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KASEY DIBA, ESQ. (SBN 171081)
1 MATTHEW SICHI, ESQ. (SBN 306165)
FINNEGAN & DIBA, A LAW CORPORATION
2 3660 Wilshire Boulevard, Suite 800
Los Angeles, California 90010
3 Telephone: (213) 480-0292
Facsimile: (213) 480-0805
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Attorneys for Respondents, FJM Private Mortgage Fund, LLC, FJM Capital, Inc. dba First Bridge
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Lending, FJM Management, LLC dba First Bridge Lending
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THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
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COUNTY OF SONOMA
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In the Matter of the Arbitration between Case No. SCV-267331
10 Nicholas and Sharon Honchariw,
Assigned for All Purposes to:
11 Petitioners Hon. Christopher Honigsberg
12 vs. RESPONDENTS FJM PRIVATE
MORTGAGE FUND, LLC, FJM CAPITAL,
13 FJM Private Mortgage Fund, LLC, FJM Capital, INC., DBA FIRST BRIDGE LENDING,
Inc., dba First Bridge Lending, FJM FJM MANAGEMENT, LLC DBA FIRST
14 Management, LLC dba First Bridge Lending; BRIDGE LENDING’S SUPPLEMENTAL
and DOES 1 through 5, inclusive, BRIEF IN OPPOSITION TO
15 PETITIONERS’ MOTION FOR
Respondents. ATTORNEY FEES; DECLARATION OF
16 MATTHEW SICHI
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Date: September 20, 2023
18 Time: 3:00 PM
Dept.: 18
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RESPONDENTS’ SUPPLEMENTAL OPPOSITION TO PETITIONERS’ MOTION FOR ATTORNEY FEES
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1 TABLE OF CONTENTS
2 A. Introduction and Scope of Brief: ............................................................................................ 3
3 B. Petitioners are Not Entitled to Fees Under Code of Civil Procedure § 1021.5 As They
4 Are Not Successful Parties. ................................................................................................................ 4
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a) Petitioners are Not “Successful Parties” as the Benefit is Not Yet Secure. ..................... 4
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b) Petitioners Fail to Demonstrate a Right to Recovery of Fees Under the “Catalyst
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Theory.” ........................................................................................................................................... 6
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9 C. Petitioners Possessed a Massive Personal Interest in the Outcome of this Matter, Far
10 Exceeding the Costs of Bringing the Litigation................................................................................ 7
11 D. Even if Fees Were Appropriate, Recoverable Fees Should Only be Available For a Small
12 Portion of the Overall Litigation. .................................................................................................... 10
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E. Conclusion ............................................................................................................................... 11
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DECLARATION OF MATTHEW SICHI ......................................................................................... 13
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RESPONDENTS’ SUPPLEMENTAL OPPOSITION TO PETITIONERS’ MOTION FOR ATTORNEY FEES
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A. Introduction and Scope of Brief:
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2 Petitioners’ Motion for Attorney’s Fees came for hearing on September 20, 2023. Prior to that
3 hearing, this Court issued a tentative order denying the fee request in its entirety. Following the hearing,
4 this Court requested additional briefing on the following questions:
5 1. Whether Petitioners can be deemed a prevailing party under Petitioners’ request for
6 Attorney’s Fees under section 1021.5 of the Code of Civil Procedure; and
7 2. Petitioners’ right to recovery of attorney’s fees under that statute.
8 Respondents therefore file this brief on these two positions as a supplement to Respondents’ initial brief
9 in opposition, filed September 7, 2023, and the declarations and requests for judicial notice filed
10 therewith. Respondents do not address the other facets of the fee request given the tentative ruling on
11 those issues.
12 Preliminarily, to the extent Petitioners’ supplemental briefing contains additional evidence that
13 was available but not included at the time Petitioners brought their motion, Respondents object to that
14 inclusion of additional evidence given that it is Petitioners’ burden to include this evidence in their
15 moving papers and Respondents will be deprived of the ability to respond to any new evidence presented.
16 As for the merits, Petitioners simply have not recovered anything more than an unqualified
17 reversal, setting the parties back in the position they were before any of the claims were brought.
18 Petitioners simply are not the successful parties here as there is no success to point to outside of that
19 reversal. Courts are clear that this is just not a circumstance where fees should be awarded on an interim
20 basis. Even if it were, Petitioners fail to show that their recovery was the primary object of the litigation,
21 again both because there was no recovery and because there is no evidence satisfying this requirement.
22 Once again Respondents highlight Petitioners’ massive financial interest in this litigation, the
23 inextricable link between other matters and this, and the success of those matters hanging in the balance
24 of this outcome, which Mr. Honchariw himself demonstrates best of all in his declaration.
25 Finally, Respondents prevailed in summary adjudication on many of the claims brought by
26 Petitioners and re-hashed in the second arbitration. There are no claims remaining against FJM Capital,
27 Inc., and much of the fees now sought by Petitioners pertain to claims which once again have been
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1 adjudicated in Respondents favor. To the extent this Court is inclined to award any fees at all,
2 Respondents request that the award be heavily apportioned in that light.
3 Given this, as further discussed herein, and as initially briefed and argued, Respondents
4 respectfully request that this Court deny the fee motion in its entirety.
5 B. Petitioners are Not Entitled to Fees Under Code of Civil Procedure § 1021.5 As They Are
Not Successful Parties.
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A party seeking an award of Code of Civil Procedure, section 1021.5 attorney fees must first be
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determined to be a successful party. Coalition for a Sustainable Future in Yucaipa v. City of Yucaipa
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(2015) 238 Cal.App.4th 513, 521. As used in section 1021.5, “successful” is synonymous with
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“prevailing.” Schmier v. Supreme Court (2002) 96 Cal.App.4th 873, 877.
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As demonstrated herein, Petitioners are not successful in as they have not “secured” a benefit
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yet. All they have obtained is an unqualified reversal by the First District Court of Appeals. Still, even
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if this were not the case, it is Petitioners’ burden to establish that that their action caused a change in
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Respondents’ behavior under the catalyst theory. They fail in every regard to make that showing.
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a) Petitioners are Not “Successful Parties” as the Benefit is Not Yet Secure.
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A party cannot obtain attorney’s fees under Section 1021.5 “until the benefit is secure.” See
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Folsom v. Butte County Assn. of Governments (1982) 32 Cal.3d 668, 679; see also Urbaniak v. Newton
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(1993) 19 Cal.App.4th 1837, 1844.
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The First District’s reasoning in Urbaniak, supra is particularly applicable to this matter. There,
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the trial court granted summary judgment in defendants’ favor. The First District then reversed the
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dispositive order as to the claim of violation of a Constitutional right of privacy against the doctor
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defendant and plaintiff sought fees under section 1021.5, the private attorney general statute at issue
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here, on account of that reversal. Urbaniak v. Newton (1993) 19 Cal.App.4th 1837, 1840-1841. The trial
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court granted the motion and awarded $79,125.46 in fees. Id. at 1841. Following a second appeal, the
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First District reversed the award of fees, stating that “[r]eversal of a summary judgment leaves the parties
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in a position no different from that they would have occupied if they had simply defeated the defendants'
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motion ... in the trial court.” Urbaniak at 1844.
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Just as in Urbaniak, so too here did the First District issue a blanket reversal, ordering the parties
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RESPONDENTS’ SUPPLEMENTAL OPPOSITION TO PETITIONERS’ MOTION FOR ATTORNEY FEES
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1 back to arbitration, rather than a reversal with instructions to enter judgment in favor of Petitioners.
2 Indeed as briefed, the parties are set to commence that arbitration of the entirety of Petitioners claims
3 anew, before the end of this year.
4 Ordinarily, an unqualified reversal vacates the appealed judgment or order and remands the case
5 for a new trial or evidentiary hearing as though it has never been tried or heard. Saller v. Crown Cork &
6 Seal Co., Inc. (2010) 187 Cal.App.4th 1220, 1237–1238; Weisenburg v. Cragholm (1971) 5 Cal.3d 892,
7 896; see also Hall v. Superior Court In and For Los Angeles County (1955) 45 Cal.2d 377, 381 citations
8 omitted (“(A)n unqualified reversal remands the cause for a new trial (citation) and places the parties in
9 the trial court in the same position as if the cause had never been tried, with the exception that the opinion
10 of the court on appeal must be followed so far as applicable.”) All issues involved in the case are placed
11 “at large” for retrial upon remand. Weightman v. Hadley (1956) 138 Cal.App.2d 831, 836.
12 Here, the First District Court of Appeals, Third Division published its decision on September 29,
13 2022, which calls for an unqualified reversal: “We shall reverse as the trial court erroneously failed to
14 vacate an award that constitutes an unlawful penalty in contravention of the public policy set forth in
15 section 1671.” Honchariw v. FJM Private Mortgage Fund, LLC (2022) 83 Cal.App.5th 893, 897. “The
16 order is reversed. The Honchariws shall recover their costs on appeal.” Id. at 906.
17 Indeed, that same unqualified reversal is what allowed Petitioners to re-arbitrate claims which
18 both the first arbitrator and this Court rejected, simply because they were never discussed by the
19 Appellate Court.
20 Despite the Appellate ruling preceding this matter, the reversal also contains an important
21 discussion in the finality, or lack thereof, of this matter. Specifically, Respondents argued on appeal that
22 the Late Fee represents the parties’ attempt to calculate Respondents’ anticipated damages in the event
23 of default. Honchariw v. FJM Private Mortgage Fund, LLC (2022) 83 Cal.App.5th 893, 904. While the
24 Court rejected that argument, it was because the evidence was insufficient to demonstrate a “reasonable
25 relationship” between the Late Fee and “the range of actual damages that the parties could have
26 anticipated would flow from a breach. Id. (citing Ridgley v. Topa Thrift & Loan Ass'n (1998) 17 Cal.4th
27 970, at p. 977). Specifically, the Court found that Mr. Bardis simply answering “Yes” to a question,
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1 without more was not a sufficient showing. Id. In light of that discussion and the unqualified reversal,
2 Respondents are not precluded from making such a sufficient showing in the re-arbitration.
3 b) Petitioners Fail to Demonstrate a Right to Recovery of Fees Under the “Catalyst
Theory.”
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In making this determination under Private Attorney General fee requests, it is not necessary for
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a plaintiff to achieve a favorable final judgment to qualify for attorney fees so long as the plaintiff's
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actions were the catalyst for the defendant's actions, but there must be some relief to which the plaintiff's
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actions are causally connected.” California Public Records Research, Inc. v. County of Yolo (2016) 4
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Cal.App.5th 150, 191 (emphasis added) (citing Coalition for a Sustainable Future in Yucaipa v. City of
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Yucaipa (2015) 238 Cal.App.4th 513, 521). These cases, where plaintiff did not necessarily obtain a
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favorable final judgment on the merits, but did qualify for attorney fees under the private attorney general
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statute are often labeled “catalyst cases.” As discussed by the Supreme Court in Vasquez v. State of
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California (2008) 45 Cal.4th 243, at 247–248:
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Under the so-called private attorney general statute (Code Civ. Proc., § 1021.5, sometimes
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hereafter section 1021.5), a court may award attorney fees to the successful party in an
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action that has resulted in the enforcement of an important right affecting the public
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interest. In Graham v. DaimlerChrysler Corp. (2004) 34 Cal.4th 553, 560, 21 Cal.Rptr.3d
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331, 101 P.3d 140 (Graham), we held the “catalyst theory” permits a court to award
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attorney fees under section 1021.5 “even when litigation does not result in a judicial
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resolution if the defendant changes its behavior substantially because of, and in the manner
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sought by, the litigation.” In so holding, we also adopted “sensible limitations on the
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catalyst theory” (Graham, at p. 575, 21 Cal.Rptr.3d 331, 101 P.3d 140) to discourage
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meritless suits motivated by the hope of fees, “without putting a damper on lawsuits that
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genuinely provide a public benefit” (ibid.).
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As noted, in such catalyst cases, the plaintiff must also specifically demonstrate that the judicial
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relief obtained was the primary relief sought. California Public Records Research, Inc. v. County of Yolo
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(2016) 4 Cal.App.5th 150, 192.
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As demonstrated above, Petitioners have not obtained any relief as the benefit is not yet secured.
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1 Yet assuming arguendo that Petitioners could demonstrate that the “benefit is secure,” it is Petitioners
2 burden to establish that their lawsuit caused a change in Respondent’s actions. Petitioners make no such
3 showing, outside of a declaration discussing third-parties’ behavior, which Petitioners simultaneously
4 reject in the underlying arbitration. Problematic to that argument specifically, is that even if taken at face
5 value, it was not the object of Petitioners’ case to compel unknown third parties to alter their practices.
6 As the evidence quite clearly demonstrates, Petitioners brought suit to compel Respondents to pay an
7 exorbitant sum in excess of $5,000,000 to them.
8 There is no evidence that Petitioners even recovered the default interest sought from
9 Respondents, quite simply because they have yet to. There is no evidence that Respondents’ position
10 changed in light of the decision. There is no evidence that Respondents cannot demonstrate a reasonable
11 relationship between the late fee charged and “the range of actual damages that the parties could have
12 anticipated would flow from a breach” upon re-arbitration, as discussed by the First District in
13 Honchariw at 977.
14 Without such a showing, it is clear that this fee request simply is not ripe. All that Petitioners
15 have secured at this juncture is an unqualified reversal and an order that the parties re-arbitrate these
16 claims in their entirety, nothing more.
17 C. Petitioners Possessed a Massive Personal Interest in the Outcome of this Matter, Far
Exceeding the Costs of Bringing the Litigation.
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Respondents have already briefed and submitted evidence demonstrating that Petitioners’
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financial stake in this action far exceeds the cost of bringing the same. That discussion can be found
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starting at page 12, section III(B) of Respondents’ September 7, 2023, brief. The evidence is contained
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both in the Declaration of Matthew Sichi and the Request for Judicial Notice submitted therewith and is
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incorporate herein. This argument is briefed specifically in response to points raised by Petitioners at
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oral argument.
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The party seeking recovery of attorney’s fees bears the burden of establishing that its litigation
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costs transcend its personal interest in the suit. Beach Colony II v. California Coastal Com. (1985) 166
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Cal.App.3d 106, 113. Petitioners fail to do so. Satisfying this burden is necessary to an award of
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attorney’s fees under section 1021.5 and it is unnecessary for the court to consider whether any of the
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1 other elements are satisfied unless this burden is met. Millview County Water Dist. v. State Water
2 Resources Control Bd. (2016) 4 Cal.App.5th 759, 773.
3 It is within the trial court's discretion to deny attorneys' fees pursuant to section 1021.5 on the
4 ground that the plaintiff's personal stake in the outcome was not disproportionate to the burden of private
5 enforcement, even where the litigation enforced an important right and conferred a significant benefit
6 upon the public. Satrap v. Pacific Gas & Electric Co. (1996) 42 Cal.App.4th 72, 78.
7 In determining the financial burden on litigants, courts have quite logically focused not only on
8 the costs of the litigation but also any offsetting financial benefits that the litigation yields or reasonably
9 could have been expected to yield. Millview at 768.
10 It is this focus which Respondents seek to highlight here as Petitioners only attempt to discuss
11 their financial interest in the matter is in regard to the approximate $30,000 in default interest. That is
12 simply not how courts analyze these decisions. Rather, the court views the entire financial incentive to
13 bring the claims, even the punitive damages sought.
14 For instance, in Millview County Water Dist. v. State Water Resources Control Bd. (2016) 4
15 Cal.App.5th 759, the First District Court of Appeals, in rejecting the position now urged by petitioners
16 here, stated:
17 To the extent the court in Los Angeles Police intended to suggest that the financial burden
18 analysis is concerned only with the actual financial recovery of a party from the litigation,
19 as plaintiffs contend, we decline to follow it. Such a holding is inconsistent with more
20 recent authorities, which, as discussed above, consider a party's financial incentives to
21 participate in litigation—that is, the potential financial benefits, broadly defined—
22 regardless of the actual recovery, if any, from the litigation. Millview County Water Dist.
23 v. State Water Resources Control Bd. (2016) 4 Cal.App.5th 759, at 772.
24 The Millview court went on to state that “when interpreted in the manner urged by plaintiffs, Los
25 Angeles Police conflicts with Whitley itself, which noted that in determining financial burden “courts
26 have quite logically focused not only on the costs of the litigation but also any offsetting financial
27 benefits that the litigation yields or reasonably could have been expected to yield.” Millview at 773
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1 (citing Conservatorship of Whitley (2010) 50 Cal.4th 1206, 1215.
2 In Satrap v. Pacific Gas & Electric Co. (1996) 42 Cal.App.4th 72, the trial court found that
3 appellant's “sole motivation from the beginning of this lawsuit through this motion, was, and is, his
4 personal stake in the lawsuit and his personal financial gain.” Satrap at 77. In making that determination,
5 the First District Court of Appeals properly analyzed not just the size of recovery of the significant public
6 benefit claimed, but the case as a whole, including punitive damages, economic damages, and emotional
7 distress damages. The court then concluded that “this evidence supports the inference that, at the time
8 important litigation decisions were being made, appellant's expected recovery was always more than
9 enough to warrant incurring the costs of litigation.” Satrap at 79.
10 In Luck v. Southern Pacific Transportation Co. (1990) 218 Cal.App.3d 1, the Court upheld an
11 order denying a request for approximately $300,000 in attorney’s fees. While the trial court did find that
12 the plaintiff had enforced an important public right and conferred a significant benefit, the court denied
13 the fee request because it found the plaintiff had sufficient financial incentive to bring the lawsuit, based,
14 in part, upon the fact that she sought and obtained a damage award of approximately $500,000. Luck at
15 30.
16 Respondents have briefed and proffered evidence that Petitioners sought $5,308,574 in damages
17 in the first arbitration. Respondents also discussed how Petitioners sought a bare minimum total of
18 $595,455.76 without accounting for $5,000,000 punitive damages in the PMF Matter and far more in the
19 Secured Matter, as noted at section (a) starting at p.6 of that brief.
20 In response to Mr. Honchariw’s position at oral argument that those matters were subsequent to
21 this one, that is not the appropriate question. The appropriate question is what was Petitioners’ financial
22 stake was at the time the important litigation decisions were being made in this matter.
23 Before this matter was filed, Petitioners refinanced their loan with a $6,100,000 loan with PFM
24 CA REIT, LLC (“PFF”). Mr. Honchariw testified that he was aware of the default interest provision in
25 that loan before signing and was firmly of the belief that it was illegal at that time; that deposition
26 testimony was submitted along with the original opposition. Without even considering the subsequent
27 $7,200,000 revolving loan with a line of credit from Secured Income Fund-II, LLC it is clear that Mr.
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1 Honchariw was firmly of the belief that he had a claim against in the event that entity charged default
2 interest—which it did—even before filing this action. It is also clear that Mr. Honchariw was of the
3 opinion that in the event of another default, he could file suit to enjoin foreclosure—which he did against
4 Secured Income Fund-II, LLC.
5 Finally and again in response to this argument, Mr. Honchariw himself admits this combined
6 financial stake in his own declaration. Specifically, at paragraph 13, Mr. Honchariw states:
7 "The time spent on this matter was excessive for a matter of this size admittedly because it
8 was a direct challenge to the practice not only of respondents, but to Stonecrest Financial
9 and PMF Mortgage Fund, LLC."
10 Petitioners cannot simultaneously admit, in a sworn declaration, that the fees were high because it was
11 a direct challenge to the practice of all three lenders, only to deny that Petitioners’ financial interests in
12 those matters are inextricably linked to this one.
13 Thus, at the time the important litigation decisions were being made, Petitioners were fully aware
14 of the benefits that would follow from a successful suit here.
15 D. Even if Fees Were Appropriate, Recoverable Fees Should Only be Available for a Small
Portion of the Overall Litigation.
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On September 29, 2023, Respondents obtained summary adjudication of certain claims in
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arbitration. Specifically, all claims against FJM Capital, Inc., have been adjudicated in its favor and the
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only claims remaining are (1) whether default interest is an unlawful penalty under Civil Code § 1671
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as against FJM Private Mortgage Fund, LLC, and (2) whether FJM Management, LLC, breached its
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common law fiduciary duties to Petitioners in arranging a loan that allowed for the charge of default
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interest in such a way. [Sichi Dec. ¶3]. The Real Estate Loan Law claims have been fully adjudicated in
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Respondents’ favor. Id.
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This point is significant here as since of Respondents’ original arbitration, the Superior Court
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motion to vacate, and appellate action, all concern claims against three (3) respondents wholly unrelated
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to the matter taken up by the Court of Appeals, and which once again have been adjudicated in
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Respondents’ favor subject to a limited arbitration on one single issue—the propriety of charging default
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interest against the principal here. Coincidently, the only issue subject to re-arbitration is the same issue
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1 that Petitioners claim finality on with respect to the instant fee request. Petitioners have never been
2 successful in bringing claims against FJM Capital, Inc., from arbitration to First District Court of appeals,
3 and that entity is now dismissed. Yet Petitioners ask this Court to award attorney’s fees against it.
4 To the extent this Court is inclined to grant any fees, they should be heavily reduced given the
5 foregoing and as briefed in the September 7, 2023, Opposition.
6 “A question has also arisen as to the propriety of an “apportionment” of attorney fees under
7 section 1021.5. Although section 1021.5 does not specifically address the question of the propriety of a
8 partial award of attorney fees, we believe that if the trial court concludes that plaintiffs' potential financial
9 gain in this case is such as to warrant placing upon them a portion of the attorney fee burden, the section's
10 broad language and the theory underlying the private attorney general concept would permit the court to
11 shift only an appropriate portion of the fees to the losing party or parties.” Woodland Hills Residents
12 Assn., Inc. v. City Council (1979) 23 Cal.3d 917, 942.
13 “We believe that in determining the amount of attorney fees that a plaintiff reasonably could be
14 expected to bear for purposes of apportioning a fee award under section 1021.5, a court should consider
15 not only the actual or expected monetary recovery but the full monetary value of the judgment. This is
16 apparent in connection with the “financial burden of private enforcement” inquiry. The reasonably
17 expected financial benefits of the litigation are not necessarily limited to an affirmative monetary
18 recovery. Similarly, we believe that a court considering whether some or all of the fees in the interest of
19 justice should be paid by the opposing party or from the recovery should consider not only the actual
20 monetary recovery but also any other direct financial benefits provided to the plaintiff by the judgment.
21 Absent a showing to the contrary, we presume that the trial court did so here.” Collins v. City of Los
22 Angeles (2012) 205 Cal.App.4th 140, 158.
23 E. Conclusion
24 Given the foregoing, Respondents respectfully request that this Court adopt its tentative and deny
25 the fee request in its entirety. To the extent the Court is inclined to award any fees, Respondents
26 respectfully request that the amount be severely reduced to reflect fees only for that single issue on which
27 the Court of Appeals issued its blanketed reversal.
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2 Respectfully submitted.
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Dated: October 9, 2023 FINNEGAN & DIBA, A LAW CORPORATION
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6 By: ______________________________________
MATTHEW SICHI, ESQ.
7 Attorneys for Respondents
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DECLARATION OF MATTHEW SICHI
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2 I, Matthew Sichi, declare as follows:
3 1. I am an attorney at law duly admitted to practice before all the courts of the State of
4 California and the Attorney of record for all Respondents in the above captioned action. All the facts
5 contained herein are of my personal knowledge with exception to what has been set forth herein on the
6 basis of my information and belief and if called as a witness I would and could competently testify
7 thereto.
8 2. I am submitting this Declaration in support of Respondents’ Supplemental Opposition
9 to Petitioners’ Motion for Attorney Fees.
10 3. That on September 29, 2023, the arbitrator in the matter which this Court directed the
11 parties to re-arbitrate, issued his order on Respondents’ motion, granting summary adjudication in
12 Respondents’ favor on the Real Estate Loan Law and other claims. There are no remaining claims
13 against FJM Capital, Inc. At present, the only remaining claims are: (1) whether default interest is an
14 unlawful penalty under Civil Code § 1671 as against FJM Private Mortgage Fund, LLC which would
15 entitle Plaintiff to punitive damages, and (2) whether FJM Management, LLC, breached its common
16 law fiduciary duties to Petitioners in arranging a loan that allowed for the charge of default interest in
17 such a way, which Petitioners claim provides that same entitlement.
18 I declare the foregoing is true under the penalty of perjury under the laws of the State of
19 California. Executed this 9th day of October 2023, at Los Angeles, California.
20 __________________________
21 Declarant, Matthew Sichi
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PROOF OF SERVICE
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STATE OF CALIFORNIA, COUNTY OF LOS ANGELES
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I am employed in the County of Los Angeles, State of California. I am over the age of 18 and
3 not a party to the within action; my business address is: 3660 Wilshire Boulevard, Suite 800, Los
Angeles, California 90010.
4
On the date herein below specified, I served the foregoing document described as set forth below
5 on the interested parties in this action by placing true copies thereof enclosed in sealed envelopes, at Los
Angeles, California, addressed as follows:
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Date of Service: OCTOBER 9, 2023
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8 Document(s) Served: RESPONDENTS’ SUPPLEMENTAL BRIEF IN OPPOSITION TO
MOTION FOR ATTORNEY’S FEES
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Person(s) Served: NICHOLAS HONCHARIW
10 429 DUBOIS LANE
11 P.O. BOX 1452
GENOA, NV 89411
12 NH@NHPART.COM
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(BY U.S. Mail) I enclosed the documents in a sealed envelope or package addressed to the
14 address above and deposited the sealed envelope with the United States Postal Service, with the postage
fully prepaid or placed the envelope for collection and certified mailing with return receipt, in a sealed
15 envelope with postage fully prepaid.
16 (BY OVERNIGHT DELIVERY) I enclosed the documents in an envelope or package provided
by an overnight deliver carrier and addressed to the persons at the addresses above. I placed the envelope
17 or package for collection and overnight delivery at an office or a regularly utilized drop box of the
overnight delivery carrier.
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(BY FAX) I faxed the documents to the persons at the fax numbers listed above. No error was
19 reported by the fax machine that I used.
(BY MESSENGER SERVICE) I served the documents by placing them in an envelope or
20 package addressed to the addresses above and provided them to a professional messenger service for
personal service on this date.
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(BY PERSONAL SERVICE) I personally delivered by hand to the offices of the addressee(s).
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XX (BY EMAIL TRANSMISSION) I emailed a copy of the foregoing document(s) this date via
23 email to the email addresses shown above.
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XX (STATE) I declare under penalty of perjury under the laws of the State of California that the
25 above is true and correct.
26 EXECUTED at Los Angeles, California, on October 9, 2023
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Declarant, Matthew Sichi
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PROOF OF SERVICE
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KASEY DIBA, ESQ. (SBN 171081) 1 MATTHEW SICHI, ESQ. (SBN 306165) FINNEGAN & DIBA, A LAW CORPORATION 2 3660 Wilshire Boulevard, Suite 800 Los Angeles, California 90010 3 Telephone: (213) 480-0292 Facsimile: (213) 480-0805 4 Attorneys for Respondents, FJM Private Mortgage Fund, LLC, FJM Capital, Inc. dba First Bridge 5 Lending, FJM Management, LLC dba First Bridge Lending 6 7 THE SUPERIOR COURT OF THE STATE OF CALIFORNIA 8 COUNTY OF SONOMA 9 In the Matter of the Arbitration between Case No. SCV-267331 10 Nicholas and Sharon Honchariw, Assigned for All Purposes to: 11 Petitioners Hon. Christopher Honigsberg 12 vs. RESPONDENTS FJM PRIVATE MORTGAGE FUND, LLC, FJM CAPITAL, 13 FJM Private Mortgage Fund, LLC, FJM Capital, INC., DBA FIRST BRIDGE LENDING, Inc., dba First Bridge Lending, FJM FJM MANAGEMENT, LLC DBA FIRST 14 Management, LLC dba First Bridge Lending; BRIDGE LENDING’S SUPPLEMENTAL and DOES 1 through 5, inclusive, BRIEF IN OPPOSITION TO 15 PETITIONERS’ MOTION FOR Respondents. ATTORNEY FEES; DECLARATION OF 16 MATTHEW SICHI 17 Date: September 20, 2023 18 Time: 3:00 PM Dept.: 18 19 20 21 22 23 24 25 26 27 28 RESPONDENTS’ SUPPLEMENTAL OPPOSITION TO PETITIONERS’ MOTION FOR ATTORNEY FEES 1 1 TABLE OF CONTENTS 2 A. Introduction and Scope of Brief: ............................................................................................ 3 3 B. Petitioners are Not Entitled to Fees Under Code of Civil Procedure § 1021.5 As They 4 Are Not Successful Parties. ................................................................................................................ 4 5 a) Petitioners are Not “Successful Parties” as the Benefit is Not Yet Secure. ..................... 4 6 b) Petitioners Fail to Demonstrate a Right to Recovery of Fees Under the “Catalyst 7 Theory.” ........................................................................................................................................... 6 8 9 C. Petitioners Possessed a Massive Personal Interest in the Outcome of this Matter, Far 10 Exceeding the Costs of Bringing the Litigation................................................................................ 7 11 D. Even if Fees Were Appropriate, Recoverable Fees Should Only be Available For a Small 12 Portion of the Overall Litigation. .................................................................................................... 10 13 E. Conclusion ............................................................................................................................... 11 14 DECLARATION OF MATTHEW SICHI ......................................................................................... 13 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESPONDENTS’ SUPPLEMENTAL OPPOSITION TO PETITIONERS’ MOTION FOR ATTORNEY FEES 2 A. Introduction and Scope of Brief: 1 2 Petitioners’ Motion for Attorney’s Fees came for hearing on September 20, 2023. Prior to that 3 hearing, this Court issued a tentative order denying the fee request in its entirety. Following the hearing, 4 this Court requested additional briefing on the following questions: 5 1. Whether Petitioners can be deemed a prevailing party under Petitioners’ request for 6 Attorney’s Fees under section 1021.5 of the Code of Civil Procedure; and 7 2. Petitioners’ right to recovery of attorney’s fees under that statute. 8 Respondents therefore file this brief on these two positions as a supplement to Respondents’ initial brief 9 in opposition, filed September 7, 2023, and the declarations and requests for judicial notice filed 10 therewith. Respondents do not address the other facets of the fee request given the tentative ruling on 11 those issues. 12 Preliminarily, to the extent Petitioners’ supplemental briefing contains additional evidence that 13 was available but not included at the time Petitioners brought their motion, Respondents object to that 14 inclusion of additional evidence given that it is Petitioners’ burden to include this evidence in their 15 moving papers and Respondents will be deprived of the ability to respond to any new evidence presented. 16 As for the merits, Petitioners simply have not recovered anything more than an unqualified 17 reversal, setting the parties back in the position they were before any of the claims were brought. 18 Petitioners simply are not the successful parties here as there is no success to point to outside of that 19 reversal. Courts are clear that this is just not a circumstance where fees should be awarded on an interim 20 basis. Even if it were, Petitioners fail to show that their recovery was the primary object of the litigation, 21 again both because there was no recovery and because there is no evidence satisfying this requirement. 22 Once again Respondents highlight Petitioners’ massive financial interest in this litigation, the 23 inextricable link between other matters and this, and the success of those matters hanging in the balance 24 of this outcome, which Mr. Honchariw himself demonstrates best of all in his declaration. 25 Finally, Respondents prevailed in summary adjudication on many of the claims brought by 26 Petitioners and re-hashed in the second arbitration. There are no claims remaining against FJM Capital, 27 Inc., and much of the fees now sought by Petitioners pertain to claims which once again have been 28 RESPONDENTS’ SUPPLEMENTAL OPPOSITION TO PETITIONERS’ MOTION FOR ATTORNEY FEES 3 1 adjudicated in Respondents favor. To the extent this Court is inclined to award any fees at all, 2 Respondents request that the award be heavily apportioned in that light. 3 Given this, as further discussed herein, and as initially briefed and argued, Respondents 4 respectfully request that this Court deny the fee motion in its entirety. 5 B. Petitioners are Not Entitled to Fees Under Code of Civil Procedure § 1021.5 As They Are Not Successful Parties. 6 A party seeking an award of Code of Civil Procedure, section 1021.5 attorney fees must first be 7 determined to be a successful party. Coalition for a Sustainable Future in Yucaipa v. City of Yucaipa 8 (2015) 238 Cal.App.4th 513, 521. As used in section 1021.5, “successful” is synonymous with 9 “prevailing.” Schmier v. Supreme Court (2002) 96 Cal.App.4th 873, 877. 10 As demonstrated herein, Petitioners are not successful in as they have not “secured” a benefit 11 yet. All they have obtained is an unqualified reversal by the First District Court of Appeals. Still, even 12 if this were not the case, it is Petitioners’ burden to establish that that their action caused a change in 13 Respondents’ behavior under the catalyst theory. They fail in every regard to make that showing. 14 a) Petitioners are Not “Successful Parties” as the Benefit is Not Yet Secure. 15 A party cannot obtain attorney’s fees under Section 1021.5 “until the benefit is secure.” See 16 Folsom v. Butte County Assn. of Governments (1982) 32 Cal.3d 668, 679; see also Urbaniak v. Newton 17 (1993) 19 Cal.App.4th 1837, 1844. 18 The First District’s reasoning in Urbaniak, supra is particularly applicable to this matter. There, 19 the trial court granted summary judgment in defendants’ favor. The First District then reversed the 20 dispositive order as to the claim of violation of a Constitutional right of privacy against the doctor 21 defendant and plaintiff sought fees under section 1021.5, the private attorney general statute at issue 22 here, on account of that reversal. Urbaniak v. Newton (1993) 19 Cal.App.4th 1837, 1840-1841. The trial 23 court granted the motion and awarded $79,125.46 in fees. Id. at 1841. Following a second appeal, the 24 First District reversed the award of fees, stating that “[r]eversal of a summary judgment leaves the parties 25 in a position no different from that they would have occupied if they had simply defeated the defendants' 26 motion ... in the trial court.” Urbaniak at 1844. 27 Just as in Urbaniak, so too here did the First District issue a blanket reversal, ordering the parties 28 RESPONDENTS’ SUPPLEMENTAL OPPOSITION TO PETITIONERS’ MOTION FOR ATTORNEY FEES 4 1 back to arbitration, rather than a reversal with instructions to enter judgment in favor of Petitioners. 2 Indeed as briefed, the parties are set to commence that arbitration of the entirety of Petitioners claims 3 anew, before the end of this year. 4 Ordinarily, an unqualified reversal vacates the appealed judgment or order and remands the case 5 for a new trial or evidentiary hearing as though it has never been tried or heard. Saller v. Crown Cork & 6 Seal Co., Inc. (2010) 187 Cal.App.4th 1220, 1237–1238; Weisenburg v. Cragholm (1971) 5 Cal.3d 892, 7 896; see also Hall v. Superior Court In and For Los Angeles County (1955) 45 Cal.2d 377, 381 citations 8 omitted (“(A)n unqualified reversal remands the cause for a new trial (citation) and places the parties in 9 the trial court in the same position as if the cause had never been tried, with the exception that the opinion 10 of the court on appeal must be followed so far as applicable.”) All issues involved in the case are placed 11 “at large” for retrial upon remand. Weightman v. Hadley (1956) 138 Cal.App.2d 831, 836. 12 Here, the First District Court of Appeals, Third Division published its decision on September 29, 13 2022, which calls for an unqualified reversal: “We shall reverse as the trial court erroneously failed to 14 vacate an award that constitutes an unlawful penalty in contravention of the public policy set forth in 15 section 1671.” Honchariw v. FJM Private Mortgage Fund, LLC (2022) 83 Cal.App.5th 893, 897. “The 16 order is reversed. The Honchariws shall recover their costs on appeal.” Id. at 906. 17 Indeed, that same unqualified reversal is what allowed Petitioners to re-arbitrate claims which 18 both the first arbitrator and this Court rejected, simply because they were never discussed by the 19 Appellate Court. 20 Despite the Appellate ruling preceding this matter, the reversal also contains an important 21 discussion in the finality, or lack thereof, of this matter. Specifically, Respondents argued on appeal that 22 the Late Fee represents the parties’ attempt to calculate Respondents’ anticipated damages in the event 23 of default. Honchariw v. FJM Private Mortgage Fund, LLC (2022) 83 Cal.App.5th 893, 904. While the 24 Court rejected that argument, it was because the evidence was insufficient to demonstrate a “reasonable 25 relationship” between the Late Fee and “the range of actual damages that the parties could have 26 anticipated would flow from a breach. Id. (citing Ridgley v. Topa Thrift & Loan Ass'n (1998) 17 Cal.4th 27 970, at p. 977). Specifically, the Court found that Mr. Bardis simply answering “Yes” to a question, 28 RESPONDENTS’ SUPPLEMENTAL OPPOSITION TO PETITIONERS’ MOTION FOR ATTORNEY FEES 5 1 without more was not a sufficient showing. Id. In light of that discussion and the unqualified reversal, 2 Respondents are not precluded from making such a sufficient showing in the re-arbitration. 3 b) Petitioners Fail to Demonstrate a Right to Recovery of Fees Under the “Catalyst Theory.” 4 In making this determination under Private Attorney General fee requests, it is not necessary for 5 a plaintiff to achieve a favorable final judgment to qualify for attorney fees so long as the plaintiff's 6 actions were the catalyst for the defendant's actions, but there must be some relief to which the plaintiff's 7 actions are causally connected.” California Public Records Research, Inc. v. County of Yolo (2016) 4 8 Cal.App.5th 150, 191 (emphasis added) (citing Coalition for a Sustainable Future in Yucaipa v. City of 9 Yucaipa (2015) 238 Cal.App.4th 513, 521). These cases, where plaintiff did not necessarily obtain a 10 favorable final judgment on the merits, but did qualify for attorney fees under the private attorney general 11 statute are often labeled “catalyst cases.” As discussed by the Supreme Court in Vasquez v. State of 12 California (2008) 45 Cal.4th 243, at 247–248: 13 Under the so-called private attorney general statute (Code Civ. Proc., § 1021.5, sometimes 14 hereafter section 1021.5), a court may award attorney fees to the successful party in an 15 action that has resulted in the enforcement of an important right affecting the public 16 interest. In Graham v. DaimlerChrysler Corp. (2004) 34 Cal.4th 553, 560, 21 Cal.Rptr.3d 17 331, 101 P.3d 140 (Graham), we held the “catalyst theory” permits a court to award 18 attorney fees under section 1021.5 “even when litigation does not result in a judicial 19 resolution if the defendant changes its behavior substantially because of, and in the manner 20 sought by, the litigation.” In so holding, we also adopted “sensible limitations on the 21 catalyst theory” (Graham, at p. 575, 21 Cal.Rptr.3d 331, 101 P.3d 140) to discourage 22 meritless suits motivated by the hope of fees, “without putting a damper on lawsuits that 23 genuinely provide a public benefit” (ibid.). 24 As noted, in such catalyst cases, the plaintiff must also specifically demonstrate that the judicial 25 relief obtained was the primary relief sought. California Public Records Research, Inc. v. County of Yolo 26 (2016) 4 Cal.App.5th 150, 192. 27 As demonstrated above, Petitioners have not obtained any relief as the benefit is not yet secured. 28 RESPONDENTS’ SUPPLEMENTAL OPPOSITION TO PETITIONERS’ MOTION FOR ATTORNEY FEES 6 1 Yet assuming arguendo that Petitioners could demonstrate that the “benefit is secure,” it is Petitioners 2 burden to establish that their lawsuit caused a change in Respondent’s actions. Petitioners make no such 3 showing, outside of a declaration discussing third-parties’ behavior, which Petitioners simultaneously 4 reject in the underlying arbitration. Problematic to that argument specifically, is that even if taken at face 5 value, it was not the object of Petitioners’ case to compel unknown third parties to alter their practices. 6 As the evidence quite clearly demonstrates, Petitioners brought suit to compel Respondents to pay an 7 exorbitant sum in excess of $5,000,000 to them. 8 There is no evidence that Petitioners even recovered the default interest sought from 9 Respondents, quite simply because they have yet to. There is no evidence that Respondents’ position 10 changed in light of the decision. There is no evidence that Respondents cannot demonstrate a reasonable 11 relationship between the late fee charged and “the range of actual damages that the parties could have 12 anticipated would flow from a breach” upon re-arbitration, as discussed by the First District in 13 Honchariw at 977. 14 Without such a showing, it is clear that this fee request simply is not ripe. All that Petitioners 15 have secured at this juncture is an unqualified reversal and an order that the parties re-arbitrate these 16 claims in their entirety, nothing more. 17 C. Petitioners Possessed a Massive Personal Interest in the Outcome of this Matter, Far Exceeding the Costs of Bringing the Litigation. 18 Respondents have already briefed and submitted evidence demonstrating that Petitioners’ 19 financial stake in this action far exceeds the cost of bringing the same. That discussion can be found 20 starting at page 12, section III(B) of Respondents’ September 7, 2023, brief. The evidence is contained 21 both in the Declaration of Matthew Sichi and the Request for Judicial Notice submitted therewith and is 22 incorporate herein. This argument is briefed specifically in response to points raised by Petitioners at 23 oral argument. 24 The party seeking recovery of attorney’s fees bears the burden of establishing that its litigation 25 costs transcend its personal interest in the suit. Beach Colony II v. California Coastal Com. (1985) 166 26 Cal.App.3d 106, 113. Petitioners fail to do so. Satisfying this burden is necessary to an award of 27 attorney’s fees under section 1021.5 and it is unnecessary for the court to consider whether any of the 28 RESPONDENTS’ SUPPLEMENTAL OPPOSITION TO PETITIONERS’ MOTION FOR ATTORNEY FEES 7 1 other elements are satisfied unless this burden is met. Millview County Water Dist. v. State Water 2 Resources Control Bd. (2016) 4 Cal.App.5th 759, 773. 3 It is within the trial court's discretion to deny attorneys' fees pursuant to section 1021.5 on the 4 ground that the plaintiff's personal stake in the outcome was not disproportionate to the burden of private 5 enforcement, even where the litigation enforced an important right and conferred a significant benefit 6 upon the public. Satrap v. Pacific Gas & Electric Co. (1996) 42 Cal.App.4th 72, 78. 7 In determining the financial burden on litigants, courts have quite logically focused not only on 8 the costs of the litigation but also any offsetting financial benefits that the litigation yields or reasonably 9 could have been expected to yield. Millview at 768. 10 It is this focus which Respondents seek to highlight here as Petitioners only attempt to discuss 11 their financial interest in the matter is in regard to the approximate $30,000 in default interest. That is 12 simply not how courts analyze these decisions. Rather, the court views the entire financial incentive to 13 bring the claims, even the punitive damages sought. 14 For instance, in Millview County Water Dist. v. State Water Resources Control Bd. (2016) 4 15 Cal.App.5th 759, the First District Court of Appeals, in rejecting the position now urged by petitioners 16 here, stated: 17 To the extent the court in Los Angeles Police intended to suggest that the financial burden 18 analysis is concerned only with the actual financial recovery of a party from the litigation, 19 as plaintiffs contend, we decline to follow it. Such a holding is inconsistent with more 20 recent authorities, which, as discussed above, consider a party's financial incentives to 21 participate in litigation—that is, the potential financial benefits, broadly defined— 22 regardless of the actual recovery, if any, from the litigation. Millview County Water Dist. 23 v. State Water Resources Control Bd. (2016) 4 Cal.App.5th 759, at 772. 24 The Millview court went on to state that “when interpreted in the manner urged by plaintiffs, Los 25 Angeles Police conflicts with Whitley itself, which noted that in determining financial burden “courts 26 have quite logically focused not only on the costs of the litigation but also any offsetting financial 27 benefits that the litigation yields or reasonably could have been expected to yield.” Millview at 773 28 RESPONDENTS’ SUPPLEMENTAL OPPOSITION TO PETITIONERS’ MOTION FOR ATTORNEY FEES 8 1 (citing Conservatorship of Whitley (2010) 50 Cal.4th 1206, 1215. 2 In Satrap v. Pacific Gas & Electric Co. (1996) 42 Cal.App.4th 72, the trial court found that 3 appellant's “sole motivation from the beginning of this lawsuit through this motion, was, and is, his 4 personal stake in the lawsuit and his personal financial gain.” Satrap at 77. In making that determination, 5 the First District Court of Appeals properly analyzed not just the size of recovery of the significant public 6 benefit claimed, but the case as a whole, including punitive damages, economic damages, and emotional 7 distress damages. The court then concluded that “this evidence supports the inference that, at the time 8 important litigation decisions were being made, appellant's expected recovery was always more than 9 enough to warrant incurring the costs of litigation.” Satrap at 79. 10 In Luck v. Southern Pacific Transportation Co. (1990) 218 Cal.App.3d 1, the Court upheld an 11 order denying a request for approximately $300,000 in attorney’s fees. While the trial court did find that 12 the plaintiff had enforced an important public right and conferred a significant benefit, the court denied 13 the fee request because it found the plaintiff had sufficient financial incentive to bring the lawsuit, based, 14 in part, upon the fact that she sought and obtained a damage award of approximately $500,000. Luck at 15 30. 16 Respondents have briefed and proffered evidence that Petitioners sought $5,308,574 in damages 17 in the first arbitration. Respondents also discussed how Petitioners sought a bare minimum total of 18 $595,455.76 without accounting for $5,000,000 punitive damages in the PMF Matter and far more in the 19 Secured Matter, as noted at section (a) starting at p.6 of that brief. 20 In response to Mr. Honchariw’s position at oral argument that those matters were subsequent to 21 this one, that is not the appropriate question. The appropriate question is what was Petitioners’ financial 22 stake was at the time the important litigation decisions were being made in this matter. 23 Before this matter was filed, Petitioners refinanced their loan with a $6,100,000 loan with PFM 24 CA REIT, LLC (“PFF”). Mr. Honchariw testified that he was aware of the default interest provision in 25 that loan before signing and was firmly of the belief that it was illegal at that time; that deposition 26 testimony was submitted along with the original opposition. Without even considering the subsequent 27 $7,200,000 revolving loan with a line of credit from Secured Income Fund-II, LLC it is clear that Mr. 28 RESPONDENTS’ SUPPLEMENTAL OPPOSITION TO PETITIONERS’ MOTION FOR ATTORNEY FEES 9 1 Honchariw was firmly of the belief that he had a claim against in the event that entity charged default 2 interest—which it did—even before filing this action. It is also clear that Mr. Honchariw was of the 3 opinion that in the event of another default, he could file suit to enjoin foreclosure—which he did against 4 Secured Income Fund-II, LLC. 5 Finally and again in response to this argument, Mr. Honchariw himself admits this combined 6 financial stake in his own declaration. Specifically, at paragraph 13, Mr. Honchariw states: 7 "The time spent on this matter was excessive for a matter of this size admittedly because it 8 was a direct challenge to the practice not only of respondents, but to Stonecrest Financial 9 and PMF Mortgage Fund, LLC." 10 Petitioners cannot simultaneously admit, in a sworn declaration, that the fees were high because it was 11 a direct challenge to the practice of all three lenders, only to deny that Petitioners’ financial interests in 12 those matters are inextricably linked to this one. 13 Thus, at the time the important litigation decisions were being made, Petitioners were fully aware 14 of the benefits that would follow from a successful suit here. 15 D. Even if Fees Were Appropriate, Recoverable Fees Should Only be Available for a Small Portion of the Overall Litigation. 16 On September 29, 2023, Respondents obtained summary adjudication of certain claims in 17 arbitration. Specifically, all claims against FJM Capital, Inc., have been adjudicated in its favor and the 18 only claims remaining are (1) whether default interest is an unlawful penalty under Civil Code § 1671 19 as against FJM Private Mortgage Fund, LLC, and (2) whether FJM Management, LLC, breached its 20 common law fiduciary duties to Petitioners in arranging a loan that allowed for the charge of default 21 interest in such a way. [Sichi Dec. ¶3]. The Real Estate Loan Law claims have been fully adjudicated in 22 Respondents’ favor. Id. 23 This point is significant here as since of Respondents’ original arbitration, the Superior Court 24 motion to vacate, and appellate action, all concern claims against three (3) respondents wholly unrelated 25 to the matter taken up by the Court of Appeals, and which once again have been adjudicated in 26 Respondents’ favor subject to a limited arbitration on one single issue—the propriety of charging default 27 interest against the principal here. Coincidently, the only issue subject to re-arbitration is the same issue 28 RESPONDENTS’ SUPPLEMENTAL OPPOSITION TO PETITIONERS’ MOTION FOR ATTORNEY FEES 10 1 that Petitioners claim finality on with respect to the instant fee request. Petitioners have never been 2 successful in bringing claims against FJM Capital, Inc., from arbitration to First District Court of appeals, 3 and that entity is now dismissed. Yet Petitioners ask this Court to award attorney’s fees against it. 4 To the extent this Court is inclined to grant any fees, they should be heavily reduced given the 5 foregoing and as briefed in the September 7, 2023, Opposition. 6 “A question has also arisen as to the propriety of an “apportionment” of attorney fees under 7 section 1021.5. Although section 1021.5 does not specifically address the question of the propriety of a 8 partial award of attorney fees, we believe that if the trial court concludes that plaintiffs' potential financial 9 gain in this case is such as to warrant placing upon them a portion of the attorney fee burden, the section's 10 broad language and the theory underlying the private attorney general concept would permit the court to 11 shift only an appropriate portion of the fees to the losing party or parties.” Woodland Hills Residents 12 Assn., Inc. v. City Council (1979) 23 Cal.3d 917, 942. 13 “We believe that in determining the amount of attorney fees that a plaintiff reasonably could be 14 expected to bear for purposes of apportioning a fee award under section 1021.5, a court should consider 15 not only the actual or expected monetary recovery but the full monetary value of the judgment. This is 16 apparent in connection with the “financial burden of private enforcement” inquiry. The reasonably 17 expected financial benefits of the litigation are not necessarily limited to an affirmative monetary 18 recovery. Similarly, we believe that a court considering whether some or all of the fees in the interest of 19 justice should be paid by the opposing party or from the recovery should consider not only the actual 20 monetary recovery but also any other direct financial benefits provided to the plaintiff by the judgment. 21 Absent a showing to the contrary, we presume that the trial court did so here.” Collins v. City of Los 22 Angeles (2012) 205 Cal.App.4th 140, 158. 23 E. Conclusion 24 Given the foregoing, Respondents respectfully request that this Court adopt its tentative and deny 25 the fee request in its entirety. To the extent the Court is inclined to award any fees, Respondents 26 respectfully request that the amount be severely reduced to reflect fees only for that single issue on which 27 the Court of Appeals issued its blanketed reversal. 28 RESPONDENTS’ SUPPLEMENTAL OPPOSITION TO PETITIONERS’ MOTION FOR ATTORNEY FEES 11 1 2 Respectfully submitted. 3 Dated: October 9, 2023 FINNEGAN & DIBA, A LAW CORPORATION 4 5 6 By: ______________________________________ MATTHEW SICHI, ESQ. 7 Attorneys for Respondents 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESPONDENTS’ SUPPLEMENTAL OPPOSITION TO PETITIONERS’ MOTION FOR ATTORNEY FEES 12 DECLARATION OF MATTHEW SICHI 1 2 I, Matthew Sichi, declare as follows: 3 1. I am an attorney at law duly admitted to practice before all the courts of the State of 4 California and the Attorney of record for all Respondents in the above captioned action. All the facts 5 contained herein are of my personal knowledge with exception to what has been set forth herein on the 6 basis of my information and belief and if called as a witness I would and could competently testify 7 thereto. 8 2. I am submitting this Declaration in support of Respondents’ Supplemental Opposition 9 to Petitioners’ Motion for Attorney Fees. 10 3. That on September 29, 2023, the arbitrator in the matter which this Court directed the 11 parties to re-arbitrate, issued his order on Respondents’ motion, granting summary adjudication in 12 Respondents’ favor on the Real Estate Loan Law and other claims. There are no remaining claims 13 against FJM Capital, Inc. At present, the only remaining claims are: (1) whether default interest is an 14 unlawful penalty under Civil Code § 1671 as against FJM Private Mortgage Fund, LLC which would 15 entitle Plaintiff to punitive damages, and (2) whether FJM Management, LLC, breached its common 16 law fiduciary duties to Petitioners in arranging a loan that allowed for the charge of default interest in 17 such a way, which Petitioners claim provides that same entitlement. 18 I declare the foregoing is true under the penalty of perjury under the laws of the State of 19 California. Executed this 9th day of October 2023, at Los Angeles, California. 20 __________________________ 21 Declarant, Matthew Sichi 22 23 24 25 26 27 28 RESPONDENTS’ SUPPLEMENTAL OPPOSITION TO PETITIONERS’ MOTION FOR ATTORNEY FEES 13 PROOF OF SERVICE 1 STATE OF CALIFORNIA, COUNTY OF LOS ANGELES 2 I am employed in the County of Los Angeles, State of California. I am over the age of 18 and 3 not a party to the within action; my business address is: 3660 Wilshire Boulevard, Suite 800, Los Angeles, California 90010. 4 On the date herein below specified, I served the foregoing document described as set forth below 5 on the interested parties in this action by placing true copies thereof enclosed in sealed envelopes, at Los Angeles, California, addressed as follows: 6 Date of Service: OCTOBER 9, 2023 7 8 Document(s) Served: RESPONDENTS’ SUPPLEMENTAL BRIEF IN OPPOSITION TO MOTION FOR ATTORNEY’S FEES 9 Person(s) Served: NICHOLAS HONCHARIW 10 429 DUBOIS LANE 11 P.O. BOX 1452 GENOA, NV 89411 12 NH@NHPART.COM 13 (BY U.S. Mail) I enclosed the documents in a sealed envelope or package addressed to the 14 address above and deposited the sealed envelope with the United States Postal Service, with the postage fully prepaid or placed the envelope for collection and certified mailing with return receipt, in a sealed 15 envelope with postage fully prepaid. 16 (BY OVERNIGHT DELIVERY) I enclosed the documents in an envelope or package provided by an overnight deliver carrier and addressed to the persons at the addresses above. I placed the envelope 17 or package for collection and overnight delivery at an office or a regularly utilized drop box of the overnight delivery carrier. 18 (BY FAX) I faxed the documents to the persons at the fax numbers listed above. No error was 19 reported by the fax machine that I used. (BY MESSENGER SERVICE) I served the documents by placing them in an envelope or 20 package addressed to the addresses above and provided them to a professional messenger service for personal service on this date. 21 (BY PERSONAL SERVICE) I personally delivered by hand to the offices of the addressee(s). 22 XX (BY EMAIL TRANSMISSION) I emailed a copy of the foregoing document(s) this date via 23 email to the email addresses shown above. 24 XX (STATE) I declare under penalty of perjury under the laws of the State of California that the 25 above is true and correct. 26 EXECUTED at Los Angeles, California, on October 9, 2023 27 28 Declarant, Matthew Sichi 1 PROOF OF SERVICE