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SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN FRANCISCO
Document Scanning Lead Sheet
Dec-09-2011 1:51 pm
Case Number: CGC-10-498405
Filing Date: Dec-09-2011 1:51
Juke Box: 001 Image: 03414999
DECLARATION
PERFORMING ARTS LLC, VS. KILLARNEY CONSTRUCTION CO., INC. et al
001003414999
instructions:
Please place this sheet on top of the document to be scanned.LEWIS
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LEWIS BRISBOIS BISGAARD & SMITH LLP san ‘ad :
SUZANNE M. MARTIN, SB# 167079 8 Canstiy
Email: martin@lbbslaw.com
BIO espe
KELTON M. BURGESS, SB# 256621 DEC 09 2041
Email: burgess@lbbslaw.com .
One Sansome Street, Suite 1400 mente 2 THE COUR:
San Francisco, California 94104 .
Telephone: 415.362.2580 Dapiity Ten,
Facsimile: 415.434.0882
Attorneys for Defendants and Cross-Defendants CULLINANE CONSTRUCTION, AL NORMAN
MECHANICAL, INC., and Intervenor ASPEN INSURANCE UK, LTD on behalf of Defendant and
Cross-Defendant KILLARNEY CONSTRUCTION CO., a California suspended corporation
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN FRANCISCO
PERFORMING ARTS, LCC, a Delaware | CASE NO. CGC-10498405
limited liability company,
a DECLARATION OF KELTON M. BURGESS
Plaintiff, IN SUPPORT OF DEFENDANTS’
CULLENANE CONSTRUCTION, AL
NORMAN MECHANICAL, INC, AND
KILLARNEY CONSTRUCTION CO., INC., | INTERVENOR ASPEN INSURANCE UK,
MID-MARKET DEVELOPMENT CO., INC., | LTD ON BEHALF OF DEFENDANT AND
CARDINAL CONSTRUCTION, AL NORMAN | CROSS-DEFENDANT KILLARNEY
MECHANICAL, INC., MICHAEL MURRAY, | CONSTRUCTION CO., A CALIFORNIA
Vv.
and DOES 1 THROUGH 200, inclusive, SUSPENDED CORPORATION MOTION
FOR SUMMARY JUDGMENT
Defendant.
Date: February 23, 2012
Time: 9:30 a.m.
Dept.: 302
ACTION FILED: April 7, 2010
TRIAL DATE: March 26, 2012
I, Kelton M. Burgess, declare and state as follows:
1. 1 am an attorney at law and duly licensed to practice before all courts of the State of
California, and ] am an associate with the law firm of Lewis Brisbois Bisgaard & Smith, LLP,
attorneys of record for moving parties CULLINANE CONSTRUCTION, AL NORMAN
MECHANICAL, INC., and Intervenor ASPEN INSURANCE UK, LTD on behalf of Defendant and
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4830-1305-8062.1
DECT ARATION QF KELTON M RIIRGESS IN STIPPART AF MOTION FOR STIMMARY TIINGMENTLEWIS
BRISBOIS
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Cross-Defendant KILLARNEY CONSTRUCTION CO., a California suspended corporation
(hereinafter “Defendants”).
1. Plaintiff's Second Amended Complaint, filed on September 13, 2010, asserts a cause of
action for Negligence against Cullinane Construction, Al Norman Mechanical, Inc. and Killarney
Construction, Co., Inc. A true and correct copy of the document is attached hereto as Exhibit “A.”
2, I have read the Loan Purchase Agreement between United Commercial Bank and
Performing Arts, LLC and attach a true and correct copy hereto as Exhibit “B.” Section 3:
Agreement to Purchase, on page 6 of the Agreement states the Purchaser is purchasing “AS IS.” Page
14 of the Agreement further states the Purchaser is purchasing the Loan Assets “as is.”
3. By and through the execution of a Stipulated Protective Order, Defendants are in
reccipt of the deposition transcript of Mr. Joe Cassidy, taken in the matter in Re: 973 Market Street
Associates, LLC, Debtor, United States Bankruptcy Case No. 09-32014 DM 11 on December 8, 2009.
I have read the deposition transcript and know the contents thereof.
4. On pages 25:25 and leading to 26:19-21 of the Cassidy transcript, the deponent
confirms his brother was the prior owner of 973 Market Street and sold the property to Michael
Murray. A true and correct copy of the document is attached hereto as Exhibit “A.”
5. Thave reviewed the document formally known as Construction Loan Agreement, dated
August 3, 2007, between United Commercial Bank and 973 Market Associates. The principal amount
stated in the Construction loan Agreement is $20 million. A true and correct copy of the document is
attached hereto as Exhibit “D.”
6. Defendant KILLARNEY CONSTRUCTION CO., INC., was the general contractor
subcontractor involved in the construction activities which were undertaken at 973 Market Street, San
Francisco, California and whose interests are represented by Intervenor ASPEN INSURANCE UK,
LTD on behalf of Defendant and Cross-Defendant KILLARNEY CONSTRUCTION CO., a
California suspended corporation.
7. Attached hereto as Exhibit “E” is a true and correct copy of Page 12 and Page 13 of Joe
Cassidy’s Deposition transcript wherein Mr. Cassidy confirms he is the owner of Centrix Builders
4830-1305-8062.1
NECT AR ATION OF KEI TAN M RIIRGESS IN STIPPART AR MOTION FOR STIMMARY TINGMENT,LEWIS
BRISBOIS
BISGAARD
8. Attached hereto as Exhibit “F” is a true and correct copy of Page 14 of Joe Cassidy’s
Deposition transcript wherein he confirms he is the owner of Performing Arts, LLC.
9. Attached hereto as Exhibit “G” is a true and correct copy of Page 32 of Joe Cassidy’s
Deposition transcript wherein he testifies he was requested to provide an estimate and walk the
building with the original owners.
10. Attached hereto as Exhibit “H” is a true and correct copy of Page 45 of Joe Cassidy’s
Deposition transcript wherein he testifies it would take a month to six weeks to prepare a very detailed
estimate.
11. Attached hereto as Exhibit “I” is a true and correct copy of Page 48 of Joe Cassidy’s
Deposition transcript wherein he confirms Centrix spoke with the building inspectors, electrical and
plumbing inspectors as well as the existing subcontractors and replacement subcontractors to prepare
the estimate.
12. Attached hereto as Exhibit “J” is a true and correct copy of Page 128 of Joe Cassidy’s
Deposition transcript wherein he confirms he purchased the Construction Loan for $3.6 to $3.8
million.
13. Attached hereto as Exhibit “K” is a true and correct copy the Centrix Construction bid,
dated November 7, 2008 in the amount of $12,610,552.00.
14. Attached hereto as Exhibit “L” is a true and correct copy of Page 30 of Joe Cassidy's
Deposition transcript wherein he confirms his understanding that the construction activities were
halted at some point.
I declare under penalty of perjury under the laws of the state of California that the foregoing is
true and correct.
Dated: December 9, 2011 nt A
elton M. Burg:
4830-1305-8062.1
DFECT ARATION OF KFI TON M RITRGESS IN SUPPORT OF MOTION FAR STIMMARY ILINGMFENTLEWIS
BRISBOIS
BISGAARD
& SMITH LP
ATOR AT LAW
eC eo aN
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File No, 28303.64 CALIFORNIA STATE COURT PROOF OF SERVICE
Performing Arts, LLC, et al. y, Killarney Construction Co., Inc., et al.
San Francisco County Superior Court No. CGC-10498405
STATE OF CALIFORNIA, COUNTY OF SAN FRANCISCO
At the time of service, I was over 18 years of age and not a party to the action. My business
address is One Sansome Street, Suite 1400, San Francisco, CA 94104.
On December 9, 2011, I served the following document:
DECLARATION OF KELTON M. BURGESS IN SUPPORT OF DEFENDANTS’
CULLINANE CONSTRUCTION, AL NORMAN MECHANICAL, INC. AND INTERVENOR
ASPEN INSURANCE UK, LTD ON BEHALF OF DEFENDANT AND CROSS-DEFENDANT
KILLARNEY CONSTRUCTION CO., A CALIFORNIA SUSPENDED CORPORATION
MOTION FOR SUMMARY JUDGMENT
1 served the document on the following persons at the following addresses (including fax
numbers and email addresses, if applicable):
Gary A. Angel, Esq. Jeffrey H. Lowenthal, Esq.
Frear Stephen Schmid, Esq. Steyer, Lowenthal, Boodrookas, Alvarez & Smith
Law Offices of Gary A. Angel LLP
177 Post Street, 8th Floor One California Street, 3rd Floor
San Francisco, CA 94108 San Francisco, CA 94111
Tel: 415.788.5935 Tel: 415.421.3400
Fax: 415.788.5958 Fax: 415.421.2234
Attorney for Plaintiff Email: jlowenthal@steyerlaw.com
Co-Counsel for Plaintiff
John G. Dooling, Esq. Dion N, Cominos, Esq.
Ropers, Majeski, Kohn & Bentley Mark C. Russell, Esq.
201 Spear Street, Suite 1000 Olivia J. Bradbury, Esq.
San Francisco, CA 94105 Gordon & Rees
Tel: 415.543.4800 275 Battery Street, Suite 2000
Fax: 415.972.6301 San Francisco, CA 94111
Email: jdooling@ropers.com Tel: 415.986.5900
Attorneys for Defendant/Cross-Complainant | Fax: 415.986.8054
Construction Testing Services, Inc. Email: dcominos@gordonrees.com
mrussell@gordonrees.com
obradbury@gordonrees.com
Attorneys for Defendant/Cross-Defendant Cardinal
Consulting Inc.
4830-1305-8062.1
PROOF OF SERVICELEWIS
BRISBOIS
BISGAARD
SMITH LP
ATTORNES A LA
Coque K. Dion, Esq.
Manasian & Rougeau LLP
400 Montgomery Street, Suite 1000
San Francisco, CA 94104
Tel: 415.291.8425
Fax: 415.291.8426
Email: dion@mrlawsf.com
Attorneys for Defendants Mid-Market Development
Co., Ine. and Michael Murray
The document was served by the following means:
(BY PERSONAL SERVICE) [ caused to be personally delivered the document to the persons at
the addresses listed above. El For a party represented by an attorney, delivery was made to the
attorney or at the attorney’s office by leaving the documents in an envelope or package clearly labeled
to identify the attorney being served with a receptionist or individual in charge of the office
D2,
ane Wenger
Dated: December 9, 2011
Mari:
4839-7322-2414.1
PROOF OF SERVICEExh 4oon 2 mB WN
10
GARY A. ANGEL, CSB No. 70006 Ff
FREAR STEPHEN SCHMID, CSB No, 96089 id
LAW OFFICES OF GARY A’ ANGEL in Mt,
177 POST STREET, EIGHTH FLOOR
SAN FRANCISCO, CA 94108 Sth 79,
TELEPHONE: (415) 788-5935 CLERK q
FACSIMILE: (415) 788-5958 ay. Of
JEFFREY H, LOWENTHAL, CSB No.111763 ~
STEYER LOWENTHAL BOODROOKAS
ALVAREZ & SMITH LLP
ONE CALIFORNIA STREET, THIRD FLOOR
SAN FRANCISCO, CA 94111
TELEPHONE: (415) 421-3400
FACSIMILE: (415) 421-2234
Attorneys for Plaintiff
PERFORMING ARTS, LLC
SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN FRANCISCO
UNLIMITED JURISDICTION
PERFORMING ARTS, LLC, a Delaware No. CGC-10-498405
limited liability company,
SECOND AMENDED COMPLAINT
Plaintiff, FOR DAMAGES
Vv.
KILLARNEY CONSTRUCTION CO.,
INC., MID-MARKET DEVELOPMENT
CO., INC., CARDINAL CONSULTING,
INC., CULLINANE CONSTRUCTION,
AL NORMAN MECHANICAL, INC.,
MICHAEL MURRAY, CONSTRUCTION
TESTING SERVICES, and DOES 1
THROUGH 200, inclusive,
Defendants.
Plaintiff PERFORMING ARTS, LLC alleges against defendants, and each of
them, the following:
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SECOND AMENCED COMPLAINT FOR DAMAGES.aman DOD oO fF WN =
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FIRST CAUSE OF ACTION
(Negligence — As Against all Defendants
‘xcept Cardinal Consulting, Inc.]
1. Plaintiff PERFORMING ARTS, LLC is a Delaware limited liability
company. At all times alleged herein, piaintiff or its predecessors were the owners of
that certain real property commonly known as 973 Market Street, San Francisco,
California (the "Subject Property"). Plaintiff also is the assignee and successor in
interest by way of written agreements dated June 25, 2009 to the construction lender
for the project, United Commercial Bank, including any and all claims, rights, and
causes of action of said bank. The Subject Property (a multi-story, mixed use building)
was being renovated and retrofitted and otherwise subject to construction work
(hereinafter Construction-Related Activity) by or with the aid, contributions, materials,
and services of defendants named herein.
2. Defendants KILLARNEY CONSTRUCTION CO., INC., MID-MARKET
DEVELOPMENT CO., INC., CARDINAL CONSULTING, INC., CULLINANE
CONSTRUCTION, AL NORMAN MECHANICAL, INC., MICHAEL MURRAY, and
CONSTRUCTION TESTING SERVICES were at all times relevant hereto doing
business in San Francisco, California. Said defendants, except for MICHAEL
MURRAY, an individual, are business entities, form unknown.
3. Plaintiff is informed and believes that at all times alleged herein,
defendants were at all time relevant involved in the Construction-Related Activity in
various capacities and in their respective capacities negligently caused or negligently
permitted the defective, substandard, illegal, unworkmanlike and negligent
Construction-Related Activity complained of below which proximately and legally
caused the damages to plaintiff as set forth below.
4. The true names and capacities, whether individual, corporate, associate
or otherwise, of defendants Does 1 through 200, inclusive, are presently unknown to
plaintiff, and plaintiff therefore sues said defendants by said fictitious names. Plaintiff is
informed and believes that each of the defendants designated herein as a fictitiously
2
SECOND AMENDED COMPLAINT FOR DAMAGESoon Oak wn +
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named defendant is in some manner responsible for the events and happenings herein
referred to and for plaintiff's damages resulting therefrom as herein alleged.
5. Plaintiff is informed and believes that Does 1 through 100 are design
professionals, contractors, subcontractors, and/or material suppliers who are
responsible for the defective work which was performed on the Subject Property.
6. Plaintiff is informed and believes that Does 101 through 140 are the alter
egos of the other defendants and were each the owner, shareholder, and/or promoter
of each of the other defendants. Plaintiff is informed and believes that there is such a
unity of interest and ownership between each of said defendants that such individuality
and separateness, if it ever existed, has ceased and each defendant is the alter ego of
the other defendants in that: 1) said defendants were a mere shell, sham and conduit,
without capital, assets, stock, or stockholders through which the other defendants
carried on their business, exercising complete control and dominance of such
businesses to such an extent that at all times herein mentioned they did not in fact exist
as separate entities; 2) said defendants were conceived, intended and used by the
other defendants as a device to avoid individual liability; 3) said defendants were
inadequately capitalized; 4) said defendants used and commingled the assets of each
of the other defendants and caused assets to be transferred between each other
without adequate consideration and transferred assets between each other in order to
evade payment of obligations to creditors; and 5) said defendants carried out the
business and activities alleged herein without directors‘ or shareholders' meetings and
without the maintenance of records, minutes or corporate proceedings.
7. Plaintiff is informed and believes that adherence to the fiction of the
separate existence of said defendants as entities distinct from the other defendants
would permit an abuse of the corporate privilege and would sanction fraud in that
plaintiff who, having acted without knowledge of the aforementioned, will be unable to
recover from the real perpetrators and instigators of the deceptive practices alleged
herein because defendants are hiding behind the veil of other defendants, which
3
SECOND AMENDED COMELAINT FOR DAMAGESaon Oo non & WwW NH =
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plaintiff is informed and believes lack sufficient assets to compensate plaintiffs for its
damages.
8. Plaintiff is informed and believes that Does 141 through 175 are the
successors of each of the other defendants named herein and has assumed each of
the obligations and all liabilities of each of the remaining defendants in that: 1) each of
the defendants has expressly and/or impliedly agreed to assume the obligations and
liabilities of each of the other defendants; 2) each of the defendants has consolidated
and/or merged with the remaining defendants and is a continuation of each of the
remaining defendants; and 3) each of the defendants has fraudulently transferred
assets to the others for the purpose of escaping liability to creditors.
9. Plaintiff is informed and believes that at all times relevant hereto, each of
the defendants was the owner, agent, representative, servant, joint venturer, partner,
consultant and/or employee of each of the remaining defendants, and in doing or failing
to do the things herein mentioned, was acting within the course and scope of its
authority as such owner, agent, representative, servant, joint venturer, partner,
consultant and/or employee, with the permission, consent, approval, and ratification of
the other defendants.
10. Plaintiff is informed and believes that within the last three (3) years,
defendants, and each of them, designed, constructed, and/or supplied materials or
services to/for the Subject Property relative to the Construction-Related Activity.
11. Plaintiff is informed and believes that defendants, and each of them,
breached their duty of care, failed to exercise reasonable care, negligently failed to
comply with applicable building codes, negligently failed to provide services in a
workmanlike and professional fashion, and negligently failed to comply with the plans
and specifications in that they failed to properly design, plan, guard, protect, engineer,
supervise, inspect, investigate, prepare, provide services, provide materials to,
construct, renovate, monitor, and/or retrofit the Subject Property or otherwise
negligently contributed to the Construction-Related Activity, causing, among other
4
SECOND AMENDED COMPLAINT FOR DAMAGES.=
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things, the following defects, losses, and damages:
a. Improper concrete work;
b. Improper window installation and work;
c. Improper plumbing installation and work;
d. Improper design and execution of plans and designs;
e. Improper inspection;
f. Improper supervision and control of the Subject Property and
personal property located thereat or intended for use in the
Construction-Related Activity; and
g. General vandalism, theft, and malicious mischief at the Subject
Property,
42. As a proximate and legal result of defendants’ negligence and
misconduct, the Subject Property and the work, services, and materials provided for the
Subject Property and the Construction-Related Activity thereat were and are defective,
below the standard of care, not reasonably fit for the intended purposes, and
unworkmanlike, and plaintiff has been, and continues to be damaged in an amount to
be proven at trial.
43. Asa further proximate and legal result of defendants’ negligence and
misconduct, plaintiff will incur and/or has incurred repair costs, relocation expenses,
loss of use, loss of rents and loss of market value in an amount to be proven at trial.
14. Asa further proximate and legal result of defendants’ negligence and
misconduct, plaintiff has been required to expend sums to investigate and make
temporary repairs to the Subject Property in an amount to be proven at trial.
SECOND CAUSE OF ACTION
[Breach of Contract — As Against Defendant Cardinal Consulting, Inc.]
145. Plaintiff incorporates and realleges as though set forth in whole, the
allegations of paragraphs 1 through 14 above.
16. Plaintiff's predecessor-in-interest, United Commercial Bank, was the
5
‘SECOND AMENDED COMPLAINT FOR DAMAGES:=
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lender for the subject construction work at the subject property, and it duly assigned to
plaintiff any and all rights said bank had with reference to the subject construction
project, including but not limited to any and all choses in action it had with reference to
said project.
17. Plaintiff's predecessor-in-interest, United Commercial Bank, entered into a
consulting service master agreement with Cardinal Consulting, Inc. (a true and correct
copy of which is attached hereto as Exhibit 1 and incorporated by reference), whereby
Cardinal Consulting, Inc. agreed to perform and in fact did perform “Construction
Funding Inspection Reports” whereby Cardinal was obligated to inspect and report on
the work being performed at the construction site which reports served as a basis for
the bank to approve or reject the borrower's requests for the further funding of the
construction work, and whereby Cardinal would approve or reject payment requests of
the borrower in its reports to the bank. Cardinal agreed, represented, and warranted
that such services would be performed, findings obtained, and recommendations
prepared in a good and workmanlike manner.
18. Plaintiff and its predecessor in interest, United Commercial Bank,
performed all its obligations under the contract, except those matters which it was
excused from performing.
19. — Starting on or about September 13, 2007, defendant Cardinal breached
the contract by negligently performing its obligations under said contract, negligently
and wrongfully inspecting and reporting (and acted with gross negligence in its
inspection and reporting) of the progress being made at the construction site, and
negligently and/or in a grossly negligent fashion approved the borrower's application for
payment under the bank’s construction loan, knowing full well that the bank was
reasonably relying on Cardinal to reasonably perform its duties under said contract, and
whereby Cardinal knew that the bank had engaged Cardinal to give its expertise as to
whether the construction work had been completed and performed in a fashion such
that additional funding would be appropriate by the bank. Cardinal knew of its duty,
6
‘SECOND AMENDED COMPLAINT FOR DAMAGESoo ON ODO HO FE wD ND
knew of the ramifications to the bank if it improperly performed its duties, and
notwithstanding such knowledge, negligently and in a grossly negligent fashion failed to
perform its duties, knowing full well that the bank was relying on it to accurately and
properly perform its duties as a precursor to the bank authorizing continued funding for
the borrower for the project. Cardinal knew of the damages that would result to the
bank if it breached its contractual duties.
20. Asa direct, proximate, and legal result of the breaches of the contract due
to faulty and negligent inspection reports, including Cardinal's improper approval and
recommended approval of the borrower's payment requests, the bank continued to fund
the construction, when in fact, had Cardinal acted in a reasonable and non-negligent
and proper fashion, and had Cardinal accurately and properly performed its inspections
and reported the status of construction, the bank would not have continued to extend
money to fund the construction, and the bank, and its successor, plaintiff herein, would
not have sustained the losses in an amount according to proof, but in excess of $11
million due to the wrongful inspection and reporting by Cardinal.
21. Asadirect, proximate, and legal result of Cardinal's negligent and faulty
inspection, reporting, including Cardinal's improper approval and recommended
approval of the borrower's payment requests to the bank, the bank, and thereby its
successor, plaintiff herein, was damaged and plaintiff, as successor-in-interest to the
bank, have been damaged in an amount according to proof, but in excess of $11
million.
THIRD CAUSE OF ACTION
[Negligence — As Against Defendant Cardinal Consulting, Inc.]
22. Plaintiff incorporates and realleges as if set forth in full, the allegations of
paragraphs 1 through 21 above.
23. Plaintiff's predecessor-in-interest, United Commercial Bank, was the
lender for the subject construction work at the subject property, and it duly assigned to
plaintiff any and all rights said bank had with reference to the subject construction
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SECOND AMENDED COMPLAINT FOR DAMAGESCoo MW N OD HM Fw =
project, including but not limited to any and all choses in action it had with reference to
said project.
24. Plaintiffs predecessor-in-interest, United Commercial Bank, entered into
consulting service master agreement with Cardinal Consulting, Inc. (a true and correct
copy of which is attached hereto as Exhibit 1 and incorporated by reference) whereby
Cardinal Consulting, inc. agreed to perform and in fact did perform “Construction
Funding Inspection Reports” whereby Cardinal was obligated to inspect and report on
the work being performed at the construction site, which reports served as a basis for
the bank to approve or reject the borrower's requests for the further funding of the
construction work, and whereby Cardinal would approve and recommend for approval
or reject payment requests of the borrower in its reports to the bank.
25. — Starting on or about September 13, 2007, defendant Cardinal negligently
performed its obligations under said contract, negligently and wrongfully inspected and
reported (and acted with gross negligence in its inspection and reporting of) the
progress being made at the construction site, and negligently and/or in a grossly
negligent fashion approved the borrower's application for payment under the bank's
construction loan knowing full well that the bank was reasonably relying on Cardinal to
reasonably perform its duties under said contract, and whereby Cardinal knew that the
bank had engaged Cardinal to give its expertise as to whether the construction work
had been completed and performed in a fashion such that additional funding would be
appropriate by the bank. Cardinal knew of its duty, knew of the ramifications to the
bank if it improperly performing its duties, and notwithstanding such knowledge,
negligently and in a grossly negligent fashion failed to perform its duties, knowing full
well that the bank was relying on it to accurately and properly perform its duties as a
precursor to the bank authorizing continued funding for the borrower for the project.
26. As adirect, proximate, and legal result of the faulty and negligent
inspection reports, including Cardinal's improper approval and recommend approval of
the borrower's payment requests, the bank continued to fund the construction, when in
a
SECOND AMENDED COMPLAINT FOR DAMAGESfact, had Cardinal acted in a reasonable and non-negligent and proper fashion, and had
Cardinal accurately and properly performed its inspections and reported the status of
construction, the bank would not have continued to extend money to fund the
construction, and the bank, and its successor, plaintiff herein, would not have sustained
the losses in an amount according to proof, but in excess of $11 million due to the
wrongful inspection and reporting by Cardinal.
27. Asadirect, proximate, and legal resutt of Cardinal's negligent and faulty
inspection, reporting, including Cardinal's improper approval and recommend approval
of the borrower's payment requests to the bank, the bank, and thereby its successor,
plaintiff herein, was damaged and plaintiff, as successor-in-interest to the bank, have
been damaged in an amount according to proof, but in excess of $11 million.
WHEREFORE, plaintiff prays for judgment as follows:
FIRST CAUSE OF ACTION
1. For actual and special damages in an amount to be determined at trial but
in excess of $11 million;
2. For interest;
3. For costs of suit; and
4. For such further relief as the Court may deem just.
SECOND CAUSE OF ACTION
1. For actual and special damages in an amount to be determined at trial but
in excess of $11 million;
2. For interest;
3. For costs of suit; and
4. For such further relief as the Court may deem just.
THIRD CAUSE OF ACTION
1. For actual and special damages in an amount to be determined at trial but
in excess of $11 million;
2. For interest;
SECOND AMENDED COMPLAINT FOR DAMAGES:oo ON DW OD PF WD B
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3.
4.
Dated: September 13, 2010
SECOND AMENDED COMPLAINT FOR DAMAGES:
For costs of suit; and
For such further relief as the Court may deem just.
itt, Attorne $ for
Plaintiff PRFORMING ARTS,
10Unked Commerical Bank
January 14, 2002
Page 1
MASTER AGREEMENT
Cardinal Consulting Inc. {hereinafter referred to as CARDINAL) agrees to perform professional services
(hereinafter referred to as Services) for United Commerical Bank (here'nafter referred to as Lender).
Individual Project Agreements will be provided for each specific project delineating the scope of the work
provided to the lender, scope of the project and consultants fees. .
CARDINAL represents and warrants that CARDINAL Is an Independent contractor. This agreement does
not in any Way.create a relationship of principal and agent, employer and employee, partners, or joint
ventures, or any similar relationship between Lender and CARQINAL. This agreement and all subsequent
agreements shall be in accordance with California law.
L INDIVIDUAL PROJECT AGREEMENTS -
Supplemental agreements In the form of Individual Project Agreements will be provided by
CARDINAL to the lender for each specific project.
‘The supplemental IndWvidual Project Agreements will indicate the name of the project, the scape
of the project, the scope of CARDINAL's reviews and CARDINAL's fees for the projects.
Changes to the scope of work from the Individual Project Agreements should be confirmed in
wilting by the lender.
Tl. CARDINAL CONSULTING INC. OBLIGATIONS
A CARDINAL is to provide lender with written documentation of services provided in a
timely manner. If problems or concerns with the project are encountered by CARDINAL
during the course of CARDINAL's services, CARDINAL ts to timely notify Lender of such
problems or concerns.
B. CARDINAL shall retain as confidential all information and data fumished to CARDINAL by
lender which relate to Lender’s business, technologies, formulae, procedures, processes,
methods and shall not disclose such information to any third party or use, such
‘nformation except In connection with the administration of the project. CARDINAL shall
retain confidential ali information and data furnished to CARDINAL by lender's clients
which relate to business, technologies, formulae, procedures, processes, methods and
shall not disclose such information to any third party or use, such Information except in
connection with the administration of the project. CARDINAL may combine data from
specific projects for internal purposes or to provide Lender or others general information
regarding market conditions, subject to the restraint that the source of the data remains
confidential and only be included in a sum of multiple projects.
CARDINAL CONSULTING INC,
EXHBIT 1mL
United Commerda! Bank
January 14, 2002
Page 2
CG
CARDINAL represents and warrants that Services will be preformed, findings obtained,
and recommendations prepared in a good and workmanlike manner. CARDINAL is to
determine the means and methods of performance of services.
CARDINAL's services are to be provided for the Lender’s use only, and all such services
are not a representation to the Owner, Contractor or any other person or entity regarding
the quality of construction, compliance or conformity with contract documents, any legal
requirements, or other matters pertaining to the project. CARDINAL Is not to perform
the services of an architect, engineer, appraiser, environmental assessor, attomey,
contractor or any other professions or business requiring any license, and in addition,
CARDINAL does not assume obligations, responsibilities or liabilities for any parties
participating In this project. The Lender recognizes that CARDINAL Is not responsible for
design errors and omissions, and Is aot the superising architect.
CARDINAL agrees to carry a minimum of the following: Worker's Compensation
Insurance - $100,000 per accident; General Liability Insurance - $1,000,000 per
oocurrence; and Automobile Liability Insurance - $100,000 per occurrence.
CARDINAL agrees to hoki Lender harmless from and against loss, damage, Injury or
Habllity arising from the grossly negligent acts or omissions of CARDINAL, CARDINAL's
employees, agents or subcontractors. CARDINAL's contractual obligations of
Indemnification shall only apply in the event of negligence, error or other fault of
CARDINAL. In the event that both CARDINAL and Lender are adjudicated at fault with
respect to damage or injury sustained by dalmant, Consultant's obligations of
Indemnification shall onty be for that portion of the damage or Injury adjudicated to have
been the consequence of the negligence, error, or other fault of CARDINAL,
Services not otherwise provided for not included in the Individual Project Agreement shall
be billed hourly, based on a rate of $75 for @ project manager and $40 for secretarial
This may Include but Is not limited to verification of off-site stored materials or additional
meetings. - Costs for overnight mall services or messenger delivery shalt be bitled as an
additional cost If requested by lender.
LENDER'S OBLIGATIONS
To assist CARDINAL in the performances of the Services, Lender shall provide all
avaliable and necessary material, data and information pertaining to the specific project.
CARDINAL will provide a list of requested information with the Individual Project
Agreement. Lender Is to provide CARDINAL with any other Information received that
may give specific insight to the specific project Including but not limited to: credit
concems, previous problems with project partkipants or other information that
CARDINAL cannot readily obtain,
Lender shall retain as confidential alf information, report formats and data furnished to
Lender which relate to CARDINAL's business, technologies, formulae, procedures,
Processes, methods and shall not disdose such information to any third party or use,
such Information except In connection with the administration of the project.
Lender shall be responsible for payment of CARDINAL’s fees whether billed to lender or
third party.
CARDINAL CONSULTING INC.United Coramerical Bank
January 14, 2002
Page 3
oO
Invokes will be submitted to Lender or other party as determined by Lender upon
completion of services with payment due net 30 days after receipt of invoice, With each
Invoice CARDINAL shalll identify the project and report date, with emization of any other
fees Involved. Lender shall not be liable for the payment of any Federal, State or local
income taxes, social security, state unemployment or other similar taxes resutting from
Consultant’s providing of Services under this agreement. A service charge of 18% will be
added to all accounts which remain due and owing and unpaid for more than thirty ()
calendar days beyond the due date.
E. Lender agrees to hold CARDINAL harmless from and against loss, damage, Injury or
fabkity arising from the negligent acts.or omissions of Lender, Lender’s dients, Lenders
agents or Lender's employees, In the event that both CARDINAL and Lender are
adjudicated at fault with respect to damage or Injury sustalned by claimant, Lenders
obligations of indemnification shall only be for that portion of the damage or injuy
adjudicated to have been the consequence of the negligence, error, oF other fauit of
fer.
Ff Lander represents to CARDINAL that K has authorization from the Owner of the property
twallow CARDINAL to perform tts duties as provided herein.
TH. MISCELLANEOUS
The terms and conditions set forth In thls agreement and subsequent Individual Project
Agreements constitute the entire understanding of the parties relating to the provisions of the
Services by CARDINAL to the Lender. All proposals, offers and other communication related b
the provisions of these Services by CARDINAL, oral or written, are hereby superseded, except to
the extent that they have been expressly Incorporated,
LENDER ‘
pare! ou
DINAL CONSULTING INC.
BY! Sec) 0 Cs
TITLE:__President —
OATE:_1/12/02_
CARDINAL CONSULTING INC.ononnr On kk WH =
wm yNyNY DYN NHN NY NY SB BF Fest seeeoea
ow oak ON 2 6 oO @AN AH BF ODN |= OD
Re: Performing Arts, LLC v. Killarney Construction Co., Inc., etal.
PROOF OF SERVICE
| declare that:
| am over the age of 18 and not a party to the within action; my business address
is 177 Post Street, Suite 890, San Francisco, California, 94108.
On September 13, 2010, | served the following document(s):
1. SECOND AMENDED COMPLAINT FOR DAMAGES
on the parties in said action, by placing true copies thereof in sealed envelopes
addressed as shown below for service as designated below:
iX/ By First Class Mail - | caused each such envelope, with first-class postage
thereon ully prepaid, to be deposited in the United States mail at San Francisco,
aliromia.
{_! By Hand Delivery - | caused each such envelope, to be hand delivered to said
addresses),
/_/ By Facsimile - By transmitting a facsimile copy of the above document(s) to the
following addressee(s) at the following facsimile number(s):
Addressee(s):
Suzanne M. Martin, Esq.
LEWIS BRISBOIS BISGAARD & SMITH, LLP
One Sansome Street, Suite 1400
San Francisco, CA 94104
E-mail: martin@|bbslaw.com
Tel: 415-438-6616 Fax: 415-434-0882
[Attorneys for Defendant KILLARNEY CONSTRUCTION CO., INC.]
Mark C. Russell, Esq. E-mail: Mrussel@gordonrees.com
GORDON & REES LLP
Embarcadero Center West
275 Battery Street, Suite 2000
San Francisco, CA 94111
Tel.: 415-986-5900 Fax: 415-986-8054
[Attorneys for Defendant CARDINAL CONSULTING, INC.]
Coque K. Dion, Esq. E-mail: dion@nrlawsf.com
MANASIAN & ROUGEAU, LLP
400 Montgomery Street, Suite 1000
San Francisco, CA 94104
Tel: 415-291-8425, ext. 4 Fax: 415-291-8426
[Aatorneys for Defendants MICHAEL MURRAY and MID-MARKET DEVELOPMENT
CO., INC.}oO N DO A WH A
mp MH Ne NY NY NY NH DN BB Be eB we ew ea an a
ont nm ok WN = OO DN OW oO F&F WwW HY = 2
John G. Dooling, Esq. E-mail: jdooling@rmkb.com
Timothy A. Dolan, Esq. E-mail: tdolan@rmkb.com
ROPERS MAJESKI KOHN BENTLEY
201 Spear Street, Suite 1000
San Francisco, CA 94105-1667
Tel: 415-543-4800 Fax: 415-972-6301
[Attorneys for Defendant and X-Complainant CONSTRUCTION TESTING SERVICES,
NC]
Jeffrey H. Lowenthal, Esq.
STEYER LOWENTHAL BOODROOKAS
ALVAREZ & SMITH LLP
One California Street, Third Floor
San Francisco, CA 94111
Tel: 415-421-3400 Fax: 415-421-2234
[Attomeys for Plaintiff PERFORMING ARTS, LLC]
E-mail: jlowenthal@steyerlaw.com
| declare under penalty of perjury under the laws of the State of California that
the foregoing is true and correct and that this declaration was executed on September
13, 2010, at San Francisco, California.
Rose ChanEXHIBIT “B”
REDACTED IN ENTIRETYExh ©EXHIBIT “C”
REDACTED IN ENTIRETYEXHIBIT “D”
REDACTED IN ENTIRETYExpEXHIBIT “E”
REDACTED IN ENTIRETYEXHIBIT “F”
REDACTED IN ENTIRETYEXHIBIT “G”
REDACTED IN ENTIRETYEXHIBIT “H”
REDACTED IN ENTIRETYExhEXHIBIT “I”
REDACTED IN ENTIRETYExhEXHIBIT “J”
REDACTED IN ENTIRETYEXHIBIT “Kk”
REDACTED IN ENTIRETYEXHIBIT “L”
REDACTED IN ENTIRETY
Preview
SUPERIOR COURT OF CALIFORNIA COUNTY OF SAN FRANCISCO Document Scanning Lead Sheet Dec-09-2011 1:51 pm Case Number: CGC-10-498405 Filing Date: Dec-09-2011 1:51 Juke Box: 001 Image: 03414999 DECLARATION PERFORMING ARTS LLC, VS. KILLARNEY CONSTRUCTION CO., INC. et al 001003414999 instructions: Please place this sheet on top of the document to be scanned.LEWIS BRISBOIS aeRO Co 6 WDA HW WY BY = BRN NN ND eae es BON F&F SS 6 Be WADA AW ee BW NY SH SS LEWIS BRISBOIS BISGAARD & SMITH LLP san ‘ad : SUZANNE M. MARTIN, SB# 167079 8 Canstiy Email: martin@lbbslaw.com BIO espe KELTON M. BURGESS, SB# 256621 DEC 09 2041 Email: burgess@lbbslaw.com . One Sansome Street, Suite 1400 mente 2 THE COUR: San Francisco, California 94104 . Telephone: 415.362.2580 Dapiity Ten, Facsimile: 415.434.0882 Attorneys for Defendants and Cross-Defendants CULLINANE CONSTRUCTION, AL NORMAN MECHANICAL, INC., and Intervenor ASPEN INSURANCE UK, LTD on behalf of Defendant and Cross-Defendant KILLARNEY CONSTRUCTION CO., a California suspended corporation SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN FRANCISCO PERFORMING ARTS, LCC, a Delaware | CASE NO. CGC-10498405 limited liability company, a DECLARATION OF KELTON M. BURGESS Plaintiff, IN SUPPORT OF DEFENDANTS’ CULLENANE CONSTRUCTION, AL NORMAN MECHANICAL, INC, AND KILLARNEY CONSTRUCTION CO., INC., | INTERVENOR ASPEN INSURANCE UK, MID-MARKET DEVELOPMENT CO., INC., | LTD ON BEHALF OF DEFENDANT AND CARDINAL CONSTRUCTION, AL NORMAN | CROSS-DEFENDANT KILLARNEY MECHANICAL, INC., MICHAEL MURRAY, | CONSTRUCTION CO., A CALIFORNIA Vv. and DOES 1 THROUGH 200, inclusive, SUSPENDED CORPORATION MOTION FOR SUMMARY JUDGMENT Defendant. Date: February 23, 2012 Time: 9:30 a.m. Dept.: 302 ACTION FILED: April 7, 2010 TRIAL DATE: March 26, 2012 I, Kelton M. Burgess, declare and state as follows: 1. 1 am an attorney at law and duly licensed to practice before all courts of the State of California, and ] am an associate with the law firm of Lewis Brisbois Bisgaard & Smith, LLP, attorneys of record for moving parties CULLINANE CONSTRUCTION, AL NORMAN MECHANICAL, INC., and Intervenor ASPEN INSURANCE UK, LTD on behalf of Defendant and f ‘Qeonev@D) 4830-1305-8062.1 DECT ARATION QF KELTON M RIIRGESS IN STIPPART AF MOTION FOR STIMMARY TIINGMENTLEWIS BRISBOIS Be Co em Ia DH Bh YW Py MOM MONON meee a i eo aA A RF Bw My = SC wMH IW DAH Fe WY eS Cross-Defendant KILLARNEY CONSTRUCTION CO., a California suspended corporation (hereinafter “Defendants”). 1. Plaintiff's Second Amended Complaint, filed on September 13, 2010, asserts a cause of action for Negligence against Cullinane Construction, Al Norman Mechanical, Inc. and Killarney Construction, Co., Inc. A true and correct copy of the document is attached hereto as Exhibit “A.” 2, I have read the Loan Purchase Agreement between United Commercial Bank and Performing Arts, LLC and attach a true and correct copy hereto as Exhibit “B.” Section 3: Agreement to Purchase, on page 6 of the Agreement states the Purchaser is purchasing “AS IS.” Page 14 of the Agreement further states the Purchaser is purchasing the Loan Assets “as is.” 3. By and through the execution of a Stipulated Protective Order, Defendants are in reccipt of the deposition transcript of Mr. Joe Cassidy, taken in the matter in Re: 973 Market Street Associates, LLC, Debtor, United States Bankruptcy Case No. 09-32014 DM 11 on December 8, 2009. I have read the deposition transcript and know the contents thereof. 4. On pages 25:25 and leading to 26:19-21 of the Cassidy transcript, the deponent confirms his brother was the prior owner of 973 Market Street and sold the property to Michael Murray. A true and correct copy of the document is attached hereto as Exhibit “A.” 5. Thave reviewed the document formally known as Construction Loan Agreement, dated August 3, 2007, between United Commercial Bank and 973 Market Associates. The principal amount stated in the Construction loan Agreement is $20 million. A true and correct copy of the document is attached hereto as Exhibit “D.” 6. Defendant KILLARNEY CONSTRUCTION CO., INC., was the general contractor subcontractor involved in the construction activities which were undertaken at 973 Market Street, San Francisco, California and whose interests are represented by Intervenor ASPEN INSURANCE UK, LTD on behalf of Defendant and Cross-Defendant KILLARNEY CONSTRUCTION CO., a California suspended corporation. 7. Attached hereto as Exhibit “E” is a true and correct copy of Page 12 and Page 13 of Joe Cassidy’s Deposition transcript wherein Mr. Cassidy confirms he is the owner of Centrix Builders 4830-1305-8062.1 NECT AR ATION OF KEI TAN M RIIRGESS IN STIPPART AR MOTION FOR STIMMARY TINGMENT,LEWIS BRISBOIS BISGAARD 8. Attached hereto as Exhibit “F” is a true and correct copy of Page 14 of Joe Cassidy’s Deposition transcript wherein he confirms he is the owner of Performing Arts, LLC. 9. Attached hereto as Exhibit “G” is a true and correct copy of Page 32 of Joe Cassidy’s Deposition transcript wherein he testifies he was requested to provide an estimate and walk the building with the original owners. 10. Attached hereto as Exhibit “H” is a true and correct copy of Page 45 of Joe Cassidy’s Deposition transcript wherein he testifies it would take a month to six weeks to prepare a very detailed estimate. 11. Attached hereto as Exhibit “I” is a true and correct copy of Page 48 of Joe Cassidy’s Deposition transcript wherein he confirms Centrix spoke with the building inspectors, electrical and plumbing inspectors as well as the existing subcontractors and replacement subcontractors to prepare the estimate. 12. Attached hereto as Exhibit “J” is a true and correct copy of Page 128 of Joe Cassidy’s Deposition transcript wherein he confirms he purchased the Construction Loan for $3.6 to $3.8 million. 13. Attached hereto as Exhibit “K” is a true and correct copy the Centrix Construction bid, dated November 7, 2008 in the amount of $12,610,552.00. 14. Attached hereto as Exhibit “L” is a true and correct copy of Page 30 of Joe Cassidy's Deposition transcript wherein he confirms his understanding that the construction activities were halted at some point. I declare under penalty of perjury under the laws of the state of California that the foregoing is true and correct. Dated: December 9, 2011 nt A elton M. Burg: 4830-1305-8062.1 DFECT ARATION OF KFI TON M RITRGESS IN SUPPORT OF MOTION FAR STIMMARY ILINGMFENTLEWIS BRISBOIS BISGAARD & SMITH LP ATOR AT LAW eC eo aN 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 File No, 28303.64 CALIFORNIA STATE COURT PROOF OF SERVICE Performing Arts, LLC, et al. y, Killarney Construction Co., Inc., et al. San Francisco County Superior Court No. CGC-10498405 STATE OF CALIFORNIA, COUNTY OF SAN FRANCISCO At the time of service, I was over 18 years of age and not a party to the action. My business address is One Sansome Street, Suite 1400, San Francisco, CA 94104. On December 9, 2011, I served the following document: DECLARATION OF KELTON M. BURGESS IN SUPPORT OF DEFENDANTS’ CULLINANE CONSTRUCTION, AL NORMAN MECHANICAL, INC. AND INTERVENOR ASPEN INSURANCE UK, LTD ON BEHALF OF DEFENDANT AND CROSS-DEFENDANT KILLARNEY CONSTRUCTION CO., A CALIFORNIA SUSPENDED CORPORATION MOTION FOR SUMMARY JUDGMENT 1 served the document on the following persons at the following addresses (including fax numbers and email addresses, if applicable): Gary A. Angel, Esq. Jeffrey H. Lowenthal, Esq. Frear Stephen Schmid, Esq. Steyer, Lowenthal, Boodrookas, Alvarez & Smith Law Offices of Gary A. Angel LLP 177 Post Street, 8th Floor One California Street, 3rd Floor San Francisco, CA 94108 San Francisco, CA 94111 Tel: 415.788.5935 Tel: 415.421.3400 Fax: 415.788.5958 Fax: 415.421.2234 Attorney for Plaintiff Email: jlowenthal@steyerlaw.com Co-Counsel for Plaintiff John G. Dooling, Esq. Dion N, Cominos, Esq. Ropers, Majeski, Kohn & Bentley Mark C. Russell, Esq. 201 Spear Street, Suite 1000 Olivia J. Bradbury, Esq. San Francisco, CA 94105 Gordon & Rees Tel: 415.543.4800 275 Battery Street, Suite 2000 Fax: 415.972.6301 San Francisco, CA 94111 Email: jdooling@ropers.com Tel: 415.986.5900 Attorneys for Defendant/Cross-Complainant | Fax: 415.986.8054 Construction Testing Services, Inc. Email: dcominos@gordonrees.com mrussell@gordonrees.com obradbury@gordonrees.com Attorneys for Defendant/Cross-Defendant Cardinal Consulting Inc. 4830-1305-8062.1 PROOF OF SERVICELEWIS BRISBOIS BISGAARD SMITH LP ATTORNES A LA Coque K. Dion, Esq. Manasian & Rougeau LLP 400 Montgomery Street, Suite 1000 San Francisco, CA 94104 Tel: 415.291.8425 Fax: 415.291.8426 Email: dion@mrlawsf.com Attorneys for Defendants Mid-Market Development Co., Ine. and Michael Murray The document was served by the following means: (BY PERSONAL SERVICE) [ caused to be personally delivered the document to the persons at the addresses listed above. El For a party represented by an attorney, delivery was made to the attorney or at the attorney’s office by leaving the documents in an envelope or package clearly labeled to identify the attorney being served with a receptionist or individual in charge of the office D2, ane Wenger Dated: December 9, 2011 Mari: 4839-7322-2414.1 PROOF OF SERVICEExh 4oon 2 mB WN 10 GARY A. ANGEL, CSB No. 70006 Ff FREAR STEPHEN SCHMID, CSB No, 96089 id LAW OFFICES OF GARY A’ ANGEL in Mt, 177 POST STREET, EIGHTH FLOOR SAN FRANCISCO, CA 94108 Sth 79, TELEPHONE: (415) 788-5935 CLERK q FACSIMILE: (415) 788-5958 ay. Of JEFFREY H, LOWENTHAL, CSB No.111763 ~ STEYER LOWENTHAL BOODROOKAS ALVAREZ & SMITH LLP ONE CALIFORNIA STREET, THIRD FLOOR SAN FRANCISCO, CA 94111 TELEPHONE: (415) 421-3400 FACSIMILE: (415) 421-2234 Attorneys for Plaintiff PERFORMING ARTS, LLC SUPERIOR COURT OF CALIFORNIA COUNTY OF SAN FRANCISCO UNLIMITED JURISDICTION PERFORMING ARTS, LLC, a Delaware No. CGC-10-498405 limited liability company, SECOND AMENDED COMPLAINT Plaintiff, FOR DAMAGES Vv. KILLARNEY CONSTRUCTION CO., INC., MID-MARKET DEVELOPMENT CO., INC., CARDINAL CONSULTING, INC., CULLINANE CONSTRUCTION, AL NORMAN MECHANICAL, INC., MICHAEL MURRAY, CONSTRUCTION TESTING SERVICES, and DOES 1 THROUGH 200, inclusive, Defendants. Plaintiff PERFORMING ARTS, LLC alleges against defendants, and each of them, the following: it Mt SECOND AMENCED COMPLAINT FOR DAMAGES.aman DOD oO fF WN = m mw Nm HNY NH NY HKD |= SF Be Be Fe sess on ® A FOND 2A GOON DO fF WH + FO O FIRST CAUSE OF ACTION (Negligence — As Against all Defendants ‘xcept Cardinal Consulting, Inc.] 1. Plaintiff PERFORMING ARTS, LLC is a Delaware limited liability company. At all times alleged herein, piaintiff or its predecessors were the owners of that certain real property commonly known as 973 Market Street, San Francisco, California (the "Subject Property"). Plaintiff also is the assignee and successor in interest by way of written agreements dated June 25, 2009 to the construction lender for the project, United Commercial Bank, including any and all claims, rights, and causes of action of said bank. The Subject Property (a multi-story, mixed use building) was being renovated and retrofitted and otherwise subject to construction work (hereinafter Construction-Related Activity) by or with the aid, contributions, materials, and services of defendants named herein. 2. Defendants KILLARNEY CONSTRUCTION CO., INC., MID-MARKET DEVELOPMENT CO., INC., CARDINAL CONSULTING, INC., CULLINANE CONSTRUCTION, AL NORMAN MECHANICAL, INC., MICHAEL MURRAY, and CONSTRUCTION TESTING SERVICES were at all times relevant hereto doing business in San Francisco, California. Said defendants, except for MICHAEL MURRAY, an individual, are business entities, form unknown. 3. Plaintiff is informed and believes that at all times alleged herein, defendants were at all time relevant involved in the Construction-Related Activity in various capacities and in their respective capacities negligently caused or negligently permitted the defective, substandard, illegal, unworkmanlike and negligent Construction-Related Activity complained of below which proximately and legally caused the damages to plaintiff as set forth below. 4. The true names and capacities, whether individual, corporate, associate or otherwise, of defendants Does 1 through 200, inclusive, are presently unknown to plaintiff, and plaintiff therefore sues said defendants by said fictitious names. Plaintiff is informed and believes that each of the defendants designated herein as a fictitiously 2 SECOND AMENDED COMPLAINT FOR DAMAGESoon Oak wn + by NMNYNH NHN NN = BF |= ese eee e2ee orwtoan’rstk ®©N +66 @O2N DW aA & WN = 8 named defendant is in some manner responsible for the events and happenings herein referred to and for plaintiff's damages resulting therefrom as herein alleged. 5. Plaintiff is informed and believes that Does 1 through 100 are design professionals, contractors, subcontractors, and/or material suppliers who are responsible for the defective work which was performed on the Subject Property. 6. Plaintiff is informed and believes that Does 101 through 140 are the alter egos of the other defendants and were each the owner, shareholder, and/or promoter of each of the other defendants. Plaintiff is informed and believes that there is such a unity of interest and ownership between each of said defendants that such individuality and separateness, if it ever existed, has ceased and each defendant is the alter ego of the other defendants in that: 1) said defendants were a mere shell, sham and conduit, without capital, assets, stock, or stockholders through which the other defendants carried on their business, exercising complete control and dominance of such businesses to such an extent that at all times herein mentioned they did not in fact exist as separate entities; 2) said defendants were conceived, intended and used by the other defendants as a device to avoid individual liability; 3) said defendants were inadequately capitalized; 4) said defendants used and commingled the assets of each of the other defendants and caused assets to be transferred between each other without adequate consideration and transferred assets between each other in order to evade payment of obligations to creditors; and 5) said defendants carried out the business and activities alleged herein without directors‘ or shareholders' meetings and without the maintenance of records, minutes or corporate proceedings. 7. Plaintiff is informed and believes that adherence to the fiction of the separate existence of said defendants as entities distinct from the other defendants would permit an abuse of the corporate privilege and would sanction fraud in that plaintiff who, having acted without knowledge of the aforementioned, will be unable to recover from the real perpetrators and instigators of the deceptive practices alleged herein because defendants are hiding behind the veil of other defendants, which 3 SECOND AMENDED COMELAINT FOR DAMAGESaon Oo non & WwW NH = oo een aeinemnenerernintietne inerrant in linen nimatetatinntnintnamtnret nt eretarnee penning nitrites en ecennteemtae plaintiff is informed and believes lack sufficient assets to compensate plaintiffs for its damages. 8. Plaintiff is informed and believes that Does 141 through 175 are the successors of each of the other defendants named herein and has assumed each of the obligations and all liabilities of each of the remaining defendants in that: 1) each of the defendants has expressly and/or impliedly agreed to assume the obligations and liabilities of each of the other defendants; 2) each of the defendants has consolidated and/or merged with the remaining defendants and is a continuation of each of the remaining defendants; and 3) each of the defendants has fraudulently transferred assets to the others for the purpose of escaping liability to creditors. 9. Plaintiff is informed and believes that at all times relevant hereto, each of the defendants was the owner, agent, representative, servant, joint venturer, partner, consultant and/or employee of each of the remaining defendants, and in doing or failing to do the things herein mentioned, was acting within the course and scope of its authority as such owner, agent, representative, servant, joint venturer, partner, consultant and/or employee, with the permission, consent, approval, and ratification of the other defendants. 10. Plaintiff is informed and believes that within the last three (3) years, defendants, and each of them, designed, constructed, and/or supplied materials or services to/for the Subject Property relative to the Construction-Related Activity. 11. Plaintiff is informed and believes that defendants, and each of them, breached their duty of care, failed to exercise reasonable care, negligently failed to comply with applicable building codes, negligently failed to provide services in a workmanlike and professional fashion, and negligently failed to comply with the plans and specifications in that they failed to properly design, plan, guard, protect, engineer, supervise, inspect, investigate, prepare, provide services, provide materials to, construct, renovate, monitor, and/or retrofit the Subject Property or otherwise negligently contributed to the Construction-Related Activity, causing, among other 4 SECOND AMENDED COMPLAINT FOR DAMAGES.= oo ON DH B® WON things, the following defects, losses, and damages: a. Improper concrete work; b. Improper window installation and work; c. Improper plumbing installation and work; d. Improper design and execution of plans and designs; e. Improper inspection; f. Improper supervision and control of the Subject Property and personal property located thereat or intended for use in the Construction-Related Activity; and g. General vandalism, theft, and malicious mischief at the Subject Property, 42. As a proximate and legal result of defendants’ negligence and misconduct, the Subject Property and the work, services, and materials provided for the Subject Property and the Construction-Related Activity thereat were and are defective, below the standard of care, not reasonably fit for the intended purposes, and unworkmanlike, and plaintiff has been, and continues to be damaged in an amount to be proven at trial. 43. Asa further proximate and legal result of defendants’ negligence and misconduct, plaintiff will incur and/or has incurred repair costs, relocation expenses, loss of use, loss of rents and loss of market value in an amount to be proven at trial. 14. Asa further proximate and legal result of defendants’ negligence and misconduct, plaintiff has been required to expend sums to investigate and make temporary repairs to the Subject Property in an amount to be proven at trial. SECOND CAUSE OF ACTION [Breach of Contract — As Against Defendant Cardinal Consulting, Inc.] 145. Plaintiff incorporates and realleges as though set forth in whole, the allegations of paragraphs 1 through 14 above. 16. Plaintiff's predecessor-in-interest, United Commercial Bank, was the 5 ‘SECOND AMENDED COMPLAINT FOR DAMAGES:= oo ON OD HO RB WON lender for the subject construction work at the subject property, and it duly assigned to plaintiff any and all rights said bank had with reference to the subject construction project, including but not limited to any and all choses in action it had with reference to said project. 17. Plaintiff's predecessor-in-interest, United Commercial Bank, entered into a consulting service master agreement with Cardinal Consulting, Inc. (a true and correct copy of which is attached hereto as Exhibit 1 and incorporated by reference), whereby Cardinal Consulting, Inc. agreed to perform and in fact did perform “Construction Funding Inspection Reports” whereby Cardinal was obligated to inspect and report on the work being performed at the construction site which reports served as a basis for the bank to approve or reject the borrower's requests for the further funding of the construction work, and whereby Cardinal would approve or reject payment requests of the borrower in its reports to the bank. Cardinal agreed, represented, and warranted that such services would be performed, findings obtained, and recommendations prepared in a good and workmanlike manner. 18. Plaintiff and its predecessor in interest, United Commercial Bank, performed all its obligations under the contract, except those matters which it was excused from performing. 19. — Starting on or about September 13, 2007, defendant Cardinal breached the contract by negligently performing its obligations under said contract, negligently and wrongfully inspecting and reporting (and acted with gross negligence in its inspection and reporting) of the progress being made at the construction site, and negligently and/or in a grossly negligent fashion approved the borrower's application for payment under the bank’s construction loan, knowing full well that the bank was reasonably relying on Cardinal to reasonably perform its duties under said contract, and whereby Cardinal knew that the bank had engaged Cardinal to give its expertise as to whether the construction work had been completed and performed in a fashion such that additional funding would be appropriate by the bank. Cardinal knew of its duty, 6 ‘SECOND AMENDED COMPLAINT FOR DAMAGESoo ON ODO HO FE wD ND knew of the ramifications to the bank if it improperly performed its duties, and notwithstanding such knowledge, negligently and in a grossly negligent fashion failed to perform its duties, knowing full well that the bank was relying on it to accurately and properly perform its duties as a precursor to the bank authorizing continued funding for the borrower for the project. Cardinal knew of the damages that would result to the bank if it breached its contractual duties. 20. Asa direct, proximate, and legal result of the breaches of the contract due to faulty and negligent inspection reports, including Cardinal's improper approval and recommended approval of the borrower's payment requests, the bank continued to fund the construction, when in fact, had Cardinal acted in a reasonable and non-negligent and proper fashion, and had Cardinal accurately and properly performed its inspections and reported the status of construction, the bank would not have continued to extend money to fund the construction, and the bank, and its successor, plaintiff herein, would not have sustained the losses in an amount according to proof, but in excess of $11 million due to the wrongful inspection and reporting by Cardinal. 21. Asadirect, proximate, and legal result of Cardinal's negligent and faulty inspection, reporting, including Cardinal's improper approval and recommended approval of the borrower's payment requests to the bank, the bank, and thereby its successor, plaintiff herein, was damaged and plaintiff, as successor-in-interest to the bank, have been damaged in an amount according to proof, but in excess of $11 million. THIRD CAUSE OF ACTION [Negligence — As Against Defendant Cardinal Consulting, Inc.] 22. Plaintiff incorporates and realleges as if set forth in full, the allegations of paragraphs 1 through 21 above. 23. Plaintiff's predecessor-in-interest, United Commercial Bank, was the lender for the subject construction work at the subject property, and it duly assigned to plaintiff any and all rights said bank had with reference to the subject construction z SECOND AMENDED COMPLAINT FOR DAMAGESCoo MW N OD HM Fw = project, including but not limited to any and all choses in action it had with reference to said project. 24. Plaintiffs predecessor-in-interest, United Commercial Bank, entered into consulting service master agreement with Cardinal Consulting, Inc. (a true and correct copy of which is attached hereto as Exhibit 1 and incorporated by reference) whereby Cardinal Consulting, inc. agreed to perform and in fact did perform “Construction Funding Inspection Reports” whereby Cardinal was obligated to inspect and report on the work being performed at the construction site, which reports served as a basis for the bank to approve or reject the borrower's requests for the further funding of the construction work, and whereby Cardinal would approve and recommend for approval or reject payment requests of the borrower in its reports to the bank. 25. — Starting on or about September 13, 2007, defendant Cardinal negligently performed its obligations under said contract, negligently and wrongfully inspected and reported (and acted with gross negligence in its inspection and reporting of) the progress being made at the construction site, and negligently and/or in a grossly negligent fashion approved the borrower's application for payment under the bank's construction loan knowing full well that the bank was reasonably relying on Cardinal to reasonably perform its duties under said contract, and whereby Cardinal knew that the bank had engaged Cardinal to give its expertise as to whether the construction work had been completed and performed in a fashion such that additional funding would be appropriate by the bank. Cardinal knew of its duty, knew of the ramifications to the bank if it improperly performing its duties, and notwithstanding such knowledge, negligently and in a grossly negligent fashion failed to perform its duties, knowing full well that the bank was relying on it to accurately and properly perform its duties as a precursor to the bank authorizing continued funding for the borrower for the project. 26. As adirect, proximate, and legal result of the faulty and negligent inspection reports, including Cardinal's improper approval and recommend approval of the borrower's payment requests, the bank continued to fund the construction, when in a SECOND AMENDED COMPLAINT FOR DAMAGESfact, had Cardinal acted in a reasonable and non-negligent and proper fashion, and had Cardinal accurately and properly performed its inspections and reported the status of construction, the bank would not have continued to extend money to fund the construction, and the bank, and its successor, plaintiff herein, would not have sustained the losses in an amount according to proof, but in excess of $11 million due to the wrongful inspection and reporting by Cardinal. 27. Asadirect, proximate, and legal resutt of Cardinal's negligent and faulty inspection, reporting, including Cardinal's improper approval and recommend approval of the borrower's payment requests to the bank, the bank, and thereby its successor, plaintiff herein, was damaged and plaintiff, as successor-in-interest to the bank, have been damaged in an amount according to proof, but in excess of $11 million. WHEREFORE, plaintiff prays for judgment as follows: FIRST CAUSE OF ACTION 1. For actual and special damages in an amount to be determined at trial but in excess of $11 million; 2. For interest; 3. For costs of suit; and 4. For such further relief as the Court may deem just. SECOND CAUSE OF ACTION 1. For actual and special damages in an amount to be determined at trial but in excess of $11 million; 2. For interest; 3. For costs of suit; and 4. For such further relief as the Court may deem just. THIRD CAUSE OF ACTION 1. For actual and special damages in an amount to be determined at trial but in excess of $11 million; 2. For interest; SECOND AMENDED COMPLAINT FOR DAMAGES:oo ON DW OD PF WD B = 3. 4. Dated: September 13, 2010 SECOND AMENDED COMPLAINT FOR DAMAGES: For costs of suit; and For such further relief as the Court may deem just. itt, Attorne $ for Plaintiff PRFORMING ARTS, 10Unked Commerical Bank January 14, 2002 Page 1 MASTER AGREEMENT Cardinal Consulting Inc. {hereinafter referred to as CARDINAL) agrees to perform professional services (hereinafter referred to as Services) for United Commerical Bank (here'nafter referred to as Lender). Individual Project Agreements will be provided for each specific project delineating the scope of the work provided to the lender, scope of the project and consultants fees. . CARDINAL represents and warrants that CARDINAL Is an Independent contractor. This agreement does not in any Way.create a relationship of principal and agent, employer and employee, partners, or joint ventures, or any similar relationship between Lender and CARQINAL. This agreement and all subsequent agreements shall be in accordance with California law. L INDIVIDUAL PROJECT AGREEMENTS - Supplemental agreements In the form of Individual Project Agreements will be provided by CARDINAL to the lender for each specific project. ‘The supplemental IndWvidual Project Agreements will indicate the name of the project, the scape of the project, the scope of CARDINAL's reviews and CARDINAL's fees for the projects. Changes to the scope of work from the Individual Project Agreements should be confirmed in wilting by the lender. Tl. CARDINAL CONSULTING INC. OBLIGATIONS A CARDINAL is to provide lender with written documentation of services provided in a timely manner. If problems or concerns with the project are encountered by CARDINAL during the course of CARDINAL's services, CARDINAL ts to timely notify Lender of such problems or concerns. B. CARDINAL shall retain as confidential all information and data fumished to CARDINAL by lender which relate to Lender’s business, technologies, formulae, procedures, processes, methods and shall not disclose such information to any third party or use, such ‘nformation except In connection with the administration of the project. CARDINAL shall retain confidential ali information and data furnished to CARDINAL by lender's clients which relate to business, technologies, formulae, procedures, processes, methods and shall not disclose such information to any third party or use, such Information except in connection with the administration of the project. CARDINAL may combine data from specific projects for internal purposes or to provide Lender or others general information regarding market conditions, subject to the restraint that the source of the data remains confidential and only be included in a sum of multiple projects. CARDINAL CONSULTING INC, EXHBIT 1mL United Commerda! Bank January 14, 2002 Page 2 CG CARDINAL represents and warrants that Services will be preformed, findings obtained, and recommendations prepared in a good and workmanlike manner. CARDINAL is to determine the means and methods of performance of services. CARDINAL's services are to be provided for the Lender’s use only, and all such services are not a representation to the Owner, Contractor or any other person or entity regarding the quality of construction, compliance or conformity with contract documents, any legal requirements, or other matters pertaining to the project. CARDINAL Is not to perform the services of an architect, engineer, appraiser, environmental assessor, attomey, contractor or any other professions or business requiring any license, and in addition, CARDINAL does not assume obligations, responsibilities or liabilities for any parties participating In this project. The Lender recognizes that CARDINAL Is not responsible for design errors and omissions, and Is aot the superising architect. CARDINAL agrees to carry a minimum of the following: Worker's Compensation Insurance - $100,000 per accident; General Liability Insurance - $1,000,000 per oocurrence; and Automobile Liability Insurance - $100,000 per occurrence. CARDINAL agrees to hoki Lender harmless from and against loss, damage, Injury or Habllity arising from the grossly negligent acts or omissions of CARDINAL, CARDINAL's employees, agents or subcontractors. CARDINAL's contractual obligations of Indemnification shall only apply in the event of negligence, error or other fault of CARDINAL. In the event that both CARDINAL and Lender are adjudicated at fault with respect to damage or injury sustained by dalmant, Consultant's obligations of Indemnification shall onty be for that portion of the damage or Injury adjudicated to have been the consequence of the negligence, error, or other fault of CARDINAL, Services not otherwise provided for not included in the Individual Project Agreement shall be billed hourly, based on a rate of $75 for @ project manager and $40 for secretarial This may Include but Is not limited to verification of off-site stored materials or additional meetings. - Costs for overnight mall services or messenger delivery shalt be bitled as an additional cost If requested by lender. LENDER'S OBLIGATIONS To assist CARDINAL in the performances of the Services, Lender shall provide all avaliable and necessary material, data and information pertaining to the specific project. CARDINAL will provide a list of requested information with the Individual Project Agreement. Lender Is to provide CARDINAL with any other Information received that may give specific insight to the specific project Including but not limited to: credit concems, previous problems with project partkipants or other information that CARDINAL cannot readily obtain, Lender shall retain as confidential alf information, report formats and data furnished to Lender which relate to CARDINAL's business, technologies, formulae, procedures, Processes, methods and shall not disdose such information to any third party or use, such Information except In connection with the administration of the project. Lender shall be responsible for payment of CARDINAL’s fees whether billed to lender or third party. CARDINAL CONSULTING INC.United Coramerical Bank January 14, 2002 Page 3 oO Invokes will be submitted to Lender or other party as determined by Lender upon completion of services with payment due net 30 days after receipt of invoice, With each Invoice CARDINAL shalll identify the project and report date, with emization of any other fees Involved. Lender shall not be liable for the payment of any Federal, State or local income taxes, social security, state unemployment or other similar taxes resutting from Consultant’s providing of Services under this agreement. A service charge of 18% will be added to all accounts which remain due and owing and unpaid for more than thirty () calendar days beyond the due date. E. Lender agrees to hold CARDINAL harmless from and against loss, damage, Injury or fabkity arising from the negligent acts.or omissions of Lender, Lender’s dients, Lenders agents or Lender's employees, In the event that both CARDINAL and Lender are adjudicated at fault with respect to damage or Injury sustalned by claimant, Lenders obligations of indemnification shall only be for that portion of the damage or injuy adjudicated to have been the consequence of the negligence, error, oF other fauit of fer. Ff Lander represents to CARDINAL that K has authorization from the Owner of the property twallow CARDINAL to perform tts duties as provided herein. TH. MISCELLANEOUS The terms and conditions set forth In thls agreement and subsequent Individual Project Agreements constitute the entire understanding of the parties relating to the provisions of the Services by CARDINAL to the Lender. All proposals, offers and other communication related b the provisions of these Services by CARDINAL, oral or written, are hereby superseded, except to the extent that they have been expressly Incorporated, LENDER ‘ pare! ou DINAL CONSULTING INC. BY! Sec) 0 Cs TITLE:__President — OATE:_1/12/02_ CARDINAL CONSULTING INC.ononnr On kk WH = wm yNyNY DYN NHN NY NY SB BF Fest seeeoea ow oak ON 2 6 oO @AN AH BF ODN |= OD Re: Performing Arts, LLC v. Killarney Construction Co., Inc., etal. PROOF OF SERVICE | declare that: | am over the age of 18 and not a party to the within action; my business address is 177 Post Street, Suite 890, San Francisco, California, 94108. On September 13, 2010, | served the following document(s): 1. SECOND AMENDED COMPLAINT FOR DAMAGES on the parties in said action, by placing true copies thereof in sealed envelopes addressed as shown below for service as designated below: iX/ By First Class Mail - | caused each such envelope, with first-class postage thereon ully prepaid, to be deposited in the United States mail at San Francisco, aliromia. {_! By Hand Delivery - | caused each such envelope, to be hand delivered to said addresses), /_/ By Facsimile - By transmitting a facsimile copy of the above document(s) to the following addressee(s) at the following facsimile number(s): Addressee(s): Suzanne M. Martin, Esq. LEWIS BRISBOIS BISGAARD & SMITH, LLP One Sansome Street, Suite 1400 San Francisco, CA 94104 E-mail: martin@|bbslaw.com Tel: 415-438-6616 Fax: 415-434-0882 [Attorneys for Defendant KILLARNEY CONSTRUCTION CO., INC.] Mark C. Russell, Esq. E-mail: Mrussel@gordonrees.com GORDON & REES LLP Embarcadero Center West 275 Battery Street, Suite 2000 San Francisco, CA 94111 Tel.: 415-986-5900 Fax: 415-986-8054 [Attorneys for Defendant CARDINAL CONSULTING, INC.] Coque K. Dion, Esq. E-mail: dion@nrlawsf.com MANASIAN & ROUGEAU, LLP 400 Montgomery Street, Suite 1000 San Francisco, CA 94104 Tel: 415-291-8425, ext. 4 Fax: 415-291-8426 [Aatorneys for Defendants MICHAEL MURRAY and MID-MARKET DEVELOPMENT CO., INC.}oO N DO A WH A mp MH Ne NY NY NY NH DN BB Be eB we ew ea an a ont nm ok WN = OO DN OW oO F&F WwW HY = 2 John G. Dooling, Esq. E-mail: jdooling@rmkb.com Timothy A. Dolan, Esq. E-mail: tdolan@rmkb.com ROPERS MAJESKI KOHN BENTLEY 201 Spear Street, Suite 1000 San Francisco, CA 94105-1667 Tel: 415-543-4800 Fax: 415-972-6301 [Attorneys for Defendant and X-Complainant CONSTRUCTION TESTING SERVICES, NC] Jeffrey H. Lowenthal, Esq. STEYER LOWENTHAL BOODROOKAS ALVAREZ & SMITH LLP One California Street, Third Floor San Francisco, CA 94111 Tel: 415-421-3400 Fax: 415-421-2234 [Attomeys for Plaintiff PERFORMING ARTS, LLC] E-mail: jlowenthal@steyerlaw.com | declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct and that this declaration was executed on September 13, 2010, at San Francisco, California. Rose ChanEXHIBIT “B” REDACTED IN ENTIRETYExh ©EXHIBIT “C” REDACTED IN ENTIRETYEXHIBIT “D” REDACTED IN ENTIRETYExpEXHIBIT “E” REDACTED IN ENTIRETYEXHIBIT “F” REDACTED IN ENTIRETYEXHIBIT “G” REDACTED IN ENTIRETYEXHIBIT “H” REDACTED IN ENTIRETYExhEXHIBIT “I” REDACTED IN ENTIRETYExhEXHIBIT “J” REDACTED IN ENTIRETYEXHIBIT “Kk” REDACTED IN ENTIRETYEXHIBIT “L” REDACTED IN ENTIRETY