Case 3:13-cv-05029-RBL Document 12 Filed 05/22/13 Page 1 of 5

1 2 3 4 5 6 7 8 9 10 11 12 vs. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 In the response to the Courts May 21, 2013 Order to Show Cause re: why the undersigned should not be banned from practicing United States District Court for the Western District of Washington, Plaintiffs Counsel Robert J. Penfield submits the following: 1. First, I apologize to the Court for this response being 7 and one half hours late. My Defendants. JPMORGAN CHASE BANK, NATIONAL ASSOCIATION; CHASE HOME FINANCE LLC (a subsidiary of Chase Home Finance Inc.), a Delaware corporation; and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., a Delaware Corporation, ROBERT T. and ELIZABETH J. KELLY, husband and wife and the marital community composed thereof; PEAK TO BEACH INVESTMENTS, LLC, an Active Washington Limited Liability Company, Plaintiffs, Case No.: 3:13-cv-05029-RBL PLAINTIFFS COUNSEL ROBERT J. PENFIELDS RESPONSE TO THE COURTS ORDER TO SHOW CAUSE WHY MR. PENFIELD SHOULD NOT BE BANNED FROM PRACTICING IN THIS DISTRICT UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WASHINGTON AT TACOMA THE HONORABLE RONALD B. LEIGHTON

day yesterday was booked solid from 7 a.m. to 11:30 p.m. with business-related meetings, and I was unable to meet my obligation to find an hour to sit quietly and type this response. Monday the 20th was similar in schedule, as were May 15 17. My weekend is my only time with my 5 year old Daughter Paige, since being freshly divorce from her Mother on April 29, 2013, and Saturday PLAINTIFFS COUNSEL ROBERT J. PENFIELDS RESPONSE TO COURTS MAY 13, 2013 ORDER TO SHOW CAUSE - 1 PENFIELD LEGAL SERVICES, PLLC
11661 SE 1ST STREET, SUITE 100 BELLEVUE, WA 98005 425-770-4245

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and Sunday were booked solid with 5-year-old girl-related things, which is how I keep my heart from exploding from too much work and too little time with my three kids. No disrespect is intended to the Court personally or professionally by this failure. 2. Regarding my practice in general, I have been an attorney since 1995, and an

attorney focusing on real estate litigation since 1999. For most of that time I have been a solopractitioner or a partner in small firms with only one other partner, and from the birth of my daughter Paige in 2007, worked mostly out of my home. After enduring my ex-wife Jackis daily screeching that I should get out of the house and open a public office from the day after we married in 2006, I finally decided to do so on January 1, 2012. I was interested in expanding my practice to include litigation regarding faulty and illegally securitized mortgage loans based on in depth study of the subject during 2011, with an eye toward helping as many homeowners who found themselves hopelessly underwater on their residential mortgages. 3. As part of that practice, I used a Forensic Auditor/Office Manager named Lori

Gileno, who came highly recommended, and who would provide the evidentiary basis for my cases with her Bloomberg audits of my clients files. Ms. Gileno was paid $24,000.00 in funds received by my office through flat litigation fees (rather than as costs) to produce 32 forensic audits in August of 2012, and was placed in June of 2012 in the position of my general Office Manager, with responsibility for installing a new case management procedure, new software and hardware, and for hiring, training and firing the other independent contractors I was using in my practice. In this role she utterly failed, having by the end of September produced only 4 forensic audits that were filled with major errors, and using the majority of her time planning for her wedding. I terminated her work in my office in late September 2012 after she sent me a text message during a very busy day which said I hope you have a great day, the FBI is on its way to shut you down. Which, of course, was a lie. 4. As a solo-practice law-firm, it sometimes occurs that checks for independent

contractors are paid not on the dates I intend to pay them, which in my case was the 7th and 22nd of PLAINTIFFS COUNSEL ROBERT J. PENFIELDS RESPONSE TO COURTS MAY 13, 2013 ORDER TO SHOW CAUSE - 2

PENFIELD LEGAL SERVICES, PLLC

11661 SE 1ST STREET, SUITE 100 BELLEVUE, WA 98005 425-770-4245

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each calendar month. On October 7, 2012, I did not have enough cash to pay my contractors, all of whom were laboring under the incorrect impression that they were employees rather than independent contractors, and when I advised them they would be paid on October 9, 2012, I began to receive threatening e-mails and texts from several of them, which of course resulted in their contracts being immediately terminated. 5. Ms. Gileno, being a vengeful sort, thereafter carried through with one of the

terminated ICs threats and staged a street protest outside my office on a busy thoroughfare, complete with a large banner and signs, much waving and the expected honking of many commuter horns by people who had exactly zero information as to what the truth of the dispute with my office was. The coup de grace was applied by Ms. Gileno when she called Essex Porter, wannabe Jesse Jones from KIRO 7 News, and had him appear with his cameraman on the street corner to listen to my ex-ICs sad tales of woe (all untrue, but very video-genic), whereupon he burst into my office conference room unannounced, camera filming and accused me of abusing my clients and employees, based only on the statements of Ms. Gileno and my former ICs. This confrontation was during a meeting with a now former client, and was aired on KIROs news station 5 times that night, with a predictable result: My law practice was for all intents and purposes destroyed that day. 6. Since October 9, 2012, I have endeavored to rebuild my practice with new

independent contractors, and had partially succeeded during November and December of 2012, despite my wife of 7 years divorcing me, my moving out in January of 2013, my loss of my family as a result, and the many demands on my time that result from having 85 clients who daily demand their work to be done but not having the resources or good reputation because of the October 9, 2012 incident to hire and keep quality ICs, and of course the inevitable Bar Complaints that result from disgruntled clients who feel I have not carried through with the promises I made to them in 2012 prior to going from a fully staffed and functional office to one that has no staff. I work every day, with the exception of my days with my 5-year old daughter, and see my ex-step kids (13 and PLAINTIFFS COUNSEL ROBERT J. PENFIELDS RESPONSE TO COURTS MAY 13, 2013 ORDER TO SHOW CAUSE - 3

PENFIELD LEGAL SERVICES, PLLC

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16) infrequently, and despite the severe threat to my license presented by my Bar Complaints, I come to the office every day determined to keep my promises to my clients and family. I would say that 99% of attorneys faced with a similar situation would simply quit, file bankruptcy, and do something else much easier to handle with their lives, but I have not chosen that path. 7. Regarding the Mr. Hansens case, Mr. Hansen did not pay me to represent him and I

found after filing that case that he did not wish to pursue it, so it was allowed to dismiss. On reflection, I should have voluntarily dismissed the case rather than allowed Judge Coughenour to dismiss it. That choice was not made, however. 8. Regarding Mr. Fagerlies case, neither Mr. Fagerlie or I wish to litigate his case in

the Federal Courts, having seen all the judges before which I have filed Motions to Stay NonJudicial Foreclosure Sales during January through March 2013 use the FRCP for issuing a Preliminary Injunction, FRCP 65, rather than the proper standard for ruling on such a motion, RCW 61.24.130 for a piece of threatened Washington real property, to deny those motions, resulting in numerous emergency bankruptcies being filed to prevent the loss of my clients homes as a direct consequence of the Judges failure to apply the correct standard. Mr. Fagerlie and I both agree that litigating in State Court was preferred and his case was allowed to dismiss. 9. Regarding Mr. Alexanders two cases, during the month that those cases were

dismissed, I simply did not have the wherewithal or the time to respond to the Courts motion, and was also in the midst of the final two weeks of the destruction of my marriage and my moving from the family home to a rented room in a retired ladys house in Kirkland. No disrespect was intended to the Court by my failure, which I acknowledge, and the client has been referred to very competent new counsel and I am helping my former client on my own time when he asks that I speak to his new attorney regarding my knowledge of the cases. The two cases related to separate real property and one does not bar the other. 10. Regarding the instant case, I have had numerous discussions regarding dismissing

MERS from the case with counsel opposite, and intended to do so, but have not had the time. In a PLAINTIFFS COUNSEL ROBERT J. PENFIELDS RESPONSE TO COURTS MAY 13, 2013 ORDER TO SHOW CAUSE - 4

PENFIELD LEGAL SERVICES, PLLC

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phone message I left with him several weeks ago, I asked that he draft the stipulation for doing so, but apparently Mr. Hughes did not recall this message (which may have been a phone conversation, I do not recall exactly) when he appeared before the Court on May 14, 2013. 11. On May 14, 2013, I was asked by my ex-wife the night before to pick up our three

children and deliver them to their school, and believed that I could do so and still make it to the hearing. I was wrong. I did attempt to call counsel opposite and advise him that I would be late for the hearing, and my failure to appear was not intentional. I spoke with him shortly after the hearing, and will comply with Your Honors case schedule hereafter. 12. In the last two weeks, I have had a retired judge volunteer his time to me full time, in

an effort to help me keep my promises to my many angry clients. He is helping me re-organize my office and keep on top of deadlines, and relieving some of the stress I have been under in the last 9 months and in particular in the last 5 months as I have struggled to maintain my practice alone, in the face of possible Bar Association sanctions in September. 13. While it would be very easy at this point simply to walk away from this career, given

the last three years I have suffered an unfaithful wife and the destruction of my marriage and loss of my family, loss of six houses in the real estate crash and a failed house-flipping business, and destruction of my business by a dishonest independent contractor. I dont believe that would be in the best interest of my remaining clients, so I continue to battle daily for them. 14. With respect to the Court, I do not feel the above shows good cause for my banning

from practice in this District, though such a banning might result in a well-deserved rest. This last comment containing no sarcasm whatsoever, but merely a statement of exhausted fact. Your Honor is respectfully requested to utilize the Wisdom of Solomon and considerable Mercy in making this decision. Dated and signed at Bellevue, Washington this 22th day of May, 2013. /s/ Robert J. Penfield _____________________________________ Robert J. Penfield, WSBA # 25081 Counsel for Plaintiffs PLAINTIFFS COUNSEL ROBERT J. PENFIELDS RESPONSE TO COURTS MAY 13, 2013 ORDER TO SHOW CAUSE - 5 PENFIELD LEGAL SERVICES, PLLC
11661 SE 1ST STREET, SUITE 100 BELLEVUE, WA 98005 425-770-4245