The Frances Kenny Family Trust et al v. World Savings Bank, FSB et al

Memorandum in Opposition re MOTION to Dismiss Mem. of P&As, Declaration of Larry Bates, Exhibit 1

N.D. Cal.October 15, 2004

1 _om_ _b_% SBN 78281 2 THE S_ELBAUER LAW HRM _ _o_ P_kw_ 3 S_ CA 95110 _0_451_499 4 F_: _1_47_31 thomas@_elb_c_m 5 _me_ _r _e Ke_y Fam_ Tm_ 6 _d _r _ Heinem_ _d K_ _n _ Tm_s _d R_ent_s 7 _ THE UNITED STATES COURT FOR THE NORTHERN _STR_T OF CALIFORN_ 8 9 THE FRANCES KENNY FAMILY TRUST; No. C 04 3_4 WHA SCOTT HE_EMAN AS TRUSTEE; KURT 10 _HNSCN, AS TRU_EE; AND SCOTT _i_ _ _e Ho_Wi_am Alsup]HE_EMAN AND KURT _HNSON AS 11 _DW_UAL ASSIGNEES ON BEHA_ OF KENN_ RE_ON_ TO DE_NDANT WORLD SAV_GS BAN_S MOTION TO 12 P_. D_M_S 13 v.s. DATE: November _ 2004 TIME: 8:_ _M. 14 WORLD SAV_GS BANK _B; THE CTRM: 19 DIRECTORS AND OFHCERS OF WORLD 15 SAV_GS BANK _AND CA_ 16 CAHTAL CORPORA_ON, 17 _fend_t_ 18 19 L 20 INTRODUCTION AND SUMMARY OF ARGUMENT 21 R N _rtun_ _at _ _ _fend_ts N _em_ _ engage _ _acter 22 assass_ _P_ _d _ _om_ _ _ m_ _ _i_. _s e_ _ _ r_ h_ _ _ o_e _e _ _m_ _ _e _mp_ _d N _d _ WOu_ _s _ M againstNN_ff_m_eo_ Asecondpuoo_is__s_m_em_e 25 _mplaint _d the _vol_ _fend_t's M_ _ _s_. _ _ NN_ffN pr_ed m _ _ _oM _ Nnd. Eow_ _NN _ not _ro_ _ _s legN _ng. _ a _ult, 27 NN_Ws _ _H _e this _ a respon_ _ NM _d will simply _&ess the i_ 28 NN_Ws _ NmNy a_s _s Co_ _ t_e _fi_ of Defenders e_s. -1- Case3:04-cv-03724-WHA Document14 Filed10/15/04 Page1 of 19 1 This action is brought by ScoR Hdneman and Kurt Johnson on beh_f of the Frances 2 Kenny Family Tru_ and as assignees of Frances Kenny again_ World Savings Bank, FSB, the 3 Officers and Dire_ors of World Savings Bank, FSB, and Castle Capital Corporation. The d_ms 4 asse_ed arose from Kenn_s execution of a promissory note in the amount of $21_00_00 5 secured by a firm deed of trust on re_ property locked _ 10655 Wexford S_e_ #5, San Diego, 6 California (hereinafter the Prope_y). 7 Defendant bases R's Motion to Dismiss under Ru_ 8 for _ck ofa condse _ement in 8 Pl_ntiffs' ofigin_ Complaint. The ba_s ofPl_ntiffs' ofigin_ Complaint _ Defendant's 9 _audulent non-disclosure and conce_ment during and after the mortgage contracting process. 10 The crux of Pl_ntiffs' d_m _ th_ when the promissory note had been executed, 11 Defendant intentionally failed to provide Frances Kenny notice that there would be no actu_ 12 _nding of money, th_ a bi-furcated _ansaction was b_ng inifi_ed whereby Defendant 13 established an account in its favor funding the note, and that due to the nature of Defendant's 14 mo_gage procedures, Defendant would have exchanged nothing ofv_ue for Kenn_s not_ 15 Essentiall_ th_ Defendant executed an illusory contact, a contact of adhesion, engaged in acts 16 of unconscionability in the contracting process, fraudulently induced Kenny into a one _ded 17 contracting process, altered the terms of the ofi_n_ contact, and failed to dispose essential 18 d_ails about the con_a_ that Defendant had full knowledge of and which Kenny could not have 19 asce_ned without Defendants assistance. 20 The actions complained of in Pl_nfiffs' amended compl_nt are essenti_ly fraud - fraud 21 in _s a_ fraud in non-disclosur_ and fraud in conce_ment. 22 Plaintiffs acknowledge that the Feder_ Reserve Board and ks system banks have the 23 leg_ power to engage in _action_ reserve banking and the creation of non-existent money, 24 accounting figure money. Pl_ntiffs do not complain of this. 25 Plaintiffs do complai_ however, of the fa_ th_ the Defendant, World Savings Bank, 26 represents th_ k _ loaning leg_ tender or lawful money, in effe_ federal reserve notes, when in 27 fa_lendingnothin_ Ifaloancanbedescribe_a"loan"ofaccountingfiguresanda 28 "loan" of the "confidence" consumers and vendo_ place in the bank's paper. R _ a tree -2- Case3:04-cv-03724-WHA Document14 Filed10/15/04 Page2 of 19 Case3:04-cv-03724-WHA Document14 Filed10/15/04 Page3 of 19 Case3:04-cv-03724-WHA Document14 Filed10/15/04 Page4 of 19 Case3:04-cv-03724-WHA Document14 Filed10/15/04 Page5 of 19 1 d_m_t is _ _ o_ e_d_ _ _ _ _.s 2 N_ _e_ _ m_e _ _ _ _e_ o_o_ _ _v_ _d _ _ 4 _d_d_____i_? R__to 5 _ a _ _ _n_ a p_ _ of _e prima _de c_e _ _e 7 prima _e c_e i_e _ _c_ _s _ _y _ a _fi_' _e _ _ _ 8 _e is _p_. _ 9 H_, _ _ _d_ _ _d_ _s _le _ _c_n _e da_s _s_e_ _ _ 12 Code _ 12 CFR 229, _ _s_e c_es su_ _ _ _ _d _ _ _ 13 _s _ _s_ v_y _ _ _g _ _e_ NN_' do not _e _ _ _ 14 money n_ _e _ _ _ _ _ _ _ _ w_ _e isle _ _ _e 15 _s _ _ _d_. 16 As b_ _d _cing N _ _ea _ commerce outsi_ the scope of mo_ profession_ 17 _oM_, HN_ffwodd _e _ proff_ _e a_ached "Money Magers" _cument_ on the 18 _acfionN res_e b_N_ _. _xh_t 1). _ advice _s _cument_ explaini_ 19 • e Nstow _e _efic_ b_i_ syst_ _d how _e _ctional rese_e b_i_ sy_ 20 impa_s the economy. Fu_he_ore, HN_ _H se_ m Mv_ce _s d_ons_ve e_d_ce _ 21 _ _ _ e_a _ e_c_e _e N_ _N_ &_e _ctional rescue b_ system _d _w R N 22 us_ to cre_e mo_ _s. 23 24 s Swiorkio_icz, 534 U.S. N 511; see abe Po_ 1_ ]_ _ Supp. 26 at ____ G_an, 108 F.3d at 249. 25 9 _nlo_ _5 US. N 48; Follow_ the Nm_ _ide _ _ 8 _ _ "allNeadNgs shNI be so 26 cons_ued as _ do subteen N_ceY Id. 27 _0_ 28 _1_ -6 o Case3:04-cv-03724-WHA Document14 Filed10/15/04 Page6 of 19 4 n_ of_e _ _ _d_'s _u_ M _ p_u_ _ _M 8 _s _ 6 d_ms _s_ rese_ _m_h_ _d case _ _o_ 1_, _d _e _e de_ses 7 _d _ _d_'s M_ _ _s_. 9 TO _S_SS _UANT TO 1_ 10 _ _ a _e 12_ _ _ _ _ _s_e _ _ of_ _m_ 16 17 18 19 20 21 24 56_ _h _ _987_ 25 _3_n _ _ &_, 467 U.S. 69, 73, 8_ k. Ed. 2d 59, _04 S. _. 2229 (_984) _h_ 26 27 28 Supp. 2d __6_ __64 _00_. Case3:04-cv-03724-WHA Document14 Filed10/15/04 Page7 of 19 1 _e _m_ not _ _s_ _e w_t of e_dence off_ _ suppo_ _eo£16 2 Due _ _e _mplex@ _the clams involved, evi_nce bei_ held solely _ Defend_t's 3 _% _d _ _nfi_ s b_d_ _r _ablishing a claim cannot _ _lly _ce_ained until _ 4 _scove_, Def_d_t's M_ _ _s_ _ c_s oration _ premature, _ fim_, _d _ 5 _ _i_ _e Court's o_g_ _ allow arn_dment _e Com_ _ o_ _ d_ _e 6 allegations__cessary. Fu_hermo_ the Compl_nt _elf_ legally feasible pending 7 further proceedings _d _ _e a d_m _ _t_ hws _ _e _s _ _n_fi_, 8 _siness _d _mm_ law, _d _ _a_t_ Addi_nal_ Defender _s _d _ _t_h 9 _' d_ms de_y _c_e _ '_o _H_d _ _t_ _d_ _y _ of facts that _dd 10 _ p_d _nsi_ _ _e _s." There_ De_M_t's M_ _ _s_ pursuit _ 11 12_ _ould _ s_ _ _ e_y _d R _ _mp_ _ res_ _ P_' Comp_ 12 13 C. DEFENDANT'S MOTION TO DISMISS FOR FAILURE TO PLEAD FRAUD WITH PARTICULARITY SHOULD BE DISMISSED BECAUSE PLAIN_FFS' 14 PLEAD FRAUD WITH THE INFORMATION AVAILABLE TO THEM AT THE TIME OF _LING THE COMPLAINT. 15 16 _ _ _erme_s _d _ _ _e _cumst_ces con_ting _d _ _e _ 17 __p_icul_t_ _ Thepurpo_Ru_9(b)is_[ro_n_rot_t_e 18 fac__s_thed_ _s _mp_Ru_9(b),_s_audmust_ 19 '_ _ _ give _fend_ts notice _the p_icul_ m_n_ w_ _ _ _ _ _e _e _aud _g_ _ _ _ c_ _ _ain_ the _ge _d not _ deny that they 21 h_e_hingwrong. ''_9 Und_nth_rcuitlaw, Rule9(b)requiresp_icul_d 22 _ 16OfficialComm. _the _dCreditors_ColorTile, _ _ Coopers&Lybra_ kk_, _2 F_d 14L 158 (11_ C_ 2003_ see _so Ryder _ergy Distribu_n Corp. _ _rrill Lyn_ _mmodities 24 m_, 748 F.2d 77_ 779 _d _ 198_. 25 _7_d. R. _v. P_ _b). _ _sMorganro_ & Morganro_ _ _rris, McL_ & Marcu_ _, _1 F._ _ _4 n.2 _d Ci_ 200_; see a_o _ _ _ _ _ _8 F. Supp. 25_ 257 (D. N.J. 1990_ 27 _9B_Ma_e _ _lifornia, 236 F.3d 1014, 1019 (2001_ see _so _ubronner _ Milke_ 6 F.3d 28 666, 672 _h C_ 199_. -8- Case3:04-cv-03724-WHA Document14 Filed10/15/04 Page8 of 19 1 Mlegatio_ of the circumstanc_ _nstit_ing _aud. 2° "The plaintiff mu_ _ her pleadin_ 2 _dtde _e time, place, and nature of _e alleged fraud, and "me_ _nd_o_ all_ations of ff_d 3 me _fficient" m satis_ this req_rement; a #_ntiffmu_ pleM more than neural facts m 4 _enti_ the _saction. _ 5 Add_onall_ p_ant _ Feder_ Rule of_vll Procedure 11 _)(3) _y _v_cing the 6 _mpl_nt, _e a_om_ _ _fying _ the be_t of_s knowl_ _rm_ afl_ a _a_on_ 7 inq_ "_e likely _ h_e evidentiary suppo_ a_ a _asonable opportun_y _r _h_ 8 investigation _ discoveff. '_ Despi_ Ru_ _b)'s s_ngent _quirement_ however, _urts _odd 9 be sensitive _ the _ _ _plication _ t_e _le pfi_ _ discove_ m_ perm_ scp_stic_ 10 de_auders _ success_lly conceM the details of _eir _aud and _erefore where _cts peainent _ 11 a _aud allegation fi_ _mo_t _clusively wi_ the defendant the role _culd be rel_ 12 H_ _ntiffs h_e _ _and wi_ _ mu_ particulafi_ _ _ _ail_ _n_fi_g _e 13 mNoNy of e_d_ pe_NNng _ _e mon_z_on _ _e promisso_ note, Defendant's 14 knowled_ and _ intent, and actuN _fitization of_e Property lies _ Def_dant's hands. 15 AdditionallN _e ComNN_ identifies the particul_ _ans_tion _mplain_ of, _e d_ relN_ 16 m the _an_ction _rming _e basis _ _aud, the nature of the _aud allege& and all _tors 17 _gaging _ _e fraud _mplained _wi_ _ mu_ _eNfiN_ _ N _ailable be_ discovery. 18 Fuahermore, many of _e facts su_oun_ng _e _stan_s of fraud _e_d will be _Nned 19 wi_in De_nd_t's gen_N accounting ledgers and _erefore und_ the case law _sert_ 2O 21 _ UnitedStatesex_L McCa_hy_ StraubClin_ & Hosp.,140 F.Supp.2d 1062(gth_ 20_ _ 22 see_so Decker_ Glen_ Inc.,42 F.3d15M, 154_48(gth_ 199_ _n ban_. _ _; _e _ Moore_ Ka_o_ PackageExpress,Inc.,885 F.2d531,541(_h C_ 198_23 (Alights _ f_ud wh_h _rm _e ba_s _ a _CO _m mu_ _e_ _e _m_ _ace, and mann_ _ 24 each_aud _us _e _ _ eachde_nda_ _ eachschem_). _ Ro_ _ Wood,_8 U_. 54_ 561, 1_ _ _. 1075,1083(2000).25 _ Ro_lla, _8 U_. _ 561;seealsoCorley_ Ro_wood Ca_ Cen_ _ of Peoria,142 F.3d 26 10_, 1_10_ _A7199_ (_ _cd_ _me_s _ Rde _ wh_e _CO _ff _s 27 _F.all3dl_& 1_2(9t_ h_s necesSa_Ct°_2001_d_awoil_m)Ta;n_mComputeUnS_tes _ Sm_kline BeechamClinicalLab_ln,_,818F.2d1_ 1_9 (9th_ 19872);45 D_ _ Flannery,823 F.2d1_1, 1_6 (9thCir. 198_; _ _ Burling_n CoatFactorySe_ Litig.,114 28 F.3d1M_ 1_8_d_ 199_. -9- Case3:04-cv-03724-WHA Document14 Filed10/15/04 Page9 of 19 1 _ _ _ _s _ _y _d_'s M_ _ _s _ _ _e 9 2 _w__m_ 3 D. BEFORE __ A _ _ _ _ C_ _ __D TO G_T LEAVE TO AMEND OR CLA_ UNDER 4 RULE _. We _ h_e _d _ _e _ _ _ _ _d _ _e _s_ _6 7 _is _pma_ is r_d _ _ _ of_ _ 15_ w_ _o_s _ _e _8 9 10 H_ _ou_ _e h_ _ _ Amend Com_ _ h_ be_ no mo_fic_ _ 11 _ _ _m _ w_ _d _ _s _. _d_ _s d_d _m 12 _e dN_ c_ be _e_ed _m _e _mems _ _e ComNNm by _v_dng a s_ _ 13 a_ _s _ rN_d Ws own _Nms of _ _ _N_fi_ _ N_ _d_ _s 17 pmu_t _ FRCP 15_. 18 E. __S _Q_ FOR JUDICIAL NOTICE _ ENDEMICALLY __E AND SNOULD BE DECMNE_ 19 _ A j_d_y _ N_ _ _ me _ s_ _ _n_e _e _ _ R N N_ 21 (1) _ _ _n _e t_N j_ of_ _N _ _ _ _ _ 22 _ _@ __n _ _ _ _ _o_ ac_mcy c_t _on_y be qu_fione& _ 23 _ _ _N n_ _ a N_ w_ _c_ is _ N_ _ _ _s _e we_s 25 _ L_oz _ Sm_ 203 _.3_ ] _22, __27 _h _ 2000). 26 _ _m_ z _, _ _.S. _78, _82, 9 _. _. 2_ 222, 83 $. _ _7 (_ (_ _N_s mandNe 5s _ be heeded_; see a_o _Non z A_m _ _¢, 529 _. _6_ 46_ _20 S. _. _ _584 27 _00_. 28 _ ged. R. _¢ _ -10- Case3:04-cv-03724-WHA Document14 Filed10/15/04 Page10 of 19 1 of rebuttfl evidenc_ cro_s-exam_ation, and _gument from the parti_ and r_ses doubt _ _ 2 w_e_ the parties received a f_r hea_ng. 27 The effe_ of taking judid_ notice under Rule 201 3 _ _ p_dude a party from introdudr g _n_ary eviden_ _ _ effect, directing a verdi_ 4 ag_n_ _m _ _ _e fact noticed_ _d_ noti_ _ not _pmpfime wh_e _ many variabl_ 5 _e _ _ay. _ 6 The Ninth Circuit has repeatedly held _ taking judid_ noti_ of fin_ngs of_ from 7 ano_ case exceeds the limits ofRule 201. _ _fact_mmonknowledgeamong_e 8 Fed_ CouPs _ a cou_ may not take ju&o_ notice of findings of fact from a _ff_ent c_e 9 for _eir true. 3_ "There _ a mi_aken notion _ takingjudid_ notice ofcou_ _s... 10 means taking ju_d_ notice of the exi_en_ of _cts asserted _ eve_ document of a court _ 11 _clu_ng pleadings and affidavi_ The _ncept ofjudid_ notice _quires _ We ma_ w_ch 12 _ _e prop_ subject ofjudid_ notice be a fact _m _ not rea_nably subject _ _epm_ Facts _ 13 _e _d_ _c_d _ _e subject _ _ute, _ch _ allegations _ affidavits, ded_ation_ and 14 probation repo_ _e not the proper subjects o_udid_ noti_ _en though _ey _e _ a _urt 15 16 17 18 _ Von G_ _ Sprint PCS, _2 _ S_ _ 1_ 1_4 (9_ _ _0_; _e also Ge_ral Ele_ _9 Capital Corp. _ Lea_ Reso_n Corp., 128 F.3d 1074, 1083 (_h _ 1997_ 20 _8_. 21 _ Dauba_ _ Marrell Dew Pharmacautica_ _, 509 _. 57_ 592 _11,125 _ Ed. 2d 46_ 1_3 S. _. 2786 (199_ (des_bing tho_ sciontif_ the_ _ which coups ma_ _ko Dd_ n_ce as _ose _ermod_nam_ 23 _ Wya_ _ _un_ 315 _.3d 1108, 1114 (gth _ _ _e also M_Am. Quean _ San D_go 24 MarinaCons_ Corp., 708_.2d1483,1491(gth_1___cou_mwn_ke jud_ n_ _ p_i_s _ _s _ an_h_ cause so as _ suo_ _t _ i_mdu_n _ 25 e_n_, _s _1 _ _ca a _e_ in a _u_ _ _ it"). 26 _ Wya_ _ 5 _.3d _ 1114 n.5; see _so Taylor _ Chaaer Me_ Corp., 162 F.3d 82L 830 (_h _ 199_; _ Star Cla_ Yacht Racin_ Ass_ _ Tommy Hil_gar _ &A., Inq, 146 _3d 6_ 70 _d C_ 199_; 27 _ro_itAlfianco,_ln_.o__loc. Capital Corpv..Do_ia_o Nosolu_Ron_,_ (In _ Delta Res.,Inc.C_P ),"' 128 g.3d 5_074_3d722_,082-8_2_hC(1ir.l_Cir1.997_995&);n.6;un_O__ S_s _ _ 29 F.a6 1549, 1553 (_ 1_ e_ 199_ Ho_way _ _c_ha_, _ 3 _.26 87_ _ (8th _ 28 1_87_ -11- Case3:04-cv-03724-WHA Document14 Filed10/15/04 Page11 of 19 2 Defendant's request for judid_ notice fails all _ements articulated _ the Federal Ru_s 3 of E_dence 201. _rst, We _ requested is subje_ _ a _onab_ _sp_e by Plaintiffs as We 4 accusation is one based solely on Defendant's speculation abo_ wh_ _ mad off We interact. 5 Secon_ although existence of We internet _ a fact We Court may take notice ofbecau_ _ _ 6 '_en_ly known;' We website Defendant _fers _ is not general_ known _ e_denced by 7 Defendants own exhaustive _ch of_e billions ofwebsites available through the internet. 8 Thk_ We _cts Defendant wishes We Court _ take notice of_e not capable of_ady 9 determ_ation by _urces whose accuracy cann_ be reasonab_ questione& As the intem_ is a 10 _rum of communication, the contents of any website is subject _ a _onab_ _spme 11 conceming We accuracy of _s asse_ed. 12 Ano_er poim of error Defendant made was pointing _ the cu_ently pending Complaints 13 filed by _ntiffs. The cases cited by Defendant fail _ me_ the criteria estabhshed _ Civil Local 14 Ru_ _12_)(1) & _) _ _ _ese cases do not involve the same parties, prope_ _ansaction_ 15 event_ or leg_ questio_ _ fact, with We exception ofa _ngle _ance all We parties _ffer _om 16 each o_er, have varying fact pattem_ and varying claims. Furthermore, Defendant's request for 17 notice fails _ ex_ain how _ese cases would be unduly burdensome or pose fignificant risk of 18 • ffefing determ_ations. Requesting Ju_dfl Notice of _ese _cts is _fin e_or on the pa_ of 19 Defendant as well seeks _ _e Fed_fl Rules of Evidence 201,401,402, 403 and 404. 20 Plaintiffs reque_ Defendant's reque_ for Ju_d_ Notic_ bow express and subtex_, be denied. 21 _ BY REFERENCING CASES AND MATTERS OUTSIDE THE PLEADING 22 DEFENDANT HAS CONVERTED THE MOTION TO DISMISS PURSUANT TO 12_ INTO A MOTION FOR SUMMARY JUDGMENT 23 PURSUANT TO RULE 56. 24 Whenever ajudge consid_s ma_ers outside the pleadings _ a 12(b)(6) motio_ _ 25 26 27 32Rivem_ Hamlet,2003U3. Dist.LE_S _387 _00_ citingB. Jeffe_on, C_m_ E_dence 28 Benchbook(3ded. 2003 upd_, § 47.10. Case3:04-cv-03724-WHA Document14 Filed10/15/04 Page12 of 19 1 m_ _ _y _ No a Me 56 S_ _d_e_ m_. _ _¼d_ o_ _e 2 _e_s c_t gen_ly be _ _ dewing a Fe& _ C_. P. 12_ motion _ 3 _ _ _ a m_ _ _ m_ _e _ _e_n_ _ m_ is _ 4 i_oaFe&_v.P. 56mofion_s_j_. _ _s_a__ 5 _d_ _ _v_ _ _ _ is a _ i_ _m_ _._ 8 _l_am_s_j___e56. _s 10 _em_ _ _a_ _e _ _m _ m_ _' d_m_ Com_ De_nd_t's 14 _ _e d_ms _ __ _ _ _ _ _ _ _ _sue _ 16 _ b_ ofs_ a _j_. _ P_ _ _ _ em_ 17 _ _ _ _ _ FRCP 56 _d o_ _e _f _e_d _ _e 18 _ 19 20 CONCLU_ON 21 22 _ _ _ _e _s of_s_ p_a_ _ FRCP 8, 9, 1_ _ 12. _e Co_ _ _ 23 r_ _ d_y _d_'s _ _ _ _fi_ _e w_ _d _h_ _y 24 25 _ _od. R. C_. P. _; _n_ _ _n_, 693 _.2d _073, _075 _ _ _98_.26 _ _ _ _ &_ _, _6_ _. Sup_ 2d _0_4, _076 _00_27 _ _ _. _& _. _ _n_ _ C_., 4_ U_. fi7C 68_58_ _ $. _. _348, _355 28 (_98_. -13- Case3:04-cv-03724-WHA Document14 Filed10/15/04 Page13 of 19 1 _ _ m_e @ _' _ _s _ _e _e m_ti_ _ 1_ _ 2 Fed_l R_ _ E_d_ _ 1A01, _ _3 _d 404. 4 _s_ p_t _ _ 12_ _s _ _d. _ _ _ _ _ to _e 5 _m_ _ R's o_ M_ _d_ _ _ _ Ws _ 12_ Motion _ a 6 _le 56 m_ _ s_m_j_. _ _ _ _ _ is mque_ed _ _e _ 7 _nti_ h_e m_ _ b_d_ _d_ _ 56 _d _ _ _r P_. F_o_ 8 _nti_ r_ue_ _e _ _ _ _ d_s _d _ _ _m_ _ _fi_ _ 9 _ _ d_s _ CouPs _s _ 10 DATED: Oc_b_ 15,2004 11 12 13 _Y _& 14 15 1617 ___ _ 18 CNi_mN _Ne B_ Numb_ 78281 The _bau_ Law N_19 50 _o_ P_kw_ 20 S_ Jos_ CA 95110 21 T_ne: _3_ 2067 T_por_ F_: _10)475-5531 22 Em_: _omas@_Mbau_.com 23 ATTORNEY _ CHARGE FOR PLA_TIFFS _Y FAMILY TRUS_ SCOTT HE_EMAN AND KURT JONSON AS 24 TRUSTEES AND REPRESENTA_VES FOR F_NCES _Y. 25 26 27 28 -14- Case3:04-cv-03724-WHA Document14 Filed10/15/04 Page14 of 19 00T-16-2004FRI 03:46 PM F_XN_ P, 02/06 SBN 7_81 2 _-_ SPIELBA_R LAW F_ 3 _ Ai_oR P_I_ ,San Jos_ CA 95110 4 i_51-84_ F_: _1_47_31 _ ,_omas@_uer.com 6 7 A_omeys tbr _ K_ny _ Tru_ s ,_d tbr _o_ H_ineman _d K_ Jo_s_ as Tr_ _d Repmsanmfives 9 _o _ _ _TED STA_S COURT a_ FOR _ NORT_RN DIST_CT OF C_IFO_IA |2 _3 T_ F_NCES _ FA_Y Nm C 04 3724 _-_ t_ _UST; SCO_ _N AS _US_; K_T JOI_SON, AS _f6 _ K_T JONSONUS_E; _ SCO_ __A$_I_UAL [Assi_ _ _e I-Ion.Willi_ _s_ AS_G_ES ON BE_LF OF 17 _s Pl_fi_. DECL_TION OF _Y BA_S 19 _$. 20 WO_D SA_GS B_( FSB; T_ _ DI_CTORS _D OF_CE_ OF WO_D SA_GS B_K FSB;_22 CASTLE CAPIT_ CO.OPTION, 23 _ Defend_t_ 25 _ L L_ Bm_, _ _reby dec|_e: _s I have pr_iously b_ c_ifi_ _ _ cxpo_ _mess _ _o Unit_ Smt_ Federal Case3:04-cv-03724-WHA Document14 Filed10/15/04 Page15 of 19 00T-;5-2004 F£] 03:47 P_ FaXN& _ 04/05 _ I _e_d _s _m _1 fi_ _ _, _cveL I w_ _ed in 4 _e _ _s fi_ _ W_i_ S_ _ _ _ _e_ _ _¢ fi_. ! c_5 9 _0 _ __ _ co_ _d _ _ _ _ _ c_c_ _ _s __ _ _ _ _ _ _ of_ _ _s_e 16 C_ss _ _ _ m _ F_ _e _s _ _ _ _ 17 _s tender _r _e U_ted States. _ _e doc_ _scusses _w _ed_al Res_e Bo_d memb_ B_ _ow a _0 _cdon_ _s_e b_king syst_. :_ The probative value _e _o _ ou_eighs _y pos_Me _u_c_ effe_ _e _ subj_t ma_er _ver_ _ _e _deo _ _yond co--on ex_rience _d _o_e_ The vid_ doc_ _11 _eafly _si_ _e _er _ _ _e search for _. The s_e_ 2_ mawr of _e Mon_ Maater_ conmMs Mfo_on nm _de_ av_lable or _dcrsto_. It _ de_ls =d _scuss_ _cac_s _ o_ m_ey _d b_g wh_h _e not e_ _s _dersto_ _d not discmsed gener_ _ om educafionM system. Case3:04-cv-03724-WHA Document14 Filed10/15/04 Page16 of 19 OOT-tS-2004FR[ 03=46PN FAXN& P, 03/05 1 CoutX System. I have testified as an expe_ witness on issues dealing with complex z banking litigation aad public policy. The last time flint I was so certified occu_ed in very late 1999 in Federal Bankruptcy Court in Philadelphia. I am an eeonomi_ by profession and have extensive experienc& and expe_se, on 6 economic and banking issue& 7 I am a fon_er break Chief Executive Officer and served in that capadty for over ten years prior to selling our majority interest in the bank_ 9 10 I hold a doctoral degree in economic education which I received _om Florida II Christian University in 1995. 12 I am a former member of the House of Representatives tbr the State of Tennessee 13 14 and served three terms in that capacity. I further served as chairman of the CommiRee o[ is Banking and Commerce while there. 16 17 _s Further, I have served as an out,de eonsu_ant to the Chairman of the _9 subeommiaee on Oversight mad Investigations of the United States House or" z0 'Representatives Banking Commi_ee. _ I am _e Publisher and Editor of Monetary a_t Economic Review. Th_ qua_erly 23 _ubHeation has subscribers in all 50 states and in 12 foreign countries. Further, i have 24 ;aught "Money and Banldng" for the Bank Administration Institute and the state college 25 system in Tennessee. z7 The Documentary enfi_ed the Money Masters accurately represents the hi_ory of our zs banking and monetary system. Thh documentary does an excellent job of laying out the Case3:04-cv-03724-WHA Document14 Filed10/15/04 Page17 of 19 00T-1_-2004F_I 03_4_PN F_ N_ P, 06/0_ l declare under penM_ of perjury that the forego_g _ t_e and co_ect m the best 2 of my knowledge. 3 Da_d: October 15, 2004 4 5 7 Larry Bates 9 10 _l S_te of New Me.co 12 co. o /lo I_ Subscribed an_ sworn _ by Larry Bates before me on _e 15_ day of O_ober _s 2004. 19 2_ Notary public, St_e of New Mexico z' Mycommissionexpi_s_)3_6_)_ _ 26 272_ @ NO_Y_TER_EGRUEN°FRC_LSEALsTA_O NEONM_IC O Case3:04-cv-03724-WHA Document14 Filed10/15/04 Page18 of 19 1 PROOF _ _E L _e _d_, _ _ _ _e _ _e_ _ _d a _em of Sonoma Coum_ 3 C_m_ I _ _ a p_y _ _s _ My _ _ is 1538 _ _ M_ 4 C_m_ 9_01. 5 On O_ob_ 15, 2004, I _d _ _ _:6 7 _O_E _ __T WO_D _N_ _N_S MORON _ D_M_S; _C__ _ _Y BATE_ EXHIBIT 1, THE MONEY MASTERS 8 DVD VIDEO 9 10 __ 1_ M_m_ S_ _ _0 13 _ BY MA_: I _ _e _fl_ _e _ _e _e _ _ _ o_'s p_ _ _ _d p_ __d_ _ m_, _d p_u_ _ 1_ _e p_s _e _vd_e wo_d _ _ _ _ U_ _ _ $_ _ _ 16 _d to _ _e. 18 20 ( _ _ and _e _ho_ _ _ _g _fi_e m_ _s ( ) 21 _ _e_ _ O_ 15, _ _ _a _ C_m_ 23 I _d_ _ p_fl_ _p_ _ _e l_s of_e S_e _C_a _ _e _e _ _e _ co.eeL 2/6 _ 27 28 Case3:04-cv-03724-WHA Document14 Filed10/15/04 Page19 of 19