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ADR-109
ATTORNEY OR PARTY WITHOUT ATOR
j.. William T. Webb 193832
Jennifer D. Su 291603
WEBB LEGAL GROUP
155 Montgomery Street, Suite 1200, San Francisco, CA 94104
TELEPHONENO: 415-277-7200 FAX NO. (Option;
E-MAIL ADDRESS (Optenan WWebb@webblegalgroup.com, jyu@webbl legalgroup.com
artorney ror inane. Defendants BillFloat, Inc., Ryan Gilbert, Sean O'Malley
NEY (Name, State Bar number, and address)
FOR COURT USE ONLY
ELECTRONICALLY
FILED
Supertor Court of Caltfornia,
C"] STIPULATION [7] MOTION
FOR ORDER APPOINTING REFEREE
‘SUPERIOR COURT OF CALIFORNIA, COUNTY OF San Francisco County of San Francisco
srreersopress 400 McCallister Street 02/27/2017
MAILING ADDRESS: Clerk of the Court
crvanoaecove: San Francisco 94102 nee
| _sivcrnawe Civil Division Pret
PETITIONERPLAINTIFF: Golden Pacific Bank, N.A.
| RESPONDENT/DEFENDANT: BillFloat, Inc., Ryan Gilbert, Sean O'Malley, Does 1-50
‘CASE NUMBER
CGC-16-549804
1. Applicant. The following parties apply for appointment of a referee (name each applicant)
BillFloat, Inc., Ryan Gilbert, Sean O'Malley
2. Statutory ground for appointment.
a. [“] Section 638. Appointment of the referee is requested under Code of Civil Procedure section 638 because (check one):
(1) [£7] all parties to the action have agreed to the appointment of a referee under section 638.
(2) the parties entered into a written contract or lease th.
heard by a referee, as follows
Attachment 2a):
b. [2] Section 639. Appointment of the referee is re
complete (1) or (2)):
ft provides that any controversy arising from it shall be
(identify agreement and state provision for appointment of referee below or in
quested under Code of Civil Procedure section 639 because (check and
(1) [2] Discovery reference. it is necessary for the court to appoint a referee to hear and determine any and ail
discovery motions and disputes relevant to discovery in the action and to rey
port findings and make a
recommendation thereon. (Code Civ. Proc., § 639(a)(5). State the exceptional circumstances specific to the
particular case that require the discovery reference, below or in Attachment
Other reference. (Chack one or more of the following
is requested, below or in Attachment 2b(2).)
(a) The trial of an issue of fact req
§ 639(a)(1).)
()
2b(1),)
statutory grounds and state the reason the appointment
luires the examination of a long account. (Code Civ. Proc.,
ry for the information of the court before judgment, or for
carrying a judgment or order into effect. (Code Civ. Proc., § 639(a)(2).)
The taking of an account is necessai
@ CI
@ C9
A question of fact, other than u
Proc., § 639(a)(3).)
Itis necessary for the information of the court in a
§ 639(a)(4).)
3. Referee. Applicant requests appointment of the following parson as referee:
a. Name: Terry Lloyd, CPA, CFA
b. Business address: Two Theatre Square, S$
© Telephone number: (925) 258-9600 x15
d The proposed referee is an active or inactive member
California judicial officer must also be an active
Teferee’s State Bar number is:
uite 218, Orinda, California, 94563
Form Approved for Optional Use
‘Judicial Council of California
‘ADR-109 (Rev. January 1, 2007]
STIPULATION OR MOTION FOR ORDER APPOINTING
REFEREE
{Alternative Dispute Resolution)
pon the pleadings, has arisen by motion or otherwise. (Code Civ.
special proceeding. (Code Civ. Proc.,
of the State Bar. (A proposed referee who is a former
or inactive member of the State Bar.) The proposed
Page of 2
‘Code of Chi Procedure, 8 838 et con,
Cal. Rules of Cour, rules 3900-3910,
3920-3027
wrww.courtinte.c2 govADR-109
PETITIONERIPLAINTIFF: Golden Pacific Bank, N.A. headache
RESPONDENTIDEFENDANT: BillFloat, Inc,, Ryan Gilbert, Sean O'Malley, Dag CGC-16-549804
4. Subject matter of reference.
a. [£7] Section 638. Applicant requests that the reference include (check and complete one}:
(1) [2] allissues in dispute.
(2) (1 the following issues (describe issues to be covered by reference below or in Attachment 4a):
b. Section 639. Applicant requests that the reference include the following issues (describe issues befow or in
Attachment 4b):
See attachment 4(b).
5. Referee's compensation. (Check and complete one.)
a. [__] The réferee will not be privately compensated by the parties.
‘The referee will be privately compensated by the parties as follows:
(1) [[-] The parties have agreed that the referee's fees shall be paid as follows (state agreement below or in
Attachment 5b):
(2) The parties have not agreed on payment of the referee's fees and request the matter to be resolved by the
court under Code of Civil Procedure section 645.1.
6. Use of court facilities and personnel. (Check and complete one.)
a. Applicant does not request the use of court facilities or court personnel.
b. [1 Appticant requests the use of court facilities or court personnel. (Describe the requested use below or in attachment
6b, if the reference is fo be conducted by a privately compensated referee appointed under Code Civ. Proc., § 638,
also state why the use of court facilities or court personne! will further the interest of justice. Court facilities and
personnel may be used in proceedings before a privately compensated section 638 referee only upon a finding of the
presiding judge that the use would further the interest of justice.)
7. Hearing location information. The following person may be contacted to arrange attendance at any proceeding that is open to
the public and that is conducted in a private facllity (complete ail of the foltowing):
a. Name: William T. Webb
b. Address: 155 Montgomery Street, Suite 1200, San Francisco, CA 94104
©. Telephone: 415-277-7200
Date: February 27, 2017
William T. Webb
(TYPE OR PRINT NAME) INT OR ATTORNEY)
(TYPE OR PRINT NAME) (SIGNATURE OF APPLICANT OR ATTORNEY)
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{TYPE OR PRINT NAME) (SIGNATURE OF APPLICANT OR ATTORNEY)
«TYPE OR PRINT NAME) {SIGNATURE OF APPLICANT OR ATTORNEY)
(TYPE OR PRINT NAME) {SIGNATURE OF APPLICANT OR ATTORNEY)
ADR-109 IRev.Jenvery 1.20071 STIPULATION OR MOTION FOR ORDER APPOINTING REFEREE fesea ria
(Alternative Dispute Resolution)
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!MC-025
SHORT TITLE: CASE NUMBER:
| Golden Pacific Bank, N.A. v. BillFloat, Inc., et al. CGC-16-549804
ATTACHMENT (Number): 4(b)
(This Attachment may be used with any Judicial Council form. )
Golden Pacific Bank, N.A. (“GPB”) and BillFloat, Inc. (“BillFloat”) (collectively referred to as “the Parties”)
entered into two contracts (among others) that spelled out the rights and obligations of the Parties to participate
in both the costs of developing the Joint IP (as defined in the contracts) and the proceeds earned from certain
activities, set forth in more detail below.
There is concern that, in practice, the Parties erred in sharing expenses and proceeds. For example, the
contracts correctly state that BillFloat owns the technology called the BELIEF System. However, from July -
December 2014, BillFloat may have erroneously shared with GPB some of the revenue that BillFloat received
from licensing the BELIEF System to other lenders, even though it was not required to do so. In addition,
during that same time frame, BillFloat may not have sufficiently shared the opportunity for GPB to contribute
to expenses related to BillFloat’s labor costs for improving the Joint IP.
For its part, GPB, for example, complains that BillFloat charged it for some improvement of the BELIEF
System, rather than the Joint IP. GPB alleges that any charges unrelated to the Joint IP were fraudulent.
To assess whether the Parties” financial relationship sufficiently matched the terms of the contracts upon which
they both agreed, it is necessary for a Judicial Referee to examine a long account as to the Parties’ financial
relationship as set forth in the Parties’ contracts, including the December 6, 2013 Joint Marketing Agreement
(“TMA”) and the July 23, 2014 First Amended Joint Marketing Agreement (“AMA”).
The Judicial Referee would determine the amounts actually charged and credited over the years, and would
compare it with the amounts that should have been charged and credited pursuant to the express terms set forth
in the JMA and the AMA, to determine whether, and to what extent, one party or the other was overcharged
and/or over-credited. The net result will be a particular amount which either BillFloat or GPB may owe to the
other.
Specifically, the Judicial Referee shall first calculate the amounts actually charged and credited, and then
compare it with the amounts that are to be charged and credited under the terms of the JMA and AMA, as to
the following:
December 6, 2013 Joint Marketing Agreement between the BillFloat and Golden Pacific Bank:
* Calculation of all “Improvement Expense[s]” incurred by BillFloat.
* Calculation of all “Proceeds” earned by BillFloat from:
0 “licensing the Joint Technology to third party lenders:”
0 “referral of SmartBiz registered users for SBA 7(A) loans funded by third party lenders who will
underwrite such loans using the Joint Technology, unless the referral to the third party lender arises out of the
inability or unwillingness of GPB to underwrite an SBA loan in the amount sought and pursuant to the terms
sought by such registered uscr;”
(if the item that this Attachment concems is made under penalty of perjury, all statements in this Page | of 2
h :
Aitachment are made under penalty of perjury.) (cd dceis on leh
oltdeal Sounch ot Cosme ATTACHMENT lta cagov
‘MC-025 [Rev. July 1. 2009} to Judicial Council FormMC025
SHORT TITLE: CASE NUMBER:
| Golden Pacific Bank, N.A. v. BillFloat, Inc., et al. CGC-16-549804
ATTACHMENT (Number): 4(b)
(This Attachment may be used with any Judicial Council form.)
© “licensing of the SmartBiz Marks and SmartBiz brand;” and
0 “referral of SmartBiz registered users to third party non-SBA lenders for small business loans.”
+ Calculation of the percent of the total “Qualified Introduced Businesses” that were referred by BillFloat to
Golden Pacific Bank each month.
* Calculation of all “Improvement Costs” incurred by BillFloat.
July 23, 2014 First Amended Joint Marketing Agreement between BillFloat and Golden Pacific Bank:
* Calculation of all the following costs/expenses incurred by BillFloat:
o “Improvement Expense[s];”
“Joint Technology Development Costs;”
“Level Two Improvement Costs;”
“Outstanding Improvement Expenses;”
“Referral Assistance Expenses:”
“Return on Unilateral Improvement Expenses” that remain unpaid by Golden Pacific Bank:
“Improvement Cost{s]};” and
“Joint Technology Improvement Expenses from January 2014 to June 2014:”
* Calculation of all of the following carned by BillFloat:
0 “Proceeds” from “licensing the Joint Technology to third party lenders;”
0 “Proceeds” from “referral of SmartBiz registered users, net of any Referral Assistance Expenses, for
SBA 7(A) loans funded by third party lenders who will underwrite such loans using the Joint Technology,
unless the referral to the third party lender arises out of the inability or unwillingness of GPB to underwrite an
SBA loan to such SmartBiz registered user in the amount sought and pursuant to the terms sought by such
registered users;”
0 “Proceeds” from “licensing of the SmartBiz Marks or SmartBiz brand;” and
© “Proceeds” from “referral of SmartBiz registered users to third party non-SBA lenders for small
business loans net of any Referral Assistance Expenses.”
* Calculation of the percent of the total “Qualified Introduced Businesses seeking an SBA loan of $25,000 or
less” that were referred by BillFloat to Golden Pacific Bank each month.”
eocoooce
°
In addition, the Judicial Referee should be empowered to calculate any amounts that are set forth in the JMA
and/or the AMA that are not specifically referenced above.
Once these amounts are calculated and netted out, the Judicial Referee should determine, using the express
terms of the JMA and the AMA and determine whether, and to what extent, one party owes the other.
(if the item that this Attachment concems is made under penalty of perjury, all statements in this Page 2 of 2
Attachment are made under penalty of perjury.) (Add pages as required)
Form Approved for Optional Use ATTACHMENT or sunt a gor
“iudieal Council of California .
MC-028 (Rev. July 1, 2009) to Judicial Council Form
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ADR-109 ATTORNEY OR PARTY WITHOUT ATOR j.. William T. Webb 193832 Jennifer D. Su 291603 WEBB LEGAL GROUP 155 Montgomery Street, Suite 1200, San Francisco, CA 94104 TELEPHONENO: 415-277-7200 FAX NO. (Option; E-MAIL ADDRESS (Optenan WWebb@webblegalgroup.com, jyu@webbl legalgroup.com artorney ror inane. Defendants BillFloat, Inc., Ryan Gilbert, Sean O'Malley NEY (Name, State Bar number, and address) FOR COURT USE ONLY ELECTRONICALLY FILED Supertor Court of Caltfornia, C"] STIPULATION [7] MOTION FOR ORDER APPOINTING REFEREE ‘SUPERIOR COURT OF CALIFORNIA, COUNTY OF San Francisco County of San Francisco srreersopress 400 McCallister Street 02/27/2017 MAILING ADDRESS: Clerk of the Court crvanoaecove: San Francisco 94102 nee | _sivcrnawe Civil Division Pret PETITIONERPLAINTIFF: Golden Pacific Bank, N.A. | RESPONDENT/DEFENDANT: BillFloat, Inc., Ryan Gilbert, Sean O'Malley, Does 1-50 ‘CASE NUMBER CGC-16-549804 1. Applicant. The following parties apply for appointment of a referee (name each applicant) BillFloat, Inc., Ryan Gilbert, Sean O'Malley 2. Statutory ground for appointment. a. [“] Section 638. Appointment of the referee is requested under Code of Civil Procedure section 638 because (check one): (1) [£7] all parties to the action have agreed to the appointment of a referee under section 638. (2) the parties entered into a written contract or lease th. heard by a referee, as follows Attachment 2a): b. [2] Section 639. Appointment of the referee is re complete (1) or (2)): ft provides that any controversy arising from it shall be (identify agreement and state provision for appointment of referee below or in quested under Code of Civil Procedure section 639 because (check and (1) [2] Discovery reference. it is necessary for the court to appoint a referee to hear and determine any and ail discovery motions and disputes relevant to discovery in the action and to rey port findings and make a recommendation thereon. (Code Civ. Proc., § 639(a)(5). State the exceptional circumstances specific to the particular case that require the discovery reference, below or in Attachment Other reference. (Chack one or more of the following is requested, below or in Attachment 2b(2).) (a) The trial of an issue of fact req § 639(a)(1).) () 2b(1),) statutory grounds and state the reason the appointment luires the examination of a long account. (Code Civ. Proc., ry for the information of the court before judgment, or for carrying a judgment or order into effect. (Code Civ. Proc., § 639(a)(2).) The taking of an account is necessai @ CI @ C9 A question of fact, other than u Proc., § 639(a)(3).) Itis necessary for the information of the court in a § 639(a)(4).) 3. Referee. Applicant requests appointment of the following parson as referee: a. Name: Terry Lloyd, CPA, CFA b. Business address: Two Theatre Square, S$ © Telephone number: (925) 258-9600 x15 d The proposed referee is an active or inactive member California judicial officer must also be an active Teferee’s State Bar number is: uite 218, Orinda, California, 94563 Form Approved for Optional Use ‘Judicial Council of California ‘ADR-109 (Rev. January 1, 2007] STIPULATION OR MOTION FOR ORDER APPOINTING REFEREE {Alternative Dispute Resolution) pon the pleadings, has arisen by motion or otherwise. (Code Civ. special proceeding. (Code Civ. Proc., of the State Bar. (A proposed referee who is a former or inactive member of the State Bar.) The proposed Page of 2 ‘Code of Chi Procedure, 8 838 et con, Cal. Rules of Cour, rules 3900-3910, 3920-3027 wrww.courtinte.c2 govADR-109 PETITIONERIPLAINTIFF: Golden Pacific Bank, N.A. headache RESPONDENTIDEFENDANT: BillFloat, Inc,, Ryan Gilbert, Sean O'Malley, Dag CGC-16-549804 4. Subject matter of reference. a. [£7] Section 638. Applicant requests that the reference include (check and complete one}: (1) [2] allissues in dispute. (2) (1 the following issues (describe issues to be covered by reference below or in Attachment 4a): b. Section 639. Applicant requests that the reference include the following issues (describe issues befow or in Attachment 4b): See attachment 4(b). 5. Referee's compensation. (Check and complete one.) a. [__] The réferee will not be privately compensated by the parties. ‘The referee will be privately compensated by the parties as follows: (1) [[-] The parties have agreed that the referee's fees shall be paid as follows (state agreement below or in Attachment 5b): (2) The parties have not agreed on payment of the referee's fees and request the matter to be resolved by the court under Code of Civil Procedure section 645.1. 6. Use of court facilities and personnel. (Check and complete one.) a. Applicant does not request the use of court facilities or court personnel. b. [1 Appticant requests the use of court facilities or court personnel. (Describe the requested use below or in attachment 6b, if the reference is fo be conducted by a privately compensated referee appointed under Code Civ. Proc., § 638, also state why the use of court facilities or court personne! will further the interest of justice. Court facilities and personnel may be used in proceedings before a privately compensated section 638 referee only upon a finding of the presiding judge that the use would further the interest of justice.) 7. Hearing location information. The following person may be contacted to arrange attendance at any proceeding that is open to the public and that is conducted in a private facllity (complete ail of the foltowing): a. Name: William T. Webb b. Address: 155 Montgomery Street, Suite 1200, San Francisco, CA 94104 ©. Telephone: 415-277-7200 Date: February 27, 2017 William T. Webb (TYPE OR PRINT NAME) INT OR ATTORNEY) (TYPE OR PRINT NAME) (SIGNATURE OF APPLICANT OR ATTORNEY) » >: b » » {TYPE OR PRINT NAME) (SIGNATURE OF APPLICANT OR ATTORNEY) «TYPE OR PRINT NAME) {SIGNATURE OF APPLICANT OR ATTORNEY) (TYPE OR PRINT NAME) {SIGNATURE OF APPLICANT OR ATTORNEY) ADR-109 IRev.Jenvery 1.20071 STIPULATION OR MOTION FOR ORDER APPOINTING REFEREE fesea ria (Alternative Dispute Resolution) i |! | | | | | | | | ' | !MC-025 SHORT TITLE: CASE NUMBER: | Golden Pacific Bank, N.A. v. BillFloat, Inc., et al. CGC-16-549804 ATTACHMENT (Number): 4(b) (This Attachment may be used with any Judicial Council form. ) Golden Pacific Bank, N.A. (“GPB”) and BillFloat, Inc. (“BillFloat”) (collectively referred to as “the Parties”) entered into two contracts (among others) that spelled out the rights and obligations of the Parties to participate in both the costs of developing the Joint IP (as defined in the contracts) and the proceeds earned from certain activities, set forth in more detail below. There is concern that, in practice, the Parties erred in sharing expenses and proceeds. For example, the contracts correctly state that BillFloat owns the technology called the BELIEF System. However, from July - December 2014, BillFloat may have erroneously shared with GPB some of the revenue that BillFloat received from licensing the BELIEF System to other lenders, even though it was not required to do so. In addition, during that same time frame, BillFloat may not have sufficiently shared the opportunity for GPB to contribute to expenses related to BillFloat’s labor costs for improving the Joint IP. For its part, GPB, for example, complains that BillFloat charged it for some improvement of the BELIEF System, rather than the Joint IP. GPB alleges that any charges unrelated to the Joint IP were fraudulent. To assess whether the Parties” financial relationship sufficiently matched the terms of the contracts upon which they both agreed, it is necessary for a Judicial Referee to examine a long account as to the Parties’ financial relationship as set forth in the Parties’ contracts, including the December 6, 2013 Joint Marketing Agreement (“TMA”) and the July 23, 2014 First Amended Joint Marketing Agreement (“AMA”). The Judicial Referee would determine the amounts actually charged and credited over the years, and would compare it with the amounts that should have been charged and credited pursuant to the express terms set forth in the JMA and the AMA, to determine whether, and to what extent, one party or the other was overcharged and/or over-credited. The net result will be a particular amount which either BillFloat or GPB may owe to the other. Specifically, the Judicial Referee shall first calculate the amounts actually charged and credited, and then compare it with the amounts that are to be charged and credited under the terms of the JMA and AMA, as to the following: December 6, 2013 Joint Marketing Agreement between the BillFloat and Golden Pacific Bank: * Calculation of all “Improvement Expense[s]” incurred by BillFloat. * Calculation of all “Proceeds” earned by BillFloat from: 0 “licensing the Joint Technology to third party lenders:” 0 “referral of SmartBiz registered users for SBA 7(A) loans funded by third party lenders who will underwrite such loans using the Joint Technology, unless the referral to the third party lender arises out of the inability or unwillingness of GPB to underwrite an SBA loan in the amount sought and pursuant to the terms sought by such registered uscr;” (if the item that this Attachment concems is made under penalty of perjury, all statements in this Page | of 2 h : Aitachment are made under penalty of perjury.) (cd dceis on leh oltdeal Sounch ot Cosme ATTACHMENT lta cagov ‘MC-025 [Rev. July 1. 2009} to Judicial Council FormMC025 SHORT TITLE: CASE NUMBER: | Golden Pacific Bank, N.A. v. BillFloat, Inc., et al. CGC-16-549804 ATTACHMENT (Number): 4(b) (This Attachment may be used with any Judicial Council form.) © “licensing of the SmartBiz Marks and SmartBiz brand;” and 0 “referral of SmartBiz registered users to third party non-SBA lenders for small business loans.” + Calculation of the percent of the total “Qualified Introduced Businesses” that were referred by BillFloat to Golden Pacific Bank each month. * Calculation of all “Improvement Costs” incurred by BillFloat. July 23, 2014 First Amended Joint Marketing Agreement between BillFloat and Golden Pacific Bank: * Calculation of all the following costs/expenses incurred by BillFloat: o “Improvement Expense[s];” “Joint Technology Development Costs;” “Level Two Improvement Costs;” “Outstanding Improvement Expenses;” “Referral Assistance Expenses:” “Return on Unilateral Improvement Expenses” that remain unpaid by Golden Pacific Bank: “Improvement Cost{s]};” and “Joint Technology Improvement Expenses from January 2014 to June 2014:” * Calculation of all of the following carned by BillFloat: 0 “Proceeds” from “licensing the Joint Technology to third party lenders;” 0 “Proceeds” from “referral of SmartBiz registered users, net of any Referral Assistance Expenses, for SBA 7(A) loans funded by third party lenders who will underwrite such loans using the Joint Technology, unless the referral to the third party lender arises out of the inability or unwillingness of GPB to underwrite an SBA loan to such SmartBiz registered user in the amount sought and pursuant to the terms sought by such registered users;” 0 “Proceeds” from “licensing of the SmartBiz Marks or SmartBiz brand;” and © “Proceeds” from “referral of SmartBiz registered users to third party non-SBA lenders for small business loans net of any Referral Assistance Expenses.” * Calculation of the percent of the total “Qualified Introduced Businesses seeking an SBA loan of $25,000 or less” that were referred by BillFloat to Golden Pacific Bank each month.” eocoooce ° In addition, the Judicial Referee should be empowered to calculate any amounts that are set forth in the JMA and/or the AMA that are not specifically referenced above. Once these amounts are calculated and netted out, the Judicial Referee should determine, using the express terms of the JMA and the AMA and determine whether, and to what extent, one party owes the other. (if the item that this Attachment concems is made under penalty of perjury, all statements in this Page 2 of 2 Attachment are made under penalty of perjury.) (Add pages as required) Form Approved for Optional Use ATTACHMENT or sunt a gor “iudieal Council of California . MC-028 (Rev. July 1, 2009) to Judicial Council Form