Preview
MAME
SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN FRANCISCO
Document Scanning Lead Sheet
Jan-25-2012 10:31 am
Case Number: CGC-10-498405
Filing Date: Jan-25-2012 10:31
Juke Box: 001 Image: 03465516
EX PARTE APPLICATION FOR ORDER
PERFORMING ARTS LLC, VS. KILLARNEY CONSTRUCTION CO., INC. et al
001003465516
Instructions: 2
Please place this sheet on top of the document to be scanned.Gordon & Rees LLP
275 Battery Street, Suite 2000
San Francisco, CA 94111
=
>
28
MASH/1063653/11562876..1
DION N. COMINOS (SBN: 136522)
dcominos@gordonrees.com
MARK C. RUSSELL (SBN: 208865)
mrussell@gordonrees.com
OLIVIA B. NELSON (SBN: 253323)
obradbury@gordonrees.com
GORDON & REES LLP
275 Battery Street, Suite 2000
San Francisco, CA 94111
Telephone: (415) 986-5900
Facsimile: (415) 986-8054
Attorneys for Defendant/Cross-Complainant/Cross-Defendant
CARDINAL CONSULTING, INC.
SUPERIOR COURT OF CALIFORNIA - COUNTY OF SAN FRANCISCO
PERFORMING ARTS, LLC, a Delaware ) CASENO. CGC-10-498405
limited liability company, ) .
Plaintiff ) EX PARTE APPLICATION FOR
ainunt, ) STIPULATED REQUEST TO
) CONTINUE TRIAL DATE;
vs. } MEMORANDUM OF POINTS AND
AUTHORITIES; DECLARATION OF
KILLARNEY CONSTRUCTION CO., INC., ) 3
MID-MARKET DEVELOPMENT CO, ING, ) OLIVIA NELSON
Se US TION AL ) Accompanying Papers: Stipulation and
> ) [Proposed] Order to Continue Trial Date
NORMAL MECHANICAL, INC., MICHAEL )
MURRAY, CONSTRUCTION TESTING )
SERVICES, and DOES 1 THROUGH 200, )
inclusive, ) Complaint Filed: April 7, 2010
). Trial Date: March 26, 2012
Defendants. )
)
AND RELATED CROSS-ACTION(S). J
)
EX PARTE APPLICATION
TO ALL PARTIES AND THEIR ATTORNEY(S) OF RECORD:
PLEASE TAKE NOTICE that on January 25, 2012 at 11:00 a.m., or as soon thereafter as
counsel may be heard, in Department 206 of the San Francisco County Superior Court located at
400 McAllister Street, San Francisco, California, Defendant CARDINAL CONSULTING, INC.
(“Cardinal”) will submit an ex parte application for an order entering the joint stipulation by all
-1-
EX PARTE APPLICATION TO CONTINUE THE TRIAL DATEGordon & Rees LLP
275 Battery Street, Suite 2000
San Francisco, CA 94111
0 Oe ND
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
parties to: (1) continue the March 26, 2012 trial date in this action to October 16, 2012, or other
date in October 2012, as is convenient to the Court; (2) continue all deadlines (including
discovery cut-offs) currently calculated from the March 26, 2012 trial date; and (3) continue the
February 23 and 24, 2012 hearing dates for the pending summary judgment motions and
applications to seal to March 23, 2012 at 9:30 a.m., with any opposition and reply papers due
based upon the new hearing date. There have been no previous continuances, and this is the first
request by any party to continue the trial date.
Cardinal moves for the requested relief under California Rule of Court 3.1332 and San
Francisco Superior Court Local Rule 6.0(B). Good cause exists for this ex parte application
because this case will not be ready for the March, 2012 trial date, and the parties will be
prejudiced if the trial date is not continued. This case is not yet at issue (11 recently added cross-
defendants have not yet appeared or participated in discovery), and additional time is needed to
allow the parties to conduct necessary discovery and pretrial litigation in order to adequately
prepare for trial. The Defendants have been diligently working to investigate the claims asserted
by Plaintiff, and this continuance is sought in good faith.
This ex parte application is based on the instant application, the parties’ stipulation, the
pleadings, records and files herein, and upon such further evidence as may be presented at the
hearing. As set forth in the declaration of Olivia B. Nelson, notice of this application was given
to all counsel at 9:50 a.m. on January 24, 2012.
Dated: Jauuany LS 2012
GORDON & REES LLP
By:
OLIVIA B. NELSON
Attorneys for Defendant/Cross-
Complainant:
CARDINAL CONSULTING, INC.
-2-
EX PARTE APPLICATION TO CONTINUE THE TRIAL DATEGordon & Rees LLP
275 Battery Street, Suite 2000
San Fraricisco, CA 94111
oO woe NH
MEMORANDUM OF POINTS AND AUTHORITIES
I. INTRODUCTION
The parties have stipulated to request this Court to continue the trial date in this case from
March 26, 2012 until October 16, 2012, or a later date in October as is convenient to the Court.
Good cause exists for a continuance for the following reasons: all parties stipulate to a
continuance; 11 new parties were recently added to this action; significant discovery still needs
to be conducted due to the addition of these new parties and the complicated nature of the claims
asserted in this action (including vague construction defect allegations and defendants’
investigation of four associated actions); and the need for considerable expert discovery, which
has not yet begun.
The parties have worked diligently to complete their investigations of the claims asserted
in this dispute. However, the parties need more time to complete their investigations. Cardinal
brings this application to vacate and continue the trial of this dispute on the grounds that there
would be injustice and prejudice to the parties if the trial date is not continued.
Il. RELEVANT PROCEDURAL BACKGROUND
On or about April 7, 2010, Plaintiff filed the initial Complaint in this action seeking
$11 million against certain contractors who worked on the renovation of the subject property
(while it was owned by 973 Market Street Associates, LLC) and against Cardinal, a consultant to
the bank that provided the subject construction loan, United Commercial Bank. Plaintiff filed a
First Amended Complaint on July 23, 2010. After the Court sustained Cardinal’s demurrer,
Plaintiff filed a Second Amended Complaint on September 13, 2010. Certain defendants filed
cross-complaints in this matter, including Cardinal, CTS, Cullinane and Al Norman. Recently,
CTS amended its cross-complaint to identify 11 new cross-defendants”, pursuant to the Court’s
December 19, 2011 Order granting its motion to amend. The amended cross-complaint was filed
on January 17, 2012.
1 United Commercial Bank was taken over by the FDIC on or about November 6, 2009.
2 The new cross-defendants are parties implicated by Plaintiffs broad construction defect
allegations (e.g. “improper design”), who were not named as defendants by Plaintiff, and who
include the architect and structural engineer for the project.
-3-
EX PARTE APPLICATION TO CONTINUE THE TRIAL DATE.Gordon & Rees LLP
275 Battery Street, Suite 2000
San Francisco, CA 94111
Co em IN DW
A mediation was held on December 16, 2011, and the case did not settle. In an effort to
resolve and/or manage some of the discovery problems encountered by the parties, CTS,
Cullinane Construction and Al Norman Mechanical, Inc. recently filed applications to deem this
matter complex, but those were denied by this Court on December 27, 2011. Currently, there are
three pending motions on calendar in this case, including one motion to compel and two motions
for summary judgment.
I. THE COURT MAY VACATE AND CONTINUE THE TRIAL DATE
A motion to continue trial “is addressed to the sound discretion of the trial court.” (Link v.
Cater (1998) 60 Cal.App.4th 1315, 1321.) However, in ruling on a motion to continue trial, the
court must exercise this discretion with due regard to all interests involved. (In re Marriage of
Hoffmeister (1984) 161 Cal-App.3d 1163, 1169.) Refusal of a continuance that has the practical
effect of denying the applicant a fair hearing is reversible error. (Id.; see also, e.g., Estate of
Meeker (1993) 13 Cal.App.4th 1099, 1105 (reasoning that while it is true that a trial judge must
ensure prompt disposition of cases by denying a continuance where there is no good cause for
granting one, “it is equally true that . . . a request for a continuance supported by a showing of
good cause usually ought to be granted”); Oliveros v. County of Los Angeles (2004) 120
Cal.App.4th 1389, 1396 (holding that “[iJn the absence of evidence of a lack of good faith, the
trial court as well as counsel on both sides should acknowledge the scheduling difficulties that
from time to time disrupt the flow of litigation, and consider reasonable solutions that satisfy the
interests of all parties”).)
The touchstone for any motion to continue a trial date is whether “good cause” exists for
acontinuance. (Cal. R. Ct. 3.1332(c).) Under California Rules of Court, Rule 3.1332(c), two
circumstances “that may indicate good cause” are the “addition of a new party if. . . [t]he other
parties have not had a reasonable opportunity to conduct discovery and prepare for trial in regard
to the new party’s involvement in the case,” and “[a] party’s excused inability to obtain essential
testimony, documents or other material evidence despite diligent efforts.” (Id.)
Pursuant to California Rules of Court, Rule 3.1332(d), other factors to be considered in
ruling on a motion for a continuance include: (1) the proximity of the trial date; (2) whether there
-4-
EX PARTE APPLICATION TO CONTINUE THE TRIAL DATECordon & Rees LLP
275 Batiery Street, Suite 2000
San Francisco, CA 94111
was any previous continuance; (3) the length of the continuance requested; (4) the availability of
alternative means to address the problem; (5) the prejudice that parties or witnesses will suffer as
a result of the continuance; (6) if the case is entitled to a preferential trial setting; (7) the court’s
calendar; (8) whether trial counsel is engaged in another trial; (9) whether all parties have
stipulated to a continuance; (10) whether the interests of justice are best served by a continuance;
and (11) any other fact or circumstance relevant to the fair determination of the motion.
(California Rules of Court, Rule 3.1332(d).)
IV. GOOD CAUSE EXISTS FOR CONTINUING THE TRIAL DATE
This case will not be ready for trial on March 26, 2012, and a continuance is necessary
for the following reasons:
© Defendant Construction Testing Services, Inc. filed an amended cross-complaint on
January 17, 2012 adding 11 new cross-defendants. The addition of these new parties,
as well as the intention of defendants Cullinane Construction and Al Norman
Mechanical to file an amended cross-complaint, require the parties to engage in
additional discovery in order to prepare for trial, which cannot be completed by the
current discovery cut-off deadline of February 27, 2012. (Nelson Decl., { 4(a).)
Significant discovery still needs to take place, including the depositions of at least 10 j
percipient witnesses. Some of the non-party witnesses were identified in discovery as
recently as mid-December 2011. Defendants are still working to locate these
witnesses. Additionally, it may be necessary to take the depositions of the former
owners of the subject property, many of whom allegedly reside in Ireland. (/d. at
4 4(b).)
¢ Plaintiff's claims against Cardinal stem from a purported assignment United
Commercial Bank (“UCB”) made to Plaintiff in a Construction Loan Agreement. In
November 2011, the FDIC filed a complaint against UCB and its directors (one of
which signed the subject loan agreement) relating to its loan practices. The FDIC’s
charges go to the core of Cardinal’s defense, and Cardinal requires further time to
investigate the FDIC’s charge. (Id., 4 4(c).)
~5-
EX PARTE APPLICATION TO CONTINUE THE TRIAL DATE.Gordon & Rees LLP
275 Battery Street, Suite 2000
San Francisco, CA 94111
Rw N
xn a
e Defendants Michael Murray and Mid-Market Development Company, Inc. have not
responded to discovery requests, requiring further discovery motions (one was
recently granted, and a second is currently pending) regarding written discovery,
possible motions for contempt and/or sanctions for failure to comply with the Court’s
order(s) compelling discovery, and possibly additional motions relating to these
defendants. (/d., § 4(d).)
¢ Defendants are investigating four other actions pertaining to the property that directly
relate to the financing and construction claims at issue herein. Delays have occurred
in obtaining documents from these related cases, including most importantly
Plaintiffs deposition in a corresponding bankruptcy action for the property’s former
owners. ((/d., § 4(e) and (f).)
e Expert discovery will likely be significant due to the vague construction defect
claims. For example, no defect report or cost of repair report has been provided to
Defendants. Accordingly, further site inspections will be necessary once experts and
expert reports are disclosed, followed by expert depositions. This case will likely
require more than 10 experts, given the expansive nature of the defects alleged by
Plaintiff. ((/d., § 4(g).)
The parties have stipulated to continue the March 26, 2012 trial date to October 2012,
and no party will be prejudiced by granting such continuance.
Many of the factors set forth in California Rules of Court, Rule 3.1332(d), also favor a
continuance of the trial date. For example, the trial date is still far enough off that it is likely no
party has expended resources that will be lost if the date is continued. Moreover, the parties did |
not delay in seeking this continuance. Defendants initially filed a motion to designate this matter
complex in the hope that increased judicial management of this matter would alleviate discovery
problems and make this motion unnecessary, but when that motion was denied on December 27,
2011, the Defendants acted quickly to confer with counsel and file an application requesting a
continuance. Additionally, there has been no pervious trial continuance in this case. The length
of the continuance requested is reasonable considering the issues which remain in this case.
-6-
EX PARTE APPLICATION TO CONTINUE THE TRIAL DATEGordon & Rees: LLP
275 Battery Street, Suite 2000
San Francisco, CA 94111
Finally, the existing defendants, as well as the new cross-defendants, will be prejudiced if this
case remains on calendar for March 26, 2012, as they will not be able to adequately defend
against the claims asserted against them.
Vv. CONCLUSION
Based on the foregoing and the accompanying Stipulation, Cardinal respectfully requests
the Court enter the accompanying Stipulation and Order to Continue Trial Date from March 26,
2012 to October 16, 2012, or later date in October convenient to the Court. In addition, Cardinal
requests that all deadlines triggered by the current trial date, including discovery-cut offs, be
continued with the trial date and that the motions for summary judgment on calendar for
February 23 and 24, 2012 be continued to March 23, 2012 at 9:30 a.m.
Dated: Vanuany 25, 2012
GORDON & REES LLP
By: Miia Dobson
TVIA B. NELSON
Attorneys for Defendant/Cross-
Complainant:
CARDINAL CONSULTING, INC.
-T-
EX PARTE APPLICATION TO CONTINUE THE TRIAL DATEGordon & Rees LLP
275 Battery Street, Suite 2000
San Francisco, CA 94111
DECLARATION OF OLIVIA NELSON
I, Olivia Nelson, declare as follows:
1. 1 am an attorney at the law firm of Gordon & Rees LLP, licensed to practice
before the courts of the State of California, and am counsel of record for Defendant CARDINAL
CONSULTING, INC. (“Cardinal”). If called as a witness, I would competently testify to the
following facts, all of which are within my own personal knowledge.
2. This matter is currently set for trial on March 26, 2012. The discovery cut-off in
this action is currently set for February 27, 2012. There have been no previous continuances of
the trial date.
3. The parties have stipulated to continue the trial date until October 2012.
4. Good cause exists for this continuance based on the following reasons:
(a). This case is not yet at issue. On January 17, 2012, defendant Construction
Testing Services, Inc. filed an amended cross-complaint naming an additional 11 cross-
defendants who have not yet appeared in this matter or participated in any discovery. Cardinal
:/has also been informed that defendants Al Norman Mechanical and Cullinane Construction
intend to amend their cross-complaint to name additional cross-defendant(s).
(b). The parties have only conducted two depositions thus far in this case, one
of which was not completed. Significant discovery still needs to take place, including the
depositions of at least 10 percipient witnesses. The majority of these depositions are of non-
party witnesses, some who were only identified in discovery as recently as mid-December 2011.
Cardinal is working to locate some of these non-party witnesses. Additionally, it may be
necessary to take the depositions of the former owners of the subject property, many of whom
allegedly reside in Ireland.
(c). Plaintiff's claims against Cardinal stem from a purported assignment
United Commercial Bank made to Plaintiff in a Construction Loan Agreement. In
|| November 2011, the FDIC filed a complaint against UCB and its directors (one of which signed
the subject loan agreement) relating to its loan practices. The FDIC’s charges go to the core of
Cardinal’s defense, and Cardinal requires further time to investigate the FDIC’s charge.
-8-
EX PARTE APPLICATION TO CONTINUE THE TRIAL DATEGordon & Rees LLP
275 Battery Street, Suite 2000
San Francisco, CA 94111
(d). | Defendants Michael Murray and Mid-Market Development Company, Inc:
have not responded to discovery requests, requiring defendants to file additional discovery
motions (one was recently granted, and a second is currently pending) regarding written
discovery, possible motions for contempt and/or sanctions for failure to comply with the Court’s
order(s) compelling discovery. The defendants may also need to file motions to compel these
two defendants’ depositions.
(e). Defendants are investigating these four other actions pertaining to the
property that directly relate to the financing and construction claims at issue in this case:
¢ Plaintiff filed a separate action against the investors involved in 973 Market Street
Associate, LLC asserting claims for breach of guaranty. (San Francisco Superior
Court Case No. CGC-09-494591).
¢ 973 Market Street Associates, LLC filed a bankruptcy action, in which Plaintiff is
acreditor. (U.S. Bankruptcy Court, Northern District of California, San Francisco
Division, Case No. 09-32014 DM7)
° 973 Market Associates, LLC filed a litigation against Mid-Market and other
defendants asserting breach of contract and fraud allegations. (San Francisco
Superior Court Case no. CGC-09-487233.)
¢ 973 Market Associates, LLC filed a litigation against Vanguard Properties, Inc.,
James Nunemacher and Michael Murray alleging fraud and breach of fiduciary
duty claims related to the property. (San Francisco Superior Court Case No.
CGC-11-508323.)
(f). Delays have occurred in obtaining documents from these related cases,
including most importantly Plaintiffs deposition in a corresponding bankruptcy action for the
property’s former owners. Plaintiff never identified its deposition in the bankruptcy action
despite it being responsive to discovery requests. Defendants only discovered it while
investigating the other litigations and then it took nearly half a year for Defendants to obtain a
copy of the deposition.
(g). Expert discovery will likely be significant due to the vague construction
defect claims. For example, unlike in an ordinary construction defect action, in this action no
defect report or cost of repair report has been provided to defendants. Accordingly, further site
inspections will be necessary once experts and expert reports are disclosed, followed by expert
-9-
EX PARTE APPLICATION TO CONTINUE THE TRIAL DATEGorda: & Rees LLP
275 Battery Street, Suite 2000
San Francisco, CA 94111
depositions. This case will likely require more than 10 experts, given the expansive nature of the
defects alleged by Plaintiff
6. In accordance with Rule 3.1203, all counsel were notified by fax at approximately
9:50 a.m. on January 24, 2012 of Cardinal’s intention to appear ex parte on January 25, 2012 at
11:00 a.m. in Department 206 of the San Francisco Superior Court, 400 McAllister Street, San
Francisco, California, 94102 for an Order Continuing the Trial Date. A copy of the facsimile is |
attached is attached as Exhibit A.
I declare under penalty of perjury under the laws of the United States of America and the
State of California that the foregoing is true and correct and that this declaration was executed on
January 25, 2012, at San Francisco, California.
(Deine lola
livia Nelson
-10-
EX PARTE APPLICATION TO CONTINUE THE TRIAL DATEExhibit A
Fxhibit AOuvia B. NELSON
ONELSON@GORDONREES.COM GORDON & REES LLP
ATTorNeys AT LAW
EMBARCADERO CENTER WEST
(275 BATTERY STREET, SUITE 2000
SAN FRANCISCO, CA 94111
Puone: (415) 986-5900
FAx:(415) 986-8054
WWW.GORDONREES.COM
January 24, 2012
Via Facsimile Only
TO: ALL COUNSEL
(Service list attached.)
Re: Performing Arts, LLC v. Killarney Construction Co., Inc., et al.
San Francisco Superior Court Case No. CGC-10-498405
Dear Counsel:
Please be advised that counsel for Cardinal Consulting, Inc. (“Cardinal”), will be
appearing ex parte on Wednesday, January 25, 2012, at 11:00 a.m, in Department 206 of the San
Francisco County Superior Court to present the Stipulated Ex Parte Application to continue the
trial date.
Very truly yours,
GORDON & REES LLP
Olivia B. Nelson
OBN:amp
MASH/IUs3653/1 1563141.
CALIFORNIA @ NEW YORK @ TEXAS # ILLINOIS # NEVADA # ARIZONA # COLORADO @ WASHINGTON @ OREGON @ NEW JERSEY # FLORIDAGordon & Rees LLP
275 Battery Street, Suite 2000
San Francisco, CA 94111
SERVICE LIST
Performing Arts, LLC v. Killarney Construction Co., Ine.
etal.
405
San Francisco County Superior Court Case No. CGC-10-4!
Gary A. Angel, Esq. 415-788-5935 Attorneys :for Plaintiff
Frear S. Schmid, Esq. FAX: 415-788-5958 “se
‘Law Offices of Gary A. Angel angelgary@aol.com
177 Post Street, 8" Fl. frearschmid@aol.com
San Francisco, CA 94108 .
Jefirey H. Lowenthal, Esq. 415-421-3400 Co-Counsel for Plaintiff
Steyer Lowenthal Boodrookas Alvarez & FAX: 415-421-2234
Smith LLP jlowenthal@steyerlaw.com
One California Street, 3" Fl.
San Francisco, CA 94111
John G. Dooling, Esq. 415-543-4800 Attorneys for
Ropers, Majeski, Kohn & Bentley FAX: 415-972-6301 CONSTRUCTION TESTING
201 Spear Street, Suite 1000 jdooling@ropers.com SERVICES, INC.
San Francisco, CA 94105
Suzanne M/ Martin, Esq. 415-362-2580 Attorneys for CULLINANE
Kelton M. Burgess, Esq. FAX: 415-434-0882 CONSTRUCTION; AL
Lewis Brisbois Bisgaard & Smith LLP mnartin@|bbslaw.com NORMAN MECHANICAL,
One Sansome Street, Suite 1400 burgess@Ibbslaw.com INC.; and ASPEN
San Francisco, CA 94104 INSURANCE UK, LTD
Intervener on bebalf of
_KILLARNEY
CONSTRUCTION, CO.
Paul Manasian, Esq. 415-291-8425 Attorneys for MID-MARKET
Manasian & Rougeau LLP’ FAX: 415-291-8426 DEVELOPMENT CO., INC.
400 Montgomery Street, Suite 1000 manasian@mrlawsf.com and MICHAEL MURRAY
San Francisco, CA 94104Anne Smith
From: DocuManager Powered by Fax2Mail [reports@reply.fax2mail.com]
Sent: Tuesday, January 24, 2012 9:51 AM
To: Anne Smith
Subject: Delivery Report
Attachments: sentfax--36344693. pdf
MAIL2FAX DETAILED DELIVERY REPORT
[Attention [Anne M Smith
Job Number 36344693 |
[Sent By User. F2M/03314990278 : |
[Entered Fax2Mail System [01/24 09:46
Report Generated 01/24 09:50
Billing Code 1063653 |
Subject
Page Count [4 (no cover sheet) :
SUMMARY
Sent: 5 Errors: 0 _|| Cancelled:.0
Tota:5 |
inati INum.
Destination Status Time IRetries
4152918426 [SENT 01/24 |[o9:48 l 1
[4154212234 SENT. 01/24 |[o9:47 [ 1
4154340882 SENT llo124 [09:47 [ 1
4157885958 [SENT [o1/24 09:48 [ |
[4159726301 [SENT 01/24 09:49 1
1/24/2012
Preview
MAME SUPERIOR COURT OF CALIFORNIA COUNTY OF SAN FRANCISCO Document Scanning Lead Sheet Jan-25-2012 10:31 am Case Number: CGC-10-498405 Filing Date: Jan-25-2012 10:31 Juke Box: 001 Image: 03465516 EX PARTE APPLICATION FOR ORDER PERFORMING ARTS LLC, VS. KILLARNEY CONSTRUCTION CO., INC. et al 001003465516 Instructions: 2 Please place this sheet on top of the document to be scanned.Gordon & Rees LLP 275 Battery Street, Suite 2000 San Francisco, CA 94111 = > 28 MASH/1063653/11562876..1 DION N. COMINOS (SBN: 136522) dcominos@gordonrees.com MARK C. RUSSELL (SBN: 208865) mrussell@gordonrees.com OLIVIA B. NELSON (SBN: 253323) obradbury@gordonrees.com GORDON & REES LLP 275 Battery Street, Suite 2000 San Francisco, CA 94111 Telephone: (415) 986-5900 Facsimile: (415) 986-8054 Attorneys for Defendant/Cross-Complainant/Cross-Defendant CARDINAL CONSULTING, INC. SUPERIOR COURT OF CALIFORNIA - COUNTY OF SAN FRANCISCO PERFORMING ARTS, LLC, a Delaware ) CASENO. CGC-10-498405 limited liability company, ) . Plaintiff ) EX PARTE APPLICATION FOR ainunt, ) STIPULATED REQUEST TO ) CONTINUE TRIAL DATE; vs. } MEMORANDUM OF POINTS AND AUTHORITIES; DECLARATION OF KILLARNEY CONSTRUCTION CO., INC., ) 3 MID-MARKET DEVELOPMENT CO, ING, ) OLIVIA NELSON Se US TION AL ) Accompanying Papers: Stipulation and > ) [Proposed] Order to Continue Trial Date NORMAL MECHANICAL, INC., MICHAEL ) MURRAY, CONSTRUCTION TESTING ) SERVICES, and DOES 1 THROUGH 200, ) inclusive, ) Complaint Filed: April 7, 2010 ). Trial Date: March 26, 2012 Defendants. ) ) AND RELATED CROSS-ACTION(S). J ) EX PARTE APPLICATION TO ALL PARTIES AND THEIR ATTORNEY(S) OF RECORD: PLEASE TAKE NOTICE that on January 25, 2012 at 11:00 a.m., or as soon thereafter as counsel may be heard, in Department 206 of the San Francisco County Superior Court located at 400 McAllister Street, San Francisco, California, Defendant CARDINAL CONSULTING, INC. (“Cardinal”) will submit an ex parte application for an order entering the joint stipulation by all -1- EX PARTE APPLICATION TO CONTINUE THE TRIAL DATEGordon & Rees LLP 275 Battery Street, Suite 2000 San Francisco, CA 94111 0 Oe ND 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 parties to: (1) continue the March 26, 2012 trial date in this action to October 16, 2012, or other date in October 2012, as is convenient to the Court; (2) continue all deadlines (including discovery cut-offs) currently calculated from the March 26, 2012 trial date; and (3) continue the February 23 and 24, 2012 hearing dates for the pending summary judgment motions and applications to seal to March 23, 2012 at 9:30 a.m., with any opposition and reply papers due based upon the new hearing date. There have been no previous continuances, and this is the first request by any party to continue the trial date. Cardinal moves for the requested relief under California Rule of Court 3.1332 and San Francisco Superior Court Local Rule 6.0(B). Good cause exists for this ex parte application because this case will not be ready for the March, 2012 trial date, and the parties will be prejudiced if the trial date is not continued. This case is not yet at issue (11 recently added cross- defendants have not yet appeared or participated in discovery), and additional time is needed to allow the parties to conduct necessary discovery and pretrial litigation in order to adequately prepare for trial. The Defendants have been diligently working to investigate the claims asserted by Plaintiff, and this continuance is sought in good faith. This ex parte application is based on the instant application, the parties’ stipulation, the pleadings, records and files herein, and upon such further evidence as may be presented at the hearing. As set forth in the declaration of Olivia B. Nelson, notice of this application was given to all counsel at 9:50 a.m. on January 24, 2012. Dated: Jauuany LS 2012 GORDON & REES LLP By: OLIVIA B. NELSON Attorneys for Defendant/Cross- Complainant: CARDINAL CONSULTING, INC. -2- EX PARTE APPLICATION TO CONTINUE THE TRIAL DATEGordon & Rees LLP 275 Battery Street, Suite 2000 San Fraricisco, CA 94111 oO woe NH MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION The parties have stipulated to request this Court to continue the trial date in this case from March 26, 2012 until October 16, 2012, or a later date in October as is convenient to the Court. Good cause exists for a continuance for the following reasons: all parties stipulate to a continuance; 11 new parties were recently added to this action; significant discovery still needs to be conducted due to the addition of these new parties and the complicated nature of the claims asserted in this action (including vague construction defect allegations and defendants’ investigation of four associated actions); and the need for considerable expert discovery, which has not yet begun. The parties have worked diligently to complete their investigations of the claims asserted in this dispute. However, the parties need more time to complete their investigations. Cardinal brings this application to vacate and continue the trial of this dispute on the grounds that there would be injustice and prejudice to the parties if the trial date is not continued. Il. RELEVANT PROCEDURAL BACKGROUND On or about April 7, 2010, Plaintiff filed the initial Complaint in this action seeking $11 million against certain contractors who worked on the renovation of the subject property (while it was owned by 973 Market Street Associates, LLC) and against Cardinal, a consultant to the bank that provided the subject construction loan, United Commercial Bank. Plaintiff filed a First Amended Complaint on July 23, 2010. After the Court sustained Cardinal’s demurrer, Plaintiff filed a Second Amended Complaint on September 13, 2010. Certain defendants filed cross-complaints in this matter, including Cardinal, CTS, Cullinane and Al Norman. Recently, CTS amended its cross-complaint to identify 11 new cross-defendants”, pursuant to the Court’s December 19, 2011 Order granting its motion to amend. The amended cross-complaint was filed on January 17, 2012. 1 United Commercial Bank was taken over by the FDIC on or about November 6, 2009. 2 The new cross-defendants are parties implicated by Plaintiffs broad construction defect allegations (e.g. “improper design”), who were not named as defendants by Plaintiff, and who include the architect and structural engineer for the project. -3- EX PARTE APPLICATION TO CONTINUE THE TRIAL DATE.Gordon & Rees LLP 275 Battery Street, Suite 2000 San Francisco, CA 94111 Co em IN DW A mediation was held on December 16, 2011, and the case did not settle. In an effort to resolve and/or manage some of the discovery problems encountered by the parties, CTS, Cullinane Construction and Al Norman Mechanical, Inc. recently filed applications to deem this matter complex, but those were denied by this Court on December 27, 2011. Currently, there are three pending motions on calendar in this case, including one motion to compel and two motions for summary judgment. I. THE COURT MAY VACATE AND CONTINUE THE TRIAL DATE A motion to continue trial “is addressed to the sound discretion of the trial court.” (Link v. Cater (1998) 60 Cal.App.4th 1315, 1321.) However, in ruling on a motion to continue trial, the court must exercise this discretion with due regard to all interests involved. (In re Marriage of Hoffmeister (1984) 161 Cal-App.3d 1163, 1169.) Refusal of a continuance that has the practical effect of denying the applicant a fair hearing is reversible error. (Id.; see also, e.g., Estate of Meeker (1993) 13 Cal.App.4th 1099, 1105 (reasoning that while it is true that a trial judge must ensure prompt disposition of cases by denying a continuance where there is no good cause for granting one, “it is equally true that . . . a request for a continuance supported by a showing of good cause usually ought to be granted”); Oliveros v. County of Los Angeles (2004) 120 Cal.App.4th 1389, 1396 (holding that “[iJn the absence of evidence of a lack of good faith, the trial court as well as counsel on both sides should acknowledge the scheduling difficulties that from time to time disrupt the flow of litigation, and consider reasonable solutions that satisfy the interests of all parties”).) The touchstone for any motion to continue a trial date is whether “good cause” exists for acontinuance. (Cal. R. Ct. 3.1332(c).) Under California Rules of Court, Rule 3.1332(c), two circumstances “that may indicate good cause” are the “addition of a new party if. . . [t]he other parties have not had a reasonable opportunity to conduct discovery and prepare for trial in regard to the new party’s involvement in the case,” and “[a] party’s excused inability to obtain essential testimony, documents or other material evidence despite diligent efforts.” (Id.) Pursuant to California Rules of Court, Rule 3.1332(d), other factors to be considered in ruling on a motion for a continuance include: (1) the proximity of the trial date; (2) whether there -4- EX PARTE APPLICATION TO CONTINUE THE TRIAL DATECordon & Rees LLP 275 Batiery Street, Suite 2000 San Francisco, CA 94111 was any previous continuance; (3) the length of the continuance requested; (4) the availability of alternative means to address the problem; (5) the prejudice that parties or witnesses will suffer as a result of the continuance; (6) if the case is entitled to a preferential trial setting; (7) the court’s calendar; (8) whether trial counsel is engaged in another trial; (9) whether all parties have stipulated to a continuance; (10) whether the interests of justice are best served by a continuance; and (11) any other fact or circumstance relevant to the fair determination of the motion. (California Rules of Court, Rule 3.1332(d).) IV. GOOD CAUSE EXISTS FOR CONTINUING THE TRIAL DATE This case will not be ready for trial on March 26, 2012, and a continuance is necessary for the following reasons: © Defendant Construction Testing Services, Inc. filed an amended cross-complaint on January 17, 2012 adding 11 new cross-defendants. The addition of these new parties, as well as the intention of defendants Cullinane Construction and Al Norman Mechanical to file an amended cross-complaint, require the parties to engage in additional discovery in order to prepare for trial, which cannot be completed by the current discovery cut-off deadline of February 27, 2012. (Nelson Decl., { 4(a).) Significant discovery still needs to take place, including the depositions of at least 10 j percipient witnesses. Some of the non-party witnesses were identified in discovery as recently as mid-December 2011. Defendants are still working to locate these witnesses. Additionally, it may be necessary to take the depositions of the former owners of the subject property, many of whom allegedly reside in Ireland. (/d. at 4 4(b).) ¢ Plaintiff's claims against Cardinal stem from a purported assignment United Commercial Bank (“UCB”) made to Plaintiff in a Construction Loan Agreement. In November 2011, the FDIC filed a complaint against UCB and its directors (one of which signed the subject loan agreement) relating to its loan practices. The FDIC’s charges go to the core of Cardinal’s defense, and Cardinal requires further time to investigate the FDIC’s charge. (Id., 4 4(c).) ~5- EX PARTE APPLICATION TO CONTINUE THE TRIAL DATE.Gordon & Rees LLP 275 Battery Street, Suite 2000 San Francisco, CA 94111 Rw N xn a e Defendants Michael Murray and Mid-Market Development Company, Inc. have not responded to discovery requests, requiring further discovery motions (one was recently granted, and a second is currently pending) regarding written discovery, possible motions for contempt and/or sanctions for failure to comply with the Court’s order(s) compelling discovery, and possibly additional motions relating to these defendants. (/d., § 4(d).) ¢ Defendants are investigating four other actions pertaining to the property that directly relate to the financing and construction claims at issue herein. Delays have occurred in obtaining documents from these related cases, including most importantly Plaintiffs deposition in a corresponding bankruptcy action for the property’s former owners. ((/d., § 4(e) and (f).) e Expert discovery will likely be significant due to the vague construction defect claims. For example, no defect report or cost of repair report has been provided to Defendants. Accordingly, further site inspections will be necessary once experts and expert reports are disclosed, followed by expert depositions. This case will likely require more than 10 experts, given the expansive nature of the defects alleged by Plaintiff. ((/d., § 4(g).) The parties have stipulated to continue the March 26, 2012 trial date to October 2012, and no party will be prejudiced by granting such continuance. Many of the factors set forth in California Rules of Court, Rule 3.1332(d), also favor a continuance of the trial date. For example, the trial date is still far enough off that it is likely no party has expended resources that will be lost if the date is continued. Moreover, the parties did | not delay in seeking this continuance. Defendants initially filed a motion to designate this matter complex in the hope that increased judicial management of this matter would alleviate discovery problems and make this motion unnecessary, but when that motion was denied on December 27, 2011, the Defendants acted quickly to confer with counsel and file an application requesting a continuance. Additionally, there has been no pervious trial continuance in this case. The length of the continuance requested is reasonable considering the issues which remain in this case. -6- EX PARTE APPLICATION TO CONTINUE THE TRIAL DATEGordon & Rees: LLP 275 Battery Street, Suite 2000 San Francisco, CA 94111 Finally, the existing defendants, as well as the new cross-defendants, will be prejudiced if this case remains on calendar for March 26, 2012, as they will not be able to adequately defend against the claims asserted against them. Vv. CONCLUSION Based on the foregoing and the accompanying Stipulation, Cardinal respectfully requests the Court enter the accompanying Stipulation and Order to Continue Trial Date from March 26, 2012 to October 16, 2012, or later date in October convenient to the Court. In addition, Cardinal requests that all deadlines triggered by the current trial date, including discovery-cut offs, be continued with the trial date and that the motions for summary judgment on calendar for February 23 and 24, 2012 be continued to March 23, 2012 at 9:30 a.m. Dated: Vanuany 25, 2012 GORDON & REES LLP By: Miia Dobson TVIA B. NELSON Attorneys for Defendant/Cross- Complainant: CARDINAL CONSULTING, INC. -T- EX PARTE APPLICATION TO CONTINUE THE TRIAL DATEGordon & Rees LLP 275 Battery Street, Suite 2000 San Francisco, CA 94111 DECLARATION OF OLIVIA NELSON I, Olivia Nelson, declare as follows: 1. 1 am an attorney at the law firm of Gordon & Rees LLP, licensed to practice before the courts of the State of California, and am counsel of record for Defendant CARDINAL CONSULTING, INC. (“Cardinal”). If called as a witness, I would competently testify to the following facts, all of which are within my own personal knowledge. 2. This matter is currently set for trial on March 26, 2012. The discovery cut-off in this action is currently set for February 27, 2012. There have been no previous continuances of the trial date. 3. The parties have stipulated to continue the trial date until October 2012. 4. Good cause exists for this continuance based on the following reasons: (a). This case is not yet at issue. On January 17, 2012, defendant Construction Testing Services, Inc. filed an amended cross-complaint naming an additional 11 cross- defendants who have not yet appeared in this matter or participated in any discovery. Cardinal :/has also been informed that defendants Al Norman Mechanical and Cullinane Construction intend to amend their cross-complaint to name additional cross-defendant(s). (b). The parties have only conducted two depositions thus far in this case, one of which was not completed. Significant discovery still needs to take place, including the depositions of at least 10 percipient witnesses. The majority of these depositions are of non- party witnesses, some who were only identified in discovery as recently as mid-December 2011. Cardinal is working to locate some of these non-party witnesses. Additionally, it may be necessary to take the depositions of the former owners of the subject property, many of whom allegedly reside in Ireland. (c). Plaintiff's claims against Cardinal stem from a purported assignment United Commercial Bank made to Plaintiff in a Construction Loan Agreement. In || November 2011, the FDIC filed a complaint against UCB and its directors (one of which signed the subject loan agreement) relating to its loan practices. The FDIC’s charges go to the core of Cardinal’s defense, and Cardinal requires further time to investigate the FDIC’s charge. -8- EX PARTE APPLICATION TO CONTINUE THE TRIAL DATEGordon & Rees LLP 275 Battery Street, Suite 2000 San Francisco, CA 94111 (d). | Defendants Michael Murray and Mid-Market Development Company, Inc: have not responded to discovery requests, requiring defendants to file additional discovery motions (one was recently granted, and a second is currently pending) regarding written discovery, possible motions for contempt and/or sanctions for failure to comply with the Court’s order(s) compelling discovery. The defendants may also need to file motions to compel these two defendants’ depositions. (e). Defendants are investigating these four other actions pertaining to the property that directly relate to the financing and construction claims at issue in this case: ¢ Plaintiff filed a separate action against the investors involved in 973 Market Street Associate, LLC asserting claims for breach of guaranty. (San Francisco Superior Court Case No. CGC-09-494591). ¢ 973 Market Street Associates, LLC filed a bankruptcy action, in which Plaintiff is acreditor. (U.S. Bankruptcy Court, Northern District of California, San Francisco Division, Case No. 09-32014 DM7) ° 973 Market Associates, LLC filed a litigation against Mid-Market and other defendants asserting breach of contract and fraud allegations. (San Francisco Superior Court Case no. CGC-09-487233.) ¢ 973 Market Associates, LLC filed a litigation against Vanguard Properties, Inc., James Nunemacher and Michael Murray alleging fraud and breach of fiduciary duty claims related to the property. (San Francisco Superior Court Case No. CGC-11-508323.) (f). Delays have occurred in obtaining documents from these related cases, including most importantly Plaintiffs deposition in a corresponding bankruptcy action for the property’s former owners. Plaintiff never identified its deposition in the bankruptcy action despite it being responsive to discovery requests. Defendants only discovered it while investigating the other litigations and then it took nearly half a year for Defendants to obtain a copy of the deposition. (g). Expert discovery will likely be significant due to the vague construction defect claims. For example, unlike in an ordinary construction defect action, in this action no defect report or cost of repair report has been provided to defendants. Accordingly, further site inspections will be necessary once experts and expert reports are disclosed, followed by expert -9- EX PARTE APPLICATION TO CONTINUE THE TRIAL DATEGorda: & Rees LLP 275 Battery Street, Suite 2000 San Francisco, CA 94111 depositions. This case will likely require more than 10 experts, given the expansive nature of the defects alleged by Plaintiff 6. In accordance with Rule 3.1203, all counsel were notified by fax at approximately 9:50 a.m. on January 24, 2012 of Cardinal’s intention to appear ex parte on January 25, 2012 at 11:00 a.m. in Department 206 of the San Francisco Superior Court, 400 McAllister Street, San Francisco, California, 94102 for an Order Continuing the Trial Date. A copy of the facsimile is | attached is attached as Exhibit A. I declare under penalty of perjury under the laws of the United States of America and the State of California that the foregoing is true and correct and that this declaration was executed on January 25, 2012, at San Francisco, California. (Deine lola livia Nelson -10- EX PARTE APPLICATION TO CONTINUE THE TRIAL DATEExhibit A Fxhibit AOuvia B. NELSON ONELSON@GORDONREES.COM GORDON & REES LLP ATTorNeys AT LAW EMBARCADERO CENTER WEST (275 BATTERY STREET, SUITE 2000 SAN FRANCISCO, CA 94111 Puone: (415) 986-5900 FAx:(415) 986-8054 WWW.GORDONREES.COM January 24, 2012 Via Facsimile Only TO: ALL COUNSEL (Service list attached.) Re: Performing Arts, LLC v. Killarney Construction Co., Inc., et al. San Francisco Superior Court Case No. CGC-10-498405 Dear Counsel: Please be advised that counsel for Cardinal Consulting, Inc. (“Cardinal”), will be appearing ex parte on Wednesday, January 25, 2012, at 11:00 a.m, in Department 206 of the San Francisco County Superior Court to present the Stipulated Ex Parte Application to continue the trial date. Very truly yours, GORDON & REES LLP Olivia B. Nelson OBN:amp MASH/IUs3653/1 1563141. CALIFORNIA @ NEW YORK @ TEXAS # ILLINOIS # NEVADA # ARIZONA # COLORADO @ WASHINGTON @ OREGON @ NEW JERSEY # FLORIDAGordon & Rees LLP 275 Battery Street, Suite 2000 San Francisco, CA 94111 SERVICE LIST Performing Arts, LLC v. Killarney Construction Co., Ine. etal. 405 San Francisco County Superior Court Case No. CGC-10-4! Gary A. Angel, Esq. 415-788-5935 Attorneys :for Plaintiff Frear S. Schmid, Esq. FAX: 415-788-5958 “se ‘Law Offices of Gary A. Angel angelgary@aol.com 177 Post Street, 8" Fl. frearschmid@aol.com San Francisco, CA 94108 . Jefirey H. Lowenthal, Esq. 415-421-3400 Co-Counsel for Plaintiff Steyer Lowenthal Boodrookas Alvarez & FAX: 415-421-2234 Smith LLP jlowenthal@steyerlaw.com One California Street, 3" Fl. San Francisco, CA 94111 John G. Dooling, Esq. 415-543-4800 Attorneys for Ropers, Majeski, Kohn & Bentley FAX: 415-972-6301 CONSTRUCTION TESTING 201 Spear Street, Suite 1000 jdooling@ropers.com SERVICES, INC. San Francisco, CA 94105 Suzanne M/ Martin, Esq. 415-362-2580 Attorneys for CULLINANE Kelton M. Burgess, Esq. FAX: 415-434-0882 CONSTRUCTION; AL Lewis Brisbois Bisgaard & Smith LLP mnartin@|bbslaw.com NORMAN MECHANICAL, One Sansome Street, Suite 1400 burgess@Ibbslaw.com INC.; and ASPEN San Francisco, CA 94104 INSURANCE UK, LTD Intervener on bebalf of _KILLARNEY CONSTRUCTION, CO. Paul Manasian, Esq. 415-291-8425 Attorneys for MID-MARKET Manasian & Rougeau LLP’ FAX: 415-291-8426 DEVELOPMENT CO., INC. 400 Montgomery Street, Suite 1000 manasian@mrlawsf.com and MICHAEL MURRAY San Francisco, CA 94104Anne Smith From: DocuManager Powered by Fax2Mail [reports@reply.fax2mail.com] Sent: Tuesday, January 24, 2012 9:51 AM To: Anne Smith Subject: Delivery Report Attachments: sentfax--36344693. pdf MAIL2FAX DETAILED DELIVERY REPORT [Attention [Anne M Smith Job Number 36344693 | [Sent By User. F2M/03314990278 : | [Entered Fax2Mail System [01/24 09:46 Report Generated 01/24 09:50 Billing Code 1063653 | Subject Page Count [4 (no cover sheet) : SUMMARY Sent: 5 Errors: 0 _|| Cancelled:.0 Tota:5 | inati INum. Destination Status Time IRetries 4152918426 [SENT 01/24 |[o9:48 l 1 [4154212234 SENT. 01/24 |[o9:47 [ 1 4154340882 SENT llo124 [09:47 [ 1 4157885958 [SENT [o1/24 09:48 [ | [4159726301 [SENT 01/24 09:49 1 1/24/2012