1

2
3

5 UNITED STATES DISTRICT COURT

6 DISTRICT OF OREGON

7 PORTLAND DIVISION

9 LEROI ESPIRIQUETZAL, An Individual, ) Case No: 18-cv-00157-YY

)
10 Plaintiff,)
vs. ) PLAINTIFF'S REPLY TO DEFENDANT
11 ) MORGAN STANLEY ABS CAPITAL
QUALITY LOAN SERVICE ) INC'S RESPONSE TO PLAINTIFF'S
12
CORPORATION OF WASHINGTON, et al., ) OBJECTIONS TO FINDINGS AND
13 ) RECOMMENDATIONS
)
14 )

15
Plaintiff submits his Reply to Defendant Morgan Stanley ABS Capital I Inc., in its
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17 capacity as Depositor for Morgan Stanley !XIS Real Estate Capital Trust 2006-1 Mortgage Pass

18 Through Certificates, Series 2006-1 as follows:

19 Plaintiff incorporates ECF No. 62 (Plaintiffs Objections to Findings & Recommendation);
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ECF No. _ (Plaintiffs Reply To Defendant Brown's Response To Plaintiffs Objections To
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Findings and Recommendation); ECF No._ (Plaintiffs Reply To Federal Defendants' Response
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To Plaintiffs Objections to Findings and Recommendation); ECF No._ (Plaintiffs Reply To
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Defendant Deutsche Bank's Response To Plaintiffs Objections to Findings and
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25 Recommendation); ECF No._ (Plaintiffs Reply To Defendant Michael Reese's Response To

26 Plaintiffs Objections to Findings and Recommendation); ECF No._ (Plaintiffs Reply To

27 Defendants Quality Loan Services Corporation of Washington and McCarthy Holthus, LLP's
28 LeRoi Espiriquetzal
1 C/o 400 W McLoughlin Blvd Apt 5
Vancouver, WA 98660
(971) 512-2917
pdxbrownboy@yahoo.com
 1 Responses To Plaintiffs Objections To Findings And Recommendations); and ECF No. 57

2 (Plaintiffs Response To Defendant Morgan Stanley ABS Capital Inc.'s Motion To Dismiss And
3
Request For Judicial Notice, Or In The Alternative, Plaintiffs Cross-Motion For Summary
4
Judgment), as though fully set forth herein.
5
No objection to the Magistrate's Findings and Recommendation was filed before the
6

7 August 20,2018 deadline by Defendant Morgan Stanley ABS Capital I Inc., in its capacity as

8 Depositor for Morgan Stanley J)as Real Estate Capital Trust 2006-1 Mortgage Pass Through

9 Certificates, Series 2006-1.

10
Nor was an effort made by this Defendant to inform this Honorable Court that, pursuant to
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an unlawful conspiracy, Defendant Trustee Deutsche Bank:, together with other coconspirators,
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caused Multnomah County Circuit Judge Mark A. Peterson to engage in ex parte proceedings
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which resulted in Defendant Sheriff Reese's alleged unconstitutional seizure of Plaintiffs home
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15 and delivering possession of the same to Deutsche Bank and the Trust.

16 Defendant Morgan Stanley ABS Capital I Inc., in its capacity as Depositor for Morgan

17 Stanley !XIS Real Estate Capital Trust 2006-1 Mortgage Pass Through Certificates, Series 2006-1
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("Depositor"), makes numerous misleading and possibly untruthful claims about this litigation.
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This Defendant claims Plaintiff conflates itself with the Trust and that: "Plaintiff s inability or
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(sic) to distinguish between defendants prejudices Morgan Stanley .... " ECF No. 70 at 2-3.
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No such conflation exists. Defendant desires to be referred to as "Morgan Stanley" for
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23 purposes of this litigation, ECF No. 70 at 1, but this does not change the fact that this Defendant

24 acted as the "Depositor" for the Trust and was named among the parties to the 2006 PSA. This

25 lawsuit is about its "capacity" as the "Depositor" and its role in obtaining possession of Plaintiff s
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original note and original deed of trust pursuant to the 2006 PSA.
27

28 LeRoi Espiriquetzal
2 c/o 400 W McLoughlin Blvd Apt 5
Vancouver, WA 98660
(971) 512-2917
pdxbrownboy@yahoo.com
 1 Further, the sale of Plaintiffs home by the alleged conspiring Defendants changed a few
2 things about this litigation. But the alleged unconstitutional seizure of Plaintiff s home on July 3,
3
2018 by "state actors," beyond a reasonable doubt, changes everything and follows a pattern of
4
wrongful and conspiratorial conduct.
5
The Defendant Trust is subject to regulation by the Federal Defendants and the State of
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7 Oregon. See ECF No. 57. The Prospectus Supplement dated June 27,2006 at pages 78-79, and

8 filed with the Federal Defendants pursuant to SEC Rule 424(b)(5), informed the public that:

9 "At the time of issuance of the securities of a series, the depositor will cause the
loans comprising the related trust fund to be assigned to the trustee, without
10 recourse, together with all principal and interest received by or on behalf of the
11 depositor. ... " See ECF No. 57 at 9-11.

12 Whether the Defendant Depositor caused this to happen is the heart of this litigation.

13 Defendant Depositor does not properly dispute any of the Exhibits referenced in the Complaint
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and attached thereto. Nor does Defendant Depositor properly dispute any of the Exhibits attached
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to the Requests for Judicial Notice on file with the Court.
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Defendant Depositor has further never disputed that, as "Depositor" for the Defendant
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Trust, it had a duty to see to it that Plaintiffs original note and original deed of trust was delivered
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19 to Defendant Deutsche Bank, on before or within 60 days after the June 30, 2006 closing date of

20 the Trust. The record before this Court is silent with regards to this evidence which was readily
21 available to Defendant Depositor, Defendant Deutsche Bank and the Federal Defendants, if this
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evidence ever existed.
23
It is permissible for this Court to presume that a failure to disclose these documents can
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only mean this evidence was adverse to the destroying party or the party willfully suppressing the
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26 evidence. See, Smitson v. Southern Pac. Company, 37 Or. 74, 85-86, 60 P. 907 (1900) (Willful

27 suppression of evidence creates a presumption that such evidence, if produced, would be adverse

28 LeRoi Espiriquetzal
3 c/o 400 W McLoughlin Blvd Apt 5
Vancouver, W A 98660
(971) 512-2917
pdxbrownboy@yahoo.com
 1 to the party suppressing it.); Bass-Davis v. Davis, 122 Nev. 442, 134 P.3d 103 (2006) ("[A]

2 permissible inference that missing evidence would be adverse applies when evidence is
3
negligently lost or destroyed.").
4
The Ninth Circuit in Glover v. BIC Corp., 6 F .3d 1318, 1329 (9th Cir. 1993), citing Aldana
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v. United States, 938 F.2d 158 (9th Cir.1991), held that: "[A] trial court also has the broad
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7 discretionary power to permit a jury to draw an adverse inference from the destruction or

8 spoliation against the party or witness responsible for that behavior."

9 Defendant Depositor claims Plaintiffs Objections fail because Plaintiff does not have
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standing to enforce the PSA. This is a very wild, off-the-cuff argument. The Depositor claims in
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the 2006 PSA, relevant to this litigation, that its role involved making sure certain loans purchased
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by the Trust were assigned to Defendant Deutsche Bank in its capacity as Trustee for the Trust.
13
The relevant judicial inquiry is simple: Did Defendant Depositor assign Plaintiff's original loan
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15 and original deed of trust to the Trustee on behalf of the Trust on, before or within 60 days after

16 the June 30, 2006 closing date of the Trust? MERS claimed Plaintiffs note and deed oftrust was

17 assigned in 2009 under Multnomah Instrument No. 2009-039776. But in 2014, MERS corrected
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the property records and claimed Plaintiff's note and deed of trust was assigned to the Trust "on or
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about July 05, 2013" and recorded under Multnomah County Instrument No. 2014-025355. See
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ECF No. 57 at 12-13. Thus, Defendant Depositor is a proper Defendant to the broader conspiracy.
21
Defendant Depositor makes the same alleged fraudulent misrepresentations as the other
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23 defendants by arguing that Plaintiff is attempting to litigate "post-sale claims". ECF No. 70 at 6.

24 Plaintiff commenced this action before his home was sold. This, then, is a pre-sale lawsuit as

25 provided for in Plaintiff s deed of trust:

26

27

28 LeRoi Espiriquetzal
4 c/o 400 W McLoughlin Blvd Apt 5
Vancouver, WA 98660
(971) 512-2917
pdxbrownboy@yahoo.com
 1 NON-UN""JFORlvl COVENAl-,TTS. Borrower and Lender further covenant and agt-ee as
follows:
22. Acceleration; Remedies. Lender shall give notice to Borrower prior to
2 acceleration follo,,"'ing Bo rrowe re s breach of any covenant or agreement in this Security
Instrwnent (but not prior to acceleration under Section 18 tmle ss Applicable Law provides
3 otherwise). The notice shall specify: (a) the default; (b) the action required to cure the
default; (c) a date, not less than 30 days from the date the notice is given to Bor-rowe r, by
which the default must be cured; and (d) that fanure to cure the default on or before the date
4 specified in the notice IIL."ly result in acceleration of the sums secured by this Security
Instrwnent and sale of the Property. The notice shall further inform Borrower of the right to
5 reinstate after acceleration and the right to bring a court action to assert the non-existence
of a default or any other defense of Borrower to acceleration and sale. If the default is not
cured on or before the date specified in the notice, Lender at its option rnay require
6 immediate paYJnent in full of all sums secured by this Security Instrwnent without further
de ma.nd and rnay invoke the power of sale and any other remedies permitted by Applicable
7 Law. Lender shall be entitled ro collect all expenses incurred in pursuing the remedies
provided in this Section 22, including, but not limited to, reasonable attorneys' fees and costs
of title evidence.
8 If Lender invokes the po we r' of sale, Lender shall execute or cause Trustee to
execute a written notice of the occurrence of an event of default and of Lender's election to
9

10 There is no question that the sale of Plaintiffs home pursuant to an alleged attorney-client

11 conspiracy after Plaintiff commenced this lawsuit violated this provision of the deed of trust.

12 The alleged conspiratorial ex parte proceedings by the Multnomah County Circuit Court
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while this lawsuit was pending in this Court and after Plaintiff had perfected an appeal in the State
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Court of Appeals, likewise violated the constitution and laws of the United States and the State of
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Oregon.
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The alleged unconstitutional seizure of Plaintiffs home on July 3, 2018 to satisfy a
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18 nonexistent "debt" pursuant to the alleged conspiratorial ex parte proceedings of the Multnomah

19 County Circuit Court while this lawsuit was pending in this Court and after Plaintiff had perfected

20 an appeal in the State Court of Appeals, constitutes the most egregious violation of the
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Constitution of the United States and its Sovereignty since the abolishment of slavery and the
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Marshalsea Debtor's Prison, established by the Court of the Marshalsea, and written about
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extensively in Charles Dicken's Little Dorrit (1855-1857), whose main character, Amy, is born in
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the Court's Marshalsea Prison. See also, The Case of the Marshalsea (K.B. 1613) 77 ER 1027.
25

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27

28 LeRoi Espiriquetzal
5 c/o 400 W McLoughlin Blvd Apt 5
Vancouver, WA 98660
(971) 512-2917
pdxbrownboy@yahoo.com
 1 All Defendants in this case and the litigants in the Multnomah County Circuit Court were

2 informed by the State Court of Appeals that the ex parte proceedings of the Circuit Court were a
3
"nullity" because Plaintiff had perfected an appeal to this Court.
4
Whether the Trustee for the Trust, Defendant Deutsche Bank, received Plaintiff original
5
loan and original deed of trust through an assignment from Defendant Depositor is as relevant as a
6

7 mother checking the diaper of her infant for the presence of a toot or a number 2.

8 But this Court need not check the infant's diaper because the sale of Plaintiffs home was

9 not authorized by this Court or the State Court of Appeals. Nor was the seizure of Plaintiffs home
10
on July 3,2018 authorized by this Court or the State Court of Appeals. Moreover, the sale and
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seizure violated material provisions of Plaintiff s note and deed of trust.
12
In footnote 3, ECF No. 70 at 3, Defendant Depositor argues that the State Court of
13
Appeals gave legitimacy to the conspiracy to sell Plaintiff's home after this lawsuit was filed and
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15 the Circuit Court's ex parte proceedings by "expressly grant[ing] leave to do so" and that

16 "Plaintiff appears to have been unsuccessful in seeking a stay of that judgment as he has not

17 provided any showing that he made a supersedeas undertaking."

18
The Depositor's argument fails under the contractual wording of Clause 22 of the deed of
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trust: "The notice shall further inform Borrower of ... the right to bring a court action to assert the
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non-existence of a default or any other defense of Borrower to acceleration and sale."
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Plaintiffs home was sold after he commenced this action and before the alleged
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23 conspirators sought the assistance of the State of Oregon to seize possession of Plaintiff s home.

24 The wording of the deed of trust cannot be stretched to sustain this alleged wrongful conduct.

25 Moreover, requiring a supersedeas undertaking cannot repair the irreparable harm already caused
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by the sale of Plaintiff s home after this lawsuit was commenced because the title was unlawfully
27

28 LeRoi Espiriquetzal
6 c/o 400 W McLoughlin Blvd Apt 5
Vancouver, WA 98660
(971) 512-2917
pdxbrownboy@yahoo.com
 1 transferred to the Trust following the nonjudicial foreclosure sale. In fact, requiring a supersedeas

2 undertaking, after Plaintiff commences a lawsuit to prevent the sale gravely aggravates this
3
irreparable harm and trespass. It is an absurd outcome as a matter of law, fairness and justice
4
It is thus incumbent upon the Depositor and the Trust to set forth in admissible evidence
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those documents giving the Trust the power to sell Plaintiff s horne after this lawsuit was
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7 commenced. If this cannot be done, Plaintiff is entitled to amend the complaint to state causes of

8 action against all persons involved with the events leading up to the sale and seizure of Plaintiff s

9 horne after this lawsuit was commenced.

10
There is one other consideration which Depositor and the other Defendants overlook in
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their arguments. This lawsuit was removed from a State trial court to this Court. Congress
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provided in 28 U.S.C. §1446(d) that:
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"Promptly after the filing of such notice of removal of a civil action the defendant
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or defendants shall give written notice thereof to all adverse parties and shall file a
15 copy of the notice with the clerk of such State court, which shall effect the removal
and the State court shall proceed no further unless and until the case is remanded."
16
The answer to whether the Circuit Court could entertain a suit for possession while that
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very issue is pending in this Court after removal appears to be in the negative. In Virginia v. Rives,
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19 100 U.S. 3l3, 317-317 (1879), the Supreme Court stated that: "All proceedings in the state court

20 subsequent to the removals were coram non judice, and absolutely void." To the same effect is

21 Gordon v. Longest, 41 U.S. (16 Pet.) 97, 104 (1842) (every step consequently taken in the
22
exercise of a jurisdiction in the case, whether in the same court or in the Court of Appeals, was
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coram non judice.); Insurance Co. v. Dunn, 86 U.S. (19 Wall.) 214, 224 (1873):
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"The further proceedings of the Common Pleas was a clear case of usurped
25 jurisdiction. The illegality was gross. The action of the District and Supreme Court
of the State gave them no validity. The maxim, that consent cannot give
26
jurisdiction, applied with full force." See also, FRCP Rule 12(b)(1) and (h)(3)
27 (Consent of the parties cannot give jurisdiction.).

28 LeRoi Espiriquetzal
7 c/o 400 W McLoughlin Blvd Apt 5
Vancouver, WA 98660
(971) 512-2917
pdxbrownboy@yahoo.com
 1 The stripping of jurisdiction by Congress in 28 U.S.C. §1446(d) directly raises the

2 question whether the State trial court ex parte proceedings violated the Federal Due Process
3
Clause and the Supremacy Clause, which is a conflict-of-laws rule specifying that certain national
4
acts take priority over any state acts that conflict with national law.
5
The Supremacy Clause, often seen as the source of the principle that states cannot
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7 regulate, interfere with, or control federal instrumentalities, is generally traced to McCulloch v.

8 Maryland, 17 U.S. (4 Wheat.) 316 (1819).

9 Plaintiff is safe in his belief that Defendant Deutsche Bank: made a serious legal blunder
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after Plaintiff commenced this lawsuit by: (1) selling Plaintiff's home; (2) purchasing Plaintiff's
11
home; (3) removing Plaintiff's lawsuit to this Court; (4) commencing its own lawsuit seeking
12
possession in the State trial court from which this matter was removed; (5) causing a State trial
13
judge to conduct ex parte proceedings without Plaintiff's knowledge; and (6) causing Defendant
14

15 Sheriff Reese to seize possession of Plaintiff's home pursuant to the ex parte proceedings.

16 De novo review is particularly warranted, where, as here, there appears a conspiratorial

17 effort to obstruct justice in this Court, engage in contempt of court and deny Plaintiff his
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constitutional and civil rights to seek legal redress.
19
Respectfully submitted,
20
Dated this 5th day of September, 2018.
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23 Xb.StiLl
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28 LeRoi Espiriquetzal
8 c/o 400 W McLoughlin Blvd Apt 5
Vancouver, WA 98660
(971) 512-2917
pdxbrownboy@yahoo.com