Company promises to save homeowners from foreclosure, but actually tricks consumer into signing a quit-claim deed.
- Case Name: Moreno v. Herrera, et al.
- Court and Case Number: Los Angeles Superior Court / KC067089
- Date of Verdict or Judgment: Tuesday, May 16, 2017
- Date Action was Filed: Monday, August 25, 2014
- Type of Case: Business & Professional Codes, Fraud
- Judge or Arbitrator(s): Hon. Robert A. Dukes
Plaintiffs: Jose Luis MorenoRita Moreno
Defendants: Michael HerreraH&S Holdings Company, LLC
- Type of Result: Bench Verdict
- Gross Verdict or Award: $157,622
Award as to each Defendant:
$157,622 jointly and severally.
- Trial or Arbitration Time: 1 day.
- Jury Deliberation Time: Judge ruled immediately at the end of closing arguments.
Attorney for the Plaintiff:
Thaler Law by Jesse J. Thaler, Santa Ana.
CDLG, PC by Tony Cara, Costa Mesa.
Attorney for the Defendant:
Advent Law Group by Nedda Haeri, Beverly Hills.
HESS, HESS & HERRERA, P.C. by Alejandro H. Herrera, Santa Monica.
Facts and Background
Facts and Background:
Defendant Michael Herrera ran a company, defendant H&S Holdings Company, that advertised it could rescue homeowners from foreclosure. Plaintiffs signed a contract and paid money to defendant for services.
That defendant Michael Herrera ran a scheme whereby he would acquire real property (primarily family homes) from unsophisticated Spanish-speaking families by fraud. He utilized numerous entities to accomplish this, including co-defendant H&S HOLDINGS COMPANY, LLC. This case concerned one of Michael Herrera's many victims. While in foreclosure, plaintiffs Jose and Rita Moreno heard an advertisement on the radio indicating Michael Herrera and his various companies could rescue people in foreclosure through a refinance. Plaintiffs signed various documents and paid $34,000 for refinance services and thought they achieved a refinance, paying $2,534 for 33 months thereafter. Ultimately, the "refinance" was a scam: the paperwork plaintiffs signed was a quit claim deed transferring the ownership rights in their home to one of Michael Herrera's many alter ego companies and all payments went to Michael Herrera.
That the transaction plaintiffs entered into was per se illegal under the California Business & Professions Code. Plaintiffs were defrauded of $117,622 (i.e., $34,000 initial payments; and $2534 / month for 33 months). Plaintiffs were entitled to emotional distress damages.
Plaintiffs and defendants entered into a valid and legal lease-option contract.
Defendant Michael Herrera ran a company (H & S Holdings) that purchased homes from distressed borrowers. Plaintiffs owed approximately $408,000 at the time defendants purchased the property. Following the purchase of plaintiffs' home, plaintiffs signed a lease agreement with the option to buy back the subject property for $300,000.00. Plaintiffs subsequently stopped paying their rent pursuant to the lease agreement. Defendants proceeded to evict plaintiffs who ultimately stipulated to vacate the property. Following the eviction, plaintiffs brought suit.
Plaintiffs never alleged in their complaint that they expected a refinance or that one was advertised or promised by defendants. However, at trial, plaintiffs alleged that they were promised a refinance because that was advertised as one of defendants’ services. Plaintiffs made numerous conflicting statements in trial that were directly in conflict with each other and their own verified complaint. Plaintiffs alleged that they were promised a principal reduction on their mortgage loan and that they did not receive it. Plaintiffs did in fact receive a principle reduction as evidenced in the documents that they produced at trial. Defendants contend that no evidence was provided supporting a finding that the contract was per se illegal.