Motion-Secondary: BEACON RESIDENTIAL COMMUNITY ASSOCIATION VS. CATELLUS THIRD AND KING LLC et al

• 
• 
• 
• 
• 
• 
• 
• 

						
                                
Preview
                                KATZOFF & RIGGS LLP

1500 PARK AVE,, SUITE 300

EMERYVILLE, CA 94608

{S10) $97-1990

22

23

ANN RANKIN (SBN 83690)
TERRY WILKENS (SBN 118469)
Law Offices of Ann Rankin

3911 Harrison Street

Oakland, CA 94611

Tel.: (510) 653-8886

Fax: (510) 653-8889

KENNETH S. KATZOFF (SBN 103490)
ROBERT R. RIGGS (SBN 107684)
SUNG E. SHIM (SBN 184247)
STEPHEN G. PREONAS (SBN 245334)
Katzoff & Riggs LLP

1500 Park Ave #300

Emeryville, CA 94608

Tel: (510) 597-1990

Fax: (510) 597-0295

Attorneys for Plaintiff BEACON
RESIDENTIAL COMMUNITY
ASSOCIATION

ELECTRONICALLY
FILED

Superior Court of California,
County of San Francisco

MAR 15 2013

Clerk of the Court
BY: WILLIAM TRUPEK
Deputy Clerk

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SAN FRANCISCO
BEACON RESIDENTIAL } Case No. CGC 08-478453
COMMUNITY ASSOCIATION, )
) CLASS ACTION
Plaintiff, )
) REPLY DECLARATION OF ANN
vs. ) RANKIN IN SUPPORT OF
) RENEWED MOTION FOR CLASS
CATELLUS THIRD AND KINGLLC, ) CERTIFICATION
etal., )
} Date: March 22, 2013
Defendants. ) Time: 9:00 a.m.
}  Dept.: 304
)} Judge: Hon. Curtis E.A. Karnow
AND RELATED CROSS-ACTIONS —)
) Trial Date: TBD
)

1.

REPLY DECLARATION OF ANN RANKIN IN SUPPORT OF RENEWED MOTION FOR CLASS
CERTIFICATION(510) 597-1990

KATZOFF & RIGGS LLP
1400 PARK AVE. SUITE 300
EMERYVILLE, CA 94608,

ANN RANKIN declares:

1. I am an attorney duly licensed to practice before all of the courts of the
State of California. I make this declaration of my own personal knowledge, and, if
called as a witness, I could and would testify competently thereto.

2. I am the principal of Law Offices of Ann Rankin. Since March, 2011, my
office and our co-counsel, Katzoff & Riggs, have been counsel of record for Beacon
Residential Community Association in the referenced action. In that capacity, I have
personal knowledge of the communications that have occurred as between the
Association and its counsel during that period.

3. Even prior to March, 2011, I was counsel for Beacon Residential
Community Association starting in 2008, In that capacity, I have personal knowledge of
the communications that occurred as between the Association and its counsel from 2008
to the present.

4. The Association has consistently and regularly briefed its membership, in
writing, of the pendency of this Action, and of the relief that the Association is
requesting on behalf of all of its members herein.

5. Attached as Exhibit A to this Declaration is a true copy of pages 17
through 38 of the certified transcript of proceedings herein before the Hon. Richard A.
Kramer on December 14, 2012, In this portion of the transcript, Judge Kramer
announces his grounds for denying the motion for summary adjudication that was
brought by defendant Mission Place, LLC.

6. Attached as Exhibit B to this Declaration is a true copy of the proposed

-1-

REPLY DECLARATION OF ANN RANKIN EN SUPPORT OF RENEWED MOTION FOR CLASS
CERTIFICATIONKATZOFF & RIGGS LLP

1500 PARK AVE.. SUITE 300

EMERYVILLE, CA 94608

(810) $97-1990

22

23

Order Denying Motion for Summary Adjudication of Mission Place, LLC that has been
approved as to form by counsel for defendant Mission Place, LLC, and submitted to this
Court for entry. No action has yet been taken on this proposed Order, according to the
Court’s docketing records.

7. Attached as Exhibit C to this Declaration is a true copy of the Declaration
of Michael Lefler in Opposition to Motions for Summary Adjudication of Mission
Place, LLC and Catellus, filed herein Nov. 30, 2012.

8. The Court is requested to take judicial notice of Exhibits A, B, and C, as
well as all other papers on file in this Action.

I declare under penalty of perjury under the laws of the State of California that
the foregoing is true and correct.

Executed on March 15, 2013, at Oakland, California.

rod —

-2-

REPLY DECLARATION OF ANN RANKIN IN SUPPORT OF RENEWED MOTION FOR CLASS
CERTIFICATIONEXHIBIT AIN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
IN THE CITY AND COUNTY OF SAN FRANCISCO
BEFORE THE HONORABLE RICHARD A. KRAMER, JUDGE
COMPLEX LITIGATION

DEPARTMENT 304

ne 000n==
BEACON RESIDENTIAL COMMUNITY
ASSOCIATION,
PLAINTIFE,

vs. CASE NO. CGC-08-478453
CATELLUS THIRD AND KING LLC, PAGES 1 - 39
ET AL.,

DEFENDANT.

REPORTER'S TRANSCRIPT OF PROCEEDINGS

FRIDAY, DECEMBER 14, 2012

CALIFORNTA GOVERNMENT CODE SECTION 69955(d):

“Any court, party, or person who has purchased a
transcript may, without paying a further fee to the
reporter, reproduce a copy or portion thereof as an

exhibit pursuant to court order or full, or for internal
use, but SHALL NOT OTHERWISE PROVIDE OR SELL A COPY OR
COPIES TO ANY OTHER PARTY OR PERSON."

REPORTED BY: JULIE L. RALSTON, CSR No. 13604

SF Reporters (415) 948-8289 Page 1APPEARANCES
FOR PLAINTIFF:

COLLINS COLLINS MUIR + STUART LLP
BY: SAMUEL J. MUIR

1100 EL CENTRO STREET

SOUTH PASAENDA, CALIFORNIA 91030

KATZOFPF & RIGGS LLP

BY: ROBERT R. RIGGS, ESQ.
1500 PARK AVENUE, SUITE 300
EVERYVILLE, CALIFORNIA 94608

FOR DEFENDANT SOLUTIA:

BRYAN CAVE LLP

BY: ADAM BREZINE

560 MISSION STREET, 25TH FLOOR
SAN FRANCISCO, CALIFORNIA 94105

FOR DEFENDANT WINDOWS SOLUTIONS:

MCCARTHY & MCCARTHY, LLP
BY: PHILIP T BAZZANO

492 NINTH STREET, SUITE 220
OAKLAND, CALIFORNIA 94607

FOR DEFENDANT MISSION PLACE:

HAIGHT BROWN & BONESTEEL, LLP
BY: STEVEN M. CVITANOVIC

71 STEVENSON STREET, 20TH FLOOR
SAN FRANCISCO, CALIFORNTA 94105

FOR DEFENDANT CATELLUS:

WOOD SMITH HENNING & BERMAN, LLP
BY: DAVID S. WEBSTER

1401 WILLOW PASS ROAD, SUITE 700
CONCORD, CALIFORNIA 94520

FOR DEFENDANT WEBCOR:

GORDON & REES LLP

BY: GREGORY T. HANSON

275 BATTERY STREET, SUITE 2000
SAN FRANCISCO, CALIFORNIA 94111
ALSO PRESENT VIA COURTCALL:
STEVEN H. SCHWARTZ

RANDEL J. CAMPBELL
BRENT F. BASTILICO

SF Reporters (415)

948-8289

Page 2went more to the we'll figure out a way to try to manage
the burden.

THE COURT: i remain confident that nail
pounders -- and if there are any of the principles of
any of the construction people here, I mean that as a
term of endearment, not as a negative term. if you can
figure out how to put buildings up, you can figure out
how to settle these cases. Most of them settle.
Hopefully this will settle in a way that is appropriate
for everybody. If not, then we do around here what we
do, which is not pound nails but pound people. But
we're a long way from there. Ali right. Prepare an
order.

MR. BREAZTNE: Thank you.

MR. BAZZANO: Thank you, Your Honor.

THE COURT: We're going to take a break right
now. Thank you. Don't forget to get a copy of the
objections.

{Recess taken from 10:31 to 11:03 a.m.)

THE COURT: All right. Welcome back. We're
going to take Beacon's motion for the summary
adjudication on the eighth cause of action next.

MR. CVETANOVIC: I think it's actually

Catellus and Mission Place.

THE COURT: Mission Place, all right. IT knew
that. I just wanted to see if you were listening. And
you were listening, so good for you. All right.

Regarding the objections that came in, the

SF Reporters (415) 948-8289 Page 17proposed order on the objections -- and this also
applies to the Catellus motion partly complies with the
California Rule of Court format for the order and partly
does not. It Largely does, but the portion that I'm
talking about is the specification in one single place
as to precisely what is being objected to rather than a
reference to something else. That slowed us down a
little bit. So I don't have the rulings on them yet. I
will probably by the end of today. it has no
significance as to what I'm going to do here.

Just to review quickly the rules on summary
adjudication under Aguilar, the moving party has the
burden of production of sufficient evidence to
demonstrate no issue of material fact as to the matters
that are the object of the motion, and that it is
entitled to judgment as a matter of law. If the moving
party fails to meet that burden of production, the
motion is over. Tn other words, the Court doesn't even
have to read the rest of the stuff. T always do, but
that's the rule.

If the moving party, however, satisfies that
burden of production, then the burden of production then
shifts to the responding party to produce additional
evidence beyond that which the moving party produced, to
demonstrate the existence of an issue of material fact
as to any element regarding the cause of action or other
matter being attacked. If the responding party fails to

do that, then the motion should be granted.

SF Reporters (415) 948-8289 Page 18And if the responding party does produce
sufficient evidence, then the burden of production
shifts back to the moving party to demonstrate that,
notwithstanding the responding party's evidence, there
remains no issue of material fact. Those are the rules.

The Mission Place motion starts with a number
of requests for judicial notice. Exhibits 1 through 7
are various matters that are contained in covenants,
conditions, and restrictions or certificates of
completion or other official filings in connection -- is
something wrong.

MR. CVITANOVIC: Yeah. Sorry to interrupt,
Your Honor. You mentioned Mission Place. I believe
you're referring to the plaintiff, Beacon Residential.

THE COURT: Beacon. Yeah. I'm sorry.

MR. CVETANOVIC: I do it all the time.

THE COURT: Tt doesn't make it right; it just
means both of us screwed things up.

Tt's the opposition to the motions. T can
take judicial notice of the fact that these things
exist, but not, of course, not to the truth of anything
in there. And it doesn't really matter, but my
tentative ruling is to grant the request for judicial
notice.

All right. Regarding Mission Place's motion
first admission place -- submit sufficient evidence to
satisfy its burden of production. The tentative ruling

is that it did, that it submitted evidence of a litany

SF Reporters (415) 948-8289 Page 19of disclosures regarding problems in the units of the
nature set forth in the complaint here.

By way of example, we have the Shine,
S-H-I-N-E, declaration, Exhibit E. I should note, also,
the Mission Place raises the point that a number of the
unit owners did not buy directly from Mission Place;
and, therefore, the argument is, could not have been
affected by failures to disclose. That is not in any
sense material to this motion because there are other
buyers involved in this lawsuit that did buy directly.
And a motion for summary adjudication, unless brought
under Code of Civil Procedure Section 437c(s), the new
section, can't chop up a cause of action. So IT note
that that argument was made. Tt doesn't matter for the
purposes of this motion here.

In any event, the tentative ruling is that the
disclosures made by Mission Place are sufficient to
satisfy its burden of production to shift the burden of
production to the responding party, Plaintiffs. And the
tentative ruling is the plaintiffs have satisfied their
burden of production in that the evidence presented
caises a fact question as to the adequacy of the
disclosures made and whether the problems that are set
forth largely, for example, in the declaration of Shim,
Mr. Shim, S-H-I-M, among other paragraphs, 32, Exhibit
AA, BB, EE, NN, and other evidence, raises a fact
question as to whether the actual problems complained of

in this lawsuit are more severe than what was disclosed.

SF Reporters (415) 948-8289 Page 20it's a fact question.

And, therefore, the plaintiffs have satisfied
its burden of production regarding that fact question,
which shifts the burden of production back to Mission
Place.

And the tentative ruling is that it did not
satisfy its burden of production of further evidence to
show that not withstanding the magnitude of the
complaints set forth in the respondent's evidence does
not satisfy the burden to show that notwithstanding that
evidence there is no issue of material fact.

Anybody want to argue.

MR. CVITANOVIC: I'll take a shot at it, Your
Honor.

THE COURT: Okay.

MR. CVITANOVIC: Steve Cvitanovic for Mission
Place. Thank you for that detail. I'd like to address
a few things.

THE COURT: You sound like you're announcing a
golf match. Is that microphone on? You're usually
right out there.

MR. CVETANOVIC: Maybe. Hopefully I'm not in
Amen Corner here of Augusta National. And hopefully I
wontt turn into Gary MeCord either.

A few things about your tentative ruling, Your
Honor. There were objections to evidence. You brought
those up earlier regarding the e-mails that were

produced by Plaintiff, starting at Exhibits AA through

SF Reporters (415) 948-8289 Page 21NN, I believe. And --

THE COURT: Go ahead.

MR. CVLITANOVIC: The question here, I guess,
preliminarily, is the plaintiff would ask this Court to
take those e-mails and believe them to be true.

THE COURT: No, not at ali. The question is
whether or not this evidence would be admissible, and
there is enough of it that would be admissible, and
whether it raises a fact question. The job of the judge
on @ motion for summary disposition is to not weigh
evidence or figure out if it's true, but rather to
determine whether it is, of course, what we call
substantial evidence, which means of sufficient
substance, so that, if believed, could establish the
point to which it's directed.

But, no, I am not determining whether in fact
the units were a hundred degrees and people couldn't
sleep and all, that kind of stuff, only that there's
enough evidence which, if believed, could result in a
finding that thus raises a facet question. Go ahead.

MR. CVETANOVIC: All right. And next point
I'd like to make, Your Honor, concerns the evidence that
i think is undisputed, that some of these homeowners had
knowledge of the issue going into it. As an example,
the person who prepared the survey for the homeowner
questionnaire -- whatever you want to call it --
documenting the complaints of the residents ended up in

fact buying his unit.

SF Reporters (415) 948-8289 Page 22And in that regard and in regards to other
plaintiffs such as Ghiasi and Lin, ail those people had
lived in their units as tenants before buying them.

They stated that they were aware of the issue so much so
that he circulated the petition that was going to
Catellus that ended up in the hands of Mission Place.
And one of the fundamental factors or essential elements
of proving concealment is that the person who claims to
have a fact concealed from them has to be unaware of it.
And here I believe it's undisputed that several of these
people knew of the issue before they purchased the unit.

And what we have is a situation, Your Honor,
where there are about 265 renters. That is undisputed
as weil. And at the time that Mission Place was
acquiring the project, there were four to six people who
had complained. And we're dealing with separate units,
individual interests. And the attempt here to
broad-brush, to say that every unit has a problem, just
because four or six people out of 265 tenants -- for the
plaintiffs to paint with that broad a brush, I think, is
not the way disclosures work.

And I'd like to read, Your Honor, if I may,
from the Pagano case, which is one of the cases that we
cited in our motion. And the Pagano case involved a
disclosure with respect to a water intrusion problem at
a development. And there was a general disclosure to
the buyer of a water intrusion problem.

The seller denied that the water intrusion

SF Reporters (415) 948-8289 Page 23problem affected his unit. After the buyer moved in,
dry rot was discovered in the unit, and the buyer sued
for fraud.

It was undisputed that the seller disclosed
that some of the units in the development had a water
intrusion problem. And the issue in that case became
whether a further disclosure was required because the
buyer, during discovery, indicated that there were at
least 31 other documents, whether they were homeowner
minutes, newsletters, that showed the extent of the
problem.

And the court of appeal discussed at Pagano,
which is at 60 Cal. App. 4th, page 9, and I'm quoting:

Disclosure of these additional facts would
have served only as an elaboration of the basic
disclosed fact that there was a water intrusion problem
in the development affecting some of the units and
resulting in a lawsuit against the developer.

There is no evidence in the record that at the
time the Paganos purchased the unit, Seller had reason
to believe the problem would affect every unit in the
development. None of the Association's newsletters or
minutes in the record indicates that all or even most of
the 121 units at the Blackhorse development were
directly affected by the water intrusion problem.

And that's, again, from page 9. ‘Then the
Calemine case, which is a 2009 case, adopts the Pagano

approach, finding that the elaboration in that case was

SF Reporters (415) 948-8289 Page 24not required, and specifically pointed out -- I'm now on
Calemine, which is at 171 Cal. App. 4th, 164. And
Calemine is spelled C-A-L-~E-M-I-N-E ~- quote, Here, like
Pagano, appellants were appraised of the water intrusion
problem in the condo and were urged to obtain a physical
inspection.

And I point that language out because our
disclosure disclosed several things. Three among them
are: There's no air conditioning here, number one; some
of the units may become uncomfortably warm in sunny or
hot conditions, number two; and three, buyers should
ensure that prior to purchasing their unit that the unit
window orientation temperature level satisfies their
personal comfort standard.

And here what we have, Your Honor, is a
disclosure that, as a matter of law, places the buyers
on notice that there’s an issue with respect to the
temperature in these units. Tt is the disclosure under
these circumstances was all that was required,
especially when only you have four to six tenants
complaining out of the 265 that are there.

What this does, Your Honor, is it sets up a
slippery slope in these types of situations. Because if
a mere complaint in a condominium project such as this,
where there are 595 units, the mere complaint mentioned
in the elevator lobby that somebody was hot or somebody
thought that the fourth floor was haunted or something

like that, it has to go -- does it have to go into the

SF Reporters (415) 948-8289 Page 25disclosure? I do not believe that's the law. it has to
be a material fact. It is a material fact as a matter
of law that there are four to six complaints cut of 260
kenants at the time,

It's important to also look at one piece of
information as well, and that is in regard to Mr.
Lefler's declaration where he says -- and I'm quoting --
"Because the overheating problem in the units affected
is not constant, it tends to be at its worst during
September and October time frame. Buyers could not
assess the problem if they were buying at other times of
the year."

Now, that’s their own lead expert. And that’s
pretty vanilla, in my opinion, if my opinion counts for
anything in this case. But I'm reading that, and he's
saying that -- is he saying that ten months out of the
year, these units are just fine.

Why do we have to have a hysterical
disclosure, saying that, you know, people should have
paramedics at the wait-and-call because it's over 75
degrees. T mean, there is a fine line between
disclosing information which is of a factual nature
versus disclosing information that's irrelevant and will
basically lead to a situation where you're harming your
own product. And here I would say that, as a matter of
law, Mission Place achieved that balance.

And I'm wrapping up here for a big conclusion.

And I'd like --

SF Reporters (415) 948-8289 Page 26THE COURT: Just getting warm.

MR. CVETANOVIC: Just warming up right now.
it's all tied here, going into the 18th hole, I think,
to continue channeling my golf announcing here.

The plaintiff points out numerous problems
with the disclosure. And they don't go into any detail
about whether Mission Place knew of these problems at
all. And they say that here -- and i'm quoting from
their brief: “The following, without limitation, were
material undisclosed differences between the situation
as depicted in Paragraph 40D and the actual condition as
revealed through" -- wait for it -- "subsequent
investigation. As an example, the statement that buyers
may elect to open their windows does not mention the
problems that exist with noise in excess of allowable
levels nor does it consider the existence of limiters
that prevent the windows from being opened any more than
approximately four inches.

All right. Aside from the fact that there is
a big train station and balipark across the street, most
people knew that it's noisy outside. But there is no
evidence that Mission Place concealed anything along
those lines. And there is no evidence that Mission
Place concealed another contention about the inadequacy
of the disclosure. And that is™ -- and I'm quoting from
their paperwork -- “there is no indication that the lack
of ventilation is so bad that it does not meet the

requirements of the building code." Unquote.

SF Reporters (415) 948-8289 Page 27There is no evidence whatsoever that there was
a concealment of that condition or that Mission Place
even knew of that condition. And I'd go on and on, but
IT won't because our time is limited here and I said I
was wrapping up. But the fundamental issue here, Your
Honor, is when you have 595 units and many, many
tenants, owners, what have you, it cannot be the law in
California where a seller has to disclose every
complaint, even if it's ridiculous. Because that puts
the seller in a bind where they can never keep up with
the complaints.

The seller, all they have to do is to put the
buyers on notice. That's pursuant to the Pagano case
and the Caleman.

And I respectfully suggest and assert that
they did.

Thank you, Your Honor.

THE COURT: Thank you.

MR. RIGGS: May t respond, Your Honor.

THE COURT: Yeah.

MR. CVITANOVIC: No, you may not.

MR. RIGGS: Io guess I can --

THE COURT: We have got two Your Honors in the
same room.

MR. RIGGS: I think the Court's analysis is
correct, but I do need to get into some more details
since that's been brought up by Mr. Cvitanovic.

The paragraph -- this is what is in Mr.

SF Reporters (415) 948-8289 Page 28Shine's declaration. It's buried, in our view, on page

12 of a 25-page disclosure. And it does not say

specifically there is a problem. It does not say
specifically there is a defect. It does not say -- and
I think this is very important -- these units do not

cool off at night.

If one reading this -- and it's a fair reading
of this 40D -- is when it heats up outside, you don't
have air conditioning, you're going to be warm inside.

If that's what the situation in fact was in these units,

we would not be here on this heat gain issue. Because
the heat gain issue -- and this is why we have put a lot
of evidence as to what it really is, not that -- we not

trying to say there was an expert that necessarily did
all of this analysis before. But there were plenty of
complaints that were a lot worse than what 40D says.

But the real situation is these units get hot,
and they stay hot. And they stay 20 or more degrees
above the outside temperature all night. And, true, not
ail the units are the same. There are some that are
hardly affected by the problem. But there are others
that are very severely affected. And in a condominium
project, of course, all of the owners own a tendency in
common in all of common areas. So they all own a piece
of this problem even if their particular unit may not be
in the problem hot zones.

It's similar to if there was a water leak that

affects just the very top floor. The ones on the first

SF Reporters (415) 948-8289 Page 29floor can't say, “Well, that's not my problem." it is
their problem because they own part of the common area
of this condominium project. That's basic law.

The Court's analysis is correct in that we
have presented evidence that, as Mr. Cvitanovic says,
four to six complaints that we've specifically been able
to track down and specifically been able to present to
have the Court -- not just elevator conversation, as Mr.
Cvitanovie is suggesting, but written complaints,
letters from people moving out, saying, "I'm constantly
sick," saying, “This unit was uninhabitable 11 months
out of the year.”

That is not what 40D says, Your unit will be
uninhabitable 11 months out of the year because of this.
And it's way beyond just four to six complaints.

Mission Place knew there was a problem. They actually
had a whole approach to the problem. They put a film on
these windows, as Your Honor knows from the prior
argument we just had.

They knew because they had a consultant who
came in and checked this out. That even with the very
darkest kind of film that they looked at, they were
still getting temperatures in the 80s in these units.
And that was at a time where the outside temperature --
this was in March and April, when it was 55 degrees
outside. They are getting readings in the mid-80s in
the units. That's not just uncomfortably warm; that is

a defect. And that's not something that a fair and full

SF Reporters (415) 948-8289 Page 30disclosure was made on.

So this 40D, in our view -- and I think this
is a fair inference which, of course, Mr. Cvitanovic can
argue. We're not asking you to decide that. We're just
stating it's a fair inference from our evidence that
this 40D was placed exactly where it is to provide cover
at this very juncture, so they could say, "Well, look
we put 40D in here." But it is an issue of fact.

Was this really a disclosure of a problem that
existed? That is an issue of fact, and we've met our
burden of showing it’s an issue of fact, given not only
the complaints but the actual investigation they had
made. This is not just, as Mr. Cvitanovic suggests,
anytime there is a complaint, you must disclose it.

This is a situation that clearly existed.

They don't dispute that it existed. They are trying to
minimize it by saying, "Well, there was only four to six
complaints. Tt wasn’t one." And they are not
mentioning the testing they themselves did. They're

also not mentioning their own real estate broker knew

how bad it was. He wrote an e-mail saying, "Tt's
brutally hot even with the film." This doesn't say
"brutally hot." That's their own agent who, as a matter

of law, his knowledge is imputed back to Mission Place.
Furthermore, on the building code issue,

Mission Place was still selling these units. They

hadn't sold ~~ a large number, a hundred of the units

were still not sold when one of the owners called up the

SF Reporters (415) 948-8289 Page 31building department, who came over and wrote a violation
-- and we have that in your evidence -- that this
condition is so bad it violates the building code. So
the argument that you have that we've presented no
evidence on that isn't correct.

THE COURT: Even the exciting parts, you have
to go slow,

MR. RIGGS: The Court's got the analysis
correct. We've met our burden. That's our position.

THE COURT: Thank you.

You're on the green on 18 now, so not much
left in the game.

MR. CVITANOVIC: They have 595 units over
there. T guess T must have missed the declaration from
one homeowner who said that they were deceived. Maybe
itts not in my paperwork; maybe it's in yours. I don't
know. But I think you see the point here, Your Honor.

People complaining that it's hot is one thing.
We're talking about people saying that they were
deceived. And I'm not seeing that here. T'm saying
people -- T'm seeing people saying they're hot. We need
to talk about what Mission Place knew back then and the
adequacy of their disclosures as it relates to what it
knew and when it knew it.

And I don't see a situation here where the
disclosure is inadequate as a matter of law. This sets
up an interesting issue where if there are homeowners

who were aware of it, such as the person who had the

SF Reporters (415) 948-8289 Page 32survey, the homeowner complaint survey, whatever you
want to call it -- and let's assume for purposes of
argument that nothing was concealed from them, how does
that affect the case as a whole, number one.

And number two, is the duty of disclosure for
the heat gain issues based on Pagano, perhaps it would
be limited to no more than those units that made the
complaints. But to say that the complaints would, as a
whole cloth, apply to the development is too extreme.
There is no evidence produced by the plaintiff that
Mission Place felt that it was a problem projectwide or
that Mission Place described it as a defect.

Mission Place always viewed these as
complaints from isolated residents, and it struck a
balance in disclosing those. And it cannot, I believe,
have a duty to say that just because the tenant at Unit
305 complained he was ~- he or she ~~ was hot, that the
unit owner of 1502 on the other side of the building
should be aware that they're going to be hot too. And T
think we get into a situation where you can't have a
disclosure requirement like that, especially ina
property such as this.

THE COURT: Thank you. All right.

The tentative ruling stands. The motion is
denied. At the outset of this hearing, IT laid out what
the legal standard was, and that is absolutely crucial.
That's why I do it. I also do it because in the event

my work is reviewed, reviewing courts should know what I

SF Reporters (415) 948-8289 Page 33think I'm doing.

But the arguments regarding whether a ruling
today determines the adequacy of disclosures or what
happens if a small number of residents complain and a
large number do not or whether comments are made in
passing in the elevator or not has nothing to do with
this ruling. This ruling does not determine whether or
not the disclosures were adequate, does not determine
what, if anything, in addition was known by the
defendant. It determines simply one very important and
determinative question: Is there a fact question
regarding those matters? That's it.

So your arguments will be, T'm sure, repeated
with or without the golf analogies at trial, if we go
that far.

MR. CVITANOVIC: I like the golf analogy.

THE COURT: Now, just to summarize, if my
first job is to see what the moving party presents as
evidence and the presentation of the disclosures
satisfied the burden of production. As a matter of
fact, when I reached that conclusion, I had the Pagano,
P-A-G-A-N-O, case in mind. It seemed like Pagano
applies.

What was disclosed might very well be of the
nature of well, how bad is the water intrusion. So now
that shifts the burden to the responding party to
present other facts that would indicate there's a fact

issue that has to get resolved before we figure out

SF Reporters (415) 948-8289 Page 34whether or not the disclosures are adequate, what was
known by the defendant, and the like. And they did
that.

They raised a fact question as to whether or
not the scope of what was disclosed could reasonably be
viewed to include the scope of complaints that were
made. And it appears to me there is a fact question
regarding that to be resoled by somebody looking at
witnesses and listening to what they said their problem
is. Whether or not all units or most units or all units
but one are not affected doesn't impact this motion
because the rules on summary dispositions -- and 1
talked about the new section 437c(s), which allows more
discreet questions to be determined, doesn't apply
either. If they can just show there's one unit that's
covered by the cause of action, they get past summary
judgment on this. That's the way it works.

The question of whether or not all units had
enough of a problem here is possibly better reserved
for, say, class certification or something like that.
But the rules on summary disposition are such that there
has been shown to be an issue of material fact relative
to the eighth cause of action; and therefore, the motion
is denied. That's as clear as I know how to say it.

All right. Off the record for a moment,
please.

(Off the record discussion.)

THE COURT: We are not going to have time to

SF Reporters (415) 948-8289 Page 35get to this Catellus thing. J have another motion that
i have to deal with because it's time sensitive for an
upcoming trial. We're going to do that next week at the
time set for the class certification motion,

My staff attorneys will contact you regarding
the class certification motion. And I'm going to have
to get another date for that. So I'll use the time for
the Catellus motion next Friday. And the class
certification i'm going to reschedule. My staff
attorneys or one of my courtroom clerks will contact you
regarding that.

MR. RIGGS: Thank you, Your Honor.

THE COURT: IT apologize, but today is a
fascinating day for people like me that think this stuff
is fascinating, but a horrific day for people like my
staff attorneys who have to put all this stuff together
and my poor clerks who have to write orders and keep
papers in order. We simply can't determine all of this
today, and the smartest thing for me to do is to do
Catellius next Friday and do the class certification
thing on a day soon.

So prepare an order on the motion for today, a
veal simple one, if you want a written order.

MR. RIGGS: We'll be glad to take care of
that, Your Honor.

THE COURT: And remember under the rule, or
the statute, I have to recite one issue of material

fact. And the issue of material fact is whether the

SF Reporters (415) 948-8289 Page 36disclosure demonstrated is sufficient to cover the
evidence of the complaints -- we can say sufficient or
not ~~ and what was known about the nature of the
situations in the units that might require disclosure.
And save all your good arguments for trial. See you.

MR. CVETANOVIC: Your Honor, there was one
other matter set today. There was an ex parte that we
had noticed to review some disputes about the summary
adjudication order on the duty to defend. It sounds
like we're running long. If you have time, I'd be happy
to discuss it; if you do not, then we can do it next
Friday as well.

THE COURT: Let's do that next Friday. And IT
apologize. Tf T would have said, "Okay. T'll do that,"
there are about four lawyers in the back of the room
that would have jumped over the little gate there and
attacked you with their briefcases.

So T may have just saved your life.

MR. BASTLICO: Your Honor, this is Brent
Basilico now. I'm sorry. That last part kind of cut
out a little bit. We had a motion to continue trial for
December 2lst.

THE COURT: Okay.

MR. BASTLICO: And do you also want to move
that to another date?

THE COURT: To odon't think so. T cantt tell
because just this morning I got some papers on that and

didn't have a chance to lock at them. I just gave them

SF Reporters (415) 948-8289 Page 37to one of my staff attorneys to tell me what it was all
about. So, as of this moment, that stays where it is,
but it could happen.

MR. BASILICO: Okay. This would be a very
quick argument.

THE COURT: They all should be --

COURTCALL: Your Honor, on behalf of HKS, just
to confirm the ex parte application of Mission Place
concerning the proposed order will be continued to
Friday December 21st; correct.

THE COURT: Correct. Yes.

COURTCALL: Thank you, Your Honor.

THE COURT: All vight. Take care everybody.

(Whereupon, proceedings were adjourned at

11:42 a.m.)

---000---

SF Reporters (415) 948-8289 Page 38COURT REPORTER'S CERTIFICATE
State of California )

) Ss.
County of San Francisco

I, Julie L. Ralston, hereby certify that I ama
Certified Shorthand Reporter and that I recorded
verbatim in shorthand the proceedings had Friday,
December 14, 2012, in the matter of Beacon Residential
Community Association, Plaintiff, versus Catellus Third
and King LLC, et al., Defendant, Case Number
CGC-08-478453, completely and correctly to the best of
my ability; that I have caused said shorthand to be
transcribed into typewriting and the foregoing pages, 1
to 35, constitute a complete and accurate transcript of
said shorthand writing taken in the above-mentioned

proceedings.

Dated at Oakland, California, this i7th day of

December, 2012.

JULTE L. RALSTON, CSR No. 13604

wn 00074

SF Reporters (415) 948-8289 Page 39EXHIBIT BANN RANKIN (SBN 83690)

TERRY WILKENS (SBN 118469)

Law Offices of Ann Rankin

3911 Harrison Street

Oakland, CA 94611

Tel.: (510) 653-8886 / Fax: (510) 653-8889

KENNETH 8. KATZOFF (SBN 103490)
ROBERT R. RIGGS (SBN 107684)
SUNG E. SHIM (SBN 184247)

Katzoff & Riggs LLP

1500 Park Ave #300

Emeryville, CA 94608

Tel: (510) 597-1990 / Fax: (510) 597-0295

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SAN FRANCISCO

BEACON RESIDENTIAL
COMMUNITY ASSOCIATION,

Plaintiff,
VS.

CATELLUS THIRD AND KING LLC,
etal,

Defendants.

Nee SS

This matter came before the Court upon the motion of Mission Place, LLC
(“Mission Place”) for an order granting summary adjudication as to Plaintiff Beacon

Residential Community Association’s Eighth Cause of Action for Concealment, as well

Case No. CGC 08-478453
[PROPOSED]

ORDER DENYING MOTION FOR
SUMMARY ADJUDICATION OF
MISSION PLACE LLC

Date: Dec. 14, 2012
Time: 9:30 a.m.
Dept.: 304

as Plaintiffs associated claim for punitive damages.

The motion was heard on December 14, 2012.
considered the points and authorities and declarations presented in support of and in

opposition to the motion. After full consideration of the moving papers, the opposition,

“Le

ORDER DENYING MOTION FOR SUMMARY ADJUDICATION OF MISSION PLACE LLC

The Court has read andthe authorities cited by the parties, the arguments presented at the hearing, and the
matter having been submitted for decision, the Court denies the Motion in its entirety,
on the ground that there is a triable issue of material fact.

Pursuant to Code of Civil Procedure section 437c¢(g), the triable issue of fact as
identified by the Court is whether or not the disclosure set forth in the uniform sales
documents provided by Mission Place to the buyers is one that is sufficient to cover the
conditions at the Beacon Project that were known to Mission Place as the result of
complaints and other information in the possession of Mission Place at the time that
Mission Place sold the units at the Beacon Project. The evidence showing that this
triable issue of fact exists consists of, among other things, documents from tenants in
various units, including units 848, 1510, 1102, 848 and 457 reporting excessive heat in
their respective units. (see Declaration of Sung E. Shim in Opposition to Motions for
Summary Adjudication of Mission Place, LLC and Catellus (“Shim Decl.”), § 32 &
Exh. AA; Deposition of Robert Schlesinger (“Schlesinger Depo.”) 148:13 — 151:19;
attached as Exh. P to the Declaration of Shim Decl.; Shim Decl., 33 & Exh. BB;
Schlesinger Depo. 191:7 — 191:14; Shim Decl., {| 45 & Exh. NN; Shim Decl., 4] 37 &
Exh. FF; Shim Decl., 34 & Exh. CC; Schlesinger Depo., 532:17 — 536:14; Shim Decl.,
{16 & Exh. JJ.)

IT IS SO ORDERED.

Dated:

CURTIS E.A. KARNOW
JUDGE OF THE SUPERIOR COURT

2.
ORDER DENYING MOTION FOR SUMMARY ADJUDICATION OF MISSION PLACE LLC22

23

APPROVED AS TO FORM:

HAIGHT, BROWN & BONESTEEL

_Attomeys for Mission Place Parties

ORDER DENYING MOTION FOR SUMMARY ADJUDICATIGN OF MISSION PLACE LLC

_3-EXHIBIT C22

23

ANN RANKIN (SBN 83690)
TERRY WILKENS (SBN 118469)
Law Offices of Ann Rankin

3911 Harrison Street

Oakland, CA 94611

Tel: (610) 653-8886

Fax: (510) 653-8889

KENNETH 8, KATZOFF (SBN 103490)
ROBERT R. RIGGS (SBN 107684)
SUNG B, SHIM (SBN 184247)
Katzoff & Riggs LLP

1500 Pack Ave #300

Emeryville, CA 94608

Tel: (510) 597-1990

Pax: (510) 597-0295

Atiomeys for Plaintiff BEACON.
RESIDENTIAL COMMUNITY
ASSOCIATION

ELECTRONICALLY.
FILED

Superior Court of Catifomia,
‘Counly of San Francisco
NOV 30 2012
Clerk of the Court

BY: ANNIE PASCUAL

Seeputy Cierk|

SUPERIOR COURT OF THE STATE GF CALIFORNIA.

COUNTY OF SAN FRANCISCO
BEACON RESIDENTIAL ) Case No. CGC 08-478453
COMMUNITY ASSOCIATION, )
} DECLARATION OF MICHAEL
Plaintiit, } LEELER IN OPPOSITION TO
} MOTIONS FOR SUMMARY
vs. } ADJUDICATION OF MISSION
} PLACE LLC AND CATELLUS
LUS THIRD AND KING LLC, )
3} Date: Dee. 14, 2012
} Time: 10:00 a.m.
Defendants } Dept.: 304
_.) Judge: Hon. Richard A. Kramer

MICHAEL LEFLER declares:

‘Trial Date: Reb, 4, 2013

1. Lam the principat of Lefter Engineering, Inc., Mechanical Engineers, and

DECLARATION OF MICHAEL LEPLER IN OPPOSITION TO MOTIONS ROR SUMMARY ADJUDICATION OF
MISSION PLACE LLC AND CATELLOS1 am licensed as a mechanical engineer. | have expertise in the fields of mechanical
2 engineering and in the design, inspection, evaluation and testing of heating, ventilating,
3 air conditioning (HVAC), plumbing and fire sprinkler systems for all types of
41} commercial and residential buildings. My mechanical engineering experience dates
5 back to 1980, including two years with General Motors in Los Angeles. I received a
6 B.S. degree in Mechanical Engineering from the University of California, Berkeley, in
7 1980. I have been a licensed Professional Engineer in the State of California since
8 1983, and I am licensed in six other states. I am the principal in charge of Lefler

9 Engineering, Inc. [ have personal knowledge of each fact stated in this declaration,

& 2. Since 2008, I have provided consulting services to counsel for the Beacon
g g Residential Community Association (“Association”) concerning solar heat gain and
He 12 ventilation problems within the $95 units at the complex. In, order to perform these
a ; 13 services, I have made a detailed study of the mechanical plans, of the specifications, and

14 of the project manual for the design and construction of the Beacon. I have studied the
15 as-built construction of the complex, and have determined what mechanical equipment,
16 scavenger fans, shafis, ducts and other components related to ventilation and to the
47 temperature within the units exist at the project. I have analyzed numerous possible
18 methods for altering the ventilation systems to provide the code-required number of air
19 changes, and for bringing the interior temperatures of the units into acceptable ranges,
20 such as those specified by the ASHRAE 55 standards.

21 3. In order to perform my assignment, my office under my direction has

22 || deployed 100 temperature sensors in units at the Beacon, These sensors collected

23

-2e

DECLARATION OF MICHAEL LEFLER IN OPPOSITION TO MOTIONS FOR SUMMARY ADJUDICATION OF
MISSION PLACE LLC AND CATELLUSKATZOFF & RIGGS LLP

100 PARK AVE. SUITE 309
EMERYVILLE. CA 54608

{St0) 597-1990

22

23

temperature data within the units between 2009 and 2012. During the period in which
they were in service, these temperature sensors automatically measured temperatures
every 20 minutes. Temperature sensors were placed in units on all elevations, in all
buildings, and on different floors of the Beacon. A summary of the findings from the
temperature sensors is attached as Exhibit A to this Declaration.

4, As shown on Exhibit A, many of the units registered temperatures over 80
degrees on thousands of occasions. Many of the units registered temperatures over 90
degrees and some of the units registered temperatures over 100 degrees. The data, as a
whole, shows a problem with overheating of the unit interiors, in my opinion.

5. The overheating problem, according to the data we collected, exists in ail
buildings, on all elevations, and in most units from the second floor up. The causes of
the problem are the same in all buildings, on all elevations, and on all floors. A
substantial number of units become what most people would perceive not just as
“uncomfortably warm,” but “hot.” Temperatures are significantly higher than outside
ambient temperatures.

6. I have read the 25 page document entitled “The Beacon” disclosure
statement, which is attached as Exhibit E to the Declaration of Zachary W. Shine in
support of the present Motion. My attention was directed to paragraph 40(d) of that
disclosure, which is buried on page 12 of the 25 page document. In my opinion,
paragraph 40(d) does not constitute a fair and complete disclosure of the overheating
problem as it exists at the Beacon Project. In my opinion the following, without
limitation, are material differences between the situation as depicted in paragraph 40(d)

-3-

DECLARATION OF MICHAEL LEFLER IN OPPOSITION TO MOTIONS FOR SUMMARY ADJUDICATION OF
MISSION PLACE LLC AND CATELLUS:“” RATZOFF & RIGGS LUP

and the actual condition. (1) The problem is that units become hot, not just
“uncamfortably warm.” (2) The statement that “buyers may elect to open their
windows” does not mention the problems that exist with noise in excess of allowable
levels, nor does it consider the existence of limiters that prevent the windows from being
opened any more than approximately four inches, (3) There is no indication that the
lack of ventilation is so bad that it does net meet the requirements of the building code.
(4) The “additional temperature and air circulation measures” suggested {installation of
ceiling fans; installation of blinds or curtains) do not, in the case of many units, suffice
to prevent the units from becoming hot. (5) There is no disclosure that the overall
design of the Beacon Project gives rise to excessive and unreasonable solar heat gain.
(6) There is no disclosure that the overall design of the Beacon Project fails to meet
minimum building code standards for interior ventilation. (7) There is no disclosure that
elements of the ventilation system, such as Z-ducts, are designed and installed in a
substandard way that leads to rapid clogging and that no reasonable unit owner would be
expected to alleviate this problem on his or her own. (8) There would be no practical
way for a buyer to gauge the magnitude of the overheating problem prior to purchase,
because the overheating problem in the units affected is not constant, and tends to be at
its worst during the September and October time frame, so buyers could not assess the
problem if they are buying at other times of the year.

7. Attached as Exhibit B to this Declaration is an illustrative diagram

repared by my office, showing the distribution of severely overheated units on the fifth

oor level of all four buildings of the 250 King Street portion of the Beacon Project.

-4-

DECLARATION OF MICHAEL LEFLER IN OPPOSITION TO MOTIONS FOR SUMMARY ADJUDICATION OF
MISSION PLACE LLC AND CATELLUSKATZOFF & RIGGS LLP
1500 PARK AVE, SUITE 300

22

23

North is to the upper right on the diagram. On this diagram, units registering interior
temperatures of at least 80 degrees on 91 more days per year are shown in red. Units
registering such temperatures 37 to 91 days per year are shown in violet. Units
registering such temperatures 19 to 36 days per year are shown in blue. Units
registering such temperatures 1 to 18 days per year are shown in green. As can be
viewed graphically in Exhibit B, the overheated units are evenly distributed and occur
on the courtyard portion, as well as the street facing portion, of the Beacon Project.
Thus, it is incorrect to state that the most severely overheated units are on any one
exposure, vertical stack, or directional face of the buildings.

8. Attached as Exhibit C to this Declaration is an illustrative diagram
prepared by my office, showing the distribution of severely overheated units on the fifth
floor level of all four buildings of the 260 King Street portion of the Beacon Project.
North is to the upper right on the diagram. On this diagram, units registering interior
temperatures of at least 80 degrees on 91 or more days per year are shown in red. Units
registering such temperatures 37 to 91 days per year are shown in violet. Units
registering such temperatures 19 to 36 days per year are shown in blue. Units
registering such temperatures 1 to 18 days per year are shown in green. Units that did
not register temperatures above 80 degrees are shown in white. As can be viewed
graphically in Exhibit C, the overheated units in 260 King Street are also evenly
distributed, and also occur on the courtyard portion, as well as the street facing portion.
of the Beacon Project. Thus, again it is incorrect to state that the most severely
overheated units are on any one exposure, vertical stack or directional face of the

«Se

DECLARATION OF MICHAEL LEPLER IN OPPOSITION TO MOTIONS FOR SUMMARY ADJUDICATION OF
MISSION PLACE LLC AND CATELLUS22

23

buildings.

9, Our firm has studied the entire ventilation system of all eight buildings of
the Beacon Project. As a result of this study, we have concluded that the ventilation
system as to the interiors of the habitable spaces fails to meet the minimum building
code requirements in several respects. Apart from code considerations, the design and
as-built ventilation in the habitable spaces is inadequate and unreasonably poor, in my
opinion. This lack of adequate ventilation is a contributing factor to the overheating
condition at the Beacon Project, in my opinion.

10. The Beacon Project includes buildings that are noise-impacted, in the
sense that due to the acoustical environment (“street noise”), the California Building
Code provides that the windows cannot be opened without unacceptable acoustical
impacts. Acoustical tests made at the time the buildings were designed showed that the
sound levels from the street, the ballpark, and the train station across the street exceed
75 decibels except on the courtyard side of the building, and thus, under the California
Building Code, this building is a noise-impacted building such that the windows cannot
be used for ventilation. The acoustical tests thus disallowed the use of open windows
for ventilation, except on the courtyard side of the building. Even in units that are not
noise impacted, due to safety considerations the windows by design have limiters which
allow them to open only a very small amount. This severely restricts their ability to
admit outside air. In response to the acoustical r