Preview
Superior Court of California
Raymond L. Sandelman SBN 078020
Attorney at Law
County of Butte
196 Cohasset Road, Suite 225
Chico, CA 95926-2284 3/29/2021
(530) 343-5090 / (530) 343-5091 (FAX)
Email:Raymond@sandelmanlaw.com Kin Oat Flspe lerk
By Deputy
Electronically ILED
Attorney for Wayne A. Cook, individually
and as Trustee of The Wayne A. Cook 1998
Family Trust Dated 12/29/98
SUPERIOR COURT OF THE STATE OF CALIFORNIA
10 IN AND FOR THE COUNTY OF BUTTE
11
12 WAYNE A. COOK, TRUSTEE OF THE NO.: 20CV00905
WAYNE A. COOK 1998 FAMILY
13 TRUST DATED 12/29/98,
14 Plaintiff, Hearing Date: 4/5/2021
Hearing Time: 8:30 a.m.
15 Department: 1
16 Judge: Tamara Mosbarger
Date of Complaint 4/22/2020
17 EDWARD F. NIDEROST, et. al., Trial Date: 4/5/2021
18 Defendants.
19 /
20 AND RELATED CROSS COMPLAINTS
21 /
22
23
24
25
TRIAL MEMORANDUM (LOCAL RULE 1.9 (c))
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TRIAL MEMORANDUM (LOCAL RULE 1.9 (c))
Table of Contents
Table of Authorities Sennen e ener cent ee ee ea ee teen teeta
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1. Introduction seeeeeeeeeee fed e eee e eee er etr eneneeeeeneeenee deeteeeeeeee ones set teeeeeee
(a) Edward Niderost Approached Wayne Cook to Purchase The
Miller Mansion cess
(b) Mr. Niderost Was An Experienced Investor. setae : det eeeeeeeee
(c) The Parties Explained The Transactional Terms To Broker Bill Chance
Who Prepared A Contract And Reviewed It With The Parties seteeee seeee
(d) The Financing For The Real Estate Purchase Was Amended .
10
(e) The Real Estate Purchase Was Amended To Change The Buyer . .
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(f) Escrow Closes Without Any Problems teteeeeeee se eteeeeeeeeeees settee
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2. Plaintiff's Claim For Judicial Foreclosure Heenan eee een n eee eee e Ee Eee EEE a Eee EEE ESSE ESS EE eH OE SEE
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The Documents... seeeeea ren sees . 11
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(iii) The Borrower’s Need To Show That Risk Was Shifted. . cease . . 12
21
(c) There Is No Substantive Unconscionability seteeeeeeeee : feeeeee steeee 13
(i) The Borrower’s Need To Show That Risk Was Shifted . teteteee seteeeees 13
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(ii) The Phrase “Shock the Conscience” Is An Objective Term ... . 13
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(iii) A Term Is Not Unconscionable If There Is A Justification For The Term . wee 14
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TABLE
OF CONTENTS
(d) Claims That Are legally Irrelevant to Unconscionability 16
(i) The Buyer’s Ability To Pay Is Not A Relevant Legal Factor To
Unconscionability. It Is A Statutory Factor Only For Consumer Loans 16
(ii) The Fact That Escrow On The Miller Mansion Closed Only Seven Days
After Execution Of The Real Estate Purchase Agreement, Despite The Fact
That Defendant, As Buyer, Had 21 Days To Close Escrow, Is Not Legally
Relevant To Unconscionability 16
(iii) The Fact That The Sale Was Not Made Contingent Upon Any Written
Appraisal Is Not Legally Relevant To Unconscionability 16
Be 10 (e) Price Unconscionability Was Not Pleaded 17
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15 (b) The Misappropriation Of Real or Personal Property Of An Elder
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16 For A Wrongful Use Claim Lacks Merit 22
17 (i) Wayne Cook’s Alleged Brokering Did Not Violate Any Statute
18 Requiring A Broker’s License 23
19 (ii) Edward Niderost, Trustee Did Not Suffer Any Harm Relating To
20 A Broker’s License. 25
21 (iii) No Claim For A License Violation Can Be Stated Where There Are
22 Criminal Penalties And A Statute Does Not Declare The Contract To Be
23 Automatically Void. 26
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ii
TABLE OF CONTENTS
Table of Authorities
Cases
A & M Produce Co. v. FMC Corp.
(1982) 135 Cal.App.3d 473 12
California Grocers Assn. v. Bank of America
(1994) 22 Cal.App.4th 205 13, 19
Carbajal v. CWPSC, Inc.
(2016) 245 Cal. App.4th 227... 14
10 Carolina Casualty Ins. Co. v. L.M. Ross Law Group, LLP
il (2010) 184 Cal.App.4th 196
Cota v. County of Los Angeles
12
13 (1980) 105 Cal.App.3d 282 17
Daro v. Superior Court
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SE? Fuentes v. Tucker
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Gibbo v. Berger
20
21 (2004) 123 Cal.App.4th 396 23
Graham v. Bank of America, N.A.
22
23 (2014) 226 Cal.App.4th 594 10, 11
24 Graham y. Scissor-Tail, Inc.
25 (1981) 28 Cal.3d 807... 12
Kinnison v. Guaranty Liquidating Corp.
26
27 (1941) 18 Cal.2d 256 15
28
iii
TABLE OF AUTHORITIES
Medina v. Safe-Guard Products, Internat., Inc.
(2008) 164 Cal.App.4th 105 26, 27
Morris v. Redwood Empire Bancorp
(2005) 128 Cal.App.4th 1305 12, 13, 19
Odorizzi v. Bloomfield School Dist.
(1966) 246 Cal.App.2d 123 20, 21
Park Terrace Limited v. Teasdale
(2002) 100 Cal. App.4th 802 23
Paslay v. State Farm General Ins. Co.
10
(2016) 248 Cal.App.4th 639 22
ll
Perdue v. Crocker National Bank
12
(1985) 38 Cal.3d 913 19, 20
13
Sanchez v. Valencia Holding Co., LLC
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(2015) 61 Cal.4th 899 9, 10, 13, 14, 20
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(2006) 135 Cal.App.4th 466 11, 19
21
22
Statutes
23
Business and Professions Code
24
Section 1670 24
25
Section 10130 23, 24, 27
26
Section 10131 24, 26
27
Section 10131.1.... 25
28
Section 10139 27
Iv
TABLE OF AUTHORITIES
Section 10147.6 subdivision (a) 24
Section 10166.02 24, 25
Section 10240 subdivision (b) 24
Section 101166.02 (sic) 24
Civil Code
Section 1670.5 subdivision (a) 20
Section 1916.1 23
Section 2931 14
10 Section 2932... 14
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Section 1201(21)(A)
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Section 3104 subdivision (a)
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Section 3105
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Section 3308 ..
19
Section 3412
20
Evidence Code section 635 ..
21
22 Welfare & Institutions Code
23 Section 15610.30 subdivision (a) 20, 22
24 Section 15610.70 20
25 15 U.S.C.A. § 1639¢ 16
26
27
28
PLAINTIFFS’ MOTIONS IN LIMINE
Texts
California Civil Practice Real Property Litigation § 4:116
5 Miller and Starr California Real Estate (4th ed 2020)
§ 13:131.... 15
§ 13:134 15
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28 m:\orig_data\work\client directories\cook, wayne 1814\toa
for trial memo 329.docx
Vi
TABLE OF AUTHORITIES
Raymond L. Sandelman SBN 078020
Attorney at Law
196 Cohasset Road, Suite 225
Chico, CA 95926-2284
(530) 343-5090 / (530) 343-5091 (FAX)
Email:Raymond@sandelmanlaw.com
Attorney for Wayne A. Cook, individually
and as Trustee of The Wayne A. Cook 1998
Family Trust Dated 12/29/98
SUPERIOR COURT OF THE STATE OF CALIFORNIA
IN AND FOR THE COUNTY OF BUTTE
10
i
WAYNE A. COOK, TRUSTEE OF THE NO.: 20CV00905
12 WAYNE A. COOK 1998 FAMILY
TRUST DATED 12/29/98, TRIAL MEMORANDUM (LOCAL RULE
13
Plaintiff, 1.9(@))
14
15
Trial Date: 4/5/21
16 Hearing Time: 8:30 a.m.
EDWARD F. NIDEROST, et. al., Department: 1
17 Judge: Tamara Mosbarger
Defendants.
Date of Complaint: 4/22/2020
18
/
19
AND RELATED CROSS COMPLAINTS
20
/
21
22 1.Introduction
23 (a) Edward Niderost Approached Wayne Cook To Purchase The Miller Mansion
24 The Court has reviewed pleadings by John Denton, Conservator and Successor Trustee. The
25 facts developed in discovery are very different that Mr. Denton’s claims. The beginning variance
26 between Mr. Denton’s pleadings and the facts is Mr. Niderost’s desire to purchase the property that
27 was unaccompanied by any excessive persuasion. Mr. Niderost testified at his deposition that he
28 first became interested in buying the property located at 2185 Esplanade, Chico, California (the
TRIAL MEMORANDUM (LOCAL RULE 1.9 (c))
“Miller Mansion”) when he drove by it and saw that it was for sale. It was beautiful. He thought
that owning it would be like a kid getting a bicycle for Christmas. Here is a photograph of the
dwelling.
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19 Mr. Niderost told Bill Chance, the broker representing both Mr. Niderost and Mr. Cook,
20 that he sought out Mr. Cook. Ronald Eugene Culley (hereafter referred to as “Gene Culley”)
21 testified at his deposition that he, Lawrence Patterson and Edward Niderost went to lunch and Mr.
22 Culley and Mr. Niderost talked about purchasing the Miller Mansion. At the restaurant Mr. Niderost
23 recognized Jenna Steinsiek who worked for Wayne Cook and talked to her; then they went to visit
24 Mr. Cook. Mr. Cook was not at his office, but later that day Mr. Niderost returned to Mr. Cook’s
25 office and met with Mr. Cook. They had a long discussion about the Miller Mansion, and Mr. Cook
26 showed him the property. They went over details including little things, inside and out, of the
27 dwelling. They were at the property for two and a half hours. Mr. Niderost asked if he could get
28 the price down from the listing price of $1,550,000; Mr. Cook said that he would take off $50,000
TRIAL MEMORANDUM (LOCAL RULE 1.9 (c))
to make the sales price $1,500,000. Mr. Culley testified that Mr. Niderost said that he had always
loved the Miller Mansion property, that it was iconic, and that it was a history of Chico. Mr. Culley
testified that Mr. Niderost was going to finance the purchase of the Miller Mansion by selling his
property on Pentz Road that was worth about $950,000.
(b) Mr. Niderost Was An Experienced Investor
Mr. Niderost testified that he was very experienced as to real estate financing and lending.
Mr. Niderost has been a lender where other people signed notes like the note in this case. He has
probably made thirty such loans. Mr. Niderost had signed about twenty to thirty purchase agreements
similar to the purchase agreement in this case. Mr. Niderost testified that he understood that Mr.
10 Chance was going to have a dual agency representing both Mr. Niderost and Cook. Mr. Niderost
ao 11 had participated in other transactions in which the broker represented both sides.
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A Plaintiff’s motion in liminie explains that evidence as to other contracts being unconscionable is legally
28
irrelevant because they are not pertinent to the issues raised by the pleadings.
TRIAL MEMORANDUM (LOCAL RULE 1.9 (c))
1j/ trust can be characterized as unconscionable.
2 Sanchez v. Valencia Holding Co., LLC (2015) 61 Cal.4th 899 has one of the best articulations
3 of the general rules of unconscionability doctrine because it discusses:
4 ¢ The need to show both procedural and substantive unconscionability;
. The “shock the conscience” phrase is not a different authoritative standard for
substantive unconscionability;
Unconscionability requires a substantial degree of unfairness beyond a simple old-
fashioned bad bargain;
Not all one-sided contract provisions are unconscionable;
10 A contract can provide a “margin of safety” that provides the party with superior
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27 disclosures and consents.
* Morris v. Redwood Empire Bancorp (2005) 128 Cal. App.4th 1305, 1324 indicates that reallocation of risks is
28
part of substantive unconscionability.
12
TRIAL MEMORANDUM (LOCAL RULE 1.9 (c))
(c) There Is No Substantive Unconscionability
(i) The Borrower’s Need To Show That Risk Was Shifted
As explained above, Shadoan v. World Savings & Loan Assn. (1990) 219 Cal.App.3d 97,
106 holds that risk shifting is part of the unconscionability analysis. This issue was discussed above
under procedural unconscionability because A & M Produce Co. v. FMC Corp. (1982) 135
Cal.App.3d 473, 487 stated that unreasonable risk reallocations are tied to the procedural aspects of
unconscionability. Morris v. Redwood Empire Bancorp (2005) 128 Cal.App.4th 1305, 1324
indicates that reallocation of risks is part of substantive unconscionability.
. . . Morris also argues the agreement is substantively unconscionable because
it is a one-sided fee imposed only on the merchant, not the bank. This, however, does
10 not involve the “one-sided” reallocation of risks found by courts to “shock the
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17 outside the range of results that a reasonable person might view as available based on contemporary
18 values (See California Grocers Assn. v. Bank of America (1994) 22 Cal.App.4th 205, 214) (“‘[nJo
19 man in his senses and not under delusion would make on the one hand, and as no honest and fair
20 man would accept on the other’ [Citations]”). Sanchez v. Valencia Holding Co., LLC (2015) 61
21 Cal.4th 899, 911-912 uses slightly different language: “the test is ‘whether the terms are “so extreme
22 as to appear unconscionable according to the mores and business practices of the time and place.”’”
23 The “shocks the conscience” standard is not concerned with whether someone might think they could
24
25
. . - Morris also argues the agreement is substantively unconscionable because it is a one-sided
26
fee imposed only on the merchant, not the bank. This, however, does not involve the “one-sided”
27 reallocation of risks found by courts to “shock the conscience.”
28 Morris v. Redwood Empire Bancorp (2005) 128 Cal.App.4th 1305, 1324
13
TRIAL MEMORANDUM (LOCAL RULE 1.9 (c))
have gotten a better deal, because the California Supreme Court has made clear that
unconscionability requires a substantial degree of unfairness beyond a simple old-fashioned bad
bargain. “A party cannot avoid a contractual obligation merely by complaining that the deal, in
retrospect, was unfair or a bad bargain. Not all one-sided contract provisions are unconscionable.”
(Sanchez v. Valencia Holding Co., LLC (2015) 61 Cal.4th 899, 911)
(iii) A Term Is Not Unconscionable If There Is A Justification For The Term
Carbajal v. CWPSC, Inc. (2016) 245 Cal.App.4th 227, 248 explains that a contractual
provision is not substantively unconscionable simply because it provides one side a greater benefit;
a term is not unconscionable if there is a justification for the term.
10
A contractual provision is not substantively unconscionable simply because it
a 11 provides one side a greater benefit. The party with the greater bargaining power is
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result, but also on an absence of ‘justification’ for it.”’” [Citations]
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17 Here are the legal justifications for each of the terms claimed to be substantively
18 unconscionable:
19 (A) The right to commence non-judicial foreclosure proceedings is legally justified. This is
20 a statutory right (Civ. Code, §§ 2931, 2932; Civ. Proc. Code, § 725a). There is no basis for thinking
21 that the right is unconscionable.
22 (B) The acceleration clause is legally justified. Miller & Starr explain that this is a valid and
23 enforceable privilege of the holder of the note.
24
The right to accelerate on default is a valid and enforceable privilege of the
25 holder of the note. Even though the deed of trust secures an installment obligation that
26 provides for a series of payments over an extended period of time, the right of the
holder of the note to accelerate the debt on the debtor's default and to demand full
27 payment of the unpaid principal balance prior to the expiration of the term of the note
is a valid and enforceable right. Because the clause only governs the time of payment,
28
14
TRIAL MEMORANDUM (LOCAL RULE 1.9 (c))
it is not an illegal penalty, and since the amount of the obligation is not increased, it
does not constitute a forfeiture.
5 Miller and Starr California Real Estate (4th ed 2020) § 13:131
(C) The due on sale clause is legally justified. Miller & Starr explain why a lender has
legitimate concerns for such a clause.
Purpose of due-on-sale clause giving beneficiary control over property
transfers. Lenders often insert a due-on-sale clause in the note and deed of trust in
order to have some control over transfer of the property. The specific language in each
instrument may differ, but the intent of the beneficiary is the same. The beneficiary
wants the right to demand the full payment of the secured debt if the borrower transfers
the property... .
The due-on-sale clause allows the lender to investigate the transferee, and if
10
the transferee is not acceptable, the lender can demand the full payment of the secured
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17 5 Miller and Starr California Real Estate (4th ed 2020) § 13:134
18 (D) The assignment of rents clause is legally justified. Eighty years ago the California
19 Supreme Court approved assignment of rent clauses.
20 . . .The agreement between the parties, however, either by a clause inserted in
the deed of trust or mortgage or by a separate instrument, may provide that in the
21
event of default the rents are assigned absolutely to the mortgagee. It has been held
22 that such a provision, rather than pledging the rents as additional security, operates to
transfer to the mortgagee the mortgagor's right to the rentals upon the happening of
23 the specified condition. [Citations]. . . Our decisions have indicated, however, in
24 accord with the better view, that the parties to a mortgage or deed of trust may contract
respecting the right to rentals and that such agreements will be enforced in accordance
25 with the expressed intention
26
Kinnison v. Guaranty Liquidating Corp. (1941) 18 Cal.2d 256, 261-262
27 M1
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15
TRIAL MEMORANDUM (LOCAL RULE 1.9 (c))
(d) Claims That Are Legally Irrelevant to Unconscionability
(i) The Buyer’s Ability To Pay Is Not A Relevant Legal Factor To Unconscionability. It
Is A Statutory Factor Only For Consumer Loans
With respect to the claim that Edward Niderost lived in a frugal manner, reinvesting any
money that has been paid to him through his investments and historically keeping ample savings and
that he did not have the financial ability to make the payments on the $500,000 Fine Note and the
Fine Deed of Trust, the evidence will show that Mr. Niderost, as a creditor owned similar notes and
deeds of trust and owned substantial property. A defendant’s ability to pay is legally irrelevant to
the issue of unconscionability. Congress has made ability to pay relevant only for residential
10 mortgage transactions (15 U.S.C.A. § 1639c). Mr. Niderost testified at his deposition that he never
Be ll lived at the Miller Mansion and never intended to live at the property. He bought the property to
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