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Mirch Law Office Kevin J. Mirch, Esq. SBN 106973 Marie C. Mirch, Esq. SBN 200833 444 West C Street, Suite 320 San Diego, CA 92101 (619) 501-6220 (619) 501 6980 fax Attorneys for Plaintiff IN THE SUPERIOR COURT FOR THE STATE OF CALIFORNIA

8 IN AND FOR THE COUNTY OF LOS ANGELES 9 VAN NUYS COURTHOUSE EAST 10 Michael Winston, 11 Plaintiff, 12 v. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1. of California. 2. Defendant, Countrywide Financial Corporation, (“CFC”) is a Delaware corporation, 1 PARTIES Plaintiff, Michael Winston, at all times relevant hereto was a resident of the State Defendants. ______________________________________ Countrywide Financial Corporation, a Delaware corporation, Bank of America Corporation, a Delaware Corporation, Bank of America Home Loans, Red Oak Merger Corp. Countrywide Home Loans, Inc. Leora Goren, an individual, Sandor Sanders, an individual, Angelo Mozilo, an individual, Eric P. Sieracki, an individual, David Sambol, an individual, Andrew Gissinger, III, an individual, Tapo Canyon Investors, LLC, a California limited liability company, DOES 1 through 100, ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) CASE NO. LC085895

SECOND AMENDED COMPLAINT FOR DAMAGES (UNLIMITED CIVIL - amount in controversy exceeds $1,000,000.00)

Plaintiff, Michael Winston, by and through his attorneys of record, Kevin Mirch and Marie Mirch, alleges, avers and complains as follows:

Second Amended Complaint

which at all time relevant hereto maintained it its principal place of business at 4500 Park Granada 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 Second Amended Complaint 2 Blvd., Calabasas, CA 91302 and doing business in Los Angeles County. 3. Defendant Countrywide Home Loans, Inc. at all times relevant hereto is a unit of

Countrywide Financial's mortgage banking segment. It originates and invests in correspondent, consumer, and wholesale mortgage loans. 4. Countrywide Home Loans was historically the flagship mortgage origination

subsidiary of its parent, but Countrywide Financial over the years transferred virtually all loan production responsibilities to Countrywide Bank. 5. Countrywide Financial was acquired by Bank of America in 2008, and renamed

Bank of America Home Loans in 2009. 6. Defendant, Bank of America Corporation, (“BAC”), is a Delaware corporation, with

its corporate headquarters located at 100 N. Tyron Street, Charlotte, North Carolina 28255, and which systematically and continually conducts business throughout the United States, California and Los Angeles County. 7. Defendant Red Oak Merger Co is a holding company doing business in California

and created as a vehicle to transfer assets and liabilities from CFC to the Red Oak holding company to protect assets of CFC and to insulate BAC from any assumption of CFC liability for questionable business practices. 8. Bank of America Corporation acquired Defendant, Countrywide Financial

Corporation in 2008, and bought the company including all of CFC’s assets and liabilities, utilizing the Red Oak Holding Company. This included any claims and potential claims against the CFC which BAC admitted it factored into the purchase. Bank of America Corporation, as the acquiring company assumed the responsibility to address pending and future litigation against CFC. 9. On August 23, 2007 BAC announced a $2 billion repurchase agreement for

Countrywide Financial. The acquisition of CFC by BAC was initiated on or about 2007. The deal was structured to merge Countrywide with the Red Oak Merger Corporation, which Bank of America created as an independent subsidiary. Industry analysts at that time suggested that the deal was structured this way to prevent a potential bankruptcy stemming from large losses in

Countrywide hurting the parent organization BAC by keeping Countrywide liabilities remote. 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 Second Amended Complaint 3 10. On July 1, 2008, Bank of America Corporation completed its purchase of

Countrywide Financial Corporation. This purchase made it the USA's leading mortgage originator and service, controlling between 20 to 25 percent of the home loan market. Upon information and belief, Bank of America absorbed the best assets, including Countrywide Bank, while the debt remained with a new company created by the merger, Red Oak Merger Corp.. 11. Bank of America, Countrywide Financial, and their affiliates and subsidiaries may

have established yet additional entities which may have assumed assets, liabilities, contractual obligations, or other obligations or benefits of the parent companies CFC and BAC. At such time as the identity and role of any of these unnamed entities is discovered, Plaintiff will seek leave to amend to add them as parties. 12. BAC was aware of the improper transfer of assets in lieu of creditors by CFC, and

upon information and belief participated in and facilitated the same through the use of multiple entities. 13. BAC ultimately distanced itself from the Countrywide “brand” and negative business

culture, renaming Countrywide Financial Bank of America Home Loans. 14. Bank of America Home Loans is a subsidiary or affiliate of BAC doing business in

the State of California. 15. Defendant, Leora Goren, at all times relevant hereto was a resident of Los Angeles

County, and held the position of Chief Human Resources Officer of CFC. 16. Defendant, Sandor Sanders, at all times relevant hereto was a resident of the State

of California and held the position of Chief Legal Officer of CFC. 17. Defendant, Angelo Mozilo, at all times relevant hereto was a resident of the state of

California, and doing business in Los Angeles County as Founder, Chairman, and Chief Executive Officer of CFC. 18. Defendant, Eric P. Sieracki, at all times relevant hereto was a resident of the State

of California and held the position of Chief Financial Officer of CFC. 19. Defendant, David Sambol, at all times relevant hereto was a resident of Los Angeles

County and held the position of President and Chief Operating Officer of CFC. 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 Second Amended Complaint 4 26. 23. 20. Defendant, Andrew Gissinger, III, at all times relevant hereto was a resident of the

state of California and held the position of Executive Managing Director at CFC. 21. Defendant, Tapo Canyon Investors, LLC is a California limited liability company

doing business in Los Angeles County, California. Tapo Canyon Investors, LLC owns the real property located at 1757 Tapo Canyon Road, Simi Valley, Ca. 22. The true names and capacities of Defendants named herein as DOES 1 through 100

are unknown to Plaintiff, who therefore sues said Defendants under such fictitious names. Plaintiff will amend this Complaint to allege their true names and capacities when these have been ascertained. Plaintiff is informed and believes, and therefore alleges, that each of the fictitiously named Defendants is responsible in some manner for the occurrences hereinafter alleged, and that Plaintiff's damages as hereinafter set forth were proximately caused by said Defendants. At all times mentioned, unless otherwise stated, each Defendant was the agent and employee of every other codefendant, and in doing the things, acts and omissions hereinafter more fully alleged, was acting within the scope and authority of said agency and employment. FACTS Plaintiff is a senior executive with top-level experience across a spectrum of business

sectors including financial services, high technology and aerospace. Plaintiff is regarded as a strong leader, business partner, and change agent with extensive experience in management and organization appraisal and development, strategic planning, large-scale organization change and talent management/succession planning. 24. Plaintiff has held top functional jobs at Motorola, Merrill Lynch, McDonnell Douglas

and Lockheed Corporations. 25. Plaintiff adheres to business ethics that are beyond reproach, utilizing his extensive

education, experience, and expertise in the area of corporate management of Fortune 500 companies. Recruitment and Employment of Mr. Winston Having established himself as a leader and gaining world-wide recognition in his

field, Plaintiff was often the target of recruitment for large, publicly traded corporations.

27. 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

Prior to accepting employment with CFC/CHL, Plaintiff was recruited by BAC.

Plaintiff had not solicited this recruitment by BAC. 28. Shortly thereafter, on or about 2005, Plaintiff was recruited for employment by

Countrywide Home Loans, Inc. (CHL) division of CFC headquartered in Calabasas, CA. 29. In an offer letter dated April 18, 2005, CFC touted CHL to Plaintiff as “a dynamic

and innovative industry leader and world class organization that delivers world class products and services both domestically and internationally”. A copy of this letter is attached and incorporated into this complaint as Exhibit A. 30. Plaintiff would later learn that the representation of CFC as an ethical industry leader

that delivered world class products was false. In fact, the Securities and Exchange Commission has filed a complaint against senior executives Angelo Mozilo, David Sambol, and Eric Sieracki, alleging that from 2005 to 2007 these mislead the business market by “ falsely assuring investors that Countrywide was primarily a prime quality mortgage lender which had abounded the excesses of its competitors”1. 31. Mr. Winston accepted this offer of employment, and the parties acted in accordance

with the term therein, thus forming an employment contract. 32. In reliance of the promises made by CFC, Plaintiff relocated his family to accept

a position as Executive Vice President, Learning Systems. Plaintiff purchased a home in Thousand Oaks. California. 33. Plaintiff was given a sign-on bonus of $150,000 to induce him to accept the job.

However, the salary that was offered was significantly less than his prior salary history. 34. Plaintiff’s past prior three corporate roles offered compensation packages of a

minimum of $650K and a maximum of 1.2M. 35. CFC assured Plaintiff a significant portion of his compensation would be paid in

stock options which had significant current value and enormous growth potential. Plaintiff was told

Plaintiff asks this Court to take judicial notice of the Complaint for Violations of the Federal Securities’ Laws filed in the United States District Court, Central District of California , case number CV09-03994, attached hereto as Exhibit B. Second Amended Complaint 5

1

that his stock package alone was worth more than $5M. These statements were made by Leora 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 Second Amended Complaint 6 Goren on or about February, 2005. This was confirmed in a conversation with the former Head of Executive Compensation, Charles Quon, both in May of 2005, and again in June, 2008. Because of malfeasance, breach of fiduciary duties, abuse of control, mismanagement, greed and ineptitude of CFC executives and officers, the stock options eventually became worthless. 36. Plaintiff was promised this was a long-term commitment. Based on these

representations made multiple times by Leora Goren, Plaintiff made a permanent relocation, purchasing a home with a cost basis in excess of $1.8 M and subsequently recruited several of his former staff members to relocate their entire families across the country to join him at Countrywide. 37. On May 9, 2005, Plaintiff began his service as Executive Vice President, Learning

Systems for Countrywide Financial Corporation, Countrywide Home Loans headquartered in Calabasas, CA. 38. The promises that were made prior to Mr. Winston’s acceptance of employment at

CFC/CHL were repeated regularly by Leora Goren, Charles Quan, Rich Billingsley, Andrew Gissinger, and Angelo Mozilo from 2005 to 2008. 39. Plaintiff was promoted on August 1, 2005 to Executive Vice President. Chief

Leadership Officer of Countrywide Financial Corporation. This was the highest functional position in the Corporation (almost $25B ) worldwide on the issues of organization structure, executive succession planning, leadership development and the management of change. Plaintiff was also charged with creating world-class executive, leadership, skills and organization development initiatives for Countrywide Financial employees. 40. Plaintiff was assured that he could freely implement his business model which he had

co-developed and utilized during his tenure at Motorola. That business model, the “six-sigma” model had gained worldwide acclaim as the recognized standard for a business model for successful operation of a publicly traded Fortune 500 company. Plaintiff intended to implement this model into CFC which had approximately sixty five thousand employees. 41. his goals. Plaintiff was continually assured he would have adequate funding and staff to achieve

42. 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 46.

Plaintiff justifiably relied on the aforementioned representations in deciding to

continue his employ at CFC/CHL, and in recruiting former team members from his previous employment to relocate join him at CFC/CHL. 43. In April, 2006, the entire slate of Executive, Leadership and Management

Development initiatives designed, developed, and created by Plaintiff’s newly-created team (ECLO) was reviewed, endorsed and budget-approved by the President and Chief Operating Officer and the Chief Human Resources Officer of Countrywide Financial Corporation. Both Stan Kurland, then President, and Leora Goren, signed a strong letter of long-term advocacy that became the cover of the Catalog of ECLO programs. 44. In May, 2006, Plaintiff met for almost two hours with Angelo Mozilo, Founder,

Chairman and Chief Executive Officer of Countrywide Financial Corporation. Mr. Mozilo expressed his delight at the breadth and depth of Plaintiff’s new development offerings as reflected in the Enterprise Chief Leadership Office (ECLO) Catalog. Mr. Mozilo gave his wholehearted endorsement and agreed to speak at the launch of these new initiatives. 45. On June 28, 2006 the launch of Plaintiff’s broad slate of initiatives was personally

endorsed before an audience of over one hundred key executives by the Founder, Chairman and Chief Executive Officer of Countrywide Financial Corporation, Angelo Mozilo and the newlyappointed President and Chief Operating Officer, David Sambol, Chief Legal Counsel Sandor Samuels, Andrew Gissinger, President of Countrywide Home Loans, and Leora Goren, Chief Human Resources Officer, each of whom gave strong, positive testimonials about Plaintiff, his team and their efforts. Problems with building facilities Plaintiff and his team were moved into the Simi Valley facility in early June, 2006.

Since their arrival, Plaintiff and his team had informed management about concerns for the health and well-being of employees. 47. Since occupying the building, CFC employees have been complaining about the dirt

and dust particles, noise, odors, etc. as the building remained a construction zone while people were attempting to work in the building. Plaintiff’s team drafted a document entitled "Speed Bumps on

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the Road to Productivity" and distributed to Leora Goren, Senior Managing Director, and Chief 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 Second Amended Complaint 8 Human Resources Officer and her boss, Marshall Gates, SMD and Chief Administrative Officer. The report informed them of "Current working conditions at Tapo in construction leading to headaches and respiratory problems". 48. Leora Goren, Chief Human Resource Officer, was specifically informed of the above in a document entitled "Speed bumps and Productivity Anchors" that "Current working conditions at Tapo in construction leading to headaches and respiratory problems.". 49. Plaintiff met with Leora Goren and Marshall Gates to explain the severity of the

health and safety issues. No action was taken. 50. On July 17, 2006. Plaintiff was promoted a second time, to Managing Director, Chief

Leadership Officer. An announcement was distributed by Plaintiff’s manager, Leora Goren (Chief Human Resource Officer) commending Plaintiff on his "well-deserved promotion". 51. Just two weeks later, Plaintiff was compelled to call attention to workplace and safety

issues after being subjected to noxious fumes in his office which caused a combination of nausea, dizziness, head and stomach ache, and difficulty breathing. Plaintiff experienced a profound and immediate cause and effect irritating his lungs and throat. Plaintiff’s assistant, Kristen Hatmaker, went into Plaintiff’s office to investigate and immediately became ill with similar symptoms. Scott Mumby, Senior Vice President, also stepped into Plaintiff’s office and noticed the orange/ pink cloud and smelled toxic fumes. The same symptoms were also experienced by Plaintiff’s daughter Chelsie, who was serving as an intern, and others on Plaintiff’s team. Plaintiff asked his assistant to call the Safety office urgently as he believed his area and, perhaps, the building his area might be unsafe. Plaintiff soon left the area and did not reenter except to pick up his things at the end of day. Mr. Winston then noticed that in the construction area near his office, swathes of orange/pink insulation were on the floor awaiting installation. Insulation releases toxins, vapors and particles in the air. Mr. Winston called the building manager, who dismissed the event as an “isolated incident.” 52. Later that day, Plaintiff attempted several times to file a formal report with the

company. His report was successfully filed the following day. 53. On or about the same day, Jeffery Ward, an Executive Vice President in the Tapo

building noticed that the air was "toxic" and called his manager, Charles Quon, Managing Director, 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 Second Amended Complaint 9 Compensation to request permission to send Mr. Ward’s employees home for the remainder of the day as he believed the air was unsafe and employees were complaining of adverse symptoms. Mr. Quon agreed that Mr. Ward's employees should be dismissed. Mr. Quon subsequently stated to Mr. Winston that he got "raked over the coals" by Leora Goren for allowing people to leave prior to the end of the business day, even with the present threat of "toxic air". 54. On July 27, 2006, Plaintiff requested a form from Gabriela Lopez-Finch, Facilities

Manager to report the incident to Cal/OSHA. 55. On August 6, 2006, given Plaintiff’s belief that work conditions in the Tapo Road

buildings were neither safe nor healthful, Plaintiff filed a report with CAL-OSHA. Plaintiff spoke to Paul Green who said he would refer the case to Andrea Minea, Van Nuys district supervisor. 56. 57. An inspection was done by a private company, ATC. On August 3, 2006 Leora Goren, Chief Human Resources Officer (Plaintiff’s direct

boss) distributed a letter to the workforce pronouncing that the building on Tapo Canyon Road was safe, healthy and within acceptable levels on all chemicals on August 3,2006 at 6:30 AM. 58. 59. However, the report from the outside company was not issued until August 7. Leora Goren issued her statement four days before she received the report. Plaintiff

questioned her about this while at a meeting in the CFC Learning Center on the morning of August 3, 2006. Ms. Goren told Plaintiff she just wanted to prevent people from panicking. Later that same day, Plaintiff passed Dave Sambol, President and COO of Countrywide Financial in the hall. Whereas previously Mr. Sambol had been cordial, often friendly, to Plaintiff, he walked past Plaintiff as if he were looking through Plaintiff. It was clear to Plaintiff that Mr. Sambol had been informed about the toxic air incident and was upset rather than be pleased that Plaintiff, an Officer of the Corporation, was ensuring the health and safety of CFC employees. 60. Mr Sambol, President and Chief Operating Officer, along with several members of

the Executive Management Committee are documented as having praised Plaintiff and his team. 61. All letters generated by Leora Goren and the Facilities officer to the workforce stated

that tests were done to identify the presence of all dangerous chemicals. Yet, the “limitations”

section of the report states on page ii, "Other possible building material hazards such as asbestos 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 Second Amended Complaint 10 65. content in building materials and lead- based paint were not included as part of this evaluation." It goes on to state... "Other unidentified source of indoor air quality complaints may be located within walls, ceiling cavities, below flooring or grade, and other non-accessible areas." 62. The independent outside company noted the Company's attempts to repair the area

quickly and stated in their report, "In the construction areas adjacent to the occupied offices, polyethylene sheets were formerly hung at the entrances to prevent dust and debris migration into the workspaces (based upon their examination of the area 4 days earlier); however, at the time of ATC's site visit, “the plastic had been removed to facilitate installing the doorways.” 63. Plaintiff is informed and believes that CFC went to extraordinary efforts to clean up

the facility prior to inspection. For example, immediately after the toxic air incident all desks were "wiped down" by the facilities department, in an attempt to destroy evidence. This “wipe-down” process was conducted several times. 64. Upon information and belief the unsafe and unhealthy building conditions existed

and were concealed to the final day of Plaintiff’s employment. Moody’s Investor Service Report On multiple occasions during November and December, 2006, in meetings with

Leora Goren, the Human Resource staff under Leora’s direction and the President and COO of Countrywide and others in the Executive Committee, Plaintiff learned that CFC had received an adverse, unfavorable corporate governance report from Moody's. Among the things for which CFC was cited were as follows: * Unsuccessful CEO succession * Excessive compensation * Director pay out of line with peers. 66. These were the same issues Plaintiff had been imploring Executive Management to

address virtually since his arrival which were rejected by management. 67. During his tenure at CFC, Plaintiff submitted proposal after proposal which, if

implemented, would have put the company in full compliance.

68. 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 70. 71.

On November 20, 2006 Plaintiff was asked to create an affirmative response to those

performance elements which had lead to the adverse ruling. Plaintiff submitted a number of papers which accurately characterized the company's actions and committed to an aggressive plan to redress shortcomings in governance. 69. Again, CFC and its management retaliated against Plaintiff for his honesty and for

refusal to mischaracterize company practices in the face of an adverse audit finding on corporate governance issues. The project was immediately pulled from Plaintiff, and given to a much junior person with no experience in these matters, budgetary support was further cut, and Plaintiff was again isolated from his peers. Change of Control On August 23, 2007 BAC decided it was going to acquire CFC. In January, 2008 Bank of America announced its plan to take control over

Countrywide Financial Corporation as of July, 2008. 72. In February 26, 2008, Plaintiff attended a meeting with Leora Goren who informed

Plaintiff that he had failed to impress the executives from Bank of America (which was buying out CFC) and therefore Defendants Leora Goren, CFC and Bank of America removed 3/4 of Plaintiff’s professional staff from him. This was a continued pattern from Ms. Goren. 73. 74. Ms. Goren had prevented Plaintiff from meeting with company executives. Ms. Goren did not inform Plaintiff of several meetings and a reception to which Mr.

Winston attendance was expected. 75. Upon information and belief, Ms. Goren had been planning a reason to terminate

Plaintiff for 18 months. Defendant Goren further informed Plaintiff that his staff would thereafter report to Natalia Johnson, a junior subordinate with no experience in Plaintiff’s discipline. 76. Plaintiff was left with a skeleton staff of only two people, while those who had

assumed his duties were given an increased staff and budget. 77. On or about, February 28, 2008 Natalia Johnson insisted on being present in

Plaintiff’s staff meeting announcing that the team will move to her supervision. At the time, she was two levels below Plaintiff.

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78. 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 j. i. h. g. f. e. c. d. b.

On or about June 20, 2008, in a telephone conversation, Leora Goren informed

Plaintiff that Bank of America was severing his employment within thirty days of the change of control from CFC to Bank of America. 79. a. Defendant Leora Goren interfered with Plaintiff’s employment as follows: Ms. Goren cancelled an appointment Plaintiff made with the President of the Company. Ms. Goren changed Plaintiff’s completed performance review of one of Plaintiff’s direct reports. Ms. Goren changed the performance rating on Plaintiff’s direct reports. Ms. Goren lowered by 75% the bonus of one of Plaintiff’s direct reports who had been promised a large award as recognition for his promotion to Executive Vice President in summer 2008. Ms. Goren and CFC froze Plaintiff’s budget after encouraging him to do a "road show" announcing new initiatives, such that he could not do the initiatives he had just been asked to “advertise.” Note this is while the individual who had taken control of his prior programs had been given a head count and budget in several multiples of that which Plaintiff was given for the same task at significantly higher quality. Ms. Goren and CFC lowered Plaintiff’s bonus by almost 50%, despite the fact that they had promised a substantial increase in Plaintiff’s bonus one year earlier. Ms. Goren and CFC allowed Bank of America executives to interview Plaintiff’s key direct reports without consulting or informing Plaintiff. Ms. Goren harassed Plaintiff about agreeing to deliver a speech for which he was contractually obligated, which was known by Ms. Goren for six months prior. Ms. Goren “forgot" to invite Plaintiff to an important reception for Executive Management of Bank of America. Ms. Goren "forgot" to have Plaintiff meet with BAC executives as was CFC’s promise and obligation to explore whether comparable employment would be secure

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in the acquiring company. 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 Second Amended Complaint 13 80. k. l. The quality and quantity of Plaintiff’s assignments were diminished dramatically. Plaintiff ultimately was terminated Spurning Mr. Winston’s attempt to implement his business model Plaintiff saw CFC as a company with problems that could be fixed, was motivated

to implement change, and intended to utilize his education, talents, expertise, experience and ethics to benefit CFC/CHL. 81. To achieve this goal, Plaintiff continually scrutinized the business operation of CFC

in order to identify and address the strengths and weaknesses of the corporate operation. 82. In December, 2005, after only six months with CFC, it was apparent to Plaintiff that

the organizations were not properly structured and that people were incentivized to pursue the wrong targets (i.e. quantity of loans over quality of loans). The Production Management Group was

headed by Andrew Kissinger and was the largest operating unit in CFC. Plaintiff created a number of proposals designed to build on key strengths and address critical weaknesses in the organization. These proposals were submitted to Andrew Gissinger. 83. Plaintiff told Mr. Gissinger that he disagreed with the goal to have 100k employees

in order to meet Mr. Mozilo’s desire to increase CFC’s market share of the residential mortgage market. Plaintiff submitted proposals that focused on quality rather than quantity and management that rewarded excellence rather than just production numbers. Specifically, Plaintiff proposed to show CFC how to change CFC and CHL to a structure that had been successfully in place at Motorola, and was the flagship business model utilized by many large Fortune 500 companies, known as the “six sigma business model”. 84. Plaintiff was one of the founders of the six sigma movement, and had presented a

number of speeches nationally and internationally on his business model. 85. During 2005, Plaintiff became aware with disgust of CFC’s complacency with

promoting “NINA” loans (no income no asset) which were used to achieve CFC’s increase in market share. In fact, CFC staff commonly joked that the only requirement for getting a loan at CFC was a pulse, and one member of executive management drove an expensive sports car with a

license plate “FUND-EM”. 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 Second Amended Complaint 14 e. d. c. b. 86. 87. Plaintiff questioned this practice, but his concerns were rebuffed by management. Plaintiff also created a corporate governance plan that addressed executive

management succession. This plan was also ignored by CFC management. 88. From 2006 up to the date of his termination in 2008, Plaintiff expressed his concern

and/or displeasure with the following course of business activity: a. Mishandling and concealment of the building safety issues, including declaring the building safe without full testing of the environment, and absence of any testing for asbestos; wipe-down of the facility prior to third party inspection, failure to fix the toxic air problem, and concealment of the safety hazard up to July , 2008; Propriety of basing the CFC/CHL business model on quantity of product rather than quality (i.e. NINA loans), employee incentives for volume of sales from 2006 - 2008; Inadequate to non-existent business model for a fast growing company with 65 thousand employees, including concern with the absence of an executive succession plan, and the company continuing to operate upon the departure of its former CEO without a successor; Disagreement with CFC’s response to the adverse Moody’s report. Plaintiff knew CFC’s response was a gross misrepresentation of the history of the executive succession plan; and Ms. Goren’s refusal or inability to provide the same; questioning the absence of a CEO on a publicly traded company (CFC) for a period of months; excessive compensation of CFC executives that was far greater than individuals in executive positions in Fortune 500 companies. Plaintiff’s refusal to author a fabricated response to the Moody’s Report. CFC did everything to protect its corporate image in order to buy time to prolong the concealment and misrepresentation of the CFC to investors, international corporate stage, and employees. The concealment enabled senior executives to sell their stock at inflated market rates for their own personal gain, including alleged insider trading. This conduct lead to the destruction of the Countrywide brand to a point that the

name “Countrywide” is now recognized as ground zero of the current financial crisis. 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 Second Amended Complaint 15 89. h. g. Anyone who has ever worked for Countrywide , including Plaintiff, is now black balled from the corporate world because of CFC and its executive’s malfeasance. Questioning the cancelling of programs, removal of staff and funding of Plaintiff’s initiatives by up to 80%, when the corporate directive was for a mock plan of 5-15% reduction per department. At the same time Plaintiff’s staff and budget were cut, Mr. Winston’s team and a budget far greater than that tagged for Plaintiff’s programs was delegated to another employee, Josh Clarin. The decrease in staff and budget continued until 2008 when Plaintiff was left with a skeleton staff that was unaware of the ongoing fraud, In 2008, questioning the propriety of sudden removal documents, of assets, including

from CFC prior to the merger with BAC, which Plaintiff later

discovered upon information and belief were being transferred and concealed in a “shell” entity bearing the name “Red Oak” or “Red Oak Merger holding company” Defendants spurned Plaintiff’s efforts to strengthen the business practices at

CFC/CHL and retaliated against him. The retaliation was not only related to Plaintiff’s reporting the safety issues of the workplace, but continued regularly to curb Plaintiff’s discovery and vocalization of what Plaintiff deemed questionable, substandard or improper business practices. 90. The retaliation against Plaintiff was initially in response to Plaintiff’s report of the

toxic air incident, but a continued campaign against Plaintiff to isolate him from the business practices at CFC/CHL. 91. CFC executives expressed concern regarding Plaintiff’s concerns and agreed to

implement a plan to discourage Mr. Winston’s efforts; to stifle Plaintiff’s participation in programs and initiatives which Plaintiff himself had developed with his team; to isolate Plaintiff from the business activity as much as possible to prevent Mr. Winston from discovering, reporting, and/or challenging questionable or substandard business practices. 92. The directive of management and actions of Gissinger, Samuels, and Goren were

clearly designed to frustrate, embarrass, and humiliate Plaintiff to the point where he would leave.

93. 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 95.

Having recruited team members to move to the west coast to join his team at

CFC/CHL, Plaintiff refused to acquiesce to CFC/CHL, and management’s efforts to leave CFC/CHL’s employ. Nevertheless co-workers recognized the disparate treatment and one, Natalia Johnson, asked Plaintiff as to why he was still there in light of the continued mistreatment. 94. Plaintiff met with Leora Goren, Drew Gissinger, and/or Sandor Samuels on several

occasions in 2006 - 2008 to complain of this retaliation. Ms. Goren denied that she was retaliating against Plaintiff, Messrs Gissinger and Samuels ignored Plaintiff’s concerns. Retaliation against Mr. Winston Plaintiff was subjected to severe, extreme, and prolonged retaliation for voicing his

concerns at CFC/CHL. 96. The retaliation started with the toxic incident, but grew as management realized that

Plaintiff’s high intellect, business expertise, and unwavering commitment to business and ethical excellence could uncover the complacency of the established business practices of CFC. 97. Upon information and belief, CFC Executive Management issued orders, written

and/or verbal to “get rid of this guy”. Those orders were given to Plaintiff’s supervisor, Leora Goren. 98. On September 1-4, 2006 while Plaintiff was out of town on a business trip to the

Harvard Business School, CFC and its management terminated all of Plaintiff’s programs and instructed Plaintiff’s team members to report to supervisors other than Plaintiff. 99. From September 2006 to on or about August, 2008, Plaintiff was the victim of

retaliation in the following forms: a. b. c. Removal of duties Significant reduction of staff Immediate and obvious attempts to take apart and redeploy Plaintiff’s

staff and unemployee Plaintiff. d. Cancellation of all programs created by Plaintiff’s team. These

programs were award-winning and had been endorsed by the Founder, Chairman, CEO and Executive staff of CFC.

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e. 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

Assigning Plaintiff’s programs to another team and providing funding

and staffing in excess of what Plaintiff had been afforded. f. Plaintiff’s budget was reduced by 80%, while the “replacement team”

received an increased budget far more than that assigned to Plaintiff.. g. h. i. j. Plaintiff was excluded from key meetings Plaintiff was alienated from peers and co-workers Plaintiff was completely ostracized at the workplace. Plaintiff did not receive the salary increase which was promised with

his promotion to Managing Director. k. Plaintiff did not receive the significant increase in bonus that had

been promised by both Ms. Goren and Mr. Gissinger. His following bonus was actually lowered. l. Plaintiff was relocated to four different buildings in four

geographically disparate cities over the next seven months. m. Plaintiff was relocated to two additional sites in the ensuing months.

One week, Plaintiff was told to physically relocate to a certain building, which he and his team did. Later that same week, Plaintiff was instructed to move again to another building. n. Defendants interfered with Plaintiff’s decades-long relationships he

had with world-renowned business experts o. Plaintiff’s successor was given a staff and budget that were many

times greater than Plaintiff had. p. q. Plaintiff was ostracized, omitted from meetings. Plaintiff’s salary increases and stock grants were consistently below

that which was promised. r. Plaintiff’s outside speaking engagements were scrutinized and

CFC/CHL attempted to censor any reference to CFC in public speaking engagement.

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s. 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 28 100.

Despite having assured Mr. Winston in December, 2007 that he was

considered an invaluable asset chosen to continue his excellence with the company, CFC and Leora Goren interfered with Mr. Winston’s prospective employment with B of A. t. Plaintiff was terminated.

Upon experiencing the early stages of such retaliation, Plaintiff immediately filed

a complaint about this with the Legal Department of Countrywide, and was assured that it would be addressed by the proper department, agency, or entity. 101. Plaintiff’s complaint to the Legal department was delegated down to a junior staff

person several levels below Plaintiff. 102. 103. The Chief Legal Officer for CFC was Sandor Samuels. From January 2008 to July 1, 2008, Plaintiff met on at least two occasions with

CFC’s chief legal counsel, Sandor Samuels, again to address the continued retaliation against Plaintiff. Mr. Samuels inquired as to whether Plaintiff had consulted an attorney, and asked Plaintiff how much money it would take to make Plaintiff happy and end the relationship amicably. 104. The irresponsible, retaliatory and vindictive actions taken by Executive Officers of great financial, professional and

Countrywide Financial Corporation have caused Plaintiff

emotional harm and a significant loss of stature amongst professional colleagues. 105. CFC management’s malfeasance, arrogance, and dismissal of any criticism directed

at the corporate policies, procedures, executive compensation, lending practices, ultimately fueled the failure of CFC, and CFC’s fall from corporate grace, to the point that Plaintiff now is unable to secure any employment because of the taint of being affiliated with Countrywide. Countrywide has refused to acknowledge that Mr. Winston was one of the executive employees that tried to correct the business affairs at CFC. Instead, management, through their own greed, malfeasance, and misconduct have destroyed the “Countrywide” name, which has now made it impossible for Plaintiff to gain employment. 106. The consistent punishment, intimidation, humiliation and alienation by Defendants

was retaliation for his reporting of the ongoing workforce health and safety issues.

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107. 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

Defendants’ egregious conduct is a common law tort in the State of California and

is against public policy. 108. It is the public policy of California that employers may not terminate or otherwise

discriminate against or punish employees on account of an employee’s having opposed, or objected to, employment practices declared unlawful by the Government Code, Workplace Health and Safety. It is also the public policy of California that employers may not terminate or otherwise discriminate against or punish employees on account of an employee's having attempted to take steps to prevent workplace health and safety infractions from occurring. This policy is embodied in, among other places, Government Code Sections 12940(h). 12940(j), and 12920. Plaintiff falls within the class that is protected under common law as well as statutory law that protects employees that disclose workplace violations to a governmental agency. protection. 109. It is also a violation of public policy to operate a corporation which fails to meet the As such, Plaintiff is entitled to whistle blower

most basic corporate safeguards and to promulgate fraud, misrepresent employment opportunities to solicit an employee to relocate. These policies are embedded in, but not limited to the following federal and state statutes: Sections 20(b), 20(d)(1), 20(e) and 22(a) of the Securities Act of 1933 ("Securities Act"), 15 U.S.C. §§ 77t(b), 77t(d)(1), 77t(e), and 77v(a), and Sections 21(d)(1), 21(d)(2), 21(d)(3)(A), 21(e), and 27 of the Securities Exchange Act of 1934 ("Exchange Act"), 15 U.S.C. §§ 78u(d)(1), 78u(d)(2), 78u(d)(3)(A), 78u(e) & 78aa; California Labor Code and California Occupational Safety and Health Act; Calif. Lab. Code, §970, (civil claim exists against those who induce employees to move to, from, or within California by misrepresenting the nature, length, or physical conditions of employment). In fact, the public policy codified by Lab. Code, § 970,

provides an exception to the employment-at-will doctrine. 110. In reducing Plaintiff’s role, staff, budget, salary, stock options, on account of his

having opposed and objected to Workplace Health and Safety employment practices declared unlawful by the State of California, as well as questionable business practices in corporate governance and business model, Plaintiff was, in essence, terminated, in violation of public policy. Mr. Winston and his team gained World-Wide Recognition

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111. 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

The cancellation of Plaintiff’s programs by Defendants occurred one month before

his efforts were ranked by Leadership Excellence as one of the Best in Leadership Development in America, tying with Qualcomm for 15th place. Ratings were based upon vision, strategy,

objectives and impact. This is a significant achievement and normally requires ten plus years to be in contention. Plaintiff and his team had started from scratch just eighteen months earlier. 112. In 2007, Plaintiff’s team efforts were recognized again in Leadership Excellence

magazine as being in the "Top Ten" in America. They were named 8th Best from among a field of over 1,000 organizations. 113. Further, Plaintiff was named as one of "Top 100 Business Thought-Leaders in the

World" by the Editors of Leadership Excellence- 2006-2009. His exemplary efforts were also recognized by Douglas Publications, Hr.com and Linkage. 114. Leora Goren, Chief Human Resources Officer (Plaintiff’s boss), promoted Plaintiff

just before leaving on her first two-week vacation in her eleven years with the company. Her last day in the office was July 18, 2006. When she promoted Plaintiff, she gave him warm congratulations, told Plaintiff he was doing a great job, told Plaintiff the promotion from Executive Vice President to Managing Director was a significant leap at CFC and was meant to convey a significant message. She then gave Plaintiff a big hug and said "good job". 115. The very next time Plaintiff saw Leora Goren was on August 3, 2006 at a meeting

conducted by her and a subordinate to her expanded staff. This was after the "toxic air incident" that had transpired while she was away on vacation. Ms. Goren glared at Plaintiff and was angry.

Plaintiff commented during a break in the meeting that everyone in the meeting, especially Ms. Goren, seemed to know about the noxious fumes incident and were clearly disturbed. Upon

information and belief, Ms. Goren and member of executive management of CFC considered Plaintiff’s reporting of the incident a betrayal of the company. 116. The only thing that happened between Ms. Goren’s congratulatory hugs and her

glaring and anger was the building incident. Plaintiff did not see nor converse with her in the interim. 117. Beginning at that time, it was apparent that CFC was more concerned with protecting

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the “Countrywide” trade name as the national leader in the mortgage industry with impeccable 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 Second Amended Complaint 21 118. 119. business practices, while its executives simultaneously pilfered the value and reputation of the corporation. Change of Control On August 23, 2007 BAC announced it was going to acquire CFC. In January, 2008 Bank of America announced its plan to take over Countrywide

Financial Corporation in July, 2008. 120. In February 26, 2008, Plaintiff attended a meeting with Leora Goren who informed

Plaintiff that he had failed to impress the executives from Bank of America (which was buying out CFC) and therefore Defendants Leora Goren, CFC and Bank of America removed 3/4 of Plaintiff’s professional staff from him. This was a continued pattern from Ms. Goren. 121. 122. Ms. Goren had prevented Plaintiff from meeting with company executives. Ms. Goren did not inform Plaintiff of several meetings and a reception to which Mr.

Winston attendance was expected. 123. Upon information and belief, Ms. Goren had been planning a reason to terminate

Plaintiff for 18 months. Defendant Goren further informed Plaintiff that his staff would thereafter report to Natalia Johnson, a junior subordinate with no experience in Plaintiff’s discipline. 124. Plaintiff was left with a skeleton staff of only two people, while those who had

assumed his duties were given an increased staff and budget. 125. On or about, February 28, 2008 Natalia Johnson insisted on being present in

Plaintiff’s staff meeting announcing that the team will move to her supervision. At the time, she was two levels below Plaintiff. 126. On or about June 20, 2008, in a telephone conversation, Leora Goren informed

Plaintiff that Bank of America was severing his employment within thirty days of the change of control from CFC to Bank of America. 127. a. Defendant Leora Goren interfered with Plaintiff’s employment as follows: Ms. Goren cancelled an appointment Plaintiff made with the President of the Company.

b. 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 k. 128. j. i. h. g. f. e. c. d.

Ms. Goren changed Plaintiff’s completed performance review of one of Plaintiff’s direct reports. Ms. Goren changed the performance rating on Plaintiff’s direct reports. Ms. Goren lowered by 75% the bonus of one of Plaintiff’s direct reports who had been promised a large award as recognition for his promotion to Executive Vice President in summer 2008. Ms. Goren and CFC froze Plaintiff’s budget after encouraging him to do a "road show" announcing new initiatives, such that he could not do the initiatives he had just been asked to “advertise.” Note this is while the individual who had taken control of his prior programs had been given a head count and budget in several multiples of that which Plaintiff was given for the same task at significantly higher quality. Ms. Goren and CFC lowered Plaintiff’s bonus by almost 50%, despite the fact that they had promised a substantial increase in Plaintiff’s bonus one year earlier. Ms. Goren and CFC allowed Bank of America executives to interview Plaintiff’s key direct reports without consulting or informing Plaintiff. Ms. Goren harassed Plaintiff about agreeing to deliver a speech for which he was contractually obligated, which was known by Ms. Goren for six months prior. Ms. Goren “forgot" to invite Plaintiff to an important reception for Executive Management of Bank of America. Ms. Goren "forgot" to have Plaintiff meet with BAC executives as was CFC’s promise and obligation to explore whether comparable employment would be secure in the acquiring company. The quality and quantity of Plaintiff’s assignments were diminished dramatically. On July 31, 2008 Plaintiff’s employment with CFC/CHL terminated and Plaintiff

was not retained under the new management at BAC. FIRST CLAIM FOR RELIEF (Breach of Contract - Written - CFC/CHL/BAC and DOE entities)

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129. 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 h. g. f. d. e.

Plaintiff incorporates by reference all the previous and subsequent paragraphs as

if more fully set forth herein. 130. On or about April 15, 2005, Plaintiff and CFC/CHL entered into a contract for

employment. The contract is evidenced by documents attached hereto as Exhibit A. In addition, Plaintiff received an Employee Handbook, which was also a written contract between the parties. The Employees handbook provided that CFC would provide a safe, nondiscriminatory, and ethical workplace. The contract was evidenced by the transfer of adequate legal consideration between the respective parties. 131. a. b. c. Defendants breached the contract in the following manner: Failing to provide a safe workplace. Intentionally covering up health and safety risks at the CFC building. Retaliating against Plaintiff for his disclosure of the health and safety incident at CFC. Failing to follow industry standards regarding corporate governance. Instructing Plaintiff to submit incorrect information in response to the adverse Moody’s report. Perpetuating fraud, negligence, mismanagement, malfeasance and incriminating behavior of Executive Management that would lead to numerous lawsuits by entire States, municipalities, and lead to condemnation in the NY Times, Wall Street Journal, Washington Post, Conde Nast and scores of other media publications and broadcasts. Hillary Clinton, Barack Obama and John McCain all complained publicly and in the press about the fraud, negligence, mismanagement, malfeasance and incriminating behavior of Executive Management of Countrywide Financial Corporation. This would lead to a settlement paid by Countrywide of $8.6 Billion dollars. Retaliating against Plaintiff for his refusal to acquiesce to CFC’s fraudulent practices, and insistence for change. Removal of duties.

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i. 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 x. v. w. u. t. s. r. q. l. m. n. o. p. k. j.

Reduction of staff. Immediate and obvious attempts to take apart and redeploy Plaintiff’s staff and unemploy Plaintiff. Cancellation of all programs created by Plaintiff’s team. These programs were award-winning and had been endorsed by the Founder, Chairman and CEO and Executive staff of CFC. Plaintiff’s budget was reduced by 80%. Plaintiff was excluded from key meetings. Plaintiff was alienated from peers and co-workers. Plaintiff was completely ostracized at the workplace. Plaintiff did not receive the salary increase which was promised with his promotion to Managing Director. Plaintiff did not receive the significant increase in bonus that had been promised by both Ms. Goren and Mr. Gissinger. Plaintiff was relocated to four different buildings in four geographically disparate cities over the next seven months. Plaintiff was relocated to two additional sites in the ensuing months. One week, Plaintiff was told to physically relocate to a certain building, which he and his team did. Later that same week, Plaintiff was instructed to move again to another building. Defendants interfered with Plaintiff’s decades-long relationships he had with worldrenowned business experts Plaintiff’s successor was given a staff and budget that were many times greater than Plaintiff’s. Plaintiff was ostracized, omitted from meetings. Plaintiff’s salary increases and stock grants were consistently below that which was promised. Failing to compensate Plaintiff in accordance with his promotions and promises made to him by Executive Officers.

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y. 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 z. 132. 133. 134.

Constructively denying Plaintiff’s world-wide speaking engagements through scrutiny and censorship of the same. Terminating Plaintiff. Plaintiff satisfied all the terms and conditions of his agreement with CFC/ CHL/BAC. The breaches by CFC/CHL/ BAC were material. Plaintiff requested that CFC/CHL/BAC’s breaches be cured on several occasions.

Despite these requests, CFC/CHL/ BAC refused. Instead, CFC/CHL BAC intentionally retaliated against Plaintiff . 135. CFC/CHL/BAC have failed, refused, and/or neglected to cure the breaches even

though notified of the same and the fact that damage was accruing to Plaintiff. 136. As a direct and proximate result of the breach of contract by CFC/CHL/BAC, Plaintiff

has been, and will be in the future, prevented from earning a salary commensurate with his abilities. The exact amount of this loss of future earnings is thus far undetermined and accordingly, will be proven at the time of trial. 137. As a result of material breaches of contract, Plaintiff has retained an attorney in order

to prosecute this action and as a consequence has incurred has incurred attorneys’ fees and costs related thereto. 138. As a result of Defendants' breaches of contract, Plaintiff has been damaged

substantially in excess of $1,000,000.00. WHEREFORE, Plaintiff prays for relief as set forth below: 139. On or about December, 2007, CFC and Plaintiff entered into a second written contract

evidenced by a letter which has been identified by Defendants as Exhibit OO to Plaintiff’s deposition. Under the terms of that agreement, Plaintiff was promised continued employment beyond the change of control to BAC. In exchange, Plaintiff agreed to remain in CFC/CHL’s employ and to forego seeking other employment opportunities. 140. 141. Plaintiff satisfied all of the terms and conditions of the contract. CFC/CHL/BAC breached the agreement by denying Plaintiff the opportunity to retain

his employment when BAC assumed control, and by terminating Plaintiff.

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142. 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 28 148. 143.

The breaches were material. Plaintiff requested that CFC/CHL/BAC’s breaches be cured on several occasions.

Despite these requests, CFC/CHL/ BAC refused. Instead, CFC/CHL BAC intentionally retaliated against Plaintiff . 144. CFC/CHL/BAC have failed, refused, and/or neglected to cure the breaches even

though notified of the same and the fact that damage was accruing to Plaintiff. 145. As a direct and proximate result of the breach of contract by CFC/CHL/BAC, Plaintiff

has been, and will be in the future, prevented from earning a salary commensurate with his abilities. The exact amount of this loss of future earnings is thus far undetermined and accordingly, will be proven at the time of trial. 146. As a result of material breaches of contract, Plaintiff has retained an attorney in order

to prosecute this action and as a consequence has incurred has incurred attorneys’ fees and costs related thereto. 147. As a result of Defendants' breaches of contract, Plaintiff has been damaged

substantially in excess of $1,000,000.00. WHEREFORE, Plaintiff prays for relief as set forth below: SECOND CLAIM FOR RELIEF (Breach of Contract - Oral CFC / BAC) Plaintiff incorporates by reference all the previous and subsequent paragraphs as if

more fully set forth herein. 149. In addition to and subsequent to the written contacts described above, during the terms of Plaintiff’s employment he and CFC entered into a series of continual oral contracts. The terms of the oral contracts were continued reassurances that CFC would provide a safe work place, support Plaintiff’s programs with adequate staffing and funding, award Plaintiff with substantial bonuses and an increase stock options and value of those stock options as compensation for Plaintiff’s extraordinary performance, employ Plaintiff until his retirement, and to conduct its business in an ethical and lawful manner. In consideration of these promises, Plaintiff continued his employment at CFC.

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150. 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 l. m. k. g. h. i. j. f.

The contract was evidenced by the transfer of adequate legal consideration between

the respective parties. 151. a. b. c. d. e. Defendants breached the contract in the following manner: Failing to provide a safe workplace. Intentionally covering up health and safety risks at the CFC building. Retaliating against Plaintiff for his disclosure of the health and safety incident at CFC. Failing to follow industry standards regarding corporate governance. Instructing Plaintiff to submit incorrect information in response to the adverse Moody’s report. Perpetuating fraud, negligence, mismanagement, malfeasance and incriminating behavior of Executive Management that would lead to numerous lawsuits by entire States, municipalities, and lead to condemnation in the NY Times, Wall Street Journal, Washington Post, Conde Nast and scores of other media publications and broadcasts. Hillary Clinton, Barack Obama and John McCain all complained publicly and in the press about the fraud, negligence, mismanagement, malfeasance and incriminating behavior of Executive Management of Countrywide Financial Corporation. This would lead to a settlement paid by Countrywide of $8.6 billion dollars. Retaliating against Plaintiff for his refusal to acquiesce to CFC’s fraudulent practices. Removal of duties. Reduction of staff. Immediate and obvious attempts to take apart and redeploy Plaintiff’s staff and unemploy Plaintiff. Cancellation of all programs created by Plaintiff’s team. These programs were award-winning and had been endorsed by the Founder, Chairman, CEO and Executive staff of CFC. Plaintiff’s budget was reduced by 80%. Plaintiff was excluded from key meetings.

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n. 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 x. y. 152. 153. 154. v. w. u. t. s. r. q. o. p.

Plaintiff was alienated from peers and co-workers. Plaintiff was completely ostracized at the workplace. Plaintiff did not receive the salary increase which was promised with his promotion to Managing Director. Plaintiff did not receive the significant increase in bonus that had been promised by both Ms. Goren and Mr. Gissinger. Plaintiff was relocated to four different buildings in four geographically disparate cities over the next seven months. Plaintiff was relocated to two additional sites in the ensuing months. One week, Plaintiff was told to physically relocate to a certain building, which he and his team did. Later that same week, Plaintiff was instructed to move again to another building. Defendants interfered with Plaintiff’s decades-long relationships he had with worldrenowned business experts Plaintiff’s successor was given a staff and budget that were many times greater than Plaintiff. Plaintiff was ostracized, omitted from meetings. Plaintiff’s salary increases and stock grants were consistently below that which was promised. Failing to compensate Plaintiff in accordance with his promotions. Terminating Plaintiff. Plaintiff satisfied all the terms and conditions of his agreement with CFC/CHL/BAC. The breaches by CFC/CHL/BAC were material. Plaintiff requested that CFC’s breaches be cured on several occasions. Despite these

requests, CFC/CHL/BAC refused. Instead, CFC/CHL/BAC intentionally retaliated against Plaintiff. 155. CFC/CHL/BAC have failed, refused, and/or neglected to cure the breaches even

though notified of the same and the fact that damage was accruing to Plaintiff. 156. As a direct and proximate result of the breach of contract by CFC/BAC, Plaintiff has been, and will be in the future, prevented from earning a salary commensurate with his abilities. The

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exact amount of this loss of future earnings is thus far undetermined and accordingly, will be proven 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 Second Amended Complaint 29 f. 159. at the time of trial. 157. As a result of material breaches of contract, Plaintiff has retained an attorney in order to prosecute this action and as a consequence has incurred attorneys’ fees and costs related thereto. 158. As a result of Defendants' breaches of contract, Plaintiff has been damaged

substantially in excess of $1,000,000. WHEREFORE, Plaintiff prays for relief as set forth below: THIRD CLAIM FOR RELIEF (Breach of Contract - Implied - CFC / BAC) Plaintiff incorporates by reference all the previous and subsequent paragraphs as if

more fully set forth herein. 160. In addition to and subsequent to the written contacts described above, during the terms

of Plaintiff’s employment he and CFC entered into a series of continual implied contracts which promised continual employment of Plaintiff as well as bonuses and recognition for his exemplary job performance. In consideration of these promises, Plaintiff continued his employment at CFC. The contract was evidenced by the transfer of adequate legal consideration between the respective parties. 161. Implicit in the terms of the contract was that CFC would conduct its business in an

ethical and lawful manner and provide a safe work environment. 162. a. b. c. d. e. Defendants breached the contract in the following manner: Failing to provide a safe workplace. Intentionally covering up health and safety risks at the CFC building. Retaliating against Plaintiff for his disclosure of the health and safety incident at CFC. Failing to follow industry standards regarding corporate governance. Instructing Plaintiff to submit incorrect information in response to the adverse Moody’s report. Perpetuating fraud, negligence, mismanagement, malfeasance and incriminating behavior of Executive Management that would lead to numerous lawsuits by entire

States, municipalities, and lead to condemnation in the NY Times, Wall Street 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 Second Amended Complaint 30 s. r. q. l. m. n. o. p. k. g. h. i. j. Journal, Washington Post, Conde Nast and scores of other media publications and broadcasts. Hillary Clinton, Barack Obama and John McCain all complained publicly and in the press about the fraud, negligence, mismanagement, malfeasance and incriminating behavior of Executive Management of Countrywide Financial Corporation. This would lead to a settlement paid by Countrywide of $8.6 Billion dollars. Retaliating against Plaintiff for his refusal to acquiesce to CFC’s fraudulent practices. Removal of duties. Reduction of staff. Immediate and obvious attempts to take apart and redeploy Plaintiff’s staff and unemploy Plaintiff. Cancellation of all programs created by Plaintiff’s team. These programs were award-winning and had been endorsed by the Founder, Chairman ,CEO and Executive staff of CFC. Plaintiff’s budget was reduced by 80%. Plaintiff was excluded from key meetings. Plaintiff was alienated from peers and co-workers. Plaintiff was completely ostracized at the workplace. Plaintiff did not receive the salary increase which was promised with his promotion to Managing Director. Plaintiff did not receive the significant increase in bonus that had been promised by both Ms. Goren and Mr. Gissinger. Plaintiff was relocated to four different buildings in four geographically disparate cities over the next seven months. Plaintiff was relocated to two additional sites in the ensuing months. One week, Plaintiff was told to physically relocate to a certain building, which he and his team did. Later that same week, Plaintiff was instructed to move again to another building.

t. 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 x. y. 163. 164. v. w. u.

Defendants interfered with Plaintiff’s decades-long relationships he had with worldrenowned business experts Plaintiff’s successor was given a staff and budget that were many times greater than Plaintiff. Plaintiff was ostracized, omitted from meetings. Plaintiff’s salary increases and stock grants were consistently below that which was promised. Failing to compensate Plaintiff in accordance with his promotions. Terminating Plaintiff. Plaintiff satisfied all the terms and conditions of his agreement with CFC/CHL/BAC. The breaches by CFC/CHL/BAC were material.

165. Plaintiff requested that CFC’s breaches be cured on several occasions. Despite these requests, CFC/CHL/BAC refused. Instead, CFC/CHL/BAC intentionally retaliated against Plaintiff. 166. CFC/CHL/BAC have failed, refused, and/or neglected to cure the breaches even

though notified of the same and the fact that damage was accruing to Plaintiff. 167. As a direct and proximate result of the breach of contract by CFC/BAC, Plaintiff has

been, and will be in the future, prevented from earning a salary commensurate with his abilities. The exact amount of this loss of future earnings is thus far undetermined and accordingly, will be proven at the time of trial. 168. As a result of material breaches of contract, Plaintiff has retained an attorney in order to prosecute this action and as a consequence has incurred attorneys’ fees and costs related thereto. 169. As a result of Defendants' breaches of contract, Plaintiff has been damaged

substantially in excess of $1,000,000. WHEREFORE, Plaintiff prays for relief as set forth below: FOURTH CLAIM FOR RELIEF (Negligence - ALL DEFENDANTS) 170. Plaintiff hereby incorporate by reference all the previous paragraphs as if more fully set forth herein.

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171. 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 to: a. 172. 173.

Each of the Defendants owed the following duties to Plaintiff: a. A duty to conduct business in a lawful manner and to adhere to all laws, rules,

regulations pertaining to the operation of a publicly trade corporation. b. A duty to follow state and federal statutes, rules and regulations regarding

prohibition of retaliatory conduct against employee for disclosure of safety issues, corporate governance, and corporate reporting. c. A duty not to conceal or promote the concealment of improper and or business

practices. d. e. A duty to refrain from recruiting an employee with false promises. A duty not to act in one’s personal interests to the disadvantage of the

corporation, its employees, and shareholders. f. CFC and each individual manager or member of CFC’s corporate management

had a duty not to retaliate against Plaintiff for his raising questions regarding CFC’s business practices, reporting unsafe conditions, reporting shortcomings in CFC’s corporate governance, and proposals for changes in the workplace to correct the shortcomings. g. A duty to abide by state and federal employment and securities laws. Plaintiff in in a class as an employee and as a stockholder which is protected by those statutes which include, but are not limited to: Sections 20(b), 20(d)(1), 20(e) and 22(a) of the Securities Act of 1933 ("Securities Act"), 15 U.S.C. §§ 77t(b), 77t(d)(1), 77t(e), and 77v(a), and Sections 21(d)(1), 21(d)(2), 21(d)(3)(A), 21(e), and 27 of the Securities Exchange Act of 1934 ("Exchange Act"), 15 U.S.C. §§ 78u(d)(1), 78u(d)(2), 78u(d)(3)(A), 78u(e) & 78aa; California Labor Code and California Occupational Safety and Health Act; Calif. Lab. Code, §970. Violation of a federal or state statute is negligence per se. Defendants breached the foregoing duties. The breaches include, but are not limited

CFC’s

essential operations were vastly at opposite to the company's public

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statements, the companies’ representations to Mr. Winston, the individuals’ 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 Second Amended Complaint 33 174. d. c. b. representations to Mr. Winston; Countrywide's and its executive management’s practices were significantly departed from their duties; Angelo Mozilo, Eric Sieracki, David Sambol, and Leora Goren acted in furtherance of their own personal gain with rampant disregard for not only the foregoing duties, but business ethics in general, and in a manner that severely harmed CFC its employees and stockholders; Attributing the acts against Mr. Winston to an industry-wide credit crisis, when the crisis was not to occur until at least a year or more later, and during the relevant time period pertaining to this lawsuit (2005-2007) Messrs. Mozilo, Sambol, and Sieracki were exercising stock options and selling the underlying shares for a personal gain of approximately $300 million; and the top six executives were given multiple "retention bonuses" including large payouts only six weeks before BAC was scheduled to take over CFC. As a direct and proximate result of the Defendants' negligence, Plaintiff sustained

substantial damages in excess of $1,000,000.00. The exact amount of damages will be determined at trial. 175. As a direct and proximate result of the negligence of Defendants, Plaintiff has been,

and will be in the future, prevented from earning salaries commensurate to his abilities. The exact amount of this loss of future earnings is thus far undetermined and accordingly, will be proven at the time of trial. 176. Plaintiff has retained an attorney in order to prosecute this action and accordingly,

has and will incur attorney fees and costs related thereto. 177. Defendants have acted with malice and exhibited a reckless disregard for the rights

of the Plaintiff. With respect to CFC/BAC as a corporate employer, CFC’s officers, directors, managers and managing agents of the corporation not only had advance knowledge and conscious disregard, authorization, of the foregoing acts of oppression, fraud, or malice of its an officers,

directors, and managing agent of the corporation, but actually encouraged the same. Therefore, 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 Second Amended Complaint 34 d. c. b. 178. pursuant to CCP § 3294(b), Plaintiff is entitled to an award of punitive damages in an amount to be determined at the time of trial. WHEREFORE, Plaintiff prays for relief as set forth below: FIFTH CLAIM FOR RELIEF (Fraudulent Misrepresentation - CFC/BAC) Plaintiff incorporates by reference all the previous and subsequent paragraphs as if

more fully set forth herein. 179. On or about April 1- 15, 2005 CFC/CHL/BAC (when), through its Executive

Management employees, Leora Goren and Rich Billingsley (who) , made the following statements in order to induce the Plaintiff(who) to work for CFC/CHL/BAC (how): a. Plaintiff was recruited by the CHL and CFC headquartered in Calabasas, CA (where) and influenced to permanently relocate his family to accept a position as Executive Vice President, Learning Systems. Plaintiff was originally offered a sign-on bonus of $60,000 to induce him to accept the job which he declined. CFC then increased the offer to $130,000, and then agreed on $150,000. Plaintiff was told that a significant portion of his compensation would be paid in stock options which had significant current value and enormous growth potential. Plaintiff was told that his stock package alone was worth more than $5M. These statements were made by Leora Goren on or about February, 2005. The statement was

confirmed in a conversation with the former Head of Executive Compensation, Charles Quon, both in May of 2005, and again in June, 2008. Plaintiff was promised this was a long-term commitment. Based on these representations made multiple times by Leora Goren, Plaintiff made a permanent relocation, purchasing a home with a cost basis in excess of $1.8 M and subsequently recruited several of his former staff members to relocate their entire families across the country to join him at Countrywide.

e. 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 28 180. l. k. j. i. h. f. g.

Plaintiff was further told that his stock package alone was expected to be worth $5M after 3 years. This was confirmed in recent conversation with the former Head of Executive Compensation. Plaintiff was assured this was a long-term commitment. Plaintiff was told that the company was well-managed, very supportive of the successful conduct of the areas for which he was responsible, that the function had ample budgetary and head count support, and that significant growth was expected. Implicit in the representations was the promise that CFC would provide a safe work environment and adhere to federal and state statutes in the conduction of its business. CFC represented that CFC was projected to grow substantially. He was told that the Company growth had resulted in several recent stock splits and that the same was projected over the next two years. CFC represented that Plaintiff would have "open pastures" in which to practice his profession. CFC represented that Plaintiff’s function would have significant management support, adequate budgetary and head count support to succeed. CFC management, including Angelo Mozilo, Sandor Samuels, David Sambol, Andrew Kissinger and Leora Goren misrepresented, concealed, and failed to disclose the savory business practices of CFC in the mortgage lending industry, including the goal to dominate the market share by lowering the suitability requirements for mortgage lending, failing to disclose the practice of “no income no asset [NINA] lending, failing to disclose the corporate policy of incentives for quantity rather than quality, and the outright disregard for conducting an ethical business in order to further advance each individuals personal financial and self-serving motives.. Defendants CFC and CHL knew that Plaintiff would rely on these representations in

deciding to accept employment. Defendants CFC, CHL, and the individuals knew that Plaintiff would not accept employment with CFC if the true motives and business practices of the company were disclosed.

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181. 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 c. b.

On May 9, 2005, Plaintiff began his service as Executive Vice President, Learning

Systems for Countrywide Financial Corporation, Countrywide Home Loans headquartered in Calabasas, CA. 182. The promises that were made prior to Mr. Winston’s acceptance of employment at

CFC/CHL we repeated regularly by Leora Goren, Charles Quan, Rich Billingsley, Andrew Gissinger, and Angelo Mozilo from 2005 to 2008. told Plaintiff he would also receive compensation in the form of stock and stock options that had a significant current value and growth potential. 183. a. CFC's representations were false and misleading, in that: In making these statements and giving Plaintiff the information set forth above, while simultaneously suppressing and failing to disclose the facts set forth, CFC Financial Corporation and its Officers and Executives gave Plaintiff information which they knew was misleading, and thereby engaged in fraud and deceit. CFC intentionally concealed from, and failed to disclose to, Plaintiff certain material facts, in order to persuade Plaintiff to move to Southern California and accept employment with them. During their recruitment of Plaintiff, Countrywide Financial Corporation and its Officers and Executives purposely failed to disclose to Plaintiff a multitude of material facts. Countrywide made these false and misleading representations, and concealed and failed to disclose these material facts, in order to induce Plaintiff to move to Southern California and accept employment with CFC. The false and misleading representations made by CFC, and the facts which CFC failed to disclose to Plaintiff, were material and, as intended by CFC, Plaintiff reasonably relied on their representations and omissions in making his decision to accept employment with CFC. At the time CFC made these representations, they knew that these representations were false and misleading, and they knew that they were failing to disclose certain material facts. Countrywide nevertheless engaged in this conduct in order to induce and persuade Plaintiff to move to Southern California and accept employment with them.

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d. 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 28 184.

As intended and foreseen by CFC executives and officers, Plaintiff reasonably relied to his detriment on their false and misleading representations and omissions, and accepted employment with CFC. If he had known the true facts concerning the conduct and behavior of his manager and the Executive Management Committee, Plaintiff would not have accepted employment with CFC Financial Corporation. Plaintiff reasonably relied upon the above verbal and written representations in

making the decision to accept CFC’s offer and relocate his family, buying a home for over $1.8 M. 185. The false representations fall within the purview of Cal. Lab Code §§970 and 972.

Plaintiff justifiably relied on these promises in deciding to accept employment and move himself and his family to Southern California. In fact, Plaintiff recruited former staff members to relocate their entire families across the country to join him at Countrywide. 186. The statements were false, and CFC, CHL, and their management knew the statements

to be false each and every time they were made to Plaintiff. 187. The truth was that CFC engaged in fraud, negligence, mismanagement, malfeasance

and incriminating behavior that it concealed from Plaintiff. 188. The concealed conduct included mismanagement, malfeasance and incriminating

behavior of Executive Management of CFC Financial Corporation. 189. From 2006 - 2008, Defendants continued to conceal the savory business practices of

not only CFC and CHL, but also BAC’s participation in assuming the transfer of assets through a shell company which was designed by CFC to avoid creditors, and accepted by BAC as a business structure that would shield the BAC parent company and its subsidiaries from CFC’s liabilities and obligations. 190. The irresponsible, retaliatory and vindictive actions taken by Executive Officers of

CFC Financial Corporation have caused great financial, professional and emotional harm and a significant loss of stature amongst Plaintiff’s professional colleagues. 191. As a direct and proximate result of the Defendants' fraudulent misrepresentations,

Plaintiff sustained substantial damages in excess of $1,000,000.00. The exact amount of damages will be determined at trial.

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192. 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 c. b. 195.

As a direct and proximate result of the fraudulent misrepresentation of Defendants,

Plaintiff has been, and will be in the future, prevented from earning salaries commensurate to his abilities. The exact amount of this loss of future earnings is thus far undetermined and accordingly, will be proven at the time of trial. 193. Plaintiff has retained an attorney in order to prosecute this action and accordingly, has

incurred and will continue to incur attorney fees and costs related thereto. 194. Defendants have acted with malice and exhibited a reckless disregard for the rights

of the Plaintiff. With respect to CFC/BAC as a corporate employer, CFC’s officers, directors, managers and managing agents of the corporation not only had advance knowledge and conscious disregard, authorization, of the foregoing acts of oppression, fraud, or malice of its an officers, directors, and managing agent of the corporation, but actually encouraged the same. Therefore, pursuant to CCP § 3294(b), Plaintiff is entitled to an award of punitive damages. SIXTH CLAIM FOR RELIEF (Negligent Misrepresentation - All Defendants) Plaintiff incorporates by reference all the previous and subsequent paragraphs as if

more fully set forth herein, and pleads this cause of action as an alternative claim from the fifth claim for intentional misrepresentation. 196. On or about April 1- 15, 2005 CFC/CHL/BAC (when), through its Executive

Management employees, Leora Goren and Rich Billingsley (who) , made the following statements in order to induce the Plaintiff(who) to work for CFC/CHL/BAC (how): a. Plaintiff was recruited by the CHL and CFC headquartered in Calabasas, CA (where) and influenced to permanently relocate his family to accept a position as Executive Vice President, Learning Systems. Plaintiff was originally offered a sign-on bonus of $60,000 to induce him to accept the job which he declined. CFC then increased the offer to $130,000, and then agreed on $150,000. Plaintiff was told that a significant portion of his compensation would be paid in stock options which had significant current value and enormous growth potential. Plaintiff

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was told that his stock package alone was worth more than $5M. These statements 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 Second Amended Complaint 39 l. k. j. i. h. f. g. e. d. were made by Leora Goren on or about February, 2005. The statement was

confirmed in a conversation with the former Head of Executive Compensation, Charles Quon, both in May of 2005, and again in June, 2008. Plaintiff was promised this was a long-term commitment. Based on these representations made multiple times by Leora Goren, Plaintiff made a permanent relocation, purchasing a home with a cost basis in excess of $1.8 M and subsequently recruited several of his former staff members to relocate their entire families across the country to join him at Countrywide. Plaintiff was further told that his stock package alone was expected to be worth $5M after 3 years. This was confirmed in recent conversation with the former Head of Executive Compensation. Plaintiff was assured this was a long-term commitment. Plaintiff was told that the company was well-managed, very supportive of the successful conduct of the areas for which he was responsible, that the function had ample budgetary and head count support, and that significant growth was expected. Implicit in the representations was the promise that CFC would provide a safe work environment and adhere to federal and state statutes in the conduction of its business. CFC represented that CFC was projected to grow substantially. He was told that the Company growth had resulted in several recent stock splits and that the same was projected over the next two years. CFC represented that Plaintiff would have "open pastures" in which to practice his profession. CFC represented that Plaintiff’s function would have significant management support, adequate budgetary and head count support to succeed. CFC management, including Angelo Mozilo, Sandor Samuels, David Sambol, Andrew Kissinger and Leora Goren misrepresented, concealed, and failed to disclose the savory business practices of CFC in the mortgage lending industry, including the

goal to dominate the market share by lowering the suitability requirements for 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 Second Amended Complaint 40 c. b. 197. mortgage lending, failing to disclose the practice of “no income no asset [NINA] lending, failing to disclose the corporate policy of incentives for quantity rather than quality, and the outright disregard for conducting an ethical business in order to further advance each individuals personal financial and self-serving motives.. Defendants CFC and CHL knew that Plaintiff would rely on these representations in

deciding to accept employment. Defendants CFC, CHL, and the individuals knew that Plaintiff would not accept employment with CFC if the true motives and business practices of the company were disclosed. 198. On May 9, 2005, Plaintiff began his service as Executive Vice President, Learning

Systems for Countrywide Financial Corporation, Countrywide Home Loans headquartered in Calabasas, CA. 199. The promises that were made prior to Mr. Winston’s acceptance of employment at

CFC/CHL we repeated regularly by Leora Goren, Charles Quan, Rich Billingsley, Andrew Gissinger, and Angelo Mozilo from 2005 to 2008. told Plaintiff he would also receive compensation in the form of stock and stock options that had a significant current value and growth potential/ 200. a. CFC's representations were false and misleading, in that: In making these statements and giving Plaintiff the information set forth above, while simultaneously suppressing and failing to disclose the facts set forth, CFC Financial Corporation and its Officers and Executives gave Plaintiff information which they knew was misleading, and thereby engaged in fraud and deceit. CFC intentionally concealed from, and failed to disclose to, Plaintiff certain material facts, in order to persuade Plaintiff to move to Southern California and accept employment with them. During their recruitment of Plaintiff, Countrywide Financial Corporation and its Officers and Executives purposely failed to disclose to Plaintiff a multitude of material facts. Countrywide made these false and misleading representations, and concealed and failed to disclose these material facts, in order to induce Plaintiff to move to Southern

California and accept employment with CFC. The false and misleading 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 Second Amended Complaint 41 201. d. representations made by CFC, and the facts which CFC failed to disclose to Plaintiff, were material and, as intended by CFC, Plaintiff reasonably relied on their representations and omissions in making his decision to accept employment with CFC. At the time CFC made these representations, they knew that these representations were false and misleading, and they knew that they were failing to disclose certain material facts. Countrywide nevertheless engaged in this conduct in order to induce and persuade Plaintiff to move to Southern California and accept employment with them. As intended and foreseen by CFC executives and officers, Plaintiff reasonably relied to his detriment on their false and misleading representations and omissions, and accepted employment with CFC. If he had known the true facts concerning the conduct and behavior of his manager and the Executive Management Committee, Plaintiff would not have accepted employment with CFC Financial Corporation. Plaintiff reasonably relied upon the above verbal and written representations in

making the decision to accept CFC’s offer and relocate his family, buying a home for over $1.8 M. 202. The false representations fall within the purview of Cal. Lab Code §§970 and 972.

Plaintiff justifiably relied on these promises in deciding to accept employment and move himself and his family to Southern California. In fact, Plaintiff recruited former staff members to relocate their entire families across the country to join him at Countrywide. 203. 204. The statements were false. The truth was that CFC engaged in fraud, negligence, mismanagement, malfeasance

and incriminating behavior that it concealed from Plaintiff. 205. The concealed conduct included mismanagement, malfeasance and incriminating

behavior of Executive Management of CFC Financial Corporation. 206. From 2006 - 2008, Defendants continued to conceal the savory business practices of

not only CFC and CHL, but also BAC’s participation in assuming the transfer of assets through a shell company which was designed by CFC to avoid creditors, and accepted by BAC as a business

structure that would shield the BAC parent company and its subsidiaries from CFC’s liabilities and 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 Second Amended Complaint 42 211. obligations. 207. The irresponsible, retaliatory and vindictive actions taken by Executive Officers of

CFC Financial Corporation have caused great financial, professional and emotional harm and a significant loss of stature amongst Plaintiff’s professional colleagues. 208. As a direct and proximate result of the Defendants' fraudulent misrepresentations,

Plaintiff sustained substantial damages in excess of $1,000,000.00. The exact amount of damages will be determined at trial. 209. As a direct and proximate result of the fraudulent misrepresentation of Defendants,

Plaintiff has been, and will be in the future, prevented from earning salaries commensurate to his abilities. The exact amount of this loss of future earnings is thus far undetermined and accordingly, will be proven at the time of trial. 210. Plaintiff has retained an attorney in order to prosecute this action and accordingly, has

incurred and will continue to incur attorney fees and costs related thereto. WHEREFORE, Plaintiff pray for relief as set forth below. SEVENTH CLAIM FOR RELIEF Intentional Interference with Prospective Business Relationships (CFC , CHL, LEORA GOREN) Plaintiff incorporates by reference all the previous and subsequent paragraphs as if

more fully set forth herein. 212. 213. On August 23, 2007 BAC decided it was going to acquire CFC. In January, 2008 Bank of America announced its plan to take control of Countrywide

Financial Corporation in July, 2008. 214. Plaintiff had been promised continued employment even through the change of

control. As such, he had a contract for prospective employment by BAC or any of its subsidiaries. 215. Defendants CFC, CHL, and Goren knew of the prospective business opportunity that

belonged to Plaintiff with BAC. In fact, BAC had previously recruited Mr. Winston prior to his acceptance of the position at Countrywide.

216. 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 BAC. 217.

CFC and Ms. Goren intentionally interfered with Plaintiff’s business relationship with

On or about January or February 2008, Plaintiff was asked to do a presentation of

CFC’s executive succession model to BAC executives. Because CFC did not have any succession plan when Mr. Winston was first employed by CFC, CHL, Plaintiff could not and would not present a false image of a proper executive succession plan having been in continuous existence. As they had in 2006 in response to the Moody’s Investment Services Report, CFC, CHL, and CFC management, including Ms. Goren directed Plaintiff to present an inaccurate portrayal of the executive succession plan. After a sequence of editing by CFC, CHL and Goren, Mr. Winston did conduct a presentation to BAC executives which was not reflective of a stable executive succession plan or business model at CFC, because despite his efforts to implement the same, they did not exist. 218. In February 26, 2008, Plaintiff attended a meeting with Leora Goren who informed

Plaintiff that he had failed to impress the executives from Bank of America (which was buying out CFC) and therefore Defendants Leora Goren, CFC and Bank of America removed 3/4 of Plaintiff’s professional staff from him. This was a continued pattern from Ms. Goren which was intended to interfere with Mr. Winston’s prospective employment with BAC. 219. 220. Ms. Goren prevented Plaintiff from meeting with BAC company executives. Ms. Goren did not inform Plaintiff of several meetings and a reception to which Mr.

Winston’s attendance was expected. 221. On or about February, 2008, Ms. Goren informed Plaintiff that his staff would

thereafter report to Natalia Johnson, a junior subordinate with no experience in Plaintiff’s discipline. 222. 223. Plaintiff was left with a skeleton staff of only two people. On or about, February 28, 2008 Natalia Johnson insisted on being present in Plaintiff’s

staff meeting announcing that the team will move to her supervision. At the time, she was two levels of seniority below Plaintiff. 224. On or about June 20, 2008, in a telephone conversation, Leora Goren informed

Plaintiff that CFC/ CHL/ Bank of America was severing his employment within thirty days of the change of control from CFC to Bank of America.

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225. 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 k. l. j. i. h. g. f. e. c. d. b. a.

Defendant Leora Goren interfered with Plaintiff’s employment as follows: Ms. Goren cancelled an appointment Plaintiff made with the President of the Company. Ms. Goren changed Plaintiff’s completed performance review of one of Plaintiff’s direct reports. Ms. Goren changed the performance rating on Plaintiff’s direct reports. Ms. Goren lowered by 75% the bonus of one of Plaintiff’s direct reports who had been promised a large award as recognition for his promotion to Executive Vice President in summer 2008. Ms. Goren and CFC froze Plaintiff’s budget after encouraging him to do a "road show" announcing new initiatives, such that he could not do the initiatives he had just been asked to “advertise.” Note this is while the individual who had taken control of his prior programs had been given a head count and budget in several multiples of that which Plaintiff was given for the same task at significantly higher quality. Ms. Goren and CFC lowered Plaintiff’s bonus by almost 50%, despite the fact that they had promised a substantial increase in Plaintiff’s bonus one year earlier. Ms. Goren and CFC allowed Bank of America executives to interview Plaintiff’s key direct reports without consulting or informing Plaintiff. Ms. Goren harassed Plaintiff about agreeing to deliver a speech for which he was contractually obligated, which was known by Ms. Goren for six months prior. Ms. Goren “forgot" to invite Plaintiff to an important reception for Executive Management of Bank of America. Ms. Goren "forgot" to have Plaintiff meet with BAC executives as was CFC’s promise and obligation to explore whether comparable employment would be secure in the acquiring company. The quality and quantity of Plaintiff’s assignments were diminished dramatically. Ms. Goren made the following statements CFC employees, some of which were ultimately repeated by Ms. Goren to BAC executives:

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I. 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 28 226. IV. III. II.

That Plaintiff’s work performance was substandard. That Plaintiff was a trouble-maker for reporting safety hazards and for refusing to acquiesce to CFC’s concealment of malfeasance; That Plaintiff’s concerns regarding corporate governance of CFC were unfounded and or insignificant. That Plaintiff was not suitable for employment by Bank of America when it acquired CFC.

The statements were made to CFC employees, Bank of America employees, and

business colleagues in the financial arena. 227. The statements were false, and intended to discredit Mr. Winston and to portray Ms.

Goren as more qualified for employment retention than Mr. Winston. However, Mr. Winston’s education, experience, knowledge, co-founding of internationally acclaimed business models, and ethics were beyond reproach, and thereby threatening to Ms. Goren. 228. As a direct and proximate result of the Defendants' fraudulent misrepresentations,

Plaintiff sustained substantial damages in excess of $1,000,000.00. The exact amount of damages will be determined at trial. 229. As a direct and proximate result of the fraudulent misrepresentation of Defendants,

Plaintiff has been, and will be in the future, prevented from earning salaries commensurate to his abilities. The exact amount of this loss of future earnings is thus far undetermined and accordingly, will be proven at the time of trial. 230. Plaintiff has retained an attorney in order to prosecute this action and accordingly, has

incurred and will continue to incur attorney fees and costs related thereto. 231. Defendants have acted with malice and exhibited a reckless disregard for the rights

of the Plaintiff. With respect to CFC/BAC as a corporate employer, CFC’s officers, directors, managers and managing agents of the corporation not only had advance knowledge and conscious disregard, authorization, of the foregoing acts of oppression, fraud, or malice of its an officers, directors, and managing agent of the corporation, but actually encouraged the same. Therefore, pursuant to CCP § 3294(b), Plaintiff is entitled to an award of punitive damages.

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WHEREFORE, Plaintiff prays for relief as set forth below. 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 Second Amended Complaint 46 232. EIGHTH CLAIM FOR RELIEF (WRONGFUL TERMINATION - CFC/CHL, BAC) Plaintiff incorporates by reference all the previous and subsequent paragraphs of this

complaint as if more fully set forth herein. 233. Plaintiff was terminated from his employment by CFC, CHL, BAC or whatever

subsidiary, assignee, or entity assumed the CFC’s obligations in the acquisition of CFC by BAC. 234. The termination was the result of Mr. Winston’s disclosures and ongoing challenges

of the questionable business practices of CFC and its management. Moreover, Plaintiff refused to participate in the unethical and illegal business practices of CFC and its management. 235. CFC and its management provided BAC with false and misleading information regarding Plaintiff which undermined Plaintiff’s efforts to retain employment 236. Defendant CFC/BAC’s decision to terminate Plaintiff was based on their knowledge

that Plaintiff had first hand knowledge of the internal misconduct of CFC’s executive management and business practices, and a history of disclosing wrongful conduct. Therefore, CFC made a

conscious decision to terminate Plaintiff and to discredit him in the corporate environment, so that any disclosures of the internal malfeasance of CFC would be deemed non credible. 237. This conduct constituted wrongful termination in violation of common law and public

policy as established by, but not limited to the following federal and state statues: Sections 20(b), 20(d)(1), 20(e) and 22(a) of the Securities Act of 1933 ("Securities Act"), 15 U.S.C. §§ 77t(b), 77t(d)(1), 77t(e), and 77v(a), and Sections 21(d)(1), 21(d)(2), 21(d)(3)(A), 21(e), and 27 of the Securities Exchange Act of 1934 ("Exchange Act"), 15 U.S.C. §§ 78u(d)(1), 78u(d)(2), 78u(d)(3)(A), 78u(e) & 78aa; California Labor Code and California Occupational Safety and Health Act; Calif. Lab. Code, §970, 972. Further, the public policy codified by Lab. Code, § 970, provides an exception to the employment-at-will doctrine. 238. CFC/CHL/BAC conduct caused Plaintiff substantial damage to Plaintiff’s career and

financial security. As a result of CFC/CHL/BAC’s conduct, Plaintiff suffered irreparable harm. 239. Plaintiff is entitled to damages incident to his wrongful termination, and in that regard

has been damaged substantially in excess of $1,000,000. The exact amount of damages will be 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 Second Amended Complaint 47 e. d. c. b. 241. determined at trial. 240. Plaintiff has retained an attorney in order to prosecute this action and accordingly is

entitled to reasonable attorney fees and costs related to the prosecution of the same. WHEREFORE, Plaintiff prays for relief as set forth below. NINTH CLAIM FOR RELIEF (WHISTLEBLOWER CLAIM ) Plaintiff incorporates by reference all the previous and subsequent paragraphs of this

complaint as if more fully set forth herein. 242. From 2006 up to the date of his termination in 2008, Plaintiff expressed his concern

and/or displeasure with the following course of business activity: a. Mishandling and concealment of the building safety issues, including declaring the building safe without full testing of the environment, and absence of any testing for asbestos; wipe-down of the facility prior to third party inspection, failure to fix the toxic air problem, and concealment of the safety hazard up to July , 2008; Propriety of basing the CFC/CHL business model on quantity of product rather than quality (i.e. NINA loans), employee incentives for volume of sales from 2006 - 2008; Inadequate to non-existent business model for a fast growing company with 65 thousand employees, including concern with the absence of an executive succession plan, and the company continuing to operate upon the departure of its former CEO without a successor; Disagreement with CFC’s response to the adverse Moody’s report. Plaintiff knew CFC’s response was a gross misrepresentation of the history of the executive succession plan; and Ms. Goren’s refusal or inability to provide the same; questioning the absence of a CEO on a publicly traded company (CFC) for a period of months; excessive compensation of CFC executives that was far greater than individuals in executive positions in Fortune 500 companies. Plaintiff’s refusal to author a fabricated response to the Moody’s Report. CFC did

everything to protect its corporate image in order to buy time to prolong the 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 Second Amended Complaint 48 h. g. concealment and misrepresentation of the CFC to investors, international corporate stage, and employees. The concealment enabled senior executives to sell their stock at inflated market rates for their own personal gain, including alleged insider trading. This conduct lead to the destruction of the Countrywide brand to a point that the name “Countrywide” is now recognized as ground zero of the current financial crisis. Anyone who has ever worked for Countrywide , including Plaintiff, is now black balled from the corporate world because of CFC and its executive’s malfeasance. Questioning the cancelling of programs, removal of staff and funding of Plaintiff’s initiatives by up to 80%, when the corporate directive was for a mock plan of 5-15% reduction per department. At the same time Plaintiff’s staff and budget were cut, Mr. Winston’s team and a budget far greater than that tagged for Plaintiff’s programs was delegated to another employee Josh Clarin. The decrease in staff and budget continued until 2008 when Plaintiff was left with a skeleton staff that was unaware of the ongoing fraud, In 2008, questioning the propriety of sudden removal of assets, including documents, from CFC prior to the merger with BAC, which Plaintiff later discovered upon information and belief were being transferred and concealed in a “shell” entity bearing the name “Red Oak” or “Red Oak Merger holding company”. 243. Plaintiff’s disclosures of the foregoing to management, in house counsel, and outside entities was a protected activity. 244. Defendants retaliated against Plaintiff for engaging in this protected activity. The

retaliation was not only related to Plaintiff’s reporting the safety issues of the workplace, but continued regularly to curb Plaintiff’s discovery and vocalization of questionable, substandard or improper business practices. 245. Plaintiff reasonably believed that the conduct of CFC and its management comprised what Plaintiff deemed

a violation of , or noncompliance with, state and federal statutes and regulations. 246. As a consequence of Plaintiff’s protected activities, CFC and its management

subjected Plaintiff to adverse employment action which separately and collectively materially 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 Second Amended Complaint 49 252. affected the terms and conditions of Plaintiff’s employment at CFC. Plaintiff exhausted any administrative remedies that may have been available to him by reporting to corporate management and regulatory bodies. 247. There is a causal connection between Plaintiff’s disclosures to CAL-OSHA, refusal

to falsify the response to the Moody’s report, challenges and reports of corporate malfeasance, including the sudden removal of boxes of documents from CFC in 2008, reports of retaliation to management and corporate counsel from 2006 - 2008 and the adverse employment actions. 248. Retaliation made after whistle blowing is protected as a matter of common law, public

policy and as a matter of statute under Cal. Lab. Code §1102.5, California’s Whistle blower Protection Act. Individuals in management are also personally liable for acts of retaliation. 249. As a direct and proximate result of Plaintiff’s proper disclosures outside entities of

improprieties occurring within CFC/CHL/BAC, he was the subject of a hostile work environment, reduction of programs and duties, multiple physical workplace location changes, ostracization, humiliation, and termination. 250. Plaintiff is entitled to damages incurred as a whistle blower substantially in excess of $1,000,000. The exact amount of damages will be determined at trial. 251. Plaintiff has retained an attorney in order to prosecute this action, and accordingly,

has incurred, and will continue to incur, attorney fees and costs related to the prosecution of the same. WHEREFORE, Plaintiff prays for relief as set forth below. TENTH CLAIM FOR RELIEF (BREACH OF FIDUCIARY DUTY - ALL INDIVIDUAL DEFENDANTS) Plaintiff incorporates by reference all the previous and subsequent paragraphs of this

complaint as if more fully set forth herein. 253. a. b. Defendants owed fiduciary duties to CFC and Plaintiff as a result of the following: Plaintiff’s position as a shareholder in CFC; the express terms of the various ownership agreements (Articles of Incorporation,

Bylaws; 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 Second Amended Complaint 50 254. c. d. Defendants’ status as officers and managers of CFC; as a result of the trust and confidence that was reposed in them by Plaintiff and invited and accepted by Defendants. In committing all of the foregoing acts of misconduct and self-dealing, Defendants

breached their fiduciary duties to the Plaintiff, including, but not limited to the following: a. b. c. 255. 256. the duty of undivided loyalty; the duty of honesty, good faith, and fair dealing; and the duty of full disclosure. Defendants’ conduct as alleged above constitutes a breach of each of these duties. Any request by Plaintiff as a shareholder that CFC file suit against these individuals

for the breaches owed to the corporation would be futile. 257. Defendants’ misconduct was a proximate cause of damages to Plaintiff. As a result

of Defendants' misconduct, Plaintiff has been damaged substantially in excess of $1,000,000 and continues to suffer additional harm. 258. Defendants have acted with malice and exhibited a reckless disregard for the rights

of the Plaintiff. Therefore, pursuant to CCP § 3294(b), Plaintiff is entitled to an award of punitive damages. WHEREFORE, Plaintiff prays for relief as set forth below. PRAYER FOR RELIEF With respect to the preceding claims for relief, Plaintiff Michael Winston prays for relief as set forth below: 1. That Defendants be ordered to pay to Plaintiff a sum in excess of $1,000,000.00, the

exact amount of which will be proven at the time of trial; 2. That Defendants be ordered to pay to Plaintiff a sum in excess of $1,000,000.00 , the

exact amount of which will be proven at the time of trial, for Plaintiff' lost earnings, both past and future; 3. That Defendants be ordered to pay to Plaintiff a sum in excess of $1,000,000.00 , the