Preview
Steven H. Schwartz, Esq., SBN 94637
Noel E. Macaulay, Esq., SBN 121695
SCHWARTZ & JANZEN, LLP
12100 Wilshire Boulevard, Suite 1125
Los Angeles, CA 90025-7117
Telephone: 310/979-4090
Facsimile: 310/207-3344
Attomeys for Defendant and Cross-Defendant
HKS, INC, individually and dba HKS ARCHITECTS, INC,
SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN FRANCISCO
BEACON RESIDENTIAL COMMUNITY ASSOCIATION,
Plaintiff,
vs.
CATELLUS THIRD AND KING LLC; CATELLUS
DEVELOPMENT CORPORATION; CATELLUS
COMMERCIAL DEVELOPMENT CORP.; CATELLUS
OPERATING LIMITED PARTNERSHIP; CATELLUS
URBAN DEVELOPMENT CORPORATION; THIRD AND
KING INVESTORS LLC; PROLOGIS; MISSION PLACE
LLC; MISSION PLACE MEZZANINE LLC; MISSION
PLACE MEZZ HOLDINGS LLC; MISSION PLACE
PARTNERS LLC; CENTURION REAL ESTATE
INVESTORS IV, LLC; CENTURION REAL ESTTE
PARTNERS, LLC; CENTURION PARTNERS LLC;
WEBCOR CONSTRUCTION, INC.; WEBCOR BUILDERS,
INC.; WEBCOR CONSTRUCTION, INC., individually and
doing business as WEBCOR BUILDERS; WEBCOR
CONSTRUCTION LP individually and doing business as
WEBCOR BUILDERS; SKIDMORE OWINGS & MERRILL
LLP; HKS, INC,; HKS ARCHITECTS, INC.; HKS, INC.,
individually and doing business as HKS ARCHITECTS,
INC. and DOES 1 through 200,
Defendants.
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1162.006// MEMORANDUM OF POINTS AND AUTHORITIES FOR MOTION TO STRIKE THIRD AMENDED COMPLAINT
ELECTRONICALLY
FILED
Superior Court of Cajifornia,
County of San Francisco
SEP 03 2014
Clerk of the Cqurt
BY: EDNALEEN JAVIER
Deputy Clerk
CASE NO. CGC-08-478453
[Complaint Filed: August 8, 2008}
HKS’ INC.’S MEMORANDUM OF
POINTS AND AUTHORITIES IN
SUPPORT OF NOTICE OF MOTION
TO STRIKE PORTIONS OF THE
THIRD AMENDED COMPLAINT
[NOTICE OF MOTION TO STRIKE
PORTIONS OF THE THIRD
AMENDED COMPLAINT, REQUEST
TO TAKE JUDICIAL NOTICE
CONCURRENTLY FILED
HEREWITH]
DATE: September 30, 2014
TIME: 9:00 a.m.
DEPT: 304
HKS' INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF NOTICE OF MOTION TO
STRIKE PORTIONS OF THE THIRD AMENDED COMPLAINT!
INTRODUCTION
This motion is very simple. Plaintiff, the Beacon Residential Community Association (‘Plaintiff’) is
acondominium association, which has brought suit against the project developers, sellers, general
contractors, subcontractors, architects, real estate brokers and many others, for purported defects of
construction and/or design. One of the claims, repeatedly made in the Third Amended Complaint, is that
the project and units suffer from a “heat gain” issue, in which the selection of certain materials and lack of
proper ventilation allegedly causes the units to become uncomfortably hot during the day. The ability of
any HOA to assert such a claim is questionable and the HOA’s motion for class certification on the issue
has been denied.
Leaving that issue aside, there is another, very real reason why these “heat gain’/ventilation issues
simply cannot be asserted by plaintiff and against anyone other than the seller. Thatis, these issues were
known to the seller before the units were first marketed as condominiums. Plaintiff alleges exactly that in
the Third Amended Complaint, referencing, among other things, numerous tenant complaints (the units
were rented out as apartments before being marketed as condominiums), tenant petitions for redress and
the like, as well as remedial measures undertaken by the seller, prior to any sales, to “fix" the alleged
problem. Moreover, if the Third Amended Complaint were not itself solely sufficient to establish Plaintiff's
contentions in that regard, Plaintiff has also subsequently filed numerous motions, oppositions to motions,
declarations, evidentiary submissions, copies of deposition transcripts and the like with the Court,
advancing its position that such was known by the sellers and concealed from purchasers and setting forth
in exhaustive detail the facts and evidence in support of those assertions. Judicial notice may be taken of
the fact of these contentions, their contents and their adoption and assertion by Plaintiff in this case.
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1162.006// MEMORANDUM OF POINTS AND AUTHORITIES FOR MOTION TO STRIKE THIRD AMENDED COMPLAINT
HKS’ INC'S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF NOTICE OF MOTION TO
STRIKE PORTIONS OF THE THIRD AMENDED COMPLAINT{tis now well established that it is only the owner in possession when the problems first manifest
themselves (and thus when a cause of action accrues) that has standing, “ownership” or “right” to bring the
claim/cause of action. Subsequent owners, absent an express assignment of the right to sue, neither ‘own’
nor have standing fo assert the claim. Here, it is crystal clear — based on Plaintiff's own allegations,
contentions and affirmations ~ that the problems manifested themselves long before a single unit was sold
to the public. it is also crystal clear — again based on Plaintiff's own allegations and judicially noticeable
submissions — that the existence of an alleged “heat gain’/ventilation issue was known to the sellers and
prior to the first unit being sold. Under those circumstances, any claims against third parties belong solely
to MISSION PLACE, and not fo anyone else’, As such, a motion to strike the allegations in the Third
Amended Complaint related to the these issues and as and against HS is proper and ought fo be granted
H
PLAINTIFFS ALLEGATIONS, CONTENTIONS, SUBMISSIONS AND
THE HISTORY OF THE CASE
A. History Of The Motion To Strike
in 2011, HKS and Skidmore, Owings & Merrill LLP (‘SOM’) filed demurrers to the Third Amended
Complaint, which were sustained with leave to amend, on the grounds that architects did not owe a duty of
care to third parties with which they were not in contractual privity. Plaintiff elected not to amend.
| That is not to say that Plaintiff is without recourse. Standard principles governing disclosures, concealment and the
like would apply vis-a-vis the seller defendants, and indeed, there are causes of action asserted by Plaintiff and
against the sellers which are specific to the “heat gain’/ventilation claims. Moreover, to the extent not otherwise
barred, (a) the seller could prosecute its own action for damages against the other defendants and (b) (b) the seller
could assert indemnity claims against third parties such as HKS. Mission Place has done both.
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4162.006// MEMORANDUM OF POINTS AND AUTHORITIES FOR MOTION TO STRIKE THIRD AMENDEO COMPLAINT
HKS’ INC.'S MEMORANDUM OF POINTS AND AUTHORITIES !N SUPPORT OF NOTICE OF MOTION TO
STRIKE PORTIONS OF THE THIRD AMENDED COMPLAINTJudgment was entered in HKS and SOM's favor. Plaintiff appealed. The matter ultimately ended up before)
the California Supreme Court, which has now reversed.
At the time the demurrers to the Third Amended Complaint were filed, they were accompanied by al
motion to strike by SOM, which had been joined in by HKS. The ground for the motion - which sought to
strike claims related to heat gain/ventilation matters - was completely unrelated to those asserted in the
demutrers. Given its ruling on the demurrers, the Court found it unnecessary to determine the motion to
strike at that time. With the reversal of the demurrer, the earlier motion to strike remains to be adjudicated.
SOM's original motion has been refilled and HKS has again joined in the same?.
Independently of the foregoing, HKS elects to file its own separate motion to strike, primarily
because subsequent filings by Plaintiff in the years since the original motion to strike further support the
motion and judicial notice has been requested of the same. These admissions, contentions and filings are
also referenced in this motion.. As such, this motion to strike ought to be considered as an addition to and
expansion upon the renewed motion to strike filed by SOM and joined in by HKS.
B. The Third Amended Complaint
HKS is named in three (3) causes of action in the Third Amended Complaint. These consist of the
First Cause of Action, [‘Civil Code Title 7 — Violation of Statutory Building Standards for Original
Construction Civil Code Sections 895 et seq.]’, the Second Cause of Action ["Negligence Per Se for
Violation of Statute”) and the Fifth Cause of Action [*Negligence of Design Professionals and
Constructors”). HKS and SOM {referred to in the Third Amended Complaint as “SOM/HKS’ - see Third
Am, Comp., 34) are identified as the architects, which performed services under contract with the
2 Given that Judge Kramer had previously granted the HKS joinder and SOM's motion to sirike is simply being
refilled, it may be that the renewed filing of a joinder is unnecessary, but such has been done out of an abundance of
caution.
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4162.006// MEMORANDUM OF POINTS AND AUTHORITIES FOR MOTION TO STRIKE THIRD AMENDED COMPLAINT
HKS' INC.'S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF NOTICE OF MOTION TO
STRIKE PORTIONS OF THE THIRD AMENDED COMPLAINTdeveloper/seller [See e.g. Third Am. Comp., fff 39(d), 80 and 84]. According to the Third Amended
Complaint, Defendants ““PROLOGIS/CATELLUS’ [Third Am. Comp.{ 32] and “MISSION PLACE, LLC,”
{Third Am. Comp. 32] (collectively referred to as the “Sellers’):
{Alt the time that they marketed and sold the Units at the Subject Property, had actual
knowledge of serious latent and patent deficiencies at the Subject Property, consisting of
improper construction of the windows, ventilation and other related systems of the Subject
Property, to the point that many of the units became hot and stuffy on a constant basis,
making them essentially uninhabitable and causing a health hazard. Numerous of the initial
residents of the Subject property, to whom the Units were rented, complained of the
unhealthy, unpleasant and at times unbearably, hot and stuffy conditions. Further, [Sellers]
knew that during construction of the Subject Property [SOM/HKS] had elected to deviate
from the approved Title 24 submittal for the Subject Property by installing substandard
window glass throughout the Subject property. In an attempt to remediate the severe
habitability, safety and health problems caused by the substandard design and materials
installed, defendant “MISSION PLACE, LLC” exacerbated the problem by having defendant
WINDOW SOLUTIONS... install a “film" inside a substantial number of windows in the Units.
The “film” did not solve the problem, but caused further damage in that it created a heat
buildup in the window glass that in numerous instances caused the glass to develop large
cracks and other damage. These severe latent and patent deficiencies at the Subject
Property, relating to the excessive heat gain associated with improper design and
construction, as well as inadequate design and construction of ventilation systems, and the
inadequate remediation attempted therefore, ate referred to for purposes of this cause of
action as “the Overheating Conditions.” [Sellers] received a series of written and unwritten
complaints from residents of the Subject Property in 2004 and 2005, informing them of the
Overheating Conditions.
[Third Am. Comp., 1116, at pgs. 53 (5) ~ 54 (1)]
Thus, Plaintiff unequivocally alleges that the Sellers not only knew about the alleged “heat
gain/ventilation issues prior to the sale, but actually identifies facts supporting this assertion in its Third
Amended Complaint.
C. Plaintiff's Submissions in Connection with Mission Place’s Motion for Summary
Adjudication of Issues
Based upon the allegations of prior knowledge, Plaintiff has sued the seller/developer related
entities for concealment, seeking punitive damages [Third Am. Complaint, {ff[1 15-122]. On September 28,
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1162,006// MEMORANDUM OF POINTS AND AUTHORITIES FOR MOTION TO STRIKE THIRD AMENDED COMPLAINT
HKS' INC.'S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF NOTICE OF MOTION TO
STRIKE PORTIONS OF THE THIRD AMENDED COMPLAINT2012, the Seller entities moved for summary adjudication as to this cause of action and the punitive
damages claim. The matter was exhaustively briefed? and the motion ultimately denied. Plaintiff's
contentions are further demonstrated by ifs statements in its Opposition, such as the foregoing:
Mission Place knew that from very first moment of the Beacon Project's habitation by
human beings, many of the occupants complained of prolonged, extreme and severe
overheating problems. Mission Place’s own personnel, who upon the initial occupancy
of the project had a rental unit at the Beacon Project where they stayed only part time,
also noticed. the overheating problem. They were told “anecdotes” about the high
temperatures and stifling conditions inside units by other tenants. The complaints
Mission Place knew about were not merely verbal, but were also submitted by several
residents in writing including a formal protest petition. The petition discloses that the
Beacon Project's residents were suffering “extreme general discomfort,” “inability to
sleep,” “inability to work,” “headaches,” and “loss of appetite and fatigue” due to heating
and ventilation deficiencies. Tenants, when moving out, and informed Mission Place’s
property manager, in writing, that they had been forced to move out because their unit
was “un-inhabitable for 11 months a year.” Others informed Mission Place
management that they had been “constantly sick” when they spent any time in their
unit, from the lack of air circulation. Mission Place management was told that the
internal temperatures in certain apartments had approached 100 degrees Fahrenheit,
creating a ‘convection oven-like situation” in these units. Tenants had presented
doctor’s notes prescribing “ventilation” and “air-conditioning” to remedy migraines that
their patients at the Beacon Project were suffering. Even after a film was applied to
some of the windows in an effort to put a band-aid on the problem, Mission Place’s own
consultant tock temperature readings which confirmed that temperatures inside the
units remained more than twenty degrees above ambient outdoor temperatures.
[footnotes deleted]
[RJN No. 1 (Plaintiff's Opposition to Motion for Summary Adjudication - Mission Piace),
pgs. 1 (19) - 3 (2)].
3 Review of the Court Docket reveals, from the Plaintiff alone (and not including evidentiary objections), the following
(4) Opposition to Motion for Summary Adjudication (Mission Place), filed on December 3, 2012, (2) Plaintiff's
Response to Separate Statement of Undisputed Material Facts, filed December 3, 2042, (3) Plaintiffs Separate
Statement of Undisputed Material Facts in Opposition to Motion for Summary Adjudication, (4) Declaration of Sung E.
Shim (Plaintiff's counsel), filed on November 30, 2012 and attaching scores of deposition transcripts and exhibits, (6)
Declaration of Michael T. Burgess, P.E., filed November 30, 2012, (6) Declaration of Michael Leffler, filed November
30, 2012, (7) Declaration of Robert Riggs (plaintiff's counsel), filed on December 3, 2012, (8) Declaration of Frances
Offerman, filed on December 3, 2012, (9) Request to Take Judicial Notice in Opposition to MSA, filed on December
3, 2012 and (10) Opposition to Motion for Summary Adjudication (Catellus), filed on December 5, 2012,
-6-
1162.006// MEMORANDUM OF POINTS AND AUTHORITIES FOR MOTION TO STRIKE THIRD AMENDED COMPLAINT
HKS' INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF NOTICE OF MOTION TO
STRIKE PORTIONS OF THE THIRD AMENDED COMPLAINTThis material was buttressed by further expansive and detailed factual recitals in the Plaintiff's
Opposition to the Motion for Summary Adjudication and elsewhere [See e.g. RUN No. 4 - Plaintiff's
Opposition, at pgs. 3 - 10], not to mention the evidentiary submissions made and deposition transcripts
provided. Much of this testimony was referenced in the order denying the motion for summary adjudication
by Mission Place [Request to Take Judicial Notice, No. 3, pg. 2 (4-18)]
A MOTION TO STRIKE IS PROPER HERE
Code of Civil Procedure §435 permits a motion to strike to be brought as fo the complaint, in whole
or in any part, within the time allowed by law to answer. Code of Civil Procedure §436 separately permits a
motion to strike to be brought at any time, in the Court's discretion, and directed to “any irrelevant, false, or
improper matter inserted in any pleading." “{U]nder section 436, a court at any time may, in its discretion,
strike portions of a complaint that are irrelevant.” Quiroz v. Seventh Ave. Center (2006) 140 Cal App.4th
1256, 1281. In tum, Code of Civil Procedure §431.10 defines “immaterial” and “irrelevant” allegations as
including “an allegation that is neither pertinent to nor supported by an otherwise sufficient claim or
defense” and “a demand for judgment requesting relief not supported by the allegations of the complaint or
cross-complaint’, both of which apply here.
“Te
1162.006// MEMORANDUM OF POINTS AND AUTHORITIES FOR MOTION TO STRIKE THIRD AMENDED COMPLAINT
HKS' INC,'S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF NOTICE OF MOTION TO
STRIKE PORTIONS OF THE THIRD AMENDED COMPLAINTWV
INASMUCH AS THE PLAINTIFF CONTENDS IN THE THIRD AMENDED COMPLAINT AND IN OTHER
ENASMIUYR Ag TE PLAINTIPY VN EN ae eee ee
FILINGS WITH THIS COURT THAT THE “HEAT GAIN”/VENTILATION ISSUES WERE KNOWN TO
THE SELLER PRIOR TO THE SALE, IT LACKS STANDING OR RIGHT TO ASSERT THE SAME
AGAINST HKS
itis now established that, whether viewed as a matter of “ownership” of a cause of action,
“standing” or “accrual”, the owner at the time a problem first manifests itself is the only person or entity that
can bring suit on the same. In other words, “[W]hen an owner of a building suffers harm because of
inadequate design of, or engineering or construction work performed on a building, a cause of action
accrues to the owner’ [Krusiy, S.J. Amoroso Construction Co, (2000) 81 Cal App.4th 995, 1005]. In Krusi,
the plaintiffs bought an eight-year-old commercial building. Prior to the sale, the seller had received tenant
complaints that the building leaked [/d. at 997-998, 1007 at fn. 8]. The seller believed that this issue (and
others) had been rectified or were limited in scope, and did not disclose the same to the buyer [/d.] After
the sale, the leaking continued, and even worsened [Id]. Contractors retained by the buyer reported that
the leaks and flooring problems were caused by defects in the building's design and construction and that
the defects would not be evident without an invasive Inspection or reasonably known to a layperson at the
time of sale [/d.]. The plaintiff buyers then brought suit against the architects and general contractors, who
moved for and secured summary judgment. In affirming the judgment, the Court of Appeal noted that even
though the lack of contractual privity with the architects might not be an impediment fo suit {Id. at 1005], the
accrual/standing issue separately barred the claim:
{tis clear that a cause of action for damage to real property accrues when the defendant's
act causes “immediate and permanent injury’ to the property or, to put it another way, when
there is ‘actual and appreciable harm’ to the property... This rule is, of course, simply a
corollary of the general rule regarding accrual of causes of action. [Citation] We are aware
of no reason why it should not apply ... to actions alleging negligence in the design,
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1162.006// MEMORANDUM OF POINTS AND AUTHORITIES FOR MOTION TO STRIKE THIRD AMENDED COMPLAINT
HKS' INC.’'S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF NOTICE OF MOTION TO
STRIKE PORTIONS OF THE THIRD AMENDED COMPLAINTengineering or construction of buildings. Thus, if, as, and when an owner of a building
suffers harm because of inadequate design of, or engineering or construction work
performed on a building, a cause of action accrues to that owner. To be sure, it may choose
to deliberately transfer that cause of action to another, but without some clear manifestation
of such an intention, the cause of action is not transferred to a subsequent owner.
[Krusi (supra) at pg. 1005]
Krusi makes clear that once a cause of action for property damage arises in favor of a property
owner, another cause of action against the same defendant does not accrue fo a subsequent purchase
although completely different and unrelated claims which had not previously surfaced might still be made:
Itdoes not mean that, in a case implicating damage to such property, once a cause of action
in favor of a prior owner accrues, ancther cause of action against the same defendant or
defendants can accrue to a subsequent property owner— unless, of course, the damage
suffered by that subsequent owner is fundameritally different from the earlier type. Thus, if
owner number one has an obviously leaky roof and suffers damage to its building on
account thereof, a cause of action accrues to it against the defendant or defendants whose
deficient design or construction work caused the defect. But, if that condition goes
essentially unremedied over a period of years, owners two and three of the same building
have no such right of action against those defendants, unless such was explicitly (and
properly) transferred to them by owner number one. But owners two and three could well
have a cause of action against those same defendants for, e.g., damage caused by an
earthquake if it could be shown that inadequate seismic safeguards were designed and
constructed into the building. Such is, patently, a new and different cause of action.
[Krusi, supra, 81 Cal.App.4th at p. 1006]
Because it was undisputed that the prior owner knew about the leaks and damaged subflooring
before the sale, the negligence claim accrued to the building's prior owners, not the subsequent buyers.
Similarly, Plaintiff contends that knowledge of the condition ~ indeed, extensive investigation into it, and
even remedial measures undertaken - existed prior to the sale
Siegel v. Anderson Homes, inc. (2004) 118 Cai.App.4th 994, 1009, states the relevant rule in
slightly different terms: a “cause of action belongs to the owner who first discovered, or ought to have
discovered, the property damage.” In Siegel, the purchaser of a home had a cause of action against the
builder where the home sustained structural damage before the original owner sold it to the plaintiff, but the
damage was neither discovered nor reasonably discoverable until after the sale (/d. at 996]. After making
an exhaustive analysis of Krusi and its predecessors, the court concluded that a “cause of action belongs to
the owner who first discovered, or ought to have discovered, the property damage. It is only then that
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1162.006// MEMORANDUM OF POINTS AND AUTHORITIES FOR MOTION TO STRIKE THIRD AMENDED COMPLAINT
HKS' INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF NOTICE OF MOTION TO
STRIKE PORTIONS OF THE THIRD AMENDED COMPLAINTsome entity capable of maintaining a legal claim will have suffered a compensable injury, e.g, the cost of
repair and/or the loss in the property's value (inasmuch as the owner has a duty to disclose the damage to
potential buyers).’[/d. at p. 1009].
Here, itis undisputed that Plaintiff contends - and had repeatedly asserted in numerous
documents filed with the Court - that the sellers were well aware of the heat/ventilation issues. Plaintiff
contends that not only did the sellers have actual, persona/ knowledge of this (the management owned and
occupied units, as did the sellers’ principals), but that tenants had circulated petitions about the matter, the
“heat gain’/ventilation claims were discussed at length between the developer/seller entities prior to putting
the units on the market, testing had been done, remedial measures were attempted, and a disclosure
statement was crafted for the unit purchasers, in an attempt to shield the sellers from liability. Clearly, the
sellers were aware of the issues on which suit has now been brought, and they - and not subsequent
purchasers (or a homeowners association composed of those purchasers) ~ have
standing/ownership/accrual of the cause of action and claims. Itis the sellers which have the right to
pursue the matter against third parties — not the Plaintiff. As such, the motion to strike ought to be granted
in its entirety and Plaintiff ordered to amend the complaint to delete any allegations in this regard against
HKS.
DATED: September 2, 2014 SCHWARTZ & JANZEN, LLP
AttomeyS for Defendant and Cross-Defendant,
HKS, INC,
-10-
1162.006// MEMORANDUM OF POINTS AND AUTHORITIES FOR MOTION TO STRIKE THIRD AMENDED COMPLAINT
HKS' INC'S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF NOTICE OF MOTION TO
STRIKE PORTIONS OF THE THIRD AMENDED COMPLAINTOC me ND mH Rw ON
PROOF OF SERVICE
STATE OF CALIFORNIA )
) ss.
COUNTY OF SAN FRANCISCO }
BEACON RESIDENTIAL COMMUNITY ASSOCIATION y, CATELLUS THIRD AND KING LLC, et al.
San Francisco Superior Court Case No: CGC 08-478453
|, Annette Tucker declare: | am a resident of the State of California and over the age of eighteen
years, and not a party fo the within action; my business address is 12100 Wilshire Boulevard, Suite 1125,
Los Angeles, CA 90025-7117. On September 3, 2014, | served the within document(s}:
HKS’ INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF NOTICE OF MOTION
TO STRIKE PORTIONS OF THE THIRD AMENDED COMPLAINT
[NOTICE OF MOTION TO STRIKE PORTIONS OF THE THIRD AMENDED COMPLAINT, REQUEST TO
TAKE JUDICIAL NOTICE CONCURRENTLY FILED HEREWITH]
><
{FILE &SERVE XPRESS) | caused such document(s) to be electronically served through the Court
Link System for the above-entitled matter. This service complies with Code of Civil Procedure
§1010. The file transmission was reported as complete and a copy of the “Justice Link Filing
Receipt" page will be maintained with the original document(s) in our office.
Executed on September 3, 2014, at Los Angeles, California
| declare under penalty of perjury under the laws of the State of California that the foregoing is true
() Uh vote
Affelte Tucker
1
PROOF OF SERVICESERVICE LIST
BEACON RESIDENTIAL COMMUNITY ASSOCIATION v. CATELLUS THIRD AND KING LLC, et al.
San Francisco Superior Court Case No: CGC 08-478453
Ann Rankin, Esq.
Terry Wilkens, Esq.
LAW OFFICES OF ANN RANKIN
3911 Harrison St
Oakland, CA 94611-4536
Phone Number (510) 653-8886
Fax Number (510) 653-8889
arankin@annrankin.com
twikkens@annrankin.com
Attomeys for Plaintiff BEACON RESIDENTIAL
COMMUNITY ASSOCIATION
Kenneth Katzoff, Esq.
Robert R. Riggs, Esq.
Sung E. Shim, Esq.
KATZOFF & RIGGS
41500 Park Ave #300
Emeryville, CA 94608
Phone Number (510) 597-1990
Fax Number (510) 597-0295
kkatzof@kaizoffrigas.com
tiggs@katzoffriqgs.com
sshim@kaizoffriggs.com
Attomeys for Plaintiff BEACON RESIDENTIAL
COMMUNITY ASSOCIATION
John A. Koeppel, Esq.
Todd J. Wenzel, Esq.
ROPERS, MAJESK!, KOHN & BENTLEY PC
201 Spear Street, Suite 1000
San Francisco + CA + 94105-1667
Office: (415) 543-4800
Fax: (415) 972-6301
TWenzel@mkb.com
JKoeppei@mkb.com
Attorneys for Defendants PROLOGIS; THIRD AND
KING INVESTORS LLC; CATELLUS URBAN
DEVELOPMENT CORPORATION;
CATELLUS DEVELOPMENT CORPORATION,
CATELLUS THIRD AND KING INVESTORS LLC;
CATELLUS COMMERCIAL DEVELOPMENT
CORPORATION; CATELLUS OPERATING LIMITED
PARTNERSHIP
Steven M. Cvitanovic, Esq.
Zachary W. Shine, Esq.
HAIGHT, BROWN & BONESTEEL
714 Stevenson Street, 20th Floor
San Francisco, CA 94105-2981
(415) 546-7500/FAX (415) 546-7505
scvitanovic@hbblaw.com
Co-Counsel for Defendants MISSION PLACE LLC;
CENTURION REAL ESTATE PARTNERS, LLC;
MISSION PLACE MEZZ HOLDINGS LLC, erroneously
named as MISSION PLACE HOLDINGS LLC;
MISSION PLACE MEZZANINE, LLC; and MISSION
PLACE PARTNERS, LLC,
Steven E. McDonald, Esq.
smedonald@bledsoelaw.com
James L. Shea
BLEDSOE, CATHCART, DIESTEL, PEDERSEN &
TREPPA, LLP
601 California Street - 16" Floor
San Francisco, CA 94108
Tel: 415/981-5411
Fax: 415/981-0352
Attorneys for Defendant and Cross-Complainant
SHOOTER & BUTTS, INC
David S. Webster, Esq.
Mark J. D’Argenio, Esq.
WOOD, SMITH, HENNING & BERMAN LLP
1401 Willow Pass Road, Suite 700
Concord, CA 94520-7982
(925) 356-8200/FAX (925) 356-8250
Email: dwebster@wshblaw.com
mdargenio@wshblaw.com
Attomeys for Defendants PROLOGIS; THIRD AND
KING INVESTORS LLC; CATELLUS URBAN
DEVELOPMENT CORPORATION; CATELLUS
DEVELOPMENT CORPORATION, CATELLUS THIRD
AND KING INVESTORS LLC; CATELLUS
COMMERCIAL DEVELOPMENT CORPORATION;
CATELLUS OPERATING LIMITED PARTNERSHIP
SERVICE LISTOo Oo ND
S. Mitchell Kaplan, Esq.
Gregory Hanson, Esq.
GORDON & REES LLP
275 Battery Street, Suite 2000
San Francisco, CA 94111
Main Phone: (415) 986-5900
Fax: (415) 986-8054
SKaplan@gordonrees.com
ghanson@gordonrees.com
Attorneys for WEBCOR Builders, INC.; WEBCOR
CONSTRUCTION, INC., individually and dba WEBCOR
BUILDERS; WEBCOR CONSTRUCTION LP,
individually and dba WEBCOR BUILDERS
Samuel J. Muir, Esq.
Erin R. Dunkerly, Esq.
COLLINS COLLINS MUIR + STEWART LLP
1100 El Centro Street
South Pasadena, CA 91030
smuir@ccmslaw.com
edunkeriy@ccmslaw.com
Tel: 626/243-1100
Fax: 626/243-1111
Attorneys for Defendant
WEBCOR CONSTRUCTION, INC. dba WEBCOR
BUILDERS
Christopher T. Olsen, Esq.
Mark Brueggemann
Scott Cloud
CLINTON & CLINTON
100 Oceangate - Suite 1400
Long Beach, CA 90802
Direct: 562/216-5078
Tel: 562-16-5078
Fax: 562/216-5001
Email! colsen@clinton-clinton.com
scloud@eclinton-clinton.com
mbrueggemann@clinton-clinton.com
Attomeys for THYSSENKRUPP ELEVATOR
CORPORATION
Kevin P. McCarthy, Esq.
Philip T. Bazzano, Esq.
Grace Koss, Esq.
Fred Trudeau, Esq.
MCCARTHY & MCCARTHY, LLP
492 Ninth St, Suite 220
Oakland, CA 94607
Telephone: 510-839-8100
Facsimile: 510-839-8108
kmocarthy@mecarthylip.com
pbazzano@mecarthyllp.com
gkoss@mecarthyllp.com
FTrudeau@McCarthyLLP.com
Attorneys for WINDOW SOLUTIONS.
William H. Staples
ARCHER NORRIS
2033 North Main Street, Suite 800
Walnut Creek, CA 94596
main 925.930.6600
fax 925.930.6620
wstaples@archemorris.com
dduncan@archerorris.com
Attomeys for ANNING-JOHNSON COMPANY
Christian Lucia, Esq.
Denae M, Olivieri, Esq.
Bruce Basilico, Esq.
SELLAR HAZARD & LUCIA
1800 Sutter Street, Suite 460
Concord, CA 94520
clucia@sellarlaw.com
dolivien@sellaraw.com
Tel (925) 938-1430
Fax (925) 256-7508
Randeil |. Campbell, Esq.
Arif Virgi, Esq.
LYNCH, GILARD! & GRUMMER
170 Columbus Avenue, 5th Floor
San Francisco, CA 94133
Tel: (415) 397-2800
Fax: (415) 397-0937
icampbell@igglaw.com
AVirjii@lgglaw.com
Attorneys for ARCHITECTURAL GLASS &
Attorneys for
ALLIED FIRE PROTECTION, BLUE'S ROOFING
COMPANY, CAREFREE TOLAND POOLS, INC.,
CREATIVE MASONRY, CRITCHFIELD MECHANICAL,
INC., CUPERTINO ELECTRIC, F. RODGERS
CORPORATION, J.W. MCCLENAHAN CO,, NV,
HEATHORN, INC., VAN-MULDER SHEET METAL,
INC., WEST COAST PROTECTIVE COATINGS, INC.,
and WESTERN ROOFING SERVICE
3
SERVICE LISTCON DR WH RR BH NY
oo
— oO
ALUMINIUM CO. INC
{name changed 02.11.13]
James P. Castles
Richard C. Young
ROBLES CASTLES & MEREDITH
492 Ninth Street, Suite 200
Oakland, CA 94607
Tel: (415) 743-9300
Fax: (415) 743-9305
Email: jim@remlawgroup.com
tick@rcmlawgroup.com
Attomeys tor Skidmore Owings & Merrill LLP
4
SERVICE LIST
Preview
Steven H. Schwartz, Esq., SBN 94637 Noel E. Macaulay, Esq., SBN 121695 SCHWARTZ & JANZEN, LLP 12100 Wilshire Boulevard, Suite 1125 Los Angeles, CA 90025-7117 Telephone: 310/979-4090 Facsimile: 310/207-3344 Attomeys for Defendant and Cross-Defendant HKS, INC, individually and dba HKS ARCHITECTS, INC, SUPERIOR COURT OF CALIFORNIA COUNTY OF SAN FRANCISCO BEACON RESIDENTIAL COMMUNITY ASSOCIATION, Plaintiff, vs. CATELLUS THIRD AND KING LLC; CATELLUS DEVELOPMENT CORPORATION; CATELLUS COMMERCIAL DEVELOPMENT CORP.; CATELLUS OPERATING LIMITED PARTNERSHIP; CATELLUS URBAN DEVELOPMENT CORPORATION; THIRD AND KING INVESTORS LLC; PROLOGIS; MISSION PLACE LLC; MISSION PLACE MEZZANINE LLC; MISSION PLACE MEZZ HOLDINGS LLC; MISSION PLACE PARTNERS LLC; CENTURION REAL ESTATE INVESTORS IV, LLC; CENTURION REAL ESTTE PARTNERS, LLC; CENTURION PARTNERS LLC; WEBCOR CONSTRUCTION, INC.; WEBCOR BUILDERS, INC.; WEBCOR CONSTRUCTION, INC., individually and doing business as WEBCOR BUILDERS; WEBCOR CONSTRUCTION LP individually and doing business as WEBCOR BUILDERS; SKIDMORE OWINGS & MERRILL LLP; HKS, INC,; HKS ARCHITECTS, INC.; HKS, INC., individually and doing business as HKS ARCHITECTS, INC. and DOES 1 through 200, Defendants. -1- 1162.006// MEMORANDUM OF POINTS AND AUTHORITIES FOR MOTION TO STRIKE THIRD AMENDED COMPLAINT ELECTRONICALLY FILED Superior Court of Cajifornia, County of San Francisco SEP 03 2014 Clerk of the Cqurt BY: EDNALEEN JAVIER Deputy Clerk CASE NO. CGC-08-478453 [Complaint Filed: August 8, 2008} HKS’ INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF NOTICE OF MOTION TO STRIKE PORTIONS OF THE THIRD AMENDED COMPLAINT [NOTICE OF MOTION TO STRIKE PORTIONS OF THE THIRD AMENDED COMPLAINT, REQUEST TO TAKE JUDICIAL NOTICE CONCURRENTLY FILED HEREWITH] DATE: September 30, 2014 TIME: 9:00 a.m. DEPT: 304 HKS' INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF NOTICE OF MOTION TO STRIKE PORTIONS OF THE THIRD AMENDED COMPLAINT! INTRODUCTION This motion is very simple. Plaintiff, the Beacon Residential Community Association (‘Plaintiff’) is acondominium association, which has brought suit against the project developers, sellers, general contractors, subcontractors, architects, real estate brokers and many others, for purported defects of construction and/or design. One of the claims, repeatedly made in the Third Amended Complaint, is that the project and units suffer from a “heat gain” issue, in which the selection of certain materials and lack of proper ventilation allegedly causes the units to become uncomfortably hot during the day. The ability of any HOA to assert such a claim is questionable and the HOA’s motion for class certification on the issue has been denied. Leaving that issue aside, there is another, very real reason why these “heat gain’/ventilation issues simply cannot be asserted by plaintiff and against anyone other than the seller. Thatis, these issues were known to the seller before the units were first marketed as condominiums. Plaintiff alleges exactly that in the Third Amended Complaint, referencing, among other things, numerous tenant complaints (the units were rented out as apartments before being marketed as condominiums), tenant petitions for redress and the like, as well as remedial measures undertaken by the seller, prior to any sales, to “fix" the alleged problem. Moreover, if the Third Amended Complaint were not itself solely sufficient to establish Plaintiff's contentions in that regard, Plaintiff has also subsequently filed numerous motions, oppositions to motions, declarations, evidentiary submissions, copies of deposition transcripts and the like with the Court, advancing its position that such was known by the sellers and concealed from purchasers and setting forth in exhaustive detail the facts and evidence in support of those assertions. Judicial notice may be taken of the fact of these contentions, their contents and their adoption and assertion by Plaintiff in this case. -2- 1162.006// MEMORANDUM OF POINTS AND AUTHORITIES FOR MOTION TO STRIKE THIRD AMENDED COMPLAINT HKS’ INC'S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF NOTICE OF MOTION TO STRIKE PORTIONS OF THE THIRD AMENDED COMPLAINT{tis now well established that it is only the owner in possession when the problems first manifest themselves (and thus when a cause of action accrues) that has standing, “ownership” or “right” to bring the claim/cause of action. Subsequent owners, absent an express assignment of the right to sue, neither ‘own’ nor have standing fo assert the claim. Here, it is crystal clear — based on Plaintiff's own allegations, contentions and affirmations ~ that the problems manifested themselves long before a single unit was sold to the public. it is also crystal clear — again based on Plaintiff's own allegations and judicially noticeable submissions — that the existence of an alleged “heat gain’/ventilation issue was known to the sellers and prior to the first unit being sold. Under those circumstances, any claims against third parties belong solely to MISSION PLACE, and not fo anyone else’, As such, a motion to strike the allegations in the Third Amended Complaint related to the these issues and as and against HS is proper and ought fo be granted H PLAINTIFFS ALLEGATIONS, CONTENTIONS, SUBMISSIONS AND THE HISTORY OF THE CASE A. History Of The Motion To Strike in 2011, HKS and Skidmore, Owings & Merrill LLP (‘SOM’) filed demurrers to the Third Amended Complaint, which were sustained with leave to amend, on the grounds that architects did not owe a duty of care to third parties with which they were not in contractual privity. Plaintiff elected not to amend. | That is not to say that Plaintiff is without recourse. Standard principles governing disclosures, concealment and the like would apply vis-a-vis the seller defendants, and indeed, there are causes of action asserted by Plaintiff and against the sellers which are specific to the “heat gain’/ventilation claims. Moreover, to the extent not otherwise barred, (a) the seller could prosecute its own action for damages against the other defendants and (b) (b) the seller could assert indemnity claims against third parties such as HKS. Mission Place has done both. -3- 4162.006// MEMORANDUM OF POINTS AND AUTHORITIES FOR MOTION TO STRIKE THIRD AMENDEO COMPLAINT HKS’ INC.'S MEMORANDUM OF POINTS AND AUTHORITIES !N SUPPORT OF NOTICE OF MOTION TO STRIKE PORTIONS OF THE THIRD AMENDED COMPLAINTJudgment was entered in HKS and SOM's favor. Plaintiff appealed. The matter ultimately ended up before) the California Supreme Court, which has now reversed. At the time the demurrers to the Third Amended Complaint were filed, they were accompanied by al motion to strike by SOM, which had been joined in by HKS. The ground for the motion - which sought to strike claims related to heat gain/ventilation matters - was completely unrelated to those asserted in the demutrers. Given its ruling on the demurrers, the Court found it unnecessary to determine the motion to strike at that time. With the reversal of the demurrer, the earlier motion to strike remains to be adjudicated. SOM's original motion has been refilled and HKS has again joined in the same?. Independently of the foregoing, HKS elects to file its own separate motion to strike, primarily because subsequent filings by Plaintiff in the years since the original motion to strike further support the motion and judicial notice has been requested of the same. These admissions, contentions and filings are also referenced in this motion.. As such, this motion to strike ought to be considered as an addition to and expansion upon the renewed motion to strike filed by SOM and joined in by HKS. B. The Third Amended Complaint HKS is named in three (3) causes of action in the Third Amended Complaint. These consist of the First Cause of Action, [‘Civil Code Title 7 — Violation of Statutory Building Standards for Original Construction Civil Code Sections 895 et seq.]’, the Second Cause of Action ["Negligence Per Se for Violation of Statute”) and the Fifth Cause of Action [*Negligence of Design Professionals and Constructors”). HKS and SOM {referred to in the Third Amended Complaint as “SOM/HKS’ - see Third Am, Comp., 34) are identified as the architects, which performed services under contract with the 2 Given that Judge Kramer had previously granted the HKS joinder and SOM's motion to sirike is simply being refilled, it may be that the renewed filing of a joinder is unnecessary, but such has been done out of an abundance of caution. -4- 4162.006// MEMORANDUM OF POINTS AND AUTHORITIES FOR MOTION TO STRIKE THIRD AMENDED COMPLAINT HKS' INC.'S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF NOTICE OF MOTION TO STRIKE PORTIONS OF THE THIRD AMENDED COMPLAINTdeveloper/seller [See e.g. Third Am. Comp., fff 39(d), 80 and 84]. According to the Third Amended Complaint, Defendants ““PROLOGIS/CATELLUS’ [Third Am. Comp.{ 32] and “MISSION PLACE, LLC,” {Third Am. Comp. 32] (collectively referred to as the “Sellers’): {Alt the time that they marketed and sold the Units at the Subject Property, had actual knowledge of serious latent and patent deficiencies at the Subject Property, consisting of improper construction of the windows, ventilation and other related systems of the Subject Property, to the point that many of the units became hot and stuffy on a constant basis, making them essentially uninhabitable and causing a health hazard. Numerous of the initial residents of the Subject property, to whom the Units were rented, complained of the unhealthy, unpleasant and at times unbearably, hot and stuffy conditions. Further, [Sellers] knew that during construction of the Subject Property [SOM/HKS] had elected to deviate from the approved Title 24 submittal for the Subject Property by installing substandard window glass throughout the Subject property. In an attempt to remediate the severe habitability, safety and health problems caused by the substandard design and materials installed, defendant “MISSION PLACE, LLC” exacerbated the problem by having defendant WINDOW SOLUTIONS... install a “film" inside a substantial number of windows in the Units. The “film” did not solve the problem, but caused further damage in that it created a heat buildup in the window glass that in numerous instances caused the glass to develop large cracks and other damage. These severe latent and patent deficiencies at the Subject Property, relating to the excessive heat gain associated with improper design and construction, as well as inadequate design and construction of ventilation systems, and the inadequate remediation attempted therefore, ate referred to for purposes of this cause of action as “the Overheating Conditions.” [Sellers] received a series of written and unwritten complaints from residents of the Subject Property in 2004 and 2005, informing them of the Overheating Conditions. [Third Am. Comp., 1116, at pgs. 53 (5) ~ 54 (1)] Thus, Plaintiff unequivocally alleges that the Sellers not only knew about the alleged “heat gain/ventilation issues prior to the sale, but actually identifies facts supporting this assertion in its Third Amended Complaint. C. Plaintiff's Submissions in Connection with Mission Place’s Motion for Summary Adjudication of Issues Based upon the allegations of prior knowledge, Plaintiff has sued the seller/developer related entities for concealment, seeking punitive damages [Third Am. Complaint, {ff[1 15-122]. On September 28, -5- 1162,006// MEMORANDUM OF POINTS AND AUTHORITIES FOR MOTION TO STRIKE THIRD AMENDED COMPLAINT HKS' INC.'S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF NOTICE OF MOTION TO STRIKE PORTIONS OF THE THIRD AMENDED COMPLAINT2012, the Seller entities moved for summary adjudication as to this cause of action and the punitive damages claim. The matter was exhaustively briefed? and the motion ultimately denied. Plaintiff's contentions are further demonstrated by ifs statements in its Opposition, such as the foregoing: Mission Place knew that from very first moment of the Beacon Project's habitation by human beings, many of the occupants complained of prolonged, extreme and severe overheating problems. Mission Place’s own personnel, who upon the initial occupancy of the project had a rental unit at the Beacon Project where they stayed only part time, also noticed. the overheating problem. They were told “anecdotes” about the high temperatures and stifling conditions inside units by other tenants. The complaints Mission Place knew about were not merely verbal, but were also submitted by several residents in writing including a formal protest petition. The petition discloses that the Beacon Project's residents were suffering “extreme general discomfort,” “inability to sleep,” “inability to work,” “headaches,” and “loss of appetite and fatigue” due to heating and ventilation deficiencies. Tenants, when moving out, and informed Mission Place’s property manager, in writing, that they had been forced to move out because their unit was “un-inhabitable for 11 months a year.” Others informed Mission Place management that they had been “constantly sick” when they spent any time in their unit, from the lack of air circulation. Mission Place management was told that the internal temperatures in certain apartments had approached 100 degrees Fahrenheit, creating a ‘convection oven-like situation” in these units. Tenants had presented doctor’s notes prescribing “ventilation” and “air-conditioning” to remedy migraines that their patients at the Beacon Project were suffering. Even after a film was applied to some of the windows in an effort to put a band-aid on the problem, Mission Place’s own consultant tock temperature readings which confirmed that temperatures inside the units remained more than twenty degrees above ambient outdoor temperatures. [footnotes deleted] [RJN No. 1 (Plaintiff's Opposition to Motion for Summary Adjudication - Mission Piace), pgs. 1 (19) - 3 (2)]. 3 Review of the Court Docket reveals, from the Plaintiff alone (and not including evidentiary objections), the following (4) Opposition to Motion for Summary Adjudication (Mission Place), filed on December 3, 2012, (2) Plaintiff's Response to Separate Statement of Undisputed Material Facts, filed December 3, 2042, (3) Plaintiffs Separate Statement of Undisputed Material Facts in Opposition to Motion for Summary Adjudication, (4) Declaration of Sung E. Shim (Plaintiff's counsel), filed on November 30, 2012 and attaching scores of deposition transcripts and exhibits, (6) Declaration of Michael T. Burgess, P.E., filed November 30, 2012, (6) Declaration of Michael Leffler, filed November 30, 2012, (7) Declaration of Robert Riggs (plaintiff's counsel), filed on December 3, 2012, (8) Declaration of Frances Offerman, filed on December 3, 2012, (9) Request to Take Judicial Notice in Opposition to MSA, filed on December 3, 2012 and (10) Opposition to Motion for Summary Adjudication (Catellus), filed on December 5, 2012, -6- 1162.006// MEMORANDUM OF POINTS AND AUTHORITIES FOR MOTION TO STRIKE THIRD AMENDED COMPLAINT HKS' INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF NOTICE OF MOTION TO STRIKE PORTIONS OF THE THIRD AMENDED COMPLAINTThis material was buttressed by further expansive and detailed factual recitals in the Plaintiff's Opposition to the Motion for Summary Adjudication and elsewhere [See e.g. RUN No. 4 - Plaintiff's Opposition, at pgs. 3 - 10], not to mention the evidentiary submissions made and deposition transcripts provided. Much of this testimony was referenced in the order denying the motion for summary adjudication by Mission Place [Request to Take Judicial Notice, No. 3, pg. 2 (4-18)] A MOTION TO STRIKE IS PROPER HERE Code of Civil Procedure §435 permits a motion to strike to be brought as fo the complaint, in whole or in any part, within the time allowed by law to answer. Code of Civil Procedure §436 separately permits a motion to strike to be brought at any time, in the Court's discretion, and directed to “any irrelevant, false, or improper matter inserted in any pleading." “{U]nder section 436, a court at any time may, in its discretion, strike portions of a complaint that are irrelevant.” Quiroz v. Seventh Ave. Center (2006) 140 Cal App.4th 1256, 1281. In tum, Code of Civil Procedure §431.10 defines “immaterial” and “irrelevant” allegations as including “an allegation that is neither pertinent to nor supported by an otherwise sufficient claim or defense” and “a demand for judgment requesting relief not supported by the allegations of the complaint or cross-complaint’, both of which apply here. “Te 1162.006// MEMORANDUM OF POINTS AND AUTHORITIES FOR MOTION TO STRIKE THIRD AMENDED COMPLAINT HKS' INC,'S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF NOTICE OF MOTION TO STRIKE PORTIONS OF THE THIRD AMENDED COMPLAINTWV INASMUCH AS THE PLAINTIFF CONTENDS IN THE THIRD AMENDED COMPLAINT AND IN OTHER ENASMIUYR Ag TE PLAINTIPY VN EN ae eee ee FILINGS WITH THIS COURT THAT THE “HEAT GAIN”/VENTILATION ISSUES WERE KNOWN TO THE SELLER PRIOR TO THE SALE, IT LACKS STANDING OR RIGHT TO ASSERT THE SAME AGAINST HKS itis now established that, whether viewed as a matter of “ownership” of a cause of action, “standing” or “accrual”, the owner at the time a problem first manifests itself is the only person or entity that can bring suit on the same. In other words, “[W]hen an owner of a building suffers harm because of inadequate design of, or engineering or construction work performed on a building, a cause of action accrues to the owner’ [Krusiy, S.J. Amoroso Construction Co, (2000) 81 Cal App.4th 995, 1005]. In Krusi, the plaintiffs bought an eight-year-old commercial building. Prior to the sale, the seller had received tenant complaints that the building leaked [/d. at 997-998, 1007 at fn. 8]. The seller believed that this issue (and others) had been rectified or were limited in scope, and did not disclose the same to the buyer [/d.] After the sale, the leaking continued, and even worsened [Id]. Contractors retained by the buyer reported that the leaks and flooring problems were caused by defects in the building's design and construction and that the defects would not be evident without an invasive Inspection or reasonably known to a layperson at the time of sale [/d.]. The plaintiff buyers then brought suit against the architects and general contractors, who moved for and secured summary judgment. In affirming the judgment, the Court of Appeal noted that even though the lack of contractual privity with the architects might not be an impediment fo suit {Id. at 1005], the accrual/standing issue separately barred the claim: {tis clear that a cause of action for damage to real property accrues when the defendant's act causes “immediate and permanent injury’ to the property or, to put it another way, when there is ‘actual and appreciable harm’ to the property... This rule is, of course, simply a corollary of the general rule regarding accrual of causes of action. [Citation] We are aware of no reason why it should not apply ... to actions alleging negligence in the design, -8- 1162.006// MEMORANDUM OF POINTS AND AUTHORITIES FOR MOTION TO STRIKE THIRD AMENDED COMPLAINT HKS' INC.’'S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF NOTICE OF MOTION TO STRIKE PORTIONS OF THE THIRD AMENDED COMPLAINTengineering or construction of buildings. Thus, if, as, and when an owner of a building suffers harm because of inadequate design of, or engineering or construction work performed on a building, a cause of action accrues to that owner. To be sure, it may choose to deliberately transfer that cause of action to another, but without some clear manifestation of such an intention, the cause of action is not transferred to a subsequent owner. [Krusi (supra) at pg. 1005] Krusi makes clear that once a cause of action for property damage arises in favor of a property owner, another cause of action against the same defendant does not accrue fo a subsequent purchase although completely different and unrelated claims which had not previously surfaced might still be made: Itdoes not mean that, in a case implicating damage to such property, once a cause of action in favor of a prior owner accrues, ancther cause of action against the same defendant or defendants can accrue to a subsequent property owner— unless, of course, the damage suffered by that subsequent owner is fundameritally different from the earlier type. Thus, if owner number one has an obviously leaky roof and suffers damage to its building on account thereof, a cause of action accrues to it against the defendant or defendants whose deficient design or construction work caused the defect. But, if that condition goes essentially unremedied over a period of years, owners two and three of the same building have no such right of action against those defendants, unless such was explicitly (and properly) transferred to them by owner number one. But owners two and three could well have a cause of action against those same defendants for, e.g., damage caused by an earthquake if it could be shown that inadequate seismic safeguards were designed and constructed into the building. Such is, patently, a new and different cause of action. [Krusi, supra, 81 Cal.App.4th at p. 1006] Because it was undisputed that the prior owner knew about the leaks and damaged subflooring before the sale, the negligence claim accrued to the building's prior owners, not the subsequent buyers. Similarly, Plaintiff contends that knowledge of the condition ~ indeed, extensive investigation into it, and even remedial measures undertaken - existed prior to the sale Siegel v. Anderson Homes, inc. (2004) 118 Cai.App.4th 994, 1009, states the relevant rule in slightly different terms: a “cause of action belongs to the owner who first discovered, or ought to have discovered, the property damage.” In Siegel, the purchaser of a home had a cause of action against the builder where the home sustained structural damage before the original owner sold it to the plaintiff, but the damage was neither discovered nor reasonably discoverable until after the sale (/d. at 996]. After making an exhaustive analysis of Krusi and its predecessors, the court concluded that a “cause of action belongs to the owner who first discovered, or ought to have discovered, the property damage. It is only then that -9- 1162.006// MEMORANDUM OF POINTS AND AUTHORITIES FOR MOTION TO STRIKE THIRD AMENDED COMPLAINT HKS' INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF NOTICE OF MOTION TO STRIKE PORTIONS OF THE THIRD AMENDED COMPLAINTsome entity capable of maintaining a legal claim will have suffered a compensable injury, e.g, the cost of repair and/or the loss in the property's value (inasmuch as the owner has a duty to disclose the damage to potential buyers).’[/d. at p. 1009]. Here, itis undisputed that Plaintiff contends - and had repeatedly asserted in numerous documents filed with the Court - that the sellers were well aware of the heat/ventilation issues. Plaintiff contends that not only did the sellers have actual, persona/ knowledge of this (the management owned and occupied units, as did the sellers’ principals), but that tenants had circulated petitions about the matter, the “heat gain’/ventilation claims were discussed at length between the developer/seller entities prior to putting the units on the market, testing had been done, remedial measures were attempted, and a disclosure statement was crafted for the unit purchasers, in an attempt to shield the sellers from liability. Clearly, the sellers were aware of the issues on which suit has now been brought, and they - and not subsequent purchasers (or a homeowners association composed of those purchasers) ~ have standing/ownership/accrual of the cause of action and claims. Itis the sellers which have the right to pursue the matter against third parties — not the Plaintiff. As such, the motion to strike ought to be granted in its entirety and Plaintiff ordered to amend the complaint to delete any allegations in this regard against HKS. DATED: September 2, 2014 SCHWARTZ & JANZEN, LLP AttomeyS for Defendant and Cross-Defendant, HKS, INC, -10- 1162.006// MEMORANDUM OF POINTS AND AUTHORITIES FOR MOTION TO STRIKE THIRD AMENDED COMPLAINT HKS' INC'S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF NOTICE OF MOTION TO STRIKE PORTIONS OF THE THIRD AMENDED COMPLAINTOC me ND mH Rw ON PROOF OF SERVICE STATE OF CALIFORNIA ) ) ss. COUNTY OF SAN FRANCISCO } BEACON RESIDENTIAL COMMUNITY ASSOCIATION y, CATELLUS THIRD AND KING LLC, et al. San Francisco Superior Court Case No: CGC 08-478453 |, Annette Tucker declare: | am a resident of the State of California and over the age of eighteen years, and not a party fo the within action; my business address is 12100 Wilshire Boulevard, Suite 1125, Los Angeles, CA 90025-7117. On September 3, 2014, | served the within document(s}: HKS’ INC.’S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF NOTICE OF MOTION TO STRIKE PORTIONS OF THE THIRD AMENDED COMPLAINT [NOTICE OF MOTION TO STRIKE PORTIONS OF THE THIRD AMENDED COMPLAINT, REQUEST TO TAKE JUDICIAL NOTICE CONCURRENTLY FILED HEREWITH] >< {FILE &SERVE XPRESS) | caused such document(s) to be electronically served through the Court Link System for the above-entitled matter. This service complies with Code of Civil Procedure §1010. The file transmission was reported as complete and a copy of the “Justice Link Filing Receipt" page will be maintained with the original document(s) in our office. Executed on September 3, 2014, at Los Angeles, California | declare under penalty of perjury under the laws of the State of California that the foregoing is true () Uh vote Affelte Tucker 1 PROOF OF SERVICESERVICE LIST BEACON RESIDENTIAL COMMUNITY ASSOCIATION v. CATELLUS THIRD AND KING LLC, et al. San Francisco Superior Court Case No: CGC 08-478453 Ann Rankin, Esq. Terry Wilkens, Esq. LAW OFFICES OF ANN RANKIN 3911 Harrison St Oakland, CA 94611-4536 Phone Number (510) 653-8886 Fax Number (510) 653-8889 arankin@annrankin.com twikkens@annrankin.com Attomeys for Plaintiff BEACON RESIDENTIAL COMMUNITY ASSOCIATION Kenneth Katzoff, Esq. Robert R. Riggs, Esq. Sung E. Shim, Esq. KATZOFF & RIGGS 41500 Park Ave #300 Emeryville, CA 94608 Phone Number (510) 597-1990 Fax Number (510) 597-0295 kkatzof@kaizoffrigas.com tiggs@katzoffriqgs.com sshim@kaizoffriggs.com Attomeys for Plaintiff BEACON RESIDENTIAL COMMUNITY ASSOCIATION John A. Koeppel, Esq. Todd J. Wenzel, Esq. ROPERS, MAJESK!, KOHN & BENTLEY PC 201 Spear Street, Suite 1000 San Francisco + CA + 94105-1667 Office: (415) 543-4800 Fax: (415) 972-6301 TWenzel@mkb.com JKoeppei@mkb.com Attorneys for Defendants PROLOGIS; THIRD AND KING INVESTORS LLC; CATELLUS URBAN DEVELOPMENT CORPORATION; CATELLUS DEVELOPMENT CORPORATION, CATELLUS THIRD AND KING INVESTORS LLC; CATELLUS COMMERCIAL DEVELOPMENT CORPORATION; CATELLUS OPERATING LIMITED PARTNERSHIP Steven M. Cvitanovic, Esq. Zachary W. Shine, Esq. HAIGHT, BROWN & BONESTEEL 714 Stevenson Street, 20th Floor San Francisco, CA 94105-2981 (415) 546-7500/FAX (415) 546-7505 scvitanovic@hbblaw.com Co-Counsel for Defendants MISSION PLACE LLC; CENTURION REAL ESTATE PARTNERS, LLC; MISSION PLACE MEZZ HOLDINGS LLC, erroneously named as MISSION PLACE HOLDINGS LLC; MISSION PLACE MEZZANINE, LLC; and MISSION PLACE PARTNERS, LLC, Steven E. McDonald, Esq. smedonald@bledsoelaw.com James L. Shea BLEDSOE, CATHCART, DIESTEL, PEDERSEN & TREPPA, LLP 601 California Street - 16" Floor San Francisco, CA 94108 Tel: 415/981-5411 Fax: 415/981-0352 Attorneys for Defendant and Cross-Complainant SHOOTER & BUTTS, INC David S. Webster, Esq. Mark J. D’Argenio, Esq. WOOD, SMITH, HENNING & BERMAN LLP 1401 Willow Pass Road, Suite 700 Concord, CA 94520-7982 (925) 356-8200/FAX (925) 356-8250 Email: dwebster@wshblaw.com mdargenio@wshblaw.com Attomeys for Defendants PROLOGIS; THIRD AND KING INVESTORS LLC; CATELLUS URBAN DEVELOPMENT CORPORATION; CATELLUS DEVELOPMENT CORPORATION, CATELLUS THIRD AND KING INVESTORS LLC; CATELLUS COMMERCIAL DEVELOPMENT CORPORATION; CATELLUS OPERATING LIMITED PARTNERSHIP SERVICE LISTOo Oo ND S. Mitchell Kaplan, Esq. Gregory Hanson, Esq. GORDON & REES LLP 275 Battery Street, Suite 2000 San Francisco, CA 94111 Main Phone: (415) 986-5900 Fax: (415) 986-8054 SKaplan@gordonrees.com ghanson@gordonrees.com Attorneys for WEBCOR Builders, INC.; WEBCOR CONSTRUCTION, INC., individually and dba WEBCOR BUILDERS; WEBCOR CONSTRUCTION LP, individually and dba WEBCOR BUILDERS Samuel J. Muir, Esq. Erin R. Dunkerly, Esq. COLLINS COLLINS MUIR + STEWART LLP 1100 El Centro Street South Pasadena, CA 91030 smuir@ccmslaw.com edunkeriy@ccmslaw.com Tel: 626/243-1100 Fax: 626/243-1111 Attorneys for Defendant WEBCOR CONSTRUCTION, INC. dba WEBCOR BUILDERS Christopher T. Olsen, Esq. Mark Brueggemann Scott Cloud CLINTON & CLINTON 100 Oceangate - Suite 1400 Long Beach, CA 90802 Direct: 562/216-5078 Tel: 562-16-5078 Fax: 562/216-5001 Email! colsen@clinton-clinton.com scloud@eclinton-clinton.com mbrueggemann@clinton-clinton.com Attomeys for THYSSENKRUPP ELEVATOR CORPORATION Kevin P. McCarthy, Esq. Philip T. Bazzano, Esq. Grace Koss, Esq. Fred Trudeau, Esq. MCCARTHY & MCCARTHY, LLP 492 Ninth St, Suite 220 Oakland, CA 94607 Telephone: 510-839-8100 Facsimile: 510-839-8108 kmocarthy@mecarthylip.com pbazzano@mecarthyllp.com gkoss@mecarthyllp.com FTrudeau@McCarthyLLP.com Attorneys for WINDOW SOLUTIONS. William H. Staples ARCHER NORRIS 2033 North Main Street, Suite 800 Walnut Creek, CA 94596 main 925.930.6600 fax 925.930.6620 wstaples@archemorris.com dduncan@archerorris.com Attomeys for ANNING-JOHNSON COMPANY Christian Lucia, Esq. Denae M, Olivieri, Esq. Bruce Basilico, Esq. SELLAR HAZARD & LUCIA 1800 Sutter Street, Suite 460 Concord, CA 94520 clucia@sellarlaw.com dolivien@sellaraw.com Tel (925) 938-1430 Fax (925) 256-7508 Randeil |. Campbell, Esq. Arif Virgi, Esq. LYNCH, GILARD! & GRUMMER 170 Columbus Avenue, 5th Floor San Francisco, CA 94133 Tel: (415) 397-2800 Fax: (415) 397-0937 icampbell@igglaw.com AVirjii@lgglaw.com Attorneys for ARCHITECTURAL GLASS & Attorneys for ALLIED FIRE PROTECTION, BLUE'S ROOFING COMPANY, CAREFREE TOLAND POOLS, INC., CREATIVE MASONRY, CRITCHFIELD MECHANICAL, INC., CUPERTINO ELECTRIC, F. RODGERS CORPORATION, J.W. MCCLENAHAN CO,, NV, HEATHORN, INC., VAN-MULDER SHEET METAL, INC., WEST COAST PROTECTIVE COATINGS, INC., and WESTERN ROOFING SERVICE 3 SERVICE LISTCON DR WH RR BH NY oo — oO ALUMINIUM CO. INC {name changed 02.11.13] James P. Castles Richard C. Young ROBLES CASTLES & MEREDITH 492 Ninth Street, Suite 200 Oakland, CA 94607 Tel: (415) 743-9300 Fax: (415) 743-9305 Email: jim@remlawgroup.com tick@rcmlawgroup.com Attomeys tor Skidmore Owings & Merrill LLP 4 SERVICE LIST