1 2 3 4 5 6 7 8 9 10 11

William Novotny (#004239) william.novotny@mwmf.com Michael J. Plati (#016705) mike.plati@mwmf.com MARISCAL, WEEKS, MCINTYRE & FRIEDLANDER, P.A. 2901 North Central Avenue Suite 200 Phoenix, Arizona 85012-2705 Phone: (602) 285-5000 Fax: (602) 285-5100 Attorneys for Plaintiff

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF ARIZONA In re CHARLES AND CHRISTA CROWELL, Chapter 11 Case No. 4:09-bk-07333-JMM

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Defendants. Plaintiff Deutsche Bank National Trust Company, as Indenture Trustee for New Century Alternative Mortgage Loan Trust 2006-ALT1 (Plaintiff), for its Complaint against Defendants J&J and A&A, L.L.C. (J&J) and Charles and Christa Crowell (the Debtors or Crowells), alleges as follows: Debtors. ____________________________________ DEUTSCHE BANK NATIONAL TRUST Adversary No. 4:10-ap-00156-JMM COMPANY, as Indenture Trustee for New Century Alternative Mortgage Loan Trust 2006-ALT1, COMPLAINT FOR DECLARATORY RELIEF Plaintiff, v. J&J and A&A, L.L.C., an Arizona limited liability company; CHARLES and CHRISTA CROWELL, husband and wife,

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 -1Main Document Page 1 of 35

Desc

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 C]. 1. 2.

GENERAL ALLEGATIONS Plaintiff is the trustee of a trust. Upon information and belief, J&J is an Arizona limited liability company

authorized to do business in Arizona. 3. Upon information and belief, the Crowells are husband and wife who reside in

Cochise County, Arizona. 4. This Court has jurisdiction over this proceeding pursuant to 28 U.S.C. 157

and 1334 and Rule 7001(2) and (9) of the Federal Rules of Bankruptcy Procedure. This adversary proceeding arises in or is related to the proceedings commenced on April 14, 2009 by the Debtors under Chapter 11 of the Bankruptcy Code. 5. This is a core proceeding pursuant to 28 U.S.C. 157(b)(2)(A), (K), and (O).

Venue is proper before this Court pursuant to 28 U.S.C. 1409. 6. The real property that is the subject of this proceeding is located in Cochise

County, Arizona. 7. In March 2006, the Crowells borrowed $417,000.00 from New Century

Mortgage Corporation (Loan). The loan was evidenced by a promissory note (Note) and secured by a Deed of Trust (DOT I) on real property located at the south end of Richards Road in Hereford, Arizona (the Property). [Exhibit A]. 8. 9. DOT I, however, was not recorded until September 13, 2007. [Id.]. During the interim, on January 5, 2007, J&J recorded a deed of trust granted by

the Crowells on the Property and on three other real estate parcels to secure a $1,090,000.00 loan (the J&J DOT). The three other parcels included a parcel with a 1358 square foot residence (Lot 10), 2.31 acres of vacant land (the 2.31 Acre Parcel), and 21.5 acres of vacant land (the 21.5 Acre Tract). [Exhibit B]. 10. Plaintiff is now the holder of the Note and the beneficiary under DOT I. [Exhibit

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 -2Main Document Page 2 of 35

Desc

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

11. 12.

The Crowells have defaulted on the Loan. The loan underlying the J&J DOT is also apparently in default. J&J has

recorded a Notice of Trustees Sale on the Property, Lot 10, and the 21.5 Acre Tract. 13. A deed in lieu of foreclosure in favor of J&J has been recorded with respect to

the 2.31 Acre Parcel. 14. J&Js trustees sale has been postponed several times, is currently scheduled for

February 2, 2009 at 10:00 a.m. (the Scheduled Sale), and is stayed by these bankruptcy proceedings. COUNT ONE (Declaratory Relief: Lien Priority) 15. 16. Plaintiff reasserts the allegations set forth above as if fully repeated herein. Upon information and belief, J&J was actually aware and had received notice of

DOT I when the J&J DOT was recorded. 17. A justiciable dispute exists as to whether DOT I is a senior position lien on the

Property vis--vis the J&J DOT. 18. The Court should declare that DOT I constitutes a duly perfected first position

lien on the Property vis--vis the J&J DOT. COUNT TWO (Declaratory Relief: Lien Priority) 19. 20. Plaintiff reasserts the allegations set forth above as if fully repeated herein. The J&J DOT contains a term which requires J&J to release the Property from

the J&J DOT upon a principal reduction payment of $190,000.00. 21. Upon information and belief, the Crowells have provided and/or tendered to J&J

the equivalent of $190,000.00 in principal reduction payments. 22. J&J DOT. Upon information and belief, J&J has refused to release the Property from the

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 -3Main Document Page 3 of 35

Desc

1 2 3 4 5 6 7 8 9 10 11 12 13 14

23.

A justiciable dispute exists as to whether the $190,000.00 release provision in

the J&J DOT remains operative and mandates a release of the Property from the J&J DOT. 24. The Court should declare that: a) J&J is obligated to release the Property from

the J&J DOT due to the Crowells previous payment of $190,000.00 for principal reduction on J&Js underlying loan; or b) J&J must release the J&J DOT in the event of such a payment. WHEREFORE, Plaintiff prays that the Court enter judgment against J&J and the Crowells as follows: A. B. C. D. E. Declaring that Plaintiff holds a senior lien position on the Property vis-vis the J&J DOT; Alternatively, declaring that J&J must release the Property from the J&J DOT due to a previous $190,000.00 principal payment made to J&J; Alternatively, declaring that J&J must release the Property from the J&J DOT in the event of a $190,000.00 principal payment to J&J; Awarding Deutsche Bank its costs incurred in this Adversary Complaint; and Any other relief the Court deems just and proper.

15 16 17 18

DATED this 25th day of January, 2010. MARISCAL, WEEKS, MCINTYRE & FRIEDLANDER, P.A. WN/4239 By: William Novotny Michael J. Plati 2901 N. Central Avenue, Suite 200 Phoenix, Arizona 85012-2705 Attorneys for Plaintiff

19 20 21 22

U:\ATTORNEYS\TJT\Fidelity - 11754\Deutsche Bank adv. J&J and A&A, LLC - 275\Pleadings\Complaint.doc

23 24 25 26

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 -4Main Document Page 4 of 35

Desc

EXHIBIT A

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 5 of 35

Desc

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 6 of 35

Desc

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 7 of 35

Desc

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 8 of 35

Desc

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 9 of 35

Desc

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 10 of 35

Desc

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 11 of 35

Desc

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 12 of 35

Desc

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 13 of 35

Desc

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 14 of 35

Desc

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 15 of 35

Desc

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 16 of 35

Desc

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 17 of 35

Desc

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 18 of 35

Desc

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 19 of 35

Desc

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 20 of 35

Desc

EXHIBIT B

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 21 of 35

Desc

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 22 of 35

Desc

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 23 of 35

Desc

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 24 of 35

Desc

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 25 of 35

Desc

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 26 of 35

Desc

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 27 of 35

Desc

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 28 of 35

Desc

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 29 of 35

Desc

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 30 of 35

Desc

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 31 of 35

Desc

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 32 of 35

Desc

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 33 of 35

Desc

EXHIBIT C

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 34 of 35

Desc

Case 4:10-ap-00156-JMM

Doc 1 Filed 01/25/10 Entered 01/25/10 17:29:57 Main Document Page 35 of 35

Desc