Preview
1 A. Barry Cappello (SBN 037835)
abc@cappellonoel.com
2 Leila J. Noël (SBN 114307)
lnoel@cappellonoel.com
3 David L. Cousineau (SBN 298801)
dcousineau@cappellonoel.com
4 G. Michael Brelje (SBN 269476)
mbrelje@cappellonoel.com
5 Richard Lloyd (SBN 332101)
rlloyd@cappellonoel.com
6 CAPPELLO & NOËL LLP
831 State Street
7 Santa Barbara, California 93101
Telephone: (805) 564-2444
8 Facsimile: (805) 965-5950
9 Attorneys for Plaintiff START INC.
10
SUPERIOR COURT OF THE STATE OF CALIFORNIA
11
FOR THE COUNTY OF SANTA BARBARA – ANACAPA DIVISION
12
13 START INC., a California corporation, Case No.:
14 Plaintiff, COMPLAINT FOR:
15 vs. (1) Breach of Contract
(2) Breach of Implied Covenant of
16 NATIONAL FIRE & MARINE INSURANCE Good Faith and Fair Dealing
COMPANY; BROWN & BROWN (3) Professional Negligence
17 INSURANCE SERVICES OF CALIFORNIA
INC; and DOES 1 through 100, inclusive, DEMAND FOR JURY TRIAL
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Defendants.
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COMPLAINT
1 Nature of the Case
2 1. This case results from a wrongful and bad faith handling and denial of insurance
3 benefits by an insurer, and the professional negligence of an insurance broker in failing to procure
4 adequate coverage for their client. Plaintiff START, INC. (“Start” or “Plaintiff”) hired and relied on
5 Defendant BROWN & BROWN INSURANCE SERVICES OF CALIFORNIA, INC. (“Brown &
6 Brown”) to obtain insurance coverage for Start’s medical cannabis farm, commercial-scale nursery,
7 and plant and pharmaceutical drug research and development greenhouse, the core component of a
8 medical enterprise serving medical patients and business to business customers. Brown & Brown
9 procured an “all-risks” policy from Defendant NATIONAL FIRE & MARINE INSURANCE
10 COMPANY (“National Fire” or “Insurer”) (collectively with Brown & Brown, “Defendants”),
11 providing coverage for Start’s commercial property, business personal property, and business loss.
12 2. When Start’s valuable greenhouse, which housed Start’s inventory of annual mother
13 plants and monthly harvest of cuttings, was damaged after the Thomas Fire in 2017, Start promptly
14 notified National Fire of its claim, and sought reimbursement pursuant to the National Fire policy.
15 Despite reassurances that Start would be fully compensated, National Fire then unreasonably ignored
16 its own toxicology report, delayed releasing available funds, downplayed and undervalued Start’s
17 damaged business property, misidentified building elements, and, after months of unnecessary
18 requests for additional information and documentation, ultimately denied the majority of Start’s
19 business interruption claim. During the claim process, National Fire also (1) claimed that the
20 coverage provided by the policy which Brown & Brown had procured on Start’s behalf was
21 inadequate to cover the full amount of property damage suffered by Start and (2) referenced as part
22 of its denial a marijuana endorsement which it claimed limited the coverage which Start had hired
23 Brown & Brown to procure.
24 The Prior Action and this Complaint
25 3. On May 20, 2019, Start filed an action against the National Fire for breach of its
26 obligations under the insurance contract and fraud in the performance, and against Brown & Brown
27 for professional negligence. (Start Inc. et al v. Matt Porter et al, S.B. Superior Ct. Case No.
28 19CV02637 (hereinafter the “Prior Action”)). National Fire and Brown & Brown answered
2
COMPLAINT
1 Plaintiff’s Second Amended Complaint in the Prior Action, after which the Prior Action was
2 consolidated, over Plaintiff’s objection, with Case No. 19CV04891, titled Start, Inc. et al. v. Lonmar
3 Global Risks Limited, et al. (hereinafter the “Lonmar Action”, and with the “Prior Action” the
4 “Consolidated Action”).
5 4. On April 20, 2021, Start, Defendants, and the defendants in the Lonmar Action
6 entered into a stipulation and tolling agreement to dismiss the Consolidated Action without
7 prejudice, in order for Start to pursue its action against Southern California Edison Company and
8 Edison International for damages arising out of the Thomas Fire and subsequent mudslides, titled CA
9 Union Cooperative et al. vs. Southern California Edison Company et al., pending in the Superior
10 Court of Los Angeles as Case No. 20STCV44868 and consolidated into the Southern California Fire
11 Cases coordination proceeding, JCCP No. 4965 (the “SCE Action”). A true and correct copy of the
12 stipulation and signed order dismissing the Consolidated Action without prejudice, including the
13 tolling agreements entered into between Plaintiff and Defendants, is attached as Exhibit A and is
14 incorporated herein by reference.
15 The Parties
16 5. Plaintiff START, INC. is now, and at all times mentioned herein was, an active
17 corporation in good standing and duly organized under the laws of California, with its principal
18 executive office location in Santa Barbara County, California. Plaintiff owned and/or had insurable
19 interests in real property located at 1628 Cravens Lane, Carpinteria, Santa Barbara County – South
20 County, California 93103 (hereinafter the “Subject Property”).
21 6. Plaintiff is informed and believes and based thereon alleges that Defendant
22 NATIONAL FIRE & MARINE INSURANCE COMPANY and DOES 1 through 25 (hereinafter the
23 “Insurer” or “National Fire”) were corporations or other business entities that at all relevant times
24 were, and are, engaged in the business of insurance in Santa Barbara County in the State of
25 California.
26 7. Plaintiff is informed and believes and based thereon alleges that Defendant BROWN
27 & BROWN INSURANCE SERVICES OF CALIFORNIA, INC., and DOES 26 through 35
28 (hereinafter “Brown & Brown”), were corporations or other business entities that at all relevant
3
COMPLAINT
1 times were, and are, engaged in the business of insurance agency or brokerage in Santa Barbara
2 County in the State of California.
3 8. The true names and capacities of Defendants named herein as DOES 1 through 100,
4 inclusive, are unknown to Plaintiff, who therefore sue said Defendants by such fictitious names.
5 Plaintiff is informed and believes and thereon alleges that each Defendant named herein as a DOE is
6 obligated in some aspect of law or fact to Plaintiff and is further responsible and liable for the
7 damages sustained by Plaintiff, having legally and proximately caused the damages as herein
8 alleged. Plaintiff will amend this Complaint to allege the true names and capacities of said DOE
9 Defendants upon the ascertainment of proof thereof.
10 9. Plaintiff is informed and believes and thereon alleges that each of the Defendants
11 sued herein, either named or unnamed, was the agent, servant, or employee of each of the remaining
12 Defendants and in doing the things hereinafter alleged was acting within the scope of such agency,
13 service, and/or employment. Plaintiff is further informed and believes and thereon alleges that each
14 of the Defendants was acting within the authority and/or permission, and/or with the ratification of
15 each of the remaining Defendants.
16 The Insured Business of Plaintiff Start, Inc.
17 10. Start is a California corporation that operated a state-of-the-art medical cannabis
18 nursery with a growing inventory of select mother plants from which small cuttings were removed as
19 needed to be rooted and then (1) sold as clones or teens or (2) used to maintain a productive
20 inventory of mother plants. Patrick Lang began developing a “seed to patient” legal medical
21 cannabis enterprise in 1998, leased and operated the 55,000 square-foot greenhouse at 1628 Cravens
22 Lane, Carpinteria, California beginning in 2015 to research and develop a state-of-the-art farm and
23 nursery, and in 2017 founded Start Inc., a commercial nursery to serve as the core of the enterprise.
24 Start brought together an elite group of industry leading experts: Patrick Lang, John Stashenko IV,
25 Alfonso Navarro, and Michael Masterman-Smith, PhD, collectively had worked together in all
26 aspects of the legal cannabis industry, focusing on the scalable production, manufacturing, drug
27 delivery science, and distribution of accurately dosed cannabis medicines for treatment of serious
28 illness.
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COMPLAINT
1 11. As industry leaders, with decades of experience, successful careers, families, and
2 hundreds of thousands of investment dollars at stake, Start’s founders were early adopters of
3 conventional business practices. They aimed to develop fully legalized and vertically integrated
4 medical operations, including using business attorneys, CPAs, an onsite controller, and procuring
5 first of its kind insurance coverage within this nascent industry. At the time, insurance was so new
6 to the cannabis industry that in 2017-2018 less than 1% of California cannabis farms were insured,
7 clearly an unprecedented opportunity for Brown and Brown and National Fire who were eager to
8 enter the burgeoning new market.
9 Start’s Insurance Coverage
10 12. Part of Start’s cannabis-nursery insurance coverage was obtained from National Fire.
11 The insurance policy had an effective date of June 9, 2017, to June 9, 2018, and had a policy number
12 of 12PRM039109-01 (hereinafter referred to as “the Policy”). A true and correct copy of the Policy
13 is attached to this Complaint as Exhibit B and is incorporated herein by reference. The Policy
14 included coverages for commercial property, business personal property, and business income.
15 During the procurement process, Start and its founders were transparent about their business, sale
16 projections, and actual sales, and National Fire knew it was insuring a burgeoning new industry. By
17 issuing its policy, National Fire agreed to cover Start’s medical cannabis nursery commercial
18 property, business personal property, and business income.
19 Start’s Covered Loss
20 13. As a result of the smoke and ash created by the Thomas fire, Start’s greenhouse
21 sustained catastrophic toxic damage. Soot and ash coated the greenhouse and its climate-regulating
22 mechanisms, including the shade-cloth and air-vents. The toxic contamination of Start’s greenhouse
23 was particularly damaging because of the deep penetration into the building’s elements and surfaces.
24 The attempted remediation efforts were painstaking, labor-intensive, expensive, and hazardous.
25 14. On or about January 9, 2018, high winds and a torrential rainstorm caused further
26 damages, devastating mudslides, evacuations, and road and highway closures which blocked access
27 to the greenhouse for several days. The event exacerbated damage to the greenhouse and caused key
28 greenhouse infrastructure and equipment to malfunction. The totality of damages made it impossible
5
COMPLAINT
1 to maintain the greenhouse within the strict safe range of atmospheric conditions that are required to
2 sustain Start’s inventory. The greenhouse was unusable until extensive and expensive repairs could
3 be performed to restore the greenhouse to a safe and contamination-free operating condition. During
4 the period that the greenhouse was not safe, Start’s business was interrupted because a clean and
5 operating greenhouse was essential to its operations.
6 15. As national fire experts, National Fire and Brown & Brown knew (or should have
7 known) the catastrophic extent of ash and soot damage to the building based on their core expertise
8 and “Limited Wildfire Soot Assessment” report. They, in fact, hired American Environmental
9 Group, who collected on-site samples in December 2017 and prepared their final report dated
10 January 10, 2018. Then, after producing the report, National Fire and Brown & Brown, and their
11 subsequent “experts,” ignored it, and instead produced and relied on later and irrelevant reports
12 made by the wrong experts (structural and mechanical engineers), thus obfuscating the primary issue
13 of toxic damage to the building.
14 Start’s Insurance Claim and the Insurer’s Response
15 16. When Start became aware that ash and soot from the Thomas fire had damaged the
16 greenhouse, it made a claim on the Policy for damage to its commercial property, business personal
17 property and business interruption caused by Start’s inability to use its greenhouse. The Insurer
18 designated Start’s claim with claim number 12-04-437357 (hereinafter referred to as “the Claim”).
19 When Start regained access to the greenhouse after the mudslides, Start then timely notified National
20 Fire of the further damage it had suffered. Throughout the claims process, National Fire and its
21 agents engaged in dilatory tactics, pointless exercises, and used bad faith in its decision-making
22 process.
23 17. This included ignoring crucial contamination reports and hiring claim adjusters and
24 so-called “experts” who lacked knowledge and experience in the medical cannabis industry in
25 general and possessed even less knowledge of the specific needs of a large-scale medical cannabis
26 nursery. National Fire’s dearth of knowledge and experience led to grossly inaccurate opinions and
27 evaluations, including insisting on ineffective and futile partial repairs; failing to pay out the policy
28 limit to Start when National Fire knew, or should have known, that Start’s damages significantly
6
COMPLAINT
1 exceeded coverage limits, and ultimately, the severe underpayment of Start’s building and business
2 interruption claim. National Fire also unreasonably maintained, in the face of evidence and technical
3 reports to the contrary, that Start’s greenhouse was “fully operational.” As a result, Start struggled
4 to obtain payment from National Fire for its ongoing business interruption losses, and to recover the
5 amounts required to fully restore its damaged business property.
6 18. National Fire’s conduct was particularly egregious because National Fire knew that
7 Start, the core of the medical enterprise, was experiencing financial strain, which was explicitly
8 communicated to National Fire’s agents on multiple occasions. Despite these pleas, National Fire
9 continued to delay or outright deny benefits. As a result of National Fire’s dilatory and unreasonable
10 conduct, Start was deprived of the benefit of its Policy with National Fire, and Start’s principals
11 experienced significant emotional disturbance and distress arising out of National Fire’s misconduct.
12 Defendant Brown & Brown Negligently Procures Policy
13 19. Defendant Brown & Brown Insurance Services of California, Inc., acted as Plaintiff’s
14 insurance agent or broker in procuring the Policy from the Insurer. Start communicated to Brown &
15 Brown the details of its business, including that it operated a large-scale cannabis nursery that grows
16 mother plants producing clones, and teens. Start relied on Brown & Brown to secure an insurance
17 policy that would cover the full value of Start’s business property.
18 20. However, when Start made its claim on the Policy, National Fire claimed that Start
19 was underinsured, i.e., the Policy coverage limits were insufficient to cover the full extent of Start’s
20 losses. Start had relied on Brown & Brown to secure the proper amount of coverage, but Brown &
21 Brown, according to National Fire, failed to secure such coverage. As a result, Start suffered
22 significant uninsured losses that exceeded the amounts of coverage available under the Policy.
23 Additionally, even though Brown & Brown knew that Start was a legal medical marijuana business,
24 Brown & Brown, according to National Fire, obtained a policy that contains a marijuana
25 endorsement that limits the coverage which Brown & Brown was hired to procure.
26 FIRST CAUSE OF ACTION – BREACH OF CONTRACT
27 (By Plaintiff against Defendants National Fire & Marine and DOES 1 through 50)
28 21. Plaintiff realleges and incorporates herein by reference each and every allegation as
7
COMPLAINT
1 though fully incorporated herein.
2 22. As set forth above Start entered a written contract of insurance (with implied
3 provisions) with National Fire.
4 23. National Fire had fiduciary duties under the Policy, the law, and insurance industry
5 custom and practice to, among other things, pay Start for the losses it suffered arising out of damage
6 to its commercial property, business personal property, and loss of business income. National Fire
7 likewise was obligated to conduct a thorough investigation of all bases that might support Start’s
8 claim for coverage, yet failed to do so.
9 24. National Fire breached its fiduciary duties under the Policy by engaging in dilatory
10 tactics and failing to pay Start for the damage to its commercial property, business personal property
11 and loss of business income, including by: asserting grounds to avoid or limit coverage that it knew
12 were not supported by, and are contrary to, the terms of the Policy, the law, industry standards and
13 practices, the parties’ course of dealings, and the facts; failing to conduct an honest evaluation of
14 Start’s claims and asserting grounds to avoid coverage based on its corrupt investigation; failing to
15 fully inquire into possible bases that might support coverage for Start; and giving greater
16 consideration to its own interests than it gave to Start’s interests as National Fire’s insured.
17 25. Start has performed all covenants and conditions required under the Policy unless
18 otherwise excused by National Fire.
19 26. As a proximate cause of National Fire’s breach of contract, Start has suffered, and
20 continues to suffer, damages in an amount according to proof, but which exceeds the jurisdictional
21 limits of this Court.
22 SECOND CAUSE OF ACTION – BREACH OF THE IMPLIED COVENANT OF GOOD
FAITH AND FAIR DEALING
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(By Plaintiff against Defendants National Fire & Marine and DOES 1 through 50)
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27. Plaintiff realleges and incorporates herein by reference each and every allegation as
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though fully incorporated herein.
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28. During its processing of Start’s claim, National Fire, acting via and through its agents,
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committed the acts described above, including but not limited to: (1) employing purportedly
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8
COMPLAINT
1 “independent” adjusters with clear bias and limited expertise or knowledge of medical cannabis
2 businesses; (2) ignoring crucial toxicity reports; (3) employing unqualified so-called “experts” with a
3 clear bias against Start’s business; (4) withholding, “drip-feeding” and exhausting available coverage
4 amounts for futile remediation work; (5) bombarding Start with various meritless queries and
5 requests for documentation; and (6) ultimately largely denying Start’s business interruption claim for
6 the purpose of violating the rights and benefits to which Start is entitled under the Policy and without
7 considering Start’s interests and rights under the Policy.
8 29. As a direct and proximate result of National Fire’s unreasonable acts, Start has been
9 damaged in an amount in excess of the Court’s jurisdictional limits.
10 30. National Fire’s acts are inconsistent with Start’s reasonable expectations, and are
11 contrary to established insurance claims practices and legal requirements, and constitute bad faith.
12 31. Pursuant to the holding in Brandt v. Superior Court (1985) 37 Cal. 3d 813, Start is
13 entitled to recover all attorneys’ fees that it reasonably incurred, and is incurring, in its efforts to
14 obtain the benefits of the coverage that National Fire wrongfully withheld, and is withholding, in bad
15 faith, plus interest. The total amount of these attorneys’ fees is currently unknown but will be
16 asserted according to proof.
17 32. National Fire’s conduct is despicable and was conducted with a conscious disregard
18 of Start’s rights, constituting oppression, fraud, and/or malice. National Fire engaged in a series of
19 acts designed to wrongfully deny the benefits due under the Policy. Specifically, National Fire, in
20 acting as alleged above and in possession of information, facts, and law to the contrary, consciously
21 disregarded Start’s rights, and forced Start to incur substantial financial loss, without sufficient
22 assistance from National Fire, thereby inflicting substantial damages to Start. National Fire ignored
23 Start’s interests and concerns, with the intent to injure and act fraudulently, within the meaning of
24 Civil Code, section 3294. Start is therefore entitled to recover punitive damages in an amount
25 sufficient to punish, make an example of, and to deter similar conduct.
26 THIRD CAUSE OF ACTION – PROFESSIONAL NEGLIGENCE
27 (By Plaintiff against Defendants Brown & Brown Insurance Services of California, Inc.
28 and DOES 25 through 35)
9
COMPLAINT
1 33. Plaintiff realleges and incorporates herein by reference each and every allegation as
2 though fully incorporated herein.
3 34. Defendant Brown & Brown acted as Plaintiff’s insurance agent in procuring the
4 Policy from the Insurer. Start communicated to Brown & Brown the details of its enterprise,
5 including that it operated a large-scale medical cannabis nursery that grows mother plants which
6 produce clones and teens, and relied on Brown & Brown to determine the proper insurance coverage
7 amounts for the policy secured through National Fire, and to secure such amounts of insurance
8 coverage as part of its agency or brokerage activities.
9 35. Through the claims process, Start was told by National Fire that it was underinsured,
10 meaning that Brown & Brown had failed to secure the proper amount of coverage. National Fire
11 also referenced as part of its partial denial a marijuana endorsement which it claimed limited the
12 coverage for which Brown & Brown was hired to procure. As a result, Start suffered losses which
13 allegedly were not covered by the Policy Brown & Brown was hired to procure.
14 36. Brown & Brown owed Start a duty to use reasonable care, diligence, and judgment in
15 procuring insurance on behalf of Start. Brown & Brown knew of the specific needs of Start’s
16 business, knew the particular type and extent of coverage, and Start reasonably relied on Brown &
17 Brown to properly secure insurance for Start’s business. As a proximate cause of Brown & Brown’s
18 conduct, Plaintiff suffered significant economic loss and damages, in an amount according to proof,
19 but which exceeds the jurisdictional limits of this Court.
20
21 PRAYER FOR RELIEF
22 WHEREFORE, Start prays for judgment against as follows:
23 First Cause of Action
24 (Breach of Contract against National Fire)
25 1. For compensatory, general, consequential, and incidental damages, in an amount
26 according to proof;
27 2. For pre-judgment and post-judgment interest at the legal rate;
28 3. For costs and expenses of suit;
10
COMPLAINT
1 4. For such other further relief as the Court may deem just and proper.
2 Second Cause of Action
3 (Breach of Implied Covenant of Good Faith and Fair Dealing against National Fire)
4 1. For compensatory, general, consequential, and incidental damages, in an amount
5 according to proof;
6 2. For pre-judgment and post-judgment interest at the legal rate;
7 3. For costs and expenses of suit, including attorney’s fees per Brandt v. Superior Court
8 (1985) 37 Cal.3d 813;
9 4. For exemplary/punitive damages pursuant to Civil Code § 3294, in an amount
10 appropriate to punish Defendant NATIONAL FIRE & MARINE INSURANCE
11 COMPANY and others from engaging in similar misconduct; and
12 5. For such other further relief as the Court may deem just and proper.
13 Third Cause of Action
14 (Professional Negligence against Brown & Brown)
15 1. For compensatory, general, consequential, and incidental damages, in an amount
16 according to proof;
17 2. For pre-judgment and post-judgment interest at the legal rate;
18 3. For costs and expenses of suit;
19 4. For such other further relief as the Court may deem just and proper.
20
21 Dated: March 9, 2023 CAPPELLO & NOËL LLP
22
By: /s/ Leila J. Noël
23 G. Barry Cappello
Leila J. Noël
24 David L. Cousineau
25 G. Michael Brelje
Richard Lloyd
26 Attorneys for Plaintiff START, INC.
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COMPLAINT
1 DEMAND FOR TRIAL BY JURY
2 Plaintiff demands a trial by jury of all issues so triable in this action.
3
4 Dated: March 9, 2023 CAPPELLO & NOËL LLP
5
By: /s/ Leila J. Noël
6 A. Barry Cappello
Leila J. Noël
7 David L. Cousineau
8 G. Michael Brelje
Richard Lloyd
9 Attorneys for Plaintiff START, INC.
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COMPLAINT
EXHIBIT A
Pursuant to CRC 2.259 this document has been electronically filed by the
Superior Court of California, County of Santa Barbara, on 4/16/2021
1 A. Barry Cappello (CSB No. 037835)
abc@cappellonoel.com FILED
2 Leila J. Noël (CSB No. 114307) SUPERIOR COURT of CALIFORNIA
lnoel@cappellonoel.com COUNTY of SANTA BARBARA
3 CAPPELLO & NOËL LLP 04/20/2021
831 State Street Darrel E. Parker, Executive Officer
4 Santa Barbara, California 93101 Chavez, Terri
BY________________________
Telephone: (805) 564-2444 Deputy Clerk
5 Facsimile: (805) 965-5950
6 Robert Nelson (SBN 132797)
rnelson@lchb.com
7 Lexi J. Hazam (SBN 224457)
8 lhazam@lchb.com
Lieff, Cabraser, Heimann & Bernstein, LLP
9 275 Battery Street, 29th Floor,
San Francisco, CA 94111
10 Telephone: (415) 956-1000
Fax: (415) 956-1008
11
12 Attorneys for Plaintiff
START, INC.
13
SUPERIOR COURT OF THE STATE OF CALIFORNIA
14
COUNTY OF SANTA BARBARA
15
START, INC., a California corporation, Case No.: 19CV02637
16
Plaintiff, [Consolidated with Case No. 19CV04891]
17 v.
Judge: Hon. Donna D. Geck
18 NATIONAL FIRE & MARINE INSURANCE
COMPANY et al.
19 STIPULATION AND [PROPOSED]
ORDER TO DISMISS WITHOUT
20 PREJUDICE DEFENDANTS NATIONAL
Defendants. FIRE & MARINE INSURANCE
21 COMPANY; BROWN & BROWN
INSURANCE SERVICES OF
22 CALIFORNIA, INC. AND ROYAL &
SUN ALLIANCE PLC, AND DISMISS
23 WITH PREJUDICE DEFENDANT
BRENT BUHRMAN
24
Complaint Filed: May 20, 2019
25 SAC Filed: November 22, 2019
Trial Date: Not Set
26
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STIPULATION AND [PROPOSED] ORDER TO DISMISS WITHOUT PREJUDICE DEFENDANTS NATIONAL
FIRE & MARINE INSURANCE, BROWN & BROWN INSURANCE SERVICES OF CALIFORNIA, INC., ROYAL
& SUN ALLIANCE PLC, AND DISMISS WITH PREJUDICE BRENT BUHRMAN
1 This Stipulation is entered into by and among Plaintiff Start, Inc. (“Plaintiff”) and
2 Defendants National Fire & Marine Insurance Company; Brown & Brown Insurance Services of
3 California, Inc.; Royal & Sun Alliance PLC, and Brent Buhrman (“Defendants,” and collectively
4 with Plaintiff, the “Parties”), by and through their undersigned counsel, with reference to the
5 following:
6 1. WHEREAS, Plaintiff filed a complaint for damages on May 20, 2019 in Start, Inc. vs.
7 National Fire & Marine Insurance et al., Case No. 19CV02637 (the “National Fire Action”);
8 2. WHEREAS, Plaintiff filed a complaint for damages on September 12, 2019 in Start,
9 Inc. vs. Lonmar Global Risks Limited et al., Case No. 19CV04891 (the “Lonmar Action”);
10 2. WHEREAS, the Lonmar Action was consolidated with the National Fire Action for
11 pretrial and trial purposes, by order dated January 22, 2021.
12 6. WHEREAS, Plaintiff is currently pursuing an action against Southern California
13 Edison Company and Edison International for damages arising out of the Thomas Fire and
14 subsequent mudslides, titled CA Union Cooperative et al. vs. Southern California Edison Company
15 et al., currently pending in the Superior Court of Los Angeles County as Case No. 20STCV44868,
16 and consolidated into the Southern California Fire Cases coordination proceedings, JCCP No. 4965
17 (the “SCE Action.”)
18 7. WHEREAS, resolution of the SCE Action may result in a more efficient resolution of
19 the National Fire Action and the Lonmar Action, and the Parties have entered into tolling agreements
20 addressing the claims asserted by Plaintiff against the Defendants in those actions. The tolling
21 agreements are incorporated by reference and are attached hereto as Exhibit A.
22 NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED:
23 1. Defendant Brent Buhrman be dismissed with prejudice, with each party to bear their
24 own fees and costs.
25 2. The remaining claims in the National Fire Action and the Lonmar Action be
26 dismissed without prejudice, with each party to bear their own fees and costs.
27 //
28
2
STIPULATION AND [PROPOSED] ORDER TO DISMISS WITHOUT PREJUDICE DEFENDANTS NATIONAL
FIRE & MARINE INSURANCE, BROWN & BROWN INSURANCE SERVICES OF CALIFORNIA, INC., ROYAL
& SUN ALLIANCE PLC, AND DISMISS WITH PREJUDICE BRENT BUHRMAN
1 DATED: April 16, 2021 CAPPELLO & NOËL LLP
2
3 By: ___ /s/ Leila J. Noël___
Leila J. Noël
4 Attorneys for Start, Inc.
5
6 DATED: April 16, 2021 FORAN GLENNON
7
8 /s/ Dianne J. Meconis
By: ____ _________________________
Dianne J. Meconis
9 Attorneys for National Fire & Marine Insurance
10 DATED: April 16, 2021 DAVIS WRIGHT TREMAINE LLP
11
12 /s/ James Moon
By: ______________________________
James Moon
13 Attorneys for Brown & Brown Insurance
Services of California, Inc.
14
DATED: April 16, 2021 CLYDE & CO US LLP
15
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/s/ Conte Cicala
By: ______________________________
17
Conte Cicala
18 Attorneys for Royal & Sun Alliance PLC and
Brent Buhrman
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3
STIPULATION AND [PROPOSED] ORDER TO DISMISS WITHOUT PREJUDICE DEFENDANTS NATIONAL
FIRE & MARINE INSURANCE, BROWN & BROWN INSURANCE SERVICES OF CALIFORNIA, INC., ROYAL
& SUN ALLIANCE PLC, AND DISMISS WITH PREJUDICE BRENT BUHRMAN
EXHIBIT A
——Owner
4/13/2021
TOLLING AGREEMENT
This agreement is made by and between Start, Inc., a California corporation, and Brown
& Brown Insurance Services of California, Inc. (collectively, the “Parties”), and is made in
reference to the following facts:
WHEREAS, Start, Inc. alleges it owns and/or had insurable interests in real property
located at 1628 Cravens Lane, Carpinteria, Santa Barbara County-South County, California,
93013 (the “Subject Property”).
WHEREAS, Start, Inc. alleges Brown & Brown Insurance Services of California, Inc.
(“Brown & Brown”) acted as Start, Inc’s insurance broker in procuring an insurance policy from
National Fire & Marine Insurance Company (“National Fire”) with an effective date of June 9,
2017 to June 9, 2018, with policy number 12PRM039109-01, which provided coverage for
commercial property, business personal property, and business income (the “Policy”).
WHEREAS, Start, Inc. alleges starting on December 4, 2017 and over a period of
approximately five weeks, the Thomas Fire burned hundreds of thousands of acres in Santa
Barbara County, California, causing damage to the Subject Property.
WHEREAS, Start, Inc. alleges in January 2018, a torrential wind and rainstorm caused
additional damage and/or exacerbated the prior damage to the Subject Property, and caused
mudslides in the Montecito area, approximately four miles from the Subject Property.
WHEREAS, a dispute subsequently arose between Start, Inc. and National Fire regarding
the extent of coverage provided by the Policy; the conduct of National Fire’s employees, and/or
agents in connection with the coverage dispute, and the conduct of Brown & Brown and its
employees and/or agents in connection with procuring the Policy.
WHEREAS, Start, Inc. subsequently filed a complaint for damages on May 20, 2019 in
the Superior Court of California, County of Santa Barbara – South County, titled Start, Inc. vs.
National Fire & Marine Insurance Company et al., Case No. 19CV02637 (the “National Fire
Action”).
WHEREAS, Start, Inc. filed its operative Second Amended Complaint on November 22,
2019.
WHEREAS Brown & Brown filed its Answer to Start, Inc’s Second Amended Complaint
on December 27, 2019.
WHEREAS, Start, Inc. and related entities filed a complaint for damages on November
23, 2020 against Southern California Edison Company and Edison International in the Superior
Court of California, County of Los Angeles, titled CA Union Cooperative, Inc. et al. vs. Southern
California Edison Company, et al. (the “SCE Action”).
WHEREAS, the SCE Action was subsequently consolidated into the pending Southern
California Fire Cases coordination proceedings, JCCP No. 4965.
WHEREAS Start, Inc. believes that resolution of the SCE Action may result in a more
efficient resolution of the dispute between the Parties, including the pending National Fire
Action, and desire to enter into an agreement to dismiss the National Fire Action without
prejudice and toll any applicable statutes of limitation pending the outcome of the SCE Action.
NOW THEREFORE, in consideration of the mutual terms, covenants, conditions and
promises contained herein, the Parties hereto agree as follows.
1. Start, Inc. agrees to dismiss its claims against Brown & Brown in the pending National
Fire Action without prejudice, with each Party to bear their own costs and fees. To
facilitate the dismissal, Brown & Brown agrees to sign the attached stipulation, which
counsel for Start, Inc. will file within five (5) days of receipt of the fully executed Tolling
Agreement and Stipulation.
2. The statutes of limitations applicable to Start, Inc.’s claims against Brown & Brown shall
be tolled and suspended as of the date of the last signature on this Tolling Agreement and
shall be tolled and suspended until this agreement is no longer in effect (the “Tolling
Period”). This Agreement is not intended to revive and shall not revive any claims that
are time barred as of the date this Tolling Agreement is executed. This Agreement is
entered into by all of the parties hereto. This Tolling Agreement applies to any defense,
legal or equitable, based upon the lapse of time, including but not limited to the statute of
limitations, laches, estoppel, waiver, timely action or notice.
3. This Tolling Agreement may be terminated by either Party by providing thirty (30) days
advance written notice of the intent to terminate to all other Parties (the “Termination
Notice”). Upon termination of the Tolling Agreement by such written notice, the
Termination Period shall end at midnight, thirty (30) days after the Termination Notice is
received by the other Party.
4. This Agreement shall not be construed as an admission of any fact or actual or potential
liability on the part of any Party. This Agreement may not be offered as evidence of an
admission of any liability or fact in any court proceedings.
5. Each of the Parties represents and warrants that it has the authority to execute this
Agreement on behalf of itself and its employees and clients.
6. This Agreement shall inure only to the benefit of the Parties hereto, and not to any other
persons, organizations, or other entities. The Parties agree that this Agreement shall not
benefit any third parties.
2
7. This Agreement may be executed in any number of counterparts with the same effects as
if the Parties had signed the same document. All counterparts shall be construed together
and shall constitute one Agreement.
8. The provisions of this Agreement comprise all of the terms, conditions, agreements and
representations of the Parties respecting the tolling of Start Inc’s claims against Brown &
Brown. This Agreement may not be altered or amended, and no provision hereof may be
waived, except by written agreement executed by the Parties, or their representative if
notice of counsel is given, to be bound. The Parties hereby agree that terms of this
Agreement have not been changed, modified, or expanded by any oral agreements or
representations entered into or made prior to or at the execution of this Agreement.
9. Start, Inc. and Brown & Brown expressly reserve all rights which they may have in law
or equity, except as set forth in this Tolling Agreement, to contest or defend any claim or
cause of action that may be asserted or initiated against Start, Inc. or Brown & Brown in
any suit or action.
10. Any notices to be provided in accordance with this Tolling Agreement may be delivered
by personal delivery, mailed by certified mail, return receipt requested, or electronic
means to:
a. Start, Inc.: Leila J. Noël
lnoel@cappellonoel.com
Cappello & Noël LLP
831 State Street
Santa Barbara, CA 93101
Patrick F. Lang
patricklang63@gmail.com
Start, Inc.
21355 Pacific Coast Highway, Ste. 201-1
Malibu, CA 90265
b. Brown & Brown: Joseph E. Addiego III
joeaddiego@dwt.com
Davis Wright Tremaine LLP
505 Montgomery Street, Suite 800
San Francisco, CA 94111-6533
James H. Moon
jamesmoon@dwt.com
Davis Wright Tremaine LLP
865 South Figueroa Street, Suite 2400
Los Angeles, CA 90017
3
11. This Tolling Agreement is effective upon execution by all Parties, and without the
requirement of filing, or endorsement by, any Court.
[REMAINDER OF THIS PAGE DELIBERATELY LEFT BLANK]
4
START, INC.
BY:
____________________________
—— Owner
Patrick Lang, CEO
4/13/2021
Date: ________________________
BROWN & BROWN INSURANCE SERVICES
OF CALIFORNIA, INC.
BY:
____________________________
James H. Moon, Esq.
April 13, 2021
Date: ________________________
5
TOLLING AGREEMENT
This agreement is made by and between Start, Inc., a California corporation and Royal &
Sun Alliance PLC and Brent Buhrman (collectively, the “Parties”), and is made in reference to
the following facts:
WHEREAS, Start, Inc. owns and/or had insurable interests in personal property located
at 1628 Cravens Lane, Carpinteria, Santa Barbara County-South County, California, 93013 (the
“Subject Property”).
WHEREAS Start, Inc. obtained a Marine Cargo insurance policy from Royal & Sun
Alliance PLC (“RSA”) with an effective date of June 9, 2017 to June 9, 2018, with policy
number B0799MC038880K, which it contends provided coverage for among other things Start,
Inc.’s legal cannabis plants (the “Policy”).
WHEREAS, Start, Inc. has claimed that starting on December 4, 2017 and over a period
of approximately five weeks, the Thomas Fire burned hundreds of thousands of acres in Santa
Barbara County, California, causing damage to the Subject Property.
WHEREAS, Start, Inc. has claimed that in January 2018, a torrential wind and rainstorm
caused additional damage and/or exacerbated the prior damage to the Subject Property, and
caused mudslides in the Montecito area, approximately four miles from the Subject Property.
WHEREAS, a dispute subsequently arose between Start, Inc. and RSA regarding the
extent of coverage provided by the Policy, and the conduct of RSA’s employees, and/or agents in
connection with the coverage dispute, including the conduct of RSA’s consultant, Brent
Buhrman (“Buhrman”).
WHEREAS, Start, Inc. subsequently filed a complaint for damages on September 12,
2019 in the Superior Court of California, County of Santa Barbara – South County, titled Start,
Inc. vs. Lonmar Global Risks Limited et al., Case No. 19CV04891 (the “Lonmar Action”).
WHEREAS, Start, Inc. filed its operative Second Amended Complaint on March 23,
2020.
WHEREAS RSA and Buhrman have filed their respective Answers to Start, Inc’s Second
Amended Complaint.
WHEREAS, the Lonmar Action was consolidated on January 22, 2021 with the pending
case of Start, Inc. v. National Fire & Marine Insurance Company et al., Case No. 19CV02637
for pre-trial and trial purposes.
WHEREAS, Start, Inc. and related entities filed a complaint for damages on November
23, 2020 against Southern California Edison Company and Edison International in the Superior
Court of California, County of Los Angeles, titled CA Union Cooperative, Inc. et al. vs. Southern
California Edison Company, et al. (the “SCE Action”).
WHEREAS, the SCE Action was subsequently consolidated into the pending Southern
California Fire Cases coordination proceedings, JCCP No. 4965.
WHEREAS the Parties agree that resolution of the SCE Action may result in a more
efficient resolution of the dispute between the Parties, including the pending Lonmar Action, and
desire to enter into an agreement to dismiss the Lonmar Action without prejudice and toll any
applicable statutes of limitation pending the outcome of the SCE Action.
NOW THEREFORE, in consideration of the mutual terms, covenants, conditions and
promises contained herein, the Parties hereto agree as follows.
1. All of the foregoing recitals are incorporated herein by reference.
2. Start, Inc. agrees to dismiss its claims against RSA in the pending Lonmar Action without
prejudice and against Buhrman with prejudice, with each Party to bear their own costs
and fees. To facilitate the dismissal, RSA and Buhrman agree to sign the attached
stipulation, which counsel for Start, Inc. will file within five (5) days of receipt of the
fully executed Tolling Agreement and Stipulation.
3. The statutes of limitations applicable to Start, Inc.’s claims against RSA shall be tolled
and suspended as of the date of this Tolling Agreement and shall be tolled and suspended
until this agreement is no longer in effect (the “Tolling Period”). This Agreement is not
intended to revive and shall not revive any claims that are time barred as of the date this
Tolling Agreement is executed. This Agreement is entered into by all of the Parties
hereto. This Tolling Agreement applies to any defense, legal or equitable, based upon the
lapse of time, including but not limited to the statute of limitations, laches, estoppel,
waiver, timely action or notice.
4. This Tolling Agreement may be terminated by either Party by providing thirty (30) days
advance written notice of the intent to terminate to all other Parties (the “Termination
Notice”). Upon t
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1 A. Barry Cappello (SBN 037835) abc@cappellonoel.com 2 Leila J. Noël (SBN 114307) lnoel@cappellonoel.com 3 David L. Cousineau (SBN 298801) dcousineau@cappellonoel.com 4 G. Michael Brelje (SBN 269476) mbrelje@cappellonoel.com 5 Richard Lloyd (SBN 332101) rlloyd@cappellonoel.com 6 CAPPELLO & NOËL LLP 831 State Street 7 Santa Barbara, California 93101 Telephone: (805) 564-2444 8 Facsimile: (805) 965-5950 9 Attorneys for Plaintiff START INC. 10 SUPERIOR COURT OF THE STATE OF CALIFORNIA 11 FOR THE COUNTY OF SANTA BARBARA – ANACAPA DIVISION 12 13 START INC., a California corporation, Case No.: 14 Plaintiff, COMPLAINT FOR: 15 vs. (1) Breach of Contract (2) Breach of Implied Covenant of 16 NATIONAL FIRE & MARINE INSURANCE Good Faith and Fair Dealing COMPANY; BROWN & BROWN (3) Professional Negligence 17 INSURANCE SERVICES OF CALIFORNIA INC; and DOES 1 through 100, inclusive, DEMAND FOR JURY TRIAL 18 Defendants. 19 20 21 22 23 24 25 26 27 28 COMPLAINT 1 Nature of the Case 2 1. This case results from a wrongful and bad faith handling and denial of insurance 3 benefits by an insurer, and the professional negligence of an insurance broker in failing to procure 4 adequate coverage for their client. Plaintiff START, INC. (“Start” or “Plaintiff”) hired and relied on 5 Defendant BROWN & BROWN INSURANCE SERVICES OF CALIFORNIA, INC. (“Brown & 6 Brown”) to obtain insurance coverage for Start’s medical cannabis farm, commercial-scale nursery, 7 and plant and pharmaceutical drug research and development greenhouse, the core component of a 8 medical enterprise serving medical patients and business to business customers. Brown & Brown 9 procured an “all-risks” policy from Defendant NATIONAL FIRE & MARINE INSURANCE 10 COMPANY (“National Fire” or “Insurer”) (collectively with Brown & Brown, “Defendants”), 11 providing coverage for Start’s commercial property, business personal property, and business loss. 12 2. When Start’s valuable greenhouse, which housed Start’s inventory of annual mother 13 plants and monthly harvest of cuttings, was damaged after the Thomas Fire in 2017, Start promptly 14 notified National Fire of its claim, and sought reimbursement pursuant to the National Fire policy. 15 Despite reassurances that Start would be fully compensated, National Fire then unreasonably ignored 16 its own toxicology report, delayed releasing available funds, downplayed and undervalued Start’s 17 damaged business property, misidentified building elements, and, after months of unnecessary 18 requests for additional information and documentation, ultimately denied the majority of Start’s 19 business interruption claim. During the claim process, National Fire also (1) claimed that the 20 coverage provided by the policy which Brown & Brown had procured on Start’s behalf was 21 inadequate to cover the full amount of property damage suffered by Start and (2) referenced as part 22 of its denial a marijuana endorsement which it claimed limited the coverage which Start had hired 23 Brown & Brown to procure. 24 The Prior Action and this Complaint 25 3. On May 20, 2019, Start filed an action against the National Fire for breach of its 26 obligations under the insurance contract and fraud in the performance, and against Brown & Brown 27 for professional negligence. (Start Inc. et al v. Matt Porter et al, S.B. Superior Ct. Case No. 28 19CV02637 (hereinafter the “Prior Action”)). National Fire and Brown & Brown answered 2 COMPLAINT 1 Plaintiff’s Second Amended Complaint in the Prior Action, after which the Prior Action was 2 consolidated, over Plaintiff’s objection, with Case No. 19CV04891, titled Start, Inc. et al. v. Lonmar 3 Global Risks Limited, et al. (hereinafter the “Lonmar Action”, and with the “Prior Action” the 4 “Consolidated Action”). 5 4. On April 20, 2021, Start, Defendants, and the defendants in the Lonmar Action 6 entered into a stipulation and tolling agreement to dismiss the Consolidated Action without 7 prejudice, in order for Start to pursue its action against Southern California Edison Company and 8 Edison International for damages arising out of the Thomas Fire and subsequent mudslides, titled CA 9 Union Cooperative et al. vs. Southern California Edison Company et al., pending in the Superior 10 Court of Los Angeles as Case No. 20STCV44868 and consolidated into the Southern California Fire 11 Cases coordination proceeding, JCCP No. 4965 (the “SCE Action”). A true and correct copy of the 12 stipulation and signed order dismissing the Consolidated Action without prejudice, including the 13 tolling agreements entered into between Plaintiff and Defendants, is attached as Exhibit A and is 14 incorporated herein by reference. 15 The Parties 16 5. Plaintiff START, INC. is now, and at all times mentioned herein was, an active 17 corporation in good standing and duly organized under the laws of California, with its principal 18 executive office location in Santa Barbara County, California. Plaintiff owned and/or had insurable 19 interests in real property located at 1628 Cravens Lane, Carpinteria, Santa Barbara County – South 20 County, California 93103 (hereinafter the “Subject Property”). 21 6. Plaintiff is informed and believes and based thereon alleges that Defendant 22 NATIONAL FIRE & MARINE INSURANCE COMPANY and DOES 1 through 25 (hereinafter the 23 “Insurer” or “National Fire”) were corporations or other business entities that at all relevant times 24 were, and are, engaged in the business of insurance in Santa Barbara County in the State of 25 California. 26 7. Plaintiff is informed and believes and based thereon alleges that Defendant BROWN 27 & BROWN INSURANCE SERVICES OF CALIFORNIA, INC., and DOES 26 through 35 28 (hereinafter “Brown & Brown”), were corporations or other business entities that at all relevant 3 COMPLAINT 1 times were, and are, engaged in the business of insurance agency or brokerage in Santa Barbara 2 County in the State of California. 3 8. The true names and capacities of Defendants named herein as DOES 1 through 100, 4 inclusive, are unknown to Plaintiff, who therefore sue said Defendants by such fictitious names. 5 Plaintiff is informed and believes and thereon alleges that each Defendant named herein as a DOE is 6 obligated in some aspect of law or fact to Plaintiff and is further responsible and liable for the 7 damages sustained by Plaintiff, having legally and proximately caused the damages as herein 8 alleged. Plaintiff will amend this Complaint to allege the true names and capacities of said DOE 9 Defendants upon the ascertainment of proof thereof. 10 9. Plaintiff is informed and believes and thereon alleges that each of the Defendants 11 sued herein, either named or unnamed, was the agent, servant, or employee of each of the remaining 12 Defendants and in doing the things hereinafter alleged was acting within the scope of such agency, 13 service, and/or employment. Plaintiff is further informed and believes and thereon alleges that each 14 of the Defendants was acting within the authority and/or permission, and/or with the ratification of 15 each of the remaining Defendants. 16 The Insured Business of Plaintiff Start, Inc. 17 10. Start is a California corporation that operated a state-of-the-art medical cannabis 18 nursery with a growing inventory of select mother plants from which small cuttings were removed as 19 needed to be rooted and then (1) sold as clones or teens or (2) used to maintain a productive 20 inventory of mother plants. Patrick Lang began developing a “seed to patient” legal medical 21 cannabis enterprise in 1998, leased and operated the 55,000 square-foot greenhouse at 1628 Cravens 22 Lane, Carpinteria, California beginning in 2015 to research and develop a state-of-the-art farm and 23 nursery, and in 2017 founded Start Inc., a commercial nursery to serve as the core of the enterprise. 24 Start brought together an elite group of industry leading experts: Patrick Lang, John Stashenko IV, 25 Alfonso Navarro, and Michael Masterman-Smith, PhD, collectively had worked together in all 26 aspects of the legal cannabis industry, focusing on the scalable production, manufacturing, drug 27 delivery science, and distribution of accurately dosed cannabis medicines for treatment of serious 28 illness. 4 COMPLAINT 1 11. As industry leaders, with decades of experience, successful careers, families, and 2 hundreds of thousands of investment dollars at stake, Start’s founders were early adopters of 3 conventional business practices. They aimed to develop fully legalized and vertically integrated 4 medical operations, including using business attorneys, CPAs, an onsite controller, and procuring 5 first of its kind insurance coverage within this nascent industry. At the time, insurance was so new 6 to the cannabis industry that in 2017-2018 less than 1% of California cannabis farms were insured, 7 clearly an unprecedented opportunity for Brown and Brown and National Fire who were eager to 8 enter the burgeoning new market. 9 Start’s Insurance Coverage 10 12. Part of Start’s cannabis-nursery insurance coverage was obtained from National Fire. 11 The insurance policy had an effective date of June 9, 2017, to June 9, 2018, and had a policy number 12 of 12PRM039109-01 (hereinafter referred to as “the Policy”). A true and correct copy of the Policy 13 is attached to this Complaint as Exhibit B and is incorporated herein by reference. The Policy 14 included coverages for commercial property, business personal property, and business income. 15 During the procurement process, Start and its founders were transparent about their business, sale 16 projections, and actual sales, and National Fire knew it was insuring a burgeoning new industry. By 17 issuing its policy, National Fire agreed to cover Start’s medical cannabis nursery commercial 18 property, business personal property, and business income. 19 Start’s Covered Loss 20 13. As a result of the smoke and ash created by the Thomas fire, Start’s greenhouse 21 sustained catastrophic toxic damage. Soot and ash coated the greenhouse and its climate-regulating 22 mechanisms, including the shade-cloth and air-vents. The toxic contamination of Start’s greenhouse 23 was particularly damaging because of the deep penetration into the building’s elements and surfaces. 24 The attempted remediation efforts were painstaking, labor-intensive, expensive, and hazardous. 25 14. On or about January 9, 2018, high winds and a torrential rainstorm caused further 26 damages, devastating mudslides, evacuations, and road and highway closures which blocked access 27 to the greenhouse for several days. The event exacerbated damage to the greenhouse and caused key 28 greenhouse infrastructure and equipment to malfunction. The totality of damages made it impossible 5 COMPLAINT 1 to maintain the greenhouse within the strict safe range of atmospheric conditions that are required to 2 sustain Start’s inventory. The greenhouse was unusable until extensive and expensive repairs could 3 be performed to restore the greenhouse to a safe and contamination-free operating condition. During 4 the period that the greenhouse was not safe, Start’s business was interrupted because a clean and 5 operating greenhouse was essential to its operations. 6 15. As national fire experts, National Fire and Brown & Brown knew (or should have 7 known) the catastrophic extent of ash and soot damage to the building based on their core expertise 8 and “Limited Wildfire Soot Assessment” report. They, in fact, hired American Environmental 9 Group, who collected on-site samples in December 2017 and prepared their final report dated 10 January 10, 2018. Then, after producing the report, National Fire and Brown & Brown, and their 11 subsequent “experts,” ignored it, and instead produced and relied on later and irrelevant reports 12 made by the wrong experts (structural and mechanical engineers), thus obfuscating the primary issue 13 of toxic damage to the building. 14 Start’s Insurance Claim and the Insurer’s Response 15 16. When Start became aware that ash and soot from the Thomas fire had damaged the 16 greenhouse, it made a claim on the Policy for damage to its commercial property, business personal 17 property and business interruption caused by Start’s inability to use its greenhouse. The Insurer 18 designated Start’s claim with claim number 12-04-437357 (hereinafter referred to as “the Claim”). 19 When Start regained access to the greenhouse after the mudslides, Start then timely notified National 20 Fire of the further damage it had suffered. Throughout the claims process, National Fire and its 21 agents engaged in dilatory tactics, pointless exercises, and used bad faith in its decision-making 22 process. 23 17. This included ignoring crucial contamination reports and hiring claim adjusters and 24 so-called “experts” who lacked knowledge and experience in the medical cannabis industry in 25 general and possessed even less knowledge of the specific needs of a large-scale medical cannabis 26 nursery. National Fire’s dearth of knowledge and experience led to grossly inaccurate opinions and 27 evaluations, including insisting on ineffective and futile partial repairs; failing to pay out the policy 28 limit to Start when National Fire knew, or should have known, that Start’s damages significantly 6 COMPLAINT 1 exceeded coverage limits, and ultimately, the severe underpayment of Start’s building and business 2 interruption claim. National Fire also unreasonably maintained, in the face of evidence and technical 3 reports to the contrary, that Start’s greenhouse was “fully operational.” As a result, Start struggled 4 to obtain payment from National Fire for its ongoing business interruption losses, and to recover the 5 amounts required to fully restore its damaged business property. 6 18. National Fire’s conduct was particularly egregious because National Fire knew that 7 Start, the core of the medical enterprise, was experiencing financial strain, which was explicitly 8 communicated to National Fire’s agents on multiple occasions. Despite these pleas, National Fire 9 continued to delay or outright deny benefits. As a result of National Fire’s dilatory and unreasonable 10 conduct, Start was deprived of the benefit of its Policy with National Fire, and Start’s principals 11 experienced significant emotional disturbance and distress arising out of National Fire’s misconduct. 12 Defendant Brown & Brown Negligently Procures Policy 13 19. Defendant Brown & Brown Insurance Services of California, Inc., acted as Plaintiff’s 14 insurance agent or broker in procuring the Policy from the Insurer. Start communicated to Brown & 15 Brown the details of its business, including that it operated a large-scale cannabis nursery that grows 16 mother plants producing clones, and teens. Start relied on Brown & Brown to secure an insurance 17 policy that would cover the full value of Start’s business property. 18 20. However, when Start made its claim on the Policy, National Fire claimed that Start 19 was underinsured, i.e., the Policy coverage limits were insufficient to cover the full extent of Start’s 20 losses. Start had relied on Brown & Brown to secure the proper amount of coverage, but Brown & 21 Brown, according to National Fire, failed to secure such coverage. As a result, Start suffered 22 significant uninsured losses that exceeded the amounts of coverage available under the Policy. 23 Additionally, even though Brown & Brown knew that Start was a legal medical marijuana business, 24 Brown & Brown, according to National Fire, obtained a policy that contains a marijuana 25 endorsement that limits the coverage which Brown & Brown was hired to procure. 26 FIRST CAUSE OF ACTION – BREACH OF CONTRACT 27 (By Plaintiff against Defendants National Fire & Marine and DOES 1 through 50) 28 21. Plaintiff realleges and incorporates herein by reference each and every allegation as 7 COMPLAINT 1 though fully incorporated herein. 2 22. As set forth above Start entered a written contract of insurance (with implied 3 provisions) with National Fire. 4 23. National Fire had fiduciary duties under the Policy, the law, and insurance industry 5 custom and practice to, among other things, pay Start for the losses it suffered arising out of damage 6 to its commercial property, business personal property, and loss of business income. National Fire 7 likewise was obligated to conduct a thorough investigation of all bases that might support Start’s 8 claim for coverage, yet failed to do so. 9 24. National Fire breached its fiduciary duties under the Policy by engaging in dilatory 10 tactics and failing to pay Start for the damage to its commercial property, business personal property 11 and loss of business income, including by: asserting grounds to avoid or limit coverage that it knew 12 were not supported by, and are contrary to, the terms of the Policy, the law, industry standards and 13 practices, the parties’ course of dealings, and the facts; failing to conduct an honest evaluation of 14 Start’s claims and asserting grounds to avoid coverage based on its corrupt investigation; failing to 15 fully inquire into possible bases that might support coverage for Start; and giving greater 16 consideration to its own interests than it gave to Start’s interests as National Fire’s insured. 17 25. Start has performed all covenants and conditions required under the Policy unless 18 otherwise excused by National Fire. 19 26. As a proximate cause of National Fire’s breach of contract, Start has suffered, and 20 continues to suffer, damages in an amount according to proof, but which exceeds the jurisdictional 21 limits of this Court. 22 SECOND CAUSE OF ACTION – BREACH OF THE IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING 23 (By Plaintiff against Defendants National Fire & Marine and DOES 1 through 50) 24 27. Plaintiff realleges and incorporates herein by reference each and every allegation as 25 though fully incorporated herein. 26 28. During its processing of Start’s claim, National Fire, acting via and through its agents, 27 committed the acts described above, including but not limited to: (1) employing purportedly 28 8 COMPLAINT 1 “independent” adjusters with clear bias and limited expertise or knowledge of medical cannabis 2 businesses; (2) ignoring crucial toxicity reports; (3) employing unqualified so-called “experts” with a 3 clear bias against Start’s business; (4) withholding, “drip-feeding” and exhausting available coverage 4 amounts for futile remediation work; (5) bombarding Start with various meritless queries and 5 requests for documentation; and (6) ultimately largely denying Start’s business interruption claim for 6 the purpose of violating the rights and benefits to which Start is entitled under the Policy and without 7 considering Start’s interests and rights under the Policy. 8 29. As a direct and proximate result of National Fire’s unreasonable acts, Start has been 9 damaged in an amount in excess of the Court’s jurisdictional limits. 10 30. National Fire’s acts are inconsistent with Start’s reasonable expectations, and are 11 contrary to established insurance claims practices and legal requirements, and constitute bad faith. 12 31. Pursuant to the holding in Brandt v. Superior Court (1985) 37 Cal. 3d 813, Start is 13 entitled to recover all attorneys’ fees that it reasonably incurred, and is incurring, in its efforts to 14 obtain the benefits of the coverage that National Fire wrongfully withheld, and is withholding, in bad 15 faith, plus interest. The total amount of these attorneys’ fees is currently unknown but will be 16 asserted according to proof. 17 32. National Fire’s conduct is despicable and was conducted with a conscious disregard 18 of Start’s rights, constituting oppression, fraud, and/or malice. National Fire engaged in a series of 19 acts designed to wrongfully deny the benefits due under the Policy. Specifically, National Fire, in 20 acting as alleged above and in possession of information, facts, and law to the contrary, consciously 21 disregarded Start’s rights, and forced Start to incur substantial financial loss, without sufficient 22 assistance from National Fire, thereby inflicting substantial damages to Start. National Fire ignored 23 Start’s interests and concerns, with the intent to injure and act fraudulently, within the meaning of 24 Civil Code, section 3294. Start is therefore entitled to recover punitive damages in an amount 25 sufficient to punish, make an example of, and to deter similar conduct. 26 THIRD CAUSE OF ACTION – PROFESSIONAL NEGLIGENCE 27 (By Plaintiff against Defendants Brown & Brown Insurance Services of California, Inc. 28 and DOES 25 through 35) 9 COMPLAINT 1 33. Plaintiff realleges and incorporates herein by reference each and every allegation as 2 though fully incorporated herein. 3 34. Defendant Brown & Brown acted as Plaintiff’s insurance agent in procuring the 4 Policy from the Insurer. Start communicated to Brown & Brown the details of its enterprise, 5 including that it operated a large-scale medical cannabis nursery that grows mother plants which 6 produce clones and teens, and relied on Brown & Brown to determine the proper insurance coverage 7 amounts for the policy secured through National Fire, and to secure such amounts of insurance 8 coverage as part of its agency or brokerage activities. 9 35. Through the claims process, Start was told by National Fire that it was underinsured, 10 meaning that Brown & Brown had failed to secure the proper amount of coverage. National Fire 11 also referenced as part of its partial denial a marijuana endorsement which it claimed limited the 12 coverage for which Brown & Brown was hired to procure. As a result, Start suffered losses which 13 allegedly were not covered by the Policy Brown & Brown was hired to procure. 14 36. Brown & Brown owed Start a duty to use reasonable care, diligence, and judgment in 15 procuring insurance on behalf of Start. Brown & Brown knew of the specific needs of Start’s 16 business, knew the particular type and extent of coverage, and Start reasonably relied on Brown & 17 Brown to properly secure insurance for Start’s business. As a proximate cause of Brown & Brown’s 18 conduct, Plaintiff suffered significant economic loss and damages, in an amount according to proof, 19 but which exceeds the jurisdictional limits of this Court. 20 21 PRAYER FOR RELIEF 22 WHEREFORE, Start prays for judgment against as follows: 23 First Cause of Action 24 (Breach of Contract against National Fire) 25 1. For compensatory, general, consequential, and incidental damages, in an amount 26 according to proof; 27 2. For pre-judgment and post-judgment interest at the legal rate; 28 3. For costs and expenses of suit; 10 COMPLAINT 1 4. For such other further relief as the Court may deem just and proper. 2 Second Cause of Action 3 (Breach of Implied Covenant of Good Faith and Fair Dealing against National Fire) 4 1. For compensatory, general, consequential, and incidental damages, in an amount 5 according to proof; 6 2. For pre-judgment and post-judgment interest at the legal rate; 7 3. For costs and expenses of suit, including attorney’s fees per Brandt v. Superior Court 8 (1985) 37 Cal.3d 813; 9 4. For exemplary/punitive damages pursuant to Civil Code § 3294, in an amount 10 appropriate to punish Defendant NATIONAL FIRE & MARINE INSURANCE 11 COMPANY and others from engaging in similar misconduct; and 12 5. For such other further relief as the Court may deem just and proper. 13 Third Cause of Action 14 (Professional Negligence against Brown & Brown) 15 1. For compensatory, general, consequential, and incidental damages, in an amount 16 according to proof; 17 2. For pre-judgment and post-judgment interest at the legal rate; 18 3. For costs and expenses of suit; 19 4. For such other further relief as the Court may deem just and proper. 20 21 Dated: March 9, 2023 CAPPELLO & NOËL LLP 22 By: /s/ Leila J. Noël 23 G. Barry Cappello Leila J. Noël 24 David L. Cousineau 25 G. Michael Brelje Richard Lloyd 26 Attorneys for Plaintiff START, INC. 27 28 11 COMPLAINT 1 DEMAND FOR TRIAL BY JURY 2 Plaintiff demands a trial by jury of all issues so triable in this action. 3 4 Dated: March 9, 2023 CAPPELLO & NOËL LLP 5 By: /s/ Leila J. Noël 6 A. Barry Cappello Leila J. Noël 7 David L. Cousineau 8 G. Michael Brelje Richard Lloyd 9 Attorneys for Plaintiff START, INC. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12 COMPLAINT EXHIBIT A Pursuant to CRC 2.259 this document has been electronically filed by the Superior Court of California, County of Santa Barbara, on 4/16/2021 1 A. Barry Cappello (CSB No. 037835) abc@cappellonoel.com FILED 2 Leila J. Noël (CSB No. 114307) SUPERIOR COURT of CALIFORNIA lnoel@cappellonoel.com COUNTY of SANTA BARBARA 3 CAPPELLO & NOËL LLP 04/20/2021 831 State Street Darrel E. Parker, Executive Officer 4 Santa Barbara, California 93101 Chavez, Terri BY________________________ Telephone: (805) 564-2444 Deputy Clerk 5 Facsimile: (805) 965-5950 6 Robert Nelson (SBN 132797) rnelson@lchb.com 7 Lexi J. Hazam (SBN 224457) 8 lhazam@lchb.com Lieff, Cabraser, Heimann & Bernstein, LLP 9 275 Battery Street, 29th Floor, San Francisco, CA 94111 10 Telephone: (415) 956-1000 Fax: (415) 956-1008 11 12 Attorneys for Plaintiff START, INC. 13 SUPERIOR COURT OF THE STATE OF CALIFORNIA 14 COUNTY OF SANTA BARBARA 15 START, INC., a California corporation, Case No.: 19CV02637 16 Plaintiff, [Consolidated with Case No. 19CV04891] 17 v. Judge: Hon. Donna D. Geck 18 NATIONAL FIRE & MARINE INSURANCE COMPANY et al. 19 STIPULATION AND [PROPOSED] ORDER TO DISMISS WITHOUT 20 PREJUDICE DEFENDANTS NATIONAL Defendants. FIRE & MARINE INSURANCE 21 COMPANY; BROWN & BROWN INSURANCE SERVICES OF 22 CALIFORNIA, INC. AND ROYAL & SUN ALLIANCE PLC, AND DISMISS 23 WITH PREJUDICE DEFENDANT BRENT BUHRMAN 24 Complaint Filed: May 20, 2019 25 SAC Filed: November 22, 2019 Trial Date: Not Set 26 27 28 STIPULATION AND [PROPOSED] ORDER TO DISMISS WITHOUT PREJUDICE DEFENDANTS NATIONAL FIRE & MARINE INSURANCE, BROWN & BROWN INSURANCE SERVICES OF CALIFORNIA, INC., ROYAL & SUN ALLIANCE PLC, AND DISMISS WITH PREJUDICE BRENT BUHRMAN 1 This Stipulation is entered into by and among Plaintiff Start, Inc. (“Plaintiff”) and 2 Defendants National Fire & Marine Insurance Company; Brown & Brown Insurance Services of 3 California, Inc.; Royal & Sun Alliance PLC, and Brent Buhrman (“Defendants,” and collectively 4 with Plaintiff, the “Parties”), by and through their undersigned counsel, with reference to the 5 following: 6 1. WHEREAS, Plaintiff filed a complaint for damages on May 20, 2019 in Start, Inc. vs. 7 National Fire & Marine Insurance et al., Case No. 19CV02637 (the “National Fire Action”); 8 2. WHEREAS, Plaintiff filed a complaint for damages on September 12, 2019 in Start, 9 Inc. vs. Lonmar Global Risks Limited et al., Case No. 19CV04891 (the “Lonmar Action”); 10 2. WHEREAS, the Lonmar Action was consolidated with the National Fire Action for 11 pretrial and trial purposes, by order dated January 22, 2021. 12 6. WHEREAS, Plaintiff is currently pursuing an action against Southern California 13 Edison Company and Edison International for damages arising out of the Thomas Fire and 14 subsequent mudslides, titled CA Union Cooperative et al. vs. Southern California Edison Company 15 et al., currently pending in the Superior Court of Los Angeles County as Case No. 20STCV44868, 16 and consolidated into the Southern California Fire Cases coordination proceedings, JCCP No. 4965 17 (the “SCE Action.”) 18 7. WHEREAS, resolution of the SCE Action may result in a more efficient resolution of 19 the National Fire Action and the Lonmar Action, and the Parties have entered into tolling agreements 20 addressing the claims asserted by Plaintiff against the Defendants in those actions. The tolling 21 agreements are incorporated by reference and are attached hereto as Exhibit A. 22 NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED: 23 1. Defendant Brent Buhrman be dismissed with prejudice, with each party to bear their 24 own fees and costs. 25 2. The remaining claims in the National Fire Action and the Lonmar Action be 26 dismissed without prejudice, with each party to bear their own fees and costs. 27 // 28 2 STIPULATION AND [PROPOSED] ORDER TO DISMISS WITHOUT PREJUDICE DEFENDANTS NATIONAL FIRE & MARINE INSURANCE, BROWN & BROWN INSURANCE SERVICES OF CALIFORNIA, INC., ROYAL & SUN ALLIANCE PLC, AND DISMISS WITH PREJUDICE BRENT BUHRMAN 1 DATED: April 16, 2021 CAPPELLO & NOËL LLP 2 3 By: ___ /s/ Leila J. Noël___ Leila J. Noël 4 Attorneys for Start, Inc. 5 6 DATED: April 16, 2021 FORAN GLENNON 7 8 /s/ Dianne J. Meconis By: ____ _________________________ Dianne J. Meconis 9 Attorneys for National Fire & Marine Insurance 10 DATED: April 16, 2021 DAVIS WRIGHT TREMAINE LLP 11 12 /s/ James Moon By: ______________________________ James Moon 13 Attorneys for Brown & Brown Insurance Services of California, Inc. 14 DATED: April 16, 2021 CLYDE & CO US LLP 15 16 /s/ Conte Cicala By: ______________________________ 17 Conte Cicala 18 Attorneys for Royal & Sun Alliance PLC and Brent Buhrman 19 20 21 22 23 24 25 26 27 28 3 STIPULATION AND [PROPOSED] ORDER TO DISMISS WITHOUT PREJUDICE DEFENDANTS NATIONAL FIRE & MARINE INSURANCE, BROWN & BROWN INSURANCE SERVICES OF CALIFORNIA, INC., ROYAL & SUN ALLIANCE PLC, AND DISMISS WITH PREJUDICE BRENT BUHRMAN EXHIBIT A ——Owner 4/13/2021 TOLLING AGREEMENT This agreement is made by and between Start, Inc., a California corporation, and Brown & Brown Insurance Services of California, Inc. (collectively, the “Parties”), and is made in reference to the following facts: WHEREAS, Start, Inc. alleges it owns and/or had insurable interests in real property located at 1628 Cravens Lane, Carpinteria, Santa Barbara County-South County, California, 93013 (the “Subject Property”). WHEREAS, Start, Inc. alleges Brown & Brown Insurance Services of California, Inc. (“Brown & Brown”) acted as Start, Inc’s insurance broker in procuring an insurance policy from National Fire & Marine Insurance Company (“National Fire”) with an effective date of June 9, 2017 to June 9, 2018, with policy number 12PRM039109-01, which provided coverage for commercial property, business personal property, and business income (the “Policy”). WHEREAS, Start, Inc. alleges starting on December 4, 2017 and over a period of approximately five weeks, the Thomas Fire burned hundreds of thousands of acres in Santa Barbara County, California, causing damage to the Subject Property. WHEREAS, Start, Inc. alleges in January 2018, a torrential wind and rainstorm caused additional damage and/or exacerbated the prior damage to the Subject Property, and caused mudslides in the Montecito area, approximately four miles from the Subject Property. WHEREAS, a dispute subsequently arose between Start, Inc. and National Fire regarding the extent of coverage provided by the Policy; the conduct of National Fire’s employees, and/or agents in connection with the coverage dispute, and the conduct of Brown & Brown and its employees and/or agents in connection with procuring the Policy. WHEREAS, Start, Inc. subsequently filed a complaint for damages on May 20, 2019 in the Superior Court of California, County of Santa Barbara – South County, titled Start, Inc. vs. National Fire & Marine Insurance Company et al., Case No. 19CV02637 (the “National Fire Action”). WHEREAS, Start, Inc. filed its operative Second Amended Complaint on November 22, 2019. WHEREAS Brown & Brown filed its Answer to Start, Inc’s Second Amended Complaint on December 27, 2019. WHEREAS, Start, Inc. and related entities filed a complaint for damages on November 23, 2020 against Southern California Edison Company and Edison International in the Superior Court of California, County of Los Angeles, titled CA Union Cooperative, Inc. et al. vs. Southern California Edison Company, et al. (the “SCE Action”). WHEREAS, the SCE Action was subsequently consolidated into the pending Southern California Fire Cases coordination proceedings, JCCP No. 4965. WHEREAS Start, Inc. believes that resolution of the SCE Action may result in a more efficient resolution of the dispute between the Parties, including the pending National Fire Action, and desire to enter into an agreement to dismiss the National Fire Action without prejudice and toll any applicable statutes of limitation pending the outcome of the SCE Action. NOW THEREFORE, in consideration of the mutual terms, covenants, conditions and promises contained herein, the Parties hereto agree as follows. 1. Start, Inc. agrees to dismiss its claims against Brown & Brown in the pending National Fire Action without prejudice, with each Party to bear their own costs and fees. To facilitate the dismissal, Brown & Brown agrees to sign the attached stipulation, which counsel for Start, Inc. will file within five (5) days of receipt of the fully executed Tolling Agreement and Stipulation. 2. The statutes of limitations applicable to Start, Inc.’s claims against Brown & Brown shall be tolled and suspended as of the date of the last signature on this Tolling Agreement and shall be tolled and suspended until this agreement is no longer in effect (the “Tolling Period”). This Agreement is not intended to revive and shall not revive any claims that are time barred as of the date this Tolling Agreement is executed. This Agreement is entered into by all of the parties hereto. This Tolling Agreement applies to any defense, legal or equitable, based upon the lapse of time, including but not limited to the statute of limitations, laches, estoppel, waiver, timely action or notice. 3. This Tolling Agreement may be terminated by either Party by providing thirty (30) days advance written notice of the intent to terminate to all other Parties (the “Termination Notice”). Upon termination of the Tolling Agreement by such written notice, the Termination Period shall end at midnight, thirty (30) days after the Termination Notice is received by the other Party. 4. This Agreement shall not be construed as an admission of any fact or actual or potential liability on the part of any Party. This Agreement may not be offered as evidence of an admission of any liability or fact in any court proceedings. 5. Each of the Parties represents and warrants that it has the authority to execute this Agreement on behalf of itself and its employees and clients. 6. This Agreement shall inure only to the benefit of the Parties hereto, and not to any other persons, organizations, or other entities. The Parties agree that this Agreement shall not benefit any third parties. 2 7. This Agreement may be executed in any number of counterparts with the same effects as if the Parties had signed the same document. All counterparts shall be construed together and shall constitute one Agreement. 8. The provisions of this Agreement comprise all of the terms, conditions, agreements and representations of the Parties respecting the tolling of Start Inc’s claims against Brown & Brown. This Agreement may not be altered or amended, and no provision hereof may be waived, except by written agreement executed by the Parties, or their representative if notice of counsel is given, to be bound. The Parties hereby agree that terms of this Agreement have not been changed, modified, or expanded by any oral agreements or representations entered into or made prior to or at the execution of this Agreement. 9. Start, Inc. and Brown & Brown expressly reserve all rights which they may have in law or equity, except as set forth in this Tolling Agreement, to contest or defend any claim or cause of action that may be asserted or initiated against Start, Inc. or Brown & Brown in any suit or action. 10. Any notices to be provided in accordance with this Tolling Agreement may be delivered by personal delivery, mailed by certified mail, return receipt requested, or electronic means to: a. Start, Inc.: Leila J. Noël lnoel@cappellonoel.com Cappello & Noël LLP 831 State Street Santa Barbara, CA 93101 Patrick F. Lang patricklang63@gmail.com Start, Inc. 21355 Pacific Coast Highway, Ste. 201-1 Malibu, CA 90265 b. Brown & Brown: Joseph E. Addiego III joeaddiego@dwt.com Davis Wright Tremaine LLP 505 Montgomery Street, Suite 800 San Francisco, CA 94111-6533 James H. Moon jamesmoon@dwt.com Davis Wright Tremaine LLP 865 South Figueroa Street, Suite 2400 Los Angeles, CA 90017 3 11. This Tolling Agreement is effective upon execution by all Parties, and without the requirement of filing, or endorsement by, any Court. [REMAINDER OF THIS PAGE DELIBERATELY LEFT BLANK] 4 START, INC. BY: ____________________________ —— Owner Patrick Lang, CEO 4/13/2021 Date: ________________________ BROWN & BROWN INSURANCE SERVICES OF CALIFORNIA, INC. BY: ____________________________ James H. Moon, Esq. April 13, 2021 Date: ________________________ 5 TOLLING AGREEMENT This agreement is made by and between Start, Inc., a California corporation and Royal & Sun Alliance PLC and Brent Buhrman (collectively, the “Parties”), and is made in reference to the following facts: WHEREAS, Start, Inc. owns and/or had insurable interests in personal property located at 1628 Cravens Lane, Carpinteria, Santa Barbara County-South County, California, 93013 (the “Subject Property”). WHEREAS Start, Inc. obtained a Marine Cargo insurance policy from Royal & Sun Alliance PLC (“RSA”) with an effective date of June 9, 2017 to June 9, 2018, with policy number B0799MC038880K, which it contends provided coverage for among other things Start, Inc.’s legal cannabis plants (the “Policy”). WHEREAS, Start, Inc. has claimed that starting on December 4, 2017 and over a period of approximately five weeks, the Thomas Fire burned hundreds of thousands of acres in Santa Barbara County, California, causing damage to the Subject Property. WHEREAS, Start, Inc. has claimed that in January 2018, a torrential wind and rainstorm caused additional damage and/or exacerbated the prior damage to the Subject Property, and caused mudslides in the Montecito area, approximately four miles from the Subject Property. WHEREAS, a dispute subsequently arose between Start, Inc. and RSA regarding the extent of coverage provided by the Policy, and the conduct of RSA’s employees, and/or agents in connection with the coverage dispute, including the conduct of RSA’s consultant, Brent Buhrman (“Buhrman”). WHEREAS, Start, Inc. subsequently filed a complaint for damages on September 12, 2019 in the Superior Court of California, County of Santa Barbara – South County, titled Start, Inc. vs. Lonmar Global Risks Limited et al., Case No. 19CV04891 (the “Lonmar Action”). WHEREAS, Start, Inc. filed its operative Second Amended Complaint on March 23, 2020. WHEREAS RSA and Buhrman have filed their respective Answers to Start, Inc’s Second Amended Complaint. WHEREAS, the Lonmar Action was consolidated on January 22, 2021 with the pending case of Start, Inc. v. National Fire & Marine Insurance Company et al., Case No. 19CV02637 for pre-trial and trial purposes. WHEREAS, Start, Inc. and related entities filed a complaint for damages on November 23, 2020 against Southern California Edison Company and Edison International in the Superior Court of California, County of Los Angeles, titled CA Union Cooperative, Inc. et al. vs. Southern California Edison Company, et al. (the “SCE Action”). WHEREAS, the SCE Action was subsequently consolidated into the pending Southern California Fire Cases coordination proceedings, JCCP No. 4965. WHEREAS the Parties agree that resolution of the SCE Action may result in a more efficient resolution of the dispute between the Parties, including the pending Lonmar Action, and desire to enter into an agreement to dismiss the Lonmar Action without prejudice and toll any applicable statutes of limitation pending the outcome of the SCE Action. NOW THEREFORE, in consideration of the mutual terms, covenants, conditions and promises contained herein, the Parties hereto agree as follows. 1. All of the foregoing recitals are incorporated herein by reference. 2. Start, Inc. agrees to dismiss its claims against RSA in the pending Lonmar Action without prejudice and against Buhrman with prejudice, with each Party to bear their own costs and fees. To facilitate the dismissal, RSA and Buhrman agree to sign the attached stipulation, which counsel for Start, Inc. will file within five (5) days of receipt of the fully executed Tolling Agreement and Stipulation. 3. The statutes of limitations applicable to Start, Inc.’s claims against RSA shall be tolled and suspended as of the date of this Tolling Agreement and shall be tolled and suspended until this agreement is no longer in effect (the “Tolling Period”). This Agreement is not intended to revive and shall not revive any claims that are time barred as of the date this Tolling Agreement is executed. This Agreement is entered into by all of the Parties hereto. This Tolling Agreement applies to any defense, legal or equitable, based upon the lapse of time, including but not limited to the statute of limitations, laches, estoppel, waiver, timely action or notice. 4. This Tolling Agreement may be terminated by either Party by providing thirty (30) days advance written notice of the intent to terminate to all other Parties (the “Termination Notice”). Upon t