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SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN FRANCISCO
Document Scanning Lead Sheet
Oct-02-2008 11:16 am
Case Number: CGC-08-479247
Filing Date: Oct-01-2008 11:13
Juke Box: 001 Image: 02270752
CROSS COMPLAINT
WAYNE DERMAN VS. M.KARKORI CONSTRUCTION, INC., APURPORATED et al
001002270752
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GEORGE WILLIAM WOLFF (81126)
The Law Office of George W. Wolff
655 Montgomery Street, suite 1050
P.O. Box 26749
San Francisco, CA 94126-6749
Telephone(415) 788-1881
Telecopier: (415)788-0880
GORDON PARK-LI, Clerk
Attorneys for Cross-Complainant/Petitioner M. Karkori Constructidff a tenn
IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
IN AND FOR THE COUNTY OF SAN FRANCISCO
Wayne Derman, an individual
Plaintiff,
vs -
M. Karkori Construction Inc, a California
Corporation; Mostafa Karkori, an individual, et al.
Defendants.
M. Karkori Construction, Inc.,
a California Corporation
Cross-Complainant/Petitioner,
v
Wayne Derman, an individual, First Tennessee
Bank N.A., doing business as First Horizon Home
Loans, aka First Horizon Construction Lending,
and Does 1 through 1000, inclusive
Cross-Defendants
Cross-Complainant/Petitioner M. Karkori Construction, Inc., complains and petitions as follows:
1. M. Karkori Construction, Inc., is and for all times relevant hereto was a California
corporation in good standing and a licensed general building and engineering contractor in this state
o
San Francisco County Superior Cour
OCT 01 2008
Depay Giork
NO, CGC-08-479247
FIRST AMENDED CROSS-
COMPLAINT
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(Cross-Complainanv/Petitioner is sometimes hereinafter referred to as "BUILDER"). ~
2. Defendant Wayne Derman (Said person or entity is hereinafter referred to as
"OWNER'") is an individual who is reputed to be the owner; and for all times relevant hereto owned
or held itself out as the owner of, the land and real property and buildings at 51 Surrey Street, San
Francisco CA (hereinafter referred to as the REAL PROPERTY).
3. Cross-Defendant FIRST HORIZON HOME LOANS, AKA FIRST HORIZON CONSTRUCTION
LENDING, (hereinafter “LENDER” is believed to bea business organization of unknown form with
its principal place of business in Tennessee but which is believed to regularly transact business and
make and collect on loans to persons and on properties located within the State of California.
4, Cross-Defendant Does 1 to 100, inclusive, are persons whose identity or
involvement or whose commission, authorization or direction of acts hereinafter alleged are
presently unknown to Cross-Complainant/Petitioner, but who are believed to be the principals,
agents, or other alter egos of OWNER, or are persons who are otherwise responsible for Cross-
Complainant/Petitioner’s damages as alleged herein. When their true names become known to
Cross-Complainant/Petitioner, Cross-Complainant/Petitioner will amend the Complaint to substitute
their true names in stead of said fictitious names.
5. Cross-Defendant Does 101 through 1000, inclusive, are persons whose identity
is presently unknown to Cross-Complainant/Petitioner, but who are believed to be lenders,
beneficiaries, or other persons who claim some right, title, estate or interest in the REAL
PROPERTY which is the subject of this action. When their true names become known to Cross-
Complainant/Petitioner, Cross-Complainant/Petitioner will amend the complaint to substitute their
true names for said fictitious names.
(Breach of Conmact aanate Ouner Dees 1 to 1000)
6. BUILDER realleges and incorporates by reference as though fully set
forth herein, the allegations of previous paragraphs 1 to 4, inclusive.
7 Tn or about 2006 OWNER orally requested that BUILDER provide a rough estimate
of for building a new building for him and BUILDER did so.
-2- First Amend Cross-COMPLAINT8. Then later on about January 2007 OWNER and BUILDER entered into a
construction contract (“CONTRACT’) with owner for the construction of new structures on the
REAL PROPERTY.
9. Except as provided in or excused by the breaches and abandonment of this
CONTRACT by the OWNER , BUILDER has performed or substantially performed all things on
its part required to be performed under the CONTRACTs and all changes and amendments thereto.
10. During the progress of the job, it is believed and thereupon alleged that OWNER
and Defendants breached the CONTRACT, inter alia, in the following respects:
(a) failed to provide coordinated, clear, intelligible and buildable plans and
specifications for the construction work to be performed by BUILDER or to
have an architect to provide competent construction administration and
information;
(b) _ failed to provide spotted survey and directions describing legal limitations
and utility locations or legal descriptions of the project site, including but not
limited easement locations, terms and limitations and property lines and all
encroachments, and instructions and plans and directions for dealing with
such;
(c) failed to maintaina competent licensed architect as owners representative for
the performance on design, construction supervision, contract administration
and construction phase services on the property as required by the
CONTRACT, and do so in a competent or timely manner;
(d) ordered BUILDER to perform extra work and changes to the work without
written change orders and without providing full or buildable directions,
plans and specifications for such work;
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ordered work in addition to the original work without first signing change
orders therefore;
abandoned the written CONTRACT by the making of numerous and
excessive changes and additions to the Work and the other acts alleged
herein, many without written change order or change directives, and without
providing BUILDER full, adequate or any plans, direction or consideration
for most of such;
issued instructions, changes and directives for work and extra work to
BUILDER’s subcontractors without passing those communications through
the BUILDER, as required by the CONTRACT, and instructed such
subcontractors not to communicate or share job information and changes with
CONTRACT under threats of suit and non-payment;
retained, orinstructed BUILDER to retain, other subcontractors of OWNER’s
choosing who interfered with and who delayed or disrupted BUILDER’s
work;
demanded that BUILDER, under duress and threat of termination, consent to
the disbursement by LENDER of construction loan progress payments
directly to OWNER and then diverted and used such proceeds for purposes
other than to BUILDER or to pay for construction work on the job;
attempted to place restrictions on which of BUILDER’s personnel could
work on or have access to the work site or the REAL PROPERTY;
threatened, insulted and harassed and attempted to personally direct
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BUILDER’s agents, officer or employees as to the details of the work and ;
failed to pay BUILDER timely for the original work and extra work even
though BUILDER’s applications for payment had been approved by the
LENDER based on the extent of completion;
demanded that BUILDER provide additional accounting work and
information beyond the requirements of the CONTRACT for his own use and
as an additional precondition to making further payments;
made payments directly to or is believed to have hired certain unknown
subcontractors of BUILDER without informing BUILDER of the payments
, and hired his own subcontractors in order to exert personal control and
direction over the work of the subcontractors, and which conduct interfered
with and impeded BUILDER’s work;
libeled and slandered BUILDER to its subcontractors and third parties in an
attempt to interfere and which did interfere with BUILDER’s relationships
with those third persons and subcontractors and others and prospective
economic advantage;
directly hired certain subcontractors without BUILDER’s express or implied
permission , and interfered with BUILDER’s contacts with such persons or
entities and the prospective economic advantages and benefits inherent
therein.
by such and other conduct prevented BUILDER from completing work on the
CONTRACT, as amended, and the project.
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(r) _ refused toallow BUILDER to complete the job or correct alleged deficiencies
in the work, prevented BUILDER from entering the REAL PROPERTY,
stopped the work, wrongfully terminated BUILDER and hired others to
complete the CONTRACT and other work on the REAL PROPERTY
(s) __ failed to pay BUILDER timely for the original work and extra work even
though BUILDER’ s applications for payment had been approved and released
by the LENDER and diverted and took such monies for himself and for
purposes other than to pay for BUILDER’s construction work, yet continued
to apply for and receive progress payment disbursements from LENDER for
BUILDER’s work;
11. Asa direct and proximate result of the said breaches by OWNER of the
Prime CONTRACT between OWNER and BUILDER, Cross-Complainant/Petitioner incurred
additional costs, and the progress and final payments to BUILDER were unreasonably delayed, and
BUILDER has lost income, interest and profits.
12, As a direct and proximate result of said breaches of CONTRACT, Cross-
Complainant/Petitioner has incurred damages of at least $$102,000.00 on the CONTRACT, or
according to proof.
13. The OWNER further breached its CONTRACT with BUILDER in that there remains
due and owing to BUILDER an unpaid balance on the contracts of at least $102,000.00 together
with interest and statutory late payment penalties thereon per Civil Code § 3260 et seq at the rate
of two (2) percent per month from March 15,2008 or the date due, until paid in full.
SECOND CAUSE OF ACTION .
(Quantum Meruit against Owner, Does 1 to 1000)
14, BUILDER realleges and incorporates by reference as though fully set
28 || forth hisein, the allegations of previous paragraphs 1 to 13, inclusive.
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15 OWNER, and persons who identified themselves as OWNER's authorized
agents and Does 1 to 1000 verbally requested and ordered under threats and duress BUILDER to
perform work on the REAL PROPERTY , and changes to the work and extra in addition to that in
the original CONTRACT, and expressly or impliedly to pay and promised to pay BUILDER
themselves the costs of each such area of work plus a reasonable percentage fee for Cross-
Complainant/Petitioners profit and overhead.
16. BUILDER, in good faith and in reasonable reliance on the above promises from
OWNER and its agents , and being under duress from OWNER, performed such work, changes to
the work and extra work on the REAL PROPERTY as requested, and completed or substantially
completed the work and extra work requested by OWNER until prevented by the OWNER from
proceeding further.
17, It is believed and thereupon alleged that OWNER now claims that he did
not make the express and implied promises described above, as he has refused to pay BUILDER for
the costs plus overhead and profit on the work and extra work performed by BUILDER at their
request.
18. | OWNER also breached and abandoned their CONTRACT with BUILDER
in numerous respects, as heretofore alleged, and denies further liability or responsibility thereon to
BUILDER,
19. OWNER, DOES 1 to 1000, and/or other third parties will be unjustly enriched
as aresult of their conduct as heretofore alleged and BUILDER will have suffered a grave, serious
and irreparable loss unless this Court requires OWNER to honor their promises, and/or unless this
Court adjusts the interests and equities of the parties, and orders OWNER, Does 1 to 1000, and any
owners of the REAL PROPERTY and other third parties owning or controlling such property to pay
BUILDER all actual costs of the work on the REAL PROPERTY plus overhead and profit thereon
and pay BUILDER the unpaid additional sum of at least $102,000.00, together with interest and
statutory late payment penalties thereon per Civil Code § 3260.1 etseq atthe rate of two (2) percent
per month from March 15, 2008 or the date due, until paid in full.
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_ .. THIRD CAUSE OF ACTION
(Civil Penalties, against Owner, Does 1 to 1000)
20 BUILDER realleges and incorporates by reference as though fully set forth hisein,
the allegations of previous paragraphs 1 to 19, inclusive.
2k BUILDER’s Construction work on the REAL PROPERTY for Cross-Defendant has
been 73% completed and BUILDER was entitled to progress payments within the meaning of Civil
Code § 3260.1, plus the added and unpaid change order work
22. There is therefore due and owing to BUILDER from Cross-Defendant about
$10,000.00, more or less, in statutory late payment penalties pursuant to Civil Code § 3260.1 in
addition to the sums heretofore alleged.
23. Said penalties continue to accrue on the principal balance owed to BUILDER at the
rate of two percent (2%) per month and against OWNER and Does 1 to 1000 until the principal
balance owed for work and extra work to BUILDER is paid in full by Cross-Defendants.
FOURTH CAUSE OF ACTION
(Petition to Compel Arbitration against OWNER and Cross-Defendant)
24 BUILDER realleges and incorporates by reference as though fully set forth herein,
the allegations of previous paragraphs 1 to 23, inclusive.
25. | The CONTRACT between the parties provides for, or contains, or incorporates by
reference an arbitration requirement and AIA General Conditions of the CONTRACT for
Construction A201-1997 which also contains a written provision to settle by binding arbitration
disputes and controversies arising from the CONTRACT, including but not limited to all payment
disputes and all disputes over the sufficiency of BUILDER’s performance of the CONTRACT on
the REAL PROPERTY and the reasonable value of BUILDER’s work under Civil Code § 3123, and
in accordance with the guidelines or rules established by the American Arbitration Association.
26. Pursuant to said arbitration provisions and the provisions of the CONTRACT,
OWNER was required to instituted as to those claims made in his complaint, and BUILDER will
institute proceedings against OWNER before the American Arbitration Association in San Francisco
by ademand for arbitration, for the damages alleged heretofore and relief prayed for herein.
-8- First Amend Cross-COMPLAINT“
27. Theconstruction CONTRACT between the parties isa CONTRACT
evidencing a transaction involving interstate commerce in that a high portion of the goods and
materials used or installed in the REAL PROPERTY, having a value of as much as $100,000.00,
more or less, came to Califomia and the jobsite from other states or countries.
28. | OWNER and Cross-Defendant therefore have an obligation to arbitrate all
disputes in this action with BUILDER pursuant to such arbitration provisions and state and federal
law asall of such disputes arise out of or relate to the subject CONTRACT, but OWNER has failed
or refused to arbitrate such disputes.
FIFTH CAUSE OF ACTION
(Foreclosure on Mechanics Lien against Owner, and Does | to 100)
29. BUILDER realleges and incorporates by reference as though fully set
forth hisein, the allegations of previous paragraphs 1 to 28, inclusive.
30. —_Atall times hisein mentioned OWNER was the owner or reputed owner of
certain buildings and real estate (collectively, the "REAL PROPERTY"), located in the County of
Alameda County, commonly known as 51 Surrey Avenue, San Francisco, California.
31. On or about May, 2007 OWNERS obtained a Joan in the amount of about $1,000,000.00
or according to proof from Defendant First Tennessee Bank N.A., doing business as First Horizon
Home Loans, aka First Horizon Construction Lending. (hiseinafter “LENDER”), and on or about that
date Defendant LENDER recorded a deed of trust on the REAL PROPERTY to secure payment of
that loan. ,
32. OWNER, owners or reputed owners and Defendants have been engaged in the
construction work upon said REAL PROPERTY through Cross-Complainant/Petitioner and othiss
continuously and without material cessation or completion from about January 2007 through
September 2008 and thereafter, through BUILDER and others.
33 Defendant OWNER employed BUILDER as a prime or original CONTRACTor for
construction work upon the REAL PROPERTY beginning in about January 2007.
34, | BUILDER thiseupon caused certain labor and materials furnished by it and its
subcontractors to be performed and used in the Project, and such were in fact installed, incorporated
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into, and consumed in the work of BUILDER upon the REAL PROPERTY of OWNER and Does
101 through 1000, said work, labor and materials having a reasonable gross remaining unpaid
amount, balance or reasonable value or price of at least $$102,000.00 plus interest thiseon and
statutory late payment penalties at the rate of two (2) per cent per month per Civil Code § 3260.1 et
seq all from the dates due until paid in full.
35. | Onor about September 9, 2008, Cross-Complainant/Petitioner caused to be timely
recorded in the Office of County Recorder of San Francisco County as document 2008-1644218 a
claim of mechanics lien in connection with Cross-Complainant/Petitioner’s work on the construction
job and CONTRACT described above upon the REAL PROPERTY of OWNER and Does 101 to
1000 as, which mechanics lien is incorporated by reference herein as though fully set forth herein
in full.
36. Theclaimof mechanics lien includes a description of the real property whereon work
of BUILDER was constructed; it is signed and verified by M. Karkori Construction, Inc.; it contains
a general description of the labor and materials supplied tothe REAL PROPERTY for and on behalf
of OWNER, and is for the reasonable or agreed value of the labor and materials that were supplied
to the Project or less than said amount, after deducting all just credits and offsets.
37. Theclaim of lien was recorded before final completion or material cessation of
construction work on the REAL PROPERTY.
38. Cross-Complainant/Petitioner believes and thereupon alleges that OWNER,
LENDER and Does 101 through 1000, inclusive, claim some right, title, estate or interest in or to
the REAL PROPERTY, or in some part or portion thereof.
39. Said mechanics lien as a matter of law relates back to, and has priority over all liens
and interests recorded after, the date of commencement of work on the REAL PROPERTY asallege
hereto, and by reason of such relation back, the subsequent date of the recording of LENDER’s lien
and by reason of the optional advances alleged heretofore by LENDER to OWNER, has priority and
is superior to the liens or interests of all Cross-Defendants, including but not limited OWNER,
LENDER and Does 1 to 1000, inclusive
40. The right, title, estate or interest, if any, of each defendant, including, but not
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limited to OWNER, LENDER and Does 101 through 1000, inclusive, is junior in priority to, inferior
to, subsequent to, and subject to the claim of mechanics lien of BUILDER.
41. The whole of the REAL PROPERTY of OWNER, LENDER and of the unit owners
and Does 1 to 1000 was required for the use and occupancy of the construction and improvements,
and the CONTRACT does not segregate the work to be done or the amount due for each parcel or
part of the Real Property, nor is it possible to segregate the work done on each parcel of the REAL
PROPERTY as the completed work was a single structure or work of improvement and a unified
whole,
42. Attorneys fees may be awarded to a prevailing party pursuant to law, CONTRACT
and statute.
43. Inorderto enforce its claim oflien and otherwise, BUILDER has employed attorneys
and has incurred and will incur reasonable attorneys fees, costs and expenses.
44, BUILDER has performed all things on its part to be performed under the Prime
CONTRACT, except as excused by the wrongful acts and breaches of CONTRACT by Defendants
as heretofore alleged, and is due, owed and unpaid the sum of at Jeast $102,000.00 together with
interest or statutory late payment penalties at the rate of two (2) per cent per month or at the legal
rate, from March 15, 2008 or 30 days after the date due or completion date, until paid.
WHEREFORE Cross-Complainant/Petitioner M. Karkori Construction, Inc. prays as to the
first, second, third, fourth and fifth causes of action, for judgment in favor of Cross-
: Complainant/Petitioner M. Karkori Construction, Inc., and against Cross-Defendant Wayne Derman
and Does 1-1000, inclusive, as follows:
A. For an order compelling arbitration between Cross-Complainant/Petitioner M.
Karkori Construction, Inc., and Cross-Defendant Wayne Derman and DOES | to
1000 of all matters alleged in the Plaintiff's Complaint and in Cross-Complaint’s
First, Second, Third and Fourth causes of action only, and staying all further
proceedings herein between Cross-Complainant/Petitioner M. Karkori Construction,
Inc., and all Cross-Defendants as to the said First, Second Third and Fourth Causes
-11- First Amend Cross-COMPLAINTOo Oe NY A HW Bw ND
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of Action only, pending the award of the Arbitrators;
For an Order pursuant to Code Civil Proc. §§ 1281.4 and 1281.5 staying all
proceedings in this action pending the award of the arbitrator
That the award of the arbitrator(s) be entered as a judgment in this action as to the
First through Fourth Causes ofaction, and that such award be found to be the amount
owed to Cross-Complainant/Petitioner on the mechanics lien;
That Wayne Derman and Does | to 1000 exclusive be estopped from denying their
express and implied promises to Cross-Complainant/Petitioner M. Karkori
Construction, Inc. to pay for extra work , and that this court or the arbitrator enforce
such promises in equity, and that Wayne Derman,and Does 1 to 1000 be ordered to
pay BUILDER at least $102,000.00, or the cost of its work plus overhead and profit,
according to proof, together with interest thereon at the legal rate and late payment
penalties of two (2) per cent per month from March 15, 2008 or the dates due until
paid in full,
Forjudgment in favor of Cross-Complainant/Petitioner M, Karkori Construction, Inc.
and against Wayne Derman and DOES 1 to 1000 on the First Cause of Action in the
amount ofat least $102,000.00, or according to proof, together with interest thereon
at the legal rate and late payment penalties of two (2) per cent per month, or at the
legal rate, from March 15, 2008 or the date due.
For judgment in favor of Cross-Complainant/Petitioner M. Karkori Construction, Inc.
and against Wayne Derman and DOES | to 1000 in the amount of at least
$102,000.00 as to the Second Cause of Action;
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For judgmentin favor of Cross-Complainant/Petitioner M. Karkori Construction, Inc.
and against Wayne Derman and DOES 1 to 1000 in the amount of at least
$102,000.00 plus late payment penalties there of two percent (2%) per month from
March 15, 2008 until the principal sum is paid in full, as to the Third Cause of
Action;
That the amount of $102,000.00, or such amounts the arbitrator may determine to
be due on the lien, together with interest thereon and late payment penalties at the
rate of two (2) per cent per month, or at the legal rate, from March 15, 2008 or the
date due, be adjudged, decreed and declared to be a lien on the whole of the REAL
PROPERTY of Wayne Derman, First Tennessee Bank N.A., doing business as First
Horizon Home Loans, aka First Horizon Construction Lending and Does 1-1000;
that the right, title, estate or interest ofall of the said Cross-Defendants in this action
in or to said REAL PROPERTY be adjudged and decreed subsequent, subordinate,
inferior and subject to Cross-Complainant/Petitioner's mechanics lien; that a writ of
enforcement and execution issue and that the whole of the REAL PROPERTY of
OWNER and Does 1 to 1000, or so much thereof as may be necessary and such
REAL PROPERTY be sold according to law and the practice of this Court, that the
proceeds ‘of the sale be paid to Cross-Complainant/Petitioner M. Karkori
Construction, Inc. to satisfy its judgment; that the equity of redemption of OWNER
and Does 1-1000, be forever ‘barred and foreclosed; that Cross-
Complainant/Petitioner or any party to this action may become a purchaser at such
sale; that Cross-Complainant/Petitioner M. Karkori Construction, Inc. have execution
against Wayne Derman and Does 1-1000 for any deficiency remaining after the sale
and application of the proceeds of such sale;
For costs of suit;
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For attorneys fees, if available, according to proof, and
For such other and further relief as the Court deems just and proper.
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Dated: September 30, 2008
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* Respectfully submitted,
IS/
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Attorney for Cross-Complainant/Petitioner M.
Karkori Construction, Inc.,
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PROOF OF SERVICE
STATE OF CALIFORNIA, COUNTY OF SAN FRANCISCO:
Check method of service (only one):
____ By Personal Service —X ___ By Mail By Overnight Delivery
By Messenger Service By Facsimile By E-Mail/Electronic
Transmission
1, At the time of service I am over 18 years of age and not a party to this action.
2. My address is (specify one):
X__ Business:
655 Montgomery Street, suite 1050; P.O.Box 26749, San Francisco, CA 94126-6749
Residence:
3. On September 30, 2008, I served the following documents (specify):
. FIRST AMENDED CROSS-COMPLAINT;
. SUMMONS
and Exhibits thereto
4, I served the documents on the persons below, as follows:
JEFFREY SKYES
FARELLA BRAUN & MARTEL LLP
235 MONTGOMERY STREET, SUITE 17™ FLOOR
SAN FRANCISCO, CA 94104
d. Time of service, if personal service was used:
The names, addresses, and other applicable information about the persons served is
on the Attachment to Proof of Service-Civil (Persons Served) (form POS-040(P)).
5. The documents were served by the following means (specify):
a.___By personal service. I personally delivered the documents to the persons at the addresses
listed in item 4.
(1) For a party represented by an attomey, delivery was made to the attorney or at the
attomey's office by leaving the documents in an envelope or package clearly labeled to
identify the attomey being served witha receptionist or an individual in charge of the office.
(2) For a party, delivery was made to the party or by leaving the documents at the party's
residence with some person not less than 18 years of age between the hours of eight in the
morning and six in the evening.
b._X__ By United States mail. I enclosed the documents ina sealed envelope or package addressed
to the persons at the addresses in item 4 and (specify one):
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(1)_X__ deposited the sealed envelope with the United States Postal Service, with the
postage fully prepaid.
(2) ___ placed the envelope for collection and mailing, following our ordinary business
practices. I am readily familiar with this business's practice for collecting and processing
correspondence for mailing. On the same day that correspondence is placed for collection
and mailing, it is deposited in the ordinary course of business with the United States Postal
. Service, in a sealed envelope with postage fully prepaid.
Tam a resident or employed in the county where the mailing occurred. The envelope or
package was placed in the mail at (city and state):
(3) ___ enclosed in a sealed envelope or package, registration or certification and return
receipt requested, addressed to the party[ies] as stated on the attached service list. I am
readily familiar with the firm's business practice for collection and processing of envelopes
and packages for mailing with the United States Postal Service. Under the firm’s practice,
registered and certified first class mail with retum receipt requested is deposited in the
ordinary course of business of the United States Postal Service at San Francisco, California,
that same day, with all postage and fees thereon fully prepaid. [am aware that upon motion
of the party served, service is presumed invalid if postal cancellation date or postage meter
date on the envelope or package is more than one day after the date of deposit for mailing.
lam a resident or employed in the county where the mailing occurred. The envelope or
package was placed in the mail at (city and state):
c.___ By overnight delivery, I enclosed the documents in an envelope or package provided by an
overnight delivery carrier and addressed to the persons at the addresses in item 4. placed the
envelope or package for collection and overnight delivery at an office ora regularly utilized drop box
of the overnight delivery carrier.
d.___ By messenger service, I served the documents by placing them in an envelope or package
addressed to the persons at the addresses listed in item 4 and providing them to a professional
messenger service for service. (A declaration by the messenger must accompany this Proof of
Service or be contained in the Declaration of Messenger below.)
e. ___ By fax transmission. Based on an agreement of the parties to accept service by fax
transmission, I faxed the documents to the persons at the fax numbers listed in item 4. No error was
Teported by the fax machine that I used. A copy of the record of the fax transmission, which I printed
out, is attached.
f.___ By e-mail or electronic transmission. Based on a court order or an agreement of the parties
to accept service by e-mail or electronic transmission, I caused the documents to be sent to the
persons at the e-mail addresses listed in item 4. ] did not receive, within a reasonable time after the
transmission, any electronic message or other indication that the transmission was unsuccessful.
I declare under penalty of perjury under the laws of the State of California that the foregoing is true
and correct. ~
Executed on September 30, 2008 . BY: Qe anh a
JennifetYu UO C/
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MOA SUPERIOR COURT OF CALIFORNIA COUNTY OF SAN FRANCISCO Document Scanning Lead Sheet Oct-02-2008 11:16 am Case Number: CGC-08-479247 Filing Date: Oct-01-2008 11:13 Juke Box: 001 Image: 02270752 CROSS COMPLAINT WAYNE DERMAN VS. M.KARKORI CONSTRUCTION, INC., APURPORATED et al 001002270752 Instructions: Please place this sheet on top of the document to be scanned.Ded ANH Bw DN nN NN ea a a ae 26 27 28 GEORGE WILLIAM WOLFF (81126) The Law Office of George W. Wolff 655 Montgomery Street, suite 1050 P.O. Box 26749 San Francisco, CA 94126-6749 Telephone(415) 788-1881 Telecopier: (415)788-0880 GORDON PARK-LI, Clerk Attorneys for Cross-Complainant/Petitioner M. Karkori Constructidff a tenn IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA IN AND FOR THE COUNTY OF SAN FRANCISCO Wayne Derman, an individual Plaintiff, vs - M. Karkori Construction Inc, a California Corporation; Mostafa Karkori, an individual, et al. Defendants. M. Karkori Construction, Inc., a California Corporation Cross-Complainant/Petitioner, v Wayne Derman, an individual, First Tennessee Bank N.A., doing business as First Horizon Home Loans, aka First Horizon Construction Lending, and Does 1 through 1000, inclusive Cross-Defendants Cross-Complainant/Petitioner M. Karkori Construction, Inc., complains and petitions as follows: 1. M. Karkori Construction, Inc., is and for all times relevant hereto was a California corporation in good standing and a licensed general building and engineering contractor in this state o San Francisco County Superior Cour OCT 01 2008 Depay Giork NO, CGC-08-479247 FIRST AMENDED CROSS- COMPLAINT First Amend Cross-COMPLAINTNy nN pe eae . c Cc (Cross-Complainanv/Petitioner is sometimes hereinafter referred to as "BUILDER"). ~ 2. Defendant Wayne Derman (Said person or entity is hereinafter referred to as "OWNER'") is an individual who is reputed to be the owner; and for all times relevant hereto owned or held itself out as the owner of, the land and real property and buildings at 51 Surrey Street, San Francisco CA (hereinafter referred to as the REAL PROPERTY). 3. Cross-Defendant FIRST HORIZON HOME LOANS, AKA FIRST HORIZON CONSTRUCTION LENDING, (hereinafter “LENDER” is believed to bea business organization of unknown form with its principal place of business in Tennessee but which is believed to regularly transact business and make and collect on loans to persons and on properties located within the State of California. 4, Cross-Defendant Does 1 to 100, inclusive, are persons whose identity or involvement or whose commission, authorization or direction of acts hereinafter alleged are presently unknown to Cross-Complainant/Petitioner, but who are believed to be the principals, agents, or other alter egos of OWNER, or are persons who are otherwise responsible for Cross- Complainant/Petitioner’s damages as alleged herein. When their true names become known to Cross-Complainant/Petitioner, Cross-Complainant/Petitioner will amend the Complaint to substitute their true names in stead of said fictitious names. 5. Cross-Defendant Does 101 through 1000, inclusive, are persons whose identity is presently unknown to Cross-Complainant/Petitioner, but who are believed to be lenders, beneficiaries, or other persons who claim some right, title, estate or interest in the REAL PROPERTY which is the subject of this action. When their true names become known to Cross- Complainant/Petitioner, Cross-Complainant/Petitioner will amend the complaint to substitute their true names for said fictitious names. (Breach of Conmact aanate Ouner Dees 1 to 1000) 6. BUILDER realleges and incorporates by reference as though fully set forth herein, the allegations of previous paragraphs 1 to 4, inclusive. 7 Tn or about 2006 OWNER orally requested that BUILDER provide a rough estimate of for building a new building for him and BUILDER did so. -2- First Amend Cross-COMPLAINT8. Then later on about January 2007 OWNER and BUILDER entered into a construction contract (“CONTRACT’) with owner for the construction of new structures on the REAL PROPERTY. 9. Except as provided in or excused by the breaches and abandonment of this CONTRACT by the OWNER , BUILDER has performed or substantially performed all things on its part required to be performed under the CONTRACTs and all changes and amendments thereto. 10. During the progress of the job, it is believed and thereupon alleged that OWNER and Defendants breached the CONTRACT, inter alia, in the following respects: (a) failed to provide coordinated, clear, intelligible and buildable plans and specifications for the construction work to be performed by BUILDER or to have an architect to provide competent construction administration and information; (b) _ failed to provide spotted survey and directions describing legal limitations and utility locations or legal descriptions of the project site, including but not limited easement locations, terms and limitations and property lines and all encroachments, and instructions and plans and directions for dealing with such; (c) failed to maintaina competent licensed architect as owners representative for the performance on design, construction supervision, contract administration and construction phase services on the property as required by the CONTRACT, and do so in a competent or timely manner; (d) ordered BUILDER to perform extra work and changes to the work without written change orders and without providing full or buildable directions, plans and specifications for such work; -3- First Amend Cross-COMPLAINT6 oY DW Bw N 10 ( (g) @®) @) @ &) o C ordered work in addition to the original work without first signing change orders therefore; abandoned the written CONTRACT by the making of numerous and excessive changes and additions to the Work and the other acts alleged herein, many without written change order or change directives, and without providing BUILDER full, adequate or any plans, direction or consideration for most of such; issued instructions, changes and directives for work and extra work to BUILDER’s subcontractors without passing those communications through the BUILDER, as required by the CONTRACT, and instructed such subcontractors not to communicate or share job information and changes with CONTRACT under threats of suit and non-payment; retained, orinstructed BUILDER to retain, other subcontractors of OWNER’s choosing who interfered with and who delayed or disrupted BUILDER’s work; demanded that BUILDER, under duress and threat of termination, consent to the disbursement by LENDER of construction loan progress payments directly to OWNER and then diverted and used such proceeds for purposes other than to BUILDER or to pay for construction work on the job; attempted to place restrictions on which of BUILDER’s personnel could work on or have access to the work site or the REAL PROPERTY; threatened, insulted and harassed and attempted to personally direct -4- First Amend Cross-COMPLAINToe XN AWN Fw N BXRRERRBKRRSESeWIABDAREBOH=AS a (m) (n) (0) (p) {a) “7 Cc ~ BUILDER’s agents, officer or employees as to the details of the work and ; failed to pay BUILDER timely for the original work and extra work even though BUILDER’s applications for payment had been approved by the LENDER based on the extent of completion; demanded that BUILDER provide additional accounting work and information beyond the requirements of the CONTRACT for his own use and as an additional precondition to making further payments; made payments directly to or is believed to have hired certain unknown subcontractors of BUILDER without informing BUILDER of the payments , and hired his own subcontractors in order to exert personal control and direction over the work of the subcontractors, and which conduct interfered with and impeded BUILDER’s work; libeled and slandered BUILDER to its subcontractors and third parties in an attempt to interfere and which did interfere with BUILDER’s relationships with those third persons and subcontractors and others and prospective economic advantage; directly hired certain subcontractors without BUILDER’s express or implied permission , and interfered with BUILDER’s contacts with such persons or entities and the prospective economic advantages and benefits inherent therein. by such and other conduct prevented BUILDER from completing work on the CONTRACT, as amended, and the project. -5- First Amend Cross-COMPLAINTwo oan Aw FF YW HY — nN ee 27 ¢ ¢ (r) _ refused toallow BUILDER to complete the job or correct alleged deficiencies in the work, prevented BUILDER from entering the REAL PROPERTY, stopped the work, wrongfully terminated BUILDER and hired others to complete the CONTRACT and other work on the REAL PROPERTY (s) __ failed to pay BUILDER timely for the original work and extra work even though BUILDER’ s applications for payment had been approved and released by the LENDER and diverted and took such monies for himself and for purposes other than to pay for BUILDER’s construction work, yet continued to apply for and receive progress payment disbursements from LENDER for BUILDER’s work; 11. Asa direct and proximate result of the said breaches by OWNER of the Prime CONTRACT between OWNER and BUILDER, Cross-Complainant/Petitioner incurred additional costs, and the progress and final payments to BUILDER were unreasonably delayed, and BUILDER has lost income, interest and profits. 12, As a direct and proximate result of said breaches of CONTRACT, Cross- Complainant/Petitioner has incurred damages of at least $$102,000.00 on the CONTRACT, or according to proof. 13. The OWNER further breached its CONTRACT with BUILDER in that there remains due and owing to BUILDER an unpaid balance on the contracts of at least $102,000.00 together with interest and statutory late payment penalties thereon per Civil Code § 3260 et seq at the rate of two (2) percent per month from March 15,2008 or the date due, until paid in full. SECOND CAUSE OF ACTION . (Quantum Meruit against Owner, Does 1 to 1000) 14, BUILDER realleges and incorporates by reference as though fully set 28 || forth hisein, the allegations of previous paragraphs 1 to 13, inclusive. -6- First Amend Cross-COMPLAINTOo en Au bk WwW nN = RPRNYNRNNNKHNN | Bee we Be se ee ee RPNHURARPEEOBRBSGEArRIAAREHENH HS € C 15 OWNER, and persons who identified themselves as OWNER's authorized agents and Does 1 to 1000 verbally requested and ordered under threats and duress BUILDER to perform work on the REAL PROPERTY , and changes to the work and extra in addition to that in the original CONTRACT, and expressly or impliedly to pay and promised to pay BUILDER themselves the costs of each such area of work plus a reasonable percentage fee for Cross- Complainant/Petitioners profit and overhead. 16. BUILDER, in good faith and in reasonable reliance on the above promises from OWNER and its agents , and being under duress from OWNER, performed such work, changes to the work and extra work on the REAL PROPERTY as requested, and completed or substantially completed the work and extra work requested by OWNER until prevented by the OWNER from proceeding further. 17, It is believed and thereupon alleged that OWNER now claims that he did not make the express and implied promises described above, as he has refused to pay BUILDER for the costs plus overhead and profit on the work and extra work performed by BUILDER at their request. 18. | OWNER also breached and abandoned their CONTRACT with BUILDER in numerous respects, as heretofore alleged, and denies further liability or responsibility thereon to BUILDER, 19. OWNER, DOES 1 to 1000, and/or other third parties will be unjustly enriched as aresult of their conduct as heretofore alleged and BUILDER will have suffered a grave, serious and irreparable loss unless this Court requires OWNER to honor their promises, and/or unless this Court adjusts the interests and equities of the parties, and orders OWNER, Does 1 to 1000, and any owners of the REAL PROPERTY and other third parties owning or controlling such property to pay BUILDER all actual costs of the work on the REAL PROPERTY plus overhead and profit thereon and pay BUILDER the unpaid additional sum of at least $102,000.00, together with interest and statutory late payment penalties thereon per Civil Code § 3260.1 etseq atthe rate of two (2) percent per month from March 15, 2008 or the date due, until paid in full. -7- First Amend Cross-COMPLAINTwo warnnuwnt WN —- = = 5 w “ ny _ .. THIRD CAUSE OF ACTION (Civil Penalties, against Owner, Does 1 to 1000) 20 BUILDER realleges and incorporates by reference as though fully set forth hisein, the allegations of previous paragraphs 1 to 19, inclusive. 2k BUILDER’s Construction work on the REAL PROPERTY for Cross-Defendant has been 73% completed and BUILDER was entitled to progress payments within the meaning of Civil Code § 3260.1, plus the added and unpaid change order work 22. There is therefore due and owing to BUILDER from Cross-Defendant about $10,000.00, more or less, in statutory late payment penalties pursuant to Civil Code § 3260.1 in addition to the sums heretofore alleged. 23. Said penalties continue to accrue on the principal balance owed to BUILDER at the rate of two percent (2%) per month and against OWNER and Does 1 to 1000 until the principal balance owed for work and extra work to BUILDER is paid in full by Cross-Defendants. FOURTH CAUSE OF ACTION (Petition to Compel Arbitration against OWNER and Cross-Defendant) 24 BUILDER realleges and incorporates by reference as though fully set forth herein, the allegations of previous paragraphs 1 to 23, inclusive. 25. | The CONTRACT between the parties provides for, or contains, or incorporates by reference an arbitration requirement and AIA General Conditions of the CONTRACT for Construction A201-1997 which also contains a written provision to settle by binding arbitration disputes and controversies arising from the CONTRACT, including but not limited to all payment disputes and all disputes over the sufficiency of BUILDER’s performance of the CONTRACT on the REAL PROPERTY and the reasonable value of BUILDER’s work under Civil Code § 3123, and in accordance with the guidelines or rules established by the American Arbitration Association. 26. Pursuant to said arbitration provisions and the provisions of the CONTRACT, OWNER was required to instituted as to those claims made in his complaint, and BUILDER will institute proceedings against OWNER before the American Arbitration Association in San Francisco by ademand for arbitration, for the damages alleged heretofore and relief prayed for herein. -8- First Amend Cross-COMPLAINT“ 27. Theconstruction CONTRACT between the parties isa CONTRACT evidencing a transaction involving interstate commerce in that a high portion of the goods and materials used or installed in the REAL PROPERTY, having a value of as much as $100,000.00, more or less, came to Califomia and the jobsite from other states or countries. 28. | OWNER and Cross-Defendant therefore have an obligation to arbitrate all disputes in this action with BUILDER pursuant to such arbitration provisions and state and federal law asall of such disputes arise out of or relate to the subject CONTRACT, but OWNER has failed or refused to arbitrate such disputes. FIFTH CAUSE OF ACTION (Foreclosure on Mechanics Lien against Owner, and Does | to 100) 29. BUILDER realleges and incorporates by reference as though fully set forth hisein, the allegations of previous paragraphs 1 to 28, inclusive. 30. —_Atall times hisein mentioned OWNER was the owner or reputed owner of certain buildings and real estate (collectively, the "REAL PROPERTY"), located in the County of Alameda County, commonly known as 51 Surrey Avenue, San Francisco, California. 31. On or about May, 2007 OWNERS obtained a Joan in the amount of about $1,000,000.00 or according to proof from Defendant First Tennessee Bank N.A., doing business as First Horizon Home Loans, aka First Horizon Construction Lending. (hiseinafter “LENDER”), and on or about that date Defendant LENDER recorded a deed of trust on the REAL PROPERTY to secure payment of that loan. , 32. OWNER, owners or reputed owners and Defendants have been engaged in the construction work upon said REAL PROPERTY through Cross-Complainant/Petitioner and othiss continuously and without material cessation or completion from about January 2007 through September 2008 and thereafter, through BUILDER and others. 33 Defendant OWNER employed BUILDER as a prime or original CONTRACTor for construction work upon the REAL PROPERTY beginning in about January 2007. 34, | BUILDER thiseupon caused certain labor and materials furnished by it and its subcontractors to be performed and used in the Project, and such were in fact installed, incorporated -9- First Amend Cross-COMPLAINTwo wn A nu & WN 10 c C into, and consumed in the work of BUILDER upon the REAL PROPERTY of OWNER and Does 101 through 1000, said work, labor and materials having a reasonable gross remaining unpaid amount, balance or reasonable value or price of at least $$102,000.00 plus interest thiseon and statutory late payment penalties at the rate of two (2) per cent per month per Civil Code § 3260.1 et seq all from the dates due until paid in full. 35. | Onor about September 9, 2008, Cross-Complainant/Petitioner caused to be timely recorded in the Office of County Recorder of San Francisco County as document 2008-1644218 a claim of mechanics lien in connection with Cross-Complainant/Petitioner’s work on the construction job and CONTRACT described above upon the REAL PROPERTY of OWNER and Does 101 to 1000 as, which mechanics lien is incorporated by reference herein as though fully set forth herein in full. 36. Theclaimof mechanics lien includes a description of the real property whereon work of BUILDER was constructed; it is signed and verified by M. Karkori Construction, Inc.; it contains a general description of the labor and materials supplied tothe REAL PROPERTY for and on behalf of OWNER, and is for the reasonable or agreed value of the labor and materials that were supplied to the Project or less than said amount, after deducting all just credits and offsets. 37. Theclaim of lien was recorded before final completion or material cessation of construction work on the REAL PROPERTY. 38. Cross-Complainant/Petitioner believes and thereupon alleges that OWNER, LENDER and Does 101 through 1000, inclusive, claim some right, title, estate or interest in or to the REAL PROPERTY, or in some part or portion thereof. 39. Said mechanics lien as a matter of law relates back to, and has priority over all liens and interests recorded after, the date of commencement of work on the REAL PROPERTY asallege hereto, and by reason of such relation back, the subsequent date of the recording of LENDER’s lien and by reason of the optional advances alleged heretofore by LENDER to OWNER, has priority and is superior to the liens or interests of all Cross-Defendants, including but not limited OWNER, LENDER and Does 1 to 1000, inclusive 40. The right, title, estate or interest, if any, of each defendant, including, but not -10- First Amend Cross-COMPLAINTOo me rXN AW Fs WYN = NY NN NY NW mm co C limited to OWNER, LENDER and Does 101 through 1000, inclusive, is junior in priority to, inferior to, subsequent to, and subject to the claim of mechanics lien of BUILDER. 41. The whole of the REAL PROPERTY of OWNER, LENDER and of the unit owners and Does 1 to 1000 was required for the use and occupancy of the construction and improvements, and the CONTRACT does not segregate the work to be done or the amount due for each parcel or part of the Real Property, nor is it possible to segregate the work done on each parcel of the REAL PROPERTY as the completed work was a single structure or work of improvement and a unified whole, 42. Attorneys fees may be awarded to a prevailing party pursuant to law, CONTRACT and statute. 43. Inorderto enforce its claim oflien and otherwise, BUILDER has employed attorneys and has incurred and will incur reasonable attorneys fees, costs and expenses. 44, BUILDER has performed all things on its part to be performed under the Prime CONTRACT, except as excused by the wrongful acts and breaches of CONTRACT by Defendants as heretofore alleged, and is due, owed and unpaid the sum of at Jeast $102,000.00 together with interest or statutory late payment penalties at the rate of two (2) per cent per month or at the legal rate, from March 15, 2008 or 30 days after the date due or completion date, until paid. WHEREFORE Cross-Complainant/Petitioner M. Karkori Construction, Inc. prays as to the first, second, third, fourth and fifth causes of action, for judgment in favor of Cross- : Complainant/Petitioner M. Karkori Construction, Inc., and against Cross-Defendant Wayne Derman and Does 1-1000, inclusive, as follows: A. For an order compelling arbitration between Cross-Complainant/Petitioner M. Karkori Construction, Inc., and Cross-Defendant Wayne Derman and DOES | to 1000 of all matters alleged in the Plaintiff's Complaint and in Cross-Complaint’s First, Second, Third and Fourth causes of action only, and staying all further proceedings herein between Cross-Complainant/Petitioner M. Karkori Construction, Inc., and all Cross-Defendants as to the said First, Second Third and Fourth Causes -11- First Amend Cross-COMPLAINTOo Oe NY A HW Bw ND " C x of Action only, pending the award of the Arbitrators; For an Order pursuant to Code Civil Proc. §§ 1281.4 and 1281.5 staying all proceedings in this action pending the award of the arbitrator That the award of the arbitrator(s) be entered as a judgment in this action as to the First through Fourth Causes ofaction, and that such award be found to be the amount owed to Cross-Complainant/Petitioner on the mechanics lien; That Wayne Derman and Does | to 1000 exclusive be estopped from denying their express and implied promises to Cross-Complainant/Petitioner M. Karkori Construction, Inc. to pay for extra work , and that this court or the arbitrator enforce such promises in equity, and that Wayne Derman,and Does 1 to 1000 be ordered to pay BUILDER at least $102,000.00, or the cost of its work plus overhead and profit, according to proof, together with interest thereon at the legal rate and late payment penalties of two (2) per cent per month from March 15, 2008 or the dates due until paid in full, Forjudgment in favor of Cross-Complainant/Petitioner M, Karkori Construction, Inc. and against Wayne Derman and DOES 1 to 1000 on the First Cause of Action in the amount ofat least $102,000.00, or according to proof, together with interest thereon at the legal rate and late payment penalties of two (2) per cent per month, or at the legal rate, from March 15, 2008 or the date due. For judgment in favor of Cross-Complainant/Petitioner M. Karkori Construction, Inc. and against Wayne Derman and DOES | to 1000 in the amount of at least $102,000.00 as to the Second Cause of Action; -12- First Amend Cross-COMPLAINTvv R= — eee BNRRRPBBRESGEaReWIABTAREEHRES yo eo NAW kh WN & H. ce c For judgmentin favor of Cross-Complainant/Petitioner M. Karkori Construction, Inc. and against Wayne Derman and DOES 1 to 1000 in the amount of at least $102,000.00 plus late payment penalties there of two percent (2%) per month from March 15, 2008 until the principal sum is paid in full, as to the Third Cause of Action; That the amount of $102,000.00, or such amounts the arbitrator may determine to be due on the lien, together with interest thereon and late payment penalties at the rate of two (2) per cent per month, or at the legal rate, from March 15, 2008 or the date due, be adjudged, decreed and declared to be a lien on the whole of the REAL PROPERTY of Wayne Derman, First Tennessee Bank N.A., doing business as First Horizon Home Loans, aka First Horizon Construction Lending and Does 1-1000; that the right, title, estate or interest ofall of the said Cross-Defendants in this action in or to said REAL PROPERTY be adjudged and decreed subsequent, subordinate, inferior and subject to Cross-Complainant/Petitioner's mechanics lien; that a writ of enforcement and execution issue and that the whole of the REAL PROPERTY of OWNER and Does 1 to 1000, or so much thereof as may be necessary and such REAL PROPERTY be sold according to law and the practice of this Court, that the proceeds ‘of the sale be paid to Cross-Complainant/Petitioner M. Karkori Construction, Inc. to satisfy its judgment; that the equity of redemption of OWNER and Does 1-1000, be forever ‘barred and foreclosed; that Cross- Complainant/Petitioner or any party to this action may become a purchaser at such sale; that Cross-Complainant/Petitioner M. Karkori Construction, Inc. have execution against Wayne Derman and Does 1-1000 for any deficiency remaining after the sale and application of the proceeds of such sale; For costs of suit; -13- First Amend Cross-COMPLAINTJ. K. (*) * For attorneys fees, if available, according to proof, and For such other and further relief as the Court deems just and proper. -14- First Amend Cross-COMPLAINTDw wont A UN F&F WN = eee on AN UN k® YN | Dated: September 30, 2008 “~ * Respectfully submitted, IS/ GE ” Attorney for Cross-Complainant/Petitioner M. Karkori Construction, Inc., -15- First Amend Cross-COMPLAINToem NY DH fF WN ”) o~ PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF SAN FRANCISCO: Check method of service (only one): ____ By Personal Service —X ___ By Mail By Overnight Delivery By Messenger Service By Facsimile By E-Mail/Electronic Transmission 1, At the time of service I am over 18 years of age and not a party to this action. 2. My address is (specify one): X__ Business: 655 Montgomery Street, suite 1050; P.O.Box 26749, San Francisco, CA 94126-6749 Residence: 3. On September 30, 2008, I served the following documents (specify): . FIRST AMENDED CROSS-COMPLAINT; . SUMMONS and Exhibits thereto 4, I served the documents on the persons below, as follows: JEFFREY SKYES FARELLA BRAUN & MARTEL LLP 235 MONTGOMERY STREET, SUITE 17™ FLOOR SAN FRANCISCO, CA 94104 d. Time of service, if personal service was used: The names, addresses, and other applicable information about the persons served is on the Attachment to Proof of Service-Civil (Persons Served) (form POS-040(P)). 5. The documents were served by the following means (specify): a.___By personal service. I personally delivered the documents to the persons at the addresses listed in item 4. (1) For a party represented by an attomey, delivery was made to the attorney or at the attomey's office by leaving the documents in an envelope or package clearly labeled to identify the attomey being served witha receptionist or an individual in charge of the office. (2) For a party, delivery was made to the party or by leaving the documents at the party's residence with some person not less than 18 years of age between the hours of eight in the morning and six in the evening. b._X__ By United States mail. I enclosed the documents ina sealed envelope or package addressed to the persons at the addresses in item 4 and (specify one): Page 1 of 2Co ON DH Fw HN Cc C (1)_X__ deposited the sealed envelope with the United States Postal Service, with the postage fully prepaid. (2) ___ placed the envelope for collection and mailing, following our ordinary business practices. I am readily familiar with this business's practice for collecting and processing correspondence for mailing. On the same day that correspondence is placed for collection and mailing, it is deposited in the ordinary course of business with the United States Postal . Service, in a sealed envelope with postage fully prepaid. Tam a resident or employed in the county where the mailing occurred. The envelope or package was placed in the mail at (city and state): (3) ___ enclosed in a sealed envelope or package, registration or certification and return receipt requested, addressed to the party[ies] as stated on the attached service list. I am readily familiar with the firm's business practice for collection and processing of envelopes and packages for mailing with the United States Postal Service. Under the firm’s practice, registered and certified first class mail with retum receipt requested is deposited in the ordinary course of business of the United States Postal Service at San Francisco, California, that same day, with all postage and fees thereon fully prepaid. [am aware that upon motion of the party served, service is presumed invalid if postal cancellation date or postage meter date on the envelope or package is more than one day after the date of deposit for mailing. lam a resident or employed in the county where the mailing occurred. The envelope or package was placed in the mail at (city and state): c.___ By overnight delivery, I enclosed the documents in an envelope or package provided by an overnight delivery carrier and addressed to the persons at the addresses in item 4. placed the envelope or package for collection and overnight delivery at an office ora regularly utilized drop box of the overnight delivery carrier. d.___ By messenger service, I served the documents by placing them in an envelope or package addressed to the persons at the addresses listed in item 4 and providing them to a professional messenger service for service. (A declaration by the messenger must accompany this Proof of Service or be contained in the Declaration of Messenger below.) e. ___ By fax transmission. Based on an agreement of the parties to accept service by fax transmission, I faxed the documents to the persons at the fax numbers listed in item 4. No error was Teported by the fax machine that I used. A copy of the record of the fax transmission, which I printed out, is attached. f.___ By e-mail or electronic transmission. Based on a court order or an agreement of the parties to accept service by e-mail or electronic transmission, I caused the documents to be sent to the persons at the e-mail addresses listed in item 4. ] did not receive, within a reasonable time after the transmission, any electronic message or other indication that the transmission was unsuccessful. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. ~ Executed on September 30, 2008 . BY: Qe anh a JennifetYu UO C/ Page 2 of 2