Final Complaint

1 B.
KWAKU DUREN & ASSOCIATES, PC

B. Kwaku Duren, Esq. (SBN: 147789)
2 4716 South Crenshaw Blvd.
Los Angeles, California 90043
3 Telephone: (323) 290-6146
Fax: (323) 290-1645
4 Email: bkwakuduren@hotmail.com
5 DEBT RELIEF LAW CENTER, APC
Allan Khoshbin, Esq. (SBN: 165486)
6 1642 Westwood Blvd. - Suite 200
Los Angeles, California 90024
7
Attorneys for Plaintiffs JEHUDA
8 RENAN and KARNIT MOUCHLY
9
10
11 SUPERIOR COURT OF THE STATE OF CALIFORNIA
12 FOR THE COUNTY OF LOS ANGELES
13
14 JEHUDA RENAN and KARNIT ) Case No. ___________________
MOUCHLY, )
15 )
Plaintiffs, ) COMPLAINT FOR DAMAGES,
16 ) DECLARATORY AND/OR OTHER
vs. ) APPROPRIATE EQUITABLE
17 ) RELIEF [arising from the following
) alleged violations]:
18 WASHINGTON MUTUAL BANK, FA, )
WASHINGTON MUTUAL BANK; ) 1. Constructive Fraud and/or
19 WASHINGTON MUTUAL INCORPO- ) Intentional misrepresentation
RATED; BANK OF AMERICA, BANK )
20 OF AMERICA, NATIONAL ASSOC- ) 2. Breach of Fiduciary Duties
IATION, as Successor by Merger to )
21 "LA SALLE BANK, NA, as Trustee for ) 3. Breach of Implied Contract &
Washington Mutual Mortgage Pass- ) Implied Covenant of Good
22 Through Certificates Wamu Series 2007- ) Faith and Fair Dealing
0A4 Trust”; JP MORGAN CHASE )
23 BANK, N.A., Successor in Interest from ) 4. Unjust Enrichment
the Federal Deposit Insurance Corpor- )
24 ation, as Receiver for WASHINGTON ) 5. Wrongful Foreclosure
MUTUAL BANK; CARLOS SANCHEZ)
25 & ASSOCIATES, INC. and DOES 1- )
100, Inclusive, )
26 )
Defendants. )
27 _________________________________)
28 //
Complaint for Damages, Declaratory And/or for Other Appropriate Equitable Relief
Page 1 of 20
1 Plaintiffs JEHUDA RENAN and KARNIT MOUCHLY submit this Complaint
2 for Damages, Declaratory And/or for Other Appropriate Equitable Relief, including but
3 not limited to quieting title and vacating a void or voidable non-judicial foreclosure sale,
4 alleging as follows:
5 PARTIES AND CHAIN OF TITLE TO RESIDENTIAL REAL PROPERTY
6 1. Plaintiffs JEHUDA RENAN and KARNIT MOUCHLY [hereinafter
7 “Plaintiff(s),” “borrower(s)”, or “homeowner(s)” at all times relevant to this action, lived
8 at, and were the “trustors” on the Deed of Trust, executed on March 26, 2007, securing
9 the loan used to purchase the residential property located at 1646 Woods Dr., L.A., Ca.,
10 90059, in the County of Los Angeles, State of California, legally described as follows:
11 “That portion of Lot 59 of Cielo Vista Terrace, in the City of Los Angeles,
County of Los Angeles, State of California, as per map recorded in Book 53
12 Pages 35 of maps, in the office of the County Recorder of said county, lying
Westerly of the following described line: Beginning at a point in the
13 Northerly line of said Lot 59, distant thereon North 88 0 47' 50" West
102.00 feet from the Northeasterly line corner of said Lot 59; thence South
14 180 38' 25" East 50.87 feet; thence South 10 28' 50" West 82.87 feet to the
Southerly line of said Lot 59. . . Except thereon that portion of said Lot 59,
15 lying Southerly of a straight line that exists Westerly from the Southwesterly
corner of the land described in Parcel of the Deed to John Del Zappa and
16 wife, recorded on July 20, 1962 as Instrument No. 4837, in Book 01692
Page 603, of Official Records, in the office of said county, to the most
17 Westerly corner of Lot 7 of Tract 12204, as shown on map recorded in Book
230 Pages 40 and 41 of maps, records of said county. [Assessor's Parcel
18 No: 5556-031-022]
19 2. Plaintiffs allege that defendant WASHINGTON MUTUAL BANK, FA,
20 WASHINGTON MUTUAL BANK is a subsidiary of WASHINGTON MUTUAL
21 INCORPORATED [hereinafter “WAMU”], Washington State corporation, was the
22 “Lender” on the herein loan transaction, regularly and continuously engaged in the
23 business of making residential real property loans, and conducting said business in
24 California, at the address, 2273 North Green Valley Parkway, Suite 14, Henderson,
25 Nevada, 89014.
26 3. Plaintiffs allege that defendant WASHINGTON MUTUAL INCORPOR-
27 ATED [hereinafter “WAMU, INC.”], is a Savings Bank Holding Company, headquarter-
28 ed in Washington State, and the former owner/“parent company” of defendant WAMU.
Page 2 of 20
1 4. Plaintiffs allege that defendant JP MORGAN CHASE BANK, N.A.,
2 Successor in Interest from the Federal Deposit Insurance Corporation, as Receiver
3 for WASHINGTON MUTUAL BANK [hereinafter “JP MORGAN”], is an Ohio Corp-
4 oration, doing business in California, and the “successor in interest” to defendant
5 WAMU, on or about September 25, 2008.
6 5. Plaintiffs allege that defendant BANK OF AMERICA, BANK OF
7 AMERICA, NATIONAL ASSOCIATION, as Successor by Merger to "LA SALLE
8 BANK, NA, as Trustee for Washington Mutual Mortgage Pass-Through Certificates
9 WAMU Series 2007-0A4 Trust, [hereinafter “B of A”], is a North Carolina corporation
10 doing business in California, and was assigned all beneficial interest in the herein Deed of
11 Trust [and presumably the “Note”] on February 28, 2009, by defendant JP MORGAN
12 CHASE BANK, N.A., Successor in Interest from the Federal Deposit Insurance Cor-
13 poration, as Receiver for WAMU, and was also the “foreclosing beneficiary” of the non-
14 judicial foreclosure sale on October 1, 2009, and thus is not a “bona fide purchaser.”
15 6. Plaintiffs allege that Defendant QUALITY LOAN SERVICE CORPOR-
16 ATION [hereinafter “QUALITY”] is a California corporation doing business as a either a
17 “loan servicer” or “foreclosing trustee,” and that at all times relevant “lacked standing or
18 authority” to act on behalf of the actual beneficiary of the herein Borrowers’ Deed of
19 Trust, and had no recorded interest enabling it to so act.
20 7. Plaintiffs allege that defendant CARLOS SANCHEZ & ASSOCIATES,
21 INC., [hereinafter “SANCHEZ”] is California corporation, and at all times relevant,
22 doing business as a “Mortgage Broker,” licensed at 9201 Wilshire Blvd., Suite 101,
23 Beverly Hills, California, and was the “Mortgage Broker,” involved in the herein loan
24 transaction.
25 8. Plaintiffs are ignorant of the true names and capacities of other defendants
26 sued herein as DOES 1- 100, inclusive, and therefore sue these defendants by such
27 fictitious names Plaintiffs will amend this complaint to allege their true names and
28 capacities when ascertained.
Page 3 of 20
1 9. Plaintiffs allege that each of the fictitiously named defendants is responsible
2 in some manner for the damages sustained by plaintiffs as alleged herein, and that such
3 damages as herein alleged were proximately caused by such defendants, acting in concert,
4 as either agents, representatives, employees acting within the course and scope of such
5 agency and employment, or co-conspirators or co-defendants, in doing, or participating in,
6 the wrongful things hereinafter alleged.
7 10. Plaintiffs are ignorant of the true names and capacities of other defendants
8 sued herein as DOES 1- 100, inclusive, and therefore sue these defendants by such
9 fictitious names. Plaintiffs will amend this complaint to allege their true names and
10 capacities when the same has been ascertained.
11 11. Plaintiffs allege that each of the fictitiously named defendants is responsible
12 in some manner for the damages sustained by plaintiffs as alleged herein, and that such
13 damages as herein alleged were proximately caused by such defendants, as either agents,
14 representatives, employees acting within the course and scope of such agency and
15 employment, or co-conspirators or co-defendants, in doing, or participating in, the
16 wrongful things hereinafter alleged.
17 FIRST CAUSE OF ACTION
18 (Constructive Fraud and/or Intentional Misrepresentation)
19 [Against Defendants WAMU, WAMU, INC., SANCHEZ, B of A & JP MORGAN]
20 12. Plaintiffs incorporate by reference paragraphs 1-11 as if they were fully set
21 forth below.
22 13. Defendants WAMU, INC., B of A, and JP MORGAN, although not direct-
23 ly involved in the origination of the herein loan transaction, nonetheless have liability for
24 the negligent conduct of defendant WAMU, since they were aware [or should have been
25 aware - as either ‘successors-in-interest” assuming all, or portions of the assets and liabil-
26 ities, or the “parent company,” or “assignees” of defendant WAMU’s successors- in-inter-
27 est] that defendant WAMU had been involved in “improper and/or negligent sub-prime
28 loan” policies and practices which put both “investors” and “homeowners” at risk.
Page 4 of 20
1 14. The herein Borrowers were provided with an “Adjustable Rate Mortgage
2 Loan,” [also the herein “contract” pursuant to California Civil Code, § 2920(a)] but there
3 is no evidence that defendants WAMU or SANCHEZ provided Borrowers with the requir-
4 ed ARM Disclosures, including the Consumer Handbook on Adjustable Rate Mortgages
5 Disclosure at the time of application or within three business days of application, nor at
6 any time prior to closing of the herein residential loan transaction. There is also no eviden-
7 ce that the herein Lender provided an initial Truth In Lending (TIL) Disclosure, since the
8 herein Borrowers were only provided a shared copy of the final TIL statement, with a pre-
9 printed dated of March 7, 2007. Since Borrowers were not provided the initial TIL state-
10 ment, it cannot be confirmed that the variance in the rate and finance charge are within the
11 limits set forth by statute; however, the failure to provide Borrowers with signed copies of
12 the herein described “disclosures” violated California Civil Code §1921 and TILA.
13 15. California Civil Code, § 1921(1)(b), provides, in relevant part, that “(a)ny
14 lender who fails to comply with the requirements of this section may be enjoined by any
15 court of competent jurisdiction and shall be liable for actual damages, the costs of the
16 action, and reasonable attorney’s fees as determined by the Court. The court may make
17 those orders as may be necessary to prevent future violations of this section.”
18 16. Borrowers were also not provided with a Mortgage Loan Disclosure State-
19 ment within three (3) business days of receipt of a completed loan application “before”
20 the Borrowers become obligated on the Note - nor at any time during the transaction. This
21 is a violation of the California Business and Professions Code § 10240(a), § 10241, §
22 10245, and California Code of Regulations, Title 10, § 2840.
23 17. Borrowers were sold a Non-Traditional, Adjustable-Rate Mortgage without
24 signing a Non-traditional, Adjustable Rate Acknowledgment disclosure; there is no
25 evidence in the loan documents that defendants WAMU or SANCHEZ provided these
26 disclosure at anytime during the loan process, as required under California Finance Code,
27 Sections 22150, 22156-57, 22159, 22161, 22163-64, 22171, 22302, 22502, 22701, 22714,
28 and were therefore in direct violation of said statutes.
Page 5 of 20
1 18. There is no evidence that Borrowers were provided, or that they signed an
2 acknowledgment for receipt of, nor was disclosed, the Consumer Caution and Home
3 Ownership Counseling Notice Disclosure at least three business days prior to signing the
4 loan documents. This is in direct violation oft California Financial Code, § 4973(k)(1).
5 19. There is no evidence that Lender provided the Identifiable Benefit
6 Worksheet and Disclosure Statement any time in the herein loan process. This is also a
7 direct violation of California Financial Code, § 4973(j), which provides, in relevant part,
8 as follows:
9 “A person who originates a covered loan shall not refinance or arrange for
the refinancing of a consumer loan such that the new loan is a covered loan
10 that is made for the purpose of refinancing, debt consolidation or cash out,
that does not result in an identifiable benefit to the consumer, considering
11 the consumer’s stated purpose for seeking the loan, fees, interest rates,
finance charges, and points.”
12
20. In fact, prior to Loan Closing defendant CARLOS SANCHEZ & ASSOCI-
13
ATES, INC., intentionally [in writing computing the alleged “savings”] misled Plaintiff’s
14
regarding the actual “monthly savings” they would obtain from the herein loan, violating
15
§ 4973(j) of the California Financial Code, which required Brokers involved in the refi-
16
nancing of a Borrower’s residential mortgage to provide the Borrower with a loan result-
17
ing in an “identifiable benefit...considering the consumer’s stated purpose for seeking the
18
loan....”
19
21. There is no evidence that Borrowers received the Housing Financial
20
Discrimination Act of 1977 Fair Lending Notice at the time of application. This is in direct
21
violation of the California Code of Regulations, Title 21, § 7114, which provides, in
22
relevant part, as follows:
23
“(a) A financial institution shall provide each applicant for financial
24 assistance upon the submission of a written application as completed by
and submitted by the applicant, and shall post in a conspicuous place, a
25 Fair Lending Notice which sets forth the prohibitions of Chapter 3 of the
Act, the complaint procedures set forth in Chapter 4 of the Act, and the
26 name and address of the officer(s) where complaints may be filed and
where questions may be asked....”
27 //
//
28
Page 6 of 20
1 22. Plaintiffs, who were unsophisticated in real estate matters, reasonably
2 imposed their trust and confidence in defendant SANCHEZ, whom Plaintiff had known
3 and previously trusted, and thus were led to believe, and relied upon, all that they were
4 being told by him in agreeing to the herein “adjustable mortgage loan,” and were not
5 aware of the contents, and were never provided with copies, of the herein
6 described“statutorily required disclosures.”
7 23. The failure of Defendants WAMU and SANCHEZ to provide plaintiffs
8 with the herein described disclosures prevented Plaintiffs from fully understanding the
9 terms, conditions and risks involved in the loan transaction, and constitutes either
10 constructive fraud and/or intentional, or negligent, misrepresentation. Plaintiffs are
11 informed and believe, and on that basis allege that, although defendant SANCHEZ has
12 primary liability, defendant WAMU [its successors, assigns, and “parent company”]
13 has/have secondary liability.
14 24. Thus, as a direct and proximate result of Defendant SANCHEZ’s breach of
15 his fiduciary duties, the herein Borrowers have suffered damages in an amount to be
16 proven at trial but in any case not less than the sum of $500,000.00, and are also entitled
17 to equitable relief, including but not limited to vacating or voiding the herein loan
18 transaction and/or the herein wrongful foreclosure sale.
19 25. The conduct of defendant SANCHEZ was malicious, contemptible, loath-
20 some, and/or in reckless disregard of Plaintiffs' statutory rights, thus entitling Plaintiffs to
21 recover punitive damages in an amount sufficient to punish defendants and to deter others
22 from engaging in similar conduct.
23 SECOND CAUSE OF ACTION
24 (Breach of Fiduciary Duties)
25 [Against defendants WAMU and SANCHEZ]
26 26. Plaintiffs incorporate by reference paragraphs 1-4, 7-11 and 13-23, as if they
27 were fully set forth below.
28 //
Page 7 of 20
1 27. Defendant SANCHEZ was, at the time of the origination of the herein loan
2 transaction, a licensed Real Estate Broker [License No. 00881264, first issued December
3 13, 1985, which expired on September 30, 2009, whose address was 9201 Wilshire Blvd.,
4 California 90210].
5 28. Defendant SANCHEZ, as a broker, owed Borrowers a fiduciary duty,
6 including the duty to explain all the material terms of the loan, to provide Borrowers with
7 all required disclosures described herein, and to advise Borrowers of the risks of entering
8 to the loan the transaction.
9 29. Defendant SANCHEZ breached his “fiduciary duty” and is thus liable for
10 damages which were proximately caused by the non-disclosure of the required disclosures.
11 30. In addition, Defendant SANCHEZ is liable for damages which in fact were
12 proximately caused by the defendant’s materially misleading or incomplete
13 representations regarding the terms of the loan and his failure to properly advise
14 Borrowers of the material risks or disadvantages of the loan terms.
15 31. Further, Defendant SANCHEZ received a “yield spread premium” in the
16 approximate amount of $9,468.75, as part of a “Yield Spread Premium” payment by the
17 lender from herein loan transaction “making the broker the agent of the lender." Thus,
18 Defendant WAMU has secondary liability for any damages suffered by Borrowers as a
19 result of said non-disclosure and/or misrepresentations.
20 32. As a direct and proximate result of the herein described “breach of fiduciary
21 duty” owed by Defendant SANCHEZ to the herein Borrowers, they have suffered
22 damages in an amount to be proven at trial but in any case no less than the amount of
23 $700,000.00.
24 33. The conduct of defendant SANCHEZ was so malicious, contemptible, loath-
25 some, and/or done in reckless disregard of Plaintiffs' statutory rights, which would be
26 despised by ordinary people. Thus Plaintiffs are entitled to punitive damages in an amount
27 sufficient to punish defendant and to deter others from engaging in similar conduct.
28 //
Page 8 of 20
1 THIRD CAUSE OF ACTION
2 (Breach of Contract/Implied-In-Fact Contract & Implied
3 Covenant of Good Faith & Fair Dealing)

[Against defendants WAMU, WAMU, INC. & JP MORGAN]
4
34. Plaintiffs incorporate by reference paragraphs 1-5, 8-11, 13-24 and 27-32,
5
as if they were fully set forth below.
6
35. Plaintiffs telephone defendant JP MORGAN CHASE [“successor in
7
interest to defendant WAMU”] in late September 2008, early October 2008, and spoke
8
with the defendants “agents/employees” to find out how he could restructure his loan, a
9
loan that had been originated in fraud and/or misrepresentation, as described herein.
10
36. Plaintiff spoke with someone in defendant JP MORGAN CHASE’s “custo-
11
mer service” who told that him that his loan could not be “modified” because his loan
12
payments were current; in reliance on the representation from defendant JP MORGAN
13
CHASE’s customer service representative Plaintiff stopped making payments, beginning
14
in November 2008, since he was specifically told that only then would he be considered
15
for a loan modification.
16
37. In March 2009, defendant WAMU/JP MORGAN CHASE issued Plaintiff
17
a Notice of Default, and recorded on March 3, 2009.
18
38. Beginning in January-February 2009, Plaintiff made numerous attempts to
19
contact the servicer to obtain a loan modification package, but no one would return his
20
telephone calls. Eventually in late March, early April, 2009, he was sent a modification
21
package, and had conversations with defendant WAMU’s “Loss Mitigation Department”
22
about documenting Plaintiffs’ monthly income. Plaintiff is a self-employed Doctor of
23
Gynecology, his income fluctuated from month to month, and his book-keeper had not yet
24
filed his 2008 tax returns.
25
39. Having no success negotiating a modification himself, Plaintiff contacted an
26
attorney with the Debt Relief Law Center in late May 2009, and they began assisting
27
Plaintiff to obtain a loan modification with defendant WAMU.
28
Page 9 of 20
1 40. Plaintiff is informed and believe, and on that basis, allege that defendant
2 WAMU, at all times relevant after its initial involvement as “Lender” in the herein loan
3 transaction, and subsequent to September 25, 2008 when its “banking operations” were
4 “seized” by the Office of Thrift Supervision (OTS), and “sold” to defendant JP
5 MORGAN CHASE the following day, was acting herein as the “Servicer” of the herein
6 mortgage loan.
7 41. Thereafter, on June 18, 2009, “Sandra,” an employee of the Debt Relief
8 Law Center, made telephone contact with defendant WAMU, and was instructed to send
9 in an “Authorization” and a “request for modification,” which was done; and on June 23,
10 2009, “Sandra” spoke with “Zack,” a representative of Defendant WAMU [ID No. U-
11 41178], and obtained a postponement of the scheduled sale date until July 24, 2009 [of
12 the June 24, 2009 ‘Notice of Trustee’s sale,” dated June 4, 2009], in order for defendant
13 WAMU to review plaintiff’s modification package.
14 42. On July 21, 2009, “Sandra” was notified by defendant WAMU that there
15 were “missing items,” i.e., signed tax returns and utility bills, which had were faxed to the
16 Loss Mitigation Department, and July 22, 2009 telephoned “Sarah,” a Loss Mitigation
17 agent, who confirmed that defendant WAMU had received the faxed documents, and that
18 she would email the assigned modification negotiator to remind her of the upcoming sale
19 date on July 24, 2009, so that a timely determination of Plaintiff’s options could be made
20 by the Debt Relief Law Center.
21 43. On July 23, 2009 “Sandra” telephoned defendant WAMU and spoke to
22 “Alex” [at ext. 17627] and was informed that the sale date had been “suspended” as of
23 July 15, 2009, and that the Trustee should have “updated their system” and also stated
24 that the Plaintiff’s file had been assigned to Negotiator, “Amaly Dissanayake,” and that
25 she was working on the modification request.“Sandra” also telephoned the Trustee,
26 Defendant QUALITY, and was advised that the July 24th sale date had been postponed
27 by the “Beneficiary” until August 24, 2009.
28 //
Page 10 of 20
1 44. On August 20, 2009, “Sandra” telephoned defendant WAMU and spoke
2 with “Jordan” [ext. 409957], in Defendant WAMU’s Loss Mitigation; he advised that
3 there was “no sale date” and that Plaintiff’s modification was still under review by the
4 defendant WAMU’s Negotiator.
5 45. On August 21, 2009, “Sandra” telephoned defendant WAMU and spoke
6 with “Ankur” [ID No. U-413926] and he advised that he did not see a “sale date” on the
7 account and that he would contact the Trustee [i.e, defendant QUALITY] to confirm that
8 there was “no sale date.” After being placed on “hold” for a long period of time, he came
9 back and said he had spoken with a “live person” who told him that the sale date had been
10 “postponed for 30 days” and that the automated system would be updated by the “end of
11 the day.” Eight hours later, “Sandra” telephoned “Wanda” [ext. 250759], in Loss
12 Mitigation, who stated that there was “no sale date”
13 46. On September 4, 2009, “Sandra,” and employee of the Debt Relief Law
14 Center, was notified that there was still documents missing from the Borrower’s
15 modification file, and re-faxed the utility bills and 2008 tax returns to defendant WAMU,
16 Loss Mitigation Division, at 866-282-5682.
17 47. On September 4, 2009, “Sandra,” and employee of the Debt Relief Law
18 Center, telephoned defendant WAMU, Loss Mitigation Division, and spoke with
19 “Amanda” and she stated nothing else was missing from the file and that the account was
20 still under review and that there was no “sale date,” to call back in two weeks to find out
21 if the Negotiator had “notated the account.”
22 48. On September10, 2009, “Sandra” telephoned defendant WAMU and spoke
23 \with “Anthony” from Loss Mitigation, and asked him for an update on the account; she
24 was told that “Amaly” was working on the file and that there was “no sale date” and that
25 the “foreclosure was on hold.”“Sandra” asked “Anthony” to call the Negotiator and let
26 her know if she needs anything she can contact her or the borrower. “Anthony” also
27 advised “Sandra” that the Loss Mitigation had received the second fax of utility bills and
28 2008 tax return, and said that the “process can take up to 60-90 more days.”
Page 11 of 20
1 49. On September 23, 2009,“Sandra” telephoned defendant WAMU and spoke
2 with “Debbie,” in Loss Mitigation. “Debbie” said there was “no sale date” and “any
3 future sale date was on hold.” After speaking with Loss Mitigation, “Sandra” called the
4 Trustee and spoke with “Gabby” who confirmed that the “sale date was on hold”
5 pursuant to WAMU’s request.
6 50. On October 5, 2009, “Sandra” and employee of the Debt Relief Law
7 Center telephoned the Trustee and was told that the Borrower’s property had been sold on
8 October 1, 2009. The Trustee stated that the file had been placed on “hold” after the last
9 sale date of August 24, 2009 and offered no explanation why the property was sold on
10 October 1, 2009. The same date “Sandra” contacted defendant WAMU to find out why
11 the property had been sold for $2.1 Million on October 1, 2009 while the borrower’s loan
12 modification was still under consideration. No one new the answer and she was transfer-
13 red to various representatives who did not have an explanation as to why the property had
14 been sold. Finally, she spoke with “Tanya” who told her that she needed to be transferred
15 to the REO Department, but no one was available to speak with her because it was after
16 business hours.
17 51. On October 6, 2009, “Sandra,” and employee of the Debt Relief Law
18 Center, contacted the REO Department and spoke with “Ashlee” who stated that rather
19 than the REO Department Sandra needed to speak with a supervisor in Loss Mitigation,
20 and also stated that she sees a “redemption period” but did not know for how many days.
21 52. Also, on October 6, 2009, “Sandra” called Loss Mitigation and spoke to
22 “Trell” and explained to her all that had transpired and he said he would be sending an
23 email to the Negotiator, the Negotiator’s supervisor, as well as his supervisor. “Trell” told
24 “Sandra” to call back in two hours. “Sandra” called defendant WAMU executive offices
25 to file a formal complaint, and spoke with “Mindy” [phone number 866-605-9253].
26 “Sandra” told her the Borrower was requesting that the sale be vacated or withdrawn
27 because the Borrower was never notified of being denied a modification, nor that a sale
28 date had been reinstated. “Mindy” stated that she was going to “open a case” and assign to
Page 12 of 20
1 an “Analyst” so the account could be reviewed; she also told “Sandra” that she should
2 receive a response within 24 hours.
3 53. Also, on October 7, 2009, “Sandra” called defendant WAMU executive
4 offices and spoke with “Jennifer” and told her she had made a formal complaint the day
5 before but had not been contacted, and that the REO and Loss Mitigation Departments did
6 not have an explanation as to why the Borrower’s property had been sold while his loan
7 modification request was still being reviewed.“Jennifer” told “Sandra” that the Law
8 Center’s “complaint” had been assigned to Bridget Reynee [at ext. 3302], and that
9 “Bridget” would be contacting the Law Center within four (4) hours.
10 54. Also, on October 8, 2009, “Sandra” called “Bridget” and left a message to
11 call her back; she called back and spoke with David Commons, who told her that Bridget
12 was away from her desk and that she would call her back shortly to discuss a solution to
13 the Borrower’s complaint. An hour later, Bridget telephoned Sandra and stated that
14 Plaintiff’s modification request had been denied on September 11, 2009. Sandra
15 informed Bridget that the file had been under review by the Negotiator and that the
16 Borrower had never been notified of the denial or that there was a reinstated sale date.
17 Bridget stated she would contact the Negotiator to see if a letter had been sent to the
18 Borrower when his filed had been denied on September 11, 2009 and that she would call
19 back with that information.
20 55. On October 13, 2009, “Sandra” called defendant WAMU executive
21 offices and spoke with “Mindy” and she stated the Negotiator had not as yet responded to
22 “Bridget’s” email.
23 56. On October 15, 2009, “Sandra” received a call from “Bridget” who stated
24 that the Negotiator would have to “rescind the sale” since she had been the employee who
25 had denied the loan modification request.
26 57. On October 22, 2009, “Sandra” called defendant WAMU executive offices
27 again and spoke with “Jennifer Ellis,” who stated that “Bridget” was “out of the office”
28 for two weeks. “Sandra” told “Jennifer” that the Borrower needed answers about what
Page 13 of 20
1 had occurred. “Jennifer” stated that she was going to “escalate” the account since
2 “Bridget” was out of the office, and also stated that the Negotiator had sent a denial letter
3 due to the fact that the “property had too much equity” and that she would call “Sandra”
4 back later. “Sandra” explained that neither the Borrower nor the Law Center had received
5 the alleged “denial letter.”
6 58. On October 30, 2009, “Sandra” called defendant WAMU executive
7 offices, and spoke with “Helen” who stated that “Bridget” was out to lunch and to call
8 back later in the afternoon.
9 59. Between November 3, 2009 and November 12, 2009, “Sandra” called
10 defendant WAMU executive offices, and spoke with “Bridget” numerous times, but
11 nothing was resolved, other than telling Sandra that she would “get back” to the Law
12 Center.
13 60. Plaintiffs contend that defendant WAMU made the herein described repre-
14 sentations concerning its intentions not to foreclose on plaintiffs’ property with the know-
15 ledge that Plaintiff would reasonable rely upon those representations to his detriment.
16 61. In fact, Plaintiff had no reason to disbelieve the representation and was
17 ignorant of its falsity; he thus believed the representations to be true, relied on them, and
18 was thereby induced to, and did, not purse other options that were available to him to pre-
19 vent the loss of the “substantial equity” in his residential property; had Plaintiff known
20 the truth he would not have "stopped making his monthly payments" to defendant or he
21 would have pursued his other options.
22 62. An implied-in-fact contract is one, the existence and terms of which are
23 manifested by conduct (Civ. Code, section 1621). The essential elements of an implied-in-
24 fact contract are mutual assent and consideration. Plaintiff’ demonstrated his “assent” by
25 his conduct in “stopping making monthly mortgage payments” in order to have his request
26 for a loan modification considered by defendant WAMU; defendant WAMU ‘s “assent”
27 is demonstrated by it acceptance of Plaintiff’s “request for modification” after he had
28 stopped making monthly payments. Plaintiffs’ “consideration” was their “detrimental
Page 14 of 20
1 reliance” on the defendant’s representation that he could not be considered for a
2 modification unless he was in default in payments.
3 63. Defendant repeatedly misled Plaintiff as to whether or not the property had a
4 pending sale date, as well as misrepresentations as to when the property was sold. Plaintiff
5 reasonably but "detrimentally relied" upon the numerous misrepresentations regarding the
6 status of his loan modification request and the actual sale date.
7 64. In consideration of his implied-in-fact-contract with defendant WAMU,
8 Plaintiff decided not to pursue the numerous options available to him; had he been given
9 timely notice of the denial of his modification request and the foreclosure sale date, he
10 would have timely pursued his option to sell the property since it had over seven hundred
11 thousand ($700,000.00) dollars in equity. In fact, on or around September of 2009,
12 Plaintiff received a verbal offer to purchase the subject property, but declined to do so
13 until and unless his attempt to modify his loan was denied.
14 65. Defendant WAMU also breached the “implied covenant of good faith and
15 fair dealing,” by advising Plaintiff that it would not consider a modification unless he was
16 in default in payment, and then failing to provide plaintiff with notice that defendant had
17 denied his request for a loan modification and intended to foreclose on his property
18 without further notice that his loan modification request had been denied.
19 66. After Defendant WAMU had caused Plaintiff’s property to be sold at a non-
20 judicial foreclosure sale, Plaintiff discovered that the only reason his request for a loan
21 modification had been denied is because there was “too much equity” in the property.
22 Therefore Plaintiff is informed and believes, and on that basis, alleges that defendant
23 WAMU’s foreclosed on his property in order to secure for itself the $7000,000.00 in
24 equity remaining the Plaintiff’s property.
25 67. Therefore, as a proximate result of defendant WAMU’s breach of its
26 “implied- in-fact-contract” with Plaintiff, and “breach of the implied covenant,” Plaintiff
27 has suffered damages, including but not limited to the loss of his property and the
28 $700,000.00 in equity; such a result is contrary to well-established equitable principles.
Page 15 of 20
1 FOURTH CAUSE OF ACTION
2 (Unjust Enrichment)
3 [Against defendants All Defendant]
4 68. Plaintiffs incorporate by reference paragraphs 1-11, 13-7-11, 13-24, 27-31
5 and 35-67, as if fully set forth below.
6 69. Each of the defendants thereafter received fees and payments from the
7 transfer or assignment of the herein “predatory” mortgage loan, and the subsequent
8 wrongful, non-judicial foreclosure, sale of Plaintiff’s home, thereby unjustly receiving and
9 retaining benefits at Plaintiff’s expense.
10 70. Defendants had a statutory duty to Plaintiffs to ensure that Plaintiffs fully
11 understood all fees which would be paid to the Defendants to obtain credit on Plaintiffs’
12 behalf and to not charge any fees which were not reasonably related to the settlement of
13 the loan and without full disclosure to Plaintiff - which said defendants failed to do.
14 71. Defendants cannot, in good conscience and equity, retain the benefits from
15 their unlawful actions alleged herein.
16 72. Defendants have been unjustly enriched at the expense of the Plaintiffs,
17 and maintenance of the enrichment would be contrary to rules and principles of equity.
18 73. Defendants have also been additionally enriched through the receipt of
19 payment from third parties including but not limited to investors, insurers, other borrow-
20 ers, the United States Department of the Treasury, and the U.S. Federal Reserve.
21 74. Plaintiffs thus demands restitution from each of the Defendants in the
22 form of actual damages, exemplary damages, and attorneys' fees, in a total amount to be
23 determined at trial.
24 FIFTH CAUSE OF ACTION
25 (Wrongful Foreclosure)
26 [Against Each and Every defendant]
27 75. Plaintiffs incorporate by reference paragraphs 1-11, 13-23 and 35-67, as if
28 fully set forth below.
Page 16 of 20
1 76. Plaintiffs are informed and believe, and thereon allege that the mortgage
2 loan secured by Plaintiffs’ Deed of Trust to defendant WAMU, dated March 26, 20007,
3 was duly purchased by defendant JPMORGAN CHASE BANK, NA, on September 25,
4 2008, and thereafter on February 28, 2009, for value received, granted and transferred all
5 beneficial interest under the Deed of Trust, and Promissory Note, to defendant B of A.
6 77. On March 2, 2009, defendant QUALITY [“as agent for beneficiary”]
7 issued a Notice of Default and Election to Sell Under Deed of Trust; however, there is no
8 recorded document establishing defendant QUALITY’s authority to issue such “notice,”
9 since pursuant to California. Civil Code §1624 the “agency relationship” must be in
10 written form; thus, and any purported authority by defendant QUALITY to foreclose on
11 the mortgage is invalid, rendering the foreclosure sale void.
12 78. Therefore, on information and belief, Plaintiffs alleges that a substantial
13 defect occurred in the statutory procedures that was prejudicial to the interests of the
14 herein trustors. Moreover, only a properly conducted sale, free from internal defects,
15 creates rights in the successful bidder at the sale. Failure to comply with the applicable
16 “notice of sale” requirements may form the basis to void a sale, as well as the violation of
17 the statutory right of a trustor to postpone the sale.
18 79. Additionally, the claims of “fraud and misrepresentation,” breach of “fidu-
19 ciary duties” occurring the origination of the herein loan, and the subsequent “breach of
20 contract/contract-in-fact,” as herein-alleged, provide a factual basis for, and justify, the
21 setting aside, vacating, and/or voiding the herein wrongful foreclosure.
22 80. Plaintiffs allege that the notices and foreclosure failed to conform with the
23 provisions of California Civil Code §§1624, § 2924, and Commercial Code §3302 et seq.
24 81. Plaintiffs allege that as a proximate result of the defendants’ improper and
25 illegal conduct, Plaintiffs have incurred monetary damage in an amount greater than
26 $700,000.00, and are entitled to appropriate equitable relief, including but not limited to a
27 Temporary and Permanent Restraining Order and/or Preliminary and Permanent Injunctive
28 relief, and all in a total monetary amount to be proven at trial.
Page 17 of 20
1 82. The wrongful conduct of defendants alleged in this complaint was done
2 willfully, maliciously, outrageously, deliberately, and/or in reckless disregard of the
3 Plaintiffs’ statutory and common law rights, thus entitling Plaintiffs to recovery of
4 punitive damages in an amount to be proven at trial.
5 83. Accordingly, Plaintiffs are entitled to an order quieting title to the subject
6 real property in their behalf, and declaring that defendants have no legal right, title, or
7 beneficial interest in the subject real property, for all the reasons stated in this complaint.
8 WHEREFORE, Plaintiffs, having set forth numerous legally sufficient causes of
9 actions against the defendants, jointly and severally, pray for the entry of judgment against
10 all defendants in an amount not yet quantified but to be proven at trial and such other
11 amounts to be proven at trial, and as follows:
12 FIRST and SECOND CAUSES OF ACTION:
13 1. For rescission and restitution
14 2. For special damages according to proof
15 3. For general damages according to proof
16 4. For reasonable statutory, if any, attorney’s fees and costs
17 THIRD CAUSES OF ACTION:
18 1. For compensatory damages according to proof
20 3. For such other and further relief as the court may deem proper
21 4. For reasonable statutory and/or contractual attorney’s fees and costs
22 FOURTH CAUSE OF ACTION:
23 1. For an order finding the defendants have unjustly enriched themselves at
24 Plaintiffs’ expense, and compelling defendants to disgorge all amounts
25 wrongfully acquired by them from plaintiffs and returning the same to
26 plaintiffs with interest thereon at the statutory rate from the date the funds
27 were first received from Plaintiffs
28 2. For special damages according to proof
Page 18 of 20
2 4. For reasonable attorneys’ fees and costs
4 FIFTH CAUSE OF ACTION:
5 1. For an Order setting aside and/or vacating the herein wrongful
6 foreclosure sale and returning possession to the Plaintiffs
7 2. For General and Special Damages
8 3. For a Temporary Restraining Order on any further transfers
9 of interest in the subject property
10 4. For an Order quieting title in and to the property in plaintiffs’ favor
12 6. For reasonable contractual and/or statutory attorneys’ fees and costs
13
14 DEMAND FOR JURY TRIAL
15 Plaintiffs demand trial by jury of all matters so triable as a matter of right.
16
17 Dated: December 22, 2009 B. KWAKU DUREN & ASSOCIATES, PC
18
19 By:
B. Kwaku Duren, Attorney for Plaintiffs
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5 -------------------------------------------------------------
6 VERIFICATION
7 I know the contents of the herein Complaint for damages of my own personal
8 knowledge, after being read to me in Spanish, and as to those matters stated on informat-
9 ion and belief, I also believe them to be true and correct. I declare under the penalty of
10 perjury under the laws of the State of California that all of the foregoing factual statements
11 are true and correct. Executed this 22nd day of December, 2009, at Los Angeles,
12 California.
13 ___________________________
JEHUDA RENAN, Plaintiff
14
___________________________
15 KARNIT MOUCHLY
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Page 20 of 20

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KWAKU DUREN & ASSOCIATES, PC

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