APPELLANT'S OPENING BRIEF

B239793

CLERK'S OFFICE
COURT OF APPEAL-SECONDDIST*

RECEIVED JuL 2 2012

IN THE COURT OF APPEAL OF CALIF0 SECOND APPELLATE DISTRICT D M S I O N SIX

David Gates, Trustee of the David Gates Trust datedAugust 5, 1996,
Plaintiff and Appellant,
VS.

MGC Mortgage Inc., LLP Mortgage Ltd, LP, Loan Acquisition Corporation,
DefendantsRespondents

Appeal From the Superior Court for Santa Barbara County Colleen K. Sterne, Judge SBSC Case 1384851

APPELLANT'S OPENING BRIEF

Nancy D McCarron CBN 164780 950 Roble Lane Santa Barbara, CA 93103 805-965-3492 Attorney for Appellant Real Estate Broker, Certified Forensic Loan Auditor Notary Public, Certified Arbitrator for BBB Nationwide

STATEMENT OF THE CASE Plaintiff appellant David W. Gates, trustee of the David W. Gates Trust dated August 5, 1996, appeals the denial to stay foreclosure on a ranch he has owned for 35 years, originally set for April 5, 2012. Gates is in poor health at 70 years old with chronic heart condition. On 3-29-12 this court granted preference for oral arguments under CRC 8.240, but in the same order denied Gates emergency request to stay foreclosure, and all proceedings below, pending this appeal. This court formerly held an appeal of the denial of an injunction prohibiting foreclosure of a primary residence, regardless of its label, constitutes a mandatory injunction invoking the automatic stay of CCP 916, as it would alter status quo and cause irreparable harm.

Royal Thrift v. County Escrow (2004-2nddist) 123 C.A.4th 24,35-36; Stewart v. Whitmyre (1961) 192 C.A.2d 327,328-329.
Absent a stay, a pretend lender who never held any beneficial interest in his note or trust deed, and who never lent Gates a penny, will steal his $1,000,000 ranch through forgery, perjury, and fraud. The court affirmed crimes by turning a blind eye to uncontroverted and undenied evidence of forgery and an uncontroverted expert opinion of fraud. The court ignored prohibitions by this court and the Supreme Court on admitting hearsay in recorded documents.

Stor Media, Inc. v. Supr Court (1999) 20 Cal4th 449,457,n9.; Dugar v Happy Tiger Records, Inc. (1974, 2nd) 41 C.A.3d 811; People v Wohlleben (1968, 2nd Dist) 261 Cal App 2d 461 (best evidence rule)
Gates cited them in Objections to Judicial Notice and oral argument. [Vol.II.p.14.582] and [transcript: p.5, line 24-28; p.6, lines1-15]

A preliminary injunction evaluation is based upon admissible evidence and rests on only two factors: a likelihood that an applicant will prevail on the merits and balancing interim harm to applicant if injunction is denied compared to respondents harm if it is granted. The court found factor 2 tips in favor of Gates [Vol.IIIp.20.708]. Factor 2 is unchallenged. The court erred in applying the first factor. The court found foreclosure statutes and enforcement of negotiable instruments under UCC Article 3 governed here. [Vol.III.p.20.708] The court erred in applying UCC, evidence rules, and judicial notice. Evidence 450-453. The court took judicial notice of fabricated, forged documents and overruled evidentiary objections to admission. The court erred by finding hearsay contents as true. [Vol.III.20:711]. Gates pointed out all errors during oral argument. (see transcript). The court denied Gates sixth amendment right to a jury trial, his due process right to discovery and an opportunity to prove fraud. To guard errors from appellate scrutiny, the court denied a request for a stay pending appeal without opposition or a hearing, exposing Gates to irreparable harm and forced bankruptcy. [Vol.III,20:703,12] Denial of an injunction is an appealable order. CCP 904.1(a)(6). STATEMENT OF FACTS The court refused to acknowledge Gates is not trying to avoid a debt and will cure arrears once a real beneficiary is identified. Respondents are not/never were owner, note holder, or beneficiary. They failed to answer a verified complaint to deny his allegations, and failed to offer any party affidavit swearing they are an owner, lender, beneficiary or holder in due course of the note. 1

Bret Maloney (only affiant) swears respondents are agents of servicers-not owners 2

Gates will not pay an imposter who recorded forged assignments. Gates bought his ranch 35 years ago. [App.Vol.I,p.1.29]. On 9-29-05 Gates refinanced an existing WaMu loan with a higher amount to build a second wing to generate rents to help make loan payments. Gates timely paid for four years until tragedies occurred in 2009. Gates wife of 20 years died on 11-19-08. Six months later their home burned in the Santa Barbara Jesusita fire on 5-6-09. [Vol.I,p.1.3] The double trauma and stress resulted in remedial heart surgery When his 6-1-09 payment came due he called GMAC (WaMus then loan servicer) to report he could not make payments without rent. Unbeknownst to Gates, a week later two fraudulent assignments, executed by robo-signers, were hastily recorded.[Vol-I,p.1.63-1.66] Both contained most of the indicia of forged, fabricated instruments. Loan expert Bill Paatola testified about this fraud. [Vol-II,p.11.457]

Paatola attached Secretary of State reports showing MGC did

not exist until 2008. [Vol-II,p.11.474] Thus,MGC (TX) could not have prepared the 2006 assignment as it did not exist in 2006, and it was purportedly executed in Florida--a state far from Texas & California

Paatola explained how a blurry effect on the purported signatures

indicated the signatures had been photo-shopped to the assignment.

Paatola testified even if the first assignment were legitimate,

WaMu would have been illegally selling an asset it had previously sold to the WaMu 2005-AR-16 Trust in 2005, when Gates loan was securitized on Wall Street into that large loan pool. WaMu could only have sold loan servicing rights, not the loan itself, as it would have violated terms of the governing master Pooling and Servicing Agreement, and destroyed tax-free status of the entire REMIC trust.

Paatola testified he found Gates loan in WaMu 2005 AR-16 Trust

on Bloombergs securitized loan website. [Vol.II,p.11.454] Paatola attached a Bloomberg report showing Gates loan. [Vol-II,p11.474] It showed 6 of 17 REMIC tranches had been paid. [Vol-II,p.11.475] Defendants did not object to Paatolas expert testimony or offer any counter expert affidavit. They never denied verified allegations. Defendants realized expert Paatolas testimony was indisputable. The court ignored red flags and the law, finding assignments valid. Gates asks this court to listen to 60-Minutes robo-signing report at: http://www.cbsnews.com/video/watch/?id=7361572n April 3, 2011

Robo-signers explain, while working at DocX, subsidiary of Lender

Processing Services, they forged thousands of documents for banks which were fraudulently fabricated before regulators shut it down after investigating. The court turned a blind eye to uncontroverted evidence of fraud. Robo-signers are currently being prosecuted: Lawrence came forward earlier this month and blew the whistle on the operation, in which title officers Gary Trafford, 49, of Irvine, Calif., and Geraldine Sheppard, 62, of Santa Ana, Calif. who worked for a Florida processing company used by most major banks to process repossessions-allegedly forged signatures on tens of thousands of default notices from 2005 to 2008 11/29/2011 http://www.nakedcapitalism.com/2011/11/woman-facingsentencing-for-foreclosure-fraud-admitted-to-preparing-tens-ofthousands-of-fraudulent-documents-for-lps-found-dead.html A fraudulent assignment on Gates home included the photo-

shop signature of robo-signer Cynthia Riley, posing as the VP of

Wamu. In fact, she actually worked for Lender Processing Services in Florida, who created, executed and notarized thousands of forged foreclosure documents. Managers have been indicted for the crimes.
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Either Riley or another LPS forger created fraudulent assignments recorded against Gates property on 6-12-2009 right after the fire. Below are samples of LPS forgeries using Ms. Rileys signature: She was never WaMus Vice President & others used her LPS stamp

Many variations in Rileys signature indicate multiple LPS forgeries From: robo-signing (Cynthia Riley-Florida) [App:Vol.I,pp 5.270-272]

*Below is a forged, fabricated assignment, containing a photo-shop robo-stamp of Cynthia Riley, and a photo-shop stamp of a division of Deutsche Bank entitled DP Structured Products, Inc. (Wall St. NY)

[App Vol.II, p.12.547] *** see Attachment A to this brief (copy of fraudulent assignment) Any unbiased person looking at Attachment A would realize it is a photo-shopped, poorly fabricated cut & paste creation.
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Cynthia Riley worked for Lender Processing Services in Florida (the same firm under indictment for forgery of loan assignments) Gates intends to prove Rileys stamp was photo-shopped at LPS. Four days after 2 forged assignments were recorded, following a fire, loan servicer GMAC & MGC both notified Gates on the same day [6-16-09] that GMAC had sold its loan servicing rights to MGC [VolII-10.388]. Why GMAC quickly sold loan servicing rights after the fire to MGC is explained in detailed chronology in Gates Reply. [Vol-I, p.10-370] GMAC could not foreclose on a distressed home owner because its receipt of $16 billion in TARP funds in June 2009 was conditioned upon using funds to provide relief-not to foreclose!!! MGC could foreclose as Beal Bank (Andy Beal) didnt get any TARP money as his bank had too many billions in cash disqualifying him. Although GMAC and MGC served written notice of a CHANGE IN LOAN SERVICER on the same day (6-16-09) as required by law, neither served written notice of a CHANGE IN LENDER, required by 15 USC 1541(g). A new lender who acquires a loan must notify the borrower within 30 days of acquisition of the loan. The fact that GMAC and MGC notified Gates of a change in SERVICER but did not mention a CHANGE IN LENDER creates inferences there was never a new lender at all, or they would have included notice of it. Farmers Fire Exchange refused to issue claims benefits until Gates rebuilt the home to 80% completion, forcing him to charge materials to rebuild the home so he could collect claims benefits. Gates incurred $200,000 in credit card debt for building materials and living costs charged during a 2-year home rebuilding project.

Farmers issued $202,548.64 in 3 checks payable to Gates and MGC who was only loan servicer---not the lender. Gates called MGC when he received the 3 checks. MGC staff told him to sign checks & mail them to MGC to be endorsed and returned to Gates for deposit. MGC did not return the checks but instead applied them to his loan. MGC is waiting for Gates to finish the last 20% so they can convert his final reimbursement funds. After 5 months Gates had to hire counsel to get funds released to payoff credit cards. Gates received $113,622.96 out of $202,548.64 in 2010. [Vol.I.p.1.109-1.111] In 2011 Gates received an IRS 1099-C form from a Dovenmuehle

Mortgage,Inc. as servicer for MGC Mortgage, Inc. [Vol-I,p.1.112]

It recited Cancellation of Debt and showed Gates loan number. Despite numerous inquiries MGC failed to explain why it was sent. Expert Paatalo testified Gates loan in AR-16 Trust was fully repaid. Gates believes MGC processed a fire insurance claim after his home burned under a mandated global loan pool policy, and collected face value after the fire. Payoff triggered a duty to file debt cancellation notice to IRS and the taxpayer pursuant to IRS 1099-C instructions. see [http://www.irs.gov/instructions/i1099ac/ar02.html#d0e530] This explains why Bloombergs site lists the loan as repaid/inactive. MGCs conversion of Gates reimbursement for building materials charged on credit was an election of remedies (cash seizure) in lieu of foreclosing in 2010. If MGC is a true beneficiary, by seizing cash it waived a right to foreclose land. CCP 726 one form of action rule.

Security Pacific National Bank v Wozab (1990) 51 Cal 3d 991.

[Supreme court refused to overturn its 100-year mandate in Wozab] See also Shin v Superior Court (1994, 2nd Dist) 26 Cal App 4th 542.

PRELIMINARY MOOTNESS ISSUE After a preliminary injunction was denied Gates moved the court below for a stay pending appeal. It was denied. Gates moved this court to stay foreclosure pending appeal, and for age preference. The court denied a foreclosure stay but granted preference.(3-29-12) Gates was forced to file a Chapter 11 bankruptcy to avoid a trustee sale set for April 5, 2012. Due to the bankruptcys automatic stay Gates dismissed state court proceedings below without prejudice. Gates dismissal necessarily created a mootness issue on appeal. Dismissal usually moots the appeal as jurisdiction below is divested after dismissal. But there are three recognized exceptions to mootness. Cucamongans United for Reasonable Expansion v. City

of Rancho Cucamonga (2000) 82 CA4th. 473, 479. Gates pending

appeal should be heard as it qualifies on any of the 3 exceptions. 1.) when case is of public interest and the issue is likely to recur 2.) when controversy may recur between the appellate parties 3.) when a material question remains for courts determination Exception 1 this case qualifies as it is a public interest issue.

Brown,Winfield & Canzoneri.v.Supr.Ct. (2010) 47 C.4th. 1233, 1240.

Wrongful foreclosure, robo-signing, and fraudulent assignments are currently issues of national, state, and local importance at this time. Attorney Generals(50 states) are prosecuting fraudulent foreclosures and criminal charges for forged recordings. Attorney Generals just settled a criminal case filed against 5 major banks in 2012 for about 26 billion dollars, although it does not preclude private fraud suits.

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Californias Foreclosure system is broken. (audit) [V-III 19.682] Eric Holder is investigating after an Aequitas audit revealed that 99% of foreclosures had irregularities, 84% had violations of law and contained suspect documents, with a high rate of conflicts as to the actual beneficiary, creating doubt as to whether homeowners were denied due process. The Aequitas audit concluded: Californias foreclosure process appears utterly broken. [VIII 19.696] On June 25, 2012 anti-foreclosure advocates demonstrated at Santa Barbara Court at 12:00 demanding suspension of foreclosures and an investigation by the County Recorder of forged documents. If the issue is such that every case presenting it would become moot in the normal course of events, before the appeal could be decided, the appellate court should decide the issue, even though it has become moot between the parties currently before the court.

Edelstein v. City of San Francisco (2002) 29 C4th.1193, 1202, nt 8.

If a preliminary injunction is denied in a foreclosure case appeal would necessarily be mooted as soon as a trustee sale occurs because non-judicial trustee sale is a summary proceedingdone in 21 days. Judicial errors would evade appellate scrutiny as the home is sold. All erroneous denials would perpetually evade appellate scrutiny.

Conservatorship of Forsythe (1987) 192 Cal.App.3d. 1406. see also 9 Witkin, Cal Proc., Appeal 759-761 (5th. Ed 2008) see discussion
and examples of public interest exceptions to the mootness doctrine. Exception 2 case qualifies as it is likely to recur with the parties.

Environmental Charter High School v. Cennela Valley Union HS Dist. (2004) 122 CA4th.139.

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Gates is in a Chapter 11 bankruptcy which stays foreclosure. However, if his case is dismissed, or the trustee determines the real property should be abandoned, Gates would face foreclosure again. Appellate scrutiny would be circumvented again with same parties. Exception 3 case qualifies as material question is still controverted

Viejo Bancorp, Inc. v. Wood (1989) 217 CA3d. 200, 205. Gates was
denied his right to a jury trial on the issue of fraudulent recordings and who really owns a loan is a material question still controverted. GLOBAL PUBLIC POLICY CONSIDERATIONS After the Great Depression of 1934, as part of the New Deal, the National Housing Act (NHA) was enacted to revive the economy and encourage citizens to work toward the American Dream of a home. Fannie Mae, Freddie Mac, Ginnie May, FHA, FNHA all evolved. The Tax Reform Act of 1986 created an anomaly entitled REMIC (Real Estate Mortgage Investment Conduit) to facilitate origination of loans via securitization, explained in Gates complaint [Vol-I,1.76] By 2000 hungry Wall Street brokers met with greedy banksters
2

to devise a secondary sub-prime mortgage market where thousands of loans would be converted into bond certificates to sell to investors This process was commonly referred to as sub-prime securitization.

Sub-prime mortgages were for risky borrowers who did not qualify
under underwriting policies used in traditional bank loan portfolios. By pooling the risky loans brokers could spread default risks among millions of investors guaranteed by government. How could it lose?
2

As part of a 2012 $26 billion settlement the DOJ granted immunity to bank officers who admitted 2.5 million crimes of fraud, forgery & perjury 12

The highest commissions were paid to originators of the riskiest loans while hungry brokers, greedy banksters, and fee-gorging

trustees made billions with no regard for massive default potential.

Risky loans were designed to start at prevailing interest rates (teaser rates) to escalate in 3 years to shock rates triggering default. [3-yr time limit to rescind already expired when the shock rate kicked in] Aware defaults were inevitable, brokers created credit default swap products to trade in which brokers bought the short positions and sold unwary investors the long positions hedging against defaults. In buying long positions investors relied on fraudulent AAA ratings issued by conspirators, under a delusion loans would not default. Brokers bought swap insurance policies hedging defaults through government-backed insurer AIG and others who also relied on the bogus AAA ratings in issuing the policies. Lenders forced borrowers to buy ALTA insurance policies to self-insulate against default loss. Brokers & banksters made billions-fully insured against any losses. Motivated by insatiable greed banksters originated thousands of bad loans to borrowers they knew would default within the three years. The end result was collapse of our entire financial system by 2008. Congressional report Anatomy of a Financial Collapse [V-I 1.97] [see report excerpts on WaMu failure, who originated Gates loan.] In a frenzy to make billions in commissions banksters were very careless in processing loan files, often losing notes, trust deeds, title policies, etc. as millions of documents shuffled around Wall Street. This was exacerbated at WaMu when FDIC seized it on 9-25-08, sold the bank to JP Morgan Chase that same day, and WaMu filed bankruptcy, turning over its records to FDIC & a bankruptcy court.

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When the bubble burst in 2008 housing prices took a nose-dive leaving half of American homes underwater. Prices fell 40% while shock rates kicked in on the mortgages. As monthly payments doubled owners could not afford to pay; they could not sell in a down market; they could not refinance. Default rates skyrocketed to a level never before seen in our history. Thousands of homes across the USA foreclosed and millions were left homeless and jobless. As banksters foreclosed on thousands of homes they realized notes, trust deeds and assignments were missing. Cognizant that judges would expect them to be filed, banksters cured the dilemma by fabricating the missing instruments through photoshop software. They looked real! After all, what Judge would believe a national bank forged loan instruments to be filed in court? Loan Processing Services, dba Doc X, came to the rescue of the banks!! [V-II 10.383] Doc X advertised as paid runners ensuring speedy foreclosure to

banks, posting a price list for creating missing bank documents.

Create a Note Allonge was $12.95. Create entire collateral file. $95 http://www.cbsnews.com/video/watch/?id=7361572n on April 3, 2011 Judges were duped into believing forged, fabricated documents were real as they were notarized, recorded and offered by a bank!!! It was not until Congress and 50 Attorney Generals investigated that national bank fraud came to light. All 50 states were prepared to indict criminals who forged documents and filed them in courts. Obama created the Mortgage Fraud Task Force 1/27/12 [V-I 1.107]

Banksters used shareholders funds to buy immunity for the crimes.

[V-III 10.381] Our government settled with banks for $26 billion.

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This settlement affirmed crimes and will encourage more crimes. See Criminal Affirmance by Mary Ramirez, Professor at Washburn University Law School, 13-yr.veteran DOJ prosecutor. [V-III 18.601] She explains how affirming crimes of elite banksters puts them in a class above the law. As law-abiding citizens, who are left homeless and jobless, watch banksters get richer they ponder if they should also break the law as they discover crime pays ---- resulting in a lawless society. Anger percolates to inevitable revolution. We see it in its embryonic stage; i.e. Occupy Wall Street & Occupy County Recorders Office. Angry citizens are starting to become violent. Murders and suicides are being reported regularly in foreclosures.

Banksters cavalierly continue to submit fraudulent documents.

Judges continue to validate them! Citizens & lawyers are outraged. Congress found our financial system is broken. Id, p.13 [Vol.I, 1.97] Californias Foreclosure system is broken. [V-III 19.682] Eric Holder is investigating after an Aequitas audit revealed 99% of foreclosures had irregularities, 84% had violations of law and suspect documents, with a high rate of conflicts as to the beneficiary, creating doubt as to whether homeowners were denied due process. Californias foreclosure process appears utterly broken. [VIII 19.696] The 2008 collapse resulted in a tsunami of litigation across 50 states, every district court in America, and every bankruptcy court. Courts will be burdened for years trying to resolve this bank mess. But the answer is not to turn a blind eye and deaf ear on victims. If prosecutors wont punish banksters because theyretoo big to fail then courts must act. Courts can not continue to affirm the crimes! Gates asks the court to consider the global effects of this decision.

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A securitization chart shows Gates loan in AR-16 trust.[V-I 1.81] A Pooling and Service Agreement governed party rights and duties, listing all contracting parties [V-II 10.371] see excerpts [V-II 10.396] DB Structured Products,Inc.[DBSP] was never a party to the P&S. DBPS was/is a stranger to the P&S and the loan. WaMus purported

conveyance of trust deed to DBPS [V-I 1.63] was a nullity as WaMu

could not have conveyed it in 2006 because Gates note was already conveyed to 2005-AR-16 trustee (Deutsche Bank) on October 1, 2005. Any conveyance would have destroyed tax-free status of the trust. WaMu could not re-convey to DBPS as it was a stranger to the P&S. DBPS later assignment to MGC was nullity deriving from a nullity. Gates provided indisputable, uncontroverted evidence of loan fraud. His opportunity to prove it was slashed by a judge at the threshold. The court affirmed elite bankster crime by finding their fabricated, forged assignments as valid awarding them a free home on a platter.

One can not imagine a more egregious miscarriage of justice.

The issue of preventing fraudulent foreclosures by pretend lenders (loan servicers who pretend to be the lender) who never held any beneficial interest in the note is of the greatest public importance as our entire foreclosure system in California is broken. [VIII 19.696] ISSUE PRESENTED ON APPEAL Was it prejudicial error to conclude Gates was unlikely to prevail on merits by taking judicial notice of disputed hearsay in recorded documents denying a right to confront witnesses and to prove fraud?

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APPEALABILITY Denial of a preliminary injunction is appealable. CCP 904.1(a)(6) Denial of prohibition against foreclosure is appealable as final order.

Eldridge v. Burne (1978) 76 C.A.3d 396, 403; Sjorberg v.Hastorf

(1948) 33 C.2d 116,119. It is conclusively presumed the loss of a single family residence cant be compensated with pecuniary damages. Civil 3387. Demarist v. Quickloan Funding,Inc. 2009 WL 940377.p 9 (C.C.Cal.2009) STANDARD OF REVIEW On purely questions of law the standard of review is de novo.

El Dorado Meat Co., v. Yosemite Meat Svs. (2007) 150 C.A.4th. 612,
617. Huang v. Luir (2007) 150 C.A.4th 400, 408-409. (injunction). The analysis is hybrid when an injunction order is based on questions of law mixed with facts. Where the trial court's ruling depends on determination of the applicable principles of law, however, it is subject to an independent appellate review.

Strategix v. Infocrossing West, Inc. (2006) 142 C.A.4th 1068, 1072. Herbst v. Swan (2002) 102 C.A.4th. 813. 816 (de novo-const.issues)
Even when the standard is substantial evidence where records show a court based ruling on a mere scintilla of evidence it need not affirm

Kuhn v. Dept. of Gen Serv. (1994) 22 C.A.4th. 1627, 1633.

Where a court refused to issue a Statement of Decision after a request under CCP 632 it is reversible error per se. The court refused Gates request for a stay. This court has unlimited jurisdiction to stay a foreclosure trustee sale. San Francisco

Conservation v. Emeryville (1968) 69 Cal.2d 533, 538.

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ARGUMENTS ON APPEAL A. Taking Judicial Notice of disputed hearsay is prejudicial error. Though courts may take judicial notice of public records, they do not take notice of the truth of matters stated therein. StorMedia v.

Superior Court (1999) 20 Cal.4th 449, 457 fn 9; Joslin v. H.A.S. Ins. Brokerage (1986) 184 CA.3d 369, 374. Love v. Wolf (1964) 226
C.A.2d 378, 403; People v Long (1970, 3rd Dist) 7 Cal App 3d 586. Where factual findings or contents of documents are in dispute, those matters of dispute are not appropriate for judicial notice.

Caravantes v. California Reconveyance Co., 2010 WL 4055560, 9

(S.D.Cal. 2010) citing Darensburg v. Metropolitan Tran. Comm'n, 2006 WL 167657, at *2 (N.D.Cal. 2006). See Stephen R. Buchenroth and Gretchen D. Jeffries, Recent Foreclosure Cases: Lenders Beware (June 2007); Wells Fargo v.Jordan, 914 N.E.2d 204 (Ohio 2009) (If plaintiff has offered no evidence that it owned the note and mortgage when the complaint was filed, it would not be entitled to judgment as a matter of law.).

Herrera v. Deutsche Bank (2011) 196 CA 4th 1366 held:

A trial court errs in taking judicial notice of disputed facts contained within recorded documents. A matter ordinarily is subject to judicial notice only if the matter is reasonably beyond dispute. "Taking judicial notice of a document is not the same as accepting the truth of its contents or accepting a particular interpretation of its meaning." Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374. While courts take judicial notice of public records, they do not take notice of the truth of matters stated therein. Love v. Wolf (1964) 226 Cal.App.2d 378, 403. "When judicial notice is taken of a document . . . the truthfulness and proper interpretation of the document are disputable StorMedia, Inc. v. Superior Court (1999) 20 Cal.4th 449,457 fn. 9
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. the Substitution of Trustee recited that Deutsche Bank "is the present beneficiary under" the 2003 deed of trust. This fact was hearsay and disputed. Therefore, the trial court could not take judicial notice of it. Poseidon Development, Inc. v. Woodland Lane Estates (2007) 152 Cal.App.4th 1106. Nor would taking judicial notice of the Assignment of Deed of Trust establish that the Deutsche Bank was the beneficiary under the deed of trust. A recitation that JPMorgan Chase Bank is the successor in interest to Long Beach Mortgage Company, through Washington Mutual, is hearsay. Plaintiffs disputed the truthfulness of the contents of all of the recorded documents. A supporting declaration must be made on personal knowledge and "show affirmatively that the affiant is competent to testify to the matters stated." Code Civ. Proc., 437c, subd. (d). Deborah Brignac's declaration did not affirmatively show that she can competently testify that the bank is the beneficiary under the deed of trust. At most, her declaration shows she can testify as to what the Assignment of Deed of Trust "indicates." The factual contents of the assignment were hearsay and defendants offered no exception to the hearsay rule to make these factual matters admissible. At oral argument, defendants contended that the recorded documents were actually business records and admissible under the business record exception. However, Brignac did not provide any information in her declaration establishing that the sources of the information and the manner and time of preparation would indicate trustworthiness. (Evid. Code, 1271 (d). A declaration that the Substitution of Trustee by Deutsch Bank made CRC trustee would require admissible evidence that the bank was the beneficiary under the 2003 deed of trust and thus had the authority to substitute the trustee. Because defendants failed to present facts to establish that the bank was beneficiary and CRC was trustee under the 2003 deed of trust, and therefore had authority to conduct the foreclosure sale, triable issues of material fact remain.

Herrera v. Deutsche Bank (2011) 196 CA 4th 1366

The court below erred in taking judicial notice of the contents of recorded documents validating them as genuine loan assignments.

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Paatola testified he found Gates loan in WaMu 2005 AR-16 Trust

on Bloombergs securitized loan website. [Vol.II,p.11.454] Paatola attached a Bloomberg report showing Gates loan. [Vol-II,p11.474] It showed 6 of 17 Remic tranches had been paid. [Vol-II,p.11.475] Defendants did not object to Paatolas expert testimony or offer any counter expert affidavit. Respondents never denied allegations. Defendants realized expert Paatolas testimony was indisputable. The court ignored red flags and the law, finding assignments valid. The court denied Gates a sixth amendment right to confront witness statements, to a jury trial, and deprived him of a right to a trial. This was prejudicial error which caused Gates irreparable harm in that he had to file a Chapter 11 bankruptcy to save his home from being stolen by a stranger from Texas who never lent him a penny. The court showed bias against Gates in ruling against reason & law. B. Evidence 1451 is not conclusive and is a factual jury issue The court created a pretext to validate two forged assignments. [V-III, 20.711] The court cited Evid 1451 in its ruling, a code never cited nor argued by respondents in their opposition to an injunction. It was a gratuitous gift together with a free home on a silver platter. The court found the forged assignments valid fully aware that the presumption is not conclusive, but rather rebuttable. Yet, the court denied Gates any opportunity to rebut it via an evidentiary hearing.
In Hernandez v. Madrigal (2010)S-09-0413mce-ggh(East.Dist.CA) the court held:

California Evidence Code*fn2 1451 creates a presumption that an acknowledged document is genuine. The statute provides: A certificate of the acknowledgment of a writing other than a will...is prima facie evidence of the facts recited in the certification and the genuineness of the signature of
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each person by whom the writing purports to have been signed.Cal. Evid. Code 1451; see also Cal. Evid. Code 602 (stating that "a statute providing that a fact or group of facts is prima facie evidence of another fact establishes a rebuttable presumption.)" The document is "as strong as if the facts certified had been duly sworn to in open court by a witness apparently disinterested and worthy of belief." Ware v. Julien, 122 Cal. App. 354, 355 (1932). This presumption extends to the situation of deeds. "A deed absolute in form is just what it purports to be." Develop-Amantic Engineering v. Republic Mortgage Co., 12 Cal. App. 3d 143, 148 (1970). "All presumptions are in favor of the validity of a deed when it is regular on its face and recorded or acknowledged." Du Bois v. Larke, 175 Cal. App. 2d 737, 745 (1960). This "presumption is not conclusive but the burden of overcoming them is on the one who disputes them." Id. "When a disputable presumption is controverted by other evidence, a question of fact arises which must be resolved by the trial court." Id. Although the evidence is not conclusive, the document is enough, standing alone, to send the case to the jury, so that the jury can decide between the probative force of the document supported by the presumption and the evidence produced in rebuttal. Ware, 122 Cal. App. at 355. Here, it is for the jury to weigh the evidence of the alleged forged loan documents themselves against the evidence produced by Plaintiff indicating forgery See also Fares v. Morrison (1942-2nd) 54 C.A.2d. 773 (jury issue) Erroneously applying 1451 as a conclusive presumption, and denying Gates a right to jury trial on this issue was biased, and a highly prejudicial error. The court knew the two recorded assignments were challenged as fraudulent and was fully aware of expert Paatalos opinion explaining the fraud in assignments, as the court mentioned his report. At the very least the dispute presented a triable issue of fact for a jury or evidentiary hearing. The court showed bias against Gates in ruling against reason and the law.

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C. Court may not disregard uncontroverted expert opinion. When a qualified expert renders an opinion on a subject of his expertise, no objections to it are made, and no opposing expert opinion is offered, a court may not disregard it. It must be validated.

Huber,Hunt v Moore (1977) 67 C.A.3d 278,313;Engelking v.Carlson

(1939) 13 C.2d 216; Paxton v County of Alameda (1953)119 C.A.2d 393; Danielson v. Roche (1952) 109 C.A.2d 832.

Paatola testified he found Gates loan in WaMu 2005 AR-16 Trust

on Bloombergs securitized loan website. [Vol.II,p.11.454] Paatola attached a Bloomberg report showing Gates loan. [Vol-II,p11.474] It showed 6 of 17 REMIC tranches had been paid. [Vol-II,p.11.475] Respondents did not object to Paatolas expert testimony or offer any counter expert affidavit. They never denied verified allegations. Respondents realized expert Paatolas testimony was indisputable. The court ignored red flags and the law, finding assignments valid. Gates asks this court to listen to 60-Minutes robo-signing report at: http://www.cbsnews.com/video/watch/?id=7361572n April 3, 2011

Robo-signers explain how, while working at DocX, owned by Lender

Processing Services, they forged thousands of documents for banks which were fraudulently fabricated before regulators shut it down after investigating. The court turned a blind eye to uncontroverted evidence of fraud. Robo-signers are currently being prosecuted: Lawrence came forward earlier this month and blew the whistle on the operation, in which title officers Gary Trafford, 49, of Irvine, Calif., and Geraldine Sheppard, 62, of Santa Ana, Calif. who worked for a Florida processing company used by most major banks to process repossessions-allegedly forged signatures on tens of thousands of default notices from 2005 to 2008 11/29/2011
http://www.nakedcapitalism.com/2011/11/woman-facing-sentencing-for-foreclosurefraud-admitted-to-preparing-tens-of-thousands-of-fraudulent-documents-for-lpsfound-dead.html

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On 8-7-11 60 minutes updated robo-signing story with the following:

CBS 60 Minutes Updates Story

By SCOTT PELLEY, 60 MINUTES

Lynn Szymoniak, a Florida lawyer who is also an expert in white collar crime and document examination (and a friend of ours) appeared on the CBS news magazine in April of this year. 60 Minutes has now updated that story.
New information includes the fact that people who were high school kids were signing documents as vice-presidents of banks, which of course they weren't. The people who signed these dummied-up documents created to facilitate the foreclosure of many Americans' homes were paid $10 an hour to do that work, but had to sign a minimum of 350 documents an hour, a figure which clearly means they never read anything they signed. Other employees notarized the documents, despite the certain knowlege that they were NOT signed by the persons named (many different people signed as Linda Green, an actual lady who's name was picked for these documents because it was short and easy to spell, facilitating the use of multiple signers). Of course, at this point, Americans can hardly be shocked any more, there have been so many revelations. http://www.propertylawgroup.com/Video-

Reports-You-Will-Want-to-See/8-7-2011.html An assignment on Gates home included the bogus photo-shop signature of robo-signer Cynthia Riley, posing as Vice President of Wamu Bank Riley actually worked for Lender Processing Services in Florida, who created, executed and notarized thousands of forged foreclosure documents. Managers have been indicted for the crimes. Either Riley or another LPS forger created fraudulent assignments. Gates provided evidence that his loan was fully paid off in the WaMu 2005 AR-16 REMIC Trust by filing an affidavit in Reply to Opposition to Preliminary Injunction which authenticated a 1099-c (debt cancellation) form he received for the 2010 tax year. This was after he submitted a fire claim to Firemans Exchange Insurer.

23

Respondents did not deny Gates sworn testimony. [Vol-II,13.575] [see Attachment B to this brief copy of IRS 1099-c Gates received] Any unbiased person reviewing it would conclude there are issues of fact to be resolved as to whether Gates loan was paid off, who paid it off, and why it was paid off. Gates is entitled to any credit which may have been paid by an insurer to MGC after the Jesusita fire. Gates is entitled to discovery on these issues and trial in the case. The court showed bias against Gates in ruling against reason & law.

D.

Court may not find a fact which is inherently implausible.

It is error to find a fact which is inherently implausible.

Marriage of Anaheh Firem (1990) 219 C.A.3d 272, 279. [Deposition

proved testimony at trial was implausible and had to be false]. Paatalo found Gates loan in a securitized trust; it could not have been conveyed to DBSP, who had nothing to convey to MGC in 2009. The courts finding MGC is the lender was implausible. The courts finding could not have been based upon testimony as respondents never answered his complaint denying any of the verified allegations Respondents never offered any party affidavits swearing they were the lender. Non-party affidavit from Bret Maloney never swore LPP or MGC were lenders. He testified only that MGC was LPPs agent. The court could not have based such finding on expert opinion as Paatalos testimony was the only expert testimony offered and it proved MGC could not be a lender. There was no rationale basis for the court to find LPP was lender. The finding was implausible.

24

E. Court misapplied UCC and misallocated burden of proof The court found UCC Division 3 applied to the case. [Vol.III, 20.708] UCC 3308 applies as validity of Cindy Rileys signature is disputed. The following shows respondents had the burden to prove validity.

3308. Admission of authenticity of and authority to make signature; Burden of proof (a) In an action with respect to an instrument, the authenticity of, and authority to make, each signature on the instrument is admitted unless specifically denied in the pleadings. If the validity of a signature is denied in the pleadings, the burden of establishing validity is on the person claiming validity,

Respondents failed to provide even a scintilla of evidence to show that the purported signature of Cynthia Riley, purporting to be a Vice President of Wamu was valid. Gates denied it in pleadings. The court was aware of Gates challenge to validity [Vol.III, 20.710] All evidence presented showed the signature was forged. Not only did the court fail to allocate the burden to prove validity to MGC, but the court denied Gates any opportunity to prove it was invalid. If the first assignment was invalid, the next assignment was invalid. The court showed a bias toward Gates by not only failing to properly allocate the burden of proof to respondents to prove the validity of Cynthia Rileys signature, but denied Gates of any opportunity to disprove validity or to give this factual issue to a jury. The court usurped Gates right to a jury trial on a material issue.

25

F. Refusal to issue CCP 632 statement is reversible error per se. Under CCP 632 Gates was entitled to a statement of decision including specific findings upon which the court based its ruling. Gates moved for a statement of decision under CCP 632 during oral argument which the court denied. [see transcript, p. 14, line 7-10]. Failure to issue a statement of decision is reversible error per se. It is prejudicial error to fail to make findings where they are necessary and have not been waived. Carpenter v Pacific Mutual

Life Ins. Co. (1937) 10 Cal 2d 307; affirmed 305 US 297. The court
never made any findings as to whether the assignments recorded on 6-12-09 were valid or not. The court recited Evidence Code 1451 (presumption of validity of recorded documents) to conclude Gates was not likely to prevail. The presumption is not conclusive. It is rebuttable as explained on page 20 above. A judgment rendered without findings on all material issues must be reversed.

Weisz Trucking v Emil Wohl Constr. (1970, 2nd Dist) 13 CA 3d 256

No facts are presumed to have been found which were not found.

Campbell v Buckman (1874) 49 Cal 362. Trial judge's reasoning in

memorandum is not binding on appellate court. Howard v Howard (1956, 2nd Dist) 141 Cal App 2d 233. If substantial injury has been caused and substantial rights have been affected, and a different result would have been probable if the defect had not occurred the judgment should be reversed. Overholser v Glynn (1968, 2nd Dist) 267 Cal App 2d 800. Gates was substantially injured in that he had to file bankruptcy to avoid losing his home. The court showed bias in failing to issue a statement of decision under CCP 632 with specific findings on validity of assignments, upon request during a hearing.

26

CONCLUSION The trial court has demonstrated a clear bias towards Gates and is presumed to be biased since Gates appealed the erroneous ruling. If the disabled Gates loses his ranch in a trustee sale he will be homeless for the first time in his life at the age of 70. The ranch Gates has nurtured and improved for 35 years will be acquired by a Texas imposter who never lent Gates a penny and who is/was never the owner, beneficiary, or note holder in due course. The real beneficiaries --- investors who purchased certificates in the WaMu 2005-AR-16 Trust used to fund Gates loan at closing, along with thousands of other loans, may not be repaid and could sue Gates to collect on his promise to pay (the underlying note). Andrew Beal (Beal Bank) will acquire a $1,000,000 ranch for free. Is this justice? Beal created MGC to start loan servicing in 2008 [Vol.II 10.385] Beals annual net income soared from $281 million in 2008 to $559 million in 2009 [Vol-II,p 10.395]. (by using LPP as a pretend lender) Beal has become a multi-billionaire by stealing homes as alleged. The time has come for courts to stop affirming elite bankster crimes. END I certify that, according to the computer program used to prepare this brief, Appellants Opening Brief contains 7,197 words, not including cover, Table of Contents & Authorities. I declare under penalty of perjury California law that the foregoing is true and correct. Executed 7-2-12 in Santa Barbara, California. July 2, 2012 __________________________________ Nancy Duffy McCarron, CBN 164780 Attorney for Plaintiff Appellant

27

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IMPORTANT TAX INFORMATION ENCLOSED

PROOF OF SERVICE
STATE O F CALIFORNIA, COUNTY OF SANTA BARBARA Court of Appeal, Second Appellate District, Division Six, B239793 David W. Gates v. MGC, et a1 SBSC 1384851, Dept. 5 Colleen K. Sterne

I am counsel for appellant and not a party to the action. My address is 950 Roble Lane, Santa Barbara, CA 93103.805-450-0450fax 805-965-3492
On July 2,2012 I served respondents with the following document: APPELLANT'S OPENING BRIEF - B239793 [XI (By Personal Delivery) a s follows: Clerk of the Court, Santa Barbara 1100 Anacapa St., Santa Barbara CA, for Colleen Sterne, Judge Dept 5

1: 1 (By Facsimile) The fax machine I used complied with Rule 2003(3) and no
Pursuant to Rule CRC, 2008 [c1(4). error was reported by machine. I caused the machine to maintain a record of same. [XI(By Electronic) to address below (aareement) & nancvduffvsb@,vahoo.com: **also served electronic copv of transcript Regina McClendon, Locke Lord LLP 300 So Grand Ave, Suite 2600 Los Angeles, CA 90071 for respondents MGC, LLP,LAC rmcclendon@lockelord.com 213-485-1500 fax 213-485-1200

SUPREME COURT via website: ~tt~://w~1~.courts.ca.~ov/7423.htm Second Appellat? District Court of Appeal

L (By Mail) 1013a, 52015.5 CCP: &d3([2,with mail collection in m I am familiar

Santa Barbara. I deposited the envelope in the mail a t Santa Barbara, CA. I am aware on a motion of the party served, service is presumed invalid if postal cancellation date is more than one day after deposit date on affidavit.
[ x 1 (STATE) I declare under penalty of perjury and laws of California that

the above is true. Executed in Santa Barbar , CA on July 2,2012 Note: Original + 4 copies (Green Covers) elivered to appellate court

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