Case 2:19-ap-01383-SK Doc 262 Filed 06/03/21 Entered 06/03 ...

DLA PIPER LLP (US) LOS A NG EL ES

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DAVID B. FARKAS (SBN 257137) [email protected] DLA PIPER LLP (US) 2000 Avenue of the Stars Suite 400 North Tower Los Angeles, California 90067-4704 Tel: (310) 595-3412 Fax: (310) 595-3312

JOHN K. LYONS (Pro Hac Vice) [email protected] JEFFREY S. TOROSIAN (Pro Hac Vice) [email protected] JOSEPH A. ROSELIUS (Pro Hac Vice) [email protected] DLA PIPER LLP (US) 444 West Lake Street, Suite 900 Chicago, Illinois 60606-0089 Tel: (312) 368-4000 Fax: (312) 236-7516

Attorneys for Jonathan D. King as Chapter 7 Trustee

UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA

LOS ANGELES DIVISION

In re:

ZETTA JET USA, INC., a California corporation,

Debtor.

Lead Case No.: 2:17-bk-21386-SK

Chapter 7

Jointly Administered With: Case No.: 2:17-bk-21387-SK

Adv. Proc. No. 2:19-ap-01383-SK

REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF THE TRUSTEE’S OPPOSITION TO DEFENDANTS UNIVERSAL LEADER INVESTMENT LIMITED, GLOVE ASSETS INVESTMENT LIMITED, AND TRULY GREAT GLOBAL LIMITED’S MOTION TO DISMISS COUNTS I, II, VI, VII, VIII, IX & X, AND MOTION TO STRIKE COUNTS VIII & IX OF AMENDED ADVERSARY COMPLAINT; THE TRUSTEE’S OPPOSITION TO DEFENDANT LI QI’S MOTION TO DISMISS COUNTS I, II, VII, VIII, AND IX OF AMENDED ADVERSARY COMPLAINT; AND THE TRUSTEE’S MOTION FOR LIMITED JURISDICTIONAL DISCOVERY

Next Hearing Date: August 11, 2021 Time: 9:00 a.m. (PDT) Place: Courtroom 1575 255 East Temple Street

In re:

ZETTA JET PTE, LTD., a Singaporean corporation,

Debtor.

JONATHAN D. KING, solely in his capacity as Chapter 7 Trustee of Zetta Jet USA, Inc. and Zetta Jet PTE, Ltd.

Plaintiff,

v.

YUNTIAN 3 LEASING COMPANY DESIGNATED ACTIVITY COMPANY f/k/a YUNTIAN 3 LEASING COMPANY LIMITED, YUNTIAN 4 LEASING COMPANY DESIGNATED ACTIVITY COMPANY f/k/a YUNTIAN 4 LEASING COMPANY LIMITED, MINSHENG FINANCIAL LEASING CO., LTD., MINSHENG BUSINESS AVIATION LIMITED, EXPORT DEVELOPMENT CANADA, LI QI, UNIVERSAL LEADER INVESTMENT LIMITED, GLOVE ASSETS

Case 2:19-ap-01383-SK Doc 262 Filed 06/03/21 Entered 06/03/21 16:47:44 DescMain Document of 6


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INVESTMENT LIMITED, and TRULY GREAT GLOBAL LIMITED,

WELLS FARGO BANK NORTHWEST, N.A., in its capacity as trustee to Yuntian 3 Trust dated September 20, 2016 (formed and administered in Utah) and its capacity as trustee of Yuntian 4 Trust dated September 20, 2016 (formed and administered in Utah); TVPX ARS, INC., in its capacity as trustee to Zetta MSN 9688 Statutory Trust dated September 20, 2016 (formed as Wyoming statutory trust), Zetta MSN 9606 Statutory Trust dated September 20, 2016 (formed as Wyoming statutory trust), collectively Nominal Defendants,

Defendants.

Los Angeles, CA 90012

[Relates to Adv. Docket No. 232, 255, 257, 259]



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REQUEST FOR JUDICIAL NOTICE

Pursuant to Federal Rule of Evidence 201, the Trustee requests that the Court take judicial

notice of certain objective facts related to the Defendants’ filing of the pleadings identified below.

Specific Facts Regarding Previous Filings

In particular, the Trustee requests that the Court take judicial notice (1) that Defendant Li

Qi (“Li”) personally appeared and filed motions in the main bankruptcy case (In re Zetta Jet USA,

Inc., Case No. 2:17-bk-21386-SK) without objecting to personal jurisdiction and (2) that Li signed

and submitted certain pleadings on behalf of Defendants Truly Great Global Ltd. and Universal

Leader Ltd. as well as that Li submitted filings and made certain statements in pleadings in Truly

Great Global Ltd. v. Seagrim, No. BC694919 (Cal. Super. Ct., Cnty. of Los Angeles), in the specific

documents set forth in the chart below:

No. Filing Case Docket Number

Date of Filing

1 Response to . . . Emergency Motion to Approve Stipulation for Appointment of Chapter 11 Trustee Filed by Creditor Mr. Li Qi, Truly Great Global Ltd., Universal Leader Investment Ltd. and Glove Assets Investment Ltd.

Case No. 2:17-bk-21386-SK

69 9/27/2017

2 Objection to Chapter 11 Trustee’s Emergency Motion for Interim and Final Orders . . . Filed by Creditor Mr. Li Qi, Truly Great Global Ltd., Universal Leader Investment Ltd. and Glove Assets Investment Ltd.


405 11/21/2017

3 Application of non-resident attorney to appear in a specific case per Local Bankruptcy rule (Benjamin Mintz) Filed by Creditor Mr. Li Qi, Truly Great Global Ltd., Universal Leader Investment Ltd. and Glove Assets Investment Ltd.


434 11/28/2017

4 Complaint and Exhibits Truly Great Global Ltd. v. Seagrim, No. BC694919

N/A 02/21/2018



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(Superior Court of California, County of Los Angeles)

5 Declaration of Li Qi in Support of Plaintiffs’ Opposition to Defendants James Seagrim and S. Matthew Walter’s Motion for an Order Requiring an Undertaking and Staying the Action

Truly Great Global Ltd. v. Seagrim, No. BC694919 (Superior Court of California, County of Los Angeles)

N/A 01/04/2019

6 First Amended Complaint and Exhibits Truly Great Global Ltd. v. Seagrim, No. BC694919 (Superior Court of California, County of Los Angeles)

N/A 01/25/2019

“Judicial notice under Rule 201 permits a court to notice an adjudicative fact if it is ‘not

subject to reasonable dispute.’” Khoja v. Orexigen Theraputics Inc., 899 F.3d 988, 999 (9th Cir.

2018) (quoting Fed. R. Evid. 201(b)). “A fact is ‘not subject to reasonable dispute’ if it is ‘generally

known,’ or ‘can be accurately and readily determined from sources whose accuracy cannot

reasonably be questioned.’” Id. (quoting Fed. R. Evid. 201(b)(1)-(2)). The facts sought to be

noticed by this request are not subject to reasonable dispute because they can be accurately and

readily determined from the dockets in the Debtors’ bankruptcy cases. A “court may take ‘judicial

notice of matters of public record’ but ‘cannot take judicial notice of disputed facts contained in

such public records.’” Baird v. BlackRock Inst. Tr. Co. NA, 403 F. Supp. 3d 765, 774 (N.D. Cal.

2019)) (quoting Khoja, 899 F.3d at 999). The Trustee is properly seeking judicial notice only that

the Defendants made the filings above and that the Defendants made certain statements in the filings

above – not to prove the truth of any of the contents of the documents. This court previously

granted a similar request made by Trustee. [Dkt. No. 151.]

Specific Facts Regarding Proofs of Claims

The Trustee also requests that the Court take judicial notice of the identity of the Defendant



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filing the proof of claim, the proof of claim number, the Debtor against which the proof of claim

was filed, the amount of the claim filed, and the date the proof of claim was filed as set forth in the

chart below:

Defendant Filing Proof of Claim

Proof of Claim Number

Amount of Claim

Debtor Filed Proof of Claim Filed Against

Date of Filing

Universal Leader 94 At least $35,660,808.18

Zetta PTE 04/06/2018

Glove Assets 95 At least $43,208,715.74

Zetta PTE 04/06/2018

The facts sought to be noticed by this request are not subject to reasonable dispute because

they can be accurately and readily determined from the proof of claims docket in the Debtors’

bankruptcy cases. In addition, the filing of the proof of claims is relevant to the Trustee’s argument

that by filing the proofs of claims, the Defendants have waived the presumption against

extraterritoriality.

Courts have recognized that they may take judicial notice of facts related to the filing of a

proof of claim. See, e.g., Aceituno v. Vowell (In re Intelligent Direct Marketing), 2015 WL 925565

at * 1 (E.D. Cal. March 3, 2015) (taking judicial notice of the existence of the proof of claim

documents because they were public records and their authenticity was not disputed); Gross Belsky

Alonso LLP v. Henry Edelson, 2009 WL 1505284 at *5 (N.D. Cal. May 27, 2009 (“[T]he Court

may take judicial notice that a Proof of Claim in a bankruptcy proceeding was filed . . . [.]”)

(emphasis in original); Wolff v. Chrysler Group LLC, 2010 WL 1151 at *2 (C.D. Cal. Feb. 22,

2010) (granting defendant’s request for judicial notice of the proof of claim filed by the plaintiff in

the bankruptcy court). The Trustee is properly seeking judicial notice with respect to only the

objective facts related to the Defendants’ filing of the claims – not to prove the truth of any of the

contents of the claims or that the Defendants are entitled to the amounts sought by the claims.1

Conclusion

Accordingly, the Trustee respectfully requests that the Court grant this request and take

1 The Trustee reserves all rights to contest each of these proofs of claims and does not waive any such right or consent to the propriety of any of these proofs of claims by seeking judicial notice of their filing as stated herein.



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judicial notice of the objective facts related to the Defendants’ filing of the pleadings and proofs of

claims that are identified above.

DATED: June 3, 2021

DLA PIPER LLP (US) By: /s/ John K. Lyons

DAVID B. FARKAS JOHN K. LYONS (Pro Hac Vice) JEFFREY S. TOROSIAN (Pro Hac Vice) JOSEPH A. ROSELIUS (Pro Hac Vice)

Attorneys for the Chapter 7 Trustee


DLA PIPER LLP (US)LOS A NG EL ES

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APPENDIX OF UNPUBLISHED OPINIONS RE TRUSTEE’S REQUEST FOR JUDICIAL NOTICE

DAVID B. FARKAS (SBN 257137) [email protected] DLA PIPER LLP (US) 2000 Avenue of the Stars Suite 400 North Tower Los Angeles, California 90067-4704 Tel: (310) 595-3412 Fax: (310) 595-3312

JOHN K. LYONS (Pro Hac Vice) [email protected] JEFFREY S. TOROSIAN (Pro Hac Vice) [email protected] JOSEPH A. ROSELIUS (Pro Hac Vice) [email protected] DLA PIPER LLP (US) 444 West Lake Street, Suite 900 Chicago, Illinois 60606-0089 Tel: (312) 368-4000 Fax: (312) 236-7516

Attorneys for Jonathan D. King as Chapter 7 Trustee

UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA

LOS ANGELES DIVISION

In re:

ZETTA JET USA, INC., a California corporation,

Debtor.

Lead Case No.: 2:17-bk-21386-SK Chapter 7 Jointly Administered With: Case No.: 2:17-bk-21387-SK

Adv. Proc. No. 2:19-ap-01383-SK

APPENDIX OF UNPUBLISHED OPINIONS CITED IN TRUSTEE’S REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF THE TRUSTEE’S OPPOSITION TO DEFENDANTS UNIVERSAL LEADER INVESTMENT LIMITED, GLOVE ASSETS INVESTMENT LIMITED, AND TRULY GREAT GLOBAL LIMITED’S MOTION TO DISMISS COUNTS I, II, VI, VII, VIII, IX & X, AND MOTION TO STRIKE COUNTS VIII & IX OF AMENDED ADVERSARY COMPLAINT; THE TRUSTEE’S OPPOSITION TO DEFENDANT LI QI’S MOTION TO

In re:

ZETTA JET PTE, LTD., a Singaporean corporation,

Debtor.

JONATHAN D. KING, solely in his capacity as Chapter 7 Trustee of Zetta Jet USA, Inc. and Zetta Jet PTE, Ltd.,

Plaintiff,

v.

YUNTIAN 3 LEASING COMPANY DESIGNATED ACTIVITY COMPANY f/k/a YUNTIAN 3 LEASING COMPANY LIMITED, YUNTIAN 4 LEASING COMPANY DESIGNATED ACTIVITY COMPANY f/k/a YUNTIAN 4 LEASING COMPANY LIMITED, MINSHENG FINANCIAL LEASING CO., LTD., MINSHENG BUSINESS AVIATION LIMITED, EXPORT DEVELOPMENT CANADA, LI QI,

Case 2:19-ap-01383-SK Doc 262-1 Filed 06/03/21 Entered 06/03/21 16:47:44 DescAppendix Page 1 of 21


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UNIVERSAL LEADER INVESTMENT LIMITED, GLOVE ASSETS INVESTMENT LIMITED, and TRULY GREAT GLOBAL LIMITED,

WELLS FARGO BANK NORTHWEST, N.A., in its capacity as trustee to Yuntian 3 Trust dated September 20, 2016 (formed and administered in Utah) and its capacity as trustee of Yuntian 4 Trust dated September 20, 2016 (formed and administered in Utah); TVPX ARS, INC., in its capacity as trustee to Zetta MSN 9688 Statutory Trust dated September 20, 2016 (formed as Wyoming statutory trust), Zetta MSN 9606 Statutory Trust dated September 20, 2016 (formed as Wyoming statutory trust), collectively Nominal Defendants,

Defendants.

DISMISS COUNTS I, II, VII, VIII, AND IX OF AMENDED ADVERSARY COMPLAINT; AND THE TRUSTEE’S MOTION FOR LIMITED JURISDICTIONAL DISCOVERY

Next Hearing: Date: August 11, 2021 Time: 9:00 a.m. (PDT) Place: Courtroom 1575

255 East Temple Street Los Angeles, CA 90012

In accordance with Local Bankruptcy Rule 9013-2(b)(4), the Trustee hereby submits copies

of unpublished judicial opinions cited in Trustee’s Request for Judicial Notice in Support of the

Trustee’s Opposition to Defendants Universal Leader Investment Limited, Glove Assets

Investment Limited, and Truly Great Global Limited’s Motion to Dismiss Counts I, II, VI, VII,

VIII, IX & X, and Motion to Strike Counts VIII & IX of Amended Adversary Complaint; the

Trustee’s Opposition to Defendant Li Qi’s Motion to Dismiss Counts I, II, VII, VIII, and IX of

Amended Adversary Complaint; and the Trustee’s Motion for Limited Jurisdictional Discovery

(the “Request”). The unpublished judicial opinions cited in the Request are attached hereto as

follows:

1. Exhibit 1: Aceituno v. Vowell (In re Intelligent Direct Marketing), 2015 WL 925565 (E.D.

Cal. March 3, 2015)

2. Exhibit 2: Ross Belsky Alonso LLP v. Henry Edelson, 2009 WL 1505284 at *5 (N.D. Cal.

May 27, 2009)

3. Exhibit 3: Wolff v. Chrysler Group LLC, 2010 WL 1151 at *2 (C.D. Cal. Feb. 22, 2010)



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Respectfully submitted,

DATED: June 3, 2021 DLA PIPER LLP (US)

By: /s/ John K. LyonsDAVID B. FARKAS (SBN 257137) JOHN K. LYONS (Pro Hac Vice) JEFFREY S. TOROSIAN (Pro Hac Vice) JOSEPH A. ROSELIUS (Pro Hac Vice)

Attorneys for the Chapter 7 Trustee


Exhibit 1


In re Intelligent Direct Marketing, Not Reported in F.Supp.3d (2015)

© 2021 Thomson Reuters. No claim to original U.S. Government Works. 1

2015 WL 925565Only the Westlaw citation is currently available.

United States District Court,E.D. California.

In re INTELLIGENT DIRECTMARKETING, Debtor.

Thomas Aceituno, Chapter 7 Trustee Plaintiff,v.

Todd Vowell; Raeanne Vowell; BeverlyVowell; Steadfast Mailing Services, Inc.;Sashi Corporation; Jeffrey K Garcia; AndFidelis MARKETING, Inc., Defendants.

Nos. 2:12–cv–03068 JAM EFB,2:09–cv–02898 JAM GGH.

|Bky Case No. 07–30685–A–7.

|Bky AP No. 09–2439.

|Signed March 2, 2015.

|Filed March 3, 2015.

Attorneys and Law Firms

Thomas Richard Phinney, Parkinson Phinney, Sacramento,CA, for Plaintiff.

Beverly Vowell, Granite Bay, CA, pro se.

Steadfast Mailing Services, Inc., Granite Bay, CA, pro se.

Todd Vowell, Granite Bay, CA, pro se.

Raeanne Vowell, Granite Bay, CA, pro se.

Sashi Corporation, Granite Bay, CA, pro se.

George A. Roberts, Law Office of George A. Roberts, NevadaCity, CA, for Defendants.

ORDER GRANTING IN PART AND DENYING INPART PLAINTIFF'S MOTION TO LIQUIDATE

AMOUNT OF SUCCESSOR LIABILITY AGAINSTFIDELIS AND HOLD JEFFREY GARCIA LIABLE

JOHN A. MENDEZ, District Judge.

*1 This matter is before the Court on Plaintiff ThomasAceituno's (“Plaintiff” or “Trustee”) motion to liquidatedamages (Doc. # 92) against Defendant Fidelis Marketing,Inc. (“Defendant Fidelis”) and to hold Defendant JeffreyGarcia (“Defendant Garcia”) personally liable. DefendantGarcia opposes (Doc. # 96) Plaintiff's motion, and alsofiled a special opposition (Doc. # 94) disputing the Court'sjurisdiction over him. Defendants Todd and Raeanne Vowellfiled a “response” (Doc. # 99) to Plaintiff's motion. Plaintiffreplied to both Defendant Garcia (Doc. # 100) and the Vowells

(Doc. # 101). 1

I. FACTUAL ALLEGATIONS ANDPROCEDURAL BACKGROUND

The parties and the Court, having conducted a four-day benchtrial from June 23, 2014 through June 26, 2014, are familiarwith the factual and procedural history of this case. Followingtrial, the Court made the following factual and legal findings,relevant to Plaintiff's present motion. Todd Vowell beganoperating Intelligent Direct Marketing, Inc. (“IDM”) as anautomotive direct mailing service in 1994, and incorporatedIDM in 1997. Fidelis F & C (Doc. # 78) at 3. After a numberof profitable years, IDM began operating at a loss by late 2006and 2007. Fidelis F & C at 5. On May 1, 2007, Jeff Garciacreated Fidelis, a direct mail marketing company. Fidelis F &C at 5. IDM granted Fidelis a right to possess IDM's goodwill,income stream, and assets. Fidelis F & C at 6. In fact, the onlydifference between IDM and Fidelis was that Fidelis wouldnot be responsible for IDM's debt. Fidelis F & C at 5. Basedon these facts, the Court found that “Fidelis is the successor ofIDM because Fidelis was created for the purpose of avoidingliability.” Fidelis F & C at 26. With regard to Mr. Garcia, theCourt noted that “[t]he Trustee also seems to suggest that Mr.Garcia should be held directly liable [on behalf of Fidelis],but he fails to address alter ego liability.” Fidelis F & C at 25.The Court entered judgment against Fidelis, but in favor ofMr. Garcia. Fidelis F & C at 26.

II. OPINION

A. Judicial NoticePlaintiff requests that the Court take judicial notice of the“proofs of claim” submitted in support of his motion. Doc.




# 92. Based on Plaintiff's representations and the headeron each page of the exhibits, these documents appear tobe part of the record in the underlying bankruptcy case.These court documents are public records, and Defendantsdo not dispute their authenticity. Accordingly, they are theproper subject of judicial notice, and Plaintiff's request isGRANTED. However, the Court notes that it may only takejudicial notice of the existence of such documents, not thefacts contained therein.

Similarly, Defendants Todd and Raeanne Vowell requestthat the Court take judicial notice of the “proof of claim”submitted by the Vowells in the underlying bankruptcy case.Doc. # 99–1. This document is a public record, and Plaintiffdoes not dispute its authenticity. Accordingly, it is the propersubject of judicial notice, and the request is GRANTED.Again, the Court notes that it may only take judicial notice ofthe existence of the document, not the facts contained therein.

B. Discussion

1. Calculation of Damages against Fidelis*2 Plaintiff moves for “an order fixing the total amount of

the debts of IDM at $1,053,438.49 for purposes of givingeffect to the successor liability of Fidelis Marketing, Inc.,for IDM's debts, as declared” in the Court's September 18,2014 order. Mot. at 1. Along with his motion, Plaintiffsubmits a chart summarizing the claims filed in the underlyingIDM bankruptcy case, as well as copies of the documentaryproof submitted in support of these claims. See Doc. # 92.Defendant Fidelis does not oppose this portion of Plaintiff'smotion, and does not dispute Plaintiff's calculation of IDM'sdebt, for which Fidelis bears successor liability. However,Defendants Todd and Raeanne Vowell submit a “response” toPlaintiff's motion, which is discussed below.

Under 28 U.S.C. § 2202, the Court may grant “[f]urthernecessary or proper relief ... against any adverse party whoserights have been determined by [a declaratory] judgment.” 28U.S.C. § 2202. On September 18, 2014, the Court ordered that“declaratory judgment be entered against Fidelis declaringit liable for IDM's debt on Plaintiff's successor liabilityclaim.” Order at 26. Accordingly, Plaintiff's request for anorder fixing the debt of IDM, for purposes of giving effectto the September 18, 2014 declaratory judgment imposingsuccessor liability on Fidelis, is properly before the Court.

In calculating the amount of damages against Fidelis, Plaintifflooks to the claims submitted against IDM in the underlying

bankruptcy action, but excludes two categories of claims.First, Plaintiff excludes any claims arising after May 1, 2007,the date on which Fidelis came into existence as the “newIDM.” Mot. at 4. Second, Plaintiff excludes any “insider”claims filed by Fidelis, Garcia, Sashi Corporation, ToddVowell, or Raeanne Vowell. Mot. at 4. Plaintiff notes that thiscalculation is “conservative” because it excludes “doubtfulor questionable claims.” Reply to Vowells at 1; Mot. at 4.Taking the sum of all claims which do not fall into eitherof the above categories, Plaintiff seeks damages againstFidelis in the amount of $1,053,438.49. All of the claimsincluded in this calculation are supported by documentaryproof, which accompanies Plaintiff's declaration. Doc. # 92.As noted above, Fidelis does not oppose this calculation. Inlight of Plaintiff's conservative approach and the supportingdocumentation, and in the absence of any opposition byFidelis, the Court adopts Plaintiff's calculation. Accordingly,the Court finds that the total amount of IDM's debt, for whichFidelis is liable as a successor to IDM, is $1,053,438.49.As discussed below, the Court makes no determination as towhether or not the “insider” claims or claims arising after May1, 2007 should ultimately be paid or disallowed during theTrustee's distribution of the bankruptcy estate.

Defendants Todd and Raeanne Vowell argue that Plaintiffis attempting to “summarily invalidate the Vowells' claim.”Vowell Response at 2. The Vowells express concern thatPlaintiff's failure to include their claims in the calculation ofdamages against Fidelis will ultimately prevent them fromprevailing on those claims during bankruptcy proceedings.Vowell Response at 2. However, as explained in Plaintiff'sreply, this is not the case. Reply to Vowells at 2. Plaintiff'scurrent motion merely seeks to fix the total amount of IDM'sdebt for which Fidelis bears successor liability. The amountimposed by the Court ($1,053,438.49) will be added to thebankruptcy estate, for eventual distribution by the Trustee.Prior to distributing the estate, the Trustee will “examineproofs of claims and object to the allowance of any claimthat is improper.” 11 U.S.C. § 704(a)(5). If the monetaryamount of valid claims exceeds the funds held by the Trustee,the estate will be distributed according to the priorities setforth in 11 U.S.C. § 726. Accordingly, the Vowells' concernthat this order will invalidate their claims is misplaced: afinal determination as to the validity of their claims will notbe made until later in the bankruptcy proceedings, after theTrustee has collected the funds comprising the bankruptcyestate. Moreover, to the extent that the Vowells ask the Courtto increase the amount of damages imposed against Fidelis—by including their $2,286,479.57 claim against IDM—this




request is not properly before the Court and Defendant Fidelishas had no chance to address their argument.

*3 For all of these reasons, Plaintiff's motion to fix theamount of IDM's debt, for which Fidelis bears successorliability, at $1,053,438.49 is GRANTED.

2. Personal Liability of GarciaPlaintiff also asks the Court to find that “Garcia as wellas Fidelis [is] liable for repayment of [IDM's] debt.” Mot.at 8. Plaintiff argues that the “alter ego doctrine applies toprevent Garcia from using Fidelis to shield himself fromliability.” Mot. at 6. Defendant Garcia responds that the Courtlacks jurisdiction over him because it has already enteredjudgment in his favor, and that Plaintiff's alter ego argumentis foreclosed by the doctrine of res judicata. Garcia SpecialOpp. at 1; Garcia Opp. at 1. Plaintiff replies that “[t]he issue ofGarcia's alter ego liability ... was not pled or litigated.” Replyto Garcia at 2.

In its September 18, 2014 order, the Court specifically heldthat “all the claims not discussed in either the Trustee'sproposed findings of fact and and conclusions of law orthe Trustee's supplemental post-trial brief are abandoned.”Fidelis F & C at 9. Immediately after finding that Fidelis bearssuccessor liability for IDM's debts, the Court noted that “[t]heTrustee also seems to suggest that Mr. Garcia should be helddirectly liable ... but he fails to address alter ego liability.”Fidelis F & C at 25. The Court went on to order that “judgmentbe entered in favor of ... Jeffrey Garcia” without limiting orqualifying this aspect of the order in any way. Fidelis F & Cat 26.

The plain implication of this language is that Mr. Garcia isnot personally liable, under an alter ego theory of liability,for the successor liability of Fidelis on behalf of IDM's debts.Plaintiff had an opportunity to present evidence at trial tosupport this argument in his proposed findings of fact andconclusions of law, and failed to adequately do so. In fact,Plaintiff concedes that the portion of his proposed findingswhich relates to successor liability “does not request alter egoliability against Garcia.” Reply at 3. In light of (1) the Court'sspecific finding that arguments not made at the time of thetrial would be deemed abandoned and (2) the Court's specificfinding that Plaintiff failed to address alter ego liability onbehalf of Mr. Garcia, Plaintiff's alter ego argument presentlybefore the Court is barred by the doctrine of res judicata. SeeGreenspan v. LADT, LLC, 191 Cal.App.4th 486, 514, 121Cal.Rptr.3d 118 (2010) (noting that “[r]es judicata prohibits

the relitigation of claims and issues which have alreadybeen adjudicated in an earlier proceeding”). Plaintiff's presentmotion amounts to an untimely request for reconsiderationof the Court's prior finding as to Mr. Garcia. Plaintiff haspresented no compelling reason for the Court to revisit itsentry of judgment in favor of Mr. Garcia, and the Courtdeclines to give Plaintiff a second bite at the apple.

Plaintiff's reliance on Greenspan is misplaced. Reply toGarcia at 4. In Greenspan, the California appellate courtdiscussed the doctrine of res judicata with regard to an issuethat had not been considered in the original proceeding.See Greenspan, 191 Cal.App.4th at 507, 121 Cal.Rptr.3d118 (noting that the party seeking to invoke the doctrine ofres judicata “was not a party to that claim [decided in theearlier proceeding] and did not prevail on it”). Thus, theissue in Greenspan was whether the party seeking to amendthe judgment was precluded from doing so by its failureto raise the issue in the earlier proceeding. Greenspan, 191Cal.App.4th at 514, 121 Cal.Rptr.3d 118. Here, the issueof Mr. Garcia's alter ego liability was expressly reachedand rejected by the Court in its September 18, 2014 order.Accordingly, res judicata is a bar to Plaintiff's argument,as it “precludes a party to an action from relitigating ina second proceeding matters litigated and determined in aprior proceeding.” Greenspan, 191 Cal.App.4th at 514, 121Cal.Rptr.3d 118.

*4 To the extent that Plaintiff's motion seeks a finding thatGarcia is personally liable for the repayment of Fidelis' andIDM's debt, his motion is DENIED. As the Court does not findMr. Garcia personally liable for the debts of Fidelis and IDM,it need not consider Defendant Garcia's argument that theentry of judgment in his favor divests the Court of jurisdictionover him. Garcia Special Opp. at 1.

III. ORDER

For the reasons set forth above, the Court GRANTS Plaintiff'smotion to the extent it seeks to fix the amount of damagesagainst Defendant Fidelis at $1,053,438.49, and DENIESPlaintiff's motion to the extent it seeks to hold DefendantGarcia personally liable for the debts of Fidelis and IDM:

IT IS SO ORDERED.




All Citations

Not Reported in F.Supp.3d, 2015 WL 925565

Footnotes

1 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). Thehearing was scheduled for February 11, 2015.

End of Document © 2021 Thomson Reuters. No claim to original U.S. Government Works.


Exhibit 2


Gross Belsky Alonso LLP v. Henry Edelson, Not Reported in F.Supp.2d (2009)


KeyCite Yellow Flag - Negative Treatment Distinguished by LeapFrog Enterprises, Inc. v. Epik Learning, LLC,

N.D.Cal., February 23, 2017


United States District Court, N.D. California,Oakland Division.

GROSS BELSKY ALONSO LLP, Plaintiff,v.

HENRY EDELSON and RobertDeBenedictis, Defendants.

No. C 08–4666 SBA.|

May 27, 2009.

West KeySummary

1 Federal Civil Procedure Corporations andbusiness organizations

In a law firm's breach of contract action seekingattorney fees, filed against two former clientswho were principals of a company, joinder ofthat company as a necessary party was notrequired. The former clients could not rely ona proof of claim to establish the existence ofa contractual relationship between the firm andthe company. In addition, the mere fact that thefirm filed a claim against the company did notipso facto establish that the company was solelyresponsible for the payment of the firm's fees.

4 Cases that cite this headnote


Terry Gross, Gross & Belsky LLP, San Francisco, CA, forPlaintiff.

Michael Terrance Conway, Peter Michael Hart, LeclairryanLLP, San Francisco, CA, for Defendants.

ORDER (1) DENYING DEFENDANTDeBENEDICTIS' MOTION TO DISQUALIFY

PLAINTIFF'S COUNSEL; (2) DENYINGDEFENDANTS' MOTIONS TO DISMISSPLAINTIFF'S AMENDED COMPLAINT

AND ALTERNATIVE MOTION TOTRANSFER VENUE; AND (3) GRANTINGPLAINTIFF'S MOTION FOR LEAVE TO

FILE A SECOND AMENDED COMPLAINT

SAUNDRA BROWN ARMSTRONG, District Judge.

*1 The instant diversity jurisdiction action arises froma fee dispute between Plaintiff, the law firm of GrossBelsky Alonso LLP (“Plaintiff”), and two of its formerclients, Defendants Henry Edelson (“Edelson”) and RobertDeBenedictis (“DeBenedictis”). The parties are presentlybefore the Court on the following motions: (1) DeBenedictis'Motion to Disqualify Plaintiff's Counsel [Docket 52]; (2)DeBenedictis and Edelson's individual Motions to DismissPlaintiff's Amended Complaint FRCP 12(b)(6), FRCP 12(b)(7) or in the Alternative to Transfer the Action to the SouthernDistrict of New York [Docket 32, 33]; and (3) Plaintiff'sMotion for Leave to File a Second Amended Complaint[Docket 46].

Having read and considered the papers filed in connectionwith this matter, and being fully informed, the Courthereby DENIES the motion for disqualification, DENIES themotions to dismiss or alternatively to transfer, and GRANTSthe motion for leave to amend. The Court, in its discretion,finds this matter suitable for resolution without oral argument.Fed.R.Civ.P. 78(b).

I. BACKGROUNDEdelson and DeBenedictis were principals in a companyknown as Global Vision Products, Inc. (“Global Vision”),which is now in bankruptcy. Defendants and Global Vision,along with various others, were named as defendants in aclass action lawsuit filed in Alameda County Superior Court.See Thomas v. Global Vision Prods., Inc., Alameda CountySuperior Court, Case No. RG03091195 (“Class Action”).(Gross Decl. ¶ 2, Docket 66.) On a date not specified inthe pleadings, Edelson and DeBenedictis retained Plaintiffto represent them in the Class Action, and agreed to payPlaintiff for its services. (Id. ¶ 3.) Plaintiff did not representGlobal Vision, but was informed that the company would




pay Defendants' legal fees pursuant to an indemnificationagreement. (Id. ¶¶ 4–5.) However, Plaintiff never receivedpayment for its services, and as a result, Plaintiff terminatedits representation. (Id. ¶ 7–8.) On August 17, 2007, GlobalVision filed for bankruptcy in the Southern District of NewYork. (Id. ¶ 9.)

On August 11, 2008, Plaintiff, acting as its own counsel,filed a civil complaint (utilizing a California Judicial Councilform pleading) in Alameda County Superior Court, seekingrecovery of its unpaid legal fees in the amount of $174,583.38from Edelson and DeBenedictis. On August 19, 2008,Plaintiff filed an amended complaint, again using a JudicialCouncil form. The amended complaint alleged three causesof action for: (1) breach of contract; (2) a common count foropen book account; and (3) quantum meruit. Pursuant to 28U.S.C. §§ 1441 and 1332, Defendants subsequently removedthe action to this Court on October 8, 2008, on the basis ofdiversity jurisdiction. As noted above, various motions arenow pending, which the Court discusses seriatim.

II. MOTION TO DISQUALIFY PLAINTIFF'SCOUNSELDeBenedictis moves to disqualify Plaintiff from representingitself in this action on the grounds that Plaintiff's self-representation is adverse to him, and that Plaintiff has violatedits duties of loyalty and confidentiality.

A. NO SUBSTANTIAL RELATIONSHIP*2 The right to disqualify counsel is within the discretion of

the trial court as an exercise of its inherent powers. See Peopleex rel. Dept. of Corps. v. SpeeDee Oil Change, 20 Cal.4th1135, 1143–44, 86 Cal.Rptr.2d 816, 980 P.2d 371 (1999)(“SpeeDee” ); Visa U.S.A., Inc. v. First Data Corp., 241

F.Supp.2d 1100, 1103 (N.D.Cal.2003). 1 Because a motion todisqualify is often tactically motivated and can be disruptiveto the litigation process, disqualification is considered to be adrastic measure that is generally disfavored and imposed onlywhen absolutely necessary. Concat LP v. Unilever, PLC, 350F.Supp.2d 796, 814–15 (N.D.Cal.2004). In addition, requestsfor disqualification “should be subjected to particularly strictjudicial scrutiny.” Optyl Eyewear Fashion Int'l Corp. v.Style Cos., 760 F.2d 1045, 1050 (9th Cir.1985) (internalquotations omitted). The party seeking disqualification bearsa “heavy burden.” City and County of San Francisco v. CobraSolutions, Inc., 38 Cal.4th 839, 851, 43 Cal.Rptr.3d 771, 135P.3d 20 (2006) (“Cobra Solutions” ).

“Where the potential conflict is one that arises from thesuccessive representation of clients with potentially adverseinterests, the courts have recognized that the chief fiduciaryvalue jeopardized is that of client confidentiality. Thus, wherea former client seeks to have a previous attorney disqualifiedfrom serving as counsel to a successive client in litigationadverse to the interests of the first client, the governingtest requires that the client demonstrate a ‘substantialrelationship’ between the subjects of the antecedent andcurrent representations.” Flatt v.Super. Ct., 9 Cal.4th 275, 283,36 Cal.Rptr.2d 537, 885 P.2d 950 (1994) (emphasis added);In re County of Los Angeles, 223 F.3d at 996. The “substantialrelationship” test focuses on the “similarities between the twofactual situations, the legal questions posed, and the natureand extent of the attorney's involvement with the cases.” H.F.Ahmanson & Co., 229 Cal.App.3d 1445, 1455, 280 Cal.Rptr.614 (1991). The mere fact that the two representations involvethe same general subject is insufficient. See Santa TeresaCitizen Action Group v. City of San Jose, 114 Cal.App.4th689, 711, 7 Cal.Rptr.3d 868 (2003).

DeBenedictis first contends that disqualification is warrantedsolely because he and Plaintiff are adverse. (Mot. at 6.) Itis axiomatic that adversity is inherent in a case, such as thepresent, where a law firm represents itself in a fee collectionaction brought against a former client. However, adversityalone is insufficient to justify disqualification. DeBenedictismust demonstrate not only that their interests are adverse,but also that the prior representation is substantially relatedto the Plaintiff's current self-representation. See FremontIndem. Co. v. Fremont General Corp., 143 Cal.App.4th 50,69, 49 Cal.Rptr.3d 82 (2006) (reversing order disqualifyingcounsel where no substantial relationship demonstrated).However, DeBenedictis does not argue, let alone discuss,whether the representations are substantially related. On thatground alone, his argument fails. See In re Charlisse C.,45 Cal.4th 145, 166 n. 11, 84 Cal.Rptr.3d 597, 194 P.3d330 (2008) (“It remains the former client's burden to showthe fact of the former representation and the existence ofa substantial relationship between the former and currentrepresentations”); see also Hyon–Su v. Maeda Pacific Corp. .,905 F.2d 302, 304, n. 1 (9th Cir.1990) (argument waived ifnot presented in opening papers).

*3 Though addressed by neither party, the Court notes thatthe few authorities that have addressed this particular issuehave concluded a law firm's action to collect unpaid legalfees is not substantially related to the prior representation inwhich those fees were incurred. See Lankler Siffert & Wohl,




LLP v. Rossi, 287 F.Supp.2d 398, 404 (S.D.N.Y.2003) (“Whenan attorney sues a former client to collect unpaid attorney'sfees, courts have not found a substantial relationship betweenthe previous matter and the fee collection litigation.”); ExactSoftware N.A., Inc. v. Infocon, Inc., 2008 WL 552625 at *2(N.D.Ohio 2008) (same). Were it otherwise, a law firm couldnever represent itself in a fee dispute with a former client.C.f., Trope v. Katz, 11 Cal.4th 274, 280–81, 45 Cal.Rptr.2d241, 902 P.2d 259 (1995) (holding that a law firm that choosesto represent itself in propria persona in a fee dispute witha former client cannot recover attorney's fees incurred inprosecuting the action).

B. ETHICAL DUTIESDeBenedictis next contends that disqualification is necessarybased on Plaintiff's alleged violations of its duties ofloyalty and confidentiality. (Mot. at 7–11.) Both of theseduties emanate from the attorney-client relationship. CobraSolutions, 38 Cal.4th at 846, 43 Cal.Rptr.3d 771, 135 P.3d 20;Cal. Bus. & Prof.Code, § 6068(e) (duty to maintain client'sconfidences); Cal.Rules Prof. Conduct, rule 3–310(C) &(E) (requiring consent to disclose confidential information).The applicability of these duties depends on whether therepresentation is concurrent or successive. This case involvesa successive representation.

1. Duty of LoyaltyThe duty of loyalty precludes an attorney from concurrentlyrepresenting parties with adverse interests. See Flatt,9 Cal.4th at 284, 36 Cal.Rptr.2d 537, 885 P.2d 950(“[t]he primary value at stake in cases of simultaneousor dual representation is the attorney's duty—and theclient's legitimate expectation—of loyalty, rather thanconfidentiality.”). Once the representation ceases, however,the duty of loyalty becomes inapposite. See SpeeDee OilChange, 20 Cal.4th at 1147, 86 Cal.Rptr.2d 816, 980 P.2d371 (danger of violating duty of loyalty ends once therepresentation is terminated); see also Vapneck, Tuft, Peck& Weiner, Cal. Prac. Guide: Professional Responsibility,¶ 5:1015–16 (TRG 2008) (“The attorney's duty of loyaltyto the client prohibits suing a client whom the attorneystill represents. Thus, if a fee dispute arises, the attorneymust withdraw from representing the client[.]”). Given thatDeBenedictis is a former client, he cannot predicate hismotion for disqualification on an alleged breach of the dutyof loyalty.

2. Duty of ConfidentialityUnlike the duty of loyalty, the duty of confidentiality survivesthe termination of the attorney-client relationship. CobraSolutions, 38 Cal.4th at 846, 43 Cal.Rptr.3d 771, 135 P.3d20; Flatt v. Superior Court, 9 Cal.4th 275, 282–284, 36Cal.Rptr.2d 537, 885 P.2d 950 (1994). However, where thedispute involves the former client's breach of its obligationto pay fees, confidentiality is no longer an issue. This ruleis codified in California Evidence Code section 958, whichprovides “[t]here is no privilege under this article as to acommunication relevant to an issue of breach, by the lawyeror by the client, of a duty arising out of the lawyer-clientrelationship.” Cal.Evid.Code § 958 (emphasis added). Underthis provision, an attorney “can reveal confidences ... in a feedispute[.]” Styles v. Mumbert, 164 Cal.App.4th 1163, 1167,79 Cal.Rptr.3d 880 (2008); In re Dimas, LLC, 357 B.R. 563,588 (Bkrtcy.N.D.Cal.2006) (“The general rule is that counselmay reveal confidences where it is necessary to get paid or todefend charges of improper conduct.”) (emphasis added). Therationale for this rule is simple: “It would be unjust to permita client either to accuse his attorney of a breach of duty andto invoke the privilege to prevent the attorney from bringingforth evidence in defense of the charge or to refuse to pay hisattorney's fee and invoke the privilege to defeat the attorney'sclaim.” Cal.Evid.Code § 958, Law Revision CommissionComments, 1967 amendments (emphasis added).

*4 DeBenedictis responds that Evidence Code section 958does not apply to this case because Plaintiff is attemptingto use “confidential” information to prosecute its claims.In support of his argument, DeBenedictis relies on Inre Rindlisbacher, 225 B.R. 180, 183 (9th Cir.BAP1998)(“Rindlisbacher” ), which he contends stands for theproposition that section 958 is inapplicable where the attorneyseeks to use confidential information “as a sword.” (Mot. at13–14.) Rindlisbacher involved an appeal from a bankruptcycourt order granting summary judgment in favor of the debtorin an adversary complaint filed an attorney who representedthe debtor in a separate dissolution action. The attorney hadsought to prevent the debtor from claiming a discharge ofattorney's fees owed by the debtor.

The Bankruptcy Appellate Panel upheld the summaryjudgment ruling on the ground that the attorney wasrelying on confidential information obtained during the priorrepresentation as the basis for his adversary complaint. Id.While recognizing that otherwise privileged information maybe disclosed in a fee collection action, the Panel noted that theexception created by section 958 applies only if the dispute




arises from a breach of the client's duty to pay fees. Id. Thatsituation was not presented, however, because the attorney'sdischarge claim arose entirely from a right created underthe Bankruptcy Code. Id. The Panel explained that since the“the validity of the attorney's fee or the attorney's actions”were not pertinent in evaluating a discharge under bankruptcylaw, “the exception to the confidences rule for disclosure ofcommunications necessary to allow the attorney to collect afee does not apply.” Id.

Rindlisbacher has no application here. The court's holdingwas based specifically on the fact that the attorney's dischargeclaim was based on bankruptcy law, as opposed to aduty to pay fees. In contrast, Plaintiff's claims in thiscase are predicated directly on Defendants' breach of theirduty to pay Plaintiff for its services—the precise scenariowithin the ambit of Evidence Code section 958. Moreover,unlike Rindlisbacher, the information at issue is neitherconfidential nor was it obtained during the course of the priorrepresentation. Rather, DeBenedictis complains that Plaintiffis attempting to use information disclosed during a Rule 26(f)conference conducted in this action as the foundation forseeking to amend its pleadings. (Mot. at 9.) DeBenedictis citesno authority for the notion that a meet and confer conferencebetween counsel or the parties is “confidential.” And evenif there were, the information that DeBenedictis asserts isconfidential (i.e., that Defendants now claim there was noactual fee agreement) is the same information set forth in theparties' Case Management Conference Statement. (See CaseMgt. Stmt. at 3, Docket 45.)

C. OTHER ARGUMENTSDeBenedictis' remaining arguments also fail. In his reply,DeBenedictis argues that an entity that must appear throughcounsel. (Reply at 2.) The Court does not consider argumentsraised for the first time in a reply. See Eberle v. City ofAnaheim, 901 F.2d 814, 818 (9th Cir.1990). In any event,DeBenedictis fails to cite any authority for the propositionthat a law firm cannot represent itself in a dispute overunpaid fees. As noted, California law tacitly recognizes thata law firm may do so. C.f., Trope, 11 Cal.4th at 280–81, 45Cal.Rptr.2d 241, 902 P.2d 259 (assuming without decidingthat a law firm can represent itself in a collection dispute).

*5 DeBenedictis also argues that disqualification is requiredbased on Plaintiff's alleged violation of California Business &Professions Code section 6148. (Mot. at 11–12.) That sectionrequires a written agreement for engagements anticipatedto result in fees exceeding $1,000. Cal. Bus. & Prof.Code

§ 6148(a). Subdivision (c) provides that the “[f]ailure tocomply with any provision of this section renders theagreement voidable at the option of the client, and theattorney shall, upon the agreement being voided, be entitledto collect a reasonable fee.” Cal. Bus. & Prof.Code § 6148(c).DeBenedictis fails to cite, nor is the Court aware of any,authority holding that a violation of section 6148 constitutesgrounds for disqualification.

In sum, the Court finds that DeBenedictis has failed to meetits “heavy burden” of demonstrating that Plaintiff should bedisqualified from representing itself in this action. The Courttherefore DENIES his motion to disqualify Plaintiff's counsel.

III. DEFENDANTS' MOTIONS TO DISMISS

A. FAILURE TO JOIN INDISPENSIBLE PARTYUNDER RULE 12(b)(7) AND RULE 19

A defendant may bring a motion to dismiss under Rule 12(b)(7) for failure to join a indispensible party under Rule 19.To find that an absent party is “indispensable,” the Courtmust first deem the party “necessary” under Rule 19(a)(1).Schnabel v. Lui, 302 F.3d 1023, 1029 (9th Cir.2002). “Indetermining whether a party is ‘necessary’ under Rule 19(a),the court must consider whether ‘complete relief’ can beaccorded among the existing parties, and whether the absentparty has a ‘legally protected interest’ in the subject of thesuit.” Id. (quoting Rule 19(a)). The inquiry is fact specific,and the moving party “has the burden of persuasion in arguingfor dismissal.” Id. For purposes of resolving a Rule 12(b)(7)motion, the court accepts the allegations in the complaint astrue. See is Cos. v. Emerald Casino, Inc., 268 F.3d 477, 479n. 2 (7th Cir.2001).

Edelson and DeBenedictis contend that Global Vision is anecessary party on the grounds that it solely is responsible

for the payment of fees at issue in this case. 2 To supportthat contention, Defendants request the Court to takejudicial notice of the Proof of Claim filed by Plaintiff inGlobal Vision's bankruptcy proceedings, which they contendconstitutes an acknowledgement by Plaintiff “that it had [a]contractual relationship with Global Visions Products, Inc,not [Edelson or DeBenedictis].” (DeBenedictis Opp'n at 3–4;Edelson Opp'n at 5.)

As an initial matter, Defendants cannot at the pleading stagerely on the Proof of Claim to establish the existence of acontractual relationship between Plaintiff and Global Vision.While the Court may take judicial notice that a Proof of Claim




in a bankruptcy proceeding was filed, it is impermissibleto infer from that document that Defendants have no legalobligation to pay for their legal fees. See M/V AmericanQueen v. San Diego Marine Constr. Corp., 708 F.2d 1483,1491 (9th Cir.1983) (a court may take judicial notice of courtrecords, but it may not take judicial notice of the truth of thecontents of all documents found therein); Lovelace v. SoftwareSpectrum, Inc., 78 F.3d 1015, 1018 (5th Cir.1996) (takingjudicial notice of an SEC filing “only for the purpose ofdetermining what statements the documents contain, not toprove the truth of the documents' contents”). In addition, themere fact that Plaintiff filed a claim against Global Visiondoes not ipso facto establish that Global Vision is solelyresponsible for the payment of Defendants' fees.

*6 Perhaps more fundamentally, whether or not Plaintiffhad a contractual relationship with Global Vision is separateand distinct from whether Global Vision is a necessary partyto this action. The amended complaint alleges that “Plaintiffagreed to provide legal services to Edelson and DeBenedictisand defendants agreed to pay plaintiff for those legalservices at plaintiff's regular hourly rates. Defendants, whowere affiliated with Global Vision Products, Inc., instructedplaintiff to address invoices for legal services on behalf ofdefendants to Global Vision Products, Inc.” (Compl. ¶¶ BC–1,BC–2 (emphasis added).) These allegations, which the Courtmust accept as true, demonstrate for purposes of this motionthat the legal services were provided and the correspondingobligation to pay for those services belonged to Defendants,not Global Vision. That Global Vision may also have aseparate obligation to pay does not support the conclusionthat Global Vision must necessarily be joined in this action inorder to provide Plaintiff complete relief or that Global Visionhas a legal protectable interest that must be litigated in this

action. 3 The Court finds no merit to Defendants' contentionthat dismissal of the action is warranted under Rule 12(b)(7) for failure to join Global Vision, and thus, DENIES saidmotions.

B. FAILURE TO STATE A CLAIM UNDER RULE12(B)(6)

1. Standard of ReviewBoth Defendants next argue that Plaintiff's amended

complaint should be dismissed for failure to state a claim. 4

Under Federal Rule of Civil Procedure 12(b)(6), a districtcourt must dismiss a complaint if it fails to state a claim uponwhich relief can be granted. To survive a motion to dismiss,

the plaintiff must allege “enough facts to state a claim torelief that is plausible on its face.” Bell Atl. Corp. v. Twombly,550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).“Specific facts are not necessary; the statement need onlygive the defendant[s] fair notice of what ... the claim is andthe grounds upon which it rests.” Erickson v. Pardus, 551U.S. 89, 127 S.Ct. 2197, 2200, 167 L.Ed.2d 1081 (2007)(internal quotation marks omitted); Ashcroft v. Iqbal, ––– U.S.– – – – , 129 S.Ct. 1937, ––– L.Ed.2d – – – – , 2009 WL1361536 (May 18, 2009); Johnson v. Riverside HealthcareSys. LP, 534 F.3d 1116, 1122 (9th Cir.2008). “In general, theinquiry is limited to the allegations in the complaint, whichare accepted as true and construed in the light most favorableto the plaintiff.” Lazy Y Ranch Ltd. v. Behrens, 546 F.3d 580,588 (9th Cir.2008).

2. First Cause of Action for Breach of ContractDefendants move to dismiss Plaintiff's first cause of actionfor breach of contract. Plaintiff has agreed to dismiss thisclaim. Accordingly, the Court GRANTS Defendants' motionto dismiss Plaintiff's first cause action for breach of contract.

3. Second Cause of Action for Open Book AccountPlaintiff's second cause of action is for open book account.“An open book account is a detailed statement that constitutesthe principal record of the transactions between the creditorand debtor arising out of a contract or fiduciary relationship.The statement details the debits and credits in connectionwith the debtor/creditor relationship.” Cusano v. Klein, 264F.3d 936, 942 n. 2 (9th Cir.2001) (citing Cal.Code Civ.P. §337a). “A common count is proper whenever the plaintiffclaims a sum of money due, either as an indebtedness in a sumcertain, or for the reasonable value of services, goods, etc.,furnished.” Kawasho Int'l, U.S.A. Inc. v. Lakewood Pipe Serv.,Inc., 152 Cal.App.3d 785, 793, 201 Cal.Rptr. 640 (1983)(internal quotations and citation omitted). Plaintiff's claimfor open book account is alleged on a Judicial Council formwhich contains the requisite elements for a claim for openbook account. See Bank of the West v. RMA Lumber Inc.,2008 WL 2474650 at *4 (N.D.Cal.2008) (common countunder California law may be pleaded through use of JudicialCouncil form).

*7 DeBenedictis argues that an open book account claimcannot be stated against him because the invoices were sentto Global Vision. (Mot. at 11.) He again claims that this “factis established” by the Proof of Claim filed by Plaintiff inthe Global Vision bankruptcy. (Id. at 8 (citing DeBenedictis




Request for Judicial Notice, Ex. 3.) As discussed with regardto Defendants' Rule 12(b) (7) motions, given the proceduralposture of this case, the Court only may take judicial noticethat Plaintiff filed a Proof of Claim in the Global Visionbankruptcy proceeding, as opposed to accepting as truethe facts allegedly contained in that document. But evenif the Court were to consider the invoices as evidence,DeBenedictis cites no authority to support the conclusion thatthe mere fact that the invoices were addressed to a third party,standing alone, excuses his obligation to pay Plaintiff for itsservices. The Court therefore DENIES DeBenedictis' motionto dismiss Plaintiff's second cause of action for open bookaccount.

4. Third Cause of Action for Quantum MeruitPlaintiff's third cause of action is for quantum meruit, whichallows attorneys to recover the reasonable value of theirlegal services from their clients when their contractual feearrangements are found to be invalid or unenforceable.Huskinson & Brown v. Wolf, 32 Cal.4th 453, 458, 9Cal.Rptr.3d 693, 84 P.3d 379 (2004). A claim for quantummeruit is subject to a two-year limitations period. SeeCal.Code Civ. Proc. § 339; Iverson, Yoakum, Papiano &Hatch v. Berwald, 76 Cal.App.4th 990, 996, 90 Cal.Rptr.2d665 (1999). A statute of limitations defense may be raised bya motion to dismiss if the running of the limitations period isapparent on the face of the complaint. Jablon v. Dean Witter& Co., 614 F.2d 677, 682 (9th Cir.1980).

DeBenedictis contends that the invoices attached to the Proofof Claim filed in the bankruptcy action show that serviceswere provided to him more than two years ago. As such,he argues that Plaintiff's claim for quantum meruit is time-barred insofar as it seeks recovery for fees for service incurredprior to August 11, 2006. (Mot. at 9.) As before, DeBenedictismay not rely on facts inferred from a document submitted byway of a request for judicial notice. That aside, DeBenedictisprovides no legal authority or analysis establishing whenPlaintiff's claim for quantum meruit accrued for purposesof triggering the statute of limitations. The date a claimaccrued must be determined in order to adjudicate a statuteof limitations defense. See Fox v. Ethicon Endo Surgery,Inc., 35 Cal.App. 4th 797, 806–807 (2005) (limitations periodcommences when claim accrues); see also Jolly v. Eli Lilly& Co., 44 Cal.3d 1103, 1112, 245 Cal.Rptr. 658, 751 P.2d923 (1988) (resolution of a statute of limitations defensenormally is a factual question for the trier of fact). Nor does hedemonstrate that the date of accrual can be gleaned from theface of the amended complaint. See Jablon, 614 F.2d at 682.

Thus, the Court DENIES DeBenedictis' motion to dismissPlaintiff's quantum meruit claim.

C. MOTION TO TRANSFER VENUE UNDER 28U.S.C. § 1406

*8 As an alternative to their motions to dismiss, Edelson andDeBenedictis both move to transfer the action to the SouthernDistrict of New York (where the Global Vision bankruptcy ispending) pursuant to 28 U.S.C. § 1406(a) on the ground that

venue is not proper in this District. 5 This motion is meritless.As Defendants now concede, the law is clear that the removalof an action under section 1441(a) forecloses the removingparty from subsequently claiming that venue is improper.See Hollis v. Florida State Univ., 259 F.3d 1295, 1300 (11thCir.2001) (“as a matter of law, § 1441(a) establishes federalvenue in the district where the state action was pending, and itis immaterial that venue was improper under state law whenthe action was originally filed.”); Robles v. USA Truck, Inc.,2009 WL 677835 at *3 (S.D.Tex.2009) (“[t]his Court findsthat the fact that § 1441(a) establishes venue as a matter oflaw here precludes Defendant's instant Motion to Dismissor Transfer Venue pursuant to § 1406(a) based on impropervenue.”). The Court finds no merit to Defendants' argumentsregarding venue, and therefore, DENIES their alternativerequest to transfer venue to the Southern District of New York.

IV. MOTION FOR LEAVE TO FILE SECONDAMENDED COMPLAINT

A. STANDARD OF REVIEWThe Federal Rules of Civil Procedure provide that leave toamend a complaint should be “freely given when justiceso requires.” Fed.R.Civ.P. 15(a). The decision to grant ordeny a request for leave to amend rests in the discretionof the trial court. See California v. Neville Chem. Co., 358F.3d 661, 673 (9th Cir.2004). In exercising its discretion,however, this Circuit requires that district courts grantleave to amend with “extreme liberality.” Morongo Band ofMission Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir.1990);AmerisourceBergen Corp. v. Dialysist West, Inc., 465 F.3d946, 951 (9th Cir.2006) (“Rule 15(a) is very liberal”). TheNinth Circuit has held that discovery of new facts after acomplaint was filed may warrant granting leave to amend. SeeWittmayer v. United States, 118 F.2d 808, 809 (9th Cir.1941).

The party opposing a motion for leave to amend bears theburden to convincingly demonstrate that a “substantial reasonexists to deny leave to amend.” Shipner v. Eastern Air Lines,




868 F.2d 401, 407 (11th Cir.1989); DCD Programs, Ltd.v. Leighton, 833 F.2d 183, 187 (9th Cir.1987) (the partyopposing amendment carries the burden of showing whyleave to amend should not be granted). In assessing whetherto grant leave to amend, the Court should consider factorssuch as “the presence or absence of undue delay, bad faith,dilatory motive, repeated failure to cure deficiencies byprevious amendments, undue prejudice to the opposing partyand futility of the proposed amendment.” Moore v. KayportPackage Express, 885 F.2d 531, 538 (9th Cir.1989) (emphasisadded).

B. PROPOSED FRAUD CLAIM*9 Plaintiff seeks to file a Second Amended Complaint to

add a fraud cause of action based on information recentlydisclosed during a Rule 26 meet and confer session, i.e.,that Defendants allegedly never intended to honor their priorrepresentation that they would be responsible for paymentof their legal services. (Mot. at 3; Belsky Decl. Ex. A(Proposed Sec. Am. Compl. ¶ 31–38).) To establish a causeof action for fraud, a plaintiff must allege the followingelements: misrepresentation, knowledge of falsity, intent toinduce reliance, justifiable reliance, and resulting damages.Conrad v. Bank of Am., 45 Cal.App.4th 133, 156, 53Cal.Rptr.2d 336 (1996). Fraud claims must be pleaded withparticularity. Federal Rule of Civil Procedure 9(b) requiresthat the pleadings allege the “time, place and content of analleged misrepresentation” and “must set forth what is falseor misleading about a statement, and ... an explanation as towhy the statement or omission complained of was false ormisleading.” Yourish v. Cal. Amplifier, 191 F.3d 983, 993 n.10 (9th Cir.1999).

In a wholly conclusory manner, Defendants contend that

the proposed fraud claim is not pleaded with specificity. 6

(Opp'n at 7–8.) The Court disagrees. The proposed claimidentifies who made the statements, when they were made,that they were intentionally misleading, the reason they werefalse, Plaintiff's reliance on them to its detriment and thedamages incurred. (See Belsky Decl. Ex. A, ¶¶ 31–38.)These allegations are sufficient to satisfy the purpose of theheightened pleading requirements, which is “to ensure thatdefendants accused of the conduct specified have adequatenotice of what they are alleged to have done, so that they maydefend against the accusations.” Concha v. London, 62 F.3d1493, 1502 (9th Cir.1995).

Defendants' remaining arguments in opposition to Plaintiff'smotion for leave to amend fare no better. They argue thatunder Business & Professions Code section 6148, Plaintiffshould have obtained a written fee agreement, and that theironly remedy is a claim for quantum meruit, which they assertis time-barred. (Opp'n at 14.) That argument fails for thereasons stated above. (See supra, § IV.B.4.)

Next, Defendants accuse Plaintiff of using “confidential”information as a basis for its fraud claim. (Opp'n at 6.) Withoutcitation to any authority, they assert that “the meet & conferprocess is akin to a Court Ordered Settlement Conference,”and therefore, any information discussed is subject to theconfidentiality provisions of Federal Rule of Evidence 408(a)

(2). (Id. at 6–7.) 7 That argument misconstrues Rule 26.Rule 26(f) is a device designed to curb discovery abuseswhile fostering cooperating in developing a discovery planfor the action. To that end, the rule provides that “[i]nconferring, the parties must consider the nature and basis oftheir claims and defenses and the possibilities for promptlysettling or resolving the case; make or arrange for thedisclosures required by Rule 26(a)(1); discuss any issuesabout preserving discoverable information; and develop aproposed discovery plan.” Fed.R.Civ.P. 26(a)(1) (emphasisadded). Nothing in Rule 26 supports the conclusion thatinformation exchanged during that process is confidential—nor would such a restriction make sense given the purposeof the rule. Moreover, as noted above, the informationthat DeBenedictis claims is “confidential” is repeated inthe publicly-available Joint Case Management ConferenceStatement. (See Docket 45.)

*10 The remainder of Defendants' opposition centers onPlaintiff's alleged violation of the rules of professionalconduct. Such arguments are identical to those made inDeBenedictis' motion to disqualify Plaintiff's counsel, andappear to be “cut-and-pasted” from that brief. (CompareOpp'n to Mot. to Amend at 9–17 with Opp'n to Mot. toDisqualify Plaintiff's Counsel at 7–16.) In any event, noneof Defendants' contentions, which are analyzed supra, isgermane to any of the relevant considerations under Rule 15.See Moore, 885 F.2d at 538.

In sum, the Court concludes that Defendants have failed tomeet their burden of demonstrating that leave to amend is notwarranted under the liberal standard applicable to Rule 15(a)motions. The Court therefore GRANTS Plaintiff's motion for

leave to file a Second Amended Complaint. 8




V. CONCLUSIONIT IS HEREBY ORDERED THAT:

1. Defendant DeBenedictis' Motion to Disqualify Plaintiff'sCounsel [Docket 52] is DENIED.

2. Defendants DeBenedictis and Edelson's individual Motionsto Dismiss Plaintiff's Amended Complaint FRCP 12(b)(6),FRCP 12(b)(7) or in the Alternative to Transfer the Actionto the Southern District of New York [Docket 32, 33] areDENIED.

3. Plaintiff's Motion for Leave to File a Second AmendedComplaint [Docket 46] is GRANTED. DeBenedictis'objection to evidence submitted in support of Plaintiff'smotion to amend [Docket 60] is OVERRULED as moot.Plaintiff shall file its proposed Second Amended Complaintwithin five (5) court days of the filing of this Order.

4. The Case Management Conference currently scheduled forMay 12, 2009 is CONTINUED to June 10, 2009 at 3:45 p.m.The parties shall meet and confer prior to the conference andshall prepare a joint Case Management Conference Statementwhich shall be filed no later than ten (10) days prior tothe Case Management Conference that complies with theStanding Order for All Judges of the Northern District ofCalifornia and the Standing Order of this Court. Plaintiff shallbe responsible for filing the statement as well as for arrangingthe conference call. All parties shall be on the line and shallcall (510) 637–3559 at the above indicated date and time.

IT IS SO ORDERED.

All Citations

Not Reported in F.Supp.2d, 2009 WL 1505284

Footnotes

1 Motions to disqualify counsel are decided under state law. In re County of Los Angeles, 223 F.3d 990, 995(9th Cir.2000).

2 Global Vision cannot be joined as a result of its bankruptcy filing in the Southern District of New York.3 In his reply, DeBenedictis argues that Plaintiff violated California Rule of Professional Conduct 3–310(F)

by accepting payment from a third party without written consent from the client. (DeBenedictis Reply at 2.)Whether that is correct does not bear upon the salient issue of whether Global Vision is a necessary andindispensible party.

4 Edeleson's motion to dismiss addresses Plaintiff's first cause of action only.5 Section 1406(a) provides that: “The district court of a district in which is filed a case laying venue in the wrong

division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or divisionin which it could have been brought.”

6 Though only DeBenedictis filed an opposition brief, Edelson filed a joinder in said opposition. [Docket 68.]7 Section 408(a)(2) precludes the admissibility of evidence in certain cases obtained during the course of

settlement discussions.8 DeBenedictis filed an objection to paragraph 10 of the Declaration of Adam Belsky. [Docket 60.] Because the

Court's decision on Plaintiff's motion to amend does not rely or refer to that section of Mr. Belsky's declaration,DeBenedictis' objection is overruled as moot.



Exhibit 3


Wolff v. Chrysler Group LLC, Not Reported in Fed. Supp. (2010)



United States District Court, C.D. California.

Bradley E. WOLFFv.

CHRYSLER GROUP LLC, et al.

Case No. EDCV 10–34 PA (DTBx)|

Filed 02/22/2010


Caronna Johnson & Hoddick LLP, Rancho Mirage, CA, LilysDoris McCoy, McCoy Turnage and Robertson LLP, SanDiego, CA, for Bradley E. Wolff.

Matthew M. Proudfoot, Gates O'Doherty Gonter & Guy LLP,Irvine, CA, for Chrysler Group LLC, et al.

Proceedings: IN CHAMBERS

PERCY ANDERSON, UNITED STATES DISTRICTJUDGE

*1 Before the Court is a motion to transfer venue (“Motion”)filed by defendant Chrysler Group LLC (“Defendant”).(Docket Nos. 11, 13, 14.) Pursuant to Rule 78 of the FederalRules of Civil Procedure and Local Rule 7–15, the Courtfinds that this matter is appropriate for decision without oralargument. The hearing scheduled for February 22, 2010, isvacated, and the matter taken off calendar.

This action arises out of an earlier lawsuit filed byplaintiff Bradley Wolff (“Plaintiff”) against DaimlerChryslerCorporation (“Wolff I”). On April 14, 2006, Plaintiff fileda complaint against DaimlerChrysler in the Superior Courtof Riverside County, alleging violations of the Song–BeverlyConsumer Warranty Act and the Magnuson–Moss WarrantyAct based on allegations that the 2004 Dodge Ram truck thatPlaintiff purchased had “serious defects.” DaimlerChryslerlater converted to a limited liability company and changed itsname to Chrysler LLC.

Plaintiff alleges that on April 15, 2009, Chrysler LLC sentPlaintiff a draft settlement agreement which offered Plaintiff$16,000 plus reasonable costs and attorney's fees, for the

settlement of his claims. Plaintiff signed the agreement andreturned it to Chrysler LLC on April 21, 2009. The agreementwas not subsequently executed by Chrysler LLC, and Plaintiffwas never paid the settlement amount.

On April 30, 2009, Chrysler LLC filed for bankruptcyprotection in the United States Bankruptcy Court in theSouthern District of New York. On May 14, 2009, Plaintifffiled a proof of claim with the Bankruptcy Court, allegingthat Chrysler LLC owed him $165,303.94 for an “unpaidsettlement.” On June 1, 2009, the Bankruptcy Court enteredan “Order (I) Authorizing the Sale of Substantially All of theDebtors' Assets Free and Clear of All Liens, Claims, Interestsand Encumbrances, (II) Authorizing the Assumption andAssignment of Certain Executory Contracts and UnexpiredLeases in Connection Therewith And Related Proceduresand (III) Granting Related Relief” (the “Sale Order”).(Request for Judicial Notice, Ex. B.) In the Sale Order,the Bankruptcy Court held that the purchasers of ChryslerLLC's assets, Fiat and Chrysler Group LLC, would not haveany liability for any claims that arose prior to the ClosingDate ....” (Request for Judicial Notice, Ex. B at p. 40.)However, the Sale Order provided that Fiat and ChryslerGroup LLC would “recognize, honor and pay liabilities underLemon Laws for additional repairs, refunds ... or replacementof a defective vehicle ... under such Lemon Laws ... onvehicles manufactured by [Chrysler LLC] in the five yearsprior to the Closing.” (Request for Judicial Notice, Ex. B atp. 31.) The Bankruptcy Court expressly retained jurisdictionto “interpret, enforce and implement the terms and provisionsof this Sale Order and the Purchase Agreement ... [and] toadjudicate disputes related to this Sale Order and the PurchaseAgreement.” (Request for Judicial Notice, Ex. B at p. 43.)

On December 3, 2009, Plaintiff voluntarily dismissed theWolff I action with prejudice. The following day, Plaintifffiled a complaint against Chrysler Group LLC (“Defendant”)in Riverside County Superior Court, alleging claims forbreach of contract and promissory estoppel based onDefendant's failure to pay Plaintiff in accordance with theterms of the settlement agreement. Defendant removed theaction to this Court on January 8, 2010, alleging that thisCourt has jurisdiction over this matter under 28 U.S.C. §1334(b) because this action arises under and is related to theongoing bankruptcy proceeding in the Bankruptcy Court inthe Southern District of New York. Now, Defendant movesto transfer this action to the United States Bankruptcy Courtin the Southern District of New York, pursuant to 28 U.S.C.§ 1412.




*2 As a preliminary matter, Defendant has filed a Requestfor the Court to take judicial notice of Plaintiff's two statecourt complaints, the proof of claim filed by Plaintiff in theBankruptcy Court, and the Sale Order. Defendant's Requestfor Judicial Notice is granted.

Given that Plaintiff has not filed any opposition toDefendant's Motion to Transfer Venue, Defendant's Motion isalso granted. See Local Rule 7–12 (“The failure to file anyrequired paper, or the failure to file it within the deadline, maybe deemed consent to the granting or denial of the motion.”).Moreover, as discussed below, Defendant's Motion succeedson the merits.

Section 1412 of Title 28 of the United States Code providesthat “[a] district court may transfer a case or proceedingunder Title 11 to a district court for another district, in theinterest of justice and for the convenience of the parties.” Thefactors to be considered when deciding whether to transfera case in the interest of justice include: “the economicsof estate administration, the presumption in favor of the‘home court,’ judicial efficiency, the ability to receive afair trial, the state's interest in having local controversiesdecided within its borders by those familiar with its laws,the enforceability of the judgment, and plaintiff's originalchoice of forum.” Senorx, Inc. v. Coudert Bros., LLP, 2007U.S. Dist. LEXIS 66065, 2007 WL 2470125, *1 (N.D.Cal.2007). The “home court” is the bankruptcy court in which thedebtor's case is pending, and is presumed to be the appropriatedistrict for hearing and determination of a proceeding inbankruptcy. Id.; In re Lionel Corp., 24 Bankr. 141, 143(Bankr. S.D.N.Y. 1982). The most important considerationis whether the transfer would promote the economic andefficient administration of the estate. Id.

Here, Defendant seeks the transfer of this case in theinterest of justice. Defendant asserts that transferring thisaction to the Bankruptcy Court in the Southern Districtof New York would promote the economic and efficientadministration of the estate because the Bankruptcy Courthas already entered an order specifically outlining whichliabilities have been assumed by Defendant, and has retainedjurisdiction to interpret, enforce, and implement the termsof that order. In addition, Defendant contends, transferringthis case will promote judicial efficiency because only onecourt, the Bankruptcy Court in the Southern District ofNew York, will interpret and apply its own order, thereby

resulting in consistent adjudications. Further, Defendantasserts, transferring this case will ensure fairness because it ismore likely that the Sale Order will be interpreted and appliedas the Bankruptcy Court intended.

The Court agrees that this action should be transferredto the Southern District of New York in the interest ofjustice. Several factors support the transfer of this case.First, the Bankruptcy Court is the “home court.” As such,a presumption exists that it is the appropriate district forhearing this case. Second, the Bankruptcy Court explicitlyretained jurisdiction over matters relating to the Sale Order.Thus, transferring this action to the Bankruptcy Court isappropriate because Plaintiff's allegations are specificallybased on Defendant's obligations as set forth in the Sale Order.Third, transferring this action to the Bankruptcy Court wouldpromote efficient estate administration because Plaintiff'sclaims could possibly affect the handling and administrationof the bankruptcy estate. Fourth, the issues raised in thecurrent action have likely been raised already or will be raisedin the future with regard to the Chrysler LLC bankruptcy.As such, it would be more efficient to have all such issuesaddressed by a single court. Fifth, judicial efficiency will beserved by administering all claims against the estate in thesame forum.

*3 Although the Court recognizes that Plaintiff's choiceof forum should be considered here as well, Plaintiff didnot file any Opposition to Defendant's Motion and hasalready submitted a proof of claim to the Bankruptcy Court.The consideration afforded to Plaintiff's choice of forum isoutweighed here by the substantial efficiencies that wouldbe gained by permitting the Bankruptcy Court to address themerits of this case.

Accordingly, the Court grants Defendant's Motion and ordersthis action, CV 10–34 PA (DTBx), transferred to the UnitedStates Bankruptcy Court for the Southern District of NewYork pursuant to 28 U.S.C. § 1412. Defendant's Motion toDismiss (Docket No. 15), currently set for hearing on March22, 2010, is denied without prejudice to renewal before thetransferee court.

IT IS SO ORDERED.

All Citations

Not Reported in Fed. Supp., 2010 WL 11515256


This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California.

June 2012 F 9013-3.1.PROOF.SERVICE EAST\182030648.1

PROOF OF SERVICE OF DOCUMENT

I am over the age of 18 and not a party to this bankruptcy case or adversary proceeding. My business address is: DLA Piper LLP (US)

2000 Avenue of the Stars, Suite 400 North Tower Los Angeles, CA 90067-4704

A true and correct copy of the foregoing document entitled Request for Judicial Notice in Support of the Trustee’s Opposition to Defendants Universal Leader Investment Limited, Glove Assets Investment Limited, and Truly Great Global Limited’s Motion to Dismiss Counts I, II, VI, VII, VIII, IX & X, and Motion to Strike Counts VIII & IX of Amended Complaint; the Trustee’s Opposition to Defendant Li Qi’s Motion to Dismiss Counts I, II, VII, VIII, and IX of Amended Adversary Complaint; and the Trustee’s Motion for Limited Jurisdictional Discovery will be served or was served (a) on the judge in chambers in the form and manner required by LBR 5005-2(d); and (b) in the manner stated below:

1. TO BE SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING (NEF): Pursuant to controlling General Orders and LBR, the foregoing document will be served by the court via NEF and hyperlink to the document. On June 3, 2021, I checked the CM/ECF docket for this bankruptcy case or adversary proceeding and determined that the following persons are on the Electronic Mail Notice List to receive NEF transmission at the email addresses stated below: Aaron S. Craig [email protected]; [email protected] United States Trustee [email protected] Matthew S. Walker [email protected];

[email protected]; [email protected]

Scott H. Olson [email protected]; [email protected]; [email protected]; [email protected]

☐ Service information continued on attached page

2. SERVED BY UNITED STATES MAIL: On June 3, 2021, I served the following persons and/or entities at the last known addresses in this bankruptcy case or adversary proceeding by placing a true and correct copy thereof in a sealed envelope in the United States mail, first class, postage prepaid, and addressed as follows. Listing the judge here constitutes a declaration that mailing to the judge will be completed no later than 24 hours after the document is filed.

☐ Service information continued on attached page

3. SERVED BY PERSONAL DELIVERY, OVERNIGHT MAIL, FACSIMILE TRANSMISSION OR EMAIL (state method for each person or entity served): Pursuant to F.R.Civ.P. 5 and/or controlling LBR, on June 3, 2021, I served the following persons and/or entities by personal delivery, overnight mail service, or (for those who consented in writing to such service method), by facsimile transmission and/or email as follows. Listing the judge here constitutes a declaration that personal delivery on, or overnight mail to, the judge will be completed no later than 24 hours after the document is filed.

VIA HAND DELIVERY

VIA ELECTRONIC MAIL

(Party, who is being served if different, and email address for each)

☒ Service information continued on attached page

Case 2:19-ap-01383-SK Doc 262-2 Filed 06/03/21 Entered 06/03/21 16:47:44 DescProof of Service Page 1 of 3



I declare under penalty of perjury under the laws of the United States that the foregoing is true and correct.

June 3, 2021 William L. Countryman, Jr. /s/ William L. Countryman, Jr.Date Printed Name Signature




Service via Electronic Mail

Li Qi, Truly Great Global, Ltd., Universal Leader Investment Ltd., and Glove Assets Investment Ltd.

Attn.: Michael L. Bernstein Email: [email protected]

Attn.: Charles A. Malloy Email: [email protected]

Attn.: Lisa Hill Fenning Email: [email protected]

Yuntian 3 Leasing Company Designated Activity Company f/k/a Yuntian 3 Leasing Company Limited, Yuntian 4 Leasing Company Designated Activity Company f/k/a Yuntian 4 Leasing Company Limited and Minsheng Business Aviation Limited

Attn.: Dan T. Moss Email: [email protected]

Attn.: Joshua M. Mester Email: [email protected]

Attn.: David S. Torborg Email: [email protected]

United States Trustee

Attn.: Dare Law Email: [email protected]

Attn.: Ron Maroko Email: [email protected]

Attn.: Jill Sturtevant Email: [email protected]

Attn.: Peter C. Anderson Email: [email protected]

Export Development Canada Limited

Attn.: Scott H. Olson Email: [email protected]

Attn.: Michael J. Edelman Email: [email protected]

Service via Mail

Minsheng Financial Leasing Co., Ltd.

Floor 3-6, Distinguished Guest Building Beijing Friendship Hotel One South Zhongguancun Street HaidianHaidian District Beijing, 100873

and

Zhongguancun South Street Beijing Friendship Hotel Guest House 1 2-6 Beijing, 100873


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