Filed 8/10/21 CERTIFIED FOR PUBLICATION COURT OF APPEAL, FOURTH APPELLATE DISTRICT DIVISION ONE STATE OF CALIFORNIA MERIDIAN FINANCIAL SERVICES, D078586, D078589 INC., et al., Plaintiffs and Appellants, (Superior Court Case No. 2013- v. 1-CV-254980) LANANH PHAN et al., Defendants and Respondents. APPEAL from judgments of the Superior Court of Santa Clara County, Thomas E. Kuhnle, Judge. Affirmed. Patton Sullivan Brodehl and Kevin R. Brodehl, for Plaintiffs and Appellants. Fidelity National Law Group, David B. Owen; Greines, Martin, Stein & Richland and Robin Meadow for Defendant and Respondent Chicago Title Company. No appearances for Defendants and Respondents Jodie Nguyen, Diana Tran, and Jeannie Vuong. INTRODUCTION Mark Yazdani, a Stanford-educated economist and licensed real estate broker, is the president and sole owner of Meridian Financial Services, Inc. (Meridian).1 Over the span of a year, Yazdani made a series of investments totaling $5,079,000 in an international gold-trading scheme run by a loan broker, Lananh Phan, who promised him “guaranteed” returns of 5 or 6 percent per month. He conducted no due diligence into the legality or legitimacy of the investment. It turned out to be a Ponzi scheme and when it collapsed, Yazdani lost most of his money. In exchange for some of his investments, Yazdani demanded “collateral” from Phan. For an initial investment of $500,000, Phan offered a promissory note secured by a deed of trust in Meridian’s favor on her personal residence. For a subsequent investment of $900,000, Phan offered two more promissory notes of $650,000 and $250,000 to be secured by deeds of trust in Meridian’s favor on the personal residences of unwitting third parties ensnared in Phan’s fraudulent scheme (the Meridian deeds of trust). All of the collateral on Yazdani’s investments were set up as “loans” and facilitated through escrow at Chicago Title Company (Chicago Title) by Diane Do, an escrow officer Yazdani met in an unrelated real estate transaction and who invited Yazdani to invest with Phan. Yazdani signed “Lenders Escrow Instructions” for these transactions, identifying Meridian as “the lender” and the various third parties whose homes were encumbered as “the borrowers” of the loan funds, although he admittedly had no expectation these individuals would receive any money. Without communicating with any of the purported borrowers, he caused loan documents to be prepared, 1 Because Yazdani was the only person acting on behalf of Meridian, we generally do not distinguish between the two, unless necessary. 2 gave Phan’s personal address as the borrowers’ mailing addresses, and gave his own personal email address as the borrowers’ email addresses for the loan documents. Although the “lender,” Yazdani received all of the borrowers’ loan documents. The purported borrowers never knew of these transactions; their signatures on the Meridian deeds of trusts were forged or obtained by Phan under false pretenses. Yazdani had been made aware of “irregularities” with the execution and notarization of the Meridian deeds of trust. After the Ponzi scheme collapsed and unable to recover his investment, he moved to foreclose on the purported borrowers. From these events, two …
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