Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-02263/USCOURTS-cand-3_07-cv-02263-1/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 28:1441 Petition for Removal- Civil Rights Act

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1

[PROPOSED] SECOND AMENDED CROSS-COMPLAINT

STANFORD H. ATWOOD, JR. (SBN 37362)

stanford@atwoodlaw.com

ERIC S. HAIMAN (SBN 139764)

eric@atwoodlaw.com

DANIELLA R. SIMON (SBN 205211)

daniella@atwoodlaw.com

ATWOOD, HAIMAN & WESTERBERG

18805 Cox Avenue, Suite 200

Saratoga, California 95070-4183

Telephone: (408) 370-5070

Facsimile: (408) 370-5725

Attorneys for Cross-Complainants PAUL

G. ROBINSON, DIANNE EVANS, and

OPEN HEARTH LLC

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

[ORIGINATING COURT:

SUPERIOR COURT OF CALIFORNIA, COUNTY OF CONTRA COSTA

UNLIMITED JURISDICTION]

PERLA VEGA, BARBARA VEGA,

NORMA SALAZAR,

Plaintiffs,

v.

PAUL G. ROBINSON, et al.,

Defendants.

U.S.D.C. Case No. C07 -02263 EDL (ADR)

Date of Removal: 04/25/07

Assigned to:

Elizabeth D. Laporte (U.S. Magistrate Judge)

[Contra Costa County Superior Court Case

No. C06 00459]

[PROPOSED] SECOND AMENDED

COUNTER-CLAIM FOR FRAUDULENT

CONCEALMENT, INTENTIONAL

MISREPRESENTATION, NEGLIGENT

MISREPRESENTATION, FRAUD,

DISHONEST DEALING, BREACH OF

FIDUCIARY DUTY, PROFESSIONAL

NEGLIGENCE, BREACH OF CONTRACT,

WASTE, EQUITABLE AND

COMPARATIVE INDEMNITY, 

VIOLATION OF CALIFORNIA DUE

PROCESS CLAUSE

Case 3:07-cv-02263-MMC Document 24 Filed 06/07/07 Page 1 of 18
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2

[PROPOSED] SECOND AMENDED CROSS-COMPLAINT

PAUL G. ROBINSON, DIANNE EVANS,

OPEN HEARTH LLC,

 Cross-Complainants,

v.

KEVIN NORD, SEC PAC, INC. dba

SECURITY PACIFIC REAL ESTATE

BROKERAGE, MICHAEL RICHARD

CLANCY, RICHARD JOSEPH CLANCY,

CRAIG GREENWOOD, HI-TECH

INSPECTIONS, ALEX CONTRERAS,

DIABLO ROOFING CO., INC., ACES

PLUMBING, CITY OF PITTSBURG,

JOHN LITTLE, K.C. KAMPTON, and

ROES 2 through 20, inclusive,

 Cross-Defendants.

COME NOW Cross-Complainants PAUL G. ROBINSON, DIANNE EVANS, and OPEN

HEARTH LLC (“Cross-Complainants”) and allege as follows:

GENERAL ALLEGATIONS

1. Cross-Defendant KEVIN NORD (“Nord”) is an individual and, at all relevant times

alleged herein was, an agent of SEC PAC, INC. dba SECURITY PACIFIC REAL ESTATE.

2. Cross-Defendant SEC PAC, INC. dba SECURITY PACIFIC REAL ESTATE

(“Security Pacific”) is now, and at all times mentioned in this cross-complaint was, a corporation

qualified to do business and doing business in the State of California and a corporate licensee of the

California Department of Real Estate (“DRE”).

3. Cross-Defendant MICHAEL RICHARD CLANCY (“M. Clancy”) is now, and at all

times mentioned in this cross-complaint was, an individual, and a licensed officer of Security Pacific.

4. Cross-Defendant RICHARD JOSEPH CLANCY (“R. Clancy”) is now, and at all times

mentioned in this cross-complaint was, an individual, and a licensed officer of Security Pacific.

5. Cross-Defendant CRAIG GREENWOOD (“Greenwood”) is now, and at all times

mentioned in this cross-complaint was, an individual resident in the State of California.

6. Cross-Defendant HI-TECH INSPECTIONS (“Hi-Tech”) is now, and at all times

Case 3:07-cv-02263-MMC Document 24 Filed 06/07/07 Page 2 of 18
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

[PROPOSED] SECOND AMENDED CROSS-COMPLAINT

mentioned in this cross-complaint was, a business entity of unknown form doing business in the State

of California.

7. Cross-Defendant ALEX CONTRERAS (“Contreras”) is now, and at all times

mentioned in this cross-complaint was, an individual resident in the State of California.

8. Cross-Defendant DIABLO ROOFING CO., INC. (“Diablo”) is now, and at all times

mentioned in this cross-complaint was, a corporation licensed to and doing business in the State of

California.

9. Cross-Defendant PERLA VEGA (“P. Vega”) is now, and at all times mentioned in this

cross-complaint was, an individual resident in the State of California.

10. Cross-Defendant BARBARA VEGA (“B. Vega”) is now, and at all times mentioned

in this cross-complaint was, an individual resident in the State of California.

11. Cross-Defendant NORMA SALAZAR (“Salazar”) is now, and at all times mentioned

in this cross-complaint was, an individual resident in the State of California.

12. Cross-Defendant ACES PLUMBING (“Aces”) is now, and at all times mentioned in

this cross-complaint was, a business entity of unknown form doing business in the State of California.

13. Cross-Defendant CITY OF PITTSBURG (“the City”) is now, and at all times

mentioned herein was, a local government entity, organized under the laws of California, with

jurisdiction over the Property, as defined below. The City, as a municipality organized under the laws

of California, has the power of eminent domain.

14. Cross-Defendant JOHN LITTLE (“Little”) is now, and at all relevant times mentioned

herein was, the Building Official for the City of Pittsburg’s Department of Building Inspections.

15. Cross-Defendant K.C. KAMPTON (“Kampton”) is now, and at all relevant times

mentioned herein was, the Building Inspector for the City of Pittsburg’s Department of Building

Inspections.

16. Cross-Complainants are ignorant of the true names and capacities of the crossdefendants sued herein as ROES 2 through 20, inclusive, and therefore sue these cross-defendants by

such fictitious names. Cross-Complainants will amend this cross-complaint to allege their true names

and capacities when ascertained.

Case 3:07-cv-02263-MMC Document 24 Filed 06/07/07 Page 3 of 18
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4

[PROPOSED] SECOND AMENDED CROSS-COMPLAINT

17. Cross-Complainants are informed and believe and thereon allege that each of the

fictitiously named cross-defendants is responsible in some manner for the occurrences herein alleged,

and that Cross-Complainants’ damages were directly and proximately caused by these crossdefendants.

18. Cross-Complainants are further informed and believe and thereon allege that at all

material times mentioned herein, the cross-defendants, and each of them, including the ROE crossdefendants, were the agents, servants and/or employees of their co-cross-defendants, and in doing the

things hereinafter alleged, were acting within the course and scope of their authority as such agents,

servants and/or employees and with the permission, consent and ratification of their co-crossdefendants.

19. In or about May 2002, Cross-Complainants PAUL ROBINSON (“Robinson”) and

DIANNE EVANS (“Evans”) met cross-defendant Nord. Nord represented that he was a licensed real

estate agent with substantial experience in representing clients in the acquisition of commercial real

estate. Robinson and Evans told Nord that they were new to real estate investment and needed

professional advice and help in getting started. Nord told Robinson and Evans that he had a great deal

of experience with the sort of investment they were interested in and would help them learn what they

needed to know and would refer them to other professionals and services that they would need.

20. Nord acted as a dual agent for Cross-Complainants as buyers and cross-defendant

Greenwood, the seller of the property located at 1062 Beacon Street, Pittsburg, California, 94565 (the

“Property”). Nord recommended the Property to Robinson and Evans as the most suitable one on the

market given their needs. Nord recommended that Cross-Complainants offer the list price for the

Property, and they did so. Nord told Robinson and Evans that the price would be negotiated after the

walk through and that the list price was a very good price for the Property.

21. On or about May 15, 2002, Cross-Complainants made an offer to purchase the Property.

On May 16, 2002, Greenwood made a counteroffer, which was accepted on or about May 20-21, 2002.

Nord told Cross-Complainants that the termite inspection done on behalf of Greenwood was all they

needed to be assured that the Property was in good condition. Nord told Cross-Complainants to avoid

dealing with the City and its inspectors. Nord told Cross-Complainants that given the price they were

Case 3:07-cv-02263-MMC Document 24 Filed 06/07/07 Page 4 of 18
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

5

[PROPOSED] SECOND AMENDED CROSS-COMPLAINT

paying and the City of Pittsburg’s involvement they could be certain the building was basically sound.

22. Cross-Complainants decided to obtain an inspection. On May 24, 2002, an inspection

was done by Alex Contreras of Hi-Tech Inspections. Dianne Evans and Paul Robinson walked the

Property with him. Contreras said the building was not in great shape and had a lot of deferred

maintenance, but that it was structurally sound. He told Evans that the only big problem was the

plumbing. He told Evans the roof was not well done, but was only five to eight years old and was not

a big concern.

23. On or about June 12-13, 2002, Cross-Complainants and Greenwood entered into an

addendum to the purchase agreement. The addendum provided as follows:

Buyer does hereby remove document and inspection as a contingency

if the following items are agreed to by Seller:

The Buyer will need a letter from the appropriate City officer as to

completion, per City request;

Seller to deliver to Buyer a termite clearance;

Seller to have all units rented in order to obtain a new loan. Buyer to

approve new tenants, not to be unreasonably withheld;

Seller to credit Buyer $2,000.00 for any and all other repairs;

Seller to Deliver Estoppel to Buyer within 3 days;

All tenants to be current in rent;

Seller agrees to furnish buyer with release/letter from City of Pittsburg

for completion of specified/said repairs regarding City Action.

24. Greenwood did not give Cross-Complainants any information about applicants before

renting out all of the units. Nord told Cross-Complainants not to worry about this because it would

just slow things down, and the tenants could not be evicted now anyway.

25. Cross-Complainants also asked Nord to have Greenwood stop making “repairs” on the

building as it appeared that many would have to be re-done. Neither Nord nor Greenwood did

anything to address these concerns. The problems that this caused for Cross-Complainants included

that the lender and insurer required that defective work that Greenwood did on the external stairs for

units 1 and 2 be re-done before the loan would be funded.

26. On or about June 26, 2002, Cross-Complainants created an LLC and wanted to buy the

Case 3:07-cv-02263-MMC Document 24 Filed 06/07/07 Page 5 of 18
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

6

[PROPOSED] SECOND AMENDED CROSS-COMPLAINT

Property through it. Nord recommended it would be better to buy the property in Robinson’s name

and then transfer it to the LLC because it would take too much time and delay closing the transaction.

After close of escrow, Nord told Cross-Complainants he did not know how to transfer the Property

into an LLC without triggering a taxable event.

27. On or about June 28, 2002, the City of Pittsburg posted a “Dangerous Property Do Not

Occupy” notice on the Property. On July 27, 2002, Evans found units 4 and 5 posted with notices

from the City, found a pulled electrical meter and standing water in the basement. CrossComplainants sent a letter to Nord asking him what was going on. They received no satisfactory

response. In June, July and August 2002, Cross-Complainants were advised by Nord to apply jointly

to Washington Mutual for a mortgage on the Property. Before loan approval, Nord told CrossComplainants, contrary to his earlier directions, not to include the LLC on the mortgage as it would

take too long and complicate matters.

28. On September 19, 2002, the City issued a Certificate of Occupancy for Units 1-6. In

October 2002, the transaction closed escrow at North American Title Company, Escrow No.

5470252200495, at branch address 1555 Riviera Avenue, Suite G, Walnut Creek, California, 94596.

29. On or about December 16, 2002, Cross-Complainants received a call from a tenant,

stating that there was flooding in the basement. Nord referred Cross-Complainants to Aces Plumbing.

There was three feet of standing water in the basement and the sump pump was not working. Aces

said it was an old pump, had to be replaced, and that there was a leak in the drain line that also had to

be repaired. Later in December and again on or about January 2, 2003, Cross-Complainants had to

call Aces back out due to continued flooding, a leak at the same point in the drain, and the fact that

the pump was still not working. Cross-Complainants paid another $4,036.00.

30. In August 2003, a tenant in unit 6 reported leaking in the doorway to the bathroom.

Cross-Complainants hired Augie’s Plumbing. The plumber found drain lines from both of the upstairs

units 1 and 2 were leaking badly and draining down into unit 6's bathroom door and ceiling. Part of

the wall in the back of the building had to be opened to replace old cast iron drains that were leaking.

The plumber showed Cross-Complainants the leak Aces said it was repairing, and it was a huge crack

running lengthwise down the cast iron drain pipe under unit 3. The plumber found two problems with

Case 3:07-cv-02263-MMC Document 24 Filed 06/07/07 Page 6 of 18
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

7

[PROPOSED] SECOND AMENDED CROSS-COMPLAINT

the sump pump: 1) an intermittent GFI it was plugged into, and 2) sediment was getting into the pump

and burned it out. He replaced the GFI and screened the pump. When the plumber was redoing the

bathrooms in Units 2 and 5 he found where Greenwood had put up new sheetrock over the top of old

sheetrock which was black with mold.

31. Plumbing repairs were ongoing for months. Several tenants moved out because of this.

Cross-Complainants resurfaced walls and ceilings and installed new carpets in vacated units 1, 2, 3

and 5. They also installed new kitchen cabinets and re-did the bathrooms in these units.

32. In December 2004, the tenant in unit 1 notified the Cross-Complainants that the

windows were leaking. The tenant refused to allow workmen in on two occasions, despite proper

notice. Cross-Complainants had East County Glass & Window inspect all the windows. East County

told Evans there was essentially nothing wrong with the windows. They told her that the problem with

the windows was that they were single pane aluminum frame and sweated in cold weather. CrossComplainants were prepared to replace all of the windows if necessary. Later, another window man,

showed Evans where the drain holes on the windows had been painted and/or molded closed so that

they couldn't drain. 

33. In June 2005, B. Vega and her family, who had been living unknown to CrossComplainants with P. Vega in unit 2, moved into unit 4. P. Vega refused to pay rent for July 2005.

She claimed it was because the bathroom vanity leaked and there were cockroaches, but would not

allow the handyman in to repair the leak and would not allow Discovery Pest Control, with which

Cross-Complainants had a monthly service agreement, to enter. Instead of allowing the repairs. P.

Vega complained to the City about the condition of her apartment.

34. On July 28, 2005, Cross-Complainants posted a notice on unit 2 regarding fixing the

vanity. On July 29, 2005, the children let Evans and the handyman into unit 2, but P. Vega stopped

them and called her husband. P. Vega told Evans she did not want Evans to fix the leak until after a

City inspector saw it. Cross-Complainants mailed a notice to enter and make repairs to P. Vega and

on the weekend of August 6, 2005, Cross-Complainants made repairs.

35. On or about August 20, 2005, Cross-Complainants received a notice from the City,

stating that they had ten days to clear a list of stated violations. The City said it was requiring a

Case 3:07-cv-02263-MMC Document 24 Filed 06/07/07 Page 7 of 18
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

8

[PROPOSED] SECOND AMENDED CROSS-COMPLAINT

termite and pest control report, roof inspection, general contractor’s inspection of bathrooms and

windows, and a plumber’s inspection of modifications to piping and relocation of water heaters.

Cross-Complainants complied and sent the reports to the City.

36. On or about September 15, 2005, Cross-Complainants received a Notice to Abate

Nuisance. When Evans called the City on or about September 20, 2005, Curtis Smith, the Chief

Building Official, told her that the City does not talk to property managers.

37. On or about September 29, 2005, Cross-Complainants met with Curtis Smith and KC

Kampton, a building inspector, and Officers Reposa and Bancroft, also of the City. Smith said the

biggest problem was with improper installation of water heaters and that once a permit issued for

them, the City would work with them on the other repairs. He told Cross-Complainants that their

plumber, Augie, was not a licensed plumber. He said this made his report useless and that CrossComplainants would not be able to get the plumbing permit required by the City. Smith said it was

as if whoever installed the heaters was trying to kill the tenants. Smith said the HomeGuard termite

report was very thorough and the City would use it as a basis for clearing all the violations. CrossComplainants were also told that though they were not a corner lot, they would be held to the

requirements for a corner lot. Officers Reposa and Bancroft told Cross-Complainants that the tenant

in unit 1 was a criminal and Cross-Complainants had to evict him, but admitted they did not have

grounds to evict.

38. On October 3, 2005, Bart from Ben Franklin Plumbing met Evans at the Property to

quote water heaters. He said that if the City did not approve what Augie had done, there was no way

to please the City. He said there was plenty of drop to the sump pump and combustion air calculations

only applied to water heaters placed in closets. He declined the job because the City was making up

rules as it went. Cross-Complainants could not get any other plumbers from the list provided to them

by the City to quote the job. Many were not interested when they heard what the City wanted.

39. Cross-Complainants discovered that, contrary to Smith’s statement, Augie was a

licensed plumber. On October 25, 2006, Augie got a permit for the water heaters. The City required

replacement with “shorties” on stands with holes drilled for increased air flow and to change the flues.

40. The tenant in unit 4, B. Vega, told Evans she had no electricity in part of her unit.

Case 3:07-cv-02263-MMC Document 24 Filed 06/07/07 Page 8 of 18
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

9

[PROPOSED] SECOND AMENDED CROSS-COMPLAINT

PG&E checked and found no problems. Wires from a wall lamp were pulled out of the wall and poked

into the power cord, extension cords hung all around. On or about November 11, 2005, Greg Peterson

of City Wide Electric met Evans at unit 4 and repaired the problems.

41. On or about November 11, 2005, the tenant in Unit 1 complained of leaking. CrossComplainants had East County recheck and were told the roof was leaking. Cross-Complainants

contracted with Diablo Roofing to make repairs. They explained to Diablo the need for permits.

Diablo told them permits were not required. On December 6, 2005, they began the repairs and within

fifteen minutes, the City shut the work down for not having permits.

42. Since the beginning of 2006, the City has issued administrative citations and posted the

Property with notices, including one stating “dangerous building must vacate.” On or about January

17, 2006, the tenant in unit 1 called Cross-Complainants and said the City was coming out to turn off

the water and PG & E and all tenants had to move out by January 20, 2006.

43. The building inspector told Evans that the tenant in unit 4 told him that Evans had

pulled the light fixture wires out of the wall and strung up all the extension cords in unit 4 and the

children had been shocked. He said the kids backed up what the tenants said. Subsequently, B. and

P. Vega admitted to Evans that they had un-wired the lights because they thought it would lower the

electric bill. B. and P. Vega also admitted that they had disconnected gas wall furnaces to reduce the

gas bill.

44. In the course of undertaking repairs mandated by the City, Cross-Complainants

discovered extensive dry rot and other damage, so severe that a major portion of the building has to

be entirely re-built. Based on evidence of prior attempted repairs and the extent of damage, CrossComplainants are informed and believe that Greenwood and his agents, as well as the City, were aware

that the building was essentially valueless and yet nobody disclosed this to Cross-Complainants before

the purchase of the building. When sheetrock was removed in units 3 and 4 in March 2004, severe

dry rot was exposed. Cross-Complainants are informed and believe that Greenwood had to know

about this condition because there were places where he had made small repairs, and the problem was

at least 12-15 years old.

45. B. Vega broke two windows, knocked numerous holes in the bedroom wall and pulled

Case 3:07-cv-02263-MMC Document 24 Filed 06/07/07 Page 9 of 18
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

10

[PROPOSED] SECOND AMENDED CROSS-COMPLAINT

electrical wiring out of the walls. The cost to repair these items was $679.32.

46. B. Vega owes $2,721.43 for rent and $325 in late fees, plus $750 for eviction retainer,

for a total of $3,796.43

47. P. Vega owes $1,774.29 for rent and $90 for late fees less her deposit of $1,000, for a

total of $864.29.

48. Norma Salazar owes $428.47 for partial rent for the month of February 2006.

FIRST CAUSE OF ACTION

(Fraudulent Concealment - Against Craig Greenwood, Kevin Nord, Security Pacific Real

Estate, Michael Richard Clancy, Richard Joseph Clancy)

49. Cross-Complainants incorporate herein by reference the allegations set forth in

paragraphs 1 through 48 above.

50. Cross-Defendants and each of them knew or should have known of the existence of

conditions rendering the Property uninhabitable, in need of major reconstruction or demolition,

including but not limited to extensive dry rot, water damage and other deterioration of structural

elements of the building.

51. Cross-Defendants and each of them had a duty to disclose the existence of the abovementioned conditions and other latent defects of which they had or should have had knowledge.

52. Cross-Defendants and each of them failed to disclose the existence of the abovementioned conditions and other latent defects of which they had or should have had knowledge to

Cross-Complainants.

53. As a legal consequence of cross-defendants’ failure to disclose as alleged above, CrossComplainants have suffered damages, including but not limited to costs of inspections, costs of repair,

and lost rent.

54. In failing to disclose as alleged above, cross-defendants and each of them acted

maliciously, oppressively, with fraudulent intent and in conscious disregard of the rights of CrossComplainants.

Case 3:07-cv-02263-MMC Document 24 Filed 06/07/07 Page 10 of 18
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

11

[PROPOSED] SECOND AMENDED CROSS-COMPLAINT

SECOND CAUSE OF ACTION

(Intentional Misrepresentation - Against Craig Greenwood, Kevin Nord, Sec Pac, Inc. dba

Security Pacific Real Estate, Michael Richard Clancy, Richard Joseph Clancy)

55. Cross-Complainants incorporate herein by reference the allegations set forth in

paragraphs 1 through 54 above.

56. Cross-Complainants and each of them represented to cross-defendants that the Property

was in habitable condition and free from major structural defects that would require extensive

reconstruction or demolition.

57. In making the foregoing representations, cross-defendants and each of them knew that

the representations were false and that Cross-Complainants would rely on them in deciding to purchase

the Property.

58. In justifiable reliance upon cross-defendants’ representations, Cross-Complainants did

purchase the Property. Had they known that the foregoing representations were false, cross-defendants

would not have purchased the Property.

59. As a legal consequence of cross-defendants’ intentional misrepresentations as alleged

above, Cross-Complainants have suffered damages, including but not limited to costs of inspections,

costs of repair, and lost rent.

60. In making the foregoing false representations cross-defendants and each of them acted

maliciously, oppressively, with fraudulent intent and in conscious disregard of the rights of CrossComplainants.

THIRD CAUSE OF ACTION

(Negligent Misrepresentation - Against Craig Greenwood, Kevin Nord, Sec Pac, Inc. dba

Security Pacific Real Estate, Michael Richard Clancy, Richard Joseph Clancy)

61. Cross-Complainants incorporate herein by reference the allegations set forth in

paragraphs 1 through 60 above.

62. Cross-Complainants and each of them represented to cross-defendants that the Property

was in habitable condition and free from major structural defects that would require extensive

reconstruction or demolition.

Case 3:07-cv-02263-MMC Document 24 Filed 06/07/07 Page 11 of 18
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

12

[PROPOSED] SECOND AMENDED CROSS-COMPLAINT

63. In making the foregoing representations, cross-defendants and each of them should

have known that the representations were false and acted in reckless and negligent disregard of their

truth or falsity, knowing that Cross-Complainants would rely on them in deciding to purchase the

Property.

64. In justifiable reliance upon cross-defendants’ representations, Cross-Complainants did

purchase the Property. Had they known that the foregoing representations were false, cross-defendants

would not have purchased the Property.

65. As a legal consequence of cross-defendants’ misrepresentations as alleged above,

Cross-Complainants have suffered damages, including but not limited to costs of inspections, costs

of repair, and lost rent.

FOURTH CAUSE OF ACTION

(Fraud, Dishonest Dealing and Breach of Fiduciary Duty - Against Kevin Nord, Sec Pac Inc.

dba Security Pacific Real Estate, Michael Richard Clancy, Richard Joseph Clancy)

66. Cross-Complainants incorporate herein by reference the allegations set forth in

paragraphs 1 through 65 above.

67. In making the above alleged representations and failures to disclose, cross-defendants

and each of them committed fraud and dishonest dealing and breached their fiduciary duties in

violation of their professional obligations to Cross-Complainants.

68. As a legal consequence of cross-defendants’ violation of their professional obligations

as alleged above, Cross-Complainants have suffered damages, including but not limited to costs of

inspections, costs of repair, and lost rent.

69. In breaching their professional obligations as represented above, cross-defendants and

each of them acted maliciously, oppressively, with fraudulent intent and in conscious disregard of the

rights of Cross-Complainants.

FIFTH CAUSE OF ACTION

(Professional Negligence -Against Kevin Nord, Sec Pac, Inc. dba Security Pacific Real Estate, 

Michael Richard Clancy, Richard Joseph Clancy)

70. Cross-Complainants incorporate herein by reference the allegations set forth in

Case 3:07-cv-02263-MMC Document 24 Filed 06/07/07 Page 12 of 18
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

13

[PROPOSED] SECOND AMENDED CROSS-COMPLAINT

paragraphs 1 through 69 above.

71. In making the above alleged representations and failures to disclose, cross-defendants

and each of them breached the professional standard of care for licensed real estate salespersons and

brokers.

72. As a legal consequence of cross-defendants’ violation of their professional obligations

as alleged above, Cross-Complainants have suffered damages, including but not limited to costs of

inspections, costs of repair, and lost rent.

73. In breaching their professional obligations as represented above, cross-defendants and

each of them acted maliciously, oppressively, with fraudulent intent and in conscious disregard of the

rights of Cross-Complainants.

SIXTH CAUSE OF ACTION

(Breach of Contract - Against Cross-Defendants Perla Vega, Barbara Vega 

and Norma Salazar)

74. Cross-Complainants incorporate herein by reference the allegations set forth in

paragraphs 1 through 73 above.

75. Cross-Defendants and each of them are parties to rental agreements pursuant to which

they are obligated to pay rent and are subject to late fees and other penalties for breach of their

contractual obligations.

76. Cross-defendant Barbara Vega owes plaintiff $2,721.43 for rent and $325 late fees plus

$750 for eviction retainer, for a total of $3,796.43.

77. Perla Vega owes $774.29 for rent and $90 late fee for a total $864.29.

78. Norma Salazar owes $428.57 for rent.

SEVENTH CAUSE OF ACTION

(Waste - Against Barbara Vega, Treble Damages [Code Civ. Proc. § 732] )

79. Cross-Complainants incorporate herein by reference the allegations set forth in

paragraphs 1 through 78 above.

80. Cross-Defendant Barbara Vega committed waste by, among other things, breaking two

windows, knocking several holes in the bedroom wall and pulling electrical wiring out of the walls.

Case 3:07-cv-02263-MMC Document 24 Filed 06/07/07 Page 13 of 18
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

14

[PROPOSED] SECOND AMENDED CROSS-COMPLAINT

The cost to repair the damages caused by cross-defendant’s waste amount to at least $679.32. CrossDefendant is liable for treble damages pursuant to Code of Civil Procedure section 732.

EIGHTH CAUSE OF ACTION

(Equitable and Comparative Indemnity - Against all Cross-Defendants)

81. Cross-Complainants incorporate herein by reference the allegation set forth in

paragraphs 1 through 80 above. 

82. Cross-Complainants are not liable for the events, occurrences and damages alleged in

the complaint. Cross-Complainants also allege that cross-defendants and each of them are responsible

for the occurrences, acts and/or omissions alleged by plaintiffs in their complaint and upon which

plaintiffs predicate their allegations of liability.

83. Cross-Complainants deny liability in any manner for the injuries and damages claimed

by plaintiffs in their complaint. If Cross-Complainants are held liable, it will be entirely on account

of the primary wrongful conduct, breaches of contract, negligence, breaches of fiduciary duty and bad

faith on the part of the cross-defendants. Any liability that Cross-Complainants may incur as a result

of plaintiffs’ complaint will be a result of Cross-Complainants’s passive and secondary liability, and

more importantly as a result of the acts and primary negligence, contributory liability and other

misconduct of cross-defendants, and each of them. Therefore, Cross-Complainants are entitled to

indemnity from cross-defendants for any damages, costs or attorneys’ fees awarded against them and

in favor of any other party as well as the attorneys’ fees and costs incurred by Cross-Complainants in

defense of this action.

84. If in fact it is determined that Cross-Complainants are not entitled to be fully

indemnified by said cross-defendants, and each of them, Cross-Complainants allege that said crossdefendants, and each of them, and other parties to this action, would be concurrent tortfeasors and,

based upon the law set forth in American Motorcycle Association v. Superior Court (1978) 20 Cal.3d

578, Cross-Complainants are entitled to partial indemnity, partial contribution or equitable indemnity

from said cross-defendants and each of them.

Case 3:07-cv-02263-MMC Document 24 Filed 06/07/07 Page 14 of 18
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

15

[PROPOSED] SECOND AMENDED CROSS-COMPLAINT

NINTH CAUSE OF ACTION

Intentional Misrepresentation By Public Employees (Govt. Code § 822.2)

(Against City of Pittsburg Building Officials John Little and K.C. Kampton)

85. Cross-Complainants incorporate herein by reference the allegations set forth in

paragraphs 1 through 84 above.

86. City of Pittsburg Building Inspectors, John Little (“Little”) and K.C. Kampton

(“Kampton”), had a duty to inspect buildings for health and safety purposes.

87. City of Pittsburg Building Inspectors are required to disapprove construction which

violates the minimum standards of the Uniform Building Code and the Pittsburg Municipal Code.

88. On January 30, 2002, the Pittsburg Police Department along with Kampton. They found

numerous building code violations that threatened the health and safety of the tenants who resided at

the Property. On February 7, 2002, the Pittsburg Police Department issued a Notice of Public

Nuisance to Greenwood finding, among other things, that the Property itself was structurally unsafe

and dangerous. Moreover, the Community Development Department issued its Official Notice to

Greenwood demanding compliance with the building and construction ordinances.

89. A hearing took place on February 28, 2002 regarding the costs of an abatement of the

condemned Property. The City issued its March 5, 2002 Decision which ordered Greenwood to

comply with all requests from the City of Pittsburg Chief Building Official. According to March 5,

2002 “Findings and Decision,” Greenwood stated that he offered to assist his tenants to move out.

Greenwood stated that he intended to sell the building and either he or the new owner would make all

of the repairs.

90. Shortly thereafter, Greenwood listed the Property on the market for sale with Nord and the

Cross-Complainants entered into contract with Greenwood to purchase the Property. The CrossComplainants purchased the Property for investment purposes and did not intend, nor ever did, live

on the Property.

91. On September 18,2002, Nord issued a letter to John Little at the City of Pittsburg

demanding a Release of Property Violations and a Certificate of Occupancy. 

92. On September 19,2002, Little issued a Certificate of Occupancy. Cross-Complainants

Case 3:07-cv-02263-MMC Document 24 Filed 06/07/07 Page 15 of 18
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

16

[PROPOSED] SECOND AMENDED CROSS-COMPLAINT

further allege on information and belief that no permits were pulled for repairs and no inspections were

completed which addressed the City of Pittsburg’s March 5, 2002 “Findings and Decision.”

93. Cross-Complainants further allege on information and belief that the two inspectors knew

that the Property was in violation of the building code and was also not in accordance with the

habitability requirements under the Health and Safety Code. The City of Pittsburg Building Inspectors

issued a Certificate of Occupancy to Craig Greenwood and Kevin Nord during escrow. CrossComplainants relied upon this Certificate of Occupancy from the City of Pittsburg Building Inspectors

to complete their purchase of the Property.

TENTH CAUSE OF ACTION

Violation of California Constitution, Art. I, Sec. 19

Inverse Condemnation: Regulatory Taking Without Just Compensation

(Against City of Pittsburg)

94. Cross-Complainants incorporate herein by reference the allegations set forth in

paragraphs 1 through 93 above.

95. Cross-Complainants purchased the Property for investment purposes. The CrossComplainants never intended nor ever lived on the Property. Cross-Complainants heavily invested

in the Property with capital, a secured debt, repair costs, improvement costs, etc.

96. Cross-Complainants had investment-backed expectations that the Property would return

on their investment by tenant rents and equity.

97. The City took Cross-Complainants property in its exercise of eminent domain without

payment of just compensation or institution of proceedings for the assessment of such compensation.

During Greenwood’s ownership, the City issued numerous violations against the Property and declared

it structurally unsafe. Nevertheless, the City issued a Certificate of Occupancy during escrow without

proof that Greenwood complied with repairing all building violations. This Certificate of Occupancy

declared that all violations were removed and the building met all health, safety and building codes.

Shortly after the escrow period concluded, however, the City cited Cross-Complainants with the same

violations and condemned the Property as uninhabitable.

Case 3:07-cv-02263-MMC Document 24 Filed 06/07/07 Page 16 of 18
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

17

[PROPOSED] SECOND AMENDED CROSS-COMPLAINT

98. The City’s acts proximately caused the Cross-Complainants to be deprived of their

investment-backed expectations, property and property rights. By issuing a Certificate of Occupancy

knowing of conditions that the City would later use to justify ordering the property to be vacated, and

failing to provide any opportunity to be heard or to contest the City’s actions, the City deprived CrossComplainants of their property without due process of law in violation of Article I section 7(a) of the

California Constitution.

99. Cross-defendants’ misconduct amounted to a regulatory taking when they improperly

issued the September 19, 2002 Certificate of Occupancy to Greenwood despite Greenwood’s failure

to comply with all the building, health and safety regulatory requirements under the City’s municipal

codes. Cross-Complainants justifiably relied upon this Certificate of Occupancy and closed escrow.

Subsequently, the Cross-defendants cited Cross-Complainants with the same violations that they cited

Greenwood. The City then completely condemned the Property. This condemnation denied the CrossComplainants the economically viable use of their investment-backed expectations land.

100. As a legal consequence of cross-defendants’ violation as alleged above, CrossComplainants have suffered damages, including but not limited to costs of inspections, costs of repair,

loss of equity, and lost rents.

101. Cross-defendants’ improper issuance of the September 19, 2002 Certificate of

Occupancy during escrow which Cross-Complainants reasonably relied upon to complete their

investment purchase caused Cross-Complainants to be deprived of their investment-backed

expectations of the Property, without due process of law nor just compensation.

102. As a result of the Cross-Defendants’ actions and condemnation, the CrossComplainants were injured and were forced to initiate this action to recover just compensation due

their significant loss of all viable economic use.

WHEREFORE, Cross-Complainants demand judgment against cross-defendants for the

following:

1. For compensatory and consequential damages;

2. For exemplary and punitive damages;

Case 3:07-cv-02263-MMC Document 24 Filed 06/07/07 Page 17 of 18
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

18

[PROPOSED] SECOND AMENDED CROSS-COMPLAINT

3. For attorneys’ fees and costs of suit;

4. For inverse condemnation, costs and fees under Code of Civil Procedure § 1036; and

5. For such other and further relief as the Court deems just.

DATED: ___________, 2007 ATWOOD, HAIMAN & WESTERBERG

By:______________________________________

ERIC S. HAIMAN

Attorneys for Cross-Complainants

PAUL G. ROBINSON, DIANNE EVANS,

and OPEN HEARTH LLC

Case 3:07-cv-02263-MMC Document 24 Filed 06/07/07 Page 18 of 18