Temblor Petroleum Company, LLC v. California Energy Exchange Corporation

34-2020-00278366-CU-BC-GDS: Temblor Petroleum Company, LLC a Delaware Limited Liability Company vs. California Energy Exchange Corporation 07/17/2026 Hearing on Motion for Attorney Fees in Department 8A

Tentative Ruling

NO APPEARANCE REQUIRED

The Court notes that there appear to be two pending motions for attorneys’ fees. For purposes of judicial economy, the Court issues one combined ruling addressing each motion herein.

I. ROCK CREEK OIL, INC.’S MOTION

Cross-Defendant/Cross-Complainant Rock Creek Oil, Inc.’s (“RCO”) motion for attorneys’ fees in the amount of $113,940, against Cross-Complainant/Defendant California Energy Exchange Corporation (“CEE”), pursuant to Civil Code Section 1717 and Code of Civil Procedure Section 1033.5(a)(10), is GRANTED in part.

RCO makes this motion on the basis that RCO is the prevailing party with respect to the Cross-Complaint filed by CEE and was made a party to this litigation as a result of CEE’s decision to name RCO in CEE’s Cross-Complaint. RCO contends that it is the prevailing party on CEE’s Cross-Complaint, which was an action “on a contract” governed by a bilateral attorney fee clause in the Natural Gas Purchase and Sale Agreement (“PSA”). (Green Decl., Exh. 1; Gray Decl., Exh. 1.) RCO proffers that the total amount of attorneys’ fees associated with this action is $113,940. (Green Decl., ¶¶ 12-16, Exhs. 3-4.) CEE opposes the motion.

Having considered the arguments and evidence proffered by the Parties in connection to this motion, the Court rules as follows.

Prevailing Party

Attorney’s fees may be awarded as costs when authorized by statute or contract – Civil Code section 1717 permits reasonable fees to the party prevailing on any action “on a contract” where the contract specifically provides. Under section 1717, the court determines the prevailing party on the contract by comparing the relief awarded on the contract claims with the parties’ demands and objectives. (Hsu v. Abbara (1995) 9 Cal.4th 863, 876.)

Here, the PSA provides: “If any suit or action is filed by any Party to enforce this Agreement, the prevailing Party shall be entitled to recover reasonable attorney’s fees incurred in investigation of related matter, and in preparation for any prosecution of such

34-2020-00278366-CU-BC-GDS: Temblor Petroleum Company, LLC a Delaware Limited Liability Company vs. California Energy Exchange Corporation 07/17/2026 Hearing on Motion for Attorney Fees in Department 8A

suit or action as fixed by the trial court.” (Green Decl., Exh. 1; Gray Decl., Exh. 1.)

RCO argues that it was brought into the case by CEE’s Cross-Complaint, and judgment was entered in November 2025 following a court trial. Accordingly, RCO seeks fees based on its successful defense against CEE. RCO relies in part on the Court’s January 30, 2026, Order[1] “deeming RCO a prevailing party” under Code of Civil Procedure section 1032(a)(4), urging the same outcome under Civil Code section 1717. CEE argues that, under section 1717, RCO did not prevail on its own contract claims and obtained no affirmative relief, and therefore there should be no prevailing party determination in RCO’s favor.

Based upon the record before the Court, the Court determines that RCO achieved defense relief, and thus, RCO prevailed “on the contract” as against CEE’s Cross- Complaint. (See 9/17/25 Statement of Decision.) RCO is entitled to a reasonable attorney’s fee award under Civil Code section 1717 as the prevailing party against CEE’s contract-based cross-claims pursuant to the PSA’s fee clause.

Lodestar – Rates and Hours

RCO seeks fees in the amount of $113,940 based on the hourly rates of Mr. Green of $550/hour and Mr. Niman between $425 and $495/hour. (Green Decl., ¶¶ 13,14.) . RCO’s motion is supported by declarations and invoices reflecting discovery, pleadings, eight depositions, trial preparation, and approximately two weeks of trial. (Id.) RCO also appears to request an additional $3,960 in fees that it “anticipates incurring” associated with this motion, representing 4 hours for drafting this motion, 2 hours for preparing a reply, and 2 hours to prepare for and attend the hearing relating to this motion. (Green Decl., ¶ 17.)

Based on the record before the Court, the hourly rates are reasonable for counsel’s experience. The hours claimed for trial preparation and attendance are generally consistent with a two-week court trial. However, given some of the time spent by counsel can be attributed to non-contract related claims and subject to a deduction, and the opposition’s identification of specific nonrecoverable or unsuccessful categories, the Court finds a reduction is appropriate.

Apportionment/Reduction

The fee-setting inquiry begins with the lodestar – reasonable hours multiplied by a reasonable hourly rate – which the Court may adjust to reach a reasonable fee. (PLCM

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2020-00278366-CU-BC-GDS: Temblor Petroleum Company, LLC a Delaware Limited Liability Company vs. California Energy Exchange Corporation 07/17/2026 Hearing on Motion for Attorney Fees in Department 8A

Group v. Drexler (2000) 22 Cal.4th 1084, 1095.) A court may apportion fees between claims for which fees are recoverable and claims for which they are not; apportionment is excused only where the claims are so interrelated that it would be impracticable or impossible to separate the compensable and non-compensable time, and a court may apportion even where issues are connected, related, or intertwined. (Brown Bark III, L.P. v. Haver (2013) 219 Cal.App.4th 809, 829; Zintel Holdings, LLC v. McLean (2012) 209 Cal.App.4th 431, 443.)

Given the PSA’s “related matter” language, the recoverable scope is contractually broader than fees “to enforce” alone. Nonetheless, RCO bears the burden to demonstrate the hours sought were reasonably incurred and fall within the clause’s scope. The opposition identifies categories where fees are not recoverable such as fraud, constructive fraud, negligent misrepresentation, Business and Professions Code section 7031, professional negligence, alter ego, and an unsuccessful motion to dismiss/amend-related work. Defendant argues these fees are not recoverable or should be apportioned.

The current record does not include line-item allocation tying the $113,940.00 to recoverable versus nonrecoverable work under the PSA’s “related matter” language. Thus, some level of apportionment or categorical reduction is warranted to exclude time that is not reasonably shown to be incurred in investigation of related matters to CEE’s contract enforcement claims or RCO’s defense thereof, and to exclude time attributable to unsuccessful motions identified by CEE.

The Court finds that a 25% reduction is appropriate to exclude time insufficiently shown to be incurred “in investigation of related matter” to the PSA enforcement dispute, including work primarily directed to tort claims and professional negligence/licensure issues not reasonably tied to defense of CEE’s contract enforcement claims. A further 5% reduction is applied to account for time reasonably attributed to unsuccessful dispositive motion practice identified by CEE.

The Court awards fees in the amount of $79,758, accounting for a 30% reduction to the requested $113,940 for the reasons stated above. The Court declines to award RCO’s requested $3,960 in fees that it “anticipates incurring” in connection with this motion as the relief is unsupported.

Disposition

RCO’s motion is GRANTED in part. RCO is awarded attorneys’ fees in the amount of $79,758 against CEE.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2020-00278366-CU-BC-GDS: Temblor Petroleum Company, LLC a Delaware Limited Liability Company vs. California Energy Exchange Corporation 07/17/2026 Hearing on Motion for Attorney Fees in Department 8A

RCO shall prepare a formal order for the Court’s signature consistent with this order.

II. TEMBLOR ET AL.’s MOTION

Plaintiffs/Cross-Defendants Jeffrey M. Vetter, Trustee of the Bankruptcy Estate of Temblor Petroleum Company, LLC (“Temblor”), Mountain Energy, LLC (“Mountain”), and Inproinvest, LLC’s (“Inproinvest”) (collectively, “Temblor et al.”) motion for attorneys’ fees in the total amount of $2,457,180 against Cross Complainants/Defendants California Energy Exchange Corporation (“CEE”) and Vern Jones Oil & Gas Corp. (“VJOG”) (collectively, “CEE et al.”), pursuant to Civil Code section 1717 and Code of Civil Procedure sections 1032 and 1033.5(a)(10) is GRANTED in part.

Temblor et al. seeks an award of reasonable attorneys’ fees under the attorneys’ fee provision in the Ratification Agreement ratifying the Purchase and Sale Agreement (“PSA”) and Joint Operating Agreement (“JOA”). (Motion, Exhibit A, PSA ¶ 22.2; Exhibit B p. 17(b), ¶ Exhibits E & G). Temblor et al. seeks a total amount of $2,457,180 in fees: $1,225,768.50 (2,476.3 hours x $495/hour), enhanced by a 2.0 multiplier, plus attorneys’ fees incurred in preparing this motion in an amount of $5,643. Temblor et al. requests that the Court allocate the above-described fees 98.6% to CEE under the Ratification Agreement / PSA Fee Clause in the amount of $2,422,779.48.

Temblor et al. seeks an award of reasonable attorneys’ fees against VJOG under the attorneys’ fee provision in the Joint Operating Agreement of 1.4% of the above-described amount equating to $34,400.52. (Motion Exh. B at p. 17(b), ¶ E). CEE et al. opposes the motion.

Having considered the arguments and evidence proffered by the Parties in connection to this motion, the Court rules as follows.

Timeliness

CEE et al.’s objection based on untimeliness is OVERRULED. A motion for fees for services through judgment must be served and filed within the time for filing a notice of appeal. (Cal. Rules Court, rule 3.1702.) The 60-day period runs from service of a “Notice of Entry” of judgment, or a file-endorsed copy of the judgment, accompanied by proof of service. (Id., rule 8.104.) The Notice of Entry of Judgment with proof of service was served on December 18, 2025, and the Motion was served and filed on February 13, 2026 (Suppl. Teague Decl., Exh. J) — within 60 days. Accordingly, the Court finds this motion was timely made.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2020-00278366-CU-BC-GDS: Temblor Petroleum Company, LLC a Delaware Limited Liability Company vs. California Energy Exchange Corporation 07/17/2026 Hearing on Motion for Attorney Fees in Department 8A

Prevailing Party

The Court finds that Temblor, Mountain, and Inproinvest are prevailing parties. Temblor and Mountain obtained affirmative monetary recovery and defeated CEE’s Cross- Complaint in its entirety. Inproinvest recovered the funds it paid under the Ratification Agreement/PSA, ordered returned based on CEE’s wrongful retention after CEE disclaimed the transaction. (See 9/17/25 Statement of Decision; see also 10/24/25 Order.)

Entitlement under section 1717 turns on whether the litigation concerned the existence and enforceability of the contract, and a conversion claim premised on rights created by the agreement is an action on the contract. CEE and VJOG each admitted the prevailing party is entitled to fees under the Ratification Agreement, and VJOG admitted the JOA’s prevailing-party fee provision. Temblor et al. are therefore entitled to reasonable fees.

Apportionment/Reduction

The Court declines to award the full lodestar requested and finds that apportionment is necessary. The Court finds that the core contract dispute and Temblor et al.’s defense of CEE’s Cross-Complaint were substantially interrelated: both turned on whether CEE was entitled to additional compensation under the Ratification/PSA framework and on the related project-cost and engineering issues. Much of counsel’s work is therefore common to the recoverable contract claims and is not subject to apportionment.

The Court further finds, however, that a portion of the time was devoted to matters that are severable and not recoverable, including:

(1) Tort and statutory theories not essential to the Court’s resolution of the contract claims – fraud, constructive fraud, negligent misrepresentation claims; professional negligence claim concerning facility design (Lower Heating Value versus Higher Heating Value); and the Business and Professions Code section 7031 licensing claim; and

(2) Discrete, unsuccessful interim motions that did not advance the contract recovery, as identified in the opposition (see Opp’n, pp. 12:25-13:13.)

Rather than parse the time records line by line, the Court exercises its discretion to

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2020-00278366-CU-BC-GDS: Temblor Petroleum Company, LLC a Delaware Limited Liability Company vs. California Energy Exchange Corporation 07/17/2026 Hearing on Motion for Attorney Fees in Department 8A

apply a percentage reduction reflecting the share of the work reasonably attributable to non-recoverable and unsuccessful matters. (Brown Bark III, supra, 219 Cal.App.4th at p. 829; Zintel, supra, 209 Cal.App.4th at pp. 443-444.) The Court finds a 30% reduction of the lodestar to be reasonable and supported by the record. Therefore, the Court is reducing the reasonable hours to 1,733.41 (2,476.3 reduced by 30 percent = 1,733.41). The reduced hours multiplied by the reasonable rate ($495) equals a total a recoverable lodestar of $858,037.95. The Court also awards reasonable fees incurred in preparing the instant in the amount of $5,643 (representing 11.4 hours at a rate of $495). The Court awards fees in the total amount of $863,680.95.

Multiplier

The court declines to award the requested 2.0 multiplier. The Court can determine whether the lodestar should be enhanced or decreased by a “multiplier,” based on factors such as “‘(1) the novelty and difficulty of the questions involved, (2) the skill displayed in presenting them, (3) the extent to which the nature of the litigation precluded other employment by the attorneys, [and] (4) the contingent nature of the fee award. [Citation.]’ [Citation.]” (Amaral v. Cintas Corp. No. 2 (2008) 163 Cal.App.4th 1157, 1216.) “‘There is no hard-and-fast rule limiting the factors that may justify an exercise of judicial discretion to increase or decrease a lodestar calculation.’ [Citation.]

There are numerous such factors, and their evaluation is entrusted to a trial court’s sound discretion; any one of those factors may be responsible for enhancing or reducing the lodestar.” (Krumme v. Mercury Ins. Co. (2004) 123 Cal.App.4th 924, 947.)

Here, the reasonable hourly rate of $495 reflects the value of counsel’s services, and the Court finds that the lodestar, as reduced, fully and fairly compensates counsel for the reasonable value of the work performed on the recoverable claims. The results obtained, the nature of the litigation, and counsel’s skill are adequately captured within the lodestar. No enhancement is warranted, and the requested 2.0 multiplier is DENIED.

Disposition

The motion is GRANTED in part. Temblor et al. are awarded reasonable attorney fees in the total amount of $863,680.95 (representing a reduced lodestar of $858,037.95 and $5,643 in fees for preparing this motion).

The requested 2.0 multiplier is DENIED.

The award is apportioned between CEE et al. consistent with the contractual bases for

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2020-00278366-CU-BC-GDS: Temblor Petroleum Company, LLC a Delaware Limited Liability Company vs. California Energy Exchange Corporation 07/17/2026 Hearing on Motion for Attorney Fees in Department 8A

the fees and the manner in which the litigation was conducted: $851,668.42 against California Energy Exchange Corporation (98.6% of the reduced lodestar, $846,025.42, plus the $5,643 in motion-preparation fees) and $12,012.53 against Vern Jones Oil & Gas Corporation (1.4% of the reduced lodestar).

Temblor et al. shall prepare a formal order for the Court’s signature consistent with this order.

To request oral argument on this matter, you must call Department 8A at (916) 874- 5754 by 4:00 p.m., the court day before this hearing and notification of oral argument must be made to the opposing party/counsel. If no call is made, the tentative ruling becomes the order of the court. (Local Rule 1.06.)

If oral argument is requested, the parties may appear by Zoom with the links below:

To join by Zoom link – https://saccourt-ca-gov.zoomgov.com/j/16108301121 To join by phone dial (833) 568-8864 / ID: 16108301121

Counsel for the moving parties is directed to notice all parties of this order.

[1] On January 30, 2026, the Court denied CEE’s motion to strike or tax RCO’s costs and

stated: “Accordingly, the Court finds Rock Creek is the prevailing party as between it and CEE under Code of Civil Procedure section 1032(a)(4) as “a defendant where neither plaintiff nor defendant obtains any relief.” (1/30/26 Order, p. 2.)