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BRUCE A. SCHEIDT, State Bar No. 155088
bscheidt@kmtg.com
| constott(@kmig.com
ERROL C. DAUIS, State Bar No. 279313
edauis@kmtg.com
CHRISTOPHER ONSTOTT, State Bar No. 225968
ELECTRONICALLY
FILED
Superior Court of Califomia,
4] KRONICK, MOSKOVITZ, TIEDEMANN & GIRARD County of San Francisco
oy for Plaintiff
GOLDEN PACIFIC BANK, N.A.
Plaintiff,
14 | SILLELOAT, INC., RYAN GILBERT, SEAN
! O'MALLEY, and DOES 1-50, inclusive,
Defendants.
Cross-Complainant,
GOLDEN PACIFIC BANK, N.A., and ROES
1-50,
Cross-Defendants.
H} 1435265.2 14023-004
03/10/2016
Clerk of the Court
BY-:ROMY RISK
Deputy Clerk
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN FRANCISCO
Case No. CGC-16-549804
MEMORANDUM OF POINTS AND
AUTHORITIES IN SUPPORT OF
PLAINTIFF/CROSS-DEFENDANT'S
MOTION TO CHANGE VENUE
Judge: Hon. Harold E. Kahn
Date: May 11, 2016
Time: 9:30 a.m.
Dept.: 302
Reservation Number: 03100511-01
Case Transferred
from Sacramento County: — January 11, 2016
Trial Date: None Set
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S
MOTION TO CHANGE VENUETABLE OF CONTENTS
Page
L PROCEDURAL BACKGROUND 0... ccccccceteseseseseeeeteceeecseecnsertenseeneeseneseenensassseneraeanaes
A. Golden Pacific Files a Complaint in Sacramento Superior Court.
B. BillFloat’s First Amended Complaint Filed in San Francisco County. ..........-0+
Cc. BillFloat Files a Writ of Mandate Action in Sacramento County Superior
Court.
Dz. This Court Orders Venue of the FAC Transferred to Sacramento County..........
E. BillFloat Attempts to Evade This Court's Order By Dismissing its FAC
Without Prejudice and then Refiling the Materially Same Allegations Again.
in This Court... ccceceescesseeeesesseessseeseseseeseeseeseereesssssassssseessssseesiesvesseenesansrenesereneseeees 5
I. LEGAL ARGUMENT .....ccccscseseesssseseseeseesssressserscssenssceresssssarseseessuesssesesserasesesneseavesesssansusenanes 6
A. Res Judicata Bars BillFloat From Bringing its Claims Outside of
Sacramento. . +6
1, Applicable Standard in Venue Actions. .
2. Well-Settled Case Law Bars Evasion of A Venue Transfer Ruling
3. The Cross Complaint Presents the Same Material Claims Against
Defendamts.........scscssscssscssesereseessesersssssassaterenssasensenssessuasssesesceessssessesensstenees 8
(a) Theft of Trade Secrets. ........ccccccesesesssesseensenecessessecreseseseseneeseneseeeeee dD
(b) Interference with Contractual Relations/Economic Relations. ..........9
(c) Business and Professions Code Section 17200 Claims... 10
(d) Judicial Reference Claim
4, BillFloat Did Not Challenge the Order pepe ately Venue to
SacraMentO, oss cescecsesesseeseeseeseess wll
B. Golden Pacific’s smukaneniin Should Be Transferred Pursuant to C.C.P.
397(c). .. 13
Cc. The Ends of Justice are Served Better by a Sacramento County Venue............0..... 14
H III. CONCLUSION
H} 1435265.2 14023-004 i
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S,
MOTION TO CHANGE VENUETABLE OF AUTHORITIES
Page(s)
State Cases
Abbey v, Schaefer,
108 Cal. App.2d 554 (1952) c.ssscsscsssssssnsstsessnsessstiastiesssnssisastinstsissssssiassssesseunssnsesal
Baird v. Smith,
21 Cal. App.2d 221, 223 (1937) sesscesscsesssestersessssssoeseesssstnstisstietiessiesietssivatvetsstessesie 13
Bybee y. Fairchild,
75 Cal. App.2d 35 (1946)... ecesssssesesssssessssesseesscsrssesencsecsncessnsarsneearensaceneeneceersuecavssetaneesneaeanenses 9
Carruth vy, Superior Court,
80 Cal. App.3d 215 (1978) sessssssssssssssssssnstsssessneeneree
Corfee v. S. California Edison Co.,
202 Cal. App.2d 473 (1962) ...ccccccssseesesseesssessssessessssessrssussseesssseesssessessssnnecssussuecceneesnesnereessns 13
Freemont Indem. Co. v. Fremont General Corp.,
PA SHC aA pope Athn 97-200 7 etal erst att crater tetas ea eet etal eater 9
Gallin v. Superior Court,
230 Cal. App.3d 541 (1991). cecssesessesesseeiessesssssessassssssssssessessessessesessessvesscssetsucsntsnteansnesanens 10
Gaskill v, Richmaid Ice Cream C
111 Cal.App.2d 745 (1952).
7,8, 11,13
Harden v. Skinner & Hammond,
130 Cal App.2d 750 (1955) .seesseessecsesseeseesseesseesseesssessuessessessesssssussuarssaessseesaeennessnecsnesneeenee LS
Karst y. Seller,
45 Cal. App. 623 (1920) ..ccscccecssescssesseeseseessecssecssuessusssessseeevessrssseesecenasareeeneeeneesnesnersene 7,8, 10, 11
Minatta v. Crook,
166 Cal App.2d 750 (1959) .ssscssessusssssscsetnssssnsssisssssnsssstssasenssttestusstenssssnsenassseaeeeseel 5
Pacific Coast Title Ins. Co. v. Land Title Ins, Co.,
97 Cal. App.2d 829 (1950)
Plum v. Forgay Lumber Co.,
118 Cal-App. 76 (1931) sssssssssssesssssssssssstsntatsetensistisstsenissisessatietiatssiiatneietssesee 8
Smith v. Smith,
SBC Al tD TZ EBS lal ababaadadudadadabalshabsbaecedededudatadalalatelalabdodadatalatytalalaladadedetadadelatalaabalanaldald 11
14352652 14023-004 ii
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S,
MOTION TO CHANGE VENUETABLE OF AUTHORITIES
(CONTINUED)
Page(s)
Taffe v. Bloch,
BDF Cal A ap: 7 811.9 3.2) ages atta ab obaonltate tetera baad ever oper el at strates 4,12
Tarman v. Sherwin,
189 Cal. App.2d 49 (1961) cessssssssessssssesssssssesessusussssssseseessuasasssasisssatssssseseeesssseassesesevenssssee 8,11
State Statutes
Business & Professions Code 17200 ......ccceccsescseseseseseseeeeeeeeeeeeteseestecseseseaeseasaeseseseeteaeseaeenenes 3, 6, 8,10
Code Civt Pro S95 tr leelatetolchchaedededadatedabalatabalahardedededotedabehabarahdadeledstetelatebebebsnenavand 6,9, 11
Code Civ. Pro. § 396 .cccsscesseesssesssessssssssessessesssesessssasssessesseesesssessessessesseeseeseesessecasessssessenseneenteane 1,15
CODECIVIPRO GES OT eat lalctdedadatatatedababehahdadaddadadatabsbatalebabahaladedadadatalebalalaedadedalolatabelatabelabeb dea 2, 13,15
Code Civ. Pro. §$ 398 viccccceessceesresessesnsesssseesssneeseesessrsvesecusscassusacsiecsnsessesesessnsersnssasaeaveeeeaeane 1,4, 12
Code Civ. Pro. § 473...... teteseeels 5, 8, EL
Other Authorities
3 WITKIN, CAL. PROCEDURE, Actions, § 822 (Sth ed. 2008) ...cesccssecsesesseeeeeessessstereeteeeaeeesseneneee 9
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Plaintiff and Cross-Defendant Golden Pacific Bank, N.A. (“Golden Pacific”) moves that
this court transfer this entire action to the Superior Court for the State of California, County of
Sacramento (“Sacramento County Superior Court”). Cross-Complainant BillFloat, Inc.’s
(“BillFloat”) claims against Golden Pacific are subject to a binding decision of this Court
transferring those claims to Sacramento County Superior Court. The matter is res judicata and
binding upon BillFloat. This Court has already conclusively established that venue of these claims
is Sacramento County Superior Court pursuant to Code of Civil Procedure sections 396b and 398.
On January 7, 2016, this Court transferred venue of BillFloat’s same material claims and
causes of action against Golden Pacific to Sacramento County Superior Court. BillFloat failed to
appeal this Court’s order or seek relief from that ruling pursuant to Code of Civil Procedure § 473.
Instead, to try to evade the order, BillFloat dismissed its First Amended Complaint filed against
Golden Pacific and other defendants without prejudice on January 22, 2016, and refiled those
same material claims against Golden Pacific in this action on February 8, 2016, naming other
individual defendants in a like case filed the same day in Contra Costa Superior Court (the
“Contra Costa Action”). A motion to change venue in the Contra Costa Action to Sacramento
County Superior Court is currently pending in that court.
This Court’s prior ruling establishes that the proper venue for BillFloat’s claims set forth in
this action is Sacramento County Superior Court. It is well-settled in California that the principals
of res judicata and estoppel bar BillFloat from refiling the same material claims again in this
Court after having those same claims transferred to another county.
Golden Pacific also requests that this Court transfer venue of Golden Pacific’s underlying
complaint because of third-party witness convenience and the ends of justice. Golden Pacific
requests that this Court order venue transferred to Sacramento County Superior Court.
I. PROCEDURAL BACKGROUND
This action is one of several cases currently pending between BillFloat and entities and
individuals related to Golden Pacific. On August 28, 2015, BillFloat filed a complaint in San
Francisco County Superior Court seeking declaratory relief and judicial reference against Golden
Pacific as Case No. CGC-15-547679 (the “San Francisco Action”). (Request for Judicial Notice
1435265.2 14023-004 1
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S
MOTION TO CHANGE VENUEin Support of Motion to Change Venue ("RJN"), Attm. 1.) This action was brought solely in
response to Golden Pacific’s Notice of Default served on Plaintiffon August 17, 2015. (See RIN,
Attm. 1,939.)
A. Golden Pacific Files a Complaint in Sacramento Superior Court.
On October 9, 2015, Golden Pacific filed a Complaint against BillFloat, and BillFloat’s
president Sean O’ Malley and its Chief Executive Officer Ryan Gilbert in Sacramento County
|| Superior Court (“Sacramento Action”). That action alleged numerous causes of action against
interpretation of a single contract, but sought damages for numerous breaches of three separate
| agreements between the parties, asserted a request for rescission relief, and alleged several torts.
BillFloat moved to change venue of the Sacramento Action to San Francisco County on
November 10, 2015, based upon the residence of Ryan Gilbert and Sean O'Malley. (RIN, Attm.
date. (See RIN, Attm. 3.)
| B. BillFloat’s First Amended Complaint Filed in San Francisco County.
Rather than filing a cross-complaint to Golden Pacific’s action, BillFloat instead, on
November 3, 2015, filed a First Amended Complaint (“FAC”) in the San Francisco Action. (RJN,
} Attm. 5 ("FAC").) The FAC materially altered the Complaint by alleging 15 causes of action
against Golden Pacific. (See FAC, §{ 139-216.) The FAC focused on transactions between
Agreement and Marketing Agreement that were at issue in the Sacramento Action. The FAC
| further alleged that BillFloat and Golden Pacific “entered into a joint venture agreement, first
manifested in the Marketing Agreement, and later in the Amended Marketing Agreement” which
1435265.2 14023-004 2
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S,
MOTION TO CHANGE VENUEincluded the “Joint Technology” “owned by BF and GPB [which] is the ‘method for applying
certain underwriting criteria for small business lending ... so it can be run on a software platform
(e.g. the Licensed Software described in the License Agreement).” (FAC, { 127.)
In particular, the FAC alleged causes of action against Golden Pacific and other individual
defendants for (1) Theft of Trade Secrets; (2) Intentional Interference with Contractual Relations;
(3) Intentional Interference with Prospective Economic Relations; (4) Unfair, Unlawful and/or
Fraudulent Acts or Practices Pursuant to Business and Professions Code section 17200; (5) Breach
of Fiduciary Duty; and (6) Judicial Reference. (FAC, {ff 141-149, 176-216.) On November 5,
2016, BillFloat received court permission in the San Francisco Action to substitute various Golden
Pacific Directors and Officers as Doe Defendants in the FAC. (RIN, Attm. 6.)
Cc. BillFloat Files a Writ of Mandate Action in Sacramento County Superior Court.
On November 24, 2016, BillFloat filed a Writ of Mandate action in Sacramento County
Superior Court against Golden Pacific Bancorp, Inc., the parent company of Golden Pacific Bank,
N.A., seeking inspection of Golden Pacific Bancorp’s books and records in an effort to conduct
discovery in this action. (RJN, Attm, 7.) That case remains pending in Sacramento County.
D. This Court Orders Venue of the FAC Transferred to Sacramento County.
Golden Pacific and the individual defendants (collectively, "FAC Defendants") brought a
motion to change venue of the San Francisco Action based upon the fact that neither Golden
Pacific, nor any of the individually named defendants were San Francisco County residents.
(RIN, Attm, 8.) In particular, the motion to change venue pointed out that BillFloat’s causes of
action for Theft of Trade Secrets; Intentional Interference with Contractual Relations; Intentional
Interference with Economic Relations, Unfair, Unlawful, and/or Fraudulent Acts or Practices
Pursuant to Business & Professions section 17200; and for Judicial Reference were improper
because none of the FAC Defendants resided in San Francisco County. (RJN, Attm. 9, at 5:23-
9:9.) In FAC Defendants’ moving papers, FAC Defendants submitted a declaration from Golden
Pacific Chief Executive Officer Virginia Varela attesting to the fact that at the commencement of
the action, “Golden Pacific Bank’s corporate headquarters and principal place of business is in the
City of Sacramento, Sacramento County. Golden Pacific Bank’s corporate business operations are
1435265.2 14023-004 3
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S
MOTION TO CHANGE VENUEconducted solely out of our offices in Sacramento. Golden Pacific Bank does not have any branch
offices in the City and County of San Francisco.” (See RIN, Attm. 10, at 2:3-6.)
Golden Pacific moved to change venue of the San Francisco Action to Sacramento, stating
that “the Court should grant the instant motion and transfer venue to Sacramento County since
Defendants can establish that venue is not proper in San Francisco County for at least one cause of
action.” (RIN, Attm. 9, at 8:10-12.) The Notice of Motion and Motion to Change Venue
explicitly requested “an order transferring the above-captioned action and changing the place of
trial to the Superior Court of the State of California, County of Sacramento (‘Sacramento County
Superior Court’).” (RIN, Attm. 8, at 1:25-27.)
In Opposition to the Motion to Change Venue filed on December 23, 2015, BillFloat
argued only that Defendant Varela was a San Francisco resident. (RIN, Attm, 11, at 2:18-4:9.)
BillFloat did not oppose the FAC Defendants’ argument that the causes of action set forth in the
motion required a transfer of venue. (See RIN, Attm. 11.) BillFloat did argue that venue in San
Francisco was proper against Golden Pacific because the Sacramento Action was ordered
transferred to San Francisco, nor did BillFloat seek to sever Golden Pacific from the other
defendants named in the FAC.' Furthermore, BillFloat did not ask the court to stay its ruling
pending transfer of the Sacramento Action to San Francisco County.
On January 7, 2016, the Court granted Defendants’ Motion to Change Venue of BillFloat’s
FAC to Sacramento County. (See RJN, Attm. 12.) In the signed order, entitled “Order Granting
Defendants’ Motion to Change Venue to Sacramento County Superior Court.” the Court explicitly
found that “Defendants have presented evidence which establishes that at the commencement of
the lawsuit, San Francisco was not the principal place of business of Golden Pacific Bank, N.A.
and that none of the defendants resided in San Francisco.” (RIN, Attm. 12, at 2:9-11 (emphasis
added).) The Court further stated that “the court grants Defendants’ motion to change venue.”
' Indeed, BillFloat could not sever Defendants from the action. The pleadings were frozen at the time of
the motion to transfer. Taffe v. Bloch, 127 Cal.App. 678, 680 (1932). It was BillFloat who selected its
allegations and the defendants to be named in the FAC and BillFloat must now accept the consequences
pursuant to Code of Civil Procedure section 398(b) to allow FAC Defendants to select the venue of those
claims when BillFloat had initially selected an improper venue.
1435265.2 14023-004 4
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S
MOTION TO CHANGE VENUE,(RIN, Attm. 12, at 2:18-19 (emphasis added).) BillFloat did not appeal the San Francisco County
Superior Court’s order transferring venue of its allegations to Sacramento County, nor did
BillFloat seek reconsideration of the Court’s order. (Declaration of Christopher Onstott in
Support of Motion to Change Venue (“Onstott Decl.”), {.5.) BillFloat did not seek any relief from
the Court’s order pursuant to Code of Civil Procedure section 473. (Onstott Decl., § 5.) The order
transferring BillFloat’s allegations against Golden Pacific remains binding on BillFloat.
E. BillFloat Attempts to Evade This Court’s Order By Dismissing its FAC Without
Prejudice and then Refiling the Materially Same Allegations Again in This Court.
Golden Pacific abided by the Sacramento Superior Court’s order transferring venue and the
Sacramento Action was transferred to San Francisco County Superior Court. BillFloat’s actions
after its claims were transferred to Sacramento County, however, were in stark contrast to Golden
Pacific’s. On January 22, 2016, BillFloat attempted to evade this Court’s order by dismissing its
FAC without prejudice then refiling the same claims again in San Francisco. (See RIN, Attm. 13;
RJN, Attm. 14 ("Cross-Complaint").) BillFloat did not contact Golden Pacific's counsel prior to
this action to explain its reason for dismissing the FAC and then attempting almost immediately to
file the same causes of action again in the same court or suggest any other compromise to have the
litigation managed more effectively. (Onstott Decl., § 6.) In fact, BillFloat impeded Golden
Pacific from learning about the FAC’s dismissal for days by not serving it on Golden Pacific’s
counsel when it was submitted to the Court on January 22, 2016. (See Onstott Decl, { 6.) Instead,
on February 3, 2016, 12 days after BillFloat’s request for dismissal was filed and entered by the
court, BillFloat finally served a Notice of Entry of Dismissal of the FAC on Defendants. (See
Onstott Decl., | 6, Exh. B.)”
On February 8, 2016, BillFloat ignored this Court’s prior order that the case be venued in
Sacramento County and refiled materially the same allegations against Golden Pacific again in this
2 On February 3, 2016, after receiving the Notice of Entry of Dismissal, Defendants’ counsel contacted
BillFloat’s counsel by email and asked if BillFloat intended to refile some or all of its claims, and, if so,
when and where would they be refiled. (See Onstott Decl., 7, Exh. C.) BillFloat did not respond to these
questions. (Onstott Decl., { 7.)
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S,
MOTION TO CHANGE VENUE| Court as a Cross-Complaint on February 8, 2016. (See Cross-Complaint.) That same day,
BillFloat filed a substantially similar action against the individual defendants originally named in
the FAC in Contra Costa County (the “Contra Costa Complaint”). (See RJN, Attm. 15.)
Like the FAC, the Cross-Complaint alleges causes of action for: (1) Theft of Trade Secrets;
(2) Intentional Interference with Contractual Relations; (3) Intentional Interference with
| Prospective Economic Relations; (4) Unfair, Unlawful, and/or Fraudulent Acts or Practices
Pursuant to Business and Professions Code section 17200; (5) Breach of Fiduciary Duty; and (6)
Judicial Reference. (Compare FAC, {J 144-149, 176-216, with Cross-Complaint, J 188-214; see
venue of BillFloat’s allegations against Golden Pacific to Sacramento County is res judicata.
BillFloat is estopped gaming the system by dismissing its claims without prejudice and then
refiling those same claims again in this Court. This Court has already expressly ordered
BillFloat’s claims transferred to Sacramento County.
Moreover, this Court may also order Golden Pacific’s claims transferred based upon the
convenience of third-party witnesses and to serve the ends of justice.
Il. LEGAL ARGUMENT
A. Res Judicata Bars BillFloat From Bringing its Claims Outside of Sacramento.
1. Applicable Standard in Venue Actions.
In successfully transferring the prior FAC, Golden Pacific cited to the Court the general
rule “the superior court in the county where the defendants or some of them reside at the
commencement of the action is the proper court for the trial of the action.” See Code Civ. Proc. §
defendants, both individual and corporate, in a county which is neither the residence nor the
| principal place of business of any defendant, an individual defendant has a right upon proper
actions against corporations.’ (Carruth v. Superior Court (1978) 80 Cal.App.3d 215, 221.)" (RIN,
Attm, 9.) In its FAC, BillFloat proceeded against both Golden Pacific and the individual
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defendants as part of a single action and now must live with the consequences of that choice,
which resulted in venue being transferred to Sacramento County. Pursuant to the principles of res
judicata and estoppel, BillFloat may not now try to undue its prior decision and evade a binding
ruling transferring venue by splitting its claims into two separate actions and refiling its claims
against Golden Pacific in the very same forum that it was transferred out of in the first place.
2. Well-Settled Case Law Bars Evasion of A Venue Transfer Ruling.
The San Francisco Superior Court’s January 7, 2016, Order transferring BillFloat’s FAC to
Sacramento County Superior Court is res judicata for the proper venue of the case. For years,
California courts have barred precisely the kind of trifling with the court that BillFloat has
attempted here. In Karst v. Seller, 45 Cal-App. 623 (1920), a plaintiff had brought suit against
defendant in Los Angeles Superior Court. The court granted defendant’s motion to change venue
because defendant’s residence was in San Francisco. /d. at 625. The plaintiff then dismissed its
action and brought suit on the same claims again in Los Angeles County, joining a resident of Los
Angeles in that action. The court found that “plaintiff was estopped by the order granting a
change of venue in the second action from again renewing this same action in the Los Angeles
court.” /d, at 626. The court found 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 state of facts, by merely camouflaging
them in a different form of action which such facts will not support.” /d. at 627.
Likewise, in Gaskill v. Richmaid Ice Cream Co., 111 Cal.App.2d 745 (1952), plaintiff's
original complaint was transferred to San Joaquin County. Plaintiff dismissed the action and then
attempted to refile in another court other than San Joaquin County. The court accepted
defendant’s argument that “the matter of the place of trial had been conclusively decided in said
prior action ....” [d. at 746. The court found that “[i]t is settled that an order granting a motion for
change of place of trial if not appealed from becomes res judicata of the proper place of trial in
any subsequent action based on the same facts, unless there are changed facts or new conditions
since the making of the order." /d. (emphasis added and citations omitted). The court concluded
that “to allow successive actions to be filed for the purpose of relitigating the proper place of trial
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S
MOTION TO CHANGE VENUE,over and over seems like trifling with the court.” /d. at 747 (internal quotations omitted); see also
Plum v. Forgay Lumber Co., 118 Cal.App. 76, 79 (1931) (“it has been held the plaintiff is
estopped from maintaining another action for the same cause, after the original case was dismissed
in the county to which it had been previously transferred.”).
Finally, in Tarman v. Sherwin, 189 Cal.App.2d 49 (1961), the court rejected a plaintiff's
attempt to refile an action after the court had previously ordered the case transferred. There,
plaintiff filed an action in Alameda County against two partner defendants. That action was
transferred to Butte County. /d. at 50. Plaintiff filed a dismissal without prejudice just as
BillFloat has done here. Plaintiff then filed a new action in Alameda County, omitting the
corporate defendant and omitting certain allegations that it had made in its prior compliant. The
court found that “[i]t is apparent that the present cause of action is in all material respects the same
as that ordered transferred, and then dismissed.” Jd. at 52. The court found that “[i]n such
situation, the rule is clear that the prior order binds the court in the second case ... whether the
basis of the rule be termed estoppel, as in Karst, or res judicata, as in Gaskill.” Id. at 52. The
court stated that “we are satisfied that the rule properly applies to an order granting transfer. To
permit a different result when that action is dismissed and refiled is to encourage ‘trifling with the
court.’” Jd. Finally, the court found that plaintiff had “made no attack upon the order granting
change of venue ..., as he might have done if grounds under Code of Civil Procedure, § 473,
existed ... nor did he appeal, as he had a right to do .... As a result, he cannot now attack that
order, and we must assume it to be sound.” /d. at 53.
As set forth above, a plaintiff may not escape a superior court’s order transferring venue of
its action by dismissing its claims without prejudice then refiling the same material claims again in
the very same forum that had ordered the action sent to another county.
3. The Cross Complaint Presents the Same Material Claims Against Defendants.
In its motion to change venue of the FAC, Golden Pacific argued that venue was improper
with respect to BillFloat’s causes of action for (1) Theft of Trade Secrets; (2) Intentional
Interference with Contractual Relations; (3) Intentional Interference with Economic Relations; (4)
Unfair, Unlawful, and/or Fraudulent Acts Pursuant to Business & Professions Code section 17200;
1435265.2 14023-004 8
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S,
MOTION TO CHANGE VENUE,and (5) Judicial Reference’. (See RIN, Attm. 9, at 5:23-8:15.) The court agreed that venue was
improper because no defendant resided in San Francisco County at the commencement of the
action, stating “Defendants have presented evidence which establishes that at the commencement
of the lawsuit, San Francisco was not the principal place of business of Golden Pacific Bank, N.A.
and that none of the defendants resided in San Francisco." (See RIN, Attm. 12, at 2:9-11.)
Here, BillFloat’s claims with respect to the above-referenced causes of action do not
materially differ between the FAC and the new Cross-Complaint. (Onstott Decl., § 8.)
(a) Theft of Trade Secrets.
BillFloat’s Theft of Trade Secrets Cause of Action in the Cross-Complaint is materially
the same as that presented in the FAC.’ The FAC alleged that “Plaintiff owned trade secrets,
including but not limited to, customer and contact lists, and the underwriting model that Plaintiff
developed for use with the BELIEF System.” (FAC, § 145.) The FAC further alleges that
“Defendants improperly acquired, used and/or disclosed the trade secrets.” (FAC, § 147.)
BillFloat’s Cross-Complaint contains identical claims, (Cross-Complaint, §§ 207-210).
(b) Interference with Contractual Relations/Economic Relations.
BillFloat’s Intentional Interference with Contractual Relations Causes of Action are also
materially the same.° In both the FAC and the Cross-Complaint, BillFloat alleged, under the
heading “Defendants’ actions intentionally interfere with Better Finance’s contractual relations
and prospective economic advantage,” that “Better Finance relied upon GPB’s good faith and its
> Defendants also argued that a claim for Conspiracy required transfer of venue for the FAC. No claim of
conspiracy is presented here.
* Trade secrets claims are subject to the general rule that “the superior court in the county where the
defendants or some of them reside at the commencement of the action is the proper court for the trial of the
action.” See Code Civ. Proc. § 395(a). “For the cause of action to be tried elsewhere, the plaintiff must
bring himself clearly within the terms of some statutory exception.” Bybee v. Fairchild, 75 Cal.App.2d 35,
37 (1946); see also Pacific Coast Title Ins. Co. v. Land Title Ins, Co., 97 Cal.App.2d 829, 830-832 (1950)
(trade secret claims subject to general rule of venue). This resulted in the San Francisco Court ordering the
FAC transferred to Sacramento County.
* Intentional interference with contractual and economic relations claims are subject to the general rule of
venue, which resulted in transfer of BillFloat’s FAC to Sacramento County. 3 WITKIN, CAL. PROCEDURE,
Actions, § 822, p. 1053 (Sth ed. 2008) (citing Johnson v. Superior Court, 232 Cal.App.2d 212, 218 (1965)).
Freemont Indem. Co. v. Fremont General Corp., 148 Cal.App.4th 97 (2007).
1435265.2. 14023-004 9
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S
MOTION TO CHANGE VENUEobligation to fund SBA 7(a) Loans in amounts less than $25,000, and has not sought relationships
with any other lenders to fund SBA 7(a) Loans in amounts less than $25,000." (Compare FAC, §§
106-110, with Cross-Complaint, {4 104-108.)
Moreover, in BillFloat’s FAC, BillFloat alleged two causes of action claiming interference
with contractual relations based upon interference with alleged contracts between Better Finance
| (i.c., BillFloat) and Sam’s Club and Sungevity. (See FAC, {§ 176-189) BillFloat makes the same
material allegation in the Cross-Complaint. (Cross-Complaint, §{ 108, 188-194.) Despite
| BillFloat’s failure to explicitly name the “large retail concerns,” these allegations clearly
encompass the prior allegations concerning Sungevity and Sam’s Club. (See, e.g., Cross-
| Complaint, § 108.) “[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 state of facts, by merely camouflaging them in a
different form of action which such facts will not support.” Karst, 45 Cal.App. at 627. BillFloat’s
causes of action for interference with prospective economic relations set forth in the FAC and
repeated in the Cross-Complaint follow the same pattern as set forth above. (See FAC, J 190-
205; Cross-Complaint, §¥ 196-202.) These are materially the same allegations.
(e) Business and Professions Code Section 17200 Claims.
Both the FAC and the Cross Complaint make identical Business & Professions Code
17200 claims, claiming that “[Cross] Defendants’ conduct as herein alleged constitutes unfair,
unlawful and/or fraudulent business acts or practices as those terms are defined in Section 17200
of the California Business & Professions Code.” (See FAC, § 207; Cross-Complaint, § 213-
(d) Judicial Reference Claim
Finally, both the FAC and the Cross-Complaint alleged a cause of action for judicial
reference necessitated by examination of a long account. (See FAC, ¢§ 141-143; Cross-
| ° The general rule of venue applies to actions brought pursuant to Business and Professions Code section
17200, which resulted in the court transferring venue of the FAC to Sacramento County. Gallin v, Superior
Court, 230 Cal.App.3d 541, 546 (1991).
i] 14352652 14023-004 10
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S
MOTION TO CHANGE VENUEComplaint, {4 203-205.) This claim also necessitated the transfer of the FAC.”
As set forth above, BillFloat’s claims in its prior FAC do not materially differ from those
now alleged against Golden Pacific in the Cross-Complaint. Accordingly, venue should be
transferred to Sacramento County pursuant to res judicata/collateral estoppel.
4, BillFloat Did Not Challenge the Order Transferring Venue to Sacramento.
Here, this Court’s prior order transferring venue of BillFloat’s allegations against Golden
Pacific to Sacramento Superior Court is binding upon BillFloat. As set forth above, BillFloat’s
Cross-Complaint presents the same material allegations against Defendants that resulted in
BillFloat’s FAC being transferred to Sacramento County. As set forth in the Tarman, Gaskill, and
Karst decisions, the San Francisco Superior Court’s ruling is res judicata and conclusively
establishes Sacramento County as the proper place of trial for BillFloat’s claims.
Moreover, BillFloat’s attempt to avoid the venue transfer by dismissing without prejudice
its FAC and then almost immediately refiling the same claims again in this Court as a cross-
complaint fails for several reasons. First, BillFloat failed to argue in its opposition to the Motion
to Change Venue to Sacramento County that its claims should not be transferred because they
would instead be filed as a cross-complaint. (See RJN, Attm. 11.) BillFloat knew that Golden
Pacific’s case had been transferred when it filed its Opposition. BillFloat did not raise the issue.
Second, once the Court ordered the FAC transferred to Sacramento County, BillFloat
failed to challenge that prior order by appeal or other motion, making the ruling establishing
Sacramento County as the proper place of trial for BillFloat’s claims final and binding upon
BillFloat. See Tarman, 189 Cal.App.2d at 53 (BillFloat “made no attack upon the order granting
change of venue ..., as he might have done if grounds under Code of Civil Procedure, § 473,
existed ... nor did he appeal, as he had a right to do .... As a result, he cannot now attack that
order, and we must assume it to be sound.”) Rather, BillFloat's actions foreclosed any challenge
by voluntarily dismissing its FAC.
7 “An action for an accounting is a proceeding in equity, and is essentially a personal action [where]
defendant has a right, under section 395 of the Code of Civil Procedure, to have such action tried in the
county of his residence.” Smith v. Smith, 88 Cal. 572, 577 (1891).
1435265.2 14023-004 ll
“MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S
MOTION TO CHANGE VENUEFourth, allowing BillFloat’s tactic to succeed would also effectively nullify the well-settled
“freezing of the pleadings/facts” rule that provides that “‘it is well settled that on motion for a
16
the FAC and bound itself to the venue rules applicable to the claims as initially presented.
ii Accordingly, BillFloat is still bound by this Court’s prior determination transferring venue to
28 |] Sacramento County Superior Court. It cannot escape that order by the procedural gimmick of
1435265,2 14023-004 12
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dismissal and immediate refiling against one defendant in the same court and against the
individual defendants in another court.
Finally, allowing BillFloat to circumvent the Court’s prior venue ruling encourages trifling
with the court and re-litigation of issues already decided. Gaskill, 111 Cal.App.2d at 747 (“to
allow successive actions to be filed for the purpose of relitigating the proper place of trial over and
over seems like trifling with the court.” (internal quotation omitted)). As set forth above, the
proper place of trial of BillFloat’s claims has been conclusively determined to be Sacramento
County. Pursuant to the doctrines of res judicata and estoppel, this Court should transfer venue of
BillFloat’s cross-complaint to Sacramento County.
B. Golden Pacific’s Complaint Should Be Transferred Pursuant to C.C.P. 397(c).
“The court may, on motion, change the place of trial ... When the convenience of
witnesses and the ends of justice would be promoted by the change.” Code Civ. Pro. § 397(c).
This motion is appropriate based upon BillFloat, Gilbert, and O’ Malley’s filed answer to Golden
Pacific’s Complaint. Baird v, Smith, 21 Cal.App.2d 221, 223 (1937). “There can also be no doubt
that before such a motion can be granted there must be some showing of both convenience of
witnesses and that the ends of justice will be served by the change.” Harden v. Skinner &
Hammond, 130 Cal.App.2d 750, 754 (1955). “Affidavits or declarations in support of the motion
must set forth the names of the witnesses, the nature of the testimony expected from each, and the
reasons why the attendance of each would be inconvenient.” Corfee v. S. California Edison Co.,
202 Cal.App.2d 473, 477-478 (1962) (citing Peiser v. Mettler, 50 Cal.2d 594, 607 (1958); Harden,
130 Cal.App.2d at 755). This determination is discretionary. /d.
Here, numerous third-party witnesses would be inconvenienced by a San Francisco trial
location. Indeed, Roy Malone, Carol Corsetti, Grace Nagel, Linda Rohmer, and Gayle Matsuoka
have all submitted declarations specifying the inconvenience that they would endure if the case
remained venued in San Francisco. Each of their testimony is relevant to material issues in
Golden Pacific’s complaint. Carol Corsetti, who is no longer employed by Golden Pacific, will
provide detailed information relevant to Golden Pacific’s trade secret claims as she was the one
who created and wrote most of the SBA loan underwriting guidelines for the SmartBiz program,
1435265.2 14023-004 3
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including the confidential and trade secret decision-making matrix for issuing SBA loans in the
SmartBiz program. (Corsetti Decl., 4 3; Complaint, § 57.) Roy Malone, who is no longer
employed by Golden Pacific, will testify that he was involved in the SmartBiz program from its
earliest days. He will testify that he led the development of the SmartBiz program and served as a
primary contact for Golden Pacific in negotiations with BillFloat on the Amended Joint Marketing
and Joint Technology Improvement Agreement, including the issue of Mutual Improvement
Expenses included in the agreement. (Malone Decl., § 2-6; Complaint, ff 37-38.) Grace Nagel
helped develop the SmartBiz program’s standard operating procedures and underwriting
procedures and developed the design of the SmartBiz platform itself. This is material to GPB’s
claim of misappropriation of trade secrets, and that BillFloat breached the Amended Joint
Marketing Agreement by sharing with other depository institutions material developed by Golden
Pacific without Golden Pacific’s consent. (Nagel Decl., {§ 2-4; Complaint, ff 38(i), 57, 70-73.)
Gayle Matsuoka sat in early meetings as the SmartBiz program was being developed. She
expressed concerns about risk management and compliance with SBA regulations to BillFloat.
(Matsuoka Decl., { 3; Complaint, § 38(k-l).) Finally, Linda Rohmer witnessed numerous
occasions when BillFloat was failing to obtain all the documentation required for a SBA loan, and
was informed of other occasions where BillFloat even had its representatives pose as GPB
employees during telephone calls with borrowers. (Rohmer Decl., {{] 3-5.) All of these
individuals have stated that Sacramento will be a more convenient venue for them for trial, given
their respective work locations, child care responsibilities and other obligations. (Malone Decl. {J
8-9; Corsetti Decl. §] 4-5; Rohmer Decl. {f{ 6-7; Matsuoka Decl. {| 4-5; Nagel Decl., {[{f 4-5).
In addition, other third party witnesses, including Frank Washington and others also have
ties to the Sacramento area. Frank Washington signed the original Joint Marketing Agreement on
behalf of Golden Pacific. (GPB Cmpl. at Exh. 2, p. 9).
Cc The Ends of Justice are Served Better by a Sacramento County Venue.
Finally, the ends of justice are served by transferring this entire action to Sacramento
County for numerous reasons. As set forth above, the only reason that BillFloat was able to file its
action in San Francisco County as a cross-complaint is that Golden Pacific did not employ the
1435265.2 14023-004 14
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same procedural gimmickry when its complaint was transferred from Sacramento to San
Francisco. BillFloat should not be rewarded for its intentional evasion of this Court’s prior order
by belatedly arguing that its current complaint is a cross-complaint justifying a San Francisco
venuc. Motions to transfer venue should not be viewed as a game of legal whack-a-mole, where a
vanquished litigator simply disappears down one hole, only to reappear in another. The ends of
justice support transferring venue of Golden Pacific’s complaint pursuant to Code of Civil
Procedure section 397(c) to have the cases heard together and not award BillFloat for its tactics.
The ends of justice are also served because Sacramento County is the only place where all
of BillFloat’s claims may be heard by the same court and consolidated. As set forth above,
BillFloat’s Contra Costa Complaint likely will be transferred to Sacramento County Superior
Court. Moreover, BillFloat’s Writ of Mandate Action is already pending in Sacramento County
against Golden Pacific’s parent company. Transferring the entirety of this action (the cross-
complaint based upon the section 396b and the principles of res judicata, and the Golden Pacific
complaint based upon section 397(c)) allows all claims to be venued in a single court.
Finally, Golden Pacific is headquartered in Sacramento, California. Its books and records
are also found there. (Onstott Decl. § 11; Varela Decl. {J 1-2.). Minatta v. Crook, 166
Cal.App.2d 750, 756 (1959) (“The fact that a [movant’s] books and records are located in another
county ... may be considered on the question whether the ends of justice will be served by making
more expeditious the production of records.”)
Tl. CONCLUSION
For all of the above reasons, Golden Pacific respectfully requests that this Court grant this
motion and transfer venue of the entire action, including the complaint and cross-complaint to
Sacramento County Superior Court.
Dated: March 10, 2016 KRONICK, MOSKOVITZ, TIEDEMANN & GIRARD
By:
Christopher Onstott
Attorneys for Plaintiff and Cross-Defendant
GOLDEN PACIFIC BANK, N.A,
1435265.2.14023-004 1s
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S
MOTION TO CHANGE VENUE
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BRUCE A. SCHEIDT, State Bar No. 155088 bscheidt@kmtg.com | constott(@kmig.com ERROL C. DAUIS, State Bar No. 279313 edauis@kmtg.com CHRISTOPHER ONSTOTT, State Bar No. 225968 ELECTRONICALLY FILED Superior Court of Califomia, 4] KRONICK, MOSKOVITZ, TIEDEMANN & GIRARD County of San Francisco oy for Plaintiff GOLDEN PACIFIC BANK, N.A. Plaintiff, 14 | SILLELOAT, INC., RYAN GILBERT, SEAN ! O'MALLEY, and DOES 1-50, inclusive, Defendants. Cross-Complainant, GOLDEN PACIFIC BANK, N.A., and ROES 1-50, Cross-Defendants. H} 1435265.2 14023-004 03/10/2016 Clerk of the Court BY-:ROMY RISK Deputy Clerk SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN FRANCISCO Case No. CGC-16-549804 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S MOTION TO CHANGE VENUE Judge: Hon. Harold E. Kahn Date: May 11, 2016 Time: 9:30 a.m. Dept.: 302 Reservation Number: 03100511-01 Case Transferred from Sacramento County: — January 11, 2016 Trial Date: None Set MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S MOTION TO CHANGE VENUETABLE OF CONTENTS Page L PROCEDURAL BACKGROUND 0... ccccccceteseseseseeeeteceeecseecnsertenseeneeseneseenensassseneraeanaes A. Golden Pacific Files a Complaint in Sacramento Superior Court. B. BillFloat’s First Amended Complaint Filed in San Francisco County. ..........-0+ Cc. BillFloat Files a Writ of Mandate Action in Sacramento County Superior Court. Dz. This Court Orders Venue of the FAC Transferred to Sacramento County.......... E. BillFloat Attempts to Evade This Court's Order By Dismissing its FAC Without Prejudice and then Refiling the Materially Same Allegations Again. in This Court... ccceceescesseeeesesseessseeseseseeseeseeseereesssssassssseessssseesiesvesseenesansrenesereneseeees 5 I. LEGAL ARGUMENT .....ccccscseseesssseseseeseesssressserscssenssceresssssarseseessuesssesesserasesesneseavesesssansusenanes 6 A. Res Judicata Bars BillFloat From Bringing its Claims Outside of Sacramento. . +6 1, Applicable Standard in Venue Actions. . 2. Well-Settled Case Law Bars Evasion of A Venue Transfer Ruling 3. The Cross Complaint Presents the Same Material Claims Against Defendamts.........scscssscssscssesereseessesersssssassaterenssasensenssessuasssesesceessssessesensstenees 8 (a) Theft of Trade Secrets. ........ccccccesesesssesseensenecessessecreseseseseneeseneseeeeee dD (b) Interference with Contractual Relations/Economic Relations. ..........9 (c) Business and Professions Code Section 17200 Claims... 10 (d) Judicial Reference Claim 4, BillFloat Did Not Challenge the Order pepe ately Venue to SacraMentO, oss cescecsesesseeseeseeseess wll B. Golden Pacific’s smukaneniin Should Be Transferred Pursuant to C.C.P. 397(c). .. 13 Cc. The Ends of Justice are Served Better by a Sacramento County Venue............0..... 14 H III. CONCLUSION H} 1435265.2 14023-004 i MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S, MOTION TO CHANGE VENUETABLE OF AUTHORITIES Page(s) State Cases Abbey v, Schaefer, 108 Cal. App.2d 554 (1952) c.ssscsscsssssssnsstsessnsessstiastiesssnssisastinstsissssssiassssesseunssnsesal Baird v. Smith, 21 Cal. App.2d 221, 223 (1937) sesscesscsesssestersessssssoeseesssstnstisstietiessiesietssivatvetsstessesie 13 Bybee y. Fairchild, 75 Cal. App.2d 35 (1946)... ecesssssesesssssessssesseesscsrssesencsecsncessnsarsneearensaceneeneceersuecavssetaneesneaeanenses 9 Carruth vy, Superior Court, 80 Cal. App.3d 215 (1978) sessssssssssssssssssnstsssessneeneree Corfee v. S. California Edison Co., 202 Cal. App.2d 473 (1962) ...ccccccssseesesseesssessssessessssessrssussseesssseesssessessssnnecssussuecceneesnesnereessns 13 Freemont Indem. Co. v. Fremont General Corp., PA SHC aA pope Athn 97-200 7 etal erst att crater tetas ea eet etal eater 9 Gallin v. Superior Court, 230 Cal. App.3d 541 (1991). cecssesessesesseeiessesssssessassssssssssessessessessesessessvesscssetsucsntsnteansnesanens 10 Gaskill v, Richmaid Ice Cream C 111 Cal.App.2d 745 (1952). 7,8, 11,13 Harden v. Skinner & Hammond, 130 Cal App.2d 750 (1955) .seesseessecsesseeseesseesseesseesssessuessessessesssssussuarssaessseesaeennessnecsnesneeenee LS Karst y. Seller, 45 Cal. App. 623 (1920) ..ccscccecssescssesseeseseessecssecssuessusssessseeevessrssseesecenasareeeneeeneesnesnersene 7,8, 10, 11 Minatta v. Crook, 166 Cal App.2d 750 (1959) .ssscssessusssssscsetnssssnsssisssssnsssstssasenssttestusstenssssnsenassseaeeeseel 5 Pacific Coast Title Ins. Co. v. Land Title Ins, Co., 97 Cal. App.2d 829 (1950) Plum v. Forgay Lumber Co., 118 Cal-App. 76 (1931) sssssssssssesssssssssssstsntatsetensistisstsenissisessatietiatssiiatneietssesee 8 Smith v. Smith, SBC Al tD TZ EBS lal ababaadadudadadabalshabsbaecedededudatadalalatelalabdodadatalatytalalaladadedetadadelatalaabalanaldald 11 14352652 14023-004 ii MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S, MOTION TO CHANGE VENUETABLE OF AUTHORITIES (CONTINUED) Page(s) Taffe v. Bloch, BDF Cal A ap: 7 811.9 3.2) ages atta ab obaonltate tetera baad ever oper el at strates 4,12 Tarman v. Sherwin, 189 Cal. App.2d 49 (1961) cessssssssessssssesssssssesessusussssssseseessuasasssasisssatssssseseeesssseassesesevenssssee 8,11 State Statutes Business & Professions Code 17200 ......ccceccsescseseseseseseeeeeeeeeeeeteseestecseseseaeseasaeseseseeteaeseaeenenes 3, 6, 8,10 Code Civt Pro S95 tr leelatetolchchaedededadatedabalatabalahardedededotedabehabarahdadeledstetelatebebebsnenavand 6,9, 11 Code Civ. Pro. § 396 .cccsscesseesssesssessssssssessessesssesessssasssessesseesesssessessessesseeseeseesessecasessssessenseneenteane 1,15 CODECIVIPRO GES OT eat lalctdedadatatatedababehahdadaddadadatabsbatalebabahaladedadadatalebalalaedadedalolatabelatabelabeb dea 2, 13,15 Code Civ. Pro. §$ 398 viccccceessceesresessesnsesssseesssneeseesessrsvesecusscassusacsiecsnsessesesessnsersnssasaeaveeeeaeane 1,4, 12 Code Civ. Pro. § 473...... teteseeels 5, 8, EL Other Authorities 3 WITKIN, CAL. PROCEDURE, Actions, § 822 (Sth ed. 2008) ...cesccssecsesesseeeeeessessstereeteeeaeeesseneneee 9 1435265, 4023-004 iti MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S, MOTION TO CHANGE VENUEa yn an Ww 10 li 12 13 14 15 16 17 19 20 22 23 24 25 26 27 28 Plaintiff and Cross-Defendant Golden Pacific Bank, N.A. (“Golden Pacific”) moves that this court transfer this entire action to the Superior Court for the State of California, County of Sacramento (“Sacramento County Superior Court”). Cross-Complainant BillFloat, Inc.’s (“BillFloat”) claims against Golden Pacific are subject to a binding decision of this Court transferring those claims to Sacramento County Superior Court. The matter is res judicata and binding upon BillFloat. This Court has already conclusively established that venue of these claims is Sacramento County Superior Court pursuant to Code of Civil Procedure sections 396b and 398. On January 7, 2016, this Court transferred venue of BillFloat’s same material claims and causes of action against Golden Pacific to Sacramento County Superior Court. BillFloat failed to appeal this Court’s order or seek relief from that ruling pursuant to Code of Civil Procedure § 473. Instead, to try to evade the order, BillFloat dismissed its First Amended Complaint filed against Golden Pacific and other defendants without prejudice on January 22, 2016, and refiled those same material claims against Golden Pacific in this action on February 8, 2016, naming other individual defendants in a like case filed the same day in Contra Costa Superior Court (the “Contra Costa Action”). A motion to change venue in the Contra Costa Action to Sacramento County Superior Court is currently pending in that court. This Court’s prior ruling establishes that the proper venue for BillFloat’s claims set forth in this action is Sacramento County Superior Court. It is well-settled in California that the principals of res judicata and estoppel bar BillFloat from refiling the same material claims again in this Court after having those same claims transferred to another county. Golden Pacific also requests that this Court transfer venue of Golden Pacific’s underlying complaint because of third-party witness convenience and the ends of justice. Golden Pacific requests that this Court order venue transferred to Sacramento County Superior Court. I. PROCEDURAL BACKGROUND This action is one of several cases currently pending between BillFloat and entities and individuals related to Golden Pacific. On August 28, 2015, BillFloat filed a complaint in San Francisco County Superior Court seeking declaratory relief and judicial reference against Golden Pacific as Case No. CGC-15-547679 (the “San Francisco Action”). (Request for Judicial Notice 1435265.2 14023-004 1 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S MOTION TO CHANGE VENUEin Support of Motion to Change Venue ("RJN"), Attm. 1.) This action was brought solely in response to Golden Pacific’s Notice of Default served on Plaintiffon August 17, 2015. (See RIN, Attm. 1,939.) A. Golden Pacific Files a Complaint in Sacramento Superior Court. On October 9, 2015, Golden Pacific filed a Complaint against BillFloat, and BillFloat’s president Sean O’ Malley and its Chief Executive Officer Ryan Gilbert in Sacramento County || Superior Court (“Sacramento Action”). That action alleged numerous causes of action against interpretation of a single contract, but sought damages for numerous breaches of three separate | agreements between the parties, asserted a request for rescission relief, and alleged several torts. BillFloat moved to change venue of the Sacramento Action to San Francisco County on November 10, 2015, based upon the residence of Ryan Gilbert and Sean O'Malley. (RIN, Attm. date. (See RIN, Attm. 3.) | B. BillFloat’s First Amended Complaint Filed in San Francisco County. Rather than filing a cross-complaint to Golden Pacific’s action, BillFloat instead, on November 3, 2015, filed a First Amended Complaint (“FAC”) in the San Francisco Action. (RJN, } Attm. 5 ("FAC").) The FAC materially altered the Complaint by alleging 15 causes of action against Golden Pacific. (See FAC, §{ 139-216.) The FAC focused on transactions between Agreement and Marketing Agreement that were at issue in the Sacramento Action. The FAC | further alleged that BillFloat and Golden Pacific “entered into a joint venture agreement, first manifested in the Marketing Agreement, and later in the Amended Marketing Agreement” which 1435265.2 14023-004 2 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S, MOTION TO CHANGE VENUEincluded the “Joint Technology” “owned by BF and GPB [which] is the ‘method for applying certain underwriting criteria for small business lending ... so it can be run on a software platform (e.g. the Licensed Software described in the License Agreement).” (FAC, { 127.) In particular, the FAC alleged causes of action against Golden Pacific and other individual defendants for (1) Theft of Trade Secrets; (2) Intentional Interference with Contractual Relations; (3) Intentional Interference with Prospective Economic Relations; (4) Unfair, Unlawful and/or Fraudulent Acts or Practices Pursuant to Business and Professions Code section 17200; (5) Breach of Fiduciary Duty; and (6) Judicial Reference. (FAC, {ff 141-149, 176-216.) On November 5, 2016, BillFloat received court permission in the San Francisco Action to substitute various Golden Pacific Directors and Officers as Doe Defendants in the FAC. (RIN, Attm. 6.) Cc. BillFloat Files a Writ of Mandate Action in Sacramento County Superior Court. On November 24, 2016, BillFloat filed a Writ of Mandate action in Sacramento County Superior Court against Golden Pacific Bancorp, Inc., the parent company of Golden Pacific Bank, N.A., seeking inspection of Golden Pacific Bancorp’s books and records in an effort to conduct discovery in this action. (RJN, Attm, 7.) That case remains pending in Sacramento County. D. This Court Orders Venue of the FAC Transferred to Sacramento County. Golden Pacific and the individual defendants (collectively, "FAC Defendants") brought a motion to change venue of the San Francisco Action based upon the fact that neither Golden Pacific, nor any of the individually named defendants were San Francisco County residents. (RIN, Attm, 8.) In particular, the motion to change venue pointed out that BillFloat’s causes of action for Theft of Trade Secrets; Intentional Interference with Contractual Relations; Intentional Interference with Economic Relations, Unfair, Unlawful, and/or Fraudulent Acts or Practices Pursuant to Business & Professions section 17200; and for Judicial Reference were improper because none of the FAC Defendants resided in San Francisco County. (RJN, Attm. 9, at 5:23- 9:9.) In FAC Defendants’ moving papers, FAC Defendants submitted a declaration from Golden Pacific Chief Executive Officer Virginia Varela attesting to the fact that at the commencement of the action, “Golden Pacific Bank’s corporate headquarters and principal place of business is in the City of Sacramento, Sacramento County. Golden Pacific Bank’s corporate business operations are 1435265.2 14023-004 3 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S MOTION TO CHANGE VENUEconducted solely out of our offices in Sacramento. Golden Pacific Bank does not have any branch offices in the City and County of San Francisco.” (See RIN, Attm. 10, at 2:3-6.) Golden Pacific moved to change venue of the San Francisco Action to Sacramento, stating that “the Court should grant the instant motion and transfer venue to Sacramento County since Defendants can establish that venue is not proper in San Francisco County for at least one cause of action.” (RIN, Attm. 9, at 8:10-12.) The Notice of Motion and Motion to Change Venue explicitly requested “an order transferring the above-captioned action and changing the place of trial to the Superior Court of the State of California, County of Sacramento (‘Sacramento County Superior Court’).” (RIN, Attm. 8, at 1:25-27.) In Opposition to the Motion to Change Venue filed on December 23, 2015, BillFloat argued only that Defendant Varela was a San Francisco resident. (RIN, Attm, 11, at 2:18-4:9.) BillFloat did not oppose the FAC Defendants’ argument that the causes of action set forth in the motion required a transfer of venue. (See RIN, Attm. 11.) BillFloat did argue that venue in San Francisco was proper against Golden Pacific because the Sacramento Action was ordered transferred to San Francisco, nor did BillFloat seek to sever Golden Pacific from the other defendants named in the FAC.' Furthermore, BillFloat did not ask the court to stay its ruling pending transfer of the Sacramento Action to San Francisco County. On January 7, 2016, the Court granted Defendants’ Motion to Change Venue of BillFloat’s FAC to Sacramento County. (See RJN, Attm. 12.) In the signed order, entitled “Order Granting Defendants’ Motion to Change Venue to Sacramento County Superior Court.” the Court explicitly found that “Defendants have presented evidence which establishes that at the commencement of the lawsuit, San Francisco was not the principal place of business of Golden Pacific Bank, N.A. and that none of the defendants resided in San Francisco.” (RIN, Attm. 12, at 2:9-11 (emphasis added).) The Court further stated that “the court grants Defendants’ motion to change venue.” ' Indeed, BillFloat could not sever Defendants from the action. The pleadings were frozen at the time of the motion to transfer. Taffe v. Bloch, 127 Cal.App. 678, 680 (1932). It was BillFloat who selected its allegations and the defendants to be named in the FAC and BillFloat must now accept the consequences pursuant to Code of Civil Procedure section 398(b) to allow FAC Defendants to select the venue of those claims when BillFloat had initially selected an improper venue. 1435265.2 14023-004 4 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S MOTION TO CHANGE VENUE,(RIN, Attm. 12, at 2:18-19 (emphasis added).) BillFloat did not appeal the San Francisco County Superior Court’s order transferring venue of its allegations to Sacramento County, nor did BillFloat seek reconsideration of the Court’s order. (Declaration of Christopher Onstott in Support of Motion to Change Venue (“Onstott Decl.”), {.5.) BillFloat did not seek any relief from the Court’s order pursuant to Code of Civil Procedure section 473. (Onstott Decl., § 5.) The order transferring BillFloat’s allegations against Golden Pacific remains binding on BillFloat. E. BillFloat Attempts to Evade This Court’s Order By Dismissing its FAC Without Prejudice and then Refiling the Materially Same Allegations Again in This Court. Golden Pacific abided by the Sacramento Superior Court’s order transferring venue and the Sacramento Action was transferred to San Francisco County Superior Court. BillFloat’s actions after its claims were transferred to Sacramento County, however, were in stark contrast to Golden Pacific’s. On January 22, 2016, BillFloat attempted to evade this Court’s order by dismissing its FAC without prejudice then refiling the same claims again in San Francisco. (See RIN, Attm. 13; RJN, Attm. 14 ("Cross-Complaint").) BillFloat did not contact Golden Pacific's counsel prior to this action to explain its reason for dismissing the FAC and then attempting almost immediately to file the same causes of action again in the same court or suggest any other compromise to have the litigation managed more effectively. (Onstott Decl., § 6.) In fact, BillFloat impeded Golden Pacific from learning about the FAC’s dismissal for days by not serving it on Golden Pacific’s counsel when it was submitted to the Court on January 22, 2016. (See Onstott Decl, { 6.) Instead, on February 3, 2016, 12 days after BillFloat’s request for dismissal was filed and entered by the court, BillFloat finally served a Notice of Entry of Dismissal of the FAC on Defendants. (See Onstott Decl., | 6, Exh. B.)” On February 8, 2016, BillFloat ignored this Court’s prior order that the case be venued in Sacramento County and refiled materially the same allegations against Golden Pacific again in this 2 On February 3, 2016, after receiving the Notice of Entry of Dismissal, Defendants’ counsel contacted BillFloat’s counsel by email and asked if BillFloat intended to refile some or all of its claims, and, if so, when and where would they be refiled. (See Onstott Decl., 7, Exh. C.) BillFloat did not respond to these questions. (Onstott Decl., { 7.) 1435265.2 14023-004 5 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S, MOTION TO CHANGE VENUE| Court as a Cross-Complaint on February 8, 2016. (See Cross-Complaint.) That same day, BillFloat filed a substantially similar action against the individual defendants originally named in the FAC in Contra Costa County (the “Contra Costa Complaint”). (See RJN, Attm. 15.) Like the FAC, the Cross-Complaint alleges causes of action for: (1) Theft of Trade Secrets; (2) Intentional Interference with Contractual Relations; (3) Intentional Interference with | Prospective Economic Relations; (4) Unfair, Unlawful, and/or Fraudulent Acts or Practices Pursuant to Business and Professions Code section 17200; (5) Breach of Fiduciary Duty; and (6) Judicial Reference. (Compare FAC, {J 144-149, 176-216, with Cross-Complaint, J 188-214; see venue of BillFloat’s allegations against Golden Pacific to Sacramento County is res judicata. BillFloat is estopped gaming the system by dismissing its claims without prejudice and then refiling those same claims again in this Court. This Court has already expressly ordered BillFloat’s claims transferred to Sacramento County. Moreover, this Court may also order Golden Pacific’s claims transferred based upon the convenience of third-party witnesses and to serve the ends of justice. Il. LEGAL ARGUMENT A. Res Judicata Bars BillFloat From Bringing its Claims Outside of Sacramento. 1. Applicable Standard in Venue Actions. In successfully transferring the prior FAC, Golden Pacific cited to the Court the general rule “the superior court in the county where the defendants or some of them reside at the commencement of the action is the proper court for the trial of the action.” See Code Civ. Proc. § defendants, both individual and corporate, in a county which is neither the residence nor the | principal place of business of any defendant, an individual defendant has a right upon proper actions against corporations.’ (Carruth v. Superior Court (1978) 80 Cal.App.3d 215, 221.)" (RIN, Attm, 9.) In its FAC, BillFloat proceeded against both Golden Pacific and the individual 1435265.2 14023-004 6 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S MOTION TO CHANGE VENUE1 RO CD wna 10 12 13 14 1S. 16 17 18 19 21 22 23 24 25 26 27 28 defendants as part of a single action and now must live with the consequences of that choice, which resulted in venue being transferred to Sacramento County. Pursuant to the principles of res judicata and estoppel, BillFloat may not now try to undue its prior decision and evade a binding ruling transferring venue by splitting its claims into two separate actions and refiling its claims against Golden Pacific in the very same forum that it was transferred out of in the first place. 2. Well-Settled Case Law Bars Evasion of A Venue Transfer Ruling. The San Francisco Superior Court’s January 7, 2016, Order transferring BillFloat’s FAC to Sacramento County Superior Court is res judicata for the proper venue of the case. For years, California courts have barred precisely the kind of trifling with the court that BillFloat has attempted here. In Karst v. Seller, 45 Cal-App. 623 (1920), a plaintiff had brought suit against defendant in Los Angeles Superior Court. The court granted defendant’s motion to change venue because defendant’s residence was in San Francisco. /d. at 625. The plaintiff then dismissed its action and brought suit on the same claims again in Los Angeles County, joining a resident of Los Angeles in that action. The court found that “plaintiff was estopped by the order granting a change of venue in the second action from again renewing this same action in the Los Angeles court.” /d, at 626. The court found 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 state of facts, by merely camouflaging them in a different form of action which such facts will not support.” /d. at 627. Likewise, in Gaskill v. Richmaid Ice Cream Co., 111 Cal.App.2d 745 (1952), plaintiff's original complaint was transferred to San Joaquin County. Plaintiff dismissed the action and then attempted to refile in another court other than San Joaquin County. The court accepted defendant’s argument that “the matter of the place of trial had been conclusively decided in said prior action ....” [d. at 746. The court found that “[i]t is settled that an order granting a motion for change of place of trial if not appealed from becomes res judicata of the proper place of trial in any subsequent action based on the same facts, unless there are changed facts or new conditions since the making of the order." /d. (emphasis added and citations omitted). The court concluded that “to allow successive actions to be filed for the purpose of relitigating the proper place of trial 1435265.2. 14023-004 7 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S MOTION TO CHANGE VENUE,over and over seems like trifling with the court.” /d. at 747 (internal quotations omitted); see also Plum v. Forgay Lumber Co., 118 Cal.App. 76, 79 (1931) (“it has been held the plaintiff is estopped from maintaining another action for the same cause, after the original case was dismissed in the county to which it had been previously transferred.”). Finally, in Tarman v. Sherwin, 189 Cal.App.2d 49 (1961), the court rejected a plaintiff's attempt to refile an action after the court had previously ordered the case transferred. There, plaintiff filed an action in Alameda County against two partner defendants. That action was transferred to Butte County. /d. at 50. Plaintiff filed a dismissal without prejudice just as BillFloat has done here. Plaintiff then filed a new action in Alameda County, omitting the corporate defendant and omitting certain allegations that it had made in its prior compliant. The court found that “[i]t is apparent that the present cause of action is in all material respects the same as that ordered transferred, and then dismissed.” Jd. at 52. The court found that “[i]n such situation, the rule is clear that the prior order binds the court in the second case ... whether the basis of the rule be termed estoppel, as in Karst, or res judicata, as in Gaskill.” Id. at 52. The court stated that “we are satisfied that the rule properly applies to an order granting transfer. To permit a different result when that action is dismissed and refiled is to encourage ‘trifling with the court.’” Jd. Finally, the court found that plaintiff had “made no attack upon the order granting change of venue ..., as he might have done if grounds under Code of Civil Procedure, § 473, existed ... nor did he appeal, as he had a right to do .... As a result, he cannot now attack that order, and we must assume it to be sound.” /d. at 53. As set forth above, a plaintiff may not escape a superior court’s order transferring venue of its action by dismissing its claims without prejudice then refiling the same material claims again in the very same forum that had ordered the action sent to another county. 3. The Cross Complaint Presents the Same Material Claims Against Defendants. In its motion to change venue of the FAC, Golden Pacific argued that venue was improper with respect to BillFloat’s causes of action for (1) Theft of Trade Secrets; (2) Intentional Interference with Contractual Relations; (3) Intentional Interference with Economic Relations; (4) Unfair, Unlawful, and/or Fraudulent Acts Pursuant to Business & Professions Code section 17200; 1435265.2 14023-004 8 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S, MOTION TO CHANGE VENUE,and (5) Judicial Reference’. (See RIN, Attm. 9, at 5:23-8:15.) The court agreed that venue was improper because no defendant resided in San Francisco County at the commencement of the action, stating “Defendants have presented evidence which establishes that at the commencement of the lawsuit, San Francisco was not the principal place of business of Golden Pacific Bank, N.A. and that none of the defendants resided in San Francisco." (See RIN, Attm. 12, at 2:9-11.) Here, BillFloat’s claims with respect to the above-referenced causes of action do not materially differ between the FAC and the new Cross-Complaint. (Onstott Decl., § 8.) (a) Theft of Trade Secrets. BillFloat’s Theft of Trade Secrets Cause of Action in the Cross-Complaint is materially the same as that presented in the FAC.’ The FAC alleged that “Plaintiff owned trade secrets, including but not limited to, customer and contact lists, and the underwriting model that Plaintiff developed for use with the BELIEF System.” (FAC, § 145.) The FAC further alleges that “Defendants improperly acquired, used and/or disclosed the trade secrets.” (FAC, § 147.) BillFloat’s Cross-Complaint contains identical claims, (Cross-Complaint, §§ 207-210). (b) Interference with Contractual Relations/Economic Relations. BillFloat’s Intentional Interference with Contractual Relations Causes of Action are also materially the same.° In both the FAC and the Cross-Complaint, BillFloat alleged, under the heading “Defendants’ actions intentionally interfere with Better Finance’s contractual relations and prospective economic advantage,” that “Better Finance relied upon GPB’s good faith and its > Defendants also argued that a claim for Conspiracy required transfer of venue for the FAC. No claim of conspiracy is presented here. * Trade secrets claims are subject to the general rule that “the superior court in the county where the defendants or some of them reside at the commencement of the action is the proper court for the trial of the action.” See Code Civ. Proc. § 395(a). “For the cause of action to be tried elsewhere, the plaintiff must bring himself clearly within the terms of some statutory exception.” Bybee v. Fairchild, 75 Cal.App.2d 35, 37 (1946); see also Pacific Coast Title Ins. Co. v. Land Title Ins, Co., 97 Cal.App.2d 829, 830-832 (1950) (trade secret claims subject to general rule of venue). This resulted in the San Francisco Court ordering the FAC transferred to Sacramento County. * Intentional interference with contractual and economic relations claims are subject to the general rule of venue, which resulted in transfer of BillFloat’s FAC to Sacramento County. 3 WITKIN, CAL. PROCEDURE, Actions, § 822, p. 1053 (Sth ed. 2008) (citing Johnson v. Superior Court, 232 Cal.App.2d 212, 218 (1965)). Freemont Indem. Co. v. Fremont General Corp., 148 Cal.App.4th 97 (2007). 1435265.2. 14023-004 9 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S MOTION TO CHANGE VENUEobligation to fund SBA 7(a) Loans in amounts less than $25,000, and has not sought relationships with any other lenders to fund SBA 7(a) Loans in amounts less than $25,000." (Compare FAC, §§ 106-110, with Cross-Complaint, {4 104-108.) Moreover, in BillFloat’s FAC, BillFloat alleged two causes of action claiming interference with contractual relations based upon interference with alleged contracts between Better Finance | (i.c., BillFloat) and Sam’s Club and Sungevity. (See FAC, {§ 176-189) BillFloat makes the same material allegation in the Cross-Complaint. (Cross-Complaint, §{ 108, 188-194.) Despite | BillFloat’s failure to explicitly name the “large retail concerns,” these allegations clearly encompass the prior allegations concerning Sungevity and Sam’s Club. (See, e.g., Cross- | Complaint, § 108.) “[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 state of facts, by merely camouflaging them in a different form of action which such facts will not support.” Karst, 45 Cal.App. at 627. BillFloat’s causes of action for interference with prospective economic relations set forth in the FAC and repeated in the Cross-Complaint follow the same pattern as set forth above. (See FAC, J 190- 205; Cross-Complaint, §¥ 196-202.) These are materially the same allegations. (e) Business and Professions Code Section 17200 Claims. Both the FAC and the Cross Complaint make identical Business & Professions Code 17200 claims, claiming that “[Cross] Defendants’ conduct as herein alleged constitutes unfair, unlawful and/or fraudulent business acts or practices as those terms are defined in Section 17200 of the California Business & Professions Code.” (See FAC, § 207; Cross-Complaint, § 213- (d) Judicial Reference Claim Finally, both the FAC and the Cross-Complaint alleged a cause of action for judicial reference necessitated by examination of a long account. (See FAC, ¢§ 141-143; Cross- | ° The general rule of venue applies to actions brought pursuant to Business and Professions Code section 17200, which resulted in the court transferring venue of the FAC to Sacramento County. Gallin v, Superior Court, 230 Cal.App.3d 541, 546 (1991). i] 14352652 14023-004 10 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S MOTION TO CHANGE VENUEComplaint, {4 203-205.) This claim also necessitated the transfer of the FAC.” As set forth above, BillFloat’s claims in its prior FAC do not materially differ from those now alleged against Golden Pacific in the Cross-Complaint. Accordingly, venue should be transferred to Sacramento County pursuant to res judicata/collateral estoppel. 4, BillFloat Did Not Challenge the Order Transferring Venue to Sacramento. Here, this Court’s prior order transferring venue of BillFloat’s allegations against Golden Pacific to Sacramento Superior Court is binding upon BillFloat. As set forth above, BillFloat’s Cross-Complaint presents the same material allegations against Defendants that resulted in BillFloat’s FAC being transferred to Sacramento County. As set forth in the Tarman, Gaskill, and Karst decisions, the San Francisco Superior Court’s ruling is res judicata and conclusively establishes Sacramento County as the proper place of trial for BillFloat’s claims. Moreover, BillFloat’s attempt to avoid the venue transfer by dismissing without prejudice its FAC and then almost immediately refiling the same claims again in this Court as a cross- complaint fails for several reasons. First, BillFloat failed to argue in its opposition to the Motion to Change Venue to Sacramento County that its claims should not be transferred because they would instead be filed as a cross-complaint. (See RJN, Attm. 11.) BillFloat knew that Golden Pacific’s case had been transferred when it filed its Opposition. BillFloat did not raise the issue. Second, once the Court ordered the FAC transferred to Sacramento County, BillFloat failed to challenge that prior order by appeal or other motion, making the ruling establishing Sacramento County as the proper place of trial for BillFloat’s claims final and binding upon BillFloat. See Tarman, 189 Cal.App.2d at 53 (BillFloat “made no attack upon the order granting change of venue ..., as he might have done if grounds under Code of Civil Procedure, § 473, existed ... nor did he appeal, as he had a right to do .... As a result, he cannot now attack that order, and we must assume it to be sound.”) Rather, BillFloat's actions foreclosed any challenge by voluntarily dismissing its FAC. 7 “An action for an accounting is a proceeding in equity, and is essentially a personal action [where] defendant has a right, under section 395 of the Code of Civil Procedure, to have such action tried in the county of his residence.” Smith v. Smith, 88 Cal. 572, 577 (1891). 1435265.2 14023-004 ll “MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S MOTION TO CHANGE VENUEFourth, allowing BillFloat’s tactic to succeed would also effectively nullify the well-settled “freezing of the pleadings/facts” rule that provides that “‘it is well settled that on motion for a 16 the FAC and bound itself to the venue rules applicable to the claims as initially presented. ii Accordingly, BillFloat is still bound by this Court’s prior determination transferring venue to 28 |] Sacramento County Superior Court. It cannot escape that order by the procedural gimmick of 1435265,2 14023-004 12 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S MOTION TO CHANGE VENUECem Na 10 12 1B 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 dismissal and immediate refiling against one defendant in the same court and against the individual defendants in another court. Finally, allowing BillFloat to circumvent the Court’s prior venue ruling encourages trifling with the court and re-litigation of issues already decided. Gaskill, 111 Cal.App.2d at 747 (“to allow successive actions to be filed for the purpose of relitigating the proper place of trial over and over seems like trifling with the court.” (internal quotation omitted)). As set forth above, the proper place of trial of BillFloat’s claims has been conclusively determined to be Sacramento County. Pursuant to the doctrines of res judicata and estoppel, this Court should transfer venue of BillFloat’s cross-complaint to Sacramento County. B. Golden Pacific’s Complaint Should Be Transferred Pursuant to C.C.P. 397(c). “The court may, on motion, change the place of trial ... When the convenience of witnesses and the ends of justice would be promoted by the change.” Code Civ. Pro. § 397(c). This motion is appropriate based upon BillFloat, Gilbert, and O’ Malley’s filed answer to Golden Pacific’s Complaint. Baird v, Smith, 21 Cal.App.2d 221, 223 (1937). “There can also be no doubt that before such a motion can be granted there must be some showing of both convenience of witnesses and that the ends of justice will be served by the change.” Harden v. Skinner & Hammond, 130 Cal.App.2d 750, 754 (1955). “Affidavits or declarations in support of the motion must set forth the names of the witnesses, the nature of the testimony expected from each, and the reasons why the attendance of each would be inconvenient.” Corfee v. S. California Edison Co., 202 Cal.App.2d 473, 477-478 (1962) (citing Peiser v. Mettler, 50 Cal.2d 594, 607 (1958); Harden, 130 Cal.App.2d at 755). This determination is discretionary. /d. Here, numerous third-party witnesses would be inconvenienced by a San Francisco trial location. Indeed, Roy Malone, Carol Corsetti, Grace Nagel, Linda Rohmer, and Gayle Matsuoka have all submitted declarations specifying the inconvenience that they would endure if the case remained venued in San Francisco. Each of their testimony is relevant to material issues in Golden Pacific’s complaint. Carol Corsetti, who is no longer employed by Golden Pacific, will provide detailed information relevant to Golden Pacific’s trade secret claims as she was the one who created and wrote most of the SBA loan underwriting guidelines for the SmartBiz program, 1435265.2 14023-004 3 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S MOTION TO CHANGE VENUE10 11 12 13 14 15 16 7 19 20 21 22 23 25 26 27 28 including the confidential and trade secret decision-making matrix for issuing SBA loans in the SmartBiz program. (Corsetti Decl., 4 3; Complaint, § 57.) Roy Malone, who is no longer employed by Golden Pacific, will testify that he was involved in the SmartBiz program from its earliest days. He will testify that he led the development of the SmartBiz program and served as a primary contact for Golden Pacific in negotiations with BillFloat on the Amended Joint Marketing and Joint Technology Improvement Agreement, including the issue of Mutual Improvement Expenses included in the agreement. (Malone Decl., § 2-6; Complaint, ff 37-38.) Grace Nagel helped develop the SmartBiz program’s standard operating procedures and underwriting procedures and developed the design of the SmartBiz platform itself. This is material to GPB’s claim of misappropriation of trade secrets, and that BillFloat breached the Amended Joint Marketing Agreement by sharing with other depository institutions material developed by Golden Pacific without Golden Pacific’s consent. (Nagel Decl., {§ 2-4; Complaint, ff 38(i), 57, 70-73.) Gayle Matsuoka sat in early meetings as the SmartBiz program was being developed. She expressed concerns about risk management and compliance with SBA regulations to BillFloat. (Matsuoka Decl., { 3; Complaint, § 38(k-l).) Finally, Linda Rohmer witnessed numerous occasions when BillFloat was failing to obtain all the documentation required for a SBA loan, and was informed of other occasions where BillFloat even had its representatives pose as GPB employees during telephone calls with borrowers. (Rohmer Decl., {{] 3-5.) All of these individuals have stated that Sacramento will be a more convenient venue for them for trial, given their respective work locations, child care responsibilities and other obligations. (Malone Decl. {J 8-9; Corsetti Decl. §] 4-5; Rohmer Decl. {f{ 6-7; Matsuoka Decl. {| 4-5; Nagel Decl., {[{f 4-5). In addition, other third party witnesses, including Frank Washington and others also have ties to the Sacramento area. Frank Washington signed the original Joint Marketing Agreement on behalf of Golden Pacific. (GPB Cmpl. at Exh. 2, p. 9). Cc The Ends of Justice are Served Better by a Sacramento County Venue. Finally, the ends of justice are served by transferring this entire action to Sacramento County for numerous reasons. As set forth above, the only reason that BillFloat was able to file its action in San Francisco County as a cross-complaint is that Golden Pacific did not employ the 1435265.2 14023-004 14 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S, MOTION TO CHANGE VENUE10 iL 12 13 14 15 16 17 18 19 20 21 22 23 25 26 27 28 same procedural gimmickry when its complaint was transferred from Sacramento to San Francisco. BillFloat should not be rewarded for its intentional evasion of this Court’s prior order by belatedly arguing that its current complaint is a cross-complaint justifying a San Francisco venuc. Motions to transfer venue should not be viewed as a game of legal whack-a-mole, where a vanquished litigator simply disappears down one hole, only to reappear in another. The ends of justice support transferring venue of Golden Pacific’s complaint pursuant to Code of Civil Procedure section 397(c) to have the cases heard together and not award BillFloat for its tactics. The ends of justice are also served because Sacramento County is the only place where all of BillFloat’s claims may be heard by the same court and consolidated. As set forth above, BillFloat’s Contra Costa Complaint likely will be transferred to Sacramento County Superior Court. Moreover, BillFloat’s Writ of Mandate Action is already pending in Sacramento County against Golden Pacific’s parent company. Transferring the entirety of this action (the cross- complaint based upon the section 396b and the principles of res judicata, and the Golden Pacific complaint based upon section 397(c)) allows all claims to be venued in a single court. Finally, Golden Pacific is headquartered in Sacramento, California. Its books and records are also found there. (Onstott Decl. § 11; Varela Decl. {J 1-2.). Minatta v. Crook, 166 Cal.App.2d 750, 756 (1959) (“The fact that a [movant’s] books and records are located in another county ... may be considered on the question whether the ends of justice will be served by making more expeditious the production of records.”) Tl. CONCLUSION For all of the above reasons, Golden Pacific respectfully requests that this Court grant this motion and transfer venue of the entire action, including the complaint and cross-complaint to Sacramento County Superior Court. Dated: March 10, 2016 KRONICK, MOSKOVITZ, TIEDEMANN & GIRARD By: Christopher Onstott Attorneys for Plaintiff and Cross-Defendant GOLDEN PACIFIC BANK, N.A, 1435265.2.14023-004 1s MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF/CROSS-DEFENDANT'S MOTION TO CHANGE VENUE