Geddes v. Loancare, LLC, No. 2:25-cv-02955-DMC (Apr. 22, 2026)

Case details
Full caption
KRISTA C. GEDDES v. LOANCARE, LLC
Country
United States
Jurisdiction
Federal
Decided
Apr. 22, 2026
Majority
Dennis M. Cota (J.) (unanimous Court)
KRISTA C. GEDDES, Plaintiff, v. LOANCARE, LLC, et al., Defendants., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.12026 WL 1092496Only the Westlaw citation is currently available.United States District Court, E.D. California.KRISTA C. GEDDES, Plaintiff,v.LOANCARE, LLC, et al., Defendants.No. 2:25-cv-02955-DMC|Filed 04/22/2026Attorneys and Law FirmsKrista Carol Geddes, Law Office of Krista C. Geddes, Chico,CA, for Plaintiff.Cuong Minh Nguyen, Wolfe & Wyman LLP, Sacramento,CA, Cathy Lynn Granger, Wolfe & Wyman LLP, Irvine,CA, for Defendants LOANCARE, LLC, Federal NationalMortgage Association.John C. Steele, Steele LLP, Irvine, CA, for Defendant TrusteeCorps.ORDER RE SANCTIONSDENNIS M. COTA UNITED STATES MAGISTRATEJUDGE*1 Plaintiff, proceeding pro se, brings this action.A motion to dismiss hearing was held on February 11, 2026,and the undersigned directed parties to file supplementalbriefings addressing the issue of federal jurisdiction. SeeECF No. 37. Parties timely filed supplemental briefing.See ECF Nos. 38, 39, and 40. Defendants’ supplementalreply briefing alleged that Plaintiff Geddes manufacturedquotes and improperly represented cases in her supplementalbriefing. See ECF No. 42. The Court ordered Plaintiff torespond to Defendants’ allegations, ECF No. 44, and Plaintifftimely filed a response, ECF No. 45.I. BACKGROUNDDefendants Loancare, LLC and FNMA allege Plaintiffmanufactured quotes and improperly represented them inher jurisdiction supplemental briefing. See ECF No. 42, pg.4-5. Defendants Loancare, LLC and FNMA assert Plaintiff'sKachlon quote is not in the opinion. See id. at 5. Defendantscontend Kachlon favors their argument because the opinionsays that a foreclosure trustee is insulated from liability ifthere is no demonstrable “malice,” and “mere negligence”is not enough. Id. Defendants also assert that Plaintiff'sBarrionuevo quote is nonexistent, and the opinion does notdiscuss nominal parties at all. See id. Instead, Defendantsassert that Barrionuevo deals with the tender rule to wrongfulforeclosure cases and is “irrelevant and lends no support toPlaintiff's position.” Id.In Plaintiff's supplemental briefing responding to Defendants’allegations, Plaintiff begins by acknowledging the relevantquotes are not verbatim excerpts, and “in some instances,reflected paraphrased summaries of legal principles.” ECFNo. 45, pg. 2. Plaintiff claims she misquoted authoritiesunintentionally. See id. As to Kachlon v. Markowitz, 168Cal.App.4th 316 (2008), Plaintiff agrees with Defendantsthat Kachlon says trustee immunity privilege may not applyif there is malice, however, Plaintiff argues that Kachlondoes not control the federal jurisdiction issue and therefore,her prior mischaracterization does not affect whether TrusteeCorps. was “a properly joined, non-diverse defendant at thetime of removal.” Id.Plaintiff claims the allegedly manufactured quote fromBarrionuevo v. Chase Bank, N.A., 885 F.Supp.2d 964 (N.D.Cal. 2012) was “paraphrased language” that was “cited asan example of a case permitting borrower claims arisingfrom foreclosure conduct to proceed past the pleading stage,not as authority addressing nominal party status or removaljurisdiction.” Id. at 3. Plaintiff contends that Barrionuevo“was cited for a limited and appropriate purpose anddoes not affect the jurisdictional analysis currently beforethe Court.” Id. (emphasis added). Plaintiff closes the briefby discussing federal jurisdiction issues at the time ofremoval and maintains “any imprecision in prior citations wasinadvertent.” Id. at 4.II. DISCUSSIONWhen presenting to a court a written and signed pleading,motion, or other paper, an attorney “certifies that to the bestof the person's knowledge, information, and belief ... the
KRISTA C. GEDDES, Plaintiff, v. LOANCARE, LLC, et al., Defendants., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.2claims, defenses, and other legal contentions are warrantedby existing law or by a nonfrivolous argument for extending,modifying, or reversing existing law or for establishing newlaw.” Fed. R. Civ. P. 11(b)(2). Signing the pleading certifiesthe attorney has “read the document, conducted a reasonableinquiry into the facts and the law and [is] satisfied that thedocument is well grounded in both, and is acting without anyimproper motive.” Bus. Guides, Inc. v. Chromatic Commc'nsEnters., Inc., 498 U.S. 533, 542 (1991). A lawyer shall not“knowingly make a false statement of fact or law to a tribunalor fail to correct a false statement of material fact or lawpreviously made to the tribunal by the lawyer.” Cal. R. Prof.Conduct 3.3(a)(1). To this end, a lawyer shall not “knowinglymisquote to a tribunal the language of a book, statute, decisionor other authority.” Cal. R. Prof. Conduct 3.3(a)(2).*2 In considering the appropriate response to findingmanufactured quotes in a parties’ briefing, the Courtconsiders how the issue is addressed within the Ninth Circuit.In Tercero v. Sacramento Logistics, LLC, the judge found aplaintiff's attorney cited two cases that do not exist, ten othercases that do not contain the language quoted by the plaintiff'sattorney, and twelve cases that do not support the propositionsthe plaintiff's attorney offered them for. Tercero v. SacramentoLogistics, LLC, 2025 WL 2605020 at *1 (E.D. Cal. 2025).The plaintiff's attorney pointed to stress factors from lateevenings and caretaker responsibilities which resulted in“oversight.” See id. at *3. The court still found the plaintiff'sattorney had a duty to check citations and sanctioned her inthe amount of $1,500, directed the plaintiff's attorney to servea copy of the order on her client, and directed the clerk of thecourt to serve a copy of the order to the state bar. See id. at*13.In another case, a pro se plaintiff's citations were inaccuratefrom using artificial intelligence, but the court chose to treatthe fact that artificial intelligence was used as a collateralissue. See Gjovik v. Apple, Inc., 2025 WL 2379767 at *3(N.D. Cal. 2025). The pro-se plaintiff was not an attorney,no sanctions were issued, and the court adjudicated the issueson their merits. See id. In S.E.C. v. Historic Asset PlacementServs., Global, LLC, the Court found that pro se litigantsmust still comply with Local Rules and the Federal Rulesof Civil procedure but declined to impose sanctions on apro se defendant. S.E.C. v. Historic Asset Placement Servs.,Global, LLC, 2025 WL 2674529 at *6 (C.D. Cal. 2025).The court warned it would impose appropriate sanctions,including striking filings and imposing monetary sanctions, ifthe misconduct continued. See id.Here, Plaintiff manufactured two significant quotes that favorher position that Defendants Trustee Corps should not retainstatus as a nominal party. Plaintiff's recent supplementalbriefing responded to the allegations of manufacturedquotes and misrepresented cases. Plaintiff characterized hermanufactured quotes and misrepresented cases as reflecting“paraphrased summaries of legal principles” instead of“verbatim transcripts.” ECF No. 45, pg. 2. Plaintiff furtherclaimed the mistakes were unintentional. See id. However, asa licensed attorney barred in the State of California, Plaintiffis held to a higher standard than ordinary pro se litigants.Further, the content and form of Plaintiff's two troublingmisquotes suggest deliberate misdirection to this Court.Plaintiff misquoted Kachlon v. Markowitz, 168 Cal.App.4th316 (2008) to assert, “The trustee's common interest privilegeis qualified ... and may be lost where the trustee actswith malice or exceeds the scope of its statutory duties.”ECF No. 39, pg. 4. Plaintiff additionally misrepresentedBarrionuevo v. Chase Bank, N.A., 885 F.Supp.2d 964 (N.D.Cal. 2012) by stating the case said, “Because Plaintiff'schallenge the validity of the foreclosure process itself, thetrustee defendants cannot be considered nominal parties.” Id.at 5. The Kachlon misquote falsely represents the scope of itsopinion and the Barrionuevo misquote is unrelated to its citedopinion. Plaintiff enlarged the scope of Kachlon’s holdingfor removing nominal status for trustees. See Kachlon v.Markowitz, 168 Cal.App.4th 316 (2008). Also, Barrionuevodeals with the tender rule to wrongful foreclosure cases anddoes not discuss nominal party status anywhere in the opinion.Further, Plaintiff's supplemental briefing indicates she had theability and knowledge to correct the misquotes prior to filing.Plaintiff claims these were “paraphrased summaries of legalprinciples.” ECF No. 45, pg. 1. However, Plaintiff's originalsupplemental briefing included other sentences which didparaphrase the cited cases and those did not have quotationmarks around them. In that original supplemental briefing,Plaintiff chose to put quotation marks around specificsentences, indicating a direct quote, but those sentences werenot found in the cited opinions. The difference in how thesesentences were formatted demonstrates intent to misrepresentauthorities. The undersigned finds these misquotes cannotbe considered “paraphrased summaries” because Plaintiff'schoice to put quotation marks around them.*3 The Court in S.E.C. issued warnings instead of asanction. Plaintiff here is a licensed attorney litigating pro
KRISTA C. GEDDES, Plaintiff, v. LOANCARE, LLC, et al., Defendants., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.3se, whereas in S.E.C., the plaintiff was also pro se, but nota licensed attorney. Plaintiff's status as an attorney confers ahigher standard of candor to this Court than a non-attorneypro-se litigant. If the improper quotes were intentional,Plaintiff violated her duty of candor to this Court and Cal.R. Prof. Conduct 3.3(a)(2) by knowingly misquoting and/ormisrepresenting cited authorities. Even if the improper quoteswere accidental, Plaintiff had the duty to make a reasonableinquiry into their validity. See Fed. R. Civ. P. 11(b)(2). Signingthe document certifies Plaintiff made that reasonable inquiry.Id.The Court recognizes that Plaintiff, while an attorney, isrepresenting herself and therefore, a case like Tercero, hasdistinctions. An attorney's misconduct when representinganother person can negatively impact that person's abilityto have a fair adjudication of their case, though arguably,misconduct by an attorney representing themselves onlyharms themselves. Further, the volume of manufacturedquotes in Tercero was much greater than the twomanufactured quotes here. However, the undersigned findsthat while the scope of the violation here may bedistinguishable from Tercero, the existence of an intent togain an unfair advantage through a misrepresentation of legalcitation is the same in both cases, and here warrants both amonetary sanction and reporting to the bar.Although its use is not conclusive here, this Court expressesits grave concern about the use of generative artificialintelligence without the appropriate due diligence andverification by the attorney signing the filing. The appearanceof hallucinated cases, improper citations, and distortions ofopinions create consequences that fall on the attorney, asfiling documents with this Court certifies that any assertionsmade are supported by law and signatures on the documentsfiled mean the attorney has performed the appropriate duediligence. If Plaintiff elects to go down the treacherous pathof employing generative artificial intelligence in draftingher filings to this Court, she must realize she bears theresponsibility for that election and all related consequences,and nothing about that election constitutes a substitute forattorney diligence.This Court finds that the Plaintiff's effort to “double down”on the initial misrepresentation by now characterizing it as a“paraphrase” is both disingenuous and lacking any effort totake responsibility for an apparent lapse in good judgementand professional responsibility. Equally disconcerting is thePlaintiff's “no harm, no foul” attitude embraced in thecontention that the misrepresented Barrionuevo authorities donot affect the jurisdictional analysis before the court.In light of both the gravity of Plaintiff's violations and thelack of any satisfactory explanation after being given theopportunity to respond to the issues raised by Defendants, theCourt finds sanctions are appropriate.Accordingly, it is HEREBY ORDERED that:1. Petitioner shall pay $1,000 in sanctions within 30 daysof this Order;2. Petitioner shall serve a copy of this order to the CaliforniaBar Association;3. Petitioner shall file a notice of compliance with this orderwithin 60 days of the date of this Order.All CitationsSlip Copy, 2026 WL 1092496End of Document© 2026 Thomson Reuters. No claim to original U.S.Government Works.
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