wamu, 2nd amended complaint, , 2010-09-17 01 (2)
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UNITED STATES DISTRICT COURT
FORTHE
DISTRICTOF VERMONT
ERNEST J. CICCOTELLI )
Plaintiff ))
v. ) Case No. 5:10-cv-00016-cr )
WASHINGTON MUTUAL, INC., )WASHINGTON MUTUAL BANK, )MORTGAGE TRUST GROUP, INC., )DONALD LAPLUME, )J.P. MORGAN CHASE & CO., )JAMES (JAMIE) DIMON, )FEDERAL DEPOSIT INSURANCE )
COMPANY, AND )SHEILA C. BAIR )
Defendants )
SECOND AMENDED COMPLAINT
NOW COMES Plaintiff, ERNEST J. CICCOTELLI, Pro Se, with his SECOND
AMENDED COMPLAINT, and in support of his complaint states the following:
PARTIES, JURISDICTION AND VENUE
1. Plaintiff, Ernest J. Ciccotelli, resides 49 Tigertown Road, in Norwich, Vermont, with his
two sons, in the home that he designed and built in 1990; Plaintiffs residence is the real
property that is the subject of the Mortgage and secures the Note which are the objects of
this complaint.
2. Defendant, Washington Mutual Inc. (WMI), a corporation duly formed in the Sate of
Washington with a principal place of business at 9200 Oakdale Avenue, Chatsworth,
California 91311, doing significant, regular business within the State of Vermont.
3. Defendant, Washington Mutual Bank (singly, WMB, and together with Washington
Mutual, Inc, WaMu), duly formed in the Sate of Washington with a principal place of
business at 9200 Oakdale Avenue, Chatsworth, California 91311, doing significant,
regular business within the State of Vermont.
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4. Defendant, Mortgage Trust Group, Inc. (the Agency), a corporation duly formed in the
Sate of Massachusetts with a principal place of business at108 Grove Street, Worcester,
Massachusetts 01605, and duly licensed to provide loan brokerage services in Vermont,
license number LL5313 and license number MB379 is the agency for the Lender.
5. Defendant, Donald LaPlume, agent and loan broker employed by the Agency Inc. (the
Agent), with a residence at 14 East Street, Claremont, New Hampshire 03743 is the
agent for the Lender.
6. Defendant, J.P. Morgan Chase & Co., in conjunction with its subsidiary, J.P. Morgan
Chase Bank, N.A., (both referred to singularly as JPMC), a corporation duly formed in
the State of Delaware, with a principal place of business at 270 Park Avenue, New York,
New York 10017, doing significant, regular business within the State of Vermont.
7. Defendant James Jamie Dimon, Chairman and Chief Executive Officer of Defendant
JP Morgan Chase & Co., with an office and principal place of business at 270 Park
Avenue, New York, New York 10017.
8. Defendant Federal Deposit Insurance Corporation (FDIC), Receiver for Defendant
Washington Mutual Bank and standing in its place in this matter, with a principle place of
business at 550 17th Street NW, Washington, D.C. 20429.
9. Defendant Sheila C. Bair, Chairman of Defendant FDIC, with an office and principle
place of business at 550 17th Street NW, Room MB-6028, Washington, D.C. 20429.
10. In this action Plaintiff seeks damages for violations of the State of Vermonts laws
regarding, among others, mortgages and notes, contracts, fraud, and larceny, said
violations occurring within the State of Vermont, and therefore jurisdiction and venue are
properly with this court.
FACTS
(In order to comply with the requirement for pleadings to be concise as possible, Facts as
originally presented in the previous complaints have been removed, however, Plaintiff reservesthe right to reintroduce such facts as have been adduced in previous versions of this complaint.)
11. Washington Mutual Bank, a subsidiary of Washington Mutual Inc., is a debt collector
12. that serviced a note (the Note) for a loan to refinance Plaintiffs home and a mortgage
securing the Note (singularly, the Mortgage, and together with the Note, referred to as
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the Loan) from the Plaintiff.
13. The Lender shown on the mortgage is Long Beach Mortgage Company (LBMC), is the
only mortgagee of record; no assignments or successors are shown in the record.
14. JP Morgan Chase & Co. purchased the banking assets of Washington Mutual Bank from
the Federal Deposit Insurance Corporation when WMB failed and was put into
Receivership by the Office of Thrift Supervision, said assets included Plaintiffs
mortgage and note on his property at 49 Tigertown Road, in Norwich, Vermont, on or
about September 25, 2008.
15. An investigation of the Norwich Land Records made on July 17, 2008, shows that there
is no record in the Norwich Land Records showing that either WMB or WMI were
assigned the Loan by Long Beach Mortgage Company, nor does the record show that
either WMB or WMI owned or held the Loan, and that neither WMB nor WMI were the
mortgagee of record.
16. A subsequent investigation of the Norwich Land Records made on August 12, 2010,
shows that there is no record in the Norwich Land Records showing that JP Morgan
Chase & Co., or any subsidiary thereof has been assigned the Loan by Long Beach
Mortgage Company, nor does the record show that JPMC owns or holds the loan, nor
does the record show that JPMC is the mortgagee of record.
17. Said investigation of the Norwich Land Records shows no other assignee or successor to
Long Beach Mortgage Company.
18. An investigation conducted on or around July 18, 2008, of the Corporations Division of
the Office of the Delaware Secretary of State, where Long Beach Mortgage Company is
duly incorporated reveals that Long Beach Mortgage Company has been dissolved.
19. The note and mortgage which secures it are on Plaintiffs home at 49 Tigertown Road, in
Norwich, Vermont (the Property); the Mortgage is recorded in the Norwich Land
Records in Book 174, Pages 514-533.
20. The Loan documents are dated September 19, 2005.
21. The account number for the Loan is 0696363456.
22. The terms of the Note were $165,000, 30 years, at 7.70% starting on November 1, 2005,
with an initial payment of $1,176.38 per month.
23. No escrow was withheld or required to be withheld at the time of the closing of the loan.
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24. The Board of Listers for the Town of Norwich, Vermont assessed at that time, and
continues to assess the property at the present time, for $310,000.
25. In preparation for the loan, Richard Tracy of Sharon, Vermont, the appraiser hired by the
Agent or Agency, appraised Plaintiffs home for $450,000, in July, 2005.
26. Depending on which assessment is used, Plaintiffs debt to value ratio is either 0.53
(mortgage:$165,000/Listers assessment:$310,000 = .53) or .37 (mortgage:
$165,000/Lenders appraisers assessment: $450,000 = .37.
27. The header of the Note states that it is a FIXED/ADJUSTABLE RATE NOTE.
28. Not clearly apparent within the text of the Note is a reference that the first interest rate
adjustment occurs on October 1, 2007, and changes every 6 months thereafter.
29. On October 1, 2007, the rate changed to 9.700%, and the regular payment made by
Plaintiff was raised to $1,402.78 per month, an increase of 19% over the original
payment amount.
30. The index that the Loans rate is based on is the LIBOR for 6 month dollar deposits, on a
date that is 45 days prior to each scheduled rate adjustment date.
31. The calculation of the adjusted rate is 4.990% added to the index, an amount
approximately 2 to 3 percentage points higher than an index based on Treasury Bills (T-
Bills) used for most Adjustable Rate Mortgages (ARMs) and the ARMs that Plaintiff
had personal experience with.
32. If Plaintiff loses the Property through acceleration of the Note and foreclosure on the
Mortgage, 1) he will lose the equity he has built up in the Property over the course of
over 20 years, 2) he will suffer defamation of character through negative reports on his
credit report, and 3) he (and his sons) will suffer severe emotional distress for losing a
possession the property that is irreplaceable and the major emotional touchstone of
his sons lives and his own, for which he paid an unusually heavy price in foregoing a
lucrative career in Boston as a medical devices engineer so that his sons could be raised
in Vermont as their mother had been raised.
(Counts I through IV have been dismissed by order of the Court. Remaining counts retain their
original numbers.)
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COUNT V
FRAUD IN THE INDUCEMENT
33. Plaintiff repleads paragraphs 1 through 32, above, and further states:
34. Agent made misleading and false statements regarding the benefits to Plaintiff of the
Loan on numerous occasions.
35. Agent made false or misleading statements minimizing the difficulty of refinancing the
Loan when its interest rate was adjusted to a level that would guarantee that monthly
payments would become onerous on numerous occasions.
36. Agent made false or misleading statements regarding the manner in which the Loan
would benefit Agents and Plaintiffs business relationship on numerous occasions.
37. Agent withheld material information regarding the index upon which the interest rate of
the Loan is based.
38. Agent withheld material information regarding the securitization and difficulties that
would cause Plaintiff in his performance of the Loan.
39. Agent made said false or misleading statements in order to induce Plaintiff into agreeing
to the Loan, despite the higher interest rate on the Loan than the prior mortgages that
Plaintiff was paying at the time he applied for the Loan.
40. Plaintiff relied on Agents statements: had Agent not made said false or misleading
statements, and had Agent provided said material information, Plaintiff would not have
agreed to undertake performance on the Loan, which,
41. But for being induced to agree to the Loan, Plaintiffs Property would not now be in
jeopardy of foreclosure, and Plaintiff would not be at risk of financial loss therefrom.
42. Defendants WaMu and JPMC vicariously liable for Agents actions because they
controlled Agents actions at the inception and closing of the Loan, or they continue to
enjoy the benefits of the Loan, or both.
43. Defendants fraud has made Plaintiffs credit history worse, resulting in higher expenses
for Plaintiff, has caused Plaintiff serious emotional distress, caused difficulty for his
business and loss of income, and has threatened Plaintiffs continued ownership of his
home and the equity he has in it.
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COUNT VI
FRAUD PURSUANT TO 9 V.S.A. Chapter 63: Consumer Fraud
44. Plaintiff repleads paragraphs 1 through 43, above, and further states:
45. Mortgagee of record is Long Beach Mortgage Company.
46. Mortgagee of record is no longer an active corporation and has been dissolved.
47. Lender began to collect monthly Mortgage payments beginning October 1, 2005.
48. Lender is not mortgagee of record.
49. Lenders collection of payments on the Mortgage and Note is fraud, because there is no
record, notice or other evidence that the Mortgage was assigned or transferred to Lender
from Long Beach Mortgage Company, and Lender has no right to collect said payments.
50. Defendants WaMu and JPMC claims to be the mortgagee are fraudulent because they have
knowingly, deliberately, and maliciously misrepresented themselves to Plaintiff to be the
mortgagee for the Mortgage in order to obtain the monthly mortgage payments due the true
mortgagee, if any.
51. Defendants WaMu and JPMC have committed ongoing fraud against Plaintiff because the
wrongfully claims to be entitled to Plaintiffs mortgage payments.
52. Defendants WaMu and JPMC did not originate the Loan, they have not paid the owners of
the Loan to take title to the Mortgage, and do not make payments from Plaintiffs payments
to the owners of the Mortgage.
53. JPMC is defrauding not only Plaintiff, but also the owners, if they still exist, of the Mortgage.
54. Defendants have failed to identify the owners of the mortgage, and attempted to claim
ownership of the mortgage themselves.
55. Attempts by WaMu, JPMC or FDIC to recreate or relocate so-called lost documents so as to
support their contention that JPMC is the current legal owner of the Note and Mortgage is
fraud.
56. Defendants fraud is caused and continues to cause Plaintiff to incorrectly appear to be in
default on payments of the actual owners of the Loan.
57. Defendants fraud will result in the loss of Plaintiffs home and equity through foreclosure or
other actions if Defendants are not enjoined from action of this or similar nature against
Plaintiff.
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COUNT VII
BREACH OF CONTRACT
58. Plaintiff repleads paragraphs 1 through 57, above, and further states:
59. The Lender deliberately precipitated the default for the Plaintiff when it had the option to
avoid doing so, not as a means to protect its investment in the Loan, but rather merely to
maximize its profit, by shortening the time period during which Plaintiff can repay the Loan
than the Lender had agreed to in the Note and Mortgage.
60. The Lender is forcing Plaintiffs default so as to provide the Lender a pretext for accelerating
the Loan and initiating a foreclosure on the Property.
61. Defendant has failed to perform by deliberately, knowingly, and maliciously
violating material terms of the Agreement, including, among others, the repayment period
of the Mortgage, which is for thirty (30) years.
62. Defendants breach of contract has made Plaintiffs credit history worse, resulting in higher
expenses for Plaintiff, has caused Plaintiff serious emotional distress, caused difficulty for his
business and loss of income, and has threatened Plaintiffs continued ownership of his home
and the equity he has in it.
COUNT VIII
TORTIOUS INTERFERENCE WITH CONTRACTUAL OBLIGATIONS
63. Plaintiff repleads paragraphs 1 through 62, above, and further states:
64. In addition to deliberately, knowingly, and maliciously interfering with Plaintiffs
contractual obligation under the Mortgage and the Note, Defendants have also
deliberately, knowingly, and maliciously interfered with Plaintiffs performance on other
contractual obligations.
65. Defendants have interfered with Plaintiffs other contractual obligations by
increasing the payments required from Plaintiff to Defendants, thereby reducing the
amount of funds Plaintiff has available for payment of the other contractual obligations,
causing Plaintiff to be in arrears on the debts related to the other contractual obligations
and delinquent on those obligations.
66. Defendants interference with Plaintiffs contractual relations has made Plaintiffs credit
history worse, resulting in higher expenses for Plaintiff, has caused Plaintiff serious
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emotional distress, caused difficulty for his business and loss of income, and has threatened
Plaintiffs continued ownership of his home and the equity he has in it.
COUNT IX
CONSUMER PROTECTIONPURSUANT TO 8 V.S.A. 10404
67. Plaintiff repleads paragraphs 1 through 66, above, and further states:
68. Lender has established an escrow account incident to the Note and Mortgage for
the purpose of paying Property Taxes.
69. Lender requires Plaintiff to deposit into said escrow account a greater sum than is
sufficient to pay taxes.
70. The greater sum required by Lender has caused Plaintiff to be unable to make the
monthly Mortgage payments in a timely manner, providing Lender with a pretext to
foreclose on Plaintiffs Property.
71. The greater sum required by Defendants has made Plaintiffs credit history worse, resulting
in higher expenses for Plaintiff, has caused Plaintiff serious emotional distress, caused
difficulty for his business and loss of income, and has threatened Plaintiffs continued
ownership of his home and the equity he has in it.
COUNT XCONSUMER FRAUD
PURSUANT TO 9 V.S.A. 2453 and 2457
72. Plaintiff repleads paragraphs 1 through 71, and further states:
73. Defendants made repeated assertions that Plaintiff would be able to refinance the
Loan when it was scheduled for an interest rate increase.
74. Defendants made repeated assertions that the Loan would benefit Plaintiff and his
business relationship with the Agent.
75. Plaintiff relied on Defendants assertions in his decision to agree to the Loan.
76. Moreover, Defendants have failed to provide services related to the Loan in the
manner and of the nature offered, and have refused to provide services related to the Loan
in accordance with other terms and conditions of the offer.
77. Defendants intended to violate Consumer Fraud laws of Vermont.
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78. Defendants violation of the Consumer Fraud law if Vermont has made Plaintiffs credit
history worse, resulting in higher expenses for Plaintiff, has caused Plaintiff serious
emotional distress, caused difficulty for his business and loss of income, and has threatened
Plaintiffs continued ownership of his home and the equity he has in it.
COUNT XI
UNCONSCIONABLE CONTRACT
PURSUANT TO 9A V.S.A. 2-302
79. Plaintiff restates paragraphs 1 through 78, above, and further states:
80. Through foreclosure precipitated by the Lender under the pretext of protecting its
investments created through the exercise of a redundant right incorporated into the
Mortgage, said right being only to create the pretext for foreclosure in the first place.
81. Defendants were and are in far better positions than Plaintiff to determine the effects of the
economy and market on Plaintiffs ability to make payments, yet they chose to draft Note and
Mortgage documents that disregarded the potential difficulties for Plaintiff that any
reasonable person with experience in drafting such documents would have been familiar
with, thereby denying Plaintiff the ability to continue to perform his obligations under the
Note and Mortgage when changes in circumstances beyond his control occurred.
82. Defendants were aware of the small size of the Loan relative to the high value of the Property
securing the Loan and the ease with which they could dispose of the Property in the event of
their own need to dispose of it.
83. Defendants did not negotiate or bargain with Plaintiff during the application and agreement
process for the Loan, but rather, Defendants dictated to Plaintiff the conditions he had to
adhere to, without negotiation of any sort between the parties.
84. Defendants drafted the Note and Mortgage with no negotiation, bargaining, or input from
Plaintiff.
85. Defendants drafted the Note and Mortgage to maximize their own benefits from the Loan
while eliminating all risk to themselves, while maximizing Plaintiffs risks of loss from the
Loan without providing any proportionate benefit to Plaintiff.
86. Defendants drafted the Note and Mortgage to facilitate the fabrication of the pretext
necessary to produce the circumstances required for foreclosure on the Property.
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87. Defendants drafted the Note and Mortgage in such a manner as to allow them to avoid having
to investigate the actual real estate tax consequences on the Property.
88. Defendants drafted the Note and Mortgage in such a manner to avoid investigating the
manner that the Town of Norwich enforces or chooses not to enforce its property tax
enforcement prerogatives.
89. Defendants deliberately, knowingly, and maliciously are engaging in actions so as to deprive
Plaintiff of the value of his Property.
90. Combined with promises and statements made by Defendants, particularly Agent, inducing
Plaintiff to accept the Note and Mortgage, and combined with Plaintiffs understanding that
if he did not accept the Mortgage and Note, and did not accept the Loan, that he would be
unable to obtain financing on his home for an extended period of time, Plaintiff believed that
he had no alternative but to agree to and accept the Loan.
91. Defendants unconscionable contract has made Plaintiffs credit history worse, resulting in
higher expenses for Plaintiff, has caused Plaintiff serious emotional distress, caused difficulty
for his business and loss of income, and has threatened Plaintiffs continued ownership of his
home and the equity he has in it.
COUNT XII
VIOLATION OF IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING
92. Plaintiff restates paragraphs 1 through 91, above, and further states:
93. Defendants have deliberately, willfully, and maliciously resisted any and all
attempts by Plaintiff to modify the Loan in order that he could perform his obligations,
and accommodate the substantial necessitous circumstances that had occurred in his life
unexpectedly.
94. Defendants have deliberately, willfully, and maliciously formed a corporate
structure designed to resist or eliminate any and all attempts at meaningful
communication between customers, specifically Plaintiff, and the Defendants.
95. In November, 2007, during the time that Plaintiff attempted to initiate
modification of the Loan, WaMus representatives never informed Plaintiff that WaMu
had paid off Plaintiffs property tax bill, and nor that WaMu had changed the balance that
he owed them.
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96. On January 31, 2008, Plaintiff received his IRS form 1098 for 2007 from the Lender,
showing that he had paid $13,563.18 in interest on the loan, and $7,877.66 in taxes.
97. The tax payments were for delinquent taxes that Plaintiff owed the Town of Norwich,
Vermont for the one-half the tax year 2005-2006, and for tax year 2006-2007.
98. Plaintiffs taxes for tax year 2007-2008 had been paid in full at the time that the Lender
had investigated the towns tax rolls, and when it paid the back taxes. Defendants have
ignored the fact that the town did not exercise its tax sale rights, nor threaten to exercise
its tax sale rights, and Defendants refused to inquire into why that may have been,
because the Defendants wanted to propagate a pretext that they were innocently
exercising a right it had written into the contract between Plaintiff as borrower and itself
in order to protect its investment, which pretext would have been negated had Defendants
allowed evidence to be developed that would show that it knew that its investment was
protected by Vermont law and the fact that the Loan was for an amount far lower than a
reasonable market price for the Property would fetch; in other words, Defendants were
engaging in the bad faith refuge of corporate scoundrels - that is, plausible deniability of
a nefarious motive for its actions.
99. Defendants instituted an escrow account, however, the escrow account statement states
that the shortage of escrow is $13,723.34, an amount far in excess of any yearly tax bill
applied to Plaintiffs property - almost three time as high as Plaintiffs tax bill for any
one year.
100 The latest tax bill applied to the Property, for the fiscal year July 1, 2007 through June 30,
2008, issued on July 12, 2007, is $5,066.42, which was paid in full by Plaintiff and the
State of Vermont under the income sensitivity provisions of Vermont tax law, by
February 15, 2008, the due date for the final payment of that fiscal year.
101. Defendants have demanded that Plaintiff pay the amount of $13,723.34 over a
unreasonably short period of time, and has given Plaintiff the option to make payments
over the course of, at first, 12 months starting April 1, 2008, and subsequently, 36 months
(the de minimus change referred to elsewhere in this complaint), or pay the amount in full
on that date.
102. The monthly payments, including the escrow and shortfall, have risen to
$2,991.40, from $1,402.78, which is an increase, itself, from the $1,176.38 that Plaintiff
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was originally paying and that Plaintiff believed that he could pay on a long term
monthly basis, and was the basis on his decision to agree to the Loan in the first place.
103 On June 29, 2008, Plaintiff contacted the WaMu to cancel a previously arranged
electronic withdrawal from Plaintiffs bank account because Plaintiff knew the account
would have insufficient funds to make the payment on June 30, and received a
confirmation number 1565341350, confirming the cancellation of the withdrawal, and
during the same call informed the WaMu that Plaintiff would be making the payment on
June 30, 2008, with the payment being drawn on an alternate account.
104 On June 30, 2008, Plaintiff contacted WaMu by telephone and made the payment
promised the day before from an alternate account, and received confirmation number
1565346532 confirming the payment.
105 On or around July 3, 2008, Plaintiff learned while viewing his account via
internet, that despite the confirmed cancellation, WaMu had attempted to withdraw the
cancelled payment on July 1, 2008, but the payment was not honored because, as Plaintiff
had informed WaMu in advance, there were insufficient funds in the account to make the
withdrawal from; however, the attempted withdrawal caused numerous checks that for
which there had been sufficient funds to cover to also not be honored, causing numerous
returned check fees.
106 On or around July 8, 2008, Plaintiff received a Home Loan Statement June
2008 from WaMu, dated June 30, 2008, which purported to show account activity since
June 27, 2008, and which implied that WaMu had received the June 30 payment made
from the alternate account, and that the total amount due on July 1, 2008 would be
$4,430.09.
107 On or around July 9, 2008, without authority, WaMu withdrew or attempted to
withdraw for a second time from Plaintiffs bank account, the payment cancelled on June
29, described above, said withdrawal causing again another tidal wave of overdrafts and
fees.
108 The WaMu could have restrained itself from exercising its rights to pay Plaintiffs back taxes
or to demand immediate repayment and establishment of an escrow account, but it did not.
109 The WaMu has not acted in good faith, because it deliberately and knowingly did not
examine the Plaintiffs record in total, including Plaintiffs record of tax payments, and has
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deliberately and knowingly blinded itself to the fact that at no time during the course of
Plaintiffs 24 year history as a mortgagor, has his real property ever been threatened with a
tax sale or other similar financial distress, nor, in fact, did the WaMu bother to recognize that
there had been no threats by the town of a tax sale, because the finance department of the
town was aware of Plaintiffs history of always paying his property tax bill, not necessarily
on time, but always in full, and it was also aware of the financial difficulties Plaintiff faced
due to his prolonged recuperation from the complications of the kidney donation described
earlier in this complaint.
110 Had the WaMu examined Plaintiffs record in total, the WaMu would then have come to the
reasonable conclusion, based on Plaintiffs history, that he poses no risk to the WaMus
investment in Plaintiffs real property, and further the WaMu would have concluded that it
had no need to assert its right to pay the back taxes, demand reimbursement for the payments,
and demand escrow payments.
111 Instead the WaMu has deliberately and knowingly chosen to compound and exacerbate any
difficulty Plaintiff could possibly have with payments on the Note and Mortgage, by adding
the taxes and escrow to Plaintiffs monthly payments, essentially doubling or tripling his
monthly payments, with only 6 weeks notice.
112 The payment of the taxes occurred immediately subsequent to the mortgage being arbitrarily
and capriciously adjusted upwards merely because it was the WaMus prerogative to do so,
rather than because there was any necessity related to the actual circumstances of the Loan
for the WaMu to do so.
113 Defendants, as well as Plaintiff, are obligated to observe the covenant of good
faith and fair dealing implied in every contract so as to insure that both will act with
faithfulness to an agreed common purpose that of Defendants making the Loan to
Plaintiff, and of Plaintiff repaying the Loan in reasonably sized installments over the
course of 30 years and consistency with the justified expectations of each of the parties.
(See Century Partners, LP v. Lesser Goldsmith Enterprises, LTD., 2008 VT 40 at
paragraph 21.)
114 Defendants have interfered with or failed to cooperate with Plaintiffs
performance, thus they have acted in bad faith. (See Century Partners, LP v. Lesser
Goldsmith Enterprises, LTD., 2008 VT 40 at paragraph 26.)
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115 Defendants has demonstrated actual malice toward Plaintiff , shown by conduct
manifesting ill will of the Defendants representatives rude and harassing behavior when
communicating with Plaintiff, evidencing oppression by unilaterally taking actions that a
reasonable person would know were unable to be defended against by Plaintiff, and
showing a reckless and wanton disregard of Plaintiffs rights in this matter, even though
Plaintiff alerted Lender to the need to modify the Loan as early as May, 2007. (See
Monahan v. GMAC Mortgage Corp., 2005 VT 110 at paragraph 4.)
116 Defendants have taken advantage of necessitous circumstances of Plaintiff. (See
Monahan v. GMAC Mortgage Corp., 2005 VT 110 at paragraph 44.)
117. Defendants attempted to make two (2) separate unauthorized withdrawals from
Plaintiffs checking account, despite being notified that they were not permitted to make
such withdrawals, and despite Defendants acknowledgement of notice that they were not
permitted to make such withdrawals.
118. The actions taken by Defendants have instead shown their unwillingness to
observe the above-described covenant of good faith and fair dealing.
119. The actions taken by Defendants have undermined the Plaintiffs rights to receive
the benefit of the agreement to take the Loan, while on the other hand, their acts have
enhanced the Defendants own benefits.
120 Defendants have engaged in conduct that has the character of outrage frequently
associated with crime. (See Monahan v. GMAC Mortgage Corp., 2005 VT 110 at
paragraph 63.)
121 Because of Defendants violation of the implied warranty of good faith and fair
dealing, this Honorable Court is requested to find that the contract between Plaintiffs and
any of the Defendants is void and has no force in law, and that Defendants should be
enjoined from enforcing any rights under the contract.
COUNT XIII
VIOLATION OF IMPLIED COVENANT NOT TO INTERFERE
WITH OTHER PARTYS PERFORMANCE
122 Plaintiff repleads paragraphs 1 through 121, above, and further states:
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123. Defendants have interfered with or failed to cooperate with Plaintiff in his
performance of his obligations under the contract.
124. Defendants have a duty to avoid interference with Plaintiffs performance under
the Loan contract.
125. Defendants also have a duty to mitigate damages due to alleged non-performance
of another party, but Defendants have failed to take any action or to permit Plaintiff to
take any action that could reasonably be expected to resolve the problems caused by
Lenders increases in monthly Mortgage payments and other acts described above.
126 Lenders fractured corporate structure prevented and continues to prevent Plaintiff
from taking any actions to mitigate the results of the actions of Defendants, and said
fractured corporate structure was deliberately, knowingly and maliciously designed and
put in to discourage Defendants customers, specifically Plaintiff, from being able to
resolve or mitigate problems with loans made by Lender, particularly the Loan.
127. Therefore, this Honorable Court is requested to issue an order that the contract,
specifically the Mortgage and Note, are unenforceable and have no force in law.
COUNT XIV
UNJUST ENRICHMENT
128 Plaintiff restates paragraphs 1 through 127, above, and further states:
129 Defendants have deliberately, knowingly, and maliciously interfered with
Plaintiffs obligation to perform under the contract comprised of the Note and Mortgage,
and in doing so have eliminated all risks to themselves, and have transferred all risks of
the Note and Mortgage to Plaintiff.
130 Defendants have been unjustly enriched if they proceed with acceleration and
foreclosure on the Property because Lender will have obtained fees and interest payments
in the amount of at least $36,315.00 for less than 32 months of their own performance
before they began to interfere with Plaintiffs performance, without providing Plaintiff
the benefit of a loan with the repayment term of 30 years (360 months) as agreed upon in
the Note and Mortgage.
131. Defendants stand to benefit unjustly from their actions and the damages they have
caused to Plaintiff, all at the expense and to the detriment of Plaintiff.
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132 Defendants failure to compensate Plaintiff and to benefit from their actions is
inequitable and unlawful.
133. Therefore, this Honorable Court is requested to find that although no contract
exists between Plaintiff and Defendant, that Defendants have been unjustly enriched by
Plaintiffs payments to date.
COUNT XV
ONGOING FRAUD
134 Plaintiff repleads statements 1 through 133, above, and further states:
135 During at least two telephone conversations with Defendant WaMu, WaMu told Plaintiff that
WaMu had not initiated the property tax delinquency investigation, and that the Town of
Norwich Finance Office had sent WaMu the tax delinquency information of its own volition,and without any prompting or inquiry from Lender.
136 The Town of Norwich did not send the tax delinquency information of its own volition, and
in fact, WaMu had initiated the inquiry into Plaintiffs tax status and requested Plaintiffs tax
status information from the Town without any input from the Town of Norwich.
137 WaMu initiated the inquiry and requested the information at the same time as Plaintiffs
monthly payments increased about 20% due to an adjustable interest rate increase.
138 WaMu deliberately, knowingly, and maliciously made false statements on at least two
separate occasions in order to mislead Plaintiff regarding the initiation of the tax inquiry so
as to deflect responsibility for the difficulty Plaintiff encountered making his monthly
Mortgage payments onto a third party, and to make it difficult if not impossible for Plaintiff
to resolve the problems caused by the precipitous increase in his monthly Mortgage
payments.
COUNT XVI
DEFAMATION
PURSUANT TO 8 V.S.A. 4724
139 Plaintiff repleads paragraphs 1 through 138, above, and further states:
140 Defendants have engaged in making, publishing, disseminating, or circulating, directly or
indirectly, or encouraging the making, publishing, disseminating, or circulating, oral or
written statement which is false or maliciously critical of or derogatory to the financial
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condition of Plaintiff and is calculated to injure Plaintiff, to wit: Defendants have
deliberately, knowingly, and maliciously caused, or permitted to be caused, damage to
Plaintiffs reputation, and damage to Plaintiffs credit history regarding mortgage payments.
141. Damage to Plaintiffs credit history will result in economic loss due to loss of opportunity
to borrow necessary funds for business and personal purposes.
142 Defendants failure to compensate Plaintiff for the aforesaid damage to his credit history is
inequitable and in violation of Vermont Law, and has caused Plaintiff severe economic loss,
personally and professionally.
COUNT XVII
UNCONSCIONABLE CONTRACT AS THE PRODUCT OF UNFAIR DEALINGS
143 Plaintiff repleads paragraphs 1 through 142, above, and further states:
144 The manner by which Plaintiffs eligibility for the Loan, and eligibility for modification or
refinancing of the Loan by Lender is determined is discriminatory and arbitrary the Loan is
predatory and made in bad faith and unfair.
145. Defendants manner of determining Plaintiffs eligibility for the Loan and for
modification or refinancing of the Loan by Lender is based on arbitrary and capricious
standards that bear little relation to Plaintiffs circumstances, and provide Lender with no
knowledge of Plaintiffs actual eligibility.
146. Defendants deliberate, knowing, and malicious persistence in using said arbitrary and
capricious standards provides Defendants with specious arguments against assisting Plaintiff
in avoiding foreclosure on his Property, and demonstrates Defendants bad faith and unfair
dealing with Plaintiff.
COUNT XVIII
ADHESION CONTRACT
147 Plaintiff restates paragraphs 1 through 146 above, and further states:
148. In the agreement that was drafted by Defendants with no negotiation, bargaining, or other
input from Plaintiff, Defendants suffer no detriment or risk, by including contingencies over
which only they had control, such as paying delinquent taxes, and which enable them to
obtain the entire amount of the Loan with no risk to themselves, since the Loan to value ratio
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was so low as to guarantee that the Defendants would suffer no risk should the Plaintiff
default on the Loan.
149. The Loan was offered to Plaintiff strictly on a take it or leave it basis.
150. Plaintiff was not afforded realistic or reasonable opportunity to bargain for Loan.
151. Under those circumstances, Plaintiff was unable to obtain the loan services he actually
required and continues to require.
152 The Loan as drafted by the Defendants is excessive and onerous, deliberately and maliciously
designed and guaranteed to be defaulted upon, and unconscionable.
COUNT XIX
MORTGAGEE CORPORATE CHARTER EXPIRED, NO MORTGAGEE OF
RECORD, MORTGAGE MAY BE DISCHARGED
PURSUANT TO 27 V.S.A. 469
153 Plaintiff repleads paragraphs 1 through 152, above, and further states:
154. The only mortgagee of record in Long Beach Mortgage Company.
155. The chain of title regarding the mortgage in this matter is irretrievably broken.
156 An investigation conducted on or around July 18, 2008, of the Corporations
Division of the Office of the Delaware Secretary of State, where Long Beach Mortgage
Company was duly incorporated reveals that Long Beach Mortgage Company has been
dissolved.
157. The mortgagee and lender of record was Long Beach Mortgage Company, which
was extinguished in 2006 when it was merged with Washington Mutual Bank.
158. Washington Mutual Bank did not record the assignment or transfer of the
mortgage to itself, thus there is no record of Washington Mutual Bank as the mortgagee
for the loan.
159. Washington Mutual Bank was not the mortgagee because the mortgage and loan
were divided up among numerous investors, none of whom can be identified, and none of
whom have recorded their interest in the mortgage.
160. Washington Mutual Bank failed on September 25, 2008, and ceased to exist.
161. Washington Mutual Banks assets, worth $307 Billion dollars, were transferred
to J.P. Morgan Chase and Company for the purchase price of $1.88 Billion Dollars, or for
an amount of money approximately equal to 6/10ths of one (1) cent on the dollar of the
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value of the assets, by the Federal Deposit Insurance Corporation, which purchase price
was not paid to the investors who owned the mortgage, meaning that the mortgage was
not purchased from its owners, and thus title to the mortgage was not transferred and the
chain of title was broken.
162. The investors who had interest in the mortgage and loan lost all benefits of their
interest in the mortgage and loan when Washington Mutual Bank failed.
163. Pursuant to 27 V.S.A. 469:
When it appears from the record of a mortgage on real estate that such mortgage is
undischarged, and the mortgagee named therein, or the assignee of such mortgage, is a
private corporation whose charter has expired by it own limitation, or has been dissolved
by operation of law, forfeiture, or for any other reason, a complaint may be brought to the
presiding judge of the superior court of the county wherein such mortgage is recorded
and, after such hearing as said presiding judge may direct, if he is satisfied that the
conditions have been complied with, and have no force in law, and is further satisfied that
there is no person within the state having authority to discharge such mortgage, he may
direct an order discharging such mortgage. Such proceedings shall be without taxation of
costs except that the moving party shall bear the costs of such notice as said presiding
judge may order.
164. Therefore, the conditions of the mortgage have been complied with, insofar as is
possible, since the mortgagees no longer exist and their interests were not properly
transferred to legitimate successors, and thus have no force in law.
165 Moreover, Because the Loan is unconscionable and an adhesion contract, and
because Lender has interfered with Plaintiffs performance on the Loan, and for any and
all other reasons stated above, the Loan is unenforceable and void, and therefore, the
conditions of the mortgage have been complied with, and have no force in law.
166. No person within the state of Vermont is able to prove that they legitimately or
properly have the authority to discharge the mortgage.
167 Therefore, this Honorable Court is requested to direct an order discharging
Plaintiffs mortgage.
COUNT XX
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12 U.S.C. 1823 VIOLATES THE FIRST AMENDMENT
168 Plaintiff repleads paragraphs 1 through 167, above, and further states:
169. 12 U.S.C. 1823, and in particular 1823(e), unconstitutionally deprives Plaintiff
of his first amendment rights to free association, because under the statute, the
government may force Plaintiff to associate or enter into a contract with an entity which
Plaintiff has never had a desire, intent, or inclination to associate or enter into a contract
with, said entity in this case being JP Morgan Chase and Co (JPMC).
170 Freedom of Association is a fundamental right protected by the First Amendment.
SeeNAACP v. Alabama, 357 U.S. 449 (1958).
171. Therefore, Plaintiff requests that this Honorable Court find that 12 U.S.C. 1823
is unconstitutional, and that Plaintiffs case may not be dismissed on grounds based on
said statute.
COUNT XXI
12 U.S.C. 1823 VIOLATES THE FIFTH AMENDMENT
172 Plaintiff repleads paragraphs 1 through 171, above, and further states:
173 The statute unconstitutionally deprives Plaintiff of his property rights under Amendment
V, because it permits the government to give the right to foreclose on his property and
deprive him of his property to JPMC, knowing that JPMC will, or is likely to, exercise
foreclosure prerogatives, for the purpose of stabilizing the national economy among other
things, which constitutes a public use of Plaintiffs property for which Plaintiffs property
is taken without just compensation.
174. The Fifth Amendment clearly states, in part: nor shall private property be taken
for public use without just compensation.
175. Therefore, Plaintiff requests that this Honorable Court find that 12 U.S.C. 1823
is unconstitutional, and that Plaintiffs case may not be dismissed on grounds based on
said statute.
COUNT XXII
12 U.S.C. 1823 VIOLATES SEPARATIONOF POWERS
OF THE BRANCHES OF GOVERNMENT
176. Plaintiff repleads paragraphs 1 through 175, above, and further states:
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177 The present suit was originally filed on or about July 29, 2008, and was clearly in the
hands of the judiciary well before the failure of WMB, its seizure by OTS, and sale to
JPMC by FDIC on September 25, 2008.
178 The statute unconstitutionally causes a breach of the Constitutional barriers between the
governmental branches, because it permits the Executive Branch to intrude on the
Constitutional prerogatives of the Judicial Branch: the statute permits the FDIC, a part of
the Executive Branch, to extinguish a plaintiffs rights, specifically those of the Plaintiff,
to be heard in a court of law, to sue, and to access judicial review of his case, after
Plaintiff has filed suit against a bank, without due process (in fact, without notice) and
without review of his claims by a court of proper jurisdiction.
179 Therefore, Plaintiff requests that this Honorable Court find that 12 U.S.C. 1823 is
unconstitutional, and that Plaintiffs case cannot be dismissed on grounds based on said
statute.
COUNT XXIII
12 U.S.C. 1823 VIOLATES DUE PROCESS GUARANTEES
180 Plaintiff repleads paragraphs1through 179, above, and further states:
181 The statute is not carefully tailored to achieve the goals of the government, and it is not
the least restrictive or least harmful means to achieve such goals, since the statute is
based on circumstances and conditions that existed in 1950, when the statute was passed,
and which no longer exist, or which have changed materially, substantially and
dramatically in the 60 years since the statute was passed.
182 The US Supreme Court has held that The purpose behind section 1823(e), enacted in
1950, is to enable the FDIC, in deciding how to proceed with respect to a troubled bank,
to make a quick and certain inventory of the banks assets. It can do this only if it can
disregard secret oral agreements that may impair the value of those assets.Federal
Deposit Ins. Corp. v. ONeil, 809 F.2d 350, 353 (7th Cir. 1987) This exercise of
judgment requires [the] FDIC to measure its loss under the insured deposit payoff
alternative against the loss under a purchase and assumption transaction. To calculate
possible loss under the purchase and assumption transaction as opposed to a payoff of
insured deposits, all of the failed banks assets must be evaluated o determine the price to
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be paid by the assuming bank for acceptable assets. The process of evaluation must be
undertaken quicklyThe special protection given FDIC is Sec. 1823(e) facilitates this
process by allowing FDIC to rely on the books and records of the bank in deciding
whether to undertake a purchase and assumption transaction and in buying assets
unacceptable to the assuming bank. Federal Deposit Insurance Corp. v. Merchants
National Bank of Mobile, 725 F.2d 634m 638 (11th Cir. 1984).
183 Computers and other technology and practices have obsoleted the need for the provisions
of 1823(e), since it is now feasible for a bank and FDIC to evaluate assets and claims
related to any individual account or asset, among other things, as evidenced by the fact
that WaMu and the Delaware District Bankruptcy Court in the bankruptcy proceedings
there, both institutions, which have thousands of claimants and claims to deal with, were
able to locate Plaintiff, and specifically contact and communicate with him, and to
discuss in detail Plaintiffs claims.
184 Therefore FDIC and assuming banks no longer require the convenience of avoiding due
diligence and of avoiding the requirements of justice and equity for borrowers and
claimant, specifically including Plaintiff.
a. The fact the FDIC and JPMC did not separate assets with related claims including
Plaintiffs, and instead simply lumped them all together, and then cited 1823(e) as the
means to defeat the claims, while unjustly enriching JPMC, should at least raise
suspicions that there was improper, fraudulent, or even criminal cooperation, or
collusion, between FDIC and JPMC.
185 In fact, the statute permits a government agency, specifically FDIC, to unilaterally, and
peremptorily contribute the private property of one person, specifically the Plaintiff here,
to another private entity, in this case JPMC, thereby unjustly and inequitably enriching
said entity while depriving Plaintiff of his Constitutional, property, and other rights.
Thus, 12 U.S.C. 1823(e) facilitates the unconstitutional taking of private property,
through the forced transference of money from Plaintiff to JPMC.
186 Therefore, this Honorable Court must find that 12 U.S.C. 1823(e) deprives Plaintiff of
his Constitutional and Civil rights, thus the statute is unconstitutional and invalid.
COUNT XXIV
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UNJUST ENRICHMENT
187 Plaint repleads paragraphs 1 through 186, above, and further states:
188 Defendant JPMC will be unjustly enriched because it has not entered into a contract with
Plaintiff, yet is entitled under 1823 to simply demand Plaintiff pay JPMC.
189 Defendant JPMC has provided no services to Plaintiff.
190. Defendant JPMC has had no contact with Plaintiff.
191. Defendant JPMCs only relationship with Plaintiff is to collect payments from
Plaintiff while providing Plaintiff no service or product of any sort, as the result of
governmental fiat by FDIC.
192. Therefore, Plaintiff requests that this Honorable Court find that Defendant JPMC
has no contract with Plaintiff, that JPMC is not entitled to collect payments from JPMC,
and that no quasi-contract exists between Plaintiff and Defendant JPMC.
COUNT XXV
CONTRACT UNENFORCEABLE
193 Plaintiff repleads paragraphs 1 through 192, above, and further states:
194 The contract between Plaintiff and JPMC is unenforceable because it is not mutually
bargained for agreement, but rather it is a relationship forced upon Plaintiff by a
governmental agency dictate.
195. The relationship between Plaintiff and JPMC is coercive in nature
196 Plaintiff has entered, and is not able to enter into the relationship with JPMC freely and
voluntarily.
197. Plaintiff would not voluntarily enter into a contractual relationship with
Defendant JPMC under any circumstances.
198. Therefore, Plaintiff requests that this Honorable Court find that Plaintiff did not
enter into a contractual relationship with Defendant JPMC, and that Plaintiff has no
obligations to perform for JPMC.
Count XXVI
VIOLATION OF PLAINTIFFS CIVIL RIGHTS
199 Plaintiff restates Paragraphs 1 through 198, above, and further states:
200 42 U.S.C. 1983 provides that Every person who, under color of any statute, ordinance,
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regulation, custom, or usage, of any State or Territory or the District of Columbia,
subjects, or causes to be subjected, any citizen of the United States or other person within
the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured
by the Constitution and laws, shall be liable to the party injured in an action at law, suit in
equity, or other proper proceeding for redress, except that in any action brought against a
judicial officer for an act or omission taken in such officer's judicial capacity, injunctive
relief shall not be granted unless a declaratory decree was violated or declaratory relief
was unavailable. For the purposes of this section, any Act of Congress applicable
exclusively to the District of Columbia shall be considered to be a statute of the District
of Columbia
201 FDIC, a governmental agency, itself and through its agents, including its Chairperson,
Defendant Sheila Bair, has deprived Plaintiff of his civil rights, including, but not limited
to, his rights under the First Amendment to freely associate and enter into contracts, and
his property rights under the Fifth Amendment, and his rights to be heard in a court of
law or equity.
202 Defendants, specifically FDIC, have petitioned the Court to replace Washington Mutual
Bank in this case, and its petition has been granted, and therefore it is a Party in this case.
203 Defendants have used 12 U.S.C. 1823(e) for improper purposes; although the statute
when it was first enacted weighed the need for expediency in supporting the financial
system against the rights of individual claimants, and choosing a sort of lesser of two
evils, depriving claimants of their rights or stability of the financial system for the benefit
of the society at large, because the technology of the time did not permit both sets of
interests to be weighed equally, it is no longer true or necessary that the interests of the
individual claimants conflict with those of the society at large, nor is it true that there still
exists no means to evaluate individual claims without disturbing the smooth repair of the
financial system for the benefit of society at large. Therefore, continued invocation of 12
U.S.C. 1823(e) is no longer necessary to support the financial system for the benefit of
the society at large, and to continue such invocation of the statute would at the very least
give the impression of the improper use of the statute, if not demonstrate such improper
use. An improper use would be, for instance, the transfer of assets from a failed bank,
and fabricating a need for speed in the transference so as to hide the improper
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relationship between FDIC and the assuming bank, FDIC would invoke 1823(e) in order
to rush the transfer, and eliminate any liabilities attached to the assets, as a means to do a
favor to the assuming bank, before anyone had the time to look carefully at the
transaction and halt it.
204 Defendants subjected or caused Plaintiff to be subjected to the deprivation of any rights,
privileges, or immunities secured by the Constitution and laws either directly or through
vicarious liability as the employer of employees engaged in the duties for which they
were authorized to carry out on behalf of their employers, said duties subjecting Plaintiffs
or causing Plaintiffs to be subjected to the deprivation of any rights, privileges, or
immunities secured by the Constitution and laws, and are therefore liable to the Plaintiff
for injuries and for redress thereof, and any damages authorized by law and such other
remedies as deemed just and equitable.
Count XXVII
VIOLATION OF PLAINTIFFS CIVIL RIGHTS
205 Plaintiff restates Paragraphs1 through 204, above, and further states:
206 FDIC, a governmental agency, itself and through its agents, including its Chairperson,
Defendant Sheila Bair, has denied Plaintiff his right to redress under the Constitution, by
invoking 12 U.S.C. 1823(e) in order to deliberately and willfully extinguish Plaintiffs
right to be heard in a court of law, and to eliminate Plaintiffs claims filed with the Court
before FDIC made the conveyance of Plaintiffs loan to JPMC, thus preventing the Court
from hearing the claims and judging them on their merit.
207 Defendants have denied Plaintiff his right to a trial by jury guaranteed by the Seventh
Amendment by invoking 12 U.S.C. 1823(e) in order to deliberately and willfully
extinguish Plaintiffs right to be heard in a court of law, and to eliminate Plaintiffs
claims filed with the Court before FDIC made the conveyance of Plaintiffs loan to
JPMC, thus preventing a jury from hearing and finding the facts of the case.
208 Defendants subjected or caused Plaintiff to be subjected to the deprivation of rights,
privileges, or immunities secured by the Constitution and laws either directly or through
vicarious liability as the employer of employees engaged in the duties for which they
were authorized to carry out on behalf of their employers, said duties subjecting Plaintiffs
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or causing Plaintiffs to be subjected to the deprivation of any rights, privileges, or
immunities secured by the Constitution and laws, and are therefore liable to the Plaintiff
for injuries and for redress thereof, and any damages authorized by law and such other
remedies as deemed just and equitable.
Count XXVIII
VIOLATION OF PLAINTIFFS CIVIL RIGHTS
209 Plaintiff restates Paragraphs 1through 208 above, and further states:
210 FDIC, a government agency, itself or through its agents or both, including its Chair,
Defendant Sheila Bair, has denied Plaintiff his First Amendment rights, forcing him to
associate with and enter into a contractual relationship with a private corporation,
specifically, JPMC, with which he had heretofore, and has now, no desire, intention, orwillingness to associate with or enter into a contractual relationship with.
211 Defendants subjected or caused Plaintiff to be subjected to the deprivation of any rights,
privileges, or immunities secured by the Constitution and laws either directly or through
vicarious liability as the employer of employees engaged in the duties for which they
were authorized to carry out on behalf of their employers, said duties subjecting Plaintiffs
or causing Plaintiffs to be subjected to the deprivation of any rights, privileges, or
immunities secured by the Constitution and laws, and are therefore liable to the Plaintiff
for injuries and for redress thereof, and any damages authorized by law and such other
remedies as deemed just and equitable.
Count XXIX
VIOLATION OF PLAINTIFFS CIVIL RIGHTS
212 Plaintiff restates Paragraphs 1 through 211, above, and further states:
213 FDIC, a government agency, itself or through its agents or both, including its Chair,
Defendant Sheila Bair, has denied Plaintiff his Fifth Amendment rights protecting him
against taking his property for public use without just compensation.
214 By donating Plaintiffs loan to JPMC in order to stabilize the national economy,
Defendants have taken Plaintiffs property for a public purpose.
215 The property Defendants have taken for a public purpose is, in the first instance, money
that he would not have to pay above and beyond what is necessary for the loan to be
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resolved through this suit, and in the second instance, the actual real property Plaintiff
owns, since, by defeating Plaintiffs claims against the lenders involved in this case by
administrative means, FDIC has given JPMC unfettered license to foreclose on Plaintiffs
home without making any attempt whatsoever to resolve the problems that were
unexpectedly caused by circumstances beyond Plaintiffs control, but which could have
been, and could possibly still be, resolved through negotiations made in good faith,
provided, of course, that Defendants had incentive to negotiate in good faith, something
that they have thus far demonstrated no inclination for.
216 Defendants subjected or caused Plaintiff to be subjected to the deprivation of rights,
privileges, or immunities secured by the Constitution and laws either directly or through
vicarious liability as the employer or controller or both of employees engaged in the
duties for which they were authorized to carry out on behalf of their employers, said
duties subjecting Plaintiff or causing Plaintiff to be subjected to the deprivation of rights,
privileges, or immunities secured by the Constitution and laws, and are therefore liable to
the Plaintiff for injuries and for redress thereof, and any damages authorized by law and
such other remedies as deemed just and equitable.
Count XXX
FRAUD
217 Plaintiff restates Paragraphs 1 through 216, above, and further states:
218 FDIC, a government agency, itself or through its agents or both, including its Chair,
Defendant Sheila Bair, engaged in fraud because by invoking 12 U.S.C. 1823(e), it
permitted JPMC to continue the actions that WaMu had first initiated by knowingly and
deliberately engaging in fraud itself in order to originate loans and also by encouraging
its representatives and brokers to do so as well, as is the case in this suit. Such fraud is
the subject of numerous public reports, including reports issued by the United States
Senate Permanent Subcommittee on Investigations in April of this year.
219 Defendants including JPMC and its Chair, Defendant Jamie Dimon engaged in fraud
because they knew or should have known that Plaintiffs loan was originated under
fraudulent conditions, and then the two entities invoked 1823(e) to hide their knowledge
of the fraud.
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220 Defendants including JPMC and its Chair, Defendant Jamie Dimon, engaged in fraud
because they have claimed that they were unable to examine and evaluate Plaintiffs loan
among other assets conferred upon JPMC by FDIC, thus the need to invoke 12 U.S.C.
1823(e) so as to deny Plaintiff his civil rights, yet they claim that they can identify the
mortgagees of Plaintiffs loan so that they can establish authority to discharge the
mortgage properly under Vermont law.
221. Defendants engaged in fraud both in the inducement, and during the term of the
loans, because they knew or should have known, and did not disclose such knowledge,
that the loans would be securitized and that because of the securitization such loans
would be excessively difficult, if not impossible, as has been the case for Plaintiff, to
modify the loans if circumstances arose during the extensive life of these loans that
necessitated modification in order for the borrower to continue to perform or to perform
substantially under the terms of the contract, which in fact is that case for Plaintiff here.
Count XXXI
ABUSE OF PROCESS BY DEFENDANTS
222 Plaintiff restates Paragraphs 1 through 221, and further states:
223 Defendants FDIC, a government agency, itself or through its agents or both, including its
Chair, Defendant Sheila Bair, and JPMC, and its Chair, Jamie Dimon, have engaged in
abuse of process because they have invoked the process authorized by 12 U.S.C.
1823(e) as a means of hiding their intent and acts that deprived Plaintiff of his civil
rights as set forth herein, which constitutes an improper purpose, rather than the intended
purpose of the statute, which is to assist in retaining the stability of the American
economy, for which the statute is not necessary, and its invocation in this case was
unnecessary since it is clear that contrary to the intention of the statute as it was written
60 years ago, Defendants claim to be able to access data related to a specific loan when it
is convenient for themselves.
224. Such behavior demonstrates that Defendants invoked 12 U.S.C 1823(e) in bad
faith, another indicator of abuse of process by Defendants.
225 Therefore, because Defendants have invoked 12 U.S.C. 1823(e) for an improper
purpose, and therefore they have engaged in abuse of process against the Plaintiff,
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Defendants are liable to the Plaintiff for injuries and damages arising out of said abuse of
process, including any damages authorized by law and such other remedies as deemed
just and equitable.
WHEREFORE, Plaintiff respectfully request that this Honorable Court:
A. Find that 12 U.S.C. 1823(e) is unconstitutional;
B. Grant Plaintiffs relief as requested in each Count; and
C. Grant any and such other relief as the Court deems is just and equitable.
Dated: October _____, 2010 Respectfully submitted,ERNEST J. CICCOTELLI
By: ____________________________________Ernest J. CiccotelliPlaintiff, Pro SeP.O. Box 562Norwich, Vermont 05055802 649-3400
CERTIFICATE OF SERVICE
I, Ernest J. Ciccotelli, hereby certify that on this ____ day of October, 2010, I forwardedthe above PLAINTIFFS SECOND AMENDED COMPALINT, by first class mail, postageprepaid, to:
Robert McCall, Esq. for FDICPeabody and Arnold, LLFederal Reserve Plaza600 Atlantic AvenueBoston, MA 02210-2261
Christopher D. Roy, Esq. for JP Morgan Chase & Co.,Downs Rachlin Martin, PLLC199 Main Street,P.O. Box 190,Burlington, VT 05402-0190
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Donald LaPlume.14 East Street,Claremont, NH 03743
____________________________________
Ernest J. Ciccotelli
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