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 Defendant, HKS, INC, individually and dba HKS ARCHITECTS, INC.

ELECTRON ICAULY
FILE

Superjor Court of Califprnia,

Cour ty of San Francisco

SEP 05 2013

Cletk of the Court
BY: VANESSA WU
Deputy Clerk

Sandy M. Kaplan, Esq., SBN 95065
Gregory T. Hanson, Esq., SBN 201395
GORDON & REES, LLP

275 Battery Street, Suite 2000

San Francisco, CA. 94114

Telephone (415) 986-5900

Facsimile (415) 986-80541

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Attomeys for WEBCOR CONSTRUCTION, INC; WEBCOR BUILDERS, INC;
WEBCOR CONSTRUCTION, INC. dba WEBCOR BUILDERS
on its own behalf and erroneously sued as WEBCOR CONSTRUCTION, LP

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dba WEBCOR BUILDERS

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

CASE NO. CGC-08-478453
[Complaint Filed: August 8, 2008] |

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DECLARATION OF NOEL E. MACAULAY IN
SUPPORT OF HKS, INC.,WEBCOR |
CONSTRUCTION, INC. AND WEBCOR
BUILDERS, iNC.’S MOTION FOR
CLARIFICATION AND/OR AMENDMENT,
AND/OR RECONSIDERATION OF i
FORMICONTENT OF ORDER GRANTING
MOTION FOR SUMMARY ADJUDICATION

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Accompanying Documents: 1) Notice of Motion and
Motion for Reconsideration; 2) Memorandum of Points &
Authorities; and 3) Request for Judicial Notice

DATE: October 4, 2013

TIME: 1:30 p.m.
DEPT: 304 '

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DECLARATION OF NOEL E. MACAULAY IN SUPPORT OF HKS, INC. AND WEBCOR’S MOTION FOR CLARIFICATION AND/OR
AMENDMENT AND/OR RECONSIDERATION OF FORM/CONTENT OF ORDER GRANTING MOTION FOR SUMMARY ABJUDICATION
1CONSTRUCTION, 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, i

Defendants. /

|, Noel E. Macaulay, do hereby declare and state as follows:
1. That lam an attorney at law, duly licensed to practice and practicing petore the
courts of the State |
of California, and am a partner at the law firm of Schwartz & Janzen, LLP (hereinafter
“Schwartz & Janzen), counsel for HKS, Inc., individually and dba HKS Architects, Inc.
(hereinafter “HKS”). | am one of the attorneys who has been principally involved in
this litigation on behalf of HKS and the attorney who, in connection with Mission Place,
LLC and certain affiliated entities (hereinafter “MISSION PLACE’)’s Motion for
Summary Adjudication as to HKS and WEBCOR, prepared HKS’ responsive

documents and who attended the hearing and principally argued the same; I have also
been the attorney who, on behalf of HKS, engaged in discussions and negotiations
with counsel for MISSION PLACE in connection with the proposed order. AS such, |
have personal knowledge of al! matters set forth below and if called to testify, ! could

competently do so as follows:

2. This Declaration is submitted in support of the joint HKSAVEBCOR motion for
clarification, amendment and/or reconsideration as to the form and/or contertt of the
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August 19, 2013 order granting MISSION PLACE’S motion for summary adjudication as

to part of its seventh (7"") cause of action. As detailed at length below, the matter was

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DECLARATION OF NOEL E. MACAULAY IN SUPPORT OF HKS, INC. AND WEBCOR’S MOTION FOR CLARIFICATION AND/OR
AMENDMENT ANDIOR RECONSIDERATION OF FORMICONTENT OF ORDER GRANTING MOTION FOR SUMMARY ADJUDICATIONheard on August 24, 2012. Hours of reported oral argument and colloquy by the Court
ensued. During that time, the Court indicated, very clearly, that it could determine some
issues, but not others. In particular, it ruled that it was determining that theré were
defense and/or indemnity clauses in the respective contracts in question, that any
relevant obligations had been properly assigned to MISSION PLACE and that those
assignments had been validly consented to, and that such defense and/or indemnity
obligations, whatever they might (or might not) include now ran to MISSION PLACE,

which had tendered it’s defense and which tenders had been refused. However, as the

Court also noted, at length, it was not adjudicating whether any duty to defend covered
any or all of the claims made, which ones they might be, or whether or not any other
limitation, restriction or defense applied so as to defeat the defense obligation. It then
directed the parties to jointly prepare an order conforming to its rulings on the record.

3. Due to an unfortunate confluence of events, this did not happen, and no order
was executed for nearly one (1) year thereafter. Contrary to what had been stated on
the record, during discussions concerning the order, MISSION PLACE took the position
that its motion had been granted, in its entirety and without qualification of any kind.
Ultimately MISSION PLACE, on the one hand, and HKS and WEBCOR, on the other,
submitted competing orders, buttressed by an ex parte application and an opposing
deciaration, to the Court. At the time, however, the San Francisco County Superior
Court was switching to electronic filing via Lexis/Nexus, and delays of weeks between
the putative “filing” and the Court's actual receipt of what had been “filed”, as well as the
press of other motions in this case, resulted in seriatim delays. This was compounded
by judicial reassignments, which resulted in this case being transferred to a new judge,

and a new caseload being imposed upon Judge Kramer. Thus, it was not until August
of 2013 that the Court informed counsel that both of the earlier variants were being
tejected as too long and that new, shorter form orders ought to be submitted in their

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stead. On August 19, 2013, the Court executed the short form iteration submitted by

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DECLARATION OF NOEL E. MACAULAY IN SUPPORT OF HKS, INC, AND WEBCOR’S MOTION FOR CLARIFICATION AND/OR
AMENDMENT AND/OR RECONSIDERATION OF FORMICONTENT OF ORDER GRANTING MOTION FOR SUMMARY ADJUDICATIONMISSION PLACE, possibly without having received and/or reviewed a subniittal around
that time by HKS and WEBCOR.

4. HKS and WEBCOR urgently request the Court to clarify and/or amend and/or
reconsider its order, because as phrased, which | believe to be fundamentally at odds
with this Court's prior rulings and statements on the record, unsupported in fact and law,
and which would give rise to host of subsequent issues. The problem is simply this.
When the Court ruled on August 24, 2012, it appeared to indicate that it would have to
exercise its equitable powers to restrict the relief obtained by MISSION PLACE, since
otherwise the motion could not be granted as stated in the moving papers. I ai so. It
carefully delineated what could be determined on the record before it, and inat could
not. Whether through the passage of time and the consequent smeunner of
recollection, the failure to receive matters submitted/filed (including transcripts), or some
other cause, what was ultimately signed simply does not conform to what was earlier
ordered by the Court. It arguably contains an unqualified grant of the motion for
summary adjudication (despite limitations stated by MISSION PLACE on the record, but
later abjured by it), incorporates several egregious misstatements of fact, a in its
current form cannot be supported by either the moving papers or the evidence. Not
only this, but such an adjudication would create serious issues at the time of trial. For
example, because there is no separate and independent defense clause in the HKS
contract, the duty to defend extends only what is “embraced within” the duty to
indemnify. The duty to indemnify, however, is one of the issues reserved for trial and
was not the subject of the motion for summary adjudication. Moreover, any duty to
indemnify (and thus any duty to defend) is predicated upon a finding of a prepedent
contractually enumerated factor (i.e. in the case of HKS, either breach of contract or
negligence) — neither of which were addressed by MISSION PLACE in its metion for
summary adjudication (contrast HKS’ expert declaration asserting that such as not

present) — and both of which are still reserved for trial. Any duty to defend by WEBCOR

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DECLARATION OF NOEL E. MACAULAY IN SUPPORT OF HKS, INC. AND WEBCOR'S MOTION FOR CLARIFICATION AND/OR
AMENDMENT ANDIOR RECONSIDERATION OF FORM/CONTENT OF ORDER GRANTING MOTION FOR SUMMARY AQJUDICATIONis further expressly limited by Paragraph 11.2 of the WEBCOR contract, which excludes
items “covered or compensated by insurance”. Thus, not only is the order executed

incompatible with all prior events and statements by the Court and unsupported by the

motion for summary adjudication of issues, which did not address the same,’ but unless
clarified and/or amended, creates substantial and irreconcilable irregularities in future
proceedings. For these and other reasons, | respectfully and urgently request the Court
to clarify the intent and scope of the order, by amendment of the order itself! Further
details are set forth below:
A. The Pleadings

5. The Motion for Summary Adjudication brought by MISSION PLACE was
predicated upon the pleadings and the contracts (inclusive of assignments and
consents to such assignments). Other than in opposition to the motion for summary
adjudication, | do not believe any attempt was made to address issues relating to either
negligence or fault. The principal pleadings before the Court and addressed in the
motion were (a) the First Amended Complaint and (b) the First Amended Cross-
Complaint of Mission Piace [See Request to Take Judicial Notice (“RJN’), No. 4,
(Compendium of Exhibits), items 13 and 14]. As noted during oral argument, the

operative complaints assert that MISSION PLACE {as well as those under assignment
from which it or they took) was/were directly and independently negligent as to and for
each and every one of the allegations against HKS and/or WEBCOR. It further alleged
causes of action and issues specific to the developer defendants, such as conspiracy
to breach fiduciary duties (associated with disclosures and reserves for the
homeowners association) and misrepresentation [See e.g. RUN No. 4, Item 14, MSA
0236 — 0237, 0239-0240]. |

6. MISSION PLACE’S First Amended Cross-Complaint [See e.g. RUN No. 4 item
13, MSA 0177 — 0196] names HKS and WEBCOR in causes of action for Express

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Contractual indemnity, Equitable Indemnity, Contribution, Negligence, “| of

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DECLARATION OF NOEL E. MACAULAY IN SUPPORT OF HKS, INC. AND WEBCOR’S MOTION FOR CLARIFICATION AND/OR

AMENDMENT AND/OR RECONSIDERATION OF FORMICONTENT OF ORDER GRANTING MOTION FOR SUMMARY ADJUDICATIONContract and Declaratory Relief. The Seventh Cause of Action, for Declaratory Relief,
seeks adjudication of three (3) sub-issues — a determination as to respectiva liabilities,
a determination as to the duty to defend, and a determination as to the duty to
indemnify. |
B. The HKS and WEBCOR Contracts
7. The language under which MISSION PLACE sought an order requiring HKS to

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defend it from the plaintiffs claims is Section 7.2 (a) of the Architectural Agreement
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which provides, in pertinent part: |

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Architect shall indemnify and hold harmless Owner and all subsidiary and
affiliated entities of Owner ... and each of their respective members, |
managers, partners, agents, representatives, trustees, directors, officers,
shareholders and employees (collectively, the “Indemnified Parties’ we)
from and against any and all claims, losses, liabilities, damage, liens,
obligations, interests, injuries, penalties, fines, lawsuits or other |
proceedings, judgments and awards ..... including the reasonable cdsts to
the Indemnified Parties of carrying out the terms of any judgment, |
settlement, consent decree, stipulated judgment or other partial or
complete termination of an action or proceeding that requires the
Indemnified Party or Parties to take any action (collectively “Losses”!
arising or resulting from: (i) any misconduct, failure to comply with
any provision of this Agreement, or negligent act, error 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; or (ii)
any unauthorized work performed by Architect. The foregoing |
indemnification shall not apply to the extent that such Losses are
caused by the active, passive, or concurrent negligence or willful
misconduct on the part of any Indemnified Party. |

{Emphasis Added] |
[See RUN, No 2, (Motion for Summary Adjudication (“MSA”), pg. 3; No. 4,
(Compendium), Ex. 4, MSAQ080].

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DECLARATION OF NOEL E. MACAULAY IN SUPPORT OF HKG, INC. AND WEBCOR’S MOTION FOR CLARIFICATION AND/OR

AMENDMENT AND/OR RECONSIDERATION OF FORMICONTENT OF ORDER GRANTING MOTION FOR SUMMARY ADJUDICATION|
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The language under which MISSION PLACE sought an order requiring
WEBCOR to defend it from the plaintiff's claims is Sections 11.1(a) and 11.2 (a) of the

General Contractor Agreement which provides, in pertinent part:

11.1. Indemnification. Contractor shall indemnify, defend and hold
harmless Company, and all subsidiary and affiliated entities of Company...
(collectively the “Indemnified Parties”)... from and against:

(a) Any and all claims, demands ... of whatever kind of natt re,
known or unknown, contingent or otherwise..... arising or
resulting from (i) any misconduct, failure to comply with | any
provision of this Agreement, or negligent act, error or |
omission of Contractor or Contractor's agents....... (ii)
patent or latent defect in the workmanship of any such person
in connection with the Work; (iif) any patent or latent defect in
any materials used in the Work and/or incorporated into the
project, or (iv) any unauthorized work performed by
Contractor. i

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11.2 Defense. Contractor shall, except as to the extent covered or
compensated by insurance: i

(a) At Contractor's own cost, expense and risk, defend in a manner
and with counsel acceptable to the Indemnified Parties, aillsuits,
actions or other legal or administrative proceedings that may be
brought or instituted by any third party.... against any Indemnified
Party , on account of any matter indemnified against pursuant to
Section 11.1, |

[Emphasis Added] |
[See RJN, No 2, (Motion for Summary Adjudication (‘MSA’), pgs. 1 3; No. 4,
(Compendium), Ex. 2, MSA0040 — MSA0041].
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C. MISSION PLACE’S Motion for Summary Adjudication — Duty to Defend

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8. On December 17, 2010, MISSION PLACE filed its motion for summary
adjudication against HKS and WEBCOR, seeking a partial adjudication of its! Seventh
Cause of Action, for Declaratory Relief, solely as to a duty to defend. The isgues

posed in the notice were that each defendant “has a duty to defend [MISSION

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DECLARATION OF NOEL E. MACAULAY IN SUPPORT OF HKS, INC. AND WEBCOR’S MOTION FOR CLARIFICATION AND/OR

AMENDMENT AND/OR RECONSIDERATION OF FORM/CONTENT OF ORDER GRANTING MOTION FOR SUMMARY ADJUDICATION|
PLACE] against the claims asserted by the Beacon RCA [Plaintiff]’ (boiding in the
original, emphasis added) [See e.g. RJN No. 1 (Notice of Motion for Summary
Adjudication), issues 1- 4, at pg. 3 (5-7), (15-17), pg. 4 (1-5), (18-22); No 3 (Separate
Statement of Undisputed Material Facts), pgs. 2 (16-18), 9 (10-12), 15 (2-6) and 23 (7-
12)]. The MSA was simplicity itself, for other than attempting to authenticate the
contracts, the assignments and the consents to the assignments and to establish the
defense was tendered but not assumed, it simply referred the Court to the pleadings
and the contracts themselves. While there were subsequent supplemental points and
authorities and evidence later submitted, in this regard at least, nothing was added that
was the basis for the motion when it was ultimately heard in August of 2012.
D. The HKS and WEBCOR Oppositions
1. HKS
9. When the matter was ultimately heard, HKS had fourteen (14) separate grounds

for its opposition. Of those, the first eight (8) grounds were adjudicated against HKS by

the Court during oral argument, and are not the subject of this motion here. ‘The final
six (6) grounds, however, were apparently acknowledged by the Court as mittens that
unless addressed in its ruling and by careful delineation of what was being granted and
was not, might require denial of the motion [See Section Il E, infra]. These issues were
as follows:
a. The HKS contract contained no separate language requiring it to defend
anyone, only indemnification provisions. As such, any duty to defend , as
a matter of law, only extended to matters “embraced within” the duty to
indemnify. /
b. The indemnity language required that plaintiffs claims “arise ol result
from” the conduct of HKS and causation had not been addressed by
MISSION PLACE, while HKS had submitted a countervailing expert

declaration in that regard.

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DECLARATION OF NOEL E. MACAULAY IN SUPPORT OF HKS, INC. AND WEBCOR'S MOTION FOR CLARIFICATION AND/OR
AMENDMENT AND/OR RECONSIDERATION OF FORM/CONTENT OF ORDER GRANTING MOTION FOR SUMMARY AQJUDICATIONThe indemnity language required that plaintiff's claims “arise or result
from” “misconduct or any negligent act, error or omission”, ora breach of
contract by HKS and such had not been addressed by MISSION PLACE,
while HKS had submitted a countervailing expert declaration in that
regard.

The indemnity language limited any duty to defend by excluding from its
ambit claims occasioned or resulting from the “active, passive or
concurrent negligence” of the indemnified parties or those from whose
assignment they took. The issue was not addressed by MISSION
PLACE, while HKS had submitted a countervailing expert declaration in
that regard. HKS also noted that if the operative pleadings’ allegations of
negligence on the part of HKS were sufficient to trigger a duty to defend,
then the allegations of negligence in the operative pleadings as to
MISSION PLACE and the entities which assigned rights to itthem, under
the same rationale, was sufficient to defeat the same.
That summary adjudication could not be had, where such would not
entirely resolve the Declaratory Relief cause of action, or for that matter,
even the scope of the duty in question. |
That under Bramalea v. Reliable Interiors, Inc. (2004) 119 Cal. App. 4th
468 and a variety of other cases, where an insurer was paying for the

defense, no recoverable damages existed; here, there was evidence
(including deposition testimony) that insurance was paying for jnssion
PLACE’S costs of defense, such that the cause of action could

2. WEBCOR

not stand.

10. WEBCOR also raised numerous separate grounds for opposition, and as with

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HKS, many were rejected during oral argument and are not being revisited here, while

others were apparently treated as valid by the Court and addressed in its rulings during

oral argument. The latter encompass the following:

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DECLARATION OF NOEL E. MACAULAY IN SUPPORT OF HKS, INC. AND WEBCOR’S MOTION FOR CLARIFICATION ANDIOR
AMENDMENT AND/OR RECONSIDERATION OF FORMICONTENT OF ORDER GRANTING MOTION FOR SUMMARY ADJUDICATION
127

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E. Oral Argument and the Court’s Statements At The Time
11. The motion for summary adjudication was heard on August 24, 2012, with
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The indemnity language (which is referencéd within the defense clause
and expressly limits the same) requires that plaintiff's claims “arise or
result from” the conduct of WEBCOR and such had not been addressed
by MISSION PLACE.
The indemnity language (which is referenced within the defense clause

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and expressly limits the same) requires that plaintiff's claims qise or

result from” “misconduct, failure to comply with any provision of this
Agreement, or negligent act, error or omission of Contractor of
Contractor's agents”, “unauthorized” work or “patent or latent defects” in
the work or materials, and that such had not been addressed by
MISSION PLACE, |
That summary adjudication could not be had, where such wou not

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entirely resolve the Declaratory Relief cause of action. i
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That under Bramalea v. Reliable Interiors, Ine. (2004) 119 Cal. App. 4th

468 and a variety of other cases, where an insurer was paying for the
defense, no recoverable damages exist; here, there was evidence
{including deposition testimony) that insurance was paying for MISSION
PLACE’S costs of defense, such that the cause of action could not stand.
That WEBCOR’ s defense clause expressly excludes any obligation to
defend “fo the extent covered or compensated by insurance” and there
was evidence (including deposition testimony) that insurance was paying
for MISSION PLACE’S costs of defense |

nearly three hours of oral argument [See RUN, No. 11A (Transcript), pgs. 1-86]. It was
noted that the motion for summary adjudication sought, on its face and as phrased, a
blanket determination that plaintiffs claims had to be defended by HKS and WEBCOR
[RJN No. 11A (Transcript), pg. 15 (5) — 19 (2)], although MISSION PLACE limited the

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DECLARATION OF NOEL E. MACAULAY IN SUPPORT OF HKS, INC. AND WEBCOR'S MOTION FOR CLARIFICATION AND/OR
AMENDMENT AND/OR RECONSIDERATION OF FORMICONTENT OF ORDER GRANTING MOTION FOR SUMMARY ADJUDICATIONscope of the motion during oral argument [See e.g. RIN No. 11A ( Transcript), pgs. 54
(4-22); 57 (22) — 59 (20), 70 (18-22) and 73 (10) - 75 (13)] (something which is not
reflected in the order and is now denied by it). This limitation - discussed an the
record by the Court and counsel — was an inevitable consequence of (1) the fact that
the scope of any duty to defend was limited by the any defense (WEBCOR) andlor
indemnification language, either expressly or by operation of law.and that there were

numerous restrictions on the obligation to indemnify (HKS and WEBCOR), (2) the

existence of other, differing and separate exceptions [e.g. HKS - does not cover
damages caused by the “active, passive or concurrent negligence” or “wilful
misconduct” of a party to be indemnified (or the assigning party); WEBCOR L exclusion
of any obligation to defend “to the extent covered or compensated by insurance” ], (3)
the existence of other defenses and (4) the fact that none of these issues were touched
upon, let alone established by MISSION PLACE in its Motion for Summary |
Adjudication, while evidence to the contrary had been introduced in the oppositions
[See e.g. RJN No. 11A (Transcript), pgs. 43 (10) — 45 (78), 46 (19) - 50 (19), 51 (1-12);
62 (25) — 70 (22); 73 (10) — 75 (13); 77 (4) — 78 (5), 80 (10-25); 82 (19) - 84/(1)].

12. While the Court initially raised the possibility of analogizing to the duty to
defend in the insurance coverage context (requiring only the potential for coverage), it
later noted that such an analysis was questionable and did not adopt it See e. g. RUN
No. 11A (Transcript), Pas. 21 (12-19), 22 (19) — 24 (2); 63 (21) — 64 (24); 74 (3-6)
Rather the Court, noting its inherent equitable powers and referencing Sir Thomas
Moore [RJN No. 11A (Transcript), pgs. 66 (20) — 67 (24)], repeatedly referenced
narrowing the scope of what was to be determined to the statement of an abstract duty
to defend, expressly reserving any determination of what, if anything, was covered toa
later date [RUN No. 11A (Transcript), pgs. 44 (24) — 45 (7); 57 (22) — 58 (14), 59 (11-
20); 63 (21) — 65 (21), 68 (14-25), 70 (17) -71 (20)]. This is, in the end, exactly what
the Court said it was going to do [RJN No. 11A (Transcript), pgs. 73 (10) - 7 (2); 77
(1) — 78 (5); 80 (10-25), 82 (21) — 84 (1)]. As noted by the Court and on the record, it

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DECLARATION OF NOEL E. MACAULAY IN SUPPORT OF HKS, INC. AND WEBCOR’S MOTION FOR CLARIFICATION AND/OR
AMENDMENT AND/OR RECONSIDERATION OF FORM/CONTENT OF ORDER GRANTING MOTION FOR SUMMARY ADJUDICATIONdetermined that (a) there were valid contracts containing relevant defense and/or
indemnity clauses, (b) that those contracts were validly assigned to Mission Place,
LLC, (c) that the assignments were consented to by HKS and WEBCOR, d) that
MISSION PLACE thus has any rights of defense that the assignors possessed, (e) that
proper tenders had been made, and (f) that those tenders were refused [/d.]| However,
the Court.also noted that it was not (1) granting the motion as prayed for in the moving
Papers, (2) making a determination as to what, if anything was or was not subject toa
duty to defend or (3) ruling on any other defense (e.g. requirement of uncovered
defense costs), limitation or exception raised. None of these carefully enungiated
restrictions are reflected in the order submitted by MISSION PLACE nearly one (1)
year later and now signed by the Court. |

F. Subsequent Events
13.At the hearing, the Court ordered the parties to re-submit their objections to the

evidentiary declarations [See RJN No. 11A (Transcript), pgs. 5 (12) — 8 (6)], ‘and to
meet and confer as to the form of a proposed order, to be submitted jointly [See RJN
No. 11A (Transcript), pgs. 85 (1) — 86 (5)]. The hearing was continued to O¢tober 12,
2012 and MISSION PLACE was directed to prepare a draft order for submission to
counsel. Ultimately, MISSION PLACE submitted its proposed order, and the parties
responded in kind.

14.At the October 12, 2012 hearing, it was agreed to put the matter over until a
further date. Further iterations were exchanged, but matters reached an impasse,
inasmuch as MISSION PLACE insisted that the Court granted its motion in its entirety
and as written, without qualification, and that there was a determination of an
immediate duty to defend the (all) claims asserted by BRCA. MISSION PLACE then
announced its intent to get its version of the proposed order signed via an ex parte
hearing, scheduling the same for hearing on December 14, 2012. HKS then submitted
a Declaration of Noel. E. Macaulay, with exhibits, in opposition to the ex parte

application.

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DECLARATION OF NOEL E. MACAULAY IN SUPPORT OF HKS, INC. AND WEBCOR'S MOTION FOR CLARIFICATION AND/OR .
AMENDMENT AND/OR RECONSIDERATION OF FORM/CONTENT OF ORDER GRANTING MOTION FOR SUMMARY ABIUDICATION15. At or about this time, a variety of issues arose. First, the San Francisco County Superior Court
switched to electronic filing, via Lexis/Nexus, with substantial problems in implementation; something
would be shown as having been “filed” with a copy delivered to Judge Kramer, when, in fact; it was not
actually filed or delivered for weeks thereafter. As a consequence, filings were not being delivered, and
given the press of other matters in this case, was repeatedly continued. Ultimately, both MISSION PLACE
and WEBCOR/HKS prepared alternative orders and jointly submitted them to the Court for its review,
together with a cover letter. To compound matters, a process of judicial reassignment took place, which
Tesulted in the case being transferred from Judge Kramer to Judge Kamow. Between all of these events,
numerous letter submissions were made by MISSION PLACE, but no response was received until August
of 2013, nearly one (1) year after the hearing. At that time, | received a communication (reldyed by
MISSION PLACE) to the effect that the orders were too long, enclosing a sample order (in an insurance
duty to defend case) and asking that they be resubmitted. MISSION PLACE’s counsel inforrhed Mr.
Hanson and that he saw no point on trying to submit a joint order, and submitted his own onder, On
August 12, 2013, and by letter from WEBCOR enclosing a Declaration of Noel E. Macaulay and a
proposed alternative order, HKS and WEBCOR responded [RUN Nos. 10 and 11]. Itis not known if these
documents were ever received and/or reviewed by the Court. On August 19, 2013 the MISSION PLACE
iteration of the order was signed, and the same was served on August 21, 2013.

16. | have prepared a Request to Take Judicial Notice, and attach in conjunction with WEBCOR’s

counsel, true and correct copies of the documents referenced in connection with the same.

| declare under penalty of perjury under the laws of the State of Califomia that the foipgoing is
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true and correct.

Executéd this 3 day of September, 2013, at Los Angeles, California.

EL CAULAY

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DECLARATION OF NOEL E. MACAULAY IN SUPPORT OF HKS, INC. AND WEBCOR’S MOTION FOR CLARIFICATION AND/OR

AMENDMENT AND/OR RECONSIDERATION OF FORM/CONTENT OF ORDER GRANTING MOTION FOR SUMMARY ADJUDICATIONGordon & Rees LLP
275 Battery Street, Suite 2000
San Francisco, CA 94111

1068375/9498167v.1

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PROOF OF SERVICE
Beacon Residential Community Association v. Cateltus Third and King, etal,
San Francisco County Superior Court Case No. CGC-08- 478453

lam a resident of the State of California, over the age of 18 years, and not a party to the
within action. My business address is Gordon & Rees LLP, 275 Battery Street, Suite 2000,
San Francisco, CA 94111, and my email address is rglynn@gordonrees. cont On September 5,
2013, I caused service of the within documents: |
DECLARATION OF NOEL E. MACAULAY IN SUPPORT OF KS, INC.,
WEBCOR CONSTRUCTION, INC. AND WEBCOR BUILDERS, INC.’S
MOTION FOR CLARIFICATION AND/OR AMENDMENT VOR
RECONSIDERATION OF FORM OR ORDER GRANTING MOTION FOR
SUMMARY ADJUDICATION |
i
Kx] by electronic service via File & Serve Xpress transmission to the parties listed on the
File & Serve Xpress Service List for this matter, sent on this date, before 4:00 p.m.

I declare under penalty of perjury under the laws of the State of California that the above

is true and correct.
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Executed on September 5, 2013 at San Francisco, California, :
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PROOF OF SERVICE