Answer Unlimited Fee Applies

Cal. Super. - 6th Dist.June 2, 2021

CROWELL & MORING LLP ATTORNEYS AT LAW 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 GREGORY D. CALL (SBN 120483) GCall@crowell.com RYAN MERKER (SBN 32625 1) RMerker@crowell.com CROWELL & MORING LLP 3 Embarcadero Center, 26th Floor San Francisco, CA 941 11 Telephone: 415.986.2800 Facsimile: 415.986.2827 Counsel for Defendant NEXGENT INC. Electronically Filed by Superior Court of CA, County of Santa Clara, on 8/26/2021 1:50 PM Reviewed By: R. Tien Case #21 CV383360 Envelope: 7146082 SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SANTA CLARA UNLIMITED CIVIL JURISDICTION CREDITORS ADJUSTMENT BUREAU, INC . , Plaintiff, V. NEXGENT INC. AKA NEXGENT, INC. AKA NEXGENT INC; and DOES 1 through 10, Inclusive, Defendant. Case No. 21CV383360 ANSWER ANSWER; CASE NO. 21CV383360 CROWELL & MORING LLP ATTORNEYS AT LAW 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Defendant NeXGenT Inc. (“NeXGenT”) hereby answers the unverified Complaint for Money (“Complaint”) of Plaintiff Creditors Adjustment Bureau, Inc., as assignee 0f Hudson Gateway Place LLC (“Landlord”), as follows: NEXGENT’S GENERAL DENIAL TO PLAINTIFF’S COMPLAINT 1. Pursuant t0 Section 43 1 .30, subdivision (d) 0f the California Code 0f Civil Procedure, NeXGenT generally denies each and every allegation and cause of action in Plaintiff s unverified Complaint. NeXGenT further denies that it has injured or damaged Plaintiff 0r Landlord in any manner whatsoever. NexGenT further denies that Plaintiff has sustained or will sustain any injuries or damages by reason of any alleged act 0r omission 0n the part ofNeXGenT. NeXGenT further denies that Plaintiff is entitled to any form of relief whatsoever or at all. 2. Without admitting any 0f the facts alleged in the Complaint, NeXGenT hereby asserts and alleges the following separate and additional defenses, without prejudice to NeXGenT’s right t0 argue that Plaintiff bears the burden 0fproof as t0 any one 0r more of the following defenses. Furthermore, all defenses are pleaded in the alternative and do not constitute an admission of liability or an admission that Plaintiff is entitled t0 any relief whatsoever. NeXGenT may have additional affirmative defenses of which NexGenT is not fillly aware and reserves the right to assert additional affirmative defenses after they are ascertained. NEXGENT’S SEPARATE AND ADDITIONAL DEFENSES FIRST AND SEPARATE DEFENSE (Failure to State a Claim) As a first and separate defense, solely by way of an affirmative defense and not to be construed as an admission, neither the Complaint nor its purported cause of action stated therein states facts sufficient to constitute a claim upon Which reliefmay be granted against NeXGenT. SECOND AND SEPARATE DEFENSE (N0 Enforceable Contract) As a second and separate defense, solely by way of an affirmative defense and not t0 be construed as an admission, Plaintiff’s claim fails because the Lease, on which the claim is based, was terminated in July 2020. -2- ANSWER; CASE NO. 21CV383360 CROWELL & MORING LLP ATTORNEYS AT LAW 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 THIRD AND SEPARATE DEFENSE (Excuse by Contract) As a third and separate defense, solely by way of an affirmative defense, to the extent this defense is affirmative, and not t0 be construed as an admission, Plaintiff’ s claim is barred by the Lease because NeXGenT was excused under the Lease from its Rent obligations. Among other things, Section 11 0f the Lease entitles NeXGenT t0 an abatement 0f Rent in the event 0f “any damage t0 the Premises (other than trade fixtures), 0r t0 any Common Area or portion 0f the Base Building necessary for access t0 0r tenantability of the Premises, resulting from any fire or other casualty.” The COVID-19 pandemic constitutes a casualty that has resulted in a loss 0f use, i.e., damage t0 the Base Building and Premises. FOURTH AND SEPARATE DEFENSE (Assumption of Risk) As a fourth and separate defense, solely by way 0f an affirmative defense and not t0 be construed as an admission, Plaintiff s claim is barred because Landlord assumed the risk 0f the events alleged. Among other things, Section 5.2 0f the Lease allocates to Landlord the risk and cost 0f complying with all legal requirements so as t0 ensure Tenant’s “use [0f] the Premises for general office use in a normal and customary manner and for Tenant’s employees and Visitors to have reasonably safe access to and from the Premises.” FIFTH AND SEPARATE DEFENSE (Failure of Consideration) As a fifth and separate defense, solely by way 0f an affirmative defense and not to be construed as an admission, Plaintiff’ s claim is barred because the Lease is unenforceable due t0 a failure of consideration thereunder. SIXTH AND SEPARATE DEFENSE (Commercial Frustration) As a sixth and separate defense, solely by way 0f an affirmative defense and not t0 be construed as an admission, Plaintiff’s claim is barred by the doctrine 0f commercial frustration because supervening events substantially destroyed the expected value to be derived from the -3- ANSWER; CASE NO. 21CV383360 CROWELL & MORING LLP ATTORNEYS AT LAW 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 subject of the Lease (i.e., the leased premises) and frustrated the purpose 0f the Lease, thereby excusing and relieving NeXGenT from any obligations thereunder. SEVENTH AND SEPARATE DEFENSE (Impossibility) As a seventh and separate defense, solely by way 0f an affirmative defense and not t0 be construed as an admission, Plaintiff’s claim is barred by the doctrine 0f impossibility because supervening events prevented NeXGenT’s performance under the Lease, thereby excusing and relieving NeXGenT from any obligations thereunder. EIGHTH AND SEPARATE DEFENSE (Unclean Hands) As an eighth and separate defense, solely by way 0f an affirmative defense and not t0 be construed as an admission, Plaintiff’s claim is barred by Plaintiff s 0r Landlord’s own unclean hands, including by its lack 0f cooperation or refusal t0 engage in meaningfill discussions regarding rent relief. As a result 0f Plaintiff s or Landlord’s acts and omissions in the matters relevant to Plaintiff’s claims, Plaintiff has unclean hands and is therefore barred from asserting any claim for relief against NeXGenT. NINTH AND SEPARATE DEFENSE (Estoppel) As a ninth and separate defense, solely by way 0f an affirmative defense and not t0 be construed as an admission, Plaintiff s claim is barred by the doctrine of estoppel. TENTH AND SEPARATE DEFENSE (Waiver) As a tenth and separate defense, solely by way of an affirmative defense and not t0 be construed as an admission, Plaintiff’s claim is barred by the doctrine 0f waiver. ELEVENTH AND SEPARATE DEFENSE (Excuse by Law) As an eleventh and separate defense, solely by way 0f an affirmative defense and not to be construed as an admission, Plaintiff’ s claim is barred because NeXGenT’s alleged non- -4- ANSWER; CASE NO. 21CV383360 CROWELL & MORING LLP ATTORNEYS AT LAW 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 performance under the Lease was excused under, inter alia, California Civil Code section 151 1. TWELFTH AND SEPARATE DEFENSE (Constructive Eviction) As a twelfth and separate defense, solely by way 0f an affirmative defense and not to be construed as an admission, Plaintiff s claim is barred because NeXGenT was constructively evicted from the leased premises, thereby discharging it from any obligations under the Lease. THIRTEENTH AND SEPARATE DEFENSE (Right t0 Release) As a thirteenth and separate defense, solely by way 0f an affirmative defense and not to be construed as an admission, Plaintiff’ s claim is barred because NexGenT has a right to be released from the Lease. FOURTEENTH AND SEPARATE DEFENSE (Failure t0 Perform by Landlord) As a fourteenth and separate defense, solely by way 0f an affirmative defense and not t0 be construed as an admission, Plaintiff’s claim is barred because Landlord has failed t0 perform all terms, conditions, covenants, and agreements required t0 be performed by Landlord. FIFTEENTH AND SEPARATE DEFENSE (Substantial Compliance) As a fifteenth and separate defense, solely by way of an affirmative defense and not to be construed as an admission, Plaintiff s claim is barred because NeXGenT substantially performed under the Lease. SIXTEENTH AND SEPARATE DEFENSE (Setoff) As a sixteenth and separate defense, solely by way 0f an affirmative defense and not t0 be construed as an admission, NexGenT alleges that any recovery for damages allegedly incurred by Plaintiff should be offset in the amount 0f any benefits received by Plaintiff 0r Landlord, including, but not limited to, NeXGenT’s security deposit in the amount 0f $33,696.33 unlawfully retained by Plaintiff or Landlord. -5- ANSWER; CASE NO. 21CV383360 CROWELL & MORING LLP ATTORNEYS AT LAW 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SEVENTEENTH AND SEPARATE DEFENSE (Failure t0 Mitigate) As a seventeenth and separate defense, solely by way 0f an affirmative defense and not t0 be construed as an admission, NexGenT alleges that Plaintiff’ s damages, if any, are barred t0 the extent that Plaintiff or Landlord failed to mitigate any damages, and any recovery 0f damages there may be (which NeXGenT denies) should be reduced in the amount by which Plaintiff or Landlord should have mitigated its alleged damages. EIGHTEENTH AND SEPARATE DEFENSE (Avoidable Consequences) As an eighteenth and separate defense, solely by way of an affirmative defense and not t0 be construed as an admission, Plaintiffs claim is barred, in whole or in part, by the doctrine of avoidable consequences because Plaintiff s alleged damages, if any, could have been avoided by reasonable effort 0r expenditure, Which Plaintiff or Landlord failed to take. Any recovery of damages there may be (Which NeXGenT denies) should be reduced in the amount by Which Plaintiff or Landlord could have avoided. NINETEENTH AND SEPARATE DEFENSE (Attorneys’ Fees and Interest) As a nineteenth and separate defense, solely by way 0f an affirmative defense and not to be construed as an admission, Plaintiff has failed t0 state facts sufficient t0 provide a legal or factual basis to award attorneys’ fees or interest to Plaintiff. RESERVATION OF DEFENSES NeXGenT reserves all rights to plead any additional, separate defenses, the availability of Which may come to light as the action proceeds. Further, NeXGenT reserves all rights t0 withdraw any defenses it may subsequently determine to be inapplicable. Nothing in the foregoing defenses constitutes a concession that NeXGenT bears any burden ofproof 0n any issue on which it would not otherwise bear such a burden. PRAYER WHEREFORE, NeXGenT prays for judgment against Plaintiff as follows: -6- ANSWER; CASE NO. 21CV383360 CROWELL 8: MORING LLP ATTORNEYS AT LAW A QQUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1. That judgment be entered in favor 0fNexGenT and that Plaintiff take nothing by its action herein; 2. That NeXGenT be awarded its costs of suit and attorneys’ fees, to the extent permitted by law and pursuant to those provisions of the Lease awarding attorneys’ fees and costs t0 the prevailing party; and 3. For such other and further relief as the Court deems just and proper. Dated: July 28, 2021 CROWELL & MORING LLP Bjajgafl Grego . Call Ryan erker Counsel for Defendant NEXGENT INC. ANSWER; CASE NO. 2 1 CV383360 CROWELL & MORING LLP ATTORNEYS AT LAW 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Creditors Adjustment Bureau, Inc, v. NexGenTInc. Santa Clara Superior Court, Case N0. 21CV383360 PROOF OF SERVICE I, William H. Morris, state: My business address is 3 Embarcadero Center, 26th Floor, San Francisco, California 941 1 1. I am over the age of eighteen years and not a party t0 this action. On the date set forth below, I served the foregoing document(s) described as: ANSWER On the following person(s) in this action: Kenneth J. Freed, Esq. Attorneys for Plaintiff CREDITORS David E. Weeks, Esq. ADJUSTMENT BUREAU, INC. LAW OFFICES OF KENNETH J. FREED 14226 Ventura Boulevard Sherman Oaks, CA 91423 Tel. 818.990.0888 kfreed@kj fesq.com dweeks@kjfesq.com D BY FIRST CLASS MAIL: I am employed in San Francisco County where themailing occurred. I enclosed the document(s) identified above in a sealed envelope 0r package addressed t0 the person(s) listed above, With postage fully paid. I placed the envelope or package for collection and mailing, following our ordinary business practice. I am readily familiar with this firm’s practice for collecting and processing correspondence for mailing. On the same day that correspondence is placed for collection and mailing, it is deposited in the ordinary course of business with the United States Postal Service. D BY MESSENGER SERVICE: I served the document(s) identified above byplacing them in an envelope or package addressed to the person(s) listed above and providing them t0 a professional messenger service for service. A declaration 0f personal service by the messenger is attached. D BY OVERNIGHT DELIVERY: I enclosed the document(s) identified above in asealed envelope 0r package addressed to the person(s) listed above, in an envelope or package designated by the overnight delivery carrier With delivery fees paid or provided for. Iplaced the envelope or package for collection and overnight delivery at an office or a regularly utilized drop box 0f the overnight delivery carrier, 0r by delivering to a courier 0r driver authorized by the overnight delivery carrier t0 receive documents. ANSWER; CASE NO. 21CV383360 CROWELL 8: MORING LLP ATTORNEYS AT LAW A “GUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 BY FACSIMILE: Based on an agreement of the parties to accept service by facsimile transmission, I faxed the document(s) identified above to the person(s) at the fax number(s) listed above. The transmission was reported complete and Without error. I have attached a copy of the transmission report that was issued by the facsimile machine. BY ELECTRONIC SERVICE VIA ODYSSEY E-FILE CA: Pursuant t0 CCP 1010.6 and CRC 2.25 1 , I electronically served through Odyssey eFileCA and caused the document(s) to be sent to the person(s) at the email addresses designated on the Transaction Receipt located 0n the Odyssey eFileCA website. To the best ofmy knowledge, at the time of the transmission, the transmission was reported as complete and without error. BY ELECTRONIC MAIL: Based on a court order 0r an agreement of the parties t0 accept service by electronic mail, I caused the document(s) identified above t0 be transmitted electronically t0 the person(s) at the e-mail address(es) listed above. I did not receive, within a reasonable time after the transmission, any electronic message or other indication that the transmission was unsuccessful. I declare under penalty of perjury under the laws of the State of California that the above is true and correct. Executed on July 28, 2021, at San Francisco, California.4? William H. Morris ANSWER; CASE NO. 2 1 CV383360