CALLAHAN & BLAINE CALLAHAN & BLAINE, APLC Daniel J. Callahan (Bar No. 91490) Brian McCormack (Bar No. 167547) Jason Casero (Bar No. 263933) 3 Hutton Centre Drive, Ninth Floor Santa Ana, California 92707 ‘Telephone: (714) 241-4444 Facsimile: (714) 241-4445 FINLAYSON TOFFER ROOSEVELT & LILLY LLP Robert 8. Lawrence (Bar No. 207099) Jared M. Toffer (Bar No. 223139) 15615 Alton Parkway, Suite 250 Irvine, CA 92618 Telephone: (949) 759-3810 Facsimile: (949) 759-3812 Attomeys for Non-Party AURORA PACIFIC WESTERN ADVISORS SUPERIOR COURT OF CALIFORNIA COUNTY OF ORANGE MICHELLE S. MORGAN, in her capacity as ‘Trustee and on behalf of JC WARTELL NONGRANTOR TRUST UDT 2005, the WARTELL CHILDREN’S NONGRANTOR TRUST UDT 2005 and the RT HARPER NONGRANTOR TRUST UDT 2005, Plaintiffs, v. MARK E. HYATT, an individual, et al., Defendants. AND CONSOLIDATED ACTION. LEAD CASE NO. _ 30-2011-00473005 (Consolidated with Case No. 30-2013-30- 2013-00678076) NOTICE OF MOTION AND MOTION OF NON-PARTY AURORA PACIFIC WESTERN ADVISORS, INC. FOR AN AWARD OF FEES ON APPEAL [Request for Judicial Notice; Declaration of Jason Casero filed concurrently herewith] Hon. Thierry Colaw September 29, 2017 10:30am, CX-105 Judge: Complaint Filed: May 6, 2011 Phase II Trial: July 25,2017 ‘NOTICE OF MOTION AND MOTION OF NON-PARTY AWPA FOR AN AWARD OF FEES ON APPEALCALLAHAN & BLAINE RoW 10 u 12 13 4 15 16 7 18 19 20 2 22 23 24 25 26 27 28 TO ALL PARTIES AND THEIR RESPECTIVE ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that on September 29, 2017 at 10:30 a.m., or as soon thereafter as may be heard in Department CX105 of the California Superior Court for the County of Orange, ‘Complex Civil located at 751 West Santa Ana Blvd., Santa Ana, California 92701 Non-Party AURORA WESTERN PACIFIC ADVISORS, INC. (“AWPA”) will and hereby does move for an order awarding attomey’s fees and costs in the total amount of $101,741.50 against all Cross Complainants jointly and severally. This Motion is made pursuant to Cal. Code Civ. Proc. § 1033.5(a)(10)(A) & Cal. Civ. Code § 1717 on the grounds that: 1. AWPA is the prevailing party on the claims of Cross Complainants Mark E. Hyatt etal. (“Cross-Complainants”) since AWPA achieved a complete victory on all causes of action asserted by Cross-Complainants in the action styled Morgan v. Hyatt, 0.C.S.C. Case No. 30-2011- 00473005, and judgment was entered in AWPA’s favor on September 9, 2015; 2. The two contracts at issue each contain an attomey’s fees clause providing that in the event of any litigation the party determined to be the prevailing party is entitled to an award of costs, including attonrey’s fees; 3. Although AWPA is not a signatory to the contracts, AWPA was alleged to be the alter ego of Cross-Defendant Raymond A. Harper (“Harpe:”) and as such would have been liable for attomey’s fees and costs if Cross-Complainants had prevailed against AWPA; 4, AWPA successfully appealed the deferral ofits attomey’s fees award; and 5. The $101,741.50 in attorney’ fees incurred on the successful appeal is a reasonable amount of attomey’s fees; and 6. The hourly rates and the number of hours expended by the attorneys for AWPA are reasonable and necessary given the nature of the appeal, the experience and caliber of AWPA’s attomeys, the prevailing rates for similar legal work in the community, and the success of AWPA. ‘This application is based upon this Notice, the Memorandum of Points and Authorities, the Supporting Declaration of Jason Casero, the Request for Judicial Notice, all documents on record -2- ‘NOTICE OF MOTION AND MOTION OF NON-PARTY APWA FOR AN AWARD OF FEES ON APPEAL,z 5 a 3 z = = SI z 6 A 8 eae aan 10 i 12 13 14 15 16 17 18 19 20 21 2 23 8 26 27 28 herein, and upon such other and further matters as may be offered in reply to any opposition to this, motion. Dated: August 28, 2017 Attorneys for Non-Party AURORA PACIFIC WESTERN ADVISORS: oo ‘NOTICE OF MOTION AND MOTION OF NON-PARTY APWA FOR AN AWARD OF FEES ON APPEAL.CALLAHAN & BLAINE MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION & BACKGROUND On December 10, 2014, this Court issued an order granting Aurora Pacific Western Advisors, Inc.'s (“AWPA”) demurrer to Cross-Complainants’ breach of contract and declaratory relief causes of action. Cross-Complainants KDF Communities, LLC et al, (collectively “KDF") had sought to hold Aurora liable for the alleged contractual obligations of its shareholder Raymond A. Harper under an alter ego theory, even though the doctrine of reverse veil piercing is not recognized in California. AWPA later moved for an award of its attorneys’ fees, as prevailing party, on the basis, that all of the contracts at issue contain attomey’s fees clauses. Although AWPA was not a party to the agreements, it argued that as the alleged alter ego of Mr. Harper it was nevertheless entitled to such fees under the doctrine articulated in Reynolds Metals Co. v. Alperson, 25 Cal. 3d 124, 129 (1979). Specifically, since Aurora would have been liable for attorney's fees to KDF and the other Cross-Complainants had they prevailed, the contractual obligation was reciprocal. This Court presumably agreed that AWPA was entitled to its fees, but deferred the award of fees pending the outcome of the underlying trial. It therefore denied the motion, without prejudice, as premature. AWPA appealed that decision on the basis that there were no grounds to defer the award. On April 20, 2017 the Court of Appeals (Fourth Appellate District agreed with AWPA, and reversed this Court’s decision to defer the attomeys” fees award. AWPA now moves for the fees it incurred on appeal pursuant to Cal. Code Civ. Proc. § 1033.5(a)(10)(A) & Cal. Civ. Code § 1717 and the invitation extended by this Court to seek such fees in the August 10, 2017 minute order. In particular, the Court indicated in that order that KDF and the other Cross-Complainants need not address “work by AWPA on its successfil appeal — pending a further motion by AWPA in that regard.” 0. ARGUMENT Attomey’s fees on appeal are recoverable if authorized by contract, statute or law. Cal. Code Civ. Proc. § 1033.5(a)(10)(A)-(C); Cal. Civ, Code (“Code”) § 1717. See also Starpoint ‘NOTICE OF MOTION AND MOTION OF NON-PARTY APWA FOR AN AWARD OF FEES ON APPEAL,CALLAHAN & BLAINE ee 10 uw 12 B 14 15 16 7 18 19 20 21 2 24 25 26 27 28 Properties, LLC v. Namvar, 201 Cal.App.4th 1101, 1111 (2011) (“Pursuant to Civil Code section 1717, where a written contract expressly provides for the award of attorney fees, the prevailing party in an action under or relating to the contract is entitled to recover its fees, whether incurred at trial or on appeal”) (citing cases; emphasis added), A. AWPA Is Entitled to the Fees it Incurred on Appeal Inits October 23, 2015 motion for attorneys’ fees, AWPA explained why it was entitled to the attomeys’ fees it incurred in the underlying litigation. In sum, AWPA was the prevailing party ~ and therefore entitled to fees pursuant to Code Section 1717 — because it achieved a complete, “unqualified victory on all causes of action asserted by all Cross-Complainants. The Court presumably agreed with AWPA’s position, but denied the motion without prejudice as premature, (Request for Judicial Notice (“RIN”) Ex. 1.) The Court is therefore already familiar with the arguments, and they will not be repeated here. Although the Court agreed that AWPA was entitled to its fees, it deferred the award of those fees until the conclusion of the underlying litigation, AWPA successfully appealed that decision, (RIN Ex. 2.) It is well-settled that “[wJhen a contract or a statute authorizes the prevailing party to recover attomey fees, that party is entitled to attomey fees incurred at trial and on appeal.” Douglas E, Barnhart, Inc. v. CMC Fabricators, Inc., 211 Cal. App 4th 230, 250 (2012). See also Cirimele v. Shinazy, 134 Cal. App.2d 50, 52 (“A contract for a reasonable attomey's fee in enforcing its provisions embraces an allowance for legal services rendered upon appeal as well as during the trial”). Therefore, AWPA is entitled to the fees it incurred on its successfill appeal. B. ‘The Fees That AWPA Incurred On Appeal Are Reasonable An award of attomey’s fees under Code Section 1717 is calculated using the lodestar method which is defined as the number of hours reasonably expended multiplied by a reasonable hourly rate. PLCM Group v. Drexler, 22 Cal, 4th 1084, 1095 (2000) (“PLCM"). “The experienced trial judge is the best judge of the value of professional services rendered in his court, and while his judgment is of course subject to review, it will not be disturbed unless the appellate -5- ‘NOTICE OF MOTION AND MOTION OF NON-PARTY APWA FOR AN AWARD OF FEES ON ‘APPEAL,10 ul 12 B 14 15 16 CALLAHAN & BLAINE 7 18 19 20 2 2 23 24 25 26 27 28 court is convinced that itis clearly wrong.” Montgomery v. Bio Med Specialties, inc., 183 Cal. App. 3d 1292, 1298 (1986) (citations and quotations omitted). The trial court is also in the best position to consider the reasonableness of fees are incurred in connection with a successful appeal, Security Pacific National Bank v. Adamo, 142 Cal.App.34 492, 498 (1983) (“Although this court has the power to fix attomey fees on appeal, the better practice is to have the trial court determine such fees when it determines costs on appeal”). In determining the reasonable number of hours and reasonable rate, “[]he factors to be considered include the nature and difficulty of the litigation, the amount of money involved, the skill required and employed to handle the case, the attention given, the success or failure, and other circumstances in the case.” EnPalm, LLC y. Teitler, 162 Cal. App. 4th 770, 774 (2008). ‘The determination of what fees are reasonable in the context of an appeal, however, is significantly less complicated. On appeal, the record is fully developed, and the Court need not delve into complex issues related to discovery and additional motion practice, ‘The time sheets attached to the Declaration of Mr. Casero reflect that the vast majority of the work on the appeal was performed by Robert Lawrence and Jill Thomas, (Declaration of Jason Casero (“Casero Decl.”) Ex. 1.) Their rates — along with the rates of all the attorneys who contributed to the success of the appeal ~ are comparable to the prevailing rates in the Souther California legal community for similar work. See PLCM, 22 Cal. 4th at 1095 (holding that in determining a reasonable the court should look to the rate prevailing in the community for similar ‘work performed by attorneys of comparable skill, experience and reputation.) TI. CONCLUSION In light of the foregoing, AWPA respectfully request that this Court award the entirety of the attomey’s fees that AWPA incurred on its successful appeal Dated: August 28, 2017 Attomeys for Non-Party AURORA PACIFIC WESTERN ADVISORS -6- ‘NOTICE OF MOTION AND MOTION OF NON-PARTY APWA FOR AN AWARD OF FEES ON APPEALCALLAHAN & BLAINE : 5 : 10 uM 12 B 4 15 16 7 18 19 20 21 2 23 24 25 26 27 28 PROOF OF SERVICE Tam employed in the County of Orange, State of Califomia. 1am over the age of 18 years and am not a party to the within action; my business address is 3 Hutton Centre Drive, Ninth Floor, Santa Ana, California 92707. On August 28, 2017, served the following document(s) deseribed as: NOTICE OF MOTION AND MOTION OF NON-PARTY AURORA PACIFIC WESTERN ADVISORS, INC. FOR AN AWARD OF FEES ON APPEAL DECLARATION OF JASON CASERO IN SUPPORT OF MOTION BY NON-PARTY AURORA PACIFIC WESTERN ADVISORS, INC. FOR AN AWARD OF FEES ON APPEAL REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF MOTION BY NON-PARTY AURORA PACIFIC WESTERN ADVISORS, INC. FOR AN AWARD OF FEES ON APPEAL con the interested parties in this action by placing: the original 00a true copy thereof as lows: Please see attached “Service List” BY OVERNITE EXPRESS: I deposited such envelopes at Santa Ana, California for collection and delivery by Overnite Express with delivery fees paid or provided for in accordance with ordinary business practices. I am “readily familiar” with the firm's practice of collection and processing packages for overnight delivery by Overnite Express, ‘They are deposited with a facility regularly maintained by Overnite Express for receipt on the same day in the ordinary course of business. BY MAIL: I deposited such envelope in the mail at Santa Ana, California, The envelope ‘was mailed with postage thereon fully prepaid. I am "readily familiar" with the firm's practice of collection and processing correspondence for mailing, It is deposited with the United States Postal Service on that same day in the ordinary course of business. Iam aware that on motion of party served, service is presumed inwalid if postal cancellation date or postage meter date is more than one (1) day alter date of deposit for mailing in affidavit. @ — BY ELECTRONIC SERVICE ONE LEGAL : transmitted the foregoing documents by electronic mail to the party(s) identified on the attached service list by using the electronic mail as indicated, Said electronic mail were verified as complete and without error. (BY PERSONAL SERVICE: I caused such envelope to be hand delivered by First Legal to the addressees below. Cl BY FACSIMILE: I transmitted the foregoing document by facsimile to the party(s) identified above by using the facsimile number(s) indicated. Said transmission(s) were verified as complete and without error I declare that I am employed in the office of a member of the bar of this court at whose direction the service was made. I declare under penalty of perjury under the laws of the United States of America and the State of California that the foregoing is true gextporrect. Executed on August 28, LAna, Chifomy V4 Proof of ServiceCALLAHAN & BLAINE eer anann 10 ul 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SERVICE LIST Morgan, etal. v. Hyatt, et al. ‘Case No. 30-2011-00473005 (Consolidated with Case Nos, 30-2011-00531658 and 30-2013-00678076) Mary A. Dannelley, Esq. Attomeys for Plaintiff and Cross-Defendant, ‘Law OFFICES OF Mary A. DANNELLEY MICHELLE S. MORGAN, in her capacity as 160 Newport Center Drive, Suite 120 Trustee and on behalf of the JC WARTELL ‘Newport Beach, CA 92660 NONGRANTOR TRUST UDT, 2005, etc. Tel: (949) 252-1600 Fax: (949) 252-1611 email: mary@dannelleylaw.com Alicia Vaz, Esq. Attorneys for Defendants and Cross- Perry Hughes, Esq. Complainants COX CASTLE & NICHOLSON LLP 2029 Century Park East, Suite 2100 Los Angeles, CA 90067 Tel: 310-284-2200 Fax: 310-284-2100 email: avazi@coxcastle.com phughes@eoxcastle.com Jared M. Tofier, Esq. Attomey for Cross-Defendant RAYMOND FINLAYSON TOFFER ROOSEVELT & LILLY HARPER: LLP 15615 Alton Parkway, Suite 250 Irvine, CA 92618 Tel: (949) 759-3810 Eax: (949) 759-3812 Email: jtoffer@frlfirm.com Darren J. Campbell, Esq Attomeys for JTR ADVISORS, LP. AITKEN CAMPBELL HEIKAUS WEAVER, LLP 2030 Main Street, Suite 1300 Irvine, CA 92614 Tel: (949) 236-4626 Fax: (949) 271-4046 Email: Darren@achwlaw.com -2- Proof of Service