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SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN FRANCISCO
Document Scanning Lead Sheet
Sep-12-2013 03:59 pm
Case Number: CGC-10-503332
Filing Date: Sep-12-2013 03:52 pm
Filed by: CAROL BALISTRERI
Juke Box: 001 Image: 04199874
MOTION (CIVIL GENERIC)
COMMONWEALTH LAND TITLE INSURANCE COMPANY VS. FEDEX OFFICE
AND PRINT SERVICES, INC et al
001004199874
Instructions:
Please place this sheet on top of the document to be scanned.By.Fax._ Gali
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David A. Clinton, Esq. (Bar No. 150107)
Todd M. Austin, Esq. (Bar No. 232355)
Matthew J. Warren, Esq. (Bar No. 264514)
CLINTON & CLINTON
100 Oceangate, 14th Floor
Long Beach, California 90802
Ph.: (562) 216-5000
Fax: (562) 216-5001
Attorneys for Defendant,
Le
F I LE D
Superior:
inty of San Francona
SEP 1 2 2043
FEDEX OFFICE AND PRINT SERVICES, INC
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF SAN FRANCISCO
COMMONWEALTH LAND TITLE
INSURANCE COMPANY,
Plaintiff,
ve
)
)
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FEDEX OFFICE AND PRINT SERVICES, )
INC.; WINSTON LUM; BRUNO )
AESCHBACHER; STEPHEN )
FELLMANN;KAUSHAL NIROULA; JAY )
CHANDRAKANT SHAH; ELVIA )
PALIMINO; MORAD AFRAIMI; )
MELVIN LEE EMERICH; MARTINI & _ )
CHNOOGLE; GRACHELLE )
LANGUBAN, and DOES 1-25, )
)
)
)
)
)
)
)
)
)
)
)
)
)
)
Defendants.
SHIRLEY S. HWANG,
Plaintiff,
FEDEX OFFICE AND PRINT SERVICES,
INC., etc., et al.,
Defendants.
F.\C & C\Defendants\750 - FedEx\11012-
Hwang\Pleading\MotionLeave01.doc
LEAD CASE NO. CGC-10-503332
(Consolidated for all purposes with
CGC-11-512102)
DEFENDANT, FEDEX OFFICE AND
PRINT SERVICES, INC.’S NOTICE OF
MOTION AND MOTION FOR LEAVE
FOR DEFENDANT, FEDEX OFFICE
AND PRINT SERVICES, INC. TO FILE
CROSS-COMPLAINT AGAINST
COASTAL CALIFORNIA FUNDING,
DEWITTE MORTGAGE, AND ROES 1-
25, OR ALTERNATIVELY, FOR AN
ORDER SHORTENING TIME;
DECLARATION OF MATTHEW J.
WARREN, ESQ.; [PROPOSED] CROSS-
COMPLAINT; AND [PROPOSED]
ORDER
DATE: SEPTEMBER 23, 2013
TIME: 9:30 A.M.
DEPT.: “501”
Date Filed: | September 8, 2010
Trial Date: = January 27, 2014
Unlimited Jurisdiction
FedEx Office’s Motion for Leave to
File Cross-ComplaintCem INAH Bh WN
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PLEASE TAKE NOTICE THAT on September 23, 2013! at 9:30 am., or as soon
thereafter as the matter may be heard in Department “501” of the above-entitled Court, located at!
400 McAllister Street, San Francisco, California 94102-4514, Defendant, FEDEX OFFICE AND]
PRINT SERVICES, INC. (hereinafter “FedEx Office”) will and hereby does move this Court for
an order granting FedEx Office leave to file a cross-complaint against COASTAL
CALIFORNIA FUNDING GROUP, DEWITTE MORTGAGE, and ROES 1-25, pursuant to
California Code of Civil Procedure Section 428.50 (c). A copy of Defendant’s proposed Cross-
Complaint is attached as Exhibit “A” to the Declaration of Matthew J. Warren, Esq.
Good cause supports the instant Application. Although the first Complaint in this matter
was filed in September 2010, discovery in this matter was stayed until January 31, 2013 during
the pendency of the parallel criminal action. Once the stay was lifted, the parties exchanged
extensive written discovery. Such discovery prompted FedEx Office to subpoena business
records from Coastal California Funding Group, which produced nearly 850 pages in July 2013.
Those records reveal that Coastal California Funding Group engaged in negligent and
undisciplined loan approval and lending practices, which caused and contributed to the damages
allegedly sustained by Plaintiffs, COMMONWEALTH LAND TITLE COMPANY and
SHIRLEY HWANG (hereinafter collectively referred to as “Plaintiffs”) Accordingly, this
Application will be made on the grounds that the proposed Cross-Complaint is authorized by the
provisions of California Code of Civil Procedure Section 428.10(b) in that the proposed Cross-
Complaint arise out of the same transaction, occurrence, or series of transactions or occurrences
as the causes brought by Plaintiffs. Because the facts at issue in the proposed Cross-Complaint
are identical to those facts in the underlying consolidated Complaints, it is in the interests of
justice to GRANT FedEx Office leave to file the Cross-Complaint to avoid multiplicity of suits,
unnecessary duplication of legal fees and costs, and potentially inconsistent results.
* On September 12, 2013, the Court granted Defendant, Fedix Office's
Application to Shorten Time on Hearing of Motion for Leave, and specially set
the hearing of the instant motion for September 23, 2013 at 9:30 a.m.
FAC & C\Defendants\750 - FedEx\11\012- 2
Hwang\Pleading\MotionLeave01 doc FedEx Office's Motion for Leave to
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This Application is based on this Notice, the Memorandum of Points and Authorities, the
Declaration of Matthew J. Warren, Esq., all of which are filed and served concurrently herewith,
the pleadings and papers on file herein, all matters of which the Court may properly take judicial
notice, and such evidence and arguments as may be presented at the time of hearing of this
motion.
DATED: September 12, 2013 CLINTON & CLINTON
By: , -
DAVID A. CLINTON, ESQ. ~~
TODD M. AUSTIN, ESQ.
MATTHEW J. WARREN, ESQ.
Attorneys for Defendant,
FEDEX OFFICE & PRINT
SERVICES, INC.
FAC & C\Defendants\750 - FedEx\11\012- 3
Hwang\Pleading\MotionLeave01.doc FedEx Office's Motion for Leave to
File Cross-ComplaintCoN AnH Bw HN
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MEMORANDUM OF POINTS AND AUTHORITIES
L STATEMENT OF FACTS:
This case arises out of a highly publicized real estate fraud, which includes a murder,
fleeing suspects, millions of dollars, and a protracted criminal trial. In early 2009, several
criminal actors, including Kaushal Niroula, Jay Shah, and Winston Lum formed a scheme to
deprive Plaintiff, Shirley Hwang (“Hwang”) of three investment properties in the Rincon Hill
development located at 425 First Street, San Francisco, California 94105. These individuals
drafted a bogus grant deed, purporting to transfer Hwang’s three condominium units to Lum. Thd
grant deeds were then allegedly notarized by Grachelle Languban who Plaintiffs aver was
working in the course and scope of her employment at FedEx Office and Print Services (“FedEx
Office”). The grant deeds were then recorded.
Thereafter, the criminal conspirators applied for loans in the amount of $2,500,000.00
using the condominiums, which were then titled to Lum, as collateral. The loans were approved
and the funds were transferred to Lum and his cohorts, but, not surprisingly, the money was
never repaid. The lender foreclosed on the property. Later, when evidence of the fraud came to
light, the title insurance company, Commonwealth Land Title Company (“Commonwealth”),
reimbursed the lender the amount of the loan.
Shah, Lum, and Languban were arrested for participating in the criminal conspiracy.
(Niroula was already in custody of the Riverside Sheriff for murder of an art dealer in Palm
Springs, California.) The preliminary hearing took place from November 16, 2010 through
February 10, 2011. At some point during the preliminary trial, Languban was discovered to have
fled to The Philippines, and she is not expected to return voluntarily or to be extradited. The
criminal trial proceeded against Shah, Lum, and a third criminal actor from April 2012 through
June 2013. Shah and Lum were found guilty of multiple counts in September 2012, and both are
believed to have been sentenced in or around January 13, 2013.
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FAC & C\Defendants\750 - FedEx\11\012- 4
Hwang\Pleading\MotionLeave01.doc FedEx Office's Motion for Leave to
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On or about September 8, 2010, Commonwealth filed suit against the criminal actors and
FedEx Office. As to FedEx Office, Commonwealth alleges that FedEx Office is liable only for
the conduct of its employee, Languban, under the doctrine of respondeat superior. Thereafter,
because FedEx Office’s potential liability rested exclusively on the conduct of others, and
because those individuals were being prosecuted for the underlying conduct in both the civil and
criminal causes and would not cooperate in the civil case until the criminal matter was resolved,
FedEx Office filed a Motion to Stay the civil action during the pendency of the criminal case in
November 2010. On January 5, 2011, the Court granted the Motion and stayed all discovery in
the civil action pending resolution of the parallel criminal action.
On June 29, 2011, Hwang filed her own Complaint against the criminal actors as well as
FedEx Office. Hwang’s Complaint asserts causes of action against FedEx Office of negligence
and slander of title, and both are premised on the conduct of Languban and the doctrine of
respondeat superior. Because both Commonwealth’s lawsuit and Hwang’s lawsuit stem from the
same real estate transaction and present the same issues of law and fact, FedEx Office moved to
consolidate both-actions. On or about October 27, 2011, the Motion to Consolidate was granted.
‘The stay on discovery continued as the criminal matter progressed. In December 14,
2012, shortly after Shah and Lum were found guilty, Hwang filed a Motion to Lift the Stay on
Discovery. The Motion was granted on January 31, 2013. Pursuant to the Order, the parties were
authorized to begin written discovery and subpoena business records immediately and to take
depositions beginning on May 1, 2013.
Thereafter, Commonwealth, Hwang and FedEx Office exchanged extensive written
discovery. Some of the discovery responses were somewhat delayed because the parties sought a’
protective order due to the sensitivity of some of the information and the circumstances of the
case. However, based on the information obtained through the discovery responses, FedEx
Office subpoenaed the business records of Coastal California Funding Group on or about June 5,
2013. Coastal California Funding Group was the mortgage broker from whom the criminal actors
applied for a loan against the properties at issue.
Vii
FAC & C\Defendants\750 - FedEx\11\012- 5
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On or about July 11, 2013, counsel for FedEx office received nearly 850 pages of
documents from Coastal California Funding Group in response to the subpoena. Examination of
the records produced by Coastal California Funding Group reveals that said company should be
added as a party to this action. Coastal California Funding Group, which received a significant
commission on the loan that was eventually funded by lender, DeWitte Mortgage, engaged in the|
type of loose and undisciplined loan approval process that caused the most recent housing bubble|
to burst at, coincidentally, the same time as the loan in this matter was approved.
According to a review of the records produced, Coastal California Funding Group
apparently performed no income verification on Lum to confirm that he had the means to repay
the seven-figure loan within the thirteen month period proposed. Further, there was no
investigation into the validity of the Lum’s claim to the properties, despite the fact that the
properties were transferred to him just days before he applied for a $2,500,000.00 loan using the
same properties as collateral. Moreover, Lum’s bank statements, which previously held a
nominal amount of money, received a huge influx of money just before Lum applied for the
loans. These and other tell-tale signs would have suggested to the reasonable lender that the loan
application was ripe with fraud. By turning a blind eye to the suspicious nature of the loan
application, by failing to conduct any reasonable investigation into Lum, Hwang and/or the
properties at issue, and by placing its commission over any harm its approval would cause to
third parties, Coastal California Funding Group was complicit in the fraudulent activity and
should now be liable for its conduct.
Accordingly, FedEx Office respectfully requests that this Court grant its Motion for
Leave to File said Cross-Complaint, and that the Proposed Cross-Complaint, attached as Exhibit
“A” to the Declaration of Matthew J. Warren, Esq. be deemed filed so that service upon the
appropriate parties can be promptly effectuated.
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FAC & C\Defendants\750 - FedEx\11\012- 6
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I. ARGUMENT:
A. THE PROPOSED CROSS-COMPLAINT ARISES OUT OF THE SAME
TRANSACTION, OCCURRENCE, AND FACTS AS THOSE IN THE
UNDERLYING COMPLAINTS, AND THEREFORE, THE CROSS-
COMPLAINT IS PROPER.
Code of Civil Procedure (CCP) Section 428.10(b) states, in pertinent part as follows:
A party against whom a cause of action has been asserted in a
complaint...may file a cross-complaint setting forth...(b) any cause
of action he has against a person alleged to be liable thereon,
whether or not such person is already a party to the action, if the
cause of action asserted in his cross-complaint (1) arises out of the
same transaction, occurrence, or series of transactions or
occurrences as the cause brought against him. (Emphasis added).
As demonstrated by the Introduction, the Proposed Cross-Complaint arises out of the
same transaction, occurrence, or series of transactions or occurrences as those in the Complaints
against FedEx Office. Plaintiffs’ operative Complaints contend that they were harmed by the
conduct of several criminal actors, who deprived Hwang of her properties and then used such
properties to fraudulently obtain $2,200,000.00 in loans against the property. The Proposed
Cross-Complaint is premised on the same set of facts, and, more specifically, targets those who
exercised poor judgment and engaged in undisciplined loan approval and lending practices,
which allowed the criminal actors to further their conspiracy. In this regard, the Cross-Complaint|
is entirely about the same set of facts as those in the underlying Complaints.
However, once the trial date has been set by the Court, as it has in the instant matter,
leave of court is necessary to file a cross-complaint. Code of Civil Procedure section 428.50(c).
Trial in this matter is presently scheduled for January 27, 2014, and as such, leave is required for
FedEx Office to file the proposed Cross-Complaint.
As discussed in greater detail, it is in the “interest of justice” to grant leave to file FedEx
Office’s Cross-Complaint.
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FAC & C\Defendants\750 - FedEx\11\012- 7
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B. ITIS IN THE INTEREST OF JUSTICE TO GRANT FEDEX OFFICE LEAVE)
TO FILE JTS CROSS-COMPL.,
Code of Civil Procedure section 428.50(c) discusses the standard by which a Motion for
Leave to file a Cross-Complaint is to be weighed: “Leave may be granted in the interest of
justice at any time during the course of the action.”
“The purpose of allowing a cross-complaint is to enable all matters in dispute between
the parties relating to or depending upon the contract, transaction or subject matter upon which
the action is brought or affecting the property to which it relates, to be determined by a single
action and by a single judgment. In other words, to avoid a multiplicity of suits and thereby save
vexation and expense.” Bracey v. Gray (1944) 65 Cal.App.2d 282, 285-286. To avoid a
multiplicity of suits and potentially inconsistent results, justice requires that leave be granted to
FedEx Office to file a Cross-Complaint against Coastal California Funding Group and DeWitte
Mortgage.
In their operative and respective Complaints, Commonwealth and Hwang assert a number,
of actions against the criminal actors, including Conversion, Trespass, and Deceit. All of those
causes of action are based on the criminal conspiracy to deprive Hwang of her interest in her
three real properties, and then use those properties as collateral in obtaining a $2,500,000.00
loan. The criminal actors applied for that loan through Coastal California Funding Group, which,
because of loose and undisciplined lending practices, approved the loan. By engaging in the type
of reckless lending practices that contributed to the “Great Recession,” and by overlooking the
obvious signs of fraud associated with Lum’s loan application so as not to risk a six-figure
commission, Coastal California Funding Group was complicit in the criminal conspiracy at the
heart of Plaintiffs’ Complaints. In this regard, the facts at issue in the Proposed Cross-Complaint
are the same identical facts at issue in the underlying Complaints.
As such, to avoid the multiplicity of actions, undue consumption of resources, and
possible inconsistent outcomes, it is in the interest of justice that FedEx Office’s Motion for
Leave to File Cross-Complaint be granted and that the proposed Cross-Complaint, attached to
the Declaration of Matthew J. Warren, Esq. as Exhibit “A” be deemed filed.
FAC & C\Defendants\750 - FedEx\11\012- 8
Hwang\Pleading\MotionLeave01.doc FedEx Office's Motion for Leave to
File Cross-Complaint0 ON DH BRB WN
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C. THERE HAS BEEN NO UNREASONABLE DELAY IN FILING THE
INSTANT MOTION, AND DENIAL OF THE SUBJECT MOTION WOULD
BE BURDENSOME TO BOTH THE COURT AND FEDEX OFFICE.
“A defendant may file a cross-complaint at time of answering. Thereafter, it may only be
done by permission of the court.” Nels E. Nelson, Inc. v. Tarman (1958) 163 Cal.App.2d 714,
730. However, the Courts have adopted a liberal policy of granting leave to file Cross-
Complaints. “A motion to file a cross-complaint at any time during the course of the action must
be granted unless bad faith of the moving party is demonstrated.” Silver Organizations Ltd. v.
Frank (1990) 217 Cal.App.3d 94, 99.
It cannot be said that FedEx Office delayed in filing the instant motion. The stay on all
discovery in this matter was put in place on January 5, 2011, less than four months after
Commonwealth filed its lawsuit and before any discovery had been conducted. The January 27,
2014 trial date was set on November 21, 2012, which was at a time before the stay on all
discovery was lifted. Indeed, the stay on discovery was not lifted until more than two months
after the trial date was already set. In sum, the parties were prevented by the stay from
conducting any discovery for more than two years, during which time the parallel criminal action
was concluded.
FedEx Office did not lear of the need to file this Motion for Leave to File its Cross-
Complaint until it engaged in written discovery and subpoenaed records. It is the subpoenaed
business records obtained from Coastal California Funding Group in July 2013, which revealed
the need for the instant Motion. However, the need to subpoena those records only became
apparent upon receiving Plaintiffs’ discovery responses, which were not received until the
several months following the January 31, 2013 lifting of the discovery stay. While this Motion is
made some three years after the case was filed, discovery was stayed for more than two years of
those three years, and FedEx Office brings this matter before the Court at the first opportunity.
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It should be stressed that if FedEx Office’s motion is denied, FedEx Office will be forced
to file a separate lawsuit against the Cross-Defendant. This would result in FedEx Office having
to pay legal fees and costs for two separate cases, both of which stem from a common nucleus of|
operative facts. The second lawsuit, which would consist of legal and factual issues similar to
and duplicative of those raised in Commonwealth and Hwang’s consolidated Complaints, would
be yet another lawsuit that the Court system would have to bear. This burden would necessarily
be avoided if the instant motion is granted and FedEx Office is allowed to file its Cross-
Complaint in this matter against Coastal California Funding Group and DeWitte Mortgage.
Ili. CONCLUSION
Based upon the foregoing, FedEx Office respectfully requests that the Court, in the
interest of justice, GRANT the instant Motion for Leave to File a Cross-Complaint against
Coastal California Funding Group, DeWitte Mortgage, and Roes 1 through 25, and that the
proposed Cross-Complaint attached to the Declaration of Matthew J. Warren, Esq. as Exhibit
“A” be filed immediately so that service upon the appropriate parties can be promptly
effectuated.
DATED: September 12, 2013 CLINTON,
LA 2o4g4
- CLINTON, ESQ.
By:
TODDLM. AUSTIN, ESQ.
Attomeys for Defendant,
FEDEX OFFICE & PRINT
SERVICES, INC.
FAC & C\Defendants\750 - FedEx\111012- .
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DECLARATION OF MATTHEW J. WARREN, ESQ.
I, Matthew J. Warren, Esq. declare that:
1. lam an attorney licensed to practice law before all of the courts of the State of
California, and am an associate at the law firm of CLINTON & CLINTON, attorneys for
Defendant, FEDEX OFFICE AND PRINT SERVICES, INC. (hereinafter, “FedEx Office”). 1
am assigned to work on my firm’s file pertaining to this alleged incident, and if called as a
witness I could and would testify competently to the following facts and circumstances:
2. On or about September 8, 2010, Plaintiff, Commonwealth Land Title Company
(hereinafter “Commonwealth”) filed suit against the FedEx Office and several additional
individuals, including Kashual Niroula, Jay Shah, Winston Lum, and Grachelle Languban. As to
FedEx Office, Commonwealth alleged that FedEx Office is liable only for the conduct of its
employee, Languban, under the doctrine of respondeat superior.
3. At that time, Shah, Lum, and Languban were in custody and being prosecuted for
their involvement in a criminal conspiracy to deprive Plaintiff, Shirley Hwang (hereinafter
“Hwang”) of her real property and to defraud lenders of several millions of dollars.
4. In November 2010, FedEx Office filed a Motion to Stay All Discovery because
FedEx Office’s potential liability rested exclusively on the conduct of others and because those
individuals were being prosecuted for the underlying conduct in both the civil and criminal
causes and would not cooperate in the civil case until the criminal matter was resolved. On
January 5, 2011, the Court granted the Motion and stayed all discovery in the civil action
pending resolution of the parallel criminal action.
5. On December 14, 2012, shortly after Shah and Lum were found guilty, Hwang
filed a Motion to Lift the Stay on Discovery. The Motion was granted on January 31, 2013.
Pursuant to the Order, the parties were authorized to begin written discovery and subpoena
business records immediately and to take depositions beginning on May 1, 2013.
6. No discovery was conducted prior to the stay being lifted on January 31, 2013.
Hf
FAC & C\Defendants\750 - FedEx\11\012- 1
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7. Thereafter, Commonwealth, Hwang and FedEx Office exchanged extensive
written discovery. Some of the discovery responses were somewhat delayed because the parties
sought a protective order due to the sensitivity of some of the information and the circumstances
of the case.
8. Based on the information obtained through the discovery responses, FedEx Office!
subpoenaed the business records of Coastal California Funding Group on or about June 5, 2013.
Coastal California Funding Group was the mortgage broker from whom the criminal actors
applied for a loan against the properties at issue. ,
9. On or about July 11, 2013, my office received nearly 850 pages of documents
from Coastal California Funding Group in response to the subpoena. Examination of the records
produced by Coastal California Funding Group revealed that a Cross-Complaint against Coastal
California Funding Group would be appropriate.
10. There has been no appreciable or prejudicial delay in filing the instant motion.
The motion is made shortly after the conclusion of the review of approximately 850 pages of
loan applications and related documents. Moreover, these records were subpoenaed in response
to information gained from Hwang and Commonwealth in discovery, which was previously
stayed until January 2013.
11. If the instant motion is not granted, FedEx Office would be forced to file a
separate action against Coastal Califomia Funding Group and DeWitte Mortgage, which would
result in additional legal fees and costs for mostly duplicative work as such an action shares the
same legal issues and facts as those presented in Commonwealth and Hwang’s consolidated
Complaints.
12. Attached hereto as Exhibit “A” is the true and correct copy of FedEx Office’s
[Proposed] Cross-Complaint against Coastal California Funding Group, DeWitte Mortgage, and
Roes 1] through 25,
Aff
fil
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FAC & C\Defendants\750 - FedEx\11\012- 12
Hwang\Pleading\MotionLeave01.doc FedEx Office's Motion for Leave to
File Cross-ComplaintCoO me RW DAH BR WN
I declare under the penalty of perjury under the laws of the State of California that the
foregoing is true and correct.
Executed on September 10, 2013, at Long Beach, California.
(LA
MATTHEW/. WARREN, Declarant
FAC & C\Defendants\750 - FedEx\11\012- 13
Hwang}Pieading\MotionLeaved1.doc FedEx Office's Motion for Leave to
File Cross-ComplaintExhibit “A”© °
SUM-110
(CITACION JUDICIAL-CONTRADEMANDA)
NOTICE TO CROSS-DEFENDANT: COASTAL CALIFORNIA FUNDING
(AVISO AL CONTRA-DEMANDADO): GROUP, INC.,DEWITTE MORTGAGE,
and ROES 1-25, Inclusive,
YOU ARE BEING SUED BY CROSS-COMPLAINANT:
(LO ESTA DEMANDANDO EL CONTRADEMANDANTE):
FEDEX OFFICE AND PRINT SERVICES, INC.
You have 30 CALENDAR DAYS after this summons and legal papers are served on you to file a written response at this court and have a
Copy served on the cross-complainant. A letter or phone call will not protect you. Your written response must be in proper legal form if you
want the court to hear your case, There may be a court form that you can use for your response. You can find these court forms and more
information at the California Courts Online Self-Help Center (www.courtinfo.ca.gov/selfhelp), your county law library, or the courthouse
nearest you, If you cannot pay the filing fee, ask the court clerk for a fee waiver form. Ifyou do not fife your response on time, you may
lose the case by default, and your wages, money, and property may be taken without further warning from the court.
There are other legal requirements. You may want to call an attorney right away. If you do not know an attorney, you may want to call an
attomey referral service. if you cannot afford an attorney, you may be eligible for free legal services from a nonprofit legal services
program. You can locate these nonprofit groups at the California Legal Services Web site {eww.tawhelpeallfornia.org), the California
Courts Online Self-Help Center (www.courtinfo.ce.gov/selihelp), or by contacting your focal court or county bar association. NOTE: The
court has a Statutory lien for waived fees and costs on any settlement or arbitration award of $10,000 or more in a civil case, The court's
lien must be paid before the court will dismiss the case.
Tene 30 DIAS DE: CALENDARIO después de que le entreguen esta citacién y papeles Jegales para presentar una respuesta por esqrito
on esta corte y hacer que se ontregue una copia al contrademandante. Una carta 0 una Hlamada telefénica no lo protegen. Su respuesta
or éserito tiene que estar en formato legal correcto si desea que procesen su caso en la corte. Es posible que haya un formulario. que
usted pueda usar para su respuesta. Puede encontrar estos formularios de la corte y més informacion en el Centro de Ayuda de las
Cortes de California (www.sucorte.ca.gov), en ta biblioteca de leyes de su condado o on la corte que ie quede més cerca, Si no puede
pagar la cuota de presentacién, pida al secretarto de la corte quo le dé un formulario de exencién de pago ue cuotas. SI no presenta su
respuesta a tempo, puede perder el caso por incumplimiento y la corte le podré quitar su sueldo, dinero y bienes sin mas advertencia.
Hay otros requisitos legales. Es recomendable que ilame a un abogado inmediatamente. Sino conoce aun abogado, puede Hamar a un
servicio de remisién a abogados. SI no puede pagar a un abogado, es posible que cumpla con los requisites para obtener servicios legaies
gratultos de un programa de servicios legates sin fines de lucro. Puede encontrar estos grupos sin fines de lucro en ét sitio web de
Califomia Legal Services, (www lawhelpcallfornia.org), on ef Centro de Ayuda de las Cortes de California (www.sucorte.ca.gov), 0
oniéndose en contacto con ta corte o ef colegio de abogados focales. AVISO: Por ley, la corte tene derecho a reclamar las cuotas y jos
costos exentos por Imponer un gravamen sobre cualquier recuperacion de $10,000 6 mas de valor recibida mediante un acuerdo o una
Concesién de arbltraje en un caso de derecho civil. Tlene que pagar ef gravamen de a corte antes de que fa corte pueda desechar el caso,
The name and address of the court is: ‘SHORT NAME OF CASE (from Comptanh): (Nombre de Caso}:
(El nombre y direccién de la corte es): Commonwealth v. FedEx Office, et al.
Superior Court of California, County of San Francisco ‘CASE NUMBER: (Nimero dei Casoy;
400 McAllister Street CGC-10-503332 (Lead Case)
San Francisco, California 94102
The name, address, and telephone number of cross-complainant's attorney, or cross-complainant without an attomey, is:
{El nombre, la direcci6n tel ndmero de teléfono del abogaco del contrademandante, o del contrademandante que no tlene
abogado, es): David A. Clinton, Esq. / Todd M. Austin, gq.
CLINTON & CLINTON s G ‘
100 Oceangate Bs ite 1400, LONG BEA CA 90802 562-216-5
100 Oceangate Boulevard, Suite 1400, CH, clerk by (000 - Deputy
(Fecha) (Secretario) (Adjurito)
(For proof of service of this summons, use Proof of Service of Summons (form POS-070),)
(Para prueba de entrega de esta citation use el formulario Proof of Service of Summons (POS-010).)
NOTICE TO THE PERSON SERVED: You are served
as an individual cross-defendant.
[SEAL 1.
2, [77] as the person sued under the fictitious name of (specify):
3. [21 on behait of (specify):
| under: CCP 416.10 (corporation) ~~] CCP 416.60 (minor)
CCP 416.20 (defunct corporation) CCP 416.70 (conservatee)
[£} Ccp 416.40 (association or partnership} CCP 416.90 (authorized person)
other (specify):
4. by personal delivery on (date): Paget oft
Fon dese fo: andlor Use SUMMONS—CROSS-COMPLAINT Code of Ct Pecado, 9442.20, 48 60,45
SUML10 [Rev July 1, 2008), ‘este Doc Fom Buller© °
; David A. Clinton, Esq. (Bar No. 150107)
Todd M. Austin, Esq. (Bar No. 232355)
Matthew J. Warren, Esq. (Bar No. 264514)
CLINTON & CLINTON
100 Oceangate, 14th Floor
Long Beach, California 90802
Ph.: (562) 216-5000
Fax: (562) 216-5001
Attorneys for Defendant,
FEDEX OFFICE AND PRINT SERVICES, INC
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF SAN FRANCISCO.
COMMONWEALTH LAND TITLE ) LEAD CASE NO, CGC-10-503332
INSURANCE COMPANY, )
) (Consolidated for all purposes with
Plaintiff, ) CGC-11-512102)
{
)
vy. ) [PROPOSED] CROSS-COMPLAINT OF
) DEFENDANT/CROSS-COMPLAINANT,
FEDEX OFFICE AND PRINT SERVICES, ) FEDEX OFFICE AND PRINT
LINC.; WINSTON LUM; BRUNO ) SERVICES, INC. FOR:
AESCHBACHER; STEPHEN )
FELLMANN;KAUSHAL NIROULA; JAY ) 1. Equitable Indemnity;
CHANDRAKANT SHAH; ELVIA ) 2. Equitable Apportionment;
PALIMINO; MORAD AFRAIMI; ) 3. Contribution;
MELVIN LEE EMERICH; MARTINI & ) 4. Declaratory Relief.
CHNOOGLE; GRACHELLE )
LANGUBAN, and DOES 1-25, )
) Date Filed: | September 8, 2010
Defendants. ) Trial Date: January 27, 2014
)
) Unlimited Jurisdiction
SHIRLEY S. HWANG, )
)
Plaintiff, )
¥ )
)
FEDEX OFFICE AND PRINT SERVICES, )
INC., ete., et al., }
Defendants. )
)
)
Hang Peo CO ge FeteaMNOt2- 1 [Proposed] Cross-Complainant of DefendantiCross-
Complainant, FedEx Office and Print Services, inc,eo em WKH RYN
10
. © . ° |
FEDEX OFFICE AND PRINT SERVICES,
INC.,
Cross-Complainant,
Vv.
COASTAL CALIFORNIA FUNDING
GROUP, INC., DEWITTE MORTGAGE,
and ROES 1-25, Inclusive,
Cross-Defendants.
Nee rer
COMES NOW Defendant/Cross-Complainant, FEDEX KINKO’S OFFICE AND PRINT|
SERVICES, INC. (hereinafter “Cross-Complainants”), and for causes of action against Cross- i
Defendants named herein, alleges as follows:
GENERAL ALLEGATIONS
1 Defendant/Cross-Complainant, FEDEX OFFICE AND PRINT SERVICES, INC.
(hereinafter "Cross-Complainant") is, and at all times herein mentioned was, a Texas
Corporation, qualified to do and doing business in the State of California.
2. Cross-Defendant, COASTAL CALIFORNIA FUNDING GROUP, INC. is, and at
all times herein mentioned was, a Corporation, qualified to do and doing business in the State of
California.
3, Cross-Defendant, DEWITTE MORTGAGE is, and at all times herein mentioned
was, a business entity of unknown form, doing business in the State of California.
4. Cross-Complainant is informed and believe, and thereon allege, that Cross-
Defendants, ROES } through 25, inclusive, are unknown to Cross-Complainant. Cross-
Complainant therefore sues said Cross-Defendants by such fictitious names. Cross-Complainant
will seek leave of court to amend this Cross-Complaint to insert the true names and capacities of
the fictitiously named Cross-Defendants when the same have been ascertained.
/f
NCLIFSO2\Data\C & C\Defendants\750 - FedEx\i 1\012- 2
Hwang\Pleading\XC01-Proposed.doc [Proposed] Cross-Complainant of DefendanvCross-
Complainant, FedEx Office and Print Services, Inc.. oO °
5. Cross-Complainant is informed and believe, and based on such information and
belief allege, that each named Cross-Defendant and each Cross-Defendant designated as a ROE
herein is responsible in some manner for the acts, occurrences and liabilities hereinafter alleged |
and referred to.
6. At all times material herein, each Cross-Defendant was the agent, servant, joint
venturer and employee of each and every remaining Cross-Defendant and the acts of such Cross-
Defendants were within the course and scope of said agency, joint venture and employment.
FIRST CAUSE OF ACTION
(or Equitable Indemnity Against All Cross-Defendants)
7. Cross-Complainant repeats, re-alleges and incorporates herein by reference the
allegations of Paragraphs 1 through 6, inclusive.
8. A civil action, identified as Commonwealth Land Title Insurance Company v.
FedEx Office and Print Services, Inc., et al., Case No. CGC10503332 was filed commenced by
Plaintiff, COMMONWEALTH LAND TITLE INSURANCE COMPANY (hereinafter
“Commonwealth”) in the San Francisco County Superior Court on or about September 8, 2010.
Commonwealth filed its First Amended Complaint on January 7, 2011. Cross-Complainant
incorporate by reference as though set forth herein the allegations of Commonwealth’s First
Amended Complaint, identified above. Said First Amended Complaint is incorporated solely for
the purpose of stating this Cross-Complaint, and not with the intention of admitting any
allegations as set forth therein.
8. Accivil action, identified as Hwang _v. FedEx Office and Print Services, Inc.., et al.
Case No. CGC11512102 was filed commenced by Plaintiff, SHIRLEY HWANG (hereinafter
“Hwang”) in the San Francisco County Superior Court on or about June 29, 2011. Hwang filed
its Second Amended Complaint on or about March 12, 2012. Cross-Complainant incorporate by
reference as though set forth herein the allegations of Hwang’s Second Amended Complaint,
identified above. Said Second Amended Complaint is incorporated solely for the purpose of
stating this Cross-Complaint, and not with the intention of admitting any allegations as set forth
therein.
\WCLIFSO2\Data\C & C\Defendants\750 - FedEx\1 1\012- 3
Hwang\Pleading\XC01-Proposed.doc {Proposed} Cross-Complainant of Defendant/Cross-
Complainant, FedEx Office and Print Services, Inc.|| California, which allowed said individuals in general and Winston Lum specifically, to use those
hey
. ° . °
9. Commonwealth and Hwang’s (hereinafter collectively referred to as “Plaintiffs”)
consolidated Complaints arise out of one series of transactions, happenings, or events that
occurred beginning in or about January 2009, at which time several individuals, including but not
limited to Defendants, Kaushal Niroula, Jay Shah, and Winston Lum, conspired to deprive and
did deprive Hwang of her interest in her real property located at 425 First Street, San Francisco,
properties as collateral in the loan considered, approved, and funded by Cross-Defendants,
whose conduct was so careless, negligent, undisciplined, unlawful and egregious that Cross-
Defendants were complicit in the aforementioned criminal conspiracy and caused the damages,
injuries, and/or losses, if any, alleged by Plaintiffs (hereinafter “The Transaction”). In order to
avoid unnecessary expense and multiplicity of actions, it is necessary and appropriate to file this |
Cross-Complaint so that a determination of all claims relating to that series of transactions, 1
| happenings, or events surrounding The Transaction can be made in one action.
10. Cross-Complainant is informed and believes, and thereon allege that the damages,
injuries and/or losses, if any, alleged by Plaintiffs in their consolidated Complaints, which Cross-
Complainant denied and continues to deny, arising out of The Transaction were the direct and
| proximate result of, and/or attributable to the acts or omissions of Cross-Defendants, and each of|
them, whereas Cross-Complainant is blameless, and any acts or omissions of Cross-Complainant
were strictly secondary, passive, or derivative in nature and did not proximately cause or
contribute to said damages and/or losses to any degree.
ll. - If Plaintiffs recover anything from Cross-Complainant for claims based on
damages and/or losses arising out of The Transaction, either by way of judgment, verdict, award,
settlement, or otherwise, the Cross-Complainant is entitled to indemnity from Cross-Defendants,
and each of them, for the amount of any sums paid to satisfy said recoveries.
fit
fit }
WI i
\\CLIFS02\Data\C & C\Defendants\750 - FedEx\11\012- 4
Hwang\Pleading\
Preview
SUPERIOR COURT OF CALIFORNIA COUNTY OF SAN FRANCISCO Document Scanning Lead Sheet Sep-12-2013 03:59 pm Case Number: CGC-10-503332 Filing Date: Sep-12-2013 03:52 pm Filed by: CAROL BALISTRERI Juke Box: 001 Image: 04199874 MOTION (CIVIL GENERIC) COMMONWEALTH LAND TITLE INSURANCE COMPANY VS. FEDEX OFFICE AND PRINT SERVICES, INC et al 001004199874 Instructions: Please place this sheet on top of the document to be scanned.By.Fax._ Gali oN Da 28 © David A. Clinton, Esq. (Bar No. 150107) Todd M. Austin, Esq. (Bar No. 232355) Matthew J. Warren, Esq. (Bar No. 264514) CLINTON & CLINTON 100 Oceangate, 14th Floor Long Beach, California 90802 Ph.: (562) 216-5000 Fax: (562) 216-5001 Attorneys for Defendant, Le F I LE D Superior: inty of San Francona SEP 1 2 2043 FEDEX OFFICE AND PRINT SERVICES, INC SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF SAN FRANCISCO COMMONWEALTH LAND TITLE INSURANCE COMPANY, Plaintiff, ve ) ) ) ) ) ) FEDEX OFFICE AND PRINT SERVICES, ) INC.; WINSTON LUM; BRUNO ) AESCHBACHER; STEPHEN ) FELLMANN;KAUSHAL NIROULA; JAY ) CHANDRAKANT SHAH; ELVIA ) PALIMINO; MORAD AFRAIMI; ) MELVIN LEE EMERICH; MARTINI & _ ) CHNOOGLE; GRACHELLE ) LANGUBAN, and DOES 1-25, ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Defendants. SHIRLEY S. HWANG, Plaintiff, FEDEX OFFICE AND PRINT SERVICES, INC., etc., et al., Defendants. F.\C & C\Defendants\750 - FedEx\11012- Hwang\Pleading\MotionLeave01.doc LEAD CASE NO. CGC-10-503332 (Consolidated for all purposes with CGC-11-512102) DEFENDANT, FEDEX OFFICE AND PRINT SERVICES, INC.’S NOTICE OF MOTION AND MOTION FOR LEAVE FOR DEFENDANT, FEDEX OFFICE AND PRINT SERVICES, INC. TO FILE CROSS-COMPLAINT AGAINST COASTAL CALIFORNIA FUNDING, DEWITTE MORTGAGE, AND ROES 1- 25, OR ALTERNATIVELY, FOR AN ORDER SHORTENING TIME; DECLARATION OF MATTHEW J. WARREN, ESQ.; [PROPOSED] CROSS- COMPLAINT; AND [PROPOSED] ORDER DATE: SEPTEMBER 23, 2013 TIME: 9:30 A.M. DEPT.: “501” Date Filed: | September 8, 2010 Trial Date: = January 27, 2014 Unlimited Jurisdiction FedEx Office’s Motion for Leave to File Cross-ComplaintCem INAH Bh WN BGR = 6s 15 Co ° PLEASE TAKE NOTICE THAT on September 23, 2013! at 9:30 am., or as soon thereafter as the matter may be heard in Department “501” of the above-entitled Court, located at! 400 McAllister Street, San Francisco, California 94102-4514, Defendant, FEDEX OFFICE AND] PRINT SERVICES, INC. (hereinafter “FedEx Office”) will and hereby does move this Court for an order granting FedEx Office leave to file a cross-complaint against COASTAL CALIFORNIA FUNDING GROUP, DEWITTE MORTGAGE, and ROES 1-25, pursuant to California Code of Civil Procedure Section 428.50 (c). A copy of Defendant’s proposed Cross- Complaint is attached as Exhibit “A” to the Declaration of Matthew J. Warren, Esq. Good cause supports the instant Application. Although the first Complaint in this matter was filed in September 2010, discovery in this matter was stayed until January 31, 2013 during the pendency of the parallel criminal action. Once the stay was lifted, the parties exchanged extensive written discovery. Such discovery prompted FedEx Office to subpoena business records from Coastal California Funding Group, which produced nearly 850 pages in July 2013. Those records reveal that Coastal California Funding Group engaged in negligent and undisciplined loan approval and lending practices, which caused and contributed to the damages allegedly sustained by Plaintiffs, COMMONWEALTH LAND TITLE COMPANY and SHIRLEY HWANG (hereinafter collectively referred to as “Plaintiffs”) Accordingly, this Application will be made on the grounds that the proposed Cross-Complaint is authorized by the provisions of California Code of Civil Procedure Section 428.10(b) in that the proposed Cross- Complaint arise out of the same transaction, occurrence, or series of transactions or occurrences as the causes brought by Plaintiffs. Because the facts at issue in the proposed Cross-Complaint are identical to those facts in the underlying consolidated Complaints, it is in the interests of justice to GRANT FedEx Office leave to file the Cross-Complaint to avoid multiplicity of suits, unnecessary duplication of legal fees and costs, and potentially inconsistent results. * On September 12, 2013, the Court granted Defendant, Fedix Office's Application to Shorten Time on Hearing of Motion for Leave, and specially set the hearing of the instant motion for September 23, 2013 at 9:30 a.m. FAC & C\Defendants\750 - FedEx\11\012- 2 Hwang\Pleading\MotionLeave01 doc FedEx Office's Motion for Leave to Fite Cross-Complainteo wm NIN Du Fwy QA aR Gn =f Ss 18 © 3 This Application is based on this Notice, the Memorandum of Points and Authorities, the Declaration of Matthew J. Warren, Esq., all of which are filed and served concurrently herewith, the pleadings and papers on file herein, all matters of which the Court may properly take judicial notice, and such evidence and arguments as may be presented at the time of hearing of this motion. DATED: September 12, 2013 CLINTON & CLINTON By: , - DAVID A. CLINTON, ESQ. ~~ TODD M. AUSTIN, ESQ. MATTHEW J. WARREN, ESQ. Attorneys for Defendant, FEDEX OFFICE & PRINT SERVICES, INC. FAC & C\Defendants\750 - FedEx\11\012- 3 Hwang\Pleading\MotionLeave01.doc FedEx Office's Motion for Leave to File Cross-ComplaintCoN AnH Bw HN © ° MEMORANDUM OF POINTS AND AUTHORITIES L STATEMENT OF FACTS: This case arises out of a highly publicized real estate fraud, which includes a murder, fleeing suspects, millions of dollars, and a protracted criminal trial. In early 2009, several criminal actors, including Kaushal Niroula, Jay Shah, and Winston Lum formed a scheme to deprive Plaintiff, Shirley Hwang (“Hwang”) of three investment properties in the Rincon Hill development located at 425 First Street, San Francisco, California 94105. These individuals drafted a bogus grant deed, purporting to transfer Hwang’s three condominium units to Lum. Thd grant deeds were then allegedly notarized by Grachelle Languban who Plaintiffs aver was working in the course and scope of her employment at FedEx Office and Print Services (“FedEx Office”). The grant deeds were then recorded. Thereafter, the criminal conspirators applied for loans in the amount of $2,500,000.00 using the condominiums, which were then titled to Lum, as collateral. The loans were approved and the funds were transferred to Lum and his cohorts, but, not surprisingly, the money was never repaid. The lender foreclosed on the property. Later, when evidence of the fraud came to light, the title insurance company, Commonwealth Land Title Company (“Commonwealth”), reimbursed the lender the amount of the loan. Shah, Lum, and Languban were arrested for participating in the criminal conspiracy. (Niroula was already in custody of the Riverside Sheriff for murder of an art dealer in Palm Springs, California.) The preliminary hearing took place from November 16, 2010 through February 10, 2011. At some point during the preliminary trial, Languban was discovered to have fled to The Philippines, and she is not expected to return voluntarily or to be extradited. The criminal trial proceeded against Shah, Lum, and a third criminal actor from April 2012 through June 2013. Shah and Lum were found guilty of multiple counts in September 2012, and both are believed to have been sentenced in or around January 13, 2013. Ait Hl Aid FAC & C\Defendants\750 - FedEx\11\012- 4 Hwang\Pleading\MotionLeave01.doc FedEx Office's Motion for Leave to File Cross-ComplaintCoD Oe NY DHA BR WWD oe °o On or about September 8, 2010, Commonwealth filed suit against the criminal actors and FedEx Office. As to FedEx Office, Commonwealth alleges that FedEx Office is liable only for the conduct of its employee, Languban, under the doctrine of respondeat superior. Thereafter, because FedEx Office’s potential liability rested exclusively on the conduct of others, and because those individuals were being prosecuted for the underlying conduct in both the civil and criminal causes and would not cooperate in the civil case until the criminal matter was resolved, FedEx Office filed a Motion to Stay the civil action during the pendency of the criminal case in November 2010. On January 5, 2011, the Court granted the Motion and stayed all discovery in the civil action pending resolution of the parallel criminal action. On June 29, 2011, Hwang filed her own Complaint against the criminal actors as well as FedEx Office. Hwang’s Complaint asserts causes of action against FedEx Office of negligence and slander of title, and both are premised on the conduct of Languban and the doctrine of respondeat superior. Because both Commonwealth’s lawsuit and Hwang’s lawsuit stem from the same real estate transaction and present the same issues of law and fact, FedEx Office moved to consolidate both-actions. On or about October 27, 2011, the Motion to Consolidate was granted. ‘The stay on discovery continued as the criminal matter progressed. In December 14, 2012, shortly after Shah and Lum were found guilty, Hwang filed a Motion to Lift the Stay on Discovery. The Motion was granted on January 31, 2013. Pursuant to the Order, the parties were authorized to begin written discovery and subpoena business records immediately and to take depositions beginning on May 1, 2013. Thereafter, Commonwealth, Hwang and FedEx Office exchanged extensive written discovery. Some of the discovery responses were somewhat delayed because the parties sought a’ protective order due to the sensitivity of some of the information and the circumstances of the case. However, based on the information obtained through the discovery responses, FedEx Office subpoenaed the business records of Coastal California Funding Group on or about June 5, 2013. Coastal California Funding Group was the mortgage broker from whom the criminal actors applied for a loan against the properties at issue. Vii FAC & C\Defendants\750 - FedEx\11\012- 5 Hwang\Pleading\MotionLeave0t doc ‘edEx Orie Oe oes Con naiCem UN DAH BF WN DPR RR NY ee Be ee eB Be Be ee Beds = SF Ge AA wR DH KS o ° On or about July 11, 2013, counsel for FedEx office received nearly 850 pages of documents from Coastal California Funding Group in response to the subpoena. Examination of the records produced by Coastal California Funding Group reveals that said company should be added as a party to this action. Coastal California Funding Group, which received a significant commission on the loan that was eventually funded by lender, DeWitte Mortgage, engaged in the| type of loose and undisciplined loan approval process that caused the most recent housing bubble| to burst at, coincidentally, the same time as the loan in this matter was approved. According to a review of the records produced, Coastal California Funding Group apparently performed no income verification on Lum to confirm that he had the means to repay the seven-figure loan within the thirteen month period proposed. Further, there was no investigation into the validity of the Lum’s claim to the properties, despite the fact that the properties were transferred to him just days before he applied for a $2,500,000.00 loan using the same properties as collateral. Moreover, Lum’s bank statements, which previously held a nominal amount of money, received a huge influx of money just before Lum applied for the loans. These and other tell-tale signs would have suggested to the reasonable lender that the loan application was ripe with fraud. By turning a blind eye to the suspicious nature of the loan application, by failing to conduct any reasonable investigation into Lum, Hwang and/or the properties at issue, and by placing its commission over any harm its approval would cause to third parties, Coastal California Funding Group was complicit in the fraudulent activity and should now be liable for its conduct. Accordingly, FedEx Office respectfully requests that this Court grant its Motion for Leave to File said Cross-Complaint, and that the Proposed Cross-Complaint, attached as Exhibit “A” to the Declaration of Matthew J. Warren, Esq. be deemed filed so that service upon the appropriate parties can be promptly effectuated. ‘if Vif Vif Aid FAC & C\Defendants\750 - FedEx\11\012- 6 ° FedEx Office’s Motion for Leave to Hwang\Pleading\MotionLeave01t doc File Cross ComplaintComey DW PF WwW HN 10 © ° I. ARGUMENT: A. THE PROPOSED CROSS-COMPLAINT ARISES OUT OF THE SAME TRANSACTION, OCCURRENCE, AND FACTS AS THOSE IN THE UNDERLYING COMPLAINTS, AND THEREFORE, THE CROSS- COMPLAINT IS PROPER. Code of Civil Procedure (CCP) Section 428.10(b) states, in pertinent part as follows: A party against whom a cause of action has been asserted in a complaint...may file a cross-complaint setting forth...(b) any cause of action he has against a person alleged to be liable thereon, whether or not such person is already a party to the action, if the cause of action asserted in his cross-complaint (1) arises out of the same transaction, occurrence, or series of transactions or occurrences as the cause brought against him. (Emphasis added). As demonstrated by the Introduction, the Proposed Cross-Complaint arises out of the same transaction, occurrence, or series of transactions or occurrences as those in the Complaints against FedEx Office. Plaintiffs’ operative Complaints contend that they were harmed by the conduct of several criminal actors, who deprived Hwang of her properties and then used such properties to fraudulently obtain $2,200,000.00 in loans against the property. The Proposed Cross-Complaint is premised on the same set of facts, and, more specifically, targets those who exercised poor judgment and engaged in undisciplined loan approval and lending practices, which allowed the criminal actors to further their conspiracy. In this regard, the Cross-Complaint| is entirely about the same set of facts as those in the underlying Complaints. However, once the trial date has been set by the Court, as it has in the instant matter, leave of court is necessary to file a cross-complaint. Code of Civil Procedure section 428.50(c). Trial in this matter is presently scheduled for January 27, 2014, and as such, leave is required for FedEx Office to file the proposed Cross-Complaint. As discussed in greater detail, it is in the “interest of justice” to grant leave to file FedEx Office’s Cross-Complaint. Vid Tif Vif FAC & C\Defendants\750 - FedEx\11\012- 7 Hwang\Pleading\MotionLeave01.doc FedEx Office's Motion for Leave to File Cross-Complaint© me IY DH BF Ww NY RR PN YN KN NY Se Be Be Be ewe Be Be ee eI AW BF Bw YH = SO HM AAA RB wWwH HK DS © ° B. ITIS IN THE INTEREST OF JUSTICE TO GRANT FEDEX OFFICE LEAVE) TO FILE JTS CROSS-COMPL., Code of Civil Procedure section 428.50(c) discusses the standard by which a Motion for Leave to file a Cross-Complaint is to be weighed: “Leave may be granted in the interest of justice at any time during the course of the action.” “The purpose of allowing a cross-complaint is to enable all matters in dispute between the parties relating to or depending upon the contract, transaction or subject matter upon which the action is brought or affecting the property to which it relates, to be determined by a single action and by a single judgment. In other words, to avoid a multiplicity of suits and thereby save vexation and expense.” Bracey v. Gray (1944) 65 Cal.App.2d 282, 285-286. To avoid a multiplicity of suits and potentially inconsistent results, justice requires that leave be granted to FedEx Office to file a Cross-Complaint against Coastal California Funding Group and DeWitte Mortgage. In their operative and respective Complaints, Commonwealth and Hwang assert a number, of actions against the criminal actors, including Conversion, Trespass, and Deceit. All of those causes of action are based on the criminal conspiracy to deprive Hwang of her interest in her three real properties, and then use those properties as collateral in obtaining a $2,500,000.00 loan. The criminal actors applied for that loan through Coastal California Funding Group, which, because of loose and undisciplined lending practices, approved the loan. By engaging in the type of reckless lending practices that contributed to the “Great Recession,” and by overlooking the obvious signs of fraud associated with Lum’s loan application so as not to risk a six-figure commission, Coastal California Funding Group was complicit in the criminal conspiracy at the heart of Plaintiffs’ Complaints. In this regard, the facts at issue in the Proposed Cross-Complaint are the same identical facts at issue in the underlying Complaints. As such, to avoid the multiplicity of actions, undue consumption of resources, and possible inconsistent outcomes, it is in the interest of justice that FedEx Office’s Motion for Leave to File Cross-Complaint be granted and that the proposed Cross-Complaint, attached to the Declaration of Matthew J. Warren, Esq. as Exhibit “A” be deemed filed. FAC & C\Defendants\750 - FedEx\11\012- 8 Hwang\Pleading\MotionLeave01.doc FedEx Office's Motion for Leave to File Cross-Complaint0 ON DH BRB WN © ° C. THERE HAS BEEN NO UNREASONABLE DELAY IN FILING THE INSTANT MOTION, AND DENIAL OF THE SUBJECT MOTION WOULD BE BURDENSOME TO BOTH THE COURT AND FEDEX OFFICE. “A defendant may file a cross-complaint at time of answering. Thereafter, it may only be done by permission of the court.” Nels E. Nelson, Inc. v. Tarman (1958) 163 Cal.App.2d 714, 730. However, the Courts have adopted a liberal policy of granting leave to file Cross- Complaints. “A motion to file a cross-complaint at any time during the course of the action must be granted unless bad faith of the moving party is demonstrated.” Silver Organizations Ltd. v. Frank (1990) 217 Cal.App.3d 94, 99. It cannot be said that FedEx Office delayed in filing the instant motion. The stay on all discovery in this matter was put in place on January 5, 2011, less than four months after Commonwealth filed its lawsuit and before any discovery had been conducted. The January 27, 2014 trial date was set on November 21, 2012, which was at a time before the stay on all discovery was lifted. Indeed, the stay on discovery was not lifted until more than two months after the trial date was already set. In sum, the parties were prevented by the stay from conducting any discovery for more than two years, during which time the parallel criminal action was concluded. FedEx Office did not lear of the need to file this Motion for Leave to File its Cross- Complaint until it engaged in written discovery and subpoenaed records. It is the subpoenaed business records obtained from Coastal California Funding Group in July 2013, which revealed the need for the instant Motion. However, the need to subpoena those records only became apparent upon receiving Plaintiffs’ discovery responses, which were not received until the several months following the January 31, 2013 lifting of the discovery stay. While this Motion is made some three years after the case was filed, discovery was stayed for more than two years of those three years, and FedEx Office brings this matter before the Court at the first opportunity. Mit Tih Mf FAC & C\Defendants\750 - FedEx\11\012- 9 Hwang\Pleading\MotionLeave01.doc FedEx Offee's Motion for Leave tooO wm YAH RW NY = bo 13 © ° It should be stressed that if FedEx Office’s motion is denied, FedEx Office will be forced to file a separate lawsuit against the Cross-Defendant. This would result in FedEx Office having to pay legal fees and costs for two separate cases, both of which stem from a common nucleus of| operative facts. The second lawsuit, which would consist of legal and factual issues similar to and duplicative of those raised in Commonwealth and Hwang’s consolidated Complaints, would be yet another lawsuit that the Court system would have to bear. This burden would necessarily be avoided if the instant motion is granted and FedEx Office is allowed to file its Cross- Complaint in this matter against Coastal California Funding Group and DeWitte Mortgage. Ili. CONCLUSION Based upon the foregoing, FedEx Office respectfully requests that the Court, in the interest of justice, GRANT the instant Motion for Leave to File a Cross-Complaint against Coastal California Funding Group, DeWitte Mortgage, and Roes 1 through 25, and that the proposed Cross-Complaint attached to the Declaration of Matthew J. Warren, Esq. as Exhibit “A” be filed immediately so that service upon the appropriate parties can be promptly effectuated. DATED: September 12, 2013 CLINTON, LA 2o4g4 - CLINTON, ESQ. By: TODDLM. AUSTIN, ESQ. Attomeys for Defendant, FEDEX OFFICE & PRINT SERVICES, INC. FAC & C\Defendants\750 - FedEx\111012- . Hwang\Pleading\MotonLcave0 doe 10 FedEx Office's Motion for Leave to File Cross-Complaintoe YU DAH BF WHY RP NR RP RYN NR KY HN Be Be Be Be ee Be Be CIA AH RB HH B= SO wH AAA RB Hw DH HE DS © ° DECLARATION OF MATTHEW J. WARREN, ESQ. I, Matthew J. Warren, Esq. declare that: 1. lam an attorney licensed to practice law before all of the courts of the State of California, and am an associate at the law firm of CLINTON & CLINTON, attorneys for Defendant, FEDEX OFFICE AND PRINT SERVICES, INC. (hereinafter, “FedEx Office”). 1 am assigned to work on my firm’s file pertaining to this alleged incident, and if called as a witness I could and would testify competently to the following facts and circumstances: 2. On or about September 8, 2010, Plaintiff, Commonwealth Land Title Company (hereinafter “Commonwealth”) filed suit against the FedEx Office and several additional individuals, including Kashual Niroula, Jay Shah, Winston Lum, and Grachelle Languban. As to FedEx Office, Commonwealth alleged that FedEx Office is liable only for the conduct of its employee, Languban, under the doctrine of respondeat superior. 3. At that time, Shah, Lum, and Languban were in custody and being prosecuted for their involvement in a criminal conspiracy to deprive Plaintiff, Shirley Hwang (hereinafter “Hwang”) of her real property and to defraud lenders of several millions of dollars. 4. In November 2010, FedEx Office filed a Motion to Stay All Discovery because FedEx Office’s potential liability rested exclusively on the conduct of others and because those individuals were being prosecuted for the underlying conduct in both the civil and criminal causes and would not cooperate in the civil case until the criminal matter was resolved. On January 5, 2011, the Court granted the Motion and stayed all discovery in the civil action pending resolution of the parallel criminal action. 5. On December 14, 2012, shortly after Shah and Lum were found guilty, Hwang filed a Motion to Lift the Stay on Discovery. The Motion was granted on January 31, 2013. Pursuant to the Order, the parties were authorized to begin written discovery and subpoena business records immediately and to take depositions beginning on May 1, 2013. 6. No discovery was conducted prior to the stay being lifted on January 31, 2013. Hf FAC & C\Defendants\750 - FedEx\11\012- 1 Hwang\Pleading\MotionLeave01.doc FedEx Office’s Motion for Leave to File Cross-ComptainteC om YW DWF YN , © , °o 7. Thereafter, Commonwealth, Hwang and FedEx Office exchanged extensive written discovery. Some of the discovery responses were somewhat delayed because the parties sought a protective order due to the sensitivity of some of the information and the circumstances of the case. 8. Based on the information obtained through the discovery responses, FedEx Office! subpoenaed the business records of Coastal California Funding Group on or about June 5, 2013. Coastal California Funding Group was the mortgage broker from whom the criminal actors applied for a loan against the properties at issue. , 9. On or about July 11, 2013, my office received nearly 850 pages of documents from Coastal California Funding Group in response to the subpoena. Examination of the records produced by Coastal California Funding Group revealed that a Cross-Complaint against Coastal California Funding Group would be appropriate. 10. There has been no appreciable or prejudicial delay in filing the instant motion. The motion is made shortly after the conclusion of the review of approximately 850 pages of loan applications and related documents. Moreover, these records were subpoenaed in response to information gained from Hwang and Commonwealth in discovery, which was previously stayed until January 2013. 11. If the instant motion is not granted, FedEx Office would be forced to file a separate action against Coastal Califomia Funding Group and DeWitte Mortgage, which would result in additional legal fees and costs for mostly duplicative work as such an action shares the same legal issues and facts as those presented in Commonwealth and Hwang’s consolidated Complaints. 12. Attached hereto as Exhibit “A” is the true and correct copy of FedEx Office’s [Proposed] Cross-Complaint against Coastal California Funding Group, DeWitte Mortgage, and Roes 1] through 25, Aff fil Ji] FAC & C\Defendants\750 - FedEx\11\012- 12 Hwang\Pleading\MotionLeave01.doc FedEx Office's Motion for Leave to File Cross-ComplaintCoO me RW DAH BR WN I declare under the penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on September 10, 2013, at Long Beach, California. (LA MATTHEW/. WARREN, Declarant FAC & C\Defendants\750 - FedEx\11\012- 13 Hwang}Pieading\MotionLeaved1.doc FedEx Office's Motion for Leave to File Cross-ComplaintExhibit “A”© ° SUM-110 (CITACION JUDICIAL-CONTRADEMANDA) NOTICE TO CROSS-DEFENDANT: COASTAL CALIFORNIA FUNDING (AVISO AL CONTRA-DEMANDADO): GROUP, INC.,DEWITTE MORTGAGE, and ROES 1-25, Inclusive, YOU ARE BEING SUED BY CROSS-COMPLAINANT: (LO ESTA DEMANDANDO EL CONTRADEMANDANTE): FEDEX OFFICE AND PRINT SERVICES, INC. You have 30 CALENDAR DAYS after this summons and legal papers are served on you to file a written response at this court and have a Copy served on the cross-complainant. A letter or phone call will not protect you. Your written response must be in proper legal form if you want the court to hear your case, There may be a court form that you can use for your response. You can find these court forms and more information at the California Courts Online Self-Help Center (www.courtinfo.ca.gov/selfhelp), your county law library, or the courthouse nearest you, If you cannot pay the filing fee, ask the court clerk for a fee waiver form. Ifyou do not fife your response on time, you may lose the case by default, and your wages, money, and property may be taken without further warning from the court. There are other legal requirements. You may want to call an attorney right away. If you do not know an attorney, you may want to call an attomey referral service. if you cannot afford an attorney, you may be eligible for free legal services from a nonprofit legal services program. You can locate these nonprofit groups at the California Legal Services Web site {eww.tawhelpeallfornia.org), the California Courts Online Self-Help Center (www.courtinfo.ce.gov/selihelp), or by contacting your focal court or county bar association. NOTE: The court has a Statutory lien for waived fees and costs on any settlement or arbitration award of $10,000 or more in a civil case, The court's lien must be paid before the court will dismiss the case. Tene 30 DIAS DE: CALENDARIO después de que le entreguen esta citacién y papeles Jegales para presentar una respuesta por esqrito on esta corte y hacer que se ontregue una copia al contrademandante. Una carta 0 una Hlamada telefénica no lo protegen. Su respuesta or éserito tiene que estar en formato legal correcto si desea que procesen su caso en la corte. Es posible que haya un formulario. que usted pueda usar para su respuesta. Puede encontrar estos formularios de la corte y més informacion en el Centro de Ayuda de las Cortes de California (www.sucorte.ca.gov), en ta biblioteca de leyes de su condado o on la corte que ie quede més cerca, Si no puede pagar la cuota de presentacién, pida al secretarto de la corte quo le dé un formulario de exencién de pago ue cuotas. SI no presenta su respuesta a tempo, puede perder el caso por incumplimiento y la corte le podré quitar su sueldo, dinero y bienes sin mas advertencia. Hay otros requisitos legales. Es recomendable que ilame a un abogado inmediatamente. Sino conoce aun abogado, puede Hamar a un servicio de remisién a abogados. SI no puede pagar a un abogado, es posible que cumpla con los requisites para obtener servicios legaies gratultos de un programa de servicios legates sin fines de lucro. Puede encontrar estos grupos sin fines de lucro en ét sitio web de Califomia Legal Services, (www lawhelpcallfornia.org), on ef Centro de Ayuda de las Cortes de California (www.sucorte.ca.gov), 0 oniéndose en contacto con ta corte o ef colegio de abogados focales. AVISO: Por ley, la corte tene derecho a reclamar las cuotas y jos costos exentos por Imponer un gravamen sobre cualquier recuperacion de $10,000 6 mas de valor recibida mediante un acuerdo o una Concesién de arbltraje en un caso de derecho civil. Tlene que pagar ef gravamen de a corte antes de que fa corte pueda desechar el caso, The name and address of the court is: ‘SHORT NAME OF CASE (from Comptanh): (Nombre de Caso}: (El nombre y direccién de la corte es): Commonwealth v. FedEx Office, et al. Superior Court of California, County of San Francisco ‘CASE NUMBER: (Nimero dei Casoy; 400 McAllister Street CGC-10-503332 (Lead Case) San Francisco, California 94102 The name, address, and telephone number of cross-complainant's attorney, or cross-complainant without an attomey, is: {El nombre, la direcci6n tel ndmero de teléfono del abogaco del contrademandante, o del contrademandante que no tlene abogado, es): David A. Clinton, Esq. / Todd M. Austin, gq. CLINTON & CLINTON s G ‘ 100 Oceangate Bs ite 1400, LONG BEA CA 90802 562-216-5 100 Oceangate Boulevard, Suite 1400, CH, clerk by (000 - Deputy (Fecha) (Secretario) (Adjurito) (For proof of service of this summons, use Proof of Service of Summons (form POS-070),) (Para prueba de entrega de esta citation use el formulario Proof of Service of Summons (POS-010).) NOTICE TO THE PERSON SERVED: You are served as an individual cross-defendant. [SEAL 1. 2, [77] as the person sued under the fictitious name of (specify): 3. [21 on behait of (specify): | under: CCP 416.10 (corporation) ~~] CCP 416.60 (minor) CCP 416.20 (defunct corporation) CCP 416.70 (conservatee) [£} Ccp 416.40 (association or partnership} CCP 416.90 (authorized person) other (specify): 4. by personal delivery on (date): Paget oft Fon dese fo: andlor Use SUMMONS—CROSS-COMPLAINT Code of Ct Pecado, 9442.20, 48 60,45 SUML10 [Rev July 1, 2008), ‘este Doc Fom Buller© ° ; David A. Clinton, Esq. (Bar No. 150107) Todd M. Austin, Esq. (Bar No. 232355) Matthew J. Warren, Esq. (Bar No. 264514) CLINTON & CLINTON 100 Oceangate, 14th Floor Long Beach, California 90802 Ph.: (562) 216-5000 Fax: (562) 216-5001 Attorneys for Defendant, FEDEX OFFICE AND PRINT SERVICES, INC SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF SAN FRANCISCO. COMMONWEALTH LAND TITLE ) LEAD CASE NO, CGC-10-503332 INSURANCE COMPANY, ) ) (Consolidated for all purposes with Plaintiff, ) CGC-11-512102) { ) vy. ) [PROPOSED] CROSS-COMPLAINT OF ) DEFENDANT/CROSS-COMPLAINANT, FEDEX OFFICE AND PRINT SERVICES, ) FEDEX OFFICE AND PRINT LINC.; WINSTON LUM; BRUNO ) SERVICES, INC. FOR: AESCHBACHER; STEPHEN ) FELLMANN;KAUSHAL NIROULA; JAY ) 1. Equitable Indemnity; CHANDRAKANT SHAH; ELVIA ) 2. Equitable Apportionment; PALIMINO; MORAD AFRAIMI; ) 3. Contribution; MELVIN LEE EMERICH; MARTINI & ) 4. Declaratory Relief. CHNOOGLE; GRACHELLE ) LANGUBAN, and DOES 1-25, ) ) Date Filed: | September 8, 2010 Defendants. ) Trial Date: January 27, 2014 ) ) Unlimited Jurisdiction SHIRLEY S. HWANG, ) ) Plaintiff, ) ¥ ) ) FEDEX OFFICE AND PRINT SERVICES, ) INC., ete., et al., } Defendants. ) ) ) Hang Peo CO ge FeteaMNOt2- 1 [Proposed] Cross-Complainant of DefendantiCross- Complainant, FedEx Office and Print Services, inc,eo em WKH RYN 10 . © . ° | FEDEX OFFICE AND PRINT SERVICES, INC., Cross-Complainant, Vv. COASTAL CALIFORNIA FUNDING GROUP, INC., DEWITTE MORTGAGE, and ROES 1-25, Inclusive, Cross-Defendants. Nee rer COMES NOW Defendant/Cross-Complainant, FEDEX KINKO’S OFFICE AND PRINT| SERVICES, INC. (hereinafter “Cross-Complainants”), and for causes of action against Cross- i Defendants named herein, alleges as follows: GENERAL ALLEGATIONS 1 Defendant/Cross-Complainant, FEDEX OFFICE AND PRINT SERVICES, INC. (hereinafter "Cross-Complainant") is, and at all times herein mentioned was, a Texas Corporation, qualified to do and doing business in the State of California. 2. Cross-Defendant, COASTAL CALIFORNIA FUNDING GROUP, INC. is, and at all times herein mentioned was, a Corporation, qualified to do and doing business in the State of California. 3, Cross-Defendant, DEWITTE MORTGAGE is, and at all times herein mentioned was, a business entity of unknown form, doing business in the State of California. 4. Cross-Complainant is informed and believe, and thereon allege, that Cross- Defendants, ROES } through 25, inclusive, are unknown to Cross-Complainant. Cross- Complainant therefore sues said Cross-Defendants by such fictitious names. Cross-Complainant will seek leave of court to amend this Cross-Complaint to insert the true names and capacities of the fictitiously named Cross-Defendants when the same have been ascertained. /f NCLIFSO2\Data\C & C\Defendants\750 - FedEx\i 1\012- 2 Hwang\Pleading\XC01-Proposed.doc [Proposed] Cross-Complainant of DefendanvCross- Complainant, FedEx Office and Print Services, Inc.. oO ° 5. Cross-Complainant is informed and believe, and based on such information and belief allege, that each named Cross-Defendant and each Cross-Defendant designated as a ROE herein is responsible in some manner for the acts, occurrences and liabilities hereinafter alleged | and referred to. 6. At all times material herein, each Cross-Defendant was the agent, servant, joint venturer and employee of each and every remaining Cross-Defendant and the acts of such Cross- Defendants were within the course and scope of said agency, joint venture and employment. FIRST CAUSE OF ACTION (or Equitable Indemnity Against All Cross-Defendants) 7. Cross-Complainant repeats, re-alleges and incorporates herein by reference the allegations of Paragraphs 1 through 6, inclusive. 8. A civil action, identified as Commonwealth Land Title Insurance Company v. FedEx Office and Print Services, Inc., et al., Case No. CGC10503332 was filed commenced by Plaintiff, COMMONWEALTH LAND TITLE INSURANCE COMPANY (hereinafter “Commonwealth”) in the San Francisco County Superior Court on or about September 8, 2010. Commonwealth filed its First Amended Complaint on January 7, 2011. Cross-Complainant incorporate by reference as though set forth herein the allegations of Commonwealth’s First Amended Complaint, identified above. Said First Amended Complaint is incorporated solely for the purpose of stating this Cross-Complaint, and not with the intention of admitting any allegations as set forth therein. 8. Accivil action, identified as Hwang _v. FedEx Office and Print Services, Inc.., et al. Case No. CGC11512102 was filed commenced by Plaintiff, SHIRLEY HWANG (hereinafter “Hwang”) in the San Francisco County Superior Court on or about June 29, 2011. Hwang filed its Second Amended Complaint on or about March 12, 2012. Cross-Complainant incorporate by reference as though set forth herein the allegations of Hwang’s Second Amended Complaint, identified above. Said Second Amended Complaint is incorporated solely for the purpose of stating this Cross-Complaint, and not with the intention of admitting any allegations as set forth therein. \WCLIFSO2\Data\C & C\Defendants\750 - FedEx\1 1\012- 3 Hwang\Pleading\XC01-Proposed.doc {Proposed} Cross-Complainant of Defendant/Cross- Complainant, FedEx Office and Print Services, Inc.|| California, which allowed said individuals in general and Winston Lum specifically, to use those hey . ° . ° 9. Commonwealth and Hwang’s (hereinafter collectively referred to as “Plaintiffs”) consolidated Complaints arise out of one series of transactions, happenings, or events that occurred beginning in or about January 2009, at which time several individuals, including but not limited to Defendants, Kaushal Niroula, Jay Shah, and Winston Lum, conspired to deprive and did deprive Hwang of her interest in her real property located at 425 First Street, San Francisco, properties as collateral in the loan considered, approved, and funded by Cross-Defendants, whose conduct was so careless, negligent, undisciplined, unlawful and egregious that Cross- Defendants were complicit in the aforementioned criminal conspiracy and caused the damages, injuries, and/or losses, if any, alleged by Plaintiffs (hereinafter “The Transaction”). In order to avoid unnecessary expense and multiplicity of actions, it is necessary and appropriate to file this | Cross-Complaint so that a determination of all claims relating to that series of transactions, 1 | happenings, or events surrounding The Transaction can be made in one action. 10. Cross-Complainant is informed and believes, and thereon allege that the damages, injuries and/or losses, if any, alleged by Plaintiffs in their consolidated Complaints, which Cross- Complainant denied and continues to deny, arising out of The Transaction were the direct and | proximate result of, and/or attributable to the acts or omissions of Cross-Defendants, and each of| them, whereas Cross-Complainant is blameless, and any acts or omissions of Cross-Complainant were strictly secondary, passive, or derivative in nature and did not proximately cause or contribute to said damages and/or losses to any degree. ll. - If Plaintiffs recover anything from Cross-Complainant for claims based on damages and/or losses arising out of The Transaction, either by way of judgment, verdict, award, settlement, or otherwise, the Cross-Complainant is entitled to indemnity from Cross-Defendants, and each of them, for the amount of any sums paid to satisfy said recoveries. fit fit } WI i \\CLIFS02\Data\C & C\Defendants\750 - FedEx\11\012- 4 Hwang\Pleading\