Preview
1 NEWMEYER & DILLION LLP
ERIC J. ROLLINS, CBN 265417
2 Eric.Rollins@ndlf.com
HARLYE S. CARLTON, CBN 261641
3 Harlye.Carlton@ndlf.com
895 Dove Street, Second Floor
4 Newport Beach, California 92660
(949) 854-7000; (949) 854-7099 (Fax)
5
Attorneys for Plaintiffs
6
SUPERIOR COURT OF THE STATE OF CALIFORNIA
7
COUNTY OF ALAMEDA, HAYWARD HALL OF JUSTICE
8
CITY VENTURES HOMEBUILDING, LLC, Case No.
9 a Delaware limited liability company; and
CITY VENTURES CONSTRUCTION, ASSIGNED FOR ALL PURPOSES TO:
10 INC., a Delaware corporation;
DEPARTMENT
11 Plaintiffs.
v. COMPLAINT FOR BREACH OF
NEWMEYER
DILLION C..
12 WRITTEN CONTRACT
AUS DECKING, INC., a California
13 corporation; CALCATCAR Action Filed: April 22, 2024
ENTERPRISES, INC. dba 3 C'S Trial Date: TBD
14 ORNAMENTAL IRON WORKS, a
California corporation; DIRT MOVERS,
15 INC., a California corporation; DVPRO
PAINTING INCORPORATED, a California
16 corporation; GONSALVES & SANTUCCI,
INC. dba CONCO, a California
17 corporation; HERITAGE ONE
CARPENTRY, INC., a merged out
18 California corporation; HERITAGE ONE
DOOR AND CARPENTRY, LLC, a
19 California limited liability company;
HERMSMEYER PAINTING COMPANY,
20 INCORPORATED, a California
corporation; HOMESITE SERVICES,
21 INC., a California corporation; MARINA
LANDSCAPE, INC., a California
22 Corporation; MARINA MAINTENANCE
GROUP, INC., a California corporation;
23 MAVERICK PAINTING, INC., a California
corporation; MCH ELECTRIC, INC., a
24 California corporation; PSLQ, INC. dba
GREENBEE, a California corporation;
25 WESTERN SUN ENTERPRISES, INC.
dba THREE D ELECTRIC, ALARM &
26 SOLAR, a California corporation; and
DOES 1 through 200, Inclusive,
27
Defendants.
28
2470.137 / 15687800.1
COMPLAINT
1 Plaintiffs City Ventures Homebuilding, LLC, a Delaware limited liability company;
2 and City Ventures Construction, Inc., a Delaware corporation (collectively, “City
3 Ventures”) hereby bring the following action against the above-named defendants and
4 Does 1 through 200, inclusive, with knowledge as to itself and otherwise on information
5 on belief:
6 PARTIES
7 1. City Ventures Homebuilding, LLC, is, and at all times mentioned herein
8 was, a Delaware limited liability company in good standing doing business in the State of
9 California, including in the City of Oakland, County of Alameda, and State of California.
10 2. City Ventures Construction, Inc., is, and at all times mentioned herein was,
11 a Delaware corporation in good standing doing business in the State of California,
NEWMEYER
DILLION C..
12 including in the City of Oakland, County of Alameda, and State of California.
13 3. City Ventures is informed and believes, and based thereon alleges, that
14 defendant AUS Decking, Inc., a California corporation, at all times mentioned herein was,
15 doing business in the state of California.
16 4. City Ventures is informed and believes, and based thereon alleges, that
17 defendant Calcatcar Enterprises, Inc., a California corporation also doing business as 3
18 C's Ornamental Iron Works is, at all times mentioned herein was, doing business in the
19 state of California.
20 5. City Ventures is informed and believes, and based thereon alleges, that
21 defendant Dirt Movers, Inc., a California corporation is, and at all times mentioned herein
22 was, doing business in the state of California.
23 6. City Ventures is informed and believes, and based thereon alleges, that
24 defendant DVPRO Painting Incorporated, a California corporation is, and at all times
25 mentioned herein was, doing business in the state of California.
26 7. City Ventures is informed and believes, and based thereon alleges, that
27 defendant Gonsalves & Santucci, Inc., a California corporation also doing business as
28 Conco is, and at all times mentioned herein was, doing business in the state of California.
2470.137 / 15687800.1 -2-
COMPLAINT
1 8. City Ventures is informed and believes, and based thereon alleges, that
2 defendant Heritage One Carpentry, Inc., a merged out California corporation is, and at all
3 times mentioned herein was, doing business in the state of California.
4 9. City Ventures is informed and believes, and based theron alleges, that
5 defendant Heritage One Door and Carpentry, LLC, a California limited liability company
6 is, and at all times mentioned herein was, doing business in the state of California.
7 10. City Ventures is informed and believes, and based thereon alleges, that
8 defendant Hermsmeyer Painting Company, Incorporated, a California corporation is, and
9 at all times mentioned herein was, doing business in the state of California.
10 11. City Ventures is informed and believes, and based thereon alleges, that
11 defendant Homesite Services, Inc., a California corporation is, and at all times mentioned
NEWMEYER
DILLION C..
12 herein was, doing business in the state of California.
13 12. City Ventures is informed and believes, and based thereon alleges, that
14 defendant Marina Landscape, Inc., a California corporation is, and at all times mentioned
15 herein was, doing business in the state of California.
16 13. City Ventures is informed and believes, and based thereon alleges, that
17 defendant Marina Maintenance Group, Inc., a California corporation is, and at all times
18 mentioned herein was, doing business in the state of California.
19 14. City Ventures is informed and believes, and based thereon alleges, that
20 defendant Maverick Painting, Inc., a California corporation is, and at all times mentioned
21 herein was, doing business in the state of California.
22 15. City Ventures is informed and believes, and based thereon alleges, that
23 defendant MCH Electric, Inc., a California corporation is, and at all times mentioned
24 herein was, doing business in the state of California.
25 16. City Ventures is informed and believes, and based thereon alleges, that
26 defendant PSLQ, Inc., a California corporation also doing business as Greenbee is, and
27 at all times mentioned herein was, doing business in the state of California.
28 / / /
2470.137 / 15687800.1 -3-
COMPLAINT
1 17. City Ventures is informed and believes, and based thereon alleges, that
2 defendant Western Sun Enterprises, Inc., a California corporation also doing business as
3 Three D Electric, Alarm & Solar is, and at all times mentioned herein was, doing business
4 in the state of California.
5 18. City Ventures is unaware of the true names and capacities of defendants
6 sued herein as Does 1 through 200, inclusive, whether individual, corporate, associate, or
7 otherwise and therefore, sues those defendants by such fictitious names. City Ventures
8 is informed and believes, and based thereon alleges, that each fictitiously named
9 defendant designated herein is in some manner responsible for the events and
10 happenings herein referred to, either contractually or tortiously, and caused the damage
11 to City Ventures as herein alleged. City Ventures will amend this complaint to allege the
NEWMEYER
DILLION C..
12 true names and capacities of Does 1 through 200, inclusive, when City Ventures
13 ascertains them.
14 19. Defendants identified in paragraphs 3 through 16 and Does 1 through 200,
15 inclusive, are collectively referred to hereinafter as “Defendants”.
16 20. City Ventures is informed and believes, and based thereon alleges, that at
17 all relevant times herein mentioned, Defendants were acting as the agents, servants,
18 employees, successors, predecessors, associates, partners, joint ventures, alter egos,
19 conspirators, representatives and/or in some other capacity, however termed and/or
20 described, of each other and were acting within the course and scope of each of the
21 other Defendants and with full knowledge and consent, such that Defendants are jointly
22 and severally liable to City Ventures.
23 JURISDICTION AND VENUE
24 21. Jurisdiction and venue are proper in this Court for a variety of reasons,
25 including, but not limited to:
26 a. The amount in controversy in this action is in excess of the jurisdictional
27 minimum of this Court;
28 b. The agreements between City Ventures and Defendants specify the
2470.137 / 15687800.1 -4-
COMPLAINT
1 location of the project from which these disputes arise is located in
2 Alameda County, California;
3 c. City Ventures regularly conducts business in Alameda County,
4 California; and
5 d. Defendants regularly conduct business in Alameda County, California.
6 PRELIMINARY ALLEGATIONS
7 22. This action arises out of Defendants’ failure to satisfy their contractual
8 obligations to City Ventures with respect to self-insured retentions owed to City Ventures
9 as a result of construction defect claims arising out of Defendants’ scopes of services and
10 work on a project commonly known as Station House, located in or around Pullman Way
11 and 14th Street, in Oakland, County of Alameda, State of California (the “Project”).
NEWMEYER
DILLION C..
12 23. Pursuant to agreements between City Ventures and Defendants,
13 Defendants enrolled in City Ventures’ wrap up insurance program (“Wrap Up”) for the
14 Project. Pursuant to the agreements, Defendants were obligated to pay to City Ventures
15 a self-insured retention should an occurrence arise for which Defendants’ scope of
16 services or work was implicated at the Project. An occurrence arose related to the
17 Project that culminated in a lawsuit seeking over $25,000,000, among other things.
18 Despite this, all Defendants failed to pay City Ventures their self-insured retentions owed
19 under the agreements.
20 A. City Ventures and Defendants Enter into Agreements.
21 24. On various dates, City Ventures entered into agreements with Defendants
22 whereby Defendants agreed to perform construction services and work at the Project in
23 exchange for payment by City Ventures. The agreements entered into between City
24 Ventures and Defendants are attached and incorporated herein by reference as Exhibits
25 A through Q.
26 25. Pursuant to the agreements, Defendants enrolled into the Wrap Up.
27 26. Per the agreements, in the event of an occurrence that arises out of the
28 scope of services or work of Defendants and that requires City Ventures to satisfy a
2470.137 / 15687800.1 -5-
COMPLAINT
1 portion of its self-insured retention under the Wrap Up, Defendants must pay City
2 Ventures a self-insured retention for each occurrence. Each agreement provides the
3 following or substantially similar language:
4 • Self-Insured Retention: Under the terms of the OCIP
Policy, the only parties who are responsible for payment of the
5 Policy's self-insured retention are Owner and Contractor.
However, in the event of an occurrence which requires
6 Contractor to satisfy its self-insured retention in whole or in
part and which arises out of work by or for Subcontractor (or
7 its sub-subcontractors), Subcontractor shall owe Contractor a
reasonably allocated share of the self-insured retention (the
8 "contractual share payment"). Contractor shall determine the
contractual share payment after careful consideration of the
9 nature of the allegations, potential liability exposure,
Subcontractor's Work and the number of parties with
10 allegations related to their scope of work. The maximum
amount of the contractual share payment shall be $25,000, for
11 each such occurrence for all Enrolled Parties except for
Subcontractors whose total contract value for all Work at the
NEWMEYER
DILLION C..
12 Project is less than $10,000, for which the contractual share
payment shall be $5,000.
13
(Exhibits A through Q.)
14
B. An Occurrence Arose That Triggered Self Insured Retentions Under
15
the Wrap Up.
16
27. After entering into the agreements, an occurrence arose involving the
17
Project that implicated Defendants’ scopes of services and work, thereby triggering
18
Defendants’ self-insured retention obligations under the agreements. The occurrence
19
was located at the Project and involved both a notice of claim pursuant to the Right to
20
Repair Act and lawsuit seeking over $25,000,000 entitled Stationhouse Community
21
Corporation v. City Ventures Homebuilding, Inc. et al., Case no. RG21094856, Alameda
22
County Superior Court, among other things (collectively, the “Occurrence” or the
23
"Underlying Action").
24
28. City Ventures defended and ultimately resolved all allegations alleged in the
25
Occurrence. In so doing, City Ventures satisfied its larger self-insured retention of
26
$450,000 applicable to the Project.
27
29. The Occurrence arises out of work performed by each of Defendants.
28
2470.137 / 15687800.1 -6-
COMPLAINT
1 30. Per the agreements, Defendants owe City Ventures their respective smaller
2 individual self-insured retentions as a result of the Occurrence and the fact that City
3 Ventures had to satisfy its larger self-insured retention of $450,000 applicable to the
4 Project.
5 C. Defendants Failed to Pay City Ventures Their Self-Insured Retentions
6 Owed for the Occurrence Arising Out of Defendants’ Respective
7 Scopes of Services and Work.
8 31. Per the agreements, City Ventures is, and at all times mentioned herein
9 was, entitled to recover self-insured retentions from Defendants as a result of the
10 Occurrence. Accordingly, City Ventures is, and at all times mentioned herein, was
11 entitled to self-insured retentions totaling over $375,000 in aggregate amongst all
NEWMEYER
DILLION C..
12 Defendants for the occurrence identified above pursuant to the agreements with
13 Defendants.
14 32. In an effort to collect the self-insured retentions, City Ventures made written
15 demands to Defendants to pay the self-insured retentions in accordance with the
16 agreements. Despite City Ventures' numerous demands, Defendants refused to pay the
17 self-insured retentions to City Ventures in accordance with the agreements.
18 33. City Ventures is informed and believes, and based thereon alleges, that
19 Defendants do not intend to pay City Ventures the self-insured retentions in accordance
20 with the agreements.
21 34. Since City Ventures' last demands, Defendants have not paid City Ventures
22 the self-insured retentions in accordance with the agreements.
23 D. City Ventures Reserves the Right to Stay the Action and Compel
24 Arbitration.
25 35. The agreements between City Ventures and Defendants contain an
26 arbitration provision that may apply to this dispute. City Ventures reserves the right to
27 stay the action and enforce the arbitration provisions.
28 / / /
2470.137 / 15687800.1 -7-
COMPLAINT
1 FIRST CAUSE OF ACTION
2 BREACH OF WRITTEN CONTRACT
3 (Against Defendants)
4 36. City Ventures reincorporates and alleges herein by reference each and
5 every allegation contained in the proceeding paragraphs, as if set forth in full herein.
6 37. On various dates, City Ventures entered into written agreements with
7 Defendants whereby Defendants agreed to perform construction services and work at the
8 Project in exchange for payment by City Ventures.
9 38. Pursuant to the agreements, Defendants enrolled in the Wrap Up.
10 39. Pursuant to the agreements, Defendants were obligated to pay to City
11 Ventures their respective self-insured retentions for the Project should an occurrence
NEWMEYER
DILLION C..
12 arise for which Defendants’ scope of services or work was implicated.
13 40. After entering into the agreements, an occurrence arose involving the
14 Project that implicated Defendants’ scopes of services and work, thereby triggering
15 Defendants’ self-insured retention obligations. The occurrence was located at the Project
16 and resulted in the Underlying Action.
17 41. In accordance with the agreements, City Ventures defended and ultimately
18 resolved all allegations alleged in the Occurrence. In so doing, City Ventures satisfied its
19 larger self-insured retention of $450,000 applicable to the Project.
20 42. At all times mentioned herein, Defendants were obligated to, in accordance
21 with the agreements, pay City Ventures their smaller self-insured retentions as a result of
22 the Occurrence.
23 43. Since entering into the agreements, City Ventures performed all conditions,
24 covenants, and promises required to be performed by City Ventures pursuant to the
25 agreements, except those conditions, covenants, and promises which it was prevented or
26 excused from performing.
27 44. In accordance with the agreements and within the past four years, City
28 Ventures provided written notice of the Occurrence and written demands for the self-
2470.137 / 15687800.1 -8-
COMPLAINT
1 insured retentions owed by Defendants.
2 45. Despite City Ventures' compliance with its obligations under the
3 agreements and City Ventures' numerous demands, Defendants breached the
4 agreements by failing to pay City Ventures the self-insured retentions owed under the
5 agreements.
6 46. As a direct and proximate result of the foregoing, City Ventures has been
7 damaged in an amount to be proven at trial, but not less than $375,000 plus pre-
8 judgment interest, attorneys’ fees, and costs according to proof. Defendants’ breach of
9 the agreements was a substantial factor in causing City Ventures’ aforementioned
10 damage.
11 WHEREFORE, City Ventures prays for judgment against Defendants, and each of
12 them, as follows:
13 PRAYER FOR RELIEF
14 ON ALL CAUSES OF ACTION
15 (Against Defendants)
16 47. For damages in excess of $375,000;
17 48. For pre-judgment interest at the maximum rate allowed by law, plus all
18 further interest available at the maximum legal rate;
19 49. For compensatory damages;
20 50. For reasonable attorney fees;
21 51. For costs according to proof; and
22 52. For such other and further relief as deemed just and proper.
23
24 Dated: April 22, 2024 NEWMEYER & DILLION LLP
25
By:
26
Eric J. Rollins
27 Harlye S. Carlton
Attorneys for Plaintiffs
28
2470.137 / 15687800.1 -9-
COMPLAINT
EXHIBIT A
DocuSign Envelope ID: 9A734523-A0A9-41D4-834F-2BEC73616849
SUBCONTRACT AGREEMENT
This Subcontract Agreement (hereinafter the "Agreement") is made this 4th day of May, 2016, by and
between AUS DECKING INC. (hereinafter "Subcontractor"'), California Contractor's License
Number#845255 whose address is PO BOX 698, West Sacramento, CA 95691; Telephone (916)
373 - 5320 and CITY VENTURES CONSTRUCTION INC. (hereinafter "Contractor"). California
Contractor's License Number # 1003565 whose address is 3121 Michelson Drive, Suite 150, Irvine,
CA 92612; Telephone; (949) 258-7555.
On or about May 4, 2016, Contractor entered into a general contract (hereinafter the "Prime Contract'')
with City Ventures Homebuilding, Inc. (hereinafter "Owner") to act as the general contractor for the
construction of a project (hereinafter the "Project"): commonly known as OAKLAND 1, located in
OAKLAND, County of State of ALAMEDA California. Subcontractor certifies that it bolds a State
Contractors License from the State of California, if required, and a copy of such license shall be
submitted as current and active.
ARTICLE 1: CONTRACT PRICE, SPECIFICATION OF LABOR AND MATERIALS AND
CONTRACT DOCUMENTS
I.I Contract Price and Guaranty: Contractor shall pay Subcontractor for the work performed by
Subcontractor under this Agreement based on the lump sum and/or agreed unit measures of pricing and
labor rates, as set forth in the "Subcontract Payment Schedule - Schedule "'l" attached to and forming
a part of Exhibit C to this Agreement. As used in this Agreement, the total amount payable to the
Subcontractor is that amount set forth in the Subcontract Payment Schedule, and is referred to herein
as the "Contract Price."
1.2 Specifications of Labor and Materials and Contract Documents; Subcontractor agrees to
furnish all labor, materials, tools, equipment, supplies, transportation, delivery, rigging, hoisting,
staging, scaffolding, temporary construction, task lighting, supervision, coordination, communication,
shop and field engineering, design work and other facilities necessary to efficiently perform and timely
complete the work covered by this Agreement (the "Work"), in strict accordance with the terms of this
Agreement, consisting of each of the following:
i. The Agreement
ii. Exhibit A -Terms of Payment, including Lien Releases and W-9 Form
iii. Exhibit B - Scope of Work and List of Plans and Specifications and any
subsequent revisions thereto (collectively the "Plans and Specifications")
iv. Exhibit C - Schedule of Unit Prices, Including Subcontract Payment Schedule
v. Exhibit D - OCIP Addendum
which are incorporated herein by this reference and referred to collectively as the "Contract
Documents", and in accordance with the HIGHEST TRADE PRACTICES, and in a manner
satisfactory to Contractor. Subcontractor acknowledges that the Plans and Specifications provided
may be preliminary, or subject to change. Subcontractor agrees to maintain current versions of all
working drawings pertaining to its Work, and to implement changes thereto as the Work progresses in
order to achieve proper and timely execution of the Work. Subcontractor agrees to furnish materials
strictly complying with the requirements, Plans and Specifications furnished to it by Contractor, and to
promptly replace any material rejected by Contractor with material satisfactory to Contractor, upon
notification by Contractor that any material supplied by Subcontractor is unsatisfactory in any way.
Where, in the Contract Documents, reference is to the work, specifications or obligations therein
pertain to Subcontractor's trade, craft or type of work, such work. specifications or obligations shall be
interpreted to apply to Subcontractor. The Work required to be performed by Subcontractor is not
confined to any particular portion or section of the Plans and Specifications, but may be found
throughout the Contract Documents. The approval by Contractor of shop drawings, manufacturer's
literature, or any other written descriptions furnished by Subcontractor into the work, shall not relieve
Subcontractor from furnishing materials conforming to the aforementioned requirements.
1.3 Manufacturer's Specifications: In addition to the Plans and Specifications, Subcontractor shall
adhere to any and all manufacturer's specifications for installation of materials. lfthere is any conflict
between Contractor's Plans and Specifications and any manufacturer's specifications, it is the
responsibility of Subcontractor to bring such discrepancy to Contractor's attention in writing.
Subcontractor's further work without first resolving such conflict shall be at its own risk. Any
deviation from the manufacturer's specifications, the Plans and Specifications, and the Contract
Page 1 of37
AUS Decking- Windsor I -Deck Coating Ver. 0112014
DocuSign Envelope ID: 9A734523-A0A9-41D4-834F-2BEC73616849
Documents may, at Contractor's discretion, result in Subcontractor replacing all materials to comply
with such specifications and requirements at no cost to Contractor.
1.4 Availability of Materials Labor and Equipment: Subcontractor, by acceptance of this
Agreement, shall guarantee the timely availability of all materials, labor, and equipment necessary to
complete the Work according to the established construction schedule of Contractor. Upon written
request from Contractor, Subcontractor shall verify the source of any materials supplied to the Project
by Subcontractor pursuant to this Agreement. Such verification shall include, without limitation, all
bills of lading, invoices, freight tickets, sale agreements, purchase orders and other documentation that
will verify who manufactured the materials, where such materials originated and were manufactured,
end what component materials or parts were included in the manufacture of the materials.
Subcontractor shall pay promptly all fees, freight, storage, taxes, union welfare or benefit payments,
charges, damages and penalties, or other incidental expenses associated with the Work, and
Subcontractor acknowledges that all such taxes and payment have been included in the Contract Price.
Subcontractor shall provide copies of all permits, licenses, and similar permissions obtained, and fees
paid, to Contractor. Subcontractor warrants and represents that all possible contingencies to
completely perform the Work have been included in the bid submitted by Subcontractor to Contractor.
1.5 Discrepancies Between Contract Documents: In the event of any conflict or discrepancy
between various Contract Documents, the terms and provisions of the Agreement shall control over the
remaining Contract Documents. In the event of any discrepancy between various Contract Documents,
the most recent Plans and Specifications' dimensions shall take precedence over measurement by
scale. A large scale drawing shall take precedence over the smaller. In any case of discrepancy,
whether actual or suspected, between the figures, or the figures and the scale of the plans and
specifications, the matter shall be submitted to the Contractor in writing within two (2) business days
of discovery. If the Subcontractor proceeds with the Work based on any such error without approved
instructions from the Contractor, the Subcontractor shall make good and correct, without cost to
Contractor, any resulting damage, defect or non-conforming or deficient Work. The foregoing
provisions include specification typographical errors and drawing notational errors where the intent is
unclear. Should the Plans vary from the Specifications, then the Specifications shall govern. Should
there be any discrepancy between the Plans and the Specifications, or both, and any governmental laws
or regulations, then those which are more stringent and/or maximum shall govern.
1.6 Work During Disputes: In the event of any dispute between Contractor and Subcontractor
concerning the Work, Subcontractor will not stop the Work, but will prosecute the disputed and non-
disputed Work diligently to completion. The dispute concerning the Work shall be submitted for
resolution in accordance with Section_ of this Agreement.
DS
ARTICLE 2: LJ CHECK !F APPLICABLE.~ ESIGN BUILD SUBCONTRACTORS .
N/A ~ ~a..cJror ·,"":a 1fflN\olW'_') ~"\ de.'='ctl'\ ;sd\l\ab ~
. , 2.1 DESIGN SERVICES. Subcontractor s all be responsible for procuring and furnishing all
design and engineering services for DECK COATING relating to the Project, and shall be responsible
for coordinating, monitoring, managing and finalizing all other design services associated therewith, as
set forth in Exhibit "B" (collectively "Design Services"), by end through qualified and experienced
design professionals duly licensed and registered in the State of California and by any other required
local or professional authorities and approved by Contractor in advance. At the request of Contractor,
Subcontractor shall supply copies of all necessary licenses and registrations to Contractor.
2.1.1 Contractor and/or Owner may retain the services of consultants and design
professionals for the Project. Any drawings, specifications, work or services or any other information
or documents provided by Contractor and/or Owner, directly or through consultants, to Subcontractor
in connection with the Agreement or the Work are provided solely for the convenience of
Subcontractor only, and without any representation, warranty or guarantee of accuracy, adequacy,
correctness or completeness by Contractor or Owner, and Owner and Contractor hereby expressly
disclaim, on their behalf and on behalf of any of the consultants, all such warranties, guarantees and
representations. Except to the extent the information, documents and materials supplied by Contractor
and/or Owner or their consultants contain inaccurate information that was not known to Subcontractor
to be inaccurate (and such inaccuracy would not have been reasonably discovered by Subcontractor
based on its skills, experience and knowledge or their diligent review of such information, documents
and materials and the terms and scope of the Contract Documents), Subcontractor assumes the risk of
such conditions and shall fully complete the Work within the Contract Price and by the Project
completion date established by Contractor with no adjustments.
Page2ol37
AUS Decking- Windsor I -Thlck Coating v.... 01/2014
DocuSign Envelope ID: 9A734523-A0A9-41D4-834F-2BEC73616849
2.1.2 Subcontractor shall cooperate with Contractor's and Owner's consultants, and
coordinate, monitor, and manage the services of its consultants and take all necessary steps to timely
furnish the Design Services, including the completed and finalized plans and specifications in
accordance with the Project design and Project Schedule for incorporation by the Architect into the
overall plans and specifications for the Project. In furtherance of and without in any way limiting the
foregoing, Subcontractor shall diligently review all work, services, drawings and specifications
furnished by Contractor's and Owner's consultants for hazards, inconsistencies. discrepancies.
inaccuracies, errors, incompleteness or lack of detail which should be apparent to Subcontractor given
Subcontractor's skills, experience and training or discernible by Subcontractor upon a reasonable and
diligent review of such work, services, drawings, and specifications and shall promptly notify
Contractor in writing of any hazards, inconsistencies, discrepancies, inaccuracies, errors,
incompleteness or lack of detail of which Subcontractor becomes aware and, prior to proceeding with
any of the Work affected thereby, to obtain written instructions from Contractor on how to proceed.
Subcontractor also shall promptly notify Contractor and any of Contractor's and/or Owner's
consultants in writing of any changes or revisions to the Design Services, including any drawings or
specifications, which might affect the Work, services, drawings and specifications of Contractor,
Owner and/or their consultants.
2.1.3 Subcontractor's Design Services include the complete code compliant design for its
·'Work." Subcontractor warrants that the design and construction will be of the quality, efficiency and
economically sound for a project of this type, quality and magnitude. Subcontractor shall be
responsible for the full coordination of all design documents with other design consultants and/or
subcontractors including but not limited to; architectural, structural, electrical, fire protection, life
safety, enclosure and all other such system designs to ensure that a fully coordinated set of
construction documents.
2.4.4 Subcontractor shall (a) submit its Design Services, including the applicable plans and
specifications to Contractor for Contractor's prior approval; (b) as necessary and/or required by
applicable governmental agency, sign and affix with its registration stamp or seal that portion of the
Project plans and specifications created by Subcontractor, including any approved amendments,
modifications and/or supplements thereto, (c) from time to time (as appropriate to meet the Project
design and Project Schedule), submit for approval and obtain all necessary approvals for the Design
Services (including any amendments, modifications and/or supplements thereto approved by
Contractor) from the appropriate governmental authorities or other parties having approval rights
relating to the Project; (d) at all times perform the Work and act with the normal and customary degree
of care and skill used by members of the professions practicing under similar conditions at the same
time and locality and on projects of similar size, scope and complexity; and (e) document all changes
in the construction documents made during the course of the Work, and provision of a complete set of
As-Built Drawings at the conclusion of the Work. Subcontractor agrees that all changes in the
construction documents will be depicted in "clouds'' shown on the Subcontractor's drawings, and
copies of any construction documents showing such changes shall be promptly provided to Contractor
for Owner's written approval.
2.4.5 All documents, drawings, plans, drafts and final reports, masters, work papers,
memoranda, graphics and other materials, both hard copy and electronic versions, including duplicates
thereof, generated or compiled pursuant to this Agreement and any change orders hereto are
instruments of professional service (Instruments). Upon full payment for Subcontractor's Work
hereunder, excluding that Work in dispute, the Instruments as an assemblage describing this specific
unique Project shall become the exclusive property of the Owner, but only for the use of Owner for
this specific Project. Subcontractor's office standard details, drawings and specifications shall remain
the exclusive property of the Subcontractor. Notwithstanding the foregoing, the Owner may choose, at
its option, to leave the original or a copy of any such Instruments in the possession of Subcontract and
Subcontractor may dispose of Owner unclaimed Instruments ten (10) years after the date of this
Agreement, upon 30 days' notice to Owner.
2.4.6 In the event that that Agreement is tenninated for any reason, Subcontractor agrees to
fully cooperate with Contractor and Owner with the transition to a new design professional, including
without limitation, promptly delivering to Owner all Instruments, and if requested by Owner, providing
written notice to applicable governmental agency(ies) that Subcontractor is no longer a design
professional of record and that such other design professional designated by Owner shall be the new
design professional of record. Subcontractor recognizes that time is of the essence and that any delay
to in complying with these obligations shall cause Contractor and Owner significant damages.
SUBCONTRACTOR AND CONTRACTOR AGREE THAT IT WOULD BE EXTREMELY
DIFFICULT, IF NOT IMPOSSIBLE TO FIX THE DAMAGES SUFFERED BY CONTRACTOR
Page3 of37
AUS Decking - Windsor I -Deck Coating Ver. 0112014
DocuSign Envelope ID: 9A734523-A0A9-41D4-834F-2BEC73616849
AND OWNER IN THE EVENT 'THAT SUBCONTRACTOR DOES NOT COMPLY WITH THE
OBLIGATIONS SET FORTH IN THIS PARAGRAPH. CONSEQUENTLY, SHOULD
SUBCONTRACTOR FAIL TO DELIVER THE INSTRUMENTS TO OWNER OR PROVIDE
WRITTEN NOTICE TO THE APPLICABLE GOVERNMENTAL AGENCY(IES) WITHIN TWO
(2) DAYS OF WRITTEN NOTICE FROM OWNER, SUBCONTRACTOR SHALL PAY TO
CONTRACTOR AS LIQUIDATED DAMAGES FOR SUCH BREACH AND NOT PENALTIES
THE SUM OF FIVE THOUSAND DOLLARS ($5,000.00) PER CALENDAR DAY AFTER THE
SECOND DAY FOLLOWING OWNER'S REQUEST FOR INSTRUMENTS OR WRITTEN
NOTICE TO THE GOVERNMENTAL AGENCY(IES).
ARTICLE 3: TIME FOR COMMENCEMENT AND COMPLETION OF WORK
3.1 Start Work Orders: Contractor will, from time to time, issue written commitments ("Start
Work Orders") identifying specific portions of which the Work to be perfurmed. Contractor shall have
no obligation to issue any Start Work Orders during the term of this Agreement. THIS AGREEMENT
IS NOT AN AUTHORIZATION TO PROCEED WITH WORK, AND SHALL NOT BECOME
EFFECTIVE WITH RESPECT TO THE WORK OF SUBCONTRACTOR UNLESS AND UNTIL
CONTRACTOR ISSUES START WORK ORDER(S) TO SUBCONTRACTOR AUTHORIZING
THE SPECIFIC WORK OF SUBCONTRACTOR TO BE PERFORMED, AND THE AGREEMENT
SHALL BE BINDING ONLY AS TO THE WORK AUTHORIZED BY CONTRACTOR.
SUBCONTRACTOR SHALL PERFORM NO WORK NOR RECEIVE ANY COMPENSATION
FOR SUCH WORK WITHOUT RECEIVING CONTRACTOR'S WRITTEN START WORK
ORDER FOR SUCH WORK. Subcontractor agrees to commence such work as may be authorized by
Contractor by means of Contractor's Project Schedule as directed by Contractor's field superintendent.
Contractor's Start Work Order shall be effective immediately upon issuance by Contractor without
need for further acceptance thereof by Subcontractor. If the Work authorized by a Start Work Order is
not commenced on the date specified in the Project Schedule, Contractor may, in its sole discretion,
declare such Start Work Order null and void. Subcontractor shall a) keep itself thoroughly infonned as
to the progress of the Project; b) commence the Work within seventy-two (72) hours after receiving a
Start Work Order or as otherwise specified in the Project Schedule received from Contractor; c)
diligently pursue the Work as rapidly as the conditions of the Project will permit; d) efficiently
coordinate its Work with that of Contractor and other subcontractors so as not to interfere with, disrupt,
or delay the progress required to conform to the Project completion date established by Contractor; and
e) complete the Work in accordance with the time schedule established therefor by Contractor.
Subcontractor is authorized (and required) to commence only the specific work identified in the Start
Work Order by Contractor and in the construction sequence and shall receive payment under this
Agreement only for such work specifically requested by Contractor in writing.
3.2
Preview
1 NEWMEYER & DILLION LLP ERIC J. ROLLINS, CBN 265417 2 Eric.Rollins@ndlf.com HARLYE S. CARLTON, CBN 261641 3 Harlye.Carlton@ndlf.com 895 Dove Street, Second Floor 4 Newport Beach, California 92660 (949) 854-7000; (949) 854-7099 (Fax) 5 Attorneys for Plaintiffs 6 SUPERIOR COURT OF THE STATE OF CALIFORNIA 7 COUNTY OF ALAMEDA, HAYWARD HALL OF JUSTICE 8 CITY VENTURES HOMEBUILDING, LLC, Case No. 9 a Delaware limited liability company; and CITY VENTURES CONSTRUCTION, ASSIGNED FOR ALL PURPOSES TO: 10 INC., a Delaware corporation; DEPARTMENT 11 Plaintiffs. v. COMPLAINT FOR BREACH OF NEWMEYER DILLION C.. 12 WRITTEN CONTRACT AUS DECKING, INC., a California 13 corporation; CALCATCAR Action Filed: April 22, 2024 ENTERPRISES, INC. dba 3 C'S Trial Date: TBD 14 ORNAMENTAL IRON WORKS, a California corporation; DIRT MOVERS, 15 INC., a California corporation; DVPRO PAINTING INCORPORATED, a California 16 corporation; GONSALVES & SANTUCCI, INC. dba CONCO, a California 17 corporation; HERITAGE ONE CARPENTRY, INC., a merged out 18 California corporation; HERITAGE ONE DOOR AND CARPENTRY, LLC, a 19 California limited liability company; HERMSMEYER PAINTING COMPANY, 20 INCORPORATED, a California corporation; HOMESITE SERVICES, 21 INC., a California corporation; MARINA LANDSCAPE, INC., a California 22 Corporation; MARINA MAINTENANCE GROUP, INC., a California corporation; 23 MAVERICK PAINTING, INC., a California corporation; MCH ELECTRIC, INC., a 24 California corporation; PSLQ, INC. dba GREENBEE, a California corporation; 25 WESTERN SUN ENTERPRISES, INC. dba THREE D ELECTRIC, ALARM & 26 SOLAR, a California corporation; and DOES 1 through 200, Inclusive, 27 Defendants. 28 2470.137 / 15687800.1 COMPLAINT 1 Plaintiffs City Ventures Homebuilding, LLC, a Delaware limited liability company; 2 and City Ventures Construction, Inc., a Delaware corporation (collectively, “City 3 Ventures”) hereby bring the following action against the above-named defendants and 4 Does 1 through 200, inclusive, with knowledge as to itself and otherwise on information 5 on belief: 6 PARTIES 7 1. City Ventures Homebuilding, LLC, is, and at all times mentioned herein 8 was, a Delaware limited liability company in good standing doing business in the State of 9 California, including in the City of Oakland, County of Alameda, and State of California. 10 2. City Ventures Construction, Inc., is, and at all times mentioned herein was, 11 a Delaware corporation in good standing doing business in the State of California, NEWMEYER DILLION C.. 12 including in the City of Oakland, County of Alameda, and State of California. 13 3. City Ventures is informed and believes, and based thereon alleges, that 14 defendant AUS Decking, Inc., a California corporation, at all times mentioned herein was, 15 doing business in the state of California. 16 4. City Ventures is informed and believes, and based thereon alleges, that 17 defendant Calcatcar Enterprises, Inc., a California corporation also doing business as 3 18 C's Ornamental Iron Works is, at all times mentioned herein was, doing business in the 19 state of California. 20 5. City Ventures is informed and believes, and based thereon alleges, that 21 defendant Dirt Movers, Inc., a California corporation is, and at all times mentioned herein 22 was, doing business in the state of California. 23 6. City Ventures is informed and believes, and based thereon alleges, that 24 defendant DVPRO Painting Incorporated, a California corporation is, and at all times 25 mentioned herein was, doing business in the state of California. 26 7. City Ventures is informed and believes, and based thereon alleges, that 27 defendant Gonsalves & Santucci, Inc., a California corporation also doing business as 28 Conco is, and at all times mentioned herein was, doing business in the state of California. 2470.137 / 15687800.1 -2- COMPLAINT 1 8. City Ventures is informed and believes, and based thereon alleges, that 2 defendant Heritage One Carpentry, Inc., a merged out California corporation is, and at all 3 times mentioned herein was, doing business in the state of California. 4 9. City Ventures is informed and believes, and based theron alleges, that 5 defendant Heritage One Door and Carpentry, LLC, a California limited liability company 6 is, and at all times mentioned herein was, doing business in the state of California. 7 10. City Ventures is informed and believes, and based thereon alleges, that 8 defendant Hermsmeyer Painting Company, Incorporated, a California corporation is, and 9 at all times mentioned herein was, doing business in the state of California. 10 11. City Ventures is informed and believes, and based thereon alleges, that 11 defendant Homesite Services, Inc., a California corporation is, and at all times mentioned NEWMEYER DILLION C.. 12 herein was, doing business in the state of California. 13 12. City Ventures is informed and believes, and based thereon alleges, that 14 defendant Marina Landscape, Inc., a California corporation is, and at all times mentioned 15 herein was, doing business in the state of California. 16 13. City Ventures is informed and believes, and based thereon alleges, that 17 defendant Marina Maintenance Group, Inc., a California corporation is, and at all times 18 mentioned herein was, doing business in the state of California. 19 14. City Ventures is informed and believes, and based thereon alleges, that 20 defendant Maverick Painting, Inc., a California corporation is, and at all times mentioned 21 herein was, doing business in the state of California. 22 15. City Ventures is informed and believes, and based thereon alleges, that 23 defendant MCH Electric, Inc., a California corporation is, and at all times mentioned 24 herein was, doing business in the state of California. 25 16. City Ventures is informed and believes, and based thereon alleges, that 26 defendant PSLQ, Inc., a California corporation also doing business as Greenbee is, and 27 at all times mentioned herein was, doing business in the state of California. 28 / / / 2470.137 / 15687800.1 -3- COMPLAINT 1 17. City Ventures is informed and believes, and based thereon alleges, that 2 defendant Western Sun Enterprises, Inc., a California corporation also doing business as 3 Three D Electric, Alarm & Solar is, and at all times mentioned herein was, doing business 4 in the state of California. 5 18. City Ventures is unaware of the true names and capacities of defendants 6 sued herein as Does 1 through 200, inclusive, whether individual, corporate, associate, or 7 otherwise and therefore, sues those defendants by such fictitious names. City Ventures 8 is informed and believes, and based thereon alleges, that each fictitiously named 9 defendant designated herein is in some manner responsible for the events and 10 happenings herein referred to, either contractually or tortiously, and caused the damage 11 to City Ventures as herein alleged. City Ventures will amend this complaint to allege the NEWMEYER DILLION C.. 12 true names and capacities of Does 1 through 200, inclusive, when City Ventures 13 ascertains them. 14 19. Defendants identified in paragraphs 3 through 16 and Does 1 through 200, 15 inclusive, are collectively referred to hereinafter as “Defendants”. 16 20. City Ventures is informed and believes, and based thereon alleges, that at 17 all relevant times herein mentioned, Defendants were acting as the agents, servants, 18 employees, successors, predecessors, associates, partners, joint ventures, alter egos, 19 conspirators, representatives and/or in some other capacity, however termed and/or 20 described, of each other and were acting within the course and scope of each of the 21 other Defendants and with full knowledge and consent, such that Defendants are jointly 22 and severally liable to City Ventures. 23 JURISDICTION AND VENUE 24 21. Jurisdiction and venue are proper in this Court for a variety of reasons, 25 including, but not limited to: 26 a. The amount in controversy in this action is in excess of the jurisdictional 27 minimum of this Court; 28 b. The agreements between City Ventures and Defendants specify the 2470.137 / 15687800.1 -4- COMPLAINT 1 location of the project from which these disputes arise is located in 2 Alameda County, California; 3 c. City Ventures regularly conducts business in Alameda County, 4 California; and 5 d. Defendants regularly conduct business in Alameda County, California. 6 PRELIMINARY ALLEGATIONS 7 22. This action arises out of Defendants’ failure to satisfy their contractual 8 obligations to City Ventures with respect to self-insured retentions owed to City Ventures 9 as a result of construction defect claims arising out of Defendants’ scopes of services and 10 work on a project commonly known as Station House, located in or around Pullman Way 11 and 14th Street, in Oakland, County of Alameda, State of California (the “Project”). NEWMEYER DILLION C.. 12 23. Pursuant to agreements between City Ventures and Defendants, 13 Defendants enrolled in City Ventures’ wrap up insurance program (“Wrap Up”) for the 14 Project. Pursuant to the agreements, Defendants were obligated to pay to City Ventures 15 a self-insured retention should an occurrence arise for which Defendants’ scope of 16 services or work was implicated at the Project. An occurrence arose related to the 17 Project that culminated in a lawsuit seeking over $25,000,000, among other things. 18 Despite this, all Defendants failed to pay City Ventures their self-insured retentions owed 19 under the agreements. 20 A. City Ventures and Defendants Enter into Agreements. 21 24. On various dates, City Ventures entered into agreements with Defendants 22 whereby Defendants agreed to perform construction services and work at the Project in 23 exchange for payment by City Ventures. The agreements entered into between City 24 Ventures and Defendants are attached and incorporated herein by reference as Exhibits 25 A through Q. 26 25. Pursuant to the agreements, Defendants enrolled into the Wrap Up. 27 26. Per the agreements, in the event of an occurrence that arises out of the 28 scope of services or work of Defendants and that requires City Ventures to satisfy a 2470.137 / 15687800.1 -5- COMPLAINT 1 portion of its self-insured retention under the Wrap Up, Defendants must pay City 2 Ventures a self-insured retention for each occurrence. Each agreement provides the 3 following or substantially similar language: 4 • Self-Insured Retention: Under the terms of the OCIP Policy, the only parties who are responsible for payment of the 5 Policy's self-insured retention are Owner and Contractor. However, in the event of an occurrence which requires 6 Contractor to satisfy its self-insured retention in whole or in part and which arises out of work by or for Subcontractor (or 7 its sub-subcontractors), Subcontractor shall owe Contractor a reasonably allocated share of the self-insured retention (the 8 "contractual share payment"). Contractor shall determine the contractual share payment after careful consideration of the 9 nature of the allegations, potential liability exposure, Subcontractor's Work and the number of parties with 10 allegations related to their scope of work. The maximum amount of the contractual share payment shall be $25,000, for 11 each such occurrence for all Enrolled Parties except for Subcontractors whose total contract value for all Work at the NEWMEYER DILLION C.. 12 Project is less than $10,000, for which the contractual share payment shall be $5,000. 13 (Exhibits A through Q.) 14 B. An Occurrence Arose That Triggered Self Insured Retentions Under 15 the Wrap Up. 16 27. After entering into the agreements, an occurrence arose involving the 17 Project that implicated Defendants’ scopes of services and work, thereby triggering 18 Defendants’ self-insured retention obligations under the agreements. The occurrence 19 was located at the Project and involved both a notice of claim pursuant to the Right to 20 Repair Act and lawsuit seeking over $25,000,000 entitled Stationhouse Community 21 Corporation v. City Ventures Homebuilding, Inc. et al., Case no. RG21094856, Alameda 22 County Superior Court, among other things (collectively, the “Occurrence” or the 23 "Underlying Action"). 24 28. City Ventures defended and ultimately resolved all allegations alleged in the 25 Occurrence. In so doing, City Ventures satisfied its larger self-insured retention of 26 $450,000 applicable to the Project. 27 29. The Occurrence arises out of work performed by each of Defendants. 28 2470.137 / 15687800.1 -6- COMPLAINT 1 30. Per the agreements, Defendants owe City Ventures their respective smaller 2 individual self-insured retentions as a result of the Occurrence and the fact that City 3 Ventures had to satisfy its larger self-insured retention of $450,000 applicable to the 4 Project. 5 C. Defendants Failed to Pay City Ventures Their Self-Insured Retentions 6 Owed for the Occurrence Arising Out of Defendants’ Respective 7 Scopes of Services and Work. 8 31. Per the agreements, City Ventures is, and at all times mentioned herein 9 was, entitled to recover self-insured retentions from Defendants as a result of the 10 Occurrence. Accordingly, City Ventures is, and at all times mentioned herein, was 11 entitled to self-insured retentions totaling over $375,000 in aggregate amongst all NEWMEYER DILLION C.. 12 Defendants for the occurrence identified above pursuant to the agreements with 13 Defendants. 14 32. In an effort to collect the self-insured retentions, City Ventures made written 15 demands to Defendants to pay the self-insured retentions in accordance with the 16 agreements. Despite City Ventures' numerous demands, Defendants refused to pay the 17 self-insured retentions to City Ventures in accordance with the agreements. 18 33. City Ventures is informed and believes, and based thereon alleges, that 19 Defendants do not intend to pay City Ventures the self-insured retentions in accordance 20 with the agreements. 21 34. Since City Ventures' last demands, Defendants have not paid City Ventures 22 the self-insured retentions in accordance with the agreements. 23 D. City Ventures Reserves the Right to Stay the Action and Compel 24 Arbitration. 25 35. The agreements between City Ventures and Defendants contain an 26 arbitration provision that may apply to this dispute. City Ventures reserves the right to 27 stay the action and enforce the arbitration provisions. 28 / / / 2470.137 / 15687800.1 -7- COMPLAINT 1 FIRST CAUSE OF ACTION 2 BREACH OF WRITTEN CONTRACT 3 (Against Defendants) 4 36. City Ventures reincorporates and alleges herein by reference each and 5 every allegation contained in the proceeding paragraphs, as if set forth in full herein. 6 37. On various dates, City Ventures entered into written agreements with 7 Defendants whereby Defendants agreed to perform construction services and work at the 8 Project in exchange for payment by City Ventures. 9 38. Pursuant to the agreements, Defendants enrolled in the Wrap Up. 10 39. Pursuant to the agreements, Defendants were obligated to pay to City 11 Ventures their respective self-insured retentions for the Project should an occurrence NEWMEYER DILLION C.. 12 arise for which Defendants’ scope of services or work was implicated. 13 40. After entering into the agreements, an occurrence arose involving the 14 Project that implicated Defendants’ scopes of services and work, thereby triggering 15 Defendants’ self-insured retention obligations. The occurrence was located at the Project 16 and resulted in the Underlying Action. 17 41. In accordance with the agreements, City Ventures defended and ultimately 18 resolved all allegations alleged in the Occurrence. In so doing, City Ventures satisfied its 19 larger self-insured retention of $450,000 applicable to the Project. 20 42. At all times mentioned herein, Defendants were obligated to, in accordance 21 with the agreements, pay City Ventures their smaller self-insured retentions as a result of 22 the Occurrence. 23 43. Since entering into the agreements, City Ventures performed all conditions, 24 covenants, and promises required to be performed by City Ventures pursuant to the 25 agreements, except those conditions, covenants, and promises which it was prevented or 26 excused from performing. 27 44. In accordance with the agreements and within the past four years, City 28 Ventures provided written notice of the Occurrence and written demands for the self- 2470.137 / 15687800.1 -8- COMPLAINT 1 insured retentions owed by Defendants. 2 45. Despite City Ventures' compliance with its obligations under the 3 agreements and City Ventures' numerous demands, Defendants breached the 4 agreements by failing to pay City Ventures the self-insured retentions owed under the 5 agreements. 6 46. As a direct and proximate result of the foregoing, City Ventures has been 7 damaged in an amount to be proven at trial, but not less than $375,000 plus pre- 8 judgment interest, attorneys’ fees, and costs according to proof. Defendants’ breach of 9 the agreements was a substantial factor in causing City Ventures’ aforementioned 10 damage. 11 WHEREFORE, City Ventures prays for judgment against Defendants, and each of 12 them, as follows: 13 PRAYER FOR RELIEF 14 ON ALL CAUSES OF ACTION 15 (Against Defendants) 16 47. For damages in excess of $375,000; 17 48. For pre-judgment interest at the maximum rate allowed by law, plus all 18 further interest available at the maximum legal rate; 19 49. For compensatory damages; 20 50. For reasonable attorney fees; 21 51. For costs according to proof; and 22 52. For such other and further relief as deemed just and proper. 23 24 Dated: April 22, 2024 NEWMEYER & DILLION LLP 25 By: 26 Eric J. Rollins 27 Harlye S. Carlton Attorneys for Plaintiffs 28 2470.137 / 15687800.1 -9- COMPLAINT EXHIBIT A DocuSign Envelope ID: 9A734523-A0A9-41D4-834F-2BEC73616849 SUBCONTRACT AGREEMENT This Subcontract Agreement (hereinafter the "Agreement") is made this 4th day of May, 2016, by and between AUS DECKING INC. (hereinafter "Subcontractor"'), California Contractor's License Number#845255 whose address is PO BOX 698, West Sacramento, CA 95691; Telephone (916) 373 - 5320 and CITY VENTURES CONSTRUCTION INC. (hereinafter "Contractor"). California Contractor's License Number # 1003565 whose address is 3121 Michelson Drive, Suite 150, Irvine, CA 92612; Telephone; (949) 258-7555. On or about May 4, 2016, Contractor entered into a general contract (hereinafter the "Prime Contract'') with City Ventures Homebuilding, Inc. (hereinafter "Owner") to act as the general contractor for the construction of a project (hereinafter the "Project"): commonly known as OAKLAND 1, located in OAKLAND, County of State of ALAMEDA California. Subcontractor certifies that it bolds a State Contractors License from the State of California, if required, and a copy of such license shall be submitted as current and active. ARTICLE 1: CONTRACT PRICE, SPECIFICATION OF LABOR AND MATERIALS AND CONTRACT DOCUMENTS I.I Contract Price and Guaranty: Contractor shall pay Subcontractor for the work performed by Subcontractor under this Agreement based on the lump sum and/or agreed unit measures of pricing and labor rates, as set forth in the "Subcontract Payment Schedule - Schedule "'l" attached to and forming a part of Exhibit C to this Agreement. As used in this Agreement, the total amount payable to the Subcontractor is that amount set forth in the Subcontract Payment Schedule, and is referred to herein as the "Contract Price." 1.2 Specifications of Labor and Materials and Contract Documents; Subcontractor agrees to furnish all labor, materials, tools, equipment, supplies, transportation, delivery, rigging, hoisting, staging, scaffolding, temporary construction, task lighting, supervision, coordination, communication, shop and field engineering, design work and other facilities necessary to efficiently perform and timely complete the work covered by this Agreement (the "Work"), in strict accordance with the terms of this Agreement, consisting of each of the following: i. The Agreement ii. Exhibit A -Terms of Payment, including Lien Releases and W-9 Form iii. Exhibit B - Scope of Work and List of Plans and Specifications and any subsequent revisions thereto (collectively the "Plans and Specifications") iv. Exhibit C - Schedule of Unit Prices, Including Subcontract Payment Schedule v. Exhibit D - OCIP Addendum which are incorporated herein by this reference and referred to collectively as the "Contract Documents", and in accordance with the HIGHEST TRADE PRACTICES, and in a manner satisfactory to Contractor. Subcontractor acknowledges that the Plans and Specifications provided may be preliminary, or subject to change. Subcontractor agrees to maintain current versions of all working drawings pertaining to its Work, and to implement changes thereto as the Work progresses in order to achieve proper and timely execution of the Work. Subcontractor agrees to furnish materials strictly complying with the requirements, Plans and Specifications furnished to it by Contractor, and to promptly replace any material rejected by Contractor with material satisfactory to Contractor, upon notification by Contractor that any material supplied by Subcontractor is unsatisfactory in any way. Where, in the Contract Documents, reference is to the work, specifications or obligations therein pertain to Subcontractor's trade, craft or type of work, such work. specifications or obligations shall be interpreted to apply to Subcontractor. The Work required to be performed by Subcontractor is not confined to any particular portion or section of the Plans and Specifications, but may be found throughout the Contract Documents. The approval by Contractor of shop drawings, manufacturer's literature, or any other written descriptions furnished by Subcontractor into the work, shall not relieve Subcontractor from furnishing materials conforming to the aforementioned requirements. 1.3 Manufacturer's Specifications: In addition to the Plans and Specifications, Subcontractor shall adhere to any and all manufacturer's specifications for installation of materials. lfthere is any conflict between Contractor's Plans and Specifications and any manufacturer's specifications, it is the responsibility of Subcontractor to bring such discrepancy to Contractor's attention in writing. Subcontractor's further work without first resolving such conflict shall be at its own risk. Any deviation from the manufacturer's specifications, the Plans and Specifications, and the Contract Page 1 of37 AUS Decking- Windsor I -Deck Coating Ver. 0112014 DocuSign Envelope ID: 9A734523-A0A9-41D4-834F-2BEC73616849 Documents may, at Contractor's discretion, result in Subcontractor replacing all materials to comply with such specifications and requirements at no cost to Contractor. 1.4 Availability of Materials Labor and Equipment: Subcontractor, by acceptance of this Agreement, shall guarantee the timely availability of all materials, labor, and equipment necessary to complete the Work according to the established construction schedule of Contractor. Upon written request from Contractor, Subcontractor shall verify the source of any materials supplied to the Project by Subcontractor pursuant to this Agreement. Such verification shall include, without limitation, all bills of lading, invoices, freight tickets, sale agreements, purchase orders and other documentation that will verify who manufactured the materials, where such materials originated and were manufactured, end what component materials or parts were included in the manufacture of the materials. Subcontractor shall pay promptly all fees, freight, storage, taxes, union welfare or benefit payments, charges, damages and penalties, or other incidental expenses associated with the Work, and Subcontractor acknowledges that all such taxes and payment have been included in the Contract Price. Subcontractor shall provide copies of all permits, licenses, and similar permissions obtained, and fees paid, to Contractor. Subcontractor warrants and represents that all possible contingencies to completely perform the Work have been included in the bid submitted by Subcontractor to Contractor. 1.5 Discrepancies Between Contract Documents: In the event of any conflict or discrepancy between various Contract Documents, the terms and provisions of the Agreement shall control over the remaining Contract Documents. In the event of any discrepancy between various Contract Documents, the most recent Plans and Specifications' dimensions shall take precedence over measurement by scale. A large scale drawing shall take precedence over the smaller. In any case of discrepancy, whether actual or suspected, between the figures, or the figures and the scale of the plans and specifications, the matter shall be submitted to the Contractor in writing within two (2) business days of discovery. If the Subcontractor proceeds with the Work based on any such error without approved instructions from the Contractor, the Subcontractor shall make good and correct, without cost to Contractor, any resulting damage, defect or non-conforming or deficient Work. The foregoing provisions include specification typographical errors and drawing notational errors where the intent is unclear. Should the Plans vary from the Specifications, then the Specifications shall govern. Should there be any discrepancy between the Plans and the Specifications, or both, and any governmental laws or regulations, then those which are more stringent and/or maximum shall govern. 1.6 Work During Disputes: In the event of any dispute between Contractor and Subcontractor concerning the Work, Subcontractor will not stop the Work, but will prosecute the disputed and non- disputed Work diligently to completion. The dispute concerning the Work shall be submitted for resolution in accordance with Section_ of this Agreement. DS ARTICLE 2: LJ CHECK !F APPLICABLE.~ ESIGN BUILD SUBCONTRACTORS . N/A ~ ~a..cJror ·,"":a 1fflN\olW'_') ~"\ de.'='ctl'\ ;sd\l\ab ~ . , 2.1 DESIGN SERVICES. Subcontractor s all be responsible for procuring and furnishing all design and engineering services for DECK COATING relating to the Project, and shall be responsible for coordinating, monitoring, managing and finalizing all other design services associated therewith, as set forth in Exhibit "B" (collectively "Design Services"), by end through qualified and experienced design professionals duly licensed and registered in the State of California and by any other required local or professional authorities and approved by Contractor in advance. At the request of Contractor, Subcontractor shall supply copies of all necessary licenses and registrations to Contractor. 2.1.1 Contractor and/or Owner may retain the services of consultants and design professionals for the Project. Any drawings, specifications, work or services or any other information or documents provided by Contractor and/or Owner, directly or through consultants, to Subcontractor in connection with the Agreement or the Work are provided solely for the convenience of Subcontractor only, and without any representation, warranty or guarantee of accuracy, adequacy, correctness or completeness by Contractor or Owner, and Owner and Contractor hereby expressly disclaim, on their behalf and on behalf of any of the consultants, all such warranties, guarantees and representations. Except to the extent the information, documents and materials supplied by Contractor and/or Owner or their consultants contain inaccurate information that was not known to Subcontractor to be inaccurate (and such inaccuracy would not have been reasonably discovered by Subcontractor based on its skills, experience and knowledge or their diligent review of such information, documents and materials and the terms and scope of the Contract Documents), Subcontractor assumes the risk of such conditions and shall fully complete the Work within the Contract Price and by the Project completion date established by Contractor with no adjustments. Page2ol37 AUS Decking- Windsor I -Thlck Coating v.... 01/2014 DocuSign Envelope ID: 9A734523-A0A9-41D4-834F-2BEC73616849 2.1.2 Subcontractor shall cooperate with Contractor's and Owner's consultants, and coordinate, monitor, and manage the services of its consultants and take all necessary steps to timely furnish the Design Services, including the completed and finalized plans and specifications in accordance with the Project design and Project Schedule for incorporation by the Architect into the overall plans and specifications for the Project. In furtherance of and without in any way limiting the foregoing, Subcontractor shall diligently review all work, services, drawings and specifications furnished by Contractor's and Owner's consultants for hazards, inconsistencies. discrepancies. inaccuracies, errors, incompleteness or lack of detail which should be apparent to Subcontractor given Subcontractor's skills, experience and training or discernible by Subcontractor upon a reasonable and diligent review of such work, services, drawings, and specifications and shall promptly notify Contractor in writing of any hazards, inconsistencies, discrepancies, inaccuracies, errors, incompleteness or lack of detail of which Subcontractor becomes aware and, prior to proceeding with any of the Work affected thereby, to obtain written instructions from Contractor on how to proceed. Subcontractor also shall promptly notify Contractor and any of Contractor's and/or Owner's consultants in writing of any changes or revisions to the Design Services, including any drawings or specifications, which might affect the Work, services, drawings and specifications of Contractor, Owner and/or their consultants. 2.1.3 Subcontractor's Design Services include the complete code compliant design for its ·'Work." Subcontractor warrants that the design and construction will be of the quality, efficiency and economically sound for a project of this type, quality and magnitude. Subcontractor shall be responsible for the full coordination of all design documents with other design consultants and/or subcontractors including but not limited to; architectural, structural, electrical, fire protection, life safety, enclosure and all other such system designs to ensure that a fully coordinated set of construction documents. 2.4.4 Subcontractor shall (a) submit its Design Services, including the applicable plans and specifications to Contractor for Contractor's prior approval; (b) as necessary and/or required by applicable governmental agency, sign and affix with its registration stamp or seal that portion of the Project plans and specifications created by Subcontractor, including any approved amendments, modifications and/or supplements thereto, (c) from time to time (as appropriate to meet the Project design and Project Schedule), submit for approval and obtain all necessary approvals for the Design Services (including any amendments, modifications and/or supplements thereto approved by Contractor) from the appropriate governmental authorities or other parties having approval rights relating to the Project; (d) at all times perform the Work and act with the normal and customary degree of care and skill used by members of the professions practicing under similar conditions at the same time and locality and on projects of similar size, scope and complexity; and (e) document all changes in the construction documents made during the course of the Work, and provision of a complete set of As-Built Drawings at the conclusion of the Work. Subcontractor agrees that all changes in the construction documents will be depicted in "clouds'' shown on the Subcontractor's drawings, and copies of any construction documents showing such changes shall be promptly provided to Contractor for Owner's written approval. 2.4.5 All documents, drawings, plans, drafts and final reports, masters, work papers, memoranda, graphics and other materials, both hard copy and electronic versions, including duplicates thereof, generated or compiled pursuant to this Agreement and any change orders hereto are instruments of professional service (Instruments). Upon full payment for Subcontractor's Work hereunder, excluding that Work in dispute, the Instruments as an assemblage describing this specific unique Project shall become the exclusive property of the Owner, but only for the use of Owner for this specific Project. Subcontractor's office standard details, drawings and specifications shall remain the exclusive property of the Subcontractor. Notwithstanding the foregoing, the Owner may choose, at its option, to leave the original or a copy of any such Instruments in the possession of Subcontract and Subcontractor may dispose of Owner unclaimed Instruments ten (10) years after the date of this Agreement, upon 30 days' notice to Owner. 2.4.6 In the event that that Agreement is tenninated for any reason, Subcontractor agrees to fully cooperate with Contractor and Owner with the transition to a new design professional, including without limitation, promptly delivering to Owner all Instruments, and if requested by Owner, providing written notice to applicable governmental agency(ies) that Subcontractor is no longer a design professional of record and that such other design professional designated by Owner shall be the new design professional of record. Subcontractor recognizes that time is of the essence and that any delay to in complying with these obligations shall cause Contractor and Owner significant damages. SUBCONTRACTOR AND CONTRACTOR AGREE THAT IT WOULD BE EXTREMELY DIFFICULT, IF NOT IMPOSSIBLE TO FIX THE DAMAGES SUFFERED BY CONTRACTOR Page3 of37 AUS Decking - Windsor I -Deck Coating Ver. 0112014 DocuSign Envelope ID: 9A734523-A0A9-41D4-834F-2BEC73616849 AND OWNER IN THE EVENT 'THAT SUBCONTRACTOR DOES NOT COMPLY WITH THE OBLIGATIONS SET FORTH IN THIS PARAGRAPH. CONSEQUENTLY, SHOULD SUBCONTRACTOR FAIL TO DELIVER THE INSTRUMENTS TO OWNER OR PROVIDE WRITTEN NOTICE TO THE APPLICABLE GOVERNMENTAL AGENCY(IES) WITHIN TWO (2) DAYS OF WRITTEN NOTICE FROM OWNER, SUBCONTRACTOR SHALL PAY TO CONTRACTOR AS LIQUIDATED DAMAGES FOR SUCH BREACH AND NOT PENALTIES THE SUM OF FIVE THOUSAND DOLLARS ($5,000.00) PER CALENDAR DAY AFTER THE SECOND DAY FOLLOWING OWNER'S REQUEST FOR INSTRUMENTS OR WRITTEN NOTICE TO THE GOVERNMENTAL AGENCY(IES). ARTICLE 3: TIME FOR COMMENCEMENT AND COMPLETION OF WORK 3.1 Start Work Orders: Contractor will, from time to time, issue written commitments ("Start Work Orders") identifying specific portions of which the Work to be perfurmed. Contractor shall have no obligation to issue any Start Work Orders during the term of this Agreement. THIS AGREEMENT IS NOT AN AUTHORIZATION TO PROCEED WITH WORK, AND SHALL NOT BECOME EFFECTIVE WITH RESPECT TO THE WORK OF SUBCONTRACTOR UNLESS AND UNTIL CONTRACTOR ISSUES START WORK ORDER(S) TO SUBCONTRACTOR AUTHORIZING THE SPECIFIC WORK OF SUBCONTRACTOR TO BE PERFORMED, AND THE AGREEMENT SHALL BE BINDING ONLY AS TO THE WORK AUTHORIZED BY CONTRACTOR. SUBCONTRACTOR SHALL PERFORM NO WORK NOR RECEIVE ANY COMPENSATION FOR SUCH WORK WITHOUT RECEIVING CONTRACTOR'S WRITTEN START WORK ORDER FOR SUCH WORK. Subcontractor agrees to commence such work as may be authorized by Contractor by means of Contractor's Project Schedule as directed by Contractor's field superintendent. Contractor's Start Work Order shall be effective immediately upon issuance by Contractor without need for further acceptance thereof by Subcontractor. If the Work authorized by a Start Work Order is not commenced on the date specified in the Project Schedule, Contractor may, in its sole discretion, declare such Start Work Order null and void. Subcontractor shall a) keep itself thoroughly infonned as to the progress of the Project; b) commence the Work within seventy-two (72) hours after receiving a Start Work Order or as otherwise specified in the Project Schedule received from Contractor; c) diligently pursue the Work as rapidly as the conditions of the Project will permit; d) efficiently coordinate its Work with that of Contractor and other subcontractors so as not to interfere with, disrupt, or delay the progress required to conform to the Project completion date established by Contractor; and e) complete the Work in accordance with the time schedule established therefor by Contractor. Subcontractor is authorized (and required) to commence only the specific work identified in the Start Work Order by Contractor and in the construction sequence and shall receive payment under this Agreement only for such work specifically requested by Contractor in writing. 3.2