Preview
GREGORY B. SCHER- State Bar No. 137228
WOOLLS 8c PEER
A Professional Corporation
One Wilshire Boulevard, 22" Floor
Los Angeles, California 90017 SAN MATEO COUNTY
Telephone: (213) 629-1600
Facsimile: (213) 629-1660 M .220
Attorneys for Defendants Glee oi
j
I i. urt
FARMERS INSURANCE EXCHANGE and By
6 TRUCK INSURANCE EXCHANGE oEIShr CLeIIKI
G
0p
7
$ SUPERIOR COURT OF THE STATE OF CALIFORNIA
G~o( 9 FOR THE COUNTY OF SAN MATEO, CENTRAL BRANCH
10
MICHAELCHANG, an individual, Case No.: CIV 489065
Plaintiff, OBJECTION TO RESPONSE TO ORDER TO
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V. SHOW CAUSE
5 3. 13
FARMERS INSURANCE COMPANY, INC.,
FAKERS GROUP, INC., FARMERS Date: June 3, 2014
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INSURANCE EXCHANGE AND TRUCK Time: 9:00 a.m.
~ fgI INSURANCE EXCHANGE, reciprocal
insurance exchanges; Does 1to 99,
inter-
Inclusive,
Dep't: 7
'I> 16
Defendants. BY FAX
17
18 Farmers Insurance Exchange and Truck Insurance Exchange ("Farmers" ), are in receipt of
19 documents filed by the Garrison law firm and the Kalfen law firm in the Kartal v. Chang, er al.
action on behalf of Roxanne Chang and Hea Ja Yang titled "Response To Order To Show Cause..."
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(hereaAer "Response to OSC").
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The "Response to OSC" is filled with inaccuracies, improper argument and documents that
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appear to be protected by the mediation privilege. Farmers objects to the attempt to use that
documentation in an effort to avoid the clear terms of the Settlement Agreement of the parties as put
26 on the record on January 27, 2014 in the Chang v. Farmers litigation and the even clearer terms of
that settlement as set forth in an 18 page written settlement agreement signed by both Michael and
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OBJECTION To RESPONSE To ORDER To SHOW CAUSE
390299.I
Roxanne Chang t as well as by Farmers, Great American Insurance Company and Fireman's Fund
1
Insurance Company. (Copy attached hereto as Exh. No. 1).
Farmers is uncertain whether this Response to OSC, apparently filed on May 6, 2014, is
4 intended in opposition to Farmers'otion To Enforce the Chang v. Farmers Settlement Agreement,
5
filed on April 29, 2014. (See pages 5 —7 of the Response to OSC). Ifso, Farmers responds that the
documentation attached to the Response to OSC and supporting Declaration actually support
Farmers'nterpretation of the settlement reached between the parties and put on the record on
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January 27, 20 1 4,and the resulting Settlement Agreement signed by the parties to the Chang v.
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10 Farmers litigation (Michael Chang and Farmers), as well as by Roxanne Chang, Great American,
and Fireman's Fund.
12
The issue argued in Garrison's and Kalfen's "Response to OSC" is whether Farmers'ayment
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of $ 1,000,000 to Michael Chang resolved any claim for additional defense expenses, which are now
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claimed by Garrison and Kalfen. Farmers'osition is that on January 27, 2014 it agreed to pay the
o sum of $ 1,000,000 to Chang to resolve all remaining issues between the parties. The transcript of
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17 January 27, 2014 makes clear that Farmers agreed to pay $ 1,000,000 to obtain a dismissal of Chang's
18 bad faith action (p. 5, lines 12-16). This Court then specifically asked the parties during that hearing
ifthe settlement reached between the Changs and Farmers required each party to bear their own
20
attorney fees. All parties responded affirmatively. (p. 5, lines 17-22). (Copy attached hereto as
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Exh. No. 2).
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Perhaps more directly, however, the 18 page written settlement agreement signed by all
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parties, including both Roxanne and Michael Chang on February 4, 2014, expressly provided at
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paragraph 3(a), at page 11, that in exchange for Farmers'ettlement payment, Chang would "dismiss
26 his operative complaint in the Chang v. Farmers Action in its entirety and with prejudice." (Exh. 1,
to attached Scher Declaration, at p. 11, paragraph 3).
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OBJECTION TO RESPONSE TO ORDER To SHOW CAVSK
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That same written settlement document, signed by both Michael and Roxanne Chang, further
provided at pages 12 and 13, paragraph 4(c) that:
4(c) Effective upon Farmers payment of the settlement payments provided
in paragraphs 2.a.and 2.b. of this Agreement, the Chang's release,
remise, acquit, covenant not to sue, and forever discharge Farmers...
from and against any past, present and future Claims, of any type
whatsoever, that the Chang's ever had, now have, or hereafter may
have, relating to:
10 (i.) The Kartal Action, the Tank Fund Action, or the Chang v.
Farmers Action;
(v.) Claims for insurance benefits, includina both defense costs
12
5 )-13 and indemnification, with respect to any Claims described in
+1
14 paragraph 4.c. of this Agreement....
gI
5
II) l5 (Exh. No. 1, at pp. 12 and 13) (emphasis added).
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ig As Farmers has pointed out on multiple occasions, this was the "deal" that Farmers agreed to,
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and this was the settlement placed on the record in open court and then confirmed in writing in a
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settlement agreement signed by all of the parties. Farmers has been ready to pay the $ 1,000,000
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settlement amount to Chang for many weeks, and only needs Chang, the Garrison and Kalfen law
firms, and the Stanzler law firm to finally determine who should take custody of those funds.
It is Chan@, and his attorneys Garrison and Kalfen, who now seek to change the deal they
agreed to in January 2014. Indeed, the documents attached to the Response to OSC directly reflect
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the Changs'ntent to seek to "renegotiate" the deal the Changs had earlier agreed to. See, e.g.,Brian
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Kelleher's April 16, 2014 memorandum: "Gregg has not been involved in the settlement re-
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negotiations", and his einail of April 30, 2014 which discusses "Oi3tion A —Michael drops his efforts
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to force Farmers back to the table". We are not certain of the point the Response to OSC is trying to
PRWTED OH RECYCLED PAPER
OBJECTION To RESPONSE To ORDER To SHOW CAUSE
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make with those documents, which are in any event inadmissible for a variety of reasons, but the
effort to "renegotiate" should be rejected.
On January 27, 2014, Farmers agreed to pay Chang $ 1,000,000 to be done with the litigation!
4 This included any unpaid Farmers'efense obligation Garrison and Kalfen now claim Chang owes
5
to them. Of course, Farmers'efense obligation was owed to Chang, not to the attorneys Chang
hired to defend his interests. The Chang's agreed to accept the $ 1,000,000 both orally and in writing
and the written settlement agreement all parties signed confirmed Farmers'1,000,000
8 payment
specifically released Farmers from any further "claims for insurance benefits, including both defense
10 costs and indemnification".
This Court should not allow the Garrison law firm, the Kalfen law firm, Michael Chang, or
Roxanne Chang to recant their agreement reached in open court and in an 18 page written settlement
w 3. 13
agreement. Farmers respectfully asks this Court to approve its Motion to Enforce the Settlement
l4
I Agreement.
0 Exhibit No. 1 attached hereto is a true and correct copy of the Confidential Settlement And
Il 16
17 release signed by Michael Chang, Roxanne Chang, Farmers, Fireman's fund and Great American.
18 Exhibit No. 2 attached hereto is a true and correct copy of the Reporter's Transcript of the
hearing in these matters held on January 27, 2014.
20
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DATED: May 12, 2014 WOOLLS 8c PEER
22 A Professional Corporation
23
24 GREGORY
Attorneys
g SCHER
for defendants
25 FARMERS INSURANCE EXCHANGE and
TRUCK INSURANCE EXCHANGE
26
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P W f I
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CONFIDENTIALSETTLEMRNT AND PR> >4SE
This Settlement Agreement and Release (the "Agreement" ) is entered iato as of the
Execution Date by and between Michael Chang, as an individual and dba Sunrise Cleaaers, Inc.,
and Roxaane Chang (collectively, the "Changs," as defined in Paragraph 1 of this Agreement),
Great American hstuaace Company and Great American hsurance Company of New York,
formerly known as American National Pire hsurance Company (collectively, Great American,"
as defined in Paragraph l), Farmers hsurance Exchange aad Truck hsurance Exchange
(collectively, "Farmers," asdefined m Paragraph 1), and Firemaa's Fund hsuamce Company
PPireman's Fund," as defiaed in Paragraph 1).
Great Americaa, Farmers, and Fireman's Fund may be individually referred to ia this
Agreement as an "Insurer" and collectively referred to as the "Instuers." The Changs, Great
American, Parmers, and Fireman's Fund may be individually referred to in this Agreaaent asa
"Party" and collectively refined to as the "Parties."
RECITALS:
WHEREAS,
A. Michael Chang has owaed real property located at 233 and 235 Bahtwin Avenue
in San Mateo, California siace 1977; Roxanne Chang formerly owned the Baldwin Avenue
Property together with Michael Chang, aad the Changs operated a dry cleaners at the Baldwin
Avenue Property from 1977 to 1981 under the business name Sunrise Cleaners, Inc.; aad
B. Grace Yamaguchi or members ofher family had previously owned and operated
dry cleaners at the Baldwin Avenue Property since the 1930s; and
C. Bemn~mg ia 1981, the Changs leased a portion of the Baldwin Aveaue Property,
located at 235 Baldwin Avenue, to Christopher Chang (who ia not related to Michael Chang or
Roxaane Chang), and Christopher Chang owned and operated the drymg cleaniag business at
235 Baldwin Avenue for several years;and
D. Eun Kyung Lee leased the premises at 235 Baldwin Avenue from the Changs
be~ni~g in approximately 1989; Lee operated the dry cleaning business at 235 Baldwin
Avenue uatil approximately 1996; other tenants of Michael Chang have operated the dry
cleaners at 235 Baldwin Avenue since 1996; and
E. Beeinnmg ia 1989, Danilo Fabbri (referred to as "Fabbri ) leasedthe premises at
233 Batdwin Avenue from the Changs, and operated the Bells Mangiata restaurant at that
location; in 1991, Bilal Kartal (referred to as"Kartal") bought the restaurant business from
Fabbri, and Kartal has leased the premises at 233 Baldwin Avenue from Michael Chang and
operated the Bella Maagiata restaurant there since 1991; and
P. After the Changs acquired the Baldwin Avenue Property and the Sunrise Cleaners
business, American National Fire Insurance Company, now known as Great American Insurance
Company of New York, issued Policy No. 1311715 to Sunrise Cleaners for a policy period from
December 15, 1977 to December 15,1980; Great American Insurance Company later issued
Policy No. BP 2180587 to Michael Chmg for a policy period from December 15, 1980 to
December 15, 1983; neither Great Americaa nor the Change have copies of these policies, aad in
the absence of evidence establishing the policy tenne, Great American and the Change stipulated
to certainterms ofthese policies;and
G. After Christopher Chang purchased the Sumise Cleaners dry cleaning business,
Fiieman'e Fund Insurance Company issued a primary insurance policy aad aa umbrella
insurance policy to Christopher Chaag, which policies are withia the definition of the "Firemen's
Fund Policies" in Paragraph 1; and
H. Farmers Insurmce Exchange and Truck Insurance Exchange issued various
insurance policies to the Change for policy periods between 1991 and 1996, and later issued
various insurance policies to Michael Chang for policy periods between 1996 aad 2006, which
policies are within the definitioa of the "Farmers Policies" in Paragraph 1; and
I. Ia 2006, Kartal filed a lawsuit against Michael Chang, entitled BilalXurtal v.
Michael Chang, et al., CaseNo. CIV 458146, in San Mateo County Superior Court (hereafter,
the 'Xarbd Action"); Kartal'e complaint ia the Kartal Actioa alleged that that a bad odor had
begun,to develop in the banquet room at the Bella Mangiata restauraat "within the last three or
four years" before the complaint was filed in 2006,alleged that the odor had worsened by 2005
and later became noticeable ia other areas of the restaurant,and alleged that Kartal's restaurant
lost business due to the odor, Kartal's complaint alleged that the odor was caused by
con~t»tion from abandoned dry cleaning facilities locatedat 233 Baldwin Avenue; and
J. After the Kartal Action was filed, the San Mateo County Health Departinent
ordered Michael Chang to investigate and otherwise addms centum»lion involving a dry
cleaning solvent, refened to as Stoddard solvent, at and from the pmperty at 233 Baldwin
Avenue; and
~
K. In 200 Michael Chang tendered claims to Farmers for insunmce benefits with
respect to the Kartal Action; and at that time Farmers dechned to defend or indemnify Michael
Chang with to the Ksrtal Action; aad
L. In December 2007, Michael Chang tendered claims to Great American for
insLuance benefits concerning Claims reyirding con~~i»tion at the Baldwin Avenue Property;
specifically, at that time Michael Chang requested defense and indemnity as to the complaint
filed in the Kartal Action, and requested defense and mdemaity as to government agency orders
requiring him to investigate and otherwise address con>mI»idion at aad Som the property at 233
Baldwia Avenue; in 2008 Gnat American declined to deknd or indemaify Michael Chang with
respect to the Kartal Action and the government orders; snd
M. After Farmers and Great American declined to defend and mdemnify Michel
Chang with respect to the Kartal Action; the Change filed croee~mplaints in the Kartal Action
against Grace Yamaguchi, Christopher Chang, and other Persons who had operated Sunrise
Cleaners; and
N. Great Americaa contends that after the Change filed cro~mplaints in the
Kartsl Action, the Change sought to'persiiade the cio~fendante to file cross-complaints
against the Changs, for the improper purpose of manufiehxring insurance claims against Great
American; and
O. The Changs deny that they sought to persuade the cross-defendants in the Kartal
Action to file cross~omplaints against the Changs for the purpose of manufixcturing insurance
claims; snd
P. In February 2009, the Special Master and the Court in the Kartal Action enteml
Pre-Trial Order No. 5 in that action, "deeming" that other parties hsd Sled cross-complaints
against Michael Chang; and
Q. Great American contends that the Changs sought entry ofPre-Trial Order No. 5
as part of an improper efRxt to manufacture insurance claims against Great American; the
Chaugs deny that they sought entry of Pre-Trial Order No. 5 for the purpose of manufactuxmg
insurance claims; and
R. In Februsxy 2009, Michael Chang tendered claims for defense and indeniit to
Great American with respect to the "deemed" cross-complaints in theKartal Action; Great
Aznerican contends that it hasno obligation to defend or indemnify the Changs with zespect to
the Kartal Action; nevertheless, in Febxuaxy 2009 Great American agreed to defend Michael
Chang with respect to the Kartal Action, under a complete zeservation of rights, inciudmg the
reservation of the right to deny coverage and to seek reimbursement of all amounts paid to or on
behalf of Michael Chang; and
S. h April2009, Michael Chang asked Great Amexipm to pay certain legal feesand
costs he incurred, or planned to mcur, to file a suit challenginga decision by the State Water
Resources Control Board denying Michael Chang's application for 5 ~g trom the
Underground Stoxage Tank Fund for pollution clean-up at the Baldwin Avenue Property
(hereafter referred to as the "Tank Fund Action"); Gzeat American contends that it hasno
obligation to the Chants with respect to the Tank Fund Action; nevertheless, Great American
agreed to pay certainfees and costs incurred by Michael Chang to prosecute the Tank Fund
Action, subject to Great American's complete resennxtion ofxights, including the reservation of
the xight to deny coverage and to seek xeimbuzsement of all amounts paid to or on behalf of
Michael Chang; and
T. In 2010 and 2011, cross-defendants in the Kartal Action filed actualcross-
'omplaints against the Changs in that action; the Changs tendered chins for defense and
1 ~~~ty to Great American with respect to thoseactual cross-complaints; Great American
contends that it hasno obligation to defend or t~~~~iYy the Changs with respect to the Kartal
Action; nevertheless, Gxeat American agreed to defend the Changs with xuspect to the cross-
complaints against them, under a complete reservation ofrights, including the reservation of the
right to deny coverage and to seek reimbursement of all amounts paid to or on behalf of the
Chaugs; and
U. In 2010, the California Regional Water Quality Contxol Board (the "Water
Board") ordered the Changs to investigate PCB contamination at aad Sum the dxy cleaning
operations at 235 Baldwin Avenue in San Mateo; and
V. The Chaags tendered claims to Great American for defense and indemnity with
respect to costs of investigatingPCS cantem~tioa at aadlrom the preanses at 235 Baldwin
Avenue; Grelt American contends that it hasno obhgation to defend or indcsaaify the Changs
with respect to such site investigation;nevertheless, Great Ameriom paid certain site
investigation costs, under a complete reservation of rights, including the reservationof the right
to deny coverage and to seek reimbursement of all amounts paid to or on behalf of the Changs;
aad
W. Great American contends that the Changs had asked the Water Board to mphe
the Changs to investigate PCB con~1»tion at and Snm 235 Baldwin Avenue in an improper
eSort to maauhcatre an insurance claim with respect to investigatioa and cleanup of such PCE
contamm~oa; the Chsngs deny that they sought to geaerate Clains against themselves; and
X. In 2012, Great American filed a lawsuit against the Chan~ ia the United States
District Court for the Northern District of California, entitled Great Amerfcan Insurance
Company, et al. v. Mchael Chang, et al., CaseNo. 3: 12'-00833CC (hereafter referred to as
the Great American v. Chang Action"), seekiag a declarationthat Great American had and has
no duty to defend or fnd~~ify the Changs with respect to the Kartal Actioa, the Tank Fund
Action, or other'laims relating to con~~i»>oa at and fiom the Baldwin Avenue Property, aad
seehag reimbursement fiom the Changs of all amounts that Great American paid to or on behalf
of the Chaags with respect to the Kartal Action, the Tank Fund Action, or other Claims rehLting
to the Baldwm Avenue Property; and
Y. On June 19, 2013, the Court in the Great American v. Chang Action entered
partialsam~>~ judgment for Great American, ruling that Great American had and has no duty
to defend or indemnify the Cbangs with respect to the Kartal Actioa, the Tank Fund Action, or
site investigationrehLtiag to the Baldwia Avenue Propert; and
Z. On November 6, 2013, the Court in the Great American v. Chang Action entered
summary judgment for Great American, ruling that Great American is eatitledto reimbursement
fium the Changs of the amounts that Great Americaa paid to or an behalf of the Chaags with
respect to the Kartal Action, the Tank Fund Action, and site investigation coacermg the Baldwin
Avenue Property; and
AA. On December 13, 2013, the Court in the Great American v. Chang Action entered
judgment in favor of Great American and against the Changs in the amount of $ 884,101.59, sad
in addition awarded pre-judgment interest to Great American in the amount of $ 104,482.90; and
BB. The Changs have filed a notice of appeal with respect to the judgment entered ia
the Great American v. Chang Action; and
CC. Michael Chang had previously filed a separate action against Farmers, entitled
Chang v. Farmers Insurance Exchange, et al.,San Mateo County Superior Court Case No.
(here@ter referred to asthe "Chang v. Farmers Action"), in which Michael Chang
sought a deterraiaatioa of coverage and other relief with respectto his insurance claims against
Farmers relating to the Kartal Action; Farmers contends that the Changs are not entitled to the
relief sought in the Chmg v. Farmers Action; aad Great American has filed a judgment lien in
the Chang v. Farmers Action baaed on the judgment Great American obtained in the Great
American v. Chang Action; and
DD. Fsxxners contends that it hasno obligation to defend or uMlemnify the Changs with
respect to the Kartal Action, the Tank Pbnd Action, or site investigation concerning
conte t»tion at or Rom the Baldwin Avenue Property; nevertheless, in April 2013 Farmers
agreed to participatein the defense of the Changs in the Ksrtal v. Chang Action, under a
complete xeservation ofxights; and
EE. The Change had previously tendered claims to Fireman's Fund with respect to the
Kartal Action and site investigation concerning the Baldwin Avenue Property, under the
Fireman's Fund Policies issued to Christopher Chang; the Changs contend that they are entitled
to insurance benefits as insureds or additional insuredsunder the Fireman's Fund Pohcies; and
FF. Fireman's Fund contends that it hasno obligation to provide imuaxm benefits to
the Changs under the Fireman's Fund Policies; nevertheless, Fireman's Fund agreed to pay
certain costs the Chsngs incurred for investigation of con~~i»tion at snd &om the Baldwin
Avenue Property, under a complete reservation ofrights; and
GG. Great American has requested that Farmers pay Great American amounts that
GxoLt American had paid for the defense of the Changs in the Kartal Action; and Great American
hairequested that Fireman's Fund pay Great American certam amounts that Great American had
paid for site investigationwith respect to con~~~~tion at and Som the Baldwin Avenue
Property; and the Change have also ro}uested that Fmners and Fireman's Bud pay Great
American such amounts; and
HH. The Chsngs have incuned and willm the Sxtuxe incur certain expenses and losses
arising out of Claims concerning cont ~in»on at snd Sum the Baldwin Avenue Property; and
IL In aaeffort to avoid further litigation costsaud the uncertainty of the disposition
of Claims among them, Farmers and the Changs wish to resolve the Claims raised in the Chang
v. Faxmers Action; and
JJ. In an effort to avoid the uncertaintyof the disposition ofthe xespective Claims
among or betweea them, Farmers, the Changs, and Great American wish to resolve Claims
raised by Great American and by the Chsngs that Farmers pay Great American the amount that
Great American paid for the defense of the Kartal Action; and wish to resolve the judgment lien
that Great American filed in the Chang v. Farmers Action; and
KK. In an effoxt to avoid the uncertainty of the dispositionof Claims among or
between them, Fireman's Fund, the Changs, and Great American wish to resolve Claims xaised
by Great American and by the Chsngs that Fireman's Fund pay Gxeat American part of the
amount that Great American paid for costs of mvestigating contanun~tion at and Sam the
Baldwin Avenue Property; and
LL Great American has agreed to compromise and accept less than the amount of the
judgment it obtainedin the Great American v. Chang Action, in exchange for payments provided
under this Agreement and for ieleases &om sll Claims by any Party relating to the Baldwin
Avenue Property, as provided in this Agreement; and
MM. the Parties intend to adopt, by way of compromise and without prejudice to or
waiver of their respective positions in other matters,without irial or adjudication of any issues of
hct or law, without the Changs'dmission of liabilityor responsibihty for releaseof hazaalous
materials or cont~i~»on of soil and groundwater at and Som the Baldwin Aveirue Property,
and without an admission of liabilityor responsibihty by Great American, Farmers, or Fireman's
Fund under the insurance policies they issued, a 5dl aud final settlement ofthe Claims released
in this Agreement.
AGREEMENTS:
NOW, THEREFORE, in full considaation of the foregoing recitals and the mutual
agreements and releases contained in this Agreement, the Partiesagree as follows:
1. Deflni5ons
The following definitions willapply to the listed terms wheever those terms appear
throughout this Agreement. Bach defined term stated in a singular form shall mctude the plural
form, each defined term stated in plural form shall include the singular form, and each defined
term stated in the masculine form or in the & ~me form shall include the other. The words
"include," "includes," and "including" are not limiting. 'Ihe words "any" and "all" mean "any
aud all." The phrases "relating to" and "arising out of'ean "relating to, in any way connected
with, concerning, with regard to, by reason of; based on, or arising out of."(The terms
"include," "includes," "including," "any," "all," "relating to" and "arising out of're not
capitalized in this Agreement)
a. Affilhte
The tenn "A%hate" means a Person that is controlled by, under common control with, or
controls another specified Person.
b.. Agents
The term "Agents" means the past,present, and Qture Afhllat~pimcip
managers, agents, servants, employees, represenhtives, officers, directors,shareholders,
partners, heirs,executors, independent contractors trustees,trustors,and administrators o fa
specified Person. For the purpose of intequeting this Agreement, none of the Partiesis an Agent
of any other Party.
c. Baldwin Avenue Property
The term "Baldwin Avenue Property" means:
(i) the real property located at 233 Baldwin Avenue in Ssn Mateo, Califoraia, including any
structures,tanks, pipes, apphances, Substances, or other items located at that property, whether
above the ground, on the ground, or uaderground, in the past,
present, or future; and
(ii) the real property located at 235 Baldwin Avenue in San Mateo, California,
including any structures, tanks, pipes, appliances, Substances, or other items
located at that property, whether above the ground, on the ground, or
underground, ia the past,present,ar future; and
(iii) any land, soil, water,gmundwater, residence, structure,air, or other property of
any type that is or was actually or allegedly damaged by, threatened by, or
otherwise affected by any Substance actually or allegedly existing, present,
discharged, disposed, deposited, released or escaped at or f'rom any property
described in Paragraphs l.c.(i) and/orl.c.(ii) in the past,
present, or future; and
.
(iv) any land, soil, water, groundwILter, residence, structure,air, or other property of
any type thatis or was actually or allegedly damaged by, threatened by, or
otherwise affected by any effort to iavestigate,rcsnediate, or otherwise address or
respond to any Claim relating to aay Substance actually or aHegedly existing,
present, discharged, disposed, deposited, released or escaped at or &om any
property described in Paragraphs.l.c.(i), l.c.(iii) in the past,
l.c.(ii), and/or
present, or futme.
The term "the Changs" means Michael Chang, as an individual and dba Sunrise Cleaners,
Inc. or dba Sunrise Cleaners; Roxaane Chang, as aa individual and dba Sunrise Cleaners, Inc. or
dba Sunrise Cleaners; their spouses, aay former spouses, children, dependents, heirs, partners,
partaerships, joint veatures, aad all Af51iates and Agents of any of the Penons listed in this
Paragraph 1.d. At all times relevant to Claims that are the subjectof this Agreement, Brian
Kelleher was and is anAgent of Michael Chang and Roxanne Chang.
e. Claim
'Ihe term "Claim" means any past, present, or future claims, liabilities, rights, obligations,
subrogation rights, contribution rights, indemnity rights, counts,demands, actions, causes of
action, lawsuits, complaints, eros--complaint, counter~piaints, potentially responsible party
letters,notices ofreslensiMity, requests, letters,~I»~tive proceedmgs, inquiries, orders,
notices, and allegstioas ofany aature, character, or kind, whether seeking recovery for actual or
alleged bodily mjury, personal injury, pmperty damage, or any other injmy, damage or harm of
aay nature, cieaLcter, or kind, whether or not presently known or suspected, whether seekmg
A»eyes (consequential or punitive), costs,expenses, injunctive relief; or aayother kind or type
of relief, including but not limited to any request for coverage (for defense, in~»m6cation, or
any other actual or alleged policy benp6t) under one or mare of the policies issued by any ofthe
Ismuurs, and any assertion relatiag to the haadlingor dispositioa of any request for coverage
tendered to any of the Insurers,or any other entity or individual by or on its behalf,whether
sounding in tort, breach of contract,breach of any duty of good faith aad fair dealing,bsd Suth,
breach of statutory duties, actual or constructive &aud, actual or constructive breach'of fiduciary
duty, or any other thewy.
e. Execution Date
The term "Execution Date" means the earliestdate on which aH of the Partieshave
executed this Agreement.
f. Farmers
The term Farmers" means:
(i) Farmers IMurance Ba ~~~~e and Truck Insurance Exchange; and
(ii) all past,present, and Rture Agents of Fsrnlrs IMurance Exchange and/or Truck
Insurance Exchange; and
(iii) all Af6hates, parent corporations, subsidiaries,joint ventures, predecessors,
successors, transferees and assigns of Farmers Insurance Exchange and/or Truck
Insurance Exchange; all the predecessoxs and successors of the Persons mentioned
in this Paragraph l.f.(iii);
and allthe past,inesent, and Srture assigns of such
Periona;
(iv) any other Person or entity that was in the past,
is now, or is in the future relatedto
or associated with Farmers Insurance Exchange and/or Truck Insurance
Ex~~~~e, including auy corporations aequi'y, merged mto, or combined with
those corporations or their predecessors or successors, and all the past,present;
and future parent corporations, subsidiarie, Af61iates, successors, and assigns of
the Persons mentioned in this Paragraph I.f(iv);and,
(v) any and all Agents of the Persons mentioned in any of the subparagraphs ofthis
Paragraph I.f
g. Farmers PoMes
The term 'Farmers Policies" means:
(i) Policy No. , issuedby hr a policy period Sum
; and
(ii) Policy No. , issuedby for a policy period Som
; and
(iii) Policy No. , issuedby for a policy period Smn
(ii) any and all other known and unknown insurance policies of any kind
whatsoever issued or allegedly issued by Farmers.
h. Fireman's Fund
The tenn "Fireman's Fund" means:
(i) Fireman's Fund Insurance Company; aud
(ii) all past,present, and future Agents of Fireman's Fund Insurance Company; and
(iii) aU Af61iates, parent corporations, subsidiaries,joint ventures, predecessors,
successors, transferees and assigns of Fireman's Fund Insurance Company; all the
predecessors aud successors ofthe Persons mentioned in this PaaLgrsph 14.(iii);
and all the past,present, and future assigns of such Persons;
(iv) any other Person or entity that was in the past,is now, or is in the tbture relatedto
or associated with Fireman's Fund Insurance Company, including any
omporations acquired by, merged into, or combined with those corporations or
their predecessors or successors, and all Ihe past, present,
aud future parent
corporations, subsidiaries,Af61iates, successors, and assigns of the Persons
mentioned in this Paragraph l.h.(iv); and,
(v) auy and all Agents of the Persons mentioned m any of the subparagraphs of this
Paragraph 1.h.
L Fireman's Fund Policies
The term "Fireman's Pund Policies" means:
(i) Policy No. to Christopher
No.,
. issued Chang by for
a policy period Ann to ; and
(ii) Policy issued to Christopher Chang by for
a policy period from to ; and
(iii) any and all other known and unknown insurance policies of any kind
whatsoever issued or allegedly issued by Fireman's Fund.
Great American
The tean "Great American" means:
(i) Great American Insurance Company, and Great American Imnuance Company of
New York, formerly known as American National Pire Insurance Company; and
(ii) all past,present, and future Agents of Great American Insurance Company and/or
Great American Insurance Company ofNew Yorlr, and
(iii) all Af51iates, parent corporations, subsidiaries,joint ventures, predecessors,
successors, transferees and assigns of Great American Insurance Company and/or
Great American Insurance Company ofNew York; all the predecessors and
successors of the Persons mentioned in this Paragraph l.j.(iii);and all the past,
present, and Rture assigns of such Persons;
(iv) any other Person or entity that was in the past,
is now, or is m the futu're rehted to
or associated with Great American In@mace Company or Great American
Insurance Company of New York, inchding any corporations acqmred by,
merged into, or combined with those corporations or their predecessors or
successors, and all the past,present, and future parent corpomtions, subsidiaries,
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GREGORY B. SCHER- State Bar No. 137228 WOOLLS 8c PEER A Professional Corporation One Wilshire Boulevard, 22" Floor Los Angeles, California 90017 SAN MATEO COUNTY Telephone: (213) 629-1600 Facsimile: (213) 629-1660 M .220 Attorneys for Defendants Glee oi j I i. urt FARMERS INSURANCE EXCHANGE and By 6 TRUCK INSURANCE EXCHANGE oEIShr CLeIIKI G 0p 7 $ SUPERIOR COURT OF THE STATE OF CALIFORNIA G~o( 9 FOR THE COUNTY OF SAN MATEO, CENTRAL BRANCH 10 MICHAELCHANG, an individual, Case No.: CIV 489065 Plaintiff, OBJECTION TO RESPONSE TO ORDER TO 12 V. SHOW CAUSE 5 3. 13 FARMERS INSURANCE COMPANY, INC., FAKERS GROUP, INC., FARMERS Date: June 3, 2014 14 INSURANCE EXCHANGE AND TRUCK Time: 9:00 a.m. ~ fgI INSURANCE EXCHANGE, reciprocal insurance exchanges; Does 1to 99, inter- Inclusive, Dep't: 7 'I> 16 Defendants. BY FAX 17 18 Farmers Insurance Exchange and Truck Insurance Exchange ("Farmers" ), are in receipt of 19 documents filed by the Garrison law firm and the Kalfen law firm in the Kartal v. Chang, er al. action on behalf of Roxanne Chang and Hea Ja Yang titled "Response To Order To Show Cause..." 21 (hereaAer "Response to OSC"). 22 The "Response to OSC" is filled with inaccuracies, improper argument and documents that 23 appear to be protected by the mediation privilege. Farmers objects to the attempt to use that documentation in an effort to avoid the clear terms of the Settlement Agreement of the parties as put 26 on the record on January 27, 2014 in the Chang v. Farmers litigation and the even clearer terms of that settlement as set forth in an 18 page written settlement agreement signed by both Michael and 28 PRINTED ON RECYCIED PAPER OBJECTION To RESPONSE To ORDER To SHOW CAUSE 390299.I Roxanne Chang t as well as by Farmers, Great American Insurance Company and Fireman's Fund 1 Insurance Company. (Copy attached hereto as Exh. No. 1). Farmers is uncertain whether this Response to OSC, apparently filed on May 6, 2014, is 4 intended in opposition to Farmers'otion To Enforce the Chang v. Farmers Settlement Agreement, 5 filed on April 29, 2014. (See pages 5 —7 of the Response to OSC). Ifso, Farmers responds that the documentation attached to the Response to OSC and supporting Declaration actually support Farmers'nterpretation of the settlement reached between the parties and put on the record on 8 January 27, 20 1 4,and the resulting Settlement Agreement signed by the parties to the Chang v. 9 10 Farmers litigation (Michael Chang and Farmers), as well as by Roxanne Chang, Great American, and Fireman's Fund. 12 The issue argued in Garrison's and Kalfen's "Response to OSC" is whether Farmers'ayment g ) 13 of $ 1,000,000 to Michael Chang resolved any claim for additional defense expenses, which are now 14 claimed by Garrison and Kalfen. Farmers'osition is that on January 27, 2014 it agreed to pay the o sum of $ 1,000,000 to Chang to resolve all remaining issues between the parties. The transcript of II 16 17 January 27, 2014 makes clear that Farmers agreed to pay $ 1,000,000 to obtain a dismissal of Chang's 18 bad faith action (p. 5, lines 12-16). This Court then specifically asked the parties during that hearing ifthe settlement reached between the Changs and Farmers required each party to bear their own 20 attorney fees. All parties responded affirmatively. (p. 5, lines 17-22). (Copy attached hereto as 21 Exh. No. 2). 22 Perhaps more directly, however, the 18 page written settlement agreement signed by all 23 parties, including both Roxanne and Michael Chang on February 4, 2014, expressly provided at 24 paragraph 3(a), at page 11, that in exchange for Farmers'ettlement payment, Chang would "dismiss 26 his operative complaint in the Chang v. Farmers Action in its entirety and with prejudice." (Exh. 1, to attached Scher Declaration, at p. 11, paragraph 3). 28 PIUNTED ON REC YCLED PAPER OBJECTION TO RESPONSE TO ORDER To SHOW CAVSK 390299.1 That same written settlement document, signed by both Michael and Roxanne Chang, further provided at pages 12 and 13, paragraph 4(c) that: 4(c) Effective upon Farmers payment of the settlement payments provided in paragraphs 2.a.and 2.b. of this Agreement, the Chang's release, remise, acquit, covenant not to sue, and forever discharge Farmers... from and against any past, present and future Claims, of any type whatsoever, that the Chang's ever had, now have, or hereafter may have, relating to: 10 (i.) The Kartal Action, the Tank Fund Action, or the Chang v. Farmers Action; (v.) Claims for insurance benefits, includina both defense costs 12 5 )-13 and indemnification, with respect to any Claims described in +1 14 paragraph 4.c. of this Agreement.... gI 5 II) l5 (Exh. No. 1, at pp. 12 and 13) (emphasis added). 16 ig As Farmers has pointed out on multiple occasions, this was the "deal" that Farmers agreed to, 17 and this was the settlement placed on the record in open court and then confirmed in writing in a 18 settlement agreement signed by all of the parties. Farmers has been ready to pay the $ 1,000,000 19 settlement amount to Chang for many weeks, and only needs Chang, the Garrison and Kalfen law firms, and the Stanzler law firm to finally determine who should take custody of those funds. It is Chan@, and his attorneys Garrison and Kalfen, who now seek to change the deal they agreed to in January 2014. Indeed, the documents attached to the Response to OSC directly reflect 24 the Changs'ntent to seek to "renegotiate" the deal the Changs had earlier agreed to. See, e.g.,Brian 25 Kelleher's April 16, 2014 memorandum: "Gregg has not been involved in the settlement re- 26 negotiations", and his einail of April 30, 2014 which discusses "Oi3tion A —Michael drops his efforts 27 to force Farmers back to the table". We are not certain of the point the Response to OSC is trying to PRWTED OH RECYCLED PAPER OBJECTION To RESPONSE To ORDER To SHOW CAUSE 390299. I make with those documents, which are in any event inadmissible for a variety of reasons, but the effort to "renegotiate" should be rejected. On January 27, 2014, Farmers agreed to pay Chang $ 1,000,000 to be done with the litigation! 4 This included any unpaid Farmers'efense obligation Garrison and Kalfen now claim Chang owes 5 to them. Of course, Farmers'efense obligation was owed to Chang, not to the attorneys Chang hired to defend his interests. The Chang's agreed to accept the $ 1,000,000 both orally and in writing and the written settlement agreement all parties signed confirmed Farmers'1,000,000 8 payment specifically released Farmers from any further "claims for insurance benefits, including both defense 10 costs and indemnification". This Court should not allow the Garrison law firm, the Kalfen law firm, Michael Chang, or Roxanne Chang to recant their agreement reached in open court and in an 18 page written settlement w 3. 13 agreement. Farmers respectfully asks this Court to approve its Motion to Enforce the Settlement l4 I Agreement. 0 Exhibit No. 1 attached hereto is a true and correct copy of the Confidential Settlement And Il 16 17 release signed by Michael Chang, Roxanne Chang, Farmers, Fireman's fund and Great American. 18 Exhibit No. 2 attached hereto is a true and correct copy of the Reporter's Transcript of the hearing in these matters held on January 27, 2014. 20 21 DATED: May 12, 2014 WOOLLS 8c PEER 22 A Professional Corporation 23 24 GREGORY Attorneys g SCHER for defendants 25 FARMERS INSURANCE EXCHANGE and TRUCK INSURANCE EXCHANGE 26 27 28 PRINTED ON RECYCLED PAPER OBJECTIOPI To RESPOPISE To ORDER To SHOW CAUSE 390299. I P W f I 1 I CONFIDENTIALSETTLEMRNT AND PR> >4SE This Settlement Agreement and Release (the "Agreement" ) is entered iato as of the Execution Date by and between Michael Chang, as an individual and dba Sunrise Cleaaers, Inc., and Roxaane Chang (collectively, the "Changs," as defined in Paragraph 1 of this Agreement), Great American hstuaace Company and Great American hsurance Company of New York, formerly known as American National Pire hsurance Company (collectively, Great American," as defined in Paragraph l), Farmers hsurance Exchange aad Truck hsurance Exchange (collectively, "Farmers," asdefined m Paragraph 1), and Firemaa's Fund hsuamce Company PPireman's Fund," as defiaed in Paragraph 1). Great Americaa, Farmers, and Fireman's Fund may be individually referred to ia this Agreement as an "Insurer" and collectively referred to as the "Instuers." The Changs, Great American, Parmers, and Fireman's Fund may be individually referred to in this Agreaaent asa "Party" and collectively refined to as the "Parties." RECITALS: WHEREAS, A. Michael Chang has owaed real property located at 233 and 235 Bahtwin Avenue in San Mateo, California siace 1977; Roxanne Chang formerly owned the Baldwin Avenue Property together with Michael Chang, aad the Changs operated a dry cleaners at the Baldwin Avenue Property from 1977 to 1981 under the business name Sunrise Cleaners, Inc.; aad B. Grace Yamaguchi or members ofher family had previously owned and operated dry cleaners at the Baldwin Avenue Property since the 1930s; and C. Bemn~mg ia 1981, the Changs leased a portion of the Baldwin Aveaue Property, located at 235 Baldwin Avenue, to Christopher Chang (who ia not related to Michael Chang or Roxaane Chang), and Christopher Chang owned and operated the drymg cleaniag business at 235 Baldwin Avenue for several years;and D. Eun Kyung Lee leased the premises at 235 Baldwin Avenue from the Changs be~ni~g in approximately 1989; Lee operated the dry cleaning business at 235 Baldwin Avenue uatil approximately 1996; other tenants of Michael Chang have operated the dry cleaners at 235 Baldwin Avenue since 1996; and E. Beeinnmg ia 1989, Danilo Fabbri (referred to as "Fabbri ) leasedthe premises at 233 Batdwin Avenue from the Changs, and operated the Bells Mangiata restaurant at that location; in 1991, Bilal Kartal (referred to as"Kartal") bought the restaurant business from Fabbri, and Kartal has leased the premises at 233 Baldwin Avenue from Michael Chang and operated the Bella Maagiata restaurant there since 1991; and P. After the Changs acquired the Baldwin Avenue Property and the Sunrise Cleaners business, American National Fire Insurance Company, now known as Great American Insurance Company of New York, issued Policy No. 1311715 to Sunrise Cleaners for a policy period from December 15, 1977 to December 15,1980; Great American Insurance Company later issued Policy No. BP 2180587 to Michael Chmg for a policy period from December 15, 1980 to December 15, 1983; neither Great Americaa nor the Change have copies of these policies, aad in the absence of evidence establishing the policy tenne, Great American and the Change stipulated to certainterms ofthese policies;and G. After Christopher Chang purchased the Sumise Cleaners dry cleaning business, Fiieman'e Fund Insurance Company issued a primary insurance policy aad aa umbrella insurance policy to Christopher Chaag, which policies are withia the definition of the "Firemen's Fund Policies" in Paragraph 1; and H. Farmers Insurmce Exchange and Truck Insurance Exchange issued various insurance policies to the Change for policy periods between 1991 and 1996, and later issued various insurance policies to Michael Chang for policy periods between 1996 aad 2006, which policies are within the definitioa of the "Farmers Policies" in Paragraph 1; and I. Ia 2006, Kartal filed a lawsuit against Michael Chang, entitled BilalXurtal v. Michael Chang, et al., CaseNo. CIV 458146, in San Mateo County Superior Court (hereafter, the 'Xarbd Action"); Kartal'e complaint ia the Kartal Actioa alleged that that a bad odor had begun,to develop in the banquet room at the Bella Mangiata restauraat "within the last three or four years" before the complaint was filed in 2006,alleged that the odor had worsened by 2005 and later became noticeable ia other areas of the restaurant,and alleged that Kartal's restaurant lost business due to the odor, Kartal's complaint alleged that the odor was caused by con~t»tion from abandoned dry cleaning facilities locatedat 233 Baldwin Avenue; and J. After the Kartal Action was filed, the San Mateo County Health Departinent ordered Michael Chang to investigate and otherwise addms centum»lion involving a dry cleaning solvent, refened to as Stoddard solvent, at and from the pmperty at 233 Baldwin Avenue; and ~ K. In 200 Michael Chang tendered claims to Farmers for insunmce benefits with respect to the Kartal Action; and at that time Farmers dechned to defend or indemnify Michael Chang with to the Ksrtal Action; aad L. In December 2007, Michael Chang tendered claims to Great American for insLuance benefits concerning Claims reyirding con~~i»tion at the Baldwin Avenue Property; specifically, at that time Michael Chang requested defense and indemnity as to the complaint filed in the Kartal Action, and requested defense and mdemaity as to government agency orders requiring him to investigate and otherwise address con>mI»idion at aad Som the property at 233 Baldwia Avenue; in 2008 Gnat American declined to deknd or indemaify Michael Chang with respect to the Kartal Action and the government orders; snd M. After Farmers and Great American declined to defend and mdemnify Michel Chang with respect to the Kartal Action; the Change filed croee~mplaints in the Kartal Action against Grace Yamaguchi, Christopher Chang, and other Persons who had operated Sunrise Cleaners; and N. Great Americaa contends that after the Change filed cro~mplaints in the Kartsl Action, the Change sought to'persiiade the cio~fendante to file cross-complaints against the Changs, for the improper purpose of manufiehxring insurance claims against Great American; and O. The Changs deny that they sought to persuade the cross-defendants in the Kartal Action to file cross~omplaints against the Changs for the purpose of manufixcturing insurance claims; snd P. In February 2009, the Special Master and the Court in the Kartal Action enteml Pre-Trial Order No. 5 in that action, "deeming" that other parties hsd Sled cross-complaints against Michael Chang; and Q. Great American contends that the Changs sought entry ofPre-Trial Order No. 5 as part of an improper efRxt to manufacture insurance claims against Great American; the Chaugs deny that they sought entry of Pre-Trial Order No. 5 for the purpose of manufactuxmg insurance claims; and R. In Februsxy 2009, Michael Chang tendered claims for defense and indeniit to Great American with respect to the "deemed" cross-complaints in theKartal Action; Great Aznerican contends that it hasno obligation to defend or indemnify the Changs with zespect to the Kartal Action; nevertheless, in Febxuaxy 2009 Great American agreed to defend Michael Chang with respect to the Kartal Action, under a complete zeservation of rights, inciudmg the reservation of the right to deny coverage and to seek reimbursement of all amounts paid to or on behalf of Michael Chang; and S. h April2009, Michael Chang asked Great Amexipm to pay certain legal feesand costs he incurred, or planned to mcur, to file a suit challenginga decision by the State Water Resources Control Board denying Michael Chang's application for 5 ~g trom the Underground Stoxage Tank Fund for pollution clean-up at the Baldwin Avenue Property (hereafter referred to as the "Tank Fund Action"); Gzeat American contends that it hasno obligation to the Chants with respect to the Tank Fund Action; nevertheless, Great American agreed to pay certainfees and costs incurred by Michael Chang to prosecute the Tank Fund Action, subject to Great American's complete resennxtion ofxights, including the reservation of the xight to deny coverage and to seek xeimbuzsement of all amounts paid to or on behalf of Michael Chang; and T. In 2010 and 2011, cross-defendants in the Kartal Action filed actualcross- 'omplaints against the Changs in that action; the Changs tendered chins for defense and 1 ~~~ty to Great American with respect to thoseactual cross-complaints; Great American contends that it hasno obligation to defend or t~~~~iYy the Changs with respect to the Kartal Action; nevertheless, Gxeat American agreed to defend the Changs with xuspect to the cross- complaints against them, under a complete reservation ofrights, including the reservation of the right to deny coverage and to seek reimbursement of all amounts paid to or on behalf of the Chaugs; and U. In 2010, the California Regional Water Quality Contxol Board (the "Water Board") ordered the Changs to investigate PCB contamination at aad Sum the dxy cleaning operations at 235 Baldwin Avenue in San Mateo; and V. The Chaags tendered claims to Great American for defense and indemnity with respect to costs of investigatingPCS cantem~tioa at aadlrom the preanses at 235 Baldwin Avenue; Grelt American contends that it hasno obhgation to defend or indcsaaify the Changs with respect to such site investigation;nevertheless, Great Ameriom paid certain site investigation costs, under a complete reservation of rights, including the reservationof the right to deny coverage and to seek reimbursement of all amounts paid to or on behalf of the Changs; aad W. Great American contends that the Changs had asked the Water Board to mphe the Changs to investigate PCB con~1»tion at and Snm 235 Baldwin Avenue in an improper eSort to maauhcatre an insurance claim with respect to investigatioa and cleanup of such PCE contamm~oa; the Chsngs deny that they sought to geaerate Clains against themselves; and X. In 2012, Great American filed a lawsuit against the Chan~ ia the United States District Court for the Northern District of California, entitled Great Amerfcan Insurance Company, et al. v. Mchael Chang, et al., CaseNo. 3: 12'-00833CC (hereafter referred to as the Great American v. Chang Action"), seekiag a declarationthat Great American had and has no duty to defend or fnd~~ify the Changs with respect to the Kartal Actioa, the Tank Fund Action, or other'laims relating to con~~i»>oa at and fiom the Baldwin Avenue Property, aad seehag reimbursement fiom the Changs of all amounts that Great American paid to or on behalf of the Chaags with respect to the Kartal Action, the Tank Fund Action, or other Claims rehLting to the Baldwm Avenue Property; and Y. On June 19, 2013, the Court in the Great American v. Chang Action entered partialsam~>~ judgment for Great American, ruling that Great American had and has no duty to defend or indemnify the Cbangs with respect to the Kartal Actioa, the Tank Fund Action, or site investigationrehLtiag to the Baldwia Avenue Propert; and Z. On November 6, 2013, the Court in the Great American v. Chang Action entered summary judgment for Great American, ruling that Great American is eatitledto reimbursement fium the Changs of the amounts that Great Americaa paid to or an behalf of the Chaags with respect to the Kartal Action, the Tank Fund Action, and site investigation coacermg the Baldwin Avenue Property; and AA. On December 13, 2013, the Court in the Great American v. Chang Action entered judgment in favor of Great American and against the Changs in the amount of $ 884,101.59, sad in addition awarded pre-judgment interest to Great American in the amount of $ 104,482.90; and BB. The Changs have filed a notice of appeal with respect to the judgment entered ia the Great American v. Chang Action; and CC. Michael Chang had previously filed a separate action against Farmers, entitled Chang v. Farmers Insurance Exchange, et al.,San Mateo County Superior Court Case No. (here@ter referred to asthe "Chang v. Farmers Action"), in which Michael Chang sought a deterraiaatioa of coverage and other relief with respectto his insurance claims against Farmers relating to the Kartal Action; Farmers contends that the Changs are not entitled to the relief sought in the Chmg v. Farmers Action; aad Great American has filed a judgment lien in the Chang v. Farmers Action baaed on the judgment Great American obtained in the Great American v. Chang Action; and DD. Fsxxners contends that it hasno obligation to defend or uMlemnify the Changs with respect to the Kartal Action, the Tank Pbnd Action, or site investigation concerning conte t»tion at or Rom the Baldwin Avenue Property; nevertheless, in April 2013 Farmers agreed to participatein the defense of the Changs in the Ksrtal v. Chang Action, under a complete xeservation ofxights; and EE. The Change had previously tendered claims to Fireman's Fund with respect to the Kartal Action and site investigation concerning the Baldwin Avenue Property, under the Fireman's Fund Policies issued to Christopher Chang; the Changs contend that they are entitled to insurance benefits as insureds or additional insuredsunder the Fireman's Fund Pohcies; and FF. Fireman's Fund contends that it hasno obligation to provide imuaxm benefits to the Changs under the Fireman's Fund Policies; nevertheless, Fireman's Fund agreed to pay certain costs the Chsngs incurred for investigation of con~~i»tion at snd &om the Baldwin Avenue Property, under a complete reservation ofrights; and GG. Great American has requested that Farmers pay Great American amounts that GxoLt American had paid for the defense of the Changs in the Kartal Action; and Great American hairequested that Fireman's Fund pay Great American certam amounts that Great American had paid for site investigationwith respect to con~~~~tion at and Som the Baldwin Avenue Property; and the Change have also ro}uested that Fmners and Fireman's Bud pay Great American such amounts; and HH. The Chsngs have incuned and willm the Sxtuxe incur certain expenses and losses arising out of Claims concerning cont ~in»on at snd Sum the Baldwin Avenue Property; and IL In aaeffort to avoid further litigation costsaud the uncertainty of the disposition of Claims among them, Farmers and the Changs wish to resolve the Claims raised in the Chang v. Faxmers Action; and JJ. In an effort to avoid the uncertaintyof the disposition ofthe xespective Claims among or betweea them, Farmers, the Changs, and Great American wish to resolve Claims raised by Great American and by the Chsngs that Farmers pay Great American the amount that Great American paid for the defense of the Kartal Action; and wish to resolve the judgment lien that Great American filed in the Chang v. Farmers Action; and KK. In an effoxt to avoid the uncertainty of the dispositionof Claims among or between them, Fireman's Fund, the Changs, and Great American wish to resolve Claims xaised by Great American and by the Chsngs that Fireman's Fund pay Gxeat American part of the amount that Great American paid for costs of mvestigating contanun~tion at and Sam the Baldwin Avenue Property; and LL Great American has agreed to compromise and accept less than the amount of the judgment it obtainedin the Great American v. Chang Action, in exchange for payments provided under this Agreement and for ieleases &om sll Claims by any Party relating to the Baldwin Avenue Property, as provided in this Agreement; and MM. the Parties intend to adopt, by way of compromise and without prejudice to or waiver of their respective positions in other matters,without irial or adjudication of any issues of hct or law, without the Changs'dmission of liabilityor responsibihty for releaseof hazaalous materials or cont~i~»on of soil and groundwater at and Som the Baldwin Aveirue Property, and without an admission of liabilityor responsibihty by Great American, Farmers, or Fireman's Fund under the insurance policies they issued, a 5dl aud final settlement ofthe Claims released in this Agreement. AGREEMENTS: NOW, THEREFORE, in full considaation of the foregoing recitals and the mutual agreements and releases contained in this Agreement, the Partiesagree as follows: 1. Deflni5ons The following definitions willapply to the listed terms wheever those terms appear throughout this Agreement. Bach defined term stated in a singular form shall mctude the plural form, each defined term stated in plural form shall include the singular form, and each defined term stated in the masculine form or in the & ~me form shall include the other. The words "include," "includes," and "including" are not limiting. 'Ihe words "any" and "all" mean "any aud all." The phrases "relating to" and "arising out of'ean "relating to, in any way connected with, concerning, with regard to, by reason of; based on, or arising out of."(The terms "include," "includes," "including," "any," "all," "relating to" and "arising out of're not capitalized in this Agreement) a. Affilhte The tenn "A%hate" means a Person that is controlled by, under common control with, or controls another specified Person. b.. Agents The term "Agents" means the past,present, and Qture Afhllat~pimcip managers, agents, servants, employees, represenhtives, officers, directors,shareholders, partners, heirs,executors, independent contractors trustees,trustors,and administrators o fa specified Person. For the purpose of intequeting this Agreement, none of the Partiesis an Agent of any other Party. c. Baldwin Avenue Property The term "Baldwin Avenue Property" means: (i) the real property located at 233 Baldwin Avenue in Ssn Mateo, Califoraia, including any structures,tanks, pipes, apphances, Substances, or other items located at that property, whether above the ground, on the ground, or uaderground, in the past, present, or future; and (ii) the real property located at 235 Baldwin Avenue in San Mateo, California, including any structures, tanks, pipes, appliances, Substances, or other items located at that property, whether above the ground, on the ground, or underground, ia the past,present,ar future; and (iii) any land, soil, water,gmundwater, residence, structure,air, or other property of any type that is or was actually or allegedly damaged by, threatened by, or otherwise affected by any Substance actually or allegedly existing, present, discharged, disposed, deposited, released or escaped at or f'rom any property described in Paragraphs l.c.(i) and/orl.c.(ii) in the past, present, or future; and . (iv) any land, soil, water, groundwILter, residence, structure,air, or other property of any type thatis or was actually or allegedly damaged by, threatened by, or otherwise affected by any effort to iavestigate,rcsnediate, or otherwise address or respond to any Claim relating to aay Substance actually or aHegedly existing, present, discharged, disposed, deposited, released or escaped at or &om any property described in Paragraphs.l.c.(i), l.c.(iii) in the past, l.c.(ii), and/or present, or futme. The term "the Changs" means Michael Chang, as an individual and dba Sunrise Cleaners, Inc. or dba Sunrise Cleaners; Roxaane Chang, as aa individual and dba Sunrise Cleaners, Inc. or dba Sunrise Cleaners; their spouses, aay former spouses, children, dependents, heirs, partners, partaerships, joint veatures, aad all Af51iates and Agents of any of the Penons listed in this Paragraph 1.d. At all times relevant to Claims that are the subjectof this Agreement, Brian Kelleher was and is anAgent of Michael Chang and Roxanne Chang. e. Claim 'Ihe term "Claim" means any past, present, or future claims, liabilities, rights, obligations, subrogation rights, contribution rights, indemnity rights, counts,demands, actions, causes of action, lawsuits, complaints, eros--complaint, counter~piaints, potentially responsible party letters,notices ofreslensiMity, requests, letters,~I»~tive proceedmgs, inquiries, orders, notices, and allegstioas ofany aature, character, or kind, whether seeking recovery for actual or alleged bodily mjury, personal injury, pmperty damage, or any other injmy, damage or harm of aay nature, cieaLcter, or kind, whether or not presently known or suspected, whether seekmg A»eyes (consequential or punitive), costs,expenses, injunctive relief; or aayother kind or type of relief, including but not limited to any request for coverage (for defense, in~»m6cation, or any other actual or alleged policy benp6t) under one or mare of the policies issued by any ofthe Ismuurs, and any assertion relatiag to the haadlingor dispositioa of any request for coverage tendered to any of the Insurers,or any other entity or individual by or on its behalf,whether sounding in tort, breach of contract,breach of any duty of good faith aad fair dealing,bsd Suth, breach of statutory duties, actual or constructive &aud, actual or constructive breach'of fiduciary duty, or any other thewy. e. Execution Date The term "Execution Date" means the earliestdate on which aH of the Partieshave executed this Agreement. f. Farmers The term Farmers" means: (i) Farmers IMurance Ba ~~~~e and Truck Insurance Exchange; and (ii) all past,present, and Rture Agents of Fsrnlrs IMurance Exchange and/or Truck Insurance Exchange; and (iii) all Af6hates, parent corporations, subsidiaries,joint ventures, predecessors, successors, transferees and assigns of Farmers Insurance Exchange and/or Truck Insurance Exchange; all the predecessoxs and successors of the Persons mentioned in this Paragraph l.f.(iii); and allthe past,inesent, and Srture assigns of such Periona; (iv) any other Person or entity that was in the past, is now, or is in the future relatedto or associated with Farmers Insurance Exchange and/or Truck Insurance Ex~~~~e, including auy corporations aequi'y, merged mto, or combined with those corporations or their predecessors or successors, and all the past,present; and future parent corporations, subsidiarie, Af61iates, successors, and assigns of the Persons mentioned in this Paragraph I.f(iv);and, (v) any and all Agents of the Persons mentioned in any of the subparagraphs ofthis Paragraph I.f g. Farmers PoMes The term 'Farmers Policies" means: (i) Policy No. , issuedby hr a policy period Sum ; and (ii) Policy No. , issuedby for a policy period Som ; and (iii) Policy No. , issuedby for a policy period Smn (ii) any and all other known and unknown insurance policies of any kind whatsoever issued or allegedly issued by Farmers. h. Fireman's Fund The tenn "Fireman's Fund" means: (i) Fireman's Fund Insurance Company; aud (ii) all past,present, and future Agents of Fireman's Fund Insurance Company; and (iii) aU Af61iates, parent corporations, subsidiaries,joint ventures, predecessors, successors, transferees and assigns of Fireman's Fund Insurance Company; all the predecessors aud successors ofthe Persons mentioned in this PaaLgrsph 14.(iii); and all the past,present, and future assigns of such Persons; (iv) any other Person or entity that was in the past,is now, or is in the tbture relatedto or associated with Fireman's Fund Insurance Company, including any omporations acquired by, merged into, or combined with those corporations or their predecessors or successors, and all Ihe past, present, aud future parent corporations, subsidiaries,Af61iates, successors, and assigns of the Persons mentioned in this Paragraph l.h.(iv); and, (v) auy and all Agents of the Persons mentioned m any of the subparagraphs of this Paragraph 1.h. L Fireman's Fund Policies The term "Fireman's Pund Policies" means: (i) Policy No. to Christopher No., . issued Chang by for a policy period Ann to ; and (ii) Policy issued to Christopher Chang by for a policy period from to ; and (iii) any and all other known and unknown insurance policies of any kind whatsoever issued or allegedly issued by Fireman's Fund. Great American The tean "Great American" means: (i) Great American Insurance Company, and Great American Imnuance Company of New York, formerly known as American National Pire Insurance Company; and (ii) all past,present, and future Agents of Great American Insurance Company and/or Great American Insurance Company ofNew Yorlr, and (iii) all Af51iates, parent corporations, subsidiaries,joint ventures, predecessors, successors, transferees and assigns of Great American Insurance Company and/or Great American Insurance Company ofNew York; all the predecessors and successors of the Persons mentioned in this Paragraph l.j.(iii);and all the past, present, and Rture assigns of such Persons; (iv) any other Person or entity that was in the past, is now, or is m the futu're rehted to or associated with Great American In@mace Company or Great American Insurance Company of New York, inchding any corporations acqmred by, merged into, or combined with those corporations or their predecessors or successors, and all the past,present, and future parent corpomtions, subsidiaries,