Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_03-cv-05502/USCOURTS-caed-1_03-cv-05502-5/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1441 Petition for Removal- Contract Dispute

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1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

JOHN LYDDON,

 Plaintiff,

 v. 

ALFONSO ROCHA-ALBERTSEN, et

al., 

 Defendants.

1:03-CV-05502 OWW TAG

FINDINGS OF FACT AND

CONCLUSIONS OF LAW

This case was tried to the Court sitting without a jury on

April 22, 2006 through May 5, 2006. The parties submitted

proposed Findings of Fact and Conclusions of Law which were

electronically filed on May 19, 2006, whereupon the matter was

submitted for decision. 

Plaintiff John Arthur Lyddon (“Lyddon”) was represented by

Roger K. Vehrs, Esq. Defendants Alfonso Rocha-Albertsen (“RochaAlbertsen”) and Hilario Cuellar-Abundiz (“Cuellar-Abundiz”) were

represented by Diana R. Griffiths, Esq. Testimony was taken and

evidence was presented in open court, followed by the oral

arguments of the parties. The following findings of fact and

conclusions of law are entered pursuant to Fed. R. Civ. P. 52(a). 

To the extent that any findings of fact and conclusions of law

could be interpreted as the converse it shall be treated as such. 

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BACKGROUND

In 1997 while working for Baker & McKenzie, Rocha-Albertsen

was assigned to represent Lyddon in a lawsuit filed against him

in Mexico. In 1998 Rocha-Albertsen stopped working for Baker and

McKenzie and formed his own practice. Pursuant to a contingency

arrangement, Lyddon hired Rocha-Albertsen as his personal

attorney in Mexico. Lyddon paid Rocha-Albertsen a monthly fee of

$2,500 in exchange for Rocha-Albertsen’s legal services involving

any legal matters, including legal matters pertaining to the sale

of a house in Cabo San Lucas. 

Lyddon alleges that Rocha-Albertsen was indebted to 

Cuellar-Abundiz, an attorney in Mexico, for legal services. As a

result, Lyddon claims that Rocha-Albertsen and Cuellar-Abundiz

conspired and agreed to forge Lyddon’s name on a promissory note

claiming that Lyddon owed the sum of $500,000.00 for legal

services and business advice. Lyddon argues that he was

“tricked” into signing this note, which was written in Spanish, a

language he can not read. Lyddon also alleges that RochaAlbertsen assigned the note to Cuellar-Abundiz, who is currently

seeking to appeal an order rendered against him in Mexico and to

collect on the forged, false and fraudulent promissory note. 

Lyddon claims that Rocha-Albertsen also sold a property right for

$40,000 along with the sale of the Cabo San Lucas property. 

Rocha-Albertsen was not authorized to sell this property right

nor did he consult with Lyddon before selling it. 

Lyddon is a citizen in the State of California. RochaAlbertsen and Cuellar-Abundiz are attorneys engaged in practicing

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law in Mexico. Lyddon brings claims for breach of contract,

fraud, conspiracy, a violation of California Welfare Code

§15610(f), a violation of California Business Professions Code

17200, and for declaratory relief. 

PRELIMINARY MATTERS

I. LEGAL STANDARD

In trials without juries, Fed. R. Civ. P. 52(a) requires a

court to find the facts specially and sate separately its

conclusions of law thereon. See Barnett v. Sea Land Service, 875

F.2d 741, 744 (9th Cir. 1989). Even upon review, due regard is

given to the district court’s judgment as to the credibility of

the witnesses, Fed. R. Civ. P. 52(a) and Courts of Appeal will

give deference to a district court’s choice between two

permissible views of evidence provided it is not clearly

erroneous. Moody v. Proctor, 986 F.2d 239, 241 (8th Cir. 1993). 

II. EVIDENCE

The following exhibits were admitted into evidence during

trial: 

EXHIBIT NO. DESCRIPTION

1 Cuellar-Abundiz Initial Retainer

2 Email from Rocha & Assoc. RE: Lyddon’s Bills 

3 Email from Rocha & Assoc. RE: Bills

4 Rocha & Associates promotional website pages

5 Baker & McKenzie law firm retainer RE: Rocha

6 Email from Rocha & Associates to Vicky RE: Advance

7 Email from Rocha-Albertsen to Vicky RE: moneys

owed Lyddon

8 Retainer with hourly charges signed by RochaAlbertsen and Lyddon

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9 Two faxes from Rocha-Albertsen to Lyddon RE:

Retainers and Jaime Berger

10 Fiduciary agreement for Rocha-Albertsen and Norma

Perez 

11 Promissory note for $500,000.00

12 Calendar for Rocha-Albertsen’s office

13 Various calendar documents from Cuellar-Abundiz

14 Engagement letter from Cuellar-Abundiz to Lyddon 

15 Cuellar-Abundiz billing with hourly breakdown

16 Payment by Lyddon of Cuellar-Abundiz bill

17 Agreement for the purchase and sale of the

property in Cabo San Lucas

18 Deposition of Cuellar-Abundiz

19 Deposition of Rocha-Albertsen

20 Deposition of Robert Brewer

21 WITHDRAWN AT TRIAL ON May 3, 2006

22 BLANK

23 BLANK

24 BLANK

25 BLANK

26 Summary of checks with Bates stamps from Lyddon to

Rocha-Albertsen admitted into evidence on May 3,

2006.

27 Two page handwritten document representing files

Rocha-Albertsen worked on for Lyddon admitted into

evidence on May 4, 2006. 

28 Color paper admitted into evidence on May 4, 2006.

29 Letter from Cuellar-Abundiz to Rocha-Albertsen

requesting payment of fees admitted into evidence

on May 5, 2006. 

30 Billing statement from Cuellar-Abundiz to RochaAlbertsen offered in trial on May 2, 2006. 

//

//

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5

FINDINGS OF FACT

To the extent that any Findings of Fact can be interpreted

as a Conclusion of Law, it may be so construed. 

I. THE PARTIES

A. JOHN ARTHUR LYDDON 

1. Plaintiff John Arthur Lyddon is an American citizen. 

He is 74 years old. 

2. He graduated from Arizona State University at Tempe

with a degree in Business. 

3. Lyddon was also in the U.S. Air Force for two years. 

4. Lyddon entered the gas station business and eventually

became involved with the transportation, brokering, and refining

of fuels, as well as drilling for oil. 

5. Lyddon resides in Bakersfield, CA. He also conducts

business in Bakersfield, CA and has been doing so since 1973. He

maintains a business office in Bakersfield, CA, which opened in

1975.

6. Vicky Campbell is Lyddon's administrator at his office

in Bakersfield, CA. She was responsible for making payments to

Lyddon's attorneys. Attorneys fees payments were always approved

by Lyddon or Clyde Frederickson ("Frederickson"), Lyddon's

business manager, before payment. 

7. All attorneys fees paid to Mr. Rocha-Albertsen were

paid out of Lyddon’s office in Bakersfield, CA. 

8. Lyddon has residences in Las Vegas, NV, Corona Del Mar,

CA, and Baja California, MX. 

9. Lyddon first visited Cabo San Lucas (“Cabo”) when he

was in his 20s, sometime in the early 1960s. It was still a very

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small town that contained a tuna cannery. 

10. In the late 1970's Lyddon acquired a small residence in

Cabo for $40,000. Lyddon added a second story to the property. 

During the same time period Lyddon acquired a vacant piece of

real property in Cabo for $30,000. 

11. After acquiring these first two properties, Lyddon in

1984 acquired a larger real property that was bordered on two

sides by the real property he already owned. Lyddon paid

$400,000 for that property. The larger property had beach front.

B. ALFONSO ROCHA-ALBERTSEN 

12. Alfonso Rocha-Albertsen is a licensed attorney in

Tijuana, MX. He graduated from the University in Mexico City in

1981. He took and passed his bar exam in 1984 and has been a

licensed attorney since then. He is licensed on a federal level

and is able to practice law throughout Mexico.

13. In 1994 Rocha-Albertsen joined the United States law

firm Baker & McKenzie and began working for the firm in the City

of Tijuana. He was with Baker & McKenzie for four years. 

14. In 1997 while working for Baker & McKenzie, RochaAlbertsen was assigned to represent Lyddon in a lawsuit filed

against Lyddon by another attorney in Mexico for unpaid attorneys

fees. Rocha-Albertsen was responsible for investigating the

dispute over a $114,000 check Lyddon gave to one of his former

attorneys, Jaime Berger ("Berger").

15. Rocha-Albertsen represented Lyddon in the lawsuit filed

by Berger in Mexico. 

16. Rocha-Albertsen also traveled to the United States to

assist attorney Robert Brewer (“Mr. Brewer”) with related

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litigation filed in the United States regarding the Berger

attorneys fees dispute. 

17. In 1998 Rocha-Albertsen stopped working for Baker and

McKenzie. That same year he formed his own practice, Rocha &

Associates, where he is the managing partner. 

18. Rocha-Albertsen created a webpage for Rocha &

Associates in 2000. The website advertises his legal services in

English and is accessible to and seeks potential clients in

California. 

19. Rocha-Albertsen also maintained a telephone number in

Chula Vista, CA. He would sometimes answer this telephone number

himself. 

20. When Rocha-Albertsen entered his own law practice,

Lyddon followed him rather than stay with Baker and McKenzie. 

21. Rocha-Albertsen stopped working for Lyddon around

November or December 2002. 

22. At the time Rocha-Albertsen was working for Lyddon, his

normal hourly rate for his services was $100 an hour. 

23. Rocha-Albertsen is not a member of the California Bar

Association. 

24. When Rocha-Albertsen spoke to Lyddon, the conversations

were in English. 

25. Rocha-Albertsen became a social friend and visited and

traveled together with Lyddon on several occasions in Mexico and

the United States. 

C. HILARIO CUELLAR-ABUNDIZ

26. Hilario Cuellar-Abundiz (“Cuellar-Abundiz”) is an

attorney in Tijuana, MX. He has been an attorney for over 30

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years and 60% of his cases deal with collections. 

27. Rocha-Albertsen referred Cuellar-Abundiz's attorney

services to Lyddon. 

28. The arrangement for payment of attorneys fees between

Cuellar-Abundiz and Lyddon was an hourly arrangement. 

29. Lyddon paid Cuellar-Abundiz $12,500 for the services

he provided. 

30. Cuellar-Abundiz stopped working on any legal matters

for Lyddon in 1998. 

31. After the 1998 date Cuellar-Abundiz did not travel to

the United States to do any business for Lyddon. 

32. When Cuellar-Abundiz worked for Lyddon in 1997 and

1998 he was never in the United States to work on Lyddon matters. 

Every contact that Cuellar-Abundiz had with Lyddon was in

Tijuana, MX. 

33. Cuellar-Abundiz maintained a post office box in Chula

Vista, CA. He opened it to take advantage of the increased

reliability of the mail service. 

34. Cuellar-Abundiz has another post office box in San

Ysidro, CA that he has had for eight to ten years. 

35. It is common practice that all of Cuellar-Abundiz's

clients be sent a billing statement on a monthly basis for any

unpaid fees owed to him. 

II. LYDDON’S BUSINESS ADVISOR: CLYDE FREDERICKSON

36. Clyde Frederickson III (“Frederickson”) lives in

American Fort, Utah. He is married and has a family. 

38. He is employed by the firm Ratlin, Cohen, & Hults,

accountants and advisors in Miami, FL. 

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39. He has been directly employed with the firm since 2006

and as a contractor for them since 1984. 

40. Frederickson met Lyddon in 1984. He is Lyddon’s

current Business Manager. He is also a licensed pilot and on

occasion flies with him in his airplane to different places. 

41. Frederickson also holds a medical power of attorney

from Lyddon, as successor to Lyddon’s only daughter. 

42. In performance of Frederickson’s duties as Lyddon’s

Business Manager, Lyddon’s normal practice was to advise

Frederickson about any financial transactions that he was going

to engage in before they happened. 

43. It was also common practice for Frederickson to review

all payments for Lyddon’s matters in Mexico before the payments

were made. 

44. Frederickson does not believe there was ever any

compensation discussion between Lyddon and Rocha-Albertsen to

which Frederickson was not a participant. 

45. In the years that Frederickson has known Lyddon, Lyddon

has used about 19 attorneys total. 

46. Frederickson met with Rocha-Albertsen in the United

States on numerous occasions. 

III. LYDDON’S FORMER ATTORNEY: ROBERT BREWER

47. Mr. Brewer has been an attorney for 31 years. He has

been in private practice in San Diego since 1982. 

48. Lyddon hired Mr. Brewer to represent him in the Berger

lawsuit filed in the United States.

49. Mr. Brewer represented Lyddon in the American

litigation against Jaime Berger.

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50. Mr. Brewer met Rocha-Albertsen in relation to that

case. Mr. Brewer was not involved in the Mexico litigation

against Berger. 

51. Rocha-Albertsen used Mr. Brewer’s office in San Diego

on a number of occasions. 

52. After the Jaime Berger matter was concluded Mr. Brewer

referred a number of clients who needed an attorney in Tijuana,

MX to Rocha-Albertsen. 

53. Mr. Brewer did nothing more than allow Rocha-Albertsen

to use one of Mr. Brewer’s four or five conference rooms to meet

with people. 

54. Mr. Brewer never participated in Rocha-Albertsen’s

meetings with clients in San Diego. 

IV. THE LYDDON ROCHA-ALBERTSEN RETAINER AGREEMENT

55. When Rocha-Albertsen opened his own practice, Lyddon

entered into a retainer agreement with Rocha-Albertsen where

Lyddon would be his first client and would pay Rocha-Albertsen

$2,500 a month. This agreement was an oral agreement. 

56. There are no written records of any agreement

specifying the terms and conditions of the attorney-client

relationship between Lyddon and Rocha-Albertsen. 

57. The agreement was from 1998-2002. Rocha-Albertsen was

paid through December 2002. 

58. The $2,500 per month retainer agreement was to be the

full payment for all of Rocha-Albertsen’s legal services for

Lyddon. 

59. At Rocha-Albertsen’s request, the monthly payment was

increased by $300 more a month to compensate another attorney,

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Norma Perez, who helped Rocha-Albertsen with Lyddon matters. 

60. As part of their compensation agreement, Lyddon agreed

to pay Rocha-Albertsen for other lawyers who assisted him, at

those lawyers’ prevailing hourly rates.

61. Rocha-Albertsen did not sit down with Lyddon to discuss

compensation or send Lyddon a bill each month. 

62. Rocha-Albertsen did not keep a detailed record of the

time that he worked on legal matters or incurred in performance

of legal services for Lyddon. 

63. To the extent that Rocha-Albertsen did keep hourly

records, the hours were written down on a yellow sheet of paper. 

The hours were not logged into a computer. 

64. When Rocha-Albertsen completed his services on Lyddon

legal matters he did not send a final bill claiming an amount due

to Rocha-Albertsen for legal services. 

65. Rocha-Albertsen notified Lyddon by telephone regarding

final payment for his services. 

66. Rocha-Albertsen then filed a lawsuit seeking $25,000

for unpaid attorneys fees. 

67. Rocha-Albertsen never called Vicky Campbell, Lyddon’s

bookkeeper, to request a final payment for his services. 

68. During the period of time that Lyddon was paying him

$2,500.00 a month, Rocha-Albertsen never told Lyddon, that he was

billing Lyddon by the hour. 

69. Rocha-Albertsen would refer other attorneys to Lyddon

and would ask Lyddon’s permission to hire other attorneys to work

on Lyddon’s legal matters. 

70. Lyddon paid Rocha-Albertsen $2,500.00 a month and later

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$2,800 a month for approximately 46 or 47 months, amounts in

excess of $20,000.

71. Rocha-Albertsen and Lyddon never discussed an hourly

rate of payment for legal services. 

V. THE LYDDON ATTORNEY CLIENT RELATIONSHIP WITH ROCHA-ALBERTSEN

72. During the four year attorney-client relationship

between Lyddon and Rocha-Albertsen, their professional

relationship also evolved into that of friendship.

73. Rocha-Albertsen had constant contact with Lyddon

regarding his work on Lyddon’s legal matters. 

74. Rocha-Albertsen and Lyddon often traveled together in

Lyddon’s private plane to deal with Lyddon’s legal affairs in

Mexico. They stayed at the same hotel and ate breakfast and

dinner together. They had drinks together. They also frequented

a salsa bar in Mexico City. 

75. Rocha-Albertsen saw Lyddon on a weekly and sometimes on

a daily basis. 

76. Rocha-Albertsen’s work for Lyddon required him to

travel frequently. This travel included trips to Cabo San Lucas

to deal with Lyddon’s property disputes. Rocha-Albertsen also

traveled to California on several occasions to conduct business

with Lyddon. 

77. Rocha-Albertsen did not bill Lyddon for his travel

expenses. Rocha-Albertsen and Lyddon had an arrangement where

Lyddon purchased the plane tickets or advanced money for the

hotel room or, alternately, Rocha-Albertsen paid for everything,

kept the receipts, and was reimbursed by Lyddon for such

expenses. 

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78. On many occasions, Lyddon would not travel with RochaAlbertsen, who traveled to places in Mexico where official

actions on Lyddon’s legal matters occurred. Sometimes

Frederickson or Norma Perez traveled with Rocha-Albertsen. Other

times Rocha-Albertsen traveled alone. 

79. In all the times that Frederickson traveled with RochaAlbertsen, he never saw Rocha-Albertsen create or keep any time

records. Rocha-Albertsen never told Frederickson that he was

keeping time records or that he was contemplating charging Lyddon

for legal services by the hour. 

80. Since Lyddon was not always present when official

actions took place involving his legal matters, Rocha-Albertsen

or Norma Perez sometimes had Lyddon sign blank sheets of paper on

stationary in case a document had to be drafted, when the

document was not prepared in advance. 

81. The stationary Lyddon signed in blank was a cream

colored 8.5 x 11 piece of paper. 

VI. LYDDON’S CABO SAN LUCAS PROPERTY

82. Lyddon acquired an acre of land in Cabo San Lucas. He

eventually developed it and built a home on this land. 

83. The property was adjacent to a swim-up bar. Lyddon

also purchased a portion of the swim-up bar. 

84. Lyddon eventually decided to sell the Cabo San Lucas

property. Frederickson initially estimated the sale price of the

property at $5 million. However, the ultimate sale price of the

property was for $2.8 million. 

85. Lyddon entered into negotiations with Canadian buyers

to sell Lyddon’s Cabo San Lucas property. Lyddon had known the

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Canadian buyers for a long time because they were owners of a

time share property contiguous to his property. 

86. The Canadians engaged in these negotiations with Lyddon

from Canada and from California. 

87. On September 23, 2002 Lyddon was in contact with the

Canadian buyers in Orange County, CA. 

88. At the time that Lyddon sold the property, RochaAlbertsen knew that Lyddon had initially wanted to sell it for $5

million. The $5 million figure for the property was also printed

on the promotional flyer advertising the sale of the property. 

89. Rocha-Albertsen assisted Lyddon in the negotiations and

sale of the Cabo San Lucas property. 

90. Rocha-Albertsen reviewed the papers for the real

property sale and dealt with the taxes payable in Mexico as a

result of the sale. 

91. Rocha-Albertsen was separately paid $40,000 by other

parties for selling the right to a property interest in a small

piece of land between Lyddon’s property and the swim-up bar. 

This was a flat fee and not based on an hourly rate. 

92. Lyddon did not learn about the sale of this additional

property interest until he heard from the Canadians that they had

purchased the property right. 

93. Rocha-Albertsen did not disclose to or notify Lyddon

that he sold this property right. Lyddon did not authorize

Rocha-Albertsen to sell this property right. 

94. Lyddon had intended to reserve the rights to the piece

of property Cuellar-Abundiz sold so as to assert a lawsuit

against a neighbor, Ana Bertha Sandoval (“Ana Bertha”). Lyddon

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had continuing legal disputes with Ana Bertha. 

95. After the sale of the property right the Canadians then

settled the dispute with Ana Bertha. 

VII. ATTORNEYS FEE LAW FOR THE STATE OF BAJA CALIFORNIA, MX

96. According to the Law for the Schedule of Fees for the

State of Baja, California, 10% of the sale of a property may be

paid to the attorney who assists with that sale.

97. The 10% commission is based on the transaction not the

amount of hours spent on the sale. In this case, according to

Mexican law, 10% of the purchase price of the Cabo San Lucas

property is $280,000.

98. Rocha-Albertsen never called Lyddon on the telephone to

tell Lyddon or otherwise communicated to Lyddon that RochaAlbertsen was entitled to or that Rocha-Albertsen claimed as

attorneys fees an amount equal to 10% of the sale price of

Lyddon’s property. 

99. Rocha-Albertsen never spoke to or communicated to

Frederickson that Rocha-Albertsen was claiming entitlement to 10%

of the sale price.

100. Lyddon never heard Rocha-Albertsen tell anyone that he

was entitled to 10% of the proceeds from the property sale. 

101. Rocha-Albertsen never asked Lyddon for money out of the

sale and did not make a demand in escrow for 10% of the sale

price at the time of the sale of the Lyddon Cabo property. 

102. The court finds Rocha-Albertsen did not make such a

claim in the escrow or submit a bill to Lyddon, because there was

no such agreement. Lyddon never agreed to pay to Rocha-Albertsen

10% of the sale price or any other amount for attorneys fees for

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the sale.

103. Rocha-Albertsen knew that Mexican law prohibited an

18% fee compensation for the sale of real property and knew that

such an agreement for compensation was unlawful.

VIII. ROCHA ALBERTSEN’S LEGAL SERVICES

A. LYDDON’S PUNTA CHIVATO PROPERTY 

104. Lyddon also had a residence in Punta Chivato, MX. 

With respect to the Punta Chivato property, Rocha-Albertsen was

responsible for the following legal work: 

1. reviewing any documentation that had to

do with the trusts for the property, 

2. reviewing any documentation regarding

the title search of the property at the

public registry office 

3. reviewing the subsequent modification to

the special law that allowed for the

selling of the property to Lyddon

105. Rocha-Albertsen did legal research to ensure that

Lyddon did not lose the Punta Chivato property as a result of a

subsequent change in the law relating to the property. Lyddon

was previously renting the Punta Chivato property because Lyddon

could not own it. The Mexican law changed to allow the sale of

the property to Lyddon.

106. Rocha-Albertsen was successful in transferring the

Punta chivato property into Lyddon’s name, so that Lyddon’s name

appears as owner in the public registry. 

107. This testimony conflicts with the following Lyddon

testimony that: 

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a. Rocha-Albertsen’s only role in the Punta Chivato

property matter was to read the files to

Frederickson so that Frederickson wold know that

he had not missed anything and that he understood

it. 

b. Rocha-Albertsen worked an estimated two to three

months on matters relating to the Punta Chivato

property. 

B. THE ANA BERTHA MATTER

108. Ana Bertha owned real property next to John Lyddon in

Cabo San Lucas. 

109. A small portion of Ana Bertha’s real property

intersected Lyddon’s land. 

110. Ana Bertha had erected a swimming pool on her real

property. Ana Bertha’s swimming pool included a swim up bar. 

111. Part of the swim-up bar used an area of Lyddon’s

property. 

112. Ultimately litigation ensued between Lyddon and Ana

Bertha over their respective adjoining properties. No evidence

established when the lawsuit commenced. 

113. Rocha-Albertsen took over as Lyddon’s attorney in the

Mexico litigation between Ana Bertha and Lyddon. 

114. Rocha-Albertsen worked on this matter from the time

that he was hired by Lyddon. 

115. There were a number of civil and criminal complaints

filed on both sides. Rocha-Albertsen also worked on the matter in

which Ana Bertha sought a declaration that Lyddon was a “persona

non grata.” 

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116. Rocha-Albertsen and another attorney, Luis De La

Torre, prevented this from happening. The matter involved three

trips by Rocha-Albertsen to meet with government officials in

Mexico City.

117. In relation to this ongoing litigation, RochaAlbertsen went to federal court on Lyddon’s behalf because Ana

Bertha filed a criminal complaint against Lyddon. She also got a

protective order against Lyddon from the 7th Federal District

Court in Tijuana, Mexico. 

118. Rocha-Albertsen worked on the 7th District Court

matter for about six months. 

C. THE FEDERAL ZONE

119. Lyddon engaged in litigation in Mexico involving a

stretch of beach adjacent to his property that was part of a

federal zone owned by the Mexican government. 

120. The federal zone matter is part of the dispossession

lawsuit filed by Ana Bertha against Lyddon. The dispossession

lawsuit was in a separate venue from the federal zone matter. 

The dispossession lawsuit took place in a court and the federal

zone matter was pursued in a federal Mexican administrative

agency that had jurisdiction over the beaches.

121. Ana Bertha, a Mexican citizen and Lyddon, an American

citizen were in a dispute over who had the right to possess that

stretch of beach. 

122. The federal zone allowed Lyddon access to the last

free beach in Cabo San Lucas. The permit gave Lyddon personal

use of the beach and Lyddon held the permit as a beneficiary of

the trust to which the permit was issued. 

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123. The permit was not for commercial use. 

124. Rocha-Albertsen worked on obtaining the permits for

Lyddon.

125. Rocha-Albertsen made about eight to ten trips to

Mexico City in relation to the federal zone issue alone, to meet

with government agencies concerning this issue. He also made

about 15 trips to La Paz concerning the federal zone to meet with

government agencies there as well. 

126. Rocha-Albertsen also worked briefly on an a matter

concerning a dispute over the federal zone with the owner of the

Hotel Hacienda adjacent to Lyddon’s property. Rocha worked on

this matter during the first ten days at the beginning of his

attorney client relationship with Lyddon. His work only involved

providing legal opinions and advice. 

127. Mr. Digino, initially held the right to the federal

zone property. He had leased the business that became known as

Sunrise Charlie’s that occupied all of the area, including the

portion of the federal zone.

128. Lyddon obtained from the federal government that

portion of the federal zone that had been taken over by Sunrise

Charlie’s. Then Lyddon lost the property again. Lyddon acquired

Mr. Digino’s rights against Ana Bertha Sandoval for leasing

property and sought to establish that she did not hold title to

possessory rights for that portion of the federal zone that had

been returned. 

129. Rocha-Albertsen worked with the attorneys for Mr.

Digino. Mr. Frederickson and Lyddon did not learn that the

matter was resolved until the Summer of 2003 when the Canadians

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came to them at some time later and told Lyddon that they had

paid Rocha-Albertsen $40,000 to obtaining rights to the federal

zone property.

130. By the time Lyddon learned of the $40,000 payment, he

was involved in a lawsuit and did not pursue the matter because

Cuellar-Abundiz was trying to collect on the Note and RochaAlbertsen would not return Lyddon’s calls. 

131. Lyddon has not made a claim for the $40,000 payment in

this lawsuit. 

132. Rocha-Albertsen did not disclose his dealings with and

payment from the Canadians to Lyddon. The evidence did not

establish whether this was a breach of fiduciary duty and

conversion as it is not possible to determine if Rocha-Albertson

still acted as an attorney for Lyddon or if Lyddon owned the

“rights” that were sold to the Canadians.

133. Rocha-Albertsen claims to have worked on the issue

related to Lyddon’s disputes with Ana Bertha almost every day,

two hours daily for four years, sometimes 24 hours a day. 

134. Rocha-Albertsen provided no time records or other

reliable record of the time he spent performing legal services

for Lyddon.

D. CRIMINAL CHARGES INVOLVING THE ENDANGERED SPECIES

SMUGGLING 

135. Lyddon was accused of smuggling tropical birds which

were protected under Mexican law. 

136. Rocha-Albertsen negotiated the matter to avoid

ultimate criminal liability for Lyddon. 

//

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E. THE JAIME BERGER MATTER

137. Jaime Berger (“Berger”) is an attorney in Baja

California, MX. 

138. Berger initially represented Lyddon in the litigation

against Ana Bertha. 

139. Berger also represented Lyddon in a matter involving

the purchase of another small piece of Mexican real property. 

Lyddon’s attorney client relationship with Berger eventually

terminated.

140. A dispute ensued between Lyddon and Berger over monies

and attorneys fees claimed by Berger to be owed by Lyddon. 

141. Berger filed suit against Lyddon for unpaid attorneys

fees in Mexico and the United States. 

142. Berger’s United States lawsuit was filed in California

State Court. 

143. Rocha-Albertsen worked on the Berger case in San Diego

on Lyddon’s behalf. 

144. The litigation lasted approximately six months. 

145. The case was pending in the Chula Vista courthouse of

the San Diego County. 

146. The case ended in a settlement agreement between the

parties. 

F. ROCHA-ALBERTSEN’S MISCELLANEOUS LEGAL DUTIES 

147. Rocha-Albertsen arranged the issuance and renewal of

FM3's for Lyddon and his assistant, Clyde Fredrickson. FM3's are

permits to return to Mexico. 

148. Rocha-Albertsen worked on the case of Hector Gonzales. 

Hector Gonzales was Lyddon’s attorney at one point during the

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pending lawsuit in Berger v. Lyddon in Mexico. 

149. From 1998 to 2000 Lyddon hired the following

attorneys; 

1. Baker & McKenzie

2. Luis De La Torre, Mexico City, MX.

3. Ramon Robles, Cabo San Lucas, MX.

4. Eric Hoffman, Cabo San Lucas, MX.

5. Paul Tovar. 

6. Ricardo Zavala Valdez. 

7. Hector Gonzalez. 

150. Rocha-Albertsen worked on disputes between these

attorneys and Lyddon. 

151. Rocha-Albertsen worked on the matter involving Ricardo

Zavala Valdes, for approximately two or three months. 

152. Rocha-Albertsen later testified that he spent only

about three weeks on the Zavala Valdez matter. 

153. Rocha-Albertsen worked two or three weeks maximum on

the Hector Gonzalez case. 

154. Rocha-Albertsen worked 6 months from start to finish

on the Paul Tovar case. 

155. Rocha-Albertsen worked on the Erik Kaufman case for

about three weeks. 

156. Rocha-Albertsen’s work on some of these cases were

simultaneous throughout the four year period. 

157. The Cabo Canamex matter had to do with the acquisition

of the beach property, the same property related to the

promissory note to Rocha-Albertsen. Rocha-Albertsen worked on

the matter for about eight months. 

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158. The Cabo Trust with Bancomer held title to Lyddon’s

beach front property and allowed Lyddon to be the holder and

possessor of the Mexico real properties in Cabo San Lucas. 

159. Lyddon had three trusts in Mexico. Rocha-Albertsen

worked on all three of the trusts. 

160. There were other trusts relating to the Punta Chivato

property that Rocha-Albertsen was in charge of registering. He

worked on these trusts about ten days. Lyddon was satisfied with

the legal services. 

161. Rocha-Albertsen was also responsible for convincing

the municipal authorities that the taxes to be paid as a result

of the sale of the Cabo property were too high. He worked

several hours on this. Rocha-Albertsen was successful in

reducing the tax. He had to fight against the tax because the

tax changed every year and Rocha-Albertsen was successful in

getting the tax reduced every year. 

162. Rocha-Albertsen also assisted in litigation between

Lyddon and Bancomer, a bank in Mexico City. This litigation was

commenced by Jaime Berger for Lyddon, then taken over by Paul

Tovar, then taken over by Rocha-Albertsen. Lyddon sued the bank. 

The case was dismissed. Rocha-Albertsen entered the case after

final judgment. Rocha-Albertsen worked on this case for

approximately ten days and made a trip to Mexico City with Lyddon

exclusively for this matter. 

163. The third time Rocha-Albertsen was in federal court in

relation to a criminal complaint against Lyddon was in 1999,

regarding a conflict over part of the land Lyddon owned in Cabo

San Lucas. Rocha-Albertsen went to court and filed papers in

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this matter. He worked on this specific matter 15 to 20 days.

This was in 1999. 

164. Rocha-Albertsen obtained two protective orders in

1999. 

165. These orders had to be reissued in 2000. RochaAlbertsen had to convince the judge again in 2000 to reissue

them.

166. Erik Kaufman’s fees were paid. 

167. Paul Tovar was employed at Mr. Berger’s office. The

understanding was that Tovar billed his fees through Berger and

he was always paid. 

168. No significant sums were due to Berger for lack of

payment by Lyddon. 

IX. SEPTEMBER 24, 2002: THE SIGNING OF THE PROMISSORY NOTE

169. Lyddon went into Rocha-Albertsen’s law office on

September 24, 2002, to sign documents relating to the sale of his

Cabo San Lucas property. Lyddon had to sign several documents on

that day. 

170. Prior to the signing of September 24th, Lyddon and

Rocha-Albertsen had an already established practice for signing

documents. 

171. Any documents that Lyddon had to sign, were normally

signed around a conference table in front of Rocha-Albertsen’s

desk. 

172. On September 24, 2002 when Lyddon signed the

documents, he was accompanied by Clyde Frederickson at RochaAlbertsen’s office. 

173. Clyde Frederickson also signed documents that same day

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in Rocha-Albertsen’s office. The signature block was usually in

the center of the page below both the English and the Spanish

versions on the page of any document Lyddon signed. 

174. Rocha-Albertsen did not discuss the contents of any

documents with Lyddon on the 24th. 

175. Rocha-Albertsen never discussed with Lyddon the issue

of compensation for legal services at the rate of 10% for

facilitating the sale of the Cabo San Lucas property to the

Canadians. 

176. Rocha-Albertsen never requested that Lyddon sign a

document promising to pay 10% to Rocha-Albertsen for legal work

received from the sale of Lyddon’s Cabo San Lucas property to the

Canadians. 

177. Rocha-Albertsen never told Lyddon or Frederickson

before or at the time, that one of the documents Lyddon signed on

September 24 was a $500,000 promissory note. 

X. THE PROMISSORY NOTE

178. It is the duty of a Mexican attorney who is

representing a client in the purchase and sale of real property,

where the attorney is to be compensated by an amount of 10% of

the purchase price, to accurately state in the attorney’s

compensation agreement with the client, the amount of the

purchase price and the amount of compensation. 

179. Rocha-Albertsen had no written compensation agreement

with Lyddon that pertained to the Cabo real property.

180. In Mexico, when an endorsee (Cuellar-Abundiz) sues on

a promissory note, the maker of the note, who is the promissor

(Lyddon), can assert defenses against the endorsee of which the

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endorsee has knowledge. 

181. Rocha-Albertsen prepared the $500,000 promissory note. 

The note was dated September 24, 2002. 

182. Lyddon’s signature is on the note. 

183. Without Lyddon’s knowledgeRocha-Albertsen included a

promissory note for Lyddon to sign, with a face amount of

$500,000.00, among the other papers related to the Cabo San Lucas

real estate transaction that Lyddon was to sign at RochaAlbertsen’s law office on September 24, 2002. 

184. Rocha-Albertsen intentionally omitted to disclose

material facts by failing to explain the terms of the promissory

note to his client, Lyddon on or before September 24, 2002. 

185. The purchase price for the Cabo real property was

incorrectly stated on the face of the promissory note as $5

million, rather than $2.8 million. 

186. Rocha-Albertsen violated Mexican law and committed

fraud against Lyddon by claiming 10% of a falsely stated $5

million purchase price in the amount of $500,000.

187. Rocha-Albertsen at all times knew that the sale price

of the Cabo real property was $2,800,000. 

188. The maximum amount under Mexican law, that could have

been claimed for attorneys fees was $280,000, if there had been

an agreement, for 10% compensation, which there was not. 

189. Interest on the promissory note accrues at 1.5% per

month if not paid by the date on the note. No interest is due or

collectible as the promissory note is void and unenforceable. 

190. Rocha-Albertsen, who was responsible for preparation

of the promissory note, never disclosed the correct sales price

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of $2.8 million on the promissory note

191. The promissory note is both in English and in Spanish. 

192. Lyddon was not given the promissory note to read, with

advice that the document was a $500,000 promissory note.

193. The note was made payable on February 2, 2003. 

194. Rocha-Albertsen did not inform Lyddon of the due date

stated on the promissory note. 

195. On September 24, 2002 when Lyddon signed the

promissory note he had come into Rocha-Albertsen’s office

expecting to sign other documents relating to the sale of Cabo

real property. 

196. The note was never separately identified or explained

to Lyddon.

197. Lyddon never had knowledge of nor intent to sign the

$500,000 promissory note.

198. Rocha-Albertsen never told anyone, not even Norma

Perez, that Lyddon was going to sign a $500,000 promissory note. 

197. Lyddon did not then owe and has never owed Rocha-Albertsen

the sum of $500,000. 

199. Lyddon did not ask Rocha-Albertsen to prepare the

promissory note. 

200. Rocha-Albertsen did not tell Lyddon that RochaAlbertsen prepared the promissory nor that the promissory note

was for Lyddon’s signature. 

201. At the time Lyddon signed the documents, with which

the promissory note was included, Rocha-Albertsen did not tell

Lyddon that the note was among the documents to be signed. 

202. Rocha-Albertsen did not explain any of the other

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documents before Lyddon signed them.

203. Rocha-Albertsen’s fraud was in the execution because

it prevented Lyddon from knowing the nature of, the amount, or

terms of the promissory note and kept Lyddon from knowing about

the obligation or referring it to Frederickson for review and

approval before signing. 

204. Rocha-Albertsen did not see Lyddon sign the documents

that included the promissory note. 

205. Lyddon was not in Rocha-Albertsen’s presence when he

signed the documents that included the promissory note. 

206. At the time that Lyddon signed the promissory note,

Rocha-Albertsen owed Cuellar-Abundiz money for unpaid legal

services performed by Cuellar-Abundiz for Rocha-Albertsen.

207. Rocha-Albertsen transferred the signed promissory note

to Cuellar-Abundiz on November 12, 2002. 

208. Rocha-Albertsen never made any direct attempt to

himself enforce the signed promissory note against Lyddon. 

209. By the time the promissory note was enforced by

Cuellar-Abundiz against Lyddon, the debt was over a million

dollars, counting accrued interest. 

210. Promissory notes are typed on different colored paper. 

The validity of a promissory note in Mexico has nothing to do

with the color of the paper. 

211. Frederickson did not know that Lyddon ever agreed to

sign a $500,000 promissory note naming Rocha-Albertsen as

promissee. 

212. Based on a long history of custom and practice in

their business dealings, the promissory note for $500,000 is

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something that Frederickson would have absolutely known about and

would have approved before Lyddon signed it.

213. There was no consideration for a $500,000 promissory

note from Lyddon to Rocha-Albertsen, as Rocha-Albertsen had

already been paid on an ongoing basis for the legal services he

provided Lyddon, including sale of the Cabo real property. 

XI. ROCHA-ALBERTSEN’S PRIOR DEALINGS WITH CUELLAR-ABUNDIZ

214. Rocha-Albertsen was the owner of an unsuccessful

restaurant business in the late 1990s. 

215. Eventually Rocha-Albertsen came to have problems with

unpaid creditors as a result of his failed business. 

216. Rocha-Albertsen and Cuellar-Abundiz were acquaintances

who had gone to the same law school together and Cuellar-Abundiz

stopped by Rocha-Albertsen’s restaurant on occasion. 

217. Rocha-Albertsen sought Cuellar-Abundiz's legal

services to assist him with his failed restaurant and his

problems with creditors.

218. Cuellar-Abundiz provided Rocha-Albertsen with legal

services with the knowledge there was a chance Rocha-Albertsen

might not pay. 

219. Cuellar-Abundiz assisted Rocha-Albertsen in a legal

project involving Banca Promex. Rocha-Albertsen owed CuellarAbundiz an unpaid balance for attorneys fees as a result of the

failed restaurant. Cuellar-Abundiz represented Rocha-Albertsen

in the restaurant matter and obtained a release liability for

Rocha-Albertsen. 

220. Rocha-Albertsen owed money to Cuellar-Abundiz for

legal services performed, over $100,000. 

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221. Rocha-Albertsen’s restaurant went bankrupt in 2000. 

Cuellar-Abundiz had periodic contact with Rocha-Albertsen’s

restaurant as it was located a few blocks from Cuellar-Abundiz's

home. 

222. From 2000 to 2002, Cuellar-Abundiz discussed

collecting the over $100,000 debt owed by Rocha-Albertsen,

approximately ten to fifteen times, and personally called RochaAlbertsen on the phone about the debt. 

223. Cuellar-Abundiz had people in his office, who were

responsible for collecting unpaid fees, call Rocha-Albertsen on a

number of occasions, to no avail.

224. By October 22, 2002, Rocha-Albertsen owed CuellarAbundiz over $100,000 for unpaid attorneys fees. 

225. Cuellar-Abundiz continued to send invoices to RochaAlbertsen but Rocha-Albertsen told Cuellar-Abundiz he could not

pay.

226. Even though it had been four years, Cuellar-Abundiz

hoped that he would eventually get paid. 

227. As of September 2002 Cuellar-Abundiz was not pressing

Rocha-Albertsen to pay him. Other than sending regular invoices,

Cuellar-Abundiz did not make a demand on Rocha-Albertsen for

payment at that time. 

228. Cuellar-Abundiz has never initiated a lawsuit against

Rocha-Albertsen for the unpaid fees. 

229. Cuellar-Abundiz has since forestalled collection on

the over $100,000 he is owed by Rocha-Albertsen, because he

negotiated a deal with Rocha-Albertsen to accept the Lyddon

promissory note as payment.

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230. The debt from Rocha-Albertsen gave Cuellar-Abundiz a

motive to agree with Rocha-Albertsen to wrongfully prosecute

enforcement of the Lyddon note.

XII. THE PROMISSORY NOTE TRANSFER AGREEMENT

231. Rocha-Albertsen transferred the $500,000 signed

promissory note to Cuellar-Abundiz in November 2002. 

232. At the time Rocha-Albertsen transferred the note, he

was in dire financial straits and owed money, over $100,000, to

Cuellar-Abundiz. 

233. Rocha-Albertsen had previously received attorneys fees

bills from Cuellar-Abundiz for legal work for Rocha-Albertsen on

business and credit problems. Rocha-Albertsen never paid them. 

234. One bill was for $11,000. Additional bills were

incurred by Rocha-Albertsen for legal work by Cuellar-Abundiz for

direct legal services and on some matters where Rocha-Albertsen

sought assistance from Cuellar-Abundiz on matters concerning

Rocha-Albertsen’s clients.

235. In November 2002, Rocha-Albertsen went to CuellarAbundiz's office to verify that the $500,000 note was a legally

enforceable document. Cuellar-Abundiz reviewed the note and

believed that it met all of the requirements of the law. 

236. This is suspicious, because Rocha-Albertsen should

have had no reason to question the validity of the note he

prepared if Lyddon knowingly and voluntarily signed the note and

acknowledged the debt by signing. 

237. During this meeting Cuellar-Abundiz asked RochaAlbertsen the basis for the amount of the obligation of $500,000

from Lyddon.

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238. Cuellar-Abundiz testified that Rocha-Albertsen told

Cuellar-Abundiz that the amount was to cover a final settlement

of legal fees owed to Rocha-Albertsen by Lyddon. Final

settlement in Mexico means that the attorney client relationship

or representation is ended and it is settled as to any amount to

which each party is entitled. 

239. Before showing up at Cuellar-Abundiz's office to show

him the promissory note and to verify it, Rocha-Albertsen had not

mentioned anything to Cuellar-Abundiz about the possibility of

making a large payment on Rocha-Albertsen’s debt. 

240. The 10% legal requirement under the Schedule of Fees

for the State of Baja, California applies when there is no

written or oral contract between the attorney and the client. 

241. Parties are free to negotiate their own terms of a

contingency fee arrangement if they choose to do so.

242. Rocha-Albertsen and Cuellar-Abundiz entered into a

contingency fee arrangement in which Rocha-Albertsen assigned

Lyddon’s note to Cuellar-Abundiz, who would seek enforcement of

the note. 

243. Rocha-Albertsen and Cuellar-Abundiz agreed that they

would split the note proceeds upon collection, with 50% payable

to Cuellar-Abundiz directly and from the other 50%, RochaAlbertsen would satisfy his debt to Cuellar-Abundiz and the

remaining balance would go to Rocha-Albertsen. 

244. The contingency fee arrangement between RochaAlbertsen and Cuellar-Abundiz was an oral agreement. 

245. Cuellar-Abundiz is the current owner and holder of the

note. 

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246. When Cuellar-Abundiz took the note, he had knowledge

that it was owed by Lyddon, his former client. 

247. Cuellar-Abundiz should have contacted Lyddon to

inquire about the validity of the note and if Lyddon would

voluntarily pay it. 

XIII. ROCHA-ALBERTSEN’S SCHEDULING CALENDAR

248. Cuellar-Abundiz’s name was scheduled in RochaAlbertsen’s calendar for the date of September 24, 2002, the same

day the disputed promissory note was signed. 

249. Cuellar-Abundiz’s name appears in Rocha-Albertsen’s

calendar twice on September 24, 2002. 

250. To designate scheduled calls, Rocha-Albertsen writes

down the person’s name to be called in his planner and puts a

small circle next to that person’s name. 

251. Cuellar-Abundiz’s name had a small circle next to his

name on Rocha-Albertsen’s calendar for September 24, 2002. 

252. Rocha-Albertsen called Cuellar-Abundiz twice on

September 24, 2002. 

253. This is circumstantial evidence that Rocha-Albertsen

sought Cuellar-Abundiz’s assistance in preparing the promissory

note.

XIV. CUELLAR-ABUNDIZ’S SCHEDULING CALENDAR

254. Cuellar-Abundiz did not have Rocha-Albertsen scheduled

in his planner on the date of September 24, 2002. 

255. There is no reference in Cuellar-Abundiz’s office desk

calendar to Attorney Rocha-Albertsen on September 24, 2002. 

256. Cuellar-Abundiz denied participating in preparation of

the promissory note.

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257. The evidence does not preponderate that CuellarAbundiz directly participated in the fraudulent obtaining of the

$500,000 promissory note from Lyddon on September 24, 2002. 

258. The circumstances under which Rocha-Albertsen

presented the promissory note to Cuellar-Abundiz were highly

suspicious in that a consensual acknowledgment of a valid and

subsisting debt by an attorney-creditor who prepared the note

should not have required an advisory opinion from another

attorney as to its enforceability.

259. The face amount of the note, $500,000, was so high

that the amount should have put Cuellar-Abundiz on immediate

notice as to whether the note represented a valid and enforceable

obligation.

260. The note, which purports to be for 10% of the sale

price of property, should have caused Cuellar-Abundiz to inquire

about the underlying sale price which was illegally overstated.

261. The contingency arrangement is also highly suspect. 

Cuellar-Abundiz was to receive $250,000 plus accrued interest or

50% of the amount of the proceeds he collected off the top; then, 

the entire amount of the debt owed by Cuellar-Abundiz to him,

well over $100,000, with any balance remaining payable to RochaAlbertsen.

262. Cuellar-Abundiz knew that Rocha-Albertsen was in

desperate financial straits; that Rocha-Albertsen did not have

money; was unable to pay his debts; and that Rocha-Albertsen’s

attorney-client relationship with Lyddon had ended.

263. Because Cuellar-Abundiz had maintained a satisfactory

attorney-client relationship with Lyddon and had been paid in

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full by Lyddon, there was no reason for Cuellar-Abundiz, a former

attorney who was then not on adverse terms with Lyddon, a former

client, not to contact Lyddon to inquire about the circumstances

and validity of the promissory note. 

264. Instead, Cuellar-Abundiz made a highly financially

advantageous agreement with Rocha-Albertsen to totally

disadvantage Lyddon and set up a plan to trick Lyddon into being

served with Cuellar-Abundiz’s lawsuit.

265. By simple inquiry of Lyddon, Cuellar-Abundiz would

have learned that the Note was fraudulently procured and illegal

as to its amount.

266. The agreement between Rocha-Albertsen and CuellarAbundiz was to wrongfully enforce an illegal, void, and

fraudulent promissory note, which Cuellar-Abundiz knew or should

have known.

XV. THE CUELLAR-ABUNDIZ PROMISSORY NOTE ENFORCEMENT SUIT

267. In early 2003, Lyddon initiated a phone call to RochaAlbertsen and made an appointment to pick up his legal files from

Rocha-Albertsen on February 18, 2003, as Lyddon was changing

lawyers. 

268. Rocha-Albertsen and Lyddon mutually agreed that Lyddon

pick up his legal files. 

269. Three weeks prior, Lyddon had made an appointment with

Rocha-Albertsen to pick up the files. When Lyddon got to the

Mexican border he called Rocha-Albertsen’s office and told RochaAlbertsen that he was about to cross the border. Rocha-Albertsen

told Lyddon that an emergency had arisen which required that

Rocha-Albertsen leave immediately to go to Ensenada. 

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270. Cuellar-Abundiz talked to Rocha-Albertsen prior to

serving Lyddon with the enforcement lawsuit. 

271. Rocha-Albertsen told Cuellar-Abundiz that Lyddon would

be outside his office on February 18, 2003, in Tijuana, MX. 

272. Lyddon was first served with the Cuellar-Abundiz

lawsuit on February 18, 2003, outside Rocha-Albertsen’s office. 

273. When filing a commercial action in Mexico to enforce a

promissory note, the defendant has five days to answer. Even if

the defendant does not file an answer he can offer evidence to

substantiate the fact that he does not owe that money on the

note. 

274. When Lyddon arrived at Rocha-Albertsen’s office on

February 18, 2002, the door was locked. There was a note on the

door that said, “Gone for a coke. Back in ten minutes.” 

275. Lyddon stood outside the office for a moment and then

Cuellar-Abundiz approached him and told him that the door was

locked but they wanted to talk to him. Also present were a

process server who showed Lyddon a badge and an interpreter. 

276. Two women took Lyddon’s picture at the time of

service. 

277. Lyddon secured representation from attorneys in

Tijuana to defend with the Cuellar-Abundiz lawsuit. 

278. Lyddon’s attorney informed Lyddon that the CuellarAbundiz lawsuit was to enforce a promissory note. 

279. Lyddon testified that he had never seen the promissory

note before he was shown the note in the Cuellar-Abundiz

enforcement suit. 

280. It is not reasonable to believe that Lyddon would sign

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a $500,000 promissory note to Rocha-Albertsen for legal services,

because Lyddon had paid Rocha-Albertsen for legal services

already. The face amount of the note was almost double the

amount permitted by law for a real estate sale. 

281. If Lyddon had ever seen the note he would not have

signed it, as he and Frederickson testified. 

282. Two or three months after being served outside RochaAlbertsen’s office, Lyddon first saw the original promissory note

with his original signature on it. 

283. Lyddon next saw the note when he was in the courthouse

building in Tijuana. Lyddon also got to see the lawsuit at that

time. It was in Spanish and on legal paper. The paper the

promissory note was on looked like the paper that he occasionally

signed in blank form at Rocha-Albertsen’s request. 

284. After leaving the court in Tijuana, Lyddon had no

contact with Rocha-Albertsen until Christmas of 2003 when RochaAlbertsen left a message on Lyddon’s answering machine requesting

that Lyddon return his call. 

285. Rocha-Albertsen asked Cuellar-Abundiz if he would

dismiss the lawsuit, Cuellar-Abundiz told Rocha-Albertsen that he

would not dismiss the lawsuit.

286. Cuellar-Abundiz lost his case in Mexico to collect the

note against Lyddon. In this first enforcement action, CuellarAbundiz originally obtained a judgment which was vacated on

appeal because Cuellar-Abundiz did not follow the procedural

requirement of the court to have the promissory note translated

into Spanish by a certified expert. 

287. The Mexican federal judge determined that the

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promissory note was not properly translated, although the note is

stated in both Spanish and English in two different columns. 

288. The case was remanded for further proceedings. 

289. Upon retrial the parties have all the law and defenses

that the law permits. 

290. Cuellar-Abundiz did not appeal to a higher court

because the judge did not rule on the substantive merits of the

case. The validity of the note was not determined. 

291. Cuellar-Abundiz intends to pursue enforcement on the

note. He also has a lien on all of Lyddon’s property in Mexico. 

292. The actual promissory note is in a safe at the

courthouse in Tijuana, MX. 

XVI. THE DECEMBER 25, 2003 ROCHA-ALBERTSEN PHONE CALL

293. On December 25, 2003 Rocha-Albertsen called Lyddon and

left a message on Lyddon's machine requesting that Lyddon return

his phone call. 

294. Rocha-Albertsen also called Frederickson at home in

Utah and left a message that he was trying reach Lyddon. 

295. When Lyddon returned Rocha-Albertsen's phone call on

December 25, 2003, Rocha-Albertsen was very emotional. 

296. During this phone call, Rocha-Albertsen apologized to

Lyddon for having done a "bad thing." Rocha-Albertsen also

stated that he wanted to meet Lyddon, Frederickson, and attorney

Mr. Brewer. 

297. Frederickson and Rocha-Albertsen also had a phone

conversation on December 26, 2003 for about 15 or 20 minutes

where Frederickson told Rocha-Albertsen that Lyddon did not owe

him $500,000. 

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XVII. THE MEETING AT MR. BREWER’S OFFICE

298. Mr. Brewer was contacted by Rocha-Albertsen in the

latter part of January 2004. He received a call notifying him

that there would be a meeting with Lyddon, Rocha-Albertsen, and

others and asking if they could use his offices for that meeting. 

299. Mr. Brewer was not asked to serve as any party’s

lawyer at the meeting. 

300. When the meeting between these parties was arranged,

Mr. Brewer did not know that there was a legal dispute between

Lyddon and Rocha-Albertsen. 

301. Rocha-Albertsen told Mr. Brewer that he wanted to meet

with Lyddon and apologize, that he had made a terrible mistake

and he wanted Mr. Brewer to attend the meeting.

302. Mr. Brewer attended two meetings involving RochaAlbertsen and Lyddon in 2004 in Mr. Brewer’s San Diego law

offices. 

303. The first meeting was held in conference room 33 A.

Present were Rocha-Albertsen, Frederickson, Lyddon, Mr. Brewer.

304. At the first meeting there were no settlement

discussions in Mr. Brewer’s presence. 

305. Mr. Brewer was never told by anyone before the meeting

at Brewer’s law office that the subject of the meetings was

settlement of any dispute.

306. By the date of these meetings there were two lawsuits

pending in Mexico against Lyddon. The first lawsuit was filed by

Rocha-Albertsen for unpaid attorney’s fees. The second lawsuit

was filed by Cuellar-Abundiz to enforce the promissory note. 

307. At the first meeting, there were no discussions as to

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the litigation between the parties to this case. 

308. At the first meeting Rocha-Albertsen was visibly

upset. He started to speak and then began to weep and was crying.

He had to stop talking and compose himself.

309. Rocha-Albertsen said on numerous occasions during the

first meeting that he was very sorry for what he had done. 

Rocha-Albertsen said that he violated his client’s trust and a

friend’s confidence. These are admissions. 

310. The focus of Rocha-Albertsen’s apology was about a

signature on a document and the veracity of that document.

311. During the first meeting Rocha-Albertsen stated that

there would be a second meeting where he would communicate what

he would do to “make amends” or what he would do to “fix the

problems.” 

312. The court finds that these references were to the

$500,000 promissory note. 

313. Rocha-Albertsen’s words and conduct evidenced a

consciousness of guilt and an admission that he betrayed his

friend Lyddon, by preparing and procuring Lyddons’ signature on

an unlawful and fraudulent promissory note.

314. There was no statement by anybody at the San Diego

meeting that the conversations or communications at the meeting

were to be confidential. Rocha-Albertsen’s statements at that

meeting are admissible in evidence as admissions.

315. The San Diego meeting was not to effectuate a

settlement or compromise. 

316. There were no written minutes of the San Diego meeting

or any other record of the meeting as to participants or the

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substance of discussions at the meeting. 

317. No one typed or wrote anything down at the two

meetings. 

318. Mr. Brewer was never asked to take any role to resolve

any issue raised by Rocha-Albertsen in the two meetings about

Lyddon’s signature on the promissory note. 

319. In a lawsuit in Mexico, Rocha-Albertsen sued Lyddon

for $25,000 in unpaid legal fees. Legal fees pertaining to “the

last few months of work.” Rocha-Albertsen testified that his

claim could have been for work from 2001 to 2002. This proves

that Lyddon did not owe the $500,000 for legal services not

connected with the sale of the Cabo property as the date of the

note, September 24, 2002, is after 2001. 

320. After the meeting with Lyddon at Mr. Brewer’s office,

Rocha-Albertsen dropped his lawsuit against Lyddon for attorneys

fees. 

321. After the meeting Mr. Brewer did not see either Lyddon

or Rocha-Albertsen until Mr. Brewer’s deposition in this case in

2005. 

322. After the meeting Mr. Brewer stopped referring clients

to Rocha-Albertsen. 

323. There was no settlement agreement drafted or concluded

at or after the meetings at Mr. Brewer’s office. 

324. The court finds Mr. Brewer to be credible and that his

testimony about the 2003 meeting at his office is true. 

325. Mr. Brewer is an experienced attorney and had no

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reason to lie at this trial. He had no motive or bias to favor

any party in this case. 

XVIII. CREDIBILITY DETERMINATIONS

326. As a matter of credibility, Rocha-Albertsen and

Cuellar-Abundiz have everything to gain, little to lose, in their

pursuit of the note’s enforcement. Lyddon had everything to lose

and was consistent in his denials of the existence and contents

of the note. 

a. Rocha-Albertsen was inconsistent in many of his

answers.

b. Cuellar-Abundiz failed to explain why he did not

contact Lyddon at the time Rocha-Albertsen brought

the note to Cuellar-Abundiz in September 2002, to

verify its validity and learn Lyddon’s position on

the payment. 

327. Lyddon has negligible motive to misrepresent the

note’s purpose because the true facts are that sale price of the

Cabo property was $2.8 million. The note is illegal.

328. Lyddon could expect the note to be voided and

cancelled when the true facts were ascertained.

329. Lyddon knew he had paid Rocha-Albertsen over $120,000

in attorneys fees over four years. No evidence of legal services

by Rocha-Albertsen for unpaid legal services of $500,000 was

presented, nor did Lyddon need to worry that Rocha-Albertsen

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could produce evidence to justify “settlement” in September 2002

of attorneys fees owed by Lyddon of an additional $500,000.

330. Rocha-Albertsen admitted to an impartial and highly

credible witness, Mr. Brewer, that he had wronged Lyddon through

obtaining the promissory note. 

CONCLUSIONS OF LAW

I. SUBJECT MATTER JURISDICTION

1. The district courts have original jurisdiction of all

civil actions where the matter in controversy exceeds the sum or

value of $75,000, exclusive of interests and costs, and is

between citizens of different states and in which citizens of a

foreign state are additional parties. 28 U.S.C. §1332(a)(3)

(2006). 

2. This dispute is between Plaintiff Lyddon, a citizen of

the State of California, and Defendants Rocha-Albertsen and

Cuellar-Abundiz, both citizens of Mexico. 

3. It is undisputed that the amount in controversy exceeds

the value of $75,000, exclusive of interests and costs. 

II. PERSONAL JURISDICTION

A. DEFENDANTS’ CONSENT TO PERSONAL JURISDICTION

4. Personal jurisdiction recognizes and protects an

individual liberty interest and can, like other such rights, be

waived. Dow Chem. Co. v. Calderon, 422 F.3d 827, 831 (9th Cir.

2005). 

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5. A defendant submits to the court’s jurisdiction either

by expressly consenting thereto or by failing to raise the

defense of lack of jurisdiction in its initial motion or

responsive pleading. Fed. R. Civ. P. 12(h)(1); Schnabel v. Lui,

302 F.3d 1023, 1033 (9th Cir. 2002). Both Defendants objected to

personal jurisdiction in the Eastern District of California.

6. A non resident who appears in an action without raising

lack of personal jurisdiction is deemed to consent to the court’s

jurisdiction. Schwarzer, Tashima, & Wagstaffe, CAL. PRAC. GUIDE:

FED. CIV. PRO. BEFORE TRIAL ¶ 3:64.1 (The Rutter Group 2006).

7. The evidence establishes that defendant Rocha-Albertsen

actively solicited legal business in California, that he had a

California telephone number, that he sought referrals from a

California lawyer based in San Diego, CA, had meetings with his

client, Lyddon, in San Diego, CA and communicated with Lyddon in

California about Lyddon’s business matters that concerned Mexican

real property and activities Lyddon engaged in both in California

and Mexico. 

8. Rocha-Albertsen established more than minimum contacts

with California and communicated to Lyddon at Lyddon’s

Bakersfield (California) office. He was paid from Lyddon’s

Bakersfield office. He had many business meetings in California

with Frederickson on Lyddon’s business matters. Systematic and

continuous contacts in the 1999-2001 period by Rocha-Albertsen

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with California and Lyddon affecting the Eastern District of

California are present to justify the assertion of personal

jurisdiction over Rocha-Albertsen in this District. 

9. The court has personal jurisdiction over Rocha-Albertsen

in this action. 

B. JURISDICTION BASED ON DEFENDANTS’ MINIMUM CONTACTS

IN CALIFORNIA 

10. Where, as here, there is no applicable federal statute

governing personal jurisdiction, the district court applies the

law of the state in which the district court sits. See, Fed. R.

Civ. P. 4(k)(1)(A); Yahoo! Inc. v. La Ligue Contre Le Racisme,

433 F.3d 1199, 1205 (9th Cir. 2006).

11. In California, a court may exercise jurisdiction on any

basis not inconsistent with the Constitution of the state or of

the United States. Cal. Code Civ. P. § 410.10; Tuazon v. R.J.

Reynolds Tobacco Co., 433 F.3d 1163, 1168 (9th Cir. 2006)

(exercise of in personam jurisdiction over an out of state

defendant is limited by the Due Process Clause of the Fourteenth

Amendment.) 

12. Because California’s long arm jurisdictional statute is

coextensive with federal due process requirements, the

jurisdictional analyses under state law and federal due process

are the same. Yahoo! Inc., 433 F.3d at 1205. 

13. For a court to exercise personal jurisdiction over a

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non resident defendant, that defendant must have at least minimum

contacts with the relevant forum such that the exercise of

jurisdiction does not offend traditional notions of fair play and

substantial justice. Schwarzenegger, 374 F.3d at 801; see also,

International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). 

14. There are two kinds of jurisdiction a court can

exercise over a non resident defendant: general jurisdiction and

specific jurisdiction.

C. GENERAL JURISDICTION 

15. For general jurisdiction to exist over a non resident

defendant, the defendant must engage in continuous and systematic

general business contacts that approximate physical presence

within the state. Schwarzenegger, 374 F.3d at 801. This is an

exacting standard because a finding of general jurisdiction

permits a defendant to be haled into court in the forum state to

answer for any of its activities anywhere in the world. Id.;

Brayton Purcell LLP v. Recordon & Recordon, 361 F. Supp. 2d 1135,

1139 (N.D. Cal. 2005); See also, International Shoe Co. v.

Washington, 326 U.S. 310, 318 (1945)(“While it has been held that

continuous activities of some sorts within a state is not enough

to support the demand that the corporation be amenable to suits

unrelated to that activity, there have been instances in which

the continuous... operations within a state were thought so

substantial and of such a nature as to justify suit against it on

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causes of action arising from dealings entirely distinct from

those activities.”) 

16. In applying general jurisdiction, “factors to be taken

into consideration are whether the defendant makes sales,

solicits or engages in business in the state, serves the state’s

markets, designates an agent for service of process, holds a

license, or is incorporated there.” Brayton Purcell LLP, 361 F.

Supp. at 1139 (quoting, Bancroft & Masters, Inc. v. Augusta

Nat’l, Inc., 223 F.3d 1082, 1086 (9th Cir. 2000).)

17. Rocha-Albertsen intentionally solicited Lyddon’s legal

business, knowing that Lyddon was a California resident and would

conduct some of Lyddon’s business. 

18. Rocha-Albertsen met with Lyddon and Frederickson in

California numerous times, on both business and personal matters

related to the legal services he performed for Lyddon and

Lyddon’s business. 

19. Rocha-Albertsen communicated with Lyddon and

Frederickson in California in the Eastern and Southern Districts.

20. Rocha-Albertsen advertised for business in California,

met with a number of other clients in San Diego at Mr. Brewer’s

law office, and accepted referrals of U.S. clients from Mr.

Brewer, for legal work to be performed in Mexico. 

//

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D. SPECIFIC JURISDICTION

21. Specific jurisdiction is analyzed under a three prong

test:

1. The non resident defendant must

purposefully direct activities or

consummate some transaction with the

forum or resident thereof; or perform

some act which he purposefully avails

himself of the privilege of conducting

activities in the forum, thereby

invoking the benefits and protection of

its laws; 

2. the claim must be one which arises out

of or relates to the defendant’s forum

related activities; and 

3. the exercise of jurisdiction must

comport with fair play and substantial

justice, i.e. it must be reasonable. 

Schwarzenegger, 374 F.3d at 802.; Brayton Purcell LLP, 361 F.

Supp. 2d at 1140. 

22. Though the Ninth Circuit formerly required a plaintiff

to demonstrate each of these factors to establish specific

jurisdiction, now jurisdiction may be established with a lesser

showing of minium contacts if considerations of reasonableness

dictate. Ochoa v. J.B. Martin & Sons Farms, 287 F.3d 1182, 1189

(9th Cir. 2002). Under this analysis, there will be cases in

which the defendant has not purposefully directed its activities

at the forum state, but has created sufficient contacts to allow

the state to exercise personal jurisdiction if such exercise is

sufficiently reasonable. Id.

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23. Although Cuellar-Abundiz did not intend to himself

perform acts in the United States and the Eastern District of

California, his enforcement agreement with Rocha-Albertsen to

carry out a wrongful scheme to enforce a fraudulent and illegal

note has consequences that Cuellar-Abundiz intended and were

foreseeable to cause harm to Lyddon with the State and Eastern

District of California. 

24. The Court has by virtue of Cuellar-Abundiz’s knowing

and intentional conduct to do injury and harm to Lyddon at the

situs of Lyddon’s business and residence in the Eastern District

of California, sufficiently acted to directly cause such harm and

damage to Lyddon to provide a reasonable basis for jurisdiction

that comports with conventional standards of fair play and

substantial justice.

E. ROCHA-ALBERTSEN’S PURPOSEFUL AVAILMENT

25. Under the first prong of the three part specific

jurisdiction test, Lyddon has established that Rocha-Albertsen

purposefully availed himself of the privilege of conducting

activities in California, and Rocha-Albertsen purposefully

directed his activities toward California to obtain and maintain

Lyddon and other clients and to perform legal services for which

he would be compensated. Schwarzenegger, 374 F.3d at 802. A

purposeful availment analysis applies to suits sounding in

contract. Id.

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26. Although Cuellar-Abundiz had a post office box and U.S.

clients, he did not solicit Lyddon’s business in California and

did not otherwise seek to perform legal services for Lyddon in

California. All legal work Cuellar-Abundiz performed for U.S.

clients was in Mexico.

27. Cuellar-Abundiz’s maintenance of postal boxes and

telephone service in California was to aid the efficiency of his

business in Mexico. 

28. Personal jurisdiction exists over Cuellar-Abundiz based

on his tortious acts and conspiratorial acts “purposefully

directed” towards Lyddon in Bakersfield, California. These

consisted of:

 a. wrongful agreement with Rocha-Albertsen to enforce

a fraudulent and illegal note against Lyddon;

 b. knowing enforcement of the fraudulent and illegal

note against Lyddon;

 c. performance of overt acts against Lyddon by

serving him and by seeking to sequester Mexican property which

would have adverse consequences to Lyddon at his Bakersfield

headquarters office. 

29. Neither Rocha-Albertsen or Cuellar-Abundiz were

licensed to practice law in California. 

30. Rocha-Albertsen was previously employed by a U.S. law

firm, Baker and McKenzie. Rocha-Albertsen worked in Tijuana, MX

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for Baker and McKenzie and worked on Lyddon matters while Lyddon

was a client of that law firm. 

31. A showing that a defendant purposefully availed himself

of the privilege of doing business in a forum state typically

consists of evidence of the defendant’s affirmative actions in

the forum. Schwarzenegger, 374 F.3d at 802; See also, Harris

Rutsky & Co. Ins. Servs. v. Bell & Clements Ltd., 328 F.3d 1122,

1130 (9th Cir. 2003). By taking such actions, a defendant

“purposefully avails itself of the privilege of conducting

activities within the forum State, thus invoking the benefits and

protections of its laws. Schwarzenegger, 374 F.3d at 802. In

return for these benefits and protections a defendant must submit

to the burdens of litigation in that forum. Id. 

32. The mere existence of a contract with a party in the

forum state does not constitute sufficient minimum contacts for

jurisdiction. Sher v. Johnson, 911 F.2d 1357, 1362 (9th Cir.

1990). In determining whether personal jurisdiction existed over

a Defendant law firm, the Ninth Circuit looked to prior

negotiations and contemplated future consequences, along with the

terms of the contract and the parties' actual course of dealing

to determine if the defendant's contacts are substantial and not

merely random, fortuitous, or attenuated. Id. at 1361. 

Accepting payment from a California bank, making phone calls, and

sending letters to California as normal incidents of the

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 However, the court ultimately held that by requiring the 1

execution of a deed to California real estate, the partnership

was looking to the laws of California to secure its right to

payment under its contract with Sher. Sher, 911 F.2d at 1363.

This contemplated significant future consequences in California

52

representation did not constitute a deliberate creation of a

"substantial connection" to establish purposeful availment. Id.

at 1362. Nor did these acts constitute a promotion of business

within California. Id. 

33. In Sher a legal malpractice claim was brought by a

California resident against a Florida law firm. Id. at 1362. 

The law firm promoted legal representation of Plaintiff in

Florida. Id. at 1362. The firm did not solicit Plaintiff's

business in Florida; Plaintiff came to the firm in Florida. Id. 

There was no substantial connection with California because

neither the firm nor any of its partners undertook any

affirmative action to promote business with California. Id. 

Even the three trips by the firm's partner to California in

connection with the representation of Plaintiff, combined with

the underlying representation did not constitute purposeful

availment. Id. at 1363. These three trips were discreet events

arising out of a case centered entirely in Florida and that

appeared to have been little more than a convenience to the

client who would have had to otherwise travel to Florida. Id. 

Such contacts were too attenuated to create a substantial

connection with California. Id. 1

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and, combined with the firm's entire course of dealing with the

Shers, including the calls, the letters, and the trips,

constituted purposeful availment for purposes of jurisdiction. 

Id. 

53

34. Sher is partially applicable to Cuellar-Abundiz, who

met Lyddon in Tijuana, MX based on Rocha-Albertsen’s referral. 

Cuellar-Abundiz’s legal work for Lyddon was only performed in

Mexico and covered business and legal disputes in Mexico. 

However, jurisdiction over Cuellar-Abundiz is found through a

purposeful direction analysis and through a conspiracy theory,

through which Rocha-Albertsen’s California purposeful availment

and solicitation of California business and California minimum

contacts are attributed to Cuellar-Abundiz. 

35. Deliberately creating continuing obligations to a

resident of California by contracting to provide personal

services is sufficient to establish purposeful availment for

Rocha-Albertsen. T.M. Hylwa, M.D., Inc. v. Palka, 823 F.2d 310,

314 (9th Cir. 1987). In Palka, Defendant Palka was hired by

Plaintiff Hylwa to render accounting services for Hylwa's medical

practice in Kansas. Id. Hylwa eventually discontinued his

practice in Kansas and moved to California where he established a

new medical practice. Id. Palka continued to provide accounting

services from Kansas to Hylwa's California medical practice. Id. 

Palka performed most of the services in Kansas but would travel

to California on a regular basis over the span of two years. Id.

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36. The Ninth Circuit held that Palka "purposefully engaged

in a business relationship with a California employer such that

he should reasonably anticipate being haled into court there."

Id. at 314. (citing, World-Wide Volkswagon Corp. v. Woodson, 444

U.S. 286, 297 (1980)). That Palka rarely came into physical

contact with the forum did not defeat jurisdiction. Id. While

Palka's initial contact with California was created by Hylwa's

unilateral decision to move there, Palka's decision to continue

serving as an accountant for Hylwa's California practice for

three years arose from Palka's desire to benefit from the

contractual relationship and not from Hylwa's unexpected

relocation. Id. at 314. Based on his ongoing performance of

accounting services for a California enterprise, including his

annual business trips to California, Palka purposefully availed

himself of the laws of California and should have reasonably

anticipated being haled into court within the state for claims

arising out of his employment. Id. 

37. In Trinity Industries, Inc. v. Myers, 41 F.3d 229 (5th

Cir. 1995), the Fifth Circuit also dealt with the issue of what

constitutes purposeful availment activities in a forum state. 

The Fifth Circuit held that Plaintiff, who was a major client of

the firm and the firm representing Plaintiff over the course of

several years, regularly handling Plaintiff's legal matters, was

sufficient to establish the requisite minimum contacts in the

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forum state. Id at 231. The legal representation required

regular mail and telephonic communications within the forum state

and, on occasion, physical presence for meetings in the forum

state. Id. Over a three year period the firm represented

Plaintiffs within the courts of the forum state. Id. These

contacts amounted to a substantial connection within the forum

state and such contacts could not be accurately be characterized

as random, fortuitous, or incidental. Id. 

38. Rocha-Albertsen regularly communicated, traveled with,

and corresponded with Lyddon in California. Lyddon was RochaAlbertsen’s major client in 1999-2002. 

F. CUELLAR-ABUNDIZ’S PURPOSEFUL DIRECTION ACTIVITIES

39. A purposeful direction analysis is most often used in

suits sounding in tort, such as fraud. Schwarzenegger, 374 F.3d

at 802.

40. A showing that a defendant purposefully directed his

conduct toward a forum state usually consists of evidence of the

defendant’s actions outside the forum state that are directed at

the forum. Id. at 803. The Supreme Court has held that due

process permits the exercise of personal jurisdiction over a

defendant who “purposefully directs” his activities at residents

of a forum even in the absence of physical contacts with the

forum. Id.

41. Purposeful direction is evaluated under the three-part

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Calder effects test traceable to the Supreme Court’s decision in

Calder v. Jones, 465 U.S.783 (1984). Schwarzenegger, 374 F.3d at

803. Calder stands for the proposition that purposeful availment

is satisfied even by a defendant whose only “contact” with the

forum state is the “purposeful direction” of a foreign act having

effects in the forum state. Id.

42. Under Calder the effects test requires that the

defendant allegedly have (1) committed an intentional act, (2)

expressly aimed at the forum state (3) causing harm that the

defendant knows is likely to be suffered in the forum state. Id.

43. An intentional act requires “something more” than mere

foreseeability in order to justify the assertion of personal

jurisdiction in California over Cuellar-Abundiz. Id. at 805.

44. Intentional act has specialized meaning in the context

of the Calder effects test. Id. at 806.

45. The Restatement Second of Torts defines “act” as an

“external manifestation of the actor’s will and does not include

any of its results, even the most direct, immediate, and

intended. Id. Thus, if the actor, having pointed a pistol at

another, pulls the trigger, the act is the pulling of the trigger

and not the impingement of the bullet upon the other’s person.

46. “Intent” is construed in the context of the

“intentional act” test as referring to an “intent to perform an

actual, physical act in the real world, rather than an intent to

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accomplish a result or consequence of that act.

47. In this case the intentional act is Cuellar-Abundiz’s

filing of a wrongful enforcement action in Mexico express intent

against Lyddon and his business and property in Bakersfield

California, and as co-conspirator with Rocha-Albertsen. CuellarAbundiz initiated the enforcement action on a fraudulent and

illegal promissory note against a former client whom he knew had

the ability to satisfy the note, under circumstances that

Cuellar-Abundiz knew or should have known by reasonable inquiry

of Lyddon which he had a duty to make, would have disclosed the

invalidity and illegality of the note. 

48. Cuellar-Abundiz expressly aimed his tortious acts at

Lyddon, who he knew to be a resident of the Eastern District of

California at Bakersfield.

49. Cuellar-Abundiz caused harm to Lyddon, a former client,

by filing the enforcement action on the false promissory note,

knowing it would cause Lyddon economic harm in the Eastern

District of California, by expending legal fees and resources in

response to the action.

G. CLAIMS ARISING OUT OF DEFENDANTS’ FORUM RELATED

ACTIVITIES

50. The Ninth Circuit relies on a “but for” test to

determine whether a particular claim arises out of forum-related

activities and thereby satisfies the second requirement for

specific jurisdiction. Doe v. Unocal Corp., 248 F.3d 915, 924

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(9th Cir. 2001); Ballad v. Savage, 65 F.3d 1495, 1500 (9th Cir.

1995). In applying this test the issue is whether plaintiff’s

claims would have arisen but for defendants’ contacts with

California. Unocal Corp., 248 F.3d at 924. 

51. But for Rocha-Albertsen’s associations with Baker and

McKenzie, and Rocha-Albertsen’s California relationships and

presence, the attorney-client relationship with Lyddon could not

have been formed or continued over the years. 

H. REASONABLENESS

52. The bare existence of minimum contacts is not

sufficient to allow a court to exercise personal jurisdiction

over a defendant. Unocal Corp., 248 F.3d at 925. A finding that

assertion of jurisdiction is reasonable is also required. Id. 

In other words, once the court concludes that a defendant

purposefully established minimum contacts with a forum state, and

that the claims at issue arose from those contacts, the court

must determine whether the assertion of personal jurisdiction

would comport with traditional notions of fair play and

substantial justice. Id. A finding of defendants’ purposeful

availment in the forum state raises the presumption that

jurisdiction is reasonable. Ballad, 65 F.3d at 1500. 

53. Defendants bear the burden of presenting a compelling

case that the presence of some other considerations would render

jurisdiction unreasonable. Id. (citing, Burger King v.

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Rudzewicz, 471 U.S. 462, 477 (1985).) The factors relevant to

this inquiry may include the following: 

1. The extent of defendant’s purposeful

interjection into the forum state

2. The burden on the defendants

3. The plaintiff’s interest in convenient

and effective relief

4. The most efficient forum for judicial

resolution of the dispute

5. The forum state’s interest in

adjudicating the dispute

6. The extent of the conflict with the

sovereignty of defendant’s state. 

Sher, 911 F.2d at 1364. Looking at these factors it must be

determined whether defendants demonstrated that jurisdiction in

California would be so unreasonable as to violate due process.

54. There is no inequity or unreasonableness in bringing

Rocha-Albertsen and Cuellar-Abundiz, as co-conspirators, into the

Eastern District of California to defend this suit. 

55. Rocha-Albertsen communicated by phone and mail with

Lyddon in Bakersfield, California where Lyddon maintained his

offices. 

56. Any burden on Rocha-Albertsen is not significant since

he was only required to travel to the Eastern District for trial.

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57. The most effective and efficient relief can be obtained

in the Eastern District of California because the Mexican legal

system requires separating the underlying case on the note and

its enforcement and apparently does not recognize applicable

defenses of illegality of the promissory note and fraud in the

execution. 

58. The forum state, California, has a substantial interest

in seeing that its resident, Lyddon, is protected from fraud, an

illegal contract, and breaches of fiduciary duty by RochaAlbertsen to his client, Lyddon. Some of the conduct occurred in

California as described above.

59. The law of Mexico is sufficiently different from and

adverse to the California resident that the forum’s choice of law

rules should be applied to this dispute. 

III. SUPPLEMENTAL JURISDICTION 

60. Title 28 U.S.C. section 1367(a) provides in pertinent

part:

“In any civil action of which the district courts have

original jurisdiction, the district court shall have

supplemental jurisdiction over all other claims that

are so related to the claims in the action within such

original jurisdiction that they form part of the same

case or controversy under Article III of the United

States Constitution.” 

61. Original federal jurisdiction in this action is based

on diversity of citizenship. Lyddon’s state law claims invoke

supplemental jurisdiction and arise from the same case or

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controversy. California choice of law rules govern applicable

substantive law. 

IV. BREACH OF CONTRACT

62. It is well settled that in diversity cases federal

courts must apply the choice-of-law rules of the forum state. 

Darulis v. Garate, 401 F.3d 1060, 1062 (9th Cir. 2005). 

63. Here the evidence supports the finding that RochaAlbertsen and Lyddon intended California law to apply to their

attorney-client relationship dealings as Rocha-Albertsen started

working for Lyddon, a U.S. citizen, an Eastern District of

California resident, while at Baker & McKenzie in Tijuana, which

was affiliated with Baker & McKenzie’s San Diego offices. 

64. Under California law, the elements for a claim for

breach of contract are (1) the existence of a contract, (2)

Plaintiff's performance or excuse for nonperformance, (3)

Defendant’s breach, and (4) damage to Plaintiff. First

Commercial Mortgage Co. v. Reece, 89 Cal. App. 4th 731, 745

(2001) (citing 4 Witkin Cal. Procedure (4th ed. 1997), at § 476,

p. 570).

A. THE EXISTENCE OF AN ATTORNEY-CLIENT CONTRACT BETWEEN

LYDDON AND ROCHA-ALBERTSEN

65. A contract is an agreement to do or not to do a certain

thing and gives rise to an obligation or legal duty that is

enforceable in an action at law. Cal. Civ. Code §1549; Agosta v.

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Astor, 120 Cal. App. 4th 596, 604 (Cal. Ct. App. 2004). 

66. Under California law, the essential elements of a

contract are: 

1. Parties capable of contracting

2. Parties mutual consent

3. A lawful objective and 

4. A sufficient cause or consideration

Cal. Civ. Code §1550; Lopez v. Charles Schwab & Co., Inc., 118

Cal. App. 4th 1224, 1230 (Cal. Ct. App. 2004). 

67. Accompanying every contract is a common-law duty to

perform with care, skill, reasonable expedience, and faithfulness

the thing agreed to be done, and a failure to observe any of

these conditions is a tort, as well as a breach of contract. N.

Am. Chem. Co. v. Superior Court, 59 Cal. App. 4th 764, 774 (Cal.

Ct. App. 1997). This includes the covenant of good faith and

fair dealing that no party will act to deprive the other of the

benefits of the contract.

68. The rule which imposes this duty is of universal

application as to all persons who by contract undertake

professional or other business engagements requiring the exercise

of care, skill, and knowledge; the obligation is implied by law

and need not be stated in the agreement. Id. 

69. Since an attorney undertakes to perform his duties

pursuant to a contract with a client, in California a breach of

contract action exists for legal malpractice. Neel v. Magana,

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Olney, Levy, Cathcart & Gelfand, 6 Cal. 3d 176, 181 (1971); see

also, Lysick v. Walcom, 258 Cal. App. 2d 136, 148 (Cal. Ct. App.

1968). 

70. Legal malpractice consists of the failure of an

attorney to use such skill, prudence, and diligence as lawyers of

ordinary skill and capacity commonly possess and exercise in the

performance of the tasks which they undertake. Id. 

1. CAPACITY

71. A person entirely without understanding has no power to

make a contract of any kind. Cal. Civ. Code §38. In California,

a person lacks capacity if, when entering into the contract, the

person was not mentally competent to deal with the subject of the

contract with a full understanding of his rights. In re Rains,

428 F.3d 893, 901 (9th Cir. 2005)(citing Smalley v. Baker, 262

Cal. App. 2d 824, 832 (Cal. Ct. App. 1968). The test in each

instance is whether the person entering the contract understood

the nature, purpose and effect of that action. Id.

72. There is no issue of capacity in this case. 

2. CONSENT

73. In California, a party’s intent to contract is judged

objectively by the party’s outward manifestation of consent. The

test is what the outward manifestations of consent would lead a

reasonable person to believe. Beard v. Goodrich, 110 Cal. App.

4th 1031, 1038 (Cal. Ct. App 2003). 

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74. The testimony at trial showed that Lyddon and RochaAlbertsen discussed and established an attorney-client

relationship whereby Lyddon was to pay Rocha-Albertsen a monthly

sum in exchange for the legal services Lyddon required. Lyddon

manifested his consent by, in fact, paying Rocha-Albertsen a

monthly sum approximating $2000 and later $2,500, and by

receiving Rocha-Albertsen’s legal services in exchange. RochaAlbertsen manifested consent to this arrangement by accepting the

monthly payments and providing the legal services for Lyddon

throughout his relationship with Lyddon. The attorney-client

contract between Lyddon and Rocha-Albertsen was fully supported

by express consent. 

75. There was no consent or meeting of the minds with

respect to the $500,000 promissory note. The facts show that

Rocha-Albertsen did not discuss the note or its amount with

Lyddon prior to drafting it and did not explain the terms of the

note or the note’s existence to Lyddon before asking Lyddon to

sign it. 

76. The first time Lyddon became aware of the note was when

he was served by Cuellar-Abundiz with the enforcement action

brought on that note in Tijuana, MX. 

77. Lyddon did not expressly or impliedly consent to pay

the $500,000 amount of the note. The promissory note is

unenforceable due to lack of consent and prevents the existence

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of a valid or enforceable contract. 

3. LEGALITY

78. An unenforceable contract is one for the breach of

which neither the remedy of damages nor the remedy of specific

performance is available, but which is recognized in some other

way as creating a duty of performance, though there has been no

ratification. Restat 2d of Contracts, § 8 (1981). 

79. It is undisputed that the original attorney-client

contract between Rocha-Albertsen and Lyddon was lawful. 

80. Under both California and Mexican law the promissory

note was illegal because: (a) it was procured by fraud (breach of

fiduciary duty to client to disclose the contents and meaning of

the note) in the execution; (b) it exceeded the maximum

percentage for a real estate transaction that an attorney in

Mexico may earn; (c) it was procured without knowledge and

informed consent of the client-promissor; (d) it was procured by

self-dealing in violation of the attorney’s duty to fully inform

his client about the meaning and legal consequences of the

document the attorney prepared for his client to sign. 

4. CONSIDERATION

81. At minimum, consideration received must consist of a

present, actual benefit bestowed or a detriment suffered. 

Johnson v. Unocal Corp., 21 Cal. App. 4th 310, 316 (Cal. Ct. App.

1993). The adequacy of consideration is tested as of the time of

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the making of the contract. A.J. Industries, Inc. v. Ver Halen,

75 Cal. App. 3d 751, 762 (Cal. Ct. App. 1977). 

82. There is no dispute that consideration was present in

the original attorney client contract between Lyddon and RochaAlbertsen for their monthly services for flat fee arrangement. 

There was no consideration for the $500,000 promissory note. At

the time the note was signed, Lyddon did not owe Rocha-Albertsen

$500,000 for legal services performed. Rocha-Albertsen was paid

monthly or periodically and as he performed services. The Cabo

San Lucas real estate transactions were a regular part of the

Rocha-Albertsen’s and Lyddon’s ongoing legal business. There was

no oral agreement or written contract to pay Rocha-Albertsen 18%

of the sale price of real property which was the subject of past

services performed by Rocha-Albertsen for Lyddon as to the

subject real property, which had been paid. The note was never

discussed or agreed to by Rocha-Albertsen and Lyddon. 

5. LYDDON’S PERFORMANCE 

83. Where performances are to be exchanged under an

exchange of promises, and the whole of one party’s performance 

can be rendered at one time, it is due at one time, unless the

language or circumstances indicate the contrary. Restat 2d of

Contracts, § 8 (1981) An offer of performance is of no effect if

the person making it is not able and willing to perform according

to the offer. Cal. Civ. Code §1495. 

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84. The facts establish that Lyddon and Rocha-Albertsen

agreed to render their respective performances in installments

throughout their attorney client relationship. Lyddon performed

his express agreement to pay Rocha-Albertsen monthly for his

legal services by making monthly attorneys fees payments and

periodic payments of expense reimbursements. Lyddon performed

the payment obligations on his part to be performed, under the

terms of his legal services contract with Rocha-Albertsen. 

6. BREACH BY ROCHA-ALBERTSEN

85. A plaintiff may establish a breach by showing that the

defendant failed to perform an obligation under the contract

without justification or excuse. Erich v. Granoff, 109 Cal. App.

3d 920, 930 (Cal. Ct. App. 1980)(The unjustified failure of an

obligor to perform a contract constitutes a breach of that

contract).

86. As part of an attorneys’ professional obligations, an

attorney is required to keep a client reasonably informed about

significant developments and all material terms relating to the

employment, representation, or performance of legal services for

a client including promptly complying with reasonable requests

for information and copies of significant documents when

necessary to keep the client so informed. Chambers v. Kay, 29

Cal. 4th 142, 157 (2002)(citing State Bar of California, Cal.

Bar. Rules, Prof. Conduct, 3-500 (2006); Bus. & Prof. Code

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§6068). Mexican law is not different. 

87. An attorney owes a client a fiduciary duty of the

highest good faith and fair dealing. 

88. An attorney has an ethical duty to disclose any matter

to a client that could impact or damage a client. 

89. Rocha-Albertsen breached all his fiduciary duties of

good faith and fair representation to Lyddon by providing an

illegal note to Lyddon, intentionally withholding disclosure of

its contents and without explanation of why Lyddon should sign

such a note, with the intent to deceive Lyddon. Even if the

relationship was winding down, Rocha-Albertsen owed a duty of

honesty and a fiduciary duty as to matters which were subject of

the legal representation and with respect to which RochaAlbertsen was asking Lyddon to contract. Rocha-Albertsen at the

barest minimum owed a duty to Lyddon that Lyddon had a right to

consult an independent attorney before contracting with his

attorney (present or former) for a promissory note.

90. An agent is entitled to no compensation for conduct

which is a breach of his duty of loyalty, if such conduct

constitutes a willful and deliberate breach of a contract of

service. Rocha-Albertsen is not entitled to compensation even

for properly performed services for which no compensation is

apportioned. 11-60, Corbin on contracts §60.9, Restatement

Second of Agency §569 (1957). Rocha-Albertsen had no evidence

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that preponderates to establish the basis for $500,000 of legal

services. 

91. Rocha-Albertsen was never entitled to $500,000 from

Lyddon’s legal services or for any other reason. 

92. Rocha-Albertsen’s evidence does not establish that he

was owed any amount for unpaid attorney’s fees from Lyddon, over

and above the $20,000 Lyddon paid him. 

93. The relation between an attorney and client is a

fiduciary relation of the highest character. Lewin v. Anselmo, 56

Cal. App. 4th 694, 701 (Cal. Ct. App. 1997). A transaction

between an attorney and client which occurs during the

relationship and which is advantageous to the attorney is

presumed to violate that fiduciary duty and to have been entered

into without sufficient consideration under undue influence. Id. 

The facts prove by clear and convincing evidence that RochaAlbertsen breached his fiduciary duties as an attorney to Lyddon,

his client. 

94. There was no consideration for the disputed promissory

note which was procured by deception and under undue influence in

a transaction that was not conducted at arm’s length. 

95. The promissory note is void, illegal, and unenforceable

by virtue of fraud in the execution. 

7. DAMAGE TO LYDDON

96. For breach of an obligation arising from contract, the

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measure of damages except where otherwise expressly provided by

this code, is the amount which will compensate the party

aggrieved for all detriment proximately caused thereby, or which

in the ordinary course of things would be likely to result

therefrom. Cal. Civ. Code §3300.

97. The basic object of damages is compensation, and in the

law of contracts, the theory is that the party injured by a

breach should receive as nearly as possible the equivalent of the

benefits of performance. Aurbach v. Great W. Bank, 74 Cal. App.

4th 1172, 1191 (Cal. Ct. App. 1999)(citing, Brandon & Tibbs v.

George Kevorkian Accountancy Corp., 226 Cal. App. 3d 442, 455

(Cal. Ct. App. 1990).) Contractual damages are of two types:

general damages and special damages. Lewis Jorge Construction

Management v. Pomona Unified School District, 34 Cal. 4th 960,

968 (2004). 

98. General damages are often characterized as those that

flow directly and necessarily from a breach of contract, or that

are a natural result of the breach. Id. General damages are

foreseeable at the time the parties entered into the contract. 

Id. (general damages are often said to be within the

contemplation of the parties, because their occurrence is

sufficiently predictable.)

99. Unlike general damages, special damages are those

losses that do not arise directly and inevitably from any similar

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breach of any similar agreement. Id. Instead, they are

secondary or derivative losses arising from circumstances that

are particular to the contract or to the parties. Id. Special

damages are recoverable if the special or particular

circumstances from which they arise were actually communicated to

or known by the breaching party (a subjective test) or were

matters of which the breaching party should have been aware at

the time of contracting (an objective test). 

100. In this case the damage to Lyddon is comprised of the

expense for attorneys, travel, and lodging incurred in defending

against Rocha-Albertsen’s transfer of the note to Cuellar-Abundiz

and the conspiracy with Cuellar-Abundiz to obtain a personal

financial advantage over Lyddon, whereby Rocha-Albertson would

obtain at least $200,000 to satisfy his debts to Cuellar-Abundiz

and Cuellar-Abundiz would first receive one-half or $250,000 of

the proceeds, his debt from Rocha-Albertsen, and an additional

one-half of the net proceeds. 

101. It was incumbent on Lyddon to prove the amount of

actual damages with admissible evidence. He did not offer such

proof.

V. FRAUD

102. The elements of fraud are 1. a misrepresentation 2.

knowledge or falsity 3. with the intent to defraud 4. justifiable

reliance on the fraud and 5. resulting damage. Robinson

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Helicopter Co., v. Dana Corp., 34 Cal. 4th 979, 990 (Cal. 2004). 

103. The relationship of an attorney and client is one of

agent and principal. Shafer v. Berger, Khan, Shafton, Moss,

Figler, Simon, & Gladstone, 107 Cal. App. 4th 54, (Cal. Ct. App.

2003). As with other types of agency relationships, the law of

misrepresentation applies to lawyers. Id. If activities of a

non lawyer in the same circumstances would render the non lawyer

civilly liable, the same activities by a lawyer in the same

circumstances generally render the lawyer liable. Id. 

104. Where material facts are known to one party and not to

the other, failure to disclose them is not actionable fraud

unless there is some relationship between the parties which gives

rise to a duty to disclose such known facts. LiMandri v.

Judkins, 52 Cal. App. 4th 326, 337 (Cal. Ct. App. 1997). There

are four circumstances in which non disclosure or concealment may

constitute actionable fraud: (1) when the defendant is in a

fiduciary relationship with the plaintiff, (2) when the defendant

had exclusive knowledge of material facts not known to plaintiff

(3) when defendant actively conceals a material fact from the

plaintiff and (4) when the defendant makes partial

representations but also suppresses some material facts. 

Deteresa v. ABC, 121 F.3d 460, 467 (9th Cir. 1997); LiMandri, 52

Cal. App. 4th at 336. 

105. The first circumstance requires a fiduciary

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relationship, it is present here as there is no evidence that

preponderates to prove the attorney-client relationship between

Lyddon and Rocha-Albertsen had ended. 

106. There is evidence that independently establishes a

fiduciary duty between Rocha-Albertsen and Lyddon on September

24, 2004, because Lyddon had a long standing attorney-client

relationship with Rocha-Albertsen, a personal friendship, and

trusted Rocha-Albertsen as Lyddon’s advisor. 

107. Each of the other three circumstances presupposes the

existence of some other relationship between the plaintiff and

defendant in which a duty to disclose can arise. Deteresa, 121

F.3d at 467 (internal quotations omitted). Such relationships

“are created by transactions between parties from which a duty to

disclose facts material to the transaction arises under certain

circumstances. Id. (parties entering into any kind of a

contractual agreement). 

108. Rocha-Albertsen prepared the note for $500,000, an

amount to which he was not entitled. He had exclusive knowledge

of the facts and knew Lyddon did not have such knowledge, because

Rocha-Albertsen concealed the facts from Lyddon. Rocha-Albertsen

did not explain the note to Lyddon or tell Lyddon that RochaAlbertsen had prepared such a note. Rocha-Albertsen placed the

note in with other papers to deceive Lyddon into thinking it was

part of another transaction. 

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109. Rocha-Albertsen had not performed legal services and

had no other basis to then claim a $500,000 obligation from

Lyddon.

110. Rocha-Albertsen committed fraud against Lyddon which

induced Lyddon to execute the promissory note. 

111. The September 24, 2002, promissory note is void and

unenforceable. 

112. Such fraud in the execution is a complete defense to

enforcement of the assigned promissory note against the original

promissee, Rocha-Albertsen, and the current holder of the note,

Cuellar-Abundiz. 

A. THE PROMISSORY NOTE IS INVALID UNDER THE UNIFORM

COMMERCIAL CODE 

113. A “note” is an irrevocable promise to pay made by the

maker. See, U.C.C. § 3-104(e) (2005). An instrument is a “note”

if it is a promise. Id. The right to enforce the obligation of

a party to pay a note is subject to the defense of fraud that

induced the obligor to sign the instrument with neither knowledge

or reasonable opportunity to learn of its character or its

essential terms. U.C.C. § 3-305(a)(1)(iii) (2005). 

114. A party to a contract may rescind the contract “if the

consent of the party rescinding was obtained through fraud

exercised by the connivance of the party as to whom he rescinds

or of any other party to the contract jointly interested with

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such a party.” Cal. Civ. Code § 1689 (2006). 

115. The testimony in this case showed that Rocha-Albertsen

procured the promissory note by fraudulent concealment and

misrepresentation and without Lyddon’s knowledge or informed

consent. In fraudulently inducing Lyddon to sign the note,

Rocha-Albertsen breached his duty to fully inform Lyddon about

the meaning and legal consequences of the document that RochaAlbertsen prepared. 

116. Lyddon’s testimony proved he would never have agreed

to sign the note, as it exceeded the maximum percentage for a

real estate transaction percentage that an attorney in Mexico may

earn. The note was not intended as a fully integrated instrument

expressing the full intent of all parties as it was procured by

fraud. Because the note was procured by fraud, the promissory

note is void.

VI. CUELLAR-ABUNDIZ CANNOT LEGALLY ENFORCE THE PROMISSORY NOTE

117. To become a holder in due course of an instrument,

such as a promissory note, under California Commercial Code

§ 3302(a)(2) the alleged holder must (a) give value; (b) in good

faith; (c) without notice that the instrument is overdue, or has

been dishonored, or that there is an uncured default with respect

to payment of another instrument issued as part of the same

series; (d) without notice that the instrument contains an

unauthorized signature or has been altered; (e) without notice of

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a claim to the instrument described in UCC § 3306; and (f)

without notice that a party has a defense or claim in recoupment

described in UCC § 3305(a). 

118. Here, California Commercial Code § 3305(a) provides:

except as stated in subdivision (b) (not here applicable), the

right to enforce the obligation of a party to pay an instrument

is subject to all of the following:

(1) a defense of the obligor (Lyddon) based on . .

. (B) ...illegality of the transaction which, under

other law, nullifies the obligation of the obligor; (C)

fraud that induced the obligor to sign the instrument

with neither knowledge nor reasonable opportunity to

learn of its character or its essential terms...

119. Although Cuellar-Abundiz does not qualify as a holder

in due course due to his failure to inquire of Lyddon about the

note, which was highly suspicious, he is subject to the defense

of illegality of the note and also is subject to the defense of

fraud in the execution, pursuant to § 3305(a)(1)(B) for all the

reasons stated above.

120. Here, Cuellar-Abundiz was on inquiry notice as to the

validity and circumstances under which Rocha-Albertsen acquired

the note from Lyddon. He cannot take the promissory note as a

bonafide purchaser for value without notice. 

121. The evidence shows that the circumstances of the

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enforcement agreement between Rocha-Albertsen and Cuellar-Abundiz

were such that Cuellar-Abundiz became a willing participant in an

intentional plan to enforce an illegal and fraudulent note

against Lyddon, whom he knew to be a resident of the State of

California and the United States. 

122. Cuellar-Abundiz was not a bonafide purchaser without

notice of the underlying fraud and deception due to his duty of

inquiry as to the circumstances of the execution and the illegal

nature of the promissory note. The 18% fee for real estate

services made the note independently unenforceable by him in any

status, including that as assignee, alleged holder in due course,

or purchaser for value without notice. Where the underlying

obligation is void because induced by fraud in the execution and

illegal on independent grounds because not permitted by Mexican

law, even a bonafide purchaser for value claiming to be a holder

in due course cannot enforce the instrument. C.I.T. Corp. v.

Panac, (1944) 25 Cal.2d 547, 548-549; see also Danning v. Bank of

America, (1984) 151 Cal.App.3d 961, 978. 

123. Here, because Rocha-Albertsen presented Lyddon a

document for a signature in blank which prevented Lyddon from

recognizing the nature or contents of the document, while

breaching Rocha-Albertsen’s fiduciary duty to disclose its

meaning and contents, Lyddon was not negligent in failing to

learn the nature of the document. The document is void for fraud

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in the execution. 

124. Fraud in the execution occurs when a party is deceived

as to the very nature of the agreement so the party does not know

what he or she is signing or does not intend to enter into a

contract at all. Rosenthal v. Great Western Fin. Securities

Corp., (1996) 14 Cal.4th 394, 419-420. Both conditions have been

proved here. Fraud in the execution results in the contract

being void ab initio. Rosenthal, 14 Cal.4th at p. 419-20. 

VII. DETERMINATION OF FOREIGN LAW

125. Defendants argue that Lyddon has the burden of

producing evidence of Mexican law to the effect that the concept

of bona fide purchaser for value is also a Mexican legal

principle applicable in this matter. 

126. A party who intends to raise an issue concerning the

law of a foreign country shall give notice by pleadings or other

reasonable written notice. FED. R. CIV. P. 44.1. The court, in

determining foreign law, may consider any relevant material or

source, including testimony, whether or not submitted by a party

or admissible under the Federal Rules of Evidence. Id. The

court’s determination shall be treated as a ruling on a question

of law. Id. 

127. Defendants filed a notice pursuant to Fed. R. Civ. P.

44.1 of their intent to submit “Article 8 of the Law for the

Schedule of Fees for the State of Baja California” governing

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attorney client fees in Tijuana, MX. 

128. Defendants argue that the state law causes of action

do not apply because the events underlying the causes of action

occurred entirely in Mexico. 

129. Defendants also argue that Lyddon has the burden of

showing whether the concept of “purchaser for value” exists under

Mexican law (presuming that Mexican law applies) and whether

Cuellar-Abundiz qualifies as a “purchaser for value” of the

promissory note under Mexican law. 

130. However, Defendants did not file a Rule 44.1 notice

for any other matters pertaining to the application of Mexican

law even though they raise arguments that Mexican law should

apply. Defendants did not submit evidence of any Mexican law

concerning a bonafide purchaser or holder in due course. 

Defendants fail to meet their burden of proof on this issue. 

131. It has been determined that the forum court’s state

choice of law principles choose the law of California which

pertained to Rocha-Albertsen’s dealings as attorney-client and

the transaction here at issue. There is no need to apply the law

of Mexico as to commercial instruments. 

132. Defendants appear to have provided what seems to be a

full Spanish language version of the Law for the Schedule of Fees

for the State of Baja California. No party provided a complete

translation. In the Spanish version there are four chapters and

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33 articles in the first chapter. Defendants only translated a

fraction of the Spanish version into English. This law cannot be

applied, as a complete and accurate translation, has not been

provided. 

VIII. CONSPIRACY

133. The elements of an action for civil conspiracy are: 1.

formation and operation of the conspiracy by an agreement between

two or more persons to commit an unlawful act or a lawful act in

an unlawful manner; and 2. damage resulting to plaintiff; 3. from

a wrongful act done in furtherance of a common design. Rusheen

v. Cohen, 37 Cal. 4th 1048, 1062 (Cal. 2006). 

134. A civil conspiracy does not give rise to a cause of 

action unless an independent civil wrong has been committed. Id. 

135. Personal jurisdiction may be established based on acts

by co-conspirators. 1 James Wm. Moore et al., MOORE’S FEDERAL

PRACTICE ¶ 108.42 (3rd ed. 2006). 

136. The general rule is that a plaintiff must make a prima

facie showing of civil conspiracy to establish personal

jurisdiction over a non resident. Schwarzer, Tashima, &

Wagstaffe, CAL. PRAC. GUIDE: FED. CIV. PRO. BEFORE TRIAL ¶ 3:88

(The Rutter Group 2006); see also, Second Amendment Found. v.

United States Conference of Mayors, 274 F.3d 521, 524 (DC Cir.

2001). 

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Abundiz agreement with Rocha-Albertsen to participate in wrongful

enforcement of an illegal and fraudulent promissory note against

Lyddon. 

138. Even though Cuellar-Abundiz denied knowledge about the

manner in which Rocha-Albertsen obtained the note from Lyddon,

the inquiry does not end there. 

139. The evidence shows that Rocha-Albertsen owed an over

four year old debt to Cuellar-Abundiz amounting to more than

$100,000 for legal services. 

140. Rocha-Albertsen was in dire financial straits and

could not pay the amount and may never be able to pay the amount. 

141. Cuellar-Abundiz’s office continued to send RochaAlbertsen invoices for the debt through November 2002. 

142. In November 2002, Rocha-Albertsen sent to CuellarAbundiz’s office to verify that the Lyddon note was a legally

enforceable document.

143. Cuellar-Abundiz reviewed the note without in depth

inquiry as to the basis for the amount of the obligation of

$500,000 from Lyddon, Cuellar-Abundiz’s former client.

144. Rocha-Albertsen informed Cuellar-Abundiz that it was

“to cover a final settlement of legal fees” between RochaAlbertsen and Lyddon.

145. At that point, Rocha-Albertsen and Cuellar-Abundiz

entered into a contingency fee arrangement that involved

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assigning Lyddon’s note to Cuellar-Abundiz, who would seek

enforcement of the note.

146. The arrangement provided for 50% of the note

($250,000) to go to Cuellar-Abundiz to enforce the note in

Mexican court; the next proceeds to satisfy Rocha-Albertsen’s

prior debt to Cuellar-Abundiz from the remainder 50% (an estimate

of over $100,000), and remainder of the note to go to RochaAlbertsen.

147. In total, Cuellar-Abundiz would be receiving over

$350,000 for a debt estimated at some amount over $100,000.

148. When Cuellar-Abundiz took the note, he had knowledge

that it was owed by Lyddon, a former client.

149. Cuellar-Abundiz had knowledge that Lyddon had the

ability to make good on the note, unlike Rocha-Albertsen who was

insolvent.

150. Cuellar-Abundiz unreasonably failed to then contact

Lyddon to inquire about the note and if Lyddon would voluntarily

pay it.

151. Instead, Cuellar-Abundiz embarked upon a scheme with

Rocha-Albertsen to take the note by assignment and to serve it on

an unsuspecting Lyddon as part of a wrongful enforcement of the

note.

152. Neither Defendant provided any testimony to explain

why Rocha-Albertsen felt compelled to verify the “validity” of

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the note with Cuellar-Abundiz on November 12, 2002, if Lyddon had

knowingly and voluntarily executed the note. It would have been

a single matter to telephone Lyddon to confirm payment of the

note. 

153. The evidence conclusively establishes that CuellarAbundiz conspired with Rocha-Albertsen to surreptitiously set up

the service of the complaint on Lyddon in the note enforcement

suit in Tijuana outside Rocha-Albertsen’s law office in February

2003.

IX. FINANCIAL ABUSE OF AN ELDER; WELFARE CODE §15610.30

154. “Financial abuse” of an elder occurs when a person

does the following: 

1. Takes or retains real or personal

property of an elder for wrongful use or

with intent to defraud or both.

2. Assists in taking or retaining real or

personal property of an elder for a

wrongful use or with intent to defraud

or both. 

Cal. Wel. & Inst. Code §15610.30. A person is deemed to have

taken or retained property for wrongful use if, among other

things, the person take or retains possession of property in bad

faith. Id. A person or entity is deemed to have acted in bad

faith if the person knew or should have known that the elder had

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 3333.2 (b) states: “In no action shall the amount of 2

damages for non economic losses exceed two hundred and fifty

thousand dollars ($250,000).

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the right to have the property transferred or made readily

available to the elder or to his representative. Id. A person

is deemed to or should have known of the elder’s right if, on the

basis of information received by the person, it is obvious to a

reasonable person that the elder has such a right. Id. 

155. “Representative” means a person that is either: 1. a

conservator, trustee, or other representative of the estate of an

elder or dependent adult or 2. an attorney in fact of an elder

who acts within the authority of the power of attorney. Id. 

156. Where it is proven by clear and convincing evidence

that a defendant is liable for the financial abuse as defined in

§15610.30 and that defendant has been guilty of recklessness,

oppression, fraud, or malice in the commission of this abuse in

addition to all other remedies otherwise provided by law a court

shall award to the plaintiff reasonable attorney’s fees and

costs. Covenant Care, Inc. v. Superior Court, 32 Cal. 4th 771,

780 (Cal. 2004). 

158. The damages recovered shall not exceed the damages

permitted to be recovered pursuant to subdivision (b) of §3333.2

of the civil code. Id. 2

159. Elder abuse triggering a remedy under §15610.30 and

its heightened remedy provisions entails by its nature egregious

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conduct. Id. at 789. 

160. The obtaining of a fraudulent and illegal promissory

note does not meet the requirements for elder abuse, RochaAlbertsen did not take or retain real or financial property of

Lyddon. 

X. VIOLATION OF CA BUSINESS PROFESSIONS CODE §17200

161. California Business and Professions Code section 17200

states: 

[Unfair] competition shall mean and include any

unlawful, unfair or fraudulent business act or

practice and unfair, deceptive, untrue or

misleading advertising . . . .

162. The purpose of the Unfair Competition Law (UCL) is

protecting against conduct that “significantly threatens or harms

competition.” Ariz. Cartridge Remanufacturers Ass’n v. Lexmark

Int’l, Inc., 421 F.3d 981, 986 (9th Cir. 2005) [hereafter Ariz.

Cartridge] (citing Cel-Tech Commc’ns, Inc. v. L.A. Cellular Tel.

Co., 20 Cal. 4th 163, 180 (Cal. 1999)). This includes the

public’s right to protection from fraud and deceit. Ariz.

Cartridge, 421 F.3d at 986 (citation omitted). The scope of

section 17200 is broad, allowing courts to enjoin any unfair

business conduct in any context it might occur. Id. (citation

omitted).

163. Section 17200 provides three distinct types of conduct

that constitutes unfair competition: 1) unlawful, 2) unfair, or

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3) fraudulent. See Lippitt v. Raymond James Fin. Servs., 340

F.3d 1033, 1043 (9th Cir. 2003); Cel-Tech Commc’ns, 20 Cal. 4th

at 180. 

164. A business practice can be unfair or deceptive without

being unlawful and vice versa. Lippitt, 340 F.3d at 1043.

165. The unlawful prong uses violations of other laws and

treats them as unlawful practices that are independently

actionable under the UCL. Chabner v. United of Omaha Life Ins.

Co., 225 F.3d 1042, 1048; Cel-Tech Commc’ns, 20 Cal. 4th at 180.

166. The unfair prong provides courts “broad discretion to

prohibit new schemes to defraud.” Paulus v. Bob Lynch Ford,

Inc., 139 Cal. App. 4th 659, 682 (Cal. Ct. App. 2006); People ex.

rel. Lockyer v. Fremont Life Ins. Co., 104 Cal. App. 4th 508, 515

(Cal. Ct. App. 2002). 

167. The California Supreme Court has not given a

definition as to what is unfair in the context of the UCL for

injuries to consumers. See Fremont Life Ins. Co., 104 Cal. App.

4th at 515. However, unfair business practices will include

unconscionable provisions in standardized agreements. Id. at

516.

168. The fraud prong of the UCL is not like common law

fraud. Id. The test is whether or not “the public is likely to

be deceived.” Id. (citation omitted). Thus, a section 17200

violation can be shown even if no one was actually deceived,

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relied upon the fraudulent act, or suffered any damage. Id. at

517.

169. This case is a straight common law fraud case. No

competition is present. An isolated instance of fraud under the

circumstances proved here does not satisfy the purpose of

Business and Professions Code § 7200. There is no unfair

business practice within the meaning of the law. 

XI. UNAUTHORIZED PRACTICE OF THE LAW

170. California Business and Professions Code Section

6126(a) states: 

(a) Any person advertising or holding himself or

herself out as practicing or entitled to practice law

or otherwise practicing law who is not an active member

of the State Bar, or otherwise authorized pursuant to

statute or court rule to practice law in this state at

the time of doing so, is guilty of a misdemeanor . . .

If Defendant violated this provision, he is liable under section

17200. See Chabner, 225 F.3d at 1048.

171. The predominant majority of legal work was performed

in Mexico where Rocha-Albertsen was licensed to practice. This

claim fails.

XII. REMEDIES UNDER SECTIONS 17203 AND 17535

172. Section 17203, the statutory authorization for relief

under the UCL, states:

Any person who engages, has engaged, or proposes to

engage in unfair competition may be enjoined in any

court of competent jurisdiction. The court may make

such orders or judgments, including the appointment of

a receiver, as may be necessary to prevent the use or

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employment by any person of any practice which

constitutes unfair competition, as defined in this

chapter, or as may be necessary to restore to any

person in interest any money or property, real or

personal, which may have been acquired by means of such

unfair competition.

Relief is in the form of an injunction against the offending

party, and restitution damages. See Korea Supply Co. v. Lockhead

Martin Corp., 29 Cal. 4th 1134, 1147-48 (Cal. 2003).

174. Section 17535 is the general remedy of injunctive

relief against an entity for false advertising. It states:

Any person, corporation, firm, partnership, joint stock

company, or any other association or organization which

violates or proposes to violate this chapter may be

enjoined by any court of competent jurisdiction.

175. Plaintiff has not proven the conduct complained of in

any way constitutes “competition” or that it had any anticompetitive effect. 

176. Injunctive relief may not be issued in this case. 

XIII. DECLARATORY RELIEF

177. The Declaratory Judgment Act provides that “in a case

of actual controversy within its jurisdiction... any court of the

United States... may declare the rights and other legal relations

of any interested party seeking such declaration, whether or not

further relief is or could be sought.” 28 U.S.C. §2201(a). Any

such declaration shall have the force and effect of a final

judgment or decree and shall be reviewable as such. Id. Before

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declaratory relief can be granted, federal subject matter

jurisdiction requirements must be satisfied. Government Emples.

Ins. Co. v. Dizol, 133 F.3d 1220, 1222-1223 (9th Cir. 1998)

(citing, Skelly Oil Co. v Phillips Petroleum Co., 339 US 667, 671

(1950)). The court's jurisdiction in this case is based

exclusively on diversity of citizenship.

178. In determining whether declaratory relief can be

granted, an inquiry must be made as to whether there is a case of

actual controversy between the parties. Principal Life Ins. Co.

v. Robinson, 394 F.3d 665, 669 (9th Cir. 2005); American States

Ins. Co. v. Kearns, 15 F.3d 142, 144 (9th Cir. 1994). Here, the

controversy is actual and substantial. It is rife for decision. 

Kearns, 15 F.3d at 144 (under Article III of the Constitution, it

must be ripe for review). Id. 

179. Here, Plaintiff seeks a declaration of the rights and

duties of the parties respecting the promissory note. Plaintiff

is entitled to the court’s judgment that the September 24, 2002,

promissory note is void ab initio for fraud in the execution,

illegality, and is unenforceable by any party. 

CONCLUSION

1. Judgment shall be entered for Plaintiff John Lyddon

against Defendants Rocha-Albertsen and Cuellar-Abundiz.

2. The September 24, 2002 promissory note executed by

John Lyddon, as promissor, is void and unenforceable. 

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3. Plaintiff John Lyddon shall recover costs of suit from

Defendants Rocha-Albertsen and Cuellar-Abundiz. 

4. Plaintiff shall lodge a form of judgment consistent with

these findings with the court within five days following service

of these findings. 

IT IS SO ORDERED.

Dated: October 13, 2006 /s/ Oliver W. Wanger 

dd0l0 UNITED STATES DISTRICT JUDGE

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