Opportunity Financial, LLC v. Clothilde Hewlett

(Stanley Mosk Courthouse: Dept. 733) August 27, 2026 DEPARTMENT 733 LAW AND MOTION RULINGS

STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES OPPORTUNITY FINANCIAL, LLC, Plaintiff, vs. CLOTHILDE HEWLETT, in her official capacity as Commissioner of the Department of Financial Protection and Innovation for the State of California, Defendant. _____________________________________ AND RELATED CROSS-ACTIONS. |))))))))))) | CASE NO.: 22STCV08163 [TENTATIVE] ORDER RE: CROSS-DEFENDANTS CLOTHILDE HEWLETT AND THE DEPARTMENT OF FINANCIAL PROTECTION AND INNOVATION'S MOTION TO TAX COSTS Dept. 733 8:30 a.m. August 27, 2026 |

I. INTRODUCTION On March 7, 2022, Plaintiff Opportunity Financial, LLC ("OppFi") filed this action against Clothilde V. Hewlett in her official capacity as Commissioner of California's Department of Financial Protection and Innovation (the "Commissioner"), alleging causes of action for (1) Declaratory Judgment and (2) Injunctive Relief.

On April 8, 2022, the Commissioner filed a Cross-Complaint against OppFi, asserting causes of action for (1) Violation of the California Financing Law and (2) Violation of the California Consumer Financial Protection Law.

On October 17, 2022, OppFi filed a Cross-Complaint against the Commissioner and California's Department of Financial Protection and Innovation ("DFPI"), asserting causes of action for (1) Writ of Mandate, Code of Civil Procedure Sec. 1085(a) -- Violation of the California Administrative Procedure Act, Gov't Code Sec. 11340 et seq. and (2) Declaratory Relief, Code Civ. Proc. Sec. 1060; Gov't Code Sec. 11350-- Violation of the California Administrative Procedure Act, Gov't Code Sec. 11340 et seq.

On January 29, 2026, the Court heard oral argument on OppFi's Motion for Summary Judgment, or, in the Alternative, Summary Adjudication, and took the matter under submission.

On February 24, 2026, the Court rendered its tentative decision pursuant to California Code of Civil Procedure Section 632 and California Rule of Court 3.1590(a), granting Plaintiff's motion for summary judgment.

On May 19, 2026, the Court rendered its statement of decision granting OppFi's motion as to the Commissioner's cross-complaint.

In light of the Court granting summary judgment as to the Commissioner's cross-complaint and finding that the Commissioner cannot establish that OppFi is the true lender of the Program Loans, OppFi's Complaint and its Cross-Complaint, which challenged the Commissioner's and DFPI's ability to apply the true lender doctrine in connection with its enforcement of the CFL's interest rate restrictions, were dismissed without prejudice as moot.

On June 8, 2026, OppFi filed a memorandum of costs.

On June 25, 2026, the Commissioner and DFPI filed the instant motion to tax costs.

On August 14, 2026, OppFi filed an opposition.

On August 21, 2026, the Commissioner and DFPI filed a reply.

a. Allegations in OppFi's Complaint OppFi is a leading financial technology platform and service provider focused on helping middle-income, credit-challenged consumers build a better financial path. (Compl., P. 14.)

Specifically, OppFi's platform allows banks to provide access to simple short-term lending products for consumers whom traditional lenders may otherwise turn away in light of their credit profile. (Compl., P. 15.)

In this regard, OppFi plays a critical, federally recognized, and approved market: enabling consumers to be shut out of traditional credit markets to obtain access to credit. (Compl., P. 15.)

Moreover, access to credit is a critical asset to individuals seeking to build a better economic future. (Compl., P. 15.)

Lenders such as FinWise Bank ("FinWise"), a federally-insured state-chartered bank located in Utah, have developed loan products that provide credit to this population in light of their high credit risk. (Compl., P. 17.)

The loan products offered by the Bank provide transparent pricing, have no origination or late fees, are fully amortizing with no balloon payments, and allow borrowers to prepay at any time with no penalty. (Ibid.)

However, in light of the high credit risk posed by this population, the interest rates charged on these loans are often higher than traditional loans because the borrowers have no collateral to use as security and default at a high rate. (Ibid.)

Borrowers understand that high interest rates are necessary in light of their credit status. (Ibid.)

Because charging higher interest rates is necessary to make small-dollar lending to higher-risk borrowers economically viable, many national and state-chartered banks that engage in such lending lawfully incorporate and locate themselves in states that do not set low-interest rate caps relative to credit risk. (Compl., P. 18.)

These states understand that if the legal small-dollar lending market is terminated, it will not end low-income borrowers' need for credit, but instead will lead to something more pernicious: increased reliance on "payday lending" and, even worse, black-market lending by persons and entities who operate wholly outside of the law. (Compl., P. 18.)

The Bank uses OppFi's platform to provide loan products to consumers throughout the United States. (Compl., P. 19.)

This action arises from the Commissioner of California's Department of Financial Protection and Innovation's (the "Commissioner") threatened enforcement of the Fair Access to Credit Act ("AB 539") against OppFi. (Compl., P. 1.)

AB 539, which became effective on January 1, 2020, amended the California Financing Law ("CFL") to cap interest rates to 36% for covered loans between $2,500 and $10,000 made by "financial lenders." (Compl., P. 1.)

The Commissioner accuses OppFi of originating consumer loans with interest rates above those allowed by AB 539. (Compl., P. 1.)

However, the loans in question originated from the Bank, not OppFi. (Compl., P. 1.)

OppFi only provides the Bank with technology and other services under a contractual arrangement (the "Program"). (Compl., P. 1.)

Moreover, the interest rate caps in the CFL should not apply to loans originated under the Program ("Program Loans") for the following reasons: First, Program Loans are constitutionally and statutorily exempt from California's maximum interest rate caps because the loans are made by the Bank, a state-chartered bank located in Utah.

Second, OppFi does not make loans under the Program in California. As such, it is not a "finance lender" under the CFL with respect to its Program-related activities and, therefore, is not subject to the interest rate caps established by AB 539 for those activities.

Third, even if AB 539 could arguably apply to OppFi, Section 27 of the Federal Deposit Insurance Act ("FDIA"), 12 U.S.C. Sec. 1831d (hereinafter "Section 27") preempts the application of AB 539 to Program Loans. (Compl., P. 2.)

The inapplicability of the CFL's interest rate caps to the Program is not controversial or new, but rooted in long-existing constitutional and statutory exemptions under California law for loans made by state-chartered banks and decades of well-settled federal law. (Compl., P. 3.)

Federal law permits state-chartered banks to export the interest rates allowed in their chartering state to any other state in the country. (Compl., P. 3.)

Federal law also preempts any efforts by state legislatures to apply their state's interest rate caps to loans made by state-chartered banks in other states.

Indeed, in passing AB 539, the Legislature expressly acknowledged what is obvious: AB 539 does not apply to "nondepositories that partner with banks," like OppFi. (Compl., P. 3.)

The Commissioner is well aware of these settled principles. (Compl., P. 4.)

Indeed, before AB 539, the Bank originated Program Loans that would have been subject to the interest caps under AB 539, but the Commissioner and her predecessors never objected to those loans. (Compl., P. 4.)

Allegations in the Commissioner's Cross-Complaint OppFi is not a bank, but a publicly traded company that originates consumer installment loans called "OppLoans" through its website. (Commissioner's XC, P. 3.)

Consumers apply for a loan on OppFi's website, and OppFi uses an automated underwriting model where loans can be instantly approved or denied with most funds available the next business day. (Commissioner's XC, P. 3.)

The Bank is a Utah-chartered bank that has essentially "rented" its charter to OppFi to charge higher interest rates to consumers through the "OppLoans" product. (Commissioner's XC, P. 4.)

State-chartered banks that are federally insured are exempt under Section 27 from state interest rate caps. (Commissioner's XC, P. 4.)

The State of Utah does not have a state interest cap, making its state-chartered banks attractive to non-bank lenders like OppFi. (Commissioner's XC, P. 4.)

To address predatory lending (a national problem causing consumers to become trapped in a cycle of debt due to high interest installment loans that are difficult to pay off), approximately 45 states passed laws capping the interest rates lenders can charge on consumer loans. (Commissioner's XC, P. 1.)

In 2019, California passed AB 539, capping interest rates on most consumer loans at 36%. (Commissioner's XC, P. 1.)

In response, non-bank lending companies partner with various state-chartered banks in the few remaining states without interest rate caps to benefit from the exemption that the state-chartered banks have under federal law from other states' interest rate cap laws (also known as usury laws). (Commissioner's XC, P. 1.)

These "rent-a-bank" partnerships, like the one between OppFi and the Bank, are typically structured so that a state-chartered bank (here, the Bank) in a state without interest rate caps appears on paper to be the "lender" on high interest loans to consumers in another state where rates are capped, while the non-bank lending company (here, OppFi) performs the actual duties of a real lender such as marketing, underwriting, and servicing. (Commissioner's XC, P.P. 2, 5.)

Although the state-chartered bank purports to originate the exorbitant interest loan, it immediately sells the loan to the non-bank lending company or the bulk of the receivables (meaning the right to interest and principal payments). (Commissioner's XC, P. 2.)

From this point forward, the state-chartered bank has no financial stake in the performance of the loan, and the non-bank lending company, the "true lender," reaps the economic benefits of the loan. (Commissioner's XC, P. 2.)

Because a state-chartered bank is the "lender" on paper, the non-bank lending company purports to "rent" the state-chartered bank's exemption and charge consumers interest rates exorbitantly higher than those legally permitted in the consumer's state. (Commissioner's XC, P. 2.)

In enacting a 36% interest rate cap on consumer loans between $2,500 and $9,999, California has made a public policy determination regarding the appropriate balance between affording consumers fair access to credit and the protection of its most vulnerable citizens. (Commissioner's XC, P. 7.)

Far from an effort to remove financial barriers for underserved communities, OppFi's predatory "rent-a-bank" ruse is an overt attempt to evade the state interest rate cap and must be recognized as an illegal sham that has no place in California's innovative financial marketplace. (Commissioner's XC, P. 5.)

Through this rent-a-bank ruse, OppFi uses the Bank as a straw lender in a gambit to circumvent interest rate limits that the State of California deemed reasonable and necessary to curb predatory lending abuses. (Commissioner's XC, P. 5.)

However, regardless of which entity the loan documents proffer as the purported "lender," OppFi is the true lender of the OppLoans, and the loans OppFi makes are illegal in California. (Commissioner's XC, P. 5.)

Therefore, the Commissioner filed the Cross Complaint seeking to enjoin OppFi's unlawful predatory lending scheme, provide restitution to exploited borrowers, and impose penalties of at least $100 million against OppFi, and those acting in concert, for the financial harm inflicted on at least 38,000 California borrowers. (Commissioner's XC, P. 8.)

b. Allegations in OppFi's Cross-Complaint The DFPI is an agency of the State of California that is legally charged to execute any laws relating to finance lenders. (OppFi's XC, P. 10.)

OppFi's Cross-Complaint against the Commissioner and DFPI (collectively, "Cross-Defendants") challenges DFPI's adoption of the so-called "true lender doctrine" to determine the applicability of the interest rate caps under the CFL. (OppFi's XC, P. 1.)

As outlined in OppFi's Complaint, the Commissioner threatened to enforce AB 539's interest cap against OppFi for loans originated by the "Bank." (OppFi's XC, P. 3.)

However, the CFL's interest rate caps only apply to "finance lenders," which does not include state-chartered banks like the Bank. (OppFi's XC, P. 3.)

Nonetheless, the Commissioner has sued OppFi for violating those interest rate caps. (OppFi's XC, P. 3.)

The DFPI's underground adoption of its "true lender doctrine" is a significant departure from Cross-Respondents' enforcement of the CFL's interest rate caps before AB 539. (OppFi's XC, P. 6.)

In addition, the Administrative Procedure Act ("APA"), Gov't Code Sec. 11340 et seq. was designed to provide regulated entities notice of a regulation's requirements so that they could conform their activities accordingly and, if necessary, test the authority of the agency to implement such a rule beforehand. (OppFi's XC, P. 7.)

Therefore, the true lender doctrine is subject to the notice and comment rulemaking procedures of the APA because it is intended to "apply generally, rather than in a specific case," and "implement[s], interpret[s], or make[s] specific the law enforced or administered by" Cross-Respondents. (OppFi's XC, P. 6, citing Tidewater Marine Western, Inc. v. Bradshaw (1996) 14 Cal.4th 557, 566, 571 in a footnote.)

Instead of complying with the APA, DFPI adopted the true lender doctrine without any formal notice at all, much less fair or adequate notice, and without complying with the APA. (OppFi's XC, P. 7.)

As a result, service providers like OppFi now face an existential threat to their businesses and significant monetary penalties based on an interpretation of the CFL adopted by the DFPI without complying with the APA. (OppFi's XC, P. 7.)

They also face the challenge of complying with a vague and amorphous test that leaves the applicability of the CFL's interest rate cap to the regulator's discretion. (OppFi's XC, P. 7.)

At base, this renders the CFL's exemption for state-chartered banks meaningless. (OppFi's XC, P. 7.)

The APA's rulemaking procedures are intended to prevent these unfair results. (OppFi's XC, P. 7.)

Therefore, because DFPI did not submit its "true lender doctrine" to the APA's rule-making process, it is invalid as an "underground regulation" and cannot be enforced. (OppFi's XC, P. 8.)

II. LEGAL STANDARD Except as otherwise expressly provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding. (Code Civ. Proc., Sec. 1032(b).)

Under Code of Civil Procedure section 1033.5(c)(2), allowable costs "shall be reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation."¿Subdivision (3) requires: "Allowable costs shall be reasonable in amount."¿"Items not mentioned in [Section 1033.5] and items assessed upon application may be allowed or denied in the court's discretion." (Code Civ. Proc., Sec. 1033.5, subd. (c)(4).)

There is no requirement that copies of bills, invoices, statements, or any other such documents be attached to the memorandum. Only if the costs have been put in issue via a motion to tax costs must supporting documentation be submitted. (Bach v. County of Butte (1989) 215 Cal.App.3d 294, 308.)

On a motion to tax costs, "[i]f the items appearing in a cost bill appear to be proper charges, the burden is on the party seeking to tax costs to show that they were not reasonable or necessary. On the other hand, if the items are properly objected to, they are put in issue and the burden of proof is on the party claiming them as costs. Whether a cost item was reasonably necessary to the litigation presents a question of fact for the trial court and its decision is reviewed for abuse of discretion. However, because the right to costs is governed strictly by statute a court has no discretion to award costs not statutorily authorized." (Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761, 774, internal citations omitted.)

"The court's first determination, therefore, is whether the statute expressly allows the item, and whether it appears proper on its face. If so, the burden is on the objecting party to show them to be unnecessary or unreasonable." (Nelson v. Anderson (1999) 72 Cal.App.4th 111, 131, internal citations omitted.)

The objecting party does not meet this burden by arguing that the costs were not necessary or reasonable but must present evidence and prove that the costs are not recoverable. (Litt v. Eisenhower Med. Ctr. (2015) 237 Cal.App.4th 1217, 1224; Seever v. Copley Press, Inc. (2006) 141 Cal.App.4th 1550, 1557.)

Rule of Court 3.1700 states, "A prevailing party who claims costs must serve and file a memorandum of costs within 15 days after the date of service of the notice of entry of judgment or dismissal by the clerk under Code of Civil Procedure section 664.5 or the date of service of written notice of entry of judgment or dismissal, or within 180 days after entry of judgment, whichever is first."

III. DISCUSSION As stated above, on June 8, 2026, following the Court granting OppFi's motion for summary judgment, OppFi filed a memorandum of costs seeking reimbursement of the following costs: $3,260.85 for filing and motion fees; $150.00 for jury fees; $136,640.85 for deposition costs $2,671.50 for services of process; $7,210.94 for court reporter fees, and $847.16 for e-filing fees.

The Commissioner and DFPI seek to tax the following costs: $1,319.25 for filing and motion fees; $150.00 for jury fees; $122,922.24 for deposition costs; and $2,671.51 for service of process.

Thus, the Commissioner and DPFI request for the Court to tax $127,062.99 of OppFi's claimed costs.

A. Prevailing Party The litigation involved three separate pleadings: OppFi's Complaint against the Commissioner, the Commissioner's Cross-Complaint against OppFi, and OppFi's Cross-Complaint and Cross-Petition for Writ of Mandate against the Commissioner and DFPI.

The Commissioner and DFPI argue that since the Court dismissed OppFi's Complaint and Cross-Complaint without prejudice as moot, OppFi is not the prevailing party as to those pleadings, and therefore cannot recover any costs associated with litigating them.

As stated above, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding. (Code Civ. Proc., Sec. 1032(b).)

A prevailing party includes "the party with a net monetary recovery, a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains any relief, and a defendant as against those plaintiffs who do not recover any relief against that defendant." (Id. Sec. 1032(a)(4).)

"[T]he trial court has no discretion to deny prevailing party status to a litigant who falls within one of the four statutory categories in the first [sentence] of the provision. 'As rewritten [in 1986], section 1032 now declares that costs are available as "a matter of right" when the prevailing party is within one of the four categories designated by statute.' " [Citations.]" (Charton v. Harkey (2016) 247 Cal.App.4th 730, 738.)

Here, the Court granted summary judgment in favor of OppFi on the Commissioner's cross-complaint, and subsequently dismissed as moot OppFi's complaint and cross-complaint on the ground that the issues raised were resolved by the Court finding that the Commissioner cannot establish that OppFi is the true lender of the Program Loans. (See, e.g., Barth-Wittmore Ins. v. H.R. Murphy Enters., Inc. (1985) 169 Cal.App.3d 124, 135 [dismissing a cross-complaint as moot where, "although it initially presented an existing controversy ..., a court decision [has] deprived the controversy of its life"].)

In entering its judgment, the Court affirmatively found that OppFi "is the prevailing party and is entitled to recover its costs, to be determined hereafter by appropriate proceedings."

Thus, the Court expressly found that OppFi is the prevailing party in this action, which includes OppFi's complaint and cross-complaint. (See Westamerica Bank v. MBG Indus., Inc. (2007) 158 Cal.App.4th 109, 132 ["A complaint and cross-complaint are treated as independent actions for most purposes, except with respect to the requirement of one final judgment."].)

Nonetheless, the Court now finds that OppFi is considered the prevailing party under section 1032(a) for purposes of obtaining its costs in litigating the entirety of this action.

As stated prior, a prevailing party is defined as "the party with a net monetary recovery, a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains any relief, and a defendant as against those plaintiffs who do not recover any relief against that defendant." (Code Civ. Proc., Sec. 1032(a)(4).)

"When any party recovers other than monetary relief and in situations other than as specified [above], the 'prevailing party' shall be as determined by the court, and under those circumstances, the court, in its discretion, may allow costs or not...." (Ibid.)

While the Commissioner and DFPI argues that, with respect to OppFi's complaint and cross-complaint, they should be considered "a defendant in whose favor a dismissal is entered," t in fact, "[t]here is no prevailing party under the specified situations outlined in Code of Civil Procedure section 1032, subdivision (a)(4), because [OppFi] obtained some relief against [the Commissioner and DFPI]" by obtaining a favorable resolution on the Commissioner's cross-complaint by way summary judgment. (City of Santa Maria v. Adam (2016) 248 Cal.App.4th 504, 516.)

While the Court dismissed OppFi's complaint and cross-complaint, the dismissal was only entered because the Court had determined that [OppFi's] litigation objectives had already been met, specifically by prevailing on the Commissioner's assertion that OppFi is the true lender of the Program Loans.

Given that this is considered nonmonetary relief, the second sentence of section 1032(a)(4) controls and "the 'prevailing party' shall be as determined by the court, and under those circumstances, the court, in its discretion, may allow costs or not[.]" (Code Civ. Proc., Sec. 1032(a)(4); In these situations, "the trial court in its discretion determines the prevailing party, comparing the relief sought with that obtained, along with the parties' litigation objectives as disclosed by their pleadings, briefs, and other such sources." (On-Line Power, Inc. v. Mazur (2007) 149 Cal.App.4th 1079, 1087.)

The Court finds OppFi as the prevailing party and in its discretion awards OppFi its costs associated with litigating the entirety of the action, including its complaint and cross-complaint which were dismissed as moot.

The Commissioner and DFPI's cited authority do not compel a different result. (City of Long Beach v. Stevedoring Servs. of Am. (2007) 157 Cal.App.4th 672 (Long Beach); Cano v. Glover (2006) 143 Cal.App.4th 326 (Cano).)

In Long Beach, the Court held that "[t]here is no exception in the cost statute for dismissals of cross-complaints obtained on the ground that the cross-complaint has become moot. When a cross-complaint is dismissed as moot, the cross-defendant is one in whose favor the cross-complaint was dismissed and is therefore a prevailing party under Code of Civil Procedure section 1032 entitled to costs as a matter of right." (Long Beach, supra, 157 Cal.App.4th at p. 680.)

This is the conclusion upon which the Commissioner and DFPI rely.

However, the context in Long Beach is simply not analogous to the case here.

In Long Beach, the plaintiff sued the City and others for personal injury. (Long Beach, supra, 157 Cal.App.4th at p. 677.)

The City filed a cross-complaint against SSA. (Ibid.)

SSA in turn filed a cross-complaint against third-party Parsons. (Ibid.)

The trial court granted SSA's motion for summary judgment as to the City's cross-complaint. (Ibid.)

Because SSA was not liable to the City, the court dismissed SSA's cross-complaint against Parsons as moot. (Ibid.)

The appellate court affirmed the trial court finding that Parsons was the prevailing party and awarding Parsons its costs against SSA. (Id. at p. 680.)

Unlike the case here, third-party Parsons in Long Beach, whose only connection to the underlying litigation was through SSA's cross-complaint, was deemed the prevailing party because "dismissal of the cross-complaint against it allowed Parsons to achieve its litigation objective of avoiding liability." (Long Beach, supra, 157 Cal.App.4th at p. 679.)

Here, it was OppFi who obtained its litigation objective by obtaining a favorable resolution on the Commissioner's claim that OppFi is the true lender of the Program Loans.

The dismissal of OppFi's complaint and cross-complaint was merely the consequence that directly derived from OppFi's success on the Commissioner's cross-complaint.

The circumstances in Cano did not consist of cross-pleadings at all.

As the Court unequivocally stated in its judgment following its granting of OppFi's motion for summary judgment, "OppFi is the prevailing party and is entitled to recover its costs[.]"

B. Reasonableness of Costs "All costs awarded to a prevailing party must be (1) incurred by that party, whether or not paid; (2) 'reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation'; and (3) reasonable in amount." (Charton, supra, 247 Cal.App.4th at p. 739; Code Civ. Proc., Sec. 1033.5(c)(1)-(3).)

"[I]tems on a verified cost bill are prima facie evidence the costs, expenses and services listed were necessarily incurred, and when they are properly challenged the burden of proof shifts to the party claiming them as costs." (Hadley v. Krepel (1985) 167 Cal.App.3d 677, 682.)

"[T]he burden is upon the moving party to establish the illegality of the challenged items; otherwise the amount demanded in the verified cost bill is controlling." (Wilson v. Nichols (1942) 55 Cal.App.2d 678, 682-83.)

i. Filing and Motion Fees First, the Commissioner and DFPI argues that OppFi's filing and motions fees include costs that were not reasonably necessary given the nature of the litigation and California precedent, and that OppFi should not recover costs for its petition for writ to the Second District Court of Appeals or its pro hac vice application for Brian Wegrzyn.

The Commissioner and DPFI argue that OppFi's petition for writ was unreasonable given the Court's demurrer ruling on the Commissioner's cross-complaint overruling the demurrer.

However, OppFi's writ petition appropriately sought review of a key decision in this case, which could have resolved this case three years earlier than OppFi's motion for summary judgment.

Also, in OppFi's point of view, The Court's denial of OppFi's Demurrer was in direct conflict with a decision made by Judge Hamilton in the Northern District of California just a few months earlier. (Abugheida Decl., P. 2; Sims v. Opportunity Fin., LLC (N.D. Cal. Apr. 13, 2021) 2021 WL 1391565, at *1.)

Thus, OppFi reasonably believed that these conflicting decisions warranted review.

OppFi's desire to clarify whether the Court was correct in overruling the demurrer, particularly in context of federal persuasive authority, and to potentially end litigation early on in the case does not equate to an unreasonable cost.

The Commissioner and DPFI also argue that OppFi's pro hac vice application for Brian Wegrzyn was unnecessary as he never signed any substantive motions filed with the Court nor made any arguments at hearing.

However, OppFi provides that it sought admission of Mr. Wegrzyn in preparation for trial, which was just weeks away. (Abugheida Decl., P. 3.)

The Court declines to place judgment on OppFi's chosen trial strategy, specifically to obtain Mr. Wegrzyn's assistance.

This is not an unreasonable or unnecessary cost.

The Court does not tax OppFi's claimed filing and motion fees. (Code Civ. Proc., Sec. 1033.5(a)(1).)

ii. Jury Fees Second, the Commissioner and DPFI argues that the cost for jury fees was unnecessarily incurred because the law is clear that OppFi did not have a right to a jury trial.

OppFi posted its jury fees on August 15, 2022, following the filing of OppFi's complaint and the Commissioner's cross-complaint.

While actions for declaratory judgment and injunctions are undoubtedly equitable, the Commissioner's CFL and CCFPL causes of action posed an unclear question.

The Court emphasized this in its ruling striking OppFi's jury demand. (Sept. 5, 2024 Order ["the Court does not find OppFi has sufficiently established that there is a right to a jury trial for usury causes of action. In the cases cited in support by OppFi, the courts did not discuss the issue of whether usury sounds in equity or in law."].)

Also, pertaining to OppFi's mandamus action, the "superior court has the discretion to grant [a jury trial] if there is an issue of fact essential to resolution of the case." (Valtz v. Penta Investment Corp. (1983) 139 Cal.App.3d 803, 810.)

While the Court ultimately determined that OppFi did not present an "essential factual issue or persuasive basis for the Court to exercise its discretion[,]" the fact that OppFi chose to preserve its right to a jury trial by posting jury fees considering the vague legal landscape was not unreasonable.

The Court does not tax OppFi's claim for jury fees. (Code Civ. Proc., Sec. 1033.5(a)(1).)

iii. Service of Process Next, the Commissioner and DFPI argue that the service of process costs concern thirdparty subpoenas solely related to OppFi's dismissed underground regulation claim.

Not considering that the Court above concluded that OppFi is entitled to all reasonably incurred costs related to the entirety of the action, which includes each of the three pleadings, the Court does not find that subpoenas related to "OppFi's underground regulation theory" to be unreasonable and unnecessary to the adjudication of the Commissioner's cross-complaint.

OppFi's underground regulation theory was not only relevant to OppFi's cross-complaint as OppFi's answer to the Commissioner's cross-complaint (on which OppFi indisputably prevailed) raised as its Sixth Affirmative Defense that the cross-complaint was barred and unenforceable under Government Code Section 11340.5, subd. (a), i.e. that the cross-complaint failed as it attempted to enforce an underground regulation.

Prior to the Court granting OppFi's motion for summary judgment, a ruling that disposed of the entire case, the parties were preparing for trial which was mere weeks away.

It was not unreasonable or unnecessary for OppFi to obtain discovery on an affirmative defense that OppFi would have asserted at trial.

The Court does not tax OppFi's service of process costs. (Code Civ. Proc., Sec. 1033.5(a)(4).)

iv. Deposition Costs Lastly, the Commissioner and DFPI argue that the taking of some depositions should be taxed.

First, the Commissioner and DFPI contend that the depositions of Douglas Ross (financial examiner), Elise Lowe (nee Wong)(financial examiner), Quan Tran (financial examiner), Joanna Lee (financial examiner), William Mejia (financial examination manager), Frank Denegri (financial examination manager), Johnny Vuong (counsel), Dan O'Donnell (Assistant Chief Counsel as PMQ), and Matthew Norman (financial examiner) should be taxed because they were directed primarily toward developing OppFi's underground regulation theory rather than the claims adjudicated on summary judgment. (Scollan Decl., P. 20.)

As stated above, discovery on "OppFi's underground regulation theory" was also relevant to OppFi's affirmative defense to the Commissioner's cross-complaint.

Development of this theory in OppFi's defense to the Commissioner's cross-complaint was neither unreasonable nor unnecessary.

Second, the Commissioner and DFPI contend that the depositions of Kenneth Wu and Jennifer Marks were not reasonably necessary in the manner conducted because both witnesses provided "written declarations."

The fact that Mr. Wu and Ms. Marks provided their written declarations did not make it unreasonable nor unnecessary for OppFi to have wanted to take their formal depositions to examine and challenge their assertions in the declarations.

Third, the Commissioner and DFPI contend that the travel and meal expenses should be taxed.

the Commissioner and DFPI specifically argue that OppFi had California counsel located in Los Angeles, but chose to incur additional travel expenses by flying in counsel Mr. Abugheida from San Francisco, thus making such cost merely convenient.

In Thon v. Thompson (1994) 29 Cal.App.4th 1546, 1548, the Court stated that "Section 1033.5, subdivision (a)(3) does not limit reimbursement for deposition travel to travel by attorneys practicing in the court's jurisdiction. The trial court did not err in awarding costs incurred by Bakersfield attorneys to attend depositions in San Diego County."

Here, most of the depositions were taken in Los Angeles County and that necessitated travel by one of OppFi's lead attorneys, Mr. Abugheida, who resides in the Bay Area.

There was also a deposition in San Francisco, which necessitated travel by OppFi's lead counsel, Mr. Levin, who is based in Los Angeles. (Abugheida Decl., P. 7.)

OppFi also declares that the locations for these depositions were done at the preference of DFPI. (Ibid.; see Thon, supra, 29 Cal.App.4th at p. 1548 ["nothing in the record indicates the trial court failed to weigh the need in determining to award the travel costs for depositions. A declaration is sufficient proof to support a finding of fact."] .)

OppFi's counsel's travel costs to these depositions were thus reasonable and necessary to the litigation.

The Court does not tax OppFi's deposition costs. (Code Civ. Proc., Sec. 1033.5(a)(3).)

IV. CONCLUSION Based on the foregoing, the Commissioner and DFPI's motion to tax costs is DENIED.

OppFi is entitled to recover the entirety of its claimed costs.

Dated this 27th day of August 2026 | | | Hon. Gary D. Roberts Judge of the Superior Court | Case Number: 24STCV26032 Hearing Date: August 27, 2026 Dept: 733 SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES TB LLC, a California limited liability company, Plaintiff, vs. SERGIO MORALES (aka SERGIO MORENO MORALES), an individual; S.M.M. INVESTMENTS, INC., a California corporation; ESTATE OF BEN SHAOOL, Deceased; an individual; SARASHOOL LLC, a California corporation; and DOES 1- 20, inclusive, Defendants. |))))))))))