Michael Lamelza vs. San Miguel Equities, LLC

Opposition

Cal. Super. - 4th Dist.February 29, 2016

~N O Y B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SHUMENER, ODSON & OH LLP BETTY SHUMENER (Bar No. 137220) EDWARD O. MORALES (Bar No. 266321) SHUMENER, ODSON & OH LLP 550 South Hope Street, Suite 1050 Los Angeles, CA 90071-2678 Tel: 213.344.4200 Fax: 213.344.4190 Attorneys for Cross-Complainant and Cross- Defendant in Interpleader ELECTRONICALLY FILED Superior Court of California, County of Orange 05/02/2016 at 05:20:00 Pi Clerk of the Superior Court By & Clerk, Deputy Clerk FIRST FOUNDATION BANK, A CALIFORNIA BANK SUPERIOR COURT OF CALIFORNIA COUNTY OF ORANGE - CIVIL COMPLEX CENTER Michael LaMelza and Villa Rossa, LLC Plaintiffs V. San Miguel Equities, LLC et al. Defendants BNY Mellon, N.A., Cross-Plaintiff in Interpleader, V. Michael LaMelza, Villa Rossa, LLC et al. Cross-Defendants in Interpleader Michael LaMelza, and Villa Rossa, LLC Cross Defendants and Cross Plaintiffs in Interpleader Vv. First Foundation Bank and Richard Roes I through 20 inclusive. Cross-Defendants in Interpleader CASE NO. 30-2016-00838262-CU-MC-CXC [Assigned for all purposes to the Honorable Thierry Patrick Colaw — Department CX-105] FIRST FOUNDATION BANK'S OPPOSITION TO PLAINTIFFS’ MOTION FOR APPOINTMENT OF RECEIVER DATE: May 13, 2016 TIME: 10:30 a.m. PLACE: Department CX-105 751 W. Santa Ana Blvd. Santa Ana, California FIRST FOUNDATION BANK’S OPPOSITION TO MOTION FOR APPOINTMENT OF RECEIVER ~N O Y B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SHUMENER, ODSON & OH LLP TABLE OF CONTENTS PAGE I. INTRODUCTION ....otiiiiieitetirie neces eesteeeeeeie estes sree sere eee s nee sree sent eae esses snes sane anes -1- II. STATEMENT OF FACTS .....iiiiee eects etcetera senses sree ea -3- A. The POTTIOLIO co.cc eects cece ee sre eee eect ee sree sees eee -3- B. On September 6, 2013, BNY Obtains A First-Priority Pledge In The Portfolio .............. -4- C. LaMelza’s Judgment, Pending On Appeal, Is Not Against Borrower ............ccccccevveennnene. -4- D. LaMelza Has No Lien Against Borrower Or Its Portfolio...........cccoceviiiniciiiiiiinneennns -5- 1. LaMelza Fails To Obtain A Court Order To Levy Borrower’s Accounts .................... -5- 2. BNY Expressly Denies And Rejects LaMelza’s Notice Of Levy ......coceecveeviinniennnnnnn -6- E. BNY Mellon Fails To Disclose LaMelza’s Notice Of Levy To Lender.........cc.cccocueenneee. -7- F. LaMelza Fails To Notify Lender Of His Claims Until After The FFB Loan Closes........ -8- HI. ARGUMENT .....ooitiiee ects ee sete sabes e ee sae saben esas seas eene ease e nee eane -9- A. Legal Standard Applicable To A Motion For Receivership ........ccccccoveevieeieiniinieennen -9- Lender Has A First Priority Pledge In The Portfolio As A Matter Of Law...................... -9- C. Lender’s First-Priority Pledge In The Portfolio Precludes Appointment Of A Receiver AZ A VAST OF TUAW wuss svenswnnwsssvons cosnsamensssosvanss sve avssmvisves sss aes 5ams esses oes wanes es essa -12 - D. The UVTA And Post-Judgment Statues Do Not Allow Appointment Of A Receiver Under The Circumstances Before The Court........c.cccovveeiiiiiiniinnicniececneeneeceeee -13 - E. Alternative Remedies Protect Any Interest LaMelza May Have In The Portfolio......... -14 - F. If The Court Appoints A Receiver, LaMelza Should Be Ordered To Pay All Expenses Of The Receiver And Post A $5.5 Million Bond. ws assis - 15 - IV. CONCLUSION .....c.oiitiiiiiiii cies sae sree seers sae sass - 15 - i FIRST FOUNDATION BANK’S OPPOSITION TO MOTION FOR APPOINTMENT OF RECEIVER ~N O Y B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SHUMENER, ODSON & OH LLP TABLE OF AUTHORITIES PAGE Cases Alhambra-etc. Mines v. Alhambra G. Mine, 116 Cal. App. 2d 869 (1953). sate ees -2-,-9-,-14- Blue v. Sup. Ct., 147 Cal. APP. 2d 278 (1956)....ceeieeiieeeeeeie eects seater eee sbae sabe ene eesae ns -12 - Branscomb v. JPMorgan Chase Bank N.A., 223 Cal. App. AH BOL {C20N A) «smn ansossn is smmsnss somnsmsosuws ss 055555538 5455555 55555 55555558 85 -2-,-10-,-11- Brown v. Memorial Nat. Home Foundation, 158 Cal. APP. 2d 448 (1958). it eee ete eters sate eaten tee sb ae sbae sabe e nee nees -9- Brunvold v. Victor Johnson & Co., 59 Cal. APP. 2d 75 (1943). eae eee eb beset e staan es -12 - Erskine v. Upham, 56 Cal. APP. 2d 235 (1942)... eee eee eee eee ebte ena ene e ene -12 - Gerry v. Northrup, 102 Cal. Apifie 20 AAD TLDS 1 Youn somunsnomsnsnnsosnss samme sss 05555558 545555556 55555505 355555045 SH557850555 55.30 5955, -12 - Grover v. Bay View Bank, 87 Cal. APP. 4th 452 (2001) .eeeieeieiieeiieeie ects ee e eee estes bee sabe e eee naee saa ees -12 - Hasso v. Hapke, 227 Cal. App. 4th 107 (2014) weenie eects steerer sabe sabes eee saee saa ees -13 - Katsivalis v. Serrano Reconveyance Co., 70 Cal. APP. 3d 200 (1970) ..ccueieeeieeieeeeeeette eee et rs sates estes t ee ssaeenae esse eeee ns -11- Mattern v. Carberry, 186 Cal. Apifie 20 ST CLO cox somunsnms sn msn samsmss sss 555558 54550555:50 50555550 345555045 SHTEH0555 55.30 5955, -12 - McNeil v. Graner, 92 Cal. APP. 2d 371 (1949)... eee ee eee sates estes sate ese ene e eae -14 - Morand v. Superior Court, 38 Cal. APP. 3A 347 (1974) neice eee ete eee sb ee sabe see e nes -9- Rogers v. Smith, 76 Cal. APP. 2d 16 (1946)....coeieeeiieeieee ects tee ste eee atest sate setae eee tae seas -14 - Schut v. Doyle 168 Cal. Apifie 20 GIB. (LOST cons smu omssn wsossnss samsmss sss 0555558 545555550 5054555505 345555045 SH5578S0555 55.30 5555, -12 - Simon Newman Co. v. Fink, 200 Cal. 143 (1928) woveeeeeeieeee ieee eee eee eee eee eee e eee e eset ae ee ee tae ae ee etae ease earae ee eeraee nn -10 - i1 FIRST FOUNDATION BANK’S OPPOSITION TO MOTION FOR APPOINTMENT OF RECEIVER ~N O Y B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SHUMENER, ODSON & OH LLP Statutes Civ. Code § 3439.07(Q) «everett cesses sree ae see sree sheen -13- Code CiV. ProcC., § TOO. TAO ce... eee e este teats ees se esse seas es sees sess sannnnnes -5- Code Ci. ProC., § TOO. 150 cae eee eee eee eee ee testes esse ee te seas es sees sess ssnnnnnas -5- Code Civ. Proc., § 700.160 .....cooiiiiieieeeeeee eee eee ee ie e ve ees eenens -3-,-5-,-6-,-12- Civ. Code § 3439.01 e eee sree sree -13- Civ Code § FAFD.08 sas cunsmmmmusnonmanowsnsnumesn ss assem ss ores ores swiss oss se sys ss vas a ass Oss 5s rss -13- Code Civ. Proc. § S64(D)(1) covert sree eee ee sees -2-,-9- Code Civ. Proc. § 564(b)(4); (6); and. (9) susssmmasmmmassas mss mss sams awasmss oss -9- Code Civ. Proc., § 708.6020 .......eoeuiiiiiiiieiee e cts eects sees sree eee e nes sree eae -13 - 11 FIRST FOUNDATION BANK’S OPPOSITION TO MOTION FOR APPOINTMENT OF RECEIVER ~N O Y B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SHUMENER, ODSON & OH LLP I. INTRODUCTION The appointment of a receiver is a drastic remedy, permitted only in narrow cases upon a showing of, among other things, a real and present danger that the subject property will be lost, destroyed or injured in the hands of the defendant. Plaintiffs Michael LaMelza and Villa Rossa, LLC (collectively, “LaMelza”) seek the appointment of a receiver over that certain portfolio of municipal bonds (the “Portfolio”’) owned by defendant San Miguel Equities, LLC (“Borrower”). That Portfolio is pledged as collateral for a $5.5 million loan (the “FFB Loan”) made by First Foundation Bank (“Lender”). Accordingly, there is no danger that the Portfolio will be lost, destroyed or injured. Indeed, because Lender will remain in custody and possession of the Portfolio, several less drastic remedies more than adequately protect LaMelza’s purported, subordinate rights to the Portfolio. Accordingly, Lender respectfully requests that the Court deny LaMelza’s application and order that the Portfolio be released to Lender forthwith. LaMelza claims an interest in the Portfolio, not because it has any judgment against Borrower (the entity which owns the Portfolio), but because LaMelza obtained a judgment against J. Robert Gilroy (“Gilroy”) after Borrower obtained the Portfolio. Moreover, more than one year before any judgment was obtained by LaMelza against Gilroy, Borrower obtained two loans, one in the amount of $5,400,000 and one in the amount of $100,000 (collectively, the “BNY Loans”), from BNY Mellon, N.A. (“BNY?”"), and pledged the Portfolio to BNY as security for the BNY Loans. The pledge was a first-priority lien on the Portfolio. In February and March 2016, at Borrowers request, BNY made a payoff demand to Lender, agreeing to transfer the Portfolio to Lender if Lender paid off both BNY Loans. Lender paid off both BNY Loans on March 2, 2015, with the proceeds of a $5,500,000 loan made to Borrower (the “FFB Loan”). As a result, Lender obtained a first-priority pledge of the Portfolio as security for the Lender Loan. Thus, while LaMelza’s claim to the Portfolio is inchoate at best, Lender has an indisputable first-priority pledge of the Portfolio, as a matter of California law. Lender has a first-priority pledge in the Portfolio under the doctrine of equitable subrogation. Under the doctrine of equitable subrogation, a lender who advances money to pay off an encumbrance “at the instance of either the owner of the property or the holder of the -1- FIRST FOUNDATION BANK’S OPPOSITION TO MOTION FOR APPOINTMENT OF RECEIVER ~N O Y B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SHUMENER, ODSON & OH LLP encumbrance, ... on the express understanding ... that the advance made is to be secured by a first lien on the property, is not a mere volunteer; and in the event the new security is for any reason not a first lien on the property, the holder of such security, if not chargeable with culpable and inexcusable neglect, will be subrogated to the rights of the prior encumbrancer under the security held by him, unless the superior or equal equities of others would be prejudiced thereby, and to this end equity will set aside a cancellation of such security, and revive the same for his benefit.” Branscomb v. JPMorgan Chase Bank N.A., 223 Cal. App. 4th 801, 806-807(2014). Here, BNY held a first-priority pledge in the Portfolio as security for the BNY Loans. The BNY Loans were made months before LaMelza obtained a judgment against the Gilroy. At Borrower’s request, and without notice of any of LaMelza’s belated, inchoate claims to the Portfolio, Lender paid off the BNY Loans in the amount of $5,500,000 with the express understanding that the FFB Loan would be secured by a first-priority pledge in the Portfolio. Neither BN'Y nor LaMelza disclosed to Lender that LaMelza claimed an interest in the Portfolio. Nor could Lender discover LaMelza’s purported claims because: (i) BNY did not disclose that LaMelza claimed an interest in the Portfolio; (ii) LaMelza failed to obtain a lien in the Portfolio; and (iii) LaMelza did not take any action to give innocent third-parties notice of his claims until after the FFB Loan closed and paid off the BNY Loans. In short, equitable subrogation clearly applies, and Lender should be subrogated to BNY’s first-priority status. Accordingly, and because Lender has a first-priority pledge in the Portfolio, LaMelza cannot demonstrate the necessary elements for a receivership: (i) a joint interest with the defendant in the property; (ii) the property being in danger of being lost, removed or materially injured; (iii) the probability of plaintiff’s right to possession; and (iv) that alternative remedies will not protect the plaintiff’s purported interest. See Code Civ. Proc., § 564(b)(1); Alhambra-etc. Mines v. Alhambra G. Mine, 116 Cal. App. 2d 869, 873 (1953). First, LaMelza does not have a joint interest in the Portfolio with Lender. In fact, LaMelza has no interest in the Portfolio. L.aMelza’s contention that he obtained a lien in the Portfolio by serving a Notice of Levy on BNY is without merit. The Portfolio is held in a BNY account under the name of Borrower only. LaMelza holds no judgment against Borrower, and he _0. FIRST FOUNDATION BANK’S OPPOSITION TO MOTION FOR APPOINTMENT OF RECEIVER ~N O Y B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SHUMENER, ODSON & OH LLP cannot levy or lien assets of a third-party without a court order. Code Civ. Proc., § 700.160 (a court order is required to levy accounts in the name of a third-party). Indeed, LaMelza tacitly recognized that his Notice of Levy was ineffective and void because, when BNY returned the Memorandum of Garnishee stating that it would not hold or freeze any of Borrower’s assets on the ground that the Borrower is not Gilroy, LaMelza did nothing. Second, LaMelza cannot demonstrate that the Portfolio is in danger of being lost, removed or materially injured. To the contrary, Lender’s possession of the Portfolio will prevent any harm to the Portfolio since it is Lender’s sole collateral for the $5.5 million FFB Loan. Third, LaMelza fails to establish that his possession of the Portfolio is probable. In fact, LaMelza admits that his possession of the Portfolio and its proceeds is contingent upon the loans secured by the Portfolio being satisfied. In his moving papers, LaMelza admits as follows: Once the receiver receives the estimated $9 million or so in cash out of proceeds from the insurance policy, he can then use those monies as well as the estimated $2 million held by the Gilroy irrevocable trust, to retire the bank loans. That in turn will remove the encumbrances from the securities owned by Sierra Madre and San Miguel. The receiver can then liquidate the securities to cash, and pay the proceeds to judgment creditors. In the interim, the receiver will collect the substantial income from the securities portfolio, pay the expenses of the receiver, including appropriate debt service to the Banks . . . (Motion to Appoint Receiver p. 10, line 25-p. 11, line 5) (emphasis added). In other words, because even LaMelza concedes the loans secured by the Portfolio (i.e., the FFB Loan) have priority over any of LaMelza’s claims, there is no need to incur the unnecessary and substantial expenses of a receiver. Fourth, LaMelza fails to establish that alternative, less drastic and less expensive remedies will not adequately protect him. Accordingly, Lender respectfully requests that the Court deny LaMelza’s Motion. IL. STATEMENT OF FACTS A. The Portfolio The Portfolio that is the subject of LaMelza’s Motion is comprised of 28 municipal bonds owned by Borrower. (Declaration of Matthew Brunwin filed in support of BNY’s Application for Interpleader (“Brunwin Decl.”), 2-3.). According to BNY’s Verified Cross-Complaint in -3- FIRST FOUNDATION BANK’S OPPOSITION TO MOTION FOR APPOINTMENT OF RECEIVER ~N O Y B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SHUMENER, ODSON & OH LLP Interpleader (“Cross-Complaint”), the Portfolio has a market value of $7,373,470.84 as of February 29, 2016, and the Portfolio’s market value increases each month as a result of interest payments earned on each bond. (Cross-Complaint 13.) BNY distributes the income generated by the Portfolio — ranging from $13,000 to $35,000 each month to Borrower’s account with BNY. (Cross-Complaint | 15.) B. On September 6, 2013, BNY Obtains A First-Priority Pledge In The Portfolio On or about September 6, 2013, BNY made a credit facility available to Borrower in the maximum amount of $7,000,000. (Brunwin Decl., 3.) As of March 2, 2016, Borrower had obtained two loans, one in the amount of $5.4 million and another in the amount $100,000 under the BNY credit facility (the “BNY Loans”). (Declaration of Cindy Tai submitted with Lender’s Opposition (“Tai Decl.”) 2, Ex. F; Declaration of Christopher M. Naghibi submitted with Lender’s Opposition (“Naghibi Decl.”) { 13, Ex. F.) To secure the BNY Loans, Borrower made a first-priority pledge to the Portfolio in favor of BNY. (Brunwin Decl., 3.) To date, the Portfolio is held in a BNY account in the name of Borrower. C. LaMelza’s Judgment, Pending On Appeal, Is Not Against Borrower On or about July 21, 2009, LaMelza filed a Complaint against Sam Lindsay (“Lindsay”), J. Robert Gilroy (“Gilroy”) and others in the Orange County Superior Court Case No. 30-2009- 00180150, entitled LaMelza et al. v. Lindsay, et al. (the “LaMelza Action”), the Hon. Ronald L. Bauer presiding. Borrower is not and has never been a party to the LaMelza Action. In the LaMelza Action, Judge Bauer held that LaMelza— who claims he is an “experienced land developer who knew all the ins and outs of the business” — sold certain land referred to as “Stoneridge” for $20 million which then had an appraised value of only $12.6 million. (RJN Ex. 1.) LaMelza obtained at least a $16 million profit as a result of the sale of Stoneridge. However, LaMelza had “seller’s remorse” and wanted even more money. Accordingly, LaMelza sued his buyer after “[s]ubstantial additional work was done on the project under the auspices of Gilroy- First West Group.” (RJN Ex. 1.) LaMelza contends that he was entitled to the profits from his buyer’s subsequent sale of Stoneridge due to alleged breaches of fiduciary duty by his former employee Lindsay. (/d.) 4 - FIRST FOUNDATION BANK’S OPPOSITION TO MOTION FOR APPOINTMENT OF RECEIVER ~N O Y B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SHUMENER, ODSON & OH LLP Judge Bauer rejected LaMelza’s claims and, on June 17, 2011, entered judgment in favor of Lindsay and the other defendants. LaMelza appealed. Although the Court of Appeal reversed, it remanded only for entry of judgment against Lindsay. Judge Bauer entered judgment against Lindsay. After additional proceedings, Judge Bauer also entered judgment against Gilroy and other defendants. That judgment is now on appeal. (RIN, Ex. 2.) Gilroy’s appeal is fully briefed and awaiting oral argument. (/d.) Given the appeals and reversals that have already occurred in the LaMelza Action, there is no guarantee that LaMelza’s judgment against Gilroy — the basis for LaMelza’s action before this Court — survives appeal. In the event that LaMelza does not prevail on appeal, LaMelza will be required to immediately dismiss this action for fraudulent transfer. D. LaMelza Has No Lien Against Borrower Or Its Portfolio It is undisputed that: (i) LaMelza’s judgment against Gilroy is pending appeal; (ii) LaMelza has no judgment against Borrower; and (iii) LaMelza did not obtain a court order to levy assets held by third-parties such as Borrower. Despite these undisputed facts, LaMelza attempted to levy Borrower's assets, but failed to obtain a lien (see below). 1. LaMelza Fails To Obtain A Court Order To Levy Borrower’s Accounts On July 31, 2015, LaMelza served a Notice of Levy and blank Memorandum of Garnishee on BNY pursuant to Code Civ. Proc. §§ 700.140 and 700.150. (BNY Cross-Complaint Ex. B.) Levies under Code Civ. Proc. §§ 700.140 and 700.150 must comply with Code Civ. Proc. § 700.160, which provides as follows: (a) Except as provided in subdivision (b), a deposit account or safe- deposit box standing in the name of a person other than the judgment debtor, either alone or together with third persons, is not subject to levy under Section 700.140 or 700.150 unless the legal process served on the third party includes a court order authorizing the levy. Code Civ. Proc., § 700.160(a) (emphasis added) The Legislative Committee Comments clearly state the Legislature’s intent to require a court order before levying assets held in the name of a third-party: Under the general rule provided in subdivision (a), a court order is required before the judgment creditor may cause a levy on an account or box not in the name of the judgment debtor. This -5- FIRST FOUNDATION BANK’S OPPOSITION TO MOTION FOR APPOINTMENT OF RECEIVER ~N O Y B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SHUMENER, ODSON & OH LLP requirement is designed to protect the rights of persons whose rights have not been adjudicated and who may not have any relationship to the judgment debtor. (RIN Ex. 3.) Thus, LaMelza’s levy, served without a court order, was void. Code Civ. Proc., § 700.160. 25 BNY Expressly Denies And Rejects LaMelza’s Notice Of Levy After receipt of LaMelza’s void Notice of Levy, BNY requested further information from LaMelza. By e-mail dated August 5, 2015, BNY inquired of LaMelza’s attorney as follows: Dear Mr. Dressler, BNY Mellon has received the above-referenced levy/writ of execution. The Notice of Levy Under Writ of Execution states that the Judgment Debtors are J. Robert Gilroy, Sam Lindsay, and First West-DHS Partners, LP. However, under list item No. 1, you indicate that the property to be levied upon is an account in the name of San Miguel Equities, LLC. Please advise if San Miguel Equities, LLC is also a judgment debtor in this action. Thanks. Best Regards, Beth A. Dodson (Morales Decl., 2, Ex. 1.) In response, LaMelza admitted that he had no judgment against Borrower but contended (erroneously) that he could nevertheless levy Borrower’s accounts: This will respond to your enquiry and will provide some background. The short answer to your question is that San Miguel Equities is not a judgment debtor, but the levy is nonetheless fully effective. k ck ok ook The Uniform Fraudulent Transfer Act permits us to levy directly on the assets fraudulently transferred even though they are not held in the name of the judgment debtor. kk kk (Morales Decl., 2, Ex. 1.) However, LaMelza’s Notice of Levy was not served under the UVTA! and, even if had been, LaMelza did not obtain the required court order to levy the accounts of third-parties. On August 10, 2015, BNY returned a completed Memorandum of Garnishee stating, under penalty of perjury, that BNY held no assets subject to LaMelza’s judgment. (BNY Cross- 1 The Uniform Fraudulent Transfer Act is now called the Uniform Voidable Transfer Act (“UVTA”). -6- FIRST FOUNDATION BANK’S OPPOSITION TO MOTION FOR APPOINTMENT OF RECEIVER ~N O Y B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SHUMENER, ODSON & OH LLP Complaint, Ex. C.) In tacit admission that LaMelza’s Notice of Levy on BNY was void, LaMelza took no steps to obtain a court order or to dispute BNY’s Memorandum of Garnishee. E. BNY Mellon Fails To Disclose LaMelza’s Notice Of Levy To Lender In December 2015, Borrower submitted a loan application to Lender to refinance the BNY Loans which, at that time, had a balance of $5,500,000 (the “FFB Loan”). (Naghibi Decl., 5.) As part of the consideration to make the FFB Loan, Borrower pledged the Portfolio and BNY agreed to release and transfer the Portfolio to TD Ameritrade once both BNY Loans were paid. (Naghibi Decl., | 5; Declaration of J. Robert Gilroy submitted in Response to BNY’s Application for Interpleader (“Gilroy Decl.”), 5-8, Ex. A.) In February 2016, Lender contacted BNY to inform BNY that Lender was making the FFB Loan to Borrower; that the proceeds of the FFB Loan were to payoff the BNY Loans; and that the FFB Loan was to be secured by the Portfolio, which BNY was required to release and transfer to TD Ameritrade. Specifically, on February 17, 2016, Lender’s Loan Administrator Cindy Tai contacted BNY’s representative Cyndy Cordon to obtain a payoff demand of the BNY Loans and any and all other conditions required to transfer the Portfolio to Lender’s designee, TD Ameritrade, to secure the FFB Loan. (Tai Decl., {{2.) BNY (Cyndy Cordon) represented to Ms. Tai that BNY would release and transfer the Portfolio to Lender’s designee if the $5,500,000 owed by Borrower to BNY under the BNY Loans was paid in full. (Tai Decl., {2.) At no time did BNY inform Lender that LaMelza had asserted a claim to the Portfolio; that LaMelza had served BNY with a Notice of Levy purporting to levy Borrower’s Portfolio; or that BN'Y had returned the Memorandum of Garnishee and rejected LaMelza’s attempt to levy on the Portfolio. (Tai Decl., 3.) Based upon BNY’s representations, the FFB Loan closed on February 24, 2016. (See Naghibi Decl., 2, Exs. A-C.) On March 2, 2016, Lender funded the FFB Loan and paid off the BNY Loans. (Naghibi Decl., { 14, Tai Decl., {2; Gilroy {7.) Borrower instructed BNY that upon pay off of the BNY Loans, BNY was required to release and transfer the Portfolio to TD Ameritrade. To date, despite repeated demands for the transfer of the Portfolio to TD Ameritrade, BNY failed to do so. _7- FIRST FOUNDATION BANK’S OPPOSITION TO MOTION FOR APPOINTMENT OF RECEIVER ~N O Y B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SHUMENER, ODSON & OH LLP F. LaMelza Fails To Notify Lender Of His Claims Until After The FFB Loan Closes Prior to the closing of the FFB Loan on February 24, 2016 and its funding on March 2, 2016, LaMelza gave no notice (actual or constructive) to innocent third-parties, like Lender, of LaMelza’s purported claims against Borrower or the Portfolio. (Naghibi Decl., {{8.) At no time did LaMelza file a UCC Statement with the California Secretary of State against Borrower or the Portfolio to place third-parties (like Lender) on notice of potential claims. (/d.) And, although LaMelza contends that his void Notice of Levy gave rise to a lien, he did nothing to perfect his liens against third-parties. LaMelza’s idleness is inexplicable. Although LaMelza’s communication with BNY demonstrates that LaMelza believed he had facts to support his allegations of fraudulent transfer as early as August 2015, LaMelza did nothing between August 2015 and the closing of the FFB Loan in February 2016 to pursue his remedies. LaMelza had every opportunity to enforce his purported rights to the Portfolio or to give notice of his claims to innocent third-parties, like Lender; instead, LaMelza stood idle until after the FFB Loan closed. G. LaMelza Refuses To Appear For Deposition Or Consider Alternative Remedies Although LaMelza seeks the drastic remedy of a receiver, LaMelza refuses to appear for deposition to testify regarding the allegations of his Complaint, his answer to BNY’s Cross- Complaint or the allegations raised in this Motion. On April 20, 2016, Lender served the Notice of Deposition of LaMelza. (Morales Decl., 4-5.) However, LaMelza has refused to appear for deposition and, instead, filed a Motion for Protective Order for no other reason but to avoid producing testimony and documents while seeking drastic relief from the Court. Moreover, Lender has proposed alternatives that will protect LaMelza’s purported interest without the need of a receiver — i.e., Lender retains custody and possession of the Portfolio and agrees not to disburse the Portfolio’s income (except for debt service on the FFB Loan) until LaMelza either establishes a lien or obtains a preliminary injunction. LaMelza rejected such alternative without setting forth any reason why such alternative will not protect LaMelza’s purported rights. _8- FIRST FOUNDATION BANK’S OPPOSITION TO MOTION FOR APPOINTMENT OF RECEIVER ~N O Y B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SHUMENER, ODSON & OH LLP III. ARGUMENT A. Legal Standard Applicable To A Motion For Receivership A party seeking the appointment of a receiver must establish by a preponderance of the evidence a “joint interest with [the] defendant in the property; that the same was in danger of being lost, removed or materially injured, and that plaintiff’s right to possession was probable.” See E.g., Code Civ. Proc. § 564(b)(1); Alhambra-etc. Mines v. Alhambra G. Mine, 116 Cal. App. 2d 869, 873 (1953).2 Because, “[i]t is elementary that the remedy of receivership is regarded as drastic and severe,” even if the moving party satisfies its initial burden, a receiver will not be appointed where less onerous remedies are available. Brown v. Memorial Nat. Home Foundation 158 Cal. App. 2d 448, 455 (1958); Morand v. Superior Court, 38 Cal. App. 3d 347, 351 (1974) (“It is said by the state’s courts that the appointment of a receiver is ‘an extraordinary and harsh,’ and ‘delicate,’ and “drastic,” remedy to be used ‘cautiously and only where less onerous remedies would be inadequate or unavailable”). Similarly, if the moving party fails to demonstrate that a receiver is “obviously necessary” to protect its interest, then no receiver should be appointed. Id. (“a party to an action should not be ‘subjected to the onerous expense of a receiver, unless . . . his appointment is obviously necessary to the protection of the opposite party”). Here, LaMelza fails to demonstrate that the appointment of a receiver is appropriate because, among other things: (1) Lender has a first-priority pledge in the Portfolio; (ii) LaMelza has no judgment against Borrower or the Portfolio; (iii) LaMelza has no lien against the Portfolio; (iv) LaMelza gave no notice of his claims to innocent third-parties such as Lender until after the FFB Loan closed; and (v) LaMelza’s judgment against Gilroy is on appeal and may be reversed. B. Lender Has A First-Priority Pledge In The Portfolio As A Matter Of Law Lender has a first-priority pledge in the Portfolio because Lender (i) paid $5.5 million to BNY to pay off the BNY Loans that were secured by a first-priority pledge in the Portfolio; and 2 LaMelza also cites to Code Civ. Proc., § 564(b)(4), (6), and (9) because “Defendants San Miguel . . . are insolvent and indebted to LaMelza” and “to preserve the status quo and prevent further waste of the property at issue” but neither contentions are supported by evidence. LaMelza fails to establish that Borrower is indebted to LaMelza or insolvent (i.e., that it is not paying its debts when due) or that there is waste to any property. 9. FIRST FOUNDATION BANK’S OPPOSITION TO MOTION FOR APPOINTMENT OF RECEIVER ~N O Y B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SHUMENER, ODSON & OH LLP (ii) gave valuable consideration (i.e., $5.5 million) for that pledge, in good faith and without notice of LaMelza’s claims. Lender paid $5.5 million to BNY to refinance the BNY Loans that were secured by a first- priority pledge in the Portfolio. Under California’s doctrine of equitable subrogation, when a new lender pays off a prior loan secured by property, the new lender is entitled to the same priority as was held by the lender whose loan was paid off. The Supreme Court has stated the general rule applicable to a lender’s entitlement to equitable subrogation as follows: *“ ‘One who advances money to pay off an encumbrance on realty[?] at the instance of either the owner of the property or the holder of the encumbrance, either on the express understanding, or under circumstances from which an understanding will be implied, that the advance made is to be secured by a first lien on the property, is not a mere volunteer; and in the event the new security is for any reason not a first lien on the property, the holder of such security, if not chargeable with culpable and inexcusable neglect, will be subrogated to the rights of the prior encumbrancer under the security held by him, unless the superior or equal equities of others would be prejudiced thereby, and to this end equity will set aside a cancellation of such security, and revive the same for his benefit.” Branscomb, 223 Cal. App. 4th at 806-807. Branscomb is on point and dispositive. In Branscomb, the borrower obtained two loans from two banks in the amounts of $5.1 million and $1.1 million, respectively, secured by a first and second deed of trust. Id. at 804. After the banks’ loans were made, borrower obtained a third loan from plaintiff in the amount of $500,000 which had a third-priority deed of trust on the property. Id. The banks then refinanced their loans for the same amounts (i.e., $5.1 million and $1.1 million). Id. at 804-05. The borrower intended that the banks maintain their first and second priority positions. To accomplish this, the refinancing escrow agent asked plaintiff for its loan payoff demand. Plaintiff responded that the loan had a zero balance and its lien would be re- conveyed. Id. at 805. Accordingly, the banks refinanced their loans, reconveyed their original deeds of trust and recorded new deeds of trust. Id. However, plaintiff’s deed of trust was not = See Simon Newman Co. v. Fink, 206 Cal. 143, 147 (1928) (equitable subrogation applies equally to real and personal property such as corporate stock). -10 - FIRST FOUNDATION BANK’S OPPOSITION TO MOTION FOR APPOINTMENT OF RECEIVER ~N O Y B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SHUMENER, ODSON & OH LLP reconveyed. After borrower defaulted on the banks’ loans, plaintiff filed a lawsuit for judicial foreclosure based on its alleged first-priority lien. The Branscomb court rejected plaintiff's claim that it had a first-priority lien and, instead, held that the banks held first and second priority liens based on equitable subrogation. The court applied the doctrine of equitable subrogation “[b]ecause courts look with favor on equitable liens [citation], [and, therefore,] equity will generally ‘give a lender the security for which he bargained in the situation where there is mistake or fraud with respect to an intervening right which cuts off a preexisting encumbrance which has been satisfied by the loan proceeds.” Id. at 807, quoting Katsivalis v. Serrano Reconveyance Co., 70 Cal. App. 3d 200, 213 (1970). The Branscomb court held that the banks’ original loans were paid off at the borrower’s request and it was intended that the banks obtain new first and second deeds of trust in return. /d. at 807. Additionally, plaintiff knew that its loan would be junior and did not expect a first-priority lien. Equitable subrogation was proper given the parties’ intent and expectations. Here, as in Branscomb where the banks paid off loans with a first-priority lien at the borrower’s request, Lender paid $5.5 million to BNY, at Borrower’s request, to pay off the BNY Loans. Borrower and Lender clearly intended that Lender’s FFB Loan would be secured by the Portfolio with the same first-priority lien that previously secured the BNY Loans. LaMelza admits that BNY had a “first position lien” on the Portfolio. (Hartmann Decl. | 6, lines 13-17.) Thus, even if LaMelza had obtained a lien on the Portfolio (which he did not), LaMelza could not have expected his lien to prime BNY’s “first position lien.” Equitable subrogation entitles Lender to the same “first position lien” that BNY enjoyed to give effect to the parties’ intent. Doing so does not prejudice LaMelza because his claims, which were previously subordinate to the $5.5 million BNY Loans, are now subordinate to the $5.5 million FFB Loan. Moreover, the facts here that demonstrate the absence of culpable and inexcusable neglect or that plaintiff will be prejudiced by equitable subrogation are even more compelling than in Branscomb. Whereas, in Branscomb, the court held that equitable subrogation applied despite the banks’ actual notice of the plaintiff's lien, here, LaMelza gave absolutely no notice of his claims to the Portfolio to innocent third-parties such as Lender. Similarly, the equities overwhelmingly -11 - FIRST FOUNDATION BANK’S OPPOSITION TO MOTION FOR APPOINTMENT OF RECEIVER ~N O Y B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SHUMENER, ODSON & OH LLP favor Lender because: (i) LaMelza has no lien on the Portfolio; (ii) LaMelza is not a creditor of Borrower; (iii) LaMelza is not a good faith encumbrancer?; (iv) LaMelza failed to take action to enforce the Notice of Levy served on BNY; (v) LaMelza failed to obtain a court order authorizing his Notice of Levy against Borrower, a third party, (vi) LaMelza provided no notice to Lender or other third-parties regarding his claim (i.e., filing a UCC statement or seeking an order of the court), and (vii) BNY did not disclose LaMelza’s Notice of Levy to Lender prior to the pay off of the BNY Loans. In short, Lender could not have discovered any competing interest in the Portfolio because LaMelza failed to obtain a lien in the Portfolio or give notice to innocent third- parties of his claims. C. Lender’s First-Priority Pledge In The Portfolio Precludes Appointment Of A Receiver As A Matter Of Law Because Lender holds a first-priority pledge in the Portfolio, LaMelza cannot satisfy his evidentiary burden to establish: (1) a joint interest with the defendant in the property; (ii) the property is in danger of being lost, removed or materially injured; and (iii) plaintiff’s right to possession is probable. First, LaMelza cannot demonstrate a joint interest in the Portfolio with Lender because LaMelza holds no interest in the Portfolio. LaMelza’s Notice of Levy was void because LaMelza failed to obtain the court order required by Civ. Proc. Code § 700.160. Grover v. Bay View Bank, 87 Cal. App. 4th 452,457 (2001) (“[w]hen a deposit account stands in the name of a person other than the judgment debtor, however, section 700.160 requires a court order authorizing levy.”).> Second, the Portfolio is not in danger of being lost, removed or materially injured. The Portfolio has been in BNY’s possession since 2013. Upon BNY’s transfer of the Portfolio to Lender’s designee, Lender will maintain custody of the Portfolio as security for the FFB Loan. If 4 (Schut v. Doyle (1959) 168 Cal. App. 2d 698, 702-703 [a judgment creditor may hold a general lien against property but is not a good faith encumbrancer because it does not give any consideration for its lien].) 2 In correspondence to BNY, LaMelza cited to Brunvold v. Victor Johnson & Co., 59 Cal. App. 2d 75 (1943); Blue v. Sup. Ct., 147 Cal. App. 2d 278 (1956); Mattern v. Carberry, 186 Cal. App. 2d 570 (1960); Erskine v. Upham, 56 Cal. App. 2d 235, 250 (1942); Gerry v. Northrup, 102 Cal. App. 2d 449 (1951). None of these cases hold that a notice of levy that fails to comply with Code of Civ. Proc., § 700.160 is effective. - 12. FIRST FOUNDATION BANK’S OPPOSITION TO MOTION FOR APPOINTMENT OF RECEIVER ~N O Y B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SHUMENER, ODSON & OH LLP the FFB Loan is satisfied in full, and the Court so orders, Lender will provide notice to LaMelza prior to releasing the Portfolio. Alternatively, if the Court finds that LaMelza has a lien in the Portfolio, and the Court so orders, Lender will release the Portfolio to LaMelza upon satisfaction of the FFB Loan. Third, because LaMelza has no lien or other interest in the Portfolio, he does not and cannot establish his possession of the Portfolio is probable. D. The UVTA And Post-Judgment Statues Do Not Allow Appointment Of A Receiver Under The Circumstances Before The Court Equally without merit is LaMelza’s contention that Code Civ. Proc., § 708.620 and the UVTA allow for the appointment of a receiver. Under Code Civ. Proc., § 708.620, a receiver is only permitted when “a writ of execution would not reach certain property and other remedies appear inadequate.” Code Civ. Proc., § 708.620 (Legislative Committee Comments). Here, LaMelza has not established that other remedies are inadequate. The UVTA also does not authorize appointment of a receivership under the facts of this case. An appointment for a receiver under the UVTA may not be appointed when the property at issue 1s subject to a lien in favor of a third-party that paid valuable consideration in good faith for the lien. Civ. Code §§ 3439.07(a) (relief under the UVTA is “subject to the limitations in [Civil Code] Section 3439.08); 3439.08(a) (“A transfer or obligation is not voidable under paragraph (1) of subdivision (a) of Section 3439.04, against a person that took in good faith and for a reasonably equivalent value given the debtor or against any subsequent transferee or oblige.”); Hasso v. Hapke, 227 Cal. App. 4th 107, 126 (2014) (“Because property subject to a valid lien does not constitute an ‘asset’ within the meaning of Civil Code section 3439.01, subdivision (a)(1), and a ‘transfer’ within the meaning of Civil Code section 3439.01, subdivision (i) means the transfer of an ‘asset,’ there was no ‘transfer’ to trigger the application of Civil Code sections 3439.04 and 3439.05.”.) Accordingly, none of the remedies (including a receiver) can be invoked against Portfolio because it is subject to a valid lien held by Lender. Id. Indeed, LaMelza admits that the Portfolio is subject to valid liens in favor of third-party -13- FIRST FOUNDATION BANK’S OPPOSITION TO MOTION FOR APPOINTMENT OF RECEIVER ~N O Y B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SHUMENER, ODSON & OH LLP banks (i.e., Lender) which gave valuable consideration in good faith for a security interest in the Portfolio. LaMelza’s Motion p. 2:6-7 (“The third party banks, which provided this new money, now have blanket liens on Gilroy’s securities (and other assets).”). The facts clearly demonstrate that Lender gave valuable consideration when it paid off the BNY Loans in the amount of $5,500,000. And, Lender acted in good faith — i.e., without notice of any claim to the Portfolio. Even assuming arguendo that LaMelza had a claim to the Portfolio, given BNY’s failure to disclose LaMelza’s Notice of Levy coupled with LaMelza’s inexcusable failure to pursue his purported remedies against the Portfolio, Lender was not on notice of LaMelza’s claims. E. Alternative Remedies Protect Any Interest LaMelza May Have In The Portfolio Since the appointment of a receiver is a drastic remedy, if there is any other remedy that is less severe which will adequately protect the rights of the parties, the court should not appointment a receiver. Alhambra, 116 Cal. App. 2d 869. Here, there are other, much less severe remedies that would protect LaMelza’s purported (albeit subordinate) interest in the Portfolio. For instance, a receiver is not permitted when an attachment lien will sufficiently protect the party seeking the receiver. See Rogers v. Smith, 76 Cal. App. 2d 16 (1946). Here, as in Rogers where the court held that an attachment lien will adequately protect a party, a Court ordered lien will more than adequately protect LaMelza’s subordinate interest in the Portfolio. An attachment lien will protect LaMelza’s interest because it will require the Portfolio to be released to LaMelza after the FFB Loan is fully satisfied. Similarly, where an injunction will adequately protect a party’s right, a receiver will not be appointed. McNeil v. Graner 92 Cal. App. 2d 371 (1949). Here, once Lender obtains custody and possession of the Portfolio, an injunction precluding the release of the Portfolio to Borrower or Gilroy pending the outcome of this action more than sufficiently protects LaMelza’s claims to the Portfolio.® Such relief is particularly appropriate where, as here, neither Borrower nor any of the other alleged insiders are seeking possession of the Portfolio. In sum, LaMelza fails to satisfy his burden to show that these alternative remedies will not e In no event should injunctive relief restrain Lender from applying any portion of the Portfolio necessary to satisfy the obligations under the FFB Loan, as to do so would effectively confer on LaMelza a lien in the Portfolio senior to the first-priority lien held by Lender. -14 - FIRST FOUNDATION BANK’S OPPOSITION TO MOTION FOR APPOINTMENT OF RECEIVER ~N O Y B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SHUMENER, ODSON & OH LLP sufficiently protect his purported interest in the Portfolio. F. If The Court Appoints A Receiver, LaMelza Should Be Ordered To Pay All Expenses Of The Receiver And Post A $5.5 Million Bond A receivership is a drastic remedy even under the most compelling cases. This case is nowhere near compelling and poses a significant risk of irreparable harm to innocent third-parties like Lender that have superior rights to LaMelza. Nevertheless, if the Court is inclined to appoint a receiver, it should condition such appointment on LaMelza paying all costs and expenses of the receiver and posting a $5.5 million bond to protect Lender’s rights. LaMelza should be ordered to pay all costs and expenses of a receiver and post a $5.5 million bond because of less onerous and costly remedies are available; the costs and expenses should not be borne by innocent third-parties such as Lender who has a first-priority pledge in the Portfolio and its income that should be burdened with receiver costs and expenses; and because LaMelza admits that the loans secured by the Portfolio take priority over LaMelza’s belated inchoate claims. Moreover, the risk of harm to Lender is significant because it does not have the Portfolio which is the only collateral for the FFB Loan. Conversely, there is no risk to LaMelza because there is no guarantee his judgment will not be reversed on appeal or that he will prove any of his claims in this action and, even if he does, his rights are subordinate to Lender. Iv. CONCLUSION Based on the foregoing, Lender respectfully requests that the Court deny LaMelza’s motion for the appointment of receiver and order BNY to release and transfer the Portfolio to Lender’s designee, TD Ameritrade. However, if the Court appoints a receiver, Lender respectfully requests that the Court order LaMelza to pay all costs and expenses of the receiver and post a bond in an amount not less than $5.5 million. Dated: May 2, 2016 SHUMENER ON & OH LLP By: BETTY MSHUMENER.. EDW O. MORALES Attorneys for Cross-Complainant and Counter- Defendant in Interpleader First Foundation Bank, a California State charted bank -15 - FIRST FOUNDATION BANK’S OPPOSITION TO MOTION FOR APPOINTMENT OF RECEIVER wv pA W N O 0 0 ~~ A 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF LOS ANGELES I am employed in the City of Los Angeles, in the County of Los Angeles, State of California. I am over the age of 18 and not a party to the within action. My business address is 550 South Hope Street, Suite 1050, Los Angeles, CA 90071. On May 2, 2016, I served the following document(s): FIRST FUNDATION BANK'S OPPOSITION TO PLAINTIFFS’ MOTION FOR APPOINTMENT OF RECEIVER on the interested parties in this action by delivering a true copy of the foregoing papers to: [1] (BY MAIL, 1013a, 2015.5 C.C.P.) I deposited such envelope in the mail at Los Angeles California. The envelope was mailed with postage thereon fully prepaid. I am readily familiar with the firm’s practice for collection and processing correspondence for mailing. Under that practice, this document will be deposited with the U.S. Postal Service on this date with postage thereon fully prepaid at Los Angeles, California 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 deposit for mailing in affidavit. [1] *(BY ELECTRONIC MAIL) As follows: [caused the above-referenced documents(s) to be transmitted by electronic mail to its intended recipient(s) at the e-mail addresses indicated above. [X] (BY ELECTRONIC MAIL) As follows: I caused the above-referenced documents(s) to be transmitted by electronic mail to its intended recipient(s) at the e-mail addresses indicated above VIA E-Serve through OneLegal. [X] (VIA OVERNIGHT DELIVERY) As follows: I placed said sealed envelope for collection on the date hereof following ordinary business practices for overnight delivery via Overnight Express and/or Federal Express to the offices of the addressee noted above. [X] (STATE) I declare under penalty of perjury under the laws of the State of California that the above is true and correct. Executed on May 2, 2016, at Los Angeles, CA. /s/ Janet Curley Janet Curley wv H N OO 0 3 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SERVICE LIST VIA E-SERVICE VIA OVERNIGHT Robert K. Sall, Esq. Dennis Hartmann, Esq. Suzanne Burke Spencer, Esq. Sall Spencer Callas & Krueger 32351 Coast Highway Laguna Beach, CA 92651 Email: rsall@sallspencer.com sburke@sallspencer.com Attorneys for Defendants/Cross-Defendants J. Robert Gilroy and Anne Gilroy and Defendants First West Capital Corporation and Sierra Madre Investors, LP Law Offices of Dennis Hartmann 1600 Camden Avenue, Suite 103 Los Angeles, CA 90025 Email: hartmann@steelesystems.com Attorneys for Plaintiff/Cross- Defendants/Cross-Complainants Michael LaMelza and Villa Rossa, LL.C VIA OVERNIGHT Thomas W. Dressler, Esq. The Dressler Law Group, LLP 40 North Altadena Dr., Suite 105 Pasadena, CA 91107 Email: twdressler@dresslaw.com twdressler7(@gmail.com Attorneys for Plaintiffs/Cross- Defendants/Cross-Complainants Michael LaMelza and Villa Rossa, LLC VIA E-SERVICE Julie M. McCoy, Esq. Law Office of Julie M. McCoy 5001 Birch Street, Suite 19 Newport Beach, CA 92660 Email: Julie@JulieMcCoyLaw.com Attorneys for Defendants/Cross-Defendants San Miguel Equities, LLC; Christopher Gilroy; Gregory Gilroy; Lisa Winkler; and Timothy Gilroy VIA E-SERVICE Jay D. Adkisson, Esq. Riser Adkisson LLP 100 Bayview Circle, Suite 210 Newport Beach, CA 92660 Email: Jay@Risad.com Attorneys for Defendants/Cross-Defendants San Miguel Equities, LLC; Christopheer Gilroy; Gregory Gilroy; Lisa Winkler; and Timothy Gilroy VIA E-SERVICE Michael T. Taurek, Esq. Green & Hall 1851 E. 1% Street, 10 Floor Santa Ana, CA 92705 Email: mtaurek(@greenhall.com Attorneys for Defendant Richard E. Jackson, individually and as Trustee VIA E-SERVICE Carol S. Zaist, Esq. Newmeyer & Dillion LLP 895 Dove St., 5 Floor Newport Beach, CA 92660 Email: Carol.zaist@ndlf.com Attorneys for Defendant Premier Trust, Inc., individually and as Trustee VIA E-SERVICE Ronald M. St. Marie, Esq. Doll Amir Eley 1888 Century Park East, Suite 1850 Los Angeles, CA 90065 Email: rstmarie@dollamir.com gdoll@dollamir.com ccmccabe@dollamir.com kferguson@dollamir.com Attorneys for Defendant Barrington Bank and Trust Co., N.A. VIA OVERNIGHT Todd C. Toral, Esq. Benjamin W. Turner, Esq. DLA Piper LLP 2000 Avenue of the Stars Suite 400, North Tower Los Angeles, CA 90067-4704 Email: todd.toral@dlapiper.com Benjamin.turner@dlapiper.com Attorneys for Defendant/Cross-Complainant BNY Mellon N.A.