Village At Redlands Group, Lp vs. Auction.Com, Inc.Motion to Strike or Tax CostsCal. Super. - 4th Dist.March 17, 201510 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 29 28 Lawrence H. Nagler (38120); (Inagler@nagler.com) Charles Avrith (96804); (cavrith@nagler.com) David F. Berry (112743); (dberry@nagler.com) NAGLER & ASSOCIATES 2300 S. Sepulveda Blvd. Los Angeles, CA 90064 (310) 473-1200 (tel) ELECTRONICALLY FILED Superior Court of California, County of Orange 0307/2017 at 03:41:00 PM Clerk of the Superior Court By Enrique “weloz, Deputy Clerk Yosef Peretz (SBN 209288); (yperetz@peretzlaw.com) PERETZ & ASSOCIATES 22 Battery Street, Suite 200 San Francisco, CA 94111 (415) 732.3777 (tel) Attorneys for Plaintiffs SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF ORANGE - CENTRAL JUSTICE CENTER VILLAGE AT REDLANDS GROUP, L.P., a California limited partnership, INVESTMENT CONCEPTS, INC., a California corporation, DARREN JANGER, in his individual capacity and as a Trustee of the Darren Janger Trust, GAC REALTY ADVISORS, L.P., a Nevada limited partnership, GEORGE CHAMI, LINDA JANGER, in her capacity as Trustee of the Linda Janger Trust, the Jeffrey Janger Trust, the Lane Janger Trust, LANCE TENDLER and BETTINA . O’MARA, in their capacities as Co-Trustees of the Tendler Grandchildren’s POT Trust, and MARCIA L. CHAM], in her capacity as Trustee of the Marcia L.. Chami Trust, Plaintiff, V. AUCTION.COM, INC., a California corporation; RIALTO CAPITAL ADVISORS, LLC, a Delaware limited liability company; RIALTO CAPITAL MANAGEMENT, LLC, a foreign limited liability company; RES-CA MVA, LLC, a Florida limited liability company; PRESTON UNDERDOWN, an individual; DAVID AMEZQUITA, an individual; and DOES 1-20, inclusive, Defendants. Case No.: 30-2015-00777483-CU-FR-CJC ASSIGNED FOR ALL PURPOSES TO: HON. DEBORAH C. SERVINO DEPARTMENT C22 NOTICE OF MOTION AND MOTION TO TAX COSTS; MEMORANDUM OF POINTS AND AUTHORITIES; DECLARATION OF CHARLES AVRITH Date: April 14, 2017 Time: 10:00 a.m. Dept.: C22 Court Res. No. 72546810 Action filed: March 17, 2015 NOTICE OF MOTION AND MOTION TO TAX COSTS 10 11 12 13 14 15 16 11) 18 19 20 21 22 23 24 25 26 27 28 TO ALL PARTIES AND TO THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that on April 14, 2017, at 10:00 a.m., or as soon thereafter as the matter may be heard in Department C-22 of the above-captioned Court, located at 700 Civic Center Drive West, Orange, California, Plaintiffs will move the Court for an order taxing costs claimed by Defendants Rialto Capital Advisors, LLC, Rialto Capital Management, LLC, RES- CA MVA, LLC, and Preston Underdown (“Rialto Defendants”). The motion will be made pursuant to California Rule of Court 3.1700, on the grounds that certain of the costs claimed in their Memorandum of Costs, dated February, 16, 2017, are not recoverable. The motion will be based upon this notice, the memorandum of points and authorities attached hereto, the Declaration of Charles Avrith attached hereto, the entire Court file in this action (the “2015 Case”) and in Case No. 30-2013-00623618-CU-BT-CJC (the “2013 Case”), any matters of which the Court may take judicial notice, and such other, and further or different oral or written matter as may be presented to the Court prior to or at the time of the hearing on the motion. Dated: March / , 2017 NAGLER & ASSOCIATES By: Charles Avrith Attorneys for Plaintiffs 1 NOTICE OF MOTION AND MOTION TO TAX COSTS a ~~ O N W n 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES IL INTRODUCTION The Rialto Defendants have filed a Memorandum of Costs seeking $20,153.62 in costs. The Cost Memorandum provides no documentation showing that the charges were reasonable and necessary, as required by law. In particular, Defendants seek to tack on several non- recoverable charges, such as photocopying charges for a subpoena, and deposition costs for duplicative and unnecessary depositions. Additionally, several items need to be substantiated, such as over $1,000 in travel expenses to depose George and Marcia Chami, and roughly $1,900 in photocopying costs for trial exhibits that may or may not have actually been used. As such, Plaintiffs seek to tax the Memorandum of Costs by approximately $10,375.24. IL. LEGAL STANDARD In ruling upon a motion to strike or tax costs, the trial court’s first determination is whether the statute expressly allows a particular item claimed and whether it appears proper on its face; where costs are not expressly allowed by statute, the burden is on the party claiming the costs to show that the charges were reasonable and necessary. Foothill College Dist. v. Emerich (2007) 158 Cal.App.4th 11, 29-30. Notably, the court has power to disallow even costs “allowable as a matter of right” if they were not “reasonably necessary”; and to reduce the amount of any cost item to that which is “reasonable.” Perko’s Enterprises, Inc. v. RRNS Enterprises (1992) 4 Cal. App.4th 238, 245 (“intent and effect [of § 1033.5(c)(2] is to authorize a trial court to disallow recovery of costs, including filing fees, when it determines the costs were incurred unnecessarily”. The right to recover costs is “strictly governed” by CCP § 1032 and 1033.5, and as such a court has no discretion to award costs not statutorily authorized. Ladas v. California State Auto. Assn. (1993) 19 Cal. App.4th 761, 774. To be allowable and recoverable, claimed costs must be reasonably necessary to the conduct of the litigation, rather than merely convenient or beneficial to its preparation, reasonable in amount, and incurred by the claiming party. CCP § 1033.5(c)(1), (2), (3); Thon v. Thompson (1994) 29 Cal. App.4th 1546, 1548. 2 NOTICE OF MOTION AND MOTION TO TAX COSTS 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 III. LEGAL ARGUMENT Plaintiffs move to tax certain of the costs requested in the Rialto Defendants’ Memorandum of Costs. 1. Deposition Costs. The Rialto Defendants seek a total of $8,841.25 in deposition costs (Item 4). Plaintiffs seek to tax $4,585.34 of that amount, which represents (a) $1,561.60 spent on two sessions of the deposition of Darren Janger; (b) $664.05 spent on the second session of the deposition of Lance Tendler; and (c) $2,359.24 spent on the depositions of George and Marcia Chami. These items are not recoverable because they are not reasonable or necessary expenditures. Defendants already spent two days deposing Mr. Janger in the 2013 Case, and it was unreasonable for them to spend two days deposing him concerning the same subject matter once again in the 2015 Case. Similarly, Defendants had deposed Mr. Chami at length in the 2013 Case, and it was unreasonable for them to depose him again in the 2015 Case. See Avrith Declaration, 9 2-3. Relatedly, Rialto Defendants seek $1,371.54 in travel expenses for travelling to the depositions of George and Marcia Chami. Although the depositions were in Las Vegas, Defendants have not produced any documentation breaking down these costs, and as such made no showing that these expenses were reasonable, necessary, or actually incurred. As for Mr. Tendler, the Court will recall, that he was one of the limited partners of VARG whose role in the events leading to this dispute was extremely limited. Nevertheless, he was deposed twice in the 2015 Case, once in his individual capacity and on a second time, in his capacity as PMK of Kennington, which had lent money to VARG. There was no reason why his depositions could not have been combined into one session or why two separate depositions were needed for this. See Avrith Declaration, § 5 and Exhibit A. Models, Blowups and Photocopies The Rialto Defendants seek $1,905 for models, blowups, and copies of exhibits (Item 11). These type of costs may be recoverable; however, Defendants provide no documentation or invoicing showing what constitutes those charges. Only expenses for models, blowups, 3 NOTICE OF MOTION AND MOTION TO TAX COSTS w i BA W N © 0 9 10 1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 photocopies, etc. that are “reasonably helpful to aid the trier of fact” are recoverable as costs. CCP § 1033.5(a)(12). Costs for exhibits not actually used at trial are not recoverable under CCP § 1033.5(a)(12) because the exhibits are not “reasonably helpful to aid the trier of fact.” Ladas v. California State Auto. Ass'n (1993) 19 Cal.App.4th 761, 774; see Great Western Bank v. Converse Consultants, Inc. (1997) 58 Cal.App.4th 609, 615. As such, Defendants must show that the costs incurred are for exhibits, models or blowups actually used at trial in order to recover them. 2. Document Copying Expenses The Rialto Defendants claim $3,884.90 for Pinnacle Reprographics (Item 13), which apparently copied the production from Red Mortgage Capital that Defendants subpoenaed. These expenses also are not recoverable. Section 1033.5(b) provides in relevant part: “The following items are not allowable as costs, except when expressly authorized by law: (3) ...[P]hotocopying charges, except for exhibits.”’ As these documents are not exhibits, these expenses are simply not recoverable. IV. CONCLUSION For the reasons set forth above, the Court should tax the amounts described herein. Respectfully submitted, Dated: March / yi tll7 NAGLER & ASSOCIATES Charles Avrith Attorneys for Plaintiffs 4 NOTICE OF MOTION AND MOTION TO TAX COSTS NN O N wn B W 10 11 12 13 14 15 16 17 18 19 20 22 23 24 25 26 27 28 DECLARATION OF CHARLES AVRITH I, Charles Avrith, declare: 1% I am an attorney duly licensed to practice in this Court. I am an attorney with Nagler & Associates, counsel of record for Plaintiffs in this action. I make this declaration in support of Plaintiffs’ motion to tax certain costs claimed by the Rialto Defendants. Except as stated below, I have personal knowledge of the matters stated herein. 2: Plaintiff Darren Janger was deposed over 2 days in the 2013 Case. He was also deposed over two days in the 2105 Case, even though the subject matter of both cases was the same. 5 Plaintiff George Chami was deposed in the 2015 Case, even though he had been deposed in the 2013 Case concerning the same subject matter. 4. The depositions of George and Marcia Chami were conducted in Las Vegas on July 19, 2016. 55 Plaintiff Lance Tendler was deposed over two days in the 2015 Case. He was deposed once in his individual capacity, and once as the person most knowledgeable of Kennington, Limited, Inc. Defendants refused Plaintiffs’ offer to have these two depositions combined into one session to avoid the time and expense of two depositions concerning the same subject matter. See Exhibit A hereto. I declare under of penalty of perjury that the foregoing is true and correct. Executed this 7th day of March 2017, at Los Angeles, California. Gt, 0 Charles Avrith 9 NOTICE OF MOTION AND MOTION TO TAX COSTS EXHIBIT A Lance Tendler, 3/17/2016 Village at Redlands Group v. Auction.Com, Inc. SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF ORANGE, CENTRAL JUSTICE CENTER VILLAGE AT REDLANDS GROUP, LP, A CALIFORNIA LIMITED PARTNERSHIP; INVESTMENT CONCEPTS, INC., A CALIFORNIA CORPORATION; DARREN JANGER, IN HIS INDIVIDUAL CAPACITY AND AS TRUSTEE OF THE DARREN JANGER TRUST; GAC REALTY ADVISORS, L.P., A NEVADA LIMITED PARTNERSHIP; GEORGE CHAMI; LINDA JANGER, IN HER CAPACITY AS TRUSTEE OF THE LINDA JANGER TRUST; LANCE TENDLER AND BETTINA . O'MARA, IN THEIR CAPACITIES AS CO-TRUSTEES OF THE TENDLER GRANDCHILDREN'S POT TRUST; AND MARCIA L. CHAMI, IN HER CAPACITY AS TRUSTEE OF THE MARCIA L. CHAMI TRUST, , PLAINTIFFS, vs. AUCTION.COM, INC., A CALIFORNIA CORPORATION; RIALTO CAPITAL ADVISORS, LLC, A DELAWARE LIMITED LIABILITY COMPANY; RIALTO CAPITAL MANAGEMENT, LLC, A FOREIGN LIMITED COMPANY; RES~CA MVA, LLC, A FLORIDA LIMITED LIABILITY COMPANY; PRESTON UNDERDOWN, AN INDIVIDUAL; DAVID AMEZQUITO, AN INDIVIDUAL; AND DOES 1-20, INCLUSIVE, DEFENDANTS . (CONTINUED ONTO NEXT PAGE) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) CERTIFIED ORIGINAL Case No. 30-2015- 00777483~ CU-FR-CIC ADVANCED DEPOSITIONS www.advanceddepositions.com | 855.811.3376 Lance Tendler, 3/17/2016 Village at Redlands Group v. Auction.Com, Inc. DEPOSITION OF LANCE TENDLER THURSDAY, MARCH 17, 2016 REPORTED BY LEESA DURRANT, C.S.R. NO. 11899, RPR ADVANCED DEPOSITIONS www.advanceddepositions.com | 855.811.3376 10 ai 14 Los 14 ® 16 17 18 13 20 21 22 23 24 £53 Lance Tendler, 3/17/2016 Village at Redlands Group v. Auction.Com, Inc. A Can you restate the question? Q Sure. You see category No. 10? E Yeas. 0 In that it calls for Kennington to produce the person most knowledgeable to testify today regarding knowledge concerning communications about the lawsuit. Is there anybody more knowledgeable than you at Kennington regarding this lawsuit? A No. Q Okay. Are you the person most knowledgeable concerning Kennington's due diligence regarding the property before making the loan? A Yes. Q Okay. Are you the person most knowledgeable concerning the value of the property from 2011 to the present, including, but not limited to, appraisals and statement of value? A At Kennington? Q Hess A Yes. And this deposition is really limited to that: It was the person most knowledgeable from Kennington. So it's not -- except when I ask you otherwise as for individual information, I'm really asking for Kennington's perspective. ADVANCED DEPOSITIONS www.advanceddepositions.com | 855.811.3376 24 29 Lance Tendler, 3/17/2016 Village at Redlands Group v. Auction.Com, Inc. MR. BERRY: If I could clarify, we're happy to have him testify in his capacity as a party as well as if you want to ask him questions about that. But El that's the case, I just want to make clear that he won't be subject to a second deposition at a later time as a party. So, you know, if you're willing to commit to that, I will allow him to testify as a party as well; but if not, I'm going to limit the testimony strictly to his knowledge at Kennington. MR. KAGAN: That's fair. At this juncture right now, I'm proceeding for purposes of taking the PMK deposition only. To the extent I want to ask individual sunstions, I think I will refrain for another day. MR. BERRY: All right. MR. ALBRECHT: I agree. BY MR. KAGAN: Q Are you the person most knowledgeable as to. category No. 13, any research or analysis Kennington undertook to determine the value of the property prior to, during and/or subsequent to the loan? A Yes. Q Are you the person most knowledgeable as to category No. 14 regarding documents that Kennington relied on in deciding to make the loan? Fe ADVANCED DEPOSITIONS www.advanceddepositions.com | 855.811.3376 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE I am employed in the County of Los Angeles, State of California. Iam over the age of 18 and not a party to the within action; my business address is 2300 South Sepulveda Blvd., Los Angeles, California, 90064. On March 7, 2017, I served the following document(s) described as: NOTICE OF MOTION AND MOTION TO TAX COSTS; MEMORANDUM OF POINTS AND AUTHORITIES; DECLARATION OF CHARLES AVRITH, on the interested parties in this action as stated below: (X) () Brandon S. Reif, Esq. Attorneys for Defendants Auction.com, Inc., and (reif. B@wssllp.com) David Amezquita Jeffrey F. Kagan, Esq. (kagan.j@wssllp.com) Winget Spadafora & Schwartzberg LLP 1900 Avenue of the Stars, Suite 450 Los Angeles, CA 90067 Scott R. Albrecht, Esq. Attorneys for Defendants Rialto Capital (Scott.albrecht@sgsattorneys.com) Advisors, LLC, Rialto Capital Management, Samuels Green & Steel LLP LLC, Res-CA MVA, LLC, and Preston 19800 MacArthur Blvd., Suite 1000 Underdown Irvine, CA 92612 Yosef Peretz, Esq. Attorneys for Plaintiffs (yperetz@peretzlaw.com) PERETZ & ASSOCIATES 22 Battery St., Ste. 200 San Francisco, CA 94111 BY EMAIL: I caused the above-referenced document(s) to be sent in electronic .PDF format as attachments to an email addressed to the person(s) on whom such document(s) is/are to be served at the email address(es) shown above, at last given by that person(s) or as obtained from the internet website(s) relating to such person(s), and I did not receive an email response upon sending such email indicating that such email was not delivered. BY MAIL: I deposited such envelope in the mail at Los Angeles, California. The envelope was mailed with postage thereon fully prepaid. Iam "readily familiar" with the firm's practice of collection and processing correspondence for mailing. Under that practice it would be deposited with the U.S. Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business. I am aware that on motion of the party served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposition for mailing in affidavit. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on March 7, 2017, at Los Angeles, California. er A Accel 7: ‘Mercede P. Guilloly