Miscellaneous: WAYNE DERMAN VS. M.KARKORI CONSTRUCTION, INC., A PURPORATED et al

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                                OCNNO

SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN FRANCISCO

Document Scanning Lead Sheet
Aug-28-2008 4:02 pm

Case Number: CGC-08-479247
Filing Date: Aug-28-2008 4:00

Juke Box: 001 Image: 02235099
COMPLAINT

WAYNE DERMAN VS. M.KARKORI CONSTRUCTION, INC., A PURPORATED et al

001002235099

Instructions:
Please place this sheet on top of the document to be scanned.-~

— - — CS. ae . eee i Sr ~~ ee - _—
s0.MONS a SUM-100
. (CITACION JUDICIAL} © . FOR COURT. ‘
NOTICE TO DEFENDANT:

(Aviso AL DEMANDADO): - .
, KARKORI CONSTRUCTION, INC., a purported California
corporation; MOSTAFA KARKORI, an individual

YOU ARE BEING SUED BY PLAINTIFF:
(LO EST. DEMANDANDO EL DEMANDANTE):
WAYNE DERMAN, an individual

3 summons and legal papers are served on you to file a writien response at this court and havea
copy served on the plaintiff, AS afr ere wl not protect you. Your writen response must be In proper legal frm tf You want the
court to hear your case. There may be # court form that you can use for your response. You can find these court forms and more:
Information at the California Courts Online Self-Help Center {www.courtinto.ca.goviselfhelp), your county taw library, or the courthouse
nearest you. it you cannot pay the fling fee, ask the court clerk for a fee walver form, tfyou do not file your response on time, you may
re ea ahs ona your wages, money. and property may be taken without further waewing fram ts Set

your Wages, money, art caltan adomey right sway. if you do nat know an attorney, you may want teal 27
services

. sta. Puede encontrar estos:
California (www courtinfe.ca.gov/selthelp/espanol), en Ia bibfoteca de leyes de su condado o en Ia corte que fe quede més cerca. Sino
eer orosetretn, pda secret dela cor que i wt formato Ge exercién Se Pope Te So Sino presenta
su respuesta 2 fempo, puede perder ef caso por Incumplimiento y (a corte le podrd quitar su sueldo, dinero y bienes sin mds advertenciz.
Hay otros requisites legates. Es recomendable que Hame a un abogade Inmediatamente. Sino conoce a un shogado, puede amar aun
servicio de remisién a abogados, Sino puede pagaraun abogado, es posible que ‘cumpla con fos requisites para obtener servicios
legates gratuites de un programa de servicios legates sin fines de luero. Puede encontrar estos grupos sin fines de fucro en ef sitlo web de
California Legal Services, (www.lawhelpcaiifornia.org), ‘ene! Centro de A les de California, .
.courtinfa.ea.gov/selfheip/espanc po tacto olegio de abogados locales.

‘The name and address of the court fs:
(El nombre direccién de la corte es): -
SAN FRANICTSCO SUPERIOR COURT
400 MCALLISTER STREET

SAN FRANCISCO, CA 94102-

The name, address, and tetephoné number of plaintiffs attomey, or plaintiff without an attomey, fs: .

(El nombre, la direccion y ef nimero de feléfono del abogado del demandante, o del demandante-qué no tiene abogado, es):
JEFFREY A. SYKES {SBN 78366) . (415) 954-4400 (415) 954-4480
FRANK J. RIEBLI {SBN 221152)

FARELLA BRAUN + MARTEL

235 ROSES jggSTREET. SAN FRANCISCO ' BORA PARICLL q + 4 4g Qq as 4 Po
(Fecha) trio) 2
‘of service of ts summons, use Proo! jervice mons (f POS-010).)
entrega de esta citation use ef formulario Proof of Service of Summons, (POS-010)).
‘WOTICE TO THE PERSON SERVED: You are served .
. _] as an Individual defendant. .
2. [_] as the person sued under the fictitious name of (specify):

3. () on behalf of (specify): .
under: —_] CCP 416.10 (corporation) [7] CCP 416.60 (minor)
f CCP 416.20 (defunet corporation) C3 CCP 416.70 (conservatee)
i CCP 416.40 {association or partnership} L_! CCP 416.90 (authorized person)
5] other (specify): . :
40 rsonal delivery on (date): . Page tof

| Cage of Col Procedure §§ 412.20, 465
SUMMONS :)

“ATTORNEY (terme,
JEFFREY A. S¥KES (SBN 78366)
FRANK J. RIEBLI (SBN 221152)
FARELLA BRAUN + MARTEL
235 MONTGOMERY STREET
SAN FRANCISCO, CA 94104
yeeproweno: (415)954-4400

2 »_Plai ff Wa

ne De an
SUPERIOR COURT OF CALIFORNIA, COUNTY OF SAN FRANCISCO
sveccranoress: 400 McAllister St. #103 By.
MAR.KG ADORESS:
erry ano zie cove: San Francisco, CA 94102
CASE NAME: HAYNE DERMAN V. M. KARKORI CONSTRUCTION,

raxvo: (415) 954-4480 (AUG 218 2808 2 p zane

_ CIVIL CASE COVER SHEET Complex Case Designation
Xa Unttmited Lo Urited [CJ Counter, (2) Joinder
(Amoun Filed with first appearance by defendant
gems gemanced ib {Cal ules of Court, wuts 2.402)
6 betow must be completed. (see instructions on page 2).
1, Check one box below for the case type that best describes this case:
Contract Provistonalty Complex Civil Litigation
Auta (22) (0G) Breach of contractwarranty {06) (Cal. Rutes of Court, rutes. 3.400-3.403)
- Urine motorist (48) [_] Rule 3.740 eottections (09) bo Antitrust/Trada regulation (03)
Other PUPDIWD {Personal InjuryfProperty — [_] Other collections (09) Construction defect (10)
DamagerWrongfut Death) Tor Pnnoscoveroe (18) (2) Mass tort 40)
Asbestos (04) Other contract (37) (_| Securities litigation (28)
Product lability (24) Real Property : (J Environmentat/Toxic tort (30)
“= Medical malpractice (45) (1 Eminent domaininverse (TI insurance coverage etzims arising from the
i _ Other PUPDAWD (23) ‘condemnation (14) . above listed provisionally complex case
Non-PYPDAND (Other) Tort [2 Wrongful eviction (33) types (41)
Business toc/unfair business practics (07) (1) otner reat property (26) Enforcement of Judgment
Civil fights (08) Untawful Detainer . (1 Enforcement of Judgment (20) .
Defamation (13) (1 Commerciat (31) Miscelteneous Civil Comptaint
Fraud (16) [J Residential (32) _T_lrico ery
Intellectual property (19) (Jonugs (38) (J other complaint (not specified above) (42)
| Professional negtigence (25) * Judicial Review Misceflaneous Civil Petition
i” Other non-PYPDAND tort (38) [Asset forfeiture (05) (__] Partnership and corporate governance (21)
Employment [1 Petition re: arbitration award (11) ] other petition (not specified above) (43)
wi (_] wait of mandate (02)
TJ other jucictal review (39) .
2. Thiscase | tis LXJtsnot complex under rule 3.400 of the Califomia Rules of Court. If the case is complex, mark the

factors requiring exceptional Judicial management:
Large number of separately represented parties d. [__] Large number of witnesses
Extensive motion practice raising difficult or novel @. {—] Coordination with related actions pending in one ormore courts

Issues that will be fime-consuming to resolve In other counties, states, or countries, or In a federal court
c. «7: Substantial amount of documentary evidence f. (] Substantial postiudgment Judicial supervision
3. Remedies sought (check ail that apply): a- [X] monetary 6. [X_] nonmonetary: dectaratory of injunctive relief c. [Xj punitive
4, Number of causes of action (specify): $ (Breach of Contract, Fraud, Negligence, Slander, Decl. Relief)
5. Thiscase 2 Is (XJ isnot classaction suit,
6. If there are any known related cases, file and serve a notice of related case. (You may use form CM-015,)
Date: August 28, 2008 >

“TvPE OR PRINT NAME} uF eTY OR ATTORNEY FOR PARTY)

NOTICE

Plaintiff must fite this cover sheet with the first paper filed in the action of proceeding (except small claims cases of cases filed
under the Probate Code, Family Code, or Welfare and Institutions Code). (Cal. Rutes of Court, rule 3.220.) Failure to file may result
in sanctions.

File this cover sheet in addition to any cover sheet required by toca? court cule. i

« If this case is complex under rule 3.400 et seq. of the Califomia Rules of Court, you must serve 3 copy of this’ cover sheet on all
other parties to the action or proceeding. : . wert

© Unless this Is a collections case under Tule 3.740 of a complex case, this cover sheet will ba used for statistical purposes only. a

Fomicopes te roony , CIVIL CASE COVER SHEET sds Ges ies ol Ga nb 2903770 oe 31 | Jeffrey A. Sykes (State Bar No. 78366)
es(a’

isykes@fbm.com
2 | Frank J. Riebii (State Bar No. 221152) RF
friebli@fom.com
3 Farelta Braun + Marte] cP \
2: lontgomery S treet 17th Fi 0% 5 .
4 | San Francisco, CA ‘MAN; emettt angst > Mey
Telephone: (415) 954-4400 AG 88 ve
5 | Facsimile: (415) 954-4480 AUG 2 8 2008 ork
a, 4
6 | Attomeys for Plaintiff JAN 3 u Hh en
WAYNE DERMAN on
7]. DEPARTMENT 212
8 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
9 : .
IN AND FOR THE COUNTY, OF SAN FRANSES ISSUED
10
11 | WAYNE DERMAN, an individual, Case No.
“12 Plaintiff, comme Sr fohe 4792 4 7
(1) BREACH OF CONTRACT:
13 vs. (2) FRAUD;
(3) NEGLIGENCE AND NEGLIGENCE
14 | M. KARKORI CONSTRUCTION, INC., a - PERSE
purported California corporation; (4) SLANDER OF TITLE
15 | MOSTAFA KARKORI, an individual, (5) DECLARATORY RELIEF
16 Defendants. * : and
DEMAND FOR JURY TRIAL
19 . Plaintiff WAYNE DERMAN (Mr. Derman”) complains as follows:
20 . INTRODUCTION
21 1 Wayne Derman hired MOSTAFA KARKORI and his company, M. KARKORI

22 | CONSTRUCTION, INC., to construct a home on Mr. Derman’s property on Surrey Street in San
23 | Francisco, From the beginning, there were problems. First, Karkori demanded additional
24 | ‘payments to subcontract initial excavation work he previously represented that he could do. The

25 | problems increased as Karkori fell further and further behind schedule and ran over budget. Only

“96 | then did Mr. Derman discover that Karkori had made numerous, serious mistakes in the

27 | construction of the home — mistakes that threatened the home’s safety and structural integrity —
28 | and had attempted to hide them by, for example, closing up walls so that inspectors could not see

23035\1704051.2

COMPLAINT24
25 VENUE AND. JURISDICTION
26 6. The Defendants, and each of them, are subject to the jurisdiction of the courts of
27 | the State of California by virtue of their residence, their general business dealings and
28 | transactions in this State, the specific acts and omissions alleged in this case, by which they
rate +2- : 230357040512
‘aren

his dangerously shoddy work and failure to include necessary structural elements. In the end, it
became apparent to Mr. Derman that Karkori had made no effort to construct the home described
in the detailed architectural plans which Karkori professed to be following. Mr. Derman was
forced to default-terminate Karkori. Then, to add insult to injury, Karkori recorded a lien on Mr.
Derman’s property for work Karkori never did. Mr. Derman seeks disgorgement of all sums he
paid to Karkori, expungement of the lien, as well as other compensatory and punitive damages.
PARTIES
2 Plaintiff Wayne Derman is an individual. He resides at 2775 Diamond Street, in

San Francisco, California, He also owns the adjacent real property at 51 Surrey Street, San

10 | Francisco, California 94121 (the “Property”). The Property's legal description is as follows:
11 | Block 6741, Lot 31 (APN # 6741-031). ,
12 3. Defendant Mostafa Karkori is an individual. Mr. Karkori resides at 2780 Diamond

Street in San Francisco, California. He is the owner, president, Chief Executive Officer and
Responsible Managing Officer (*RMO”) of defendant M. Karkori Construction, Inc (“MKC”).
4 Defendant M. Karkori Construction, Inc. is a purported California corporation with

-its principal place of business at 2780 Diamond Street in San Francisco, Catifornia. MKC is a

17 ] general contractor engaged in the business of constructing residential homes. MKC’s California
18 | contractor's license number is 662832. Mr. Derman engaged MKC to build a home on the

19 | Property. , . ,

20 5. On information and belief, MKC is Mr. Karkori’s alter ego. Also on information

and belief, MKC was not adequately capitalized and Mr. Karkori, as its owner and principal, did |
not maintain its corporate form. Further, Mr. Karkori used money paid to MKC for MKC’s
construction activities instead for personal purposes such as purchasing vehicles and paying down

the mortgage on his home.

COMPLAINTcaused injuries in California, and because the purported corporation is organized under the laws ‘

of this State and has its principal place of business in this State.
7. Venue is proper in this Court because the Defendants are all located in San
Francisco, California, and the injury-producing conduct took place in San Francisco, California.

GENERAL ALLEGATIONS —

8. On September 13, 2006, MKC/Karkori and Mr, Derman executed a contract (the
“Construction Contract”) for the construction of a home on the Jot at 51 Surrey Street. According

to the contract, MKC/Karkori was supposed to construct a new home for Mr. Derman “according

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to architectural plans” Mr. Derman provided MKCiKarkori. MKC/Karkori acknowledged, in

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writing, that he “recei[ved] and have reviewed the plans and specs,” and “that these will be the

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plans and specs utilized” to build Mr. Derman’s home. The contract called for MKC/Karkori to

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substantially complete construction within 30 working days of commencement, subject to

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weather conditions, though the parties subsequently agreed to that it should be completed by
December 25, 2007 (about eight months after construction began).
9 Mr. Derman agreed to pay MKC/Karkori $627,150 for the labor and all of the

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materials needed to complete construction. That price was substantially higher than the amount

MKCKaskori originally bid: $565,000. After comparing MKC/Karkori’s bid to competing bids,

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Mr, Derman pointed out to MKC/Karkori that the bid was'deficient in numerous ways and did not

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contain enough money to perform all of the required work. MKC/Karkori therefore increased its

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bid and the parties eventually agrced to the contract price of $627,150. After construction began,
MK C/Karkori informed Mr. Derman that it had failed to include still more items in the bid, and

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thus requested an additional $40,000. Mr. Derman agreed to absorb a portion of the additional

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amount, |

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10. - Though construction was supposed to be substantially complete by December 25,

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2007, it was not. As of January 31, 2008, the project was less than 50% complete. On April 22,
2008, after months of trying unsuccessfully to get MKC/Karkori to correct deficient work,
provide an accounting of the money ithad spent on the project and provide a timetable for

completion, Mr. Derman default-terminated MKC/Karkori.
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COMPLAINT

2303511 704051.2.
1 11. Inaddition to failing to construct the house within the agreed time, MKC/Karkori

failed miserably to complete the work called for in the architectural plans, MKC/Karkori made
numerous mistakes, some of which threatened the home’s structural integrity, fire safety and
functionality and others which ruined the home’s aesthetic feel. MKC/Karkori’s mistakes

indicate that MKC/Karkori either was not qualified to undertake the work from the beginning or

a. Was unable to perform the excavation and underpinning work, despite

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4

5

6 | never intended to follow the architectural ptans. Specifically, MKC/Karkori:

7

8 representing to Mr. Derman that it would be self-performed, resulting in the need to
9

engage an excavation subcontractor at additional cost to Mr. Derman,

10 b. Improperly laid out the building without input from Mr. Derman’s

1 architect, resulting in it being out-of-square and built in part on an adjoining lot;

12 : c. Poured the foundation cement before Mr. Derman’s architect could
13 confirm whether MKC/Karkori had used and properly placed reinforcing steel;

14 d. Left the project idle for three weeks while Mr. Karkori was out of the
15 country; .

16 e. Improperly installed the foundation such that portions of it crumbled and a
7 portion of it was made to appear to be part of the foundation but had no structural value
18. and could not function as a part of the foundation;

9 . f. Failed to attach the basement walls to the foundation;

20) & Omitted major structural elements from the home’s framing, such as

21 . beams, shear walls, hold-downs, straps, clips, brackets and lag bolts; ‘

22 h. _ - Repeatedly constructed improperly portions of the framing, such as headers
23 and staircases, despite repeated on-site direction from Mr. Derman’s architect;

24 i. Failed to coordinate the major trades, which resulted in, among other

things, plumbing being installed outside of walls;
j. Installed structural elements out of sequence and improperly, resulting in
dimensional conflicts and substantial rework;

k. Improperly framed the home such that virtually every interior and exterior

Fats oe 8 Med LP . -4-

23035\1704051.2

ts maaan COMPLAINTwall is out of plumb, some more than 1 inch in 10 feet;

1 Improperly framed the interior door openings such that virtually: every door
opening is undersized;

m. Substituted interior door manufacturers without either Mr. Derman’s or his
architect” s consent; :

n. Failed to make the home water tight, resulting j jn serious water intrusion;

0. Faited to meet Building and Fire Code requirements.
12. MKC/Karkori either directly performed the work and made the errors listed above
in paragraph 11, or knew about, approved and failed to correct them. These errors were obvious
and apparent, As the general contractor, it was MKC/Karkori’s non-delegable duty to ensure that
each element of the home was constructed properly, with good workmanlike quality, and
according to the architectural plans. MKC/Karkori failed completely to discharge this obligation.

13. To the contrary, MKC/Karkori deliberately attempted to build over or cover up
these mistakes to prevent Mr. Derman or his architect from discovering them. Thus, despite
specific instructions from Mr. Derman’s attomiey to the contrary, MKC/Karkori installed drywall
over the structural deficiencies — such as the absence of shear walls, hold-downs, straps, clips,
brackets and lag bolts called for in the plans — even though Mr, Derman and/or his architect had
directed him not to do so until the structural elements were inspected and approved by the

engineer. And MKC/Karkori attempted to hide its failure to install a foundation under part of the

house by building a hollow, wood box frame and coating it with a thin layer of cement to make it
look like the rest of the foundation. The finished product lacked any structural strength at all, and
after the wood box frame rotted, was nothing more than a cement eggshell. Considering
MKC/Karkori’s deliberate efforts to cover up its mistakes, Mr. Derman may not yet know the full
extent of MKC/Karkori’s misdeeds.

14. _, Not only did MKC/Karkori fail to complete construction in the time set out in the
contract, and not only did MKC/Karkori deliberately attempt to hide its numerous mistakes,
MKC/Karkori has siphoned money out of the account set up for the construction of Mr. Derman’s

house and used that money to fund other projects and for personal purposes. On information and
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COMPLAINT

2303500704051.belief, MKC/Karkori used some of Mr. Derman’s money to purchase a truck, satisfy a tax
liability, fund one or more of four other projects MKC/Karkori was managing at the same time, .
and to pay down the mortgage on Mr, Karkori’s own home.

15. Oninformation and belief, MKC/Karkori stopped all or substantially a all work on
the home as of February 1, 2008. MKCMKarkori released any and all mechanic’s liens, stop
notices or bond rights for work done through January 30, 2008. MKC/Karkori’s attorney
confirmed that MKC/Karkori had not done any work since prior to March, 2008. Nonetheless, on
May 2, 2008, MK C/Karkori filed a mechanic's lien (the “Lien”) in the amount of $104,000 on
Mr. Derman’s property for work done through March 1, 2008. On information and belief,
MKC/Karkori recorded the Lien with full knowledge that it was overstated.

16. | MKCfKarkori’s abysmally deficient construction efforts are the consequence of
Mr. Karkori’s failure to exercise the direct supervision required of him as MKC’s Responsible
Managing Officer (“RMO”). MKC had no other RMO. ‘Thus, MKC operated as an unlicensed
contractor while it was constructing Mr. Derman’s home.

17. Asaresult of MKC/Karkori’s misconduct, Mr. Derman has and will incur direct
and consequential damages. Mr. Derman has paid MKC/Karkori $424,736 out of the $627,150
contract amount. In addition, Mr. Derman has paid $143, 887 for services and materials that
MKC/Karkori should have paid for but did not. Mr. Derman seeks disgorgement of the combined
amount, $568,623, because Mr. Karkori’s failure to supervise the construction meant that MKC
was operating without an RMO, thereby invalidating its license. In addition, Mr. Derman has
paid and expects to pay a total of $388,000 to correct MKC/Kaskori’s mistakes and complete
construction of the home. Mr. Derman has: suffered additional and further damages of
approximately $ $301,000 for (among other things) lost rent on the completed home, lost value due
to defects and decreased square footage to fix the defects (such as walling in the exposed
plumbing, which resulted in smaller rooms than those called for in the architectural plans), and
additional services from contractors, architects and engineers to assess and repair MKC/Karkori’s

mistakes.

pi heey nee On et -6- 2303501704051.2

COMPLAINTFda ree Mare LLP

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Derman prays for Judgment and relief as set forth below.

FIRST CAUSE OF ACTION
Breach of Contract
(Against MKC and Karkori)

18. Mr. Derman hereby incorporates paragraphs 1 through -17 as if set forth in full.

19. Mr. Derman had a contract with MKCiKarkori.

_ 20. Mr. Derman performed all of his obligations under that contract as and when they
became due. ,

21, MKC/Karkori failed to perform its obligations under the contract by failing to
construct Mr. Derman’s home according to the architect’s plans, by covering up or hiding its
deficient work, by using project funds for other, unrelated purposes and by failing to give Mr.
Derman an accounting of expenditures on the project.

22. MKCiKarkori’s breach was material.

23, Mr, Derman has been injured by MKCiKarkori's breach. WHEREFORE, Mr.

SECOND CAUSE OF ACTION
Fraud and Deceit (Civil Code § 1709)
(Against MKC and Karkorf)

24. Mr. Derman hereby incorporates paragraphs 4 through 17 as if set forth in full.

25, | Mr. Derman provided MKC/iKarkori a copy of the architectural plans before
MKC/Karkori bid the project. The architectural plans were detailed and adequate to enable
MKC/Karkori to determine the amounts and types of materials and labor required to complete the
home called for in the plans. :

26. MKC/Karkori bid the project, but the bid failed to include many necessary
elements. Mr. Derman pointed these elements out to MKC/Karkori, and MKC/Karkori increased
its bid to account for the omissions. After construction began, Mr. Derman discovered numerous
instances in which MKC/Karkori failed to construct the home as called for in the architectural
plans. This resulted in numerous deficiencies and necessary repairs, and in MKC/Karkori having
to build and re-build the same components several times.

27, ~ MKC/Karkori’s conduct indicates that it never intended to construct the home
according to the architectural plans. MKC/Karkori falsely represented to Mr. Derman that it

T- 23035M704051.2.

COMPLAINTwould, and thereby fraudulently induced Mr, Derman to enter into a construction agreement with
MKCMKarkori. Had Mr. Derman known that MKC/Karkori had no intention of building the home
called for in the plans, Mr. Derman would not have engaged MKC/Karkori to undertake that
work.

28.  Inaddition, MKC/Karkori falsely represented when it submitted its bid and at the
time the parties executed the contract that it was capable of performing the excavation and
underpinning work necessary to lay the foundation and stabilize the adjacent property. In fact,
MKC/Karkori did not even have the proper license to allow him to perform that work. Nor was
MKCiKarkori capable of performing that work and knew it was not capable of performing it
when it submitted the bid and executed the contract.

29: | MKC/Karkori also falsely represented to Mr, Derman at the time the parties
executed the contract that MKC/Karkori would use the funds Mr. Derman paid for the
: construction of Mr. Derman’s home. In fact, MKC/Karkori never intended to apply those funds
solely to construction of Mr. Derman’s home, but instead intended to and did use the money ‘o
fund other projects, to satisfy government tax liabilities, to purchase vehicles and to pay down the
‘mortgage on Mr. Karkori’s home. ‘

30. | MKC/Karkori also falsely represented to Mr. Derman at the time MKC/Karkori
requested each progress payment that MKC/Karkori had performed the work for which it sought
payment and that the work was completed to workmanlike quality. In fact, in each instance,
MKC/Karkori had failed either to complete the work or to complete it competently. :
MKC/Karkori knew when it sought each progress payment that it had not completed the work for
which it sought payment. Indeed, MKC/Karkori attempted to cover up these mistakes and

omissions to prevent Mr. Derman from discovering them and to ensure that Mr. Derman made

24 | each requested progress payment.
25 31. - Asaresult of MKC/Karkori’s fraud, Mr. Derman has incurred significant
26 | additional costs to: hire additional subcontractors to excavate and underpin the property; repair
27 | the defects in MKC/Karkori’s work, including MKC/Karkori’s many departures from the
28 | architectural plans; service the additional debt on his construction loans, which accrued during
eda ean Abend LF -8-
219 sey tr Pt 23035\1708051.2
So teeaua Ch Mi
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COMPLAINTdelays due to MK(C/Karkori misrepresentations related to its ability to perform the excavation and
underpinning and to its representation that it would construct the home according to the
architectural plans and in the time provided for in the contract. In addition, Mr. Derman had to
hire a consultant to monitor MKC/Karkori and ensure MKC/Karkori followed the architectural
plans, and ultimately had to hire another general contractor to take over the project.
WHEREFORE, Mr. Derman prays for Judgment and relief as set forth below.
THIRD CAUSE OF ACTION

Negligence and Negligence Per Se
(Against MKC and Karkorl)

32, | Mr. Derman hereby incorporates paragraphs 1 through 17 as if set forth in full.

33, MKC/Karkori owed Mr. Derman a duty to exercise due care in the construction of
his home, to supervise the subcontractors it engaged, and to ensure that the work it and its
subcontractors performed was competent.

34. MKC/Karkori breached that duty by failing to construct Mr. Derman's home
according to the architectural plans Mr. Derman provided and which MKC/Karkori agreed to
follow, by failing to perform competent construction services and ensure that MKC/Karkori’s
subcontractors performed competent construction services, and by failing to construct a safe and
structurally sound dwelling. / ,

35, | MKC/Karkori’s conduct was also negligent per se. MKC/Karkori violated
numerous laws, all of which were enacted to protect persons like Mr. Derman from the types of
injuries Mr. Derman has suffered. Specifically, MKC/Karkori violated the following laws:

a California Business and Professions Code Section 7108, which prohibits
diversion of funds received for prosecution or completion of a specific construction
project, or failure substantially to account for the application or use of such funds on the
construction project; , .

b. Catifornia Business and Professions Code Section 7109(a), which prohibits
willful departure in a material respect from accepted trade standards for good and
workmanlike construction on the Project;

c. California Business and Professions Code Section 7T109(b), which

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eee ee ete ses
Se 3RBReY ND

prohibits willful departure from and disregard for the contract and the architectural plans
in material respects;

d. California Business and Professions Code Section 7110, which prohibits
willful and deliberate disregard for and violation of applicable building laws, including
those of the State of California and the City and County of San Francisco; ,

e California Business and Professions Code Section 71 16, which prohibits
willful acts that cause substantial injury to the owner,

f. California Business and Professions Code Section 7119, which prohibits
willfully failure and refusal without Jegal excuse to prosecute the project with reasonable
diligence;

g California Business and Professions Code section 7031, which prohibits a
contractor from operating under its license without a Responsible Managing Officer.

: 36. Asa direct result of MKC/Karkori’s negligence and negligence per se, Mr.
Derman has suffered property damage and numerous injuries. These damages and injuries

include: damage to Mr. Derman’s home due to MKC/Karkori’s negligent work, which damage

had to be repaired at significant additional cost; increased expenses due to the delays that

MKC/Karkori’s shoddy work caused; hiring a new general contractor to replace MKC/Karkori
after it Mr. Derman was forced to default-terminate MKC/Karkori.
WHEREFORE, Mr, Derman prays for Judgment and relief as set forth below.
FOURTH CAUSE OF. ACTION
Slander of Title
(Against MKC and Karkori)
37. .Mr. Derman hereby incorporates paragraphs 1 through 17 as if set forth in full.

38. MKC/Karkosi willfully and maliciously recorded an invalid Lien on Mr. Derman’s

‘property. MKC/Karkori knew that the Lien was invalid because it knew that it was for work

MKC/Karkori did not perforrh, that it grossly overstated the reasonable value of any work
MiC/Karkori did perform and that MKC/Karkori had waived and released its mechanic’s lien
rights.

39, MKC/Karkori published its false statement of interest in Mr. Derman’s property

-10- . 2303S. 7040512.

* COMPLAINTby recording the Lien. That publication was not privileged.

40. | MKC/Karkori had actual malice when it recorded the invalid Lien. MKC/Karkori
knew the Lien was invalid and recorded it to spite Mr. Derman and further frustrate his efforts to
obtain financing to complete the project, and to gain leverage over Mr. Derman in settlement
negotiations.

41. MKC/Karkori’s conduct has injured and continues to injure Mr, Derman in at least
two ways. First, the Lien constitutes a constitutional taking of Mr. Derman’s property. Second,
MKC/Karkori’s wrongfully-recorded Lien has decreased the value of Mr. Derman’s property by
the amount of the lien.

WHEREFORE, Mr. Derman prays for J adgment and relief as set forth below.

FIFTII CAUSE OF ACTION

Declaratory Retief That Mechanie’s Lien Is Invalid
(Against MKC and Karkorf)

42, | Mr. Derman hereby incorporates paragraphs 1 through 17 as if set forth in full.

43. There is an actual and present controversy between the parties as to the validity of
the Lien. MKCMKarkori claims by the Lien that it is owed $104,000 for work completed through
March 1, 2008. Mr. Derman disputes that MKC/Karkori did any work during that period, that the
reasonable value of any work MKC/Karkori did perform was as stated in the Lien and
affirmatively alleges that MCK/Karkori waived and released its mechanic’s lien rights.

“44. Mr. Derman seeks a declaration that the Lien is invalid.
" WHEREFORE, N Mr. Derman prays for Judgment and relief as set forth below.
PRAYER

Mr. Derman prays for relief as follows:

1. For damages in the amount of $1,210,625;

2. For pre-judgment interest;

3. For disgorgement of all money Mr. Derman has paid to Defendants in connection
with the Project, as provided under Cal. Bus, & Prof. Code § 703 1b);

4. For punitive and exemplary damages;

5. A declaration that MKC/Karkori's May 1, 2008 lien in the amount of $104,000 is

-H- 2303511704051._ ce Pe ~ -
. ' ww’ Kot
Cc C
1 | invalid;
2 6. Forsuch other and further relief as the Court deems just and proper.
3
4 | Dated: September 4, 2008 , FARELLA BRAUN & MARTEL LLP
5 :
6 wy Ome
; : oe Frank J. Riebli
3 Ate ERMAN
5 :
"0 DEMAND FOR JURY TRIAL
” Mr, Derman hereby demands trial of his claims by jury.
13 , :
14 Dated: September 4, 2008 FARELLA BRAUN & MARTEL LLP
15 . uo .
16 on hee
17 “Attomeys for Plaintiff”
i WAYNE DERMAN
19
20
21
22
23
24
25
26
27

2303511 709051.2©

Lloyd’s
Certificate

This Insurance is effected with certain Underwriters at Lloyd's.
London.

This Certificate is issued im accordance with the limited
guthorization granted to the Correspondent by certain Underwriters at
Lloyd's, London whose syndicate numbers and the propertiona
underwritten by them can be ascertained from the affice of the said
Correspondent {such = Underwriters being hercinafier called
“Underwriters") and in consideration ef the premium specified herein,
Underwriters hereby bind themselves severally and not jointly, each for
bis own part and net one for another, their Executors and
Administrators.

The Assured is requested to read this Certificate, and if itis not
correct, return it immediately to the Cortespoadent for appropriate
alteration.

AD inquiries regasding this Certificate should be addressed to the
following Correspondent:

Commodore insurance Services, [ne
Attention: David Smith

2340 Powell Street, #308
Emeryville, California 94608

Telephone: ($10) 399-6800
Fax: ($10) 899-6900
Emant: dsmith@commodarcins.com

SL.C-3 (USA) NMA2868 (24/08/00) Farm aepeovet hy Line's Marke Arvactamon@)
f

CERTIFICATE PROVISIONS

L

7

Sepoatare Required, Ths Certificate shall not be valid untess signed by the Comrespondent wes the attached Derlarstion
Page

Correspoaiient Not tesurer. The Carrespondect is nor an Insurer hereunder and nersher ts nor ahalt be fiable for any
foes ov clnim whatsvever, The insurers hereunder are chase Underwriters af Liowi, London whose symiicate surebers
ran be ascermined as hereinbefore set forch, As used in this Ceniticate “Underwriters” shall be deemed to anclude
incorpurated as well a6 unincompnrated persons oF entities that are Underwriters af Lloyds, Landon

Canceltation, If this Certificate provides far canceflatsan ard this: Certificnte is cancelled after the meepban site
zasned peernhum must be potad fix the ume the insurance has heen in tone

Service of Salt, It is sgrend tbat in the event of the Iaslure of Linderwruters io pay uny amount elnigned ta be oe
hereunder, Uinéeewriters, af the request of the Assured, wall submit to ihe jersdiction of a Coun of compress
porisdichon within the Urdted States. ‘Nothing im thin Claure constinutes oF should be understucd to consiinute a waiver
of Underwritied nghts to-commence on action inany Court af comperent juresdiction in the United Stares, I reirarve an
autvon toa United Sates District Court, or to seek 2 transfer of a case to-anncher Court as penmutred by the laws of the
Tinned Grates or nf any Stale m toe Liniced Scares. it ix furher agreed thar szrvice of process in such suit may be made
apes the form of persoa sumed in stem 6 of the attached Pectaration Page, ae thal m any ‘suxt mstitaled ageinst aay Cee
of then wpon this cansract, Underwriters witl ahwfe by the final decision of such Coert of of any Appeldate Court m the
‘event of an appeal.

The ahowe-nacned are authorized and diecoted ©) accept servxce of process on bebslf of Underwriters in any swucih wat
andior upon request of the Assured 16 ive a written undertaking tothe Asuored that they will enter a genera}
appearance upan Linderwrisers' behalf in she event ‘auch a suet shall be instituted.

Further, parsuant to any satate of atty stale, seremvry or thatsct of the United States which nakes provision theretar.
Lnderwreers hereby designate the Supenmicndest, Commissioner or Divectar of Insurance ar other officer specified for
thac purpose in the stonate, oF Ing aucdesar or successors in office, 2% theirtrue and tawfal atomcy apon whom may be
aerved any lawste process tery aciwun, suit or proceeding, ‘inatitused by or an behalf of the Assured o¢ any beneficiary
heretsnder avisang out af ibis contract of snsammee, and heretry designate the above-inentianed as the poss when
the said officer is suthorized to malauch prccess or a true enpy thereof.

Asslgament. [his Cerificate shall not be assagned esther in whole ox in pare without the writen cnnsene af the
Correspundent crdorsed hereun,

Attached Conditions Incorporated. This Cerrificote si msde and accepted subject to al the provisions, conditions and
warranties ser forth herein, attached or exxicesed, all of whach wre tobe consadered st incorporated herein,

‘Short Rate Cancellation. 1f the stached provisions provide Jor eancelianon, the table below Wilf be used te calculate
the sheet rain prepartion pf the premium when applicable uncer she terms of soncellalen.()

Short Rate Cancellation Table For Teem of One Year.

Derslimaence Re Cen ofone © Dayslrowanes Pes Ceststope Daya taunarce Oey lnsatamce | RerCom at ane

in Fone sear Poemtics Fora yer Fremum — mFane ates year Premier
BEB emer BB 36 178
wo. : 4 . Yl Dt %
M3 M : 1s MF wt
7 2 lad 162. ym 7It a
5 148178 IH... at
n u ity a .
Vg. ba ”
VPA rk pe Bo
BAT
$eE 19 w yar. TL ”
al BOE - YB GMb et08 bo ooonne 8
a Ba6 210.
wal 3et-1i4.
a sts
UA. 2(7 ner. at 320.33
ei

B. 30 FINA mes) NSM

a Tn. #3 U2... We
RB wnt THT. ALES BB San
Vad Lis. ye Ja.
1a 1K, 24-231.
1-M2 mh al.

ia}. 146
F159,
im

HY. MA CS mot f
Wie
Mert

‘Raden igrstiadabe wo sumone whi ete leas than oF teste Peat cit oa,

vk Waren foun ere Si 6 yy fl at at nic amin woven ee asta eam etree 5 FF seer
‘weiter fet aterm of ne reat.

fh Wmgurenes fa been m force for eee as are yet

1 Dleretese {4 rants prrensane ie Bee unsarannce wPaTR for a Karn OF ante Yow

Diatuat auc steven fine tte fall mnisnncs prema, aod an Me convened CFCS he gr rata ern prgarere us ae oth 159 ft
Lang af tenn bye ra fe race baa boos av Teens Me ength ones Heyer a ye Far sehucts hz policy nae angecalty ities

“ed romnaen peor ew nocondanee ab (etre {84 abl] 8 bean caro eteee nora Ni pate SUTIEES HEH tere.3.

©)
()

NOTICE .

_ THE INSURANCE POLICY THAT YOU HAVE PURCHASED 15

BEING ISSUED BY AN INSURER THAT IS NOT LICENSED BY THE
STATE OF CALIFORNIA. THESE COMPANIES ARE CALLED
“NONADMITTED” OR “SURPLUS LINE” INSURERS.

. THE INSURER IS NOT SUBJECT TO THE FINANCIAL SOLVENCY

REGULATION AND ENFORCEMENT WHICH APPLIES TO
CALIFORNIA LICENSED INSURERS.

THE INSURER DOES NOT PARTICIPATE IN ANY OF THE
INSURANCE GUARANTEE FUNDS CREATED BY CALIFORNIA
LAW. THEREFORE, THESE FUNDS WILL NOT PAY YOUR
CLAIMS OR PROTECT YOUR ASSETS IF THE INSURER BECOMES
INSOLVENT AND IS UNABLE TO MAKE PAYMENTS AS
PROMISED

CALIFORNIA MAINTAINS A LIST OF ELIGIBLE SURPLUS LINE
INSURERS APPROVED BY THE INSURANCE COMMISSIONER.
ASK YOUR AGENT OR BROKER IF THE INSURER IS ON THAT

LIST.

FOR ADDITIONAL INFORMATION ABOUT THE INSURER YOU
SHOULD ASK QUESTIONS OF YOUR INSURANCE AGENT,
BROKER, OR “SURPLUS LINE” BROKER OR CONTACT THE
CALIFORNIA DEPARTMENT OF INSURANCE, AT THE
FOLLOWING TOLL-FREE TELEPHONE NUMBER: 1-800-927-4357.

. LF YOU, AS THE APPLICANT, REQUIRED THAT THE INSURANCE

POLICY YOU HAVE PURCHASED BE BOUND IMMEDIATELY,
EITHER BECAUSE EXISTING COVERAGE WAS GOING TO LAPSE
WITHIN TWO BUSINESS DAYS OR BECAUSE YOU WERE
REQUIRED TO HAVE COVERAGE WITHIN TWO BUSINESS DAYS,
AND YOU DID NOT RECEIVE THIS DISCLOSURE FORM AND 4
REQUEST FOR YOUR SIGNATURE UNTIL AFTER COVERAGE
BECAME EFFECTIVE, YOU HAVE THE RIGHT TO CANCEL THIS
POLICY WITHIN FIVE DAYS OF RECEIVING THIS DISCLOSURE.
IF YOU CANCEL COVERAGE, THE PREMIUM WILL BE
PRORATED AND ANY BROKER FEE CHARGED FOR THIS
INSURANCE WILL BE RETURNED TO YOU.

SF 19922. THT 99741 D-2(RFFECTIVE JANUARY 1, 2005 THROUGH DECEMBER 31,2007)COMMERCIAL POLICY DECLARATIONS
400% Certain Underwriters at Lloyd's of London,

400% Syndicate 5151
One Lime Street
Londen, EC3M THA

United Kingdom
Named ftsured and Mailing Address: Policy Number; MCP 04 01753
Mostota Kakori
DBéc M. Kakori Construction, inc.
2780 Diamond St. Renewal of Number:
San Francieco , CA 94131 Reference tr 25
Agent and P.O. Addrass:
Commodore Insurance Services, Inc.
2340 Powell Street, #308
Emeryville, California 94508
Polley Perbod: From: 1201/2007 To: 4201/2008 12:01 AM, Sarnia Time at the address of te

Neined Insured se sited.

In return for the payment of the premium, and subject to ail the terms and conditions of this
policy, you understand and agree that we are providing the Insurance as stated In this policy.

THIS POLICY CONSISTS OF THE FOLLOWING COVERAGE PARTS FOR WHICH A PREMIUM 1S,
INDICATED. THIS PREMIUM MAY BE SUBJECT TO ADJUSTMENT.

Commercial General Liability Coverage Part 31.614
Terrortsm Coverage

Liquor Liabaity Gaverage Part

Building and Personal Property Caverage Part

Farm and Ranch Coverage Part

‘Commercial inland Marine Covarage Part

Totat Advance Premam: $1,654

State Tax: $48.42

‘Other Tax: $0.00
Stamping Fea: $2.02
Broker Fae: $0.00
Processing Fee: $300.00

Total Advanoa Premium including Taxes and Fees: $1,064.44

Endarsements: See SCHEDULE OF COMMERCIAL POLICY FORMS AND ENDORSEMENTS inchated
in this poficy.

Bel lnuividun! (1 Parnership or Joan Venture

Named Insured is (check one}: 1 Limited Liabstity Compan: £1 Other

MCP 1001 G807 Authorized Reprasentative DateOo

POLICY NUMBER EFFECTIVE DATE AND TIME

MCP 04 004793 12IDUZ007

THIS ENDORSEMENT CHANGES THE POLICY, PLEASE READ IT CAREFULLY.
SCHEDULE OF FORMS AND ENDORSEMENTS

SLC-3 NMA 2863 Lloyd's Ceruficate

Form D2 (G15) Non Admitted Cares Notice

MCP 1901 0807 Common Policy Declarations

MCP 1002 6807 List of Forms and Endorsements

MCP 1003 0807 Notice to Policyholder

NMA 1998 Service of Suit

LMA 5021 Applicable Law (U.S.A)

MCP 1005 G807 Claims Reporting Notice

MCP 1007 G07 Commencial General Liability Declarations

MCP 1010-0807 Liability Deductible

MCP 1004 0807 Minimum Eamed Premium Endorsement

MCP [006 O07 Supplementary Payments Included Within the Limit of Liability
TL 02 70 02 94 California Changes - Cancellation and Non-Renewal

TL.0037 11 9% Common Policy Conditions

CG DOO! 12.04 Commercial Genera Liability Coverage Part, 180 2004 Form

TL GQ21 04 96 Nuclear Energy Liability Exclusion Endorsement

CG 2147 1207 Employment Related Practices Exclusion

CG 2467 12 04 Fungi or Bacteria Exclusion

CG 2149 09 99 Total Pollution Exctusion Endorsement

CG 2279 07 98 Exclusion - Contractors - Professional Liability

MCP 1009 0807 Additional Exclusions and Provisions Liahitity Insurance (Asbestos Excl. Subsidence of Land
Excl., Punitive or Exemplary Damages Excl... Assault and Bantecy Exxl., Lead Contamination Excl. Silica Exet.,
PCB Liabiliry Excl., Occupatianal Diseases Excl., Amendment of Liability Premium Conditions)
MECP 1011 O807 Exciusion - EIFS Exterior Insulation and Finish Systems

MCP 1012 0807 Subcoatractors Wanrnty Endorsement

BECP 1015 6807 Exclusion - Prior Work

MCP 1016 0807 Exclusion - Pending and Prior Litigation and Koows Losses
SCP 1017 O88? Exclusion - Continuing and Ongoing Losses

MCP £018 O807 Sunset Clause

MCP 1019 OBO7 Contractors Coverage Limitation

MCP 102) 0807 Exclusion - Water Damage

MCP 1034 0807 Water Damage Sublimit Endorsement - Sublienit $100,000
MCP 1013 0807 Exclusion - New Mutti-Unit Cansructiont

MCP 1044 0807 Exctusion - Tract Home Exclusion

CG 2178 12 02 Exclusion of Cenified Acts of Terrarisna

All othar Tarms and Conditions of this Policy remain unchanged,
MGP 1002 0807 Page 1 of 2 42008/2007St

Oo

POUCY NUMBER EFFECTIVE DATE AND TIME

MCF 04 001793 1201/2007

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
NOTICES TO POLICYHOLDER
IMPORTANT NOTICES TO POLICYHOLDER: (Piesse read carefully)
A. Any misrepresentation or any concealment or fraud on the part of the insured which
maszepresentation, concealment or fraud affects elther the acceptance of the nak or the hazard
assumed by the Company shall render this palicy void,

B. Notice of all accidents or occurrences must Immediately be given to Commodore insurance
Services, Inc., whether of not such accidents or oceurrences appear likely to invoive this policy.

C, The company reserves the right to audit any and alt portions of the insurance policy.

All other Terms and Conditions of this Policy remain unchanged.
MCP 1003 O807

12/08/2007()
c

POLICY NUMBER EFFECTIVE DATE AND TIME

MCP 04 001793 12042007

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
SERVICE OF SUIT

Service of suit against. us may be made upon our designated agant fot purposes of service of process:

Coremodore Insurance Services, Inc
2340 Powell Street, 3308
Emeryville, Callfomia 94608

Telaphone: (510} 889-6500
Fax: (510) 898-6900

Pursuant to any statute of any state, testitory or distrlet of the United States which makes provision
therefore. the Company hereby designates the Superintendent. Commissioner or Director of Insurance or
other office specified for that purposes in the State, of his successor or successors in offica, as their true
and lawful atiorney upon whom may be served any jawful process In any action, suit or proceeding
instituted by or on behalf of the Insured or any beneficiary hereunder rising out of this contract of
insurance,

jh the Slates of Cabloria and Hlinois, i is further agreed that sesvice of process may be made upan the
person of persons named below:

Dave Smith - Commadere Insurance Services, Inc

All other Terms and Conditions of this Policy remain unchanged.
NBA 1998 1200672007-~,
Net

POLICY HUMBER EFFECTIVE DATE ANG TIME

MCP 04 004793 12/01/2007

APPLICABLE LAW (U.5.A.)

This Insurance shall he subject to the applicable state law to be determined by the court of campetent
jurisdiction as determined by the provisions of the Service of Sut Clause (UU SA)

141082005
LMA 5021

Form approved by Loyd's Markat Aasocistion

All other Terms and Conditions of this Policy remain unchanged.

LMA 5021 12/08/2007©
©)

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

CLAIMS REPORTING NOTICE

In the event of any cecurrance thal may result In a clam against this policy, the Insured should
immadiately repert such occurrence Lo:

Commodore Insurance Services. Inc
Attention: Dawd Smith

2340 Powell Steet, #308
Emeryville, Califorrda 94608

Yalaphane: (510) 899-6547
Fax: (510) 899-6941
Email: dsmith@commodoreins.com

All other Terms and Conditions of this Policy remain unchanged.
MCP 1005 0807 1208/2007()

COVERAGE PART DECLARATIONS
EFFECTIVE DATE AND TIME

MCP 04 001753 2m 2007

COMMERCIAL GENERAL LIABILITY

Co Supplemental Deciaration Is attached, Reference Number: GS70029
Limies oftnsurence nn
* General Aggragate Limit (Other Than Products-Completad Operations} $2,000,000
Products-Completed Operations Aggregate Limit $1,000,000
Personal and Advertising Injury Limit $1,000,000
» Each Occurrence Limit $1,000,000
Fire Damage Limit 700,000 Any One Fira
Medical Expense Wim ce eer er $5,000. Any One Person
Location(s} (Including Zip Code(s)} of ‘Al Premises you Own, Rant or Occupy (Enter "Same" if same location
. ag your mailing address):
SBME oe o
Pe "Rate (Premises!
Code Premium Advance
; Classification Number Basis Exposure ‘Rate = Premium
“S1344: Carpentry Interior p) per $4.04 ~ 947,737 $0.00 $687
91342. Carpentry NOC p} $49.60 / $29.45 $832
92478: Bactrical Work -
within Butiding py $14.43/514.85 $294
ay Area "9 Goat si Sales
mj Admecons 9) Volts
Total Advance Premayrn $1814

THESE” DECLARATIONS AND THE COMMON POLICY DECLARATIONS, if APPLICABLE.
OGETHER WITH THE COMMON POLICY CONDITIONS. COVERAGE FORM(S), FORMS AND
ENDORSEMENTS COMPLETE THE ABOVE NUMBERED POLICY.

Alt other Terns and Conditions of this Paticy remain unchanged.

Lage, Velesgis

MCP 1007 0807 ‘ Authorized Representative  QateoO

Vhen usad as a premium 2950)

“acea™ means:

“Tha total number of aguare les! or Reor space al the Insured
premises, commpuled 94 fofows:

AL For exitve buildings, by mufigheng the product of ihe
horizcetal diensons of the culside of ihe cuter building
senbs by the richer of foots, incuding basements but do:
fof use the area of the fodowing:

4. Couris and mezzanine types of Boor opening.

2. Pestions of basements of fico where 81% or monn oF
Ihe atea i use? for shop or storage for building
maintenance, c@waking by bulding maintenance
employees fhmating ones, pawer phacts or ar
Conciionang equapment

@. For tenants, determine the amma thoy eccumy ihe same
manage a4 Jor the entire bufcing.

¢. The rates anply par 1,080 square feet of arma

“Cost” moar
tha total cost af ail work kt or sumiat in conngckor wilh aact
pectic project including:

‘A. The conl at all labor, materials and oqepmant fumiched,
used or detvered for ube inthe execution of Ihe work: and

8. All tees, bonusea of commesions mad. paid or hie

C. The rates anny par $1,000 of cost

“Mominsions™ means:

The total mampar of parsons, citer than employeas oF Ing named
ingured, admitted to the event sured ar to events conducted OF
ihe pramecas whether on pakt admissions. totels, complimentary
Lickets or passes The faces apply par 14100 admessicns.
“Payroll means

Remuneration whch inchiges money or ubsillutas for moray
Payroll sicluges.

4. Comatlasions, bonuses, pay for habdeys. vacations oF
periods of ress,

2. Extra pay fay overtime in eccondanca with the manuals
ip ube By us,

2. Payments by an ernigtoyar oF amounts onered
fequied by Jaw to be paid by emmployses to stalutery
Insurance or perisiar pens, such a the Federal Social
Secisity Aci,

A. Payeneed to emplayess an any beaid other thar line
yrovkad, such ag gieog work, prafit sharing or moRntea
plans.

5S. Payrrent or siowance for hand tools or power socks
uged by hand piovited by employeds are used fy thee
work af aperations for the insured.

§. The rereal value of an apartment of a house provided for
Sh employes based ot comparable accomecdstons,

7. Vastue of meals aed lodging other than an apartitert or
house recetred by employees ga part of Iheir Dey.

8. The yaue of store cerlificates, mecchandise, credils cr
any pier subsblula for oxiney fecewed by empluyees
at part of ther pay.

43. The payroll of mebde equigment operators and their
helpers, whether or not the opersiors are dusignaled cr
feerand tn operate aulomotiles. If Ihe op