Order: BEACON RESIDENTIAL COMMUNITY ASSOCIATION VS. CATELLUS THIRD AND KING LLC et al

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                                Steven H. Schwartz, Esq., SBN 94637
Noel E. Macaulay, Esq., SBN 121695
SCHWARTZ & JANZEN, LLP

12100 Wilshire Boulevard, Suite 1125
Los Angeles, CA 90025 7117
Telephone: 310/979 4090
Facsimile: 310/207 3344

Attorneys for Cross Defendant, HKS, INC, individually and dba HKS ARCHITECTS, INC.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SAN FRANCISCO

BEACON RESIDENTIAL COMMUNITY
ASSOCIATION,

Plaintiff,
VS.

CATELLUS THIRD AND KING LLC; CATELLUS
DEVELOPMENT CORPORATION; CATELLUS
COMMERCIAL DEVELOPMENT CORP.; CATELLUS
OPERATING LIMITED PARTNERSHIP; CATELLUS
URBAN DEVELOPMENT CORPORATION: THIRD
AND KING INVESTORS LLC; PROLOGIS; MISSION
PLACE LLC; MISSION PLACE MEZZANINE LLC;
MISSION PLACE MEZZ HOLDINGS LLC; MISSION
PLACE PARTNERS LLC; CENTURION REAL
ESTATE INVESTORS IV, LLC; CENTURION REAL
ESTTE PARTNERS, LLC; CENTURION PARTNERS
LLC; WEBCOR CONSTRUCTION, INC.; WEBCOR
BUILDERS, INC.; WEBCOR CONSTRUCTION, INC.,
individually and doing business as WEBCOR
BUILDERS; WEBCOR CONSTRUCTION LP
individually and doing business as WEBCOR
BUILDERS; SKIDMORE OWINGS & MERRILL LLP;
HKS, INC.; HKS ARCHITECTS, INC.; HKS, INC.,
individually and doing business as HKS
ARCHITECTS, INC. and DOES 1 through 200,

Defendants.

ELECTRONICALLY

FILED

Superior Court of Califprnia,

County of San Francis

JUL 25 2014
Clerk of the Court

BY: VANESSA WU
Deput)

CASE NO. CGC 08 478453

[Complaint Filed: August 8, 2008]

EXHIBITS 1 AND 2 TO REQUEST TO
TAKE JUDICIAL NOTICE IN SUPPORT
OF HKS, INC., INDIVIDUALLY AND DBA
HKS ARCHITECTS, INC.’S
OPPOSITION TO MISSION PLACE’S
“MOTION TO ENFORCE THE COURT'S
JANUARY 5, 2014 ORDER GRANTING
MISSION PLACE’S MOTION FOR
SUMMARY ADJUDICATION”

DATE: August 6, 2014

TIME: 10:30 a.m.

DEPT: 303

JUDGE: Honorable Richard A. Kramer

EXHIBITS 1 AND 2 TO REQUEST TO TAKE JUDICIAL NOTICE IN SUPPORT OF HKS, INC., INDIVIDUALLY AND DBA HKS
ARCHITECTS, INC.’S OPPOSITION TO MISSION PLACE’S “MOTION TO ENFORCE THE COURT'S JANUARY 5, 2014
ORDER GRANTING MISSION PLACE’S MOTION FOR SUMMARY ADJUDICATION”

CO

ClerkEXHIBIT 1

TO REQUEST TO TAKE JUDICIAL NOTICE IN SUPPORT OF HKS, INC., INDIVIDUALLY AND
DBA HKS ARCHITECTS, INC.’S OPPOSITION TO MISSION PLACE’S “MOTION TO ENFORCE
THE COURT'S JANUARY 5, 2014 ORDER GRANTING MISSION PLACE’S MOTION FOR
SUMMARY ADJUDICATION”e Exhibit 1
Charles A. Hansen (Bar No. 76679)
Peter J. Laufenberg (Bar No. 172979)
WENDEL, ROSEN, BLACK & DEAN LLP
1111 Broadway, 24th Floor
Oakland, California 94607-4036
Telephone: (510) 834-6600
Facsimile: (510) 834-1928

Steven M. Cvitanovic (Bar No. 168031)
HAIGHT BROWN & BONESTEEL LLP
71 Stevenson Street, 20th Floor

San Francisco, California 94105-2981
Telephone: (415) 546-7500

Facsimile: (415) 546-7505

i

Attorneys for Defendants and Cross-Complainants Mission Place LLC; Mission Place

| Mezz Holding LLC; Mission Place Mezzanine LLC; Mission Place Partners LLC;
Centurion Real Estate Investors IV, LLC; and Centurion Real Estate Partners, LLC (sued
10 | in its own name and erroneously sued as Centurion Partners LLC)

uf

Co fe ND A ee WwW LH

SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF SAN FRANCISCO

BEACON RESIDENTIAL COMMUNITY ) Case No. CGC 08-478453
15 | ASSOCIATION,
NOTICE OF MOTION AND MOTION

16 Plaintiff, FOR SUMMARY ADJUDICATION BY
MISSION PLACE LLC AND
17 v. AFFILIATES AGAINST WEBCOR
CONSTRUCTION, INC. AND HKS,
18 | CATELLUS THIRD AND KING LLC; INC.
CATELLUS DEVELOPMENT
19 | CORPORATION; CATELLUS [Filed concurrently with Memorandum of
COMMERCIAL DEVELOPMENT Points and Authorities; Separate Statement
20 | CORP.;CATELLUS OPERATING of Undisputed Material Facts; Declaration
LIMITED PARTNERSHIP; CATELLUS of Steven M. Cvitanovic; Declaration of
21 | URBAN DEVELOPMENT John C. Tashjian; Compendium of
CORPORATION; THIRD AND KING Exhibits]
22 | INVESTORS LLC; PROLOGIS;
MISSION PLACE LLC; MISSION Date: March 3, 2011
23 | PLACE MEZZANINE LLC; MISSION Time: 9:30 a.m.
PLACE MEZZ HOLDINGS LLC; Dept: 304
24 | MISSION PLACE PARTNERS LLC, Judge: Hon. Richard A. Kramer
CENTURION REAL ESTATE

25 [INVESTORS IV, LLC; CENTURION

REAL ESTATE PARTNERS, LLC;

26 | CENTURION PARTNERS LLC;

WEBCOR CONSTRUCTION INC.;

27 | WEBCOR BUILDERS, INC.; WEBCOR
CONSTRUCTION, INC. individually and

28 | doing business as WEBCOR BUILDERS;

WEBCOR CONSTRUCTION LP

LAW OFFICES

HAIGHT, BROWN & j
BONESTEEL, LLP. 2U29-0000032

‘San Francisco 3756079.1 Notice of Motion for Summary Adjudication by Mission Place LLC, et al. \‘LAW OFFICES
HAIGHT, BROWN

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&

BONESTEEL, LLP.

‘San Francisco.

25 | singularly or together have an immediate defense obligation by virtue of the contractual

| Estate Partners, LLC (sued in its own name and erroneously sued as Centurion Partners

individually and doing business as
WEBCOR BUILDERS; SKIDMORE
OWINGS & MERRILL LLP; HKS, INC;
HKS ARCHITECTS, INC; HKS, INC,
individually and doing business as HKS
ARCHITECTS, INC., and DOES 1 through

Defendants.

AND RELATED CROSS-ACTIONS

TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:

PLEASE TAKE NOTICE THAT on March 3, 2011, at 9:30 am. or as soon
thereafter as the matter may be heard in Department 304 of the above-entitled court located
at 400 McAllister Street, San Francisco, California, Defendants and Cross-Complainants
Mission Place LLC; Mission Place Mezz Holding LLC; Mission Place Mezzanine LLC;
Mission Place Partners LLC; Centurion Real Estate Investors IV, LLC; and Centurion Real

LLC) (hereinafter collectively referred to as “Cross-Complainants”) will move and hereby
do move for summary adjudication of their Seventh Cause of Action for Declaratory Relief
against Cross-Defendants Webcor Construction, Inc., dba Webcor Builders, Inc.
(“Webcor”) and HKS Architects, Inc. (“HKS”) (hereinafter collectively referred to as the
“Cross-Defendants”).

A dispute has arisen and an actual controversy exists as to whether Cross-
Defendants have an immediate duty to defend Cross-Complainants from the claims
asserted by the Beacon Residential Community Association (“Beacon RCA”) in this
action. A judicial determination of the liabilities and rights of the parties with respect to

this issue is appropriate and necessary. Cross-Complainants assert that Cross-Defendants

indemnity agreements that favor Cross-Complainants as applied to the law enunciated by

2029-0000032, 2

3756079.1 Notice of Motion for Summary Adjudication by Mission Place LLC, et al.@ e
1 |the California Supreme Court in Crawford et al. v. Weather Shield Mfg. Inc., 44 Cal. 4th
541 (2008).

Specifically, the moving Cross-Complainants seek summary adjudication on the
following four issues:

Issue 1: This Court should declare under the Seventh Cause of Action for

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6 | Declaratory Relief that Webcor has a duty to defend Mission Place LLC against the
7 | claims asserted by the Beacon RCA.

8| Webcor expressly agreed to defend and indemnify the original developer of the
9 | Beacon condominium project, Third and King Investors, LLC (“TKI”). TKI assigned all
10 its rights under that contract to Mission Place LLC, including the right to be defended and
11 Jindemnified by Webcor. Webcor expressly consented to such assignment and expressly
12 |acknowledged that Mission Place LLC was TKI’s successor. The Beacon RCA’s claims
13 Jagainst Mission Place LLC include claims that are within the scope of the Webcor
14 | indemnity agreement.

15| Issue 2; This Court should declare under the Seventh Cause of Action for
16 | Declaratory Relief that HKS has a duty to defend Mission Place LLC against the
17 | claims asserted by the Beacon RCA.

18 HKS expressly agreed to hold harmless and indemnify the “Owner” (as defined in
19 Ithe HKS Agreement) of the Beacon condominium project under the Mission Bay
20 | Agreement Between Architect and Owner (the “HKS Agreement”). TKI, as Owner,
21 [assigned all its rights under the HKS Agreement to Mission Place LLC, including the right
2210 be held harmless and indemnified by HKS. HKS expressly consented to such
23 | assignment, and expressly acknowledged that Mission Place LLC was the successor
24 |“Owner,” as that term is defined in the HKS Agreement. The duty to hold harmless and
25 | indemnity, under established California law, includes a duty to defend. The Beacon
26 |RCA’s claims against Mission Place LLC include claims that are within the scope of the
27 | HKS indenmity agreement.

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LAW OFFICES:
HAIGHT, BROWN & — | o59 soon032 3
BONEST! LLP. 1-00000: > + 7, 7 7s

‘aa Fanlaco 3756079.1 Notice of Motion for Summary Adjudication by Mission Place LLC, et al.i ® @

1 Issue 3: This Court should declare under the Seventh Cause of Action for
Declaratory Relief that Webcor has a duty to defend Mission Place Mezz Holding
| LLC, Mission Place Mezzanine LLC, Mission Place Partners LLC, Centurion Real
Estate Investors IV, LLC, and Centurion Real Estate Partners, LLC against the
claims asserted by the Beacon RCA.

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6 Webcor expressly agreed to defend and indemnify the original developer of the
7 Beacon condominium project, TKI, and all subsidiary and affiliated entities of the
8iideveloper and each of their respective members, managers, partners, agents,
9 | representative, trustees, directors, officers, shareholders and employees, and each of them.
10 | TKI assigned all its rights under that contract to Mission Place LLC. Webcor expressly
11 | consented to such assignment and expressly acknowledged that Mission Place LLC was
12 ITKI’s successor. The Beacon RCA’s claims against Mission Place Mezz Holding LLC,
13] Mission Place Mezzanine LLC, Mission Place Partners LLC, Centurion Real Estate
14 Investors IV, LLC, and Centurion Real Estate Partners, LLC (collectively, the “Mission
15 |Place-Affiliated Entities”) include claims that are within the scope of the Webcor
16 }indemnity agreement. Each of the Mission Place-A ffiliated Entities is entitled to defense
17 las an affiliated entity of Mission Place LLC.

18 Issue 4: This Court should declare under the Seventh Cause of Action for
19 | Declaratory Relief that HKS has a duty to defend Mission Place Mezz Holding LLC,
20 | Mission Place Mezzanine LLC, Mission Place Partners LLC, Centurion Real Estate
21 |mvestors IV, LLC, and Centurion Real Estate Partners, LLC against the claims
22 | asserted by the Beacon RCA.

23 HKS expressly agreed to hold harmless and indemnify the “Owner” of the Beacon
24 | condominium project and all subsidiary and affiliated entities of Owner and each of their
25 respective members, managers, partners, agents, representatives, trustees, directors,
26 | officers, shareholders and employees. TKI, as Owner, assigned all its rights under the
27|HKS Agreement to Mission Place LLC, including the tight to be held harmless and
28 |indemnified by HKS. HKS expressly consented to such assignment, and expressly

LAW OFFICES:
HAIGHT, BROWN & ‘7u29-0000032 4
BONESTEEL, LLP. et * e, : . wr

San Francisco 3756079.1 Notice of Motion for Summary Adjudication by Mission Place LLC, et al.

RTT1 | acknowledged that Mission Place LLC was the successor “Owner,” as that term is defined
lin the HKS Agreement. The duty to hold harmless and indemnify, under established
California law, includes a duty to defend. The Beacon RCA’s claims against the Mission

Place-Affiliated Entities include claims that are within the scope of the HKS indemnity

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5 | agreement. Fach of the Mission Place-Affiliated Entities is entitled to indemnity as an
6 | affiliated entity of Mission Place LLC.
7 This Motion will be based on this Notice, the accompanying Memorandum of
g | Points and Authorities, the Declarations of Steven M. Cvitanovic and John Tashjian, the
9 | Separate Statement of Undisputed Material Facts, the Compendium of Exhibits, the Reply
1
10 | papers, the Court’s files and records, the oral arguments of counsel, and any further
11 |evidence that the Court may deem necessary to fo full hearing on the motion.
J2 | Dated: December 17, 2010 NESTEEL LLP
13
14
en M. Cvitanovic
15 Attorneys for Defendants
Mission Place LLC; Mission Place Mezz
16 Holding LLC; Mission Place Mezzanine
LLC; Mission Place Partners LLC;
17 Centurion Real Estate Investors IV, LLC;
and Centurion Real Estate Partners, LLC
18 (sued in its own name and erroneously
9 sued as Centurion Partners LLC)
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LAW OFFICES
BOSSE LL | 2029-0000002 5
SanFrancisco ‘ff 3256079. Notice of Motion for Summary Adjudication by Mission Place LLC, et al.EXHIBIT 2

TO REQUEST TO TAKE JUDICIAL NOTICE IN SUPPORT OF HKS, INC., INDIVIDUALLY AND
DBA HKS ARCHITECTS, INC.’S OPPOSITION TO MISSION PLACE’S “MOTION TO ENFORCE
THE COURT'S JANUARY 5, 2014 ORDER GRANTING MISSION PLACE’S MOTION FOR
SUMMARY ADJUDICATION”e Exhibit 2 e@

| Charles A. Hansen (Bar No. 76679)
Peter J, Laufenberg (Bar No. 172979)

rt

2.) WENDEL, ROSEN, BLACK & DEAN LLP
1111 Broadway, 24th Floor
3 | Oakland, California 94607-4036
Telephone: (510) 834-6600
4 | Facsimile: (310) 834-1928
5 | Steven M. Cvitanovie (Bar No. 168031 POS.
HAIGHT BROWN & BONESTEEL LLP DEC 17 2010
6 | 71 Stevenson Street, 20th Floor
| San Francisco, California 94105-2981 oO
7 | Telephone: (415) 546-7500 FONE a emernettcinnine DY
§ Facsimile: (415) 546-7505 Date ins. “|
[WOOD SMITH Lents ot
Attorneys for Defendants and Cross-Complainimts-Misston-Place-LLG; ssion Place
9 | Mezz Holding LLC; Mission Place Mezzanine LLC; Mission Place Partners LLC;

Centurion Real Estate Investors IV, LLC; and Centurion Real Estate Partners, LLC (sued
10 |in its own name and erroneously sued as Centurion Partners LLC)

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF SAN FRANCISCO

BEACON RESIDENTIAL COMMUNITY ) Case No. CGC 08-478453
15 | ASSOCIATION,
MEMORANDUM OF POINTS AND

16 | Plaintiff, AUTHORITIES IN SUPPORT OF
MOTION FOR SUMMARY

17 v. ADJUDICATION

18 | CATELLUS THIRD AND KING LLC; {Filed concurrently with Notice of Motion
CATELLUS DEVELOPMENT for Sum: Adjudication, Separate

19 | CORPORATION; CATELLUS Statement of Undisputed Material Facts;
COMMERCIAL DEVELOPMENT Declaration of Steven M. Cvitanovic;

20 | CORP.;CATELLUS OPERATING Declaration of John C. Tashjian;

LIMITED PARTNERSHIP; CATELLUS Compendium of Exhibits]

CORPORATION; THIRD AND KING Date: March 3, 2011
22 | INVESTORS LLC; PROLOGIS, Time: 9:30 a.m.
MISSION PLACE LLC; MISSION Dept: 304
23 | PLACE MEZZANINE LLC; MISSION Judge: Hon. Richard A. Kramer
PLACE MEZZ HOLDINGS LLC;
24 | MISSION PLACE PARTNERS LLC;
CENTURION REAL ESTATE

LC;

REAL ESTATE PARTNERS, LLC;
26 | CENTURION PARTNERS LLC;
WEBCOR CONSTRUCTION INC.;
27 || WEBCOR BUILDERS, INC.; WEBCOR

CONSTRUCTION, INC. individually and
28 | doing business as WEBCOR BUILDERS.
WEBCOR CONSTRUCTION LP

LAW OFFICES
ener BROWN & zu. 32
JONESTEEL, L.L.P. 00000, - . . ° 7.
‘San Francisco 3757732. Motion for Summary Adjudication by Mission PlaceLAW OFFICES

HAIGHT, BROWN &

BONESTEEL, LLP.
‘Sap Francisco

-

N

200,

individually
WEBCOR BUILDERS; SKIDMORE
OWINGS & MERRILL LLP; HKS, INC;
HKS ARCHITECTS, INC; HKS, INC,
individually and doing business as HKS
ARCHITECTS, INC., and DOES | through

and doing business as

Defendants.

| AND RELATED CROSS-ACTIONS

oor nw FF WwW

Z029-0000032
BISTIB2A

Motion for Summary Adjudication by Mission Place1 TABLE OF CONTENTS
2 Page
3] INTRODUCTION AND SUMMARY OF ARGUMENT... sssssssssessssesnssttnrnenrssscctrenees 1
4| MEMORANDUM OF POINTS AND AUTHORITIES .....cscscscsscsecesescenensssenesseenenensnnenentes
5 1 FACTUAL BACKGROUND........5
6 A. CONTRACTS AND INDEMNITY AGREEMENTS... sere 1
7 i.
8 ii,
9 B. BEACON RCA GIVES NOTICE OF CLAIMS FOR
DEFECTS AND CROSS-DEFENDANTS DO NOT
10 DEFEND CLAIMS 4
11] i. Webcor Fails to Defend Claims Under Indemnity
D Agreement 4
ii. | HKS Fails to Defend Claims Under Indemnity
13 Agreement 4
14 C. CROSS-DEFENDANTS HAVE AN OBLIGATION
TO DEFEND ALL MISSION PLACE RELATED OR
15] AFFILATED ENTITIES UNDER THEIR
16 INDEMNITY AGREEMENTS 5
uv 2. ANALYSIS ...ecsessesssesseeseeseeerenensenenensanscanes
18 A. STANDARD OF REVIEW...
B. THE CROSS-DEFENDANTS HAVE AN
19 IMMEDIATE DUTY TO DEFEND CROSS-
COMPLAINANTS PURSUANT TO THE
20 INDEMNITY LANGUAGE IN THEIR CONTRACTS....--cceessseee 6
21 C.  PLAINTIFF’S ALLEGATIONS ARISE FROM THE
2 4 SCOPE OF WORK OF THE CROSS-DEFENDANTS......ceessee 9
3. CONCLUSION
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LAW OFBICES .
SONESTERL LLP 2U28-0000032 i
SanFrancico 37577521 Motion for Summary Adjudication by Mission Place1 TABLE OF AUTHORITIES
2 Page(s)
3 | Cases
4| Crawford et al. v. Weather Shield Mfg. Inc., 44 Cal. 4th 541 (2008) .sssreeessssesree passim,
5 | UDC-Universal Development v. CH2M Hill
6 (2010) 181 Cal-App.4th 10.....ccsssssssssesssesmnnneeeensnstentnnnnnssrerrienscesssnnner eee eee 6
Statutes
7
Civ. Proc. Code
8 Section 437c!
Section 437c
9 Section 437c
10 | Civil Code
Section 2778 8
i Section sea 7
b | Section 2778(4, 8
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14
15]
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LAW QFFICES } we
Ae TER ENP, (| ZU29-0000032
SaxFrascisco ff 37577321 Motion for Summary Adjudication by Mission PlaceINTRODUCTION AND SUMMARY OF ARGUMENT

INTRODUCTION, ee

This case involves the development and construction of the Beacon condominium
project (also know as “Mission Place”, or “Block Ni” collectively, “the “project”) near
AT&T Park, home of the World Champion San Francisco Giants. Webcor built the
project. ‘HKS designed the project. Cross-Complainant Mission Place LLC purchased the
| project from Third and King Investors, LLC, and its affiliated and/or successor companies
(hereinafter “Catellus”) after it was completed. In connection with the purchase, and with

the consent of Cross-Defendants, Catellus assigned its contracts to Mission Place LLC.

Oo Ow N DH HM S&F WN

A judicial declaration is necessary to answer the simple but important question of
10 | whether Cross-Defendants must defend Cross-Complainants from the claims presented by
11 |the Beacon Residential Community Association (hereinafter “Beacon RCA”). To answer
12 |that question, all this Court needs to do is review the contracts, review the claims, and
13 |review the case of Crawford et al. v. Weather Shield Mfg. Inc., 44 Cal. 4th 541 (2008).
14| After that analysis is completed, Cross-Complainants believe this Court will find no
15 | material dispute exists and that Cross-Defendants must defend Cross-Complainants in this
16 | action.

17 MEMORANDUM OF POINTS AND AUTHORITIES

18] 1. FACTUAL BACKGROUND

19} A. CONTRACTS AND INDEMNITY AGREEMENT. Ss

20 i. Webcor

21 | Webcor served as the general contractor for the project pursuant to a Construction
22 | Agreement with Third and King Investors, LLC (“TKI”) dated August 24, 2001 (the

23 |“Webcor Agreement”), under which Webcor agreed to, among other things, provide and
24 | furnish “all materials, supplies,...labor...supervision... and services required for the

25 | construction and completion of the project” that came to be known as “Beacon,” the

26 | project in dispute. (Fact No. 1) Section 11.1(a) of Article XI requires Webcor to:

27
indemnify, defend and hold Company, and all subsidiary and affiliated
28 entities of Company and each of their respective members, managers,
| parmers, agents, representative, trustees, directors, officers, shareholders and
LAW OFFICES
HAIGHT, BROWN & 1

BONESTEEL, LLP. 2U29-0000032 : ee —
San Francisco 3187732.1 Motion for Summary Adjudication by Mission PlacepM RYN NY NN YN e Ft Fe Se EP EF SO Se Ss
Boag ark & es |= SS Go we HY AH FF YN KF SO

LAW OFFICES

HAIGHT, BROWN &

BONESTEEL, LLP.
‘San Francisco

Oo wo YN DH & WN

employees, and each of them (collectively, the “Indemnified Parties” ... )
from and against ... any and all claims, demands, losses, damage. ..arising or
resulting from ... any... negligent act, error or omission of Contractor or
Contractor’s agents, representatives, officers or em loyees, or any other
erson or entity directly or indirectly employed or ired by Contractor ... [or
om] any patent or latent defect in the workmanship of any such person in
connection with the Work ... (Fact No. 2)

Section 11.2(a) further requires Webcor to defend all suits or actions that may be
brought by any third persons against any “Indemnified Party’.' (Fact No. 3)

Section 11.2(d) of the Webcor agreement states:

Notwithstanding the above stated subsections (a) through (c), where an

Indemnified Party has been provided with a defense by Contractor and it is

determined that the acts or omissions of such Indemnified Party is partly or

wholly at fault, and such determination is final (i.e., non-appealable), then

Contractor shall be reimbursed its costs expended ona proportional fault

basis. (Fact No. 4)
1 Mission Place LLC purchased the Beacon project in or about December 2004 and,
in connection with that purchase and pursuant to an Assignment of Contractor Agreement,
TKI assigned to Mission Place LLC all “right, title, interest in and to” the Webcor
Agreement and all warranties by Webcor. (Fact No. 5) On or about December 16, 2004,
Webcor executed a “Consent and Agreement” pursuant to which Webcor consented to the
i assignment of the Webcor Agreement to Mission Place LLC, affirmed that the contract
remained in full force and effect, affirmed that the Webcor Agreement constitutes a valid
| and binding obligation of Webcor, and affirmed that it was enforceable against Webcor in
accordance with its terms. (Fact No. 6) In the Consent and Agreement, Webcor
acknowledged that Mission Place LLC was TKI’s successor “Company.” (Fact No. 6)

ii. HKS
Under the Mission Bay Agreement Between Architect and Owner dated July 25,

2000 (the “HKS Agreement”), HKS agreed to provide professional services for the project

No. 1) ! Third & King Investors LLC is the “Company” jn the Webcor Agreement. (Fact
o.1

ZU29-0900032, T 2 . T es
31577321 Motion for Summary Adjudication by Mission PlaceV

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LAW OFFICES

HAIGHT, BROWN &
BONESTEEL,LLP. |
San Francisco

at issue, including architectural drawings, structural drawings, mechanical drawings,
electrical drawings, and specifications, including ventilation systems. (Fact No. 13)
Pursuant to Section 7.2 of the HKS contract, HKS agreed to:
..-indemnify and hold harmless Owner and all subsidiary and affiliated
entities of Owner ... and each of their respective members, managers,

partners, agents, r resentatives, trustees, directors, officers, shareholders
and employees (co! lectively, the “Indemnified Parties”... ), from and

against any and all claims, ... [or] ... lawsuits ... arising or resulting from: (i)

.. failure to comply with any provision of this Agreement, or negligent act,

exror or omission of Architect or Architect’s agents, representatives, officers

or employees. or any other person or entity directly or indirectly employed or

hired by Architect or such other person or entity in connection with the Work

we The foregoing indemnification shall not apply to the extent that such

Losses are caused by the active, passive, or concurrent ne; ligence or willful

misconduct on the part of any Indemnified Rarty. (Fact No. 14)

Mission Place LLC purchased the Beacon project in or about December 2004 and,
jn connection with that purchase and pursuant to a certain Assignment of Architect
Agreement, TKI assigned to Mission Place LLC, as successor-in-interest to TKI, all “right,
title and interest in and to all contracts ... to which Third and King is a party or assignee
and relating to the preparation of the Plans with architects, engineers and any other party,
including, without limitation, that certain contract dated July 25, 2000 (the “Contract’) with
HKS Architects, Inc.” (Fact No. 15)

On or about December 13, 2004, HKS executed a “Consent and Agreement,”
pursuant to which HKS consented to the assignment of the HKS Agreement to Mission.
Place LLC, affirmed that the contract remained in full force and effect, affirmed that the
HKS Agreement constitutes a valid and binding obligation of HKS, and affirmed that it
was enforceable against HKS in accordance with its terms. In the Consent and Agreement,
HKS acknowledged further that Mission Place LLC was the “successor Owner (as defined

in the Contract) under the Contract.” (Fact No. 16)

21429-0000032 3

31577321 Motion for Summary Adjudication by Mission PlaceOo Oo DT DA A ek WN

PmoN RY NY NY KN YP Fe Ee eke ew Be SSG Br Ss
BOA SS SF SO we ADH FF YN = SC

LAW OFFICES

HAIGHT, BROWN &
BONESTBEL, LLP.
Sau Francisco

@ @

B. BEACON RCA GIVES NOTICE OF CLAIMS FOR DEFECTS AND
CROSS-DEFENDANTS DO NOT DEFEND CLAIMS

i. Webcor Fails to Defend Claims Under Indemnity Agreement

The Beacon RCA served its first SB800 notice on August 28, 2006 and thereafter
supplemented that notice on September 20, 2006, November 3, 2006 and November 10,
2006 (collectively, the “SB800 Notices”). (Facts No. 7) The SB800 Notices indicate
claims for many construction defects in building systems that were installed by Webcor in
accordance with its contract. (Fact No. 8) In September 2006, Mission Place LCC
tendered the defense of the $B800 claim to Webcor. (Fact No. 9) On or about September
17, 2008, Mission Place LLC tendered the Beacon RCA’s claims, as set forth in its original
complaint, to Webcor. (Fact No. 10) Webcor has not accepted Mission Place LLC’s
tenders and has not defended Mission Place LLC. (Fact No. 11) The Beacon RCA’s
original complaint, and its operative First Amended Complaint, alleges many different
construction defects arising at least in part from Webcor’s construction of the project.
(Fact No. 12)

ii. YKS Fails to Defend Claims Under Indemnity Agreement

The Beacon RCA served its first SB800 notice on or about August 28, 2006 and
thereafter supplemented that notice on or about September 20, 2006, November 3, 2006
and November 10, 2006. (Fact No. 17) The SB800 Notices indicate claims for design
defects at least in part from the acts or omissions of HKS. (Fact No. 18) In September
2006, Mission Place LLC tendered the defense of the SB800 claim to HKS. (Fact No. 19)
On or about April 22, 2009, Mission Place LLC tendered the Beacon RCA’s claims as set
forth in its original complaint. (Fact No. 20) HKS has not accepted Mission Place LLC’s
tenders and has not defended Mission Place LLC. (Fact No. 21) The Beacon RCA’s
original complaint, and now its current and operative First Amended Complaint, alleges
many different design defects arising at least in part from HKS’s services in connection

with the project. (Fact No. 22)

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C.  CROSS-DEFENDANTS HAVE AN OBLIGATION TO DEFEND ALL
MISSION PLACE RELATED OR AFFILATED ENTITIES UNDER
THEIR INDEMNITY AGREEMENTS

It is beyond dispute that the indemnity agreements are broadly worded and directly
benefit not only Mission Place LLC, but all Mission Place LLC related entities and parties.
Mission Place Mezzanine LLC, a Delaware limited liability company, is the sole member

of Mission Place LLC. (Fact Nos. 23 and 40) Mission Place Mezz Holdings LLC, a

Delaware limited liability company, is the sole member of Mission Place Mezzanine LLC.
(Facts No. 24 and 41) Mission Place Partners LLC, a Delaware limited liability company,
is the sole member of Mission Place Mezz Holdings LLC. (Facts No. 25 and 42)
Centurion Real Estate Investors IV, LLC, a Delaware limited liability company, is the
Administrative Member of Mission Place Partners LLC. (Facts Nos. 26 and 43)
| Centurion Real Estate Partners, LLC, a Delaware limited liability company, is the
Managing Member of Centurion Real Estate Investors IV, LLC. (Facts No. 27 and 44)

The Webcor indemnity agreement obligates Webcor to defend “Company, and all
subsidiary and affiliated entities and each of their respective members, managers, partners,
| agents, representatives ... and each of them ... from and against ... any and all claims ...”
| (Facts No. 29 and 30) Webcor has acknowledged that Mission Place LLC is the successor
“Company” under the Webcor Agreement. (Fact No. 33) The HKS Agreement requires
HKS to indemnify ali “subsidiary and affiliated entities of Owner ... and each of their
respective members, managers, partners, agents, representatives ... from and against any
land all claims ...” (Fact No. 47) HKS has acknowledged that Mission Place LLC is the
successor “Owner” under the HKS Agreement. (Fact No. 48)

For purposes of brevity, the rest of the facts supporting summary adjudication as set
forth in the Separate Statement against Webcor (¢.g., the facts under Issue 3) and HKS

(e.g,, the facts under Issue 4) have been briefed and will not be repeated here.

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2. ANALYSIS

A. STANDARD OF REVIEW

A motion for summary adjudication may ask the court to adjudicate the merits of a
particular cause of action, an affirmative defense, an issue of duty, or claim for punitive

damages. Cal. Civ. Proc. Code § 437c(f). A “motion for summary adjudication may be

| made by itself or as an alternative to a motion for summary judgment and shall proceed in

fall procedural respects as a motion for summary judgment”. Cal. Civ. Proc. Code

§ 437c(f)(2).

“For purposes of motions for...summary adjudication...a cross-complainant has
met his or her burden of showing that there is no defense to a cause of action if that party
has proved each element of the cause of action entitling the party to judgment on that cause
of action. Once the...cross-complainant has met that burden, the burden shifts to the...
cross-defendant to show that a triable issue of one or more material facts exists as to that
cause of action or a defense thereto.” Cal. Civ. Proc. Code § 437c(p)(1).

B. THE CROSS-DEFENDANTS HAVE AN IMMEDIATE DUTY TO
DEFEND CROSS-COMPLAINANTS PURSUANT TO THE
INDEMNITY LANGUAGE IN THEIR CONTRACTS

In Crawford et al. v. Weather Shield Mfg. Inc., 44 Cal. 4th 541 (2008), the
California Supreme Court held that the subcontractor (i.c., indemnitor) was contractually
required to indemnify the general contractor (i.e., indemnitee) against all claims for
damages growing out of the execution of the subcontractor’s work and was further
required, at its own expense, to defend any suit or action brought against the general
contractor founded upon the claim of such damage. This requirement for an immediate
defense was reaffirmed and extended to an engineering firm in the case of UDC-Universal
Development v. CH2M Hill (2010) 181 Cal.App.4th 10.

The Crawford court further held that the terms, even if strictly construed in the
subcontractor’s favor, obligated the subcontractor to defend, from the outset, any suit

against the general contractor insofar as that suit was founded upon claims alleging

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damage or loss arising from the subcontractor’s negligence. Id. at 552 ~ 553. The

| Crawford court observed that California Civil Code Section 2778(4) “places in every
indemnity contract, unless otherwise [provided], a duty to assume the indemnitee’s
defense, if tendered, against all claims ‘embraced by the indemnity’,” regardless of the
outcome of the litigation. Id. at 557 - 558. Thus, the subcontractor had a contractual
obligation to defend the lawsuit, even though the subcontractor was ultimately found not
negligent. Id. at 553.

California Civil Code Section 2778(3)(emphasis added) articulates that “[a]n

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indemnity against claims, or demands, or liability, expressly, or in other equivalent terms,

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embraces the costs of defense against such claims, demands, or liability incurred in good
11 | faith, and in the exercise of a reasonable discretion.” In addition, Section
12 12778(4)(emphasis added) expressly states that “[t]he person indemnifying is bound, on
13 |xequest of the person indemnified, to defend actions or proceedings brought against the
14 Hatter in respect to the matters embraced by the indemnity, but the person indemnified has
15 | the right to conduct such defenses, if he chooses to do so.”

16] It is undisputed that the duty to defend can be triggered even if the party is not
17 ultimately found to be negligent. As stated by the court in Crawford, “{i]mplicit in this
18 |understanding of the duty to defend an indemnitee against all claims ‘embraced by the

19 |indemnity,’ as specified in subdivision 4 of section 2778, is that the duty arises

20 immediately upon a proper tender of defense by the indemnitee, and thus before the
21 | litigation to be defended has determined whether indemnity is actually owed. This duty, as
22 | described in the statute, therefore cannot depend on the outcome of that litigation. It
23 | follows that, under subdivision 4 of section 2778, claims ‘embraced by the indemnity,” as
24 Ito which the duty to defend is owed, include those which, at the time of tender, allege facts
25 | that would give rise to a duty of indemnity. Unless the indemnity agreement states
26 | otherwise, the statutorily described duty ‘to defend’ the indemnitee upon tender of the

27 | defense thus extends to all such claims.” Crawford, at 558.

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375775241 Motion for Summary Adjudication by Mission Place1} In the instant case, the contracts with the Cross-Defendants must be read to include
2\an immediate defense obligation. Specifically, Section 11.1 of the Webcor contract
3 | requires Webcor to “indemnify, defend and hold Company ... from and against any and all
4 | claims...arising or resulting from ... any ... negligent act, error or omission of Contractor
5]... [or from] any patent or latent defect in the workmanship of any such person in

[onnetion with the Work ...” In fact, the defense obligation in the Webcor contract is so
7 clear that Section 11.2 states that Webcor will be reimbursed if it is determined that the
8 |acts or omissions of an Indemnified Party is partly or wholly at fault.

9 The HKS contract has a different indemnity agreement. The HKS contract uses the
10 | words “hold harmless” and “indemnify” and does not use the word “defend.” However, in
11 |light of Crawford’s holding that indemnity includes a defense under Civil Code Section
12 12778, such an omission is not fatal.

13 The express language in the subject contracts clearly contemplated a duty to defend
14 yon the part of the Cross-Defendants, a duty that arose when the claims involving the

15 project were first made and not dependent on whether the litigation to be defended Jater
16 j established the obligation to pay indemnity. Crawford, 44 Cal. 4th at 558. Accordingly,
17 las required by California Civil Code Section 2778(4), upon receipt of the tender of
18 | defense, the Cross-Defendants were bound to defend Cross-Complainants. The contracts
19 | did not limit their duty to defend those claims. Accordingly, the contract language
20 |undeniably created “an immediate obligation, one that would necessarily arise before the
21 [litigation to be defended could determine whether [the Cross-Defendants] owed indemnity
22 | to [Cross-Complainants].” Crawford, 44 Cal. 4th at 560.

23 At this point, all this Court needs to do is determine whether the claims presented
24 | by the Beacon RCA arise from or relate to the scope of work of Webcor and HKS. The
25 | answer to that cannot be disputed since these entities built and designed the project.

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C. PLAINTIFF’S ALLEGATIONS ARISE FROM THE SCOPE OF WORK
OF THE CROSS-DEFENDANTS

The Beacon RCA alleges a variety of construction and design defects and resulting
damage, including defects jn the roofs, windows, decks, and ventilation, plumbing,
electrical, and mechanical systems, to name just a few, and that these violations are alleged
to be contrary to the law, including but not limited to the performance standards of SB800,
and the contract documents. (Facts Nos. 8, 12, 18, 35, 39, 50, 54) The Cross-Defendants,
in conjunction with their own subcontractors or consultants, built and designed the parts of
the project that the Beacon RCA claims are defective. Accordingly, the Beacon RCA’s
claims arise from the scope of work of Cross-Defendants thereby imposing the obligation
to defend under their contracts, tender having been made and not accepted. See Crawford,
supra.

3. CONCLUSION

The Cross-Defendants expressly agreed to defend, indemnify and hold Cross-
Complainants harmless from claims involving their work. The Beacon RCA’s allegations
of construction and design defects arise from the scope of work of the Cross-Defendants.
Cross-Complainants have a duty to defend Cross-Complainants jointly and/or individually,
in this case and Cross-Complainants are entitled to entry of summary adjudication in their
favor on their Cross-Complaint as to Seventh Cause of Action for Declaratory Relief.

Dated: December 17, 2010

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