Motion-Secondary: BEACON RESIDENTIAL COMMUNITY ASSOCIATION VS. CATELLUS THIRD AND KING LLC et al

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                                JAMES PATRICK CASTLES (SBN 70414)
RICHARD C. YOUNG (SBN 215407) ELECTRONICALLY

ROBLES, CASTLES & MEREDITH LLP FILED

492 Ninth Street, Suite 200 Superior Court of California,

Oakland, CA 94607 County of San Francisco

Telephone: 415.743-9300 AUG 20 2014

Facsimile: 415.743-9305 Clerk of the Court
BY: MICHAEL RAYRAY

Attorneys for Defendant/Cross-Defendant Deputy Clerk:

SKIDMORE, OWINGS & MERRILL LLP

IN THE SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN FRANCISCO

BEACON RESIDENTIAL COMMUNITY CASE NO. CGC-08-478453
ASSOCIATION,

. SKIDMORE, OWINGS & MERRILL LLP’S
Plaintiff, MEMORANDUM IN SUPPORT OF ITS
RENEWED MOTION TO STRIKE PORTIONS
OF PLAINTIFF’S THIRD AMENDED

CATELLUS THIRD AND KING LLC, et al. | COMPLAINT

VS.

Defendants. DATE: September 19, 2014
TIME: 9:00 a.m.
JUDGE: Hon. Curtis E.A. Karnow
AND RELATED CROSS-ACTIONS DEPT: 304

MEMORANDUM OF POINTS AND AUTHORITIES

On October 5, 2011, Defendant SKIDMORE, OWINGS & MERRILL LLP (hereinafter
“SOM”) filed () a demurrer to plaintiff Beacon Residential Community Association’s Third Amended
Complaint (TAC), and (ii) a motion to strike portions of Plaintiff's TAC. The motion was fully briefed,
and on November 22, 2011, Judge Richard Kramer sustained the demurrer and denied the motion to
strike without prejudice. Appeals regarding the demurrer followed, and on August 11, 2014, remittitur
was filed in this court, reversing the sustaining of the demurrer. Accordingly, SOM renews its motion
to strike. Attached as Exhibit A is a copy of the original memorandum of points and authorities in

support of SOM’s motion to strike, filed on October 5, 2011.

DATED: August 20, 2014 ROBLES, CASTLES & MEREDITH LLP

By:

RICHARD C. YOUNG
Attorneys for Defendant/Cross-defendant
SKIDMORE, OWINGS & MERRILL LLP

1

SOM’s RENEWED MOTION TO STRIKE PORTIONS OF PLAINTIFF'S THIRD AMENDED COMPLAINTEXHIBIT ABRB WoL

MEMORANDUM OF POINTS AND AUTHORITIES
I
INTRODUCTION

This action has been brought by a condominium association, the Beacon Residential
Community Association (hereinafter “plaintiff’) against the developer, seller, general contractors,
subcontractors, real estate brokers and others alleged to have had some sort of involvement with the
project at issue here. SKIDMORE, OWINGS & MERRILL LLP (hereinafter “SOM”) is an
architectural firm, which provided design services to and for the developer of the condominium project
at issue here. Plaintiff alleges that the sellers of the units at project had actual knowledge of defects
concerning excessive heat gain and inadequate ventilation in the units (the “Overheating Conditions”),
and that the sellers unsuccessfully attempted to remediate these conditions before selling the units. In
its Third Amended Complaint (TAC), plaintiff seeks damages related to these conditions against SOM,
alleging that the conditions were caused by SOM’s negligence. But, under California law, a cause of
action alleging negligence in the design, engineering or construction of a building belongs to the owner
who first discovered, or ought to have discovered, the alleged defects. Because the sellers knew about
Overheating Conditions and were damaged before selling the units, only the sellers are able to pursue
claims against SOM related to creation of the Overheating Conditions. (Plaintiff alleges that the sellers
failed to reveal and suppressed material facts related to the Overheating Conditions, so plaintiff’s sole
avenue for recourse is against the sellers for concealment.) Accordingly, there is no valid basis for
plaintiff’s claims against SOM concerning the Overheating Conditions, which renders them
“irrelevant” pursuant to Civil Procedure (CCP) section 431.10. Because plaintiff is not entitled to the
damages sought against SOM, SOM respectfully requests that its motion be granted.

Th.
LEGAL PRINCIPLES REGARDING A MOTION TO STRIKE

California Code of Civil Procedure (CCP) section 431.10 provides in part:

(b) An immaterial allegation in a pleading is any of the following:

(1) An allegation that is not essential to the statement of a claim or defense.

3
SOM’s MOTION TO STRIKE PORTIONS OF PLAINTIFF'S THIRD AMENDED COMPLAINT(2) An allegation that is neither pertinent to nor supported by an otherwise sufficient
claim or defense.

(3) A demand for judgment requesting relief not supported by the allegations of the
complaint or cross-complaint.

(c) An “immaterial allegation” means “irrelevant matter” as that term is used in
Section 436,

CCP section 436 enables a court to, “upon a motion ... or at any time in its discretion, ... [s]trike
out any irrelevant, false, or improper matter inserted in any pleading.” CCP § 436(a). “[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.

Hit.
SUMMARY OF RELEVANT PLEADINGS AND STATEMENT OF FACTS

Plaintiff’s TAC asserts three causes of action against SOM: (i) The First Cause of Action,
entitled, “Civil Code Title 7 ~ Violation of Statutory Building Standards for Original Construction
Civil Code Sections 895 et seq”; (ii) The Second Cause of Action, entitled, “Negligence Per Se for
Violation of Statute”; and (ii) The Fifth Cause of Action, entitled, “Negligence of Design
Professionals and Constructors.”

The following are allegations in plaintiffs TAC, which SOM accepts as true for purposes of
this Motion to Strike.

SOM is an architectural firm, which provided design services to and for the developer of the
condominium project at issue here. (See e.g., First Amended Complaint, {J 39(d), 80 and 84.)
Defendants “’PROLOGIS/CATELLUS” (see { 32) and “MISSION PLACE, LLC,” (see J 33)

collectively the “Sellers”);

[a]t 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] 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

4
SOM’s MOTION TO STRIKE PORTIONS OF PLAINTIFF’ S THIRD AMENDED COMPLAINThaving defendant WINDOW SOLUTIONS... install a “film” inside a substantial namber
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, are 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. (TAC, 1 116, page 53, line 5 -
page 54, line 1.)

Iv.
PART OF THE JUDGMENT SOUGHT BY PLAINTIFF AGAINST SOM IS NOT
SUPPORTED BY THE ALLEGATIONS OF THE TAC AND SHOULD BE STRICKEN

A. Only The Sellers are Able to Pursue Claims against SOM related to Creation of the
Overheating Conditions

1. A cause of action alleging inadequate design, engineering or construction of a

building belongs to the owner who was first damaged or who first discovered, or
ought to have discovered, the alleged defects

“fWyhen 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.” Krusi y. SJ.
Amoroso Construction Co. (2000) 81 Cal.App.4th 995, 1005. The plaintiffs there bought an eight-year-
old commercial building. The seller knew the building had leaked persistently over the years, but
believed the leaks had been repaired. (Krusi, supra, 81 Cal.App.4th at p. 997.) The seller also knew
that gypsum subflooring on the second floor was deteriorating, but said that it, too, had been repaired
before the sale. The leaks increased in frequency and magnitude after the building was sold.
Contractors retained by the buyer reported that the leaks and flooring problems were caused by defects
in the building's design and construction. One opined that the defects were not evident without an
invasive inspection and would not be apparent to a layperson. An engineer reported that various
flooring materials in the building had been damaged because of the deteriorating gypsum subflooring.
The buyers sued the building's architects and contractors. (Jd. at p. 998.) In affirming summary

judgment in favor of the defendants, the appellate court explained:

It is 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 afe aware of no reason why it should not apply ... to actions alleging negligence in

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SOM’s MOTION TO STRIKE PORTIONS OF PLAINTIFF’S THIRD AMENDED COMPLAINTCm WD A BR

the design, engineering or construction of buildings. [4] 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. (/d. at p. 1005.)

Krusi makes clear that once a cause of action for property damage arises in favor of a propert:

owner, another cause of action against the same defendant does not accrue to a subsequent purchaser:

unless, of course, the damage suffered by that subsequent owner is fundamentally
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.

Siegel v. Anderson Homes, Inc. (2004) 118 Cal. 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 some 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.)

2. The Sellers discovered and were damaged by the Overheating Conditions

Plaintiff’ s claims against SOM are based on design and construction defects that caused
significant damage while the Sellers owned the Units. (TAC, {| 116, page 53, lines 5-16.) Repairs were
attempted that actually worsened the problems. (/d. at lines 16-23.) In short, the allegations of the TAC

establish that the Sellers were aware of and damaged by the significant Overheating Conditions during

6

SOM’s MOTION TO STRIKE PORTIONS OF PLAINTIFF'S THIRD AMENDED COMPLAINTOo Om YN DA WH RB BW HY =

PN YP PW RN NR Dow me ee Be oe on
& SS & EBS BF SF SBE ARAE BRAS

their ownership.

3. Claims against SOM for creation of the Overheating Conditions belong only to the
Sellers

The three causes of action in the TAC asserted against SOM all rely on allegations of
inadequate design against SOM. The First Cause of Action asserts SB 800 violations. Civil Code § 936
provides that “Each and every provision of the other chapters of this title apply to ...design
professionals to the extent that the ... design professionals caused, in whole or in part, a violation of a
particular standard as the result of a negligent act or omission or a breach of contract.” Accordingly,
plaintiff's SB 800 claim requires a negligent act or omission or a breach of contract in order to
establish liability against SOM. Plaintiff's Second Cause of Action for Negligence Per Se and Fifth
Cause of Action inherently assert negligence claims.

Accordingly, Krusi and Seigel are dispositive here: the cause of action against SOM for the
Overheating Conditions caused by design defects vested in the Sellers during their ownership. “[WJhen
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.” Krusi, supra, 81 Cal. App.4th
at 1005. “[T]he cause of action belongs to the owner who first discovered, or ought to have discovered,
the property damage. It is only then that some 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...” (Siegel,
supra, 118 Cal.App.4th at 1009; see also Mills y. Forestex Co. (2003) 108 Cal. App.4th 625, 648-650
[attempts to repair warped siding evidenced that damage was sufficiently appreciable that owners were

on inquiry notice and cause of action accrued].)

B. Because Plaintiff is Not Entitled to the Damages Sought Against SOM Regarding the
Overheating Conditions, These Claims Are Irrelevant and Subject to a Motion To Strike

As explained above, there is no valid basis for plaintiffs claims against SOM concerning the
Overheating Conditions. Accordingly, these claims are “[a] demand for judgment requesting relief not
supported by the allegations of the complaint” and thus “irrelevant” pursuant to CCP section 431.10
subsections (b)(3) and (c). CCP section 436 enables a court to, “upon a motion ... or at any time in its
discretion, ... [s]trike out any irrelevant ... matter inserted in any pleading.” CCP § 436(a).

MW

7
SOM’s MOTION TO STRIKE PORTIONS OF PLAINTIFF’S THIRD AMENDED COMPLAINTVv.
CONCLUSION
For the reasons stated above, SOM respectfully that its Motion to Strike be granted, and that
plaintiff be ordered to amend its pleadings to remove any such claims for damage with respect to SOM
concerning concerning excessive heat gain, inadequate ventilation, and lack of compliance with

California Code of regulations, Title 24, as found in the First, Second and Fifth Causes of Action.

DATED: October 5, 2011 ROBLES, CASTLES & MEREDITH LLP

Retard Mowup,

RICHARD C, YOUNG
Attorneys for Defendant/Cross-defendant
SKIDMORE, OWINGS & MERRILL LLP

By:

8

SOM’s MOTION TO STRIKE PORTIONS OF PLAINTIFF'S THIRD AMENDED COMPLAINTPROOF OF SERVICE

J am a resident of the State of California, over the age of eighteen years, and not a party to the
within action. My business address is Robles, Castles & Meredith LLP, 492 Ninth St., Suite 200,

Oakland, CA, 94607. On August 20, 2014, I served the following documents:

SKIDMORE, OWINGS & MERRILL LLP’S NOTICE OF RENEWED MOTION AND
RENEWED MOTION TO STRIKE PORTIONS OF PLAINTIFF’S THIRD AMENDED
COMPLAINT; MEMORANDUM IN SUPPORT

service list.

By transmitting on this date before 5:00 p.m. via File and Serve Xpress the
x document(s) listed above to all parties/attorneys listed on the File and Serve Xpress

I declare under penalty of perjury under the laws of the State of California that the above is true

and correct and that this declaration is executed on August 20, 2014 at Oakland , California.

Retard ows.

Richard C. Young

SERVICE LIST
Ann Rankin, Esq. Kenneth Katzoff
Terry Wilkens, Esq. Sung E Shim, Esq.
LAW OFFICES OF ANN RANKIN KATZOFF & RIGGS
3911 Harrison St 1500 Park Ave #300

Oakland, CA 94611-4536
Phone Number (510) 653-8886
Fax Number (510) 653-8889
arankin@annrankin.com
twilkens@annrankin.com

Attorneys for Plaintiff BEACON

Emeryville, CA 94608
Phone Number (510) 597-1990
Fax Number (510) 597-0295

kkatzoff@katzoffriges.com

sshim@katzoffriggs.com

Attorneys for Plaintiff BEACON

WENDEL, ROSEN, BLACK & DEAN
1111 Broadway, 24" Floor

Oakland, CA 94607-4036

(510) 834-6600/FAX (510) 834-1928
plaufenberg@wendel.com
GJung@wendel.com

Attomeys 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.

RESIDENTIAL COMMUNITY RESIDENTIAL COMMUNITY
ASSOCIATION ASSOCIATION
Charles A Hansen, Esq. Steven M. Cvitanovic, Esq.

HAIGHT, BROWN & BONESTEEL
71 Stevenson Street, 20th Floor
San Francisco, CA 94105-2981
(415) 546-7500/FAX (415) 546-7505

sevitanovie@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.

John A. Koeppel, Esq.
Devin C Courteau, Esq.

David S. Webster, Esq.
Mark J. D’Argenio, Esq.

1
POSKathleen Strickland, Esq.

ROPERS, MAJESKI, KOHN & BENTLEY
Pi

201 Spear Street, Suite 1000

San Francisco + CA * 94105-1667

Office: (415) 543-4800

Fax: (415) 972-6301

JKoeppel@mkb.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

Stacey F Blank, Esq.

WOOD, SMITH, HENNING & BERMAN
LLP

1401 Willow Pass Road, Suite 700
Concord, CA. 94520-7982

(925) 222-3400/F AX (925) 222-3250
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

Sandy 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@zgordonrees.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

Steven H. Schwartz, Esq.

Noel Macaulay, Esq.

SCHWARTZ & JANZEN

12100 Wilshire Boulevard, Suite 1125
Los Angeles, CA 90025

(310) 979-4090/FAX (310) 207-3344
sschwartz@sj-law.com
tmatteson@sj-law.com
nmacaulay@sj-law.com

Attorneys for Defendants HKS, INC., HKS
ARCHITECTS, INC., HKS, INC.,
individually and doing business as HKS
ARCHITECTS, INC.

William H. Staples

ARCHER NORRIS

2033 North Main Street, Suite 800
Walnut Creek, CA 94596

main 925.930.6600

fax 925.930.6620
wstaples@archermorris.com
Attomeys for ANNING-JOHNSON,
COMPANY

Kevin P. McCarthy, Esq.

Philip T Bazzano, Esq.
MCCARTHY & MCCARTHY, LLP
492 Ninth St, Suite 220

Oakland, CA 94607

Telephone: 510-839-8100

Facsimile: 510-839-8108

kmecarthy@mecarthyllp.com
Attorneys for WINDOW SOLUTIONS

Samuel J Muir, Esq. Christian Lucia, Esq.

Erin R Dunkerly, Esq. Brent F Basilico, Esq.

CCM+58 South Pasadena SELLAR HAZARD MANNING FICENEC
1100 El Centro Street & LUCIA

South Pasadena, CA 91030 1800 Sutter Street, Suite 460

T 626-243-1100
F 626-243-1111

smuir@ccmslaw.com

edunkerly@ccmslaw.com
Attomeys for Attorneys for WEBCOR

Builders, INC., WEBCOR
CONSTRUCTION, INC., individually and
dba WEBCOR BUILDERS; WEBCOR

Concord, CA 94520
clucia@sellarlaw.com

dolivieri@sellarlaw.com
Tel (925) 938-1430

Fax (925) 256-7508

Attorneys for
ALLIED FIRE PROTECTION, BLUE'S

2

POSCONSTRUCTION LP, individually and dba
WEBCOR BUILDERS

ROOFING COMPANY, CAREFREE
TOLAND POOLS, INC., CREATIVE
MASONRY, CRITCHFIELD
MECHANICAL, INC., CUPERTINO
ELECTRIC, F. RODGERS
CORPORATION, J.W. MCCLENAHAN
CO., N.V. HEATHORN, INC., VAN-
MULDER SHEET METAL, INC., WEST
COAST PROTECTIVE COATINGS, INC.,
and WESTERN ROOFING SERVICE

Randell J. Campbell, Esq.

LYNCH, GILARDI & GRUMMER.
170 Columbus Avenue, Sth Floor
San Francisco, CA 94133

Tel: (415) 397-2800

Fax: (415) 397-0937
rcampbell@lgglaw.com

Attorneys for ARCHITECTURAL GLASS &
ALUMINIUM CO. INC

Steven E. McDonald, Esq.

James L. Shea, Esq.

BLEDSOE, CATHCART, DIESTEL,
PEDERSEN, & TREPPA LLP

601 California Street, 16th Floor

San Francisco, CA 94108

(415) 981-5411 F: (415) 981-0352

smedonald@pbledsoelaw.com;
vsoriano(@bledsoelaw.com;

‘Vanessa: Assistant
Attorneys for SHOOTER & BUTTS, INC.

Mark Brueggemann, Esq.

Scott Cloud, Esq.

Clinton & Clinton

100 Oceangate, Suite 1400

[Long Beach, CA 90802

‘Telephone: (562) 216-5000
Facsimile:(562) 216-5001
imbrueggemann(@clinton-clinton.com

scloud@clinton-clinton.com

\Attomeys for Thyssenkrupp Elevator Corp

POS