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Sara M. Knowles (SBN 216139)
LELAND, MORRISSEY & KNOWLES m
. .
F
EDITH-"Tl
1660 Humboldt Road, Suite 6 d Bum
Gil-Int?
Chico, CA 95928 |
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Telephone: (530) 342-4500 E 12/8/2021
Facsimile: (530) 345-6836
D 5mm Elma
Attorney for John Denton, as Conservator for Edward F.
Niderost and as Successor Trustee of the Edward F. Niderost
By g mm Fm
Revocable Living Trust Dated November 8, 1998
SUPERIOR COURT 0F CALIFORNIA,
COUNTY OF BUTTE
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WAYNE A. COOK; TRUSTEE OF THE ) CASE NO. 20CV00905
11 WAYNE A. COOK 1998 FAMILY TRUST )
DATED 12/29/98 ) OBJECTIONS TO PROPOSED
12 ) STATEMENT OF DECISION AND
Plaintifl‘, ) REQUEST FOR HEARING
13 )
V.
14 g
EDWARD F. NIDEROST, INDIVIDUALLY )
15 AND As TRUSTEE 0F THE EDWARD F. )
NIDEROST REVOCABLE LIVING TRUST )
16 DATED NOVEMBER 8, 1998, DOES 1 )
THROUGH 10, )
17 )
Defendants. )
18 )
AND RELATED CROSS-ACTION )
19 )
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21 John Denton, conservator of the Estate of Edward F. Niderost and Successor Trustee of
22 the Edward F. Niderost Revocable Living Trust Dated November 8, 1998, hereby files his
23 Objections to the Proposed Statement of Decision executed by the Court on November 19, 2021.
24 In addition, the Court is respectfully requested to set this matter for oral argument.
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I. AUTHORITY
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CCP section 632 specifies the basis for objections to a statement of decision. The court is
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required to issue a statement of decision explaining the factual and legal basis for its decision as
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to each of the principal controverted issues at trial upon the request of any party appearing at the
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trial. A material fact is one which is relevant and essential to the judgment and closely and
directly related to the court’s determination of the ultimate issues in the case. Kufi’el v. Seaside
Oil Co. (1977) 69 Cal App 3d 555, 65. Legal conclusions are not sufficient. Employers
Casualty Co. v. Northwestern Nat. Ins. Group (1980) 109 Cal.App. 3d 462, 473. Failure to issue
a complete statement of decision which fairly discloses the court’s findings on all issues of fact
may be reversible error. Sperber v. Robinson (1994) 26 Cal.App. 4th 73 6, 745.
Objections must be specific. Rz'pani v. Liberty Loan Corp (1979) 95 Cal.App. 3d 603,
615. Proper objections include those contending that the statement of decision omits or fails to
resolve a specifically identified controverted issue, the explanation of the basis for the decision
10 on an issue is ambiguous, or the statement relies on facts that were not proven or are outside the
11 record. CCP section 634.
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II. OBJECTIONS
13 A. The Court Failed to Address Whether Elder Abuse Occurred On The Basis of
14 Mr. Cook’s Actions Uyer ThLKnew 0r SMld Have Known Factor of Welfare &
Inst. Section 15610.301b) and Mr. Culley’s Actions.
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The Second Amended Complaint filed by John Denton, as conservator for Mr. Niderost
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on March 29, 2021 specifies, at pages 9 and 10, the cause of action for Elder Abuse. That cause
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of action specifically cites Welf. & Inst. Code section 15610.30.
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Paragraph 47 of the Complaint states that:
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20 “The conduct of Cross-Defendants, and each of them, was a substantial
factor in causing financial harm to Cross-Complainant. On this subject, it
21 is notable that, as to Mr. Culley, another in an act of elder abuse
assisting
suffices to create liability under California law. Cross-Defendants and
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each 0f them, knew or should have known that their wrongful conduct
23 and misappropriation of Cross-Complainants’ real and personal
property was likely to be harmful to Cross-Complainant.” (emphasis
24 added.)
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26 The Closing Brief and Reply brief of Mr. Denton also addressed the provision of Welf. &
27 Inst. Code section 15610.30.
28 At trial, the uncontroverted testimony of Michael McCrady provided that Mr. McCrady
spoke to Mr. Niderost who relayed that the purchase price for the Miller Mansion was $1,000,000
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because $500,000 of the total purchase price would be forgiven. Mr. McCrady explained to Mr.
Niderost that this was not the way that it worked, and the loan would not be forgiven. Mr.
McCrady observed that Mr. Niderost was confused during the conversation.
Mr. McCrady also spoke with Mr. Culley twice about Mr. Culley’s attempts to find
financing for Mr. Niderost to purchase the Miller Mansion.
The next day Mr. McCrady spoke with Mr. Cook about the pending transaction. Mr.
McCrady testified that he told Mr. Cook that Mr. Niderost “seemed to be confused about the
terms of the deal.” He told Mr. Cook that he should be careful, as “It seems that Mr. Niderost
doesn ’t really understand the terms of the deal. He seems very confused and, you know, he
seems not to understand what’s happening.” (emphasis added). He went on to suggest that Mr.
11 Cook should consider canceling the deal. Later, in that some interaction with Mr. Cook, Mr.
McCrady told Mr. Cook that Mr. Niderost was only putting down a hundred or a hundred fifiy
13 thousand and that Mr. Niderost was having a problem coming up with the down payment. At that
14 time Mr. Cook made a phone call, via speaker phone, to Mr. Culley. Mr. Cook mentioned to Mr.
Culley that he understood that Mr. Niderost was having a hard time coming up with the down
payment and was wondering how much Mr. Niderost could come up with. Mr. Culley replied
17 that Mr. Niderost could come up with maybe $150,000. Mr. Culley then asked Mr. Cook if Mr.
Cook would still provide financing so that the transaction could go forward. Mr. Culley and Mr.
Cook discussed what the new loan would look like, how much it would be, and what the terms
would be and what the payments might be. At no time during this telephone call did Mr. Culley
21 state that he had to check with Mr. Niderost.
After this call ended, Mr. Cook then placed a call to Mr. Chance which he also placed on
speaker for Mr. McCrady to hear. Mr. McCrady testified that he heard Mr. Cook tell Mr. Chance
24 that Mr. Niderost was having a hard time coming up with the down payment and asked Mr.
Chance what should be done. Mr. Chance’s response was “Wayne, you’ve engineered this thing
fi'om the start, you tell me what you want on the paperwork, I’ll draw it and I’ll get it sign .”
27 Mr. Cook then shared with Mr. Chance the contents of Mr. Cook’s conversation with Mr. Culley
and Mr. Chance repeated that he would get the paperwork taken care of and get back to him.
123456789 After the conclusion of this call, Mr. McCrady told Mr. Cook that $150,000 down on a
$1,500,000 purchase was thin, and that he knew that Mr. Cook would not normally do that. He
advised Mr. Cook that the terms of the deal were “pretty messy” and that “your buyer is confused
about what’s happening. ” He explained that Mr. Niderost had seemed confused and during
the conversation he would go “off tangent”. According to Mr. McCrady, he made the point
that there was something wrong with Mr. Niderost, and that he was not thinking straight and
was confused. (emphasis added). He recommended to Mr. Cook that he cancel the deal and Mr.
Cook indicated that he would not do that.
When Mr. McCrady was informing Mr. Cook that Mr. Niderost was confused or
vulnerable, and not understanding the terms of the transaction, he and Mr. Cook were looking at
11 each other and there was no indication that Mr. Cook did not understand what he was saying.
A true and correct copy of this portion of the trial transcript is attached hereto and
A
incorporated herein by reference as Exhibit “A”.
14 The Court’s Proposed Statement of Decision makes a ruling on Elder Abuse with respect
to Undue Influence, but does not make any ruling as to the previsions of Welf. & Inst. Code
section 15610.30 (Knew or Should Have Known). The Court makes no analysis or mention as to
Culley’s commission of Elder Abuse as to Knew or Should Have Known. The provisions of this
Code section and the facts giving rise to the allegations are a specifically identified controverted
issue. This is not mentioned in the Court’s Proposed Statement of Decision. In addition to the
testimony of Michael McCrady, testimony at trial included both Dr. Matthew Fine and Wayne
Cook regarding the creation of the first deed of trust, which was not specified in the parties’ Real
Estate Purchase Agreement or initial Addenda. Excerpts fiom this testimony, at trial, is attached
hereto and incorporated herein by references as, respectively, Exhibits “B”.and “C”. This
testimony revealed that Mr. Niderost did not have access to the funds to close the transaction and
thus needed additional financing to close escrow and that Mr. Cook knew this to be the case. He
remedied the situation by coming up with the funds from Dr. Fine, but if Mr. Niderost couldn’t
come up with the money for the down payment, then logically he wasn’t going to have fimds in
30 days to make the payments on the two deeds of trust. In addition, Mr. McCrady specifically
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told Mr. Cook that Mr. Niderost was confused, not thinking straight and that there was
something wrong with him.
Mr. Culley was aware that Mr. Niderost couldn’t come up with the funds, but he
continued to push the transaction and was actively seeking out funding for Mr. Niderost. Given
the failure of Mr. Niderost to come up with the funds to close, and the conversation that Mr.
Culley had with Mr. McCrady it is clear that Mr. Culley, as well as Mr. Cook were aware that
the transaction was likely to be harmfiil to Mr. Niderost and thus the element of “Knew or
Should Have Known” provided in Welf & Inst. Code section 15610.30 was satisfied.
Given the testimony, as well as the briefing on this subject, and the fact that the Second
10 Amended Complaint clearly raises this issue, the Court is required to make a ruling on this topic.
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B. The Court’s Finding of “No Evidence Presented At Trial That Mr. Niderost Had
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Deficits in Capacity” is Igcorrect and Not Smorted By the Record.
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14 The Court finds, in its Proposed Statement of Decision that “There was no evidence
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presented at trial that Mr. Niderost had deficits in capacity during the negotiations for the
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purchase of the Miller Mansion” The Court makes no reference, in its Proposed Statement of
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Decision regarding the entire uncontested testimony of Michael McCrady (See Exhibit “A”
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attached hereto). The Court has referred to the testimony of both Mr. Culley and Mr. Cook and
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has not mentioned the testimony John Denton or Yolanda Niderost about Mr. Niderost’s state of
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21 mind, his availability and demeanor at the time the negotiations were going on, and then
22 immediately afier. Portions of this testimony are attached hereto and incorporated herein by
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reference as Exhibits “D” and “E”, respectively. The Court makes no statement about the
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veracity of the witnesses whose testimony conflicted with Mr. Cook and Mr. Culley. Whether
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Mr. Niderost had any deficits in capacity is a specifically identified controveited issue and the
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27 testimony of Mr. McCrady, Mr. Denton and Mrs. Niderost address this issue. In addition, the
28 testimony of Mr. Niderost at trial is also crucial as to his recollection. True and correct copies of
a portion of Mr. Niderost’s testimony is attached hereto and incorporated herein by reference as
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Exhibit “F”.
For example, the Court does not address the testimony of Mr. Denton that Mr. Niderost,
near the time of the negotiations, was confused and acting completely out of character. The
Court does not address that Mr. Niderost’s recollection of having bought 70 homes in
Sacramento was actually Mr. Niderost being confused, since it was Mr. Denton who arranged
about 70 loans for someone else who was buying homes in Sacramento. Mr. Niderost only
funded some of those loans, and purchased zero homes in Sacramento. The Court does not
10 address that Mr. Niderost claims that Mr. Chance was not his real estate agent, and that he had
11 never met the man”.
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13 C. The Court’s Ruling on The Defense of Unclean Hands Is Not Supported by the
Record.
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The Court does not address the testimony of Mr. Cook wherein he stated that “You would
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have think I’d know better” when he was detailing the funds he spent on the Miller Mansion.
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Mr. Cook was aware that his conduct was likely to be harmful to Mr. Niderost, as he himself
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admitted that he should not have spent the sum of approximately $1,225,000 on the Miller
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Mansion ($825,000 purchase price and approximately $400,000 for repairs and improvements).
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The Court made no mention of this argument, which is a principal converted issue, in the
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Proposed Statement of Decision.
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In addition, the Court does discuss or even mention the testimony of Scott Hamm, MAI
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which indicated that the demonstrated that the Miller Mansion was worth $900k at best, yet the
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property was sold for $600k more. There was no discussion in the Proposed Statement of
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Decision that 1) Mr. Cook solicited Dr. Fine to fund the $500k loan, 2) Mr. Cook negotiated the
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loan terms with Mr. Niderost and then arranged to have the Note and Deed of Trust prepared by
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escrow, 3) The Dr. Fine loan enabled the sale of property to occur, 4) the sale was at an inflated
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price, demonstrated by Scott Hamm’s testimony and the fact that the home sat on the market for
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8 months during a strong seller’s market. As a result, Mr. Cook received the benefit of the
inflated sales price, which was enabled and occurred as a result of Mr. Cook soliciting Dr. Fine
for the $500k loan. This enrichment was falls under the broad category of “compensation,
regardless of the form or time payment” under Business and Professions Code section 10131
which specifies that a real estate broker is a person who, “for compensation or in expectation of
compensation, regardless of the form or time of paymen ”. The Court makes no analysis as to its
conclusion that Mr. Cook was not paid any compensation, as his compensation was the increase
the inflated purchase price. Business and Professions Code section 10131.1 gives further
definitions for a real estate broker, specifying, A real estate broker within the meaning of this
10 “ There is no requirement that a real estate agent be “in the business” as a
part is also .. .
11 mortgage loan orig'nator in order to have violated Business and Professions Code section 10131.
12 This is a principal controverted issue as it pertains directly to the defense that Mr. Cook was
13 acting outside his legally allowed scope in arranging a loan, and that he did so as to benefit
14 himself in the form of the increased purchase price. He was fully aware that the transaction
15 would not have closed unless he came up with additional financing.
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E. The Court’s Ruling Regarding Cancellation Does Not Take Into Consideration
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MKnew or Slug“ Have Kflwn” Aspect of Elder Abuse.
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Given the arguments specified above, pertaining to the Court’s failure to address the
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“Knew or Should Have Known” aspect of Elder Abuse, the Court must address that issue with
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respect to the cause of action for cancellation. The Court makes no mention of the “Knew or
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22 Should Have Known” provision of Elder Abuse within its analysis regarding cancellation.
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F. The Court’s Ruling Regarding Mr. Culley Was Not A Fiduciary Is Not
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Sugported By The Record.
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Mr. Culley admitted that he was a fiduciary, and he was a fiduciary when he acted on
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behalf of Mr. Niderost during his time as a manager of the Miller Mansion. The Court does not
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address this testimony.
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Conclusion
Given the foregoing identification of principal controverted issues that were not addressed
in the Court’s Proposed Statement of Decision, the Court is respectfully requested to set this
matter for oral argument regarding the foregoing objections.
LELAND, MORRISSEY & KNOWLES LLP
Dated: December 8, 2021 131% Sdra M. Knowles
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Attorneys for John Denton, Conservator of the
11 Estate of Edward F. Niderost, Individually and as
Successor Trustee of the Edward F. Niderost
12 Revocable Living Trust Dated November 8, 1998
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123456789 PROOF OF SERVICE
I, Sarah Vercruysse, declare:
I am a citizen of the United States and a resident of Butte County, State of California. I
am over the age of 18 years and not a party to the within action. My business address is 1660
Humboldt Road, Suite 6, Chico, CA 95928.
I am familiar with the practices of Leland, Morrissey & Knowles, LLP whereby each
document is placed in an envelope, the envelope is sealed, the appropriate postage is placed
thereon and the sealed envelope is placed in the office mail receptacle. Each day’s mail is
collected and deposited in a U.S. mailbox at or before the close of each day’s business.
On the date shown below, I caused to be served: Objections to Proposed Statement of
Decision and Request for Hearing by:
X MAIL: Placed in the United States mail at Chico, California
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Raymond L. Sandelman, Esq. Larry Lushanko, Esq.
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196 Cohasset Road, Suite 225 1241 E. Mission Road
Chico, CA 95926-2284 F allbrook, CA 92028
12 Mmondaasandelmanlawcom office@lushankolaw.com
13 Raoul J. LeClerc
P.O. Drawer 1 1 1
14 Oroville, CA 95965
rleclerc@leclerclawoffice.com
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ELECTRONIC SER VICE: I caused a copy of the document(s) to be sent from e-
16 mail address svercruysse@chicolawver.c0m to the persons at the e-mail addresses
listed in the Service List. I did not receive, within a reasonable time afier the
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transmission, any electronic message or other indication that the transmission was
unsuccessful.
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PERSONAL SERVICE: Delivery by hand to the addressee.
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I declare under penalty of perjury under the laws of the State of California that the
20 foregoing is true and correct.
21 Executed on December 8, 2021, at Chico, California.
WW
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arah Vercruysse
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Proof of Service
Preview
123456789 Sara M. Knowles (SBN 216139) LELAND, MORRISSEY & KNOWLES m . . F EDITH-"Tl 1660 Humboldt Road, Suite 6 d Bum Gil-Int? Chico, CA 95928 | L Telephone: (530) 342-4500 E 12/8/2021 Facsimile: (530) 345-6836 D 5mm Elma Attorney for John Denton, as Conservator for Edward F. Niderost and as Successor Trustee of the Edward F. Niderost By g mm Fm Revocable Living Trust Dated November 8, 1998 SUPERIOR COURT 0F CALIFORNIA, COUNTY OF BUTTE 10 WAYNE A. COOK; TRUSTEE OF THE ) CASE NO. 20CV00905 11 WAYNE A. COOK 1998 FAMILY TRUST ) DATED 12/29/98 ) OBJECTIONS TO PROPOSED 12 ) STATEMENT OF DECISION AND Plaintifl‘, ) REQUEST FOR HEARING 13 ) V. 14 g EDWARD F. NIDEROST, INDIVIDUALLY ) 15 AND As TRUSTEE 0F THE EDWARD F. ) NIDEROST REVOCABLE LIVING TRUST ) 16 DATED NOVEMBER 8, 1998, DOES 1 ) THROUGH 10, ) 17 ) Defendants. ) 18 ) AND RELATED CROSS-ACTION ) 19 ) 20 21 John Denton, conservator of the Estate of Edward F. Niderost and Successor Trustee of 22 the Edward F. Niderost Revocable Living Trust Dated November 8, 1998, hereby files his 23 Objections to the Proposed Statement of Decision executed by the Court on November 19, 2021. 24 In addition, the Court is respectfully requested to set this matter for oral argument. 25 I. AUTHORITY 26 CCP section 632 specifies the basis for objections to a statement of decision. The court is 27 required to issue a statement of decision explaining the factual and legal basis for its decision as 28 to each of the principal controverted issues at trial upon the request of any party appearing at the 123456789 trial. A material fact is one which is relevant and essential to the judgment and closely and directly related to the court’s determination of the ultimate issues in the case. Kufi’el v. Seaside Oil Co. (1977) 69 Cal App 3d 555, 65. Legal conclusions are not sufficient. Employers Casualty Co. v. Northwestern Nat. Ins. Group (1980) 109 Cal.App. 3d 462, 473. Failure to issue a complete statement of decision which fairly discloses the court’s findings on all issues of fact may be reversible error. Sperber v. Robinson (1994) 26 Cal.App. 4th 73 6, 745. Objections must be specific. Rz'pani v. Liberty Loan Corp (1979) 95 Cal.App. 3d 603, 615. Proper objections include those contending that the statement of decision omits or fails to resolve a specifically identified controverted issue, the explanation of the basis for the decision 10 on an issue is ambiguous, or the statement relies on facts that were not proven or are outside the 11 record. CCP section 634. 12 II. OBJECTIONS 13 A. The Court Failed to Address Whether Elder Abuse Occurred On The Basis of 14 Mr. Cook’s Actions Uyer ThLKnew 0r SMld Have Known Factor of Welfare & Inst. Section 15610.301b) and Mr. Culley’s Actions. 15 The Second Amended Complaint filed by John Denton, as conservator for Mr. Niderost 16 on March 29, 2021 specifies, at pages 9 and 10, the cause of action for Elder Abuse. That cause 17 of action specifically cites Welf. & Inst. Code section 15610.30. 18 Paragraph 47 of the Complaint states that: 19 20 “The conduct of Cross-Defendants, and each of them, was a substantial factor in causing financial harm to Cross-Complainant. On this subject, it 21 is notable that, as to Mr. Culley, another in an act of elder abuse assisting suffices to create liability under California law. Cross-Defendants and 22 each 0f them, knew or should have known that their wrongful conduct 23 and misappropriation of Cross-Complainants’ real and personal property was likely to be harmful to Cross-Complainant.” (emphasis 24 added.) 25 26 The Closing Brief and Reply brief of Mr. Denton also addressed the provision of Welf. & 27 Inst. Code section 15610.30. 28 At trial, the uncontroverted testimony of Michael McCrady provided that Mr. McCrady spoke to Mr. Niderost who relayed that the purchase price for the Miller Mansion was $1,000,000 2 123456789 because $500,000 of the total purchase price would be forgiven. Mr. McCrady explained to Mr. Niderost that this was not the way that it worked, and the loan would not be forgiven. Mr. McCrady observed that Mr. Niderost was confused during the conversation. Mr. McCrady also spoke with Mr. Culley twice about Mr. Culley’s attempts to find financing for Mr. Niderost to purchase the Miller Mansion. The next day Mr. McCrady spoke with Mr. Cook about the pending transaction. Mr. McCrady testified that he told Mr. Cook that Mr. Niderost “seemed to be confused about the terms of the deal.” He told Mr. Cook that he should be careful, as “It seems that Mr. Niderost doesn ’t really understand the terms of the deal. He seems very confused and, you know, he seems not to understand what’s happening.” (emphasis added). He went on to suggest that Mr. 11 Cook should consider canceling the deal. Later, in that some interaction with Mr. Cook, Mr. McCrady told Mr. Cook that Mr. Niderost was only putting down a hundred or a hundred fifiy 13 thousand and that Mr. Niderost was having a problem coming up with the down payment. At that 14 time Mr. Cook made a phone call, via speaker phone, to Mr. Culley. Mr. Cook mentioned to Mr. Culley that he understood that Mr. Niderost was having a hard time coming up with the down payment and was wondering how much Mr. Niderost could come up with. Mr. Culley replied 17 that Mr. Niderost could come up with maybe $150,000. Mr. Culley then asked Mr. Cook if Mr. Cook would still provide financing so that the transaction could go forward. Mr. Culley and Mr. Cook discussed what the new loan would look like, how much it would be, and what the terms would be and what the payments might be. At no time during this telephone call did Mr. Culley 21 state that he had to check with Mr. Niderost. After this call ended, Mr. Cook then placed a call to Mr. Chance which he also placed on speaker for Mr. McCrady to hear. Mr. McCrady testified that he heard Mr. Cook tell Mr. Chance 24 that Mr. Niderost was having a hard time coming up with the down payment and asked Mr. Chance what should be done. Mr. Chance’s response was “Wayne, you’ve engineered this thing fi'om the start, you tell me what you want on the paperwork, I’ll draw it and I’ll get it sign .” 27 Mr. Cook then shared with Mr. Chance the contents of Mr. Cook’s conversation with Mr. Culley and Mr. Chance repeated that he would get the paperwork taken care of and get back to him. 123456789 After the conclusion of this call, Mr. McCrady told Mr. Cook that $150,000 down on a $1,500,000 purchase was thin, and that he knew that Mr. Cook would not normally do that. He advised Mr. Cook that the terms of the deal were “pretty messy” and that “your buyer is confused about what’s happening. ” He explained that Mr. Niderost had seemed confused and during the conversation he would go “off tangent”. According to Mr. McCrady, he made the point that there was something wrong with Mr. Niderost, and that he was not thinking straight and was confused. (emphasis added). He recommended to Mr. Cook that he cancel the deal and Mr. Cook indicated that he would not do that. When Mr. McCrady was informing Mr. Cook that Mr. Niderost was confused or vulnerable, and not understanding the terms of the transaction, he and Mr. Cook were looking at 11 each other and there was no indication that Mr. Cook did not understand what he was saying. A true and correct copy of this portion of the trial transcript is attached hereto and A incorporated herein by reference as Exhibit “A”. 14 The Court’s Proposed Statement of Decision makes a ruling on Elder Abuse with respect to Undue Influence, but does not make any ruling as to the previsions of Welf. & Inst. Code section 15610.30 (Knew or Should Have Known). The Court makes no analysis or mention as to Culley’s commission of Elder Abuse as to Knew or Should Have Known. The provisions of this Code section and the facts giving rise to the allegations are a specifically identified controverted issue. This is not mentioned in the Court’s Proposed Statement of Decision. In addition to the testimony of Michael McCrady, testimony at trial included both Dr. Matthew Fine and Wayne Cook regarding the creation of the first deed of trust, which was not specified in the parties’ Real Estate Purchase Agreement or initial Addenda. Excerpts fiom this testimony, at trial, is attached hereto and incorporated herein by references as, respectively, Exhibits “B”.and “C”. This testimony revealed that Mr. Niderost did not have access to the funds to close the transaction and thus needed additional financing to close escrow and that Mr. Cook knew this to be the case. He remedied the situation by coming up with the funds from Dr. Fine, but if Mr. Niderost couldn’t come up with the money for the down payment, then logically he wasn’t going to have fimds in 30 days to make the payments on the two deeds of trust. In addition, Mr. McCrady specifically 123456789 told Mr. Cook that Mr. Niderost was confused, not thinking straight and that there was something wrong with him. Mr. Culley was aware that Mr. Niderost couldn’t come up with the funds, but he continued to push the transaction and was actively seeking out funding for Mr. Niderost. Given the failure of Mr. Niderost to come up with the funds to close, and the conversation that Mr. Culley had with Mr. McCrady it is clear that Mr. Culley, as well as Mr. Cook were aware that the transaction was likely to be harmfiil to Mr. Niderost and thus the element of “Knew or Should Have Known” provided in Welf & Inst. Code section 15610.30 was satisfied. Given the testimony, as well as the briefing on this subject, and the fact that the Second 10 Amended Complaint clearly raises this issue, the Court is required to make a ruling on this topic. 11 B. The Court’s Finding of “No Evidence Presented At Trial That Mr. Niderost Had 12 Deficits in Capacity” is Igcorrect and Not Smorted By the Record. 13 14 The Court finds, in its Proposed Statement of Decision that “There was no evidence 15 presented at trial that Mr. Niderost had deficits in capacity during the negotiations for the 16 purchase of the Miller Mansion” The Court makes no reference, in its Proposed Statement of 17 Decision regarding the entire uncontested testimony of Michael McCrady (See Exhibit “A” 18 attached hereto). The Court has referred to the testimony of both Mr. Culley and Mr. Cook and 19 has not mentioned the testimony John Denton or Yolanda Niderost about Mr. Niderost’s state of 20 21 mind, his availability and demeanor at the time the negotiations were going on, and then 22 immediately afier. Portions of this testimony are attached hereto and incorporated herein by 23 reference as Exhibits “D” and “E”, respectively. The Court makes no statement about the 24 veracity of the witnesses whose testimony conflicted with Mr. Cook and Mr. Culley. Whether 25 Mr. Niderost had any deficits in capacity is a specifically identified controveited issue and the 26 27 testimony of Mr. McCrady, Mr. Denton and Mrs. Niderost address this issue. In addition, the 28 testimony of Mr. Niderost at trial is also crucial as to his recollection. True and correct copies of a portion of Mr. Niderost’s testimony is attached hereto and incorporated herein by reference as 123456789 Exhibit “F”. For example, the Court does not address the testimony of Mr. Denton that Mr. Niderost, near the time of the negotiations, was confused and acting completely out of character. The Court does not address that Mr. Niderost’s recollection of having bought 70 homes in Sacramento was actually Mr. Niderost being confused, since it was Mr. Denton who arranged about 70 loans for someone else who was buying homes in Sacramento. Mr. Niderost only funded some of those loans, and purchased zero homes in Sacramento. The Court does not 10 address that Mr. Niderost claims that Mr. Chance was not his real estate agent, and that he had 11 never met the man”. 12 13 C. The Court’s Ruling on The Defense of Unclean Hands Is Not Supported by the Record. 14 15 The Court does not address the testimony of Mr. Cook wherein he stated that “You would 16 have think I’d know better” when he was detailing the funds he spent on the Miller Mansion. 17 Mr. Cook was aware that his conduct was likely to be harmful to Mr. Niderost, as he himself 18 admitted that he should not have spent the sum of approximately $1,225,000 on the Miller 19 Mansion ($825,000 purchase price and approximately $400,000 for repairs and improvements). 20 The Court made no mention of this argument, which is a principal converted issue, in the 21 Proposed Statement of Decision. 22 In addition, the Court does discuss or even mention the testimony of Scott Hamm, MAI 23 which indicated that the demonstrated that the Miller Mansion was worth $900k at best, yet the 24 property was sold for $600k more. There was no discussion in the Proposed Statement of 25 Decision that 1) Mr. Cook solicited Dr. Fine to fund the $500k loan, 2) Mr. Cook negotiated the 26 loan terms with Mr. Niderost and then arranged to have the Note and Deed of Trust prepared by 27 escrow, 3) The Dr. Fine loan enabled the sale of property to occur, 4) the sale was at an inflated 28 price, demonstrated by Scott Hamm’s testimony and the fact that the home sat on the market for 123456789 8 months during a strong seller’s market. As a result, Mr. Cook received the benefit of the inflated sales price, which was enabled and occurred as a result of Mr. Cook soliciting Dr. Fine for the $500k loan. This enrichment was falls under the broad category of “compensation, regardless of the form or time payment” under Business and Professions Code section 10131 which specifies that a real estate broker is a person who, “for compensation or in expectation of compensation, regardless of the form or time of paymen ”. The Court makes no analysis as to its conclusion that Mr. Cook was not paid any compensation, as his compensation was the increase the inflated purchase price. Business and Professions Code section 10131.1 gives further definitions for a real estate broker, specifying, A real estate broker within the meaning of this 10 “ There is no requirement that a real estate agent be “in the business” as a part is also .. . 11 mortgage loan orig'nator in order to have violated Business and Professions Code section 10131. 12 This is a principal controverted issue as it pertains directly to the defense that Mr. Cook was 13 acting outside his legally allowed scope in arranging a loan, and that he did so as to benefit 14 himself in the form of the increased purchase price. He was fully aware that the transaction 15 would not have closed unless he came up with additional financing. 16 E. The Court’s Ruling Regarding Cancellation Does Not Take Into Consideration 17 MKnew or Slug“ Have Kflwn” Aspect of Elder Abuse. 18 Given the arguments specified above, pertaining to the Court’s failure to address the 19 “Knew or Should Have Known” aspect of Elder Abuse, the Court must address that issue with 20 respect to the cause of action for cancellation. The Court makes no mention of the “Knew or 21 22 Should Have Known” provision of Elder Abuse within its analysis regarding cancellation. 23 F. The Court’s Ruling Regarding Mr. Culley Was Not A Fiduciary Is Not 24 Sugported By The Record. 25 Mr. Culley admitted that he was a fiduciary, and he was a fiduciary when he acted on 26 behalf of Mr. Niderost during his time as a manager of the Miller Mansion. The Court does not 27 address this testimony. 28 123456789 Conclusion Given the foregoing identification of principal controverted issues that were not addressed in the Court’s Proposed Statement of Decision, the Court is respectfully requested to set this matter for oral argument regarding the foregoing objections. LELAND, MORRISSEY & KNOWLES LLP Dated: December 8, 2021 131% Sdra M. Knowles 10 Attorneys for John Denton, Conservator of the 11 Estate of Edward F. Niderost, Individually and as Successor Trustee of the Edward F. Niderost 12 Revocable Living Trust Dated November 8, 1998 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 123456789 PROOF OF SERVICE I, Sarah Vercruysse, declare: I am a citizen of the United States and a resident of Butte County, State of California. I am over the age of 18 years and not a party to the within action. My business address is 1660 Humboldt Road, Suite 6, Chico, CA 95928. I am familiar with the practices of Leland, Morrissey & Knowles, LLP whereby each document is placed in an envelope, the envelope is sealed, the appropriate postage is placed thereon and the sealed envelope is placed in the office mail receptacle. Each day’s mail is collected and deposited in a U.S. mailbox at or before the close of each day’s business. On the date shown below, I caused to be served: Objections to Proposed Statement of Decision and Request for Hearing by: X MAIL: Placed in the United States mail at Chico, California 10 Raymond L. Sandelman, Esq. Larry Lushanko, Esq. 11 196 Cohasset Road, Suite 225 1241 E. Mission Road Chico, CA 95926-2284 F allbrook, CA 92028 12 Mmondaasandelmanlawcom office@lushankolaw.com 13 Raoul J. LeClerc P.O. Drawer 1 1 1 14 Oroville, CA 95965 rleclerc@leclerclawoffice.com 15 ELECTRONIC SER VICE: I caused a copy of the document(s) to be sent from e- 16 mail address svercruysse@chicolawver.c0m to the persons at the e-mail addresses listed in the Service List. I did not receive, within a reasonable time afier the 17 transmission, any electronic message or other indication that the transmission was unsuccessful. 18 PERSONAL SERVICE: Delivery by hand to the addressee. 19 I declare under penalty of perjury under the laws of the State of California that the 20 foregoing is true and correct. 21 Executed on December 8, 2021, at Chico, California. WW 22 arah Vercruysse 24 25 26 27 28 Proof of Service