Free Motion for Bond - District Court of California - California

Case 3:08-cv-01438-WQH-WMC

Document 8

Filed 08/13/2008

Page 1 of 2

1 Monty A. McIntyre, Esq. (SBN 95796) 2 SELTZER CAPLAN MCMAHON VITEK 3 A Law Corporation

Wes E. Henricksen, Esq. (SBN 246712)

750 B Street, 2100 Symphony Towers
4 San Diego, California 92101-8177 5 Telephone: 6 7 8 9 10

(619) 685-3003; Facsimile: (619) 685-3100 [email protected]; [email protected] Attorneys for Defendants DON BARNES and DELK PRODUCTS, INC. UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA ) ) ) ) ) ) ) ) ) ) ) ) ) ) CASE NO. 08-cv-1438 WQH WMc NOTICE OF MOTION AND MOTION BY DEFENDANT DON BARNES FOR AN ORDER REQUIRING PLAINTIFF TO PROVIDE SECURITY FOR COSTS AND FEES DATE: October 6, 2008 TIME: 11 a.m. JUDGE: Hon. William Q. Hayes DEPT Courtroom 4 COMPLAINT FILED: June 30, 2008 TRIAL DATE: Not Yet Set

EVERGREEN RESEARCH AND 11 MARKETING, LLC,
12 13 14

Plaintiff, vs.

DON BARNES, an individual; and DELK PRODUCTS, INC.; LARRY KAIN, an 16 individual; PINNACLE NATIONAL BANK; and DOES 1-20, inclusive,
15 17 18 19 20 TO: 21

Defendants.

ALL PARTIES AND THEIR ATTORNEYS OF RECORD:
PLEASE TAKE NOTICE that on October 6, 2008, at 11 a.m., or as soon thereafter as counsel

22 can be heard, in Courtroom 4, of the above-entitled court, located at 940 Front Street, San Diego, 23 California 92101, Defendant DON BARNES will, and hereby does, move the court for an order 24 requiring Plaintiff to provide $50,000 security for Defendant's costs and attorney's fees in this action. 25

This motion is made under section 800(b) of the Corporations Code on the ground that

26 there is no reasonable possibility that the prosecution of at least one of Plaintiff's causes of 27 action in this suit will benefit the corporation BetaBake, Inc. or its shareholders. 28
NOTICE OF MOTION Case No. 08-cv-1438 WQH WMc

Case 3:08-cv-01438-WQH-WMC

Document 8

Filed 08/13/2008

Page 2 of 2

1

The motion will be based on this notice of motion and motion, the attached declarations

2 of Monty A. McIntyre and Don Barnes, the attached memorandum of points and authorities, 3 the pleadings and records on file in this action, and such oral and documentary evidence as 4 may be presented at the hearing. 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
2 NOTICE OF MOTION Case No. 08-cv-1438 WQH WMc

Dated: August 13, 2008

SELTZER CAPLAN McMAHON VITEK A Law Corporation By: /s/ Monty A. McIntyre

Monty A. McIntyre Wes E. Henricksen Attorneys for Defendant DON BARNES, an individual.

Case 3:08-cv-01438-WQH-WMC

Document 8-2

Filed 08/13/2008

Page 1 of 8

1 Monty A. McIntyre, Esq. (SBN 95796) Wes E. Henricksen, Esq. (SBN 246712) 2 SELTZER CAPLAN MCMAHON VITEK 3 A Law Corporation 750 B Street, 2100 Symphony Towers 4 San Diego, California 92101-8177 5 Telephone: (619) 685-3003; Facsimile: (619) 685-3100 [email protected]; [email protected] 6 Attorneys for Defendants DON BARNES and DELK PRODUCTS, INC. 7 8 9 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) CASE NO. 08-cv-1438 WQH WMc MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANT DON BARNES' MOTION FOR AN ORDER REQUIRING PLAINTIFF TO PROVIDE SECURITY FOR COSTS AND FEES DATE: October 6, 2008 TIME: 11 a.m. JUDGE: Hon. William Q. Hayes DEPT: Courtroom 4 COMPLAINT FILED: June 30, 2008 TRIAL DATE: Not Yet Set

10 EVERGREEN RESEARCH AND 11 MARKETING, LLC, 12 13 14 DON BARNES, an individual; and DELK PRODUCTS, INC.; LARRY KAIN, an 16 individual; PINNACLE NATIONAL BANK; and DOES 1-20, inclusive, 17 15 18 19 20 21 22 Defendants. vs. Plaintiff,

Defendant DON BARNES ("Barnes") respectfully submits the following points and

23 authorities in support of his motion for an order requiring Plaintiff EVERGREEN RESEARCH 24 AND MARKETING, LLC ("Evergreen") to provide security for Defendant's costs and 25 attorney's fees in this action. 26 / / / 27 / / / 28
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SECURITY Case No. 08-cv-1438 WQH WMc

Case 3:08-cv-01438-WQH-WMC

Document 8-2

Filed 08/13/2008

Page 2 of 8

1 2 3

I. INTRODUCTION Barnes seeks an order from this Court, under California Corporations Code § 800(c),

4 requiring Evergreen to provide $50,000 in security for Barnes' costs and attorney's fees. A 5 corporation, or a defendant who is an officer or director of the corporation, can obtain a 6 $50,000 security when a plaintiff brings derivative claims against a corporation. (Id.) This 7 motion may properly be made to this Court under Federal diversity jurisdiction. (Koster v. 8 Warren 297 F.2d 418, 419 (9th Cir. 1961).) 9 Evergreen, a 50 percent shareholder of a corporation called BetaBake Products, Inc.

10 ("BetaBake"), has sued the other 50 percent shareholder Barnes, essentially claiming that the 11 alleged wrongful acts of Barnes decreased the value of Evergreen's stock by reducing 12 corporate assets. Evergreen also sued Delk Products, Inc. ("Delk"), essentially claiming that 13 Delk and Barnes converted money from BetaBake, decreasing the value of Evergreen's 14 BetaBake stock by reducing BetaBake corporate assets. 15 In California, "a shareholder cannot bring a direct action for damages against

16 management on the theory their alleged wrongdoing decreased the value of his or her stock 17 (e.g., by reducing corporate assets and net worth). The corporation itself must bring such an 18 action, or a derivative suit may be brought on the corporation's behalf." (Friedman, Cal. 19 Practice Guide: Corporations, supra, ¶ 6:601.1, p. 6-128.1, citing Sutter v. General Petroleum 20 Corp. (1946) 28 Cal.2d 525, 529-530, 170 P.2d 898, O'Hare v. Marine Electric Co. (1964) 229 21 Cal.App.2d 33, 36-37, 39 Cal.Rptr. 799.) An action is derivative if "the gravamen of the 22 complaint is injury to the corporation, or to the whole body of its stock or property without any 23 severance of distribution among individual holders, or if it seeks to recover assets for the 24 corporation or to prevent the dissipation of its assets." (Jones v. H.F. Ahmanson & Co. (1969) 25 1 Cal.3d 93, 106-107.) 26 BetaBake is not bringing this action, and Evergreen cannot bring a direct action in this

27 case. Evergreen's action is derivative, Evergreen has sued BetaBake's officer and director 28
2 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SECURITY Case No. 08-cv-1438 WQH WMc

Case 3:08-cv-01438-WQH-WMC

Document 8-2

Filed 08/13/2008

Page 3 of 8

1 Barnes, and this Court should compel Evergreen to file a $50,000 security as required by 2 California Corporations Code § 800(c). 3 4 5 A. 6 II. ARGUMENT THE MOTION FOR SECURITY IS TIMELY FILED. A motion for security may be made at any time within 30 days after service of summons

7 on a moving defendant, and must be noticed. (Corp. Code, § 800(c).) Barnes, an officer of 8 BetaBake, is a named defendant. (Declaration of Don Barnes, Exhibit 2, ¶ 2.) Barnes has not 9 yet been served, as discussed below. 10 The action was originally filed in the California state court on June 30, 2008. The action

11 was removed to the Federal court on August 8, 2008. In a removed action, the sufficiency of 12 service prior to removal from the state court is determined under state law. (Lee v. City of 13 Beaumont (9th Cir. 1993) 12 F.3d 933, 936-937.) Under California law, to date Barnes has not 14 been personally served with the summons and complaint, nor has he been served in any other 15 authorized manner. 16 A copy of the summons and complaint was delivered to the Delk offices on

17 approximately July 9, 2008. The summons and complaint was not personally delivered to Mr. 18 Barnes that day.1 (Declaration of Monty A. McIntyre, Exhibit 1, ¶ 2.) The delivery of the 19 summons and complaint to the Delk office on July 9th did not constitute personal service. 20 (Code of Civil Procedure § 415.10.) Later, a copy of the summons and complaint was mailed 21 to the Delk offices on approximately August 7, 2008. (Declaration of Monty A. McIntyre, 22 Exhibit 1, ¶ 2.) The mailing of the summons and complaint could possibly constitute service, 23 but under the applicable California rules service in this manner would not be deemed to be 24 complete until ten days after the summons and complaint were mailed. (Code of Civil 25 Procedure §§ 415.20(a), 415.40.) Applying California law to these facts, the earliest possible 26 date that service of the summons and complaint could be deemed complete is August 17, 2008. 27
On July 9th, the summons and complaint was not personally delivered to a person authorized to accept 28 service on behalf of Delk.
3 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SECURITY Case No. 08-cv-1438 WQH WMc
1

Case 3:08-cv-01438-WQH-WMC

Document 8-2

Filed 08/13/2008

Page 4 of 8

1

This motion for security is timely filed under Corporations Code § 800(c) because

2 Barnes has not yet been served with the summons and complaint in accordance with California 3 law. (Declaration of Monty A. McIntyre, Exhibit 1, ¶ 2.) 4 B. 5 THE PROCEDURE AND LEGAL STANDARD TO OBTAIN SECURITY. A corporation, or a defendant who is an officer or director of the corporation, can obtain

6 a $50,000 security when a plaintiff brings derivative claims against a corporation. (Corp. Code, 7 § 800.) The moving defendant on a motion for security bears the burden of establishing a 8 probability in support of any of the grounds on which it is based (Corp. Code, § 800(d); see 9 also Burt v. Irvine Co. (1965) 237 Cal.App.2d 828, 868), but this showing need be made as to 10 only one cause of action. (Bailey v. Fosca Oil Co. (1960) 180 Cal.App.2d 289, 296-297.) 11 The motion can be made on either or both of the following grounds: (1) there is no

12 reasonable possibility that the suit will benefit the corporation or its shareholders; or (2) the 13 moving defendant, if an individual, did not participate in the transaction complained of in any 14 capacity. (Corp. Code, § 800(c).) 15 The moving defendant may present evidence in the form of written affidavits or oral

16 testimony. (Corp. Code, § 800(d).) The evidence should address the issues of whether the 17 statutory grounds for the motion exist, and the amount of the probable reasonable expenses of 18 the defendant, including attorney's fees. (Id.) As demonstrated below, in this case Barnes 19 need not present any evidence to meet his burden. Evergreen's complaint, by its own terms, 20 proves that there is no reasonable possibility that at least one (or more) of the causes of action 21 will benefit BetaBake. 22 If the Court, after hearing, determines that the moving party has established a

23 probability in support of any of the grounds for the motion as to any cause of action, it must fix 24 the nature and amount of the security to be furnished by the plaintiff, and a reasonable time in 25 which to comply. The question for the Court is whether, regardless of plaintiff's motive in 26 instituting the action, there is or is not a probability of benefit to the corporation as to one of 27 the causes of action. (See Beyerbach v. Juno Oil Co. (1954) 42 Cal.2d 11, 25.) 28
4 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SECURITY Case No. 08-cv-1438 WQH WMc

Case 3:08-cv-01438-WQH-WMC

Document 8-2

Filed 08/13/2008

Page 5 of 8

1

The security is to be given for the defendants' reasonable expenses in defending the

2 action, including attorney's fees. The aggregate for all defendants may not exceed $50,000. 3 (Corp. Code, § 800(d).) The type of security to be furnished by the plaintiff is not specified by 4 statute. That matter is in the sound discretion of the trial court. (Beyerbach, supra, 42 Cal.2d 5 at 27.) 6 It is important to note that an order requiring the plaintiff to post security, although

7 potentially addressing the possibility of the plaintiff's success in the suit, is not a determination 8 of any issue in the action or of the merits of the action. (Corp. Code, § 800(d).) 9 If the Court determines that a bond shall be furnished by the plaintiff as to any one or

10 more defendants, the action shall be dismissed as to the defendant or defendants unless the 11 required bond is furnished within the time fixed by the court. (Corp. Code, § 800(d).) 12 C. 13 14 FILING THE MOTION STAYS THE ACTION AND PLAINTIFF'S DISCOVERY, BUT NOT DISCOVERY BY DEFENDANTS. The filing of the motion automatically stays the proceedings until 10 days after the

15 motion is disposed of. (Corp. Code, § 800(e).) This provision has been interpreted to mean 16 that, if the motion is granted, the stay is not lifted until 10 days after the plaintiff actually files 17 the security. (Melancon v. Superior Court (1954) 42 Cal.2d 698, 703-708.) During the time 18 the stay is in effect, neither the moving defendant, nor any other defendant in the action, is 19 required to file an answer or any other pleading. (Corp. Code § 800(f).) As a result of the 20 stay, defendants Barnes and Delk are not required to file an answer to the complaint or a 21 motion attacking the Complaint until 10 days after the motion for security is disposed of. 2 22 Moreover, plaintiff may not proceed with discovery during the stay, although the defendants 23 may. (Melancon, supra, 42 Cal.2d at 707-708.) 24 / / / 25 / / / 26 / / / 27
2

28

Barnes and Delk reserve all potential challenges to the Complaint.
Case No. 08-cv-1438 WQH WMc

5 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SECURITY

Case 3:08-cv-01438-WQH-WMC

Document 8-2

Filed 08/13/2008

Page 6 of 8

1 D. 2 3

EVERGREEN ALLEGES DERIVATIVE CLAIMS ON BEHALF OF THE CORPORATION. Evergreen does not expressly allege that it brings derivative claims, but the clear

4 gravamen of Evergreen's complaint is alleged injury to the corporation and alleged dissipation 5 of the corporate assets. Examples of such allegations include the following: 6 7 8 9 10 11 12 13 14 15 16 17 · · · · "The Wal-Mart vendor number is the principal asset of BetaBake. Without the vendor number, Evergreen would never have agreed to purchase BetaBake. Barnes' conduct destroyed the value of BetaBake." (Complaint, ¶ 35.) "[E]vergreen discovered that on August 13, 2007, Don Barnes had removed $125,000 from the BetaBake account in the form of a payment to Delk (a company wholly owned by Barnes). (Complaint, ¶ 40.) "Barnes has depleted the account so that there is not sufficient money to pay the BetaBake taxes and has failed to file the corporate tax returns." (Complaint, ¶ 47.) "Barnes has breached his fiduciary duty by causing the loss of the BetaBake Wal-Mart vendor number, by selling poor quality product into Wal-Mart using the BetaBake vendor number, by preventing Evergreen access to BetaBake's records and bank account, by unilaterally authorizing distributions out of the BetaBake account for Barnes' benefit, by failing to file the 2007 tax return and by depleting the BetaBake bank account so it could not meet its obligations. (Complaint, ¶ 51.)

California Courts have long held that an action is derivative if "the gravamen of the

18 complaint is injury to the corporation, or to the whole body of its stock or property without any 19 severance of distribution among individual holders, or if it seeks to recover assets for the 20 corporation or to prevent the dissipation of its assets." (Schuster v. Gardner (2005) 127 21 Cal.App.4th 305, 313 [quoting Jones v. H.F. Ahmanson & Co. (1969) 1 Cal.3d 93, 106-107].) 22 As a matter of law, Evergreen's breach of fiduciary duty cause of action is derivative in nature. 23 (See Avikian v. WTC Financial Corp. (2002) 98 Cal.App.4th 1108, 1111-1115; Schuster v. 24 Gardner, supra, 127 Cal.App.4th at 313-315.) Moreover, Evergreen's complaint is derivative 25 because the gravamen of the complaint is injury to BetaBake. 26 / / / 27 / / / 28
6 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SECURITY Case No. 08-cv-1438 WQH WMc

Case 3:08-cv-01438-WQH-WMC

Document 8-2

Filed 08/13/2008

Page 7 of 8

1 E. 2 3 4

THERE IS NO REASONABLE POSSIBILITY THAT ONE OF EVERGREEN'S CAUSES OF ACTION WILL BENEFIT THE CORPORATION. 1. On Its face, Evergreen's Complaint Satisfies Defendant's Slight Burden.

There is no reasonable possibility that one (or more) of the causes of action will benefit

5 BetaBake or its shareholders. (Corp. Code, § 800(c)(1).) This showing need be made as to only 6 one cause of action. (Bailey v. Fosca Oil Co. (1960) 180 Cal.App.2d 289, 296-297.) 7 The first cause of action for breach of fiduciary duty against Barnes shows there is no

8 reasonable possibility that the complaint will benefit BetaBake. While Evergreen alleges 9 mismanagement and dissipation of BetaBake assets, the cause of action does not seek to return 10 any funds or assets to BetaBake. Instead, Evergreen seeks to benefit only Evergreen because 11 this cause of action seeks payment of compensatory and punitive damages directly to 12 Evergreen. (Complaint, ¶¶ 52-53.) BetaBake cannot possibly benefit if it will not recover any 13 funds or assets. Moreover, since BetaBake has two shareholders (Barnes and Evergreen), its 14 shareholders cannot possibly benefit if BetaBake assets are delivered to only one of the two 15 shareholders. 16 The second cause of action likewise shows there is no reasonable possibility that the

17 complaint will benefit BetaBake. Although Evergreen labeled the second cause of action 18 "breach of contract" Evergreen also alleges mismanagement and dissipation of BetaBake 19 assets. 3 Again, Evergreen does not seek the return of any funds or assets BetaBake. Evergreen 20 seeks damages only for itself. (Complaint, ¶ 61.) BetaBake cannot possibly benefit if it will not 21 recover any funds or assets. Nor will the shareholders of BetaBake benefit if damages are 22 awarded to one shareholder to the exclusion of the other shareholder. 23 Finally, the third cause of action for conversion also shows no reasonable possibility of

24 benefit to BetaBake. Evergreen alleges that Barnes, Delk and other defendants conspired to 25
With regard to the allegations in paragraphs 59 and 60, Evergreen is referring to its own contract with 26 BetaBake regarding the sales of lavender and cedar sticks developed by Evergreen. Evergreen's cause of action is properly against BetaBake, the other party to the contract, not against Barnes in his 27 capacity as BetaBake's president. Clearly, Evergreen's cause of action against BetaBake can have no benefit to BetaBake.
3

28

7 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SECURITY

Case No. 08-cv-1438 WQH WMc

Case 3:08-cv-01438-WQH-WMC

Document 8-2

Filed 08/13/2008

Page 8 of 8

1 convert BetaBake funds for Barnes' personal use or the use of Delk. But Evergreen seeks 2 damages for itself, only, including punitive damages. (Compliant, ¶¶ 66-67.) On its face, the 3 conversion cause of action is not intended to benefit BetaBake in any way. 4 None of the causes of action alleged will benefit BetaBake. Because Barnes need only

5 show that there will be no benefit to BetaBake as to one cause of action (Bailey v. Fosca Oil 6 Co., supra, 180 Cal.App.2d at 296-297), which he has done, this Motion should be granted. 7 8 9 2. The Amount of Probable Reasonable Expenses of the Defendants, Including Attorney's Fees, Is Well in Excess of $50,000. As shown in the Declaration of Monty A. McIntyre filed in support of this motion,

10 Barnes' costs and attorney's fees in this litigation will likely exceed $50,000. (McIntyre 11 Declaration, ¶ 3.) Security in the amount of $50,000 should be ordered. 12 13 14 III. CONCLUSION The motion for security should be granted because Evergreen's action is a derivative

15 action based upon the gravamen of the complaint, at least one of the causes of action will not 16 benefit the corporation, and the costs of defending Evergreen's action are likely to exceed 17 $50,000. For these reasons, the Court should grant this Motion and require Evergreen to 18 provide $50,000 in security for Barnes' costs and attorney's fees in this action. 19 20 Dated: August 13, 2008 21 22 23 24 25 26 27 28
8 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR SECURITY Case No. 08-cv-1438 WQH WMc

SELTZER CAPLAN McMAHON VITEK A Law Corporation By: /s/ Monty A. McIntyre

Monty A. McIntyre Wes E. Henricksen Attorneys for Defendant DON BARNES, an individual.

Case 3:08-cv-01438-WQH-WMC

Document 8-3

Filed 08/13/2008

Page 1 of 2

Case 3:08-cv-01438-WQH-WMC

Document 8-3

Filed 08/13/2008

Page 2 of 2

Case 3:08-cv-01438-WQH-WMC

Document 8-4

Filed 08/13/2008

Page 1 of 2

1 Monty A. McIntyre, Esq. (SBN 95796) 2 SELTZER CAPLAN MCMAHON VITEK 3 A Law Corporation

Wes E. Henricksen, Esq. (SBN 246712)

750 B Street, 2100 Symphony Towers
4 San Diego, California 92101-8177 5 Telephone: 6 7 8 9 10

(619) 685-3003; Facsimile: (619) 685-3100 [email protected]; [email protected] Attorneys for Defendants DON BARNES and DELK PRODUCTS, INC. UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA ) CASE NO. 08-cv-1438 WQH WMc ) ) ) DECLARATION OF MONTY A. ) McINTYRE IN SUPPORT OF ) DEFENDANT DON BARNES' ) MOTION FOR AN ORDER ) REQUIRING PLAINTIFF TO ) PROVIDE SECURITY FOR COSTS ) AND FEES ) October 6, 2008 ) DATE: 11 a.m. ) TIME: Hon. William Q. Hayes ) JUDGE: DEPT: Courtroom 4 ) ) COMPLAINT FILED: June 30, 2008 Not Yet Set ) TRIAL DATE:

EVERGREEN RESEARCH AND 11 MARKETING, LLC,
12 13 14

Plaintiff, vs.

DON BARNES, an individual; and DELK PRODUCTS, INC.; LARRY KAIN, an 16 individual; PINNACLE NATIONAL BANK; and DOES 1-20, inclusive,
15 17 18 19 20 21 22 23 24

Defendants.

I, MONTY A. McINTYRE, declare and state as follows:

1.

I am a shareholder with the law firm of Seltzer Caplan McMahon Vitek, attorneys of

25 record for Defendant DON BARNES ("Barnes"). I have personal knowledge of the facts set forth in 26 this Declaration and could and would testify competently to those facts if called as a witness. 27

2.

Based upon information provided by Mr. Barnes, my understanding is that as of the date

28 of this declaration neither Barnes nor Delk Products, Inc. ("Delk") have been properly served with a
DECLARATION OF MONTY A. McINTYRE Case No. 08-cv-1438 WQH WMc

Case 3:08-cv-01438-WQH-WMC

Document 8-4

Filed 08/13/2008

Page 2 of 2

1 summons or complaint in this action. I am informed that a copy of the summons and complaint was 2 delivered to the Delk office in Tennessee on approximately July 9, 2008, but it was not personally 3 delivered to Mr. Barnes or to any person authorized to accept service on behalf of Delk. I am further 4 informed that on approximately August 7, 2008, a copy of the summons and complaint was mailed to 5 the Delk office. 6

3.

As one of the attorneys representing Mr. Barnes at this firm, I am familiar with the

7 litigation in this case and the files maintained at this office. Based on my jury and judge trial 8 experience in both the state and federal courts, my experience in representing defendants in business 9 cases like this one, and the scope of the allegations in Plaintiff's complaint, I estimate that Mr. Barnes 10 (as well as Delk) will incur more than $50,000 in attorney's fees and costs as this litigation moves 11 forward. 12 I declare under penalty of perjury under the laws of the United States of America that the

13 foregoing is true and correct, and that this declaration was executed on August 13, 2008, at San Diego, 14 California. 15 16 17 18 19 20 21 22 23 24 25 26 27 28
2 DECLARATION OF MONTY A. McINTYRE Case No. 08-cv-1438 WQH WMc

/s/ Monty A. McIntyre

Case 3:08-cv-01438-WQH-WMC

Document 8-5

Filed 08/13/2008

Page 1 of 1