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Sumac: court d {:aiam in
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123456789 Sara M. Knowles (SBN 216139)
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LELAND, MORRISSEY & KNOWLES LLP
1660 Humboldt Road, Suite 6
Chico, CA 95928
12/17/2021
Telephone: (S30) 342-4500
Facsimile: (530) 345-6836
Attorneys for Defendant and Cross-Complainant John Denton
as Conservator for 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
WAYNE A. COOK, TRUSTEE OF THE CASE NO. 20CV00905
11 WAYNE A. COOK 1998 FAMILY TRUST
DATED 12/29/98, MANDATORY SETTLEMENT
CONFERNECE STATEMENT
Plaintiff,
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v.
EDWARD F. NIDEROST, INDIVIDUALLY
AND AS TRUSTEE OF THE EDWARD F.
NIDEROST REVOCABLE LIVING TRUST Assigned to: Judge Tamara Mosbarger
DATED NOVEMBER 8, 1998, DOES 1
THROUGH 10, Settlement Judge: Judge Michael Candela
Defendants.
And related cross actions
John Denton hereby submits his Mandatory Settlement Conference Statement, as
conservator of the Estate of Edward F. Niderost and Successor Trustee of the Edward F. Niderost
Revocable Trust Dated November 8, 1998.
1. Introduction
This action arises fi'om the sale of real property located in Magalia, California and known
as 14174 Racine Circle, Magalia, ,California. On or about February l, 2020, Lawrence Patterson,
with the assistance of Eugene Culley, induced Mr. Niderost to pay him the sum of $232,000,
purporting to sell real property known as 14174 Racine Court, Magalia, CA 95954 (“Real
Property”), a 2011 Toyota truck (“Truc ”) and a 2011 Fleetwood Southwind, VIN:
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123456789 1F66F5DY1BOA03212 (“RV”) to Mr. Niderost. At the time of the transaction Mr. Nidero'st was
83 years old. Mr. Nidreost is currently subject to a conservatorship, and his conservatee is John
Denton. He was appointed as the conservator of the estate of Mr. Niderost on April 24, 2020 and
became successor trustee of the Trust pursuant to a court order dated June 4, 2020.
2. Facts
There was no written real estate purchase agreement sigied by the parties regarding the
Real Property, although a handwritten bill of sale was prepared which indicated that the Real
Property was sold for $170,000, the RV was valued at $57,000 and the Truck was valued at
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$57,000. The funds for these items was delivered directly to Mr. Patterson, and were not placed in
11 escrow. Mr. Patterson has had use of the funds since approximately February 13, 2020.
12 The Real Property does not have a fair market value of $170,000. The highest sale of any
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comparable property in the Magalia area was $120,000 and the Real Property is far inferior. The
14 Truck is worth approximately $1,500. The RV is worth approximately $40,000. In short, Mr.
15 Patterson received the sum of $232,000, purporting to transfer the items specified above, which are
16 valued at approximately $161,500.
17 The Real Property has numerous issues, including the failure to have a legal foundation.
18 The mobile home which is on the Real Property is not capable of being of being financed by
19 conventional lenders given its age. No natural hazards report was issued, which could reveal
20 natural hazards which render the Real Property uninsurable.
21 Title to the Real property has not been transferred to Cross-Complainant. Mr. Patterson
22 failed to provide any disclosures provided by law for the transfer of the real property including a
23 real estate transfer disclosure (TDS) as required by Civil Code Section 11002 or any natural
24 hazards report. Despite receiving a demand for rescission and for return of the funds received, Mr.
25 Patterson has failed and refused to return any of the funds received by him to Cross-Complainant.
26 Mr. Denton’s Cross-Complaint seeks a variety of claims against Mr. Patterson. Counsel for
27 Mr. Denton anticipates an amendment to the pleadings with deleting causes of action for elder
28 abuse.
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123456789 Mr. Patterson has cross-complained for breach of contract and declaratory relief. That
cross complaint names Erwin Williams (who was the former guardian ad litem for Edward
Niderost) and John Denton, who is the conservator of Mr. Niderost. The Cross Complaint contains
a breach of contract claim but no contract was attached, and the verbatim terms of the contract
were not recited in the body of the Cross-Complaint.
3. Law and Argument
A. Failure to Provide Disclosures Renders the Purported Sale Void or Voidable.
It is the position of Mr. Denton that no legally required disclosures were made as required
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by law. This fact has not been refiited by Mr. Patterson has refilsed to close escrow and has
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demanded rescission and asserts that the sale is void or voidable. Mr. Patterson asserts that the sale
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is not void or voidable due to lack of a transfer disclosure statement.
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Realmuto v. Gagnard (2003) 110 Cal. App. 4th 193 which addresses this issue and states
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the statutory scheme of Civil Code section 1102 et seq. It provides as follows:
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16 “Our review of this statutory scheme convinces us that the Legislature intended
17 the seller's delivery of a disclosure statement to be a nonwaivable condition
precedent to the buyer's performance. By mandating delivery of the disclosure
18 statement “before transfer of title” (§ 1102.3, subd. (a1), giving the buyer an
unqualified right of rescission when the disclosure statement is delivered afier the
19 execution of an offer to purchase (§ 1102.3 ), and making the disclosure
20 requirement nonwaivable even in an “as is” sale ($6 1102, subd. (c), 1102.1. subd.
(a1), the Legislature plainly contemplated that buyers would never be irrevocably
21 committed to performing the contract without having received the required
disclosures. This legislative purpose would be defeated if a seller could enforce a
22 contract without having complied with the disclosure requirements.
Such a result would also deprive buyers of their statutory right of rescission. If
23 Realmuto had delivered the required disclosure statement in a timely manner, the
24 buyers would have had the right to rescind the contract within three to five days of
delivery of the statement. (§ 1102.3.) Because Realmuto did not deliver a TDS, the
25 statutory period for rescission was never triggered. In these circumstances,
allowing Realmuto to enforce the contract would eliminate the buyers' statutory
26 right of rescission. We must avoid a construction of the statute that would negate a
27 right of rescission the Legislature has deliberately written into the law.
28 Further, the disclosure form prescribed by the Legislature expressly states that
“prospective Buyers may rely on this information in deciding whether and on what
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terms to purchase the subject property.” (§ 1102.6.) Thus, the Legislature has
123456789 determined that buyers must be given the required disclosures in order to permit
them to assess whether or not to go through with the transaction, and if so, on what
terms. The statute makes it clear that this is not an optional directive; it is a
mandatory, nonwaivable condition of covered real estate transaction. We therefore
conclude that the seller's delivery of the disclosure statement is a condition
precedent to the buyer's duty to perform the contract.”
Mr. Patterson asserts that there has been a transfer of title as the deed for the Real Property
has allegedly been signed. Such Deed has not been delivered, nor recorded and the escrow
company has been instructed that the sale cannot close due to this, and other issues. California
law provides that “delivery of an instrument in escrow conveys no title to land”. Civil Code
10 section 1057, see also In re Chrisman (1940) 35 F. Supp 282, 283. A deed deposited in escrow, to
11 be delivered on full compliance with conditions of ‘contract of sale’, was of no legal effect until
12 such completion. Orange Cove Water Co. v. Sampson (1926) 78 Ca1.App. 334, 344.
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B. Even Assuming the Sale is Not Void or Voidable. Mr. Patterson is Subiect to Be Liable
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for Damages for Failure to Disclosure.
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Civil Code section 1102.13 provides that a transfer is not invalidated solely because of the
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failure to provide disclosures, and that any person who willfully or negligently violates or fails to
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18 perform any duty required pertaining to disclosures is liable in the amount of actual damages
19 suffered by a transferee.
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Case law interpreting this section provides that compensatory damages are available.
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Saunders v. Taylor (1996) 42 Ca1. App. 4th 1538
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23 C. Neither Erwin Williams nor John Denton are Proper Parties.
24 Mr. Patterson’s cross-complaint names both Erwin Williams and John Denton, and not the
25 real party in interest, Edward F. Niderost. Neither Erwin Williams nor John Denton are proper
26 parties, and neither have been joined in this litigation, and no summons has been issued. Any
27 claims must be brought against the name of the real party in interest as stated by CCP section
28 367. Counsel for Mr. Denton has meet and conferred with Mr. Patterson’s counsel but is awaiting a
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123456789 further response on this issue.
D. Mr. Patterson’s Cross-Complaint is Subiect to A Motion On the Pleadings as it Fails to
Set out Verbatim the Terms of the Contract Between the Parties.
When asserting a breach of contract claim the complaint must indicate whether the
contract is written (which the cross complaint specifies) but it must also set out the terms verbatim
in the body of the contract or a copy of the written instrument must be attached and incorporated
by reference. Otworth v. Southern Paafic Transp. C0. (1985) 166 Cal. App. 3d 452, 459.
The foregoing renders Mr. Patterson’s cross complaint vulnerable to a demurrer, or
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alternatively a judgment on the pleadings.
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13 3. Settlement Discussions
14 Counsel for the parties have engaged in meet and confer discussions. John Denton seeks a return
15 of the $170,000 representing the purchase price for the Real Property. Mr. Patterson has refused
16 this demand and has not issued a counter offer.
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Respectfillly submitted,
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LELAND, MORRISSEY & KNOWLES LLP
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Dated: December 17 2021 by (memwo.
Sara M. Knowles
Attorneys for Defendant and Cross-Complainant
24 John Denton as Conservator for the Estate of Edward
F. Niderost, and the Successor Trustee of the
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Edward F. Niderost Revocable Living Trust Dated
26 November 8, 1998 by and through John Denton as
Conservator of Estate of Edward F. Niderost and
27 Successor Trustee of the Edward F. Niderost
Revocable Living Trust Dated November 8, 1998.
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ll ART“ A'I'YTDV Cm DRJURY'T‘ FnKIEDDEKJF‘I: QT ATERIE'MT
123456789 PROOF OF SERVICE
I, Sara Knowles , 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: SETTLEMENT CONFERENCE
STATEMETN by:
é MAIL: Placed in the United States mail at Chico, California
10 Raymond L. Sandelman, Esq. Larry Lushanko, Esq.
196 Cohasset Road, Suite 225 1241 E. Mission Road
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Chico, CA 95926-2284 Fallbrook, CA 92028
12 Raflondesandelmanlawcom officegQlushankolawcom
Gene Culley
13 2185 Esplanade
Chico, CA 95928
14 gculley@sbcglobal.net
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ELECTRONIC SERVICE: I caused a copy of the document(s) to be sent fi‘om e-
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16 mail address sknowles@chicolawyer.com 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.
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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 17, 2021, at Chico, California.
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Sara Knowles
m. Meow
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