Tag Archives: appeal

Linda Mastro Files Appeal Brief

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Linda Mastro attorney Michael Gossler filed what looks like a hastily prepared appellate brief.  No pun intended, but it’s pretty brief – touching on community property law, prenuptial agreements, estate planning and appellate review standards, all very complex subjects, without a whole lot of analysis. (We suspect this is good evidence Gossler is not getting paid and is making his best argument with little to go on).

Recall that the trial court ruled that the jewelry was not her separate property and thus subject to the court’s jurisdiction.  Linda Mastro’s brief argues the trial court erred in this respect – and that all the evidence shows that the jewelry was her separate property.

As for the judgments against Linda Mastro related to missing property, like the rings, gold bars, and money from an LLC, she argues that was error too.  She argues there was no evidence presented at trial that she had any control or even had knowledge about any of these transactions, and that the signatures related to these transactions, which purported ot be hers, were not actually hers, but Mike Mastro signing for her.

As it stands now, Linda Mastro remains on the lam, assumedly (but not necessarily) with Mike.  Also we assumed she has possession of the jewelry (or sold it, and has the cash), which the trial court ruled is not hers.

We can’t wait to read the Trustee’s responsive briefing.

BECU v. Burns: Banks Can Sue First, Foreclose Later.

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Does entry of a judgment on a promissory note extinguish the lien of a security interest in real property that secures that note?  No, says Division 1 of the Washington Court of Appeals.

In BECU v. Burns, Boeing Employees’ Credit Union won judgment on a second position promissory note.  When the first position lender foreclosed, there were surplus funds available after the trustee’s sale.  The Superior Court said those funds belonged to the Burns.  BECU appealed.

The issue in Burns was whether BECU received the surplus funds as a second position lienholder, or whether the homestead exemption allowed Burns to take the homestead amount, $125,000, ahead of BECU.  In other words, by opting to sue on the note, and get judgment, did BECU give up its status as a consensual lienholder (who would be superior to the owner’s homestead exemption), and become an ordinary judgment lienholder (who is inferior to the homestead exemption)?  No, says the Court of Appeals.

Burns also answers a different question, that TEP thinks is far more important.  The question is this:  May I obtain judgment on a promissory note, levy upon other non-secured assets (to satisfy the judgment), and then later foreclose on the deed of trust, nonjudicially?  The answer is Yes!

In American Federal Savings & Loan v. McCaffrey,  107 Wn.2d 181, 728 P.2d 155 (1986), the Washington Supreme Court said:

“In transactions involving both notes and mortgages, the notes represent the debts, the mortgages security for payment of the debts. Either may be the basis of an action. The mortgagee may sue and obtain a judgment upon the notes and enforce it by levy upon any property of the debtor. If the judgment is not satisfied in this manner, the mortgagee still can foreclose on the mortgaged property to collect the balance.” (Emphasis added.)

Absent in the McCaffrey opinion is any explanation as to whether the “still can foreclose” language is limited to judicial foreclosures (a judgment holder can always judicially foreclose on his lien) or whether one can later nonjudicially foreclose on the mortgage lien.

Burns answers that question, albeit in dicta.  According to the Burns case, a noteholder can sue, win judgment, levy on other assets, and then nonjudicially foreclose on the collateral.

It will be interesting to see how many banks take this route – sue first, foreclose later.  If they do, we may see a lot of borrowers who can afford their mortgage thinking twice about simply letting the property go to foreclosure.

King County Probate Gone Wild!

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When a court opinion begins, “…. what should have been a simple estate and trust matter became protracted and contentious,” you know you’re in touble.

The Court of Appeals recently published Estates of Foster, 165 Wn. App. 33 (2011).  In this case the Executor and his brother teamed up to distribute from their parents’ estates disproportionately to themselves rather than to the parents’ grandchildren trust beneficiaries as set forth in the parents’ trust documents.

The case is significant for a couple reasons.  First, the court confirms that the Executor was not entitled to a jury trial because, while his fiduciary breach was the gravamen of the case, it was still a probate/trust matter, and restoration of the stolen funds, as opposed to general damages were sought.  The former types of cases don’t get juries; the latter do.

The case is also significant becuase of how the court treats the statute of limitations.  The grandchildren brought their claim more than three-years after the alleged breach.  The statute of limitations for fiduciary breach claims is three-years.  The court allowed the claim, applying the “discovery rule” without much analysis other than finding that the breach could not have been discovered earlier because of the Executor’s failure to cooperate when the grandchildrens’ early information requests.

Updates: Mastro and Hazelrigg

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TEP has a few updates to report on both of these bankruptcies. Mastro is first.  Recall that Linda Mastro (in absentia) is appealing the award of jewelry, etc. to the bankruptcy trustee. That appeal, along with three others, are all before the U.S. District Court (Western District of Washington). The trustee is seeking to consolidate them. Here’s the motion.

Now for Hazelrigg.  The petitioning creditor, Jim Rigby, the trustee in the Mastro bankruptcy, is petitioning for an “Order of Relief.”  This means he’s asking the court to go forward with the involuntary Hazelrigg bankruptcy, despite Hazelrigg’s objection that the appropriate venue is New Mexico.  TEP thinks the trustee will win this argument, based on the fact that Hazelrigg’s Washington State LLC, Centurion Financial, is also the subject of an involuntary bankruptcy – in Washington State – filed on January 6.  It does not make sense to have the two related bankruptcies in two separate venues.  The hearing is February 10.

If anyone wants to see some of Hazelrigg’s old Bellevue Lincoln Tower digs, click here.  Here’s the living room:

This condo was actually owned by one of Hazelrigg’s shell companies, ANT ONE, LLC (ANT stands for his kids’ first names, Aaron Nicole Tom).  Because Hazelrigg always claimed to rent out unit 3905, we think he lived in 4102.

Notice the Chihuly chandelier – that’s not included in the sale … Wonder why?

King County records show the condo was foreclosed.  It is now bank owned.  The Trustee’s deed shows it going to the Bank for a full credit bid of $765,000.  Pretty cheap for a $4 million penthouse.  Or the bank had senior liens against it, hence nobody else bidding on it.

Linda Mastro Appeals Judgment Giving Rings, Chihuly Glass, Gold, Cash and a Bentley to Creditors

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The Puget Sound Business Journal is reporting here that Linda Mastro, through her attorney Mike Gossler (Montgomery Purdue Blankenship firm), is appealing the bankrupty court’s judgment that awarded a cache of pirate treasure (seriously) to Mastro creditors.  The details of the appeal have not yet been disclosed, but here’s the notice.  The Judgment she is appealing is attached to the notice.  TEP wonders how can Linda Mastro disappear with the treasure yet appeal the judgment against her relating to the very same treasure that she took with her?  …  If anyone has an answer, please tell us, and we’ll post it!