Palmtree Acquisition Corporation v. Neely et al

Filing 139

STIPULATION AND ORDER RE ANSWER TO SECOND AMENDED COMPLAINT re 137 Proposed Order filed by Charles F. Hartz, Charles Frederick Hartz, Charles Frederick Hartz dba Paul's Sparkle Cleaners. Signed by Judge Edward M. Chen on 8/3/11. (bpf, COURT STAFF) (Filed on 8/3/2011)

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ROGERS JOSEPH O’DONNELL
ROBERT C. GOODMAN (SBN 111554)
ANN M. BLESSING (SBN 172573)
D. KEVIN SHIPP (SBN 245947)
311 California Street
San Francisco, California 94104
Telephone: [phone]
Facsimile:
415.956.6457
E-mail: [e-mail]; [e-mail]; [e-mail]
Attorneys for Defendants
CHARLES FREDERICK HARTZ dba PAUL’S
SPARKLE CLEANERS and CHARLES F. HARTZ
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA

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PALMTREE ACQUISITION CORPORATION, Case No. CV 08 3168 EMC
a Delaware corporation,
STIPULATION AND [PROPOSED]
ORDER RE ANSWERS TO SECOND
Plaintiff,
AMENDED COMPLAINT
vs.
MICHAEL R. NEELY, an individual; PERRY J.
NEELY, an individual; GARY NEELY, an
individual; MICHAEL R. NEELY, PERRY J.
NEELY and GARY NEELY dba MIKE'S ONE
HOUR CLEANERS; CHARLES FREDERICK
HARTZ dba PAUL'S SPARKLE CLEANERS;
CHARLES F. HARTZ, an individual;
MULTIMATIC CORPORATION, a New Jersey
corporation; WESTERN STATES DESIGN, a
California corporation; MCCORDUCK
PROPERTIES LIVERMORE, LLC, a Delaware
limited liability company individually and as the
successor to JOHN MCCORDUCK ,
KATHLEEN MCCORDUCK, PAMELA
MCCORDUCK, SANDRA MCCORDUCK
MARONA, and IMA FINANCIAL
CORPORATION, a California corporation;
JOHN MCCORDUCK individually;
KATHLEEN MCCORDUCK individually;
PAMELA MCCORDUCK individually;
SANDRA MCCORDUCK MARONA
individually; IMA FINANCIAL
CORPORATION, a California corporation;
STARK INVESTMENT COMPANY, a
California general partnership; GRUBB &
ELLIS REALTY INCOME TRUST,

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STIPULATION AND [PROPOSED] ORDER RE ANSWERS TO SECOND AMENDED COMPLAINT
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LIQUIDATING TRUST, a California trust; and
DOES 1-20, inclusive,

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Defendants.

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AND RELATED ACTIONS
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RECITALS
A.

Plaintiff Palmtree Acquisition Corporation filed this action (“Action”) as a

“reopener” of a prior action that was conditionally settled, which prior action was filed on
February 3, 1993 in the United States District Court for the Northern District of California,
entitled Grubb & Ellis Realty Trust v. Catellus Development Corp., et al., and related crossactions, Case No. C93-0383 SBA (“Prior Action”).
B.

In the course of litigating the Prior Action, the parties to the Prior Action

engaged in discovery relating to the factual background, ownership and operations of certain
of the parties to the Prior Action and their conduct which may have resulted in the PCE
contamination.
C.

On February 7, 1994, the parties to the Prior Action entered into a settlement

agreement (“1994 Settlement”). On February 17, 1994, this Court entered an order approving
the settlement agreement and dismissing the Prior Action.
D.

Pursuant to the 1994 Settlement, the parties agreed that the release amongst

each other would not extend to:
…any claims, causes of action, obligations, damages, expenses or liabilities
resulting from (1) claims or cross-claims arising from actions brought by third
parties after the date of this agreement relating to PCE [perchloroethylene]
contamination at the properties, or (2) actions by governmental agencies
requiring cleanup of PCE contamination or seeking recovery of governmental
response costs for the cleanup of PCE contamination: (a) of the deeper aquifer
as defined in Paragraph 5 of SCO [Site Cleanup Order], or (b) in the form of
DNAPLs, defined as PCE found in pore-water concentrations which exceed

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their effective soluabilities as measured using the residual DNAPL detection

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method of Feenstra, Mackay, and Cherry (1991). The limitations expressed in

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the preceding sentence on the release contained in this paragraph are referred to

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as “the Paragraph 9 reopeners”.

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E.

On March 17, 2008, and March 21, 2008, the California Regional Water

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Quality Control Board (“RWQCB”), a governmental agency, sent letters to certain of the

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defendants and the plaintiff, and/or their predecessors, requiring the further investigation and

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monitoring of PCE contamination which potentially impacted the deeper aquifer that may be

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in the form of DNAPLs, thereby triggering the “Paragraph 9 reopeners” (“RWQCB

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Directives”). As a result of the RWQCB Directives, certain parties to the prior 1994

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Settlement, made a demand upon other parties asserting that the Paragraph 9 reopener applied

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and demanding that they respond to the RWQCB Directives.

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F.

On July 1, 2008, plaintiff Palmtree Acquisition Corporation, the successor to

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one of the 1994 Settlement parties, Catellus Development Corporation, filed a Complaint for

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CERCLA Cost Recovery, Damages and Declaratory Relief, seeking contribution and

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damages (“the Original Complaint”) against certain of other parties to the 1994 Settlement,

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pursuant to the Paragraph 9 reopener.

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G.

Defendant The Grubb & Ellis Realty Income Trust, Liquidating Trust

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(“GERIT”) has not appeared and claims to have dissolved and to no longer exist, and thus is

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not a party to this stipulation.

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H.

On September 15, 2008 Judge Edward M. Chen signed a stipulation and order

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(Document No. 13) providing that, among other things, the defendants were deemed to have

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denied each and every allegation in the Original Complaint, that defendants were deemed to

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have filed crossclaims against each other for contribution and indemnity, and deemed to have

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filed counterclaims for contribution and indemnity against Plaintiff.

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I.

Subsequent to the filing of the Original Complaint, certain parties agreed to

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cooperate in jointly retaining an environmental consultant to respond to the RWQCB

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Directives. The environmental consultant has been engaged with the RWQCB and the parties
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have made substantial progress towards meeting the demands of the RWQCB.
J.

Subsequent to the filing of the Original Complaint, the parties participated in

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meditation with Timothy Gallagher, Esq., during which the parties engaged in an in depth

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discussion and investigation relating to the factual background, ownership and operations of

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the parties and their conduct which may have resulted in the PCE contamination. The parties

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are still participating in mediation.

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K.

On July 14, 2010, plaintiff Palmtree Acquisition Corporation filed its First

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Amended Complaint (“FAC”), adding Northrop Grumman Systems Corporation (“Northrop

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Grumman”) as a party. Northrop Grumman has settled this matter and been dismissed with

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prejudice from this action; therefore, Northrop Grumman need not respond to the SAC.
L.

On July 14, 2011 plaintiff Palmtree Acquisition Corporation filed its Second

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Amended Complaint (the “Current Action” or “SAC”), clarifying plaintiff’s intent to include

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in the original complaint and/or adding defendants John McCorduck, Kathleen McCorduck,

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Pamela McCorduck, Sandra McCorduck Marona, (“collectively the “McCorduck

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Defendants”) and IMA Financial Corporation.

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M.

The parties to this Current Action, who were defendants in the Prior Action,

filed answers in the Prior Action. Some parties also filed cross-claims in the Prior Action.
N.

The responses and defenses in this Current Action should be substantially

similar to those raised by the parties in the Prior Action.
Therefore, in the interest of judicial economy, pursuant to Local Rule 6-1(b) and 7-12,

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the parties below hereby agree and stipulate as follows:

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STIPULATION

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1.

Each of the defendants in this Current Action, who have signed this stipulation

and proposed order, shall be deemed to have denied each and every allegation in the SAC.
2.

The defendants to this Current Action, who have signed this stipulation and

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proposed order, shall be deemed to have filed cross-claims against each other for contribution

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and indemnity and to have filed counter-claims for contribution and indemnity against the

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plaintiff.
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3.

Each of the defendants to this Current Action reserves the right to supplement

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its response to the SAC, and may file an answer and separate crossclaims or counterclaims at

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a later date, but no later than 60 days following the conclusion of mediation with mediator

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Timothy Gallagher, currently underway. Mediation will be concluded at such time as: (a) a

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settlement is reached, or (b) the mediator issues a letter concluding that a settlement has not

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been reached and the mediation is concluded. Each defendant has not waived the right to

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assert new affirmative defenses that were not asserted in the Prior Action.

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4.

Each of the defendants to this Current Action further reserves the right to file

crossclaims against other third parties who are not parties to this Current Action, and the

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parties reserve any and all rights against such third parties. Each party reserves its right to

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file crossclaims against parties named in the Third Amended Third Party Complaint filed by

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third party plaintiffs Stark Investment Company and the Kirrberg Corporation. The plaintiff

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reserves the right to amend the complaint to add or remove allegations, to add new parties or

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to make any other changes consistent with the Federal Rules of Civil Procedure.

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Wherefore, the Parties respectfully request that the Court approve this Stipulation.
Dated: July 26, 2011

COX, CASTLE & NICHOLSON LLP

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By:

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Dated: July 26, 2011

/s/ Peter M. Morrisette
Stuart I. Block
Peter M. Morrisette
Attorneys for Plaintiff
PALMTREE ACQUISITION
CORPORATION, a Delaware corporation
f/k/a Catellus Development Corporation
BASSI EDLIN HUIE & BLUM LLP

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By:

/s/ Farheena A. Habib
Farheena A. Habibi
Attorneys for Defendants
MICHAEL R. NEELY, an individual;
PERRY J. NEELY, an individual; GARY
NEELY, an individual; MICHAEL R.
NEELY, PERRY J. NEELY and GARY
NEELY dba MIKE’S ONE HOUR
CLEANERS
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Dated: July 26, 2011

GONSALVES & KOZACHENKO

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By:

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Dated: July 27, 2011

/s/ Selena P. Ontiveros
Selena P. Ontiveros
Attorneys for Defendant
STARK INVESTMENT COMPANY, a
California general partnership
DONGELL LAWRENCE FINNEY LLP

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By:
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/s/ Thomas F. Vandenburg
Thomas F. Vandenburg
Attorneys for Defendant
MULTIMATIC CORPORATION, a New
Jersey corporation

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Dated: July 28, 2011

ROGERS JOSEPH O’DONNELL

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By:
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/s/ Robert C. Goodman
Robert C. Goodman
Attorneys for Defendant
CHARLES FREDERICK HARTZ dba
PAUL’S SPARKLE CLEANERS;
CHARLES F. HARTZ, an individual

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Dated: July 26, 2011

GORDON WATROUS RYAN
LANGLEY BRUNO & PALTENGHI
INC.

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By:

/s/ Bruce Clinton Paltenghi
Bruce Clinton Paltenghi
Attorneys for Defendant
McCORDUCK PROPERTIES
LIVERMORE, LLC, a Delaware limited
liability company individually and as the
successor to JOHN McCORDUCK,
KATHLEEN McCORDUCK, PAMELA
McCORDUCK, SANDRA McCORDUCK
MARONA, and IMA FINANCIAL
CORPORATION, a California corporation

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Dated: July 26, 2011

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FOLEY MCINTOSH FREY & CLAYTOR
By:

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/s/ James D. Claytor
James D. Claytor
Attorneys for Defendant
WESTERN STATES DESIGN, a
California corporation

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Dated: July 26, 2011

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THE COSTA LAW FIRM
By:

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/s/ Daniel P. Costa
Daniel P. Costa
Attorneys for Defendant
STARK INVESTMENT COMPANY

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IT IS SO ORDERED

S

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U.S. DISTRICT RDERE JUDGE
SO O COURT

IT IS

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August 3, 2011
Dated: _______________________

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