Complaint,Petition: Surjit Bagga vs. City National Bank

On January 01, 1900 a Complaint,Petition was filed involving a dispute between Bagga, Surjit, and City National Bank, Fresno Management Company, A California Corporation, Hutchins, Ray, Kruse, James, for 26 Unlimited - Other Real Property in the District Court of Fresno County.

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LAW OFFICES OF MARGARITA SALAZAR, APLC
Margarita Salazar, Esq. (SBN 224649) E-FILED
333 H Street, Suite 5000 10/14/2016
Chula Vista, California 91910
FRESNO COUNTY SUPERIOR COURT
Telephone: (619) 551-7023-9578 By: C. Cogburn, Deputy
Facsimile: (877) 264-4695
Email: margarita@msalazarlaw.com

Attorney for Plaintiff

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF FRESNO
10 16CECG03336
SURJIT BAGGA, ) Case No:
11
PLAINTIFF, PLAINTIFF’S COMPLAINT FOR
12
VS.
13 (dy WRONGFUL FORECLOSURE;
CITY NATIONAL BANK; (2) NEGLIGENCE;
14 (3) NEGLIGENT HIRING AND
and DOES 1-100, INCLUSIVE, SUPERVISION;
15
(4) NEGLIGENT
DEFENDANTS. MISREPRESENTATION;
16
(5) FRAUD;
17 (6) VIOLATION OF THE ROSENTHAL
FAIR DEBT COLLECTION
18 PRACTICES ACT; and
(7) VIOLATION OF BUSINESS AND
19 PROFESSIONS CODE SECTION
17200 ET SEQ.
20
21

23
24

27
28

COMPLAINT
1
Plaintiff (“Plaintiff”) hereby alleges as follows:

PARTIES

1 Plaintiff is an individual residing in Los Angeles, California.

2. Defendant CITY NATIONAL BANK (“City National Bank”) is a national bank

headquartered in and with a principal place of business in Los Angeles, California.

3 Plaintiff is ignorant of the true names and capacities of the defendants sued herein!

as DOES | through 10 and, therefore, sues these defendants by such fictitious names. Plaintiff

will amend this complaint to allege their true names and capacities when ascertained.
4 Defendants sued herein as DOES 1 through 100 are contractually, strictly,
10 negligently, intentionally, vicariously liable and or otherwise legally responsible in some manner
i for each and every act, omission, obligation, event or happening set forth in this Complaint, and
12 that each of said fictitiously named Defendants is indebted to Plaintiff as hereinafter alleged.
13 5 The use of the term “Defendants” in any of the allegations in this Complaint,
14 unless specifically otherwise set forth, is intended to include and charge both jointly and
15 severely, not only named Defendants, but all Defendants designated as well.
16 6 Plaintiff is informed and believe and thereon alleges that, at all times mentioned
17 herein, Defendants were agents, servants, employees, alter egos, superiors, successors in
18 interest, joint venturers and/ or co-conspirators of each of their co-defendants and in doing the
19 things herein after mentioned, or acting within the course and scope of their authority of such
20 agents, servants, employees, alter egos, superiors, successors in interest, joint venturers and/ or
21 co-conspirators with the permission and consent of their co-defendants and, consequently, each
22 Defendant named herein, and those Defendants named herein as DOES 1 through 100, inclusive,
23 are jointly and severely liable to Plaintiff for the damages and harm sustained as a result of their
24 wrongful conduct.
25 7. Defendants, and each of them, aided and abetted, encouraged, and rendered
26 substantial assistance to the other Defendants in breaching their obligations to Plaintiff, as
27 alleged herein. In taking action, as alleged herein, to aid and abet and substantially assist the
28

COMPLAINT
2
commissions of these wrongful acts and other wrongdoings complained of, each of the

Defendants acted with an awareness of its primary wrongdoing and realized that its conduct

would substantially assist the accomplishment of the wrongful conduct, wrongful goals, and

wrongdoing.

8 Defendants, and each of them, knowingly and willfully conspired, engaged in a

common enterprise, and engaged in a common course of conduct to accomplish the wrongs

complained of herein. The purpose and effect of the conspiracy, common enterprise, and

common course of conduct complained of was, inter alia, to financially benefit Defendants at the

expense of Plaintiff by engaging in fraudulent activities. Defendants accomplished their
10 conspiracy, common enterprise, and common course of conduct by misrepresenting and

i concealing material information regarding the servicing of loans, and by taking steps and

12 making statements in furtherance of their wrongdoing as specified herein. Each Defendant was

13 a direct, necessary and substantial participant in the conspiracy, common enterprise and common

14 course of conduct complained of herein, and was aware of its overall contribution to and

15 furtherance thereof. Defendants’ wrongful acts include, inter alia, all of the acts that each of

16 them are alleged to have committed in furtherance of the wrongful conduct of complained of

17 herein.

18 9 Any applicable statutes of limitations have been tolled by the Defendants’

19 continuing, knowing, and active concealment of the facts alleged herein. Despite exercising

20 reasonable diligence, Plaintiff could not have discovered, did not discover, and was prevented

21 from discovering, the wrongdoing complained of herein.

22 10. In the alternative, Defendants should be estopped from relying on any statutes of

23 limitations. Defendants have been under a continuing duty to disclose the true character, nature,

24 and Title Trust Deed of their financial services and debt collection practices. Defendants owed

25 Plaintiff an affirmative duty of full and fair disclosure, but knowingly failed to honor and

26 discharge such duty.

27 Mid

COMPLAINT
3
STATEMENT OF FACTS

1. On or about December 26, 2008, Plaintiff Surjit Bagga executed a document

entitled: Promissory Note Secured By Deed of Trust, in the amount of $1,350,000.00 (the

“Note”) for the real property consisting of a 55-room luxury apartment complex and commonly

known as: 5358-5376 N. 6th Street, Fresno, CA 93710 (the “Property”). A true and correct copy

of the Note is attached hereto as Exhibit A with a notarized seal dated 12/26/2008.
12. The lender on the Note was Imperial Capital Bank. The Note loan number is not

disclosed on the document. The Note is a 10-Year-Fixed/Adjustable Rate. The Interest rate is

6.95%. After five years, effective February 4, 2014, the Note converted to an adjustable rate

10 mortgage (“ARM”), with interest calculated at 3.20% over LIBOR (London Interbank Official

i Rate) with a “cap” of 11.95%.

12 13. The Note does not bear any endorsements and/or allonges. The Note is not

13 signed by anyone on behalf of Imperial Capital Bank.

14 14. The Note was secured with a Deed of Trust containing a power of sale. On or

15 about December 31, 2008, Imperial Capital Bank requested the recordation of the Deed of Trust

16 Fixture Filing, Assignment of Rents, and Security Agreement (the “Deed”) for the Property with

17 the Fresno County Office of the Recorder, document number DOC-2008-0177551. A true and

18 correct copy of the Deed is attached hereto as Exhibit B.

19 15. On the Deed, Imperial Capital Bank is identified as the Beneficiary and “T.D.

20 Service Company, A California Corporation” is identified as the Trustee. At the time that the

21 Deed was recorded, there was no record of an assignment, no concurrent endorsement of the

22 Note verifying that any of the named entities had acquired rights and standing as to the Deed by

23 way of a true sale.

24 16. Neither the Note nor the Deed was registered with the Mortgage Electronic

25 Registration System, Inc. (““MERS”).

26 17. Pursuant to the Note, loan payments were due on the first day of each month

27 starting with January 1, 2009.

COMPLAINT
4
18. The Note provides:

Late Charge. If any installment of Interest, principal, or both principal and interest under
this Note is not paid within ten (10) days after the date on which it is due, Maker shall
immediately pay a late charge equal to ten percent (10%) of such installment to the
Holder to compensate the Holder for administrative costs.
19. The Deed provides, in relevant part,:

3.1, Payment of Note and Other Monetary Obligations. If trustor fails to pay any of its
indebtedness or perform any of its other obligations under the Loan Documents requiring
the payment of money to Beneficiary or any third within ten (10) days provided
however that the ten (10) day grace period contained in section 3.1 shall not apple to
Trustor’s obligation to pay the outstanding principal balance and all accrued but unpaid
interest under the Note at the scheduled maturity of the Note.

10 20. Mrs. Bagga mailed the required payments on or before the10th day of each

i month by overnight mail. Mrs. Bagga made her first mortgage payment to Imperial Capital

12 Bank on or about January 1, 2009.

13 21. From the date of purchase of the property, Mrs. Bagga never missed a mortgage

14 payment. A true and correct copy of a summary of payments generated by City National Bank

15 showing all mortgage payments made by Mrs. Bagga from 2009 through 09/15/2014 is attached

16 hereto as Exhibit C.

17 22. Based upon information and belief, on or about December 19, 2009, Imperial

18 Capital Bank was seized by the Federal Deposit Insurance Corporation (“FDIC”). Further based

19 on information and belief, the FDIC was then appointed as the Receiver of Imperial Capital

20 Bank of La Jolla California.

21 23. On or about 06/20/2011, approximately 19 months after the FDIC took over

22 Imperial Capital Bank’s assets, City National Bank requested that an Assignment of the Deed Of|

23 Trust be recorded in the official records in the Recorders office of Fresno County California (the

24 “Assignment”). The Assignment was recorded as document number DOC-2011-0081778. A

25 true and correct copy of the Assignment is attached hereto as Exhibit D.

26 24. The Assignment provides the following: “For value received, the undersigned

27 hereby grants, assigns and transfer to CITY NATIONAL BANK certain Deed of Trust, dated

COMPLAINT
5
12/22/2009 and all documents related thereto executed by SURJIT BAGGA, a Trustor, to T.D.

SERVICE COMPANY, A CALIFORNIA COPORATION, Trustee, ....”

25. The Assignment was signed as dated on June 6, 2011 and signed by Sheira D.

Smith as Attorney-in-Fact for the FDIC as Receiver of Imperial Capital Bank of La Jolla

California.

26. In order for loans such as Mrs. Bagga’s mortgage on the Property to be properly
transferred from the FDIC to City National Bank, both an endorsement of the Note and

Assignment of the mortgage was required.

27. However, there is no endorsement of either the Note or Deed from the FDIC to

10 City National Bank. As such, because the “mortgage follows the Note,” the Assignment of the

i Deed of Trust is insufficient to effectuate a proper transfer.

12 28. In 2012, Mrs. Bagga requested a payment reduction and loan modification.

13 29. Becky Lee of City National Bank was the contact person working with Mrs.

14 Bagga with respect to her loan modification request.

15 30. At some point, Becky Lee was replaced by Jefferson Gann.

16 31. On or about May 1, 2014, City National Bank unilaterally changed the interest

17 rate on the mortgage to 18.00% alleging that the loan was in default.

18 32. On or about May 15, 2014, City National Bank sent a letter Mrs. Bagga

19 demanding for payment in the amount of $32,732.83. A true and correct copy of the May 15,

20 2014 letter from City National Bank is attached hereto as Exhibit E.

21 33. According to the letter, Mrs. Bagga was in default “under the terms and

22 conditions of the Loan Documents for, among others: 1) failure to pay 2™ installment Tax Year

23 2013 real estate property taxes in the approximate amount of $10,350.78 which remain unpaid;

24 and 2) failure of Borrower to reimburse CNB for protective advance (“Protective Advance”)

25 made by CNB to satisfy the delinquent 1™ installment Tax Year 2013 real estate property taxes

26 in the amount of $10,340.78.”

COMPLAINT
6
34. Between May 1, 2014 and August 1, 2014, Mrs. Bagga made the following

payments:

Date Amount

05/15/2014 $9,026.32

06/09/2014 $10,350.78

06/16/2014 $9,026.32

07/14/2014 $9.026.32

08/15/2014 $9,026.32

09/15/2014 $9,026.32
10

i 35. Mrs. Bagga paid the 2" Installment Tax Year 2013 real estate payment by
12 reimbursing City National Bank on our about 06/09/2014.
13 36. On or about June 12, 2014, Kenneth Mobeck, allegedly a vice president of City
14 National Bank, appointed Title Trust Deed Service Company of Calabasas, California as
15 substitute Trustee. However, because City National Bank did not own the Note, it lacked
16 standing to make such assignment.
17 37. On or about 06/18/2014, Title Trust Deed Service Company requested the
18 recording of a Substitution of Trustee. A true and correct copy of the Substitution of Trustee is
19 attached hereto as Exhibit F.
20 38. The Substitution of Trustee provides the following: “WHEREAS, SURJIT
21 BAGGA, A WIDOW, was the original Trustor, T.D. SERVICE COMPANY, A CALIFORNIA
22 CORPORATION, was the original Trustee, and IMPERIAL CAPITAL BANK, was the original
23 Beneficiary under that certain Deed of Trust [...], and WHEREAS the undersigned, is the
24 present Beneficiary under said Deed of Trust, and WHEREAS, the undersigned desires to
25 substitute a new Trustee under said Deed of Trust in the place of and stead of said original
26 Trustee thereunder, [...], NOW, THEREFORE, the undersigned Beneficiary hereby substitutes
27 TITLE TRUST DEED SERVICE COMPANY, [...] as Trustee of Said Deed of Trust.”
28

COMPLAINT
7
39. The Substitution of Trustee was signed as dated on June 11, 2014 and signed by

Kenneth Mobeck as Vice President City National Bank, A National Banking Association.

40. On or about 06/18/2014, Title Trust Deed Service Company requested the

recording of a Notice of Default and Election To Sell Under Deed of Trust. A true and correct

copy of the Notice of Default and Election To Sell Under Deed of Trust (the “Notice of

Default”) is attached hereto as Exhibit G.

Al. The Notice of Default provides the following: “[The due] amount is $48,196.30

as of 06/01/2014 ...”

42. The Notice of Default further provides the following: “NOTICE IS HEREBY
10 GIVEN: That TITLE TRUST DEED SERVICE COMPANY is either the original trustee, the

i duly appointed substitute trustee, or acting as agent for the trustee or beneficiary under a Deed of|

12 Trust dated 12-22-2008 [...].”

13 43. The Notice of Default further provides the following: “THE INSTALLMENT

14 OF PRINCIPAL AND INTEREST WHICH BECAME DUE 05/01/2014 [...].”

15 44. The Notice of Default was signed as dated on June 13, 2014 by Arlene Behr,

16 identifying herself as Manager for Title Trust Deed Service Company.

17 45. However, Title Trust Deed Service Company lacked standing to issue the Notice

18 of Default.

19 46. On or about 08/01/2014, City National Bank caused to be delivered to Mrs.

20 Bagga a Reinstatement Sheet w/Default Interest & Late Fees. A true and correct copy of the

21 Reinstatement Sheet w/Default Interest & Late Fees (“Reinstatement Sheet”) is attached hereto

22 as Exhibit H.

23 47. The Reinstatement Sheet failed to account for the reimbursement payment in the

24 amount of $10,350.78.

25 48. On or about 08/28/2014, City National Bank filed a lawsuit against Surjit Bagga

26 in the Superior Court of California for the County of Fresno, City National Bank v. Surjit Bagga,

27 Case # 14-CE-CG-02523-MWS, alleging conversion, among other claims.

COMPLAINT
8
49. On or about 09/03/2014, City National Bank, through its attorneys of record

caused to be filed in the Superior Court of California and recorded with the Fresno County

Recorder’s Office, a Notice of Pendency of Action. A true and correct copy of the Notice of

Pendency of Action is attached hereto as Exhibit I.

50. On or about 09/25/2014, Title Trust Deed Service Company requested the

recording of a Notice of Trustee’s Sale with the Fresno County Office of the Recorder,

document number: DOC-2014-0106296. The Notice of Trustees Sale provides: “On 10-17-

2014 at 10:30 a.m., TITLE TRUST DEED SERVICE COMPANY, as duly appointed Trustee

under and pursuant to Deed of Trust recorded 04-18-2007, as Instrument No. 2008-0177551 [...]

10 WILL SELL AT PUBLIC AUCTION TO HIGHEST BIDDER FOR CASH [...].” A true and

i correct copy of the Notice of Trustee’s Sale is attached hereto as Exhibit J.

12 Si. On or about 11/17/2014, The Property was sold at public auction for $828,000, as

13 set forth in the Trustee’s Deed Upon Sale.

14 32. On or about 11/21/2014, The Trust Deed Service Company, on behalf of City

15 National Bank, requested to be recorded with the Fresno County Office of the Recorder a

16 Trustee’s Deed Upon Sale, document number: DOC-2014-0132086-00. A true and correct

17 copy of the Trustee’s Deed Upon Sale is attached hereto as Exhibit K.

18 53. The high bidder at the “public auction” for the purchase of the Property was City

19 National Bank, the Trustor, with a winning bid of $828,000 and with an amount of the unpaid

20 debt $1,437,048.22.

21 54, Based on information and belief, and according to the real estate web site Trulia,

22 comparable properties are valued at $2.5 million.

23 55. On or about 04/01/2015, City National Bank, caused or requested to be recorded

24 with the Fresno County Office of the Recorder, and filed with the Fresno County Superior

25 Court, a Notice of Withdrawal of Lis Pendens, document number: DOC-2015-0038500. A true

26 and correct copy of the Notice of Withdrawal of Lis Pendens is attached hereto as Exhibit L.

27 Mf

COMPLAINT
9
FIRST CAUSE OF ACTION

FOR WRONGFUL FORECLOSURE

AGAINST ALL DEFENDANTS

56. Plaintiff incorporates herein by reference the allegations made in paragraphs |

through 55, inclusive, as though fully set forth herein.

57. Plaintiff is informed and believes and thereon alleges that after the origination
and funding of her loan, the FDIC seized Imperial Capital Bank’s assets, which may or may not

have included her loan, and that City National Bank did not own the loans or the corresponding

notes at the time of the foreclosure sale and/or Imperial Capital Bank did not own the loans or
10 corresponding notes at the time City National Bank allegedly acquired Imperial Capital Bank’s

i assets.

12 38. Moreover, Title Trust Deed Service Company was not lawfully appointed as

13 trustee by City National Bank, and/or DOES 1 through 10. Accordingly, none of the Defendants

14 in this action had the right to declare default, cause notices of default to be issued or recorded, or

15 foreclose on Plaintiff’s interest in the Subject Property. None of the Defendants in this action

16 was the note holder or a beneficiary at any time with regard to Plaintiff's loan.

17 59. Plaintiff further alleges on information and belief that none of the Defendants in

18 this action were beneficiaries or representatives of the beneficiary. That is, none of them were

19 assigned the promissory notes and deeds of trust executed by Plaintiff.

20 60. Plaintiff further alleges that City National Bank failed to record the Limited

21 Power of Attorney concurrently with the Substitution of Trustee as required under California

22 law. Moreover, Kenneth Mobeck, acting as Vice President for City National Bank, did not have

23 the authority to substitute the trustee under the Deed and, even if he did, Title Trust Deed acted

24 unlawfully before it was allegedly substituted in as trustee.

25 61. Additionally, Defendants violated California Civil Code §2923.5(a), which

26 requires a “mortgagee, beneficiary or authorized agent” to “contact the borrower or person by

27 telephone in order to assess the borrower’s financial situation and explore options for the

COMPLAINT
10
borrower to avoid foreclosure. “Section 2923.5(b) requires a default notice to include a

declaration “from the mortgagee, beneficiary, or authorized agent” of compliance with section

2923.5, including attempt “with due diligence to contact the borrower as required by this

section.” None of the Defendants assessed Plaintiff's financial situation correctly or in good

faith prior to filing either of the Notices of Default against the Subject Property in this action.

Accordingly, the Defendants did not fulfill their legal obligation to Plaintiff prior to filing of the

Notices of Default and, therefore, any acts based on the Notice of Default taken thereafter were

invalid and void.

62. Consequently, Defendants engaged in a fraudulent foreclosure of the Subject

10 Property in that Defendants did not have the legal authority to foreclose on the Subject Property

i and, alternatively, if they had the legal authority, they failed to comply with Civil Code Sections

12 2923.5 and 2923.6.

13 63. As a result of the above-described breaches and wrongful conduct by Defendants,

14 Plaintiff has suffered general and special damages in an amount according to proof at trial.

15 SECOND CAUSE OF ACTION

16 FOR NEGLIGENCE

17 AGAINST CITY NATIONAL BANK, AND DOES 1 THROUGH 10

18 64. Plaintiff incorporates herein by reference the allegations made in paragraphs 1

19 through 63, inclusive, as though fully set forth herein.

20 65. At all times relevant herein, City National Bank, acting as Plaintiff's lender and

21 servicer, had a duty to exercise reasonable care and skill to maintain proper and accurate loan

22 records and to discharge and fulfill the other incidents attendant to the maintenance, accounting

23 and servicing of loan records, including, but not limited, disclosing to Plaintiff the status of any

24 foreclosure actions taken by it, refraining from taking any action against Plaintiff that it did not

25 have the legal authority to do, and providing all relevant information regarding the loans

26 Plaintiff had with it to Plaintiff.

COMPLAINT
MW
66. In taking the actions alleged above, and in failing to take the actions as alleged

above, City National Bank breached its duty of care and skill to Plaintiff in the servicing of

Plaintiff's loans by, among other things, not properly crediting payments made on the Note as

being timely, including payments for taxes as set forth above, preparing and recording false

documents, and foreclosing on the Subject Property without having the legal authority and/or

proper documentation to do so.
67. As a direct and proximate result of the negligence and carelessness of City

National Bank as set forth above, Plaintiff suffered, and continues to suffer, general and special

damages in an amount to be determined at trial.
10 THIRD CAUSE OF ACTION

i FOR NEGLIGENT HIRING AND SUPERVISION

12 AGAINST TITLE TRUST DEED AND DOES 1 THROUGH 10

13 68. Plaintiff incorporates herein by reference the allegations made in paragraphs 1

14 through 67, inclusive, as though fully set forth herein.

15 69. At all times relevant herein, Title Trust Deed, acting as the trustee under the

16 Deed, but without the legal authority to do so, had a duty to exercise reasonable care and skill to

17 follow California law with regard to foreclosures, refrain from taking any action against Plaintiff

18 that it did not have the legal authority to do, hire and retain employees that were fit and

19 competent and would not present a risk of harm to third parties, and supervise its employees so

20 that they handled foreclosures and surplus funds in compliance with California law.

21 70. Plaintiff is informed and believes and based on that information and belief alleges

22 that Title Trust Deed knew, or in the exercise of reasonable care should have known, that its

23 employees and agents hired or retained to handle Plaintiff's Note and mortgage payments were

24 incompetent and unfit to perform the job that they were hired to perform and that the

25 performance of this job involved the risk of harm to others such as Plaintiff. Specifically, Title

26 Trust Deed hired and retained an employee or agent, Jefferson Gann, to oversee the handling

27 and management the monthly mortgage payments.

COMPLAINT
12
71. Title Trust Deed knew or should have known that Jefferson Gann was unfit and

unsuitable for the position of handling and managing Plaintiff's mortgage payments and

supervising other employees with regard to the mortgage payments. Within the scope of

Jefferson Gann’s employment with Title Trust Deed, he breached his duty of care to Plaintiff by

instructing other Title Trust Deed employees and agents under his authority and control to

continue to fail to credit Plaintiff's mortgage payments as being and Title Trust Deed knew that

they had no legal basis for their actions.

72. In taking the actions alleged above, and in failing to take the actions as alleged

above, Title Trust Deed breached its duty of care and skill to Plaintiff by negligently hiring

10 Jefferson Gann who was unfit and unsuitable for the job; failing to properly train and supervise

i its agents and employees with regard to California law regarding mortgage payment; taking

12 actions against Plaintiff that it did not have the legal authority to do.

13 73. As a direct and proximate result of the negligence and carelessness of Title Trust

14 Deed as set forth above, Plaintiff suffered, and continues to suffer, general and special damages

15 in an amount to be determined at trial.

16 FOURTH CAUSE OF ACTION

17 FOR NEGLIGENT MISREPRESENTATION

18 AGAINST CITY NATIONAL BANK, AND DOES 1-10
19 74. Plaintiff incorporates herein by reference the allegations made in paragraphs 1

20 through 73, inclusive, as though fully set forth herein.

21 75. Under the circumstances alleged, City National Bank owed a duty to Plaintiff to

22 provide her with accurate information about the status of her mortgage loan accounts.

23 76. City National Bank represented to Plaintiff on multiple occasions that Mrs.

24 Bagga owed for back taxes or unreimbursed amounts due on taxes for 2013.

25 77. City National Bank’s representations were false, negligent and material.

26 78. Plaintiff justifiably relied on City National Bank’s misrepresentations and acted

27 as instructed to by City National Bank.

COMPLAINT
13
79. City National Bank foreclosed on Plaintiff's property despite the fact that Mrs.

Bagga did in fact pay on at least one of the tax payments but was wrongly accused of failing to

pay, inflicting significant damages on Plaintiff. Plaintiffs reliance on City National Bank’s

misrepresentations was thus to her detriment.

80. As a proximate result of City National Bank’s negligent conduct, Plaintiff has

suffered, and will continue to suffer, general and special damages in an amount according to

proof at trial.

FIFTH CAUSE OF ACTION

FOR FRAUD
10 AGAINST CITY NATIONAL BANK, AND DOES 1 THROUGH 10

i 81. Plaintiff incorporates herein by reference the allegations made in paragraphs 1

12 through 80, inclusive, as though fully set forth herein.

13 82. City National Bank, orally and in writing, represented to Plaintiff that Mrs. Bagga

14 was late or missing payments when in fact that was not true. As set forth above, the oral and

15 written representations were made by various employees of City National Bank who were

16 employed in the City National Bank.

17 83. City National Bank failed to disclose to Plaintiff that it was taking the position

18 that the payments made around the 10" of each month were being considered as being late, but

19 were not being credited to her account. Instead, City National continued to accept payments

20 from Plaintiff but did not credit those payments as being timely.

21 84. The representations of City National Bank were false and fraudulent as City

22 National Bank never credited the payments as being timely, and instead, foreclosed on the

23 property. City National Bank intentionally made the representations as part of their pattern and

24 practice to deceive borrower’s such as Plaintiff into relying to their detriment so that City

25 National Bank could foreclose on homes before borrower’s could seek other remedies or

26 options. Here, Plaintiff justifiably relied on the oral and written representations of City National

COMPLAINT
14
Bank. As a proximate result of City National Bank’s fraudulent misrepresentations, Plaintiff

lost her property and inflicted great emotional distress and suffering on Plaintiff.

85. Accordingly, as a result of City National Bank’s fraudulent conduct, Plaintiff has

suffered, and will continue to suffer, compensatory, general and special damages in an amount

to proof. Additionally, City National Bank acted with malice, fraud and/or oppression and, thus,

Plaintiff is entitled to an award of punitive damages.
SIXTH CAUSE OF ACTION

FOR VIOLATION OF THE ROSENTHAL FAIR DEBT COLLECTION PRACTICES

ACT
10 AGAINST CITY NATIONAL BANK, AND DOES 1 THROUGH 10

i 86. Plaintiff incorporates herein by reference the allegations made in paragraphs 1

12 through 85, inclusive, as though fully set forth herein.

13 87. Plaintiff is a consumer and the obligation between the parties is a debt owed

14 pursuant to the subject notes and trust deeds and is a consumer debt pursuant to the Rosenthal

15 Fair Debt Collection Practices Act (“Rosenthal Act”).

16 88. City National Bank is a lender and mortgage servicing company that is in the

17 business of collecting and processing mortgage payments.

18 89. The representative of City National Bank made false misrepresentations in

19 connection with the debt secured by the deed of trust on Plaintiff’s house. Specifically, City

20 National Bank represented that Mrs. Bagga was missing payments, failed to pay or failed to pay

21 taxes when in fact this was not true. This representation was false and fraudulent because City

22 National Bank’s own statement of payments proves that Mrs. Bagga did in fact make the

23 payments that City National Bank claims were not made.

24 90. As a proximate result of City National Bank’s violations of the Rosenthal Act,

25 Plaintiff is entitled to actual and statutory damages, attorney’s fees and costs, and such other

26 relief as the court determines is due.

COMPLAINT
15
SEVENTH CAUSE OF ACTION

FOR VIOLATION OF BUSINESS AND PROFESSIONS CODE

SECTION 17200 ET SEQ.

AGAINST ALL DEFENDANTS

91. Plaintiff incorporates herein by reference the allegations made in paragraphs 1

through 90, inclusive, as though fully set forth herein.

92. California Business & Professions Code Section 17200, et seq., prohibits acts of

unfair competition, which means and includes any “fraudulent business act or practice .. .” and

conduct which is “likely to deceive” and is “fraudulent” within the meaning of Section 17200.

10 93. As more fully described above, Defendants’ acts and practices are likely to

i deceive, constituting a fraudulent business act or practice. This conduct is ongoing and

12 continues to this date.

13 94. Specifically, as fully set forth above, Defendants engage in deceptive business

14 practices with respect to mortgage loan servicing, assignments of notes and deeds of trust,

15 foreclosure of residential properties and related matters by, among other things,
(a) Instituting improper or premature foreclosure proceedings to generate
16 unwarranted fees;
17 (b) Executing and recording false and misleading documents;
(c) Executing and recording documents without the legal authority to do so;
18 (d) Failing to disclose the principal for which documents were being executed
and recorded in violation of California Civil Code Section 1095;
19 (e) Failing to record Powers of Attorney in connection with other recorded
documents in violation of California Civil Code Section 2933;
20
(f) Demanding and accepting payments for debts that were non-existent;
21 (g) Acting as beneficiaries and trustees without the legal authority to do so;
(hy Failing and refusing to remit payment of surplus funds pursuant to
22 California Civil Code Sections 2924j and 2924k; and
@ Other deceptive business practices.
23
95. Plaintiff alleges that by engaging in the above described acts and/or practices as

alleged herein, Defendants have violated several California laws and regulations and said
25
predicate acts are therefore per se violations of California Business and Professions Code

Section 17200, et seq.
27

COMPLAINT
16
96. Plaintiff alleges that Defendants’ misconduct, as alleged herein, gave, and have

given, Defendants an unfair competitive advantage over their competitors. The scheme

implemented by Defendants is designed to defraud California consumers and enrich the

Defendants.

97. The foregoing acts and practices have caused substantial harm to California

consumers,

98. Plaintiff alleges that as direct and proximate result of the aforementioned acts,

Defendants have prospered and benefitted from Plaintiff by collecting mortgage payments and

fees for foreclosure related services, and have been unjustly enriched from their act of

10 foreclosing on Plaintiff's home when they had agreed not to do so and/or to do so in compliance

i with applicable laws.

12 99. By reason of the foregoing, Defendants have been unjustly enriched and should

13 be required to disgorge their illicit profits and/or make restitution to Plaintiffs and other

14 California consumers who have been harmed, and/or be enjoined from continuing in such

15 practices pursuant to California Business & Professions Code Sections 17203 and 17204.

16 Additionally, Plaintiffs are therefore entitled to injunctive relief and attorney’s fees as available

17 under California Business and Professions Code Sec. 17200 and related sections.

18 PRAYER FOR RELIEF
19 Wherefore, Plaintiff prays for judgment against the Defendants and each of them, jointly
20 and severally, as follows:
21 1 For a declaration of the rights and duties of the parties, specifically that the
22 foreclosure of Plaintiff's residence was wrongful.
23
2 For compensatory, special, general and punitive damages according to proof
24
against all Defendants.
25
3 Pursuant to Business and Professions Code § 17203, that all Defendants, their
26
successors, agents, representatives, employees, and all persons who act in concert with them be
27

COMPLAINT
7
permanently enjoined from committing any acts of unfair competition in violation of § 17200,

including, but not limited to, the violations alleged herein.
4. For civil penalties pursuant to statute, restitution, injunctive relief and reasonable

attorney’s fees according to proof.

5 For reasonable attorney’s fees and costs.

6 For reasonable costs of suit and such other and further relief as the Court deems

proper.

DATED: October 14, 2016 LAW OFFICES OF MARGARITA SALAZAR,
A PROFESSIONAL LAW CORPORATION

Il By: Gy
Margarita Salazar,Es
12 Attorney for Plaintiff
13

23,

~ COMPLAINT
18
JURY DEMAND
Plaintiff demands a jury trial for all claims set forth herein.

DATED: October 14, 2016 LAW OFFICES OF MARGARITA SALAZAR, .
A PROFESSIONAL LAW CORPORATION

By
‘argarita Salazar,E!
Attorney for Plaintiff

25
26

COMPLAINT —
19

eee
EXHIBIT A
i IMPERIAL
CAPITAL BANK

PROMISSORY NOTE SECURED BY DEED OF TRUST

(Fixed Rate - Adjustable (Amortizin: lon-Recourse)

$1,350,000.00 Los Angeles, California December 22, 2008

NOTICE TO BORROWER: THIS NOTE CONTAINS PROVISIONS FOR A VARIABLE INTEREST RATE
AND FOR VARIABLE PAYMENT AMOUNTS.

1 Promise to Pay. n installments and at the times stated in this Note, for value received,
SURJIT BAGGA ("Maker"), promises to pay fo IMPERIAL CAPITAL BANK (“Holder”), or order, at 500
N. Brand Bivd., Suite 1500, Glendale, California 91203, or at such other place as the Holder may from
time to time designate in writing, the principal sum of One Million Three Hundred Fifty Thousand and
0/100 ($1,350,000.00), or so much thereof as may te disbursed by the Holder, with interest from the date
of initial disbursement of all or any part of the principal of this Note (the "Disbursement Date") on unpaid
principal at the interest rate or interast rates provided for in this Note.

2. Interest
Rate; Payment of Principal and interest.

24 Certain Definitions. For purposes of this Note, the following terms shall have
the following definitions:

(a) “Note Rate” means the per annum interest rate on the principal sum of
this Note which is outstanding from time to time.

(b) “Ficed Rate” means a per annum interest rate equal to Six and Ninety
Five One Hundredths Percent (6.5%) per annum

(c) “Ficed Rate Term” means the period commencing on the Disbursement
Date and continuing for a term expiring Sixty (60) nonths after the first (1%) day of the first (1) month
following the Disbursement Date (or if the Disbursement Date occurs on the first (1") day of a month,
contiruing for a term expiring Sixty (60) months after the Disbursement Date) during which interest at the
Fixed Rate shall accrue on the outs:anding principal balance of this Note.

(d) “Index” means the six (6) month London Interbank Offered Rate
{LIBOR) as published in the Wall Street Journal.

le) “Current Index” means, with respect to each Interest Change Date, the
most recent Index figure available as of the tenth (10th) day prior to such Interest Change Date.

“Interest Change D: te” means January 1, 2014 and each July 1st, and
January 1st thereafter to and inclucing July 1, 2018

REV DATE 6/03
PROM. NOTE - FIXED RATE/ADJ. (AMORT ZING) MAKER'S INITIALS:
4B I L I
(9) “2ayment Change Date” means February 1, 2014 and each August 1st,
and February 1st thereafter to ard including August 1, 2018.

(h) “Amortization Period” means a period of three hundred sixty (360)
months commencing on January 1, 2009.

@ “Remaining Amortization Period" means, with respect to each Payment
Change Date, the number of months remaining in he Amortization Period as of the Interest Change Date
immediately preceding such Payment Change Dats.

4) “Installment Payment Date” means February 1, 2009 and the first (1st)
day of each month thereafter to arid including December 4, 2018.

(k) “tMonthly Payment” means the total amount of the monthly installment
payment of principal and interest clue and payable under this Note on an Installment Payment Date.

i) “Loan Year’ means (i) the period from the Disbursement Date to the first
(1st) day of the first (1st) calendar month after the month in which the Disbursement Date occurs together
with the consecutive twelve (12) calendar month period following such first (1st) day; and (ii) each
consecutive tweive (12) calendar month period thereafter commencing on the anniversary of such first
(1st) day.

2.2 Interest. The Note Rate siiall be computed as follows:

(a) F.xed Rate Interest Perlod. From the Disbursement Date to the first
Interest Change Date after the erd of the Fixed Rate Term, the Note Rate shall be equal to the Fixed
Rate.

{b} Initial int te for le Peri Subject ONLY to
the lifetime maximum interest rats limitation spec fied in Section 2.3(a) below, effective as of the first
Interest Change Date, the Note Riite shall be equal to the greater of the following rates (such greater rate
is referred to as the “Initial Adjus.able Interest Rate"): {i) a rate equal to the most recent Index figure
published and available as of the first Interest Change Date plus Three and Twenty One Hundredths
(3.20%) percentage points per annum (the “Spread”), rounded upward to the nearest one-thousandth
(411,000) of one percentage point (0.001%), OR {ii} the Fixed Rate.

c: Aulustments to Interest Rate. Subject to the limitations contained in
Section 2.3(b) below, the Holder shall increase or decrease the Note Rate in accordance with this Section
2.2(c) commencing with the second Interest Change Date. The new Note Rate which becomes effective
on each such interest Change Date shall be equal to the Current Index applicable to the Interest Change
Date pius the Spread rounded upward to the nearest one-thousandths (1/1,000) of one percentage point
(0.001%)
23 Limitatior s on Interest Rate Changes.

I ni tmen irst_Inte Change
Date, Notwithstanding ‘anything to the contrary contained in Section 2.2(b) above, and except as
otherwise provided in Section 4 below, no change to the Note Rate shall be made on the first Interest
Change Date to the extent that such change woul result in an increase in the Note Rate above a rate
that is equal to Five (5) percentag: points over the Fixed Rate.

b) Limitation _to_Interest_Rate Adjustments _on Second and All
Subsequent Interest Change Dates. Notwithstanding anything to the contrary contained in Section
2,2(c) above, and except as othervise provided in Siection 4 below, no change to the Note Rate shall be
made on the second and on any subsequent Interest Change Dates to the extent that such change {i)

- !
co.

Case Info

Judge

Cullers, Mark Track Judge’s New Case

Case No.

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Document Filed Date

October 14, 2016

Case Filing Date

January 01, 1900

County

Parties

Bagga, Surjit Plaintiff
City National Bank Defendant
Fresno Management Company, a California Corporation Defendant
Hutchins, Ray Defendant
Kruse, James Defendant
Pro Se Attorney for the Plaintiff
Salazar, Margarita Attorney for the Plaintiff
Slater, G. Andrew Attorney for the Defendant
Gerald Slater Attorneys for Defendants
Richard Rogan Attorneys for Defendants
Joshua Haevernick Attorneys for Defendants
Russell Hurley Attorney
Christopher Seymour Attorneys for Plaintiffs
Kenneth Miele Attorney
Richard Marker Attorney
Arielle Brown Attorneys for Defendants

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Complaint,Petition: Surjit Bagga vs. City National Bank

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