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California Complaint for Wrongful Foreclosure, Fraud, 17200 Violations, Violation of California Civil Code Section 2924j and 2924k, Violation of Rosenthal Fair Debt Collection Act, Negligence and Conversiont Form
California Complaint for Wrongful Foreclosure, Fraud, 17200 Violations, Violation of California Civil Code Section 2924j and 2924k, Violation of Rosenthal Fair Debt Collection Act, Negligence and Conversiont Form
California Complaint for Wrongful Foreclosure, Fraud, 17200 Violations, Violation of California Civil Code Section 2924j and 2924k, Violation of Rosenthal Fair Debt Collection Act, Negligence and Conversiont Form
(SBN 180765)
1 Law Offices of Cameron H. Totten
2 620 N. Brand Blvd., Ste. 405
Glendale, California 91203
3 Telephone: (818) 483-5795
Facsimile: (818) 230-9817
4 Email: [email protected]
16 in the State of California. Quality and DOES 1 through 10 are collectively referred to herein as
17 “Quality.”
18 6. Plaintiff is ignorant of the true names and capacities of the defendants sued herein
19 as DOES 1 through 10 and, therefore, sues these defendants by such fictitious names. Plaintiff
20 will amend this complaint to allege their true names and capacities when ascertained.
16 would substantially assist the accomplishment of the wrongful conduct, wrongful goals, and
17 wrongdoing.
18 11. Defendants, and each of them, knowingly and willfully conspired, engaged in a
19 common enterprise, and engaged in a common course of conduct to accomplish the wrongs
20 complained of herein. The purpose and effect of the conspiracy, common enterprise, and
21 common course of conduct complained of was, inter alia, to financially benefit Defendants at the
22 expense of Plaintiff by engaging in fraudulent activities. Defendants accomplished their
23 conspiracy, common enterprise, and common course of conduct by misrepresenting and
24 concealing material information regarding the servicing of loans, and by taking steps and
25 making statements in furtherance of their wrongdoing as specified herein. Each Defendant was
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a direct, necessary and substantial participant in the conspiracy, common enterprise and common
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course of conduct complained of herein, and was aware of its overall contribution to and
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16 The implosion of the real estate market is at the center of the crisis. It has created a frenzy
17 among banks such as Chase, the largest corporation in terms of assets in the world, to foreclose
18 on as many properties as possible. It has recently come to light that, in their quest to foreclose
19 on properties as quickly as possible, Chase and other lenders have been acting outside of the law
21 15. Specifically, on or about September 30, 2010, the California Office of the
22 Attorney General sent a cease and desist letter to Chase demanding that it halt all foreclosures in
23 California unless it can establish that it is complying with California Civil Code Section 2923.5,
24 which it violated in this action. A true and correct copy of said letter is attached hereto as
25 Exhibit “A.”
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16. Thereafter, on October 4, 2010, members of the California Democratic
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Congressional Delegation wrote a letter to Eric Holder, United States Attorney General; Ben S.
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16 18. Plaintiff purchased her property at 644 Priscilla Lane in Burbank, California, in
17 1991. She refinanced it in 2001, obtaining a new first trust deed from WaMu (“FTOD”). A true
18 and correct copy of the FTOD which listed “Washington Mutual Bank, FA, a federal
19 association” as the lender and “California Reconveyance Company” as the trustee, is attached
20 hereto as Exhibit “C.” She obtained an equity line of credit in 2003 from WaMu recorded as a
21 second trust deed (“STOD”). A true and correct copy of the STOD which listed “Washington
22 Mutual Bank, FA, a federal association” as the lender and “Group 9 Inc.” as the trustee, is
23 attached hereto as Exhibit “D.” The proceeds of the equity line were used for remodeling of the
24 bath and kitchen of her home.
25 19. Due to cutbacks in her work schedule, Plaintiff fell behind in her mortgage
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payments in 2007. She requested a loan modification of her loans with WaMu. Pursuant to the
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request of WaMu, Plaintiff submitted documents several times in 2008 for this purpose. In early
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16 would occur as long as Plaintiff complied with the Trial Period Plan.
17 24. Plaintiff did not sign this loan modification agreement as the loan payments were
18 too high as a result of its non-compliance with the HAMP guidelines. She was told by Chase
19 that it would review the matter again and, as long as the matter was being reviewed, there would
20 be no foreclosure of her property. The representative that Plaintiff spoke with never indicated
16 27. On December 20, 2009, Plaintiff sent a payment of $350.00 to Chase by Western
17 Union pursuant to the Agreement. A copy of this receipt is attached hereto as Exhibit “H.”
18 Plaintiff spoke to Ms. Cleveland thereafter and she acknowledged receipt of the payment.
19 28. However, on December 25, 2009, a man knocked on the door of Plaintiff’s home
20 and said his name was and that he was the new owner of Plaintiff’s home. Plaintiff told Mr. that
21 there must be some mistake. Plaintiff called Ms. Cleveland at Chase the next business day,
22 December 28, 2009, and asked what was going on. Ms. Cleveland told Plaintiff that, according
23 to Chase’s records, there was no foreclosure, Mr. was likely engaged in fraudulent conduct and
24 that she should continue to make her payments pursuant to the Agreement. Accordingly, on
25 December 30, 2009, Plaintiff sent Chase a third payment in the amount of $ 400.00 pursuant to
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the Agreement. A copy of the receipt from Western Union is attached hereto as Exhibit “I.”
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Chase never returned any of the payments made by Plaintiff.
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18 substituted California Reconveyance Company for itself. The Substitution was allegedly signed
19 by “Christina Allen as Attorney in Fact [for] JPMorgan Chase Bank, National Association” on
20 February 25, 2009. A true and correct copy of said Substitution of Trustee is attached hereto as
21 Exhibit “K.” Thus, Quality executed and recorded the Notice of Default before it had the legal
22 authority to do so. Accordingly, the Notice of Default and all subsequent documents are void
23 and of no legal effect.
24 33. Moreover, based upon information and belief, Christina Allen was not an
25 Attorney in Fact for JP Morgan Chase. Instead, she was an employee of LPS which was
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allegedly the Attorney in Fact for JP Morgan Chase through a limited power of attorney, a true
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and correct copy of which is attached hereto as Exhibit “L.” That is, Ms. Allen did not have the
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16 35. Nevertheless, Quality thereafter recorded a Notice of Trustee’s Sale on May 28,
17 2009. A true and correct copy of the Notice is attached hereto as Exhibit “M.” As a duly
18 recorded and legally valid Notice of Default and Substitution of Trustee is required before
19 Quality could serve and record a Notice of Trustee’s Sale, and the former never happened, the
21 36. Also, based on information and belief, Quality failed to continue the trustee’s sale
22 to December 15, 2009, in the manner required by California Civil Code Section 2924g.
23 37. After the sale, Quality promptly paid Chase’s allegedly outstanding balances on
24 the promissory notes for the FDOT and SDOT in full without any investigation. However,
25 Quality failed and refused to remit payment of the remaining surplus funds ($54,342.50) to
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Plaintiff until approximately nine (9) months later when it remitted payment to Plaintiff in the
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amount of $51,676.56. Moreover, Quality wrongfully deducted its attorney’s fees and costs
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17 41. Accordingly, the payments were essentially a “set-off” in which Chase attempted
18 to satisfy a portion of their debt secured by real property by attaching property other than the
19 secured real property, i.e., the $1,200.00 Plaintiff paid to Chase which it was not entitled to
20 collect given the fact that that they had already chosen to foreclose on the Subject Property.
21 Accordingly, Chase’s actions were a clear violation of the Security First Rule set forth in Code
22 of Civil Procedure (“CCP”) §726.
23 42. Said violation of CCP §726 and Chase’s refusal to return the set-off funds
24 rendered Chase’s FDOT and SDOT null and void. Accordingly, Chase’s security interests in the
25 Subject Property did not exist at the time of foreclosure sale. Therefore, the foreclosure sale was
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invalid and void as well.
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17 46. Accordingly, Chase breached the oral agreement it entered into with Plaintiff not
18 to proceed with the foreclosure process while it was reviewing the loan modification agreement.
19 47. As a proximate result of Chase’s breaches, Plaintiff has suffered, and will
20 continue to suffer, general and special damages in an amount according to proof at trial.
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17 with Fannie Mae (acting as an agent of the federal government) on July 31, 2009, in which
18 Chase agreed to apply the Treasury Department's HAMP criteria to all of the loans they service,
19 including Plaintiff's. Based upon information and belief, a true and correct copy of the SPA is
21 55. Pursuant to the SPA and HAMP, Chase agreed to suspend all pending foreclosure
22 proceedings until the HAMP analysis was completed for all homeowners, including Plaintiff.
23 Plaintiff is a third party beneficiary of this agreement.
24 56. Pursuant to the SPA and the HAMP, Chase agreed to offer a 3 month HAMP
25 Trial Period at a payment level of 31 percent of income to all borrowers, including Plaintiff, who
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meet the HAMP criteria and pass the NPV test.
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16 WaMu’s assets. Moreover, Quality was not lawfully appointed as trustee by Chase, LPS and/or
17 DOES 1 through 10. Accordingly, none of the Defendants in this action had the right to declare
19 the Subject Property. None of the Defendants in this action was the note holder or a beneficiary
21 61. Plaintiff further alleges on information and belief that none of the Defendants in
22 this action were beneficiaries or representatives of the beneficiary. That is, none of them were
23 assigned the promissory notes and deeds of trust executed by Plaintiff. Also, Chase and/or LPS
24 failed to record the Limited Power of Attorney concurrently with the Substitution of Trustee as
25 required under California law. Moreover, Ms. Allen did not have the authority to substitute the
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trustee under the FDOT and, even if she did, Quality acted unlawfully before it was allegedly
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substituted in as trustee.
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18 telephone in order to assess the borrower’s financial situation and explore options for the
20 declaration “from the mortgagee, beneficiary, or authorized agent” of compliance with section
21 2923.5, including attempt “with due diligence to contact the borrower as required by this
22 section.” None of the Defendants assessed Plaintiff’s financial situation correctly or in good
23 faith prior to filing either of the Notices of Default against the Subject Property in this action.
24 Accordingly, the Defendants did not fulfill their legal obligation to Plaintiff prior to filing of the
25 Notices of Default and, therefore, any acts based on the Notice of Default taken thereafter were
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invalid and void.
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17 69. Chase made written representations in the Forbearance Agreement that if the
19 representatives, including Ms. Cleveland and others, made numerous oral promises that if
20 Plaintiff complied with the terms of the Forbearance Agreement and cooperated with
21 modification efforts, there would be no foreclosure. Plaintiff was never informed by Chase that
22 it was Chase’s position that she did not comply with the Forbearance Agreement. Alternatively,
23 as a result of Plaintiff’s compliance with the Agreement and Chase’s acceptance of payments,
24 Chase waived its right to challenge or deny the existence of the Agreement and/or is estopped
25 from denying the existence of the Agreement.
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70. Plaintiff justifiably relied on the written and oral representations of Chase to her
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detriment. The Forbearance Agreement was supported by consideration as shown by the
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16 73. Chase breached the SPA agreement with the federal government of which
17 Plaintiff is a third party beneficiary. Accordingly, Chase should be estopped from claiming any
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16 claimants, the trustee may file a declaration of the unresolved claims and deposit
17 with the clerk of the superior court of the county in which the sale occurred, that
18 portion of the sales proceeds that cannot be distributed, less any fees charged by
20 ...
21 Upon deposit of that portion of the sale proceeds that cannot be distributed by
22 due diligence, the trustee shall be discharged of further responsibility for the
23 disbursement of sale proceeds. A deposit with the clerk of the court pursuant to
24 this subdivision may be either for the total proceeds of the trustee's sale, less any
25 fees charged by the clerk, if a conflict or conflicts exist with respect to the total
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proceeds, or that portion that cannot be distributed after due diligence, less any
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fees charged by the clerk.
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16 (1) To the costs and expenses of exercising the power of sale and of sale,
17 including the payment of the trustee's fees and attorney's fees permitted pursuant
19 (2) To the payment of the obligations secured by the deed of trust or mortgage
21 (3) To satisfy the outstanding balance of obligations secured by any junior liens
22 or encumbrances in the order of their priority.
23 (4) To the trustor or the trustor's successor in interest. In the event the property is
24 sold or transferred to another, to the vested owner of record at the time of the
25 trustee's sale.
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(b) A trustee may charge costs and expenses incurred for such items as mailing
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and a reasonable fee for services rendered in connection with the distribution of
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16 2924j and 2924k, Plaintiff has suffered, and will continue to suffer, compensatory, general and
17 special damages in an amount to proof. Additionally, Quality acted with malice, fraud and/or
18 87. At all times relevant herein, Quality, acting as the alleged trustee under the
19 FDOT, but without the legal authority to do so, had a duty to exercise reasonable care and skill
20 to follow California law with regard to foreclosures, refrain from taking any action against
21 Plaintiff that it did not have the legal authority to do, and immediately remit payment to Plaintiff
22 of all surplus funds from the foreclosure sale for which there were no competing claims.
23 88. In taking the actions alleged above, and in failing to take the actions as alleged
24 above, Quality breached its duty of care and skill to Plaintiff by failing to properly train and
25 supervise its agents and employees with regard to California law regarding surplus funds and
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substitution of trustees; failing to follow California law with regard to foreclosures, including,
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but not limited to, acting as the trustee under the FDOT when it did not have the legal authority
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16 surplus funds within thirty (30) days of the foreclosure sale and by deducting its attorney’s fees
17 and costs when Sections 2924j and 2924k did not provide a statutory basis for either.
18 93. Quality’s violations of Sections 2924j and 2924k caused Plaintiff the loss of use
19 of her funds for nine (9) months, the loss of interest on the funds for nine (9) months and the
20 continual loss of approximately $2665.94 which was converted by Quality to pay for their own
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16 that Quality knew, or in the exercise of reasonable care should have known, that its employees
17 and agents hired or retained to handle surplus funds claims were incompetent and unfit to
18 perform the job that they were hired to perform and that the performance of this job involved the
19 risk of harm to others such as Plaintiff. Specifically, Quality hired and retained an employee or
20 agent, Esq., to oversee the handling and management of surplus funds resulting from
21 foreclosure sales. At the time that he handled Plaintiff’s claim, he was serving a two year
22 probation ordered by the State Bar of California as a result of his misappropriation of trust funds
23 in a prior matter. Instead of the disciplinary proceedings against Mr. disqualifying him for a
24 position involving the management of trust funds, Quality did the exact opposite and placed him
25 in a position of tremendous authority over trust/surplus funds.
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99. Quality knew or should have known that Mr. was unfit and unsuitable for the
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position of handling and managing surplus, i.e., trust, funds, and supervising other employees
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16 authority to do.
17 101. As a direct and proximate result of the negligence and carelessness of Quality as
18 set forth above, Plaintiff suffered, and continues to suffer, general and special damages in an
20 102. Finally, because Quality had advance knowledge of the unfitness of Mr. and
21 employed him with a conscious disregard of the rights of others, Plaintiff is entitled to punitive
22 damages pursuant to Civ. Code, § 3294(b).
23 TWELFTH CAUSE OF ACTION FOR NEGLIGENT MISREPRESENTATION
24 AGAINST JP MORGAN CHASE, CHASE AND DOES 1-10
25 103. Plaintiff incorporates herein by reference the allegations made in paragraphs 1
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through 102, inclusive, as though fully set forth herein.
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17 109. As a proximate result of Chase’s negligent conduct, Plaintiff has suffered, and
18 will continue to suffer, general and special damages in an amount according to proof at trial.
16 Chase intentionally made the representations as part of Chase’s pattern and practice to deceive
17 borrower’s such as Plaintiff into relying to their detriment so that Chase could foreclose on
18 homes before borrower’s could seek other remedies or options. The exact same thing happened
19 to Plaintiff. Plaintiff justifiably relied on the oral and written representations of Chase and
20 Chase’s written Forbearance Agreement that no foreclosure would take place during the loan
21 modification and forbearance process and did not seek other remedies or pursue other options.
22 As a proximate result of Chase’s fraudulent misrepresentations, Plaintiff lost her home of 19
23 years and inflicted great emotional distress and suffering on Plaintiff.
24 114. Accordingly, as a result of Chase’s fraudulent conduct, Plaintiff has suffered, and
25 will continue to suffer, compensatory, general and special damages in an amount to proof.
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Additionally, Chase acted with malice, fraud and/or oppression and, thus, Plaintiff is entitled to
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an award of punitive damages.
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16 Plaintiff signed the Forbearance Agreement and sent three payments as agreed, Chase foreclosed
17 on Plaintiff’s property anyway without notice. In fact, Chase accepted three payments pursuant
18 to the Forbearance Agreement that Chase asserts was never in effect because of Plaintiff’s tardy
19 first payment.
20 119. Additionally, after Plaintiff’s debt was extinguished by the foreclosure sale of her
21 property, Chase continued to demand and accepted payment from Plaintiff on a nonexistent
22 debt. Chase received but did not refund the payment made by Plaintiff after the foreclosure sale
23 occurred.
24 120. As a proximate result of Chase’s violations of the Rosenthal Act, Plaintiff is
25 entitled to actual and statutory damages, attorney’s fees and costs, and such other relief as the
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court determines is due.
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16 interest (plus interest on the entire amount up to and including mid-September 2009 when
17 Quality wrongfully withheld the entire amount from Plaintiff) is currently due and owing to
18 Plaintiff. Accordingly, Quality deprived Plaintiff of the use and possession of $51,676.56 until
19 mid-September 2010 during a time when she was facing financial difficulties. Additionally,
20 Quality is still depriving Plaintiff of the use and possession of $2665.94 which was converted by
16 (c) Executing and recording documents without the legal authority to do so;
17 (d) Failing to disclose the principal for which documents were being executed
17 Defendants.
18 131. The foregoing acts and practices have caused substantial harm to California
19 consumers.
20 132. Plaintiff alleges that as direct and proximate result of the aforementioned acts,
21 Defendants have prospered and benefitted from Plaintiff by collecting mortgage payments and
22 fees for foreclosure related services, and have been unjustly enriched from their act of
23 foreclosing on Plaintiff’s home when they had agreed not to do so and/or to do so in compliance
24 with applicable laws.
25 133. By reason of the foregoing, Defendants have been unjustly enriched and should
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be required to disgorge their illicit profits and/or make restitution to Plaintiffs and other
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California consumers who have been harmed, and/or be enjoined from continuing in such
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16 4. For civil penalties pursuant to statute, restitution, injunctive relief and reasonable
19 6. For reasonable costs of suit and such other and further relief as the Court deems
20 proper.
23 By: ____________________________
Cameron H. Totten
24 Attorney for Plaintiff
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JURY DEMAND
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Plaintiff demands a jury trial for all claims set forth herein.
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By:
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Cameron H. Totten
4 Attorney for Plaintiff
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