There may be a silver lining in the case Paatalo v. JPMorgan Chase Bank NA, et al. Public records available through PACER reflect that Plaintiff filed a pro se lawsuit against four defendants alleging illegal foreclosure and contested the defendant's standing as beneficiary of his Deed of trust. It appears that Defendants answered with no counter-claims sought. His loan was believed to be securitized into a private trust, WAMU Mortgage Pass-Through Certificate Series 2007-OA3 Trust. Defendants claimed that the Trust was the owner/beneficiary of his Deed of Trust.
In his complaint Plaintiff stated that he was ignorant as to the true names and capacities of the defendants and that he would amend the true names and capacities if and when ascertained. He sued all parties as agents of one another, acting within the scope and authority as agents of one another. He initially named one of the defendants as successor trustee of the Trust.
In answering the complaint the alleged successor trustee, Mackoff Kellogg Law Firm, stated he was without knowledge sufficient to form a belief as to whether or not he was an agent of the others or "successor trustee" of the Trust but would deny the allegation.
During discovery Plaintiff sought to ascertain the true capacities and authorities of all parties. He requested the agent agreements and contracts between the parties showing their scope of authority. All parties objected and refused to clarify their legal authorities on the grounds of confidentiality.
As the case progressed Mackoff Kellogg repeatedly identified itself in all motions and responses as Successor Trustee of the Trust. He contacted all defendants as he was concerned about Mackoff Kellogg's continued statements of being successor trustee of the Trust and if untrue to clarify, change or correct. No action was taken though two inquiries were made.
After fourteen months of litigation Plaintiff reached a confidential settlement agreement with the Successor Trustee of the Trust. US Magistrate Judge Carolyn S. Otsby reviewed the "Joint Stipulation to Dismiss with Prejudice" and informed all parties that they had fourteen days to object. Before the Judge alerted all parties of the 14 days notice to object, Plaintiff contacted the remaining Defendants and stated that he had settled with the Successor Trustee of the Trust and that the agreement contained a mutual release of all claims now and in the future. Plaintiff had thus settled all matters with the Trust through its agent the Successor Trustee. He pointed out that the Trust/Beneficiary would have no further claims to his property. The remaining parties disagreed however none of them filed an objection to the Settlement with the Court during the 14-day period to object and the Judge eventually signed off. Plaintiff's claims against the remaining defendants were dismissed on June 28, 2012 with prejudice on summary judgment due primarily to technical gaffes on his part.
Since all parties failed to take action to clarify or correct their authorities, nor to provide their authorities in discovery, and as Plaintiff took reliance on their stated authorities when signing the settlement agreement, the question arises "is Plaintiff protected?". Could the Court at a future date attempt to tear into the confidential settlement agreement and attempt to invalidate it?
The judge actually tried to help the remaining defendants by giving them additional time to object. She saw the language, "COMES NOW Mackoff Kellogg Law Firm, Charles Peterson, as Successor Trustee of the WaMu Mortgage Pass-Through Certificate Series 2007-OA3 Trust." Instead of objecting, Chase tried to bring the settled parties back into the case, but the Judge denied. This strategy back-fired on Chase.
A highly experienced, thirty-year attorney "bizlaw" at the expert online Just Answer provided this answer:
The settlement agreement would bind all persons who were parties to the lawsuit if they did not challenge the authority of the trustee to enter into the settlement agreement on the basis he or it was not authorized to act on behalf of them. Because they had the opportunity to object, the approval of the settlement will be res judicata and those parties will be precluded from challenging the settlement. Plaintiff operated on the basis that Successor Trustee had authority which was apparently not denied. The Court gave any party the opportunity to object. That failure to object is what makes it res judicata.
The following are from PACER:
UNITED STATES DISTRICT COURT
William J. Paatalo, "Pro Se",
J.P. Morgan Chase Bank, N.A., et al.
Case No. 1:10-cv-00119-CSO-RFC
JOINT STIPULATION TO
DISMISS WITH PREJUDICE
/s/ Jason J. Henderson
Jason J. Henderson, Attorney #11414
Attorney for Defendant MACKOFF KELLOGG LAW FIRM – Charles J. Peterson as successor TRUSTEE
/s/ William J. Paatalo
William J. Paatalo
Plaintiff, Pro Se