WaMu, 2nd Amended Complaint, , 2010-09-17 01 (2)

7/29/2019 WaMu, 2nd Amended Complaint, , 2010-09-17 01 (2)

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UNITED STATES DISTRICT COURT

FORTHE

DISTRICTOF VERMONT

ERNEST J. CICCOTELLI )

Plaintiff ))

v. ) Case No. 5:10-cv-00016-cr )

WASHINGTON MUTUAL, INC., )WASHINGTON MUTUAL BANK, )MORTGAGE TRUST GROUP, INC., )DONALD LAPLUME, )J.P. MORGAN CHASE & CO., )JAMES (JAMIE) DIMON, )FEDERAL DEPOSIT INSURANCE )

COMPANY, AND )SHEILA C. BAIR )

Defendants )

SECOND AMENDED COMPLAINT

NOW COMES Plaintiff, ERNEST J. CICCOTELLI, Pro Se, with his SECOND

AMENDED COMPLAINT, and in support of his complaint states the following:

PARTIES, JURISDICTION AND VENUE

1. Plaintiff, Ernest J. Ciccotelli, resides 49 Tigertown Road, in Norwich, Vermont, with his

two sons, in the home that he designed and built in 1990; Plaintiffs residence is the real

property that is the subject of the Mortgage and secures the Note which are the objects of

this complaint.

2. Defendant, Washington Mutual Inc. (WMI), a corporation duly formed in the Sate of

Washington with a principal place of business at 9200 Oakdale Avenue, Chatsworth,

California 91311, doing significant, regular business within the State of Vermont.

3. Defendant, Washington Mutual Bank (singly, WMB, and together with Washington

Mutual, Inc, WaMu), duly formed in the Sate of Washington with a principal place of

business at 9200 Oakdale Avenue, Chatsworth, California 91311, doing significant,

regular business within the State of Vermont.

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4. Defendant, Mortgage Trust Group, Inc. (the Agency), a corporation duly formed in the

Sate of Massachusetts with a principal place of business at108 Grove Street, Worcester,

Massachusetts 01605, and duly licensed to provide loan brokerage services in Vermont,

license number LL5313 and license number MB379 is the agency for the Lender.

5. Defendant, Donald LaPlume, agent and loan broker employed by the Agency Inc. (the

Agent), with a residence at 14 East Street, Claremont, New Hampshire 03743 is the

agent for the Lender.

6. Defendant, J.P. Morgan Chase & Co., in conjunction with its subsidiary, J.P. Morgan

Chase Bank, N.A., (both referred to singularly as JPMC), a corporation duly formed in

the State of Delaware, with a principal place of business at 270 Park Avenue, New York,

New York 10017, doing significant, regular business within the State of Vermont.

7. Defendant James Jamie Dimon, Chairman and Chief Executive Officer of Defendant

JP Morgan Chase & Co., with an office and principal place of business at 270 Park

Avenue, New York, New York 10017.

8. Defendant Federal Deposit Insurance Corporation (FDIC), Receiver for Defendant

Washington Mutual Bank and standing in its place in this matter, with a principle place of

business at 550 17th Street NW, Washington, D.C. 20429.

9. Defendant Sheila C. Bair, Chairman of Defendant FDIC, with an office and principle

place of business at 550 17th Street NW, Room MB-6028, Washington, D.C. 20429.

10. In this action Plaintiff seeks damages for violations of the State of Vermonts laws

regarding, among others, mortgages and notes, contracts, fraud, and larceny, said

violations occurring within the State of Vermont, and therefore jurisdiction and venue are

properly with this court.

FACTS

(In order to comply with the requirement for pleadings to be concise as possible, Facts as

originally presented in the previous complaints have been removed, however, Plaintiff reservesthe right to reintroduce such facts as have been adduced in previous versions of this complaint.)

11. Washington Mutual Bank, a subsidiary of Washington Mutual Inc., is a debt collector

12. that serviced a note (the Note) for a loan to refinance Plaintiffs home and a mortgage

securing the Note (singularly, the Mortgage, and together with the Note, referred to as

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the Loan) from the Plaintiff.

13. The Lender shown on the mortgage is Long Beach Mortgage Company (LBMC), is the

only mortgagee of record; no assignments or successors are shown in the record.

14. JP Morgan Chase & Co. purchased the banking assets of Washington Mutual Bank from

the Federal Deposit Insurance Corporation when WMB failed and was put into

Receivership by the Office of Thrift Supervision, said assets included Plaintiffs

mortgage and note on his property at 49 Tigertown Road, in Norwich, Vermont, on or

about September 25, 2008.

15. An investigation of the Norwich Land Records made on July 17, 2008, shows that there

is no record in the Norwich Land Records showing that either WMB or WMI were

assigned the Loan by Long Beach Mortgage Company, nor does the record show that

either WMB or WMI owned or held the Loan, and that neither WMB nor WMI were the

mortgagee of record.

16. A subsequent investigation of the Norwich Land Records made on August 12, 2010,

shows that there is no record in the Norwich Land Records showing that JP Morgan

Chase & Co., or any subsidiary thereof has been assigned the Loan by Long Beach

Mortgage Company, nor does the record show that JPMC owns or holds the loan, nor

does the record show that JPMC is the mortgagee of record.

17. Said investigation of the Norwich Land Records shows no other assignee or successor to

Long Beach Mortgage Company.

18. An investigation conducted on or around July 18, 2008, of the Corporations Division of

the Office of the Delaware Secretary of State, where Long Beach Mortgage Company is

duly incorporated reveals that Long Beach Mortgage Company has been dissolved.

19. The note and mortgage which secures it are on Plaintiffs home at 49 Tigertown Road, in

Norwich, Vermont (the Property); the Mortgage is recorded in the Norwich Land

Records in Book 174, Pages 514-533.

20. The Loan documents are dated September 19, 2005.

21. The account number for the Loan is 0696363456.

22. The terms of the Note were $165,000, 30 years, at 7.70% starting on November 1, 2005,

with an initial payment of $1,176.38 per month.

23. No escrow was withheld or required to be withheld at the time of the closing of the loan.

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24. The Board of Listers for the Town of Norwich, Vermont assessed at that time, and

continues to assess the property at the present time, for $310,000.

25. In preparation for the loan, Richard Tracy of Sharon, Vermont, the appraiser hired by the

Agent or Agency, appraised Plaintiffs home for $450,000, in July, 2005.

26. Depending on which assessment is used, Plaintiffs debt to value ratio is either 0.53

(mortgage:$165,000/Listers assessment:$310,000 = .53) or .37 (mortgage:

$165,000/Lenders appraisers assessment: $450,000 = .37.

27. The header of the Note states that it is a FIXED/ADJUSTABLE RATE NOTE.

28. Not clearly apparent within the text of the Note is a reference that the first interest rate

adjustment occurs on October 1, 2007, and changes every 6 months thereafter.

29. On October 1, 2007, the rate changed to 9.700%, and the regular payment made by

Plaintiff was raised to $1,402.78 per month, an increase of 19% over the original

payment amount.

30. The index that the Loans rate is based on is the LIBOR for 6 month dollar deposits, on a

date that is 45 days prior to each scheduled rate adjustment date.

31. The calculation of the adjusted rate is 4.990% added to the index, an amount

approximately 2 to 3 percentage points higher than an index based on Treasury Bills (T-

Bills) used for most Adjustable Rate Mortgages (ARMs) and the ARMs that Plaintiff

had personal experience with.

32. If Plaintiff loses the Property through acceleration of the Note and foreclosure on the

Mortgage, 1) he will lose the equity he has built up in the Property over the course of

over 20 years, 2) he will suffer defamation of character through negative reports on his

credit report, and 3) he (and his sons) will suffer severe emotional distress for losing a

possession the property that is irreplaceable and the major emotional touchstone of

his sons lives and his own, for which he paid an unusually heavy price in foregoing a

lucrative career in Boston as a medical devices engineer so that his sons could be raised

in Vermont as their mother had been raised.

(Counts I through IV have been dismissed by order of the Court. Remaining counts retain their

original numbers.)

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COUNT V

FRAUD IN THE INDUCEMENT

33. Plaintiff repleads paragraphs 1 through 32, above, and further states:

34. Agent made misleading and false statements regarding the benefits to Plaintiff of the

Loan on numerous occasions.

35. Agent made false or misleading statements minimizing the difficulty of refinancing the

Loan when its interest rate was adjusted to a level that would guarantee that monthly

payments would become onerous on numerous occasions.

36. Agent made false or misleading statements regarding the manner in which the Loan

would benefit Agents and Plaintiffs business relationship on numerous occasions.

37. Agent withheld material information regarding the index upon which the interest rate of

the Loan is based.

38. Agent withheld material information regarding the securitization and difficulties that

would cause Plaintiff in his performance of the Loan.

39. Agent made said false or misleading statements in order to induce Plaintiff into agreeing

to the Loan, despite the higher interest rate on the Loan than the prior mortgages that

Plaintiff was paying at the time he applied for the Loan.

40. Plaintiff relied on Agents statements: had Agent not made said false or misleading

statements, and had Agent provided said material information, Plaintiff would not have

agreed to undertake performance on the Loan, which,

41. But for being induced to agree to the Loan, Plaintiffs Property would not now be in

jeopardy of foreclosure, and Plaintiff would not be at risk of financial loss therefrom.

42. Defendants WaMu and JPMC vicariously liable for Agents actions because they

controlled Agents actions at the inception and closing of the Loan, or they continue to

enjoy the benefits of the Loan, or both.

43. Defendants fraud has made Plaintiffs credit history worse, resulting in higher expenses

for Plaintiff, has caused Plaintiff serious emotional distress, caused difficulty for his

business and loss of income, and has threatened Plaintiffs continued ownership of his

home and the equity he has in it.

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COUNT VI

FRAUD PURSUANT TO 9 V.S.A. Chapter 63: Consumer Fraud


45. Mortgagee of record is Long Beach Mortgage Company.

46. Mortgagee of record is no longer an active corporation and has been dissolved.

47. Lender began to collect monthly Mortgage payments beginning October 1, 2005.

48. Lender is not mortgagee of record.

49. Lenders collection of payments on the Mortgage and Note is fraud, because there is no

record, notice or other evidence that the Mortgage was assigned or transferred to Lender

from Long Beach Mortgage Company, and Lender has no right to collect said payments.

50. Defendants WaMu and JPMC claims to be the mortgagee are fraudulent because they have

knowingly, deliberately, and maliciously misrepresented themselves to Plaintiff to be the

mortgagee for the Mortgage in order to obtain the monthly mortgage payments due the true

mortgagee, if any.

51. Defendants WaMu and JPMC have committed ongoing fraud against Plaintiff because the

wrongfully claims to be entitled to Plaintiffs mortgage payments.

52. Defendants WaMu and JPMC did not originate the Loan, they have not paid the owners of

the Loan to take title to the Mortgage, and do not make payments from Plaintiffs payments

to the owners of the Mortgage.

53. JPMC is defrauding not only Plaintiff, but also the owners, if they still exist, of the Mortgage.

54. Defendants have failed to identify the owners of the mortgage, and attempted to claim

ownership of the mortgage themselves.

55. Attempts by WaMu, JPMC or FDIC to recreate or relocate so-called lost documents so as to

support their contention that JPMC is the current legal owner of the Note and Mortgage is

fraud.

56. Defendants fraud is caused and continues to cause Plaintiff to incorrectly appear to be in

default on payments of the actual owners of the Loan.

57. Defendants fraud will result in the loss of Plaintiffs home and equity through foreclosure or

other actions if Defendants are not enjoined from action of this or similar nature against

Plaintiff.

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COUNT VII

BREACH OF CONTRACT


59. The Lender deliberately precipitated the default for the Plaintiff when it had the option to

avoid doing so, not as a means to protect its investment in the Loan, but rather merely to

maximize its profit, by shortening the time period during which Plaintiff can repay the Loan

than the Lender had agreed to in the Note and Mortgage.

60. The Lender is forcing Plaintiffs default so as to provide the Lender a pretext for accelerating

the Loan and initiating a foreclosure on the Property.

61. Defendant has failed to perform by deliberately, knowingly, and maliciously

violating material terms of the Agreement, including, among others, the repayment period

of the Mortgage, which is for thirty (30) years.

62. Defendants breach of contract has made Plaintiffs credit history worse, resulting in higher

expenses for Plaintiff, has caused Plaintiff serious emotional distress, caused difficulty for his

business and loss of income, and has threatened Plaintiffs continued ownership of his home

and the equity he has in it.

COUNT VIII

TORTIOUS INTERFERENCE WITH CONTRACTUAL OBLIGATIONS


64. In addition to deliberately, knowingly, and maliciously interfering with Plaintiffs

contractual obligation under the Mortgage and the Note, Defendants have also

deliberately, knowingly, and maliciously interfered with Plaintiffs performance on other

contractual obligations.

65. Defendants have interfered with Plaintiffs other contractual obligations by

increasing the payments required from Plaintiff to Defendants, thereby reducing the

amount of funds Plaintiff has available for payment of the other contractual obligations,

causing Plaintiff to be in arrears on the debts related to the other contractual obligations

and delinquent on those obligations.

66. Defendants interference with Plaintiffs contractual relations has made Plaintiffs credit

history worse, resulting in higher expenses for Plaintiff, has caused Plaintiff serious

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emotional distress, caused difficulty for his business and loss of income, and has threatened

Plaintiffs continued ownership of his home and the equity he has in it.

COUNT IX

CONSUMER PROTECTIONPURSUANT TO 8 V.S.A. 10404


68. Lender has established an escrow account incident to the Note and Mortgage for

the purpose of paying Property Taxes.

69. Lender requires Plaintiff to deposit into said escrow account a greater sum than is

sufficient to pay taxes.

70. The greater sum required by Lender has caused Plaintiff to be unable to make the

monthly Mortgage payments in a timely manner, providing Lender with a pretext to

foreclose on Plaintiffs Property.

71. The greater sum required by Defendants has made Plaintiffs credit history worse, resulting

in higher expenses for Plaintiff, has caused Plaintiff serious emotional distress, caused

difficulty for his business and loss of income, and has threatened Plaintiffs continued

ownership of his home and the equity he has in it.

COUNT XCONSUMER FRAUD

PURSUANT TO 9 V.S.A. 2453 and 2457

72. Plaintiff repleads paragraphs 1 through 71, and further states:

73. Defendants made repeated assertions that Plaintiff would be able to refinance the

Loan when it was scheduled for an interest rate increase.

74. Defendants made repeated assertions that the Loan would benefit Plaintiff and his

business relationship with the Agent.

75. Plaintiff relied on Defendants assertions in his decision to agree to the Loan.

76. Moreover, Defendants have failed to provide services related to the Loan in the

manner and of the nature offered, and have refused to provide services related to the Loan

in accordance with other terms and conditions of the offer.

77. Defendants intended to violate Consumer Fraud laws of Vermont.

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78. Defendants violation of the Consumer Fraud law if Vermont has made Plaintiffs credit

history worse, resulting in higher expenses for Plaintiff, has caused Plaintiff serious

emotional distress, caused difficulty for his business and loss of income, and has threatened

Plaintiffs continued ownership of his home and the equity he has in it.

COUNT XI

UNCONSCIONABLE CONTRACT

PURSUANT TO 9A V.S.A. 2-302

79. Plaintiff restates paragraphs 1 through 78, above, and further states:

80. Through foreclosure precipitated by the Lender under the pretext of protecting its

investments created through the exercise of a redundant right incorporated into the

Mortgage, said right being only to create the pretext for foreclosure in the first place.

81. Defendants were and are in far better positions than Plaintiff to determine the effects of the

economy and market on Plaintiffs ability to make payments, yet they chose to draft Note and

Mortgage documents that disregarded the potential difficulties for Plaintiff that any

reasonable person with experience in drafting such documents would have been familiar

with, thereby denying Plaintiff the ability to continue to perform his obligations under the

Note and Mortgage when changes in circumstances beyond his control occurred.

82. Defendants were aware of the small size of the Loan relative to the high value of the Property

securing the Loan and the ease with which they could dispose of the Property in the event of

their own need to dispose of it.

83. Defendants did not negotiate or bargain with Plaintiff during the application and agreement

process for the Loan, but rather, Defendants dictated to Plaintiff the conditions he had to

adhere to, without negotiation of any sort between the parties.

84. Defendants drafted the Note and Mortgage with no negotiation, bargaining, or input from

Plaintiff.

85. Defendants drafted the Note and Mortgage to maximize their own benefits from the Loan

while eliminating all risk to themselves, while maximizing Plaintiffs risks of loss from the

Loan without providing any proportionate benefit to Plaintiff.

86. Defendants drafted the Note and Mortgage to facilitate the fabrication of the pretext

necessary to produce the circumstances required for foreclosure on the Property.

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87. Defendants drafted the Note and Mortgage in such a manner as to allow them to avoid having

to investigate the actual real estate tax consequences on the Property.

88. Defendants drafted the Note and Mortgage in such a manner to avoid investigating the

manner that the Town of Norwich enforces or chooses not to enforce its property tax

enforcement prerogatives.

89. Defendants deliberately, knowingly, and maliciously are engaging in actions so as to deprive

Plaintiff of the value of his Property.

90. Combined with promises and statements made by Defendants, particularly Agent, inducing

Plaintiff to accept the Note and Mortgage, and combined with Plaintiffs understanding that

if he did not accept the Mortgage and Note, and did not accept the Loan, that he would be

unable to obtain financing on his home for an extended period of time, Plaintiff believed that

he had no alternative but to agree to and accept the Loan.

91. Defendants unconscionable contract has made Plaintiffs credit history worse, resulting in

higher expenses for Plaintiff, has caused Plaintiff serious emotional distress, caused difficulty

for his business and loss of income, and has threatened Plaintiffs continued ownership of his

home and the equity he has in it.

COUNT XII

VIOLATION OF IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING

92. Plaintiff restates paragraphs 1 through 91, above, and further states:

93. Defendants have deliberately, willfully, and maliciously resisted any and all

attempts by Plaintiff to modify the Loan in order that he could perform his obligations,

and accommodate the substantial necessitous circumstances that had occurred in his life

unexpectedly.

94. Defendants have deliberately, willfully, and maliciously formed a corporate

structure designed to resist or eliminate any and all attempts at meaningful

communication between customers, specifically Plaintiff, and the Defendants.

95. In November, 2007, during the time that Plaintiff attempted to initiate

modification of the Loan, WaMus representatives never informed Plaintiff that WaMu

had paid off Plaintiffs property tax bill, and nor that WaMu had changed the balance that

he owed them.

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96. On January 31, 2008, Plaintiff received his IRS form 1098 for 2007 from the Lender,

showing that he had paid $13,563.18 in interest on the loan, and $7,877.66 in taxes.

97. The tax payments were for delinquent taxes that Plaintiff owed the Town of Norwich,

Vermont for the one-half the tax year 2005-2006, and for tax year 2006-2007.

98. Plaintiffs taxes for tax year 2007-2008 had been paid in full at the time that the Lender

had investigated the towns tax rolls, and when it paid the back taxes. Defendants have

ignored the fact that the town did not exercise its tax sale rights, nor threaten to exercise

its tax sale rights, and Defendants refused to inquire into why that may have been,

because the Defendants wanted to propagate a pretext that they were innocently

exercising a right it had written into the contract between Plaintiff as borrower and itself

in order to protect its investment, which pretext would have been negated had Defendants

allowed evidence to be developed that would show that it knew that its investment was

protected by Vermont law and the fact that the Loan was for an amount far lower than a

reasonable market price for the Property would fetch; in other words, Defendants were

engaging in the bad faith refuge of corporate scoundrels - that is, plausible deniability of

a nefarious motive for its actions.

99. Defendants instituted an escrow account, however, the escrow account statement states

that the shortage of escrow is $13,723.34, an amount far in excess of any yearly tax bill

applied to Plaintiffs property - almost three time as high as Plaintiffs tax bill for any

one year.

100 The latest tax bill applied to the Property, for the fiscal year July 1, 2007 through June 30,

2008, issued on July 12, 2007, is $5,066.42, which was paid in full by Plaintiff and the

State of Vermont under the income sensitivity provisions of Vermont tax law, by

February 15, 2008, the due date for the final payment of that fiscal year.

101. Defendants have demanded that Plaintiff pay the amount of $13,723.34 over a

unreasonably short period of time, and has given Plaintiff the option to make payments

over the course of, at first, 12 months starting April 1, 2008, and subsequently, 36 months

(the de minimus change referred to elsewhere in this complaint), or pay the amount in full

on that date.

102. The monthly payments, including the escrow and shortfall, have risen to

$2,991.40, from $1,402.78, which is an increase, itself, from the $1,176.38 that Plaintiff

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was originally paying and that Plaintiff believed that he could pay on a long term

monthly basis, and was the basis on his decision to agree to the Loan in the first place.

103 On June 29, 2008, Plaintiff contacted the WaMu to cancel a previously arranged

electronic withdrawal from Plaintiffs bank account because Plaintiff knew the account

would have insufficient funds to make the payment on June 30, and received a

confirmation number 1565341350, confirming the cancellation of the withdrawal, and

during the same call informed the WaMu that Plaintiff would be making the payment on

June 30, 2008, with the payment being drawn on an alternate account.

104 On June 30, 2008, Plaintiff contacted WaMu by telephone and made the payment

promised the day before from an alternate account, and received confirmation number

1565346532 confirming the payment.

105 On or around July 3, 2008, Plaintiff learned while viewing his account via

internet, that despite the confirmed cancellation, WaMu had attempted to withdraw the

cancelled payment on July 1, 2008, but the payment was not honored because, as Plaintiff

had informed WaMu in advance, there were insufficient funds in the account to make the

withdrawal from; however, the attempted withdrawal caused numerous checks that for

which there had been sufficient funds to cover to also not be honored, causing numerous

returned check fees.

106 On or around July 8, 2008, Plaintiff received a Home Loan Statement June

2008 from WaMu, dated June 30, 2008, which purported to show account activity since

June 27, 2008, and which implied that WaMu had received the June 30 payment made

from the alternate account, and that the total amount due on July 1, 2008 would be

$4,430.09.

107 On or around July 9, 2008, without authority, WaMu withdrew or attempted to

withdraw for a second time from Plaintiffs bank account, the payment cancelled on June

29, described above, said withdrawal causing again another tidal wave of overdrafts and

fees.

108 The WaMu could have restrained itself from exercising its rights to pay Plaintiffs back taxes

or to demand immediate repayment and establishment of an escrow account, but it did not.

109 The WaMu has not acted in good faith, because it deliberately and knowingly did not

examine the Plaintiffs record in total, including Plaintiffs record of tax payments, and has

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deliberately and knowingly blinded itself to the fact that at no time during the course of

Plaintiffs 24 year history as a mortgagor, has his real property ever been threatened with a

tax sale or other similar financial distress, nor, in fact, did the WaMu bother to recognize that

there had been no threats by the town of a tax sale, because the finance department of the

town was aware of Plaintiffs history of always paying his property tax bill, not necessarily

on time, but always in full, and it was also aware of the financial difficulties Plaintiff faced

due to his prolonged recuperation from the complications of the kidney donation described

earlier in this complaint.

110 Had the WaMu examined Plaintiffs record in total, the WaMu would then have come to the

reasonable conclusion, based on Plaintiffs history, that he poses no risk to the WaMus

investment in Plaintiffs real property, and further the WaMu would have concluded that it

had no need to assert its right to pay the back taxes, demand reimbursement for the payments,

and demand escrow payments.

111 Instead the WaMu has deliberately and knowingly chosen to compound and exacerbate any

difficulty Plaintiff could possibly have with payments on the Note and Mortgage, by adding

the taxes and escrow to Plaintiffs monthly payments, essentially doubling or tripling his

monthly payments, with only 6 weeks notice.

112 The payment of the taxes occurred immediately subsequent to the mortgage being arbitrarily

and capriciously adjusted upwards merely because it was the WaMus prerogative to do so,

rather than because there was any necessity related to the actual circumstances of the Loan

for the WaMu to do so.

113 Defendants, as well as Plaintiff, are obligated to observe the covenant of good

faith and fair dealing implied in every contract so as to insure that both will act with

faithfulness to an agreed common purpose that of Defendants making the Loan to

Plaintiff, and of Plaintiff repaying the Loan in reasonably sized installments over the

course of 30 years and consistency with the justified expectations of each of the parties.

(See Century Partners, LP v. Lesser Goldsmith Enterprises, LTD., 2008 VT 40 at

paragraph 21.)

114 Defendants have interfered with or failed to cooperate with Plaintiffs

performance, thus they have acted in bad faith. (See Century Partners, LP v. Lesser

Goldsmith Enterprises, LTD., 2008 VT 40 at paragraph 26.)

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115 Defendants has demonstrated actual malice toward Plaintiff , shown by conduct

manifesting ill will of the Defendants representatives rude and harassing behavior when

communicating with Plaintiff, evidencing oppression by unilaterally taking actions that a

reasonable person would know were unable to be defended against by Plaintiff, and

showing a reckless and wanton disregard of Plaintiffs rights in this matter, even though

Plaintiff alerted Lender to the need to modify the Loan as early as May, 2007. (See

Monahan v. GMAC Mortgage Corp., 2005 VT 110 at paragraph 4.)

116 Defendants have taken advantage of necessitous circumstances of Plaintiff. (See

Monahan v. GMAC Mortgage Corp., 2005 VT 110 at paragraph 44.)

117. Defendants attempted to make two (2) separate unauthorized withdrawals from

Plaintiffs checking account, despite being notified that they were not permitted to make

such withdrawals, and despite Defendants acknowledgement of notice that they were not

permitted to make such withdrawals.

118. The actions taken by Defendants have instead shown their unwillingness to

observe the above-described covenant of good faith and fair dealing.

119. The actions taken by Defendants have undermined the Plaintiffs rights to receive

the benefit of the agreement to take the Loan, while on the other hand, their acts have

enhanced the Defendants own benefits.

120 Defendants have engaged in conduct that has the character of outrage frequently

associated with crime. (See Monahan v. GMAC Mortgage Corp., 2005 VT 110 at

paragraph 63.)

121 Because of Defendants violation of the implied warranty of good faith and fair

dealing, this Honorable Court is requested to find that the contract between Plaintiffs and

any of the Defendants is void and has no force in law, and that Defendants should be

enjoined from enforcing any rights under the contract.

COUNT XIII

VIOLATION OF IMPLIED COVENANT NOT TO INTERFERE

WITH OTHER PARTYS PERFORMANCE

122 Plaintiff repleads paragraphs 1 through 121, above, and further states:

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123. Defendants have interfered with or failed to cooperate with Plaintiff in his

performance of his obligations under the contract.

124. Defendants have a duty to avoid interference with Plaintiffs performance under

the Loan contract.

125. Defendants also have a duty to mitigate damages due to alleged non-performance

of another party, but Defendants have failed to take any action or to permit Plaintiff to

take any action that could reasonably be expected to resolve the problems caused by

Lenders increases in monthly Mortgage payments and other acts described above.

126 Lenders fractured corporate structure prevented and continues to prevent Plaintiff

from taking any actions to mitigate the results of the actions of Defendants, and said

fractured corporate structure was deliberately, knowingly and maliciously designed and

put in to discourage Defendants customers, specifically Plaintiff, from being able to

resolve or mitigate problems with loans made by Lender, particularly the Loan.

127. Therefore, this Honorable Court is requested to issue an order that the contract,

specifically the Mortgage and Note, are unenforceable and have no force in law.

COUNT XIV

UNJUST ENRICHMENT

128 Plaintiff restates paragraphs 1 through 127, above, and further states:

129 Defendants have deliberately, knowingly, and maliciously interfered with

Plaintiffs obligation to perform under the contract comprised of the Note and Mortgage,

and in doing so have eliminated all risks to themselves, and have transferred all risks of

the Note and Mortgage to Plaintiff.

130 Defendants have been unjustly enriched if they proceed with acceleration and

foreclosure on the Property because Lender will have obtained fees and interest payments

in the amount of at least $36,315.00 for less than 32 months of their own performance

before they began to interfere with Plaintiffs performance, without providing Plaintiff

the benefit of a loan with the repayment term of 30 years (360 months) as agreed upon in

the Note and Mortgage.

131. Defendants stand to benefit unjustly from their actions and the damages they have

caused to Plaintiff, all at the expense and to the detriment of Plaintiff.

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132 Defendants failure to compensate Plaintiff and to benefit from their actions is

inequitable and unlawful.

133. Therefore, this Honorable Court is requested to find that although no contract

exists between Plaintiff and Defendant, that Defendants have been unjustly enriched by

Plaintiffs payments to date.

COUNT XV

ONGOING FRAUD

134 Plaintiff repleads statements 1 through 133, above, and further states:

135 During at least two telephone conversations with Defendant WaMu, WaMu told Plaintiff that

WaMu had not initiated the property tax delinquency investigation, and that the Town of

Norwich Finance Office had sent WaMu the tax delinquency information of its own volition,and without any prompting or inquiry from Lender.

136 The Town of Norwich did not send the tax delinquency information of its own volition, and

in fact, WaMu had initiated the inquiry into Plaintiffs tax status and requested Plaintiffs tax

status information from the Town without any input from the Town of Norwich.

137 WaMu initiated the inquiry and requested the information at the same time as Plaintiffs

monthly payments increased about 20% due to an adjustable interest rate increase.

138 WaMu deliberately, knowingly, and maliciously made false statements on at least two

separate occasions in order to mislead Plaintiff regarding the initiation of the tax inquiry so

as to deflect responsibility for the difficulty Plaintiff encountered making his monthly

Mortgage payments onto a third party, and to make it difficult if not impossible for Plaintiff

to resolve the problems caused by the precipitous increase in his monthly Mortgage

payments.

COUNT XVI

DEFAMATION

PURSUANT TO 8 V.S.A. 4724


140 Defendants have engaged in making, publishing, disseminating, or circulating, directly or

indirectly, or encouraging the making, publishing, disseminating, or circulating, oral or

written statement which is false or maliciously critical of or derogatory to the financial

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condition of Plaintiff and is calculated to injure Plaintiff, to wit: Defendants have

deliberately, knowingly, and maliciously caused, or permitted to be caused, damage to

Plaintiffs reputation, and damage to Plaintiffs credit history regarding mortgage payments.

141. Damage to Plaintiffs credit history will result in economic loss due to loss of opportunity

to borrow necessary funds for business and personal purposes.

142 Defendants failure to compensate Plaintiff for the aforesaid damage to his credit history is

inequitable and in violation of Vermont Law, and has caused Plaintiff severe economic loss,

personally and professionally.

COUNT XVII

UNCONSCIONABLE CONTRACT AS THE PRODUCT OF UNFAIR DEALINGS


144 The manner by which Plaintiffs eligibility for the Loan, and eligibility for modification or

refinancing of the Loan by Lender is determined is discriminatory and arbitrary the Loan is

predatory and made in bad faith and unfair.

145. Defendants manner of determining Plaintiffs eligibility for the Loan and for

modification or refinancing of the Loan by Lender is based on arbitrary and capricious

standards that bear little relation to Plaintiffs circumstances, and provide Lender with no

knowledge of Plaintiffs actual eligibility.

146. Defendants deliberate, knowing, and malicious persistence in using said arbitrary and

capricious standards provides Defendants with specious arguments against assisting Plaintiff

in avoiding foreclosure on his Property, and demonstrates Defendants bad faith and unfair

dealing with Plaintiff.

COUNT XVIII

ADHESION CONTRACT

147 Plaintiff restates paragraphs 1 through 146 above, and further states:

148. In the agreement that was drafted by Defendants with no negotiation, bargaining, or other

input from Plaintiff, Defendants suffer no detriment or risk, by including contingencies over

which only they had control, such as paying delinquent taxes, and which enable them to

obtain the entire amount of the Loan with no risk to themselves, since the Loan to value ratio

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was so low as to guarantee that the Defendants would suffer no risk should the Plaintiff

default on the Loan.

149. The Loan was offered to Plaintiff strictly on a take it or leave it basis.

150. Plaintiff was not afforded realistic or reasonable opportunity to bargain for Loan.

151. Under those circumstances, Plaintiff was unable to obtain the loan services he actually

required and continues to require.

152 The Loan as drafted by the Defendants is excessive and onerous, deliberately and maliciously

designed and guaranteed to be defaulted upon, and unconscionable.

COUNT XIX

MORTGAGEE CORPORATE CHARTER EXPIRED, NO MORTGAGEE OF

RECORD, MORTGAGE MAY BE DISCHARGED

PURSUANT TO 27 V.S.A. 469


154. The only mortgagee of record in Long Beach Mortgage Company.

155. The chain of title regarding the mortgage in this matter is irretrievably broken.

156 An investigation conducted on or around July 18, 2008, of the Corporations

Division of the Office of the Delaware Secretary of State, where Long Beach Mortgage

Company was duly incorporated reveals that Long Beach Mortgage Company has been

dissolved.

157. The mortgagee and lender of record was Long Beach Mortgage Company, which

was extinguished in 2006 when it was merged with Washington Mutual Bank.

158. Washington Mutual Bank did not record the assignment or transfer of the

mortgage to itself, thus there is no record of Washington Mutual Bank as the mortgagee

for the loan.

159. Washington Mutual Bank was not the mortgagee because the mortgage and loan

were divided up among numerous investors, none of whom can be identified, and none of

whom have recorded their interest in the mortgage.

160. Washington Mutual Bank failed on September 25, 2008, and ceased to exist.

161. Washington Mutual Banks assets, worth $307 Billion dollars, were transferred

to J.P. Morgan Chase and Company for the purchase price of $1.88 Billion Dollars, or for

an amount of money approximately equal to 6/10ths of one (1) cent on the dollar of the

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value of the assets, by the Federal Deposit Insurance Corporation, which purchase price

was not paid to the investors who owned the mortgage, meaning that the mortgage was

not purchased from its owners, and thus title to the mortgage was not transferred and the

chain of title was broken.

162. The investors who had interest in the mortgage and loan lost all benefits of their

interest in the mortgage and loan when Washington Mutual Bank failed.

163. Pursuant to 27 V.S.A. 469:

When it appears from the record of a mortgage on real estate that such mortgage is

undischarged, and the mortgagee named therein, or the assignee of such mortgage, is a

private corporation whose charter has expired by it own limitation, or has been dissolved

by operation of law, forfeiture, or for any other reason, a complaint may be brought to the

presiding judge of the superior court of the county wherein such mortgage is recorded

and, after such hearing as said presiding judge may direct, if he is satisfied that the

conditions have been complied with, and have no force in law, and is further satisfied that

there is no person within the state having authority to discharge such mortgage, he may

direct an order discharging such mortgage. Such proceedings shall be without taxation of

costs except that the moving party shall bear the costs of such notice as said presiding

judge may order.

164. Therefore, the conditions of the mortgage have been complied with, insofar as is

possible, since the mortgagees no longer exist and their interests were not properly

transferred to legitimate successors, and thus have no force in law.

165 Moreover, Because the Loan is unconscionable and an adhesion contract, and

because Lender has interfered with Plaintiffs performance on the Loan, and for any and

all other reasons stated above, the Loan is unenforceable and void, and therefore, the

conditions of the mortgage have been complied with, and have no force in law.

166. No person within the state of Vermont is able to prove that they legitimately or

properly have the authority to discharge the mortgage.

167 Therefore, this Honorable Court is requested to direct an order discharging

Plaintiffs mortgage.

COUNT XX

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12 U.S.C. 1823 VIOLATES THE FIRST AMENDMENT


169. 12 U.S.C. 1823, and in particular 1823(e), unconstitutionally deprives Plaintiff

of his first amendment rights to free association, because under the statute, the

government may force Plaintiff to associate or enter into a contract with an entity which

Plaintiff has never had a desire, intent, or inclination to associate or enter into a contract

with, said entity in this case being JP Morgan Chase and Co (JPMC).

170 Freedom of Association is a fundamental right protected by the First Amendment.

SeeNAACP v. Alabama, 357 U.S. 449 (1958).

171. Therefore, Plaintiff requests that this Honorable Court find that 12 U.S.C. 1823

is unconstitutional, and that Plaintiffs case may not be dismissed on grounds based on

said statute.

COUNT XXI

12 U.S.C. 1823 VIOLATES THE FIFTH AMENDMENT


173 The statute unconstitutionally deprives Plaintiff of his property rights under Amendment

V, because it permits the government to give the right to foreclose on his property and

deprive him of his property to JPMC, knowing that JPMC will, or is likely to, exercise

foreclosure prerogatives, for the purpose of stabilizing the national economy among other

things, which constitutes a public use of Plaintiffs property for which Plaintiffs property

is taken without just compensation.

174. The Fifth Amendment clearly states, in part: nor shall private property be taken

for public use without just compensation.

175. Therefore, Plaintiff requests that this Honorable Court find that 12 U.S.C. 1823

is unconstitutional, and that Plaintiffs case may not be dismissed on grounds based on

said statute.

COUNT XXII

12 U.S.C. 1823 VIOLATES SEPARATIONOF POWERS

OF THE BRANCHES OF GOVERNMENT


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177 The present suit was originally filed on or about July 29, 2008, and was clearly in the

hands of the judiciary well before the failure of WMB, its seizure by OTS, and sale to

JPMC by FDIC on September 25, 2008.

178 The statute unconstitutionally causes a breach of the Constitutional barriers between the

governmental branches, because it permits the Executive Branch to intrude on the

Constitutional prerogatives of the Judicial Branch: the statute permits the FDIC, a part of

the Executive Branch, to extinguish a plaintiffs rights, specifically those of the Plaintiff,

to be heard in a court of law, to sue, and to access judicial review of his case, after

Plaintiff has filed suit against a bank, without due process (in fact, without notice) and

without review of his claims by a court of proper jurisdiction.

179 Therefore, Plaintiff requests that this Honorable Court find that 12 U.S.C. 1823 is

unconstitutional, and that Plaintiffs case cannot be dismissed on grounds based on said

statute.

COUNT XXIII

12 U.S.C. 1823 VIOLATES DUE PROCESS GUARANTEES

180 Plaintiff repleads paragraphs1through 179, above, and further states:

181 The statute is not carefully tailored to achieve the goals of the government, and it is not

the least restrictive or least harmful means to achieve such goals, since the statute is

based on circumstances and conditions that existed in 1950, when the statute was passed,

and which no longer exist, or which have changed materially, substantially and

dramatically in the 60 years since the statute was passed.

182 The US Supreme Court has held that The purpose behind section 1823(e), enacted in

1950, is to enable the FDIC, in deciding how to proceed with respect to a troubled bank,

to make a quick and certain inventory of the banks assets. It can do this only if it can

disregard secret oral agreements that may impair the value of those assets.Federal

Deposit Ins. Corp. v. ONeil, 809 F.2d 350, 353 (7th Cir. 1987) This exercise of

judgment requires [the] FDIC to measure its loss under the insured deposit payoff

alternative against the loss under a purchase and assumption transaction. To calculate

possible loss under the purchase and assumption transaction as opposed to a payoff of

insured deposits, all of the failed banks assets must be evaluated o determine the price to

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be paid by the assuming bank for acceptable assets. The process of evaluation must be

undertaken quicklyThe special protection given FDIC is Sec. 1823(e) facilitates this

process by allowing FDIC to rely on the books and records of the bank in deciding

whether to undertake a purchase and assumption transaction and in buying assets

unacceptable to the assuming bank. Federal Deposit Insurance Corp. v. Merchants

National Bank of Mobile, 725 F.2d 634m 638 (11th Cir. 1984).

183 Computers and other technology and practices have obsoleted the need for the provisions

of 1823(e), since it is now feasible for a bank and FDIC to evaluate assets and claims

related to any individual account or asset, among other things, as evidenced by the fact

that WaMu and the Delaware District Bankruptcy Court in the bankruptcy proceedings

there, both institutions, which have thousands of claimants and claims to deal with, were

able to locate Plaintiff, and specifically contact and communicate with him, and to

discuss in detail Plaintiffs claims.

184 Therefore FDIC and assuming banks no longer require the convenience of avoiding due

diligence and of avoiding the requirements of justice and equity for borrowers and

claimant, specifically including Plaintiff.

a. The fact the FDIC and JPMC did not separate assets with related claims including

Plaintiffs, and instead simply lumped them all together, and then cited 1823(e) as the

means to defeat the claims, while unjustly enriching JPMC, should at least raise

suspicions that there was improper, fraudulent, or even criminal cooperation, or

collusion, between FDIC and JPMC.

185 In fact, the statute permits a government agency, specifically FDIC, to unilaterally, and

peremptorily contribute the private property of one person, specifically the Plaintiff here,

to another private entity, in this case JPMC, thereby unjustly and inequitably enriching

said entity while depriving Plaintiff of his Constitutional, property, and other rights.

Thus, 12 U.S.C. 1823(e) facilitates the unconstitutional taking of private property,

through the forced transference of money from Plaintiff to JPMC.

186 Therefore, this Honorable Court must find that 12 U.S.C. 1823(e) deprives Plaintiff of

his Constitutional and Civil rights, thus the statute is unconstitutional and invalid.

COUNT XXIV

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UNJUST ENRICHMENT

187 Plaint repleads paragraphs 1 through 186, above, and further states:

188 Defendant JPMC will be unjustly enriched because it has not entered into a contract with

Plaintiff, yet is entitled under 1823 to simply demand Plaintiff pay JPMC.

189 Defendant JPMC has provided no services to Plaintiff.

190. Defendant JPMC has had no contact with Plaintiff.

191. Defendant JPMCs only relationship with Plaintiff is to collect payments from

Plaintiff while providing Plaintiff no service or product of any sort, as the result of

governmental fiat by FDIC.

192. Therefore, Plaintiff requests that this Honorable Court find that Defendant JPMC

has no contract with Plaintiff, that JPMC is not entitled to collect payments from JPMC,

and that no quasi-contract exists between Plaintiff and Defendant JPMC.

COUNT XXV

CONTRACT UNENFORCEABLE


194 The contract between Plaintiff and JPMC is unenforceable because it is not mutually

bargained for agreement, but rather it is a relationship forced upon Plaintiff by a

governmental agency dictate.

195. The relationship between Plaintiff and JPMC is coercive in nature

196 Plaintiff has entered, and is not able to enter into the relationship with JPMC freely and

voluntarily.

197. Plaintiff would not voluntarily enter into a contractual relationship with

Defendant JPMC under any circumstances.

198. Therefore, Plaintiff requests that this Honorable Court find that Plaintiff did not

enter into a contractual relationship with Defendant JPMC, and that Plaintiff has no

obligations to perform for JPMC.

Count XXVI

VIOLATION OF PLAINTIFFS CIVIL RIGHTS

199 Plaintiff restates Paragraphs 1 through 198, above, and further states:

200 42 U.S.C. 1983 provides that Every person who, under color of any statute, ordinance,

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regulation, custom, or usage, of any State or Territory or the District of Columbia,

subjects, or causes to be subjected, any citizen of the United States or other person within

the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured

by the Constitution and laws, shall be liable to the party injured in an action at law, suit in

equity, or other proper proceeding for redress, except that in any action brought against a

judicial officer for an act or omission taken in such officer's judicial capacity, injunctive

relief shall not be granted unless a declaratory decree was violated or declaratory relief

was unavailable. For the purposes of this section, any Act of Congress applicable

exclusively to the District of Columbia shall be considered to be a statute of the District

of Columbia

201 FDIC, a governmental agency, itself and through its agents, including its Chairperson,

Defendant Sheila Bair, has deprived Plaintiff of his civil rights, including, but not limited

to, his rights under the First Amendment to freely associate and enter into contracts, and

his property rights under the Fifth Amendment, and his rights to be heard in a court of

law or equity.

202 Defendants, specifically FDIC, have petitioned the Court to replace Washington Mutual

Bank in this case, and its petition has been granted, and therefore it is a Party in this case.

203 Defendants have used 12 U.S.C. 1823(e) for improper purposes; although the statute

when it was first enacted weighed the need for expediency in supporting the financial

system against the rights of individual claimants, and choosing a sort of lesser of two

evils, depriving claimants of their rights or stability of the financial system for the benefit

of the society at large, because the technology of the time did not permit both sets of

interests to be weighed equally, it is no longer true or necessary that the interests of the

individual claimants conflict with those of the society at large, nor is it true that there still

exists no means to evaluate individual claims without disturbing the smooth repair of the

financial system for the benefit of society at large. Therefore, continued invocation of 12

U.S.C. 1823(e) is no longer necessary to support the financial system for the benefit of

the society at large, and to continue such invocation of the statute would at the very least

give the impression of the improper use of the statute, if not demonstrate such improper

use. An improper use would be, for instance, the transfer of assets from a failed bank,

and fabricating a need for speed in the transference so as to hide the improper

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relationship between FDIC and the assuming bank, FDIC would invoke 1823(e) in order

to rush the transfer, and eliminate any liabilities attached to the assets, as a means to do a

favor to the assuming bank, before anyone had the time to look carefully at the

transaction and halt it.

204 Defendants subjected or caused Plaintiff to be subjected to the deprivation of any rights,

privileges, or immunities secured by the Constitution and laws either directly or through

vicarious liability as the employer of employees engaged in the duties for which they

were authorized to carry out on behalf of their employers, said duties subjecting Plaintiffs

or causing Plaintiffs to be subjected to the deprivation of any rights, privileges, or

immunities secured by the Constitution and laws, and are therefore liable to the Plaintiff

for injuries and for redress thereof, and any damages authorized by law and such other

remedies as deemed just and equitable.

Count XXVII


205 Plaintiff restates Paragraphs1 through 204, above, and further states:

206 FDIC, a governmental agency, itself and through its agents, including its Chairperson,

Defendant Sheila Bair, has denied Plaintiff his right to redress under the Constitution, by

invoking 12 U.S.C. 1823(e) in order to deliberately and willfully extinguish Plaintiffs

right to be heard in a court of law, and to eliminate Plaintiffs claims filed with the Court

before FDIC made the conveyance of Plaintiffs loan to JPMC, thus preventing the Court

from hearing the claims and judging them on their merit.

207 Defendants have denied Plaintiff his right to a trial by jury guaranteed by the Seventh

Amendment by invoking 12 U.S.C. 1823(e) in order to deliberately and willfully

extinguish Plaintiffs right to be heard in a court of law, and to eliminate Plaintiffs

claims filed with the Court before FDIC made the conveyance of Plaintiffs loan to

JPMC, thus preventing a jury from hearing and finding the facts of the case.

208 Defendants subjected or caused Plaintiff to be subjected to the deprivation of rights,




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Count XXVIII


209 Plaintiff restates Paragraphs 1through 208 above, and further states:

210 FDIC, a government agency, itself or through its agents or both, including its Chair,

Defendant Sheila Bair, has denied Plaintiff his First Amendment rights, forcing him to

associate with and enter into a contractual relationship with a private corporation,

specifically, JPMC, with which he had heretofore, and has now, no desire, intention, orwillingness to associate with or enter into a contractual relationship with.

211 Defendants subjected or caused Plaintiff to be subjected to the deprivation of any rights,








Count XXIX




Defendant Sheila Bair, has denied Plaintiff his Fifth Amendment rights protecting him

against taking his property for public use without just compensation.

214 By donating Plaintiffs loan to JPMC in order to stabilize the national economy,

Defendants have taken Plaintiffs property for a public purpose.

215 The property Defendants have taken for a public purpose is, in the first instance, money

that he would not have to pay above and beyond what is necessary for the loan to be

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resolved through this suit, and in the second instance, the actual real property Plaintiff

owns, since, by defeating Plaintiffs claims against the lenders involved in this case by

administrative means, FDIC has given JPMC unfettered license to foreclose on Plaintiffs

home without making any attempt whatsoever to resolve the problems that were

unexpectedly caused by circumstances beyond Plaintiffs control, but which could have

been, and could possibly still be, resolved through negotiations made in good faith,

provided, of course, that Defendants had incentive to negotiate in good faith, something

that they have thus far demonstrated no inclination for.

216 Defendants subjected or caused Plaintiff to be subjected to the deprivation of rights,


vicarious liability as the employer or controller or both of employees engaged in the

duties for which they were authorized to carry out on behalf of their employers, said

duties subjecting Plaintiff or causing Plaintiff to be subjected to the deprivation of rights,

privileges, or immunities secured by the Constitution and laws, and are therefore liable to

the Plaintiff for injuries and for redress thereof, and any damages authorized by law and

such other remedies as deemed just and equitable.

Count XXX

FRAUD



Defendant Sheila Bair, engaged in fraud because by invoking 12 U.S.C. 1823(e), it

permitted JPMC to continue the actions that WaMu had first initiated by knowingly and

deliberately engaging in fraud itself in order to originate loans and also by encouraging

its representatives and brokers to do so as well, as is the case in this suit. Such fraud is

the subject of numerous public reports, including reports issued by the United States

Senate Permanent Subcommittee on Investigations in April of this year.

219 Defendants including JPMC and its Chair, Defendant Jamie Dimon engaged in fraud

because they knew or should have known that Plaintiffs loan was originated under

fraudulent conditions, and then the two entities invoked 1823(e) to hide their knowledge

of the fraud.

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220 Defendants including JPMC and its Chair, Defendant Jamie Dimon, engaged in fraud

because they have claimed that they were unable to examine and evaluate Plaintiffs loan

among other assets conferred upon JPMC by FDIC, thus the need to invoke 12 U.S.C.

1823(e) so as to deny Plaintiff his civil rights, yet they claim that they can identify the

mortgagees of Plaintiffs loan so that they can establish authority to discharge the

mortgage properly under Vermont law.

221. Defendants engaged in fraud both in the inducement, and during the term of the

loans, because they knew or should have known, and did not disclose such knowledge,

that the loans would be securitized and that because of the securitization such loans

would be excessively difficult, if not impossible, as has been the case for Plaintiff, to

modify the loans if circumstances arose during the extensive life of these loans that

necessitated modification in order for the borrower to continue to perform or to perform

substantially under the terms of the contract, which in fact is that case for Plaintiff here.

Count XXXI

ABUSE OF PROCESS BY DEFENDANTS

222 Plaintiff restates Paragraphs 1 through 221, and further states:

223 Defendants FDIC, a government agency, itself or through its agents or both, including its

Chair, Defendant Sheila Bair, and JPMC, and its Chair, Jamie Dimon, have engaged in

abuse of process because they have invoked the process authorized by 12 U.S.C.

1823(e) as a means of hiding their intent and acts that deprived Plaintiff of his civil

rights as set forth herein, which constitutes an improper purpose, rather than the intended

purpose of the statute, which is to assist in retaining the stability of the American

economy, for which the statute is not necessary, and its invocation in this case was

unnecessary since it is clear that contrary to the intention of the statute as it was written

60 years ago, Defendants claim to be able to access data related to a specific loan when it

is convenient for themselves.

224. Such behavior demonstrates that Defendants invoked 12 U.S.C 1823(e) in bad

faith, another indicator of abuse of process by Defendants.

225 Therefore, because Defendants have invoked 12 U.S.C. 1823(e) for an improper

purpose, and therefore they have engaged in abuse of process against the Plaintiff,

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Defendants are liable to the Plaintiff for injuries and damages arising out of said abuse of

process, including any damages authorized by law and such other remedies as deemed

just and equitable.

WHEREFORE, Plaintiff respectfully request that this Honorable Court:

A. Find that 12 U.S.C. 1823(e) is unconstitutional;

B. Grant Plaintiffs relief as requested in each Count; and

C. Grant any and such other relief as the Court deems is just and equitable.

Dated: October _____, 2010 Respectfully submitted,ERNEST J. CICCOTELLI

By: ____________________________________Ernest J. CiccotelliPlaintiff, Pro SeP.O. Box 562Norwich, Vermont 05055802 649-3400

CERTIFICATE OF SERVICE

I, Ernest J. Ciccotelli, hereby certify that on this ____ day of October, 2010, I forwardedthe above PLAINTIFFS SECOND AMENDED COMPALINT, by first class mail, postageprepaid, to:

Robert McCall, Esq. for FDICPeabody and Arnold, LLFederal Reserve Plaza600 Atlantic AvenueBoston, MA 02210-2261

Christopher D. Roy, Esq. for JP Morgan Chase & Co.,Downs Rachlin Martin, PLLC199 Main Street,P.O. Box 190,Burlington, VT 05402-0190

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Donald LaPlume.14 East Street,Claremont, NH 03743

____________________________________

Ernest J. Ciccotelli

Documents

WaMu, 2nd Amended Complaint, , 2010-09-17 01 (2)