Declaration_of_yihsuan_rachel_lin_iso_plaintiffs_opposition_to_defendants_motion_to_stayMotionCal. Super. - 2nd Dist.December 31, 2015Electronically FILED by § AN nn Bx W N 10 11 12 13 14 13 16 17 18 19 20 21 22 23 24 23 26 27 28 Tyler F. Clark (SBN 258309) Yi-Hsuan Rachel Lin (SBN 283632) CLARK EMPLOYMENT LAW, APC 16000 Ventura Boulevard, Suite 850 Encino, California 91436 Telephone: (818) 741-2101 Facsimile: (818) 561-3701 Email: tyler@clarkemploymentlaw.com Email: rachel @clarkemploymentlaw.com Attorneys for Plaintiff Annette Martinez uperior Court of California, County of Los Angeles on 02/14/2019 05:31 PM Sherri R. Carter, Executive Officer/Clerk of Court, by R. Sanchez,Deputy Clerk SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF LOS ANGELES ANNETTE MARTINEZ, Plaintiff, Vv. HUXTABLE’S KITCHEN, INC., a Corporation; HMR FOODS HOLDING, LP, a Limited Partnership; and DOES 1- 10, inclusive, Defendants. Case No.: BC605517 [Assigned to the Hon. Stephanie M. Bowick, Dept. 19] DECLARATION OF YI-HSUAN RACHEL LIN ISO PLAINTIFF ANNETTE MARTINEZ’S OPPOSITION TO DEFENDANTS’ MOTION TO STAY THE CIVIL ACTION; EXHIBITS A-P Date: February 28, 2019 Time: 8:30 a.m. Dept.: 19 Reservation No.: 503487061887 December 31, 2015 July 23, 2019 Complaint Filed: Trial Date: (Filed concurrently with: Opposition to Motion to Stay the Civil Action; Declaration of Tyler Clark; Plaintiff’s Objections to Defendants’ Evidence ISO the Motion, [Proposed] Order on Plaintiff’s Evidentiary Objections; [Proposed] Order Denying Defendants’ Motion to Stay) DECL. OF YI-HSUAN LIN ISO PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION TO STAY AN nn Bx W N 10 11 12 13 14 13 16 17 18 19 20 21 22 23 24 23 26 27 28 I, Yi-Hsuan Rachel Lin, declare and state as follows: I. I am an attorney at law licensed to practice before all the courts of the State of California and am an associate attorney at Clark Employment Law, APC, counsel of record for Plaintiff Annette Martinez. I have personal knowledge of the facts set forth herein and if called upon to testify, I could and would competently testify thereto. This declaration is submitted in support of Plaintiff’s Opposition to Defendants” Motion to Stay this Civil Action. 2 Attached hereto as Exhibit A is a true and correct copy of the Declarations of the Directors, Officers and Organization Liability Insurance Policy issued by the insurance carrier U.S. Specialty Insurance Company (“USSIC Policy”), for the original policy period from June 4, 2015 to June 4, 2016, which was received by Plaintiff as part of Defendants’ document production in this case. According to the Declarations, the Policy limit is three million dollars ($3,000,000). 3. On December 31, 2015, Plaintiff’s Complaint was filed with the Court. 4. Attached hereto as Exhibit B is a true and correct copy of the Endorsement Number 15 to the USSIC Policy, which was received by Plaintiff as part of Defendants’ document production in this case. 5. On June 7, 2016, USSIC accepted Plaintiff’s claims as alleged in this case “for coverage subject to the Policy’s terms, conditions and limitations.” Attached hereto as Exhibit C is a true and correct copy of a letter from Lisa Evon of the Tokio Marine HHC D&O Group accepting Plaintiff’s claims under the USSIC Policy. The letter was received by Plaintiff as part of Defendants’ document production in this case. 6. Attached hereto as Exhibit D is a true and correct copy of the Notice of Ruling regarding Defendant’s bankruptcy and case management conference, dated July 5, 2016, which was received by Plaintiff in this case. 7. Attached hereto as Exhibit E is a true and correct copy of the Notice of Lifting Automatic Stay, along with a copy of the Delaware Bankruptcy Court’s Order Granting Stipulation regarding Limited Modification of the Automatic Stay, dated August 8, 2016. -1- DECL. OF YI-HSUAN LIN ISO PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION TO STAY AN nn Bx W N 10 11 12 13 14 13 16 17 18 19 20 21 22 23 24 23 26 27 28 8. Attached hereto as Exhibit F is a true and correct copy of the Notice of Ruling regarding the lifting of the automatic stay of this instant case by the bankruptcy court, dated September 23, 2016, which was received by Plaintiff in this case. a, On September 28, 2016, USSIC supplemented its prior coverage correspondence of June 7, 2016, with regard to Plaintiff’s claims as alleged in this case. Attached hereto as Exhibit G is a true and correct copy of a letter from Janet McFadden of Shipment & Goodwin, LLP, acknowledging that Defendants are “both Insured Organizations under the [USSIC] Policy. Accordingly, the Lawsuit implicates Insuring Agreement (C) — Organization Liability.” Under the USSIC Policy, Employment Practice Wrongful Acts included “any actual or alleged Discrimination on the basis of a mental disability, Retaliation for attempting to exercise rights under the law, and Wrongful Termination, all of which are alleged in the Lawsuit.” The letter was received by Plaintiff as part of Defendants’ document production in this case. 10. Attached hereto as Exhibit H is a true and correct copy of the Endorsement Number 17 to the USSIC Policy, dated December 4, 2016, which was received by Plaintiff as part of Defendants” document production in this case. 11. Attached hereto as Exhibit I is a true and correct copy of the minutes order of this Court made on August 18, 2017, granting Defendants’ motion to compel arbitration, and stayed this case pending the completion of the arbitration. 12. Attached hereto as Exhibit J is a true and correct copy of an email chain from July 5 to 24, 2018, between Defendants counsel Steven Haney and Adrian Zamora, Arbitrator Hon. Enrique Romero (Ret.), and Plaintiff’s counsel Tyler Clark, regarding Defendants’ failure to pay arbitration fees and subsequent waiving of arbitration. 13. On July 23, 2018, Defendants and USSIC through defense counsel Mr. Haney made an offer to Plaintiff to settle this case. 14. On August 1, 2018, after Defendants waived arbitration and agreed to transfer the case back to the Superior Court, this Court lifted the stay of this case. Plaintiff and Defendants agreed to attempt a settlement discussion at a Mandatory Settlement Conference to be conducted by a Los Angeles Superior Court judge. Based on both parties’ representation, this Court ordered the i: DECL. OF YI-HSUAN LIN ISO PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION TO STAY AN nn Bx W N 10 11 12 13 14 13 16 17 18 19 20 21 22 23 24 23 26 27 28 party to complete the MSC by February 4, 2019. Attached hereto as Exhibit K is a true and correct copy of the Court’s Order setting the jury trial of this matter, post MSC conference, etc., dated August 1, 2018, which was received by Plaintiff in this case. Further, at the hearing on August 1, 2018, the Court also ordered Defendants’ counsel, Mr. Adrian Zamora, to make arrangement with the MSC Program to schedule the settlement conference. The Court reminded Mr. Zamora to contact the MSC Program early to ensure the parties have an MSC date before the deadline, as the MSC schedule would get filled up quickly. 15. On August 2, 2018, Defendants and USSIC through defense counsel Mr. Haney made another offer to Plaintiff to settle this case. 16. Attached hereto as Exhibit L is a true and correct copy of an email chain on October 24, 2018, between Mr. Clark and Mr. Zamora, on which I was copied, regarding Defendants’ availability of a mandatory settlement conference. Mr. Zamora represented to Plaintiff that “[t]he carrier and corp. rep are available Dec. 11-12, 2018, or Jan. 15-18, 22-23, 2019. The carrier will be there personally.” 17; On November 14, 2018, I received an email from the Los Angeles Superior Court Courtroom Assistant to Judge Ferns and Judge Khan, notifying the parties that the Mandatory Settlement Conference of this case has been set for January 15, 2019, before Judge Abraham Khan. Attached hereto as Exhibit M is a true and correct copy of the Notice of Mandatory Settlement Conference that Plaintiff served and filed on November 15, 2018. 18. Attached hereto as Exhibit N is a true and correct copy of a relevant portion of the request filed and served by the Trustee with the Delaware bankruptcy court on or about November 29, 2018, requesting the bankruptcy court to modify its previous Order and reimpose the automatic stay as to Plaintiff’s instant action. 19. I attended the hearing the hearing before the bankruptcy court on December 18, 2018 via CourtCall. I also downloaded and listened to the audio recording of the December 18, 2018 hearing. The audio recording confirms that, during the December 18 hearing, the bankruptcy court was advised that there were about over $2.9 million remaining under the USSIC Policy. The Trustee again requested that the bankruptcy court re-imposed the stay on Plaintiff’s instant case _3- DECL. OF YI-HSUAN LIN ISO PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION TO STAY AN nn Bx W N 10 11 12 13 14 13 16 17 18 19 20 21 22 23 24 23 26 27 28 pending the outcome of the Trustee’s lawsuit. The bankruptcy court denied the Trustee’s request to reimpose a stay on Plaintiff’s action in Los Angeles Superior Court. In addition to it being procedurally improper, the Trustee’s request was specifically denied “given the balance remains at this point.” Further, the bankruptcy court did not impose a soft cap on USSIC’s paying of defense costs in the Trustee’s lawsuit at that point, “especially given the amount still remaining on the Policy.” However, the court clarified: “not that I wouldn’t be open to [imposing a cap] in the future as the circumstances develop.” In response to the argument that “the entire balance of the Policy [should be] available to the Side A claimants” only, the bankruptcy court emphasized that “I am not making that decision today.” The bankruptcy court stated: “Nobody’s given or agreed on a number of what’s yet to be paid but might be due under the Side A coverage as of today. But unless someone tells me it’s two million dollars, I don’t see the jeopardy to [Ms. Martinez] yet, and that’s why I would be reluctant to impose a cap today.” The bankruptcy court further emphasized that “whatever order I enter today is without prejudice to any of the parties here to come back and ask for some other type of further relief. I think we are just too early at the point in this proceeding to impose a cap. I do hope that Ms. Martinez is able to make a settlement at some point, and there is enough room in the Policy to address that.” Attached hereto as Exhibit O is a true and correct copy of the bankruptcy court’s docket entry reflecting the audio for the December 18, 2018 hearing is made publicly available. 20. Attached hereto as Exhibit P is a true and correct copy of the order by the bankruptcy court granted certain individual defendants’ request for relief from the automatic stay to allow USSIC to pay defense costs incurred by those individual defendants in the Trustee’s lawsuit that I received on December 18, 2018. 21. The defendants in the Trustee’s D&O Lawsuit have filed a motion to dismiss the Trustee’s complaint. As of the signing of this Declaration, the motion to dismiss is still pending a ruling from the bankruptcy court. 1" 1" 1" 4 - DECL. OF YI-HSUAN LIN ISO PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION TO STAY AN nn Bx W N 10 11 12 13 14 13 16 17 18 19 20 21 2) 23 24 23 26 27 28 I declare under penalty of perjury under the laws of the State of California, that the foregoing is true and correct and executed on February 14, 2019, at Encino, California. 6 Yi-Hsuan Rachel Lin -5- DECL. OF YI-HSUAN LIN ISO PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION TO STAY EXHIBIT A U.S. SPECIALTY INSURANCE COMPANY Houston, Texas NOTICE: THIS IS A CLAIMS MADE POLICY WHICH APPLIES ONLY TO CLAIMS FIRST MADE AGAINST THE INSUREDS DURING THE POLICY PERIOD OR, IF APPLICABLE, THE DISCOVERY PERIOD, THE LIMIT OF LIABILITY AVAILABLE TO PAY DAMAGES OR SETTLEMENTS WILL BE REDUCED, AND MAY BE EXHAUSTED, BY THE PAYMENT OF DEFENSE COSTS. DEFENSE COSTS WILL BE APPLIED AGAINST THE RETENTION. THE INSURER HAS NO DUTY UNDER THE POLICY TO DEFEND ANY INSURED. DECLARATIONS DIRECTORS, OFFICERS AND ORGANIZATION LIABILITY INSURANCE POLICY POLICY NUMBER: 14-MGU-15-A34946 RENEWAL OF: N/A ITEM 1. NAMED ORGANIZATION: HMR Foods Holding, LP 2080 East 49th Street Los Angeles, CA 90058 ITEM 2. POLICY PERIOD: (a) Inception Date: 6/4/2015 (b) Expiration Date: 6/4/2016 at 12:01 a.m. at the Principal Address stated in Item 1. ITEM 3. LIMIT OF LIABILITY (inclusive of Defense Costs): $3,000,000 maximum aggregate limit of liability for all Insuring Agreements combined. ITEM 4. RETENTION: $25,000 (Provided, the retention is $0, per Claim, for Loss under INSURING AGREEMENT A as to which indemnification by the Insured Organization is not legally permissible.) ITEM 5. PREMIUM: $20,126.00 ITEM 6. DISCOVERY PERIOD: One or two years after the end of the Policy Period, at the elcction of the Named Organization. ITEM 7. ADDITIONAL PREMIUM FOR DISCOVERY PERIOD: (a) one-year Discovery Period: 100% of the annual Premium. {b) two-year Discovery Period: 200% of the annual Premium. ITEM 8. NOTICES REQUIRED TO BE GIVEN TO THE INSURER MUST BE ADDRESSED TO: Street Address: Facsimile Number: E-mail Address: HCC Global Financial Products, LLC ~~ (860) 676-1737 usclaims@hccglobal.com 8 Forest Park Drive Farmington, CT 06032 Attn: Claims Manager ITEM 9. ENDORSEMENTS ATTACHED AT ISSUANCE: 1055-100 1055-104 1055-416 1055-431 1055-503 1055-725 1055-744 1055-824 1055-1160 1055-1233 1055-4070 1055-8024 1055-8048 80016 IN WITNESS WHEREOF, the Insurer has caused this Policy to be signed on the Declarations Page by its President, a Secretary and a duly authorized representative of the Insurer. SF heel bd I Secretary President Authorized Representative Date: June 10, 2015 USSIC 1056 (04/2002) HKIO00050 EXHIBIT B ENDORSEMENT NUMBER: 15 POLICY PERIOD EXTENSION ENDORSEMENT To be attached to and made a part of Policy No. 14-MGU-15-A34946, issued to HMR Foods Holding, LP by U.S. Specialty Insurance Company. In consideration of an additional premium of $10,083.00, it is agreed that subsection (b) of Item 2 Policy Period of the Declarations is amended to read in its entirety as follows: (b) Expiration Date: 12/4/2016 All other terms, conditions and limitations of this Policy will remain unchanged. Complete the following only when this endorsement is not prepared with the Policy or is not to be effective with the Policy. Effective date of this endorsement: 6/4/2016 wo AF Attorney-in-Fact 1055-108 Page 1 of 1 Ed. 08/07 - HKI000129 EXHIBIT C Wy TOKIO MARINE DBO Group H CC Ee 8 Forest Park Drive \ NO Farmington, CT 06032 USA Tel: B60-674-1900 Fax: 860-676-1737 June 7, 2016 Linda Campbell EPIC Brokers [linda.campbell@epicbrokers.com) Re: Insured: HMR Foods Holding, LP Insurer; U.S. Specialty Insurance Company (“USSIC") Policy No.: 14-MGU-15-A34946 (“the Policy”) Subject: Annette Martinez File No.: A-16-030770 Dear Ms. Campbell; We acknowledged receipt of the referenced matter by letter dated May 18, 2016. This letter provides you with our preliminary coverage analysis, on behalf of USSIC, under the Policy. Please note that a definitive coverage analysis may not be possible until all of the issues raised in this matter have been resolved. Our analysis is subject to modification if and when other coverage issues develop. Summary of the Coverage Please note that because many of the Policy provisions referred to herein are summarized, and other provisions not expressly referred to herein may be applicable, we recommend that you read the Policy in its entirety. Also, please note that the terms in this letter appearing in bold type are defined terms in the Policy. Please refer to the Policy for the specific meanings of those terms. USSIC issued Directors, Officers and Organization Liability Insurance Policy No. 14-MGU-15- A34946 (“the Policy”) to HMR Foods Holding, LP for the Policy Period from June 4, 2015 to June 4, 2016. The Policy provides coverage for Loss arising from Claims first made against Insureds during the Policy Period for Wrongful Acts. Pursuant to Endorsement No. 10(4), the Policy contains Insuring Agreements for Insured Person Liability, Organization Reimbursement, Organization Liability and Derivative Demand Investigation Costs. Pursuant to Endorsement No. 10(1), the Policy has a $3,000,000 Standard Limit of Liability, a $3,000,000 Additional Limit for Non-Indemnifiable Loss, a $250,000 Derivative Investigations Costs Sublimit, a $250,000 Asset Protection Costs Sublimit and a $500,000 Reputation Expenses Sublimit. Summary of this Matter The coverage analysis stated herein is based upon the unsubstantiated allegations of the claimant, and by referring to them USSIC does not suggest that they have merit. We are in receipt of a copy of an attorney letter dated November 24, 2015 that was sent to the California Labor & Workforce Development Agency's PAGA Administrator on behalf of Annette Martinez. Huxtable's Kitchen, Inc. and HMR Foods Holding, LP each received a copy of this etter. Ms. Martinez is alleging that she was wrongfully terminated from her position in A member of the Tokio Marine FICC group of companies HKI000133 Linda Campbell EPIC Brokers 6/7/2016 Page 2 of 4 retaliation for complaining about fraudulent labelling activities. She alleges violations of the California Labor Code and indicates her intention to file a lawsuit. Coverage Analysis As noted above, the following is our preliminary coverage analysis based on the information we have received to date. Please note that, because our investigation into this matter is ongoing, this analysis may be modifled or supplemented as additional information is developed. This matter concerns Insuring Agreement (C) — Organization Liability. The attorney letter constitutes a Claim and appears to have first been made during the Policy Period." Ms, Martinez's allegations of Retaliation and Wrongful Termination constitute Employment Practices Wrongful Acts, which are Wrongful Acts. The letter implicates Huxtable's Kitchen Inc. and HMR Foods Holding, LP. HMR Foods Holding, LP is an Insured Organization, Also, it appears that Huxtable's Kitchen Inc, is also an Insured Organization. Please confirm that this understanding is correct. Accordingly, USSIC accepts this matter for coverage subject to the Policy's terms, conditions and limitations, including those discussed herein. Pursuant to Exclusion (A), as amended by Endorsement No. 10(23), there is no coverage for any Claim arising out of, based upon or attributable to the gaining by any Insured of any profit or financial advantage to which such Insured was not legally entitled. This Exclusion (A) will apply only if there has been a final, hon-appealable adjudication of such Claim adverse to such Insured in the underlying proceeding establishing that the Insured gained such a profit or financial advantage. Pursuant to Exclusion (B), as amended by Endorsement No. 10(24), there is no coverage for any Claim arising out of, based upon or attributable to the commission by any Insured of any deliberately criminal or deliberately fraudulent act. Provided that (1) this Exclusion (B) will apply only if there has been a final, non-appealable adjudication of such Claim adverse to such Insured in the underlying proceeding establishing that the Insured so acted; and (2) the imposition of a criminal fine or sanction in a foreign jurisdiction as a result of a Wrongful Act which does not constitute a violation of criminal law in the United States will not, by itself, be conclusive proof that a deliberately criminal or deliberately fraudulent act has occurred for purposes of this Exclusion (B). Additionally, to the extent the Claim alleges intentional misconduct by the Insureds, such matters may be deemed uninsurable under the law pursuant to which the Policy is to be construed and may thus be excluded from coverage. Pursuant to Condition (D)(1), as amended by Endorsement No. 10(39), USSIC has no duty to defend any Insured. The Insureds must defend any Claim against them. While USSIC has the right to associate in the defense and the negotiation of any settlement of any Claim, it is the Insured’s responsibility to retain defense counsel, subject to USSIC’s right of approval. ' Please advise us as to whether the Jetier was preceded by any other written demands so that we may verify the date upon which this Claim was first made, HKI000134 Linda Campbell EPIC Brokers 6/7/2016 Page 3 of 4 We have been advised that J. Adrian Zamora of Haney & Young has been retained as defense counsel in this matter. Pursuant to our Defense Counsel Guidelines, please note that USSIC will not be in a position to approve this choice of defense counsel until we have received and reviewed the selected counsel's experience and hourly billing rate. Please forward that information at your earliest convenience. Condition (D)(1), as amended by Endorsement No. 10(39), also provides that the Insureds may not admit or assume any liability, enter into any settlement agreement, stipulate to any judgment, or incur any Defense Costs without USSIC's prior written consent. Only those settlements, stipulated judgments and Defense Costs to which USSIC has consented will be recoverable as Loss. In that regard, we would require the Insureds to obtain USSIC's consent before making or responding to any settlement proposal, and we would ask the Insured to inform us promptly if it receives any settlement-related communication from any other party. However, pursuant to Endorsement No. 10(39), if the Insureds reasonably believe that the total amount of Loss, including Defense Costs, resulting from a Claim will not exceed 50% of the applicable retention, the Insureds may incur Defense Costs and may settle such Claim, provided the total amount of Loss resulting from such Claim does not exceed 50% of the applicable retention. Under Definition (J), as amended by Endorsement No. 10(14), Loss means Defense Costs and any damages (including liquidated damages awarded pursuant to the Age Discrimination in Employment Act or the Equal Pay Act), settlements, judgments (including pre- and post- judgment interest on covered judgments, and claimants’ attorneys’ fees awarded pursuant to a court order or judgment), back pay awards and front pay awards or other amounts (including punitive or exemplary damages and the multiplied portion of any multiplied damage award, if and where insurable by law) that an Insured is legally obligated to pay as a result of any Claim, and Asset Protection Costs, Reputation Expenses and/or SOX Section 304 Costs arising from a Claim, Loss does not include, among other things, wages, fines, taxes or penalties or matters uninsurable by law as provided by Endorsement No. 10(14). Under Condition (G), as amended by Endorsement No. 10(44) in relevant part, such insurance as is provided by this Policy will apply only as excess over and will not contribute with any other valid and collectible insurance. However, subject to its terms and conditions, this Policy will apply primary to any private equity or venture capital liability policies maintained by shareholders of the Insured Organization and any personal umbrella liability policies maintained by Insured Persons. In that regard, please advise us whether there are any such other policies of insurance that may respond to this matter, and if so, what steps have been taken to secure coverage under such policies. Please send us copies of all such policies along with the coverage positions of the insurer(s). Finally, pursuant to Endorsement No. 2, please note that there is a $75,000 retention that applies to covered Loss incurred by the Insureds in connection with this Claim. Accordingly, the first $75,000 of covered Loss, including Defense Costs, will be payable by the Insured Organization. USSIC's obligation to pay Loss resulting from this Claim will be triggered only upon exhaustion of the retention by the Insured. Further, pursuant to Endorsement No. 10(39), it is agreed that if USSIC recommends a settlement of a Claim within the applicable Limit of Liability that is acceptable to the claimant (a HKI1000135 Linda Campbell EPIC Brokers 6/7/2016 Page 4 of 4 "Settlement Opportunity"), and the Insureds consent to such a settlement, then the retention amount applicable to such Claim will be retroactively reduced by 10%. As a condition precedent to such reduction, the insureds must consent to such Settlement Opportunity within 30 days of the date the Insureds became aware of it, or within the time permitted by the claimant if such Settlement Opportunity arises from a settlement offer by the claimant, but in no event later than 30 days after the settlement offer was made. If the Insureds do not consent to the Settlement Opportunity within such time frame, such Claim will be subject to the full amount of the applicable retention, even if they consent to a subsequent settlement of such Claim. Please keep us apprised of all further developments in this matter, including sending copies of all pertinent pleadings and other documents. If you do not agree with any part of the foregoing analysis, please advise us in writing. [f you have any guestions, please feel free to call. | can be reached directly at (860) 284-4605 or, by e-mail at levon@tmhce.com, or at our Connecticut address shown above. USSIC respectfully continues to reserve all rights and defenses available to it under the policy and otherwise, including the right to raise additional issues that may affect coverage. Very truly yours, “Fiotn Gon Lisa Evon Claims HKI000136 EXHIBIT D IN No e S N W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 STEVEN H. HANEY, SBN 121980 J. ADRIAN ZAMORA, SBN 212843 HANEY & YOUNG LLP 1055 West Seventh St., Ste. 1950 Los Angeles, California 90017 Telephone: 213-228-6500 Facsimile: 213-228-6501 Email: shaney@haneyyoung.com Attorneys for Defendants HUXTABLE’S KITCHEN, INC. and HMR FOODS HOLDING, LP SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES ANNETTE MARTINEZ, an individual, CASE NO.: BC605517 Plaintiff, [Assigned to Hon. Stephanie Bowick, Dept. 19] \2 NOTICE RE COURT RULING REGARDING DEFENDANTS’ HUXTABLE’S KITCHEN, INC, a corporation;) BANKRUPTCY AND CASE HMR FOODS HOLDING, LP, a Limited MANAGEMENT CONFERENCE Partnership; and DOES 1 through 10, inclusive Defendants. S r Na r’ N g e e ” N a ” Ne Ne i a t ” a a we a e ” To all parties, and their attorneys of record, PLEASE TAKE NOTICE, the court has ruled as follows: 1. Due to Defendants’ filing a petition for bankruptcy, the instant action is stayed; 2. Defendants withdrew their motion to compel arbitration in light of bankruptcy filing; 3. The July 6, 2016 Case Management Conference is vacated, and no appearances are required by the parties; 4. A status conference re bankruptcy is scheduled to take place on September 23, 2016 at 8:30AM in Department 19; 11 1 NOTICE RE COURT RULING RE DEFENDANTS’ BANKRUPTCY AND CASE MGMT CONFERENCE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 Defendants to submit a status report by September 16, 2016 re bankruptcy status; and 6. Defendants’ counsel to give this notice. 7 Dated: July 5, 2016 HANEY & YOUNG LLP > \ / [= ' STEVEN H. HANEY J. ADRIAN ZAMORA Attorney for Defendants HUXTABLE’S KITCHEN, INC. and HMR FOODS HOLDING, LP NOTICE RE COURT RULING RE DEFENDANTS’ BANKRUPTCY AND CASE MGMT CONFERENCE _D. NO d N nn RAR W N = NN N N N N N N O N O N == em e m e m e m e m e m mi e m 0 NJ O N nn B A W N = , O C R ” N N N D R A W N = PROOF OF SERVICE I am employed in the County of Los Angeles, State of California. I am over the age of 18 and not a party to the within action. My business address is: 1055 West Seventh Street, Suite 1950, Los Angeles, California 90017. On July 5, 2016, I caused to be served the foregoing document described as NOTICE RE COURT RULING REGARDING DEFENDANTS’ BANKRUPTCY AND CASE MANAGEMENT CONFERENCE in this action by placing a true copy thereof enclosed in a envelope addressed as follows: Tyler F. Clark Yi-Hsuan Rachel Lin CLARK EMPLOYMENT LAW, APC 16000 Ventura Blvd., Suite 850 Encino, CA 91436 Tel: (818) 741-2101 Fax: (818)561-3701 tvler@clarkemploymentlaw.com rachel@clarkemploymentlaw.com BY MAIL AS FOLLOWS: The envelope was mailed with postage thereon fully prepaid. I am "readily familiar" with the firm’s practice of collection and processing correspondence for mailing. Under that practice it would be deposited with the U.S. postal service on that same day with postage thereon fully prepaid at Los Angeles, Cali- fornia, in the ordinary course of business. I am aware that on motion of the party served, service is presumed invalid if the postal cancellation date or postage meter date is more than one day after service of deposit for mailing in affidavit. Hl BY PERSONAL SERVICE: I caused such document to be hand-delivered to the offices of the addressee. BY ELECTRONIC MAIL: I caused such document to be delivered by electronic mail to the offices of the addressee. [XI BY FACSIMILE MACHINE: The foregoing document was transmitted by facsimile transmission from (213) 228-6501 before 5:00 p.m. on said date and the transmission was reported as complete and without error. 0 BY OVERNIGHT MAIL Executed on July §, 2016, Los Angeles, CA 90017 X (State) I declare under penalty of perjury under the laws of the State of California that the above is true and correct. [[] (Federal) I declare that I am employed in the office of a member of the bar of this court at whose direction the service was made. Robin Ford Type or Print Name EXHIBIT E To: 18189613701 From: (4422473714) 08/09/16 10:48 AM Page 2 of 2 02.27.59pm 08-08-2016 | 2 | NextivaFax i/8/2016 02:29 PDT TC 136253244 FROM:818561370 Page: 2 1 || TylerF. Clark (SBN 258309) Yi-Hsuan Rachel Lin (SBN 283632) : 2 | CLARK EMPLOYMENT LAW, APC FILED 5 || 16000 Ventura Boulevard, Suite 850 Superior Court of California Encino, California 91436 eunty of Los Angeles 4 || Telephone: (818) 741-2101 A Facsimile: (818) 561-3701 UG 08 2016 5 || Email: tyler@clarkemploymentlaw.com 6 Email: rachel@clarkemploymentlaw.com 7 Attorneys for Plaintiff Annette Martinez 8 9 SUPERIOR COURT OF THE STATE OF CALIFORNIA 10 COUNTY OF LOS ANGELES 11 || ANNETTE MARTINEZ, Case No.: BC605517 12 Plaintiff, [Assigned to the Hon. Stephanie M. Bowick, ’ Dept. 19] 13 Vs PLAINTIFF ANNETTE MARTINEZ’S 14 NOTICE OF LIFTING AUTOMATIC HUXTABLE’S KITCHEN, INC, a STAY DUE TO BANKRUPTCY 15 || Corporation; HMR FOODS HOLDING, PROCEEDINGS; EXHIBIT A 16 LP, a Limited Partnership; and DOES 1- 10, inclusive, Complaint Filed: December 31, 2015 17 Trial Date: Not Set Defendants, 18 19 20 21 22 23 24 25 26 27 28 PLAINTIFF ANNETTE MARTINEZ'S NOTICE OF ORDER LIFTING AUTOMATIC STAY DUE TO Opt-Out Not Derined © EN ~~ O N W n 10 11 12 13 14 15 16 17 18 19 20 21 PB 23 24 25 26 27 28 TO THE HONORABLE COURT, ALL PARTIES AND THEIR ATTORNEYS OF RECORD PLEASE TAKE NOTICE that on August 8, 2016, the Honorable Kevin J. Carey of the United States Bankruptcy Court for the District of Delaware granted a stipulation between Plaintiff/Creditor Annette Martinez (“Plaintiff”) and bankruptcy Trustee for Defendants/Debtors Huxtable’s Kitchen, Inc. and HMR Foods Holding, LP (“Defendants”) to lift the automatic stay of 11 U.S.C. §362 in order for Plaintiff to continue the present lawsuit to the extent such claims are covered by the proceeds of from any applicable liability and/or excess insurance policies of the Defendants, specifically excluding any deductible payable under such policies. A true and correct copy of the Stipulation and Order are attached hereto as Exhibit A. Notice is given. Dated: August 8, 2016. CLARK EMPLOYMENT LAW, APC By: Tyler F. Clark, Esq. Attorneys for Plaintiff Annette Martinez -1- PLAINTIFF ANNETTE MARTINEZ’S NOTICE OF ORDER LIFTING AUTOMATIC STAY DUE TO BANKRUPTCY PROCEEDINGS EXHIBIT A Case 16-11540-KJC Doc 64 Filed 08/08/16 Page 1 of 1 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE Inre Chapter 7 HMR FOODS HOLDING, LP, et al., Case No. 16-11540 (KJC) (Jointly Administered) Debtors.’ Ref. No. 62 ORDER GRANTING STIPULATION REGARDING LIMITED MODIFICATION OF THE AUTOMATIC STAY OF SECTION 362(d) Upon consideration of the Certification of Counsel Regarding Stipulation Between Alfred T. Giuliano, Chapter 7 Trustee, and Annette Martinez for an Order Granting Limited Modification of the Automatic Stay of Section 362(d) (the “Certification”), and the stipulation attached hereto as Exhibit “1” (the “Stipulation”); and it appearing that the relief sought in the Certification and Stipulation are appropriate and necessary; and adequate and sufficient notice having been given; it is hereby ORDERED, that the Stipulation is APPROVED; and it is ORDERED, that this Court shall retain jurisdiction over any and all matters arising from or related to the implementation or interpretation of this Order, & C ( Dated: = { ,2016 JACK Lin The Hdnorable oh I. Carey [) United States Bankryiptcy Judge ! The Debtors in these cases, along with the last four digits of their federal tax identification numbers are (i) Huxtable’s Kitchen, Inc., a/k/a Handmade Real Foods, Pasta Kitchen, Fresh Selections (9801) (Case No. 16-11538-~ KJC); (if) HMR Foods, LLC, a/k/a Handmade Real Foods, Huxtable’s Kitchen, Simmering Soup Kitchen, Pasta Kitchen, Fresh Selections (9731) (Case No. 16-11539-KJC); (iii) HMR Foods Holding, LP, a/k/a Handmade Real Foods, Huxtable’s Kitchen, Simmering Soup Kitchen, Pasta Kitchen, Fresh Selections (0818) (Case No. 16-11540- KJC); (iv) Huxtable’s Kitchen Holding Corp., a/k/a Handmade Real Foods, Simmering Soup Kitchen, Pasta Kitchen, Fresh Selections (3276) (Case No. 16-11541-KJC); and (v) Simmering Soup Kitchen, LLC, a/k/a Handmade Real Foods, Huxtable’s Kitchen, Pasta Kitchen, Fresh Selections (9554) (Case No, 16-11542-KJC). Case 16-11540-KJC Doc 64-1 Filed 08/08/16 Page 1 of 5 Case 16-11540-KJC Doc 62-1 Filed 08/05/16 Page 3 of 7 Exhibit 1 Case 16-11540-KJC Doc 64-1 Filed 08/08/16 Page 2 of 5 Case 16-11540-KJC Doc 62-1 Filed 08/05/16 Page 4 of 7 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE Inre Chapter 7 HMR FOODS HOLDING, LP, ef al, Case No, 16-11540 (KIC) (Jointty Administered) Debtors.’ STIPULATION BETWEEN ALFRED T. GIULIANO, CHAPTER 7 TRUSTEE, AND ANNETTE MARTINEZ FOR AN ORDER GRANTING LIMITED MODIFICATION OF THE AUTOMATIC STAY OI STCTION 362(d) WHEREAS, Annette Martinez (“Martinez”) has alleged claims against HMR Foods Holding, LP, and Huxtable’s Kitchen, Inc. (jointly, the "Debtors") for damages sustained by Martinez; and Martinez has filed a lawsuit against the Debtors, among others, in the Superior Court of the State of California, County of Los Angeles, Case No. BC605517 (the “Lawsuit”); and WHEREAS, on June 24, 2016, the Debtors filed in the United States Bankruptcy Court for the District of Delaware (the “Court” voluntary petitions under Chapter 7 of Title 11 of the United States Code (the “Bankruptcy Code”) and are being jointly administered by the Court under the above caption; and WHEREAS, Alfred T. Giuliano was appointed Chapter 7 Trustee (the “Trustee”) fot the Debtors’ estates and is duly qualified and acting as such in the above captioned cases; and WHEREAS, the Lawsuit has been stayed by the automatic stay of 11 U.S.C. § 362; and {The Debtors in these cases, along with the last four digits of their federal tax identification numbers are (i) Huxtable’s Kitchen, Inc., a/k/a Handmade Real Foods, Pasta Kitchen, Fresh Selections (9801) (Case No. 16-11538- KIC); (il) HMR Foods, LLC, a/k/a Handmade Real Foods, Huxtable’s Kitchen, Simmering Soup Kitchen, Pasta Kitchen, Fresh Selections (9731) (Case No. 16-11539-KJC); (iii) HMR Foods Holding, LP, a/k/a Handmade Real Foods, Huxtable's Kitchen, Simmering Soup Kitchen, Pasta Kitchen, Fresh Selections (0818) (Case No. 16-11540- KJC); (iv) Huxtable’s Kitchen Holding Corp., a/k/a Handmade Real Foods, Simmering Soup Kitchen, Pasta Kitchen, Fresh Selections (3276) (Case No, 16-11541-KJC); and (v) Simmering Soup Kitchen, LLC, a/k/a Handmade Real Foods, Huxtable’s Kitchen, Pasta Kitchen, Fresh Selections (9554) (Case No. 16-11542-KJC). Case 16-11540-KJC Doc 64-1 Filed 08/08/16 Page 3 of 5 Case 16-11540-KJC Doc 62-1 Filed 08/05/16 Page 5 of 7 WHEREAS, Martinez seeks an order for relief from the automatic stay to proceed with the Lawsuit; and WHEREAS, Martinez and the Trustee desire to resolve their dispute without further litigation, NOW, THEREFORE, it is hereby stipulated and agreed between the Trustee and Martinez that: i. The Coutt enter an Order modifying the automatic stay of Section 362(d) of the Bankruptcy Code to allow Martinez to continue the Lawsuit, but any recovery is limited to the extent that such claims are covered by the proceeds from any applicable liability and/or excess insurance policies of the Debtor (the “Insurance Policies”), and specifically excluding any "deductible payable under such Insurance Policies. 2. Martinez waives any claims against the Debtors and Debtors’ estates, other than the claims against the insurance proceeds, and she agrees that any settlement entered into by her include a general release of any and all claims she may currently be able to raise or may in the future raise against the Debtors and Debtors’ estates. (CONTINUED ON NEXT PAGE) Case 16-11540-KJC Doc 64-1 Filed 08/08/16 Page 4 of 5 Case 16-11540-KJC Doc 62-1 Filed 08/05/16 Page 6 of 7 3. This Stipulation contains the entire agreement between the parties and may only be amended in writing, executed by the parties hereto and approved by the Bankruptcy Court. Dated: August 5, 2016 Wilmington, Delaware Dated: August 5, 2016 Wilmington, Delaware FOX ROTHSCHILD LLP /s/ Seth 4, Niederman Seth A. Niederman, Esquire Delaware Bar No. 4588 919 North Market Street, Suite 300 Wilmington, DE 19801-2323 Telephone: (302) 654-7444 Facsimile: (302) 656-8920 Email: sniederman@foxrothschild.com ~and- Michael G. Menkowitz, Esquire Jason C, Manfirey, Esquire 2000 Markel Street, 20% Floor Philadelphia, PA 19103-3222 Telephone: (215) 299-2000 Facsimile: (215) 299-2150 Email: mmenkowitz@foxrothschild.com imanfrey@foxrothschild.com Proposed counsel for Alfred T. Giuliano, Chapter 7 Trustee for the estates of HMR Foods Holdings, et al. ~and- CHIPMAN BROWN CICERO & COLE, LIP /s/ Mark D. Olivere Mark D. Olivere (No. 4291) Hercules Plaza 1313 North Market Street, Suite 5400 Wilmington, Delaware 19801 Telephone: (302) 295-0191 Facsimile: (302) 295-0199 Email; olivere(@chipmanbrown.com -and- Case 16-11540-KJC Doc 64-1 Filed 08/08/16 Page 5 of 5 Case 16-11540-KJC Doc 62-1 Filed 08/05/16 Page 7 of 7 CLARK EMPLOYMENT LAW, APC Tyler F, Clark, Esquire 16000 Ventura Blvd., Ste. 850 Encino, California 91436 Phone (818) 741-2101/Fax (818) 561-3701 tyler@clarkemploymentlaw.com Counsel for Annette Martinez EN ~ N O N Wn 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE I am employed in the County of Los Angeles, State of California. I am over the age of 18 years and am not a party to the within action. My business address is 16000 Ventura Boulevard, Suite 850, Encino, California 91436. On August 8, 2016, I served the foregoing document(s) described as PLAINTIFF ANNETTE MARTINEZ’S NOTICE OF ORDER LIFTING AUTOMATIC STAY DUE TO BANKRUPTCY PROCEEDINGS; EXHIBIT A on the interested parties in this action by placing a true copy thereof enclosed in a sealed envelope and addressed as follows: J. Adrian Zamora, Esq. Attorneys for Defendants Huxtable’s Steven H. Haney, Esq. Kitchen, Inc. and HMR Foods HANEY & YOUNG LLP Holding, LP 1055 W. Seventh Street, Suite 1950 Los Angeles, CA 90017 _X BY MAIL 1 deposited such envelope with the U.S. Postal Service in Encino, California with postage thereon fully prepaid. I am aware that on motion of a party served, service is presumed invalid if the postal cancellation date or the postage meter date is more than one (1) day after the date of deposit for mailing in this affidavit. BY OVERNIGHT DELIVERY 1 deposited such envelope and consigning it to an express mail or overnight courier for guaranteed delivery on the next business day following the date of consignment to the address(es) set forth above. LL BY PERSONAL SERVICE 1 delivered such envelope by hand to the address(es) set forth above. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed August 8, 2016, at Encino, California. C [| A \_/ Diana Muro PROOF OF SERVICE EXHIBIT F 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 STEVEN H. HANEY, SBN 121980 J. ADRIAN ZAMORA, SBN 212843 HANEY & YOUNG LLP 1055 West Seventh St., Ste. 1950 Los Angeles, California 90017 Telephone: 213-228-6500 Facsimile: 213-228-6501 Email: shaney@haneyyoung.com Attorneys for Defendants HUXTABLE’S KITCHEN, INC. and HMR FOODS HOLDING, LP SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES ANNETTE MARTINEZ, an individual, CASE NO.: BC605517 Plaintiff, [Assigned to Hon. Stephanie Bowick, Dept. 19] Vv. NOTICE OF RULING HUXTABLE’S KITCHEN, INC., a corporation; HMR FOODS HOLDING, LP, a Limited Partnership; and DOES 1 through 10, inclusive Date: September 23, 2016 Time: 8:30AM Defendants. Dept.: 19 TO THIS HONORABLE COURT, THE PARTIES AND THEIR COUNSEL OF RECORD, PLEASE TAKE NOTICE that on August 23, 2016 in Department 19 of the above- referenced court, the Honorable Stephanie Bowick presiding, counsel for Defendants HUXTABLE’S KITCHEN, INC. and HMR FOODS HOLDING, LP (“Defendants”) and Plaintiff ANNETTE MARTINEZ (“Plaintiff”) attended a status conference regarding the status of Defendants’ June 24, 2016 Chapter 7 bankruptcy court filing, and automatic stay of this instant action. After counsel advised the Court that the Bankruptcy court granted Plaintiff relief from the automatic bankruptcy stay, this Court ruled as follows: NOTICE OF RULING 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 1) A Case Management Conference is scheduled to take place on the same date as the hearing on Defendants’ Motion to Compel Arbitration - October 20, 2016 at 8:30AM; and 2) Defendant was ordered to give notice. Dated: SeptemberZ.}, 2016 HANEY & YOUNG LLP EVE H.HANEY J. AN ZAMORA" Attorney for Defen ts HUXTABLE’S KITCHEN, INC. and HMR FOODS HOLDING, LP NOTICE OF RULING 27 x X I a n n Ba \O 10 11 12 13 14 15 16 ¥i 18 19 20 21 2 23 24 25 26 27 28 PROOF OF SERVICE I am employed in the County of Los Angeles, State of California. I am over the age of 18 and not a party to the within action. My business address is: 1055 West Seventh Street, Suite 1950, Los Angeles, California 90017. On September 23, 2016, I caused to be served the foregoing document described as NOTICE OF RULING in this action by placing a true copy thereof enclosed in a envelope addressed as follows: Tyler F. Clark Yi-Hsuan Rachel Lin CLARK EMPLOYMENT LAW, APC 16000 Ventura Blvd., Suite 850 Encino, CA 91436 facsimile: 818-561-3701 tvler@clarkemploymentlaw.com rachel@clarkemploymentlaw.com X BY MAIL AS FOLLOWS: The envelope was mailed with postage thereon fully prepaid. I am "readily familiar" with the firm’s practice of collection and processing correspondence for mailing. Under that practice it would be deposited with the U.S. postal service on that same day with postage thereon fully prepaid at Los Angeles, Cali- fornia, in the ordinary course of business. I am aware that on motion of the party served, service is presumed invalid if the postal cancellation date or postage meter date is more than one day after service of deposit for mailing in affidavit. BY PERSONAL SERVICE: I caused such document to be hand-delivered to the offices of the addressee. BY ELECTRONIC MAIL: I caused such document to be delivered by electronic mail to the offices of the addressee. BY FACSIMILE MACHINE: The foregoing document was transmitted by facsimile transmission from (213) 228-6501 before 5:00 p.m. on said date and the transmission was reported as complete and without error. O O O Ol BY OVERNIGHT MAIL Executed on September 23,2016 in Los Angeles, CA 90017 X (State) I declare under penalty of perjury under the laws of the State of California that the above is true and correct. [1] (Federal) I declare that I am employed in the office of a member of the bar of this court at whose direction the service was made. AK Shee / Type or Print Name Si n TT EXHIBIT G 4 SHIPMAN & A GOODWIN ...* COUNBELQRS AT LAW Janet R McFadden Phone: 202-469-7768 jmcfadden@goodwin.com September 28, 2016 VIA EMAIL LINDA.CAMPBELL@EPICBROKERS.COM Linda Campbell EPIC Brokers 601 S. Figueroa Street #3950 Los Angeles, CA 90017 Re: Insured: HMR Foods Holding, LP (“HMR”) Insurer: U.S. Specialty Insurance Company (“U.S. Specialty”) Policy No.: ~~ 14-MGU-15-A34946 ("the Policy") Matter: Annette Martinez File No.: A-16-030770 Dear Ms. Campbell: We represent U.S. Specialty in connection with the above-referenced matter, which was first submitted to the Insurer on May 9, 2016, in the form of an attorney letter dated November 24, 2015 that was sent to the California Labor & Workforce Development Agency on behalf of Annette Martinez (the “LWDA Letter”), with copies to Huxtable’s Kitchen, Inc, and HMR. The LWDA Letter alleged that Huxtable’s Kitchen had wrongfully terminated Martinez from her employment position in retaliation for complaining about fraudulent labeling of food products. By letter dated June 7, 2016, U.S. Specialty provided HMR with its initial views regarding coverage under the Policy for the LWDA Letter, sought additional information and reserved all rights and defenses. It is our understanding that on or about December 31, 2015, Martinez filed a complaint in the Superior Court for Los Angeles County, captioned Martinez v. Huxtable's Kitchen, Inc. and HMR Foods Holding, LP, Case No. BC605517 (the “Lawsuit), U.S. Specialty did not receive notice of the Lawsuit until defense counsel’s letter of August 10, 2016, which advised U.S. Specialty that HMR had filed for bankruptcy on June 24, 2016, and also noted that Martinez had received bankruptcy court permission to proceed with the Lawsuit. This letter will supplement U.S. Specialty’s prior coverage correspondence in light of the allegations in the Lawsuit, but we encourage you to review the June 7, 2016 letter as well, 1875 K STREET, NW ; SUITE 600 WASHINGTON, DC 20006-1281 202-468-7750 WWW .SHIPMANGODOWIN.COM HKI000137 Linda Campbell September 28, 2016 Page 2 We address this letter to you as the authorized representative of the Insureds, If you are not authorized to receive this letter on their behalf, please let us know immediately. We also request that you forward this letter to the bankruptcy trustee with a copy to the undersigned. Su of the Lawsuit As with the LWDA Letter, Martinez’s Lawsuit alleges retaliation for her complaints to her supervisor that the company’s food labeling activities violated federal and state law. In addition, the Lawsuit alleges that Martinez was afflicted with mental disabilities (“anxiety disorder and depression”), which were exacerbated by the fraudulent labeling activities, causing her severe anxiety. In July 2015, the food products were recalled by the Food and Drug Administration. Shortly thereafter, Martinez asserts that she took a medical disability leave during which the company terminated her for “unapproved absence.” The Lawsuit contains five causes of action under the California Government Code, alleging failure to accommodate disabilities, disability discrimination and retaliation. The Lawsuit also contains causes of action under the California Family Rights Act and California Labor Code for interference with rights and retaliation. Finally, the Lawsuit alleges wrongful discharge against public policy. Plaintiff seeks unspecified compensatory damages, exemplary and punitive damages, injunctive and equitable relief, civil penalties under the California Labor Code, attorneys fees and costs. Supplemental Coverage Analysis U.S. Specialty issued the Policy to HMR for the original Policy Period from June 4,2015 to June 4, 2016, extended to December 4, 2016 by Endorsement 15. The Lawsuit names only two defendants, which we understand are both Insured Organizations under the Policy. Accordingly, the Lawsuit implicates Insuring Agreement (C) - Organization Liability, Definition (F) of the Policy, as amended by Endorsement No. 10, defines Employment Practices Wrongful Acts to include in pertinent part any actual or alleged Discrimination on the basis of a mental disability, Retaliation for attempting to exercise rights under the law, and Wrongful Termination, all of which are alleged in the Lawsuit. The Policy has a $3 million Standard Limit of Liability that would apply to this Claim, subject to a retention of $75,000 for each Claim brought in California for Employment Practices Wrongful Acts. Condition (A)(4)(a), as amended by Endorsement No. 10, provides that the retention will apply to Loss, including Defense Costs, which the Insured Organization is obligated to pay as a result of any Claim against it. Condition (A) further provides that Defense Costs as incurred will be applied against the retention, Pursuant to Definition (D), Defense Costs means reasonable legal fees, costs and expenses consented to by the Insurer. As indicated above, the Insurer did HKI000138 Linda Campbell September 28, 2016 Page 3 not have any opportunity to consent to Defense Costs until it received notice of the Claim on May 9, 2016. Accordingly, only those Defense Costs incurred after May 9, 2016 will be applied against the retention. U.S. Specialty also wishes to call your attention at this time to certain other provisions in the Policy which may limit or preclude the availability of coverage for this matter. U.S, Specialty specifically reserves the right to raise additional potentially applicable policy provisions as this matter develops. Pursuant to Exclusion (B), as amended by Endorsement No. 10, there is no coverage for any Claim arising out of, based upon or attributable to the commission by any Insured of any deliberately fraudulent act, if established by a final adjudication that the Insured so acted. In addition, intentional misconduct by the Insureds may be deemed uninsurable under the law pursuant to which the Policy is to be construed. We raise these exclusions again because, in seeking punitive damages, the Lawsuit alleges that the defendants acted in a “deliberate, cold, callous, fraudulent and intentional manner” that constituted “malice, fraud and/or oppression.” Exclusion (J) provides that there is no coverage for the portion of a Claim that seeks relief or redress in any form other than money damages. We mention this provision because the Lawsuit specifically seeks “injunctive and equitable relief” for which there would be no coverage other than Defense Costs. Definition (J), as amended by Endorsement No. 10, Loss does not include, among other things, wages, fines, taxes or penalties or matters uninsurable by law, We mention this provision because the Lawsuit seeks civil penalties, which are not covered Loss. Plaintiff also seeks punitive damages, which may be deemed uninsurable under the applicable law. Pursuant to Condition (D)(1), as amended by Endorsement No. 10, U.S. Specialty has no duty to defend any Insured. The Insureds must defend any Claim against them. We understand that by stipulating to a lifting of the automatic stay, the bankruptcy trustee has agreed to act on behalf of the Insured Organizations in defense of the Lawsuit. If we are mistaken in this regard, please let us know immediately. We also understand that the stipulated order restricts Martinez’s potential recoveries to proceeds of applicable insurance policies “specifically excluding any deductible” under such policies. U.S. Specialty construes this stipulated order as reflecting Martinez’s agreement that any portion of a “deductible” that was unpaid by the Insureds will be applied first to reduce any settlement, award or judgment she may receive. Again, if we are mistaken in this regard, please let us know. In the meantime, U.S. Specialty consents to the law firm of Haney & Young to act as defense counsel in this matter at the agreed-upon hourly rates of $400 for a partner, HK1000139 Linda Campbell September 28, 2016 Page 4 $285 for an associate and $125 for a paralegal. Pursuant to the Defense Counsel Guidelines, which the law firm has already received, U.S. Specialty awaits a budget for the continued litigation or arbitration. We also ask for all defense invoices issued to date, and that future invoices be sent to the undersigned, along with all pertinent pleadings, motions, orders and discovery responses. We are available to discuss any of the issues raised in this letter. U.S. Specialty continues to reserves all rights and defenses available to it under the Policy and otherwise, including the right to raise additional issues as this matter develops. Sincerely, Ger Af 17 Fler. Janet R McFadden HK1000140 EXHIBIT H ENDORSEMENT NUMBER: 17 RUN-OFF COVERAGE UPON CHANGE IN CONTROL To be attached to and made a part of Policy No. 14-MGU-15-A34946, issued to HMR Foods Holding, LP by U.S. Specialty Insurance Company. In consideration of the payment of an additional premium of $30,189.00, 100% of which is hereby deemed to be fully earned, and notwithstanding anything in this Policy to the contrary, it is agreed that: (1) Item 2 of the Declarations, Policy Period, subsection (b) is amended to read: (b) Expiration Date: 12/4/2022 2) Coverage under this Policy will continue in full force and effect until the end of the Policy Period with respect to Claims for Wrongful Acts committed or allegedly committed before 12/4/2016, but coverage will cease with respect to Claims for Wrongful Acts committed or allegedly committed thereafter. 3) This endorsement shall not in any way increase or reinstate the aggregate Limit of Liability set forth in Item 3 of the Declarations, which remains the Insuret’s maximum aggregate liability for all Loss on account of all Claims first made during the Policy Period (as amended above). (4) The DISCOVERY PERIOD section of the Policy is deleted in its entirety. (5) This endorsement and the rights contained herein will not apply if this Policy is terminated by the Insurer for non-payment of premium. All other terms, conditions and limitations of this Policy will remain unchanged. Complete the following only when this endorsement is not prepared with the Policy or is not to be effective with the Policy. Effective date of this endorsement: 12/4/2016 By: ot { Attorney-in-Fact 1055-806 Page 1 of 1 Ed. 02/05 HKI000131 EXHIBIT I SUPERIOR COURT OF CALIFORNIA, COUNTY OF LOS ANGELES pate: 08/18/17 DEPT. 19 HONORABLE STEPHANIE M. BOWICK JUDGE|| B. GARCIA DEPUTY CLERK HONORABLE JUDGE PRO TEM ELECTRONIC RECORDING MONITOR #12 Cc. LaM, C.A. Deputy Sheriff NONE Reporter 8:30 am|BC605517 ) Plaintiff Counsel ANNETTE MARTINEZ NO APPEARANCES VS Defendant HUXTABLE'S KITCHEN INC ET AL Counsel 170.6 BY PLTF/JUDGE B. SCHEPER NATURE OF PROCEEDINGS: RULING ON SUBMITTED MATTER: MOTION OF DEFENDANTS, HUXTABLE'S KITCHEN, INC., AND HMR FOODS HOLDING, LP TO COMPEL ARBITRATION; In the matter heretofore submitted on August 1, 2017, the Court now renders its decision as follows: For all the reasons as detailed in the Court's written "Ruling", consisting of 8 pages, signed and filed this date and attached to this minute order, the Court rules as follows: After consideration of the briefing filed, testimony and evidence submitted, and oral argument at the hearings, Defendant Huxtable's Kitchen, Inc. and HMR Foods Holdings, LP's Motion to Compel is GRANTED. The action is stayed pending completion of the - arbitration. (Code of Civil Procedure section 1281.4.) The Court sets a Status Conference Re: Arbitration for April 2, 2018, at 8:30 a.m. in this department. Counsel for Defendants is to give notice. CLERK'S CERTIFICATE OF MAILING MINUTES ENTERED Page 1 of 2 DEPT. 19 08/18/17 COUNTY CLERK > — — — dp L E R e T L a r s B R S a w R A EXHIBIT J From: Steven Haney To: Hon. Enrique Romero (Ret.) Cc: Tyler F. Clark; Adrian Zamora; Rachel Lin; ] esse Centeno Subject: Re: Martinez v Huxtable Kitchen Payment Deadline for Arb set for 10/8 - 10/12, 2018 Date: July 24, 2018 10:56:29 AM On behalf of Huxtables, the Arbitration is cancelled and Huxtables is waiving its right to Arbitrate. There will be no further payments to Benchmark Thank you, Steve Haney On Tue, Jul 24, 2018 at 9:28 AM, Hon. Enrique Romero (Ret.) wrote: 9/26/18 tel. 8 —9 A.M. Jesse Centeno to give formal notice. Package to be filed and served by 9/20/18 along with a proposed Award. So ordered. Judge Romero From: Tyler F. Clark Sent: Tuesday, July 24, 2018 9:03 AM To: Hon. Enrique Romero (Ret.) ; Adrian Zamora Cec: Steven Haney ; Rachel Lin ; Jesse Centeno Subject: RE: Martinez v Huxtable Kitchen Payment Deadline for Arb set for 10/8 - 10/12, 2018 Judge Romero, Thank you. This is a fee-bearing FEHA case. We will need at least 60 days to prepare the default package if we are to include fees. Sometime in late September is preferable. Thank you, Tyler Tyler F. Clark, Esq. CLARK EMPLOYMENT LAW, APC 16000 Ventura Blvd.. Ste. 850 Encino. California 91436 P: 818.741.2101 F: 818.561.3701 tyler@clarkemploymentlaw.com www.clarkemploymentlaw.com NOTICE: This email is intended solely for the named recipient or the recipient's agent, and may contain legally privileged information. If you are not the named or intended recipient, please do not copy, disclose or disseminate this email or its contents, and please contact the sender as soon as possible. Thank you for your cooperation. From: Hon. Enrique Romero (Ret.) Sent: Tuesday, July 24, 2018 8:23 AM To: Tyler F. Clark ; Adrian Zamora Cec: Steven Haney ; Rachel Lin ; Jesse Centeno Subject: RE: Martinez v Huxtable Kitchen Payment Deadline for Arb set for 10/8 - 10/12, 2018 Importance: High 7/24: Electronic ruling and order: 1. The arbitrator issued a ruling ordering R’s insurance carrier to pay for the arbitration hearing set for the week of 10/8 — 10/12, 2018 by 7/2/18. This did not happen. 2. On 7/5/18, I asked counsel to notify us why payment had not been made and needed to know by 7/9 why payment had not been made. 3. On 7/11/18, I was asked by Respondents’ counsel to speak to the insurance representative to discuss payment. I notified counsel that I do not handle money for Benchmark and that the representative should speak with Dario Higuchi, Benchmark’s CEO. 4. Higuchi spoke to the representative and told the representative that payment had to be made pursuant to my order. 19 ) . As of 7/24/18, payment has not been made. 6. A default is entered as of today and Claimant is ordered to prepare a telephonic Default Prove-Up on August 14, 2018 8 — 9 A.M. The Prove-Up package shall be filed and served (with Jesse Centeno, my case mgr.) by 8/10/18 3 p.m. It should have Declarations and any other evidence that Claimant’s counsel will present for the prove up and entry of Default and Award. 7. If counsel for Claimant needs additional time to prepare the default prove-up package, please let all us know ASAP. . The arbitration dates of 10/8 — 10/12 are advanced and vacated. 9. Jesse Centeno to give formal notice. oo So ordered. Judge E. Romero Arbitrator From: Tyler F. Clark Sent: Monday, July 23, 2018 2:22 PM To: Hon. Enrique Romero (Ret.) ; Adrian Zamora Cec: Steven Haney ; Rachel Lin ; Jesse Centeno Subject: RE: Martinez v Huxtable Kitchen Payment Deadline for Arb set for 10/8 - 10/12, 2018 Judge Romero, We are still waiting for a response concerning the issue of default. You made an Order that Defendants would be in default if no payment was made, however, the deadline passed and we have heard nothing. We would appreciate a response. Thank you, Tyler Tyler F. Clark, Esq. CLARK EMPLOYMENT LAW, APC 16000 Ventura Blvd.. Ste. 850 Encino. California 91436 P: 818.741.2101 F: 818.561.3701 tyler@clarkemploymentlaw.com www.clarkemploymentlaw.com NOTICE: This email is intended solely for the named recipient or the recipient's agent, and may contain legally privileged information. If you are not the named or intended recipient, please do not copy, disclose or disseminate this email or its contents, and please contact the sender as soon as possible. Thank you for your cooperation. From: Tyler F. Clark Sent: Tuesday, July 17, 2018 8:31 PM To: Hon. Enrique Romero (Ret.) ; Adrian Zamora Cec: Steven Haney ; Rachel Lin ; Jesse Centeno Subject: RE: Martinez v Huxtable Kitchen Payment Deadline for Arb set for 10/8 - 10/12, 2018 Judge Romero, It is my understanding that Respondents did not pay as Ordered by last Friday and there has been no modification of the Order. Please confirm whether there was a modification and why or set a default prove up as stated below. Thank you, Tyler Tyler F. Clark, Esq. Clark Employment Law, APC 16000 Ventura Blvd., Ste. 850 Encino, CA 91436 P: 818-741-2101 F: 818-561-3701 tyler@clarkemploymentlaw.com www.clarkemploymentlaw.com On Jul 12, 2018 8:00 PM, "Tyler F. Clark" wrote: Judge Romero, I object to the ex parte communication suggested by Mr. Haney. After speaking with Mr. Haney, I find it completely unnecessary. If the insurance company does not want to pay you and is threatening not to pay Plaintiff....so be it. Defendant compelled arbitration and agreed to retain your services fully understanding the financial consequences. If they don’t pay by tomorrow we will move forward with the default judgment prove up as Ordered below. Thank you, Tyler Tyler F. Clark, Esq. CLARK EMPLOYMENT LAW, APC 16000 Ventura Blvd.. Ste. 850 Encino. California 91436 P: 818.741.2101 F: 818.561.3701 tyler@clarkemploymentlaw.com www.clarkemploymentlaw.com NOTICE: This email is intended solely for the named recipient or the recipient's agent, and may contain legally privileged information. If you are not the named or intended recipient, please do not copy, disclose or disseminate this email or its contents, and please contact the sender as soon as possible. Thank you for your cooperation. From: Hon. Enrique Romero (Ret.) Sent: Friday, July 6, 2018 2:36 PM To: Adrian Zamora Cc: Rachel Lin ; Steven Haney ; Tyler Clark ; Jesse Centeno Subject: RE: Martinez v Huxtable Kitchen Payment Deadline for Arb set for 10/8 - 10/12, 2018 So ordered. 7/13 is new deadline. Judge Romero From: Adrian Zamora Sent: Friday, July 6, 2018 1:15 PM To: Hon. Enrique Romero (Ret.) Cc: Rachel Lin ; Steven Haney ; Tyler Clark ; Jesse Centeno Subject: Re: Martinez v Huxtable Kitchen Payment Deadline for Arb set for 10/8 - 10/12, 2018 Judge Romero, The contact at the carrier is out of town for the holiday, and will not be back until July 10, could respondents have until July 13 to respond to the OSC? Respectfully, J. Adrian Zamora On Thu, Jul 5, 2018 at 3:29 PM, Hon. Enrique Romero (Ret.) wrote: 7/5/18: Counsel: My case mgr., Jesse Centeno, told me that respondents have not paid for the arbitration hearing set for 10/8 — 10/12, 2018 with the deadline that Benchmark Resolution of 7/2/18 to post the arbitration fees. I need to know ASAP, no later than 7/9/18 COB why payment has not been made. Unless payment is made, I will have to enter a default, vacate the hearing dates and set it for a default judgment prove up. So ordered. Judge E. Romero J. Adrian Zamora Haney & Young LLP 1055 W. 7th St., Ste. 1950 Los Angeles, California 90017 Phone: (213) 228-6524 Facsimile: (213) 228-6501 Email: azamora@ haneyyoung.com CONFIDENTIALITY NOTICE: This e-mail transmission and any documents, files or previous-emails attached to it may contain information that is confidential or legally privileged. If you are not the intended recipient, or a person responsible for delivering it to the intended recipient, you are hereby notified that you must not read this transmission and that any disclosure, copying, printing, distribution or use of any of the information contained in or attached to this transmission is STRICTLY PROHIBITED. If you have received this transmission in error, please immediately notify the sender by telephone or return e-mail and delete the original transmission and its attachments, without reading or saving in any manner. Thank you. Steven H. Haney Haney & Young LLP 1055 W. 7th St., Ste. 1950 Los Angeles, California 90017 Phone: (213) 228-6505 Facsimile: (213) 228-6501 Email: shaney@haneyyoung.com a CONFIDENTIALITY NOTICE: This e-mail transmission and any documents, files or EXHIBIT K 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ORIGINAL STEVEN H. HANEY, SBN 121980 J. ADRIAN ZAMORA, SBN 212843 HANEY & YOUNG LLP 1055 West Seventh St., Ste. 1950 LED Los Angeles, California 90017 Superior Court of California Telephone: 213-228-6500 ounty of Los Angeles Facsimile: 213-228-6501 AUG 01 2018 Sherri 3. Attorneys for Defendants By voy ovo OffloswiOiork HUXTABLE’S KITCHEN, INC. and Michal Filverg. ~~ COPY HMR FOODS HOLDING, LP SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES ANNETTE MARTINEZ, an individual, CASE NO.: BC605517 [Assigned to Hon. Stephanie M. Bowick, Dept. 19] [PROPOSED] ORDER Plaintiff, Vv. HUXTABLE’S KITCHEN, INC., a corporation; HMR FOODS HOLDING, LP, a Limited Partnership; and DOES 1 through 10, inclusive Date: August 1, 2018 Time: 8:30AM Defendants. Dept.: 19 The ex parte application to transfer the case from binding arbitration to Civil Court and to schedule a Trial Setting Conference came before this Court at 8:30 a.m. on August 1, 2018 in Dept. 19 of the Los Angeles, Superior Court, the Honorable Stephanie M. Bowick presiding. After considering the moving papers, and arguments of counsel, the Court rules as follows: The ex parte application is granted. Defend 4 a’ Wa Wes rid tv ze by hea fury | - This matter shall be transferred back to Dept. 19 of the Civil Court; and The Trial {Juv ) \S sed * tov” July U5, old ) 4-30 A ) ond Ta Statue Condavenie 16 sel ov Jul 42, 20d 4:00 um. (0) [PROPOSED] ORDER 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 0 (Oo IS HEREBY ORDERED: © Crs ” [i ' I ve \ . = SE . : v 7 Af ’ < t B i WA MA De nS seb bor | chon wy M201, 297 Tw wv fies we. ovens to conp\ele ¢ Madan SLi lemony ONXeveny vz, ¢ @ a5 : V . ted: | | 000 ( Shed) (ths Eph | HON. STEPHANIE M. BOWICK JUDGE OF THE SUPERIOR COURT [PROPOSED] ORDER -— An 050 Pe! MSC Scheduli 1 "ps sll bt weer (p BLS Ad 10 11 12 13 14 15 16 17 18 19 20 21 22 29 24 23 26 27 28 PROOF OF SERVICE [am employed in the County of Los Angeles, State of California. I am over the age of 18 and not a party to the within action. My business address is: 1055 West Seventh Street, Suite 1950, Los Angeles, California 90017. On August 1, 2018, I caused to be served the foregoing document described as Ex Parte Application and [Proposed] Order in this action by placing a true copy thereof enclosed in a envelope addressed as follows: Tyler F. Clark Yi-Hsuan Rachel Lin CLARK EMPLOYMENT LAW, APC 16000 Ventura Blvd., Suite 850 Encino, CA 91436 facsimile: 818-561-3701 tyler@clarkemploymentlaw.com rachel@clarkemploymentlaw.com J BY MAIL AS FOLLOWS: The envelope was mailed with postage thereon fully prepaid. I am "readily familiar" with the firm’s practice of collection and processing correspondence for mailing. Under that practice it would be deposited with the U.S. postal service on that same day with postage thereon fully prepaid at Los Angeles, Cali- fornia, in the ordinary course of business. I am aware that on motion of the party served, service is presumed invalid if the postal cancellation date or postage meter date is more than one day after service of deposit for mailing in affidavit. BJ BY PERSONAL SERVICE: I caused such document to be hand-delivered to the offices of the addressee. BY ELECTRONIC MAIL: I caused such document to be delivered by electronic mail to the offices of the addressee. 1 BY FACSIMILE MACHINE: The foregoing document was transmitted by facsimile transmission from (213) 228-6501 before 5:00 p.m. on said date and the transmission was reported as complete and without error. 0 BY OVERNIGHT MAIL Executed on August 1, 2018 in Los Angeles, CA 90017 X (State) I declare under penalty of perjury under the laws of the State of California that the above is true and correct. Ol (Federal) I declare that I am employed in the office of a member of the bar of this court at whose direction the service was made. | Fh Si ( F Type or Print Name Signature / JUDICIAL MSC PROGRAM The Los Angeles Superior Court’s Mandatory Settiement Conference (MSC) program is free of charge and staffed by experienced sitting civil judges, who devote their time exclusively to presiding over MSCs. The judges participating in the judicial MSC program and their locations/contact information are as listed below: JUDGE JAMES R. DUNN JUDGE EDWARD A. FERNS « JUDGE ABRAHAM KHAN e JUDGE ZAVEN V. SINANIAN SSCMSCQ@LACOURT.ORG PHONE NUMBER: (213) 310-7092 Los Angeles Superior Court, Spring Street Courthouse 312 N. Spring Street, Room 204, Second Floor Los Angeles, CA 90012 This program is available in general jurisdiction cases with represented parties from independent calendar (IC) and complex cases. There is a separate dedicated program for personal injury cases assigned to Personal Injury Hubs. In order to access the Judicial MSC Program the IC or complex courtroom must order the parties to the program. The parties must complete the information requested in the Settlement Conference Intake Form (available at http:/www.lacourt.org/, under “Divisions”, “Civil”, “Settlement Programs”) and e-mail that completed form to SSCMSC@lacourt.org. If the parties have a preference for a particular MSC judge, they should so indicate on the intake form. EXHIBIT LL From: Adrian Zamora To: Tyler F. Clark Cc: sally.navarrete@ogletreedeakins.com; Freddi Lindsey; Steve Haney; Gisele Montano; Rachel Lin Subject: Re: Martinez - MSC Scheduling and Hearing Date: October 24, 2018 3:52:25 PM Tyler, The carrier said one more day opened up - Jan. 24. Adrian On Wed, Oct 24, 2018 at 3:49 PM Adrian Zamora wrote: Tyler, We have to select 3 dates for the MSC that work for both sides. The carrier and corp. rep are available Dec. 11-12, 2018, or Jan. 15-18, 22-23, 2019. The carrier will be there personally. Adrian On Wed, Oct 24, 2018 at 9:26 AM Tyler F. Clark wrote: Yes. We are good with an MSC. After we get these depos done we may be amenable to private mediation as well. Appreciate you taking the lead on this. Let me know about dates. Tyler F. Clark, Esq. Clark Employment Law, APC 16000 Ventura Blvd., Ste. 850 Encino, CA 91436 P: 818-741-2101 F: 818-561-3701 tyler@clarkemploymentlaw.com www.clarkemploymentlaw.com On Wed, Oct 24, 2018, 9:17 AM Adrian Zamora wrote: I have reached out the carrier for dates when she is available. 1 will know more later today. I recall Rachel saying Plaintiff would do an MSC. Is that still what you had in mind? If so we can file the intake paperwork once we can get some dates together. On Wed, Oct 24, 2018 at 6:56 AM Tyler F. Clark wrote: Adrian, We have an 11/6 hearing re MSC scheduling. No appearance is needed if we submit a joint statement. We need to deal with this asap. Let me know your thoughts. Thanks, Tyler Tyler F. Clark, Esq. CLARK EMPLOYMENT LAW, APC 16000 Ventura Blvd., Ste. 850 Encino, California 91436 P: 818.741.2101 F: 818.561.3701 tyler@clarkemploymentlaw.com www.clarkemploymentlaw.com NOTICE: This email is intended solely for the named recipient or the recipient's agent, and may contain legally privileged information. If you are not the named or intended recipient, please do not copy, disclose or disseminate this email or its contents, and please contact the sender as soon as possible. Thank you for your cooperation. J. Adrian Zamora Haney & Young LLP 1055 W. 7th St, Ste. 1950 Los Angeles, California 90017 Phone: (213) 228-6524 Facsimile: (213) 228-6501 Email: azamora@ haneyyoung.com CONFIDENTIALITY NOTICE: This e-mail transmission and any documents, files or previous- EXHIBIT M 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Tyler F. Clark (SBN 25830 pO Yi-Hsuan Rachel Lin (SB 632) CLARK EMPLOYMENT LAW, APC 16000 Ventura Boulevard, Suite 850 Encino, California 91436 Telephone: (818) 741-2101 CONFORMED ORIGINAL AESPY Superior Court of California County of Los Angeles NOV 20 2018 Sherr R. Carter, Executive Otticer/Clark of Court By: Kristina Vargas, Deputy SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF LOS ANGELES Facsimile: (818) 561-3701 Email: tyler@clarkemploymentlaw.com Email: rachel@clarkemploymentlaw.com Attorneys for Plaintiff Annette Martinez ANNETTE MARTINEZ, Plaintiff, Vv. HUXTABLE’S KITCHEN, INC., a Corporation; HMR FOODS HOLDING, LP, a Limited Partnership; and DOES 1-10, inclusive, Defendants. CASE NO. BC605517 [Assigned to the Hon. Stephanie Bowick, Dept. 19] NOTICE OF MANDATORY SETTLEMENT CONFERENCE Date: Tuesday, January 15, 2019 Time: 8:45 a.m. Location: ~~ Spring Street Courthouse 312 N. Spring Street, Room 204 Los Angeles, California 90012 Action Filed: Trial Date: December 31, 2015 July 23,2019 NOTICE OF MANDATORY SETTLEMENT CONFERENCE A N Ln W N 10 11 12 13 14 15 16 17 18 19 20 21 23 23 24 25 26 27 28 TO DEFENDANTS HUXTABLE’S KITCHEN, INC. AND HMR FOODS HOLDING, LP AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that a Mandatory Settlement Conference (“MSC”) in the above- referenced matter has been set for January 15, 2019, at 8:45 a.m., at the Spring Street Courthouse located at 312 N. Spring Street, Room 204, Los Angeles, California 90012. A true and correct copy of the Court’s notice of setting the MSC is attached hereto as Exhibit A. Plaintiff was ordered to give notice. Notice is hereby given. DATED: November 15, 2018 CLARK EMPLOYMENT LAW, APC By: Z rr Tyler F. Clark, Esq. Yi-Hsuan Rachel Lin, Esq. Attorneys for Plaintiff Annette Martinez -1- NOTICE OF MANDATORY SETTLEMENT CONFERENCE EXHIBIT N Case 16-11540-KJC Doc 395 Filed 11/29/18 Page 1 of 7 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE Inre Chapter 7 HMR FOODS HOLDING, LP, et al., Case No. 16-11540 (KJC) (Jointly Administered) Debtors. ! Related to D.I. 378 Hearing Date: December 18, 2018 at 10:00 a.m. Objection Deadline: November 29, 2018 at 4:00 p.m. LIMITED OBJECTION TO MOTION FOR RELIEF FROM THE AUTOMATIC STAY, TO THE EXTENT APPLICABLE, TO ALLOW PAYMENT OF DEFENSE COSTS AND OTHER LOSSES UNDER DIRECTORS AND OFFICERS INSURANCE POLICY AND REQUEST TO REIMPOSE THE AUTOMATIC STAY IN THE MARTINEZ ACTION Alfred T. Giuliano (the “Trustee”), the chapter 7 trustee for the estates of HMR Foods Holding, LP, et al. (the “Debtors”), by and through his attorneys, Fox Rothschild, LLP, hereby files this limited objection (the “Objection”) to the instant motion filed by certain former directors and officers of the Debtor (the “D&O Defendants”) for a declaration that the proceeds available to the insureds are not property of the bankruptcy estate, or in the alternative, relief from the automatic stay authorizing payment of defense expenses (the “Motion”). In addition, the Trustee requests that this Court modify its previous Order to reimpose the automatic stay as to the Martinez Action. In support thereof, the Trustee respectfully states as follows: I. INTRODUCTION The Trustee files this Limited Objection for the purpose of preserving insurance proceeds, which are deemed property of the estate. While the Trustee recognizes that the !' The Debtors in these cases, along with the last four digits of their federal tax identification numbers are (i) Huxtable’s Kitchen, Inc., a’k/a Handmade Real Foods, Pasta Kitchen, Fresh Selections (9801) (Case No. 16-11538- KJC); (ii) HMR Foods, LLC, a/k/a Handmade Real Foods, Huxtable’s Kitchen, Simmering Soup Kitchen, Pasta Kitchen, Fresh Selections (9731) (Case No. 16-11539-KJC); (iii) HMR Foods Holding, LP, a/k/a Handmade Real Foods, Huxtable’s Kitchen, Simmering Soup Kitchen, Pasta Kitchen, Fresh Selections (0818) (Case No. 16-11540- KJC); (iv) Huxtable’s Kitchen Holding Corp., a/k/a Handmade Real Foods, Simmering Soup Kitchen, Pasta Kitchen, Fresh Selections (3276) (Case No. 16-11541-KJC); and (v) Simmering Soup Kitchen, LLC, a/k/a Handmade Real Foods, Huxtable’s Kitchen, Pasta Kitchen, Fresh Selections (9554) (Case No. 16-11542-KJC). ACTIVE\79718222.v2-11/29/18 Case 16-11540-KJC Doc 395 Filed 11/29/18 Page 5 of 7 419-421. The court found that the debtor’s own liability exposure was covered by the relevant insurance policy and, therefore, the debtor has a sufficient interest in the proceeds to bring them into the estate. Id. at 419-420. Moreover, the court explained that so long as the debtor has an interest in specific property, that property is property of the bankruptcy estate and that 11 U.S.C. § 541 does not support a “moving target” approach to whether property belongs to the estate. Id. at 421.2 Here, indemnification has not yet occurred. However, the D&O Defendants still have not yet answered the Complaint filed in the Adversary Action. The Defendants have not indicated whether they will be seeking indemnification. At this juncture, it is too soon for the Court to determine whether the insurance proceeds are property of the estate. While the Trustee agrees that the Court should grant the D&O Defendants’ demand for immediate payment as to the defense costs, the Trustee urges this Court to impose a cap on defense expenses for the time being. This cap should be subject to reconsideration by the Court at a later date. In addition, the Trustee requests that within 10 days of the entry of an order approving the instant Motion, and on a quarterly basis thereafter, counsel for the D&O Defendants shall report the balance of the USSIC Policy proceeds to the undersigned counsel for the Trustee. IV. REQUEST TO STAY THE MARTINEZ CLAIM As detailed in the Motion, USSIC is currently advancing defense costs under the USSIC Policy in connection with a pre-petition lawsuit brought by Anette Martinez against the Debtors in the Superior Court of the State of California, County of Los Angeles, Case No., 8C605517 (the “Martinez Action”). On August 8, 2016, this Court entered an Order Granting Stipulation 2 The Trustee recognizes that when indemnification either has not occurred, is hypothetical, or speculative, the proceeds are not property of the bankruptcy estate. In re Allied Digital Techs. Corp., 306 B.R. 505, 512 (Bankr. D. Del. 2004). Here, however, none of the defendants in the underlying case have answered the complaint. Therefore, it cannot be said at this point whether any indemnifications claims are “hypothetical.” ACTIVE\79718222.v2-11/29/18 Case 16-11540-KJC Doc 395 Filed 11/29/18 Page 6 of 7 Regarding Limited Modification of the Automatic Stay of Section 362 (d) (the “Martinez Stay Relief Order”) [D.I. 64], permitting the Martinez action to proceed, but with any recovery limited to the extent that Ms. Martinez’s claims are covered by any insurance policies of the Debtor. This Court retained jurisdiction over any and all matters arising from or relating to the implementation or interpretation of the Martinez Stay Relief Order. The Trustee was not aware of the claims at issue in the D&O Adversary Action when the Martinez Stay Relief Order was entered by the Court. The USSIC Policy provides that the D&O Defendants’ claims and any claim of the Debtors concerning the D&O Adversary Action, are superior to the Martinez Claim. See USSIC Policy, Endorsement No. 10. Accordingly, the Trustee requests that the Martinez Stay Relief Order be modified to reimpose the automatic stay until after the D&O Adversary Action is concluded. Although it is possible that the D&O Adversary Action will exhaust the USSIC Policy, to the extent policy proceeds remain, the Martinez Action should proceed after the conclusion of the D&O Adversary Action. This space intentionally left blank. ACTIVE\79718222.v2-11/29/18 Case 16-11540-KJC Doc 395 Filed 11/29/18 Page 7 of 7 IV. CONCLUSION WHEREFORE, the Trustee respectfully requests that the Court enter an Order: A) (B) ©) (B) Dated: November 29, 2018 ACTIVE\79718222.v2-11/29/18 relief at a later date; ordering limited stay relief to permit the Movants access to insurance proceeds, but imposing a cap on defense expenses for the time being, with all parties reserving their rights to seek and/or object to additional stay ordering the D&O Defendants to report the balance of the USSIC Policy to the Trustee within 10 days of the date of the approval of this Motion and on a quarterly basis thereafter; reimposing the automatic stay with regard to the Martinez Claim until after the D&O Action is concluded; and granting such other relief as is just and proper. Respectfully submitted, FOX ROTHSCHILD LLP /s/ Seth A. Niederman Seth A. Niederman, Esquire (No. 4588) 919 N. Market Street, Suite 300 Wilmington, DE 19801 (302) 654-7444/Fax (302) 656-8920 sniederman @foxrothschild.com -and- Michael G. Menkowitz, Esquire William H. Stassen, Esquire Dana S. Katz, Esquire 2000 Market Street, 20th Floor Philadelphia, PA 19103-3222 (215) 299-2000/Fax (215) 299-2150 mmenkowitz @foxrothschild.com wstassen @foxrothschild.com dkatz @foxrothschild.com Attorneys for Alfred T. Giuliano, Chapter 7 Trustee Case 16-11540-KJC Doc 395-1 Filed 11/29/18 Page 1 of 3 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE Inre Chapter 7 HMR FOODS HOLDING, LP, et al., Case No. 16-11540 (KJC) (Jointly Administered) Debtors. CERTIFICATION OF SERVICE OF LIMITED OBJECTION TO MOTION FOR RELIEF FROM THE AUTOMATIC STAY, TO THE EXTENT APPLICABLE, TO ALLOW PAYMENT OF DEFENSE COSTS AND OTHER LOSSES UNDER DIRECTORS AND OFFICERS INSURANCE POLICY AND REQUEST TO REIMPOSE THE AUTOMATIC STAY IN THE MARTINEZ ACTION SETH A. NIEDERMAN, of full age, hereby certifies as follows: 1. I am a partner with the law firm of Fox Rothschild LLP, attorneys for Alfred T. Giuliano, the Chapter 7 Trustee in the above proceedings. 2. On November 29, 2018, I caused a true and correct copy of the Limited Objection to Motion for Relief from the Automatic Stay, to the Extent Applicable, to Allow Payment of Defense Costs and Other Losses under Directors and Officers Insurance Policy and Request to Reimpose the Automatic Stay in the Matinez Action to be served via U.S. Postal Service, First Class Mail, postage prepaid, on the parties on the attached Service List . 3. I hereby certify that the foregoing statements made by me are true. I am aware that !' The Debtors in these cases, along with the last four digits of their federal tax identification numbers are (i) Huxtable’s Kitchen, Inc., a/k/a Handmade Real Foods, Pasta Kitchen, Fresh Selections (9801) (Case No. 16-11538- KJC); (ii) HMR Foods, LLC, a/k/a Handmade Real Foods, Huxtable’s Kitchen, Simmering Soup Kitchen, Pasta Kitchen, Fresh Selections (9731) (Case No. 16-11539-KJC); (iii) HMR Foods Holding, LP, a/k/a Handmade Real Foods, Huxtable’s Kitchen, Simmering Soup Kitchen, Pasta Kitchen, Fresh Selections (0818) (Case No. 16-11540- KJC); (iv) Huxtable’s Kitchen Holding Corp., a/k/a Handmade Real Foods, Simmering Soup Kitchen, Pasta Kitchen, Fresh Selections (3276) (Case No. 16-11541-KJC); and (v) Simmering Soup Kitchen, LLC, a/k/a Handmade Real Foods, Huxtable’s Kitchen, Pasta Kitchen, Fresh Selections (9554) (Case No. 16-11542-KJC). ACTIVE\79811182.v1-11/29/18 Case 16-11540-KJC Doc 395-1 Filed 11/29/18 Page 2 of 3 if any of the foregoing statements made by me are willfully false, I am subject to punishment. FOX ROTHSCHILD LLP By: /s/ Seth A. Niederman Seth A. Niederman Delaware Bar No. 4588 919 N. Market Street, Suite 300 Wilmington, DE 19899-2323 Dated: June 25, 2018 (302) 654-7444/Fax (302) 656-8920 sniederman @foxrothschild.com ACTIVE\79811182.v1-11/29/18 Case 16-11540-KJC Alfred Thomas Giuliano, Chapter 7 Trustee Giuliano Miller & Co., LLC Berlin Business Park 140 Bradford Drive West Berlin, NJ 08091 Curtis S. Miller, Esq. Matthew O. Talmo, Esq. Morris Nichols, Arscht & Tunnell LLP 1201 North Market Street, 16™ Floor P.O. Box 1347 Wilmington, DE 19899-9200 Mark D. Oliver, Esq. Chipmand Brown Cicero & Cole, LLP Hercules Plaza 1313 North Market Street, Suite 5400 Wilmington, DE 19801 ACTIVE\79811182.v1-11/29/18 Doc 395-1 Filed 11/29/18 SERVICE LIST Benjamin A. Hackman, Esq. Office of the United States Trustee J. Caleb Boggs Federal Building 844 King Street Suite 2207 - Lockbox 35 Wilmington, DE 19801 James P. Gillespie, Esq. Kirkland & Ellis LLP 655 Fifteenth Street, N.W. Washington, DC 20005-5793 Tyler F. Clark, Esq. Clark Employment Law, APC 16000 Venutra Blvd., Ste. 850 Encino, CA 91436 Page 3 of 3 Jennifer R. Hoover, Esq. Stephen M. Ferguson, Esq. Kevin M. Capuzzi, Esq. Benesch Friedlander, Coplan & Aronoff, LLP 222 Delaware Avenue, Suite 801 Wilmington, DE 19801 Brad Weiland, Esq. Kirkland & Ellis LLP 300 North LaSalle Chicago, IL 60654 EXHIBIT O Case 16-11540-KJC Doc 449 Filed 12/18/18 pRagerl of 1 UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE PDF FILE WITH AUDIO FILE ATTACHMENT 2016-11540 HMR Foods Holding, LP Case Type : bk Case Number : 2016-11540 Case Title : HMR Foods Holding, LP Audio Date\Time: 12/18/2018 9:58:01 AM Audio File Name : 1bk2016-11540 20181218-095801.mp3 Audio File Size : 13628 KB Audio Run Time : [00:32:27] (hh:mm:ss) Help using this file: An audio file is embedded as an attachment in this PDF document. To listen to the file, click the Attachments tab or the Paper Clip icon. Select the Audio File and click Open. MPEG Layer-3 audio coding technology from Fraunhofer IIS and Thomson. This digital recording is a copy of a court proceeding and is provided as a convenience to the public. In accordance with 28 U.S.C. § 753 (b) "[n Jo transcripts of the proceedings of the court shall be considered as official except those made from the records certified by the reporter or other individual designated to produce the record." EXHIBIT P Case 16-11540-KJC Doc 447 Filed 12/18/18 Page 1 of 3 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE Chapter 7 In re Case No. 16-11540 (KJC) HMR FOODS HOLDING, LP, et. dl, (Jointly Administered) Debtors. RE D.I. 378 ORDER GRANTING MOTION OF FORMER DIRECTORS AND OFFICERS, OF HMR FOODS HOLDING, LP, FOR RELIEF FROM THE AUTOMATIC STAY, TO THE EXTENT APPLICABLE, TO ALLOW PAYMENT OF DEFENSE COSTS AND OTHER LOSSES UNDER DIRECTORS AND OFFICERS INSURANCE POLICY Upon the motion (the “Motion”! of Alex Bernstein, Geoffrey Bickham, Michelle Brooks, John Dutton, Joe Rainert, Andrew Foster, Lewis MacLeod, Perry Morgan, Jeff Nerland, Alex Santos and Daniel Weiner (collectively, the “Movants”) for entry of an order (a) confirming that the proceeds payable to Movants under the USSIC Policy are not property of the Debtors’ estates subject to the automatic stay under 11 U.S.C. § 362(a); or (b) granting relief from or modifying the automatic stay under 11 U.S.C. § 362(d)(1), to the extent that it may be applicable, to allow USSIC to make payments or advancements of defense costs or other losses to Movants, consistent with the terms and conditions of the USSIC Policy; and it appearing that due and sufficient notice of the Motion has been given; and no other or further notice need be provided; and the Court having considered the Motion and any objections or responses thereto; and after due deliberation and sufficient cause appearing therefore, IT IS HEREBY ORDERED that 1. The Motion is granted as set forth herein. 2. The automatic stay imposed under section 362(a) of the Bankruptcy Code ' Capitalized terms used but not otherwise defined herein shall have the meaning ascribed to them in the Motion. Case 16-11540-KJC Doc 447 Filed 12/18/18 Page 2 of 3 does not apply, or, to the extent it does apply, it is lifted and modified to allow USSIC to make payments or advancements in accordance with the terms and conditions of the USSIC Policy. ~—3— Any payment or advancement-made by USSIC under the USSIC Policy ——shall-net-be-considered property of the Debtors estates. 4, The automatic stay imposed under section 362(a) of the Bankruptcy Code shall not subject USSIC to liability for advancing any payment in connection with past, present, and/or future defense costs and other losses incurred by any Movant with respect to the Trustee Lawsuit or any other action or Claim covered by the USSIC Policy, subject to USSIC’s reservation of rights. = Nothing in this Order modifies the terms and conditions of the USSIC Policy, including, but not limited to, the payment of priority provisions. All parties shall reserve their rights under the USSIC Policy. 6. Following entry of this Order and until further order of the Court, counsel for the Movants shall, on a quarterly basis, provide written notice (the “Notice™) to the Trustee of (x) the total aggregate dollar amount billed to USSIC for payment and (y) the total aggregate dollar amount of proceeds actually paid to the Movants or on behalf of the Movants under the USSIC Policy. The Notice will provide the total aggregate dollar amount of defense costs and other losses (including attorneys’ fees, costs, and expenses) billed to and paid by USSIC under the USSIC Policy. The Notice is intended to allow the Trustee to monitor defense costs and other losses billed to, as well as paid out, by USSIC under the USSIC Policy. The Notice shall not include any requirement that the Movants or their respective counsel disclose to the Trustee, their counsel or anyone else any information or documents protected by the attorney-client privilege, work product doctrine, or any other applicable privileges or confidentialities Case 16-11540-KJC Doc 447 Filed 12/18/18 Page 3 of 3 (including, without limitation, any description of work, billing statements, or time entries). All such privileges and confidentialities are hereby deemed expressly preserved. 1. The Court shall retain jurisdiction with respect to all matters arising from or related to the implementation or interpretation of this Order. i ~~ < { Dated: Deg 1 ,2018 Re rm Wilmington, Delaware THE HONORABLE KEVIN J. CAREY UNITED STATES BANKRUPTCY JUDGE AN nn Bx W N 10 11 12 13 14 13 16 17 18 19 20 21 22 23 24 23 26 27 28 PROOF OF SERVICE I am employed in the County of Los Angeles, State of California. I am over the age of 18 years and am not a party to the within action. My business address is 16000 Ventura Boulevard, Suite 850, Encino, California 91436. On February 14, 2019, I served the foregoing document(s) described as DECLARATION OF YI-HSUAN RACHEL LIN ISO PLAINTIFF ANNETTE MARTINEZ’S OPPOSITION TO DEFENDANTS’ MOTION TO STAY THE CIVIL ACTION; EXHIBITS A-P on the interested parties in this action by placing a true copy thereof enclosed in a sealed envelope and addressed as follows: Steven H. Haney, Esq. Attorneys for Defendants Huxtable’s J. Adrian Zamora, Esq. Kitchen, Inc. and HMR Foods HANEY & YOUNG LLP Holding, LP 1055 W. Seventh Street, Suite 1950 Los Angeles, CA 90017 E-mail: shaney@haneyyoung.com _ BY MAIL I deposited such envelope with the U.S. Postal Service in Encino, California with postage thereon fully prepaid. I am aware that on motion of a party served, service is presumed invalid if the postal cancellation date or the postage meter date is more than one (1) day after the date of deposit for mailing in this affidavit. _X_ BY OVERNIGHT DELIVERY I deposited such envelope and consigning it to an express mail or overnight courier for guaranteed delivery on the next business day following the date of consignment to the address(es) set forth above. _X_ BY ELECTRONIC SERVICE I am readily familiar with this Firm’s practice for filing electronically. Pursuant to California Rules of Court, rule 2.251 and the agreement by the parties, I caused a copy of the above- described document(s) to be uploaded to One Legal, LLC, an electronic filing service provider, for electronic service on the above-referenced electronic service address(es) on the same day this proof of service was executed in the ordinary course of business following the ordinary business practices. _ BY PERSONAL SERVICE I delivered such envelope by hand to the addressee(s) set forth above. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on February 14, 2019, at Encino, California. ~
