Vito Torchia, Jr. (SBN244687) 1 [email protected] BROOKSTONE LAW, PC 2 18831 Von Karman Ave., Suite 400 Irvine, CA 92612 3 Telephone: (800) 946-8655 Facsimile: (866) 257-6172 4 E-mail: [email protected] 5 Attorneys for Plaintiffs 6 7 SUPERIOR COURT OF THE STATE OF CALIFORNIA 8 COUNTY OF LOS ANGELES 9 BC526888 10 DOUGLAS RANDALL, an individual; Case No.: LOLITA RANDALL, an individual; MARK 11 COMPLAINT FOR: GENNARO, an individual; MANUEL 12 SEDILLOS, an individual; MICHELLE 1. INTENTIONAL PLACEMENT OF ROGERS, an individual; ANTONIO BORROWERS INTO DANGEROUS LOANS 13 HERNANDEZ, an individual; DONNA THEY COULD NOT AFFORD THROUGH COORDINATED DECEPTION, IN THE NAME 14 HERNANDEZ, an individual; LAURO OF MAXIMIZING LOAN VOLUME AND THUS ROBERTO, an individual; AMALIA PROFIT 15 ROBERTO, an individual; VINCENT COUNTl-FRAUDULENTCONCEALMENT LOMBARDO, an individual; LORRAINE 16 LOMBARDO, an individual; SHIRLEY COUNT 2- INTENTIONAL MISREPRESENTATION 17 COFFEY, an individual; DINA GARAY, an individual; JAMES FORTIER, an COUNT 3- NEGLIGENT MISREPRESENTATION 18 individual; ANGEL DIAZ, an individual; COUNT 4- NEGLIGENCE ALICE SHIOTSUGU, an individual; 19 VICENTE PINEDA, an individual; JERRY COUNT 5- UNFAIR, UNLAWFUL, AND FRAUDULENT BUSINESS PRACTICES 20 ROGGE, an individual; MICHAEL (VIOLATION OF CAL. BUS. & PROF. CODE SHAFFER, an individual; VICTORIA §17200) 21 ARCADI, an individual; DEBORAH 2; INDIVIDUAL APPRAISAL INFLATION BECKER, an individual; YOUSEF 22 LAZARIAN, an individual; LINAT COUNT 6- INTENTIONAL 23 LAZARIAN, an individual; DIANA MISREPRESENTATION BOGDEN, an individual; SHILA COUNT 7-NEGLIGENTMISREPRESENTATION 24 ARDALAN, an individual; GEORGE COUNT 8- NEGLIGENCE 25 CHRIPCZUK, an individual; ROBERT ORNELAS, an individual; LICET COUNT 9- UNFAIR, UNLAWFUL, AND FRAUDULENT BUSINESS PRACTICES ORNELAS, an individual; AMIE GA YE, an 26 (VIOLATION OF CAL. BUS.~ PROF. CODE individual; KEVIN CURTIS, an individual; §17200) .. 27 STEVEN CHAU, an individual; BIYUN 28 SITU, an individual; ROBERT GANOS, an individual; REGGIE WINANS, an COMPLAINT individual; CLEMENTA ESPARZA, an 3. MARKET FIXING 1 individual; ANDREW ESPARZA, an COUNT 10 – FRAUDULENT CONCEALMENT 2 individual; GERARDO MICHEL, an individual; BEATRIZ MICHEL, an COUNT 11 – NEGLIGENCE 3 individual; LI HUANG, an individual; COUNT 12- PRICE FIXING - VIOLATION OF WINSTON OFFER, an individual; Michael SHERMAN ACT 15 USC §1 ET SEQ. 4 Backs, an individual; SUSAN IMEL- COUNT 13- UNFAIR, UNLAWFUL, AND 5 BACKS, an individual; JOHN FRAUDLENT BUSINESS PRACTICES FEATHERSTONE, an individual; DEANA (VIOLATION OF CAL. BUS. & PROF. CODE 6 FEATHERSTONE, an individual; §17200) GUILLERMO MARTINEZ, an individual; 7 4. DECEPTION IN LOAN MODIFICATIONS SOLEDAD MARTINEZ, an individual; PEARLINE GUSTAFSON, an individual; COUNT 14- COUNT 14 : VIOLATION OF CAL. 8 CODE CIV. PROC. § 580B AND §726 JAMES GUSTAFSON, an individual; 9 PROHIBITING COLLECTION OF DEBT AFTER HECTOR PINEDA, an individual; CURTIS ELECTING TO FORECLOSE MELANCON, an individual; KENNA 10 COUNT 15 – FRAUDULENT CONCEALMENT MELANCON, an individual; DAVID 11 ZAMORA, an individual; GAVIELA COUNT 16 – INTENTIONAL ZAMORA, an individual; STEVEN MISREPRESENTATION 12 JOHNSON, an individual; James Hughes, COUNT 17 – NEGLIGENT MISREPRESENTATION 13 an individual; THOMAS BAILEY. an individual; KATHY BAILEY, an COUNT 18- RESCISSION OF CONTRACT 14 individual; LORENZO CABRERA, an AND/OR RESTITUTION ON THE GROUNDS OF individual; ROSA CABRERA, an FRAUD, AND/OR UNCONSCIONABILITY 15 individual; PEDRO QUIROZ, an individual; COUNT 19 – BREACH OF CONTRACT LUCINA QUIROZ, an individual; JAIME 16 COUNT 20- VIOLATION OF THE CRIER RULE ARCE, an individual; ANA GARCIA, an (CAL. CIV. CODE §2994G) 17 individual; JOSE CANCHOLA, an individual; DOLOROES CANCHOLA, an COUNT 21- UNFAIR DEBT COLLECTION 18 individual; EARL LUEVANO, an PRACTICES (VIOLATION OF CAL. CIV. CODE §1788 ET SEQ) 19 individual; HORACIO RAMOS MINJARES, an individual; VERONICA COUNT 22- UNLAWFUL, UNFAIR & 20 VALADEZ, an individual; DEBRA FRAUDULENT BUSINESS PRACTICES (VIOLATION OF CAL. BUS. & PROF. CODE MEDFORD, an individual 21 §17200) 22 Plaintiffs, 5. INTENTIONAL UNAUTHORIZED FORECLOSURES PURSUED IN THE NAME OF PROFIT 23 vs. COUNT 23- WRONGFUL FORECLOSURE 24 CITIGROUP INC., a Delaware Corporation; COUNT 24- UNFAIR, UNLAWFUL, AND 25 CITIBANK, N.A, a National Association; FRAUDULENT BUSINESS PRACTICES CITI RESIDENTIAL LENDING, INC., a (VIOLATION OF CAL. BUS. & PROF. CODE 26 national banking association; CITI §17200) 27 HOLDINGS, a national banking association; CITI MORTGAGE, a national banking [JURY TRIAL DEMANDED] 28 association; CITI FINANCIAL aka ONE ii COMPLAINT MAIN FINANCIAL a national banking 1 association; ASSOCIATES FIRST 2 CAPITAL CORPORATION, a national banking association; CITI HOME EQUITY, 3 a national banking association; ARGENT MORTGAGE, a Delaware Corporation; 4 ACC CAPITAL HOLDINGS; a Delaware 5 Corporation; AMERIQUEST MORTGAGE CORPORATION, a Delaware Corporation; 6 CR TITLE SERVICES, a Delaware Corporation; NATIONWIDE APPRAISAL 7 & TITLE SERVICES, INC., a Corporation 8 of unknown citizenship; CAL-WESTERN RECONVEYANCE CORPORATION, a 9 California Corporation, a Delaware 10 Corporation; and Does 1 through 1000, inclusive, 11 Defendants. 12 13 14 TABLE OF CONTENTS 15 NATURE OF ACTION ........................................................................................................................ - 1 - 16 PARTIES ............................................................................................................................................... - 7 - 17 Plaintiffs ...................................................................................................................................... - 7 - 18 19 Defendants .................................................................................................................................. - 8 - 20 Relationship of Defendants ....................................................................................................... - 15 - 21 FIRST CAUSE OF ACTION: INTENTIONAL PLACEMENT OF BORROWERS INTO 22 DANGEROUS LOANS THEY COULD NOT AFFORD THROUGH COORDINATED DECEPTION, IN THE NAME OF MAXIMIZING LOAN VOLUME AND THUS PROFIT .. - 18 - 23 24 Defendants Systematically Abused and Abandoned Industry Standard Underwriting Guidelines to Intentionally Place Unqualified Borrowers into Loans Which 25 Defendants Knew They Could Never Afford ........................................................................... - 20 - 26 Defendants Turned Substantial Profits Through Their Borrowers’ Default 27 Furthering Their Incentive to Intentionally Place Plaintiffs Into Impossible and Unaffordable Loans ............................................................................................................ - 23 - 28 iii COMPLAINT Defendants Intentionally Misrepresented, Partially Misrepresented, & Concealed 1 Highly Material Information In Order To Induce Plaintiffs to Unknowingly 2 Take Dangerous Loans So that Defendants Could Profit ......................................................... - 25 - 3 Authority to Bind .......................................................................................................... - 32 - 4 Plaintiffs Reasonably Relied on Defendants’ Numerous Deceptions in 5 Deciding to Enter into Contracts With Them ............................................................... - 33 - 6 Bank Defendants Owed Plaintiffs a Duty ..................................................................... - 36 - 7 COUNT 1: FRAUDULENT CONCEALMENT ...................................................................... - 41 - 8 COUNT 2: INTENTIONAL MISREPRESENTATION .......................................................... - 42 - 9 10 COUNT 3: NEGLIGENT MISREPRESENTATION .............................................................. - 42 - 11 COUNT 4: NEGLIGENCE ...................................................................................................... - 43 - 12 COUNT 5 : UNFAIR, UNLAWFUL, AND FRAUDULENT BUSINESS PRACTICES 13 (VIOLATION OF CAL. BUS. & PROF. CODE §17200) ....................................................... - 44 - 14 SECOND CAUSE OF ACTION: INDIVIDUAL APPRAISAL INFLATION ............................. - 46 - 15 16 COUNT 6: INTENTIONAL MISREPRESENTATION .......................................................... - 52 - 17 COUNT 7: NEGLIGENT MISREPRESENTATION .............................................................. - 53 - 18 COUNT 8: NEGLIGENCE ...................................................................................................... - 53 - 19 COUNT 9: UNFAIR, UNLAWFUL, AND FRAUDULENT BUSINESS PRACTICES 20 (VIOLATION OF CAL. BUS. & PROF. CODE §17200) ....................................................... - 55 - 21 THIRD CAUSE OF ACTION: MARKET FIXING ..................................................................... - 60 - 22 COUNT 10: FRAUDULENT CONCEALMENT .................................................................... - 70 - 23 24 COUNT 11: NEGLIGENCE .................................................................................................... - 71 - 25 COUNT 12: PRICE FIXING - VIOLATION OF SHERMAN ACT 15 USC §1 ET SEQ...... - 71 - 26 COUNT 13: UNFAIR, UNLAWFUL, AND FRAUDLENT BUSINESS PRACTICES 27 (VIOLATION OF CAL. BUS. & PROF. CODE §17200) ....................................................... - 73 - 28 FOURTH CAUSE OF ACTION: DECEPTION IN LOAN MODIFICATIONS ......................... - 74 - iv COMPLAINT 1 Defendants’ Scheme To To Extract