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  • Axis Homeowners Association v. Almaden Tower Venture, LLC, et al. Other Petition (Not Spec) Unlimited (43)  document preview
  • Axis Homeowners Association v. Almaden Tower Venture, LLC, et al. Other Petition (Not Spec) Unlimited (43)  document preview
  • Axis Homeowners Association v. Almaden Tower Venture, LLC, et al. Other Petition (Not Spec) Unlimited (43)  document preview
  • Axis Homeowners Association v. Almaden Tower Venture, LLC, et al. Other Petition (Not Spec) Unlimited (43)  document preview
  • Axis Homeowners Association v. Almaden Tower Venture, LLC, et al. Other Petition (Not Spec) Unlimited (43)  document preview
  • Axis Homeowners Association v. Almaden Tower Venture, LLC, et al. Other Petition (Not Spec) Unlimited (43)  document preview
  • Axis Homeowners Association v. Almaden Tower Venture, LLC, et al. Other Petition (Not Spec) Unlimited (43)  document preview
  • Axis Homeowners Association v. Almaden Tower Venture, LLC, et al. Other Petition (Not Spec) Unlimited (43)  document preview
						
                                

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Gordon & Rees Scully Mansukhani LLP 275 Battery Street, Suite 2000 San Francisco, CA 94111 170V314037 Santa Clara — Civil Electronically Filed SANDY M. KAPLAN (SBN: 095065) ROBIN L. KRUTZSCH (SBN: 250059) by Superior Court of CA, GORDON & REES SCULLY MANSUKHANI LLP County of Santa Clara, 275 BATTERY STREET, SUITE 2000 on 4/8/2021 2:43 PM SAN FRANCISCO, CA 941 Reviewed By: R. Walker TEL: (415) 986-5900 / FAX: (415) 986-8054 Case #17CV314037 skaplan@grsm.com; rkrutzsch@grsm.com Envelope: 6203782 Attorneys for Defendant and Cross-Complainant, WEBCOR CONSTRUCTION, LP, BRUCE W. LORBER (SBN 074719) ROBERT B. TITUS (SBN 116299) LORBER, GREENFIELD & POLITO, LLP 13985 STOWE DRIVE POWAY, CA 92064 TEL: (858) 513-1020 / FAX: (858) 513-1002 blorber@lorberlaw.com; rtitus@lorberlaw.com Attorneys for Intervenors THE INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA and LEXINGTON INSURANCE COMPANY SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA AXIS HOMEOWNERS ASSOCIATION, a California non-profit mutual benefit corporation, ) CASE NO. 17CV314037 ») ) JOINT TRIAL MOTION NO. 15 Plaintiff, ; DEFENDANT WEBCOR ) CONSTRUCTON LP AND v. ) INTERVENORS THE INSURANCE COMPANY OF THE STATE OF ALMADEN TOWER VENTURE, LLC. a ) PENNSYLVANIA and LEXINGTON California limited liability company; WEBCOR ) INSURANCE COMPANY’S REPLY CONSTRUCTION LP, DBA WEBCOR ) IN SUPPORT OF JOINT MOTION IN BUILDERS, a California corporation and ) LIMINE TO EXCLUDE DOES 1-400 inclusive, ) PLAINTIFF’S CLAIMS FOR ) EXPERT COSTS RELATING TO ) ) 7 ) ) 7 Defendants. LITIGATION DATE: APRIL 16, 2021 TIME: 9:00 A.M. DEPT.: 10 AND RELATED CROSS-ACTION(S) -0- DEFENDANT AND INTERVENORS’ REPLY FOR MOTION TO EXCLUDE EXPERT COSTS FOR LITIGATIONGordon & Rees Scully Mansukhani LLP 275 Battery Street, Suite 2000 San Francisco, CA 94111 Defendant WEBCOR CONSTRUCTION LP DBA WEBCOR BUILDERS and Intervenors THE INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA AND LEXINGTON INSURANCE COMPANY (jointly “Defendants”) hereby submit the following Reply in support of their joint Motion in Limine to Exclude Plaintiff's Claims for Expert Costs Relating to Litigation (“Motion”). I INTRODUCTION Plaintiff does not dispute that it cannot recover costs incurred for purposes of litigation pursuant to the holdings in Stearman v. Centex Homes (2000) 78 Cal.App.4th 611, 625, E/ Escorial Owners’ Assn. v. DLC Plastering, Inc. (2007) 154 Cal.App.4th 1337, 1361-1362, Gorman v. Tassajara Development Corp. (2009) 178 Cal.App.4th 44, 83-89, and the language in Civil Code section 944. In each of these holdings, the courts found that costs must be incurred for purposes of investigation of the plaintiff's claims, including development of repair recommendations, in order to be recoverable. As such, Plaintiff fails to refute the general premise of Defendants’ Motion, which is that (1) Plaintiff only be allowed to present costs where it prevails on its claim for violation of a standard, and (2) costs relating to the litigation processes be excluded as evidence. Matters pertaining to the evidence Plaintiff seeks to present at trial are appropriate for a motion in limine. (People v. Morris (1991) 53 Cal. 3d 152, 188; see also Hyatt v. Sierra Boat Co. (1978) 79 Cal.App.3d 325, 337.) Plaintiff’s contention to the contrary and its argument that Defendant’s motion serves as a motion for summary adjudication is wholly misplaced. Motions for summary adjudication may only be stated as to particular causes of action or defenses, unless otherwise provided by stipulation of the parties and order of the court. (Code of Civil Procedure § 437c.) This motion pertains to specific testimony that Plaintiff seeks to present at trial, which is more prejudicial to Defendants than it is probative to Plaintiff's defect claims. (Evid. Code § 352.) Thus, the issue herein is properly the subject of Defendants’ Motion. For the reasons discussed herein and in the moving papers, this Court should grant Defendants! Motion to exclude Plaintiff's evidence of expert costs that are incurred for purposes of investigation of established violations. ale DEFENDANT AND INTERVENORS’ REPLY FOR MOTION TO EXCLUDE EXPERT COSTS FOR LITIGATIONGordon & Rees Scully Mansukhani LLP 275 Battery Street, Suite 2000 San Francisco, CA 94111 Il. ARGUMENT A. Plaintiff Can Only Recover Reasonable Investigative Costs for Each Established Violation. Plaintiff may only recover certain categories of costs against Defendants. Plaintiff is limited to recovery of "reasonable investigative costs for each established violation." (Civ. Code § 944.) The Code does not define "investigative costs" but prior case law provides guidance concerning a plaintiff's ability to recover expert costs in construction defect cases. (Stearman v. Centex Homes, supra, 8 Cal.App.4th at 623-625; People v. Overstreet (1986) 42 Cal.3d 891, 897.) The cases cited by Plaintiff, E7 Escorial Owners’ Assn, supra, 154 Cal.App.4th at 1361-1362 and Gorman, supra, 178 Cal.App.4th at 83-89, confirm that expert costs incurred for purposes of litigation are not recoverable. Civil Code section 944 provides as follows with respect to recovery of expert costs: If a claim for damages is made under this title, the homeowner is only entitled to damages for ... reasonable investigative costs for each established violation ... As such, not only must the cost be incurred for purposes of investigation of Plaintiff's claims, but it must also relate to an established violation. Accordingly Defendants request that the court order that evidence of the following categories of expert work and costs be excluded: . Litigation costs; . Depositions and providing questions to Plaintiff's counsel for the deposition of other witnesses; . Mediations and settlement activities; . Attending defense inspections and testing; eI Trial prep; and eI Preparation of plaintiff litigation and settlement reports. Plaintiff is only allowed to recover reasonable investigative costs pursuant to Civil Code 944. Both E/ Escorial and Gorman follow the holding in Stearman and do not allow for recovery of litigation-related costs. (E/ Escorial Owners' Assn, supra, 154 Cal.App.4th at 1361-1362 and Gorman, supra, 178 Cal.App.4th at 83-89.) None of these cases discusses the 2 DEFENDANT AND INTERVENORS’ REPLY FOR MOTION TO EXCLUDE EXPERT COSTS FOR LITIGATIONGordon & Rees Scully Mansukhani LLP 275 Battery Street, Suite 2000 San Francisco, CA 94111 effect of service of a Notice of Claim under Civil Code section 910, as was done in this case. Here, Plaintiff's Notices of Claims included detailed description of Plaintiff's claims as well as the repair recommendations. (Declaration of Robin Krutzsch submitted in support of Defendants Motions in Limine Nos. 9-15, Ex. C.) At the time Plaintiff served its Notice of Claim, it was required to state and describe all actionable claims, and such notice further includes repair recommendations for each item. As such, the presumptions should be that Plaintiff had conducted its investigation prior to service of its Notices of Claims on or before August 2, 2012.Moreover, where Plaintiff's experts’ work serves the sole purpose of continued litigation, regardless of how it may be characterized by Plaintiff, such costs should be excluded as both litigation-related and unreasonable. For such reason, Defendants propose that recoverable costs be cut-off of as of the date of service of Plaintiff's last Notice of Claim. The holding in Stearman is evaluated in detail in the Gorman case cited by Plaintiff. (Gorman, supra, 178 Cal.App.4th at 83-89.) In that case the court requires detailed findings to demonstrate that the requested expert costs were incurred for purposes of investigation and development of repair recommendations. (/d. at 87-89.) The plaintiffs counsel’s declaration stated that only investigative costs were included, and none for litigation; plaintiff's experts submitted similar declarations. (/bid.) However, the court found fault with such declarations, and pointed out particularly costs within the submitted expert invoices that would pertain to litigation, including research and analysis of allegations, consultation for settlement conference, preparation for mediation, and deposition preparation and travel. (/d. at 86, fn.27, and 87-88.) The court entertained the idea that a cost of repair could be refined by experts over time, but also questioned the credibility of, and basis for, the plaintiff's broad painting of their extensive expert costs as investigative work. (/d. at 86-88.) In Gorman, the court remanded the matter for further review, seeking additional evidence and explanation supporting the award of costs. (/d. at 89.) In contrast to the lengthy analysis in Gorman, the court in E/ Escorial includes minimal discussion regarding the difference between costs of investigation and costs for litigation. (E/ Escorial Owners’ Assn, supra, 154 Cal.App.4th at 1361-1362.) The holding in E/ Escorial, 3- DEFENDANT AND INTERVENORS’ REPLY FOR MOTION TO EXCLUDE EXPERT COSTS FOR LITIGATIONGordon & Rees Scully Mansukhani LLP 275 Battery Street, Suite 2000 San Francisco, CA 94111 which precedes Gorman, mainly upholds the trial court’s decision to allow expert costs incurred during litigation where “‘the expert team ... worked very closely together in formulating recommended scopes of repair.’ (Italics added.)” (/d. at 1362.) The ruling in E/ Escorial rested heavily on the appellate court’s holding that the contractors failed to present and dispute the basis of the court’s finding as to the recoverable expert costs. (Jbid.) The court upheld the trial court’s ruling that the requested expert costs were recoverable, because it found that the contractors had not demonstrated that the trial court could not have inferred that the plaintiff's experts’ services fell within accepted categories including preparation of repair recommendations, discovery of construction defects, and investigation of those claims. (Jbid.) The ruling in Gorman followed El Escorial and provides additional discussion of recoverable expert costs and the distinction between litigation and investigative costs. Accordingly, Plaintiff should not be allowed to present evidence of costs that were incurred for purposes of litigation as opposed to investigation of established violations. B. The Subject of The Motion is Appropriate for Pre-Trial Determination. Contrary to Plaintiffs contention, this Motion is not a disguised motion for summary adjudication. Motions for summary adjudication may only be stated as to particular causes of action or defenses, unless otherwise provided by stipulation of the parties and order of the court, and thus this issue was not one that could be presented for summary adjudication. (Code of Civil Procedure § 437c.) Defendants are not asking the court to dispose of an entire cause of action as was the case in Amtower v. Photon Dynamics, Inc. (2008) 158 Cal.App.4th 1582, 1593, and R&B Auto Center, Inc. v. Farmers Group, Inc. (2006) 140 Cal.App.4" 327, 333. This motion pertains to specific evidence that Plaintiff seeks to present at trial, which is more prejudicial to Defendants than it is probative to Plaintiff's claims, as discussed herein. (Evid. Code § 352.) Matters pertaining to the evidence Plaintiff seeks to present at trial are appropriate for a motion in limine. (People v. Morris, supra, 53 Cal. 3d at 188; see also Hyatt, supra, 79 Cal.App.3d at 337.) “Courts have inherent power, separate from any statutory authority, to control the litigation before them and to adopt any suitable method of practice, even if the method is not specified by statute or by the Rules of Court. (Amtower, supra, 158 4. DEFENDANT AND INTERVENORS’ REPLY FOR MOTION TO EXCLUDE EXPERT COSTS FOR LITIGATIONGordon & Rees Scully Mansukhani LLP 275 Battery Street, Suite 2000 San Francisco, CA 94111 Cal.App.4th at 1595.) Evidence of unrecoverable expert costs would serve no purpose but to confuse the issues, waste unnecessary resources, and cause undue prejudice to Defendants. Thus, the evidence of expert costs at issue herein are properly the subject of this pre-trial Motion. Ill. CONCLUSION As discussed herein, Defendants request that the Court issue an order to exclude evidence of Plaintiffs expert costs incurred for litigation purposes and for purposes other than investigation of established violations and preparation of repair recommendations. Defendants request that the court further order that it be presumed that costs incurred after service of the Notices of Claims are not incurred for purposes of investigation of established violations and thus not recoverable under Civil Code section 944. Dated: April 8, 2021 GORDON & REES SCULLY MANSUKHANI LLP By: Sandy M. Kaplan SANDY M. KAPLAN ROBIN L. KRUTZSCH Attorneys for Defendant and Cross-Complainant, WEBCOR CONSTRUCTION, LP 5. DEFENDANT AND INTERVENORS’ REPLY FOR MOTION TO EXCLUDE EXPERT COSTS FOR LITIGATIONPROOF OF SERVICE Axis Homeowners Association v. Almaden Tower Venture, LLC Santa Clara County Superior Court - Case No.: 17CV314037 Tam a resident of the State of California, over the age of 18 years, and not a party to the within action. My business address is: Gordon Rees Scully Mansukhani LLP 275 Battery Street, Suite 2000, San Francisco, CA 94111. On the date indicated below, I served the within document JOINT TRIAL MOTION NO. 15 DEFENDANT WEBCOR CONSTRUCTION LP AND INTERVENORS THE INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA AND LEXINGTON INSURANCE COMPANY’S REPLY IN SUPPORT OF JOINT MOTION IN LIMINE TO EXCLUDE PLAINTIFF’S CLAIM FOR EXPERT COSTS RELATING TO LITIGATION by ELECTRONIC SERVICE via File&ServeExpress E-service in this action was completed on all parties listed on the case File&SErveExpres site. by transmitting via facsimile the document(s) listed above to the fax number(s) set forth below on this date before 5:00 p.m. by electronically transmitting the document(s) listed above to the person(s) at the address(es) set forth below on this date before 5:00 p.m. by placing the document(s) listed above in a sealed envelope with postage thereon fully prepaid, in United States mail in the State of California at San Francisco, addressed as set forth below. I declare under penalty of perjury under the laws of the State of California that the above is true and correct. Executed on April 8, 2021 at San Francisco, California. Roseann Minato Roseann Minafo