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Case 3:09-cv-02739-DMS -CAB Document 164 Filed 04/05/11 Page 1 of 14 1 COX, CASTLE & NICHOLSON LLP Frederick H. Kranz (STATE BAR NO. 055815) 2 [email protected] Lynn T. Galuppo (STATE BAR NO. 204096) 3 [email protected] 19800 MacArthur Boulevard, Suite 500 4 Irvine, CA 92612-2435 Telephone: (949) 476-2111 5 Facsimile: (949) 476-0256 6 COX, CASTLE & NICHOLSON LLP Jonathan S. Kitchen (STATE BAR NO. 080270) 7 [email protected] Ali P. Hamidi (STATE BAR NO. 191198) 8 [email protected] 555 California Street, 10 th Floor 9 San Francisco, CA 94101 Telephone: (415) 392-4200 10 Facsimile . (415) 392-4250 11 Attorneys for Defendants, TARSADIA HOTELS, TUSHAR PATEL, B.U. PATEL, GREGORY CASSERLY, 5 th ROCK, 12 LLC, MKP ONE, LLC and GASLAMP HOLDINGS, LLC 13 UNITED STATES DISTRICT COURT 14 SOUTHERN DISTRICT OF CALIFORNIA 15 TAMER SALAMEH, et al., Case No. 09cv2739-DMS (CAB) 16 Plaintiffs, NOTICE OF MOTION AND MOTION FOR 17 VS. ATTORNEYS' FEES AND COSTS PURSUANT TO F.R.C.P. 54(D) BY 18 TARSADIA HOTELS, et al. DEFENDANTS TARSADIA HOTELS, TUSHAR PATEL, B.U. PATEL, GREGORY 19 Defendants. CASSERLY, 5' ROCK, LLC, MKP ONE, LLC AND GASLAMP HOLDINGS, LLC 20 Date: June 3, 2011 21 Time: 1:30 p.m. Place: Courtroom 10 22 Judge: The Honorable Dana M. Sabraw 23 TO ALL PARTIES AND TO THEIR ATTORNEYS OF RECORD: 24 PLEASE TAKE NOTICE that on June 3, 2011, at 1:30 p.m. or as soon thereafter as the matter 25 may be heard, before the Honorable Dana M. Sabraw in Courtroom 10 on the 2 nd Floor of the United 26 States District Court for the Southern District of California, located at 940 Front Street, San Diego, 27 California, Defendants Tarsadia Hotels, Tushar Patel, B.U. Patel, Gregory Casserly, 5th Rock, LLC, 28 LAW OFFICES OF COX, CASTLE & NOTICE OF MOTION AND MOTION FOR ATTORNEYS' NICHOLSON LLP FEES AND COSTS BY DEFENDANTS TARSADIA IRVINE, CA 60934\4071470v1 - 1 - HOTELS AND 5TH ROCK, LLC

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Page 1: Case 3:09-cv-02739-DMS -CAB Document 164 Filed 04/05/11 ...securities.stanford.edu/filings-documents/1044/TH... · Case 3:09-cv-02739-DMS -CAB Document 164 Filed 04/05/11 Page 3 of

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1 COX, CASTLE & NICHOLSON LLPFrederick H. Kranz (STATE BAR NO. 055815)

2 [email protected] T. Galuppo (STATE BAR NO. 204096)

3 [email protected] MacArthur Boulevard, Suite 500

4 Irvine, CA 92612-2435Telephone: (949) 476-2111

5 Facsimile: (949) 476-0256

6 COX, CASTLE & NICHOLSON LLPJonathan S. Kitchen (STATE BAR NO. 080270)

7 [email protected] P. Hamidi (STATE BAR NO. 191198)

8 [email protected] California Street, 10 th Floor

9 San Francisco, CA 94101Telephone: (415) 392-4200

10 Facsimile . (415) 392-4250

11 Attorneys for Defendants, TARSADIA HOTELS, TUSHARPATEL, B.U. PATEL, GREGORY CASSERLY, 5 th ROCK,

12 LLC, MKP ONE, LLC and GASLAMP HOLDINGS, LLC

13 UNITED STATES DISTRICT COURT

14 SOUTHERN DISTRICT OF CALIFORNIA

15 TAMER SALAMEH, et al., Case No. 09cv2739-DMS (CAB)

16 Plaintiffs,NOTICE OF MOTION AND MOTION FOR

17 VS. ATTORNEYS' FEES AND COSTSPURSUANT TO F.R.C.P. 54(D) BY

18 TARSADIA HOTELS, et al. DEFENDANTS TARSADIA HOTELS,TUSHAR PATEL, B.U. PATEL, GREGORY

19 Defendants. CASSERLY, 5' ROCK, LLC, MKP ONE,LLC AND GASLAMP HOLDINGS, LLC

20Date: June 3, 2011

21 Time: 1:30 p.m.Place: Courtroom 10

22 Judge: The Honorable Dana M. Sabraw

23 TO ALL PARTIES AND TO THEIR ATTORNEYS OF RECORD:

24 PLEASE TAKE NOTICE that on June 3, 2011, at 1:30 p.m. or as soon thereafter as the matter

25 may be heard, before the Honorable Dana M. Sabraw in Courtroom 10 on the 2 nd Floor of the United

26 States District Court for the Southern District of California, located at 940 Front Street, San Diego,

27 California, Defendants Tarsadia Hotels, Tushar Patel, B.U. Patel, Gregory Casserly, 5th Rock, LLC,

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LAW OFFICES OFCOX, CASTLE & NOTICE OF MOTION AND MOTION FOR ATTORNEYS'NICHOLSON LLP FEES AND COSTS BY DEFENDANTS TARSADIAIRVINE, CA 60934\4071470v1 - 1 - HOTELS AND 5TH ROCK, LLC

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1 MKP One, LLC and Gaslamp Holdings, LLC (collectively, the "Tarsadia Defendants") will, and

2 hereby do, move to for an order awarding attorneys fees in the amount of $456,490 and costs in the

3 amount of $163.25 to be paid by Plaintiffs to the Tarsadia Defendants, pursuant to Fed. R. Civ. P. 54.

4 This motion is based on this Notice, Memorandum of Points and Authorities in support hereof,

5 and Declaration of Frederick H. Kranz, the Request for Judicial Notice and documents attached

6 thereto and filed herewith, upon the pleadings and records of this action, and on such other matters as

7 may be presented hereafter to the Court.

8 DATED: April 5, 2011 COX, CASTLE & NICHOLSON LLP

9

10By: /s/ Frederick H. Kranz

Frederick H. Kranz11 Attorneys for Defendants

TARSADIA HOTELS, TUSHAR PATEL, B.U.12 PATEL, GREGORY CASSERLY, 5th ROCK,

LLC, MKP ONE, LLC and GASLAMP13 HOLDINGS, LLC

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1 MEMORANDUM OF POINTS AND AUTHORITIES

2 Defendants Tarsadia Hotels ("Tarsadia"), Tushar Patel, B.U. Patel, Gregory Casserly, 5th

3 Rock, LLC (5th Rock"), MKP One, LLC, and Gaslamp Holdings, LLC (collectively, the "Tarsadia

4 Defendants") hereby submit this Memorandum of Points and Authorities in support of their Motion

5 for Attorneys' Fees and Costs, pursuant to Federal Rules of Civil Procedure, Rule 54(d) as against

6 Plaintiffs.'

7 I. INTRODUCTION

8 This motion is simple and straightforward. It requests this Court to award the Tarsadia

9 Defendants attorneys' fees and costs incurred in connection with this action. Specifically, Defendants

10 Tarsadia and 5 th Rock seek recovery of all the attorneys' fees incurred in this action because the

11 written agreements upon which Plaintiffs' claims are based contain broad attorneys' fees provisions

12 and, without question, they are the prevailing parties having obtained a Judgment in their favor

13 dismissing this action, with prejudice. Further, pursuant to Section 11(e) of the Securities Act of

14 1933, the Tarsadia Defendants seek to recover all their attorneys' fees incurred in connection with the

15 defense of the claim under Section 12(a)(2) of the Securities Exchange Act of 1933 because Plaintiffs

16 continued to pursue this claim, despite this Court's two prior rulings that it is barred by the applicable

17 statute of limitations. Accordingly, the Tarsadia Defendants are entitled to recover the sum of

18 $456,490 as attorneys fees and $163.25 as costs. The amounts sought are reasonable and supported by

19 the Declaration of Frederick H. Kranz filed concurrently herewith.

20 II. BACKGROUND

21 On December 8, 2009, Plaintiffs commenced this putative class action in the above-referenced

22 court against the Tarsadia Defendants, among others. See Original Complaint On March 15, 2010,

23 Plaintiffs filed a First Amended Complaint ("FAC"). See FAC. On April 12, 2010, the Tarsadia

24 1Tamer Salameh; Real Estate 4 Hospitality, LLC; Aleksey Kats; Diana Kats; Mitchell J. Pereira; Gary A.

25 Torretta; Robert Alvarenga; Alexis Cosio; Cesar Mota; Denis B. Rothe Jr.; Charlene Schrufer; David R. Bushy;Dale Curtis; Zondra Schmidt; Dolores Green; Christy Jeske; Tazia Reyna; Mary L. Wee Song; Kerry L. Steiger

26 Walt; Beth Steigerwalt; Stuart M. Wolman; Jeffrey E. Lubin And Barbara L. Lubin, Individually And As Co-Trustees Of The Lubin Family Trust Dated March 26, 2002; Mikael Havluciyan And Therese Havluciyan

27 Individually And As Co-Trustees Of The Havluciyan Family Trust; Sadoux Kim; Vito Micale; Phillip Gutirrez;Danon Slinkard; Joey Clement; Andrew Paul; Steven Paul; Matthew Hoerr; Sylvia Hoerr; Kevin Henry; Kim

28 Henry; Thomas Behrle; Barabara Behrle; Jose Gallanosa; and Virgina Gallanosa.LAW OFFICES OF

COX, CASTLE & NOTICE OF MOTION AND MOTION FOR ATTORNEYS'NICHOLSON LLP FEES AND COSTS BY DEFENDANTS TARSADIAIRVINE, CA 60934\4071470v1 - 1 - HOTELS AND 5TH ROCK, LLC

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1 Defendants answered the FAC. See Answer to FAC. Thereafter, on July 20, 2010 and on August 23,

2 2010, this Court granted motions to dismiss the FAC filed by other defendants in the action. See

3 Declaration of Frederick Kranz ("Kranz") Decl. ¶5. On September 10, 2010, Plaintiffs filed a Second

4 Amended Complaint ("SAC"). See SAC. On October 8, 2010, the Tarsadia Defendants, among

5 others, filed a Motion to Dismiss the SAC, pursuant to Fed. Rule of Civ. Proc. 12(b)(6). See Kranz

6 Decl. ¶6. On March 22, 2011, this Court granted, among other defendants, the Tarsadia Defendants'

7 Motion to Dismiss the SAC, denied leave to amend, and dismissed this action with prejudice. See id.

8 at ¶7, Ex. A. On March 23, 2011, a judgment in favor of the Tarsadia Defendants, among others, was

9 entered by the Clerk of the Court. Attorneys' fees and costs were incurred in connection with this

10 action. See id. at ¶8, Ex. B.

11 The gravamen of the claims asserted by Plaintiffs in this action is that the sale of guestroom

12 condominium units ("Condo Unit") at the Hard Rock Hotel in San Diego ("Hard Rock") were

13 unlawful because they were not registered as securities and the Tarsadia Defendants purportedly

14 concealed information from Plaintiffs that was material to their purchases. See id. at ¶9. Plaintiffs

15 contend that the Purchase Contract and Escrow Instructions ("Purchase Contract"), Unit Maintenance

16 Operations Agreement ("UMA") and the Rental Management Agreement (the "RMA"), among certain

17 association documents, form an investment contract such that the sale of the Condo Unit is the sale of

18 a security. See id. Plaintiffs assert claims under federal and California State law, including claims for

19 violation of Section 12(a)(2) of the Securities Act of 1933, Section 10(b) of the Securities and

20 Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, violations of Corp. Code §§25401,

21 25501, 25504.1, 25503, 25504, fraud based on misrepresentation, and fraud by concealment. See id.

22 III. ARGUMENT

23 A. THIS COURT HAS AUTHORITY TO AWARD ATTORNEYS' FEES AND COSTS TO

24 THE TARSADIA DEFENDANTS FOLLOWING ENTRY OF JUDGMENT.

25 Federal Rule of Civil Procedure, Rule 54(d)(1) provides a procedure for the recovery of costs,

26 and Rule 54(d)(2) provides a procedure for the recovery of attorneys' fees in federal court. Rule

27 54(d)(2)(B) requires a party seeking attorneys' fees and costs to show the judgment entitling the movant

28 to fees; specify the grounds for the fee award, (i.e. identify the statutory, equitable or other basis for the

LAW OFFICES OFCOX, CASTLE & NOTICE OF MOTION AND MOTION FOR ATTORNEYS'NICHOLSON LLP FEES AND COSTS BY DEFENDANTS TARSADIAIRVINE CA 60934\4071470v1 - 2 - HOTELS AND 5TH ROCK, LLC

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1 award); and state or estimate the amount of the fee sought. Although the Tarsadia Defendant carry the

2 burden of establishing the right to fees and costs, the initial fee motion need only state the basis for a fee

3 award and an initial estimate of the amount sought. See Fed. R. Civ. Proc. 54(d)(2)(B)(ii), (iii). Only

4 after the Court so directs are the Tarsadia Defendants required to submit copious evidentiary materials

5 in support of their request. Set forth below, the Tarsadia Defendants satisfy these requirements.

6 B. 5TH ROCK AND TARSADIA ARE ENTITLED TO AN AWARD OF ATTORNEYS'

7 FEES AND COSTS AS THE PREVAILING PARTIES AND PURSUANT TO THE

8 OPERATIVE AGREEMENTS.

9 The Ninth Circuit applies state law, rather than federal common law, to interpret the terms of an

10 attorneys' fee provision when attorneys' fees are sought under a contract. See Resolution Trust Corp. v.

11 Midwest Federal Savings Bank, 36 F.3d 785, 800 (9th Cir. 1993)(the Ninth Circuit applied California

12 law in interpreting the applicable attorneys' fee provision in the loan documents); see also 3250

13 Wilshire Blvd. v. W.R. Grace & Co., 990 F.2d 487, 489 (9t11 1993)(applying Cal. Civ. Code §1717

14 and Cal. Code of Civ. Proc. 1021 when awarding attorneys' fees to the prevailing party on tort claims,

15 such as fraud). The applicable statute providing for the recovery of attorneys' fees by 5 th Rock and

16 Tarsadia is California Civil Code Section 1717. Section 1717 provides that when a contract provides

17 that attorneys' fees and costs shall be awarded to the prevailing party, the party who is determined to be

18 the prevailing party "shall be entitled to reasonable attorneys' fees and other costs." (Emphasis added).

19 Cal. Civ. Code §1717(b)(1). Section 1717 provides:

20 In any action on a contract, where the contract specifically provides that attorney's fees

21, and costs, which are incurred to enforce that contract, shall be awarded either to one of

22 the parties or to the prevailing party, then the party who is determined to be the party

23 prevailing on the contract, whether he or she is the party specified in the contract or

24 not, shall be entitled to reasonable attorney's fees in addition to other costs.

25 Cal. Civ. Code §1717(a). Additionally, California Code of Civil Procedure Section 1032(a)(4)

26 provides that attorneys fees are allowable as costs when they are authorized by contract. Further,

27 California Code of Civil Procedure Section 1021, provides:

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1 Except as attorney's fees are specifically provided for by statute, the measure and mode

2 of compensation of attorneys and counselors at law is left to the agreement, express or

3 implied, of the parties; but parties to actions or proceedings are entitled to their costs,

4 as hereinafter provided.

5 5th Rock and Tarsadia are entitled to recover the attorneys' fees and costs incurred in this action

6 as the prevailing parties and as provided pursuant to the Purchase Contract, UMA and the RMA. The

7 three primary agreements upon which Plaintiffs predicate their claims are the Purchase Contract, UMA

8 and the RMA. See SAC at I91, passim. Defendant 5 th Rock is the party that each Plaintiff entered into

9 the Purchase Contract and UMA. See Request for Judicial Notice ("RJN"), Exhs. 1 through 52.

10 Defendant Tarsadia is the party that each Plaintiff entered into the RMA. See RJN, Exhs. 53 through

11 77. Each of these agreements contains an attorneys' fees provision, as follows:

12 • Paragraph 16(g) of the Purchase Contract provides:

13 In the event of bringing or initiation of any judicial reference, action or suit by either

14 party against the other arising out of this Contract, the costs and expenses of suit or

15 judicial reference, including reasonable attorneys' fees, shall be paid in accordance

16 with the judgment or award made in connection with any such judicial reference action

17 or suit.

18 • Paragraph 10.2 of the UMA provides:

19 If a lawsuit, arbitration or other proceedings are instituted by any party to enforce any

20 of the terms or conditions of this Agreement against any other party hereto, the

21 prevailing party in such litigation, arbitration or proceedings shall be entitled, as an

22 additional item of damages, to such reasonable attorneys' and other professional fees

23 and costs (including, but not limited to, witness fees), court costs, arbitrators' fees,

24 arbitration administrative fees, travel expenses, and other out-of-pocket expenses or

25 costs of such other proceedings, as may be fixed by any court of competent jurisdiction,

26 arbitrator or other judicial or quasi-judicial body having jurisdiction thereof, whether or

27 not such litigation or proceedings proceed to a final judgment or award. For the

28 purposes of this section, any party receiving an arbitration award or judgment for

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1 damages or other amounts shall be deemed to be the prevailing party, regardless of

2 amount of the damage awarded or whether the award or judgment was based on all or

3 some of such party's claims or causes of action, and any party against whom a lawsuit,

4 arbitration or other proceeding is instituted and later voluntarily dismissed by the

5 instituting party shall be deemed to be the prevailing party.

6 • Paragraph 10.5 of the RMA provides:

7 If any action, arbitration, or proceeding is commenced by either party to enforce

8 its/their rights under this Agreement or to collect damages as a result of the breach of

9 any of the provisions of this Agreement, the prevailing party in such action, arbitration,

10 or proceeding, including any bankruptcy, insolvency or appellate proceedings, shall be

11 entitled to recover all reasonable costs and expenses, including, without limitation,

12 reasonable attorneys' fees and court costs, in addition to any other relief awarded by

13 the court.

14 Under California law and as applied by federal courts, an attorneys' fee provision as broad as

15 the ones in the Purchase Contract, the UMA and the RMA demonstrate that the parties intended the

16 contractual fee clause to apply to noncontract claims; thus, encompassing all the claims asserted by

17 Plaintiffs against 5 th Rock and Tarsadia. See Stitt v. Williams, 919 F.2d 516, 529-30 (9t11 1990)(after

18 upholding the summary judgment ruling that the claims were time barred, among other reasons, the

19 Ninth Circuit remanded the action directing the trial court to award attorneys' fees on claims for Section

20 12(a)(2) of the Securities Act of 1933, Section 10b-5 of the Securities Exchange Act of 1934, and

21 California state law fraud claims to the defendants that were parties to the limited partnership agreement

22 because the claims were sufficiently tied thereto and given the broad language of the governing

23 provision); 3250 Wilshire Blvd, 990 F.2d at 489 (the attorneys' fee provision in the purchase and sale

24 agreement was broad enough to encompass the claims for breach of fiduciary duty and fraud); Koehler

25 v. Pulvers, 614 F. Supp. 829, 852 (D.C. Cal. 1985)(the language in the applicable limited partnership

26 agreement was so broad that it permitted for the recovery of attorneys' fees in connection with the

27 Section 12(a)(2) of the Securities Act of 1933, Cal. Corp. Code §§25501, 25503, 25504.2, Section 10b-

28 5 of the Securities Exchange Act of 1934, and California state law fraud claims); see also Santisas v.

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1 Goodin, 17 Ca1.4th 599, 608 (1998)(provision in real estate sales contract for fees to the prevailing party

2 in event of legal action "arising out of the execution of this agreement or the sale" included tort claims);

3 Xuereb v. Marcus & Millichap, Inc., 3 Cal. App. 4th 1338 (1992).

4 Here, 5 th Rock and Tarsadia are, unequivocally, the prevailing parties given that this Court

5 rendered Judgment in their favor and dismissed this action, with prejudice, on March 23, 2011. See

6 Civ. Code §1717(b)(1)("the party prevailing on the contract shall be the party who recovered a greater

7 relief in the action on the contract); Code of Civ. Proc. §1032(a)(4)(for purposes of the cost statutes, the

8 term "prevailing party" includes a party in whose favor a judgment of dismissal has been entered); see

9 also Local Rule 54.1f ("The defendant is a prevailing party upon any termination of the case without

10 judgment for the plaintiff except a voluntary dismissal under Fed. R. Civ. P. 41(a)). This action was

11 brought by Plaintiffs in connection with their purchase of the Condo Unit at the Hard Rock pursuant to

12 the Purchase Contract. Further, Plaintiffs contend that the Purchase Contract, the UMA and the RMA

13 were one of several documents purportedly forming the supposed "investment contract" upon which

14 they predicate their various claims. SAC 1E91, passim. Accordingly, this action arises out of and is

15 sufficiently tied to the Purchase Contract, UMA and the RMA such that 5 th Rock and Tarsadia are

16 entitled to recover their attorneys' fees based on the provisions therein.

17 C. THE TARSADIA DEFENDANTS ARE ENTITLED TO RECOVER THEIR

18 ATTORNEYS' FEES FOR THE WORK PERFORMED ON THE SECTION 12(A)(2)

19 CLAIM.

20 Section 12 of the Securities Act is silent as to whether attorney's fees may be recovered in an

21 action under that section. See 15 U.S.C.A. § 771. Section 11(e) of the Securities Act, however, provides

22 that in any action under any section of the Securities Act, including on a Section 12(a)(2) claim as was

23 asserted here, a court has the discretion to award costs, including attorney's fees, where the court finds

24 that the suit or defense was without merit. See Aizuss v. Commonwealth Equity Trust, 847 F.Supp.

25 1482, 1491-92 (E.D.Cal. 1993)(awarding attorneys' fees for work performed on the Section 12(2) claim

26 following a finding that the claims were barred by the applicable statute of limitations and that the

27 information claimed to be concealed was actually disclosed to the purchasers); Western Federal Corp.

28 v. Davis, 553 F. Supp. 818 (D. Ariz. 1982), order affd, 739 F.2d 1439 (9th Cir. 1984)(attorney's fees

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1 were awarded in a Section 12 action in which there was no issue of fact and the only issue of law

2 pertained to the asserted defense that the investment transaction did not involve a "security" or a "sale,"

3 which the court found the defense was without merit). Here, this Court issued two orders dated July 20,

4 2010 and on August 23, 2010 that the Section 12(a)(2) claim was time-barred. Brazenly ignoring this

5 Court's two prior rulings, Plaintiffs re-asserted their Section 12(a)(2) claim in the SAC. Consequently,

6 the Tarsadia Defendants were forced to raise the statute of limitations issue in their Motion to Dismiss

7 the SAC, and this Court was forced to rule — for the third time — that the claim was time barred. Thus,

8 the Tarsadia Defendants are entitled to an award of attorneys' fees relative to the Section 12(a)(2) claim.

9 D. THE TARSADIA DEFENDANTS ARE ENTITLED TO THE FEES REQUESTED,

10 WHICH ARE REQUIRED AND REASONABLE.

11 Attorneys' fees awarded under Section 1717 are calculated using the lodestar method. See

12 PLMC Group v. Drexler, 22 Cal. 4th 1084, 1095 (2000). To calculate the amount of attorneys' fees

13 under the lodestar method, a court must calculate "the number of hours reasonably expended

14 multiplied by a reasonable hourly rate." Id. at 1095. To determine a reasonable rate for each attorney,

15 the Court must look to the rate prevailing in the community for similar work performed by attorneys

16 of comparable skill, experience and reputation. See id. There is a presumption that the lodestar figure

17 represents a reasonable fee. See id. at 1095-96.

18 As demonstrated, the Tarsadia Defendants are the prevailing parties and, thus, are entitled to

19 recover reasonable fees and costs incurred in connection with this action. As set forth in the

20 Declaration of Frederick H. Kranz, the Tarsadia Defendants incurred the sum of $456,490 for

21 attorneys fees and $163.25 for costs. See Kranz Decl. n1 9, 22. As summarized in the Kranz

22 Declaration, the services rendered in connection with this action involve, among other things, the

23 following: analyzing the complaint, the first amended complaint and the second amended complaint

24 and researching the claims asserted in each; researching and drafting the answer to the first amended

25 complaint; researching and drafting the motion to dismiss the second amended complaint and

26 supporting documents; researching and drafting the Early Neutral Evaluation conference statement;

27 appearances at the Early Neutral Evaluation conference and the motion to dismiss hearings; and

28 general case management, strategy, research, and advising client. See Kranz Decl. ¶21.

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1 IV. CONCLUSION

2 The Tarsadia Defendants are clearly the prevailing party given that judgment was entered in

3 their favor and this action was dismissed, with prejudice. As the prevailing parties and under the

4 terms of the applicable agreements, the 5 th Rock and Tarsadia are entitled to recover their attorneys'

5 fees. Additionally, the Tarsadia Defendants are entitled to recover their attorneys' fees incurred in

6 connection with the defense of the Section 12(a)(2) claim given that Plaintiffs pursued this claim in

7 spite of this Court's prior rulings that it was time barred. Accordingly, the Tarsadia Defendants are

8 entitled to recover their attorneys' fees in the sum of $456,490 and costs in the sum of $163. 25

9 incurred in connection with this action.

10 DATED: April 5, 2011 COX, CASTLE & NICHOLSON LLP

11

By: /s/ Frederick H. Kranz12Frederick H. Kranz

13 Attorneys for DefendantsTARSADIA HOTELS, TUSHAR PATEL, B.U.

14 PATEL, GREGORY CASSERLY, 5th ROCK,LLC, MKP ONE, LLC and GASLAMP

15 HOLDINGS, LLC

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LAW OFFICES OF

COX, CASTLE & NOTICE OF MOTION AND MOTION FOR ATTORNEYS'NICHOLSON LLP FEES AND COSTS BY DEFENDANTS TARSADIAIRVINE, CA 60934\4071470v1 - 8 - HOTELS AND 5TH ROCK, LLC

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PROOF OF SERVICE AND CERTIFICATION

I am employed in the County of Orange, State of California. I am over the age of 18 and not a party to thewithin action; my business address is 19800 MacArthur Boulevard, Suite 500, Irvine, California 92612-2435.

(For messenger) my business address is

On April 5, 2011, I served the foregoing document(s) described as NOTICE OF MOTION AND MOTION FORATTORNEYS' FEES AND COSTS PURSUANT TO F.R.C.P. 54(D) BY DEFENDANTS TARSADIA HOTELS,TUSHAR PATEL, B.U. PATEL, GREGORY CASSERLY, 5TH ROCK, LLC, MKP ONE, LLC AND GASLAMPHOLDINGS, LLC on ALL INTERESTED PARTIES in this action

IEI by placing a true copy thereof in a sealed envelope (except when served via fax or email) addressed to theparties on the attached Service List

0 by placing the original(s) enclosed in a sealed envelope (except when served via fax or email) addressed asfollows:

See attached Service List.

On the above date:

(BY 0 U.S. MAIL/BY 0 EXPRESS MAIL) The sealed envelope with postage thereon fully prepaid was placedfor collection and mailing following ordinary business practices. I am aware that on motion of the party served,service is presumed invalid if the postage cancellation date or postage meter date on the envelope is morethan one day after the date of deposit for mailing set forth in this declaration. I am readily familiar with Cox,Castle & Nicholson LLP's practice for collection and processing of documents for mailing with the UnitedStates Postal Service and that the documents are deposited with the United States Postal Service the sameday as the day of collection in the ordinary course of business.

(BY FEDERAL EXPRESS OR OTHER OVERNIGHT SERVICE) I deposited the sealed envelope in a box orother facility regularly maintained by the express service carrier or delivered the sealed envelope to anauthorized carrier or driver authorized by the express carrier to receive documents.

(BY FACSIMILE TRANSMISSION) On April 5, 2011, at Irvine, California, I served the above-referenceddocument on the addressee on the attached service list by facsimile transmission pursuant to Rule 2.306 ofthe California Rules of Court. The telephone number of the sending facsimile machine was 949.476.0256; seeattached Service List for a list of the telephone number(s) of the receiving facsimile number(s). A transmissionreport was properly issued by the sending facsimile machine, and the transmission was reported as completeand without error. Copies of the facsimile transmission cover sheet and the transmission report are attachedto this proof of service.

E2 (NOTICE OF ELECTRONIC FILING): The counsel listed on the attached service list have consented toelectronic service and have been automatically served by the Notice of Electronic Filing, which is automaticallygenerated by CM/ECF at the time said document was filed, and which constitutes service pursuant to FederalRule of Civil Procedure 5(b)(2)(D).

(BY PERSONAL DELIVERY) By causing a true copy of the within document(s) to be personally hand-delivered to the office(s) of the addressee(s) set forth on the attached Service List, on the date set forth above.

(BY PERSONAL SERVICE) I delivered such envelope by hand to the offices of the addressee(s) listed on theattached Service List.

E3(FEDERAL ONLY) I declare that I am employed in the office of a member of the bar of this court at whosedirection the service was made.

I hereby certify that the above document was printed on recycled paper.

I declare under penalty of perjury that the foregoing is true and correct.

Executed on April 5, 2011, at Irvine, California. Ala Kogif3_,-(5Marla K. Rodrigue

60934\2335996v1

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CASE: Tamar Salameh, et al. v. Tarsadia Hotel, et al. USDC CASE NO.: 09 CV 2739 DMS (CAB)CCN CLIENT: Defendants Tarsadia Hotels, Tushar Patel, B.U. Patel, Gregory Casserly, 5th

Rock, LLC, MKP One, LLC and Gaslamp Holdings, LLCCCN FILE NO.: 60934

SERVICE LIST

Counsel for PlaintiffsMichael J. Aguirre, Esq.Maria C. Severson, Esq.Christopher S. Morris, Esq.AGUIRRE MORRIS & SEVERSON LLP444 West C Street, Suite 210San Diego, CA 92101(619) 876-5364(619) 876-5368 — Faxe-mail: [email protected]: [email protected]: [email protected]

Counsel for Third Party Plaintiff Spyglass Partners, Inc.Bryan D. Sampson, Esq.SAMPSON AND ASSOCIATES2139 First AvenueSan Diego, CA 92101-2013(619) 557-9420(619) 557-9425 — Faxe-mail: [email protected]

Counsel for Defendant East West BankJohn Nadolenco, Esq.Christopher P. Murphy, Esq.MAYER BROWN LLP350 South Grand Avenue, 25th FloorLos Angeles, CA 90071-1503(213) 229-9500(213) 625-0248 — Faxe-mail: [email protected]: [email protected]

Counsel for Defendant XBR Financial Services, LLCPhilip W. Green, Esq.Jennifer A. Needs, Esq.Scott R. Albrecht, Esq.SAMUELS, GREEN & STEEL LLP19800 MacArthur Boulevard, Suite 1000Irvine, CA 92612-2433(949) 263-0004(949) 263-0005 — Faxe-mail: [email protected]: [email protected]: [email protected]

60934\2335996v1 - 2 -

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CASE: Tamar Salameh, et al. v. Tarsadia Hotel, et al. USDC CASE NO.: 09 CV 2739 DMS (CAB)CCN CLIENT: Defendants Tarsadia Hotels, Tushar Patel, B.U. Patel, Gregory Casserly, 5th

Rock, LLC, MKP One, LLC and Gaslamp Holdings, LLCCCN FILE NO.: 60934

SERVICE LIST (Cont.)

Counsel for Bank of America, N.A.Edward M. Rosenfeld, Esq.Timothy L. Hayes, Esq.BRYAN CAVE LLP120 Broadway, Suite 300Santa Monica, CA 90401(310) 576-2100(310) 576-2200 — Faxe-mail: [email protected]: [email protected]

Counsel for Defendant JPMorgan Chase Bank, N.A.Christopher Yoo, Esq.ALVARADO SMITH1 MacArthur Place, Suite 200Santa Ana, CA 92707(714) 852-6800(714) 852-6899 — Faxe-mail: [email protected]

Counsel for Defendant Playground Destination PropertiesThomas W. McNamara, Esq.Daniel M. Benjamin, Esq.Chrysta L. Elliott, Esq.BALLARD SPAHR LLP401 West A Street, Suite 1150San Diego, CA 92101(619) 696-9200(619) 696-9269 — Faxe-mail: [email protected]: [email protected]: [email protected]

Counsel for Defendant Erskine Corp.John L. Smaha, Esq.SMAHA LAW GROUP7860 Mission Center Court, Suite 100San Diego, CA 92108(619) 688-1557(619) 688-1558 — Faxe-mail: [email protected]

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CASE: Tamar Salameh, et al. v. Tarsadia Hotel, et al. USDC CASE NO.: 09 CV 2739 DMS (CAB)CCN CLIENT: Defendants Tarsadia Hotels, Tushar Patel, B.U. Patel, Gregory Casserly, 5th

Rock, LLC, MKP One, LLC and Gaslamp Holdings, LLCCCN FILE NO.: 60934

SERVICE LIST (Cont.)

Counsel for Defendant Wintrust Financial CorporationJean L. Bertrand, Esq.C. Craig Bridwell, Esq.SCHIFF HARDIN LLPOne Market, Spears Street TowerThirty-Second FloorSan Francisco, CA 94105(415) 901-8700(415) 901-8701 — Faxe-mail: [email protected]: cbridwellschiffhardin.com

Counsel for Defendant Independent BankChristopher Ray Ambrose, Esq.Ambrose Law Group LLC312 NW 10th Avenue, Suite 200Portland OR 97209-3121(503) 222-0552(503) 222-0984 — Faxe-mail: [email protected]

60934\2335996v1 - 4 -