Beaver et al v. Tarsadia Hotels et al

Filing 314

ORDER Granting 286 Motion for Final Approval of Class Action Settlement and Judgment; Granting 287 Motion for Attorney Fees; Granting Plaintiffs' Request for Service Awards; Granting Joint 309 Motion Regarding Lien. Signed by Judge Gonzalo P. Curiel on 9/28/17. (All non-registered users served via U.S. Mail Service)(dlg)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA
DEAN BEAVER AND LAURIE
Case No. 11-cv-01842-GPC-KSC
BEAVER, HUSBAND AND WIFE;
et al.,
ORDER:

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Plaintiffs,
v.

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TARSADIA HOTELS, A
CALIFORNIA CORPORATION;
et al.,
Defendants.

1) GRANTING PLAINTIFFS’ MOTION
FOR FINAL APPROVAL OF CLASS
ACTION SETTLEMENT AND
JUDGMENT;
2) GRANTING PLAINTIFFS’
APPLICATION FOR ATTORNEY’S
FEES AND COSTS; AND
3) GRANTING PLAINTIFFS’ REQUEST
FOR SERVICE AWARDS
4) GRANTING JOINT MOTION
REGARDING LIEN
[Dkt. Nos. 286, 287, 309.]

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On August 9, 2017, Plaintiffs Dean Beaver, Laurie Beaver, Steven Adelman,
Abraham Aghachi, Dinesh Gauba, Kevin Kenna, and Veronica Kenna (collectively

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“Plaintiffs”) filed a Motion for Final Approval of Class Settlement and Application for

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Attorneys’ Fees and Costs, and Service Awards. (Dkt. Nos. 286, 287.) Tarsadia

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Defendants1 and Third Party Defendant Greenberg Traurig LLP (“GT”) do not oppose the

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motions. On September 1, 2017, Garden City Group, LLC (“GCG”), the Settlement

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Administrator, filed a declaration regarding exclusions and objections; Plaintiffs filed a

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status report regarding the response to the Notice Program; and GT filed a non-opposition

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to the motion for final approval of class action settlement, application for attorneys’ fees

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and costs, and service awards for class representatives. (Dkt. Nos. 304, 305, 306.) The

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Court held a final approval hearing on September 15, 2017 at 1:30 p.m., pursuant to the

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Preliminary Approval Order dated May 24, 2017. (Dkt. No. 307.) Tyler Meade, Esq.,

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Michael Schrag, Esq., and Michael Reiser, Esq. appeared on behalf of Plaintiffs, Lynn

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Galuppo, Esq. appeared on behalf of Tarsadia Defendants, and Michael McNamara, Esq.,

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Kirsten Spira, Esq. and Wesley Griffith, Esq. appeared on behalf of Third Party Defendant

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Greenberg Traurig, LLP.
Based on the reasoning below, the Court GRANTS Plaintiffs’ motion for final

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approval of class action settlement and judgment and GRANTS Plaintiffs’ application for

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attorneys’ fees and costs, and service awards.

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Procedural Background

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In May 2011, Plaintiffs filed a putative class action alleging that the Tarsadia

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Defendants violated various federal and state laws, including the Interstate Land Sales Full

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Disclosure Act, 15 U.S.C. §§ 1701, et seq. (“ILSA”) and the California Unfair

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Competition Law, Cal. Bus. & Prof. Code §§ 17200, et seq. (“UCL”), in connection with

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the sale of condominium units at the Hard Rock. (Dkt. No. 1.) Specifically, in the

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operative Third Amended Complaint (“TAC”), Plaintiffs alleged, in part, that the Tarsadia

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Defendants violated ILSA by failing to do three things that the statute required: (1) register

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the Hard Rock with the U.S. Department of Housing and Urban Development (“HUD”);

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The remaining Tarsadia Defendants are Tarsadia Hotels, Gregory Casserly, 5th Rock
LLC, and Gaslamp Holdings, LLC.
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(2) obtain and distribute to Class members a HUD property report; and (3) include ILSA-

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specified cure language in the purchase contracts. (Dkt. No. 69, TAC at ¶¶ 8-10.) As a

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result, Plaintiffs and Class members had an absolute two-year right under ILSA to rescind

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their purchase contracts. (Id. at ¶ 10.) The Tarsadia Defendants were required but failed

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to disclose this rescission right to Plaintiffs. (Id. at ¶¶ 11-12.) This constituted the fourth

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ILSA violation and these ILSA violations were the unlawful acts central to Plaintiffs’ UCL

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claim.

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Tarsadia Defendants failed to disclose this rescission right and told all Class

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members that they would lose their substantial deposits if they failed to close escrow on

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their respective condominium units. (Id. at ¶¶ 68-70.) Plaintiffs and most Class members

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closed escrow in the latter half of 2007, when the real estate market in San Diego was

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beginning a steep decline and the lending market was constricting. (Id. at ¶¶ 86-88.)

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Plaintiffs testified that they would have cancelled their purchase contracts prior to closing

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escrow had the Tarsadia Defendants disclosed their rescission rights under ILSA. (Dkt.

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No. 81-1 at 32-33.)

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Tarsadia Defendants disputed liability and class certification through six years of

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vigorous litigation that included extensive fact and expert discovery and motion practice.

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The litigation began with defendants filing four motions to dismiss plus a motion for

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judgment on the pleadings. Defendants did not answer until a year after the case was first

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filed. A year of intensive discovery followed, with defendants producing more than

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400,000 pages that Class Counsel had to review and analyze. (Dkt. No. 273-1, Schrag

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Decl. ¶ 24.) The Parties took more than 20 depositions in 2013. (Id. ¶ 25.)

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In 2013, Plaintiffs moved to certify a class, and Plaintiffs, the Tarsadia Defendants,

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and Playground Destination Properties, Inc. (“Playground”), which is no longer in the

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case, also filed cross-motions for summary judgment. In October 2013, this Court

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accepted Plaintiffs’ arguments that uncontroverted evidence demonstrated that ILSA

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applied and that the Tarsadia Defendants violated it such that an unlawful prong UCL

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violation was established as a matter of law, but nevertheless granted the Tarsadia

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Defendants’ motion for summary judgment on the ground that the UCL claim was barred

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by ILSA’s three-year statute of limitations. (Dkt. No. 128.) The Court further granted

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summary judgment as to Playground. (Id.) This ruling represented a complete loss on the

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merits of the case after two and a half years of intensive litigation.

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This Court’s initial ruling on the statute of limitations followed several district court

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decisions interpreting Silvas v. E*Trade Mortg. Corp., 514 F.3d 1001, 1007 n. 3 (9th Cir.

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2008), to mean that where a plaintiff’s UCL unlawful prong claim is based on a violation

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of a federal law, the federal and not the UCL statute of limitations applies if the time to file

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under the federal statute is shorter. (Dkt. No. 128 at 40-41.) Believing that these decisions

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misinterpreted Silvas, Plaintiffs added appellate counsel Michael Rubin to their team and

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moved for reconsideration based on preemption principles. (Dkt. No. 138.)

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Eight months later, in July 2014, Plaintiffs prevailed on this motion, obtaining

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partial summary judgment on their UCL claim. The Court held that the Tarsadia

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Defendants violated the unlawful prong of the UCL by failing to comply with ILSA’s

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disclosure requirements and that the UCL’s four-year statute of limitations applied to this

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claim. (Dkt. No. 153.)

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In August 2014, Tarsadia Defendants moved for reconsideration or, in the

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alternative, for certification of an interlocutory appeal. (Dkt. Nos. 155, 158.) While this

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motion was pending, Congress amended ILSA to expressly exempt condominiums from

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ILSA’s registration and disclosure requirements. The Tarsadia Defendants argued this

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amendment should be applied retroactively to bar this action. (Dkt. No. 163.) In October

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2014, after extensive briefing on these issues, the Court ruled that the amendment to ILSA

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should not be applied retroactively, but simultaneously certified three issues for

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interlocutory appeal: (1) whether the Hard Rock project is subject to ILSA because its

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condominium units are “lots” to which the Improved Lot Exemption does not apply; (2)

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whether Plaintiffs’ UCL claim is governed by the UCL’s four-year statute of limitations or

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ILSA’s shorter limitations period; and (3) whether Congress intended its 2014 amendment

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to ILSA to apply retroactively to this action. (Dkt. No. 177.) The case was on appeal for

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nearly a year and a half, and on March 10, 2016, the Ninth Circuit affirmed the partial

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summary judgment ruling in Plaintiffs’ favor on all three issues. See Beaver v. Tarsadia

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Hotels, 816 F.3d 1170 (9th Cir. 2016). This ruling firmly established that the UCL statute

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of limitations applies to all UCL actions, including those that “borrow” a federal predicate

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violation with a shorter limitations period. Id. at 1179-1181.

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Meanwhile, while the main litigation was proceeding, Tarsadia Defendants claimed

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in a third-party complaint that GT negligently advised them that ILSA did not apply to the

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Hard Rock, and that any restitution the Tarsadia Defendants may owe Plaintiffs and Class

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members is a result of this malpractice. (Dkt. No. 106-2, Third Party Compl.) In its

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answer, GT denied any wrongdoing whatsoever and raised numerous affirmative defenses.

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(Dkt. No. 140.) This third-party action had been stayed since June 30, 2014, (Dkt. No.

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152), but following remand from the Ninth Circuit, GT moved for permission to join the

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litigation on Tarsadia Defendants’ defense on the two remaining and related issues in the

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case: class certification and remedies. (Dkt. No. 211.) On June 27, 2016, the Court

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granted GT permission to participate in the defense of this main action. (Dkt. No. 218.)

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Earlier, the Court had deferred its ruling on whether to certify a class. (Dkt. No.

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108.) Plaintiffs filed a renewed motion for class certification on July 1, 2016. (Dkt. No.

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219.) The Tarsadia Defendants and GT opposed, focusing primarily on the contention that

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Plaintiffs’ proposed method for calculating UCL restitution was prohibited under Ninth

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Circuit authority. (Dkt. Nos. 229, 230.)

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The Court stated that it was likely to certify a class on the issue of liability, but

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expressed its view that certifying the issue of remedies for class treatment “was a much

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more complicated question.” (Id. at 4.) The Court explained that it was not yet convinced

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that Plaintiffs had proffered a viable remedies model that “matche[d] the theory of

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liability.” Id. The Court allowed the Tarsadia Defendants and GT to file supplemental

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briefs on Plaintiffs’ proposed restitution model. (Dkt. No. 240.) The Court also

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encouraged the Parties to attempt to settle the case. (Dkt. No. 273-15 at 7) (“Given that

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and given the uncertainty that remains with respect to any number of these issues, I would

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expect and I would hope that the parties would look at all of this uncertainty as a means to

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try to resolve this case amongst yourselves”). In order to pursue mediation and potential

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settlement, the Parties agreed to stay the action to delay the Court’s ruling on class

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certification and the Court granted the requested stay. (Dkt. Nos. 248, 251.)

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The Parties participated in an Early Neutral Evaluation in 2012, an all-day

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mediation in 2013, and a settlement conference with Magistrate Judge Karen Crawford in

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2014, none of which resulted in a settlement. Pursuant to the Court’s suggestion at the

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August 2016 hearing, the Parties engaged in a day-long mediation before Honorable Carl

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J. West (Ret.) of JAMS on December 15, 2016. Although the Parties did not reach

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agreement on that day, they made substantial progress and continued negotiations with

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Judge West’s assistance during the following days. (Dkt. No. 273-1, Schrag Decl. ¶ 26.)

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Upon the Parties’ joint motion, the Court continued the stay through December 22, 2016.

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(Dkt. No. 255.) The Parties ultimately settled the entire case, including the third-party

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claims against GT, on December 21, 2016. Over the next four months, the Parties, with

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assistance from Judge West, then negotiated the detailed terms of the Settlement. (Dkt.

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Nos. 258, 259, 260, 263, 265, 266.) On April 24, 2017, Plaintiffs filed their motion for

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order granting preliminary approval of class action settlement. (Dkt. No. 274.) On May

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24, 2017, the Court granted Plaintiff’s unopposed motion for preliminary approval of class

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action settlement, directing issuance of notice, and setting final approval hearing. (Dkt.

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No. 278.) In compliance with the preliminary approval order, on August 9, 2017,

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Plaintiffs filed the instant motion for final approval of class settlement and application for

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attorneys’ fees and costs and for service awards. (Dkt. Nos. 286, 287.)
Legal Standard

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The Ninth Circuit adheres to a “strong judicial policy that favors settlements,

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particularly where complex class action litigation is concerned.” Class Plaintiffs v. City of

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Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992); see also Rodriguez v. W. Publ’g Corp., 563

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F.3d 948, 965 (9th Cir. 2009) (“We put a good deal of stock in the product of an arms-

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length, non-collusive, negotiated resolution[.]”). “[T]he decision to approve or reject a

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settlement is committed to the sound discretion of the trial judge[.]” Hanlon v. Chrysler

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Corp., 150 F.3d 1011, 1026 (9th Cir. 1998).
Federal Rule of Civil Procedure 23(e) provides that a court may approve a proposed

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settlement “only after a hearing and on finding that it is fair, reasonable, and adequate.”

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Fed. R. Civ. P. 23(e)(2); see also Staton v. Boeing Co., 327 F.3d 938, 959 (9th Cir. 2003).

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In making this determination, a district court must consider a number of factors, including,

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but not limited to:

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the strength of plaintiffs’ case; the risk, expense, complexity, and likely duration
of further litigation; the risk of maintaining class action status throughout the trial;
the amount offered in settlement; the extent of discovery completed, and the stage
of the proceedings; the experience and views of counsel; the presence of a
governmental participant; and the reaction of the class members to the proposed
settlement.

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Staton, 327 F.3d at 959 (internal citation and quotation marks omitted).

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In examining the settlement for “overall fairness,” a court must review the

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settlement “as a whole, rather than the individual component parts.” Hanlon, 150 F.3d at

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1026. A court cannot “delete, modify or substitute certain provisions.” Officers for

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Justice v. Civil Serv. Comm’n of City & Cnty. of San Francisco, 688 F.2d 615, 630 (9th

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Cir. 1982). Rather, “[t]he settlement must stand or fall in its entirety.” Hanlon, 150 F.3d
at 1026.
A.

The Settlement is Fair, Adequate and Reasonable
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The Strength of Plaintiffs’ Case and the Risk, Expense, Complexity, and
Likely Duration of Further Litigation2

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Plaintiffs do not specifically address the risk of maintaining class action status throughout
the trial factor. However, under the analysis in this section, the issue is raised as to
whether the Court would have certified a class based on remedies which would result in
individualized trials on restitution. Thus, the Court concludes that there is risk that
Plaintiffs would not be able to maintain a class action on both liability and remedies if they
proceeded to trial.
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“The value of a class action ‘depends largely on the certification of the class,’ and...

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class certification undeniably represents a serious risk for plaintiffs in any class action

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lawsuit.” Acosta v. Trans Union, LLC, 243 F.R.D. 377, 392 (C.D. Cal. 2007).

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While Plaintiffs’ case is strong in that they overcame substantial hurdles, including

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motions to dismiss, an adverse summary judgment ruling, an interlocutory appeal, and

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they eventually prevailed on liability on the UCL claim, major risks in further litigation of

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this action remain. First, whether the Court would certify a class and, if so, whether

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certification would extend to both liability and remedies remains uncertain.

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Certification of a liability-only class would create a complex, uncertain and
expensive process for obtaining individualized restitution for absent class members. It
would force the parties to spend considerable time and resources on a remedies trial,
including engaging expert witnesses for updated reports on the fluid values of Plaintiffs’
and Class members’ units. In addition, a trial and any post-trial motions and appeals
would also further delay the resolution of this case, which was initiated in May 2011.
Moreover, there is still the possible risk that the Court could deny class certification
altogether and the case would dwindle from an action involving a class of approximately
360 unit purchasers, or groups of unit purchasers, to merely purchasers of four units.
Most significantly, Plaintiffs faced great risk as to what remedies model the Court

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would ultimately adopt. Plaintiffs believe their core restitution model, calculated by

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restoring Plaintiffs’ purchase amounts and then, to avoid a windfall, applying appropriate

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setoffs such as the current value of the units, is both permissible under the UCL and best

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fits the facts of this unique case. See Spann v. J.C. Penney Corp., No. SA CV 12-215

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FMO(RNBx), 2015 WL 1526559 (C.D. Cal. 2015); People v. Superior Court (Jayhill), 9

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Cal. 3d 283 (1973). The Tarsadia Defendants and GT, however, have strenuously argued

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that this methodology would not be appropriate under Pulaski & Middleman, LLC v.

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Google, 802 F.3d 979 (9th Cir. 2015) and In re Tobacco Cases II, 240 Cal. App. 4th 779

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(2015). Specifically, they argue that under the UCL, Plaintiffs and Class members are only
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entitled to the difference between the purchase prices they paid and the market value of the

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units at the time of purchase. (Dkt. No. 229 at 15-20; Dkt. No. 230 at 11-12.) Since the

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Tarsadia Defendants further contend that the market value at the time of purchase was

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equivalent to the purchase prices paid, they contend that restitution would amount to zero.

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(Dkt. No. 230 at 11-12.) It is not clear which method the Court would apply.

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Moreover, there is a question as to whether Plaintiffs are entitled to prejudgment

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interest. While Plaintiffs sought prejudgment interest, the Tarsadia Defendants and GT

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claimed that the UCL did not allow any and further argued that the Court should apply

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equitable offsets far greater than what Plaintiffs would have proposed at a restitution trial.

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Lastly, there is the additional risk that the Tarsadia Defendants would seek
attorneys’ fees and costs from the Class Representatives, and that Class Representatives
and Class Counsel would be named in a malicious prosecution lawsuit. (Dkt. No. 273-1,
Schrag Decl. ¶ 21.) In fact, the named plaintiffs in other cases have suffered significant
financial consequences from litigation arising out of the Hard Rock. See Salameh v.
Tarsadia Hotel, No. 09cv2739-GPC(BLM), 2014 WL 3797276 (S.D. Cal. Mar. 25, 2014)
($405,371.25 in attorneys’ fees awarded); Royalty Alliance, Inc. v. Tarsadia Hotels, 2014

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WL 2212492 (Cal. App. 2014) (nearly $1.2 million in attorneys’ fees awarded); Salameh

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v. 5th and K Master Assoc., 2016 WL 4529438 (Cal. App. 2016) (over $3.6 million in

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attorneys’ fees awarded); Tarsadia Hotels v. Aguirre & Severson, San Diego Superior

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Court Case No. 37-2016-00044390, (action for malicious prosecution). In yet another

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case, Bell v. Tarsadia Hotels, San Diego Superior Court No. 37-2010-00096618, Tarsadia

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Hotels and 5th Rock LLC unsuccessfully sought attorneys’ fees and costs from the

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Plaintiffs here after they dismissed that case, which was filed by other counsel, in order to

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bring the present case. (Dkt. No. 273-1 Schrag Decl. ¶ 22; see also Dkt. No. 273-14

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(February 13, 2013 letter from counsel for the Tarsadia Defendants threatening to sue

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Class Counsel for malicious prosecution.)

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In sum, while Plaintiffs have a strong case, in this equitable action, there is no clear

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cut remedies model. Therefore, the Class faced serious risk in continuing to litigate this

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action against defendants who had a track record of success and aggression. These factors

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weigh in favor of final approval.

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2.

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The amount in Settlement “is generally considered the most important, because the

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critical component of any settlement is the amount of relief obtained by the class.” Bayat

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v. Bank of the West, No. C–13–2376 EMC, 2015 WL 1744342, at *4 (N.D. Cal. Apr. 15,

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2015) (citation omitted). A settlement is not judged against only the amount that might

The Amount Offered in Settlement

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have been recovered had the plaintiff prevailed at trial; nor must the settlement provide full

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recovery of the damages sought to be fair and reasonable. See Linney v. Cellular Alaska

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P’ship, 151 F.3d 1234, 1242 (9th Cir. 1998). “Naturally, the agreement reached normally

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embodies a compromise; in exchange for the saving of cost and elimination of risk, the

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parties each give up something they might have won had they proceeded with litigation.”

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Officers for Justice v. Civil Serv. Comm’n of City & Cnty. of San Francisco, 688 F.2d

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615, 624 (9th Cir. 1982) (quoting United States v. Armour & Co., 402 U.S. 673, 681

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(1971)). Because “the interests of class members and class counsel nearly always diverge,

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courts must remain alert to the possibility that some class counsel may urge a class

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settlement at a low figure or on a less-than-optimal basis in exchange for red-carpet

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treatment on fees.” In re HP Inkjet Printer Litig., 716 F.3d 1173, 1178 (9th Cir. 2013)

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(internal quotation marks, citation, and footnote omitted).

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Here, the proposed Settlement of $51,150,000 offers the Class a significant and

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certain cash award without further delay. Plaintiffs’ proposed restitution model involved

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restoring the aggregate purchase price paid less the current value of the unit, if still owned,

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the resale price, if sold by the Class member, or the loan amount, if the Class member lost

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the unit to foreclosure. Excluding prejudgment interest, the total amount of the core

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restitution sought is approximately $69 million. (Dkt. No. 273-1, Schrag Decl. ¶ 10.) The

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gross Settlement Fund represents approximately 74% of this sum. Id. The Settlement will
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provide, on average, approximately $95,000 for each condominium unit purchased by

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Class members, after fees and expenses.

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The parties dispute whether prejudgment interest should be awarded in this case,

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and Plaintiffs acknowledge that there are UCL cases that support both sides on this issue.

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See Wallace v. Countrywide Home Loans Inc., No. SACV 08-1463-JST(MLGx), 2013

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WL 1944458, at *7-8 (C.D. Cal. Apr. 29, 2013) (prejudgment interest is a form of

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restitution and is necessary to fully compensate plaintiffs); but see Rodriguez v. RWA

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Trucking Co. Inc., 219 Cal. App. 4th 692 (2013) (prejudgment interest not required under

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the UCL, but is discretionary). The Parties also disagree as to whether, if prejudgment

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interest was awarded, it should be calculated on the net restitution amount, after setoffs, or

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on the sum of the purchase prices paid, before setoffs.

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Based on the risks concerning the restitution the Court would have awarded and the

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results of any appeal of that award, the $51.15 million offered in Settlement is an excellent

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result. See, e.g., Bellinghausen v. Tractor Supply Co., 306 F.R.D. 245, 257 (N.D. Cal.

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2015) (finding that the amount offered in settlement weighed in favor of preliminary

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approval where the common fund amounted to between 11 and 27 percent of the total

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potential recovery); Greko v. Diesel U.S.A., Inc., No. 10-CV-02576 NC, 2013 WL

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1789602, at *5 (N.D. Cal. 2013) (approving settlement in which average settlement

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payment amounted to under 3% of gross settlement value). This factor favors final

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approval of the settlement.

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3.

The Extent of Discovery Completed and the Stage of the Proceeding

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When trial is near, extensive discovery has been completed, and issues have been

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thoroughly litigated, the extent of discovery and the stage of the proceedings weigh in

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favor of the proposed settlement. Low v. Trump Univ., LLC, --F. Supp. 3d --, 2017 WL

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1275191, at * (S.D. Cal. Mar. 31, 2017) (citation omitted). In this case, (1) the Parties

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have completed fact and expert discovery, including a review of over 400,000 pages and

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taking or defending 20 depositions, (2) there is a judgment in Plaintiffs’ favor on liability

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that has been affirmed by the Ninth Circuit and with certiorari denied, (3) the Parties have

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briefed and argued a motion for class certification, and, (4) as noted above, the only major

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task left in the case beyond class certification is a remedies trial. This factor weighs

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strongly in favor of the proposed Settlement.

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4.

The Experience and Views of Class Counsel

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Where “[b]oth Parties are represented by experienced counsel,” the recommendation

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of experienced counsel to adopt the terms of the proposed settlement “is entitled to great

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deal of weight.” In re Immune Response Sec. Litig., 497 F. Supp. 2d 1166, 1174 (S.D.

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Cal. 2007). In particular, “[t]he recommendations of plaintiffs’ counsel should be given a

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presumption of reasonableness.” In re Omnivision Techs., Inc., 559 F. Supp. 2d 1036,

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1043 (N.D. Cal. 2008) (internal citation and quotation marks omitted).
As noted in the preliminary approval order, the Court recognized significant

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knowledge and experience in handling class action litigation, including in-depth

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knowledge in cases arising under ILSA. (Dkt. No. 278 at 10.) Each Class Counsel

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strongly believes that the Settlement provides a fair and advantageous benefit to the Class.

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Thus, this factor weighs in favor of final approval.

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5.

The Presence of a Governmental Participant

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No governmental agency participated in this litigation or Settlement. After the

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Court preliminarily approved the Settlement, the Tarsadia Defendants sent CAFA notices

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to the California Attorney General, Consumer Law Section, and the United States Attorney

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General. See 28 U.S.C. § 1715; (Dkt. No. 275.) To the Parties’ knowledge, no

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governmental agency has objected to the Settlement which weighs in favor of the

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settlement. Schuchardt v. Law Office of Rory W. Clark, 314 F.R.D. 673, 685 (N.D. Cal.

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2016).

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6.

The Reaction of Class Members

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No objections have been filed to the Settlement and one class member has elected to

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opt-out. (Dkt. No. 304, Brasefield Decl. ¶¶ 4, 5.) To date, seventeen Class members have

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submitted letters to the Court stating they support the Settlement and hope the Court

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approves it. (Dkt. Nos. 282-83; 288-92; 294-303.) According to Class Counsel, class

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members’ reaction to the Settlement has been overwhelmingly positive based on his

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conversations with approximately a dozen Class members who have all expressed support

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for the Settlement. (Dkt. No. 287-1, Meade Decl. ¶¶ 16-17.) This factor supports final

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approval.

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In sum, based on a review of the factors, the Court concludes that the Settlement is

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fair, adequate, and reasonable.

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B.

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Request for Class Representative Incentive Awards
Plaintiffs seek four service awards of $50,000, paid from the common fund to Class

Representatives on a per-unit basis and include (1) Mr. Gauba, (2) Kevin and Veronica
Kenna, (3) Dean and Laurie Beaver, and (4) Messrs. Adelman and Aghachi Brown.
Incentive awards are designed to “compensate class representatives for work done

12

on behalf of the class, to make up for financial or reputational risk undertaken in bringing

13

the action, and, sometimes, to recognize their willingness to act as a private attorney

14

general.” Rodriguez v. West Publ’g Corp., 563 F.3d 948, 958–59 (9th Cir. 2009).

15

“Incentive awards are fairly typical in class action cases,” but are ultimately

16

“discretionary.” Id. at 958. In deciding whether to approve an incentive award, courts

17

consider factors including:

18
19
20
21
22

1) the risk to the class representative in commencing suit, both financial and
otherwise; 2) the notoriety and personal difficulties encountered by the class
representative; 3) the amount of time and effort spent by the class
representative; 4) the duration of the litigation and; 5) the personal benefit (or
lack thereof) enjoyed by the class representative as a result of the litigation.

23

Van Vranken v. Atl. Richfield Co., 901 F. Supp. 294, 299 (N.D. Cal. 1995). While most

24

class action service awards are lower, district courts in this circuit and elsewhere have

25

awarded $50,000 or more. Id. at 300 (“Court finds that an incentive award of $50,000 is

26

just and reasonable under the circumstances”); Kifafi v. Hilton Hotels Ret. Plan, 999 F.

27

Supp. 2d 88, 106 (D.D.C. 2013) (approving $50,000 incentive award); McCoy v. Health

28

Net, Inc., 569 F. Supp. 2d 448, 479-80 (D.N.J. 2008) (approving incentive awards of
13
11cv1842-GPC(KSC)

1

$60,000 per plaintiff); Brotherton v. Cleveland, 141 F. Supp. 2d 907, 914 (S.D. Ohio

2

2001) ($50,000 to lead plaintiff); In re Revco Sec. Litig., Nos. 851, 89cv593, 1992 WL

3

118800, *7 (N.D. Ohio 1992) ($200,000 incentive award to named plaintiff); Enterprise

4

Energy Corp. v. Columbia Gas Transmission Corp., 137 F.R.D. 240, 250-51 (S.D. Ohio

5

1991) ($50,000 incentive awards to each of the six named plaintiffs); In re Dun &

6

Bradstreet Credit Servs. Customer Litig., 130 F.R.D. 366, 373-74 (S.D. Ohio 1990) (two

7

incentive awards of $55,000 and three incentive awards of $35,000).

8

In this case, each of the Class Representatives spent over six years assisting the

9

litigation of this case by reviewing the complaint, responding to written discovery and

10

producing documents, being deposed by defense counsel, and reviewing and approving the

11

settlement. (Dkt. No. 287-1, Meade Decl. ¶¶ 3-8, 12.) Plaintiffs also stayed in touch with

12

Class Counsel throughout the litigation. (Id. ¶ 12.) Mr. Kenna attended the settlement

13

conference with the Magistrate Judge Crawford. (Id.) Mssrs. Kenna, Aghachi and Gauba

14

also attended the 2016 mediation before Judge West. (Id.)

15

Most importantly, all Class Representatives brought this action in the face of a very

16

real risk that the Tarsadia Defendants would seek attorneys’ fees from them, as they have

17

successfully done in other actions arising out of the Hard Rock. The Class Representatives

18

here were among the many plaintiffs in Bell v. Tarsadia Hotels, (San Diego Superior Court

19

No. 37-2010-00096618). After the Bell court granted defendants’ demurrer, counsel for

20

plaintiffs in Bell encouraged their clients to sign releases in exchange for a waiver of

21

attorneys’ fees and costs because the defendants in the Salameh case that the Bell case was

22

modeled after had just filed a motion seeking $800,000 in attorneys’ fees. Most of the

23

plaintiffs in Bell signed a settlement agreement dismissing their claims with prejudice in

24

exchange for Tarsadia waiving costs and attorneys’ fees. (Dkt. No. 287-1, Meade Decl. ¶

25

3, Ex. 1.) Despite the obvious risk of a fee motion, the Class Representatives chose not to

26

sign the settlement agreement in Bell so that they could bring this class action. (Id. ¶ 4.)

27

They believed in the ILSA-based claims and stepped forward for the Class at great

28

financial peril to themselves. After this action was filed, Tarsadia filed a motion in Bell

14
11cv1842-GPC(KSC)

1

seeking $63,000 in attorneys’ fees from the Class Representatives. Class Counsel,

2

appearing specially in Bell, defeated this fee motion on September 2, 2011. (Id. ¶ 5.)

3

Then, in three later cases Tarsadia successfully obtained attorneys’ fees from

4

plaintiffs. In Salameh v. Tarsadia Hotels, (S.D. Cal. Case No. No. 09-cv-2739) (“Salameh

5

I”), upon which Bell was modeled, the plaintiffs filed a securities fraud class action against

6

Tarsadia, arising out of the development of the Hard Rock. The district court dismissed the

7

claims before a class was certified and the Ninth Circuit affirmed. Salameh v. Tarsadia

8

Hotel, 726 F.3d 1124 (9th Cir. 2013). The district court then ordered plaintiffs to pay

9

Tarsadia $405,371 in attorneys’ fees. Salameh v. Tarsadia Hotel, No. 09cv2739-

10

GPC(BLM), 2014 WL 3797283, at *1 (S.D. Cal. July 31, 2014).

11

Similarly, the plaintiffs in Royalty Alliance, Inc. v. Tarsadia Hotels, 2014 WL

12

2212492 (Cal. App. 2014), were ordered to pay the Tarsadia over $1.1 million in

13

attorneys’ fees after they lost summary judgment on securities, fraud, and UCL claims

14

stemming from the Hard Rock. In Salameh v. 5th and K Master Assoc., Inc., 2016 WL

15

4529438 (Cal. App. 2016) (“Salameh II”), the California state court ordered the plaintiffs

16

to pay Tarsadia $3.5 million in attorneys’ fees and this award was affirmed on appeal.

17

Under these circumstances, the service awards of $50,000 to the Class

18

Representatives are fair and reasonable in light of the extraordinary risks they accepted and

19

the time and effort they expended for the benefit of the Class. The Court grants Plaintiffs’

20

request for class representative incentive awards.

21

C.

Application for Attorneys’ Fees and Costs

22

Class counsel seek attorneys’ fees in the amount of $17,050,000 representing one-

23

third of the Settlement Fund and reimbursement of their out-of-pocket costs of $195,089.

24

This court has an “independent obligation to ensure that the award, like the

25

settlement itself, is reasonable, even if the parties have already agreed to an amount.” In re

26

Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 941 (9th Cir. 2011). At the fee-

27

setting stage, the interests of the plaintiffs and their attorneys diverge and described as

28

15
11cv1842-GPC(KSC)

1

“adversarial”; therefore, the district court assumes a fiduciary role for the class plaintiffs.

2

In re Mercury Interactive Corp. Sec. Litig., 618 F.3d 988. 994 (9th Cir. 2010).

3

1.

California Law

4

California law governs this fee application because where state law claims

5

predominate, state law applies to determine the right to fees and the method of calculating

6

them. See Mangold v. Cal. Pub. Utilities Comm’n, 67 F.3d 1470, 1478 (9th Cir. 1995).

7

The California Supreme Court recently held that in common fund cases, a trial court may

8

award class counsel a fee out of that fund by choosing an appropriate percentage of the

9

fund. Laffitte v. Robert Half Int’l Inc., 1 Cal. 5th 480, 503-06 (2016). A court “may

10

determine the amount of a reasonable fee by choosing an appropriate percentage of the

11

fund created.” Id. at 503. The trial court has discretion to conduct a lodestar cross-check

12

on a percentage fee or to forgo a lodestar cross-check and use other means to assess the

13

reasonableness of the requested fees. Id. at 506.

14

Here, Class Counsel requests a fee of one-third of the common fund. California

15

courts routinely award attorneys’ fees of one-third of the common fund. See Laffitte, 1

16

Cal. 5th at 506 (affirming a fee award of one-third of the gross settlement amount); Chavez

17

v. Netflix, Inc., 162 Cal. App. 4th 43, 66 n.11 (2008) (“Empirical studies show that,

18

regardless whether the percentage method or the lodestar method is used, fee awards in

19

class actions average around one-third of the recovery”). “Under the percentage method,

20

California has recognized that most fee awards based on either a lodestar or percentage

21

calculation are 33 percent . . . .” Smith v. CRST Van Expedited, Inc., NO. 10cv1116-

22

IEG(WMC), 2013 WL 163293, at *5 (S.D. Cal. 2013).

23

In Laffitte, the California Supreme Court affirmed a one-third fee award in a related

24

wage and hour class actions that, like this case, involved extensive discovery, contentious

25

law and motion practice, motions for summary judgment, a class certification motion, a

26

subsequent motion for reconsideration, numerous experts, and two full-day mediations.

27

See Laffitte v. Robert Half Int’l Inc., 180 Cal. Rptr. 3d 136, 140 (2014) (discussion of

28

complexity of case), aff’d 1 Cal. 5th at 506. The court considered that class counsel

16
11cv1842-GPC(KSC)

1

litigated the case on a contingency basis, which involved inherent risk and that

2

uncertainties introduced by recent case law injected “significant doubt” that plaintiffs

3

would be able to maintain class certification through trial. Id. at 142-43. The Laffitte court

4

concluded that the $19 million settlement achieved in the face of the numerous risks—both

5

those overcome and those still looming at the time of settlement—supported the 33 1/3%

6

fee. Id. at 140-43, 154.

7

In this case, Class Counsel litigated this action against tenacious and aggressive

8

defense counsel who prevailed in several other actions brought by Hard Rock purchasers.

9

The action involved novel issues under the UCL’s statute of limitations and issues

10

concerning interpretation of ILSA and a recent Congressional amendment to ILSA that

11

could apply retroactively to bar the Class’s claims. Had Class Counsel lost any one of

12

these three issues they would not have been paid for 9,104 hours of work--and would

13

likely have had to defend a malicious prosecution action. (Dkt. No. 287-1, Meade Decl. ¶¶

14

9, 11, 24.) Even after the appellate victory, risks remained as to whether this Court would

15

certify the Class and how to calculate UCL restitution. Achieving a $51.15 million cash

16

settlement which will pay significant amounts to all Class Members in the face of these

17

risks merits the requested one-third fee. In further support, Richard M. Pearl, an expert on

18

attorneys’ fee issues and disputes, opines in his expert declaration that “a fee of 33.3% of

19

the fund for this long, heavily contested but highly successful litigation is certainly

20

reasonable.” (Dkt. No. 287-12, Pearl Decl. ¶ 43.) Considering the results achieved, the

21

requested fees are reasonable.

22

2.

Ninth Circuit Law

23

Class Counsel also argue that the fee request is reasonable under Ninth Circuit

24

precedent. In common fund cases, a district court has discretion to apply either the

25

percentage of the fund method or the lodestar method. Vizcaino v. Microsoft Corp., 290

26

F.3d 1043, 1047 (9th Cir. 2002); In re Wash. Pub. Power Supply Sys. Sec. Litig., 19 F.3d

27

1291, 1295-96 (9th Cir. 1994). The Ninth Circuit has adopted a benchmark of 25% of the

28

total settlement; however, that amount may be “adjusted upward or downward to account

17
11cv1842-GPC(KSC)

1

for any unusual circumstances involved in [the] case.” Campbell v, Best Buy Stores, No.

2

LA CV12-7794 JAK (JEMx), 2016 WL 6662719, at *7 (citing Paul, Johnson, Alston &

3

Hunt v. Graulty, 886 F.2d 268, 273 (9th Cir. 1989)). A court that applies the percentage

4

method may cross-check the reasonableness of the fee by calculating the lodestar. Id.

5

(citing Vizcaino, 290 F.3d at 1050). “The 25% benchmark rate, although a starting point

6

for analysis, may be inappropriate in some cases.” Vizcaino, 290 F.3d at 1048. Any

7

percentage-of-the-fund award “must be supported by findings that take into account all of

8

the circumstances of the case.” Id. In determining whether an adjustment from the

9

benchmark is appropriate, courts in the Ninth Circuit consider the following factors: “(1)

10

the results achieved; (2) the risk undertaken by class counsel in pursuing the case; (3)

11

whether the settlement generated benefits beyond a cash payment; (4) the market rate for

12

similar representations; and (5) the nature of the representation, including whether it was

13

executed on a contingency basis.” Taylor v. Shippers Transport Express, Inc., 2015 WL

14

12658458, at *14 (C.D. Cal. 2015) (citing Vizcaino, 290 F.3d at 1048-50).

15

District courts in this circuit have routinely awarded fees of one-third of the

16

common fund or higher after considering the particular facts and circumstances of each

17

case. “[I]n most common fund cases, the award exceeds [the] benchmark.” In

18

reOmnivision Tech., Inc., 559 F. Supp. 2d 1036, 1047 (N.D. Cal. 2008) (citations

19

omitted); Taylor, 2015 WL 12658458, at *17 (holding that 33% was reasonable given the

20

result, the risk, and counsel’s time investment); Campbell, 2016 WL 6662719, at *10

21

(approving a fee of one-third of the common fund); Millan v. Cascade Water Services,

22

2016 WL 3077710, at *11-12 (E.D. Cal. 2016) (approving an award of 33% of the

23

common fund); Barbosa v. Cargill Meat Solutions Corp., 297 F.R.D. 431, 449 (E.D. Cal.

24

2013) (awarding one-third of the settlement fund). The Ninth Circuit has also upheld

25

awards of one-third of a common fund. See In re Mego Fin. Corp. Sec. Litig., 213 F.3d

26

454, 460 (9th Cir. 2000) (affirming an award of one-third of total recovery); In re Pacific

27

Enters. Sec. Litig., 47 F.3d 373, 379 (9th Cir. 1995) (affirming an award of one-third of a

28

$12 million common fund).

18
11cv1842-GPC(KSC)

1

a.

2

“The overall result and benefit to the class from the litigation is the most critical

3

factor in granting a fee award.” In re Omnivision Techs., 559 F. Supp. 2d at 1046. As

4

discussed above, against a rigorous defense, Class Counsel obtained $51,150,000 for the

5

Class, without reversion of any funds to the Tarsadia Defendants, GT, GT’s insurers, or

6

any other contributing party. (Dkt. No. 273-2 at ¶ 8.7.) Class members will receive, on

7

average, approximately $95,000 in settlement funds on a per-unit basis (after fees and

8

expenses). (Dkt. No. 273-1, Schrag Decl. Decl. ¶ 15.) This represents an excellent result.

9

This factor thus favors an upward adjustment from the 25% benchmark to a fee of 33 and

10

The Result Achieved

1/3%.

11

b.

The Risks of Litigation

12

From the outset, Class Counsel litigated this case in the face of extraordinary risk of

13

non-payment by taking the case on a pure contingency basis and risked receiving zero

14

compensation for their years of work and out-of-pocket costs. That risk of zero

15

compensation was almost realized when the Court granted summary judgment to

16

defendants on statute of limitations grounds. However, Class Counsel persevered, arguing

17

on reconsideration that the predominant interpretation of Silvas was incorrect. Class

18

Counsel’s steadfastness paid off when the Court not only reversed the grant of summary

19

judgment to defendants, but also granted partial summary judgment on the issue of liability

20

to Plaintiffs. But the risks of litigation remained and new risks emerged. The Tarsadia

21

Defendants filed a motion to reconsider, and then Congress unanimously passed and the

22

President signed legislation that removed condominiums from ILSA’s registration and

23

disclosure requirements. The Tarsadia Defendants argued Congress’ intent was to “clarify”

24

existing law such that the amendment applied retroactively. Though this Court rejected

25

the Tarsadia Defendants’ various arguments, it certified an interlocutory appeal which the

26

Ninth Circuit accepted. Class Counsel then briefed and argued several complex issues

27

before the Ninth Circuit such as the statute of limitations issue, retroactivity, whether to

28

uphold 12 C.F.R. § 1010.5, and whether Plaintiffs had exclusive use of the hotel-

19
11cv1842-GPC(KSC)

1

condominium units at the Hard Rock notwithstanding restrictions on occupancy and the

2

Sixth Circuit’s decision in Becherer, 127 F.3d 478. Beaver, 816 F.3d 1170.

3

After remand, at the August 2016 hearing on Plaintiffs’ renewed motion to certify,

4

the Court observed that the Court and the Parties “have made some law along the way;”

5

and also warned that “[t]here’s been no shortage of novel issues,” suggesting that

6

significant issues and risks remained. (Dkt. No. 273-15 (8/18/16 Trans.) at 5.) Indeed,

7

Class Counsel achieved this settlement even after the Court noted that another issue of first

8

impression -- the question of a proper remedy -- “isn’t as simple as presented by the

9

plaintiffs,” that it was likely to consider the recent Congressional amendment removing the

10

underlying illegality in fashioning an equitable remedy, and more ominously that it had not

11

yet decided that Plaintiffs had a viable remedies model that matches the theory of liability.

12

(Id. at 4-5.) Both the Tarsadia Defendants and GT capitalized on the Court’s invitation for

13

further briefing to file sur-replies arguing that Plaintiffs lacked a viable remedies model.

14

(Dkt. Nos. 245-46.)

15

Even if the court rejected Defendants’ analysis, Plaintiffs remained at risk as the

16

Court noted that Plaintiff had the burden to identify a viable alternative remedies model.

17

(Dkt. No. 273-15 at 5.) If the Court denied class certification, Class Counsel would have

18

received, at most, de minimis fees on the claims relating to the four units owned by the

19

named Plaintiffs. See Acosta v. Trans Union, LLC, 243 F.R.D. 377, 392 (C.D. Cal. 2007)

20

(“The value of a class action ‘depends largely on the certification of the class,’ and …

21

class certification undeniably represents a serious risk for plaintiffs in any class action

22

lawsuit.”). Even if the Court certified a class, there was no guarantee that certification

23

would extend beyond the question of liability; if it did, that Plaintiffs would prevail at the

24

remedies trial; or if they did, that the Court’s broad equitable powers to fashion an

25

appropriate remedy would yield significant relief to the Class.

26

Class Counsel also faced the added risk that if the Tarsadia Defendants had

27

prevailed, they would have sued Class Counsel for malicious prosecution, just as they sued

28

other plaintiffs’ attorneys after prevailing in a related case. See Tarsadia Hotels v. Aguirre

20
11cv1842-GPC(KSC)

1

& Severson, 2016 WL 7488351, at *1 (Ct. App. 2016) (affirming dismissal of malicious

2

prosecution complaint in Tarsadia Hotels v. Aguirre & Severson, San Diego Superior

3

Court Case No. 37-2016-00044390). In fact, Tarsadi Defendants specifically threatened to

4

file such a lawsuit. (Dkt. No. 273-1, Schrag Decl. ¶ 9 & Ex. 2 (February 13, 2013 letter

5

from counsel for the Tarsadia Defendants threatening to sue Class Counsel for malicious

6

prosecution).)

7

Class Counsel undertook extraordinary risk in litigating the case for six years

8

against Defendants who have a track record of aggression; thus, this factor supports and

9

upward adjustment.

10

c.

Benefits Beyond a Cash Payment

11

Where class counsel’s performance generates benefits beyond a cash settlement

12

fund, an upward adjustment may be warranted. See Vizcaino, 290 F.3d at 1049 (fact that

13

the litigation benefitted employers and workers nationwide by clarifying the law on worker

14

classification supported upward adjustment). Here, Class Counsel benefitted consumers

15

nationwide by clarifying that where a UCL claim is premised on a violation of federal law,

16

the UCL’s statute of limitations applies. Beaver, 816 F.3d at 1180-81. The UCL’s four-

17

year statute of limitations provides consumers with a viable cause of action even if they

18

are suing based on violations of a federal predicate law with a shorter limitations period

19

that has expired. Id. The Ninth Circuit’s decision in this case also resolved other

20

significant issues, such as whether 12 C.F.R. § 1010.5 imposes a valid limitation on

21

presale contingency clauses, and, therefore, the scope of the Improved Lot Exemption.

22

This issue was particularly important because it was the foundation for GT’s liability and,

23

presumably, the motivating factor behind the firm’s decision to contribute most of the

24

Settlement Fund. According to the Third Party Complaint, GT advised the Tarsadia

25

Defendants that the Improved Lot Exemption to ILSA applied to the Hard Rock. (Dkt.

26

No. 106-2 at 12.) In fact, because the purchase contract included a presale contingency

27

clause that exceeded the duration permitted by 12 C.F.R. § 1010.5, the Improved Lot

28

Exemption was not available to the Tarsadia Defendants. Beaver, 816 F.3d at 1184.

21
11cv1842-GPC(KSC)

1
2

These clarifications in the law will serve a great benefit to the general public, and
supports an upward adjustment to a 33 1/3% fee.

3

d.

The Skill Required and the Quality of Work

4

Class Counsel overcame several hurdles that reflect their skill and experience. For

5

instance, Class Counsel not only won a motion for reconsideration of a summary judgment

6

motion that represented a total loss on the merits, but also obtained summary judgment on

7

the issue of liability for their UCL claim. This win came despite at least six federal district

8

courts interpreting Silvas to hold that in a UCL claim based on federal law, the federal

9

statute of limitations of the controls. (See Dkt. Nos. 128, 146.) Only one district court

10

case had ruled the other way—that absent preemption, the UCL statute of limitations

11

controlled even where the UCL claim was based on federal law. Sonoda v. Amerisave

12

Mortg. Corp., No. C-11-1803 EMC, 2011 WL 2690451, at *9 (N.D. Cal. 2011). Yet, Class

13

Counsel persuasively argued to this Court and the Ninth Circuit that the UCL’s statute of

14

limitations should apply.

15

Class Counsel also prevailed on the issue of whether a 2014 Congressional

16

amendment to ILSA which exempted condominiums from ILSA’s disclosure provisions

17

would apply retroactively to this case even though the title of the amendment indicated

18

that it was meant “to clarify how [ILSA] applies to condominiums.” Beaver, 816 F.3d at

19

1186-87. This Court and the Ninth Circuit agreed with Class Counsel that despite the

20

word “clarify” in the amendment’s title, the amendment was a substantive change in the

21

law that should not be applied to this case. Id. In briefing this issue, Class Counsel

22

exhaustively reviewed HUD’s agency regulations to ILSA and argued that under Chevron

23

deference principles, ILSA applied to condominiums like those at the Hard Rock. (Dkt.

24

No. 287-1, Meade Decl. ¶ 24.)

25

Even after a complete victory on the merits, Class Counsel faced defendants’

26

challenges to their novel remedies model. Although the parties settled before the Court

27

could decide whether Plaintiffs’ remedies model was appropriate, Class Counsel’s briefing

28

and arguments on the matter provided enough leverage to settle the case for over $51

22
11cv1842-GPC(KSC)

1

million. This settlement could not have been achieved without the skill and experience that

2

Class Counsel applied in the face of legal hurdles at every turn. This factor thus supports

3

an upward adjustment from the benchmark.

4

e.

Market Rate for Similar Representation

5

Class Counsel’s fee request of one-third of the common fund is in line with the

6

market rate for similar representation. See In re Consumer Privacy Cases, 175 Cal. App.

7

4th 545, 557 (2009) (a fee award should be “within the range of fees freely negotiated in

8

the legal marketplace in comparable litigation”). Attorneys with comparable skill and

9

experience, and who litigate class actions on a contingency basis routinely charge one-

10

third of the recovery, or 40% or more if the case goes to trial. Fernandez v. Victoria Secret

11

Stores, LLC, No. CV 06-4149-MMM(SHx), 2008 WL 8150856, at *16 n.59 (C.D. Cal.

12

2008) (fees representing one-third of the recovery are justified based on study showing

13

that standard contingency fee rates are 33% if the case settles before trial, 40% if a trial

14

commences, and 50% if trial is completed). In his declaration, Pearl highlights prevailing

15

market rates for attorneys across the state, and opines that Class Counsels’ rates are well

16

within the norm. (Dkt. No. 287-12, Pearl Decl. ¶¶ 8-10, 66-73, Dkt. No. 273-18, Pearl

17

Decl., Ex. F.) Thus, here, where the action was litigated for six years, through a total loss,

18

reconsideration, an interlocutory appeal and to the brink of trial, a one-third fee is

19

reasonable as it is in line with the legal marketplace for contingent fees.

20
21

f.

Contingent Nature of the Representation and the Financial Burden
Carried by Class Counsel

22

Class Counsel took this case on an entirely contingent fee basis against well-

23

represented defendants who have a track record of aggression. “A contingent fee must be

24

higher than a fee for the same legal services paid as they are performed. The contingent fee

25

compensates the lawyer not only for the legal services he renders but for the loan of those

26

services.” Graham v. DaimlerChrysler Corp., 34 Cal. 4th 553, 580 (2004); see also

27

Monterrubio v. Best Buy Stores, L.P., 291 F.R.D. 443, 457 (E.D. Cal. 2013) (“Courts have

28

long recognized that the attorneys’ contingent risk is an important factor in determining

23
11cv1842-GPC(KSC)

1

the fee award and may justify awarding a premium over an attorneys’ normal hourly

2

rates.”). Class Counsel assumed all the financial risk of the case, since the fee arrangement

3

required Class Counsel to bear all of the costs of litigation. Even with the Court’s finding

4

in favor of Plaintiffs on liability, there was still a risk that the Court would agree with

5

defendants’ restitution methodology and award zero in restitution – thus leaving Class

6

Counsel with no remuneration for six years and 9,104 hours of work and the nearly

7

$200,000 they spent over the course of this case. That substantial risk warrants an

8

appropriate fee. Barbosa, 297 F.R.D. at 449 (“Like this case, where recovery is uncertain,

9

an award of one-third of the common fund as attorneys’ fees has been found to be

10

appropriate”). This factor further supports the 33 and 1/3 % fee.

11

3.

Lodestar Cross-Check

12

In applying the percentage-of-the-fund method, a district court has discretion to

13

“double check the reasonableness of the percentage fee through a lodestar calculation.”

14

Spann v. J.C. Penney Corp., 211 F. Supp. 3d 1244, 1264 (C.D. Cal. 2016) (quoting

15

Laffitte, 1 Cal. 5th at 504). Because the lodestar measures counsel’s time investment in

16

the litigation, it provides a check on the reasonableness of the percentage award. Vizcaino,

17

290 F.3d at 1050 (“. . . the lodestar calculation can be helpful in suggesting a higher

18

percentage when litigation has been protracted. Thus, while the primary basis of the fee

19

award remains the percentage method, the lodestar may provide a useful perspective on the

20

reasonableness of a given percentage award.”).

21

In conducting a lodestar cross-check, a court need not exhaustively catalogue and

22

review counsel’s hours, but can instead focus on “the general question of whether the fee

23

award appropriately reflects the degree of time and effort expended by the attorneys.”

24

Spann, 211 F. Supp. 3d at 1265 (quoting Laffitte, 1 Cal. 5th at 505). To calculate the

25

lodestar, courts multiply the number of hours reasonably expended litigating the case by a

26

reasonable hourly rate, and adjusting the lodestar up or down by an appropriate multiplier

27

reflecting “the quality of representation, the benefit obtained for the class, the complexity

28

and novelty of the issues presented, and the risk of nonpayment.” Jasper v. C.R. England,

24
11cv1842-GPC(KSC)

1

Inc., 2014 WL 12577426 (C.D. Cal. 2014) (citing In re Bluetooth Headset Products Liab.

2

Litig., 654 F.3d 935, 941-942 (9th Cir. 2011)).

3

Here, as summarized in a declaration, Class Counsel expended 9,104 hours litigating

4

this action over more than six years, after the exercise of billing discretion. (Dkt. No. 287-

5

2, Meade Decl. ¶¶ 26, 27).

6

The lodestar for each of the law firms total $5,908,280.50. (Dkt. No. 287-1, Meade

7

Decl. ¶¶ 21, 29, 31, 34, 35; see also Dkt. No. 287-19, Schrag Decl.; Dkt. No. 287-21;

8

Rubin Decl.; Dkt. No. 287-22, Chomiak Decl.; Dkt. No. 287-23, Fostvedt Decl.; Dkt. No.

9

287-24, Reiser Decl.) After a review of Class Counsel’s declarations, the Court concludes

10

that the lodegstar amount is reasonable in light of the work performed and the prevailing

11

rates in the community for attorneys of comparable skill, experience and reputation.

12

The one-third fee Class Counsel seeks reflects a multiplier of 2.89 on the lodestar

13

which is reasonable for a complex class action case. See Hopkins v. Stryker Sales Corp.,

14

11CV2786-LHK, 2013 WL 496358, at *4 (N.D. Cal. Feb. 6, 2013) (“Multipliers of 1 to 4

15

are commonly found to be appropriate in complex class action cases.”). In the recent $50

16

million settlement in Spann, Judge Olguin held that a multiplier of 3.07 was “well within

17

the range of reasonable multipliers.” Spann v. J.C. Penney Corp., 211 F. Supp. 3d 1244,

18

1265 (C.D. Cal. 2016); see also Vizcaino, 290 F.3d at 1052–1054 (surveying multipliers in

19

23 class action suits and recognizing that courts applied multipliers of 1.0 to 4.0 in 83% of

20

surveyed cases); Parkinson v. Hyundai Motor Am., 796 F. Supp. 2d 1160, 1170 (C.D. Cal.

21

2010) (observing that “multipliers may range from 1.2 to 4 or even higher”).

22

A cross-check with the lodestar confirms the reasonableness of awarding the 33 and

23

1/3% fee award. See Laffitte, 1 Cal.5th at 496 (“If the implied multiplier is reasonable,

24

then the cross-check confirms the reasonableness of the percentage-based fee”).

25

C.

26

Application for Costs
Class Counsel seek reimbursement of $195,089.00 in out-of-pocket costs incurred

27

during this litigation. “There is no doubt that an attorney who has created a common fund

28

for the benefit of the class is entitled to reimbursement of reasonable litigation expenses

25
11cv1842-GPC(KSC)

1

from that fund.” Ontiveros v. Zamora, 303 F.R.D. 356, 375 (C.D. Cal. 2014) (citation

2

omitted). Class counsel assert that all the expenditures were necessary to Class Counsel’s

3

prosecution of the action and are reasonable considering the action spanned over six years,

4

required expert opinions and survived a Ninth Circuit appeal. After a review of the costs

5

sought by seven firms3, the Court concludes the costs are reasonable and awards Class

6

Counsel $195,089.00 in costs.

7

Conclusion

8

Based on the above, IT IS HEREBY ORDERED that:

9

1.

Based on Plaintiffs’ Motion for Final Approval of Class Settlement, the

10

argument and comments at the final Fairness Hearing, and its further consideration of the

11

factors identified in the Court’s Preliminary Approval Order, the Court certifies the

12

following Class for Settlement purposes only:

13
All individuals and businesses who agreed to purchase condominiumhotel units at the Hard Rock Hotel & Condominiums in San Diego,
California at any time between May 2006 and December 2007 and
ultimately closed escrow on units in the project, with the exception of
(a) the Tarsadia Defendants and their officers, affiliates, directors,
employees and the immediate family members of its officers, directors
and employees (the Tarsadia Defendants have determined this
exception excludes only Units 602, 639 and 1150), (b) those named
plaintiffs in the action entitled Bell et al. v. Tarsadia Hotels et al. (San
Diego Superior Court Case No. 37-2010-00096618) who signed the
Settlement Agreement And Mutual Release in that case, (c) the named
plaintiffs in the action entitled Salameh et al. v. Tarsadia Hotels et al.
(Case No. 09-CV-2739), and (d) Persons who file timely Opt-Outs. The
Settlement Class shall be construed to include purchasers “Subject to
the 2008 Close Defense” and “Subject to the Assignment Defense,” as
those phrases are used in Exhibit A to the Class Member Stipulation
(Dkt. No. 70), provided that they otherwise fall within the definition of
the Settlement Class. Without in any way limiting the foregoing, a list

14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

Until early 2015, Tyler Meade and Michael Shrag practiced as Meade & Schrag, LLP, and then both
continued to work on the case in their new firms, The Meade Firm and Gibbs Law Group, LLP.
3

26
11cv1842-GPC(KSC)

1
2
3

of known Settlement Class members is attached hereto as Exhibit A
(the “Class Member List”).
2.

The Court confirms its appointment of Plaintiffs Dean Beaver, Laurie

4

Beaver, Steven Adelman, Abraham Aghachi, Dinesh Gauba, Kevin Kenna, and Veronica

5

Kenna as Class Representatives. The Court also confirms its appointment of the following

6

five firms to serve as Class Counsel: Reiser Law, P.C.; Gibbs Law Group LLP; The

7

Meade Firm p.c.; Talisman Law PC; and the Fostvedt Legal Group LLC.

8

3.

The Court has reviewed the Declaration of Jacqueline Brasefield Regarding

9

Notice Dissemination, Dkt. No. 279, and finds that Class Notice has been disseminated to

10

the Class in compliance with the Court’s Preliminary Approval Order and that the Notice

11

Program provided the best notice to the Class practicable under the circumstances, fully

12

satisfied due process, met the requirements of Rule 23 of the Federal Rules of Civil

13

Procedure, and complied with all other applicable law. The Court further finds that notice

14

provisions of 28 U.S.C. § 1715 were complied with in this case.

15

4.

Only one class member, Jason Brooks, who was a co-purchaser of Unit 1042,

16

has excluded himself from the Class by submitting a timely Request for Exclusion to the

17

Settlement Administrator. See Dkt. No. 304 (Declaration of Jacqueline Brasefield

18

Regarding Exclusions and Objections). Therefore, Jason Brooks (a) is not a Class member

19

as that term is defined and used herein; (b) shall not be bound by this Final Approval

20

Order or any release provided herein; and (c) shall not be entitled to benefits from the

21

Settlement. No other Class members requested exclusion from the Settlement.

22

5.

Seventeen members of the Class have written to the Court to express their

23

support for the Settlement. (Dkt. Nos. 282-283, 288-292, 294-303.) The Court has not

24

received any objections to the Settlement. (See also Dkt. No. 304 (Brasefield Decl. re

25

exclusions and objections); (Dkt. No. 305 (Class Counsel’s Status Report Regarding

26

Response to Notice Program).) The absence of any objections bars any appeal. (Dkt. No.

27

278 at ¶ 35 (“Any Class member who does not file a valid and timely objection to the

28

Settlement will be deemed to have waived any objections to the Settlement, will be barred

27
11cv1842-GPC(KSC)

1

from speaking or otherwise presenting any views at the Fairness Hearing, and shall be

2

barred from seeking review of the Settlement by appeal or otherwise”).); see also

3

Newberg on Class Actions § 14:13 (5th ed.) (“[I]t is equally clear that a class member

4

who did not object in the district court cannot pursue an appeal. Indeed, she has nothing to

5

appeal because she waived her rights by not objecting below.”); In re UnitedHealth Group

6

Inc. Shareholder Derivative Litigation, 631 F.3d 913, 917 (8th Cir. 2011) (class member

7

must file a timely and proper objection with the district court before appealing a

8

settlement agreement); Aichele v. City of Los Angeles, Case No. CV 12-10863-DMF

9

(FFMx), 2015 WL 12732003, at *6 (C.D. Cal. Sept. 9, 2015) (“Since there have been no

10

objections to the Settlement, there can be no appeals taken”).4

11

6.

No Class member has requested to speak at the Final Fairness Hearing.

12

7.

The Court finds that the Settlement is fair, reasonable, adequate and is in the

13

best interests of the Class, has been entered into in good faith, and should be and hereby is

14

fully and finally approved pursuant to Federal Rule of Civil Procedure 23. The Settlement

15

represents a fair resolution of all claims asserted by the Class Representatives on behalf of

16

the Class, and fully and finally resolves all such claims.

17

8.

The release set forth in the Settlement will become binding and effective on

18

all Class members upon the Effective Date, which under Paragraph 2.8 of the Settlement

19

Agreement will likely be 31 days from the date of this Order given that no Class member

20

filed a timely objection. (Dkt. No. 273-2 at ¶ 2.8.) To avoid ambiguity, these releases,

21
22
23
24
25
26
4

27
28

The Court orders that any party who attempts to file an appeal shall, within 10 days of
filing a notice of appeal, post a bond pursuant to Rule 7 of the Federal Rules of Appellate
Procedure in the amount of $500.00.

28
11cv1842-GPC(KSC)

1

which must be read in light of the broad definitions of “Claims” 5 and “Released Parties,”6

2

read as follows:
11.1 Mutual Releases: Upon the Effective Date, this Settlement
fully, finally and forever extinguishes and releases all Claims held by,
between, and among Plaintiffs, the Settlement Class, Playground
Destination Properties, Inc., the Tarsadia Defendants, and GT against all
Released Parties that arise out of the facts alleged in the First, Second, and
Third Amended Complaints, and/or the Third Party Complaint
(collectively, “Complaint”) filed in the Action, including known and
Unknown Claims which could have been brought in the Action based on
the same set of facts pleaded in the Complaint. The Settlement further
extinguishes any and all Claims, including future and Unknown Claims,
between the Tarsadia Defendants, Playground Destination Properties,

3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

“Claims” means any and all actual or potential claims, actions, causes of action, suits,
counterclaims, cross-claims, third party claims, contentions, allegations, and assertions of
wrongdoing, and any demands for any and all debts, obligations, liabilities, damages
(whether actual, compensatory, treble, punitive, exemplary, statutory, or otherwise),
attorneys’ fees, costs, expenses, restitution, disgorgement, injunctive relief, any other type
of equitable, legal or statutory relief, any other benefits, or any penalties of any type
whatsoever (whether sought by a Party directly or on behalf of a Party by another person),
regardless of when such claims accrue, whether known or unknown, suspected or
unsuspected, contingent or non-contingent, discovered or undiscovered, whether asserted
in federal court, state court, arbitration or otherwise, and whether triable before a judge or
jury or otherwise.
6
“Released Parties” (or, individually, “Released Party”) means Plaintiffs, members of the
Settlement Class, Class Counsel, Playground Destination Properties, Inc., the Tarsadia
Defendants, GT, and GT’s insurers and underwriters, together with their predecessors,
successors (including, without limitation, acquirers of all or substantially all of its assets,
stock, or other ownership interests) and assigns; their respective insurers, the past, present,
and future, direct and indirect, parents (including, but not limited to holding companies),
subsidiaries and affiliates in any capacity of any of the above; and the past, present, and
future principals, trustees, partners, claims administrators, officers, directors, employees,
agents, attorneys, shareholders (including without limitation, Richard Davis, as applicable
to GT), advisors, predecessors, successors (including, without limitation, acquirers of all or
substantially all of their assets, stock, or other ownership interests), assigns,
representatives, heirs, executors, and administrators in any capacity of any of the above.
5

28

29
11cv1842-GPC(KSC)

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

Inc., and GT that in any way relate to the Hard Rock Hotel &
Condominiums in San Diego, California, including but not limited to
claims against or by the Tarsadia Defendants, Playground Destination
Properties, Inc., GT, and/or their respective predecessors, successors
(including, without limitation, acquirers of all or substantially all of its
assets, stock, or other ownership interests) and assigns, insurers, past,
present, and future, direct and indirect parents (including, but not limited
to holding companies), subsidiaries and affiliates in any capacity of any of
the above, and the past, present, and future principals, trustees, partners,
claims administrators, officers, directors, employees, agents, attorneys,
shareholders (including without limitation, Richard Davis, as applicable to
GT), advisors, predecessors, successors (including, without limitation,
acquirers of all or substantially all of their assets, stock, or other
ownership interests), assigns, representatives, heirs, executors, and
administrators in any capacity of the above. Nothing in this Agreement
shall release any insurer from any obligations to defend or indemnify any
Party or non-party to this Agreement with respect to any claims not
encompassed within the Complaint or Third-Party Complaint. Without
limitation, and for the sake of clarity, the claims, counter and cross-claims
of T-2 Three vs. Turner Construction (Orange County Superior Court
Case No. 30-2011-00514568-CU-BC-CJC), specifically are not within
scope of the releases granted herein. The District Court’s Final Approval
Order shall constitute a judgment dismissing the Action with prejudice,
but the District Court shall retain jurisdiction to oversee and carryout the
Settlement.
11.2 Unknown Claims: Consistent with and subject to Section
11.1, the mutual releases contemplated by this Settlement and provided
for in this Agreement extend to Claims that the Parties and Playground
Destination Properties, Inc. do not know or suspect to exist at the time of
the release, which if known, might have affected the decision to enter into
the release (“Unknown Claims”). In releasing their Unknown Claims, the
Parties and Playground Destination Properties, Inc. expressly waive (and
each Class member by operation of law shall be deemed to waive) any
and all protections, provisions, rights and benefits conferred by any law of
the United States or any state or territory of the United States, or principle
of common law, which governs or limits a person’s release of Unknown
Claims, including Section 1542 of the California Civil Code. Section
1542 of the California Civil Code provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH
THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS
30
11cv1842-GPC(KSC)

26

OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
The Parties and Playground Destination Properties, Inc. understand and
acknowledge (and each Class member by operation of law shall be
deemed to have acknowledged) the significance of these waivers of
California Civil Code Section 1542 and/or of any other applicable law
relating to limitations on releases of Unknown Claims. In connection with
such waivers and relinquishment, the Parties and Playground Destination
Properties, Inc. acknowledge (and each Class member by operation of law
shall be deemed to acknowledge) that they are aware that they may
hereafter discover facts in addition to, or different from, those facts which
they now know or believe to be true with respect to the subject matter of
the Settlement, but that they release fully, finally and forever all released
Claims, and in furtherance of such intention, the release will remain in
effect notwithstanding the discovery or existence of any such additional or
different facts. The Parties and Playground Destination Properties, Inc.
acknowledge (and all Class members by operation of law shall be deemed
to acknowledge) that the release of Unknown Claims as set forth herein
was separately bargained for and was a key element of the Settlement.
11.3 Limitation of Release: Consistent with Sections 11.1 and 11.2
above and mentioned here for avoidance of doubt, this Settlement will not
in any way impact: (a) the Tarsadia Defendants’ rights against putative
class members Frank Issa and/or Ray Hammi relating to, in connection
with or arising from any and all judgments, demands, and claims for
attorneys’ fees and costs incurred by the Tarsadia Defendants, and others,
in connection with other litigation (excluding this Action) brought against
them involving the Hard Rock Hotel guestroom condominium units; and
(b) the continuing rights and obligations between GT and its insurers. The
Settlement and this Agreement shall not affect any debts owed by any of
the Class members to the Tarsadia Defendants, and all Class
Representatives and Class members will remain fully obligated on any
and all such debts.
11.4 Three parties that were previously dismissed as defendants in
this Action (B.U. Patel, Tushar Patel, and MKP One, LLC) are not parties
to this Settlement but have agreed to mutual releases with GT and
Playground via a separate agreement.

27

9.

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

28

The Settlement Administrator, Garden City Group, LLC, is hereby directed

to implement and carry out the Settlement in accordance with the terms and provisions

31
11cv1842-GPC(KSC)

1

thereof, Dkt. No. 273-2, Schrag Decl., Ex. 1, including the Distribution Plan, Dkt. No.

2

273-7, Schrag Decl. Ex. E to Settlement Agreement.

3

10.

Class Counsel and the Class Representatives fairly and adequately

4

represented the interests of Class members. The Court finds that Class Counsel’s request

5

for $17,050,000.00 in attorney fees which represents 33 and 1/3% of the Settlement Fund

6

is fair and reasonable, given the high level of risk involved, the result achieved, the high

7

quality of the legal representation, the duration of this case, the novelty of their claim, and

8

the complexity of the issues in this Court and the Court of Appeals. In addition, this Court

9

has cross-checked the fee award and finds that Class Counsel’s combined lodestar of

10

$5,908,280.50 is reasonable under the circumstances of this case and that the 2.89

11

multiplier on this lodestar is fair and reasonable for the reasons discussed above. The

12

Court finds Class Counsel reasonably spent over 9,104 hours representing the Class’s

13

interests over the course of this litigation, that Class Counsel’s hourly rates are reasonable

14

and in line with the prevailing rates in the community for complex class action litigation.

15

The Court further finds that the $195,089 in costs incurred to prosecute the litigation were

16

reasonable. Accordingly, Class Counsel is hereby awarded attorney fees in the amount of

17

$17,050,000.00, and costs in the amount of $195,089.00.

18

11.

The Tarsadia Defendants and GT shall make the payments specified in

19

paragraph 8.1 of the Settlement Agreement within the deadline specified in that paragraph

20

(i.e., 15 days from the date of this Order), and the Settlement Administrator shall

21

distribute the $17,050,000.00 in attorneys’ fees and the $195,089.00 in costs to Class

22

Counsel (in the amounts and in the manner specified by them) within five (5) days of the

23

Effective Date.

24

12.

The Court further finds the requested service awards are fair and reasonable,

25

given the time and effort expended by the Class Representatives on behalf of the Class,

26

and the risk they incurred in pursuing relief on behalf of the Class. The Court awards four

27

$50,000.00 service awards to: (1) Mr. Gauba, (2) Kevin and Veronica Kenna, (3) Dean

28

and Laurie Beaver, and (4) Messrs. Adelman and Aghachi. These incentive awards shall

32
11cv1842-GPC(KSC)

1

be distributed by the Settlement Administrator at the same time as the attorneys’ fees and

2

costs.

3

13.

On August 1, 2017, a Notice of Lien was filed in this case for satisfaction of

4

a money judgment against two Class members (Frank Issa and Ray Hammi) in a separate

5

case, 5th & K Parcel 2 Owners’ Association, Inc. v. Tamer Salameh, et al., San Diego

6

Superior Court Case No, 37-2010-00094424-CUOR- CTL (lead case). Dkt. No. 281 (the

7

“Lien”). At the request of GT and with the agreement of the other parties, the Court

8

confirms that the Lien does not impose any duties or obligations on GT, its insurers, their

9

underwriters and related entities. GT should proceed to honor its payment obligations

10

under the terms of the Settlement Agreement, without regard to the Lien. Should Mr. Issa

11

or Hammi seek relief from the Lien, the Court will address the Lien separately after final

12

approval.

13

14.

There being no just reason for delay, the Court, in the interests of justice,

14

expressly directs the Clerk of the Court to enter this Final Order and Judgment, and

15

hereby decrees that, upon entry, it be deemed a Final Judgment.

16

15.

Without affecting the finality of this Judgment in any way, this Court hereby

17

retains continuing jurisdiction over (a) implementation and administration of the

18

Settlement; (b) further proceedings, if necessary, on applications for attorneys’ fees and

19

costs in connection with the Action and the Settlement; and (c) the Parties and the Class

20

members for the purpose of construing, enforcing, and administering the Settlement

21

Agreement and all orders and judgments entered in connection therewith.

22

IT IS SO ORDERED.

23

Dated: September 28, 2017

24
25
26
27
28

33
11cv1842-GPC(KSC)

BEAVER v. TARSADIA ‐ CLASS MEMBER LIST
Buyer No. 1
Unit No.

Last Name

Buyer No. 2
First Name

First Name

Last Name

Michael
Clarissa
Rene
Christopher
Manuel
Christopher S
Craig  
Cecil 
Steven Don
Jerome
Josef
Michael
Jason
Nicole V
Dinesh
Dean
Thomas

Smith
Povenmire 
Doctolero
Morgan
Diaz

Rosibel
Daniel
Guisela
Rachel
Fernando

Kushen 
Becker
Tang
Kuenster

Buyer No. 3
First Name

Last Name

Buyer No. 4
First Name

Last Name

Buyer No. 5
First Name

Meredith
Elizabeth 
Thomas
Susan

Hand

Last Name

UNITS STILL OWNED BY CLASS MEMBERS
220
222
234
310
312
314
320
322
332
334
338
350
352
354
356
359
408
420
426
427
429
430
431
432
434
438
440
442
503
504
507
510
511
518
520
522
526
530
532
533
535
536
538
541
543
544
546
550
556
559
560
604
605
606
607
608

Smith
McPeck
Doctolero
Morgan 
Martinez
Miller
Kushen
Annett
Tang
Kuenster
Zwass
Feeney
Hand
Simpson‐Galligan
Gauba
Beaver
Kimball
Fifth Street Investors L L C
NCO Properties LLC
Godinez
Trymax, California GP
Marbury‐Hammonds
Schindler
Erskine
Wells
Paniccia
Lapsi
Mauter
Volore
Kass
Schneider
Dogan
Acharya
Hom
Goldstein
Tassiello
Sunabe
Sunabe
Pruski
Hammond
Francescon
Angulo
Baird
Salazar
Salazar
Gay
Durfee
Clayton
Celeste
Hetherington
Rabindranauth
Oriol
Moughan
Cimo 
Modiano
Young

Paul 
Franchesta
Mark 
Joshua
Marc  
Mario
Amar
Keith  
Brandon
Irving
James
Jarrod
Bella
Yau Keung
Eyal
Richard
Jack  
Jack  
Timothy 
Myle
Lewis
Victor
Brian
Laurie 
Laurie 
Stephen
Peter
Kristopher
Leon
Roy
Premnauth
Caesar
John
Joseph
Robert
Seldon

Olivares

Luis

Fitzgerald

Kevin

Frank 

Hand

Kathy

Sheila
Beaver
Kimball

Dobee
Laurie
Lori

Kimball

Casie

Kimball

Kyle

Pensco Trust Co.

McCormick
Jolly

Mark
Kevin

Zabka

Sven

Mackey

Tom

Gibbons

Brendan

Coates

Jay 

Erskine
Wells
Paniccia

Shane
Margaret
Rachel

Erskine
Wells

Kirt
Christopher

Erskine

Charlene

Grieco

Jason

Mauter

Susan

Schneider
Blaise
Johnstone

Candice
Heather 
Jeffrey

Tassiello
Sunabe
Sunabe

Amy
Marian
Marian

Francescon
Angulo
Baird

Kimberly
Laura
Meagan

Ghorbani

Jason

Ghorbani

Adriana

Ritaldato
Durfee
Cortez
Celeste
Hetherington
Zaky
Oriol
Moughan
Cimo
Modiano
Young

Dennis
Susan
Marcos
Lisa
Maria
Mary
Julie
Nicole
Patricia
Nina
Heston

Gay

David

Cortez

Andrew

Cortez

Socorro

Hesel LLC

Page 1 of 7

EXHIBIT A

Buyer No. 6
First Name
Last Name

Buyer No. 1
Unit No.
609
620
626
627
628
630
632
636
638
640
641
642
643
648
650
658
659
701
702
704
708
711
718
726
727
729
730
731
732
738
740
743
744
754
758
802
804
807
809
812
816
818
824
825
826
827
828
829
833
836
837
838
839
840
843
846
854
856
859
902
903

Last Name

First Name
Scolinos
Frank
Bakshi
Uminderjit
Adelman
Steven 
Schneider
Douglas
Chen
Yei‐Huang 
Tayloe
Michael
Berman
Joseph
Friedman
Gregory 
Elbling
Ronald
Mokharti
Mohsen
Viesca Las Vegas LLC (David/Margarita McCain)
Hand
Jason
Schmalle
Joral
Kline
Kelly
Paniccia
Anthony 
Wilson
Brian
Erickson
Michael T.
Rock Daddy LLC
Villasenor
Jose
Villasenor
Jose
Dirkson
Mark Steven
Nye
Troy
Schwartz
Pam
Robertson
Christopher
Parkos
Robert
Terhune
Gentry
Ota
Bowen
Kline
Kelly
Porcelli
Joseph
Ou 
Joy
Pinkerton
William
Cedar Mountain LLC
Garnett
John
Hugo
Jonathon
Berman
Joseph  
Security Fse Ninety‐Eight Inc
Wells
David
Mohler
Floyd
Amadio
Brian
Evans
Ronald
Prime Coordinates, LLC (Sergio Gallego)
Sandrian
Reza
Rowan
Doug
Usui
Mark
Strada
Nelson 
Reese
Donald
Tkach
Adam  
Thuy‐Truong
Lynn
Luttrull
Ronald
ADD  Properties LLC
Valdivieso
Lawrence 
Viola
Alexander
Gregory Wiener, MD Profit Sharing Plan
Nute
James
Kenna
Kevin
Giampaolo
 Michael 
Kouza
Fawaz P.
Pennington
David
Trymax, California GP
Castro
Ernest V
Baker
Kathryn

Last Name
Scolinos
Bakshi
Aghachi
Schneider
Tu
Johnson
Berman
Friedman
Elbling

Buyer No. 2
First Name
Maria
Jagjit
Abraham
Anne Marie
Ahn
Howard
Leslie
Linda
Jacqueline

Last Name

Buyer No. 3
First Name

Scola

Linda 

Hand
Roman‐Schmalle

Frank
Patricia

Hand

Mario
Elizabeth

Paniccia
Mezich

Ronald
Cindy
Sunny

Sloan‐Ortiz

Buyer No. 6
First Name
Last Name

Joshua

Geske

Buyer No. 5
First Name

Jennifer

Susan

Parkos
Terhune
Ota

Rutan

Last Name

Rachel
Daniel

Ortiz
Nye
Stewart

Buyer No. 4
First Name

Kathy

Paniccia
Wilson

Last Name

Donna
Bonita
Alexandra

Gina

Porcelli

Pinkerton

Nicole

Garnett
Bernardo
Berman

Bonnie M
Rainier
Leslie

Milne
Bernardo

Shane
Jennifer

Wells
Freshwater

Donna
Ken

King
Rodriques

Gregory
Brian J

Sedigheh
Rowin

Roya
Jody

Metroyanis

Frank

Metroyanis

Teresa

Horrigan

Sean

Reese
Tkach
Hung Truong
Luttrull
Dungan

Melanie
Angela
Richard   
Kimberly
Richard   

Tosh

Diane

Jan

Vicek

Cuthbert

Raquel

Errol R Korn  Ira
Erickson 
Kenna
Giampaolo

Terry
Veronica
Cristine

Doherty

Sean M.

Pozzi

Matthew S.

Kanafani

Ghassan L.

Baker

Troy

Page 2 of 7

Horrigan

Krista

Buyer No. 1
Unit No.
904
905
911
912
914
916
920
925
927
929
930
931
933
934
936
938
941
942
946
948
952
956
959
1001
1002
1004
1008
1009
1010
1011
1016
1018
1020
1022
1024
1026
1028
1031
1032
1033
1035
1036
1037
1038
1042
1044
1046
1059
1101
1110
1114
1116
1118
1120
1122
1126
1128
1129
1131
1135
1136

Last Name

First Name
Joral
Michael
Daniel
Grant
Joseph
Glenn
Kristofer
Richard
Edward 

Last Name
Roman‐Schmalle

Schmalle
Erickson
Mezich
Upchurch
Gaertner
Gaertner
Casper
Casper
Ong‐Veloso
Roberts
Racofsky
Guanill
Guanill
303 Solutions LLC
Sherif
Oleg
Gonzalez
Ruben A.
Hassen
Sam
Benaron
Joseph
Blankenship
ER Trust (Parham Soroudi, Trustee)
Barrett
Robyn Lynn
Frankel Family Trust (Douglas and Mindi Frankel)
Reed
Foletta
Mark G.
JKE Holdings, Inc. (Erskines)
Darby
Tvorik
Stephen
Tvorik
Woods Family Trust (Barry K Woods  & Diane W. Woods‐Trustees)
Sze
Geordie
Strauss Family Trust (William  L & Margie A Strauss‐ Trustees)
Kushen
Craig  
Kushen 
Trymax, a California GP
Pack
Scott M
Wood
Ruiz
Miguel Francisco Abed
Ruiz
Hughes
Gary D
Hughes
Mosley
Coleman
Mosley
Porter
Brook F
Porter
Lee
Stephen
Lee
Low
Nelman
Low
Roberts
John 
Roberts
Shean 
Keith  
Shean
Scibetti
Charles J
Purdie
Miles
Dean
Richards
Take 2 LLC
Rosenberger 
Catherine M
Lindsay
Greg
Lindsay
Estoril, LP
Darden
Jon  
Darden
Avedikian
Eddie
Garnet
Sorensen 
Matthew 
Sorenson
Manio 
Allan
Manio
Thielen
Brian
Kaminski
Frank
Gough
Derek
Cohan
Ross
Cohan
Vllasenor
Jose
Trymax, California GP
Contento
Louis J
Merrell
David E
Harris
Randall S
Harris
Mirra
David 
Mirra
SHG Holding LLC
Dao
Mymy
Lord
John Marc  
Lord
Fabian
Rosie
Fabian
Painter
Robert
Painter
Chew III
Edward 
Wedge
Signaigo
Thomas Mark

Buyer No. 2
First Name
Denise

Last Name

Buyer No. 3
First Name

Last Name

Buyer No. 4
First Name

Mark
Tiana
Susan

Upchurch 
Pham‐Lukas

Bergstrom

Dennis

Bergstrom

Julia

Hughes

Shelby K

Hughes

Tracy M

Geronime
Purdie

Lara
Edith

Geronime

Mark

Olga

Casado

Christopher

Casado

Valerie

Christine
Noah
Joseph
Kimberly

Duarte
Ma

Effren
Roger

Carolan G
Kathleen

Mirra

Mark

Shannon
Vivian
Deborah
Gary

Fletcher
Marcotte

Ronald
Joe

Miranda

Leonard

Buyer No. 5
First Name

Kay
Brianne

Veronica

Last Name

Lisa

Timothy
Jason
Kathryn

Meredith
Kelly D
Mauricio Jose Vega
Judy Y
Ellen
Beth A
Joji Stephanie
Karen Kodama
Joanne
Charlotte
Alexander M.
Kurt

Morena

Page 3 of 7

Miranda

Teresa

Buyer No. 6
First Name
Last Name

Buyer No. 1
Unit No.
1137
1139
1142
1143
1144
1146
1148
1154
1156
1158
1159
1201/1209
1208
1210
1211
1212
1218
1222
1226
1229
1230
1232
1233
1234
1235
1238
1239
1244
1250
1252
1259
1260

Last Name
Miller
Brunnhoelzl
Healey
Massa
Brookes
J&D Capital Holding, Inc
Sperbeck (Trustee)
Funke
Magallon
Maze
Inzunza
Villasenor
Vargas 
Multhauf 
Turner
Vargas 
Sowden
Simington
1226 Hard Rock LLC
Andrews
Nagy Revocable Trust
Chappell
Padua
Osley Jr.
Joseph
Trymax, a California GP
Top of the Rock San Diego, LLC
Shakelian
James  Callaghan 
Sohovich
Neu
Lopez

First Name
Richard 
Michael
Fritz
Farid
Darren 
Nura  T
Thomas  M
Luis
Hobart
Joseph
Jose
James
Lloyd
Frank
James F
Douglas S
Kenneth

Last Name
Miller
Brunnhoelzl
Healey
Klein
Yune

Buyer No. 2
First Name
Carla Ann
Janine
Jeannine
Jennifer
Jane Jiwon

Magallon
Maze
Inzunza

Ofelia
Freida
Kristi

Vargas
Multhauf
Zinn
Vargas

Maureen

Nagy
D'Ambrosia

Eric
Teresa

Shakelian
Callaghan
Sohovich
Neu
Lopez

Lisa

Schneider

Mary Jean

Nicolay

Christy M

Rogers
Vigil
Valentini
Dunaway
Sapienza
Lum
Rodil‐Separa
Peterson

Sarah N
Rebecca J
Danny T
Jennifer G
Jennifer L. 
Margaret
Florem 
Jane L

Gorne
Sanchez
Delgado
Cheng
Goniea
DiMeglio
Bennett

Lee Ann
Christine
Rose Mary
Sharon R.
Concepcion B
Paul J
Leah H

Buyer No. 4
First Name

Harout
Suzanne
Debra
Esperanza
Tracy

Heydet

Last Name

Sandra
Christopher 

Mosh
Joseph

Buyer No. 3
First Name

Frances
Carmen
Laurel
Frances T

Simington

Last Name

Long

Catherine

Sargenti

Steve

Mosh

Danielle

McCafferty

Douglas M

Gaffud
Berridge

Emeline R.
Ashley

Sanchez

Michelle

Sargenti

Sherri

Devone‐McCafferty

Yvonne M.

Peter N
Jason 
Anthony  
John P
Donald L

Anto
James
Gregory 
David
Brandon 

SOLD UNITS
230
318
326
340
348
410
418
422
425
433
446
452
458
514
516
525
529
542
558
610
618
625
629
652
656
703

Tsui
Bermeo
Heydet
Guillet
Schneider
Garg
Chacon
Silver Bay Properties, Inc.
Chrisman
Vigil
Valentini
Dunaway
Sapienza
Childre
Rodil
Peterson  
Zeller
Folkers
Merriman
Gorne  
Sanchez
Delgado
Cheng
Goniea
Loelkes
Bennett

Albert H.
Dennis G.
Richard  
 Christopher G
Charles
Geeta
Robert
Robert G
David  L
Christine F
Jerry T
John J
Kevin
Belinda L.
Eric  G
Kathleen Victoria Hill 
Benjamin 
Shawne
Brian
Steve
Samuel
Tina M.
Clifford J
Roland X
David  S

Page 4 of 7

Last Name

Buyer No. 5
First Name

Buyer No. 6
First Name
Last Name

Buyer No. 1
Unit No.
705
710
712
716
722
734
739
746
759
760
801
831
835
852
906
907
908
926
940
943
944
1006
1027
1030
1048
1050
1052
1056
1058
1111
1127
1130
1138
1140
1152
1160
1224
1227
1231
1248

Last Name
Goniea
Kianpour
Sanchez
Egan
Zanotelli
Collins
Persson
Phillips
Myhedyn
Ripley
NCO PROPERTIES, LLC
Matiasic
Frost
Webster
Batrez
Smith
Molitor
GTIves Consulting LLC
Frankel
Jupp
Nguyen
Peterson
Sturm
Congtang
Rock Star 1048 LLC (Brian Verburg)
Melillo
Martin
Bono
Fordham
Veliz
Rose
Davis
Salas
Souissi
Thompson
Golledge
Johnson
Magallon
Clements
Yasukochi

First Name
Clifford J
Alireza
Corey
James P
Joseph  V
William  
Lars G
Kari A
Mark 
Rodney J
Paul A
Sherri R
George W
Joshua M
Todd Derek
Michael P
Paul  R
Peter
Doris K
Clayton
Marco
Yenchi 
Joseph  
Kevin N
Christy
Robert
Jose G
Edward A Jr
Jason
Marco M. 
Slim
Blake
Heidi
Richard  M
Luis J
Jim
Takeshi

Last Name
Goniea

Buyer No. 2
First Name
Concepcion B

Zanotelli
Collins

Larry E
Patricia A
Veronica
Heather Leigh
Kourtney A

Stewart‐Jupp

Rebecca

Martin
Mays

Nicole D
Dennis Michael

Rose
Schranz
Salas

Janice A 
Jeffrey
Fabiola

Buyer No. 4
First Name

Beth

Peterson

Last Name

Gross 

Edward W.

Yeager

Pauline

Peterson

Todd

Peterson

Tara

Salas

Jorge A

Dougherty

Stephen

Bargoon

Martha

Dorian

Charissa

Weginer

Justin

Shoemaker (J Tenant ‐ DieWilliam  
Johnson
Magallon
Clements
Yasukochi

Cynthia A
Ofelia
Lori
Joyce S.A.

Simeon
Van de Zilver

Jacqueline A
Valerie

Dorian
Dimacali

Baret
Arlene B

Dorian
Benedicto

Mariam
Alexander

Golec
Montoya
Rajasingam

Michael
Vickie P
Patrick S

Chestang

Anne E

Zlotoff

Wesley

Kennedy

Robert

Gollaz (trustee)
Lucke

James
Richard T

Gollaz (trustee)
Leibner

Sandra
David

Mullen
Naito

Tobin
Risa

FORECLOSED UNITS
228
346
414
424
428
435
444
450
505
527
531
548
554
601
603
631
634
646

Simeon 
Van de Zilver
Faticone
Ovanesian 
Dimacali
Tecson
Pitner
Montoya
Rajasingam
Veliz
Bollen
Attias
Loya
Doherty
Smargon
Mullen
Tran
Geiger

Omer T II
Eric
Carrie Ann
Louisa
Dexter C
Paul C
Todd
Gabriel H
Pat
Ernesto
Jamin
Messod
Glenda 
Ryan
Magdalena
Jesse  
Bihn Phuong
Andrew

Last Name

Buyer No. 5
First Name

Christopher J
Tracie Van

Frost
Webster
Batrez
Smith
Molitor

Buyer No. 3
First Name

Mary R
Lisa

Phillips
Alstyne

Last Name

Page 5 of 7

Yeager

Michael E

Buyer No. 6
First Name
Last Name

Buyer No. 1
Unit No.
654
660
707
714
725
737
750
752
805
806
808
811
841
844
848
901
910
918
924
935
937
939
950
954
958
960
1007
1014
1034
1039
1040
1041
1043
1054
1060
1112
1133
1134
1216
1242
10 Units

Last Name
Higgins
Gerke
Crichton
Schroadter
Masanes
Perez
Hammi
Sandhu
Wayne
Yahya
Ferrer
Marshall
Geisen
Rosana
Kinsey
Alber 
Okada
Walsh
Luna
Martos 
Devito
Bluestar Development LLC
Ergueta
Saragueta
Plati
Hodlin
Corley
KAG Hard Rock LLC
Burton Jr
Morris Investment Properties, LLC
Nabors
Nguyen
Greene
Sample
Mullen
Dunton
Martel Jr. 
Schroadter
Laffen
Fu
Stanzaz, LLC

First Name
Quinn
John
Leslie
Adam
Edgardo
Peter A
Ray
Harmanjit Singh
Brian
Adbulilah
Frederick
Frank
Grant
Ardith
William J
J. David  Jr.
Michael
Patrick
Scott
Humberto J
John
Ester E
Michael
Liliana
Matthew R
Douglas E

Last Name

Buyer No. 2
First Name

Roper

Michelle (Mia?)
Rosalee

Marshall
Geisen
Rosana

Lizbeth
Gregory
Ruth E

Okada
Jolly
Saltzman
Martos 
Knapic

Shirley
Kevin
Kevin
Kimberly K
Kristina

Placencia

Karen J

Hodlin
Lotwis
Gordon

Bridgette
Barbara A
Kenneth

Martin
Roby
Adler
Coen
Avon
Wallace
Adler
Deposki

Yahya

Emad

Yahya

Astabrik

Geisen

Linda

Jolly

Kevin

Walsh

Patrick

Geisen

Grant

Geisen

Linda

Geisen

Gregory

Morris
Nabors
John
Cuong Duc
David  L
Kelly
Sample
Jesse  
Sewell N. III
Dunton
William
Adam   
Schroadter
Gregory E
Myong
Amy
#454,506,612,709,728,822,832,909,932,1124

Ronald L
Sandra

Kristy L
Linn
Adrienne
Robert

Avon
Wallace

Cynthia Beltran
Steven

Diane
Kami
James

Nolan

James

Shane

Lashgari

Roseanne

Mixed Units ‐ Salemeh Non‐Parties
360
512
624
733
748

Cantoral
Havluciyan
Nolan
Alvarenga Family Living Trust
Lashgari

Buyer No. 5
First Name

Sandra

Earnest 

Anita
Stacy
Caren
Brendan
Joseph S.
Michele
Caren
Kenneth

Last Name

Yahya

Mixed Units ‐ Bell Non‐Parties
448
456
635
724
742
756
1214
1225

Buyer No. 4
First Name

Frank

Hanley
Yahya

Last Name

Susanna
Arlene

Issa

Buyer No. 3
First Name

Scott T.

Schroadter
Masanes

Last Name

Page 6 of 7

Buyer No. 6
First Name
Last Name

Buyer No. 1
Unit No.
842
928

Last Name
Lovejoy
Reyna

First Name
Mariah
Richard

Last Name

Buyer No. 2
First Name

Last Name

Buyer No. 3
First Name

Page 7 of 7

Last Name

Buyer No. 4
First Name

Last Name

Buyer No. 5
First Name

Buyer No. 6
First Name
Last Name