Appellate Court Weighs In

Posted June 2nd, 2009 by Joe Kaiser

State law says that such a surplus rightfully belongs to the person who owned the property. - AAG David Huey

Dear Rob,

For the last few years you’ve been calling me a scam artist, saying the overage funds we claimed actually belong to former owners who sold us their properties because the law, RCW 84.64.080, says so.

You even sued me over it and won, obtaining a judgment that included nearly $650k in restitution to these same owners in repayment of the overage funds we collected.

I beg to differ

Of course, we’ve said time and time again the law says no such thing and could not possibly say such a thing. We bought properties and, as owners, any profits we created were ours to keep.

Who’s right?

The Court of Appeals ruled on your interpretation of RCW 84.64.080 today, forever answering the question, “Who gets the money?”

In this corner

Put succinctly, (and straight from the horse’s mouth), here’s your position . . .

After taxes are paid from the sale price, there may be substantial money left over. State law says that such a surplus rightfully belongs to the person who owned the property (when the suit to foreclosure was filed).— Assistant Attorney General David Huey

And here is mine . . .

A property owner in tax foreclosure is free to sell me his property, including any claim to future overage funds that may materialize at the tax sale. And once sold, his rights become my rights.Joseph M. Kaiser

The ruling

But who cares what I think? Here’s what the Court of Appeals, Division II, State of Washington has ruled . . .

Because RCW 84.64.080 was intended to protect the treasurer in paying out tax sale proceedings and not to determine ownership or prevent a tax-delinquent property owner from selling his or her interests, we reverse and remand for the trial court to determine who actually owned the property at the time of the sale.

Who owned the property at the time of the sale?

That would be me, and, as such, I am the rightful owner of the overage funds in question. The ruling continues . . .

. . . the trial court erred in finding the assignment void under RCW 84.64.080 because the procedural nature of RCW 84.64.080 has no impact on determining the rightful owner of the proceeds. –Authored by Judge David H. Armstrong,
Concurring Judge J. Robin Hunt and
Judge Marywave Van Deren

Here’s the complete Court of Appeals Opinion.

The State v. Kaiser

We can now be certain RCW 84.64.080 has “no impact” on the ownership of overage funds. None, and it never did, in spite of the ridiculous claims your office made to the Court and in the press suggesting it did.

Likewise, we can now be certain that contrary to your office’s farcical contentions, the law does not unconstitutionally reinvest former owners with rights to claim proceeds from properties they’ve long since sold.

The Damage is done

With zero consumer complaints, this investigation started because Pierce County Prosecuting Attorney Bob Dick, upset about paying us overage funds (the County prefers to keep the funds), told your office we were violating RCW 84.64.080.

We weren’t, and Bob Dick was 100% in error.

As were all the county treasurers who told former owners “the law says it’s your money.” It doesn’t. Yes, Lisa and Barbara and Steve and Rose and Phil and McGoon and all the rest of you who said we’d scammed sellers by simply buying their properties (and paying them in full), we didn’t.

Also 100% in error was former AAG Cheryl Kringle, as are AAG David Huey and AAG James Sugarman today.

As are you and your office, Rob, about what we investors do. 100% wrong. Buying properties in tax foreclosure and using the sale as an exit strategy is not a scam and never was.

Overage Plays

And yes, it’s really that simple . . .

We bought junk properties in tax foreclosure, let them continue on to sale in hopes there’d be an overage, and the Court of Appeals has now confirmed any overages those sales created are ours to keep.

100% ours, in fact, and EXACTLY what I’ve been saying all along.

It begs the question, “How could the Attorney General of the State of Washington be so completely wrong regarding basic, fundamental property rights?”

I shudder at the very thought.

In the arena,

Joe Kaiser

19 Responses to: “Appellate Court Weighs In”

  1. Christopher B. responds:
    Posted: June 2nd, 2009 at 1:38 pm

    Congratulations Joe!

    How rewarding it can be to take your case to a judge who doesn’t buckle under political pressures and interprets the law as a person of REASONABLE MIND would.

    Hopefully this is the first step to restoring rights to investors AND homeowners in your area.

    What a sad day it was when the state of Washington decided that property owner’s didn’t have the ability or right to negotiate a sale for a property that THEY OWN. It should be fun to see how this unwinds.

  2. Chris responds:
    Posted: June 2nd, 2009 at 4:14 pm

    Congrats Joe. I don’t know how much the rule of law matters anymore. Almost surprised to see a sane ruling.

  3. Drew responds:
    Posted: June 2nd, 2009 at 8:31 pm

    Ut oh, it looks like things are falling apart for the state. Poor guys, when the appeals start, they actually start looking at evidence. It’s going to be a sad time for Washington Taxpayers. The wasted money of the original case, and then all the restitution they will have to pay back to Joe.

  4. Chris responds:
    Posted: June 4th, 2009 at 12:24 pm


    How does this ruling effeect the rest of the case against you now? What’s the big picture at this point?

  5. Jack responds:
    Posted: June 5th, 2009 at 6:19 pm

    Thank you Joe for your hard work. Not just for you, but for all investors!

  6. Joe Kaiser responds:
    Posted: June 5th, 2009 at 8:00 pm

    The “big picture” is there is a long way to go.

    The AG’s office has successfully tangled things up to create the appearance of a scam, and disentangling their mess won’t be easy or happen soon.

    I’ll continue to do whatever I can for as long as i can to bring the truth to light.

  7. Chris responds:
    Posted: June 6th, 2009 at 9:34 am

    This story is worth reading (click here).

    Wendy McElroy writes of yet another wrongful conviction and later exoneration, this time in Ohio. The details are depressingly familiar: a crime is committed, the police zero in on a suspect, and then refuse to follow the trail to an obvious perpetrator. The prosecution pounds the square peg into the round hole and the jury — yes, another American jury — buys into the nonsense, since prosecutors always are right, even when they are not:

    The Dayton Daily News reports, (Private Investigator Martin) Yant can tick off a laundry list of other problems with the [Elkins] case: sloppy police work, haphazard investigation, authorities rushing to judgment, incomplete forensics.

    Yant has written that he believes about 10,000 people in this country are wrongfully convicted each year. Of course, with all of the weapons that prosecutors are able to use, I suspect that even more people who are innocent are coerced into guilty pleas just because they don’t have the resources to fight the state.

  8. Chris responds:
    Posted: June 6th, 2009 at 9:37 am

    William Anderson continues these thoughts on this case in his blog:

    It is my belief that there are no excuses at all — none — for wrongful convictions. The forensic science is there to use, and everyone in the system is well aware of the real pitfalls in eyewitness indentifications. However, the problem is twofold. First, prosecutors rarely care. They are the products of law schools that preach winning at all costs, and since most of them either are elected or have political ambitions, being tough on crime is a requisite item on their resume, and being reflective and being thorough to make sure no errors are made simply is not being tough.

    Second, prosecutors can operate under cover of immunity. In most professions, people who make serious errors of judgment that result in real harm done to others are held accountable for their actions. Prosecutors, on the other hand, are protected by immunity.

    Just as we saw reckless behavior on behalf of people on Wall Street who knew their backs were covered by the Greenspan and Bernanke Put, prosecutors are covered by policies of immunity that protect them no matter how dishonest, illegal, and terrible their conduct. If one wishes to live a life of crime, I would tell that person to become a prosecutor, since the state always will seek to cover its own.

    Michael Nifong never really had to pay for his crimes in the Duke Lacrosse Case. Even now, the system is bending backward to protect the police and Nifong for all of their lying, fabricating evidence, and criminal behavior. That is what immunity does: it enables those who enforce the law to break the law with impunity and pay no price for it.

    Details about the case are here.

  9. Tom Tuttle From Tacoma responds:
    Posted: June 7th, 2009 at 10:24 pm

    Wow, great news. Great job hanging in there, Joe. May this continue to play out in your favor. Amazing to see some justice in our “Justice System” for a change.

  10. Christopher B. responds:
    Posted: June 9th, 2009 at 6:11 am

    Have you been following HR 1728? It passed the US House and is awaiting approval by the Senate. Another bill limiting the rights of homeowners and investors. The types of transactions that you would be restricted from doing more than once every 36 months:

    \\"Selling YOUR OWN HOME using a land contract or owner-held mortgage so that you can get a quicker sale, higher sale price, or better rate of interest than is available in other investments.

    Carrying back owner-held second mortgages on investment properties that you sell.

    Doing any kind of installment sale on residential properties including homes, condos, mobile homes, and even raw land that is zoned residential.\\"

    This is federal legislation and will affect all of us. Here\\\’s a link to the bill.

    What\\\’s your take on it Joe?

  11. Rene responds:
    Posted: July 13th, 2009 at 6:15 pm


    I was just stopping by to see how you were doing with this kangaroo court.

    Happy to hear the court of appeals got it right.

    Those politicians are scum.

    Congrats on the battle won! How long ’till you win the war?


  12. Joe Kaiser responds:
    Posted: July 13th, 2009 at 6:31 pm

    It’s unlikely I’ll ultimately prevail, but that’s okay.

    When you have an AG’s office willing to twist the truth so badly it’s unrecognizable, spend a million bucks of public funds to cover its tracks on a consumer protection case having zero actual consumer complaints, tamper with witnesses and influence their testimony by telling them lies about me, and on and on and on . . . it’s not an easy war to win.

    So, we’ll see. Thanks for the kind words, all.


  13. Chris responds:
    Posted: July 14th, 2009 at 4:09 pm


    I saw this in the news today, and my jaw dropped.

    According to the AG’s office, Obama is now a real estate scammer:

    “NEW YORK, July 14 (Reuters) – U.S. government officials are weighing a plan that would let borrowers who have fallen behind on their mortgage payments avoid eviction by renting their homes instead, sources familiar with the administration’s thinking said on Tuesday.

    Under one idea being discussed, delinquent homeowners would surrender ownership of their homes but would continue to live in the property for several years, the sources told Reuters.

    Officials are also considering whether the government should make mortgage payments on behalf of borrowers who cannot keep up with their home loans, tapping an unused portion of a $50 billion housing aid kitty.”

  14. Chris responds:
    Posted: July 31st, 2009 at 11:45 am

    I can\’t believe the House actually passed it:

    This bill allows lenders to allow mortgage holders the chance to rent for five years, instead of going through the normal foreclosure process. Some banks supported this legislation. I suspect it is because it allows them to hide the true value of their asset for five years, rather than going through the foreclosure process and having to record the actual loss on their books.

  15. Paul responds:
    Posted: November 30th, 2009 at 11:45 pm

    My only questions are as follows:

    1. How did the prosecutors find so many claims against your contracts contracts if you had and attorney put those contracts together?

    2. What if anything will you change about your business model, products and or services?

    3. If they can’t prove any of the violations, will the whole case be null and void or can they pick an chose what you we in violation of? For example is their a potential for them to drop all allegations and then find you or your companies guilty of the whole co-beneficiary in the trusts thing or lying to the homeowner about not being able to get their funds if they didn’t use your company.

  16. Joe Kaiser responds:
    Posted: December 1st, 2009 at 2:12 am


    They made the whole thing up, and they know it. When you’re the AG, you can pretty much convince anyone of anything if you’re willing to lie about it.

    And, you’d better believe, they are.


    P.S. More later.

  17. Dave Tilbury responds:
    Posted: December 14th, 2009 at 4:56 pm

    Hey Joe, looks to me you’ve gotten yourself into a quagmire of BS.

    I can only add that if the folks on the attack had any idea of your personal fiber and great charachter they would realize the errors of their misplaced effort and squandered taxpayer dollars.

    To the followers of your blog I would like to add this insight: Joe is my first cousin. Our moms are sisters. Both of our fathers were military during our childhood and teen years, with our fathers overseas a great deal of that time. During those years I spent countless days living with my aunt and cousins. Joe was like my big brother.

    He was always into something creative, teaching me, my little brothers, and other cousins how to create the coolest stuff. I vividly recall Joe showing us how to fashion wire coat hangers and nylon stockings into a bulletproof frog catching net, laying for hours on moss covered logs catching unwary frogs as they swam by.

    Baseball is huge to my Uncle Jerry, Joe’s dad. Joe always took the time to pass down pitching skills taught by his dad to me. I still have a killer slider to this day. And, that frog net was duplicated many times over by US Air Force Pilots that were my students when I became a USAF Survival Instructor in 1983.

    I could go on with stories for days. My point being, I grew up with Joe being a huge part of my life. For anyone to question his moral fiber and integrity, I’m sorry, you’re deeply mistaken.

    Joe, I know in my heart you will persevere through this challenging time, you always have. Give my love to all your family and hope to see you in the near future.

    Your frog catchin’, slider throwin’ cousin……Dave

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  19. Joe Kaiser responds:
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    Sure, just let me take a look at your blog first.

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