Motion,Ex Parte: BEACON RESIDENTIAL COMMUNITY ASSOCIATION VS. CATELLUS THIRD AND KING LLC et al

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                                IOUT

SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN FRANCISCO

Document Scanning Lead Sheet
Aug-07-2012 2:56 pm

Case Number: CGC-08-478453
Filing Date: Aug-07-2012 2:56
Filed by: RONNIE OTERO
Juke Box: 001 Image: 03715768
GENERIC CIVIL FILING (NO FEE)

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

001003715768

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

22 AUS 7 PM 3:55

CLERK OF THE
oy: € COURT

CEPOTY CLERK

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

SUPERIOR COURT OF CALIFORNIA

A

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
ESTATE PARTNERS, LLC; CENTURION
PARTNERS LLC; WEBCOR CONSTRUCTION, INC.;
WEBCOR BUILDERS, INC.; WEBCOR
CONSTRUCTION, INC., individually and doing
business as WEBCOR BUILDERS; WEBCOR
CONSTRUCTION LP individually and doing business
as WEBCOR BUILDERS; SKIDMORE OWINGS &
MERRILL LLP; HKS, INC.; HKS ARCHITECTS, INC.;
HKS, INC., individually and doing business as HKS
ARCHITECTS, INC. and DOES 1 through 200,

Defendants.

-1-

CASE NO. CGC-08-478453

[Complaint Filed: August 8, 2008]

HKS, INC.’S RESPONSE TO
SUPPLEMENTAL MEMORANDUM OF
POINTS AND AUTHORITIES IN
SUPPORT OF MISSION PLACE’S
MOTION FOR SUMMARY
ADJUDICATION

DATE: August 24, 2012
TIME: 9:30 a.m.

DEPT: 304

BY FAX

HKS, INC.’S RESPONSE TO SUPPLEMENTAL MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MISSION PLACE’S MOTION FOR SUMMARY ADJUDICATION4162,006

I.

Vil.

TABLE OF CONTENTS

INTRODUCTION —---- —— ene 2
THE MOTION FOR SUMMARY ADJUDICATION IS IMPROPER ~-----—-------—--==--- = 7
MISSION PLACE’S EVIDENTIARY SUBMISSIONS CONTRAVENE
DEPOSITION TESTIMONY AND ARE OTHERWISE IMPROPER ------~------——--—---——---—--— —-8
ANY ASSIGNMENT TO THE “MISSION PLACE RELATED PARTIES AND
AFFILIATES” WAS INVALID, INEFFECTIVE AND DID NOT CONVEY ANY
INDEMNITY RIGHTS OR DEFENSE OBLIGATIONS: eaeeeneneeenenennnnnnnnnnncnnaennn 8
A. There is No Evidence of What Rights, If Any, Assignor Had to Assign -—-------------—-—- 9
B. If Given the Interpretation Urged by Mission Place, the Assignment is

Invalid On its Face ~-———-————-—~—=—-—--- n-ne nanan anna nanan anne
C. Ifthe Assignment is a Partial One, Then it Does Not Apply to Indemnity

Provisions or, Alternatively, Triable Issues of Material Fact Exist in That

Regard- wenn eee nennnrnnnnnnenenrnenn eens ternneenarenramnnnnuncnenanrnnnienanamenenta ————- 10
D. Ifthe Assignment is a Partial One, Then Mission Place’s Failure to Sue

Necessary Parties is Fatal to the Motion —----——-----—-------—---~----------------------—- 4
THE INDEMNITY CLAUSE AND EVIDENCE PRESENTED ARE INSUFFICIENT
TO SUPPORT A PRE-TRIAL DETERMINATION OF THE DUTY TO
DEFEND-----—— _——-— eennneeeeeeecnccentnenneeenene eoneeeceeneeneccnnneccccenenemmeceecen 42

CROSS-COMPLAINANTS HAVE NOT ESTABLISHED DAMAGES AND TRIABLE ISSUES OF
FACT EXIST IN THAT REGARD x——-—__—__mevnnee—encenee ener I

AS A PRACTICAL MATTER THE DETERMINATION OF DEFENSE OBLICATIONS OUGHT BE
ADDRESSED AT TRIAL --- ene ceennnneneen cen cnnnnnncnenmentnnemenenmenincinente weanevennem 15

TABLE OF CONTENTS/TABLE OF AUTHORITIESTABLE OF AUTHORITIES

Archdale v. American Int'l Specialty Line Ins. Co.
(2007) 154 Cal.App4th 449, 473

Bank of the Orient v. Superior Court
(1997) 67 Cal. App.30. 588, 595....cscsessee

Bramalea v. Reliable Interiors, Inc.
(2004) 119 Cal. App.4 468, 472-475.........0:00

CIGA v. WCAB (Next Enterprises)
(2012) 203 Cal.App.4* 1328, 1337, citing Rest.2d Contracts, §317, subd (1)....

Cockerell v, Title Ins. & Trust Co.
(1954) 42 Cal.2d 284, 286, 291-293

Commercial Discount Co. v. Cowan
(1941) 18 Cal.2d 610, 614

Crawford v. Weather Shield Mfg. Co.
(2008) 44 Cal.4% 541, 565,

D'Amico v. Board of Medical Examiners
(1974) 11 Cal.3d 1, 21

Emerald Bay Community Assn. v. Golden Eagle Ins. Corp.
(2005) 130 Cal.App.4* 1078, 1088-1089.

Hood v. Sup.Ct. (United Chambers Administrators, Inc.
(1995) 33 Cal.App.4" 319, 321 ....ssosersssee

Interstate Fire and Cas. Ins. Co. v. Cleveland Wrecking Co.
(2010) 182 Cal. App.4" 23, 34-35.....

Reagan Roofing Co. Inc. v. Sup. Ct. =(Paciie Scene)
(1994) 24 Cal.App.4" 425, 437... so

UDC-Universal Development v. CH2M Hill
(2010) 181 Cal.App.4" 10

Visueta v. General Motors Com.
(1991) 234 Cal.App.3d 1609, 1613.

4162.006

nF

TABLE OF CONTENTS/TABLE OF AUTHORITIESCivil Code §437 (c)(0)(1)...
Civil Code §1039 9

1162.006

a

-fii-

TABLE OF CONTENTS/TABLE OF AUTHORITIESI
INTRODUCTION
On December 17, 2010, Mission Place, LLC and other entities (referred to henceforth for ease of
reference in the singular as “Mission Place”) brought a motion for summary adjudication, directed against
HKS, Inc. (hereinafter “HKS”) and Webcor Construction, Inc. (hereinafter “Webcor’) and seeking an order

compelling them to assume its/their defense. HKS opposed the motion on sixteen (16) separate grounds’.

When the motion was heard on March 3, 2011, the Court took the matter off calendar/held it in abeyance,
pending the completion of certain discovery. This original motion is now set to be heard anew, and has
been supplemented by various additional documents filed by Mission Place.

As an initial matter, it is important to note what Mission Place’s supplemental moving papers do nol|

do. Of the sixteen (16) grounds advanced by HKS in opposition to the motion, twelve (12) are not

1 The grounds for opposition included the following: (1) that HKS did not contract with the entity purporting to assign
rights to Mission Place and that Mission Place had not established that the entity with which HKS had contracted
(Catellus Urban Development Group, LLC) had ever assigned those rights to someone else, (2) that the Consent and|
Agreement did not, on its face, encompass the indemnity rights referenced, (3) that the “Assignment of Architectural
Agreement" (“Assignment’) - which bizarrely purported to retain what it simultaneously “assigned” -- was, by
definition, a nullity and invalid, (4) that the moving papers did not establish the rights, if any, of the assignor (Third
and King Investors, LLC) in the contract in question, (5) that, if the assignment were to be salvaged, it must be
deemed a partial assignment, in which case triable issues of fact existed as to what was being assigned and what
was being retained, (6) that, if it was a partial assignment, other parties were required to be joined in the cross-
complaint by Mission Place, but had not been, (7) that various documents had not been properly authenticated or the
necessary foundation for testimony provided, (8) that an issue existed as to whether the motion was brought against
the correct HKS entity (i.e. the one which was a party to the underlying contract), (9) that triable issues of material
fact existed as to whether HKS, or any related entity, actually had a meeting of the minds with anyone as to what
was, and was not being assigned, or consented to, (10) that the provision under which the claim has been made is
for indemnity only, and not defense, and does not give rise to a pre-trial defense obligation, (11) that Mission Place
had not demonstrated that the claims “resulted from” the conduct of any HKS entity and countervailing evidence
demonstrates that it did not, (12) that Mission Place had not demonstrated that the claims “resulted from” the
“misconduct or any negligent act, error or omission” of any HKS entity, and countervailing evidence demonstrates
that it had not, (13) that Mission Place had not demonstrated that the claims were not, in fact, occasioned by the
“active, passive or concurrent negligence’ of the indemnified parties or under the assignment from which they took
and countervailing evidence demonstrates that such parties were at fault, (14) that summary adjudication could not
be had, where such would not entirely resolve the declaratory relief cause of action, (15) that there was no evidence
that Mission Place had sustained any damages, and evidence that they had not and, finally (16) that certain
necessary discovery remained to be completed.

2 Contrary to Mission Place's assertion, the motion was not continued to allow discovery only as to the “mutual
intent’ of the parties. In its original opposition, HKS identified ten (10) areas in which discovery would be required to
support or oppose the motion {See Opposition, pg. 9 (15) — 10 (13)] and the scope of discovery in connection with th
motion was not so limited.
-2-
HKS, INC.’S RESPONSE TO SUPPLEMENTAL MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MISSION PLACE’S MOTION FOR SUMMARY ADJUDICATIONaddressed at all. Many of these grounds for opposition are critical, independently sufficient to defeat the
motion. One (1) issue — relating to whether or not the motion had been brought against the “correct” HKS
entity -- has been resolved by stipulation and is no longer at-issue. Another — dealing with the necessity of
discovery — has largely (but not entirely) been dealt with, while two (2) others, relating to the intent of Third
and King Investors, LLC ("TKI") and Mission Place have been addressed in part. The failure to address
remaining issues is particularly notable in respect to certain foundational matters not addressed in the
moving papers, or in the supplemental submissions, presumably evocative of Mission Place’s inability to
secure subsequent evidentiary support for its positions®. In other instances, the evidence that is proffered
by Mission Place lacks foundation, and/or is presented via a declaration which contravenes the declarant's
earlier deposition testimony or is otherwise ineffective.

What additional evidentiary material do the supplemental moving papers attempt to provide? Two
(2) items. First, Mission Place cites to deposition testimony from personnel at Mission Place and Catellus
that it was their intent to ensure that Catellus retained all the rights it purportedly transferred. As a matter o
law and definition, however, an assignment, if it is to be valid, must operate to extinguish the assignor’s
interest in the rights it is transferring [See e.g. CIGA v. WCAB (Next Enterprises) (2012) 203 Cal.App.4"
1328, 1337, citing Rest.2d Contracts, § 317, subd. (1)]. Thus, in attempting to avoid the impact of the
evidentiary issues attendant upon what Mission Place had previously conceded to be a partial assignment*

[See Mission Place’s Reply, pg. 7 (8-10)], it has irrevocably wed itself to the assertion that the assignment

3 An example of this would be a showing that the entity with which HKS actually contracted, Catellus Urban
Development Group, LLC (“CUDG’) had transferred its rights to Third and King Investors, LLC (“TKI’), or that TKI
ever had any rights in the Architectural Agreement to assign. Nothing further was submitted by Mission Place in that
regard.

4 As noted in the opposition filed by HKS, if the assignment is a partial one, than something, by definition, must have
been assigned, and something else retained. If something was retained, than an issue exists as to whether or not
the indemnity rights were retained, and recourse to the face of the Consent - which does reference assignments, but)
only of certain warranties and guarantees, as well as rights of possession of the documents — suggests that such
were not transferred. Moreover, and as the very case cited by Mission Place establishes, if the assignment is a
partial one, then one must join, as a third party plaintiff and indispensable party, in the action in question, both the
partial assignor and the partial assignee - which Mission Place has not done [Bank of the Orient v Superior Court
(1977) 67 Cal.App.3d. 588, 595]. Mission Place should presumably have ensured that the summary adjudication of
portions of the declaratory relief cause of action determined TKI's and/or CUDG's interests, something it also did not
do.
-3-
HKS, INC.’S RESPONSE TO SUPPLEMENTAL MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MISSION PLACE’S MOTION FOR SUMMARY ADJUDICATIONwas full and complete. Since the assignment provides that the assignor (TKI) is refaining all the rights
under the agreement, nothing can be transferred or assigned to a third party, and the documentis, on its
face, a nullity. Nor is this curable or subject to severance, as the evidence demonstrates that TKI's
retention of whatever rights it might have had was a critical ‘deal point’, without which the transaction might}
not have occurred [See HKS’s Amended Sep. Stmt. of Material Facts, No. 28]. HKS respectfully submits
that in taking this position, Mission Place has doomed its claim.

The other evidentiary matter addressed by the supplemental moving papers is the attempt to
demonstrate that HKS received, considered, reviewed and amended the “Assignment of the Architectural
Agreement’ along with the “Consent and Agreement”, by introducing what purport to be partial (redacted)
emails, authenticated by the Supplemental Declaration of John Tashjian (who also opines upon their
significance and effect). There are several problems with this attempt. First, John Tashjian was deposed
for two (2) full days, taken in April of 2011 and April of 2012, and made it clear in his testimony that he (a)
was not involved in the preparation, drafting, transmittal or negotiation of the Assignment or Consent
(indeed, he testified that he was not even sure that he had seen some of them until long afterwards)°, and
(b) that he had repeatedly searched for and been unable to locate or produce emails relating to the
Assignment or Consent; it now appears that they were previously withheld from production under claims of
privilege [See Supplemental Declaration of Noel E. Macaulay, fff] 2-4]. A declarant may not gainsay his
earlier deposition testimony by suddenly referencing knowledge he earlier disavowed under oath, or
engage in the gamesmanship of withholding documents under claim of privilege, and then selectively rely
upon the same when it suits him. Second, Mr. Tashjian did not author the emails in question, nor was he
the recipient; he can hardly authenticate the same. This is particularly the case for the attachments to
these emails, for the portions of the emails that follow — and which might show a different source for them —

have been redacted. Thus, whether viewed under the Best Evidence rule, as a matter of foundation,

5 Through the alchemy of hyperbole, this disavowal of involvement or knowledge in the deposition testimony has
been transmuted to the John Tashjian being ‘intimately involved in the negotiation and execution of the Assignments”)
[See Supplemental Memorandum at pg. 14-16]. Similar mischaracterizations of the evidence abound in the
Supplemental Memorandum.
-4-
HKS, INC.’S RESPONSE TO SUPPLEMENTAL MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MISSION PLACE’S MOTION FOR SUMMARY ADJUDICATIONauthentication or otherwise, this material has been properly objected to and ought not to be considered
[See Evidentiary Objections to Supplemental Declaration of John Tashjian}.

Third, even if this material were accepted into evidence, what would it establish? In some ways, it
would actually buttress the opposition. For example, Jack Price indicated in his declaration that he did not
receive the Assignment at issue here with the Consent. The Assignment referenced in the email
purportedly copied to him (Exhibit ‘19") is materially different than the one upon which suit has been
brought, raising the issue of which Assignment accompanied which Consent, or whether the latter was
signed based upon a different iteration of the former. Similarly, the “estoppels” referenced in the legal
memorandum [See MSA 0289 - 0290] attached to Exhibit “18” specifically reference only those items
specified on the face of the Consent and the only assignments mentioned are the three (3) ultimately put
into the Consent - precisely as maintained by HKS [See e.g. HKS Opposition, Il (E) and (F), at pgs. 5-6).
Moreover, the memorandum repeatedly references the necessity of securing an assignment from “Catellus
Urban Development Group, LLC’, the entity with which HKS contracted - which was apparently never
done. In short, this evidence, if admissible, creates as many triable issues of facts as it purports to lay to
Test.

Mission Place also sets forth at length black letter law conceming the interpretation of contracts
and the parol evidence rule. None of that is controversial, disputed, or for that matter, particularly relevant.
The simple facts are these. The Assignment, and the Consent and Agreement are two (2) separate
documents. There were apparently several iterations of each, the terms of which materially vary. The
Consent and Agreement - which HKS did sign - references the “foregoing” (iteration unspecified)
assignment, which was not attached. Nowhere in the Consent does HKS affirm the terms of the
Assignment, particularly an iteration which purports to have the assignor retain what it assigns. There are,
instead, thirteen (13) separate, specific representations and agreements, only three (3) of which have any
relationship, directly or indirectly, to an assignment. Those are provisions which grant ownership of the
“Project Documents’ to Mission Place, an assignment of “all guarantees and warranties [to the Architect]

relating to the Project” and a representation that the contract has not previously been assigned. Each of

-5-
HKS, INC.’S RESPONSE TO SUPPLEMENTAL MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MISSION PLACE’S MOTION FOR SUMMARY ADJUDICATIONthese representations and agreements are tied to specific and corresponding language in the Architectural
Agreement [HKS Opposition, II (E) and (F), at pgs. 5-6]. The indemnity provision is not amongst them.

On its face, the “Consent and Agreement” does not have the effect Mission Place urges. In fact, it
cannot have that effect, for if so, the Assignment would be, by definition, a nullity; one cannot
assign/transfer what is not released. It therefore must be a partial assignment, and in determining the
scope of the partial assignment, the specific and limited representations in the Consent itself are
determinative. To the extent that they are not, the Consent is ambiguous and reference to parol evidence
is not only appropriate, but required. Of course, none of the deponents whose testimony has been
referenced by Mission Place negotiated the Consent, drafted it, discussed it with HKS (or in some cases,
even saw it until long afterward), and as such, they certainly are not in a position to competently testify.

In the ultimate analysis, the matters discussed in Mission Place’s supplemental submissions and
analyzed here, while important and potentially dispositive of Mission Place's claim, are not the only or even
the most difficult of the insurmountable hurdles Mission Places faces. Leaving aside the other threshold
issues — such as the failure to demonstrate that CUDG ever assigned its rights under the HKS contract to
TKI, or that TKI had any rights in the HKS contract to assign to Mission Place, or even that Mission Place
has any damages in the first place, the language of the clause itself is fatal to the claim. This clause is
demonstrably dissimilar to and infinitely more difficult to prevail upon than those considered in Crawford v.

Weather Shield Mfg. Co. (2008) 44 Cal.4 541 and UDC-Universal Development v. CH2M Hill (2010) 181

Cal, App.4" 10; their reasoning and holding simply does not apply. Unlike those cases, there is no
language expressly requiring a defense, only unadomed (albeit strictly circumscribed) indemnity provision.
Under the language of the indemnity provision, Mission Place must demonstrate that the claims “resulted
from” the conduct of any HKS entity; it has not, and countervailing evidence has been presented. Under
the language of the provision, Mission Place must further demonstrate that the claims “resulted from” the

“misconduct or any negligent act, error or omission” of any HKS entity; it has not, and countervailing

8 See e.g. Bramalea v. Reliable Interiors, Inc. (2004) 119 Cal. App. 4th 468, 472-475 (where insurer pays costs of
defense, insured cannot recover on cross-complaint for express indemnity as the collateral source rule does not
apply to breach of contract causes of action; equitable indemnity claim also barred).
-6-
HKS, INC.’S RESPONSE TO SUPPLEMENTAL MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MISSION PLACE’S MOTION FOR SUMMARY ADJUDICATIONevidence has been presented. Finally, under the language of the provision, Mission Place must
demonstrate that the claims were not, in fact, occasioned by the “active, passive or concurrent negligence”
of the indemnified parties or those for whom or which they are or might be liable or those providing the
assignment in question; it has not, and countervailing evidence has been presented’. The latter section of
the clause is itself dispositive, for if a naked assertion by plaintiff that HKS was at fault is sufficient to trigger
a defense obligation, than under the same logic and rationale, the very detailed claims by plaintiff that
Mission Place and those under assignment from which it claims are at fault must be equally sufficient to
defeat a defense obligation. Simply put, these are factual matters, the resolution of which can, from a
practical standpoint® only be determined at trial. The motion ought be denied.
I
THE MOTION FOR SUMMARY ADJUDICATION IS IMPROPER

This is a motion for summary adjudication of a declaratory relief cause of action. The declaratory relief
cause of action, however, encompasses three (3) separate issues (First Amended Cross-Complaint, 59},
two (2) of which are not addressed in this motion. As such, granting summary adjudication as to the issue
will not completely dispose of the cause of action to which it relates, as required [Code of Civil Procedure
§437c(f)(1); Hood v. Sup. Ct. (United Chambers Administrators, Inc.) (1995) 33 Cal.App.4" 319, 321]. In

that regard, characterizing the matter as a declaratory relief claim will not salvage an otherwise deficient
motion for summary adjudication {Id. at 322-323]. Nor is the matter susceptible to early summary
adjudication under the guise of adjudicating a duty. That is, where the liability of parties have not been

determined on the merits, attempts to determine the existence of a duty to defend are premature and ought

7 Given the broad sweep of this provision, which encompasses not only “active”, but also “passive” and “concurrent”

negligence, as well as the scope of the original and subsequent developers’ alleged involvement and participation in
the construction (including the alleged “value engineering’ decisions alleged to have caused the “heat gain” issue), it
is difficult to imagine any circumstance in which this provision would not bar the indemnity claim.

8 Indeed, and in leaving aside the merits of the opposition, granting the motion at this juncture, with a trial date in
February of 2012, would create a logistical nightmare. Presumably, new counsel would be retained for Mission
Place, resulting in significant disruption and ensuring further requests for a continuance of the trial date; with the five
(5) year statute rapidly approaching, such would be fraught with difficulty. Indeed, given the imminence of the trial
date and the fact that there is already ample insurance coverage and a defense being provided, Mission Place would
suffer no prejudice from having the issue of its defense coverage determined with the indemnity claim, and can
certainly seek recovery of its past defense costs at that time.
-7-
HKS, INC.’S RESPONSE TO SUPPLEMENTAL MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MISSION PLACE’S MOTION FOR SUMMARY ADJUDICATIONnot be allowed [See e.g. Reagan Roofing Co., Inc. v. Sup. Ct. (Pacific Scene) (1994) 24 Cal.App.4® 425,

437, cited with approval as to the concern articulated therein at Crawford v Weather Shield Mfg. Co. (2008)
44 Cal.4h 541, 565, fn. 12].

ml
MISSION PLACE’S EVIDENTIARY SUBMISSIONS CONTRAVENE DEPOSITION TESTIMONY
AND ARE OTHERWISE IMPROPER

As noted in the introduction, Mission Place’s attempt to demonstrate that HKS received,
considered, reviewed and amended the “Assignment of the Architectural Agreement” along with the
“Consent and Agreement” and by use of the Supplemental Declaration of John Tashjian as a vehicle to
introduce redacted emails is improper for many reasons. These documents were withheld from production
under an apparent claim of privilege and the person purporting to authenticate them denied any knowledge
of their existence in his deposition. Indeed, he testified he had almost no knowledge of the Assignment and
the Consent, and was not involved in their preparation, drafting, transmittal or negotiation; now, he is
characterized as having been ‘intimately involved in their negotiation and drafting” and opines as to their
content, effect, and preparation. Declarations which contravene that persons earlier deposition testimony
are to be disregarded [Visueta v. General Motors Corp. (1991) 234 Cal.App.3d 1609, 1613; D'Amico v.
Board of Medical Examiners (1974) 11 Cal.3d 1, 21; Archdale v American Int!’ Specialty Line Ins. Co.

(2007) 154 Cal.App.4* 449, 473] and gamesmanship and the selective withholding and then strategic use
of documents ought not be countenanced. Additionally, Mr. Tashjian did not author the emails in question,
nor was he their recipient, and is hardly in a position to authenticate the same. This is particularly the case
for the attachments to these emails, for the portions of the emails that follow — and which might show a
different source for them — have been redacted. This material has properly objected to and ought not to be

considered [See Evidentiary Objections to Supplemental Declaration of John Tashjian].

-8-
HKS, INC.’S RESPONSE TO SUPPLEMENTAL MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MISSION PLACE’S MOTION FOR SUMMARY ADJUDICATION\V
ANY ASSIGNMENT TO THE “MISSION PLACE RELATED PARTIES AND AFFILIATES” WAS INVALID,
INEFFECTIVE AND DID NOT CONVEY ANY INDEMNITY RIGHTS OR DEFENSE OBLIGATIONS

A. There is No Evidence of What Rights, If Any, Assignor Had to Assign

In the opposition, HKS noted that many foundational elements necessary for Mission Place to
prevail had not been established. These included the status of TK, its rights, if any, under the Architectural
Agreement and its relationship with CUDG. Did CUDG ever assign any of the rights it had under its
contract with HKS?. There was nothing in the motion for summary adjudication from which this information
could be gleaned and there is also nothing in the supplemental submission, despite the passage of fifteen
(15) months since the last hearing. The “Assignment of Architectural Agreement’ does not even purport to
represent that the alleged assignor, TKI, has any substantive rights to assign — it states that such is “(with a
reservation of rights), “AS IS” and without warranty’. One thing that TKI was not is a party to the
Architectural Agreement itself, as evinced by the very contract at-issue here. In that regard, the burden of
showing the assignor’s authority to assign and the nature of the rights assigned always lies with the party
claiming under the assignment [See e.g. Cockerell v. Title Ins, & Trust Co . (1954) 42 Cal.2d 284, 286, 291,
2939]. Mission Place has not made the requisite showing.

B. If Given the Interpretation Urged by Mission Place, the Assignment is Invalid on its Face

An assignment is by definition a transfer of right from one person or entity fo another [See Civil

Code §1039: Commercial Discount Co. v. Cowan (1941) 18 Cal.2d 610, 614]. One cannot assign what

3 As noted in Cockerell (supra), not only does “the burden of proving an assignment falls upon the party asserting
rights thereunder’, but “the evidence must not only be sufficient to establish the fact of assignment when that fact is
in issue but the measure of sufficiency requires that the evidence of assignment be clear and positive to protect an
obligor from any further claim by the primary obligee” Cockerell (supra at 292). That is particularly the case here.
Catellus Urban Development Group is a defendant in this case. So is Third and King Investors, LLC. Since an
assignment is a transfer of rights, if the assignment is valid to convey the rights of the party with which HKS
contracted, the Court would necessarily have to also determine that Catellus Urban Development Group and Third
and King Investors, LLC had relinquished those rights, for example, lest there be utterly inconsistent rulings and
double (or treble) liability, with CUDG and TKI suing on the contract and for express indemnity (based in the one
instance, upon lack of evidence of a valid assignment and on the other based upon the purported retention of the
Tight), while Mission Place asserted the same claims on and under the disputed assignment.

-9-
HKS, INC.’S RESPONSE TO SUPPLEMENTAL MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MISSION PLACE’S MOTION FOR SUMMARY ADJUDICATIONone retains; something is either assigned or it is not. As noted in CIGA v. WCAB (Next Enterprises) (2012)
203 Cal.App.4% 1328:

“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.” (Rest.2d Contracts, § 317, subd. (1).) [Emphasis Added]

[CIGA (supra) at 1337]
In this case, however, the “Assignment of Architectural Agreement” purports to do both, with Third
and King Investors, LLC retaining the very rights it purports to assign, without warranty of any kind. Mission}
Place takes the position that this is a full and complete transfer of all rights, with a full and complete

retention of the same rights under the contract by the “assignor’. Such a documents a nullity. If

something is retained, it is not transferred. Nor is this a curable defect, or subject to severance, as the
evidence demonstrates that TKI's retention of whatever rights it might have was a critical “deal point"
without which the transaction might not have occurred (See HKS's Amended Sep. Stmt. of Material Facts,
No, 28]. The only way in which an assignment can both retain and transfer rights is if it is a partial
assignment in which different rights are at issue, in which case summary adjudication is also improper, for
the reasons set forth below.

C. Ifthe Assignment is a Partial One, Then It Does Not Apply to Indemnity Provisions or,

Alternatively, Triable Issues of Material Fact Exist in that Regard

Either there was an assignment or there was not. If there was a complete assignment, than all
rights had to be transferred by TKI to Mission Place. Since TKI purports to retain its rights whilst assigning
them, if there was an assignment, it was ineffective, invalid or illusory, or it was partial. In recognition of
the fact that if the assignment is read literally, it is a nullity, MISSION previously took the position that it
was a partial assignment [See Reply, pg. 7 (8-10)]. However, assuming, arguendo, that MISSION is
correct, a partial assignment, by definition, means that some rights are being retained, and some
transferred. Which rights are being retained and which ones transferred?

The most appropriate way of determining this - assuming that the documents themselves are

deemed controlling - is to review the “Consent and Agreement’, which specifies particular scopes of

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HKS, INC.’S RESPONSE TO SUPPLEMENTAL MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF

MISSION PLACE’S MOTION FOR SUMMARY ADJUDICATIONassignments. Moreover, not only is this the most reasonable way of reading the assignment — assuming
that it was valid in the first instance — but it is consistent with the intent of the HKS in entering into the
“Consent and Agreement’. Indeed, it is required by law [See e.g. CIGA (supra) at 1336 (“A partial
assignment of a claim is unenforceable without the debtor's consent, and the assignee ordinarily has no
legal standing to sue.”)}. Moreover, and as noted in the introduction, to the extent that the new evidence
submitted by Mission Place is received over objection, it is consistent with the language of some of the
exhibits [e.g. Exhibit “18", at MSA 0289 - 0290].

Nowhere in the Consent does HKS affirm the terms of the Assignment, particularly an iteration
which purports to retain what it assigns. There are, instead, thirteen (13) separate, specific representations’
and agreements, only three (3) of which have any relationship, directly or indirectly, to an assignment.
Those are provisions which grant ownership of the ‘Project Documents” to Mission Place, an assignment of
“all guarantees and warranties [to the Architect] relating to the Project” and a representation that the
contract has not previously been assigned. Each of these representations and agreements are tied to
specific and corresponding language in the Architectural Agreement (See e.g. HKS Opposition, II (E) and
(F), at pgs. 5-6]. The indemnity provision is not amongst them.

That analysis of the Consent ought to be dispositive. If it is not, than ambiguity exists and
reference to parol evidence is proper. At there is a conflict in the evidence in that regard, summary
adjudication is improper.

D. Ifthe Assignment is a Partial One, Then Mission Place’s Failure to Sue Necessary

Parties is Fatal to the Motion
If the assignment is a partial one, and the interests of the various parties (assignor and assignee)
are in question, then one must join, as a third party plaintiff and indispensable party both the partial
assignor and the partial assignee — which Mission Place has not done [Bank of the Orient v Superior Court
(1977) 67 Cal.App.3d. 588, 595 (where “there has been a partial assignment all parties claiming an interest
in the assignment must be joined as plaintiffs, and as indispensable parties, as the court lacks jurisdiction
to proceed without them’)}. Moreover, because of the very real possibility of inconsistent adjudications and

obligations, Mission Place should have, but did not, ensure that the summary adjudication of portions of the

-li-

HKS, ING.’S RESPONSE TO SUPPLEMENTAL MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MISSION PLACE’S MOTION FOR SUMMARY ADJUDICATIONdeclaratory relief cause of action also determined TK''s interest and/or that of CUDG. As such, the motion
for summary adjudication ought not to be heard.

v
THE INDEMNITY CLAUSE AND EVIDENCE PRESENTED ARE INSUFFICIENT TO SUPPORT A PRE-

TRIAL DETERMINATION OF THE DUTY TO DEFEND

As noted in the original opposition, the indemnity provision at issue in this litigation is Section 7.2 (a) of
the Architectural Agreement, which provides, in pertinent part:

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’ ... ), 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 costs 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]

Nowhere in Section 7.2 (a) of the Architectural Agreement is the word “defend” mentioned, or is
any obligation to defend anyone set forth. To the contrary, in its specific language, form, structure, and in
context, it was clearly intended to encompass only an obligation to indemnify, and only under narrowly
circumscribed conditions. First, all operative words are so constrained [e.g. “indemnify and hold harmless",
“Indemnified Parties”, “Indemnified Party” and “indemnification’]. Second, the form and structure of the
paragraph, and the other words in it, demonstrate such an intent [e.g. the characterization of all matters to
be indemnified as “Losses”, and reference to attorney fees and costs for “carrying out the terms of any
judgment, settlement, consent decree, stipulated judgment or other partial or complete termination of an

action”; such does not refer, even in passing, to recovery of defense costs. Third, the other language is
-12-

HKS, INC.'S RESPONSE TO SUPPLEMENTAL MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MISSION PLACE’S MOTION FOR SUMMARY ADJUDICATIONnot only inconsistent with an intent to defend, but incompatible with it. That is, a limitation on recovery for
“Losses” “arising or resulting from” (not alleged to arise or result from) presuppose a determination as to
causation. There is a further limitation related to a substantive determination of the bases for liability
(‘misconduct’, breach of the contract, or “negligent act, error or omission’), further manifesting such an
intent. Finally, the statement that the obligation does not apply to Losses caused by the “active, passive,
or concurrent negligence or willful misconduct” on the part of any Indemnified Party necessarily
presupposes an adjudication of these issues, and cannot be reconciled with a prior duty to defend.

As noted at length in the opposition to the motion for summary adjudication [Opposition, pgs. 13-
17], this clause is completely different, and far more restrictive than those considered in Crawford v.
Weather Shield Mfg. Co. (2008) 44 Cal.4 541 and UDC-Universal Development v. CH2M Hill (2010) 181
Cal, App.4t 10, such that those cases provide no basis for the imposition of a pre-trial obligation to defend.
Here, there is no language expressly requiring a defense. In this indemnity provision, Mission Place must
demonstrate that the claims “resulted from” the conduct of any HKS entity; it has not, and countervailing
evidence has been presented. Article 7.2 further requires a party seeking indemnity to demonstrate that
the claims “resulted from” the “misconduct or any negligent act, error or omission” of any HKS entity; it has
not, and countervailing evidence has been presented. Finally, under the language of the provision, Mission
Place must demonstrate that the claims were not, in fact, occasioned by the “active, passive or concurrent
negligence” of the indemnified parties or those for whom or which they are or might be liable; it has not,
and countervailing evidence has been presented’, The latter section of the clause is itself dispositive, for if
a naked assertion by plaintiff that HKS was at fault is sufficient to trigger a defense obligation, than under

the same logic and rationale, the very same claim by plaintiff that the developers are at fault must be

‘0 In fact, by the time this motion is heard, it is anticipated that there will be one or more motions on file by plaintiff
relating to class certifications, which HKS has been informed will detail, with specificity, some of the evidence
demonstrating the bases for the liability of Mission Place and/those under assignment from which it takes, and further]
demonstrating the bar of this provision to the indemnity claim.
-Be
HKS, ING.’S RESPONSE TO SUPPLEMENTAL MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MISSION PLACE’S MOTION FOR SUMMARY ADJUDICATIONequally sufficient to defeat a defense obligation. Simply put, these are factual matters, the resolution of

which can only be determined at trial and the motion ought to be denied.

vi
CROSS-COMPLAINANTS HAVE NOT ESTABLISHED DAMAGES AND TRIABLE ISSUES OF FACT

EXIST IN THAT REGARD

HKS has previously noted [Opposition, pgs. 17-18], in the context of a defense and indemnity
claims where an insurer is providing the person seeking indemnity a defense as to the plaintiff's claims,
there are no damages; it is only the insurer that can bring the claim [See e.g. Bramalea v. Reliable Interiors,
Inc. (2004) 119 Cal. App. 4th 468, 472-475 (where insurer pays costs of defense, insured cannot recover
on cross-complaint for express indemnity as the collateral source rule does not apply to breach of contract

causes of action; equitable indemnity claim also barred); Emerald Bay Community Assn. v. Golden Eagle

Ins. Corp. (2005) 130 Cal.App.4th 1078, 1088-1089; Interstate Fire and Cas. Ins. Co. v. Cleveland

Wrecking Co. (2010) 182 Cal.App.4th 23, 34-35 (upholding Bramalea, but noting that insurer could bring a

subrogation action to recover in its own name)]. Damages, of course, are an element of the cause of
action (and the predicate to an indemnity/defense claim), and as such, it is the moving party that has the
burden of showing that the defense costs it has incurred have not and are not being paid.

Here, Mission Place has done nothing to meet that burden. It did not address this issue in its
original reply and has not done so in its supplemental submission. The evidence, however, is that it has no
damages, or at least, that a triable issue of material fact exists in that regard. First, Mission Place has
lodged a “Statement of Insurance”, which demonstrates many millions of dollars of coverage [Amended
Separate Statement of Material Facts, No. 25]. Second, the supplemental evidence demonstrates that it
has no damages, as its defense costs are covered by and are being paid on its behalf by its insurer
[Amended Separate Statement of Material Facts, No. 29 and 30]. As such, yet further grounds for denial of

this motion are showed.

-14-

HKS, INC.’S RESPONSE TO SUPPLEMENTAL MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MISSION PLACE’S MOTION FOR SUMMARY ADJUDICATIONvil

AS A PRACTICAL MATTER THE DETERMINATION OF DEFENSE OBLIGATIONS OUGHT BE

ADDRESSED AT TRIAL

There are many reasons why this motion ought to be denied, both as a matter of fact and law.
However, Mission Place always has the right to seek fo recover its defense costs as part of its indemnity
cross-complaint. Since trial is set to commence in six (6) months, it will hardly be prejudiced by the denial
of this motion. Moreover, the negative consequences upon the handling of the case if this motion were
granted at this late juncture would be enormous. There is a very real possibility that new counsel would be
secured for Mission Place, which would necessitate a further continuance of the trial date, something which
is particularly problematic, given that the five (5) year statute is to run not to long thereafter. Even if that
did not take place, if the motion were granted, such would be profoundly disruptive and, given that the

matter could and should be decided with the indemnity claim and at trial, the motion ought be denied.

DATED: August 6, 2012 SCHWARTZ & JANZEN, LLP

STEVEN H. SCHWARTZ
NOEL E. MACAULAY
Attorneys for Defendant,

-15-
HKS, INC,’S RESPONSE TO SUPPLEMENTAL MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MISSION PLACE’S MOTION FOR SUMMARY ADJUDICATIONSCHWARTZ & JANZEN

oO me IN DW FF WN

|

| Los Angeles, CA 90025-7117. On August 7, 2012, | served the within documents:

PROOF OF SERVICE

Beacon vs. Catellus, et al.
San Francisco County Superior Court Case No. CGC 08-478453

STATE OF CALIFORNIA
COUNTY OF SAN FRANCISCO )

SS. .

|, Annette Tucker, declare: | am a resident of the State of California and over the age of eighteen
years, and not a party to the within action; my business address is 12100 Wilshire Boulevard, Suite 1125,

¢ HKS, INC.'S RESPONSE TO SUPPLEMENTAL MEMORANDUM OF POINTS AND AUTHORITIES
IN SUPPORT OF MISSION PLACE’S MOTION FOR SUMMARY ADJUDICATION

by transmitting via facsimile a true copy of said document from facsimile machine whose
number is 310/207-3344, pursuant to California Rules of Court, Rule 2.306. The facsimile
machine | used complied with Rule 2.304(3) and no error was reported by the machine.

BY E-MAIL OR ELECTRONIC TRANSMISSION: Based on a court order or an
agreement of the parties to accept service by e-mail or electronic transmission, | caused
the document(s) to be sent from e-mail address atucker@si-law.com to the persons at the
e-mail addresses listed in the Service List. | did not receive, within a reasonable time after
the transmission, any electronic message or other indication that the transmission was
unsuccessful.

by placing the document(s) listed above in a sealed envelope with postage thereon fully
prepaid, in the United States mail at Los Angeles, California addressed as set forth below.

by placing the document(s) listed above in a sealed Overnite Express envelope and
affixing a pre-paid air bill, and causing the envelope to be delivered to a Overnite Express
agent for overnight delivery to

by personally delivering the document(s) listed above to the person(s) at the address(es)
set forth below.

| am readily familiar with the firm's practice of collection and processing correspondence for mailing.
Under that practice it would be deposited with the U.S. Postal Service on that same day with postage
thereon fully prepaid in the ordinary course of business. | am aware that on motion of the party served,
service is presumed invalid if postal cancellation date or postage meter date is more than one day after date
of deposit for mailing in affidavit.

| declare under penalty of perjury under the |

s of the State of California that the above is true and
correct. Executed on August 7, 2012 at Los Angel i

alifornia.

1162.006

PROOF OF SERVICEowe ND WH PF YY =

RP NN KN NY NN KY NY ee ee me
eo UW A A KF ON FF SO we RD BDH BF WN =

SERVICE LIST
Ann Rankin, Est Kenneth Katzoff
Terry Wilkens, E: KATZOFF & RIGGS
LAW OFFICES oF ANN RANKIN 1500 Park Ave #300

3911 Harrison St

Oakland, CA 94611-4536
Phone Number (510) 653-8886
Fax Number (510) 653-8889
arankin@annrankin.com
twilkens@annrankin.com

Attomeys for Plaintiff BEACON RESIDENTIAL

Emeryville, CA 94608

Phone Number (510) 597-1990
Fax Number (510) 597-0295
kkatzoff@katzoffrigas.com
sshim@katzoffriggs.com

Attorneys for Plaintiff BEACON RESIDENTIAL
COMMUNITY ASSOCIATION

COMMUNITY ASSOCIATION
Peter J. Laufenberg, Esq. | Steven Mi Cvitanovic, Esq.
Gregory Jung, Esq HAIGHT, BROWN & BONESTEEL

WENDEL, ROSEN, BLACK & DEAN
1111 Broadway, 24% Floor
Oakland, CA 4607-4036

(510) 834-6600/FAX (510) 834-1928
laufenberg@wendel.com
GJung@wendel.com
Chansen@wendel.com

Attorneys for Defendants MISSION PLACE LLC;
CENTURION REAL ESTATE PARTNERS, LLC;
MISSION PLACE MEZZ HOLDINGS LLC,
erroneously named as MISSION PLACE
HOLDINGS LLC; MISSION PLACE MEZZANINE,
LLC; and MISSION PLACE PARTNERS, LLC.

71 Stevenson Street, 20th Floor
San Francisco, CA 94105-2981
(415) 546-7500/FAX (415) 546-7505
scvitanovic@hbblaw.com

Co-Counsel for Defendants MISSION PLACE LLC;
CENTURION REAL ESTATE PARTNERS, LLC;
MISSION PLACE MEZZ HOLDINGS LLC,
erroneously named as MISSION PLACE
HOLDINGS LLC; MISSION PLACE MEZZANINE,
LLC; and MISSION PLACE PARTNERS, LLC.

John A. Koeppel, Esq.

Todd J. Wenzel, Esq.

ROPERS, MAJESKI, KOHN & BENTLEY PC
201 Spear Street, Suite 1000

San Francisco + CA + 94105-1667

Office: (415) 543-4800

Fax: (415) 972-6301

TWenzel@rmkb.com

JKoeppel@mkb.com

Attorneys for Defendants PROLOGIS;THIRD AND
KING INVESTORS LLC; CATELLUS URBAN
DEVELOPMENT CORPORATION;

CATELLUS DEVELOPMENT CORPORATION,
CATELLUS THIRD AND KING INVESTORS LLC;
CATELLUS COMMERCIAL DEVELOPMENT
CORPORATION; CATELLUS OPERATING
LIMITED PARTNERSHIP

David S. Webster, Esq.

Mark J. D'Argenio, Esq.

WOOD, SMITH, HENNING & BERMAN LLP
1401 Willow Pass Road, Suite 700
Concord, CA 94520-7982

(925) 356-8200/FAX (925) 356-8250
dwebster@wshblaw.com
mdargenio@wshblaw.com

Attorneys for Defendants PROLOGIS; THIRD AND
KING INVESTORS LLC; CATELLUS URBAN
DEVELOPMENT CORPORATION; CATELLUS
DEVELOPMENT CORPORATION, CATELLUS
THIRD

AND KING INVESTORS LLC; CATELLUS
COMMERCIAL DEVELOPMENT CORPORATION;
CATELLUS OPERATING LIMITED
PARTNERSHIP

1

SERVICE LISTS. Mitchell Kaplan, Esq.
Gregory Hanson, Esq.
GORDON & REES LLP

275 Battery Street, Suite 2000
San Francisco, CA 94111
Main Phone: (415) 986-5900
Fax: (415) 986-8054
SKaplan@gordonrees.com
ghanson@gordonrees.com

Attorneys for WEBCOR Builders, INC.; WEBCOR
CONSTRUCTION, INC., individually and dba
WEBCOR BUILDERS; WEBCOR
CONSTRUCTION LP, individually and dba
WEBCOR BUILDERS

Samuel J. Muir, a

Erin R. Dunkerly, E:

COLLINS COLLINS HHUIR + STEWART LLP
1100 El Centro Street

South Pasadena, CA 91030
smuir@ccmslaw.com
edunkerly@ccmslaw.com

Tel: 626/243-1100
Fax: 626/243-1111

Attorneys for Defendant
WEBCOR CONSTRUCTION, INC. dba WEBCOR
BUILDERS

Kevin P. McCarthy, Esq.

Fred Trudeau, Esq.

MCCARTHY & MCCARTHY, LLP
492 Ninth St, Suite 2