Complaint Review: Karen de la Carriere

This individual is of good character but she has been stalked, harassed, defamed, and nearly destroyed by the so-called Church of Scientology.  Shameful.

William Greene CPA was Karen de la Carriere's finanical adviser for many years. She trusted him and yet he loaned her money on a 2nd Trust Deed at a usurious interest rate of 14.5%. De la Carriere sued Greene and he countersued her.

The Court found that Greene had collected $88,000 in usurious interest from de la Carriere. Evidence produced at trial  showed that Greene transferred this $88,000 to his offshore account at Butterfield Bank in the Channel Islands.

Judge Johnson struck down the usurious interest, applied it against the principle, and added postjudgment interest. Per CA usury law, Greene was awarded only his principal less the $88,000 he already collected. Due to a contract shifting provision in the 2nd TD de la Carriere had signed, Greene was awarded legal fees. The total recovery Greene made was ~$271,000. Greene had originally asked for more than $800,000 at trial plus legal fees.

Karen de la Carriere took out her checkbook, wrote two checks, and paid the court award and legal fees promptly. Greene's counsel Kousha Berokim signed an EJ-100, a legal form in California which attests that a party is fully satisfied with the judgment. The signing of an EJ-100 means the case is over and no matters are at issue. Greene's counsel promised to reconvey Greene's second trust deed back to de la Carriere along with the original note within the 30 day statutory period.

This did not happen. Greene and his counsel Berokim filed a frivolous appeal; this although they had accepted the money and signed an EJ-100. Berokim claimed an appeal meant Greene did not have to turn over the documents as he had promised. Bad faith on Greene's part.

Berokim voluntarily withdrew Greene's appeal when the Appeals Court issued an Order to Show Cause as to why Greene's appeal should not be dismissed. The Appeals Court ruled de la Carriere the prevailing party on appeal awarded her $69,500 in legal fees for her costs to defend Greene's frivolous appeal.

Greene was forced to issue the reconveyance and surrender the original note. He now owes de la Carriere legal fees and so his recovery is down to $202,000. Deduct from this whatever he paid his attorney for to file a friviolous appeal and Greene's recovery is well under $200,000.

J. Swift, a.k.a., Jeffrey Augustine, Karen De La Carriere’s paramour, was one of the witnesses in the above mentioned case. He too was found not credible by the court.

Jeffery Augustine is notorious for posting scatological articles, also packed with lies, against people he hates or who attempt to reveal the truth about De La Carriere’s dishonesty.

This lawsuit is very simple and it boils down to a few simple facts: Karen De La Carriere filed a lawsuit against her former accountant by falsely accusing him of having forged her signature in a notarized loan agreement. During the trial the judge uncovered the truth and De La Carriere had to admit that she lied about her former accountant having forged her signature, it was a lie! The judge ordered De La Carriere to pay back the loan, with interest, to the accountant.

Not being happy about the outcome of the lawsuit, and fearing the consequences of the truth coming out in public, De La Carriere had to blame someone else for her resounding legal defeat. So, why not blaming the Church of Scientology?  And that’s precisely what she did. But she took it a step further and publicly announced that the judge had reversed himself and had stated that Karen De La Carriere was very credible. Such a reversal did not happen and, of course, no record exists. To the contrary, on February 5, 2016, Judge Michael Johnson ordered Karen De La Carriere to pay over $120,000 in attorney fees to opposing counsel.  

Below is the entire ruling from Judge Michael Johnson. Please note how many times the judge points out that Karen De La Carriere was not credible, untruthful, presented false testimony and was reckless.

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SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF LOS ANGELES

KAREN DE LA CARRIERE,                BC493393
Plaintiff,
v.
WILLIAM N. GREENE et al.,    TENTATIVE DECISION & STATEMENT
Defendants.        OF DECISION FOLLOWING TRIAL
AND RELATED CROSS-ACTION.


Trial in this case was conducted on April20 through 23, 2015 in Department 56 of this Court, Judge Michael Johnson presiding. Plaintiff / cross-defendant Karen de la Carriere was represented by Carl Kohlweck. Defendants / cross-complainants William Greene, R&R Trust and California Consulting Group were represented by Kousha Berokim. The parties waived jury and the case was heard in a bench trial, based upon the complaint by Carriere against Greene, R&R Trust and CCG, and the cross-complaint by CCG against Carriere. The Court has considered all testimony and exhibits, the briefs and argument of counsel, and now it issues the following decision.
FACTS
During the trial Carriere and Greene presented vastly different versions of the facts. The Court has carefully evaluated the content and consistency of their testimony, as well as their demeanor and manner while testifying. The Court has serious reservations about the credibility of both Carriere and Green. The Court has concluded that both parties (and especially Carriere) were untruthful about many aspects of the case - presenting testimony that was false, conflicting, exaggerated and evasive. In making its factual determinations, the Court has accepted credible documents and has accepted and applied the credible parts of the testimony by Greene and (to a lesser extent) Carriere. With that in mind, the Court makes the following factual determinations.
Background
Greene has been a licensed CPA since 1980. Since the late 1980s he has not practiced as a CPA and has been a self-employed management consultant. In that capacity Greene has operated consulting firms which provide management services on a project basis to clients in the United States and foreign countries. One of his firms is CCG.
Carriere worked for a religious organization from 1970 to 1990, in various positions from 1990 to 1995, and as an administrative assistant and trainer for Greene and his consulting firm CCG from 1995 to 2001. During the time they worked together Carriere and Greene were very close, and for much of the time they had a romantic relationship. After Carriere ended her work with Greene in 2001, she became a self-employed art dealer specializing in the works of Thomas Kinkade. She has continued with that work through the present.
Until they developed disagreements over financial matters in April2012, Carriere and Greene continued to have a very close personal relationship. Carriere described it as a relationship involving "friendship and personal counseling services" that she provided to Greene in return for his financial advice and tax preparation services, and that "it was always understood that we were trading professional services" or engaging in "barter". [Ex 32] Greene also has said that the two engaged in "fair exchanges" based upon "friendship" and that "our business affairs were conducted for our mutual benefit and fair exchange". [Ex 43 & 53]
1998 Note and DOT
While she was working with Greene in late 1997 Carriere became interested in purchasing a house. Carriere located a home at 1935 North Serrano Avenue in Los Angeles, but she did not have enough money to make the down payment that was necessary for financing. Greene agreed to provide money that would enable Carriere to obtain financing and purchase the Serrano property.
On June 9, 1998 Carriere executed a promissory note and deed of trust in favor of the R&R Trust (Greene's retirement trust) as beneficiary, and naming CCG (Greene's consulting firm) as trustee.
The 1998 Note and DOT was on a printed form with handwritten entries. The DOT portion described a loan of$175,000 (written numerically) secured by the Serrano property; the promissory note portion stated that the debt was for $175,000 (written numerically) and one hundred twenty five thousand dollars (written in words). Carriere signed the document with knowledge that her debt would be $175,000, and with full knowledge of and consent to all of its terms. The note was to be paid in 5 years plus 30 days from the date of execution, with interest from July 1, 1998 at the annual rate of 14.5%. The instrument was recorded on December 28, 1998. [Ex 20]
The 1998 Note and DOT operated as a second trust deed, subordinate to a note and deed of trust in favor of Washington Mutual Bank, securing a $326,250 loan for purchase of the Serrano property.
Carriere did not pay any of the principal or interest on the 1998 Note and DOT. On July 12, 2000 Greene created a notarized statement which read: "This letter is written to clarify the obligations of Karen C. de la Carriere to the R&R Trust which holds a second trust deed on her home at 1935 N. Serrano, Los Angeles CA. R&R Trust provided a loan so that she could purchase a home in lieu of a retirement plan from my company CCG. In the event of my death or at a time when I am no longer a trustee of the R&R Trust it is my wish and direction that any remaining payments of principal and interest on this second trust deed be cancelled in order to protect her from any foreclosure on her home from this deed in the event she were unable to pay." [Ex 4]
2003 Note and DOT
By 2003 Carriere had ended her work with Greene and was engaged in her art business. In early 2003 Carriere arranged for refinancing of the first note and deed of trust on her Serrano property. In order to obtain financing, Carriere had to remove the 1998 Note and DOT, and Greene agreed to replace it with a new instrument subordinate to her first note and trust deed.
On February 22, 2003 Carriere executed a new promissory note and deed of trust. It was written on the same printed form as the 1998 Note and DOT and it followed the same format. It named Carriere as trustor, CCG as trustee, and the R&R Trust as beneficiary. This time the instrument had consistent provisions about the amount of the debt: the DOT portion and the note portion described a loan of $175,000 (written both numerically and in words) that was secured by the Serrano property. The note was to be paid in 5 years plus 30 days from the date of execution, with interest from February 22, 2003 at the annual rate of 14.5%. Carriere did not sign on lines located immediately after the promissory note portion, but she did sign on lines located on the final page after both the note and DOT portions of the instrument. Carriere personally signed the document before a notary, with full knowledge of and consent to all of its terms. The 2003 Note and DOT was recorded on October 9, 2003. [Ex 23]
On February 28, 2003 Greene, on behalf of CCG as trustee, signed a full reconveyance of the 1998 Note and DOT. This was recorded on February 28, 2003. [Ex 22]
The lender or escrow company did not like the reconveyance form used for the February 28 instrument. Therefore, on April 17, 2003 Greene signed another full reconveyance of the 1998 Note and DOT on an approved form. This instrument was recorded on April30, 2003. [Ex 19]
Carriere did not pay any of the principal or interest on the 2003 Note and DOT. Under its terms, the 2003 Note and DOT came due on March 23, 2008-5 years and 30 days from its execution on February 22, 2003. Greene took no action against Carriere at that time.
Carriere's Art Business
Carriere's business involved buying and selling artwork, principally the works of Thomas Kinkade. She operated the business out of her home at the Serrano property.
Carriere involved Greene in some aspects of her art business. Greene loaned money to Carriere several times for working capital. And the two maintained a joint bank account, which was in the name of "Karen de la Carriere & William Greene, dba California Consulting Group" and "Karen de la Carriere & William Greene." [Ex 8, 18, 25 & 30] The bank records list Carriere's address at the Serrano property for the account. [Id]
Greene prepared and filed sales and use tax returns for Carriere's art business [Ex 17]. Carriere provided Greene with information about her sales, Greene prepared the returns and filed them in the name of "California Galleries I California Consulting Group"; Greene paid taxes to the State; and then Carriere repaid Greene for the tax payments, with a check payable to him. [Ex 28 & 29]
Greene also prepared Carriere's personal income tax returns. None of the returns are in evidence, except for a quarterly payment voucher from 2006: The voucher is in Carriere's name, and the taxes are paid with a check drawn on an account for "California Consulting Group" and signed by Greene. [Ex 16]
Greene handled various business tasks for Carriere's art business. In April 2012, for example, he wrote emails to two of Carriere's customers, asking for information that was necessary to reconcile a purchase. [Ex 33 & 34]
All of Greene's services were provided to Carriere under the "barter" and "fair exchange" relationship between them. As Carriere has described it: "the relationship of the parties had developed over the years into one of barter. I am a highly trained counselor and often provided friendship and counseling to Mr. Greene, who did not submit invoices or otherwise request payment for his services" and "we had developed a relationship involving friendship and personal counseling services that I provided to Mr. Greene. In addition, Mr. Greene also handled all my tax related payments and returns without making any demand for payment of his services; it was always understood that we were trading professional services". [Ex 32]
Greene sometimes identified himself as Carriere's "CPA". [Ex 7, 33 & 34] But this was an exaggeration, as there was no credible evidence that Greene ever acted in that capacity or provided accounting services to Carriere or her art business. Greene provided Carriere with advice, occasional loans and financial services, all within the context of the "barter'.' and "fair exchange" relationship between them.
The Dispute between Carriere and Greene
Thomas Kinkade died on April 6, 2012, and the value of his artwork skyrocketed. Carriere was apparently one of the few sources of Kinkade's works, so the volume of her business and income dramatically increased. Carriere's business was hectic in April2012, and she called upon Greene to help out in various respects.
During the period from April through June 2012 there were a number of email exchanges between Carriere and Greene. The email chains in evidence are not complete, but they tell a story that shows a clear disagreement and developing hostility between Carriere and Greene.
On April 7, 2012 Greene raised the subject of the 2003 Note and DOT on the Serrano property. He urged Carriere to pay the balance through the "windfall" from her Kinkade art sales, and he made an offer to substantially reduce the amount of her debt- essentially requiring only the payment of principal [Ex 42]
Carriere resisted Greene's invitation, and on April 27, 2012 Greene withdrew his offer to reduce the debt and demanded the full amount owed. [Ex 7]
On May 4, 2012 Carriere responded by denying that she signed the 2003 Note and DOT and challenging the 14.5% interest rate. [Ex 2 & 44]
On May 7, 2012 Greene responded that he did not want to foreclose on the Serrano property, but he was no longer willing to defer payment and wanted to be paid for his loan. [Ex 2 &44]
On May 19, 2012 Carriere raised the subject of the sales taxes that Greene had paid for her art business, and she requested copies of all returns. [Ex 11 & 45]
On May 24, 2012 Greene responded that he would not give Carriere copies of the sales tax returns, because he already provided copies and Carriere had never paid for the financial work that he performed for her. [Ex 11 & 45]
On June 3, 2012 Carriere questioned why Greene had filed the sales tax returns under the name of CCG and took offense at Greene's reference to unpaid services. Carriere stated that "I thought you were not billing me in exchange for the friendship times we had together." [Ex 46]
On June 6, 2012 Greene responded that Carriere's "fair exchanges" were promised but not delivered, and he urged her to refinance the Serrano property, pay the debt owed to him, and "wind up our affairs". [Ex 43]
Carriere retained an attorney, and on June 28, 2012 her attorney sent a demand letter to Greene. The letter asserted that Carriere's signature on the 2003 Note and DOT had been forged by Greene and was unenforceable, and it demanded that Greene reconvey the 2003 Note and DOT and provide copies of all sales tax returns filed for Carriere's art business. The letter also asserted that Carriere owed no fees to Greene because the parties never entered into a contract for services, and it claimed that Greene may have personally profited from his tax-paying arrangements with Carriere. [Ex 32, attachment 8]
On July 22, 2012 Greene sent an email directly to Carriere in response to her attorney's demand letter. Greene denied that her signature had been forged, and he recounted his version of how the 2003 Note and DOT came about. He asserted that "you have chosen your path" and made it clear that their relationship had come to an end. [Ex 53]
Carriere sent a complaint about Greene to the California Board of Accountancy on
August 1, 2012. The letter recounted Carriere's version of her relationship with Greene, and it accused him of forging her signature on the 2003 Note and DOT and engaging in self-dealing and other financial improprieties in handling her business and personal affairs. [Ex 32]
On August 20, 2012 Greene prepared a notice which declared Carriere's default on the 1998 Note and DOT. It stated that $726,926 was due as principal and accrued interest through August 20, 2012, and it threatened foreclosure if the amount was not paid. The notice was recorded on November 6, 2012. [Ex 41]
Carriere commenced this action on October 5, 2012, filing a complaint against Greene, R&R Trust, and CCG. Greene responded with a cross-complaint by CCG against Carriere.
LEGAL ISSUES
Carriere's Complaint
Carriere's complaint alleges eight causes of action. The 1st 2nd 3rd and 5th COAs seek equitable relief regarding the instruments and title to Carriere's Serrano property; and the 4th 6th  7th and 8th COAs seek damages for Greene's conduct.
1. Claims for Equitable Relief
The 1st COA seeks to quiet title in the Serrano property against the claims of the defendants, through entry of a judgment declaring that the defendants have no interest in the property. The 2"d COA seeks cancellation of the 2003 Note and DOT, through entry of a judgment declaring the instrument to be void due to its fraudulent nature and Carriere's forged signature. The 3rd COA seeks a declaratory judgment, declaring that the 2003 Note and DOT is fraudulent and forged, the interest rate is usurious, and Carriere has no obligation to pay principal or interest. The 5th COA seeks to void the 2003 Note and DOT on the ground that it is unconscionable; specifically because Greene violated his professional responsibilities and engaged in self-dealing, and because the instrument was forged and is based on a usurious rate o interest.
Carriere has not proven any of these claims and has not established any entitlement to equitable relief.
1998 Note and DOT: Carriere has argued that the 1998 Note and DOT is unenforceable because Greene forged or altered its terms without her consent. The instrument does contain inconsistent information: the DOT portion described a loan of $175,000 (written numerically), and the promissory note portion stated that the debt was for $175,000 (written numerically) and one hundred twenty five thousand dollars (written in words). [Ex 20] Greene testified that he increased the note to $175,000 to include an additional $50,000 that he paid for remodeling expenses, that he forgot to change the amount written in words, and that Carriere signed the note and agreed to its terms after he had increased the numerical terms to $175,000. This testimony by Greene is credible and has been accepted.

Carriere's evidence about alteration of the 1998 Note and DOT is not credible and has been rejected. Among other things, Carriere specifically admitted in her August 1, 2012 complaint to the California Board of Accountancy that "Mr. Greene did loan me $175,000 in 1998 to help purchase my private residence and remodel the kitchen. I signed a note at that time and agreed to pay the amount back within five years." [Ex 32] Carriere has tried to back away from this admission, but her testimony is not credible. The Court finds that Carriere signed the 1998 Note and DOT with knowledge that her debt would be $175,000, and with full knowledge of and consent to all of its terms.
2003 Note and DOT: Carriere has argued that the 2003 Note and DOT is unenforceable because Greene forged the document, although Carriere's theory of forgery has changed. Before the lawsuit [Ex 44 & 32] and in her complaint [¶11], Carriere asserted that Greene had forged he signature on the instrument. At trial Carriere asserted that Greene had tricked her into signing the instrument, by having her sign papers that were incomplete and reordered. Neither theory has been proven. Carriere asserted that Greene had forged he signature on the instrument. At trial Carriere asserted that Greene had tricked her into signing the instrument, by having her sign papers that were incomplete and reordered. Neither theory has been proven.At trial, even Carriere begrudgingly admitted that the signature was hers. Carriere's charge that Greene had forged her signature was reckless and desperate, and it is illustrative of why the Court has so little confidence in what Carriere has said. The Court also finds that Carriere signed the 2003 Note and DOT with full knowledge of and consent to all of its terms. Greene so testified, and this aspect of his testimony is credible. Carriere's evidence to the contrary is not credible or persuasive. Carriere's testimony that she did not sign a complete version of the instrument is not credible. The testimony by Carriere and her husband Jeffrey Augustine that Carriere first learned of the instrument in 2012 is not credible. And the testimony by Carriere's expert Bart Baggett about suspicious staple holes is not persuasive and has been rejected; the presence of multiple staple holes simply indicates that the papers were re-stapled at some point between 2003 and 2012, which is hardly surprising.
14.5% Interest: Carriere has asserted that she did not know of or consent to the 14.5% interest rate specified in the 1998 and 2003 instruments. This is not supported by credible or persuasive evidence. Carriere and Augustine have tried to portray Carriere as naive and inexperienced about real estate, but this is wholly unconvincing. Carriere admitted in cross-examination that during the period between 1990 and 1995 she took a course on deeds of trust, obtained a real estate license, and worked in real estate buying and selling second trust deeds.
The Court concludes that Carriere knowingly consented to the 14.5% rate specified in the agreements. While this rate of interest affects the calculation of damages which CCG can recover under the 2003 Note and DOT (as discussed below), it does not entitle Carriere to any affirmative relief.
     Carriere has not established any of the equitable claims in the 1st 2nd 3rd and 5th COAs.
2. Claims for Damages and Monetary Relief
     The 4th COA claims slander of title and seeks damages from Greene's recordation of the 1998 and 2003 instruments. The 6th COA claims breach of fiduciary duty and seeks damages from Greene's self-dealing and profit from handling Carriere's business and personal transactions. The 7th COA claims unfair business practices in violation of Bus. Prof. Code §17200 and seeks disgorgement of Greene's profits from handling Carriere's business and personal transactions. The 8th COA claims professional negligence and seeks damages from Greene's failure to exercise reasonable care and skill as a CPA.
Carriere has not proven any of these claims.
Damages & Gain: Carriere has not proven any damages in connection with these claims.
Robert Cohen briefly mentioned that Carriere could have refinanced the Serrano property and saved about $500 per month if the 2003 Note and DOT had not been recorded, but this goes only to the 4th COA for slander of title. Carriere cannot recover on that claim, because the Court has found that she has not proven the essential element that the 1998 and 2003 instruments were false or invalid.
Otherwise Carriere did not offer any evidence of damages or losses that she sustained in connection with her claims in the 6th (breach of fiduciary duty), 7th (unfair business practices) and the 8th (professional negligence) causes of action. By the same token, Carriere offered no evidence that Greene wrongfully gained anything at her (or anyone else's) expense. Carriere suggested that her income tax returns, sales tax returns, and other documents were improperly handled by Greene, but there was no evidence of this at all.
For these reasons alone, Carriere has not established essential elements of her claims for damages and monetary relief.
Professional I Fiduciary Relationship: Carriere's damage claims in the 6th 7th and 8th
COAs are based upon a professional or fiduciary relationship with Greene, and Carriere has not proven such a relationship. Greene did not perform CPA or accounting services for Carriere, and there is no credible evidence of any kind of professional or fiduciary relationship.
From 1995 through April 2012, Greene and Carriere both willingly, voluntarily and knowingly participated in a relationship that was personal - not professional. During part of the time they had a romantic relationship, and during the entire period their relationship was based upon friendship and the kind of personal "barter" and "exchange" that both of them have described. This does not support a fiduciary or confidential relationship. See In re Marriage of Dawley (1976) i7 Cal.3d 342, 355 ("Parties who are not yet married are not presumed to share a confidential relationship").
Carriere has argued that she was naive and gullible, and that Greene took advantage of her at every turn. But Carriere's evidence on this subject is not credible and has been rejected. The Court concludes that Carriere was a knowing, willing and beneficial participant in her transactions with Greene. Carriere received a $175,000 loan to help purchase and improve her Serrano property, which has appreciated in value; she received several loans for working capital in her art business; she had a joint bank account, with records listing Carriere's address at the Serrano property for the account; she received assistance and was advanced funds for paying sales and use tax for her art business; she received assistance in filing her state and federal income tax returns; she received financial advice and assistance in her personal and business affairs; and she received friendship and affection from Greene. All of this was in return for the "friendship and personal counseling services" that Carriere provided to Greene.
Carriere has correctly pointed out that many aspects of her transactions with Greene were sloppy, filled with shortcuts, and not properly memorialized. But the Court concludes that this was the product of the personal nature of their relationship. Until April2012 both Carriere and Greene were guided by mutual friendship and trust; and because of that they cut comers, produced sloppy documents, and failed to record their agreements and understandings. In this litigation, the failure to document has operated to the detriment of both Carriere and Greene – it is not one-sided as Carriere has argued.
Carriere has not established any of the claims for damages and monetary relief in the 4th 6th 7th and 8th COAs.
CCG's Cross-Complaint
CCG's cross-complaint alleges five causes of action. The 1st COA (breach of contract) and 2nd COA (common count for money lent) are both based on breach of the 2003 Note and DOT, and they seek the unpaid principal and interest on the note. The 3rd COA (judicial foreclosure), 4th COA (quiet title) and 5th COA (declaratory relief) all seek equitable relief regarding the 2003 Note and DOT. In its post-trial brief, CCG stated that it only seeks a determination of the claim for breach of the 2003 Note and a judgment for the balance owed, abandoning the equitable claims. [Brief at p. 19]
1. Breach of the Note
To establish a breach of contract claim, CCG must prove: 1) the existence of a contract with Carriere; 2) CCG's performance of the contract; 3) Carriere's breach of the contract; and 4) CCG's damages caused by the breach. E.g., Reichert v. General Ins. Co. (1968) 68 Cal.2d 822, 830; Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186.
CCG has proven all of these elements: 1) on February 22, 2003 Carriere entered into a promissory note and deed of trust in favor of CCG in the amount of $175,000, to be paid in 5 years and 30 days with interest at the annual rate of 14.5% from February 22, 2003; 2) CCG performed the agreement by paying Carriere $175,000 in 1998; 3) Carriere breached the agreement by failing to pay the principal and interest when the note became due on March 23, 2008; and 4) CCG suffered damages caused by the breach, because it has not received principal and interest due under the note.
Carriere has asserted defenses and arguments against CCG's breach of contract claim, but none of them has any merit.
1998 Note and DOT: Carriere has raised defenses related to the 1998 Note and DOT: that the amount of the debt is $125,000, the note is ambiguous, it should be construed unfavorably toward Greene and CCG, it is a contract of adhesion, and similar arguments. None of this apposite, because CCG is not suing on the 1998 Note and DOT. Paragraph 25 of CCG's cross-complaint expressly alleges breach of the 2003 Note and DOT. In fact CCG has argued that the 2003 Note and DOT was substituted for the 1998 Note and DOT, so that the 1998 instrument was extinguished by novation. [Brief at p. 8]
Forgery: Carriere has raised defenses based on forgery and other acts of fraud in connection with the 2003 Note and DOT. For the reasons discussed above in connection with Carriere's affirmative claims for relief, the Court has rejected these arguments.
No signature: Carriere has argued that the promissory note portion of the 2003 Note and DOT cannot be enforced against her, because she did not sign on the lines located immediately after the promissory note. This argument has no merit.
The 2003 Note and DOT is a single integrated document. It is six pages in length, with all pages numbered consecutively (1 of 6, 2 of 6, etc.). On the second page there is a heading which reads "Promissory Note- Straight- Secured by Deed of Trust." First there is promissory note language followed by four lines (that are not identified as signature lines), then there is deed of trust language followed by four more lines (identified as signature lines) and a notary jurat. Carriere signed the instrument once, on the lines located at the end of the instrument where her signature was notarized. [Ex 23]
These facts establish Carriere's agreement to all terms of the six page document, including the promissory note. It is well settled that a promissory note and deed of trust, being parts of one transaction, are to be read together. See First-Trust Joint Stock Land v. Meredith (1936) 5 Cal.2d 214, 218; Trinity County Bank v. Haas (1907) 151 Cal. 553, 555; Western Fruit Growers v. Security Title Ins. (193 7) 20 Cal.App.2d 150, 154. It is also well settled that the location of a party's signature within a document has no significance: "The name of the party to be charged with execution of a written document satisfies the statutory requirement of 'subscription' if it is intended as a signature, i.e., authentication of the document, regardless of where in the writing it appears." Poag v. Winston (1987) 195 Cal.App.3d 1161, 1179 (emphasis added); Rader Co. v. Stone (1986) 178 Cal.App.3d 10, 23 (same holding).
No Obligation to Pay: Carriere has argued that she never had any obligation to pay principal or interest, because of an agreement that she reached with Greene. Carriere testified that Greene assured her that she would not have to pay principal or interest on both the 1998 Note and DOT and the 2003 Note and DOT, but this testimony is not credible. Among other things Carriere's testimony conflicts with her August 1, 2012 complaint to the California Board of Accountancy, in which she asserted that "I did not agree to pay interest" but that "Mr. Greene did loan me $175,000 in 1998 to help purchase my private residence and remodel the kitchen. I signed a note at that time and agreed to pay the amount back within five years". [Ex 32]
Carriere's argument relies extensively on Greene's July 12, 2000 notarized statement, in which he stated that "R&R Trust provided a loan so that she could purchase a home in lieu of a retirement plan from my company CCG. In the event of my death or at a time when I am no longer a trustee of the R&R Trust it is my wish and direction that any remaining payments of principal and interest on this second trust deed be cancelled in order to protect her from any foreclosure on her home from this deed in the event she were unable to pay." [Ex 4]
This 2000 notarized statement does not constitute an assurance that Carriere would never have to pay any principal or interest. In the first place, it refers to a "loan" and not a gift. It contemplates collection on the loan by stating that any "remaining payments" should be cancelled. It also has conditions attached to Greene's forgiveness such as "in the event of my death or at a time when I am no longer a trustee" and "in the event she were unable to pay". Most important, the 2000 statement is in reference to the 1998 Note and DOT- which was superseded and replaced by the 2003 Note and DOT that contained a new and express agreement for Carriere to pay principal and interest.
The most that can be said of the notarized statement and all of Greene's statements to Carriere is that Greene unilaterally said that he would postpone collection of the interest and principal on Carriere's $175,000 debt. Greene said just that on the annual mortgage statements for 2008, 2009, 2010, 2011 and 2012 which read: "Term is extended indefinitely until loan balance is paid" and "Deferment benefit is extended until notified otherwise." [Ex 3] Greene's unilateral decision to defer collection did not eliminate Carriere's obligation to repay him. Indeed, the 2003 Note and DOT expressly provides that "No delay on the part of Trustee or Beneficiary in enforcing their respective rights or remedies hereunder shall constitute a waiver thereof." [Ex 23 at ¶18]
As Carriere stated in her August 1, 2012 complaint to the Board of Accountancy, Greene loaned her $175,000 in 1998 and she "agreed to pay back the amount back within five years." [Ex 32] Five years later Carriere had not paid anything to Greene, and seventeen years later she still has not paid anything. Carriere was obligated to pay and she has breached her agreement.
Statute of Limitations: Carriere has argued that CCR's claims under the 2003 Note are barred by the statute of limitations. Under its terms, the 2003 Note and DOT came due on March 23, 2008, which was 5 years and 30 days from its execution on February 22, 2003. Greene took no action against Carriere at that time. The four year statute of limitations for enforcement of a written contract under Code Civ. Proc. §337(1) expired on March 23, 2012, and this action was not filed until October 5, 2012.
However, the 2003 Note and DOT contains an express waiver of the statute of limitations, in which Carriere agreed that she "waives the right to assert at any time any statute o limitations as a bar to any action brought to enforce any obligation hereby secured." [Ex 23 at ¶19] A written waiver executed prior to expiration of the governing period of limitations is effective for a period of not more than four years from the date of expiration. See Code Civ. Proc. §360.5; Cal. First Bank v. Braden (1989) 216 Cal.App.3d 672,676. The waiver therefore extended the period of limitations to March 23, 2016, and CCG's cross-complaint for enforcement of the 2003 Note and DOT was timely.
Unclean hands: Carriere has raised defenses based on unclean hands in connection with Greene's breach of his professional and fiduciary duties toward Carriere. For the reasons discussed above in connection with Carriere's affirmative claims for relief, these claims have not been proven.
CCG has established its claim for breach of the 2003 Note and DOT, and Carriere has not established any of her defenses.
2. Damages
Under the terms of the 2003 Note and DOT, Carriere is obligated to pay CCG the principal sum of$175,000 plus interest on the unpaid principal from February 22,2003 at the rate of 14.5% per annum. [Ex 23] Carriere has argued that the 14.5% interest rate is usurious, and this has merit. Article XV, Section 1 of the California Constitution makes any rate greater than 10% usurious (subject to alternate calculations), and during trial the parties stipulated that the 14.5% rate in the 2003 Note and DOT exceeds the legal rate of interest under the usury law.
The Court therefore finds that the 14.5% interest rate specified in the2003 Note and DO was usurious and CCG's damages for breach of the note must be adjusted. It is well settled that an attempt to exact a usurious rate of interest on a note renders the interest provision void and results in a note payable at maturity without the specified interest. See Epstein v. Frank (1981) 125 Cal.App.3d 111, 122-123. Any usurious interest collected on the note shall be offset against the principal. See Shirley v. Britt (1957) 152 Cal.App.2d 666, 669. The principal as adjusted remains due at maturity with prejudgment interest from the date of maturity at the legal rate. See Mark McDowell Corp v. LSM (1989) 214 Cal.App.3d 1427, 1432; Epstein, supra 125 Cal.App.3d at 123-24; Shirley, supra 152 Cal.App.2d at 670. The legal rate of prejudgment interest is 10% per annum. See Civ. Code §3289(b).
Greene prepared annual mortgage statements in 2008, 2009, 2010, 2011 and 2012. The statements all credit Carriere with payments for interest calculated at the rate of 14.5% for 1998 ($10,875.00), 1999 ($26,951.88), 2000 ($24,500.00), and 2001 ($25,375.00 and $875.00). There are no interest payments for 2002 through 2012, so the total amount of interest payments credited to Carriere is $88,576.88. [Ex 3]
CCG is therefore entitled to damages calculated as the principal sum of$175,000, reduced by $88,576.88 for usurious interest paid by Carriere, with the reduced principal of $86,423.12 earning prejudgment interest at the rate of 10% per annum from the maturity date of March 23, 2008 through the date of judgment; this is equal to prejudgment interest in the amount of $8,642.31 per year and $23.68 per day. This calculation produces total damages of $149,997.69 through July 31, 2015, as follows:
Principal                    $175,000.00
Usurious interest                  ($88,576.88)
Reduced principal                $86,423.12
Prejudgment interest 3/23/2008 to 7/31/2015
(7 years, 130 days)             $63,574.57
Total damages                    $149,997.69
Greene and CCG have made several arguments as to .why damages should not be calculated in this manner, but none of the arguments has merit.
Good Faith: Greene testified that he selected the 14.5% rate in good faith, based on what he believed was a legal rate that he paid for business loans. This testimony is not credible, and has been rejected. Greene certainly had the training and experience to determine the legal rate of interest for his loan to Carriere, and he has not provided any evidence that he obtained business loans at that rate from any commercial lenders.
In all events, good faith is not a defense. The only intent necessary on the part of the lender is to take the amount of interest which he receives; if that amount is more than the law allows, usury has been established. See Ghirardo v. Antonioli (1994) 8 Cal.4th 791, 798; Thomas v. Hunt Mfg. (1954) 42 Cal.2d 734, 740.
No Intent to Pay: Citing cases such as Buck v. Dahlgren (1972) 23 Cal.App.3d 779 and Haines V. Commercial Mortgage (1927) 200 Cal. 609, Greene and CCG have argued that the Court should estop Carriere from asserting the defense of usury because she never intended to pay principal or interest under both the 1998 Note and DOT and the 2003 Note and DOT.
Both cases are inapposite and do not support principles applicable to this case. In any event, there is no credible evidence that Carriere never intended to pay principal or interest. As noted earlier, Carriere has stated that she agreed to pay back principal within five years but did not believe that interest was due. [Ex 32] Carriere has made arguments during this litigation as to why Greene and CCG should not collect principal and interest, but her legal arguments are not a basis for estopping her from asserting the defense of usury.
Interest Wasn't Paid: Despite the interest payments of $88,576.88 credited to Carriere in to Greene's annual mortgage statements, Greene and CCG have argued that Carriere didn't really pay any interest on her obligation. They have argued that the credits were simply accounting entries which shouldn't be counted. This argument is nonsense.
Greene prepared the annual mortgage statements. Each statement has a column for "Interest Due" and another column for "Interest Paid." The latter column credits Carriere with specific amounts of interest paid for the years 1998 through 2001. [Ex 3] There is also evidence of a $24,500 wire transfer on November 16,2000 which corresponds with one of the interest payments. [Ex 8] Greene is bound by his own records.
Moreover, Greene testified that the interest payments credited to Carriere were derived from her earnings while she was working for him in 1998 through 2001, and the payments were "part of her compensation." While Greene tried to back away from this admission, his effort was not credible and has been rejected. The Court finds that Carriere is entitled to $88,576.88 for usurious interest paid on her debt.
Usury Wasn't Pled: Greene and CCG have argued that Carriere is not entitled to a reduction of her obligation, because she did not plead a cause of action for recovery or setoff of usurious interest payments. This argument is wrong. Carriere's Complaint raises usury in the 3rd COA for declaratory relief, and Carriere's Answer to the Amended Cross-Complaint asserts usury in the 4th defense of illegality and seeks a reduction of damages in the 11th defense of set off and the 13th defense of unjust enrichment.
Statute of Limitations: Greene and CCG have argued that Carriere is not entitled to a reduction of her obligation, because her claim for interest paid for the years 1998 through 2001 is barred by the two year statute of limitations. This argument is wrong, because it is well established that the debtor under a series of related notes can claim an offset for payments of usurious interest, and the statute of limitations does accrue until the entire obligation is paid.
In Westman-v. Dye (1931) 214 Cal. 28, the Supreme Court held that "An original taint of usury attaches to the whole family of consecutive obligations and securities growing out of the original vicious transaction; and none of the descendant obligations, however remote, can be free of the taint if the descent can be fairly traced. Every renewal of a note given for a usurious loan of money is subject to the defense of usury between the original parties and purchaser with notice." 214 Cal at 38. And the Supreme Court expressly held that the statute of limitations remains open because "Under this rule, incorporating usurious interest in a renewal note or in a series of renewals, does not start the statute running so long as any part of the original usurious loan remains unpaid." 214 Cal. at 39. This rule has been consistently followed. See District Bond Co. v. Haley (1935) 2 Cal.2d 308, 310-11; Aspeitia v. California Trust (1958) 158 Cal.App.2d 150, 155; Shirley v. Britt (1957) 152 Cal.App.2d 666, 670.
The Court finds that Carriere is entitled to a reduction of her obligation because of usury, and CCG's total damages are $149,997.69 through July 31,2015, with continuing prejudgment interest at $23.68 per day through entry of judgment.
Attorney Fees
The 2003 Note and DOT contains an attorney fee clause, and both sides seek an award of fees under Civ. Code §1717. Section §1717(a) provides for recovery of fees "by the party prevailing on the contract," and §1717 (b)( 1) states that "the party prevailing on the contract shall be the party who recovered a greater relief in the action on the contract". Greene, R&R Trust and CCG have met that requirement, because they have defeated Carriere's claims under the complaint, and CCG has recovered affirmative relief on the cross-complaint. See Epstein v. Frank, supra 125 Cal.App.3d at 124 ("As a general rule, where claims and counterclaims arise in connection with a contract containing an attorney's fees provision, the party who obtains a favorable judgment is deemed to be the prevailing party, even though he did not successfully obtain all the relief which he sought in the action."); accord, Sukut-Coulson v. Allied Canon (1978) 85 Cal.App.3d 648, 656; Western Decor v. Bank of America (1979) 91 Cal.App.3d 293, 310-11.
Section 1717(b)(1) also states that the court "may also determine that there is no party prevailing on the contract for purposes of this section." Under that provision, "If neither party achieves a complete victory on all the contract claims, it is within the discretion of the trial court to determine which party prevailed on the contract or whether, on balance, neither party prevailed sufficiently to justify an award of attorney fees. '[I]n deciding whether there is a party prevailing on the contract, the trial court is to compare the relief awarded on the contract claim o claims with the parties' demands on those same claims and their litigation objectives as disclosed by the pleadings, trial briefs, opening statements, and similar sources."' Scott Co. v. Blount Inc. (1999) 20 Cal.4th 1103, 1109 (quoting Hsu v. Abbara (1995) 9 Cal.4th 863, 876).
The Court has considered this option, but remains convinced that Greene, R&R Trust and
CCG are the prevailing parties. Carriere commenced this action with a complaint that asserted incendiary claims such as forgery, self-dealing and breach of professional responsibilities. The Defendants have defeated those claims, and CCR has recovered affirmative relief on its cross-complaint. Under those circumstances, the Court rules that Greene, R & R Trust and CCG are the prevailing parties within the meaning of §1717(b)(1).
DISPOSITION
On the Complaint, Defendants William N. Greene, R&R Trust and California Consulting Group shall recover judgment in their favor against Plaintiff Karen de la Carriere. All causes of action are dismissed with prejudice, and Defendants shall recover their attorney fees and costs.
On the Cross-Complaint, Cross-Complainant California Consulting Group shall recover judgment in its favor against Karen de la Carriere in the total amount of $149,997.69 through July 31, 2015, with continuing prejudgment interest at $23.68 per day through entry of judgment.
Cross-complainant shall recover its attorney fees and costs.
Counsel for Defendants / Cross-Complainants shall prepare and submit the judgment. Pursuant to CRC 3 .1590(c)(1) this tentative decision is the Court's statement of decision, subject to any party's objections under CRC 3.1590(g).

DATED:     July 20, 2015
                                                                                     _________________________
    Michael Johnson
Superior Court Judge

The legal case in which Karen is involved is extremely narrow and concerns a 1998 second trust deed on her home of $125,000. There is no final decision in this case because William N. Greene, the defendant and cross-defendant, has filed an appeal to try to gain more money after the court found that he had engaged in a usurious loan transaction and had illegally taken over $88,000 in illegal usurious interest from her employment compensation while Karen was employed by him as an administrative assistant.  In response, Karen has filed a cross appeal.

Basically, Karen's CPA, William N. Greene -- and then employer -- loaned her $125,000 in 1998 to help her purchase a home. The 1998 note clearly has "$125,000" written on it. As Karen alleged, Greene admitted at trial that he changed the loan amount to $175,000 on the 1998 note and then set the same amount in a new 2003 instrument without Karen's knowledge. This 2003 note was due in 2008. Greene made no attempt to collect until April 2012.

Greene made the interest rate on the 1998 and 2003 notes 14.5% interest -- an illegal usurious interest rate in California. Greene did not explain this to Karen and, in any case, evidence at the trial included a note from Greene to Karen stating that if he died she did not have to repay the note. A second letter from Greene produced at trial stated that he was loaning Karen money in lieu of a retirement plan as she worked for Greene's company California Consulting Group of Walnut, CA at the time.

In April 2012, William Greene began his efforts to collect on the 2003 note. Greene was seeking for $785,000. He still seeks this amount on appeal notwithstanding overwhelming legal precedent, and the opinion of the trial judge, that the maximum amount to which his is entitled is approximately $86,000 together with statutory interest of 10% from March 2008, for a total slightly in excess of $150,000, as verified by the court’s opinion.

Trial evidence conclusively proved that Greene "intertest payments" to himself on the 1998 note of $88,000 withheld from Karen’s salary and applied as a setoff. Greene moved the money from his personal account and into a joint business account he held with Karen.  He then moved the $88,000 into his offshore account in the Channel Islands. Greene showed this $88,000 as income to Karen on her tax returns which he prepared as her CPA and then called it as an interest "offset" when he transferred it to himself.

As further explained below, Karen's son Alexander died suddenly in July 2012 at age 27. In the middle of her grief, Greene was trying to foreclose on her home and litigation had begun. In her grief, Karen was advised to file a complaint a complaint against Greene with the State CPA Board. Said complaint was prepared by a third party and filed, but incorrectly referred to the 2003 note amount of $175,000. The CPA used this at trial to argue this was the actual amount -- although the 1998 note clearly shows $125,000. The judge chose not to take into account the death of Karen's son and her grief and held the amount to be $175,000 and the fact that she had not personally prepared the complaint and the 1998 and accepted Greene’s testimony that the note was for $175,000 because Karen had agreed to the increase to cover certain home repairs.

The Church of Scientology attempted to meddle with this litigation from its inception, offering to give to Greene and his attorney confidential information from Karen’s PC folder/

An agent of the Church of Scientology has posted this report on Karen. True to form, Scientology and its smarmy OSA agents twist, distort, and never tell the whole or complete truth. If Scientology were forced to tell the truth it would have to admit, among other things, that Founder L. Ron Hubbard died while in hiding from the law and medicated with the psychiatric drug Vistaril following a series of strokes. The Church would have to admit that the elderly 74 year old post-stroke and medically drugged Hubbard had diminished mental capacity when he "changed his will" one day before he died. This will took away virutally everything from his wife and children in favor of the Church.

Karen, a former Scientology Class XII C/S has acted to expose the Church in her YouTube channel "Surviving Scientology" which has 5,000,000+ followers and 13,000+ subscribers. Thus, the Church wants to spin a judge's comments into a statement about Karen. To add to Scientology's hatred and malice, the Church's toxic policy of Disconnection, of breaking up families, resulted in the death of her only child Alexander Jentzsch in 2012. Alexander was only 27 years old when he was found dead under mysterious circumstances. The Los Angeles Police Department Homicide bureau initially investigated this matter, and, the Church brought in a criminal defense attorney to handle matters.

This report was written by John Wood, who is associated with Scientology's "secret police", the Office of Special Affairs. He is not a customer of the individual named, he just hates her because of her popular and informative Youtube channel, Surviving Scientology. This report is part of a continuing harassment campaign and really has no place on the Ripoff Report. He's following the words of the founder of Scientology, L. Ron Hubbard, who wrote

"The DEFENSE of anything is UNTENABLE. The only way to defend anything is to ATTACK, and if you ever forget that then you will lose every battle you are ever in engaged in."