Banking Law

One of those personal interest stories that so warms the heart over the holidays made it to the front page of The Wall Street Journal (paid subscription required) last week. It concerned a man and his mission: to live free or die. Well, not "die," actually, more like "or be evicted," but the "live free" part is accurate. The story concerned one stalwart (and cheap) Ohioan named Richard Davet, who fought lenders trying to foreclose on his house for 11 years before he finally got the boot. Thanks to recent rulings by federal district court judges in Ohio, he may still be in the fight, if no longer in the house.

He and his wife, Lynn, lived in a six-bedroom home in this Cleveland suburb for nearly 20 years when, in 1996, he was served with a foreclosure lawsuit. Rather than turn over the keys, he hit the law books. Flooding the courts with papers, Mr. Davet staved off foreclosure for 11 years, until this past January, when a county sheriff's deputy evicted the couple and changed the locks. They didn't make a mortgage payment the entire time.

"Our four Scottish terriers are buried there," says the 63-year-old Mr. Davet. "It was heaven on earth, an unbelievable property, and they took it from us like candy from a baby."

Dude: only if by "baby" you mean a really hacked off Baby Huey in a roid rage with a banana-clipped AK-47 in one hand and a claymore mine in the other. Taking candy from this baby was a chore.

Mr. Davet's case is believed to be the longest residential foreclosure of its kind in the history of Cuyahoga County, which is at the epicenter of the foreclosure crisis currently enveloping Ohio and many other parts of the country. Foreclosure actions are generally routine, typically taking from a few months to a couple of years to get the borrower out of the home. Companies turn the work over to so-called foreclosure-mill law firms, and generally cases are uncontested.

These days, more homeowners are digging in their heels. They delay foreclosures by filing for bankruptcy on the eve of a court-ordered sale of the property, or by refusing to answer the door when the plaintiff tries to "serve" them with a foreclosure lawsuit. They pay lawyers a few hundred dollars to file a motion that can buy them a little more time.

But few are as dogged as Mr. Davet. And his fight may not be over yet. Though ousted from his home for nearly a year now, he is trying to get the charming 1940s house back, plus damages. He's relying on the legal argument -- currently making headlines -- that a financial institution can only file a foreclosure action if it can prove it actually owns and holds the mortgage and promissory note.

I notice that much of Davet's fight was carried on pro se, inasmuch as he apparently had a nasty habit of trying to stiff some of his lawyers for their fees. At least one of them sued him and won a judgment for unpaid fees. On the other hand, if an attorney had tried some of the tactics chosen by Mr. Davet, like attempting to get a judge to issue an arrest warrant for the CEO of NationsBanc, I question whether that attorney would have retained his or her license to steal practice law. Courts tend to cut more slack for the pro se plaintiff or defendant when it comes to claims without merit. Thus, maybe he was better served by raising cain all by his lonesome.

NationsBanc and its successor, Bank of America, have hung in there over the years, most likely on the principle that notwithstanding the financial cost-benefit analysis of a piece of litigation, some clowns are so outrageous that they need to be squashed or the Earth will spin off its axis. They brought in big guns from Jones Day, kept blazing away, and when the smoke cleared Mr. Davet was sans maison. For the time being, at least.

Mr. Davet has filed a federal appeal based upon Judge Boyko's ruling, which we discussed earlier. Bank of America can say "thank you" to the lender's lawyer who talked down to Boyko, thereby sparking Judge Boyko to issue a ruling that will give a man clinging to a life saver a hoist back into the lifeboat just before the sharks eat him. Mr. Davit vows to take his fight all the way to the US Supreme Court. He'd better hope that Bank of America doesn't start its own "Gitmo" for borrowers who wage jihad against their lenders, or Mr. Davit may be "rendered" in the middle of the night, with no right of habeas corpus. Even the SCOTUS may not be able to bring him back.

Who said that foreclosure practice wasn't a barrel of laughs?