Https Ecf.azd.Uscourts.gov Cgi-bin Show Temp.pl File=Merged 74007 -1-1333893475

8/2/2019 Https Ecf.azd.Uscourts.gov Cgi-bin Show Temp.pl File=Merged 74007 -1-1333893475

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LAW OFFICES

K ELHOFFER, M ANOLIO & F IRESTONE, PLC9300 E. RAINTREE DRIVE, SUITE 120

SCOTTSDALE, ARIZONA 85260(480) 222-9100

[email protected]

Merrick B. Firestone, SB #012138Veronica L. Manolio, SB #020230

Attorneys for Plaintiff

UNITED STATES DISTRICT COURT

IN AND FOR THE DISTRICT OF ARIZONA

Isaam Mansour,

Plaintiff,v.

Cal-Western Reconveyance Corp; MortgageElectronic Registration Systems; Aurora LoanServices, LLC, et. al. ,

Defendants.

Case No. 2:09-cv-37-PHX-DGC

FIRST AMENDED COMPLAINT(Proposed)

(The Honorable David G. Campbell)

Plaintiff Issam Mansour hereby amends his original Complaint in this action to allege as

follows:

GENERAL ALLEGATIONS

1. Plaintiff, Issam Mansour, is a resident of Maricopa County, Arizona, and has resided

in the State of Arizona at all relevant times.

2. Attached to the original complaint (already on file here) as Exhibit 1 is a certain

Notice of Trustees Sale regarding real property commonly known as 16251 N. 98 th Place,

Scottsdale, Arizona 85260, [hereinafter the subject property], which is located in Maricopa

County, Arizona. Plaintiff is the true owner in fee of the subject property.

3. Defendant Cal-Western Reconveyance Corporation (Cal-Western) is a business

entity located in El Cajon, California, and, upon information and belief, is a corporation organized

under the laws of the State of California.

Case 2:09-cv-00037-DGC Document 15 Filed 02/06/09 Page 1 of 8


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4. Upon further information and belief, Cal-Western acts as the Trustee for the subject

property and has scheduled a Trustees Sale on the subject property.

5. Defendant Mortgage Electronic Registration, Inc. (MERS) is a corporation

organized under the laws of the State of Delaware. Upon further information and belief, MERS is

the alleged beneficiary of the Deed of Trust on the subject property and directed the Trustee to

proceed under a power of sale to foreclose on the subject property.

6. Defendant Aurora Loan Services, LLC (Aurora Loan Services) is A Lehman

Brothers Company with a customer service mailing address in Nebraska. Upon information and

belief, Aurora Loan Services is a corporation organized under the laws of the State of Colorado andmaintains its corporate headquarters in Littleton, Colorado. Upon further information and belief,

Aurora Loan Services is assisting MERS in some capacity (the extent to which remains to be

ascertained) with the foreclosure on the subject property.

7. The Notice of Trustees Sale was issued by Defendant Cal-Western, at the insistence

of Defendant MERS and/or Defendant Aurora Loan Services.

8. Defendants Cal-Western, MERS, and/or Aurora Loan Services are proceeding toward

a Trustees Sale of the subject property ostensibly to collect the unpaid balance on the Note secured

by the security instrument that is recorded on October 31, 2006 in the Office of the County Recorder

for Maricopa County as Document No. 2006-14400018 [hereinafter the security instrument].

9. Upon information and belief, Defendants MERS and/or Aurora Loan Services were

not the holders of the Note identified in the security instrument, are not in possession of the original

Note properly endorsed to them, nor are they otherwise entitled by either federal law or Arizona law

to initiate foreclosure under the security instrument.

10. Because Defendants MERS and/or Aurora Loan Services are not in possession of the

original Note endorsed to them at the time of the Trustees Sale, they do not have the right to initiate

foreclosure under the security instrument nor the right to direct Defendant Cal-Western to foreclose

and sell the subject property owned by Plaintiff. Defendants knew or reasonably should have known



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that they had no right to foreclose on the security instrument unless and until they actually has in

their possession the original Note properly endorsed to them or assigned to them as of a date

preceding the notice of default recorded by the Trustee.

11. Defendant Cal-Wester has been put on notice of Plaintiffs claim that MERS and/or

Aurora Loan Services has no present right to initiate foreclosure and has made demand to Cal-

Western to suspend any foreclosure sale unless and until it has obtained proof that MERS and/or

Aurora Loan Services actually possesses the original Note properly endorsed to it or assigned to it

as of a date preceding the Notice of Default recorded by Cal-Western.

12. Plaintiff, through his attorneys, has demanded proof from any of the Defendants of

their right to proceed in foreclosure. No such proof has been provided.

13. Defendant Cal-Western has failed to provide proof and has refused to suspend the

foreclosure proceedings indefinitely and is hereby named for purposes of declaratory and/or

injunctive relief, and not affirmatively for damages.

14. Plaintiff, through his attorneys, has further demanded a detailed accounting of how

the state amount(s) necessary to be paid to redeem the subject property from foreclosure has been

calculated so that Plaintiff could adequately evaluate his rights under the law with a pre-sale right

of redemption. The Defendants have failed to respond adequately and have prevented Plaintiff from

determining whether any or all of the charges included in the payoff demand are justified,

appropriate, and proper under the terms of his obligation (as defined in the security instrument).

15. In pursuing non-judicial foreclosure, Defendants represented that they had the right

to payment under the Note, payment of which was secured by the security instrument. The true facts

were that they were not in possession of the Note and they were not either holders of the Note or

non-holders of the Note entitled to payment, as the terms are used in the Uniform Commercial Code

3301, 3309, and therefore they were proceeding to foreclose non-judicially without right under

the law. Further, upon information and belief, Defendants added costs and charges to the payoff

amount of the Note that were not justified and proper under the terms of the Note or the law.



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16. The Defendants misrepresented the facts intending to either force Plaintiff to pay

large sums of money to Defendants to which they were not entitled under the law, or to abandon

Plaintiffs property to foreclosure sale.

17. As a result of all of the Defendants actions, Plaintiff has been damaged in having to

hire attorneys before bringing this action, and Plaintiff has had to and will have to incur attorneys

fees to stop the wrongful acts of the Defendants. Plaintiff has been damaged in other ways that are

not readily apparent at this time, but will amend this complaint as further damages are determined.

JURISDICTION AND VENUE

18. Defendants removed this case from the Maricopa County Superior Court pursuant

to 28 U.S.C. 1331 and 1441 on grounds that federal question jurisdiction exists. Plaintiff does not

dispute the jurisdiction of this court nor the removal to this Court. Moreover, this case involves a

property that is located in Maricopa, Arizona and seeks relief under the declaratory judgments act.

Accordingly, this Court has jurisdiction pursuant to 28 U.S.C 1332(a)(1) and 2201, and

supplemental jurisdiction pursuant to 28 U.S.C 1367(a).

19. Venue is proper in this Court pursuant to 28 U.S.C 1391(a)(2) because a substantial

part of the property that is the subject of this action is situated in this district.

20. Since filing the original Complaint in this Court, each Defendant has appeared and/or

answered, and no party disputed Jurisdiction or Venue in this Court.

CAUSES OF ACTION

COUNT ONE(Declaratory Relief)

21. Plaintiff incorporates each of the allegations set forth in the foregoing paragraphs by

this reference as if fully set forth verbatim in this Count.

22. Pursuant to 28 U.S.C. 2201, this Court has the power to declare the rights, status and

other legal relations of the parties as it pertains to the subject property which is at issue.



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23. There is now existing between the parties involved in this proceeding an actual

justiciable controversy within the jurisdiction of this Court in which Plaintiff is entitled to have a

declaration of their rights, status and other legal relations in regard to the real property described in

Exhibit 1 to the Complaint and the illegal claims of title by these Defendants. See 28 U.S.C 2201.

24. As a result of the (mis)conduct described in this Complaint, Plaintiff is entitled to a

declaration that Defendants were not legally entitled to enforce the underlying promissory Note

described in the security instrument that is identified in Exhibit 1 to the Complaint (on file).

25. Because Defendants were not entitled to enforce the underlying promissory Note

described in the security instrument, Plaintiff specifically seeks a declaration that Defendants have

no legal claim to title on the subject property and cannot conduct a Trustees Sale.

26. As Defendants have no legal claim to title on the subject property, any Trustees Sale

will become invalid as a matter of law. Plaintiff therefore seeks a further declaration that a Trustees

Sale conducted on the subject property will be deemed invalid, null and void.

27. Because a Trustees Sale will be held invalid ab initio , Plaintiff seeks a declaration

that there cannot be a bona fide purchaser for value of the subject property via Trustee Sale.

COUNT TWO(Injunctive Relief)



29. This Court has the power to enjoin Defendants from any conduct that would be

irreparable to the Plaintiff until such time as the legal issue(s) can be resolved.

30. Plaintiff specifically seeks an injunction prohibiting Defendants from taking further

actions to sell the subject property, from attempting to forcibly remove Plaintiff from the subject

property and/or from taking any steps to further re-sell, re-convey or otherwise dispose of the subject

property pending this litigation. Until this Court is able to issue a ruling on the substantive legal

issues raised, Plaintiff respectfully asks this Court to enjoin Defendants from these acts.



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COUNT THREE(Violation of Statutes - Uniform Commercial Code; A.R.S. 47-3101)



32. Under the Uniform Commercial Code (UCC), codified at A.R.S. 47-3101, et. seq .

a promissory note is a negotiable instrument. Under the law of negotiable instruments, Defendants

must be in possession of the original Note(s) in order to foreclose on the subject property.

33. Through the conduct described in this amended Complaint, Defendants have

attempted to collect on a debt, have attempted to complete a foreclosure and Trustee Sale, and have

attempted to oust the Plaintiff from his home when they were never legally entitled as they do not

possess the original Note.

34. In taking such actions, Defendants have violated the UCC and state statutes per se

Defendants have caused damages to the Plaintiff, including that Plaintiff has been made to incur

attorneys fees and costs to defend his legal rights, and Defendants are liable for these damages.

COUNT FOUR(RESPA/Unfair Debt Collection Practices)



36. Through the conduct described in this Complaint, Defendants have attempted to

collect on a debt to which they are not legally entitled and have used non-judicial means to collect.

37. Defendants, in taking the actions aforementioned, have violated provisions of the

Federal Fair Debt Collection Practices Act, 15 U.S.C., Title 41, Subchap. V, 1692 et. seq. , by

making false, deceptive, or misleading representations through unfair and unconscionable means

regarding the alleged debt relating to the subject property.

38. Defendants have also violated provisions of the Real Estate Settlement Procedures

Act (RESPA), 12 U.S.C. 2601-2617.



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COUNT FIVE(Predatory Lending Practices)



40. Assuming, arguendo, that Defendants MERS and/or Aurora Loan Services do have

the right under the law of negotiable instruments, by endorsement, assignment, agency or otherwise,

to receive payment under a valid Note, payment of which is secured by the security instrument, to

initiate foreclosure under a power of sale contained therein (if any), then these Defendants are

subject to defenses that would have been available against SCME, the initial Lender identified in the

security instrument.

41. Plaintiff is informed and believes that Defendants have engaged in deceptive practices

with respect to Plaintiff in violation of the Home Ownership and Equity Protection Act ("HOEPA"),

15 U.S.C. 1637, the Truth in Lending Act ("TILA"), 15 U.S.C. 1601, Regulation Z, 12 C.F.R.

226, and the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. 41-58, the specifics of which

are unknown, but which are subject to discovery and with respect to which the specifics will be

alleged by amendment to this Complaint when ascertained.

42. Plaintiff believes that Defendants engaged in one or more of the predatory lending

practices referred to in the previous paragraph permits and will, as discovery reveals such practices,

amend this Complaint when the full details of the Defendants practices are ascertained.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff prays that:

A. This Court declare that Defendants are not entitled to enforce the underlyingpromissory Note described in the security instrument;

B. This Court declare that Defendants have no legal claim to title on the subjectproperty;



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C. This Court declare a Trustees Sale held on the subject property would be invalid;

D. This Court declare that there cannot be a bona fide purchaser for value of the subjectproperty due to the invalidity of any Trustees Sale to be held;

E. Plaintiff be awarded monetary damages against Defendants, jointly and severally, forbeing forced to file and litigate this action;

F. Plaintiff be awarded statutory damages for Unfair Debt Collection practices underthe federal and Arizona statutes;

G. Attorneys fees be awarded to Plaintiff as may be permitted by law;

H. Plaintiff be awarded treble damages as permitted by law;

I. That prejudgment interest be awarded to Plaintiff as permitted by law; and

J. For such other and further equitable relief, declaratory relief and legal damages asmay be permitted by law and as the court may consider just and proper.

RESPECTFULLY SUBMITTED this 2 nd day of February, 2009.

KELHOFFER, MANOLIO & FIRESTONE, PLC

/s/ Veronica L. ManolioMerrick B. FirestoneVeronica L. Manolio9300 E. Raintree Drive, Suite 120Scottsdale, Arizona 85260

Attorneys for Plaintiff



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Case 2:09-cv-00037-DGC Document 15-1 Filed 02/06/09 Page 1 of 4


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