Kimberly Miller of the Palm Beach Post has written yet another article about the events surrounding the attempted fancy pants cancellation of mortgages in Florida by several known or even notorious, debt relief players.
The summary of recent court opinions about the efforts of the individuals and/or enterprise is certainly not favorable. Conspiracy theorists will say this is because of some widespread governmental corruption designed to stop people from canceling their mortgages. Other people, like judges and the Florida Attorney General, will say the efforts to sell these services to consumers are based on something a whole lot simpler to understand. I think if there was a word many judicial opinions wanted to use it would have been “bullshit.”
One federal judge said the foreclosure avoidance or cancellation efforts of the instigators was “meritless, frivolous and have “absolutely no chance of success.” That conclusion was affirmed by a federal judge in a Dec. 27 order.” – Source
“A state judge has told plaintiff (Fidelity) that its legal theory is meritless; a federal judge has told plaintiff its legal theory is frivolous; and the Florida Attorney General has obtained injunctive relief against plaintiff,” wrote federal District Judge Roy Dalton in the Dec. 27 order. “Yet even in its objection, plaintiff clings to the notion that its claims have merit. They do not.”
Despite the disbelief that the efforts are founded in supported legal theory, the enterprises have sold consumers services, for an advance fee, in hopes of canceling their mortgages.
The operations have been exceedingly opaque about which individuals are actually behind the operations which are layered in striations of ownership. I’ve previously investigated this here and here and have been left with more questions than answers. But the Palm Beach article shed a bit more light on “possible” responsible players.
“The Broward court order by Judge Gates says Fidelity Land Trust was organized in December 2011 by Parkland resident Edward Cherry, using a fictitious name.
In a June article about Fidelity, The Palm Beach Post tied Cherry to the company through his registered fictitious name Edward C. Tudor.
Cherry, who is not an attorney, was permanently barred in a 2009 consent judgment by Florida’s attorney general from dealing in consumer debt-settlement services after a state investigation concluded companies he was involved with “diverted millions of dollars to themselves and a coterie of families and associates.” – Source
Gates’ order denying a request to cancel the state’s asset freeze was in response to a motion by defendant Paul Gellenbeck, who says he is Fidelity’s director of operations. Gellenbeck maintains there are actually two Fidelity companies — Fidelity South, which he runs, and Fidelity North, run by defendant Lawrence Diodato.” They run them but who owns them?
According to one commenter on this site, “Ed Cherry bankruptcy deposition and he clearly stated in it that the beneficial owners of Fidelity Land Trust Partners were none other than Larry Diodato and his wife. Cherry also claimed that he worked for Larry in that same deposition.” I have not seen the deposition.
One lesson Fidelity Land Trust reinforces is that if a company is selling you debt relief services and is unwilling to be open and transparent about who they are and who owns the company, you need to be careful about moving forward. If they are trying to hide the basic information you have to wonder why.
“Royal Palm Beach-based defense attorney Tom Ice, who tangled with Fidelity to retrieve a client’s deed, said he thinks it will be hard to recover from such sternly worded judicial decisions.
“Faced with this scathing order from a federal judge,” Ice said, “I would definitely have second thoughts about moving forward.” – Source
From the recent court documents referenced above
The Fidelity Land Trust Company, LLC (Fidelity) was organized by Defendant Edward Cherry (Cherry) in December of 2011 using a fictitious name. Cherry, Defendant Lawrence Diodato (Diodato) and Defendant Paul Gellenbeck (Gellenbeck) are individuals who participate in or otherwise control or have the authority to control the deceptive acts or practices hereinafter described.
Cherry and Diodato have been partners or owners of Fidelity Land Trust Partners which until September 5, 2012 was the managing member of Fidelity according to the public records filed with the Florida Secretary of State. There is presently no manager of Fidelity according to the public records filed with the Florida Secretary of State. Cherry and Diodato are participants in the operation of Fidelity through Defendants Esquire Litigation Support, LLC and/or EsqIitigationsupport.Com, LLC and/or otherwise have control authority. Gellenbeck also is a participant in the operation of Fidelity as a partner or owner and/or otherwise has control authority.
There is no evidence that there are two legally separate entities comprising The Fidelity Land Trust Company, LLC as asserted by Gellenbeck in his affidavit and which Gellenbeck refers to as “Fidelity North” and “Fidelity South”.
Fidelity induces consumers to pay Fidelity to take title to the homeowner’s property through a “Land Trust”. Fidelity gives no consideration to the homeowner for this title transfer. Fidelity engages counsel to file “quiet title” actions against consumers’ mortgagees to obtain default judgments declaring the homeowner’s original mortgage is canceled or otherwise void, falsely alleging that the “Land Trust” is a subsequent purchaser for value although Fidelity gives no consideration for the title transfer to the “Land Trust”. The consumer remains owing the note to the original mortgagee while making payment to Fidelity for a “new” mortgage.
Notwithstanding the legal distinction between the title to real estate and the lien interest of a mortgage holder, Fidelity misrepresents to Florida homeowners the legal effect of its services as a mechanism for avoiding foreclosure and/or mortgages greater than the home’s market value (“upside-down”) when there are no conflicting claims of title, only claims of title and mortgage lien(s). Fidelity deceptively and/or unfairly solicits, markets and advertises to homeowners in the State of Florida that Fidelity can obtain clear title as subsequent purchasers and avoid the original mortgage obligation of the homeowner.
In making these deceptive and/or unfair representations, Fidelity represents to consumers that it can cancel or otherwise void a distressed homeowner’s then-current “upsidedown” mortgage and replace it with a new affordable mortgage that has a lower principal and lower monthly payments. Fidelity deceptively and/or unfairly represents to homeowners that a previously recorded mortgage is unenforceable and void against Fidelity because the mortgage was assigned but the assignment was not recorded.
Fidelity’s representations are false and deceptively and/or unfairly mislead consumers and are contrary to the established law of Florida that the provisions of Florida Statutes Chapter 701 do not protect transferees of the homeowner/mortgagor. See JP Morgan Chase v. New Millennial, LC, 6 So. 3d 681, 685 (2d DCA 2009), review dismissed, 10 So. 3d 632 (Fla. 2009) (Chapter 701 does not protect the mortgagor, nor anyone “claiming under a mortgagor.”). See also Rhodes v. JPMorgan Chase Bank, N.A., 2012 WL 2504043, *3 (S.D. Fla. June 28,2012) (“Likewise, a failure by Defendant to record its assignment is ‘applicable only to and enforceable by competing creditors or subsequent bona fide purchasers of the mortgagee, not by the mortgagor.” JP Morgan Chase v. New Millennial, LC, 6 So.3d 681, 685 (Fla. 2d DCA 2009)”).
Despite the established principles of law, Fidelity has misled numerous consumers within Florida since 2011.
Fidelity is making false and deceptive or unfair promises and representations to consumers in order to induce consumers to transfer title to their homes to Fidelity for no consideration and to pay Fidelity thousands of dollars in advance fees for services that cannot be delivered.
Fidelity’s acts and/or practices violate Florida Statutes Section 501.1377(3), which prohibits any person providing foreclosure-related rescue services from charging an upfront fee prior to the completion of the services. Fidelity charges up-front advance fees for foreclosure-related rescue services. Fidelity is a person providing foreclosure-related rescue services. Fidelity is not an attorney providing foreclosure-related rescue services as an ancillary matter. A violation of Florida Statutes Section 501.1377 is a per se violation of FDUTPA.
Fidelity’s acts and/or practices violate Florida Statutes Section 501.1377(5), which requires any person engaging in foreclosure-rescue transactions to afford certain specific rights to the homeowner. Fidelity does not afford to the homeowners the rights mandated by Florida Statutes Section 501.1377(5). Fidelity is a person engaging in foreclosure-rescue transactions. Fidelity is not an attorney providing foreclosure-related rescue services as an ancillary matter. A violation of Florida Statutes Section 501.1377 is a per se violation of FDUTPA.
Gellenbeck participates in Fidelity’s activities as the Director of Operations and spends 100% of his working time overseeing Fidelity’s day-to-day operations.
Cherry and Diodato endeavor to hide their participation in and/or control of Fidelity by having other individuals undertake activities on their behalf and/or by taking title to homes in the name of The Sunshine State Land Trust Company, LLC. – SourceFidelity Land Trust, Ed Cherry, Larry Diodato, and Paul Gallenbeck Back in the News by Steve Rhode