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1 Lisa C. McCurdy (SBN 228755)
Joy Chen (SBN 316842)
2 GREENBERG TRAURIG, LLP
1840 Century Park East, Suite 1900
3 Los Angeles, California 90067-2121
Telephone: (310) 586-7700
4 Facsimile: (310) 586-7800
mccurdyl@gtlaw.com
5 chenjoy@gtlaw.com
6 Attorneys for Plaintiff SEAN DUGGAN,
individually and derivatively on behalf of
7 the Duggan Family Limited Partnership
8
9 SUPERIOR COURT OF THE STATE OF CALIFORNIA
10 COUNTY OF SONOMA
11
SEAN DUGGAN, an individual, on his CASE NO. SCV-268905
12 own behalf and derivatively on behalf of
the Duggan Family Limited Partnership; Assigned for all purposes to Hon. Arthur A. Wick,
13 Dept. 17
Plaintiff,
14 DECLARATION OF LISA C. MCCURDY IN
v. SUPPORT OF OPPOSITION TO
15 DEFENDANT THE DUGGAN FAMILY
LYNN DUGGAN, an individual; and DOES 1 PARTNERSHIP’S MOTION FOR POSTING
16 through 25, inclusive, OF A BOND
17 Defendants, [Declaration of Sean Duggan; and Opposition to
Motion filed concurrently herewith]
18 -and-
Date: February 16, 2022
19 THE DUGGAN FAMILY LIMITED Time: 3:00 p.m.
PARTNERSHIP, a California Limited Dept: 17
20 Partnership, KELLY MOFFAT, an individual,
Action filed: July 27, 2021
21 Nominal Defendants. Trial date: None set
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DECLARATION OF LISA C. MCCURDY
ACTIVE 62682472v1
1 DECLARATION OF LISA C. MCCURDY
2 I, Lisa C. McCurdy, declare as follows:
3 1. I am an attorney of law and a shareholder at the law firm of Greenberg Traurig, LLP,
4 attorneys for Plaintiff Sean Duggan (“Sean”). Except as stated on information and belief, I have
5 personal knowledge of the facts set forth herein, and could and would competently testify thereto if
6 called upon to do so.
7 2. On January 29, 2021, I responded to a January 21, 2021 correspondence from Defendant
8 Lynn Duggan’s counsel regarding the agreement entered into by Lynn Duggan (“Lynn”) and Kelly
9 Moffat (“Moffat”) wherein Lynn purported to sell 1% of his General Partner interest to Moffat for
10 $125,000 payable in cash (the “January 2021 PSA”). I clarified that Sean was not alleging a payment
11 default, but that the January 2021 PSA impermissibly altered the terms of the loan that the Duggan
12 Family Limited Partnership (the “Partnership”) had made to Lynn, and had impermissibly altered the
13 structure of the First Amendment to the Agreement of Limited Partnership (“Amendment”).
14 Specifically, if the January 2021 PSA were allowed to stand, the Amendment would effectively be
15 revised to provide that, in the event of default, only 2/3 of the General Partnership interest would be
16 forfeited and redistributed, rather than its entirety. I therefore demanded the January 2021 PSA be
17 rescinded. A true and correct copy of my correspondence is attached hereto as Exhibit A.
18 3. On January 30, 2021, I was informed that the sale contemplated by the January 2021 PSA
19 did not occur. A true and correct copy of this correspondence is attached hereto as Exhibit B.
20 4. In February 2021, I requested, on Sean’s behalf, that Poppy Bank (the bank from which
21 the Partnership had borrowed $510,000 to make a loan to Lynn) provide executed documents related to
22 the loan the Partnership had borrowed from the Bank (the “Bank Loan”), and the loan that Lynn had
23 borrowed from the Partnership (the “G.P. Loan”), as these documents had not been given to Sean.
24 These documents included a signed Authorization Notice and a signed Payment Agent Notice. A true
25 and correct copy of this correspondence is attached hereto as Exhibit C.
26 5. Poppy Bank informed me that it was not authorized to provide Sean or me with the
27 requested information. A true and correct copy of this correspondence is attached hereto as Exhibit D.
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DECLARATION OF LISA C. MCCURDY
ACTIVE 62682472v1
1 6. Thus, on April 5, 2021, I noticed another default to Lynn’s counsel. The defaults
2 included: (1) Lynn’s failure to provide the bank with notice of Sean’s authorization to request
3 information (the “Authorization Notice Breach”), (2) Lynn’s failure to give the required payment agent
4 notice required by the Amendment (or breach of it) (the “Payment Agent Notice Breach”), and (3)
5 Lynn’s authorization of non-ratable distributions being made solely for the benefit of the General
6 Partner (the “GP Nonratable Distribution Breach”). A true and correct copy of this correspondence is
7 attached hereto as Exhibit E.
8 7. In response, on April 14, 2021, Lynn’s counsel stated Lynn was making payments on the
9 G.P. Loan by paying $2,000 per month to the Partnership from his “management fee with the balance
10 intended to be debited from Lynn’s share of net profits” and $921.38 from Lynn’s personal funds
11 because “[i]n recent months, Lynn’s share of net profits were insufficient.” Lynn’s counsel claimed the
12 “method of payment was changed to account for pandemic caused reduction in net profits.” A true and
13 correct copy of this correspondence is attached hereto as Exhibit F.
14 8. On April 23, 2021, I demanded that all ratable distributions to the Limited Partners be
15 made, and demanded confirmation that the January 2021 PSA remained rescinded. A true and correct
16 copy of this correspondence is attached hereto as Exhibit G.
17 9. On April 29, 2021, Lynn’s counsel responded simply that Lynn had not authorized a non-
18 ratable distribution to himself, and again claimed that the changed payment method was “mandated by
19 the pandemic and the decrease (virtual elimination) of net income to distribute.” A true and correct copy
20 of this correspondence is attached hereto as Exhibit H.
21 10. On May 24, 2021, I was informed that Lynn and Moffat had proceeded to finalize the
22 sale of the Lynn’s 1% General Partner interest on or about May 20, 2021 (the “May 2021 PSA”), despite
23 our objections and our informing that such a PSA would be considered a default. The purchase price for
24 the 1% General Partner interest was to be $125,000, in cash. A true and correct copy of this
25 correspondence is attached hereto as Exhibit I.
26 11. On May 27, 2021, I informed Lynn’s counsel (yet again) that the May 2021 PSA
27 constituted a breach of the Amendment, and that serious questions remained regarding the apparent non-
28 ratable distributions. A true and correct copy of this correspondence is attached hereto as Exhibit J.
2
DECLARATION OF LISA C. MCCURDY
ACTIVE 62682472v1
1 12. On June 10, 2021, Lynn’s counsel responded that the 1% General Partner interest transfer
2 had taken place, Lynn was unaware of and had not authorized any disproportionate distributions, and
3 that the law does not restrict such transfers. A true and correct copy of this correspondence is attached
4 hereto as Exhibit K.
5 13. On July 21, 2021, I was informed that the G.P. Loan was supposedly “paid off and
6 retired,” and that “[n]ither the partnership property nor Lynn’s interest therein was encumbered to do
7 so.” A true and correct copy of this correspondence is attached hereto as Exhibit L.
8 14. In response, I requested proof that the payoff funding came from sources independent of
9 the Partnership and its assets. A true and correct copy of this correspondence is attached hereto as
10 Exhibit M. No such proof was ever received in response.
11 15. On November 23, 2021, I again requested records demonstrating proper and full payment
12 of the G.P. Loan, including source of funds. A true and correct copy of this correspondence is attached
13 hereto as Exhibit N.
14 16. Counsel for the Partnership responded by providing a deed of reconveyance, indicating
15 Poppy Bank had reconveyed the deed of trust securing the Partnership’s property back to the
16 Partnership. A true and correct copy of this correspondence is attached hereto as Exhibit O. No
17 documentation of proper payment was ever received in response, and has yet to be received to this day.
18 I declare under penalty of perjury that the foregoing is true and correct, and that this declaration
19 was executed on February 2, 2022, in Los Angeles, California.
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/s/ Lisa C. McCurdy
22 Lisa C. McCurdy
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DECLARATION OF LISA C. MCCURDY
ACTIVE 62682472v1
EXHIBIT A
Lisa C. McCurdy
Tel 310.586.6512
Fax 310.586.7800
mccurdyl@gtlaw.com
January 29, 2021
VIA EMAIL AND FIRST-CLASS MAIL
James M. Frassetto
MILLER STARR REGALIA
1331 N. California Blvd.
Fifth Floor
Walnut Creek, CA 94596
James.frassetto@mrslegal.com
Re: Duggan Family Limited Partnership/Notice of Default
Dear Mr. Frassetto:
This firm represents Mr. Sean Duggan in connection with the Duggan Family
Limited Partnership, the First Amendment to Agreement of Limited Partnership
(“Amendment”), and the January 8, 2021 Agreement of Purchase and Sale of General
Partner Interest between your client and Kelly A. Moffat (the “PSA”). Please include
this office on any further correspondence regarding this matter.
We have reviewed your January 21, 2021 letter regarding Mr. Duggan’s
January 15, 2021 Notice of Default, stemming from the PSA. Mr. Duggan appreciates
your timely response. However, most of the response does not address the issues
raised by Mr. Duggan. Indeed, Mr. Duggan has not alleged a payment default.
Rather, the concern and default noted by Mr. Duggan is largely unaddressed in your
letter, with the exception of one factual misstatement that we correct below.
Greenberg Traurig, LLP | Attorneys at Law
1840 Century Park East| Suite 1900 |Los Angeles, California 90067-2121
| T +1 310.586.7700 |F +1 310.586.7800
ACTIVE 55045551v1 www.gtlaw.com
James M. Frassetto
January 29, 2021
Page 2
As you certainly are aware, there are many circumstances in which a default
under, or breach of, the Bank Loan, GP Loan and/or Amendment can occur. 1 As
examples, a material default under the GP Loan occurs if there is a payment default,
acceleration of the Bank Loan, or in the event that the borrower fails to comply with
or perform (1) “any other term, obligation, covenant or condition” contained in the GP
Loan or any related document, or (2) “any term, obligation, covenant or condition
contained in any other agreement between Lender and Borrower,” which includes the
Amendment. 2 The Bank Loan similarly provides that a default occurs if the borrower
fails to comply with or perform (1) “any other term, obligation, covenant or condition”
contained in the GP Loan or any related document, or (2) “any term, obligation,
covenant or condition contained in any other agreement between Lender and
Borrower.” 3 All of these defaults, if uncured, trigger the forfeiture provisions outlined
in the Amendment.
The Amendment was agreed to by the parties to allow for the Bank Loan and
GP Loan only on certain conditions. Not the least of these protections was the
protection provided for in the event of default. In simplest terms, that protection was
to include (among other things) forfeiture of the borrower’s actual general
partnership interest (in its entirety) and a portion of the borrower’s limited
partnership interest, which is to be calculated based upon a contractually agreed-
upon value of the general partnership interest at the time of the Amendment. As a
result of the PSA, that protection has been altered and constitutes an impermissible
1
We note that Mr. Duggan has requested, but has not yet received, final executed
versions of the Bank Loan and GP Loan. This correspondence assumes those
documents mirror the draft forms attached to the Amendment, as the documents
require.
2
We also note that the Bank Loan has a change of ownership provision allowing the
limited partnership to “replace its General Partner to either be Sean Duggan or
Kelly Duggan Moffat.” The PSA does not comport with this permissible change
provision.
3
A default under the Bank Loan may lead to acceleration of the debt, which would
be a further default under the GP Loan.
Greenberg Traurig, LLP | Attorneys at Law
ACTIVE 55045551v1 www.gtlaw.com
James M. Frassetto
January 29, 2021
Page 3
change to the Amendment and, by extension, the Agreement of Limited Partnership
of the Duggan Family Limited Partnership. Specifically, if the PSA is allowed to
stand, the Amendment will effectively be revised to provide that, in the event of
default, 2/3 of the general partnership interest shall be forfeited (rather than its
entirety).
There are other avenues by which Ms. Moffat can lend money to her father if
she chooses to do so, without altering the terms of the Amendment or otherwise
diminishing the interests of the Partnership and/or our client’s interests. The PSA,
however, causes a material and impermissible change to the Amendment. Your
suggestion that the decrease in the general partnership interest value is made up for
by the limited partnership interest is inaccurate, as the limited partnership interest
valuation is calculated based the contractually agreed-upon value at the time of the
Amendment.
The aforementioned change to the Amendment, if uncured, constitutes a
breach of the Amendment and default thereunder, as well as a default under the
terms of the Bank Loan and GP Loan, for the reasons described above. Accordingly,
we reiterate our client’s request for confirmation that the PSA will be rescinded
forthwith. We note that, while there is a 15-day cure period before forfeiture (expiring
on 1/30), the time to cure the default under the GP Loan already has passed, so your
prompt response is required and appreciated.
This correspondence reserves all rights available to Mr. Sean Duggan
(individually and derivatively) both in law and in equity.
Very truly yours,
Lisa McCurdy
Shareholder
Greenberg Traurig, LLP | Attorneys at Law
ACTIVE 55045551v1 www.gtlaw.com
James M. Frassetto
January 29, 2021
Page 4
cc: Sean Duggan (via email)
Lynn Duggan (via email)
Kelly Moffatt (via email)
Greenberg Traurig, LLP | Attorneys at Law
ACTIVE 55045551v1 www.gtlaw.com
EXHIBIT B
From: Jim Frassetto
Sent: Saturday, January 30, 2021 1:29 PM
To: mmccurdy@gtlaw.com
Cc: Lynn C. Duggan (sr.srspi@gmail.com) ; kellyamoffat@gmail.com
Subject: Duggan Family Limited Partnership
Ms.McCurdy: Although your client’s father and sister Lynn Duggan and Kelly Moffat both
dispute the validity of the “Notice of Default’ sent by email 14 days ago, they inform us all
that they have agreed to rescind temporarily the sale of a 1% general partner interest in the
Duggan Family Limited Partnership from Mr. Duggan to Ms. Moffat pending discussions on
this matter next week. I’ll call you on Monday Jim Frassetto
Jim Frassetto
MILLER STARR REGALIA
1331 N. California Blvd., Fifth Floor § Walnut Creek, CA 94596
T 925 935 9400 § F 925 933 4126
james.frassetto@msrlegal.com § www.msrlegal.com
Miller Starr Regalia
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EXHIBIT C
From: McCurdy, Lisa C. (Shld-LA-LT)
To: "sshapiro@poppy.bank"
Cc: "S"; "Jim Frassetto"
Subject: Duggan Family Limited Partnership -- request for information
Date: Friday, February 12, 2021 3:30:00 PM
Attachments: image001.png
image002.png
Dear Scott,
This firm represents Sean Duggan (copied here) in connection with the Duggan Family Limited
Partnership. We make this request on his behalf in his capacity as a limited partner of the Duggan
Family Limited Partnership (“DFLP”). Counsel for Lynn Duggan also is copied here as a courtesy.
Pursuant to Exhibit C of the First Amendment to the Agreement of Limited Partnership of the
Duggan Family Limited partnership, executed in February 2014 (“First Amendment”), we request
that the following documents and information be provided forthwith:
1. All fully executed documents comprising and/or incorporated into the First Amendment,
including exhibits A-D.
2. Confirmation that all payments for all loans and lines of credit pertaining to the First Amendment
and/or the DFLP are current and all provisions have been complied with by the borrower.
3. With provision of the fully executed documents requested here, confirmation that there have
been no modifications to any agreements, loans, notes, other documents related to or part of the
First Amendment (including exhibits A-D), since inception.
4. A copy of executed beneficial ownership certifications with Sean Duggan’s information, as
provided to Poppy.
5. The term sheet of the line of credit (“LOC”) for the DFLP.
Electronic copies are appreciated.
Please confirm receipt of this email and feel free to call me if you would like to discuss.
Best regards,
Lisa C. McCurdy
Shareholder
Greenberg Traurig, LLP
1840 Century Park East | Suite 1900 | Los Angeles, CA 90067-2121
T +1 310.586.6512 |F +1 310.586.0212
mccurdyl@gtlaw.com |www.gtlaw.com | View GT Biography
EXHIBIT D
From: Scott Shapiro
To: McCurdy, Lisa C. (Shld-LA-LT)
Cc: international002@yahoo.com; james.frassetto@msrlegal.com
Subject: RE: Duggan Family Limited Partnership -- request for information
Date: Monday, March 8, 2021 5:28:16 PM
Attachments: image003.jpg
image004.png
image005.png
*EXTERNAL TO GT*
Lisa-
At the point of your last email, I had shared some of the info that we had in our file with Lynn
Duggan and Ed Turner to pass along your way via Mr. Frassetto. Unfortunately, you nor Sean
Duggan are authorized parties on the loans in our system so I must share the data through those
channels. I will see what other info we have in our system per your list below.
Sincerely,
Scott Shapiro
______________________________
Scott Shapiro
VP/Commercial Loan Officer
438 First Street
Santa Rosa, CA 95401
sshapiro@poppy.bank
TEL 707.636.9745
CELL 707.721.2052
WEB www.poppy.bank
From: mccurdyl@gtlaw.com
Sent: Friday, March 5, 2021 3:23 PM
To: Scott Shapiro
Cc: international002@yahoo.com; james.frassetto@msrlegal.com
Subject: RE: Duggan Family Limited Partnership -- request for information
Note: This email is from an external source. Exercise caution with unsolicited messages!
Verify the authenticity of the sender before opening attachments, clicking links, or acting on
requests.
Scott,
It has been three weeks since I sent the email below, and have yet to receive a response.
Please immediately confirm receipt and let us know when we can expect a substantive response.
The below-mentioned Exhibit C addresses any issue of authorization.
Thank you,
Lisa C. McCurdy
Shareholder
Greenberg Traurig, LLP
1840 Century Park East | Suite 1900 | Los Angeles, CA 90067-2121
T +1 310.586.6512 |F +1 310.586.0212
mccurdyl@gtlaw.com |www.gtlaw.com | View GT Biography
From: McCurdy, Lisa C. (Shld-LA-LT)
Sent: Friday, February 12, 2021 3:30 PM
To: 'sshapiro@poppy.bank'
Cc: 'S' ; 'Jim Frassetto'
Subject: Duggan Family Limited Partnership -- request for information
Dear Scott,
This firm represents Sean Duggan (copied here) in connection with the Duggan Family Limited
Partnership. We make this request on his behalf in his capacity as a limited partner of the Duggan
Family Limited Partnership (“DFLP”). Counsel for Lynn Duggan also is copied here as a courtesy.
Pursuant to Exhibit C of the First Amendment to the Agreement of Limited Partnership of the
Duggan Family Limited partnership, executed in February 2014 (“First Amendment”), we request
that the following documents and information be provided forthwith:
1. All fully executed documents comprising and/or incorporated into the First Amendment,
including exhibits A-D.
2. Confirmation that all payments for all loans and lines of credit pertaining to the First Amendment
and/or the DFLP are current and all provisions have been complied with by the borrower.
3. With provision of the fully executed documents requested here, confirmation that there have
been no modifications to any agreements, loans, notes, other documents related to or part of the
First Amendment (including exhibits A-D), since inception.
4. A copy of executed beneficial ownership certifications with Sean Duggan’s information, as
provided to Poppy.
5. The term sheet of the line of credit (“LOC”) for the DFLP.
Electronic copies are appreciated.
Please confirm receipt of this email and feel free to call me if you would like to discuss.
Best regards,
Lisa C. McCurdy
Shareholder
Greenberg Traurig, LLP
1840 Century Park East | Suite 1900 | Los Angeles, CA 90067-2121
T +1 310.586.6512 |F +1 310.586.0212
mccurdyl@gtlaw.com |www.gtlaw.com | View GT Biography
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To reply to our E-mail Administrator directly, send an email to emailnotice@poppy.bank or call (707) 636-
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EXHIBIT E
Lisa C. McCurdy
Tel 310.586.6512
mccurdyl@gtlaw.com
April 5, 2021
VIA EMAIL
James Frassetto
MILLER STARR REGALIA
1331 N. California Blvd., Fifth Floor
Walnut Creek, CA 94596
james.frassetto@msrlegal.com
Re: Duggan Family Limited Partnership
Dear Jim:
Counsel for Poppy Bank (the “Bank”) has refused to provide information to Sean regarding the
$510,000 loan (the “Loan”) made by the Bank to The Duggan Family Limited Partnership
(“DFLP”) pursuant to the First Amendment, dated as of February __, 2014 to DFLP’s
Partnership Agreement (the “First Amendment”). As you know, Section 2.4 of the First
Amendment required DFLP’s General Partner Lynn Duggan (the “GP”) to send a notice to the
Bank in the form attached thereto as Exhibit C authorizing the Bank to provide access to Sean
and Kelly to all Loan files and other matters concerning the status of the Loan upon their written
request (the “Authorization Notice”). However, the Bank advises that it has never received the
Authorization Notice, and it cites that fact as the reason for its refusal to provide information to
Sean with respect to the Loan. The GP’s failure to send the Authorization Notice to the Bank is
a material breach of his obligations under the First Amendment (the “Authorization Notice
Breach”).
In addition, we understand that an automatic payment of $2,921.38 per month has been made to
the Bank by DFLP in payment of the loan. An identical payment is required to be made by the
GP to DFLP pursuant to the terms of the form of promissory note attached as Exhibit B to the
First Amendment (the “GP Note”)(Sean has never received a copy of the original executed GP
Note—please provide us with a copy thereof as soon as possible). Section 2.5.1 of the First
Amendment requires the automatic debit of monies otherwise distributable to the GP on account
of his limited partner interest in order to make payment to the Bank (a “Lynn Duggan LP
Interest Offset Distribution”. Your own letter of January 21, 2021 confirmed that “Lynn’s
share of net rental income will always pay the monthly payment on the GP Loan”. Finally, the
notice attached as Exhibit D to the First Amendment that was required to be sent by the GP to
Selway and Twitchell (the “Payment Agent Notice”) would have (i) instructed them to offset the
monthly payment to the bank against the GP’s share of net rental income on account of his
Greenberg Traurig, LLP | Attorneys at Law
1840 Century Park East| Suite 1900 |Los Angeles, California 90067-2121
| T +1 310.586.7700 |F +1 310.586.7800
www.gtlaw.com
James Frassetto
April 5, 2021
Page 2
limited partner interest and (ii) provided that that instruction could not be revoked, rescinded or
modified without Sean’s approval. However, the attached e-mail correspondence from the GP to
Sean (relevant section highlighted in yellow) states that in fact $2,000 of the payment from the
GP to DFLP has been funded by a dollar for dollar offset against the GP’s $2,000 per month
management fee, while the $921.38 per month balance is being funded to the bank directly by
the GP outside DFLP altogether. If that is in fact what’s occurring, since Sean has never
received notice of revocation or modification of the Payment Agent Notice, it appears that the
Payment Agent Notice was never sent either. The GP’s failure to send the Payment Agent
Notice is a material breach of his obligations under the First Amendment (the “Payment Agent
Notice Breach”).
As you know, the GP stated via email to Partners that distributions to partners would be
halted. However, if in fact the GP’s payments to DFLP are being satisfied via Lynn Duggan LP
Interest Offset Distributions, then each such distribution is a non-ratable distribution being made
solely for the GP’s benefit in direct breach of Section 4.4 of DFLP’s Partnership Agreement (the
“GP Nonratable Distribution Breach”.
This letter constitutes notice that each of the Authorization Notice Breach, the Payment Agent
Notice Breach and the GP Nonratable Distribution Breach is a material default pursuant to
Sections 2.2.1 and 2.2.2 of the First Amendment which must be cured within 15 days.
We look forward to hearing from you.
Best regards,
/s/ Lisa C. McCurdy
Lisa C. McCurdy
Shareholder
Cc: Sean Duggan (via email)
Lynn Duggan (via email)
Kelly Moffatt (via email)
Greenberg Traurig, LLP | Attorneys at Law
www.gtlaw.com
EXHIBIT F
1331 N. California Blvd. T 925 935 9400
Fifth Floor F 925 933 4126
Walnut Creek, CA 94596 www.msrlegal.com
James M. Frassetto
Direct Dial: 925 941 3263
james.frassetto@msrlegal.com
April 14, 2021
VIA E-MAIL
Greenberg Traurig
Attn: Lisa C. McCurdy
1840 Century Park East, Suite 1900
Los Angeles, CA 90067-2121
E-Mail: mccurdyl@gtlaw.com
Re: Duggan Family Limited Partnership
Dear Lisa:
This letter is in response to your letter to the undersigned of April 5, 2021. All
capitalized terms used in this letter shall possess the same meaning ascribed to
those terms in your letter.
First and foremost, neither Lynn nor Kelly can understand why Sean is concerned
about payments on the Loan. The Loan is not in and has never been in default and
the likelihood of default is about zero. Lynn has made 85 or more timely payments
on the Note. As you are aware, DFLP’s property is being actively marketed by a
national brokerage house. Initial responses have been numerous and promising.
This entire matter will be rendered moot upon sale which Lynn expects to occur in
Summer or Fall of 2021.
Please also remember that Sean’s rights under the First Amendment are co-
extensive with those of Kelly. As previously mentioned, we seriously question
Sean’s ability to attempt to exercise those rights without Kelly’s concurrence
(without, in fact, ever asking Kelly for her input). That said, Kelly has informed me
that she is not concerned in any respect with Lynn’s ability to make payments on the
Loan. More to the point, Kelly does not support any position and request made in
your April 5 letter.
With respect to Sean’s specific requests, are enclosed herewith on an updated GP
Notice (which Lynn sent to Mr. Shapiro today). Other than confirming that there is
no default, we fail to see what Sean’s inquiry with the Bank can achieve. Indeed,
the operative language of Section 2.4 is limited to request for Notice of Default only.
There is nothing in the Bank’s loan documents that can assist Sean on any claim
DUGF-48555\2420182.2
Offices:Walnut Creek / San Francisco / Newport Beach
Greenberg Traurig
April 14, 2021
Page 2
made either under this or the prior alleged “notice of default” (which loan documents
were reviewed, amended and approved by counsel representing Sean and Kelly in
2014).
There is no question that Lynn is obligated under the GP Note. Lynn does not know
where the original is located. Enclosed herewith is a replacement signature page
signed by Lynn.
The purported Payment Against Notice Breach and GP Non-ratable Distribution
Breach simply do not exist. Let’s take the second one first as, if this would
constitute a material issue. Please be advised that at no time did Lynn authorize a
non-ratable distribution of net profits to him to pay the Note. Pre-pandemic ratable
distributions were made and Lynn’s share was debited to $2,921.38 to the Bank
paid directly by the property manager. As Lynn informed Kelly and Sean last March
and as allowed by the express terms of Section 2.5.1 of the First Amendment which
allows modification of the method of assuring payment to the Bank with notice to
and approval of Sean and Kelly, the method of payment was changed to account for
pandemic caused reduction in net profits to provide for payment to be made in the
form of paying Lynn’s $2000 management fee with the balance intended to be
debited from Lynn’s share of net profits. In recent months, Lynn’s share of net
profits were insufficient to cover the $921.38, Lynn made up the difference out of his
pocket. At no time did Lynn knowingly authorize a disproportionate allocation of net
proceeds.
It should also be noted that Selway Property Manager CFO Ed Turner previously
sent an email dated February 26, 2021 directly to Sean containing the tax preparer's
reconciliation spreadsheet and the day prior also sent an email to Sean which
detailed the nature of his miscalculation of Lynn's payment during the pandemic in
2020. Mr. Turner advised that Lynn had been unaware of this error and had
immediately made appropriate reimbursement of funds to the DFLP.
Also please note that per the original First Amendment to the Partnership that after
five (5) years from execution of that amendment (February, 2014) the managing
general partner is authorized to increase the management fee from $2000/mo to
$2,250/mo. Lynn has not elected to implement that management fee increase these
past twenty-five (25) months due to the challenging financial times faced by the
partnership.
Both Lynn and Kelly believe the current instructions to the property manager work.
They see no need to change the instructions.
DUGF-48555\2420182.2
Greenberg Traurig
April 14, 2021
Page 3
If you have any question, please contact me.
Very truly yours,
MILLER STARR REGALIA
James M. Frassetto
James Frassetto
JMF:je
cc: Lynn Duggan (w/encl. via email)
Kelly Moffat (w/encl. via email)
DUGF-48555\2420182.2
EXHIBIT B
PROMISSORY NOTE
Principal: $510,000.00
Loan Date: February __, 2014
Maturity: February __, 2024
Borrower: Lynn Duggan
Lender: The Duggan Family Limited Partnership
414 Aviation Blvd.
Santa Rosa, CA 95403
Principal Amount: $510,000.00 Date of Note: February __ 2014
PROMISE TO PAY. Lynn Duggan ("Borrower") promises to pay to The Duggan Family Limited Partnership
("Lender"), in lawful money of the United States of America, the principal amount of Five Hundred Ten
Thousand & 00/100 Dollars ($510,000.00), together with interest on the unpaid principal balance from
February __, 2014, until paid in full.
PAYMENT. Subject to any payment changes resulting from changes in the Index, Borrower will pay this loan in
accordance: with the following payment schedule, which calculates interest on the unpaid principal balances as
.described in the "INTEREST CALCULATION METHOD" paragraph using the interest rates described in this
paragraph: 84 monthly consecutive principal and interest payments in the Initial amount of $2,921.38 each,
beginning April 1, 2014, with interest calculated on the unpaid principal balances using an interest rate Of
5.250%; 35 monthly consecutive principal and interest payments in the initialamount of "$2,921.38
each,::beginning April 1, 2021, with interest calculated on the unpaid principal balances using an interest rate
based on the then monthly average Of weekly average yields on United States Treasury Securities adjusted to a
constant maturity of five (5) years, as published by the Federal Reserve Bank in its Statistical Release H-15
"Selected Interest Rates" (currently 1.650%), plus a margin of 4.000 percentage points, adjusted if necessary for
the minimum and maximum rate limitations for this loan, resulting in an initial interest rate of 5.650%; and one
principal and interest payment of $421,260.49 on March 1, 2024, with interest calculated on the unpaid principal
balances using an interest rate based on the then monthly average of weekly average yields on United States
Treasury Securities adju
Preview
1 Lisa C. McCurdy (SBN 228755) Joy Chen (SBN 316842) 2 GREENBERG TRAURIG, LLP 1840 Century Park East, Suite 1900 3 Los Angeles, California 90067-2121 Telephone: (310) 586-7700 4 Facsimile: (310) 586-7800 mccurdyl@gtlaw.com 5 chenjoy@gtlaw.com 6 Attorneys for Plaintiff SEAN DUGGAN, individually and derivatively on behalf of 7 the Duggan Family Limited Partnership 8 9 SUPERIOR COURT OF THE STATE OF CALIFORNIA 10 COUNTY OF SONOMA 11 SEAN DUGGAN, an individual, on his CASE NO. SCV-268905 12 own behalf and derivatively on behalf of the Duggan Family Limited Partnership; Assigned for all purposes to Hon. Arthur A. Wick, 13 Dept. 17 Plaintiff, 14 DECLARATION OF LISA C. MCCURDY IN v. SUPPORT OF OPPOSITION TO 15 DEFENDANT THE DUGGAN FAMILY LYNN DUGGAN, an individual; and DOES 1 PARTNERSHIP’S MOTION FOR POSTING 16 through 25, inclusive, OF A BOND 17 Defendants, [Declaration of Sean Duggan; and Opposition to Motion filed concurrently herewith] 18 -and- Date: February 16, 2022 19 THE DUGGAN FAMILY LIMITED Time: 3:00 p.m. PARTNERSHIP, a California Limited Dept: 17 20 Partnership, KELLY MOFFAT, an individual, Action filed: July 27, 2021 21 Nominal Defendants. Trial date: None set 22 23 24 25 26 27 28 DECLARATION OF LISA C. MCCURDY ACTIVE 62682472v1 1 DECLARATION OF LISA C. MCCURDY 2 I, Lisa C. McCurdy, declare as follows: 3 1. I am an attorney of law and a shareholder at the law firm of Greenberg Traurig, LLP, 4 attorneys for Plaintiff Sean Duggan (“Sean”). Except as stated on information and belief, I have 5 personal knowledge of the facts set forth herein, and could and would competently testify thereto if 6 called upon to do so. 7 2. On January 29, 2021, I responded to a January 21, 2021 correspondence from Defendant 8 Lynn Duggan’s counsel regarding the agreement entered into by Lynn Duggan (“Lynn”) and Kelly 9 Moffat (“Moffat”) wherein Lynn purported to sell 1% of his General Partner interest to Moffat for 10 $125,000 payable in cash (the “January 2021 PSA”). I clarified that Sean was not alleging a payment 11 default, but that the January 2021 PSA impermissibly altered the terms of the loan that the Duggan 12 Family Limited Partnership (the “Partnership”) had made to Lynn, and had impermissibly altered the 13 structure of the First Amendment to the Agreement of Limited Partnership (“Amendment”). 14 Specifically, if the January 2021 PSA were allowed to stand, the Amendment would effectively be 15 revised to provide that, in the event of default, only 2/3 of the General Partnership interest would be 16 forfeited and redistributed, rather than its entirety. I therefore demanded the January 2021 PSA be 17 rescinded. A true and correct copy of my correspondence is attached hereto as Exhibit A. 18 3. On January 30, 2021, I was informed that the sale contemplated by the January 2021 PSA 19 did not occur. A true and correct copy of this correspondence is attached hereto as Exhibit B. 20 4. In February 2021, I requested, on Sean’s behalf, that Poppy Bank (the bank from which 21 the Partnership had borrowed $510,000 to make a loan to Lynn) provide executed documents related to 22 the loan the Partnership had borrowed from the Bank (the “Bank Loan”), and the loan that Lynn had 23 borrowed from the Partnership (the “G.P. Loan”), as these documents had not been given to Sean. 24 These documents included a signed Authorization Notice and a signed Payment Agent Notice. A true 25 and correct copy of this correspondence is attached hereto as Exhibit C. 26 5. Poppy Bank informed me that it was not authorized to provide Sean or me with the 27 requested information. A true and correct copy of this correspondence is attached hereto as Exhibit D. 28 1 DECLARATION OF LISA C. MCCURDY ACTIVE 62682472v1 1 6. Thus, on April 5, 2021, I noticed another default to Lynn’s counsel. The defaults 2 included: (1) Lynn’s failure to provide the bank with notice of Sean’s authorization to request 3 information (the “Authorization Notice Breach”), (2) Lynn’s failure to give the required payment agent 4 notice required by the Amendment (or breach of it) (the “Payment Agent Notice Breach”), and (3) 5 Lynn’s authorization of non-ratable distributions being made solely for the benefit of the General 6 Partner (the “GP Nonratable Distribution Breach”). A true and correct copy of this correspondence is 7 attached hereto as Exhibit E. 8 7. In response, on April 14, 2021, Lynn’s counsel stated Lynn was making payments on the 9 G.P. Loan by paying $2,000 per month to the Partnership from his “management fee with the balance 10 intended to be debited from Lynn’s share of net profits” and $921.38 from Lynn’s personal funds 11 because “[i]n recent months, Lynn’s share of net profits were insufficient.” Lynn’s counsel claimed the 12 “method of payment was changed to account for pandemic caused reduction in net profits.” A true and 13 correct copy of this correspondence is attached hereto as Exhibit F. 14 8. On April 23, 2021, I demanded that all ratable distributions to the Limited Partners be 15 made, and demanded confirmation that the January 2021 PSA remained rescinded. A true and correct 16 copy of this correspondence is attached hereto as Exhibit G. 17 9. On April 29, 2021, Lynn’s counsel responded simply that Lynn had not authorized a non- 18 ratable distribution to himself, and again claimed that the changed payment method was “mandated by 19 the pandemic and the decrease (virtual elimination) of net income to distribute.” A true and correct copy 20 of this correspondence is attached hereto as Exhibit H. 21 10. On May 24, 2021, I was informed that Lynn and Moffat had proceeded to finalize the 22 sale of the Lynn’s 1% General Partner interest on or about May 20, 2021 (the “May 2021 PSA”), despite 23 our objections and our informing that such a PSA would be considered a default. The purchase price for 24 the 1% General Partner interest was to be $125,000, in cash. A true and correct copy of this 25 correspondence is attached hereto as Exhibit I. 26 11. On May 27, 2021, I informed Lynn’s counsel (yet again) that the May 2021 PSA 27 constituted a breach of the Amendment, and that serious questions remained regarding the apparent non- 28 ratable distributions. A true and correct copy of this correspondence is attached hereto as Exhibit J. 2 DECLARATION OF LISA C. MCCURDY ACTIVE 62682472v1 1 12. On June 10, 2021, Lynn’s counsel responded that the 1% General Partner interest transfer 2 had taken place, Lynn was unaware of and had not authorized any disproportionate distributions, and 3 that the law does not restrict such transfers. A true and correct copy of this correspondence is attached 4 hereto as Exhibit K. 5 13. On July 21, 2021, I was informed that the G.P. Loan was supposedly “paid off and 6 retired,” and that “[n]ither the partnership property nor Lynn’s interest therein was encumbered to do 7 so.” A true and correct copy of this correspondence is attached hereto as Exhibit L. 8 14. In response, I requested proof that the payoff funding came from sources independent of 9 the Partnership and its assets. A true and correct copy of this correspondence is attached hereto as 10 Exhibit M. No such proof was ever received in response. 11 15. On November 23, 2021, I again requested records demonstrating proper and full payment 12 of the G.P. Loan, including source of funds. A true and correct copy of this correspondence is attached 13 hereto as Exhibit N. 14 16. Counsel for the Partnership responded by providing a deed of reconveyance, indicating 15 Poppy Bank had reconveyed the deed of trust securing the Partnership’s property back to the 16 Partnership. A true and correct copy of this correspondence is attached hereto as Exhibit O. No 17 documentation of proper payment was ever received in response, and has yet to be received to this day. 18 I declare under penalty of perjury that the foregoing is true and correct, and that this declaration 19 was executed on February 2, 2022, in Los Angeles, California. 20 21 /s/ Lisa C. McCurdy 22 Lisa C. McCurdy 23 24 25 26 27 28 3 DECLARATION OF LISA C. MCCURDY ACTIVE 62682472v1 EXHIBIT A Lisa C. McCurdy Tel 310.586.6512 Fax 310.586.7800 mccurdyl@gtlaw.com January 29, 2021 VIA EMAIL AND FIRST-CLASS MAIL James M. Frassetto MILLER STARR REGALIA 1331 N. California Blvd. Fifth Floor Walnut Creek, CA 94596 James.frassetto@mrslegal.com Re: Duggan Family Limited Partnership/Notice of Default Dear Mr. Frassetto: This firm represents Mr. Sean Duggan in connection with the Duggan Family Limited Partnership, the First Amendment to Agreement of Limited Partnership (“Amendment”), and the January 8, 2021 Agreement of Purchase and Sale of General Partner Interest between your client and Kelly A. Moffat (the “PSA”). Please include this office on any further correspondence regarding this matter. We have reviewed your January 21, 2021 letter regarding Mr. Duggan’s January 15, 2021 Notice of Default, stemming from the PSA. Mr. Duggan appreciates your timely response. However, most of the response does not address the issues raised by Mr. Duggan. Indeed, Mr. Duggan has not alleged a payment default. Rather, the concern and default noted by Mr. Duggan is largely unaddressed in your letter, with the exception of one factual misstatement that we correct below. Greenberg Traurig, LLP | Attorneys at Law 1840 Century Park East| Suite 1900 |Los Angeles, California 90067-2121 | T +1 310.586.7700 |F +1 310.586.7800 ACTIVE 55045551v1 www.gtlaw.com James M. Frassetto January 29, 2021 Page 2 As you certainly are aware, there are many circumstances in which a default under, or breach of, the Bank Loan, GP Loan and/or Amendment can occur. 1 As examples, a material default under the GP Loan occurs if there is a payment default, acceleration of the Bank Loan, or in the event that the borrower fails to comply with or perform (1) “any other term, obligation, covenant or condition” contained in the GP Loan or any related document, or (2) “any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower,” which includes the Amendment. 2 The Bank Loan similarly provides that a default occurs if the borrower fails to comply with or perform (1) “any other term, obligation, covenant or condition” contained in the GP Loan or any related document, or (2) “any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower.” 3 All of these defaults, if uncured, trigger the forfeiture provisions outlined in the Amendment. The Amendment was agreed to by the parties to allow for the Bank Loan and GP Loan only on certain conditions. Not the least of these protections was the protection provided for in the event of default. In simplest terms, that protection was to include (among other things) forfeiture of the borrower’s actual general partnership interest (in its entirety) and a portion of the borrower’s limited partnership interest, which is to be calculated based upon a contractually agreed- upon value of the general partnership interest at the time of the Amendment. As a result of the PSA, that protection has been altered and constitutes an impermissible 1 We note that Mr. Duggan has requested, but has not yet received, final executed versions of the Bank Loan and GP Loan. This correspondence assumes those documents mirror the draft forms attached to the Amendment, as the documents require. 2 We also note that the Bank Loan has a change of ownership provision allowing the limited partnership to “replace its General Partner to either be Sean Duggan or Kelly Duggan Moffat.” The PSA does not comport with this permissible change provision. 3 A default under the Bank Loan may lead to acceleration of the debt, which would be a further default under the GP Loan. Greenberg Traurig, LLP | Attorneys at Law ACTIVE 55045551v1 www.gtlaw.com James M. Frassetto January 29, 2021 Page 3 change to the Amendment and, by extension, the Agreement of Limited Partnership of the Duggan Family Limited Partnership. Specifically, if the PSA is allowed to stand, the Amendment will effectively be revised to provide that, in the event of default, 2/3 of the general partnership interest shall be forfeited (rather than its entirety). There are other avenues by which Ms. Moffat can lend money to her father if she chooses to do so, without altering the terms of the Amendment or otherwise diminishing the interests of the Partnership and/or our client’s interests. The PSA, however, causes a material and impermissible change to the Amendment. Your suggestion that the decrease in the general partnership interest value is made up for by the limited partnership interest is inaccurate, as the limited partnership interest valuation is calculated based the contractually agreed-upon value at the time of the Amendment. The aforementioned change to the Amendment, if uncured, constitutes a breach of the Amendment and default thereunder, as well as a default under the terms of the Bank Loan and GP Loan, for the reasons described above. Accordingly, we reiterate our client’s request for confirmation that the PSA will be rescinded forthwith. We note that, while there is a 15-day cure period before forfeiture (expiring on 1/30), the time to cure the default under the GP Loan already has passed, so your prompt response is required and appreciated. This correspondence reserves all rights available to Mr. Sean Duggan (individually and derivatively) both in law and in equity. Very truly yours, Lisa McCurdy Shareholder Greenberg Traurig, LLP | Attorneys at Law ACTIVE 55045551v1 www.gtlaw.com James M. Frassetto January 29, 2021 Page 4 cc: Sean Duggan (via email) Lynn Duggan (via email) Kelly Moffatt (via email) Greenberg Traurig, LLP | Attorneys at Law ACTIVE 55045551v1 www.gtlaw.com EXHIBIT B From: Jim Frassetto Sent: Saturday, January 30, 2021 1:29 PM To: mmccurdy@gtlaw.com Cc: Lynn C. Duggan (sr.srspi@gmail.com) ; kellyamoffat@gmail.com Subject: Duggan Family Limited Partnership Ms.McCurdy: Although your client’s father and sister Lynn Duggan and Kelly Moffat both dispute the validity of the “Notice of Default’ sent by email 14 days ago, they inform us all that they have agreed to rescind temporarily the sale of a 1% general partner interest in the Duggan Family Limited Partnership from Mr. Duggan to Ms. Moffat pending discussions on this matter next week. I’ll call you on Monday Jim Frassetto Jim Frassetto MILLER STARR REGALIA 1331 N. California Blvd., Fifth Floor § Walnut Creek, CA 94596 T 925 935 9400 § F 925 933 4126 james.frassetto@msrlegal.com § www.msrlegal.com Miller Starr Regalia MILLER STARR REGALIA CONFIDENTIAL COMMUNICATION This electronic mail message and any attachments are intended only for the use of the addressee(s) named above and may contain information that is privileged, confidential and exempt from disclosure under applicable law. If you are not an intended recipient, or the employee or agent responsible for delivering this e-mail to the intended recipient, you are hereby notified that any dissemination, distribution or copying of this communication is strictly prohibited. If you received this e-mail message in error, please immediately notify the sender by replying to this message or by telephone. Thank you. EXHIBIT C From: McCurdy, Lisa C. (Shld-LA-LT) To: "sshapiro@poppy.bank" Cc: "S"; "Jim Frassetto" Subject: Duggan Family Limited Partnership -- request for information Date: Friday, February 12, 2021 3:30:00 PM Attachments: image001.png image002.png Dear Scott, This firm represents Sean Duggan (copied here) in connection with the Duggan Family Limited Partnership. We make this request on his behalf in his capacity as a limited partner of the Duggan Family Limited Partnership (“DFLP”). Counsel for Lynn Duggan also is copied here as a courtesy. Pursuant to Exhibit C of the First Amendment to the Agreement of Limited Partnership of the Duggan Family Limited partnership, executed in February 2014 (“First Amendment”), we request that the following documents and information be provided forthwith: 1. All fully executed documents comprising and/or incorporated into the First Amendment, including exhibits A-D. 2. Confirmation that all payments for all loans and lines of credit pertaining to the First Amendment and/or the DFLP are current and all provisions have been complied with by the borrower. 3. With provision of the fully executed documents requested here, confirmation that there have been no modifications to any agreements, loans, notes, other documents related to or part of the First Amendment (including exhibits A-D), since inception. 4. A copy of executed beneficial ownership certifications with Sean Duggan’s information, as provided to Poppy. 5. The term sheet of the line of credit (“LOC”) for the DFLP. Electronic copies are appreciated. Please confirm receipt of this email and feel free to call me if you would like to discuss. Best regards, Lisa C. McCurdy Shareholder Greenberg Traurig, LLP 1840 Century Park East | Suite 1900 | Los Angeles, CA 90067-2121 T +1 310.586.6512 |F +1 310.586.0212 mccurdyl@gtlaw.com |www.gtlaw.com | View GT Biography EXHIBIT D From: Scott Shapiro To: McCurdy, Lisa C. (Shld-LA-LT) Cc: international002@yahoo.com; james.frassetto@msrlegal.com Subject: RE: Duggan Family Limited Partnership -- request for information Date: Monday, March 8, 2021 5:28:16 PM Attachments: image003.jpg image004.png image005.png *EXTERNAL TO GT* Lisa- At the point of your last email, I had shared some of the info that we had in our file with Lynn Duggan and Ed Turner to pass along your way via Mr. Frassetto. Unfortunately, you nor Sean Duggan are authorized parties on the loans in our system so I must share the data through those channels. I will see what other info we have in our system per your list below. Sincerely, Scott Shapiro ______________________________ Scott Shapiro VP/Commercial Loan Officer 438 First Street Santa Rosa, CA 95401 sshapiro@poppy.bank TEL 707.636.9745 CELL 707.721.2052 WEB www.poppy.bank From: mccurdyl@gtlaw.com Sent: Friday, March 5, 2021 3:23 PM To: Scott Shapiro Cc: international002@yahoo.com; james.frassetto@msrlegal.com Subject: RE: Duggan Family Limited Partnership -- request for information Note: This email is from an external source. Exercise caution with unsolicited messages! Verify the authenticity of the sender before opening attachments, clicking links, or acting on requests. Scott, It has been three weeks since I sent the email below, and have yet to receive a response. Please immediately confirm receipt and let us know when we can expect a substantive response. The below-mentioned Exhibit C addresses any issue of authorization. Thank you, Lisa C. McCurdy Shareholder Greenberg Traurig, LLP 1840 Century Park East | Suite 1900 | Los Angeles, CA 90067-2121 T +1 310.586.6512 |F +1 310.586.0212 mccurdyl@gtlaw.com |www.gtlaw.com | View GT Biography From: McCurdy, Lisa C. (Shld-LA-LT) Sent: Friday, February 12, 2021 3:30 PM To: 'sshapiro@poppy.bank' Cc: 'S' ; 'Jim Frassetto' Subject: Duggan Family Limited Partnership -- request for information Dear Scott, This firm represents Sean Duggan (copied here) in connection with the Duggan Family Limited Partnership. We make this request on his behalf in his capacity as a limited partner of the Duggan Family Limited Partnership (“DFLP”). Counsel for Lynn Duggan also is copied here as a courtesy. Pursuant to Exhibit C of the First Amendment to the Agreement of Limited Partnership of the Duggan Family Limited partnership, executed in February 2014 (“First Amendment”), we request that the following documents and information be provided forthwith: 1. All fully executed documents comprising and/or incorporated into the First Amendment, including exhibits A-D. 2. Confirmation that all payments for all loans and lines of credit pertaining to the First Amendment and/or the DFLP are current and all provisions have been complied with by the borrower. 3. With provision of the fully executed documents requested here, confirmation that there have been no modifications to any agreements, loans, notes, other documents related to or part of the First Amendment (including exhibits A-D), since inception. 4. A copy of executed beneficial ownership certifications with Sean Duggan’s information, as provided to Poppy. 5. The term sheet of the line of credit (“LOC”) for the DFLP. Electronic copies are appreciated. Please confirm receipt of this email and feel free to call me if you would like to discuss. Best regards, Lisa C. McCurdy Shareholder Greenberg Traurig, LLP 1840 Century Park East | Suite 1900 | Los Angeles, CA 90067-2121 T +1 310.586.6512 |F +1 310.586.0212 mccurdyl@gtlaw.com |www.gtlaw.com | View GT Biography If you are not an intended recipient of confidential and privileged information in this email, please delete it, notify us immediately at postmaster@gtlaw.com, and do not use or disseminate the information. E-MAIL NOTICE This e-mail message is for the sole use of the intended recipient(s) and may contain confidential and/or privileged information. Any review, use, disclosure or distribution by persons or entities other than the intended recipient(s) is prohibited. If you are not the intended recipient, please contact the sender and destroy all copies of the original message. Thank you. Electronic Correspondence cannot be guaranteed to be secure, timely or error free. We do not take responsibility for acting on time-sensitive material. To reply to our E-mail Administrator directly, send an email to emailnotice@poppy.bank or call (707) 636- 9000 and delete this email. EXHIBIT E Lisa C. McCurdy Tel 310.586.6512 mccurdyl@gtlaw.com April 5, 2021 VIA EMAIL James Frassetto MILLER STARR REGALIA 1331 N. California Blvd., Fifth Floor Walnut Creek, CA 94596 james.frassetto@msrlegal.com Re: Duggan Family Limited Partnership Dear Jim: Counsel for Poppy Bank (the “Bank”) has refused to provide information to Sean regarding the $510,000 loan (the “Loan”) made by the Bank to The Duggan Family Limited Partnership (“DFLP”) pursuant to the First Amendment, dated as of February __, 2014 to DFLP’s Partnership Agreement (the “First Amendment”). As you know, Section 2.4 of the First Amendment required DFLP’s General Partner Lynn Duggan (the “GP”) to send a notice to the Bank in the form attached thereto as Exhibit C authorizing the Bank to provide access to Sean and Kelly to all Loan files and other matters concerning the status of the Loan upon their written request (the “Authorization Notice”). However, the Bank advises that it has never received the Authorization Notice, and it cites that fact as the reason for its refusal to provide information to Sean with respect to the Loan. The GP’s failure to send the Authorization Notice to the Bank is a material breach of his obligations under the First Amendment (the “Authorization Notice Breach”). In addition, we understand that an automatic payment of $2,921.38 per month has been made to the Bank by DFLP in payment of the loan. An identical payment is required to be made by the GP to DFLP pursuant to the terms of the form of promissory note attached as Exhibit B to the First Amendment (the “GP Note”)(Sean has never received a copy of the original executed GP Note—please provide us with a copy thereof as soon as possible). Section 2.5.1 of the First Amendment requires the automatic debit of monies otherwise distributable to the GP on account of his limited partner interest in order to make payment to the Bank (a “Lynn Duggan LP Interest Offset Distribution”. Your own letter of January 21, 2021 confirmed that “Lynn’s share of net rental income will always pay the monthly payment on the GP Loan”. Finally, the notice attached as Exhibit D to the First Amendment that was required to be sent by the GP to Selway and Twitchell (the “Payment Agent Notice”) would have (i) instructed them to offset the monthly payment to the bank against the GP’s share of net rental income on account of his Greenberg Traurig, LLP | Attorneys at Law 1840 Century Park East| Suite 1900 |Los Angeles, California 90067-2121 | T +1 310.586.7700 |F +1 310.586.7800 www.gtlaw.com James Frassetto April 5, 2021 Page 2 limited partner interest and (ii) provided that that instruction could not be revoked, rescinded or modified without Sean’s approval. However, the attached e-mail correspondence from the GP to Sean (relevant section highlighted in yellow) states that in fact $2,000 of the payment from the GP to DFLP has been funded by a dollar for dollar offset against the GP’s $2,000 per month management fee, while the $921.38 per month balance is being funded to the bank directly by the GP outside DFLP altogether. If that is in fact what’s occurring, since Sean has never received notice of revocation or modification of the Payment Agent Notice, it appears that the Payment Agent Notice was never sent either. The GP’s failure to send the Payment Agent Notice is a material breach of his obligations under the First Amendment (the “Payment Agent Notice Breach”). As you know, the GP stated via email to Partners that distributions to partners would be halted. However, if in fact the GP’s payments to DFLP are being satisfied via Lynn Duggan LP Interest Offset Distributions, then each such distribution is a non-ratable distribution being made solely for the GP’s benefit in direct breach of Section 4.4 of DFLP’s Partnership Agreement (the “GP Nonratable Distribution Breach”. This letter constitutes notice that each of the Authorization Notice Breach, the Payment Agent Notice Breach and the GP Nonratable Distribution Breach is a material default pursuant to Sections 2.2.1 and 2.2.2 of the First Amendment which must be cured within 15 days. We look forward to hearing from you. Best regards, /s/ Lisa C. McCurdy Lisa C. McCurdy Shareholder Cc: Sean Duggan (via email) Lynn Duggan (via email) Kelly Moffatt (via email) Greenberg Traurig, LLP | Attorneys at Law www.gtlaw.com EXHIBIT F 1331 N. California Blvd. T 925 935 9400 Fifth Floor F 925 933 4126 Walnut Creek, CA 94596 www.msrlegal.com James M. Frassetto Direct Dial: 925 941 3263 james.frassetto@msrlegal.com April 14, 2021 VIA E-MAIL Greenberg Traurig Attn: Lisa C. McCurdy 1840 Century Park East, Suite 1900 Los Angeles, CA 90067-2121 E-Mail: mccurdyl@gtlaw.com Re: Duggan Family Limited Partnership Dear Lisa: This letter is in response to your letter to the undersigned of April 5, 2021. All capitalized terms used in this letter shall possess the same meaning ascribed to those terms in your letter. First and foremost, neither Lynn nor Kelly can understand why Sean is concerned about payments on the Loan. The Loan is not in and has never been in default and the likelihood of default is about zero. Lynn has made 85 or more timely payments on the Note. As you are aware, DFLP’s property is being actively marketed by a national brokerage house. Initial responses have been numerous and promising. This entire matter will be rendered moot upon sale which Lynn expects to occur in Summer or Fall of 2021. Please also remember that Sean’s rights under the First Amendment are co- extensive with those of Kelly. As previously mentioned, we seriously question Sean’s ability to attempt to exercise those rights without Kelly’s concurrence (without, in fact, ever asking Kelly for her input). That said, Kelly has informed me that she is not concerned in any respect with Lynn’s ability to make payments on the Loan. More to the point, Kelly does not support any position and request made in your April 5 letter. With respect to Sean’s specific requests, are enclosed herewith on an updated GP Notice (which Lynn sent to Mr. Shapiro today). Other than confirming that there is no default, we fail to see what Sean’s inquiry with the Bank can achieve. Indeed, the operative language of Section 2.4 is limited to request for Notice of Default only. There is nothing in the Bank’s loan documents that can assist Sean on any claim DUGF-48555\2420182.2 Offices:Walnut Creek / San Francisco / Newport Beach Greenberg Traurig April 14, 2021 Page 2 made either under this or the prior alleged “notice of default” (which loan documents were reviewed, amended and approved by counsel representing Sean and Kelly in 2014). There is no question that Lynn is obligated under the GP Note. Lynn does not know where the original is located. Enclosed herewith is a replacement signature page signed by Lynn. The purported Payment Against Notice Breach and GP Non-ratable Distribution Breach simply do not exist. Let’s take the second one first as, if this would constitute a material issue. Please be advised that at no time did Lynn authorize a non-ratable distribution of net profits to him to pay the Note. Pre-pandemic ratable distributions were made and Lynn’s share was debited to $2,921.38 to the Bank paid directly by the property manager. As Lynn informed Kelly and Sean last March and as allowed by the express terms of Section 2.5.1 of the First Amendment which allows modification of the method of assuring payment to the Bank with notice to and approval of Sean and Kelly, the method of payment was changed to account for pandemic caused reduction in net profits to provide for payment to be made in the form of paying Lynn’s $2000 management fee with the balance intended to be debited from Lynn’s share of net profits. In recent months, Lynn’s share of net profits were insufficient to cover the $921.38, Lynn made up the difference out of his pocket. At no time did Lynn knowingly authorize a disproportionate allocation of net proceeds. It should also be noted that Selway Property Manager CFO Ed Turner previously sent an email dated February 26, 2021 directly to Sean containing the tax preparer's reconciliation spreadsheet and the day prior also sent an email to Sean which detailed the nature of his miscalculation of Lynn's payment during the pandemic in 2020. Mr. Turner advised that Lynn had been unaware of this error and had immediately made appropriate reimbursement of funds to the DFLP. Also please note that per the original First Amendment to the Partnership that after five (5) years from execution of that amendment (February, 2014) the managing general partner is authorized to increase the management fee from $2000/mo to $2,250/mo. Lynn has not elected to implement that management fee increase these past twenty-five (25) months due to the challenging financial times faced by the partnership. Both Lynn and Kelly believe the current instructions to the property manager work. They see no need to change the instructions. DUGF-48555\2420182.2 Greenberg Traurig April 14, 2021 Page 3 If you have any question, please contact me. Very truly yours, MILLER STARR REGALIA James M. Frassetto James Frassetto JMF:je cc: Lynn Duggan (w/encl. via email) Kelly Moffat (w/encl. via email) DUGF-48555\2420182.2 EXHIBIT B PROMISSORY NOTE Principal: $510,000.00 Loan Date: February __, 2014 Maturity: February __, 2024 Borrower: Lynn Duggan Lender: The Duggan Family Limited Partnership 414 Aviation Blvd. Santa Rosa, CA 95403 Principal Amount: $510,000.00 Date of Note: February __ 2014 PROMISE TO PAY. Lynn Duggan ("Borrower") promises to pay to The Duggan Family Limited Partnership ("Lender"), in lawful money of the United States of America, the principal amount of Five Hundred Ten Thousand & 00/100 Dollars ($510,000.00), together with interest on the unpaid principal balance from February __, 2014, until paid in full. PAYMENT. Subject to any payment changes resulting from changes in the Index, Borrower will pay this loan in accordance: with the following payment schedule, which calculates interest on the unpaid principal balances as .described in the "INTEREST CALCULATION METHOD" paragraph using the interest rates described in this paragraph: 84 monthly consecutive principal and interest payments in the Initial amount of $2,921.38 each, beginning April 1, 2014, with interest calculated on the unpaid principal balances using an interest rate Of 5.250%; 35 monthly consecutive principal and interest payments in the initialamount of "$2,921.38 each,::beginning April 1, 2021, with interest calculated on the unpaid principal balances using an interest rate based on the then monthly average Of weekly average yields on United States Treasury Securities adjusted to a constant maturity of five (5) years, as published by the Federal Reserve Bank in its Statistical Release H-15 "Selected Interest Rates" (currently 1.650%), plus a margin of 4.000 percentage points, adjusted if necessary for the minimum and maximum rate limitations for this loan, resulting in an initial interest rate of 5.650%; and one principal and interest payment of $421,260.49 on March 1, 2024, with interest calculated on the unpaid principal balances using an interest rate based on the then monthly average of weekly average yields on United States Treasury Securities adju