Preview
170V310601
Santa Clara — Civil
R. Nguyen
Ryan P. Harley, Esq. (SBN 245059) Electronically Filed
Bradley D. Doucette, Esq. (SBN 322611) by Superior Court of CA,
COLLINS COLLINS MUIR + STEWART LLP County of Santa Clara,
1999 Harrison Street, Suite 1700 on 1/28/2021 2:10 PM
Oakland, CA 94612 Reviewed By: R. Nguyen
(510) 844-5100 — FAX (510) 844-5101 Case #17CV310601
Email: rharley@ccmslaw.com Envelope: 5733869
Email: bdoucette@ccmslaw.com
Attorneys for Defendant/Cross-Complainant/Cross-Defendant
WEC AND ASSOCIATES, INC.
(erroneously sued and served as WEC ASSOCIATES, INC.)
SUPERIOR COURT OF THE STATE OF CALIFORNIA
10 COUNTY OF SANTA CLARA
11
12 YOUQIN CAO, an Individual, and CASE NO. 17CV310601
XINRONG JIANG, an Individual, [Assigned to the Hon. Socrates P. Manoukian,
13
Dept. 20]
14 Plaintiffs,
WEC AND ASSOCIATES, INC.'S REPLY TO
15 VS. PLAINTIFFS AND CROSS-DEFENDANTS’
OPPOSITION TO MOTION FOR SUMMARY
16 CALIFORNIA HOME BUILDERS & ADJUDICATION
DESIGN, INC. dba CALIFORNIA
17 HOMES & DESIGNS, INC., a California) [Filed concurrently with Response to Opposition to
18 Corporation; CALIFORNIA HOMES AND) Separate Statement of Opposition to Undisputed
KITCHEN DESIGN CENTER, INC., a ) Material Facts and Response to Additional Disputed
19 California Corporation; WEC Material Facts]
ASSOCIATES, INC., a California
20 Corporation; and DOES 2 through 100, DATE: February 2, 2021
TIME: 9:00 a.m.
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Defendants. DEPT: 20
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Complaint Filed: 5/19/17
23 FAC Filed: 8/15/17
Trial Date: None
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AND RELATED CROSS-ACTIONS )
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27 Defendant/Cross-Complainant/Cross-Defendant WEC AND ASSOCIATES, INC. (“WEC”)
28 hereby submits its Reply to Plaintiffs and Cross-Defendants YOUQIN CAO and XINRONG
20705
COLLINS COLLINS 1
+ STEWART
1999) WEC AND ASSOCIATES, INC.'S REPLY TO PLAINTIFFS AND CROSS-DEFENDANTS’ OPPOSITION TO
Oak 612
ot (510) 844-5100 MOTION FOR SUMMARY ADJUDICATION
fax (610) 244-5101,
JIANG’s (collectively, “Plaintiffs”) Opposition to Defendant WEC’s Motion for Summary
Adjudication (“Motion”).
I. PLAINTIFFS NEGOTIATED AND AGREED TO A CONTRACT CON NING
AN EXPLICIT LIMITATION OF LIABILITY CLAUSE
In evaluating a motion for summary adjudication, the Court must first identify the issues
framed by the pleadings as it is the crux of an adjudication motion to establish a complete defense or
otherwise show there is no basis for relief by the opposition. (See Eriksson v. Nunnink (2011) 191
Cal.App.4th 826, 848.) Thus, the purpose of an adjudication proceeding is to “permit a party to show
10 that material factual claims arising from the pleadings need not be tried because they are not in
11 dispute.” (/d. (citations omitted).) Here, Plaintiffs have brought suit against WEC for breach of
12 contract and negligence based on a contract the parties negotiated and entered into prior to the design
13 and construction of Plaintiffs’ home. By signing that contract, Plaintiffs agreed to limit WEC’s
14 liability for damages stemming from any and all claims, losses, causes of action, costs, and damages
15 to a maximum aggregate sum of $100,000. Despite this, Plaintiffs now attempt to recant the terms of
16 contract to get around an unfavorable contract term. As these limitation of liability provisions are
17 found to strictly enforceable according to their terms, and given such provision here is valid under
18 California law, WEC is entitled to summary adjudication of the limitation of liability provision in its
19 Contract as noted by its Seventeenth Affirmative Defense to Plaintiffs’ First Amended Complaint, and
20 respectfully requests an order limiting the potential damages attributable to WEC, if any, to $100,000
accordingly.
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20705
COLLINS COLLINS 2
MUIR + STEWART.
1999 Harrison St, Ste.1700 WEC AND ASSOCIATES, INC.'S REPLY TO PLAINTIFFS AND CROSS-DEFENDANTS’ OPPOSITION TO
Oakland, CA 94612
Phone (510) 844-5100 MOTION FOR SUMMARY ADJUDICATION
Fax (610) 844.5101,
I. SUMMARY_ ADJUDICATION IS PROPER BECAUSE THERE IS NO TRIABLE
ISSUE OF MATERIAL FACT THAT THE LIMITATION OF LIABILITY CLAUSE IS
VALID AND ENFORCEABLE
laintiffs Reliance _on California Rule of Court, Rule 3.1530 is Flawed_an
Moreover, Plaintiffs Fail to Argue How They Are Prejudiced by Any Defect
Plaintiffs’ primary argument in opposition to WEC’s Motion is that the Motion in its entirety
should be denied due to a perceived procedural defect in WEC’s Separate Statement of Undisputed
Material Facts (“Separate Statement”).
Plaintiffs claim the Separate Statement fails to identify the “cause of action, affirmative defense,
10 or legal issue sought to be adjudicated” per California Rules of Court, Rule 3.1350(d). First, it is apparent
11 from the face of WEC’s Separate Statement that the Separate Statement itself is applicable to WEC’s
12 entire summary adjudication motion in compliance with Rule 3.1350(d). Further, in the avoidance of
13 any doubt, WEC specifically points to WEC’s applicable affirmative defense in its Undisputed Material
14 Fact, Number 5: “WEC’s Answer at § 17, Seventeenth Affirmative Defense (“This answering Defendant
15 is informed and believes, and thereon alleges, that at all times herein relevant, there existed a contract
16 between Plaintiffs and/or their predecessor in interest and WEC, whereby the parties negotiated and
17 expressly agreed to limit the liability of WEC.”) Thus, this appears to be a non-issue for purposes of the
18 Court deciding WEC’s Motion on its merits (WEC also notes that Plaintiffs’ responsive separate
statement is structured identically to WEC’s, seemingly negating their argument here).
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Nevertheless, assuming WEC’s Separate Statement is procedurally deficient, it is undeniable
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that the failure to have a proper heading is not a wholly deficient fatal flaw, as was the case in Truong v.
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Glasser (2009) 181 Cal.App.4th 102 (“... even if some additional headings had been required, the court's
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power to deny summary judgment on the basis of failure to comply with California Rules of Court, rule
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3.1350 is discretionary, not mandatory.”) There, the Court held that failure to conform with certain
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requirements of Rule 3.1350 did not present a deficiency to warrant rejection of the summary judgement
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motion as issue, and moreover the plaintiffs there did not explain how any alleged deficiency impaired
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their ability to “marshal evidence to show that material facts were in dispute.” (/d. at 118.) Moreover,
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courts recognize that the “the proper response in most instances, if the trial court is not prepared to
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20705
COLLINS COLLINS 3
MUIR + STEWART.
1999 Harrison St, Ste.1700 WEC AND ASSOCIATES, INC.'S REPLY TO PLAINTIFFS AND CROSS-DEFENDANTS’ OPPOSITION TO
Oakland, CA 94612
Phone (510) 844-5100 MOTION FOR SUMMARY ADJUDICATION
Fax (610) 844.5101,
address the merits of the motion in light of the deficient separate statement, is to give the [] party an
opportunity to file a proper separate statement...” (Parkview Villas Assn., Inc. v. State Farm Fire &
Casualty Co. (2005) 133 Cal.App.4th 1197, 1211.)
In avoidance of any doubt, WEC recognizes Plaintiffs’ contention and has amended its Response
to Plaintiffs’ Separate Statement of Opposition to Undisputed Material Facts and Additional Disputed
Material Facts by Plaintiffs, attached hereto and filed concurrently. Plaintiffs have otherwise presented
no evidence or argument to explain why they are prejudiced by any perceived defect and thus this issue
should not be dispositive of WEC’s Motion.
B. Plaintiffs Have Failed to Show That WEC Was Grossly Negligent and/or Willfully
10 r Negligently Violated Any Law and Therefore California Civil Code Section 1668
11 Is Inapplicable
12 Here, Plaintiffs fail to oppose WEC’s legal authority supporting the enforceability of the
13 limitation of liability clause between the two parties and fail to deny that Plaintiffs were informed of,
14 understood, and/or agreed to the limitation of liability clause. (See Plaintiff's Opposition, pp. 2-5.)
15 Instead Plaintiffs’ opposition papers and arguments thereto focus on whether or not a soils report was
16 ever recommended, or obtained, for their Property. Bolstered by an improper and self-serving expert
17 declaration, Plaintiffs’ appear to ignore the fact that the limitation of liability clause exists and would
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rather attempt to pinpoint possible areas of gross negligence and violations of law its expert claims have
occurred in connection with the Property.
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Plaintiffs provide no evidence to negate the contract or the liability clause on its face. They
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seemingly gloss over the fact that the parties have signed a limitation of liability provision that explicitly
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applies to WEC. Instead, Plaintiffs’ opposition is premised solely upon the faulty argument that the
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limitation of liability provision here violates public policy and in particular, California Civil Code
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Section 1668. First, it is notable that Section 1668 only voids contractual provisions which “exempt” a
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party from liability — Section 1668 does not speak to limitations of liability such as the case here (in
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other words, Section 1668 is not applicable as the limitation of liability clause here does not dispose of
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Plaintiffs’ claims, merely limits the extent of them). Furthermore, Section 1668 pertains to egregious
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conduct such as the “failure to exercise even slight care” and/or “an extreme departure from the ordinary
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20705
COLLINS COLLINS 4
MUIR + STEWART.
1999 Harrison St, Ste.1700 WEC AND ASSOCIATES, INC.'S REPLY TO PLAINTIFFS AND CROSS-DEFENDANTS’ OPPOSITION TO
Oakland, CA 94612
Phone (510) 844-5100 MOTION FOR SUMMARY ADJUDICATION
Fax (610) 844.5101,
standard of conduct.” (City of Santa Barbara v. Superior Court (2007) 41 Cal.4th 747, 765.) Again, the
only allegations here are breach of contract and negligence. Plaintiffs’ alternative theory relating to
Section 1668 is a long-shot attempt to deem the limitation of liability clause unenforceable under Section
1668 by accusing WEC of conduct in “violation of law”. The “laws” which Plaintiffs cite to (16 CCR §
404.1 and 16 CCR § 475) reference the Code of Professional Conduct for Professional Engineering, and
are as Plaintiffs admit, regulations and are thereby regulatory in nature. One “law” defines the term
“responsible charge” as it applies to professional engineers (16 CCR § 404.1) while the other (16 CCR
§ 475) details the code of conduct for professional engineers in the State of California. Neither are the
“laws” which Section 1668 pertains to and can serve as a basis to undo the enforceability of the limitation
10 of liability clause here. These are markedly distinguishable from the type of laws this Section has been
11 held to pertain to, such as Health and Safety Code violations in the Capri v. L.A. Fitness International,
12 LLC (2006) 136 Cal.App.4th 1078, as cited by Plaintiffs.
13 Moreover, despite the inapplicability of this provision, Plaintiffs have failed to make any
14 showing that WEC was grossly negligent or has violated any law. It has long been held that a party
15 cannot avoid summary judgment, or in this case adjudication, merely by asserting facts based on
16 speculation and conjecture — a party “must produce admissible evidence raising a triable issue of fact.”
17 (LaChapelle v. Toyota Motor Credit Corp. (2002) 102 Cal.App.4th 977, 981.) Similarly, and of note
here, “Plaintiffs cannot manufacture a triable issue of fact through use of an expert opinion with self-
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serving conclusions devoid of any basis, explanation, or reasoning.” (McGonnell v. Kaiser Gypsum Co.,
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Inc. (2002) 98 Cal.App.4th 1098, 1106.) “An expert's speculations do not rise to the status of
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contradictory evidence, and a court is not bound by expert opinion that is speculative or conjectural.”
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(id.) Here, Plaintiffs have submitted an improper and self-serving declaration of their expert witness as
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the only evidence as to why WEC’s conduct may fall under Civil Code Section 1668 and have failed in
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showing why summary adjudication should not be granted. On the contrary, the evidence that Plaintiffs
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1 Plaintiffs’ reliance on Hanna v. Lederman (1963) 223 Cal.App.2d 786, is also distinguishable as there, the parties had
26 agreed to a complete exculpatory clause with their landlord, not a limitation of liability. Also, Plaintiffs reliance on Klein
v, Asgrow Seed Co. (1966) 246 Cal.App.2d 87 is similarly misguided as such case dealt with disclaimers of liability for
27 warranties of merchantability in the seed industry. At issue here is a straightforward limitation of liability clause between
an architect/engineer and a home builder.
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COLLINS COLLINS 5
MUIR + STEWART.
1999 Harrison St, Ste.1700 WEC AND ASSOCIATES, INC.'S REPLY TO PLAINTIFFS AND CROSS-DEFENDANTS’ OPPOSITION TO
Oakland, CA 94612
Phone (510) 844-5100 MOTION FOR SUMMARY ADJUDICATION
Fax (610) 844.5101,
reference seems to double-down on the limitation of liability provision — Plaintiffs knew about it,
negotiated it, agreed to it, but are now trying to avoid it some 10 years later.
And finally, Plaintiffs’ characterization of WEC’s conduct as “active negligence” falling outside
of the scope of the limitation of liability provision is inconsequential as Plaintiffs have failed to establish
any active negligence by WEC in this matter. Contrary to Plaintiffs’ allegations, the limitation of liability
provision at issue is plainly permissible under California law as such provisions have long been
recognized as valid. (Markborough California, Inc. v. Superior Court (1991) 227 Cal.App.3d 705, 714.)
Plaintiffs’ allegations, met with self-serving declarations and baseless testimony, merely ignore the fact
that Plaintiffs provide no evidence that they did not intend the signed contract (and limitation of liability
10 provision therein) to apply to WEC.
11 C. Public Policy and California Authority Favors Enforcement of the Parties’ Mutual
12 Assent to the Terms of Their Contract
13 Despite the clear approval from the California Legislature as well as the Courts in favor of
14 contractual limitations of liability, Plaintiffs dispute the Markborough California, Inc. v. Superior Court
15 (1991) 227 Cal.App.3d 705 case and attempt to argue the limitation of liability clause in this case is
16 unenforceable as such authority only pertains to hold harmless agreements in a commercial construction
17 capacity. While Plaintiffs’ recitation of the facts of the Markborough case is generally accurate, Plaintiffs
18 ignore the applicability of Markborough in settings similar to these and fail to note that Markborough is
19 no way limited to commercial construction contracts. (See e.g. Greenwood v. Murphy (Cal. Ct. App.,
20 Nov. 19, 2008, No. A114627) 2008 WL 4946224 (relying on Markborough in holding that the limitation
21 of liability provision between a homeowner and an architect/engineer has not been subject to “arms-
22 length” negotiations).) Rather, the notion of the Markborough case is that parties to a construction
23 contract — whether that construction be a man-made lake or a residential home — may entire into an arms-
24 length negotiation regarding the contract between them and if such negotiations take place, “[t]he parties
25 are bound by the terms of the contract even if they do not read it.” (Markborough California, Inc. v.
26 Superior Court (1991) 227 Cal.App.3d 705, 716.)
27 Finally, Plaintiffs do not address the point that there exists no justification for allowing Plaintiffs
28 to shift their alleged losses to WEC. As addressed in WEC’s moving papers is that there exists no
20705
COLLINS COLLINS 6
MUIR + STEWART.
1999 Harrison St, Ste.1700 WEC AND ASSOCIATES, INC.'S REPLY TO PLAINTIFFS AND CROSS-DEFENDANTS’ OPPOSITION TO
Oakland, CA 94612
Phone (510) 844-5100 MOTION FOR SUMMARY ADJUDICATION
Fax (610) 844.5101,
justification for allowing a shift in loss between the parties. Here, Plaintiffs agreed to assume the risk
that when they signed the Contract any losses over $100,000 would not be recoverable against WEC
Again, WEC was prepared to assume a greater amount of risk for a larger fee and Plaintiffs new of this
but choose to decline a higher fee. There is simply no justification for allowing Plaintiffs to shift this
loss to WEC, who neither agreed to assume it nor was compensated for such assumption
TI. WEC__REQUESTS THAT THIS COURT __SUSTAIN__ALL EVIDENTIARY
OBJECTIONS MADE BY WEC AND GRANT SUMMARY ADJUDICATION IN ITS
FAVOR
Plaintiffs do not dispute that they entered into arms-length negotiations with WEC, rather, they
10 support it — noting the multiple meetings, drafts, and exchanges the two parties had. Nor do Plaintiffs
il argue that they were in a position of unequal bargaining or power with the two individuals from WEC
12 Rather, 10 years after signing an agreement with WEC they seek to renege on one of the agreement’s
13 terms — a clause which /imits, not exculpates, the potential liability of WEC in this matter.
14 A civil jury would have nothing to adjudicate or apportion regarding potential damages if this
15 matter when to trial because WEC and Plaintiffs’ contract expressly limits WEC’s damages to $100,000
16 Plaintiffs’ self-serving, conjecture-based evidence does not refute this, it simply seeks to shift focus from
17 the issue at hand — that the Contract clearly limits the liability of WEC and WEC is entitled to have those
18 negotiated provisions enforced. WEC respectfully requests that the Court sustain all of its evidentiary
19 objections in writing, find that there is no dispute of material fact, grant summary adjudication in
20 WEC’s favor against Plaintiffs, and provide any other relief in WEC’s favor that the Court deems
21 just and proper.
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23 DATED: January 28, 2021 COLLINS COLLINS MUIR + STEWART LLP
>
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on eee
“BRADLEY D- DOUCETTE
26 RYAN P. HARLEY
Attorneys for Defendant/Cross-Complainant/
27 Cross-Defendant
WEC AND ASSOCIATES, INC
28
20705
COLLINS COLLINS 7
MUIR + STEWART.
1999 Harrison St, Ste.1 WEC AND ASSOCIATES, INC.'S REPLY TO PLAINTIFFS AND CROSS-DEFENDANTS’ OPPOSITION TO.
Oakland, CA 94612
Phone (510) 844-5100 MOTION FOR SUMMARY ADJUDICATION
Fax (610) 844-5101
PROOF OF SERVICE
(CCP gg 1013(a) and 2015.5; FRCP 5)
State of California, )
) ss,
County of San Bernardino. )
1 am employed in the County of San Bernardino. I am over the age of 18 and not a party to the within action. My business addres:
is 10681 Foothill Boulevard, Suite 260, Rancho Cucamonga, California 91730.
On this date, I served the foregoing document described as WEC AND ASSOCIATES, INC.'S REPLY TO PLAINTIFFS
AND CROSS-DEFENDANTS’ OPPOSITION TO MOTION FOR SUMMARY ADJUDICATION on the interested parties in thi
action by placing same in a sealed envelope, addressed as follows:
SEE ATTACHED SERVICE LIST
0 GY MAIL) - I caused such envelope(s) with postage thereon fully prepaid to be placed in the United States mail in Rancho Cucamonga
California to be served on the parties as indicated on the attached service list. I am “readily familiar” with the firm’s practice of collectior
and processing correspondence for mailing. Under that practice, it would be deposited with the U.S. Postal Service on that same day wit
postage thereon fully prepaid at Rancho Cucamonga, California in the ordinary course of business. [am aware that on motion of the party
served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailin,
in affidavit.
10
(BY CERTIFIED MAIL) - | caused such envelope(s) with postage thereon fully prepaid via Certified Mail Retum Receipt Requested
11 to be placed in the United States Mail in Rancho Cucamonga, California.
BY EXPRESS MAIL OR ANOTHER METHOD OF DELIVERY PROVIDING FOR OVERNIGHT DELIVERY
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(BY ELECTRONIC FILING AND/OR SERVICE)— Only by emailing the document(s) listed above to the parties in this action usin,
13 the email addresses identified on the attached Service List. During the period of Emergency Rule #12 declared pursuant to the COVID-1
Pandemic, as well as the Orders of the Governor of C: jifornia and Mayor of Los Angeles, this office is working remotely, not readily abl
14 to send physical mail as usual, and is therefore using only electronic mail as the preferred method of communication, No electroni
message or other indication that the transmission was unsuccessfull was received within a reasonable time after the transmission.
15
FEDERAL EXPRESS - | caused the envelope to be delivered to an authorized courier or driver authorized to receive documents with
delivery fees provided for.
16
(BY FACSIMILE) - I caused the above-described document(s) to be transmitted to the offices of the interested parties at the facsimil
17 number(s) indicated on the attached Service st and the activity report(s) generated by facsimile number (909) 581-6101 indicated al
pages were transmitted.
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(BY PERSONAL SERVICE) - I caused such envelope(s) to be delivered by hand to the office(s) of the addressee(s).
19
Executed on January 28, 2021 at Ontario, California.
20 & (STATE) - I declare under penalty of perjury under the laws of the State of California that the above is true and correct.
21 oO (FEDERAL) - Ideclare that I am employed in the office of a member of the bar of this court at whose direction the service was made.
22
DENIS WELCH
23 dwelch@cemslaw.com
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COLLINS COLLINS 8
MUIR + STEWART.
1999 Harrison St, Ste.1700 WEC AND ASSOCIATES, INC.'S REPLY TO PLAINTIFFS AND CROSS-DEFENDANTS’ OPPOSITION TO
Oakland, CA 94612
Phone (510) 844-5100 MOTION FOR SUMMARY ADJUDICATION
Fax (610) 244-5101,
YOUQIN CAO and XINRONG JIANG vy. CALIFORNIA HOME BUILDERS & DESIGN, INC., ete., et al.
Santa Clara County Superior Court Case No. 17CV310601
CCMS File No. 20705
SERVICE LIST
Jeffrey H. Belote, Esq. Brian Preston, Esq.
CLARK HILL LLP LAW OFFICES OF BRIAN PRESTON
One Embarcadero Center, Suite 400 111 North Market Street, Suite 705
San Francisco, CA 94111 San Jose, CA 95113
(415) 984-8500 — Fax: (415) 984-8599 (408) 293-2700 — Fax: (408) 293-2711
jbelote@clarkhill.com bp@briany ‘om,
ATTORNEYS FOR Plaintiff/Cross-Defendants ATTORNEY FOR Defendants/
YOUQUIN CAO & XINRONG JIANG Cross-Complainants/Cross-Defendants
CALIFORNIA HOMES AND KITCHEN DESIGN
CENTER, INC., and CALIFORNIA HOME BUILDERS
& DESIGN, INC.
Kevin P. Kennedy, Esq.
E. Val Meneses, Esq.
KENNEDY & SOUZA, APC
10 7964 Arjons Drive, Suite I
San Diego, CA 92126
il (858) 267-4127 — Fax: (858) 267-4128
kkennedy@kennedysouza.com
vmeneses@kennedysouza.com
12 ASSOCIATED COUNSEL FOR Defendants/
Cross-Complainants/Cross-Defendants
13 CALIFORNIA HOMES AND KITCHEN DESIGN
CENTER, INC., and CALIFORNIA HOME
14 BUILDERS & DESIGN, INC.
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COLLINS COLLINS 9
MUIR + STEWART.
1999 Harrison St, Ste.1700 WEC AND ASSOCIATES, INC.'S REPLY TO PLAINTIFFS AND CROSS-DEFENDANTS’ OPPOSITION TO.
Oakland, CA 94612
Phone (510) 844-5100 MOTION FOR SUMMARY ADJUDICATION
Fax (610) 244-5101
Preview
170V310601 Santa Clara — Civil R. Nguyen Ryan P. Harley, Esq. (SBN 245059) Electronically Filed Bradley D. Doucette, Esq. (SBN 322611) by Superior Court of CA, COLLINS COLLINS MUIR + STEWART LLP County of Santa Clara, 1999 Harrison Street, Suite 1700 on 1/28/2021 2:10 PM Oakland, CA 94612 Reviewed By: R. Nguyen (510) 844-5100 — FAX (510) 844-5101 Case #17CV310601 Email: rharley@ccmslaw.com Envelope: 5733869 Email: bdoucette@ccmslaw.com Attorneys for Defendant/Cross-Complainant/Cross-Defendant WEC AND ASSOCIATES, INC. (erroneously sued and served as WEC ASSOCIATES, INC.) SUPERIOR COURT OF THE STATE OF CALIFORNIA 10 COUNTY OF SANTA CLARA 11 12 YOUQIN CAO, an Individual, and CASE NO. 17CV310601 XINRONG JIANG, an Individual, [Assigned to the Hon. Socrates P. Manoukian, 13 Dept. 20] 14 Plaintiffs, WEC AND ASSOCIATES, INC.'S REPLY TO 15 VS. PLAINTIFFS AND CROSS-DEFENDANTS’ OPPOSITION TO MOTION FOR SUMMARY 16 CALIFORNIA HOME BUILDERS & ADJUDICATION DESIGN, INC. dba CALIFORNIA 17 HOMES & DESIGNS, INC., a California) [Filed concurrently with Response to Opposition to 18 Corporation; CALIFORNIA HOMES AND) Separate Statement of Opposition to Undisputed KITCHEN DESIGN CENTER, INC., a ) Material Facts and Response to Additional Disputed 19 California Corporation; WEC Material Facts] ASSOCIATES, INC., a California 20 Corporation; and DOES 2 through 100, DATE: February 2, 2021 TIME: 9:00 a.m. 21 Defendants. DEPT: 20 22 Complaint Filed: 5/19/17 23 FAC Filed: 8/15/17 Trial Date: None 24 25 AND RELATED CROSS-ACTIONS ) 26 27 Defendant/Cross-Complainant/Cross-Defendant WEC AND ASSOCIATES, INC. (“WEC”) 28 hereby submits its Reply to Plaintiffs and Cross-Defendants YOUQIN CAO and XINRONG 20705 COLLINS COLLINS 1 + STEWART 1999) WEC AND ASSOCIATES, INC.'S REPLY TO PLAINTIFFS AND CROSS-DEFENDANTS’ OPPOSITION TO Oak 612 ot (510) 844-5100 MOTION FOR SUMMARY ADJUDICATION fax (610) 244-5101, JIANG’s (collectively, “Plaintiffs”) Opposition to Defendant WEC’s Motion for Summary Adjudication (“Motion”). I. PLAINTIFFS NEGOTIATED AND AGREED TO A CONTRACT CON NING AN EXPLICIT LIMITATION OF LIABILITY CLAUSE In evaluating a motion for summary adjudication, the Court must first identify the issues framed by the pleadings as it is the crux of an adjudication motion to establish a complete defense or otherwise show there is no basis for relief by the opposition. (See Eriksson v. Nunnink (2011) 191 Cal.App.4th 826, 848.) Thus, the purpose of an adjudication proceeding is to “permit a party to show 10 that material factual claims arising from the pleadings need not be tried because they are not in 11 dispute.” (/d. (citations omitted).) Here, Plaintiffs have brought suit against WEC for breach of 12 contract and negligence based on a contract the parties negotiated and entered into prior to the design 13 and construction of Plaintiffs’ home. By signing that contract, Plaintiffs agreed to limit WEC’s 14 liability for damages stemming from any and all claims, losses, causes of action, costs, and damages 15 to a maximum aggregate sum of $100,000. Despite this, Plaintiffs now attempt to recant the terms of 16 contract to get around an unfavorable contract term. As these limitation of liability provisions are 17 found to strictly enforceable according to their terms, and given such provision here is valid under 18 California law, WEC is entitled to summary adjudication of the limitation of liability provision in its 19 Contract as noted by its Seventeenth Affirmative Defense to Plaintiffs’ First Amended Complaint, and 20 respectfully requests an order limiting the potential damages attributable to WEC, if any, to $100,000 accordingly. 21 Mt 22 Mt 23 if 24 Mt 25 Mt 26 Mt 27 Mt 28 20705 COLLINS COLLINS 2 MUIR + STEWART. 1999 Harrison St, Ste.1700 WEC AND ASSOCIATES, INC.'S REPLY TO PLAINTIFFS AND CROSS-DEFENDANTS’ OPPOSITION TO Oakland, CA 94612 Phone (510) 844-5100 MOTION FOR SUMMARY ADJUDICATION Fax (610) 844.5101, I. SUMMARY_ ADJUDICATION IS PROPER BECAUSE THERE IS NO TRIABLE ISSUE OF MATERIAL FACT THAT THE LIMITATION OF LIABILITY CLAUSE IS VALID AND ENFORCEABLE laintiffs Reliance _on California Rule of Court, Rule 3.1530 is Flawed_an Moreover, Plaintiffs Fail to Argue How They Are Prejudiced by Any Defect Plaintiffs’ primary argument in opposition to WEC’s Motion is that the Motion in its entirety should be denied due to a perceived procedural defect in WEC’s Separate Statement of Undisputed Material Facts (“Separate Statement”). Plaintiffs claim the Separate Statement fails to identify the “cause of action, affirmative defense, 10 or legal issue sought to be adjudicated” per California Rules of Court, Rule 3.1350(d). First, it is apparent 11 from the face of WEC’s Separate Statement that the Separate Statement itself is applicable to WEC’s 12 entire summary adjudication motion in compliance with Rule 3.1350(d). Further, in the avoidance of 13 any doubt, WEC specifically points to WEC’s applicable affirmative defense in its Undisputed Material 14 Fact, Number 5: “WEC’s Answer at § 17, Seventeenth Affirmative Defense (“This answering Defendant 15 is informed and believes, and thereon alleges, that at all times herein relevant, there existed a contract 16 between Plaintiffs and/or their predecessor in interest and WEC, whereby the parties negotiated and 17 expressly agreed to limit the liability of WEC.”) Thus, this appears to be a non-issue for purposes of the 18 Court deciding WEC’s Motion on its merits (WEC also notes that Plaintiffs’ responsive separate statement is structured identically to WEC’s, seemingly negating their argument here). 19 Nevertheless, assuming WEC’s Separate Statement is procedurally deficient, it is undeniable 20 that the failure to have a proper heading is not a wholly deficient fatal flaw, as was the case in Truong v. 21 Glasser (2009) 181 Cal.App.4th 102 (“... even if some additional headings had been required, the court's 22 power to deny summary judgment on the basis of failure to comply with California Rules of Court, rule 23 3.1350 is discretionary, not mandatory.”) There, the Court held that failure to conform with certain 24 requirements of Rule 3.1350 did not present a deficiency to warrant rejection of the summary judgement 25 motion as issue, and moreover the plaintiffs there did not explain how any alleged deficiency impaired 26 their ability to “marshal evidence to show that material facts were in dispute.” (/d. at 118.) Moreover, 27 courts recognize that the “the proper response in most instances, if the trial court is not prepared to 28 20705 COLLINS COLLINS 3 MUIR + STEWART. 1999 Harrison St, Ste.1700 WEC AND ASSOCIATES, INC.'S REPLY TO PLAINTIFFS AND CROSS-DEFENDANTS’ OPPOSITION TO Oakland, CA 94612 Phone (510) 844-5100 MOTION FOR SUMMARY ADJUDICATION Fax (610) 844.5101, address the merits of the motion in light of the deficient separate statement, is to give the [] party an opportunity to file a proper separate statement...” (Parkview Villas Assn., Inc. v. State Farm Fire & Casualty Co. (2005) 133 Cal.App.4th 1197, 1211.) In avoidance of any doubt, WEC recognizes Plaintiffs’ contention and has amended its Response to Plaintiffs’ Separate Statement of Opposition to Undisputed Material Facts and Additional Disputed Material Facts by Plaintiffs, attached hereto and filed concurrently. Plaintiffs have otherwise presented no evidence or argument to explain why they are prejudiced by any perceived defect and thus this issue should not be dispositive of WEC’s Motion. B. Plaintiffs Have Failed to Show That WEC Was Grossly Negligent and/or Willfully 10 r Negligently Violated Any Law and Therefore California Civil Code Section 1668 11 Is Inapplicable 12 Here, Plaintiffs fail to oppose WEC’s legal authority supporting the enforceability of the 13 limitation of liability clause between the two parties and fail to deny that Plaintiffs were informed of, 14 understood, and/or agreed to the limitation of liability clause. (See Plaintiff's Opposition, pp. 2-5.) 15 Instead Plaintiffs’ opposition papers and arguments thereto focus on whether or not a soils report was 16 ever recommended, or obtained, for their Property. Bolstered by an improper and self-serving expert 17 declaration, Plaintiffs’ appear to ignore the fact that the limitation of liability clause exists and would 18 rather attempt to pinpoint possible areas of gross negligence and violations of law its expert claims have occurred in connection with the Property. 19 Plaintiffs provide no evidence to negate the contract or the liability clause on its face. They 20 seemingly gloss over the fact that the parties have signed a limitation of liability provision that explicitly 21 applies to WEC. Instead, Plaintiffs’ opposition is premised solely upon the faulty argument that the 22 limitation of liability provision here violates public policy and in particular, California Civil Code 23 Section 1668. First, it is notable that Section 1668 only voids contractual provisions which “exempt” a 24 party from liability — Section 1668 does not speak to limitations of liability such as the case here (in 25 other words, Section 1668 is not applicable as the limitation of liability clause here does not dispose of 26 Plaintiffs’ claims, merely limits the extent of them). Furthermore, Section 1668 pertains to egregious 27 conduct such as the “failure to exercise even slight care” and/or “an extreme departure from the ordinary 28 20705 COLLINS COLLINS 4 MUIR + STEWART. 1999 Harrison St, Ste.1700 WEC AND ASSOCIATES, INC.'S REPLY TO PLAINTIFFS AND CROSS-DEFENDANTS’ OPPOSITION TO Oakland, CA 94612 Phone (510) 844-5100 MOTION FOR SUMMARY ADJUDICATION Fax (610) 844.5101, standard of conduct.” (City of Santa Barbara v. Superior Court (2007) 41 Cal.4th 747, 765.) Again, the only allegations here are breach of contract and negligence. Plaintiffs’ alternative theory relating to Section 1668 is a long-shot attempt to deem the limitation of liability clause unenforceable under Section 1668 by accusing WEC of conduct in “violation of law”. The “laws” which Plaintiffs cite to (16 CCR § 404.1 and 16 CCR § 475) reference the Code of Professional Conduct for Professional Engineering, and are as Plaintiffs admit, regulations and are thereby regulatory in nature. One “law” defines the term “responsible charge” as it applies to professional engineers (16 CCR § 404.1) while the other (16 CCR § 475) details the code of conduct for professional engineers in the State of California. Neither are the “laws” which Section 1668 pertains to and can serve as a basis to undo the enforceability of the limitation 10 of liability clause here. These are markedly distinguishable from the type of laws this Section has been 11 held to pertain to, such as Health and Safety Code violations in the Capri v. L.A. Fitness International, 12 LLC (2006) 136 Cal.App.4th 1078, as cited by Plaintiffs. 13 Moreover, despite the inapplicability of this provision, Plaintiffs have failed to make any 14 showing that WEC was grossly negligent or has violated any law. It has long been held that a party 15 cannot avoid summary judgment, or in this case adjudication, merely by asserting facts based on 16 speculation and conjecture — a party “must produce admissible evidence raising a triable issue of fact.” 17 (LaChapelle v. Toyota Motor Credit Corp. (2002) 102 Cal.App.4th 977, 981.) Similarly, and of note here, “Plaintiffs cannot manufacture a triable issue of fact through use of an expert opinion with self- 18 serving conclusions devoid of any basis, explanation, or reasoning.” (McGonnell v. Kaiser Gypsum Co., 19 Inc. (2002) 98 Cal.App.4th 1098, 1106.) “An expert's speculations do not rise to the status of 20 contradictory evidence, and a court is not bound by expert opinion that is speculative or conjectural.” 21 (id.) Here, Plaintiffs have submitted an improper and self-serving declaration of their expert witness as 22 the only evidence as to why WEC’s conduct may fall under Civil Code Section 1668 and have failed in 23 showing why summary adjudication should not be granted. On the contrary, the evidence that Plaintiffs 24 25 1 Plaintiffs’ reliance on Hanna v. Lederman (1963) 223 Cal.App.2d 786, is also distinguishable as there, the parties had 26 agreed to a complete exculpatory clause with their landlord, not a limitation of liability. Also, Plaintiffs reliance on Klein v, Asgrow Seed Co. (1966) 246 Cal.App.2d 87 is similarly misguided as such case dealt with disclaimers of liability for 27 warranties of merchantability in the seed industry. At issue here is a straightforward limitation of liability clause between an architect/engineer and a home builder. 28 20705 COLLINS COLLINS 5 MUIR + STEWART. 1999 Harrison St, Ste.1700 WEC AND ASSOCIATES, INC.'S REPLY TO PLAINTIFFS AND CROSS-DEFENDANTS’ OPPOSITION TO Oakland, CA 94612 Phone (510) 844-5100 MOTION FOR SUMMARY ADJUDICATION Fax (610) 844.5101, reference seems to double-down on the limitation of liability provision — Plaintiffs knew about it, negotiated it, agreed to it, but are now trying to avoid it some 10 years later. And finally, Plaintiffs’ characterization of WEC’s conduct as “active negligence” falling outside of the scope of the limitation of liability provision is inconsequential as Plaintiffs have failed to establish any active negligence by WEC in this matter. Contrary to Plaintiffs’ allegations, the limitation of liability provision at issue is plainly permissible under California law as such provisions have long been recognized as valid. (Markborough California, Inc. v. Superior Court (1991) 227 Cal.App.3d 705, 714.) Plaintiffs’ allegations, met with self-serving declarations and baseless testimony, merely ignore the fact that Plaintiffs provide no evidence that they did not intend the signed contract (and limitation of liability 10 provision therein) to apply to WEC. 11 C. Public Policy and California Authority Favors Enforcement of the Parties’ Mutual 12 Assent to the Terms of Their Contract 13 Despite the clear approval from the California Legislature as well as the Courts in favor of 14 contractual limitations of liability, Plaintiffs dispute the Markborough California, Inc. v. Superior Court 15 (1991) 227 Cal.App.3d 705 case and attempt to argue the limitation of liability clause in this case is 16 unenforceable as such authority only pertains to hold harmless agreements in a commercial construction 17 capacity. While Plaintiffs’ recitation of the facts of the Markborough case is generally accurate, Plaintiffs 18 ignore the applicability of Markborough in settings similar to these and fail to note that Markborough is 19 no way limited to commercial construction contracts. (See e.g. Greenwood v. Murphy (Cal. Ct. App., 20 Nov. 19, 2008, No. A114627) 2008 WL 4946224 (relying on Markborough in holding that the limitation 21 of liability provision between a homeowner and an architect/engineer has not been subject to “arms- 22 length” negotiations).) Rather, the notion of the Markborough case is that parties to a construction 23 contract — whether that construction be a man-made lake or a residential home — may entire into an arms- 24 length negotiation regarding the contract between them and if such negotiations take place, “[t]he parties 25 are bound by the terms of the contract even if they do not read it.” (Markborough California, Inc. v. 26 Superior Court (1991) 227 Cal.App.3d 705, 716.) 27 Finally, Plaintiffs do not address the point that there exists no justification for allowing Plaintiffs 28 to shift their alleged losses to WEC. As addressed in WEC’s moving papers is that there exists no 20705 COLLINS COLLINS 6 MUIR + STEWART. 1999 Harrison St, Ste.1700 WEC AND ASSOCIATES, INC.'S REPLY TO PLAINTIFFS AND CROSS-DEFENDANTS’ OPPOSITION TO Oakland, CA 94612 Phone (510) 844-5100 MOTION FOR SUMMARY ADJUDICATION Fax (610) 844.5101, justification for allowing a shift in loss between the parties. Here, Plaintiffs agreed to assume the risk that when they signed the Contract any losses over $100,000 would not be recoverable against WEC Again, WEC was prepared to assume a greater amount of risk for a larger fee and Plaintiffs new of this but choose to decline a higher fee. There is simply no justification for allowing Plaintiffs to shift this loss to WEC, who neither agreed to assume it nor was compensated for such assumption TI. WEC__REQUESTS THAT THIS COURT __SUSTAIN__ALL EVIDENTIARY OBJECTIONS MADE BY WEC AND GRANT SUMMARY ADJUDICATION IN ITS FAVOR Plaintiffs do not dispute that they entered into arms-length negotiations with WEC, rather, they 10 support it — noting the multiple meetings, drafts, and exchanges the two parties had. Nor do Plaintiffs il argue that they were in a position of unequal bargaining or power with the two individuals from WEC 12 Rather, 10 years after signing an agreement with WEC they seek to renege on one of the agreement’s 13 terms — a clause which /imits, not exculpates, the potential liability of WEC in this matter. 14 A civil jury would have nothing to adjudicate or apportion regarding potential damages if this 15 matter when to trial because WEC and Plaintiffs’ contract expressly limits WEC’s damages to $100,000 16 Plaintiffs’ self-serving, conjecture-based evidence does not refute this, it simply seeks to shift focus from 17 the issue at hand — that the Contract clearly limits the liability of WEC and WEC is entitled to have those 18 negotiated provisions enforced. WEC respectfully requests that the Court sustain all of its evidentiary 19 objections in writing, find that there is no dispute of material fact, grant summary adjudication in 20 WEC’s favor against Plaintiffs, and provide any other relief in WEC’s favor that the Court deems 21 just and proper. 22 23 DATED: January 28, 2021 COLLINS COLLINS MUIR + STEWART LLP > 24 25 on eee “BRADLEY D- DOUCETTE 26 RYAN P. HARLEY Attorneys for Defendant/Cross-Complainant/ 27 Cross-Defendant WEC AND ASSOCIATES, INC 28 20705 COLLINS COLLINS 7 MUIR + STEWART. 1999 Harrison St, Ste.1 WEC AND ASSOCIATES, INC.'S REPLY TO PLAINTIFFS AND CROSS-DEFENDANTS’ OPPOSITION TO. Oakland, CA 94612 Phone (510) 844-5100 MOTION FOR SUMMARY ADJUDICATION Fax (610) 844-5101 PROOF OF SERVICE (CCP gg 1013(a) and 2015.5; FRCP 5) State of California, ) ) ss, County of San Bernardino. ) 1 am employed in the County of San Bernardino. I am over the age of 18 and not a party to the within action. My business addres: is 10681 Foothill Boulevard, Suite 260, Rancho Cucamonga, California 91730. On this date, I served the foregoing document described as WEC AND ASSOCIATES, INC.'S REPLY TO PLAINTIFFS AND CROSS-DEFENDANTS’ OPPOSITION TO MOTION FOR SUMMARY ADJUDICATION on the interested parties in thi action by placing same in a sealed envelope, addressed as follows: SEE ATTACHED SERVICE LIST 0 GY MAIL) - I caused such envelope(s) with postage thereon fully prepaid to be placed in the United States mail in Rancho Cucamonga California to be served on the parties as indicated on the attached service list. I am “readily familiar” with the firm’s practice of collectior and processing correspondence for mailing. Under that practice, it would be deposited with the U.S. Postal Service on that same day wit postage thereon fully prepaid at Rancho Cucamonga, California in the ordinary course of business. [am aware that on motion of the party served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailin, in affidavit. 10 (BY CERTIFIED MAIL) - | caused such envelope(s) with postage thereon fully prepaid via Certified Mail Retum Receipt Requested 11 to be placed in the United States Mail in Rancho Cucamonga, California. BY EXPRESS MAIL OR ANOTHER METHOD OF DELIVERY PROVIDING FOR OVERNIGHT DELIVERY 12 (BY ELECTRONIC FILING AND/OR SERVICE)— Only by emailing the document(s) listed above to the parties in this action usin, 13 the email addresses identified on the attached Service List. During the period of Emergency Rule #12 declared pursuant to the COVID-1 Pandemic, as well as the Orders of the Governor of C: jifornia and Mayor of Los Angeles, this office is working remotely, not readily abl 14 to send physical mail as usual, and is therefore using only electronic mail as the preferred method of communication, No electroni message or other indication that the transmission was unsuccessfull was received within a reasonable time after the transmission. 15 FEDERAL EXPRESS - | caused the envelope to be delivered to an authorized courier or driver authorized to receive documents with delivery fees provided for. 16 (BY FACSIMILE) - I caused the above-described document(s) to be transmitted to the offices of the interested parties at the facsimil 17 number(s) indicated on the attached Service st and the activity report(s) generated by facsimile number (909) 581-6101 indicated al pages were transmitted. 18 (BY PERSONAL SERVICE) - I caused such envelope(s) to be delivered by hand to the office(s) of the addressee(s). 19 Executed on January 28, 2021 at Ontario, California. 20 & (STATE) - I declare under penalty of perjury under the laws of the State of California that the above is true and correct. 21 oO (FEDERAL) - Ideclare that I am employed in the office of a member of the bar of this court at whose direction the service was made. 22 DENIS WELCH 23 dwelch@cemslaw.com 24 25 26 27 28 20705 COLLINS COLLINS 8 MUIR + STEWART. 1999 Harrison St, Ste.1700 WEC AND ASSOCIATES, INC.'S REPLY TO PLAINTIFFS AND CROSS-DEFENDANTS’ OPPOSITION TO Oakland, CA 94612 Phone (510) 844-5100 MOTION FOR SUMMARY ADJUDICATION Fax (610) 244-5101, YOUQIN CAO and XINRONG JIANG vy. CALIFORNIA HOME BUILDERS & DESIGN, INC., ete., et al. Santa Clara County Superior Court Case No. 17CV310601 CCMS File No. 20705 SERVICE LIST Jeffrey H. Belote, Esq. Brian Preston, Esq. CLARK HILL LLP LAW OFFICES OF BRIAN PRESTON One Embarcadero Center, Suite 400 111 North Market Street, Suite 705 San Francisco, CA 94111 San Jose, CA 95113 (415) 984-8500 — Fax: (415) 984-8599 (408) 293-2700 — Fax: (408) 293-2711 jbelote@clarkhill.com bp@briany ‘om, ATTORNEYS FOR Plaintiff/Cross-Defendants ATTORNEY FOR Defendants/ YOUQUIN CAO & XINRONG JIANG Cross-Complainants/Cross-Defendants CALIFORNIA HOMES AND KITCHEN DESIGN CENTER, INC., and CALIFORNIA HOME BUILDERS & DESIGN, INC. Kevin P. Kennedy, Esq. E. Val Meneses, Esq. KENNEDY & SOUZA, APC 10 7964 Arjons Drive, Suite I San Diego, CA 92126 il (858) 267-4127 — Fax: (858) 267-4128 kkennedy@kennedysouza.com vmeneses@kennedysouza.com 12 ASSOCIATED COUNSEL FOR Defendants/ Cross-Complainants/Cross-Defendants 13 CALIFORNIA HOMES AND KITCHEN DESIGN CENTER, INC., and CALIFORNIA HOME 14 BUILDERS & DESIGN, INC. 15 16 17 18 19 20 21 22 23 24 25 26 27 28 20705 COLLINS COLLINS 9 MUIR + STEWART. 1999 Harrison St, Ste.1700 WEC AND ASSOCIATES, INC.'S REPLY TO PLAINTIFFS AND CROSS-DEFENDANTS’ OPPOSITION TO. Oakland, CA 94612 Phone (510) 844-5100 MOTION FOR SUMMARY ADJUDICATION Fax (610) 244-5101