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BRUCE A. SCHEIDT, State Bar No. 155088
bscheidt@kmtg.com
CHRISTOPHER ONSTOTT, State Bar No. 225968
constott@kmig.com
ERROL C. DAUIS, State Bar No. 279313
edauis@kmig.com
KRONICK, MOSKOVITZ, TIEDEMANN & GIRARD
A Professional Corporation
400 Capitol Mall, 27" Floor
Sacramento, California 95814
Telephone: (916) 321-4500
Facsimile: (916) 321-4555
Attorneys for Plaintiff and Cross-Defendant
GOLDEN PACIFIC BANK, N.A.
ELECTRONICALLY
FILED
Superior Court of California,
County of San Francisco
06/08/2016
Clerk of the Court
BY:EDNALEEN ALEGRE
Deputy Clerk
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN FRANCISCO
GOLDEN PACIFIC BANK, N.A.,
Plaintiff,
v.
BILLFLOAT, INC., RYAN GILBERT, SEAN
O'MALLEY, and DOES 1-50, inclusive,
Defendants.
BILLFLOAT, INC.
Cross-Complainant,
Vv.
GOLDEN PACIFIC BANK, N.A., and ROES
1-50,
Cross-Defendants.
1458904.1 14023-004
Case No. CGC-16-549804
GOLDEN PACIFIC BANK'S
SUPPLEMENTAL BRIEF IN SUPPORT
OF MOTION TO CHANGE VENUE
Judge: Hon. Harold E. Kahn
Date: June 22, 2016
Time: 9:30 a.m.
Dept.: 302
Case Transferred
from Sacramento County: — January 11, 2016
Trial Date: None Set
~~ GOLDEN PACIFIC BANK'S SUPPLEMENTAL BRIEF IN SUPPORT OF MOTION TO CHANGE VENUEw
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L INTRODUCTION
This court should affirm its May 11, 2016 tentative ruling and transfer the entirety of this
action to Sacramento County pursuant to the rule first set forth in the Karst line of cases.
BillFloat, Inc.’s ("BillFloat") belated dismissal of its action against the individual defendants in
Contra Costa County ("Contra Costa Action") does not constitute a sufficient change of conditions
for it to escape the binding effect of this Court’s prior ruling. Judge Spanos’ rationale for binding
BillFloat to this Court’s prior order transferring venue of BillFloat’s claims to Sacramento County
pursuant to Karst (the rationale of which was adopted by this Court in its tentative ruling), applies
equally here notwithstanding BillFloat’s subsequent dismissal of the Contra Costa Action. Indeed,
Karst and its progeny have rejected previous plaintiffs’ attempts to manufacture “changed
conditions” in an effort to avoid binding prior venue rulings by changing the parties named or the
causes of action presented.
Here, the actions of the respective parties lie in stark contrast to one another. In the face
of an adverse venue ruling on Golden Pacific Bank N.A.’s (“Golden Pacific”) complaint, Golden
Pacific did not attempt to artificially avoid the ruling. Instead, Golden Pacific allowed the action
to be transferred, preserving the right to seek retransfer of its claims to Sacramento at a later date
pursuant to Code of Civil Procedure section 397(c). In contrast, BillFloat has actively sought to
evade this Court and the Contra Costa court’s prior orders. Here, the rule set forth in Karst, the
convenience of third party witnesses, and the ends of justice all require that this action be
transferred to Sacramento County. For these reasons, the Motion should be granted.
I. LEGAL ARGUMENT
A. No “Changed Circumstances” Excuse BillFloat’s Compliance with this Court’s
Previous Order Transferring Venue of BillFloat’s Claims to Sacramento County.
This Court has asked the parties to address whether BillFloat’s dismissal with prejudice of
the Contra Costa Action against Golden Pacific’s individually named directors and officers
constitutes sufficiently changed circumstances to excuse BillFloat from this Court’s prior order
transferring venue to Sacramento County. The short answer is no, There are no changed
circumstances/conditions in this case that would justify this Court’s departure from its prior order
1458904.114023-004 1Nv
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transferring venue of BillFloat’s claims. In fact, BillFloat’s argument that its belated dismissal of
the Contra Costa Action created sufficiently altered conditions excusing it from being bound by
this Court’s prior order transferring venue fails because: (1) the Court may not consider the
dismissal of individual defendants on the same claims after the motion to transfer venue was filed
pursuant to the well-settled freezing of the facts rule; (2) it is contrary to the Karst line of cases
itself; (3) it would subvert the very policies underlying Karst as referenced by Judge Spanos in
transferring the Contra Costa Action and expressly adopted by this Court in its tentative ruling
transferring this action to Sacramento County: and (4) BillFloat’s argument that its precarious
venue posture was created because Golden Pacific’s complaint should have been filed as a cross
complaint fails as a matter of law.
1 The Freezing Of The Facts Rule Prevents This Court From Considering The
Effect Of BillFloat’s Dismissal Of The Contra Costa Action.
BillFloat’s dismissal of the individual defendants in the Contra Costa Action cannot be
considered in determining whether there are “changed facts or new conditions since the making of
the [previous] order.” See Gaskill vy. Richmaid Ice Cream Company, 111 Cal.App.2d 745, 746
(1952). Pursuant to the “freezing of the facts” rule, dismissals of parties occurring after a motion
to change venue is filed may not be considered for purposes of ruling on the motion to change
venue. This issue was raised by Golden Pacific’s counsel at the hearing on May 11, 2016, but the
Court postponed argument on this issue until supplemental briefing was ordered, finding that the
issue was premature until BillFloat decided whether to dismiss the Contra Costa Action with
prejudice.' As the court held in Abbey v. Schaefer, 108 Cal.App.2d 554 (1952), “the right of the
' See Onstott Supp. Decl. in Support of Supplemental Brief, at Exh. A, (May 11, 2016 Hearing Transcript,
pp. 26-27 (“Mr. Onstotf: [sic] With respect to the Court’s suggested solution, there’s a couple of problems
with this solution. One is under Karst itself. The Judge in the Contra Costa case rightfully pointed to the
freezing of the facts rule.
The Court: So but what you’re doing now, sir, is your arguing change of circumstances, that there are no
change of circumstances. Onstott: Uh-huh. The Court: When we don’t even know if they’re going to
proceed in Contra Costa County....And so I’m not going to address that right now. That, to me, is
premature. Ar, Onstotf [sic]: And, in effect, to also argue that it, again, violates the freezing of the facts
rule. If this were to be allowed in every case, then we could always mix up the parties and figure out -the
whole point of the Karst line of cases is to prevent this kind of relitigation of the issues.....”
1458904. 14023-004 2
GOLDEN PACIFIC BANK'S SUPPLEMENTAL BRIEF IN SUPPORT OF MOTION TO CHANGE VENUEmoving party to a change of venue depends upon the conditions existing at the time the demand is
made. The parties defendant, as revealed by the pleadings existing at the time the demand is made
and the demurrer is filed are the only parties to be considered on a motion for change of place of
trial.” Id. at 557. See also Kallen y. Serretto, 126 Cal.App.548 (1932) (“The right of the moving
party to a change depends upon the conditions existing at the time the demand is made. Hence,
the parties defendant ‘as revealed by the pleadings existing at the time’...the demand was made
...are the only parties to be considered on the motion for a change of the place of trial.”); Warren
v. Ritter, 61 Cal.App.2d 403, 405 (1943) (“After service of the notice of motion for change of
venue, plaintiff filed amendments to his complaint. They cannot be considered as having any
bearing on the motion.”); Donahoe v. Wooster, 163 Cal.114 (1912) (“[T]he right to a change of
place of trial must be determined by the conditions existing at the time of the appearance of the
party demanding the change.”). Indeed, in the venue context, the cases finding “changed
conditions” excused compliance with a previous ruling transferring venue, have focused on
conditions that had changed before the motion to transfer venue had been brought. See, e.g.,
People v. Spring Valley Co., LTD, 109 CalApp.2d 656 (1952) (changed conditions caused by
passage of nine years after prior order allowed for impartial jury).
Here, Golden Pacific’s Motion to Change Venue (“Motion”) was filed on March 10, 2016.
BillFloat’s dismissal with prejudice of the individual defendants did not occur until May 25, 2016,
far after this Motion was filed. This Court may not consider the effect of BillFloat’s intentional
dismissal of the Contra Costa Action pursuant to the well-settled freezing of the facts rule.
Indeed, a plaintiff (in this case a cross-complainant) attempting to game venue by amendments to
a complaint or adding or dismissing defendants to affect a venue determination is precisely the
type of action that is foreclosed by this rule. Here, BillFloat’s dismissal of the Contra Costa
Action occurred after this Motion was brought. It was expressly intentioned to affect this Court’s
venue determination. Thus, the Court may not consider it when determining whether new
conditions exist to excuse BillFloat’s compliance with this Court’s prior order transferring venue
to Sacramento County pursuant to the well-settled freezing of the facts rule.
Ml
1458904.1 141 14 32. The Karst Line Of Cases Establishes That An After-The-Fact Addition Or Dismissal
Of Defendants Is Not Considered “Changed Conditions,” For Purpose Of Venue.
The Karst line of cases provides strong support for the argument that BillFloat’s
subsequent dismissal of the Contra Costa Action does not alter the binding nature of this Court’s
prior order transferring venue of BillFloat’s claims to Sacramento Superior Court. Indeed, Karst
itself rejected such an attempt to alter the parties sued to evade a prior venue ruling. Karst v.
Seller, 45 Cal.App. 623 (1920). In Karst, the plaintiff dismissed its claim after the court ordered
venue transferred and then refiled the litigation, adding a defendant who resided in the county
where the action was brought. The plaintiff argued that the additional defendant added excused
plaintiff from the binding effect of the ruling. The court rejected this tactic, stating “whether the
matter may be considered res adjudicata or not, that a defendant, having been determined to be an
improper party on one application for change of place of trial, cannot again, and perhaps, again
and again, be made a defendant to give jurisdiction under the same facts, by merely camouflaging
them in a different form of action which the facts will not support.” /d. at 627.
The court in Tarman y. Sherwin, 189 Cal.App.2d 49 (1961), likewise rejected an attempt to
evade a binding prior order transferring venue by artificially changing conditions of the complaint.
In that case, after the plaintiff's action was ordered transferred, the plaintiff dismissed the case
without prejudice and then refiled an identical complaint, except that it omitted a corporate
defendant and further omitted an allegation of the complaint that the defendant failed to account
for all monies received. The appellate court reversed the superior court’s denial of the motion to
change venue based upon these revisions to the complaint and ordered the trial court to grant the
motion for change of venue. The court rejected the idea that these developments constituted a
change of circumstances, stating, “[o]f course, change of circumstances after the first order may
warrant denial of a later motion. People v. Spring Valley Co., 109 Cal.App.2d 656, 667-668. But
in our case, plaintiff does not, and on the record cannot, contend that any change of circumstances
from the first to the second motion is shown.” /d. at 52-53.
The cases dealing with the res judicata effect of an order to change venue specifically, and
those dealing with res judicata effects of any prior order, generally, have a common thread in
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GOLDEN PACIFIC BANK'S SUPPLEMENTAL BRIEF IN SUPPORT OF MOTION TO CHANGE VENUEdetermining whether changed conditions or facts should excuse compliance with a prior order.
Courts reject changed conditions arguments when the conditions were intentionally changed by a
party to avoid the binding effect of a prior court order. This explains the rulings set forth above in
Karst and Tarman. in both cases, the courts rejected intentional attempts by the plaintiff to add or
subtract causes of action/defendants to avoid the prior venue order.
In contrast, changed conditions that were not intentionally created to avoid a prior binding
order may excuse compliance with the prior order. For example, in People v. Spring Valley Co.
Ltd, 109 Cal. App.2d 656, 667-668 (1952), the court found that changed conditions existed because
the passage of nine years from the prior order granting a change of venue had created changed
conditions that allowed for an impartial trial in the community. Similarly, in Hurd v. Albert, 214
Cal.15 (1931), the court found that changed conditions excused the binding effect of a prior court
order finding that a property was still suitable for residential purposes. The court allowed the
construction of a gas station on the property that was originally subject to a restriction for
residential purposes only. /d. at 22. In that case, five years had passed since the prior order and
the court found that the “increased vehicular traffic and congestion” when considered in
conjunction with other changes that had occurred outside of the at-issue tract of property had since
made the property unsuitable for residential purposes and therefore, the changed conditions
excused compliance with the prior court order. Id. at 22-23, & 26.
Likewise, in Hasselbach v. Department of Alcoholic Beverage Control, 167 Cal.App.2d
662 (1959), the court found that res judicata did not bind an applicant to a previous denial of a
liquor license. In particular, there, the court found that in the interval between the previous denial
of the license and the current application, the traffic on the boulevard had increased by 30 percent,
the number of customers had increased by approximately 18 percent, and at least three new
commercial enterprises had commenced operations in the neighborhood. /d. at 666-667. In Cox v.
State Welfare Board, 193 Cal.App.2d 708 (1961), Respondent had previously received a superior
court order in his favor ordering the State Social Welfare Board to restore certain old age security
benefits to him after the board had determined him ineligible because of his spouses' wealth status.
Five months later, Respondent’s wife received notice that the Social Security Act was amended to
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require respondent's spouse to be considered in the benefits calculation. A subsequent court
rejected respondent's argument that the prior court order precluded the court from considering his
spouse’s income in the benefits determination. The court found that the subsequent amendment
of the Social Security Act after the prior court order, together with the spouse having reached the
eligibility age of 62 years old in the interim after the prior order, “created a new factual and legal
situation,” and thus the “judgment did not foreclose the board from applying the new board
standard.” Jd. at 719-21. See also Pacific Tel. &Tel. Co. v. County of San Francisco, 197
Cal.App.2d 133, 158 (1961)(finding changed conditions excused any res judicata effect of first
judgment because the passage of time created a “vast change in conditions ... and it is evident that
telephone service is not at the present time a municipal affair but a matter of statewide concern.”).
As set forth above, courts are loathe to find changed conditions or facts where the
conditions were intentionally changed by the party for the purpose of avoiding the res judicata
effect of the prior order. To the contrary, in practically every case, changed circumstances have
been found to exist only when through the passage of time or a change in the law, conditions
largely outside of the control of the party bound by the prior ruling had changed so as to make the
effect of the prior ruling no longer valid or wise. Indeed, the Karst progeny of cases has
universally rejected any plaintiff's attempt to alter the mix of parties to an action or camouflage its
claims in order to avoid a prior venue ruling. Moreover, due to the freezing of the facts rule, no
case stands for the proposition that a plaintiff may avoid the binding nature of a prior order
transferring venue by intentional dismissal of parties or claims after a venue motion is filed.
3. Finding Changed Of Conditions Here Subyerts The Policies Underlying Karst.
The general rule against allowing a party to escape the res judicata nature of a venue
ruling through intentional actions meant to change the conditions of the previous ruling also
contravenes the policies underlying the Karst line of cases. These policies were set forth in Judge
Spanos’ ruling transferring the Contra Costa Action to Sacramento, and found persuasive in this
Court’s May 11, 2016 tentative ruling. First, BillFloat’s dismissal of the Contra Costa Action
does not change the fact that it previously alleged claims in the improper venue against the
Defendants, allowing Defendants, to choose a proper venue pursuant to Code of Civil Procedure
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section 398(b). Allowing a party to receive an adverse venue ruling by dismissing its claims
without prejudice and then altering the parties sued under the same claims frustrates the legislative
scheme allowing defendants to pick the venue once an improper venue is alleged. Section
398(b)'s purpose is further frustrated by BillFloat's subsequent dismissal of its actions against the
individual defendants with prejudice during the pendency of the subsequent Motion to Change
Venue seeking to enforce the Court’s prior order transferring venue.
Second, allowing BillFloat’s tactic of dismissal of the FAC without prejudice to succeed
by allowing BillFloat to alter the mix of parties after the adverse venue ruling frustrates the
purpose behind the freezing of the facts rule. Here, BillFloat opposed the prior motion to change
venue and received the adverse venue ruling transferring its claims to Sacramento County based
upon the state of the complaint as it existed at the time the motion to change venue. If BillFloat,
in the face of an adverse venue ruling, could then dismiss Defendants (with or without prejudice)
and file a subsequent case based upon the same facts as its original claims, altering the mix of
parties sued, there would be no reason for a court to limit consideration of the initial motion to the
circumstances as they existed at that time the motion to transfer venue was filed.
Third, allowing BillFloat to intentionally evade this Court’s prior venue ruling by
dismissing parties after the order, frustrates judicial economy. Judge Spanos previously rejected
BillFloat’s argument that because mix of parties was different, res judicata did not apply due to
changed conditions. As the Contra Costa court itself found, in the face of a Golden Pacific’s
second motion for a change of venue in the San Francisco action, BillFloat could have dismissed
the San Francisco action without prejudice. Instead, BillFloat set the San Francisco Superior
Court to the task of considering and deciding the motion. “Only then, dissatisfied with the court’s
ruling, did BillFloat dismiss the San Francisco action -thereby attempting to render the court’s
work a fruitless nullity.” See May 4, 2016 Supp. RJN at Attch. 19. Similarly, to allow BillFloat to
be relieved from the consequences of its intentional gamesmanship by a subsequently dismissing
certain defendants after the order transferring its claims to a different county makes a mockery of
the court’s prior order, ensuring re-litigation of the same question in venue proceedings.
It
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4, Golden Pacific did not create the conditions causing BillFloat’s dismissal of the
FAC by failing file a cross complaint to BillFloat’s declaratory relief action.
At the May 11, 2016 hearing, BillFloat’s counsel repeatedly argued that the situation
confronting the Court concerning venue was the result of Golden Pacific improperly filing a
standalone complaint in Sacramento against BillFloat, instead of a cross-complaint to BillFloat’s
declaratory relief action. See Onstott Supp. Decl. in Support of Supp. Brief, at Exh. A; 14:18-
15:17 (“Mr. Webb: They had a duty, if they had any cross complaint, if they had any affirmative
claims they wanted aired, they had a duty under the compulsory cross-complaint statute to file it as
a cross-complaint in San Francisco.”), BillFloat’s argument fails as a matter of fact and law.
Here, pursuant to the Amended Joint Marketing and Joint Technology Improvement
Agreement, a party alleging breach of the Agreement was required to provide a “written notice
containing: (i) a detailed description of the perceived breach, and (ii) a detailed description of the
steps necessary to cure the breach. The Party alleged to be breaching the Agreement shall have
ten (10) business days to attempt to cure the perceived breach.” See Golden Pacific’s Request for
Judicial Notice, filed March 10, 2016, Attch. 14, Exh. 1, p. 9, section 12.2. Golden Pacific abided
by this provision by providing written notice of the alleged breaches to BillFloat on August 17,
2015. Jd. at Exh. 2. Rather than abide by this notice provision or seeking to work out any
differences with Golden Pacific, BillFloat rushed into this Court in violation of that notice and
cure provision to try to place venue in San Francisco by filing a declaratory relief action on
August 28, 2015. /d., Attch. 1. Because BillFloat’s original complaint did not request damages,
but rather sought only declaratory relief and because Golden Pacific sought to vindicate its rights
on issues where common issues of law and fact did not predominate with the declaratory relief
action (as this Court previously found), Golden Pacific filed a standalone complaint in Sacramento
in October 2015.
As a matter of law, a cross-complaint to BillFloat’s declaratory relief action was not
required. See Industrial Indem. Co. v. Mazon, 158 Cal.App.3d 862, 866 (1984) (stating that a
cross complaint is not required “where the only relief sought is a declaration of the rights and
duties of the respective parties in an action for declaratory relief.”); E.L. White, Inc. v. Huntington
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Beach, 21 Cal.3d 497,505, fn.4 (1978) (“if any party to an action seeks a remedy other than
declaratory relief, the compulsory joinder provisions apply.”); Russo. v. Scrambler Motorcycles,
56 Cal.App.3d 112 (1976) (reversing summary judgment in part because prior claims against
plaintiff involved only averments of declaratory relief, citing Legislative Committee Comment to
section 426.60, stating that “Subdivision (c) makes the provisions for compulsory joinder of
causes of action inapplicable where the only remedy sought by any party to an action is a
declaration of the rights and duties of the parties.”). See also Code of Civ. Proc. § 426.60 (“This
article [including compulsory cross complaint rule set forth in Code of Civil Procedure section
426.30] does not apply where the only relief sought is a declaration of rights and duties of the
respective parties in an action for declaratory relief under Chapter 8 (commencing with Section
1060) of Title 14 of this part.”); California Practice Guide, Civil Procedure Before Trial (Rutter) §
6:521 (“But there is no bar from failure to assert a cross-complaint where: ...Plaintiff sought only
declaratory relief in the first action. [CCP§426.60(c)...]”).
Here, the only relief sought by BillFloat in its initial complaint filed in San Francisco
sounds in declaratory relief. See RIN Attch. 1, at ۤ 50-58. No damages were requested in the
prayer, or otherwise. /d. at pp. 11. Moreover, as this Court previously found (and BillFloat did
not challenge), common issues of law and fact between the Golden Pacific complaint and the
declaratory relief action did not predominate. See BillFloat RJN at Attch. Q. Accordingly,
Plaintiff Golden Pacific was within its rights to file its initial claims against BillFloat as a
standalone action. There was no gamesmanship on Golden Pacific’s part. Indeed, when Golden
Pacific was confronted with a motion to change venue asserting that its claims were at least
initially improperly venued in San Francisco, Golden Pacific filed a non-opposition and allowed
its claims to be transferred, expressly reserving its right to seek-retransfer to Sacramento County
pursuant to Code of Civil Procedure section 397(c). RIN at Attch. 3.
Here, by contrast, BillFloat's actions have repeatedly been motivated by gamesmanship
and disregard of prior rulings of this Court. In particular: (1) rather than respond to Golden
Pacific’s Notice of Default required by contract, BillFloat ran into this Court seeking declaratory
relief (mistakenly) believing that this would require all of the disputes to be venued in San
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Francisco County: (2) rather than presenting its initial claims for damages as a cross complaint to
Golden Pacific’s complaint (filed on October 2, 2015) and without a notice of default of its own
alleged breaches, BillFloat amended its declaratory relief action on November 3, 2015 and then
later on November 5, 2015 added individual defendants through Doe amendments despite the fact
that several of the defendants were explicitly referenced in the FAC; (3) BillFloat aggressively
opposed the bank’s motion to change venue of that FAC and when the bank and other defendants
prevailed in receiving an order from this Court transferring BillFloat’s claims to Sacramento
County, BillFloat evaded the order, dismissing its claims without prejudice. Then BillFloat
artificially bifurcated its claims by filing a new action in Contra Costa County against the
individual defendants and the instant cross complaint against the bank; and (4) Even now, in an
attempt to manufacture changed conditions to escape for the binding effect of this Court’s prior
ruling transferring its claims to Sacramento County, BillFloat has dismissed the Contra Costa
Action with prejudice. However, in doing so, the Contra Costa ruling finding that BillFloat is
bound by the Court’s order transferring BillFloat’s claims made in the FAC to Sacramento County
pursuant to Karst cannot be challenged and collaterally estops BillFloat from challenging that
determination. For these reasons, BillFloat's last-gasp attempt to evade this Court's prior order
transferring BillFloat's claims to Sacramento County fails. The Motion to Change Venue should
be granted in its entirety.
Ill. CONCLUSION
For all of the above reasons, the Motion to Change Venue should be granted. No changed
conditions exist that relieve BillFloat from compliance with this Court’s prior order transferring
venue of the claims first made in the FAC to Sacramento County. Because BillFloat continues to
be bound by this Court’s prior order transferring its claims to Sacramento County and because this
Court should also transfer Golden Pacific’s claims pursuant to section 397(c) for convenience of
the witnesses and to serve the ends of justice, this Motion should be granted in its entirety.
Dated: 6-$ ~~
KRONICK, MOSKOVITZ, TIEDEMANN & GIRARD
By: Z io
Christopher Onstott, Attorneys for GOLDEN PACIFIC BANK
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PROOF OF SERVICE
STATE OF CALIFORNIA, COUNTY OF SACRAMENTO
At the time of service, I was over 18 years of age and not a party to this action. I am
employed in the County of Sacramento, State of California. My business address is 400 Capitol
Mall, 27th Floor, Sacramento, CA 95814.
On June 8, 2016, | served true copies of the following document(s) described as GOLDEN
PACIFIC BANK'S SUPPLEMENTAL BRIEF IN SUPPORT OF MOTION TO CHANGE
VENUE on the interested parties in this action as follows:
SEE ATTACHED SERVICE LIST
BY E-MAIL OR ELECTRONIC TRANSMISSION: Based on a court order or an
agreement of the parties to accept service by e-mail or electronic transmission, I caused the
document(s) to be sent from e-mail address ehamman@kmtg.com to the persons at the e-mail
addresses listed in the Service List. The document(s) were transmitted at or before 5:00 p.m. I did
not receive, within a reasonable time after the transmission, any electronic message or other
indication that the transmission was unsuccessful.
I declare under penalty of perjury under the laws of the State of California that the
foregoing is true and correct.
Executed on June 8, 2016, at Sacramento, California.
\ :
Enedelia Hamman
1458904.1 14023-004 1
~~ GOLDEN PACIFIC BANK'S SUPPLEMENTAL BRIEF IN SUPPORT OF MOTION TO CHANGE VENUESERVICE LIST
Golden Pacific Bank, N.A. v. BillFloat, Inc., Ryan Gilbert, Sean O'Malley
San Francisco Superior Court, Case No. CGC-16-549804
Attorneys for BillFloat, Inc.:
William T. Webb
Jennifer D. Yu
155 Montgomery Street, Ste. 1200
San Francisco, CA 94104
Tel.: 415-277-7200
Fax: 415-277-7210
Email: wwebb@webblegalgroup.com
jyu@webblegalgroup.com
1458904.1 14023-004
Attorneys for Ryan Gilbert & Sean O'Malley:
Peter L. isola
Robert I. Lockwood
HINSHAW & CULBERTSON LLP
One California Street, 18" Floor
San Francisco, CA 94111
Tel.: 415-362-6000
Fax: 415-834-9070
Email: Plsola@hinshawlaw.com
rlockwood@hinshawlaw.com
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GOLDEN PACIFIC BANK'S SUPPLEMENTAL BRIEF IN SUPPORT OF MOTION TO CHANGE VENUE
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10 1 BRUCE A. SCHEIDT, State Bar No. 155088 bscheidt@kmtg.com CHRISTOPHER ONSTOTT, State Bar No. 225968 constott@kmig.com ERROL C. DAUIS, State Bar No. 279313 edauis@kmig.com KRONICK, MOSKOVITZ, TIEDEMANN & GIRARD A Professional Corporation 400 Capitol Mall, 27" Floor Sacramento, California 95814 Telephone: (916) 321-4500 Facsimile: (916) 321-4555 Attorneys for Plaintiff and Cross-Defendant GOLDEN PACIFIC BANK, N.A. ELECTRONICALLY FILED Superior Court of California, County of San Francisco 06/08/2016 Clerk of the Court BY:EDNALEEN ALEGRE Deputy Clerk SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN FRANCISCO GOLDEN PACIFIC BANK, N.A., Plaintiff, v. BILLFLOAT, INC., RYAN GILBERT, SEAN O'MALLEY, and DOES 1-50, inclusive, Defendants. BILLFLOAT, INC. Cross-Complainant, Vv. GOLDEN PACIFIC BANK, N.A., and ROES 1-50, Cross-Defendants. 1458904.1 14023-004 Case No. CGC-16-549804 GOLDEN PACIFIC BANK'S SUPPLEMENTAL BRIEF IN SUPPORT OF MOTION TO CHANGE VENUE Judge: Hon. Harold E. Kahn Date: June 22, 2016 Time: 9:30 a.m. Dept.: 302 Case Transferred from Sacramento County: — January 11, 2016 Trial Date: None Set ~~ GOLDEN PACIFIC BANK'S SUPPLEMENTAL BRIEF IN SUPPORT OF MOTION TO CHANGE VENUEw wu L INTRODUCTION This court should affirm its May 11, 2016 tentative ruling and transfer the entirety of this action to Sacramento County pursuant to the rule first set forth in the Karst line of cases. BillFloat, Inc.’s ("BillFloat") belated dismissal of its action against the individual defendants in Contra Costa County ("Contra Costa Action") does not constitute a sufficient change of conditions for it to escape the binding effect of this Court’s prior ruling. Judge Spanos’ rationale for binding BillFloat to this Court’s prior order transferring venue of BillFloat’s claims to Sacramento County pursuant to Karst (the rationale of which was adopted by this Court in its tentative ruling), applies equally here notwithstanding BillFloat’s subsequent dismissal of the Contra Costa Action. Indeed, Karst and its progeny have rejected previous plaintiffs’ attempts to manufacture “changed conditions” in an effort to avoid binding prior venue rulings by changing the parties named or the causes of action presented. Here, the actions of the respective parties lie in stark contrast to one another. In the face of an adverse venue ruling on Golden Pacific Bank N.A.’s (“Golden Pacific”) complaint, Golden Pacific did not attempt to artificially avoid the ruling. Instead, Golden Pacific allowed the action to be transferred, preserving the right to seek retransfer of its claims to Sacramento at a later date pursuant to Code of Civil Procedure section 397(c). In contrast, BillFloat has actively sought to evade this Court and the Contra Costa court’s prior orders. Here, the rule set forth in Karst, the convenience of third party witnesses, and the ends of justice all require that this action be transferred to Sacramento County. For these reasons, the Motion should be granted. I. LEGAL ARGUMENT A. No “Changed Circumstances” Excuse BillFloat’s Compliance with this Court’s Previous Order Transferring Venue of BillFloat’s Claims to Sacramento County. This Court has asked the parties to address whether BillFloat’s dismissal with prejudice of the Contra Costa Action against Golden Pacific’s individually named directors and officers constitutes sufficiently changed circumstances to excuse BillFloat from this Court’s prior order transferring venue to Sacramento County. The short answer is no, There are no changed circumstances/conditions in this case that would justify this Court’s departure from its prior order 1458904.114023-004 1Nv w aD transferring venue of BillFloat’s claims. In fact, BillFloat’s argument that its belated dismissal of the Contra Costa Action created sufficiently altered conditions excusing it from being bound by this Court’s prior order transferring venue fails because: (1) the Court may not consider the dismissal of individual defendants on the same claims after the motion to transfer venue was filed pursuant to the well-settled freezing of the facts rule; (2) it is contrary to the Karst line of cases itself; (3) it would subvert the very policies underlying Karst as referenced by Judge Spanos in transferring the Contra Costa Action and expressly adopted by this Court in its tentative ruling transferring this action to Sacramento County: and (4) BillFloat’s argument that its precarious venue posture was created because Golden Pacific’s complaint should have been filed as a cross complaint fails as a matter of law. 1 The Freezing Of The Facts Rule Prevents This Court From Considering The Effect Of BillFloat’s Dismissal Of The Contra Costa Action. BillFloat’s dismissal of the individual defendants in the Contra Costa Action cannot be considered in determining whether there are “changed facts or new conditions since the making of the [previous] order.” See Gaskill vy. Richmaid Ice Cream Company, 111 Cal.App.2d 745, 746 (1952). Pursuant to the “freezing of the facts” rule, dismissals of parties occurring after a motion to change venue is filed may not be considered for purposes of ruling on the motion to change venue. This issue was raised by Golden Pacific’s counsel at the hearing on May 11, 2016, but the Court postponed argument on this issue until supplemental briefing was ordered, finding that the issue was premature until BillFloat decided whether to dismiss the Contra Costa Action with prejudice.' As the court held in Abbey v. Schaefer, 108 Cal.App.2d 554 (1952), “the right of the ' See Onstott Supp. Decl. in Support of Supplemental Brief, at Exh. A, (May 11, 2016 Hearing Transcript, pp. 26-27 (“Mr. Onstotf: [sic] With respect to the Court’s suggested solution, there’s a couple of problems with this solution. One is under Karst itself. The Judge in the Contra Costa case rightfully pointed to the freezing of the facts rule. The Court: So but what you’re doing now, sir, is your arguing change of circumstances, that there are no change of circumstances. Onstott: Uh-huh. The Court: When we don’t even know if they’re going to proceed in Contra Costa County....And so I’m not going to address that right now. That, to me, is premature. Ar, Onstotf [sic]: And, in effect, to also argue that it, again, violates the freezing of the facts rule. If this were to be allowed in every case, then we could always mix up the parties and figure out -the whole point of the Karst line of cases is to prevent this kind of relitigation of the issues.....” 1458904. 14023-004 2 GOLDEN PACIFIC BANK'S SUPPLEMENTAL BRIEF IN SUPPORT OF MOTION TO CHANGE VENUEmoving party to a change of venue depends upon the conditions existing at the time the demand is made. The parties defendant, as revealed by the pleadings existing at the time the demand is made and the demurrer is filed are the only parties to be considered on a motion for change of place of trial.” Id. at 557. See also Kallen y. Serretto, 126 Cal.App.548 (1932) (“The right of the moving party to a change depends upon the conditions existing at the time the demand is made. Hence, the parties defendant ‘as revealed by the pleadings existing at the time’...the demand was made ...are the only parties to be considered on the motion for a change of the place of trial.”); Warren v. Ritter, 61 Cal.App.2d 403, 405 (1943) (“After service of the notice of motion for change of venue, plaintiff filed amendments to his complaint. They cannot be considered as having any bearing on the motion.”); Donahoe v. Wooster, 163 Cal.114 (1912) (“[T]he right to a change of place of trial must be determined by the conditions existing at the time of the appearance of the party demanding the change.”). Indeed, in the venue context, the cases finding “changed conditions” excused compliance with a previous ruling transferring venue, have focused on conditions that had changed before the motion to transfer venue had been brought. See, e.g., People v. Spring Valley Co., LTD, 109 CalApp.2d 656 (1952) (changed conditions caused by passage of nine years after prior order allowed for impartial jury). Here, Golden Pacific’s Motion to Change Venue (“Motion”) was filed on March 10, 2016. BillFloat’s dismissal with prejudice of the individual defendants did not occur until May 25, 2016, far after this Motion was filed. This Court may not consider the effect of BillFloat’s intentional dismissal of the Contra Costa Action pursuant to the well-settled freezing of the facts rule. Indeed, a plaintiff (in this case a cross-complainant) attempting to game venue by amendments to a complaint or adding or dismissing defendants to affect a venue determination is precisely the type of action that is foreclosed by this rule. Here, BillFloat’s dismissal of the Contra Costa Action occurred after this Motion was brought. It was expressly intentioned to affect this Court’s venue determination. Thus, the Court may not consider it when determining whether new conditions exist to excuse BillFloat’s compliance with this Court’s prior order transferring venue to Sacramento County pursuant to the well-settled freezing of the facts rule. Ml 1458904.1 141 14 32. The Karst Line Of Cases Establishes That An After-The-Fact Addition Or Dismissal Of Defendants Is Not Considered “Changed Conditions,” For Purpose Of Venue. The Karst line of cases provides strong support for the argument that BillFloat’s subsequent dismissal of the Contra Costa Action does not alter the binding nature of this Court’s prior order transferring venue of BillFloat’s claims to Sacramento Superior Court. Indeed, Karst itself rejected such an attempt to alter the parties sued to evade a prior venue ruling. Karst v. Seller, 45 Cal.App. 623 (1920). In Karst, the plaintiff dismissed its claim after the court ordered venue transferred and then refiled the litigation, adding a defendant who resided in the county where the action was brought. The plaintiff argued that the additional defendant added excused plaintiff from the binding effect of the ruling. The court rejected this tactic, stating “whether the matter may be considered res adjudicata or not, that a defendant, having been determined to be an improper party on one application for change of place of trial, cannot again, and perhaps, again and again, be made a defendant to give jurisdiction under the same facts, by merely camouflaging them in a different form of action which the facts will not support.” /d. at 627. The court in Tarman y. Sherwin, 189 Cal.App.2d 49 (1961), likewise rejected an attempt to evade a binding prior order transferring venue by artificially changing conditions of the complaint. In that case, after the plaintiff's action was ordered transferred, the plaintiff dismissed the case without prejudice and then refiled an identical complaint, except that it omitted a corporate defendant and further omitted an allegation of the complaint that the defendant failed to account for all monies received. The appellate court reversed the superior court’s denial of the motion to change venue based upon these revisions to the complaint and ordered the trial court to grant the motion for change of venue. The court rejected the idea that these developments constituted a change of circumstances, stating, “[o]f course, change of circumstances after the first order may warrant denial of a later motion. People v. Spring Valley Co., 109 Cal.App.2d 656, 667-668. But in our case, plaintiff does not, and on the record cannot, contend that any change of circumstances from the first to the second motion is shown.” /d. at 52-53. The cases dealing with the res judicata effect of an order to change venue specifically, and those dealing with res judicata effects of any prior order, generally, have a common thread in 1458904,1 14023-004 4 GOLDEN PACIFIC BANK'S SUPPLEMENTAL BRIEF IN SUPPORT OF MOTION TO CHANGE VENUEdetermining whether changed conditions or facts should excuse compliance with a prior order. Courts reject changed conditions arguments when the conditions were intentionally changed by a party to avoid the binding effect of a prior court order. This explains the rulings set forth above in Karst and Tarman. in both cases, the courts rejected intentional attempts by the plaintiff to add or subtract causes of action/defendants to avoid the prior venue order. In contrast, changed conditions that were not intentionally created to avoid a prior binding order may excuse compliance with the prior order. For example, in People v. Spring Valley Co. Ltd, 109 Cal. App.2d 656, 667-668 (1952), the court found that changed conditions existed because the passage of nine years from the prior order granting a change of venue had created changed conditions that allowed for an impartial trial in the community. Similarly, in Hurd v. Albert, 214 Cal.15 (1931), the court found that changed conditions excused the binding effect of a prior court order finding that a property was still suitable for residential purposes. The court allowed the construction of a gas station on the property that was originally subject to a restriction for residential purposes only. /d. at 22. In that case, five years had passed since the prior order and the court found that the “increased vehicular traffic and congestion” when considered in conjunction with other changes that had occurred outside of the at-issue tract of property had since made the property unsuitable for residential purposes and therefore, the changed conditions excused compliance with the prior court order. Id. at 22-23, & 26. Likewise, in Hasselbach v. Department of Alcoholic Beverage Control, 167 Cal.App.2d 662 (1959), the court found that res judicata did not bind an applicant to a previous denial of a liquor license. In particular, there, the court found that in the interval between the previous denial of the license and the current application, the traffic on the boulevard had increased by 30 percent, the number of customers had increased by approximately 18 percent, and at least three new commercial enterprises had commenced operations in the neighborhood. /d. at 666-667. In Cox v. State Welfare Board, 193 Cal.App.2d 708 (1961), Respondent had previously received a superior court order in his favor ordering the State Social Welfare Board to restore certain old age security benefits to him after the board had determined him ineligible because of his spouses' wealth status. Five months later, Respondent’s wife received notice that the Social Security Act was amended to 1458904.1 14023-004 5 GOLDEN PACIFIC BANK'S SUPPLEMENTAL BRIEF IN SUPPORT OF MOTION TO CHANGE VENUEnN we an require respondent's spouse to be considered in the benefits calculation. A subsequent court rejected respondent's argument that the prior court order precluded the court from considering his spouse’s income in the benefits determination. The court found that the subsequent amendment of the Social Security Act after the prior court order, together with the spouse having reached the eligibility age of 62 years old in the interim after the prior order, “created a new factual and legal situation,” and thus the “judgment did not foreclose the board from applying the new board standard.” Jd. at 719-21. See also Pacific Tel. &Tel. Co. v. County of San Francisco, 197 Cal.App.2d 133, 158 (1961)(finding changed conditions excused any res judicata effect of first judgment because the passage of time created a “vast change in conditions ... and it is evident that telephone service is not at the present time a municipal affair but a matter of statewide concern.”). As set forth above, courts are loathe to find changed conditions or facts where the conditions were intentionally changed by the party for the purpose of avoiding the res judicata effect of the prior order. To the contrary, in practically every case, changed circumstances have been found to exist only when through the passage of time or a change in the law, conditions largely outside of the control of the party bound by the prior ruling had changed so as to make the effect of the prior ruling no longer valid or wise. Indeed, the Karst progeny of cases has universally rejected any plaintiff's attempt to alter the mix of parties to an action or camouflage its claims in order to avoid a prior venue ruling. Moreover, due to the freezing of the facts rule, no case stands for the proposition that a plaintiff may avoid the binding nature of a prior order transferring venue by intentional dismissal of parties or claims after a venue motion is filed. 3. Finding Changed Of Conditions Here Subyerts The Policies Underlying Karst. The general rule against allowing a party to escape the res judicata nature of a venue ruling through intentional actions meant to change the conditions of the previous ruling also contravenes the policies underlying the Karst line of cases. These policies were set forth in Judge Spanos’ ruling transferring the Contra Costa Action to Sacramento, and found persuasive in this Court’s May 11, 2016 tentative ruling. First, BillFloat’s dismissal of the Contra Costa Action does not change the fact that it previously alleged claims in the improper venue against the Defendants, allowing Defendants, to choose a proper venue pursuant to Code of Civil Procedure 1458904.1 14023-004 6 GOLDEN PACIFIC BANK'S SUPPLEMENTAL BRIEF IN SUPPORT OF MOTION TO CHANGE VENUE _Ww w xn a section 398(b). Allowing a party to receive an adverse venue ruling by dismissing its claims without prejudice and then altering the parties sued under the same claims frustrates the legislative scheme allowing defendants to pick the venue once an improper venue is alleged. Section 398(b)'s purpose is further frustrated by BillFloat's subsequent dismissal of its actions against the individual defendants with prejudice during the pendency of the subsequent Motion to Change Venue seeking to enforce the Court’s prior order transferring venue. Second, allowing BillFloat’s tactic of dismissal of the FAC without prejudice to succeed by allowing BillFloat to alter the mix of parties after the adverse venue ruling frustrates the purpose behind the freezing of the facts rule. Here, BillFloat opposed the prior motion to change venue and received the adverse venue ruling transferring its claims to Sacramento County based upon the state of the complaint as it existed at the time the motion to change venue. If BillFloat, in the face of an adverse venue ruling, could then dismiss Defendants (with or without prejudice) and file a subsequent case based upon the same facts as its original claims, altering the mix of parties sued, there would be no reason for a court to limit consideration of the initial motion to the circumstances as they existed at that time the motion to transfer venue was filed. Third, allowing BillFloat to intentionally evade this Court’s prior venue ruling by dismissing parties after the order, frustrates judicial economy. Judge Spanos previously rejected BillFloat’s argument that because mix of parties was different, res judicata did not apply due to changed conditions. As the Contra Costa court itself found, in the face of a Golden Pacific’s second motion for a change of venue in the San Francisco action, BillFloat could have dismissed the San Francisco action without prejudice. Instead, BillFloat set the San Francisco Superior Court to the task of considering and deciding the motion. “Only then, dissatisfied with the court’s ruling, did BillFloat dismiss the San Francisco action -thereby attempting to render the court’s work a fruitless nullity.” See May 4, 2016 Supp. RJN at Attch. 19. Similarly, to allow BillFloat to be relieved from the consequences of its intentional gamesmanship by a subsequently dismissing certain defendants after the order transferring its claims to a different county makes a mockery of the court’s prior order, ensuring re-litigation of the same question in venue proceedings. It 1458904.1 14023-004 7 GOLDEN PACIFIC BANK'S SUPPLEMENTAL BRIEF IN SUPPORT OF MOTION TO CHANGE VENUEoo em ND 1 12 13 14 15 16 17 18 19 21 22 23 24 25 26 27 28 4, Golden Pacific did not create the conditions causing BillFloat’s dismissal of the FAC by failing file a cross complaint to BillFloat’s declaratory relief action. At the May 11, 2016 hearing, BillFloat’s counsel repeatedly argued that the situation confronting the Court concerning venue was the result of Golden Pacific improperly filing a standalone complaint in Sacramento against BillFloat, instead of a cross-complaint to BillFloat’s declaratory relief action. See Onstott Supp. Decl. in Support of Supp. Brief, at Exh. A; 14:18- 15:17 (“Mr. Webb: They had a duty, if they had any cross complaint, if they had any affirmative claims they wanted aired, they had a duty under the compulsory cross-complaint statute to file it as a cross-complaint in San Francisco.”), BillFloat’s argument fails as a matter of fact and law. Here, pursuant to the Amended Joint Marketing and Joint Technology Improvement Agreement, a party alleging breach of the Agreement was required to provide a “written notice containing: (i) a detailed description of the perceived breach, and (ii) a detailed description of the steps necessary to cure the breach. The Party alleged to be breaching the Agreement shall have ten (10) business days to attempt to cure the perceived breach.” See Golden Pacific’s Request for Judicial Notice, filed March 10, 2016, Attch. 14, Exh. 1, p. 9, section 12.2. Golden Pacific abided by this provision by providing written notice of the alleged breaches to BillFloat on August 17, 2015. Jd. at Exh. 2. Rather than abide by this notice provision or seeking to work out any differences with Golden Pacific, BillFloat rushed into this Court in violation of that notice and cure provision to try to place venue in San Francisco by filing a declaratory relief action on August 28, 2015. /d., Attch. 1. Because BillFloat’s original complaint did not request damages, but rather sought only declaratory relief and because Golden Pacific sought to vindicate its rights on issues where common issues of law and fact did not predominate with the declaratory relief action (as this Court previously found), Golden Pacific filed a standalone complaint in Sacramento in October 2015. As a matter of law, a cross-complaint to BillFloat’s declaratory relief action was not required. See Industrial Indem. Co. v. Mazon, 158 Cal.App.3d 862, 866 (1984) (stating that a cross complaint is not required “where the only relief sought is a declaration of the rights and duties of the respective parties in an action for declaratory relief.”); E.L. White, Inc. v. Huntington 1458904.1 14023-004 8 GOLDEN PACIFIC BANK'S SUPPLEMENTAL BRIEF IN SUPPORT OF MOTION TO CHANGE VENUEN we x Beach, 21 Cal.3d 497,505, fn.4 (1978) (“if any party to an action seeks a remedy other than declaratory relief, the compulsory joinder provisions apply.”); Russo. v. Scrambler Motorcycles, 56 Cal.App.3d 112 (1976) (reversing summary judgment in part because prior claims against plaintiff involved only averments of declaratory relief, citing Legislative Committee Comment to section 426.60, stating that “Subdivision (c) makes the provisions for compulsory joinder of causes of action inapplicable where the only remedy sought by any party to an action is a declaration of the rights and duties of the parties.”). See also Code of Civ. Proc. § 426.60 (“This article [including compulsory cross complaint rule set forth in Code of Civil Procedure section 426.30] does not apply where the only relief sought is a declaration of rights and duties of the respective parties in an action for declaratory relief under Chapter 8 (commencing with Section 1060) of Title 14 of this part.”); California Practice Guide, Civil Procedure Before Trial (Rutter) § 6:521 (“But there is no bar from failure to assert a cross-complaint where: ...Plaintiff sought only declaratory relief in the first action. [CCP§426.60(c)...]”). Here, the only relief sought by BillFloat in its initial complaint filed in San Francisco sounds in declaratory relief. See RIN Attch. 1, at €§ 50-58. No damages were requested in the prayer, or otherwise. /d. at pp. 11. Moreover, as this Court previously found (and BillFloat did not challenge), common issues of law and fact between the Golden Pacific complaint and the declaratory relief action did not predominate. See BillFloat RJN at Attch. Q. Accordingly, Plaintiff Golden Pacific was within its rights to file its initial claims against BillFloat as a standalone action. There was no gamesmanship on Golden Pacific’s part. Indeed, when Golden Pacific was confronted with a motion to change venue asserting that its claims were at least initially improperly venued in San Francisco, Golden Pacific filed a non-opposition and allowed its claims to be transferred, expressly reserving its right to seek-retransfer to Sacramento County pursuant to Code of Civil Procedure section 397(c). RIN at Attch. 3. Here, by contrast, BillFloat's actions have repeatedly been motivated by gamesmanship and disregard of prior rulings of this Court. In particular: (1) rather than respond to Golden Pacific’s Notice of Default required by contract, BillFloat ran into this Court seeking declaratory relief (mistakenly) believing that this would require all of the disputes to be venued in San 1458904.114023-004 9 ~~ GOLDEN PACIFIC BANK'S SUPPLEMENTAL BRIEF IN SUPPORT OF MOTION TO CHANGE VENUENe w 10 i 12 14 15 16 Francisco County: (2) rather than presenting its initial claims for damages as a cross complaint to Golden Pacific’s complaint (filed on October 2, 2015) and without a notice of default of its own alleged breaches, BillFloat amended its declaratory relief action on November 3, 2015 and then later on November 5, 2015 added individual defendants through Doe amendments despite the fact that several of the defendants were explicitly referenced in the FAC; (3) BillFloat aggressively opposed the bank’s motion to change venue of that FAC and when the bank and other defendants prevailed in receiving an order from this Court transferring BillFloat’s claims to Sacramento County, BillFloat evaded the order, dismissing its claims without prejudice. Then BillFloat artificially bifurcated its claims by filing a new action in Contra Costa County against the individual defendants and the instant cross complaint against the bank; and (4) Even now, in an attempt to manufacture changed conditions to escape for the binding effect of this Court’s prior ruling transferring its claims to Sacramento County, BillFloat has dismissed the Contra Costa Action with prejudice. However, in doing so, the Contra Costa ruling finding that BillFloat is bound by the Court’s order transferring BillFloat’s claims made in the FAC to Sacramento County pursuant to Karst cannot be challenged and collaterally estops BillFloat from challenging that determination. For these reasons, BillFloat's last-gasp attempt to evade this Court's prior order transferring BillFloat's claims to Sacramento County fails. The Motion to Change Venue should be granted in its entirety. Ill. CONCLUSION For all of the above reasons, the Motion to Change Venue should be granted. No changed conditions exist that relieve BillFloat from compliance with this Court’s prior order transferring venue of the claims first made in the FAC to Sacramento County. Because BillFloat continues to be bound by this Court’s prior order transferring its claims to Sacramento County and because this Court should also transfer Golden Pacific’s claims pursuant to section 397(c) for convenience of the witnesses and to serve the ends of justice, this Motion should be granted in its entirety. Dated: 6-$ ~~ KRONICK, MOSKOVITZ, TIEDEMANN & GIRARD By: Z io Christopher Onstott, Attorneys for GOLDEN PACIFIC BANK 1458904.1 14023-004 10 GOLDEN PACIFIC BANK'S SUPPLEMENTAL BRIEF IN SUPPORT OF MOTION TO CHANGE VENUE10 12 be 15 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF SACRAMENTO At the time of service, I was over 18 years of age and not a party to this action. I am employed in the County of Sacramento, State of California. My business address is 400 Capitol Mall, 27th Floor, Sacramento, CA 95814. On June 8, 2016, | served true copies of the following document(s) described as GOLDEN PACIFIC BANK'S SUPPLEMENTAL BRIEF IN SUPPORT OF MOTION TO CHANGE VENUE on the interested parties in this action as follows: SEE ATTACHED SERVICE LIST BY E-MAIL OR ELECTRONIC TRANSMISSION: Based on a court order or an agreement of the parties to accept service by e-mail or electronic transmission, I caused the document(s) to be sent from e-mail address ehamman@kmtg.com to the persons at the e-mail addresses listed in the Service List. The document(s) were transmitted at or before 5:00 p.m. I did not receive, within a reasonable time after the transmission, any electronic message or other indication that the transmission was unsuccessful. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on June 8, 2016, at Sacramento, California. \ : Enedelia Hamman 1458904.1 14023-004 1 ~~ GOLDEN PACIFIC BANK'S SUPPLEMENTAL BRIEF IN SUPPORT OF MOTION TO CHANGE VENUESERVICE LIST Golden Pacific Bank, N.A. v. BillFloat, Inc., Ryan Gilbert, Sean O'Malley San Francisco Superior Court, Case No. CGC-16-549804 Attorneys for BillFloat, Inc.: William T. Webb Jennifer D. Yu 155 Montgomery Street, Ste. 1200 San Francisco, CA 94104 Tel.: 415-277-7200 Fax: 415-277-7210 Email: wwebb@webblegalgroup.com jyu@webblegalgroup.com 1458904.1 14023-004 Attorneys for Ryan Gilbert & Sean O'Malley: Peter L. isola Robert I. Lockwood HINSHAW & CULBERTSON LLP One California Street, 18" Floor San Francisco, CA 94111 Tel.: 415-362-6000 Fax: 415-834-9070 Email: Plsola@hinshawlaw.com rlockwood@hinshawlaw.com 2 GOLDEN PACIFIC BANK'S SUPPLEMENTAL BRIEF IN SUPPORT OF MOTION TO CHANGE VENUE