Request,Application: COMMONWEALTH LAND TITLE INSURANCE COMPANY VS. FEDEX OFFICE AND PRINT SERVICES, INC et al (PROVIDE ACCESS)

• 
• 
• 
• 
• 
• 
• 
• 

						
                                
Preview
                                WOU

SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN FRANCISCO

Document Scanning Lead Sheet
May-01-2012 11:20 am

Case Number: CGC-10-503332
Filing Date: May-01-2012 11:18
Filed by: MICHAEL RAYRAY
Juke Box: 001 Image: 03596896

MOTION TO SET ASIDE DEFAULT/DEFAULT JUDGMENT/LEAVE
TO DEFEND

COMMONWEALTH LAND TITLE INSURANCE COMPANY VS. FEDEX OFFICE
AND PRINT SERVICES, INC et al

001C03596896

Instructions:
Please place this sheet on top of the document to be scanned.CANNATA, CHING & O'TOOLE LLP

ATTORNEYS AT LAW
100 Pine Street, Suite 350
Sao Francisco, CAQ4111

TEL: (415)409-8900

= Fax: (418)409-8904

MICHAEL M. CHING (SBN 209426)
JENNIFER C. LEE (SBN 273545)
CANNATA, CHING & O° TOOLE LLP
100 Pine Street, Suite 350

San Francisco, CA 94111

Telephone: (415) 409-8900

Facsimile: (415) 409-8904

Attorneys for Defendant
WINSTON LUM

IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA.
IN AND FOR THE COUNTY OF SAN FRANCISCO

COMMONWEALTH LAND TITLE LEAD CASE NO. CGC-10-503332

INSURANCE COMPANY,
(Consolidated for all purposes with CGC-l-
Plaintiff, 512102)
v. NOTICE OF MOTION AND MOTION IN

SUPPORT OF DEFENDANT WINSTON
FEDEX OFFICE AND PRINT SERVICES, LUM’S MOTION FOR RELIEF FROM
INC.; WINSTON LUM; KAUSHAL ENTRY OF DEFAULT
NIROULA; JAY CHANDRAKANT /
SHAH; MELVIN LEE EMERICH;
MARTINI CHNOOGLE;, GRACHELLE
LANGUBAN; and MERCHANTS

Date: May 23, 2012

BONDING COMPANY; and DOES 1-24, Time: 9:30 a.m.
Dept.: 302
Defendants. Judge: Hon. Harold E. Kahn

SHIRLEY S. HWANG,
Plaintiff,

. BY FAX

FEDEX OFFICE AND PRINT SERVICES,
INC.; WINSTON LUM; KAUSHAL
NIROULA; JAY CHANDRAKANT
SHAH; MELVIN LEE EMERICH;
GRACHELLE LANGUBAN:; and
MARTINI & CHNOOGLE; and DOES 1-
50,

Cross-Defendants.CANNATA, CHING & O'TOOLE LLP

ATTORNEYS AT LAW
100 Pine Street. Suite 350

San Francisco
TEL: (415)409-8900 « Fax: (415)409-8904

TO PLAINTIFF COMMONWEALTH AND ITS ATTORNEY OF RECORD:

PLEASE TAKE NOTICE THAT on May 23, 2012 at 9:30 a.m. or as soon thereafter as
this matter can be heard in Department 302 of the Superior Court for the County of San Francisco
located at 400 McAllister Street, San Francisco CA, 94102, defendant Winston Lum will and
hereby does move to set aside the entry of default filed against defendant on July 11, 2011 by
plaintiff Commonwealth Land Title Insurance Company.

This motion is brought pursuant to Code of Civil Procedure section 473(d) on the basis
that equitable relief from default may be sought at any time on the ground of “extrinsic fraud or
mistake” on the following grounds: (L) that the entry of default is void, (2) that the default was
taken against defendant Lum without proper notice, (3) that defendant’s answer to the initial
complaint stands and states a meritorious defense to the claim alleged against Mr. Lum, (4) that
plaintiff's first amended complaint does not allege a new cause of action against Mr. Lum
necessitating a further answer, (5) that plaintiff Commonwealth had no leave to file an amended
complaint against Mr. Lum, (6) that defendant Lum moved with all diligence after learning of the
default, and (7) that plaintiff Commonwealth will not be prejudiced should relief be granted.

This motion is based on this Notice of Motion and Motion, the Memorandum of Points
and Authorities filed herewith, the Declarations of Michael M. Ching and Jennifer C. Lee filed in
support of this motion, on all records and papers filed in this action, and upon such oral argument
and submissions that may be presented at or before the hearing of this motion.

\
Dated: April 30, 2012 Cc. (AT.

. CHING & O° TOOLE LLP

MICHAEL M. CHING
Attorneys for Defendant Winston Lum

ole 530410 lum notige of min.default FINAL wed
DEFENDANT'S NOTICE OF MOTION AND MOTION FOR RELIEF FROM ENTRY OF DEFAULTCANNATA, CHING & O'TOOLE LLP

ATTORNEYS AT LAW
100 Pine Street, Suite 350
San Francise 0, CA94111

Tel: (415)409-8900 * Fa,

2 {415)409-8904

MICHAEL M. CHING (SBN 209426)
JENNIFER C. LEE (SBN 273545)
CANNATA, CHING & O° TOOLE LLP
100 Pine Sireet, Suite 350

San Francisco, CA 94111

Telephone: (415) 409-8900

Facsimile: (415) 409-8904

Attorneys for Defendant
WINSTON LUM

BAY QE Cy

IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA

IN AND FOR THE COUNTY OF SAN FRANCISCO

COMMONWEALTH LAND TITLE
INSURANCE COMPANY,

Plaintiff,
v.

FEDEX OFFICE AND PRINT SERVICES,
INC.; WINSTON LUM; KAUSHAL
NIROULA; JAY CHANDRAKANT
SHAH; MELVIN LEE EMERICH;
MARTINI CHNOOGLE; GRACHELLE
LANGUBAN; and MERCHANTS
BONDING COMPANY; and DOES 1-24,

Defendants.

SHIRLEY S. HWANG,
Plaintiff,
ve

FEDEX OFFICE AND PRINT SERVICES,
INC.; WINSTON LUM; KAUSHAL
NIROULA; JAY CHANDRAKANT
SHAH; MELVIN LEE EMERICH;
GRACHELLE LANGUBAN; and
MARTINI & CHNOOGLE; and DOES 1-
50,

Cross-Defendants.

LEAD CASE NO. CGC-10-503332

(Consolidated for all purposes with CGC-11-
512102)

DEFENDANT WINSTON LUM’S
REQUEST FOR JUDICIAL NOTICE IN
SUPPORT OF MOTION FOR RELIEF
FROM ENTRY OF DEFAULT

Date: May 23. 2012
Time: 9:30 a.m.

Dept.: 302

Judge: Hon. Harold E. Kahn

BY FAX

oh 5304 10.Jurp request judicia] notice 4.27.}2.wpd

RIN DEFENDANT'S MOTION FOR RELIEF FROM ENTRY OF DEFAULTCANNATA, CHING & O'TOOLE LLP

ATTORNEYS AT LAW
100 Pine Street, Suite 350

San Francisco, CA94111
TEL: (415)400-8900 » Fax: (415)409-B905

20 Oe YW DAA BF wn

BS a ea a a sk
YA wD FF YW NY SE GO

18

TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD HEREIN:

PLEASE TAKE NOTICE that defendant Winston Lum hereby requests, pursuant to
California Evidence Code sections 451 and 452, that this Court take judicial notice of the
following:

Attached hereto as Exhibit 1 is a true and correct copy of plaintiff Commonwealth's
Complaint, filed on September 8, 2010.
Attached hereto as Exhibit 2 is a true and correct copy of defendant Winston Lum’s

Asnwer to Commonwealth’s Complaint, filed on December 20, 2010.

Attached hereto as Exhibit 3 is a true and correct copy of Judge Woolard’s ruling on

defendant FedEx Office’s demurrer and motion to strike Cammonwealth’s Complaint, as obtained

from the register of actions in this matter, ordered on January 5, 2011.

Attached hereto as Exhibit 4 is a true and correct copy of plaintiff Commonwealth's First
Amended Complaint, filed on January 7, 2011.

Attached hereto as Exhibit 5 is a true and correct copy of plaintiff Commonwealth's
request for entry of default as to defendant Winston Lum and others, filed on July 11, 2011.

Attached hereto as Exhibit 6 is a true and correct copy of this Court’s order granting a stay

of all discovery pending resolution of parallel criminal proceedings, filed on March 17, 2011.

“UA
\ : 3
Dated: April 30, 2012 ican CHING & O’TOOLE LLP
\

CHAEL M. CHING
ttorneys for Defendant Winston Lum

<2: 530410,lom.request judicial novice 4.27, 12.wpd
RJN DEFENDANT’S MOTION FOR RELIEF FROM ENTRY OF DEFAULTEXHIBIT 1oo YD DH HW & YW DH =

BM RP RP WR RN Re He a ea a
ea aA Go BF Yb Yb &§ 6G 6 wm ID AH eB DH FB SG

EDWARD A. KUNNES (SBN 160632) SUNMAAONS ISSUED
PETER K. WOLFF, JR. (SBN 142426)

FIDELITY NATIONAL LAW GROUP I
100 North Wiget Lane, Suite 150 E
‘Walnut Creek, CA 94598 San Francisce County Sunerior Court
Telephone: (925) 930-9550 _
Facsimile: (925) 930-9588 SEP ~ 8 2010
Attorney for Commonwealth Land Title CLERK OF THE COURT
Insurance Company BY jopuly

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SAN FRANCISCO
COMMONWEALTH LAND TITLE } CASE NO. - 32
INSURANCE COMPANY, eec-10 “503334
Plaintiff,
COMPLAINT FOR DAMAGES: DECEIT;

vs. CONVERSION; NEGLIGENCE PER SE;
NEGLIGENCE; RESPONDEAT

FEDEX OFFICE AND PRINT SERVICES, ) SUPERIOR; and MISREPRESENTATION
INC.; WINSTON LUM; BRUNO
AESCHBACHER; STEPHEN
FELLMANN; KAUSHAL NIROULA; JAY ) .
CHANDRAKANT SHAH; ELVIA J ~ASE MANAGEMENT CONFERBINCE SB
PALIMINO; MORAD AFRAIMI; MELVIN}

LEE EMERICH; MARTINI &

et

CHNOOGLE; GRACHELLE LANGUBAN) FEB 1 0 2011 -Q MAM
and DOES 1-25. )
)
Defendants. } DEPARTMENT 222

Plaintiff Commonwealth Land Title Company (hereinafter “Commonwealth” or
“Plaintiff”), for its Complaint against defendants FEDEX OFFICE AND PRINT SERVICES,
INC., WINSTON LUM, BRUNO AESCHBACHER, STEPHEN FELLMANN, KAUSHAL
NIROULA, JAY CHANDRAKANT SHAH, ELVIA PALIMINO, MORAD AFRAIMI,
MELVIN LEE EMERICH, and GRACHELLE LANGUBAN alleges as follows:

1, Plaintiff Commonwealth is, and at all times mentioned herein was, a
corporation duly organized and existing under and by virtue of the laws of the State of
Nebraska and authorized to do business in the State of California.

2. Defendant FedEx Office and Print Service, Inc. is, and at all times mentioned

ole Complaint for Damageseo we a RD A FF YN

herein was, a corporation organized and existing under and by virtue of the laws of the
State of Texas and authorized to do business in the State of California.

3. Plaintiff is informed and believes and thereon alleges that defendant WINSTON
LUM (“LUM”) is, and at all time herein mentioned was, a resident of San Francisco
County, California.

4. Plaintiff is informed and believes and thereon alleges that defendant BRUNO
AESCHBACHER (“AESCHBACHER’) is, and at all times herein mentioned was, a
resident of San Francisco County, California.

5. Plaintiff is informed and believes and thereon alleges that defendant STEPHEN
FELLMANN (“FELLMANN?”) is, and at all times herein mentioned was, a resident of
San Francisco County, California.

6. Plaintiff is informed and believes and thereon alleges that defendant
KAUSHAL NIROULA (“NIROULA’) is, and at all times herein mentioned was, a
tesident of San Francisco County, California.

7. Plaintiff is informed and believes and thereon alleges that defendant JAY
CHANDRAKANT SHAH (“SHAH”) is, and at all times herein mentioned was, a resident
of Santa Clara County, California.

8. Plaintiff is informed and believes and thereon alleges that defendant ELVIA
PALIMINO (“PALIMINO”) is, and at all times herein mentioned was, a resident of Santa
Clara County, California.

9. Plaintiff is informed and believes and thereon alleges that defendant MORAD
AFRAIMI (“AFRAIMI”) is, and at al] times herein mentioned was, a resident of San
Francisco County, California.

10. Plaintiff is informed and believes and thereon alleges that defendant MELVIN
LEE EMERICH (“EMERICH”) is, and at all times herein mentioned was, a resident of
Santa Cruz County, California.

11. Plaintiff is informed and believes and thereon alleges that defendant MARTINI
& CHNOOGLE is, and at all times herein mentioned was a Nevada corporation

-2- Complaint for Damagesoe YD mA YN

SB 8b 2S

14

established by EMERICH for the purpose of distributing wrongfully obtained loan
proceeds.

12. Plaintiff is informed and believes and thereon alleges that defendant
GRACHELLE LANGUBAN (“LANGUBAN") is, and at ail times herein mentioned was,
a resident of San Francisco County, California. Plaintiff is informed and believes and
thereon alleges that LANGUBAN was at all times relevant a notary employed by FedEx
Office and Print Service, Inc. at a retail office in San Francisco, CA.

13. The true names and capacities, whether individual, corporate, associate, or
otherwise, of the defendants named herein as DOES 1 through 25, inclusive, and each of
them, are unknown to Plaintiffs, who therefore sues them by such fictitious names (“DOE
Defendants”). Plaintiffs ate informed and believe and thereon allege that each of the DOE
Defendants is in some manner responsible for the actions and damages alleges in this
complaint. When Plaintiff ascertains the true names and capacities of the DOE
Defendants, it will seek leave of Court to amend this Complaint to identify them by their
true names and capacities.

14. Plaintiff is informed and believes and thereon alleges that at all times herein
mentioned, defendants were the agents, servants, or employees of each of the other
defendants and that all of the things alleged to have been done by each defendant were
done in that defendant’s capacity as agent of the other defendants, within the scope of
defendants’ authority as agent, servant, or empioyee, and with the permission and consent
of the other defendants.

15. Jurisdiction and venue are proper as the contracls, promissory notes, grant
deeds and deeds of trust at issue were executed in the City and County of San Francisco,
and the subject properties are located in the City and County of San Francisco.

First Cause of Action (Deceit)
(as against Defendants LUM, NIROULA, SHAH and EMERICH)

16. Commonwealth hereby incorporates by reference each and every allegation

contained in Paragraphs 1 through 15, herein above, as though each such allegation were set

3+ Complaint for Damagesforth herein in full.

17, On or about January 14, 2009, Defendants LUM, NIROULA, and SHAH caused
to be recorded forged grant deeds purporting to transfer title in the real properties commonly
known as Condominium Units 4802, 4902 and 5501 located at 425 First Street, San
Francisco, California (the “Properties”), from Shirley S. Hwang, Trustee of the Trust of
Shirley S. Hwang dated July 1, 1998 (hereinafter referred to as “Hwang”), to Defendant
LUM. True and correct copics of said purported grant deeds are attached hereto as Exhibit
“1,” Exhibit “2,” and Exhibit “3.”

18. Plaintiff is informed and believes that Hwang had no knowledge of the forgeries,
did not consent to the transfer of the Properties to LUM and that Defendants LUM,
NIROULA and SHAH had no authority to transfer the Properties. Defendant LUM, at all
relevant times, had no ownership or any other interests in the Properties.

19. Defendants LUM, NIROULA, SHAH and EMERICH opened an escrow account
for the financing of the Properties. Defendant EMERICH provided escrow instructions,
formed MARTINI & CHNOOGLE, and established a bank accounts in the name of
MARTINI & CHNOOGLE to receive loan proceeds.

20. Defendants LUM, NIROULA, SHAH and EMERICH, and each of them,
represented to Plaintiff through its escrow agent that Defendant LUM was the true and
correct owner of the Properties. Defendants LUM, NIROULA, SHAH and EMERICH, and
each of them, were aware that Plaintiff's escrow agent belicved that the grant decds had been
signed by Hwang and were valid grant deeds, and by their words and conduct expressly and
impliedly represented that Defendant LUM was the owner of the Properties.

21. The representations and nondisclosures concerning the grant deeds and escrow
instructions were therefore misleading, or were rendered misleading in light of the
representations these defendants made. These misrepresentations and nondisclosures were
material, were likely to mistead the escrow agent and did in fact mislead the escrow agent
inducing it obtain policies of title insurance by Plaintiff in favor of the beneficial owners of

the deeds of trust. Furthermore, the lenders made it a canditicn of the loan to obtain policies

~4- Complaint for DamagesoD we a DH eR WYN

wom Me MN RMN ON NR em
Se aah F BN |= Ss Oo we WD mH eF BN

of title insurance, and therefore would not have loaned the money without the issuance of the
policies of title insurance.

22. Plaintiff is informed and belicve and thereon allege that lenders without any
knowledge of the forgeries, agreed to loan money in the aggregate amount of
$2,2,000,000.00. True and correct copies of the deeds of trust recorded against Units 4802,
4902 and 5501 are attached hereto as Exhibit “4,”Exhibit “5,” and Exhibit “6,” respectively.

23. Plaintiff, at the time these misrepresentations and nondisclosures of material facts
occurred, were ignorant of the existence of the true facts that these defendants, and each of
them, failed to disclose. If Plaintiff had been aware of the fact that the signatures were
forgeries, obtained without consent or authority of Hwang, Plaintiff would not have issued
the policies of title insurance. Accordingly, Plaintiff relied on these defendants’
misrepresentations in issuing the policies of title insurance. True and correct copies of the
title policies for Units 4802, 4902 and 5501 are attached hereto as Exhibit “7,” Exhibit “8.”
and Exhibit “9,” respectively.

24, On March 20, 2009, Hwang filed two separate lawsuits to quiet title as to the
Properties in San Francisco County Superior Court, Case No. CGC-09-486395 and Case No.
CGC-09-486391. Truc and correct copies of the complaints in these actions are attached
hereto as Exhibit “10” and Exhibit “11.”

25. Subsequent investigations by the San Francisco Police Department Economic
Crimes Unit has revealed that these defendants collectively conspired to forge the grant deeds
in an attempt to wrongfully convey legal title to the Properties to Defendant LUM so that
these defendants and other defendants could obtain money from loan proceeds. The police
investigation resulted in felony criminal complaints filed against against LUM, NIROULA,
SHAH and EMERICH in the Superior Court of the State of California City and County of
San Francisco Court Numbers 10009191, 10009193, and 10003838. A true and correct copy
of the firsi amended felony complaint in these actions is attached hereto as Exhibit “12.”

26. Asa direct result and consequence of these fraudulent and criminal actions by

these defendants, Commonwealth was compelled to pay $2,306,820.39 to the lenders

-5- Complaint for Damagesoo NW A

pursuant to the policies of title insurance. A true and correct copy of the wires to the lenders
by Plaintiff in the aggregate amount of $2,306,820.39 is attached hereto as Exhibit “13.”

27. Asa proximate result of these defendants’ misrepresentations and nondisclosures,
Commonwealth has been damaged in the sum of $2,306,820.39, at the legal rate of 10% per
annum, or $632.00 per diem, from and after July 19, 2010.

28. The aforementioned conduct of these defendants was intentional
misrepresentations, acts of deceit, or concealment of material facts known to them with the
intention on their part of thereby depriving Commonwealth of property or legal rights or
otherwise causing injury, and was despicable conduct that subjected Commonwealth to a
cruel and unjust hardship in conscious disregard of Commonwealth’s rights, so as to justify
an award of exemplary and punitive damages.

WHEREFORE, Plaintiff prays for judgment against thesc defendants, and each of
them, as set forth below.

Second Cause of Action (Conversion)
(as against Defendants LUM; AESCHBACHER; FELLMANN; NIROULA; SHAH;
PALIMINO; AFRAIMI; EMERICH)

29. Commonwealth hereby incorporates by reference each and every allegation
contained in Paragraphs | through 28, herein above, as though each such allegation were set
forth herein in full.

30. Commonwealth is subrogated to the rights and remedies of the lenders in law and
by contract under the policies of title insurance by the payment it made to the lenders
pursuant to the policies of title insurance.

31. On or about March 6, 2009, escrow, having bcen instructed, disbursed the loan
proceeds as follows:

a) $868,845.00 to Defendant LUM in the name of a bogus corporation;

b) $250,000.00 to Defendant LUM in his name; and

c) $601,069.00 to MARTINI & CHNOOGLE.

32. Based on the investigation by the San Francisca Police Department Economic

Crimes Unit, and specifically the tracing of funds from the cscrow to various parties, Plaintiff

-6- Complaint for Damagesis informed and believes and thereon allege that the Joan proceeds that went to LUM in the
name of the bogus corporation were directed ta AESCHBACHER and FELLMANN.

33. Plaintiff is informed and believes that the loan proceeds that went to MARTINI
& CHNOOGLE went to Defendant SHAH in the name of a bogus corporation in the amount
of $291,103.00; went to Defendant SHAH to directly pay a loan of an institutional lender in
the amount of $160,000.00; went to Defendant EMERICH in the amount of $62,750.00; went
to Defendant AFRAIMI in the amount of $15,000.00; and, went to Defendant PALIMINO in
the amount of $14,000.00.

34. The obtaining of these loan proceeds by these defendants was not acquired
lawfully and was a conversion of moncy from the date they were disbursed by escrow. Asa
proximate result of these defendants” conversion Plaintiff suffered damages in the amount of
$1,719,914.00.

35. These amount obtained by these defendants, and each of them, are wrongfully
detained, and accordingly, each of these defendants are an involuntary trustee of the thing
gained for the benefit of Plaintiff.

36. The defendants’ acts alleged above were willful, wanton, malicious, and
oppressive, were undertaken with the intent to defraud, and justify the awarding of
exemplary and punitive damages.

WHEREFORE, Plaintiff prays for judgment against these defendants, and each of
them, as set forth below.

Third Cause of Action (Negligence Per Se)
(as Against Defendant LANGUBAN)

37. Commonwealth hereby incorporates by reference each and every allegation
contained in Paragraphs 1 through 36, herein above, as though each such allegation were set
forth herein in full.

38. At all relevant times California Civil Code §§ 1185-1189 provided that the person
whose signature is acknowledged must perscnally appear before the Notary Public as part of

the acknowledgment process.

-7- Complaint for Damages39, Defendant LANGUBAN holds herseif out as a California notary public with
commission number 1727582 registered in Los Angeles County. Plaintiff is informed and
believes and thereon allege that Defendant LANGUBAN does not have a notary bond as
required by Cal Government Code §8212. Plaintiff is informed and believes and thereon
allege that at all relevant times, LANGUBAN was employed by Defendant FEDEX OFFICE
AND PRINT SERVICES, INC., as a notary and performed the notarization of the purported
grant deeds at a retail store of her employer FEDEX OFFICE AND PRINT SERVICES, INC.
located in San Francisco, California.

40. Defendant LANGUBAN violated California Civil Code §§1185-1189 when she
acknowledged the purported signatures of Hwang who did not appear before her.

4. Plaintiff is within the class of persons and entities sought to be protected by
California Civil Code §§1185-1189, which is intended to prevent the recording of fraudulent
documents.

42. Asa direct and proximate result of the statutory violation by LANGUBAN,
LANGUBAN attached a notary acknowledgment to fraudulent grant deeds. Plaintiff
reasonably relied on the notarized documents and as a direct result was damaged in the sum
of $2,306,820.39, at the legal rate of 10% per annum, or $632.00 per diem, from and after
Inly 19, 2010.

WHEREFORE, Plaintiff prays for judgment against this defendant as set forth below.

Fourth Cause of Action (Negligence)
(as against defendant LANGUBAN)

43. Commonwealth hereby incorporates by reference each and every allegation
contained in Paragraphs 1 through 42, herein above, as though each such allegation were set
forth herein in full.

44. Plaintiff is informed and believes and thereon alleges that Defendant
LANGUBAN breached a duty of care by failing to fully and faithfully discharging the duties
required of a notary public, including a duty of due diligence, honest and integrity.
Specifically, Defendant LANGUBAN engage in the following negligent misconduct: (1)

-8- Complaint for DamageseC ew NU A mH Se WYN

- 3

12

obtain a notary bond; (3) negligently failing to identify the party executing the instruments,
(4) negligently misusing her official notary stamp and seal; (5) negligently notarizing a forged
signature; or alternatively, (6) negligently allowing her a third party to use her official notary
stamp and seal; and, (7) negligently allowing her official notary stamp and seal to placed in
an open, unlocked location so that it could improperly be used by others.

45. Plaintiff is informed and believes and thereon alleges that each of the above
actions were taken by LANGUBAN within a retail office of FEDEX OFFICE AND PRINT
SERVICES, INC. under the supervision of FEDEX OFFICE AND PRINT SERVICES, INC.
The oversight of LANGUBAN by FEDEX OFFICE AND PRINT SERVICES, INC. was so
careless that it amounted to negligence, thereby allowing LANGUBAN to endanger the
public by allowing her notary stamp and seal to be affixed to forged instruments.

46. Asa direct and proximate result of the above negligence by Defendant
LANGUBAN and FEDEX OFFICE AND PRINT SERVICES, INC. have been damaged in
the sum of $2,306,820.39, at the legal rate of 10% per annum, or $632.00 per diem, from and
afier July 19, 2010.

Fifth Cause of Action (Respondeat Superior)
(as against Defendant FEDEX OFFICE AND PRINT SERVICES, INC.)

47. Commonwealth hereby incorporates by reference each and every allegation
contained in Paragraphs | through 46, herein above, as though each such allegation were set
forth herein in full.

48. Plaintiff is informed and believes and thereon allege that at all times herein
mentioned, defendant LANGUBAN was the agent and employee of defendant FEDEX
OFFICE AND PRINT SERVICES, INC. and , in doing the acts herein described and referred
to, was acting in the course and within the scope of her authority as agent and employee, and
in the transaction of the business of the employment or agency. Defendant FEDEX OFFICE
AND PRINT SERVICES, INC. is therefore, liable to Plaintiff for the acts of LANGUBAN as
heretofore alleged.

WHEREFORE, Plaintiff prays for judgment against this defendant as set forth below.

-9- Complaint for DamagesBR Bw oN

Sixth Cause of Action (Misrepresentation)
{as against Defendant LANGUBAN)

49. Commonwealth hereby incorporates by reference each and every allegation
contained in Paragraphs | through 48, herein above, as though each such allegation were set
forth herein in full.

50. On or about January 14, 2009, LANGUBAN, expressly and impliedly
represented to Plaintiff and its agent that Hwang had present herself to LANGUBAN and
provided satisfactory evidence to LANGUBAN that Hwang was the person executing the
grant deeds to the Properties by notarizing the grant deeds which purportedly transferred the
Properties from Hwang to LUM. LANGUBAN either knew these facts not to be true or
perform the notarizations recklessly and in conscious disregard of her duties as a notary.

5. Plaintiff is informed and believes based on the police investigation, Plaintiff's
own investigation, the civil complaints by Hwang and the DA’s criminal complaint, and
thereon allege that the grant deeds were forgeries and Hwang did not give her authorization
for anyone to sign the grant deeds.

52. By LANGUBAN’s conduct through notarizing the grant deeds expressly and
impliedly represented that the grant deeds were valid. The representations concerning the
grant deeds were misleading. These misrepresentations were material, were likely to mislead
Plaintiff, its agent, or someone similarly situated, and did in fact mislead Plaintiff concerning
the validity of the purported grant deeds.

$3. LANGUBAN was awarc that Plaintiff, Plaintiff's agent, or someone similarly
situated, might reasonably believe that the grant deeds were valid instruments based on the
notarizations. The representations were made with the intent to induce those relying upon
title of the Properties to act as though the instruments transferring tite io LUM were in fact
valid.

54. Plaintiff, at the time these misrepresentations occurred, was ignorant of the
existence of the true facts. Had Plainiiff been aware of the fact that the owner, Hwang, did

not sign the grant deeds and did not authorize the transfer of the Properties, Plaintiff would

-10- Complaint for DamagesCoan Dn Y Bb wWwN |

ou = oS

13

not have insured title to the Ienders.

55. Asa proximate result of each of LANGUBAN’s misrepresentations, Plaintiff has
been damaged in an amount of $2,306,820.39, at the legal rate of 10% per annum, or $632.00
per diem, from and after July 19, 2010.

56. The aforementioned conduct of LANGUBAN were intentional misrepresentations
of material facts known to her with the intention on her part of thereby depriving Plaintiff of
property or legal rights or otherwise causing injury. and was despicable conduct that
subjected Plaintiff to a cruel and unjust hardship in conscious disregard of Plaintiff's rights,
so as to justify an award of exemplary and punitive damages.

WHEREFORE, Commonwealth prays judgment against the Defendants as follows:

For the All Causes of Action:

1, For general damages in an amount $2,306,820.39, at the legal rate of 10% per
annum, or $632.00 per diem, from and after July 19, 2010;

2. For costs of suit herein incurred;

3. For such other and further relief as the court may deem proper,

For the First, Second and Sixth Causes of Action:

4. For punitive damages to deter and punish Defendants for their malicious and
intentional conduct; and

For the Second Cause of Action:

5, For a judgment declaring that the defendants who received Ioan proceeds hold
those proceeds as an involuntary trustee in constructive trust for the benefit of Plaintiff.
Dated: 9-7-2070

EDWARD A. KUNNES

Attorneys for Commonwealth Land Title
Insurance Company

-i- Complaint for DamagesEXHIBIT 2CANNATA, CHING & O'TOOLE LLP

ATTORNEVS AT LAW
100 Pine Strest, Sulta 1775

San Francise c, GA94411
TEL tatsyenn-ase0 » Fax: (415)408-8904 _

Ne a

1 || THERESE Y. CANNATA (SBN 88032)
MICHAEL M. CHING (SBN 209426)
TUNA KIM (SBN 230100)

CANNATA, CHING & O°TOOLE LLP
400 Pine Street, Suite 1775

San Francisco, CA 94111

Superior Court of Caiffomia
rae CA eI ANNtY of Ban Franciace

2
3
4
Facsimile: (415) 409-8904 DEC 9 0 2010
5
Attomeys for Defendant
6|| WINSTON LUM WAT
7 Deputy Clerk
s| IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
9 IN AND FOR THE COUNTY OF SAN FRANCISCO
10
11 | COMMONWEALTH LAND TITLE CASE NO. CGC-10-503332
INSURANCE COMPANY,
12 : DEFENDANT WINSTON LUM’S
Plaintiff, ANSWER TO PLAINTIFF'S UNVERIFIED
13 COMPLAINT y
vs.

4
FEDEX OFFICE AND PRINT SERVICES,
15 | INC.; WINSTON LUM; BRUNO
AESCHBACHER; STEPHEN
16) FELLMANN; KAUSHAL NIROULA; JAY
CHANDRAKANT SHAH; ELVIA
7 PALIMING: MORAD AFRAIMI MELVIN
EMERICH; MARTINI
18 GHNOOGLE: GRACHELLE & ANGUBAN,
and DOES 1-25,

Defendants.
20 /

BY FAX

Defendant Winston Lum (“Lum” or “defendant”), individually, answers the unverified
Complaint ("Complaint") of Commonwealth Land Title Insurance Company (“Plaintiff”) as
follows:

GENERAL DENIAL,

Lum denies, generally and specifically, all and singularly, each and every allegation
26
contained in the Complaint as they apply to this answering defendant, and each applicable cause

of action therein, and specifically denies that Lum is Hable to Plaintiff under the theories or in the
28
manner set forth in the Complaint. Lum further denies that Plaintiff had been damaged or injured
S201 um anewes 19 compat. wpe
DEFENDANT WINSTON LUM’S ANSWER 70 ER TO UNVERIFIED COMPLAINTCANNATA, CHING & O'TOOLE LLP

ATTORNEYS AT LAW
100 Pine Street, Sulte 1775

San Franclac 0, CA
TEL: (415)409-BB00 » Fax: (415)408-B804

~
_

as alleped or in any sum or sums as a sesult of any conduct of these defendants, or by reason of
any act or omission by Lum.
AFFIRMATIVE DEFENSES

1. ASA FIRST SEPARATE AND AFFIRMATIVE DEFENSE, Lum alleges that the
Complaint, and each and every cause of action set forth therein, fails to state a claim upon which
relief may be granted.

2. AS A SECOND SEPARATE AND AFFIRMATIVE DEFENSE, ‘Lum alleges that
Plaintiff has suffered no damages as an actual or proximate result of any acts or omissions
attributable to Lum.

3. AS A THIRD SEPARATE AND AFFIRMATIVE DEFENSE, Lum alleges that
Plaintiff is barred from any recovery on any alleged cause of action in the Complaint by reason of
their own negligence and other superseding conduct relating to the matters set forth in the
Complaint, Said acts or omissions by Plaintiff contributed substantially or completely to any
harm they may have suffered, and Lum is entitled to have any linbility which may be found
against him offset by the comparative, contributory and/or superseding Fault of Plaintiff.

4. AS A FOURTH SEPARATE AND AFFIRMATIVE DEFENSE, Lum alleges that
if Plaintiff sustained any of the Loss or damages alleged in the Complaint, such loss ar damages
were caused, entirely or in part, by the acts and/or omissions of third persons or entities, other
than Lam, over whom Lum had or has no direction or control. Any such loss or damages
sustained by Plaintiff should therefore be apportioned among those responsible parties, according
to cach party’s comparative and proportionate fault or liability.

5. AS A FIFTH SEPARATE AND AFFIRMATIVE DEFENSE, Lum alleges that

Plaintiff has failed to timely take action to assert their rights, if any, with resulting substantial

24
25
26
27
28

prejudice to Lum, and therefore Plaintiff's claims are barred by the doctrine of laches.

6. AS A SIXTH SEPARATE AND AFFIRMATIVE DEFENSE, Lum alleges that
Plaintiff is estopped by law or by conduct from maintaining the action filed in this case.

2 AS A SEVENTH SEPARATE AND AFFIRMATIVE DEFENSE, Lum alleges
that Plaintiff waived their right to maintain the action filed in this case.

22. 590610. sem answes to complaint. wp
DEFENDANT WINSTON LUM’S ANSWER TO UNVERIFIED COMPLAINTCaNNATA, CHING & O'TOOLE LLP

ATTORNEYS AT LAW

TEL: (455)408-G000 » Fax: (455)409-B004

ea a Oh e BW oN

roe
- Oo

2

. ~~

8. AS AN BIGHTH SEPARATE AND AFFIRMATIVE DEFENSE, Lum alleges that
Plaintiff, by their own acts and conduct, have acted with unclean hands and are estopped from
recovering any sum whatsoever from Lum.

% AS ANINTH SEPARATE AND AFFIRMATIVE DEFENSE, Lum alleges that
Plaintiff's Complaint and the claims alleged therein are barred by the applicable statutes of
limitations, including but nat limited to Code of Civil Procedure sections 337, 338, 339, 340, 343
and 335.1.

10. AS A'TENTH SEPARATE AND AFFIRMATIVE DEFENSE, Lum alleges that
Plaintiff's purported damages are vague, uncertain and speculative, and as a result not
recoverable.

11. AS AN ELEVENTH SEPARATE AND AFFIRMATIVE DEFENSE, Lum alleges
that by failing to exercise reasonable care to mitigate and minimize the alleged damages, Plaintiff
unnecessarily compounded the alleged damages and prejudiced Lum, and Plaintiff's alleged
damages, if any, are reduced and/or abated to the extent Plaintiff have failed to mitigate said
alleged damages.

12. AS A TWELFTH SEPARATE AND AFFIRMATIVE DEFENSE, Lum alleges
that Plaintiff made independent and informed decisions concerning the maticrs alleged in the
Complaint which caused or were the substantial cause of Plaintiff's purported damages.

13. AS A THIRTEENTH SEPARATE AND AFFIRMATIVE DEFENSE, Lum alleges
that Plaintiff assumed the risk of all or part of the matters alleged in the Complaint, including the
risk of the alleged damages set forth in the Complaint.

14. AS A FOURTEENTH SEPARATE AND AFFIRMATIVE DEFENSE, Lum
alleges that Plaintiff lack standing and/or capacity to raise cach and every cause of action in the
Complaint.

15. AS A FIFTEENTH SEPARATE AND AFFIRMATIVE DEFENSE, Lum alleges
thal Plaintiff failed to state their claim with sufficient particularily to enable or permit him to raise
all appropriate defenses. Lum thus reserve the right to amend their answer to assert additional
defenses as the discovery of facts sufficient to support such defenses become known. .

23. SOU Lun answer to contains)
DEFENDANT WINSTON LUM’S ANSWER TO UNVERIFIED COMPLAINTATTORNEYS AT LAW
100 Pine Street, Sulla 1775

San Francisc 0, CAB4113
TEL: (418)408-B800 = Fax: (415}409-8504

CANNATA, CHING & O'TOOLE LLP

oem uw Aw B® bY Ne

Sa as
Oo & 2 ao & &@ YD NY Sf

20

WHEREFORE, Winston Lum prays for judgment as follows:

1. That Plaintiff take nothing by reason of the Complaint;
2. For dismissal of the Complaint with prejudice;
3. For attomeys fees and costs of suit in this action; and
4. For such other and further relief that this court deems just and proper.
~
Dated: December 20, 2010 IATA, CHING & O*TOOLE LLP

formeys for Defengant Winston Lum

“4 SOS Lun seswes 1p comptaint. wpe
DEFENDANT WINSTON LUM'S ANSWER TO UNVERIFIED COMPLAINTa.
4 x
4 S
4 2e8
a Rre
CO ws
Psrac
a oase
Ofacg
sired
onus:
gages
Zeros
reazs
pws
Oezts
a o22
q ene
z a
z a
= e
oO

wera nA nH F WB NY

10

PROOF OF SERVICE
i declare that I am employed in the County of San Francisco, State of Californis. 1am
over the age of eighteen (18) years and not a party to the within entitled cause, and my business
address is Cannata, Ching & O'Toole LLP, 100 Pine Street, Suite 1775, San Francisco, CA
94111.

On December 20, 2010, I served the following documents in the manner(s) selected:

1 DEFENDANT WINSTON LUM'S ANSWER TO PLAINTIFF'S
UNVERIFIED COMPLAINT

[xX] (U.S. MAIL) placing truc and correct copies thereat enclosed in a sealed envelape(s),
mailed in the United States mail with first class postage fully prepaid, at San Francisca,
California, addressed as set forth below:

Via U.S, Mail
Edward A. Kunnes David A. Clinton
Fidelity National Law Group Clinton & Clinton
100 N. Wiget Lane, Suite 150 100 Oceangate, 14th Floor
Walnut Creek, CA 94598 Long Beach, CA 90802
Attorney for Plaintiff Attorney for Defendant FedEx Office and

Print Services, Inc.

1 declare that the foregoing is true and correct and that this declaration was executed in

San Francisco, California, on December 20, 2010.

Jessica FoscanoQOEXHIBIT 3CGC-10-503332 Ree Page 1 of 1

[AN-05-201t [LAW AND MOTION 302, DEFENDANT FEDEX OFFICE AND PRINT
ISERVICES, INC.'S MOTION TO STRIKE PORTIONS OF PLAINTIFF,
COMMONWEALTH LAND TITLE INSURANCE COMPANY'S
UNVERIFIED COMPLAINT. NO APPEARANCE ON THIS MATTER. THE)
COURT ADOPTED ITS TENTATIVE RULING - GRANTED WITH 10
DAYS LEAVE TO AMEND. PLAINTIFFS MUST CLARIFY WHAT
ICAUSES OF ACTION ARE ASSERTED AGAINST FEDEX ON A
IRESPONDEAT SUPERIOR THEORY SUCH THAT IT IS CLEAR
AGAINST WHICH DEFENDANTS PLAINTIFF ASSERTS A CLAIM FOR
PUNITIVE DAMAGES. (PREVAILING PARTY TO PREPARE ORDER.)
JUDGE: CHARLOTTE WALTER WOOLARD, REPORTER: KENT
IGUBBINE, CSR #5797

TAN-05-2011 [LAW AND MOTION 302, DEFENDANT FEDEX OFFICE AND PRINT
ISERVICES, INC.'S DEMURRER TO THE COMPLAINT OF PLAINTIFF,
COMMONWEALTH LAND TITLE INSURANCE COMPANY, NO
[APPEARANCE ON THIS MATTER. THE COURT ADOPTED ITS
TENTATIVE RULING - SUSTAINED IN PART AND OVERRULED IN
PART. IF PLAINTIFF WISHES TO ASSERT A CAUSE OF ACTION
AGAINST FEDEX, THE HEADING FOR EACH CAUSE OF ACTION
SHOULD UNAMBIGUOUSLY SO STATE. (CRC 2.112.) DEMURRER
OVERRULED AS TO 3RD CAUSE OF ACTION. DEMURRER
ISUSTAINED WITH 10 DAYS LEAVE TO AMEND AS TO 4TH AND STH
ICAUSES OF ACTION. IF THE 4TH CAUSE OF ACTION IS ALLEGED
AGAINST FEDEX, PLAINTIFF MUST ALLEGE FACTS THAT SHOW A
DUTY TO SUPERVISE/OVERSEE WAS OWED, THE DUTY WAS
BREACHED, HOW IT WAS BREACHED, AND THE BREACH WAS THE
FACTUAL AND PROXIMATE CAUSE OF DAMAGES TO PLAINTIFF.
ITHE STH CAUSE OF ACTION MUST SPECIFY WHICH ACTS OF
LANGUBAN IT IS ASSERTING FEDEX HAS LIABILITY FOR. (MOVING
PARTY TO PREPARE A PROPOSED FORM OF ORDER.) JUDGE:
CHARLOTTE WALTER WOOLARD, REPORTER: KENT GUBBINE, CSR

#5797
[PAN-05-2011 MINI-MINUTES FOR JAN-05-2011 9:30 AM FOR DEPT 302
NAN-05-2011 |(MENI-MINUTES FOR JAN-05-2011 9:30 AM FOR DEPT 302 |

AN-05-2011 || MINI-MINUTES FOR JAN-05-2011 9:30 AM FOR DEPT 302

http:/Avebaccess.sftc.ory/Scripts/Magic94/mgrqispi94.d1l?APPNAME=lS&PRGNAME-... 4/27/2012EXHIBIT 4EDWARD A. KUNNES (SBN 160632)

PETER K. WOLFF, JR. (SBN 142426)
FIDELITY NATIONAL LAW GROUP FI L E, D
100 North Wiget Lane, Suite 150 Seeetion Court of Califomin
Walnut Creek, CA 94598 in Francisco
Telephone: (925) 930-9550
Facsimile: (925) 930-9588 JAN 07 2011
Attorney for Commonwealth Land Title CLERK OF THE COURT
Insurance Company BY: a

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SAN FRANCISCO

COMMONWEALTH LAND TITLE CASE NO, CGC10503332

INSURANCE COMPANY,

Plaintiff,

FIRST AMENDED COMPLAINT FOR
DAMAGES: DECEIT; CONVERSION;
UNJUST ENRICHMENT; NEGLIGENCE
PER SE; SURETY BOND; NEGLIGENCE;
and MISREPRESENTATION

VS.

)

)

)

)

}

}

FEDEX OFFICE AND PRINT SERVICES, }
INC., WINSTON LUM; KAUSHAL )
NIROULA; JAY CHANDRAKANT )
SHAH; ELVIA PALOMINO, MORAD )
‘AFRAIM!: MELVIN LEE EMERICH; )
MARTIN! & CHNOOGLE; GRACHELLE )
LANGUBAN; MERCHANTS BONDING )
COMPANY, and DOES 1-25. )
)

)

)

Defendants.

Plainti(f Commonwealth Land Title Company (hereinafter “Commonwealth” or
“Plainuiff’), for its Complaint against defendants FEDEX OFFICE AND PRINT SERVICES,
INC., WINSTON LUM. KAUSHAL NIROULA. JAY CHANDRAKANT SHAH, ELVIA
PALOMINO, MORAD AFRAIML, MELVIN LEE EMERICH. GRACHELLE LANGUBAN
and MERCHANTS BONDING COMPANY alleges as follows:

1, Plaintiff Commonwealth is, and at all times mentioned herein was, a corporation
duly organized and existing under and by virtue of the laws of the State of Nebraska and
authorized to do business in the State of California.

2. Defendant FEDEX OFFICE AND PRINT SERVICE, INC. is, and at ali times

-1- First Amended Complaint for Damagesa

mentioned herein was. a corporation organized and existing under and by virtue of the laws
of the State of Texas and authorized to do business in the State of California.

3. Plaintiff is informed and believes and thercon alleges that defendant WINSTON
LUM (“LUM”) is. and at all time herein mentioned was, a resident of San Francisco County,
California.

4, Plaintiff is informed and believes and thercon alleges that defendant KAUSHAL
NIROULA (“NIROULA”) is, and at all times herein mentioned was, @ resident of San
Francisco County, California.

5. Plaintiff is informed and believes and thereon alleges that defendant SAY
CHANDRAKANT SHAH (*SHAH”) is. and at all times herein mentioned was, @ resident of
Santa Clara County, California.

6. Plaintiff is informed and believes and thereon alleges that defendant ELVIA
PALOMINO. (“PALOMINO”) is, and at all times herein mentioned was, a resident of Santa
Clara County, California.

7. Plaintiff is informed and believes and thereon alleges that defendant MORAD
AFRAIMI (‘AFRAIMI”) is, and at all times herein mentioned was, a resident of Reno,
Nevada.

8. Plaintiff is informed and believes and thereon alleges that defendant MELVIN
LEE EMERICH (“EMERICH”) is, and at all times herein mentioned was, a resident of Santa
Cruz County, California.

9. Plaintiff is informed and believes and thereon alleges that defendant MARTINI &
CHNOOGLE is, and at all times herein mentioned was a Nevada corporation established by
EMERICH for the purpose of distributing wrongfully obtained Joan proceeds.

10. Plaintiff is informed and believes and thereon alleges that defendant
GRACHELLE LANGUBAN (“LANGUBAN"} is. and at all times herein mentioned was, a
resident of San Francisco County, California. Plaintiff is informed and believes and thereon
alleges that LANGUBAN was at all times relevant a notary employed by FEDEX OFFICE

AND PRINT SERVICE. INC. ata retail office in San Francisco, CA.

-2- First Amended Complaint for Damageswy

~

Cc 2
Francisco, California (the “Properties”), from Shirley 5. Hwang, Trustee of the Trust of
Shirley S. Hwang dated July 1. 1998 (hereinafter referred to as Hwang”), to Defendant
LUM. True and correct copies of said purported grant deeds are attached hereto as Exhibit
“1° Exhibit “2,” and Exhibit “3.”

17, Plaintiff is informed and believes that Hwang had no knowledge of the forgeries,
did not consent to the transfer of the Properties to LUM and that Defendants LUM,
NIROULA, SHAH, and EMERICH had no authority to transfer the Properties. Defendant
LUM, at all relevant times, had no ownership or any other interests in the Properties.

18. Plaintiff is informed and believes and thereon alleges that Defendants LUM,
NIROULA, SHAH, and EMERICH. knowing and willfully conspired and agreed among
themselves to obtain moncy by using the wrongfully transferred Properties as security for
Joans. These defendants. and each of them. did the acts and things herein alleged pursuant to,
and furtherance of, the conspiracy and above-alleged agreement.

19. Plaintiff is informed and believes overt acts were taken in furtherance of the

conspiracy and fraud as follows: On or about January 16, 2009, defendants LUM,

! NIROULA, SHAH and EMERICH sought a joan broker to obtain loans against the

Properties; On or about January 23. 2009, defendant SHAH attempted to open an escrow
with Tran’s Escrow to transact the loans: On or about January 31, 2009. defendant
NIROULA meta real property appraiser at the PROPERTIES to appraise two units in
furtherance of obtaining the loans; On or about Eebruary 3, 2009, SHAH caused to issue a
check to MARTINI & CHNOOGLE in the amount of $200; On or about February 4, 2009,
EMERICH formed MARTINI & CHNOOGLE: On or about February 6, 2009, EMERICH
established a bank account in the name of MARTINI & CHNOOGLE to receive loan
proceeds: On or about February 10, 2005, EMERICH sent escrow instructions for MARTINI
& CHNOOGLE to Tran’s Escrow regarding the loans against the PROPERTIES; On or about
February 14, 2009, defendants NIROULA and SHAH met a real property appraiser at the
PROPERTIES to appraise one unit in furtherance of obtaining a loan; On or about February

20, 2009, SHAH contacted Tran’s Escrow to provide information for a bank account in

-4- First Amended Complaint for DamagesCc =
Francisco, California (the “Properties”), from Shirley §. Hwang, Trustee of the Trust of
Shirley S. Hwang dated July |. 1998 (hereinafter referred to as “Hwang”), to Defendant
LUM. True and correct copies of said purported grant deeds are attached hereto as Exhibit
“1,” Exhibit “2,” and Exhibit “3”

17. Plaintiff is informed and believes that Hwang had no knowledge of the forgeries.
did not consent to the transfer of the Properties to LUM and that Defendants LUM,
NIROULA, SHAH, and EMERICH had no authority to transfer the Properties. Defendant
LUM, at all relevant times, had no ownership or any other interests in the Properties.

18. Plaintiff is informed and believes and thereon alleges that Defendants LUM,
NIROULA. SHAH. and EMERICH, knowing and willfully conspired and agreed among
themselves lo obtain money by using the wrongfully transferred Properties as security for
loans. These defendants. and each of them. did the acts and things herein alleged pursuant to,
and furtherance of, the conspiracy and above-alleged agreement.

19, Plaintiff is informed and believes overt acts were taken in furtherance of the
conspiracy and fraud as follows: On or about January 16, 2009, defendants LUM,
NIROULA, SHAH and EMERICH sought a loan broker to obtain loans against the
Properties; On or about January 23. 2009, defendant SHAH attempted to open an escrow
with Tran’s Escrow to transact the loans; On or about January 31, 2009, defendant
NIROULA meta real property appraiser at the PROPERTIES to appraise two units in
furtherance of obtaining the loans; On or about February 3, 2009, SHAH caused to issue a
check to MARTINI & CHNOOGLE in the amount of $200: On or about February 4, 2009,
EMERICH formed MARTINI & CHNOOGLE; On or about February 6, 2009, EMERICH
established a bank account in the name of MARTINI & CHNOOGLE to receive joan
proceeds; On or about February 10,2009, EMERICH sent escrow instructions for MARTINI
& CHNOOGLE to Tran’s Escrow regarding the loans against the PROPERTIES; On or about
February 14, 2009, defendants NIROULA and SHAH met a real property appraiser at the
PROPERTIES to appraise one unit in furtherance of obtaining a loan; On or about February

20,2009, SHAH contacted Tran’s Escrow to provide information for a bank account in

-4- First Amended Complaint for DamagesWw

Ww

aoe

CO 7”
ww’

35. The obtaining of these loan proceeds by these defendants was not acquired
lawfully and was a conversion of money from the date they were disbursed by escrow. Asa
proximate result of these defendants’ conversion Plaintiff suffered damages in the amount of
$1,719,914.00.

36. These amount oblained by these defendants, and each of them, are wrongfully
detained, and accordingly, each of these defendants are an involuntary trustee of the thing
gained for the benefit of Plaintiff.

WHEREFORE, Plaintiff prays for judgment against these defendants, and each of
them, as set forth below.

Third Cause of Action (Unjust Enrichment)
{as Against PALOMINO and AFRAIMY)

37. Commonwealth hereby incorporates by reference each and every allegation
contained in Paragraphs | through 36, herein above, as though each such allegation were set
forth herein in full.

38. Plaintiff is informed and believes that EMERICH made a loan to. AFRATMI in
the amount of $15,000.00 from the wrongfully obtained loan proceeds on or about March 30,
2009. Plaintiff is further informed and believes that AFRAJMI has not paid back the loan
from EMERICH. excluding $3.600.00, and does not plan to make additional payments since
discovering the source of the money.

39, Plaintitf is informed and believes that SHAH had EMERICH transferred from
MARTINI & CHNOOGLE $14,000.00 from the wrongfully obtained loan proceeds to his
wife PALOMINO on or about March 17, 2009.

40. AFRAIML has received the usc and benefit of money that belongs to Plaintiff. He
has, therefor, been unjustly enriched at the expense of Plaintiff in the sum of $1 1,400.00,
together with interest thereon at the legal rate of 10% per annum, or $3.12 per diem, from and
after March 30, 2009.

41, PALOMINO has received the use and benefit of money that belongs to Plaintiff.

She has, therefor. been unjustly enriched at the expense of Plaintiff in the sum of $14,000.00,

-8- First Amended Complaint for Damagesin

a

together with interest thereon at the legal rate of 10% per annum, or $3.83 per dicm, from and
after March 17, 2009.

WHEREFORE, Plaintiff prays for judgment against these defendants, and each of
them, as set forth below.

Fourth Cause of Action (Negligence Per Se)
(as Against LANGUBAN)

42. Commonwealth hereby incorporates by reference each and every allegation
contained in Paragraphs | through 41, herein above, as though each such allegation were set
forth herein in full.

43. Atall relevant times California Civil Code §§1185-1189 provides that the person
whose signature is acknowledged must provide satisfactory evidence that the person m