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Alexandria Division

In Re:
-------------------------------------------------- No. 10-10856-RGM






Debtors Ayanna K. Camara and Larry Lee respectfully oppose SunTrust's motion to lift

automatic stay filed on March 25, 2010 and served upon the Debtors on April 2, 2010. The

motion should be denied because, based on the record before the court, SunTrust is not a creditor

of the instant bankruptcy estate and is not entitled to enforce the subject debt. In addition to

SunTrust's lack of standing, its lift-stay motion fails to satisfy both procedural and substantive

requirements applicable to this proceeding.


Today, more and more homeowners turn to the bankruptcy system for protection when

facing financial hardship and impending foreclosure. It is bankruptcy courts' responsibility to

ensure that these debtors receive the full protection of the Bankruptcy Code, including the benefit

of the automatic stay, for as long as the debtors are entitled to it. Unfortunately,

contemporaneously with the increase in foreclosures, there is an increase in lenders and entities

posing as lenders who, in their rush to foreclose, haphazardly fail to comply even with the most

basic legal requirements of the bankruptcy system. It is the movant's responsibility to comply,

and this Court's responsibility to ensure compliance, with both substantive and procedural

requirements of the Bankruptcy Code, the federal rules, and other applicable law. See, e.g., In re

Maisel, 378 B.R. 19 (Bankr. Mass. 2007); In re Foreclosure Cases, 2007 WL 3232430 (N.D.

Ohio 2007); In re Foreclosure Cases, 521 F. Supp. 2d 650 (S.D. Ohio 2007).

The most basic elements required to obtain relief from stay are that a movant (1) have the

right to enforce the subject debt (2) in a way it is attempting to do so (through foreclosure), i.e.,

that the movant have standing to bring and prosecute a lift-stay motion. Id. In this case, SunTrust

satisfies neither of these elements. SunTrust does not have the right to enforce the subject debt in

the first place, much less to enforce it as a secured creditor by way of foreclosure.


The Note and the Deed of Trust

On February 18, 2006, Debtor Ayanna Camara executed and delivered to Synergy One

Financial Services, LLC ("Synergy One") a 3-page, fixed-rate promissory note in the principal

sum of $287,000.00 ("Note") secured by a Deed of Trust on real property located at 11977

Beaver Mill Lane, Manassas, VA 20112. Page 3 of the note contained Debtor Camara's

notarized signature. Exh. A (copy of the Note as provided to Debtor at closing).

Some time in August-September 2009, after receiving a notice that her home may be

foreclosed upon, Debtor Camara apparently wrote to SunTrust or its attorneys requesting, inter

alia, a copy of the note in SunTrust's possession. On September 26, 2009, Camara received from

one of SunTrust's attorneys a 3-page copy of the note, attached hereto as Exh. B. The last page

of the Note produced by SunTrust contained a stamp with words "Without Recourse / PAY TO

THE ORDER OF / SunTrust Mortgage Inc. / Deborah P. Ellis, Vice President." Id. In other

words, the note produced by SunTrust in September 2009 consisted of 3 pages and contained a

blank endorsement by SunTrust (thus evidencing a transfer of the note by SunTrust to another

entity). As will be shown below, these 3 pages, with page 3 containing SunTrust's blank

endorsement, are what the Court will see if it examines the original note.

The Deed of Trust accompanying the Note was signed by Debtor Camara on February 18,

2005 and subsequently recorded in Prince William County, Virginia. The Deed of Trust lists

Synergy One as the "Lender," and Mortgage Electronic Registration Systems, Inc. ("MERS") as

"the beneficiary" of the Deed of Trust "solely as nominee for Lender and Lender's successors and

assigns." See Exh. A to SunTrust's lift-stay motion [Dkt.29] (copy of Deed of Trust).

The Deed of Trust was given by Debtor Camara and Joint Debtor Lee "to Robert T. Heltzel as

[blank] and Eula R. Morgan as Trustee, for the benefit of [MERS] as beneficiary. Id.

Upon information and belief, and a search of appropriate SEC filings, Synergy One does

not fund mortgage loans it originates, but operates under a Flow Servicing Agreement or other

similar agreement with another entity or entities that provide the actual funds used to fund

mortgages originated by Synergy One. Because Synergy One uses someone else's funds, it

charges, inter alia, a yield spread premium (YSP) that makes loans more costly to consumers and

that violates federal consumer protection laws when undisclosed.

Currently, neither Synergy One nor SunTrust owns the Note (and thus the Debtors'

mortgage loan), as the loan is listed as having been owned by Fannie Mae. Exh. D (Fannie May

loan database printout). Fannie Mae, in turn sells about 85% of all mortgages it owns to

investors through the process known as securitization, and has most likely sold the Note to

unknown third parties. See, e.g., James R. Barth et al., A Short History of the Subprime

Mortgage Market Meltdown 5 (Milken Institute 2008), available at (showing percentage of securitized mortgages by

issue date).

Bankruptcy Events

Some time on or after March 2, 2009, Debtors fell in default on their obligations under

the Note. See Exh. C to SunTrust's lift-stay motion (copy of payment schedule). On February 4,

2010, Debtors filed a Chapter 13 petition. [Dkt.1]. On February 17, 2010, said petition was

converted into a Chapter 7 petition. [Dkt.13].

On March 25, 2010, SunTrust, through its attorneys, filed a Motion for Order Granting

Relief From Automatic Stay. [Dkt.29]. Attached to that motion as an exhibit was a copy of the

Note, allegedly in possession of SunTrust, which contained 4 pages (rather than 3 contained in

the September 2009 version produced by SunTrust), with the third page not containing a blank

endorsement by SunTrust, and the fourth page purporting to evidence a special endorsement of

the Note from Synergy One to SunTrust. See Exh. B to SunTrust's motion to lift stay [Dkt.29]

(copy of the Note). A copy of this version of the Note is also attached hereto as Exh. C for easy

comparison and contrast with the original 3-page version produced by SunTrust prior to its filing

of its lift-stay motion. The purported special endorsement is undated. Id. Further, there is no

evidence that the alleged special endorsement is affixed to the original Note. On the contrary,

circumstantial evidence (such as: (1) the special endorsement being on a separate page 4 even

though there is still room on page 3 of the Note, and (2) the presence of a blank endorsement by

SunTrust on Page 3 of an earlier version, and (3) the absence of the blank endorsement on page 3

of the later, 4-page version) strongly points to the conclusion that the 4-page version is not a copy

of the original note, and that page 4 was added ad hoc to mislead the Court as to the actual right

(or lack thereof) of SunTrust to enforce the note. See Exs. B & C.

In light of the above facts, Debtors oppose SunTrust's lift-stay motion. For the reasons

stated fully below, the lift-stay motion should be denied and applicability of Rule 9011 sanctions

should be considered against SunTrust and its attorneys.



It is axiomatic that, in coming to federal court to enforce an alleged right, movant

SunTrust must comply with the applicable procedures of the federal court and applicable law. In

the words of this Court, "it is not sufficient that the debtor owes someone money; the issue is

whether the debtor (and hence the bankruptcy estate) owes it to the party filing the proof of claim

[or lift-stay motion]." In re King, No. 08-13152-SSM, (Bankr. E.D. Va. 2009) (emphasis in


A. Law and Rules Governing Lift-Stay Motions

Section 362(a) of the Bankruptcy Code provides that the filing of a bankruptcy petition

operates as a stay of collection and enforcement actions. 11 U.S.C. § 362(a). The purpose of the

automatic stay is "to give the debtor a breathing spell and to prevent a race by creditors against

the debtor's assets until such time as the bankruptcy court can sort out the respective interests of

the debtor, the bankruptcy estate, and creditors." In re Jones, 348 B.R. 715, 717-18 (Bankr. E.D.

Va. 2006).

Section 362(d) allows the court, upon request of a "party in interest," to grant relief from

the stay, "such as terminating, annulling, modifying, or conditioning such stay." 11 U.S.C. §

362(d)(1). The court may grant relief "for cause, including the lack of adequate protection." Id.

The court may also grant relief from the stay with respect to specific property of the estate if the

debtor lacks equity in the property and the property is not necessary to an effective

reorganization. 11 U.S.C. § 362(d)(2).

Pursuant to Local Rule 4001(a)-1(A), "[a]ll motions for relief from stay . . . are contested

matters and are governed by FRBP 9014, 11 U.S.C. § 362[] and [the] Local Bankruptcy Rules."

Local Rule 4001(a)-1(D) provides that the following elements "must be included in a motion for

relief from stay: . . . (4) a description of the security interest and its perfection; (5) a statement of

the basis for the relief claimed . . . . The specific facts constituting cause shall be set forth if a

motion is brought for cause." (Emphasis added.) Thus, this Court's rules of procedure require

that each lift-stay motion contain certain indispensable elements, the absence of which should

result in a denial of such motion, just like a complaint failing to state a claim would be subject to

dismissal on a 12(b)(6) motion.

As noted above, lift-stay motions are contested matters governed by, inter alia, Rule

9014. Rule 9014, in turn, makes such motions subject to Rule 7017, which, in turn, incorporates

Fed. R. Civ. P. 17 providing that an "action must be prosecuted in the name of the real party in

interest." As this Court previously noted, "[i]t is axiomatic that in federal courts a claim may

only be asserted by the real party in interest. Rule 7017 of the Federal Rules of Bankruptcy

Procedure incorporates the provisions of Rule 17 of the Federal Rules of Civil Procedure. . . .

The purpose of Rule 17 is to ensure that the person bringing a lawsuit has the right to enforce

the asserted claim." In re Smith, 419 B.R. 622, 628 (Bankr. E.D. Va. 2008) (citation omitted)

(emphasis added) (finding purported creditor lacked standing to file proof of claim with respect

to judgment rendered in favor of another party).

Importantly, as a general rule, a person who is an attorney-in-fact or an agent solely for

the purpose of bringing suit is viewed as a nominal rather than a real party in interest and will be

required to litigate in the name of his principal rather than in his own name. See, e.g., In re

Hwang, 396 B.R. 757 (Bankr. C.D. Cal. 2008) (quoting 6A Wright, Miller & Kane, Federal

Practice and Procedure: Civil 2d § 1553).

B. "Standing" And "Real Party In Interest"

Since a movant seeking relief from stay is seeking to exercise a right stayed by § 362(a), a

movant for relief from stay bears the burden of proof that it has standing to bring the motion. See,

e.g., In re Wilhelm, 407 B.R. 392 (Bankr. D. Idaho 2009).

"To obtain stay relief, each Movant must have standing, and be the real party in interest

under Federal Rule of Civil Procedure 17." Id. at 398. "Standing" and "real party in interest" are

concepts that are related but not identical. Standing encompasses two major components:

"constitutional limitations on federal court jurisdiction and prudential limitations on its exercise,"

Warth v. Seldin, 422 U.S. 490, 498 (1975), while "real party in interest" is generally part of

"standing," as discussed below.

Constitutional standing concerns whether the plaintiff's personal stake in the lawsuit is

sufficient to have a "case or controversy" to which the federal judicial power may extend under

Article III. See, e.g., Lujan v. Defenders of Wildlife, 504 U.S. 555, 559-60 (1992).

Prudential standing includes the idea that a party must assert its own claims, rather than

another's. See, e.g., Warth, 422 U.S. at 499. The purpose of this rule is to require that an action be

brought in the name of the party who possesses the substantive right being asserted under the

applicable law. Smith, 419 B.R. at 629. Thus, the requirement of Fed. R. Civ. P. 17, made

applicable to stay relief motions by Rule 9014, "generally falls within the prudential standing

doctrine." In re Wilhelm, 407 B.R. at 398; accord. In re Taylor, 252 B.R. 346 (Bankr. E.D. Va.

1999) (discussing Rule 17 and "real party in interest" as part of "standing"); In re Dove, 199 B.R.

342 (Bankr. E.D. Va., 1996) (applying Rule 7017 and finding lack of standing); In Re Sposa, 31

B.R. 307 (Bankr. E.D. Va. 1983) (similar).

Finally, to obtain relief in federal court, a party must meet both the constitutional

requirements (Article III) and the prudential requirements (including "real party in interest") of

standing. See, e.g., Morrow v. Microsoft Corp., 499 F.3d 1332, 1339 (Fed. Cir. 2007).

In the instant proceeding, Debtors challenge SunTrust's status as a party having

constitutional standing under Article III or having prudential standing as a "real party in interest"

under FRCP 17 in the context of a 11 U.S.C. § 362 proceeding.


A. SunTrust Has Not Demonstrated That It Has The Right To Enforce

The Note.

Mortgage notes are commercial paper (whether negotiable or non-negotiable) covered by

the Uniform Commercial Code as adopted by each of the Fifty States, including Virginia. Va.

Code § 8.1A-101 et seq.; First Nat. Exchange Bank v. Johnson, 355 S.E.2d 326 (Va. 1987)

(applying Virginia's version of UCC to mortgage notes). When a party seeks to enforce a note

against a debtor, the debtor not only has the right, but also has the responsibility to demand

production of the note. See, e.g., Lambert v. Baker, 348 S.E.2d 214, 216-17 (Va. 1986) ("payor

may protect himself by demanding production of the instrument and refusing payment to any

party not in possession unless in an action on the obligation the owner proves his ownership; . . .

it was [defendant payor's] responsibility to raise and establish this affirmative defense").

Because SunTrust is seeking to enforce the February 18, 2005 Note executed in favor of a

different entity (Synergy One) and seeks relief from stay claiming a right to enforce the Note, it is

necessary to determine whether SunTrust indeed has such a right. In doing so, we must look to

the substantive law governing promissory notes. See, e.g., Butner v. United States, 440 U.S. 48,

54-55 (1979) (nature and extent of property interests in bankruptcy are determined by applicable

state law). In Virginia, such law is Virginia's version of the UCC, codified in Va. Code § 8.1A-

101 et seq.

Under Virginia law, with exceptions not relevant here, a person is entitled to enforce an

instrument, such as a promissory note, only if such person is "(I) the holder of the instrument,

[or] (ii) a nonholder in possession of the instrument who has the rights of a holder." Va. Code §

8.3A-301. A "holder," in turn, is defined as the "person in possession of a negotiable instrument

that is payable either to bearer or to an identified person that is the person in possession." Va.

Code § 8.1A-201(b)(21). Further, "if an instrument is payable to an identified person,

negotiation requires transfer of possession of the instrument and its endorsement by the holder."

Va. Code § 8.3A-201(b) (emphasis added). An "endorsement," in turn, is "a signature . . . that . . .

is 'made on an instrument' . . . [and] a signature is 'made on a instrument' [if it is on] a paper

affixed to the instrument." Va. Code § 8.3A-204(a) (emphasis added).

In other words, where, as here, an instrument (the Note) is payable to an identified person

(Synergy One), its initial negotiation (transfer) requires an endorsement by that person as a

holder in possession, and the "[e]ndorsement must be written . . . on the instrument or on a paper

so firmly affixed thereto as to become a part thereof." Adams v. Madison Realty & Dev., Inc., 853

F.2d 163 (3d Cir. 1988).

The above principles are well illustrated by a number of recent Bankruptcy decisions all

across the country. For instance, a situation almost identical to the case at bar was considered in

In re Wilhelm, 407 B.R. 392 (Bankr. Idaho 2009), where the bankruptcy court denied several lift-

stay motions, holding that none of the several banks posing as secured creditors actually had

standing to enforce the mortgage notes against the debtors. Id. at 405. Just as in the instant case,

each subject note in Wilhelm was payable to an entity other than the movant and was not properly

endorsed to the movant either in blank or specially. Id. at 397. Applying Idaho's version of UCC

(which is virtually identical to Virginia's), the Wilhelm court noted that to "qualify as holders,

these Movants must possess an indorsed note." Id. at 402. The court then proceeded to determine

that none of the movants could qualify as a holders or non-holders with rights to enforce because

"none of these notes [had been] indorsed, either in blank or specially" and because the movants

"failed to establish they possess the notes at issue." Id. at 402-03.

Similarly, in In re Weisband, 4:09-bk-05175 (Bankr. Ariz., March 29, 2010), the court

denied a stay relief motion where the movant, even though in possession of the note (unlike in

the instant case), "failed to demonstrate that the Note is properly payable to [it]." Id. at *8

(opinion attached hereto as Ex. E). Importantly, the movant in Weisband (called GMAC)

produced two versions of the note at issue, just like movant SunTrust in the instant case. The

first version, submitted with GMAC's proof of claim, did not contain an endorsement by original

payee (called GreenPoint) to GMAC. The second version, submitted with a subsequent lift-stay

motion, contained an extra page with a purported endorsement from GreenPoint to GMAC. Id. at

*1-*2. Similar to the case at bar, the movant in Weisband claimed that "its status as a servicer,

along with the Endorsement of the Note to GMAC and the assignment of the [deed of trust] from

MERS to GMAC, demonstrated that it had standing to bring the Motion." Id. The court

disagreed and denied stay relief. Id.

Applying Arizona's version of the UCC, the Weisband court held that the evidence

presented (including the two different versions of the note and an endorsement on a separate

page) did not demonstrate the movant's standing. Id. at *4. The court noted that "for the

Endorsement to constitute part of the Note, it must be on a paper affixed to the instrument. . . .

Here, . . . the Endorsement is on a separate sheet of paper; there was no evidence it was stapled

or otherwise attached to the rest of the Note." Id. The Weisband court then continued that,


there is no proof that the allonge containing the special endorsement from
GreenPoint to GMAC was executed at or near the time the Note was executed.
Furthermore, the Endorsement does not have any identifying numbers on it, such
as an account number or an escrow number, nor does it reference the Note in any
way. There is simply no indication that the allonge was appropriately affixed to
the Note.

Id. at *5. The same reasoning applies to SunTrust's purported separate-page endorsement

submitted in this case. It is simply not part of the original Note, and the two versions of the Note

produced by SunTrust demonstrate so. Exs. B & C.

More specifically, in light of the Virginia statutes and the case law discussed above, to

establish its right to enforce the Note in the instant case, SunTrust would have to demonstrate

that Synergy One endorsed the Note to SunTrust when (1) Synergy One was in possession of the

Note and (2) on the Note itself or at least a paper affixed to the original Note. SunTrust's

evidence before the Court fails to establish either of these two elements and actually points to the

contrary. Specifically, the evidence shows that the purported endorsement on Page 4 was not

made when Synergy One was a holder in possession of the Note, and that said claimed

endorsement was never affixed to the original Note so as to become a part thereof.

In particular, since the Note was sold to Fannie Mae, Ex. D, as also evidenced by

SunTrust's blank endorsement on page 3, it defies common sense that Synergy One's purported

endorsement to SunTrust predating the sale to Fannie Mae would appear on some separate page

4 and after SunTrust's blank endorsement on page 3. The better interpretation of this "evidence"

is that the Note was never properly negotiated from Synergy One to SunTrust, and that the

claimed endorsement on Page 4 was done after-the-fact and solely to facilitate a fraudulent

foreclosure of Debtors' home.

Moreover, since SunTrust is likely no longer in possession of the original Note due to the

Note's sale to Fannie Mae, Ex. D., the purported extra-page endorsement cannot be made part of

the original Note. Nor can SunTrust claim an ownership interest in the Note after the Note's sale

to Fannie Mae. Id. SunTrust's claims that it has possession of the Note and that the purported

endorsement is part of the original Note therefore constitute fraud upon this court and may

warrant, inter alia, Rule 9011 sanctions. See, e.g., In re Lee, 408 B.R. 893, 896-97 (Bankr. C.D.

Cal. 2009 (sanctions imposed where "original note has a [blank] indorsement by [movant]" while

"the copy of the note attached to the motion for relief from stay omits this indorsement" so that

the "motion did not disclose the sale of the note or the indorsement"). The Lee opinion is

attached hereto as Ex. F.

SunTrust's lift-stay motion should therefore be denied and SunTrust's purported claim

with respect to Debtors' home should be disallowed under 11 U.S.C. § 502(b)(1) as a claim that

"is unenforceable against the debtor and property of the debtor, under any agreement or

applicable law." Id.



Under 11 U.S.C. § 362(g), the party requesting relief has the burden of proof on the issue

of equity. Id. SunTrust, with respect to the grounds for relief from the automatic stay, has failed

to produce sufficient evidence to carry its burden of proof on the issue as to the lack of equity in

Debtors' home. On the contrary, SunTrust's motion sets forth the amount of debt (which

SunTrust has no standing to collect, as discussed above) at $292,371.66, while setting forth the

value of the home at $328,900.00. See SunTrust's lift-stay motion [Dkt.29] at 2 (unnumbered

pages). Since 11 U.S.C. § 362(d)(2) requires that there be no equity in the subject property in
order for stay relief to be granted, and SunTrust failed to establish that this requirement is met,

SunTrust's motion should be denied on this basis as well.


Because SunTrust has failed to establish that it has the right to enforce the Note, much

less enforce it by way of foreclosure, and because its lift-stay motion fails to carry the required

burden of proof with respect to the issue of equity in Debtors' home, SunTrust's motion for relief

from automatic stay should be denied.

Respectfully submitted,

/s/ Gregory Bryl

Gregory Bryl, Esq.
VSB# 45225
6560 Backlick Road, Suite 211A
Springfield, VA 22150
703-997-5925 fax
Attorney for Plaintiffs


I certify that on April 23, 2010, I caused a copy of the foregoing document, with exhibits,

if any, to be sent via the Court’s CM/ECF to the following:

Edward S. Jones
Shapiro & Burson, LLP
236 Clearfield Avenue, Suite 215
Virginia Beach, VA 23462

Kevin R. McCarthy
1751 Pinnacle Drive, Suite 1115
McLean, VA 22102

/s/ Gregory Bryl

Gregory Bryl, Esq.