3 Case File California Jolley v. Chase Home Finance, Et Al Appellate 1st District Appellants Opening...

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Court data last updated: 04/24/2012 12:05 PM

Case Summary Docket Briefs Scheduled ActionsDisposition Parties and Attorneys Trial Court

Case Summary

Trial Court Case: CIV1002039Court of Appeal Case: A134019Division: 2Case Caption: Scott Jolley v. JP Morgan Chase Bank N. A. et al.Case Type: CVFiling Date: 12/12/2011Oral Argument Date/Time:

Cross Referenced Cases:

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Docket (Register of Actions)Scott Jolley v. JP Morgan Chase Bank N. A. et al.Division 2Case Number A134019

Date Description Notes

12/15/2011 Notice of appeallodged/received.

by attorney Vernon L. Bradley for Scott Call Jolley (plaintiff); notice of appeal filedin the superior court on 12/12/2011

12/15/2011 Notified parties oflocal rules andprocedures.

12/15/2011 Filing fee. from attorney Vernon L. Bradley; check number 525 issued 12/12/2011

12/27/2011 Received defaultnotice 8.121(a)designation notfiled. Dated:

default notice issued by the superior court on 12/27/2011

12/30/2011 Civil caseinformationstatement filed.

by attorney Vernon Bradley for appellant (Scott Jolley).

12/30/2011 Letter to counsel- 15 days to filecase informationstatement.

A copy of the judgment or order is needed.

01/05/2012 Receiveddocumententitled:

appellant's notice designating record on appeal; notice filed in the superior courton 12/29/2011; designation of clerk and reporter transcripts

01/06/2012 Notice to reporterto preparetranscript.

sent to CSR Deborah Bartunek dated 12/29/11. Txs due 1/30/12.

01/12/2012 Certificate ofcounty clerk filed.

Items listed in Appellant's designation filed 12-29-11 not found in trial court's file

01/20/2012 Petition for writ ofsupersedeasfiled.

Stay Requested






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01/20/2012 Filed documententitled:

"Request for Temporary Stay"

01/20/2012 Received: Proposed orders for granting temporary stay and/or writ of supersedeas.

01/20/2012 Received: copy of judgment of 12-1-11

01/23/2012 Rec'd co. noticeto appellant re:estimate.

notice issued by the superior court on 01/20/2012

01/23/2012 Order filed. Appellant has filed a petition for writ of supersedeas, seeking a stay of thejudgment against him pending appeal. Pending determination of this petition or uponfurther order of this court, the judgment in Marin County Superior Court case No.CIV 1002039 allowing in the foreclosure sale of the property described as 130Geldert Drive, Tiburon, California is temporarily stayed. Additionally, respondents areto serve and file points and authorities in opposition to the petition within 14 daysfrom the date of this order. The opposition should address all the issues raised inthe petition, as well as whether petitioner sought a stay below prior to filing thepetition here and, if not, whether he was obligated to do so. Petitioner may file areply within 14 days of service of the opposition.

02/01/2012 Received faxinformationalcopy of:

Letter from Patricia M. Kelly, re: requests that briefing be extended 2 weeks foreach party (to court).

02/01/2012 Received defaultnotice 8.122(c)clerk's fees notdeposited. Dated:

default notice issued by the superior court on 01/31/2012

02/02/2012 Filed letter from: atty Kelly re joint request for alteration of briefing as set forth in court's 1/23/12order (original of fax)(granted as requested, to 2/21/12 for opposition and 3/20/12 for reply)

02/03/2012 Granted -extension of time.

02/06/2012 Notice of recordcompletionreceived.

02/06/2012 Record on appealfiled.

c-1-r-1

02/21/2012 Opposition filed. Respondents' Brief in Opposition to Petition for Writ of Supersedeas and Stay

02/21/2012 Respondent'sappendix filed.

Respondents' Appendix in Opposition to Petition for Writ of Supersedeas andStay (2 Volumes)

03/15/2012 Requested -extension of time.

Reply filed to:. Requested for 03/28/2012 By 8 Day(s) (stipulated)

03/15/2012 Requested -extension of time.

Appellant's opening brief. Requested for 03/28/2012 By 9 Day(s) (stipulated) AOB & reply to writ of supersedeas to 3-28-12

03/19/2012 Granted -extension of time.

Reply filed to:. Due on 03/28/2012 By 8 Day(s)

Administrator

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03/28/2012 Reply filed to:

03/29/2012 Appellant'sopening brief.

Plaintiff and Appellant: Jolley, Scott CallAttorney: Vernon Lester Bradley

04/09/2012 Motion/applicationto augmentrecord filed.

Respondents (augmentation attached)

04/18/2012 Order denyingpetition filed.

The petition for writ of supersedeas is denied and the stay previously imposed ishereby dissolved.











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BriefsScott Jolley v. JP Morgan Chase Bank N. A. et al.Division 2Case Number A134019

Brief Due Date Date Filed Party andAttorney Notes

Appellant's opening brief. 03/29/2012 Plaintiff and Appellant: Jolley, Scott CallAttorney: Vernon Lester Bradley

Respondent's brief. 04/30/2012 Defendant and Respondent: JP Morgan Chase Bank N. A.Attorney: Harvey Sohnen

















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Future Scheduled ActionsScott Jolley v. JP Morgan Chase Bank N. A. et al.Division 2Case Number A134019Description Due Date Notes

Respondent's brief. 04/30/2012

To court. 04/24/2012 Respondents' Application To Augment Record (augmentation attached)

















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DispositionScott Jolley v. JP Morgan Chase Bank N. A. et al.Division 2Case Number A134019Description: Petition summarily denied by order

Date: 04/18/2012

Status: PartialThe petition for writ of supersedeas is denied and the stay previously imposed is herebydissolved.

Publication Status:

Author:

Participants:

Case Citation: none

















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Parties and AttorneysScott Jolley v. JP Morgan Chase Bank N. A. et al.Division 2Case Number A134019

Party Attorney

Jolley, Scott Call : Plaintiff and Appellant Vernon Lester BradleyWaldo Point HarborLiberty Dock - Berth D54Sausalito, CA 94695

JP Morgan Chase Bank N. A. : Defendant andRespondent

Harvey SohnenLaw Offices of Sohnen & Kelly2 Theatre Square - Suite 230Orinda, CA 94563

California Reconveyance Company : Defendant andRespondent

















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Trial CourtScott Jolley v. JP Morgan Chase Bank N. A. et al.Division 2Case Number A134019Trial Court Name: Marin County Superior CourtCounty: MarinTrial Court Case Number: CIV1002039Trial Court Judge: Duryee, LynnTrial Court Judgment Date:12/01/2011

















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CA-A134019-AO.tif

CA-A 1340 19-AO Code 128

Docket #A134019

Brief Type: Appellant's Opening

Box #: 1489

Entered 4/16/2012 12:23:06 PM by rquinesares

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT, DIVISION TWO

SCOTT CALL JOLLEY, Appellate Docket No. A134019

vs.

Plaintiff and Petitionerl Appellant, Marin County Superior Court Case No. CIVI002039

CHASE HOME FINANCE, LLC, a Delaware Limited Liability Corporation and successor in interest to WASHINGTON MUTUAL BANK, EA., a Washington Corporation; CALIFORNIA RECONVEYANCE COMPANY, a California corporation, and DOES 1 through 100, inclusive,

Defendants and Respondents.

APPEAL FROM THE JUDGMENT OF THE SUPERIOR COURT

OF THE STATE OF CALIFORNIA, COUNTY OF MARIN

Hon. Lynn Duryee, Judge Phone: (415) 444-7221

APPELLANT'S OPENING BRIEF

STAY REQUESTED UNDER WRIT OF SUPERSEDEAS Restrained Acts: Trustee's Sale & All Trial Court Proceedings

Vernon Bradley, Esq. (SBN 49294) LAW OFFICES OF VERNON BRADLEY 54 Liberty Dock Sausalito, CA 94965 Telephone: 415-331-4441 Facsimile: 415-331-4443 Attorney for Appellant/Plaintiff, Scott C. Jolley

o

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT, DIVISION TWO

SCOTT CALL JOLLEY, Appellate Docket No. A134019

vs.

Plaintiff and Petitioner/Appellant, Marin County Superior Court Case No. CIVI002039

CHASE HOME FINANCE, LLC, a Delaware Limited Liability Corporation and successor in interest to WASHINGTON MUTUAL BANK, F.A., a Washington Corporation; CALIFORNIA RECONVEYANCE COMPANY, a California corporation, and DOES 1 through 100, inclusive,

Defendants and Respondents.

APPEAL FROM THE JUDGMENT OF THE SUPERIOR COURT

OF THE STATE OF CALIFORNIA, COUNTY OF MARIN

Hon. Lynn Duryee, Judge Phone: (415) 444-7221


STAY REQUESTED UNDER WRIT OF SUPERSEDEAS Restrained Acts: Trustee's Sale & All Trial Court Proceedings

Vernon Bradley, Esq. (SBN 49294) LAW OFFICES OF VERNON BRADLEY 54 Liberty Dock Sausalito, CA 94965 Telephone: 415-331-4441 Facsimile: 415-331-4443 Attorney for Appellant/Plaintiff, Scott C. Jolley

o

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TO BE FILED IN THE COURT OF APPEAL APP-008

COURT OF APPEAL, FIRST APPELLATE DISTRICT, DIVISION TWO Court of Appeal Case Number:

A134019 ATTORNEY OR PARTY WITHOUT ATTORNEY (Name, State Bar number, and address): Superior Court Case Number. Vernon Bradley, Esq. (SBN 49294)

CIVI002039 - 54 Liberty Dock Sausalito, CA 94965 FOR COURT USE ONL Y

TELEPHONE NO .. (415)331-4441 FAX NO. (Optional) : (415)331-4443 E-MAIL ADDRESS (Optional):

ATTORNEY FOR (Name) : Scott C. Jolley, Petitioner

APPELLANT/PETITIONER: SCOTT C. JOLLEY

RESPONDENT/REAL PARTY IN INTEREST: CHASE HOME FINANCE, LLC, et al.

CERTIFICATE OF INTERESTED ENTITIES OR PERSONS

(Check one): [ZJ INITIAL CERTIFICATE D SUPPLEMENTAL CERTIFICATE

Notice: Please read rules 8.208 and 8.488 before completing this form. You may use this form for the initial certificate in an appeal when you file your brief or a prebriefing motion, application, or opposition to such a motion or application in the Court of Appeal, and when you file a petition for an extraordinary writ. You may also use this form as a supplemental certificate when you learn of changed or additional information that must be disclosed.

1. This form is being submitted on behalf of the following party (name):_S_c_o_tt_C_._J_o_l_le-,y,-",-P_e_ti_tl_· o_n_e_r ___________ _

2, a. D There are no interested entities or persons that must be listed in this certificate under rule 8.208,

b. D Interested entities or persons required to be listed under rule 8.208 are as follows:

Full name of interested entity or person

(1) Chase Home Finance,- LLC

(2) Washington Mutual Bank, F.A.

(3) California Reconveyance Company

(4)

(5)

D Continued on attachment 2.

Nature of interest (Explain):

Financial interest ofPartylRespondent



The undersigned certifies that the above-listed persons or entities (corporations, partnerships, firms, or any other association, but not including government entities or their agencies) have either (1) an ownership interest of 10 percent or more in the party if it is an entity; or (2) a financial or other interest in the outcome of the proceeding that the justices should consider in determining whether to disqualify themselves, as defined in rule 8.208(e)(2).

Date: March 29, 2012

Vernon Bradley, Esq. ,"- --7"'--~-..::'""""==-----------.-:::=r:---

(TYPE OR PRINT NAME)

Page 1 of 1

Form Approved for Optional Use Judicial Gaunal of Calffomia

APP-008IRev. January 1, 2009)

CERTIFICATE OF INTERESTED ENTITIES OR PERSONS Car. Rules of Court, rules 8.208. 8.488 www.coUflinfo.ca.gov

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TABLE OF CONTENTS

Section Page(s)

L STATEMENT OF APPEALABILITY. . . . . . . . . . . . . . . . . . . . . . 1

II. ISSUES PRESENTED ... . ............. .. ................ .

III. PROCEDURAL HISTORY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

IV. INTRODUCTION. . . ....... . .... . ..... . .. . ... . ...... ... . 3

V. STATEMENT OF FACTS. ............................. 8

VI. STANDARD OF REVIEW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

VII. GOVERNING LEGAL PRINCIPLES . . . . . . . . . . . . . . . . . . . 16

VIII. ARGUMENT........... . ... . ....... . ................ 19

A. Summary Judgment Should Have Been Denied Because (1) Chase Was Liable for All of Its Own Torts and Breaches of Contract and (2) the Purchase and Assumption Agreement ("PAA") Cannot Insulate Chase From Successor Liability for WaMu's Conduct

Due to (A) Express Contract Terms Binding All of WaMu's "'Successors and Assigns," (B) the FDIC's Decision Not to Exercise Its Rescission Power, and (C) Chase's Own Failure to Provide Notice that it Was Not "Stepping into the Shoes" of WaMu. . . . . . . . . . . . . . . . . . 19

B. Summary Judgment Should Have Been Denied Because WaMu and Chase Owed a Duty of Care to Reasonably Handle the Construction Loan and Actively Participated in Tortious Misconduct Going Far "Beyond the Domain of a Usual Money Lender," Which Exposed Them to Liability under the "Casey Rule" and Other Decisional Law. .. ................. 29

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C. Summary Judgment Should Have Been Denied Because Triable Issues of Material Fact Fully Support Appellant's First and Second Causes of Action for Intentional and Negligent Misrepresentation ..........

D. Summary Judgment Should Have Been Denied Because Triable Issues of Material Fact Fully Support Appellant's Third Cause of Action for Breach of Contract / Promissory Estoppel. ....................

E. Summary Judgment Should Have Been Denied Because Triable Issues of Material Fact Fully Support Appellant's Seventh Cause of Action for an Accounting ........................................

F. Summary Judgment Should Have Been Denied Because Triable Issues of Material Fact Fully Support Appellant's Eighth Cause of Action for Reformation ..

G. Summary Judgment Should Have Been Denied Because Triable Issues of Material Fact Fully Support Appellant's Fifth Cause of Action for VCL Violations of Business and Professions Code § 17200, et seq., by WaMu and Chase. ; . . ...............................

H. Summary Judgment Should Have Been Denied Because Triable Issues of Material Fact Fully Support Appellant's Sixth Cause of Action for Declaratory

31

34

37

38

39

Relief. . . . . . . . . . . . . . . .. . . . . .. . . . . . . . . . . . . . . . . . . . .. .. 41

IX. CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

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TABLE OF AUTHORITIES

Federal Statutes Page(s)

12 USC 1821(d)(3)(B)-(C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 19-28

12 U.S.C. § 1821(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20-22

California Statutes

Business and Professions Code § 17200 ..................... . 39-40

Civ. C. §1689. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 35

Code of Civil Procedure §437c. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,2,7,17,18, 28,29

Federal Cases

Sharpe v. FD.l c., 126 F.3d 1147 (9th Cir. 1997). . . . . . . . . . . . . .. 21 ,22

California Cases

Aguilar v. Atlantic Richfield Co. (2001) 25 Ca1.4th 826 ......... . 1,16-18,29

Allied Grape Growers v. Bronco Wine Co. (1988) 203 Cal.App.3d 432,451. . . . . . . . . . . . . . . . . . . . . . . . . . .. 41

Ansanelli v. JPMorgan Chase, 2011 WL 1134451, Case No. CVI0-03892. . . . . . . . . . . . . .. 19

April Enters., Inc. v. KTTV(1983) 147 Cal. App.3d 805,816. . . . .. 2,35

B.L.M v. Saba & Deitsch (1997) 55 Cal. App. 4Th 823,834. . . . .. 33

Binder v. Aetna Life Ins. Co. (1999) 75 Cal.App.4th 832, 838 ..... 19

Blatt v. University olS. Cal. (1970) 5 Cal. App. 3d 935,944 ..... . 36

111

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C & K Eng'g Contractors v. Amber Steel Co. (1978) 23 Cal. 3d 1.. 36

Casey v. us. Bank Nat. Assn. (2005) 127 Cal.App.4th 1138 .... " 29-31

Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone (1999),20 Ca1.4th 163 ............................ " 39

Chazen v. Centennial Bank (1998) 61 Cal.App.4th 532,537 ..... . 30

Citizens Suburban Co. v. Rosemont Development Co. (1966) 244 Cal.App.2d 666, 675-676 .................. . 20,23,24,3 ]

Commercial Standard Ins. Co. v. Bank of America (1976) 57 Cal.App.3d 241. ......................... . 29-30

Committee on Children s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d. 197,209 .......................... . 40

Conrad v. Bank of America, (1996) 45 Cal.App.4th 133. . . . . . . . .. 32-33

Drennan v. Star Paving Co. (1958) 51 Cal. 2d 409 ............ " 36

Gafcon, Inc. v. Ponsor & Associates ,(2002) 98 Cal.App.4th 1388. 41

Graddon v. Knight (1956) 13 8 Cal. App. 2d 577 ............... . 36

Green v. Ralee Engineering Co. (1998) 19 Ca1.4th 66, 72 ....... . 18

Hamburg v. Wal-Mart Stores, Inc. (2004) 116 Cal.App.4th 497 .... 16

Henck v. Lake Hemet Water Co. (1937) 9 Ca1.2d 136, 143-44 ..... 35

Johnson v. City of Loma Linda (2000) 24 Ca1.4th 61, 67-68. . . . . .. 16

Laks v. Coast Fed. Sav. & Loan Assn. (1976) 60 Cal.App.3d 885. . 36

Lange v. TIG Ins. Co. (1998) 68 Cal. App. 4th 1179, 1185 ...... " 36

Lovejoy v. AT&T Corp., 92 Cal. App. 4th 85. . . . . . . . . . . . . . . . . .. 32

Nymark v. Heart Fed. Savings & Loan Assn. (1991) 231 Cal.App.3d 1089 ........................ .

31

IV

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Parker v. Twentieth Century-Fox Film Corp. (1970) 3 Ca1.3d 176.. 18

Podolsky v. First Healthcare Corp. (1996) 50 Cal.App.4th 632. . .. 40

Quigley v. Pet, Inc. 162 Cal. App.3d 877, 887-888 ............. . 35

Ray v. Alad Corp. (1977) 19 Cal.3d 22 ...................... . 24-26

Reeves v. Safeway Stores, Inc. (2004) 121 Cal.App.4th 95, 107 .... 17

Rubenstein v. Rubenstein (2000) 81 Cal.App.4th 1131 .......... . 17

Smith v. Brown (1943) 59 Cal. App. 2d 836, 838 .............. . 33

Smith v. Mallick, 514 F.3d 48 (D.C. Cir. 2008) ............... . 23

Sutherland v. Barclays American/Mortgage Corp. (1997) 53 Cal. App. 4th 299,314 ..................... . 35

Swat-Fame, Inc. v. Goldstein, (2002) 101 Cal.App.4th 613 ..... . 18

Taliaferro v. Davis (1963) 216 Cal.App. 2d 398 ............... . 35

Toigo v. Town of Ross (1998) 70 Cal.App.4th 309,324 ......... . 16

Tsemetzin v. Coast Federal Savings & Loan Assn. (1997) 57 Cal.App.4th 1334, 1341 fn 6 ................ . 16

Universal By-Products, Inc. v. City of Modesto (1974) 43 Cal. App. 3d 145 ........................ " 33

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Van Hook v. Southern Cal. Waiters Alliance (1958) 158 Cal.App.2d 556. . . . . . . . . . . . . . . . . . . . . . . . . . 36

Weber v. John Crane, Inc. (2006) 143 Cal.App.4th 1433. . . . . . . . . 18

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I. STATEMENT OF APPEALABILITY

A summary judgment order disposing of a lmvsuit is appealable.

Code of Civil Procedure C"CCP") 437c(m); Aguilar v. Atlantic Richfield Co.

(2001) 25 Ca1.4th 826.

II. ISSUES PRESENTED

1. Whether this Court should reverse summary judgment

granted by the Honorable Lynn Duryee of the Marin County Superior Court

(Case No. CIY 1002039) because numerous disputed material facts exist to

support all causes of action, which should properly be decided by a jury of

Petitioner's peers?

2. Whether summary judgment should have been denied

because Chase was liable for all of its own torts and breaches of contract

notwithstanding the FDIC Purchase and Assumption Agreement?

3. Whether summary judgment should have been denied

because the Purchase And Assumption Agreement ("PAA") cannot insulate

chase from successor liability for WaMu's conduct due to the fact that (1)

Chase willingly accepted all associated benefits under the parties'

construction contract through its acquisition of all of WaMu's assets, (2) the

contract terms expressly bind all of WaMu's "successors and assigns." (3)

the FDIC decided not to exercise its rescission power, thereby subjecting it

to normal state contract law (4) Chase's itself failed to provide notice that it

"vas not "stepping into the shoes" ofWaMu and (5) Civil Code §1589

equitably mandates that Chase's "voluntary acceptance of the benefit of

[theWaMu] transaction is equivalent to a consent to all the obligations

1

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arising from it, so far as the facts are known, or ought to be known, to the

person accepting" such bendits?

4. Whether competent and credible expert testimony of Jeffi~ey

Thorne and tacit admissions by FDIC representatives confirming the

existence of a second operative FDIC Purchase and Assumption Agreement

that fully maintains Chase's liability for all of WaMu's t011s and contractual

breaches created triable issues of material fact that could only properly be

decided by a jury of Petitioner's peers?

5. Whether the trial court erred in denying Petitioner's request

for a continuance of the summary judgment hearing and leave to conduct

additional discovery regarding the FDIC's aforesaid secret Purchase and

Assumption Agreement in violation ofCCP §437c(h) because there was

competent evidence that ChasefFDIC "'stonewalled" discovery and that the

agreement actually exists?

6. Whether the trial com1 erred in taking judicial notice of the

internet version of the FDIC Purchase and Assumption Agreement ("PAA")

for the improper purpose of establishing the truth of contested t11ctual

matters recited therein despite competent evidence that those facts directly

contradicted contractual tenns in the complete version of the PAA secretly

maintained by the FDIC and available only upon execution of a stipulated

confidentiality agreement and protective order? . ....

Ill. PROCEDURAL HISTORY

On April 19, 2010, Petitioner Jolley's Complaint was filed. On April

20, 2010, Petitioner obtained a temporary restraining order prohibiting the

2

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Administrator

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scheduled trustee's sale and thereafter obtained a Preliminary Injunction

continuing that relief upon posting a $50,000 bond with the Marin County

Superior Court. Petitioner opposed a summary judgment motion brought

by Chase and California Reconveyance. The Honorable Judge Duryee took

the matter under submission after the hearing, on November 15,2011, and

grant summary judgment in favor of Defendants/Respondents on December

I, 20 11. Judgment was entered the same day thereby immediately

dissolving the preliminary injunction of August 20, 2011. On January 25,

2012, Petitioner filed this appeal along 'with a writ of supersedeas

requesting an immediate stay to protect his real property against an

impending foreclosure and trustee sale. Since the trial court seemed

unreceptive to Petitioner's need for a continued stay during the summary

judgment hearing, Petitioner did not formally seek a stay from the trial

court because such efforts were clearly futile and the law does not require a

litigcmt to engage in such useless endeavors (please see the accompanying

writ reply). Petitioner now files this opening brief along with a reply in

support of the writ of supersedeas and stay.

IV. INTRODUCTION

Summary judgment was an abuse of discretion by the Honorable

Judge Duryee because hotly contested material facts fully support

Appellant's contentions regarding several important matters.

Petitioner Jolley and Washington Mutual Bank ("WaMu") entered

into a construction loan agreement ("contract"), which expressly provided

that "[t]he covenants and agreements of this Security Instrument shall

bind ... the successors and assigns of Lender [WaMu]." (See Paragraph 13

of Exhibit A attached hereto and incorporated by reference herein.)

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Surprisingly, Respondents now erroneously claim that Chase bears

no successor liability for WaMu's torts and contractual breaches arising

from that agreement even though Chase continues to enjoy all of the

associated benefits.

Respondents mistakenly believe Chase is insulated from successor

liability because WaMu subsequently went into FDIC receivership and

Chase allegedly took all ofWaMu's assets from the FDIC under a Purchase

and Assumption Agreement ("PAA") that supposedly allowed Chase to

reap all of WaMu's benefits without bearing any of its burdens.

However, under California and federal authority discussed below,

Chase is legally required to step directly into the "shoes" ofWaMu, to "take

the place" of WaMu, and to remain fully liable for all torts, breaches of

contract and other "sins" committed by WaMu for several reasons.

First, because the parties' contract expressly provided that "[t]he

covenants and agreements of this Security Instrument shall bind ... the

successors and assigns of Lender [WaMu]" and the FDIC was statutorily

required to step directly into WaMu's shoes, all of the FDIC's "successors

and assigns" were also obligated to take WaMu's assets subject to its

burdens since the FDIC failed to exercise its special rescission powers and

never issued any rescission notice to Petitioner as required by law (see

below). As explained in the declaration of Petitioner's expert, Jeffrey

Thorne, the FDIC had opened an escrow and were supposed to send out

notices of repudiation/rescission to Petitioner and other borrowers within

90 days or another "reasonable time," but the escrow closed so quickly that

the notices were never sent by the FDIC. Therefore, as discussed below, the

FDIC always remained subject to the terms and conditions of Petitioner's

loan contract, including the requirement that Chase, as the "successor and

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assign" of the FDIC/WaMu must be bound by the contract and '"take the

place of' the FDIC/WaMu to bear all associated burdens.

Second, according the compelling deposition testimony and

declaration of Mr. Thome, the actual, full and complete P AA (118 pages)

makes Chase liable for all torts and contractual breaches by WaMu in stark

contrast to the identically named public document (34 pages) posted on the

internet.

The record is full of competent and convincing evidence to supp0l1

this facL including, without limitation, the deposition testimony of Mr.

Thome (""Thome Depo," CT 69-88, Pgs. 37, 70-73 ) as well as his sworn

declaration (,Thome Dec," CT 53-59).

This evidence cannot be lightly dismissed since JetTrey Thorne is a

highly credible expert \vitness who swears under penalty of pet:iury that he

actually read the real PAA and it does not absolve Chase of liability for

WaMu. More specifically, Mr. Thome's declaration reads, in pertinent part,

as follows:

1. Currently I am employed as an asset manager for the FDIC through a contractor for the FDIC, RSM McGladrey Inc. 1 am intimately familiar with the procedures for taking over a failed bank and the required notices that must be given to insulate the buying bank from liability for the original loans of the failed banks.

2. When Washington Mutual failed, I was involved in the takeover of Washington Mutual by FDIC and the escrmv that was opened to sell Washington Mutual to Chase Bank. I was uniquely positioned to be involved in what was known as "Bank No. 26 takeover" as I had previously worked for Washington Mutual, heading their Construction Lending Department for 38 states.

* * *

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4. Within the takeover procedures by the FDIC, the FDIC will enter into an agreement with the succeeding bank. In this instance the FDIC entered into an agreement with Chase Bank. But because of the nature of the transaction, the FDIC guaranteed 80% of the loans, while Chase only assumed 20% of the potential losses on the loans. Pursuant to the public part of the agreement with the FDIC, of which were approximately 39 pages, the balance of the contract and the complete agreement with the FDIC and Chase bank is 118 pages long which has not been made public. I am familiar \\lith this agreement, I have read it, I was involved in the takeover of WAMU with the FDIC, and the balance of the agreement imposes liability on Chase for ongoing contracts with WAMU. Chase took liability for the ongoing contracts in return for getting an 80% discount on the loan's principal owed. Essentially, Chase Bank traded their right to cut off all liability on WAMU's end for money and a good deal. 5. Chase assumed the rights and benefits owing to WAMU under its outstanding contracts with its customers. Because of the favorable guarantee from the FDIC, they also agreed to assume the liabilities flowing from theWAMU contracts.

6. From 2002 to 2006, I was senior loan consultant [orWAMU.

Mr. Thome's testimony is further bolstered by the FDIC's tacit

admission that the document exists, i.e. , when Petitioner's counsel sought

the "smoking gun" document by subpoena, the FDIC's agent told

Petitioner's counsel that the document could only be obtained after all

parties and the trial judge executed a comprehensive stipulated

confidentiality agreement and protective order barring dissemination

outside of this case. That response indicates something is being hidden.

More specifically, on or about November 7,2011, a request of the

full and complete PAA from responding party was made orally, responding

party denied the existence of such document. On November 8, 2011, a

request for the same document was requested from the FDIC. 'IheFDIC

refused to provide the document but alluded to its existence by requesting

Petitioner provide for the specific portions in which he was seeking., and

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further advising that the FDIC would redact portions of this agreement. On

or about November 8, 2011. a request by subpoena was made to the FDIC.

and again the FDIC refused the request and asked Petitioner's Attorney to

submit to a protective order with a stipulation from all parties. See emails

C.T. 142 - 143. On November 9,2011 , Petitioner requested, in writing, the

full 118 page contract from Responding party and asked Respondent's

counsel to sign the FDIC's stipulation. These requests ,vere immediately

denied. Petitioner's Attorney was then forced to seek ex parte relief from

Judge Duryee of the Marin County Superior Court to have all parties

execute the stipulated protective order so that the true PAA could be

obtained and to continue the jury trial until Petitioner had a fair chance to

seek that dispositive evidence. Judge Duryee ignored these requests.

Perhaps because of Mr. Thorne's unique qualifications and personal

knowledge of the crucial facts, this is the very first case to bring this

evidence to light. Previously, Chase mislead courts across the country with

the abridged version of the PAA, so case law developed in reliance thereon

cannot be deemed valid. It was also reversible etTOr for Judge Duryee to

accept the truth of matters asserted in the contested document, i.e., that

Chase was absolved of liability. At the very least, Petitioner should be

allowed a fair opportunity to finally overcome discovery stone,valling and

obtain a copy of the document pursuant to CCP §437c(h), 'which reads: '"If

it appears from the af11davits submitted in opposition to a motion for

summary judgment or summary adjudication or both that facts essential to

justify opposition may exist but cannot, for reasons stated, then be

presented, the court shall deny the motion, or order a continuance to pennit

aHidavits to be obtained or discovery to be had or may make any other ~ . ~

order as may be just" (emphasis added). Accordingly, it was reversible error

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to simply ignore Petitioner's request. Alternatively, Petitioner should have

been allmved to have a jury of his peers evaluate the credibility of Mr.

Thorne and Chase's experts on this crucial factual issue.

It must also be emphasized that Respondents are attempting to

prejudice the court with false allegations that Jolley is collecting rent while

failing to pay his mortgage and the introduction of collateral issues such as

attorney's fees that would not be owed but for the improper summary

judgment. These issues arc irrelevant and appear to have been inserted

solely to create a false impression of the true inequities of this case, i.e., that

Mr. Jolley has been, and continues to be, victimized by the banks.

To summarize, based on the foregoing and the legal analysis set

forth below, summary judgment was dearly inappropriate since triable

issues of material fact remain to fully support each and every cause of

action.

V. STATEMENT OF FACTS

(To conserve space, facts set forth in Sections III and IV, above. are

fully incorporated by reference and will not be repeated in this section.)

The record contains numerous disputed material facts to support all

of Petitioner's causes of action. Mr. Thorne's deposition and declaration

clearly explain that the initial loan from WaMu was fraudulently or

negligently drawn and prepared.WaMu used improper accounting methods

and erroneously concluded that Petitioner had received $457,324.28 when.

in Hlct he actually received far less. This caused the construction project to

fail and Respondent sutTered catastrophic losses as a result.

Wamu failed to properly originate the loan, miscalculated the

amount of money required for the construction project, and improperly

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funded the construction loan. WaMu's improper claims for loan fees,

hold backs, and the like. effectively reduced the bargained for loan of

$1.294,000.69 to an unworkable loan of only $542,600, which made

construction impossible since Petitioner was improperly denied access to

crucial funds mistakenly held as an exorbitant "interest reserve" of $85,701

and contingency reserve of $1 00,029.49, equaling a grand total of only

$728.330.41 , rather than the futl amount bargained for vvhich would have

been available had the loan been properly handled by WaMu. (Thorne

Depo, CT 69-88, Pages 37 - 38)

Because of these tlawed accounting and holdback requirements,

Petitioner was forced to ask WaMu to modity the loan. Wamu advised

Petitioner that adequate funding for the project would be granted ifhe

modified the structure from approximately 2500 sq. feet to approximately

5000 sq. ft. Petitioner modified the project as requested, but WaMu refused

to honor the deal. Further, appraisals revealed that WaMu had harmed

Petitioner again because !vir. Thome realized and immediately advised

WaMu that the new loan amOlmt, even as modified, was not enough to

build out the approved structure and that the loan \vould need an additional

$400,000 to complete the 5000 square feet structure. (Thorne Depo, CT

69-88. Pgs. 13-1.7 and 37-38) Wamu refused to provide the additional

$400,000. (Jolley Dec. , CT 37-52, '2, 10, 13;TIlome Depo, CT 69-88, Pgs.

37 -38)

Further, in order to have the construction loan roll-over into a

permanently financed home loan, the project would first have had to be

completed. Since Chase has taken over the loan, Chase has still refused to

institute permanent financing, so the property can be sold or debt serviced

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until the economy changes, even though the pr~ject has been completed and

the underlying agreement requires such action upon completion.

WaMu's refusal to provide additional funds caused Petitioner to seek

new and additional funds from outside sources and that desperate

borrowing, compounded by the difficulties paying on the underfunded

WaMu loan, quickly trashed Petitioner's nearly perfect credit rating and

caused him to suffer mechanics liens and other liens arising from WaMu's

detective funding. To make matters worse, the building department of

Tiburon forced Petitioner to pay an additional $30,000 to extend the

building permit, and the failure ofWaMu and Chase to fund a known

necessary amount to finish the project caused a total collapse of Jolley's

credit, a notice of default and foreclosure efforts by Chase and the necessity

of this lawsuit.

Chase, after taking over the WaMu loan, had a continuing

responsibility to provide necessary funding to see that the project was

finished, and, more than that. to roll-over the construction loan into

penH(LHt:lIt financing. The very nature of the construction loan rcquircd

Chase to carry out the terms of the loan and provide permanent financing

for the construction loan.

WaMu and Chase's actions have severely damage Plaintiff's

finances and his ability to borrow from alternative sources and has

subjected him to a multitude of lawsuits and liens that have been filed and

recorded for material men and contractors needed to finish the project.

JetTery Thorne was "head of constnlction lending for 38 states,"

personally dealt with Petitioner's construction loan when it was in WaMu's

hands, and personally notified the upper ranks of Chase about the tortious

and/or negligent mjscalculation of funds owed to Petitioner after Chase

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took over the loan using the very same people from WaMu. He also notified

Chase of the detriment Petitioner would face if he was underfunded.

However, \vithout regard to Thorne's warnings, Chase continued its

misconduct with Petitioner and caused him severe damages, including the

nightmarish prospect oflosing the home he built, the trashing of his credit

and financial min from a cascade of liens and lawsuits.

The deposition and declaration of Jeffrey Thome and the declaration

of Petitioner Scott Jolley provide greater detail regarding WaMuiChase's

torts and breaches of contract in connection with the construction contract.

(True and COlTect copies of said evidence is attached to the record as CT 69-

88, CT53-59 and CT 37-52, respectively, and is incorporated by reference

as though fully set forth verbatim herein.)

The following highlights regarding those torts and breaches of

contract are also useful. However, please note that the misconduct often

overlaps, e.g. , negligent servicing of a construction loan automatically

constitutes breaches of contract and the implied covenant of good faith and

fair dealing, etc., so arbitrary labels should not limit application of these

facts to all causes of action.

Negligence: Petitioner was approved for the construction loan by

Washington Muhml (WaMu). Immediately, after approval, WaMu lost the

loan documents and failed to fund the loan for eight (8) months. (Jolley

Dec., CT 37-52, ,-r 4)

After receiving approval for the constmction loan, Jolley took out a

building permit \"lith the city of'fiburoll. This building permit allotted

Jolley eighteen (18) months to finish building his project. (Jolley Dec., CT

37-52, , j4)

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During the eight months, Jolley spent at least $100,000 on drilling

thirty or more piers for the foundation of the project. Jolley paid RWR

Construction to drill these piers. (Jolley Dec., CT 37-52, ~14)

Due to the lost loan documents, Jolley lost approximately eight (8)

months of building time and was forced to extend his building permit for at

least an additional $7,000. (Thome Dec," CT 53-59, ,-[16)

The in-house lmm agents \\'ho worked with Jolley miscalculated

Jolley's loan amounts by calculating the loan as a ground-up construction

project instead of Jolley's remodeling of a pre-existing structure. (Jolley

Dec., cr 37-52, ,-[5)

Misrepresentation: Further, the paperwork prepared for the

construction withdrawal showed that Jolley had already been paid

$457324.28, which did not occur. (Jolley Dec., CT 37-52, '(5)

Also, the same paperwork required Jolley to get $457324.28 worth

of work done on the project. Therefore, from the beginning Jolley was

forced out of$457,324.28 and in additional was misled by WaMu that he

would get the $328,308.79 back for his payment over and above the

$330.000 down payment. (Jolley Dec., CT 37-52, ~5)

On May 8, 2006, Jolley wrote a letter to the general counsel at

Wamu, Jed Sonstrom, outlining in great detail the problems with the loan.

On or about August 2006, Jolley hired JetTery Thorne to interface \vith

Wamu to straighten out the problems with his loan. (Jolley Dec., CT 37-52,

' (6)

Hend Bunni and her assistant at WaMu were the persons that worked

on Jolley's loan. Jolley was misled to believe that both these persons were

competent and experienced in handling construction loans. (Jolley Dec., CT

37-52, '16)

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IIcnd Bunni gave JolIey a fake accounting of his proceeds for

construction withdrawals. Onder this fake accounting, Wamn arbitrarily set

up categories of work and monies allocated to each as if they had already

been paid as the work progressed, when no monies had been paid out.

(Jolley Dec., CT 37-52, '6)

Breach of Contract/Misrepresentation: Jolley was informed that in

order to complete his project and get funding from Wamu, Jolley would

have to build out his project and modify the existing 2500 square foot

prqject into a 5000 square foot prqject. (Jolley Dec., C1' 37-52, ~ 7)

Wamu agreed to fund the loan to Jolley based on the new 5000

square foot project. However, Jeffery Thome disagreed with the amount it

would take to complete fund the project and told WaMu that an additional

$400,000 would be needed to complete the 5000 square foot project. (Jolley

Dec., CT 37-52, ';7)

FraudlNegligence/Other Misconduct Re the FDIC Receivership:

Jolley 's loan negotiations occurred in the same time period that Wamu was

going into receivership. During the loan negotiations. Jolley was working

\"ith Mabette Del Rosario and was informed that counsel for Wamu was

unsure whether they ,,,,ould continue working with Wamu after the takeover.

(Jolley Dec .. CT 37-52, , [7 -9)

After the FDIC takeover, the Wamu escrow was opened by the FDIC.

Although Jolley did not know it at the time, the FDIC was supposed to send

out repudiation letters to notify those people whose contracts were being

repudiatedlbreached where they could file a claim. Jolley never received

any repudiation letters or termination letters. (Jolley Dec., CT 37-52, ,-(8;

, Thorne Dec," CT 53-59, '3)

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Misrepresentation: After Chase had taken over the relations, Jolley

again began negotiating with Chase to get his loan modified into a

workable loan. Again, Jolley began working again with former WaMu

employee, Mabette Del Rosario, \\rho continued to run the constructlon

disbursement department for Chase after the takeover. Here, Jolley was led

to believe that "because Chase had taken over the loanfi~om Washington

MutuaL it was still going to honor the original agreement which said in the

addendum Construction/Permanent Loan Part One: "When all conditions

prior to rollover are met as described in the construction loan agreement,

the loan will rollover to a fully amortized loan."" (JoUey Dec., CT 37-52,

';9)

Misrepresentations Re Conversion To Permanent Financing: Jolley

had to finish the building project in order to conve11 the construction loan

into a fuUy amortized loan. Chase continued to negotiate with and speak to

Jolley about a modification of the existing construction loan in order to add

the necessary $400,000 into the loan to complete building the project.

Chase continued to tell Jolley that he would be able to receive the necessary

funds to finish his project. Further, Chase led Jolley to believe that his loan

would be modified and then converted into permanent financing. Still

further, Mr. North, Chase's representative continuously mentioned Wamu's

failed accounting, the $350,000 that was still at large, and the failed

processes that were used to cause the failed accounting, as a counter

argument to why Mr. North felt Chase would end up modifying Jolley's

loan. Also, Chase told Jolley that they would hold off on the foreclosure

while .Tolley tried to get a modification. However, Chase moved forward

with their foreclosure, denied Jolley a loan modification, and delayed their

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response to Jolley for at least eight (8) months. (Jolley Dec., CT 37-52, ,-rIO;

Thome Dec," CT 53-59, '110)

What Jol1ey did not know at the time of negotiations was that,

notwithstanding Mr. North's misrepresentations to the contrary, Chase had

ceased all efforts to make any further loans or funds available to any of the

existing Wamu loans, including that of Jolley's. Thome Depo, CT 69-88.

Pgs. 37 -38

Lastly, Respondents go to great lengths to unfairly cast aspersions as

to Petitioner's character by alleging that Petitioner fails to pay the mortgage

while he is collecting rents. However, this does not ref1ect the true equities.

Jolley paid out from his personal funds over $100,000 to complete the

project so that it could be rolled over into permanent financing denied by

Chase. Furthermore, the reality is that Petitioner's tenant immediately

stopped paying rent the moment he received the Notice of Trustee's sale on

his front door. Additionally, since the property was rented, the decks on the

top noor began to leak into the lower level. so Petitioner has spent at least

$70,000 to repair the propel1y and has paid out and incurred attorney's fees

and costs of approximately $80,000 in hopes of obtaining justice. Since

summary judgment hearing, the lmver Court has stayed imposition of

attorney's fees pending the writ.

Petitioner did not want the Court to be misled from an equitable

standpoint by Respondent's unfounded claims that Petitioner has just been

collecting money and putting it in his pockeJ while Respondents are owed

their mortgage payments. Also, if this case is allowed to proceed, which it

should, Petitioner's damages will likely exceed $1,000,000, so amounts

Respondent imagines that it is losing now will be equitably offset in short

order.

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VI. STANDARD OF REVIEW

Summary judgments are reviewed de novo. Johnson v. City of Lorna

Linda (2000) 24 Ca1.4th 61, 67-68. On appeal, the reviewing court

exercises its independent judgment, deciding whether the moving party

established undisputed facts that negate the opposing party's claim or state

a complete defense. Aguilar v. Atlantic Richfield Co. (2001) 25 Ca1.4th 826;

Hamburg v. Wal-Mart Stores, Inc. (2004) 116 Cal.App.4th 497, 502-03

("Because trial judges no longer exercise discretion in considering a

summary judgment motion, application of the abuse of discretion standard

is inappropriate. Under current law, summary judgment motions raise only

questions of law regarding the construction and effect of the moving and

opposing papers; and questions oflaw are subject to the independent

standard of review."). Summary adjudications are also reviewed de novo.

Taiga v. Town of Ross (1998) 70 Cal.App.4th 309, 324.

Issues of law may be raised for the first time on appeal. Tsemetzin v.

Coast Federal Savings & Loan Assn., (1997) 57 Ca1.App.4th 1334, 1341 fn

6.

VII. GOVERNING LEGAL PRINCIPLES

In ruling on the motion, the court must view the evidence in the light

most favorable to the opposing party. Aguilar v. Atlantic Richfield Co.

(2001) 25 Ca1.4th 826.

The moving defendant initially bears the burden of showing that a

cause of action has no merit because one or more elements of a cause of

action, even if not separately pleaded, cannot be established, or there is a

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complete defense to a cause of action. CCP §437c(P)(2); Rubenstein v.

Rubenstein (2000) 81 Cal.App.4th 1131.

This is a heavy burden requiring the moving defendant to not only

show that the opposing plaintiff does not have needed evidence, but also to

demonstrate that plaintiff cannot reasonably obtain needed evidence since

the plaintiff must be allowed a reasonable opportunity to oppose the motion

as required by CCP §437c(h). Aguilar v. Atlantic Richfield Co. (2001) 25

Ca1.4th 826.

A moving defendant must present evidence, and not simply point out

that the plaintiff does not possess, and cannot reasonably obtain, needed

evidence. The defendant must "support" the motion with evidence

including "affidavits, declarations, admissions, answers to interrogatories,

depositions, and matters of which judicial notice" must or may "be taken."

CCP §437c(b). The defendant must also present evidence that the plaintiff

does not possess, and cannot reasonably obtain, needed evidence, as

through admissions by the plaintiff following extensive discovery to the

effect that he or she has discovered nothing. Aguilar v. Atlantic Richfield Co.

(2001) 25 Ca1.4th 826.

Significantly, these burden-shifting provisions do not operate until

after the moving party first produces affirmative evidence to carry its initial

burden, so until that point, the opposing plaintiff has no burden to come

forward with any evidence whatsoever. See Reeves v. Safeway Stores, Inc.

(2004) 121 Cal.App.4th 95, 107 (plaintiff resisting summary judgment

"bears no burden to establish any element of his or her case unless and until

the defendant presents evidence either affirmatively negating that element

(proving its absence in fact), or affirmatively showing that the plaintiff does

not possess and cannot acquire evidence to prove its existence"); see also

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Weber v. John Crane, Inc. (2006) 143 Cal.AppAth 1433. (concession at

deposition by asbestos-related cancer victim that he did not remember

defendant manufacturer's name and could not remember products bearing

that name was insufficient to shift burden to plaintiff to demonstrate triable

issue of causation as other means of proving exposure remained).

Even if the moving defendant manages to carry this heavy initial

burden, summary judgment must still be denied once plaintiff meets the

burden of production (not persuasion) to show that a triable issue of one or

more material facts exists as to the causes of action or defenses thereto.

CCP §437c(p)(2); Green v. Ralee Engineering Co. (1998) 19 Ca1.4th 66, 72;

Aguilar v. Atlantic Richfield Co. (2001) 25 Ca1.4th 826 (confirming it is

only a burden of production, not persuasion).

When the trial judge fails to rule on objections to evidence presented

at a summary judgment motion, the objections are deemed waived.

Accordingly, in reviewing the trial court's ruling, the appellate court

considers all evidence presented by the parties. Swat-Fame, Inc. v.

Goldstein, (2002) 101 CA4th 613, 623, 624.

As the California Supreme Court opined, in Parker v. Twentieth

Century-Fox Film Corp. (1970) 3 Ca1.3d 176:

Summary judgment is proper only if the affidavits and declarations in support of the moving party would be sufficient to sustain a judgment in his favor and his opponent does not by affidavit show facts sufficient to present a triable issue of fact. The affidavits [and declarations] of the moving party are strictly construed, and doubts as to the propriety of summary judgment should be resolved against granting the motion. Such summary procedure is drastic and should be used with caution so that it does not become a substitute for the open trial method of determining facts. [emphasis added]

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On appeal, summary judgment may only be affinned if the evidence

cannot possibly support a judgment for the opposing party. Thus, even

though it may appear that a trial court took a reasonable view of the

evidence, a summary judgment cannot properly be affinned unless a

contrary view would be unreasonable as a matter of law in the

circumstances presented. Binder v. Aetna Life Ins. Co. (1999) 75

Cal.App.4th 832, 838.

VIII. ARGUMENT

A. Summary Judgment Should Have Been Denied Because (1) Chase Was Liable for All of Its Own Torts and Breaches of Contract and (2) the Purchase and Assumption Agreement ("PAA") Cannot Insulate Chase From Successor Liability for WaMu's Conduct Due to (A) Express Contract Terms Binding All ofWaMu's "Successors and Assigns," (B) the FDIC's Decision Not to Exercise Its Rescission Power, and (C) Chase's Own Failure to Provide Notice that it Was Not "Stepping into the Shoes" of WaMu.

Summary judgment was inappropriate because, as discussed below,

Chase was directly liable for all torts and breaches of contract committed

after its assumption of Appellant's loan from WaMu. This result is dictated

by common sense and persuasive federal authority. See, e.g., Ansanelli v.

JPMorgan Chase, 2011 WL 1134451, Case No. CVI0-03892.

Respondent did not meet its initial burden on this issue and, although

not required, Appellant adduced sufficient evidence showing triable issues

of material fact to require denial of summary judgment.

Moreover, the PAA does not magically shield Chase from liability

because the FDIC never properly rescinded Appellant's loan contract by

mailing a "rescission letter" to Appellant within a "reasonable time"

(presumably 90 days), as required by 12 USC 1821(d)(3)(B)-(C) and 12

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USC 1821 (e )(2). It has been years now and neither Chase nor the FDIC has

ever sent notice of rescission.

Dispositive1y, Paragraph 13, of the underlying contract with WaMu

clearly states that "[t]he covenants and agreements of this Security

Instrument shall bind ... the successors and assigns of Lender [WaMu].,,1

Under California decisional law, this provision requires all future

assignees of the WaMu contract benefits to automatically take subject to its

burdens, to "take the place" ofWaMu, and "sustain[] [WaMu's] part or

character" to the full extent mandated by Civil Code §1589, which codifies

the equitable maxim that "a voluntary acceptance of the benefit of a

transaction is equivalent to a consent to all the obligations arising from it,

so far as the facts are known, or ought to be known, to the person accepting"

such benefits. See Citizens Suburban Co. v. Rosemont Development Co.

(1966) 244 Cal.App.2d 666, 675-676, which provides the following

elaboration on the rule:

At common law an assignment transfers the benefits of an executory contract but not its burdens, unless the assignee expressly assumes the latter. [citations] A clause binding 'successors and assigns' is designed to eliminate the necessity for an express assumption of burdens. [citations]

The notion of succession appears to be wider than the technical confines of contract assignment. According to dictionary and judicial definitions a successor is one who takes the place of another and sustains his part or character. [citations] In the context of a contract situation, the notion of succession bears strong parallels to the declaration of Civil Code section 1589: 'A voluntary acceptance of the benefit of a transaction is equivalent to a consent to all the obligations arising from it, so far as

I Subject only to limited inapplicable exceptions in Paragraph 20.

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the facts are known, or ought to be known, to the person accepting.' Indeed, the statutory declaration provides a useful device for gauging the outer limits of the 'successors and assigns' clause of the present contract. [emphasis added]

In tum, the FDIC was precluded from attempting to contractually

shield Chase from liability because this clause required the FDIC to pass all

burdens on to its assignee, Chase, since it never exercised its special

rescission power and was otherwise subject to state contract law (see

below).

It is well established that, "as receiver the FDIC 'steps into the shoes'

of the failed financial institution, assuming all the rights and obligations of

the defunct bank." Sharpe v. F.D.J.C., 126 F.3d 1147 (9th Cir. 1997).

Accordingly, the FDIC's "successors and assigns" were automatically

bound by all obligations and burdens of the WaMu contract since the FDIC

never exercised its rescission power according to uncontroverted evidence

adduced by Appellant and his expert, Jeffrey Thome, in opposition to

summary judgment.

Sharpe, supra, 126 F.3d 1147, makes it very plain the FDIC could

only avoid liability for breaches of a "pre-receivership contract" through

the proper use of its rescission power. As the Court explained:

§1821(d)(2)(H) [generally] requires that the FDIC "pay all valid obligations of the insured depository institution." Although the statute clearly contemplates that the FDIC can escape the obligations of contracts, it may do so only through the prescribed mechanism. Section 1821 (e) allows the FDIC to disaffinn or repudiate any contract it deems burdensome and pay only compensatory damages. FIRREA does not permit the FDIC to breach contracts at will. We hold that the FDIC did not act within its statutorily granted powers in breaching the ... [pre-receivership contract] ... [so]

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claims for declaratory relief and rescission therefore are not barred ....

The Court emphasized that FIRREA protections only applied if the

FDIC properly exercised repudiation rights under 12 U.S.C. § 1821(e),

which "allows the FDIC to 'disaffirm' any contract that it determines to be

burdensome." As further explained by the Court:

When the FDIC chooses to repudiate a contract pursuant to § 1821 ( e), it must inform the parties to the contract within a reasonable time [presumptively 90 days] and pay compensatory damages.

Had the FDIC followed the § 1821 (e) procedure in disaffirming the settlement agreement . . ., this would have been a very different case. But rather than proceeding pursuant to § 1821(e), the FDIC chose to breach the contract .... FIRREA does not address the consequences of the FDIC's breach of the ... settlement agreement, but it cannot be the case that the FDIC is in a better position when it breaches a contract than when it chooses to repudiate pursuant to § 1821 ( e).

Sharpe ultimately held (1) that a "party to a pre-receivership contract

breached by the FDIC ... [fully] retains the rights accompanying [their]

contract notwithstanding appointment of the FDIC as receiver," (2) that the

FDIC's "broad" receivership powers are "not unlimited," (3) that the FDIC

may be held liable for breach of contract under state law, (4) that absent

timely rescission notice, the FDIC cannot "avoid its contractual obligations

by invoking the FIRREA administrative claims process" so as to

"effectively preempt state contract law," and (5) that a party harmed by

breach of a pre-receivership contract "cannot be considered creditors of the

FDIC" so FIRREA's administrative exhaustion requirement does not apply.

In short, because the FDIC never even attempted to use its

"rescission power" here, it remained squarely in WaMu's "shoes" and could

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not validly attempt to assign benefits of the contract without all associated

burdens because such an attempt would be void ab initio as violative of

Paragraph 13 in the Contract which, based on the foregoing, must now be

properly read to "bind ... the successors and assigns of Lender [FDIC

"standing in the shoes" ofWaMu]."

Consequently, the FDIC lacked power to absolve Chase of

contractual liability for the "sins" ofWaMu and, pursuant to Civil Code

§1589, Chase was required to take all burdens of the contract along with the

benefits and to "take the place" of WaMu, and "sustain[] [WaMu's] part or

character" for all purposes. Citizens Suburban Co. v. Rosemont

Development Co. (1966) 244 Cal.App.2d 666,675-676.

This result is particularly appropriate because Chase ratified WaMu's

contract and breaches thereof, acted as though it had completely "stepped

into WaMu's shoes" regarding the loan, including the assumption of all

burdens from WaMu's misconduct, and brought the obligations on itselfby

failing to timely notify Appellant ofthe assignment and its position that

liability was cutoff. Although California courts do not yet seem to have

visited the issue, modern contract principles and other persuasive authority

support the rule that an assignee taking over a debtor's loan necessarily

takes it subject to all claims and defenses that accrued before the debtor had

notice of the assignment and its implications and that assignee can only

protected his rights by giving the obligor notice of the assignment and

resulting consequences since the assignee was in the best position to do so.

See Smith v. Mallick, 514 F.3d 48 (D.C. Cir. 2008)(assignee who purchased

a chose in action from assignor was bound by settlement between debtor

and the assignor original entitled to collect the debt because the assignee

failed to provide notice of the assignment); citing RESTATEMENT

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(SECOND) OF CONTRACTS §§ 336, 338 (1981); and 9 ARTHUR

LINTON CORBIN, CORBIN ON CONTRACTS § 890, at 510 (interim ed.

2002).

Based on the foregoing, the PAA absolutely cannot shield Chase

from liability for breaches of contract by WaMu and itself. Respondent's

contrary authority is inapposite because presumably "rescission letters" had

properly been sent in those cases.

Likewise, Chase should be held liable for its own torts committed

against Appellant and must also bear successor liability for WaMu's torts

based on the foregoing analysis, which applies with equal force to torts, the

general grounds for successor tort liability, and the less stringent rule

pronounced in Ray v. Alad Corp. (1977) 19 Ca1.3d 22 (products liability),

which arose from policy and equitable considerations that should apply

here.

Because WaMu decimated the World Economy by intentionally

and/or recklessly spitting out mass quantities of defective "financial

products" for years and because Chase, with full knowledge of the vast

harm caused by WaMu's defective financial "products," willingly sought to

reap all of WaMu's remaining "good will" and other valuable tangible and

intangible assets at a bargain price through the FDIC receivership, it is

manifest that equity and justice require Chase to also accept the burdens

flowing from evil practices that allowed WaMu to build the empire Chase

now hopes to enjoy with impunity.

That sickening result cannot stand in light of the analysis in Ray v.

Alad Corp. (1977) 19 Ca1.3d 22, which created a variation on the

"continuity of enterprise" theme that focuses less on the buyer and seller

and more on product itself, consistent with the principles of strict liability

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in tort. Under the "Ray Rule," a successor Company B may be held strictly

liable for defects in products manufactured and distributed by the original

Company A if (I) the virtual destruction of the plaintiffs remedies against

the original Company A resulted from the successor Company B's

acquisition of the business, (2) the successor Company B has the ability to

assume the risk-spreading role originally provided by Company A, and (3)

fairness requires the successor Company B to assume responsibility for

defective products that was a burden necessarily attached to Company A's

good will being enjoyed by successor Company B in the continued

operation of the business. ld. at 11.

The argument for recognition of strict "financial product" liability is

compelling. Who can, in good conscience, deny the propriety of strict

"financial product" liability for banks after surveying the tragic, post

apocalyptic landscape of the housing market decimated by WaMu and its

cohorts or hearing the anguished cries of countless disenfranchised

homeowners struggling to avoid foreclosure after the banks pillaged the

economy?

The exact same policies and rationales must be applied to protect the

economy against further devastation from predatory banks. It must be

remembered that strict product liability was once only a dream that became

reality because courts recognized the desperate need. The creation of strict

product liability is the only reason corporations no longer murder working

men with asbestos. It is the only reason corporations no longer write

"smoking gun" cost-benefit memos deciding to murder citizens with

defective cars that explode upon side-impact because a simple recall would

cost more than the damages anticipated from litigation.

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Likewise, future generations will hopefully bear witness that this

Court's learned decision to recognize strict "financial product" liability

proved to be the only way to deter banks from killing our economy and

citizens with defective "financial products" since banks and corporations

have no soul or conscience beyond their "bottom line."

The analogy is crystal clear and the same policies compellingly

militate in favor of strict "financial product" liability. Thus, the Ray Rule

should be used here to establish Chase's successor liability since (1) Chase's

bargain acquisition of virtually all ofWaMu's personnel as well as tangible

and intangible assets resulted in the virtual destruction of Appellant's

remedies against WaMu, (2) Chase has the ability to assume the risk

spreading role originally provided by WaMu, and (3) fairness requires

Chase to assume responsibility for defective "financial products" that

should be deemed a burden necessarily attached to WaMu's "good will" and

other assets now being enjoyed by Chase in the continued operation of the

business.

Alternatively, Chase's successor tort liability also exists under the

general rule that a purchaser assumes a seller's liabilities when (1) there is

an express or implied agreement of assumption, (2) the transaction amounts

to a consolidation or merger of the two corporations, (3) the purchasing

corporation is a mere continuation of the seller, or (4) the transfer of assets

to the purchaser is for the fraudulent purpose of escaping liability for the

seller's debts. Id. At 28. The "mere continuation" ground for liability exists

due to Chase's acquisition of all WaMu's operating assets, its use of those

assets and ofWaMu's former employees to maintain the same line of

"financial products," its holding itself out to customers and the public as a

continuation of the same enterprise under a new name, its failure to provide

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WaMulFDIC with adequate consideration to meet claims of unsecured

creditors (a factual determination subject to disputed material facts); the

fact that one or more persons were officers, directors, or stockholders of

both WaMu and Chase (a factual determination subject to disputed material

facts).2 I d.

Moreover, the powerful deposition testimony and declaration of

Jeffrey Thome created triable issues of material fact as to whether Chase

defrauded and deceived Appellant and the general public by concealing the

true purchase and assumption agreement wherein Chase retained full

liability for WaMu's torts and contractual breaches in exchange for other

favorable terms. Mr. Thome is uniquely qualified to present evidence on

this issue and he had personally read the "smoking gun" document so

Appellant was entitled to have a jury evaluate credibility regarding this

crucial fact, which would clearly preserve Chase's liability for WaMu's

misconduct.

As further reversible error, in light of Mr. Thorne's testimony

about the existence of a conflicting agreement, it was improper for Judge

Duryee to take judicial notice of and wholeheartedly accept the truth of

matters asserted in the disputed agreement. See, e.g., Joslin v. HA.S. Ins.

Brokerage (1986) 184 Cal.App.3d 369; Day v. Sharp (1975) 50 Cal.App.3d

904; Middlebrook-anderson Co. v. Southwest Sav. & Loan Assn. (1971) 18

Cal.App.3 d 1023. In this case, judicial notice should have been strictly

limited to the existence of the document and nothing further. Id.

2The last two facts are based on Appellant's infonnation and belief. Further expert analysis of the

underlying transactions will be required to verify these allegations. However, since expert discovery had not closed before summary judgment, the disputed nature of these facts should have been ground for denial of summary judgment.

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As another ground for reversal, Judge Duryee should have granted

Appellant's request for additional time to conduct further discovery to

obtain this document since it would be dispositive on numerous important

issues and the FDIC tacitly admitted its existence by advising that it could

be obtained only after all trial counsel and the judge executed a stipulated

confidentiality agreement and protective order restricting usage to this

matter. CCP §437c(h) clearly requires the court to grant further discovery

on this matter since Chase improperly concealed the document and related

facts despite numerous discovery requests; Chase's counsel unreasonably

refused to stipulate to obtain the document; the FDIC improperly refused to

comply with a state subpoena requesting the document in violation of the

liberal discovery principles and the Freedom of Information Act (FOIA).

Lawsuits should be decided on the merits so the Court was clearly

required to order additional time for discovery and compelled cooperation

from Respondent to ensure timely acquisition of the document from the

FDIC. Indeed, even without ordering additional discovery under CCP

§437(c)(h), the court should properly have ordered production of the

document as part of expert discovery since it was crucial to support Jeffrey

Thome's expert opinion.

Summary judgment should have been denied and Appellant should

have been granted further time to complete discovery because Appellant

properly sought to obtain discovery of the full PAA maintained by the FDIC,

which made Chase contractually liable for WaMu's wrongdoing according

to Appellant's expert, Jeffrey Thome, and only failed to obtain the

document due to "stonewalling" by the FDIC and opposing counsel.

Essentially, Appellant was stonewalled. The FDIC flatly refused to

comply with Appellant's state subpoena and tacitly admitted the existence

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of the "secrete" PAA by advising that it could be obtained only if the court

and all parties stipulated to a comprehensive protective order barring its

dissemination outside this matter.

Appellant asked opposing counsel to stipulate, but was ignored.

Moreover, since there can be no doubt Chase itself has a copy of the

document, Respondent's failure to produce a copy in response to document

requests is, by itself, ground to allow further discovery. There can be no

doubt Appellant was stonewalled by Respondent.

Appellant then asked the court for relief at the hearing and was

effectively denied any chance of obtaining real relief notwithstanding

contrary guaranties under CCP §437c(h}.

Therefore, summary judgment must be reversed since Respondent

completely failed to demonstrate that AppellantlPlaintiff cannot reasonably

obtain needed evidence and because the plaintiff must be allowed a

reasonable opportunity to oppose the motion as required by CCP §437c(h).

Aguilar v. Atlantic Richfield Co. (2001) 2S Ca1.4th 826.

B. Summary Judgment Should Have Been Denied Because WaMu and Chase Owed a Duty of Care to Reasonably Handle the Construction Loan and Actively Participated in Tortious Misconduct Going Far "Beyond the Domain of a Usual Money Lender," Which Exposed Them to Liability under the "Casey Rule" and Other Decisional Law.

It was improper to bar recovery for the negligence (fourth) cause of

action on the false ground that no duty of care was owed to Appellant

because, to the contrary, banks may always be held liable for negligently

mishandling disbursements and other aspects of a construction loan.

Commercial Standard Ins. Co. v. Bank of America (1976) 57 Cal.App.3d

241 (finding a bank. liable for negligent distribution of construction loan

proceeds based on a duty of care owed to the borrower and surety). A bank

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may be liable in negligence if it fails to discharge its contractual duties with

reasonable care. Chazen v. Centennial Bank (1998) 61 Cal.App.4th 532,

537.

Commercial Standard Ins. Co. v. Bank of America (1976) 57

Ca1.App.3d 241,248 provides valuable insight into banks flawed claim that

no duty of care exists to support negligence claims. The court correctly

opined that, "having agreed to and undertaken to disburse the [construction]

loan proceeds in accordance with the value of the construction as it

progressed, Bank owed to [borrower] the duty to exercise reasonable care

in so doing." The court even went on to extend a duty of care to the surety

as well because:

Analysis of liability for negligence in terms of 'duty' has been criticized as a question-begging process. 'The assertion that liability must ... be denied because defendant bears no 'duty' to plaintiff 'begs the essential question--whether the plaintiffs interests are entitled to legal protection against the defendant's conduct .... It (duty) is a shorthand statement of a conclusion, rather than an aid to analysis in itself. . . . But it should be recognized that 'duty' is not sacrosanct in itself, but only an expression of the sum total of those considerations of policy which lead the law to say that the particular plaintiff is entitled to protection.' ... Dillon v. Legg, 68 Ca1.2d 728, 734 [further citations omitted]

"The principal policy considerations are: 'the foreseeability of harm to the plaintiff, the degree of certainty that the plaintiff suffered injury, the closeness of the connection between the defendant's conduct and the injury suffered, the moral blame attached to the defendant's conduct, the policy of preventing future harm, the extent of the burden to the defendant and consequences to the community of imposing a duty to exercise care with resulting liability for breach, and the availability [sic], cost, and prevalence of insurance for the risk involved.' (Rowland v. Christian, 69 Ca1.2d 108, 113 [further citations omitted]

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Further, a duty of care arose because both WaMu and Chase

(collectively, "Banks") "actively participated" in the tort by engaging in

misconduct going far "beyond the domain of a usual money lender,"

thereby exposing the Banks to liability under the rule in Casey v. Us. Bank

Nat. Assn. (2005) 127 Cal.App.4th 1138, 1144-1145 ("Casey Rule"), which

was carefully preserved by Nymark v. Heart Fed. Savings & Loan Assn.

(1991) 231 Cal. App.3d 1089, 1096., improperly cited in support of the

mistaken proposition that a duty can never exist.

The Casey Rule established that a bank may even be liable for aiding

and abetting torts committed by third-parties when it renders "substantial

assistance" to a tortfeasor during a business transaction, that is, knowingly

aids the commission of the tort. Casey v. u.s. Bank Nat. Assn., supra, 127

Cal.App.4th 1138, 1144-1145. Afortiori, it cannot reasonably be imagined

that the Banks in this case are somehow absolved of liability for their own

torts just because of the lending context.

Petitioner expert Jeffrey Thome's testimony and declaration, the

declaration of Petitioner and other evidence adduced in opposition to

summary judgment clearly created triable issues of material facts regarding

both banks' fraud, negligence and other torts committed, inter alia, in

connection with the contract performance and distribution of construction

loan funds. Consequently, summary judgment should not have been granted

as to Appellant's negligence cause of action.

c. Summary Judgment Should Have Been Denied Because Triable Issues of Material Fact Fully Support Appellant's First and Second Causes of Action for Intentional and Negligent Misrepresentation.

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Summary judgment was inappropriate because triable issues of

material fact exist regarding these issues, based on the declarations

submitted in Appellant's opposition, and Chase is liable for all misconduct

by WaMu despite the PAA. (See Section VIlLA., above.)

Lovejoy v. AT&T Corp. , 92 Cal. App. 4th 85 recites the basic rules:

The elements of fraud, which give rise to the tort action for deceit, are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or "scienter"); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage. [citing Lazar v. Superior Court (1996) 12 Ca1.4th 631, Civ. Code, § 1709; Molko v. Holy Spirit Assn. (1988) 46 Ca1.3d 1092, 1108.] [internal quotes omitted]

. . . "One who fraudulently makes a misrepresentation of fact ... for the purpose of inducing another to act or to refrain from action in reliance upon it, is subject to liability to the other in deceit for pecuniary loss caused to him by his justifiable reliance upon the misrepresentation." . . . [and] "[ 0 ]ne who makes a fraudulent misrepresentation is subject to liability to the persons or class of persons whom he intends or has reason to expect to act or to refrain from action in reliance upon the misrepresentation, for pecuniary loss suffered by them through their justifiable reliance in the type of transaction in which he intends or has reason to expect their conduct to be influenced." ...

. . . the only intent by a defendant necessary to prove a case of fraud is the intent to induce reliance. Moreover, liability is affixed not only where the plaintiff's reliance is intended by the defendant but also where it is reasonably expected to occur. [emphasis added]

The Lovejoy Court went on to strongly criticize dictum in Conrad v.

Bank of America, (1996) 45 Cal.App.4th 133, one of the cases cited by

Judge Duryee in support of summary judgment on the breach of

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contract/promissory estoppel claim discussed below because it is not

"necessary that the defendant intend to cause the plaintiff to suffer a

particular type of damage," only that detrimental reliance could "reasonably

[be] expected to occur" because:

Few defrauding defendants give any serious thought to the nature or quality of the harm which could befall the victims who rely on their deceptive acts. It would be unconscionable and nonsensical for such perpetrators to escape liability because of their indifference to the consequences of their opprobrious behavior. [So] To the extent the Conrad dictum and the 66-year-old case it cites, Carlson v. Murphy (1935) 8 Cal.App.2d 607, 611 [47 P.2d 1100] can be read for the proposition that a defendant is not liable in fraud for damage that he does not anticipate, or indeed intend to occur, we reject both as inconsistent with California law.

True statements can form the basis of false representations if

they are made in a manner designed to create a false impression and

were so acted 00. Smith v. Brown (1943) 59 Cal. App. 2d 836, 838. A

misrepresentation need not be express for a claim in tort to lie. A

misrepresentation may be implied or inferred from the circumstances.

Universal By-Products, Inc. v. City of Modesto (1974) 43 Cal. App. 3d 145.

Negligent misrepresentation is a fonn of deceit based on (1) a

misrepresentation of a past or existing material fact; (2) without reasonable

grounds for believing it to be true; (3) with intent to induce another's

reliance on the fact misrepresented; (4) ignorance of the truth and justifiable

reliance thereon by the party to whom the misrepresentation was directed;

and (5) damages. B.L.M v. Sabo & Deitsch (1997) 55 Cal. App. 4Th 823,

834.

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Based on the foregoing legal principles, it is clear that summary

judgment was inappropriate because these causes of action are strongly

supported by triable issues of material fact regarding fraud and deceit from

Respondents' intentional and negligent misrepresentations. (See, e.g., the

Declarations of Jeffrey Thorne and Petitioner as well as all other evidence

set forth in the appellate record, which is collectively incorporated herein

by reference as though set forth verbatim.)

It must be emphasized that it was improper to grant summary

judgment on the trial court's personal evaluation regarding the meaning of

verbal statements because ironically linguistic experts universally agree

that so-called "verbal communications" are, in reality, primarily (~80% or

more) "non-verbal," because tone, attitude, inflection, volume, body

language and a host of other intangible factors must be analyzed to

determine the true meaning. Consequently, it was improper for the court to

insert its judgment and a jury trial was required to listen to all testimony,

watch the body language and other intangible factors associated with those

communications as related by the percipient witnesses and to determine the

true meaning of the verbal misrepresentations as well as the extent that it

was reasonable for Petitioner to rely thereon based on the totality of the

surrounding circumstances.

D. Summary Judgment Should Have Been Denied Because Triable Issues of Material Fact Fully Support Appellant's Third Cause of Action for Breach of Contract / Promissory Estoppel.

Where a party to a contract fails to perform in accordance with the

contract, or if the consideration he is required to give otherwise fails in

whole or in part through his fault, the other party may invoke this failure as

a basis for rescinding or terminating the contract, as long as the failure or

refusal to perform constitutes such a material breach as to justify rescission

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or termination. Cal. Civ. C. §1689; Taliaferro v. Davis (1963) 216 Cal.App.

2d 398.

Failure of consideration is the failure to execute a promise, the

performance of which has been exchanged for performance by the other

party.ld. This failure may arise from a willful breach of the promise. Id.

Time is not of the essence unless it clearly appears from the terms of

the contract or, in light of all circumstances, that this was the intention of

the parties. However, no specific words are necessary to make time of the

essence. Henck v. Lake Hemet Water Co. (1937) 9 Ca1.2d 136, 143-44.

Furthermore, in every contract there is an implied covenant of good

faith and fair dealing by each party not to do anything which will deprive

the other parties of the benefits of the contract, and a breach of this

covenant by failure to deal fairly or in good faith gives rise to an action for

damages. Sutherland v. Barclays American/Mortgage Corp. (1997) 53 Cal.

App. 4th 299,314.

The covenant imposes on each party to the contract the duty to

refrain from doing anything which would render performance of the

contract impossible by any act of his own, and also the duty to do

everything that the contract presupposes that each party will do to

accomplish its purpose. April Enters., Inc. v. KTTV(l983) 147 Cal. App.3d

805, 816.

A party to a contract breaches the covenant by interfering with or

failing to cooperate with the plaintiff in the performance of the contract.

Sutherland v. Barclays American/Mortgage Corp. (1997) 53 Cal. App.4th

299. The breaching party is liable for all damages proximately resulting

from the conduct. Quigley v. Pet, Inc. 162 Cal. App.3d 877, 887-888.

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The elements for promissory estoppel are (1) a promise that is clear

and unambiguous in its terms (Lange v. TIG Ins. Co. (1998) 68 Cal. App.

4th 1179, 1185); (2) breach of that promise (Blatt v. University of S. Cal.

(1970) 5 Cal. App. 3d 935, 944); (3) actual reliance on the promise (Van

Hookv. Southern Cal. Waiters Alliance (1958) 158 Cal.App.2d 556; (4) that

the reliance was both reasonable and foreseeable (Graddon v. Knight

(1956)138 Cal. App. 2d 577); (5) detrimental reliance, i.e., injury from

reliance on the promise (ld.); and (6) an injustice that can only be avoided

by enforcement of the promise (C & K Eng 'g Contractors v. Amber Steel

Co. (1978) 23 Cal. 3d 1, 7).

Accordingly, Drennan v. Star Paving Co. (1958) 51 Cal. 2d 409,413,

333 P.2d 757, 759, held that a promise which the promisor should

reasonably expect to induce definite and substantial action or forbearance

on the part of the promisee or a third person, and which does induce such

action or forbearance, is binding if injustice can be avoided only by

enforcement of the promise.

The trial court improperly granted summary judgment on the ground

that WaMu and Chase failed to make "clear and unambiguous promises"

(Laks v. Coast Fed. Sav. & Loan Assn. (1976) 60 Cal.App.3d 885); that the

"subject matter ... [was] left for further negotiation and agreement"; and

that the banks' written, verbal and implied promises were not sufficiently

definite.

However, even a cursory review quickly reveals that WaMu and

Chase both breached express, written and implied promises of the contract

and, as discussed above, Chase remains fully liable for all such breaches.

Indeed, all of the facts set forth above to support claims that WaMu

and Chase intentionally or negligently mishandled the loan and/or made

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intentional or negligent misrepresentations regarding the loan must, by

force of reason, also support the conclusion that the banks did not properly

fulfill their written, verbal and implied promises in connection with the

contract, thereby breaching the contract and implied warranty of good faith

and fair dealing arising thereunder, and subjecting both banks to liability

under the doctrine of promissory estoppel.

Moreover, it must be reemphasized that it was improper to grant

summary judgment on the trial court's personal evaluation regarding the

meaning of verbal statements because ironically linguistic experts

universally agree that so-called ''verbal communications" are, in reality,

primarily (~80% or more) "'non-verbal," because tone, attitude, inflection,

volume, body language and a host of other intangible factors must be

analyzed to determine the true meaning. Consequently, it was improper for

the court to insert its judgment and a jury trial was required to listen to all

testimony, watch the body language and other intangible factors associated

with those communications as related by the percipient witnesses and to

detennine the true meaning of the verbal misrepresentations as well as the

extent that it was reasonable for Petitioner to rely thereon based on the

totality of the surrounding circumstances.

Consequently, there can be no doubt that sufficient disputed material

facts exist to deny summary judgment on this cause of action.

E. Summary Judgment Should Have Been Denied Because Triable Issues of Material Fact Fully Support Appellant's Seventh Cause of Action for an Accounting.

It was improper to grant summary judgment as to Appellant's

accounting (seventh) cause of action because, in light of the foregoing

analysis, it is beyond contestation that an agreement existed between

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Appellant and both Banks that required them to provide an accounting to

ensure full and appropriate distribution of all funds, to establish the extent

to which Appellant was harmed by failures in that regard, and to verify

amounts, if any, that Appellant owes them as claimed in the Notice of

Default and other documents.

F. Summary Judgment Should Have Been Denied Because Triable Issues of Material Fact Fully Support Appellant's Eighth Cause of Action for Reformation.

It was improper to grant summary judgment on this cause of action

on equitable grounds. Although the court did not elaborate, its decision

seems to rest primarily on the flawed determinations that the PAA absolved

Chase of liability for WaMu's sins, so the "attempt to revise the contract

based on a purported mutual mistake between Plaintiff and Washington

Mutual cannot be visited upon Chase" and that Chase would be unduly

prejudiced by delay.

However, based on the foregoing analysis, it is clear that Appellant

was the victim and that numerous equitable principles, including, without

limitation, promissory estoppel, dictate that Chase must bear any burden of

such relief because (1) Chase brought this problem upon itself by hungrily

acquiring WaMu for a bargain price, despite full knowledge of WaMu's

nefarious practices and the immense harm it had inflicted upon Appellant

and the world at large, (2) Chase itself committed torts and breached the

contract, and (3) the FDIC receivership does not save Chase from its

obligation to completely stand squarely in the shoes ofWaMu (see above).

G. Summary Judgment Should Have Been Denied Because Triable Issues of Material Fact Fully Support Appellant's Fifth Cause of Action for DeL Violations of Business and Professions Code §17200, et seq., by WaMu and Chase.

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Business and Professions Code § 17200 ("Section 17200") prohibits

any "unlawful, unfair or fraudulent business act or practice." As the

Supreme Court explained, in Cel-Tech Communications, Inc. v. Los Angeles

Cellular Telephone Co. (1999),20 Ca1.4th 163:

the unfair competition law's [UCL] scope is broad .... it does not proscribe specific practices. Rather, as relevant here, it defines "unfair competition" to include "any unlawful, unfair or fraudulent business act or practice." (§ 17200.) [8] Its coverage is "sweeping, embracing' "anything that can properly be called a business practice and that at the same time is forbidden by law." , " [citations] It governs "anti-competitive business practices" as well as injuries to consumers, and has as a major purpose "the preservation of fair business competition. " [citations] By proscribing "any unlawful" business practice, "section 17200 'borrows' violations of other laws and treats them as unlawful practices" that the unfair competition law makes independently actionable. [citations]

However, the law does more than just borrow. The statutory language referring to "any unlawful, unfair or fraudulent" practice (italics added) makes clear that a practice may be deemed unfair even if not specifically proscribed by some other law. "Because Business and Professions Code section 17200 is written in the disjunctive, it establishes three varieties of unfair competition-acts or practices which are unlawful, or unfair, or fraudulent. 'In other words, a practice is prohibited as "unfair" or "deceptive" even if not "unlawful" and vice versa.' " [ citations] which states that nothing in the Unfair Practices Act "prohibits" certain price differentials].)

... the section was intentionally framed in its broad, sweeping language, precisely to enable judicial tribunals to deal with the innumerable ' "new schemes which the fertility of man's invention would contrive." [citations] ... 'When a scheme is evolved which on its face violates the fundamental rules of honesty and fair dealing, a court of equity is not impotent to frustrate its consummation because the scheme is an original one ... .' [ citations] ... given the creative nature of the

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scheming mind, the Legislature evidently concluded that a less inclusive standard would not be adequate." [citations ] [Because] "[I]t would be impossible to draft in advance detailed plans and specifications of all acts and conduct to be prohibited [citations], since unfair or fraudulent business practices may run the gamut of human ingenuity and chicanery." [citations] [emphasis added]

A single business act is actionable under the 1992 amendment to

Section 17200.

"Section 17200 is not confined to anti-competitive business practices

but is equally directed toward 'the right of the public to protection from

fraud and deceit." Committee on Children s Television, Inc. v. General

Foods Corp. (1983) 35 Ca1.3d. 197,209. A "fraudulent" activity includes

any practice likely to deceive the public, even if no one is actually deceived.

Id.

An unlawful activity includes any business practice that is forbidden

by law ( Id.), including anything prohibited by civil, criminal, federal, state,

municipal, statutory, regulatory or court-made law (Saunders v. Superior

Court (1994) 27 Cal.App.4th 832,839).

An "unfair" practice is one that offends established public policy;

that is immoral, unethical, oppressive, unscrupulous or substantially

injurious to consumers; or that has an impact on the victim that outweighs

defendant's reasons, justifications and motives for the practice. Podolsky v.

First Healthcare Corp. (1996) 50 Cal.App.4th 632. Unfairness is

independently sufficient to state a claim. Allied Grape Growers v. Bronco

Wine Co. (1988) 203 Cal.App.3d 432,451.

Based on the foregoing, Respondent is clearly liable under Section

17200, et seq., because Chase must stand squarely in the shoes ofWaMu

for all of its criminal, fraudulent, negligent and otherwise "unfair" practices

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perpetrated against Appellant and the world economy and (2) the facts

adduced in opposition to summary judgment clearly show that Chase itself

engaged in similar practices that give rise to liability under the UCL (see

above).

H. Summary Judgment Should Have Been Denied Because Triable Issues of Material Fact Fully Support Appellant's Sixth Cause of Action for Declaratory Relief.

Gafcon, Inc. v. Ponsor & Associates ,(2002) 98 Cal.App.4th 1388,

recites the following rules:

Summary judgment procedure includes declaratory relief actions "in a proper case." [citations] ... When summary judgment is appropriate, the court should decree only that plaintiffs are not entitled to the declarations in their favor. [citations] Thus, in a declaratory relief action, the defendant's burden is to establish the plaintiff is not entitled to a declaration in its favor. It may do this by establishing (1) the sought-after declaration is legally incorrect; (2) undisputed facts do not support the premise for the sought-after declaration; or (3) the issue is otherwise not one that is appropriate for declaratory relief.

Appellant properly seeks declaratory relief as to the parties

respective rights and duties under the underlying WaMu contract and

subsequent oral modifications not subject to parol evidence rule or statute

of fraud for various reasons, e.g., promissory estoppel. The trial court did

not indicate its reasons for denial of declaratory relief, but presumably it

was due to its erroneous findings regarding the other causes of action.

Therefore, since the balance of this brief unequivocally shows triable issues

of material fact remain to support all causes of action, summary judgment

should be reversed as to this claim as well.

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IX. CONCLUSION

Based on the foregoing legal and factual analysis, the trial court's

order for summary judgment should be reversed and vacated, and this

matter should be remanded to the trial court for full discovery and a jury

trial on all causes of action.

DATED: March 29,2012 LAW OFFICES OF VERNON L. BRADLEY

By: vern~~. Attorney for Plaintiff/Petitioner

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CERTIFICATE OF WORD COUNT (Rule 8.204)

I, Vernon Bradley, counsel for petitioner/appellant, certify pursuant to the

California Rules of Court, that the word count for this document is 11,874 words,

excluding the tables, this certificate, and any attachment permitted under rule

8.204(d). This document was prepared in Word and this is the word count

generated by the program for this document. I certify under penalty of perjury

under the laws of the State of California that the foregoing is true and correct.

Executed, at Sausalito, California, on the date set forth below.

DATED: March 29,2012 LAW OFFICES OF VERNON L. BRADLEY

BY;ve~ Attorney for PlaintifflPetitioner

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PROOF OF SERVICE BY MAIL Cal. Code Civ. Proc. § 1013a(3)

Re: Trial Court: Superior Court of California, County of Marin

SUPERIOR COURT CASE No. CIV 1002039

COURT OF ApPEAL CASE No. A134019

CASE TITLE: JOLLEY V. CHASE HOME FINANCE, ET. AL.

I, Andrew Martin, declare I am employed in the County of Marin. My business address is

Waldo Point Harbor, 54 Liberty Dock, Sausalito, California 94965. I am over the age of 18 years

and not a party to this cause. I am readily familiar with the firm's business practice for collection

and processing of correspondence for mailing with the United States Postal Service. On the date set

forth below, I served the following document(s) described as:


on each of the interested parties in this action by sealing a true and correct copy of said document(s)

in an envelope for each addressed as follows:

HARVEY SOHNEN, ESQ. PATRICIA M. KELLY ESQ. LAW OFFICES OF SOHNEN & KELLY 2 THEATRE SQUARE, SUITE 230 ORINDA CALIFORNIA 94563-3346

SUPREME COURT OF CALIFORNIA 350 McALLISTER STREET SAN FRANCISCO, CA 94102-4797

HON. M. LYNN DURYEE MARIN COUNTY SUPERIOR COURT P.O. Box 4988 SAN RAFAEL, CA 94913

I placed the envelopes for collection and mailing with postage prepaid at the Law Offices of

Vernon L. Bradley located at Waldo Point Harbor, 54 Liberty Dock, Sausalito, California, on the

above date following ordinary business practices. Following ordinary business practices, the

envelopes would be deposited with the United States Postal Service the same day in the ordinary

course of business.

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I declare that the foregoing is true and correct and so declare under penalty of perjury

pursuant to the laws of the State of California. ~q CN'l-tW!.

Executed this Marcq21, 2012 at Sausalito, California.

Andrew Martin

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AFTER RECORDING RETURN TO:

Washington Mutual Bank FA Attn: Document Operatio'ns Mai/stop FSC 0112 2210 Enterprise Drive Florence, SC 29501

-- --------------

----------- [Space Above This line For Recording Data] ----~-----

CALIFORNrA LAND TITLE OF MARIN 265222

DEED OF TRUST

THIS IS A CONSTRUCTION LOAN

03-2243-070387678-9

DEFINITIONS

Words used in multiple sections of this document are defined below and other words are defined

in Sections 3, '11, 13, 18, 20 and 21, Certain rules regarding the usage of words used in this

document are also provided in Section Hi.

(Al "Security Instrument" means this document, which is dated January 4, 2006

together with al/ Aiders to this document.

(B) "Borrower" is SCOTT C. JOLLEY, ALSO KNOWN AS SCOTT JOLLEY, A MARRIED MAN

AS HIS SOLE AND SEPARATE PROPERTY

Borrower is the trustor under this Security Instrument.

(C) "Lender" is Washington Mutual Bank« FA, a federal associatiop

lender is a B$Ulk organized and existing under the laws of

United states of America Lender's address is

400 East Main Street Stockton. CA 95290

Lender is the beneficiary under this Security Instrument.

(O) "Trustee" is CALIFORNIA RECONVEYANCE COMPANY

(E) "Note" means the promissory note signed by Borrower and dated January 4, 2006

The Note states that Borrower owes Lender Two Million one Hundred Fifty-Six

ThousAA9 & 00/100

Dollars (U.S. $ 2,156, 000« 00 ) plus interest. Borrower has promised to pay this debt

in regular Periodic Payments and to pay the debt in full not fater than January 1. 2Q36

(F) "Property" means the property that is described below under the heading "Transfer of Rights

in the Property. " (G) "loan" means the debt evidenced by the Note. plus interest, any prepayment charges and late

charges due under the Note, and all sums due under this Security Instrument, plus interest.

CALIFORNIA 32838 (OS-<lll

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(H) "Riders" means all Riders to this Security Instrument that are executed by Borrower. The following Riders are to be executed by Borrower (check box as applicable):

[i] Adjustable Rate Aider o Graduated Payment Aider o Balloon Rider

o Condominium Rider U Planned Unit Development Rider o Rate Improvement Rider

[i] Other(s) {specify) Construction Term Rider

o 1-4 Family Rider o Biweekly Payment Rider D Second Home Rider

(I) "Applicable Law" means all controlling applicable federal. state and local statutes. regulations. ordinances and administrative rules and orders (that have the effect of law) as well as all applicable final, non-appealable judicial opinions. (J) "Community Association Dues. Fees, and Assesaments" means all dues, fees, assessments and other charges that are imposed on Borrower or the Property by a condominium association. homeowners association or similar organization. (K) "EleCtronic Funds Transfer" means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, which is initiated through an electronic terminal. telephonic instrument, computer, or magnetic tape so as to order. instruct. or authorize a financial institution to debit or credit an account. Such term includes. but is not limited to. point-of-sale transfers. automated teller machine transactions, transfers initiated by telephone. wire transfers. and automated clearinghouse transfers. (l) "Escrow Items" means those items that are described in Section 3. (M) "Miscellaneous Proceeds" means any compensation. settlement, award of damages. or proceeds, whether by way of judgment. settlement or otherwise. paid by any third party (other than insurance proceeds paid under the coverages described in Section 5) for: (i) damage to, or destruction of. the Property; (ii) condemnation or other taking of all or any part of the Property; (iii) conveyance in lieu of condemnation; or (iv) misrepresentations of, or omissions as to, the value and/or condition of the Property. (N) "Mortgage Insurance" means insurance protecting lender against the nonpayment of, or default on. the loan. (0) ~Periodic Payment" means the regularly scheduled amount due for (i) principal and interest under the Note. plus (ii) any amounts under Section 3 of this Security Instrument. (P) "RESPA" means the Real Estate Settlement Procedures Act (12 U.S.C. Section 2601 et seq.) and its· implementing regulation, Regulation X (24 C.F.R. Part 3600), as they might be amended from time to time, or any additional or successor legislation or regulation that governs the same subject matter. As used in this Security Instrument. "RESPA" refers to all requirements and restrictions that are imposed in regard to a "federally related mortgage loan- even if the loan does not qualify as a "federally related mortgage loan" under RESPA. (a) "Successor In Interest of Borrower" means any party that has taken title to the Property. whether or not that party has assumed Borrower's obligations under the Note and/or this Security Instrument.

TRANSFER OF RIGHTS IN THE PROPERTY

This Security Instrument secures to lender: (i) the repayment of the loan, and all renewals, extensions and modifications of the Note; and (ii) the performance of Borrower's covenants and agreements under this Security Instrument and the Note. For this purpose, Borrower irrevocably

CALIFORNIA 32838 105-011 Page 2 of 17

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grants and conveys to Trustee. in trust. with power of sale, the following described property located in Marin County, California:

LOT 20, AS SHOWN UPON THAT CERTAIN MAP ENTITLED "MAP OF DEL MIRAMAR, IN THE COUNTY OF MARIN, CALIFORNIA", PILBD FOR RECORD AUGUST 15, 1962 IN VOLUME 11 OF MAPS, AT PAGE 33, MARIN COUNTY RECORDS.

which currently has the address of -l.JJL-'-G .... BuL ... DaE~R~T'---"'DaR~IVEIo.lU"--__ -;=_~ ________ _

[Street)

TIBURON ' California -----~~[~C~n~yl~---------

("Property Address"): 94920 [Zip Codel

TOGETHER WITH all the improvements now or hereafter erected on the property, and all easements, appurtenances, and fixtures now or hereafter 8 part of the property. All replacements and additions shall also be covered by this Security Instrument. All of the foregoing is referred to in this Security Instrument as the "Property."

BORROWER COVENANTS that Borrower is lawfully seised of the estate hereby conveyed and has the right to grant and convey the Property and that the Property is unencumbered, except for encumbrances of record. Borrower warrants and will defend generally the title to the Property against all claims and demands, subject to any encumbrances of record.

THIS SECURITY INSTRUMENT combines uniform covenants for national use and non-uniform covenants with limited variations by jurisdiction to constitute a uniform security instrument covering reel property.

UNIFORM COVENANTS. Borrower and Lender covenant and agree as follows: 1. Payment of Princ/pal, Interest, Escrow Items, Prepayment Charges. and late Charges.

Borrower shall pay when due the principal of, and Interest on, the debt evidenced by the Note and any prepayment charges and late charges due under the Note. Borrower shall also pay funds for Escrow (tems pursuant to Section 3. Payments due under the Note and this Security Instrument shall be made in U.S. currency. However. if any check or other instrument received by Lender as payment under the Note or this Security Instrument is returned to. Lender unpaid, Lender may require that any or all subsequent payments due under the Note and this Security Instrument be made in one of more of the following forms, as selected by tender: (8) cash; (b) money order; (c) certified check, bank cheek, treasurer's check or cashier's check, provided any such check is drawn upon an institution whose deposits are insured bya federal agency, instrumentality, or entity; or (d) Electronic Funds Transfer.

Payments are deemed received by Lender when received at the location designated in the Note or at such other I()cation as may be designated by Lender in accordance with the notice provisions in Section 16. Lender may return any payment or partial payment if the payment or partial payments are insufficient to bring the loan current. lender may accept any payment or partial payment insufficient to bring the Loan current, without waiver of any rights hereunder or prejudice to its rights to refuse such payment or partial payments in the future, but Lender is not obligated to apply such payments at the time such payments are accepted. If each Periodic

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Payment is applied as of its scheduled due date, then Lender need not pay interest on unapplied

funds. Lender may hold such unapplied funds until Borrower makes payment to bring the loan

current. If Borrower does not do so within a reasonable period of time, lender shall either apply

such funds or return them to Borrower •• f not applied earlier, such funds will be applied to the

outstanding prinCipal balance under the Note immediate4y prior to foreclosure. No offset or claim

which Borrower might have now or in the future against Lender shall relieve Borrower from

making payments due under the Note and this Security Instrument or performing the covenants

and agreements secured by this Security Instrument.

2. Application of Payments or Proceeds. Except as otherwise described in this Section 2,

all payments accepted and applied by lender shall be applied in the following order of priority: (a)

interest due under the Note; (b) principal due under the Note; Ie) amounts due under Section 3.

Such payments shall be applied to each Periodic Payment in the order in which it became due.

Any remaining amounts shall be applied first to late charges, second to any other amounts due

under this Security Instrument, and then to reduce the principal balance of the Note.

If Lender receives a payment from Borrower for a delinquent Periodic Payment which

includes 8 sufficient amount to pay any late charge due, the payment may be applied to the

delinquent payment and the late charge. If more than one Periodic Payment is outstanding, Lender

may apply any payment received from Borrower to the repayment of the Periodic Payments if, and

to the extent that, each payment can be paid in full. To the extent that any excess exists after the

payment is applied to the full payment of one or more Periodic Payments. such excess may be

applied to any late charges due. Voluntary prepayments shall be applied first to any prepayment

charges and then as described in the Note.

Any application of payments, insurance proceeds, or Miscellaneous Proceeds to principal

due under the Note shall not extend or postpone the due date, or change the amount, of the

Periodic Payments. 3. Funds for Escrow Items. Borrower shall pay to Lender on the day Periodic Payments are

due under the Note, until the Note is paid in full, a sum (the "Funds·) to provide tor payment of

amounts due tor: la} taxes and assessments and other items which can attain priority over this

Security Instrument as a lien or encumbrance of the Property; (b) leasehold payments or ground

rents on the Property, if any; (c) premiums for any and all insurance required by Lender under

$ection 5; and (d) Mortgage Insurance premiums, if any, or any sums payable by Borrower to

Lender in lieu of ,the payment of Mortgage Insurance premiums in accordance with the provisions

of Section 10. These items are called "Escrow Items." At origination or at any time during the

term of the Loan, lender may require that Community Association Oues, Fees, and Assessments,

if any, be escrowed by Borrower, and such dues, fees and assessments shall be an Escrow Item.

Borrower shall promptly furnish to lender all notices of amounts to be paid under this Section.

Borrower shall pay Lender the Funds for Escrow Items unless Lender waives Borrower's obligation

to pay the Funds for any or aI/ Escrow Items. Lender may waive Borrower's obligation to pay to

lender Funds for any or all Escrow Items at any time. Any such waiver may only be in writing. In

the event of such waiver, Borrower shall pay directly, when and where payable, the amounts due

for any Escrow Items for which payment of Funds has been waived by lender and, it lender

requires, shall furnish to Lender receipts evidencing such payment within such time period as

Lender may require. Bo~rower's oblfga~on to make such payments and to provide receipts shall

for all purposes be deemed to be a covenant and agreement contained in this Security tnstrument,

as the phrase ·covenant ~nd agreement" is used in Section 9. If Borrower ;s obligated to pay

Escrow Items directly, pursuant to' a waiver, and Borrower falls to pay the amount due for an

Escrow Item, Lender may exercise its rights under Section 9 and pay such amount and Borrower

shall then be obligated under Section 9 to repay to lender any such amount. Lender may revoke

CALIfORNIA 32838 105-01,

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the waiver as to any or all Escrow Items at any time by a notice given in accordance with Section 15 and, upon such revocation, Borrower shalf pay to Lender all Funds, and in such amounts, that are then required under this Section 3.

Lender may, at any time, collect and hold Funds in an amount (a) sufficient to permit Lender to apply the Funds at the time specified under RESPA, and (b) not to exceed the maximum amount a lender can require -under RESPA. Lender shall estimate the amount of Funds due on the basis of current data and reasonable estimates of expenditures of future Escrow Items or otherwise in accordance with Applicable Law.

The Funds shall be held in an institution whose deposits are insured by a federal agency, instrumentality, or entity (including Lender, if Lender is an institution whose deposits are so insured) or in any Federal Home Loan Bank.. Lender shall apply the funds to pay the Escrow Items no later than the time specified under RESPA. Lender shall not charge Borrower for holding and applying the Funds, annually analyzing the escrow account, or verifying the Escrow Items, unless Lender pays Borrower interest on the Funds and Applicable Law permits Lender to make such a charge. Unless an agreement is made in writing or Applicable law requires interest to be paid on the Funds, Lender shall not be required to pay Borrower any interest or earnings on the Funds. Borrower and Lender can agree in writing. however, that Interest shall be paid on the Funds. Lender shall give to Borrower. without charge, an annual accounting of the Funds as required by RESPA.

If there is a surplus of Funds held in escrow, 8S defined under RESPA, Lender shall account to Borrower for the excess funds in accordance with RESPA. If there is B shortage of Funds held in escrow, as defined under RESPA, Lender shall notify Borrower as required by RESPA. and Borrower shall pay to Lender the amount necessary to make up the shortage in

. accordance with RESPA. but In no more than twelve monthly payments. If there is a deficiency of Funds held in escrow, as defined under RESPA, Lender shall notify Borrower as required by RESPA, and Borrower shall pay to lender the amount necessary to make up the deficiency in accordance with RESPA, but in no more than twelve monthly payments.

Upon payment in full of all sums secured by this Security Instrument, Lender shall promptly refund to Borrower any Funds held by Lender.

4. Charges; liens. Borrower shall pay all taxes, assessments, charges, fines, and impositions attributable to the Property which can attain priority over this Security Instrument, leasehold payments or ground rents on the Property, if any, and Community Association Dues, Fees, and Assessments, if any_ To the extent that these items are Escrow Items, Borrower shall pay them in the manner provided in Section 3.

Borrower shall promptly discharge any lien which has priority over this Security Instrument unless borrower: (a) agrees in writing to the payment of the obligation secured by the lien In a manner acceptable to Lender, but only so long as Borrower is performing such agreement; (b) contests the lien in good faith by, or defends against enforcement of the lien in, legal proceedings which in Lender's opinion operate to prevent the enforcement of the Jlen while those proceedings are pending, but only until such proceedings are concluded; or (e) secures from the holder of the lien an agreement satisfactory to Lender subordinating the lien to this Security Instrument. If Lender determines that any part of the Property is subject to a lien which can attain priority oller this Security Instrument, Lender may give Borrower a notice identifying the lien. Within 10 days of the date on which that notice is given. Borrower shall satisfy the lien or take one or more ot the actions set forth above in this Section 4. .

Lender may require Borrower to pay a one-time charge for a real estate tax verification and/of reporting service used by Lender in connection with this Loan.

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5. Propeny Insurance. Borrower shall iteep the improvements now existing or hereafter erected on the PropertY insured against loss by fire, hazards included within the term "extended coverage," and any other hazards including, but not limited to, earthquakes and floods, for which Lender requires insurance. This insurance shall be maintained in the amounts (including deductible levels) and for the periods that Lender requires. What Lender requires pursuant to the preceding sentences can change during the term of the Loan. The insur8n~ carrier providing the insurance shall be chosen by Borrower subject to Lender's right to disapprove Borrower's choice, which right shall not be exercised unreasonably. Lender may require Borrower to pay, in connection with this Loan, either: (a) a one-time charge for flood zone determination, certification and tracking services; or (b) a one-time charge for flood zone determination and certification services and subsequent charges each time remap pings or similar changes occur which reasonablv might affect such determination or certification. Borrower shall also be responsible for the payment of any fees imposed by the Federal Emergency Management Agency in connection with the review of any flood zone determination resulting from an objection by Borrower.

If Borrower fails to maintain any of the coverages described above, Lender may obtain insurance coverage, at lender's option and Borrower's expense. Lender is under no obligation to purchase any part!cular type or amount of coverage. Lender may purchase such insurance from or through any company acceptable to Lender including, without limitation, an affiliate of Lender, and Borrower acknowledges and agrees that Lender's affiliate may receive consideration for such purchase. Therefore, such coverage shall cover Lender, but might or might not protect Borrower, Borrower's equity in the Property, or the contents of the Property, against any risk, hazard or liability and might provide greater or lesser coverage than was previously in effect. Borrower acknowledges that the cost of the insurance coverage so obtained might significantly exceed the cost of insurance that Borrower could have obtained. Any amounts disbursed by Lender under this Section 5 shall become additional debt of Borrower secured by this Security Instrument. These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable, with such interest, upon notice from Lender to Borrower requesting payment.

All insurance policies required by lender and renewals of such polices shall be subject to Lender's right to disapprove such policies, shall include a standard mortgage clause, and shall name Lender as mortgagee and lor as an additional loss payee and Borrower further agrees to generally assign rights to insurance proceeds to the holder of the Note up to the amount of the outstanding loan balance. Lender shall have the right to hold the policies and renewal certificates. If Lender requires, Borrower shall promptly give to Lender all receipts of paid premiums and renewal notices. If Borrower obtains any form of insurance coverage, not otherwise required by Lender, for damage to, or destruction of, the Property, such policy shall include a standard mortgage dause and shall name Lender as mortgagee andlor as an additional Joss payee.

Borrower hereby absolutely and irrevocably assigns to Lender all of Borrower's right, title and interest in and to all proceeds from any insurance policy (whether or not the insurance policy was required by Lender) that are due, paid or payable with respect to any damage to such property, regardless of whether the insurance policV is established before, on or after the date of this Security Instrument. By absolutely and irrevocably assigning to Lender all of Borrower's rights to receive any and all proceeds from any insurance policy, Borrower hereby waives, to the full extent allowed by law, all of Borrower's rights to receive any and all of such insurance proceeds.

Borrower hereby absolutely and Irrevocably assigns to Lender all of Borrower's right, title and interest in and to (a) any and all claIms, present and future, known or unknown, absolute or contingent, (b) any and all causes of action, (c) . any and all judgments and settlements (whether through litigation, mediation, arbitration or otherwise), (d) anv and all funds sought against or from any party or parties whosoever, and (e) any and all funds received or receivable in

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connection with any damage to such property, resulting from any cause or causes whatsoever,

including but not limited to, land subsidence, landslide, windstorm, earthquake, fire, flood or any

other cause. Borrower agrees to execute, acknowledge if requested, and deliver to Lender, andlor upon

notice from Lender shall request any insurance agency or company that has Issued any insurance

policy to execute and deliver to lender, any additional instruments or documents requested by

lender from time to time to evidence Borrower's absolute and irrevocable assignments set forth in

this paragraph. In the event of loss, Borrower shall give prompt notice to the insurance carrier and lender.

Lender may make proof of loss if not made promptly by Borrower. Unless Lender and Borrower

otherwise agree in writing, any insurance proceeds, whether or not the underlying insurance was

required by lender, shall be applied to restoration or repair of the Property, if the restoration or

repair is economically feasible and Lender's security is not lessened. During such repair and

restoration period, Lender shall have the right to hold such insurance proceeds until Lender has

had an opportunity to inspect such Property to ensure the work has been completed to Lender's

satisfaction, provided that such inspection shall be undertaken promptly. lender may disburse

proceeds for the repairs and restoration in a single payment or in a series of progress payments as

the work is completed. Unless an agreement is made in writing or Applicable Law requires interest

to be paid on such insurance proceeds, lender shall not be required to pay Borrower any interest

or earnings on such proceeds. Fees for public adjusters, or other third parties, retained by

Borrower shalf not be paid out of the insurance proceeds and shall be the sole obligation of

Borrower. If the restoration or repair is not economically feasible or Lender's security would be

lessened, the insurance proceeds shall be applied to the sums secured by this Security

instrument, whether or not then due, with the excess, if any, paid to Borrower. Such insurance

proceeds shall be applied in the order provided for in Section 2.

If Borrower abandons the Property, Lender may file, negotiate and settle any available

insurance claim and related matters. If Borrower does not respond within 30 days to a notice from

Lender that the insurance carrier has offered to settle a claim, then Lender may negotiate and

settle the claim. The 30-day period will begin when the notice is given. In either event, or if

Lender acquires the Property under Section 22 or otherwise, Borrower hereby assigns to Lender

(a) Borrower's rights to any insurance proceeds in an amount not to exceed the amounts unpaid

under the Note or this Security Instrument, and (b) any other of Borrower's rights (other than the

right to any refund of unearned premiums paid by Borrower) under all insurance policies covering

the Property, insofar as such rights are applicable to the coverage of the Property. Lender may

use the insurance proceeds either to repair or restore the Property or to pay amounts unpaid under

the Note or this Security Instrument, whether or not then due.

6. Occupancy. Borrower shall occupy, establish, and use the Property 8S Borrower's

principal residence within sixty days after the execution of this Security Instrument and shall

continue to occupy the Property as Borrower's principal residence for at least one year after the

date of occupancy, unless lender otherwise agrees in writing, which consent shali not be

unreasonably withheld, or unless extenuating circumstances exist which are beyond Borrower's

control. .

7. Preservation. Maintenance and Protection of the Property; Inspections. Borrower shall

not destroy, damage or impair the Property, or remove or demolish any building thereon, allow the

Property to deteriorate or commit waste on the Property. Whether or not Borrower is residing in

the Property, Borrower shall maintain the Property In good condition and repair In order to ·prevent

the Property from deteriorating or decreasing in value due to Its condition. Unless it is determined

pursuant to Section 5 that repair or restoration is not economically feasible, Borrower shall

promptly repair the Property in good and workmanlike manner if damaged to avoid further

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deterioration or damage. Lender shall. unless otherwise agreed in writing between Lender and Borrower, have the right to hold insurance or condemnation proceeds. If insurance or condemnation proceeds are paid in connection with damage to, or the taking of, the Property, Borrower shall be responsible for repairing or restoring the Property only if Lender has released proceeds for such purposes. Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed. If the insurance or condemnation proceeds are not sufficient to repair or restore the Property, Borrower is not relieved of Borrower's obligation for the .completion of such repair or restoration.

Lender or its agent may make reasonable entries upon and inspections of the Property. If it has reasonable cause, Lender may inspect the interior of the improvements on the Property . Lender shall give Borrower notice at the time of or prior to such an interior inspection specifying such reasonable cause. lender does not make any warranty or representation regarding, and assumes no responsibility for, the work done on the Property, and Borrower shall not have any · right to rely in any way on any inspection(s) by or for lender or its agent. Borrower shall be solely responsible for determining that the work is done in a gOOd, thorough. efficient and workmanlike manner in accordance with all applicable laws.

Borrower shall (a) appear in and defend any action or proceeding purporting to affect the security hereof, the Property or the rights or powers of lender or Trustee; (b) at lender's option, assign to Lender, to the extent of Lender's interest, any claims, demands, or causes of action of any kind, and any award, court judgement, or proceeds of settlement of any such claim, demand or cause of action of any kind which Borrower now has or may hereafter acquire arising out of or relating to any interest in the acquisition or ownership of the Property. Lender and Trustee shall not have any duty to prosecute any such claim, demand or caUSe of action. Without iimiting the foregoing, any such claim, demand or cause of action arising out of or relating to any interest in the acquisition or ownership of the Property may include (i) any such injury or damage to the Property including without limit injury or damage to any structure or improvement situated thereon, (ii) or any claim or cause of action in favor of Borrower which arises out of the transaction financed in whole or in part by the making of the loan secured hereby. (iii) any claim or cause of action in favor of Borrower (except tor bodily injury) which arises as a result of any negligent or improper construction, installation or repair of the Property including without limit, any surface or subsurface thereof, or of any building or structure thereon or (iv) any proceeds of insurance, whether or not requited bV Lender, payable as a result of any damage to or otherwise relating to the Property or any interest therein. Lender may apply, use or release such monies so received by it in the same manner as provided in Paragraph 5 for the proceeds of insurance.

8. Borrower's loan Application. Borrower shall be in default if, during the loan application process, Borrower or any persons or entities acting at the direction of Borrower or with Borrower's knowledge or consent gave materially false, misleading, or inaccurate information or statements to Lender (or failed to provide Lender with material information) in connection with the loan. Material representations include, but are not limited to, representations concerning Borrower's occupancy of the Property as Borrower's principal residence.

9. Protection of lender's Intere.st in" the Property and Rights Under this Security Instrument. If (a) Borrower fails to perform the covenants and agreements contained in this Security Instrument, · (b) there is a legal proceeding that might significantly affect Lender's interest in the Property and/or rights under this Security Instrument (such as a proceeding in bankruptcy, probate, for condemnation or forfeiture, for enforcement of a lien which may attain priorIty over this Security Instrument or to enforce laws or regulations), or eel Borrower has abandoned the Property, then Lender may do and pay for whatever is reasonable or appropriate to protect Lender's interest in the Property and . rights under this Security Instrument, including protecting

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andlor assessing the value of the Property, and securing andlor repairing the Property. Lender's actions can include, but are not limited to: (8) paying any sums secured by a lien which has priority over this Security Instrument; (b) appearing in court; and (c) paying reasonable attorneys' fees to protect its interest in the Property and/or rights under this Security Instrument, including its secured position in a bankruptcy proceeding. Securing the Property includes, but is not limited to, entering the Property to make repairs, change locks, replace or board up doors and windows, drain water from pipes, eliminate building or other code violations or dangerous conditions. and have utilities turned on or off. Although Lender may take action under this Section 9. lender does not have to do so and is not under any duty or obligation to do so. It is agreed that Lender incurs no liability for not taking any or all actions authorized under this Section 9.

Any amounts disbursed by lender under this Section 9 shall become additional debt of Borrower secured by this Security Instrument. These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable, with such interest, upon notice from lender to Borrower requesting payment.

If this Security Instrument is on a leasehold, Borrower shall comply with all the provisions of the lease. If Borrower acquires fee title to the Property, the leasehold and the tee title shall not merge unless Lender agrees to the merger in writing.

, O. Mortgage Insurance. If Lender required Mortgage Insurance as a condition of making the Loan, Borrower shall pay the premiums required to maintain the -Mortgage Insurance in effect. If. for any reason. the Mortgage Insurance coverage required by Lender ceases to be available from the mortgage insurer that previously provided such insurance and Borrower was required to make separately designated payments toward the premiums for Mortgage Insurance, Borrower shall pay the premiums required to obtain coverage substantially equivalent to the Mortgage Insurance previously in effect, at a cost substantially equivalent to the cost to Borrower of the Mortgage Insurance previously in effect. from an alternate mortgage insurer selected by lender. If substantially equivalent Mortgage Insurance coverage is not available, Borrower shall continue to pay to Lender the amount of the separately designated pSyments that were due when the insurance coverage ceased to be in effect. lender will accept. use and retain these payments as a non-refundable loss reserve in lieu of Mortgage Insurance. Such loss reserve shall be non-refundable, notwithstanding the fact that the Loan is ultimately paid in full. and lender shall not be required to pay Borrower any interest or earnings on such loss reserve. Lender can no longer require loss reserve payments if Mortgage Insurance coverage (in the amount and for the period that lender requires) provided by an insurer selected by Lender again becomes available, is obtained, and Lender requires separately designated payments toward the premiums tor Mortgage Insurance. If Lender required Mortgage Insurance as a condition of making the Loan and Borrower was required to make separately designated payments toward the premiums tor Mortgage Insurance, Borrower shall pay the premiums requIred to maintain Mortgage Insurance in effect, or to provide a non-refundable loss reserve, until lender's requirement for Mortgage Insurance ends in accordance with any written agreement between Borrower and Lender providing for such termination or until termination is required by Applicable Law. Nothing in this Section 10 affects Borrower's obligation to pay interest at the rate provided in the Note.

Mortgage Insurance reimburses Lender (or any entity that purchases the Note) for certain losses it may incur if Borrower does not repay the loan as agreed. Borrower is not a party to the Mortgage Insurance.

Mortgage insurers evaluate their total risk on all such insurance in force from time to time, and may enter Into agreements with other parties that share or modify their risk, or reduce losses. These agreements are on terms and conditions that are satisfactory to the mortgage insurer and the other party (or parties) to these agreements. These agreements may require the mortgage

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insurer to make payments using any source of funds that the mortgage insurer may have available (which may include funds obtained from Mortgage Insurance premiums).

As a result of these agreements, lender, any purchaser of the Note, another insurer, any reinsurer, any other entity, or any affiliate of any of the foregoing. may receive (directly or indirectly) amounts that derive from (or might be characterized as) a portion of Borrower's payments for Mortgage Insurance, in exchange for sharing or modifying the mortgage insurer's risk, or reducing losses. If such agreement provides that an affiliate of Lender takes a share of the insurer's risk in exchange for a share of the premiums paid to the insurer, the arrangement is often termed "captive reinsurance." Further:

(a) Any 8uch agreements will not affect the amounts that Borrower has agreed to pay for Mortgage Insurance. or any other terms of the Loan. Such agreementa will not increase the amount Borrower will owe for Mortgage Insurance, and they will not entitle Borrower to any refund.

(b) Any such agreements will not affect the rights Borrower has • If any - with respect to the Mortgage Insurance under the Homeowner. Protection Act of 1998 or any other law. These rights may Include the right to receive certain disclosures, to request and obtain cancellation of the Mortgage Insurance, to have the Mortgage Inaurance terminated 8utomaticaRy. and/or to receive a refund of any Mortgage Insllrance premJums that were unearned at the time of such cancellation or termination.

11. Assignment of Miscellaneous Proceeds; Forfeiture. All Miscellaneous Proceeds are hereby assigned to and shall be paid to Lender.

If the Property is damaged, such Miscellaneous Proceeds shall be applied to restoration or repair of the Property, if the restoration or repair is economically feasible and Lender's security is not lessened. During such repair and restoration period, Lender shall have the right to hold such Miscellaneous Proceeds until Lender has had an opportunity to inspect such Property to ensure the work. has been completed to Lender's satisfaction. provided that such inspection shall be undertaken promptly. Lender may pay for the repairs and restoration in a single disbursement or in a series of progress payments as the work ;s completed. Unless an agreement is made in writing or Applicable Law requires interest to be paid on such Miscellaneous Proceeds, Lender shall not be required to pay Borrower any interest or earnings on such Miscellaneous Proceeds. If the restoration or repair is not economically feasible or Lender's security would be lessened, the Miscellaneous Procee9s shall be applied to the sums secured by this Security Instrument, whether or not then due, with the excess, if any, paid to Borrower. Such Miscellaneous Proceeds shall be applied in the order provided for in Section 2.

In the event of a total taking, destruction, or loss ' in value of the Property, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with the excess, if any, paid to Borrower.

In the event of a partial taking, destruction, or loss in value of the Property in which the fair market value of the Property immediately before the partial taking. destruction, or loss in value is equal to or greater than the amount of the sums secured by this Security Instrument immediately before the partial taking, destruction, or loss in value, unless Borrower and Lender otherwise agree in writing, the sums secured by this Security Instrument shall be reduced by the amount of the Miscellaneous Proceeds multiplied by the following fraction: (a) the total amount of the sums secured immediately before the partial taking, destruction, or loss in value divided by (b) the fair market value of the Property immediately before the partial taking, destruction, or loss in value. Any balance shall be paid to Borrower.

In the event of a partial taking, destruction, or loss in value of the Property in which the fair market value of the Property immediately before the partial taking. destruction, or loss in value is

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less than the amount of the sums secured immediately before the partial taking, destruction, or loss in value, unless Borrower and Lender otherwise agree in writing, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument whether or not the sums are then due.

If the Property is abandoned by Borrower, or if, after notice by Lender to Borrower that the Opposing Party (as defined in the next sentence) offers to make an award to settle a claim for damages. Borrower fails to respond to Lender within 30 days after the date the notice is given, Lender is authorized to collect and apply the Miscellaneous Proceeds either to restoration or repair of the Property or to the sums secured by this Security Instrument, whether or not then due. "Opposing Party" means the third party that owes Borrower Miscellaneous Proceeds or the party against whom Borrower has a right of action in regard to Miscellaneous Proceeds.

Borrower shall be in default if any action or proceeding, whether civil or criminal, is begun that, in Lender'S judgement, could result in forfeiture of the Property or other material impairment of lender's interest in the Property or rights under this Security Instrument. Borrower can cure such a default and, if acceleration .has occurred, reinstate as provided in Section 19, by causing the action or proceeding to be dismissed with a ruling that, in Lender's judgement, precludes forfeiture of the Property or other material impairment of lender's interest in the Property or rights under this Security Instrument. The proceeds of any award or claim for damages that are attributable to the impairment of Lender'S interest in the Property are hereby assigned and shall be paid to Lender.

All Miscellaneous Proceeds that are not applied to restoration Of repair ot the Property shall be applied in the order provided for in Section 2.

12. Borrower Not Released; Forbearance By Lender Not a Waiver. This Security Instrument cannot be changed or modified except as otherwise provided herein or by agreement in writing signed by Borrower, or any Successor in interest ·to Borrower and Lender. Extension of the time for payment or modification of amortization of the sums secured by this Security Instrument granted by Lender to Borrower or any Successor in Interest of Borrower shall not operate to release the liability of Borrower or any Successor in Interest of Borrower. lender shall n01 be required to commence proceedings against any Successor in Interest of Borrower or to refuse to extend time for payment or otherwise modify amortization of the sums secured by this Se/?urity Instrument by reason of any demand made by the original Borrower or any Successors in Interest of Borrower. Any forbearance by Lender in exercising any right or remedy including. without limitation, Lender's acceptance of payments from third persons, entities or Successors in Interest of Borrower or in amounts less than the amount then due, shall not be a waiver of or preclude the exercise of any right or remedy. No waiver by Lender of any right under this Security Instrument shall be effective unless in writing. Waiver by Lender of any right granted to Lender under this Security Instrument or of any provision of this Security Instrument as to any transaction or occurrence shall not be deemed 8 waiver as to any future transaction or occurrence.

13. Joint and Several Uabllity; Co-signers; Successors and Assigns Bound. Borrower covenants and agrees that Borrower's obligations and liability shall be joint and several. However, any Borrower who co-signs this Security Instrument but does not execute the Note (a "co-signer"): (a) is co-signing this Security Instrument only to mortgage, grant and convey the co-signer's interest in the Property under the terms of this Security Instrument; (b) is not personally obligated to pay the sums secured by this Security Instrument; and (c) agrees that Lender and any other Borrower can agree to extend, mOdify, forbear or make any accommodations wIth regard to the terms of this Security Instrument or the Note without the co-signer's consent.

Subject to the provisions of Section 18. any Successor in Interest of Borrower who assumes Borrower's obligations under this Security Instrument in writing, and is approved by

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Lender, shall obtain all of Borrower's rights and benefits under this Security Instrument. Borrower shall not be released from Borrower's obligations and liability under this Security Instrument unless Lender agrees to such release in writing. The covenants and agreements of this Security Instrument shall bind (except as provided in Section 20) and benefit the successors and assigns of lender.

14. loan Charges. Lender may charge Borrower fees for services performed in connection with Borrower's default, for the purpose of protecting Lender's interest in the Property and rights under this Security Instrument, including, but not limited to, attorneys' fees, property inspection and valuation fees. Borrower shalt pay such other charges as Lender may deem reasonable for services rendered by lender and furnished at the request of Borrower, any Successor in interest to Borrower or . any agent of Borrower. In regard to any other fees, the absence of express authority in this Security Instrument to charge a specific fee to Borrower shall not be construed as a prohibition on the charging of such fee. Lender may not charge fees that are expressly prohibited by this Security Instrument or by Applicable Law.

If the Loan is subject to a law which sets maximum loan charges, and that law is finally interpreted so that the interest or other loan charges collected or to be collected in connection with the Loan exceed the permitted limits, then: (a) any such loan charge shall be reduced by thE} amount necessary to reduce the charge to the permitted limit; and (bl any sums already collected from Borrower which exceeded permitted limits will be refunded to Borrower. Lender may choose to make this refund by reducing the principal owed under the Note or by making a direct payment to Borrower. If a refund reduces prinCipal, the reduction will be treated as a partial prepayment without any prepayment charge (whether or not a prepayment charge is provided for under the Note.1 Borrower's acceptance of any such refund made by direct payment to Borrower will constitute a waiver of any right of action Borrower might have ariSing out of such overcharge.

15. Notices. All notices given by Borrower or Lender in connection with this Security Instrument must be in writing. Any notice to Borrower in connection with this Security Instrument shall be deemed to have been given to Borrower when mailed by first class mail or when actually delivered to Borrower's notice address if sent by other means. Notice to anyone Borrower shall constitute notice to all Borrowers unless Applicable law expressly requires otherwise. The notice address shall be the Property Address unless Borrower has designated a substitute notice address by notice to lender. Borrower shall promptly notify Lender of Borrower's change of address. If lender specifies a procedure for reporting .Borrower's change of address, then Borrower shall only report a change of address through that specified procedure. There may be only one designated notice address under this Security Instrument at anyone time. Any notice to Lender shall be given by delivering it or mailing it by first class mail to Lender's address stated herein unless Lender has designated ' another address by notice to Borrower. Any notice In connection with this Security Instrument shall not be deemed to have been given to lender until actually received by Lender. If any notice required by this Security Instrument is also required under Applicable law, the Applicable Law requirement will satisfy the corresponding requirement under this Security Instrument.

16. Governing Law; Severability; Rules of Construction. This Security Instrument shall be governed by federal law and the faw of the jurisdiction in which the Property is located. All rights and obligations contained in this Security Instrument are subject to any requirements and limitations of Applicable Law. Applicable Law might explicitly or Implicitly allow the parties to agree bV contract or it might be silent. but such silence shall not be construed as a prohibition against agreement by contract. In the event that any provision or clause of this Security Instrument or the Note conflicts with Applicable Law, such conflict shall not affect other provisions of this Security Instrument or the Note which can be given effect without the

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conflicting provision.

. As used in this Security Instrument: (a) words of the masculine gender shall mean and Include corresponding neuter words or words of the feminine gender; (b) words in the singular shall mean and include the plural and vice versa; and (c) the word "may" gives sole discreti.on without any obligation to take any action.

17. Borrower's Copy. Borrower shall be given one copy of the Note and of this Security Instrument. .

18. Transfer of the Property or 8 Beneficlallnter.st In Borrower. As used in this Section 18, "Interest in the Property" means any legal or beneficial interest in the Property, including, but not limited to, those beneficial Interests transferred in a bond for deed, . contract for deed, installment sales contract or escrow agreement, the intent of which is the transfer of title by Borrower at a future date to a purchaser.

If all or any part of the Property or any Interest in the Property is sold or transferred (or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferredl without Lender's prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if such exercise is prohibited by Applicable Law.

If Lender exercises this option, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is given in accordance with Section 15 within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower.

19. Borrower's Right to Reinstate After Acceleration. If Borrower meets certain conditions, Borrower shall have the right to have enforcement of this Security Instrument discontinued at any time prior to the earliest of: (a) five days before sale of the Property pursuant to any power of sale contained in this Security Instrument; (b) such other period as Applicable Law might specify for the termination of Borrower's right to reinstate; or (cl entry of a judgement enforcing this Security Instrument. Those conditions are that Borrower: (a) pays Lender all sums which then would be due under this Security Instrument and the Note as if no acceleration had occurred; (b) cures any default of any other covenants or agreements; (e) pays all expenses incurred in enforcing this Security Instrument, including, but not limited to, reasonable attorneys' fees, property inspection and valuation fees, and other fees incurred for the purpose of protecting Lender's interest in the Property and rights under this Security Instrument; and (d) takes such action as Lender may reasonably require to assure that lender'S interest in the Property and rights under this Security Instrument, and Borrower's obligation to pay the sums secured by this Security Instrument, shall continue unchanged. Lender may require that Borrower pay such reinstatement sums and expenses in one or more of the following forms, 8S selected by Lender: (a) cash; (b) money order; (c) certified check, bank check, treasurer's check or cashier's cheCK. provided any such check is drawn upon an institution whose deposits are Insured by 8 federal agency, instrumentality or entity; or Cd) Electronic Funds Transfer. Upon reinstatement by Borrower, this Security Instrument and obligations secured hereby shall remain fully effective as if no acceleration had occurred. However, this right to reinstate shall not apply in the case of acceleration under Section 18.

20. Sale of Note; Change of Loan Servlcer; Notice of Grievance. The Note or 8 partial interest in the Note (together with this Security tnstrument) can be sold one or more times without prior notice to Borrower. A sale might result In a change in the entity (known as the "Loan Servicer-) that collects Periodic Payments due under the Note and this Security Instrument and performs other mortgage loan servicing obligations under the Note, this Security Instrument,

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and Applicable law. There also might be one or more changes of the Loan Servicer unrelated to a sale of the Note. It there is a change of the Loan Servicer, Borrower will be given written notice of the change which will state the name and address of the new Loan Servicer, the address to which payments should be made and any other information RESPA requires in connection with a notice of transfer of servicing. If the Note is sold and thereafter the Loan is serviced by a loan Servicer other than the purchaser of the Note, the mortgage loan servicing obligations to Borrower will remain with the Losn Servicer or be transferred to a successor loan Servicer aad are not assumed by the Note purchaser unless otherwise provided by the Note purchaser.

Neither Borrower nor Lender may commence, join, or be joined to any judicial action (as either an individual litigant or the member of a class) that arises from the other party's actions pursuant to this Security Instrument or that alleges that the other party has breached any provision of, or any duty owed by reason of, this Security Instrument, until such Borrower or Lender has notified the other party (with such notice given in compliance with the requirements of Section 15) of such alleged breach and afforded the other party hereto a reasonable period after the giving of such notice to take corrective action. If Applicable Law provides a time period which must elapse before certain action can be taken, that time period will be deemed to be reasonable for purposes of this paragraph. The notice of acceleration and opportunity to cure given to Borrower pursuant to Section 22 and the notice of acceleration given to Borrower pursuant to Section 18 shall be deemed to satisfy the notice and opportunity to take corrective action provisions of this Section 20.

21. Hazardous Substances. As used in this Section 21: (a) "Hazardous Substances" are those substances defined as toxic or hazardous substances, pollutants, or wastes by Environmental Law and the following substances: gasoline, kerosene, other flammable or toxic petroleum products, toxic pesticides and herbicides, volatile solvents, materials containing asbestos or formaldehyde, and radioactive materials; (b) "Environmental Law" means federal laws and laws of the jurisdiction where the Property is located that relate to health, safety or environmental protection; (c) "Environmental Cleanup" includes any response action, remedial action, or removal action, as defined in Environmental law; and (d} an "Environmental Condition" means a condition that can cause, contribute to, or otherwise tri9ger an Environmental Cleanup.

Borrower shall not cause or permit the presence, use, .disposal, storage, or release of any Hazardous Substances, or threaten to release any Hazardous Substances, on or in the Property. Borrower shall not do, nor allow anyone else to do, anything affecting the Property (a) that is in violation of any Environmental Law, (b) which creates an Environmental Condition, or (c) which, due to the presence, use, or release of a Hazardous Substance, creates a condition that adversely affects the value of the Property. The preceding two sentences shall not apply to the presence, use, or storage on the Property of small quantities of Hazardous Substances that are generally recognized to be appropriate to normal residential uses and to maintenance of the Property (including, but not limited to, hazardous substance in consumer products).

Borrower shalt promptly give Lender written notice of (a) any investigation, claim, demand, lawsuit or other action by any governmental or regulatory agency or private party involving the Property and any Hazardous Substance or Environmental Law of which Borrower has actual knowledge, (b) any Environmental Condition, including but not limited to, any spilling, leaking, discharge, release or threat of release of any Hazardous Substance, and (e) any condition caused by the presence, use, or release of a Hazardous Substance which aqversely affects the value of the Property. If Borrower learns, or is notified by any governmental or regulatory authority, or any privete party, that any removal or other remediation of any Hazardous Substance affecting the Property is necessary, Borrower shall promptly take all necessary remedial actions in accordance with Environmental law. Nothing herein shall create any obligation on Lender for an

Environmental Cleanup.

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NON-UNIFORM COVENANTS. Borrower and Lender further covenant and agree as follows:

22. Acceleration; RemedIes. Lender shell give notice to Borrower prior to acceleration following Borrowef's breach of -any covenant or agreement in this Security Instrument (but not prior to accektratfon under Section 18 unless Appfteable Law provfdn otherwise). The notice shall specify: (a) the default: (b) the action required to oure the defauk: (cJ a date, not less than 30 days from the date the notice '8 given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified In the notice may result in acceleration of the sums secured by this Security Instrument end sale of the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to bring a court 8c11on to assert the non-existence of a default or any other defense of Borrower to acceleration and sale. If the default is not cured on or before the date specified In the notice, LendGr at its option may require immediate payment In full of all sums secured by this Security Instrument without further demand and may Invoke the power of eale and any other remedies permitted by ApplicabJe law. lender shall be entitled to collect all expenses incurred in pursuing the remedies provided in this Section 22, Including, but not limited to, reasonable attorneys' fees and costs of title evidence. If Borrower Or any successor in internt to Borrower flies (or has flied against Borrower or any successor In interest to Borrower) a bankruptcy petition under Title II or any successor title of the United States Code which provides for the curing of pre petition default due on the Note. interest at a rate determined by the Court shall be paid to Lender on p08t-petltlon aml8rS.

If lender Invokes the power of sale, Lender shall execute or cause Trustee to execute a written notice of the of the occurrence of and event of default and of lender's election to cause the Property to be sold. Trustee shall cause this notice to be recorded In each county in which any part of the Property Is located. Lender or Trustee shall mall copl.s of the notice as prescribed by Applicable Law to Borrower and to the other persons prescribed bV Applicable Law. Trustee shall give public notice of 1181. to the persons and In the manner prescribed by Applicable Law. After the time required by Applicable Law, Trustee. wIthout demand on Borrower, shall sell the Property at public auction to the highest bidder at the time and place and under the terms designated in the notice of sale in one or more parcels and in any order Trustee determines. Trustee may postpone sale of all or any parcel of the Property by public announcement at the tlma and place of any previously scheduled sale. lender or its designee may purchase the Property at any sale.

Trustee shall deliver to the purchaser Trustee's deed conveying the Property without any covenant or warranty, expresaed or implied. The redtals in the Trustee's deed shalt be prima facie evidence of the truth of the statements made therein. Trustee shall apply the proceeds of the sale in the following order: (a) to all expenses of the ~ale, Including, but not limited to, reasonable Trustee's and attorneys' fees; (b) to all sums secured by this Security Instrument; and (c) any excess to the person or persons legally entitled to it.

23. Reconveyance. Upon payment of all sums secured by this Security Instrument, Lender shall request Trustee to reconvey the Property and shall surrender this Security Instrument and all notes evidencing debt secured by this Security Instrument to Trustee. Trustee shell reconvey the Property without warranty to tl1e person or persons legally entitled to it. Lender or the Trustee (whether or not the Trustee is affiliated with Lender) may charge such person or persons 8

reasonable fee for reconveying the Property, but only if the fee charged does not exceed the fee set by Applicable law, the fee is conclusively presumed to be reasonable.

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24. Substitute Trustee. lender. at its option, may from time to time appoint a successor trustee to any Trustee appointed hereunder by an instrument executed and acknowledged by Lender and recorded in the office of the Recorder of the county in which the Property is located. The instrument shall contain the name of the original Lender, Trustee and Borrower. the book and page where this Security Instrument is recorded and the name and address of the successor trustee. Without conveyance of the Property, the successor trustee shall succeed to all the title, powers and duties conferred upon the Trustee herein and by Applicable law. This procedure for substitution of trustee shall govern to the exclusion of all other provision~ for substitution. Trustee may destroy the Note and the Security rnstrument three (3) years after issuance of a full reconveyance or release (unless directed in such request to retain them).

25. Statement of ObligatfonFee. Lender may collect a fee not to exceed the maximum amount permitted by Applicable Law for furnishing the statement of obligation as provided by Section 2943 of the Civil Code of California.

BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Security Instrument and in any Aider executed by Bom)wer and recorded with it.

x A;:;d c~ SCOTT C. JOLLEY

CALIFORNIA 12838 (05 -011 P8ge 16 of 17

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State of CALIFORNIA" )

County of <:...wt+ L.t-~ : 55. II On JCfn~ G I ~O(p ,before me. ~j l-\-&wt-~ a;;;;ttf;mn:;~:;;;-;;:ii::-:=:::::::4-C''"::"-=~=-::::;--\~ti a Notary Public in and for the State of 'eallto'nla;-'personally appeared

personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) islare subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that byhis/herltheir signature(s) on th instrument the person{s) or the entity upon behalf of which the person(s) acted, executed 'nstrument.

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CALIFORNIA 32838 (OS.()'I

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Page'7 of 17

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DESCRIPTION

ESCROW NO. 265222 JB

ALL THAT CERTAIN real property situate in the City of Tiburon, County of Marin, State of California, described below as follows:

Lot 20, as shown upon that certain Map entitled "Map of Del Miramar, in the County of Marin, California", filed for record August 15, 1962 in Volume 11 of Maps, at Page 33, Marin County Records.

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Marin County Superior Court - Public Index

http://www.marincourt.org/PublicIndex/Default.aspx[4/24/2012 1:19:32 PM]

Marin County Superior Court Public Index

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Your search yielded 3 records.You searched for: Case Number = 1002039

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Case Number Case Name Case Type Party Name Party TypeDescription

RetentionType Date Filed Date Disposed

CIV1002039SCOTT CALL JOLLEYVS. CHASE HOMEFINANCE, LLC., ET. AL.

Breach of ContractCHASE HOMEFINANCE, LLC., ADELAWARE LIM

Defendant Judgment 4/19/2010 11/16/2011


Breach of ContractCALIFORNIARECONVEYANCECOMPANY, A CALIF

Defendant Judgment 4/19/2010 11/16/2011


Breach of Contract SCOTT CALL JOLLEY Plaintiff Judgment 4/19/2010 11/16/2011

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