Commonwealth of Massachusetts
Suffolk, SS Superior Court
Civil Action No 13-3459
Commonwealth of Massachusetts
Plaintiff
V
Gailon Arthur Joy, Et al
Defendants
Motion to Add Indispensable Parties
Background:
Throughout the decade from 1995 to 2007 the American Banking Sector introduced and then securitized ever larger portfolios of Sub-prime, Alt-A, No Income – No Asset, Piggy-back 1st and 2nd No money down loans, and last but not least, the infamous Hybrid known as the Pay Option Arm loans that the Fed Chairman Alan Greenspan hailed as a solution to “irrational exuberance” housing bubble prices.
These products were always sold with a starter rate that seemed affordable but always step rated buyers into virtual bankruptcy. Pragmatic mortgage bankers saw these “No-Doc or Low-Doc” instruments as an insidious banking scheme to steal accelerating equity in markets that all too frequently saw double digit growth in housing values as demand demonstrated “irrational exuberance” based upon a premise that EVERYONE should be able to purchase a home. FHA full doc loans (allowed “scratch and dent” payment history with explanations) went from 35% of market share in the mid-90's to a mere 3% in the 2006 market year, largely replaced by sub-prime that zoomed to better than 30% of Real Property Financing by the end of 2006.
As the market accelerated, Defendant Joy began to refer victims of these schemes to a hand-ful of available public interest lawyers willing to tackle “predatory lending” in it's various forms and even provided law enforcement investigators with lists of predators and evidence in various forms. BUT, it was a mere finger in the proverbial dyke. Foreclosures and equity theft accelerated largely unabated.
The Supreme Judicial Court's decision in Commonwealth vs Fremont clearly defining the lending of money without regard to the borrower's ability to repay, doing so in anticipation that equity inflation would cover potential losses, was, in fact, predatory lending and a violation of MGL 93-A, opened the door to consumer lawyers to defend against foreclosures and get injunctive relief, at least temporarily. In 2009 loan modification reached a new peak with the introduction of Obama's HAMP modification program, establishing a clear pathway for modification process and procedure, albeit poorly executed, particularly by the Mega Banks that controlled nearly 80% of residential mortgage servicing. But, few consumer lawyers in the Commonwealth really took up the battle in 2009.
Community Legal Services entities were largely under-staffed and were prevented from accepting cases with assets, and houses, albeit over-leveraged, were deemed assets and clients were declined representation. Private Counsel Law firms were requiring large retainers and charged $150 - $300/hour to defend defaulted home loans, all too frequently in-effectively. Max Gardner began to promote his “Bankruptcy Bootcamps” that taught BK lawyers how to use “proof of claim” as a valid challenge to banks and force modifications, etc.. Yet again, Bankruptcy lawyers wanted retainers from $3,000 to $4,500 to open a case and only two “Bootcamp Graduates” can be found in New England.
Given the growth in demand a group of former banking marketers combined their talent and market penetration to find and work with law-firms that would take “Payment Plans” and combine litigation with Mortgage Modification to achieve a resolution to struggling homeowners. It became quite apparent that even $150/hr was not the best interest of homeowners as it ate through monthly payments leaving them heavily indebted to lawfirms that would all to frequently end representation, particularly for foreclosure victims with “construction trades” incomes that slowed or evaporated winters during the depths of the recession from 2007 through the current period. And, private lawfirms were clearly reluctant or refused to take pro-bono cases involving foreclosure litigation. And even if they did take them, the files noticeably did not get good attention.
In 2009, Land Court Justice Keith Long ruled that many foreclosures were so badly short-cut that the foreclosure had not been accomplished and opened yet another more potent foreclosure reversal process that gave victims of bad faith modifications resulting in foreclosure yet another fighting chance. And foreclosure reversals became yet another legal process to restore equity and press banks to achieve reluctant Mega Bank modifications.
It became clear there was a middle market need to provide affordable community legal services with consumer interest lawyers that received adequate salaries and would not alter representation based on the balance in the clients' accounts. Global Advocates Foundation, Inc of Everett, Mass was organized in the fall of 2009 to clearly move in a direction to achieve just such a community legal clinic specializing in foreclosure defense or foreclosure reversal and refer the modifications process to other entities. A key organizer was a Hispanic public interest lawyer in tandem with Brazilian Community religious and business leaders to develop a potent foreclosure defense mechanism, utilizing initially a combination of bankruptcy reorganization plans and bankruptcy adversarial cases.
In early 2010 plans were laid to form yet another community legal service focusing on foreclosure defense and reversal in the Framingham area but in Commonwealth “Courts of Equity” and at the same time began to look at finding an entity to work with in the South Shore and stumbled into Mr Healy and the Center for Social and Economic Justice, Inc. In mid 2010 the Alliance for Housing Network, Inc was formed and combined with the Center for Social and Economic Justice, Inc. to begin the formation of a Community Legal Services entity to provide affordable and competent legal services and yet again to refer modifications to other entities. The board would be chaired by an accomplished bankruptcy lawyer and a legal team was developed around General Counsel and Attorney Jonathan Babcock composed of inside counsel and outside contract counsel.
FACTS:
On Saturday, August 8, 2009 a group met at the Conference Room of GNP Law to discuss the formation of a non-profit community legal services group to provide affordable legal services to struggling homeowners and a committee was formed with Attorney Carmenelisa Perez-Kudzma, a bankruptcy lawyer, as chair.
On December 28, 2009 Global Advocates Foundation, Inc was formed on Broadway, in Everett, Mass with Exec Director Obeilson Matos, Treasurer Pricila T. Silva, Clerk/Secretary Sondra Souto, General Counsel Carmenelisa Perez-Kudzma, and Directors Obeilson Matos, Pricila T Silva, Sondra Souto, Atty Miguel Oppenheimer, Pr. Wellington Silva, Atty George Piandes (GNP Law) and Saulo Sampiao.
The Global Advocates Foundation opened at 391 Broadway, Everett, Mass on the same date.
Global Advocates Foundation hired Attorney Daniel Hyman as their first Public Interest lawyer to do Adversarial Complaints in Bankruptcies and Court of Equity Complaints to include Summary Process Defense and he reported directly to Carmenelisa Perez-Kudzma, a Bankruptcy Attorney and GC.
In the late spring of 2010 a group met at the offices of Attorney John Morrison in Worcester, Mass regarding the formation of a Non-profit Legal Services entity pursuant to 501 c-4 of the Internal Revenue Code to provide affordable services to Foreclosure victims in the Commonwealth.
At that Meeting, Attorney John Morrison agreed to work with such an entity.
At a Subsequent meeting in the conference room of the Law Office of Attorney John Morrison the steps for the formation of the Alliance for Hope Network, Inc was formally adopted and milestones agreed to. Attirney John Morrison was elected the Chair of the Board of Directors.
In May 2010 they opened discussions with the Center for Social and Economic Justice and with the assent of the only surviving Director, Mr Healey, the office was moved to 62 Union Ave, Framingham, Massachusetts in July, 2010 and new officers and directors were appointed to revive the largely inactive tax exempt 501-c-3 affordable housing CDC and to work with the Hope for Homeowners initiative.
On July 26, 2010, the initial and only President, formed and recorded online the Alliance for Hope Network, Inc. with the initial officers and Directors.
Within a week thereafter the entity hired Attorney Jonathan Babcock with a resume' that included working with Harmon Law and desiring to seek “redemption”. He was hired as General Counsel to build and lead a team of social justice/public interest lawyers, initially to focus on foreclosure defense and reversal as appropriate.
At or about the same time the President and Clerk prepared a package seeking exemption under the IRS code as a 501-c-4 Social Justice entity and transmitted the Package to IRS Cleveland Office.
The initial Officers were Paula Carvalho, President; Washington Carvalho, Secretary/Clerk; John Charles Schumacher, Treasurer; Gailon Arthur Joy, Vice President; Attorney Jonanthan Babcock was added shortly thereafter in early August as General Counsel.
The initial Directors were Attorney John Morrison, Celsa Moreno Barker, Jose Natal Goncalves, G.Arthur Joy and John C. Schumacher.
At the Annual Meeting in October, 2010 for the Center for Social and Economic Justice, Inc, new officers and directors were appointed and the negotiations for a new office across from the Plymouth Superior Court began in Brockton, Mass.
About the same time, in October, 2010, the Executive Director of Global Advocates approached AHN (the Alliance) regarding combining resources and developing economies of scale. This discussion lead to a merger of the two entities in early December 2010. The two boards were combined and new officers were elected to move the combination forward into a cohesive community legal services based on affordability, including a “fair share” contribution based upon documented income and offset by periods of unemployment and other lost income issues, assuring specialized foreclosure defense and recovery without concerns that services would be interrupted by clients cash flow problems.
A key issue had been resolved in the merger in that Pricila Trancosa Silva of Capital Tax Services, a book-keeping and Tax Preparation service, was elected treasurer. While Schumacher was on record as the treasurer, in fact AHN had a serious problem with President-Treasurer-itis as Paula Carvalho and her husband, Washington Carvalho, were doing most of the book-keeping, deposits, paid expenses and controlled the check books at ALL TIMES.
The firm did not generate monthly balance sheets, despite the use of Quick-books and repeated requests for monthly and quarterly financial summaries were simply not available by declaration of being “too busy” by Mrs Paula Carvalho and Mr. Washungton Carvalho.
At the end of the first quarter of 2011 this defendant was notified by Mr Matos that the treasurer still did not have the corporate books.
Defendant Joy made inquiry and was told by the President that the treasurer had told her she would do so after tax season, April 15. When I asked if the books had been transferred after April 15 I was told that the President did not trust the treasurer. I then insisted she find an outside book-keeper she trusted until we could take up the matter with the Board.
A local book-keeper was identified but the books were not transferred and Ms Carvalho and her husband, Washington Carvalho, still controlled the books of accounts and the check books.
During April 2011 this defendant discovered there was a secret plan to eliminate the Everett office (formerly Global Advocates) and the three staffers there with the intent to open another office for our General Counsel and his staff, Atty Matthew Ilacqua, Attorney Allison MacLellan, and/or Atty Rebecca Lawlor.
In fact defendant Paula Carvalho and indespensible defendant and General Counsel admitted they were about to eliminate the Everett team that had merged in good faith in December, including the treasurer, and coincidentally steal all their clients, firing the entire Everett office staff.
In late April I was told by the former Executive Director of Global, Obeilson Matos, the trust account was clearly out of balance and also discovered from clients that the President was having checks made payable to her, personally, and utilizing the corporate account as compensating balance for bounced checks.
In fact, one such check for $2,000 was returned against a company account that, based upon information and belief, had been cashed by Mrs Carvalho and had bounced.
Defendant Joy also discovered AHN (Alliance) had collected checks from clients for third party securitization audits but nearly two dozen audits had not been ordered, including that of John Charles Schumacher.
Defendant Joy also began to receive complaints regarding incorrect charges to accounts, especially the Global Advocate Accts that had been transferred into AFAH client journals, and discovered balances forward were entered repeatedly as debits rather than credits.
A meeting of the officers was called and the issues were discussed and Defendant Joy moved to ask that Mrs Carvalho resign the presidency. General Counsel John Babcock refused to support the call and she refused to resign, leaving the officers badly split.
At the same managers meeting Mrs Carvalho again refused to transfer the books of accounts to the treasurer for an audit. On Motion of the Defendant Joy, Payroll was cut significantly to eliminate the deficit. Defendant Joy took a position as a voluntary staffer.
Following the failed attempt to achieve GAAP accounting I ordered the Treasurer, Pricila T. Silva, to establish a new set of books, and establish new trust accounts for all the sums coming into the Everett Office until the directors met to resolve the impasse.
A summary of issues was prepared by the defendant Joy and a special directors meeting was called for June, 2011 and Defendant Joy was locked out of the AHN (Alliance) offices.
At the Special Board meeting the Chair and General Counsel made it clear they did not support the call for resignation or other solutions and the issues were heavily debated for more than five hours, finally simply settling on an audit by the treasurer and an order for the President to produce a copy of the books to the Treasurer for audit. They did not give the treasurer control of all the book-keeping, did not order the surrender of the new Escrow Account in Everett, but did call for us to resolve the issues internally and “all get along”.
During the Special Meeting, the votes opposing the removal of the President were blocked by the use of proxy votes by the President, General Counsel and the Chair to void any substantial reformation for absent Directors Moreno, Costa and Goncalves.
At the follow-up meeting in July a preliminary report was rendered and the board elected to undo the merger, returning all but the litigation clients to the Everett Office and returning Global Advocates to Everett with the accounts; It was also agreed that AHN would be dissolved and the assets turned over to the Center for Social and Economic Justice, Inc and their new Pres and Exec Director, Jason Wheeler. The vote was unanimous.
A couple months later I received a call from the President of CSEJ telling me that the board and the SOC site had been altered without a directors meeting; Washington Carvalho, the General Counsel, Mr. Babcock, and Staff Attorney Rebecca Lawlor had formed a new FOR PROFIT - Advocates for Hope, LLC-, a lawfirm and transferred all clients and assets to the new LLC.
I promptly contacted Mr Babcock and advised that a transfer of the assets to a for-profit was very problematic and warned that if this was not corrected then there would have to be a complaint to the AG. Mr Wheeler agreed to follow-up and that was the last I heard from anyone at the Alliance.
Later I discovered that Mr Babcock had left and Rebecca had taken control of the LLC, renamed it Law Office of Rebecca Lawlor, LLC. The clients had clearly been moved, however, this defendant is still not certain what happened to the assets of AHN (Alliance).
In August of 2011 the Alliance for Affordable Housing, Inc was formed and took Global as a DBA. A new directorate was established and a new General Counsel had already been hired, Atty Uri Strauss.
Mr Strauss did a review of the new AG Regs and statutes and did a clear written discussion of compliance issues and what we had to do to be compliant. Counselor Strauss also consulted with Tax Exempt Legal Specialists and the concept was assured to be appropriate.
AFAH had also hired other staff attorneys, (Sebastion Korth and Adam Sherwin), and utilized several outside consulting or referral attorneys (Atty Sam Rodriguez, Atty Helene Gerstle, Atty Heather Ward) offering substantial discount to distressed homeowners to deal with the client legal issues.
Wherefore, Defendant Joy would move to add the following indespendible parties that are clearly specific parties that must be added pursuant to rule 19 for the proper adjudication of Justice, specifically other trustees and attorneys upon whose judgment the management term relied:
1. Washington Carvalho, clerk/secretary and spouse of President Paula Carvalho;
2. Attorney John Morrison, Chair and Director, Alliance for Hope Network;
3. Attorney Jonathan Babcock, Director and General Counsel to Alliance for Hope Network,Inc;
4. Attorney Rebecca Lawlor, Partner on Advocates for Hope, LLC;
5. Attorney Carmeneliza Perez-Kudzma, Director and General Counsel to Global Advocates;
6. Attorney Uri Strauss, General Counsel, Alliance for Affordable Housing, Inc.
7. Director Celsa Barker
8. Director Jonatan Della Costa
Respectfully Submitted this ____ day of November, 2013
__________________________
Gailon Arthur Joy, Pro Se
Certificate of Service: I hereby certify that a true copy of the above document was served upon The Mass Asst Attorney General Mychii Snape, Obeilson Matos by his Atty, Pricila Trancosa, Pro Se, John Charles Schumacher, Pro Se, and Paula Carvalho by her Attorney of record, for each party by mail on this 22nd Day of November, 2013.
___________________________
Gailon Arthur Joy, Pro Se
Commonwealth of Massachusetts
Suffolk, SS Superior Court
Civil Action No 13-3459
Commonwealth of Massachusetts
Plaintiff
V
Gailon Arthur Joy, Et al
Defendants
Memorandum of Law in support of Defendant Joy's Motion to add Indispensable Parties pursuant to MRCP Rule 19: for joinder of additional indispensable parties needed for just adjudication:
MRCP Rule 19 (a) declares “(a) Persons to Be Joined if Feasible. A person who is subject to service of process shall be joined as a party in the action if (1) in his absence complete relief cannot be accorded among those already parties, or (2) …..
The Mass Rule 19 clearly allows Joinder of parties but does not affect the substantive rights of the parties involved. It allows joinder where the rights and liabilities arose from the same transactions or occurences and include common questions of law and fact.
The list of proposed Indispensable Parties are essential as they all were critical participants in the same transactions or occurences as alleged, correctly ot incorrectly, by the Commonwealth of Massachusetts complaint against the already identified parties.
The Federal Version of the Rule gives better clarity and definition to the same conclusion:
FRCP 19 (a) Persons Required to Be Joined if Feasible. (1) Required Party. A person who is subject to service of process and whose joinder will not deprive the court of subject-matter jurisdiction must be joined as a party if:
(A) in that person's absence, the court cannot accord complete relief among existing parties; or
(B) that person claims an interest relating to the subject of the action and is so situated that disposing of the action in the person's absence may:
(i) as a practical matter impair or impede the person's ability to protect the interest; or
(ii) leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations because of the interest.
Wherefore, Defendant Joy would Pray the Honorable Court to allow the following Indispensable Parties to be served and added as defendants pursuant to MRCP Rule 19.
Director and Chair, Alliance for Hope Network, Inc
Attorney John Morrison, of 27 West Mountain
27 WEST MOUNTAIN STREET
WORCESTER, MA 01606 USA
27 WEST MOUNTAIN STREET
WORCESTER, MA 01606 USA
12/31/2011
Director and General Counsel of Alliance for Hope Network, Inc
and
Managing Founder of Advocates for Hope, LLC
Attorney Jonathan Babcock
Counsel for Alliance for Hope, LLC and
Managing Founder; Advocates for Hope, LLC
Clerk- Secretary and Director for;
Alliance for Hope Network, Inc,
Center for Social and Economic Justice, Inc
and Managing Founder of
Advocates for Hope, LLC
Washington Carvalho
Director and General Counsel,
Global Advocates Foundation, Inc,
Attorney Carmenelisa Perez-Kudzma
Alliance for Hope, Inc: Absentee Proxy voters:
DIRECTOR CELSA MORENO BARKER
8 ALDER WAY
LUNENBURG, MA 01862 USA
DIRECTOR JOSE NATAL GONCALVES
603 WINTER STREET
FRAMINGHAM, MA 01701 USA
Director Jonatan Della Costa
Framingham, Ma 01701
Alliance for Affordable Housing, Inc
General Counsel and Director;
Attorney Uri Strauss
Commonwealth of Massachusetts
Suffolk, SS Superior Court
Civil Action No 13-3459
Commonwealth of Massachusetts
Plaintiff
V
Gailon Arthur Joy, Et al
Defendants
Proposed Order for Motion to Add Indispensable Parties
Pursuant to Rule 19 of MRCP, the Motion of Defendant Joy requesting the addition of Indispensable
Parties is granted and the Plaintiff is ordered to amend the defendants to include said list and to have all
indespendable parties served prior to the December 29, 2013 deadline for service pursuant to the Courts
Prior Scheduling Order in this Matter.
____________________________
Presiding Justice, Suffolk Superior
Court
Dated: ______________________
Author
Topic: A new lawsuit filed against Gailon (Read 35188 times)
