SETTLEMENT AGREEMENT AND 

MUTUAL RELEASE 

1. PARTIES: The parties to this Settlement Agreement ("Agreement") are Plaintiff 

FEDERAL DEPOSIT lNSURANCE CORPORATION as Receiver for Downey Savings & l-oan 

Association, F.A. ("FDIC-R,), and Defendant appraisers, ELIZABETH PETERSON 

("Peterson"), THOMAS O'HANLON ("O'Hanlon") and JOHN D. SLINGER (''Slinger'') 

(jointly, "Defendants"). The FDIC-R and Def(mdants .are sometimes herein collectively referred 

to as the "Parties." 

2. RECITALS: This Agreement is made with reference to the following facts: 

2. J Certain claims arose between the Parties concerning an appraisal report 

and a review appraisal report that the Defendants, respectively, prepared relative to a refinance 

loan that Downey Savings & Loan Association, F.A. ("Downey'') approved and funded for 

borrower Terri Lynn Worthy ("Worthy") in December 2005 ("Loan"). 

2.2 The Loan was secured by a trust deed on real property then owned by 

Worthy and commonly known as 8425 Jnnsdale Lane, San Diego ("Subject Property"). Peterson 

and O'Hanlon prepared an appraisal report on the Subject Property. Slinger prepared a review 

appraisal report on the Subject Property. 

2.3 The Loan . was approved and funded by Downey and subsequently 

defaulted. Following a foreclosure sale, the Subject Property, reverted to Downey, resulting in an 

alleged loss to the thrift of over $209,000. 

2.4 In November 2008, the FDJC-R was appointed the Receiver over all of 

Dowoey's assets and liabilities. Among the assets the FDIC-R is charged with trying to recover 

upon is the loss relating to the Loan ("Claims"). 

2.:> The Claims subsequently became the subject of a Complaint 

(''Complaint") entitled FDIC-R v. Amerifund Financial, etc., et al., Case No. SACV11-Q840 

DOC {RNBx), filed by the FDIC-R ("Action") and now pending in the United States District 

Court for the Centra1 District of Califomia, Southern. Division. 

2.6 Defendants filed Answers in response to the FDIC-R's Complaint and 

Defendants have been represented by legal counsel throughout the pendency of the Action, 

including this settlement. 

2.7 By this Agreement the Parties hereto intend to settle and dispose of, fully 

and completely. any and all claims, demands, causes of action, obligations, damages, and 

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SETTLEMENT AGREEMENT AND MUTUAL RELEASE 

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liabilities that arise out of or relate to the Action anq the Claims alleged therein by the FDIC·R 

against the D¢fendants. 

2.8 The federal Deposit Insurance Corporation in its separate corporate 

capacity as the insurer of deposits and bank regulator, and all other federal agencies ofth~ 

United States of Amerlca, are not parties to this Agreement and are not bound in any manner to 

its tmns and conditions. The FDIC-R enters into this Agreement solely in its limited capacity as 

the appointed Receiver of lJQwney Savings & Loan Association, F .A., and no other receivership 

now existing. previously existing or hereafter appointed. 

3. NO ADMISSION RE MERITS OF CLA1MS: The Parties agree that nothing in 

this Agreement, and no performance under this Agreement, shall be construed as an admissio.n 

by any Party of the validity or invalidity of the Claims alleged in the Action; and, the Parties 

agree that this Agreement is entered into solely for tbe purpose of convenience .and to 

oornpromise the disputed Claims the FDIC-Rhas alleged in the Action against the Defendants. 

4. SETTLEMENT TERMS: The Parties agree to the following settlement tenns: 

4.1 · Defendants, through their errors and omissions carrier, shall pay by draft 

payable upon first presentation, the sum of Sixty-Nine Thousand No/100 Dollars ($69,oo0.00) 

within sixty (60) days of the date on which this Agreement is fully executed by all parties. 

4.2 After said payment has been made and funds have cleared, the FDIO·R 

shall cause to be filed a stipulation for entry of an order dismissing the Defendants, and each of 

them. from the Action with prejudice. 

5. MQTUAL RELEASES AND WAIVER OF CIV. CODE§ 1542: 

5.1 In consideration of the Settlement tenns as set forth in Paragraph 4 above, 

and all other promises, covenants and consideration provided for herein, the Parties agree that. 

except as to such rights or claims 8S may be created by this Agreement, they hereby covenant not 

to sue each other ever again on the Claims and the Parties acknowledge full and complete 

satisfaction of, and hereby release, remise, and forever- discharge each other, including their 

. respective insurers, officers, directors, affiliated companies, agents, representatives, spouses, 

heirs, successors or p~decessors in interest, assignees, attorneys. employees and contractors 

from any and all the Claims, demands, counts. obligations, agreements, damages. liabilities, 

losses, co~ and expenses any kind, in law or in equity, whether known or unknown, that 

either Party now holds. or has ever held against the<~ther. or may .hold in the future, that arise out 

of or are in any way connected -with, the Claims alleged in the Action. 

5.2. This Agreement shall be binding on the Parties and on their r~pective 

officers. directors, affiliated compani~s. insurers, agents, representatives, spouses, heirs, 

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SETTLEMENT AGREEMENT AND MUTUAL RELEASE 
successors or predecessors in interest, assignees, attorneys, employees and contractors and shall 

inure to the benefit of the Parties, and each of them. 

5.3 The Parties specifically intend that the release contained in this Agreement 

shall bar all reh:ased claims, including those which are currently unknoV~rn to them. The Parties 

understand and accept the risk that they may later discover a claim encompassed by the Release 

in this Agreement which they did not know or suspect to exist, or which they could. not have 

known or suspected to exist. The Parties hereby specifically waive the protection of Civil Code 

section 1542 wbich reads as follows: 

A general release does not extend to claims which the creditor does not 

know or suspect to exist in his or her favor at the time of executing the 

release, which if known by him or her must have materially affected his or 

her settlement with the debtor. 

The foregoing waiver is ex.pressly limited to the claims held by the Plaintiff, Federal Deposit 

Insurance Corporation as Receiver for Downey Savings and Loan Association, F .A., and no 

other receivership. nor to the Federal Deposit insurance Corporation in its separate corporate 

capacity, as more particularly set for in paragraph 2.8 above. 

6. A'ITORNEYS' FEES: In the event any action is brought to enforce or interpret 

this Agreement, the prevailing party shall be entitled to an award of reasonable attorneys' fees in 

addition to any other relief to which the prevailing party may be entitled. 

7. REPRESENTATIONS AND WARRANTIES: Th~ Parties represent, warrant, 

and agree as follows: 

7.1 The FDIC-R is the lawfully appointed Receiver for Downey and has 

succeeded to and now holds each of the Claims that are the subject of the Action and this 

Agreement. The FDIC-R has the authority to enter into this compromise and settlement of the 

Claims as the Receiver ofDowney. 

7.2 Each of the Parties has received or had the opportunity to seek their own 

independent legal advice with respect to the advisability of executing this Agreement. The 

Parties acknowledge that they have executed this Agreement without fraud, duress, or undue 

influence. The Parties affinn that they have read this Agreement and understand the contents 

hereof. 

7.3 No Party, nor any agent or attorney of ~y Party, bas made any statement, 

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SE1TLEMENT AGREEMENT AND MUTUAL RELEASE 
(b)(6) 

reprcsel'}lation, or pnm:~be 1o ~Y other Party repding ~my facts which the Party has thea fll]iod . 

upoo in entering into this i\sfeement. and the Parties: 11m eacb aftiml that 1bey have not n&d 

l!p9118\J.Y !ltatemcnt, rc~ or promise by any DIIK!r J>eny, m or any qent or l1tiOI'nC)' 1M 

another 'P.arty, in executing thiS Agrtle1'00llt, or irl making the settlement provided for herein. 

extept II$ is expressly JePI'C$ell~ or promised in !his Agreemeat. 

7.4 None .of the Patties have heretofore assigned, l!.'anSferTe4. or granted, or 

pmport~ to 11$$ign, ~.or gmnt, any of1he Claims that arc aUcged In the Acdon. 

7 .S Each Party agrees to execute any additional documents as reasonably 

ctmvenienl, necessacy or dc:llil;tble to carry out the provisions o!tbils Agr:e<:mcnt. 

a. MJSCELLANIOUS: 

8.1 Tbi.s ~ent shall be deemed to have been ex~ lmd deli~ 

within lhcr State of c.Jlfi:lmill. and the rights and obli,eations of the Parties hereto shall bo 

construed and enfoo:ed In a<:«lrdarn:e \vi!h, and governed by, the la>vs of the Slate of California.. 

8.2 This Agreement constitutes a single, integrated written contract expressing 

'ibe entire agreement of the Ptut.ies. This Agreement may only be tnodified 1n 11 writing signed by 

all the Patties. Thi<~ Agreement .ftll be interpreted in aooordanee with the plain meaning of its 

1cnns and not :mietl;r for or againgt eny of the Patties to this Ap~~ement. 

8.3 The proviSions of tb!s A~ are e<mii:HI.ual and not m""' recitals, 

The Agre'aDem sbiiiJ be considered severable. sucb that if any provision or psrt of1he Agreemoot 

is ewe held invalid ll.lld« any lliW or ruling, lhllt proviainn or part af the A8fCement shall remain 

irl force and effect to the extent allowed by law, snd an other provision~ or pans shall remain in 

fill! forte and effect. 

8.4 Tbis Apment m11y be executed ill COIIIIterpal'ts and shall be etfl:clive on 

the date fmrt executed by any l.llle or the Parttes hc:te!o if :10 eltCCttled in c::ountcn"pllrtll (the 

"effective date"). Any signlltllre obtained by facsimile or e-mail shall be as valid as an originol 

signature. An nutbcmtic:ated oopy of this Agreement can be used for any purpose for which the 

!~~:~~~~U'z~ f / 

ELIZABETH PETERSON, tm indl:vldual 

lHOMAS O'HANLON,m.inoxvidual 

DATED: ____ _ 

JOHN D. SLINOER. All individual 

~4oH 
(b)(6) 

representation. or promise to any other Party regarding any facts which the Party hilS then relied 

upon in entering i:nto this Agreement, and the Parties here each affirm that 'they have not relied 

upon any statement. representation br promise by any other Party, m of any agent or anot;ney for 

another Party, in executing this Agreement, or in making the settlement provided for herein. 

except as is expressly represented or promised in this Agreement. 

7.4 None of the Parties have heretofore assigned. tmnsferred. or ~ted, or 

purported to assign. transfer, or grant, any of the Claims that are alleged in the Action. ! 

1.5 Each Party agrees to execute any additional documents as ~onably 

oonvenient, necessary or desirable to carry out the provisions of this Agreement. I 

; 

8. MISCELLANEOUS: I 

8.1 This Agreement shall be deemed to have been executed and delivered 

within the State of California, and the rights and obligations of the Panies hereto :shall ~ 

construed and enforced in accordance with, and governed by. the laws of the State of California.. 

! 

8.2 This Agreement constitutes a single, integrated written contract ~pressing 

the entire agreement of the Parties. This Agreement may only be modified in a writing Sfgned by 

all the Parties. This Agreement shall be interpreted in ac<:ordance with the plain mean~g of its 

tenns and not strictly for or against any of the Parties to tbis Agreement I 

I 

8.3 · The provisions of this Agreement are contracrual and not m recitals. 

The Agreement shall be considered severable, such that if any provision or part of the AiJ~rnent 

is CYa' held invalid under any law or ruling, that provision or part of the Agreement shaii remain 

in force and effect to the extent 11.Uowed by law, and all other provisions or parts shall ~main in 

full force and effect i 

i 

8.4 . This Agreement may be executed in counterparts and shall be effrcuvc on 

the date first executed by any one of the Parties hereto if so executed in counterParts (the 

"effective date"). Any signature obtained by facsimile or e·mail shall be as valid as an original I 

signature. An authenticated cepy of this Agreement can be used for any purpose for Y,.hich the 

. original may be used. """l ~-----, (b)(6) DATED:_. __________ _ 

DATED:-Pit J., J<YC . . ( ' 

DATED: ____ _ 

JOHN D. SLINGER, an individual 

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SETILEME.NT AGREEMENT AND MUTUAL R.ELBASE 
repre~ntation, or promise to an)' other Parry regarding any facts which the Party has then relied 

Upon in entering into this Agreement, and the Parties here each a:ffinn that they have no-t relied 

qpoD any statement, representation or promise ·by any other Party, or of any <\gent or attomey for 

another Party, in ex~uting this AgreententJ or in making the settlement provided for herein, 

CX.i<ept es is expressly represented or promised ·in this Agreetnen:t. 

7.4 None of the Parties have h~retofore assigned, transferred, or granted, o~: 

purported to assi$n, transfer, or grant, any ofthe ClaJms 1hat are alleged in the A,etion. 

7.5 Each Party agrees to execute any additionat documents. as reasonably 

oonvenioot, nocessary.or desimbte to carry c'lit the provisions of this Agreement. 

6. MISCELLANEOUS: 

8.1 This Agreement shall be deemed to have ~l c:xecuted and delivered 

within the Stato of California, and fhe rights and obligations of the Parties beroto shall bo 

construed and enforced in ~ordance with, and govemed by, tlle laws of the State of California. 

8.2 This Agreement constitutes a single, integrated written contract expressing 

the entire agreement of the Parties. This Agreement may only be· modified in a writing signed by 

~11 the P~ies. This Agreement shall be interpreted ill aocord!!llce witb the plain m~iAg ofi.ts 

tent~$ and not strictly for CIT against any ~fthe Parti~s to this Agreement 

8.3 Th<r provisi01;1s ofthis Asreentent ~ contractual and not mere retitals .. 

The Agreement shall be considered scvemble, su~b tfiat lf lin)' prQVision or part of tbe Agreement 

is e:ver beld tnvalid :under any law or ruting, that provision or part of the Agreement shall remain 

tn force and effect to the extent llllowed by law, and nil other provisions or parts shall onnaio in 

full force aDd effect. 

8.4 . This Agreanent may be executed in cou'nterparts and shall be effective On 

the date first exeouted by uy one of the Parties hereto if so ~xecuted in cotm1erpartS (the 

"effective date"). Any signature nbtained by fa0$imile or e-mail shall be as valid as an original 

signawre. An 11UtbentiQatcd copy of this Agreement can be used for any purpose for which the 

original may be used. 

DATED: 

ELIZABETH PETERSON) an individual 

DATED:-----

DATBD: S/:,P. 

JOHN D. tfrJINGBR, an individual 

Pago4 ofS 

SETTLEMENT AGREEMENT AND MUTUAL RELE.ASE 

(b)(6) 
(b)(6) 

(b)(6) 

APPROVED AS TO FORM: 

HERSHOR.IN & HENRY LLP 

C. WILCOX 

FEDERAL DEPOSIT JN:SURAN:CE 

CORPORATION, as Recel\ler for Downey ·savings 

&L~~~~----------~ 

meys for Federal Deposit Insurance 

oration as Receiver for Downey 

'-------'Qavings & Loan Association, P.A. 

?r:-:-:---·: . • ROB ~N 1tbl(6) 

Attorneys for Dcfom!Mts;'------' 

Elizabeth Pe.terson. Thomas O'Hanlon 

AndJobn D. Slin~er 

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SElTLEMENT AOREEMFNT AND MVTUAL R.ELEASE . . 

(b)(6)