Rene Marentes vs. Impac Mortgage Holdings, Inc.

Motion to Bifurcate

Cal. Super. - 4th Dist.April 30, 2012

11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Rutan & Tucker, LLP attorneys at law ELECTRONICALLY FILED Superior Court of Califomnia, County of Orange 03/10/2017 at 02:03:00 PM RUTAN & TUCKER, LLP Clerk of the Superior Court Michael T. Hornak (State Bar No. 81936) By Olga Lopez, Deputy Clerk mhornak@rutan.com Lucas K. Hori (State Bar No. 294373) lhori@rutan.com 611 Anton Boulevard, Suite 1400 Costa Mesa, California 92626-1931 Telephone: 714-641-5100 Facsimile: 714-546-9035 Attorneys for Defendant Impac Funding Corporation SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF ORANGE, CENTRAL JUSTICE CENTER RENE MARENTES and MARTHA Case No. 30-2012-00565615-CU-BT-CXC MARENTES, Husband and Wife, on Behalf of Themselves, and All Others Similarly Situated, | ASSIGNED FOR ALL PURPOSES TO: THE HONORABLE KIM G. DUNNING Plaintiffs, DEPARTMENT CX104 Vs. DEFENDANT IMPAC FUNDING IMPAC MORTGAGE HOLDINGS, INC; CORPORATION’S NOTICE OF MOTION IMPAC FUNDING CORPORATION; and AND MOTION TO BIFURCATE DOES 1 through 100 inclusive, RESTITUTIONARY ISSUE; MEMORANDUM OF POINTS AND Defendant. AUTHORITIES IN SUPPORT THEREOF; DECLARATION OF MICHAEL T. HORNAK (Filed concurrently with Request for Judicial Notice; [Proposed] Order.) Date: April 5,2017 Time: 1:30 p.m. Dept... CX104 Date Action Filed: July 25,2012 Trial Date: October 16, 2017 /1/ /11 -1- Se -_-- DEFENDANT IMPAC FUNDING CORPORATION'S 10562222.7 a03/10/17 MOTION TO BIFURCATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 Rutan & Tucker, LLP attorneys at law NOTICE OF MOTION AND MOTION I. INTRODUCTION IL RELEVANT FACTUAL BACKGROUND A. Plaintiffs’ Single Equitable UCL Claim Will Be Tried In a Bench TELE] vs oro spss npsumarsspne gupenmmsmmmemnsen ssn mmmnanss seman mod aban Tinh 5 ES STENTS 255.58 B. The Parties’ Views On The Proper Restitutionary Measure Differ WEBSHIY 1oocommom momma ics vis 6.60 sds 635054305 536 3S RF SVS HS PNAS OS ERTS EES C. Plaintiffs Agree That Resolving the Restitutionary Issue Before a Full Merits Trial Would Maximize Efficiency and Facilitate a Potential Resolution. « cs mwsmusmems mss somssvsmsssos sammmss casas sass D. Plaintiffs Refuse to Stipulate to Restitutionary Briefing.........ccccevvvvivinnnine 11. THE COURT SHOULD BIFURCATE AND HEAR FIRST THE RESTITUTTONARY ISSUE. coon cans sneinias i 5250005850880 0080458 4505535555 S50AE38 R555 9555 A. The Restitutionary Issue Raises A Legal Question, Making Bi ETP IPI 5500600 sts is srs Al DEAR B. Bifurcating the Restitutionary Issue Will Serve the Purposes of Code of Civil Procedure sections 1048 and 598.......ccccccoivnvviiiiiiniiniinnin, Cs Plaintiffs Have Already Agreed that Bifurcating the Restitutionary IV. CONCLUSION 2610/018887-0021 10562222.7 a03/10/17 TABLE OF CONTENTS Issue Would Encourage Settlement and Enhance Efficiency ..........c.......... -1- DEFENDANT IMPAC FUNDING CORPORATION’S MOTION TO BIFURCATE 0 0a Eca 0s 00 er est 00890808000 E000560090808008s8u000000T00PE0CE0eTPa0000IDeT OS os seen tenes cee sot 808 0c e Ee 0s ese snes eon Ee e08 a 000s Ee0st0c0e08I00000 8808 E0000 E0P00T000T000VDURNO0C es 0 ea es 6 ee Ease rsa e een snot est eae 00a elo esr an tar eet ee eaeett tt or ese 0s oeet et eR te RN sob O NN RN ONE 1 TABLE OF AUTHORITIES 2 Page(s) 3 | FEDERAL CASES 4 | Angelo v. Armstrong World Indus. (10th Cir. 1993) 5 LE TB, OT tonics tessa msn 0 03505550 ES GS 45 ASB AES 14 6 Simon v. Philip Morris (E.D.N.Y. 2001) 200 FLRUD. 21 oie teeters sree esa eta e sees see te shee sate nse see sme e sees eb teste abe ene e nna nseeneeentens 14 7 CALIFORNIA CASES 8 County of Los Angeles v. Southern Cal. Edison Co. (2003) 9 112 Cal APDPATh TT08 oh sre seen ene es 13 101 pills v. Delira Corp. (1956) 1 VAT CHL ADR. 128: uss momesssscsssssnn omission Sams SROs 14 12 Feitelberg v. Credit Suisse First Boston, LLC (2005) 134 CalLAPD.ATN 997 o.oo erecta neers 9 13 Grappo v. Coventry Fin. Corp. (1991) 14 235 CAL APIA BOB ....no nomen obomsmos omni 55.5550 457508 60 5355644 SHS 85 8,12, 14,15 15 || Horton v. Jones (1972) 16 26 CalLAPD.3A 952 eee sneer 14 17 In re Marriage of Wolfe (1985) V7 CAL ADD.BA BR. conmcomcenhmmorncmomfios 15555155 005555805575 08 0850 SASF BR SS SAB EA 15 18 In re Tobacco Cases II (2015) 19 240 Cal. APDP.ATH 779 coerce eee see seers eas 10, 13 20 | Metro. Water Dist. v. Imperial Irrigation Dist. (2000) 5 80 Cal. APP. Ath T403 «oie 13 2 Nelson v. Pearson Ford Co. (2010) TBE: C281 A555 ZT "DPB ceremony esos 5 EARS AT 13 29 Olsen v. Cohen (2003) 24 106 Cal. APPA 1209 ..eieiiiieceee erste ese esearch saesneeesaeen 13 25 || People v. First Fed. Credit Corp. (2002) 6 TDA Call ADT TEL «cis mins sass soins i 0450 Ni 9 5 AHA 58505 STRAT EOS obi 9 Royal Surplus Lines Ins. Co. v. Ranger Ins. Co. (2002) 2717 100 CALADPD-AN 193 weoovroreeeeeoeeeoeeseeeeeeeeeesseesseseese sser sess sees sens s sere esees ss ssen ess n 12 28 Rutan & Tucker, LLP s2= attorneys at law SE HO/TB85 T0021 DEFENDANT IMPAC FUNDING CORPORATION'S 10562222.7 03/10/17 MOTION TO BIFURCATE aN S O 3 O Y Wn 1 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Rutan & Tucker, LLP attorneys af law Page(s) CALIFORNIA CASES (CONT) Walton v. Walton (1995) 81, -Cal ABAD TFT cosmsunsssosisss ssmsnsssemsmmsnsem masses sa ASAE ETE 13 Williamson v. Plant Insulation Co. (1994) 23 CalLAPP.ALH 1400 eevee eects seers 14 FEDERAL STATUTES Federal Rules of Civil Procedure RULE 4 oes eee eee eae sarees eases aaa a aaa tae e eta tue ttt tr tt ear ar eet tterareraneres 14 CALIFORNIA STATUTES Business & Professions Code SOHN 17200, BE SB. avoenemsnenesimumonsaonnmonnmennssih insnessnsn mms 58 555550 nm is S465 ET C85 TT i AH 8 FIR AFHDS 6,7 Civil Code SECHOM 2944.7 cnet eee eee e eect eee este e eases eae eee sabe e ease ereae ee sssnaeeesasbaasaeeersnaeee sans 8,9, 10 Code of Civil Procedure SECHION 598... eects eee eee eee serene sees 6,7,12,13,14, 15,16 SECHION L048... eerie eects reese eee es ebeeebeesba essere senna ean 6,7,12,13,14,15,16 SECHION TOAB(Q) 1.uveievieeieeeie etter eee settee seater steers seers sree 14 SECTION 10481) 1. e sete beset sence beeen sheen tebe beens esas 12 Evidence Code Tre 8 (0) NC I LO JOOP PSP OPPO PPPOPIN 13 SECTION 32001. ctteiiiiireitr ieee ects eset esta ee sees esta esate esas ees bt bebe etre seen ee etree shee essa eee nate seat eesabe eee saees 12 TREATISES WEIL AND BROWN, California Practice Guide: Civil Procedure Before Trial, § 12:348 (RUtter Group 2016) .c.cevuuiireieieiiiieeie eer e eeri stirs san sees 14 8 SEBO DEFENDANT IMPAC FUNDING CORPORATION'S 10562222.7 a03/10/17 MOTION TO BIFURCATE 10 11 12 13 14 15 16 17 18 19 20 21 2 23 24 25 26 27 28 Rutan & Tucker, LLP attorneys af law NOTICE OF MOTION AND MOTION TO ALL PARTIES AND TO THEIR ATTORNEYS OF RECORD: NOTICE IS HEREBY GIVEN that on April 5, 2017 at 1:30 p.m., or as soon thereafter as the matter may be heard by the Honorable Kim G. Dunning in Department CX104 of the above- referenced Court located at 751 W. Santa Ana Blvd., Santa Ana, California, defendant Impac Funding Corporation (“Impac”) will, and hereby does, move the Court for an order bifurcating, and trying first, the issue of the appropriate measure of restitution if liability is proven in this case. Specifically, Impac seeks an order bifurcating and trying first the following issue (the “Restitutionary Issue”): Is the proper measure of restitution in this action - in the event the Court determines upon completion of trial that any monetary relief is proper - (1) a full refund of modification fees allegedly collected prematurely; or (2) the “time value” of fees for the period between (a) the payment of the given fees; and (b) the time those fees were lawfully collectable by Impac? This Motion is made pursuant to Code of Civil Procedure sections 1048 and 598, Evidence Code sections 310 and 320, and the Court’s inherent power and authority to direct the order of proof to expedite resolution of matters before it. This Motion is made on the grounds that: (1) The Restitutionary Issue is almost purely a question of law, and not dependent on disputed facts; (2) The Restitutionary Issue is the principal reason this case has not been resolved after nearly five years of litigation, constituting the $8,000,000 “gorilla” whose failure to resolve prevents the parties from mutually and adequately assessing exposure and settlement value; 3) Resolution of the Restitutionary Issue can be accomplished through stipulated facts or matters upon which the court may take judicial notice or, at most, one hour of testimony to authenticate the relevant documents reflecting Plaintiffs’ payment of modification fees and completion of loan modifications; | 4) Resolution of the Restitutionary Issue, a contentious and economically significant issue in the case, will allow both sides to engage in a realistic assessment of exposure, which will be conducive to ultimate resolution of the dispute before expending further judicial resources; Il] 4- 2610/018887-0021 DEFENDANT IMPAC FUNDING CORPORATION’S 10562222.7 a03/10/17 MOTION TO BIFURCATE 10 1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Rutan & Tucker, LLP attorneys at law (5) Even if (albeit unanticipated) Resolution of the Restitutionary Issue does not result in settlement, its resolution has the propensity to reduce remaining trial time, otherwise estimated by Impac as approximately ten days, and will otherwise arm the parties with clarity as to how the remaining discovery, pre-trial, and litigation should be conducted; (6) Resolution of the Restitutionary Issue before a determination of liability or a factually intensive assessment of Impac’s right, against the individual class members, to receive under equitable principles an offset for all the benefits provided to Plaintiffs Rene and Martha Marentes (“Plaintiffs”), will be conducive to expedition and economy, and will save the Court and the parties time and money in discovery, trial preparation, and trial; ©) The bifurcation requested is consistent with the goals of case management, under Section IV of the Orange County Superior Court, Civil Complex Guidelines, to “bring about a just resolution as speedily and economically as possible” and to be “tailored to the needs of the particular litigation.” Bifurcation is also consistent with state and federal case law recognizing the value in cases such as this in trying “damages” issues first; and (8) No prejudice to either the Plaintiff class or Impac results from bifurcation. This Motion is based on this Notice of Motion and Motion, the concurrently filed Memorandum of Points and Authorities, Declaration of Michael T. Hornak (and exhibits attached thereto), Request for Judicial Notice, and [Proposed] Order, and the records, pleadings, and papers filed in this action, and such other evidence or argument as may be presented at hearing. Dated: March 10,2017 RUTAN & TUCKER, LLP MICHAEL T. HORNAK LUCAS K. HORI By: /s/ Michael T. Hornak Michael T. Hornak Attorneys for Defendant IMPAC FUNDING CORPORATION -5- 2610/018887-0021 DEFENDANT IMPAC FUNDING CORPORATION'S 10562222.7 a03/10/17 MOTION TO BIFURCATE ~N Oy 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 Rutan & Tucker, LLP aftorneys at law MEMORANDUM OF POINTS AND AUTHORITIES L INTRODUCTION. This case has been pending for nearly five years. Plaintiffs Rene and Martha Marentes (“Plaintiffs”) filed their Complaint on April 30, 2012. In the interim, the parties have progressed nowhere toward resolution. A bench trial is set for October 2017. Although the parties have agreed on the language of class notice, Plaintiffs have not yet sought approval to proceed with notice, and now desire to take multiple depositions. To streamline trial and pre-trial proceedings, preserve resources, and facilitate a potential settlement, Impac Funding Corporation (“Impac”) respectfully requests that a key issue related to the proper measure of restitution be bifurcated-and tried first- pursuant to Code of Civil Procedure sections 1048 and 598. A significant reason for the impasse between Plaintiffs and Impac is their vastly different views about the proper measure of restitution if liability is proven. Plaintiffs allege that Impac violated California’s Unfair Competition Law, Business & Professions Code section 17200, et seq. (the “UCL”) by prematurely collecting compensation in connection with mortgage loan modifications. Even if liability is shown (which Impac does not in any way concede by filing this Motion), Impac asserts that class members will be entitled at best to a recovery of the de minimis “time value” of money for the fees charged for the period between (1) the payment of the given fees, and (2) the time that Impac was lawfully entitled to collect the fees for services performed. Plaintiffs, having initially argued for this same “time value” of money, even on appeal in this action, now contend that class members are due a full refund of the amount of any fees they paid to Impac. There is a huge monetary difference between these two proposed measures. In their motion for class certification, Plaintiffs claimed $8,428,587 in restitution on a class-wide basis based on a “full refund” theory. (Section I1.B, infra.) Impac, conversely, asserts that the class representatives lost at most an average of 73 cents in “time value” per loan modification. (/bid.) Any restitutionary award must be calculated separately for each class member. Nonetheless, using the class representatives’ 73 cent measure as an average and accepting (though not conceding) Plaintiffs’ estimate that 4,978 loan modification are at issue, Impac’s “worst case” exposure is $3,634 111 -6- 2610/018887-0021 DEFENDANT IMPAC FUNDING CORPORATION'S 10562222.7 a03/10/17 MOTION TO BIFURCATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Rutan & Tucker, LLP attorneys af law presuming liability is proven. (/bid.) The difference between Plaintiffs and Impac’s valuation of the case is thus well over $8,000,000. To date, this discrepancy has hindered settlement. Impac therefore seeks the opportunity, prior to a full-blown trial and after distribution of class notice, to obtain an early bifurcated trial and ruling on the proper measure of restitution in the event liability is ultimately proven. Plaintiffs earlier agreed, including through joint statements filed with this Court, that obtaining such a ruling would be desirable. (Section II.C, infra.) And pursuant to the parties’ joint representations, the Court stated at both the October 12, 2016 and January 18, 2017 Status Conferences that it would be willing to adjudicate restitutionary issues pursuant to an appropriately-framed stipulation. (/bid.) Impac went to some length to provide Plaintiffs with a mutually agreeable stipulation. (Section I1.D, infra.) Plaintiffs, however, got “cold feet” and refused to move forward, perhaps realizing the legal weakness of their position (as Plaintiffs, in essence, are seeking monetary relief equivalent to rescission without offering to return any of the benefits obtained from Impac’s performance, which is not an available remedy under the UCL). (/bid.) Despite Plaintiffs’ reluctance, the fact remains that bifurcating legal issues related to the proper restitution measure (1) will be conducive to facilitating settlement, and (2) even if resolution is not reached, will streamline the trial that will proceed before the Court. Accordingly, Impac seeks an order pursuant to Code of Civil Procedure sections 1048 and 598 bifurcating and giving priority to the following legal issue (the “Restitutionary Issue”), which Impac believes can be tried post haste, principally through briefing: Is the proper measure of restitution in this action - in the event the Court determines upon completion of trial that any monetary relief is proper - (1) a full refund of modification fees allegedly collected prematurely; or (2) the “time value” of fees for the period between (a) the payment of the given fees; and (b) the time those fees were lawfully collectable by Impac? As explained further below, bifurcating this issue is supported by case law and substantial authorities and serves the purposes ofi Code of Civil Procedure sections 1048 and 598. (Sections IT1.A; IIIB, infra.) Impac anticipates that obtaining a ruling on the Restitutionary Issue will provide the parties with mutual information to foster resolution of this action. Even if it does not result in resolution, bifurcation will allow the parties to appropriately value this case. It also has “T= 2610/018887-0021 DEFENDANT IMPAC FUNDING CORPORATION'S 10562222.7 a03/10/17 MOTION TO BIFURCATE xX 3 O N Lh w Oo 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Rutan & Tucker, LLP atforneys at law the propensity to shorten trial time and focus the parties on the remaining issues in dispute. Should the Court determine that the proper restitutionary measure is the “time value” of money, the Court’s ruling on the Restitutionary Issue may spare the parties from engaging in extensive discovery, trial preparation, and trial as though millions of dollars were at stake, when the available restitution may be less than $5,000. On the other hand, should the Court determine the proper Restitutionary Issues is a “full refund,” Impac and Plaintiffs would focus the trial on liability issues and equitable offset issues, knowing the Court’s decision on the Restitutionary Issue. Bifurcation is in the best interests of the parties and the Court. Absolutely no prejudice to Plaintiffs or the Plaintiff class can result from bifurcation. Bifurcation is consistent with the goal of this Court’s Civil Complex Guidelines, Section IV, to “bring about a just resolution as speedily and economically as possible” through case management tailored to the needs of this litigation. Impac asks that the Court exercise its substantial discretion (see., e.g., Grappo v. Coventry Fin. Corp. (1991) 235 Cal.App.3d 496, 504), to bifurcate the Restitutionary Issue for a trial to be had as soon as possible after the period for class members to opt out has elapsed. Consistent with the Court’s Minute Order requesting a briefing schedule, Impac suggests that the parties simultaneously file briefs regarding the Restitutionary Issues twenty days before the bifurcated trial. Although Impac believes the parties will be able to stipulate to any facts relevant to the Restitutionary Issue, out of an abundance of caution Impac seeks the right at trial of the Restitutionary Issue to produce one or more witnesses for up to one hour of combined testimony, should the parties be unable to reach an appropriate stipulation regarding undisputed facts. IL. RELEVANT FACTUAL BACKGROUND. A. Plaintiffs’ Single Equitable UCL Claim Will Be Tried In a Bench Trial. Through their First Amended Complaint (the “FAC”), Plantiffs, on behalf of a plaintiff class, allege a single cause of action against Impac for violation of the UCL. (Request for Judicial Notice (“RIN™), Ex. 1.) Plaintiffs assert that Impac violated Civil Code section 2944.7 by improperly collecting certain fees in connection with loan modification services before consumers received a fully-executed loan modification agreement. (/d. at 945-60.) Impac disputes Plaintiffs’ allegation and asserts that it provided all of the services it agreed to provide before charging for those services. -8- 2610/018887-0021 DEFENDANT IMPAC FUNDING CORPORATION’S 105622227 a03/10/17 MOTION TO BIFURCATE 10 1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Rutan & Tucker, LLP attorneys at law Plaintiffs seek the remedies available under the UCL, namely, restitution and injunctive relief. (RIN, Ex. 2, p. 24; Feitelberg v. Credit Suisse First Boston, LLC (2005) 134 Cal.App.4th 997, 1017 (“monetary relief in a UCL action is limited to restitution™).) Because a UCL claim is equitable, Plaintiff's sole cause of action will be presented to the Court at a bench trial, not to a jury. (People v. First Fed. Credit Corp. (2002) 104 Cal. App.4th 721, 733 (no right to a jury trial in UCL cases).) The parties do not dispute that “[g]iven the equitable nature of the UCL claim, the case will be adjudicated by way of a bench trial.” (RIN, Ex. 2, p. 24.) B. The Parties’ Views On The Proper Restitutionary Measure Differ Vastly. After filing their Complaint, Plaintiffs affirmed many times that they sought restitution for Impac’s alleged violation of section 2944.7 in the amount of the “time value” of fees ostensibly collected prematurely. (See, e.g., RIN, Ex. 4, p. 44 (Plaintiffs’ Opposition to Defendants’ Demurrer (“Plaintiffs were wrongfully denied the use of money or credit that should have been available to them over a significant time period.”)); Ex. 5, p. 53 (Joint Status Conference Statement, (“Plaintiffs claim losses measured by the “time value” of money . . . .”)); Ex. 6, p. 58 (Joint Stipulation Setting Briefing Schedule (same)); Ex. 7, p. 62 (Joint Stipulation Continuing Briefing Schedule (same)).) In fact, in appealing the earlier Court’s order sustaining Impac’s demurrer to the FAC, Plaintiffs advised the Court of Appeal that “[t]he final basis for Plaintiffs’ economic injury is simple and straightforward: Plaintiffs were wrongfully denied the use of money or credit that should have been available to them over a significant period.” (RIN, Ex. 8, p. 98 (emphasis added).) While the Court of Appeal determined that Plaintiffs’ allegations that Impac had “deprived them of the use of their money during that time because they could have invested the money” were sufficient to assert standing, (RIN, Ex. 9, p. 129) it concluded that the loss at stake “may be difficult to quantify” and that “restitution may only be a minimal amount.” (Id. at p. 131 (emphasis added).) On March 30, 2016, nearly four years after they filed suit, Plaintiffs filed their motion for class certification, and “reversed course” on their claim for monetary relief under the UCL. (RIN, Ex. 10.) In that Motion, Plaintiffs asserted for the first time that the class was due restitution of $8,428,587, which they claim is the full refund amount of all fees Impac collected during the class period in connection with 4,978 loans that Plaintiffs assert are at issue. (/d. at p. 140.) In addition 9- 2610/018887-0021 DEFENDANT IMPAC FUNDING CORPORATION'S 10562222.7 a03/10/17 MOTION TO BIFURCATE 10 11 12 13 14 15 16 17 18 19 20 2] 22 23 24 25 26 27 28 Rutan & Tucker, LLP attorneys at law to being inconsistent with Plaintiffs’ many judicial admissions, this measure is also inconsistent with California law, which makes clear Plaintiffs are not entitled to a full refund where they have received value for, or benefit from, a product received. (See In re Tobacco Cases II (2015) 240 Cal.App.4th 779, 794 (“In any event, plaintiffs’ full refund theory does not provide an alternative basis for restitution.”).) In response to Plaintiffs’ motion for class certification, Impac asserted that Plaintiffs could recover, at best and presuming that liability was proven, the “time value” of the disputed fees that Plaintiffs allegedly lost during the period between (a) the payment of a given fee; and (b) the completion by Impac of the services that it contracted to perform or represented that it would perform in connection with that fee. (RJN, Ex. 11, p. 179.) In connection with its class certification opposition, Impac submitted a declaration from its accounting and damages expert David Hanson. (RIN, Ex. 12.) Mr. Hanson noted that the Marentes had received two loan modifications, one in March 2010 (the “2010 Modification”) and another in May 2011 (the “2011 Modification”). (Id. at p. 185.) Presuming that Impac had violated Civil Code section 2944.7, Mr. Hanson calculated the Marentes’ “lost opportunity costs” as follows: e March 2010 modification: $1.30 e May 2011 Modification: $0.15. (Ibid.) Combined, these amounts equal $1.45 in lost “time value” of Plaintiffs’ funds for two loan modifications, for an average of 73 cents per loan. (/bid.) Impac contends that any restitutionary award must be calculated separately for each class member. Nonetheless, even taking 73 cent measure as an average and accepting (though not conceding) Plaintiffs’ estimate that 4,978 loan modifications are at issue (RJN, Ex. 10, p. 140), Impac’s exposure is $3,634 presuming liability is proven (i.e., $0.73 x 4,978), an amount $8,400,000 less than Plaintiffs’ claimed restitution.’ I U' TImpac further asserts through its Answer that any measure of restitution should be subject to offsets for the value and services that class members received from the relevant loan modifications. (RIN, Ex. 13, p. 194, § 19.) Impac does not, by requesting an adjudication of the Restitutionary Issue, waive the right to assert the affirmative defense of offset / setoff. -10- 2610/018887-0021 DEFENDANT IMPAC FUNDING CORPORATION'S 10562222.7 a03/10/17 MOTION TO BIFURCATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Rutan & Tucker, LLP attorneys at law C. Plaintiffs Agree That Resolving the Restitutionary Issue Before a Full Merits Trial Would Maximize Efficiency and Facilitate a Potential Resolution. After the Court approved class certification through a July 18, 2017 Minute Order, and in light of their significantly different contentions related to the measure of restitution, the parties mutually expressed a desire to obtain an adjudication of issues related to the Restitutionary Issue to streamline the case and encourage settlement. (Hornak Dec. § 2.) Toward that end, in advance of the October 12, 2016 Status Conference, the parties jointly stipulated to “request the opportunity to discuss at the Status Conference the possibility of the Court resolving certain remedy-related legal issues prior to a full bench trial to maximize efficiency and facilitate a potential resolution of the case.” (RIN, Ex. 2, p. 24.) Plaintiffs stated they believed that “resolving such issues prior to trial would encourage settlement by allowing the parties to better assess the value of the case” and “would also allow the parties (and the Court) to avoid potentially unnecessary pre-trial preparation and the presentation of substantive merits-based evidence.” (Jd., p. 25.) Several months later, in connection with the January 18, 2017 Status Conference, Plaintiffs again stipulated that “[p]resuming . . . agreement on substantive and procedural issues,” they anticipated filing a “joint stipulation that appropriately frames the relevant [restitutionary] issues and sets a briefing schedule.” (RIN, Ex. 3, p. 30.) Based on these representations, the Court stated at both the October 12, 2016 and January 18, 2017 Status Conferences that it would be willing to adjudicate restitutionary issues pursuant to an appropriately framed stipulation. (Hornak Dec. § 2.) D. Plaintiffs Refuse to Stipulate to Restitutionary Briefing. To facilitate the briefing that Impac believed was mutually desirable, Impac put significant effort into drafting a stipulation that appropriately framed the Restitutionary Issue while avoiding factual disputes. (Hornak Dec. 43.) Despite this effort, on February 9, 2017, following a meet-and- confer, Plaintiffs’ rejected Impac’s proposal and e-mailed simply “[1]et’s just try the case.” (Hornak Dec. § 4, Ex. 1.) In response, Impac advised that it intended to bring this Motion. (Hornak Dec. 95.) Despite earlier agreeing that the briefing would be beneficial, Plaintiffs have advised of their intent to oppose the filing. (Hornak Dec. § 5.) 111 11- 2610/018887-0021 DEFENDANT IMPAC FUNDING CORPORATION’S 10562222.7 a03/10/17 MOTION TO BIFURCATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Rutar & Tucker, LLP afforneys at law Given Plaintiffs’ reversal of course on both the appropriate measure of restitution and on resolving the Restitutionary Issue first, Impac now requests that the Court bifurcate the Restitutionary Issue and adjudicate that issue before a merits trial that involves, among other things, determination of liability and determination of Impac’s equitable defenses of offset or credit (which Impac reserves the right to assert). As explained in greater detail below, bifurcation is legally proper and will serve the purposes of economy, efficiency, and justice. (Hornak Dec. qq 6-10.) III. THE COURT SHOULD BIFURCATE AND HEAR FIRST THE RESTITUTIONARY ISSUE. California’s general bifurcation statute is codified in Code of Civil Procedure section 1048. Section 1048 permits a trial court, in the interests of convenience, expedition, and/or economy, to order a separate trial of any cause of action or issue raised by a lawsuit. Specifically, the statute provides in relevant part: The court, in furtherance of convenience . . . or when separate trials will be conducive to expedition and economy, may order a separate trial of . . . any separate issue . . . preserving the right of trial by jury required by the Constitution or a statute of this state or of the United States. (Code Civ. Proc. § 1048(b) (emphasis added).) Similarly, the Court has the discretion, pursuant to Code of Civil Procedure section 598, to order that “the trial of any issue or any part thereof” precede the trial of the remainder of the case where such bifurcation will promote “the convenience of witnesses, the ends of justice, or the economy and efficiency of handling the litigation.” (Code Civ. Proc. § 598; see also Evid. Code § 320 (“Except as otherwise provided by law, the court in its discretion shall regulate the order of proof.”).) “Under these provisions, trial courts have broad discretion to determine the order of proof in the interests of judicial economy.” (Grappo, supra, 235 Cal. App.3d 496, 504; Royal Surplus Lines Ins. Co. v. Ranger Ins. Co. (2002) 100 Cal. App.4th 193, 205 (“It is within the discretion of the court to bifurcate issues . . . and to determine the order in which those issues are to be decided™).) Here, the Restitutionary Issue should be bifurcated and heard first both because (1) it is a purely legal question that may be properly tried first to the Court after class notice issues and before a full I -12- 2610/018887-0021 DEFENDANT IMPAC FUNDING CORPORATION’S 10562222.7 a03/10/17 MOTION TO BIFURCATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Rutan & Tucker, LLP attorneys at law bench trial; and (2) bifurcation will serve the purposes of both Code of Civil Procedure sections 1048 and 598 by streamlining the case, improving economy, and facilitating settlement. A. The Restitutionary Issue Raises A Legal Question, Making Bifurcation Proper. “The statutory provisions for severance and separate trial are not limited to separate trial of a cause of action but also authorize separate trial of any issue.” (Walton v. Walton (1995) 31 Cal. App.4th 277, 292.) “All questions of law . . . are to be decided by the court.” (Evid. Code § 310.) Courts have accordingly granted bifurcation or severance of concrete legal issues. (See, e.g., County of Los Angeles v. Southern Cal. Edison Co. (2003) 112 Cal.App.4th 1108, 1113 (in a dispute over underpayment of taxes, bifurcation granted on a “preliminary legal question . . . how to determine ‘the consideration or value of the interest or property conveyed.’”); Metro. Water Dist. v. Imperial Irrigation Dist. (2000) 80 Cal.App.4th 1403, 1422 (“The trial was ordered bifurcated. The trial court identified the ‘two purely legal issues’ to be tried in the first phase . ...”).) This principle has particular application here, where Plaintiffs’ sole equitable claim will proceed by bench trial, not before a jury. In this case, the Restitutionary Issue raises the following discrete legal question: presuming (without admitting) that liability is established in this case, and without addressing Impac’s affirmative defenses of offset / setoff, is the proper measure of restitution in this action (1) a full refund of modification fees allegedly collected prematurely; or (2) the “time value” of fees? Impac asserts that case law establishes Plaintiffs can recover, at most, the “time value” of the fees allegedly collected prematurely, and can therefore achieve, at best, an amount of restitution less than $5,000. (See, e.g., In re Tobacco Cases II, supra, 240 Cal. App.4th at 794; Olsen v. Cohen (2003) 106 Cal. App.4th 1209, 1215 (“To require disgorgement of fees . . . is disproportionate to the wrong.”); Nelson v. Pearson Ford Co. (2010) 186 Cal.App.4th 983, 1017-1018 (concluding that an award to class members of “all the money they had paid for their vehicles as of the date of the judgment” where a car dealer’s added insurance premiums increased the cost of the class representatives car by about $30 was “not appropriate restitutionary relief under the UCL” and did “not accomplish the statutory objective of restoring to the victims sums acquired through [the] unfair practices.”).) Until they filed their Motion for Class Certification, Plaintiffs seemingly agreed. (See, e.g., RIN, Ex. 4, -13- 2610/018887-0021 DEFENDANT IMPAC FUNDING CORPORATION'S 10562222.7 a03/10/17 MOTION TO BIFURCATE co 9 Oo 10 11 I) 13 14 15 16 17 18 19 20 21 22 23 24 23 26 2d 28 Rutan & Tucker, LLP attorneys at law p. 44; Ex. 5,p. 53; Ex. 6,p. 58; Ex. 7,p. 62; Ex. 8, p. 98.) Plaintiffs then abruptly “shifted course” in connection with their certification motion and demanded a restitutionary measure potentially worth millions of dollars more. Resolving “whose measure is right” prior to trial will help the parties value the case, and potentially achieve a resolution before a full-blown merits trial. California precedent supports bifurcating damage / restitution-related issues, and trying those issues first. In Williamson v. Plant Insulation Co. (1994) 23 Cal. App.4th 1406, for example, the Court of Appeal noted that “the trial was ordered bifurcated, with issues of statute of limitations, causation and damages to be tried in the first phase, and issues of liability and comparative fault in the second.” (Id at 1412 (emphasis added).) Further, because Code of Civil Procedure section 1048, subdivision (a) “is derived from Rule 42 of the Federal Rules of Civil Procedure], it] follows that cases decided under [Federal Rules of Civil Procedure Rule] 42 may be persuasive authority for procedural questions arising under the California statute.” (See WEIL AND BROWN, California Practice Guide: Civil Procedure Before Trial, § 12:348 (Rutter Group 2016).) In federal court, “reverse bifurcation” of liability and damages-related issues is an accepted practice. (See, e.g., Simon v. Philip Morris (E.D.N.Y. 2001) 200 F.R.D. 21, 25 (“Sometimes damages are tried before liability in a process known as ‘reverse bifurcation’ to encourage settlement and shortening of the trial.”); Angelo v. Armstrong World Indus. (10th Cir. 1993) 11 F.3d 957, 965 (“We therefore hold that the district court’s reverse bifurcation format did not abuse its discretion.”).) Pursuant to this authority, it is well within the Court’s broad discretion to bifurcate the discrete legal issue related to the proper measure of restitution. (Grappo, supra, 235 Cal. App.3d at 504.) B. Bifurcating the Restitutionary Issue Will Serve the Purposes of Code of Civil Procedure sections 1048 and 598. In addition to isolating an important legal question, bifurcating the Restitutionary Issue will also serve the purposes of convenience, expediency, and economy, making relief appropriate pursuant to Code of Civil Procedure sections 1048 and 598. “[O]ne of the basic purposes of bifurcation” is “the expeditious decision of cases.” (Horton v. Jones (1972) 26 Cal.App.3d 952, 960.) Bifurcation is particularly useful where “a determination of the equitable issue may determine the lawsuit and prevent a more costly jury trial.” (Dills v. Delira Corp. (1956) 145 Cal. App.2d 124, -14- 2610/018887-0021 DEFENDANT IMPAC FUNDING CORPORATION'S 10562222.7 a03/10/17 MOTION TO BIFURCATE N o 0 3 OY 10 11 12 13 14 15 16 17 18 19 20 21 %2 23 24 25 26 27 28 Rutan & Tucker, LLP attorneys at law 129; see also Grappo, supra, 235 Cal.App.3d at 504 (holding that the trial court properly bifurcated (and tried first) the issue of whether the plaintiff had an interest in certain property, in that a determination of that issue could have rendered unnecessary a subsequent trial on the issues of whether the plaintiff’s interest was superior to others and whether the plaintiff was entitled to damages).) Here, bifurcating the Restitutionary Issue will promote “the convenience of witnesses, the ends of justice, or the economy and efficiency of handling the litigation” such that bifurcation is appropriate. (Code Civ. Proc. § 598; see also Code Civ. Proc. § 1048 (“The court, in furtherance of convenience . . . or when separate trials will be conducive to expedition and economy, may order a separate trial of . . . any separate issue . . ..”).) First, given that Plaintiffs and Impac have assigned very different values to restitution in this case, resolution of the Restitutionary Issue will assist the parties in valuing this case and reaching resolution prior to trial. (Hornak Dec. § 7; see In re Marriage of Wolfe (1985) 173 Cal.App.3d 889, 894 (“If it appears that the resolution of a pivotal issue by a bifurcated trial of that issue will enable the parties to settle all other issues, bifurcation is to be encouraged.”).) As Plaintiffs must concede, the Restitutionary Issue is the $8,000,000 “gorilla” in the case, yet its resolution (unlike issues of liability and equitable offsets) does not require extensive witnesses or testimony. Settlement is virtually impossible without determination of the Restitutionary Issue. Further, even if adjudication of the Restitutionary Issue does not result in settlement, it will still enhance economy, efficiency, and justice. In this regard, the benefits of bifurcation include the following: ® First, obtaining a ruling on the legal Restitutionary Issue will assist the parties in determining whether they must invest significant resources in conducting factual and expert discovery related to the restitutionary measure and offsets / setoffs that may exist in Impac’s favor. (Hornak Dec. 4 8.) Among other things, such discovery will involve the disclosure of thousands of loan modification files, and expert evaluation of those files to ascertain the benefits the plaintiff class received from modifications. (Ibid.) -15- SE OOTRERT0071 DEFENDANT IMPAC FUNDING CORPORATION'S 10562222.7 a03/10/17 MOTION TO BIFURCATE © 3 ON Oo 10 11 12 13 14 15 16 17 18 19 20 21 92 23 24 25 26 27 28 Rutan & Tucker, LLP attorneys af law e Second, obtaining a ruling on the issue will aid the parties in calculating the amount in controversy at trial, and will thus ensure the parties dedicate resources to trial that appropriately reflect the value of the case and are appropriate to the Court’s determination of the correct restitutionary measure. (Hornak Dec. § 9.) In other words, bifurcating the Restitutionary Issue will ensure that the parties do not spend large sums of money or exhaust available insurance to prepare an extensive trial presentation-with numerous witnesses and experts-with respect to a UCL claim ultimately worth less than $5,000. o Third, bifurcating the key legal issue related to restitution will allow the parties to devote proper attention, prior to a merits trial, to briefing and presenting the discrete Restitutionary Issue. (Hornak Dec. § 10.) These benefits satisfy the requirements of both Code of Civil Procedure sections 1048 and 598, and affirm that bifurcation of the Restitutionary Issue is appropriate. Presuming that the Restitutionary Issue is tried after the distribution of class notice, any ruling will also be effective to bind the class. C. Plaintiffs Have Already Agreed that Bifurcating the Restitutionary Issue Would Encourage Settlement and Enhance Efficiency. Despite Plaintiffs’ recent refusal to stipulate to the requested bifurcation, they have, in Court- filed documents, affirmatively acknowledged that bifurcating the issue would be beneficial. Plaintiffs previously stipulated, for example, that “resolving such issues prior to trial would encourage settlement by allowing the parties to better assess the value of the case” and “would also allow the parties (and the Court) to avoid potentially unnecessary pre-trial preparation and the presentation of substantive merits-based evidence.” (RIN, Ex. 2, p. 25.) Plaintiffs therefore cannot now attempt to argue that bifurcating the Restitutionary Issue would not serve the purposes of Code of Civil Procedure sections 1048 and 598. For this reason also, this Motion should be granted. IV. CONCLUSION. In short, bifurcating the Restitutionary Issue and trying it first will likely expedite the resolution of this case and, at the very least, will be an efficient, economic means of trying this case. -16- 2610/018887-0021 DEFENDANT IMPAC FUNDING CORPORATION’S 10562222.7 03/10/17 MOTION TO BIFURCATE 1 | All the parties agree on this fact. Based on the foregoing, Impac respectfully requests that the Court 2 || grant the Motion in its entirety and issue an order bifurcating and hearing first the Restitutionary 3 |[ Issue. 5 || Dated: March 10, 2017 RUTAN & TUCKER, LLP MICHAEL T. HORNAK 6 LUCAS K. HORI By: /s/ Michael T. Hornak 8 Michael T. Hornak Attorneys for Defendant 9 IMPAC FUNDING CORPORATION 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Rutan & Tucker, LLP -17- attorneys at law 2610/018887-0021 DEFENDANT IMPAC FUNDING CORPORATION'S 105622227 a03/10/17 MOTION TO BIFURCATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Rutan & Tucker, LLP attorneys at law DECLARATION OF MICHAEL T. HORNAK I, Michael T. Hornak, declare as follows: 1. [ am a partner at the law firm of Rutan & Tucker, LLP, counsel of record for defendant Impac Funding Corporation (“Impac”™) in this action. I am a member in good standing of the State Bar of California. 1 make this Declaration in support of Impac’s Motion to Bifurcate Restitutionary Issue (the “Motion). I have personal knowledge of the facts set forth in this Declaration and, if called as a witness, could and would testify competently to such facts under oath. 2. Through a July 18, 2017 Minute Order, the Court approved class certification in this matter. Following that order, and in light of their significantly different contentions related to the measure of restitution, the parties through counsel mutually expressed a desire to obtain an adjudication of issues related to restitution in order to streamline the case and encourage settlement. In particular, counsel discussed several times, in-person and by phone, the possibility of achieving a ruling on whether the proper restitutionary measure would be a “full refund” measure or a “time value” measure (the “Restitutionary Issue”). The parties also raised proposed briefing with the Court during at least two status conferences. The Court stated at both the October 12, 2016 and January 18, 2017 Status Conferences that it would be willing to adjudicate restitutionary issues pursuant to an appropriately framed stipulation. 3. To facilitate the briefing that I believed was mutually desirable, my office put significant effort into drafting a stipulation that appropriately framed the Restitutionary Issue while avoiding factual disputes. 4. Despite Impac’s efforts, on February 9, 2017, following a meet-and-confer, Plaintiffs Rene and Martha Marentes’ (“Plaintiffs’”) counsel rejected Impac’s proposal and e-mailed simply “I1]et’s just try the case.” A true and correct copy of the parties’ e-mail exchange is attached hereto as Exhibit 1. 5. In response, I advised Plaintiffs’ counsel that Impac intended to bring the Motion. Despite earlier agreeing that adjudicating the Restitutionary Issue would be beneficial, Plaintiffs’ counsel stated that they intended to oppose the requested relief. 0. Notwithstanding counsels’ refusal to stipulate to the proposed briefing, bifurcation -18- ETO RRB DEFENDANT IMPAC FUNDING CORPORATION'S 10562222.7 a03/10/17 MOTION TO BIFURCATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Rutan & Tucker, LLP attorneys at law of the Restitutionary Issue will serve the purposes of economy, efficiency, and justice. 7. Given that Plaintiffs and Impac have assigned very different values to restitution in this case, resolution of the Restitutionary Issue will assist the parties in valuing this case and potentially reaching resolution prior to trial. 8. Further, obtaining a ruling on the legal Restitutionary Issue will assist the parties in determining whether they must invest significant resources in conducting factual and expert discovery related to the restitutionary measure and offsets / setoffs that may exist in Impac’s favor. Among other things, such discovery may involve the disclosure of thousands of loan modification files, and expert evaluation of those files to ascertain benefits the plaintiff class received from modifications. Counsel for Impac presently anticipates an approximately ten day bench trial, with much of that time occupied with (1) evidence concerning the calculation of the benefits individual class members received from the loan modifications obtained through Impac, which Impac contends is relevant to Plaintiffs’ UCL claims and Impac’s affirmative defense of equitable set-off; and (2) evidence on liability issues, including but not limited to parole evidence relating to the meaning and mutual intent of the parties concerning the scope of Impac’s services and what plaintiff class members were promised by Impac. 9. Additionally, obtaining a ruling on the issue will aid the parties in calculating the amount in controversy at issue at trial, and will thus ensure the parties dedicate resources to trial that appropriately reflect the value of the case. In other words, bifurcating the Restitutionary Issue will ensure that the parties do not spend large sums of money preparing an extensive trial presentation-with numerous witnesses and experts-with respect to a claim that may ultimately worth less than $5,000. 10. Moreover, bifurcating the key legal issue related to restitution will allow the parties to devote proper attention, prior to a merits trial, to briefing and presenting the discrete Restitutionary Issue. /1 I 117 -19- 2610/018887-0021 DEFENDANT IMPAC FUNDING CORPORATION'S 10562222.7 a03/10/17 MOTION TO BIFURCATE 1 I declare under penalty of perjury under the laws of the State of California that the foregoing 2 | is true and correct. Executed this 10th day of March, 2017 at Costa Mesa, California. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Rutan & Tucker, LLP -20- attorneys at law SIDNAREE TOT] DEFENDANT IMPAC FUNDING CORPORATION’S 10562222.7 a03/10/17 MOTION TO BIFURCATE EXHIBIT 1 Hornak Dec., Exhibit 1, Page 21 From: Brian Kabateck Sent: Thursday, February 09, 2017 8:43 PM To: Hornak, Mike Cc: Hori, Lucas Subject: Re: Impac Mortgage Let's just try the case. On Feb 9, 2017, at 8:09 PM, Hornak, Mike wrote: Brian - Thank you for the message. We have reviewed your revised stipulation. We are not necessarily wedded to the precise language of our earlier proposal, and are willing to consider alternative approaches, including staggered briefing. That said, the draft that you provided fundamentally alters the issue that we are proposing the Court resolve in a way that we think is unworkable. The question you frame is as follows: “In this action . . . is the proper measure of restitution relief a full refund of loan modification fees collected prematurely?” We have numerous issues with this proposal. Perhaps the two most significant are as follows: First, as you know, we dispute that fees were in fact collected prematurely, yet your proposed stipulation appears to assume that liability has been proven. This is not acceptable to us, Second, we do not believe that there is any possible way to answer the question framed above without introducing extensive factual evidence. Impac asserts that even if the Court determines that the “full refund” theory is legally proper (which we dispute), Impac is equitably entitled at trial to offsets for benefits the class members received such that no restitutionary relief is available. Calculating these offsets will give rise to a factual, rather than legal, dispute. You will recall that in earlier communications we had sought to have the Court determine Impac’s right to an offset or setoff (but not the amount) in this first phase; we withdrew that requirement given your objections to that approach. We understand that we all wanted to avoid factual arguments for purposes of this briefing. Nonetheless, your proposal purports to request that the Court make an “all encompassing” ruling on the ultimate restitutionary award that your clients seek. We cannot agree to seek such a broad ruling without the opportunity at trial to introduce appropriate evidence on offsets, among other equitable matters. We had hoped to structure our proposed stipulation to avoid these factual! disputes so that the parties could focus on the discrete legal issue that we all want resolved, namely, is the proper restitutionary measure a “full refund” or “time value.” In revising our proposal, you deleted a number of the provisions that we believe narrow the issue. Before moving forward, we wanted to at least call this fact to your attention in an final effort to work out a joint draft. Perhaps it makes sense to have one more telephone conversation to discuss the stipulation in the next few days. If you sense we will not reach compromise, please let us know. If we cannot reach an agreement, our client would like to move forward promptly with filing a motion to bifurcate. 1 Hornak Dec., Exhibit 1, Page 22 Regards, Michael T. Hornak Rutan & Tucker, LLP 611 Anton Boulevard, 14th Floor Costa Mesa, CA 92626 (714) 641-3472 (direct) mhornak@rutan.com www.rutan.com RUTAN Privileged And Confidential Communication. This electronic transmission, and any documents attached hereto, (a) are protected by the Electronic Communications Privacy Act (18 USC §§ 2510-2521), (b) may contain confidential and/or legally privileged information, and (c) are for the sole use of the intended recipient named above. If you have received this electronic message in error, please notify the sender and delete the electronic message. Any disclosure, copying, distribution, or use of the contents of the information received in error is strictly prohibited. Hornak Dec., Exhibit 1, Page 23 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Za 28 PROOF OF SERVICE (Rene Marentes, et al. v. Impac Mortgage Holdings, Inc., et al. OCSC, Civil Complex Center Case No. 30-2012-00565615-CU-BT-CXC) STATE OF CALIFORNIA, COUNTY OF ORANGE I am employed by the law office of Rutan & Tucker, LLP in the County of Orange, State of California. I am over the age of 18 and not a party to the within action. My business address is 611 Anton Boulevard, Suite 1400, Costa Mesa, California 92626-1931. My electronic notification address is hdall@rutan.com. On March 10, 2017, I served on the interested parties in said action the within: DEFENDANT IMPAC FUNDING CORPORATION’S NOTICE OF MOTION AND MOTION TO BIFURCATE RESTITUTIONARY ISSUE; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF; DECLARATION OF MICHAEL T. HORNAK as stated below: x] (BY E-MAIL) by transmitting a true copy of the foregoing document(s) to the e-mail addresses set forth on the attached mailing list. [ALL COUNSEL ON SERVICE LIST] [] BY MAIL) by placing a true copy thereof in sealed envelope(s) addressed as shown above. In the course of my employment with Rutan & Tucker, LLP, I have, through first-hand personal observation, become readily familiar with Rutan & Tucker, LLP’s practice of collection and processing correspondence for mailing with the United States Postal Service. Under that practice, I deposited such envelope(s) in an out-box for collection by other personnel of Rutan & Tucker, LLP, and for ultimate posting and placement with the U.S. Postal Service on that same day in the ordinary course of business. If the customary business practices of Rutan & Tucker, LLP with regard to collection and processing of correspondence and mailing were followed, and I am confident that they were, such envelope(s) were posted and placed in the United States mail at Costa Mesa, California, that same date. I am aware that on motion of party served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit. (BY FEDEX) by depositing in a box or other facility regularly maintained by FedEx, an express service carrier, or delivering to a courier or driver authorized by said express service carrier to receive documents, a true copy of the foregoing document in sealed envelopes or packages designated by the express service carrier, addressed as shown above, with fees for overnight delivery provided for or paid. Executed on March 10, 2017, at Costa Mesa, California. I declare under penalty of perjury under the laws of the State of California that the foregoing 1s true and correct. a ~ Cf SY of Lp nil 7 Debbie Corwin NW At Cr - (Type or print name) ) Col 348/018887-0021 7157222.2 a0V/11/17 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 John F, Edgar, Esq. Matthew Limoli, Esq. Edgar Law Firm LLC 1032 Pennsylvania Avenue Kansas City, MO 64105 Brian S. Kabateck, Esq. Shant A. Karnikian, Esq. Kabateck Brown Kellner LLP 644 S. Figueroa Street Los Angeles, CA 90017 348/018887-0021 71572222 01/11/17 SERVICE LIST Attorneys for Plaintiff jfe@edgarlawfirm.com mjl@EdgarLawFirm.com Attorneys for Plaintiff bsk@kbklawyers.com sk@kbklawyers.com