Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-01224/USCOURTS-cand-3_06-cv-01224-1/pdf.json

Nature of Suit Code: 370
Nature of Suit: Other Fraud
Cause of Action: 28:1332 Diversity-Fraud

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Stipulation for Filing of First Amended Complaint & Order 

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Steven Riess, SBN 100131 

Law Offices of Steven Riess 

456 Montgomery Street, 20th Floor 

San Francisco, CA 94104 

(415) 989-1970 

stevenriess@stevenriess.com 

Attorney for Morris

 

Julie Ann Morris, 

 Plaintiff, 

vs. 

ChoicePoint Services, Inc., EquiSearch Services, 

Inc., 

 Defendants.

Case No. C 06-01224 SC 

STIPULATION FOR FILING OF 

FIRST AMENDED COMPLAINT; 

PROPOSED ORDER 

COMPLAINT FILED: January 18, 2006

 It is hereby stipulated by and between the parties, through their respective attorneys of 

record, that plaintiff may file a First Amended Complaint, a copy of which is attached. It is further 

stipulated that defendants ChoicePoint Services, Inc. and EquiSearch Services, Inc. waive notice 

and service of the First Amended Complaint. 

Dated: May 15, 2006 /s/ 

 Steven Riess 

 Attorney for Plaintiff Morris 

Dated: May 12, 2006 /s/ 

 James W. Poindexter 

 Attorney for defendants ChoicePoint 

 and EquiSearch 

 It is so ordered that plaintiff may file the First Amended Complaint. 

Dated: 

 Judge Samuel Conti 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA

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Steven Riess, SBN 100131 

Law Offices of Steven Riess 

456 Montgomery Street, 20th Floor 

San Francisco, CA 94104 

(415) 989-1970 Telephone 

(415) 398-2820 FAX 

stevenriess@stevenriess.com 

Attorney for Plaintiffs

 

Julie Ann Morris and The Morris Family QTIP 

Trust, by and through its trustees, Julie Ann Morris

and Teresa Morris Franc, 

 Plaintiffs, 

vs. 

ChoicePoint Services, Inc., EquiSearch Services, 

Inc., Lee Rothman, and Mellon Investor Services, 

LLC, 

 Defendants. 

Case No. C 06-01224 SC 

FIRST AMENDED COMPLAINT FOR: 

1. Violation of Unclaimed Property Law 

 (CCP § 1500 et seq.) 

2. Rescission for Illegality (CC § 1670.5) 

3. Rescission for Mutual Mistake 

4. Rescission for Unilateral Mistake 

5. Conversion 

6. Elder Financial Abuse (W & I § 

 15610.30 

7. Fraud 

8. Negligent Misrepresentation 

9. Violation of Unlawful Competition Law

 (B & P § 17200 et seq.) 

DEMAND FOR JURY TRIAL 

COMPLAINT FILED: January 18, 2006

JURISDICTION 

 1. Plaintiff Julie Ann Morris (“Morris”) is, and at all times mentioned herein, was a 

citizen of California. Plaintiff The Morris Family QTIP Trust (“QTIP Trust”) is a testamentary trust 

created, existing, and administered under the laws of California. Defendant ChoicePoint Services, 

Inc. (“ChoicePoint”) is a Georgia corporation with its principle place of business in Alpharetta, 

Georgia. Defendant EquiSearch Services, Inc. (“EquiSearch”) is a Georgia corporation with its 

principle place of business in White Plains, New York. Defendant Lee Rothman (“Rothman”) is a 

natural person; plaintiffs believe that Rothman is a citizen of the New York. Defendant Mellon 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA – SAN FRANCISCO DIVISION

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Investor Services, LLC (“Mellon”) is a limited liability corporation with its principle place of 

business in Ridgefield Park, New Jersey. The jurisdiction of this court over the subject matter of 

this action is based on 28 USC § 1332. The amount in controversy exceeds, $75,000, exclusive of 

interest and costs. 

PRELIMINARY ALLEGATIONS 

 2. At all times mentioned, Morris was a natural person over the age of 18 years. The 

QTIP Trust is a testamentary trust established under the laws of California. The co-trustees of the 

QTIP Trust are Morris and Teresa Morris Franc (“Franc”), who bring this action in their 

representative capacities as co-trustees. Morris also brings this action on her own behalf as an 

individual and as a beneficiary of the QTIP Trust. 

 3. The true names and capacities of other defendants are unknown, and plaintiffs will 

amend this complaint to show their true names and capacities when this information is ascertained. 

Each such other defendant is in some manner responsible for the damages alleged pursuant to each 

cause of action asserted, either through its own conduct, or vicariously through the conduct of 

others. All further references in this complaint to any of the named defendants, or to defendants 

generally, shall include such other defendants. 

 4. At all times mentioned, each defendant was an agent, servant, employee, partner, and 

joint venturer of each and every other defendant and was acting within the course and scope of this 

relationship. The conduct of each defendant was authorized and ratified by each and every other 

defendant. 

 5. This court is the proper court in which to bring this action because plaintiffs 

sustained injury within its jurisdiction and the events giving rise to this action occurred here. 

GENERAL ALLEGATIONS 

 6. Paragraphs 1 through 5 are incorporated by reference. 

 7. Plaintiff Morris was born on June 20, 1935 and was at least 67 years old at the time 

of the events alleged in this complaint. Morris is a widow and lives alone in Mill Valley, California; 

Morris’s husband, James M. Morris, M.D. (“Dr. Morris”), died on March 7, 1993. For many years 

prior to his death, Dr. Morris conducted a medical practice located at 533 Parnassus Avenue/103U, 

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in San Francisco. Morris and Dr. Morris resided together at the family home at 255 Hillside 

Avenue, in Mill Valley, and Morris continues to reside there. Morris and Dr. Morris raised four 

children. During their 35 years of marriage, Dr. Morris attended to the family’s finances; Morris did 

not work outside the home and did not participate in managing or monitoring the family’s assets. In 

or about 1985, Dr. Morris purchased 2,600 shares of Northern Empire Bancshares (hereafter 

Northern Empire Bancshares shall be referred to as “NEB” and the shares of stock as “the Stock”). 

The Stock was purchased with community property assets of Morris and Dr. Morris and was owned 

as community property. Morris believes and thereon alleges that the shareholder records of NEB 

showed the registered owner of the stock as Dr. Morris. Morris believes and thereon alleges that the 

shareholder records of NEB listed Dr. Morris’s medical office as the address of the registered 

shareholder. 

 8. In late 1992, Dr. Morris became gravely ill. On or about January 19, 1993, 

approximately six weeks before the death of Dr. Morris, Morris and Dr. Morris created and 

executed The Morris Family Trust, Dated January 19, 1993. Morris and Dr. Morris were designated 

co-trustees. On January 21, 1993, Morris and Dr. Morris executed an Assignment whereby they 

transferred ownership of various assets owned by them to The Morris Family Trust. Included 

among these assets was ownership of the Stock. On January 22, 1993, Morris and Dr. Morris 

executed a First Amendment to the Morris Family Trust and a Second Amendment to the Morris 

Family Trust. These amendments provided for the creation of the QTIP Trust upon the death of 

either spouse. On March 7, 1993, Dr. Morris died. A probate was commenced in which Morris was 

named personal representative. 

 9. As a result of the death of Dr. Morris, the QTIP Trust came into existence and The 

Morris Family Trust terminated. Morris and Franc were, and continue to be, co-trustees of the QTIP 

Trust. Thereafter, various assets were allocated to the QTIP Trust, including the Stock. Thereafter, 

the accountants employed by the trusts prepared various accounting and tax documents reflecting 

these events. 

 10. Plaintiffs believe and thereon allege that NEB continued to maintain the name and 

business address of Dr. Morris in its shareholders’ records. 

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 11. Mellon is the transfer agent of, and acts on behalf of, NEB. Plaintiffs believe and 

thereupon allege that Mellon, on behalf of NEB, became aware that mail sent to the business 

address of Dr. Morris was returned by the postal service and thereafter contacted ChoicePoint and 

EquiSearch and informed them it could not locate Dr. Morris, notwithstanding easily accessible 

public records showing Morris as the surviving spouse of Dr. Morris who continued to reside at the 

family home in Mill Valley. Plaintiffs believe and thereon allege that Mellon provided ChoicePoint 

and EquiSearch with the last known name and address of Dr. Morris as well as the number of shares 

of the Stock owned. 

 12. Rothman was an employee of ChoicePoint and EquiSearch. By letter dated October 

22, 2002, Morris received an unsolicited letter from Rothman, on behalf of ChoicePoint and 

EquiSearch, addressed to Morris at the Morris family home in Mill Valley. This letter stated: 

“Publicly held corporations, mutual funds and financial institutions have assigned us to 

locate the rightful owners of dormant assets. These clients turn to us after their own best 

efforts have been unsuccessful. Rather than classify the assets as ‘abandoned property’, 

they prefer to have ChoicePoint, as professional locators, find the rightful owners.” 

This letter further states: 

“Our research has shown you represent the estate of the above named decedent [Dr. 

Morris]. We wish to inform you of a dormant asset accruing to that estate. This asset has 

had no activity for some time, and therefore we assume that the estate is unaware of its 

existence and value.” 

 13. Sometime thereafter, Rothman telephoned Morris and spoke with her. Rothman 

represented to plaintiff that he had discovered abandoned property which Morris was entitled to 

recover on behalf of the estate of Dr. Morris. Rothman further told Morris that this property would 

be lost if Morris did nothing. Morris inquired about the nature and amount of the property but 

Rothman refused to provide her with any specific information. Since Morris had not actively 

participated in the management of the couple’s property, Rothman easily led her to believe that Dr. 

Morris had somehow acquired rights to this lost property which Rothman refused to identify. 

Rothman told Morris that to recover the property, Morris must sign a fee agreement which paid 

ChoicePoint 35 percent of the property to be recovered. Morris was uncertain what to do and told 

Rothman that she would let him know. 

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 14. By letter of December 6, 2002, Rothman again contacted Morris. This letter states: 

“It was a pleasure speaking with you regarding the dormant asset to which the abovecaptioned estate is entitled.” 

Enclosed with this letter was ChoicePoint’s fee agreement providing that it would be paid 35 

percent of the asset to be recovered. Morris did not respond to this letter. 

 15. During the summer of 2003, Rothman continued to telephone Morris. By letter dated 

August 7, 2003, Rothman again encouraged Morris to sign and return ChoicePoint’s fee agreement 

so that “the recovery process could begin” for the “dormant asset to which you are entitled.” 

Thereafter, Morris had a number of telephone conversations with Rothman, all initiated by 

Rothman, in which she attempted to determine whether ChoicePoint conducted a legitimate 

business and whether ChoicePoint in fact knew of an abandoned asset to which she was entitled. 

Rothman continued to refuse to provide Morris with any specific information about the asset and 

continued to represent that the abandoned asset would be lost if Morris did nothing. During these 

telephone conversations, Morris repeatedly requested additional information, particularly with 

regard to the nature and value of the asset. In or about September, 2003, and in response to Morris’s 

failure to sign and return the fee agreement, Rothman told Morris that the abandoned asset was 

worth “around $17,000.” Based on Rothman’s representations, and his repeated efforts to persuade 

her to sign the fee agreement, on September 20, 2003 Morris finally agreed and signed and returned 

ChoicePoint’s fee agreement. The written agreement prepared by ChoicePoint recites that it is an 

agreement between ChoicePoint and the Estate of Dr. Morris. The agreement is signed by Rothman 

on behalf of ChoicePoint; Morris signed the agreement above the line designated “Julie Ann 

Morris” but without any indication that she was acting in any representative capacity. 

 16. By letter dated October 8, 2003, Rothman wrote to Morris and told her: 

“I would like to take this opportunity to thank you for signing our Agreement and to 

explain how our Asset Recovery Program works. 

“ChoicePoint will do all necessary follow up and pay ALL FEES required to complete 

the recovery of the shares of stock and all holdings in NORTHERN EMPIRE 

BANCSHARES.” 

This letter disclosed to Morris for the first time the identity of the asset. At that time, Morris was 

unaware that the Stock was already owned by the QTIP Trust, of which she is a beneficiary. 

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Thereafter, ChoicePoint prepared various additional documents which it presented to Morris for 

signature for the purpose of accomplishing the sale of the Stock. 

 17. The Stock was neither abandoned nor dormant and had from time-to-time, declared 

dividends and had split. Moreover, in September, 2003, the Stock was worth approximately 

$340,000, and not “around $17,000” as represented by Rothman. 

 18. By letter dated March 15, 2004, Rothman informed Morris that all of the Stock had 

been sold and that the gross proceeds of sale were $339,286.10. From this amount, ChoicePoint 

and EquiSearch paid themselves a fee of $118,240.68 and paid a brokerage fee of $1,513.24. The 

balance of $219,589.83 was then delivered to Morris. 

 19. In early 2005, the accountant of the QTIP Trust became aware of an IRS 1099 from 

EquiSearch documenting the sale of the Stock. The accountant contacted Morris to learn the 

circumstances of the sale and the involvement of defendants. Because the Stock was already a part 

of Morris’s estate plan and was held with a low tax basis, the sale generated a capital gain of 

$197,107.18. The accountant determined that it was necessary to recognize a capital gain of 

$197,107.18 on the sale, which resulted in the elimination of a tax loss carry-forward in the amount 

of $47,897.04. 

FIRST CAUSE OF ACTION AGAINST CHOICEPOINT, EQUISEARCH, AND MELLON 

(Violation of Unclaimed Property Law) 

20. Paragraphs 1 through 19 are incorporated by reference. 

 21. The Stock, dividends declared thereon, and stock splits were property subject to 

reporting and delivery to the Controller of the State of California pursuant to CCP § 1500 et seq.

(“Unclaimed Property Law”). Plaintiffs believe and thereon allege that all conditions necessary for 

the delivery of this property were satisfied and that therefore the Stock and related property 

escheated to the Controller by operation of law and should have been delivered to the Controller. 

Mellon, ChoicePoint, and EquiSearch failed to properly report and deliver this property to the 

Controller in violation of the Unclaimed Property Law, thus depriving plaintiffs of the protection of 

the Unclaimed Property Law. 

 22. The agreement of September 20, 2003, is illegal in that it requires plaintiffs to pay 

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ChoicePoint and EquiSearch a fee in excess of the ten percent limitation provided by CCP § 1582. 

 23. As a direct result of defendants’ failure to comply with the requirements of the 

Unclaimed Property Law and the illegality of the agreement, plaintiffs have sustained damages in 

an amount of not less than $167,651. Plaintiffs seek rescission of the agreement based on the 

illegality of the contract, or alternately for damages as alleged herein. 

SECOND CAUSE OF ACTION AGAINST CHOICEPOINT AND EQUISEARCH 

(Rescission for Illegality Pursuant to CC § 1670.5) 

24. Paragraphs 1 through 23 are incorporated by reference. 

 25. On September 20, 2003, the written agreement whereby ChoicePoint and EquiSearch 

agreed to recover an unidentified asset belonging to the Estate of Dr. Morris and would be 

compensated in the amount of 35 percent of the gross value of the asset recovered was executed. 

 26. The contract was unlawful under the circumstances at the time it was made because 

it was procedurally and substantively unconscionable in violation of Civil Code section 1670.5. 

 27. As a direct result of the unlawful contract, plaintiffs were damaged in that fees of 

$119,754 were paid and a tax loss carry-forward of $47,897.04 was lost. 

 28. Plaintiffs seek rescission of the agreement based on the illegality of the contract. 

Plaintiffs have no other adequate remedy at law and will suffer irreparable harm if this agreement is 

not rescinded and if the fees paid are not returned. 

THIRD CAUSE OF ACTION AGAINST CHOICEPOINT AND EQUISEARCH 

(Rescission for Mutual Mistake) 

29. Paragraphs 1 through 28 are incorporated by reference. 

 30. On September 20, 2003, the written agreement whereby ChoicePoint and EquiSearch 

agreed to recover an unidentified asset belonging to the Estate of Dr. Morris and would be 

compensated in the amount of 35 percent of the gross value of the asset recovered was executed. 

 31. Consent to the agreement of September 20, 2003 was not real, mutual, or free in that 

it was obtained solely through the mutual mistakes as herein alleged. 

 32. The agreement was entered into under material, mutual mistakes of fact in that it was 

believed that the asset to be recovered belonged to the Estate of Dr. Morris, was abandoned, 

dormant, or otherwise lost, that the value of this asset was around $17,000, and that any interest of 

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plaintiffs in this property would be lost if action were not taken. However, at the time of this 

agreement, it was unknown that the asset did not belong to the Estate of Dr. Morris, but rather 

belonged to the QTIP Trust as alleged herein. In any event, plaintiffs stood to lose nothing if no 

action were taken; conversely, plaintiffs would not benefit from the sale of the Stock, but rather its 

sale by ChoicePoint and EquiSearch would cost plaintiffs $167,651, as alleged herein. 

 33. Plaintiffs, ChoicePoint, and EquiSearch entered the agreement of September 20, 

2003, because of their mistaken belief that the asset to be recovered belonged to the Estate of Dr. 

Morris, was abandoned, dormant, or otherwise lost, that the value of this asset was around $17,000, 

and that any interest of plaintiffs in this property would be lost if action were not taken. 

 34. As a direct result of the mutual mistake of fact of the parties, plaintiffs were 

damaged in that fees of $119,754 were paid and a tax loss carry-forward of $47,897.04 was lost. 

 35. The parties would not have given apparent consent to the agreement of September 

20, 2003, except for these mistaken beliefs. 

 36. Plaintiffs seek rescission of the agreement as a result of these mutual mistakes of 

fact. Plaintiffs have no other adequate remedy at law and will suffer irreparable harm if this 

agreement is not rescinded and if the fees paid are not returned. 

FOURTH CAUSE OF ACTION AGAINST CHOICEPOINT AND EQUISEARCH 

(Rescission for Unilateral Mistake) 

37. Paragraphs 1 through 36 are incorporated by reference. 

 38. On September 20, 2003, the written agreement whereby ChoicePoint and EquiSearch 

agreed to recover an unidentified asset belonging to the Estate of Dr. Morris and would be 

compensated in the amount of 35 percent of the gross value of the asset recovered was executed. 

 39. Consent to the agreement of September 20, 2003 was not real or free in that it was 

obtained solely through the mistakes as herein alleged. 

 40. The agreement was entered into under material mistakes of fact in that it was 

believed by plaintiffs that the asset to be recovered belonged to the Estate of Dr. Morris, was 

abandoned, dormant, or otherwise lost, that the value of this asset was around $17,000, and that any 

interest of plaintiffs in this property would be lost if action were not taken. However, at the time of 

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this agreement, it was unknown that the asset did not belong to the Estate of Dr. Morris, was not 

abandoned, dormant, or otherwise lost, that the value of this asset was not around $17,000, and that 

any interest of plaintiffs in this property would not be lost if action were not taken. In any event, 

plaintiffs stood to lose nothing if no action were taken; conversely, plaintiffs would not benefit from 

the sale of the Stock, but rather its sale by ChoicePoint and EquiSearch would cost plaintiffs 

$167,651, as alleged herein. 

 41. ChoicePoint and EquiSearch were, or should have been aware, that the asset was not 

abandoned, dormant, or lost. Moreover, ChoicePoint and EquiSearch were, or should have been 

aware, that the value of the asset was not around $17,000 and that the Stock would not be lost if 

action were not taken. ChoicePoint and EquiSearch used plaintiffs’ mistake to unfairly take 

advantage of plaintiffs by obtaining fees of $119,754 without plaintiffs receiving any value 

therefore. 

 42. Plaintiffs were induced to enter the agreement of September 20, 2003, because of the 

mistaken belief that the asset to be recovered belonged to the Estate of Dr. Morris, was abandoned, 

dormant, or otherwise lost, that the value of this asset was around $17,000, and that any interest of 

plaintiffs in this property would be lost if action were not taken. 

 43. As a direct result of these material mistakes of fact, plaintiffs were damaged in that 

fees of $119,754 were paid and a tax loss carry-forward of $47,897.04 was lost. 

 44. Plaintiffs would not have given apparent consent to the agreement of September 20, 

2003, except for this mistaken belief. 

 45. Plaintiffs seek rescission of the agreement as a result of these material mistakes of 

fact. Plaintiffs have no other adequate remedy at law and will suffer irreparable harm if this 

agreement is not rescinded and if the fees paid are not returned. 

FIFTH CAUSE OF ACTION AGAINST CHOICEPOINT, 

EQUISEARCH, AND ROTHMAN 

(Conversion) 

 46. Paragraphs 1 through 45 are incorporated by reference. 

 47. From 1985 until January 21, 1993, the Stock was owned by Morris and Dr. Morris as 

community property. On January 21, 1993, Morris and Dr. Morris transferred the Stock to The 

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Morris Family Trust. Effective March 7, 1993, the Stock was allocated to the QTIP Trust. From 

March 7, 1993 until the sale of the Stock by ChoicePoint, the Stock was owned by the QTIP Trust, 

which therefore had the right to possess it. 

 48. The QTIP Trust, owner of the Stock, never entered into any agreement with 

ChoicePoint. By wrongfully obtaining the signatures of Morris on various documents, defendants 

were able to convert the Stock from the QTIP Trust and deprived it of its rightful ownership and 

possession of the Stock. 

 49. As a direct and proximate cause of defendants’ wrongful conduct, the QTIP Trust 

has been deprived of its property, namely the Stock, has been deprived of $119,753.92, and has 

incurred an adverse tax consequence in the amount of $47,897.04. Had defendants not converted 

this property, the QTIP Trust would not have sold the Stock and would not have incurred these 

losses. 

 50. Defendants’ wrongful conduct constituted oppression, fraud, and malice and 

plaintiffs are entitled to recover damages for the sake of example and by way of punishing 

defendants pursuant to Civil Code section 3294. 

SIXTH CAUSE OF ACTION AGAINST ALL DEFENDANTS 

(Elder Financial Abuse)

 51. Paragraphs 1 through 50 are incorporated by reference. 

 52. Defendants made various misrepresentations to plaintiffs, including but not limited 

to, that the property was abandoned, dormant, would be lost if plaintiffs did not contract with 

defendants, and that the asset was worth “around $17,000.” As a direct result of these 

misrepresentations, plaintiffs executed defendants’ agreement by which defendants’ paid to 

themselves and others $119,753.92 and caused plaintiffs to incur an adverse tax consequence in the 

amount of $47,897.04. In doing so, defendants took, secreted, appropriated, and retained the 

property of plaintiffs, an elder, to a wrongful use within the meaning of Welfare & Institutions Code 

section 15610.30. Defendants engaged in such conduct either directly, or assisted others in such 

conduct. 

 53. In engaging in such conduct, defendants intended to defraud plaintiffs within the 

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meaning of Welfare & Institutions Code section 15610.30. 

 54. As a direct and proximate cause of defendants’ wrongful conduct, plaintiffs have 

been deprived of property, namely the Stock, have been deprived of $119,753.92, and have incurred 

an adverse tax consequence in the amount of $47,897.04. Had defendants not engaged in this 

wrongful conduct, the Stock would not have been sold and these losses would not have been 

incurred. 

 55. In addition to all other remedies provided by law, plaintiffs are entitled to recover 

reasonable attorney fees and costs for financial abuse pursuant to Welfare & Institutions Code 

section 15657.5. 

 56. Defendants’ conduct constituted oppression, fraud, and malice in the commission of 

the financial abuse, and plaintiffs are entitled to recover damages for the sake of example and by 

way of punishing defendants for financial abuse pursuant to Civil Code section 3294. 

SEVENTH CAUSE OF ACTION AGAINST ALL DEFENDANTS 

(Fraud)

 57. Paragraphs 1 through 56 are incorporated by reference. 

 58. The representations which defendants made to plaintiffs regarding the nature and 

value of the asset were false and misleading. 

 59. The false and misleading statements of defendants were material to plaintiffs’ 

decision to sign the agreement whereby defendants sold the Stock and paid themselves a fee of 

$118,240.68 and paid a brokerage fee of $1,513.24. Plaintiffs justifiably relied on these 

misrepresentations which resulted in the sale of the Stock. 

 60. Defendants knew that these statements were false and misleading and that plaintiffs 

would rely upon them to their detriment, and defendants thereby intended to defraud plaintiffs. 

 61. As a direct and proximate result of defendants’ wrongful conduct, plaintiffs suffered 

damages as alleged herein. 

 62. Defendants’ conduct constituted oppression, fraud, and malice, and plaintiffs are 

entitled to recover damages for the sake of example and by way of punishing defendants pursuant to 

Civil Code section 3294. 

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EIGHTH CAUSE OF ACTION AGAINST ALL DEFENDANTS 

(Negligent Misrepresentation) 

 63. Paragraphs 1 through 62 are incorporated by reference. 

 64. Defendants owed plaintiffs a duty to provide accurate information and not to provide 

false or misleading information to plaintiffs. Moreover, defendants owed plaintiffs a duty not to 

harm plaintiffs by selling all of the Stock and thereby causing plaintiffs to incur an adverse tax 

consequence in the amount of $47,897.04. 

 65. Defendants acted negligently and unreasonably and breached their duty of care by 

selling the Stock, by paying themselves a fee of $118,240.68, by paying a brokerage fee of 

$1,513.24, and by causing plaintiffs to incur an adverse tax consequence in the amount of 

$47,897.04. 

 66. As a direct and proximate result of defendants’ wrongful conduct, plaintiffs suffered 

damages as further alleged herein. 

NINTH CAUSE OF ACTION AGAINST ALL DEFENDANTS 

(Violation of Unfair Competition Law – B & P § 17200 et seq.) 

 67. Paragraphs 1 through 66 are incorporated by reference. 

 68. The conduct alleged herein of defendants, and each of them, constitute unfair, 

unlawful, or fraudulent acts or practices within the meaning of Business & Professions Code 

sections 17200 et seq. 

 69. Specifically, defendants, and each of them, engaged in unfair, unlawful, or 

fraudulent acts or practices by: (1) making statements likely to deceive plaintiffs that defendants 

were aware of an asset in which the Estate of Dr. Morris had an interest; (2) making statements 

likely to deceive plaintiffs that defendants were aware of an asset which was abandoned, dormant, 

or lost; (3) making statements likely to deceive plaintiffs that the asset would be lost if plaintiffs 

failed to engage defendants; (4) making statements likely to deceive plaintiffs that the asset was 

worth around $17,000; (5) failing to comply with the requirements of Code of Civil Procedure 

sections 1500 et seq.; (6) failing to comply with the requirements of Securities and Exchange 

Commission Rules 17Ad-24; (7) participating in an enterprise which accomplished the defrauding 

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of plaintiffs; (8) participating in an enterprise which resulted in the elder financial abuse of Morris 

in violation of Welfare & Institution Code sections 15610.30 and 15657.5; (9) making an illegal 

contract in violation of Code of Civil Procedure sections 1500 et seq. (10) making an 

unconscionable contract in violation of Civil Code section 1670.5; and (11) participating in an 

enterprise which accomplished the conversion of plaintiffs’ property in violation of Civil Code 

section 3336. 

 70. As a direct result of defendants unfair, unlawful, or fraudulent acts or practices, 

plaintiffs sustained injuries in that plaintiffs lost money and property, were deprived of $119,753.92 

and have incurred an adverse tax consequence in the amount of $47,897.04. 

 71. As a further direct result of defendants unfair, unlawful, or fraudulent acts or 

practices, plaintiffs are entitled to recover the amount of $167,651. 

 72. Plaintiffs seek injunctive relief against further acts and practices by defendants 

constituting unfair competition in violation of Business & Professions Code section 17200. 

DEMAND FOR JURY TRIAL 

 73. Plaintiffs hereby demand trial by jury in this action. 

 WHEREFORE, plaintiffs pray for damages against defendants, and each of them, as 

follows: 

 a. For compensatory damages according to proof; 

 b. For punitive damages according to proof; 

 c. For rescission of the agreement and restitution of all money received by or on behalf 

of defendants; 

 d. For an equitable remedy requiring defendants to pay plaintiffs an amount equal to 

their damages; 

 e. For three times actual damages; 

 f. For preliminary and permanent injunctive relief prohibiting defendants from 

engaging in further acts of unfair competition; 

 g. For attorney’s fees, court costs, and litigation expenses according to proof; and 

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 h. For such further relief as the court may deem just. 

Dated: ____________________ ______________________________ 

 Steven Riess 

 Attorney for plaintiffs 

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