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DISTRICT COURT, ARAPAHOE COUNTY, COLORADO

Judge Elizabeth Montgomery

Court Address: 7325 So. Potomac St.

Centennial, CO 80112

JANE WORLEY,

Plaintiff/Petitioner

v

Defendants/Respondents,

U.S. BANK, N.A., SUCCESSOR TRUSTEE TO BANK OF

AMERICA, N.A., AS SUCCESSOR TRUSTEE TO

LASALLE BANK, N.A., AS TRUSTEE FOR THE

HOLDERS OF THE MERRILL LYNCH FIRST

FRANKLIN MORTGAGE LOAN TRUST, MORTGAGE

LOAN ASSET-BACKED CERTIFICATES, SERIES 2007

FF1 (“The Trust”) and MERS, a division of MERSCORP

INC

____________________________________________________

AMENDED VERIFIED PETITION, AND EX-PARTE

MOTION FOR AN ORDER TO SHOW CAUSE WHY AN

ASSIGNMENT AND RELATED LIS PENDENS SHOULD

NOT BE INVALIDATED AS “SPURIOUS DOCUMENTS”

AND FRAUDULENT

(CRCP 105.1(b);CRS 38-35-201 and CRS 38-35-204)

IF TRIAL IS ORDERED, PLAINTIFF DEMANDS A JURY

TRIAL

____________________

Case No.

Division

Date:

Time:

COMES NOW Petitioner JANE WORLEY and pursuant to CRCP 105.1(b) hereby moves the

Court for its Order to Show Cause Why an assignment of a Deed of Trust, and the related Lis

Pendens not be declared “spurious documents” and invalidated.

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RELEVANT FACTS

On October 4th

, 2011 in the County of Ventura, MERS assigned the Deed of Trust and

Promissory Note to the property of JANE WORLEY located at 1499 South Jasper St., Aurora,

Colorado 80017 to DEUTSCHE BANK as trustee for the MERRILL LYNCH FIRST

FRANKLIN MORTGAGE LOAN TRUST, MORTGAGE LOAN ASSET-BACKED

CERTIFICATES, SERIES 2007-(“The Trust”). (Exh A, Reception 2892)

On October 20th

, 2011, the Assignment (Reception # D1102742 , Exh A) of the Deed of Trust

(Exh C) and Promissory Note (Exh D) to DEUTSCHE BANK as trustee for the “Trust”, was

recorded at the County Recorder’s Office.

A lis pendens (Reception # D3068617, Exh B) related to this assignment was also recorded for

case no. 2013cv825. The assignment document purports to assign both the Deed of Trust and

Promissory Note to DEUTSCHE BANK as trustee where MERS describes itself as nominee for the

Lender, its successors and assigns. The stated lender in the Deed of Trust is First Franklin

Mortgage. US Bank as trustee is the presumed “Holder of the note” ;and the “Trust”, the

presumed “Holder of the Note in Due Course. Clinton Georg v. Metro Fixtures Contractors,

Inc., 178 P. 3d 1209 – Colo Supreme Court (Mar., 2008); See also Deutsche Bank Trust Company

Americas v. Samora. , 2013 COA 81 fn 3, when the court said:

3 Here, the trustee is acting for the Trust and advancing a claim on behalf of the

Trust. Accordingly, the Trust must satisfy holder in due course status. The parties

stipulated that the Trust took the Note and Deed of Trust without actual knowledge

of any wrongdoing or fraud. The record indicates that the Trust gave value for the

Note and Deed of Trust.

Unlike the “Trust” in Samora, the facts and Plaintiff’s arguments will show that the “Trust” in

this case did not take the Note and Deed of Trust for value, in good faith, and without notice of the

problems in the transaction.

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CRCP 105.1 states:

Any person whose real or personal property is affected by a spurious lien or spurious

document, as defined by law, may file a petition in the district court in the county in which

the lien or document was recorded or filed, or in the district court for the county in which

affected real property is located, for an order to show cause why the lien or document

should not be declared invalid. The petition, which may also be brought as a counterclaim

or a cross-claim in a pending action, shall set forth a concise statement of the facts upon

which the petition is based, shall be supported by the affidavit of the petitioner or the

petitioner's attorney, and shall be accompanied by a copy of the lien or document as

recorded or filed in the public records. The order to show cause may be granted ex parte…

This action begs the question whether “The Trust”, as a Holder in Due Course, took the note

for value, in good faith, without knowledge that MERS had no authority to transfer the note; and

that MERS was no longer a nominee or agent of First Franklin at the time of the assignment on

October 4th

, 2011 because First Franklin ceased operations in March of 2008.

For the reasons set forth in this petition, the document entitled Assignment of the Deed of Trust

does not speak the truth, and is a “spurious document” as defined under §38-35-201, C.R.S. 2012

and states: “ (3) “Spurious document” means any document that is forged or groundless, contains

a material misstatement or false claim, or is otherwise patently invalid.”

ARGUMENT

ISSUE 1. WAS MERS A NOMINEE OR AGENT OF FIRST FRANKLIN (LENDER) ON

THE DATE OF THE ASSIGNMENT AS THE ASSIGNMENT PURPORTS?

In DAVID EDELSTEIN, Appellant, vs. BANK OF NEW YORK MELLON, Respondent., No.

57430, SUPREME COURT OF NEVADA, 128 Advance Rep 48, 2012 Nev. LEXIS 90 (Sept. 27th

,

2012) held that the term “nominee” can be construed as a form of agency when it said:

Other courts have held that MERS' designation as nominee "is more than sufficient to

create an agency relationship between [*25] MERS and the Lender and its successors." In

re Tucker, 441 B.R. at 645; In re Martinez, 444 B.R. 192, 205-06 (Bankr. D. Kan. 2011)

(concluding that based on the language in the relevant documents giving MERS a role as

"nominee" for "[the lender] and its successors and assigns, . . . sufficient undisputed

evidence [was presented] to establish that MERS was acting as an agent," and that the

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choice of the word "'nominee,' rather than 'agent,' does not alter the relationship between

the[ ] . . . parties, especially given the fact that the two terms have nearly identical legal

definitions"); Cervantes, 656 F.3d at 1044 (explaining MERS' role as an agent).

We agree with the reasoning of these jurisdictions and conclude that, in this case, MERS

holds an agency relationship with New American Funding and its successors and assigns

with regard to the note. [B,U]

In Citywide Banks vs Brenda I Armijo, No. 10CA1458 (Oct. 2011) the court said:

Section 4-1-103, C.R.S. 2011, provides that the common law, including the law of agency,

supplements the statutory provisions of the UCC. Id. § 4-1-103(b), C.R.S. 2011 (“Unless

displaced by the particular provisions of this title, the principles of law and equity, including .

. . the law relative to . . . principal and agent . . . shall supplement its provisions.”).

In GREASE MONKEY INTERNATIONAL, INC v MONTOYA, 904 P.2d 468 (1995) the

Colorado Appeals court said, “We agree that Restatement (Second) of Agency provides authority

for the resolution of the factual issues in this case.”

As in Montoya, the law of agency in RESTATEMENT THIRD § 3.07 provides authority for

the resolution of the factual issues in this case. § 3.07 Death, Cessation of Existence….states:

(4) When a principal that is not an individual ceases to exist or commences a process

that will lead to cessation of its existence or when its powers are suspended, the

agent's actual authority terminates except as provided by law.

In FINANCE CALIFORNIA, INC. vs LAWYERS TITLE INSURANCE CORPORATION

and LORRAINE HALICA, No. 3:07cv804 (MRK, Connecticut 2010) the court explained when an

agency relationship ended when it said:

“When both the agent and principal are corporate entities, the agent's actual authority

terminates only (1) when the agent or principal ceases to exist as an entity or commences a

process that will lead to cessation of its existence.

In an article written by Roger Mezger on April 23rd

, 2008 entitled “Merrill Lynch says

National City misrepresented First Franklin deal” the article discloses that First Franklin

operations were closed by Merrill Lynch. (Exh E)

The article said:

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By 2003, First Franklin was generating $30 billion a year in loans. The price Merrill

Lynch paid for it yielded a profit of $1 billion for National City. But last month

Merrill Lynch closed First Franklin because it had become worthless. First Franklin

employed 2,100 last year.

Thus MERS authority to act as a nominee or agent ended in March of 2008 when First

Franklin ceased operation and therefore ceased to exist. Therefore the presumption that MERS

is the nominee and/or agent of First Franklin in the Assignment Document with authority to

make an assignment makes the Assignment “spurious under CRCP 105.1 (b) which Petitioner

has overcome with the proof of the non existence of First Franklin. Therefore, the language

contained in the assignment presuming to purport an agency relationship exists between MERS

and First Franklin is a material misstatement or false claim, and as defined under Section 38-35-

201, C.R.S. 2012 is a “Spurious Document”. Furthermore, DEUTSCHE BANK as trustee,

MERS, and the “Trust” had actual or imputed knowledge of the fact when they made the

assignment which makes the assignment fraudulent.

ISSUE 2: Does MERS have the authority to transfer the Promissory Note as the mortgage

assignment purports?

The Assignment of the mortgage states:

KNOW ALL MEN BY THESE PRESENTS that on, November 14, 2006, JANE

WORLEY, did grant, bargain, sell and convey the property described in the Deed of Trust

to the Public Trustee of the County in which said Deed of Trust was recorded, which

property was to be hold in trust, by such Public Trustee for the use and benefit of Assignor,

to secure for payment of a Promissory Note for the original principal sum of $169,350.00,

together with interest.

NOW THEREFORE, in consideration of the sum of ten dollars and other valuable

consideration, paid to the Assignor, the receipt, adequacy and sufficiency of which is

hereby acknowledged, Assignor hereby assigns unto the said Assignee, the said Deed of

Trust and Promissory Note secured thereby, together with all moneys now owing or that

may hereafter become due or owing in respect thereof, and the full benefit of all powers

and of all the covenants and provisos therein contained, and said Assignor hereby grants

and conveys unto the said Assignee, all of Assignor's beneficial rights, title and interest,

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under the Deed of Trust, in and to the following described property, situated in the County

of Arapahoe, State of Colorado...

ARGUMENT

In MERS PROCEDURES MANUAL at p. 48 (Exh. F), MERS admits the following:

Transfer of Beneficial Rights to Member Investors

Overview

Although MERS tracks changes in ownership of the beneficial rights for loans

registered on the MERS System, MERS cannot transfer the beneficial rights to the

debt. The debt can only be transferred by properly endorsing the promissory note to

the transferee.

Therefore, the subject Assignment of the Promissory Note by MERS to DEUTSCHE BANK

as trustee contains a material misstatement or false claim which makes the assignment a “spurious

document” as defined under Section 38-35-201, C.R.S. 2012. Again, DEUTSCHE BANK as

trustee, the “Trust”, and MERS had actual or imputed knowledge of the fact when they made the

assignment which makes the assignment fraudulent.

ISSUE 3: WHETHER US BANK AS TRUSTEE OBTAINED THE DEED OF TRUST

AND PROMISSORY NOTE IN GOOD FAITH FOR VALUABLE

CONSIDERATION WHEN US BANK HAD EITHER ACTUAL OR

IMPUTED KNOWLEDGE OF IMFIRMITIES WITH THE TRANSACTION

WHICH HAS A DISPROPORTIONATE PAYMENT OF TEN DOLLARS TO

THE VALUE OF THE PROPERTY AND WITH FRAUDULENT INTENT

ARGUMENT

In Deutsche Bank Trust Company Americas v. Samora, 2013 COA 81 citing Vitols v.

Citizens Banking Co., 10 F.3d 1227,1233 (1993) in ¶50 the court said:

“A transferee does not take an instrument in good faith and is therefore not a holder

in due course when there are sufficient facts to indicate that the transferee, by virtue

of its unusually close relationship with the transferor, had reason to know or should

have known of infirmities in the underlying transactions from which the instrument

originated’”

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In Deutsche Bank Trust Company Americas v. Samora. , 2013 COA 81, the Court of Appeal

stated “[H]older in due course” means the holder of an instrument if:

1. The instrument when issued or negotiated to the holder does not bear such apparent

evidence of forgery or alteration or is not otherwise so irregular or incomplete as to call

into question its authenticity; and

2. The holder took the instrument (i) for value, (ii) in good faith, (iii) without notice that

the instrument is overdue or has been dishonored or that there is an uncured default

with respect to payment of another instrument issued as part of the same series, (iv)

without notice that the instrument contains an unauthorized signature or has been

altered, (v) without notice that any claim to the instrument described in section 4-3-

306, and (vi) without notice that any party has a defense or claim in recoupment

described in section 4- 3-305(a). § 4-3-302(a), C.R.S. 2012; see, e.g., Money Mart

Check Cashing Center, Inc. v. Epicycle Corp., 667 P.2d 1372, 1373-74 (Colo. 1983).

The Supreme Court of Colorado decided the case of CLINTON GEORG v METRO

FIXTURES CONTRACTORS, INC., Case No. 07SC26 (Mar. 2008) and held that there was an

important distinction between a holder and a holder in due course. The court said in part that:

A holder in due course must meet five conditions: (1) be a holder;2 (2) of a negotiable

instrument3 who took it; (3) for value;

4 (4) in good faith;

5 (5) without notice of certain

problems with the instrument.6 Id. at § 17-2, 151-52.

To be a holder one must meet the two conditions in section 4-1-201(b)(20): (1) he or she

must have possession (2) of an instrument drawn, issued, or indorsed to him or her. Id. at §

17-3, 152. Possession is an element designed to prevent two or more claimants from

qualifying as holders who could take free of the other party’s claim of ownership. 6

William D. Hawkland & Lary Lawrence, Uniform Commercial Code Series, § 3-301:3

(1999). With rare exceptions, those claiming to be holders have physical ownership of the

instrument in question. White & Summers, supra, at § 17-3, 152.

The critical distinction is that a holder of an instrument “drawn, issued, or indorsed to him or

her would be an intermediary or agent who is authorized to have constructive possession for the

holder in due course.”

In Deutsche Bank Trust Company Americas v. Samora. , 2013 COA 81 fn 3, the court said:

3 Here, the trustee is acting for the Trust and advancing a claim on behalf of the

Trust. Accordingly, the Trust must satisfy holder in due course status. The parties

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stipulated that the Trust took the Note and Deed of Trust without actual knowledge

of any wrongdoing or fraud. The record indicates that the Trust gave value for the

Note and Deed of Trust.

Unlike the “Trust” in Samora, the facts and Plaintiff’s arguments will show that the “Trust” in

this case did not take the Note and Deed of Trust for value, in good faith, and without notice of the

problems in the transaction.

Therefore DEUTSCHE BANK as trustee is the “holder for the Trust who in turn is the holder

in due course who must take the instrument for “value, in good faith, and without notice of certain

problems with the instrument which it did not.

In Danvers Savings Bank v. Hammer, 122 N.H. 1, 5 (1982) the court held that “The price

paid, however, was so grossly disproportionate to Hammer's debt and the value of the property "as

to indicate bad faith or lack of reasonable diligence."

In BAKER v. WOOD et al., No. 162. 157 U.S. 212, 15 S.Ct. 577 (1895) the Supreme Court of

the United States considered whether the Colorado assignee obtained the assignment of the property

for a valuable consideration and whether he had knowledge of fraud.

In King v. Doane, 139 U.S. 166, 173, 11 Sup. Ct. 465, it was stated as the general rule that 'if, in

an action by an indorsee against the maker, a negotiable note is shown to have been obtained by

fraud, the presumption, arising merely from the possession of the instrument, that the holder in

good faith paid value, is so far overcome that he cannot have judgment unless it appears

affirmatively from all the evidence, whether produced by the one side or the other, that he in

fact purchased for value,' while, if the fact is established that he did so, 'he will be entitled to

recover, unless it is proved that he purchased with actual notice of defect in the title, or in bad

faith, implying guilty knowledge or willful ignorance.'

The effect of the assignment of a judgment at common law was merely to transfer an

equitable title, and the assignee was not authorized to bring an action thereon in his own name.

We are aware of no statute of Colorado permitting the assignment of a judgment so as to vest

title in the assignee, but there is a provision in the Code of that state (Code Civ. Proc. § 3) that

suit should be brought in the name of the real party in interest, and it is contended that the effect

of this is to unite the legal title with the equitable ownership in the instance of such an

assignment. Nevertheless, the question in this case is whether the real owner of a judgment, the

plaintiff therein, must fail of relief, as against an assignee of that judgment, to whose assignor

plaintiff had in form assigned it, thereby furnishing him with the indicia of title, because

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estopped to assert his ownership, on the ground that such second assignee occupies the position

of a purchaser for value in good faith and without notice, in reliance on the apparent ownership.

The fraud committed on complainant by Hulburd is conceded, and the inquiry relates to the

defense of a valuable consideration, paid in good faith and without notice

The amount of the consideration is, under some circumstances, important in determining

whether, within the rule on the subject, the purchaser paid value, for the amount paid may be so

disproportionate to the real value of the security purchased that the claim to have paid value will

be treated as a pretense, and the security as having been obtained without paying anything for it;

and it is also, and more commonly, important as bearing upon the question of notice and good

faith. King v. Doane, supra. Here the judgment was for $16,054, with interest at 10 per cent.

from November 12, 1883, and the amount paid was $2,500. While there was evidence tending to

show that the judgment was not worth its face, nevertheless the disproportion is so great as to

form a significant element in the transaction. Moreover, it must be remembered that Hulburd

was Baker's attorney, and had recovered the judgment in question as such. When, therefore, the

attorney of record entertained, as his client's assignee, the offer of such a sum, the law imposed

upon the proposed purchasers the burden of inquiry, and their conduct is to be tested

accordingly.

The case was remanded to trial court with direction that the assignment should be canceled, and

Wood and Seeley's administrator decreed to account for the amounts received, less the amount

paid, with interest.

As the court in Baker held, this transaction should be invalidated because of the lack of value

and bad faith of MERS,DEUTSCHE BANK as trustee, and “the Trust” as the holder in due course

had knowledge of the infirmities, either actual or imputed under the Close Relationship Doctrine.

Deutsch Bank as trustee and “the Trust” have a close Relationship, as well as Deutsche Bank

with MERS, who is a MERS member with a mutually extensive business relationship. (Exh. G)

The consideration given was so greatly disproportionate to the value of the property that it forms a

significant element in the transaction since “The Trust” as a “Holder in Due Course” must prove

that it took the note for value, in good faith, and without notice of any problems with the

transaction.

The Close Relationship Doctrine imputes knowledge of the wrongful acts so that in this case

The “Trust’s” consideration for the note would not make it a holder in good faith because of the

imputed knowledge that First Franklin had ceased to exist and MERS could not transfer debt.

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US Bank as trustee of the Merrill Lynch/First Franklin Trust must have had actual/or

imputed knowledge that Merrill Lynch closed First Franklin in 2008, and MERS as a former agent

of First Franklin had actual/or imputed knowledge that First Franklin had ceased operations. First

Franklin was also a former member of MERS and was delisted as an active member by MERS

when First Franklin ceased operations in 2008. Therefore, both parties knew that MERS

assignment to DEUTSCHE BANK as trustee was fraudulent.

With MERS help US Bank as trustee (the holder) could pick up the property for Trust (the

holder in due course), for no money at all. First Franklin could not complain over the ten dollar

which First Franklin could never receive since they were no longer in existence. Plaintiff asks this

court to make DEUTSCHE BANK as trustee produce the cancelled check dated October 4th

, 2011

that it purportedly paid the ten dollars as proof of some consideration. More than likely, there was

no consideration at all. Therefore, US Bank N.A as “Holder” and the “Trust” as a “Holder in

Due Course “as defined by the Supreme Court of Colorado in CLINTON GEORG and the court in

Samora cited above, as well as the US Supreme Court in Baker vs Wood, did not take the property

“for value, in good faith, and without notice of certain problems with the instrument” and the

purported assignment for the consideration of TEN DOLLARS of the Assignment of the

Promissory Note by MERS to DEUTSCHE BANK as trustee contains a material misstatement or

false claim which makes the assignment a “spurious document” along with the material

misstatements in issues I & 2 as defined under Section 38-35-201, C.R.S.2012 (Exh A)

THE LIS PENDENS RELATED TO THE ASSIGNMENT WHICH WAS FILED

PURSUANT TO CASE NO. 2013cv435 MUST ALSO BE INVALIDATED BECAUSE IT

RESTS ON THE VALIDITY OF THE ASSIGNMENT

Petitioner submits the three issues above with the attendant legal arguments, leaves little doubt

as to the invalidity of the mortgage assignment which makes several material misstatements.

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Accordingly, the Lis Pendens can only exist because of a valid Assignment which petitioner

believes that she has discredited.

WHEREFORE, for the above stated reasons, it is hereby requested that this Court issue an

Order To Show Cause why the Mortgage Assignment dated October 4th, 2011, and its related lis

pendens (Reception # D3078612, Exh B) , should not be removed from the record as “spurious

documents” and Petitioner be awarded Costs and Attorney’s Fees in this matter.

Respectfully submitted,

____________________ Dated: February , 2014

JANE WORLEY

VERIFICATION

I, JANE WORLEY, am a plaintiff in the above-entitled action. I have read the foregoing

complaint and know the contents thereof. The same is true of my own knowledge, except as to those

matters which are therein alleged on information and belief, and as to those matters, I believe it to

be true.

I declare under penalty of perjury that the foregoing is true and correct and that this verification

was executed at Aurora, Colorado.

____________________ DATED: February , 2014

JANE WORLEY