Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 LIBERTY MUTUAL INSURANCE Case No. 25-cv-0619-BAS-JLB COMPANY, 12 ORDER GRANTING IN PART AND Plaintiff, 13 DENYING IN PART PLAINTIFF’S v. MOTION FOR PARTIAL 14 SUMMARY JUDGMENT COFFMAN SPECIALTIES, INC., et al., 15 (ECF No. 39) Defendants. 16 17 18 Pending before the Court is a motion for partial summary judgment on Counts 1 19 (Breach of Contract) and 3 (Specific Performance) (“Motion”) submitted by Plaintiff 20 Liberty Mutual Insurance Company (“Liberty”). (ECF No. 39.) For the reasons below, 21 the Court GRANTS IN PART and DENIES IN PART Liberty’s Motion. (ECF No. 39.) 22 I. BACKGROUND 23 Liberty is an insurance company that, as relevant here, issues surety bonds for 24 construction projects. Defendant Coffman Specialties, Inc. (“Coffman Inc.”) is a general 25 engineering construction contractor based in San Diego that primarily contracts with the 26 California Department of Transportation and other public entities to perform work for 27 highways and airfield runways. (ECF No. 54-2 ¶ 3.) Since Coffman Inc. primarily works 28 1 on public projects, government contracts routinely require Coffman Inc. to provide 2 performance and payment bonds—such as those provided by Liberty. (Id. ¶¶ 3, 4.) 3 On June 18, 2008, Defendants Coffman Inc., DT Trucking LLC, James Coffman, 4 Colleen Coffman, and Sky Trek LLC executed the General Agreement of Indemnity 5 (“GAI”) in favor of Safeco Insurance Companies for the purpose of indemnifying Safeco 6 from all loss and expenses in connection with bonds issued for principals Coffman Inc. and 7 Sim J. Harris (not a named party in this action). (ECF No. 39-3, Ex. A at 2–4.) 8 Sureties under the GAI include any one or combination of the following entities: Safeco Insurance Company of America; General Insurance Company 9 of America; First National Insurance Company of America; Safeco National 10 Insurance Company; American States Insurance Company; American Economy Insurance Company; any person or company joining with any of the 11 aforesaid companies in executing any Bond, executing any Bond at their 12 request or providing reinsurance to them with respect to any Bond and any subsidiaries, successors, and assigns thereof. 13 14 (ECF No. 39-3, Ex. A, “Surety” clause.) 15 Over time, through addenda, the remaining Defendants were added as signatories to 16 the GAI.1 17 On August 10, 2017, at the request of Safeco, an affiliate of Liberty, Liberty issued 18 two bonds to back Coffman Inc.’s obligations as a subcontractor to Connect 202 Partners 19 (“C202”) on the Arizona Loop 202 Mountain Freeway project to perform concrete paving 20 (“C202 Paving Project”). Specifically, Liberty issued: (1) a “Performance Bond” 21 guaranteeing Coffman Inc. will complete its concrete paving work under the subcontract; 22 and (2) a “Payment Bond” guaranteeing Coffman Inc. will pay its own subcontractors, 23 laborers, and suppliers—protecting downstream parties from unpaid claims. (ECF Nos. 24 25 1 A series of additional parties were later added through Signature Addenda, each stating it became 26 part of the June 18, 2008 agreement (and identifying Safeco Insurance Company of America as a member of the Liberty Mutual Group): Defendant Scripps Park West, LLC (added on February 25, 2010), 27 Defendants DLTCM, LLC and CTDM, LLC (added on November 15, 2011), Defendants James A. Coffman and Colleen T. Coffman, as trustees for the Coffman Family Trust Dated 9/22/08 (added on 28 1 39-1 ¶ 20; 39-19, Ex. J.) The two bonds name C202 as obligee. (Id.) On August 17, 2017, 2 one week after Liberty issued the bonds, C202 and Coffman Inc. executed the paving 3 subcontract. (ECF No. 39-1 at 7:21–23 (citing ECF No. 39-3, Ex. G).) 4 On September 20, 2019, C202 issued a Notice of Default to Coffman Inc. On 5 October 4, 2019, C202 issued a Notice of Termination to Coffman Inc. and submitted a 6 subsequent Performance Bond claim to Liberty on the same day as issuing the Notice of 7 Termination. On July 23, 2020, Coffman Inc. sued C202 in the Superior Court of 8 Arizona—claiming it was owed money for work performed. On October 29, 2020, C202 9 counterclaimed against Coffman Inc. and Liberty (as surety on the Performance Bond), 10 claiming $7.46 million. Eventually, on July 8, 2025, the Arizona Superior Court issued a 11 post-trial under-advisement ruling in favor of C202—awarding $5,611,713 against 12 Coffman Inc. and noting Liberty’s liability. (ECF No. 39-20, Ex. Q at 2772.) C202 applied 13 for an additional $3.85 million in fees, costs, and Rule 68(g) sanctions. (ECF No. 39-20, 14 Ex. R at 2781.) 15 Meanwhile, prior to the Arizona court’s advisement ruling on July 8, 2025 but after 16 C202’s counterclaims, Liberty made two written collateral demands to Defendants ($6.5 17 million in collateral or discharge to Coffman Inc., James Coffman, and Colleen Coffman; 18 and $6.5 million in collateral or discharge to all Defendants). (ECF Nos. 1; 39-2 ¶¶ 36, 37, 19 39, 41; 39-20, Exs. S, T, U, V.) On June 3, 2025, Liberty made a third demand for collateral 20 “sufficient to cover [Liberty]’s exposure under the Bonds.” (ECF Nos. 39-2 ¶ 39; 39-20, 21 Ex. U.) After the Arizona court’s ruling but before C202’s application for the additional 22 $3.85 million, Liberty made a fourth demand for $6.5 million in collateral on July 10, 2025. 23 (ECF No. 39-2 ¶¶ 41, 42; ECF No. 39-20, Ex. V.) 24 Liberty initiated the present action against Defendants on March 15, 2025. The 25 present case involves whether Defendants are now required to follow through on that GAI 26 by: (1) covering Liberty’s expenses incurred in connection with Defendants’ default on a 27 public works construction project and subsequent lawsuit in Arizona state court (per 28 Liberty’s breach of contract cause of action, or Count 1); and (2) posting collateral to cover 1 potential losses currently awarded by Arizona state court but that are on appeal (per 2 Liberty’s specific performance cause of action, or Count 3). 3 On December 5, 2025, Liberty filed the present partial motion for summary 4 judgment against all Defendants on Counts 1 and 3. (ECF No. 39.) On April 17, 2026, 5 Defendants filed their opposition. (ECF No. 54.) On April 24, 2026, Liberty replied. (ECF 6 No. 56.) 7 On May 13, 2026, Defendants filed a sur-reply stating that Coffman Inc. had applied 8 for a roughly $11.9 million supersedeas bond from Berkshire Hathaway Specialty 9 Insurance to be posted in the Arizona litigation (which would stay enforcement of the 10 Arizona judgment while Coffman Inc. pursues its post-judgment appeal). (ECF No. 60.) 11 The Court held oral argument. (ECF No. 64.) 12 II. LEGAL STANDARD 13 Summary judgment is appropriate on “all or any part” of a claim if there is an 14 absence of a genuine issue of material fact and the moving party is entitled to judgment as 15 a matter of law. Fed. R. Civ. P. 56; see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 16 (1986). A fact is material when, under the governing substantive law, it could affect the 17 outcome of the case. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986). A dispute 18 is genuine if a reasonable jury could return a verdict for the nonmoving party. Anderson, 19 477 U.S. at 248. 20 A party seeking summary judgment always bears the initial burden of establishing 21 the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. The moving 22 party can present evidence that negates an essential element of the nonmoving party’s case 23 or demonstrate that the nonmoving party failed to establish an essential element of the 24 nonmoving party’s case on which the nonmoving party bears the burden of proof at trial. 25 Id. at 322–23. Once the moving party establishes the absence of genuine issues of material 26 fact, the burden shifts to the nonmoving party to set forth facts showing that a genuine issue 27 of disputed fact remains. Celotex, 477 U.S. at 322. The nonmoving party cannot oppose 28 1 a properly supported summary judgment motion by “rest[ing] on mere allegations or 2 denials of his pleadings.” Anderson, 477 U.S. at 256. 3 When ruling on a summary judgment motion, the court must view all inferences 4 drawn from the underlying facts in the light most favorable to the nonmoving party. 5 Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The Court 6 does not make credibility determinations with respect to evidence offered. See T.W. Elec. 7 Serv., Inc. v. Pac. Elec. Contractors Ass’n, 809 F.2d 626, 630–31 (9th Cir. 1987) (citing 8 Matsushita, 475 U.S. at 587). Summary judgment is therefore not appropriate “where 9 contradictory inferences may reasonably be drawn from undisputed evidentiary facts.” 10 Hollingsworth Solderless Terminal Co. v. Turley, 622 F.2d 1324, 1335 (9th Cir. 1980). 11 III. ANALYSIS 12 A. Choice of Law 13 As a threshold matter, the Court finds California law governs the claims at issue. 14 When directly asked by the Court at oral argument, Parties did not object to the application 15 of California law to Counts 1 and 3. (ECF No. 64.) Liberty applies California law to Count 16 1 in its Complaint and Motion for Summary Judgment (ECF No. 39-1 at 13:12–19:8), and 17 Defendants do not expressly contest such application (ECF No. 54 at 7 n.4). As such, the 18 Court finds that, for purposes of deciding Liberty’s Motion, California law governs 19 Liberty’s breach of contract claim. 20 B. Count 1: Breach of Contract 21 1. Legal Standard 22 Under California law, the elements for breach of contract are: (1) the contract; (2) 23 Liberty’s performance or excuse for nonperformance; (3) Defendants’ breach; and (4) the 24 resulting damages to Liberty. Pauna v. Zurich Ins. Co., No. CV1901365TJHSPX, 2020 25 WL 11339693, at *1 (C.D. Cal. Feb. 13, 2020) (citing Hamilton v. Greenwich Investors 26 XXVI, LLC, 195 Cal. App. 4th 1602, 1614 (2011)). Contract interpretation is a matter of 27 law reserved for the Court. Cervantes v. W. End 3199 REO LLC, No. 17-CV-06100-VKD, 28 1 2019 WL 2744689, at *9 (N.D. Cal. July 1, 2019) (citing Morey v. Vannucci, 64 Cal. App. 2 4th 904, 911 (1998)). 3 2. Defendants’ Obligation to Liberty Under GAI 4 Liberty moves for summary judgment on Count 1, arguing: (1) Liberty qualifies as 5 a “Surety” under the GAI; and (2) Liberty performed as a “Surety” by issuing the 6 Performance Bond and Payment Bond on the C202 Paving Project to Defendants. (ECF 7 No. 39-1 at 14:1–15:27.) 8 Liberty claims it is a “Surety” under the GAI. (ECF Nos. 39-1 at 14:6–11; 39-2 ¶ 3.) 9 Relatedly, Liberty cites signed addenda to the GAI stating that Safeco Insurance Company 10 is “a member of Liberty Mutual Group for which Liberty Mutual Surety underwrites surety 11 business, on behalf of Coffman Specialties Inc. . . .” (ECF No. 39-2 ¶¶ 3, 8–11; ECF No. 12 39-3, Exs. B, C, D, E (“Signature Addenda”).) 13 Given that Safeco Insurance Company is a “Surety” under the GAI, Liberty is also 14 a “Surety” who is entitled to indemnity from Defendants under the GAI because of 15 Liberty’s involvement with Safeco in executing the Performance Bond and Payment Bond. 16 (ECF No. 39-3, Ex. A at 1, “Surety” definition includes “[a]ny one or combination of the 17 following: Safeco Insurance Company of America; General Insurance Company of 18 America; First National Insurance Company of America; Safeco National Insurance 19 Company; American States Insurance Company; American Economy Insurance Company; 20 any person or company joining with any of the aforesaid companies in executing any Bond 21 . . . ” (emphasis added).) Thus, the GAI is a valid contract binding Liberty and Defendants. 22 See Pauna, 2020 WL 11339693, at *1. 23 Furthermore, Liberty performed its obligations under the GAI by issuing the 24 Performance Bond and Payment Bond. In other words, by issuing the relevant bonds, 25 Liberty triggered Defendants’ promises under the GAI (ECF No. 39-1 at 14:6–11 (citing 26 ECF No. 39-3, Ex. A at 1 “In consideration of the execution of any such Bonds for 27 [Coffman Inc.] . . . by Surety, the Undersigned [including Coffman Inc.], jointly and 28 severally, agree . . .”)). See U.S. Ecology, Inc. v. California, 92 Cal. App. 4th 113, 128 1 (2001) (“A promise is not enforceable unless consideration was given in exchange for the 2 promise”); Sonoma Springs Ltd. P’ship v. Fid. & Deposit Co. of Md., 409 F. Supp. 3d 946, 3 952 (D. Nev. 2019) (citing 17 Am. Jur. 2d Contractors’ Bonds § 1 (2019)) (“A performance 4 bond creates a unique three-party relationship where the surety guarantees that in the event 5 the principal . . . defaults on its obligations in the underlying construction contract, the 6 surety will step in and perform”). 7 As evidence that Liberty has executed bonds on behalf of Safeco, Liberty cites a 8 letter dated February 27, 2009 from Vice-President of Safeco Insurance Company of 9 America Timothy A. Mikolajewski to Executive Vice-President of Liberty Gary R. Gregg, 10 stating: 11 Please accept this letter as a request from Safeco Insurance Company of America (‘SICA’) to Liberty Mutual Insurance Company (‘LMIC’) for LMIC 12 to execute surety bonds on behalf of SICA as may be needed. Please sign this 13 letter and return the signed letter to me as LMIC’s acknowledgement and acceptance of SICA’s request. 14 15 (ECF No. 39-1 at 8:3–14 (citing ECF No. 39-19) (“2009 Letter”).) Subsequent to that 16 letter, on August 10, 2017, Liberty executed the Performance Bond and Payment Bond. 17 The Court agrees with Liberty’s interpretation of the GAI. Thus, the Court finds 18 Liberty has met its initial burden to move for summary judgment on the first two elements 19 of breach of contract. 20 Defendants argue that triable issues remain as to whether Liberty is a “Surety” to 21 whom Defendants owe a responsibility under the GAI. More specifically, Defendants 22 argue Liberty’s cited evidence that Liberty qualifies as a “Surety” under the GAI is 23 inadmissible under the Federal Rules of Evidence. (ECF No. 54 at 4:20–5:3.) 24 First, Defendants argue the statement in Luis F. Aragon (Assistant Vice President at 25 Liberty Mutual) (“Aragon”)’s Declaration (“Aragon Declaration”)—“Safeco Insurance is 26 an affiliate of Liberty” (ECF No. 39-2 ¶ 3)—is inadmissible under various Federal Rules 27 of Evidence. (ECF No. 54 at 4:20–5:3.) However, the Court agrees with Liberty and finds 28 the Signature Addenda signed by Defendants provide that signatories’ obligations are 1 “intended to and shall be a part of the Agreement of Indemnity given to Safeco Insurance 2 Company of America.” (See ECF No. 56 at 4:7–11.) The Signature Addenda also provide 3 that Safeco Insurance Company is “a member of Liberty Mutual Group for which Liberty 4 Mutual Surety underwrites surety business, on behalf of Coffman Specialties Inc.” (See 5 Signature Addenda.) Thus, the admissibility of the statement in the Aragon Declaration is 6 not necessary to show Liberty has met its initial burden to move for summary judgment on 7 Count 1. 8 Second, Defendants argue the 2009 Letter (ECF No. 39-19) is inadmissible hearsay 9 under the Federal Rules of Evidence because Aragon lacks personal knowledge (having 10 started working for Liberty in 2013). Thus, Defendants contend, Liberty fails to satisfy the 11 requirements of the business records exception to the hearsay rule, Fed. R. Evid. 803(6). 12 (ECF No. 54 at 5:11–14.) Here, given that Aragon declared under the penalty of perjury 13 that he is “a Custodian of Records of [Liberty]’s files,” he is a custodian capable of 14 authenticating the 2009 Letter as a business record (ECF No. 39-2 ¶ 6). In re Hudson, 504 15 B.R. 569, 575 (B.A.P. 9th Cir. 2014) (“Although Reyes declarations establish that they 16 qualify . . . as custodians”) (emphasis added). There is no requirement of first-hand 17 knowledge. See In re Hudson, 504 B.R. at 575 (“[S]ubsection (6) of FRE 803 does not 18 require the business custodian to certify he or she has first-hand knowledge of the facts set 19 forth in the records being authenticated”); Diemert v. City of Seattle, 776 F. Supp. 3d 922, 20 935 (W.D. Wash. 2025) (citing Orr v. Bank of Am., NT & SA, 285 F.3d 764, 773 (9th Cir. 21 2002) (“A trial court can only consider admissible evidence in ruling on a motion for 22 summary judgment”)). Thus, the Court finds the 2009 Letter is admissible, and 23 Defendants’ arguments as to its inadmissibility do not establish triable issues on Count 1. 24 Even if the 2009 Letter is admissible, Defendants argue the 2009 Letter does not 25 mention the GAI, and thus, does not imply Liberty is a “Surety” under the GAI. (ECF No. 26 54 at 6:19–22.) Defendants point out that the 2009 Letter states Liberty would issue bonds 27 as “needed.” (Id.) Defendants argue the bonds were not “needed” under the 2009 Letter 28 1 because Liberty testified it did not know whether Liberty informed Coffman that Liberty 2 was issuing the relevant bonds on behalf of Safeco. (ECF No. 54-1, Ex. A at 17:9–14.) 3 The Court does not find this argument to be convincing. Whether or not the bonds 4 were “needed,” Parties do not dispute that Liberty issued the Performance Bond and 5 Payment Bond to back Defendants’ subcontract in the C202 Paving Project. Moreover, 6 Defendants do not address Liberty’s argument that the Signature Addenda demonstrate that 7 Liberty is affiliated with Safeco Insurance Company under the GAI. (ECF No. 39-3, Exs. 8 B, C, D, E (Safeco Insurance Company is “a member of Liberty Mutual Group for which 9 Liberty Mutual Surety underwrites surety business, on behalf of Coffman Specialties Inc. 10 . . .”).) 11 Thus, the Court finds Defendants failed to raise triable issues regarding whether 12 Liberty qualifies as a “Surety” under the GAI—and consequently, as to the first two 13 elements for breach of contract. 14 3. Defendants’ Nonpayment Constitutes Breach of GAI 15 Liberty cites the GAI’s indemnity clause as creating Defendants’ contractual 16 obligations to pay a Surety (here, Liberty), upon demand, all of the loss, costs, and expenses 17 of the Surety incurred on behalf of principals (i.e., Coffman Inc.). (ECF No. 39-3, Ex. A, 18 “Indemnity to Surety” clause ¶ 1.) 19 Liberty claims Defendants breached terms of the GAI requiring Defendants to: (1) 20 indemnify Liberty for damages already incurred as a result of issuing bonds on Coffman 21 Inc.’s behalf; and (2) post collateral in an amount determined by Liberty to be sufficient to 22 cover anticipated exposure (i.e., money Liberty expects it will become liable for but has 23 not yet paid) under such bonds. (ECF No. 39-1 at 14:13–21.) 24 i. Indemnity for Actual Loss 25 Liberty moves for summary judgment on the basis that Defendants breached their 26 GAI obligations to Liberty by failing to pay indemnity for costs surrounding the Arizona 27 litigation (i.e., attorneys’ fees for defending Liberty, consultant fees for investigation of the 28 1 C202 Paving Project and defense of bond claims, and travel costs). (ECF No. 39-1 at 2 14:13–21.) 3 Under ECF No. 39-3, Ex. A, “Indemnity to Surety” clause ¶ 1, indemnifiable loss is 4 defined as: 5 All loss, costs and expenses of whatsoever kind and nature, including court costs, reasonable attorney fees (whether Surety at its sole option elects to 6 employ its own attorney, or permits or requires Undersigned to make 7 arrangements for Surety’s legal representation), consultant fees, investigative costs and any other losses, costs or expenses incurred by Surety by reason of 8 having executed any Bond, or incurred by it on account of any Default under 9 this agreement by any of the Undersigned . . . 10 (ECF No. 39-3, Ex. A, “Indemnity to Surety” clause ¶ 1 (emphasis added).) 11 Further, under the GAI, a “Contractor shall be deemed to be in default under this 12 agreement in the event it: (1) is declared to be in default by the Obligee of any bond.” (ECF 13 No. 39-3, Ex. A, “Default.”) Moreover, under the GAI, Coffman Inc. is defined as a 14 “Contractor.” (ECF No. 39-3, Ex. A, “Default.”) 15 It is undisputed that C202 issued a Notice of Default to Coffman Inc. in connection 16 with the C202 Paving Project—for which Liberty had issued two bonds. (ECF No. 55 at 17 7 (undisputed fact Nos. 12, 13).) Since Coffman Inc. has been “declared to be in default 18 by the Obligee [i.e., C202] of any bond,” Liberty can recover economic loss suffered in the 19 Arizona litigation because that loss was incurred “by reason of [Liberty] having executed” 20 the two bonds backing Coffman Inc.’s work in the C202 Paving Project. (ECF No. 39-3, 21 Ex. A, “Indemnity to Surety,” “Default.”) 22 Liberty claims Defendants have failed to fulfill Liberty’s requests for the following 23 indemnifiable actual losses in connection with the Arizona litigation “through December 24 4, 2025”: (1) attorneys’ fees related to defending Liberty in the Arizona litigation; (2) 25 consultant fees for the investigation of the C202 Paving Project and defense of bond claims; 26 and (3) travel costs. (ECF No. 39-2 ¶¶ 44–45.) Liberty claims its total actual loss is 27 $265,874.22. (ECF No. 39-1 at 14:24.) “[C]ourt costs,” “attorney fees,” and “consultant 28 fees” are explicitly covered as indemnifiable loss under the GAI. (See ECF No. 39-3, Ex. 1 A, “Indemnity to Surety” clause ¶ 1.) Liberty’s travel costs fall within the GAI’s indemnity 2 provision, which covers “[a]ll loss, costs and expenses of whatsoever kind and nature . . . 3 incurred by Surety by reason of having executed any Bond,” (ECF No. 39-3, Ex. A, 4 “Indemnity to Surety” clause ¶ 1), and Defendants do not argue otherwise. The Court thus 5 finds Liberty met its initial burden that—according to the GAI—Liberty is entitled to 6 indemnification for the attorneys’ fees, consultant fees, and travel costs it incurred in 7 connection with the Arizona litigation and related events (i.e., issuing bonds to back the 8 C202 Paving Project). 9 Defendants do not oppose Liberty’s arguments that Defendants failed to pay Liberty. 10 Instead, Defendants oppose Liberty’s summary judgment motion on the basis that 11 attorneys’ fees associated with the Arizona case are unreasonable under the GAI because 12 Coffman Inc. offered to defend Liberty for free. (ECF No. 54 at 9:3–19 (referencing ECF 13 No. 39-3, Ex. A, “Indemnity to Surety” clause ¶ 1 (defining indemnifiable loss as “[a]ll 14 loss, costs and expenses of whatsoever kind and nature, including court costs, reasonable 15 attorney fees”) (emphasis added)).) 16 However, the GAI also states it is permissible to recover attorneys’ fees “whether 17 Surety at its sole option elects to employ its own attorney, or permits or requires 18 Undersigned to make arrangements for Surety’s legal representation.” (ECF No. 39-3, Ex. 19 A, “Indemnity to Surety” clause ¶ 1.) Thus, the Court finds that Liberty’s claimed losses 20 (i.e., attorneys’ fees, consultant fees, and travel costs) are recoverable as indemnifiable loss 21 by Liberty under the GAI; and that Liberty had accrued monetary damages as a result of 22 breach of contract. See N. Wind Constr. Servs., LLC v. Campos EPC, LLC, No. 4:21-CV- 23 00096-DCN, 2023 WL 196618, at *10 (D. Idaho Jan. 13, 2023) (“[T]o win summary 24 judgment on its breach of contract claim, North Wind needed to show that it had a contract 25 with Campos, that Campos breached that contract, and that the breach caused [it] 26 reasonably certain damages”) (emphasis added). 27 28 1 Put differently, the Court finds Liberty is entitled to attorneys’ fees, consultant fees, 2 and travel costs under the terms of the GAI; and Defendants breached the GAI by failing 3 to pay. 4 ii. Indemnity Amount Recoverable 5 Liberty moves for summary judgment that it can recover $265,874.22 for actual 6 monetary loss resulting from the Arizona litigation. (ECF No. 39-1 at 11:4–5; ECF No. 7 39-2 ¶¶ 44–45; ECF No. 39-20, Exs. W, X.) More specifically, Liberty claims attorneys’ 8 fees of $244,280.93 (paying firm Jennings, Strouss & Salmon $99,529.04 and firm Sacks 9 Tierney P.A. $144,751.89) (citing invoices in ECF No. 39-20, Ex. W). Liberty also claims 10 consultant fees of $15,594.49 (citing invoices in ECF No. 39-20, Ex. X). Lastly, Liberty 11 claims an amount of $5,998.80 was accrued in travel costs. (ECF No. 39-2 ¶ 45(c).) The 12 Court considers each category of monetary loss in turn. 13 a. Attorneys’ Fees 14 California courts have approved attorneys’ fees arising from actions to enforce an 15 indemnity agreement “where the contractual provision of an indemnity agreement 16 explicitly provides for attorneys’ fees arising from the enforcement of the contract itself . . 17 .” Suretec Ins. Co. v. BRC Constr., Inc., 2013 WL 6199021, at *3 (E.D. Cal. Nov. 27, 18 2013) (alteration in original) (quoting Int’l Fid. Ins. v. Draeger Constr., Inc., 2012 WL 19 424994, at *4 (N.D. Cal. Feb. 8, 2012)). In such an instance, the fee provision is governed 20 by Cal. Civ. Code § 1717, which provides fees in an action based on contract when the 21 party seeking the fees is the prevailing party and the fees sought are reasonable. Id. 22 However, even where a surety is entitled to attorneys’ fees, the Court may limit the 23 recoverable fees to only those fees that are reasonable. See Travelers Cas. & Sur. Co. of 24 Am. v. Highland P’ship, Inc., No. 10CV2503 AJB DHB, 2012 WL 5928139, at *11 (S.D. 25 Cal. Nov. 26, 2012); Int’l Fid. Ins., 2012 WL 424994, at *3 (explaining that Cal. Civ. Code 26 § 1717 establishes the plaintiff may recover attorneys’ fees if the request is reasonable); 27 Safeco Ins. Co. of Am. v. Chiang, 2007 WL 460844, at *3 (N.D. Cal. Feb. 7, 2007); Cal. 28 Civ. Code § 1717(a) (“Reasonable attorney’s fees shall be fixed by the court, and shall be 1 an element of the costs of suit.”); 74 Am. Jur. 2d Suretyship § 138 (2023) (explaining that 2 even if a surety is entitled to attorneys’ fees, the court may limit the surety’s award for 3 appropriate reasons, including limiting to only fees that are reasonable). 4 Federal courts applying California law have not explicitly applied the same 5 “reasonable” test to the recoverability of other expenses where there is an indemnity 6 agreement specifying those expenses are recoverable as indemnity (e.g., consultant 7 expenses and other expenses in investigating and resolving the claims and prosecuting the 8 action). See, e.g., Arch Ins. Co. v. M.V.C. Enters., Inc., No. 5:21-CV-01876-JDE, 2023 9 WL 8351567, at *7 (C.D. Cal. Sept. 18, 2023) (awarding the exact amount of consultant 10 fees incurred in litigating the action that the plaintiff requested where the indemnity 11 agreement provided consultant fees are recoverable and the plaintiff demonstrated 12 calculations underlying requested fees). 13 Additionally, here, under ECF No. 39-3, Ex. A, “Indemnity to Surety” clause ¶ 1, 14 indemnifiable loss in the form of attorneys’ fees must be “reasonable” and “incurred . . . 15 on account of any Default under [the GAI] by any of the Undersigned.” 16 The Court finds Liberty has met its initial burden to state that the attorneys’ fees 17 requested in connection with Defendants’ default leading to the Arizona litigation and with 18 the Arizona litigation itself are reasonable. Liberty’s cited invoices demonstrate that 19 Liberty was charged an hourly rate of $200–275 for law firm partners’ work and of $125 20 for paralegals and legal assistants (ECF No. 39-20, Ex. W). See, e.g., Whittle v. Wells 21 Fargo Bank, N.A., No. CVF 10-0229LJOSMS, 2010 WL 1444675, at *4 (E.D. Cal. Apr. 22 12, 2010) (finding a $250 hourly billing rate reasonable for an eight-year attorney and a 23 $155 hourly billing rate reasonable for a paralegal). Further, Liberty’s request of a total 24 amount of $244,280.93 for attorneys’ fees and costs for litigation is reasonable considering 25 the length of the Arizona litigation, the complexity of the issues (i.e., complex contract 26 dispute), and the expense of participating in a trial spanning weeks (ECF No. 39-2 ¶ 30). 27 See, e.g., DeRuyver v. Omni La Costa Resort & Spa, LLC, No. 3:17-CV-0516-H-AGS, 28 2020 WL 563551, at *3 (S.D. Cal. Feb. 4, 2020) (requested attorneys’ fees were reasonable 1 because of the “protracted nature of th[e] litigation and the expense of going to trial”); Alter 2 by & through Alter v. Cnty. of San Diego, No. 21-CV-01709-BLM, 2023 WL 4166096, at 3 *4 (S.D. Cal. June 22, 2023) (requested attorneys’ fees and litigation costs were reasonable 4 because the “case was legally and factually complex and as stated above, involved 5 hundreds of hours of research and litigation.”). 6 Defendants oppose the reasonableness of Liberty’s requested attorneys’ fees on the 7 grounds that during the Arizona litigation trial, Liberty’s attorney did not take any 8 depositions, call or examine any witnesses, file any motions, or produce any evidence. 9 (ECF No. 54 at 14:3–14 (citing ECF No. 54-1, Ex. A).) However, Defendants do not point 10 to any legal support for the proposition that any of Liberty’s counsel’s actions taken during 11 the trial diminish the reasonableness of the requested attorneys’ fees. Indeed, the only case 12 Defendants cite stands for the general proposition that courts should take the 13 reasonableness of requested attorneys’ fees into account when determining the award. 14 (ECF No. 54 (citing Chiang, 2007 WL 460844, at *3).) 15 Moreover, it is clear from the record that Liberty’s counsel served as monitoring and 16 advisory counsel for Liberty (as Surety), while Coffman Inc.’s counsel (as named counsel 17 in the case) led the litigation efforts on behalf of Parties’ shared defense objective in the 18 Arizona litigation. The Aragon Declaration describes Liberty’s counsel’s activities during 19 the Arizona litigation as: “communications with Liberty’s representatives, analysis of the 20 claims asserted by C202, review of project documentation, and coordination with counsel 21 for Coffman.” (ECF No. 39-2 ¶ 45(a).) Defendants do not dispute that Liberty’s counsel 22 conducted any of these activities. 23 Thus, the Court finds Defendants fail to raise triable issues and finds that Liberty’s 24 request of $244,280.93 in attorneys’ fees was reasonable. 25 b. Travel Costs 26 Liberty does not provide any evidence or method of calculation to support the 27 $5,998.80 in travel costs claimed in Aragon’s Declaration. (ECF No. 39-2 ¶ 45(c).) 28 Liberty has therefore failed to meet its initial burden as to the amount of travel costs 1 recoverable. See Liang v. Cal-Bay Int’l, Inc., No. 06CV1082-WMC, 2010 WL 11684762, 2 at *3 (S.D. Cal. Apr. 16, 2010) (denying plaintiff’s motion for summary judgment where 3 plaintiff “has not satisfied his burden with regard to the calculation of the amount of 4 damages he is owed” and thus, plaintiff “has not provided sufficient evidence in support of 5 his calculation of damages”). 6 c. Consultant Fees 7 Next, the Court finds Liberty has met its initial burden to move for consultant-fee 8 damages resulting from the breach of contract—totaling $15,594.49—which is supported 9 by Exhibit X attached to the Aragon Declaration. (ECF No. 39-20, Ex. X.) Defendants do 10 not oppose Liberty’s request for consultant fees. Thus, the Court finds Defendants fail to 11 raise triable issues that Liberty is entitled to $15,594.49 in consultant fees. 12 * * * 13 In sum, the Court GRANTS IN PART and DENIES IN PART Liberty’s Motion 14 on Count 1. (ECF No. 39.) While the Court GRANTS Liberty’s Motion that Defendants 15 prima facie breached the GAI, that Liberty is entitled to $244,280.93 in attorneys’ fees and 16 $15,594.49 in consultant fees for that breach, and that Liberty is entitled to indemnification 17 for its travel costs, the Court DENIES Liberty’s Motion as to the exact monetary amount 18 recoverable for those travel costs. (ECF No. 39.) 19 C. Count 3: Specific Performance 20 1. Independent Cause of Action 21 “[S]pecific performance is not an independent cause of action under California law, 22 but is instead a remedy for breach of contract.” Murj, Inc. v. Rhythm Mgmt. Grp., PLLC, 23 No. 5:21-CV-00072-EJD, 2021 WL 5507170, at *5 (N.D. Cal. Nov. 24, 2021); Riese v. 24 Chase Home Fin., LLC, No. C 11-03297 NJV, 2011 WL 4344590, at *3 (N.D. Cal. Sept. 25 13, 2011); Griffin v. Green Tree Servicing, LLC, 166 F. Supp. 3d 1030, 1055 (C.D. Cal. 26 2015). However, rather than deny summary judgment on Liberty’s request for specific 27 performance, the Court will construe it as part of Liberty’s breach of contract claims. See, 28 e.g., Heinaman v. Fid. & Guar. Life Ins. Co., No. 214CV01884RFBGWF, 2016 WL 1 1367743, at *4 (D. Nev. Apr. 5, 2016) (“Court dismisses Plaintiff’s specific performance 2 claim as an independent cause of action and considers it a form of relief for its breach of 3 contract claim”); Travelers Indem. Co. v. Burnett, No. CV1204373GAFRNBX, 2012 WL 4 12892302, at *3 n.3 (C.D. Cal. Oct. 25, 2012) (“Though the Complaint and Motion for 5 Summary Judgment are formatted as though ‘Specific Performance’ were a separate cause 6 of action, the Court assumes that Plaintiff is requesting the remedy of specific performance 7 as an alternative to its request for damages resulting from the alleged breach of the GAI”). 8 2. Legal Standard 9 The availability of the remedy of specific performance requires: “[a] showing by 10 plaintiff of (1) the inadequacy of his legal remedy; (2) an underlying contract that is both 11 reasonable and supported by adequate consideration; (3) the existence of a mutuality of 12 remedies; (4) contractual terms which are sufficiently definite to enable the court to know 13 what it is to enforce; and (5) a substantial similarity of the requested performance to that 14 promised in the contract.” Tamarind Lithography Workshop, Inc. v. Sanders, 143 Cal. 15 App. 3d 571, 575 (1983). 16 Sureties are ordinarily entitled to specific performance of collateral security clauses. 17 Safeco Ins. Co. of Am. v. Schwab, 739 F.2d 431, 433 (9th Cir. 1984). “A damages remedy 18 would be inadequate because ‘[i]f a creditor is to have the security position for which he 19 bargained, the promise to maintain the security must be specifically enforced.’ ” Hartford 20 Fire Ins. Co. v. Atek Constr., Inc., No. SACV 04-1316 DOC (ANX), 2005 WL 8252834, 21 at *6 (C.D. Cal. May 16, 2005) (quoting Schwab, 739 F.2d at 433); see also Travelers Cas. 22 & Sur. Co. of Am. v. W.P. Rowland Constructors Corp., No. CV-12-0390-PHX-FJM, 2013 23 WL 2285204, at *4 (D. Ariz. May 22, 2013) (citing Milwaukie Constr. Co. v. Glens Falls 24 Ins. Co., 367 F.2d 964, 966 (9th Cir. 1966) (“where [a surety knows it will] have liability 25 claims filed against it but [does] not know the amount of those claims, the legal remedy of 26 money damages [is] not adequate”)). 27 California courts have specifically enforced collateral security provisions and have 28 even authorized prejudgment attachments in suits for specific performance of collateral 1 security provisions. See Gen. Ins. Co. v. Howard Hampton, Inc., 185 Cal. App. 2d 426 2 (1960); Gen. Ins. Co. v. Singleton, 40 Cal. App. 3d 439, 442 (1974). 3 3. Defendants’ Failure to Specifically Perform 4 Liberty seeks judgment for specific performance of Defendants’ collateral deposit 5 obligation under the GAI. (ECF No. 39-1 at 19:9–21:8.) It is undisputed that GAI 6 signatories (here, Defendants) agreed to deliver security to collateralize Coffman Inc.’s 7 obligations in the event that the “Surety” (here, Liberty) faced liability on bonds issued on 8 behalf of Coffman Inc.’s projects (here, the Performance Bond and the Payment Bond). 9 The following GAI clauses create Defendants’ collateral deposit obligation: 10 1. A collateral clause obligating payment of collateral sufficient to discharge or 11 cover claims against the Surety (here, Liberty) (ECF No. 39-3, Ex. A, 12 “Indemnity to Surety” clause ¶ 2); 13 2. A discharge clause obligating procurement of discharge from any bond and 14 all related liability, or in the alternative, the deposit of acceptable collateral to 15 cover all exposure under the bond(s) (Id., “General Provisions” clause ¶ 5). 16 Under the terms of the GAI, Liberty asserts it is permitted to request such collateral 17 from Defendants after: (1) it has requested a discharge of liability under any bond issued 18 on behalf of Coffman Inc.; and (2) such discharge is not obtained. (ECF No. 39-1 at 15:18– 19 24.) The Court agrees. 20 It is undisputed that Liberty has sent letters to Defendants requesting them to obtain 21 complete discharge of liability from the claims brought by C202 in the Arizona litigation 22 (ECF No. 39-2 ¶¶ 36, 37; ECF No. 39-20, Exs. S (March 3, 2025 letter demanding $6.5 23 million in collateral) and T (March 5, 2025 letter to Defendants demanding collateral “or, 24 in the alternative, that Defendants ‘obtain the complete discharge of Liberty Mutual from 25 the claims brought by C202 and all liability therefrom.’ ”)). It is also undisputed that 26 Defendants have not paid any collateral. 27 Given the ongoing Arizona litigation, the Court agrees with Liberty that it “cannot 28 be made whole by recovering only those money damages incurred to date” and Liberty 1 “remains exposed to unliquidated liability because of having issued the Performance Bond 2 on behalf of Coffman [Inc.].” (ECF No. 39-1 at 21:2–6.) Thus, Liberty has presented 3 sufficient evidence regarding Defendants’ contractual obligations and the inadequacy of 4 the legal remedy of monetary damages to meet Liberty’s initial burden to move for 5 summary judgment. Milwaukie Constr. Co., 367 F.2d at 966. 6 In response, Defendants do not contest their contractual obligation to provide 7 security under the GAI. Instead, Defendants argue that Liberty lacks standing to enforce 8 the collateral clauses and that Coffman Inc. is in the process of obtaining a supersedeas 9 bond, which would “stay execution on the [Arizona] judgment against Coffman [Inc.] and 10 [Liberty] during the appeal.” (ECF No. 54 at 8:24–26.) Since Liberty qualifies as a 11 “Surety” pursuant to the reasoning supra § III.B.2, the Court finds Defendants have failed 12 to raise triable issues that Liberty has standing under the GAI. 13 Next, Defendants argue that requiring them to post collateral “will make Coffman 14 [Inc.]’s efforts to obtain a supersedeas bond to stay enforcement of the Arizona judgment 15 for [Liberty] and Coffman [Inc.] more difficult.” (ECF No. 54-2 ¶ 9.) Though this could 16 make efforts to continue to stay the Arizona action more challenging in the future, at this 17 time, the Arizona court has already stayed enforcement of the Arizona judgment on the 18 condition that Defendants procure, submit, and obtain court approval for a supersedeas 19 bond. (ECF No. 64.) 20 Further, Defendants contend the Arizona court’s ruling on the post-judgment 21 motions in the Arizona case could increase, reduce, or even eliminate the Arizona court’s 22 judgment for damages against Coffman Inc. and Liberty. (Id. at 7; ECF No. 60-1 ¶ 14.) 23 As a matter of law, “a surety cannot request collateral if the underlying claim is patently 24 frivolous.” Phila. Indem. Ins. Co. v. Ohana Control Sys., Inc., 450 F. Supp. 3d 1043, 1055 25 (D. Haw. 2020). However, “[i]t is not enough that the claim is unlikely to succeed . . . 26 Defendants must show that ‘recovery in the amount demanded is definitively barred.’ ” Id. 27 (emphasis in original). Defendants do not argue that enforcement of the Arizona court’s 28 judgment is “definitively barred,” id., and thus, fail to adequately address how the stay or 1 appeal of the Arizona court’s judgment undermines Liberty’s right to specifically enforce 2 the collateral security provision of the GAI. 3 In addition, at oral argument (ECF No. 64) and in Defendants’ opposition (ECF No. 4 54 at 8:8–21), Defendants also raised the issue that there can be no “irreparable harm” to 5 Liberty because Defendants have already obtained court approval to post collateral in the 6 Arizona court action—and C202 would likely draw money from the collateral fund rather 7 than seek damages against Liberty directly. (ECF No. 64.) However, California courts 8 have held “[t]he concept of irreparable injury is more suitable in a discussion of injunctive 9 relief than specific performance . . . [i]t has been said that the term adds nothing to the 10 concept of inadequacy of the legal remedy.” Ellison v. Ventura Port Dist., 80 Cal. App. 11 3d 574, 580 (1978) (citing 2 Witkin, California Procedure (2d ed. 1970) Provisional 12 Remedies, § 51, pp. 1499–1500). Liberty seeks specific performance, not injunctive relief, 13 here. 14 Based on the above, the Court finds Defendants have failed to raise any triable issues 15 that Liberty is entitled to the remedy of specific performance under the GAI for 16 Defendants’ default under the GAI. 17 4. Liberty’s Requested Monetary Amount for Specific Performance 18 Liberty seeks judgment in the amount of $12,461,308.40 for specific performance 19 of Defendants’ collateral deposit obligation under the GAI. (ECF No. 39-1 at 19:9–21:8.) 20 Liberty asserts the collateral clause and the discharge clause grant Liberty the right 21 to set the collateral amount. (See, e.g., ECF No. 39-1 at 14:15–16 (“The express terms of 22 the [GAI] require[] Defendants to . . . post collateral in an amount determined by [Liberty] 23 to be sufficient to cover anticipated exposure under such bonds”).) The collateral clause 24 requires payment of “[a]n amount sufficient to discharge any claim made against [Liberty] 25 on any Bond,” with the sum being “the minimum amount of any reserve set by [Liberty].” 26 (ECF No. 39-3, Ex. A, “Indemnity to Surety” clause ¶ 2.) The discharge clause requires 27 payment “on request of [Liberty] [to] procure the discharge of [Liberty] from any Bond 28 and any liability by reason thereof,” or, if that is unattainable, to “deposit collateral with 1 [Liberty], acceptable to [Liberty], sufficient to cover all exposure . . . or make provisions 2 acceptable to [Liberty] for the funding of the bonded obligations.” (Id., “General 3 Provisions” clause ¶ 5 (emphasis added).) 4 However, Liberty’s ability to “set” the amount of collateral is qualified by the 5 contractual language itself—stating Liberty may only request the amount “sufficient” to 6 “cover anticipated exposure” or to “discharge any claim.” (ECF No. 39-3, Ex. A, 7 “Indemnity to Surety” clause ¶ 2.) 8 Liberty is constrained by the implied covenant of good faith and fair dealing, which 9 inheres in all contracts, to set a reasonable amount of collateral. See Hartford Fire Ins. 10 Co., 2005 WL 8252834, at *5 (quoting Cal. Lettuce Growers v. Union Sugar Co., 45 Cal. 11 2d 474, 484 (1955)) (applying the implied covenant of good faith to parties’ contract giving 12 the surety the right to set the “necessary” amount of collateral: “[W]here a contract confers 13 on one party a discretionary power affecting the rights of the other, a duty is imposed to 14 exercise that discretion in good faith and in accordance with fair dealing”). Importantly, 15 “a demand made on a collateral security provision will always have some element of 16 uncertainty . . . This element of uncertainty does not turn any collateral security demand 17 into a bad-faith determination made on a whim.” Hartford Fire Ins. Co., 2005 WL 18 8252834, at *5. “Commercially reasonable sales are presumed to be in good faith.” Sec. 19 Pac. Nat’l Bank v. Geernaert, 199 Cal. App. 3d 1425, 1431 (1988), opinion modified on 20 denial of reh’g (May 4, 1988). “Specific performance is the proper remedy” for breach of 21 the implied covenant of good faith and fair dealing. Hartford Fire Ins. Co., 2005 WL 22 8252834, at *6. 23 California courts have held that although “a disposition of collateral approved in any 24 judicial proceeding ‘shall conclusively be deemed to be commercially reasonable,’ ” 25 plaintiffs must still “make a proper accounting” as to the amount of proceeds they are 26 entitled to. Sec. Pac. Nat’l Bank, 199 Cal. App. 3d at 1433. 27 Here, Liberty derives the total figure of $12,461,308.40 (ECF No. 39-1 at 19:9–21:8) 28 from: (1) $5,611,713 awarded to C202 in a post-trial under-advisement ruling in the 1 Arizona litigation against Coffman Inc. on July 8, 2025 (ECF No. 39-20, Ex. Q); (2) an 2 application for fees, costs, and Rule 68(g) sanctions ($3,849,595.39)2 (ECF No. 39-20, Ex. 3 R); and (3) anticipated prejudgment interest ($3,000,000) based on C202’s requested 4 interest accrual date (ECF No. 39-2 ¶ 47). 5 Given that the under-advisement ruling is a disposition in a judicial proceeding (see 6 ECF No. 39-20, Ex. Q), the amount awarded there is “commercially reasonable.” Sec. Pac. 7 Nat’l Bank, 199 Cal. App. 3d at 1433. Further, regarding the collateral sought by C202 8 against Coffman Inc. (and against Liberty jointly and severally) for fees, costs, Rule 68(g) 9 sanctions, and prejudgment interest, Liberty may seek collateral even where it “only 10 anticipates a loss[.]” Allied World Specialty Ins. Co. v. JND Thomas Co., 2015 WL 11 9480626, at *5 (E.D. Cal. Dec. 29, 2015). 12 Defendants’ sur-reply asserts that Defendants have applied for an $11.9 million 13 supersedeas bond from Berkshire Hathaway Specialty Insurance in the Arizona litigation 14 since Liberty filed its Motion. (ECF No. 60.) Once approved by the Arizona court, the 15 supersedeas bond stays C202’s enforcement of any monetary judgment in the Arizona 16 litigation until after Defendants’ appeal of the final judgment has concluded. See Ariz. R. 17 Civ. App. P. 7. Though Defendants represented at oral argument that the Arizona court 18 has already stayed enforcement of its judgment awarding damages on the condition that 19 the bond would be accepted, Liberty represented (and Defendants did not dispute) that the 20 Arizona court has not yet accepted the bond. (ECF No. 64.) Liberty raised the point that 21 should the Arizona court reject the bond, the judgment against Liberty would be once again 22 enforceable by C202. (Id.) Thus, Defendants’ supersedeas bond application does not 23 meaningfully affect the calculus of the appropriate amount of collateral sought, and 24 Defendants fail to raise triable issues. Phila. Indem. Ins. Co., 450 F. Supp. 3d at 1055 25 (“Defendants must show that ‘recovery in the amount demanded is definitively barred.’ ”). 26 27 2 Since the total sums up to $12,461,308.39, rather than $12,461,308.40, the Court proceeds in 28 1 KK 2 For the reasons above, the Court GRANTS Liberty’s Motion for an award of 3 $12,461,308.39 in collateral for Defendants’ failure to specifically perform under the GAI 4 ||(Count 3). (ECF No. 39.) 5 |}IV. CONCLUSION 6 For the reasons above, the Court GRANTS IN PART and DENIES IN PART 7 || Liberty’s Motion. (ECF No. 39.) 8 More specifically: 9 1. The Court GRANTS IN PART and DENIES IN PART Liberty’s Motion on 10 Count | (Breach of Contract). (ECF No. 39.) While the Court GRANTS 11 Liberty’s Motion that Defendants prima facie breached the GAI, that Liberty 12 is entitled to $244,280.93 in attorneys’ fees and $15,594.49 in consultant fees 13 for that breach, and that Liberty is entitled to indemnification for its travel 14 costs, the Court DENIES Liberty’s Motion as to the exact monetary amount 15 recoverable for those travel costs. (ECF No. 39.) 16 2. The Court GRANTS Liberty’s Motion on Count 3 (Specific Performance), 17 construed as a request for the remedy of specific performance for breach of 18 the GAI. (ECF No. 39.) Defendants are ORDERED to provide Liberty 19 collateral in the amount of $12,461,308.39 to cover Liberty’s financial 20 exposure by September 24, 2026. Liberty shall not disburse the demanded 21 funds until further order of the Court. 22 IT IS SO ORDERED. 23 24 || DATED: August 24, 2026 (yi. (Duhark 5 H n. Cynthia Bashant, Chief Judge United States District Court 26 27 28 49