Preview
Superior Court of California
Sara M. Knowles (SBN 216139) County of Butte
LELAND, MORRISSEY & KNOWLES LLP
1660 Humboldt Road, Suite 6 3/12/2021
Chico, CA 95928
Telephone: (530) 342-4500
Facsimile: (530) 345-6836 By Deputy
Electronically FILED
Attorney for Conservator John Denton for Defendant and
Cross-Complainant Edward F. Niderost, Individually and as
Trustee of the Edward F. Niderost Revocable Living Trust
Dated November 8, 1998
SUPERIOR COURT OF CALIFORNIA,
COUNTY OF BUTTE
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WAYNE A. COOK, TRUSTEE OF THE CASE NO. 20CV00905
12 WAYNE A. COOK 1998 FAMILY TRUST
DATED 12/29/98, NOTICE OF EX PARTE APPLICATION
13 AND EX PARTE APPLICATION FOR
Plaintiff, COURT ORDER REQUESTING LEAVE
14 TO AMEND CROSS-COMPLAINT,
¥. BIFURCATION OF CAUSE OF ACTION
15 AS TO BILL CHANCE,OR
| EDWARD F. NIDEROST, INDIVIDUALLY ALTERNATIELY AN ORDER
16 | AND AS TRUSTEE OF THE EDWARD F. SHORTENING TIME; MEMORANDUM
| NIDEROST REVOCABLE LIVING TRUST OF POINTS AND AUTHORITIES;
17 DATED NOVEMBER 8, 1998, DOES 1 DECLARATION OF SARA M.
THROUGH 10, KNOWLES; [PROPOSED] ORDER
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|1 Defendants. Hearing Date: March 12, 2021
19 Time: 1:30 P.M.
AND RELATED CROSS-ACTION Dept.: TBD
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23 PLEASE TAKE NOTICE that John Denton, conservator for Defendant and Cross
24 Complainant Edward F. Niderost and successor trustee of the Edward F. Niderost Revocable
25 | Living Trust, dated November 8, 1998 (“Conservator”)’s Ex Parte Application for Court Order
26 ' for Leave To Amend Cross-Complaint, Bifurcation of Issues (or alternatively for an order
27 shortening time) shall be presented on March 12, 2021 at 1:30 P.M. at the Butte County Superior
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NOTICE OF EX PARTE APPLICATION AND EX PARTE APPLICATION FOR COURT ORDER: MEMORANDUM OF POINTS AND
| AUTHORITIES, DECLARATION OF SARA M. KNOWLES; [PROPOSED] ORDER:
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Court, located at 1775 Concord Avenue, Chico, California, or on such other date and time that
the Court deems appropriate. Participants may appear telephonically utilizing CourtCall.
Conservator’s Ex Parte Application for Court Order for Leave to Amend Cross-
Complaint and Bifurcation (or alternatively for an order shortening time) shall be based upon the
Memorandum of Points and Authorities in support thereof submitted herewith and the
Declaration of Sara M. Knowles in support thereof submitted herewith..
I EX PARTE APPLICATION FOR COURT ORDER
1 Conservator requests a Court Order for leave to amend the cross-compiaint to
10 delete references to a deficiency judgment (paragraphs 29 and 30), to add additional facts
11 discovered through depositions (such as the action of Plaintiff acting as an unlicensed mortgage
12 broker), to remove the reference to predatory lending and to include exhibits that were
13 inadvertently omitted. Leave is also requested to specify additional facts pertaining to a breach
14 of fiduciary duty as to Bill Chance who was substituted in as ROE defendant. In addition, the ex
15 parte application seeks to have any claims as to Mr. Chance bifurcated for trial at a later
16 date. Alternatively, Conservator requests that the court grant an order shortening time so that
17 this matter may be heard in connection with the matters on calendar, in this case, and set for
18 March 17, 2021 at 9:00 am.
19 2. The parties, and their counsel (if applicable), is as follows: Wayne A. Cook,
20 Trustee of the Wayne A. Cook 1998 Family Trust Dated 12/29/98 represented by Raymond
21 Sandleman; Lawrence Patterson represented by Larry Lushanko; Eugene (Gene) Culley self-
22 represented; William Chance self-represented; Mid Valley Title and Escrow; Edward F.
23 Niderost, individually and as Trustee of the Edward F. Niderost Revocable Living Trust Dated
24 November 8, 1998 represented by Guardian Ad Litem, Erwin Williams; John Denton,
25 Conservator for Edward F. Niderost and Successor Trustee of the Edward F. Niderost Revocable
26 Living Trust dated November 8, 1998 represented by Sara M. Knowles.
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j AUTHORITIES; DECLARATION OF SARA M. KNOWLES; [PROPOSED] ORDER
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3. This is the first ex parte application of this nature filed in this matter by
Conservator. A prior application for ex parte relief was filed by Conservator seeking
appointment of a Guardian Ad Litem. That application was denied and the matter was
subsequently reheard via a noticed motion.
4 The declaration of Sara Knowles is filed herewith, and is incorporated herein by
reference showing an affirmative factual showing of irreparable harm in the event that this ex
parte application is not granted.
II. STATEMENT PURSUANT TO CALIFORNIA RULES OF COURT, RULE 3.1324.
10 1 A copy of the proposed amended pleading is attached to the Declaration of Sara
11 Knowles as Exhibit A. A copy of the redlined pleading, showing changes, additions and
12 deletions, is attached to the Declaration of Sara Knowles as Exhibit B.
13 2 The revisions to the First Amended Cross-Complaint (““FACC”), (which would
14 result in the Second Amended Cross-Complaint (“SACC”)) are as follows:
15 a. Deletion of the word “FIRST” in the FACC and addition of the words
16 “[PROPOSED] SECOND” in the title on page 1, line 12 of the SACC.
17 b. Deletion of “PREDATORY LENDING?” in the title of the FACC on page
18 1, line 16.
19 ©. Addition of “William Chance” in the caption on page 1, line 26 of the
20 SACC.
21 d. Deletion of “Mr. Cook, Mr. Patterson, and Mr. Culley are sometimes
22 hereinafter collectively referred to as “Cross-Defendants.” On page 3, paragraph 10,
23 line10 of the FACC.
24 €. Addition of “William Chance (“Mr. Chance”) is a real estate broker
25 licensed in the State of California. Mr. Chance was the listing broker for Mr. Cook as to
26 the Miller Mansion.” On page 3, paragraph 10, line 10 of the SACC.
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f. Addition of the words “various” and “some of the” on page 3, paragraph
12, line 15 of the SACC.
&. Addition of “Mr. Culley refuses to accept the authority of this Court with
respect to its orders designating John Denton as both the conservator of the Estate of
Edward F. Niderost and as successor trustee of the Edward F. Niderost Revocable Living
Trust Dated November 8, 1998.” On page 4, paragraph 16, lines 16-19 of the SACC.
h Addition of “Mr. Chance represented both Mr. Cook and Mr. Niderost, as a
dual agent, in this transaction. Mr. Chance took no measure to ascertain whether Mr.
Niderost had the income to purchase the Miller Mansion or make any payments on any
10 notes.” On page 5, paragraph 27, lines 20-22 of the SACC.
11 1, Deletion of “Bill Chance represented both partics as broker and agent.” On
12 page 6, paragraph 29, line 14 of the FACC.
13 J Addition of “Bill Chance did not attempt to ensure that Mr. Niderost knew
14 the effect of these terms, nor did he represent the best interest of Mr. Niderost in the
15 transaction.” On page 6, paragraph 30, lines 20-21 of the SACC.
16 k. Addition of “Mr. Cook is not a licensed loan broker. Pursuant to Business
17 and Professions Code 101166.02 a person who arranges a loan must be licensed. When
18 Mr. Cook arranged the loan for Dr. Fine, he was acting in violation of Business and
19 Professions Code 101166.02 and thus created an illegal contract pursuant to Business and
20 Professions Code 10130.” On page 7, paragraph 33, lines 5-8 of the SACC.
21 1 Deletion of “The increase in price was a surprise to Mr. Niderost.” On page
22 7, paragraph 34, lines 13-14 of the FACC.
23 | m Addition of “Bill Chance offered no independent advice for Mr. Niderost”
24 on page 7-8, paragraph 37, lines 27-1 of the SACC.
25 Nn. Deletion of “a 150 year old” on page 7, paragraph 36, line 19 of the FACC.
26 9. Addition of “an aging” on page 8, paragraph 38, line 3 of the Proposed
27 SACC,
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NOTICE OF EX PARTE APPLICATION AND EX PARTE APPLICATION FOR COURT ORDER: MEMORANDUM OF POINTS AND
AUTHORITIES; DECLARATION OF SARA M. KNOWLES; [PROPOSED] ORDER.
P. Deletion of “After the Trustee’s Sale (cither via judicial or non-judicial
foreclosure), on the Dr. Fine Note and Deed of Trust, Mr. Cook would then have the
ability to attempt to recover the funds allegedly due him as a ‘sold out junior’. Mr. Cooks
admits this fact in §6, lines 6-7, of his Complaint. The foregoing description of the effect
of the two notes and deeds of trust, as well as the assignment of rents and the legal
remedies are hereinafter referred to as the “Financing Scheme”.” On page 8, paragraph 39,
lines 9-14 of the FACC.
q. Deletion of “and/or with the intent to defraud, although” on page 9,
paragraph 44, lines 4-5 of the FACC.
10 Tr. Addition of “AND CHANCE” to title on page 13, line 2 of the Proposed
1 SACC.
12 8. Addition of “As a real estate broker for Mr. Niderost, Mr. Chance held a
13 position of trust and confidence and owed a fiduciary duty to Mr. Niderost.” On page 13,
14 paragraph 71, lines 10-11 of the SACC.
15 t. Addition of “Mr. Chance failed to provide adequate advice or
16 recommendations and failed to ensure that the transaction was adequate, fair, reasonable,
17 and in the best interest of Mr. Niderost. Mr. Chance did not fully disclose all material facts
18 regarding the transaction that might have affected Mr. Niderost’s decision and thus
19 breached his fiduciary duties. There was no effort on the part of Mr. Chance to suggest
20 alternate terms to the transaction, such as making the deposit refundable, including an
21 inspection period of greater than one day, determining if the zoning would have impeded
22 Mr. Niderost’s plan, and/or requiring an appraisal.” On page 13, paragraph 73, lines 16-22
23 of the SACC.
24 u. Addition of “and Mr. Chance” on page 14, paragraph 75, line 4 of the
25 SACC.
26 Vv, Addition of “and Mr. Chance” on page 14, paragraph 75, line 6 of the
27 SACC,
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| NOTICE OF EX PARTE APPLICATION AND EX PARTE APPLICATION FOR COURT ORDER; MEMORANDUM OF POINTS AND.
AUTHORITIES; DECLARATION OF SARA M. KNOWLES; [PROPOSED] ORDER.
wW. Deletion of “PREDATORY LENDING” on page 14, line 11 of the FACC.
x, Deletion of:
“77. The Office of Controller of the Currency defines
“Predatory Lending” as any lien secured by real estate which shares well-
known common characteristics that result in unfair and deceptive business
act under California Business and Professions Code §§ 17200, et seq.
78. The acts undertaken by the Mr. Patterson and Mr. Cook
herein, especially with respect to the Financing Scheme, are consistent
with the Office of the Comptroller’s definition of an unfair and/or
10 deceptive business act, They include the fact that the loans delineated in
11 the underlying Complaint were made at a time when Mr. Patterson and
12 Mr. Cook knew or should have known that Cross-Complainant, at 82
13 years of age, was suffering from a cognitive disorder and/or condition and
14 was vulnerable to being taken advantage of.
15 79. Mr. Cook and Dr. Fine, by and through their lending
16 practice, failed to comply with the Ability to Pay and Qualified Mortgage
17 Standards Under the Truth in Lending Act (12 CFR Part 1026), the Truth
18 in Lending Act (15 USC 1601 et. seq.), the Dodd Frank Wall Street
19 Reform and Consumer Protection Act, the Higher-Priced Mortgage Loan
20 (Section 35 of Regulations Z) and the Real Estate Settlement Procedure
21 Act of 1974 (12 USC 2601 et seq.) by failing to determine if Cross-
22 Complainant could repay the notes, failure to create an escrow account
23 for property taxes and homeowner’s insurance, the failure to obtain a third
24 party appraisal, and failure to provide adequate disclosures, good faith
25 settlement/estimate statements, an accounting of the settlement
26 transaction, or information booklet.
27 Both Mr. Cook and Dr. Fine are creditors pursuant to the Truth in Lending
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NOTICE OF EX PARTE APPLICATION AND EX PARTE APPLICATION FOR COURT ORDER; MEMORANDUM OF POINTS AND
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Act (15 USCA §§ 1601 et. seq.) because both have regularly extended
20 consumer credit and are the person to whom the debt arises from a
consumer credit transaction is payable on the face of the indebtedness.
4) From 2010 through 2020, Mr. Cook, either as an individual or in his
capacity as a trustee of the Wayne A. Cook 1998 Family Trust, or the
Wayne A. Cook Revocable Inter vivos Trust was a party to at least 77
deeds of trust. Of these 77 transactions, on October 29, 2018 and May 23,
2019, two separate Deeds of Trust were recorded wherein Mr. Cook was
extended consumer credit to individuals.
10 Each of these two Deeds of Trust are subject to a financial charge or is
11 payable by a written agreement in more than four installments, which
12 makes Mr. Cook a creditor under the Higher-Price Mortgage Loan Act (12
13 C.F.P. 1026)
14 Dr. Fine, through his 401(k) plan and through his defined benefit plan has
15 regularly extended credit from 2010 to the present as evidenced by over 16
16 transactions recorded in the Butte County Recorder’s Office.”
17 On pages 14 — 15, paragraphs 77 — 79 of the FACC.
18 y. Addition of “Mr. Cook arranged the loan from Dr. Fine to Mr.
19 Niderost. Mr. Cook is not a mortgage loan broker and acted in violation of
20 Business and Professions Code § 10130 and 101166.02.” on page 15, paragraph
21 81, lines 6-8 of the SACC.
22 Zz. The removal of “Cross-Defendants” and addition of “Mr. Cook” on
23 page 15, paragraph 82, line 9.
24 aa. The deletion of “Mr. Patterson” on page 15, paragraph 81, line 22
25 of the FACC,
26 bb. The addition of “and is not entitled to any gain due to his unlawful
27 acts of arranging a loan.” On page 15, paragraph 83, line 13 of the SACC.
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ce. The deletion of “predatory lending practices” and the addition of
“the violation of Business and Professions Code §10130 and §101166.02” on page
15-16, paragraph 87, lines 28-1 of the FACC.
dd. Re-Numbering of paragraphs 27 — 86 to 27 — 88.
ee. Addition of Exhibits A—J to SACC, which were inadvertently
omitted from FACC.
Respectfully submitted,
9 LELAND, MORRISSEY & KNOWLES LLP
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et oo
11 Dated: March 11, 2021 “tf? ret
12 a M. Knowles
Attorney for Conservator John Denton for
13 Defendant and Cross-Complainant Edward F.
Niderost, Individually and as Trustee of the Edward
14 F. Niderost Revocable Living Trust Dated
November 8, 1998
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MEMORANDLM OF POINTS AND AUTHORITIES
I. Facts
This matter originally commenced, less than a year ago, on April 22, 2020 as Judicial
Foreclosure matter. A Cross-Complaint was filed on behalf of Edward F. Niderost on June 12,
2020. Due to COVID -19 there was a stay in place as to the Judicial Foreclosure matter until
approximately September 1, 2020. No depositions were taken in this matter, by any party, until
after a Guardian Ad Litem was appointed for Mr. Niderost on October 28, 2020. Mr. Denton’s
deposition was taken first on December 29, 2021. Mr. Niderost’s deposition occurred in late
January of 2021, after the Court ordered a bifurcation of issues and granted preference to this
10 matter. Other depositions followed Mr. Niderost’s and the deposition was taken of Mr. Cook on
11 January 21, 2021 and Mr. Chance on February 25, 2021. The written transcripts were not
12 available until March 4 and March 3, 2021, respectively. This matter is set for trial on March 29,
13 2021.
14 During the deposition of Mr. Chance it was discovered that he, as a real estate broker, did
15 not arrange the financing that is at issue in this case. This was confirmed after review of his
16 deposition transcript. Mr. Denton, on behalf of Mr. Niderost, seeks to add Mr. Chance as a party
17 | to this matter, with a cause of action for breach of fiduciary duty. Mr. Denton seeks to have the
18 matter, as to Mr. Chance, be bifurcated and tried separately. In addition, Mr. Denton seeks, by
19 this ex parte application, to obtain leave to amend the First Amended Cross-Complaint to delete
20 various references to predatory lending and to include additional facts regarding the actions of
21 Mr, Cook in violation of Business and Professions Code sections 10130 and 101166.02. In the
22 event that the Court would prefer, Mr. Denton seeks as an alternate relief to this ex parte
23 application that this matter be advanced to the law and motion 9:00 a.m. calendar for March 17,
24 2021 pursuant to an order shortening time, and that this matter be heard on that date and at that
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I. LEGAL ARGUMENT
A. Ex Parte Relief is Appropriate as Irreparable Harm Will Result if the Relief
Requested is Not Granted.
Unless Conservator’s requests for leave to amend are granted, irreparable harm will result
s Mr. Chance may not be included as a party and certain allegations against Mr. Cook will not
be included in the Cross-Complaint and may be subject to exclusion at trial. If this request is not
granted, justice may not be afforded, and this matter will not be heard fully on its merits, with all
claims regarding the controversy being heard by this Court. The ends of justice dictate that leave
to amend be granted to include Mr. Chance as a party to this action, with the claims as to him
bifurcated, and that additional facts regarding the role of Mr. Cook in arranging financing be
10 divulged to the Court. Additionally, Conservator seeks to remove certain claims and references
11 which appear to be no longer relevant, or accurate.
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13 B. The Court Must Grant Leave To Amend Compulsory Claims and the Failure
to Permit Leave May Bar a Portion of the Claims Against Mr. Cook.
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Generally, a cross-complaint is treated as an independent action. It is not dependent on
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plaintiff's action (The Rutter Group, 2020, 6.502). The issues raised by the cross-complaint are
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treated as “completely severable” from the issues raised by the original complaint and answer.
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See Bertero v. National Gen, Corp (1974) 13 C3d 51-52. A defendant always has the option of
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asserting a cause of action he or she has against the plaintiff in a cross complaint. CCP 428.10.
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However, if the defendant’s cause of action against plaintiff is related to the subject matter of the
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complaint, it must be raised by cross-complaint; failure to plea it will bar defendant from
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asserting it any later lawsuit. CCP section 426.30. Defendant’s cross-complaint is compulsory if
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| the cause of action “arises out of the same transaction, occurrence, or series of transactions or
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| occurrences as the causes of action . . . in [the] complaint.” CCP section 426.10.
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At any time during the course of the lawsuit, the court retains power to permit defendant
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‘also Silver Organizations Ltd. V. Frank (1990) 217 CA 3d 94, 98-99, (even on “eve of trial”
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leave to file compulsory cross-complaint mandatory absent bad faith. Admittedly, there is a split
of authority as to whether trial courts have any discretion to deny the request to file a cross-
complaint, (Requirement of good faith gives courts “a modicum of discretion” but the law
4 strongly favors granting leave (see Sidney v. Sup. Ct (Kinoshita) (1988) 198 CA3d 710, 718 vs.
5 the courts have no discretion to deny absent findings of bad faith based on substantial evidence.
6 || (see Silver Organizations Ltd. V. Frank, supra, 217 CA3d at 98-99.)
i Mr. Cook’s deposition occurred on January 21, 2021 but the transcript was not received
until March 4, 2021. Mr. Chance’s deposition occurred on February 25, 2021, but the transcript
was not made available until March 3, 2021.
10 The claims as to Mr. Cook engaging in actions that are to be done only by a licensed loan
11 broker are compulsory claims, and the court has the power to grant leave to amend. The judicial
12 policy of having all issues and facts before the Court dictates that leave be granted.
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Cc Leave to Amend Must Be Granted to Include a Breach of Fiduciary Duty
14 Claim Against Mr. Chance And That Claim is Bifurcated As It Is In The Interests of
15 Justice.
A defendant can cross-complain against a third person not yet a party to the action if the
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47 | cause of action asserted “arises out of the same transaction or asserts a claim or right in the
j controversy which is the subject of the cause of action. CCP section 428.10
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The judicial policy to settle all disputes between plaintiff and defendants in the same
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lawsuit, if possible. The Rutter Group, 2020 at 6:564, 6:508. A greater showing of “interest of
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| justice” is required to obtain leave to file a cross-complaint against a third person not yet a party
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to the action. The concern, in that case, is that the cross-complaint not unreasonably burden and
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| complicate plaintiff's lawsuit with cross-actions and third parties.
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24 Leave of court is granted liberally. The Rutter Group, 2020 at 6:611. 6:614, 6:638.
Leave to amend may be denied for unreasonable delay after plaintiff’ ascertains a “doe”
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defendant’s identify resulting in prejudice to the other party. 4.N. v. County of Los Angeles
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27 (2009) 171 CA4th 1058, 1068. The court may grant permission on ex parte application to amend
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a pleading “by adding or striking out the name of any party, or by correcting a mistake in the
name of a party, or a mistake in any other respect.” CCP section 473 (a)(1).
The grant of leave to amend must be construed as permission to the pleader to amend the
cause of action which he pleaded in the pleading to which the demurrer has been sustained.
People v. Clausen (1967) 248 CA 2d 770, 785-786; see also Harris v. Wachovia Mortg., FSB
(20210) 185 CA4th, 1018, 1023- plaintiff may not amend the complaint to add a new cause of
action without having obtained permission to do so.)
The claim against Mr. Chance arises out of the same facts and transaction, i.e. the sale of
the Miller Mansion to Mr. Niderost. As such, it is in the interest of justice that Mr. Chance be
10 added as a party, and that any causes of action against him be bifurcated so as to allow him time
11 to present any defense. Pursuant to CCP section 598, the court may, at any time, and on its own
12 motion, make an order for bifurcation at any time.
13 Mr. Chance’s deposition occurred on February 25, 2021. The transcript was not available
14 until March 3, 2021. Mr. Cook’s deposition transcript was not made available until March 4,
15 2021. A confirmation of the statements and basis for liability was not capable of being made
16 prior as the information was unknown. Additionally, given the status of COVID-19 and the
17 preference granted to this case, depositions occurred only in the last 60 days.
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19 Tl. Conclusion
20 In order to achieve the goals of justice, leave to amend must be granted to include
21 additional facts as to Mr. Cook and to include Mr. Chance as a party to this matter. The court is
22 requested to include any claims against Mr. Chance in the portion of this matter that has already
23 been bifurcated. If this relief is not granted on an ex parte basis, it is requested that this matter be
24 placed on the March 17, 2021 9:00 am law and motion calendar and be heard pursuant to an
25 order shortening time.
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Respectfully submitted,
LELAND, MORRISSEY & KNOWLES LLP
Dated: March 11, 2021
few 2, fe Binet £
‘Sara M. Knowles
Attorney for Conservator John Denton for
Defendant and Cross-Complainant Edward F.
Niderost, Individually and as Trustee of the Edward
F. Niderost Revocable Living Trust Dated
November 8, 1998
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DECLARATION OF SARA M. KNOWLES
I, Sara M. Knowles, declare as follows:
1 I am an attorney at law duly licensed to practice before all the Courts of the State
of California and am a partner with Leland, Morrissey & Knowles, LLP, attorneys of record for
Conservator John Denton for Defendant and Cross-Complainant Edward F. Niderost,
Individually and as Trustee of the Edward F. Niderost Revocable Living Trust Dated November
8, 1998.
2 If called upon as a witness to testify to any of the facts contained herein, I could
and would testify competently hereto based on personal knowledge.
10 3 I make this Declaration in support of the Ex Parte Application for Court Order
11 4 The effect of the proposed amendments are to add a basis for liability as to Wayne
12 A. Cook for his actions in arranging a mortgage loan in violation of Business and Professions
13 Code sections 10130 and 101166.02. Additionally, the proposed amendment would allow for the
14 deletion of extraneous matter and facts which have, during, the discovery process, proved to be
15 unfounded.
16 | 5 An additional effect of the proposed amendments is that it will allow the inclusion
17 of Bill Cook as a party to this matter, which the claims against him being heard at the same time
18 | as the matters which have already beer bifurcated.
19 i 6. The amendments specified within the motion are necessary and proper as they
20 comport to the facts as learned during depositions, which have only occurred in the last 60 days.
21 Such depositions were produced in written form for the examination on March 3 (Deposition of
22 Bill Chance) and March 4, 2021 (Deposition of Wayne A. Cook.)
23 7 The facts giving rise to these amended allegations were only confirmed and
24 discovered after a review of the deposition transcripts, which occurred after March 3 and 4,
25 2021.
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8 The request was not made earlier to amend as such facts were only discovered and
confirmed within the last 7-8 days. Depositions in this matter did not commence until the last 60
days.
9 No depositions occurred until December 24, 2020.
10. If the amendment is not permitted, certain claims against Mr. Cook may not be
introduced into evidence and the basis of liability barred. If the amendment as to Mr. Chance is
not permitted, justice will not be served as a party who is potentially liable will not be included
in this action. In short, if the amendment is not allowed, Mr. Niderost, the real party in interest,
will suffer irreparable harm as not all facts will be heard during trial and considered in this
10 matter, as dictated by justice.
11 I declare under penalty of perjury under the laws of the State of California that the
12 foregoing is true and correct. Executed this 1% day of March, 2021 at Chico, California.
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14 fe V2, Mae Mead
15 Sara M. Knowles ~
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NOTICE OF EX PARTE APPLICATION AND EX PARTE APPLICATION FOR COURT ORDER; MEMORANDUM OF POINTS AND
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EXHIBIT A
Sara M. Knowles (SBN 216139)
LELAND, MORRISSEY & KNOWLES 1p
1660 Humboldt Road, Suite 6
Chico, CA 95928
Telephone: (530) 342-4500
Facsimile: (530) 345-6836
Attorneys for John Denton, Conservator of the Estate of
Edward F, Niderost, Individually and as Successor Trustee of
the Edward F. Niderost Revocable Living Trust Dated
November 8, 1998
SUPERIOR COURT OF CALIFORNIA,
COUNTY OF BUTTE
10
WAYNE A..COOK, TRUSTEE OF THE CASE NO. 20CV00905
1 WAYNE A. COOK 1998 FAMILY TRUST
DATED 12/29/98, [PROPOSED] SECOND AMENDED
12 CROSS-COMPLAINT FOR ELDER
Plaintiff, ABUSE, COMMON COUNT, CIVIL
13
Vv.
CONSPIRACY FOR FRAUD,
14 INVOLUNTARY TRUST, FRAUD,
EDWARD F. NIDEROST, INDIVIDUALLY BREACH OF FIDUCIARY DUTY,
15 AND AS TRUSTEE OF THE EDWARD F. UNCONSCIONABILITY, BUSINESS &
NIDEROST REVOCABLE LIVING TRUST PROFESSIONS CODE §§17200, ET. SEQ.,
16 DATED NOVEMBER 8, 1998, DOES 1
THROUGH 10, and CANCELLATION OF
17 INSTRUMENTS.
Defendants.
18
EDWARD F. NIDEROST, INDIVIDUALLY
19 AND AS TRUSTEE OF THE EDWARD F.
NIDEROST REVOCABLE LIVING TRUST
20
DATED NOVEMBER 8, 1998,
21
Cross-Complainant,
22 Vv.
23 WAYNE A. COOK, INDIVIDUALLY AND
AS TRUSTEE OF THE WAYNE A. COOK
24 1998 FAMILY TRUST DATED 12/29/98;
LAWRENCE PATTERSON; GENE
25 CULLEY, MID VALLEY TITLE AND
ESCROW COMPANY; WILLIAM CHANCE
26
and ROES 1 through 25, inclusive,
27 Cross-Defendants.
28
I
[PROPOSED] SECOND AMENDED CROSS-COMPLAINT FOR ELDER ABUSE, COMMON COUNT, CIVIL CONSPIRACY FOR
FRAUD, INVOLUNTARY TRUST, FRAUD, BREACH OF FIDUCIARY DUTY, UNCONSCIONABILITY, BUSINESS &
PRAFESCIONS CANE RAIT7NA ET SEA and CANCEL ATION AF INGCTRITMENTS
Defendant and Cross-Complainant Edward F. Niderost (“Cross-Complainant”),
individually and as Trustee of the Edward F. Niderost Revocable Living Trust Dated November 8,
1998, alleges as follows:
1 Cross-Complainant is an individual who resides within the State of California,
County of Butte. Further, the place of administration of the Edward F, Niderost Revocable Living
Trust Dated November 8, 1998, of which Cross-Complainant is the trustee, is Butte County,
California.
2. Cross-Complainant turned 83 in the month of May 2020. Cross-Complainant
suffers from an unknown cognitive disorder or condition and is incapable of managing his own
10 affairs and assets. During the times referenced herein, Cross-Complainant was and still is married
11 to Yolanda Niderost (“Mrs. Niderost”). From December 2019 through April of 2020, Mrs.
12 Niderost was in her country of origin, Chile, and unable to return to the United States due to
13 COVID-19 travel bans. Mrs. Niderost speaks English as a second language. Cross-Complaint,
14 during the times referenced herein, was and is vulnerable to being taken advantage of.
15 3 Cross-Complainant’s assets are subject to a conservatorship, with the appointed
16 conservator being John Denton (“Conservator”). At all times relevant hereto, Conservator was a
17 resident of the State of California, County of Butte.
18 4 The Conservator brings this suit on behalf and in the name of Cross-Complainant,
19 who is the real party in interest.
20 5 Cross-Defendant Wayne A. Cook (“Mr. Cook”), individually and as trustee of the
21 Wayne A. Cook 1998 Family Trust Dated 12/29/98, at all times referred to herein resided in Butte
22 County, California. Mr. Cook is a sophisticated real estate developer and investor. By and through
23 his trust and the entities controlled by him, he owns several commercial structures, including
24 ollege rentals and the Hotel Diamond located in Chico, California.
25 6. Mr. Cook was the owner of real property known as 2185 Esplanade, Chico, Butte
26 County, California (APN 006-120-003-000), hereinafter referred to as the “Miller Mansion.”
27 i Cross-Defendant Lawrence Patterson (“Mr. Patterson”) is an individual who owns
28 |
2
[PROPOSED] SECOND AMENDED CROSS-COMPLAINT FOR ELDER ABUSE, COMMON COUNT, CIVIL CONSPIRACY FOR
FRAUD, INVOLUNTARY TRUST, FRAUD, BREACH OF FIDUCIARY DUTY, UNCONSCIONABILITY, BUSINESS &
PRAEESCIANS CONE 881790 ET SEN and CANCTTT ATION AF INGTRITMENTS
real property, known as 14174 Racine Circle, Magalia, California, which is located within Butte
County, California. At all times herein, Cross-Complainant is informed and believes that Mr.
Patterson resided in Butte County, California.
8 Cross-Defendant Gene Culley (“Mr. Culley”) is an individual who at all times
referred to herein resided in Butte County, California.
9. Cross-Complainant hereby asserts that Defendant Mid Valley Title and Escrow
Company (“Mid Valley”) is a California corporation having a principal place of business located at
601 Main Street, Chico, California, 95926 and an agent designated for service of process in
California as Jennifer L. Mackall at the with same address.
10 10. William Chance (“Mr. Chance”) is a real estate broker licensed in the State of
11 California. Mr. Chance was the listing broker for Mr. Cook as to the Miller Mansion.
12 11. Cross-Complainant does not know the true names of Cross-Defendant ROES 1-25,
13 inclusive, sued herein and, therefore, sues such Cross- Defendants by those fictitious names.
|
14 12. Cross-Complainant is informed and believes, and on that basis alleges, that at all
15 various times mentioned herein, some of the Cross-Defendants were the agents and/or employees
16 of their co-defendants and, in doing the things alleged in this Complaint, were acting within the
17 course and scope of such agency and/or employment.
18 13. During Mrs. Niderost’s absence, Mr. Culley befriended Cross-Complainant who
19 was, during Mrs. Niderost’s absence, living alone. Up to approximately January of 2020, Cross-
20 Complainant had no relationship with Mr. Culley and had never met him. Mr. Culley, on his own
21 accord, started providing “caretaking” services to Cross-Complaint and learned the details of
22 Cross-Complainant’s finances.
23 14. During Mrs. Niderost’s absence, Cross-Complainant’s cellular phone and Jand-line
24 ceased to operate. Additionally, during Mrs. Niderost’s absence, Cross-Complainant developed a
25 bladder infection which was not immediately treated. This occurred during the period that Mr.
26 Cuiley was providing caretaking services. It was discovered that Cross-Complainant’s landline had
27 been tampered with during the period of time that Mr. Culley was providing caretaking services.
28
3
[PROPOSED} SECOND AMENDED CROSS-COMPLAINT FOR ELDER ABUSE, COMMON COUNT, CIVIL CONSPIRACY FOR
FRAUD, INVOLUNTARY TRUST, FRAUD, BREACH OF FIDUCIARY DUTY, UNCONSCIONABILITY, BUSINESS &
PRAFPSSIONS CONE s8I7NN ET CEN and CANCTTT ATION OF INCTRIIMENTS
15. Cross-Complainant lives in a frugal manner, reinvesting any money that has been
paid to him through his investments and historically keeping ample savings. In 2018, Cross-
Complaint’s and Mrs. Niderost’s joint gross income was less than $30,000. For 2017, their total
gross income was less than $85,000.
16. During all times pertinent for purposes of this Cross-Complaint, Mr. Culley
Tepresented that he was the personal assistant of Cross-Complainant and, as such, asserted that he
had authority to act on behalf of Cross-Complainant. Mr. Culley thus held a position of trust and
confidence with Cross-Complainant, an elderly victim. In particular, Mr. Culley assisted with
Cross-Complainant’s real estate transactions with Mr. Patterson and Mr. Cook as further described
10 herein and, after Cross-Complainant’s purchase of the Miller Mansion, Mr. Culley took possession
11 thereof, has resided therein since approximately close of escrow, and has received rents from third
12 persons for their tenancy at the Miller Mansion, without paying such rents to Cross-Complainant.
13 At no time has Mr. Culley provided az accounting to Cross-Complainant or his Conservator or the
14 Successor Trustee of the Edward F. Niderost Revocable Trust. In addition, Mr. Culley has
15 admitted that he did not have a written contract with Cross-Complainant for caretaking services,
16 nor did he have a written rental agreement with Cross-Complainant for the Miller Mansion. Mr.
17 Culley refuses to accept the authority of this Court with respect to its orders designating John
18 Denton as both the conservator of the Estate of Edward F. Niderost and as successor trustee of the
19 Edward F. Niderost Revocable Living Trust Dated November 8, 1998.
20 17. On or about February 1, 2020, Mr. Patterson, with Mr. Culley’s assistance, induced
21 Cross-Complainant to pay him the sum of $232,000, purporting to sell real property known as
22 14174 Racine Court, Magalia, CA 95954 (“Real Property”), a 2011 Toyota truck (“Truck”) and a
23 2011 Fleetwood Southwind, VIN: 1F66F5DY1B0A03212 (“RV”) to Cross-Complainant.
24 18. Cross-Complainant did not sign any written agreement to purchase the Real
25 Property or any other items from Mr. Patterson.
26 19, Mr. Patterson claimed that the Real Property was valued at $170,000, the Truck was
27 valued at $5,000 and the RV was valued at $57,000.
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4
[PROPOSED] SECOND AMENDED CROSS-COMPLAINT FOR ELDER ABUSE, COMMON COUN ', CIVIL CONSPIRACY FOR
FRAUD, INVOLUNTARY TRUST, FRAUD, BREACH OF FIDUCIARY DUTY, UNCONSCIONABILITY, BUSINESS &
PROGR SCIONS CONE ReITINN ET SEM ond CANCETT ATION AF INCTRIFMENTS
20. The Real Property does not have a fair market value of $170,000 and is likely only
worth $120,000, The Truck is worth approximately $1,500. The RV is worth approximately
$40,000. In short, Mr. Patterson received the sum of $232,000, purporting to transfer the items
specified above, which are valued at approximately $161,500.
21. Mr. Patterson and Mr. Culley had knowledge of the actual value of the Real
Property, Truck and RV prior to the transaction.
22. Title to Real Property has not been transferred to Cross-Complainant.
23. Attached hereto and incorporated herein by reference as Exhibit “A,” are true and
correct documents which purport to be “Bills of Sale,” signed only by Mr. Patterson.
10 24, Mr. Patterson failed to provide any disclosures provided by law for the transfer of
11 the real property including a real estate transfer disclosure (IDS) as required by Civil Code Section
12 11002 or any natural hazards report.
13 25. Despite receiving a demand for rescission and for return of the funds received, Mr.
14 Patterson has failed and refused to return any of the funds received by him to Cross-Complainant.
15 26. On or about February 13, 2020, Mr. Cook, with the assistance of Mr. Culley,
16 induced Cross-Complainant to purchase the Miller Mansion for the sum of $1,500,000. Mr. Cook
17 purchased the Miller Mansion one year prior, for the sum of $825,000. In approximately July of
18 2019, Mr. Cook listed the Miller Mansion for sale with Bill Chance, a local real estate broker and
19 age
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Superior Court of California Sara M. Knowles (SBN 216139) County of Butte LELAND, MORRISSEY & KNOWLES LLP 1660 Humboldt Road, Suite 6 3/12/2021 Chico, CA 95928 Telephone: (530) 342-4500 Facsimile: (530) 345-6836 By Deputy Electronically FILED Attorney for Conservator John Denton for Defendant and Cross-Complainant Edward F. Niderost, Individually and as Trustee of the Edward F. Niderost Revocable Living Trust Dated November 8, 1998 SUPERIOR COURT OF CALIFORNIA, COUNTY OF BUTTE 10 11 WAYNE A. COOK, TRUSTEE OF THE CASE NO. 20CV00905 12 WAYNE A. COOK 1998 FAMILY TRUST DATED 12/29/98, NOTICE OF EX PARTE APPLICATION 13 AND EX PARTE APPLICATION FOR Plaintiff, COURT ORDER REQUESTING LEAVE 14 TO AMEND CROSS-COMPLAINT, ¥. BIFURCATION OF CAUSE OF ACTION 15 AS TO BILL CHANCE,OR | EDWARD F. NIDEROST, INDIVIDUALLY ALTERNATIELY AN ORDER 16 | AND AS TRUSTEE OF THE EDWARD F. SHORTENING TIME; MEMORANDUM | NIDEROST REVOCABLE LIVING TRUST OF POINTS AND AUTHORITIES; 17 DATED NOVEMBER 8, 1998, DOES 1 DECLARATION OF SARA M. THROUGH 10, KNOWLES; [PROPOSED] ORDER 18 \ |1 Defendants. Hearing Date: March 12, 2021 19 Time: 1:30 P.M. AND RELATED CROSS-ACTION Dept.: TBD 20 1 | 21 | 22 23 PLEASE TAKE NOTICE that John Denton, conservator for Defendant and Cross 24 Complainant Edward F. Niderost and successor trustee of the Edward F. Niderost Revocable 25 | Living Trust, dated November 8, 1998 (“Conservator”)’s Ex Parte Application for Court Order 26 ' for Leave To Amend Cross-Complaint, Bifurcation of Issues (or alternatively for an order 27 shortening time) shall be presented on March 12, 2021 at 1:30 P.M. at the Butte County Superior | 28 | ' 1 NOTICE OF EX PARTE APPLICATION AND EX PARTE APPLICATION FOR COURT ORDER: MEMORANDUM OF POINTS AND | AUTHORITIES, DECLARATION OF SARA M. KNOWLES; [PROPOSED] ORDER: | Court, located at 1775 Concord Avenue, Chico, California, or on such other date and time that the Court deems appropriate. Participants may appear telephonically utilizing CourtCall. Conservator’s Ex Parte Application for Court Order for Leave to Amend Cross- Complaint and Bifurcation (or alternatively for an order shortening time) shall be based upon the Memorandum of Points and Authorities in support thereof submitted herewith and the Declaration of Sara M. Knowles in support thereof submitted herewith.. I EX PARTE APPLICATION FOR COURT ORDER 1 Conservator requests a Court Order for leave to amend the cross-compiaint to 10 delete references to a deficiency judgment (paragraphs 29 and 30), to add additional facts 11 discovered through depositions (such as the action of Plaintiff acting as an unlicensed mortgage 12 broker), to remove the reference to predatory lending and to include exhibits that were 13 inadvertently omitted. Leave is also requested to specify additional facts pertaining to a breach 14 of fiduciary duty as to Bill Chance who was substituted in as ROE defendant. In addition, the ex 15 parte application seeks to have any claims as to Mr. Chance bifurcated for trial at a later 16 date. Alternatively, Conservator requests that the court grant an order shortening time so that 17 this matter may be heard in connection with the matters on calendar, in this case, and set for 18 March 17, 2021 at 9:00 am. 19 2. The parties, and their counsel (if applicable), is as follows: Wayne A. Cook, 20 Trustee of the Wayne A. Cook 1998 Family Trust Dated 12/29/98 represented by Raymond 21 Sandleman; Lawrence Patterson represented by Larry Lushanko; Eugene (Gene) Culley self- 22 represented; William Chance self-represented; Mid Valley Title and Escrow; Edward F. 23 Niderost, individually and as Trustee of the Edward F. Niderost Revocable Living Trust Dated 24 November 8, 1998 represented by Guardian Ad Litem, Erwin Williams; John Denton, 25 Conservator for Edward F. Niderost and Successor Trustee of the Edward F. Niderost Revocable 26 Living Trust dated November 8, 1998 represented by Sara M. Knowles. 27 28 2 NOTICE OF EX PARTE APPLICATION AND EX PARTE APPLICATION FOR COURT ORDER; MEMORANDUM OF POINTS AND j AUTHORITIES; DECLARATION OF SARA M. KNOWLES; [PROPOSED] ORDER | 3. This is the first ex parte application of this nature filed in this matter by Conservator. A prior application for ex parte relief was filed by Conservator seeking appointment of a Guardian Ad Litem. That application was denied and the matter was subsequently reheard via a noticed motion. 4 The declaration of Sara Knowles is filed herewith, and is incorporated herein by reference showing an affirmative factual showing of irreparable harm in the event that this ex parte application is not granted. II. STATEMENT PURSUANT TO CALIFORNIA RULES OF COURT, RULE 3.1324. 10 1 A copy of the proposed amended pleading is attached to the Declaration of Sara 11 Knowles as Exhibit A. A copy of the redlined pleading, showing changes, additions and 12 deletions, is attached to the Declaration of Sara Knowles as Exhibit B. 13 2 The revisions to the First Amended Cross-Complaint (““FACC”), (which would 14 result in the Second Amended Cross-Complaint (“SACC”)) are as follows: 15 a. Deletion of the word “FIRST” in the FACC and addition of the words 16 “[PROPOSED] SECOND” in the title on page 1, line 12 of the SACC. 17 b. Deletion of “PREDATORY LENDING?” in the title of the FACC on page 18 1, line 16. 19 ©. Addition of “William Chance” in the caption on page 1, line 26 of the 20 SACC. 21 d. Deletion of “Mr. Cook, Mr. Patterson, and Mr. Culley are sometimes 22 hereinafter collectively referred to as “Cross-Defendants.” On page 3, paragraph 10, 23 line10 of the FACC. 24 €. Addition of “William Chance (“Mr. Chance”) is a real estate broker 25 licensed in the State of California. Mr. Chance was the listing broker for Mr. Cook as to 26 the Miller Mansion.” On page 3, paragraph 10, line 10 of the SACC. 27 28 3 NOTICE OF EX PARTE APPLICATION AND EX PARTE APPLICATION FOR COURT ORDER; MEMORANDUM OF POINTS AND AUTHORITIES; DECLARATION OF SARA M. KNOWLES; [PROPOSED] ORDER f. Addition of the words “various” and “some of the” on page 3, paragraph 12, line 15 of the SACC. &. Addition of “Mr. Culley refuses to accept the authority of this Court with respect to its orders designating John Denton as both the conservator of the Estate of Edward F. Niderost and as successor trustee of the Edward F. Niderost Revocable Living Trust Dated November 8, 1998.” On page 4, paragraph 16, lines 16-19 of the SACC. h Addition of “Mr. Chance represented both Mr. Cook and Mr. Niderost, as a dual agent, in this transaction. Mr. Chance took no measure to ascertain whether Mr. Niderost had the income to purchase the Miller Mansion or make any payments on any 10 notes.” On page 5, paragraph 27, lines 20-22 of the SACC. 11 1, Deletion of “Bill Chance represented both partics as broker and agent.” On 12 page 6, paragraph 29, line 14 of the FACC. 13 J Addition of “Bill Chance did not attempt to ensure that Mr. Niderost knew 14 the effect of these terms, nor did he represent the best interest of Mr. Niderost in the 15 transaction.” On page 6, paragraph 30, lines 20-21 of the SACC. 16 k. Addition of “Mr. Cook is not a licensed loan broker. Pursuant to Business 17 and Professions Code 101166.02 a person who arranges a loan must be licensed. When 18 Mr. Cook arranged the loan for Dr. Fine, he was acting in violation of Business and 19 Professions Code 101166.02 and thus created an illegal contract pursuant to Business and 20 Professions Code 10130.” On page 7, paragraph 33, lines 5-8 of the SACC. 21 1 Deletion of “The increase in price was a surprise to Mr. Niderost.” On page 22 7, paragraph 34, lines 13-14 of the FACC. 23 | m Addition of “Bill Chance offered no independent advice for Mr. Niderost” 24 on page 7-8, paragraph 37, lines 27-1 of the SACC. 25 Nn. Deletion of “a 150 year old” on page 7, paragraph 36, line 19 of the FACC. 26 9. Addition of “an aging” on page 8, paragraph 38, line 3 of the Proposed 27 SACC, 28 4 NOTICE OF EX PARTE APPLICATION AND EX PARTE APPLICATION FOR COURT ORDER: MEMORANDUM OF POINTS AND AUTHORITIES; DECLARATION OF SARA M. KNOWLES; [PROPOSED] ORDER. P. Deletion of “After the Trustee’s Sale (cither via judicial or non-judicial foreclosure), on the Dr. Fine Note and Deed of Trust, Mr. Cook would then have the ability to attempt to recover the funds allegedly due him as a ‘sold out junior’. Mr. Cooks admits this fact in §6, lines 6-7, of his Complaint. The foregoing description of the effect of the two notes and deeds of trust, as well as the assignment of rents and the legal remedies are hereinafter referred to as the “Financing Scheme”.” On page 8, paragraph 39, lines 9-14 of the FACC. q. Deletion of “and/or with the intent to defraud, although” on page 9, paragraph 44, lines 4-5 of the FACC. 10 Tr. Addition of “AND CHANCE” to title on page 13, line 2 of the Proposed 1 SACC. 12 8. Addition of “As a real estate broker for Mr. Niderost, Mr. Chance held a 13 position of trust and confidence and owed a fiduciary duty to Mr. Niderost.” On page 13, 14 paragraph 71, lines 10-11 of the SACC. 15 t. Addition of “Mr. Chance failed to provide adequate advice or 16 recommendations and failed to ensure that the transaction was adequate, fair, reasonable, 17 and in the best interest of Mr. Niderost. Mr. Chance did not fully disclose all material facts 18 regarding the transaction that might have affected Mr. Niderost’s decision and thus 19 breached his fiduciary duties. There was no effort on the part of Mr. Chance to suggest 20 alternate terms to the transaction, such as making the deposit refundable, including an 21 inspection period of greater than one day, determining if the zoning would have impeded 22 Mr. Niderost’s plan, and/or requiring an appraisal.” On page 13, paragraph 73, lines 16-22 23 of the SACC. 24 u. Addition of “and Mr. Chance” on page 14, paragraph 75, line 4 of the 25 SACC. 26 Vv, Addition of “and Mr. Chance” on page 14, paragraph 75, line 6 of the 27 SACC, 28 5 | NOTICE OF EX PARTE APPLICATION AND EX PARTE APPLICATION FOR COURT ORDER; MEMORANDUM OF POINTS AND. AUTHORITIES; DECLARATION OF SARA M. KNOWLES; [PROPOSED] ORDER. wW. Deletion of “PREDATORY LENDING” on page 14, line 11 of the FACC. x, Deletion of: “77. The Office of Controller of the Currency defines “Predatory Lending” as any lien secured by real estate which shares well- known common characteristics that result in unfair and deceptive business act under California Business and Professions Code §§ 17200, et seq. 78. The acts undertaken by the Mr. Patterson and Mr. Cook herein, especially with respect to the Financing Scheme, are consistent with the Office of the Comptroller’s definition of an unfair and/or 10 deceptive business act, They include the fact that the loans delineated in 11 the underlying Complaint were made at a time when Mr. Patterson and 12 Mr. Cook knew or should have known that Cross-Complainant, at 82 13 years of age, was suffering from a cognitive disorder and/or condition and 14 was vulnerable to being taken advantage of. 15 79. Mr. Cook and Dr. Fine, by and through their lending 16 practice, failed to comply with the Ability to Pay and Qualified Mortgage 17 Standards Under the Truth in Lending Act (12 CFR Part 1026), the Truth 18 in Lending Act (15 USC 1601 et. seq.), the Dodd Frank Wall Street 19 Reform and Consumer Protection Act, the Higher-Priced Mortgage Loan 20 (Section 35 of Regulations Z) and the Real Estate Settlement Procedure 21 Act of 1974 (12 USC 2601 et seq.) by failing to determine if Cross- 22 Complainant could repay the notes, failure to create an escrow account 23 for property taxes and homeowner’s insurance, the failure to obtain a third 24 party appraisal, and failure to provide adequate disclosures, good faith 25 settlement/estimate statements, an accounting of the settlement 26 transaction, or information booklet. 27 Both Mr. Cook and Dr. Fine are creditors pursuant to the Truth in Lending 28 6 NOTICE OF EX PARTE APPLICATION AND EX PARTE APPLICATION FOR COURT ORDER; MEMORANDUM OF POINTS AND AUTHORITIES; DECLARATION OF SARA M. KNOWLES; [PROPOSED] ORDER Act (15 USCA §§ 1601 et. seq.) because both have regularly extended 20 consumer credit and are the person to whom the debt arises from a consumer credit transaction is payable on the face of the indebtedness. 4) From 2010 through 2020, Mr. Cook, either as an individual or in his capacity as a trustee of the Wayne A. Cook 1998 Family Trust, or the Wayne A. Cook Revocable Inter vivos Trust was a party to at least 77 deeds of trust. Of these 77 transactions, on October 29, 2018 and May 23, 2019, two separate Deeds of Trust were recorded wherein Mr. Cook was extended consumer credit to individuals. 10 Each of these two Deeds of Trust are subject to a financial charge or is 11 payable by a written agreement in more than four installments, which 12 makes Mr. Cook a creditor under the Higher-Price Mortgage Loan Act (12 13 C.F.P. 1026) 14 Dr. Fine, through his 401(k) plan and through his defined benefit plan has 15 regularly extended credit from 2010 to the present as evidenced by over 16 16 transactions recorded in the Butte County Recorder’s Office.” 17 On pages 14 — 15, paragraphs 77 — 79 of the FACC. 18 y. Addition of “Mr. Cook arranged the loan from Dr. Fine to Mr. 19 Niderost. Mr. Cook is not a mortgage loan broker and acted in violation of 20 Business and Professions Code § 10130 and 101166.02.” on page 15, paragraph 21 81, lines 6-8 of the SACC. 22 Zz. The removal of “Cross-Defendants” and addition of “Mr. Cook” on 23 page 15, paragraph 82, line 9. 24 aa. The deletion of “Mr. Patterson” on page 15, paragraph 81, line 22 25 of the FACC, 26 bb. The addition of “and is not entitled to any gain due to his unlawful 27 acts of arranging a loan.” On page 15, paragraph 83, line 13 of the SACC. 28 7 NOTICE OF EX PARTE APPLICATION AND EX PARTE APPLICATION FOR COURT ORDER; MEMORANDUM OF POINTS AND AUTHORITIES; DECLARATION OF SARA M. KNOWLES: [PROPOSED] ORDER ce. The deletion of “predatory lending practices” and the addition of “the violation of Business and Professions Code §10130 and §101166.02” on page 15-16, paragraph 87, lines 28-1 of the FACC. dd. Re-Numbering of paragraphs 27 — 86 to 27 — 88. ee. Addition of Exhibits A—J to SACC, which were inadvertently omitted from FACC. Respectfully submitted, 9 LELAND, MORRISSEY & KNOWLES LLP 10 et oo 11 Dated: March 11, 2021 “tf? ret 12 a M. Knowles Attorney for Conservator John Denton for 13 Defendant and Cross-Complainant Edward F. Niderost, Individually and as Trustee of the Edward 14 F. Niderost Revocable Living Trust Dated November 8, 1998 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 NOTICE OF EX PARTE APPLICATION AND EX PARTE APPI.ICATION FOR COURT ORDER: MEMORANDUM OF POINTS AND. AUTHORITIES; DECLARATION OF SARA M. KNOWLES; [PROPOSED] ORDER MEMORANDLM OF POINTS AND AUTHORITIES I. Facts This matter originally commenced, less than a year ago, on April 22, 2020 as Judicial Foreclosure matter. A Cross-Complaint was filed on behalf of Edward F. Niderost on June 12, 2020. Due to COVID -19 there was a stay in place as to the Judicial Foreclosure matter until approximately September 1, 2020. No depositions were taken in this matter, by any party, until after a Guardian Ad Litem was appointed for Mr. Niderost on October 28, 2020. Mr. Denton’s deposition was taken first on December 29, 2021. Mr. Niderost’s deposition occurred in late January of 2021, after the Court ordered a bifurcation of issues and granted preference to this 10 matter. Other depositions followed Mr. Niderost’s and the deposition was taken of Mr. Cook on 11 January 21, 2021 and Mr. Chance on February 25, 2021. The written transcripts were not 12 available until March 4 and March 3, 2021, respectively. This matter is set for trial on March 29, 13 2021. 14 During the deposition of Mr. Chance it was discovered that he, as a real estate broker, did 15 not arrange the financing that is at issue in this case. This was confirmed after review of his 16 deposition transcript. Mr. Denton, on behalf of Mr. Niderost, seeks to add Mr. Chance as a party 17 | to this matter, with a cause of action for breach of fiduciary duty. Mr. Denton seeks to have the 18 matter, as to Mr. Chance, be bifurcated and tried separately. In addition, Mr. Denton seeks, by 19 this ex parte application, to obtain leave to amend the First Amended Cross-Complaint to delete 20 various references to predatory lending and to include additional facts regarding the actions of 21 Mr, Cook in violation of Business and Professions Code sections 10130 and 101166.02. In the 22 event that the Court would prefer, Mr. Denton seeks as an alternate relief to this ex parte 23 application that this matter be advanced to the law and motion 9:00 a.m. calendar for March 17, 24 2021 pursuant to an order shortening time, and that this matter be heard on that date and at that 25 time. 26 ut 27 Hu 28 9 NOTICE OF EX PARTE APPLICATION AND EX PARTE APFLICATION FOR COURT ORDER; MEMORANDUM OF POINTS AND. AUTHORITIES; DECLARATION OF SARA M. KNOWLES; [PROPOSED] ORDER I. LEGAL ARGUMENT A. Ex Parte Relief is Appropriate as Irreparable Harm Will Result if the Relief Requested is Not Granted. Unless Conservator’s requests for leave to amend are granted, irreparable harm will result s Mr. Chance may not be included as a party and certain allegations against Mr. Cook will not be included in the Cross-Complaint and may be subject to exclusion at trial. If this request is not granted, justice may not be afforded, and this matter will not be heard fully on its merits, with all claims regarding the controversy being heard by this Court. The ends of justice dictate that leave to amend be granted to include Mr. Chance as a party to this action, with the claims as to him bifurcated, and that additional facts regarding the role of Mr. Cook in arranging financing be 10 divulged to the Court. Additionally, Conservator seeks to remove certain claims and references 11 which appear to be no longer relevant, or accurate. 12 13 B. The Court Must Grant Leave To Amend Compulsory Claims and the Failure to Permit Leave May Bar a Portion of the Claims Against Mr. Cook. 14 Generally, a cross-complaint is treated as an independent action. It is not dependent on 15 plaintiff's action (The Rutter Group, 2020, 6.502). The issues raised by the cross-complaint are 16 treated as “completely severable” from the issues raised by the original complaint and answer. 17 See Bertero v. National Gen, Corp (1974) 13 C3d 51-52. A defendant always has the option of 18 asserting a cause of action he or she has against the plaintiff in a cross complaint. CCP 428.10. 19 However, if the defendant’s cause of action against plaintiff is related to the subject matter of the i 20 complaint, it must be raised by cross-complaint; failure to plea it will bar defendant from 21 asserting it any later lawsuit. CCP section 426.30. Defendant’s cross-complaint is compulsory if | 22 | the cause of action “arises out of the same transaction, occurrence, or series of transactions or 23 | occurrences as the causes of action . . . in [the] complaint.” CCP section 426.10. 24 } At any time during the course of the lawsuit, the court retains power to permit defendant 25 | to file or amend a cross-complaint to avoid forfeiture of defendant’s “related” claim. Indeed, the 26 | court “shall grant” leave as long as defendant is acting in good faith. CCP section 426.50; sec 27 ‘also Silver Organizations Ltd. V. Frank (1990) 217 CA 3d 94, 98-99, (even on “eve of trial” 28 10 NOTICE OF EX PARTE APPLICATION AND EX PARTE APPLICATION FOR COURT ORDER; MEMORANDUM OF POINTS AND AUTHORITIES; DECLARATION OF SARA M. KNOWLES; [PROPOSED] ORDER leave to file compulsory cross-complaint mandatory absent bad faith. Admittedly, there is a split of authority as to whether trial courts have any discretion to deny the request to file a cross- complaint, (Requirement of good faith gives courts “a modicum of discretion” but the law 4 strongly favors granting leave (see Sidney v. Sup. Ct (Kinoshita) (1988) 198 CA3d 710, 718 vs. 5 the courts have no discretion to deny absent findings of bad faith based on substantial evidence. 6 || (see Silver Organizations Ltd. V. Frank, supra, 217 CA3d at 98-99.) i Mr. Cook’s deposition occurred on January 21, 2021 but the transcript was not received until March 4, 2021. Mr. Chance’s deposition occurred on February 25, 2021, but the transcript was not made available until March 3, 2021. 10 The claims as to Mr. Cook engaging in actions that are to be done only by a licensed loan 11 broker are compulsory claims, and the court has the power to grant leave to amend. The judicial 12 policy of having all issues and facts before the Court dictates that leave be granted. 13 Cc Leave to Amend Must Be Granted to Include a Breach of Fiduciary Duty 14 Claim Against Mr. Chance And That Claim is Bifurcated As It Is In The Interests of 15 Justice. A defendant can cross-complain against a third person not yet a party to the action if the 16 47 | cause of action asserted “arises out of the same transaction or asserts a claim or right in the j controversy which is the subject of the cause of action. CCP section 428.10 18 The judicial policy to settle all disputes between plaintiff and defendants in the same 19 lawsuit, if possible. The Rutter Group, 2020 at 6:564, 6:508. A greater showing of “interest of 20 | | justice” is required to obtain leave to file a cross-complaint against a third person not yet a party 21 to the action. The concern, in that case, is that the cross-complaint not unreasonably burden and 22 | complicate plaintiff's lawsuit with cross-actions and third parties. 23 1 24 Leave of court is granted liberally. The Rutter Group, 2020 at 6:611. 6:614, 6:638. Leave to amend may be denied for unreasonable delay after plaintiff’ ascertains a “doe” 25 defendant’s identify resulting in prejudice to the other party. 4.N. v. County of Los Angeles 26 27 (2009) 171 CA4th 1058, 1068. The court may grant permission on ex parte application to amend | 28 1 NOTICE OF EX PARTE APPLICATION AND EX PARTE APPLICATION FOR COURT ORDER; MEMORANDUM OF POINTS AND AUTHORITIES; DECLARATION OF SARA M. KNOWLES; [PROPOSED] ORDER a pleading “by adding or striking out the name of any party, or by correcting a mistake in the name of a party, or a mistake in any other respect.” CCP section 473 (a)(1). The grant of leave to amend must be construed as permission to the pleader to amend the cause of action which he pleaded in the pleading to which the demurrer has been sustained. People v. Clausen (1967) 248 CA 2d 770, 785-786; see also Harris v. Wachovia Mortg., FSB (20210) 185 CA4th, 1018, 1023- plaintiff may not amend the complaint to add a new cause of action without having obtained permission to do so.) The claim against Mr. Chance arises out of the same facts and transaction, i.e. the sale of the Miller Mansion to Mr. Niderost. As such, it is in the interest of justice that Mr. Chance be 10 added as a party, and that any causes of action against him be bifurcated so as to allow him time 11 to present any defense. Pursuant to CCP section 598, the court may, at any time, and on its own 12 motion, make an order for bifurcation at any time. 13 Mr. Chance’s deposition occurred on February 25, 2021. The transcript was not available 14 until March 3, 2021. Mr. Cook’s deposition transcript was not made available until March 4, 15 2021. A confirmation of the statements and basis for liability was not capable of being made 16 prior as the information was unknown. Additionally, given the status of COVID-19 and the 17 preference granted to this case, depositions occurred only in the last 60 days. 18 19 Tl. Conclusion 20 In order to achieve the goals of justice, leave to amend must be granted to include 21 additional facts as to Mr. Cook and to include Mr. Chance as a party to this matter. The court is 22 requested to include any claims against Mr. Chance in the portion of this matter that has already 23 been bifurcated. If this relief is not granted on an ex parte basis, it is requested that this matter be 24 placed on the March 17, 2021 9:00 am law and motion calendar and be heard pursuant to an 25 order shortening time. 26 27 28 12 NOTICE OF EX PARTE APPLICATION AND EX PARTE APPLICATION FOR COURT ORDER; MEMORANDUM OF POINTS AND AUTHORITIES; DECLARATION OF SARA M, KNOWLES; [PROPOSED] ORDER Respectfully submitted, LELAND, MORRISSEY & KNOWLES LLP Dated: March 11, 2021 few 2, fe Binet £ ‘Sara M. Knowles Attorney for Conservator John Denton for Defendant and Cross-Complainant Edward F. Niderost, Individually and as Trustee of the Edward F. Niderost Revocable Living Trust Dated November 8, 1998 10 11 12 13 14 15 16 17 18 19 20 21 22 | 23|! 24 25 | 26 27 28 13 NOTICE OF EX PARTE APPLICATION AND EX PARTE APPLICATION FOR COURT ORDER; MEMORANDUM OF POINTS AND AUTHORITIES; DECLARATION OF SARA M. KNOWLES; [PROPOSED] ORDER DECLARATION OF SARA M. KNOWLES I, Sara M. Knowles, declare as follows: 1 I am an attorney at law duly licensed to practice before all the Courts of the State of California and am a partner with Leland, Morrissey & Knowles, LLP, attorneys of record for Conservator John Denton for Defendant and Cross-Complainant Edward F. Niderost, Individually and as Trustee of the Edward F. Niderost Revocable Living Trust Dated November 8, 1998. 2 If called upon as a witness to testify to any of the facts contained herein, I could and would testify competently hereto based on personal knowledge. 10 3 I make this Declaration in support of the Ex Parte Application for Court Order 11 4 The effect of the proposed amendments are to add a basis for liability as to Wayne 12 A. Cook for his actions in arranging a mortgage loan in violation of Business and Professions 13 Code sections 10130 and 101166.02. Additionally, the proposed amendment would allow for the 14 deletion of extraneous matter and facts which have, during, the discovery process, proved to be 15 unfounded. 16 | 5 An additional effect of the proposed amendments is that it will allow the inclusion 17 of Bill Cook as a party to this matter, which the claims against him being heard at the same time 18 | as the matters which have already beer bifurcated. 19 i 6. The amendments specified within the motion are necessary and proper as they 20 comport to the facts as learned during depositions, which have only occurred in the last 60 days. 21 Such depositions were produced in written form for the examination on March 3 (Deposition of 22 Bill Chance) and March 4, 2021 (Deposition of Wayne A. Cook.) 23 7 The facts giving rise to these amended allegations were only confirmed and 24 discovered after a review of the deposition transcripts, which occurred after March 3 and 4, 25 2021. 26 27 28 14 NOTICE OF EX PARTE APPLICATION AND EX PARTE APPLICATION FOR COURT ORDER; MEMORANDUM OF POINTS AND AUTHORITIES; DECLARATION OF SARA M. KNOWLES; [PROPOSED] ORDER 8 The request was not made earlier to amend as such facts were only discovered and confirmed within the last 7-8 days. Depositions in this matter did not commence until the last 60 days. 9 No depositions occurred until December 24, 2020. 10. If the amendment is not permitted, certain claims against Mr. Cook may not be introduced into evidence and the basis of liability barred. If the amendment as to Mr. Chance is not permitted, justice will not be served as a party who is potentially liable will not be included in this action. In short, if the amendment is not allowed, Mr. Niderost, the real party in interest, will suffer irreparable harm as not all facts will be heard during trial and considered in this 10 matter, as dictated by justice. 11 I declare under penalty of perjury under the laws of the State of California that the 12 foregoing is true and correct. Executed this 1% day of March, 2021 at Chico, California. 13 14 fe V2, Mae Mead 15 Sara M. Knowles ~ 16 17 18 19 20 21 22 23 24 25 26 27 28 15 NOTICE OF EX PARTE APPLICATION AND EX PARTE APPLICATION FOR COURT ORDER; MEMORANDUM OF POINTS AND AUTHORITIES; DECLARATION OF SARA M. KNOWLES; [PROPOSED] ORDER EXHIBIT A Sara M. Knowles (SBN 216139) LELAND, MORRISSEY & KNOWLES 1p 1660 Humboldt Road, Suite 6 Chico, CA 95928 Telephone: (530) 342-4500 Facsimile: (530) 345-6836 Attorneys for John Denton, Conservator of the Estate of Edward F, Niderost, Individually and as Successor Trustee of the Edward F. Niderost Revocable Living Trust Dated November 8, 1998 SUPERIOR COURT OF CALIFORNIA, COUNTY OF BUTTE 10 WAYNE A..COOK, TRUSTEE OF THE CASE NO. 20CV00905 1 WAYNE A. COOK 1998 FAMILY TRUST DATED 12/29/98, [PROPOSED] SECOND AMENDED 12 CROSS-COMPLAINT FOR ELDER Plaintiff, ABUSE, COMMON COUNT, CIVIL 13 Vv. CONSPIRACY FOR FRAUD, 14 INVOLUNTARY TRUST, FRAUD, EDWARD F. NIDEROST, INDIVIDUALLY BREACH OF FIDUCIARY DUTY, 15 AND AS TRUSTEE OF THE EDWARD F. UNCONSCIONABILITY, BUSINESS & NIDEROST REVOCABLE LIVING TRUST PROFESSIONS CODE §§17200, ET. SEQ., 16 DATED NOVEMBER 8, 1998, DOES 1 THROUGH 10, and CANCELLATION OF 17 INSTRUMENTS. Defendants. 18 EDWARD F. NIDEROST, INDIVIDUALLY 19 AND AS TRUSTEE OF THE EDWARD F. NIDEROST REVOCABLE LIVING TRUST 20 DATED NOVEMBER 8, 1998, 21 Cross-Complainant, 22 Vv. 23 WAYNE A. COOK, INDIVIDUALLY AND AS TRUSTEE OF THE WAYNE A. COOK 24 1998 FAMILY TRUST DATED 12/29/98; LAWRENCE PATTERSON; GENE 25 CULLEY, MID VALLEY TITLE AND ESCROW COMPANY; WILLIAM CHANCE 26 and ROES 1 through 25, inclusive, 27 Cross-Defendants. 28 I [PROPOSED] SECOND AMENDED CROSS-COMPLAINT FOR ELDER ABUSE, COMMON COUNT, CIVIL CONSPIRACY FOR FRAUD, INVOLUNTARY TRUST, FRAUD, BREACH OF FIDUCIARY DUTY, UNCONSCIONABILITY, BUSINESS & PRAFESCIONS CANE RAIT7NA ET SEA and CANCEL ATION AF INGCTRITMENTS Defendant and Cross-Complainant Edward F. Niderost (“Cross-Complainant”), individually and as Trustee of the Edward F. Niderost Revocable Living Trust Dated November 8, 1998, alleges as follows: 1 Cross-Complainant is an individual who resides within the State of California, County of Butte. Further, the place of administration of the Edward F, Niderost Revocable Living Trust Dated November 8, 1998, of which Cross-Complainant is the trustee, is Butte County, California. 2. Cross-Complainant turned 83 in the month of May 2020. Cross-Complainant suffers from an unknown cognitive disorder or condition and is incapable of managing his own 10 affairs and assets. During the times referenced herein, Cross-Complainant was and still is married 11 to Yolanda Niderost (“Mrs. Niderost”). From December 2019 through April of 2020, Mrs. 12 Niderost was in her country of origin, Chile, and unable to return to the United States due to 13 COVID-19 travel bans. Mrs. Niderost speaks English as a second language. Cross-Complaint, 14 during the times referenced herein, was and is vulnerable to being taken advantage of. 15 3 Cross-Complainant’s assets are subject to a conservatorship, with the appointed 16 conservator being John Denton (“Conservator”). At all times relevant hereto, Conservator was a 17 resident of the State of California, County of Butte. 18 4 The Conservator brings this suit on behalf and in the name of Cross-Complainant, 19 who is the real party in interest. 20 5 Cross-Defendant Wayne A. Cook (“Mr. Cook”), individually and as trustee of the 21 Wayne A. Cook 1998 Family Trust Dated 12/29/98, at all times referred to herein resided in Butte 22 County, California. Mr. Cook is a sophisticated real estate developer and investor. By and through 23 his trust and the entities controlled by him, he owns several commercial structures, including 24 ollege rentals and the Hotel Diamond located in Chico, California. 25 6. Mr. Cook was the owner of real property known as 2185 Esplanade, Chico, Butte 26 County, California (APN 006-120-003-000), hereinafter referred to as the “Miller Mansion.” 27 i Cross-Defendant Lawrence Patterson (“Mr. Patterson”) is an individual who owns 28 | 2 [PROPOSED] SECOND AMENDED CROSS-COMPLAINT FOR ELDER ABUSE, COMMON COUNT, CIVIL CONSPIRACY FOR FRAUD, INVOLUNTARY TRUST, FRAUD, BREACH OF FIDUCIARY DUTY, UNCONSCIONABILITY, BUSINESS & PRAEESCIANS CONE 881790 ET SEN and CANCTTT ATION AF INGTRITMENTS real property, known as 14174 Racine Circle, Magalia, California, which is located within Butte County, California. At all times herein, Cross-Complainant is informed and believes that Mr. Patterson resided in Butte County, California. 8 Cross-Defendant Gene Culley (“Mr. Culley”) is an individual who at all times referred to herein resided in Butte County, California. 9. Cross-Complainant hereby asserts that Defendant Mid Valley Title and Escrow Company (“Mid Valley”) is a California corporation having a principal place of business located at 601 Main Street, Chico, California, 95926 and an agent designated for service of process in California as Jennifer L. Mackall at the with same address. 10 10. William Chance (“Mr. Chance”) is a real estate broker licensed in the State of 11 California. Mr. Chance was the listing broker for Mr. Cook as to the Miller Mansion. 12 11. Cross-Complainant does not know the true names of Cross-Defendant ROES 1-25, 13 inclusive, sued herein and, therefore, sues such Cross- Defendants by those fictitious names. | 14 12. Cross-Complainant is informed and believes, and on that basis alleges, that at all 15 various times mentioned herein, some of the Cross-Defendants were the agents and/or employees 16 of their co-defendants and, in doing the things alleged in this Complaint, were acting within the 17 course and scope of such agency and/or employment. 18 13. During Mrs. Niderost’s absence, Mr. Culley befriended Cross-Complainant who 19 was, during Mrs. Niderost’s absence, living alone. Up to approximately January of 2020, Cross- 20 Complainant had no relationship with Mr. Culley and had never met him. Mr. Culley, on his own 21 accord, started providing “caretaking” services to Cross-Complaint and learned the details of 22 Cross-Complainant’s finances. 23 14. During Mrs. Niderost’s absence, Cross-Complainant’s cellular phone and Jand-line 24 ceased to operate. Additionally, during Mrs. Niderost’s absence, Cross-Complainant developed a 25 bladder infection which was not immediately treated. This occurred during the period that Mr. 26 Cuiley was providing caretaking services. It was discovered that Cross-Complainant’s landline had 27 been tampered with during the period of time that Mr. Culley was providing caretaking services. 28 3 [PROPOSED} SECOND AMENDED CROSS-COMPLAINT FOR ELDER ABUSE, COMMON COUNT, CIVIL CONSPIRACY FOR FRAUD, INVOLUNTARY TRUST, FRAUD, BREACH OF FIDUCIARY DUTY, UNCONSCIONABILITY, BUSINESS & PRAFPSSIONS CONE s8I7NN ET CEN and CANCTTT ATION OF INCTRIIMENTS 15. Cross-Complainant lives in a frugal manner, reinvesting any money that has been paid to him through his investments and historically keeping ample savings. In 2018, Cross- Complaint’s and Mrs. Niderost’s joint gross income was less than $30,000. For 2017, their total gross income was less than $85,000. 16. During all times pertinent for purposes of this Cross-Complaint, Mr. Culley Tepresented that he was the personal assistant of Cross-Complainant and, as such, asserted that he had authority to act on behalf of Cross-Complainant. Mr. Culley thus held a position of trust and confidence with Cross-Complainant, an elderly victim. In particular, Mr. Culley assisted with Cross-Complainant’s real estate transactions with Mr. Patterson and Mr. Cook as further described 10 herein and, after Cross-Complainant’s purchase of the Miller Mansion, Mr. Culley took possession 11 thereof, has resided therein since approximately close of escrow, and has received rents from third 12 persons for their tenancy at the Miller Mansion, without paying such rents to Cross-Complainant. 13 At no time has Mr. Culley provided az accounting to Cross-Complainant or his Conservator or the 14 Successor Trustee of the Edward F. Niderost Revocable Trust. In addition, Mr. Culley has 15 admitted that he did not have a written contract with Cross-Complainant for caretaking services, 16 nor did he have a written rental agreement with Cross-Complainant for the Miller Mansion. Mr. 17 Culley refuses to accept the authority of this Court with respect to its orders designating John 18 Denton as both the conservator of the Estate of Edward F. Niderost and as successor trustee of the 19 Edward F. Niderost Revocable Living Trust Dated November 8, 1998. 20 17. On or about February 1, 2020, Mr. Patterson, with Mr. Culley’s assistance, induced 21 Cross-Complainant to pay him the sum of $232,000, purporting to sell real property known as 22 14174 Racine Court, Magalia, CA 95954 (“Real Property”), a 2011 Toyota truck (“Truck”) and a 23 2011 Fleetwood Southwind, VIN: 1F66F5DY1B0A03212 (“RV”) to Cross-Complainant. 24 18. Cross-Complainant did not sign any written agreement to purchase the Real 25 Property or any other items from Mr. Patterson. 26 19, Mr. Patterson claimed that the Real Property was valued at $170,000, the Truck was 27 valued at $5,000 and the RV was valued at $57,000. 28 4 [PROPOSED] SECOND AMENDED CROSS-COMPLAINT FOR ELDER ABUSE, COMMON COUN ', CIVIL CONSPIRACY FOR FRAUD, INVOLUNTARY TRUST, FRAUD, BREACH OF FIDUCIARY DUTY, UNCONSCIONABILITY, BUSINESS & PROGR SCIONS CONE ReITINN ET SEM ond CANCETT ATION AF INCTRIFMENTS 20. The Real Property does not have a fair market value of $170,000 and is likely only worth $120,000, The Truck is worth approximately $1,500. The RV is worth approximately $40,000. In short, Mr. Patterson received the sum of $232,000, purporting to transfer the items specified above, which are valued at approximately $161,500. 21. Mr. Patterson and Mr. Culley had knowledge of the actual value of the Real Property, Truck and RV prior to the transaction. 22. Title to Real Property has not been transferred to Cross-Complainant. 23. Attached hereto and incorporated herein by reference as Exhibit “A,” are true and correct documents which purport to be “Bills of Sale,” signed only by Mr. Patterson. 10 24, Mr. Patterson failed to provide any disclosures provided by law for the transfer of 11 the real property including a real estate transfer disclosure (IDS) as required by Civil Code Section 12 11002 or any natural hazards report. 13 25. Despite receiving a demand for rescission and for return of the funds received, Mr. 14 Patterson has failed and refused to return any of the funds received by him to Cross-Complainant. 15 26. On or about February 13, 2020, Mr. Cook, with the assistance of Mr. Culley, 16 induced Cross-Complainant to purchase the Miller Mansion for the sum of $1,500,000. Mr. Cook 17 purchased the Miller Mansion one year prior, for the sum of $825,000. In approximately July of 18 2019, Mr. Cook listed the Miller Mansion for sale with Bill Chance, a local real estate broker and 19 age