Ngyuyen Case 001

Case 2:09-cv-04589-AHM -AJW Document 131 #:1188
Filed 10/05/10 Page 1 of 57 Page ID
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JOHN M. SORICH(CA Bar No. 125223) jsorichC2adorno.com THEO'QREE. BACON (CA Bar NO.1 15395)
cyooC2adorno.com
~aC~~si15f&kmyOO (CA Bar No.1 69442)
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ADOltOYOSS ALVARADO & SMITH

A Professional Corporation 1 MacArthur Place, Suite 200 Santa Ana, California 92707 Tel: (714) 852-6800 Fax: (714) 852-6899
Attorneys for Defendants CHASE BANK USA, N.A. and CHASE HOME FINANCE LLC
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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT
OF CALIFORNIA
CASE NO.: CV09-4589 AHM (AJWx)
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PAUL NGUYN, an individual; and LAUR NGUYEN, an individual,

Plaintiffs,
v.
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JUDGE: Hon. A. Howard Matz

DEFENDANTS' NOTICE OF MOTION AND MOTION FOR RELIEF FROM JUDGMENT FEDERAL RULES OF CIVIL PROCEDURE AND RELIEF FROM DEFAULT UNDER RULE 55(c); MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT
UNDER RULE 60(b) of
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Chase Bank USA, N.A.; Chase Home Finance, LLC; First American Loanstar
Trustee Services; Sydney
Funding and
Nexus Escrow, Inc.; Jolm Ng~yen,an
Realty, Inc.; Sidney Tran, an Individual;
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through 50, inclusive,
Individual; Joseph Son Cao Tran, and Individual; Reafty Savers Inc.; Ngyyen Paul Tuan, an Individual; and DOES 1
THEREOF
(FRCP.Rules60(b) and
55(c) )
Defendants.
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DATE: November
CTRM: "14" 8, 2010 TIME: 10:00 a.m.

ActionFiled: June 25, 2009
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TO PLAINTIFFS AND ALL INTERESTED
PARTIES:
of Federal Rules of
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NOTICE IS GIVEN that under Rule 60(b)
Civil Procedure
("FRCP"), on November 8, 2010 at 10:00 a.m. or as
soon
thereafter
as the matter can
be heard in Courtroom" 1 4" of the above-entitled Court, defendants Chase Bank USA,
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MOTION FOR RELIEF FROM DEFAULT JUDGMENT

1152634.2
N.A. ("Chase Bank")
and
Chase Home Finance LLC ("Chase
Home," and collectively
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"Defendants") wil move this Court for Relief from the Default Judgment entered on
September 15,2010. The grounds forthe Motion are as follows:
. Excusable neglect of
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Defendants' counseL.
. Attorney negligence is an
"extra-ordinary" circumstance justifying relief
under Rule 60(b)(6).

. The Judgmentis void because the Court
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exceeded its authority in
entering Defendants' default, as any failure to
follow the Court orders was not

part of Defendants and did not relate to the merits
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fraudulent conduct on the
of the
case. Rule 60(b)(4).
For the same reasons, under Rule 55(c) ofFRCP, Defendants wil move this
Court to set aside the
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entry of default on August23, 2010.

Defendants . met and conferred with Plaintiffs. on September 29,
grounds for this
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Counsel for
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2010 regarding the
Motion. Therefore,Defendantshaveinet the

Rule
requirements
of
Local
Rule
7-3. See, Local
7-3.
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DATED: October
5,2010
ADORNO YOSS ALVARADO & SMITH A Professional Corporation
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By: lsi S. Christopher Yoo JOHN M. SORICH S. CHRSTOPHER YOO

msIrBS\~eEes1~lJ~A. and CHASE
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HOME FINANCE LLC
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MOTION FORRELlEF FROM
DEFAULT JUDGMENT
1152634.2
TABLE.OF CONTENTS
Page
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I. SUMMARY OF ARGUMENT....................................................................... 1 II. STATEMENT OF RELEVANT FACTS........................................................3 A. Subject Loan..........................................................................................3

B. Court Order Issuing Injunction Enjoining Foreclosure.........................
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C. Defendants' Failure to File Status Report Regarding Status of
Settlement Conference ..........................................................................4

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III. DEFENDANTS SHOULD BE
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IV. DEFENDANTS SHOULD NOT BE LIABLE
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V. CONDUCT
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NOT RISE TO THE
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Plaintiffs and Defendants to ontinue Trial Defendants to File Cross-Complaint .... ...................... 5 DEFAULT FILE PRECONFERENCE STATEMENT WAS DUE TO "EXCUSABLE NEGLECT"......................................................................................................6 FOR THE NEGLIGENCE OF THEIR COUNSEL....................................................................................9 DID FRAUDULENT OR INTENTIONAL OF DEFAULT AND DEFAULT JUDGMENT ................................................................................9
D. Agreement Between Date and Allow RELIEVED FROM JUDGMENT, BECAUSE DEFENDANTS' FAILUR TO TRIAL OF DEFENDANTS OR DEFENDANTS' COUNSEL LEVEL OF CONDUCT THAT WOULD WARRNT ENTRY
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VI. FOR THE SAME
REASONS THATTHEDEFAULT JUDGMENT
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~?~ullfJJJL~fEs~~~d~~~~lJ~rn~~~.?~..........ll
VII. CONCLUSION..............................................................................................12
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1 NO
lICE OF MallON AND MallON 10 DISMISS COMPLAIN I
1152634.2
TABLE OF AUTHORITIES
Page
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Cases
Bateman v. United States Postal Service, 231 F.3d 1220,1223 (9th Cir. 2000)...........................................................................7
Brf4fF~3d ~~~~2~6f7th.iff~(8)...............................................................................6
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Community Dental Services v. Tani,
282 F.3d 1164, 1169 (9th Cir 2002)............................................................................9
Employee Painter's Trust v. Ethan Enterprises, Inc.,

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480 F.3d 993, 1000 (9th Cir. 2007).............................................................................7
Hot!7 U.tl~O~: 413-14 (1897).....................................................................................10

Mendoza v. Wight Vineyard Management, (9t1 Cir. 1986) .................................................................. 7, 11
783 F.2d 94r, 945-946 Phoceene So
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Marine, S.A. v. Us. Phosmarine, Inc., 682 F .2d 802, 805-06 (9th Cir. 1982)...... .................... ........................................ 10, 11
us
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Pioneer Investment Services Co. v. Brunswick Associates LTD Partnership, 507 US 390, 394 (1993) .............................................................................................. 7
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R04t7f!S~1;~s16T(i98r~~~~....................................................................................10
Securities and Exchange Comrnissionv. Seaboard Corp.,
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666 F .2d 414, 416- 17 (9th Cir.1982) .......... ..... .......... ............ ............................. 10, 11
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TCi4~11d i~ ,I696r~the;~2QB~~~~~~~~............................................................... 1 1
Televideo Systems, Inc. v. H~identhal,
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826 F.2d 915,916-917 (9t1 Cir. 1987) ........................................................................9
ya~9m~od Vi ~qtt9tl~i;: !'ff).....................................................................................8
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Statutes
15 USC l635(b)...........................................................................................................9
Civil Procedure .....................................................11
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Rule 55(c) of the Federal Rules of
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Rules
FRCP Rule 60(b ).........................................::............................................................6, 11
NO I ICE OF MO I ION AND MO I ION I a DISMISS COMPLAIN I
1152634.2
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TABLE OF AUTHORITIES
Page
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FRCP Rule 5 5( c). ............. ....................... .... ............. ........................ .........................1, 11
FRCP Rule 60(b)............................................................................................................. 1

FRCP Rule 60(b )(1) ... ..... ....... ..... ....... ........ .................. ............ ..... ................ ................1 i
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FRCP Rule 60(b )(3) ........................................................................................................ 9
FRCP Rule 60(b)(4)........................................................................................................9

FRCP Rule 60(b)( 6) ........................................................................................................ 9
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iii NOIICE OF MallON AND MalIaN 10 DISMISS COMPLAIN I
1152634.2
MEMORANDUM.OF POINTS AND AUTHORITIES

Defendants Chase Bank USA, N.A. ("Chase Bank") and Chase Home Finance
LLC ("Chase Home," and collectively "Defendants'l) hereby submit the following
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memorandum of points and authorities in support of their Motion for Relief from
Default Judgment entered on September 15,2010 under Rule 60(b) of
Federal Rules
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of Civil Procedure ("FRCP") and their Motion to Set Aside Default under Rule 55( c)
ofFRCP.
I. SUMMARY OF
ARGUMENT
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On August 23, 2010, the Court entered default against Defendants because of
their counsel's failure to file required pre-trial documents and because of a perceived
lack of compliance with certain prior orders (See, Pacer Docket NO.1 15).
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Specifically, the Court cited the following:

. On November 17,2010, the Court ordered Defendants to
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cancel
Defendants continued with foreclosure on two
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foreclosure of
the subject property, but
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separate occasions.
. Defendants' failure to file a status report regarding referral of
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this matter
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for a settlement conference before
Magistrate JudgeWistrich
default
. Defendants' failure to file apretrial conference statement.
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As a result of the
August 23, 20l0, and issued a default
the Court entered
Defendants on
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judgment on September 15,2010. However, for

be relieved from
the reasons set forth below, Defendants respectfully request that they
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the Default Judgment, because
any failure to comply with the court orders were due to

Defendants .and/orDefendants' counsel for the following
"excusable neglect" of
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reasons.
First, with respect perceived failure to comply with the order to cancel
foreclosure, the Court acknowledged in its January 26, 2010 order that the foreclosure
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trustee, Loanstar, when forward with the foreclosure despite having been advised by
Defendants' counsel that it was enjoined from doing so. With respect to the second
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1152634.2
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I occasion on or about June 28, 2010, the foreclosure notice
was issued inadvertently
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and thereafter retracted immediately after Plaintiffs brought it to the attention of

Defendants' counseL.
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Second, with respect to the failure of the parties to complete a settlement

conference by the deadline of
May 31, 2010, the case was in active discovery during
the Spring of 20 1 0, including written discovery, and it was not until the depositions of
Plaintiffs in late May
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201 0 that it became apparentthatthere were other parties who
were dismissed by Plaintiffs who may bear responsibility for the acts giving rise to
Plaintiffs' lawsuit. Defendants' counsel did initially contact the clerk for Judge
Wistrich and provided dates to Plaintiffs in November 2009. However, in
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light of
factual disputes with the Plaintiffs, it was necessary to undertake discovery. This
information is offered as an explanation, not an excuse. Responsibility for the failure
to complete the settlement conference lies with Defendants' counsel, not the
Defendants.
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Third, the failure to file a pretrial conference statement is the result of the
inadvertence and excusable neglect of
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Defendants' counseL. As noted in documents

Defendants' counsel and Plaintiff
previously filed with the Court,
had reached an
certain other
agreement to seek the continuance of trial in order to bring into the case
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parties who bear some responsibility for the
events giving rise to Plaintiffs' claims.
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The mistake by Defendants' counsel was the failure to file the motion to continue trial
at an earlier time iii the action. Theparties were in agreement that these other
parties,
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who Plaintiffs had previously dismissed, were necessary
to achieve full and complete
resolution of this matter. It should be noted that Defendants were not the only party
who initially failed to file a pretrial
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conference statement, the Plaintiffs did not file

punished
one either, yet only the Defendants were
by the Court.
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For the reasons set forth above, Defendants respectfully request the Court to set
aside the default judgment, and allow the parties to litigate this matter on the merits.
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1152634.2
II. STATEMENT OF RELEVANT
FACTS
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A. Subject Loan
Plaintiffs obtained a loan in the amount of $250,000.00 ("Loan") in connection

with the property located at 16141 Quartz Street, Westminster, California 92683
("Subject Property"). The Loan was secured by a deed of
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trust encumbering the
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Subject Property that was recorded with the Orange County Official Records on
December 12,2007 as instrument
number 2007000731120 ("DOT"). The DOT

Motion to Dismiss the First Amended
Default and Election to Sell Under
identifies Chase Bank as the lender and Plaintiffs as the borrowers. See, Request for
Judicial Notice ("RJ"), 1, attached to the
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Complaint. Pacer Docket No. 35. A Notice of
Deed of Trust ("NOD") was recorded pursuant to the DOT on March 19, 2009 with
the Orange County Official Records as instrument number 2009000131 148 due to
Plaintiffs' failure to make monthly mortgage
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payments. The NOD states that as of

the Loan was $14,372.75. See RJ,
Trustee pursuant
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March 18,2009, the amount arrears under
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Exhibit 2. A Substitution of
to the DOT was recorded on April 22,
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2009 with the Orange County OfficialRecordsas instrument number 2009000197524.

First American Loanstar Trustee Services was namedthe new trustee of the
DOT. See
RJN, Exhibit 3, Pacer Docket No. 35. An Assignment of
Deed of
Trust was recorded
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on
30, 2009, with
Recorder as instrument number
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2009000215727. All beneficial interest under the DOT was assigned to IPMorgan
Chase Bank, N.A. ("JPMorgan"). See RJN, Exhibit4, Pacer
Docket No. 35. A Notice
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of Trustee's Sale was recorded pursuant to the DOT on
June 24, 2009 with the Orange
County Official Records as instrument
number 200900033 1959. SeeRJ, Exhibit 5,
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Pacer Docket No. 35.

B. Court Order Issuing Injunction Enjoining Foreclosure
On August 3, 2010, the Court issued apreliminary injunction enjoining

foreclosure sale of
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the SubjectProperty. Pacer Docket No. 45. On November 17,
2010, the Court further ordered Defendants to actually cancel foreclosure of
the
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1152634.2
Subject Property. Pacer Docket No. 94. On January 4,2010, Plaintiff
filed a motion
the foreclosure.
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for contempt against Defendants and Loanstar for the re-initiation of
Pacer Docket 99. However, in its Order of January 26, 2010, the Court recognized
that the foreclosure was re-initiated without any fault of
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Defendants. The Court stated
in its Order, "Defendants Chase Bank USA, N.A. and Chase Home Finance LLC have submitted to the Court evidence that they took measures to comply with its order to
cancel the foreclosure sale and any related proceedings.
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Specifically, on November
16,2009, their counsel sent an email to Loanstar's counsel, notifying Loanstar that the
Court had ordered cancellation of all
foreclosure proceedings and instructing them to
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cancel the sale." Pacer Docket No. 105.
The second foreclosure was initiated on June 28, 2010 but rescinded on July 8,
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2010 - two days after Paul Nguyen contacted Defendants' counseL. This inadvertence
by Defendants was remedied within six days of being
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contacted by Plaintiffs. See
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Declaration of S. Christopher Yoo ("Yoo Declaration"),if 4, Exhibit "A." In fact, this

issue was resolved without the necessity of any Court intervention.
C. Defendants'Failure to File Status ReportRegarding
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Status of
Settlement Conference
Counsel for Defendants
did contact Judge Wistrich's clerk, and provided
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available dates toMr. Nguyen November 16,2009. Yoo Declaration,if 5, Exhibit

"B." From then on, due to the inadvertence of Defendants' counsel, the
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actual
settlement conference was not scheduled. This failure
is the
fault of
Defendants'
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counseL. However, this issue was addressed with Mr.
Nguyen at his deposition on

attempted to schedule
May 27, 2010, and Defendants' counsel
a date for a settlement
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conference up to the time of the Scheduling Conference on August 23, 2010.

However, judge Wistrich did not want to schedule a
settlement conference once the
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deadline to complete the settlement conference had passed as of
May 31,2010. d. It
was the fault of Defendants' counsel by not filing a status report regarding the
status of
a settlement conference. However, this was an oversight, and not done intentionally
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1152634.2
Case 2:09-cv-04589-AHM -AJW Document 131 Filed 10/05/10 Page 10 of 57 Page ID #:1197
or maliciously to either offend the Court or to take improper advantage in litigation.

The case was in active discovery during the Spring of 20 1 0, including written
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discovery, and it was not until the depositions of Plairitiffs in late May 2010 that it
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became apparent that there were other parties who were dismissed by Plaintiffs who
may bear responsibility for the acts giving rise to
Plaintiffs' lawsuit. d.
D. Agreement Between
Plaintiffs and
Defendants to Continue Trial

on May 28,2010,
the parties' agreement
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Date
and Allow
Defendants toFileCross-Contplaint
On May 27, 2010, Paul Nguyen's deposition was taken, and
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the deposition of
Laura Nguyen was taken per
because Mrs.
Nguyen was not
available for deposition on
May 21, 201 0,
as originally noticed.
besides
After the depositions, it becameapparentthatthe other parties
Defendants
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may be responsible for the alleged forgery of Laura
Nguyen's signature on certain loan
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documents. Based on
Plaintiffs' deposition
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testimonies, itbecame apparent that

May 27, 2010,
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Joseph Cao Son Tran, Angel Tran,SydneyFunding,and Nexus Escrow, Inc. may be
responsible for possibly forging Ms. Nguyen's signature. Thus, on
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Defendants immediately made a title
claim to Fidelity
National Title Insurance
Company ("Fidelity") to
seek indemnification for
forgery. Yoo Declaration, ir 6,

accept
Exhibit "C." Defendants werehopefulthatFidelity would
the title claim, and
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either resolve. the inatter promPtly
or assumethedefenseof this actiol1iiiPlac~of

the unnecessary burden ofincurring
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Defendants' counsel and relieve Defendants of
attorneys' fees and
costs in this action.

the trial date
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In this regard, Plaintiffs agreed to stipulate to continue
to allow
Defendants to file
a cross-claim against
Joseph Cao SOn Tran, Angel Tran, Sydney

Plaintiffs is
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Funding, and Nexus Escrow, Inc. This agreement by
expressly
acknowledged in Plaintiffs' Response to Order to Show Cause ("0SC") Re: Failure to

Prosecute, and Plaintiffs' Unilateral Pretrial
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Conference Statement,irir 10- 18. Pacer
Docket NO.1 08.
In fact, on August 17,2010, Paul Nguyen sent an email to Defendants' counsel

5
MOTION FOR RELIEF FROM
DEFAULT JUDGMENT
1152634.2
again reiterating his intention to agree to a stipulation to
continue the trial date and
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leave for Defendants to file a cross-complaint. Yoo Declaration, ii 8, Exhibit "D." In

response, on August 19, 2010, Defendants' counsel forwarded to Plaintiffs the
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proposed cross-complaint and the proposed stipulation to continue the trial date. Because Plaintiffs had objections to the proposed cross-complaint, on August 20,
2010, Defendants' counsel forwarded the revised cross-complaint. Y 00 Declaration,
ii 8. Up to the date of the Pretrial Conference on August
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23, 2010, Defendants'
counsel believed that the trial date would be
postponed to allow Defendants to file a

entire matter could be resolved
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cross-complaint against certain third parties so that the
in one lawsuit. Y 00 Declaration, ii 9. The failure to file the pretrial conference

statement was due to Defendants' mistaken understanding that the parties would
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continue the trial date and allow Defendants to prosecute the cross-claims.
The Default Judgment was entered against Defendants on September 15, 2010.
See, Pacer Docket Number 127.
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III. DEFENDANTS. SHOULD..BE.RELIEVEDFROMDEFAULT

JUDGMENT, BECAUSEDEFENDANTS'FAILURE TO. FILE PRE-
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TRIAL CONFERENCESTATEMENT WAS
DUETO "EXCUSABLE
judgment. If
NEGLECT"
FRCP Rule 60(b) governs amotion to seek relieffrom a default
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the moving party can show "mistake, inadvertence, surprise or excusable neglect," the
court may set aside a judgment. FRCP 60(b). A Rule60(b) motion must be brought
within 1 year from the entry of
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judgment. FRCP 60(c)(I); Brandon v. Chicago Board

Motion is timely.
neglect" are:
of Ed., 143 F.3d 293, 296 (7th Cir. 1998). Thus, this
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The factors for "excusable
CD prejudice to other side

CD length of delay and its potential impact on judicial proceedings
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CD the reason for the delay, including whether it was within the
reasonable control of the movant, and
6 MOTION FOR RELIEF FROM DEFAULT JUDGMENT
1152634.2
. whether the movant acted in good faith.
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Pioneer Investment Services Co. v. Brunswick Associates LTD Partnership, 507 US

390, 394 (1993).
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The Supreme Court stated that all relevant circumstances must be taken into
account in determining whether the neglect was excusable. Pioneer Investment
Services Co. v. Brunswick Associates LTD Partnership, 507 US at 395.
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As to default judgments, the following factors are considered:

. whether default resulted from defendant's culpable conduct
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(devious, deliberate, wilful or bad faith failure to respond)

.. whether defendant has meritorious defense; and
. whether reopening the default judgment would prejudice plaintiff.
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Employee Painter's Trust v. Ethan Enterprises, Inc. 480F.3d 993, 1000 (9th Cir.
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2007).
Moreover, excusable neglect
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covers negligence onthe part of counseL.
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Bateman v. United States Postal Service, 231 F.3d 1220, 1223
(9th Cir. 2000).

has expressed a . strong judicial
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Additionally, the
Ninth Circuit
preference for
adjudication on the merits. See Mendoza v. Wight Vineyard
Management, 783 F.2d
941, 945-946 (9th Cir. 1986). "These
Rule 60(b) grounds are liberally interpreted

" Id.
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when used on a motion for
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As stated above, Defendants' counsel did 110t file a pretrial conference

statement, because the parties agreed to stipulate to continue the trial date to
allow
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Defendants an opportunity to file a cross-complaint. See, Yoo Declaration, irir 7-9,

Exhibit "D." In fact, Plaintiffs cannot dispute that they agreed to continuance of
the
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trial date and leave for
Defendants to .file a cross-coinplaint other third parties. See,

as of
Yoo Declaration, irir 7-9, Exhibit "D." Even
August i 7,2010, Paul Nguyen sent
an email confirming his agreement to continue the trial and leave for Defendants to
file a cross-complaint. See, YooDeclaration, ir 8, Exhibit "D."
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If the default judgment is to be set aside, there is no prejudice to Plaintiffs,

1152634.2
1 1.
because Plaintiffs have not made any payment under the subject loan since December
2008. In fact, there is no pending foreclosure. See, Y 00 Declaration, iT 10, Exhibit
"E." Thus, a short delay in resolution of this matter wil
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not prejudice Plaintiffs.
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a week of
Once the default judgment is set aside, Defendants wil be ready for trial within
the Court's notice. Additionally,
based on the concurrently filed Motion to
Alter or Amend the Default Judgment, there is a meritorious defense to Plaintiffs'

contention that Defendants have forfeited their
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entitlement to the loan proceeds. See
concurrently filed Motion to Alter or Amend
Default Judgment. Based on the 9th

entitled to forfeiture of the subject loan, because until
by the lender or the
Circuit law, Plaintiffs are not
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there is an acknowledgement of rescission
decision maker's
adjudication of rescission, a plaintiffwouldsimply be advancing a claim for

rescission. Yamamoto v. Bank of
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New York, 329 F.3d 1167, i 172 (9th Cir. 2003).

wil demonstrate that at minimum,
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Moreover, testimony at trial
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Paul Nguyen
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was contributorily negligent for entering
into aJoantransaction without his wife's

matter, Mr. Nguyen obtained a
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knowledge or consent. In this
loan without his wife's

to the objection to the
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consent or knowledge. In
fact,
in
Laura
Nguyen's reply
proposed judgment, she
stated "she
was a
stranger to
the transaction," and did not
"receive any proceed from" the
loan transaction. See,
Pacer DocketNo. 122, page 3.
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Thus, Defendants have
affirmative defenses of estoppel, unclean hands, contributory

Nguyen's
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negligence, and other defenses againstPaulNguyen. Inshort, Paul
decision
to obtain a residential loan without
knowledge and COnsent
of
his wife led to his wife's
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signature purportedly being forged by others.

Thus, the failure to file the pretrial conference statement was
due to the
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mistaken understanding of
Defendants' couiisel that
because the
parties would
continue the trial date and allow Defendants
to file a cross-claim against certain third
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parties, Defendants would not have to file a pretrial conference statement.
Defendants' failure was not the result ofany malice, devious intent, or bad faith failure
to comply with any court order. Thus, Defendants' failure to file a pretrial conference
1152634.2
statement was a result of "excusable" neglect on the part of
Defendants' counsel, and
2
3
as a result the default judgment should be set aside.

iv. DEFENDANTS
SHOULD NOTBE LIABLE FOR THE NEGLIGENCE

Rule 60(b)(6) that a
4
5
OF THEIR COUNSEL
In addition to Rule 60(b)(3), there is a catch all provision of
6 7
8
default can be set aside for "all other reasons that justifies relief." Some courts treat
extreme or "gross" attorney negligence as an "extra-ordinary" circumstances justifying
relief under Rule 60(b)( 6). An unknowing client should not be held liable on the basis
of a default judgment resulting from an attorney's grossly negligent conduct."
Community Dental Services v. Tani, 282 F.3d 1164,1 169
9 10
11
:r
en
. :
(9th Cir 2002).

of
Here, the mistake was. the belief
Defendants' counsel that the trial date would
12
13
be postponed, and therefore, Defendants' counsel believed that a pretrial conference

statement would not be necessary. Defendants should not suffer the Draconian result
ot
0
'"
.. '" .. ,. ..
14
15
of a default judgment wherein the Loan proceeds in the sum of $250,000 are forfeited,
v,
;, 0 0
and also be required to pay in excess of$58,000to Plaintiffs under 15 USC 1635(b)
due to their counsel's failure to file a pretrial conference
z '"
'"
16
17
18
statement. Here, the totality
of circumstances warrants setting aside
the
default judgment entered against
Defendants under Rule 60(b)(6).
19
v. CONDUCT OFDEFENDANTSORDEFENDANTS'COUNSELDID
NOT RISE TO THELEVELOF
20
21
FRAUDULENT OR INTENTIONAL
WARRNT
CONDUCT THAT
WOULD.
ENTRY .OF.DEFAULT AND
22
23
DEFAULT JUDGMENT
Rule 60(b)( 4) states that the Court can provide arelief from a judgment if the
judgment is void.
The court has the inherent power to dismiss
24
25
cases or enter defaults. However,
26 27
28
there are limits to the court's inherent power. In this regard, the court in Televideo
Systems, Inc. v. Heidenthal, 826F.2d 915,916-917 (9th Cir. 1987) states that the court
has inherent powers to dismiss cases or enter default judgments for failure to
9
1152634.2
1 .I
prosecute, contempt of the court, or abusive litigation practices. Roadway Express,

Inc. v. Piper 447 U.S. 752, 764 (1980). However, there are limits to the court's
inherent power to do so. The need for the orderly administration of justice does not
2
,.
;)
4
5
permit violations of due process. See Phoceene Sous Marine, s.A. v. Us. Phosmarine,
Inc., 682 F.2d 802,805-06 (9th Cir.1982) (recognizing that wilful deceit and conduct
utterly inconsistent with the orderly administration of justice would merit the
imposition of severe sanctions, but finding that
7
8
because defendant's deceit-falsely

the controversy
stating that he was too il to attend trial-was unrelated to the merits of
the sanction was inconsistent with due process. The decision was based principally on
the notion that a party should not be deprived of his opportunity to defend based on
factors unrelated to the merits of his case.); Securities and
10
11
:r
Exchange Commission v.
j
12
13
Seaboard Corp., 666 F.2d 414,416-17 (9th Cir.1982) (finding that a default
. : en
udgment
ot
against the defendant for failure to pay
a fine when the
0 '" .. '"
.. ,. ..
defendant had complied with
14
15
an order to give a deposition was punitive and
a violation of
due process as the court
~
'" '"
;, 0 z '"
0
'"
could not presume that the case lacked
merit); Hovey v. Elliott, 167 U.S. 409,413-14
16 17
18
(1897) (finding that courts may not strike an answer and enter a default merely to
punish a contempt of court unrelated to
merits of case). These cases state thatthe

be based on some type of "fraudulent"
discovery and which
Couii's inherent power to enter default should
19
conduct of a party that impedes one's fight to conduct
lead to the
20
21
merits of
the case. See, Securities and
Exchange Commission v. Seaboard
Corp., 666
F.2d at 416-17. Here, the Court entered default against Defendants based on the Court's
conclusion that Defendants violated certain
22
23
court orders and failed to file a pretrial

set forth
24
25
conference statement. Pacer
Docket No. 115. However, for the reasons
above, Defendants' failure to comply with the Courtorder was not intentional and was
merle the result of inadvertence of their counseL. Especially
26 27
28
as to the failure to file a
pretrial conference statement, such a failure was a result of the mistaken belief that the
trial date would be postponed to allow Defendants to file a cross-complaint. In light

1152634.2
of
the totality of
the circumstances, Defendants should not be deprived of
their due
2
3
process right to defend against the claims asserted by Plaintiffs based on the factors
unrelated to the merits of the case. The cases identified above hold that even a
conduct that may be in contempt of the court would not warrant a default being
entered against that party if unrelated to the merit of
4
5
the case. Phoceene Sous Marine,
6 7
8
s.A. v. Us. Phosmarine, Inc., 682 F.2d at 805-06; Securities and Exchange
Commission v. Seaboard Corp., 666F.2d at 416- 1 7. The conduct
has to be
orderly administration of justice.
"fraudulent" and utterly inconsistent with the
9 10
11
:r
Defendants respectfully state that their inadvertence in this case does not rise to
the level of intentional conduct that relates to the merit of the case that would warrant
entry of default. Thus, Defendants' du.eprocess rights
would be violated if the default
12
13
. : en
and default judgment are not set aside.
ot
0 '"
.. '" .. ,. ..
'" '"
VI. FOR THESAMEREASONSTHATTHEDEFAULT JUDGMENT

SHOULD BE SET. ASIDE UNDER RULE 60(b),
14
15
THE ENTRY OF
RULE .55(c)
default as
;, 0 z '"
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DEFAULT. SHOULD
BESET ASIDE UNDER
16 17
18
On
August
23, 2010, the Court
entered
to Defendants. The court can

standard for
set aside the entry of default for "good cause.." Inthe9thCircuit, the
"good cause" to set aside the default is the same standard as the "excusable"
negligel1ce .stanciarciiincierRule6Q(i:)(l) t()setasicietheJiicigl1el1t. TQl Group Life
Insurance Plan v. Knoebber,244 F.3d 691, 696
19
20
21
(9thCir. 2001).
Circuit has expressed
In this regard, the 9th
a strong judicial preference for
22
23
adjudication on the merits.SeeMendozav. Wight Vineyard Management, 783F .2d

941, 945-946 (9th Cir. 1986). Rule 5S(c), provides in full that: "For
good cause
by default
24
25
shown the court
may set aside an entry
of
default
and,
if
a judgment
has
been entered, may likewise set it aside in
accordance
with Rule 60(b) ."
26
Because the standard is the same under RuleS 5( c) as Rule 60(b)( 1), for the
27
28
reasons state above, Defendants respectfully request that the default entered on August
23, 2010 be set aside.
11

1152634.2
i
1
VII. CONCLUSION
For on the foregoing reasons, Defendants respectfully request that the Court
grant their Motion, and set aside the default that was entered on August 23, 2010 and the default judgment that was entered on September 15, 2010.
2
3
4
5
6 7
8
DATED: October 5,2010
ADORNO YOSS ALVARADO & SMITH A Professional Corporation
By: lsi S. Christopher Yoo JOHNM. SORICH

S.CHRISTOPHER YOO
ms1!BS\~e6es1~lJ~A. and CHASE
10
11
:r
HOME FINANCE LLC
12
13
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ot
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14
15
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16
17
18
19
20
21
22
23
24
25
26 27
28
i i 52634.2
DECLARATION
OF S.CHRISTOPHERYOO
2
3
I, S. Christopher Yoo, declare as follows:

1. I am a member with the law firm of Adorno, Yoss, Alvarado & Smith, a
Professional Corporation, attorneys of record
4
5
herein for defendants Chase Home and Chase Bank USA, N.A. ("Chase Bank" and
Finance LLC ("Chase
Home")
collectively "Defendants") in the above-captioned action ("Action"). I have been duly

admittedto practice law in the State of California and before
7
8
this District.
2. I am submitting this Declaration in support of the Motion to be Relieved

from Default and Default Judgment. If called
9 10
11
:r
as a witness in this matter, I am

knowledge, to
competent to testify of my own personal
the best of my recollection, as
to the matters set forth in this
Declaration.
issued a preliminary injunction enjoining
12
13
:i ." ;:
3. On August 3, 2010, the Court
. : en
ot
foreclosure sale of
the SubjectProperty.PacerDocketNo. 45. On November 17,

Defendants to actually cancel foreclosure
0
'"
'"
..
~
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14
15
2010, the Court further ordered
of the
;, 0 z '"
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Subject Property. Pacer DocketNo.94. OnJanuary 4,2010, Plaintiff
filed a motion
16 17
18
for contempt against
Defendants
and
Loanstarfor there-initiation of the foreclosure.
Pacer Docket 99. However, in its OrderofJanuary26,2010, the Court recognized
that the foreclosure wasre-initiatedwithoutanyfaultofDefendants. The Court stated

in its Order, "Defendants
19
Chase Bank USA,N.A.andChaseHomeFinanceLLC have

they took measures to comply with its
20
21
submitted to the Court evidence that
order to
cancel the foreclosure sale and
any related
proceedings. Specifically, on November

Loanstar' s counsel,
22
23
16, 2009, their counsel sent an email. to
notifying Loanstar that the

and instructing them to
Court had ordered cancellation of all foreclosure. proceedings
24
25
cancel the sale." Pacer Docket
No. 105.
on June 28, 2010
4. The second foreclosure was initiated
but rescinded on
26
July 8, 2010 - TWO days after Paul Nguyen contacted Defendants' counseL. This
inadvertence by Defendants was remedied within six days of
27
28
being contacted by
Plaintiffs. Attached hereto as Exhibit "A" isa true and correct copy of 1
the Notice of

1152634.2
Rescission ofNotIce of uefault executed on July 8, 2010 by NTIex West LLC and
recorded on July 12,2010 as instrument
2
3
number 2010000328766 with the Orange
County Recorder's Office. In tct, this issue was resolved without the necessity of
any Court intervention.
4
5
5. My office did contact Judge Wistrich's clerk, and provided available

dates to Mr. Nguyen November 16,2009. Attached hereto
as Exhibit "B" is an email

Mr. Nguyen. From then on, due to my
7
8
dated November 16, 2009 to
inadvertence,
the actual settlement conference was not scheduled prior to May 31, 2010. This
failure was my fault. However, this issue was addressed with Mr. Nguyen at his
deposition on May 27, 2010, and my office attempted
10
11
:r
to schedule a date for a

August 23,
settlement conference up to the time of the Scheduling Conference on
12
13
c
:?
2010. However, judge Wistrich did not want to schedule a settlement conference once
the deadline to complete the settlement conference had passed as of
en
ot
0
'"
May 31, 2010. It
..
'"
~
'"
'"
.. ,. ..
14
15
was my inadvertence by not filing a status report regarding
the status of a settlement

not done intentionally
;, 0 z '"
0
'"
conference. However, this was an oversight, and
or maliciously
16 17
18
to either offend the Court or to take improper advantage in
litigation. In fact, the issue
of a settlement conference
was discussed with
Mr. Nguyen. on. an. ongoing basis from
November 2009 to August 2010. In fact, both
Mr. Nguyen and I concurred that it
19
would make sense to engage in a settlement conference once a cross-claim/counterclaim was filed and the third parties were brought into the lawsuit. The case was in
active discovery during the. Spring of 201 0, including
20
21
written discovery, and it was not
22
23
until the depositions of Plaintiffs in late May 2010 that it became apparent that there
were other parties who were dismissed by Plaintiffs who
may bear responsibilty for

as
24
25
the acts giving rise to Plaintiffs'lawsuit. This information is offered
an
explanation, not an excuse.
Responsibility for
the failure to complete the settlement
26
conference lies with our office, not the Defendants.

6. On May 27, 2010, PaulNguyen's deposition wastaken, and on May 28,
2010, the deposition of
27
28
Laura Nguyen was taken per the parties' agreement because

2
1152634.2
Mrs. Nguyen was not available for deposition on May 21, 2010, as originally noticed.
2
3
After the depositions, it became apparent that the other parties besides Defendants
may be responsible for the alleged forgery of
Laura Nguyen's signature on certain loan
4
5
documents. Based on Plaintiffs' deposition testimonies, it became apparent that

Joseph Cao Son Tran, Angel Tran, Sydney Funding, and Nexus Escrow, Inc. may be
responsible for possibly forging Ms. Nguyen's signature. Thus, on May 27, 2010, my
office immediately made. a title claim
7
8
to Fidelity National Title Insurance Company

the title
("Fidelity") to seek indemnification for forgery. A true and correct copy of
9
10
11
:r
claim letter is attached hereto as
Exhibit "C." Unfortunately, to date, Fidelity
has not
yet accepted the title claim. I was.hopeful that Fidelity would accept the title claim,
and assume the defense of this actionin place of Defendants' counsel
and relieve
costs in this
12
13
~
Defendants of
the unnecessary burden of incurring
attorneys' fees and
. : en
ot
0
'"
action.
7. Since
~
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.. '" .. ,. ..
..
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~
14
15
May 28, 2010, Plaintiffs repeatedly agreed to stipulate to continue

to file
;, 0 z '"
0
'"
the trial date to allow Defendants
across-claim against JosephCao Son Tran,

Escrow, Inc. This agreement by
16
Angel Tran, Sydney Funding,
and
Nexus
Plaintiffs is
("OSC") Re:
17
18
expressly acknowledged
in Plaintiffs'Responseto Order
to Show
Cause
Failure to Prosecute, andPlaintiffs'UnilateralPretrialConference Statement, iiii 1018. Pacer Docket No. 108.
8 In fact, on August 17, 2010, Paul
19
20
21
Nguyen sentan email to my attention
again reiterating
his intention to agree to a stipulation to continue the trial date and
22
23
leave for Defendants to
file a cross-complaint. A true and correct copy of Mr.

Exhibit "D." In response, on
to Plaintiffs the proposed cross-complaint
Nguyen's email of August 17,2010 is attached hereto as
24
25
August 19, 2010, I forwarded
and the
proposed stipulation to continue the trial.date. Because Plaintiffs had objections to the
proposed cross-complaint, on August 20, 2010, I forwarded the revised crosscomplaint.
9. Up to the date of
26
27
28
the Pretrial Conference on August 23,2010, I believed

1152634.2
that the trial date would be postponed to allow Defendants to file a cross-complaint
against certain third parties so that the entire matter could be resolved in one lawsuit.
2
3
The failure to file the pretrial conference statement was due to my mistaken
understanding that the parties would continue the trial date and allow Defendants to
4
5
prosecute the cross-claims. Our office's failure to file a pretrial conference was not
the result of any malice, devious intent, or bad faith failure to comply with any court
order.
10. Attached hereto as Exhibit "E" is a true and correct copy of an email
6
7
8
9 10
11
:r C
:? en
dated August 31, 2010 from Paul Nguyen setting forth all loan payments made by him
under the subj ect loan. As indicated in the August 31, 2010 email, the last payment
made by Plaintiffs under the subject loan was on
December 17,2008.
12
13
z "
~
~
I declare under penalty of perjury under the laws
of the State of California and
ot
0
'" '"
the United States of America that the foregoing is true and correct. Executed on October 5, 2010at Santa Ana, California.
..
~
'" '"
.. ,. ..
14
15
f-
;, 0 z '"
0
'"
16
17
18
19
20
21
22
23
24
25
26 27
28
4
1152634.2
EXHIBIT A
Branch :FOl,User :A052
Case 2:09-cv-04589-AHM -AJW Document 131 Filed 10/05/10 Page 23 of 57 Page ID Comment: Station Id :YUUP #:1210
Recorded InOfficial Records Ora.nge County

Tom Daly, Clerk-Recorder
9.00
Recording requested by: LSI Tille Company
2010000328766 11 :28am 07/12/10

217405 N38 1
When Recorded Mail To: NDEx West. L.L.C. 15000 Surveyor Boulevard, Suite 500
Addison, Texas 75001.9013
0.000.000.000.000.000.000.000.00
APN #: 107-903-44
Property A.ddress:
16141 QUARTZ ST WESTMINSTER, CALIFORNIA 92683

111111111111111111111111 11111111111111111111111111~I11111111111111111111111111
RND20100187502242
Sp.1ci: 3bvl th~ line ror Rccorderls; usc only
Trustee Sale No.: 20100187502242
Title Order No.: 100378592
NOTICE OF RESCISSION OF NOTICE OF DEFAULT

NOTICE IS HEHEY GIVEN THAT: NDEX WEST, LLC us agent for the beneficiary under a Deed of
Trust dated l20712007, executed by PAUl. NGUYEN AND LAUnA NGUYEN, obligations in favor of CHASE RANK USA, N.A., as Beiiel1cilry Hceorncdon
2007000731120 of offcial records in the Offce of the Recorder of ORANGE
as Tiustor, to . secure certain
12112/2007 as Instrument No.

County, California describing
land therein as more fully described on the above referenced deed of trusC
Whereas, the present beneficiary under that certain Deed of Trust herein above described, recorded a Notice of
Default and Election to Sell. Said Notice was R~corded on 06/2R/2010 as Instrument No, 2010000303698 in
the offce of the Recorder of ORANGE County. California, of omcial records.
NOW; THEREFORE, NOTICE IS HEREBY GIVEN THAT: the present Beneficiary andlor the Trustee,
and/or the agent of the Trustee, does hereby rescind, cancel and withdniw siid Notice of Brcach and Notice of
Default and Election to Sell; it being understood, however, thar this rescission shall nol in any manner be
coiistn.ied as waiving or alTecting any breach or defaultnisti present or tunire under said Deed of Trust, or as impairing any right or remedy thereunder, but is, and shall be deemed to be, only
an election, without prejudice,

alter in any
not t(1 cause a sale to be made pursuant to said Notice, and shall no iviy jcopardize or impair any right, remedy or
privilege secured .to the Beneficiary and/or the Trustee, under said Deed of Trust, nor modifY nor
respect any of the terms, covenants, conditions or obligations thereof, and said Deed of Trust and all obligations
secured thereby are hereby reinstaied and sh,,1I he and rei",iin in fmce and effcct the same as if said Notice of
Breacli and Notice of Default and Election to Sell had not been made and given,
DATED: 07/08/20iO
By: Randy MidC:leton
FCUS_NOR_NOD.rpt- (05112110) I Ver-12
Page lof1
ORANGE,CA
Document: RE 2010.328766
Page 1 of 1
Printed on 8/11/2010 12:56:22 PM
Branch :F01,User :A052
Case 2:09-cv-04589-AHM -AJW Document 131 Filed 10/05/10 Page 24 of 57 Page ID Station Id :YUUP Comment: #:1211
Recorded In Official Records, Orange County

Tom DalYJ Clerk-Recorder
9.00
Recording requested by:
2010000329423 03:34pm 07/12/10

217405 N38 1
LSI Title Company

When Recorded Mail To:
0.000.000.000.000.000.000.000.00
NOEx West, LL.C. 15000 Surveyor Boulevard. Suite 500

Addison, Texas 75001-9013
APN #: 107-903-44
Propert Address:
16141 QUARTZ ST
WESTMINSTER, CAUFOllNIA 92683

1111111111111111111111111111111111111111111111111 1~I11111111111111111111111111
RND20100187502242
Space above ih~ line for Rccurdcr';: ui-c only
Trustee :'hile No.: 20100187502242
Title Ordcr No.: 100378592
NOTICE OF RESCISSION OF NOTICE OF DEFAULT

NOTICE is HEllEBY GIVEN THAT: NnEX WEST, LLC "' ,gent for the beneficimy under a Deed of
Trust dated 1210712007, executed by PAUL NGUYEN ANn LAURA. NGUYEN. as. Trustor. to seeurecertain obligations in favor of CHASE BANK lJSA,N.A., as Beneficiary Recorded on iiiiil2007 as Instrument No.
2007000731120 of offcial records in the Offce of the Recorder of ORANGE County, Caliornia describing
land therein as more fully described on the above referenced deed trust. of
Whereas, thc present beneficiary under that certain Deed of Trust herein above described, recorded a
Notice of
Default and Election to SelL. Said Notice was Recorded on 0612812010 as Instrument No. 2010000303698 in
the omce of the Recorder of ORANGE County, California, of oftcini records.
NOW; THEREFORE. NOTICE is IlEREBY GIVEN THAT: the present Beneliciary nnd/or the Trustee,
andlor the agent of the Trustee, does hereby rescind, cancel and withdrmv said
Notice of Breach and Notice of
Default and Election t Sell; it being understood, however, that this resdssion shall nt in any construed as waiving or affecting any breacb or default past, present at future under
manner be
said Deed or Tnist,or as
impairing any right or remcdy thereunder,but is, and shall be deemed to be, only an clection. without prejudice,
not to cause a sale to he made pursuant to said Notice, and shall no way jeopardize orinipair nny right,
remedy r
privilge secured .to the Beneficiary and/or the Trustee, under said Deed of TlUst, nOr modify nor alter in any
respect any
of the terms, covennnts, conditions or obligations thereof, and said Deed of Trust and all obligations
secured 'hereby are hereby reinstated and shall be and remain in force lind effect the same ~s if said Notice of
Breach and Notice or Default and Election to Sell had not been made and given.
By:
Randy Midc;le~on
FCl!S_NOR_NOD.rpl - (05/12110) / Vcr-12
Pa~e I of I
ORANGE,CA Document: RE 2010.329423
Page 1 of 1
Printed on 811112010 12:56:22 PM
EXHIBITB
Christo her Yoo

From: Sent:
To: Cc:
paul wynn (mnapauI1@gmail.coml
Monday, November 16, 20098:25 PM Christopher Yoo kermitd marsh@yahoo.com Re: Paul Nguyen v. Chase (AI109.964)
Subject:
Except for January 7, 2010, all other dates are opened for me. Please let me know time, date and location. I believe Judge Matz required Notice Filing of this date also.
On Mon, Nov 16, 2009 at 6:52 AM, Christopher Yoo ~cyoo("adorno.com? wrote:
and
settlement conference:
January 7,11,14,21, and 28,2010.
s clerk and she
me the
available dates
are heard at 3:30 pm.
Let us know if
these dates work for you or you would like additional dates in February or March 2010.
XHIBITC
1 MacArthur Place Suite 200 Santa Ana, California 92707

Phone: (714) 852-6800 Fax: (714) 852-6899
www.adorno.com
CALIFORNIA FLORIDA
GEORGIA
MASSACHUSETIS MISSOURI
NEW JERSEY
NEW YORK
TEXAS
WASHINGTON
WASHINGTON, D.C.
Tuyet T. Tran
(714) 852-68DD
ttran@adorno.com
May
27, 2010
VIAFEDEx
Fidelity National Title Insurance Company
Attn: Claims Department
17911 Von Karman Avenue, Suite 300 Irvine, California 92614-6253

Re: Policy No.: 27-041-06-22145
Order No.: 30146667 Borrowers: Paul Nguyen and LauraNguyen Property: 16141 Quartz Street, Westminster, California 92683 NOTICE OF TITLE CLAIM
Dear Sir or Madam:
to represent Chase Bank USA,N.A. ("Chase Bank") and and inmaking a lawsuit the below-referenced Home") in Chase Home Finance LLC ("Chase is the original named insured under claim under the above-referenced title policy. Chase Bank. Title Insurance issued on December 13,2007 under Order Number 30146667 the Loan Policy of Fidelity National Title hsurance Company ("Fidelity"). ("Policy") by
This finn has been retained Paul Nguyen and Laura Nguyen (collectively "Plaintiffs") Bank for the sum of $250,000 ("Loan"). The deed the real property commonly lmownas 16141 ("Subject Property") was recorded on December 12, 2007 Quartz of obtained trust securng the Loan Street, Westminster, California as
a loan from Chase and encumbering 92683
instruent number 2007000731120
in the Orange County Official Records ("DOT"). The DOT identifies Chase Bank as the lender, and Piaintiffs as the borrowers.
enforceability of the DOT is being disputed by ._____~Eiaintiffsjn.JLiaw.suit fi1Qdinfu~JJnitedSJ.at~s Central Distrigt Court andentitled,J-=aul Ngiy,l?l'_
As explained below, the validity and
and Laura Nguyen v. Chase BnkUSA, N.A., et al.,Case No.CV09-4589 AHM (AJWx). A the Second Amended Complaint ("SAC"), which is the operative complaint, is enclosed copy of for your reference in regard to the title claim stated in this letter.
1130552.1
ADORNO Yoss ALVARADO & SMITH

May 27,2010
Page
According to the allegations in the SAC, Plaintiff
Laura Nguyen's signature was
purortedly forged onto the DOT and other documents related to the Loan. See, SAC,,r,r 49-57. against Plaintiffs subsequently defaulted on the Loan and foreclosure proceedings were initiated
the Subject Property.
Based on the purported forgery, Plaintiffs have fied the SAC alleging claims for "fraud by forgery," "rescission and damages pursuant to 12 U.S.C. 1635, etseq.," "damages pursuant to 12 U.S.c. 2607," "unfair business practices," "quiet title," and "preliminary injunction." the DOT due to the alleged forged signature on the See, SAC. In short, Plaintiffs seek to rescind pursuant to the allegations, and DOT and other documents related to the Loan. Based on these Fidelity defense of this action to terms of the subject title policy, Chase Bank hereby tenders its losses sustained by Chase Bank as a result of the claims made and requests indemnity against all
by Plaintiffs.
Accordingly, CLAIM is HEREBY MADE to Fidelityon the above-referenced title policy that Fidelity (i) provide a defense for Chase Bank in the lawsuit and against all such losses resulting from the claims asserted in the lawsuit and (ii) indemnify Chase Bank for all
claims made in the lawsuit.
Upon your receipt of this Notice of Claim, please contact the undersigned to Fidelity wil honor its policy and accept this claim.
acknowledge Fidelity's receipt of this claim and to let us know whether
Sincerely,
ADORNO YOSS ALVARO & SMITH

A Professional Corporation
Tuyet T. Tran
ii .V ~Ur____ V '/..' "j; -
Enclosure
1130552.1
Case 2:09-cv-04589-AHM -AJW Document 131 Filed 10/05/10 Page 30 of 57 Page ID #:1217 Ca e 2:09-cv-04589-Ahiv1-AJW Document 96 Filed 11/2,J1",09 Page 1 of 21
FILO
1 PAUL NGUYN NGUYN

LAUR
2 16141 QUARTZ STREET
3 TELEPHONE: (714) 360-7602
WESTMISTER, CA 92683
In Pro Persona
2009HOV 23 PM 2: 00
CLERK i u.s. DiSTRICT COURt
CEHTR At D1sr. onrA lifo
4 Plaintiffs
5
LOS ANGELES
BY
6
7
8
UNITED STATES
DISTRICT COURT
9 10
1 1
CENTRAL DISTRICT OF CALIFORNIA
i'
12 PAUL NGUYEN, an individual; and LAURA NGUYEN, an individual,

13
Plaintiffs,
14
15
16 .
v.
17
Chase Bank USA, N.A.; Chase Home finance, LLC; First American Loanstar Trustee Services; Joseph SonCao Tran,
18 an Individual; and DOES 1 through 50, inclusive,

19
DEMAND FOR JURY TRIAL
20' Defendants.
21
22
COMES NOW, Plaintiffs PAUL NGUYEN AND LAURA NGUYEN

23
24
(hereinafter "Plaintiffs" or "NGUYEN") file this civil action alleging that their
II
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ii
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SECOND VERIFIED AMENDED COMPLAINT
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INTRODUCTION AND NATURE OF CONTROVERY

2
3
1.
Tnis is a Truth-in- Lending ('TILA") and Real Estate Settlement Procedure AC

("RESPA") case in which Plaintiff
4
5
Paul Nguyen was fraudulently induced to
enter into a loan and PAUL NGUYEN and his wife LAUR NGUYEN
executed a deed of trst encumbering their home ("Mortgage Loan") through the
use of
6 7
8
unfair and deceptive acts and practices in violation ofthe Truth-in-
Lending Act and the Real Estate Settlement Procedures Act, as well as state
laws. Fraudulent representations concerning the payment terms of the Mortgage

Loan were made to the Plaintiffs to induce PAUL NGUYEN to
10
1 1 i i Mortgage Loan. In addition, material
enter into the
disclosures in relation to the Mortgage
12
13
Loan, required pursuant to the Truth-in-Lending Act and its implementing

Regulation, and required pursuant to the Real Estate Settement
Procedures Act
14
15
and its implementing Reguiation, were concealed from the NGUYEN. Nor were
the NGUYEN provided with a proper number of notices of
their right to cancel
16
17 18
the transaction within the time period required by law, all in violation of
PLAINTIFFS' clearly established Tights under federal and state. statutory and
common law. In addition, Defendant Chase
Bank USA N.A., and/or its agent,

Plaintiff
19
intentionally forged the signature of
LAURA NGUYEN onto the Deed
20
21
harming the Plaintiffs as part ofa scheme to prevent the Plaintiffs
of Trust and other documents related to the Mortgage Loan with the intention of knowing
from the true term and conditions ofthe Mortgage Loan
22
23
Mortgage Loan and preventing the Plaintiffs
prior to entering into that

from rescinding the Mortgage Loan
conditions of
24
if and when they ever discovered the true terms and
the MOligage
25
Loan by using the forged Deed of Trust as the basis for arguing that the
... YlaintiifLJight tQ. re~c;ind th~~M2ijgag~ Lq(.!li:I!gerJederal J:~VI~h~g~~pir!a:
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2.
2
3
This action seeks rescission ofthe Mortgage Loan and statutory, compensatory,
and punitive damages to vindicate the violation of
the NGUYEN's federal and
state rights.
3.
4
5
The NGUYEN also seeks punitive damages against the Defendants in order to
punish and set example for the wrongful conduct in violating federal and state
laws resulting in injury and damages to the NGUYEN.
4.
6
7
8
The NGUYEN also seeks reasonable costs oflitigation, including, but not
limited to, attorneys' fees.
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1 1 L i
JURISDICTION AND VENUE

5.
This action arises under 15 U.S.C. 1635,12 C.F.R. 226,15 U.S.C. 2601
and 2614, 12C.F.R. 3500, and under California statutory and common law.
12 13
6.
This Cour has jurisdiction over the Federal c1aimsin this action based on 18
14
15
U.S.c. 1331 and 1343 and 42 U.S.C. 1983 which confer original
jurisdiction on federal distrct courts in suits to
address the deprivation of rights
16
secured by federal law. This
Cour also has supplemental jurisdiction over the

are
17
pendant state law claims becausethe state law claims
so related to the federal
18
claim that they form part of the same case
or controversy under Article III of the
19
United States Constitution, pursuant to 28 U.S.C. 1367.

7.
20
21
The unlawful conduct, ilegaLpractices, andactscomplainedQf alleged iiithis

complaint were all commtted in the Central Distrct of California and the
involved real propert is located in the Central District of California. Therefore,
22
23
venue properly lies in this District, pursuant to 12 U.S.c. 2614 and 28 U.S.C.
1391(b).
II
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25
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II
II
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SECOl\TJ VERIFIED AMENDED COMPLAINT
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PARTIES
2
3
Plaintiff
8.
Plaintiff
PAUL NGUYEN and LAURA NGUYEN are resident ofVvestminster,
4
5
California, and the real propert secured by a deed of trst under the Mortgage
Loan is located in Westminster, California.
6
7
8
Defendants
9.
Plaintiffs are informed and believe, and
thereon allege, that Defendant Chase
Bank USA, N.A. (hereinafter "Chase Bank") is a national banking institution

whose exact business form is unknown and at all times mentioned herein was
10
1 1
conducting business in California. Plaintiffs a informed and believe that

Defendant Chase Bank is the owner of
.l.l
the Mortgage Loan.
12
13
10. Plaintiffs are informed and believe, and thereon allege, that Defendant Chase
Home Finance LLC ("Chase Home Finance") is a wholly owned subsidiary of
Chase Bank and at all times mentioned herein was
14
15
conducting business in
California. Plaintiffs are informed and believe that Defendant Chase Home
Finance is the servicer of
16 17 18
the Mortgage Loan.
1 1. Plaintiffs are informed and believe, and thereon allege, that Defendant First American Loanstar Trustee Services ("Trustee Services") whose exact business
form is unr-..own and at all times mentioned
19
herein was conducting business in
20
21
California. Plaintiffs are informed and believe that Defendant Trustee Services
is the subsequent trstee of the Mortgage Loan and an agent of
Chase Bank.
22
23
12. Plaintiffs are informed and believe, and thereon allege, that Defendant Joseph
Cao Son Tran, a licensed real estate broker and Notary Public which licenses
were issued by the California Department of
24
25
Real Estate, at all time mentioned
herein acting on behalf ofhil1self, Sydney Funding, Nexus Escrow and Realty
. Savers.andis_auJlent a~1illg on behalf of Chase Ban, was conductil1g~"L~11~a~.
26
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in California.
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1
2
3
13. On
FACTS COMMON TO ALL CLAIMS FOR RELIEF

or about October 2007, Joseph Son Cao Tran was a
licensed real estate
4
broker which license was issued by the California Departent of
Real Estate and
employed by REALTY SAVERS, also a California licensed real estate company

who operated under a California designated licensed broker, Nguyen Paul Tuan,
at the time of the events and happenings referred
6 7
8
to herein.
14. Joseph Son Cao Tranrepresented to
Plaintiff
Paul Nguyen that he was properly
licensed under California laws asa mortgage broker and possessed expertise as a
mortgage broker in real estate lending that qualified to serve as Plaintiff
10
11
Nguyen's mortgage broker, and to
Paul
find aresidentialmortgage loan best suited to

situation and needs, and to explain to
12
Plaintiff Paul Nguyen's financial
Plaintiff
13
the details of any proposed residential
mortgage loan.
Paul Nguyen to fill
14
15. Defendant Joseph Son Cao Tran assisted Plaintiff
out the
15
loan application and met with Defendant JosephSonCao Tran multiple times to
provide him with the requested documents
16
17
18
16. Defendant Joseph Son Cao Tran
at Defendant REALTY SAVERS'
offices.
never provided Plaintiff
PAUL NGUYEN with
19
"Good Faith Estimate" ofloan cost.
20
21
l7. On or about November 21,2007, Defendant JosephSonCao Tran represented to

Plaintiff PAUL NGUYEN that he and his company has secured a loan through
Defendant Chase Bank.
loan as an individual
22
23
18. Plaintiff Paul Nguyen agreed to proceed with the mortgage
24
iather than as joint tenant with Plaintiff
Laura
Nguyen.
25
19. On or about December 7, 2007,
Defendaiit JosephSon Cao Tran asked Plaintiff
26 27 28
. _.~~~Faul~Nguyellto--.ome_to..exus~EscIQw JO_~sigILmQitgg.ge ClQG.lmel1 ts :__.___...
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SECOND VERIFIED AMNDED COMPLAINT
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20. Up to December 7, 2007, Defendant Joseph Son Cao Tran didnot provide
Plaintiff
2
3
Paul Nguyen with any document related to the mortgage loan.
121. Neither Defendant Joseph Son Cao TrannOl SYDNEY FUNDING disclosed the
4
5
relationship between SYDNEY FUNDING and NEXUS ESCROW to Plaintiff.

22.
Plaintiff
PAUL NGUYEN appeared at Defendant NEXUS ESCROW on
6 7
8
December 7, 2007 to signed mortgage documents.

23.
Plaintiff LAURA NGUYEN
did not appear at NEXUS ESCROW to sign
documents, nor was requested to do so.

24.
Defendant Joseph Son Cao Tran, acting as a licensed broker in
aranging the
10
11
loan, also appeared at NEXUS ESCROW and acted as notary public of

documents that signed by Plaintiff
PAUL NGUYEN.
12
13
25.
Plaintiff
Paul Nguyen executed a promissory note and security agreement for
that purpose, which transaction is a consumer credit transaction within the

meaning of TIL
14
15
A, 15 U.S.c. 1602 andRegulationZ 226.2.6.

never executed a promissory
26.
Plaintiff
Laura Nguyen
note and security
16
17
agreement for that purpose.

27.
On or about January 2009, Plaintiffs discovered forged signature of
Laura
18
Nguyen to the Deed of
Trust.
19
28.
Plaintiff
Laura Nguyen
never appeared before a notar public, Joseph Son Cao

(2) copies of a Notice of
20
Tran or received two
Right to Cancel from any person
"' 1
'" 1
or entity, or from the notary.

29. Plaintiff Laura Nguyen are informed and believe, and thereon allege, that all
purported signatures of Plaintiff
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Laura Nguyen that were affixed on mortgage
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loan is forgeries which included the deed of trust in connection \vith the
Mortgage Loan and were affixed on said documents by Defendants.
.30.;-A-&-a-fesult.Gf.the.~f.ailure-of.Chae-tQ-pm:v:ide-alLoLthedisclsllIes.r.equired hy_
state and federal law, and as a result of
26 27 28
the false, fraudulent, and/or deceitful
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representations made tothePlaintiffsconceming the tenus of
the Mortgage
2
3
Loan, Plaintiffs are entitled to rescind the Mortgage Loan.

31. On April 6, 2009, Plaintiffs sent via U.S. PosIcertied mail, notified Chase of
4
5
their rescission of the loan under TILA and offer to tender. Additional copies
were also sent via U.S. Post certified mail to Chase Home Finance LLC, c/o
6
7
8
First American Loan Star Trustee Services and JP Morgan Chase Bank, NA clo Chase Home Finance LLC.
32.
Again, on April
13, 2009, Plaintiffs again sent via U.S. Post certied mail,
under TILA and offer to tender.
believe, and
9
notified Chase of their rescission of the loan
10
11
33.
Plaintiffs are also informed and
thereon allege, that the Defendant

disclosing the Truth-insaid
and one or more of
its agents conspired to withhold
12
Lending Disclosure Form required by federal law and that, in furtherance of
13
conspiracy, the Defendant forged Plaintiff Laura
Nguyen's signatures on the

signatures.
14
Deed of Trust or authorized and ratified such forged
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18 19
34. That the Mortgage loan entered into is a federally related mortgage loan as that at 12 U.S.C. Estate Settlement Procedures Act the Real term is defined in
2602(1).
35. Defendants Chase Bank USA, N.A.; Chase Home Finance, LLC; First American
Loanstar Trustee Services; and Joseph Son Cao Tranare individuals and
businesses that regularly offer or extend credit and
20
ri i .. 1
provide applications for
home mortgage to consumers.

36. In addition to acting as the mortgage broker andChase's agent in the transaction
resulting in the entering into of the
22
23
Mortgage Loan, Sydney Funding and Sidney
24
Tran also acted as
the SettlementAgenttli.lOughits wholly owned subsidiary

connection with the
25
NEXUS ESCROW in
consuIlationand closing of the
26 27 28
~~~~~~Mortgage-Loan.~~Nei1beLy-dney-Funding,jts~J2iincil)als nor Cliase ~~L ..~ .~.~~......
disclosed to the Plaintiffs thatthe entity acting as Mortgage Broker would also
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be acting as the Settlement Agent and would be receiving fees and other fuds in
2
connection with such role at any time prior to the delivering of
the final
Settlement Statement to Plaintiff after entering into the lv10rtgage Loan.
4
5
Plaintiffs are informed and believe, and thereon allege, that Chase gave and value
Sydney Funding accepted and received fees, payments and other things of
6 7
8
in return for the referral of the Mortgage Loan by Sydney Funding to Chase.
Such giving accepting of the settlement agent fees and other things of value in
return for the referral of
the Mortgage Loan by Sydney Funding to Chase was in
violation of 12 U.S.C. 2607(a).

37. Plaintiffs are further informed and believe that Defendant Joseph Son Cao Iran
10
1i
12
13
acted as broker in arranging such mortgage loan ilegally acted as notary public.
38. Plaintiffs are informed and believe, and thereon allege, that because of the
forgery of Plaintiff
Laura Nguyen's signature to one or more documents, and
14
because of
the failure to deliver required form under Truth-in-Lending
15
16
17 18 19
Disclosure to the Plaintiffs prior to the closing of the Mortgage Loan, the value services
of Sydney Funding's mortgage brokeringservices and its settlement
provided by its wholly owned subsidiary, Nexus Escrow, was $ 0.00. Plaintiffs'
further allege that, since Sydney Funding and its subsidiary were paid and
received a fee from Chase as mortgage broker in excess of$lO,OOO.OO, such
20
"' 1
" 1
payment to Sydney Funding and its subsidiary represented payment for services
that were not actually performed in violation of 12 U.S.C. 2607(b).
39. The acceptance of fees from Chase by Defendants SYDNEY FUNDING, Sidney
22
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Tran, NEXUS ESCROW, John Nguyen and Joseph Son Cao Tran for performing broker services that were not actually performed and Chase's payment of that fee for broker activities represents an unlawful kickback and/or
-.uBgamed-fee-uuder-RSEAbe.cause_tlie.amQllnt received by these Defen~(l?-t~
24
25
26 27 28
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1
and paid by Chase was not reasonably related to the performance of lawful
services.
40. Plaintiffs are informed and believe, and thereon alege, that Chase should have
2
3
4
5
mown that Sydney Funding, Sidney Tran, Nexus Escrow, John Nguyen, and
Joseph Son Cao Tran did not earn the broker fees because common industr
6 7 8
practices are that lenders follow underwting standards that demand a review of know that
originations by mortgage brokers and, therefore, lenders typically
brokers have performed the services required and in a lawful manner. Plaintiffs
are informed and believe, and thereon allege, that if Chase had reviewed the loan
10
1 i
origination documents properly, either before or after the closing of the

Mortgage Loan, Chase would have learned of the obvious indications that
12
13
Sydney Funding was not properly performng its role as a mortgage broker.
41. Plaintiffs also allege that neither Sydney Funding, Sidney Tran or Joseph Son
14
15
Cao Tran ever offered Plaintiffs the option to pay a lower amount of settlement
fees and charges in addition to failing to disclose to Plaintiffs that Sydney
16 17
Funding would also be performng services as the Settlement Agent through its
wholly owned subsidiary in
connection with the Mortgage Loan and Joseph Son

at the time of settlement.
18
Cao Tran would also be performng notary services
19
42. The agency responsible for enforcing RESPA. and its implementing regulation,
Regulation X, the United
20
21
States Department of Housing and Urban
Development ("HUD"), issued a Statement of Policy in 1 999 establishing two -
22
23
part test for determning the legality of certain lender payment to mortgage
brokers under RESP A as follows:
(1) Vlhether goods or facilities were actually furnished or the servi ces were
actually furished or the services were actually performed for the
24
25
26 27
28
...... ---oompensatioll-paid,-and;----
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1
(2) Whether the payments are reasonably related to the value of the goods or
2
3
facilities that were actually furnished or services that were actually

performed.
43. In 2001, BUD clarified its interpretation of 2607(a) and (b) when it issued its
RESPA Statement of Policy 2001-1 entitled Clarification of Statement of
4
5
Policy
6 7
1999- 1 Regarding Lender Payments to Mortgage Brokers, and Guidance

Concerning Unearned Fees Under Section8(b). ("Statement of
Policy 2001-1.)
BUD's 2001- 1 Policy of Statement explains that the second prong of its two-part
9 10
test to determne the legality of lender payments to mortgage brokers may not be
satisfied when the loan brokers does not offer the borrower the option to pay a
ii
12
13
lower amount of total fees upfront.

44. Plaintiffs are informed and believe, and thereon allege, that Chase and others
knowingly and wilfully conspired and agreed among themselves to commt the
acts described of
14
15
herein with the intent to deprive Plaintiff of an amount to be
deteni1Ined and proven at trial but in an amountthat exceeds $ 15,000.00.

45. Plaintiffs. are informed and believe, and thereon allege, that Chase andits agents
did the acts and things herein alleged
16 17
18
pursuant to, and in furtherance of, the
conspiracy and
above-alleged agreement.
19
46.
Plaintiffs are informed and believe,
and thereon allege, that Chase and its agent

or lend aid and encouragement to, or
20
furthered the conspiracy by cooperation " 1
ratified and adopted the acts of each other.

47. As a proximate result of the nrongful acts herein aleged, Plaintiffs has suffered
22
23
damages in an amount to be determined and proven at trial but in an amount that

exceed $15,000.00.
24
25
48. In conspiring and acting in concert as herein alleged, Chase, either directly or
... . ... ..throughth-GGnduct,authoriz;ation~or~ratification..y_a Chase~QfficeL~din:~ctQi'9I.
26 27
28
managing agent, acted wilfully and with the intent to cause injury to the
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Plaintiff. Chase is guilty of
malice, oppression, and/or fraud in
conscious
2
3
disregard of the Plaintiffs' rights, thereby waranting an assessment of punitive

damages in an amount appropriate to punish Chase and to deter others from
engaging in similar conduct.
4
5
6
FIRST CLAIM FOR
RELIEF
7
(Against
Defendant Chase,.Joseph.SonCao Tran,
and DOES 1 - 50 for Fraud bv Fon!ery)

49.
Plaintiffs re-al1egeand incorporate
by reference in this Claim for Relief each

above.
10
allegation set forth in paragraph 1 through 48
11
50. On or about December 7,2007, Chaseand/or its agents intentionally forged

signature of the Plaintiff Laura Nguyen onto the Deed of
12 13
documents related to the
Trust and other
Mortgage Loan with the intention of harmng the
14
15
Plaintiffs.
51. The forgery by Chase and/or its agents was undertaken as part of a scheme to (i)
prevent Plaintiffs from knowing the true terms and
16
17
Loan prior to entering into that Mortgage Loan
conditions of the Mortgage

(ii) preventing Plaintiffs
and
18
from rescinding the Mortgage Loan if
and
when they ever discover the tre
19
terms and conditions of thel'v1ortgage Loan that the
by using the forged deed of trust as

Plaintiffs' right to rescind the
MortgageLoan
the legal basis for arguing
21
under federal law
had expired.
believe, and
22
52. Plaintiffs are informed and
thereon allege, that Chase and/or its

Laura Nguyen on the Deed
23
agents knew that (i) forged signatures ofthe Plaintiff
24
of Trst and other dOCll'Tents related
to the Mortgage Loan, or (ii) knew of the
25
forged signatures of
the Plaintiff on the DeedofTrust,cOl1spired to defraud the
26 27
28
.._...Plairitiff~-f0F.thereason-that.the Jorged.signatuesoLthe_P-lajntiff LflJJraJig1lY~lL..

on the Deed of Trust and the other documents related to the Mortgage Loan were
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undertaken to further the fraud of concealng from the Plaintiffs the true teims
2
3
defense to any attempted rescission ofthe Mortgage Loan by the
and conditions of the Mortgage Loan and to thereafter create and unlawful
Plaintiffs in the
4
5
event the Plaintiffs discovered the tre terms and conditions of the Mortgage
Loan and attempted to assert their rights of
rescission under California and or
6
7
8
federal law.
53.
The forgery
of
Plaintiff
Laura Nguyen's signature on the Deed of
Trust, in
addition to failure to provide Notice of
Right to Cancel were made with the
intent to deceive Plaintiffs and to deprive them of their rights under California
and federal law.
54.
At the time that the forgeries of Plaintiff
10
11
Laura Nguyen' signatures and
12
13
concealment from PlaintIff of the tre terms and conditions of the Mortgage
Loan, Plaintiffs were unaware of the fact that her signature had been, or were to
be, forged on the Deed of
14
15
Trust and other documents related to the Mortgage

the
Loan and were unaware of the tre terms and conditions of the Mortgage Loan.
16
17
55.
Plaintiffs relied to their detriments onthe aforementioned concealment of
tre terms and conditions of the
Mortgage Loan which concealment was

the disc1 0 sure under
18
effectuated by the withholding of
the Truth-in-Lending as
19
required by federal1aw and by forging the Plaintiffs' signatures on said Deed of

Trust for the fraudulent purpose of
20
21
depriving the
using the forged Deed of Trust as a basis for
22
23
law in the event the Plaintiffs learned the true terms and provisions of
Plaintiffs oftheIr legal rights pursuant to California and federal the
Mortgage Loan.
24
25
56.
the signature of Chase and/or its agents intentionally forged
the Plaintiff on the
Deed of
Trust and
other documents related
to the Mortgage Loan proximately
26 27 28
. .. ... .resulting-in.ha.sli.f.feredby.beth;Plaillti:tIs.-..~~~-~..~.~ ...... .~~
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57. The aforementioned acts, omissions, and fraud by forgery conducted by Chase
2
3
and/or its agents alleged above were fraudulent, malicious and oppressive
conduct which subjected Plaintiffs to cruel and unjust hardship in conscious
disregard of
4
5
Plaintiffs' rights, and constituted despicable conduct by said

and conscious disregard of
Defendants with a wilful
Plaintiffs' rights, so as to
6
7
justify an award of exemplary and punitive damages against said defendants.

SECOND CLAIM FOR RELIEF
8
(Against Defendant Chase, and DOEST - 50forRescission and Damages
Pursuant to .12U .S.C. .1635, et.seg.)
10
11
58. Plaintiffs re-allege and incorporate by reference in this Claim for Relief each
allegation set forth in paragraph 1 through 57
above.
12
13
59. The Mortgage Loan is subject to the federal Truth-in-Lending Act and its
implementing regulation, Regulation Z, becausethe Borrower under the

Mortgage Loan, Paul Nguyen, is an
14
15
individual and not a corporation,
16 17
partership, or other entity, and because llaintiffPaulNguyen used the loan purposes, and because the amount
proceeds for personal, family, or household borrowed was, and is, subject to a finance charge and
is to be repaid in 5 or more
18 19
installments, and because the Mortgage Loanis secured by Plaintiffs' principal

dwelling. Furthermore, the lvlortgage Loan is not subject to any of the
exemptions set forth in the Truth.:in.:Lending Act
20
2
and Regulation Z and it was
not a loan for business purposes.

160.
Because of the
22
23
Mortgage Loan is subject to the Truth-in-Lending Act and
24
Regulation Z, Chase and its agents were required to deliver tothe Plaintiffs, Right to CanceL. Chase and
among other things, Good Faith EstIiiiate,Notice of
25 I its agents failed to deliver the required
disclosures and Right to Cancel to
26 I
2 71-- .~~~Plajntiffbaura-Nguyen-;~.-~~ . . ... ... ..... ...~--_.. . . ~~_._~~~~~ 161. Therefore, the right to rescind the Mortgage Loan is extended to three-years.
28
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62.
Plaintiffs exercised its rights under California and federal
laws by noify Chase,
2
3
Chase Home Finance, and Trustee Servces of rescission of the Mortgage Loan
and tender under such rescission.
63. Chase, Chase Home Finance, and Trustee Services failed to take actions as
4
5
required under the Truth-in-Lending Act and Regulation Z upon receipt of

rescission of the Mortgage Loan.
6 7
8
64. As a direct and proximate result ofDefendants failure to take action in response
to Plaintiffs' proper Notice of
Rescission, Plaintiffs suffered damages in an
amount to be proven at tral.

THIRD CLAIM FOR
10
11
(Against Defendant Chase Home
RELIEF
DOES 1 - 50
Finance,LLC, and
12
for Damages
Pursuant tol2 U.S.C. 2607)
13
65.
Plaintiffs re-allege and incorporate by
reference in this Claim for Relief each

64 above.
14
allegation set forth in paragraph 1 through
15
66. The Mortgage Loan is a federally related mortgage loan and is subject to the
federal Real Estate Procedures Act (RESPA) and
16 17 18
19
its implementing regulation,
Regulation X.
67.
On or about April 8, 2009, Plaintiff
Paul Nguyen sent a Qualified Written
Request ("Qw'R") via U.S. Post Certified lvfail with return receipt to Chase
20
21
Home Finance, LLC.

68. The return receipt indicated that the QWR was delivered to Chase Home
22
23
Finance, LLC on April 8, 2009 and received by J 00 Cowans.

69. The QWR contained information to enable Defendant Chase Home Finance,
LLC to identify Plaintiff Paul Nguyen's loan
24
25
and also contained request for
information of the loan, specifically accumulated late charges and fees despite
.----- 26 _ .----Platntiflsvali-NticeofRescission-of.tli.e-lofrIl-fIldofferto-teIlGer.-
27
28
- 14 -
Case 2:09-cv-04589-AHM -AJW Document 131 Filed 10/05/10 Page 44 of 57 Page ID #:1231 Ca 2:09-cv-04589-Ahl\l-AJW Document 96 Filed 11/2;'1009 Page 15 of 21
70.
The QWR notified Defendant Chase Home Loan, LLC of
the rescission and
2
3
requested Defendant Chase Home Loan, LLC as servicer of the loan to make
necessary correction to the loan such as late charges and fees, accounting of
payment made to date and costs associated with foreclosure so that proper
rescission tender of the loan can be made.
71. Furthermore, Plaintiff requested Chase Home Loan, LLC to make proper credit
4
5
7
8
reporting reflecting Plaintiff's pending Notice ofRescIssion. Plaintiff's QWR. 72.

Defendant Chase Home Finance, LLC never responded to
73. Because the Mortgage Loan is subject toRESPA and Regulation X, all
10
11
Defendants were required to comply with Section 6 of RESP A appearing at 12

U.S.C. 2605. Section 6 violations are further defined
by Regulation X and 24
12
13
C.F.R. 3500.21 (e) as "Duty ofloan servicer to respond to borrower inquiries."

74.
Chase Home Finance violated Section 6 of
Regulation X upon receipt of
14
15
Plaintiffs' Qualified Written Request("QWR") including but not limited to: Plaintiff's Qualified
a. Failure to response and take action upon receipt of
16
17
Written Request as required by laws.

b. Failure to make appropriate corrections in the account of
the borrower,
18
including the crediting of any late
charges orpenalties, and transmit to the

the correction.
credit rating upon receipt of Plaintiffs
19
borrower a written notification of
20
c. Failure to protect Plaintiffs'
"QWR"
21
by continuing to fuish adverse information regarding payment to credit
22
reporting agencies as defined in section
603 of
the Fair Credit Reporting
23
Act, 15 U.S.C. l681a.
24
25
75.
As a direct and proximate
result of the violations ofRESPi~A and Regulation X
by Chase Home Finance,
Plaintiff suffered damages in an amount to be proven
26
, . 1
dl lHdi.
27
28
- 15 -
Case 2:09-cv-04589-AHM -AJW Document 131 Filed 10/05/10 Page 45 of 57 Page ID #:1232 C e 2:09-cv-04589-AhIVl-AJW Document 96 Filed 11/2ol009 Page 16 of 21
1
FOURTH CLAIM FOR
RELIEF
2
3
(Against Defendant Chase, Chase Home Finance, LLC; Joseph Son Cao Tran; Practice - Business
and DOES 1 - 50 Pursuant to CaliorniaUnair Business
4
5
and Professions 17200 et.seq.)
6
7
8
allegation set forth in paragraphs 1 through 75 above.

77. Defendants have falsely, fraudulently and deceitfully represented to the Plaintiffs Plaintiffs as aforesaid which representations were relied upon by the
resulting in consummation of the Mortgage Loan and to the damage of
Plaintiffs
10
i1
12
13
in violation of the Consumer Credit Protection Act, as afmesaid. Finance LLC violated the 78.
These Defendants along with Chase, Chase Home
Real Estate Settlement Procedures Act as set forth herein and the allegations of
which are hereby incorporated in this cause of action by this reference.
79. These Defendants acted in concert with Chase forged the signature of Plaintiff
Laura Nguyen onto the Deed of
14
15
Trust.
16 17 18
80. Such unfair, fraudulent and deceptive acts and omissions, and violation of state
law are unfair business practices and constitute a violation of California

common law and California Business & Professions Code i 7200, et seq.
19
Plaintiffs reserve the right to identify additional unfair, fraudulent, or deceptive practices, or unlawful or unfair practices, by Defendants as may be established
through discovery.
20
21
22
23
81.
As direct and proximate result of
the unfair, fraudulent, and deceptive conduct
describe above, as well as the result of
their unlawful and unfair business
24
25
practices as described above, this Defendant has been and wil be unjustly
enriched.
.82 ;-piain-f'f-s,pursuaIlt-to-CalifOll1ia-Riisinss&llQIessiQilsC~de 1 7 ~Q~,_s.~eJ~ an_...
26 27
order of
this Cour enjoining these Defendants from further withholding and
28
- 16 -
Case 2:09-cv-04589-AHM -AJW Document 131 Filed 10/05/10 Page 46 of 57 Page ID Ca e 2:09-cv-04589-AhIVl-AJW Document 96 Filed 11/2,:I009 Page 17 of 21 #:1233
1
confiscating any of the monies, funds and property due to the
Plaintiffs as a
2
3
result of the unfair business practices alleged herein, and compelling this
Defendant to:
a. Make restitution to Plaintiffs
4
5
fraudulently, and deceptively obtained
for all funds unfairly, unlawfully,

and
retained by all Defendants
6
7
identified herein and/or its agent as a result of the wrongful acts as alleged
herein and their violation of California
common law and California
Business &Professions Code l7200etseq.; and

9
b. Disgorge all revenues
acquired and retained by all Defendants identified

agent asa result of
10
herein and/or its
the unfair, fraudulent, deceptive,

alleged
11
unlawful business practices
herein; and
12
c. To take steps and actions reasonably
and sufficiently necessary to rescind

and all deeds of
13
the Mortgage Loan and to void any
trst or other legal
14
documents pertaining to the property securing the
Mortgage Loan.
of
15
83.
Plaintiffs are entitled
to restitution
their property (tangible and intangible) and

funds
16
money and funds, as that propert, money and
existed priorto the
17
wrongful actions and conduct of alL Defendants
identified herein and/or its
18
agent.
84. Plaintiffs also seek such additional equitablereliefas may be necessary to
provide a
19
20
21
wrongful actions
complete remedy for Defendhl1tsindentifiedherein and/ori ts agent's
and conduct, including without limitation, injunctive relief,
22
23
restitution, and restoration of their unencumbered title interest in the real

property.
, 85.
as Pursuant to federal1aw, Defendants indentifiedherein, acting
24
25
a lender, owed
statutory duties to the Plaintiffs.

-86;--Bespite-the-statutoi:dut-ies-Owed-io-the-PJaintiffs,Defendants id~J1ifie(:Ll1tieilJ_
26
27
28
violated those statutory duties and, as a result thereof, took advantage of its
- 17 -
Case 2:09-cv-04589-AHM -AJW Document 131 Filed 10/05/10 Page 47 of 57 Page ID Ca e 2:09-cv-04589-Ahlv1-AJW Document 96 Filed 11/2012009 Page 18 of 21 #:1234
relationship with the Plaintiffs and has been, and is being, unjustly enriched
2
3
thereby.
87. As a direct and proximate result of the breach of fiduciary duties, these
Defendants have been unjustly enriched, and the Plaintiffs have been damaged
in an amount in excess of$25,000.OO.
4
5
6 7
8
88. These Defendants, in commtting wrongful acts described herein, acted with
malice, fraud, and oppression toward Plaintiffs, in a conscious disregard of
Plaintiffs' rights.
9
FIFTH CLAIM FOR
RELIEF
10
(Against Chase, First American Loanstar Trustee Services

and DOES 1-50
il
12
13
For QUIET TITLECaL.CodeCiv.Proc. 761.010 et.seq.)

1 through 114 above.
allegation set forth in paragraphs
14
90. Defendants Chase and First
American Loanstar Trustee Services wrongfully
15
claim an interest in the Property.

91. The Property's legal description is:
LOT 44 OF TRACT NO. 8977, IN
16
17
THE CITY OF WESTMINSTER,
18 19
RECORDED IN BOOK 369,PAGE(S)46 AND
COUNTY OF ORANGE, STATE OF CALIFORNIA, ASPER MAP 47 OFIVnSCELLANEOUS

COUNTY
20
MAPS, IN THE OFFICE OF THE
RECORDER OF SAID
21
COUNTY.
Assessor's Parcel No.: 107-903-44
22
23
92. Plaintiffs claim title to the Property and seek an order from the Court confirming
24
25
their title.
93. Chase and First American Loanstar Trustee Services claims title to the Property
26
27
28
.by-vrttie-oforged-deed-of-trw;t-andvoided-deed-oLtrust-------94.
A determination is sough as of the filing of
this complaint.
- 18 -
Case 2:09-cv-04589-AHM -AJW Document 131 Filed 10/05/10 Page 48 of 57 Page ID #:1235 Ca 2:09-cv-04589-Al-IVl-AJW Document 96 Filed 11/2ji2009 Page 19 of 21
95. Plaintiffs pray for a determnation of their ttleagainst adverse claim.

2
SIXTH CLAIM FOR
RELIEF
Services For PRELIMINARY
3
(Against All Defendant Chase, and Trustee
4
5
INJUNCTION)
96. Plaintiffs reallege and incorporate by reference in this Claim for Relief each
allegation set forth in paragraphs 1 through95 above.

97.
Plaintiffs move this Court, pursuant to Rule 65 of the Federal Rules of
7
8
Civil
Procedure, for a Preliminary
Injunction against the Defendants enjoining them

any interest putatively held by the Defendants
9
from taking any action to transfer
10
11
in the NGUYEN residence located at 1614 i Quartz Street, Westminster, CA or
to encumber the Plaintiffs interest in that propert. In support of their Motion,

the Plaintiffs state as follows:
a. The Plaintiffs wil
12
13
suffer immediate and irreparable harm if the Defendants

in the NGUYEN
14
should transfer any interest
property;
15
b. Plaintiffs have no adequate remedy at law should the Defendants affect

such a transfer;
c. Plaintiffs are likely to prevail on the merits of their claims;
16 17
18
d. The balance of the hardships tips decidedly in favor of granting the

requested injuncIon, inasmuch as the cost to
19
the Defendants of enjoining
20
21
any such transfer is negligible when compared to the potential harm the
Plaintiffs face if they lose their dwelling and property prior to these
proceedings ending.
22
23
24
25
PRAYER FOR RELIEF

WHEREFORE, Plaintiffs pray forjudgment against these Defendants, as to all
causes-factions~arlo-ilDws--------- . -- - --- --- --27

28
1. For general and special damages according to proof;
- 19 -
Case 2:09-cv-04589-AHM -AJW Document 131 Filed 10/05/10 Page 49 of 57 Page ID #:1236 Ca e 2:09-cv-04589-Ahlv1-AJW Document 96 Filed 11/2,.)I009 Page 20 of 21
1
2. For exemplary and punitive damages;
2
3
3. For Plaintiffs' reasonable attorneys' fees and costs necessar to obtain these
relief;
4. For rescission of
4
5
5. For an order voiding any Deed of
the Mortgage Loan;
Trust in connection with the Mortgage Loan.
6 7
8
6. For permanent injunction against this Defendant, its subsidiary, affiliates, employees, and all persons
successors, agents, servants, officers, directors,
acting in concert with them, directly or indirectly, from engaging in the

improper, unlawful, unfair, fraudulent, and/or deceptive conduct as descried
9 10
1
above and according to proof;

7. For an order of
restitution requiring this Defendant to disgorge all revenues

unlawful, unfair,
12
acquired from Plaintiffs by means of
fraudulent and/or
13
deceptive acts or practices as more fully described above and according to

proof;
8. For prejudgment interest as allowed by law;
14
15
16
17 18
9. For an order that this Defendant involuntary trstee for the proceeds and
property resulting from Chase and/or its agent's wrongful actions of all acquired by them;
money, proceeds and propert wrongfully
19
lO.For declaration and order that this Defendant release and re-convey any deed
of trst or other document signed or entered into and subsequently recorded in
20
21
connection with the Mortgage
Loan;
trst and any other document signed or
22
11 .For an order voiding any deed of
23
entered into by either or both of
the Plaintiffs in connection with the mortgage
24
25 26 27 28
loan;
12.For an order requiring this Defendant to return allI1ol1ies, proceeds, payrreiits,
.. funds,-revenues,-f-ees-and-theJike-acquiredIromeitheLPlaintiff(l~UlI~Sl11t QfQ:r
arising from the Mortgage Loan;
- 20 -
Case 2:09-cv-04589-AHM -AJW Document 131 Filed 10/05/10 Page 50 of 57 Page ID #:1237 C e 2:09-cv-04589-Ahiv1-AJW Document 96 Filed 11/2012009 Page 21 of 21
13.For an order Forfeiture of
return of any loan proceeds;
2
3
l4.For statutory damages according to proof;

is .For costs of suit herein incured; and
16.For such other and further relief as this Court may deem
4
5
just and proper.
Dated: November 21,2009
6 7
8 9
10
11
12
13
LauE%~
VERIFICATION
correct to the best of my
are true and
14
15
16 I verify that the foregoing Verified Second Amended Complaint has been
17 reviewed by me; and that the allegations therein
18 knowledge, information, and belief.
19 I declare under penalty of peijury that the foregoing is true and correct.
.~
20 Executed in Westminster, California on November21, 2009.

21
22
23
24
25
26 27
28
u_--t~.. .. ,
- 21 SECOND VERIFIED AMENDED
COMPLAINT
Page 1 of 1 (800)683-7648 ovemitooxpres .m - MSIE 8.0 Case 2:09-cv-04589-AHM -AJW Document 131 Filed 10/05/10 Page 51 of 57 Page ID #:1238
1111111111111111111111111111111111111111111111111111111111111111111111111111I111I11I111111
20383A1D07 ~\/1
Next Day Overnite .. P
Zone:105
Bill To:20393 Date: 5/28/2010
From:
Lisa West
Alvarado, Smith - Santa Ana

1 MacArthur Place
Ste:200
Santa Ana, CA 92707
9499556800
Billing Reference:AL 109.964
To:Fidelity National Title Insurance
Company Claims Department 17911 Von Karman Avenue Ste:300 Irvine, CA 92614 9999999999
SPECIAL INSTRUCTIONS:
Number of Pieces: 1
Please fold this page in half and place it in the pouch on your shipment. Only one copy is required by Overnlte Express. WARNING; Use only the printed label for shipping. Using a photocopy of this label for shipping purposes Is fraudulent and could resuil In additional billing charges, along with cancelalion of your Overnite Express account or OverniteShip Online Profie. Shiprnents with invalid account or credit card
numbers wil not be delivered.
httos:/ /WViW. overniteexpress.com/ overni teshiponline/ direction! shipmentform. aspx
5/28/2010
EXHIBITD
Christo her Yoo
From: Sent:
To: Cc:
Paul Nguyen (mnapauI1@gmail.comJ Tuesday, August 17, 20104:38 PM Christopher Yoo
mnapauI1@gmail.com
Re: Nguyen et.al. v. Chase et.al Confirmation of our telephone discussion
Subject:
08117/2010
Dear Mr. Yoo: Than you for your time discussing various issues relating to this case.
1. Per our discussion, your co-counsel Tuyet T. Tran is preparing the stipulation to continue trial and leave for
Defendant Chase to file cross-complaint against others on thc issue of forged deed of trust and acknowledgment of Notice of Right to CanceL. As indicated, I am wiling to such stipulation. This stipulation needed to be done as soon as possible because of trial date is scheduled for 09/09/2010.
2. I also informed you that I've unilaterally fied plaintiffs' pre-trial conference statement because your crosscomplaint has not been filed since 05/22/2010. Furthermore, because of the delay in cross-complaint tobe fied by you, the court has set an OSC Re dismissal for failure to prosecute the case and I have no choice but must response to the Court's OSc.
3. You informed me that Chase has filed its claim with title insurance for the forged documents.
4. Your office wil contact magistrate judge and schedule as soon as possible date for mediation and I wil
make myself available to accommodate whatever date magistrate judge is available.

5. I reminded you of
the final pre-trial conference on August 23,2010.
6. I also informed you that I had a discussion with Mr. Marsh, counsel for Mr. Joseph Tran and I will dismiss
Mr. Tran from this action. However, you indicated that Mr. Tran may be subject to cross-complaint by you.
Should the substance of our conversation is different, Please inform me as soon as possible.
Best Regards Paul Nguyen
EXHIBITE
Christo her Yoo
From:
Paul.NguyenlmnapauI1@gmail.comJ
Tuesday, August 31,20109:02 AM Christopher Yoo Re: CV09-4589 Meet and Confer Re. default judgment on Plaintiffs' Second Amended Complaint
Sent:
To:
Subject:
Mr. Y 00: Per your request, accounting of payment to Chase Home Loan as followed: For the period of January 2008 - July 2008: Monthly payment of$I,998.08
09115/2008: Payment of$4,000.00
10114/2008: Payment of $1,998.08

11/13/2008: Payment of$I,998.08
12117/2008: Paymentof$I,998.08 Total payment over the period was: $23,980.80

Regards Paul Nguyen
On Mon, Aug 30, 2010 at 2:33 PM, Christopher Yoo .:cyoo@adorno.com? wrote:
I need your accounting of all payments made to Chase.
S. Christopher Yoo
Santa Ana Offce Adorno Yoss Alvarado & Smith
1 MacArthur Place, Suite 200 Santa Ana, CA 92707
~:.~YY~:.Jt~lgrn.Q...(QJn
Attomeyat Law
il (714)852-6800
il Direct
(7l4) 852-6868
ai Fax: (714) 852-6899 r? cyoo()adorno.com
NOTICE: CONFIDENTIAL AND PRIVILEGED INFORMATION - This email may contain

corrlidential and privileged inaterial for the sole use of the intended reeiperi(s). Any review,
use, distribuiin or diselsure by others is strictly prohibited. If you
are not the intended recipient
(or authorizcd to receive for the recipknt), please contact the sender by reply email am! delete all
copies of this mcssage.
IRS CirculUl' 230 Disclosure: '1'0 insure compliance with requirements by the fRS, we inform you that
any U.S. tax advice contained in this eommunication (including any attachments) is not intended or written
to be used, and cannot be used. for the purpose of (i) avoiding penalties nnder the Internal Revenue Code
PROOF
OF SERVICE
USA, NA.,etal.
2
3
STATE OF CALIFORNIA, COUNTY OF ORANGE

PaulNguyen v. Chase Bank
USDC entralCase No. CV09-4589 AHM(AJWx)

I am einPloyed in the County of Orange, State of California. I am over
4
5
the age
\fd~SALViAfiKt~~~iI:ii~~ca~tlitir1Yla~~:iS~rit:lri~s~lo~O
On October 5,2010, I served the foregoing document described as DEFENDANTS' NOTICE OF MOTION AND MOTION TO ALTER OR AMEND JUDGMENT; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF on the interested parties in this action.
7
8
by
placing the originaland/or a
true
copy thereof
envelope(s), addressed as follows:

SEE ATTACHED. SERVICE
enclosed in (a) sealed
10
11
~ BY REGULAR MAIL: Tdeposited
LIST
such envelope in the mail
t:
en
:
12
13
Place, Santa Ana, California. The envelope was
fully prepaid.
I am "readily familiar" with the firm's
mailed. with postage thereon
at 1 MacArthur
ot
~
'" '"
0 '" .. '" .. ,. ..
14
15
~~~~s~;f~lth6...~iclih:jY%~tifJ~6tBB~i~s~.wlt~~~w~t~'.th~t..~~....~6ti~~.6f\li~at
party served, serviceispresumedinvalidifpostalcancellationdate or meter date is more than one (l) day.after date of deposit for mailing
practice of collection and processing
;, 0 z '"
0
'"
in affidavit.
postage
16 17
18
BY.THE.ACTOFFILINGORSERVICE,.THATTHEDOCUMENT
WAS..PRODUCED ON PAPER
PURCHASED..AS.RECYCLED.
Tele-Faxed a copy of
D D
BYFACSIMILEMACRINE: 1 to the
above facsimile numbers.

OVERNIGHT Drop13oxJocatedat 1 was deposited with delivery
the original document
19
BY..
MAIL: .1depsItedschdc11eritsttheOVrriite
MacArthur Place, Santa
20
21
Express or Federal Express California 92707. The envelope
prepaid.
Ana, fees thereon fully
22
23
(Federal) I declare this Court, at whose direction the
that I amemployed.intheoffice.of a member of service was
made.
the Bar of
24
25
Executed on October 5, 2010, at Santa Ana, Ca ifornia.
26 27
28
PROOF OF SERVICE
1087365.2
SERVICE. LIST
Paul Nguyen v. Chase Bank USA,NA., et at. USDC Central Case No. CV09-4589 AHM (AJWx)
2
3
r~~~!1g~~~n
5
(714) 360-7602-telephone
16141 Quartz Street
6 7
8
Westminster, CA 92683
Plaintiffs in ProPer
Esq.
(949).477- 5050-telephone
T. Robert Finlay Esq.

Christina Daniell e Rovira, 4665 MacArthur
9 10
11
i :
Wright Finlay & Zak LLP Court, Suite 280 Newport Beach, CA92660
(949).477-9200- facsimile
Attorney forUefendant, First

American
Loanstar Trustee Services
Kermit David.Marsh, Esq. Kermit D. MarshLaw Offices 9550 Warner Avenue, Suite 250 Fountain Valley, CA92708
(714).593-2321 -telephone (714) 593..2399-facsimile
Attorney forUefendant, SonCao Tran

aka Doe
12
13
en
ot
~
'"
'"
0 0 .. '" .. ,. ..
14
15
;, 0 z '"
0 '" ~
16 17
18
19
20
21
22
23
24
25
26 27
28
PROOF OF SERVICE
1087365.2

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Case 2:09-cv-04589-AHM -AJW Document 131 #:1188

Filed 10/05/10 Page 1 of 57 Page ID

~aC~~si15f&kmyOO (CA Bar No.1 69442)

ADOltOYOSS ALVARADO & SMITH

UNITED STATES DISTRICT COURT

PAUL NGUYN, an individual; and LAUR NGUYEN, an individual,

JUDGE: Hon. A. Howard Matz

Nexus Escrow, Inc.; Jolm Ng~yen,an

Realty, Inc.; Sidney Tran, an Individual;

through 50, inclusive,

CTRM: "14" 8, 2010 TIME: 10:00 a.m.

NOTICE IS GIVEN that under Rule 60(b)

("FRCP"), on November 8, 2010 at 10:00 a.m. or as

as the matter can

MOTION FOR RELIEF FROM DEFAULT JUDGMENT

Case 2:09-cv-04589-AHM -AJW Document 131 #:1189

Filed 10/05/10 Page 2 of 57 Page ID

N.A. ("Chase Bank")

Chase Home Finance LLC ("Chase

Home," and collectively

"extra-ordinary" circumstance justifying relief

under Rule 60(b)(6).

exceeded its authority in

entering Defendants' default, as any failure to

follow the Court orders was not

fraudulent conduct on the

case. Rule 60(b)(4).

entry of default on August23, 2010.

2010 regarding the

Motion. Therefore,Defendantshaveinet the

7-3. See, Local

ADORNO YOSS ALVARADO & SMITH A Professional Corporation

By: lsi S. Christopher Yoo JOHN M. SORICH S. CHRSTOPHER YOO

HOME FINANCE LLC

Case 2:09-cv-04589-AHM -AJW Document 131 #:1190

Filed 10/05/10 Page 3 of 57 Page ID

I. SUMMARY OF ARGUMENT....................................................................... 1 II. STATEMENT OF RELEVANT FACTS........................................................3 A. Subject Loan..........................................................................................3

C. Defendants' Failure to File Status Report Regarding Status of

Settlement Conference ..........................................................................4

III. DEFENDANTS SHOULD BE

IV. DEFENDANTS SHOULD NOT BE LIABLE

NOT RISE TO THE

VI. FOR THE SAME

REASONS THATTHEDEFAULT JUDGMENT

lICE OF MallON AND MallON 10 DISMISS COMPLAIN I

Case 2:09-cv-04589-AHM -AJW Document 131 #:1191

Filed 10/05/10 Page 4 of 57 Page ID

Community Dental Services v. Tani,

282 F.3d 1164, 1169 (9th Cir 2002)............................................................................9

Employee Painter's Trust v. Ethan Enterprises, Inc.,

480 F.3d 993, 1000 (9th Cir. 2007).............................................................................7

Hot!7 U.tl~O~: 413-14 (1897).....................................................................................10

826 F.2d 915,916-917 (9t1 Cir. 1987) ........................................................................9

ya~9m~od Vi ~qtt9tl~i;: !'ff).....................................................................................8

Case 2:09-cv-04589-AHM -AJW Document 131 #:1192

Filed 10/05/10 Page 5 of 57 Page ID

FRCP Rule 5 5( c). ............. ....................... .... ............. ........................ .........................1, 11

FRCP Rule 60(b)............................................................................................................. 1

FRCP Rule 60(b )(3) ........................................................................................................ 9

FRCP Rule 60(b)(4)........................................................................................................9

Case 2:09-cv-04589-AHM -AJW Document 131 #:1193

Filed 10/05/10 Page 6 of 57 Page ID

MEMORANDUM.OF POINTS AND AUTHORITIES