Uptown Newport Jamboree, LLC vs. Newport Fab, LLC

Reply to Motion

Cal. Super. - 4th Dist.February 13, 2018

Lo 0 9 S N nt A W N NN N N N N N D N D N e m p m em em pm p m em em R N R W N E S 0 N N R W DN O JENNIFER L. KELLER (CA SBN 84412) JKeller@kelleranderle.com STEVEN J. AARONOFF (CA SBN 158921) ELECTRONICALLY FILED SAaronoff@kelleranderle.com Superior Court of California, KELLER/ANDERLE LLP County of Orange 18300 Von Karman Ave., Suite 930 0503/2018 at 07:55:00 Ph Irvine, California 92612-1057 Clerk of the Superior Court Telephone: (949) 476-8700 By Monique Ramirez, Deputy Clerk Facsimile: (949) 476-0900 JASON D. RUSSELL (SBN 169219) jason.russell @skadden.com HILLARY A. HAMILTON (SBN 218233) hillary.hamilton @skadden.com ADAM K. LLOYD (SBN 307949) adam.lloyd @skadden.com SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP 300 South Grand Avenue, Suite 3400 Los Angeles, California 90071-3144 Telephone: (213) 687-5000 Facsimile: (213) 687-5600 Attorneys for Defendant Newport Fab, LLC a.k.a. Jazz Semiconductor SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF ORANGE, CENTRAL JUSTICE CENTER UPTOWN NEWPORT JAMBOREE, LLC, a he ca Case No.: 30-2018-00973247-CU-OR-CJC Delaware limited liability company, (1) DEFENDANT NEWPORT FAB, LLC’S REPLY IN SUPPORT OF DEMURRER TO PLAINTIFF’S VERIFIED FIRST AMENDED COMPLAINT FOR DECLARATORY RELIEF Plaintiff, Vv. NEWPORT FAB, LLC, a Delaware limited liability company d/b/a JAZZ SEMICONDUCTOR, Filed Under Separate Cover: (2) DEFENDANT’S OPPOSITION TO PLAINTIFF’S OBJECTIONS TO DEFENDANT’S REQUEST FOR JUDICIAL NOTICE AND EVIDENCE; (3) DECLARATION OF DR. STEPHEN A. MARTIN; and (4) PROOF OF SERVICE. Defendant. Action Filed: February 13,2018 Dept.: C18 Judge: Hon. Theodore Howard Hearing Date: May 10, 2018, 1:30 p.m. RESERVATION NO.: 72791175 N r N e N e N e N e N e N e N e N e N e N e N e N e N e N e N e N e N e N e N e N e N e N e N e N e N e REPLY ISO DEFENDANT’S DEMURRER TO PLAINTIFE’S VERIFIED FAC FOR DECLARATORY RELIEF Lo 0 9 S N nt l A W N NN N N N N N D N D N e m p m em em pm p m em em R N RAR W N S N N N T R W DN = O TABLE OF CONTENTS Page: PRELIMINARY STATEMENT yous sessions sss 5555 5mm amines Gass aise 1 ARGUMENT oot ea te sate sees eae eh te sheet estab este sate staat esse enbe enna 2 I. Plaintiff’s Filing Of A Complaint Against Jazz Does Not Show An “Actual COMETOVEISY™ «cutee settee estes sree eee eee sate eee ease estes sees sane ease enn eennee enna enneen Zz IL. Jazz’s Judicially Noticeable Material Can Be Considered On Demurrer.............cc.cou..... 4 IIL There Is No Controversy As To Jazz’s Alleged Noncompliance With The NBMC......... 5 IV. Plaintiff Concedes Jazz’s MM 10-3 Arguments And Admits Any Dispute Is Not TRL vemos ovcessoesm s ca.4 A SHAB SHR EAR S H FARS K S SSAUB SSA 55 7 V. Plaintiff Confirms There Is No “Non-Curable Breach” Of The Lease..........ccccccceeuenunenee. 8 A. Plaintiff Abandons Its “Non-Curable” Breach Allegations............ccccevveevieeneannen. 8 B. Plaintiff Concedes Its Interpretation Of The 7th Amendment Effects A FOTTRITUTE......eiieie cece cece secre eee eres sree sane ees 9 C. Plaintiff’s Attempt To Read The SMA Testing Into The 7th Amendment FALLS 1. eee eee eee eee 10 VL Plaintiff Admitted There Is No Controversy That Jazz Met 65 dBA Leq By June 30, 2010. cee eae see ee eae shee sees be eae sete ste ene anaes 10 CONCLUSION oeseet ete eate sates t e tates be sate shee sees ae abe ea be eb be she esac ease be eabeebteseee nas 10 2 2 REPLY ISO DEFENDANT’S DEMURRER TO PLAINTIFF’S VERIFIED FAC FOR DECLARATORY RELIEF oe 0 NN A N U n A W N = NN N N N N N D N D N e m p m em em pm p m em em R N RAR W N S N N N T R W DN = O TABLE OF AUTHORITIES PAGE CASES Aragon-Haas v. Family Security Insurance Services, Inc., 231 Cal. APP-3A 232 (1991) weet e cts eee testes sabe sabe e teeta a ebae sabe enne eens ee snes eane 8 Auberry Union School District v. Rafferty, 226 Cal APD. 20 59D CLOG) s5m50 snus sos sn nso s ssn 5am 5055055555 5555557538 545535 S55055 5 0 555358 SA555 45-58 SHE5 50 ASEH IN 8 Beckley v. Reclamation Board of State, 205 CaLAPP-2d 734 (1962) oie ee ete st teste atest ee sb be eabe ese e et aesbbe sabe aneessaens 5 Brant v. Bigler, 92 Cal APP-2d 730 (1949) «eee eee eres sabes t ee she eabe estes tee sbbe sabe aneenaeens 9 Bridgeman v. Allen, 219 Cal. APP.4th 288 (2013) eevee cease eee estes atest eee abeeebe este eb ee ssbe este ene eens ee esa enne 1 California Water & Telephone Co. v. County of Los Angeles, 233 Cal APD. 2 16 CLIT Y .cossnss sumunsms sons ons s smsmss soma 05055555 5555557558 5455555 S550555 0545558 SA555 45-59 SH55 50 SASHA 3 Cantu v. Resolution Trust Corp., 4 CalLAPP.Ath 857 (1992) neice eee eee eter st ee eee atest ee sb ee este este ates sabe sabe ane ee naens 5 Childs v. California, 144 Cal. APP.3d 155 (1983) niece eee eee eerste eee rb ee ete eabe estes bee sabe enbe ante eseessae eens 4 In re Claudia E., 163 Cal. APP.4th 627 (2008) ....eeiiiieiie eit etcetera teste sete ete e sees stee este eabe esse ee see ssbe esse anneessae esse enne 4 D. Cummins Corp. v. U.S. Fidelity & Guaranty Co., 246 Cal App Ath. TARA (ONE) wuss sums snsmwssn cosassnn soso ons sno 5553575 5055555.50 5555558 55557545 5555578 5055555. 08 BHSREH ER5595 2.3 Ellis v. County of Calaveras, 245 Cal. APP.Ath 64 (2016) ..eoeiieieieeieeee ieee eects sees ee stte ee be atest ee sbae este estes bee sbbe sabe ane ee naens 3 Evans v. City of Berkeley, 38 CaliAth 1 (2000) ....eeeeneieiie eit eters teste ete ete e ete esbe estes bee eabe este anse eet ee ebbe ante ane eenseeesae anne 5 Fox v. JAMDAT Mobile, Inc., 185 Cal. App.4th 1068 (2010) ...eiiuiieiieeiieeieeit teeter eerste sees st ee etbe sabe e eee tee sabe snbeanee seas ssee eens 4 Fremont Indemnity Co. v. Fremont Gen. Corp., 148 Cal APPA. OT COUT) su ssn sows swans swssssnsn oes 255505 5555555505555 505555558 SH5535559 5555550 455555.08 BASREHH E55559% 5,9 George v. Automobile Club of Southern California, 201 Cal APP.4th 1112 (2011) ceneieieieeie etic eee tee shee sabe ese e ese e sabe eens 6,7,9 Hoffman v. Smithwoods RV Park, LLC, 179 Cal. App.4th 390 (2009) ....eeiiiieiie cites eters setae sees st ee etbe sabe e ese ee nbee sabe enbe ante esas ssae eens 7 Hot Rods, LLC v. Northrop Grumman Systems, 242 Cal. APP.Ath 1166 (2015) eee cease eee ete seats tees ate sabe e testes este sete enne esses esee eens 7 3 3 REPLY ISO DEFENDANT’S DEMURRER TO PLAINTIFF’S VERIFIED FAC FOR DECLARATORY RELIEF oe 0 NN A N U n A W N = NN N N N N N D N D N e m p m em em pm p m em em R N RAR W N S N N N T R W DN = O Lee v. Silveira, 6 Cal. APP.Sth 527 (2016) ce. eee st ee eebe eee e bee ebbeesbe ene eeseeesae eens 6, 8 Leonard Carder, LLP v. Patten, Faith & Sandford, 189 Cal APPA. 92 C20LEYY cu ssn snosnsn in suman swssoss.onmmsss o55m555.55 5555555555555 56 5755555 £55555. 50 55558 5553550 S555 550 SHG5 54855 3 Linda Vista Village San Diego Homeowners Ass'n v. Tecolote Investors, LLC, 234 Cal. APP.Ath 166 (2015) weenie ieee eects testes ste eebe atest ee sh be esbe estes bee sbae sabe anee saan 2 Meyer v. Sprint Spectrum L.P., 45 Cal4th 634 (2009) ...ecoeeeeeeie eee eee eee e estes este sata e etree era e saree erae ae etae ae saae ee eabe ee sareeearaeearaes 3 Miller v. Elite Insurance Co., TOO CalLAPP.3A 739 ee eee eee eter eet sate eae e test ee este sateen se eases este enbe anne eases esee anne 5 People v. Castillo, BD CALA TAS CTL) sms. msn sss vss ois 55s 55 450535585 2555555 7 50 AS AS 5 FASTA EF. 5 Richtek USA, Inc. v. uPI Semiconductor Corp., 242 Cal APP-Ath 651 (2015) wooo eters eee be sees t ee sb be esbe estes tee sbae sabe aneesnaens 5 Rubin v. Toberman, 226 Cal.APP.2A 319 (19604) eee eee eee t ee sate sabe e eee b ee ebbe sete a sees tee saae sane 4 Santa Monica Rent Control Board v. Bluvshtein, 230 Cal. APP-3d 308 (1991) eee eee ete eee estes sabe sebe estes bee ebae sabe enneeensee ese eene 5 Scott v. JPMorgan Chase Bank, N.A., 214. Cal APDAth. TAZ CLOT): sosns smu ossws msn esos sass sss 05555558 545555555 5455555 345555045 SH55780555 55.30 SHHH58 555 3,4,5 SJJC Aviation Services, LLC v. San Jose, 12 CalLAPP-Sth 1043 (2017) weenie eects eee teste sees este sabes abe e see estes sabe enbe ante e see ssae anne 2 Southern Pacific Land Co. v. Westlake Farms, Inc., 188 Cal. APP.3d BOT (1987) neice eters eters b ee eae eae e eee bee sabe enbe ante esas saae eens 6 Stonehouse Homes v. City of Sierra Madre, 167 Cal. APP.4th 531 (2008) ...eeeiiiieeiie eters tte steers st testes ebe estes sbeesbaessbe ene e esas ssae eens 3,8 StorMedia Inc. v. Superior Court, 20 CALA AAD LT DDDY 555500550050 055555 5505557550255 5055558 55 HH 7 0 AS AS 5 FASS E55 5.55 5 Total Call International, Inc. v. Peerless Insurance Co., 181 Cal. APP.4th 161 (2010) .eueeiiieiie c tera estes sabes abe estes sbeesabe este ene e esas seae anne 9 Westamerica Bank v. Berkeley, 201 Cal. APP.Ath 598 (2011) ceeeiiiiieiieeiie ceases sees t teste ste e teeta esbbe sete aneeenseessae sane 9 STATUTES Cal. Civ. COE §1442.....o eee eee eee eee eee ete eset e estas estas eb ae ess ae essa ae esas ae esss ae ssse ae ssseeesssesessseeesssesenses 8 Venn senna 5 A RA SSS BA 4 4 4 REPLY ISO DEFENDANT’S DEMURRER TO PLAINTIFF’S VERIFIED FAC FOR DECLARATORY RELIEF Lo 0 9 S N nt l A W N NN N N N N N D N D N e m p m em em pm p m em em R N RAR W N S N N N T R W DN = O PRELIMINARY STATEMENT In its FAC, Plaintiff under oath specified two bases why declaratory relief supposedly “is necessary and appropriate at this time”: (i) “[b]ecause the parties are in a dispute over whether [Jazz] committed a material, non-curable breach of the Lease”; and (ii) Jazz’s “violation of the noise standard specified in the Lease impairs [Plaintiff’s] ability to develop and market portions of adjacent property (Phase 1...).” FAC q{45-46. In its Demurrer, Jazz showed both contentions are false as a matter of law. Plaintiff’s Opposition (“Opp.”) concedes both points. First, despite its argument heading “Jazz’s Breach of the Noise Standards is Incurable,” Plaintiff offers no argument to support that bare conclusion, other than speciously asserting the Court may not interpret unambiguous terms of the Lease (a contract) on demurrer without considering extrinsic evidence. Instead, Plaintiff abandons its FAC, asserting the absence of an incurable breach “does not undercut [its] action for declaratory relief.” Opp. 17. Nonsense. Plaintiff pled precisely the opposite and conceded it must establish an incurable breach. Having conceded it cannot establish the central tenet of its case, there is no justiciable controversy upon which this Court can (or should) grant declaratory relief. Second, despite swearing in the FAC that declaratory relief is required because Plaintiff’s “ability to develop and market” Phase 1 is “impair[ed],” as it must show Jazz completed the Sound Mitigation Work (the “Work™) as “a condition to the City’s issuance of building permits required to commence construction,” FAC {{l, 19, 24, 46; Opp. 19, in the face of Jazz’s judicially noticeable facts refuting that assertion, Shopoff now concedes and confirms (i) two Phase 1 buildings are already “permitted and under construction,” (ii) Plaintiff has not even completed architectural plans for the remaining development, and (iii) Plaintiff does not intend to seek permits for at least six to ten months. Shopoff Decl. q18, 26." Thus, there is no actual controversy requiring declaratory relief as to Jazz’s performance since, regardless of Jazz’s conduct, Shopoff indisputably has obtained or has yet to even apply for Phase 1 permits, and the “architectural plans” required by MM 10-3 to initiate noise ! “(In ruling on a demurrer, a court may look at declarations filed on behalf of a plaintiff to the extent they are inconsistent with the allegations of the pleading before the court.” Bridgeman v. Allen, 219 Cal. App.4th 288, 293 n.1 (2013). Here, Shopoff verified the FAC’s allegation that Plaintiff’s ability to develop Phase 1 was “impaired” and scant weeks later swore under penalty of perjury the opposite. Thus, the Court may consider the inconsistent Shopoff Declaration. This reply uses the same abbreviations and definitions as Jazz’s Demurrer (“Dem.”). “Shopoff Decl.” and “O’Hare Decl.” refer to April 27, 2018 Declarations of William Shopoff and William O’Hare, respectively. All emphasis in quotations is added, and internal citations and punctuation are omitted, unless otherwise noted. 1 5 REPLY ISO DEFENDANT’S DEMURRER TO PLAINTIFF’S VERIFIED FAC FOR DECLARATORY RELIEF Lo 0 9 S N nt l A W N NN N N N N N D N D N e m p m em em pm p m em em R N RAR W N S N N N T R W DN = O measurements are not even completed, and will not be for at least six to ten months. Plaintiff’s Opposition to Jazz’s Demurrer also confirms, either through outright concessions or non-opposition to Jazz’s arguments, that this action can be resolved on demurrer, infra §§I-II, and there is no controversy that (i) Jazz complies with the NBMC, id. §1Il, (ii) Jazz is not subject to 65 dBA CNEL in MM 10-3 as a matter of law and even if it were, any purported dispute is not ripe, id. §1V, (iii) Jazz met 65 dBA Leq by June 30, 2016, id. §VI, (iv) Jazz completed the required Work by the applicable deadlines of the 7th and 8th Amendments to the Lease, id. §V.A., (v) Plaintiff is not entitled to declaration of incurable breach, id. §V, (vi) even if the 7th Amendment’s plain language allowed Plaintiff’s interpretation, it must be rejected as a matter of law, id. §V.B., and (vii) Plaintiff is not entitled to a declaration that Jazz’s purported “chronic material defaults” terminate Jazz’s option to extend the Lease to 2027, id. §VL ARGUMENT LL Plaintiff’s Filing Of A Complaint Against Jazz Does Not Show An “Actual Controversy” In ginning up ostensible procedural deficiencies, Opp. 7-9, Plaintiff ignores, and thus concedes, Jazz’s authority showing there is “no requirement for the trial court to enter any form of declaratory judgment where the controversy can be determined as a matter of law,” and “[a] complaint for declaratory relief is subject to demurrer without leave to amend under such circumstances.” Dem. §I (collecting cases). Plaintiff also does not dispute that declaratory relief requires “evaluating the nature of the rights and duties that plaintiff is asserting, which must follow some recognized or cognizable legal theories.” D. Cummins Corp. v. U.S. Fid. & Guar. Co., 246 Cal.App.4th 1484, 1489 (2016). Plaintiff wrongly claims its allegations are unchallengeable on demurrer, Opp. §11,° ignoring Jazz’s authority holding “courts will not close their eyes... where a complaint contains allegations of fact inconsistent with attached documents, or... contrary to facts that are judicially noticed,” and “[flalse allegations of fact, inconsistent with annexed documentary exhibits or contrary to facts * Plaintiff argues that unlike Linda Vista Vill. San Diego Homeowners Ass'n v. Tecolote Inv’rs, LLC, 234 Cal.App.4th 166, 184-86, 190 (2015), and SJJC Aviation Servs., LLC v. San Jose, 12 Cal.App.5th 1043, 1062 (2017), which affirmed demurrers to declaratory actions based on judicially noticeable city documents, Jazz’s Lease obligations “cannot be invalidated by any City document or code that may be judicially noticed.” Opp. 10-11. Plaintiff ignores that the 7th Amendment expressly refers to noise levels governed by City ordinances and regulations, the NBMC and MM 10-3. FAC Ex. 8 Rec. C. As Jazz showed, Plaintiff’s allegations purporting to impose noise limits different from what is required by NBMC or MM 10-3, and thus, in turn, the 7th Amendment, must be disregarded. Dem. §§II-111. 2 6 REPLY ISO DEFENDANT’S DEMURRER TO PLAINTIFF’S VERIFIED FAC FOR DECLARATORY RELIEF oe 0 NN A N U n A W N = NN N N N N N D N D N e m p m em em pm p m em em R N RAR W N S N N N T R W DN = O judicially noticed, may be disregarded.” Dem. §1I; see also Scott v. JPMorgan Chase Bank, N.A., 214 Cal.App.4th 743, 751 (2013) (demurrer “may be sustained where judicially noticeable facts render the pleading defective, and allegations... may be disregarded if... contrary to facts judicially noticed”). Although Plaintiff cites several inapposite cases for the unremarkable principle that contracts can be subject to declaratory actions, Opp. 8, it does not mention CCP §1061, which “must be read together” with §1060, D. Cummins, 246 Cal. App.4th at 1490, and allows the Court to “refuse to make a declaration of rights and duties including a determination of any question of construction... arising under a... contract, where its declaration or determination is not necessary or proper at the time under all the circumstances.” Dem. §1; Meyer v. Sprint Spectrum L.P., 45 Cal.4th 634, 648 (2009) (affirming demurrer to declaratory claim where “controversy is primarily over the enforceability of certain remedies should a future dispute about substantive rights arise”) (cited by Plaintiff). Plaintiff’s central argument is its ipse dixit assertion that simply because it filed this action, which Jazz opposes, there must be a legally cognizable controversy between the parties. Opp. SILA.2. As Jazz showed, this backwards analysis is insufficient to allow this suit to proceed, as “the court will evaluate whether the factual allegations of the complaint for declaratory relief reveal that an actual controversy exists,” D. Cummins, 246 Cal.App.4th at 1489, and will not accept as true “deductions, contentions, or conclusions of law or fact.” Stonehouse Homes v. Sierra Madre, 167 Cal. App.4th 531, 538, 542 (2008) (affirming demurrer to declaratory action where dispute over “resolution’s meaning and application does not create a justiciable controversy”); Dem. §I.° Plaintiff cannot create a controversy by alleging Jazz is not in compliance with facially inapplicable City regulations. Id. §II-II1. Plaintiff asserts there is a “probable future controversy” here that is “ripe,” citing inapposite case law. Opp. 8.* Plaintiff does not discuss how this “future dispute” meets the two-prong ripeness test articulated in Stonehouse, or Jazz’s demonstration that it plainly does not. Dem. §1I1.B; infra §IV. ? Plaintiff's authority agrees. See, e.g., Ellis v. Cty. of Calaveras, 245 Cal. App.4th 64, 70 (2016) (affirming demurrer to declaratory action, noting courts can look to “matters of which judicial notice has been taken” and “ignore deductions or conclusions of law”) (cited repeatedly by PlaintifY). * See Leonard Carder, LLP v. Patten, Faith & Sandford, 189 Cal.App.4th 92, 96, 98 (2010) (reversing order denying default judgment, finding a ripe dispute whether plaintiff was entitled to attorneys’ fees in light of letter granting plaintiff portion of the fees); California Water & Tel. Co. v. Cty of Los Angeles, 253 Cal. App.2d 16, 25-26 (1967) (affirming declaratory relief for party challenging constitutionality of penal ordinance “applicable to the existing conduct” as “‘threat’ to impending prosecution”). Here, there is no ripe dispute. FAC {{l, 19, 24, 46; Dem. §111.B; Shopoff Decl. 18, 26. 3 7 REPLY ISO DEFENDANT’S DEMURRER TO PLAINTIFF’S VERIFIED FAC FOR DECLARATORY RELIEF Lo 0 9 S N nt l A W N NN N N N N N D N D N e m p m em em pm p m em em R N RAR W N S N N N T R W DN = O Indeed, Plaintiff’s FAC challenges only Jazz’s past conduct, which Shopoff admits and judicially noticeable facts confirm has not prevented any Phase 1 development, contrary to the FAC, or speculative future issues regarding the hypothetical results of “a detailed acoustical study based on architectural plans” for future development, where no sound measurements have occurred because such plans are not completed, and will not be for at least six months. RIN Ex. 3; Shopoff Decl. 26. Those results are purely conjectural now. Plaintiff is asking the Court for an “advisory opinion upon a particular or hypothetical state of facts,” ignoring its own concessions showing there is no controversy here. See In re Claudia E., 163 Cal.App.4th 627, 638 (2008) (finding no “actual controversy” where defendant agreed with plaintiff that supplemental petitions were untimely filed) (cited by Plaintiff.’ Plaintiff also tries to discount its FAC, which seeks “a binding declaration” that Jazz “committed material and non-curable breaches of the Lease” entitling Plaintiff to “terminate the Lease.” FAC 45. Plaintiff contends it “has not sued for breach of contract,” but “alleged an actual controversy under the Lease.” Opp. 9. Plaintiff cannot now contradict its allegations seeking to terminate Jazz’s Lease, which are “based upon a hypothetical situation which in turn would be conjectural and speculative.” Rubin v. Toberman, 226 Cal. App.2d 319, 328 (1964) (cited by Plaintiff). II. Jazz’s Judicially Noticeable Material Can Be Considered On Demurrer Plaintiff’s claim that “a demurrer cannot be sustained based on conflicting evidence, introduced by judicial notice or otherwise” intentionally sidesteps the issue. Opp. §II.A.3. The Demurrer does not refer to “conflicting evidence,” but rather, judicially noticeable facts, which Plaintiff specifically does not dispute, contradicting Plaintiff’s allegations. As Jazz showed, it is entirely proper to consider such material here. Dem. 6 (collecting cases, citing CCP §430.30(a)); see also Scott, 214 Cal.App.4th at 751. As explained in Jazz’s Opposition, Plaintiff’s objections to Jazz’s judicially noticeable material are baseless. Jazz Opp. §I; see, e.g., Evans v. City of Berkeley, 38 Cal.4th 1, 9 n.5 (2006) (rejecting hearsay objection to request for judicial notice where “objection does not reach the facts for which notice is sought™).® Plaintiff concedes the Court “may take judicial notice of a document’s existence” > Plaintiffs citation to Fox v. JAMDAT Mobile, Inc., 185 Cal.App.4th 1068, 1070 (2010) (affirming JAMDAT demurrer), and misleading assertion Jazz is “quibbl[ing] with cherry-picked paragraphs” falls flat, Opp. 9, as Jazz systematically shows none of the allegations support any declaratory relief. % Plaintiff’s citation to Childs v. State, 144 Cal.App.3d 155, 162-63 (1983), Opp. 15, to support its hearsay argument is inapposite, as there the defendant attempted to notice “an individual’s description of the general mailing practice of a government agency” to establish an actual date a notice was mailed. 4 8 REPLY ISO DEFENDANT’S DEMURRER TO PLAINTIFF’S VERIFIED FAC FOR DECLARATORY RELIEF Lo 0 9 S N nt l A W N NN N N N N N D N D N e m p m em em pm p m em em R N RAR W N S N N N T R W DN = O and “the City took a particular action” and “made [certain] findings.” Opp. 10. While Plaintiff pays lip service to the generic proposition “[t]hese documents cannot establish any disputed fact,” id.,” Plaintiff largely does not actually dispute the factual contents of Jazz's exhibits. “[W]hether the fact to be judicially noticed is the document or record itself..., the legal effect of the document..., a fact asserted within the document..., or an act by a government agency..., the essential question is whether the fact to be judicially noticed is not reasonably subject to dispute.” Scott, 214 Cal.App.4th at 759 (taking judicial notice of undisputed facts in exhibits, and distinguishing Fremont Indem. Co. v. Fremont Gen. Corp., 148 Cal. App.4th 97 (2007), id. at 757). Thus, the Court may take judicial notice of these exhibits in ruling on the Demurrer, “even when the pleading contains an express allegation to the contrary.” Cantu v. Resolution Tr. Corp., 4 Cal.App.4th 857, 877 (1992); Evans, 38 Cal.4th at 6 (“[A] complaint otherwise good on its face is subject to demurrer when facts judicially noticed render it defective.”).® III. There Is No Controversy As To Jazz’s Alleged Noncompliance With The NBMC Jazz showed there is no controversy regarding Plaintiff’s frivolous contention that Jazz must comply with NBMC Noise Zone III, FAC {{23, 32(a)-(b), as the City has resolved what NBMC limits apply to Jazz. Dem. §II. Plaintiff’s suggestion the 7th Amendment’s purported noise limitations are somehow separate from what the City requires can be quickly dismissed, as the 7th Amendment clearly refers to the NBMC, and does not set independent noise limits under the NBMC. Opp. 11-12. Plaintiff challenges Jazz’s reliance on the Plan’s language regarding Jazz’s non-conforming use 7 Plaintiff cites several inapposite cases to support this unremarkable proposition, where facts judicially noticed were actually disputed. Richtek USA, Inc. v. uPI Semiconductor Corp., 242 Cal.App.4th 651, 660 (2015) (no judicial notice of disputed allegations from Taiwanese complaints); Fremont, 148 Cal.App.4th at 113 (no judicial notice of meaning or enforceability of letter, where parties disputed whether it constituted a contract); People v. Castillo, 49 Cal.4th 145, 157 (2010) (court could “take judicial notice of the existence, content, and authenticity” of letters, but refusing to notice facts in letters that postdated trial, due to “general rule that an appellate court generally is not the forum in which to develop an additional factual record”); Beckley v. Reclamation Bd. of State, 205 Cal.App.2d 734, 741-42 (1962) (judicial notice of existence and contents of engineering reports, but not ultimate conclusions disputed by plaintiff). These cases are beside the point, as Plaintiff did not actually dispute the factual contents of Jazz’s exhibits. Indeed, StorMedia Inc. v. Superior Court, 20 Cal.4th 449 (1999), cited by Plaintiff, supports Jazz’s position because that court took judicial notice of an employee stock purchase plan to confirm “an ‘exercise date’... f[e]ll within the class period.” Id. at 457 n.10. ® Since the Court may take judicial notice of facts that contradict Plaintiff’s FAC, Plaintiff’s deflection of a collateral estoppel argument that Jazz is not making is meritless. Opp. 10. ? Plaintiff inexplicably cites Santa Monica Rent Control Bd. v. Bluvshtein, 230 Cal.App.3d 308, 316 (1991), which affirmed a demurrer and found an oral agreement did not constitute a lease, and Miller v. Elite Ins. Co., 100 Cal.App.3d 739, 450 [sic] (1980), a motorcycle liability insurance coverage dispute case after a directed jury verdict with a pincite that appears nowhere in the opinion. 5 9 REPLY ISO DEFENDANT’S DEMURRER TO PLAINTIFF’S VERIFIED FAC FOR DECLARATORY RELIEF Lo 0 9 S N nt l A W N NN N N N N N D N D N e m p m em em pm p m em em R N RAR W N S N N N T R W DN = O exemption, arguing the Plan “poses no conflict with the [NBMC] in regard to noise standards,” and in any event, because “Jazz is entitled to conduct light industrial operations,” Plaintiff does not challenge Jazz’s use, only Jazz’s “noise.” Opp. 12-13. This misses the point; the use of Jazz’s property determines the applicable noise levels under the NBMC. The 7th Amendment requires Jazz comply with “applicable” NBMC noise levels. FAC Ex. 8 Rec. C; id. {3(a) (same). Reviewing the NBMC does not constitute “interpretation of the Lease” or “parol evidence.” Opp. 12. Even if it did, it would not bar the Court from sustaining the Demurrer, contrary to Plaintiff’s claim. Id.; see George v. Auto. Club of S. Cal., 201 Cal.App.4th 1112, 1129-30 (2011) (sustaining demurrer in contract interpretation case, distinguishing Southern Pac. Land Co. v. Westlake Farms, Inc., 188 Cal.App.3d 807 (1987)). The City has resolved this issue. The NBMC provides “[t]he actual use of the property shall be the determining factor in establishing whether a property is in Noise Zone I, II, III or IV.” RIN Ex. 1 §10.26.020. The Plan, which “serve[s] as the zoning document” for Uptown Newport, RIN Ex. 5 at 3, expressly states Jazz is allowed to continue its operations “as [a] nonconforming use[] in compliance with” the NBMC. Id. at Ex. C §1.1; id. §1.2; see also id. Ex. B §1.4 (the “existing industrial development” is “an allowed interim use until the existing TowerJazz lease expires”). As Jazz is expressly allowed to continue as an industrial use pursuant to the NBMC, it necessarily follows under the NBMC that Jazz must comply with Zone IV, as an “industrial propert[y].” Id. Ex. 1 §10.26.020." Plaintiff cites the LUDSP to state that Uptown Newport “is a mixed-use development,” Opp. 14, but the LUDSP does not say that. Instead, it “provides the regulatory framework for redevelopment of the Subject Property into a high-density mixed use residential project”-eventually. RIN Ex. 5 at 60. Plaintiff’s fallback position-*“if Jazz is only required to comply with [Zone III] after residents are in place, Uptown is entitled to a declaration of that,” Opp. 14-is contrary to the FAC, which alleges Jazz was required to meet Zone III by June 30, 2016, FAC {32(a)-(b), 43, and is wrong in any case, as CCP §1060 “does not embrace controversies that are conjectural, anticipated to occur in the future, or an attempt to obtain an advisory opinion from the court.” Lee v. Silveira, 6 Cal. App.5th 527, 546 (2016). 10° Of course, Plaintiff knows full well that the City has already determined Jazz is subject to Zone IV as Plaintiff’s original complaint specifically referenced the City’s written confirmation to Jazz of that very fact. Compl. 35, referring to RIN Ex. 17. In a transparent attempt to evade that pleading blunder, Plaintiff deleted it from the FAC. O'Hare Decl. 43. As it was referenced in the Complaint, the Court may consider it under the incorporation by reference doctrine and the subsequent deletion matters not. 6 10 REPLY ISO DEFENDANT’S DEMURRER TO PLAINTIFF’S VERIFIED FAC FOR DECLARATORY RELIEF Lo 0 9 S N nt l A W N NN N N N N N D N D N e m p m em em pm p m em em R N RAR W N S N N N T R W DN = O As Plaintiff agrees Jazz is not in violation of Zone IV, there is no controversy whether Jazz is violating the applicable NBMC provisions. Plaintiff’s allegations contrary to these judicially noticeable facts can be disregarded. Hoffman v. Smithwoods RV Park, LLC, 179 Cal. App.4th 390, 400 (2009). IV. Plaintiff Concedes Jazz’s MM 10-3 Arguments And Admits Any Dispute Is Not Ripe In its Opposition, Plaintiff ignores, and thus concedes, Jazz’s arguments establishing (1) the 7th Amendment does not even mention CNEL, but rather applies a 65 dBA Leq standard “at the common boundaries,” so Plaintiff is impermissibly seeking to re-write the plain meaning of the Lease; (2) MM 10-3’s 65 dBA CNEL standard is imposed on Plaintiff and could not apply to Jazz or constitute the applicable outer limit of the “Maximum Permitted Noise Levels” at the boundaries, because MM 10-3 and its Exhibit J (not to mention the City and Plaintiff’s expert) all confirm the standard must be met at the future receiver locations; (3) MM 10-3 addresses sound remediation measures to be undertaken by Plaintiff at the receiver locations that, in conjunction with the Work at the Jazz facility, would in the future comply with a 65 dBA CNEL standard at currently non-existent receiver locations; (4) MM 10-3 and the 7th Amendment do not support Plaintiff’s contention that Jazz is solely responsible for meeting a 65 dBA CNEL standard at the receiver locations, as both contemplate work by Jazz only at the facility (which Plaintiff expressly concedes, Opp. 16), and “sound-mitigating barriers and enclosures” to be installed by Plaintiff once Phase 1 is complete (which Plaintiff ignores); (5) MM 10-3 is referenced in the Maximum Permitted Noise Levels to make clear Jazz would be responsible for implementing MM 10-3’s suggested sound mitigation measures at its facility; and (6) as MM 10-3’s 65 CNEL standard is prospective and must be measured in areas not yet built, there are no outside locations where receptors might be located to measure compliance. Dem. §1II; Opp. 15-16. In view of these unchallenged arguments, Plaintiff’s attempt to impose a 65 dBA CNEL standard on Jazz fails. Plaintiff insists MM 10-3’s 65 dBA CNEL requirement “at the property boundary or at the nearest receptors” means it must be met at both, but does not explain how its interpretation that 65 dBA CNEL be met at the boundaries does not render both MM 10-3’s “or at the nearest receptors” clause and the 7th Amendment’s clause requiring “65 [dBA] measured at the common boundaries” impermissible surplusage. Hot Rods, LLC v. Northrop Grumman Sys. Corp., 242 Cal.App.4th 1166, 1181 (2015); George, 201 Cal. App.4th at 1129 (affirming demurrer where “Plaintiff’s allegations g 11 REPLY ISO DEFENDANT’S DEMURRER TO PLAINTIFF’S VERIFIED FAC FOR DECLARATORY RELIEF Lo 0 9 S N nt l A W N NN N N N N N D N D N e m p m em em pm p m em em R N RAR W N S N N N T R W DN = O would render the operative provisions of the policy nonsensical”). Further, as Jazz showed by judicially noticeable facts and Shopoff has since confirmed, even assuming MM 10-3’s 65 dBA CNEL applies, Jazz’s compliance with MM 10-3 is not ripe and provides no grounds for declaratory relief. Dem. §IIL.B; supra §1I. Significantly, Plaintiff does not dispute that it has not yet taken measurements at the locations required by MM 10-3, id.; RIN Ex. 30, which is unsurprising given that Shopoff admits the “architectural plans” required by MM 10-3 to initiate noise measurements are not even completed, and will not be for at least six months. RIN Ex. 3 (MM 10-3); Shopoff Decl. 26. Plaintiff attempts to distinguish Stonehouse, but does not disagree with Stonehouse’s ripeness test or dispute its application to the FAC. Opp. 16; Dem. §III.B. Plaintiff also fails to recognize that since it admittedly has not even completed architectural plans as required for measurements pursuant to MM 10-3, RIN Ex. 3, asking the Court now to resolve whether 65 dBA CNEL will be met at hypothetical locations is pure speculation regarding how MM 10-3 “might be applied to [Plaintiff’s] property.” Stonehouse, 167 Cal. App.4th at 540-41; Lee, 6 Cal. App.5th at 546. V. Plaintiff Confirms There Is No “Non-Curable Breach” Of The Lease A. Plaintiff Abandons Its “Non-Curable” Breach Allegations Unable to counter Jazz’s showing there is no controversy regarding its completion of the Work by the dates required in the 7th Amendment, and thus no occasion for Plaintiff to declare an incurable breach, Dem. §IV.A., Plaintiff simply concedes the central tenet of its FAC, and the purported entire point of its action-that Jazz “committed a material, non-curable breach of the Lease, entitling Plaintiff to declare a termination of the Lease.” FAC {l. In stark contrast to its allegations seeking “a binding declaration” Jazz “has committed material and non-curable breaches of the Lease” entitling Plaintiff to “terminate the Lease,” id. J45, Plaintiff now claims it does not matter whether Jazz’s alleged breaches were incurable, Opp. 17, calling into question what purpose this action is supposed to serve. Trying to salvage its case, Plaintiff claims without explanation there is a controversy because the Court “cannot possibly” resolve contractual interpretation issues on demurrer. Opp. 17. Plaintiff is wrong, as shown by its own cases. Aragon-Haas v. Family Sec. Ins. Servs., Inc., 231 Cal. App.3d 232, 239 (1991), recognized that a plaintiff’s interpretation can be credited only “[s]o long as the pleading "See Auberry Union Sch. Dist. v. Rafferty, 226 Cal. App.2d 599, 603 (1964) (noting that where parties agree, “there obviously can be no controversy and there is nothing to be determined by the court”). 8 12 REPLY ISO DEFENDANT’S DEMURRER TO PLAINTIFF’S VERIFIED FAC FOR DECLARATORY RELIEF Lo 0 9 S N nt l A W N NN N N N N N D N D N e m p m em em pm p m em em R N RAR W N S N N N T R W DN = O does not place a clearly erroneous construction upon the provisions of the contract.” In Fremont, 148 Cal.App.4th at 113-15, the entire dispute was whether a letter between the parties constituted a valid and enforceable contract, which could not be decided without extrinsic evidence. Where, like here, Plaintiff did not allege the 7th Amendment was ambiguous, and the contract can be interpreted as a matter of law, courts do not hesitate to sustain demurrers. E.g., Westamerica Bank v. Berkeley, 201 Cal.App.4th 598, 613 (2011) (“[Interpretation of the agreement at the demurrer stage is appropriate” where “Bank nowhere alleges that the escrow agreement itself... is unclear or ambiguous.”); Total Call Int'l, Inc. v. Peerless Ins. Co., 181 Cal.App.4th 161, 173 (2010) (contract “attacked as ambiguous solely on the basis of the policy’s language” is “a question of law properly resolved on demurrer”); George, 201 Cal.App.4th at 1130 (court “not required to credit plaintiff’s allegations that extrinsic evidence renders the insurance contract... ambiguous, because the language of the policy unambiguously negates beyond reasonable controversy the construction alleged in the... complaint”). B. Plaintiff Concedes Its Interpretation Of The 7th Amendment Effects A Forfeiture Although the 7th Amendment’s plain language provides for a non-curable breach only if Jazz failed to complete the Sound Mitigation Work by June 30, 2016, FAC Ex. 8 §§3(a), (¢); id. Ex. 9 §2, Plaintiff claims for the first time in its Opposition (and never alleges in the FAC) that it now needs extrinsic evidence to show the incurable breach provision is ambiguous. Opp. 17. This argument fails for the reasons stated above. Supra §V.A. However, as Jazz demonstrated, Plaintiff’s new ambiguity argument confirms Plaintiff’s interpretation effects a forfeiture, and Jazz’s does not, and therefore Plaintiff’s interpretation fails as a matter of law. Dem. §IV.B."? Plaintiff quibbles with the facts of Brant v. Bigler, 92 Cal.App.2d 730, 734 (1949), but agrees it “speaks generally to rules of contract interpretation regarding forfeiture” Opp. 18, and where there are “two possible constructions, one of which leads to a forfeiture and the other avoids it... the construction which avoids forfeiture must be made if it is at all possible.” Plaintiff also does not dispute Cal. Civ. Code §1442 requires the 7th Amendment’s incurable breach provision “be strictly interpreted against” Plaintiff. Thus, even if Plaintiff’s wrong new ambiguity argument was right, it still fails. 2 Contrary to Plaintiff's claim, Jazz is not arguing landlords cannot evict tenants. Opp. 18. Jazz contends Plaintiff’s interpretation, as alleged in the FAC, that Jazz committed an incurable breach by not meeting NBMC Zone III standards or MM 10-3’s 65 dBA CNEL effects a forfeiture that can be avoided simply by interpreting the 7th Amendment as Jazz does. Dem. §IV.B. 9 13 REPLY ISO DEFENDANT’S DEMURRER TO PLAINTIFF’S VERIFIED FAC FOR DECLARATORY RELIEF Lo 0 9 S N nt l A W N NN N N N N N D N D N e m p m em em pm p m em em R N RAR W N S N N N T R W DN = O C. Plaintiff’s Attempt To Read The SMA Testing Into The 7th Amendment Fails Plaintiff alleged Jazz’s failure to “[c]Jonduct annual noise measurements as required under the” SMA is a non-curable breach of the Lease. FAC {{32(e), 45. As Jazz showed, the terms of the 7th Amendment and the SMA bar this argument. Dem. §IV.C. Plaintiff’s claim the SMA’s annual noise measurement requirement is incorporated into the Lease, Opp. 19, does not establish that it is a ground for Plaintiff to declare an incurable breach under the 7th Amendment, which applies only if the agreed- upon Work was not completed by the agreed-upon deadline. FAC Ex. 8 Rec. C. The SMA is relevant to the Work only in regard to the SMA’s noise levels, which Plaintiff does not challenge. Id. If Plaintiff is now arguing the 7th Amendment is ambiguous, this fails for the reasons set forth above. Supra §V.A-B. VI. Plaintiff Admitted There Is No Controversy That Jazz Met 65 dBA Leq By June 30, 2016 Jazz established Plaintiff’s allegations and judicially noticeable documents show there is no controversy whether Jazz met the 65 dBA Leq requirement under the 7th Amendment. Dem. §V. Plaintiff does not, because it cannot, dispute the existence and factual contents of its own acoustical study completed in November 2016 confirming Jazz met the 65 dBA Leq requirement. Supra §11; Jazz Opp.23; RIN Ex. 29. Indeed, Plaintiff specifically refers to those results in its (unchallenged) December 2016 letter to Jazz, referenced and thus incorporated at FAC 34, where Plaintiff alleged, based on its own recent noise measurements, that Jazz exceeded the purported noise requirements of the NBMC and 65 dBA CNEL, but not 65 dBA Leq. RIN Ex. 30. Additionally, Plaintiff does not, because it cannot, dispute it received Jazz’s results establishing 65 dBA Leq in February 2016, as well as the fact the City signed off on Jazz’s Work, finding such standard was met. RIN Exs. 22-23, 27-28. Plaintiff’s own FAC alleges “measurements taken by Defendant’s consultant at 65 dBA Leq.” FAC (35. Because Plaintiff cannot dispute these facts, its contrary allegation, FAC {32(f), must be disregarded. Supra SIL CONCLUSION For the reasons above, Jazz respectfully requests its Demurrer be sustained without leave. DATED: May 3, 2018 SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP By: /s/ Jason D. Russell JASON D. RUSSELL Attorneys for Defendant " Due to Plaintiff's self-defeating allegations that “Plaintiff has not declared a default under the Lease,” FAC 939, Plaintiff wisely abandons its claim that Jazz’s “chronic material defaults... entitle Plaintiff to send notice of such and to terminate Defendants’ [sic] option to extend the Lease.” Id. {45. 10 14 REPLY ISO DEFENDANT’S DEMURRER TO PLAINTIFF’S VERIFIED FAC FOR DECLARATORY RELIEF