Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_08-cv-00225/USCOURTS-cand-3_08-cv-00225-9/pdf.json

Nature of Suit Code: 423
Nature of Suit: Bankruptcy Withdrawal 28 USC 157
Cause of Action: 28:0157 Motion for Withdrawal of Reference

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United States District Court 

For the Northern District of California 

IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF CALIFORNIA 

YUGEN KAISHA, Y.K.F., 

Plaintiff, 

v. 

STEPHANIE DODSON, 

Defendant.

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Case No. 08-0225 SC 

ORDER DENYING PLAINTIFF 

INTERVENOR'S MOTION FOR 

ATTORNEY FEES

STEPHANIE DODSON, 

 Counter-Claimant, 

 

 v. 

YUGEN KAISHA, Y.K.F., 

 Counter-Defendant. 

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MARTIN F. TRIANO, d/b/a LAW 

OFFICES OF MARTIN F. TRIANO, 

 Plaintiff Intervenor, 

 v. 

YUGEN KAISHA, Y.K.F., and 

STEPHANIE DODSON, 

 Intervenor Defendants. 

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I. INTRODUCTION

 After a seven-day bench trial, the Court issued its Findings 

of Fact and Conclusions of Law and entered Judgment in this case on 

February 19, 2010. See Docket Nos. 111 ("FFCOL"), 112 

("Judgment"). Now before the Court is a Motion for Attorney Fees 

Case 3:08-cv-00225-SC Document 125 Filed 06/09/10 Page 1 of 11
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United States District Court

For the Northern District of California 

filed by Plaintiff-Intervenor Martin F. Triano, d/b/a Law Offices 

of Martin Triano ("LOMT"). Docket No. 116 ("Mot."). Plaintiff 

Yugen Kaisha, Y.K.F. ("YKF"), and Defendant Stephanie Dodson 

("Dodson"), oppose the Motion. Docket Nos. 121 ("YKF Opp'n"), 122 

("Dodson Opp'n"). LOMT filed a Reply. Docket No. 123 ("Reply"). 

For the reasons stated herein, the Motion is DENIED. 

II. BACKGROUND

 This action concerned shares in Smart Alec's Intelligent Food, 

Inc. ("Smart Alec's"), a fast-food restaurant located in Berkeley, 

California. YKF filed this action to set aside a fraudulent 

transfer of 3,744,000 shares of Smart Alec's ("the shares") from 

Alexander Popov ("Popov") to Dodson prior to Popov filing for 

bankruptcy in September 2005. This action began as an adversary 

proceeding in Bankruptcy Court. See Yugen Kaisha, Y.K.F. v. 

Dodson, Adversary Proceeding No. 07-3104 (Bankr. N.D. Cal.). The 

case was transferred to this Court after Dodson filed a 

counterclaim and would not consent to a jury trial in Bankruptcy 

Court. See Adv. Docket No. 24 ("Certificate for Withdrawal of 

Reference and Assignment to District Judge"). The Court permitted 

LOMT to intervene in this dispute. Docket No. 20 ("Aug. 18, 2008 

Order"). 

After a seven-day bench trial, lasting from January 19, 2010, 

to January 27, 2010, this Court concluded that the transfer of 

shares between Popov and Dodson was fraudulent, that Dodson was not 

entitled to any relief under her counterclaim, and that the shares 

in Smart Alec's are subject to a lien established by a Promissory 

Note between LOMT and Popov. See Docket No. 111 ("FFCOL"). 

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United States District Court

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The Court entered Judgment for YKF and against Dodson with 

respect to YKF's first two causes of action for fraudulent 

transfer, thereby rendering void the transfer of the shares from 

Popov to Dodson. See Docket No. 112 ("Judgment"). The Court 

transferred all interest that Dodson possessed in the shares to 

YKF, and noted that YKF's interest in the shares is subordinate to 

the interest of LOMT and Summit Bank. See id. The Court entered 

Judgment in favor of YKF and against Dodson as to her counterclaim. 

The Court also entered Judgment in favor of LOMT as to LOMT's 

claim for declaratory judgment. See id. The Court declared that 

LOMT has a valid lien on the shares, but that the value of this 

lien may not exceed the amount owed LOMT for the legal 

representation that LOMT provided Popov in connection with the 

Hayashi litigation. See id. This Court did not reach the issue of 

whether LOMT's lien is junior or senior to the lien held by Summit 

Bank. See id. It is also not clear to the Court whether LOMT will 

be able to enforce the lien in an action filed in Alameda County 

Superior Court prior to seeking intervention in this case. See

FFCOL at 31-32. 

LOMT now seeks attorney fees because the provisions of the 

Promissory Note and Guaranty, which created the lien, allow 

attorney fees to be awarded to the prevailing party in any action 

to enforce or interpret its provisions. Mot. at 2. LOMT claims to 

have incurred $171,163.50 in attorney fees. Id. at 3. 

III. LEGAL STANDARD

The American rule, under which each party to a lawsuit must 

ordinarily pay his or her own attorney fees, does not apply when a 

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United States District Court

For the Northern District of California 

party sues under a contract that includes a fee award to the 

prevailing party. See Alyeska Pipeline Serv. Co. v. Wilderness 

Soc'y, 421 U.S. 240, 257-59 (1975) (noting that exceptions to 

American rule include requests for attorney fees based on statute 

or enforceable contract). Whether a creditor in federal bankruptcy 

proceedings is entitled to a contractual attorney fee award is a 

question governed by state law. In re Fobian, 951 F.2d 1149, 1153 

(9th Cir. 1991) (overruled on other grounds by Travelers Cas. and 

Sur. Co. of America v. Pacific Gas and Elec. Co., 549 U.S. 443, 452 

(2007)). California law provides, in part, that: 

In any action on a contract, where the contract 

specifically provides that attorney's fees and 

costs, which are incurred to enforce that 

contract, shall be awarded either to one of the 

parties or to the prevailing party, then the 

party who is determined to be the party 

prevailing on the contract, whether he or she 

is the party specified in the contract or not, 

shall be entitled to reasonable attorney's fees 

in addition to other costs. 

Cal. Civ. Code § 1717(a). Section 1717 further provides that the 

court "shall determine who is the party prevailing on the 

contract." Id. at § 1717(b)(1). "[T]he party prevailing on the 

contract shall be the party who recovered a greater relief in the 

action on the contract. The court may also determine that there is 

no party prevailing on the contract for purposes of this section." 

Id.

IV. DISCUSSION

A. The Promissory Note

Starting in 2001, LOMT represented Popov in a number of 

different lawsuits, including a suit concerning ownership of a 

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United States District Court

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record-breaking baseball ("the Hayashi litigation"), an action 

involving Popov's business venture, Man.com ("the Man.com 

litigation"), and a lawsuit brought by YKF against Popov, Dodson, 

and Smart Alec's ("the YKF litigation"). Due to concern about 

Popov's ability to pay accumulating attorney fees, LOMT provided 

Popov with a copy of a Promissory Note on April 15, 2002. PI Ex. 

304 ("Promissory Note").1 Popov signed the Promissory Note on 

April 17, 2002. Id. at 2, 3. 

The Promissory Note states that it is for $45,648.54, 

"together with such additional sums which may accrue from legal 

services being provided by the Martin F. Triano dba Law Offices of 

Martin Triano." Id. at 1. The Note is secured by "[a]ll shares 

held in Smart Alecs Restaurant [sic]." Id. The Promissory Note 

states that "[in] the event that the Law Offices of Martin Triano 

needs to bring any action to enforce (including foreclosure) or 

interpret the provisions of this note, the prevailing party shall 

be entitled to attorney's fees." Id. at 2. 

In August of 2002, Popov fully paid LOMT the legal fees due 

for work performed in connection with the Man.com litigation. 

Def.'s Ex. 518 ("Man.com August Bill") at 1. When Popov discharged 

LOMT in May of 2003, Popov still owed LOMT a substantial amount of 

money for the Hayashi Litigation (bills issued by LOMT stated the 

amount as $473,402.65). See PI Ex. 306 ("Proof of Claim") Ex. C 

("Hayashi Bills") at 157. When Popov filed for bankruptcy in 

September of 2005, he still owed LOMT the same amount. Id. Ex. A 

("Statement of Claim") at 2. In the bankruptcy proceeding, a total 

 

1

 This Order will use the prefix "PI" (for "Plaintiff-Intervenor") 

to designate exhibits presented by LOMT during trial. 

 

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United States District Court

For the Northern District of California 

of $238,192.75 was paid to Martin F. Triano as a secured creditor.2 

See Pl.'s Ex. 131 ("Trustee's Report of Distribution") at 2. 

This Court determined that the Promissory Note gave LOMT a 

valid lien on the Smart Alec's shares that Popov possessed in April 

2002, but that the value of the lien may not exceed the amount owed 

LOMT in connection with the Hayashi litigation. FFCOL at 36-37. 

LOMT now seeks attorney fees of $171,163.50 based on the attorney 

fee provision in the Promissory Note. Mot. at 9-10. 

B. LOMT Is Not Entitled to Recover Attorney Fees

LOMT claims entitlement to attorney fees against YKF and 

Dodson because LOMT was a prevailing party in this action. Mot. at 

9-10. The Court does not need to decide the question of whether 

LOMT was a prevailing party. Assuming, arguendo, that LOMT was a 

prevailing party, the Court finds that LOMT is not entitled to 

recover attorney fees for work performed by the Law Offices of 

Triano & Byrne. LOMT claims to have incurred $171,163.50 in 

attorney fees "[f]rom the time the Law Offices of TRIANO & Byrne 

received the Notice of the Assignment of the Personal Property to 

YKF from the POPOV Bankruptcy estate on June 26, 2007 to the 

present." Byrne Decl. ¶ 2.3

YKF contends that LOMT and the Law Offices of Triano & Byrne 

are the same firm, and that LOMT simply changed its name when Byrne 

obtained partnership status. Opp'n at 11. In Trope v. Katz, the 

 

2

 The Trustee's Report indicates the distribution was made to 

Martin F. Triano, rather than to the Law Offices of Martin F. 

Triano. 

3

 Mark D. Byrne ("Byrne"), the attorney of record for Martin F. 

Triano d/b/a Law Offices of Martin F. Triano, submitted a 

Declaration in Support of the Motion for Attorney Fees. Docket No. 

116-2. 

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United States District Court

For the Northern District of California 

California Supreme Court held that "an attorney who chooses to 

litigate in propria persona and therefore does not pay or become 

liable to pay consideration in exchange for legal representation" 

cannot recover attorney fees under section 1717. 11 Cal. 4th 274, 

292 (1995). Trope concerned a law firm's attempt to recover under 

a contractual fee provision after obtaining a jury verdict awarding 

the firm unpaid attorney fees. Id. at 277-78. Since the law firm 

represented itself, it did not incur attorney fees, and was not 

entitled to such an award. Id. at 278-82. YKF contends that since 

LOMT and the Law Offices of Triano & Byrne are the same firm, Trope

bars LOMT from recovering attorney fees in this case. Opp'n at 11. 

LOMT responds that the Law Offices of Triano & Byrne is not 

the same as LOMT because Byrne "will share in a portion of a 

recovery of the fees recovered herein." Reply at 11; Supplemental 

Byrne Decl. ¶ 3.4 This statement does not establish that LOMT and 

the Law Offices of Triano & Byrne are distinct law firms. Indeed, 

the evidence presented to the Court during this litigation 

indicates otherwise. Byrne worked at LOMT, he discussed the 

Promissory Note with Popov, and he represented Popov during the 

Hayashi litigation, the Man.com litigation, and the YKF litigation. 

FFCOL at 15 n.9, 16. The time sheets submitted in support of this 

Motion show that LOMT and the Law Offices of Triano & Byrne have 

the same mailing address. See Byrne Decl. Ex. A ("Time Sheets"). 

The names of the two law firms indicate that Martin F. Triano is a 

member of both. 

 

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 Byrne, the attorney of record for Martin F. Triano d/b/a Law 

Offices of Martin F. Triano, submitted a Supplemental Declaration 

in Support of the Motion for Attorney Fees. Docket No. 124. 

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United States District Court

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LOMT states that the only fees being sought are those incurred 

by attorneys other than Martin F. Triano ("Triano"), Reply at 11, 

but this statement is false. The time sheet entries dated July 5, 

2007, July 11, 2007, September 20, 2007, October 10, 2007, October 

17, 2007, December 3, 2007, December 5, 2007, December 6, 2007, 

January 4, 2008, January 7, 2008, and August 27, 2008, show that 

the Law Offices of Triano & Byrne is seeking reimbursement for work 

performed by Triano. See Time Sheets. Putting all of this 

together, the Court finds that LOMT and the Law Offices of Triano & 

Byrne are the same law firm with a different name.5

 

 LOMT relies on Gilbert v. Master Washer & Stamping Co., 87 

Cal. App. 4th 212, 214 (Ct. App. 2001), where the California Court 

of Appeal held that "a lawyer represented by other members of his 

law firm is entitled to recover reasonable attorney fees where the 

representation involved the lawyer's personal interests and not 

those of the firm." See Reply at 8-12. The case is 

distinguishable. Here, LOMT intervened to vindicate its lien based 

on a Promissory Note. Byrne worked on the cases that led to the 

Promissory Note, see FFCOL at 15 n.9, 16, and the time sheets 

submitted in support of this Motion seek reimbursement for work 

performed by Triano, see Time Sheets. LOMT, therefore, has not 

established a clear distinction between its interests, and those of 

 

5

 YKF also points out that the website http://trianobyrne.com 

states that "The Law Offices of Martin F. Triano" has become "The 

Law Offices of Triano & Byrne." YKF did not request the Court to 

take judicial notice of this website, and even if YKF had, the 

Court doubts it would have done so, because the statement on the 

website is exactly what is in dispute. Even without considering 

the website, the evidence is sufficient for the Court to conclude 

that LOMT and the Law Offices of Triano & Byrne are the same firm 

with a different name. 

 

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United States District Court

For the Northern District of California 

the Law Offices of Triano & Byrne. LOMT has presented no evidence 

of a retainer agreement between LOMT and the Law Offices of Triano 

& Byrne, and there is no evidence of a true attorney-client 

relationship between these two entities, especially given that the 

Law Offices of Triano & Byrne is billing for work performed by the 

supposed client. 

This case is simply not one where an attorney is represented 

by members of his own law firm concerning a personal matter 

unrelated to the firm's interests. Instead, it is clear that LOMT 

and the Law Offices of Triano & Byrne are the same firm with a 

different name, and so LOMT represented itself in this action. 

Hence, LOMT cannot recover fees for work performed by the Law 

Offices of Triano & Byrne. See Witte v. Kaufman, 141 Cal. App. 4th 

1201, 1211-12 (Ct. App. 2006) (finding that law firm could not 

recover fees where firm's own attorneys represented it, and where, 

in doing so, they were representing their own interests). 

The other cases cited by LOMT can also be distinguished. In 

PLCM Group, Inc. v. Drexler, 22 Cal. 4th 1084 (2000), the 

California Supreme Court allowed a corporation represented by inhouse counsel to recover attorney fees. In Farmers Insurance

Exchange v. Law Offices of Conrado Joe Sayas, Jr., 250 F.3d 1234, 

1238 (9th Cir. 2001), the Ninth Circuit, interpreting California 

law, determined that two law firms that had jointly represented a 

client, and who subsequently hired each other to recover the 

contingent fee due under the initial client retainer agreement, 

were entitled to attorney fees. In Mix v. Tumanjan Development 

Corp., 102 Cal. App. 4th 1318, 1324-25 (Ct. App. 2002), the court 

allowed for recovery of attorney fees where the attorney actively 

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participated in the proceedings but was not an attorney of record. 

In Moran v. Oso Valley Greenbelt Association, 117 Cal. App. 4th 

1029, 1035-36 (Ct. App. 2004), the court allowed a litigant who 

worked as a paralegal for attorneys who represented her pro bono to 

recover attorney fees. 

In each of these cases, there existed an attorney-client 

relationship, with distinct interests between the attorney and the 

client. See PLCM Group, 22 Cal. 4th at 1093; Farmers Ins.

Exchange, 250 F.3d at 1238-39; Mix, 102 Cal. App. 4th at 1324-25; 

Moran, 117 Cal. App. 4th at 1036. In this case, where Byrne worked 

for LOMT, and where the Law Offices of Triano & Byrne submitted 

bills that include work performed by Triano, there is no clear 

attorney-client relationship, and there are overlapping interests 

such that LOMT is not entitled to an award of fees for the work 

performed by the Law Offices of Triano & Byrne.6

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 Based on the foregoing, there is no need for the Court to reach 

LOMT's argument that YKF is liable as the successor-in-interest to 

the ownership of the shares, or the argument that YKF is liable as 

the alter ego of Smart Alec's. 

 

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United States District Court

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V. CONCLUSION

 The Court finds that Plaintiff-Intervenor Martin F. Triano, 

d/b/a Law Offices of Martin Triano, is not entitled to recover 

attorney fees from YKF or Dodson for work performed by the Law 

Offices of Triano & Byrne. Therefore, the Court DENIES the Motion 

for Attorney Fees. 

 

IT IS SO ORDERED. 

Dated: June 9, 2010 

UNITED STATES DISTRICT JUDGE

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