Professional Documents
Culture Documents
Pre-Foreclosure Complaint Plaintiff)
Pre-Foreclosure Complaint Plaintiff)
SBN 147715
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LAW OFFICES OF TIMOTHY L. MCCANDLESS
2 13240 Amargosa Road
Victorville, California 92392
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(760) 951-3663 Telephone
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(909) 382-9956 Facsimile
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10
TIMOTHY A. ARMSTRONG
CASE NO: xxxxx
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24
Plaintiff, TIMOTHY A. ARMSTRONG, (Hereinafter referred as “Plaintiff”) alleges herein as
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follows:
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27 I.
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1
_________________________________________________
COMPLAINT
GENERAL ALLEGATIONS
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3 1. t all times relevant has been a resident of the County of San Bernardino, State of
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California and the owner of Real Property, including but not limited to the property at
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issue herein, 13191 Central Road, Apple Valley, CA 92308. The Legal descriptions
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are as follows:
8 APN: 0439-251-04
9 LOTS 4 of Tract No. 6215, in the City of Apple Valley, County of San Bernardino, State
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of California, as per map recorded in Book 81 page(2) 16 and 17, of maps, in the office of
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the county recorder of said County, California (hereinafter “Subject Property”)
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14 mentioned was doing business in the County of San Bernardino, State of California and
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was the original Lender for Plaintiff’s Deed of Trust Deed and Note. BNC, formerly a
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Delaware Corporation and who used to do business in California has surrendered its
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status and their agent for service of process resigned on February 9, 2009. Moreover,
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20 3. BLUE LEAF FINANCIAL INC. (hereinafter “BLUE LEAF”) at all times herein
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mentioned was doing business in Beverly Hills, County of Los Angeles and is
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registered to with the Secretary of State of California. BLUE LEAF is engaged in the
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business of promoting, marketing, distributing and selling the Arm Loans that are the
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_________________________________________________
COMPLAINT
Bernardino, State of California and alleged to be the Beneficiary regarding Plaintiff’
1
2 Real Property as described above and as Situated in San Bernardino County California.
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6. BARCLAYS CAPIAL REAL ESTATE INC., dba HOMEQ SERVICING at all times
8 herein mentioned is doing business in the State of California and is the contact agency
9 of the Notice of Default recorded in San Bernardino County on February 18, 2009.
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7. Plaintiff is ignorant of the true names and capacities of defendants sued herein as
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DOES 1 through 50, inclusive, and therefore sues these defendants by such fictitious
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13 names and all persons unknown claiming any legal or equitable right, title, estate, lien,
14 or interest in the property described in the complaint adverse to plaintiff’s title, or any
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cloud on Plaintiff’s title thereto. Plaintiff will amend this complaint to allege their true
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names and capacities when ascertained.
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8. Plaintiff is informed and believes and thereon alleges that, at all times herein
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19 mentioned each of the defendants sued herein was the agent and employee of each of
20 the remaining defendants. Plaintiff alleges that each and every defendant alleged herein
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ratified the conduct of each and every other defendant. Plaintiff further alleges that at
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all times said defendants were was acting within the purpose and scope of such agency
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and employment.
25 II.
26 HISTORICAL BACKGROUND
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COMPLAINT
9. Plaintiff purchased the foregoing Real Property on or about November 15, 2005 when
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2 he financed his purchase through BNC by virtue of a Deed of Trust. The loan was in
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10. Plaintiff is informed and believe that directly after BNC caused Mortgage Electronic
13 ownership is held by another party, in other words MERS is not the Beneficiary but is
14 used to hide the true identity of the Beneficiary. Based on this failure to disclose, and
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the lack of consideration paid by MERS, Plaintiff allege that the Deed of Trust were
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never perfected and are a nullity as the MERS recording separates the Debt from the
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Lien, and this is more so especially upon a sale of the Note and Trust Deed.
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19 11. Plaintiff further alleges that MERS acts as a Nominee for more than one principal, and
20 conceals their identity therefore if a Nominee is the same as an agent MERS cannot act
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as an agent for multiple Banks, insurance and title companies and Mortgage
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Companies because of a serious Conflict of interest. In addition Plaintiff allege that a
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Deed of Trust cannot lawfully be held by a Nominee who has no financial interest in
25 the instrument without disclosing the identity of the actual Beneficiary, and that if a
26 party with no interest in the Note records it in their name the recorded deed is Nullity.
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COMPLAINT
12. Plaintiff further alleges that MERS failure to transfer beneficial interests as the Note
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2 and deed are sold further renders the Deed recording a nullity.
3 13. Plaintiff further alleges that DEFENDANT alleges that Plaintiff became in default of
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his loan and that payments were due to MERS and BNC as Beneficiary. However this
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default of the loan was occasioned by the high payments, the structure of the loan and
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interest rate and the fact that Plaintiff were not provided full disclosure of the terms of
8 their loan.
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III.
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DEFENDANTS FAILED TO COMPLY WITH CALIFORNIA CIVIL
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14 14. Plaintiff was forced into default of their payments due to non-full disclosure of their
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loan through BNC. Moreover, the Declaration of Due Diligence attached to the Notice
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of Default is void because the required “penalty of perjury” and signature of a person
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with actual knowledge is missing which will be discussed later in the complaint.
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19 15. Plaintiff alleges that the loan contract was procedurally and substantively
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entire spendable income, the employees and/or agents of BNC or BLUE LEAF did not
25 disclose to Plaintiff the terms and conditions of the repayment, and Plaintiff executed
26 documents without any explanation whatsoever.
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COMPLAINT
16. Plaintiff alleges that the employees and/or agents of BLUE LEAF and BNC
1
2 represented that said employees and/or agents could work-around the fact that
3 Plaintiff’s credit was not in good standing and could get Plaintiff approved for the loan.
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17. Defendants BLUE LEAF or BNC did not disclose at any time to Plaintiff that the
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initial loan payment would exceed his entire income. Plaintiff alleges that the loan
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contract, deed of trust and accompanying documents were offered to Plaintiff on a take
8 it or leave it basis.
9 18. Further, on information and belief, Plaintiff alleges that the Defendants charged and
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obtained improper fees for the placement of their loan as “sub-prime” when they
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qualified for a prime rate mortgage which would have generated less in fees and
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14 19. On information and belief, Plaintiff alleges that the service of the purported note was,
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without their knowledge, by some means transferred from or by Defendant BNC either
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completely or by association or other means to MERS who unknown to Plaintiff
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provided services in various forms to be determined to others which were of such a
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20 20. Also on November 15, 2005 Plaintiff executed a “Deed of Trust” which cited the
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lenders as BNC and stating in the definition section that:
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(E) “MERS” is a Mortgage Electronic Registration Systems, Inc., MERS is a separate
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corporation that is acting solely as a nominee for Lender and Lender’s successors and
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_________________________________________________
COMPLAINT
that BNC drafted all of the documents related to the loan, that no negotiations were
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2 possible between Plaintiff and BNC, and QUALITY LOAN, BLUELEAF, MERS, and
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income and as such, Defendants, and each of them, cannot enforce the terms and
8 conditions of the loan against Plaintiff, and any non-judicial foreclosure arising there
9 from is void.
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23. Plaintiff is informed and believes and thereupon alleges that Defendants, especially
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SHAWN RODRIGUEZ and BLUE LEAF, and each of them, entered into a fraudulent
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13 scheme, the purpose of which was to make a loan to Plaintiff, which Defendants, and
14 each of them, were keenly aware that Plaintiff could not afford, at a cost way above the
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then prevailing market rate, made loans to Plaintiff and falsely represented to Plaintiff
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that they could not qualify for any other financing, that Plaintiff could not qualify
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under any reasonably underwriting guidelines, that such scheme was devised to extract
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20 spread premium and which Defendants, and each of them, shared in some presently
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unknown percentage.
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24. Plaintiff is informed and believes and therefore alleges that their loans after they were
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originated and funded were sold on multiple occasions, bundled into a group of Trust
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_________________________________________________
COMPLAINT
right to declare a default, to cause notices of default to issue or to be recorded, or to
1
2 foreclose on Plaintiff interest in the subject property, Defendants, and each of them,
3 were not the note Holder or the Note holder in due course or any Beneficiary at any
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time in regards to this loan.
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25. That none of these Defendants, and each of them, were ever disclosed as the
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7
beneficiary in accordance with California Code of Civil Procedure section 2924 et
8 seq.
9 IV.
10
NEW LAW
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Moreover The California Legislature passed Senate Bill 1137, impacting residential
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13 mortgage lenders, foreclosure procedures and eviction procedures. The Governor has signed this
14 law into effect and it has taken effect as Urgency Legislation. The law has three pertinent parts. It
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amends California Code of Civil Procedure Section 1161(b) regarding notice of an eviction. It
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adds a provision strengthening the right of local governments to adopt “blight” ordinances and
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moreover, it modifies the non-judicial foreclosure procedures set forth in California Civil Code
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19 Section 2924. The legislature recognized that the need for such legislation by stating as follows:
20 “…It is essential to the economic health of California for the state to ameliorate the
deleterious effects on the state economy and local economies and the California housing
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market that will result from the continued foreclosures of residential properties in
22 unprecedented numbers by modifying the foreclosures process to require mortgagees,
beneficiaries, or authorized agents to contact borrowers and explore options that could
23 avoid foreclosure…”
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25 This law is effective immediately and extends on to January 1, 2013. This law
26 impacts owner-occupied primary residences only and only loans made on January 1, 2003
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and December 3, 2007. California Civil Code Section 2924 states in part:
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8
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COMPLAINT
Foreclosure:
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2 The primary purpose for the Statute is foreclosure procedures and imposes an
3 unprecedented duty upon lenders relating to contact with borrowers. The Statute amends
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provisions of the non-judicial foreclosure procedures found in California Code of Civil
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Procedure §2924, by adding requirements for meetings, due diligence, and notification of
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counseling. Some of the more important provisions include all of the following:
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• The lender, beneficiary or authorized agent must wait thirty (30) days after contact is
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made with the borrower, or thirty days (30) after satisfying the due diligence requirements
11 set forth in the Statute, in order to commence the filing of a Notice of Default.
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• The contact requires that the borrower’s financial situation be assessed and requires that
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the borrower and lender explore options for the borrower to avoid foreclosure.
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This was not done by defendants or the lender.
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16 • The Statute requires the lender or their authorized agent to advise the borrower that the
17 borrower has the right to a subsequent meeting within fourteen (14) days of the initial
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contact.
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• The borrower is to be provided a toll free telephone number available at HUD for
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certified housing counseling agencies.
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23 REALTOR® or attorney, to act as their authorized agent but must expressly approve any
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workout agreement reached by that agent.
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• The Notice of Default must include a declaration indicating that the lender has made the
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contact or made a diligent effort to make the contact and will not apply in the event of
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COMPLAINT
• If the Notice of Default was already recorded prior to the date of the Statute, this
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3 • In the event that the lender is initially unable to contact the borrower, they must attempt
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telephone contact on three separate occasions at three different times.
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• The lender must provide the borrower with an (800) number that will be answered by a
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live person during normal business hours and provide certain links to web pages. The web
8 page must be a prominent link and must link to the following information:
9 - Options for borrowers who cannot afford their payments.
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- A list of financial documents to gather when discussing their options.
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- A toll-free telephone number available by HUD for certified counseling services.
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13 - A toll-free telephone number for borrower’s to discuss options to avoid foreclosure with
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26. Plaintiff further alleges on information and belief that none of these alleged
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beneficiaries or representatives of the Beneficiary have the original note to prove that
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they are in fact the party authorized to conduct the foreclosure.
22 27. Plaintiff further alleges that the foreclosure sale of the Subject Property was not
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executed in accordance with the requirements of California Civil Code Sections
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2923.5, 2932.5 and Commercial Code section 3302 et seq.
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28. That the notices and foreclosure failed to conform with the provisions of California
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27 Civil Code Sections 2923.5, 2932.5 et seq., and Commercial Code section 3302
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COMPLAINT
et seq. Furthermore, the Notice of Default did not have a penalty of perjury
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3 declaration.
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29. Plaintiff further alleges that California Civil Code section 2924 et seq. and its subparts
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are being applied to Plaintiff in a manner that is unlawful, because at least in part the
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party acting as the Trustee proceeded with the foreclosure of Plaintiff Subject Property
8 notwithstanding the fact that the Trustee was not in possession of the original Note,
9 that the Note when it was assigned, the assignment by BNC and its assigns, did not
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covey the power of sale because it violated the terms of California Civil Code section
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2932.5, that the assignment when it was made, that the Note executed by Plaintiff was
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13 no longer a negotiable instrument because the assignment was not physically applied to
14 the Note pursuant to the holding of Pribus v. Bush, (1981) 118 Cal.App.3d 1003, 173
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Cal.Rptr. 747, although there was sufficient room on the back of the Note to complete
16
the assignment, and as such the foreclosure of Plaintiff’s subject property did not
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conform to the strict mandates of Civil Code section 2924.76.
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19 30. Plaintiff alleges that the employees and/or agents of BNC represented that said
20 employees and/or agents could work-around the fact that Plaintiff’s credit was not in
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good standing and could get Plaintiff approved for the loan. Defendants did not
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disclose at any time to Plaintiff that the initial loan payment would exceed their entire
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24
income.
25 31. Plaintiff alleges that the loan contract, deed of trust and accompanying documents
26 were offered to Plaintiff on a take it or leave it basis.
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COMPLAINT
32. That by virtue of the method and manner of Defendants carrying out Civil Code
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2 section 2924 et seq., the foreclosure of the Subject Property is void ab initio as a matter
3 of law.
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33. Plaintiff alleges that Defendants, and each of them, are engaged in and continue to
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engage in violations of California law including but, not limited to: Civil Code section
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7
2924 et seq. and 2932.5 et seq., and unless restrained will continue to engage in such
8 misconduct, and that a public benefit necessitates that Defendants be restrained from
9 such conduct in the future.
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V.
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CALIFORNIA LEGISLATURE FINDINGS
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34. Recently, the California Legislature found and declared the following in enacting
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California Civil Code 2923.6 on July 8, 2008:
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19 property foreclosures increased sevenfold from 2008 to 2007, in 2007, more than
20 84,375 properties were lost to foreclosure in California, and 254,824 loans went
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24 California, and will have even greater adverse consequences as foreclosure rates
25 continue to rise. According to statistics released by the HOPE NOW Alliance the
27 threefold from 2002 in the first quarter to 5574 in the fourth quarter of that year.
28 Those same statistics report that 10,556 foreclosure sales, almost double the
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COMPLAINT
1 number for the prior quarter, were completed just in the month of January 2008.
2 More foreclosures means less money for schools, public safety, and other key
3 services.
4
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COMPLAINT
1
14 Department of Justice and the FBI to identify, arrest, and prosecute mortgage fraud
15 violators.” San Diego Union Tribune, June 19, 2008. As shown below, Plaintiff were
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victims of such mortgage fraud.
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36. "Home ownership is the foundation of the American Dream. Dangerous mortgages
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have put millions of families in jeopardy of losing their homes.” CNN Money,
20 December 24, 2007. The Loan which is the subject of this action to Plaintiff is of such
21 character.
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37. "Finding ways to avoid preventable foreclosures is a legitimate and important concern
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of public policy. High rates of delinquency and foreclosure can have substantial
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25 spillover effects on the housing market, the financial markets and the broader
26 economy. Therefore, doing what we, can to avoid preventable foreclosures is not just
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in the interest of the lenders and borrowers. It's in everybody's best interest." Ben
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Bernanke, Federal Reserve Chairman, May 9, 2008.
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COMPLAINT
38. Plaintiff alleges that Defendants had the duty to prevent such foreclosure, but failed to
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2 so act. "Most of these homeowners could avoid foreclosure if present loan holders
3 would modify the existing loans by lowering the interest rate and making it fixed,
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capitalizing the arrearages, and forgiving a portion of the loan. The result would
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benefit lenders, homeowners, and their communities.” CNN Money, id.
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39. On behalf of President Bush, Secretary Paulson has encouraged lenders to voluntarily
8 freeze interest rates on adjustable-rate mortgages. Mark Zandl, chief economist for
9 Mood’s commented, “There is no stick in the plan. There are a significant number of
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investors who would rather see homeowners default and go into foreclosure.” San
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Diego Union Tribune, id.
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13 40. “Fewer than l%· of homeowners have experienced any help "from the Bush-Paulson
14 plan.” San Diego Union Tribune, id. Plaintiff' are not of that sliver that have obtained
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help.
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41. The Gravamen of Plaintiff's complaint is that Defendants violated State laws which
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were specifically enacted to protect such abusive, deceptive, and unfair conduct by
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20 42. Plaintiff is a "debtor" as defined by the Rosenthal Act, California Civil Code
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1788.2(h).
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43. Defendants are engaged in the collection of debts from consumers using the mail and
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telephone.
25 44. Defendants regularly attempt to collect consumer debts alleged to be due to another.
26 45. Defendants are "debt collectors" as defined by the Rosenthal Act, California Civil
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Code §1788.2(c).
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COMPLAINT
46. The purported debt which Defendants attempted to collect from Plaintiff was a
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2 "consumer debt" as defined by the Rosenthal Act, California Civil Code §1788.2(f).
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Defendants Are Not Holders In Due Course Since Plaintiff Was Duped Into An
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Improper Loan And There Is No Effective Endorsement:
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7 47. Plaintiff incurred a "debt" as that term is defined by California Civil 17 Code
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§1788(d), when he obtained a Loan on their Personal Residence.
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48. The loan is memorialized via a Deed of Trust and Promissory Note, each of which
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contain an attorney fees provision for the lender should they prevail in the enforcement
17 schedule should be, the risks and disadvantages of the loan, the prepay penalties, the
23 52. A determination of whether Plaintiff would be able to make the payments as specified
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COMPLAINT
54. Plaintiff could not understand any of the documents and signed them based on
1
2 representations and the trust and confidence the Plaintiff placed in Defendants’
3 predecessors.
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55. Plaintiff is informed and believes that Defendants and/or Defendants' predecessors
5
established and implemented the policy of failing to disclose material facts about the
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Loan, failing to verify Plaintiff's income, falsifying Plaintiff's income, agreeing to
8 accept a Yield Spread Premium, and causing Plaintiff's Loan to include a penalty for
9 early payment.
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56. Plaintiff is informed and believes that Defendants and/or Defendants’ predecessors
11
established such policy so as to profit, knowing that Plaintiff would be unable to
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14 57. Plaintiff was a victim of Fraud in the Factum since the forgoing misrepresentations
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caused them to obtain the home loan without accurately realizing, the risks, duties, or
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obligations incurred.
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58. The Promissory Note contains sufficient space on the note itself for endorsement
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19 whereby any assignment by allonge is ineffective pursuant to Pribus v. Bush, 118 Cal.
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COMPLAINT
61. Defendants are strangers to this transaction, and have no authority to go forward with
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3 62. Plaintiff executed a ADJUSTABLE RATE NOTE (hereinafter the “Note”) and a
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Deed of Trust to BNC.
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63. BNC is the Lender and only party entitled to enforce the Note and any security
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7
interest with it.
19 recorded.”
20 66. The San Bernardino County Recorder's Office does not contain any evidence of a
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recorded assignment from BNC.
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67. BNC has never assigned their rights under the Note.
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68. The power of sale may not be exercised by any of the Defendants since there was
25 never an' acknowledged and recorded assignment pursuant to California Civil Code §
26 2932.5.
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COMPLAINT
69. Since the Defendants did not comply with California Civil Code§2932.5, the Notice
1
2 of Default provisions of California Civil Code § 2924 were likewise never complied
3 with.
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70. QUALITY LOANS nor BARCLAYS never complied with the Notice of Default
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provisions of California Civil Code §2924. QUALITY LOANS never complied with
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the Notice of Default provisions of California Civil Code §2924.
8
Defendants’ Lack of Standing to Enforce A Non-Judicial Foreclosure Pursuant To
9
California Commercial Code § 3301
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11 71. A promissory note is person property and the deed of trust securing a note is a mere
12 incident of the debt it secures, with no separable ascertainable market value.
13
California Civil Code §§ 657, 663. Kirby v. Palos Verdes Escrow Co., 183 Cal. App.
14
3d 57, 62.
15
16 72. Any transfers of the notice and mortgage fundamentally flow back to the note:
22 Bowman v. Sears (1923, Cal App) 63 Cal App 235, 218 P 489, 1923 Cal App LEXIS
23 199; Treat v. Burns (1932) 216 Cal 216, 13 P2d,724, 1932 Cal LEXIS 554.
24
80. ''A mortgagee's purported assignment of the mortgage without an assignment of the
25
debt which is secured is a legal nullity.” Kelley V. Upshaw (1952) 39 Cal 2d 179,
26
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246 P2d 23, 1952 Cal. LEXIS 248.
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COMPLAINT
73. ''A trust deed has no assignable quality independent of the debt; it may not be
1
2 assigned or transferred apart from the debt; and an attempt to assign the trust deed
3 without a transfer of the debt is without effect.” Domarad v. Fisher & Burke, Inc.
4
(1969 Cal. App. 1st Dist) 270 Cal. App. 2d 543, 76 Cal. Rptr. 529, 1969 Cal. App.
5
LEXIS 1556.
6
7
74. The Promissory Note is a negotiable instrument.
8 75. Transferring a Deed of Trust by itself does not allow enforcement of the instrument
9 unless the Promissory Note is properly negotiated.
10
76. Where an instrument has been transferred, enforceability is determined based upon
11
possession.
12
14 the following:
15
"Person entitled. to enforce" an Instrument means (a) the holder of the instrument,
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(b) a nonholder in possession of the instrument who has the rights of a holder, or
17
(c) a person not in possession of the instrument who is entitled to enforce the
18
19 instrument pursuant to
20 Section 3309 or subdivision (d) of Section 3418. A person may be a person entitled
21
to enforce the instrument even though the person is not the owner of the instrument
22
or is in wrongful possession of the instrument.
23
24
78. None of the Defendants are present holders of the instrument.
25 79. None of the Defendants are nonholders in possession of the instrument who has rights
26 of the holder.
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COMPLAINT
80. None of the Defendants are entitled to enforce the instrument pursuant to section
1
3 81. Defendants have no enforceable rights under California Commercial Code 3301(a) to
4
enforce the negotiable instrument.
5
82. Since there is no right to enforce the negotiable instrument, the Notice of Default
6
7
provisions of California Civil Code § 2924 and Notice of Sale provisions of California
8 Civil Code § 2924(f) were likewise never complied with, and there is no subsequent
9 incidental right to enforce any deed of trust and conduct a non-judicial foreclosure.
10
83. That the Trustee and the loan servicer are acting as agents of the Beneficiary and
11
signing documents as the agent of the agent of the agent of the Beneficiary for Plaintiff
12
13 Notes and the notices therein, notwithstanding the fact that the Notes were not
19 85. MERS was NOT and never has been a Beneficiary of this loan or any other. MERS
20 is solely a registration service for tracking these Trust Deeds and mortgages and also
21
the Notes. MERS records these Trust Deeds in their name as a “nominee”, with NO
22
actual ownership interest in these Loans, the purpose is allegedly to allow the sale and
23
24
transfer of these instruments without the need for further recordation, however what
25 actually occurs is that the real Beneficiary remains obscured, and unknown. In
26 addition MERS is NOT a TRUSTEE and has no right to collect any TD payments on
27
the Note, neither does MERS have any right to enforce the notes or to be a party in
28
21
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COMPLAINT
any Foreclosure proceedings. Yet MERS has represented itself under oath in this case
1
2 to be the BENEFICIARY and in that “stated” but “false” capacity has unlawfully
7
investor. MERS actually helps to conceal the real beneficiary which is in violation of
8 California statutory law, Cal. Civ. Code Sec. 2924 et. Seq. The Beneficiary is
9 completely shielded and not disclosed as required. Also the forms that they used to
10
give Notices are defective.
11
87. Evidence in prior cases has demonstrated that MERS is nothing more than a
12
13 Registration Service, and does not even service the loan. MERS cannot prove or show
14 ownership in the form of an “original Note” (i) with proper indorsements, to them, or
15
that they are actually in the chain of ownership and (ii) to establish the actual
16
relationship of the holder of the Note, as a Holder in Due course, and (iii) with the right
17
to enforce the Note. April Charney, a lawyer at Jacksonville Are Legal Aid in Florida,
18
19 in 2007 had over 300 foreclosure cases dismissed or postponed due to “MERS”
22
VI.
23 FIRST CAUSE OF ACTION
24
VIOLATION OF CALIFORNIA CIVIL CODE §2923.6
(As Against All Defendants)
25
26 88. Plaintiff reallege and incorporate by reference the above paragraphs 1 through 94 as
27 though set forth fully herein.
28
22
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COMPLAINT
89. Defendants’ Pooling and Servicing Agreement (hereinafter “PSA”) contains a duty to
1
3 90. California Civil Code 2923.6 broadens and extends this PSA duty by requiring
4
servicers to accept loan modifications with borrowers.
5
91. Pursuant to California Civil Code 2923.6(a), a servicer acts in the best interest of all
6
7
parties if it agrees to or implements a loan modification where the (1) loan is in
8 payment default, and (2) anticipated recovery under the loan modification or workout
9 plan exceeds the anticipated recovery through foreclosure on a net present value basis.
10
92. California Civil Code 2923.6(b) now provides that the mortgagee, beneficiary, or
11
authorized agent offer the borrower a loan modification or workout plan if such a
12
24 96. The Joint Economic Committee of Congress estimated in June, 2007, that the average
25 foreclosure results in $77, 935.00 in costs to the homeowner, lender, local government,
26
and neighbors.
27
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COMPLAINT
97. Of the $77,935.00 in foreclosure costs, the Joint Economic Committee of Congress
1
2 estimates that the lender will suffer $50,000.00 in costs in conducting a non-judicial
7
to accept the loan modification as provided above and tender is deemed made pursuant
8 to Defendants’ Pooling and Service Agreement, California Civil Code 2923.6(a), and
9 California Civil Code 2923.6(b), taken individually or entirely. Plaintiff invoke the
10
remedies embodied in the aforementioned agreement and/or codes with a willingness
11
to execute a modification of their loan.
12
20 California Civil Code 2923.6(a), and California Civil Code 2923.6(b). [Hudson v.
21
Morton, 231 Ala. 392, 165 So. 227 (1936); Loftis v. Alexander, 139 Ga. 346, 77 S.E.
22
169 (1913); Kennedy v. Neil, 333 Ill. 629, 165 N.E. 148 (1929); Borden v. Borden, 5
23
24
Mass. 67, 1809 WL 989 (1809); Loughney v. Quigley, 279 Pa. 396, 123 A. 84 (1924);
25 Montague Corp. v. E.P. Burton Lumber Co., 136 S.C. 40, 134 S.E. 147 (1926);
26 Stansbury V. Embrey, 128 Tenn. 103, 158 S.W. 991 (1913); Loehr v. Dickson, 141
27
Wis. 332, 124 N.W. 293 (1910)]
28
24
_________________________________________________
COMPLAINT
101. Alternatively, Plaintiff further alleges that obstruction or imposition of unwarranted
1
3 tender, if made, will not be accepted, the Plaintiff are excused from making tender as it
4
would be a futile gesture, and the law will not require the doing of a useless act.
5
[Simmons v. Swan, 275 U.S. 113, 48 S. Ct. 52, 72 L. Ed. 190 (1927); Lee v. Joseph E.
6
7
Seagram & Sons, Inc., 552 F.2d 447 (2d Cir. 1977); Buckner v. Tweed, 157 F.2d 211
8 (App. D.C. 1946); Peterson v. Hudson Ins. Co., 41 Ariz. 31, 15 P.2d 249 (1932);
9 Woods-Drury, Inc. v. Superior Court in and for City and County of San Francisco, 18
10
Cal. App. 2d 340, 63 P.2d 1184 (1st District 1936); Chesapeake Bay Distributing Co. v.
11
Buck Distributing Co., Inc. 60 Md. App. 210, 481 A.2d 1156 (1984); Issacs v.
12
13 Caterpillar, Inc., 765 F. Supp. 1359 (C.D. Ill. 1991); Platsis v. Diafokeris, 68 Md. App.
19 [Shaner v West Coast Life Ins. Co, 73F.2d 681 (C.C.A. 10th Cir. 1934); Buell v. White,
20 908 P.2d 1175 (Colo. Ct. App. 1995) (when party, who is willing and able to pay,
21
offers to pay another a sum of money and is advised that it will not be accepted, offer
22
amounts to tender even though money is not produced); Hall v. Norwalk Fire Ins. Co.,
23
24
57 Conn. 105, 17 A. 356 (1888); Lamar v. Sheppard, 84 Ga. 561, 10 S.E. 10984
25 (1890); Ventres v. Cobb, 105 Ill. 33, 1882 WL 10475 (1882); Metropolitan Credit
26 Union v. Matthes, 46 Mass. App. Ct. 326, 706 N.E.2d 296 (1999)].
27
28
25
_________________________________________________
COMPLAINT
1 SECOND CAUSE OF ACTION
2 (VIOLATION OF BUSINESS AND PROFESSIONS CODE §17200
3 (As Against All Defendants)
4
16
106. The harm to Plaintiff and to members of the general public outweighs the utility of
17
Defendants’ policy and practices, consequently, constitute an unlawful business act of
18
practice within the meaning of Business and Professions Code §17200.
19
20 107. Further, the foregoing conduct threatens an incipient violation of a consumer law,
25
practice within the meaning of Business and Professions Code §17200. The
26 Defendants’ unfair, unlawful, and fraudulent business practices and false and
27
misleading advertising present a continuing threat to members of public in that other
28
26
_________________________________________________
COMPLAINT
consumers will be defrauded into closing on similar fraudulent loans. Plaintiff and
1
2 other members of the general public have no other adequate remedy of law.
3 108. As a result of the aforementioned acts, Plaintiff has lost money or property and
4
suffered injury in fact. Defendants received and continue to hold Plaintiff’s money and
5
other members of the public who fell victim to Defendants’ scheme.
6
12
109. Plaintiff repeat and realleges Paragraphs 1 through 115 as though fully set forth
13 herein.
14 110. Plaintiff alleges that at all times there existed an implied covenant of good faith and
15
fair dealing requiring Defendants, and each of them, to safeguard, protect, or otherwise
16
care for the assets and rights of Plaintiff. Said covenant prohibited Defendants from
17
19 111. Plaintiff alleges that the commencement of foreclosure proceedings upon the
20
property lawfully belonging to Plaintiff without the production of documents
21
demonstrating the lawful rights for the foreclosure constitutes a breach of the covenant.
22
112. Defendants breach the provisions as contained within the “Deed of “Trust” which
23
25 113. Defendants breached the provisions as contained within the “Adjustable Rate Note”
26
promising to pay BNC a monthly payment.
27
28
27
_________________________________________________
COMPLAINT
114. Plaintiff paid timely monthly payments in accordance with the “Adjustable Rate
1
3 115. As a consequence and proximate result, Plaintiff has been damaged in a sum to be
4
proven at trial.
5
7 INJUNCTIVE RELIEF
9
116. Plaintiff repeats and realleges Paragraphs 1 through 122 as though fully set forth
10
11
herein.
12 117. Plaintiff seeks a determination as to the legal status of the parties as to the
13 Adjustable Rate Note and the Deed of Trust.
14
118. The Adjustable Rate Note states that the Lender is BNC.
15
119. It also states, “Lender or anyone who takes this Note by transfer and who is entitled
16
18 120. BNC sent to Plaintiff a statement with a coupon asking for payment.
19
121. The Deed of Trust which cited the lender as BNC and stating in the definition
20
section that:
21
“MERS” is Mortgage Electronic Registration Systems, Inc. MERS is a separate
22
23 corporation that is acting solely as a nominee for Lender and Lender’s successors and
28
have standing to seek non-judicial remedies as well as judicial remedies.
28
_________________________________________________
COMPLAINT
123. Defendants should be required to provide the original note with the appropriate
1
3 under California law, who owns the right to receive payments and exercises the rights
4
relating to said ownership.
5
124. Only the Note Holder is authorized to collect payments and, in the event of a
6
7
default, commence foreclosure proceedings, including authorizing the substitution of a
8 Trustee.
9 125. Until Defendants are able to provide Plaintiff and this Honorable Court the
10
aforementioned documents, this Honorable Court should order that Plaintiff are not
11
required to make any further payments on the Adjustable Rate Note and enjoin any
12
13 further collection activity on the Note, including staying the count down towards the
19
126. Plaintiff realleges and incorporates by reference the above paragraphs 1 through
20 132 as though set forth fully herein.
21 127. The misrepresentations by Defendant BLUE LEAF AND SHAWN RODRIGUEZ
22 and/or Defendants’ predecessors, failures to disclose, and failure to investigate as
23 described above were made with the intent to induce Plaintiff to obligate himself on the
29
_________________________________________________
COMPLAINT
129. As an unsophisticated customer, Plaintiff could not have discovered the true nature
1
of the material facts on their own.
2
130. The accuracy by Defendants and/or Defendants’ predecessors of representation is
3
important in enabling consumers such as Plaintiff to compare market lenders in order
4
to make informed decisions regarding lending transactions such as a loan.
5
131. Plaintiff was ignorant of the facts which Defendants and/or Defendants’
6 predecessors misrepresented and failed to disclose.
7 132. Plaintiff’s reliance on Defendants and/or Defendants’ predecessors was a
8 substantial factor in causing their harm.
9 133. Had the terms of the Loan been accurately represented and disclosed by Defendants
10
and/or Defendants’ predecessors, Plaintiff would not have accepted the Loan nor been
harmed.
11
134. Had Defendants and/or Defendants’ predecessors investigated Plaintiff’s financial
12
capabilities, they would have been forced to deny Plaintiff on this particular loan.
13
135. Defendants and/or Defendants’ predecessors conspired and agreed to commit the
14
above mentioned fraud.
15
136. As a proximate result of Defendants and or Defendants’ predecessors fraud,
16 Plaintiff has suffered damage in an amount to be determined at trial.
17 137. The conduct of Defendants and/or Defendants’ predecessors as mentioned above
18
was fraudulent within the meaning of California Civil Code § 3294(c)(3), and by virtue
19
thereof Plaintiff is entitled to an award of punitive damages in an amount sufficient to
20
punish and make an example of the Defendants.
21
22
SIXTH CAUSE OF ACTION
23
FOR FRAUD
24 (Against All Defendants)
25 138. Plaintiff repeats and realleges Paragraphs 1 through 144 as though fully set forth
26
herein.
27
28
30
_________________________________________________
COMPLAINT
139. An unknown employee of QUALITY LOANS AND BARCLAYS executed on
1
2 behalf the alleged Beneficiary a “Notice of Default” which stated that the payments
3 were due to MERS and BNC as Beneficiary. “Notice of Breach and Default and of
4
Election to Cause Sale of Real Property Under Deed of Trust”.
5
140. On the Notice of Breach, it stated, in part, that Plaintiff as Trustor, to secure certain
6
7
obligations in favor of Defendants, as beneficiary.
17 Plaintiff.
18 143. Plaintiff did rely on these representations and because of their reliance their
19
property will be foreclosed and Plaintiff reliance was justified.
20
144. Plaintiff is informed and believes that the representation as stated on the Notice of
21
Default were a false representation in the following particular(s)
22
23 A. Documents were not provided to the trustee that showed that BNC or MERS was the
28
31
_________________________________________________
COMPLAINT
145. Plaintiff alleges that Defendants, and each of them, were engaged in an illegal
1
2 scheme the purpose of which was to execute loans secured by real property in order to
7
situation. Plaintiff allege that Defendants, and each of them, have represented to
8 Plaintiff and to third parties that they were the owner of the Trust Deed and Note as
9 either the Trustee or the Beneficiary regarding Plaintiff real property. Based on this
10
representation they caused a Notice of Default to be issued and recorded without
11
disclosing their true role, and thereafter a notice of intent to foreclose and finally they
12
14 title and interest in the Subject Property. In fact, Plaintiff allege that the promissory
15
notes which was executed by Plaintiff and which initially formed a basis of a security
16
interest in the subject property, was assigned in violation of Civil Code section 2932.5
17
et seq. because the assignment was not recorded, and as such the promissory note was
18
19 rendered as non-negotiable and no power of sale was conveyed with the note at the
20 time of the assignment, and therefore, Defendants, and each of them, had no lawful
21
security interest in the subject property.
22
146. On or about April 11, 2007 representatives, agents and/or employees of Defendants,
23
24
and each of them, made false representations to Plaintiff in order to fund a loan, in
25 which the Plaintiff’ personal residence was to be security therefore. Plaintiff allege that
26 Defendants, and each of them, made certain representations regarding their honesty,
27
that they were experts in obtaining loans which borrower’s could afford and that they
28
32
_________________________________________________
COMPLAINT
would only offer Plaintiff a loan which was in their best interests given their credit
1
2 history and financial needs and limitations and that Plaintiff could trust the
3 representations of Defendants, and each of them. Plaintiff allege that based upon the
4
representations made by Defendants, and each of them, Plaintiff reasonably reposed his
5
trust in Defendants’ representations and disclosed their private financial information to
6
7
Defendants, in order that Defendants could in keeping with their representations, find a
8 loan which was in the best interests of Plaintiff given his financial needs and
9 limitations. More particularly, Defendants, and each of them, represented that they
10
would not make a loan to Plaintiff unless he could afford the loan, and that they would
11
not make the loan unless and until he had passed the underwriting guidelines of the
12
13 lender, which further assured that the loan being offered to Plaintiff was in fact in the
14 Plaintiff’s best interests, and that the loan was within Plaintiff’s financial needs and
15
limitations.
16
147. Plaintiff alleges that the loans provided by Defendants, and each of them, contained
17
a repayment schedule, whereas, exceeded Plaintiff’ total spendable income, and that
18
19 the loan contained excessive financing was approved to allow closing costs to be
20 financed, that Defendants failed to utilize adequate due diligence regarding Plaintiff’s
21
ability to repay the loan, Defendants’ as part of their continuing scheme intentionally
22
placed Plaintiff’s in a sub-prime loan to the benefit of the Defendants with excessively
23
24
high interest rates, Defendants failed to provide Plaintiff mandated disclosures, and
25 Defendants repeatedly employed coercive tactics in order to force Plaintiff to sign the
26 loan documents.
27
148. Plaintiff is informed and believe and thereupon allege that defendants BNC, and
28
33
_________________________________________________
COMPLAINT
MERS, engaged in some degree in making the loan to Plaintiff including, but not
1
2 limited to: made the loan to Plaintiff by "marketing and extending adjustable-rate
3 mortgage ("ARM") products to Plaintiff in an unsafe and unsound manner that greatly
4
increases the risk that Plaintiff would default on the loan, because the initial payments
5
on the loan exceeded Plaintiff’s established retirement income, and the loan terms
6
7
offered to Plaintiff included ARM products with one or more of the following
14 relative to product choices, material loan terms and product risks, prepayment
15
penalties, and the Plaintiff’s obligations for property taxes and insurance; approving
16
Plaintiff for a loan with inadequate debt-to-income analyses
17
that did not properly consider the Plaintiff’s ability to meet his overall level
18
19 indebtedness and common housing expenses; and/or approving Plaintiff for loan
24
149. Plaintiff alleges that based upon the foregoing representations of Defendants, and
25 each of them, Plaintiff did in fact repose their trust in the representations of
26 Defendants, and each of them, and that such trust was reasonable.
27
150. Plaintiff alleges that Defendants, and each of them, presented a loan to Plaintiff
28
34
_________________________________________________
COMPLAINT
whereby Defendants represented that they did qualify for ordinary underwriting, and
1
2 that the loan was within Plaintiff’ personal financial needs and limitations given the
3 confidential financial information that Plaintiff shared with Defendants, however, the
4
true is that the loan payments exceeded Plaintiff’ established retirement income.
5
151. Plaintiff alleges that Defendants, and each of them, had a duty to disclose the true
6
7
cost of the loan which was made to Plaintiff, and the fact that Plaintiff could not afford
8 the loan in the first instance. Defendants, and each of them, provided Plaintiff a loan
9 through Defendant BNC, and Defendants, and each of them, were secretly
10
compensated, however, they did not disclose for this loan that they were by being paid
11
for its services, and in a spread of the yield of an amount which has not yet been fully
12
13 ascertained as a Yield Spread Premium paid-outside and after the close of escrow.
14 152. Plaintiff is informed and believes and thereupon allege that after the close of escrow
15
Defendant BNC paid the other Defendants herein fees above and beyond the value of
16
the services actually performed and an illegal kickback and added that additional
17
amount to the total amount being financed, however such amount was never disclosed
18
19 to Plaintiff.
20 153. Plaintiff acquired the foregoing property by virtue of the said funding through BNC
21
based on the representations of Defendants, and each of them, that the loan was the
22
best they could obtain for him, and that the loan was well within Plaintiff’s financial
23
24
needs and limitations.
25 154. Plaintiff is informed and believe and thereupon alleges that Defendants, and each of
26 them, represented to Plaintiff that Defendants, and each of them, were working for the
27
benefit of Plaintiff and in their particular best interest to obtain for him the best loan
28
35
_________________________________________________
COMPLAINT
and at the best rates available.
1
2 155. That at the time Defendants, and each of them, made the foregoing false
3 representations to Plaintiff they knew that they were untrue and that these
4
representations were material representations, and that no basis in fact existed to
5
support such fraudulent representations.
6
7
156. That the foregoing representations were made in order to induce Plaintiff to act on
8 and take the said loan(s) in order for both defendants to make a substantial amount of
9 money thereby and there from.
10
157. Plaintiff is in fact induced to and did take these loans based on the said fraudulent
11
representations.
12
13 158. That Plaintiff was induced to rely and did rely on the representations of these
14 defendants through deception and their reliance was justified as they believed that
15
Defendants, and each of them, were working for their and in his best interests.
16
159. That by virtue of Plaintiff’s reasonable reliance and the increased interest they were
17
made to pay, they have been damaged in the loss of their good credit and a higher
18
19 payment and are now being involved in litigation that they did not bargain for, all to
24
while defendants knew all the time that they were deceiving Plaintiff.
25 161. Plaintiff’s reliance was justified based upon the false representations of Defendants,
26 and each of them, and had no reason to believe that a party representing a bank would
27
go to such lengths to deceive and to convert Plaintiff’s property by utilizing such a
28
36
_________________________________________________
COMPLAINT
fraud and artifice.
1
2 162. Plaintiff is informed and believe that Defendants, and each of them, at the time of
3 execution of the Deed of Trust and Note maintained an interest in the Subject Property,
4
however at the time the Note and Deed of Trust were assigned to Defendant BNC, the
5
Note was no longer negotiable and the power of sale was not conveyed during the
6
7
assignment, notwithstanding the foregoing, Defendants, and each of them, foreclosed
8 on Plaintiff’s Trust Deed, in concert with their scheme to defraud Plaintiff out of their
9 property.
10
163. Plaintiff has recently learned that Defendants, and each of them, are not the legal
11
owners of the Note and TRUST DEED and will not be at the time they will issue the
12
13 notices and commenced the foreclosure process, notwithstanding the fact that the note
14 was not negotiable and did not contain a valid power of sale.
15
164. Plaintiff alleges that Defendants, and each of them, knew at the time they made
16
these representations to Plaintiff that they were untrue, and defendants know at the
17
time that they were attempting to foreclose on Plaintiff’ Trust Deeds and notes that
18
20 165. Plaintiff alleges Defendants, and each of them, intentionally and fraudulently
21
converted Plaintiff’ right, title and interest to his property, and any equity therein.
22
166. Plaintiff alleges that due to their reliance on Defendants representations he has been
23
24
damaged in an amount that currently exceeds $25,000.00 and additionally costs of
25 moving out of Plaintiff’s property and the costs to relocate back to the subject
26 Property.
27
167. Defendants’ conduct as set forth above was intentional, oppressive fraudulent and
28
37
_________________________________________________
COMPLAINT
malicious so as to justify an award of punitive damages in an amount sufficient that
1
3 168. Plaintiff will be damaged in having their home wrongfully foreclosed and a slander
4
of their title, and being required to become involved in this litigation all to their
5
damages and injuries the amount of which is subject to proof at the time of trial.
6
7
169. The actions of Defendants and each of them were fraudulent oppressive and
11
SEVENTH CAUSE OF ACTION
12
FOR DECLARATORY RELIEF
13
(Against all Defendants)
14
170. Plaintiff repeats and realleges Paragraphs 1 through 169 as though fully set forth
15
16 herein.
17 171. A dispute has arisen between and among Plaintiff and Defendants and each of them
18
as to the duties and obligations of the respective parties with regard to the loan or the
19
foreclosure.
20
172. These disputes concern but are not limited to the ownership rights and the validity of
21
27
nominated beneficiaries, actual beneficiaries, loan servicers, trustees instituting
38
_________________________________________________
COMPLAINT
1
5 175. Plaintiff repeats and realleges Paragraphs 1 through 175 as though fully set forth
6 herein.
7
176. Plaintiff is informed and believe that the representation as stated on the Notice of
8
Default and each of them were a false representation in the following particulars(s):
9
10
[A] Documents were not provided to the trustee that showed that any of the
15
19 177. Plaintiff repeats and reallege Paragraphs 1 through 176 as though fully set forth
20
herein.
21
Recording of an Assignment Prior to Foreclosure
22
178. Cal. Civ. Code section 2932.5 provides a condition precedent for an assignee of a
23
39
_________________________________________________
COMPLAINT
entitled to payment of the money secured by the instrument. The power of sale
1
7
180. Defendants BNC, QUALITY LOAN, BARCLAYS and MERS, failed to
8 record the assignment prior to commencing the foreclosure as such the Foreclosure was not
9 conducted in accordance with Cal Civ. Code Sec 2924 and 2932.5.
10
Invalid Notice of Default
11
181. There is in existence a certain written instrument which purports to be a Notice of
12
13 Default that is in the possession of Defendants, and each of them. (See Exhibit “B”)
14 182. The written instrument alleged in Paragraph "180" was procured as follows:
15
Defendants cannot prove that the nonjudicial foreclosure which occurred, strictly complied
16
with the tenets of California Civil Code Sections 2923.5 and 2924 in order to maintain an
17
action for possession pursuant to California Code of Civil Procedure section 1161. As of
18
19 September 6, 2008, California Civil Code Section 2923.5 applies to loans made from
20 January 1, 2003, to December 31, 2007, and loans secured by residential real property that
21
are for owner-occupied residences. For purposes of Section 2923.5, “owner-occupied”
22
means that the residence is the principal residence of the borrower. Prior to filing a Notice
23
24
of Default, Section 2923.5 of the California Civil Code provides in pertinent part:
25 (1) A trustee may not file a notice of default pursuant to Section 2924 until 30 days after
26 contact is made as required by paragraph (2) or 30 days after satisfying the due
27
diligence requirements as described in subdivision (g).
28
40
_________________________________________________
COMPLAINT
(2) An authorized agent shall contact the borrower in person or by telephone in order to
1
2 assess the borrower’s financial situation and explore options for the borrower to
3 avoid foreclosure. During the initial contact, the mortgagee, beneficiary, or authorized
4
agent shall advise the borrower that he or she has the right to request a subsequent
5
meeting and, if requested, the mortgagee, beneficiary, or authorized agent shall
6
7
schedule the meeting to occur within 14 days.
8 (3) A notice of default filed pursuant to Section 2924 shall include a declaration from
9 the mortgagee, beneficiary, or authorized agent that it has contacted the borrower,
10
tried with due diligence to contact the borrower as required by this section, or the
11
borrower has surrendered the property to the mortgagee, trustee, beneficiary, or
12
13 authorized agent.
20 183. In addition to California Civil Code §2923.5, California Code of Civil Procedure
21
§2015.5 states:
22
Whenever, under any law of this state or under any rule, regulation, order or
23
24
requirement made pursuant to the law of this state, any matter is required or permitted
41
_________________________________________________
COMPLAINT
established or proved by the unsworn statement, declaration, verification, or
1
2 certificate, in writing of such person which recites that is certified or declared by him
3 or her to be true under penalty of perjury, is subscribed by him or her, and (1), if
4
executed within this state, states the date and place of execution; (2) if executed at any
5
place, within or without this state, states the date of execution and that is so certified or
6
7
declared under the laws of the State of California. The certification or declaration must
14 For our purposes we need not look any farther than the Notice of Default to find the
15
declaration is not signed under penalty of perjury; as mandated by new Civil Code
16
§2923.5(c). (Blum v. Superior Court (Copley Press Inc.) (2006) 141 Cal App 4th 418, 45
17
Cal. Reptr. 3d 902 ). The Declaration is merely a form declaration with a check box.
18
19
24
authorized officer or agent, and the officer him or herself must swear to the facts.”
42
_________________________________________________
COMPLAINT
facts stated therein.” Here, the Declaration for the Notice of Default by the agent does not
1
2 state if the agent has personal knowledge and how he obtained this knowledge.
3 The proper function of an affidavit is to state facts, not conclusions, ¹ and affidavits that
4
merely state conclusions rather than facts are insufficient. ² An affidavit must set forth facts
5
and show affirmatively how the affiant obtained personal knowledge of those facts. ³
6
7
Here, The Notice of Default does not have the required agent’s personal knowledge
8 of facts and if the Plaintiff borrower was affirmatively contacted in person or by telephone
9 to assess the Plaintiff’s financial situation and explore options for the Plaintiff to avoid
10
foreclosure. A simple check box next to the “facts” does not suffice.
11
Furthermore, “it has been said that personal knowledge of facts asserted in an
12
13 affidavit is not presumed from the mere positive averment of facts, but rather, a court
14 should be shown how the affiant knew or could have known such facts, and, if there is no
15
evidence from which the inference of personal knowledge can be drawn, then it is
16
____________________________________________________________________________
17
¹ Lindley v. Midwest Pulmonary Consultants, P.C., 55 S.W.3d 906 (Mo. Ct. App. W.D. 2001).
18
² Jaime v. St. Joseph Hosp. Foundation, 853 S.W.2d 604 (Tex. App. Houston 1st Dist. 1993).
19 ³ M.G.M. Grand Hotel, Inc. v. Castro, 8 S.W.3d 403 (Tex. App. Corpus Chrisit 1999).
20 presumed that from which the inference of personal knowledge can be drawn, then it is
21
presumed that such does not exist.” ¹ The declaration signed by agent does not state
22
anywhere how he knew or could have known if Plaintiff was contacted in person or by
23
24
telephone to explore different financial options. It is vague and ambiguous if he himself
25 called plaintiff.
26 This defendant did not adhere to the mandates laid out by congress before a foreclosure
27
can be considered duly perfected. The Notice of Default states, “That by reason thereof,
28
43
_________________________________________________
COMPLAINT
the present beneficiary under such deed of trust, has executed and delivered to said agent,
1
2 a written Declaration of Default and Demand for same, and has deposited with said
3 agent such Deed of Trust and all documents evidencing obligations secured thereby, and
4
has declared and does hereby declare all sums secured thereby immediately due and
5
payable and has elected and does hereby elect to cause the trust property to be sold to
6
7
satisfy the obligations secured thereby.” However, Defendants do not have the Deed of
8 Trust, nor do they provide any documents evidencing obligations secured thereby. For the
9 aforementioned reasons, the Notice of Default will be void as a matter of law.
10
11
Recording a False Document
12
14 (a) Every person who knowingly procures or offers any false or forged instrument
15
to be filed, registered, or recorded in any public office within this state, which
16
instrument, if genuine, might be filed, registered, or recorded under any law of this
17
state or of the United States, is guilty of a felony.
18
24
(1) He violated a statute, ordinance, or regulation of a public entity;
25
26 _______________________________________________________________________________
27
¹ Bova v. Vinciguerra, 139 A.D.2d 797, 526 N.Y. S.2d 671 (3d Dep’t 1988).
28
44
_________________________________________________
COMPLAINT
1
2 Here, as stated above the Declaration of Due Diligence as required by Section 2923.5 of
3 the California Civil Code is missing and/or improper for the Notice of Default. Therefore,
4
Defendants are guilty of a felony for recording the Notice of Default with a false
5
instrument according to California Penal Code §115. Since Defendants have violated a
6
7
statute, the failure of them to exercise due care will be presumed.
8 183. The written instrument alleged in Paragraph "181" was also procured as follows:
9 By an invalid sale conducted on the part of Defendants, and each of them, in violation of
10
statutes including, but not limited to: Plaintiff is informed and believes and thereupon
11
alleges that the NOTE was invalid and unenforceable due to the intentional and willful
12
13 violations including but, not limited to: California Civil Code 2924b etc. et seq.,
14 California Civil Code §§§ 2924b(a), 2924b(d), 2924b(e) by failing and/or refusing to mail
15
the Notice of Default within ten business days to Plaintiff, by failing and/or refusing to
16
post and mail the Notice of Default; by failing and/or refusing to mail Plaintiff the
17
Notice of Default within one month pursuant to California Civil Code § 2924b (c (1), (2);
18
19 by failing and/or refusing to properly set the sale date pursuant to California Civil Code §
20 2924f(b); by failing and/or refusing to publish the Notice of Sale twenty days prior to the
21
date set for sale pursuant to California Civil Code § 2924f(b); by failing and/or refusing to
22
record the Notice of Sale pursuant to California Civil Code § 2924g(d);
23
24
184. Since the enumerated law was effective as of September 06, 2008 the sale of the
25 property at issue is invalid pursuant to California Civil Code Sections 2923.5 and 2924,
26 and thus the Defendants’ claim of title and allegation thereto is erroneous.
27
28
45
_________________________________________________
COMPLAINT
185. Plaintiff alleges that Defendants, and each of them, willfully, wrongfully and
1
2 without justification, and without privilege conducted an invalid foreclosure sale against
7
new law delays the non-judicial foreclosure process by requiring an addition 90-day delay
8 (beyond the current three-month period) between recording a notice of default and a
9 notice of stay for certain residential properties. The law applies to:
10
1. Loans recorded between January 1, 2003 and January 1, 2008, inclusive,
11
2. The borrower occupies the property as his/her principal residence and occupied it
12
19 of residence and his deed was dated on November 15, 2005. Therefore, the California
20 Foreclosure Prevention Action applies and they should be allowed an additional 90 days
21
(plus the three-month period already) after Notice of Default is recorded.
22
188. The Trustee's Deed Upon Sale obtained after the sale is false and causes a doubt
23
24
to be cast on Plaintiff’s title to the property described above.
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COMPLAINT
motivated by oppression, fraud, malice in that Defendants, and each of them, by their
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3 invalid foreclosure sale of the Plaintiff’s SUBJECT PROPERTY, in order to deny Plaintiff
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of his rights of possession and ownership, whereupon, the Foreclosure was defective as
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such the Property must be restored to Plaintiff or Plaintiff is entitled to the value of thereof.
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8 WHEREFORE, Plaintiff having set forth the claims for relief against Defendants,
9 respectfully pray that this Court grant the following relief against the Defendants:
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1. For exemplary and punitive damages;
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2. Actual Economic and Non-Economic Damages;
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13 3. Costs and reasonable attorney’s fees pursuant to California Civil Code §1717,
14 §1788.30(b), §1788.30(c);
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4. For a declaration of the rights of the parties relative to Plaintiff’s Home, including
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a declaration that Defendants have no enforceable lien against Plaintiff’s Home;
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5. For a preliminary injunction and permanent injunction enjoining all Defendants,
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19 their agents, assigns, and all person acting under, for, or in concert with them, from
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7. For damages as provided by statute;
25 8. For an Order enjoining Defendants from continuing to violate the statutes alleged
26 herein;
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COMPLAINT
9. For an Order, requiring Defendant to reinstate Plaintiff on title to his Property, and
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2 or a restraining order preventing Defendants and his, hers, or its agents, employees,
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10. For such other and further relief as the court may deem just and proper.
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Dated: August 5, 2009
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LAW OFFICES OF TIMOTHY MCCANDLESS ESQ.
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11 ______________________________________________
Timothy L. McCandless, Esq.,
12 Attorney for Plaintiff,
TIMOTHY A. ARMSTRONG
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ROSEMARY ARMSTRONG
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COMPLAINT
1
VERIFICATION
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4 the State of California and have my office in San Bernardino County, California, and am the
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attorney for the Plaintiff in this action, that all of the officers of the Plaintiff are unable to make the
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verification because they are absent from said County and for that reason affiant makes this
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verification on the Plaintiff’s behalf; that I have read the foregoing document and know its
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9 contents. I am informed and believe and on that ground allege that matters stated herein are true.
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DATED: August 5, 2009
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___________________________________
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TIMOTHY L. MCCANDLESS, ESQ
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COMPLAINT