SEITLEMENT AND RELEASE AGREEMENT 

This Settlement and Release Agreement (the "'Agreement") is entered into by and 

between Plaintiff Federal Deposit Insurance Corporation as Receiver of Downey Savings and Loan 

Association., F.A. ("FDlC-R .. ), on the one hand, and Defendant PastorS. Engkabo dba Engkabo 

Appraisal Service ("Engkabo" or ~·Defendant"), and his insurance carrier Chartis, Inc. and National 

Union Fire Insurance Company of Pjttsburgh, PA ("Chartis") on the other hand, and is effective as 

of October 4, 2011 (the "Effective Date). FDIC-R and Defendant are collectively referred to herein 

as "Settling Parties" or individually as a "Settling Party," 

RECITALS 

This Agreement is entered into with respect to the follo\\ing generalized facts: 

On October 15, 2008, Downey Savings and Loan Association, F .A ("Downey 

Savings") flled a complaint against Wendy L. Green ("Gre.en''}, mortgage broker Macan Pacific, Jnc. 

dba San Francisco Mortgage Exchange ("Macan") and appraiser Engkabo {collectively hereinafte{ 

referred to as the ''Defendants"} generally asserting causes of action for breach of contract and 

negligent misrepresentation ("Complaint"). Engkabo asserted cross-claims against Green, Macan, 

and Merri Jane Funk ("Funk"). The matter was assigned Case No. 30·2008-00l l3299, in the 

Superior Court of the State of California, County of Orange (the "Action"). 

"Ibe Action arose out of a $609,000 mortgage loan issued by Downey Savings (O 

Green on or about August 25, 2005 (the "Subject Loan") secured by the real property commonly 

(b)(4) ___kno.wn..a~ · !Brentwood, California 94513 (the "Subject Property"), 

ln the Action, Downey Savings asserted claims against Defendants alleging, among 

other things, that Defendants had submitted to Do'-'>ney Savings a mortgage loan package on behalf 

of the Borrower, including an appraisal report prepared by Engkabo, 

Downey Savings contended in the Action that the Engkabo Appraisal Report was 

flawed and over-valued the subject property . 

Defendant denied the allegations made in the Complaint. 

On November 21, 2008, Do\\'ney Savings was closed by the Office of Thrift 

Supervision pursuant to 12 U.S.C. § l821(c), the FDIC-R was appoinled receiver. In accordance 

with 12 U.S.C. § 182l(d)J the FDlC·R as receiver: succeeded to all rights, titJes, powers and 

privileges of the Bank, including those with respect to its assets. Among the assets to which the 

FDIC·R as receiver succeeded were any and all of Downey Savings' claims. demands; and causes of 

action that "vere asserted in the Action. 

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SETTLEMENT AND RELEASE AGREEME"N"T 

FDIC!Downey v. GreenJ et al. 

Page 1 of6 
Settling Parties each desire to settle and terminate the dispute existing between and 

among them as outlined in the Action as well as all other known or unknown claims they each might 

have concerning any of the facts surrounding the transaction, or series oftransactions that underlie 

the Action, on the tenns set forth below. 

AGREEMENT 

NOW THEREFORE, in consideration of the promises, undertakings. payments, and 

releases stated herein, the sufficiency of which consideration is hereby acknowledged, the 

undersigned Settling Parties agree, each with the other, as follows: 

1. Settlement Pavment and Dismissal 

1. I. Enkaho shalt cause payment to be delivered to Plaintiff's counsel in 

immediately available funds payable to "Law Offices of Sean A. Kading, Client Trust Account", in 

the total amount of $155,000 and no/1 00 ($1 55,000.00) ("Settlement Payment"). The Settlement 

Pa}ment shalJ be delivered via overnight mail to the Law Offices of Sean A. Kading, 30211 

Avenida Banderas, Suite 200, Rancho Santa Margarita, California 92688, with delivery due within 

thirty (30) days following execution of the Agreement by all parties. 

1.2 Upon receipt ofthe Settlement Payment, counsel for FDIC~R shall cause to 

be filed a Request for Dismissal with prejudice of the Action as against Engkabo. Nothing 

contained herein shall be deerned to release any claims the FDJC-R has or may have against Macan, 

Green, or any other third parties. 

2. Releases 

2.1 Release bv the FDJC-R. Effective upon receipt in full of the Settlement 

Funds. the FDIC as Receiver of Dov..ney Savings and Loan Association, F.A., and in that capacity 

alone, fully and forever releases and discharges Engkabo and Chartis, from and against all known 

actions, proceedings, causes of action, claims for relief, demands, rights, interests, damages, losses, 

costs, expenses, disbursements (including attorneys' fees and costs), obligations, liabilities and other 

claims of every nature whatsoever arising from or related to the transaction, or series of transactions, 

underlying the Action as well as related to any other appraisals prepared by Engkabo submitted to 

Downey Savings and Loan Association, F.A. or any other real estate appraisal ofEngkabo made to 

or relied upon by Downey Savings & Loan Association. F.A. (collectively, the ''Claims"). 

2.2 Express Reservations From Releases bv FDIC-B Notwithstanding any other 

provision, by thls Agreement, the FDIC-R does not release. and expressly preserves fully and to the 

same extent as if the Agreement had not been executed, any claims or causes of action: 

a. against any Settling Party or any other person or entity for liability, if 

any, incurred as the maker, endorser or guarantor of any promissory note or indebtedness payabJe or 

SETTLEMENT AND RELEASE AGREEMENT 

FDIC/Oowney v. Green, et al. 

Page 2 of6 
owed by them to FDIC-R, the Bank, other financial institutions, or any other person or entity, 

including without limitation any claims acquired by FDIC-R as successor in interest to the Bank or 

any person or entity other than Bank; 

b. against any person or entity not expressly reJeased in this Agreement 

including, but not limited to, Green, Macan, or any other third parties. FDIC~R expressly reserves 

the right to continue to prosecute any and all cLaims and causes of accion as against these nonsettling parties; and 

c. which are not expressly released in Paragraph 3.1 above. 

2.3 Notwithstanding any other provision, nothing in this Agreement shall be 

oonstrued or interpreted as limiting, waiving, releasing or compromising the jurisdiction and 

authority of the Federal Deposit Jnsurance Corporation in the exercise of its supetvisory or 

regulatory authority or to diminish that entity's ability to institute administraiive enforcement 

proceedings seeking removal, prohibition or any other administrative enforcement which may arise 

by operation of law, rule or regulation. 

2.4 Notwithstanding any other provision, this Agreement does not purport to 

waive, or intend to waive, any claims which could be brought by the United States through either 

the Department of Justice, the United States Attorney's Office for the Northern District of 

California or any other federal agency. 

2.5 Release bv Engkabo. In exchange for the promises herein, Bngkabo fuHy and 

forever releases and discharges the FDJC as Receiver for Downey Savings and Loan Association, 

F.A., and its agents, representatives, attorneys, officers, and uccessors-in~intere t, and Merri Jane 

Funk~ from and against all known actions, proceedings, causes of action, claims for relief, demands, 

rights, interests, damages, o~ costs, expenses, disbursements (including attorneys' fees and 

costs), obligations, liabilities and other claims of every nature whatsoever arising from or related to 

the tran.~taction, or series of transactions, underlying the Action (co1lectively, the "Claims'} 

2.6 Waiver of Civil Code Section 1542. Each of the Settling Parties expressly 

waives and relinquishes any and all rights and benefits conferred on them by California Civil Code 

§1542 and any similar enactment of, or other such rights afforded by, the State of California, the 

Un.ited States or any other state territory of the United States. Section 1542 ofthe California Civil 

Code states: 

"A general release does not extend to claims which the creditor does nol know 

or suspect to exist in his or her favor at the lime of executing the release, which if 

krwwn by him or her must have materially ajfec1ed his or her settlement with the 

debtor.'' 

Each of the Settling Parties acknowledges that the effect and import of Calitorn.ia Civil Code § 

SETTLEMENT AND RELEASE AGREEMEI'tl 

FDIC/Downeyv. Green, et al. 

Page 3 of6 
1 542, and the foregoing waiver and relinquishment of those rights, are understood by them and 

made voluntarily. Each of the Settling Parties acknowledges that if they hereafter discover facts 

different than or in addition to those that they now know or believe to be true, that said release shall 

be given full force and effect according to each and aJ1 of its express terms and conditions, 

notwithstanding such different or additional facts. The discovery of such different facts shall not in 

any way aller or affect the release contained herein. 

3. l)isrnissal 

3.1 Dismissal of Action As Against Engkabo. Forthwith, Plaintiff shall file a 

request for dismissal with prejudice of the Complaint as againsr Engkabo only, and provide 

Engkabo with a coufonned copy after entry of dismissal is made by the Court 

4. Waiver of Attomevs, fees and costs. Upon execution of this Agreement, each of the 

Settling Parties shall bear his or its own attorneys' fees and costs in the Action. 

5. No Admission of Liability. Neither the existence of this Agreement nor the conduct 

of any of the Parties shall constitute or be construed as an admission ofliability or an.y wrongdoing 

whatsoever on the part of the Parties. 

6. Internretation. In the case of any uncertainty or ambiguity regarding any part of this 

Agreement, the language shall be construed in accordance with its fair meaning rather than being 

interpreted against the party who caused the uncertainty to exist. 

7. Partie.s in Interest Except as expressly stated in this Agreement, nothing in this 

Agreement, whether express or implied, is intended to confer third-party beneficiary status or to 

otherwise confer any rights or remedies on any person or entity (collectively "Third Parti'), other 

than the Settling Panies. Nor shall any provision hereof afford any Third Party any right of 

subrogation, indemnity, contribution, set-off or action over and against any party to this Agreement. 

8. lnfonned Consent Each Party acknowledges that it has selected~ or been afforded 

the opportWlity to select. an attorney of its choice to review this Agreement and all related matters. 

Each Party declares that such party has received suftlcient infonna.tion. either through such Party's 

own legal counsel or other sources of such party's o\\>n selection, so as to be able to make an 

inteJligent and informed judgment to enter into this Agreement. Each party further states that each 

has read this Agreement in its entirety prior to executing this Agreement~ and that each has executed 

this Agreement voluntarily, with competence and capadty to contract and with knowledge of the 

terms, significance and legal effect of this Agreement By executing this Agreement, it is 

tmderstood by each party that substantial rights may be compromised and! or waived in their entirety. 

9. Attorneys~ Fees. lf any action, motion or proceeding at law or in equity is instituted 

to enforce or interpret the tenns of this Agreement, the prevailing party or parties therein shall be 

entitled to an award of reasonable attorneys~ fees, costs, and necessary disbursements, as determined 

SETTLEMENT AND RELEASE AGREEMENT 

FDIC/Do\1.-ney v. Green, et al. 

Page4 of6 
by a court of competent jurisdiction, in addition to any other relief to which any of the Settling 

Parties may be entitled. 

10. Further Assurances. The Settling Parties shall execute all documents and pelform all 

acts necessary or appropriate to effectuate the performance of this Agreement. 

l L Severabilin:_. It is intended that any portion of this Agreement shall be treated as 

separate and divisible, and if any paragraphs are deemed unenforceable, the remainder shall 

continue to be in full force and effect so long as the primary purpose of ibis Agreement is 

unaffected. 

12. Complete Instrument. This Agreement contains the complete understanding made 

between or among the Settling Parties with respect to the claims being settled and released by this 

Agreement. This Agreement cannot be amended or modified in any manner except by a writing 

executed by each of the Settling Panies or by their valid successor(s). Each of the Settling Parties 

acknowledges that no representations, warranties, covenants, assurances or other promises not 

specifically set forth in this Agreement have been made by any party in connection with the subject 

matter of this Agreement, nor is any party relying on any such conduct in entering into this 

Agreement. Any negotiations or other communications between the Parties .relating to the subject 

matter of this Agreement are of no force or effect and are superseded by this document 

13. ountemarts. This Agreement may be signed in cmmterparts, and each cow1terpart 

shall have the same force and effect as though the signatures were contained in a single document. 

A faxed signature shall be considered an original signature for all purposes under this Agreement. 

14. Time of Es~ence. Time is of the essence of each provision of this Agreement 

wherein time is a factor. 

15. Applicable yw; Jurj§diction; Venue. This Agreement shall be governed by and 

construed in accordance with the laws of the State of Cal ifomia. Venue shall be the state or federal 

courts located in Orange County, California, in accordance with applicable law. 

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SETTLEMENT AND RELEASE AGREEMENT 

FDIC/Dovvney v. Green, et aL 

Page 5 of6 
(b )(6) 

16. Successors and Assigns. The provisions of this Agreement shall bind and inure to 

the benefit of the parties hereto and their respective successors and permiued assigns. 

IN WITNESS WHEREOF, each of the undersigned Settling Parties have executed this 

Agreement effective as of October 4. 201 1. 

.................................. f ................................. ·································· 

DATED: I q !2t> /Z..... 

17 

DATED:. ____ ___ _ 

FEDERAL DEPOSlT INSURANCE 

CORPORATION AS RECEIVER OF 

DOWNEY SAVINGS AND LOAN 

ASSOClATlON, F.A. I ..... .... J .... 

By: David. T. Bartels 

..................... .CP.1(§). 

PastorS. Engkabo dba Engkaoo Appraisal Servi(e 

By: Pastor S. Engkabo 

SETTLEMENT AND RELEASE AGREEMENT 

FDIC/Downey v, Green, et al. 

Page 6 of6 
16. Succe~sors !mQ Assign$. The provisions of this Agreo.tnent shall bind and inure t.o 

the benefit of the parties hereto and their respective successors and pennitted assigns. 

lN WriNESS WHEREOF, each of the undersigned Settling Parties have executed this 

Agreement effe<:tive as of October 4, 2011. 

DATED:. ____________ __ 

~ 4 ..,OJ.., DATED~ .:..; 3-V\ · • A.. 4 I 

FEDERAL DEPOSIT lNSURANCE 

CORPORATION AS RECEIVER OF 

DOWNEY SA VJNGS AND LOAN 

ASSOCIATION, F.A. 

By: David T. Bartels 

Pastor S. En1kabo dba Ellgkabo Appraisal Serviee 

By: PastorS. Engkah<1 

·------------- ---....... - SETtLEMENT AND RELEASE AGREEMENT 

FDIC/Downey v. Green. et al. 

Page 6 of 6