New York.  Following Spyer’s death, Windsor would have been eligible for a federal tax exemption in excess of $363,000 on her inheritance of her wife’s estate.  Windsor sued, arguing that if Spyer had been a man – if federal law had accorded their marriage the same status as heterosexual marriages recognized by their state – she would have paid no taxes.

So, the issue before the Supreme Court is whether the federal government must recognize same sex marriages that occur in states where it is legal.  More practically: if DOMA is ruled unconstitutional, then same sex couples can get married in states that allow gay marriage while residing in states that do not and still retain federal (but not state) recognition of that marriage.

Legally, whether DOMA will be upheld or struck down depends on the type of scrutiny the Court uses in its judicial review of the issue involved.  The lowest level of scrutiny is called the rational basis test, which states that if a law discriminates against a group of people, it must be for some legitimate reason.  Thus far both the US District Court as well as the US Court of Appeals for the 2nd Circuit struck down DOMA using the rational basis test and will likely do so here.

There is, however, the possibility that the Court will not reach a decision in this case.  President Bill Clinton signed DOMA into law in 1996, with just 81 of the 535 members of Congress opposed to the Act.  In the past, President Obama has defended laws passed by Congress that were challenged in court.  But, in February of 2011, the Obama administration announced it would cease defending the law because it believed the law to be invalid under the Constitution.  Because the Justice Department would not defend the law as passed by Congress, Republican Congressmen hired Paul Clement, George W. Bush’s former solicitor general, to represent the federal government in this case.  The Court, therefore, may decide not to rule on the case, because Congress did not technically receive any actual harm in order to defend it and because the Obama administration is not a viable party because it agrees with the lower courts.

Surviving this argument, and given the remainder of the questions the Justices asked at oral argument, it appears the Court may be leaning to overturn DOMA, though.  Justice Kennedy, who is thought to be the Court’s swing vote on this issue, acknowledged that there were 1,100 references to marriage in the federal code, and that the definition of who is married is “intertwined with daily life.”  He questioned whether the federal government may impose its own view of marriage, which has “always thought to be” the domain of the state.  Justice Ginsburg said that if same sex couples don’t receive federal pension, Social Security, and family medical leave benefits, “what kind of marriage is it” she questioned.  She said the law basically created two classes: real marriage and “skim-milk marriage.”  And Justice Sotomayor asked: “What gives the federal government the right to define marriage?”

One final question asked by Kennedy, however, caused Court observers to speculate that he would join the four liberal-leaning justices to create a majority against the Act: when questioning the reach of DOMA into state’s rights, he said it “presents a real risk of running into traditional state police power to regulate marriage.”  Kennedy’s repeated questioning is significant because he has written the majority opinion in two of the court’s most important gay rights decisions.

A decision in the Windsor case is expected in June.

—  Mike Herbst