Litigation of the Living Dead: IndyMac the “vampire” and beyond

October 16, 2012

In a decision earlier this month, a New York court vacated a default foreclosure judgment that was entered in favor of a “living dead” bank which had ceased to legally exist weeks before the foreclosure action was filed.  IndyMac Federal Bank, FSB v. Meisels, 2012 WL 4748473.  The court compares defunct bank IndyMac to the vampire Dracula, and compares the law firm that filed the action to Dracula’s ghoulish assistant Renfield.

The IndyMac opinion is a great read.  It turns out the the bank’s undead status isn’t the only problem in the case.  After the bank’s corporate demise, the mortgage was then assigned through nominee MERS and its Vice President, “the infamous robosigner Erica Johnson–Seck.”  (How often do you get vampires and robots in the same case?)

The “living dead” analogy seems particularly appropriate this time of year, as we approach Halloween.  And certainly the issue of mortgage foreclosures has become fraught with legal horrors and strange creatures.  I ran the following search in All Cases to see what other Halloween-ish results would turn up:

mortgage /p foreclos! & zombie vampire dracula living-dead ghoul! undead frankenstein

Here are some other bone-chilling images from the courts:

This case illustrates the shortcomings, even the dangers, of the once mighty global secondary mortgage loan market, with its arcane methods of doing business, conceived by ambitious, supersophisticated, big-brained, short-sighted financiers and their lawyers, who did not realize that they were creating a Frankenstein for everybody involved except the lawyers.  Duke v. Nationstar Mortg., L.L.C.,  2012 WL 3852121

In pari delicto does not apply to an entity once its controlling wrongdoer is ousted, a receiver is appointed, and the entity is no longer an “evil zombie.” Smith v. Bull Mountain Coal Properties, Inc.,  2008 WL 1736047 (citing Scholes v. Lehmann, 56 F.3d 750).

A macabre mother-son feud over the remains of a family’s multi-generational burial business muddied the funeral plot in this case. …James unceremoniously left the family’s parlor in the lurch and all parties began to engage in stiff internecine competition with one another, replete with burial-bashing recriminations and other unpleasantries, including allegations of commercial “grave robbing.” Egidio DiPardo & Sons, Inc. v. Lauzon, 708 A.2d 165

The purpose of this law is to prevent the robbery of dead men’s estates, by means of extinguished or satisfied judgments of any kind whatever, raised up by vampire claimants, for purposes of fraud. Taylor v. Young, 1872 WL 11304

And I turned up a few spine-tingling articles in secondary sources as well:

“Of Frankenstein Monsters and Shining Knights: Myth, Reality, and the ‘Class Action Problem'”, 92 Harv.L.Rev. 664

“The Dracula Mortgage: Creature of the Omitted Junior Lienholder,” 67 Or.L.Rev. 287