Motion-Secondary: 88 TOWNSEND STREET OWNERS ASOCIATION, VS. 699 SECOND DEVELOPMENT LLC, et al

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                                Steven E. McDonald (SBN 121949)
Colin W. Larson (SBN 287243)

Bledsoe, Cathcart, Diestel, Pedersen, & Treppa, LLP

601 California Street, 16" Floor

San Francisco, CA 94108

Telephone: (415) 981-5411
Facsimile: (415) 981-0352

E-Mail: smcdonald@bledsoclaw.com;

jshea@bledsoelaw.com; clarson@bledsoelaw.com

Gregory G. Dahl (SBN 124213)
Law Offices of Timothy R. Wagner
2633 Camino Ramon, Suite 210
San Ramon, CA 94583

Telephone: (925) 901-2500
Facsimile: (866) 386-1186

Email: gregoryg.dahl@aig.com

Atiorneys for Defendant/Cross-Complainant,

ELECTRONICALLY
FILED

Superior Court of California,
County of San Francisco

AUG 12 2014

Clerk of the Court
BY: ROMY RISK
Deputy Clerk

Blomberg Building Materials, Inc. dba Blomberg Window Systems

SUPERIOR COURT OF THE STATE OF CALIFORNIA

JN AND FOR THE COUNTY OF SAN FRANCISCO

88 TOWNSEND STREET OWNERS
ASSOCIATION, a California non-profit
mutual benefit corporation,

Plaintiff,
v.

699 SECOND DEVELOPMENT, LLC, a
California limited liability company;
CANNON CONSTRUCTORS, INC. a
California corporation : and DOES 1-150,
inclusive,

Defendants.

AND ALL RELATED CROSS ACTIONS

iti
iti

ale

Case No. CGC-13-531203

DECLARATION OF COLIN W.
LARSON IN SUPPORT OF
BLOMBERG BUILDING
MATERIALS, INC.’S MOTION FOR
GOOD FAITH SETTLEMENT
DETERMINATION

Date: September 23, 2014
Time: 9:30 a.m.

Dept: 302

Reservation No.: 081214-06

Case No. CGC-13-53 1203

DECLARATION OF COLIN W. LARSON IN SUPPORT OF BLOMBERG BUILDING MATERIALS,
INC.°S MOTION FOR GOOD FAITH SETTLEMENT DETERMINATIONI, Colin W. Larson, hereby declare:

1,

Tam an attomey at law, licensed to practice in this Court and all the courts of the
State of California, 1 am an associate in the firm of Bledsoe, Cathcart, Diestel,
Pedersen & Treppa, LLP, co-counsel of record for Defendant/Cross-Complainant
BLOMBERG BUILDING MATERIALS, INC. DBA BLOMBERG WINDOW
SYSTEMS (“BLOMBERG”) in the above captioned litigation. [ make this
declaration under penalty of perjury and based on my own personal knowledge,
except as to those matters stated to be based on information and belief, and as to
those matters, 1 believe the m to be true. If called upon to do so, I could competently
testify to the matters contained in this declaration in a court of law.

J submit this declaration in support of BLOMBERG?’s motion for determination of
good faith settlement between BLOMBERG and Plaintiff 88 TOWNSEND

STREET OWNERS ASSOCIATION (“PLAINTIFF”).

This matter involves the construction of a mixed use condominium complex
located at 88 Townsend Street, San Francisco, California (“the Project”). The
Project consists of 112 (one hundred and twelve) residential condominium units, 2
(two) commercial units, and common areas owned by PLAINTIFF’s members and
managed and maintained by PLAINTIFF. The Project was completed in or about
2004. PLAINTIFF alleges the Project suffers from a variety of construction defects,
including at the windows. BLOMBERG manufactured and supplied aluminum
framed windows and doors for the Project. BLOMBERG vehemently denies any
wrongdoing.

On or about May 6, 2013, PLAINTIFF filed a Complaint against 699 SECOND
DEVELOPMENT, LLC (“699 SECOND”); CANNON CONSTRUCTORS, INC.
(“CANNON”), and DOES 1-150, inclusive. On or about May 22, 2013,
PLAINTIFF amended its Complaint, substituting BLOMBERG for the fictitiously
named DOE 128.

Afier careful investigation and evaluation of this case, and after engaging in good

+2- Case No. CGC-13-$31203

DECLARATION OF COLIN W, LARSON IN SUPPORT OF BLOMBERG BUILDING MATERIALS,

INC.’S MOTION FOR GOOD FAITH SETTLEMENT DETERMINATION10.

faith settlement negotiations, BLOMBERG and PLAINTIFF (collectively, “Settling
Parties”) have reached a settlement agreement, the terms of which are set forth in
detail below.

The Settling Parties engaged in protracted, arms-length negotiations taking place
over a period of months and numerous mediation sessions. These negotiations
culminated in an agreement to settle between BLOMBERG and PLAINTIFF in
exchange for a total payment of $22,500.00 by BLOMBERG to PLAINTIFF. The
Settling Parties have agreed to sign a Settlement Agreement and Mutual Release of
Claims, and to fully resolve and discharge any and all claims for liability, indemnity,
and contractual issues that are part of this litigation. The terms of this settlement are
contingent on this Court’s determination that the settlement is in good faith pursuant
to California Code of Civil Procedure § 877.6.

PLAINTIFF’s consultants have estimated that the unburdened cost to repair the
alleged defects at the windows and doors and manufactured and supplied by
BLOMBERG is $80,860.00.

While BLOMBERG strongly maintains that it is in no way Hable for the alleged
defects PLAINTIFF complains of, BLOMBERG has agreed to pay $22,500.00 to
“buy peace” and avoid the cost and uncertainty of trial. Notwithstanding
BLOMBERG’s agreement to pay, a $22,500.00 settlement figure is far in excess of
BLOMBERG’s proportionate liability in this case.

According to PLAINTIFF’s consultants, BLOMBERG is partially or fully
responsible for the following alleged defects: “Framing not square in opening”;
“Horizontal Slider Operable Leafs Not Set Square Into Frame”; “Casement Crank
Handie Fasteners Stripped”; “Single Hung Balancers Bad”; and “Water Staining
Below Windows and Sliding Glass Doors”. PLAINTIFF has also alluded to
allegations of deficiencies at window and/or door rollers, roller tracks, and latches.
PLAINTIFF further identifies the following repairs purportedly necessitated by the

aforementioned “defects”: “Inspect Operable Units Windows/Clean Weeps/Minor

-3- Case No. CGC-13-531203

DECLARATION OF COLIN W. LARSON IN SUPPORT OF BLOMBERG BUILDING MATERIALS,

INC.’S MOTION FOR GOOD FAITH SETTLEMENT DETERMINATIONOo mw a a

Th.

Tune Up”; “Additional Repair Sliding Windows 45% allowance”; “Additional
Repair Casement Windows 9% Allowance”; “Unit 401 Rmv Left Fixed
Glazing/Repair Jamb/Reinstall Allowance”; “Repair Interior Damage at Windows
Allowance 36%”; “Inspect/Tune Up SGD at units 210, 211, 227”; and “Repair
Interior Damage at SGDs Allowance”.

If BLOMBERG is saddled with Hability in this case, it would pose a financial
hardship. Additionally, there are significant coverage issues which may affect the
availability of coverage if this matter were to go to verdict against BLOMBERG.
For example, BLOMBERG’s carriers have reserved their rights to limit or disclaim
coverage based on lack of resulting damage and other provisions that could limit or

eliminate coverage for any indemnity payment.

. There has been no collusion in this case. The Settling Parties reached settlement

after protracted, arms-length negotiations taking place over a period of months and
numerous mediation sessions involving counsel for BLOMBERG, PLAINTIFF,
Special Master David Henningsen, and others. The settlement is contingent on a full
release and dismissal with prejudice of all claims against BLOMBERG and its
carriers, and upon a grant of BLOMBERG’s motion for good faith settlement

determination.

I declare under penalty of perjury that the foregoing ts is true and ¢ correct, and that this

declaration was signed on _4ft:< 9 byt Be f bs fai act tp, ect Oe of C pe

California.

-4- Case No. CGC-13-531203

DECLARATION OF COLIN W. LARSON IN SUPPORT OF BLOMBERG BUILDING MATERIALS,

INC.’S MOTION FOR GOOD FAITH SETTLEMENT DETERMINATION