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1 RANDOLPH E. DAAR (SBN 88195)
BEN ROSENFELD (SBN 203845)
2 ATTORNEYS AT LAW
ELECTRONICALLY
3 3330 Geary Blvd., 3rd Floor East
San Francisco, CA 94118 F I L E D
Superior Court of California,
4 Tel: (415) 986-5591 County of San Francisco
Fax: (415) 421-1331
06/14/2022
5 randolphdaar@yahoo.com Clerk of the Court
ben.rosenfeld@comcast.net BY: ANGELICA SUNGA
6 Deputy Clerk
7 Attorneys for Plaintiff Synergy Project Management, Inc.
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SUPERIOR COURT FOR THE STATE OF CALIFORNIA
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11 COUNTY OF SAN FRANCISCO
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SYNERGY PROJECT MANAGEMENT, Case Nos. CGC-17-560034
13 INC., Plaintiff, and CGC-19-576488, consolidated
14 v. DECLARATION OF COUNSEL
15 BEN ROSENFELD IN SUPPORT OF
CITY AND COUNTY OF SAN FRANCISCO, PLAINTIFF SYNERGY’S OPPOSITION
16 et al., Defendants. TO CITY DEFENDANTS’ DEMURRER
______________________________________
17 Date: June 27, 2022
GHILOTTI BROS., INC., Plaintiff, Time: 9:30 am.
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Dept.: 302 (Hon. Richard Ulmer)
19 v.
Action Filed: July 10, 2017
20 SYNERGY PROJECT MANAGEMENT, Trial Date: February 6, 2023
INC., a California Corporation, DOES 1-30,
21 Defendants.
______________________________________
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23 SYNERGY PROJECT MANAGEMENT,
Cross-Complainant,
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v.
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26 GHILOTTI BROS, INC., ROES 1-20,
Cross-Defendants.
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D ECL . B EN R OSENFELD ISO S YNERGY ’ S O PPOSITION TO C ITY D EFS ’ D EMURRER C ASE No. CGC-17-560034
1 I, Ben Rosenfeld, declare as follows:
2 1. I am over the age of 18. I am an attorney licensed to practice law throughout the State
3 of California and in this Court. I am co-counsel for Plaintiff Synergy Project Management, Inc.
4 with Attorney Randolph E. Daar.
5 2. Mr. Daar and I substituted in as counsel for Synergy on December 28, 2021. We have
6 worked diligently since that time to get up to speed in this case, familiarize ourselves with the
7 detailed facts and complex procedural history of this case, meet and confer with defense counsel
8 about how best to put the case on track for trial, prepare Synergy’s Proposed Fourth Amended
9 Complaint, and its still-pending Motion to Reopen Discovery, and respond to defendants’ filings.
10 3. In my understanding of the law, the City has failed to comply with CCP § 430.41 by
11 failing to submit a declaration accompanying its demurrer attesting to its meet and confer efforts
12 with me and my co-counsel, Randolph Daar. CCP § 430.41 requires the City to have “file[d] and
13 serve[d] with the demurrer a declaration” describing the City’s meet and confer efforts with the
14 City. CCP § 430.41(a)(3)(A), (B). The City has not complied with this requirement. Rather, the
15 City’s lead counsel, DCA Jaime Huling Delaye, relies on an earlier, May 23, 2022 “Declaration
16 in Support of Code of Civil Procedure sections 430.41(a)(2) and 435.5(a)(2),” attached to her co-
17 counsel, Kristine Poplawski’s declaration, which the City filed not in support of its demurrer, but
18 in support of its motion to strike. DCA Poplawski did not even associate into the case until May
19 20, 2022—after DCA Huling Delaye met and conferred by phone with Mr. Daar on May 9,
20 2022, and Ms. Huling Delaye and Ms. Poplawski met and conferred by phone with me on May
21 18, 2022. (See Poplawski Decl. ISO City’s Motion to Strike, at ¶¶3, 5.) I am informed and
22 believe that Ms. Poplawski was not even present during the meet and confer conference with
23 Mr. Daar on May 9, 2022.
24 4. On its face, this does not satisfy the requirements of CCP § 430.41(a)(3)(A), (B). Far
25 from a mere technicality, the City cannot attest that it met and conferred with Synergy regarding
26 the sufficiency, vel non, of Synergy’s pleading of the elements of its causes of action, because
27 the City flatly did not do so. (See Part IV-A of Synergy’s opposition to the City’s demurrer.)
28 Although CCP § 430(a)(4) prohibits the Court from overruling a demurrer based on the
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D ECL . B EN R OSENFELD ISO S YNERGY ’ S O PPOSITION TO C ITY D EFS ’ D EMURRER C ASE No. CGC-17-560034
1 insufficiency of the meet and confer process, this does not absolve the City of its failures (a) to
2 satisfy the statute’s procedural requirements, or (b) to meet and confer at all on one of its major
3 asserted grounds.
4 5. At no time prior to filing its instant demurrer did the City raise or seek to meet and
5 confer with Synergy regarding any alleged insufficiency with respect to Synergy’s pleading of
6 the elements of its tortious interference claims. Ex. D hereto is a true and correct copy of Deputy
7 City Attorney Jaime Huling Delaye’s May 5, 2022 Meet and Confer letter to me and Mr. Daar,
8 stating the City’s demurrer grounds.)
9 6. Exhibit A hereto is a true and correct copy of the City’s January 10, 2017 Notice of
10 Rejection of Synergy’s January 5, 2017 tort claim, which did not notify Synergy that the City
11 considered the claim late.
12 7. The City twice moved years ago to dismiss Synergy’s tortious interference claims in
13 federal court on the grounds that the City was not a stranger to Synergy’s subcontract, and in its
14 first motion on the ground that Synergy’s claims against individual defendants Breed and Nuru,
15 but not the City, were barred for lack of submission of a timely tort claim. Ultimately, the district
16 court dismissed Synergy’s interference claims because the City was not a stranger to the
17 contract, but rejected the City’s tort claim argument. Synergy has spent many thousands of
18 dollars prosecuting its case since that time.
19 8. Exhibit B hereto is a true and correct copy of Synergy’s Third Amended Complaint
20 (“TAC”), filed on May 26, 2019 in federal court. In it, Synergy added Defendant GBI, and
21 brought state law claims against GBI. On November 21, 2019, the district court granted the
22 City’s June 10, 2019 motion to dismiss all of Synergy’s then-remaining federal causes of action
23 against the City Defendants, and remanded the remainder of the case (consisting only of state
24 law claims against Defendant GBI) to this Court. This Court received the remand on November
25 25, 2019.
26 9. Exhibit C hereto is a true and correct copy of Synergy’s January 22, 2021 motion to
27 reinstate London Breed and Mohammed Nuru as defendants, which Synergy filed after (I am
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D ECL . B EN R OSENFELD ISO S YNERGY ’ S O PPOSITION TO C ITY D EFS ’ D EMURRER C ASE No. CGC-17-560034
1 informed and believe) Synergy came to learn of Breed’s and Nuru’s independently wrongful acts
2 as they bear on Synergy’s tortious interference claims in this case.
3 10. I swear under penalty of perjury under the laws of the State of California that the
4 foregoing is true and correct, except as to those matters stated on information and belief, and as
5 to those matters, I believe them to be true.
6 Sworn and subscribed to at San Francisco, California on June 14, 2022.
7 Respectfully Submitted,
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Ben Rosenfeld
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Attorney for Plaintiff Synergy
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D ECL . B EN R OSENFELD ISO S YNERGY ’ S O PPOSITION TO C ITY D EFS ’ D EMURRER C ASE No. CGC-17-560034
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9 EXHIBIT A
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C ASE No. CGC-17-560034
CITY AND COUNTY OF SAN FRANCISCO OFFICE OF THECITY A TTORNEY
DENNISJ. HERRERA Michael D. Haase
City Attorney Assistant Chief of Claims
DIRECTDIAL: (415)554-3952
E-MAIL: MiKE.HAASE@SFGOV.ORG
January 10, 2017
Kris A. Cox, Esq.
Moscone Emblidge & Otis LLP
220 Montgomery St., Ste. 2100
San Francisco, CA 94104
RE: Claim of Synergy Project Management, Inc./ Claim Number 17-01485
Department: DPWCON DPW Construction Projects
Incident Date: January 8, 2016
Claim Filed: January 5, 2017
NOTICE OF ACTION UPON CLAIM PLEASE TAKE NOTICE THAT
An investigation of your client's claim filed with the City and County of San Francisco has revealed no
indication of liabilityon the part of the City and County. Accordingly, your client'sclaim is DENIED.
WARNING
Subject to certain exceptions, your clienthas only six (6) months from the date this notice was personally
delivered or deposited in the mail to file a court action on this claim. See Government Code section
945.6. This time limitation applies only to causes of action arising under California law for which a claim
is mandated by the California Government Claims Act, Government Code sections 900 et. seq. Other
causes of action, including those arising under federal law, may have shorter time limitations for filing.
Please also be advised that, pursuant to Code of Civil Procedure sections 128.7 and I 03 8, the City and
County of San Francisco will seek to recover all costs of defense in the event an action is filedin this
matter and it is determined that the action was not brought in good faith and with reasonable cause.
Very truly yours,
DENNIS J. HERRERA
City Attorney
Michael D. Haase
Assistant Chief of Claims
Fox PLAZA ·1390 MARKET STREET,7THFLOOR· SAN FRANCISCO, CALIFORNIA 94102~5408
RECEPTION: (415) 554-3900 · FACSIMILE: (415) 554-8795
Claim of: Synergy Project Management, Inc. Claim Filed: January 5,
2017
I, Michael Haase, say: I am a citizen of the United States, over eighteen years of age, and
not a party to the within action; that I am employed by the City Attorney's Office of San
Francisco, Fox Plaza, 1390 Market Street, 7th Floor, San Francisco, CA 94102.
That on January 10, 2017 I served:
NOTICE OF ACTION UPON CLAIM
by placing a true copy thereof in an envelope addressed to:
Kris A. Cox, Esq.
Moscone Emblidge & Otis LLP
220 Montgomery St.,Ste. 2100
San Francisco, CA 94104
Following ordinary business practices, I sealed true and correct copies of the above
documents in addressed envelope(s) and placed them at my workplace for collection and mailing
with the United States Postal Service. I am readily familiar with the practices of the San
Francisco City Attorney's Office for collecting and processing mail. In the ordinary course of
business, the sealed envelope(s) that I placed for collection would be deposited, postage prepaid,
with the United States Postal Service that same day.
I declare under penalty of perjury that the foregoing is true and correct.
Executed on January 10, 2017 at San Francisco, California.
Michael Haase
DECLARATION OF SERVICE BY MAIL
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C ASE No. CGC-17-560034
1 JOHNNY D. KNADLER (SBN 220942)
LAW OFFICE OF JOHNNY D. KNADLER
2 1527-E Pershing Drive
ELECTRONICALLY
San Francisco, CA 94129
3 Telephone: (310) 564-6695 F I L E D
Facsimile: (888) 323-0611 Superior Court of California,
County of San Francisco
4 Email: jdknadler@gmail.com
01/22/2021
5 Clerk of the Court
BY: SANDRA SCHIRO
Deputy Clerk
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Attorneys for Plaintiff
7 SYNERGY PROJECT MANAGEMENT, INC.
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9 SUPERIOR COURT OF THE STATE OF CALIFORNIA
10 IN AND FOR THE COUNTY OF SAN FRANCISCO
11 SYNERGY PROJECT MANAGEMENT, Case No. CGC-17-560034
INC., (Consolidated with Case No. CGC-19-576488)
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Plaintiff,
13 NOTICE OF MOTION AND
vs. MOTION FOR LEAVE TO FILE
14 FOURTH AMENDED
CITY AND COUNTY OF SAN FRANCISCO, COMPLAINT; MEMORANDUM
15 LONDON BREED, MOHAMMED NURU, IN SUPPORT
16 Defendants.
______________________________________
17 Date: February 17, 2021
GHILOTTI BROS., INC., a California Time: 9:30 a.m.
18 Corporation, Dept: 302
19 Plaintiff, Complaint filed: July 10, 2017
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vs,
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SYNERGY PROJECT MANAGEMENT,
22 INC., a California Corporation, and
DOES 1-30,
23 Defendants.
24 ______________________________________
25 SYNERGY PROJECT MANAGEMENT, a
California Corporation,
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Cross-Complainant,
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vs.
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NOTICE OF MOTION AND MOTION FOR 1 Case No. CGC-17-560034
LEAVE TO FILE FOURTH AMENDED
COMPLAINT
1 GHILOTTI BROS, INC., a California
Corporation, and ROES 1-20,
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Cross-Defendants.
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NOTICE OF MOTION AND MOTION FOR 2 Case No. CGC-17-560034
LEAVE TO FILE FOURTH AMENDED
COMPLAINT
1 PLEASE TAKE NOTICE that on February 17, at 9:30 a.m., or as soon thereafter as the
2 matter can be heard, in Department 302 of the Superior Court, located at 400 McAllister Street,
3 San Francisco, California 94102, plaintiff, Synergy Project Management ("Synergy") will, and
4 hereby does, move for an order granting Synergy leave to file its Fourth Amended Complaint.
5 This motion is based on this Notice of Motion, the motion itself, the supporting
6 Memorandum of Points and Authorities, the proposed Fourth Amended Complaint and
7 Declaration of Johnny Knadler filed with the motion, the papers and pleadings on file and any
8 other such evidence as may be presented at the time of the hearing. This motion is made under
9 Code of Civil Procedure § 473 on the grounds that there is good cause to allow Synergy to
10 amend its complaint, that the motion is brought in good faith, and that it is in the interest of
11 justice that the court grant it.
12 The motion will be based on this Notice of Motion and Motion, the Memorandum of
13 Points and Authorities, Synergy’s Proposed Fourth Amended Complaint, the Declaration of
14 Johnny Knadler, and the [Proposed] Order filed herewith, on all of the files and records of this
15 action, and on any additional material that may be elicited at the hearing of this motion.
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Dated: January 22, 2020 LAW OFFICE OF JOHNNY D. KNADLER
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By: //SS//
19 JOHNNY D. KNADLER
20 Attorney for Plaintiff
SYNERGY PROJECT
21 MANAGEMENT, INC.
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NOTICE OF MOTION AND MOTION FOR 3 Case No. CGC-17-560034
LEAVE TO FILE FOURTH AMENDED
COMPLAINT
1 MEMORANDUM OF POINTS AND AUTHORITIES
2 I. INTRODUCTION
3 In 2017 Synergy filed this action in San Francisco Superior Court, alleging federal due
4 process, and state claims against the City and County of San Francisco and city officials arising
5 out of Synergy’s termination from two successive public construction contracts. After the matter
6 was removed to federal court, Synergy added the general contractor for one of these contracts,
7 Ghilotti Bros, Inc. as a defendant. Following dismissal of the federal claims, this matter was
8 remanded to this Court.
9 Over the course of 2020, announcement of a series of federal criminal prosecutions
10 revealed that one of the originally-named defendants, San Francisco Department of Public
11 Works Director Mohammed Nuru and other high-level city officials, had engaged in a multi-year
12 scheme to deprive the public of honest services, by accepting bribes and kickbacks in exchange
13 for the exercise of these officials’ power and influence to award public contracts and other
14 benefits, to the detriment of other businesses, like Synergy, which did not pay bribes or
15 kickbacks to these official. These prosecutions, culminating with the November 30, 2020 arrest
16 of San Francisco Public Utilities Commission head Harlan Kelly, revealed that as a part of this
17 scheme, Nuru and Kelly terminated one of the Synergy contracts at issue in this case order to
18 compensate one of the companies paying them bribes, by assigning Synergy’s work to that
19 company. Further, the disclosures arising out of these investigations revealed that Synergy’s
20 removal from both of the contracts at issue stems from an entrenched system of abuse and
21 corruption by highly-placed officials colloquially known as the “City Family”.
22 Through this motion, Synergy seeks leave to amend its complaint to add and amend its
23 claims in light of the new disclosures.1 Specifically, Synergy seeks to amend its due process
24 claims to allege that Nuru and Kelly – and through them the City –terminated Synergy from the
25 contracts at issue, and effectively blacklisted Synergy from receiving City contracts, because
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Synergy’s proposed Fourth Amended Complaint is to the Declaration of Johnny D.
27 Knadler (“Knadler Decl.”), as Exhibit 1. Exhibits to the Knadler Declaration are listed
numerically (i.e. Exh.1, Exh.2), to avoid confusion with the exhibits to the Fourth Amended
28 Complaint, which are listed alphabetically (i.e. Exh.A, Exh.B)
NOTICE OF MOTION AND MOTION FOR 4 Case No. CGC-17-560034
LEAVE TO FILE FOURTH AMENDED
COMPLAINT
1 Synergy had not paid the requisite bribes or kickbacks. Synergy also seeks to add claims against
2 Nuru and Kelly for conspiracy to violate civil rights, civil racketeering, and fraudulent
3 concealment, based on the fraud scheme disclosed in the criminal charges against Nuru and
4 Kelly and related disclosures, and the facts showing that the harms for which Synergy seeks
5 relief here were in part caused in furtherance of that scheme.
6 Concurrent with these amendments, Synergy also seeks to add federal due process
7 claims, and claims for unjust enrichment against Ghilotti Bros., Inc., based on events occurring
8 after Ghilotti was named as a defendant, and discovery produced by Ghilotti in this litigation.
9 Synergy was unaware of the newly-disclosed facts relating to the fraud scheme between
10 Nuru, Kelly and other City officials, or the role the scheme played in causing the injuries for
11 which Synergy seeks relief in this action. Synergy’s motion is supported by good cause, is not
12 brought in bad faith, and will not prejudice defendants. Leave to amend should be granted.
13 II. STATEMENT OF FACTS AND PROCEDURAL HISTORY
14 On July 10, 2017 Synergy filed suit in this Court against the City and County of San
15 Francisco (“the City”), and related departments and City personnel (Synergy v. City and County
16 of San Francisco, et al, San Francisco Superior Court Case No. CGC-17-560034. The case arose
17 out of a general contract entered into between the City and Ghilotti Brothers Inc. (“Ghilotti”) to
18 replace the sewer line at Haight Street (the “Haight Street Project”). Ghilotti selected Synergy as
19 a subcontractor, and Synergy was listed on the bid to the City. In the lawsuit, Synergy alleged
20 that the City unlawfully terminated Synergy as a subcontractor on the Haight Street Project, in
21 violation of California Public Contract Code section 4107, and interfered with Synergy’s
22 contract with Ghilotti. Synergy also alleged that the City’s termination of Synergy from the
23 Haight Street Project, and a subsequent project located on San Francisco’s Van Ness Street,
24 violated Synergy’s constitutional rights of due process, stigma-plus due process and rights to be
25 protected against retaliation for the exercise of constitutional rights.
26 Defendants removed the case to federal court on November 24, 2017.
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NOTICE OF MOTION AND MOTION FOR 5 Case No. CGC-17-560034
LEAVE TO FILE FOURTH AMENDED
COMPLAINT
1 On February 19, 2019, Synergy moved unopposed for leave to file a third amended (“first
2 case TAC”) complaint adding Ghilotti as a defendant. On May 21, 2019, the Court granted
3 Synergy’s request for leave to file a third amended complaint, which Synergy filed on May 26,
4 2019.
5 On June 10, 2019 and June 26, 2019, City Defendants and GBI, respectfully, moved to
6 dismiss Synergy’s third amended complaint.
7 On June 26, the California Supreme Court denied Synergy’s petition for review of the
8 California Court of Appeal decision in Synergy Project Management, Inc. v. City and County of
9 San Francisco. See Synergy Project Management, Inc. v. City and County of San Francisco, No.
10 A151199, 33 Cal. App. 5th 21 (March 14, 2019), review denied June 26, 2019. In so doing, the
11 Supreme Court upheld the Court of Appeal’s finding that the City’s termination of Synergy was
12 authorized under section 4107.
13 On, Synergy moved for leave to file a fourth amended complaint, alleging Ghilotti’s
14 liability, as a state actor, for Synergy’s federal claims, based on the Supreme Court’s decision.
15 Synergy also moved to amend its claims against the government defendants, based on arguments
16 the government defendants raised for the first time in moving to dismiss the third amended
17 complaint.
18 On August 14, 2019, the district court denied Synergy’s motion to amend without
19 prejudice, pending ruling on the motion to dismiss. On November 21, 2019 the Court granted in
20 part the motions to dismiss, dismissing with prejudice Synergy’s federal claims against the
21 government defendants, and remanding Synergy’s state law claims to Superior Court, where the
22 action originally was filed. The district court never ruled on the merits of Synergy’s motion to
23 amend.
24 On December 19, 2019, Synergy appealed the district court’s order to the Ninth Circuit
25 Court of Appeal. Synergy Project Management, Inc. v. City and County of San Francisco, et al.,
26 (9th Cir. Case No. 19-17558) (On appeal from U.S.D.C. Case No. 4:17-cv-06763 JST).
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NOTICE OF MOTION AND MOTION FOR 6 Case No. CGC-17-560034
LEAVE TO FILE FOURTH AMENDED
COMPLAINT
1 On August 12, 2020, the court consolidated this case with a latter-filed case, Ghilotti
2 Bros Inc. v. Synergy, Case No. CGC-19-576488. Ghilotti filed its answer to Synergy’s Third
3 Amended Complaint on November 4, 2020. The matters are currently set for jury trial on March
4 29, 2021.
5 In January 2020, Mohammed Nuru was charged with honest services wire fraud in a
6 federal criminal complaint. A copy of that complaint (the “Nuru Complaint”) is attached hereto
7 as Exhibit 2. The Nuru Complaint revealed an elaborate kickback scheme through which Nuru
8 and other officials accepted money and services from Azul Works principal, Balmore
9 Hernandez, in exchange for Nuru’s efforts to funnel contracts to Azul Works. In June 2020,
10 Walter Wong pled guilty, inter alia, to committing, as a part of the scheme, a RICO “predicate
11 act”, Conspiracy to Commit Honest Services Fraud in violation of 18 U.S.C. §§ 1343, 1346 and,
12 by conspiring with NURU and other public officials. On September 24, 2020, the City
13 Attorney’s Public Integrity unit issued a Public Integrity Preliminary Assessment titled, “Gifts to
14 Departments Through Non-City Organizations Lack Transparency and Create “Pay-to-Play”
15 Risk”. On or about September 17, 2020, AzulWorks’ owner, Balmore Hernandez, pled guilty to
16 one count of Conspiracy to Commit Honest Services Wire Fraud in violation of 18 U.S.C.
17 §§1343, 1346 and 1349. On or about November 30, 2020, Harlan Kelly was arrested by the FBI
18 on charges arising out of the FBI’s investigation of the Nuru kickback scheme. An affidavit filed
19 by the United States Attorney’s Office with the complaint against Kelly alleges that Kelly,
20 together with Nuru, engaged in a kickback scheme from 2014-2019, in which Kelly accepted
21 bribes in exchange for Kelly’s assistance in awarding City contracts to businesses that paid the
22 bribes. A copy of the that complaint and affidavit is attached hereto as Exhibit 2. (“Kelly
23 Complaint).
24 The Nuru Complaint and Kelly Complaints, together with documents arising out of these
25 prosecutions (including City Attorney investigation reports) explain how Nuru leveraged his
26 position as director of DPW to influence not only DPW, but other city agencies and officials.
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NOTICE OF MOTION AND MOTION FOR 7 Case No. CGC-17-560034
LEAVE TO FILE FOURTH AMENDED
COMPLAINT
1 Synergy’s counsel reviewed the Kelly Complaint during at some time after it was
2 published publicly on November 30, 2020. Based on that complaint, together with the other
3 documents revealed by the United States Attorney’s Office investigation arising out of
4 Mohammed Nuru’s arrest, Synergy’s counsel determined that Synergy could state causes of
5 action against Nuru and Kelly for racketeering, conspiracy and fraudulent concealment, and that
6 the disclosures also disclosed facts relevant to Synergy’s originally-pled claims.
7 Synergy’s counsel contacted counsel for Defendant GBI regarding Synergy’s desire to
8 amend its complaint. GBI declined to stipulate to the motion.
9 II. ARGUMENT
A. Relevant Law
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“The court may, in furtherance of justice, and on any terms as may be proper,
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allow a party to amend and pleading[.]” Cal. Civ. Proc. Code § 473(a)(l); see also Cal. Civ.
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Proc. Code § 576 (“Any judge, at any time before or after commencement of trial, in the
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furtherance of justice, and upon such terms as may be proper, may allow the amendment of
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any pleading.”). “There is a strong policy in favor of liberal allowance of amendments.”
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Mesler v. Bragg Mgmt. Co., 39 Cal. 3d 290, 296 (1985). If the granting of a timely motion for
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leave to amend “will not prejudice the opposing party, it is error to refuse permission to
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amend, and where the refusal also results in a party being deprived of the right to assert a
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meritorious cause of action[;j it is not only error but an abuse of discretion.” Morgan v. Super.
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Ct., (1959)172 Cal. App. 2d 527, 530 . Leave to amend may be denied for unreasonable delay
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after plaintiff ascertains a “Doe” defendant's identity resulting in prejudice to the defendant.
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A.N. v. County of Los Angeles (2009) 171 CA4th 1058, 1068.
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B. Leave to Amend Should Be Granted
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In the present case, Synergy seeks to amend the Third Amended Complaint as
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follows: (1) substitute the name of Harlan Kelly for Doe Defendant No. 1; (2) add and amend
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due process causes of action against Kelly and originally-named Defendants Breed, Nuru and
26
the City and County of San Francisco; add RICO claims against Kelly and Nuru; and (4) add
27
claims against defendant Ghilotti Bros., Inc.
28
NOTICE OF MOTION AND MOTION FOR 8 Case No. CGC-17-560034
LEAVE TO FILE FOURTH AMENDED
COMPLAINT
1 Ordinarily a judge will not consider the validity of a proposed amended pleading
2 in deciding whether to grant leave to amend, however, in this case the need and validity of the
3 proposed amendments only serve to support the granting of this motion. See Atkinson v. Elk
4 Corp. (2003) 109 Cal.App.4th at 739, 760; Kittredge Sports Co. v. Superior Ct. (1989) 213
5 Cal.App.3d 1045, 1048.
6
1. Synergy’s claims and allegations based on Nuru and Kelly’s arrest, and
7 disclosure of the City Family pay-to play fraud scheme.
8 Synergy seeks to amend its complaint to reflect the new facts learned Nuru and
9 Kelly’s arrest, following revelation of their “City Family” pay-to-play bribery/kickback
10 scheme and its connection to Synergy’s claims in this case. These revelations relate to
11 Synergy’s originally-pled claims, and support additional related claims and defendants.
12 In Nuru’s case, the disclosures establish that Nuru and Kelly caused Synergy’s
13 injuries in this case through actions they took in furtherance of the “City Family” pay-to-play
14 bribery/kickback scheme to enrich themselves and protect the political ambitions of London
15 Breed, another member of the City Family. Although Nuru’s involvement in Synergy’s
16 termination from the DPW-run Haight Street Project is alleged in the Third Amended
17 Complaint, the new disclosures revealed how Nuru exerted influence beyond DPW
18 construction projects to other departments’ projects, including SFPUC contracts, and the Van
19 Ness Project specifically. These disclosures reveal, inter alia, how Nuru accepted bribes from
20 his “Family friend” contractor, AzulWorks, in exchange for helping Azul Works unjustifiably
21 win, and grossly overcharge the City for, work previously assigned to Synergy on the Van
22 Ness Project. These disclosures also reveal that Kelly and Nuru knew of, and agreed to, each
23 other’s acts in furtherance of the scheme to defraud.
24 The facts establishing Synergy’s proposed Fourth Amendment claims against
25 Nuru, including Synergy’s claims for conspiracy to violate civil rights, racketeering, and
26 fraudulent concealment were not known until disclosure of the pay-to-pay scheme, through
27 his and Kelly’s arrest, the subsequent charging of Azul Work’s principle, Balmore Hernandez,
28
NOTICE OF MOTION AND MOTION FOR 9 Case No. CGC-17-560034
LEAVE TO FILE FOURTH AMENDED
COMPLAINT
1 the disclosures contained in the City Attorney’s post-Nuru/DBI scandal reports and other
2 materials. These disclosures also revealed facts establishing the predicate acts establishing
3 Kelly for racketeering, pursuant to the 1970 RICO Act, 18 U.S. Code § 1961 et seq., and
4 conspiracy to violated civil rights pursuant to 18 U.S.C. § 1983 (including Kelly and Nuru’s
5 agreement to conduct the scheme, and use of interstate commerce).
6 Prior to issuance of the Kelly Complaint, filed December 1, 2020, Synergy was
7 ignorant of (1) Kelly’s participation in the association-in-fact and scheme to defraud, (2) his
8 liability for use of interstate commerce in furtherance of the association-in-fact and scheme to
9 defraud and (3) his knowledge of, and agreement with, Nuru’s acts in furtherance of said
10 association and scheme. These are facts Synergy learned after December 1, 2020, and
11 (together with related disclosures made in 2020) provide the basis for Synergy to substitute
12 Kelly as a Doe Defendant for Synergy’s due process claims (based on disclosure of , and to
13 plead, with sufficient particularity, claims against Kelly (and Nuru) for racketeering, and
14 against Kelly, Nuru and the City for conspiracy to violate civil rights pursuant to 18 U.S.C.
15 §1983. See Prakashpalan v. Engstrom, Lipscomb & Lack, 223 Cal. App. 4th 1105, 1136,
16 (2014), (where fraud is alleged to be the object of the conspiracy, the claim must be pleaded
17 with particularity) (citing Favila v. Katten Muchin Rosenman LLP (2010) 188 Cal.App.4th
18 189, 211); People v. Fratianno, 132 Cal. App. 2d 610, 625 (1955) (“conspiracies are almost
19 always proven by circumstantial and ‘piecemeal’ evidence”); Sedima, S.P.R.L. v. Imrex Co.,
20 Inc., (1985) 473 U.S. 479, 496 (stating pleading requirements for violations of RICO under18
21 U.S.C. §§ (c) and (d); River City Markets v. Fleming Foods West (9th Cir. 1992), 960 F.2d
22 1458, 1463 (“[RICO] conspiracies rarely are memorialized in writing and often must be
23 proven by circumstantial evidence”).
24 Good cause exists to allow amendment to add the RICO, conspiracy, and
25 fraudulent concealment claims exists, because they involve the same primary rights
26 implicated in Synergy’s Third Amended Complai
Preview
1 RANDOLPH E. DAAR (SBN 88195) BEN ROSENFELD (SBN 203845) 2 ATTORNEYS AT LAW ELECTRONICALLY 3 3330 Geary Blvd., 3rd Floor East San Francisco, CA 94118 F I L E D Superior Court of California, 4 Tel: (415) 986-5591 County of San Francisco Fax: (415) 421-1331 06/14/2022 5 randolphdaar@yahoo.com Clerk of the Court ben.rosenfeld@comcast.net BY: ANGELICA SUNGA 6 Deputy Clerk 7 Attorneys for Plaintiff Synergy Project Management, Inc. 8 9 SUPERIOR COURT FOR THE STATE OF CALIFORNIA 10 11 COUNTY OF SAN FRANCISCO 12 SYNERGY PROJECT MANAGEMENT, Case Nos. CGC-17-560034 13 INC., Plaintiff, and CGC-19-576488, consolidated 14 v. DECLARATION OF COUNSEL 15 BEN ROSENFELD IN SUPPORT OF CITY AND COUNTY OF SAN FRANCISCO, PLAINTIFF SYNERGY’S OPPOSITION 16 et al., Defendants. TO CITY DEFENDANTS’ DEMURRER ______________________________________ 17 Date: June 27, 2022 GHILOTTI BROS., INC., Plaintiff, Time: 9:30 am. 18 Dept.: 302 (Hon. Richard Ulmer) 19 v. Action Filed: July 10, 2017 20 SYNERGY PROJECT MANAGEMENT, Trial Date: February 6, 2023 INC., a California Corporation, DOES 1-30, 21 Defendants. ______________________________________ 22 23 SYNERGY PROJECT MANAGEMENT, Cross-Complainant, 24 v. 25 26 GHILOTTI BROS, INC., ROES 1-20, Cross-Defendants. 27 28 1 D ECL . B EN R OSENFELD ISO S YNERGY ’ S O PPOSITION TO C ITY D EFS ’ D EMURRER C ASE No. CGC-17-560034 1 I, Ben Rosenfeld, declare as follows: 2 1. I am over the age of 18. I am an attorney licensed to practice law throughout the State 3 of California and in this Court. I am co-counsel for Plaintiff Synergy Project Management, Inc. 4 with Attorney Randolph E. Daar. 5 2. Mr. Daar and I substituted in as counsel for Synergy on December 28, 2021. We have 6 worked diligently since that time to get up to speed in this case, familiarize ourselves with the 7 detailed facts and complex procedural history of this case, meet and confer with defense counsel 8 about how best to put the case on track for trial, prepare Synergy’s Proposed Fourth Amended 9 Complaint, and its still-pending Motion to Reopen Discovery, and respond to defendants’ filings. 10 3. In my understanding of the law, the City has failed to comply with CCP § 430.41 by 11 failing to submit a declaration accompanying its demurrer attesting to its meet and confer efforts 12 with me and my co-counsel, Randolph Daar. CCP § 430.41 requires the City to have “file[d] and 13 serve[d] with the demurrer a declaration” describing the City’s meet and confer efforts with the 14 City. CCP § 430.41(a)(3)(A), (B). The City has not complied with this requirement. Rather, the 15 City’s lead counsel, DCA Jaime Huling Delaye, relies on an earlier, May 23, 2022 “Declaration 16 in Support of Code of Civil Procedure sections 430.41(a)(2) and 435.5(a)(2),” attached to her co- 17 counsel, Kristine Poplawski’s declaration, which the City filed not in support of its demurrer, but 18 in support of its motion to strike. DCA Poplawski did not even associate into the case until May 19 20, 2022—after DCA Huling Delaye met and conferred by phone with Mr. Daar on May 9, 20 2022, and Ms. Huling Delaye and Ms. Poplawski met and conferred by phone with me on May 21 18, 2022. (See Poplawski Decl. ISO City’s Motion to Strike, at ¶¶3, 5.) I am informed and 22 believe that Ms. Poplawski was not even present during the meet and confer conference with 23 Mr. Daar on May 9, 2022. 24 4. On its face, this does not satisfy the requirements of CCP § 430.41(a)(3)(A), (B). Far 25 from a mere technicality, the City cannot attest that it met and conferred with Synergy regarding 26 the sufficiency, vel non, of Synergy’s pleading of the elements of its causes of action, because 27 the City flatly did not do so. (See Part IV-A of Synergy’s opposition to the City’s demurrer.) 28 Although CCP § 430(a)(4) prohibits the Court from overruling a demurrer based on the 2 D ECL . B EN R OSENFELD ISO S YNERGY ’ S O PPOSITION TO C ITY D EFS ’ D EMURRER C ASE No. CGC-17-560034 1 insufficiency of the meet and confer process, this does not absolve the City of its failures (a) to 2 satisfy the statute’s procedural requirements, or (b) to meet and confer at all on one of its major 3 asserted grounds. 4 5. At no time prior to filing its instant demurrer did the City raise or seek to meet and 5 confer with Synergy regarding any alleged insufficiency with respect to Synergy’s pleading of 6 the elements of its tortious interference claims. Ex. D hereto is a true and correct copy of Deputy 7 City Attorney Jaime Huling Delaye’s May 5, 2022 Meet and Confer letter to me and Mr. Daar, 8 stating the City’s demurrer grounds.) 9 6. Exhibit A hereto is a true and correct copy of the City’s January 10, 2017 Notice of 10 Rejection of Synergy’s January 5, 2017 tort claim, which did not notify Synergy that the City 11 considered the claim late. 12 7. The City twice moved years ago to dismiss Synergy’s tortious interference claims in 13 federal court on the grounds that the City was not a stranger to Synergy’s subcontract, and in its 14 first motion on the ground that Synergy’s claims against individual defendants Breed and Nuru, 15 but not the City, were barred for lack of submission of a timely tort claim. Ultimately, the district 16 court dismissed Synergy’s interference claims because the City was not a stranger to the 17 contract, but rejected the City’s tort claim argument. Synergy has spent many thousands of 18 dollars prosecuting its case since that time. 19 8. Exhibit B hereto is a true and correct copy of Synergy’s Third Amended Complaint 20 (“TAC”), filed on May 26, 2019 in federal court. In it, Synergy added Defendant GBI, and 21 brought state law claims against GBI. On November 21, 2019, the district court granted the 22 City’s June 10, 2019 motion to dismiss all of Synergy’s then-remaining federal causes of action 23 against the City Defendants, and remanded the remainder of the case (consisting only of state 24 law claims against Defendant GBI) to this Court. This Court received the remand on November 25 25, 2019. 26 9. Exhibit C hereto is a true and correct copy of Synergy’s January 22, 2021 motion to 27 reinstate London Breed and Mohammed Nuru as defendants, which Synergy filed after (I am 28 3 D ECL . B EN R OSENFELD ISO S YNERGY ’ S O PPOSITION TO C ITY D EFS ’ D EMURRER C ASE No. CGC-17-560034 1 informed and believe) Synergy came to learn of Breed’s and Nuru’s independently wrongful acts 2 as they bear on Synergy’s tortious interference claims in this case. 3 10. I swear under penalty of perjury under the laws of the State of California that the 4 foregoing is true and correct, except as to those matters stated on information and belief, and as 5 to those matters, I believe them to be true. 6 Sworn and subscribed to at San Francisco, California on June 14, 2022. 7 Respectfully Submitted, 8 9 Ben Rosenfeld 10 Attorney for Plaintiff Synergy 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 D ECL . B EN R OSENFELD ISO S YNERGY ’ S O PPOSITION TO C ITY D EFS ’ D EMURRER C ASE No. CGC-17-560034 1 2 3 4 5 6 7 8 9 EXHIBIT A 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 C ASE No. CGC-17-560034 CITY AND COUNTY OF SAN FRANCISCO OFFICE OF THECITY A TTORNEY DENNISJ. HERRERA Michael D. Haase City Attorney Assistant Chief of Claims DIRECTDIAL: (415)554-3952 E-MAIL: MiKE.HAASE@SFGOV.ORG January 10, 2017 Kris A. Cox, Esq. Moscone Emblidge & Otis LLP 220 Montgomery St., Ste. 2100 San Francisco, CA 94104 RE: Claim of Synergy Project Management, Inc./ Claim Number 17-01485 Department: DPWCON DPW Construction Projects Incident Date: January 8, 2016 Claim Filed: January 5, 2017 NOTICE OF ACTION UPON CLAIM PLEASE TAKE NOTICE THAT An investigation of your client's claim filed with the City and County of San Francisco has revealed no indication of liabilityon the part of the City and County. Accordingly, your client'sclaim is DENIED. WARNING Subject to certain exceptions, your clienthas only six (6) months from the date this notice was personally delivered or deposited in the mail to file a court action on this claim. See Government Code section 945.6. This time limitation applies only to causes of action arising under California law for which a claim is mandated by the California Government Claims Act, Government Code sections 900 et. seq. Other causes of action, including those arising under federal law, may have shorter time limitations for filing. Please also be advised that, pursuant to Code of Civil Procedure sections 128.7 and I 03 8, the City and County of San Francisco will seek to recover all costs of defense in the event an action is filedin this matter and it is determined that the action was not brought in good faith and with reasonable cause. Very truly yours, DENNIS J. HERRERA City Attorney Michael D. Haase Assistant Chief of Claims Fox PLAZA ·1390 MARKET STREET,7THFLOOR· SAN FRANCISCO, CALIFORNIA 94102~5408 RECEPTION: (415) 554-3900 · FACSIMILE: (415) 554-8795 Claim of: Synergy Project Management, Inc. Claim Filed: January 5, 2017 I, Michael Haase, say: I am a citizen of the United States, over eighteen years of age, and not a party to the within action; that I am employed by the City Attorney's Office of San Francisco, Fox Plaza, 1390 Market Street, 7th Floor, San Francisco, CA 94102. That on January 10, 2017 I served: NOTICE OF ACTION UPON CLAIM by placing a true copy thereof in an envelope addressed to: Kris A. Cox, Esq. Moscone Emblidge & Otis LLP 220 Montgomery St.,Ste. 2100 San Francisco, CA 94104 Following ordinary business practices, I sealed true and correct copies of the above documents in addressed envelope(s) and placed them at my workplace for collection and mailing with the United States Postal Service. I am readily familiar with the practices of the San Francisco City Attorney's Office for collecting and processing mail. In the ordinary course of business, the sealed envelope(s) that I placed for collection would be deposited, postage prepaid, with the United States Postal Service that same day. I declare under penalty of perjury that the foregoing is true and correct. Executed on January 10, 2017 at San Francisco, California. Michael Haase DECLARATION OF SERVICE BY MAIL 1 2 3 4 5 6 7 8 9 EXHIBIT B 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 C ASE No. CGC-17-560034 Case 4:17-cv-06763-JST Document 77 Filed 05/26/19 Page 1 of 26 Case 4:17-cv-06763-JST Document 77 Filed 05/26/19 Page 2 of 26 Case 4:17-cv-06763-JST Document 77 Filed 05/26/19 Page 3 of 26 Case 4:17-cv-06763-JST Document 77 Filed 05/26/19 Page 4 of 26 Case 4:17-cv-06763-JST Document 77 Filed 05/26/19 Page 5 of 26 Case 4:17-cv-06763-JST Document 77 Filed 05/26/19 Page 6 of 26 Case 4:17-cv-06763-JST Document 77 Filed 05/26/19 Page 7 of 26 Case 4:17-cv-06763-JST Document 77 Filed 05/26/19 Page 8 of 26 Case 4:17-cv-06763-JST Document 77 Filed 05/26/19 Page 9 of 26 Case 4:17-cv-06763-JST Document 77 Filed 05/26/19 Page 10 of 26 Case 4:17-cv-06763-JST Document 77 Filed 05/26/19 Page 11 of 26 Case 4:17-cv-06763-JST Document 77 Filed 05/26/19 Page 12 of 26 Case 4:17-cv-06763-JST Document 77 Filed 05/26/19 Page 13 of 26 Case 4:17-cv-06763-JST Document 77 Filed 05/26/19 Page 14 of 26 Case 4:17-cv-06763-JST Document 77 Filed 05/26/19 Page 15 of 26 Case 4:17-cv-06763-JST Document 77 Filed 05/26/19 Page 16 of 26 Case 4:17-cv-06763-JST Document 77 Filed 05/26/19 Page 17 of 26 Case 4:17-cv-06763-JST Document 77 Filed 05/26/19 Page 18 of 26 Case 4:17-cv-06763-JST Document 77 Filed 05/26/19 Page 19 of 26 Case 4:17-cv-06763-JST Document 77 Filed 05/26/19 Page 20 of 26 Case 4:17-cv-06763-JST Document 77 Filed 05/26/19 Page 21 of 26 Case 4:17-cv-06763-JST Document 77 Filed 05/26/19 Page 22 of 26 Case 4:17-cv-06763-JST Document 77 Filed 05/26/19 Page 23 of 26 Case 4:17-cv-06763-JST Document 77 Filed 05/26/19 Page 24 of 26 Case 4:17-cv-06763-JST Document 77 Filed 05/26/19 Page 25 of 26 Case 4:17-cv-06763-JST Document 77 Filed 05/26/19 Page 26 of 26 1 2 3 4 5 6 7 8 9 EXHIBIT C 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 C ASE No. CGC-17-560034 1 JOHNNY D. KNADLER (SBN 220942) LAW OFFICE OF JOHNNY D. KNADLER 2 1527-E Pershing Drive ELECTRONICALLY San Francisco, CA 94129 3 Telephone: (310) 564-6695 F I L E D Facsimile: (888) 323-0611 Superior Court of California, County of San Francisco 4 Email: jdknadler@gmail.com 01/22/2021 5 Clerk of the Court BY: SANDRA SCHIRO Deputy Clerk 6 Attorneys for Plaintiff 7 SYNERGY PROJECT MANAGEMENT, INC. 8 9 SUPERIOR COURT OF THE STATE OF CALIFORNIA 10 IN AND FOR THE COUNTY OF SAN FRANCISCO 11 SYNERGY PROJECT MANAGEMENT, Case No. CGC-17-560034 INC., (Consolidated with Case No. CGC-19-576488) 12 Plaintiff, 13 NOTICE OF MOTION AND vs. MOTION FOR LEAVE TO FILE 14 FOURTH AMENDED CITY AND COUNTY OF SAN FRANCISCO, COMPLAINT; MEMORANDUM 15 LONDON BREED, MOHAMMED NURU, IN SUPPORT 16 Defendants. ______________________________________ 17 Date: February 17, 2021 GHILOTTI BROS., INC., a California Time: 9:30 a.m. 18 Corporation, Dept: 302 19 Plaintiff, Complaint filed: July 10, 2017 20 vs, 21 SYNERGY PROJECT MANAGEMENT, 22 INC., a California Corporation, and DOES 1-30, 23 Defendants. 24 ______________________________________ 25 SYNERGY PROJECT MANAGEMENT, a California Corporation, 26 Cross-Complainant, 27 vs. 28 NOTICE OF MOTION AND MOTION FOR 1 Case No. CGC-17-560034 LEAVE TO FILE FOURTH AMENDED COMPLAINT 1 GHILOTTI BROS, INC., a California Corporation, and ROES 1-20, 2 Cross-Defendants. 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 NOTICE OF MOTION AND MOTION FOR 2 Case No. CGC-17-560034 LEAVE TO FILE FOURTH AMENDED COMPLAINT 1 PLEASE TAKE NOTICE that on February 17, at 9:30 a.m., or as soon thereafter as the 2 matter can be heard, in Department 302 of the Superior Court, located at 400 McAllister Street, 3 San Francisco, California 94102, plaintiff, Synergy Project Management ("Synergy") will, and 4 hereby does, move for an order granting Synergy leave to file its Fourth Amended Complaint. 5 This motion is based on this Notice of Motion, the motion itself, the supporting 6 Memorandum of Points and Authorities, the proposed Fourth Amended Complaint and 7 Declaration of Johnny Knadler filed with the motion, the papers and pleadings on file and any 8 other such evidence as may be presented at the time of the hearing. This motion is made under 9 Code of Civil Procedure § 473 on the grounds that there is good cause to allow Synergy to 10 amend its complaint, that the motion is brought in good faith, and that it is in the interest of 11 justice that the court grant it. 12 The motion will be based on this Notice of Motion and Motion, the Memorandum of 13 Points and Authorities, Synergy’s Proposed Fourth Amended Complaint, the Declaration of 14 Johnny Knadler, and the [Proposed] Order filed herewith, on all of the files and records of this 15 action, and on any additional material that may be elicited at the hearing of this motion. 16 Dated: January 22, 2020 LAW OFFICE OF JOHNNY D. KNADLER 17 18 By: //SS// 19 JOHNNY D. KNADLER 20 Attorney for Plaintiff SYNERGY PROJECT 21 MANAGEMENT, INC. 22 23 24 25 26 27 28 NOTICE OF MOTION AND MOTION FOR 3 Case No. CGC-17-560034 LEAVE TO FILE FOURTH AMENDED COMPLAINT 1 MEMORANDUM OF POINTS AND AUTHORITIES 2 I. INTRODUCTION 3 In 2017 Synergy filed this action in San Francisco Superior Court, alleging federal due 4 process, and state claims against the City and County of San Francisco and city officials arising 5 out of Synergy’s termination from two successive public construction contracts. After the matter 6 was removed to federal court, Synergy added the general contractor for one of these contracts, 7 Ghilotti Bros, Inc. as a defendant. Following dismissal of the federal claims, this matter was 8 remanded to this Court. 9 Over the course of 2020, announcement of a series of federal criminal prosecutions 10 revealed that one of the originally-named defendants, San Francisco Department of Public 11 Works Director Mohammed Nuru and other high-level city officials, had engaged in a multi-year 12 scheme to deprive the public of honest services, by accepting bribes and kickbacks in exchange 13 for the exercise of these officials’ power and influence to award public contracts and other 14 benefits, to the detriment of other businesses, like Synergy, which did not pay bribes or 15 kickbacks to these official. These prosecutions, culminating with the November 30, 2020 arrest 16 of San Francisco Public Utilities Commission head Harlan Kelly, revealed that as a part of this 17 scheme, Nuru and Kelly terminated one of the Synergy contracts at issue in this case order to 18 compensate one of the companies paying them bribes, by assigning Synergy’s work to that 19 company. Further, the disclosures arising out of these investigations revealed that Synergy’s 20 removal from both of the contracts at issue stems from an entrenched system of abuse and 21 corruption by highly-placed officials colloquially known as the “City Family”. 22 Through this motion, Synergy seeks leave to amend its complaint to add and amend its 23 claims in light of the new disclosures.1 Specifically, Synergy seeks to amend its due process 24 claims to allege that Nuru and Kelly – and through them the City –terminated Synergy from the 25 contracts at issue, and effectively blacklisted Synergy from receiving City contracts, because 26 1 Synergy’s proposed Fourth Amended Complaint is to the Declaration of Johnny D. 27 Knadler (“Knadler Decl.”), as Exhibit 1. Exhibits to the Knadler Declaration are listed numerically (i.e. Exh.1, Exh.2), to avoid confusion with the exhibits to the Fourth Amended 28 Complaint, which are listed alphabetically (i.e. Exh.A, Exh.B) NOTICE OF MOTION AND MOTION FOR 4 Case No. CGC-17-560034 LEAVE TO FILE FOURTH AMENDED COMPLAINT 1 Synergy had not paid the requisite bribes or kickbacks. Synergy also seeks to add claims against 2 Nuru and Kelly for conspiracy to violate civil rights, civil racketeering, and fraudulent 3 concealment, based on the fraud scheme disclosed in the criminal charges against Nuru and 4 Kelly and related disclosures, and the facts showing that the harms for which Synergy seeks 5 relief here were in part caused in furtherance of that scheme. 6 Concurrent with these amendments, Synergy also seeks to add federal due process 7 claims, and claims for unjust enrichment against Ghilotti Bros., Inc., based on events occurring 8 after Ghilotti was named as a defendant, and discovery produced by Ghilotti in this litigation. 9 Synergy was unaware of the newly-disclosed facts relating to the fraud scheme between 10 Nuru, Kelly and other City officials, or the role the scheme played in causing the injuries for 11 which Synergy seeks relief in this action. Synergy’s motion is supported by good cause, is not 12 brought in bad faith, and will not prejudice defendants. Leave to amend should be granted. 13 II. STATEMENT OF FACTS AND PROCEDURAL HISTORY 14 On July 10, 2017 Synergy filed suit in this Court against the City and County of San 15 Francisco (“the City”), and related departments and City personnel (Synergy v. City and County 16 of San Francisco, et al, San Francisco Superior Court Case No. CGC-17-560034. The case arose 17 out of a general contract entered into between the City and Ghilotti Brothers Inc. (“Ghilotti”) to 18 replace the sewer line at Haight Street (the “Haight Street Project”). Ghilotti selected Synergy as 19 a subcontractor, and Synergy was listed on the bid to the City. In the lawsuit, Synergy alleged 20 that the City unlawfully terminated Synergy as a subcontractor on the Haight Street Project, in 21 violation of California Public Contract Code section 4107, and interfered with Synergy’s 22 contract with Ghilotti. Synergy also alleged that the City’s termination of Synergy from the 23 Haight Street Project, and a subsequent project located on San Francisco’s Van Ness Street, 24 violated Synergy’s constitutional rights of due process, stigma-plus due process and rights to be 25 protected against retaliation for the exercise of constitutional rights. 26 Defendants removed the case to federal court on November 24, 2017. 27 28 NOTICE OF MOTION AND MOTION FOR 5 Case No. CGC-17-560034 LEAVE TO FILE FOURTH AMENDED COMPLAINT 1 On February 19, 2019, Synergy moved unopposed for leave to file a third amended (“first 2 case TAC”) complaint adding Ghilotti as a defendant. On May 21, 2019, the Court granted 3 Synergy’s request for leave to file a third amended complaint, which Synergy filed on May 26, 4 2019. 5 On June 10, 2019 and June 26, 2019, City Defendants and GBI, respectfully, moved to 6 dismiss Synergy’s third amended complaint. 7 On June 26, the California Supreme Court denied Synergy’s petition for review of the 8 California Court of Appeal decision in Synergy Project Management, Inc. v. City and County of 9 San Francisco. See Synergy Project Management, Inc. v. City and County of San Francisco, No. 10 A151199, 33 Cal. App. 5th 21 (March 14, 2019), review denied June 26, 2019. In so doing, the 11 Supreme Court upheld the Court of Appeal’s finding that the City’s termination of Synergy was 12 authorized under section 4107. 13 On, Synergy moved for leave to file a fourth amended complaint, alleging Ghilotti’s 14 liability, as a state actor, for Synergy’s federal claims, based on the Supreme Court’s decision. 15 Synergy also moved to amend its claims against the government defendants, based on arguments 16 the government defendants raised for the first time in moving to dismiss the third amended 17 complaint. 18 On August 14, 2019, the district court denied Synergy’s motion to amend without 19 prejudice, pending ruling on the motion to dismiss. On November 21, 2019 the Court granted in 20 part the motions to dismiss, dismissing with prejudice Synergy’s federal claims against the 21 government defendants, and remanding Synergy’s state law claims to Superior Court, where the 22 action originally was filed. The district court never ruled on the merits of Synergy’s motion to 23 amend. 24 On December 19, 2019, Synergy appealed the district court’s order to the Ninth Circuit 25 Court of Appeal. Synergy Project Management, Inc. v. City and County of San Francisco, et al., 26 (9th Cir. Case No. 19-17558) (On appeal from U.S.D.C. Case No. 4:17-cv-06763 JST). 27 28 NOTICE OF MOTION AND MOTION FOR 6 Case No. CGC-17-560034 LEAVE TO FILE FOURTH AMENDED COMPLAINT 1 On August 12, 2020, the court consolidated this case with a latter-filed case, Ghilotti 2 Bros Inc. v. Synergy, Case No. CGC-19-576488. Ghilotti filed its answer to Synergy’s Third 3 Amended Complaint on November 4, 2020. The matters are currently set for jury trial on March 4 29, 2021. 5 In January 2020, Mohammed Nuru was charged with honest services wire fraud in a 6 federal criminal complaint. A copy of that complaint (the “Nuru Complaint”) is attached hereto 7 as Exhibit 2. The Nuru Complaint revealed an elaborate kickback scheme through which Nuru 8 and other officials accepted money and services from Azul Works principal, Balmore 9 Hernandez, in exchange for Nuru’s efforts to funnel contracts to Azul Works. In June 2020, 10 Walter Wong pled guilty, inter alia, to committing, as a part of the scheme, a RICO “predicate 11 act”, Conspiracy to Commit Honest Services Fraud in violation of 18 U.S.C. §§ 1343, 1346 and, 12 by conspiring with NURU and other public officials. On September 24, 2020, the City 13 Attorney’s Public Integrity unit issued a Public Integrity Preliminary Assessment titled, “Gifts to 14 Departments Through Non-City Organizations Lack Transparency and Create “Pay-to-Play” 15 Risk”. On or about September 17, 2020, AzulWorks’ owner, Balmore Hernandez, pled guilty to 16 one count of Conspiracy to Commit Honest Services Wire Fraud in violation of 18 U.S.C. 17 §§1343, 1346 and 1349. On or about November 30, 2020, Harlan Kelly was arrested by the FBI 18 on charges arising out of the FBI’s investigation of the Nuru kickback scheme. An affidavit filed 19 by the United States Attorney’s Office with the complaint against Kelly alleges that Kelly, 20 together with Nuru, engaged in a kickback scheme from 2014-2019, in which Kelly accepted 21 bribes in exchange for Kelly’s assistance in awarding City contracts to businesses that paid the 22 bribes. A copy of the that complaint and affidavit is attached hereto as Exhibit 2. (“Kelly 23 Complaint). 24 The Nuru Complaint and Kelly Complaints, together with documents arising out of these 25 prosecutions (including City Attorney investigation reports) explain how Nuru leveraged his 26 position as director of DPW to influence not only DPW, but other city agencies and officials. 27 28 NOTICE OF MOTION AND MOTION FOR 7 Case No. CGC-17-560034 LEAVE TO FILE FOURTH AMENDED COMPLAINT 1 Synergy’s counsel reviewed the Kelly Complaint during at some time after it was 2 published publicly on November 30, 2020. Based on that complaint, together with the other 3 documents revealed by the United States Attorney’s Office investigation arising out of 4 Mohammed Nuru’s arrest, Synergy’s counsel determined that Synergy could state causes of 5 action against Nuru and Kelly for racketeering, conspiracy and fraudulent concealment, and that 6 the disclosures also disclosed facts relevant to Synergy’s originally-pled claims. 7 Synergy’s counsel contacted counsel for Defendant GBI regarding Synergy’s desire to 8 amend its complaint. GBI declined to stipulate to the motion. 9 II. ARGUMENT A. Relevant Law 10 “The court may, in furtherance of justice, and on any terms as may be proper, 11 allow a party to amend and pleading[.]” Cal. Civ. Proc. Code § 473(a)(l); see also Cal. Civ. 12 Proc. Code § 576 (“Any judge, at any time before or after commencement of trial, in the 13 furtherance of justice, and upon such terms as may be proper, may allow the amendment of 14 any pleading.”). “There is a strong policy in favor of liberal allowance of amendments.” 15 Mesler v. Bragg Mgmt. Co., 39 Cal. 3d 290, 296 (1985). If the granting of a timely motion for 16 leave to amend “will not prejudice the opposing party, it is error to refuse permission to 17 amend, and where the refusal also results in a party being deprived of the right to assert a 18 meritorious cause of action[;j it is not only error but an abuse of discretion.” Morgan v. Super. 19 Ct., (1959)172 Cal. App. 2d 527, 530 . Leave to amend may be denied for unreasonable delay 20 after plaintiff ascertains a “Doe” defendant's identity resulting in prejudice to the defendant. 21 A.N. v. County of Los Angeles (2009) 171 CA4th 1058, 1068. 22 B. Leave to Amend Should Be Granted 23 In the present case, Synergy seeks to amend the Third Amended Complaint as 24 follows: (1) substitute the name of Harlan Kelly for Doe Defendant No. 1; (2) add and amend 25 due process causes of action against Kelly and originally-named Defendants Breed, Nuru and 26 the City and County of San Francisco; add RICO claims against Kelly and Nuru; and (4) add 27 claims against defendant Ghilotti Bros., Inc. 28 NOTICE OF MOTION AND MOTION FOR 8 Case No. CGC-17-560034 LEAVE TO FILE FOURTH AMENDED COMPLAINT 1 Ordinarily a judge will not consider the validity of a proposed amended pleading 2 in deciding whether to grant leave to amend, however, in this case the need and validity of the 3 proposed amendments only serve to support the granting of this motion. See Atkinson v. Elk 4 Corp. (2003) 109 Cal.App.4th at 739, 760; Kittredge Sports Co. v. Superior Ct. (1989) 213 5 Cal.App.3d 1045, 1048. 6 1. Synergy’s claims and allegations based on Nuru and Kelly’s arrest, and 7 disclosure of the City Family pay-to play fraud scheme. 8 Synergy seeks to amend its complaint to reflect the new facts learned Nuru and 9 Kelly’s arrest, following revelation of their “City Family” pay-to-play bribery/kickback 10 scheme and its connection to Synergy’s claims in this case. These revelations relate to 11 Synergy’s originally-pled claims, and support additional related claims and defendants. 12 In Nuru’s case, the disclosures establish that Nuru and Kelly caused Synergy’s 13 injuries in this case through actions they took in furtherance of the “City Family” pay-to-play 14 bribery/kickback scheme to enrich themselves and protect the political ambitions of London 15 Breed, another member of the City Family. Although Nuru’s involvement in Synergy’s 16 termination from the DPW-run Haight Street Project is alleged in the Third Amended 17 Complaint, the new disclosures revealed how Nuru exerted influence beyond DPW 18 construction projects to other departments’ projects, including SFPUC contracts, and the Van 19 Ness Project specifically. These disclosures reveal, inter alia, how Nuru accepted bribes from 20 his “Family friend” contractor, AzulWorks, in exchange for helping Azul Works unjustifiably 21 win, and grossly overcharge the City for, work previously assigned to Synergy on the Van 22 Ness Project. These disclosures also reveal that Kelly and Nuru knew of, and agreed to, each 23 other’s acts in furtherance of the scheme to defraud. 24 The facts establishing Synergy’s proposed Fourth Amendment claims against 25 Nuru, including Synergy’s claims for conspiracy to violate civil rights, racketeering, and 26 fraudulent concealment were not known until disclosure of the pay-to-pay scheme, through 27 his and Kelly’s arrest, the subsequent charging of Azul Work’s principle, Balmore Hernandez, 28 NOTICE OF MOTION AND MOTION FOR 9 Case No. CGC-17-560034 LEAVE TO FILE FOURTH AMENDED COMPLAINT 1 the disclosures contained in the City Attorney’s post-Nuru/DBI scandal reports and other 2 materials. These disclosures also revealed facts establishing the predicate acts establishing 3 Kelly for racketeering, pursuant to the 1970 RICO Act, 18 U.S. Code § 1961 et seq., and 4 conspiracy to violated civil rights pursuant to 18 U.S.C. § 1983 (including Kelly and Nuru’s 5 agreement to conduct the scheme, and use of interstate commerce). 6 Prior to issuance of the Kelly Complaint, filed December 1, 2020, Synergy was 7 ignorant of (1) Kelly’s participation in the association-in-fact and scheme to defraud, (2) his 8 liability for use of interstate commerce in furtherance of the association-in-fact and scheme to 9 defraud and (3) his knowledge of, and agreement with, Nuru’s acts in furtherance of said 10 association and scheme. These are facts Synergy learned after December 1, 2020, and 11 (together with related disclosures made in 2020) provide the basis for Synergy to substitute 12 Kelly as a Doe Defendant for Synergy’s due process claims (based on disclosure of , and to 13 plead, with sufficient particularity, claims against Kelly (and Nuru) for racketeering, and 14 against Kelly, Nuru and the City for conspiracy to violate civil rights pursuant to 18 U.S.C. 15 §1983. See Prakashpalan v. Engstrom, Lipscomb & Lack, 223 Cal. App. 4th 1105, 1136, 16 (2014), (where fraud is alleged to be the object of the conspiracy, the claim must be pleaded 17 with particularity) (citing Favila v. Katten Muchin Rosenman LLP (2010) 188 Cal.App.4th 18 189, 211); People v. Fratianno, 132 Cal. App. 2d 610, 625 (1955) (“conspiracies are almost 19 always proven by circumstantial and ‘piecemeal’ evidence”); Sedima, S.P.R.L. v. Imrex Co., 20 Inc., (1985) 473 U.S. 479, 496 (stating pleading requirements for violations of RICO under18 21 U.S.C. §§ (c) and (d); River City Markets v. Fleming Foods West (9th Cir. 1992), 960 F.2d 22 1458, 1463 (“[RICO] conspiracies rarely are memorialized in writing and often must be 23 proven by circumstantial evidence”). 24 Good cause exists to allow amendment to add the RICO, conspiracy, and 25 fraudulent concealment claims exists, because they involve the same primary rights 26 implicated in Synergy’s Third Amended Complai