TIMOTHY L. MCCANDLESS, ESQ.

SBN 147715
1
LAW OFFICES OF TIMOTHY L. MCCANDLESS
2 13240 Amargosa Road
Victorville, California 92392
3
(760) 951-3663 Telephone
4
(909) 382-9956 Facsimile
5

6 Attorney for Plaintiff

7
SUPERIOR COURT FOR THE STATE OF CALIFORNIA
8
IN AND FOR COUNTY OF SAN BERNARDINO
9

10
TIMOTHY A. ARMSTRONG
CASE NO: xxxxx
11

12 Plaintiff, COMPLAINT FOR:

MONETARY DAMAGES
13 V. STATUTORY DAMAGES, PUNITIVE
DAMAGES, INJUNCTIVE RELIEF AND
14 DECLARATORY RELIEF
15 1. VIOLATION OF CALIFORNIA CIVIL
BNC MORTGAGE, INC., a Delaware CODE §2923.6;
16 2. VIOLATION OF BUSINESS AND
Corporation, NEW CENTURY MORTGAGE
CORPORATION, BLUE LEAF PROFESSIONS CODE §17200;
17 3. BREACH OF COVENANT OF GOOD
FINANCIAL INC., a Corporation; BLUE AND FAIR DEALING;
18 LEAF FINANCIAL INC., a Corporation; 4. INJUNCTIVE RELIEF;
QUALITY LOAN SERVICE 5. VIOLATION OF CIVIL CODE §1572;
19
CORPORATION; BARCLAYS CAPITAL 6. FRAUD;
20 REAL ESTATE INC., dba HOME EQ 7. DECLARATORY RELIEF;
SERVICING, a corporation, and DOES 1 8. INTENTIONAL MISREPRESENTATION;
21 through 50 inclusive 9. TO SET ASIDE FORECLOSURE
10. VIOLATION OF CALIFORNIA CIVIL
22 CODES §2923.5 AND §2924.
Defendants.
23

24
Plaintiff, TIMOTHY A. ARMSTRONG, (Hereinafter referred as “Plaintiff”) alleges herein as
25
follows:
26

27 I.
28

1
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COMPLAINT
 GENERAL ALLEGATIONS
1

2 Plaintiff TIMOTHY A. ARMSTRONG

3 1. t all times relevant has been a resident of the County of San Bernardino, State of
4
California and the owner of Real Property, including but not limited to the property at
5
issue herein, 13191 Central Road, Apple Valley, CA 92308. The Legal descriptions
6

7
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
10
of California, as per map recorded in Book 81 page(2) 16 and 17, of maps, in the office of
11
the county recorder of said County, California (hereinafter “Subject Property”)
12

13 2. Defendant BNC MORTGAGE, INC., (hereinafter “BNC”) at all times herein

14 mentioned was doing business in the County of San Bernardino, State of California and
15
was the original Lender for Plaintiff’s Deed of Trust Deed and Note. BNC, formerly a
16
Delaware Corporation and who used to do business in California has surrendered its
17
status and their agent for service of process resigned on February 9, 2009. Moreover,
18

19 Lehman Brothers closed this subprime subsidiary business .

20 3. BLUE LEAF FINANCIAL INC. (hereinafter “BLUE LEAF”) at all times herein
21
mentioned was doing business in Beverly Hills, County of Los Angeles and is
22
registered to with the Secretary of State of California. BLUE LEAF is engaged in the
23

24
business of promoting, marketing, distributing and selling the Arm Loans that are the

25 subject of this Complaint.

26 4. MORTGAGE ELECTRONIC REGISTRATION SERVICES (hereinafter “MERS”) at
27
all times herein mentioned was presumed to being doing business in the County of San
28

2
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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.

3 5. QUALITY LOAN SERVICE CORPORATION (hereinafter “QUALITY LOAN”) at

4
all times herein mentioned is doing business in the County of San Diego and is
5
handling the Notice of Trustee’s Sale for this property.
6

7
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.
10
7. Plaintiff is ignorant of the true names and capacities of defendants sued herein as
11
DOES 1 through 50, inclusive, and therefore sues these defendants by such fictitious
12

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
15
cloud on Plaintiff’s title thereto. Plaintiff will amend this complaint to allege their true
16
names and capacities when ascertained.
17
8. Plaintiff is informed and believes and thereon alleges that, at all times herein
18

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
21
ratified the conduct of each and every other defendant. Plaintiff further alleges that at
22
all times said defendants were was acting within the purpose and scope of such agency
23

24
and employment.

25 II.
26 HISTORICAL BACKGROUND
27

28

3
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COMPLAINT
 9. Plaintiff purchased the foregoing Real Property on or about November 15, 2005 when
1

2 he financed his purchase through BNC by virtue of a Deed of Trust. The loan was in

3 the sum of $256,500.00 by monthly payment commencing thereof. Plaintiff executed

4
an “Adjustable Rage Note” promising to pay BNC, at the rate of 6.950% the amount of
5
$1,697.90 commencing January 1, 2006.
6

7
10. Plaintiff is informed and believe that directly after BNC caused Mortgage Electronic

8 Registration Systems (“MERS”) to go on title as the “Nominee Beneficiary” this is

9 routinely done in order to hide the true identity of the successive Beneficiaries when
10
and as the loan was sold. MERS, however, acted as if they were the actual beneficiary
11
although a Nominee is an entity in whose name a security is registered through true
12

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
15
the lack of consideration paid by MERS, Plaintiff allege that the Deed of Trust were
16
never perfected and are a nullity as the MERS recording separates the Debt from the
17
Lien, and this is more so especially upon a sale of the Note and Trust Deed.
18

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
21
as an agent for multiple Banks, insurance and title companies and Mortgage
22
Companies because of a serious Conflict of interest. In addition Plaintiff allege that a
23

24
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.
27

28

4
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COMPLAINT
 12. Plaintiff further alleges that MERS failure to transfer beneficial interests as the Note
1

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
4
his loan and that payments were due to MERS and BNC as Beneficiary. However this
5
default of the loan was occasioned by the high payments, the structure of the loan and
6

7
interest rate and the fact that Plaintiff were not provided full disclosure of the terms of

8 their loan.
9

10
III.
11
DEFENDANTS FAILED TO COMPLY WITH CALIFORNIA CIVIL
12

13 CODES REGARDING FORECLOSURE PROCEDURES

14 14. Plaintiff was forced into default of their payments due to non-full disclosure of their
15
loan through BNC. Moreover, the Declaration of Due Diligence attached to the Notice
16
of Default is void because the required “penalty of perjury” and signature of a person
17
with actual knowledge is missing which will be discussed later in the complaint.
18

19 15. Plaintiff alleges that the loan contract was procedurally and substantively

20 unconscionable because at the time, Plaintiff informed DEFENDANT SHAWN

21
RODRIGUEZ, an employee of DEFENDANT BLUE LEAF THAT he was
22
unemployed at the time, whereas, the payment on the loan exceeded the Plaintiff’
23

24
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.
27

28

5
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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.
4
17. Defendants BLUE LEAF or BNC did not disclose at any time to Plaintiff that the
5
initial loan payment would exceed his entire income. Plaintiff alleges that the loan
6

7
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
10
obtained improper fees for the placement of their loan as “sub-prime” when they
11
qualified for a prime rate mortgage which would have generated less in fees and
12

13 interest. [See Exhibit “1” – Declaration of Timothy Armstrong.]

14 19. On information and belief, Plaintiff alleges that the service of the purported note was,
15
without their knowledge, by some means transferred from or by Defendant BNC either
16
completely or by association or other means to MERS who unknown to Plaintiff
17
provided services in various forms to be determined to others which were of such a
18

19 nature to render them a “Servicer.”

20 20. Also on November 15, 2005 Plaintiff executed a “Deed of Trust” which cited the
21
lenders as BNC and stating in the definition section that:
22
(E) “MERS” is a Mortgage Electronic Registration Systems, Inc., MERS is a separate
23

24
corporation that is acting solely as a nominee for Lender and Lender’s successors and

25 assigns. MERS is the beneficiary under this Security Instrument.

26 21. Plaintiff alleges that Defendant BNC and a superior bargaining strength over Plaintiff,
27
and that Plaintiff is relegated only the opportunity to adhere to the contract or reject it,
28

6
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COMPLAINT
 that BNC drafted all of the documents related to the loan, that no negotiations were
1

2 possible between Plaintiff and BNC, and QUALITY LOAN, BLUELEAF, MERS, and

3 that the contract was a contract of adhesion.

4
22. Plaintiff alleges that the loan was unconscionable in that the repayment terms were
5
unfair and unduly oppressive, because the payments exceeded Plaintiff entire combined
6

7
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.
10
23. Plaintiff is informed and believes and thereupon alleges that Defendants, especially
11
SHAWN RODRIGUEZ and BLUE LEAF, and each of them, entered into a fraudulent
12

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
15
then prevailing market rate, made loans to Plaintiff and falsely represented to Plaintiff
16
that they could not qualify for any other financing, that Plaintiff could not qualify
17
under any reasonably underwriting guidelines, that such scheme was devised to extract
18

19 illegal and undisclosed compensation from Plaintiff by virtue of an undisclosed yield

20 spread premium and which Defendants, and each of them, shared in some presently
21
unknown percentage.
22
24. Plaintiff is informed and believes and therefore alleges that their loans after they were
23

24
originated and funded were sold on multiple occasions, bundled into a group of Trust

25 Deeds and subsequently sold to investors as a Derivative, “Mortgage Backed Security”,

26 and that therefore none of these defendants, and each of them, owned this loan, or Note
27
and cannot be and are not the Beneficiary, or lawfully appointed trustee, and have no
28

7
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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
4
time in regards to this loan.
5
25. That none of these Defendants, and each of them, were ever disclosed as the
6

7
beneficiary in accordance with California Code of Civil Procedure section 2924 et

8 seq.
9 IV.
10
NEW LAW
11
Moreover The California Legislature passed Senate Bill 1137, impacting residential
12

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
15
amends California Code of Civil Procedure Section 1161(b) regarding notice of an eviction. It
16
adds a provision strengthening the right of local governments to adopt “blight” ordinances and
17
moreover, it modifies the non-judicial foreclosure procedures set forth in California Civil Code
18

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
21
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…”
24

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
27
and December 3, 2007. California Civil Code Section 2924 states in part:
28

8
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COMPLAINT
 Foreclosure:
1

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
4
provisions of the non-judicial foreclosure procedures found in California Code of Civil
5
Procedure §2924, by adding requirements for meetings, due diligence, and notification of
6

7
counseling. Some of the more important provisions include all of the following:

8
• The lender, beneficiary or authorized agent must wait thirty (30) days after contact is
9

10
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.
12
• The contact requires that the borrower’s financial situation be assessed and requires that
13
the borrower and lender explore options for the borrower to avoid foreclosure.
14
This was not done by defendants or the lender.
15

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
18
contact.
19
• The borrower is to be provided a toll free telephone number available at HUD for
20
certified housing counseling agencies.
21

22 • The borrower may designate an authorized agent, such as a counseling service,

23 REALTOR® or attorney, to act as their authorized agent but must expressly approve any
24
workout agreement reached by that agent.
25
• The Notice of Default must include a declaration indicating that the lender has made the
26

27
contact or made a diligent effort to make the contact and will not apply in the event of

28 surrender of the property.

9
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COMPLAINT
 • If the Notice of Default was already recorded prior to the date of the Statute, this
1

2 declaration must be included in Notices of Sale.

3 • In the event that the lender is initially unable to contact the borrower, they must attempt
4
telephone contact on three separate occasions at three different times.
5
• The lender must provide the borrower with an (800) number that will be answered by a
6

7
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.
10
- A list of financial documents to gather when discussing their options.
11
- A toll-free telephone number available by HUD for certified counseling services.
12

13 - A toll-free telephone number for borrower’s to discuss options to avoid foreclosure with

14 the lender or lender’s representative.

15
Defendants did not fully comply with this code therefore the title is not duly
16
perfected.
17

18
26. Plaintiff further alleges on information and belief that none of these alleged
19
beneficiaries or representatives of the Beneficiary have the original note to prove that
20

21
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
23
executed in accordance with the requirements of California Civil Code Sections
24
2923.5, 2932.5 and Commercial Code section 3302 et seq.
25
28. That the notices and foreclosure failed to conform with the provisions of California
26

27 Civil Code Sections 2923.5, 2932.5 et seq., and Commercial Code section 3302

28

10
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COMPLAINT
 et seq. Furthermore, the Notice of Default did not have a penalty of perjury
1

2 disclosure, nor is the agent of personal knowledge. Therefore, it is not a valid

3 declaration.
4
29. Plaintiff further alleges that California Civil Code section 2924 et seq. and its subparts
5
are being applied to Plaintiff in a manner that is unlawful, because at least in part the
6

7
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
10
covey the power of sale because it violated the terms of California Civil Code section
11
2932.5, that the assignment when it was made, that the Note executed by Plaintiff was
12

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
15
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
17
conform to the strict mandates of Civil Code section 2924.76.
18

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
21
good standing and could get Plaintiff approved for the loan. Defendants did not
22
disclose at any time to Plaintiff that the initial loan payment would exceed their entire
23

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.
27

28

11
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COMPLAINT
 32. That by virtue of the method and manner of Defendants carrying out Civil Code
1

2 section 2924 et seq., the foreclosure of the Subject Property is void ab initio as a matter

3 of law.
4
33. Plaintiff alleges that Defendants, and each of them, are engaged in and continue to
5
engage in violations of California law including but, not limited to: Civil Code section
6

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.
10
V.
11
CALIFORNIA LEGISLATURE FINDINGS
12

13
34. Recently, the California Legislature found and declared the following in enacting
14
California Civil Code 2923.6 on July 8, 2008:
15

16

17 (a) California is facing an unprecedented threat to its state economy because

18 of skyrocketing residential property foreclosure rates in California. Residential

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

21 into default, the first step in the foreclosure process.

22

23 (b) High foreclosure rates have adversely affected property values in

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

26 number of completed California foreclosure sales in 2007’ increased almost

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

12
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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

5 (c) Under specified circumstances, mortgage lenders and servicers are

6 authorized under their pooling and servicing agreements to modify mortgage loans
7 when the modification is in the best interest of investors. Generally, that
8 modification may be deemed to be in the best interest of investors when the net
9 present value of the income stream of the modified loan is greater than the amount
10 that would be recovered through the disposition of the real property security
11 through a foreclosure sale.
12

13 (d) It is essential to the economic health of California for the state to

14 ameliorate the deleterious effects on the state economy and local economies and
15 the California housing market that will result from the continued foreclosures of
16 residential properties in unprecedented numbers by modifying the foreclosure
17 process to require mortgagees, beneficiaries, or authorized agents to contact
18 borrowers and explore options that could avoid foreclosure. These Changes in
19 accessing the state's foreclosure process are essential to ensure that the process
20 does not exacerbate the current crisis by adding more foreclosures to the glut of
21 foreclosed properties already on the market when a foreclosure could have been
22 avoided. Those additional foreclosures will further destabilize the housing market
23 with significant, corresponding deleterious effects on the local and state economy.
24
(e) According to a survey released by the Federal Home Loan Mortgage
25
Corporation (Freddie Mac) on January 31, 2008, 57 percent of the nation’s late-
26
paying borrowers do not know their lenders may offer alternative to help them
27
avoid foreclosure.
28

13
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COMPLAINT
1

2 (f) As reflected in recent government and industry-led efforts to help troubled

3 borrowers, the mortgage foreclosure crisis impacts borrowers not only in
4 nontraditional loans, but also many borrowers in conventional loans.
5

6 (g) This act is necessary to avoid unnecessary foreclosures of residential

7 properties and thereby provide stability to California's statewide and regional
8 economies and housing market by requiring early contact and communications
9 between mortgagees, beneficiaries, or authorized agents and specified borrowers
10 to explore options that could avoid foreclosure and by facilitating the modification
11 or restructuring of loans in appropriate circumstances.
12
35. “Operation Malicious Mortgage’ is a nationwide operation coordinated by the U.S.
13

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
16
victims of such mortgage fraud.
17
36. "Home ownership is the foundation of the American Dream. Dangerous mortgages
18

19
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.
22
37. "Finding ways to avoid preventable foreclosures is a legitimate and important concern
23
of public policy. High rates of delinquency and foreclosure can have substantial
24

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
27
in the interest of the lenders and borrowers. It's in everybody's best interest." Ben
28
Bernanke, Federal Reserve Chairman, May 9, 2008.

14
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COMPLAINT
 38. Plaintiff alleges that Defendants had the duty to prevent such foreclosure, but failed to
1

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,
4
capitalizing the arrearages, and forgiving a portion of the loan. The result would
5
benefit lenders, homeowners, and their communities.” CNN Money, id.
6

7
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
10
investors who would rather see homeowners default and go into foreclosure.” San
11
Diego Union Tribune, id.
12

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
15
help.
16
41. The Gravamen of Plaintiff's complaint is that Defendants violated State laws which
17
were specifically enacted to protect such abusive, deceptive, and unfair conduct by
18

19 Defendants, and that Defendants cannot legally enforce a non-judicial foreclosure.

20 42. Plaintiff is a "debtor" as defined by the Rosenthal Act, California Civil Code
21
1788.2(h).
22
43. Defendants are engaged in the collection of debts from consumers using the mail and
23

24
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
27
Code §1788.2(c).
28

15
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COMPLAINT
 46. The purported debt which Defendants attempted to collect from Plaintiff was a
1

2 "consumer debt" as defined by the Rosenthal Act, California Civil Code §1788.2(f).

4
Defendants Are Not Holders In Due Course Since Plaintiff Was Duped Into An
5
Improper Loan And There Is No Effective Endorsement:
6

7 47. Plaintiff incurred a "debt" as that term is defined by California Civil 17 Code
8
§1788(d), when he obtained a Loan on their Personal Residence.
9
48. The loan is memorialized via a Deed of Trust and Promissory Note, each of which
10

11
contain an attorney fees provision for the lender should they prevail in the enforcement

12 of their contractual rights.

13 49. Plaintiff have no experience beyond basic financial matters.
14
50. Plaintiff were never explained the full terms of their loan, including but not limited
15
to the rate of interest how the interest rate would be calculated, what the payment
16

17 schedule should be, the risks and disadvantages of the loan, the prepay penalties, the

18 maximum amount the loan payment could arise to.

19
51. Certain fees in obtaining the loan, were also not explained to the Plaintiff, including
20
but not limited to "underwriting fees," "MERS registration fee," "appraisal fees,"
21
"broker fees”, “loan tie in fees," etc.
22

23 52. A determination of whether Plaintiff would be able to make the payments as specified

24 in the loan was never truly made.

25
53. Plaintiff's income was never truly verified; and DEFENDANTS knew that plaintiff
26
was unemployed.
27

28

16
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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.
4
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
6

7
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.
10
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
12

13 perform future terms of the Loan.

14 57. Plaintiff was a victim of Fraud in the Factum since the forgoing misrepresentations
15
caused them to obtain the home loan without accurately realizing, the risks, duties, or
16
obligations incurred.
17
58. The Promissory Note contains sufficient space on the note itself for endorsement
18

19 whereby any assignment by allonge is ineffective pursuant to Pribus v. Bush, 118 Cal.

20 App. 3d 1003 (May 12, 1981).

21
59. Defendants are not holders in due course due to Fraud in Factum and ineffective
22
endorsement.
23

24 Defendants’ Lack Standing To Conduct A Non-Judicial Foreclosure

25 Pursuant To California Civil Code 2932.5
26

27 60. Defendants have no standing to enforce a non-judicial foreclosure.

28

17
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COMPLAINT
 61. Defendants are strangers to this transaction, and have no authority to go forward with
1

2 the foreclosure and Trustee's Sale.

3 62. Plaintiff executed a ADJUSTABLE RATE NOTE (hereinafter the “Note”) and a
4
Deed of Trust to BNC.
5
63. BNC is the Lender and only party entitled to enforce the Note and any security
6

7
interest with it.

8 64. DEFENDANTS QUALITY LOANS, BARCLAYS CAPITAL are not listed

9 anywhere in the Deed of Trust or Promissory Note.
10
65. In California, California Civil Code § 2932.5 governs the Power of sale under an
11
assigned mortgage, and provides that the power of sale can only vest in a person
12

13 entitled to money payments: "Where a power to sell real property is given to a

14 mortgagee, or other encumbrancer, in an instrument intended to secure the payment of

15
money, the power is part of the security and vests in any person who by assignment
16
becomes entitled to payment of the money secured by the instrument. The power of
17
sale may be exercised by the assignee if the assignment is duly acknowledged and
18

19 recorded.”

20 66. The San Bernardino County Recorder's Office does not contain any evidence of a
21
recorded assignment from BNC.
22
67. BNC has never assigned their rights under the Note.
23

24
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.
27

28

18
_________________________________________________
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.
4
70. QUALITY LOANS nor BARCLAYS never complied with the Notice of Default
5
provisions of California Civil Code §2924. QUALITY LOANS never complied with
6

7
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
10

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:

17 "The assignment of a mortgage without a transfer of the Indebtedness confers no right,

18
since debt and security are inseparable and the mortgage alone is not a subject of
19
transfer, " Hyde v. Mangan (1891) 88 Cal. 319, 26 P 180, 1891 Cal LEXIS 693;
20
Johnson v, Razy (1919)181 Cal 342, 184 P 657; 1919 Cal LEXIS 358;
21

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

27
246 P2d 23, 1952 Cal. LEXIS 248.

28

19
_________________________________________________
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

13 77. California Commercial Code § 3301 limits a negotiable instrument's enforcement to

14 the following:
15
"Person entitled. to enforce" an Instrument means (a) the holder of the instrument,
16
(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.
27

28

20
_________________________________________________
COMPLAINT
 80. None of the Defendants are entitled to enforce the instrument pursuant to section
1

2 3309 or subdivision (d) of Section 3418.

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

14 negotiable prior to the sale of the Subject Property.

15
84. That by virtue of the method and manner of Defendants carrying out Civil Code
16
section 2924 et seq., the foreclosure of the Subject Property is void ab initio as a matter
17
of law.
18

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
_________________________________________________
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

3 nominated a successive trustee.

4
86. While MERS remain on title as a “nominee” for the TD and Note both are sold on
5
several occasions afterward and ultimately bundled as a security and sold to a final
6

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”

20 attempting to foreclose on those Mortgages.

21

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
_________________________________________________
COMPLAINT
 89. Defendants’ Pooling and Servicing Agreement (hereinafter “PSA”) contains a duty to
1

2 maximize net present value to its investors and related parties.

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

13 modification or plan is consistent with its contractual or other authority.

14 93. Plaintiff’s loan is presently in an uncertain state.

15
94. Plaintiff is willing, able, and ready to execute a modification of their loan on a
16
reasonable basis
17

18 (a) New Loan Amount: $150,000.00

19 (b) New Interest Rate: 5%
20 (c) New Loan Length: 30 years
21 (d) New Payment: $ 805.23
22
95. The present fair market value of the property is $159500.00.
23

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

28

23
_________________________________________________
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

3 foreclosure on the property, maintaining, rehabilitating, insuring, and reselling the

4
property to a third party. Freddie Mac places this loss higher at $58,759.00.
5
98. Pursuant to California Civil Code §2823.6, Defendants are now contractually bound
6

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

13 99. Alternatively, Plaintiff alleges that tender, if any, is excused by obstruction or

14 prevention or imposition of unwarranted conditions by the person or corporate entity to

15
whom it was to be made.
16
100. Alternatively, Plaintiff alleges that obstruction or imposition of unwarranted
17
conditions by defendants occurred when defendants evaded the Plaintiff’ attempts to
18

19 provide tender as specified and encouraged by defendants’ pooling agreement,

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

2 conditions by defendants occurred when defendants manifested to the Plaintiff that

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.

14 257, 511 A.2d 535 (1986)]

15
102. Alternatively, Plaintiff further alleges that obstruction or imposition of unwarranted
16
conditions by defendants occurred when defendants’ objection for want of actual
17
tender of money is waived by defendants’ refusal to receive the money if produced.
18

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

5 103. Plaintiff realleges and incorporate by reference the allegations of paragraphs 1

6 through 109, inclusive, as though set forth at length herein again.
7 104. Beginning in April 11, 2007 and continuing to the present time, Defendants
8
committed acts of unfair competition as defined by Business and Professions Code §
9
17200, by engaging in the following practices:
10
105. These acts and practices, as described in the previous paragraphs, violate Business
11
and Professions Code § 17200 because their policies and practices described above
12
violate all the statutes as previously listed and California Civil Code § 1709, and
13
consequently, constitute and unlawful business act of practice within the meaning of
14
Business and Professions Code § 17200.
15

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,

21 including, or violates the policy or spirit of such law or otherwise significantly

22
threatens or harms competition. Defendants’ practices described above are likely to
23
mislead the general public, and therefore, constitute a fraudulent business act of
24

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

8 THIRD CAUSE OF ACTION

9 BREACH OF COVENANT OF GOOD FAITH AND FAIR DEALING
10 (Only Against BLUE LEAF AND BNC)
11

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

18 activities interfering with or contrary to the rights of Plaintiff.

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

24 cited the lender as BNC.

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

2 Note” to BNC or its agents.

3 115. As a consequence and proximate result, Plaintiff has been damaged in a sum to be
4
proven at trial.
5

6 FOURTH CAUSE OF ACTION

7 INJUNCTIVE RELIEF

8 (Against all Defendants)

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

17 to receive payment under this Note is called the “Note Holder.”

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

24 assigns; MERS is the beneficiary under this Security Instrument.

25
122. Additionally, based upon information and belief, Mortgage Electronic Registration
26
Systems is not qualified to do business in the state of California and therefore, would not
27

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

2 endorsements thereon to Plaintiff or this Honorable Court so that it may determine

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

14 date a Notice of Trustee’s sale may be filed and served.

15
FIFTH CAUSE OF ACTION
16
VIOLATION OF CIVIL CODE §1572
17
(As to All Defendants)
18

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

24 Loan in reliance on the integrity of Defendants and/or Defendants’ predecessors.

128. Plaintiff is an unsophisticated customer whose reliance upon Defendants
25
and/or Defendants’ predecessors was reasonable and consistent with the
26
Congressional intent and purpose of California Civil Code § 1572 enacted in 1872 and
27
designed to assist and protect consumers similarly situated as Plaintiff in this action.
28

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.

8 141. It further states that:

9 That by reason thereof of the present Beneficiary under such deed of
10
Trust has executed and delivered to said duly appointed Trustee a
written Declaration of Default and Demand for Sale and has
11 deposited with said duly appointed Trustee such Deed of Trust and
all documents evidencing obligations secured thereby and has
12
declared and does hereby declared all sums secured thereby
13 immediately due and payable and has elected and does hereby elect
to cause the trust property to be sold to satisfy the obligations served
14 thereby.
15
142. This representation was made by these defendants in order to induce reliance by
16

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

24 Beneficiary and entitled to the payments.

25
B. At the time BNC made the representations they knew they were false and were made for
26
the sole purpose of inducing reliance.
27

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

3 make commissions, kick-backs, illegal undisclosed yield spread premiums, and

4
undisclosed profits by the sale of any instruments arising out of the transaction and to
5
make loans to borrowers that they could not afford to repay given their stated financial
6

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

13 executed a foreclosure, which was completed, permanently affecting Plaintiff right,

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

8 characteristics: without to utilize an adequate analysis of the Plaintiff ability to repay

9 the debt at the fully-indexed rate; approving Plaintiff without considering appropriate
10
documentation and/or verification of their income; including substantial prepayment
11
penalties and/or prepayment penalties that extend beyond the initial interest rate
12

13 adjustment period; providing Plaintiff with inadequate and/or confusing information

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

20 arrangements with loan-to-value ratios approaching or exceeding 100 percent of the

21
value of the collateral;" and making Plaintiff a mortgage loan without adequately
22
considering the Plaintiff’s ability to repay the mortgage according to its terms.
23

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

20 their damage and injury.

21
160. Plaintiff has relied on the representations of Defendant, and each of them, and
22
because of this reliance have made various moves to avoid foreclosure all to no avail,
23

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

19 they had no right to do so.

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

2 such conduct will not be repeated.

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

8 malicious so as to warrant the imposition of exemplary damages, and that by virtue of

9 Defendants conduct as set forth herein Plaintiff is entitled to exemplary damages.
10

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

22 the commencement of the foreclosure process.

23 173. As to these issues, Plaintiff is required to seek this relief.

24
174. Plaintiff further alleges that a declaration of rights and duties of the parties herein are
25
essential to determine the actual status and validity of the loan, deed of trust,
26

27
nominated beneficiaries, actual beneficiaries, loan servicers, trustees instituting

28 foreclosure proceedings and related matter.

38
_________________________________________________
COMPLAINT
1

2 EIGHTH CAUSE OF ACTION

3 FOR INTENTIONAL MISREPRESENTATION
(Against all Defendants)
4

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

11 Defendants was the Beneficiary and entitled to the payments.

12 [B] At the time Defendants made the representations they knew they were false and
13
were made for the sole purpose of inducing reliance and confusing Plaintiff.
14

15

16 NINTH CAUSE OF ACTION

17 TO SET ASIDE A DEFECTIVE AND WRONGFUL FORECLOSURE
18 (Against all Defendants)

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

24 Deed of Trust prior to commencing a foreclosure:

25 Where a power to sell real property is given to a mortgagee, or other

26
encumbrancer, in an instrument intended to secure the payment of money, the
27
power is part of the security and vests in any person who by assignment becomes
28

39
_________________________________________________
COMPLAINT
 entitled to payment of the money secured by the instrument. The power of sale
1

2 may be exercised by the assignee if the assignment is duly acknowledged and

3 recorded. (Emphasis added)

4
179. Defendants drafted the Deed of Trust, Plaintiff had no opportunity to negotiate
5
the terms of the instrument.
6

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.

14 Invalid Declaration on Notice of Default and/or Notice of Trustee’s Sale

15
183. The purpose of permitting a declaration under penalty of perjury, in lieu of a sworn
16
statement, is to help ensure that declarations contain a truthful factual representation
17
and are made in good faith. (In re Marriage of Reese & Guy, 73 Cal. App. 4th 1214, 87
18

19 Cal. Rptr. 2d 339 (4th Dist. 1999).

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

25 to be supported, evidenced, established, or proved by the sworn statement,

26 declaration, verification, certificate, oath, or affidavit, in writing of the person making
27
the same, such matter may with like force and effect be supported, evidenced,
28

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

8 be in substantially the following form:

9 (a) If executed within this state:
10
“I certify (or declare) under penalty of perjury that the foregoing is true and correct”:
11
_____________________ _______________________
12
(Date and Place) (Signature)
13

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

20 No Personal Knowledge of Declarant

21
According to Giles v. Friendly Finance Co. of Biloxi, Inc., 199 So. 2nd 265 (Miss.
22
1967), “an affidavit on behalf of a corporation must show that it was made by an
23

24
authorized officer or agent, and the officer him or herself must swear to the facts.”

25 Furthermore, in Giles v. County Dep’t of Public Welfare of Marion County (Ind.App. 1

26 Dist.1991) 579 N.E.2d 653, 654-655 states in pertinent part, “a person who verified a
27
pleading to have personal knowledge or reasonable cause to believe the existence of the
28

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

13 184. Furthermore, according to California Penal Code § 115 in pertinent part:

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

19 (b) Each instrument which is procured or offered to be filed, registered, or recorded

20 in violation of subdivision (a) shall constitute a separate violation of this section.

21
In addition, California Evidence Code § 669 states in pertinent part:
22
(a) The failure of a person to exercise due care is presumed if:
23

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

3 the Plaintiff’s SUBJECT PROPERTY, thereby, slandering Plaintiff’s title thereto.

4
186. Furthermore, The California Foreclosure Prevention Act, states the following:
5
The California Foreclosure Prevention Action became effective June 15, 2009. This
6

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

13 at the time the loan became delinquent;

14 3. A notice of default has been recorded on the property; and

15
4. The loan is secured by a first lien on residential property that is located in
16
California.
17
187. In our case, Plantiff, TIMOTHY ARMSTRONG’S property is his principal place
18

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.

25 189. The aforementioned Instrument directly impairs Plaintiff’s right to possession

26 and ownership of the Subject Property.
27
190. Furthermore, the aforementioned acts of Defendants, and each of them, were
28

46
_________________________________________________
COMPLAINT
 motivated by oppression, fraud, malice in that Defendants, and each of them, by their
1

2 respective acts, omissions, nonfeasance, misfeasance and/or malfeasance executed an

3 invalid foreclosure sale of the Plaintiff’s SUBJECT PROPERTY, in order to deny Plaintiff
4
of his rights of possession and ownership, whereupon, the Foreclosure was defective as
5
such the Property must be restored to Plaintiff or Plaintiff is entitled to the value of thereof.
6

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:
10
1. For exemplary and punitive damages;
11
2. Actual Economic and Non-Economic Damages;
12

13 3. Costs and reasonable attorney’s fees pursuant to California Civil Code §1717,

14 §1788.30(b), §1788.30(c);
15
4. For a declaration of the rights of the parties relative to Plaintiff’s Home, including
16
a declaration that Defendants have no enforceable lien against Plaintiff’s Home;
17
5. For a preliminary injunction and permanent injunction enjoining all Defendants,
18

19 their agents, assigns, and all person acting under, for, or in concert with them, from

20 foreclosing on Plaintiff’s Home or from conducting at trustee’s sale or causing a trustee’s

21
sale to be conducted relative to Plaintiff’s Home.
22
6. Cancellation of the sale and restitution of the home to the Plaintiff; and
23

24
7. For damages as provided by statute;

25 8. For an Order enjoining Defendants from continuing to violate the statutes alleged
26 herein;
27

28

47
_________________________________________________
COMPLAINT
 9. For an Order, requiring Defendant to reinstate Plaintiff on title to his Property, and
1

2 or a restraining order preventing Defendants and his, hers, or its agents, employees,

3 officers, attorneys, and representatives from engaging in or performing any of the

4
following acts: (i) offering, or advertising this property for sale and (ii) attempting to
5
transfer title to this property and or (iii) holding any auction therefore;
6

7
10. For such other and further relief as the court may deem just and proper.

8
Dated: August 5, 2009
9
LAW OFFICES OF TIMOTHY MCCANDLESS ESQ.
10

11 ______________________________________________
Timothy L. McCandless, Esq.,
12 Attorney for Plaintiff,
TIMOTHY A. ARMSTRONG
13
ROSEMARY ARMSTRONG
14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

48
_________________________________________________
COMPLAINT
1
VERIFICATION
2

3 I, TIMOTHY L. MCCANDLESS, am an attorney at law admitted to practice before all courts of

4 the State of California and have my office in San Bernardino County, California, and am the
5
attorney for the Plaintiff in this action, that all of the officers of the Plaintiff are unable to make the
6
verification because they are absent from said County and for that reason affiant makes this
7
verification on the Plaintiff’s behalf; that I have read the foregoing document and know its
8

9 contents. I am informed and believe and on that ground allege that matters stated herein are true.

10 Executed August 5, 2009, at Victorville, Californa.

11
I declare under penalty of perjury that under the laws of the State of California that the foregoing
12
is true and correct.
13

14
DATED: August 5, 2009
15
___________________________________
16
TIMOTHY L. MCCANDLESS, ESQ
17

18

19

20

21

22

23

24

25

26

27

28

49
_________________________________________________
COMPLAINT