nordby construction, inc. v. american safety indemnity company et al complaint

8/11/2019 NORDBY CONSTRUCTION, INC. v. AMERICAN SAFETY INDEMNITY COMPANY et al complaint

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NOTICE OF REMOVAL OF CIVIL ACTION TO FEDERAL COURT CASE NO.UNDER 28 U.S.C. 1441(a) and (b) (DIVERSITY)

LINDA L. SAGER, ESQ., B ar No. CA [email protected]

NICHOLAS B. SALERNO, ES Q., Bar No. [email protected] HEROLD & SAGER550 Second Street, Suite 200Encinitas, CA 92024Telephone: 760-487-1047Facsimile: 760-487-1064

Attorneys for Defendant AIG SPECIALTY INSURANCE COMPANY, erroneously suedas AMERCIAN INTERNATIONAL SPECIALTY LINES INSURANCE COMPANY

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA, SAN JOSE DIVISION

NORDBY CONSTRUCTION, INC.,

Plaintiffs,

vs.

AMERICAN SAFETY INDEMNITYCOMPANY; AMERICANINTERNATIONAL SPECIALTY LINESINSURANCE COMPANY; ACEAMERICAN INSURANCE COMPANY; andDOES 1 through 100, inclusive,,

Defendants.

CASE NO.

NOTICE OF REMOVAL OF CIVILACTION TO FEDERAL COURT UNDER28 U.S.C. 1441(a) and (b) (DIVERSITY)

TO THE CLERK OF THE ABOVE-ENTITLED COURT:

PLEASE TAKE NOTICE that Defendant AIG Specialty Insurance Company,

erroneously sued as American International Specialty Lines Insurance Company (AIG Specialty

or Defendant) hereby removes to this Court the state action identified below pursuant to 28

U.S.C. 1332(a)(1), 1441(a) and (b), and 1446. This removal is based on diversity of citizenship between the parties.

1. On June 25, 2014, Nordby Construction, Inc. (Nordby) filed an action against

AIG Specialty in the Superior Court of the State of California, County of Santa Clara, entitled

Nordby Construction, Inc. v. American Safety Indemnity Company, et al. , (Case No.

114CV267089), asserting causes of action for breach of insurance contract, direct action under

Case5:14-cv-04074-HRL Document1 Filed09/08/14 Page1 of 27
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


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Insurance Code section 11580, and insurance b ad faith (the State Court Action).

2. AIG Specialty was served with the State Court Action by way of personal service

on August 7, 2014.

3. True and correct copies of the State Court Action complaint for: (1) Breach ofInsurance Contract; (2) Direct Action under Insurance Code section 11580; and (3) Insurance Bad

Faith, the Summons served on AIG Specialty, and Civil Case Cover Sheets personally served on

AIG Specialty on August 7, 2014 are marked and attached hereto as Exhibit 1.

4. A true and correct copy of the Proof of Service filed by Nordby in the State Court

Action on August 11, 2014 is marked and attached hereto as Exhibit 2.

5. Exhibits 1 and 2 attached hereto comprise all process, pleadings, and orders

personally served upon AIG Specialty and filed in the State Court Action.

6. Jurisdiction . This action is a civil action as to which this Court has original

jurisdiction pursuant to 28 U.S.C. 1332(a)(1), which may be removed to this Court by AIG

Specialty pursuant to the provisions of 28 U.S.C. 1441(a) and (b) because it is a civil action

between citizens of different states, no defendant is a citizen of the State of California, and the

amount in controversy exceeds the sum of $75,000, exclusive of interest and costs.

7. Amount in Controversy . The amount in controversy, exclusive of interest and

costs, exceeds $75,000. In the State Court Action , Nordby alleges that the amount currently due,

owing and unpaid exceeds $950,000. (Complaint 20.) Accordingly, on the face of the

complaint the amount in controversy exceeds $75,000.

8. Diversity . There is complete diversity of citizenship between Nordby and the

defendants. At the time of the filing of the complaint and at the time of this removal, and as

alleged in the complaint, Plain tiff Nordby is a California corporation, duly licensed to transact business in the State of California, with its principal place of business in Santa Rosa, California.

(Complaint 1.) At the time of the filing of the complaint and at the time of this removal, AIG

Specialty is domiciled in the State of Illinois, with its principal place of business in New York,

New York. At the time of the filing of the complaint and at the time of this removal, American

Safety Indemnity Company (American Safety) has confirmed it is domiciled in the state of



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Oklahoma, with its principal place of business in Atlanta, Georgia. At the time of the filing of the

complaint and at the time of this removal, AIG Specialty is informed and believes that ACE

American Insurance Company (ACE) is domiciled in the state of Pennsylvania, with its

principal place of business in Philadelphia, Pennsylvania. Accordingly, there is complete diversityof citizenship between Nordby and the defendants.

9. No non-diverse parties were named as defendants in the State Court Action.

10. None of the defendants named in the State Court Action is a citizen of the State of

California in which the State Court Action is pending.

11. The defendants designated in the State Court Action as Does 1 through 100 are

fictitious defendants whose citizenship shall be disregarded for purposes of removal pursuant to 28

U.S.C. 1441(a).

12. Intradistrict Assignment . Pursuant to 28 U.S.C. 1441(a), this notice of removal

is being filed in the United States District Court, Northern District of California, San Jose Division

given the State Court Action is currently pending in the Superior Court of the State of California,

County of Santa Clara.

13. The defendants designated in the State Court Action have each consented to

remove this action to federal court, and AIG Specialty is advised that each defendant intends to

file a written notice of consent following their appearance in this matter.

14. A true and correct copy of this Notice of Removal is being filed with the court of

the State Court Action.

15. By removing this action, AIG Specialty does not waive and hereby reserves its

rights to assert all applicable defenses to Nordbys complaint, including but not limited to lack of

subject matter jurisdiction, lack of personal jurisdiction, improper venue, insufficiency of serviceof process, and Nordbys failure to state a claim upon which relief may be granted.

///

///

///

///



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Based on the foregoing, AIG Specialty removes to this Court the above action now

pending in the Superior Court of the State of California, County of Santa Clara, entitled Nordby

Construction, Inc. v. American Safety Indemnity Company, et al. , (Case No. 114CV267089).

DATED: September 8, 2014 HEROLD & SAGER

By: /s/ Linda L. SagerLINDA L. SAGER, ESQ.

NICHOLAS B. SALERNO, ESQ.Attorneys for Defendant AIG SPECIALTYINSURANCE COMPANY, erroneously sued asAMERCIAN INTERNATIONAL SPECIALTYLINES INSURANCE COMPANY



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Exhibit 1



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Notice of Service of ProcessNTP / ALTransmittal Number: 12822156

Date Processed: 08/08/2014

Primary Contact: Eric Manne - 18th FloorAIG Property Casualty175 Water StreetFloor 15thNew York, NY 10038

Copy of transmittal only provided to: Robyn Wellbrock

Entity: AIG Specialty Insurance Company

Entity ID Number 2122278Entity Served: AIG Specialty Insurance Company

Title of Action: Nordby Construction, Inc. vs. American Safety Indemnity Company

Document(s) Type: Summons/Complaint

Nature of Action: Contract

Court/Agency: Santa Clara County Superior Court, California

Case/Reference No: 114CV267089

Jurisdiction Served: California

Date Served on CSC: 08/07/2014

Answer or Appearance Due: 30 DaysOriginally Served On: CSC

How Served: Personal Service

Sender Information: Alexander F. Stuart408-289-1972

Information contained on this transmittal form is for record keeping, notification and forwarding the attached document(s). It does notconstitute a legal opinion. The recipient is responsible for interpreting the documents and taking appropriate action.

To avoid potential delay, please do not send your response to CSC

CSC is SAS70 Type II certified for its Litigation Management System.

2711 Centerville Road Wilmington, DE 19808 (888) 690-2882 | [email protected]



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41Q

YY VI~ VV11.1 ~1111rVVw.1.1 VIVIIi I w Vr w

(CITACJON JUDICIAL)

NOTICE TO DEFENDANT:(AVlSU AL DEMANDA DO):AMERICAN SAFETY INDEMNITY COMPF,NY/AM=RICAN INT RNA.TIONALSPECIALTY 1INES INSURANCE COMPPNY; ACE f iML'RICAN INSURANCECOMPANY and DOES 1 th r0ugh 100 , ] :nc lus ive

YOU ARE BEING SUED BY PLA)NT1FF:

(LQ ESTA DWANDAND O EL DEMAND ANTE?:NQRDBY CONSTRUCTION INC.

1S040 PAnA LrSu tle La L'U f I tJ

.) ..J~~~~ ~I, i..i > ~J1+`.~ 1';:~:~1._4

1014 JUrd 25 P 3: 18 NOTICEt You have bsen sued. The court may decida against you wlthout your being heard uniess you respond wlthln 30 days. Read the Informatlbelow. n ; ~ H . t i ~ ^ a ; . C c k c , l h e S r . F, r C c l s l

You have 30 CALENDAR pAYS after thfs summons and legal papers are served on you to file a wrltten respon~a at:~r~b "y~~~.tl~lav~ a.qopy,~se ed on the plainpff. A lettar er phone call will not protect you, Your w ri en response must be in proper 1eg81 for,r)~Ct yn ` an~{tte,ceUrl~ahk~a.rycur1 cese- There may be a court form Ihat you can use for your response- You can find these court forme 8nd more Informallon al the Califdi~ri a'bourtsOnline 9elf Fielp Center(www.courfin1o.c8-9ov1se1the1p),ygur County law library, or the caurthouse nearest you..lf you cannot pay the flling fee, askthe court clerk fvr a fee walver forrn. If you do not file your response an tlme, you m ay lose the case by default, and your wages, m oney, and propmay be taken without funher waming from the courL

There are other legal requirements. You may want to i;a11 an attomey right away. If you do nvt know an auorncy, you may want to oall an attornercferral serviae. If you oannot afford an attomey, you may be eligible for iree Iegal services from a nonprofit Iegat services prograrp. You can locatethese nonprofit groups at the Callfomla Legal Services web slie(www,faNhe/pcallfomle.org), the California Ceurts Onllne SelfHelp Center(ww sv.courflnfo. ca.gav/sotfhe/p),or by contaoting your local court or county b3r associetlon. NOTEI The court has a statutory Ilen for waived fees andcosts on any setUement or arbltralion award of $10 ,000 or m ora In a dvll case. The eaurt's Ilen must be pald before the eourt wiq dlerniss the am s9lAVlSO Lo han demandado.Si noresponde denbo de30 dias,la corte puede decidireri su contra sinescuchar su version. Laa a lnrcvmacldn acontinuac/on.

Tlene30 DfASDE t:ALENDARIC) despuosda que leentreguen estacltact6ny papeles lega/es parDrpresentar una respuesta por esonto en estaca?e y hocar que se enbegue una cop;a al demand ante. tlna carta a uneIlamada folsfbnicano lo protegen.Su respuesta por escrftot;ene qua estaren formato legal oorrecto s desea que procesen su c.aso en la corte. Es poslble que haya unfonnularfo queusted puede user per'dsu respuesta.Puede encontrarestos fonrrularlos de ta uvrte y nths Infam tacldnan el Centro da Ayuda de las Cortes de Califamra (www.suoorte.ca .9ov), en abibrroteca de layas de sucondadoo an /a cone que te quede mkscerca Si no puedepager la vuote de presentacl3n, plda 21 secreterlode fa oortsque ede unIurmularlo' daexenc/dn da pago d e euvtas. Si nopresente sa n:spuesta a tiempo, p uQdeperder el casopor /ncumplimientoy la corte lepo63qu1farSu suelrio,dineioy4ianessi,nmasad'aErteilc~:

Ida,yotros requisftoskegales. gsrscomendab/e que 1lani eaii obogAbo nmeiiiatantente.'Sindvriace 6 u,i abogbda,paede IFamaYe Gnseivlolo i/erem/slbn a 8bogedos. $1 nopuede pagar a un obp@ado,es poslbfe quecumpla conlos ioqulslros para obtenerservlclos legalas gratullos do i,n.Iqrvgrama desen7clos egqles sin ,rr,nes do /uc . Puede enwnrrarestos grupo s sin flnes de lucro en elsiflo web da Cal~rqla Lagal Services,(www.lawhalpcaGfomia.org), on efCenlro de Ayudada las Cones da C alifornfa, (www.9ucorti_ca_gov)'o ponfendase eri contactoedn la barfa o 61coleg/o tla abogadoslocales. AV lSO:Porley, locorte fionaderecho a rec larrrar lascuotas y los costas exentos por lmponer ungravamen sobrecualquler recuperacldn de s10,eood mifs devalorreclbidamedianteun acuerdo ouna conceslon de arbltraJe en uncaso de derecho clvUT7ene quepaqar e ravarnen de lacorte ames de ua-lacarte pueda deseoharol easo. -

The name and addreas of the court ls:(EI nombra direcci3n de la corte es)~Santa ~J.ara County Supexior Court191 N. Firsx StreetSan 3ase California 95113

The name, address, and telephone number of plainti fPs attomey, or plaintif fwithou t an a ttomey, Is:(E1 nombre, a dlreccidn y et namero de teldfono del abogado del demandante, o def demandante que no tiene abogado, es):Aexander F Stuar t TLLOUGKBY, 8TUAktT, DENING & COOK, TNtr-50 W. San Fernando St. Ste. 400 08-289-1972San Jose CA 95113

OATE~~~ ~~~~tF~ AVIUH.'YAMASAIQ lerk. bY -',C I;r i~,r c~~ ;'~(Fecha) h:ofExetuCGveUiliccrfCtertc 5ocretarlo)

ir4or or service or rnrs sumRlons, use rrooT or .5erviGe or .i'ummons(ro)7R rvo-ut u/.Jprueba de entrega de esta Cit8CF6n use et farmularlo Proof of 3ervice of 5ummons, (POS-070)).

NC1TlCE TO THE PERSON SERVE Iy_ You are served1, s an individua l defendant.2. s the person sued under the fi GCtous r~me of (specily):

A i.S drc~~s ~-~~~ ~ovt ~~ ..~~ ~j %-~.~3,. n behalfof (specrfy): ~ /y ~~ ~~

un er: CP 416.10 (corporat ton) y CCP 418.60 minor)CCP 416.20 (defunct corporation) CCP 4113.70 ( conservatee)CCP 416.40 (association or partnership) CP 416.90 (authorized person)other (specify):

4_ (~ by personal delivery on (date):

F'sul~oo~"Rev~11 11112911a~ ESs 9F~ i iA l aa W

Procedura 6 41?2G, 468www.rowtlNo.cs.gav

2244.122225

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_ AleYander F. Stuart 94161.WILLOUGHBY STUART, BENING COOK, INC.50 W. San ~ernando St . , S te . 400San Jose CA95113

Tl:L6PHON6N0.:905^2B9 -1972 AxNo: 408-295-6375ATrC1RNEYFDR(Name ): Plaintiff, NORDBYOONSTRUCTION, INC.

SUPERlORCOURTOFCALIFORNIA,COUKfYOF SANTA CLARAs R1;9rxeoRM:151 N. First Street:MA(LING AODRESS:

orrr+,Noz1PcooE:San Jcose, Cali.fornia 95113nR/WCH NAME C 1 V i 1

CASENANH: NORDBY V . AMERICA_N SAFE TY INDE MNITY t014COMPANY, e t a l .

CML CASE COVER SFiEET omplex Case Designation GuiJM Unfirnited 0 Limited

(Amount AmountCounter (] Joinder y : _

demanded emanded is iled with first appearance by defendantexceedB $25.000) $25.000 or less) Cal. Rules of Court, rvie $.402)

~~', ~ t ~.

25. P3 18. r ry tL J .

duoGt:r

oEPr.:

ttems 7-6 belowmast ve com rereo see nstrucuons o a a .1. .1eck one box below or the crose type that best describes this case:

Auto Tnrt ontract rovisionatly Compiax Civil l.itigationAuto (22) reach of oontract/warranty (06) al, Rules of Court, rules 3.a00 -3.403)W ninsured motorist (46) ule 3.740 collecdons (09) ntitruatlTrade reguladon (03)

Other P I(PD/WD (Personal InjurylProperty Other collections (09) onstruction defect (10)

DamagalW rongful Daath) Tort nsurance coverage (16 ) ass tort (40)

Asbeslos (04)ther contract (37) eourides litlgatlon (28)

EnvlronmentaUToxlo tort (30)Produet liability (24) rsal Property nsuranoe ooverage olaims arising from theMedical malpractice (45) ] Eminent domain/inverse bove Ilsted provlslonally complex oasebtherPI/PDIWD (2$) andemnetion (14)

Non-P1IPDAND (Other) Tort Wrongful eviction (33)Yp~ (41)

8usiness.tort/unfalr business praoUce (OT ) .. ther re3t p roperty (26)... nforcement of Judgment -

' ' ' Q Enf6rtementofjudginpnt (20)ivil rights (OB) ~ ' ~ ' Unlawful Detainer ~

Defamation (13) omm eroial (31) isesllaneou s C ivil Com plaintFraud (18) Residential (32) ] RICQ (27)IritolieCturil propo y (19) rugs (38) Other wmplaint not specitled above) (42)

Professional negrtgence (25) udiciai Review isaellaneous Civif Petltionpiher non-pi/PD/Wb ta rl (35) sset fortelture (05) ~] Partnership and corporate govem anoe (21)Employment eiiuon re: erbltralicn-awar d1 1 ) . ather pqtilion not spaafiedabove) (43)

Wrpngfut tennination (36) rit of mandate (02)Other emplayment (15) ther )udidal review (39)

2. This case is is not omptex under ruie 3.400 of the Califomia R ules of Court. If the case is complex, markfactors requlring excepGonal judicial management:a_ ~ Large number of separately represented parties . ~ Large number of witnessesb. Extensive motion pracd ce raising dif- eult or novel . oordination with related actions pending in one or more courts

Issues thEit wlll be tlme-consuming to resolve n qthcr Gpuntles, states, ar cquntrips, or in a federal courtc. C3 Substantial amount of documentary evidence . ubstantial postjudgment judic ial supervision

3. Remedies sought (check all that 2pply): a. El monetary b. C3 nonmonetary; declaratory or Injunctive relie f c, a punitive4. Number of causes of actlon s aclfy), 35. This case s s not class actlon suit,B. If there are any known reiated cases, file and serve a notice of reiated casa. (You may vse lorm CM-095,)

Date: June 25, 204 J. ~I n t

qI~F AX

A 1 a n ~'- ~ ~~~ . ~..L ' f' __ ./ ~~ ~ ~ Y

tTYPE OR PRINT NAMEJ 8IGw17URL+ OF PIIRTY OR ATTORNL+Y FOR PAR7Y)

NOTICE

Plainttt'fi must file this covar sheet with the first paperfiled In the metion or prooeed ing (except small claims cases or oases filedunder the P robate Code , Family Cod e, or vYetfare and Inatitutions Code ). (Cal. Rulea of Court, rule 3.220.) F ailure to file min sanctions.

File this cover sheet in addition to any cover sheet required by local court rule.. If thls case Is complex under n,le 3.400 at seq. of the Calffomia Rules of Court, you must serve a copy of this oover sheet on all

other parties to the action or proceeding. Unless this is a collectlona case under n,le 3.740 or a complex case, this cover sheet will be used for statistioal purposes oniy.

Fi d o p [ ,G{or `~a'~ uy ~ w,~~nr~ IVIL CASE COVER S EET '~T s,~ ~ o'F]~d~nb ~ o n s u et - o ~ i3jt s'io j. z8ai ,. ~, ES S E N I I LR M S . - . ~ W r r o .c a . n o r2?49,122225

1 0 7 0 9 0 0 4 4 1 , 1 if 6 1 2 5 1 2 0 1 4 2 ; 4 1 : 2 6 P M



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6 CM 010

INSTRUCTIONS ON HOW TO COMPLETE THE COVER SHEET

To Plaintiffs and Others Filing First Papers. If you are filing a first paper (for example, a compiaint) in a civil case, you mustcomplete and file, along with your first pa er, the Civil Case Cover Sheet contained on page 1. This information will be used to compilestatistics about the types and numbers of pcases filed. You must complete items 1 through 6 on the sheet. In item 1, you must checkone box for the case tvpe that best describes the case. If the case fits both a general and a more specific type of case listed in item 1,check the more specif ic one. If the case has muitiple causes of action, check the box that best indicates the primary cause of action.To assist you in completing the sheet, examples of the cases that belong under each case type in item 1 are provided below. A coversheet must be flled only with your initial paper. Failure to file a cover sheet with the first paper filed in a civil case may subject a party,its counsel, or both to sanctions under rules 2.30 and 3.220of the California Rules of Court.

To Panties In Rule 3.740 Collections Cases. A collections case under rule 3.740is defined as an action for recovery of moneyowed in a sum stated to be certain that is not more than 25,000,exclusive of interest and attorney's fees, arising from a transaction inwhich property, services, or money was acquired on credit. A collections case does not inciude an action seeking the following: (1) tortdamages, (2) punitive damages, (3) recovery of real property, (4) recovery of personai property, or (5) a prejudgment writ ofattachment. The identification of a case as a rule 3.740 collections case on this form means that it will be exempt from the generaltime-for-service requirements and case management ruies, unless a defendant fiies a responsive pleading. A ru[e 3.740 collectionscase will be subject to the requirements for service and obtaining a judgment in ruie 3.740.

To Parties in Complex Cases. In complex cases only, parties must also use the Civil Case Cover Sheet to designate whether thecase is complex. If a plaintiff believes the case is complex under rule 3.400of the California Rules of Court, this must be indicated bycompleting the appropriate boxes in items 1 and 2. If a plaintiff designates a case as complex, the cover sheet must be served with the

iompiaint on all parties to the action. A defendant may file and serve no later than the time of ts first appearance a joinder in theplaintiffs designation, a counter-designation that the case is not compiex, or, if the plaintiff has made no designation, a designation thatthe case is complex.

Auto TortAuto (22 )-Personal Injury/Property

Damage/Wrongfu[ DeathUninsured Motorist (46)if the

case involves an uninsuredmotorist claim subJect toarbitration, che ckthis iteminstead ofAuto)

Other PI/PDIWD (Personal Injury/Property Damage/Wrongful Death)Tort

Asbestos (04)Asbestos Property DamageAsbestos Personal Injury/

Wrongfu[ DeathProduct Liabi[ity (not asbestosor

toxic nvironmental) (24)Medical Malpractice (45)

Med[cal Ma[practice-

Physicians & SurgeonsOther Professional Health CareMalpractice

Other PI/PD/WD (23)Premises Liabi[[ty (e.g., siip

and fall)Intentional Bo dily Injury/PD/WD

(e.g., assault, vandal[sm)Intentional Infliction of

Emotionai D istressNegligent Infl[ction of

Emotional D istressOther PI/PD/WD

Non-PI/PD1WD (Other) TortBus[ness TorUUnfair Business

Practice (07)Civil Rights (e.g., discrimination,

false arrest) not civilharassment) ( 08)

Defamation (e.g., s[ander, libe[)(13)

Fraud (16)inte[lectual Property (19)Professiona[ Negligence (25)

Legal M a[practiceOther Professiona[ Ma[practice

not me dical or legal)Other Non-PI/PD/WD Tort (35)

EmploymentWrongfu[ Termination (36)Other Employment (15)

CASE TYPES AND EXAMPLESContract

Breach of ContractfVllarranty (06)Breach of Rental/LeaseContract not unlawful detainer

or wro ngfu/ eviction)Contract/Warranty Breach-Se[[er

Plaintiff not fraud or negligence)Negl[gent Breach of ContracU

WarrantyOther Breach of Co ntract/Warranty

Collections (e.g., money o wed, openbook accounts) (09)Co[lection Case-Seller P[aintiffOther P romissory Note/Collections

CaseInsurance Coverage not pro vlsfonally

comp/ex) (18)Auto SubrogationOther Coverage

Other Contract (37)

Contractual FraudOther Contract DisputeReal Property

Eminent Dom ain/InverseCondemnation (14)

Wrongful Eviction (33)Other Real Property (e.g., quiet titie) (26)

Writ of Possess[on of Rea[ PropertyMortgage Forec[osureQuiet TitleOther Real Property not eminentdomain, landlord/tenant, orforeclosure)

Unlawful Deta[nerComm ercial (31)Residentia[ (32)Drugs (38) if the case involves illegal

drugs, check this item; otherwlse,report as Commercial or Residential)

Judicia[ Rev[ewAsset Forfe[ture (05)Petition R e: Arbitration Aw ard (11)Writ of Mandate (02)

Writ-Administrative Mandam usWrit-Mandamus on Lim[ted Court

Case Ma tterWrit-Other Limited Cou rt Case

ReviewOther Judicial Review (39)

Review of H ealth Officer OrderNotice of Appeal-Labor

Comm iss[oner Appeals

Provisionally Complex Civll Litigation (Cal.

Rules of Court Rules 3.400-3.403)Antitrust/Trade Regu[ation (03)Construction Defect (10)Claims Involving Mass To rt (40)Securlties Litigation (28)Environmenta[fToxic Tort (3 0)Insurance Coverage Claims

arising from provlsionally complexcase type //stedabove) (41)

Enforcement of JudgmentEnforcement of Judgment (20)

Abstract of Judgment (Out ofCounty)

Confess[on of Judgment(non-dome stic relations)

Sister State JudgmentAdministrative Agency Award

not unpaid taxes)

Petition/Certiticat[on of Entry ofJudgment on Unpaid TaxesOther Enforcement of Judgment

CaseMiscellaneous Civil Complaint

RICO (27)Other Com plaintnot specihed

above) (42)Declaratory Re[ief On[yInjunctive Re[iefOn[y non-

harassment)Mechanics LienOther Com mercial Complaint

Case non-tort/non-comp/ex)Other Civi[ Complaint

non-tort/non-complex)Miscellaneous Civil Petition

Partnership and CorporateGovernance (21)

Other Petitionnot specifledabove) (43)Civil HarassmentWorkplace Vio[enceE[der/Dependent Adult

AbuseElection ContestPetition for Name ChangePetiUon for Reiief from Late

ClaimOther Civil Pet[tion

CM-010 [Rev. July 1, 20071 IVIL CASE COVER SHEET age of

S S E N T m i fO R M S ' 244 12222S



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VVI YVYVT V V11 11

1VI I III YVVNI V VVII \1MYYII IIN I IIV 1 VVI VIv IIY

Alexander F. Stuart SBN 961141WILLOUGH BY, STUART, BENING & COOK, INC.50 W . San Femando S treet, Suite 400San Jose, CA 95113(408) 289-1972(408) 295-6375 [email protected]

Attome s ar Plar,nnff ~ ~Y ?3;;dN ti'aiT~_~:.~;,C~:;e s~i2r aNORDSY CONTRUCI'ION, INC. o ; r : h e :a ; ; L t e ~ C ~ r r ~

SUPERIOR COUIIT OF CAI,IFORIVIA

COCTNTY OF SANTA CLARA

4 C V2C

CASIC N'O.

COMPLAINT FOR DAMAGES

1) Breae4 bf insurance Contract2) Direct Action undcr Insurance . . .

. . Cod d secilon'115803) Insurance Iiad Fafth

and DOES 1 throu.glz 100, indusive;

BY F M _

PLAINTII;F NORDBY C ONSTR[lCTION CONIPANY,-INC, alleges the following:

PARTICS

I. PlaintifPNordby Construction, lnc. ( NORDBY ) is a California corporation, duly

llcensed to tYariSact business in the State ofCalifornicl, wjtll itS p11IIciPal place of btlsine5s in Santa

Rosa, California. NORD I~3Y has co ndueted, and stilI condu cts, business in the County of Santa

Clara.

2. laiutiff is informed and believes that Defendant Am erican Safety lndemnity Comp any

(`AMERIC AN S AFET Y ) is, and at all times mentioned herein was, a eorporation qualified to

do business,-and doing business, in the State of California as a liability insurer. Plaintifffs

informed and believes that AIVIERICAN SAFETY is, and at all relevant timcs was, doing

bu.-tineSs in rhe Countyof Santa Clara.

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COMPLAIIVT FOY2 bAMAOLS

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NORDBY CO NTI7.UCTION, TNC.

Plaf atif~

A.MERICAN SAFETY INDEMNITY 'QO IVIPANY;'AiV1ERICAN 1NTERNATIONAL ,,SPECIALTY LINES INSURANCE COM PAIVY;ACE AM ERICAN INSURANCE COIvIPANY;

~: 1 I ~ ? . l 1.;"`,i f_'.D

1 0 111 JUN 25 `; 3: 18



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1 . Plaintiff is informed and believes that Defendant American International Specialty Lines

2 nsurance Comp any ( AISLIC ) is, and at all relevant times was, a corporation qualified to do

3 usiness and doing business in the State of California as a liability insurer. Plaintiff is informed

4 I and believes that AISLIC is and at all relevant times was doing business in the County of Santa

5 I Clara.

6 . Plaintiff is informed and believes that Defendant ACE American Insurance Company

7 ACE ) is, and at all relevant times was, a corporation qualified to do, and doing, business in the

8 tate of California as a liability insurer. Plaintiff is informed and believes that ACE is and at all

9 elevant times w as, doing business, and continues to do business, in the C ounty of S anta Clara.

10 . Plaintiff is informed and believes that DOES 1-100 are person or entities qualified to do

11 usiness in the State of California and County of Santa Clara. The true names and capacities

12 hether individual, corporate, associate, or otherwise, of the D efendants named herein as DO ES

13 through 100 are unknown to Plaintiff at this time, and for that reason, Plaintiff sues said

14 efendants by fictitious names. Plaintiffwill seek leave to amend this Complaint to allege the

15 rue names an d capacities of said Defendants when they have been ascertained.

16 . Plaintiff is informed and believes that each of the fictitiously named Defendants

17 esignated as DOES 1 through 1 00 is in som e mann er legally responsible to Plaintiff for the acts,

18 missions, and damages set forth in this Complaint.

19 TURE OF L WSUIT

20 . This Complaint arises from the failure and/or refusal of Defendants and each of them to

21 rovide indemnification with respect to a final judgment in favor of NO RDB Y against Kenyon

22 onstruction, Inc. ( KEN YON ) who is a named insured under policies of comm ercial general

23 iability insurance and/or umbrella liability insurance issued by AM ERICAN SAF ETY, A ISLIC

24 nd/or ACE.

25 NDERLYING LITIG TION

26 . NORDBY was hired by Summit State Bank as the general contractor to construct a new

27 uilding known as the Summit State Project. NORDBY subcontracted with a number of

28 ubcontractors to provide labor and materials for the project. One of those subcontractors was

-2-COMPLAINT FOR DAMAGES



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1 ENYON, which agreed to furnish and install a complete weather tight and watertight EIFS

2 ystem on the exterior of the building, along with other scopes of work.

3 . The subcontract between NORDBY and KENYON provided that in addition to

4 erforming the EIFS installation and other work, KENY ON would: (a) procure and maintain

5 olicy of commercial general liability insurance, with minimum limits of 1 million per

6 ccurrence and 1 million in the aggregate for completed operations, naming NORDB Y as an

7 dditional insured with respect to liability arising out of KENYON's performance of the work;(b)

8 nclude, in the required insurance, a provision stipulating that the coverage provided to

9 ORD BYas an additional insured is primary and non-contributing with any other insurance

10 vailable to N ORD BY or the own er of the Sum mit State Project; (c) include, in the required

11 nsurance, completed operations coverage, broad form property damage coverage, and contra

12 iability coverage with respect to all operations by o r on behalf of KE NYO N; and (d) defend

13 ndemnify N ORD BY against any loss or liability arising out of, or in connection with,

14 ENYON's operations to be perfonned under the agreement.

15 0. On or about July 26, 2002, NORDBY received from KENYON's insurance

16 epresentatives a certificate of insurance certifying that it was insured by AM ERICA N S AFE

17 or the period July 1, 2002 to July 1, 2003 un der a policy of comm ercial general liability

18 nsurance with limits of 1 million per occurrence and 1 million in the aggregate for comple

19 perations. The certificate also certified that NORDBY was an additional insured under the

20 002-2003 AMERICAN SAFETY policy, and that the coverage provided to NORDBY was

21 rimary and non-contributing with other insurance.

22 1. The Sum mit State Project was constructed largely in 2002, and KE NYO N performed

23 ervices under the subcontract largely in 2002. Notice of Completion was recorded on February

24 7, 2003.

25 2. Following comp letion of the S umm it State Project, the bank observed water intrusion

26 ventually filed suit against NOR DBY and its subcontractors, captioned Sum mit State Bank v

27 ordby Construction Compan et al. Sonoma County Superior Court Case No. SCV-249420

28 Underlying Action ). NORDBY filed a cross-complaint for indemnity against certain




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1 ubcontractors, including KENYON. NORDBY also tendered its defense to KENYON, and to

2 I AMERICAN SAFETY as an additional insured.

3 3. The tenders of defense were all denied, forcing NORDBY to expend its own resources to

4 I defend the Underlying Action.

5 4. During the testing and investigation of the Underlying Action, it was discovered that the

6 ater intrusion had been related to the EIFS exterior finish furnished and installed by K ENY

7 s a result, the bank determined that the entire EIFS system had to be removed and replaced

8 5. NORDBY eventually settled the Underlying Action for $3.4 million, with NORDBY

9 ontributing 649,000, KEN YON agreeing to contribute 285,000, and all other subcontracto

10 contributing the balance. The settlement did not resolve all claims between NORDBY and

11 KENYON, however. NORDBY retained its right to pursue full reimbursement from KENYON

12 I with respect to all of NORDBY's defense expenses and the settlement contribution of $649,000.

13 6. Plaintiff is informed and believes that KENYON was defended by AMERICAN

14 AFE TY under a policy of com mercial general liability insurance effective July 1 , 2002 to J

15 003, and that AMERICAN SAFETY had exhausted all but 265,690.60 of the policy's limit at

16 he time of the settlement. NORDBY therefore was required to use its own resources to

17 ontribute an additional 19,309.40 to resolve all claims asserted by Summit State Bank,

18 7. As a condition of the settlement, KENYON agreed to arbitrate NORDBY' S claims for

19 efense and indemnification. The matter was arbitrated on September 12, 2012, and a binding

20 ecision in favor of NORDBY was rendered on September 18, 2012. The arbitrator made the

21 ollowing findings against KENY ON:

22 KENYON failed to provide a bullnose with a vertical leg on the bottom side and/or a

23 otch to create a drip edge. This created a condition where water entered the building

24 ausing damage.

25 Without notifying NORDBY as required by its contract, KENYON covered areas where

26 ensglass backing (that should have been installed) was not installed. This not only

27 ompromised the fire safety rating of the building, but it also allowed for water to rea

28 tructural members of the building.




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KEN YON failed to follow the plans and specifications in applying the m astic necessar

attach the EIFS to the building, using horizontal grooves rather than vertical ones, whi

caused water to collect behind the EIFS system rather than drain away.

The EIFS was not properly integrated with the other building materials, which resulted

significant water intrusion.

18. Based on these findings, the arbitrator made the following award in favor of NOR DBY

I and against KENYON:

KEN YON owed NO RDBY Type I indemnity under the terms of its Subcontract with

M~C~ : ~ : ~

KEN YON owed N ORD BY its attorney's fees and costs under the Subcontract.

The w ater intrusion damages at Sum mit State Bank arose out of, or w ere in connection

with, KENYON's work.

19. The arbitrator awarded NOR DBY dam ages, in the amount of 924,974.06, for proper

damage arising out of, or in connection with, KENYON's work based on the indenuiity

provisions of the Subcontract. In addition, the arbitrator awarded NORDBY its attorney's fees

I and costs in the amount of 174,808.10.

20. The arbitration aw ard was confirmed b y the Superior Court and entered as a judgment

the Underlying Action on January 9, 2013. The court acknowledged a credit for the 265,690.60

KEN YON contributed to the settlement of the Underlying Action, resulting in a net judgm ent

834,091.50, plus interest on that amount at the legal rate of 10 percent per annu m from

September 12, 2012. The amount currently due, owing and unpaid exceeds 950,000.

21. The judgm ent was not appealed and becam e final 180 days later.

KENYON'S INSURANCE POLICIES

American Safety Primary Policies

22. Plaintiff is informed and believes that KENY ON w as insured by AM ERICA N SA FET

under two primary policies of com mercial general liability insurance effective July 1, 2002 to

July 1, 2003 and July 1, 2003 to July 1, 2004. Plaintiff is informed and believes that the policies

bore policy nos. XGI 02 1747-003 and XGI 03-1747-004, respectively. Plaintiff is informed and

5

COMPLAINT FOR DAMAGES



15/27

1 elieves that AMER ICAN SA FETY agreed to defend KENY ON und er the 2002-2003 policy

2 enied coverage under the 2003-2004 policy. Plaintiff is informed and believes that both policies

3 arried a limit of liability of 1 million per occurrence, exclusive of defense and other

4 upplementary paym ents coverage, and that both policies are now exhausted with respect to

5 ENYON's legal obligation to pay damages. Plaintiff is informed and believes that NORDBY

6 as an additional insured under the 2002-2003 policy.

7 3. Plaintiff is informed and believes that AMERICAN SAFETY exhausted its policy limit

8 nder the 2002-2003 policy prior to the arbitration of NORDBY's claim for defense and

9 ndemnity against KENYON.

10 4. Plaintiff is informed and believes that AMERICAN SAFETY exhausted its policy limit

11 nder the 2003-2004 policy after the arbitration of NOR DBY ' S claim for defense and indem

12 gainst KENYON.

13 ISLIC Primary Policy

14 5. Plaintiff is informed and believes that KENYON was insured by AISLIC under a primary

15 olicy of comm ercial general liability insurance effective July 1, 2004 to July 15, 20 05 beari

16 olicy no. GL 933-32-99. Plaintiff is informed and believes that AISLIC denied coverage to

17 ENYON under that policy, declining KENYON's tender of defense. Plaintiff is informed and

18 elieves that the AISLIC policy carried a limit of liability of 1 million per occurren ce, exclu

19 f defense and other supplementary paym ents coverage.

20 CE P rimary Policies

21 6. Plaintiff is informed and believes that KENYON was insured by ACE under three

22 rimary policies of com mercial general liability insurance effective July 15 , 2005 to July 1 5,

23 006, July 15, 2006 to July 15, 2007 and July 15, 2007 to July 15, 2008. Plaintiff is informed and

24 elieves that the policies bore policy nos. HDO G2059097A, HDO G21702390 and HDO25 2451027A, respectively. Plaintiff is informed that ACE denied coverage to KENYON under all

26 f the policies, declining KENYON's tender of defense. Plaintiff is informed and believes that

27 he ACE policies each carried a limit of liability of 1 million per occurrence, exclusive of

28 efense and o ther supplementary payrnents coverage.




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1 7. Plaintiff is informed and believes that two of the policies had designated work exclusions

2 recluding coverage for the Sununit State Bank project. Plaintiff is informed and believes that

3 he 2006-2007 policy did not have a designated wo rk exclusion precluding coverage for the

4 I Summit State Bank project.

5 ISLIC Excess Policies

6 8. Plaintiff is informed and believes that in addition to its primary policy with AISLIC

7 ffective 2 004-2005,KENYO N lso was insured by AISLIC und er three policies of um brella

8 liability insurance effective July 1, 2002 to July 1, 2003, July 1, 2003 to Julyl, 2004 and July l,

9 004 to July 1, 2005. Plaintiff is informed and believes that the policies bore policy nos. BE

10 413924, BE 745186 andBE 9745761, respectively. Plaintiff is infonned and believes that

11 AISLIC denied coverage toK EN Y ON under all of its policies, claiming tha tKE NY O N had not

12 xhausted all primary insurance coverage applicable to the Underlying Action. Plaintiff is

13 nform ed and believes that the three umbrella policies each carry a limit of liability of 5 mil

14 er occurrence.

15 ENYON S ASSIGNMENT OF RIGHTS

16 9. In or about August 2012, faced with (a) the prospect of a binding arbitration in which

17 ORDBY was seeking more than 1 million from K EN Y ON or defense and indemnification of

18 he Underlying Action, (b) no insurance company willing to indemnify K E N Y O N n the event of

19 n adverse arbitration award, K E N Y O N ntered into a partial settlement agreement with

20 ORDBY by which KENYO N greed to a ssign its rights against all of its liability insurers in

21 xchange for certain material concessions.

22 0. The material concessions included (a) NORDBY s greement to front the 19,309.40

23 hortfall in KENYON s ettlement contribution to Sum mit State Bank; (b)NORDBY s

24 greement that KENYON would have a credit of 265,690.60 against any arbitration award in25 ORDBY s avor; and (c)NORDBY S greement to refrain from executing against non-

26 nsurance assets of KENYON with respect to any arbitration award in NORDBY s avor.

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1 ORDBY S TENDERS AND DEFENDANTS RESPONSES

2 merican Safety Tenders and Responses

3 1. On or about June 2, 2011 , NORD BY tendered its defense to AMER ICAN SA FETY

4 nder the 2002-2003 and 2003-2004 AMERICAN SAFETY policies. NORDBY was entitled to

5 defense and indemnification under those policies as a) an additional insured, and b) as a

6 ontractual indemnitee of AMERICAN SAFETY s named insured, KENYON. AMERICAN

7 AFET Y ignored the tender.

8 2. On or about September 29, 2011, again on or about November 8, 2011, and still again on

9 r about January 4, 2012, NORD BY tendered its defense to AM ERICAN SAFETY under the

10 002-2003 and 2003-2004 AMERICAN SAFETY policies. AMERICAN SAFETY ignored each

11 f those tenders too.

12 3. On or about December 16, 2013, NORDBY tendered to AMERICAN SAFETY the

13 udgment entered against KENYON in the Underlying Action, requesting payment of attorney s

14 ees and costs awarded against KENYON in the judgment. NORDBY was entitled to payment of

15 he fees and costs awarded as an additional insured under the 2003-2003 AM ERICAN SAFETY

16 olicy, as a contractual indemnitee under the AMERICAN SAFETY policy, and as KENYON s

17 ssignee.

18 4. Plaintiff is informed and believes that AMERICAN SAFETY provided supplementary

19 ayments coverage under the 2002-2003 policy for attorney s fees and costs awarded in the

20 rbitration. Plaintiff is informed and believes that the supplementary payment coverage existed

21 ndependently of the policy limit for damages, AMER ICAN SAFETY owed full supplementary

22 ayments coverage for the attorney s fees and costs awarded against KENYON in the arbitration

23 nd subsequently reduced to a final judgment.

24 ISLIC Tender and Response

25 5. On or about January 20, 2014, NO RDBY tendered to AISLIC the judgment entered

26 gainst KENYO N in the U nderlying Action, requesting payment of the dam ages awarded again

27 ENYON in the judgment. NORDBY was entitled to payment of the damages as a judgment

28 reditor under Insurance Code section 11580, and as KENYON s assignee. AISLIC ignored the




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request for payment. As of the date of this Complaint, AISLIC continues to refuse to pay the any

portion of the dam ages awarded against KENY ON in the final judgment.

ACE Tender and R esuonse

36. On or about January 20 2014 NOR DBY tendered to ACE the judgmen t entered agains

KEN YON in the Underlying Action requesting payment of the damages awarded against

KENYON in the judgment. NORDBY was entitled to payment of the damages as a judgment

creditor under Insurance Code section 11580, and as KENYON s assignee. ACE rejected the

request for payrnent claiming that all of its policies had an applicable designated work exclusion

Plaintiff requested a copy of the purportedly applicable designated wo rk exclusion for the 2006

2007 policy. ACE never responded. As of the date of this Complaint, ACE continues to refuse to

pay any portion of the damages awarded against KENY ON in the final judgment.

FIRST CAUSE OF ACTIONBreach of Insurance Contract)

[Against AMERICAN SAFETY, AISLIC, ACE and DO ES 1-100]

37. Plaintiff incorporates paragraphs 1 through 36 as though fully set forth herein.

38. NORDBY is informed and believes that all conditions of the insurance policies issued by

AMERICAN SAFETY AISLIC and ACE affording rights to KENYON as named insured and

NORDBY as an additional insured, contractual indemnitee and/or assignee of KENYON, have

been satisfied.

39. Defendants and each of them owed an indivisible duty to provide insurance benefits to

KEN YON as named insured and to NORD BY as an additional insured contractual indemnitee

and/or assignee. Plaintiff alleges that each Defendant owes insurance coverage for the final

judgment entered against KENYON, and that each therefore is legally responsible to satisfy the

judgment, or a portion of the judgment, including the award of attorney s fees and costs.

40. Defendants, and each of them, have breached their contractual obligations to Plaintiff by

refusing to pay the judgment or any portion of the judgment entered against KEN YO N

including the damages, attorney s fees and costs awarded against KENYON, and prejudgment

interest.

-9-COMPL INT FOR D M GES



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1 1. As a direct and proximate cause of Defendants breach of their contractual obligations,

2 laintiff has been damaged in an amount exceeding 950,000.

3 HERE FOR E, Plaintiff prays for Judgm ent as hereinafter set forth.

4 ECOND CAUSE OF ACTIONDirect Action under Insurance Code section 11580)

5 Against AMER ICAN SAFETY , AISLIC, ACE and DOES 1-1001

642. Plaintiff incorporates paragraphs 1 through 41 as though fully set forth herein

743. NO RDB Y, by way o f its status as a contractual indemnitee, intended beneficiary and/

8final judgrnent creditor of KEN YON in the Un derlying A ction, possesses rights of direct act

9against Defendants pursuant to California lnsurance Code section 11580. Those rights include

10payment of amounts owed NORDBY to satisfy the final judgment entered against KENYON

11arising out of property damage caused b y KEN YON at the Summ it State Project.

1244. Defendants, and each of them, have breached their duties under Insurance Code section

1311 580 by refusing to pay the judgm ent, or any portion of the judgment, entered against

14KENYON, including the damages, attorney s fees and costs awarded against KENYON, and

15prejudgment interest.

1645. As a direct and proximate cause of Defendants breach of their statutory obligations,

17Plaintiff has been damaged in an amount exceeding 950,000.

18WH EREF ORE, P laintiff prays for Judgment as h ereinafter set forth.

19THIRD C USE OF CTION

20 Insurance Bad Faith)

21Against AMER ICAN SAFETY , AISLIC, ACE and DOES 1-1001

22 6. Plaintiff incorporates by reference paragraphs 1 through 45 as though fully restated herein.

23 7. Defendants policies each contain an implied covenant of good faith and fair dealing,

24 hich obligates Defendants, and each of them, to act in good faith toward their insureds, intended

25 eneficiaries and/or final judgment creditors, and to refrain from taking any action that interferes

26 ith the rights of such persons to enjoy the full benefits of promised coverage.

27 8. Defendants, and each of them, have breached their duty of good faith and fair dealing

28 wed to NORDBY as an additional insured, contractual indemnitee, intended beneficiary, final




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1 udgment creditor and/or assignee of KEN YON , by engaging in the following oppressive

conduct:

3 . Unreasonably, and without proper cause, refusing to pay damages and/or attorney s fees

4 nd costs awarded to NO RDBY in the Underlying Litigation.

5 . Unreasonably, and without proper cause, refusing to indemnify KENYON against the

6 udgment entered against KENYO N in the U nderlying Action.

7 . Unreasonably, and without proper cause, forcing Plaintiff, as additional insured,

8 ontractual indemnitee, intended beneficiary, final judgment creditor and/or assignee, t

9 nstitute litigation to obtain befits clearly due under the policies.

10 9. As a direct and proximate result of the unreasonable and bad faith conduct of Defenda

11 nd each of them, Plaintiff has suffered and will continue to suffer damages b y incurring

12 ttorney s fees and costs to obtain benefits due under the policies, and other economic and

13 onsequential damages in an am ount to be determined according to proof at trial.

14 0. Plaintiff is infonned and believes that Defendants, and each of them, intentionally

15 ngaged in a course of conduct w hich was intended or expected to oppress Plaintiff, in consc

16 isregard of the rights of Plaintiff to receive the benefits due Plaintiff under the policies and l

17 s alleged in this Complaint. Plaintiff is informed and believes that these acts wer`e willful,

18 espicable, oppressive and/or fraudulent as contemplated by California Civil Code section 32

19 nd that all were done with the knowledge, approval and ratification of Defendants, and each of

20 hem. In order to deter such conduct by Defendants in the future, and to prevent repetition of

21 uch conduct as a practice, Plaintiff prays for exemplary and punitive damages.

22 HER EFOR E, Plaintiff prays for judgment as follows:

23 n the First Cause of ction

24 . pecial damages in an amount exceeding 950,000;

25 . eneral damages according to proof at trial;

26 . osts of suit incurred herein;

27 . uch prejudgment interest as provided by law;

28 . uch other and further relief as the Court deems just and proper.




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On the Second Cause of Action

1 Special damages in an amount exceeding 950,000;

2. General damages according to proof at trial;

3. Costs of suit incurred herein;

4. Such prejudgrnent interest as provided by law;

5. Such other and further relief as the Court deems just and proper.

On the Third Cause of Action

1 Special damages in an amount exceeding 950,000;

2. General dam ages according to p roof at trial;

3. Costs of suit incurred herein;

4. Such prejudgm ent interest as provided by law;

5. Attorney s fees and costs incurred to prove Plaintiff s entitlement to insurance

benefits wrongfully w ithheld;

6. Exemp lary and punitive damages in an amount to make an example of each

Defendant s conduct; and

7. Such o ther and further relief as the Court deems just and proper.

DATED: June 25, 2014WILLOUG HBY, STUART, BENING & COOK , INC

By ~e ~LEXANDER F. STUART

Attorneys for P laintiff,NORDBY CONSTRUCTION, INC.

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-12-COMPLAINT FOR. DAMAGES



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ATTACHMENT CV 5012

CIV1L LAWSUIT NOTICESuperior Court of Callfornla,County of Santa C/ara199 N. First St.,. San Jose, CA 95 113

CASE NUMBE~x6 7

PLEASE READ THIS ENTIRE FORM

PLAINTIFF(the person suing): W lthin 60 days after filing the lawsuit, you m ust serve each Defendant w ith the Com plafnSummons an A lternative Dispute R esolutlon (AD R) lnformatlon Sheet, and a copy of this Civtl Lawsult Notice, and you must fwritten proof of such service.

DEFENDANT(The person sued): You must do each of the following to protect your rights:

1 You must fiie a written response to the Complatnt, using the proper legal form or format, in the Clerk's Office of theCourt, within 30 d ays of the date you were served with the Sum m ons and Comp lalnt;

2 You must serve by mail a copy of your written response on the Plaintift's attorney or on the Plaintiff if Plaintiff has noattomey (to "serve by mail" means to have an adult other than yourself mail a copy); and

3. You m ust attend the first Case Managem ent Conference.

Warning : if you, as the Defend ant, do not foliow these instructions,you m ay automatically lose this case.

RULES ANDFORMS, You m ust foilow the C allfornia Rules of Court and the S uperior Court of California, County of Santa C larLocal C ivil Rules and use proper forms. You can obtain legal information, view the rules and receive forms, free of charge, frothe Self-Help Center at 99 Notre Dame Avenue, San Jose (408-882-2900 x-2926),www.scselfservice.ora(Select "Civil") or from :

State Rules and Judicial Council Form s:www.couriinfo.ca.00vlformsand ~ww.courtinfo.ca;govlrulesLocal R ules and Form s: http: lwww .secsuperiorcourl.orglcivillrulef toc.htm

CASE MANAGRMENT CONFERENCE /CMC :You m ust meet with the other partfes and discuss the case, In person or bytelephone, at least 30 calendar days before the CM C. Yo u must aiso fiil oul, file and serve a Case M anagementStatement(Judicial Council form CM -110) at least 15 caiendar days before lhe CMC.

You oryourattorney must appear at the CM C. You m ay ask toappear bytelephone see Local Crvil Rule B.

YourCase ManagementJudge is:Mary Arand epartment: 9

The 9st CM C is scheduled for: (Complete~t~y~C~r urt)Date, Time; 1:30pm in Department: 09

The nextCMC ts scheduted f o r (Comp leted by party f the 1 ' CMC was c ontinued or has passed)

Date: ime: n Department:

ALTERNATIVE DlSPUTERE SO LU TtO N (A DR); If all parties have appeared and filed a completedADRStipulation Form (localform CV- 5008 ) at least 15 days before the CM C, the Court will cancel the CM C and m ail notice of an ADR Status Conference.Visit the Court's web site atwww.sccsuperlorcourt.o[gicivil/ADR/or call the ADR Adm inislrator (408-8 82-2 100 x -2530) for a list ofADR provid ers and their quallflcations, services, and fees.

W AR NlNG . Sanctions may be imposed if you do not follow the California Rules of Court or the Locai Rules of Court.

Form CV 8912 REV 7 l01108 IVIL LAWSUIT NOTICE age 1 of 1



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SANTA CLARA COUNTY SUPERIOR COURTALTERNATIVE DISPUTE RESOLUTION

INFORMATION SHEET

Many cases can be resolved to the satisfaction of all parties without the necessity of traditional litigation, which can be expensive, timeconsuming, and stressful. The Court finds that It Is In the best interests of the parties thet they participate In aiternatives to traditionallitigation, Including arbitration, mediatlon, neutral evaluation, speclal mastera and referees, and settlement conferences. Therefore, all

matters shall be referred to a n approprlate fomt o fAlternative Dispute Resolution (ADR ) before they a re set for trial, unless there is goodcause to dispense w(th the ADR requirement.

What Is ADR

ADR is the general term for a wide varlety of dispute resolution processes that are aiternatives to Iitigation. Types of ADR processesInclude mediation, arbitratlon, neutral evaluation, speclal masters and referees, and settlement conferences, among others forms.

What are the advantages of choosing ADR Instead of litigation?ADR can have a num ber of advantages over litlgation;

ADR can save time. A dispute can be resolved In a matter of months, or even weeks, whlle litigation can take years.

ADR can save m oney, Attorney's fees, court costs, and expert fees can be reduce d or avolded altogether.

ADR provides more participatton. Parties have m ore opportunities with A DR to express their interests and concerns, Insteadof focusing exc luslvely on legal rights.

ADR provides more control and flexibility ParUes can choose the ADR process that Is most Ilkely to bring a satisfactoryresolution to thely dispute.

ADR can reduce stress. ADR encourages cooperation and comm unication, whlle discouraging the adversarlal atmosphere oflitlgation. Surveys of parties who have paritcipated in an ADR process have found much greater satisfaction than with partieswho ha ve gone thrcugh litigation.

What are the mafn forms of DR offered by the Court?Medlatlon Is an Informal, confidentlal, flexible and non-binding process In the mediator helps the parties to understand the interests ofeveryone Involved, and their practicai and legal choices. The mediator helps the parties to communicate better, explore legal and practicalsettlement options, and reach an acceptable soiutlon of the problem. The mediator does not decide ihe solution to the dispute; the partiesdo

Mediation may be appropriate when:The parties want a non-adversary procedureThe parties have a continuing business or personal reietlonshipComm unicatlon problems are interfering with a resolutionThere Is an emotional element involvedThe pa rties are interested in an injunction, consent decree, or other form of equitable relief

Neutral evaluatlon, sometimes calied Eariy Neutral Evaluation or ENE , is an informal process In which the evaluator, an experiencedneutral lawyer, hears a compact presentation of both sides of the case, gives a non-binding assessrnent of the strengths and weaknesseson each side, and predicts the likely outcome. The evaluatorcan help parties to Identify issues, prepare stipulations, and draftdiscoveryplans. The parties may use the n eutral's evaluation to discuss settlement

Neutral evaluation may be appropriate when :

. he parties are far apart in their view of the law or value of the caseThe case involves a technical issue In which the eva luator has expertiseCase planning assistance w ould be helpful and would save legal fees and cos tsThe parties are interested in an injunction, consent dec ree, or other form of equitable reliaf

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Arbitration Is a less formal process than a trial, with no jury. The arbitrator hears the evidence and arguments of the parties and thenmakes a written decision. The parties can agree to binding or no n-binding arbitration. In binding arbltration, the arbitrator s decislon is finaland cornpietely resolves the case, withoutthe opportunity for appeal. In non-binding arbitration, the arbitrator s decision could resolve thecase, without the opportunity for appeal, unless a party timely rejects the arbitrator s decision within 30 days and requests a trial. Privatearbitralors are allowed to charg e for thelr time.

Arbitration may be appropriate when:The action is for personal injury, property damag e, or breach of contractOniy monetary damages are soughtWltness testlmony, under oath, needs to be evaluatedAn advlsory opinion is sobght from an experienced litigator (if a non-binding arbitratlon)

Clvi I Jud ge AD12 allows parties to have a mediatlon or settlement conference with an experienced judge of the 5uperior Court. Mediationis an informal, confidential, flexible and non-binding process In which the judge hetps the parties to understand the Interests of everyoneInvolved, and their practical and legal choices. A settlement conference is an Informal process In which the judge me ets with the partles otheir attorneys, hears the facts of the dispute, helps identify issues to be resolved, and normally suggests a resolution that the parties mayaccept or use as a basis for further negotiations. The request formediation or settlement conference may be made promptly by stlpulation(agreement) upo n the filing of the Civil complaint and the answ er. There Is no charge for this service.

Clvil Judge ADR may be appropriate when:The parties have complex facts to revlewThe case involves multipte parties and p roblemsThe courthouse surroundings would he helpful to the settlement process

Special mastera and referees are neutral parties who m ay be appo inted by the court to obtain Information or to m ake specific factfindings that may lead to a resolutlon of a dispute.Special masters and referees can be partfcularly effective in complex cases with a number of partles, like construction d(sputes.

Settleme nt conferences are Informal prodesses In which the neutral (a judge or an experienced attorney) meets with the parties or thelraltorneys, hears the facts of the dispute, helps Identify issues to be resolved, and normally suggests a resolution that the partles mayaccept or use as a basis for further negotiations.Setflement conferences can be effecllve when the authority or exp ertise of the judge or experienced attomey m ay hetp the parties reach aresolution.

What kind of disputes can be resolved by A D RAlthough some disputes must go to court, almost any dispute can be resolved through ADR. This includes disputes lnvoiving businessmatters; civil. rights; collections; corporatlons; construction; co nsum er protection; contracts; copyrights; defam ation; dlsabllities;dlscrirnination; employm9nt; environm ental problems; fraud; harassment; health care; housing; insurance; intellectual property; labor,landlord/tenant; media; medical malpractice and otherprofessional negligence; neighborhoo d problems; partnerships; patents; personalInjury; probate; product Ilabllity; property dama ge; real estate; securi6es; spoits; trade secret; and wrong ful death, among other matters

Where can you get asslstance wlth sefectingan approprlate formof DR and a neutral for yourcase Jnformatlon about DRprocedures or answera to other questlons about A D R

ContactSanta Clara County Superior C ourt anta Clara County DRP A C oordinatorADR Administrator 08-702-2784408-882-2530

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Exhibit 2



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nordby construction, inc. v. american safety indemnity company et al complaint

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