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1 WILKE FLEURY LLP
DANIEL L. EGAN (SBN 142631)
2 degan@wilkefleury.com
DANIEL J. FOSTER (SBN 238012)
3 dfoster@wilkefleury.com
BIANCA S. SAMUEL (SBN 278231)
4 bsamuel@wilkefleury.com 5/6/2020
400 Capitol Mall, Twenty-Second Floor
5 Sacramento, California 95814
Telephone: (916) 441-2430
6 Facsimile: (916) 442-6664
7 Attorneys for Respondent
F. PAUL SAJBEN, M.D. and F. PAUL SAJBEN,
8 M.D. A PROFESSIONAL CORPORATION
9 SUPERIOR COURT OF THE STATE OF CALIFORNIA
10 COUNTY OF BUTTE
11
12 OMAR JAY ON and BARBARA ON, Case No. 19CV03856
13 Petitioners, OPPOSITION TO PETITIONERS’
MOTION TO AMEND JUDGMENT
14 v.
Date: May 20, 2020
15 STEPHEN A. VANNUCCI, M.D., INC. and Time: 9:00 a.m.
NORTH VALLEY DERMATOLOGY Dept.: 1
16 CENTER,
17 Respondents.
18
19 I.
INTRODUCTION
20
21 Respondent F. PAUL SAJBEN, M.D. A PROFESSIONAL CORPORATION (“FPSI”)
22 opposes the motion of Petitioners OMAR JAY ON and BARBARA ON (“Plaintiffs”) for an order
23 adding FPSI, a non-party, to the judgment in this case.
24 This matter is premature at best. FPSI was not a party to the underlying arbitration
25 proceeding and, although FPSI was a general partner in Defendant NORTH VALLEY
26 DERMATOLOGY CENTER (“NVDC”), no judgment has been entered against NVDC. There is
27 no judgment against NVDC that can be amended to add FPSI. The only judgment entered thus far
28 in this case was entered against STEPHEN A. VANNUCCI, M.D., INC. (“SAVI”), but there is no
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OPPOSITION TO PETITIONERS’ MOTION TO AMEND JUDGMENT
1 legal theory or authority that would make FPSI liable for a judgment against SAVI. FPSI was not
2 a general partner in SAVI. Plaintiffs attempt to gloss over this point.
3 Plaintiffs complicate their procedural errors by presenting a motion unsupported by
4 admissible evidence. The only declarations come from attorneys who have no personal knowledge
5 of the operative facts. The request for judicial notice adds little, and certainly does not support the
6 voluminous narrative Plaintiffs attempt to present to the Court. This error comes into focus because
7 the Plaintiffs request the Court to enter findings against FPSI with no evidentiary foundation.
8 Plaintiffs ask the Court to enter judgment against FPSI for “unpaid wages”, or “unpaid
9 compensation” but there is no evidence to support such a finding, and it is not true anyway.
10 In short, this motion presents substantial procedural and substantive problems that will
11 complicate, rather than simplify future proceedings. Plaintiffs should simply start over when the
12 issue is ripe.
13 II.
FACTUAL BACKGROUND
14
15 Dr. Sajben is a dermatologist who has served patients in the Chico area since July 2001. Dr.
16 Sajben initially provided these services as an associate of Dr. Richey in facilities shared with Drs.
17 Richey and Vannucci and Mr. On. Under the original arrangement, each professional corporation
18 hired its own employees and physicians’ assistants in shared space. In February 2002 the legal
19 relationship was modified and Drs. Richey and Vannucci and Mr. On created an expense sharing
20 agreement. FPSI was formed on September 18, 2002 and it began sharing expenses as outlined in
21 that document. Declaration of F. Paul Sajben, M.D. (“Sajben Decl.”), ¶ 2.
22 On September 13, 2010 NVDC was created as a partnership between FPSI, SAVI and
23 Donald Richey, M.D., Inc. (“DRI”). Under the new arrangement, NVDC directly employed staff
24 and physician assistants, and contracted with FPSI, DRI and SAVI for the services of Drs. Richey,
25 Vannucci and Sajben. Dr. Hodari’s professional corporation joined NVDC on November 8, 2012.
26 By 2019, NVDC employed 52 people and served approximately 44,000 patients. Sajben Decl., ¶ 3.
27 Physician assistants are medical professionals with less training than doctors. A four-year
28 degree is not required. Physician assistants can only practice medicine under the supervision of a
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OPPOSITION TO PETITIONERS’ MOTION TO AMEND JUDGMENT
1 licensed doctor. Nevertheless, physician assistants operate with substantial autonomy, and many
2 have their own patient base. Physician assistants are typically paid under a formula which provides
3 the physician assistant with a percentage of receipts. Overhead is generally paid by the employer,
4 and, as set forth below, allocated to the supervising physician. Sajben Decl., ¶ 4.
5 Although NVDC received revenues and paid the expenses of the operations of the clinics,
6 compensation for the doctors’ corporations continued to be allocated based on the production of the
7 individual doctors. Costs attributable to individual practices were allocated to that particular
8 practice. Common overhead charges were shared by all practices. Net revenues from physicians’
9 assistants were allocated between overhead and costs, the physician assistant, and the supervising
10 dermatologist. Each professional corporation was essentially its own profit center. Since Plaintiff
11 On was supervised by Dr. Richey, and later Dr. Vannucci, none of Mr. On’s revenues were allocated
12 to, or received by, Dr. Sajben. Sajben Decl., ¶ 5.
13 This arrangement worked well for Mr. On. SAVI, and later NVDC, provided his facilities,
14 paid some of his bills, and provided the supervision legally required to allow him to operate his
15 practice. From 2003 to 2009 Mr. On made an average of $482,681 per year.1 Mr. On originally had
16 an employment agreement with SAVI. That agreement was never formally assumed by NVDC, but
17 NVDC paid Mr. On all compensation owed to Mr. On under the employment agreement between
18 SAVI and Mr. On. Sajben Decl., ¶ 6. Nevertheless, Mr. On wanted more.
19 In 2013 Mr. On complained to Dr. Vannucci and the then office manager, Ronnie
20 Boongaling, that he was not making enough money. Mr. Boongaling then conducted an
21 investigation and found that Mr. On was being compensated according to his agreement with SAVI.
22 Mr. On then terminated his employment. NVDC then conducted an additional investigation, using
23 an outside accountant. While the second investigation was not driven by On’s complaints about his
24 pay, the investigation also showed that Mr. On has been paid according to the contract. Mr. On later
25 sued NVDC. Sajben Decl., ¶ 7. Unfortunately for Dr. Sajben, NVDC elected to resolve the dispute
26 in an arbitration.
27
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28 Arbitration Award, p. 12 at fn. 39.
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OPPOSITION TO PETITIONERS’ MOTION TO AMEND JUDGMENT
1 On June 3, 2019 the arbitrator issued a tentative award. Sajben Decl., ¶ 8. The arbitrator
2 first disregarded the employment agreement, sidestepping the issue of whether or not NVDC had
3 complied with the terms of the On employment agreement or had paid the wages due under that
4 contract. Instead, the arbitrator awarded what she found to be the reasonable value of the services
5 of a dermatology physician’s assistant. The arbitrator found that the reasonable value of On’s
6 services was $569,015 per year and awarded additional compensation, for the period October 1,
7 2010 to July 2, 2013.2
8 The arbitrator awarded $470,055 in additional compensation. The arbitrator further found
9 that a physician’s assistant, who ran his own practice with his own patients, was nevertheless a non-
10 exempt employee entitled to meal breaks and rest periods. Mr. On was awarded an additional
11 $158,829 for the rest and meal breaks he did not allow himself to take. Mr. On was awarded
12 additional contributions to his retirement account in the amount of $48,729. In total, Mr. On was
13 awarded additional compensation of $677,613, on top of the $887,177 he made for the period
14 October 1, 2010 through July 2, 2013. This equates to an annual income of $569,015.3
15 The arbitrator then went on to award $1,328,812, or twice the actual “damages”, in attorneys’
16 fees to Mr. On’s attorneys. Additional interest totaled $339,293.36. In total, Mr. On was awarded
17 a total of approximately $2.3 million, from an employer that had complied in all respects with its
18 agreement with its highly paid employee. The arbitration award defies common sense.
19 To add insult to injury, NVDC’s insurer declined to provide coverage for the award. Sajben
20 Decl., ¶ 8.
21 Shortly after the arbitration award was issued, Dr. Hodari decided to leave NVDC. Dr.
22
23 2
The relevant period for damages was October 1, 2010 through July 2, 2013, or 2.75 years. See,
24 Arbitration Award, 23:8. During this time period Plaintiff was paid the sum of $887,177
(Arbitration Award, p.12 at fn. 39), or $322,609 per year. In the arbitration award, Plaintiff was
25 awarded an additional $470,055, or $170,929 per year, in additional compensation, $158,829, or
$57,756 per year, in compensation for meal and rest breaks, and $48,729.33, or $17,720 per year,
26 in pension contributions. (Arbitration Award, 43:18-23.) The total compensation awarded was
27 $569,015 per year.
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28 See, fn. 2 above.
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OPPOSITION TO PETITIONERS’ MOTION TO AMEND JUDGMENT
1 Hodari stopped providing services to NVDC in August 2019 and took his practice with him. When
2 it became clear that NVDC would not be able to pay FPS and SAVI for the services of Drs. Sajben
3 and Vannucci, they became direct employees of NVDC, at greatly reduced compensation. Even
4 then, NVDC was unable to pay Dr. Sajben even the reduced amount of compensation it owed under
5 the new employment agreement. Between September 6, 2019 and January 28, 2020, Dr. Sajben was
6 paid $49,724 per month or $596,688 per year (Sajben Decl., ¶ 9), or only about 4% more than the
7 amount the arbitrator found to be the reasonable value of services of a physician’s assistant.
8 By December 2019 Dr. Sajben decided to close his practice and discontinue his work as a
9 dermatologist. However, a medical clinic cannot simply close its doors and abandon its patients. In
10 early December 2019 Dr. Sajben sent a letter to his patients indicating that he was closing his
11 practice as of March 31, 2020 and advising them to locate new doctors for their medical care. The
12 letter gave patients referrals to other dermatology providers. Dr. Sajben chose the date of March
13 31, 2019 because he was advised by his insurer that patients should be given at least three months
14 advance notice of the closing. Sajben Decl., ¶ 10.
15 On December 19, 2019 NVDC, the doctors, and Mr. On held a last-ditch mediation in an
16 attempt to settle Mr. On’s claims. The mediation was unsuccessful, and Mr. On sought entry of
17 judgment against NVDC. This action was the final straw, and NVDC was forced to close. However,
18 to ensure patient care and continuity, NVDC could not just shut its doors without giving its patients
19 time to locate alternate providers. NVDC commenced a Chapter 11 bankruptcy case on January 28,
20 2020 to provide time for an orderly closing for its patients and its employees. The compensation of
21 Dr. Sajben and Dr. Vannucci was reduced to $10,000 per month (Sajben Decl., ¶ 11), or 21% of the
22 salary awarded in the arbitration to Mr. On.
23 NVDC ultimately closed its doors and terminated its final employees on March 29, 2020.
24 Sajben Decl., ¶ 11. Although the closing was expedited by a few days by the COVID-19 situation,
25 the bankruptcy was successful and allowed the orderly closure of NVDC’s medical offices. The
26 remaining liquidation, mainly involving collection of accounts receivable and payment of bills, is
27 being handled by a Chapter 7 trustee.
28 ///
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OPPOSITION TO PETITIONERS’ MOTION TO AMEND JUDGMENT
1 Mr. On’s sense of justice and truth are misplaced. His greed, and the greed of his attorneys,
2 destroyed NVDC and the jobs of its 52 employees. The remaining physician’s assistants are owed
3 significant amounts of money that the bankruptcy trustee has, so far, refused to pay. Still, Mr. On
4 continues to advance a false narrative in this case that the doctors were overcompensated and that
5 he was cheated. Actual proceedings in this case will show that this narrative is not true. But at this
6 stage, Mr. On has not presented any competent evidence. He has not even started the process of
7 determining the truth. For this reason, Mr. On’s request to fast track proceedings and rush to
8 judgment is premature and should be denied.
9 III.
ARGUMENT
10
11 In this case Plaintiffs’ request for judgment against FPSI should be denied for three
12 independent reasons. First, there is no judgment against NVDC to amend. The only judgment
13 entered in this matter is against SAVI, and FPSI was not a general partner in SAVI. Second, the
14 proposed judgment exceeds a mere money judgment, and seeks to impose findings of fact and
15 characterizations of damages that are not accurate or supported by evidence. Further, this Court
16 should not be influenced by the inflammatory and misleading narrative provided by Plaintiffs.
17 Almost none of the narrative is supported by evidence, and the Court should withhold judgment
18 until it hears the actual facts. Finally, adding FPSI to the judgment went it did not appear in the
19 underlying arbitration violates due process.
20 A. There is No Judgment Against NVDC to Amend, and Therefore this Matter is
Premature
21
22 Plaintiffs seek to amend their judgment against SAVI to add FPSI as an additional judgment
23 debtor. The moving party has the burden of providing the facts essential to the granting of the
24 motion by a preponderance of the evidence. See Wollersheim v. Church of Scientology, 69
25 Cal.App.4th 1012, 1017 (1999). Here, Plaintiffs contend that the Court should amend the judgment
26 against SAVI to add FPSI as a debtor because FPSI was a general partner of NVDC and is, therefore,
27 jointly and severally liable “for the full judgment by operation of law.” Plaintiffs’ Points and
28 ///
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OPPOSITION TO PETITIONERS’ MOTION TO AMEND JUDGMENT
1 Authorities, 5:5-5:17. According to Plaintiffs, Corporations Code section 16306(a) establishes the
2 liability of general partners for partnership obligations, including judgments. Id., 1:21-1:28.
3 The flaw in logic is glaring. There is no judgment against NVDC to establish liability of the
4 general partner FPSI. Furthermore, FPSI was not a general partner in SAVI, the only judgment
5 debtor here. Plaintiffs consciously chose to not name FPSI in the arbitration, and FPSI was not a
6 party to the arbitration award. Thus, there is no arbitration award to confirm into judgment.
7 Therefore, there is no basis to name FPSI in a judgment at this time.
8 B. Plaintiffs’ Motion Impermissibly Seeks to Bind FPSI to the Findings in the Underlying
Arbitration
9
10 Even if Plaintiffs’ Motion was not fatally deficient as to FPSI, itis improper for another
11 reason. This Motion seeks more than an amendment of the money judgment to add FPSI. Instead,
12 Plaintiffs endeavor to add the arbitrator’s factual findings characterizing the monies awarded therein
13 as “unpaid wages” or “unpaid compensation” to the judgment. See Plaintiffs’ Points and
14 Authorities, at pp. 3, 6, 9, 12, 14. In fact, Plaintiffs claim throughout their Motion that “the debt at
15 issue is wages” and as such, is given “special status under California law”. Id. at pp. 9, 14. While
16 Plaintiffs acknowledge that neither FPSI nor Dr. Sajben were parties to the underlying arbitration,
17 they simultaneously contend that he (and the other “involved physicians”) is “personally liable” for
18 “unpaid wages.” See Plaintiffs’ Points and Authorities, 9:1-9:4, 2:14-3:20.
19 For various reasons, there is no basis for the foregoing contention. First, an arbitrator’s
20 decision and findings are binding and final only on the parties to the arbitration. Moncharsh v.
21 Heily & Blase, 3 Cal.4th 1, 9 (1992). The law recognizes that when parties agree to leave their
22 dispute to an arbitrator via an arbitration agreement, they are presumed to know that his or her
23 decision (and award) is final. Id. at 10 (internal citations and quotations omitted). While general
24 partners may be liable for the partnership’s debts, they are not bound to an arbitrator’s findings in
25 an arbitration in which the partner did not participate. Accordingly, FPSI cannot be bound to the
26 arbitration award or any of the findings on which the award was based.
27 ///
28 ///
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OPPOSITION TO PETITIONERS’ MOTION TO AMEND JUDGMENT
1 C. The Motion Impermissibly Makes Numerous Factual Assertions that Are Not
Supported by Evidence.
2
3 It is hornbook law that, in order to be admissible evidence, supporting declarations must be
4 based on personal knowledge. See Evid. Code § 702. Similarly, all evidentiary writings must be
5 authenticated before they may be admitted. Evid. Code § 1401(a). “Authentication of a writing
6 means…the introduction of evidence sufficient to sustain a finding that itis the writing that the
7 proponent of the evidence claims it is….” Evid. Code § 1400. Here, Banks’ declaration satisfies
8 none of the foregoing principles. At the outset, the declaration contains no statement that the
9 declarant has personal knowledge of the facts stated therein. See James J. Banks Declaration, at pp.
10 1-3; Evid. Code § 702. The same is true of the Declaration of W. David Corrick. W. David Corrick
11 Declaration, at pp. 1-3. Consequently, neither declaration is admissible. Further, as it is
12 inadmissible, Banks’ declaration cannot authenticate any of the documents submitted in support of
13 the instant Motion that relate to events prior to the arbitration itself. Neither Mr. Banks nor Mr.
14 Corrick were present at that time, and neither has personal knowledge of the events preceding their
15 involvement.
16 Since there is no admissible evidence to support the Plaintiffs’ inflammatory narrative of
17 facts, the Court should not be swayed by Plaintiffs’ purported statement of facts. It is nothing until
18 supported by evidence. Instead, the Court should only consider the actual facts, as set forth in the
19 Declaration of Dr. Sajben, which is supported by admissible evidence.
20 D. Adding FPSI (or Dr. Sajben) to the Judgment Violates Due Process
21 Finally, summarily adding FPSI or Dr. Sajben to a judgment that runs only against SAVI
22 when neither party was present at the arbitration to litigate the underlying claims is a blatant
23 violation of the 14th Amendment. See Motores de Mexicali, S.A. v. Superior Court, 51 Cal.2d 172,
24 176 (1958). Petitioners chose to state claims against NVDC and SAVI only. Accordingly, FPSI
25 and Dr. Sajben had no opportunity to appear or present defenses in the underlying arbitration. Id.
26 Given this, Plaintiffs’ motion to amend the judgment should be denied.
27 ///
28 ///
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OPPOSITION TO PETITIONERS’ MOTION TO AMEND JUDGMENT
1 IV.
CONCLUSION
2
3 Plaintiffs motion should be denied for three independent reasons. First, the motion is
4 premature. There is no judgment against NVDC that can be amended, and there is no legal basis
5 for amending a judgment against SAVI based on Corporations Code section 16306(a). Second,
6 there is no evidence or basis for incorporating findings of an arbitrator into a judgment against an
7 entity that was not a party to the arbitration (or arbitration award.) Finally, modifying the judgment
8 to add FPSI (or Dr. Sajben) when FPSI did not appear in the underlying litigation violates due
9 process. For each of these reasons, the motion must be denied.
10 DATED: May 6, 2020 WILKE FLEURY LLP
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By:
13 BIANCA S. SAMUEL
Attorneys for Respondent
14 F. PAUL SAJBEN, M.D. and F. PAUL SAJBEN,
M.D. A PROFESSIONALCORPORATION
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OPPOSITION TO PETITIONERS’ MOTION TO AMEND JUDGMENT
1 PROOF OF SERVICE
2 On v. Vannucci
Case No. 19CV03856
3
STATE OF CALIFORNIA, COUNTY OF SACRAMENTO
4
At the time of service, I was over 18 years of age and not a party to this action. I am
5 employed in the County of Sacramento, State of California. My business address is 400 Capitol
Mall, Twenty-Second Floor, Sacramento, CA 95814.
6
On May 6, 2020, I served true copies of the following document(s) described as
7 OPPOSITION TO PETITIONERS’ MOTION TO AMEND JUDGMENT on the interested
parties in this action as follows:
8
SEE ATTACHED SERVICE LIST
9
BY E-MAIL OR ELECTRONIC TRANSMISSION: Based on a court order or an
10 agreement of the parties to accept service by e-mail or electronic transmission, I caused the
document(s) to be sent from e-mail address sbrazell@wilkefleury.com to the persons at the
11 e-mail addresses listed in the Service List. I did not receive, within a reasonable time after
the transmission, any electronic message or other indication that the transmission was
12 unsuccessful.
13 I declare under penalty of perjury under the laws of the State of California that the foregoing
is true and correct.
14
Executed on May 6, 2020, at Sacramento, California.
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/s/ Sharon R. Brazell
17 Sharon R. Brazell
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OPPOSITION TO PETITIONERS’ MOTION TO AMEND JUDGMENT
SERVICE LIST
On v. Vannucci
Case No. 19CV03856
James J. Banks Attorneys for Plaintiffs
W. David Corrick
BANKS & WATSON
901 F Street, Suite 200
Sacramento, CA 95814-0733
Tel: (916) 325-1000
Fax: (916) 325-1004
Email: jbanks@bw-firm.com
Email: dcorrick@bw-firm.com
Patricia A. Savage Attorneys for Plaintiffs
LAW OFFICES OF PATRICIA A. SAVAGE
1550 Humboldt Road, Suite 4
Chico, CA 95928
Tel: (530) 809-1851
Fax: (530) 592-3865
Email: psavesq@gmail.com
Mark A. Serlin Attorneys for Plaintiffs
SERLIN & WHITEFORD, LLP
701 E Street
Sacramento, CA 95814-1208
Tel: (916) 446-0790
Fax: (916) 446-0791
Email: ms@swllplaw.com
Serena Warner Attorneys for Stephen A. Vannucci, M.D.,
John A. Whitesides Inc. and North Valley Dermatology Center
ANGELO, KILDAY & KILDUFF, LLP
601 University Avenue, Suite 150
Sacramento, CA 95825
Tel: (916) 564-6100, ex. 201
Fax: (916) 564-6263
Email: swarner@akk-law.com
jwhitesides@akk-law.com
Doug Jacobs Attorneys for Stephen A. Vannucci
JACOBS, ANDERSON, POTTER &
CHAPLIN, LLP
20 Independence Circle
Chico, CA 95973
Tel: (530) 342-6144
Email: djacobs@japc-law.com)
Michael T. Shepherd Attorneys for Donald F. Richey, M.D.
LAW OFFICES OF MICHAEL T. SHEPHERD
1074 East Avenue, Suite O
Chico, CA 95926
Tel: (530) 893-3700
Fax: (530) 893-1579
Email: michael@shepherdlaw.com
John S. Knowlton Attorney for Stephen A. Vannucci
THE BURTON LAW FIRM
400 Capitol Mall, Suite 1850
Sacramento, CA 95814
Tel: (916) 822-8700
Email: jknowlton@lawburton.com
Jason E. Rios Attorney for Stephen A. Vannucci
FELDERSTEIN, FITZGERALD,
WILLOUGHBY, PASCUZZI & RIOS, LLP
500 Capitol Mall, Suite 2250
Sacramento, CA 95814
Tel: (916) 431-7046 direct
Email: jrios@ffwplaw.com
David Ongaro Attorney for F. Paul Sajben, M.D.
ONGARO PC
50 California Street, Suite 3325
San Francisco, CA 94111
Tel: (415) 433-3900
Email: dongaro@ongaropc.com
Mark Habib Attorneys for F. Paul Sajben, M.D.
HABIB, MCKENNA, JUHL-RHODES &
CARDOZA, LLP
414 Salem Street
Chico, CA 95928
Tel: (530) 342-3593
Email: mhabib@peterslawchico.com
Clement L. Glynn Attorney for Stephen A. Vannucci
GLYNN & FINLEY, LLP
One Walnut CreekCenter
100 Pringle Avenue, Suite 500
Walnut Creek, CA 94596
Tel: (925) 210-2800
Email: cglynn@glynnfinley.com
Daniel M. Poniatowski Attorney for Hodari
Richard F.Munzinger
SHARTSIS FRIESE
One Maritime Plaza, 18th Floor
San Francisco, CA 94111
Tel: (415) 773-7387
Email: dponiatowski@sflaw.com
J. Russell Cunningham Attorney for Bankruptcy Trustee
DESMOND, NOLAN, LIVAICH &
CUNNINGHAM
15th & S Building
1830 15th Street
Sacramento, CA 95811
Tel: (916) 443-2051; (916) 389-8501 direct;
(916) 501-2051 cell
Email: rcunningham@dnlc.net