Bhaskar vs. Farmers & Merchants Bank

Opposition

Cal. Super. - 4th Dist.October 17, 2013

10 11 12 13 14 15 16 L7 18 18 20 Al 22 23 24 25 26 27 28 Michael Leight, Esq. #71637 Law Offices of Michael Leight 6700 Pacific Coast Highway Suite 237 Long Beach, California 90803 562/430-1009 FAX 562/431-2154 Attorney for Defendant, Farmers & Merchants Bank of Long Beach 13-4130/bh SUPERIOR COURT OF THE STATE OF FOR THE COUNTY OF ORANGE - CENTRAL BILL BHASKAR, individually and BILL BHASKAR, M.D., Inc., Plaintiffs, vs. ) ) ) ) ) ) ) ) FARMERS & MERCHANTS BANK aka ) GENEVA SAVINGS BANK, ARISTA, LLC, ) a California Limited Liability ) Company; ABDUL SULTAN WALJI, an ) individual and as Trustee of the ) STONE LAMM TRUST; RENIERO ) CASTILLO FRANCISCO, an individual; ) CYNTHIA D. FRANCISCO, an ) individual; CALPENSION, INC., a ) California Corporation; MRS. ) (1% Name Unknown) WALJI, an ) individual, ) ) ) ) Defendants. /1/ /1/ ELECTRONICALLY FILED Superior Court of California, County of Orange 03/23/2018 at 10:45:00 Av Clerk of the Superior Court By & Clerk, Deputy Clerk CALIFORNIA JUSTICE CENTER Case No. 30-2013-00682081 Judge David Chaffee Opposition by Defendant, Farmers & Merchants Bank of Long Beach, to the Amended Notice of Motion and Motion to Quash Deposition Subpoena and for Production of Documents of Union Bank of California [Filed with a Declaration of John Gloger] Date: 6 April 2018 Time: 9:30 AM Dept: C20 10 Ll, 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Defendant, Farmers & Merchants Bank of Long Beach (Defendant or F&M), files this Opposition to the Amended Notice of Motion and Motion to Quash Deposition Subpoena and for Production of Documents of Union Bank of California [Union Bank] (Motion), filed by Plaintiffs, Bill Bhaskar, M.D., Inc. and Bill Bhaskar, individually (Plaintiffs or Bhaskar). Introduction Plaintiffs sued F&M and others, claiming that over the course of approximately 11 years, Plaintiffs made, or endorsed, 17 checks payable to F&M, and that those checks were deposited at an F&M branch by Plaintiffs’ pension plan advisor and fiduciary Abdul Walji (Walji). These 17 checks are identified at paragraphs 14-31 of Plaintiffs’ Third Amended Complaint for damages (TAC), a copy of which TAC is attached to the accompanying Declaration of John Gloger (Declaration). Despite significant discovery having already occurred in the case, F&M has been unable to verify, and Plaintiffs have not demonstrated, that each and all of the 17 checks were deposited at F&M, as Plaintiffs have consistently alleged. The checks drawn by Plaintiffs were drawn on their account at the Bank of America, and the checks endorsed by Plaintiffs, were drawn on an account at Union Bank. Defendant F&M subpoenaed bank records of both Bank of American and Union Bank. pid 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 97 28 Plaintiffs have moved to quash each of the subpoenas. This is surprising because the subpoenaed writings go to the heart of Plaintiffs’ claims. Perhaps Plaintiffs are fearful the subpoenaed records will contradict the allegations Plaintiffs have consistently made about the 17 checks, which span over an 11 year period. Plaintiffs have failed to carry their burden on this Motion, which is to establish good cause to prevent discovery of relevant records. To the contrary, the Declaration of John Gloger establishes the relevance and importance of, and the need for, the subpoenaed information. The Motion should be denied. Background Plaintiffs were allegedly victimized by another Defendant, Walji, who served as Plaintiffs’ friend and pension plan administrator for Plaintiffs’ retirement plan. Over the course of about 11 years, Plaintiffs gave Walji checks payable to F&M which Plaintiffs allege were intended for Plaintiffs’ retirement plan(s). Walji took the checks to Defendant F&M and deposited the checks into the fiduciary trust account which Walji established and maintained for Plaintiffs’ monies (and the monies of others who participated in a “multi-employer” pension plan). [17 10 11 12 13 14 13 16 17 18 19 20 21 22 23 24 25 26 27 28 Walji was Plaintiffs’ fiduciary. Plaintiffs allege that Walji violated his fiduciary duties by improperly investing the monies which Plaintiffs entrusted with Walji, and/or by outright misappropriation of the money. Walji was prosecuted and is now in prison. Plaintiffs looked for others to blame for Walji’s behavior and Plaintiffs’ own negligence. Plaintiffs sued F&M and a number of other defendants. F&M successfully demurred to five or six amended complaints filed by Plaintiffs. After the last of the amended pleadings, the trial court sustained F&M’s demurrers without leave to amend. Plaintiffs appealed. The court of appeal sustained the trial court’s rulings in every respect, with one exception. After rejecting all of Plaintiffs’ other many claims against F&M for failure to state causes of action, the court of appeal concluded that Plaintiffs had stated a cause of action against F&M for “negligence”, based upon Sun ‘n Sand, Inc. vs. United California Bank 21 Cal.3d 671 (1978). In an unpublished opinion, the court of appeal determined that at the pleading stage, Plaintiffs had at least stated a cause of action for negligence under Sun ‘n Sand. Sun ‘n Sand, also a pleading case decided on demurrer, held that where a non-customer makes checks payable to a bank, gives the checks to an employee who alters the checks, and then deposits the checks into her personal account at the bank, a cause of action could be stated, at the pleading stage, against the bank which 3 10 Jl 12 13 14 15 16 17 18 19 20 2 22 23 24 2.5 26 27 28 allowed checks payable to it to be deposited into the personal account of the check presenter. Here, however, the money was deposited into a fiduciary account, not Walji’s “personal” account. The Motion has not presented any evidence, compelling or otherwise, in support of quashing the subpoenas. Plaintiffs have failed to carry their burden of showing good cause to quash the subpoena (s). In fact, the opposite is true - the subpoenas call for relevant information central to this litigation. The Motion should be denied. Plaintiffs Have Failed to Carry Their Burden to Demonstrate Good Cause for Quashing the Subpoenas. “Under the discovery statutes, information is discoverable if it is unprivileged and is either relevant to the subject matter of the action or reasonably calculated to reveal admissible evidence.... As we stated in the Pacific case [Pacific Tel & Tel Co. vs. Superior Court 2 Cal.3rd 161] the relevance of the subject matter standard must be reasonably applied; in accordance with the liberal policies underlying the discovery procedures, doubts as to relevance should generally be resolved in favor of permitting discovery.... and the burden is placed upon the party opposing discovery to show good cause for a protective order limiting discovery.” Valley Bank of Nevada vs. Superior Court 15 Cal.3d 652, 657 (1975). /1/ 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 29 26 27 28 “In construing a statute which accords confidentiality to information sought by discovery liberality in allowing discovery is the rule unless statutory or public policy considerations clearly prohibit it.” Davis vs. Superior Court 36 Cal.3d 291, 300 (1984). Compare Green vs. Baca 226 F.R.D. 624, 653 (2005 USDC CD Cal.): “ [T]he burden of persuasion in a motion to quash a subpoena issued in the course of civil litigation is borne by the movant.” Compare also International Brotherhood of Teamsters vs. Eastern Conference of Teamsters 162 F.R.D. 25, 29 (1995 USDC SD New York): ' “Parties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action.... ‘The information sought need not be admissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence.’ Thus, parties are entitled to discovery concerning ‘any matter that bears on, or that reasonably could lead to other matter that could bear on, any issue that is or may be in the case....’ (citing authority). ‘This obviously broad rule is liberally construed’.... Moreover, the scope of discovery is not limited to the merits of an action but also may include inquiry into facts that may be used to impeach a witness’s trial testimony.” Plaintiffs have offered no evidence establishing good cause to overcome the general rule of liberality of discovery. This is 5 10 11 12 13 14 15 le 17 18 19 20 21 22 23 24 2b 26 27 28 particularly so when the material sought to be discovered goes to the heart of the case. The Information Sought is Highly Relevant, and No Showing Has Been Made to Deny Defendant Discovery of It. The TAC at 9914-31. describes the 17 checks at issue in this litigation. (See Exhibit 1 attached to the Declaration of John Gloger.) Discovery in the case has revealed the two bank accounts (one at Bank of America, and the other at Union Bank) upon which all the checks were drawn. The subpoenas have identified those bank account numbers. As demonstrated in the Declaration of John Gloger, despite discovery, Defendant has been unable to verify that all 17 checks that are the subject of this litigation were ever deposited at Defendant F&M. By the subpoenas, Defendant seeks information to help learn whether the checks were, or were not, so deposited. The subpoenaed writings are clearly relevant. The Motion suggests that financial privacy rights may be implicated, but those rights must be balanced against the clear relevance of the subpoenaed material, and the important interest of ascertaining the truth. Any purported “privacy” right asserted by Plaintiffs is outweighed by the need to ascertain the truth, particularly where, as here, the financial information sought goes to the heart of the case. 1.0 11 12 1.3 14 15 16 17 18 19 20 21 22 23 24 25 26 27 ZB “The state has a significant interest in facilitating... ‘the ascertainment of truth and the just resolution of legal claims’.... Indeed, ‘(t]he very integrity of the judicial system and public confidence in the system depend on full disclosure of all the facts, within the framework of the rules of evidence’.... The scope of the privilege is determined by balancing the interests protected by shielding the evidence sought with those advanced by disclosure.” Scull vs. Superior Court 206 Cal.App.3d 784, 790-791 (1988). “In order to facilitate the ascertainment of truth on the just resolution of legal claims, the state clearly exerts a justifiable interest in requiring a businessman to disclose communications, confidential or otherwise, relevant to pending litigation.” In Re Lifschutz 2 Cal.3d 415, 425 (1970). “Unlike the situation in which a plaintiff seeks to discover defendant’s financial status solely for the purpose of assessing a punitive damages claim, the documents sought by petitioner here are fundamental to his case. He alleges that assets have been converted and diverted from the entities in which he has an interest to the individual defendants or to corporations which are the alter egos of the individual defendants. The only way petitioner can prove his case is to obtain defendant’s financial records.... Where, however, ‘the financial information goes to the heart of the cause of action itself, a litigant should not be denied access so easily.’ In the present case, the court abused its discretion by denying the request outright.” Rawnsley vs. Superior Court 183 Cal.Zpp.8d 86, 21 (1986). w DN 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The subpoenas also asked for records concerning checks drawn or payable from the subject accounts to a number of other defendants and entities - for example: Stone-Lamm Trust, Calpension, Inc., Pasto, Inc., Arista, LLC, Abdul Sultan Walji, Renario C. Francisco, Cynthia D. Francisco, Fatima Walji, etc. The reason is that the TAC contains causes of action against, and concerning, these other persons and entities. For example, the third cause of action [TAC, p.l1l6] contains a cause of action for conversion against Abdul Walji, Calpension, Inc., Renario C. Francisco, Cynthia D. Francisco, and Fatima Walji. Importantly, at 178 of the TAC, Plaintiffs allege: “That the [above-described] defendants intentionally and substantially interfered with Plaintiffs’ property rights by removing, transferring, shifting, moving, taking or withdrawin Plaintiffs’ retirement funds and thereby prevented Plaintiffs from having access to said retirement funds and refusing to return Plaintiffs’ retirement funds to them as demanded in the amount $1,440,000 or and (sic) interest.” The TAC also contains a fifth cause of action for fraud and concealment against Abdul Walji, Calpension, Inc., and Arista, LLC. “When ruling on a motion to quash a subpoena duces tecum, the court... is not limited to consideration of the affidavit before it, but may also consider the pleadings filed in the case which show, or might show, the materiality of the evidence sought to be obtained.” 50 Cal.Jur.3d Process, Notices and Subpoenas §102 (2018). 8 10 11 12 13 14 15 16 17 18 19 20 21 2.2 2.3 24 25 26 2% 28 “The motion or application to set aside or vacate the subpoena gives the court the opportunity to examine the issues raised by the pleadings in the cause, and in the light thereof to determine the apparent relevancy of the evidence which is sought to be elicited, and also to pass upon the question whether an order for the production of the document in question would constitute an unlawful invasion of privacy.” Southern Pacific Co. vs. Superior Court 15 Cal.2d 206, 209 (1940). The Declaration of John Gloger will elaborate upon, and demonstrate, why the requested information goes to the “heart of the cause of action itself”, and why the production of the subpoenaed records 1s necessary. [Incidently, in this case, although Plaintiffs complain there was no “affidavit” in support of the subpoenas, there is no requirement for such an affidavit. “A deposition subpoena that commands only the production of business records for copying need not be accompanied by an affidavit or declaration showing good cause for the production of the business records designated it.” CCP §2020.410(c)] Dated: 23 March 2018 Respectfully submitted, 1350 SF Law Offides of Micha€él Leigit By JOHN GLOGER, Attorney for Defendant, Farmers & Merchants Bank of Long Beach 13-41300ppmtnquashdepoBOA/bh Declaration OO 0 N N n t BR W N N O N N N N N N N N m e e m e m e m e m e s e a e s co J O N Wn pA W N = DO VU N N N N R W N N — OO Michael Leight, Esq. #71637 Law Offices of Michael Leight 6700 Pacific Coast Highway Suite 237 Long Beach, California 90803 562/430-1009 FAX 562/431-2154 Attorney for Defendant, Farmers & Merchants Bank of Long Beach 13-4130/bh SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF ORANGE-CENTRAL JUSTICE CENTER BILL BHASKAR, individually and Case No. 30-2013-00682081 BILL BHASKAR, M.D., Inc., Judge David Chaffee Plaintiffs, Declaration of John Gloger in Support of Opposition to Motion to Quash Deposition Subpoena and for Production of Documents of Union Bank of California VS. FARMERS & MERCHANTS BANK aka GENEVA SAVINGS BANK, ARISTA, LIC, a California Limited Liability Company; ABDUL SULTAN WALJI, an individual and as Trustee of the STONE LAMM TRUST; RENIERO CASTILLO FRANCISCO, an individual; CYNTHIA D. FRANCISCO, an individual; CALPENSION, INC., a California Corporation; MRS. [Filed with an Opposition] Date: 6 April 2018 Time: 9:30 AM rr S f e e e t a a a a a a a a a a S a N a a (1% Name Unknown) WALJI, an Dept: C20 individual, Defendants. /// /7/ DECLARATION OF JOHN GLOGER no OO 0 N O N nn BA Ww 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 a7 28 I, JOHN GLOGER, declare as follows: 1. I have personal knowledge of the following facts and if called as a witness I could and would testify competently thereto. 2. I am an attorney associated with the Law Offices of Michael Leight, which is counsel for Defendant Farmers & Merchants Bank of Long Beach (Defendant or F&M). 3. I am familiar with this case, and with the legal issues associated with it. 4. I prepared the Demurrers to the five or six amended pleadings filed by the Plaintiffs, (Bhaskar, M.D., Inc. and Bill Bhaskar, individually), and I prepared the Respondent’s Brief on appeal for F&M. I have also reviewed much of the discovery in this case, including discovery propounded by Plaintiffs, and discovery propounded by Defendant. 5. The Court of Appeal, in its unpublished opinion, affirmed all rulings of the trial court, which had sustained, finally without leave to amend, demurrers to the five or six pleadings prepared by Plaintiffs, which included numerous purported causes of action, but with one exception. The Court of Appeal determined that, at the pleading stage, Plaintiffs had stated a cause of action for common law negligence based on the case of Sun ‘n Sand, Inc. vs. United California Bank 21 Cal.3d DECLARATION OF JOHN GLOGER 1 OO 0 ~~ O N un Es W N N O N N N N N N N N e e e m e e e e e e e e e s 0 ~ N O A hh RA R W N L , N N N R W N D = o 671 (1978). 6. Attached hereto as Exhibit 1 is a copy of the Third Amended Complaint for damages filed by Plaintiffs (TAC), which was the complaint considered by the Court of Appeal in determining that Plaintiffs had stated a cause of action for common law negligence. 7. 9914-31 of the TAC list all the checks which Plaintiffs have alleged make up the substance of their claims against F&M. The checks span a period of approximately 11 years, from 2000- 2011. dg. Some of the checks are alleged to have been “endorsed over” to F&M [see TAC 9914-23], and some of the checks are alleged to have been written directly to F&M. [1924-30]. 9x The checks which are alleged to have been “endorsed over” to F&M are checks drawn on the Union Bank of California (Union Bank). Please see Exhibit 1 to the deposition subpoena which was served upon Union Bank, a copy of which subpoena is attached to Plaintiffs’ Motion to Quash. Another copy of that check (which was attached as an exhibit to the subpoena) is attached hereto as Exhibit 2. 10. This is a check dated 12/21/2000 in the sum of $172,500 payable to one of the Plaintiffs - Bill Bhaskar, M.D., Inc. Plaintiffs allege that this check was “endorsed over” as payable to DECLARATION OF JOHN GLOGER 2 FN ~ Oo 10 I 12 13 14 L3 16 17 18 19 20 21 22 23 24 25 26 27 28 F&M [TAC 914], and Plaintiffs allege that they entrusted the check with their pension plan administrator and fiduciary Abdul Walji (Walji), and allege that Walji took the check to F&M and deposited it into a pension plan account maintained by Walji for Plaintiffs (and other participants in a “multi-employer pension plan”). 11. Defendant has been unable to verify that this check was deposited at F&M, because it was allegedly deposited prior to the year 2005, which is outside of Defendant F&M’s retention period for such records. 12. Plaintiffs allege that the checks which were made directly payable to F&M were drawn on Plaintiffs’ account at Bank of America. Please see Exhibit 1 to Defendant’s deposition subpoena to Bank of America, a copy of which subpoena is attached to Plaintiffs’ Motion to quash it. Attached hereto as Exhibit 3 and fully incorporated by reference is another copy of the check (which was an exhibit to the subpoena), showing that Bank of America account number. 13. Although F&M does not retain such records for the period of time prior to 2005, many of the checks alleged in the TAC predate 2005. The subpoenas directed to Bank of America and Union Bank were designed to retrieve whatever records (checks, bank statements, etc.) are available from those banks, to either confirm, or disprove, the numerous allegations made by Plaintiffs in this lawsuit, regarding the 17 checks which form the entire DECLARATION OF JOHN GLOGER 3 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 basis for this lawsuit. 14. During the course of discovery, Defendant asked Plaintiffs to produce copies of all checks which are the subject of Plaintiffs’ lawsuit. Plaintiffs have not done so. For example, Plaintiffs have not produced, to the best of my knowledge, a copy of the $222,500 check described at 915 of the TAC. During discovery, however, Plaintiffs did produce a copy of an F&M deposit receipt showing a deposit of $222,500. A copy of that deposit receipt is attached hereto as Exhibit 4 and fully incorporated by reference. Plaintiffs assert that the deposit receipt shows that Plaintiffs’ alleged $222,500 check was deposited at F&M on about 13 June 2001. 15. The problem with Plaintiffs’ assertion described in the preceding paragraph, is that it is unproven. The account maintained by Walji at F&M was an account (a “multi-employer pension plan account”) into which Walji would deposit monies not only for Plaintiffs, but also for others. For example, attached hereto as Exhibit 5 and fully incorporated by reference is a writing produced by Plaintiffs during discovery. It shows that on 2 May 2002, apparently $85,000 was deposited into the F&M account. However, the notes at the top of Exhibit 5 demonstrate that only a portion of the funds represented by the deposit receipt represented monies or a check by Plaintiffs. The balance of the sum listed on the deposit receipt represented money deposited “for another client” of Walji’s The importance of Exhibit 5 is that any F&M deposit receipt does not necessarily represent DECLARATION OF JOHN GLOGER 4 ~~ S S Oo 0 3 S N Wn 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Plaintiffs’ check(s) only. 16. When we look again at Exhibit 4 attached hereto (the deposit receipt for $222,500) we cannot determine whether that deposit receipt is, or is not, linked solely to the check described at TAC 915, or at all. We need to see the check, not the deposit receipt. 17. 978 of the TAC, which is directed against Walji, and other defendants (other than F&M), alleges: “78. Plaintiffs were the sole owners of said retirement funds and had the right to possess said funds at any time Plaintiffs so desired to do so. That the Defendants intentionally and substantially interfered with Plaintiffs’ property rights by removing, transferring, shifting, moving, taking or withdrawing Plaintiffs’ retirement funds and thereby preventing Plaintiffs from having access to said retirement funds and refusing to return Plaintiffs’ retirement funds to them as demanded in the amount of $1,440,000 or and (sic) interest.” 18. Since Plaintiffs’ own pleading alleges that Walji (and others) was engaged in “transferring”, “shifting”, “moving”, “taking or withdrawing” Plaintiffs’ monies, we cannot tell simply from “deposit receipts” whether money represented by deposit receipts belonged solely, or at all, to Plaintiffs. 19. Because of Plaintiffs’ own allegations regarding checks or monies being “transferred”, “shifted”, “moved”, “taken or withdrawn” by other persons, the subpoenas ask for information DECLARATION OF JOHN GLOGER 5 10 11 12 13 14 I5 16 17 18 19 20 21 22 23 24 25 26 ZF 28 about these other persons as well. For example 91 of attachment 3 to the subpoena to Bank of American asked for copies of all checks etc. for the subject bank account payable to F&M, but also those payable to the Stone-Lamm Trust (a fiduciary account that Walji maintained at F&M), Calpension, Inc. (another defendant), Pasto, Inc. (another Walji-associated entity), Arista, LLC (another defendant), Allied Benefits (another Walji-related plan), etc., and regarding defendants Walji, Renario Francisco, Cynthia Francisco, and Fatima Walji (Walji’s wife). The same is true of the subpoena directed to Union Bank. For example, the subpoena there asked for checks payable to the above-described defendants and entities from the account identified in Exhibit 2 attached hereto. 20. Defendant has propounded discovery to Plaintiffs asking that Plaintiffs produce not only the checks they have which they allege to be the subject matter of this lawsuit, but also asking Plaintiffs to produce all bank statements relevant thereto. Rather than stating that Plaintiffs did not have such bank statements, Plaintiffs responded that Plaintiffs will not produce such bank statements. Why? 21. Bank of America and Union Bank may have a retention period for its bank records that is longer than Defendant F&M’'s retention period. This may apply to the checks, as well as the bank statements, which the subpoenas have identified. //7 DECLARATION OF JOHN GLOGER 6 IS ~ O n W n 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 22. In F&M’'s First Amended Answer to Plaintiffs’ claim of common law negligence, Defendant F&M raised a number of affirmative defenses. The twelfth affirmative defense is entitled “Judicial Estoppel”. That defense asserts that in Plaintiff Bill Bhaskar’s divorce proceedings, Bhaskar made certain disclosures to the family law court that did not match all the checks which Plaintiffs in this action allege were allegedly “deposited” at Defendant F&M. (Plaintiffs have asserted that the disclosures to the family law court did not need to include the checks which are the subject matter of this action. That issue, however, has not been decided.) 23. The records subpoenaed by F&M, which are the subject of the Motions to Quash, are important to Defendant’s defense(s) in this action. I declare under penalty of perjury that the foregoing is true and correct. Executed at Long Beach, California on 23 March 2018. 7 John“Gloger = 13-4130decjg3/bh DECLARATION OF JOHN GLOGER 7 Exhibit 1 La w Of fi ce s of F or oo za nd eh , A P C 08 91 Ir vi ne Ce nt er Dr iv e, Su it e 13 0 Ir vi ne , CA 92 61 8 10 11 12H 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ELECTROHICALLY FILED Superior: Court’ of California, Coury of Orange 06/26/2014 at 03:30:00 Phd Clerk of the Superior Court By Julie Camey Deputy Clerk Mazin FO ROOZANDEH (SBN: 248685) LAW OFFICES OF FOROOZANDEH, APC 9891 IRVINE CENTER DRIVE, SUITE 130 IRVINE, CALIFORNIA 92618-4307 TELEPHONE: 008) 336-8505 FACSIMILE: 208) 485-5959 storney for Plaintiffs WoIncy ils SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF ORANGE-CE NTRAL JUSTICE CENTER BILL BHASKAR, individually and BILL Case No.: 30-201300682081 BHASKAR, M.D, Inc., Hon: Kirk Nakamura THIRD AMENDED COMPLAINT Plaintiffs, FOR DAMAGES: 1. COMMON LAW NEGLIGENCE vs. (F & M) | ) ) ) ) ) ) ) 2. CONVERSION (UCC §§ 3203- ) 3420-F&M) ). 3. CONVERSION (Walji) ) 4. MONEY HAD AND RECEIVED ) F&M) ) 5. FRAUD & CONCEALMENT ) (Walid) : ) 6. FRAUD & CONCEALMENT : F&M) i FARMERS & MERCHANTS BANK aka GENEVA SAVINGS BANK, ARISTA, LLC, a California Limited Liabili ty company; ABDUL SULTAN WALIJIL, an individual and as Trustee of the STONE LAMM TRUST; RENIERO CASTILLO FRANCISCO , an individual; CYNTHIA D. FRANCISCO, ati individual; CALPENSION, INC., 2 Califor nia corporation; Mrs. Fatima Walji, an indiv idual, and DOES 1-50. [DEMAND FOR JURY TRIAL] Defendants. ) ) ) ) ) ) ) Plaintiffs BILL BHASKAR and Bill Bhaskar,M.D., Inc., for their Third Amended Complaint (TAC) against all named defendants and Does 1 — 50, collectively referred to as “Defendants,” allege as follows: PLAINTIFFS’ THIRD AMENDED COMPLAINT .1- La w Of fi ce s of F or oo za nd eh , A P C 98 91 It vi ne Ce nt er Dr iv e, Su it e 13 0 Ir vi ne , CA 92 61 8 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PREFACE At issue is $1,440,000.00 in principle sum and $12,795,622.00 in interest thereon. Plaintiffs were the “transferors” of 17 checks they wrote payable to F & M Bank out of their Bank of America account from December 21, 2000 through December 2011. Plaintiffs were the “depositors” of the 17 checks they wrote payable to F & M Bank out of their Bank of America account from December 21, 2000 through December 2011. Defendant F & M was the “debtor” of the plaintiffs as depositors for the 17 checks they wrote payable to F & M Bank out of their Bank of America account from December 21, 2000 through December 23, 2011. Pursuant to UCC 4-104(5) plaintiffs were the “customers” of F & M Bank for the 17 checks they wrote payable to F & M Bank out of their Bank of America account from December 21, 2000 through December 23, 2011. It is axiomatic that the relationship between a bank and its depositor arising out of a general deposit is that of a debtor and creditor. It is the general rule that must be conceded that the undertaking of a bankiis to pay out the depositor’s money only on the order of the depositor and in dccordance with that order. There is an “implied contract” between the collecting bank (F & M) and the plaintiffs upon the collecting bank accepting, processing, presenting and securing payment of the 17 checks at issue. Li As a matter of law, under these facts, a duty of care was owing to the plaintiffs by F&M upon presentation of the 17 checks and that duty was breached when F & M failed to make reasonable inquiry with the plaintiffs as to Walji’s authority to divert those checks into his Stone-Lamm trust account. | Walji was not the employee or agent for the plaintiffs for the purpose of iftstructing F&M what to do with the 17 checks. | All 17 checks were made payable only to F & M. The plaintiffs never consented or authorized their checks to be deposited into the Walji Stone-Lamm Trust account. It was not until F & M demurrer to plaintiffs lawsuit that F & M concealed PLAINTIFFS’ THIRD AMENDED COMPLAINT a. La w Of fi ce s of F or oo za nd eh , A P C 98 91 Ir vi ne Ce nt er Dr iv e, Su it e 13 0 Irv ine , CA 92 61 8 10 11 fh a 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 from the Payor bank (Bank of America) that F & M deposited their 17 checks into the Walji Stone-Lamm Trust account, . e« In 1992 F & M was sued [or a similar case and Mr. Leight was the banks counscl of record. The trial court’s sustaining of the demurrer by F & M was reversed on appeal on the fr that the court held that F & M owed a duty of care to the plaintiffs as they “occupied” a similar position as the plaintiffs do in this case. (Sehremelis v. Farmers & Merchants Bank (1992) 6 Cal. App. 4th 767). oo o Walji was not the bank’s transferor, depositor or customer with respect to the 17 checks at issue. He was simply the vessel or means for plaintiff's checks written bythe plaintiffs and signed by the plaintiffs from their own bank account to arrive at F & M’s Lake Forest Branch. ; e F & M breached its legal duty to the plaintiffs when it failed to make reasonable inquiry as fd what plaintiff: wanted the bank to so with their checks or in n the alternative F&M breched. its duty for not rej ecting the checks. GENERAL ALLEGATIONS I. Introduction Is Plaintiff, Bill Bhaskar is an individual residing in the County of Orange, State of California and was and remains employed by B.M.S. Physician Practice, a Medical Group, Inc. Plaintiff Bill Bhaskar MD, Inc., is a California corporation. er 2 Defendant Farmers & Merchants Bank aka Geneva Savings Bank (hereinafter “F & M”) is located at 23772 Rockfield Blvd:; Lake Forest California-92630: Plaintiff entrusted approximately] $1,444,000.00 in principle to F & M from 2000 through December 23, 2011 via 17 separate checks drawn on their checking account with Bank of America. On September 26, 2013, plaintiff by and through his counsel sent a written demand to the F & M to turn over the $1,259,787.00. (The actual amount is $1,444,000.00-Notice of Errata has been filed & served) F & M refused to do so. On each: occasion, the 17 checks were made payable to F & M as payee by virtue of the fact the plaintiff either endorsed each check over to F & M or made their checks directly payable only to F&M as the named payee and F & M then endorsed the checks over to itself. F & M Sia the backside of] the checks and then wrote account number 11715553 thereon. For example: PLAINTIFFS’ THIRD AMENDED COMPLAINT 3s L a w Of fi ce s of Y o t o o z a n d e h , A P C 08 91 Ir vi ne Ce nt er Dr iv e, Su it e 13 0 Irv ine , CA 92 61 8 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 officer of defendant Calpension. Walji is now serving time in Federal prison in Texas. PAY TO THE ORDER OF WITHIN NAMED PAYEE FARMERS & MERCHANTS BANK OF LONG BEACH—, LAKE FOREST BRANCH FOR DEPOSIT ONLY 11-715553 Thereafter, F & M breached its duty to the plaintiffs by causing or permitting the checks to be deposited into a third party account (Walji) of a person not entitled to procure payment or enforc the checks or receive payment, thus converting plaintiff's money under Commercial Code § 3420(a), 3. Defendants Arista, LLC (“Arista”) is a California limited liability Company with a principal place of business located in the County of Orange, State of California. The California Secretary of State lists Arista’s address as 7 Coastal Oak, Newport Coast, CA 92657. 4. . Defendant Abdul S. Walji (“WALJI"), individually and on behalf of the Stone Lamm Trust, is an individual residing in the County of Orange, State of California. On information and belief, plaintiff alleges that WALJI was the organizer, sole manager, chief executive officer, president, secretary, chief financial officer and treasurer of defendant Arista and the sole shareholder and 3 Defendant Reniero C. Francisco (“Francisco”) is an individual and at all times herein mentioned was a resident of the County of Orange, State of California. Plaintiff farther allege, based on information and belief, that Francisco was the president and principal of Arista. : 6. Defendant Cynthia D. Francisco, at all relevant fies, is the wife of deferidant Reniero Francisco. Plaintiff is informed and believes and thereupon alleges that defendant Cynthia Francisco is an individual conducting business and residing in the County of Orange, State of California. J Defendant Calpension Inc., is a corporation organized and existing in the State of California with its principal place of business located in the County of Orange State of California. Plaintiff is informed and believes that defendant WALJI utilized defendant Cal- Pension, Inc. as an entity to divert funds invested by plaintiff and others with defendant Arista. | 8. Defendant, Mrs. Fatima A. Walji at all relevant times, is the wife of defendant Abdul Walji. Plaintiff is informed and believes and thereupon alleges that defendant is an individual that financially benefited by her husband’s actions, ratified such fraudulent conduct and is in possession of funds that came from plaintiffs’ retirement fund. PLAINTIFFS’ THIRD AMENDED COMPLAINT -4- Su it e 13 0 Ir vi ne , CA 92 61 8 L a w Of fi ce s of F or oo za nd eh , A P C 98 91 Ir vi ne Ce nt er Dr iv e, 10 11 12 13 14 15 16 17 18 “19 20 21 22 23 24 25 26. 27 28 13. The acts, omissions and misrepresentations which form the basis of plaintiff's claims herein -oceurred-in-the County-of Orange, State.of California and:defendants.cach reside and/or. are 9. Plaintiffs are informed and believe and thereupon alleges that defendants Arista; Calpension; the Stone Lamm Trust; and Does 1 through 50 are the alter ego’s of defendants A .Walji/F. Walji and Reniero and Cynthia Francisco. These cntitics arc a mere shell, instrumentality and conduit through which defendants Walji and Reniero and Cynthia Francisco, Does 1 through 50 carried on their own business exercising complete control and dominance of such business to such an extent that any individuality or separateness of the business entity defendants and individual defendants does not exist. 10. Adherence to the separate existence of these business entity defendants and the individual defendants would permit an abuse of the corporate privilege and would promote an injustice by allowing defendants Reniero and Cynthia Francisco and Walji and Does 1 through 50 to personally benefit from the wrongful acts and omissions. 11. The true names and capacities of defendants Does 1 through 50, inclusive are unknown to plaintiff, who therefore sue said defendant Does by such fictitious names. Plaintiff will seek leave to amend his complaint to include the true names and capacities upon ascertaining such information. ~ 12. Each reference in this complaint to defendants also refers to defendant Does sued under fictitious names. Plaintiffs are informed and believe, and based thereon allege, that these defendant are responsible in some manner for the events, acts, omissions and happenings referred to herein which caused financial damage and injury to plaintiffs. I1. Venue located or incorporated in the County of Orange. Therefore, venue is proper. in the State of California, County of Orange, pursuant to California Code of Civil Procedure § 395 \ I11. Dismissals i | | All other named defendants with the exception of Walji have been dismissed without prejudice. IV. BACKGROUND FACTS | - 14. Commencing on or about December 21, 2000, plaintiffs endorsed their first check over to defendant F & M in the amount of $172,500, bearing check number 3409. 15. On or about June 13, 2001 plaintiffs endorsed a second check over to deféndant F & M in the amount of $222,500 bearing drawer number 11006. 16. On or about June 12, 2001 plaintiffs endorsed a third check over to F & M in the amount of PLAINTIFFS’ THIRD AMENDED COMPLAINT 25s L a w Of fi ce s of F o r o o z a n d e h , A P C 98 91 Ir vi ne Ce nt er Dr iv e, Su it e 13 0 Ir vi ne , CA 92 61 8 10 1 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 $50,000.00. 17. On or about July 13, 2001 plaintiffs endorsed a fourth check over to defendant F & M in the amount of $4,787.00 bearing drawer number 11003. : 18. On or about April 23, 2002 plaintiffs endorsed a fifth check over to defendant’s F & M in thg amount of $50,000 bearing check number 4480. 19. On or about May 2, 2002 plaintiffs endorsed a sixth check over to defendant's F & M in the amount of $85,000 bearing drawer number 11006. Co 20. On or about April 12, 2003 plaintiffs endorsed a seventh check over to defendant’s F& Min the amount of $50,000 bearing drawer number 11003. 21. On or about February 6, 2004, 2001 plaintiffs endorsed an eighth check oyer to defendant F & M in the amount of $70,000.00 bearing drawer number 11003. 22. On or about December 27, 2005, plaintiffs endorsed a ninth check over to, AS sF& M in the amount of $50,000 bearing drawer number 11005. 23. On or about January 12, 2007 plaintiffs endorsed their tenth check over » defendant’s F & M in the amount of $50,000 bearing drawer number 11003. : 24. On November 29, 2007 plaintiffs® wrote their eleventh check payable to F & M in the amount $150,000-check number 1213. 25. On or about October 15, 2008, 2001 plaintiffs wrote their twelfth check payable to defendant F & M in the amount of $135,000.00 bearing drawer number 11005. 26.- On or about October 31, 2008, plaintiffs wrote their thirteenth check payable to defendant F & M in the amount of $50,000.00 bearing check number 1279. 27. On or about March 27, 2010, plaintiffs wrote their fourteenth check payable to defendant’s F & M in the amount of $50,000 bearing check number 1256. 28. On or about June 6, 2010, plaintiffs wrote their fifteenth check payable to defendant’ F & M in the amount of $100,000.00 bearing check number 1257. 29. On or about December 23, 2011, plaintiffs wrote their siden check pitable to defendant’s F & M in the amount of $100,000 bearing check number 1316. 30. On or about December 23, 2011, plaintiffs wrote their seventeenth check payable to defendant’s F & M in the amount of $55,000 bearing check number 1317. 31. For each check more fully asserted in paragraphs 14 through 30, those checks would be hand delivered to F & M's Lake Forest branch by defendant Walji. F & M then eres plaintiffs’ PLAINTIFFS’ THIRD AMENDED COMPLAINT -6- La w Of fi ce s of Bo to oz an de h, A P C 98 91 Ir vi ne Ce nt er Dr iv e, Su it e 13 0 Ir vi ne , CA 92 61 8 10 11 13 14 15 16 17 18 19 20 21 22 23 24 25 26 28 | 33, As — payee of the checks (by way of endorsement or named payee) indicates the | checks and then deposited plaintiffs’ checks without plaintiffs’ permission or consent into a third party account in the name of Abdul Walji the authorized signor of the Stone-Lamm Trust under account number 11715553. 32. On or about May 2013, plaintiffs attempted telephonic communication with defendant Walji and personal contact to no avail. As a direct result, plaintiffs engaged in independent investigation as to Walji’s whereabouts only to learn that Walji and defendant Francisco had been arrested by the FBI and indicted by a grand jury for misappropriating pension funds. As aresult, plaintiff Bhaskar presented himself at F & M located at 23772 Rockfield, Lake Forest to make inquiry as to the status of his retirement funds that he directly paid to F & Mover the last 12 years. However, the bank’s management refiised to discuss the status of his funds claiming he was not their customer, notwithstanding he had written checks totaling $1,444;000.00 to the F & M, which funds were to be secured and protected by F & M as those monies represented plaintiffs’ retirement account. drawer, (plaintiffs) intention to lodge the money in the custody of F & M and place the funds under its control, and nothing further as evident by the words written on the checks (both front & backsides). 34, F & M concealed from the plaintiffs and the Payor bank (Bank of America) 17 times that the checks were deposited into the Stone-Lamm account over a 12 year period soithat the Payor bank would honor-the checks by debitifig plaintiff's checking account to the finarjcial benefit of F & M. The benefit wasto haveplaintiffst-money-to-use-for-business-purposes-for profit — 35. After plaintiffs’ transferred (the transferors) their checks to F & M (the transferee), the plaintiffs never instructed F & M to deposit their checks into any third party account or the Stone- Lamm account, nor did they authorize or consent to have their retirement funds leave/depart the custody and control of defendant F & M. 36. Upon information and belief; plaintiffs allege that F & M permitted the withdrawal or transfer of plaintiffs’ retirement funds by Walji or others without the consent and knowledge of the plaintiffs. 37. In order to conceal the misappropriation and mismanagement from the plaintiffs, defendant Walji provided false and fraudulent pension plan statements to plaintiff which putported to show that plaintiffs’ capital accounts were increasing in value. PLAINTIFFS’ THIRD AMENDED COMPLAINT Js L a w Of fi ce s of F o r o o z a n d e h , A P C 98 91 Ir vi ne Ce nt er Dr iv e, Su it e 13 0 Ir vi ne , C A 92 61 8 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 instruction to deposit the 17 checks written and owed by the plaintiffs into his account, although the 38. As a result of defendant F & M's negligence and conversion and other tortuous conduct and mismanagement, plaintiff has been damaged in the amount of $1,440,000.00 in principle plus lawfu interest thereon in the appropriate amount of $12,795,622.00. FIRST CAUSE OF ACTION COMMON LAW NEGLIGENCE Against Farmers & Merchants Bank and Does 1-10) 39. The preceding bullet points and paragraphs of the Complaint are incorporated by reference as though fully set forth herein. : 40. At no times herein were the plaintiffs indebted to F & M. 41. DUTY ASA MATTER OF Law ExiSTS UNDER THE FACTS OF THIS CASE. Where a check is drawn to the order of a bank to which the drawer is not indebted, the bank is authorized to pay the proceeds only to persons specified by the drawer; a drawer of a check is owed a di duty of care by a collecting bank when the risk of harm is foreseeable. F & M has conceded that it followed Walji’s checks were all payable only to F & M. The duty of inquiry arose the moment Wlji (the delivery person) instructed F & M (the only named payee) to deposit the checks into his own account. Sun 'n Sand, Inc. v. United California Bank ( 1978) 21 Cal. 3d 671, 695 artidulates the one narrowly circumscribed situation under which a bank has a duty to the plaintiffs fo investigate a banking situation of this nature. Like here, that situation exists when large checks, drawn payable to the order of a bank are presented to the payee bank by a third party seeking to negotiate the checks for his or her own benefit. (Gil v. Bank of America, N.A. (2006)138 Cal. App. 4th 1371): “We hold simply that the bank may not ignore the danger signals inherent in such an attempted negotiation. There must be objective indicia from which the bank could reasonably conclude that the party presenting the check is authorized to transact in the manner proposed In the absence of such indicia the bank pays at its peril.” (Sun'n Sand, Inc. v. United California Bank (1978) 21 Cal. 3d 671; E_F. Hutton & Co. v. City Nat'l Bank (1983) 149 Cal. App. 3d 60; Mills v. U.S. Bank (2008)166 Cal. App. 4th 871). “We need not consider whether a special relationship exists between a collecting bank and the drawer of a check. It is UCB's conduct in crediting the émbezzler's account with checks PLAINTIFFS’ THIRD AMENDED COMPLAINT -8- L a w Of fi ce s of F o r o o z a n d e h , A P C 98 91 Ir vi ne Ce nt er Dr iv e, Su it e 13 0 Ir vi ne , CA 92 61 8 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (drawers), the checks were their checks and-the-checks-were-made-payable to F- 8M. -and-only E & drawn payable to UCB that forms the basis for relief herein.” “We agree that-an attempt by a third party to divert the proceeds of a check drawn payable to the order of a bank to the benefit of one other than the drawer or drawee suggests a possible misappropriation. Accordingly, we conclude that Sun 'n Sand's allegations define clan. al circumstances sufficiently suspicious that UCB should have been alerted to the risk that Sur ' Sand's employee was perpetrating a fraud. By making reasonable inquities, [the duty] UCB could have discovered the fraudulent scheme and prevented its success.” F & M therefore owed the plaintiffs a duty to make inquiry upon Walji’s request to have the plaintiffs’ checks diverted and thus credited to his account. F & M breached that legal duty when it failed to make the “inquiry” of the plaintiffs as to Walji’s authority to divert the funds from F & M’s control or in the alternative, F & M should have rejected Walji’s instructions all together. 42. Thus, the only person in this case that was authorized to give instruction to F & M was the plaintiff, Doctor Bhaskar pursuant to Com. Code § 4203 and the authorities cited herein. It is undisputed that the plaintiff wrote the checks out payable only toF & M, transferred th the check s to F| & M, and he never instructed F & M to deposit or transfer the funds into Walji’s account F&M admits it did not receive any instructions from the plaintiff but only from Walji, the delivery person, therefore by giving away plaintiff's money to Walji, without the consent of the plaintiffs, F& was negligent and by doing so it gave away $1,440,000.00 of the plaintiff's money. 43. DUTY AS A MATTER OF THE RELATIONSHIP BETWEEN THE PARTIES AND rag UCC EXISTS UNDER THE FACTS OF THIS CASE. Since it is undisputed that the plaintiffs were the check writers M for deposit only, plaintiffs are therefore the “depositors” and the bank is the “debtor” of the depositors for the amount of the deposit. Here, the sum of $1,440.000.00. “As between a bank and the depositor such money becomes the prope of the bank and the bank becomes the debtor of the depositor for the amount deposited. (Morse v. Crocker National Bank (1983) 142 Cal. App. 3d 228,232; Chang v. Redding Bank of Commerce (1994) 29 Cal. App. 4th 673). “A depositor is one who pays money into a bank in the usual course of. business, to be placed to his credit and subject to his check.” (Murphy v. Pacific Bank (1900)130 Cal. 542; Morse v. Crocker Nat'l Bank (1983)142 Cal. App. 3d 223. 44. MOREOVER, PLAINTIFFS WERE CUSTOMERS OF F & M PURSUANT 170 UCC od 04(5). PLAINTIFFS! THIRD AMENDED COMPLAINT 9. L a w Of fi ce s of F o r o o z a n d e h , A P C 98 91 Ir vi ne Ce nt er Dr iv e, Su it e 13 0 Ir vi ne , CA 92 61 8 10 1 12 13 15 16 17 18 19 20 21 22 23 24 25 26 27 28 k UCC 4-104(5) defines “Customer” to mean a person having an account with a bank OR for whom a bank has agreed to collect items. Here, F & M collected 17 items (plaintiffs’ checks) over a 12 year period from plaintiffs’ bank (Bank of America) totaling $1,440.000.00. 2. "tem" means an instrument or a promise or order to pay money handled by a bank for collection or payment. (UCC 4-104(9) 3. “Collecting bank” means a bank handling an item for collection. wt CC-4-105). F &M admits it was the collecting bank. (UCC 4-105(5). : Itis axiomatic that the relationship between a bank and its depositor arising out of a general deposit is that of a debtor and creditor. (Basch v. Bank of America (1943) 22 Cal:2d 316, 321 [139 P.2d 11; Union Tool Co. v. Farmers etc. Nat. Bk. (1923) 192 Cal. 40, 53; Smiths’ Cash Store v. First Nat. Bank (1906) 149 Cal. 32, 34 [84 P. 663]; Duggan v. Hopkins (1956) 147 Cal.App.2d 67,71; Homie Escrow etc. Corp. v, County of L.A. (1957) 155 Cal. App.2d 335, 338; Wrig, ht v. Bank o f California (1969) 276 Cal.App.2d 485, 488; Estate of Collins (1978) 84 Cal.App:3d 928, 933.) Such a deposit is in effect a loan to the bank. ( Smiths’ Cash Store v. First Nat. Bank, supra, 149 Cal. at p. 34.) Title to the deposited funds passes immediately to the bank which may use the funds for its own business purposes. (Bank of America Assn. v. California Bk. (1933) 218 Cal. 261, 273, 274; Smiths’ Cash Store v. First Nat. Bank, supra, 149 Cal. 32; Metropolitan L. Ins. Co. v.S. F . Bank (1943) 58 Cal. App.2d 528, 534). [Blut, upon demand by the depositor (plaintiffs) F & M is obligated to pay the debt reflected by the balance of the deposited funds. (Union Tool Co. v. F armers&; Merchants. Nat. Bank, (1923) 192 Cal. 40, 53; Allen v. Bank of America (1943) 58 Cal. App.2d 124,127.) 3 By virtue of the actions taken by F & M, it created a banking relationship with the plaintiffs collectively both as “depositors and customers.” 4S. EVEN IF THE PLAINTIFFS’ WERE NOT THE CHECK WRITERS (DRAWERS) AND THE CHECKS WERE NOT MADE PAYABLE 170 FF & M, THE FACTS AS PLEAD ARE SUFFICIENT 70 JUSTIFY A DUTY oF CARE BETWEEN THE PARTIES. Here, plaintiffs are the drawers, depositors and customers of I & M at all times mentioned herein. In Sehremelis v. Farmers & Merchants Bank ( 1992) 6 Cal. App. 4th 767, 775, the plaintiffs were not the drawers, depositors or customers of F & M, but the court held that they were in the “danger zone.” Hence, plaintiffs’ cause of action for negligence is PLAINTIFFS! THIRD AMENDED COMPLAINT -10- : La w Of fi ce s of F o r o o z a n d e h , A P C 98 91 Ir vi ne Ce nt er Dr iv e, Su it e 13 0 Ir vi ne , CA 92 61 8 | 10 11 12 13 14 15 16 17 18 19 20 21 23 24 25 26 27 28 tHe fiids forthe use of the drawer; (the plaintiffs) and-if the-bank-diverts the-funds-to an sufficient to justify a duty of care between the parties. The court held the plaintiffs “occupied a very similar position” and concluded thatthe bank-‘owed a duty of-care® to the: a reversed the trial court’s granting of the demurrer without leave to amend. (Mr. Leight is quite aware of this duty of care under these narrow facts as he was the attorney of record when the court of appeals reversed the trial court’s granting the banks demurrer). 46. Thereisan HE contract” between the collecting bank (F & M) and the plaintiffs upon the collecting bank accepting, processing, pres enting and securing payment of the 17 checks at issue. (California Mill Supply Corp. v. B of A Nat. Trust Savings (1950) 36 Cal.2d. 334) 47. Defendant F & M and Does 1 through 10 and each of them owed a duty to protect and safeguard plaintiffs’ retirement funds upon accepting each check or depositing each check as the named payee, and a further duty was activated when dishonest and unfaithful Abdul Walji, according to F & M, instructed F & M to divert each check, not insignificant in epouts, and drawn (Wali i who sought to ‘negotiate the checks for his own benefit, by way of deposit into his personal | accounts. Those instructions suggest a possible fraud and misappropriation ‘sufficiently suspicious to alert F & M that plaintiffs’ funds were being unlawfully diverted so that F & M should have and could have made reasonable inquires of the plaintiffs and in doing so, F & M could have discovered the fraudulent condrict and prevented its success. F & M breached its duty and proximately caused the loss of $1,440,000.00. 48. When a bank named as payee on a check receives and negotiates the chisck, as here, it holds unauthorized third party, as here, including a bank customer, it does so at its own risk/peril. (Pacific Finance Corp. v. Bank of Yolo (1932) 215 Cal. 357 and Pacific Indemnity Co. v. Security First Nat. Bank (1967) 248 Cal. App.2d 75.) 49. TF & M could have refused to receive the checks, but having accepted them and endorsed the instruments, it was bound to keep the moneys until it received plaintiffs’ directions to pay them out. The language of the check making the funds payable only upon the order of the defendant imposed upon it the duty of seeing that they were not, through its agency, improperly disbursed after it had received them. [F & M] could not safely pay out such funds except under the diréction of their lawful owner, here the plaintiffs. (Mills v. U.S. Bank (2008)166 Cal. App. 4th 871). 50. By breaching it’s duly of reasonable inquiry, F & M is liable for the entire amounts at issue, PLAINTIFFS! THIRD AMENDED COMPLAINT .1t- La w Of fi ce s of F or oo za nd eh , A P C 98 91 Ir vi ne Ce nt er Dr iv e, Su it e 13 0 Ir vi ne , CA 92 61 8 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 53. However, CCP section 348 [Deposit of Morey] provide that no statute of limitation p eriod 2000 through 2012, Neither Walji, F & M or anyone else ever contacted the plaintiff to inform them of any irregularities or other suspicious so as to place the plaintiffs on notice of any possib le as when it fails to make inquiry, it pays at its peril. (Pacific Finance Corp. v. Bank of Yolo, supra). 51s F & M had a further duty to protect such funds against fraudulent access, withdrawal a nd/or transfer as the custodian thereof. Further, before permitting the moving, transferring or withdraw of any of plaintiffs funds, the Bank had a duty to verify with the plaintiffs that such activity was authorized. It failed to do so. 52. The Statute of limitations has not expired pursuant to CCP section 348. for actions brought to recover money deposited with any bank. Here, CCP § 348 applies in that plaintiffs have established a depository relationship with the bank. Further, plaintiffs have also established a debtor/creditor relationship with the bank. (Morse v. Crocker National Bank (1 983) 142. Cal. App. 3d 228, 232, 233.) Moreover, section 348 also applies in ex delict cases based upon fraud or breach of duty. (King v. Mortimer (1948) 83 Cal. App. 2d 153). 54. Notwithstanding the limitation period does not begin to run, if any, until the discovery, by the aggrieved party, of the facts constituting the cause of action. Here, plaintiffs received deposit slips confirming that F & M had negotiated the 17 checks and deposited them accordingly from wrong doings, thus plaintiffs had no actual or presumptive knowledge of facts sufficient to put them on notice of inquiry. It was not until on or about July of 2012 when Walji could not be located and failed to return calls that caused the plaintiffs to investigate and determined that Walji had been indicted for fraud that caused the plaintiff, Doctor Bhaskar to travel to F & M in Lake Forest to make inquiry of his retirement funds. | ’ 55. ° Equitable tolling allows a plaintiff to file a claim beyond the limitations; period if, due to some action or misrepresentation by the defendant, he was unaware that the cause of action existed. Equitable tolling applies in cases where the plaintiff is ignorant of the action because the defendant has fraudulently concealed it. 56. [Equitable estoppel] is wholly independent of the limitations period itself and takes its life .. from the equitable principle that no man [may] profit from his own wrongdoing in a court of justice. (Lantzy; supra, 31 Cal.4th at pp. 383-384.) “Though the doctrine operates independently of the language of the Code of Civil Procedure and other codified sources of statutes of limitations, (4dddison v. State of California PLAINTIFFS’ THIRD AMENDED COMPLAINT 512 Ir vi ne , CA 92 61 8 L a w Of fi ce s of F o r o o z a n d e h , A P C 98 91 Ir vi ne Ce nt er Dr iv e, Su it e 13 0 10 11 13 14 15 16 17 18 ened Ei 20 21 22 23 24 26 21 28 (1978) 21 Cal.3d 313,318-319) its legitimacy is unquestioned. W e have described it as a creature of the judiciary's-inherent power-to-formulate- rules of proce dure where justice demands it” (Elkins v. Derby, (1974) 12 Cal.3d 410, 420, fn. 9, quoting Bollinge r v. National Fire Ins. Co. (1944) 25 Cal.2d 399, 410.) One aspect of equitable estoppel is codified in Evidence Code section 623, which provides that “[w]henever a party has, by his own staternent or condugt, intentionally and deliberately led another to believe a particular thing true and to act upon such belief, he is not, 11] any litigation atising ouf of such statement or conduct, permitted to c ontradict it.” (See DRG/Beverl) Hills, Ltd. v. Chopstix Dim Sum Cafe & Takeout III, Ltd. (1994) 3 0 Cal. App.4th 54.) 57. As a proximate result of the acts and omissions as alleged herein, plaintiffs have been damaged in excess of $1,259,787.00 plus prejudgment interest a ccording to proof in accordance with Civil Code § 3287 (a). SECOND CAUSE OF ACTION — CONVERSION... (Against F&M) 58. Plaintiffs incorporate the allegations of paragraphs 1 through 57 as though fully set forth herein. 59. Commercial Code § 3420. (a) “The law applicable to conversion of personal property applies to instruments. An instrument is also converted if it is taken by transfer, other than a negotiation, from a person not entitled to enforce the instrument or a bank makes or obtains paymen with respect to the instrurent for a person ‘not entitled to enforce the instrument or receive payment, 60. Plaintiff entrusted approximately $1,440,000.00 in principle to F& M from 2000 through December 23, 2011. On September 26, 2013, plaintiff by and through his counsel sent a written demand to the F & M to turn over the money. F & M refused to do so. On each occasion, the 17 checks were made payable to F & Mas payee by virtue of the fact the plaintiff cither endorsed each check over to F & M or made their checks directly payable to F & M as the only nam amed payee and Fl & M then endorsed the checks over to itself. F & M stamped the backside of the checks and then wrote account number 11715553 thereon. For example: PAY TO THE ORDER OF WITHIN NAMED PAYEE FARMERS & MERCHANTS BANK OF LONG BEACH— LAKE FOREST BRANCH FOR DEPOSIT ONLY 11-715553 PLAINTIFFS’ THIRD AMENDED COMPLAINT -13- L a w Of fi ce s of F o r o o z a n d e h , A P C Ir vi ne , CA 92 61 8 98 91 Ir vi ne Ce nt er Dr iv e, Su it e 13 0 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 65. UCC section 3206(c): If an instrument bears an indorsement (i) described in subdivision (b) Thereafter, F & M caused or permitted the checks to be deposited into a third part y account of a person not entitled to procure payment, i.e., Walji’s account. Thus converting plai ntiff’s money under Commercial Code § 3420(a). 61. F & M has admitted that Account number 11715553 is the Stone-La mm account and its signer is Walji. 62. As named payee of the checks (by way of endorsement or named p ayee) indicates the drawer, (plaintiffs) intention to lodge the money in the custody of F & M and place the funds under its control, and nothing further as evident by the words written on the checks (both front & backsides). 63. After plaintiffs’ transferred (the transferors) their checks to F & M ( the transferee), the plaintiffs never instructed F & M to deposit their checks into any third party ac count or the Stone- Lamm account, nor did they authorize or consent to have their retirem ent funds leave/depart the custody and control of defendant F & M. 64. Commercial Code section 4203. Subject to Division 3 (commencing with Section 3101) concerning conversion of instruments (Section 3420) and restrictive indorsemen ts (Section 3206), only a collecting bank's transferor can give instructions that affect the bank o r constitute notice to it. of Section 4201, or (ii) in blank or to a particular bank using the words "for de posit,” "for collection," or other words indicating a purpose of having the instrument co llected by a bank for the indorser or for a particular account, the following rules apply: (€)(2): A depositary bank that purchases the instrument or takes it for collection wh en so indorsed converts the instrument unless the amount paid by the bank with respect fo the instrument is received by the indorser or applied consistently with the indorsement. 66. At all times herein mentioned, F & M was the restrictive payee and en dorsee of the 17 checks because the backside of the checks state, “For Deposit Only. “In the publish ed portion of this opinion, we explain that this indorsement is... restrictive...thus the check ad be deposited and cannot otherwise be negotiated.” (Spencer v. Sterling Bank (1998) 63 Cal. App. 4th 1055). As relevant, an “indorsement" is a signature that alone or accompanied by other words is made on an instrument for the purpose of restricting payment of the instrument. (§ 3204, subd. (a): Spencer v. Sterling Bank supra). 67. “The use of the defendant's name as payee of the check indicated the drawer 's intention to PLAINTIFFS’ THIRD AMENDED COMPLAINT -14- L a w Of fi ce s of F o t o o z a n d e h ; A P C e, Su it e 13 0 2 Ir vi ne , CA 92 61 8 98 91 Ir vi ne Ce nt er D v 10 11 12-- 13 14 15 16 17 18 gy 20 21 22 23 24 25 26 21 28 own business purposes: (Bank of America Assn-v-California-Bk (1933)218-Cal,- 261,273, 274;— \'Smiths' Cash Store v. First Nai. Bank, supra, 149 Cal. 32; Metropolitan L. Ins . Co. v.S. F. Bank lodge the moneys in its custody and place them under its control, and nothing furthe r than this was inferable from the language of the check." (Sun 'n.Sand, Inc. v. United California Bank (1978) 21 Cal. 3d 671); Here, likewise the checks indicated the plaintiffs’ intention to lodge the moneys in F & Ms custody and place them under its control, and nothing further than this was inferable from thg language of the checks. Ther efore, F & M tock the checks by transfer and not by negotiation. uce 3203(a). “An instrument is # ansfer red when it is delivered by a. person other than its issuer for the purpose of giving to the person receiving delivery the right to enforce the instrument.” 68. Since it is undisputed that the plaintiffs were the check writers (drawers), the checks were their checks and the checks were made payable to F & M and only F & M for deposit only, plaintiffs are therefore the (“transferors” & “de epositors” and the bank is the “d ebtor” of the depositors for the amount of the deposit. Here, the sum of $1,440. 000.00. 69. Title to the deposited funds passes sivimediately to the bank which may use th e funds for its Q 943) 58 Cal. App.2d 528, 534). But using the funds for its own business purposes ‘does not ot include diverting the funds to an unauthorized account, here Walji/Stone-Lamm. But, upon demand by the depositor (plaintiffs) F & M is obligated to pay the debt re flected by the balance of the deposited funds. (Union Tool Co. v. Farmers& Merchants. Nat, Bank ( 1923) 192 Cal. 40, 53; Allen v. Bank of America (1943) 58 Cal. App.2d 124, 127. ) 70. That at all times herein mentioned the defendants have wrongfully exercised con trol over plaintiffs’ retirement funds and engaged in the smguthorized transfer of plainti fP s property. ' 71. Plaintiffs were the sole owners of said retirement funds and had the right to possess said funds at-any time plaintiffs so desired to do so. That the defendants intentionall y and substantially intetfered with plaintiffs’ property rights by removing, transferring, shifting, m oving, taking or withdrawing plaintiffs’ retirement funds and thereby preventing plaintiffs from havin g access to said retirement funds and refusing to return plaintiff’s retirement funds to them as demanded in the amount of $1,440,000.00 plus interest thereon. 72. That in July of 2012, plaintiff Bhaskar appeared at the F & M's bank to check o n the status of his retirement funds, where he spoke with Vice President Ada Baker, but h e was told that it was not his business to know as he was not a bank customer. PLAINTIFFS’ THIRD AMENDED COMPLAINT -15- L a w Of fi ce s of F o r o o z a n d e h , A P C 98 91 Ir vi ne Ce nt er Dr iv e, Su it e 13 0 Ir vi ne , CA 92 61 8 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 73. At all times herein mentioned, F & M concealed from the plaintiffs the fact that it wrongfully, if not fraudulently transferred plaintiffs’ money to an unauthorized third person and further concealed from the plaintiffs that their funds were being depleted until plaintiff learned of the conversion in July of 2012. Plaintiffs’ had no reasonable reason to suspect that F & M converted their funds nor should they of had any such suspicion as plaintiffs received deposit slips for each check they endorsed to F & M and reasonably believed that all funds were protected and secure as should have been the case. Thus, the statute of limitations did not accrue until these fraudulent facts were discovered in July 2012 making the complaint timely and the conversion cause of action viable. “To the extent our — have recognized a “discovery rule” exception to toll the statute, it has only been when the defendant in a conversion action fraudulently conceals the relevant facts. (AmerUS Life Ins. Co. v. Bank of America, NA. 143 Cal. App. 4th 631 2006) 74, That as a direct and proximate result of Defendants’ conduct, plaintiffs has been financially harmed. 75. That defendant’s conduct as alleged herein was a substantial factor in causing financial harm to the plaintiffs in the principle amount of $1,444,000.00 and approximately $12,795,622.00 in interest. THIRD CAUSE OF ACTION CONVERSION (Abdul Walji, Calpension, Inc., and Reiniero, Cynthia Francisco and Mrs. Fatima Walji) 76. Plaintiffs incorporate the allegations of paragraphs 1 through 75 as though fully set forth herein. 77. That at all times herein mentioned the defendant’s wrongfully exercised control over plaintiff's retirement funds. 78. Plaintiffs were the sole owners: of said retirement funds and had the right to possess said funds at any time plaintiffs so desired to do so. That the defendants intentionally and substantially interfered with plaintiffs’ property rights by removing, transferring, shifting, moving, taking or withdrawing plaintiffs’ retirement funds and thereby preventing plaintiffs from having access to said retirement funds and refusing to return plaintiffs retirement funds to them as demanded in the amount of $1,440,000.00 or and interest. 79. Plaintiffs did not consent to the acts, conduct and omissions as alleged in paragraph 52. PLAINTIFFS’ THIRD AMENDED COMPLAINT -16- L a w Of fi ce s of F o r o o z a n d e h ; A P C i 98 91 Ir vi ne Ce nt er Di ve , Su it e 13 0 Irv ine , CA 92 61 8 10 11 1 13 14 15 16 17 18 19 20 21 22 25 26 27 28 WN tiained: aids ER —— SU |[ewelve years, 1 ifivested approximately $1:2 million-($1:200:60)-with-Wlji- and- R&M. 80. That as a direct and proximate result of Defendants’ conduct, pla intiff has been financially 81. That defendant’s conduct as alleged herein was a substanti al factor in causing financial harm to the plaintiffs. FOURTH CAUSE OF ACTION MONEY HAD AND RECEIVED (Against Farmers & Merchants Bank) 82. Plaintiffs incorporate the legis of paragraphs 1 through 8 1 as though fully set forth herein. 83. Defendant should have in its possession $1,440,000.00 given to it by the plaintiffs for the purpose of placing said funds into a retirement account. 84. Plaintiffs provided defendants with $1, 440, 000.00 under the mi staken belief that defendant ‘was going to place these amounts in a retitfement account. Defendants inst ead placed platnuirh s $1,440,000.00 into accounts controlled by an unauthorized third person. ) 85. Plaintiffs signed the back of each check as follows: “Payable to- Farmers & Merchants.” Then signed underneath as follows: B. Bhaskar — Bill Bhaska r, MD- -Inc. 86. After plaintiffs wrote out their checks only payable to F & M, de fendant Walji would hand deliver said checks to the F & M bank. 87. "On July 20, 2013 plaintiff, Bill Bhaskar wrote a Leta to Wendy Olson o f the United States Attomney’s Office-USAO-New York, New York and stated as follows: “Over the course of these. 88. Therefore, plaintiffs $1,440,000.00 should be retumed to them plus $1 2,795,622.00 in interest as plaintiffs have stated a cause of action under counts 1 & 2. FIFTH CAUSE OF ACTION FRAUD AND CONCEALMENT (Against Walji and Calpension, Inc., & Arista) 89. Plaintiffs incorporate the allegations of paragraphs 1 through 88 as though full y set forth herein. 90. Defendant Walji and Calpersion, Inc., solicited plaintiff's business as an Employee Benefit Consultants. In soliciting plaintiff's, Walji and Calpension represented, among othe r things: (1) that they had the knowledge and experience to manage and maintain plaintiffs’ investments; (2) that they PLAINTIFFS' THIRD AMENDED COMPLAINT -17- L a w Of fi ce s of F o r o o z a n d e h , A P C 98 91 Ir vi ne Ce nt er Dr iv e, Su it e 13 0 Ic vi ne , CA 92 61 8 10 11 12 13 14 15 16 17 18 19 20 21 22 23 retirement funds were propertly manage and increasing in value. would invest the funds with F & M, which paid minimum interests but s aid Bank was virtually risk- free; (3) that they would maintain the funds with F & M and not use plain tiff's funds for their own purposes. 9]. To the contrary, said defendants concealed that they actually inten ded to misappropriate plaintiff's retirement funds by transferring Plaintiffs’ monies to other accoun ts and, for Walji, into his own pocket. | 92. After plaintiffs signed an endorsed the checks more fully described in paragraph 17 through 27 above, over to defendant F & M, the Bank then endorsed said checks an d deposited them into accounts controlled by Walji, thereafter defendants carried out their fr audulent scheme by raiding Plaintiffs’ monies, the Bank did actually nothing to stop them, and therefore, plaintiff's retirement fund vanished. 93. In order to conceal that plaintiff’s funds had been raided and improperly managed, defendants provided plaintiffs with interim reports so that plaintiffs wou ld believe that their 94. Defendants Arista and Does 21 through 25 knowingly and activel y participated in the scheme to defraud the plaintiffs. 95. Defendants intended for plaintiffs to rely on their representations and plain tiffs did, in fact, reasonably relied upon defendants’ representations to their detr iment. 96. Plaintiffs believed defendants’ representations as described above to be true, and there existed na reason at that time for plaintiffs to believe the representations to be false. 97. Plaintiff would not have agreed t o place their investment fu nds with defendants if they had known that defendants had made the above — reference misrepresentations. In a ddition, plaintiffs’ reasonably believed that F & M, as custodian of their investment, would pro perly oversee and supervise plaintiffs retirement funds. 98. ° As a direct and proximate result of defendant’s misrepresentations and frau dulent scheme, and plaintiff's reasonable reliance thereon, plaintiff has suffered damag es in an amount in excess of §1,440,000.00. 99. Defendant scheme was carried out with fraud, oppression and/or m alice, and plaintiffs are therefore entitled to punitive/exemplary damages in the amount accord ingly to proof. " PLAINTIFFS! THIRD AMENDED COMPLAINT .18- La w Of fi ce s of F or oo za nd eh , AP C Ir vi ne , CA 92 61 8 98 91 Ir vi ne C en te r Dr iv e, Su it e 13 0 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 23 28 || hand delivered to F &M’s Lake Forest t branch by defendant Walji. F & M then endorsed plaintiffs’ STXTH CAUSE OF ACTION "FRAUD AND CONCEALMENT (As Against Farmers & Merchants Bank) 100. Plaintiffs incorporate the allegations of par agraphs 1 through 99 as though fully set forth herein. 101. At all times mentioned herein, plaintiffs a nd defendant F & M were in a banking relationship as more fully alleged in paragraphs 2, 14 through 30, 33, 41, 42, 43, 44, 45, 66, 67, & 68 of the Second and Third Amended Complain ts. 102. On each occasion, the 17 checks were made payable to F & M as payee by virtue of the fact the plaintiff either endorsed each check over to F & M or made their checks directly payable only to F & M as the named payee and F & M then endorsed the checks over to itself. F & M stamped the backside of the cliecks and then wrote-account-num ber-11715§53 thereon. For example: 3 PAY TO THE ORDER OF WITHIN NAMED PAYEE FARMERS & MERCHANTS BANK. OF LONG B EACH— LAKE FOREST BRAN cH FOR DEPOSIT ONLY 11-715553 103. For each check more fully asserted i in paragrap hs 14 through 30, those checks would be checks and then deposited plaintiffs’ checks without plaintiffs’ knowledge, permission or consent into a third party account in the name of Abdul Walji t he authorized signor of the Stone-Lamm Trust under account number 11715553. 104. Each of the subject checks were written by plain tiff Bill Bhaskar, MD., from his Bank of America checking account, number 1854xxx745 from De cember 21, 2000 through December 23, 201 1. After accepting plaintiffs’ checks, F & M would t hen unlawfully deposit the checks into Walji’s Stone-Lamm Trust account and then the checks w ould be sent by F & M to Bank of America for payment, the Payor bank. 105. F & M intentionally did not mark the backside of the checks with any evidence that it diverted the checks into Walji’s Stone-Lamm Trust accou nt so as to avoid disclosing the same to thg PLAINTIFFS’ THIRD AMENDED COMPLAI NT -19- L a w Of fi ce s of F o r o o z a n d e h , A P C 08 91 Ir vi ne Ce nt er Dr iv e, Su it e 13 0 Ir vi ne , CA 92 61 8 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 21 28 Payor Bank for if it had, B of A would not have honored the c hecks, and in lieu thereof would have notified the plaintiffs that another person/entity other than the named p ayee received the funds from the checks, here Walji/Stone-Lamm Trust. This allegation is based on the face of the paid checks. Here, F & M did write account number 11715553 on the back of the checks f alling short to indentify that this account number was for the Walji Stone-Lamm Trust accoun t which would have been fatal to F & M’s scheme to conceal the true facts of the deposits. 106. F & M failed to disclose these important facts to the Pa yor Bank and plaintiffs knowing that neither would nor could discover the internal scam because F & M possessed a high degree of financial greed as Walji was delivering large amounts of checks n ot only from the plaintiffs herein, but from other sources to F & M, which then used said funds to make substantial profits as banks generally do from deposits. In other words, Walji was the banks so-called cash cow. | 107. By concealing the fact the plaintiffs’ checks were being ca shed by a non-payee, F & M was able to deceive the Payor bank and the plaintiffs for 12 years accumu lating $1,440,000.00 to invest at the expense of the plaintiffs. 108. F & M’s headquarters located in Long Beach, Califor nia and its Chairmen of the Board, the Board, and Daniel K. Walker, CEO knew that it’s Lake Forest Branc h was engaging in unlawful conduct as more fully described above, but ratified, condone and approved of the'deceit, as they all would financially benefit from plaintiffs’ funds as long ‘Walji conti nued to bring into the bank checks from others and have them deposited into the Stone-Lamm trust account. This allegation is based on the fact that during discovery, plaintiffs asked a straight forwa rd question to F & M under Form Interrogatory 12.2 which requested information about int erviews of witnesses concerning this lawsuit. F&M denied that it interviewed any employees after it was sued and served. Plaintiff wrote a “meet & confer” letter to defense counsel making inquiry if F & M wished to supplement its answer. Defense counsel responded with a resounding “No!” Appatently there was no reason to interview employees about the serious allegations of the complaint becaus e headquarters knew exactly what was occurring at its Lake Forest branch. 109. That from December 2000 through July 2012, plaintiffs did not k now of the concealed facts until Walji was indicted/arrested and the plaintiffs could no longer be bilke d out of any more money. | | 110. Walji and F & M further deceived the plaintiffs by providing the p laintiffs original deposit receipts from account number 11715553, the same account number written on the back of each PLAINTIFFS’ THIRD AMENDED COMPLAINT 220 L a w Of fi ce s of Fo ro oz an de h, A P C 10 89 1 Ir vi ne Ce nt er Dr iv e, Su it e 13 0 Ir vi ne , CA 92 61 8 10 11 12 13 14 15 16 17 oie 19 20 21 22 23 24 25 26 27 28 check to convince the plaintiffs that th eir checks had been appropriate osited with F & M. 131. That at all times herein, plaintif fs were unaware: of the deception comm itted by Walji and F & M. 112. That plaintiffs have been financially harmed in the principle amount of $1,440,000.00 plus interest thereon. 113. The acts and conduct of ¥ & M were so overwhelmingly cloaked wit h fraudulent intent and designed to harm the plaintiffs for th e s ole pur pose of financial gain with t otal and complete disrespect of the financial harm to a c ommunity respected doctor who unwit tingly trusted F & M, it is sO warranted and justified to award significant punitive damages to punis h and set an example of the bank to deter future such conduc t. PRAYER FOR RELIEF WHEREFORE, plaintiffs reques t: -1.—$1,440,000.00 in compensator y ( damages; : General and Special Damages Acco rding to Proof: _ Punitive Damages under the Sixth Cause of Action to Set an Example and to Punish F &M; . Prejudgment Interest in the amount of at least $12,795,622.00; 2: 3 4.. Attorney Fees; 5 6. Cost of suit; 7 . And for other relief the Court de ems proper. Dated: Tune 26,2014 —— : — wtf or « swells ve M ajid Fgfoozan, zande Ha PLAINTIFFS’ THIRD AMENDED COMPLAINT 221- — Exhibit 2 N E S E T A S t yy ee SC Z 0 9 b a m D i v a n v e , ET BT Le = TT OMY FY Ey A ET EWE eee rT Tee Te a Tes SUE EAS aay ae TL "34C B.M.S. PHYSICIAN PRACTICE UM!ON BANK OF CALIFORNIA A MEDICAL GROUP, INC. 16-49/1220 DBA MEDICAL ONCOLOGY CARE ASSOCIATES, A MEDICAL TE hoo PH. 1 } 541-662 1140 W. LAVETA AVE., STE 430 PH. (714) 541 2 ORANGE, CA 92868 12/21/2000. Y TO THE : N stip ld Bill Bhaskar, M.D.; Inc. [$5 *172,500.00 One Hondred Seventy-Two Thousand Five Hundred and 00/1 QO #2 3x3 dsasnnnssnnsrrans DOLLAR : ag Deon tac Bill Bhaskar, M.D., Inc. mo03ILoge B. M. s PHYSICIAN PRACTICE/ A MEDICAL. GROUP, INC. DBA MEDICAL ONCOLOGY CARE ASSOC. Bill Bhaskar, M.D., Inc. Cash in Bank - Oper £1220004961103300 105 17 rr To RL YT a Bi Wail KN a «fo Pots 12/21/2000 172,500.00 172,500.00 Exhibit 3 $50,000.00 Sequence Number: 9232377835 Amount: Account: 1854200745 Capture Date: 11/17/2008 Bank Number: 12200066 Check Number: 1279 (SY 75) oH MEA SN TE STERNER A ara ata aT, EEA ARIS =a i atorasarss ; BILL. BHASKAR, MD, INC. 1979 : 110 44TH ST (714) 541-6622 I ‘BEACH, CA 92663 3 18-68/1220 § NEWPORT | or, a Gof Fovvnadp amd) Me [10 & A Cats 5 1 rt a Host AR p ores i. ok fArherica | Husiness Moucf Murket i MuicAnds Mixdea Viejo Ee 2£872 Mutirfands Hlvd er OE oo , SEE ely. f fo PB fhe nie 200066 & blah 2?qm a G1, 200 71, Sar Q rr er \ [Fm » + Bill Bhaskar, MD H O N O R A R I A Zometa Launch Honorarium - July 8 M E E T I N G S - C H E C K I N G Zometa Launch Honorarium - July 8 7/2/2001 BBMD Set One 23 1 0 0 0 2 2,000.00 2,000.00 ¢l |uQ 19s awdgg THIS IS YOUR BEPOSITED WITH D E P O S I T RECEIPT Lol Farmers & Merchants Bank THigs your receipt. When. making @ d e p o s i t at a teller window, always obtain an official receipt. Chegks and :biher. "items. are received for deposit subject to provisions under the California C o m m e r i c a l : C o d e and the rules-and regulations of this Bank. Funds deposited may not be available for imnigdiaté: withdrawal, Exhibit 5 ABDUL S. WALJI ao rere EMPLOYEE BENEEE'S CONSULTANTS —_— + ACTUARIAL SERVICES Year und [oN deposit sly 5 gC 000 % a) Lous Ears Ql Yao oop Aey us xn las Cleewd i \ oot. Send Fev Cr thebcpy 50 TA Aoda, ADI Wroue. Aeqeesa 217, 157 od L ga {J wo bdo £280,715" AS AQ ro Af = KG Jel 0 _ ( } 0 A ) B.M.S. PAYSICIAN PRACTICE / & MEDICAL GROUP, INC. DBA MEDICAL ONCOLOGY CARE 6550C. 4480 ES Lo : 4/23/2002 Bill Bhaskar, M.D., Inc. : ; 50,000.00 RT Ba i a . THIS IS YOUR = Ya fon 7 i> El A SS DEPOSIT RECEIPT is worth the tive i A . : mia BOLE Famers & Merchants Bank : . © This is your recoipl. When making a deposit at a teller window, always obtain an official cecsifjl. Checks and other itoms are received for deposit subject to provisions ‘under the Califordla Commerical Code and the rules and regutations of this Bank. Funds deposited may not be availa for immediate withdrawal, RECEIPT Drawer: 11004 3/42/02 —— Transii: 10 14:25:30 = F.D..C. 11715353 — DIA Deposit $85000.00 GE, prams pur Pec Visit our web site at www.fub.com 50,000.00 Recyelubls Paper. Mailing address: P.O. Box 3580, Laguna Hills, CA 92654-3580 23193 La Cadena, Ste. 104, Laguna Hills, CA 92653 « Tel: (949) 830-7910 = Fax (949) 830-7911 F&EMDOCDMD1 -00131 PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF LOS ANGELES I, the undersigned, declare that I am, and was at the time of service of the papers herein referred to, over the age of 18 and not a party to the within action or proceeding. My business address is 6700 Pacific Coast Highway, Suite 237, Long Beach, California 90803. On 1S march 2018, I served a true copy of the following document (s) described as: Opposition by Defendant, Farmers & Merchants Bank of Long Beach, to the Amended Notice of Motion and Motion to Quash Deposition Subpoena and for Production of Documents of Union Bank of California; Declaration of John Gloger on interested parties listed below: Majid Foroozandeh, Esq. Law Offices of Foroozandeh, A.P.C. 9891 Irvine Center Drive, Ste 130 Irvine, CA 92618 X BY MAIL - I caused such envelope (s) with postage thereon fully prepaid to be deposited in the U.S. mail at Long Beach, California, to the aforementioned addressee(s). BY FAX (C.C.P. § 1013(a), (e)) by transmitting said document (s) by electronic facsimile from 562/431-2154 to the respective facsimile number(s) of the party(ies) stated above or on the attached service list. The transmission was reported as complete without error. BY OVERNIGHT MAIL (C.C.P. § 1013(c) I am readily familiar with the firm's practice of collection and processing correspondence for mailing with overnight mail. Under that practice it would be deposited with Federal Express or Overnite Express on that same day thereon fully prepaid at Long Beach, California in the ordinary course of business. The envelope was sealed and placed for collection and mailing on that date following ordinary business practices. BY EMAIL X (State) I declare under penalty of perjury under the laws of the State of California that the above is true and correct. (Federal) I declare that I am employed in the office of a member of the bar of this court at whose direction the service is made. Executed at Long Beach, California on 12 March 2018. BRAcvig ) Helagz Briana Hetrick