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Full title: Opposition to (related document(s): 103 Opposition filed by Creditor California Attorney Lending II, Inc.) [Included Zoom Information] Filed by Creditor California Attorney Lending II, Inc. (Attachments: # 1 Declaration) (Hogan, Marshall) (Entered: 01/20/2021)

Document posted on Jan 19, 2021 in the bankruptcy, 9 pages and 0 tables.

Bankrupt11 Summary (Automatically Generated)

9 I. STATEMENT OF FACTS 10 A. CAL II Lends Funds to G&K and Obtains a First Priority Blanket Security 11 Interest in All Assets of G&K. LAW OFFICES600AB,S1400 NTON LVD UITE M,C92626-7689 TA ESA ALIFORNIA 111234 soof ltehlye tOoC paApttoLos riIntIie oyinss (wa“ hCcooo msdpyme Dceireaccliilaz.l”e ) li en¶n c4do.e nrT,t ihnleigc eleonnacsneysd f eauerne l dimteigra adttheio et nol.Beginning in 2011, CAL II and G&K entered into credit arrangements for the purpose 24 funding G&K’s law firm operations and was secured against, among other things, G&K’s rights t25 payment for its representation of clients in various contingency fee cases.Girardi, th26 principal of G&K, acted as guarantor of the loan and provided a non-exclusive list to CAL II of a27 cases (“Case List”) in which G&K expected fees (“Expected Fees”).In recognition of CAL II’s continuing lie3 against the G&K assets perfected retroactively to CAL II’s earliest UCC-1, Girardi intermittentl4 updated the G&K Case List to reflect new cases in which G&K had been retained and old case5 which had been settled or dismissed. 11 B. Compensation Owed to G&K for Its Past Work in Quantum Meruit Belongs LAW OFFICES600AB,S1400 NTON LVD UITE M,C92626-7689 TA ESA ALIFORNIA 111234 distribuItfio tnh ios fC tthooeu t rhnt eedt e Eacssltsianetteses . o

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1 SNELL & WILMER L.L.P. Clifford S. Davidson, Bar No. 246119 2 csdavidson@swlaw.com Keith M. Gregory, Bar No. 117837 3 kgregory@swlaw.com Marshall J. Hogan, Bar No. 286147 4 mhogan@swlaw.com 350 South Grand Avenue, Suite 3100 5 City National 2CAL Los Angeles, California 90071 6 Telephone: 213.929.2500 Facsimile: 213.929.2525 7 WOODS OVIATT GILMAN LLP 8 William F. Savino (pro hac vice forthcoming) wsavino@woodsoviatt.com 9 1900 Main Place Tower 350 Main Street 10 Buffalo, NY 14202 Telephone: 716.248.3200 11 Facsimile: 716.854.5100 B,S1400 N LVD UITE C92626-7689 ALIFORNIA 1123 ACattloifronrenyisa fAotrt oSrenceuyr eLde CndreinUdgiNt oIIIrT, IEnDc. STATES BANKRUPTCY COURT TO,A 14 600A NMTA ES CENTRAL DISTRICT OF CALIFORNIA –LOS ANGELES DIVISION OS 15 C 16 In re: Case No. 20-21022-BR 17 GIRARDI KEESE dba THOMAS Chapter 7 18 VINCENT GIRARDI, CALIFORNIA ATTORNEY 19 Involuntary Debtor LENDING II, INC.’S OPPOSITIO TO MOTION FOR RELIEF FRO 20 STAY [ECF NO. 31]; JOINDER IN CHAPTER 7 TRUSTEE’S 21 OPPOSITION TO MOTION FOR RELIEF FROM STAY [ECF NO. 22 101] 23 Date: January 26, 2021 Time: 10:00 a.m. 24 Place: Ctrm 1668, via ZOOM Website: 25 https://cacb.zoomgov.com/j/1607815 Meeting Number: [1607815035] 26 Password: 123456 27 Telephone conference lines for audio only: 28 1 (669) 254 5252 US (San Jose)

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1 First position secured creditor (and simultaneously judgment creditor) California Attorne 2 Lending II, Inc. (“CAL II”) hereby opposes (“Opposition”) the Motion for Relief from th 3 Automatic Stay (the “RFS Motion”) under Section 362 of title 11 of the United States Cod4 (“Bankruptcy Code”) filed in the above-captioned bankruptcy case (“Case”) by Frantz Law Grou 5 APLC (“Frantz”) on December 30, 2020 [ECF No. 31]. As a threshold argument, CAL II joins i6 and adopts herein all opposition to the RFS Motion by the chapter 7 trustee in this Case, Elissa 7 Miller, Esq. (the “Trustee”). The RFS Motion should further be denied for the reasons set forth i8 this Opposition. 9 I. STATEMENT OF FACTS 10 A. CAL II Lends Funds to G&K and Obtains a First Priority Blanket Security 11 Interest in All Assets of G&K. LAW OFFICES600AB,S1400 NTON LVD UITE M,C92626-7689 TA ESA ALIFORNIA 111234 soof ltehlye tOoC paApttoLos riIntIie oyinss (wa“ hCcooo msdpyme Dceireaccliilaz.l”e ) li en¶n c4do.e nrT,t ihnleigc eleonnacsneysd f eauerne l dimteigra adttheio et nol. a tDwhees c lolaafwr aC tfiaiorlmnif oos rf(n Psiuaac,u hla Cnadso dhmye arienk, e SGsu ilpropaaronOS 15 Keese, “G&K”) and are personally guaranteed by the law firm principal attorneys (such as herC 16 Thomas V. Girardi, “Girardi”). Id. CAL II is secured by a first priority lien upon all assets of th17 G&K (perfected by the filing of a UCC-1 against the G&K and Girardi), including G&K’s right t18 receive payment from the contingency fee cases existing on the date of the loan, as well as thos19 acquired thereafter. Id. ¶¶ 5-6 & Ex. 1. CAL II’s lending arrangement is very similar to an account20 receivable lending arrangement at an hourly practice firm and is payable, generally, over a perio21 of years. Id. ¶ 4. Payment is not contingent on the success of any of the cases and is an absolut22 obligation of the law firm and the principal/guarantors. Id. 23 Beginning in 2011, CAL II and G&K entered into credit arrangements for the purpose 24 funding G&K’s law firm operations and was secured against, among other things, G&K’s rights t25 payment for its representation of clients in various contingency fee cases. Id. ¶ 5. Girardi, th26 principal of G&K, acted as guarantor of the loan and provided a non-exclusive list to CAL II of a27 cases (“Case List”) in which G&K expected fees (“Expected Fees”). Id. CAL II duly filed a blank28 UCC-1 against G&K. See id. ¶¶ 5-6 & Ex. 1. Throughout the years that followed, CAL II and th

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1 Debtor entered into several iterations of the credit arrangement in which the Debtor increased th2 principal amount of the debt to up to $8 million. Id. In recognition of CAL II’s continuing lie3 against the G&K assets perfected retroactively to CAL II’s earliest UCC-1, Girardi intermittentl4 updated the G&K Case List to reflect new cases in which G&K had been retained and old case5 which had been settled or dismissed. Id.¶ 7. Included on the G&K Case List was, most importantl6 the “Porter Ranch Litigation”. Id. 7 B. G&K and Frantz Form a Joint Venture to Undertake Representation of Ove8 8,000 Plaintiffs in the Porter Ranch Litigation 9 In October 2015, an underground storage well at Southern California Ga10 Company’s/Sempra Energy’s Aliso Canyon Storage Facility suffered a blowout and resulting ga11 leak, which lasted for 111 days. More than 100,000 tons of methane and other poisonous gase LAW OFFICES600AB,S1400 NTON LVD UITE M,C92626-7689 TA ESA ALIFORNIA 111234 wRaenrec hr ewAleeparspeer edov xiainmctuoaa ttteheldey . a3t5m,0o0sp0h pelraei,n atinfdfs thhoauvsea nfidles do fs uhiot mine st haen dP obrutseirn eRsasnecs hi nL aitnigda atiroonu,n dal lPeogritneCOS 15 negligence and other misconduct on the part of the Southern California Gas Company and othe16 defendants. Frantz is currently counsel for over 8,000 plaintiffs, with the first complaint filed o17 December 8, 2015 (Los Angeles Superior Court Case No. BC602996). After filing its first lawsui18 on or about December 9, 2015, Frantz and G&K agreed to jointly represent clients in the Port19 Ranch Litigation. 20 In his December 30, 2020 declaration filed in this Case [ECF No. 31-2], James P. Frant21 the founder and chief executive officer of Frantz, stated that G&K and his firm “ultimately agree22 to equally pay for marketing costs and case management expense, devote equal time to the case23 and to jointly share and all attorneys’ fees recovered. [G&K and Frantz] also agreed that all client24 in the [Porter Ranch] Litigation represented by either firm in any manner would be jointl25 represented by the two firms for all purposes.” ECF No. 31-2 ¶¶ 8-9. 26 27 28

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1 II. LEGAL ARGUMENT 2 A. Future Fees Incurred in the Porter Ranch Litigation Constitute Income of thDissolved Joint Venture and Are Estate Property 3 Frantz is admittedly both a creditor of G&K and co-counsel with G&K, pursuant to certai4 retainer agreements, in representing over 8,000 victims within Porter Ranch Litigation. Mor5 importantly, as explained in the Kentucky Law Journal article, Vol. 98, p. 461, 2009-1 6 Professional Responsibilities of Co-Counsel: Joint Venturers or Scorpions in a Bottle? by Dougla 7 R. Richmond, the two law firms are handling the pursuit of, funding for, and recovery in the Port 8 Ranch Litigation as a “joint venture” and are therefore subject to the holding in the landmark cas9 of Jewel v. Boxer, 156 Cal. App. 3d 171 (1984). 10 Whether due to the cessation of operations at G&K or the January 13, 2021 order for reli11 LAW OFFICESB,S1400 TON LVD UITE ,C92626-7689 A ALIFORNIA 111234 uanndd emr uCsht abpet ewr o7Uu onnfdd te hure pt .bh Aaen sUk trnhuiefp otJcremyw cePol addreet ncaeissr itsoohn iGp t &eAaKccht, ei(ts[sC ujaosl:i. n]t Cveonrptu. rCe owdieth, §F r1a5n0tz0 1h aest been dissolve600A NMTA ES seq.), a dissolved partnership (including joint ventures) continues OS 15 C until the winding up of unfinished partnership business. ([Cal.] Corp. 16 Code, § 15030.) No partner (except a surviving partner) is entitled to 17 extra compensation for services rendered in completing unfinished 18 business. ([Cal.] Corp. Code, § 15018, subd. (f).) 19 Jewel, 156 Cal. App. 3d at 176. Thus, absent a contrary agreement, any income generated throug20 the winding up of unfinished business is allocated to the former partners according to the21 respective interests in the partnership, here admittedly 50% to G&K/50% to Frantz. Thus, futur22 Expected Fees within the Porter Ranch litigation are in fact property of the estate under section 5423 of the Bankruptcy Code (and subject to the first position security interest of CAL II). 24 Fifty years ago, the Jewel decision rejected Frantz’s argument here that, for contingency fe25 cases, a substitution of attorneys transformed the partnership’s unfinished business into new fir26 business and removed that business from the purview of the Uniform Partnership Act, with th27 former partner (here, joint venturer) thereafter, limited to a quantum meruit recovery for service28

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1 rendered before discharge. Tellingly, the RFS Motion cites only to Heller Ehrman LLP v. Davi 2 Wright, Tremaine, LLP, 527 B.R. 24 (N.D. Cal. 2014), which is wholly inapposite due to it3 involvement allocating hourly legal fees, while omitting completely any citation to Jewel, th 4 California precedent controlling for allocation of contingency legal fees from a dissolved joi5 venture. 6 Jewel found that the Uniform Partnership Act unequivocally prohibits extra compensatio7 for postdissolution services, with a single exception for surviving partners. To the extent that th8 role of Frantz arguably changes in any manner should it complete any of the Porter Ranch Litigatio9 without assistance from G&K, it does so as postdissolution services/winding up partner. 10 The decision in Resnick v. Kaplan, 49 Md. App. 499, 434 A.2d 582 (1981), is closel11 analogous to the present case. The Resnick court recognized the right of clients to select counse LAW OFFICES600AB,S1400 NTON LVD UITE M,C92626-7689 TA ESA ALIFORNIA 111234 bcsihumot sisleaanrid cb, oy“n itcth ledu oscieloisen nn wto taa srme r eenaaonct,h seaudsb ijanepc pRt eotloslae dnnitfv ecilsdoi,no Mtne neindy esa,r c tcShouarstdm tahanenc efv e.w eCsit ohthh teehnree, a1pf4ater6rt n Ceeaarrsl.nh Aeipdp apbg.y r3 etdeh me2 0ep0na,tr .t2”n 1COS 15 (1983). 16 Thus, as found in Jewel, under the provisions of the Uniform Partnership Act, Frantz, a17 former joint venturer, will be entitled to reimbursement for reasonable overhead expense18 (excluding partners’ salaries) attributable to the production of postdissolution partnership incom19 in other words, it is net postdissolution income, not gross income, that is to be allocated to th20 former partners. Cal. Corp. Code, § 15015(b) (joint and several liability for debts and obligation21 of partnership); Cal. Corp. Code, § 15038(1) (right of partners upon dissolution to have partnershi22 property applied to discharge its liabilities “and the surplus applied to pay in cash the net amou23 owing to the respective partners”); Cal. Corp. Code, § 15040, subds. (d) and (f) (right and obligatio24 of partners after dissolution to contribute amounts necessary to satisfy partnership liabilities); se25 Chazan v. Most, 209 Cal. App. 2d 519, 522-523 (1962) (trial court gave credit to partners for prove26 postdissolution expenses); Yeomans v. Lysfjord, 162 Cal. App. 2d 357, 364 (1958) (trial court erre27 in failing to award share in net profits after dissolution). Thus, one half of the Expected Fees net 28

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1 these expenses does get split with G&K and therefore represents property of the estate under sectio2 541 of the Bankruptcy Code (and subject to the first position security interest of CAL II). 3 Because the entire basis of the RFS Motion, i.e., that nothing beyond G&K’s quantu4 meruit share of the Porter Ranch Litigation can be property of the estate under section 541, i5 unfounded, the prayer for stay relief by Frantz must be denied due to Jewel in addition to any an6 all arguments on behalf of the Trustee. 7 Lastly, to the extent the RFS Motion is not dependent upon property of the estate und8 section 541 of the Bankruptcy Code, it is properly the Trustee, and not Frantz, who should conf9 with any clients of G&K who are not currently co-clients with Frantz because of her cou10 appointment and neutrality. 11 B. Compensation Owed to G&K for Its Past Work in Quantum Meruit Belongs LAW OFFICES600AB,S1400 NTON LVD UITE M,C92626-7689 TA ESA ALIFORNIA 111234 distribuItfio tnh ios fC tthooeu t rhnt eedt e Eacssltsianetteses . o tof tfhoel ldoiwss Joelvweedl jboyi natc vceonrdtuinreg bGe&twKe’esn b Gan&kKru apntcdy F ersatnattze oitns 5th0e% P o rteCOS 15 Ranch Litigation, the bankruptcy estate (subject to CAL II’s lien) must still be entitled to 16 compensation in quantum meruit for G&K’s past services performed. Huskinson v. Brown v. 17 Wolf, 32 Cal. 4th 453, 459 (2004) (calling it a “well-established principle” that “the law implies 18 promise to pay for services performed under circumstances disclosing that they were not 19 gratuitously rendered”). Indeed, Frantz acknowledges that “GK may have a property interest in 20 payment for past work.” See RFS Motion at 1:19-20. Accordingly, any order on the RFS Motion 21 should preserve all rights of the bankruptcy estate to recover compensation for G&K’s past work22 /// 23 /// 24 /// 25 26 27 28

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1 III. CONCLUSION 2 For the reasons set forth in the Trustee’s opposition and for all of the foregoing reasons, 3 CAL II respectfully requests that the Court deny the RFS Motion. 4 Dated: January 19, 2021 SNELL & WILMER L.L.P. 5 6 By: /s/ Marshall J. Hogan 7 Marshall J. Hogan 8 Attorneys for California Attorney Lending II, Inc. 9 10 11 LAW OFFICESB,S1400 TON LVD UITE ,C92626-7689 A ALIFORNIA 111234600A NMTA ES OS 15 C 16 17 18 19 20 21 22 23 24 25 26 27 28

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PROOF OF SERVICE OF DOCUMENT am over the age of 18 and not a party to this bankruptcy case or adversary proceeding. My business address is: 00 Anton Blvd., Suite 1400 Costa Mesa, CA 92626. true and correct copy of the foregoing document entitled (specify): CALIFORNIA ATTORNEY LENDING II, INC.’PPOSITION TO MOTION FOR RELIEF FROM STAY [ECF NO. 31]; JOINDER IN CHAPTER 7 TRUSTEE’PPOSITION TO MOTION FOR RELIEF FROM STAY [ECF NO. 101] will be served or was served (a) on the judge ihambers in the form and manner required by LBR 5005-2(d); and (b) in the manner stated below: . TO BE SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING (NEF): Pursuant to controlling General rders and LBR, the foregoing document will be served by the court via NEF and hyperlink to the document. On (date)anuary 19, 2021, I checked the CM/ECF docket for this bankruptcy case or adversary proceeding and determined that e following persons are on the Electronic Mail Notice List to receive NEF transmission at the email addresses stated elow: (cid:120) Richard D Buckley richard.buckley@arentfox.com (cid:120) Marie E Christiansen mchristiansen@vedderprice.com, ecfladocket@vedderprice.com,marie-christiansen-4166@ecf.pacerpro.com (cid:120) Jennifer Witherell Crastz jcrastz@hrhlaw.com (cid:120) Ashleigh A Danker Ashleigh.danker@dinsmore.com, SDCMLFiles@DINSMORE.COM;Katrice.ortiz@dinsmore.com (cid:120) Clifford S Davidson csdavidson@swlaw.com, jlanglois@swlaw.com;cliff-davidson-7586@ecf.pacerpro.com (cid:120) Lei Lei Wang Ekvall lekvall@swelawfirm.com, lgarrett@swelawfirm.com;gcruz@swelawfirm.com;jchung@swelawfirm.com (cid:120) Richard W Esterkin richard.esterkin@morganlewis.com (cid:120) Timothy W Evanston tevanston@swelawfirm.com, gcruz@swelawfirm.com;lgarrett@swelawfirm.com;jchung@swelawfirm.com (cid:120) Eric D Goldberg eric.goldberg@dlapiper.com, eric-goldberg-1103@ecf.pacerpro.com (cid:120) Andrew Goodman agoodman@andyglaw.com, Goodman.AndrewR102467@notify.bestcase.com (cid:120) Steven T Gubner sgubner@bg.law, ecf@bg.law (cid:120) Marshall J Hogan mhogan@swlaw.com, knestuk@swlaw.com (cid:120) Razmig Izakelian razmigizakelian@quinnemanuel.com (cid:120) Lewis R Landau Lew@Landaunet.com (cid:120) Daniel A Lev dlev@sulmeyerlaw.com, ccaldwell@sulmeyerlaw.com;dlev@ecf.inforuptcy.com (cid:120) Peter J Mastan peter.mastan@dinsmore.com, SDCMLFiles@dinsmore.com;Katrice.ortiz@dinsmore.com (cid:120) Edith R Matthai ematthai@romalaw.com (cid:120) Kenneth Miller kmiller@pmcos.com, efilings@pmcos.com (cid:120) Elissa Miller (TR) CA71@ecfcbis.com, MillerTrustee@Sulmeyerlaw.com;C124@ecfcbis.com;ccaldwell@sulmeyerlaw.com (cid:120) Eric A Mitnick MitnickLaw@aol.com, mitnicklaw@gmail.com (cid:120) Scott H Olson solson@vedderprice.com, scott-olson-2161@ecf.pacerpro.com,ecfsfdocket@vedderprice.com,nortega@vedderprice.com (cid:120) Leonard Pena lpena@penalaw.com, penasomaecf@gmail.com;penalr72746@notify.bestcase.com (cid:120) Michael J Quinn mquinn@vedderprice.com, ecfladocket@vedderprice.com,michael-quinn-2870@ecf.pacerpro.com (cid:120) Ronald N Richards ron@ronaldrichards.com, morani@ronaldrichards.com,justin@ronaldrichards.com (cid:120) Philip E Strok pstrok@swelawfirm.com, gcruz@swelawfirm.com;1garrett@swelawfirm.com;jchung@swelawfirm.com (cid:120) United States Trustee (LA) ustpregion16.la.ecf@usdoj.gov (cid:120) Eric D Winston ericwinston@quinnemanuel.com (cid:120) Christopher K.S. Wong christopher.wong@arentfox.com, yvonne.li@arentfox.com (cid:120) Timothy J Yoo tjy@lnbyb.com

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Service information continued on attached page . SERVED BY UNITED STATES MAIL: n (date) January 19, 2021, I served the following persons and/or entities at the last known addresses in this bankruptcy ase or adversary proceeding by placing a true and correct copy thereof in a sealed envelope in the United States mail, rst class, postage prepaid, and addressed as follows. Listing the judge here constitutes a declaration that mailing to the dge will be completed no later than 24 hours after the document is filed. Rafey Balabanian Edelson PC 123 Townsend St Ste 100 San Francisco, CA 94107 James J Finsten Lurie, Zepeda, Schmalz, Hogan & Martin 1875 Century Park E Ste 2100 Los Angeles, CA 90067 Girardi Keese 1126 Wilshire Blvd Los Angeles, CA 90017 Andrew W Zepeda Lurie, Zepeda, Schmalz, Hogan & Martin 1875 Century Park East Ste 2100 Los Angeles, CA 90067 Service information continued on attached page . SERVED BY PERSONAL DELIVERY, OVERNIGHT MAIL, FACSIMILE TRANSMISSION OR EMAIL (state method r each person or entity served): Pursuant to F.R.Civ.P. 5 and/or controlling LBR, on (date) January 19, 2021, I served e following persons and/or entities by personal delivery, overnight mail service, or (for those who consented in writing touch service method), by facsimile transmission and/or email as follows. Listing the judge here constitutes a declaration at personal delivery on, or overnight mail to, the judge will be completed no later than 24 hours after the document is led. ia Fedex: onorable Barry Russell dward R. Roybal Federal Building and Courthouse 55 E. Temple Street, Suite 1660 / Courtroom 1668 os Angeles, CA 90012 Service information continued on attached page declare under penalty of perjury under the laws of the United States that the foregoing is true and correct. 1/19/21 Kelley Nestuk /s/Kelley Nestuk Date Printed Name Signature

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