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Jeffrey J. Whitehead, Esq. Nevada Bar No. 3183 Whitehead Law Offices 2431 W. Horizon Ridge Pkwy. Suite 110 Henderson NV 89052 VOX: (702) 451-7272 FAX: (702) 451-2947 email: jeff@whiteheadlaw.org Attorney for Debtors Joan Maria Anderson and Todd J. Shelly UNITED STATES BANKRUPTCY COURT DISTRICT OF NEVADA In re: JOAN MARIA ANDERSON and TODD J. SHELLY CASE NO.: 2:10-bk-31903-lbr CHAPTER 13

HEARING DATE: July 13, 2011 Debtors HEARING TIME: 10:30 a.m.

16 17 18 19 20 21 22 23 24 25 26 27 28 1 PLEASE TAKE NOTICE that the Debtors, Joan Maria Anderson and Todd J. Shelly, by and through their counsel, Jeffrey J. Whitehead , Esq., pursuant to 11 U.S.C. 502 (b) and Bankruptcy Rules 3007 and 9014, hereby object to the Proof of Claim filed on January 31, 2011 by J. P. Morgan Mortgage Acquisition Corporation and oppose the Motion for Relief from Automatic Stay filed on February 3, 2011 by Creditor PHH Mortgage Corporation. This Reply to PHHs Response is made based upon the following Memorandum of Points and Authorities and the arguments of counsel at the Hearing of this matter. DEBTORS REPLY TO PHHS RESPONSE TO AMENDED OBJECTION TO PROOF OF CLAIM FILED BY J. P. MORGAN

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MEMORANDUM OF POINTS AND AUTHORITIES

AN ADVERSARY PROCEEDING SHOULD NOT BE REQUIRED

PHH first argues that the Debtors Objections to the Proof of Claim should allegedly be brought in an Adversary Proceeding. (PHHs Response, p. 3, l. 12-26.) Here, however, an Adversary Proceeding should not be required since the determinative issues present pure issues of law, not fact, that can be disposed of in the context of the Debtors Amended Objection to J. P. Morgans Claim. 11 U. S. C. 502 (b) (1) expressly provides that in this context, all that is required is notice and a hearing: If such objection to a claim is made, the court, after notice and a hearing, shall determine the amount of such claim in lawful currency of the United States as of the date of the filing of the petition, and shall allow such claim in such amount, except to the extent that such claim is unenforceable against the debtor and property of the debtor. (Emphasis Added.)

There is no need to engage in any discovery, hold any evidentiary hearings, or conduct a case within a case mini trial. Requiring an adversary proceeding would exalt form over substance and would unnecessarily delay, complicate and compound the proceedings in terms of time, money and effort. In short, requiring an adversary proceeding would directly violate the letter and spirit of Fed. R. Bank. P. 1001 that mandates that: These rules shall be construed to secure the just, speedy, and inexpensive determination of every case and proceeding.

In In re Wells, 407 B. R. 873, 875 (Bkrtcy. N.D. Ohio 2009), the Chapter 13 Debtor moved to disallow a Claim for a mortgage debt and the Court ruled without requiring any adversary proceeding that the claimant lacked standing to pursue the claim because, as here, the Note attached to its Proof of Claim was unendorsed and a creditors standing to file a proof of claim for prepetition debt must exist at the time the claim is filed.. Id., 407 B. R. at 882 (Emphasis added). Therefore the debtors objection is sustained , and claim 1 is disallowed in its entirety. Id., 407 B. R. at 875 (Emphasis added).

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Similarly, in this District, the Court has Ordered only an Evidentiary Hearing, not an adversary proceeding, in response to an alleged Creditors claim that an adversary proceeding was necessary to challenge the validity of a debt. In re Tate, file number 2:10-bk-15504-bam (Dkts. 70, 74, 75, 82 and 84).

If, however, the Court does conclude that an adversary proceeding is necessary, then the Debtors respectfully request that the Court please allow them adequate time to commence and prepare for an adversary proceeding.

ALL THE EVIDENTIARY OBJECTIONS SHOULD BE OVERRULED.

PHH objects to the admissibility of two Exhibits attached to the Debtors Amended Objection to Proof of Claim: Exhibit A and B, both of which were printed from the MERS website. All of PHHs objections should be overruled for all of the reasons set forth below:

A. THE COURT CAN TAKE JUDICIAL NOTICE OF THE EXHIBITS.

A bankruptcy court may take judicial notice ... of the docket entries ...in a case. In re 17 18 19 20 21 22 23 24 25 26 27 28 3 Here, both Exhibit A, which is a page from a MERS Procedure Manual that discusses the transfer of beneficial rights to a debt, and Exhibit B, which are MERS Terms and Conditions that also agree that MERS is not a vehicle for transferring beneficial interests in mortgage loans, were previously filed in this Court by MERS in the case of In Re Dart (# 2:08-bk-11007-lbr) (Exhibits to Dkt. 47). And, significantly, these same Exhibits are mentioned and used by this Honorable Court in deciding In re Mitchell, 2009 WL 10444368, p. 1 (Bkrtcy. D. Nev. 2009). Thus, the Debtors Sheckard, 386 B. R. 118, 124 f. 15 (Bkrtcy. E.D. Penn. 2008); Pursuant to Federal Rule of Evidence 201, the Court may take judicial notice of the contents of its own files. In re Murphy, 257 B. R. 72, 74 (Bkrtcy. N.D. Ala. 2000). Here the same Exhibits at issue have been previously filed in this same Court by MERS, which PHH claims is its agent in this case. ( PHHs Response, p. 5, l. 6-13.)

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respectfully request that this Court again take judicial notice of these same two Exhibits pursuant to Fed. R. Evid. 201 just as this Court did in In re Mitchell, 2009 WL 10444368 at p. 2

B. THE EXHIBITS ARE ADMISSIBLE BY REASON OF JUDICIAL ESTOPPEL.

Judicial estoppel is an equitable doctrine that precludes a party from gaining an advantage by asserting one position, and then later taking to their benefit a clearly inconsistent position. Neighbors v. Mortgage Electronic Registration Systems, Inc., 2009 WL 192445, p. 4 (N.D. Cal. 2009). And the Ninth Circuit has applied the judicial estoppel doctrine in the bankruptcy cases. See, e.g., Hamilton v. State Farm Fire & Casualty Company, 270 F.3d 778, 784 (9th Cir. 2001) (this court has held that a debtor who failed to disclose a pending claim as an asset in a bankruptcy proceeding where debts were permanently discharged was estopped from pursuing such claim in a subsequent proceeding).

Here, PHH is clearly trying to take inconsistent positions. PHHs claimed agent, MERS, filed these same Exhibits in In Re Dart (# 2:08-bk-11007-lbr) (Exhibits to Dkt. 47) as attachments to a Declaration by a Secretary of MERS that represented them to be a true and correct copy in support of its positions on the alleged proper handling of Notes and who may be a holder of Notes. Thus, PHH should be held to have waived, and be judicially estopped from asserting, all of the objections it is raising to these same Exhibits in this case.

C. THE EXHIBITS ARE NOT HEARSAY.

PHH objects claiming the documents are allegedly hearsay. But both Exhibits are specifically defined as not hearsay because they are admissions. Exhibit A states that MERS cannot transfer the beneficial rights to the debt. The debt can only be transferred by properly endorsing the promissory note to the transferee. (Emphasis Added.) Exhibit B also states that the MERS Commercial System is not a vehicle for creating or transferring beneficial interests in commercial mortgage loans. (Emphasis Added.) Those statements are admissions 4

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since they are inconsistent with PHHs position in this case. PHH claims that the MERS Assignment in this case allegedly transferred interest under the Note and Deed to J. P. Morgan. ( PHHs Response, p. 2, l. 18-19.)

A statement is not hearsay if it offered against a party and it was made by the partys agent concerning a matter within the scope of the agency . Younie v. Gonya, 211 B. R. 367, 376 (B.A.P. 9th Cir. 1997) citing Fed. R. Evid. 801 (d) (2) (D) (Emphasis Added.) Here, PHH expressly claims that MERS is its agent in this case. ( PHHs Response, p. 5, l. 6-13.) Moreover, admissions of a party are received as substantive evidence of the facts admitted and not merely to contradict the party. As a result, no foundation by first examining the party, as required for impeaching a witness with a prior inconsistent statement, is mandated for admissions. 2 McCormick on Evidence 254 (6th Ed. 2009) (internal citations omitted).

D. AUTHENTICATION AND FOUNDATION. Fed. R. Evid. 901 (a) provides that: the requirement of authentication or identification as a condition precedent to admissibility is satisfied by evidence sufficient to support a finding that the matter in question is what its proponent claims.

In Perfect 10, Inc. v. Cybernet Ventures, Inc., 213 F.Supp2d 1146, 1154 (C.D. Cal. 2002), the Court held that a Declaration adequately established authentication for documents posted on a website where the declarant stated that the exhibits in question were true and correct copies of pages printed from the Internet by the declarant. The Court in Perfect 10 held that the declarant met the prima facie burden because the declaration , particularly in combination with circumstantial indicia of authenticity (such as dates and web addresses), would support a reasonable juror in the belief that the documents are what Perfect 10 says they are. Id. citing United States v. Tank, 200 F.3d 627, 630 (9th Cir. 2000).

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Here, too, the accompanying Declaration of Charles R. Powell In Support of Debtors Amended Objection to Proof of Claim satisfies all the same requirements of foundation and authenticity. Moreover, the accompanying Declaration of Charles R. Powell illustrates that the website pages in question also comply with Fed. R. Evid. 901 (b) that provides that the following illustrations conform with the requirements of the rule on authentication or identification: (4) Distinctive characteristics and the like. Appearance, contents, substance, internal patterns, or other distinctive characteristics, taken in conjunction with circumstances. (Emphasis in original.) Here the website pages at issue which the Court can access for itself contain numerous distinctive characteristics in terms of their appearance, contents, substance, internal patterns and other matters that offer numerous indicia of reliability and authenticity. In this case the Court can readily access the website domain addresses provided and see for itself the web pages printed as Exhibits A and B.

In Rearden, LLC v. Rearden Commerce, Inc., 597 F.Supp.2d 1006 (N.D. Cal. 2009), the Court took judicial notice of the websites cited in the case. Id. at 1013, f.1. Fed R. Civ P. 201(b) allows the Court to take judicial notice of facts not subject to reasonable dispute which are capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned. That perfectly describes the MERS website print outs identified as Exhibits A and B. The Court in Rearden also denied and overruled numerous foundational objections based on the declarants alleged lack of personal knowledge:

Each of the denied objections is based upon the nonsensical proposition that an attorney cannot authenticate a print-out from a publicly accessible website. Plaintiffs repeatedly object that O'Shea has no personal knowledge of any of the information contained in the exhibits. O'Shea's declarations are not offered for the purposes of testifying to the substance of the various news articles and documentsthey are offered to authenticate the source of those documents, i.e., that they were actually downloaded from the internet addresses indicated. Reharden, 597 F.Supp.2d at 1027. The same situation is present here. The Declaration of Charles R. Powell is offered to authenticate that Exhibits A and B were actually downloaded from the Internet addresses

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indicated. Thus, an adequate foundation has been laid for Exhibits A and B and both of those Exhibits have been properly authenticated. They should both, therefore, be considered by the Court.

E. THE EXHIBITS ARE HIGHLY RELEVANT.

Finally, PHH claims the Exhibits are allegedly irrelevant. (Evidentiary Objections, 06/07/11, p. 2, l. 1 and 4.) However, these Exhibits are highly relevant in that they both contain material facts bearing directly on the question as to whether PHHs Proof of Claim is unenforceable against the Debtors and the Debtors property. 11 U.S.C. 502 (b) (1).

Except as otherwise required by the Uniform Commercial Code, a transfer of a mortgage also transfers the obligation the mortgage secures unless the parties agree otherwise. The Restatement (Third) of Property Mortgages 5.4 (b) (1997) (Emphasis added.) Here, both of the proferred Exhibits clearly show that he parties have precisely agreed otherwise. Thus, PHHs objection as to relevancy, together with all its other objections, should be overruled.

III.

THE PURPORTED ALLONGES ARE INVALID SINCE THEY WERE IMPROPERLY HANDLED. Since the Note here is payable to an identified entity, specifically PHH Mortgage

Corporation, its negotiation required both transfer of possession and proper endorsements: If an instrument is payable to an identified person, negotiation requires transfer of possession of the instrument and its endorsement by the holder. Nev. Rev. Stat. 104.3201 (2). Endorsement means a signature ... made on an instrument for the purpose of negotiating the instrument .... For the purpose of determining whether a signature is made on an instrument, a paper affixed to the instrument is a part of the instrument. Nev. Rev. Stat. 104.3204 (1) (Emphasis Added). Such a paper is called an Allonge. Kemp v. Countrywide Home Loans, Inc., 440 B. R. 624, 631 (Bkrtcy. D. New Jersey 2010). Significantly, to affix means to attach, add to, or fasten on permanently. Blacks Law Dictionary (9th Ed. 2009) (emphasis added).

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Here, the two (2) separate alleged Allonges only now produced by PHH prove that they were not permanently affixed to the Note. First, the alleged Allonges were not produced by PHH along with the Note attached to its Proof of Claim 17 filed on January 31, 2011. That alone proves that the two (2) separate alleged Allonges only now produced by PHH were not permanently affixed to the Note. Moreover, both of the alleged Allonges are undated, have no dated signatures, are not notarized, and PHH has failed to provide any evidence that either alleged Allonge was ever permanently affixed to the Note. The Court should therefore hold that PHHs Proof of Claim is unenforceable against the Debtors and the Debtors property. 11 U.S.C. 502 (b) (1).

The recent case of In re Weisband, 427 B .R. 13 (Bkrtcy. D. Ariz. 2010), is nearly on all fours with this case. The Weisband Court held that the purported servicer of a debtors home mortgage loan was not a holder of the note, with the right to enforce it, even though the purported servicer had possession of the note since the special endorsement to the purported servicer was on a separate sheet of paper and there was no indication the alleged allonge containing the special endorsement had been affixed to the note. Weisband, 427 B. R. at 19.

In Weisband, as here, the alleged undated endorsement was on a separate sheet of paper. Weisband, 427 B. R. at 15. A subservicer, GMAC Mortgage, LLC, filed a Proof of Claim that attached the Note and Deed of Trust; but, as here, an alleged undated endorsement from Greenpoint Mortgage Funding, Inc to GMAC was not attached to GMACs Proof of Claim. Weisband, 427 B. R. at 16.The Weisband Court thus held that:

A special endorsement to GMAC was admitted into evidence with the Note. However, for the Endorsement to constitute part of the Note, it must be on a paper affixed to the instrument. [Citations similar to Nev. Rev. Stat. 104.3204 (1) omitted).] Here, the evidence did not demonstrate that the Endorsement was affixed to the Note. The Endorsement is on a separate sheet of paper; there was no evidence that it was stapled or otherwise attached to the rest of the Note. Furthermore, when GMAC filed its proof of claim, the Endorsement was not included, which is a further indication that the allonge containing the Endorsement was not affixed to the Note. Weisband, 427 B. R. at 19 (Emphasis Added).

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Here, too, when PHH filed it Proof of Claim on January 31, 2011 along with a copy of the Note, no endorsements or Allonges were included, which is proof that the alleged Allonges containing the endorsements were never affixed to the Note permanently. They are therefore invalid as alleged endorsements which precludes PHH and J. P. Morgan from being a holder. In re Thomas, 447 B. R. 402, 411 (Bkrtcy. D. Mass. 2011) (If the purported allonge signed by Flagstar is not affixed to the note then despite having possession of the note, CitiMortgage lacks the status of being a holder); In re Tarantola, 2010 WL 3022038, p. 4 (Bkrtcy. D. Ariz. 2010) (the Allonge had not been attached to the Original, but to a copy. The Allonge, therefore, was never properly affixed to the Note and could not accomplish a transfer of the Note).

Here, both of the ostensible signatures of Karen Clark on the alleged Allonges are undated and not notarized. This also makes the alleged Allonges highly suspect. The Assignment of the Deed of Trust from MERS to J. P. Morgan, on the other hand, is precisely dated (April 19, 2010) and notarized. In re Canellas, 2010 WL 571808, p. 5 (Bkrtcy. M.D. Fla. 2010) (the veracity of the Allonge and Assignment is questionable .... The signature of Jennifer Henninger is undated and not notarized. The Allonge was not filed with Movants Motion.). The alleged Allonges in this case could have been drafted at anytime, even after PHH filed the Proof of Claim on January 31, 2011. But a creditors standing to file a proof of claim for prepetition debt must exist at the time the claim is filed.. In re Wells, 407 B. R. 873, 882 (Bkrtcy. N.D. Ohio 2009) (Emphasis added). 11 U. S. C. 502 (b) (1) expressly provides that: If such objection to a claim is made, the court, after notice and a hearing, shall determine the amount of such claim in lawful currency of the United States as of the date of the filing of the petition, and shall allow such claim in such amount, except to the extent that such claim is unenforceable against the debtor and property of the debtor. (Emphasis Added.)

Thus, PHH must prove that all signatures were made on an Allonge before PHH filed the Proof of Claim on January 31, 2011. In In re Shapoval, 441 B. R. 392, 392-393 (Bkrtcy. D. Ariz. 2010), Wells Fargo filed a Proof of Claim. The Debtor then filed an Objection arguing that the Note 9

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attached to the Proof of Claim failed to show any endorsements. Wells Fargo responded by producing a copy of an Allonge. The Court held that: Wells Fargo's standing to prosecute the instant Motion for Relief is dependent on whether the purported allonge which contains the indorsement on which Wells Fargo relies was affixed to the mortgage note.... An evidentiary hearing is required to determine whether the allonge was ever affixed to the note and, if so, when and what occurred thereafter. Id. at 394.

In In re Weisband, 427 B. R. 13, 19 (Bkrtcy. D. Ariz. 2010), the Court enforced the requirement that the Allonge be affixed to the original instrument and held that an unattached Allonge that was not included with a Proof of Claim and later submitted did not sufficiently prove a creditors holder in due course status required to obtain relief from the automatic stay. Similarly, in Kemp v. Countrywide Home Loans, Inc., 440 B. R. 624, 630 (Bkrtcy. D. New Jersey 2010), the Court denied relief to an alleged Creditor because the second element required to negotiate an instrument to the transferee, i.e., indorsement of the instrument by the holder, is also missing here. The alleged Creditor was denied relief because: In this case, we had neither a proper indorsement on the note itself, nor an allonge that was executed at the time the proof of claim was filed.. Id. at 631 (emphasis added).

As the Court made clear in In re Wells, 407 B. R. 873, 882 (Bkrtcy. N.D. Ohio 2009): A creditors standing to file a proof of claim for prepetition debt must exist at the time the claim is filed. (Emphasis added.). Similarly, in Weisband, 427 B. R. at 19, the Court noted that there was no proof that the allonge containing the special endorsement from GreenPoint to GMAC was executed at or near the time the Note was executed. As the Court explained in In re Sheridan, 438 B. R. 52, 57 (Bkrtcy. S.D.N.Y. 2010): However, in the absence of a credible explanation, describing how, when and from whom Wells Fargo derived is rights, relief from the stay will not be granted.

Here, the Declaration of Lawrence Riggs in Support of PHHs Response to Debtors Objection to Proof of Claim filed by J. P. Morgan dispositively states that as of the date of the 10

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execution of this declaration (May 31, 2011), J. P. Morgan Mortgage Acquisition Corp. is the current Note holder and is in physical possession of the Deed of Trust and Note executed by JOAN M. ANDERSON on June 18, 2007. (Dkt. 65, filed 06/07/11, p. 2, par. 5, l. 19-21.) (Emphasis Added.). Since the Declaration from Lawrence is dated May 31, 2011, this is decisive of the issue since PHH admits therein that it did not hold the Note and the Deed of Trust as of the date when it filed the Proof of Claim for J. P. Morgan on January 31, 2011, which is the determinative date. Thus, The Court should hold that PHHs Proof of Claim is unenforceable against the Debtors and the Debtors property as a matter of law.11 U.S.C. 502 (b) (1).

Finally, in In re DePugh, 409 B. R. 125,129 (S.D. Tex. 2009) the Court sanctioned the creditor and its counsel for, among other things, filing a proof of claim based on a debt without supporting documentation, and then amending its claim, without leave of Court, after the debtor filed an objection. That is precisely what PHH is proposing to do in this case: The original Proof of Claim did not include the Allonge(s) to Note, but will be amended to include the Allonge(s) to Note. (PHHs Response, p. 7, l. 15-17.) This should simply not be allowed by the Court.

IV. 17 18 19 20 21 22 23 24 25 26 27 28

THE SEPARATION OF THE NOTE AND DEED RENDERS THE ALLEGED DEBT UNENFORCEABLE AGAINST THE DEBTORS. Similarly, the Debtors Note has been split from her Deed of Trust because the Uniform

Commercial Code requires that result. In Vega v. CTX Mortgage Company, LLC, 761 F. Supp.2d 1095, 1097 (D. Nev. 2011), the United States District Court for the District of Nevada discussed the Rules set forth in the Restatement (Third) of Property Mortgages 5.4 (1997). The Court noted that 5.4 (b) states that: Except as otherwise required by the Uniform Commercial Code, a transfer of a mortgage also transfers the obligation the mortgage secures unless the parties agree otherwise. (Emphasis added.)

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Here, the Uniform Commercial Code does require otherwise. In this case, the UCC requires otherwise since the alleged Allonge was not affixed to the instrument, Nev. Rev. Stat. 104.3204 (1) (Emphasis Added). As indicated above, The UCC requires an obligation ( the Note) to be properly endorsed and transferred. But here the Note was not properly endorsed or timely transferred since there is no proof the alleged Allonges were permanently affixed to the Note when its Proof of Claim was filed.

PHH admits that J. P. Morgan only allegedly possessed the Note and Deed of Trust after PHH filed the Proof of Claim. Since PHH admits that the Assignment from MERS on April 19, 2010 separately transferred the Deed of Trust to J. P. Morgan (PHHs Response, p. 5, l. 14-19), PHH concedes that the Note and Deed of Trust traveled on divergent paths. While it is generally true that a mortgage travels a parallel path with its corresponding debt obligation, the parties in this case have adopted a process which by its very terms alters this practice. In re Agard, 444 B. R. 231, 247 (Bkrtcy. E.D.N.Y. 2011). Here, the proof that the alleged Allonges were not affixed to the Note when the Proof of Claim was filed makes the Uniform Commercial Code control regarding the splitting of the Note from the Deed of Trust.

PHH HAS FAILED TO PROVE THE CLAIM.

PHH mistakenly argues that its Proof of Claim is allegedly entitled to prima facie validity. (PHHs Response, pp. 6-7.) PHH also mistakenly argues that the Debtors allegedly do not deny that they owe the underlying debt. (PHHs Response, p.7, l. 19.) Both of these claims are wrong.

First, for all of the reasons set forth in their Amended Objection to Proof of Claim, and for all of the additional reasons set forth in this Reply to PHHs Response to Amended Objection to Proof of Claim, the Debtors contend that the debt is unenforceable against the Debtors and the Debtors property. 11 U.S.C. 502 (b) (1).

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The Debtors schedules do not concede any portion of the debt. In fact, the Debtors schedule A lists only the Debtors interest in the property and affirmatively asserts that the debt is unsecured. (See Dkt. 15 filed 12/06/10.) And here the debt is, in fact, unsecured since neither PHH nor J. P. Morgan is defined a secured lender. Nev. Rev. Stat. 40.506 defines the term Secured lender. Secured lender means the holder of an obligation secured by a mortgage. Blacks Law Dictionary, p. 800 (9th Ed. 2009) defines holder as: A person who has legal possession of a negotiable instrument and is entitled to receive payment on it. Pursuant to these definitions, neither PHH nor J. P. Morgan is a secured lender, since they are not entitled to receive payment on the Note, and the alleged debt is therefore unenforceable against the Debtors and the property of the Debtors. 11 U.S.C. 502 (b) (1). Thus, the Debtors do owe the underlying debt.

Moreover, PHH has the burden of proving its claim and has failed to do so. And for that reason as well, the debt is unenforceable against the Debtors and the Debtors property. PHH mistakenly claims that its Proof of Claim is allegedly entitled to prima facie validity. (PHHs Response, pp. 6-7.) But it is not. And that is because its Proof of Claim filed on January 31, 2011 lacked the necessary documentation namely any properly endorsed Note or affixed Allonges to support its claim. Unless a proof of claim is properly executed and filed in accordance with the rules, the proof of claim does not constitute prima facie evidence of the validity and amount of the claim. In re Minbatiwlla, 424 B. R. 104, 111 (Bkrtcy. S.D.N.Y. 2010) [citing Rule 3001 (f)]. Even the chief case PHH cites, In re Heath, 331 B. R. 424, 426 (B. A. P. 9th Cir. 2005) holds that: A proof of claim that lacks the documentation required by Rule 3001(c) does not qualify for the evidentiary benefit of Rule 3001(f) it is not prima facie evidence of the validity and amount of the claim.

As the Court held in In re Wells, 407 B. R. 873, 882 (Bkrtcy. N.D. Ohio 2009):

When a claim is not prima facie valid, the debtor need only object to the claim based on the applicable rules or statutes to place the burden of proof back on the claimant. Raleigh v. Illinois Department of Revenue, 530 U.S. 15, 20-21. 120 S. Ct. 1951, 147 L. Ed. 13 (2000)..... Even if the creditor responds to debtors objection, the creditor carries the burden of going forward as well as the ultimate burden of proof to establish its claim at the hearing on the substantive objection. 13

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Finally, and dispositively, PHH admits that the Debtors, in their Amended Objection to Proof of Claim, cite numerous cases that are comparable to their situation. (PHHs Response, p. 7, l. 23.) The only two cases cited by PHH claiming to support the refuted claim that MERS Assignments allegedly do not split the Note and Deed of Trust are non-Bankruptcy, trial court decisions that have not controlling on this Court and have no precedential value. (PHHs Response, p. 5, l. 20-28.) As the Court observed in In re Agard, 444 B. R. 231, 247 (Bkrtcy. E.D.N.Y. 2011):

In simple terms the Movant relies on the argument that a note and mortgage are inseparable. See Carpenter v. Longan, 83 U.S. 271, 274, 16 Wall. 271, 21 L.Ed. 313 (1872).While it is generally true that a mortgage travels a parallel path with its corresponding debt obligation, the parties in this case have adopted a process which by its very terms alters this practice where mortgages are held by MERS as mortgagee of record. By MERS's own account, the Note in this case was transferred among its members, while the Mortgage remained in MERS's name. MERS admits that the very foundation of its business model as described herein requires that the Note and Mortgage travel on divergent paths. Because the Note and Mortgage did not travel together, Movant must prove not only that it is acting on behalf of a valid assignee of the Note, but also that it is acting on behalf of the valid assignee of the Mortgage. (Emphasis added).

Thus, the Court should rule that the debt is unenforceable against the Debtors and the property of the Debtors as a matter of law.11 U.S.C. 502 (b) (1).

CONCLUSION.

For all of the foregoing reasons, the Debtors, Joan Maria Anderson and Todd J. Shelly, respectfully request that the Court issue an Order declaring that the claims asserted by J. P. Morgan and PHH are unenforceable against them and their property and denying PHHs Motion for Relief from the Automatic Stay for all of the reasons set forth herein.

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1 2 3 4 5 6 7 WHITEHEAD LAW OFFICES 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15 Attorney for Debtors Joan Maria Anderson and Todd J. Shelly ____/s/ Jeffrey J. Whitehead__________ Jeffrey J. Whitehead, Esq. Nevada Bar No. 3183 Whitehead Law Offices 2431 W. Horizon Ridge Pkwy. Suite 110 Henderson NV 89052 VOX: (702) 451-7272 FAX: (702) 451-2947 email: jeff@whiteheadlaw.org DATED July 1, 2011. Respectfully submitted,

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CERTIFICATE OF SERVICE

It is hereby certified that the foregoing DEBTORS REPLY TO PHHS RESPONSE TO AMENDED OBJECTION TO PROOF OF CLAIM FILED BY J. P. MORGAN was sent July 1, 2011 to the persons, listed below, through the Courts electronic service system:

Kevin Hahn, Esq., on behalf of Creditor PHH Mortgage Corporation kevin@mclaw.org Cindy Stock, Esq., on behalf of Creditor PHH Mortgage Corporation clstock@lvcoxmail.com Jeffrey Sloane, Esq., on behalf of Creditor Wells Fargo Bank, N. A. jsloane@kssattorneys.com Rick A. Yarnall, Trustee, ecfimport@lasvegas13.com Arun Gupta, Esq., on behalf of Debtors attorney@theguptalawfirm.com

It is also hereby certified that the foregoing DEBTORS REPLY TO PHHS RESPONSE TO AMENDED OBJECTION TO PROOF OF CLAIM FILED BY J. P. MORGAN was sent July 1, 2011 to the following person(s) by the following method(s): X9 U.S. Mail, by depositing a true and correct copies of same in the United States Mail, postage prepaid at Henderson, Nevada, to the persons at the addresses listed below: Joan Maria Anderson, Debtor Todd J. Shelly, Debtor 8570 West LaMadre Way, Las Vegas, Nevada 89149

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CERTIFICATE OF SERVICE (CONTINUED)

It is also hereby certified that the foregoing DEBTORS REPLY TO PHHS RESPONSE TO AMENDED OBJECTION TO PROOF OF CLAIM FILED BY J. P. MORGAN was sent July 1, 2011 to the following person(s) by the following method(s):

U.S. Mail, by depositing a true and correct copies of same in the United States Mail, postage prepaid at Henderson, Nevada, to the persons at the addresses listed below:

PHH Mortgage Corporation 2001 Bishop Road Mount Laurel, NJ 08054 PHH Mortgage Corporation C/O Its Registered Agent for Service of Process CSC Services of Nevada, Inc. 2215-B Renaissance Drive Las Vegas, Nevada 89119 J. P. Morgan Chase Bank, N. A. C/O Its Registered Agent for Service of Process The Corporation Trust Company of Nevada 311 South Division Street Carson City, Nevada 89703

______/s/ Charles R. Powell___________ WHITEHEAD LAW OFFICES

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