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MEYLAN DAVITT JAIN AREVIAN & KIM LLP ELECTRONICALLY
VINCENT J. DAVITT, ESQ. (State Bar No. 130649)
FILED
ANITA JAIN, ESQ. (State Bar No. 192961) ‘Superior Court of California,
444 S. Flower St., Suite 1850 County of San Francisco
Los Angeles, CA 90071 10/18/2023
Tel (213) 225-6000 — Fax (213) 225-6660 Clerk of the Court
BY: RONNIE OTERO
vdavitt@mdjalaw.com / ajain@mdjalaw.com Deputy Clerk
HARRIS L. COHEN, ESQ., State Bar # 119600
HARRIS L. COHEN, A PROF. CORP.
5305 Andasol Ave.
Encino, CA 91316
Tel (818) 905-5599 / fax (818) 905-5660
heohen00@aol.com
Attomeys for Defendants and Cross-Complainants
10 Milestone Financial, LLC; Bear Bruin Ventures, Inc.;
William R. Stuart; Carolyn Stuart; and Zoé Hamilton
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SUPERIOR COURT OF THE STATE OF CALIFORNIA
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FOR THE COUNTY OF SAN FRANCISCO
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16 Eduardo Paniagua and Elena Asturias, CASE NO. CGC-18-571279
individuals,
17 DECLARATION OF MARY LAZO AS
Plaintiffs, DIRECT TESTIMONY FOR TRIAL
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vs.
19 Milestone Financial, LLC, a California Date: October 24, 2023
corporation, Bear Bruin Ventures, Inc. a Time: 8:30 a.m,
20 California Corporation, William R. Stuart, an Dept.: 611
individual, Carolyn Stuart, an individual, Zoe
21 Hamilton, an individual, and DOES 1-100,
inclusive,
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Defendants.
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RELATED CROSS-ACTIONS
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DECLARATION OF MARY LAZO AS DIRECT TESTIMONY FOR TRIAL.
DECLARATION OF MARY LAZO
1, Mary Lazo, hereby declare and state:
I am over the age of 18 and have personal knowledge as to all facts set forth herein and, if called
upon as a witness to testify thereto, I could and would competently do so.
BACKGROUND
1 I am currently a Senior Escrow Officer in the San Carlos, California office of Fidelity
National Title. I have been an escrow officer for over 30 years in the Bay Area, including at Old
Republic Title Company (“Old Republic”) during the 2014 period. While at Old Republic, I was the
escrow officer who handled the March 2014 loan (“Loan”) between Eduardo Paniagua (“Paniagua”)
10 and Milestone Financial, LLC (“Milestone”), which | understand is the subject of this action.
i AUTHENTICITY AND ADMISSIBILITY OF OLD REPUBLIC EXHIBITS uw?
> xs, records and
12 2. In and around February and March 2014, | personally worked on the b
CCK
13 files of Old Republic with respect to the escrow for the Loan. These b eco) and files included
14 Old Republic’s “Escrow File” for this Loan [Trial Exhibit (“TE”) 134, attached hereto]; email
15 communications relating to the Loan that involved me and were sent to my work email address
16 (mlazo@ortc.com) [TE 30, attached hereto (and emails in TE 134)]; the Borrower's Closing Statement
17 [TE 46, attached hereto] and my 3/21/14 letter to Mr. Paniagua [TE 47, attached hereto]. I have
18 reviewed these exhibits and they are true and correct copies of what they purport to be. These Old
19 Republic records and files were made at or about the time of the events recorded and are maintained in
20 the ordinary course of Old Republic’s business at or near the time of the actions, conditions or events to
21 which they relate. These records and files were prepared in the ordinary course of Old Republic’s
22 business by persons who had personal knowledge of the event being recorded and had a business duty to
23 accurately record such matters.
24 4
3 A true and copy of the Amended Borrower's Closing Statement in the Escrow File is
25 located at TE 134, p. 39. It was executed by Paniagua and reflects his approved disbursements of the
26 Loan proceeds.
27 4 A true and correct copy of the Lenders’ Escrow Instructions in the Loan’s Escrow file, as
28 executed by Paniagua and Fournier, is located at TE 134, pp. 42-48.
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DECLARATION OF MARY -AZO AS DIRECT TESTIMONY FOR TRIAL,
5 A true and correct copy of the Mortgage Loan Disclosure Statement in the Loan’s Escrow
File, as executed by Paniagua and MJF’s Fournier, is located at TE 134, pp. 60-63.
6 A true and correct copy of the Lender’s Escrow Instructions in the Loan’s Escrow File,
as executed by Paniagua and MJF’s Fournier, is located at TE 134, pp. 109-116.
7 A true and correct copy of the Borrower’s Instructions to Old Republic in the Loan’s
Escrow File, as executed by Mr. Paniagua, is located at TE 134, pp. 136-139.
8 A true and correct copy of Milestone’ Lender Doc Checklist in the Loan’s Escrow File is
located at TE 134, p. 155. This includes the requirement of a notarized Affidavit of Loan Purpose from
the borrower.
10 9 A true and correct copy of the Conditional Loan quote in the Loan’s Escrow File, which
11 was also executed by Paniagua and MJF’s Fournier, is located at TE 134, pp. 168-169.
12 10. A true and correct copy of Paniagua’s executed and notarized Affidavit of Loan Purpose
13 in the Loan’s Escrow File is located at TE 134, pp. 171-172.
14 11. A true and copy of Paniagua’s and MJF/Fournier’s executed and notarized Agreement to
15 Arrange Credit in the Escrow File is located at TE 134, pp. 175-179.
16 12. A true and correct copy of Paniagua’s executed Additional Lender Disclosures in the
17 Loan’s Escrow File is located at TE 134, pp. 188-192.
18 13. Mr. Paniagua also initialed a brochure that was provided to him in connection with the
19 escrow, entitled “Using the Services of a Mortgage Broker.” A copy of his initialed first page of that
20 Brochure is located at TE 134, p. 192.
21 14. As to the facts in this Declaration, I know them to be true ofmy own knowledge or I have
22 gained knowledge of them from these aforementioned business records of Old Republic.
23 THE ESCROW FOR THE LOAN
24 15. Since this escrow took place in 2014, and nothing stood out as being out of the ordinary, |
25 do not have an independent recollection of all the events that occurred in connection with this escrow.
26 However, based on my review of the Escrow File [TE 134] and emails |TE 30, 134], I have refreshed
27 my recollection and gained the knowledge herein of the Loan’s escrow as follows.
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DECLARATION OF MARY LAZO AS DIRECT TESTIMONY FOR TRIAL
16. I was an escrow officer at Old Republic who handled the escrow for the Loan. I handled
the escrow from the time it was opened at Old Republic through Loan approval, funding, and closing.
17. The escrow was initially opened at Old Republic on or around February 2014, as a
construction loan. At or around that time, I received from Ms. Zoe Hamilton of Milestone a number of
documents that appeared to be sent from the potential borrower, Mr. Paniagua, relating to the subject
Property, located at 1228 Funston Avenue, San Francisco (“Funston Property”). These forwarded
documents included an appraisal for Funston, the borrower's estimated remodel construction costs, and
related documents. [See TE 134, pp. 215, 241-267 (Funston appraisal); pp. 267-280 (Funston Estimate
for Remodeling and Addition; Funston Job Card; engineering/architect plans).]
10 18. Thereafter, up to the time of closing, the email communications relating to the Loan and
11 Escrow (TE 30 and 134) reflect that the escrow-related communications and the Loan-related paperwork
12 were generally circulated amongst the following persons: Milestone’s Zoe Hamilton; Paniagua’s
13 contact/agent, Jose Ruffrage; MJF’s Raychel Cooke, who I knew worked for MJF’s Mare Fournier, and
14 who the Loan paperwork identified as Paniagua’s licensed broker on the Loan; Paniagua; and me.
15 19. Tt was also my understanding, from discussions with Mr. Paniagua and/or Ms. Hamilton,
16 that Mr. Ruffrage was Mr. Paniagua’s representative and so-called agent who was acting for Mr.
17 Paniagua on the Loan, which understanding is reflected throughout the Escrow File. I and others
18 repeatedly communicated with Mr. Ruffrage, who acted on behalfof and for Mr. Paniagua during the
19 escrow; we were told to set up Paniagua’s final signings of Loan Documents through Mr. Ruffrage; and
20 Mr. Paniagua paid Mr. Ruffrage a $7,500 processing fee for his Loan services. [TE 134, pp. 21, 26, 37,
21 65, 94, 130, 207, 208, 210, 215.]
22 20. From around mid-February to around March 11, 2014, it does not appear that there was
23 much activity with respect to the escrow. On March 11, 2014, Ms. Hamilton sent to Mr. Ruffrage,
24 MJF’s Ms. Cooke, and me numerous (unsigned) Loan-related documents, including the following:
25 Lender Disclosure Package; Affidavit re Loan Purpose; Agreement to Maintain Property Insurance;
26 Broker Agreement to Arrange Credit; Disbursement Agreement: Loan Quote; Lender doc checklist;
27 Note: Paniagua — Occ Cert Disclosure; Rider to DOT; Lender’s Escrow Instructions; and Loan
28 Application. See TE 30, pp. 3-4. Thereafter, on March 11, 2014, I forwarded to MJF’s Ms. Cooke and
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DECLARATION OF MARY LAZO AS DIRECT TESTIMONY FOR TRIAL
Ms. Hamilton the Borrower's Closing Statement and asked MJF’s Ms. Cooke to have the necessary
disclosures completed by MJF as broker for the borrower. [See TE 30, p. 7.]
21. On March 12, 2014, Ms. Hamilton advised that we could go forward with scheduling the
signing appointment (i... final signatures on all necessary loan documents), and that Mr. Paniagua can
sign the Final 1003 (Loan application) and mortgage loan disclosure statement (Form 885) once MJF
and Ms. Cooke have completed and returned those documents to me. [See TE 30, p. 13.]
22. On March 12, 2014, Ms. Cooke forwarded me, Ms. Hamilton, and Mr. Ruffrage
numerous “broker signed” Loan documents reflecting Fournier’s signature, including: Final Form 885 -
signed (Mortgage Loan Disclosure Statement); Final Form 1003 - signed (Loan application); Final Loan
10 Quote — signed; Lender’s Escrow Instructions — signed; Broker Agreement — signed. [See TE 30, p. 13.]
ll 23. It appears that the initial Loan closing and signing were scheduled for March 12, 2014.
12 As mentioned, I had previously been advised that Jose Ruffrage was the agent and contact person
13 working for Mr. Paniagua and was Mr. Paniagua’s contact person with respect to the Loan. For that
14 reason, I and the company in charge of the signing (U.S. Certified Signers) coordinated Mr, Paniagua’s
15 signing of the remaining Loan documents through Mr. Ruffrage. [See TE 30, p. 14.] Mr. Paniagua paid,
16 through escrow, U.S. Certified Signers for their services, including their notarization of various Loan
17 documents. [TE 134, p. 19.]
18 24, However, it appears that, at some point during this period, Mr. Paniagua requested an
19 increase in the initial amount of the “up front” Loan proceeds than was called for under the initial
20 disbursement agreement (it was a construction loan with disbursements based on reaching certain
21 milestones). Therefore, it appears the Loan closing was delayed and Milestone regenerated some of the
22 Loan documents, and requested that they be re-executed by Paniagua. [See TE 30, pp. 16-20.] In
23 particular, on or about March 13, 2014, Ms. Hamilton circulated to me, Ms. Cooke, and Mr. Ruffrage
24 new Lender Escrow Instructions and Disbursement Agreement. [See TE 30, p. 17.]
25 25. On March 19, 2014, Ms. Hamilton sent an email to Mr. Paniagua, copying me and Mr.
26 Ruffrage, advising the Loan was being funded and that Mr. Paniagua still needed to finish signing
27 certain documents being forwarded to him: Lender’s Escrow Instructions; Disbursement Agreement;
28 Closing Statement; and Final 885 and 1003 Forms. [See TE 30, pp. 22-25.]
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DECLARATION OF MARY LAZO AS DIRECT TESTIMONY FOR TRIAL
26. On March 20, 2014, Mr. Paniagua emailed me, Ms. Hamilton and Mr. Ruffrage, advising
us that he is “planning on delivering myself the signed documents” to me and asked where he should
take them. He also asked me if we are meeting at 4 p.m. on March 20 for the Loan closing so he could
deliver “the signed documents.” [TE 30, p. 21.]
27. Based on this email exchange, in the afternoon of March 20, 2014, Mr. Paniagua
personally delivered the necess: signed Loan documents to me so that the Loan could close. As
would be my practice, I confirmed that Mr. Paniagua had signed, had notarized (where necessary), and
had submitted all necessary Loan documentation for the Loan to close, and the Loan closed on March
20, 2014. [See TE 134, p. 1.] On March 21, 2014, I forwarded the executed Loan documents to
10 Milestone. [TE 134, p. 36.]
11 28. Generally, a borrower’s closing statement for a loan is a summary of the costs and
12 financial settlement of the loan and where the proceeds go and, before closing, the borrower must
13 approve the transaction and payouts reflected in the closing statement. Here, the Borrower’s Closing
14 Statement (TE 46) accurately reflects the amounts approved by Mr. Paniagua and paid out in escrow by
15 Old Republic from Mr. Paniagua’s Loan proceeds, including a “broker fee” to MJF Funding Corp. and a
16 “Processing fee” to Jose Ruffrage. If Mr. Paniagua had objected in any way to any of the payouts
17 reflected in the Borrower's Closing Statement, it would have been my practice to not close the Loan.
18 29, 1 do not recall Mr. Paniagua, or Mr. Ruffrage on behalf of Mr. Paniagua, ever raising any
19 issues, objections, or opposition to any of the Loan-related documents or costs or fees at any time up to
20 and through the Loan closing. If, prior to Loan closing, Mr. Paniagua had ever expressed any
21 objections, in any way, to any of the Loan-related documentation, or ifhe ever questioned any of the
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22 other signatures, or if he had stated that he did not understand what he was signing, it would be my
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23 practice to not allow the Loan to have closed.
24 30. I do not recall Mr. Paniagua ever raising any issues or objections as to any of his
25 signatures or the signature of MJF’s Mr. Fournier on any of Mr. Paniagua’s Loan documents, or any
26 allegations at any time by Mr. Paniagua or Mr. Ruffrage that Mr. Fournier was not acting as Mr.
27 Paniagua’s licensed broker for the Loan. Numerous documents were executed by Mr. Paniagua at or
28 near the Loan closing which reflected Mr. Fournier’s signature and Mr. Paniagua attesting that MJF and
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DECLARATION OF MARY LAZO AS DIRECT TESTIMONY FOR TRIAL
Fournier were Paniagua’s licensed broker for the Loan. [See §§ 9-18, above.] As reflected in emails and
attachments circulated amongst the principals, agents, and broker’s office, the Loan-related documents
reflecting Mr. Fournier’s signature came to me and Milestone directly from Mr. Fournier’s own MJF
assistant/colleague - Ms. Cooke. [See TE 30, p. 13.] Moreover, Mr. Fournier’s office provided me and
Old Republic with “Wire Instructions” and instructed Old Republic to “wire our funds for this
transaction” to an MJF account at Bank of America. [See TE 134, p. 12.] If, prior to Loan closing, Mr.
Paniagua had ever expressed any objections, in any way, to Mr. Fournier’s role in the Loan, or his
signature on any of the Loan-related documentation, or if he ever questioned any of the other signatures,
or if he had stated that he did not understand what he was signing, or that he refused to pay MJF the
10 broker’s fee, it would be my practice to not allow the Loan to have closed.
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12 I declare under penalty of perjury under the laws of the State of California that the foregoing is
13 true and correct. Executed aan Carlos , California.
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16 Dated: October AF , 2023
Mary Laz
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DECLARATION OF MARY LAZO AS DIRECT TESTIMONY FOR TRIAL
PROOF OF SERVICE
I, RONI M. IWATA, declare:
lam employed in the County of Los Angeles, State of Califomia I am overthe age of 18 and
not a party to this action. My business address, tel me number and email address are 444 South
Flower Street, Suite 1850, Los Angeles, Califomia 90071, (213) 225-6000, riwata@mdjalaw.com.
On October 18, 2023, I served the document(s) described
as DECLARATION OF MARY
LAZO AS DIRECT TESTIMONY FOR TRIAL on the interested
parties in this action:
Sarah Shapero, Esq. Victor M. Marquez, Esq.
Jessica Adair, Esq. 648 Hayes Street
SHAPERO LAW FIRM San Francisco, CA
100 Pine Street, Suite 530 Tei: (415) 314-7831
San Francisco, CA 94111 Email: victormarquezesq@aol.com
10 Tel: (415) 273-3504 Co-Counsel for Plaintiff
Email: sarah@shaperolawfirm.com Eduardo Paniagua
11 Email: jessica@shaperolawfirm.com
Attorneys for Plaintiff
12 Eduardo Paniagua
13 Hanis Cohen, Esq. ElkanahJ. Bums, Esq.
14 HARRIS L. COHEN, A PROF. CORP. LAW OFFICES OF ELKANAHJ. BURNS
5305 Andasol Avenue 847 N. Hollywood Way, Suite 201
15 Encino, CA 91316 Burbank, CA 91505
Email: hoohen00@aol.com Email: elkanah@convergenz.com.
16 Co-Counsel for Defendants/Cross-Complainants Co-Counsel for Defendants/Cross-Complainants
Milestone Financial, LLC; Bear Bruin Ventures, Milestone Financial, LLC; Bear Bruin Ventures,
17 Inc.; WilliamR. Stuart; Carolyn Stuart; and Zoe Inc.; WilliamR. Stuart; Carolyn Stuart; and Zoe
18 Hamilton Hamilton
19 JoyceK. Lau, Esq.
FULLER LAW FIRM, P.C.
20 60 No. Keeble Avenue
San Jose, CA 95126
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Email: joyce@fulledawfirm net
Co-Counsel for Defendants/Cross-Complainants
Milestone Financial, LLC; Bear Bruin Ventures,
Inc.; WilliamR. Stuart; Carolyn Stuart; and Zoe
Hamilton
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XI BY E-MAIL/ELECTRONIC TRANSMISSION: Based on the Califomia Rules of Court, a
26 court order, and/or an agreement of the parties to accept service by e-mail or electronic transmission, I
caused the document(s) to be transmittedto an electronic filing service provider or to the persons at the
27 email addresses listed on the within service list. I did not receive within a reasonahle time after the
transmission, any electronic message or other indication that the transmission was unsuccessful.
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DECLARATION OF MARY LAZO
1 x [State] I declare
under penalty of perjury
under the laws of the State of Califomia that
the above is true and correct.
Executed on October 18, 2023, at Los Angeles, Califomia.
RONI M. IWATA
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DECLARATION OF MARY LAZO
Preview
—__— MEYLAN DAVITT JAIN AREVIAN & KIM LLP ELECTRONICALLY VINCENT J. DAVITT, ESQ. (State Bar No. 130649) FILED ANITA JAIN, ESQ. (State Bar No. 192961) ‘Superior Court of California, 444 S. Flower St., Suite 1850 County of San Francisco Los Angeles, CA 90071 10/18/2023 Tel (213) 225-6000 — Fax (213) 225-6660 Clerk of the Court BY: RONNIE OTERO vdavitt@mdjalaw.com / ajain@mdjalaw.com Deputy Clerk HARRIS L. COHEN, ESQ., State Bar # 119600 HARRIS L. COHEN, A PROF. CORP. 5305 Andasol Ave. Encino, CA 91316 Tel (818) 905-5599 / fax (818) 905-5660 heohen00@aol.com Attomeys for Defendants and Cross-Complainants 10 Milestone Financial, LLC; Bear Bruin Ventures, Inc.; William R. Stuart; Carolyn Stuart; and Zoé Hamilton 11 12 SUPERIOR COURT OF THE STATE OF CALIFORNIA 13 FOR THE COUNTY OF SAN FRANCISCO 14 15 16 Eduardo Paniagua and Elena Asturias, CASE NO. CGC-18-571279 individuals, 17 DECLARATION OF MARY LAZO AS Plaintiffs, DIRECT TESTIMONY FOR TRIAL 18 vs. 19 Milestone Financial, LLC, a California Date: October 24, 2023 corporation, Bear Bruin Ventures, Inc. a Time: 8:30 a.m, 20 California Corporation, William R. Stuart, an Dept.: 611 individual, Carolyn Stuart, an individual, Zoe 21 Hamilton, an individual, and DOES 1-100, inclusive, 22 Defendants. 23 24 RELATED CROSS-ACTIONS 25 26 27 28 1 DECLARATION OF MARY LAZO AS DIRECT TESTIMONY FOR TRIAL. DECLARATION OF MARY LAZO 1, Mary Lazo, hereby declare and state: I am over the age of 18 and have personal knowledge as to all facts set forth herein and, if called upon as a witness to testify thereto, I could and would competently do so. BACKGROUND 1 I am currently a Senior Escrow Officer in the San Carlos, California office of Fidelity National Title. I have been an escrow officer for over 30 years in the Bay Area, including at Old Republic Title Company (“Old Republic”) during the 2014 period. While at Old Republic, I was the escrow officer who handled the March 2014 loan (“Loan”) between Eduardo Paniagua (“Paniagua”) 10 and Milestone Financial, LLC (“Milestone”), which | understand is the subject of this action. i AUTHENTICITY AND ADMISSIBILITY OF OLD REPUBLIC EXHIBITS uw? > xs, records and 12 2. In and around February and March 2014, | personally worked on the b CCK 13 files of Old Republic with respect to the escrow for the Loan. These b eco) and files included 14 Old Republic’s “Escrow File” for this Loan [Trial Exhibit (“TE”) 134, attached hereto]; email 15 communications relating to the Loan that involved me and were sent to my work email address 16 (mlazo@ortc.com) [TE 30, attached hereto (and emails in TE 134)]; the Borrower's Closing Statement 17 [TE 46, attached hereto] and my 3/21/14 letter to Mr. Paniagua [TE 47, attached hereto]. I have 18 reviewed these exhibits and they are true and correct copies of what they purport to be. These Old 19 Republic records and files were made at or about the time of the events recorded and are maintained in 20 the ordinary course of Old Republic’s business at or near the time of the actions, conditions or events to 21 which they relate. These records and files were prepared in the ordinary course of Old Republic’s 22 business by persons who had personal knowledge of the event being recorded and had a business duty to 23 accurately record such matters. 24 4 3 A true and copy of the Amended Borrower's Closing Statement in the Escrow File is 25 located at TE 134, p. 39. It was executed by Paniagua and reflects his approved disbursements of the 26 Loan proceeds. 27 4 A true and correct copy of the Lenders’ Escrow Instructions in the Loan’s Escrow file, as 28 executed by Paniagua and Fournier, is located at TE 134, pp. 42-48. 22 DECLARATION OF MARY -AZO AS DIRECT TESTIMONY FOR TRIAL, 5 A true and correct copy of the Mortgage Loan Disclosure Statement in the Loan’s Escrow File, as executed by Paniagua and MJF’s Fournier, is located at TE 134, pp. 60-63. 6 A true and correct copy of the Lender’s Escrow Instructions in the Loan’s Escrow File, as executed by Paniagua and MJF’s Fournier, is located at TE 134, pp. 109-116. 7 A true and correct copy of the Borrower’s Instructions to Old Republic in the Loan’s Escrow File, as executed by Mr. Paniagua, is located at TE 134, pp. 136-139. 8 A true and correct copy of Milestone’ Lender Doc Checklist in the Loan’s Escrow File is located at TE 134, p. 155. This includes the requirement of a notarized Affidavit of Loan Purpose from the borrower. 10 9 A true and correct copy of the Conditional Loan quote in the Loan’s Escrow File, which 11 was also executed by Paniagua and MJF’s Fournier, is located at TE 134, pp. 168-169. 12 10. A true and correct copy of Paniagua’s executed and notarized Affidavit of Loan Purpose 13 in the Loan’s Escrow File is located at TE 134, pp. 171-172. 14 11. A true and copy of Paniagua’s and MJF/Fournier’s executed and notarized Agreement to 15 Arrange Credit in the Escrow File is located at TE 134, pp. 175-179. 16 12. A true and correct copy of Paniagua’s executed Additional Lender Disclosures in the 17 Loan’s Escrow File is located at TE 134, pp. 188-192. 18 13. Mr. Paniagua also initialed a brochure that was provided to him in connection with the 19 escrow, entitled “Using the Services of a Mortgage Broker.” A copy of his initialed first page of that 20 Brochure is located at TE 134, p. 192. 21 14. As to the facts in this Declaration, I know them to be true ofmy own knowledge or I have 22 gained knowledge of them from these aforementioned business records of Old Republic. 23 THE ESCROW FOR THE LOAN 24 15. Since this escrow took place in 2014, and nothing stood out as being out of the ordinary, | 25 do not have an independent recollection of all the events that occurred in connection with this escrow. 26 However, based on my review of the Escrow File [TE 134] and emails |TE 30, 134], I have refreshed 27 my recollection and gained the knowledge herein of the Loan’s escrow as follows. 28 3 3 DECLARATION OF MARY LAZO AS DIRECT TESTIMONY FOR TRIAL 16. I was an escrow officer at Old Republic who handled the escrow for the Loan. I handled the escrow from the time it was opened at Old Republic through Loan approval, funding, and closing. 17. The escrow was initially opened at Old Republic on or around February 2014, as a construction loan. At or around that time, I received from Ms. Zoe Hamilton of Milestone a number of documents that appeared to be sent from the potential borrower, Mr. Paniagua, relating to the subject Property, located at 1228 Funston Avenue, San Francisco (“Funston Property”). These forwarded documents included an appraisal for Funston, the borrower's estimated remodel construction costs, and related documents. [See TE 134, pp. 215, 241-267 (Funston appraisal); pp. 267-280 (Funston Estimate for Remodeling and Addition; Funston Job Card; engineering/architect plans).] 10 18. Thereafter, up to the time of closing, the email communications relating to the Loan and 11 Escrow (TE 30 and 134) reflect that the escrow-related communications and the Loan-related paperwork 12 were generally circulated amongst the following persons: Milestone’s Zoe Hamilton; Paniagua’s 13 contact/agent, Jose Ruffrage; MJF’s Raychel Cooke, who I knew worked for MJF’s Mare Fournier, and 14 who the Loan paperwork identified as Paniagua’s licensed broker on the Loan; Paniagua; and me. 15 19. Tt was also my understanding, from discussions with Mr. Paniagua and/or Ms. Hamilton, 16 that Mr. Ruffrage was Mr. Paniagua’s representative and so-called agent who was acting for Mr. 17 Paniagua on the Loan, which understanding is reflected throughout the Escrow File. I and others 18 repeatedly communicated with Mr. Ruffrage, who acted on behalfof and for Mr. Paniagua during the 19 escrow; we were told to set up Paniagua’s final signings of Loan Documents through Mr. Ruffrage; and 20 Mr. Paniagua paid Mr. Ruffrage a $7,500 processing fee for his Loan services. [TE 134, pp. 21, 26, 37, 21 65, 94, 130, 207, 208, 210, 215.] 22 20. From around mid-February to around March 11, 2014, it does not appear that there was 23 much activity with respect to the escrow. On March 11, 2014, Ms. Hamilton sent to Mr. Ruffrage, 24 MJF’s Ms. Cooke, and me numerous (unsigned) Loan-related documents, including the following: 25 Lender Disclosure Package; Affidavit re Loan Purpose; Agreement to Maintain Property Insurance; 26 Broker Agreement to Arrange Credit; Disbursement Agreement: Loan Quote; Lender doc checklist; 27 Note: Paniagua — Occ Cert Disclosure; Rider to DOT; Lender’s Escrow Instructions; and Loan 28 Application. See TE 30, pp. 3-4. Thereafter, on March 11, 2014, I forwarded to MJF’s Ms. Cooke and 4 DECLARATION OF MARY LAZO AS DIRECT TESTIMONY FOR TRIAL Ms. Hamilton the Borrower's Closing Statement and asked MJF’s Ms. Cooke to have the necessary disclosures completed by MJF as broker for the borrower. [See TE 30, p. 7.] 21. On March 12, 2014, Ms. Hamilton advised that we could go forward with scheduling the signing appointment (i... final signatures on all necessary loan documents), and that Mr. Paniagua can sign the Final 1003 (Loan application) and mortgage loan disclosure statement (Form 885) once MJF and Ms. Cooke have completed and returned those documents to me. [See TE 30, p. 13.] 22. On March 12, 2014, Ms. Cooke forwarded me, Ms. Hamilton, and Mr. Ruffrage numerous “broker signed” Loan documents reflecting Fournier’s signature, including: Final Form 885 - signed (Mortgage Loan Disclosure Statement); Final Form 1003 - signed (Loan application); Final Loan 10 Quote — signed; Lender’s Escrow Instructions — signed; Broker Agreement — signed. [See TE 30, p. 13.] ll 23. It appears that the initial Loan closing and signing were scheduled for March 12, 2014. 12 As mentioned, I had previously been advised that Jose Ruffrage was the agent and contact person 13 working for Mr. Paniagua and was Mr. Paniagua’s contact person with respect to the Loan. For that 14 reason, I and the company in charge of the signing (U.S. Certified Signers) coordinated Mr, Paniagua’s 15 signing of the remaining Loan documents through Mr. Ruffrage. [See TE 30, p. 14.] Mr. Paniagua paid, 16 through escrow, U.S. Certified Signers for their services, including their notarization of various Loan 17 documents. [TE 134, p. 19.] 18 24, However, it appears that, at some point during this period, Mr. Paniagua requested an 19 increase in the initial amount of the “up front” Loan proceeds than was called for under the initial 20 disbursement agreement (it was a construction loan with disbursements based on reaching certain 21 milestones). Therefore, it appears the Loan closing was delayed and Milestone regenerated some of the 22 Loan documents, and requested that they be re-executed by Paniagua. [See TE 30, pp. 16-20.] In 23 particular, on or about March 13, 2014, Ms. Hamilton circulated to me, Ms. Cooke, and Mr. Ruffrage 24 new Lender Escrow Instructions and Disbursement Agreement. [See TE 30, p. 17.] 25 25. On March 19, 2014, Ms. Hamilton sent an email to Mr. Paniagua, copying me and Mr. 26 Ruffrage, advising the Loan was being funded and that Mr. Paniagua still needed to finish signing 27 certain documents being forwarded to him: Lender’s Escrow Instructions; Disbursement Agreement; 28 Closing Statement; and Final 885 and 1003 Forms. [See TE 30, pp. 22-25.] 5 DECLARATION OF MARY LAZO AS DIRECT TESTIMONY FOR TRIAL 26. On March 20, 2014, Mr. Paniagua emailed me, Ms. Hamilton and Mr. Ruffrage, advising us that he is “planning on delivering myself the signed documents” to me and asked where he should take them. He also asked me if we are meeting at 4 p.m. on March 20 for the Loan closing so he could deliver “the signed documents.” [TE 30, p. 21.] 27. Based on this email exchange, in the afternoon of March 20, 2014, Mr. Paniagua personally delivered the necess: signed Loan documents to me so that the Loan could close. As would be my practice, I confirmed that Mr. Paniagua had signed, had notarized (where necessary), and had submitted all necessary Loan documentation for the Loan to close, and the Loan closed on March 20, 2014. [See TE 134, p. 1.] On March 21, 2014, I forwarded the executed Loan documents to 10 Milestone. [TE 134, p. 36.] 11 28. Generally, a borrower’s closing statement for a loan is a summary of the costs and 12 financial settlement of the loan and where the proceeds go and, before closing, the borrower must 13 approve the transaction and payouts reflected in the closing statement. Here, the Borrower’s Closing 14 Statement (TE 46) accurately reflects the amounts approved by Mr. Paniagua and paid out in escrow by 15 Old Republic from Mr. Paniagua’s Loan proceeds, including a “broker fee” to MJF Funding Corp. and a 16 “Processing fee” to Jose Ruffrage. If Mr. Paniagua had objected in any way to any of the payouts 17 reflected in the Borrower's Closing Statement, it would have been my practice to not close the Loan. 18 29, 1 do not recall Mr. Paniagua, or Mr. Ruffrage on behalf of Mr. Paniagua, ever raising any 19 issues, objections, or opposition to any of the Loan-related documents or costs or fees at any time up to 20 and through the Loan closing. If, prior to Loan closing, Mr. Paniagua had ever expressed any 21 objections, in any way, to any of the Loan-related documentation, or ifhe ever questioned any of the 22 22 other signatures, or if he had stated that he did not understand what he was signing, it would be my 73 23 practice to not allow the Loan to have closed. 24 30. I do not recall Mr. Paniagua ever raising any issues or objections as to any of his 25 signatures or the signature of MJF’s Mr. Fournier on any of Mr. Paniagua’s Loan documents, or any 26 allegations at any time by Mr. Paniagua or Mr. Ruffrage that Mr. Fournier was not acting as Mr. 27 Paniagua’s licensed broker for the Loan. Numerous documents were executed by Mr. Paniagua at or 28 near the Loan closing which reflected Mr. Fournier’s signature and Mr. Paniagua attesting that MJF and 6 DECLARATION OF MARY LAZO AS DIRECT TESTIMONY FOR TRIAL Fournier were Paniagua’s licensed broker for the Loan. [See §§ 9-18, above.] As reflected in emails and attachments circulated amongst the principals, agents, and broker’s office, the Loan-related documents reflecting Mr. Fournier’s signature came to me and Milestone directly from Mr. Fournier’s own MJF assistant/colleague - Ms. Cooke. [See TE 30, p. 13.] Moreover, Mr. Fournier’s office provided me and Old Republic with “Wire Instructions” and instructed Old Republic to “wire our funds for this transaction” to an MJF account at Bank of America. [See TE 134, p. 12.] If, prior to Loan closing, Mr. Paniagua had ever expressed any objections, in any way, to Mr. Fournier’s role in the Loan, or his signature on any of the Loan-related documentation, or if he ever questioned any of the other signatures, or if he had stated that he did not understand what he was signing, or that he refused to pay MJF the 10 broker’s fee, it would be my practice to not allow the Loan to have closed. 11 12 I declare under penalty of perjury under the laws of the State of California that the foregoing is 13 true and correct. Executed aan Carlos , California. 14 15 16 Dated: October AF , 2023 Mary Laz 17 18 19 20 21 22 23 24 25 26 27 28 7 DECLARATION OF MARY LAZO AS DIRECT TESTIMONY FOR TRIAL PROOF OF SERVICE I, RONI M. IWATA, declare: lam employed in the County of Los Angeles, State of Califomia I am overthe age of 18 and not a party to this action. My business address, tel me number and email address are 444 South Flower Street, Suite 1850, Los Angeles, Califomia 90071, (213) 225-6000, riwata@mdjalaw.com. On October 18, 2023, I served the document(s) described as DECLARATION OF MARY LAZO AS DIRECT TESTIMONY FOR TRIAL on the interested parties in this action: Sarah Shapero, Esq. Victor M. Marquez, Esq. Jessica Adair, Esq. 648 Hayes Street SHAPERO LAW FIRM San Francisco, CA 100 Pine Street, Suite 530 Tei: (415) 314-7831 San Francisco, CA 94111 Email: victormarquezesq@aol.com 10 Tel: (415) 273-3504 Co-Counsel for Plaintiff Email: sarah@shaperolawfirm.com Eduardo Paniagua 11 Email: jessica@shaperolawfirm.com Attorneys for Plaintiff 12 Eduardo Paniagua 13 Hanis Cohen, Esq. ElkanahJ. Bums, Esq. 14 HARRIS L. COHEN, A PROF. CORP. LAW OFFICES OF ELKANAHJ. BURNS 5305 Andasol Avenue 847 N. Hollywood Way, Suite 201 15 Encino, CA 91316 Burbank, CA 91505 Email: hoohen00@aol.com Email: elkanah@convergenz.com. 16 Co-Counsel for Defendants/Cross-Complainants Co-Counsel for Defendants/Cross-Complainants Milestone Financial, LLC; Bear Bruin Ventures, Milestone Financial, LLC; Bear Bruin Ventures, 17 Inc.; WilliamR. Stuart; Carolyn Stuart; and Zoe Inc.; WilliamR. Stuart; Carolyn Stuart; and Zoe 18 Hamilton Hamilton 19 JoyceK. Lau, Esq. FULLER LAW FIRM, P.C. 20 60 No. Keeble Avenue San Jose, CA 95126 21 Email: joyce@fulledawfirm net Co-Counsel for Defendants/Cross-Complainants Milestone Financial, LLC; Bear Bruin Ventures, Inc.; WilliamR. Stuart; Carolyn Stuart; and Zoe Hamilton 24 25 XI BY E-MAIL/ELECTRONIC TRANSMISSION: Based on the Califomia Rules of Court, a 26 court order, and/or an agreement of the parties to accept service by e-mail or electronic transmission, I caused the document(s) to be transmittedto an electronic filing service provider or to the persons at the 27 email addresses listed on the within service list. I did not receive within a reasonahle time after the transmission, any electronic message or other indication that the transmission was unsuccessful. 8 DECLARATION OF MARY LAZO 1 x [State] I declare under penalty of perjury under the laws of the State of Califomia that the above is true and correct. Executed on October 18, 2023, at Los Angeles, Califomia. RONI M. IWATA 10 11 12 13 14 15 16 17 18 19 20 21 24 25 26 27 9 DECLARATION OF MARY LAZO