UNITED STATES DISTRICT COURT

FOR THE

DISTRICT OF VERMONT
ERNEST J. CICCOTELLI Plaintiff v. WASHINGTON MUTUAL, INC., WASHINGTON MUTUAL BANK, MORTGAGE TRUST GROUP, INC., DONALD LAPLUME, J.P. MORGAN CHASE & CO., JAMES (JAMIE) DIMON, FEDERAL DEPOSIT INSURANCE COMPANY, AND SHEILA C. BAIR Defendants ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Case No. 5:10-cv-00016-cr

SECOND AMENDED COMPLAINT NOW COMES Plaintiff, ERNEST J. CICCOTELLI, Pro Se, with his SECOND AMENDED COMPLAINT, and in support of his complaint states the following: PARTIES, JURISDICTION AND VENUE 1. Plaintiff, Ernest J. Ciccotelli, resides 49 Tigertown Road, in Norwich, Vermont, with his two sons, in the home that he designed and built in 1990; Plaintiffs residence is the real property that is the subject of the Mortgage and secures the Note which are the objects of this complaint. 2 Defendant, Washington Mutual Inc. (WMI), a corporation duly formed in the Sate of . Washington with a principal place of business at 9200 Oakdale Avenue, Chatsworth, California 91311, doing significant, regular business within the State of Vermont. 3 Defendant, Washington Mutual Bank (singly, WMB, and together with Washington . Mutual, Inc, WaMu), duly formed in the Sate of Washington with a principal place of business at 9200 Oakdale Avenue, Chatsworth, California 91311, doing significant, regular business within the State of Vermont.

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4. Defendant, Mortgage Trust Group, Inc. (the Agency), a corporation duly formed in the Sate of Massachusetts with a principal place of business at108 Grove Street, Worcester, Massachusetts 01605, and duly licensed to provide loan brokerage services in Vermont, license number LL5313 and license number MB379 is the agency for the Lender. 5. Defendant, Donald LaPlume, agent and loan broker employed by the Agency Inc. (the Agent), with a residence at 14 East Street, Claremont, New Hampshire 03743 is the agent for the Lender. 6 Defendant, J.P. Morgan Chase & Co., in conjunction with its subsidiary, J.P. Morgan . Chase Bank, N.A., (both referred to singularly as JPMC), a corporation duly formed in the State of Delaware, with a principal place of business at 270 Park Avenue, New York, New York 10017, doing significant, regular business within the State of Vermont. 7 Defendant James Jamie Dimon, Chairman and Chief Executive Officer of Defendant . JP Morgan Chase & Co., with an office and principal place of business at 270 Park Avenue, New York, New York 10017. 8 Defendant Federal Deposit Insurance Corporation (FDIC), Receiver for Defendant . Washington Mutual Bank and standing in its place in this matter, with a principle place of business at 550 17th Street NW, Washington, D.C. 20429. 9 Defendant Sheila C. Bair, Chairman of Defendant FDIC, with an office and principle . place of business at 550 17th Street NW, Room MB-6028, Washington, D.C. 20429. 1. In this action Plaintiff seeks damages for violations of the State of Vermonts laws 0 regarding, among others, mortgages and notes, contracts, fraud, and larceny, said violations occurring within the State of Vermont, and therefore jurisdiction and venue are properly with this court. FACTS (In order to comply with the requirement for pleadings to be concise as possible, Facts as originally presented in the previous complaints have been removed, however, Plaintiff reserves the right to reintroduce such facts as have been adduced in previous versions of this complaint.) 11. Washington Mutual Bank, a subsidiary of Washington Mutual Inc., is a debt collector 1. that serviced a note (the Note) for a loan to refinance Plaintiffs home and a mortgage 2 securing the Note (singularly, the Mortgage, and together with the Note, referred to as

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the Loan) from the Plaintiff. 1. The Lender shown on the mortgage is Long Beach Mortgage Company (LBMC), is the 3 only mortgagee of record; no assignments or successors are shown in the record. 1. JP Morgan Chase & Co. purchased the banking assets of Washington Mutual Bank from 4 the Federal Deposit Insurance Corporation when WMB failed and was put into Receivership by the Office of Thrift Supervision, said assets included Plaintiffs mortgage and note on his property at 49 Tigertown Road, in Norwich, Vermont, on or about September 25, 2008. 1. An investigation of the Norwich Land Records made on July 17, 2008, shows that there 5 is no record in the Norwich Land Records showing that either WMB or WMI were assigned the Loan by Long Beach Mortgage Company, nor does the record show that either WMB or WMI owned or held the Loan, and that neither WMB nor WMI were the mortgagee of record. 1. A subsequent investigation of the Norwich Land Records made on August 12, 2010, 6 shows that there is no record in the Norwich Land Records showing that JP Morgan Chase & Co., or any subsidiary thereof has been assigned the Loan by Long Beach Mortgage Company, nor does the record show that JPMC owns or holds the loan, nor does the record show that JPMC is the mortgagee of record. 17. Said investigation of the Norwich Land Records shows no other assignee or successor to Long Beach Mortgage Company. 1. An investigation conducted on or around July 18, 2008, of the Corporations Division of 8 the Office of the Delaware Secretary of State, where Long Beach Mortgage Company is duly incorporated reveals that Long Beach Mortgage Company has been dissolved. 19. The note and mortgage which secures it are on Plaintiffs home at 49 Tigertown Road, in Norwich, Vermont (the Property); the Mortgage is recorded in the Norwich Land Records in Book 174, Pages 514-533. 20. The Loan documents are dated September 19, 2005. 21. The account number for the Loan is 0696363456. 22. The terms of the Note were $165,000, 30 years, at 7.70% starting on November 1, 2005, with an initial payment of $1,176.38 per month. 23. No escrow was withheld or required to be withheld at the time of the closing of the loan.

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24. The Board of Listers for the Town of Norwich, Vermont assessed at that time, and continues to assess the property at the present time, for $310,000. 25. In preparation for the loan, Richard Tracy of Sharon, Vermont, the appraiser hired by the Agent or Agency, appraised Plaintiffs home for $450,000, in July, 2005. 2. Depending on which assessment is used, Plaintiffs debt to value ratio is either 0.53 6 (mortgage:$165,000/Listers assessment:$310,000 = .53) or .37 (mortgage: $165,000/Lenders appraisers assessment: $450,000 = .37. 27. The header of the Note states that it is a FIXED/ADJUSTABLE RATE NOTE. 2. Not clearly apparent within the text of the Note is a reference that the first interest rate 8 adjustment occurs on October 1, 2007, and changes every 6 months thereafter. 29. On October 1, 2007, the rate changed to 9.700%, and the regular payment made by Plaintiff was raised to $1,402.78 per month, an increase of 19% over the original payment amount. 3. The index that the Loans rate is based on is the LIBOR for 6 month dollar deposits, on a 0 date that is 45 days prior to each scheduled rate adjustment date. 3. The calculation of the adjusted rate is 4.990% added to the index, an amount 1 approximately 2 to 3 percentage points higher than an index based on Treasury Bills (TBills) used for most Adjustable Rate Mortgages (ARMs) and the ARMs that Plaintiff had personal experience with. 3. If Plaintiff loses the Property through acceleration of the Note and foreclosure on the 2 Mortgage, 1) he will lose the equity he has built up in the Property over the course of over 20 years, 2) he will suffer defamation of character through negative reports on his credit report, and 3) he (and his sons) will suffer severe emotional distress for losing a possession the property that is irreplaceable and the major emotional touchstone of his sons lives and his own, for which he paid an unusually heavy price in foregoing a lucrative career in Boston as a medical devices engineer so that his sons could be raised in Vermont as their mother had been raised. (Counts I through IV have been dismissed by order of the Court. Remaining counts retain their original numbers.)

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COUNT V FRAUD IN THE INDUCEMENT 3. Plaintiff repleads paragraphs 1 through 32, above, and further states: 3 34. Agent made misleading and false statements regarding the benefits to Plaintiff of the Loan on numerous occasions. 35. Agent made false or misleading statements minimizing the difficulty of refinancing the Loan when its interest rate was adjusted to a level that would guarantee that monthly payments would become onerous on numerous occasions. 36. Agent made false or misleading statements regarding the manner in which the Loan would benefit Agents and Plaintiffs business relationship on numerous occasions. 37. Agent withheld material information regarding the index upon which the interest rate of the Loan is based. 38. Agent withheld material information regarding the securitization and difficulties that would cause Plaintiff in his performance of the Loan. 39. Agent made said false or misleading statements in order to induce Plaintiff into agreeing to the Loan, despite the higher interest rate on the Loan than the prior mortgages that Plaintiff was paying at the time he applied for the Loan. 40. Plaintiff relied on Agents statements: had Agent not made said false or misleading statements, and had Agent provided said material information, Plaintiff would not have agreed to undertake performance on the Loan, which, 41. But for being induced to agree to the Loan, Plaintiffs Property would not now be in jeopardy of foreclosure, and Plaintiff would not be at risk of financial loss therefrom. 4. Defendants WaMu and JPMC vicariously liable for Agents actions because they 2 controlled Agents actions at the inception and closing of the Loan, or they continue to enjoy the benefits of the Loan, or both. 4. Defendants fraud has made Plaintiffs credit history worse, resulting in higher expenses 3 for Plaintiff, has caused Plaintiff serious emotional distress, caused difficulty for his business and loss of income, and has threatened Plaintiffs continued ownership of his home and the equity he has in it.

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COUNT VI FRAUD PURSUANT TO 9 V.S.A. Chapter 63: Consumer Fraud 4. Plaintiff repleads paragraphs 1 through 43, above, and further states: 4 45. Mortgagee of record is Long Beach Mortgage Company. 46. Mortgagee of record is no longer an active corporation and has been dissolved. 47. Lender began to collect monthly Mortgage payments beginning October 1, 2005. 48. Lender is not mortgagee of record. 49. Lenders collection of payments on the Mortgage and Note is fraud, because there is no record, notice or other evidence that the Mortgage was assigned or transferred to Lender from Long Beach Mortgage Company, and Lender has no right to collect said payments. 5. Defendants WaMu and JPMC claims to be the mortgagee are fraudulent because they have 0 knowingly, deliberately, and maliciously misrepresented themselves to Plaintiff to be the mortgagee for the Mortgage in order to obtain the monthly mortgage payments due the true mortgagee, if any. 5. Defendants WaMu and JPMC have committed ongoing fraud against Plaintiff because the 1 wrongfully claims to be entitled to Plaintiffs mortgage payments. 5. Defendants WaMu and JPMC did not originate the Loan, they have not paid the owners of 2 the Loan to take title to the Mortgage, and do not make payments from Plaintiffs payments to the owners of the Mortgage. 53. JPMC is defrauding not only Plaintiff, but also the owners, if they still exist, of the Mortgage. 54. Defendants have failed to identify the owners of the mortgage, and attempted to claim ownership of the mortgage themselves. 5. Attempts by WaMu, JPMC or FDIC to recreate or relocate so-called lost documents so as to 5 support their contention that JPMC is the current legal owner of the Note and Mortgage is fraud. 5. Defendants fraud is caused and continues to cause Plaintiff to incorrectly appear to be in 6 default on payments of the actual owners of the Loan. 5. Defendants fraud will result in the loss of Plaintiffs home and equity through foreclosure or 7 other actions if Defendants are not enjoined from action of this or similar nature against Plaintiff.

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COUNT VII BREACH OF CONTRACT 5. 8 Plaintiff repleads paragraphs 1 through 57, above, and further states:

5. The Lender deliberately precipitated the default for the Plaintiff when it had the option to 9 avoid doing so, not as a means to protect its investment in the Loan, but rather merely to maximize its profit, by shortening the time period during which Plaintiff can repay the Loan than the Lender had agreed to in the Note and Mortgage. 60. The Lender is forcing Plaintiffs default so as to provide the Lender a pretext for accelerating the Loan and initiating a foreclosure on the Property. 6. 1 Defendant has failed to perform by deliberately, knowingly, and maliciously violating material terms of the Agreement, including, among others, the repayment period of the Mortgage, which is for thirty (30) years. 62. Defendants breach of contract has made Plaintiffs credit history worse, resulting in higher expenses for Plaintiff, has caused Plaintiff serious emotional distress, caused difficulty for his business and loss of income, and has threatened Plaintiffs continued ownership of his home and the equity he has in it. COUNT VIII TORTIOUS INTERFERENCE WITH CONTRACTUAL OBLIGATIONS 6. 3 6. 4 Plaintiff repleads paragraphs 1 through 62, above, and further states: In addition to deliberately, knowingly, and maliciously interfering with Plaintiffs

contractual obligation under the Mortgage and the Note, Defendants have also deliberately, knowingly, and maliciously interfered with Plaintiffs performance on other contractual obligations. 6. 5 Defendants have interfered with Plaintiffs other contractual obligations by increasing the payments required from Plaintiff to Defendants, thereby reducing the amount of funds Plaintiff has available for payment of the other contractual obligations, causing Plaintiff to be in arrears on the debts related to the other contractual obligations and delinquent on those obligations. 66. Defendants interference with Plaintiffs contractual relations has made Plaintiffs credit history worse, resulting in higher expenses for Plaintiff, has caused Plaintiff serious

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emotional distress, caused difficulty for his business and loss of income, and has threatened Plaintiffs continued ownership of his home and the equity he has in it. COUNT IX CONSUMER PROTECTION PURSUANT TO 8 V.S.A. 10404 6. 7 68. 69. 70. Plaintiff repleads paragraphs 1 through 66, above, and further states: Lender has established an escrow account incident to the Note and Mortgage for Lender requires Plaintiff to deposit into said escrow account a greater sum than is The greater sum required by Lender has caused Plaintiff to be unable to make the

the purpose of paying Property Taxes. sufficient to pay taxes. monthly Mortgage payments in a timely manner, providing Lender with a pretext to foreclose on Plaintiffs Property. 7. The greater sum required by Defendants has made Plaintiffs credit history worse, resulting 1 in higher expenses for Plaintiff, has caused Plaintiff serious emotional distress, caused difficulty for his business and loss of income, and has threatened Plaintiffs continued ownership of his home and the equity he has in it. COUNT X CONSUMER FRAUD PURSUANT TO 9 V.S.A. 2453 and 2457 7. 2 73. 74. 75. 76. Plaintiff repleads paragraphs 1 through 71, and further states: Defendants made repeated assertions that Plaintiff would be able to refinance the Defendants made repeated assertions that the Loan would benefit Plaintiff and his Plaintiff relied on Defendants assertions in his decision to agree to the Loan. Moreover, Defendants have failed to provide services related to the Loan in the

Loan when it was scheduled for an interest rate increase. business relationship with the Agent.

manner and of the nature offered, and have refused to provide services related to the Loan in accordance with other terms and conditions of the offer. 77. Defendants intended to violate Consumer Fraud laws of Vermont.

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78. Defendants violation of the Consumer Fraud law if Vermont has made Plaintiffs credit history worse, resulting in higher expenses for Plaintiff, has caused Plaintiff serious emotional distress, caused difficulty for his business and loss of income, and has threatened Plaintiffs continued ownership of his home and the equity he has in it.

COUNT XI UNCONSCIONABLE CONTRACT PURSUANT TO 9A V.S.A. 2-302 7. 9 Plaintiff restates paragraphs 1 through 78, above, and further states:

8. Through foreclosure precipitated by the Lender under the pretext of protecting its 0 investments created through the exercise of a redundant right incorporated into the Mortgage, said right being only to create the pretext for foreclosure in the first place. 81. Defendants were and are in far better positions than Plaintiff to determine the effects of the economy and market on Plaintiffs ability to make payments, yet they chose to draft Note and Mortgage documents that disregarded the potential difficulties for Plaintiff that any reasonable person with experience in drafting such documents would have been familiar with, thereby denying Plaintiff the ability to continue to perform his obligations under the Note and Mortgage when changes in circumstances beyond his control occurred. 82. Defendants were aware of the small size of the Loan relative to the high value of the Property securing the Loan and the ease with which they could dispose of the Property in the event of their own need to dispose of it. 83. Defendants did not negotiate or bargain with Plaintiff during the application and agreement process for the Loan, but rather, Defendants dictated to Plaintiff the conditions he had to adhere to, without negotiation of any sort between the parties. 84. Defendants drafted the Note and Mortgage with no negotiation, bargaining, or input from Plaintiff. 85. Defendants drafted the Note and Mortgage to maximize their own benefits from the Loan while eliminating all risk to themselves, while maximizing Plaintiffs risks of loss from the Loan without providing any proportionate benefit to Plaintiff. 86. Defendants drafted the Note and Mortgage to facilitate the fabrication of the pretext necessary to produce the circumstances required for foreclosure on the Property.

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87. Defendants drafted the Note and Mortgage in such a manner as to allow them to avoid having to investigate the actual real estate tax consequences on the Property. 88. Defendants drafted the Note and Mortgage in such a manner to avoid investigating the manner that the Town of Norwich enforces or chooses not to enforce its property tax enforcement prerogatives. 89. Defendants deliberately, knowingly, and maliciously are engaging in actions so as to deprive Plaintiff of the value of his Property. 90. Combined with promises and statements made by Defendants, particularly Agent, inducing Plaintiff to accept the Note and Mortgage, and combined with Plaintiffs understanding that if he did not accept the Mortgage and Note, and did not accept the Loan, that he would be unable to obtain financing on his home for an extended period of time, Plaintiff believed that he had no alternative but to agree to and accept the Loan. 91. Defendants unconscionable contract has made Plaintiffs credit history worse, resulting in higher expenses for Plaintiff, has caused Plaintiff serious emotional distress, caused difficulty for his business and loss of income, and has threatened Plaintiffs continued ownership of his home and the equity he has in it. COUNT XII VIOLATION OF IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING 9. 2 9. 3 Plaintiff restates paragraphs 1 through 91, above, and further states: Defendants have deliberately, willfully, and maliciously resisted any and all

attempts by Plaintiff to modify the Loan in order that he could perform his obligations, and accommodate the substantial necessitous circumstances that had occurred in his life unexpectedly. 94. Defendants have deliberately, willfully, and maliciously formed a corporate structure designed to resist or eliminate any and all attempts at meaningful communication between customers, specifically Plaintiff, and the Defendants. 95. In November, 2007, during the time that Plaintiff attempted to initiate modification of the Loan, WaMus representatives never informed Plaintiff that WaMu had paid off Plaintiffs property tax bill, and nor that WaMu had changed the balance that he owed them.

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9. On January 31, 2008, Plaintiff received his IRS form 1098 for 2007 from the Lender, 6 showing that he had paid $13,563.18 in interest on the loan, and $7,877.66 in taxes. 9. The tax payments were for delinquent taxes that Plaintiff owed the Town of Norwich, 7 Vermont for the one-half the tax year 2005-2006, and for tax year 2006-2007. 9. Plaintiffs taxes for tax year 2007-2008 had been paid in full at the time that the Lender 8 had investigated the towns tax rolls, and when it paid the back taxes. Defendants have ignored the fact that the town did not exercise its tax sale rights, nor threaten to exercise its tax sale rights, and Defendants refused to inquire into why that may have been, because the Defendants wanted to propagate a pretext that they were innocently exercising a right it had written into the contract between Plaintiff as borrower and itself in order to protect its investment, which pretext would have been negated had Defendants allowed evidence to be developed that would show that it knew that its investment was protected by Vermont law and the fact that the Loan was for an amount far lower than a reasonable market price for the Property would fetch; in other words, Defendants were engaging in the bad faith refuge of corporate scoundrels - that is, plausible deniability of a nefarious motive for its actions. 9. Defendants instituted an escrow account, however, the escrow account statement states 9 that the shortage of escrow is $13,723.34, an amount far in excess of any yearly tax bill applied to Plaintiffs property - almost three time as high as Plaintiffs tax bill for any one year. 10 The latest tax bill applied to the Property, for the fiscal year July 1, 2007 through June 30, 0 2008, issued on July 12, 2007, is $5,066.42, which was paid in full by Plaintiff and the State of Vermont under the income sensitivity provisions of Vermont tax law, by February 15, 2008, the due date for the final payment of that fiscal year. 101. Defendants have demanded that Plaintiff pay the amount of $13,723.34 over a unreasonably short period of time, and has given Plaintiff the option to make payments over the course of, at first, 12 months starting April 1, 2008, and subsequently, 36 months (the de minimus change referred to elsewhere in this complaint), or pay the amount in full on that date. 102. The monthly payments, including the escrow and shortfall, have risen to $2,991.40, from $1,402.78, which is an increase, itself, from the $1,176.38 that Plaintiff

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was originally paying and that Plaintiff believed that he could pay on a long term monthly basis, and was the basis on his decision to agree to the Loan in the first place. 13 On June 29, 2008, Plaintiff contacted the WaMu to cancel a previously arranged 0 electronic withdrawal from Plaintiffs bank account because Plaintiff knew the account would have insufficient funds to make the payment on June 30, and received a confirmation number 1565341350, confirming the cancellation of the withdrawal, and during the same call informed the WaMu that Plaintiff would be making the payment on June 30, 2008, with the payment being drawn on an alternate account. 14 0 On June 30, 2008, Plaintiff contacted WaMu by telephone and made the payment promised the day before from an alternate account, and received confirmation number 1565346532 confirming the payment. 15 0 On or around July 3, 2008, Plaintiff learned while viewing his account via internet, that despite the confirmed cancellation, WaMu had attempted to withdraw the cancelled payment on July 1, 2008, but the payment was not honored because, as Plaintiff had informed WaMu in advance, there were insufficient funds in the account to make the withdrawal from; however, the attempted withdrawal caused numerous checks that for which there had been sufficient funds to cover to also not be honored, causing numerous returned check fees. 16 0 On or around July 8, 2008, Plaintiff received a Home Loan Statement June 2008 from WaMu, dated June 30, 2008, which purported to show account activity since June 27, 2008, and which implied that WaMu had received the June 30 payment made from the alternate account, and that the total amount due on July 1, 2008 would be $4,430.09. 17 0 On or around July 9, 2008, without authority, WaMu withdrew or attempted to withdraw for a second time from Plaintiffs bank account, the payment cancelled on June 29, described above, said withdrawal causing again another tidal wave of overdrafts and fees. 18 The WaMu could have restrained itself from exercising its rights to pay Plaintiffs back taxes 0 or to demand immediate repayment and establishment of an escrow account, but it did not. 19 The WaMu has not acted in good faith, because it deliberately and knowingly did not 0 examine the Plaintiffs record in total, including Plaintiffs record of tax payments, and has

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deliberately and knowingly blinded itself to the fact that at no time during the course of Plaintiffs 24 year history as a mortgagor, has his real property ever been threatened with a tax sale or other similar financial distress, nor, in fact, did the WaMu bother to recognize that there had been no threats by the town of a tax sale, because the finance department of the town was aware of Plaintiffs history of always paying his property tax bill, not necessarily on time, but always in full, and it was also aware of the financial difficulties Plaintiff faced due to his prolonged recuperation from the complications of the kidney donation described earlier in this complaint. 10 Had the WaMu examined Plaintiffs record in total, the WaMu would then have come to the 1 reasonable conclusion, based on Plaintiffs history, that he poses no risk to the WaMus investment in Plaintiffs real property, and further the WaMu would have concluded that it had no need to assert its right to pay the back taxes, demand reimbursement for the payments, and demand escrow payments. 11 Instead the WaMu has deliberately and knowingly chosen to compound and exacerbate any 1 difficulty Plaintiff could possibly have with payments on the Note and Mortgage, by adding the taxes and escrow to Plaintiffs monthly payments, essentially doubling or tripling his monthly payments, with only 6 weeks notice. 12 The payment of the taxes occurred immediately subsequent to the mortgage being arbitrarily 1 and capriciously adjusted upwards merely because it was the WaMus prerogative to do so, rather than because there was any necessity related to the actual circumstances of the Loan for the WaMu to do so. 13 1 Defendants, as well as Plaintiff, are obligated to observe the covenant of good faith and fair dealing implied in every contract so as to insure that both will act with faithfulness to an agreed common purpose that of Defendants making the Loan to Plaintiff, and of Plaintiff repaying the Loan in reasonably sized installments over the course of 30 years and consistency with the justified expectations of each of the parties. (See Century Partners, LP v. Lesser Goldsmith Enterprises, LTD., 2008 VT 40 at paragraph 21.) 14 1 Defendants have interfered with or failed to cooperate with Plaintiffs performance, thus they have acted in bad faith. (See Century Partners, LP v. Lesser Goldsmith Enterprises, LTD., 2008 VT 40 at paragraph 26.)

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15 1

Defendants has demonstrated actual malice toward Plaintiff , shown by conduct

manifesting ill will of the Defendants representatives rude and harassing behavior when communicating with Plaintiff, evidencing oppression by unilaterally taking actions that a reasonable person would know were unable to be defended against by Plaintiff, and showing a reckless and wanton disregard of Plaintiffs rights in this matter, even though Plaintiff alerted Lender to the need to modify the Loan as early as May, 2007. (See Monahan v. GMAC Mortgage Corp., 2005 VT 110 at paragraph 4.) 16 1 117. Defendants have taken advantage of necessitous circumstances of Plaintiff. (See Defendants attempted to make two (2) separate unauthorized withdrawals from Monahan v. GMAC Mortgage Corp., 2005 VT 110 at paragraph 44.) Plaintiffs checking account, despite being notified that they were not permitted to make such withdrawals, and despite Defendants acknowledgement of notice that they were not permitted to make such withdrawals. 118. 119. The actions taken by Defendants have instead shown their unwillingness to The actions taken by Defendants have undermined the Plaintiffs rights to receive observe the above-described covenant of good faith and fair dealing. the benefit of the agreement to take the Loan, while on the other hand, their acts have enhanced the Defendants own benefits. 10 2 Defendants have engaged in conduct that has the character of outrage frequently associated with crime. (See Monahan v. GMAC Mortgage Corp., 2005 VT 110 at paragraph 63.) 11 2 Because of Defendants violation of the implied warranty of good faith and fair dealing, this Honorable Court is requested to find that the contract between Plaintiffs and any of the Defendants is void and has no force in law, and that Defendants should be enjoined from enforcing any rights under the contract.

COUNT XIII VIOLATION OF IMPLIED COVENANT NOT TO INTERFERE WITH OTHER PARTYS PERFORMANCE 12 2 Plaintiff repleads paragraphs 1 through 121, above, and further states: Page 14 of 30

123. 124. 125.

Defendants have interfered with or failed to cooperate with Plaintiff in his Defendants have a duty to avoid interference with Plaintiffs performance under Defendants also have a duty to mitigate damages due to alleged non-performance

performance of his obligations under the contract. the Loan contract. of another party, but Defendants have failed to take any action or to permit Plaintiff to take any action that could reasonably be expected to resolve the problems caused by Lenders increases in monthly Mortgage payments and other acts described above. 16 2 Lenders fractured corporate structure prevented and continues to prevent Plaintiff from taking any actions to mitigate the results of the actions of Defendants, and said fractured corporate structure was deliberately, knowingly and maliciously designed and put in to discourage Defendants customers, specifically Plaintiff, from being able to resolve or mitigate problems with loans made by Lender, particularly the Loan. 127. Therefore, this Honorable Court is requested to issue an order that the contract, specifically the Mortgage and Note, are unenforceable and have no force in law. COUNT XIV UNJUST ENRICHMENT 18 2 19 2 Plaintiff restates paragraphs 1 through 127, above, and further states: Defendants have deliberately, knowingly, and maliciously interfered with

Plaintiffs obligation to perform under the contract comprised of the Note and Mortgage, and in doing so have eliminated all risks to themselves, and have transferred all risks of the Note and Mortgage to Plaintiff. 10 3 Defendants have been unjustly enriched if they proceed with acceleration and foreclosure on the Property because Lender will have obtained fees and interest payments in the amount of at least $36,315.00 for less than 32 months of their own performance before they began to interfere with Plaintiffs performance, without providing Plaintiff the benefit of a loan with the repayment term of 30 years (360 months) as agreed upon in the Note and Mortgage. 131. Defendants stand to benefit unjustly from their actions and the damages they have caused to Plaintiff, all at the expense and to the detriment of Plaintiff.

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12 3 133.

Defendants failure to compensate Plaintiff and to benefit from their actions is Therefore, this Honorable Court is requested to find that although no contract

inequitable and unlawful. exists between Plaintiff and Defendant, that Defendants have been unjustly enriched by Plaintiffs payments to date. COUNT XV ONGOING FRAUD 14 Plaintiff repleads statements 1 through 133, above, and further states: 3 15 During at least two telephone conversations with Defendant WaMu, WaMu told Plaintiff that 3 WaMu had not initiated the property tax delinquency investigation, and that the Town of Norwich Finance Office had sent WaMu the tax delinquency information of its own volition, and without any prompting or inquiry from Lender. 16 The Town of Norwich did not send the tax delinquency information of its own volition, and 3 in fact, WaMu had initiated the inquiry into Plaintiffs tax status and requested Plaintiffs tax status information from the Town without any input from the Town of Norwich. 17 WaMu initiated the inquiry and requested the information at the same time as Plaintiffs 3 monthly payments increased about 20% due to an adjustable interest rate increase. 18 WaMu deliberately, knowingly, and maliciously made false statements on at least two 3 separate occasions in order to mislead Plaintiff regarding the initiation of the tax inquiry so as to deflect responsibility for the difficulty Plaintiff encountered making his monthly Mortgage payments onto a third party, and to make it difficult if not impossible for Plaintiff to resolve the problems caused by the precipitous increase in his monthly Mortgage payments. COUNT XVI DEFAMATION PURSUANT TO 8 V.S.A. 4724 19 Plaintiff repleads paragraphs 1 through 138, above, and further states: 3 10 Defendants have engaged in making, publishing, disseminating, or circulating, directly or 4 indirectly, or encouraging the making, publishing, disseminating, or circulating, oral or written statement which is false or maliciously critical of or derogatory to the financial

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condition of Plaintiff and is calculated to injure Plaintiff, to wit: Defendants have deliberately, knowingly, and maliciously caused, or permitted to be caused, damage to Plaintiffs reputation, and damage to Plaintiffs credit history regarding mortgage payments. 141. Damage to Plaintiffs credit history will result in economic loss due to loss of opportunity to borrow necessary funds for business and personal purposes. 12 Defendants failure to compensate Plaintiff for the aforesaid damage to his credit history is 4 inequitable and in violation of Vermont Law, and has caused Plaintiff severe economic loss, personally and professionally. COUNT XVII UNCONSCIONABLE CONTRACT AS THE PRODUCT OF UNFAIR DEALINGS 13 Plaintiff repleads paragraphs 1 through 142, above, and further states: 4 14 The manner by which Plaintiffs eligibility for the Loan, and eligibility for modification or 4 refinancing of the Loan by Lender is determined is discriminatory and arbitrary the Loan is predatory and made in bad faith and unfair. 145. Defendants manner of determining Plaintiffs eligibility for the Loan and for modification or refinancing of the Loan by Lender is based on arbitrary and capricious standards that bear little relation to Plaintiffs circumstances, and provide Lender with no knowledge of Plaintiffs actual eligibility. 146. Defendants deliberate, knowing, and malicious persistence in using said arbitrary and capricious standards provides Defendants with specious arguments against assisting Plaintiff in avoiding foreclosure on his Property, and demonstrates Defendants bad faith and unfair dealing with Plaintiff. COUNT XVIII ADHESION CONTRACT 17 Plaintiff restates paragraphs 1 through 146 above, and further states: 4 148. In the agreement that was drafted by Defendants with no negotiation, bargaining, or other input from Plaintiff, Defendants suffer no detriment or risk, by including contingencies over which only they had control, such as paying delinquent taxes, and which enable them to obtain the entire amount of the Loan with no risk to themselves, since the Loan to value ratio

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was so low as to guarantee that the Defendants would suffer no risk should the Plaintiff default on the Loan. 149. 150. 151. The Loan was offered to Plaintiff strictly on a take it or leave it basis. Plaintiff was not afforded realistic or reasonable opportunity to bargain for Loan. Under those circumstances, Plaintiff was unable to obtain the loan services he actually

required and continues to require. 12 The Loan as drafted by the Defendants is excessive and onerous, deliberately and maliciously 5 designed and guaranteed to be defaulted upon, and unconscionable. COUNT XIX MORTGAGEE CORPORATE CHARTER EXPIRED, NO MORTGAGEE OF RECORD, MORTGAGE MAY BE DISCHARGED PURSUANT TO 27 V.S.A. 469 13 Plaintiff repleads paragraphs 1 through 152, above, and further states: 5 154. The only mortgagee of record in Long Beach Mortgage Company. 155. 16 5 The chain of title regarding the mortgage in this matter is irretrievably broken. An investigation conducted on or around July 18, 2008, of the Corporations

Division of the Office of the Delaware Secretary of State, where Long Beach Mortgage Company was duly incorporated reveals that Long Beach Mortgage Company has been dissolved. 157. 158. The mortgagee and lender of record was Long Beach Mortgage Company, which Washington Mutual Bank did not record the assignment or transfer of the was extinguished in 2006 when it was merged with Washington Mutual Bank. mortgage to itself, thus there is no record of Washington Mutual Bank as the mortgagee for the loan. 159. Washington Mutual Bank was not the mortgagee because the mortgage and loan were divided up among numerous investors, none of whom can be identified, and none of whom have recorded their interest in the mortgage. 160. 161. Washington Mutual Bank failed on September 25, 2008, and ceased to exist. Washington Mutual Banks assets, worth $307 Billion dollars, were transferred

to J.P. Morgan Chase and Company for the purchase price of $1.88 Billion Dollars, or for an amount of money approximately equal to 6/10ths of one (1) cent on the dollar of the

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value of the assets, by the Federal Deposit Insurance Corporation, which purchase price was not paid to the investors who owned the mortgage, meaning that the mortgage was not purchased from its owners, and thus title to the mortgage was not transferred and the chain of title was broken. 162. 163. The investors who had interest in the mortgage and loan lost all benefits of their Pursuant to 27 V.S.A. 469: interest in the mortgage and loan when Washington Mutual Bank failed. When it appears from the record of a mortgage on real estate that such mortgage is undischarged, and the mortgagee named therein, or the assignee of such mortgage, is a private corporation whose charter has expired by it own limitation, or has been dissolved by operation of law, forfeiture, or for any other reason, a complaint may be brought to the presiding judge of the superior court of the county wherein such mortgage is recorded and, after such hearing as said presiding judge may direct, if he is satisfied that the conditions have been complied with, and have no force in law, and is further satisfied that there is no person within the state having authority to discharge such mortgage, he may direct an order discharging such mortgage. Such proceedings shall be without taxation of costs except that the moving party shall bear the costs of such notice as said presiding judge may order. 164. Therefore, the conditions of the mortgage have been complied with, insofar as is possible, since the mortgagees no longer exist and their interests were not properly transferred to legitimate successors, and thus have no force in law. 15 6 Moreover, Because the Loan is unconscionable and an adhesion contract, and because Lender has interfered with Plaintiffs performance on the Loan, and for any and all other reasons stated above, the Loan is unenforceable and void, and therefore, the conditions of the mortgage have been complied with, and have no force in law. 166. No person within the state of Vermont is able to prove that they legitimately or Therefore, this Honorable Court is requested to direct an order discharging properly have the authority to discharge the mortgage. 17 6 Plaintiffs mortgage. COUNT XX

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12 U.S.C. 1823 VIOLATES THE FIRST AMENDMENT 18 Plaintiff repleads paragraphs 1 through 167, above, and further states: 6 169. 12 U.S.C. 1823, and in particular 1823(e), unconstitutionally deprives Plaintiff of his first amendment rights to free association, because under the statute, the government may force Plaintiff to associate or enter into a contract with an entity which Plaintiff has never had a desire, intent, or inclination to associate or enter into a contract with, said entity in this case being JP Morgan Chase and Co (JPMC). 10 7 171. Freedom of Association is a fundamental right protected by the First Amendment. Therefore, Plaintiff requests that this Honorable Court find that 12 U.S.C. 1823 See NAACP v. Alabama, 357 U.S. 449 (1958). is unconstitutional, and that Plaintiffs case may not be dismissed on grounds based on said statute. COUNT XXI 12 U.S.C. 1823 VIOLATES THE FIFTH AMENDMENT 12 Plaintiff repleads paragraphs 1 through 171, above, and further states: 7 13 The statute unconstitutionally deprives Plaintiff of his property rights under Amendment 7 V, because it permits the government to give the right to foreclose on his property and deprive him of his property to JPMC, knowing that JPMC will, or is likely to, exercise foreclosure prerogatives, for the purpose of stabilizing the national economy among other things, which constitutes a public use of Plaintiffs property for which Plaintiffs property is taken without just compensation. 174. 175. The Fifth Amendment clearly states, in part: nor shall private property be taken Therefore, Plaintiff requests that this Honorable Court find that 12 U.S.C. 1823 for public use without just compensation. is unconstitutional, and that Plaintiffs case may not be dismissed on grounds based on said statute. COUNT XXII 12 U.S.C. 1823 VIOLATES SEPARATIONOF POWERS OF THE BRANCHES OF GOVERNMENT 176. Plaintiff repleads paragraphs 1 through 175, above, and further states: Page 20 of 30

17 The present suit was originally filed on or about July 29, 2008, and was clearly in the 7 hands of the judiciary well before the failure of WMB, its seizure by OTS, and sale to JPMC by FDIC on September 25, 2008. 18 The statute unconstitutionally causes a breach of the Constitutional barriers between the 7 governmental branches, because it permits the Executive Branch to intrude on the Constitutional prerogatives of the Judicial Branch: the statute permits the FDIC, a part of the Executive Branch, to extinguish a plaintiffs rights, specifically those of the Plaintiff, to be heard in a court of law, to sue, and to access judicial review of his case, after Plaintiff has filed suit against a bank, without due process (in fact, without notice) and without review of his claims by a court of proper jurisdiction. 19 Therefore, Plaintiff requests that this Honorable Court find that 12 U.S.C. 1823 is 7 unconstitutional, and that Plaintiffs case cannot be dismissed on grounds based on said statute. COUNT XXIII 12 U.S.C. 1823 VIOLATES DUE PROCESS GUARANTEES 10 Plaintiff repleads paragraphs1through 179, above, and further states: 8 11 The statute is not carefully tailored to achieve the goals of the government, and it is not 8 the least restrictive or least harmful means to achieve such goals, since the statute is based on circumstances and conditions that existed in 1950, when the statute was passed, and which no longer exist, or which have changed materially, substantially and dramatically in the 60 years since the statute was passed. 12 The US Supreme Court has held that The purpose behind section 1823(e), enacted in 8 1950, is to enable the FDIC, in deciding how to proceed with respect to a troubled bank, to make a quick and certain inventory of the banks assets. It can do this only if it can disregard secret oral agreements that may impair the value of those assets. Federal Deposit Ins. Corp. v. ONeil, 809 F.2d 350, 353 (7th Cir. 1987) This exercise of judgment requires [the] FDIC to measure its loss under the insured deposit payoff alternative against the loss under a purchase and assumption transaction. To calculate possible loss under the purchase and assumption transaction as opposed to a payoff of insured deposits, all of the failed banks assets must be evaluated o determine the price to

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be paid by the assuming bank for acceptable assets. The process of evaluation must be undertaken quicklyThe special protection given FDIC is Sec. 1823(e) facilitates this process by allowing FDIC to rely on the books and records of the bank in deciding whether to undertake a purchase and assumption transaction and in buying assets unacceptable to the assuming bank. Federal Deposit Insurance Corp. v. Merchants National Bank of Mobile, 725 F.2d 634m 638 (11th Cir. 1984). 13 Computers and other technology and practices have obsoleted the need for the provisions 8 of 1823(e), since it is now feasible for a bank and FDIC to evaluate assets and claims related to any individual account or asset, among other things, as evidenced by the fact that WaMu and the Delaware District Bankruptcy Court in the bankruptcy proceedings there, both institutions, which have thousands of claimants and claims to deal with, were able to locate Plaintiff, and specifically contact and communicate with him, and to discuss in detail Plaintiffs claims. 14 Therefore FDIC and assuming banks no longer require the convenience of avoiding due 8 diligence and of avoiding the requirements of justice and equity for borrowers and claimant, specifically including Plaintiff. a . The fact the FDIC and JPMC did not separate assets with related claims including Plaintiffs, and instead simply lumped them all together, and then cited 1823(e) as the means to defeat the claims, while unjustly enriching JPMC, should at least raise suspicions that there was improper, fraudulent, or even criminal cooperation, or collusion, between FDIC and JPMC. 15 In fact, the statute permits a government agency, specifically FDIC, to unilaterally, and 8 peremptorily contribute the private property of one person, specifically the Plaintiff here, to another private entity, in this case JPMC, thereby unjustly and inequitably enriching said entity while depriving Plaintiff of his Constitutional, property, and other rights. Thus, 12 U.S.C. 1823(e) facilitates the unconstitutional taking of private property, through the forced transference of money from Plaintiff to JPMC. 16 Therefore, this Honorable Court must find that 12 U.S.C. 1823(e) deprives Plaintiff of 8 his Constitutional and Civil rights, thus the statute is unconstitutional and invalid. COUNT XXIV

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UNJUST ENRICHMENT 17 Plaint repleads paragraphs 1 through 186, above, and further states: 8 18 Defendant JPMC will be unjustly enriched because it has not entered into a contract with 8 Plaintiff, yet is entitled under 1823 to simply demand Plaintiff pay JPMC. 19 Defendant JPMC has provided no services to Plaintiff. 8 190. 191. Defendant JPMC has had no contact with Plaintiff. Defendant JPMCs only relationship with Plaintiff is to collect payments from

Plaintiff while providing Plaintiff no service or product of any sort, as the result of governmental fiat by FDIC. 192. Therefore, Plaintiff requests that this Honorable Court find that Defendant JPMC has no contract with Plaintiff, that JPMC is not entitled to collect payments from JPMC, and that no quasi-contract exists between Plaintiff and Defendant JPMC. COUNT XXV CONTRACT UNENFORCEABLE 13 Plaintiff repleads paragraphs 1 through 192, above, and further states: 9 14 The contract between Plaintiff and JPMC is unenforceable because it is not mutually 9 bargained for agreement, but rather it is a relationship forced upon Plaintiff by a governmental agency dictate. 195. The relationship between Plaintiff and JPMC is coercive in nature 16 Plaintiff has entered, and is not able to enter into the relationship with JPMC freely and 9 voluntarily. 197. 198. Plaintiff would not voluntarily enter into a contractual relationship with Therefore, Plaintiff requests that this Honorable Court find that Plaintiff did not Defendant JPMC under any circumstances. enter into a contractual relationship with Defendant JPMC, and that Plaintiff has no obligations to perform for JPMC. Count XXVI VIOLATION OF PLAINTIFFS CIVIL RIGHTS 19 Plaintiff restates Paragraphs 1 through 198, above, and further states: 9 20 42 U.S.C. 1983 provides that Every person who, under color of any statute, ordinance, 0 Page 23 of 30

regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress, except that in any action brought against a judicial officer for an act or omission taken in such officer's judicial capacity, injunctive relief shall not be granted unless a declaratory decree was violated or declaratory relief was unavailable. For the purposes of this section, any Act of Congress applicable exclusively to the District of Columbia shall be considered to be a statute of the District of Columbia 21 FDIC, a governmental agency, itself and through its agents, including its Chairperson, 0 Defendant Sheila Bair, has deprived Plaintiff of his civil rights, including, but not limited to, his rights under the First Amendment to freely associate and enter into contracts, and his property rights under the Fifth Amendment, and his rights to be heard in a court of law or equity. 22 Defendants, specifically FDIC, have petitioned the Court to replace Washington Mutual 0 Bank in this case, and its petition has been granted, and therefore it is a Party in this case. 23 Defendants have used 12 U.S.C. 1823(e) for improper purposes; although the statute 0 when it was first enacted weighed the need for expediency in supporting the financial system against the rights of individual claimants, and choosing a sort of lesser of two evils, depriving claimants of their rights or stability of the financial system for the benefit of the society at large, because the technology of the time did not permit both sets of interests to be weighed equally, it is no longer true or necessary that the interests of the individual claimants conflict with those of the society at large, nor is it true that there still exists no means to evaluate individual claims without disturbing the smooth repair of the financial system for the benefit of society at large. Therefore, continued invocation of 12 U.S.C. 1823(e) is no longer necessary to support the financial system for the benefit of the society at large, and to continue such invocation of the statute would at the very least give the impression of the improper use of the statute, if not demonstrate such improper use. An improper use would be, for instance, the transfer of assets from a failed bank, and fabricating a need for speed in the transference so as to hide the improper

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relationship between FDIC and the assuming bank, FDIC would invoke 1823(e) in order to rush the transfer, and eliminate any liabilities attached to the assets, as a means to do a favor to the assuming bank, before anyone had the time to look carefully at the transaction and halt it. 24 Defendants subjected or caused Plaintiff to be subjected to the deprivation of any rights, 0 privileges, or immunities secured by the Constitution and laws either directly or through vicarious liability as the employer of employees engaged in the duties for which they were authorized to carry out on behalf of their employers, said duties subjecting Plaintiffs or causing Plaintiffs to be subjected to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, and are therefore liable to the Plaintiff for injuries and for redress thereof, and any damages authorized by law and such other remedies as deemed just and equitable. Count XXVII VIOLATION OF PLAINTIFFS CIVIL RIGHTS 25 Plaintiff restates Paragraphs1 through 204, above, and further states: 0 26 FDIC, a governmental agency, itself and through its agents, including its Chairperson, 0 Defendant Sheila Bair, has denied Plaintiff his right to redress under the Constitution, by invoking 12 U.S.C. 1823(e) in order to deliberately and willfully extinguish Plaintiffs right to be heard in a court of law, and to eliminate Plaintiffs claims filed with the Court before FDIC made the conveyance of Plaintiffs loan to JPMC, thus preventing the Court from hearing the claims and judging them on their merit. 27 Defendants have denied Plaintiff his right to a trial by jury guaranteed by the Seventh 0 Amendment by invoking 12 U.S.C. 1823(e) in order to deliberately and willfully extinguish Plaintiffs right to be heard in a court of law, and to eliminate Plaintiffs claims filed with the Court before FDIC made the conveyance of Plaintiffs loan to JPMC, thus preventing a jury from hearing and finding the facts of the case. 28 Defendants subjected or caused Plaintiff to be subjected to the deprivation of rights, 0 privileges, or immunities secured by the Constitution and laws either directly or through vicarious liability as the employer of employees engaged in the duties for which they were authorized to carry out on behalf of their employers, said duties subjecting Plaintiffs

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or causing Plaintiffs to be subjected to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, and are therefore liable to the Plaintiff for injuries and for redress thereof, and any damages authorized by law and such other remedies as deemed just and equitable. Count XXVIII VIOLATION OF PLAINTIFFS CIVIL RIGHTS 29 Plaintiff restates Paragraphs 1through 208 above, and further states: 0 20 FDIC, a government agency, itself or through its agents or both, including its Chair, 1 Defendant Sheila Bair, has denied Plaintiff his First Amendment rights, forcing him to associate with and enter into a contractual relationship with a private corporation, specifically, JPMC, with which he had heretofore, and has now, no desire, intention, or willingness to associate with or enter into a contractual relationship with. 21 Defendants subjected or caused Plaintiff to be subjected to the deprivation of any rights, 1 privileges, or immunities secured by the Constitution and laws either directly or through vicarious liability as the employer of employees engaged in the duties for which they were authorized to carry out on behalf of their employers, said duties subjecting Plaintiffs or causing Plaintiffs to be subjected to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, and are therefore liable to the Plaintiff for injuries and for redress thereof, and any damages authorized by law and such other remedies as deemed just and equitable. Count XXIX VIOLATION OF PLAINTIFFS CIVIL RIGHTS 22 Plaintiff restates Paragraphs 1 through 211, above, and further states: 1 23 FDIC, a government agency, itself or through its agents or both, including its Chair, 1 Defendant Sheila Bair, has denied Plaintiff his Fifth Amendment rights protecting him against taking his property for public use without just compensation. 24 By donating Plaintiffs loan to JPMC in order to stabilize the national economy, 1 Defendants have taken Plaintiffs property for a public purpose. 25 The property Defendants have taken for a public purpose is, in the first instance, money 1 that he would not have to pay above and beyond what is necessary for the loan to be Page 26 of 30

resolved through this suit, and in the second instance, the actual real property Plaintiff owns, since, by defeating Plaintiffs claims against the lenders involved in this case by administrative means, FDIC has given JPMC unfettered license to foreclose on Plaintiffs home without making any attempt whatsoever to resolve the problems that were unexpectedly caused by circumstances beyond Plaintiffs control, but which could have been, and could possibly still be, resolved through negotiations made in good faith, provided, of course, that Defendants had incentive to negotiate in good faith, something that they have thus far demonstrated no inclination for. 26 Defendants subjected or caused Plaintiff to be subjected to the deprivation of rights, 1 privileges, or immunities secured by the Constitution and laws either directly or through vicarious liability as the employer or controller or both of employees engaged in the duties for which they were authorized to carry out on behalf of their employers, said duties subjecting Plaintiff or causing Plaintiff to be subjected to the deprivation of rights, privileges, or immunities secured by the Constitution and laws, and are therefore liable to the Plaintiff for injuries and for redress thereof, and any damages authorized by law and such other remedies as deemed just and equitable. Count XXX FRAUD 27 Plaintiff restates Paragraphs 1 through 216, above, and further states: 1 28 FDIC, a government agency, itself or through its agents or both, including its Chair, 1 Defendant Sheila Bair, engaged in fraud because by invoking 12 U.S.C. 1823(e), it permitted JPMC to continue the actions that WaMu had first initiated by knowingly and deliberately engaging in fraud itself in order to originate loans and also by encouraging its representatives and brokers to do so as well, as is the case in this suit. Such fraud is the subject of numerous public reports, including reports issued by the United States Senate Permanent Subcommittee on Investigations in April of this year. 29 Defendants including JPMC and its Chair, Defendant Jamie Dimon engaged in fraud 1 because they knew or should have known that Plaintiffs loan was originated under fraudulent conditions, and then the two entities invoked 1823(e) to hide their knowledge of the fraud.

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20 Defendants including JPMC and its Chair, Defendant Jamie Dimon, engaged in fraud 2 because they have claimed that they were unable to examine and evaluate Plaintiffs loan among other assets conferred upon JPMC by FDIC, thus the need to invoke 12 U.S.C. 1823(e) so as to deny Plaintiff his civil rights, yet they claim that they can identify the mortgagees of Plaintiffs loan so that they can establish authority to discharge the mortgage properly under Vermont law. 221. Defendants engaged in fraud both in the inducement, and during the term of the loans, because they knew or should have known, and did not disclose such knowledge, that the loans would be securitized and that because of the securitization such loans would be excessively difficult, if not impossible, as has been the case for Plaintiff, to modify the loans if circumstances arose during the extensive life of these loans that necessitated modification in order for the borrower to continue to perform or to perform substantially under the terms of the contract, which in fact is that case for Plaintiff here. Count XXXI ABUSE OF PROCESS BY DEFENDANTS 22 Plaintiff restates Paragraphs 1 through 221, and further states: 2 23 Defendants FDIC, a government agency, itself or through its agents or both, including its 2 Chair, Defendant Sheila Bair, and JPMC, and its Chair, Jamie Dimon, have engaged in abuse of process because they have invoked the process authorized by 12 U.S.C. 1823(e) as a means of hiding their intent and acts that deprived Plaintiff of his civil rights as set forth herein, which constitutes an improper purpose, rather than the intended purpose of the statute, which is to assist in retaining the stability of the American economy, for which the statute is not necessary, and its invocation in this case was unnecessary since it is clear that contrary to the intention of the statute as it was written 60 years ago, Defendants claim to be able to access data related to a specific loan when it is convenient for themselves. 224. Such behavior demonstrates that Defendants invoked 12 U.S.C 1823(e) in bad faith, another indicator of abuse of process by Defendants. 25 Therefore, because Defendants have invoked 12 U.S.C. 1823(e) for an improper 2 purpose, and therefore they have engaged in abuse of process against the Plaintiff,

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Defendants are liable to the Plaintiff for injuries and damages arising out of said abuse of process, including any damages authorized by law and such other remedies as deemed just and equitable. WHEREFORE, Plaintiff respectfully request that this Honorable Court: A. B. C. Find that 12 U.S.C. 1823(e) is unconstitutional; Grant Plaintiffs relief as requested in each Count; and Grant any and such other relief as the Court deems is just and equitable. Respectfully submitted, ERNEST J. CICCOTELLI By: ____________________________________ Ernest J. Ciccotelli Plaintiff, Pro Se P.O. Box 562 Norwich, Vermont 05055 802 649-3400

Dated: October _____, 2010

CERTIFICATE OF SERVICE I, Ernest J. Ciccotelli, hereby certify that on this ____ day of October, 2010, I forwarded the above PLAINTIFFS SECOND AMENDED COMPALINT, by first class mail, postage prepaid, to: Robert McCall, Esq. for FDIC Peabody and Arnold, LL Federal Reserve Plaza 600 Atlantic Avenue Boston, MA 02210-2261 Christopher D. Roy, Esq. for JP Morgan Chase & Co., Downs Rachlin Martin, PLLC 199 Main Street, P.O. Box 190, Burlington, VT 05402-0190

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Donald LaPlume. 14 East Street, Claremont, NH 03743

___________________________________ _ Ernest J. Ciccotelli

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