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

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                                LAW OFFICES
HAIGHT, BROWN &
BONESTEEL, LLLP.

San Francisco

Steven M. Cvitanovic (Bar No. 168031)
Zachary W. Shine (Bar No. 271522)
HAIGHT BROWN & BONESTEEL LLP

Three Embarcadero Center, Suite 200 ELECTRONICALLY
San Francisco, California 94105-2981 FILED
Telephone: (415) 546-7500 a
Facsimile: (415) 546-7505 Superior Court of California,

County of San Francisco

Attorneys for Defendants and Cross-Complainants Mission Place LLC; Misdbhbiad 0 4
Holding LLC; Mission Place Mezzanine LLC; Mission Place Partners LLC Ghericefdin® Gaburt
Estate Investors IV, LLC; and Centurion Real Estate Partners, LLC (sued ii it86WH Biiive and
erroneously sued as Centurion Partners LLC) Deputy Clerk

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

BEACON RESIDENTIAL COMMUNITY Case No. CGC 08-478453

ASSOCIATION,

EXHIBIT H TO THE DECLARATION OF
ZACHARY W. SHINE IN SUPPORT OF
MISSION PLACE’S REPLY TO THE
OPPOSITIONS OF HKS AND WEBCOR
TO MISSION PLACE’S MOTION TO

)

)
a )
Plaintiff, }
)
} ENFORCE THE COURT’S JANUARY 15,
)
)
)
2
)
)

Vv.

CATELLUS THIRD AND KING LLC, et al.,

Defendants. 2014 ORDER GRANTING MISSION
PLACE’S MOTION FOR SUMMARY
ADJUDICATION
AND RELATED CROSS-ACTIONS

1
EXHIBIT H TO DECL. OF ZACHARY W. SHINE RE: MOTION TO ENFORCE THE

a COURT’S JANUARY 15, 2014 ORDER GRANTING MISSION PLACE’S MSAEXHIBIT HGordon & Rees LLP
175 Battery Street, Suite 2000

San Francisco, CA 94111

SANDY M. KAPLAN (SBN 095065)
GREGORY T. HANSON (SBN 201395)
GORDON & REES LLP

275 Battery Street, Suite 2000

San Francisco, CA 94111

Telephone: (415) 986-5900

Facsimile: (415) 986-8054

Attorneys for Defendants, Cross-Defendants and Cross-Complainants
WEBCOR CONSTRUCTION, INC.; WEBCOR BUILDERS, INC;
WEBCOR CONSTRUCTION, INC. dba WEBCOR BUILDERS on
its own behalf and erroneously sued as WEBCOR CONSTRUCTION

LP dba WEBCOR BUILDERS

SUPERIOR COURT OF CALIFORNIA - COUNTY OF SAN FRANCISCO

,

BEACON RESIDENTIAL COMMUNITY
ASSOCIATION,

Plaintiff,

vs.

CATELLUS THIRD AND KING LLC, et al.,

Defendants.

AND RELATED CROSS-ACTIONS.

ee ee

CASE NO, CGC-08-478453

WEBCOR CONSTRUCTION, INC.,;
WEBCOR BUILDERS, INC; WEBCOR
CONSTRUCTION, INC. dba WEBCOR
BUILDERS on its own behalf and
erroneously sued as WEBCOR
CONSTRUCTION LP dba WEBCOR
BUILDERS’ SUPPLEMENTAL
MEMORANDUM OF POINTS AND
AUTHORITIES IN SUPPORT OF
THEIR OPPOSITION TO MISSION
PLACE LLC AND ITS AFFILIATES’
MOTION FOR SUMMARY
ADJUDICATION

Complaint Filed: August 8, 2009

DATE: August 24,2012
TIME: 10:00 a.m.
DEPT: 304

JUDGE: Honorable Richard A. Kramer

WEBCOR'S SUPPLEMENTAL MEMORANDUM OF POINTS & AUTHORITIES IN OPPOSITION TO.
MISSION PLACE’S MOTION FOR SUMMARY ADJUDICATIONGordon & Rees LLP
275 Battery Street, Suite 2000

San Francisco, CA 94111

I.

HL

TABLE OF CONTENTS

INTRODUCTION AND PROCEDURAL BACKGROUND

A. Brief Factual Back ground... ecsesececnereessseenteacesnereceeveerteneeansneaeseeercevereeceeceee
B. Procedural Background. .........ssesscesseeseseseressseeeersessreessssneetnnesssenesesseseessetesncscssnecere
LEGAL ARGUMENT .....--cesscceecteecscereesneseessessaeecccensseeronsssenesteateeetnnertertenseanganeensenneaee 2

A. Standard for Summary Adjudication.

B. The Purported Assignments On their Faces Do Not Assign Indemnity or
Defense Obligations ta MISSION PLACE.

Cc. Parole Evidence Raises 2 Triable Issue of Fact; Therefore the Motion for
Summary Adjudication Must Be Denied. ............ccccsssescesesseeceneeeene ren seeseseseseced 6
D. The Assignment Is Invalid for Want of Consideration. 000.0... cece

WEBCOR’S Contract Does Not t Require It It to Provide de Indemnity o ora

Defense to MISSION PLACE. . 10
F. WEBCOR’s Contract Does Not Require It to Defend MISSION PLACE,

even had WEBCOR Assigned that Obligation to MISSION PLACE. ........00: 11
G. MISSION PLACE Lacks Standing to Assert Defense Fees .......ccccseneeneeed 2

CONCLUSION

“ie

WEBCOR'S SUPPLEMENTAL MEMORANDUM OF POINTS & AUTHORITIES IN OPPOSITION TO
MISSION PLACE’S MOTION FOR SUMMARY ADJUDICATIONGordon & Rees LLP
275 Battery Street, Suite 2000

San Francisco, CA 941k

TABLE OF AUTHORITIES

Page
Cases
ALU Ins. Co. v. Superior Court
(1990) $1 Cal.3d 807. 6
Bramalea v., Reliable Interiors, Inc,
(2004) 119 Cal.App.4th 472... 12

CIGA v. Workers’ Compensation Appeals Board et al.
(2012) 203 Cal.App.4th 1328

Garcia v. Truck Ins. Exchange
(1984) 36 Cal.3d 426 ..

Pistone v. Superior Court

(1991) 228 Cal. App.3d 672 ccc cccecccussssnsstssssnseseacesensioetnnseeeaeeuneineeeiaetiisseieenntiee ea

Rancho Santa Se Pharmacy, Inc. v. Seyfert
(1990) 219 Cal.App.3d 875

Shaw v, The Regents of the University of California)
(1997) 58 Cal. App. 4th 44

Star Pacific Investments, Inc. v. Oro Hills Ranch Inc.
(1981) 121 Cal App.3d 447 oc ceeessteeteceeeee

Walter E. Heller Western, Inc. v. Tecrim Corp.
(1987) 196 Cal. App. 3d 149

Winet v. Price
(1992) 4 Cal. App. 4th 1159

Statutes

Civ. Code § 1353
Civ, Code § 1580 oo. eeccsssessssccressscssssssssssnseserssecstecensernessesanecsnssaressnees
Civ. Code § 1615
Civ. Code § 1636
Civ. Code § 1638...
Civ. Code § 1639
Civ, Code § 1649
Civ. Code § 1654

Civ. Code §1550(4).

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WEBCOR'S SUPPLEMENTAL MEMORANDUM OF POINTS & AUTHORITIES IN OPPOSITION TO
MISSION PLACE’S MOTION FOR SUMMARY ADJUDICATIONGordou & Rees LLP
275 Battery Street, Suite 2000

San Francisco, CA 94111

Civ, Code §1605 ..

Civ. Code §1614

Code Civ. Proc., § 1856(g)

Code Civ. Proc., § 437e(f).
Treatises

Rest. 2d Contracts, § 317(d) ........

iti

WEBCOR’S SUPPLEMENTAL MEMORANDUM OF POINTS & AUTHORITIES IN OPPOSITION TO
MISSION PLACE’S MOTION FOR SUMMARY ADJUDICATIONGordon & Rees LLP
275 Battery Street, Suite 2000

San Francisco, CA 94111

an wb

WEBCOR CONSTRUCTION, INC.; WEBCOR BUILDERS, INC; WEBCOR
CONSTRUCTION, INC. dba WEBCOR BUILDERS on its own behalf and erroneously sued as
WEBCOR CONSTRUCTION LP dba WEBCOR BUILDERS (“WEBCOR”) submit the
following Supplemental Memorandum of Points and Authorities in support of their opposition to
Motion for Summary Adjudication by 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 (collectively, “MISSION PLACE”). WEBCOR continues to assert all of its
arguments presented in its original memorandum of points and authorities in support of its
opposition to MISSION PLACE’s motion with the exception of its first argument relating to the
premature filing of the motion in the first instance and the need for additional discovery. All
references within WEBCOR’s papers to MISSION PLACE’s Motion for Summary Adjudication
refers to both its original motion and supplemental papers, unless otherwise stated.

L INTRODUCTION AND PROCEDURAL BACKGROUND

A. Brief Factual Background.
This lawsuit was initiated by Plaintiff BEACON RESIDENTIAL COMMUNITY

ASSOCIATION (“BRCA”) against, inter alia, THIRD AND KING INVESTORS, LLC (“TKI”)
that originally developed and owned the Project, which is defined as the property located at 250
and 260 King Street, San Francisco, CA, with 595 condominium units and commercial spaces.
(Supplemental Statement of Additional Undisputed Facts No. “SSUF” NO. 1.) MISSION
PLACE purchased the Project from TKI and then sold the residential units as condominiums to
individuals. (SSUF No. 2.) Plaintiff alleges on behalf of itself, individual homeowners and the
Commercial Association in its Third Amended Complaint, a number of claims, including claims
for construction defects and concealment against MISSION PLACE and others. (SSUF No. 3.)

B. Procedural Background,

In 2011, MISSION PLACE filed their Motion for Summary Adjudication against

WEBCOR (the general contractor) and HKS, INC., one of the architectural firms for the Project.

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WEBCOR’S SUPPLEMENTAL MEMORANDUM OF POINTS & AUTHORITIES IN OPPOSITION TO
MISSION PLACE’S MOTION FOR SUMMARY ADJUDICATIONGordon & Rees LLP
275 Battery Street, Suite 2000

San Francisco, CA 94111

(SSUF No. 4,)' The motion requests that the Court grant summary adjudication as to MISSION
PLACE’s Seventh Cause of Action for Declaratory Relief based upon MISSION PLACE’s
incorrect assertion that WEBCOR is contractually obligated to defend MISSION PLACE for the
claims asserted by the Plaintiff. (SSUF No. 6.) The motion was heard on or about March 3,
2011, whereat the Court granted Webcor’s request to continue the hearing until further discovery
occurred. (SSUF No. 7.) Since that time, a number of relevant depositions have occurred.
(SSUF No. 8.)

The newly obtained evidence only bolsters WEBCOR’s position that it owes no
contractual duty to defend MISSION PLACE. Specifically, (1) the clear and concise language of,
the four-corners of the purported assignments, both the Assignment of Contractor Agreement
between TKI and MISSION PLACE (“Assignment of Contractor Agreement”) and the Consent
and Agreement between MISSION PLACE and WEBCOR (‘Consent and Agreement”)
demonstrate that WEBCOR did not assign its indemnity and defense obligations pursuant to the
indemnification provision in its construction contract with TKI to MISSION PLACE, but merely
assigned MISSION PLACE all of the guarantees and warranties for the Project; (2) Provided
parol evidence is considered by the Court, the parol evidence raises a triable issue of fact, and (3)
the purported assignment is invalid for lack of consideration.

Even if the Court were to accept MISSION PLACE’s misplaced argument that
WEBCOR assigned its defense obligation to it, WEBCOR does not owe any duty to defend or
indemnify MISSION PLACE under the terms of the WEBCOR Contract since (1) WEBCOR’s
definition of “Indemnified Parties” does not include “assigns” or “successors,” (2) MISSION
PLACE carries its own insurance that is covering this claim thus obviating WEBCOR’s duty to
defend, and (3) MISSION PLACE has no standing to assert its claim for defense costs.

Th LEGAL ARGUMENT

A. Standard for Summary Adjudication.

A summary adjudication motion is subject to the same rules and procedures as a

" After the original filing of the Motion for Summary Adjudication, Plaintiff filed its Third Amended Complaint.
(*SSUF No. 5.)
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WEBCOR’S SUPPLEMENTAL MEMORANDUM OF POINTS & AUTHORITIES IN OPPOSITION TO

MISSION PLACE’S MOTION FOR SUMMARY. ADJUDICATIONGordon & Rees LLP
2175 Battery Street, Suite 2000

San Francisco, CA 94111

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summary judgment motion. (Code Civ. Proc., § 437c(f).) The court in its determination of the
merits of the motion adheres to a three-step process to: “(1) identify the issues framed by the
pleadings and thus placed at issue by the motion; (2) determine whether the moving party's
showing negated the opponent's claims; and (3) determine whether the opposing party
demonstrated the existence of triable issues of fact. .. . [Citation omitted]. [The Court’s]
function is merely to determine whether issues of fact exist, not to decide them. [The Court}
strictly construe{s] the moving party's affidavits and liberally construes those of the opponent,
resolving in the opponent's favor any doubts as to the propriety of granting the motion.” (Pistone
v, Superior Court (1991) 228 Cal.App.3d 672, 678-679, rev. denied (Cal. June 27, 1991).)
Simply stated, in order to prevail on its motion, MISSION PLACE must prove by
undisputed supported evidence each and every element of its Seventh Cause of Action for
Declaratory Relief as it relates to defense costs, which is the basis of its motion.2, MISSION

PLACE cannot meet that requirement.

B. The Purported Assignments On their Faces Do Not Assign Indemnity or
Defense Obligations to MISSION PLACE.

To determine whether an assignment has been made, the intention of the parties as stated
in the document is controlling. (CIGA v. Workers' Compensation Appeals Board et al. (2012)
203 Cal.App.4th 1328, 1335)(“C/GA”). Civil Code section 1636 provides that “[a] contract must
be so interpreted as to give effect to the mutual intention of the parties as it existed at the time of
contracting, so far as the same is ascertainable and lawful.” To determine that mutual intent,
“(t]he language of a contract is to govern its interpretation, if the language is clear and explicit,
and does not involve an absurdity.” (Civil Code § 1638.) “When a contract is reduced to
writing, the intention of the parties is to be ascertained from the writing alone, if possible
however, subject to the other provisions of [Title 3 of the Civil Code, Interpretation of
Contracts}.” (Civil Code § 1639.) The “intention of the parties” means the expressed intent, that

is the “objective” intent as evidenced by the words of the instrument, not a party's subjective

2 The declaratory relief cause of action arises out of MISSION PLACE’s express indemnity theory, as such,
MISSION PLACE needs to prove the existence of an expressed indemnity provision with WEBCOR as the
indemnitor.

3.

WEBCOR’S SUPPLEMENTAL MEMORANDUM OF POINTS & AUTHORITIES IN OPPOSITION TO
MISSION PLACE’S MOTION FOR SUMMARY ADJUDICATIONGordon & Rees LLP
275 Battery Street, Suite 2000

San Francisce, CA 94111

intent.” (Shaw v. The Regents of the University of California) (1997) 58 Cal. App. 4th 44, 54-55,
rev. denied (Cal. Dec. 23, 1997).)

The intention of the parties is expressly stated in the Assignment of Contractor
Agreement between TKI and MISSION PLACE, and in the Consent and Agreement between
MISSION PLACE and WEBCOR.

The Consent and Agreement states in relevant part:

Contractor [Webcor] represents to Mission Place that (1) the
Contract is in full force and effect ... , and (xii) Contractor has
heretofore assigned to Owner all guaranties and warranties relating
to the Project.

(SSUF No. 9.)

This statement is the done expression as to what specific obligations under its contract,
WEBCOR was agreeing to assign to MISSION PLACE. Nowhere does the Consent and
Agreement state that WEBCOR is assigning its indemnity and defense obligations to MISSION.
In fact, there is no mention of the terms “indemnity” or “defense” or any such related terms in
the Consent and Agreement.

MISSION PLACE completely ignores the precise and unambiguous language of the Consent and
Agreement in its Supplemental Memorandum of Points and Authorities (“SSMPA”), praying that
the Court merely look to the Assignment of Contractor Agreement between TKI and MISSION
PLACE to find that an assignment of the defense obligations may exist. MISSION PLACE’s
argument is misplaced. The Court must examine the entirety of the assignment documents,
inclusive of the Consent and Agreement, in order to determine the express meaning.

Even if this Court were to read the Assignment of Contractor Agreement between TKI
and MISSION PLACE in a vacuum, it cannot be read by its expressed language that WEBCOR
agreed to assign its defense obligations to MISSION PLACE. The relevant portions of the

Assignment of Contractor Agreement are:

FOR VALUE received [TKI] ... hereby assigns to MISSION

PLACE, LLC, ...on a non-exclusive basis (with a reservation of

all rights), “AS IS” and without warranty, except as expressly

provided in that certain Mission Bay North Agreement of Purchase

and Sale ... by and between {TKI] and Mission Place ..., all of its
he

WEBCOR’'S SUPPLEMENTAL MEMORANDUM OF POINTS & AUTHORITIES IN OPPOSITION TO
MISSION PLACE’S MOTION FOR SUMMARY ADIUDICATIONGordon & Rees LLP
275 Battery Street, Suite 2000

San Francisco, CA 941141

right, title and interest in and to (a) that certain Construction
Agreement dated August 24, 2001 by and between [TKI] and
[WEBCOR]}, together with any and all amendments thereto
(collectively the “Contract”) relating to the construction of the
Property, ... and (b) all warranties made by Contractor for the
benefit of Company and/or Owner under the Contract, including,
without limitation, those warranties described in Section 2.4 of the
General Conditions of the Contract, and those subcontractor
warranties described in Exhibit I of the Contract; provided,
however, that [TKI] does not assign to [MISSION PLACE], and
[MISSION PLACE] does not assume from [TKI], any of the
obligations or liabilities of [TKI] ..., it being the intention of the
parties hereto that only the rights and benefits under the Contract
(inctuding, without limitation, all warranties thereunder) be
assigned to [MISSION PLACE] on a non-exclusive basis (i.e.
[TKI] retains all rights and benefits under the Contract)... .

(Emphasis added.) (SSUF No. 10.)

The expressed terms of the Assignment of Contractor Agreement state that TKI both
assigns, AND retains all of its rights and benefits to the WEBCOR contract. This expression is a
nonsensical. One cannot assign rights that one is also keeping.

“An assignment of a right is a manifestation of the assignor’s intention to transfer it by
virtue of which the assignor’s right to performance by the obligor is extinguished in whole or in
part and the assignee acquires a right to such performance.” (CIGA, supra., 203 Cal.App.4th
1328 at 1337, quoting Rest. 2d Contracts, § 317(d).) Accordingly, for the Assignment of
Contractor Agreement to be an actual assignment, TKI had to have transferred a right to
MISSION PLACE while at the same time, relinquishing that same right.. (See C/GA,
supra.{where the court determined that the medical group’s agreement with a collection agency,
despite using the terms “assign” and “reassign” in their instruments did not effectuate an
assignment to the collection agency since the medical group retained ownership of the legal title
in the assets.) Based upon the foregoing, there cannot be an “assignment” by TKI of “all rights,
title and interest” in the WEBCOR contract to MISSION PLACE with TKI still “retaining all
rights and benefits under the Contract.” On its face, such is not an assignment, and creates the
very “absurdity”. addressed in Civil Code §1638. “Words in a contract which are wholly
inconsistent with its nature, . . . are to be rejected.” (Civil Code § 1353.)

The Consent and Agreement between WEBCOR and MISSION PLACE wherein it states

<5.

WEBCOR’S SUPPLEMENTAL MEMORANDUM OF POINTS & AUTHORITIES IN OPPOSITION TO

MISSION PLACE’S MOTION FOR SUMMARY ADJUDICATIONGordon & Kees LLP
275 Battery Street, Suite 2000

San Francisco, CA 94111

that WEBCOR “heretofore assigned to [MISSION PLACE] guarantees and warranties relating to
the Project,” is al! that John Bowles of WEBCOR (the promiser) believed was being assigned.
(SSUF No. 9.) Where there is an ambiguity, it is resolved by interpreting the ambiguous
provisions in the sense the promisor, (in this instance WEBCOR), believed the promisee
(MISSION PLACE) understood them at the time the agreement was formed. (Civil Code

§ 1649.) Should this edict not obviate the ambiguity, the ambiguous language is construed
against the party who caused the uncertainty to exist. (Civil Code § 1654; AZU Ins. Co. v.
Superior Court (1990) 51 Cal.3d 807, 821-822.)

John Bowles, the signatory for WEBCOR on the Consent and Agreement, believed that
by signing the document, WEBCOR was assigning warranties and guarantees to MISSION
PLACE, and that MISSION understood that, since the only reference to what specific rights were] -
actually being assigned stated that warranties and guarantees were being assigned. (SSUF No.
11.) WEBCOR did not draft either of the Consent and Agreement or the Assignment of
Contractor Agreement. (SSUF No. 12.) Representatives of TKI and/or a Mission Place-related
entity drafted both the Consent and Agreement and Assignment of Contractor Agreement.
(SSUF No. 13.) Had said representatives intended to “assign” or obtain rights beyond those
specifically referenced in the Consent and Agreement, they needed to do so expressly and
unambiguously, which they failed to do.

Based upon the foregoing, by the very definition of what an assignment is (see C/GA,
supra., 203 Cal.App.4th at 1337, quoting Rest. 2d Contracts, § 317(d).), the only feasible and
rational reading of both the Assignment of Contractor Agreement and Consent and Agreement is
that WEBCOR only assigned the guarantees and warranties to MISSION PLACE. Otherwise,
the purported “assignment” creates an “absurdity.” (See Civil Code §1638, supra)

c. Parole Evidence Raises a Triable Issue of Fact; Therefore the Motion for
Summary Adjudication Must Be Denied.

Should this Court determine that a reading of the two assignment documents raises an
ambiguity for any reason, including in light of the fact that the Assignment of Contractor

Agreement states that TK] both assigns AND retains all rights under the WEBCOR contract, the
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WEBCOR'S SUPPLEMENTAL MEMORANDUM OF POINTS & AUTHORITIES IN OPPOSITION TO
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extrinsic evidence raises a triable issue of fact, and the Motion must be denied.

Parol evidence may properly be considered as “other evidence of the circumstances under
which the agreement was made or to which it relates, . . . or to explain an extrinsic ambiguity or
otherwise interpret the terms of the agreement, . . .” (Code Civ. Proc., § 1856(g); Garcia v.
Truck Ins. Exchange (1984) 36 Cal.3d 426, 435.) “In such cases, the court engages in a two-step
process: “First, the court provisionally receives (without actually admitting) all credible evidence
concerning the parties' intentions to determine ‘ambiguity,’ i-e., whether the language is
‘reasonably susceptible’ to the interpretation urged by a party. If in light of the extrinsic evidence
the court decides the language is ‘reasonably susceptible’ to the interpretation urged, the extrinsic
evidence is then admitted to aid in the second step--interpreting the contract. [Citation.]" (Winer
v. Price (1992) 4 Cal. App. 4th 1159, 1165.) The trial court’s determination of whether an
ambiguity exists is a question of law. (/d.) The trial court's resolution of an ambiguity is also a
question of law if no parol evidence is admitted or if the parol evidence is not in conflict.
However, where the parol evidence is in conflict, the trial court's resolution of that conflict
is a question of fact . . . (Jd. at p. 1166.) "When two equally plausible interpretations of the
language of a contract may be made . . . parol evidence is admissible to aid in interpreting the *
agreement, thereby presenting a question of fact which precludes summary judgment if the
evidence is contradictory." (Walter E. Heller Western, Inc. v. Tecrim Corp. (1987) 196 Cal.
App. 3d 149, 158.)

Here, the issue for this Court to determine is whether or not the purported assignment
instruments are ambiguous, specifically, is it clear from said instruments what possible rights and
benefits of the WEBCOR contract TKI was assigning to MISSION PLACE if at the same time it
was retaining the exact same (“all”) rights and benefits, as stated in the Assignment of Contractor
Agreement, setting aside for this limited purpose, that keeping and assigning the same rights is
contrary to the definition of an assignment. Once the Court determines that (1) the assignment of
“all” rights, and retention of the same rights makes no sense; (2) that there is no clear intent
demonstrated in the documents that TK] was assigning WEBCOR’s indemnity obligation to

MISSION PLACE, and/or (3) that the Assignment of Contractor Agreement has competing and
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WEBCOR’'S SUPPLEMENTAL MEMORANDUM OF POINTS & AUTHORITIES IN OPPOSITION TO
MISSION PLACE’S MOTION FOR SUMMARY ADJUDICATIONGordon & Rees LLP
275 Battery Street, Suite 2000

San Francisco, CA 94)11

differing language related to the scope of WEBCOR’s assignment than that which was stated in
the Consent and Agreement, it must determine if the parol evidence is in conflict, and if so, the
motion must be denied.

‘The evidence overwhelmingly supports that WEBCOR, and MISSION PLACE in
conjunction with TKI, have opposing and radically different beliefs as to the scope of the
purported assignment. WEBCOR’s belief and intent was that it was consenting to an assignment
of just the guaranties and warranties, and transferring warranties,, not all of its rights and
obligations under the contract, (SSUF No. 14.) On the other hand, MISSION PLACE and TKI
testified that they understood that not only was WEBCOR’s indemnity obligation remaining with
TKI but it was also being assigned to MISSION PLACE so that WEBCOR was then obligated to
indemnify both of them. (SSUF. Nos. 15-16.) None of the parties to the assignment documents
informed each other of their respective remarkably different interpretation of the documents.
(SSUF Nos. 17, 18 and 19.) As such, there was clearly no “meeting of the minds, “ a basic
requirement for the validity of a contract. (See Civil Code § 1580)

dD. The Assignment Is Inyalid for Want of Consideration.

For a contract to be valid there must be consideration. It is a basic tenet of contract law
that for a contract to be valid there must be consideration. (Civ. Code §1550(4).) While a
written instrument is presumptive evidence of consideration, the opposing party may overcome
that presumption. (Civil Code §§1614, 1615.) Good consideration is defined by the Civil Code,
which states “[a]ny benefit conferred, or agreed to be conferred, upon the promisor, by any other
person, to which the promisor is not lawfully entitled, or any prejudice suffered, or agreed to be
suffered, by such person, other than such as he is at the time of consent lawfully bound to suffer,
as an inducement to the promisor, is good consideration for a promise.” (Civil Code §1605.)
The presumption of consideration is eradicated where the opposing party produces “some
quantum of evidence casting doubt on the truth of the presumed fact.” (Rancho Santa Se
Pharmacy, Inc, v. Seyfert (1990) 219 Cal.App.3d 875, 882.)

In Star Pacific Investments, Inc. v. Oro Hills Ranch Ine. (1981) 121 Cal.App.3d 447, the

court found that despite the existence of a written sales agreement and a signed and agreed to
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WEBCOR’S SUPPLEMENTAL MEMORANDUM OF POINTS & AUTHORITIES IN OPPOSITION TO
MISSION PLACE’S MOTION FOR SUMMARY ADJUDICATIONGordon & Rees LLP
2175 Battery Street, Suite 2000

San Francisca, CA 94111

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assignment of the option agreement, no consideration existed for the assignment of the option
agreement. The opposing party, the Hunters, who agreed in writing to pay Star Pacific $43 per
acre under the option did so under the mistaken belief that the assignee had an interest in the sold
property. Since Star Pacific did not have any actual interest in the land being sold, there was no
benefit conferred upon the Hunters for entering into any agreement to pay Star Pacific for any
land being seld. (/d.. at 456.)

Like the Hunters in Star Pacific, WEBCOR received no consideration for the alleged
assignment of indemnity and defense obligations, and therefore the alleged assignments are null,
void, and unenforceable. It is MISSION PLACE’s position that the “assignment” obligates
WEBCOR to indemnify and defend both MISSION PLACE and TKI. Obviously, such an
obligation subjects WEBCOR to at least a doubling of its indemnification obligations and
potentially in excess of a two-fold increase in risk. WEBCOR had agreed in its contract to
defend TKI “except to the extent covered or compensated by insurance.” (SSUF No. 20.)
Pursuant to this provision, Since TK] and WEBCOR were both insured under the same wrap
(“OCIP”) insurance policy,, . (SSUF No. 21.) the risk of having to pay for a defense was rather
slight However, the risk to WEBCOR if it agreed to defend MISSION PLACE, which was not
enrolled in the wrap policy (SSUF No. 22.) , was significant.

Absolutely no consideration was provided to WEBCOR for such a significant increase in
financial risk. WEBCOR had completed the construction of the Project at the time of the
assignment, and nothing was due and owing under the contract. (SSUF No. 23.) MISSION
PLACE paid no consideration to WEBCOR in exchange for the assignment, and there is no
evidence that TKI did either. (SSUF No. 24.) Mr. Bowles of WEBCOR’s understanding also
supports the lack of consideration. (SSUF No. 25.)

Since there is no evidence that supports a finding that WEBCOR benefited from the
alleged addition of MISSION PLACE as an indemnified party while WEBCOR stil} retained its

obligation to indemnify TKI, no valid assignment exists, for want of consideration.

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WEBCOR'S SUPPLEMENTAL MEMORANDUM OF POINTS & AUTHORITIES IN OPPOSITION TO
MISSION PLACE’S MOTION FOR SUMMARY ADJUDICATIONGordon & Rees LLP
275 Battery Street, Suite 2000
San Francisco, CA 94112

E. WEBCOR’S Contract Does Net Require It to Provide Indemnity or a
Defense to MISSION PLACE,

As argued in WEBCOR’s Points and Authorities in Opposition to MISSION PLACE’S
original Memorandum of Points and Authorities, Article XI, Paragraph 11.1 of the General
Conditions provides that “{WEBCOR] shall indemnify, defend and hold Company, and all
subsidiary and affiliated entities . . . (collectively, the ‘Indemnified Parties’. . . ) from and
against. ..”” (SSUF No. 26.) Neither Assigns nor successors were included in the definition of
the term “Indemnified Parties.” (/bid.) Rather, the definition of “Indemnified Parties” is clearly
elucidated. MISSION PLACE was not substituted as the “Company” for all rights under the
WEBCOR Contract by way of the assignment documents.

MISSION PLACE argues that the assignment documents substitute MISSION PLACE as
the “Company” or “Owner” for TKI in the WEBCOR contract, thus making MISSION PLACE
“step in the shoes” of TKI for all beneficiary purposes of the WEBCOR contract. A simple read
of the assignment documents does not support this contention, Nowhere in either the Consent
and Agreement or the Assignment of Contractor Agreement does it state that that MISSION
PLACE is the “Company” or “Owner” except as relates to ownership of project documents.
(SSUF No. 27.) The Consent and Agreement between WEBCOR and TK] is the only document
which defines MISSION PLACE as the successor Owner and/or Company (as defined in the
WEBCOR contract) merely for purposes of transferring ownership of the Project Documents.
(SSUF No. 28.) The Consent and Agreement in subsection (xi) states “from and after the date of
the Assignment of Contractor Agreement, all Project Documents shall be the property of Mission
Place (as successor Owner (as defined in the Contract) and or Company (as defined under the
Contract.)” (SSUF No. 29.) It thereby limits the substitution of the MISSION PLACE entity for
the Owner and/or Company in the WEBCOR contract as those terms relate to ownership of the
Project Documents. It must be noted that MISSION PLACE’s unscrupulous statement in its
SMPA that John Bowles, the in-house counse! for WEBCOR, “acknowledged that Mission Place
LLC was TK!’s successor ‘company”” is an inaccurate and scurrilous portrayal of Mr. Bowles’

testimony. (MISSION PLACE’S SMPA at p. 7:12-13.) Mr. Bowles clearly testified that
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WEBCOR’S SUPPLEMENTAL MEMORANDUM OF POINTS & AUTHORITIES IN OPPOSITION TO
MISSION PLACE’S MOTION FOR SUMMARY ADJUDICATIONGordon & Rees LLP
275 Battery Street, Suite 2000

San Francisco, CA 94111

MISSION PLACE was the successor “Company” for the purpose of transferring ownership of
the Project Documents. (SSUF. No. 30.) While Mr. Bowles also testified that he understood
that guarantees and warranties under the Contract were being transferred to Mission Place, he
DID NOT acknowiedge that Mission Place LLC was TKI’s successor “Company”: ” (as defined
in the WEBCOR Contract) for all purposes. (SSUF. No. 31) His testimony is entirely consistent
with the clear and unambiguous language of the documents. However, should the Court
entertain extrinsic evidence that is contrary in nature, a triable issue of fact exists as to the intent

of the parties.

F, WEBCOR's Contract Does Not Require It to Defend MISSION PLACE,
even had WEBCOR Assigned that Obligation to MISSION PLACE.

Provided MISSION PLACE succeeds in surmounting all of the numerous legal and
factual obstacles stated in WEBCOR’s opposition, WEBCOR still owes no duty of defense to
MISSION PLACE.

The WEBCOR contract, Article X1, paragraph 11.2 of the General Conditions of the
Contract states in relevant part: “Contractor [WEBCOR] shall, except to the extent covered or
compensated by insurance: (a) at Contractor's own cost, expense and risk, defend in a manner
and with counsel acceptable to the Indemnified Parties, all suits, ... on account of any matter
indemnified against pursuant to Section 11.1.” (Emphasis added.) (SSUF No. 31.)

MISSION PLACE’s defense is being paid for by insurance carried by MISSION PLACE.
(SSUF No. 33.) While it has also retained and has been paying for a second set of attorneys, its
personal counsel, that is a personal choice which burden should not be borne by WEBCOR .
MISSION PLACE is being completely defended for this lawsuit. First, there are no supporting
facts evidencing that any portion of its defense costs stemming from this action, outside of the
duplicative effort of personal counsel, is not being paid for by MISSION PLACE’s insurance
carrier(s). Second, MISSION PLACE is currently in a coverage dispute with its insurer in an
attempt to require its insurer to cover the costs of its personal counsel. (SSUF No. 34.)

Mt

it

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WEBCOR’S SUPPLEMENTAL MEMORANDUM OF POINTS & AUTHORITIES IN OPPOSITION TO
MISSION PLACE’S MOTION FOR SUMMARY ADJUDICATIONGordon & Rees LLP

275 Battery Street, Suite 2000
San Francisco, CA 94111
ze

28

AMUBL0683757131708750.1

Since MISSION PLACE’s defense costs are being paid for by its insurance carrier,
WEBCOR, even if it had assigned the benefits of its contract to MISSION PLACE, owes no duty
to pay MISSION PLACE’s defense fees.

G. MISSION PLACE Lacks Standing to Assert Defense Fees

WEBCOR argued in its original opposition to MISSION PLACE’S Motion that
MISSION PLACE has no standing to assert a claim for attorney’s fees since that right lies with
the injured party, its insurance carriers. (Bramalea v. Reliable Interiors, Inc. (2004) 119
Cal.App.4th 472-473). To date, MISSION PLACE has not provided the parties with an
assignment of its defense costs from any of its carriers. (SSUF No. 35.)

Ii. CONCLUSION

The summary judgment statute is drastic and its purpose is not to provide a substitute for
existing methods in the trial of issues of fact. While WEBCOR believes that the express intent
of the assignment documents at issue state unambiguously that WEBCOR was only assigning the
warranties and guarantees, and transferring the ownership of project documents to MISSION
PLACE, should the Court determine otherwise, the Court must deny MISSION PLACE’s motion
based upon the multitude of triable issues of fact. In the unlikely event that the Court rules in
MISSION PLACE’s favor, the ruling must be limited to a simple determination that MISSION
PLACE was assigned the rights set forth in WEBCOR’S contractual indemnity provision,
without ruling on any actual rights of MISSION PLACE under that provision.

DATED: August 7, 2012

GORDON & REES LLP

HN

By. 4
Greggry T. Hanson
Attorneys for Defendants
WEBCOR CONSTRUCTION,
INC.; WEBCOR BUILDERS, INC,
WEBCOR CONSTRUCTION, INC.
dba WEBCOR BUILDERS on its
own behalf and erroneously sued as
WEBCOR CONSTRUCTION LP
dba WEBCOR BUILDERS

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WEBCOR’S SUPPLEMENTAL MEMORANDUM OF POINTS & AUTHORITIES IN OPPOSITION TO
MISSION PLACE’S MOTION FOR SUMMARY ADJUDICATION