SUPERIOR COURT, STATE OF CALIFORNIA COUNTY OF SANTA CLARA

Transcription

1 SUPERIOR COURT, STATE OF CALIFORNIA COUNTY OF SANTA CLARA Department 1, Honorable Peter H. Kirwan Presiding Ingrid Stewart, Courtroom Clerk Melissa Crawford, Court Reporter 191 North First Street, San Jose, CA Telephone: Facsimile: To contest the ruling, call (408) before 4:00 P.M. LAW AND MOTION TENTATIVE RULINGS DATE: FEBRUARY 26, 2016 TIME: 9 A.M. PREVAILING PARTY SHALL PREPARE THE ORDER (SEE RULE OF COURT ) LINE # CASE # CASE TITLE RULING LINE 1 LINE 2 LINE 3 111CV Ortiz v. Headstart Nursery, Inc. 111CV Tran v. H&M Hennes & Mauritz, LP 112CV The Irvine Company LLC v. Douglas Ross Construction, Inc. ( Redwoods ) LINE 4 113CV Cilker Apartments, LLC v. Western National Construction, et al. LINE 5 LINE 6 LINE 7 115CV Cook v. A is for Apple, Inc. 115CV JP Morgan Chase Mortgage Loan Cases (JCCP 4846) 197CV In Re Santa Maria Valley Groundwater Litigation Click on Line 1 for Ruling Click on Line 2 for Ruling Click on Line 3 for Ruling Click on Line 4 for Ruling Continued to May 20, 2016 at 9am Parties to Appear Click on Line 7 for Ruling

2 Calendar line 1 Case Name: Case No.: Ortiz v. Headstart Nursery, Inc CV In this class action, plaintiffs Maria Ortiz, Rosalia Garcia Arriaga, and Mariana Rojas (collectively Plaintiffs ) sue defendant Headstart Nursery, Inc. ( Defendant ) for not providing full 30-minute meal breaks as required by law. In the operative Second Amended Complaint ( SAC ), filed July 31, 2013, Plaintiffs allege that Defendant owns and operates a business that produces, grows, ships and sells vegetable transplants and ornamental plugs and liners, 1 and Plaintiffs and the class are non-exempt employees who were paid on an hourly, piece rate, or incentive plan basis. 2 The SAC asserts four causes of action for: (1) unfair business practices, violation of Business & Professions Code section 17200; (2) violation of Labor Code section 200 et seq.; (3) violation of Labor Code sections and 512, failure to provide required meal periods; and (4) violation of Labor Code section 226, failure to provide accurate statements. Plaintiffs allege they were required to work through their meal periods and/or to take their lunch breaks late due to the necessity of completing their assigned tasks and the time spent to commute between their assigned work stations in the field and the designated lunch area. Plaintiffs allege that Defendant has an explicit policy requiring employees, including named Plaintiffs and other class members to eat in a designated lunch area on the business premises, which was at a great distance from where employees worked on the field. 3 Plaintiffs and the class were also required to spend a material amount of time thoroughly cleaning themselves before they could safely consume a meal and were not compensated for this time. 4 Plaintiffs further allege that Defendant failed to provide them with proper field sanitation facilities as required by law. 5 The SAC defines four classes: (1) Class I (Meal Period Class): All California based non-exempt employees who were paid hourly based and/or piece rate based and/or incentive plan based who were or are employed by Defendant within the last four years who were subject to Defendant s uniform meal period policy to work through their meal periods and/or to take their lunch breaks late, through necessity of completing their assigned tasks; to spend time to commute by walking/running between their assigned work stations in the field and a suitable lunch area and were not paid an hour of pay for meal period violations. (2) Class II (Waiting Time Penalty Class): All California based employees employed by Defendant in California any time within the last four years who left employment with Defendant and did not receive all wages due as a result of Defendant s failure to pay meal period violations on termination. (3) Class III (Pay Stub Class Injunctive Relief): All California based employees employed by Defendant in California any time within the last four years who received a 1 Second Amended Compl. ( SAC ) 6. 2 SAC SAC 17.b. 4 SAC 17.c. 5 SAC 12.D.

3 non-compliant pay stub that failed to comply with Labor Code section 226, i.e., failed to properly report the pay rate, failed to properly report total hours worked, and failed to provide an accurate explanation of the incentive plan formula and/or piece rate among other deficiencies. (4) Class IV (Field Sanitation Class Injunctive Relief): All California based employees employed by Defendant in California any time within the last four years who were not provided with proper field sanitation facilities as required by California Code of Regulations Title 8, Section 3457, Health & Safety Code sections , and Labor Code section On August 14, 2014, the Court granted in part Plaintiffs motion for class certification. Based on Plaintiffs evidence of company policies related to hand washing, meal periods (including where meal periods could be taken), and Defendant s horn practices at three locations (Gilroy, Desert Sea/Mecca and Castroville), the Court certified a Meal Period Class of all California based non-exempt employees of Defendant who worked at the Gilroy, Desert Sea/Mecca and Castroville locations from October 2008 through December 2012 and were subject to Defendant s uniform meal period and hand washing policies and were not paid an hour of pay for meal period violations. The Court held that under Plaintiffs theory, if the class members were required to work until the 12:00 p.m. lunch horn, wash their hands before eating, walk to a designated lunch are in order to eat, wash again upon return, and be ready to work by the 12:30 p.m. horn, these workers would inevitably spend a portion of their 30- minute meal period conducting themselves in accordance with Defendant s explicit policies regarding hand washing and meal breaks. The Court also certified a Waiting Time Penalty Class of all California based employees employed by Defendant at the Gilroy, Desert Sea/Mecca and Castroville locations from October 2008 through December 2012 who left employment with Defendant and did not receive all wages due as a result of Defendant s failure to pay meal period violations on termination. The motion for class certification was denied without prejudice as to the inclusion of individuals employed at Defendant s other facilities because the Court found that Plaintiffs had not adequately demonstrated how they could prove Defendant s liability based on predominantly common facts and evidence for facilities where horns were not used. The motion was also denied as to the Pay Stub Class on the grounds that Plaintiffs are not adequate class representatives since they are no longer employees of Defendant and therefore no longer stand to be harmed by Defendant s pay stubs practices for purposes of entitling them to injunctive relief. On November 19, 2015, the parties attended a full-day, third mediation session with mediatory Jeffrey Ross of Oakland. After a third day of mediation and extensive negotiations, the parties entered into an agreement resolving the Plaintiffs claims. Plaintiffs now move for preliminary approval of class action settlement. I. Plaintiff s Motion for Preliminary Approval of Class Action Settlement A. Legal Standard Generally, questions whether a settlement was fair and reasonable, whether notice to the class was adequate, whether certification of the class was proper, and whether the attorney fee award was proper are matters addressed to the trial court s broad discretion. (Wershba v.

4 Apple Computer, Inc. (2001) 91 Cal.App.4th 224, , citing Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794.) In determining whether a class settlement is fair, adequate and reasonable, the trial court should consider relevant factors, such as the strength of plaintiffs case, the risk, expense, complexity and likely duration of further litigation, the risk of maintaining class action status through trial, the amount offered in settlement, the extent of discovery completed and the stage of the proceedings, the experience and views of counsel, the presence of a governmental participant, and the reaction of the class members to the proposed settlement. (Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at pp , citing Dunk, supra, 48 Cal.App.4th at p and Officers for Justice v. Civil Service Com n, etc. (9th Cir. 1982) 688 F.2d 615, 624.) The list of factors is not exclusive and the court is free to engage in a balancing and weighing of factors depending on the circumstances of each case. (Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at p. 245.) The court must examine the proposed settlement agreement to the extent necessary to reach a reasoned judgment that the agreement is not the product of fraud or overreaching by, or collusion between, the negotiating parties, and that the settlement, taken as a whole, is fair, reasonable and adequate to all concerned. (Ibid., quoting Dunk, supra, 48 Cal.App.4th at p and Officers for Justice v. Civil Service Com n, etc., supra, 688 F.2d at p. 625, internal quotation marks omitted.) The burden is on the proponent of the settlement to show that it is fair and reasonable. However a presumption of fairness exists where: (1) the settlement is reached through arm s-length bargaining; (2) investigation and discovery are sufficient to allow counsel and the court to act intelligently; (3) counsel is experienced in similar litigation; and (4) the percentage of objectors is small. (Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at p. 245, citing Dunk, supra, 48 Cal.App.4th at p ) B. Legal Analysis: According to the moving papers, the certified class who did not opt out consists of 345 individuals. Pursuant to the Settlement Agreement, the Class is defined as all California based non-exempt employees who worked at the Headstart facilities in Gilroy, Desert Sea/Mecca, and Castroville locations at any time during the period from October 18, 2007 through December 31, 2012 except for those individuals who timely file an exclusion from participation, i.e. opt-out of the Settlement. Defendant Headstart ( Headstart ) will pay the sum of $1,300,000 into an interest-bearing escrow account and Rust Consulting, Inc. will serve as the Administrator. From the Gross Settlement Fund of $1.3 million, the following fees will be paid: (1) Administration Fees to Rust of approximately $20,000; (2) attorney s fees and costs in the amount of $460,000 ($390,000 in fees and $60,000 in costs; and (3) class representative awards to each of the three named plaintiffs in the sum of $20,000 to each. The remaining sum estimated to be $770,000 will be the Net Settlement Fund. The Net Settlement Fund will be

5 distributed to each Class Member who submits a timely Claim Form under the following formula: (1) calculate the total number of shifts of all Payment Eligible Class Members who worked in excess of 5 hours at one of the covered facilities during the class period; (2) calculate the total number of shifts each Payment Eligible Class Member worked in excess of 5 hours at one of the covered facilities during the class period; (3) divide the number of each individual Payment Eligible Class Member s applicable shifts by the total number of all Payment Eligible Class Member s applicable shifts; (4) apply the quotient calculated in (3) to determine each individual Payment Eligible Class Member s owed amount of the Net Settlement Fund. In assessing the fairness and reasonableness of the Settlement, the Court notes that it was the product of several years of litigation and ultimately achieved through arms-length negotiations with the assistance of an experienced mediator. The moving papers document the procedural history of the litigation as well as the history of settlement negotiations which ultimately resulted in the Settlement. During the course of litigation, there was extensive discovery including, but not limited to, numerous depositions, document requests and written discovery. In addition, the Court is satisfied with the experience and expertise of Class Counsel in litigating similar cases. Regarding the actual disbursement of the Net Settlement Fund, the moving papers describe the formula, but there is very little discussion about the actual economic benefit to a typical Class Member. The Court understands that there are a number of variables to be considered (i.e. average number of shifts over 5 hours, etc.), but there should be some discussion of the anticipated payout to the average Class Member or examples of how the formula applies using estimates based on the information available. In short, the Court needs more than the formula itself to fully assess the actual benefit to Class Members. Counsel should be prepared to discuss this at the hearing. Regarding the request for attorney s fees and expenses, the Court also has an independent right and responsibility to review the requested attorney s fees and only award so much as it determines reasonable. (See Garabedian v. Los Angeles Cellular Telephone Co. (2004) 118 Cal.App.4th 123, ) Plaintiffs counsel seeks attorneys fees and costs in the amount of $390,000. The moving papers indicate that this amount is not more than 30% of the Settlement and it is facially reasonable under the common fund doctrine, which allows a party recovering a fund for the benefit of others to recover attorney s fees from the fund itself. (See City and County of San Francisco v. Sweet (1995) 12 Cal.4th 105, ) Prior to the final approval hearing, counsel should provide detailed information about the lodestar as well as billing records to allow the Court to conduct a lodestar cross-check to further evaluate the reasonableness of the fee request. (See Lealao v. Beneficial Cal. Inc. (2000) 82 Cal.App.4th 19, ) Regarding class representative awards, [t]he rationale for making enhancement or incentive awards to named plaintiffs is that they should be compensated for the expense or risk they have incurred in conferring a benefit on other members of the class. [Citation.] An incentive award is appropriate if it is necessary to induce an individual to participate in the suit[.] [Citation.] [Citation.] [C]riteria courts may consider in determining whether to make an incentive award include: 1) the risk to the class representative in commencing suit, both financial and otherwise; 2) the notoriety and personal difficulties encountered by the class representative; 3) the amount of time and effort spent by the class

6 representative; 4) the duration of the litigation and; 5) the personal benefit (or lack thereof) enjoyed by the class representative as a result of the litigation. [Citations.] [Citation.] These incentive awards to class representatives must not be disproportionate to the amount of time and energy expended in pursuit of the lawsuit. [Citation.] (Cellphone Termination Fee Cases (2010) 186 Cal.App.4th 1380, ) The moving papers seek incentive awards for each of the three named class representatives in the sum of $20,000 each. While the Court recognizes the fact that such awards are appropriate and supported by the law, the amount requested is higher than this Court typically awards in similar cases. Counsel should provide detailed information from each class representative documenting their involvement in the case and the amount of time spent on the case. Assuming there is proper evidentiary support, the Court views the reasonable range for incentive awards to be in the $10,000-$15,000 range. Regarding Notice, the content of a class notice is subject to court approval. If the court has certified the action as a class action, notice of the final approval hearing must be given to the class members in the manner specified by the court. The notice must contain an explanation of the proposed settlement and procedures for class members to follow in filing written objections to it and in arranging to appear at the settlement hearing and state any objections to the proposed settlement. (Cal. Rules of Court, rule 3.769(f).) In determining the manner of the notice, the court must consider: (1) The interests of the class; (2) The type of relief requested; (3) The stake of the individual class members; (4) The cost of notifying class members; (5) The resources of the parties; (6) The possible prejudice to class members who do not receive notice; and (7) The res judicata effect on class members. (Cal. Rules of Court, rule 3.766(e).) According to the moving papers, Class Counsel has already provided the class list to the Administrator. The Court has reviewed the Proposed Class Notice which is attached as Exhibit 1-B to the Declaration of Parviz Darabi in support of the moving papers. The content of the Proposed Class Notice appears to conform to the requirements set forth above, however, the Class Members should be notified that they can either object in writing in advance of the Final Fairness Hearing or appear at the hearing to object in person. The Notice should be modified to advise the Class Members of this. Subject to the modifications and request for further information discussed above, the Court finds that the Settlement is entitled to a presumption of fairness and the Motion for Preliminary Approval is GRANTED. - oo0oo -

7 Calendar line 2 Case Name: Case No. Tran v. H&M Hennes & Mauritz, LLP 1-11-CV This is a putative class action in which plaintiff Suzanne Tran ( Plaintiff ) alleges that defendant H & M Hennes and Mauritz L.P. ( Defendant ) has a policy and practice of requiring non-exempt employees to work substantial amounts of time off-the-clock and without pay, and failing to provide non-exempt employees with required meal and rest periods. (First Amended Complaint ( FAC ), 1.) The FAC sets forth the following causes of action: [1] Failure to Pay Minimum Wage; [2] Failure to Compensate for All Hours Worked; [3] Failure to Make Payment within the Required Time; and [4] Penalties Pursuant to Labor Code section The Complaint was filed on December 23, 2011 as a putative class action on behalf of Plaintiff Suzanne Tran and all other employees similarly situated as store management employees in Defendant s stores in the State of California at any time within four years prior to the filing of the original complaint until resolution of this action. On May 11, 2015, this Court granted class certification. Following class certification, the parties participated in extensive negotiations which resulted in a formal mediation with Michael Dickstein, Esq. The parties entered into a Memorandum of Understanding immediately following the mediation and continued negotiations on additional items which were ultimately memorialized in the Joint Stipulation of Settlement (Exhibit 1 to the Declaration of John Glugoski). Plaintiffs now move for Preliminary Approval of Class Action Settlement. Plaintiff s Motion for Preliminary Approval of Class Action Settlement A. Legal Standard Generally, questions whether a settlement was fair and reasonable, whether notice to the class was adequate, whether certification of the class was proper, and whether the attorney fee award was proper are matters addressed to the trial court s broad discretion. (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, , citing Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794.) In determining whether a class settlement is fair, adequate and reasonable, the trial court should consider relevant factors, such as the strength of plaintiffs case, the risk, expense, complexity and likely duration of further litigation, the risk of maintaining class action status through trial, the amount offered in settlement, the extent of discovery completed and the stage of the proceedings, the experience and views of counsel, the presence of a governmental participant, and the reaction of the class members to the proposed settlement. (Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at pp , citing Dunk, supra, 48 Cal.App.4th at p and Officers for Justice v. Civil Service Com n, etc. (9th Cir. 1982) 688 F.2d 615, 624.)

8 The list of factors is not exclusive and the court is free to engage in a balancing and weighing of factors depending on the circumstances of each case. (Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at p. 245.) The court must examine the proposed settlement agreement to the extent necessary to reach a reasoned judgment that the agreement is not the product of fraud or overreaching by, or collusion between, the negotiating parties, and that the settlement, taken as a whole, is fair, reasonable and adequate to all concerned. (Ibid., quoting Dunk, supra, 48 Cal.App.4th at p and Officers for Justice v. Civil Service Com n, etc., supra, 688 F.2d at p. 625, internal quotation marks omitted.) The burden is on the proponent of the settlement to show that it is fair and reasonable. However a presumption of fairness exists where: (1) the settlement is reached through arm s-length bargaining; (2) investigation and discovery are sufficient to allow counsel and the court to act intelligently; (3) counsel is experienced in similar litigation; and (4) the percentage of objectors is small. (Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at p. 245, citing Dunk, supra, 48 Cal.App.4th at p ) B. Analysis: The terms of the settlement are set forth in detail in the Joint Stipulation of Settlement attached as Exhibit 1 to the Glugoski Declaration. The Gross Settlement Fund is $2,750,000 which is non-reversionary. The Net Settlement Fund is the amount to be paid in claims to the Class Members who submit timely claims. The Net Settlement Fund will represent the amount left after payment of administrative costs (approx. $30,000), attorney s fees (not to exceed 1/3 of the Gross Settlement amount); costs (not to exceed $50,000) and an incentive award (not to exceed $25,000). In terms of the formula for distribution to the Class Members, the claims administrator shall take the entire number of workweeks worked by the entire class during the class period. The Net Settlement amount will then be divided by the total number of workweeks worked by the entire class to arrive at an amount per workweek. The total amount of workweeks for a particular class member shall be multiplied by the amount per workweek to arrive at the pro-rata share of the Net Settlement amount for a particular class member. According to the moving papers, the parties estimate that on average the class members will receive approximately $2000 before deductions. Applying the factors set forth above, the settlement was the product of extensive litigation for over four years resulting in a negotiated settlement that was conducted at armslength with an experienced mediator. The Declaration of John Glugoski details the experience of Class Counsel and addresses the significant benefit to the Class Members resulting from the Settlement. For Preliminary Approval purposes, the Court is satisfied that the Settlement is entitled to a presumption of fairness as it preliminarily meets the standards set forth above. The Court also has an independent right and responsibility to review the attorney fee provision of the settlement agreement and award only so much as it determines reasonable. (Garabedian v. Los Angeles Cellular Telephone Co. (2004) 118 Cal.App.4th 123, ) Plaintiff seeks an award of approximately $907,000 in fees. This represents 1/3 of the Maximum Settlement Amount, which is not an uncommon contingency fee allocation. This

9 award is facially reasonable under the common fund doctrine, which allows a party recovering a fund for the benefit of others to recover attorney s fees from the fund itself. (See City and County of San Francisco v. Sweet (1995) 12 Cal.4th 105, ) However, there is little discussion about the amount of fees incurred or the actual lodestar. Prior to the final approval hearing, counsel should provide detailed information about the lodestar as well as billing records to allow the Court to conduct a lodestar cross-check to further evaluate the reasonableness of the fee request. (See Lealao v. Beneficial Cal. Inc. (2000) 82 Cal.App.4th 19, ) At this stage, the Court simply does not have enough information to meaningfully comment on the fees requested. The same would apply to the costs incurred which are estimated in the moving papers to be approximately $50,000. Counsel should provide a detailed itemization of the costs. Regarding class representative awards, [t]he rationale for making enhancement or incentive awards to named plaintiffs is that they should be compensated for the expense or risk they have incurred in conferring a benefit on other members of the class. [Citation.] An incentive award is appropriate if it is necessary to induce an individual to participate in the suit[.] [Citation.] [Citation.] [C]riteria courts may consider in determining whether to make an incentive award include: 1) the risk to the class representative in commencing suit, both financial and otherwise; 2) the notoriety and personal difficulties encountered by the class representative; 3) the amount of time and effort spent by the class representative; 4) the duration of the litigation and; 5) the personal benefit (or lack thereof) enjoyed by the class representative as a result of the litigation. [Citations.] [Citation.] These incentive awards to class representatives must not be disproportionate to the amount of time and energy expended in pursuit of the lawsuit. [Citation.] (Cellphone Termination Fee Cases (2010) 186 Cal.App.4th 1380, ) The moving papers reference an incentive award not to exceed $25,000 to the named class representative, but there is no further information provided. Prior to the Final Fairness Hearing, Class Counsel should provide detailed information from the class representative that addresses their involvement in the litigation. Assuming there is proper evidentiary support for the award, the Court typically awards incentive payments in the $10,000-$15,000 range. Regarding Notice, the content of a class notice is subject to court approval. If the court has certified the action as a class action, notice of the final approval hearing must be given to the class members in the manner specified by the court. The notice must contain an explanation of the proposed settlement and procedures for class members to follow in filing written objections to it and in arranging to appear at the settlement hearing and state any objections to the proposed settlement. (Cal. Rules of Court, rule 3.769(f).) In determining the manner of the notice, the court must consider: (1) The interests of the class; (2) The type of relief requested; (3) The stake of the individual class members; (4) The cost of notifying class members; (5) The resources of the parties; (6) The possible prejudice to class members who do not receive notice; and (7) The res judicata effect on class members.

10 (Cal. Rules of Court, rule 3.766(e).) According to the Glugoski Declaration, Notice is to be sent out by First Class Mail using the most current information from the Class List. The Court has reviewed the Proposed Notice which is attached as an Exhibit to the Joint Stipulation of Settlement. The Notice appears to comply with the standards set forth above, however, the Notice should clearly reflect that one can appear at the Final Fairness Hearing and object to the Settlement without filing any written objection ahead of time. The current Notice states that Objections not previously filed with the Court will not be considered. Instead, the Notice should indicate that a Class Member can physically appear at the hearing and object or file a written objection before the hearing. Subject to the comments referenced above, the Motion for Preliminary Approval of Class Action Settlement is GRANTED. - oo0oo -

11 Calendar Line 3 Case Name: Case No.: The Irvine Company LLC v. Douglas Ross Construction, Inc./Redwoods 1-12-CV Defendant and Cross-Defendant Cell-Crete Corporation and Poured Floors, Inc. s Motion for Determination of Good Faith Settlement is unopposed and GRANTED. - oo0oo -

12 Calendar Line 4 Case Name: Cilker Apartments, LLC v. Western National Construction, et al. Case No.: CV This case arises out of alleged construction defects at One Pearl Place Apartments, a 182-unit residential apartment building in San Jose, California. There are four motions before the Court: [1] Demurrer of Cross-Defendant Tara Coatings, Inc. to Cell-Crete Corporation s Cross-Complaint; [2] Rounds & Buroker Inc. dba Madera Construction s Demurrer to Plaintiff s Second Amended Complaint; [3] Cross-Defendant Cilker Orchards Demurrer to Cross-Complainant McLarand Vasquez & Partners, Inc. s Cross-Complaint; and [4] Demurrer of MVE + Partners, Inc. to Second Amended Complaint of Plaintiff Cilker Apartments, LLC. I. Demurrer of Cross-Defendant Tara Coatings, Inc. to Cell-Crete Corporation s Cross-Complaint a. Cell-Crete s Request for Judicial Notice Cell-Crete requests that the Court take judicial notice of the following: (1) Second Amended Complaint for Damages, filed September 25, 2015; (2) Defendant Western National Construction s Cross-Complaint, filed April 30, 2014; (3) First Roe Amendment of Defendant and Cross-Complainant Western National Construction; and (4) Cell-Crete Corporation s Cross-Complaint, filed October 7, 2015, with Amendment to Cross-Complaint, filed October 20, The request for judicial notice is GRANTED. (Evid. Code, 452, subd. (d).) b. Analysis Tara Coatings, Inc. ( Tara ) demurs to the following causes of action in Cell-Crete s Cross-Complaint: [1] Equitable Indemnity; [2] Comparative Fault; [3] Declaratory Relief re Third Party Claims; [4] Declaratory Relief re Contribution; and [5] Declaratory Relief re Total and/or Partial Indemnity. Tara argues that Cell-Crete s causes of action are barred because Cell-Crete and Tara are not joint tortfeasors. 6 Whether Cell-Crete and Tara are joint tortfeasors is not apparent from the pleadings because Cell-Crete has alleged no facts regarding Tara. In fact, the only fact alleged in the Cross-Complaint relates to the filing of Cilker Apartments ( Cilker ) Second Amended Complaint seeking damages for construction defects. While Cell- Crete states that the allegations of the Second Amended Complaint filed by Cilker are incorporated into the Cross-Complaint, the allegations are incorporated for illustrative purposes only and, regardless, would not relieve Cell-Crete from independently alleging facts to support the Cross-Complaint. In light of the fact that the Cross-Complaint consists entirely of legal 6 Tara does not clearly explain the significance of whether or not Tara and Cell-Crete are joint tortfeasors. Tara appears to contend that if it is not a joint tortfeasor, it cannot be liable for indemnity.

13 conclusions and is devoid of facts, Tara s demurrer is SUSTAINED WITH 10 DAYS LEAVE TO AMEND. II. Rounds & Buroker Inc. dba Madera Construction s Demurrer to Plaintiff s Second Amended Complaint a. Cilker Apartments Request for Judicial Notice Cilker requests that the Court take judicial notice of the following: (1) Cilker s Second Amended Complaint for Damages, filed on September 25, 2014; (2) The Court s November 5, 2015 Order continuing the trial date to June 13, 2016; and (3) Defendant and Cross-Defendant Rounds & Buroker, Inc. dba Madera Construction s motion for summary judgment against Cilker, filed on October 23, Cilker s request for judicial notice is GRANTED. (Evid. Code, 452, subd. (d).) b. Analysis Rounds & Buroker Inc. dba Madera Construction ( Madera ) demurs to the first through seventh causes of action in Cilker s Second Amended Complaint. Madera makes two arguments: (1) the Second Amended Complaint fails to state any facts as to Madera; and (2) Cilker entered into a mutual release and settlement agreement with Madera, thereby waiving and releasing claims such as those identified in the seven causes of action identified in the Second Amended Complaint. With regard to the first argument, Cilker concedes that it failed to include a specific paragraph against Madera due to a mistake and oversight in the preparation of the Second Amended Complaint. Accordingly, Madera s demurrer is SUSTAINED WITH 10 DAYS LEAVE TO AMEND. As for the argument relating to the mutual release and settlement agreement, Madera has attached the agreement as Exhibit A to its memorandum of points and authorities, but has failed to make a separate request for judicial notice as required by the rules of court. (See Cal. Rules of Court, rule (l).) Therefore, the agreement is not properly before the Court and cannot be considered. III. Cross-Defendant Cilker Orchards Demurrer to Cross-Complainant McLarand Vasquez & Partners, Inc. s Cross-Complaint a. Cilker Orchards Request for Judicial Notice Cilker Orchards ( Orchards ) requests that the Court take judicial notice of the following:

14 (1) Notice of Completion for the One Pearl Place Apartment Complex located at 5230 Terner Way, San Jose, California, recorded with the Santa Clara County Recorder s Office on May 12, 2004; and (2) Cross-Complainant McLarand, Vasquez & Partners, Inc. s Cross-Complaint filed on October 23, McLarand, Vasquez & Partners ( MVP ) opposes the request for judicial notice of the Notice of Completion. MVP argues that Orchards seeks judicial notice of the Notice of Completion to show that the One Pearl Place Apartment Complex was completed on May 12, 2004 and this is hearsay. MVP argues further that the Notice of Completion does not qualify as [f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy. While MVP is correct that the Court cannot take judicial notice of hearsay statements in the Notice of Completion (See Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 882), the Court can take judicial notice of facts such as the existence and recordation of real property records when the authenticity of the documents is not challenged. (Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 264.) This also includes the taking of judicial notice of the date of recordation. (Id. at p. 265.) Therefore, the Court can take judicial notice of the fact that the Notice of Completion was recorded and the date on which it was recorded. The Court can take judicial notice of the Cross-Complaint as a court record. (Evid. Code, 452, subd. (d).) Accordingly, Orchards request for judicial notice is GRANTED. b. Analysis Orchards demurs to the following causes of action in the Cross-Complaint of McLarand Vasquez & Partners ( MVP ): [1] Breach of Contract; [2] Express Indemnity and Duty to Defend; [3] Implied Indemnity; [4] Negligence; [5] Equitable Indemnity; and [6] Declaratory Relief. Orchards argues that the first cause of action for breach of contract and the fourth cause of action for negligence are time-barred. Code of Civil Procedure section provides a 10-year statute of limitations for claims against a person who develops real property or performs or furnishes the design, specifications, surveying, planning, supervision, testing, or observation of construction or construction of an improvement to real property. MVP alleges that on July 13, 1998, MVP and Cilker Orchards entered into a Professional Services Agreement ( PSA ). (Orchards RJN, Exhibit B, 10.) MVP alleges in the first cause of action that Orchards was negligent in the performance of its duties under the PSA and as the owner of the project, including the failure to effectively manage the project, the failure to hire appropriate contractors and subcontractors to construct the project, and the failure to perform to the standard of care for an owner in the position of Orchards. (Id., 16.) MVP alleges in the fourth cause of action that Orchards breached its duty of care to MVP

15 through its improper management of the project, negligent hiring of contractors and subcontractors, and other acts and/or omissions. (Id., 24.) These allegations demonstrate that MVP s claims for breach of contract and negligence are subject to the ten-year statute of limitations of Code of Civil Procedure section The Notice of Completion for the project was recorded on May 12, (Orchards RJN, Exhibit A.) Generally, the 10-year statute of limitations provided by Code of Civil Procedure section begins to run no later than the date of recordation of a valid notice of completion. (Lantzy v. Centex Homes (2003) 31 Cal.4th 363, 369.) Therefore, MVP had until May 12, 2014 to file the action. The Cross-Complaint was filed on October 23, Therefore, the first and fourth causes of action are time-barred. Accordingly, Orchards demurrer to the first and fourth causes of action is SUSTAINED WITH 10 DAYS LEAVE TO AMEND. In light of the fact that the first and fourth causes of action are time-barred, MVP s third cause of action for implied indemnity and fifth cause of action for equitable indemnity necessarily fail because there is no basis in the Cross-Complaint for liability against Orchards. (See Prince v. Pacific Gas & Elec. Co. (2009) 45 Cal.4th 1151, 1159 [there can be no indemnity without liability].) Accordingly, Orchards demurrer to the third and fifth causes of action is SUSTAINED WITH 10 DAYS LEAVE TO AMEND. In the second cause of action, MVP alleges, on the basis of the Second Amended Complaint of Cilker Apartments, LLC, and the filing of a Cross-Complaint by Western National against MVP, that Orchards is obligated to indemnify and defend MVP pursuant to the terms of the PSA. (Orchards RJN, Exhibit B, 19.) Orchards argues that the PSA requires the Owner to provide indemnity, but Orchards is listed only as the Client with respect to the PSA, not the Owner. Orchards contends that it therefore is not obligated to provide indemnity under the PSA. The term Owner is not defined in the PSA. (See Orchards RJN, Exhibit B, Exhibit A.) Therefore, MVP s allegations that Orchards is the Owner are not contradicted by the PSA. Accordingly, Orchards demurrer to the second cause of action is OVERRULED. Orchards demurrer to the sixth cause of action for declaratory relief relies solely on the argument that MVP has failed to allege facts that demonstrate the existence of an actual controversy relating to the legal rights and duties of the respective parties under the PSA. In light of the fact that the demurrer to the second cause of action is overruled, there is a controversy relating to Orchards indemnity obligation under the PSA. Accordingly, Orchards demurrer to the sixth cause of action is OVERRULED. IV. Demurrer of MVE + Partners, Inc. to Second Amended Complaint of Plaintiff Cilker Apartments, LLC a. Cilker Apartments Request for Judicial Notice Cilker requests that the Court take judicial notice of the following: (1) The Court s September 10, 2015 Tentative Ruling on Defendants McLarand, Vasquez, Emisek & Partners, Inc., MVE & Partners, Inc., MVE + Partners, Inc. s Demurrer to Plaintiff s First Amended Complaint;

16 (2) The Court s September 15, 2015 Order entering the Court s Tentative Ruling (referenced above); and (3) Plaintiff s Second Amended Complaint for Damages filed on September 25, The request for judicial notice is GRANTED. (Evid. Code, 452, subd. (d).) b. Analysis MVE demurs to the following causes of action in the Second Amended Complaint of Cilker Apartments, LLC: [1] Breach of Contract; [4] Negligence; [6] Express Contractual Indemnity. With regard to the first cause of action, MVE argues that Cilker does not allege the existence of a contract between itself and MVE. MVE asserts that the only allegations supporting the existence of a contract with MVE rely on the legal conclusion that MVE is an alter ego of McLarand Vasquez & Partners, Inc., which is alleged to have had a contract with Cilker. (See Second Amended Complaint, 39-41, 51.) To recover on an alter ego theory, a plaintiff need not use the words alter ego, but must allege sufficient facts to show a unity of interest and ownership, and an unjust result if the corporation is treated as the sole actor. (Leek v. Cooper (2011) 194 Cal. App. 4th 399, 415.) MVE concedes that the facts alleged satisfy the first prong for purposes of pleading, but contends that no facts are alleged demonstrating an inequitable result will result. Cilker responds that it has alleged that an adherence to the fiction of the separate existence of these entities would sanction a fraud and promote injustice. This is just a legal conclusion. To satisfy the second requirement for the application of the alter ego doctrine, Cilker must allege facts showing an inequitable result, such as conduct amounting to bad faith. (See Leek v. Cooper (2011) 194 Cal.App.4th 399, 418.) Accordingly, MVE s demurrer to the first cause of action is SUSTAINED WITH 10 DAYS LEAVE TO AMEND. MVE argues that it cannot be liable for negligence or equitable indemnity because it owes no duty to Cilker under the facts alleged. MVE contends that it provided no services related to the subject project. In support of this argument, MVE cites to information from the Secretary of State s office that was cited in Plaintiff s Request for Judicial Notice in support of its Opposition to MVE s first demurrer. No request for judicial notice of this information was made in connection with the current demurrer and it is not properly before the Court. Further, information form the Secretary of State s office would not establish as an undisputed fact that MVE provided no services related to the project. Nevertheless, Cilker alleges no facts in the Second Amended Complaint showing any conduct by MVE, let alone facts from which a duty could arise. Accordingly, MVE s demurrer to the fourth cause of action is SUSTAINED WITH 10 DAYS LEAVE TO AMEND. Although MVE s demurrer includes the sixth cause of action for express contractual indemnity, MVE makes no argument regarding this cause of action in its memorandum of points and authorities. Accordingly, MVE s demurrer to the sixth cause of action is OVERRULED. As a final matter, MVE points out that three MVE entities are named in the Second Amended Complaint, but only one of those entities, MVE + Partners, Inc., exists today. MVE

17 contends the demurrer should be sustained without leave to amend as to the other two MVE entities. MVE cites to no authority for this proposition and no demurrer was filed by the other entities. Therefore, the Court will not sustain the demurrer as to the other entities.

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20 Calendar Line 7 Case Name: Santa Maria Valley Water Conservation District v. City of Santa Maria, et al. Case No.: CV This case involves a determination of the rights of the parties to use the water within the Santa Maria Groundwater Basin. On June 30, 2005, a majority of the parties entered into a stipulated agreement, reduced to a judgment in 2008, that effectively resolved the competing interests in the Basin as to the stipulating parties. The stipulation and judgment divided the Basin into three separate management areas. The Northern Cities Management Area ( NCMA ) represents the northern portion; the Nipomo Mesa Management Area ( NMMA ) represents the southeast portion; the SMVMA encompasses the remainder. The motion now before the Court is focused on the impact of groundwater pumping in the NMMA on the aquifer and water supplies of the NCMA. The Cities of Pismo Beach, Arroyo Grande, and Grover Beach (collectively, the NCMA Parties ) request judicial notice of the following: (1) The 2005 Stipulation and 2008 Judgment in this matter; (2) The decision of the Sixth District Court of Appeal entitled City of Santa Maria v. Adam (2012) 211 Cal.App.4th 266; and (3) The Nipomo Mesa Management Area s Annual Report (Calendar Year 2014). The Court can take judicial notice of the first and third documents as court records pursuant to Evidence Code 452, subdivision (d). While the Court takes judicial notice of the existence of the existence of these documents, however, the Court does not take judicial notice of any hearsay statements contained within those documents. (See Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 882 [the Court may not take judicial notice of the truth of hearsay statements in decisions and court files].) The Court can take judicial notice of the second document as the decisional law of California pursuant to Evidence Code 452, subdivision (a). Accordingly, the NCMA Parties request for judicial notice is GRANTED. The NCMA Parties move for an injunction to preserve the status quo by preventing any increase of water demand in the NMMA until the physical changes to the aquifer that have occurred as the result of over-pumping of groundwater by the water purveyors in the NMMA who are the subject of this motion. The NCMA Parties argue that the NMMA Parties have breached their obligations under the Stipulation and Judgment by pumping far more water than was allocated to the NMMA. The NCMA Parties assert that over-pumping by the NMMA Parties is due in significant part to the NMMA Parties failure to deliver the supplemental water supplies they committed to in the Stipulation and Judgment. The NCMA Parties state another significant factor contributing to the over-pumping is the NMMA Parties and San Luis Obispo County s approval of additional development requiring water service within the NMMA. The NCMA Parties argue that the NMMA Parties continuing and increased groundwater pumping has caused a pumping depression beneath the NMMA a depression

21 toward which underground water flows. The NCMA Parties contend the depression has tilted the natural gradient so that the NCMA is no longer receiving the 1,300 acre-feet per year of underground recharge and additional water is flowing into the NMMA. The NCMA Parties state the groundwater tilt toward the depression poses the immediate risk of irreparable harm to the NCMA Parties by increasing the likelihood of imminent sea water intrusion to the NCMA wells. The NCMA Parties request that the Court issue an order enjoining those stipulating parties who have authority over water production and delivery and/or permitting or approval of any development within the NMMA that requires water, including but not limited to the Nipomo Community Services District, Golden State Water Company, San Luis Obispo County, Phillips 66, Rural Water Company, and Woodlands Mutual Water Company from: (1) Approving any new development or granting any additional development entitlements in the NMMA for any project that requires water supply; (2) Issuing building permits for any new development that requires water supply that has been previously approved but has not begun construction; (3) Issuing any will serve letters indicating that a water purveyor in the NMMA will provide water service at a future time to any project; (4) Utilizing any Nipomo Supplemental Water Project water or any other imported water for any purpose other than reducing the demand for groundwater pumping within the NMMA; (5) Reducing, removing, lifting or modifying any 2015 mandatory water conservation requirements in a manner that increases the groundwater demand within the NMMA; (6) Granting any new well permits; (7) Granting any replacement well permits that increase the pumping rate or the total amount pumped annually. The NCMA Parties request that the injunction remain in force until the NMMA Parties have accomplished each of the following water supply requirements: (1) The Nipomo Community Services District ( NCSD ) has installed all facilities and completed all contracts necessary to and has successfully imported and distributed the 2,500 acre-feet per year NCSD committed to import; (2) The NMMA Parties have, collectively, obtained the right to additional imported water supplied, installed all necessary facilities and are delivering sufficient water to serve the entire increase in NMMA water demand above 2005 levels; (3) The NMMA Parties have implemented a funding plan, facilities, and a process to obtain and deliver sufficient additional imported water to ensure that any new water demand within NMMA shall not require any groundwater pumping in excess of the Stipulation

22 and Judgment amount or such other safe yield amount that is determined by the technical studies required by the Stipulation and Judgment; and (4) The NMMA Technical Group and the NCMA Technical Group agree that the 1,300 acre-feet per year of subsurface flow from the NMMA to the NCMA has been restored. Various parties, including the NMMA Parties, County of San Luis Obispo and San Luis Obispo County Flood Control and Water Conservation District, Robin L. Rossi, and City of Santa Maria, have opposed the NCMA Parties motion. The Stipulation and Judgment sets forth procedures to be followed in the event of Potentially Severe Water Shortage Conditions. (Request for Judicial Notice in Support of Motion and Motion to Enforce 2005 Stipulation and 2008 Judgment, Exhibit A ( Stipulation and Judgment ), VI.D.) According to the Nipomo Mesa Management Area s Seventh Annual Report (Calendar Year 2014), submitted by the NCMA Parties, the NMMA has been in Potentially Severe Water Shortage Conditions since Under such circumstances, the stipulating parties are supposed to coordinate their efforts to implement voluntary conservation methods, adopt programs to increase the supply of Nipomo Supplemental Water if available, use within the NMMA other sources of Developed Water or New Developed Water, or implement other measures to reduce Groundwater use. (Stipulation and Judgment, VI.D.1.) It is not apparent that the parties have taken any of these actions. The Stipulation and Judgment also states that the NCSD must purchase and transmit to the NMMA a minimum of 2,500 acre-feet of Nipomo Supplemental Water each year. (Stipulation and Judgment, VI. A.2.) The NMMA Parties contend that the only physical project required for the NMMA is the construction of the Nipomo Supplemental Water Project and the importation of water from the City of Santa Maria to the NMMA. The NMMA Parties assert that they have gone beyond the best efforts required under the Stipulation for the Nipomo Supplemental Water Project and that the Project should be capable of delivering at least 2,500 acre-feet per year within the next decade. The NMMA Parties contend, therefore, that they are in compliance with the Judgment. While the NMMA Parties are correct that the Stipulation states that best efforts shall be employed to timely implement the Nipomo Supplemental Water Project (Stipulation and Judgment, VI. A.4.), it would appear from the language of the Stipulation that the purchase and transmittal of 2,500 acre-feet of Nipomo Supplemental Water each year by the NCSD is a separate requirement. The NMMA Parties own evidence demonstrates that NCSD is not complying with this portion of the Judgment. (See Declaration of Michael Lebrun in Opposition to NCMA Parties Motion to Enforce Judgment, 8.) Further, as argued by the NCMA Parties, the Stipulation requires that New Urban Uses shall provide a source of supplemental water, or a water resource development fee, to offset the water demand associated with that development. (Stipulation and Judgment, VI.E.5.) There is no evidence that the NMMA Parties have complied with this obligation. Despite the apparent failure of the NMMA Parties to comply with portions of the Stipulation and Judgment, the NCMA Parties motion cannot be granted as currently set forth. At least a portion of the relief requested would affect parties that are not subject to the Stipulation and Judgment. For example, the NCMA Parties seek to prevent the issuing of