VINCE RABAGO LAW OFFICE

500 N. Tucson Blvd. Ste. 100 Tucson, Arizona 85716 Telephone (520) 955-9038 Facsimile (888) 371-4011

I JUI- 202111 wry

tgfirA

vince.rabagoAazbar.org
Vince Rabago AZ State Bar #015522/PCC #65796 Attorney for Plaintiff LONON F. SMITH

IN THE SUPERIOR COURT FOR THE STATE OF ARIZONA IN AND FOR THE COUNTY OF PIMA

LONON F. SMITH, Plaintiff,

VS.

Case No.

C20115279

VERIFIED COMPLAINT

(Tort Non-Motor Vehicle, Breach of Contract, Non-Classified Civil)

BANK OF AMERICA, a foreign corporation; BAC HOME LOANS SERVICING, LP FKA COUNTRYWIDE HOME LOANS SERVICING LP, a foreign limited partnership; JOHN DOES 1-10; JANE ROES, 1-10; ABC CORPORATIONS 1-10; XYZ LIMITED LIABILITY COMPANIES 1-10; AND 123 PARTNERSHIPS 1-10, ) Defendants. ) ) ) ) )

KYLE A. BRYSON
Assigned to Judge

GENERAL ALLEGATIONS

Comes now the Plaintiff Lonon F. Smith, through undersigned counsel, and alleges the following claims for relief, and upon information and belief, alleges and avers the following:
PARTIES

1. Plaintiff Lonon F. Smith is a married man who owns a home at 1138 N. Jones, Tucson, AZ 85716 in Pima County, Arizona (the "Property"). 1

2. The subject of this lawsuit concerns certain real propertyiocated at 1138 N. Jones, Tucson, AZ 85716 in Pima County, Arizona (the Property), loans made to Plaintiff, and efforts by Defendants to foreclose by selling the Property at a Trustees Sale. 3. BAC HOME LOANS SERVICING, LP and/or BAC HOME LOANS SERVICING LP FKA COUNTRYWIDE HOME LOANS SERVICING LP ("BAC HOME LOANS" and/or "BAC"), is a foreign limited partnership, which is a loan servicing corporation that does business in Pima County, Arizona, and services Mr. Smith's mortgage loan(s), which are secured by the home listed in Paragraph 1. BAC HOME LOANS is a subsidiary of BANK OF AMERICA. 4. BANK OF AMERICA N.A. (BOFA) is a federally chartered banking institution headquartered in Charlotte, N.C., and is registered to do business in the State of Arizona as a foreign corporation. 5. BAC HOME LOANS is an agent of BOFA. 6. Defendants JOHN DOES 1-10, JANE ROES 1-10, ABC CORPORATIONS 1-10, XYZ LIMITED LIABILITY COMPANIES 1-10, and 123 PARTNERSHIPS 1-10, are individuals and business entities whose true names and domiciles are unknown, each of which was responsible for making representations to Plaintiff, acted in or was responsible for handling Plaintiffs loan accounts and/or carrying out any trustee's sale. 7. Plaintiffs will amend the Complaint as the identities of other parties liable for Plaintiffs claims become known. JURISDICTION AND VENUE 8. Jurisdiction and venue is proper in Pima County, Arizona pursuant to A.R.S. 12-401. 9. This Court has subject matter over the claims. 10. The demand or value of the property in controversy, exclusive of interests or costs, meets the Court's jurisdictional limits.

BACKGROUND

11.At all pertinent times, Mr. Smith has been the owner of the Property, commonly known as 1138 N. Jones, Tucson, AZ 85716 (also referred to as "Plaintiffs Home"). 12.Brian McClain (McClain) is an authorized agent for Mr. Lonon F. Smith in relation to the Property, and Mr. Smith's related loans seryiceid by BAC HOME LOANS. For purposes of this complaint, when referring to actions experienced and/or observed by and/or taken by Mr. Smith, this includes the same by Mr. McClain acting on behalf of Mr. Smith. 13.McClain is intimately familiar with the property and the loan accounts, is responsible for overseeing the Property and making loan payments, etc., to BAC HOME LOANS on behalf of Mr. Smith. 14.On or about March 31, 2006, a Deed of Trust was recorded at Pima County Recorders Office at Docket No. 12773 and Page No. 6671 (the "Deed of Trust"). (Exhibit A.) 15.The Deed of Trust names Plaintiff as Trustor. (Exhibit A.) 16.The Deed of Trust names Mortgage Electronic Systems Inc. (MERS), a Delaware Corporation, as Beneficiary. The Deed of Trust also purports to assert that MERS is acting solely as nominee for the lender. The Deed of Trust lists "MIN" number as being 100129300000100444. 17.The Deed of Trust names Consolidated Lenders Corporation, an Arizona Corporation, as the lender. 18.This Deed of Trust secured a promissory note in the amount of $220,500.00 for the purchase of the property. 19.On or about October 27, 2006, Mr. Smith obtained a second mortgage (line of credit) in the amount of $25,000.00. 20.The Deed of Trust securing this second loiriwwas recorded on October 27, 2006 at Pima County Recorders at Docket 12919, at Page No. 1812. This Deed of Trust for the second loan lists MERS as the beneficiary, purportedly acting solely as nominee for Countrywide Bank, N.A. (Exhibit B.)

21. Defendant BAC Home Loans is the loan servicer that handles Mr. Smith's loans secured by the address listed above. 22. Mr. Smith's wife unexpectedly died on 9-26-2008. Her death caused financial hardship. 23. Mr. Smith applied for a loan modification from BAC Home Loans after his wife died. 24. On information and belief, BAC HOME LOANS solicited and/or encouraged Mr. Smith to apply for a loan modification. 25. On June 23, 2009, MERS, as the beneficiary under the Deed of Trust for the first loan, substituted RECONTRUST CO., N.A, as trustee, and this instrument was recorded on June 25, 2009, in official Pima County records at the Pima County Recorder's office at Docket No. 13587, at Page 3770. (Exhibit C.) 26. On June 23, 2009, RECONTRUST Co., N.A executed a Notice of Trustee's Sale, listing the beneficiary as MERS, 400 Countrywide Way, SV-35, Simi Valley, CA, 93065, and this instrument was recorded on June 25, 2009, in Pima County Records at the Pima County Recorder's Office records at Docket No. 13587, at Page 3771.
(Exhibit D.)

27. On information and belief, after the Notice of Trustee's Sale was recorded on June 25, 2009, BAC HOME LOANS ceased sending monthly statements to Plaintiff. 28. During 2009, BAC HOME LOANS and/or BOFA asked for financial information, and despite being sent such information, apparently lost the paperwork multiple times. Mr. Smith sent copies of said financial information and paperwork to BAC HOME LOANS . 29. BAC HOME LOANS granted a loan modification to Mr. w Smith in early 2010. Mr. Smith formally executed the modification agreement and returned it to BAC HOME LOANS, which received the agreement. McClain primarily handled the processing of this loan modification with BAC HOME LOANS on Mr. Smith's behalf. (Exhibit E.) 30. BAC HOME LOANS sent the approved loan modification agreement on December 28, 2009, and Mr. Smith executed the modified loan agreement on January 4, 2010. (Exhibit
E.)

and/or BOFA multiple times.

31. Mr. Smith via McClain made timely payments on the modified loan agreement based on the new payment amount. (Exhibit F.) 32. At all times, Mr. Smith was ready, willing and able to pay the correct payments on the modified loan agreement and the second mortgage on the Property with a correct accounting of the modified loan account. 33. On various BAC HOME LOANS monthly statements to Plaintiff in 2010, BAC HOME LOANS included notices in the statements-informing Plaintiff that if he and BAC "had entered into an agreement to address [the] monthly payments, please make payments in accordance with this agreement." (Exhibit G.) 34. On information and belief, after the loan was modified, BAC HOME LOANS thereafter mishandled and erroneously miscoded the new payments on the modified loan back to 2009. It all went downhill from there. 35. Eventually, BAC HOME LOANS rejected and/or misapplied various correct payments and yet sought to impose late fees for payments which it had improperly and/or erroneously rejected from Mr. Smith. 36. As a result of the processing and accountinerrors, BAC HOME LOANS eventually declared the loan to be in default and purportedly gave notice that it was accelerating the loan on three (3) separate and successive dates in 2010. These Notices were sent on June 25, 2010, July 27, 2010, and August 16, 2010. 37. On these three different Notices of Intent to Accelerate, BAC HOME LOANS demanded from Mr. Smith significantly different amounts due as the alleged balance due in arrears, thereby evidencing that it was not correctly computing arrears or competently managing the account. 38. On the Notice of Intent to Accelerate dated June 25, 2010, BAC HOME LOANS declared that $16,827.73 was owed and in arrears, with the amounts allegedly owed for monthly charges as two separate line items as due August 1, 2009 and owing $11,028.32, and on April 1, 2010, owing $4,169.88, along with purported late charges for February 1, 2010, for $150.72. (Exhibit H.)
5

39. On BAC HOME LOANS June 28, 2010, monthly statement to Plaintiff, the statement showed a different amount owed in arrears of allegedly $15,163.94. (Exhibit I.) 40. On the Notice of Intent to Accelerate dated4uly 27, 2010 4 BAC HOME LOANS declared that $3,255.41 was owed and in arrears, but the dates and amounts owed for monthly charges was changed, with a monthly charge owed for February 1, 2010 for $8660.82 and purported late charges for February 1, 2010 for $160.47 and for July 1, 2010, for $53.49. (Exhibit J.) 41. On the Notice of Intent to Accelerate dated August 16, 2010, BAC HOME LOANS declared that it was actually $4,730.60 was owed and in arrears, showing monthly charges of $1,443.47 due for July 1, 2010, and $1483.22 owed for August 1, 2010, along with a late charge of $53.49 showing for July 1, 2010, and a total amount of late charges of $160.47 and an unspecified charge for "uncollected costs" in the amount of $1,589.95. (Exhibit K.) 42. On or about this period of time BAC HOME LOANS had locked Plaintiff out of the BAC computer account system and thus Plaintiff had no access to view his account. 43. Despite already having a loan modification agreement with Plaintiff that BAC HOME LOANS refused to abide by, BAC HOME LOANS thereafter sent three different loan modification applications to Plaintiff by both regular mail and Federal Express on three separate dates, July 24, 2010, July 27, 2010, and July 29, 2010. All three included a letter dated July 24, 2010. (Exhibit Y.) 44. After Mr. Smith presented numerous complaints to BAC HOME LOANS, including supervisors, via his agent Brian McClain, and on informition and belief, BAC HOME LOANS subsequently took monies from the loan escrow account to pay certain arrears, ostensibly to stop the scheduled foreclosure sales (trustee sale) that was still pending since June 25, 2009. 45. BAC HOME LOANS either on its own or via the trustee RECONTRUST CO. N.A., canceled the pending Notice of Trustee's Sale on June 23, 2010. This instrument was

executed on June 23, 2010, and was recorded on June 30, 2010, in Pima County Recorder's records at Docket No. 13841, at Page 5519.
(Exhibit L.)

46. Mr. Smith, via his agent Mr. McClain, continued to seek redress from BAC HOME LOANS, demanding a correct accounting of the arrears and demanding a detailed audit o the loan account. On information and belief, BAC Home Loans compounded their errors by adding late fees for payments that BAC itself incorrectly rejected. 47. On information and belief, BAC HOME LOANS and/or BOFA made various representations to Mr. Smith and/or his agent McClain that they would correct the problems with the loan account. Based on these representations, various improvements to the Property were made by Plaintiff. 48. On information and belief, to this date, BAC has not properly processed the accepted lo modification after BAC received the signed loan modification in early 2010. 49. On information and belief, as has been previously detailed for BAC HOME LOANS on numerous occasions via telephone by Mr. Smith's agent (Mr. Brian McClain), there have been many accounting errors and account processing failures by BAC on the primary mortgage loan account. 50. BAC has not explained the numerous accounting problems, apparent processing problems and failures leading to incorrectly posted billings, incorrect crediting payment for past bills that should not have been billed due to an APPROVED AND PROCESSED loan modification. BAC also regularly refused to memorialize communications.
51. BAC stopped accepting payments with the May 2010 payment (they returned it), yet

charged Mr. Smith late fees for this and other payment(s). 52. On information and belief, BAC HOME LOANS then apparently "cooked" the books with the account, seemingly in order to take the property out of foreclosure, but did not actually correct their errors with the account, sticking Mr. Smith with improper late fees due to their own rejection of payments, and a hijacked escrow account due to their acts. 53. At that point, BAC HOME LOAN customer service representatives picked up from there with bad information, then inexplicably insisted that Mr. Smith start making payments fo
7

July 2010. This was inexplicable because BAC had never cashed the May 2010 payment and Mr. Smith never made the June 2010 payment. 54. On information and belief, BAC HOME LOAN'S electronic account records falsely show that a May and a June payment had been made by Plaintiff, when in fact, Plaintiff did not make such payments. On information and belief, this was done by someone at BAC HOME LOAN to manipulate their own computer system, and/or to work around internal software limitations, in order to stop the pending foreclosure, but BAC then apparently illegally stripped money from Plaintiff's escrow account to show that payments had been made by Plaintiff, when Plaintiff had not made those payments. 55. With May 2010 and June 2010 payments apparently falsified in BAC's electronic system, and with continued adjustments and miscellaneous postings that were made to the account through August, 2010, Mr. Smith (via agent) requested a high-level audit of the account. There have been no audit results, if any, provided to Plaintiff.

56. At no point did Mr. Smith refuse to make payments UNTIL BAC HOME LOANS
apparently cooked the books. Once the books were altered by Defendants, there was no way Mr. Smith could send another payment on the 1st or 2nd mortgage in good faith. 57. Basically, BAC stopped accepting payments for a period of time due to their errors and when BAC again demanded payments, the accounting was erroneous and Mr. Smith's trust was shattered. 58. To no avail, Mr. Smith has repeatedly asked for BAC HOME LOANS to fix their selfcreated errors with the account(s) and to correctly process the payments and also account for previously misapplied payments, and correct the erroneous late fees, etc. 59. On November 23, 2010, BAC HOME LOANS SERVICING LP FKA COUNTRYWIDE HOME LOANS SERVICING LP, purporting to act as "the undersigned present beneficiary under that certain Deed of Trust dated 03/24/06 and recorded 03/31/06 as Recording No./Book-Page DK 12773 PG 6671 , of Official records of Pima County. . . ." (the Deed of Trust for the first loan), appointed Michael A. Bosco, Attorney at Law, as the Successor Trustee under that Deed of Trust. This instrument titled Notice of
8

Substitution of Trustee was recorded on November 29, 2010, in official Pima County Records at Pima County Recorder's Office records at Docket No. 13944, at Page 1754.
(Exhibit M.) The Notice of Substitution of Trustee was signed November 23, 2010, by Jennifer Hamlin, purportedly signing by "Limited Power of Attorney." (Exhibit M.)

60.On November 23, 2010, Michael A. Bosco, purporting to act as the Successor Trustee of the "Deed of Trust ... executed by Lonon F. Smith ... dated March 24, 2006 and recorded 03/31/06 as Recording No./Book-Page DK 12773 PG 6671 of Official records of the County Recorder of Pima County. . ." (the Deed of Trust for the first loan), executed a Notice of Trustee's Sale, listinalle."Current Beneficiary" as BAC HOME LOANS SERVICING LP FICA COUNTRYWIDE HOME LOANS SERVICING LP," do the servicer Bank of America/Fidelity do Fidelity National Foreclosure Solutions, 1270 Northland Heights Rd., Ste. 200, Mendota Heights, MN, 55120, and this instrument
was recorded on November 29, 2010, in Pima County Records at the Pima County Recorder's office at Docket No. 13944, at Page 1755.
(Exhibit N.) The sale date was

scheduled for 2/28/2011. 61. On or about November 30, 2010, BAC HOME LOANS sent a letter to Plaintiff advising that he was in serious default and that the account was being sent to a Foreclosure Review Committee. (Exhibit 0.) 62. On or about December 2, 2010, Michael A. Bosco and Tiffany and Bosco sent a letter to Plaintiff with a good faith estimate of the amounts owed and a notice of breach, referring to a deed of trust dated March 24, 2006. (Exhibit P.) 63.On or about December 30, 2010, Mr. Smith via his agent Mr. McClain sent a letter to the Trustee Tiffany & Bosco detailing BAC's errors and mishandling of the account, and requesting a correct accounting of the loan account. (Exhibit Q.) 64.On January 5, 2011, MERS, acting as Nominee for Consolidated Lenders Corporation, recorded a Corporation Assignment of Deed of Trust granting and assigning all beneficial interest "under that Deed of Trust dated 3/24/2006 executed by Lonon F. Smith ... and
recorded on 3/31/06 at Recording No./Book:Page DK 12.773 PG 6671 of Official records
9

of Pima County. . . ." to BAC HOME LOANS SERVICING LP FKA COUNTRYWIDE HOME LOANS SERVICING LP. (Exhibit R.) This instrument was recorded on January 5, 2011, in Pima County Recorder's records at Docket No. 13969, at Page 1024.

(Exhibit R.) This Corporation Assignment of Deed of Trust was executed on December
30, 2010, as evidenced by the Notary, by Jennifer Hamlin, purporting to act as the "Assistant Secretary for MERS, Inc." and the instrument included language claiming that the "Effective Date" of the instrument was "11/16/2010". (Exhibit R.) 65. Jennifer Hamlin, who appointed Michael A. Bosco as Successor Trustee in the Notice of Substitution recorded November 29, 2010, by a purported Limited Power of Attorney for BAC HOME LOANS SERVICING LP FKA COUNTRYWIDE HOME LOANS SERVICING LP, and who subsequently, on December 29, 2010, executed a Corporation Assignment of Deed of Trust from MERS to BAC HOME LOANS SERVICING LP FKA COUNTRYWIDE HOME LOANS SERVICING LP, acting as Assistant Secretary for MERS Inc., is in reality a paid employee of Michael A. Bosco's law firm Tiffany & Bosco. This fact was concealed and not disclosed in recorded documents. (Exhibit S.) 66. On or about January 10, 2011, the Trustee Tiffany & Bosco replied by merely sending, among other things, a loan history compiled by BAC HOME LOANS and repeating figures that BAC HOME LOANS had previously asserted were the arrears and amount due. (Exhibit T.) 67. Plaintiff and/or his agents and/or attorneys have sought cancellation of the Notice of Trustee's Sale recorded on November 29, 2010, as well as an accounting of Plaintiff's first loan (the loan pending foreclosure) by calling and/or writing to BAC HOME LOANS SERVICING and/or the office of the alleged Successor Trustee, Michael A. Bosco, but to no avail. (Exhibit U.) 68. The trustee sale (foreclosure) scheduled for February 28, 2011, has been delayed various occasions, but the sale has not been canceled despite initial verbal representations from a BAC HOME LOANS representative that the trustee sale scheduled for April 8, 2011 had been canceled.
10

69. On or about March 14, 2011, BAC HOME LOANS sent plaintiff a letter in response to his complaints stating that they had received his request and were in the process of obtaining the documentation necessary to address his questions, and that he could expect "a complete response" within 20 business days. (Exhibit V.) 70. Because of BAC's and BOFA's misconduct, errors, negligence, and/or willful conduct, Plaintiff has attempted to purse a short sale of the property, and has made three attempts, at least one of which has been bungled as the result of BAC's and/or BOFA's errors and/or because of the defendants' flawed computer processing system for accounts where modification is sought and/or which require loss mitigation. 71. On June 22, 2011, MERS, listing an address of 3300 S.W. 34 th Avenue, Ste. 101, Ocala, FL, 34474, and as the "holder of the Deed of Trust" previbusly recorded on March 31, 2006 in Pima County Recorder records at Docket No. 12773, at Page No. 6671, executed a purported Assignment of the Deed of Trust dated "3/24/2006" to BAC HOME LOANS SERVICING LP, FKA COUNTRYWIDE HOME LOANS SERVICING LP, which was recorded on June 30, 2011, in the Pima County Recorder's records at Sequence No. 20111810521. (Exhibit W.) 72. On or about July 18, 2011, a letter from BOFA was received at the Property, informing Mr. Smith that the servicing of his loan (the first loan), had been transferred from BAC HOME LOANS SERVICING LP to BOFA. (Exhibit X.) 73. This BOFA letter informing a transfer in servicing to BO 'A states that according to BOFA's records dated July 6, 2011, the transfer of the servicing on Plaintiff's loan account was effective July 1, 2011. This letter was not mailed until later and was just received on or about July 18, 2011. This document also claims that the true owner of the loan is actually "FHMLC S/A-3-DAY ARC-125949". (Exhibit X.) 74. The Trustee's Sale of Plaintiff's Property, based on the Notice of Trustee's Sale recorded on November 29, 2010, is currently scheduled for July 21, 2011, at 11:30 a.m., outside the Pima County Superior Court, East Entrance, Tucson, Pima County, Arizona.

11-

COUNT ONE (Violation of Arizona Laws and Deed of Trust Statutes) 75. Plaintiff incorporates and realleges each of the allegations contained in all of the preceding paragraphs above. 76. The Notice of Trustee Sale and Notice of Substitution of Trustee executed on November 23, 2010 and recorded on November 29, 20 -t0 in Pima Cgunty Official records, are invalid and illegal because BAC HOME LOANS SERVICING LP, FKA COUNTRYWIDE HOME LOANS SERVICING LP had no interest, recorded or otherwise, in the property at the time that these Notices were executed and recorded. 77. In fact, the purported Corporation Assignment of Deed of Trust executed by Jennifer Hamlin as Assistant Secretary for MERS to BAC HOME LOANS SERVICING LP, FKA COUNTRYWIDE HOME LOANS SERVICING LP transferring all beneficial interest in the Deed of Trust recorded March 31, 2006, was not executed until later on December 29, 2010 -- and was not even recorded until January 5, 2011. Thus, even assuming that the Corporation Assignmentiscorded January 5, 2011, could be valid, it came more than a month later and was effective no earlier than December 29, 2010. 78. The purported "Effective Date" of 11/16/2010 listed on the Corporation Assignment of Deed of Trust signed on 12/29/2010, fraudulently purported to make retroactive a legal document that was not even executed until on December 29, 2010. 79. The Notice of Trustee Sale and Notice of Substitution of Trustee executed on November 23, 2010 and recorded on November 29, 2010 in Pima County Official records, and the Corporation Assignment of Deed of Trust executed on December 29, 2010 and recorded on January 5, 2011, are invalid and illegal because they erroneously refer to a Deed of Trust "dated March 24, 2006." (See Exhibits M and N.) In fact, Plaintiff executed the Deed of Trust for the first loan on March 27, 2006. (Exhibit A.) Arizona law requires strict and correct compliance with respect to the description and identification of the property and legal interest involved.

12

80. Plaintiff is further informed and believes that BAC HOME LOANS SERVICING LP, FKA COUNTRYWIDE HOME LOANS SERVICING LP is not the current creditor and/or owner of the loan, as evidenced by the most recent correspondence from BOFA, stating that "FHMLC S/A-3-DAY ARC-125949" is the holder of the note (and therefore holds the beneficial interest). (Exhibit X.) If the Note has been transferred to FHMLC S/A-3-DAY ARC-125949, the Deed of Trust would have followed any transfer of the Note and BAC HOME LOANS SERVICING LP, FKA COUNTRYWIDE HOME LOANS SERVICING LP would not have any right to foreclose because it would have lost any beneficial interest in the Deed of Trust as the result of such transfer. 81. If BAC HOME LOANS SERVICING LP, FKA COUNTRYWIDE HOME LOANS SERVICING LP is acting as the beneficiary when instead the real beneficiary is concealed from the official property records of Pima Cotinty at the Pima County Recorders Office, this further violates the provision A.R.S. 33-804 against having secret or "blind" real estate trusts where the true owner(s) are concealed from the public, by requiring that all beneficiaries must acknowledge a substitution of a trustee in writing. 82. For these and other reasons, the currently scheduled trustee sale is illegal and invalid and should be enjoined. 83. Plaintiffs are entitled to damages resulting from these actions and from Defendants' violations of Arizona law. COUNT TWO (Breach of Contract) 84. Plaintiff incorporates and realleges each of the allegations contained in all of the preceding paragraphs above. 85. By their promises and representations, Defendant BAC HOME LOANS entered into a valid modified loan agreement. 86. Plaintiff performed his obligations under the agreement.

13

87. Defendant BAC HOME LOANS and the beneficiary materially breached their agreement. 88. By failing to properly handle the loan account and the correct payments submitted by Mr. Smith pursuant to the contract, the deed of trust, and Arizona law, Defendants BAC HOME LOANS breached the contract. 89. By issuing trustee's sale notices with actual and/or constructive knowledge of their incorrect handling of the account and their demand for erroneous arrears, BAC HOME O LOANS has breached the contract and also violated Ariz - na law. 90. Also, by their promises that they would fix the problems with the loan account, Defendants BAC HOME LOANS entered into a contract to fix the errors with the erroneous billings and late payments, rather than proceed with a trustee's sale. 91. Adequate consideration for such contract exists because Plaintiffs affirmatively continued their efforts to try to resolve the errors and in fact also made certain improvements to the Property in reliance on Defendants' representations. 92. Defendants have also materially breached the Deed of Trust by attempting to sell Plaintiff's property in violation of applicable Arizona law. 93. Plaintiff is entitled to damages resulting from Defendant: breaches. COUNT THREE (Breach of Implied Covenant of Good Faith and Fair Dealing) 94. Plaintiff incorporates and realleges each of the allegations contained in all of the preceding paragraphs above. 95. Under the Deed of Trust and Note between Plaintiff and Defendants BAC HOME LOANS, there is an implied covenant of good faith and fair dealing. 96. Defendants also had a duty of good faith and fair dealing pursuant to their contractual agreement to fix the errors with the account:

14

97. By failing to properly fix the errors with the account and instead proceeding with a trustees' sales, Defendants BAC HOME LOANS and/or BOFA breached the implied covenant of good faith and fair dealing. 98. Defendants have knowingly established and fostered a systemic process of luring its customers into a Byzantine loan modification process that is not designed to result in successful loan modification agreements but instead to continue earning BAC HOME LOANS servicing fees while shuttling customers toward foreclosure, which constitutes a breach of the covenant of good faith and fair dealing. 99. Plaintiff is entitled to damages resulting from these breaches of the implied covenant of good faith and fair dealing. COUNT FOUR (Promissosy Estoppel) 100. Plaintiff incorporates and realleges each of the allegations contained in all of the

preceding paragraphs above. 101. In addition, on information and belief, BAC HOME LOANS promised on o

about March 14, 2011, they would obtain documents to address his questions and woul ' provide a complete response within 20 days. (Exhibit V.) Despite promising to conduc an inquiry and respond completely within 20 days, no response has occurred to date.

102.

As a result of their promises that they would fix the errors with the account an '

that a foreclosure sale would not occur, and that they would respond to Mr. Smith's communications regarding the problems with the account within 20 days, Defendants ar estopped from claiming that any trustee sale is valid and/or will result in a valid sale o the Property. 103. The trustee sale set for July 21, 2011 is invalid and must be enjoined.

15

COUNT FIVE

(Statutory Consumer Fraud) 104. 105. Mr. Smith incorporates the above as though set forth herein. The act, use or employment by any person of any deception, deceptive act o

practice, fraud, false pretense, false promise, misrepresentation, or concealment, suppression or omission of any material fact with intent that others rely upon suc concealment, suppression or omission, in connection with the sale or advertisement o any merchandise whether or not any person has in fact been misled, deceived or damage thereby, is declared to be an unlawful practice under Arizona state law. 106. Defendants made several material misrepresentations that Mr. Smith had bee

approved for a loan modification, but later acted in such a manner as to result i effectively denying that such loan modification was valid. 107. Defendants knowingly took and negotiated payments from Mr. Smith

accordance with the represented terms of the Agreement, while fully intending t foreclose on Mr. Smith's Property instead. 108. Defendants utilized unlawful and deceptive methods to commence an unlawfu

Trustee Sale and thereafter utilized a deceptive scheme in efforts to facilitate and/o complete the illegal sale, including but not limited to having Jennifer Hamlin execute tardy Corporation Assignment of Deed of Trust purported to be "effective" more than month before the Assignment, and by having Hamlin, a paid employee of the allege Successor Trustee, act in dual roles for both BAC HOME LOANS and MERS in th e same transaction which involved her employer having fiduciary trust duties. 109. Defendants' deceptive acts and practices, fraud, false pretense, false promises

and misrepresentations were made in connection with the sale and advertisement o merchandise, as defined in A.R.S. 44-1521. 110. Mr. Smith reasonably relied on Defendants' deceptive acts and practices, fraud,

false pretense, false promises, and misrepresentations, which were made in connectio

16

with the sale and advertisement of merchandise. Defendants' acts violated A.R.S. 44 1522. 111. Defendants' failure to honor the terms of the Agreement, when it was clear tha

Mr. Smith had fully performed his end of the bargain, constitutes a deceptive act an ' practice. 112. Defendants intended for Mr. Smith to rely on their deceptive acts and practices

false pretense, false promises, and misrepresentations, and he reasonably relied on same and in so doing, Defendants violated A.R.S. 44-1522. 113. Mr. Smith consequently relied upon Defendants' deceptive acts and practices,

false pretense, false promises, and misrepresentations as alleged above. 114. Defendants' actions and Mr. Smith's reasonable reliance has proximately cause

damages to Plaintiff, including but not limited to, being deprived of an approved lo modification and the benefits of said modification and being deprived of a correc accounting of his loan account. Mr. Smith j3as.also suffered accrued late fees and interes on the allegedly delinquent amounts outstanding on his loan. Mr. Smith has also suffere damage resulting from the inability to fully utilize his property and/or finis improvements due to the actions of Defendants and the uncertainty caused by thei repetitive and wrongful efforts to foreclose. Mr. Smith has been damaged by having i s deal with the damage to his credit from the wrongful conduct of Defendants and b having to retain counsel to stop the illegal sale. 115. Plaintiff is entitled to damages resulting from these acts, in an amount to b

proved at trial.

COUNT SIX
(Negligent Misrepresentation)

116. 117.

Mr. Smith incorporates the above as though set forth herein. BOFA and/or BAC HOME LOANS represented and promised to procee

according to the modified loan agreement.

118.

BOFA and/or BAC HOME LOAN_S__represented and promised that the modifie

loan agreement would take the place of the original loan agreement. 119. BOFA and/or BAC HOME LOANS expressly and/or impliedly represented an

promised that the mutual agreement to the modified loan agreement would terminate an foreclosure of Plaintiff's property. 120. BOFA and/or BAC HOME LOANS represented and promised that they woul

work to properly fix their mistakes in handling Plaintiff's loan account. 121. BOFA and/or BAC HOME LOANS represented and promised that the Plaintiff'

dispute and complaints regarding the mishandling of the loan account would be directe to the appropriate parties at BOFA and/or BAC HOME LOANS. 122. Each of said representations and promises were false when made, and/or BOF

and/or BAC HOME LOANS negligently made such false representations and promise and/or failed to exercise reasonable care or competence to ascertain the truth and/or t correct their misrepresentations. 123. 124. Plaintiff was ignorant of the falsity of the representations and promises. Said representations and promises were material, and Plaintiff would not hav

refrained from taking other action in the absence of such representations and promises. 125. BOFA and/or BAC HOME LOANS intended that Plaintiff act upon sai

representations and promises. 126. Plaintiff had a right to rely, and did rely to his detriment on the representation

made by BOFA and/or BAC HOME LOANS, including, among other things, followin instructions to make payments, making improvements to the property, refraining fro taking other action to bring the original debt current, and refraining from selling th property at fair market value. 127. 128. Plaintiff has been damaged thereby in an amount to be proved at trial. Plaintiff is entitled to relief against BOFA and/or BAC HOME LOANS in th

form of damages and/or such other relief is available at law or at equity, to be elected b Plaintiffs in due course in this case.
1

129.

BOFA and/or BAC HOME LOANS have acted jointly and/or in concert. BOF

and/or BAC HOME LOANS are jointly and severally liable for all of Plaintiff's damages.

COUNT SEVEN (Breach of Fiduciary Duty)

130. 131. Mr. Smith incorporates the above as though set forth herein. BAC HOME LOANS is and/or was the servicer for Plaintiff's loan and for

second mortgage loan as well. 132. As servicer for Plaintiff's loan, BAC HOME LOANS received and accepte
d

payments on behalf of other parties, including but not limited to BOFA, and/or othe parties. 133. At the relevant times alleged, BAC HOME LOANS was acting as servicer for th

beneficiary and providing Plaintiff's payments to the beneficiary and/or purporte investors who secretly own Plaintiff's loan. 134. When accepting payments from Plaintiff on behalf of other parties and/or entities

BAC HOME LOANS SERVICING acted in the capacity of an escrow agent unde Arizona law and therefore owed a fiduciary duty to Plaintiff. 135. BAC HOME LOANS undertook duties above and apart from its role as service

and negotiated and executed the loan modification agreement. 136. BAC HOME LOANS erroneously did not facilitate the acts necessary t
i

canceling the foreclosure process previously pending when BAC HOME LOANS and/o BOFA offered and entered into a modified loan agreement with Plaintiff. 137. As the servicer for Plaintiff's loan, BAC HOME LOANS wrongfully took monie

from Plaintiff's escrow account on various occasions in 2010 and applied certain amount to Plaintiff's principal, thereby causing shortages in Xlaintiff s escrow account an wrongfully incurring late charges against Plaintiff. 138. The alleged Successor Trustee Micheal A. Bosco has fiduciary duties to Plaintiff.
'

19

139.

The alleged Sucessor Trustee Michael A. Bosco and his employee Jennife

Hamlin have breached these fiduciary duties_when Jennifer Hamlin acted in dual roles i the same transaction whereby she appointed her boss Michael A. Bosco acting under nonexistent authority from BAC HOME LOANS SERVICING LP, FKA COUNTRYWID HOME LOANS SERVICING LP, and by later acting on behalf of MERS as Assistant Secretary to transfer all beneficial interest from MERS to BAC HOME LOAN SERVICING LP, FKA COUNTRYWIDE HOME LOANS SERVICING LP, in fraudulent manner that purported to make the Assignment retroactive to a time before was even executed and/or possibly valid. WHEREFORE, Respondent prays as follows that the Court: 1. Issue a Temporary Restraining Order and a Preliminary Injunction halting the Trustee's Sale currently scheduled for July 21, 2011 at 11:30 a.m. 2. Find that BAC HOME LOANS violated Arizona laws with respect to the Trustee Sale scheduled for July 21, 2011, and issue an order enjoining the Trustee Sale. 3. Find that BAC HOME LOANS and/or BOFA have violated their fiduciary duties as an escrow agent. 4. Order an accounting of Plaintiffs loans and order BAC HOME LOANS and BOFA to obtain an outside and independent audit of the loan file for the purpose of providing Mr. Smith with the correct amount of arrears and correct balance so he can pay what he owes and reinstate the loans as current. 5. Award actual and compensatory damages for the violations of law and breaches of duty alleged in the Complaint. 6. Order Defendants to specifically perform under the terms of the Agreement. 7. Order Defendants and any purported Successor Trustee to comply with the Arizona real property laws related to non-judicial foreclosure sales (trustee sales).

8. Issue an order that Defendants pay for Plaintiffs attorney's fees and costs.
20

9. Award Mr. Smith his reasonable attorney's fees from Defendants in accordance with A.R.S. 12-341.01, to the extent this matter arises out of contract; 10. Award Mr. Smith his taxable costs in accordance with A.R.S. 12-341; 11. Award damages under A.R.S. 44-1521, et seq. in an amount to be proven at trial. 12. Issue an order granting such other and further relief as the Court deems just and proper.

Dated: July 20, 2011

E RABAGO LAW OFFICE

By: VINCE RABAGO Attorney for Plaintiff

21

2 3 4

VERIFICATION

STATE OF ARIZONA) ) ss.

5 6

COUNTY OF PIMA )

8 9 10 11

BRIAN McCLAIN, being first duly sworn upon fig oath, according to law, deposes and says: That he is an agent of the Plaintiff listed herein; that he is has read the foregoing Verified Complaint and is familiar with the facts and circumstances allleged, and that the statements

12 13 14 15 16 17 18 19 20 21 22 23 24 25

alleged therein are true of his own knowledge and belief, and as to those matters alleged upon information and belief, he believes them to be true.

.z'

BRIAN McCLAIN SUBSCRIBED AND SWORN before me on this

H2O day of July, 2011, by BRIAN McCLAIN.

AMOL4Lata_.
NOTARY PUBLIC

26 27 ws 28

. wk,...4 ,..0 -.7. d ,?' - --t

....

ELIZABETH AMARILLAS NOTARY PUBLIC - ARIZONA PIMA COUNTY MY COMMISSION EXPIRES SEPTEMBER 25, 2018
22

A COPY OF THE FOREGOING WAS SERVED ON JULY 20, 2011 VIA U.S. MAIL TO THE FOLLOWING PARTIES:

Defendant BANK OF AMERICA, N.A. c/o CT CORPORATION SYSTEM, 2394 E. CAMELBACK RD., PHOENIX AZ 85016

Defendant BAC HOME LOANS SERVICING LP FKA COUNTRYWIDE HOME LOANS SERVICING LP do CT CORPORATION SYSTEM, 2394 E. BACK RD., PHOENIX AZ 85016

BY VINCE RABAGO, ESQ. ATTORNEY FOR PLAINTIFF