Palmtree Acquisition Corporation v. Neely et al

Filing 79

STIPULATION AND ORDER re answers to 1st amended complaint; Signed by Judge Marilyn Hall Patel on 8/3/2010. (awb, COURT STAFF) (Filed on 8/3/2010)

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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 PALMTREE ACQUISITION CORPORATION, Case No. CV 08 3168 MHP a Delaware corporation, STIPULATION AND [PROPOSED] Plaintiff, ORDER RE ANSWERS TO FIRST 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; STARK INVESTMENT COMPANY, a California general partnership; GRUBB & ELLIS REALTY INCOME TRUST, LIQUIDATING TRUST, a California trust; Northrop Grumman Systems Corporation, a Delaware corporation, and DOES 1-20, inclusive, Defendants. AND RELATED ACTIONS
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RECITALS 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 their effective soluabilities as measured using the residual DNAPL detection method of Feenstra, Mackay, and Cherry (1991). The limitations expressed in the preceding sentence on the release contained in this paragraph are referred to as "the Paragraph 9 reopeners". 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 defendants and the plaintiff, and/or their predecessors, requiring the further investigation and monitoring of PCE contamination which potentially impacted the deeper aquifer that may be in the form of DNAPLs, thereby triggering the "Paragraph 9 reopeners" ("RWQCB Directives"). As a result of the RWQCB Directives, certain parties to the prior 1994 Settlement, made a demand upon other parties asserting that the Paragraph 9 reopener applied and demanding that they respond to the RWQCB Directives. F. On July 1, 2008, plaintiff Palmtree Acquisition Corporation, the successor to

one of the 1994 Settlement parties, Catellus Development Corporation, filed a Complaint for CERCLA Cost Recovery, Damages and Declaratory Relief, seeking contribution and damages ("the Original Complaint") against certain of other parties to the 1994 Settlement, pursuant to the Paragraph 9 reopener. G. Defendant The Grubb & Ellis Realty Income Trust, Liquidating Trust

("GERIT") has not appeared, is not represented by counsel, and claims to have dissolved and to no longer exist, and thus is not a party to this stipulation. H. Third Party Plaintiffs The Kirrberg Corporation and Stark Investment

Company have asserted claims against the beneficiaries of the GERIT (Document No. 64). The beneficiaries are alleged to have received improper distributions from the GERIT. I. On September 15, 2008 Magistrate Judge Edward M. Chen signed a stipulation

and order (Document No. 13) providing that, among other things, the defendants were deemed to have denied each and every allegation in the Original Complaint, that defendants were deemed to have filed crossclaims against each other for contribution and indemnity, and deemed to have filed counterclaims for contribution and indemnity against Plaintiff. J. Subsequent to the filing of the Original Complaint, certain parties agreed to

cooperate in jointly retaining an environmental consultant to respond to the RWQCB Directives. The environmental consultant has been engaged with the RWQCB and the parties have made substantial progress towards meeting the demands of the RWQCB. K. 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 discussion and investigation relating to the factual background, ownership and operations of the parties and their conduct which may have resulted in the PCE contamination. L. On July 14, 2010 plaintiff Palmtree Acquisition Corporation filed its First

Amended Complaint (the "Current Action" or "FAC"), adding Northrop Grumman Systems Corporation ("Northrop Grumman") as a party. M. Northrop Grumman and the other parties to this stipulation reached a

settlement of their respective claims against one another. Northrop Grumman was named as a party so that the parties could make a good faith settlement application to the Court. If the Court finds that the settlement was entered into in good faith, Northrop Grumman will be dismissed as a party. N. The parties to this Current Action, who were defendants in the Prior Action,

filed answers in the Prior Action. O. The responses and defenses in this Current Action should be substantially

similar to those raised by the parties in the Prior Action. P. The responses and defenses of Northrop Grumman should be substantially

similar to those raised by the parties named in the Prior Action. Therefore, in the interest of judicial economy, pursuant to Local Rule 6-1(b) and 7-12, the parties below hereby agree and stipulate as follows: STIPULATION 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 FAC. 2. Each of the defendants to this Current Action reserves the right to supplement

its response to the FAC, and may file an answer and separate crossclaims or counterclaims at a later date, but no later than 60 days following the conclusion of mediation with mediator Timothy Gallagher, currently underway. Mediation will be concluded at such time as: (a) a settlement is reached, or (b) the mediator issues a letter concluding that a settlement has not been reached and the mediation is concluded.
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3.

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 parties reserve any and all rights against such third parties. Each party reserves its right to file crossclaims against parties named in the First Amended Third Party Complaint filed by third party plaintiffs Stark Investment Company and the Kirrberg Corporation. The plaintiff reserves the right to amend the complaint to add or remove allegations, to add new parties or to make any other changes consistent with the Federal Rules of Civil Procedure. Wherefore, the Parties respectfully request that the Court approve this Stipulation. Dated: August 2, 2010 By: COX, CASTLE & NICHOLSON LLP /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 By: /s/ Noel Edlin Noel Edlin 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 GONSALVES & KOZACHENKO By: /s/ Selena P. Ontiveros Selena P. Ontiveros Attorneys for Defendant STARK INVESTMENT COMPANY, a California general partnership

Dated: July 30, 2010

Dated: July 30, 2010

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Dated: July 31, 2010 By:

DONGELL LAWRENCE FINNEY LLP /s/ Thomas F. Vandenburg Thomas F. Vandenburg Attorneys for Defendant MULTIMATIC CORPORATION, a New Jersey corporation ROGERS JOSEPH O'DONNELL By: /s/ Robert C. Goodman Robert C. Goodman Attorneys for Defendant CHARLES FREDERICK HARTZ dba PAUL'S SPARKLE CLEANERS; CHARLES F. HARTZ, an individual McKENNA LONG & ALDRIDGE LLP By: /s/ Christian Volz Christian Volz Attorneys for Defendant NORTHROP GRUMMAN SYSTEMS CORPORATION GORDON WATROUS RYAN LANGLEY BRUNO & PALTENGHI INC. 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 FOLEY MCINTOSH FREY & CLAYTOR By: /s/ Jim Claytor Jim Claytor Attorneys for Defendant WESTERN STATES DESIGN, a California corporation
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Dated: July 30, 2010

Dated: July 30, 2010

Dated: July 30, 2010

Dated: August 2, 2010 25 26 27 28

STIPULATION AND [PROPOSED] ORDER RE ANSWERS TO FIRST AMENDED COMPLAINT CASE NO: CV 08 3168 MHP
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Dated: August 2, 2010 By:

THE COSTA LAW FIRM /s/ Daniel P. Costa Daniel P. Costa Attorneys for Defendant STARK INVESTMENT COMPANY

UNIT ED

IT IS SO ORDERED
8/3/2010 Dated: _______________________

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