RUSSELL S. READ: SB#108921 0 Box 27 San Luis Obispo. CA 93406 || (805) 927-2344 4 || Atomey for Plainttts 5 SUPERIOR COURT FOR THE STATE OF CALIFORNIA ) 6} IN AND FOR THE COUNTY OF SAN LUIS OBISPO 7 || 8 : 7 8 || KENNETH and GISELA COOPER, husband) Case No.: 9 and wife ) 080448 Plaintiffs. ) VERIFIED COMPLAINT FOR 0 || ) SECURITIES TRANSACTION MADE ~ || vs, ) THROUGH MATERIAL u | ) MISREPRESENIATION: FRAUD | HURST FINANCIAL CORP. JAMESH. AND DECEIT; RECESSION: 12 || MILLER. JR: COURTNEY LEEBRARD |) NEGLIGENCE: BREACH OF (AKA COURTNEY LEE MILLER): and DOES) wRITTEN CONTRACT; NEGLIGENT 5 5 13 || 12°. ; MISREPRESENTATION: arn } INTENTIONAL MISREPRESENTATION| 4 a } REFORMATION OF NOTE AND DEED 7 OF TRUST 5 ) ) UNLIMITED CIVIL 16 ) 7 : 18 |) 19 || _____— 20 PRELIMINARY ALLEGATIONS INCORPORATED INTO ALL CAUSES OF ACTION 21 | 1. Plaintiffs are husband and wife and residence of the County of San Luis Obispo, California, ~~ |\>. Defendant HURST FINANCIAL CORP., (“Hurst”) is and, at all times mentioned in this 23 Complaint, a corporation formed and operating under the laws of the State of California, a m4 licensed real estate corporation (#00825280) with the State of California, with its principal 25 110 | u Defendant JAMES H. MILLER. JR (“Miller) is and, at all times mentioned in this Complaint, was a resident of the County of San Luis Obispo, CA. a real estate broker licensed (#0758060) by the State of California, and the licensed Broker for Hurst. Atall times pertinent to this action, Miller owed Plaintiffs a fiduciary duty to act toward them in utmost good faith: “There exists. and at all times herein mentioned there existed. a unity of interest and ownership between Defendants Miller and Hurst such that any individuality and separateness between them has ceased and defendant Hurst is the alter ego of defendant Miller by virtue of the fact that Miller controls and dominates Hurst and utilizes the assets of Hurst as if they belonged to Miller. Adherence to the fiction of the separate existence of Hurst as an entity distinct from Miller would sanction a fraud and promote injustice in that Hurst has been utilized as a tool with which to defraud PlaintffS and then to dissipate the money instead of using it on the proposed project. Defendant COURTNEY LEE BRARD (AKA COURTNEY LEE MILLER) (“Brard”) is and, atall times mentioned in this Complaint, was a resident of the County of San Luis Obispo. CA. a licensed real estate sales person (#01365761) by the State of California, and the salesperson for Hurst. Atall times pertinent to this action, Brard owed Plaintiffs a fiduciary duty to act toward them in utmost good faith. The true names and capacities, whether individual, corporate, associate. or otherwise of DOES 1 through 20. inclusive are unknown to Plaintiff. Plaintiff sues each such defendant by fictitious name and will seek leave of this Court of amend this Complaint to set forth the rae names and capacities of said defendants when such names and capacities are known. Plaintiff is informed and believes and thereon alleges that each of these defendants is responsible in some manner forthe events and happenings herein referred to and caused injuries and damages approximately thereby as herein alleged.Plaintiff names Does 5-15 pursuant to CCP Section 382 solely for the purpose of allowing the court to determine the interest each may have in the Property (as defined below.) tall times mentioned herein, each of the DOE Defendants 1-5 was the principal, agent. representative. servant and/or employee of one or all of the other Defendants. and the doing the things hereinafter alleged, each Defendant was acting within the scope of his or her authority as such agent. representative, servant, and/or employee. with the permission and consent of the other Defendants, and /or with the ratification of the acts by the other Defendants. On or about October 18. 2005, Plaintiffs executed a Lender/Purchaser Disclosure Statement (“Disclosure”) and Loan Service Agreement LSA”) prepared and delivered to them by Defendants Hurst, Miller and Brard. Accompanying the documents was a proposed note and! Deed of Trust that reflected Plaintiffs" beneficial interest. Pursuant to the Disclosure. Plaintifls purportedly loaned $100,000.00 to D.L.G. Development, LLC (“Borrower”) comprising a portion of undivided interests in the proposed promissory note in the principal amount of $442,000.00, together with interest at the rate of 12.5%. executed by Borrower Security”) secured by certain real property located in the City of Atascadero being a portion of APN #054-051-043 (“Property.”) Plaintiffs are informed and believe and thereon allege that the new APN # for the Property is #054-051-086. Defendant Hurst, Miller and Brard represented to Plaintiffs that the Security and Deed of Trust would reflect their beneficial interest, but these Defendants intentionally or negligently, ‘or both, failed to include their names on the actual Security or the actual First Deed of Trust securing the Security against the Property. Copies of the first page of the Security and Deed of Trust presented to Plaintiffs by Defendants and copies of the first page of the actual Security and Deed of Trust are attached hereto as Exhibit A through D respectively.