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© ORISINAL
DAVID L. SMART, ESQ. (SBN 262533)
NICOLE CHERONES, ESQ. (SBN 206102)
SMART LAW OFFICES
8880 Cal Center Drive, Suite 400
Sacramento, CA 95826 sures xi. ED
Tel.: (916) 361-6020 County of Placer
Fax: (916) 361-6021
OCT 04 2018
Attorneys for Plaintiffs dake Chatters
ROBERT SWANSON and DIANE SWANSON 4 sie Officer & Clerk
. Lucatuorto, Deputy
SUPERIOR COURT OF THE STATE OF CALIFORNIA
IN AND FOR THE COUNTY OF PLACER
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1 ROBERT SWANSON; DIANE SWANSON, ) CaseNo: SCVOOL1896
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Plaintiffs, COMPLAINT FOR:
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Ad
VS. 1. Declaratory Relief
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14 2. Cancellation of Instruments
FAY SERVICING, LLC; CITIMORTGAGE, 3. Slander of Title
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INC.; MERIDIAN ASSET SERVICES, 4. Violation of Civil Code §2923.5
INC.; and DOES 1 through 100, inclusive, (formerly §2923.55): Failure to
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Assess Financial Situation and
17 Defendants. Explore Foreclosure Avoidance
. Violations of California Civil Code
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§§1788, et seq.: Rosenthal Fair Debt
19 Collection Practices Act
Negligence & Negligence Per Se
*
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20 7. Violations of California Business and
Professions Code §§17200, et seq.:
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Fraudulent, Unlawful and Unfair
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22 Practices
23 [JURY DEMANDED]
Nee
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COMPLAINT
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FIRST CAUSE OF ACTION
Declaratory Relief
(Against All Defendants)
1. Plaintiffs ROBERT SWANSON and DIANE SWANSON (“Plaintiffs”) are, and at all
times herein relevant were, a married couple and the owners of the real property commonly
known as 1021 Betsy Ross Drive, Roseville, California 95747 (the “Subject Property’’) located in
the County of Placer.
2. Defendant FAY SERVICING, LLC (“FAY”) is,and at all times herein relevant was, a
Delaware limited liability company engaged in the business of collecting debt in the County of
10 Placer, including as a “mortgage servicer” as that term isdefined by California Civil Code
11 §2920.5(a).
12 3. Defendant CITIMORTGAGE, INC. (“CITIMORTGAGE”) is, and at alltimes herein
13 relevant was, a New York corporation engaged in the business of collecting debt in the County
14 of Placer, including as a “mortgage servicer” as that term isdefined by California Civil Code
i §2920.5(a).
16 4. Defendant MERIDIAN ASSET SERVICES, INC. (“MERIDIAN”) is, and atall times
17 herein relevant was, a Florida corporation engaged in business in the County of Placer,
18 including fabricating and recording mortgage-related documents.
19 De The true names and capacities of Defendants named herein as DOES 1through 100 are
20 unknown to Plaintiffs, who therefore sue said Defendants by such fictitious names, and they
21 will amend this complaint to show their true names, involvement and capacities when the same
22 have been ascertained. Each fictitiously named Defendant is in some manner liable to
23 Plaintiffs, or wrongfully claims some right, titleor interest in the Subject Property, or both.
24 6. Whenever reference is made in this complaint to any act of any corporate or other
25 business Defendant, that reference shall mean that the corporation or other business did the acts
26 alleged in this complaint through its officers, directors, employees, agents and/or representatives
27 while acting within the actual and ostensible scope of their authority.
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Ts As a matter of business policy, officers, directors and/or managing agents of Defendants
committed, ratified and/or authorized the conduct complained of herein and/or had advance
knowledge of the unfitness of their employees engaged in the conduct complained of herein and
employed them with a conscious disregard of the rights or safety of others.
8. Plaintiffs are informed and believe, and thereon allege, that at all times herein relevant,
each of the Defendants was the actual and apparent agents of each of the remaining Defendants
and, in doing the things herein alleged, was acting within the course and scope of their actual
and apparent agency and with the knowledge, notification, consent and ratification of each of
the other Defendants.
10 9. On October 22, 2007, a deed of trust was recorded against the Subject Property in the
11 Official Records of the County of Placer. It states that Defendant CITIMORTGAGE lent
12 Plaintiffs the sum of $369,750.00. It further states that Mortgage Electronic Registration
13 Systems, Inc. is named on the deed of trust in anominee capacity for CITIMORTGAGE.
14 10. On June 10, 2014, Defendant CITIMORTGAGE recorded an assignment of the deed of
15 trust on title to the Subject Property. The assignment states that Mortgage Electronic
16 Registration Systems, Inc. (“MERS”), as nominee for Defendant CITIMORTGAGE, granted,
17 sold, bargained, assigned, and transferred the deed of trust recorded on October 22, 2007 to
18 Defendant CITIMORTGAGE.
19 11. On February 24, 2015, Defendant CITIMORTGAGE recorded another assignment of
20 the deed of truston titleto the Subject Property. The document purports to be evidence of an
21 assignment of the promissory note and deed of trustfrom CITIMORTGAGE to “Ventures Trust
22 2013-I-H-R by MCM Capital Partners, LLC Its Trustee.”
23 12. This representation that an assignment of the promissory note and deed of trust took
24 place was also false,as there the documents from which the trustee and trust derive their powers
25 state the trust ceased accepting new loans in 2013.
26 13. A pooling and servicing agreement (“PSA”) is the governing and operative document for
27 trusts, such as the trust, which governs the activities,powers and duties of the Trustee Depositor,
28 Sponsor, Seller,Master Servicer, any appointed Sub-Servicer(s), Document Custodian and any
COMPLAINT
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other party appointed toserve any role for a trust. One purpose of the PSA isto confirm the terms
and conditions under which itwill "acquire mortgage loans.” It also has a particular cut-off date for
the mortgage loans included in the trust.
14. The PSA for the trust indicates the cut-off date to assign notes and deeds of trust into the
trust was in 2013. The alleged transfer of the promissory note and deed of trust in 2015 was in
direct contravention of the cut-off date set forth by the terms of the trust and would subject itto
penalties for accepting loans after the cut-off date. Additionally, the trustee of the trustcannot
accept new loans into the trust after the cut-off date as itdoes not have the power to accept loans
into the trust after that time.
10 15. On April 3, 2018, Defendant MERIDIAN recorded an assignment of the deed of trust on
11 titleto the Subject Property. The document purports to be evidence of an assignment of the
12 promissory note and deed of trust from MERIDAN as trustee for “Ventures Trust 2013-I-H-R
13 by MCM Capital Partners, LLC” to “Wilmington Savings Fund Society, FSB, d/b/a Christiana
14 Trust, not individually but as trustee for Ventures Trust 2013-I-H-R.”
15 16. On June 14, 2018, Defendant FAY recorded a notice of default on titleto the Subject
16 Property. It did so “as attorney in fact for Wilmington Savings Fund Society, FSB, d/b/a
17 Christiana Trust, not individually but as trustee for Ventures Trust 2013-I-H-R.”
18 17. The declaration included inthe notice of default states that FAY contacted the Plaintiffs,
19 assessed their financial situation, explored foreclosure avoidance and provided them with the
20 mandatory disclosures as required by California Civil Code §2923.5.
21 18. Even assuming any were acting on behalf of the actual owner of Plaintiffs’loan, FAY did
22 not comply with Civil Code §2923.5 prior to recording the notice of default. Although Defendants
23 had the ability to and could have provided the statutorily required information to Plaintiffs, itdid
24 not.
25 19. In 2017, Plaintiffs provided FAY, which represented to them that it was their loan
26 servicer, with a loan modification application on more than one occasion.
27 20. Throughout this time FAY and itsemployees represented to Plaintiffs that itwas
28 reviewing their loan modification application in good faith. This statement was false.
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21. Plaintiffs received letters from FAY stating that FAY was denying their loan
modification applications, as Plaintiffs did not meet the criteriafor approval.
22. The statements that FAY reviewed Plaintiffs applications in good faith and that
Plaintiffs did not meet the criteria for approval were false. Throughout this time, FAY increased
Plaintiffs indebtedness for its own financial benefit.
23. Pursuant to California Civil Code §2924(a)(6), no entity shall record or cause a notice of
default to be recorded or otherwise initiate the foreclosure process unless it isthe holder of the
beneficial interest under the mortgage or deed of trust, the original trustee or the substituted
trustee under the deed of trust, or the designated agent of the holder of the beneficial interest.
10 No agent of the holder of the beneficial interest under the mortgage or deed of trust, original
Ad. trustee or substituted trustee under the deed of trust may record a notice of default or otherwise
12 commence the foreclosure process except when acting within the scope of authority designated
13 by the holder of the beneficial interest.
14 24. Defendants lack authority to conduct a nonjudicial foreclosure sale under California
15 Civil Code §2924(a)(6), which forbids an entity from recording a notice of default (or causing a
16 notice of default to be recorded) or otherwise initiating a trustee sale unless itis the beneficial
17 holder of an interest in a valid deed of trust,or the designated agent of such a holder. Plaintiffs
18 are informed and believe that Defendants lacked such authority because none has any interest in
19 a valid note and deed of trust against the Subject Property. Plaintiffs are not required to tender
20 the amount owing under these circumstances as a condition of obtaining relief from the Court as
21 Defendants’ conduct would make itinequitable.
22 2D: Defendants have also failed to comply with the HBOR, which governs preforeclosure
23 activity and conduct of mortgage servicers and trustees in connection with a nonjudicial
24 foreclosure sale affecting Plaintiffs’ real property, inthat Defendants violated California Civil
25 Code §2923.5 (formerly 2923.55) which provides for injunctive relief ifthe trustee’s sale has yet to
26 be conducted.
27 26. At alltimes herein relevant, Defendants were either aware that none had the right to
28 record the notices, assignments and substitutions at issue on titleto Plaintiffs’ property or
COMPLAINT
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lacked reasonable grounds to believe they had such rights as each were aware that none was
never assigned a promissory note signed by Plaintiffs.
27. An actual controversy exists between Plaintiffs and Defendants concerning their
respective rights and duties pertaining to any promissory note, deed of trust, the Subject
Property and the described transactions.
28. Plaintiffs have been, and will continue to be, seriously injured unless Defendants’
foreclosure proceedings and other activities complained of are not preliminarily and
permanently enjoined. Plaintiffs will suffer irreparable injury of a continuing nature that cannot
be adequately calculated or compensated in money damages because of the looming trustee’s
10 sale of Plaintiffs’ home.
it 29. Plaintiffs desire a judicial determination and declaration of Plaintiffs’ and Defendants’
12 respective rights and duties; specifically, that Defendants have no present rights to the Subject
13 Property. Such a declaration is appropriate atthis time so that Plaintiffs may determine their
14 rights and duties since aNotice of Default was recently recorded against the Subject Property.
15
SECOND CAUSE OF ACTION
16 Cancellation of Instruments
(Against All Defendants)
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18 30. Plaintiffs reallege and incorporate by reference the allegations set forth above.
19 31. California Civil Code §3412 provides that, a written instrument, in respect to which
20 there is a reasonable apprehension that ifleft outstanding itmay cause serious injury to aperson
21 against whom itis void or voidable, may, upon his application, be so adjudged, and ordered to
22 be delivered up or canceled.
23 32. There are in existence certain written instruments recorded on titleto the Subject
24 Property that purport to be assignments of a deed of trustmemorializing a secured debt, a
25 substitution of trustee under that deed of trust, and notice of default.
26 33. If leftoutstanding, these instruments will continue to cause serious injury to Plaintiffs
27 including because Defendants commenced a nonjudicial foreclosure of the Subject Property
28 under color of authority provided by those instruments.
COMPLAINT
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34. If leftoutstanding, the assignments of a deed of trust,the substitution of trustee, and the
notice of default will continue to cause serious injury to Plaintiffs including because Defendants
commenced a nonjudicial foreclosure sale according to its terms and such false representations
on title to the Subject Property inevitably reduces itsvalue.
THIRD CAUSE OF ACTION
Slander of Title
(Against All Defendants)
35. Plaintiffs reallege and incorporate by reference the allegations set forth above.
36. Plaintiffs allege that the assignments of a deed of trust,the substitution of trustee, and the
10 notice of default contain false statements as alleged hereinabove.
11 37. These false statements disparaged Plaintiffs’ title.
12 38. Plaintiffs allege that Defendants did not have any privilege to act in the manner they did
13 as they published these false statements with malice as the recording of these instruments on
14 titleto Plaintiffs’ property was done with, at aminimum, Defendants lacking reasonable
15 grounds to believe in the truth of their contents.
16 39. | Asa proximate cause of the Defendants’ conduct as herein alleged, Plaintiffs’ personal
17 residence may be sold at a trustee’s sale. Plaintiffs have suffered, and will continue to suffer,
18 damages the exact amount of which have not been fully ascertained but are within the
19 jurisdiction of this Court. Plaintiffs are entitled to incidental and consequential expenses and
20 damages in an amount to be shown atthe time of trial. In addition, Plaintiffs have further been
21 forced to retain a law firm to enforce their rights and have incurred and will incur costs and
22 reasonable attorney fees in connection herewith, recovery of which Plaintiffs are entitled to
23 according to proof.
24 40. Defendants acted fraudulently, maliciously and oppressively with a conscious, reckless
25 and willful disregard, and/or with callous disregard, of the probable detrimental and economic
26 consequences to Plaintiffs, and to the direct benefit of Defendants, knowing that their conduct,
27 was substantially certain to vex, annoy, and injure Plaintiffs and entitle them to punitive
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damages under California Civil Code §3294, inan amount sufficient to punish or make an
example of Defendants.
FOURTH CAUSE OF ACTION
Violations of Civil Code §2923.5: Failure to Explore Foreclosure Avoidance
(Against All Defendants)
41. Plaintiffs reallege and incorporate by reference the allegations set forth above.
42. California Civil Code §2923.5, formerly California Civil Code §2923.55, provides, in
part, that a mortgage servicer shall contact a borrower in person or by telephone in order to
assess the borrower's financial situation and explore options for the borrower to avoid
10 foreclosure. During the initial contact, the mortgage servicer shall advise the borrower that he
11 or she has the right to request a subsequent meeting and, ifrequested, the mortgage servicer
12 shall schedule the meeting to occur within 14 days. The assessment of the borrower's financial
13 situation and discussion of options may occur during the firstcontact, or at the subsequent
14 meeting scheduled for that purpose. In either case, the borrower shall be provided the toll-free
15 telephone number made available by the United States Department of Housing and Urban
16 Development (HUD) to find a HUD-certified housing counseling agency. Any meeting may
7 occur telephonically. If unable to contact the borrower, the servicer must show due diligence in
18 attempting to make contact.
19 43. Plaintiffs are members of the group entitled to protection under this code section.
20 44. Plaintiffs allege that Defendants failed to meet the requirements of this code section as
21 Plaintiffs were not contacted to discuss theirfinancial situation and explore foreclosure avoidance
22 options prior to the recording of the notice of default.
23 4S. As a result of Defendants’ intentional, reckless and/or willful violation of this code section,
24 Plaintiffs are entitled to the greater injunctive relief restraining the foreclosure process pursuant to
25 California Civil Code §2924.12(a). In addition, Plaintiffshave been forced as a result of
26 Defendants’ violations to retain a law firm to enforce their rights,and have incurred and will
21 continue to incur costs and reasonable attorney fees in connection herewith, recovery of which
28 Plaintiffs are entitled according to California Civil Code §2924.12(i).
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FIFTH CAUSE OF ACTION
Violations of Civil Code §§1788, et seq.: Rosenthal Fair Debt Collection Practices Act
(Against All Defendants)
46. Plaintiffs reallege and incorporate by reference the allegations set forth above.
47. Plaintiffs are, and at all times herein relevant were, “consumers,” and the debt at issue a
“consumer debt,” as defined by California Civil Code §§1788, et seg. (““RFDCPA”).
48. | Defendants are, and at all times herein relevant were, “debt collectors” engaging in “debt
collection” practices under the RFDCPA.
49. Defendants violated the RFDCPA by using false, deceptive and misleading statements in
10 connection with their efforts to collect on a note and deed of trust.
11 50. Defendants violated section 1788.10(e) by making the threat to Plaintiffs that
12 nonpayment of a debt would result in the sale of the Subject Property when such action was not
13 permitted by law because they could not enforce the note and deed of trust they claimed to be
14 enforcing and because none complied with the HBOR beforehand.
15 51. | Defendants violated section 1788.13(e) by making the false representation to Plaintiffs
16 that a debt owed to them would be increased by the addition of attorney fees, investigation fees,
17 service fees, finance charges, or other charges when such charges could not be legally be added
18 to any existing obligation of their because they could not enforce the note and deed of trust they
19 claimed to be enforcing and because none complied with the HBOR beforehand.
20 52. Defendants violated section 1788.13(l) by making the communication to a Plaintiffs
21 demanding money under a debt owed to them when they had not been assigned any such debt.
22 53. Defendants violated section 1788.17 for failure to comply with the provisions of
23 sections 1692b to 1692), and are subject to the remedies in section 1692k of, Title 15 of the
24 United States Code.
25 54. Defendants violated 15 USC §1692e of the federal Fair Debt Collection Practices Act
26 (“FDCPA”) by using false, deceptive and misleading representations and means in connection
27 with their efforts to collect on a note and deed of trust.
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55. Defendants violated 15 USC §1692e(2)(A) of the FDCPA by falsely representing the
character, amount and legal status of a debt as alleged hereinabove.
56. Defendants violated 15 USC §1692e(8) of the FDCPA by communicating credit
information about Plaintiffs that itknew or should have known was false as alleged
hereinabove.
ad: Defendants violated 15 USC §1692e(10) of the FDCPA by using false representations
and deceptive means to collect or attempt to collect a debt from Plaintiffs as alleged
hereinabove.
58. Defendants violated 15 USC §1692f of the federal FDCPA by using unfair and
10 unconscionable means as alleged hereinabove in connection with the efforts to collect from
11 Plaintiffs on a promissory note and deed of trust.
12 59. Defendants violated 15 USC §1692f(6) by threatening to take a nonjudicial action to
13 effect dispossession or disablement of Plaintiffs’ real property with no present right to
14 possession of the Subject Property they claim iscollateral.
15 60. Asa proximate cause of the Defendants’ conduct as herein alleged, Plaintiffs are now
16 subject to foreclosure proceedings and the loss of their personal residence. Plaintiffs have
17 suffered, and will continue to suffer, damages the exact amount of which have not been fully
18 ascertained but are within the jurisdiction of this Court. In addition, Plaintiffs have further been
19 forced to retain a law firm to enforce their rights and have incurred and will incur costs and
20 reasonable attorney fees in connection herewith, recovery of which Plaintiffs are entitled to
21 according to California Civil Code §1788.30(c).
22
23
SIXTH CAUSE OF ACTION
24 Negligence & Negligence Per Se
(Against All Defendants)
25
26 61. Plaintiffs reallege and incorporate by reference the allegations set forth above.
27 62. Defendants owed Plaintiffs a duty of care to maintain proper records and provide
28 accurate information about loans as well as not record assignments of deeds of trust stating an
COMPLAINT
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assignment of a promissory note and deed of trust were assigned to other persons or entities
took place when no such assignments occurred.
63. | Defendants breached the duty to maintain proper records, provide accurate information
about loans and refrain from recording false assignments of the deed of trust when these
Defendants recorded the assignments on titleto Plaintiffs’ home. These assignments contained
false representations about who owned and had the right to assign Plaintiffs’ note and deed of
trust and false representations that the note and deed of trust were assigned when they were not.
64. Defendants’ recording of the false assignments was intended to affect the Plaintiffs as it
was recorded on titleto their home to allow these Defendants to appear that they had the rights
10 to act as Plaintiffs’ mortgage servicers and promissory note beneficiary and thereafter foreclose
ra on and evict Plaintiffs from their home.
12 65. Itwas entirely foreseeable to Defendants that recording false documents on titleto
13 Plaintiffs’ home could result in significant harm to the Plaintiffs.
14 66. Defendants’ publicly recording false assignments caused Plaintiffs to incur costs and
15 expenses incurred to prevent or fight foreclosure and caused them to lose titleto their home and
16 be sued for unlawful detainer, and other damages.
17 67. Defendants also owed Plaintiffs a duty to refrain from recording substitutions of trustee
18 stating a beneficiary of a promissory note was substituting a new trustee under a deed of trust
19 when the entity identified as the beneficiary isnot the beneficiary and therefore no such
20 substitution is allowed or has occurred or notices of default and of trustee’s sale without the
21 present right to do so.
22 68. | Defendants breached the duty to refrain from recording false substitutions of trustee
23 when these Defendants recorded the substitution of trustee on titleto Plaintiffs’ home. The
24 substitution contained false representations about who owned and had the right to substitute a
25 trustee under the deed of trust.
26 69. Defendants also breached the duty to refrain from recording false notices when these
27 Defendants recorded the notice of default on titleto Plaintiffs’ home.
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70. | Defendants recording of the false substitution and notices were intended to affect the
Plaintiffs as the were recorded on title totheir home to allow these Defendants to appear that
they had the rights to act as Plaintiffs’ mortgage servicers and promissory note beneficiary and
thereafter foreclose on and evict Plaintiffs from their home.
71. Itwas entirely foreseeable to Defendants that recording false documents on titleto
Plaintiffs’ home could result in significant harm to the Plaintiffs.
72. Defendants’ publicly recording the substitution and notices caused Plaintiffs caused
them to incur costs and expenses incurred to prevent or fight foreclosure and other damages.
73. Furthermore, assuming arguendo that FAW was acting as servicer for the beneficiary of
10 Plaintiffs’ promissory note and deed of trust, Defendants owed Plaintiffs a duty of care with
Ld respect to their handling and review of Plaintiffs’ loan modification applications as they agreed
12 to review them.
13 74. | Anagreement to provide services (in contrast to one for the sale of goods), such as
14 undertaking to review a loan modification, gives rise to a duty of care, which requires that the
15 services contemplated be performed in a competent and reasonable manner and that a negligent
16 failure to do so may be both a breach of contract and a tort.
17 75. Defendants’ reviews of the loan modification applications were intended to affect the
18 Plaintiffs.
19 76. Itwas entirely foreseeable to Defendants that failing to timely and carefully process
20 Plaintiffs’ loan modification applications could result in significant harm to the Plaintiffs.
21 77. Defendants’ mishandling of Plaintiffs’ applications deterred them from seeking other
22 remedies to address their mortgage, damaged their credit, created additional income tax liability,
23 caused them to incur costs and expenses incurred to prevent or fight foreclosure, deprived them
24 of the possibility of obtaining the requested relief offered by Defendants, caused them to lose
25 titleto their home and be sued for unlawful detainer, and other damages.
26 78. Defendants also knew or should have known that their agents that executed and
27 facilitated the execution and recording of the title documents, and those tasked with evaluating
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loan modification applications, were unfit and incompetent and that this unfitness and
incompetency created a particular risk,and did create such a risk to others, such as Plaintiffs.
79. The failure of a person to exercise due care ispresumed if they violated a statute,
ordinance, or regulation of apublic entity,the violation proximately caused injury to person or
property, the injury resulted from an occurrence of the nature which the statute, ordinance, or
regulation was designed to prevent, and the person suffering the injury to his person or property
was one of the class of persons for whose protection the statute, ordinance, or regulation was
adopted.
80. As alleged hereinabove, Defendants violated sections 1692e, 1692e(2)(A), 1692e(8),
10 1692e(10), 1692f, 1692f(6) of Title 15 of the United States Code, Real Estate Settlement
11 Procedures Act, 12 U.S.C. §2605(e) and 12 CFR §§1024.35 and 1024.36, and sections 1788, et
12 seq., 2923.5 and 2924(a)(6) of the California Civil Code.
13 81. Defendants owed duties of care to Plaintiffs, including but not limited to complying with
14 the statutes listed above. The conduct prescribed by the statutes isthe standard of care. A
15 violation of a statute is presumed to be negligence.
16 82. | Defendants breached to the duty to exercise ordinary care and breached the duties to
17 comply with the statutes listed above, and therefore the attendant standards of care, by engaging
18 in the conduct complained of. This conduct includes enforcing a note and deed to attempt to
19 wrongly dispossess Plaintiffs of the Subject Property and recording documents on titlewithout
20 the proper authorization and in a manner not in compliance with California's nonjudicial
21 foreclosure statutes.
22 83. Plaintiffs’ damages result from the violations of these statutes. As such, Plaintiffs are
23 within the class of persons these statutes were enacted to protect.
24
SEVENTH CAUSE OF ACTION
25
Violations of Business & Professions Code §§17200, et seq.:
26 Fraudulent, Unlawful and Unfair Business Practices
(Against All Defendants)
27
28 84. Plaintiffs reallege and incorporate by reference the allegations set forth above.
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85. Plaintiffs are informed and believe, and on that basis allege, that Defendants’ acts, as
alleged hereinabove, constitute unlawful, unfair and/or fraudulent business practices, as defined
by California Business and Professions Code §§17200, et seg. (“UCL”).
86. Defendants engaged in “fraudulent” practices under the UCL because their inaccurate
statements regarding the loan modification process and their actions committed against
Plaintiffs in pursuing nonjudicial foreclosure without any authority to do so are practices likely
to deceive the public.
87. Defendants engaged in “unlawful” practices under the UCL based on the common law
causes of action and statutory violations complained of herein.
10 88. Defendants engaged in “unfair” practices under the UCL because their statements
a. regarding the identity of the beneficiary of the promissory note and deed of trust and those
12 related to the loan modification process were misleading and the conduct described hereinabove
a3 violated the laws and underlying legislative policies designed to prevent foreclosures.
14 89. Plaintiffs lost money and property as aresult of these unlawful, unfair, and fraudulent
15 practices.
16 WHEREFORE, Plaintiffs pray for judgment against Defendants, and each of them, as
17 follows:
18 1. For a declaration of the rights and duties of the parties; specifically that the
19 assignments of a deed of trust, substitution of trustee under that deed of trust and
20 the notice of default be declared void and that Defendants had no right to pursue
21 collection or conduct a trustee’s sale of the Subject Property.
22 Ds For an order that Defendants deliver any purported assignments of the deed of
23 trust, substitution of trustee under that deed of trust, and notice of default
24 forthwith to the clerk of the Court for cancellation.
25 3. For injunctive relief preventing Defendants from engaging in any sale, transfer,
26 conveyance, actions or any other conduct adverse to Plaintiffs’ interests in the
27 Subject Property.
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For the Court to render an accounting between Plaintiffs and Defendants
determining any amounts owed.
For compensatory damages in an amount to be determined by proof at trial.
For special damages in an amount to be determined by proof at trial.
ND
For general damages in an amount to be determined by proof attrial.
For statutory damages in an amount to be determined by proof at trial.
om
For treble damages in an amount to be determined by proof attrial.
For restitution in an amount to be determined by proof at trial.
11. For disgorgement of sums wrongfully obtained in an amount to be determined by
10 proof at trial.
11 12. For punitive damages.
12 13. For reasonable attorney fees, costs and expenses of litigation, according to
13 statute and/or proof.
14 14. For any prejudgment or other interest according to law.
15 15. For any other relief that this Court deems equitable and proper.
16 JURY DEMAND
17 Plaintiffs hereby demand trialby jury.
18 DATED: September 28, 2018 Respectfully submitted,
19 SMART LAW OFFICES
20
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© ORISINAL DAVID L. SMART, ESQ. (SBN 262533) NICOLE CHERONES, ESQ. (SBN 206102) SMART LAW OFFICES 8880 Cal Center Drive, Suite 400 Sacramento, CA 95826 sures xi. ED Tel.: (916) 361-6020 County of Placer Fax: (916) 361-6021 OCT 04 2018 Attorneys for Plaintiffs dake Chatters ROBERT SWANSON and DIANE SWANSON 4 sie Officer & Clerk . Lucatuorto, Deputy SUPERIOR COURT OF THE STATE OF CALIFORNIA IN AND FOR THE COUNTY OF PLACER 10 1 ROBERT SWANSON; DIANE SWANSON, ) CaseNo: SCVOOL1896 Se 12 Plaintiffs, COMPLAINT FOR: ee 13 Ad VS. 1. Declaratory Relief eee 14 2. Cancellation of Instruments FAY SERVICING, LLC; CITIMORTGAGE, 3. Slander of Title 15 XVd INC.; MERIDIAN ASSET SERVICES, 4. Violation of Civil Code §2923.5 INC.; and DOES 1 through 100, inclusive, (formerly §2923.55): Failure to eee 16 Assess Financial Situation and 17 Defendants. Explore Foreclosure Avoidance . Violations of California Civil Code mn 18 eee §§1788, et seq.: Rosenthal Fair Debt 19 Collection Practices Act Negligence & Negligence Per Se * eee 20 7. Violations of California Business and Professions Code §§17200, et seq.: 21 Fraudulent, Unlawful and Unfair eee 22 Practices 23 [JURY DEMANDED] Nee 24 25 26 27 28 COMPLAINT -0- FIRST CAUSE OF ACTION Declaratory Relief (Against All Defendants) 1. Plaintiffs ROBERT SWANSON and DIANE SWANSON (“Plaintiffs”) are, and at all times herein relevant were, a married couple and the owners of the real property commonly known as 1021 Betsy Ross Drive, Roseville, California 95747 (the “Subject Property’’) located in the County of Placer. 2. Defendant FAY SERVICING, LLC (“FAY”) is,and at all times herein relevant was, a Delaware limited liability company engaged in the business of collecting debt in the County of 10 Placer, including as a “mortgage servicer” as that term isdefined by California Civil Code 11 §2920.5(a). 12 3. Defendant CITIMORTGAGE, INC. (“CITIMORTGAGE”) is, and at alltimes herein 13 relevant was, a New York corporation engaged in the business of collecting debt in the County 14 of Placer, including as a “mortgage servicer” as that term isdefined by California Civil Code i §2920.5(a). 16 4. Defendant MERIDIAN ASSET SERVICES, INC. (“MERIDIAN”) is, and atall times 17 herein relevant was, a Florida corporation engaged in business in the County of Placer, 18 including fabricating and recording mortgage-related documents. 19 De The true names and capacities of Defendants named herein as DOES 1through 100 are 20 unknown to Plaintiffs, who therefore sue said Defendants by such fictitious names, and they 21 will amend this complaint to show their true names, involvement and capacities when the same 22 have been ascertained. Each fictitiously named Defendant is in some manner liable to 23 Plaintiffs, or wrongfully claims some right, titleor interest in the Subject Property, or both. 24 6. Whenever reference is made in this complaint to any act of any corporate or other 25 business Defendant, that reference shall mean that the corporation or other business did the acts 26 alleged in this complaint through its officers, directors, employees, agents and/or representatives 27 while acting within the actual and ostensible scope of their authority. 28 COMPLAINT = 1 - Ts As a matter of business policy, officers, directors and/or managing agents of Defendants committed, ratified and/or authorized the conduct complained of herein and/or had advance knowledge of the unfitness of their employees engaged in the conduct complained of herein and employed them with a conscious disregard of the rights or safety of others. 8. Plaintiffs are informed and believe, and thereon allege, that at all times herein relevant, each of the Defendants was the actual and apparent agents of each of the remaining Defendants and, in doing the things herein alleged, was acting within the course and scope of their actual and apparent agency and with the knowledge, notification, consent and ratification of each of the other Defendants. 10 9. On October 22, 2007, a deed of trust was recorded against the Subject Property in the 11 Official Records of the County of Placer. It states that Defendant CITIMORTGAGE lent 12 Plaintiffs the sum of $369,750.00. It further states that Mortgage Electronic Registration 13 Systems, Inc. is named on the deed of trust in anominee capacity for CITIMORTGAGE. 14 10. On June 10, 2014, Defendant CITIMORTGAGE recorded an assignment of the deed of 15 trust on title to the Subject Property. The assignment states that Mortgage Electronic 16 Registration Systems, Inc. (“MERS”), as nominee for Defendant CITIMORTGAGE, granted, 17 sold, bargained, assigned, and transferred the deed of trust recorded on October 22, 2007 to 18 Defendant CITIMORTGAGE. 19 11. On February 24, 2015, Defendant CITIMORTGAGE recorded another assignment of 20 the deed of truston titleto the Subject Property. The document purports to be evidence of an 21 assignment of the promissory note and deed of trustfrom CITIMORTGAGE to “Ventures Trust 22 2013-I-H-R by MCM Capital Partners, LLC Its Trustee.” 23 12. This representation that an assignment of the promissory note and deed of trust took 24 place was also false,as there the documents from which the trustee and trust derive their powers 25 state the trust ceased accepting new loans in 2013. 26 13. A pooling and servicing agreement (“PSA”) is the governing and operative document for 27 trusts, such as the trust, which governs the activities,powers and duties of the Trustee Depositor, 28 Sponsor, Seller,Master Servicer, any appointed Sub-Servicer(s), Document Custodian and any COMPLAINT -2- other party appointed toserve any role for a trust. One purpose of the PSA isto confirm the terms and conditions under which itwill "acquire mortgage loans.” It also has a particular cut-off date for the mortgage loans included in the trust. 14. The PSA for the trust indicates the cut-off date to assign notes and deeds of trust into the trust was in 2013. The alleged transfer of the promissory note and deed of trust in 2015 was in direct contravention of the cut-off date set forth by the terms of the trust and would subject itto penalties for accepting loans after the cut-off date. Additionally, the trustee of the trustcannot accept new loans into the trust after the cut-off date as itdoes not have the power to accept loans into the trust after that time. 10 15. On April 3, 2018, Defendant MERIDIAN recorded an assignment of the deed of trust on 11 titleto the Subject Property. The document purports to be evidence of an assignment of the 12 promissory note and deed of trust from MERIDAN as trustee for “Ventures Trust 2013-I-H-R 13 by MCM Capital Partners, LLC” to “Wilmington Savings Fund Society, FSB, d/b/a Christiana 14 Trust, not individually but as trustee for Ventures Trust 2013-I-H-R.” 15 16. On June 14, 2018, Defendant FAY recorded a notice of default on titleto the Subject 16 Property. It did so “as attorney in fact for Wilmington Savings Fund Society, FSB, d/b/a 17 Christiana Trust, not individually but as trustee for Ventures Trust 2013-I-H-R.” 18 17. The declaration included inthe notice of default states that FAY contacted the Plaintiffs, 19 assessed their financial situation, explored foreclosure avoidance and provided them with the 20 mandatory disclosures as required by California Civil Code §2923.5. 21 18. Even assuming any were acting on behalf of the actual owner of Plaintiffs’loan, FAY did 22 not comply with Civil Code §2923.5 prior to recording the notice of default. Although Defendants 23 had the ability to and could have provided the statutorily required information to Plaintiffs, itdid 24 not. 25 19. In 2017, Plaintiffs provided FAY, which represented to them that it was their loan 26 servicer, with a loan modification application on more than one occasion. 27 20. Throughout this time FAY and itsemployees represented to Plaintiffs that itwas 28 reviewing their loan modification application in good faith. This statement was false. COMPLAINT - 3 - 21. Plaintiffs received letters from FAY stating that FAY was denying their loan modification applications, as Plaintiffs did not meet the criteriafor approval. 22. The statements that FAY reviewed Plaintiffs applications in good faith and that Plaintiffs did not meet the criteria for approval were false. Throughout this time, FAY increased Plaintiffs indebtedness for its own financial benefit. 23. Pursuant to California Civil Code §2924(a)(6), no entity shall record or cause a notice of default to be recorded or otherwise initiate the foreclosure process unless it isthe holder of the beneficial interest under the mortgage or deed of trust, the original trustee or the substituted trustee under the deed of trust, or the designated agent of the holder of the beneficial interest. 10 No agent of the holder of the beneficial interest under the mortgage or deed of trust, original Ad. trustee or substituted trustee under the deed of trust may record a notice of default or otherwise 12 commence the foreclosure process except when acting within the scope of authority designated 13 by the holder of the beneficial interest. 14 24. Defendants lack authority to conduct a nonjudicial foreclosure sale under California 15 Civil Code §2924(a)(6), which forbids an entity from recording a notice of default (or causing a 16 notice of default to be recorded) or otherwise initiating a trustee sale unless itis the beneficial 17 holder of an interest in a valid deed of trust,or the designated agent of such a holder. Plaintiffs 18 are informed and believe that Defendants lacked such authority because none has any interest in 19 a valid note and deed of trust against the Subject Property. Plaintiffs are not required to tender 20 the amount owing under these circumstances as a condition of obtaining relief from the Court as 21 Defendants’ conduct would make itinequitable. 22 2D: Defendants have also failed to comply with the HBOR, which governs preforeclosure 23 activity and conduct of mortgage servicers and trustees in connection with a nonjudicial 24 foreclosure sale affecting Plaintiffs’ real property, inthat Defendants violated California Civil 25 Code §2923.5 (formerly 2923.55) which provides for injunctive relief ifthe trustee’s sale has yet to 26 be conducted. 27 26. At alltimes herein relevant, Defendants were either aware that none had the right to 28 record the notices, assignments and substitutions at issue on titleto Plaintiffs’ property or COMPLAINT -4- lacked reasonable grounds to believe they had such rights as each were aware that none was never assigned a promissory note signed by Plaintiffs. 27. An actual controversy exists between Plaintiffs and Defendants concerning their respective rights and duties pertaining to any promissory note, deed of trust, the Subject Property and the described transactions. 28. Plaintiffs have been, and will continue to be, seriously injured unless Defendants’ foreclosure proceedings and other activities complained of are not preliminarily and permanently enjoined. Plaintiffs will suffer irreparable injury of a continuing nature that cannot be adequately calculated or compensated in money damages because of the looming trustee’s 10 sale of Plaintiffs’ home. it 29. Plaintiffs desire a judicial determination and declaration of Plaintiffs’ and Defendants’ 12 respective rights and duties; specifically, that Defendants have no present rights to the Subject 13 Property. Such a declaration is appropriate atthis time so that Plaintiffs may determine their 14 rights and duties since aNotice of Default was recently recorded against the Subject Property. 15 SECOND CAUSE OF ACTION 16 Cancellation of Instruments (Against All Defendants) 17 18 30. Plaintiffs reallege and incorporate by reference the allegations set forth above. 19 31. California Civil Code §3412 provides that, a written instrument, in respect to which 20 there is a reasonable apprehension that ifleft outstanding itmay cause serious injury to aperson 21 against whom itis void or voidable, may, upon his application, be so adjudged, and ordered to 22 be delivered up or canceled. 23 32. There are in existence certain written instruments recorded on titleto the Subject 24 Property that purport to be assignments of a deed of trustmemorializing a secured debt, a 25 substitution of trustee under that deed of trust, and notice of default. 26 33. If leftoutstanding, these instruments will continue to cause serious injury to Plaintiffs 27 including because Defendants commenced a nonjudicial foreclosure of the Subject Property 28 under color of authority provided by those instruments. COMPLAINT pan 5 -_ 34. If leftoutstanding, the assignments of a deed of trust,the substitution of trustee, and the notice of default will continue to cause serious injury to Plaintiffs including because Defendants commenced a nonjudicial foreclosure sale according to its terms and such false representations on title to the Subject Property inevitably reduces itsvalue. THIRD CAUSE OF ACTION Slander of Title (Against All Defendants) 35. Plaintiffs reallege and incorporate by reference the allegations set forth above. 36. Plaintiffs allege that the assignments of a deed of trust,the substitution of trustee, and the 10 notice of default contain false statements as alleged hereinabove. 11 37. These false statements disparaged Plaintiffs’ title. 12 38. Plaintiffs allege that Defendants did not have any privilege to act in the manner they did 13 as they published these false statements with malice as the recording of these instruments on 14 titleto Plaintiffs’ property was done with, at aminimum, Defendants lacking reasonable 15 grounds to believe in the truth of their contents. 16 39. | Asa proximate cause of the Defendants’ conduct as herein alleged, Plaintiffs’ personal 17 residence may be sold at a trustee’s sale. Plaintiffs have suffered, and will continue to suffer, 18 damages the exact amount of which have not been fully ascertained but are within the 19 jurisdiction of this Court. Plaintiffs are entitled to incidental and consequential expenses and 20 damages in an amount to be shown atthe time of trial. In addition, Plaintiffs have further been 21 forced to retain a law firm to enforce their rights and have incurred and will incur costs and 22 reasonable attorney fees in connection herewith, recovery of which Plaintiffs are entitled to 23 according to proof. 24 40. Defendants acted fraudulently, maliciously and oppressively with a conscious, reckless 25 and willful disregard, and/or with callous disregard, of the probable detrimental and economic 26 consequences to Plaintiffs, and to the direct benefit of Defendants, knowing that their conduct, 27 was substantially certain to vex, annoy, and injure Plaintiffs and entitle them to punitive 28 COMPLAINT -6- damages under California Civil Code §3294, inan amount sufficient to punish or make an example of Defendants. FOURTH CAUSE OF ACTION Violations of Civil Code §2923.5: Failure to Explore Foreclosure Avoidance (Against All Defendants) 41. Plaintiffs reallege and incorporate by reference the allegations set forth above. 42. California Civil Code §2923.5, formerly California Civil Code §2923.55, provides, in part, that a mortgage servicer shall contact a borrower in person or by telephone in order to assess the borrower's financial situation and explore options for the borrower to avoid 10 foreclosure. During the initial contact, the mortgage servicer shall advise the borrower that he 11 or she has the right to request a subsequent meeting and, ifrequested, the mortgage servicer 12 shall schedule the meeting to occur within 14 days. The assessment of the borrower's financial 13 situation and discussion of options may occur during the firstcontact, or at the subsequent 14 meeting scheduled for that purpose. In either case, the borrower shall be provided the toll-free 15 telephone number made available by the United States Department of Housing and Urban 16 Development (HUD) to find a HUD-certified housing counseling agency. Any meeting may 7 occur telephonically. If unable to contact the borrower, the servicer must show due diligence in 18 attempting to make contact. 19 43. Plaintiffs are members of the group entitled to protection under this code section. 20 44. Plaintiffs allege that Defendants failed to meet the requirements of this code section as 21 Plaintiffs were not contacted to discuss theirfinancial situation and explore foreclosure avoidance 22 options prior to the recording of the notice of default. 23 4S. As a result of Defendants’ intentional, reckless and/or willful violation of this code section, 24 Plaintiffs are entitled to the greater injunctive relief restraining the foreclosure process pursuant to 25 California Civil Code §2924.12(a). In addition, Plaintiffshave been forced as a result of 26 Defendants’ violations to retain a law firm to enforce their rights,and have incurred and will 21 continue to incur costs and reasonable attorney fees in connection herewith, recovery of which 28 Plaintiffs are entitled according to California Civil Code §2924.12(i). COMPLAINT =7- FIFTH CAUSE OF ACTION Violations of Civil Code §§1788, et seq.: Rosenthal Fair Debt Collection Practices Act (Against All Defendants) 46. Plaintiffs reallege and incorporate by reference the allegations set forth above. 47. Plaintiffs are, and at all times herein relevant were, “consumers,” and the debt at issue a “consumer debt,” as defined by California Civil Code §§1788, et seg. (““RFDCPA”). 48. | Defendants are, and at all times herein relevant were, “debt collectors” engaging in “debt collection” practices under the RFDCPA. 49. Defendants violated the RFDCPA by using false, deceptive and misleading statements in 10 connection with their efforts to collect on a note and deed of trust. 11 50. Defendants violated section 1788.10(e) by making the threat to Plaintiffs that 12 nonpayment of a debt would result in the sale of the Subject Property when such action was not 13 permitted by law because they could not enforce the note and deed of trust they claimed to be 14 enforcing and because none complied with the HBOR beforehand. 15 51. | Defendants violated section 1788.13(e) by making the false representation to Plaintiffs 16 that a debt owed to them would be increased by the addition of attorney fees, investigation fees, 17 service fees, finance charges, or other charges when such charges could not be legally be added 18 to any existing obligation of their because they could not enforce the note and deed of trust they 19 claimed to be enforcing and because none complied with the HBOR beforehand. 20 52. Defendants violated section 1788.13(l) by making the communication to a Plaintiffs 21 demanding money under a debt owed to them when they had not been assigned any such debt. 22 53. Defendants violated section 1788.17 for failure to comply with the provisions of 23 sections 1692b to 1692), and are subject to the remedies in section 1692k of, Title 15 of the 24 United States Code. 25 54. Defendants violated 15 USC §1692e of the federal Fair Debt Collection Practices Act 26 (“FDCPA”) by using false, deceptive and misleading representations and means in connection 27 with their efforts to collect on a note and deed of trust. 28 COMPLAINT -8- 55. Defendants violated 15 USC §1692e(2)(A) of the FDCPA by falsely representing the character, amount and legal status of a debt as alleged hereinabove. 56. Defendants violated 15 USC §1692e(8) of the FDCPA by communicating credit information about Plaintiffs that itknew or should have known was false as alleged hereinabove. ad: Defendants violated 15 USC §1692e(10) of the FDCPA by using false representations and deceptive means to collect or attempt to collect a debt from Plaintiffs as alleged hereinabove. 58. Defendants violated 15 USC §1692f of the federal FDCPA by using unfair and 10 unconscionable means as alleged hereinabove in connection with the efforts to collect from 11 Plaintiffs on a promissory note and deed of trust. 12 59. Defendants violated 15 USC §1692f(6) by threatening to take a nonjudicial action to 13 effect dispossession or disablement of Plaintiffs’ real property with no present right to 14 possession of the Subject Property they claim iscollateral. 15 60. Asa proximate cause of the Defendants’ conduct as herein alleged, Plaintiffs are now 16 subject to foreclosure proceedings and the loss of their personal residence. Plaintiffs have 17 suffered, and will continue to suffer, damages the exact amount of which have not been fully 18 ascertained but are within the jurisdiction of this Court. In addition, Plaintiffs have further been 19 forced to retain a law firm to enforce their rights and have incurred and will incur costs and 20 reasonable attorney fees in connection herewith, recovery of which Plaintiffs are entitled to 21 according to California Civil Code §1788.30(c). 22 23 SIXTH CAUSE OF ACTION 24 Negligence & Negligence Per Se (Against All Defendants) 25 26 61. Plaintiffs reallege and incorporate by reference the allegations set forth above. 27 62. Defendants owed Plaintiffs a duty of care to maintain proper records and provide 28 accurate information about loans as well as not record assignments of deeds of trust stating an COMPLAINT -9- assignment of a promissory note and deed of trust were assigned to other persons or entities took place when no such assignments occurred. 63. | Defendants breached the duty to maintain proper records, provide accurate information about loans and refrain from recording false assignments of the deed of trust when these Defendants recorded the assignments on titleto Plaintiffs’ home. These assignments contained false representations about who owned and had the right to assign Plaintiffs’ note and deed of trust and false representations that the note and deed of trust were assigned when they were not. 64. Defendants’ recording of the false assignments was intended to affect the Plaintiffs as it was recorded on titleto their home to allow these Defendants to appear that they had the rights 10 to act as Plaintiffs’ mortgage servicers and promissory note beneficiary and thereafter foreclose ra on and evict Plaintiffs from their home. 12 65. Itwas entirely foreseeable to Defendants that recording false documents on titleto 13 Plaintiffs’ home could result in significant harm to the Plaintiffs. 14 66. Defendants’ publicly recording false assignments caused Plaintiffs to incur costs and 15 expenses incurred to prevent or fight foreclosure and caused them to lose titleto their home and 16 be sued for unlawful detainer, and other damages. 17 67. Defendants also owed Plaintiffs a duty to refrain from recording substitutions of trustee 18 stating a beneficiary of a promissory note was substituting a new trustee under a deed of trust 19 when the entity identified as the beneficiary isnot the beneficiary and therefore no such 20 substitution is allowed or has occurred or notices of default and of trustee’s sale without the 21 present right to do so. 22 68. | Defendants breached the duty to refrain from recording false substitutions of trustee 23 when these Defendants recorded the substitution of trustee on titleto Plaintiffs’ home. The 24 substitution contained false representations about who owned and had the right to substitute a 25 trustee under the deed of trust. 26 69. Defendants also breached the duty to refrain from recording false notices when these 27 Defendants recorded the notice of default on titleto Plaintiffs’ home. 28 COMPLAINT -70- 70. | Defendants recording of the false substitution and notices were intended to affect the Plaintiffs as the were recorded on title totheir home to allow these Defendants to appear that they had the rights to act as Plaintiffs’ mortgage servicers and promissory note beneficiary and thereafter foreclose on and evict Plaintiffs from their home. 71. Itwas entirely foreseeable to Defendants that recording false documents on titleto Plaintiffs’ home could result in significant harm to the Plaintiffs. 72. Defendants’ publicly recording the substitution and notices caused Plaintiffs caused them to incur costs and expenses incurred to prevent or fight foreclosure and other damages. 73. Furthermore, assuming arguendo that FAW was acting as servicer for the beneficiary of 10 Plaintiffs’ promissory note and deed of trust, Defendants owed Plaintiffs a duty of care with Ld respect to their handling and review of Plaintiffs’ loan modification applications as they agreed 12 to review them. 13 74. | Anagreement to provide services (in contrast to one for the sale of goods), such as 14 undertaking to review a loan modification, gives rise to a duty of care, which requires that the 15 services contemplated be performed in a competent and reasonable manner and that a negligent 16 failure to do so may be both a breach of contract and a tort. 17 75. Defendants’ reviews of the loan modification applications were intended to affect the 18 Plaintiffs. 19 76. Itwas entirely foreseeable to Defendants that failing to timely and carefully process 20 Plaintiffs’ loan modification applications could result in significant harm to the Plaintiffs. 21 77. Defendants’ mishandling of Plaintiffs’ applications deterred them from seeking other 22 remedies to address their mortgage, damaged their credit, created additional income tax liability, 23 caused them to incur costs and expenses incurred to prevent or fight foreclosure, deprived them 24 of the possibility of obtaining the requested relief offered by Defendants, caused them to lose 25 titleto their home and be sued for unlawful detainer, and other damages. 26 78. Defendants also knew or should have known that their agents that executed and 27 facilitated the execution and recording of the title documents, and those tasked with evaluating 28 COMPLAINT -1ll1- loan modification applications, were unfit and incompetent and that this unfitness and incompetency created a particular risk,and did create such a risk to others, such as Plaintiffs. 79. The failure of a person to exercise due care ispresumed if they violated a statute, ordinance, or regulation of apublic entity,the violation proximately caused injury to person or property, the injury resulted from an occurrence of the nature which the statute, ordinance, or regulation was designed to prevent, and the person suffering the injury to his person or property was one of the class of persons for whose protection the statute, ordinance, or regulation was adopted. 80. As alleged hereinabove, Defendants violated sections 1692e, 1692e(2)(A), 1692e(8), 10 1692e(10), 1692f, 1692f(6) of Title 15 of the United States Code, Real Estate Settlement 11 Procedures Act, 12 U.S.C. §2605(e) and 12 CFR §§1024.35 and 1024.36, and sections 1788, et 12 seq., 2923.5 and 2924(a)(6) of the California Civil Code. 13 81. Defendants owed duties of care to Plaintiffs, including but not limited to complying with 14 the statutes listed above. The conduct prescribed by the statutes isthe standard of care. A 15 violation of a statute is presumed to be negligence. 16 82. | Defendants breached to the duty to exercise ordinary care and breached the duties to 17 comply with the statutes listed above, and therefore the attendant standards of care, by engaging 18 in the conduct complained of. This conduct includes enforcing a note and deed to attempt to 19 wrongly dispossess Plaintiffs of the Subject Property and recording documents on titlewithout 20 the proper authorization and in a manner not in compliance with California's nonjudicial 21 foreclosure statutes. 22 83. Plaintiffs’ damages result from the violations of these statutes. As such, Plaintiffs are 23 within the class of persons these statutes were enacted to protect. 24 SEVENTH CAUSE OF ACTION 25 Violations of Business & Professions Code §§17200, et seq.: 26 Fraudulent, Unlawful and Unfair Business Practices (Against All Defendants) 27 28 84. Plaintiffs reallege and incorporate by reference the allegations set forth above. COMPLAINT -12- 85. Plaintiffs are informed and believe, and on that basis allege, that Defendants’ acts, as alleged hereinabove, constitute unlawful, unfair and/or fraudulent business practices, as defined by California Business and Professions Code §§17200, et seg. (“UCL”). 86. Defendants engaged in “fraudulent” practices under the UCL because their inaccurate statements regarding the loan modification process and their actions committed against Plaintiffs in pursuing nonjudicial foreclosure without any authority to do so are practices likely to deceive the public. 87. Defendants engaged in “unlawful” practices under the UCL based on the common law causes of action and statutory violations complained of herein. 10 88. Defendants engaged in “unfair” practices under the UCL because their statements a. regarding the identity of the beneficiary of the promissory note and deed of trust and those 12 related to the loan modification process were misleading and the conduct described hereinabove a3 violated the laws and underlying legislative policies designed to prevent foreclosures. 14 89. Plaintiffs lost money and property as aresult of these unlawful, unfair, and fraudulent 15 practices. 16 WHEREFORE, Plaintiffs pray for judgment against Defendants, and each of them, as 17 follows: 18 1. For a declaration of the rights and duties of the parties; specifically that the 19 assignments of a deed of trust, substitution of trustee under that deed of trust and 20 the notice of default be declared void and that Defendants had no right to pursue 21 collection or conduct a trustee’s sale of the Subject Property. 22 Ds For an order that Defendants deliver any purported assignments of the deed of 23 trust, substitution of trustee under that deed of trust, and notice of default 24 forthwith to the clerk of the Court for cancellation. 25 3. For injunctive relief preventing Defendants from engaging in any sale, transfer, 26 conveyance, actions or any other conduct adverse to Plaintiffs’ interests in the 27 Subject Property. 28 COMPLAINT -13- For the Court to render an accounting between Plaintiffs and Defendants determining any amounts owed. For compensatory damages in an amount to be determined by proof at trial. For special damages in an amount to be determined by proof at trial. ND For general damages in an amount to be determined by proof attrial. For statutory damages in an amount to be determined by proof at trial. om For treble damages in an amount to be determined by proof attrial. For restitution in an amount to be determined by proof at trial. 11. For disgorgement of sums wrongfully obtained in an amount to be determined by 10 proof at trial. 11 12. For punitive damages. 12 13. For reasonable attorney fees, costs and expenses of litigation, according to 13 statute and/or proof. 14 14. For any prejudgment or other interest according to law. 15 15. For any other relief that this Court deems equitable and proper. 16 JURY DEMAND 17 Plaintiffs hereby demand trialby jury. 18 DATED: September 28, 2018 Respectfully submitted, 19 SMART LAW OFFICES 20 21