430611248 OPPOSITION TO DEMURRER TO FIRST AMENDED CROSS COMPLAINT [FINAL SIGNED 7.12.2012] (Merkel)
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JUSTIN H. SANDERS (SBN 211488) [email protected] REGINALD ROBERTS, JR. (SBN 216249) [email protected] SANDERS ROBERTS LLP 355 South Grand Avenue, Suite 2450 Los Angeles, California 90071 Telephone: 213-943-1314 Facsimile: 213-234-4581 Attorneys for Defendant (sued herein as DOE 2) CATHERINE MINI MERKEL
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SUPERIOR COURT OF THE STATE OF CALIFORNIA
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FOR THE COUNTY OF LOS ANGELES
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JAION LARON CLARK, a Minor, by and ) Case No.: BC451511 through his Guardian ad Litem, SHARNELL ) THOMPSON, ) Judge: Hon. Mary H. Strobel ) ) DEFENDANT CATHERINE MINI Plaintiffs, ) MERKEL’S OPPOSITION TO VENUE ) MANAGEMENT SYSTEMS, INC.’S vs. ) DEMURRER TO UNVERIFIED FIRST TOP CAT PRODUCTIONS, INC.; LT ) AMENDED CROSS-COMPLAINT OF ACQUISITION CORP.; THE DERBY CLUB ) CATHERINE MINI MERKEL; aka THE DERBY; RINGLEADERZ ) MEMORANDUM OF POINTS AND ENTERTAINMENT; TONY GOWER; ) AUTHORITIES DANA LEONARDI, and DOES 1 to 200, ) Inclusive, ) Date: July 25, 2012 ) Time: 8:30 a.m. Defendants. ) Dept.: 32 CATHERINE MINI MERKEL, ) December 16, 2010 ) Complaint filed: Trial Date: None Set Ms. Merkel, ) ) vs. ) ) VENUE MANAGEMENT SERVICES, AKA ) VENUE MANAGEMENT SYSTEMS, INC., ) a California Corporation; TOP CAT ) PRODUCTIONS, INC. a California ) Corporation, also doing business as THE ) DERBY CLUB aka THE DERBY; DANA ) LEONARDI, an individual; and ROES 1-50, ) inclusive, ) ) Cross-Defendants. ) ) AND RELATED CROSS-ACTIONS. ) )
28 - 1DEFENDANT CATHERINE MINI MERKEL’S OPPOSITION TO VENUE MANAGEMENT SYSTEMS, INC.’S DEMURRER TO UNVERIFIED FIRST AMENDED CROSS-COMPLAINT OF CATHERINE MINI MERKEL
MEMORANDUM OF POINTS AND AUTHORITIES
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I.
INTRODUCTION Plaintiff’s filed this action following the shooting death of Jeffrey Clark. An unidentified
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person while inside The Derby nightclub shot Mr. Clark on October 14, 2010. Plaintiff’s
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Complaint alleges causes of action for negligence, negligent retention, survival and fraudulent
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conveyance. Nearly three years after filling its Complaint, Plaintiff added Defendant and Cross-
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Complainant Katherine “Mini” Merkel (“Ms. Merkel”) as a DOE defendant, even though Ms.
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Merkel was not present when the shooting occurred. Since this time, Defendant and Cross-
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Defendant Venue Management Systems, Inc. (“VMS”) has refused to defend and indemnify its
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employee, Ms. Merkel, from Plaintiff’s claims.
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Ms. Merkel was employed by Cross-Defendants VMS, Cross-Defendant Dana Leonardi
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(“Leonardi”) , Cross-Defendant Top Cat Productions, Inc. (“Top Cat”) and Cross-Defendant the
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Derby Club aka The Derby (“The Derby”) as one of several managers of the Derby. Ms. Merkel
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was required to complete an application for employment with Cross-Defendant VMS in order to
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provide or continue to provide management services at the Derby. Cross-Defendant VMS paid
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Ms. Merkel at all times relevant herein.
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Ms. Merkel performed management services for the Derby but was required to and did
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report to her superiors at Cross-Defendant VMS, specifically Charles McIntyre, for all personnel
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issues including employee discipline, employee applicants, background screenings, training of
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all security staff, hiring decisions, termination issues, employee complaints regarding conduct of
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co-workers and other personnel matters. Ms. Merkel did not have authority to resolve these and
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other types of employment personnel matters without the knowledge, approval and direction
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from Cross-Defendant VMS.
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Deposition testimony also confirmed Ms. Markel’s allegations against VMS that VMS
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exercised control over the security staff of the Derby by performing criminal background checks
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on security staff and applicants and by implementing security policy and procedure that security
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personnel at the derby were required to follow.
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Ms. Merkel tendered her defense of this matter to Cross-Defendants Top Cat, Leonardi, - 2DEFENDANT CATHERINE MINI MERKEL’S OPPOSITION TO VENUE MANAGEMENT SYSTEMS, INC.’S DEMURRER TO UNVERIFIED FIRST AMENDED CROSS-COMPLAINT OF CATHERINE MINI MERKEL
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the Derby, and VMS and each of them have failed to accept or reject the tender and have refused
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to provide Ms. Merkel with any legal defense against Plaintiff’s allegations.
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Ms. Merkel filed her First Amended Cross Complaint (“FAXC”) and alleged claims
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against Cross-Defendant VMS, and others, for; 1. Express Contractual Indemnity; 2. Implied
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Contractual Indemnity; 3. Equitable Indemnity; 4. Declaratory Relief; and 5. Breach Of Implied
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Covenant Of Good Faith And Fair Dealing.
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Cross-Defendant Leonardi testified at deposition that he engaged Cross-Defendant VMS
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to provide payroll and security services and to insure Ms. Merkel, Leonardi, Top Cat and the
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Derby and its employees. Cross-Defendant VMS charged insurance premiums and Cross-
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Defendants Top Cat, Leonardi and the Derby paid the required premiums to cover the period of
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time that included the night of the incident. The insurance acquired by Cross-Defendants Top
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Cat, Leonardi and the Derby from Cross-Defendant VMS was intended to and did provide Ms.
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Merkel and others working at the Derby with insurance coverage for maters that include personal
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injury and premises liability actions such as the underlying civil action filed by Plaintiff herein
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(“Action”).1
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VMS demurred to Ms. Merkel’s First Amended Cross-Complaint in order to impose an
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additional financial and emotional burden on her with hopes that she will give up her fight for
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indemnification. Ms. Merkel now opposes the Demurrer.
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VMS also mandated that security staff at the Derby obtain “guard cards” or other security certificates required solely by VMS. Cross-Defendant VMS also exercised control over security hiring and firing decisions and in fact caused security staff to be terminated for failing security background standards set by VMS. Cross-Defendant VMS employed all persons providing employment services at the Derby at all times relevant herein and leased these employees to Cross-Defendants, Leonardi, Top Cat and the Derby. All of these facts support Ms. Merkel’s Cross-Complaint against Defendant VMS. - 3DEFENDANT CATHERINE MINI MERKEL’S OPPOSITION TO VENUE MANAGEMENT SYSTEMS, INC.’S DEMURRER TO UNVERIFIED FIRST AMENDED CROSS-COMPLAINT OF CATHERINE MINI MERKEL
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II.
MS. MERKEL PLEAD SUFFICIENT FACTS TO SATISFY PLEADING
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STANDARDS
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“[A cross-complainant] is required only to set forth the essential facts of his case with
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reasonable precision and with particularity sufficient to acquaint a defendant with the nature,
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source and extent of his cause of action.” Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550.
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In addition, California courts uphold routinely the pleading standard that when reviewing the
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sufficiency of a complaint against a general demurrer, the court treats the demurrer as admitting
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all material facts properly pleaded. Berg & Berg Enterprises, LLC v. Boyle (2009) 178
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Cal.App.4th 1020, 1034.
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Ms. Merkel pleads facts necessary to maintain each of her claims against Cross-
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Defendant VMS. Indeed, since the time of her pleadings, which must be accepted as true,
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evidence, in the form of deposition testimony was offered to confirm that Cross-Defendant
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Leonardi engaged the services of VMS in order to obtain insurance coverage for Ms. Merkel and
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others. (FAXC ¶ 12.) The facts plead by Ms. Merkel constitute more than just contentions or
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conclusory statements of fact or law. Ms. Merkel plead, in her FAXC, facts material to each
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claim alleged against Cross-Defendant VMS. Ms. Merkel’s pleadings put Cross-Defendant
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VMS on notice of the claims pending against it. Accordingly, Ms. Merkel opposes the Demurrer
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to her FAXC.
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Even if the Court sustains the Demurrer, which it should not, California Code of Civil
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Procedure section 472 et seq. suggests that the Court should grant leave to amend the pleading
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based upon any terms that may be just. Where a failure to permit amendment results in the
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denial of a party’s right to assert an otherwise meritorious claim, such denial amounts to an
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abuse of discretion. See Morgan v Superior Court (1959) 172 CA2d 527, 530.
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III.
MS. MERKEL PLEAD SUFFICIENT FACTS TO SUPPORT HER CLAIMS
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AGAINST CROSS-DEFENDANT VMS FOR EXPRESS AND IMPLIED
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CONTRACTUAL INDEMNITY
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Ms. Merkel plead that “Cross-Defendant Top Cat, by and through Cross-Defendant
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Leonardi, engaged Cross-Defendant VMS to provide payroll and security services and to insure - 4DEFENDANT CATHERINE MINI MERKEL’S OPPOSITION TO VENUE MANAGEMENT SYSTEMS, INC.’S DEMURRER TO UNVERIFIED FIRST AMENDED CROSS-COMPLAINT OF CATHERINE MINI MERKEL
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Cross-Complainant, Leonardi, Top Cat and the Derby and its employees.” (Emphasis
2
added)(FAXC ¶ 12.) She alleged further that “[t]he insurance acquired by Cross-Defendants Top
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Cat, Leonardi and the Derby from Cross-Defendant VMS was intended to and did provide [Ms.
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Merkel] and others working at the Derby with insurance coverage for maters that include
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personal injury and premises liability actions such as the underlying civil action filed by Plaintiff
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herein.” Id. These facts must be accepted as true and they satisfy the existence of an insurance
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policy obtained for the express purpose of insuring Ms. Merkel against claims such as those
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alleged by Plaintiff herein.
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Moreover, evidence of the intent of both contracting parties (not merely the named
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insured) is relevant and admissible to determine whether an insurance contract entitled a third
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party to a defense. Garcia v. Truck Insurance Exchange (1984) 36 Cal.3d 426, 437. Ms. Merkel
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alleges, and Cross-Defendant Leonardi confirmed at deposition, that he contracted with VMS for
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the express purpose of obtaining liability insurance for Ms. Merkel. (FAXC ¶ 12.) At the
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pleading stage, these claims support Ms. Merkel’s causes of action for express and implied
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contractual indemnity.
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Furthermore, Cross-Defendant VMS was in possession of the insurance policy at issue at
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the time of the pleading. Under these circumstances, Plaintiff pleads this and other causes of
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action in the FAXC with sufficient particularity to survive Cross-Defendant VMS’s Demurrer.
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See Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550. If this Court is inclined to grant
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VMS’s Demurrer to this cause of action, Plaintiff’s can cure any defects through amendment and
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hereby request such leave.2 See Stevens v. Superior Court (1999) 75 Cal.App.4th 594, 601.
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Moreover, Ms. Merkel alleged that the insurance agreement required VMS to indemnify
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her (FAXC ¶¶ 12, 22, 23, 24, 32-37) but that VMS failed to defend and indemnify her in this
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action even after she tendered her defense to VMS. (FAXC ¶ 24.) She alleged also that she
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suffered, and continues to suffer damages as a result of VMS’s failure to defend or indemnify
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Ms. Merkel now possesses the Client Services Agreement at issue. If required by the Court, Ms. Merkel can amend the FAXC to allege the express terms of the “Indemnification” provision of the contract which provides that “VMS agrees to indemnify, hold harmless, protect and defend CLIENT, and all of CLIENTS…employees from all claims, out-of-pocket expenses, reasonable attorney’s fees and court costs, damages (including compensatory and punitive damages) and liabilities…” - 5DEFENDANT CATHERINE MINI MERKEL’S OPPOSITION TO VENUE MANAGEMENT SYSTEMS, INC.’S DEMURRER TO UNVERIFIED FIRST AMENDED CROSS-COMPLAINT OF CATHERINE MINI MERKEL
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her. (FAXC ¶ 52.) These facts, when taken collectively, demonstrate that Ms. Merkel has been
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compelled to pay to defend herself, and that she faces the prospect of paying damages that
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should be paid by Cross-Defendant VMS. Such allegations satisfy pleading requirements for a
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claim of express or implied indemnity. See Bush v. Superior Court (1992) 10 Cal.App.4th 1374,
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1380.
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Based on the foregoing, Ms. Merkel urges this Court respectfully to overrule Cross-
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Defendant VMS’s Demurrer to her First Amended Cross Complaint. However, if the Court is
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inclined to sustain the Demurrer, Ms. Merkel request leave to amend her pleading.
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IV.
MS. MERKEL PLEAD SUFFICIENT FACTS TO SUPPORT HER CAUSE OF
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ACTION FOR EQUITABLE INDEMNITY AGAINST CROSS-DEFENDANT
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VMS
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By filing a demurrer to Ms. Merkel’s FAXC, Cross-Defendant VMS seeks to escape
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responsibility for insuring Ms. Merkel against Plaintiff’s claims. “The right to equitable
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indemnity arises from the principle that an individual who has paid damages which ought to have
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been paid by another wrongdoer may recover from that wrongdoer.” Sullins v. Exxon/Mobil
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Corp. (2010) 729 F.Supp.2d 1129, 1139. “The purpose of equitable indemnification is to avoid
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the unfairness, under joint and several liability theory, of holding one defendant liable for the
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plaintiff’s entire loss while allowing another responsible defendant to escape “ ‘scot free.’ “
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Gem Developers v. Hallcraft Homes of San Diego, Inc. (1989) 213 Cal.App.3d 419, 426. “Joint and several liability in the context of equitable indemnity is fairly expansive.”
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BFGC Architects Planners, Inc. v. Forcum/Mackey Construction, Inc. (2004) 119 Cal.App.4th
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848, 852. Construction of equitable indemnity “extends beyond the term ‘joint tortfeasor’ and
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may apply to acts that are concurrent or successive, joint or several, as long as they create a
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detriment caused by several actors.” Prince v. Pacific Gas & Elec. Co. (2009) 45 Cal.4th 1151,
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1158.
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Here, Ms. Merkel and Plaintiff allege that Cross-Defendant VMS was in charge of
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security, training of security personnel, hiring, firing and licensing requirements for security at a
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venue where a person was shot. (FAXC ¶¶ 9, 12, 16, 17.) Despite this, VMS cites Munoz v - 6DEFENDANT CATHERINE MINI MERKEL’S OPPOSITION TO VENUE MANAGEMENT SYSTEMS, INC.’S DEMURRER TO UNVERIFIED FIRST AMENDED CROSS-COMPLAINT OF CATHERINE MINI MERKEL
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Davis (1983) 141 Cal.App.3d 420, 425, in support of its argument that Ms. Merkel cannot allege
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an equitable indemnity claims against VMS unless there is some basis for tort liability against
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VMS. (See Demurrer to FAXC, p. 5:24-26.) Seemingly, VMS urges this Court to ignore the
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facts alleged in both the FAXC and in Plaintiff’s operative pleading to reach a conclusion that
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Ms. Merkel cannot maintain a cause of action against it for equitable indemnity. Ms. Merkel
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pleads ample facts to support a claim for tort liability against VMS. In addition, Plaintiff alleges
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numerous facts against VMS that may give rise to tort liability.
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VMS is jointly and severally liable for the claims at issue herein and Ms. Merkel pleads properly a claim against it for equitable indemnity. Accordingly, this Court must overrule
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VMS’s Demurrer to this cause of action.
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V.
MS. MERKEL PLEAD FACTS THAT ESTABLISH AN ACTUAL
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CONTROVERSY WITH VMS THAT REQUIRES A DETERMINATION OF
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VMS’S DUTIES TO HER
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The fundamental basis of declaratory relief is the existence of an actual, present
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controversy over a proper subject. City of Cotati v. Cashman (2002) 29 Cal.4th 69, 79. VMS’s
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contention that Ms. Merkel did not plead facts to demonstrate that a controversy exists between
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Ms. Merkel and VMS does not pass the “straight face” test. This argument is not well taken and
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suggests that VMS filed this Demurrer for the sole purpose of creating added expenses for Ms.
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Merkel with the hope that she will give up her effort to receive the protection from VMS to
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which she is entitled.
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Ms. Merkel pleads that Cross-Defendant VMS employed her, that it is required to defend
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her against the claims raised by Plaintiff in the Action, and that Cross-Defendants Leonardi and
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Top Cat contracted with VMS for the express purpose of insuring Ms. Merkel and others
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working at the Derby. VMS refuses to provide a defense for Ms. Merkel and denies its
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obligation to indemnify her against Plaintiff’s claims. This amounts to an actual controversy that
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requires a determination of VMS’s obligations to Ms. Merkel and others. (See FAXC ¶¶ 9, 13,
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14, 48.)
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Furthermore, Plaintiff’s claim that VMS owed duties to the decedent, along with several - 7DEFENDANT CATHERINE MINI MERKEL’S OPPOSITION TO VENUE MANAGEMENT SYSTEMS, INC.’S DEMURRER TO UNVERIFIED FIRST AMENDED CROSS-COMPLAINT OF CATHERINE MINI MERKEL
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named defendants. Plaintiff’s claims provide additional support Ms. Merkel’s contention that a
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declaration of interests and responsibilities must occur and that those interests necessarily
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include the controversy that exists between Ms. Merkel and VMS.
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Based on the foregoing, the Court must overrule VMS’s Demurrer to the First Amended Cross Complaint of Ms. Merkel.
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VI.
MS. MERKEL SATISFIED PLEADING REQUIREMENTS FOR HER EXPRESS
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CONTRACTUAL INDEMNITY CLAIM AND HER FIFTH CAUSE OF ACTION
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REMAINS VALID
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An insurer’s refusal to defend can support a claim in tort by the insured for breach of the
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implied covenant of good faith and fair dealing. Campbell v. Superior Court (1996) 44
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Cal.App.4th 1308, 1319. When analyzing this issue, the court in Campbell reasoned:
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“[I]t is undeniable that insurance is purchased to provide the peace of mind and
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security that comes from knowing that if the insured contingency arises, the
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insurer will defend against the claim. Stated another way, one of the primary
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benefits of an insurance policy is that the insured can expect the insurer to defend
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against third-party claims. It therefore follows that if an insurer unreasonably fails
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to defend, it has breached the implied covenant of good faith and fair dealing.”
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Campbell v. Superior Court (1996) 44 Cal.App.4th 1308, 1319 (holding that insurers failure to
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defend and indemnify supported a cause of action for breach of implied covenant of good faith
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and fair dealing.)
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In this case, Ms. Merkel pleads that Cross-Defendant VMS had both an express and
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implied contractual duty to defend her from Plaintiff’s claims. She alleges particular facts
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supporting her contention that VMS employed her and owes her a duty to defend and indemnify
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her through the employment relationship, and that Cross-Defendants Leonardi and Top Cat
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contracted with VMS for the express purpose of obtaining insurance for Ms. Merkel and others.
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Ms. Merkel alleges further that Cross-Defendant refuses to defend her in this case and will not
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indemnify her from any liability based on Plaintiff’s claims in spite of the express contractual - 8DEFENDANT CATHERINE MINI MERKEL’S OPPOSITION TO VENUE MANAGEMENT SYSTEMS, INC.’S DEMURRER TO UNVERIFIED FIRST AMENDED CROSS-COMPLAINT OF CATHERINE MINI MERKEL
SERVICE LIST
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Jaion Laron Clark v. Top Cat Prod., etc., et al.; L.A.S.C. Case No. BC451511
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VIA EMAIL:
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Frank C. Luckenbacher, Esq. Attorney for Plaintiff, Jaion Laron Clark LAW OFFICES OF FRANK C. LUCKENBACHER 22048 Sherman Way, Suite 304 Canoga Park, CA 91303-3011 Tel: (818) 932-9000 | Fax: (818) 226-0022
Email: [email protected] Wayne McClean, Esq. LAW OFFICES OF WAYNE MCCLEAN 24025 Park Sorrento, Suite 220 Calabasas, CA 91302-4006 Tel: (818) 225-7007 | Fax: (818) 225-7557 Email: [email protected]
Co-Counsel for Plaintiff Jaion Laron Clark, a minor by and through his Guardian ad Litem, Sharnell Thompson
Lisa Shyer, Esq. Wisotskey, Procter & Shyer 300 Esplanade Drive, Ste 1500 Oxnard, CA 93036 Tel: (805) 278-0920 | Fax: (805) 278-0289 Email: [email protected]
Co-Counsel for Defendant LT Acquisition Corp., dba Louise’s Trattoria
Attorneys for Defendant Venue Management Systems, Inc.
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Raymond J. Muro, Esq. NELSON GRIFFIN, LLP 800 W. 6th St., Suite 788 Los Angeles, CA 90017
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Email: [email protected]
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Tel:
(213) 833-0155 | Fax: (213) 833-0160
Stanley R. Escalante, Esq. P.K. SCHRIEFFER, LLP 100 North Barranca Ave, Suite 1100 West Covina, California 91791 Tel: (626) 373-2444 | Fax: (626) 974-8403 Email: [email protected]
Cumis Counsel for Venue Management Systems, Inc.
Mark R. Stapke, Esq. Michelman & Robinson, LLP 15760 Ventura Blvd., 5th Floor Encino, California 91436 Tel: (818) 783-5530 | Fax: (818) 783-5507 Email: [email protected]
Attorneys for Defendant Top Cat Productions, Inc.
Mark D. Baute, Esq. SAUTE CROCHETIERE & MALONEY 777 S. Figueroa St., Suite 4900 Los Angeles, CA 90017 Tel: (213) 630-5000 | Fax: (213)683-1225 Email: [email protected]
Attorneys for Defendant Tony Gower
27 28 PROOF OF SERVICE
Jaion Laron Clark v. Top Cat Prod., etc., et al.; L.A.S.C. Case No. BC451511
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Dana Leonardi 15059 Ridgeview Court Chino Rills, CA 91700 Email: [email protected] Tel: (909) 455-2990
Defendant In Pro Per
VIA U.S. MAIL:
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Christina Y. Morovati, Esq. BRAGG & KULUVA 444 S. Flower Street, Suite 600 Los Angeles, California 90071 Tel: (213) 612-5335 | Fax: (213) 612-5712 WATERS, McCLUSKEY & BOEHL 200 N. Sepulveda Blvd., Suite 300 El Segundo, CA 90245 Phone: 310-396-3411 | Fax: 310-450-0925
Attorneys for Defendant/Cross-Defendant, Adler Realty Investments, Inc.
Attorneys for Defendant/Cross-Defendant, Adler Realty Investments, Inc.
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE
JUSTIN H. SANDERS (SBN 211488) [email protected] REGINALD ROBERTS, JR. (SBN 216249) [email protected] SANDERS ROBERTS LLP 355 South Grand Avenue, Suite 2450 Los Angeles, California 90071 Telephone: 213-943-1314 Facsimile: 213-234-4581 Attorneys for Defendant (sued herein as DOE 2) CATHERINE MINI MERKEL
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SUPERIOR COURT OF THE STATE OF CALIFORNIA
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FOR THE COUNTY OF LOS ANGELES
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JAION LARON CLARK, a Minor, by and ) Case No.: BC451511 through his Guardian ad Litem, SHARNELL ) THOMPSON, ) Judge: Hon. Mary H. Strobel ) ) DEFENDANT CATHERINE MINI Plaintiffs, ) MERKEL’S OPPOSITION TO VENUE ) MANAGEMENT SYSTEMS, INC.’S vs. ) DEMURRER TO UNVERIFIED FIRST TOP CAT PRODUCTIONS, INC.; LT ) AMENDED CROSS-COMPLAINT OF ACQUISITION CORP.; THE DERBY CLUB ) CATHERINE MINI MERKEL; aka THE DERBY; RINGLEADERZ ) MEMORANDUM OF POINTS AND ENTERTAINMENT; TONY GOWER; ) AUTHORITIES DANA LEONARDI, and DOES 1 to 200, ) Inclusive, ) Date: July 25, 2012 ) Time: 8:30 a.m. Defendants. ) Dept.: 32 CATHERINE MINI MERKEL, ) December 16, 2010 ) Complaint filed: Trial Date: None Set Ms. Merkel, ) ) vs. ) ) VENUE MANAGEMENT SERVICES, AKA ) VENUE MANAGEMENT SYSTEMS, INC., ) a California Corporation; TOP CAT ) PRODUCTIONS, INC. a California ) Corporation, also doing business as THE ) DERBY CLUB aka THE DERBY; DANA ) LEONARDI, an individual; and ROES 1-50, ) inclusive, ) ) Cross-Defendants. ) ) AND RELATED CROSS-ACTIONS. ) )
28 - 1DEFENDANT CATHERINE MINI MERKEL’S OPPOSITION TO VENUE MANAGEMENT SYSTEMS, INC.’S DEMURRER TO UNVERIFIED FIRST AMENDED CROSS-COMPLAINT OF CATHERINE MINI MERKEL
MEMORANDUM OF POINTS AND AUTHORITIES
1 2 3
I.
INTRODUCTION Plaintiff’s filed this action following the shooting death of Jeffrey Clark. An unidentified
4
person while inside The Derby nightclub shot Mr. Clark on October 14, 2010. Plaintiff’s
5
Complaint alleges causes of action for negligence, negligent retention, survival and fraudulent
6
conveyance. Nearly three years after filling its Complaint, Plaintiff added Defendant and Cross-
7
Complainant Katherine “Mini” Merkel (“Ms. Merkel”) as a DOE defendant, even though Ms.
8
Merkel was not present when the shooting occurred. Since this time, Defendant and Cross-
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Defendant Venue Management Systems, Inc. (“VMS”) has refused to defend and indemnify its
10
employee, Ms. Merkel, from Plaintiff’s claims.
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Ms. Merkel was employed by Cross-Defendants VMS, Cross-Defendant Dana Leonardi
12
(“Leonardi”) , Cross-Defendant Top Cat Productions, Inc. (“Top Cat”) and Cross-Defendant the
13
Derby Club aka The Derby (“The Derby”) as one of several managers of the Derby. Ms. Merkel
14
was required to complete an application for employment with Cross-Defendant VMS in order to
15
provide or continue to provide management services at the Derby. Cross-Defendant VMS paid
16
Ms. Merkel at all times relevant herein.
17
Ms. Merkel performed management services for the Derby but was required to and did
18
report to her superiors at Cross-Defendant VMS, specifically Charles McIntyre, for all personnel
19
issues including employee discipline, employee applicants, background screenings, training of
20
all security staff, hiring decisions, termination issues, employee complaints regarding conduct of
21
co-workers and other personnel matters. Ms. Merkel did not have authority to resolve these and
22
other types of employment personnel matters without the knowledge, approval and direction
23
from Cross-Defendant VMS.
24
Deposition testimony also confirmed Ms. Markel’s allegations against VMS that VMS
25
exercised control over the security staff of the Derby by performing criminal background checks
26
on security staff and applicants and by implementing security policy and procedure that security
27
personnel at the derby were required to follow.
28
Ms. Merkel tendered her defense of this matter to Cross-Defendants Top Cat, Leonardi, - 2DEFENDANT CATHERINE MINI MERKEL’S OPPOSITION TO VENUE MANAGEMENT SYSTEMS, INC.’S DEMURRER TO UNVERIFIED FIRST AMENDED CROSS-COMPLAINT OF CATHERINE MINI MERKEL
1
the Derby, and VMS and each of them have failed to accept or reject the tender and have refused
2
to provide Ms. Merkel with any legal defense against Plaintiff’s allegations.
3
Ms. Merkel filed her First Amended Cross Complaint (“FAXC”) and alleged claims
4
against Cross-Defendant VMS, and others, for; 1. Express Contractual Indemnity; 2. Implied
5
Contractual Indemnity; 3. Equitable Indemnity; 4. Declaratory Relief; and 5. Breach Of Implied
6
Covenant Of Good Faith And Fair Dealing.
7
Cross-Defendant Leonardi testified at deposition that he engaged Cross-Defendant VMS
8
to provide payroll and security services and to insure Ms. Merkel, Leonardi, Top Cat and the
9
Derby and its employees. Cross-Defendant VMS charged insurance premiums and Cross-
10
Defendants Top Cat, Leonardi and the Derby paid the required premiums to cover the period of
11
time that included the night of the incident. The insurance acquired by Cross-Defendants Top
12
Cat, Leonardi and the Derby from Cross-Defendant VMS was intended to and did provide Ms.
13
Merkel and others working at the Derby with insurance coverage for maters that include personal
14
injury and premises liability actions such as the underlying civil action filed by Plaintiff herein
15
(“Action”).1
16
VMS demurred to Ms. Merkel’s First Amended Cross-Complaint in order to impose an
17
additional financial and emotional burden on her with hopes that she will give up her fight for
18
indemnification. Ms. Merkel now opposes the Demurrer.
19 20 21 22 23 24 25 26 27 28
1
VMS also mandated that security staff at the Derby obtain “guard cards” or other security certificates required solely by VMS. Cross-Defendant VMS also exercised control over security hiring and firing decisions and in fact caused security staff to be terminated for failing security background standards set by VMS. Cross-Defendant VMS employed all persons providing employment services at the Derby at all times relevant herein and leased these employees to Cross-Defendants, Leonardi, Top Cat and the Derby. All of these facts support Ms. Merkel’s Cross-Complaint against Defendant VMS. - 3DEFENDANT CATHERINE MINI MERKEL’S OPPOSITION TO VENUE MANAGEMENT SYSTEMS, INC.’S DEMURRER TO UNVERIFIED FIRST AMENDED CROSS-COMPLAINT OF CATHERINE MINI MERKEL
1
II.
MS. MERKEL PLEAD SUFFICIENT FACTS TO SATISFY PLEADING
2
STANDARDS
3
“[A cross-complainant] is required only to set forth the essential facts of his case with
4
reasonable precision and with particularity sufficient to acquaint a defendant with the nature,
5
source and extent of his cause of action.” Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550.
6
In addition, California courts uphold routinely the pleading standard that when reviewing the
7
sufficiency of a complaint against a general demurrer, the court treats the demurrer as admitting
8
all material facts properly pleaded. Berg & Berg Enterprises, LLC v. Boyle (2009) 178
9
Cal.App.4th 1020, 1034.
10
Ms. Merkel pleads facts necessary to maintain each of her claims against Cross-
11
Defendant VMS. Indeed, since the time of her pleadings, which must be accepted as true,
12
evidence, in the form of deposition testimony was offered to confirm that Cross-Defendant
13
Leonardi engaged the services of VMS in order to obtain insurance coverage for Ms. Merkel and
14
others. (FAXC ¶ 12.) The facts plead by Ms. Merkel constitute more than just contentions or
15
conclusory statements of fact or law. Ms. Merkel plead, in her FAXC, facts material to each
16
claim alleged against Cross-Defendant VMS. Ms. Merkel’s pleadings put Cross-Defendant
17
VMS on notice of the claims pending against it. Accordingly, Ms. Merkel opposes the Demurrer
18
to her FAXC.
19
Even if the Court sustains the Demurrer, which it should not, California Code of Civil
20
Procedure section 472 et seq. suggests that the Court should grant leave to amend the pleading
21
based upon any terms that may be just. Where a failure to permit amendment results in the
22
denial of a party’s right to assert an otherwise meritorious claim, such denial amounts to an
23
abuse of discretion. See Morgan v Superior Court (1959) 172 CA2d 527, 530.
24
III.
MS. MERKEL PLEAD SUFFICIENT FACTS TO SUPPORT HER CLAIMS
25
AGAINST CROSS-DEFENDANT VMS FOR EXPRESS AND IMPLIED
26
CONTRACTUAL INDEMNITY
27
Ms. Merkel plead that “Cross-Defendant Top Cat, by and through Cross-Defendant
28
Leonardi, engaged Cross-Defendant VMS to provide payroll and security services and to insure - 4DEFENDANT CATHERINE MINI MERKEL’S OPPOSITION TO VENUE MANAGEMENT SYSTEMS, INC.’S DEMURRER TO UNVERIFIED FIRST AMENDED CROSS-COMPLAINT OF CATHERINE MINI MERKEL
1
Cross-Complainant, Leonardi, Top Cat and the Derby and its employees.” (Emphasis
2
added)(FAXC ¶ 12.) She alleged further that “[t]he insurance acquired by Cross-Defendants Top
3
Cat, Leonardi and the Derby from Cross-Defendant VMS was intended to and did provide [Ms.
4
Merkel] and others working at the Derby with insurance coverage for maters that include
5
personal injury and premises liability actions such as the underlying civil action filed by Plaintiff
6
herein.” Id. These facts must be accepted as true and they satisfy the existence of an insurance
7
policy obtained for the express purpose of insuring Ms. Merkel against claims such as those
8
alleged by Plaintiff herein.
9
Moreover, evidence of the intent of both contracting parties (not merely the named
10
insured) is relevant and admissible to determine whether an insurance contract entitled a third
11
party to a defense. Garcia v. Truck Insurance Exchange (1984) 36 Cal.3d 426, 437. Ms. Merkel
12
alleges, and Cross-Defendant Leonardi confirmed at deposition, that he contracted with VMS for
13
the express purpose of obtaining liability insurance for Ms. Merkel. (FAXC ¶ 12.) At the
14
pleading stage, these claims support Ms. Merkel’s causes of action for express and implied
15
contractual indemnity.
16
Furthermore, Cross-Defendant VMS was in possession of the insurance policy at issue at
17
the time of the pleading. Under these circumstances, Plaintiff pleads this and other causes of
18
action in the FAXC with sufficient particularity to survive Cross-Defendant VMS’s Demurrer.
19
See Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550. If this Court is inclined to grant
20
VMS’s Demurrer to this cause of action, Plaintiff’s can cure any defects through amendment and
21
hereby request such leave.2 See Stevens v. Superior Court (1999) 75 Cal.App.4th 594, 601.
22
Moreover, Ms. Merkel alleged that the insurance agreement required VMS to indemnify
23
her (FAXC ¶¶ 12, 22, 23, 24, 32-37) but that VMS failed to defend and indemnify her in this
24
action even after she tendered her defense to VMS. (FAXC ¶ 24.) She alleged also that she
25
suffered, and continues to suffer damages as a result of VMS’s failure to defend or indemnify
26 27 28
2
Ms. Merkel now possesses the Client Services Agreement at issue. If required by the Court, Ms. Merkel can amend the FAXC to allege the express terms of the “Indemnification” provision of the contract which provides that “VMS agrees to indemnify, hold harmless, protect and defend CLIENT, and all of CLIENTS…employees from all claims, out-of-pocket expenses, reasonable attorney’s fees and court costs, damages (including compensatory and punitive damages) and liabilities…” - 5DEFENDANT CATHERINE MINI MERKEL’S OPPOSITION TO VENUE MANAGEMENT SYSTEMS, INC.’S DEMURRER TO UNVERIFIED FIRST AMENDED CROSS-COMPLAINT OF CATHERINE MINI MERKEL
1
her. (FAXC ¶ 52.) These facts, when taken collectively, demonstrate that Ms. Merkel has been
2
compelled to pay to defend herself, and that she faces the prospect of paying damages that
3
should be paid by Cross-Defendant VMS. Such allegations satisfy pleading requirements for a
4
claim of express or implied indemnity. See Bush v. Superior Court (1992) 10 Cal.App.4th 1374,
5
1380.
6
Based on the foregoing, Ms. Merkel urges this Court respectfully to overrule Cross-
7
Defendant VMS’s Demurrer to her First Amended Cross Complaint. However, if the Court is
8
inclined to sustain the Demurrer, Ms. Merkel request leave to amend her pleading.
9
IV.
MS. MERKEL PLEAD SUFFICIENT FACTS TO SUPPORT HER CAUSE OF
10
ACTION FOR EQUITABLE INDEMNITY AGAINST CROSS-DEFENDANT
11
VMS
12
By filing a demurrer to Ms. Merkel’s FAXC, Cross-Defendant VMS seeks to escape
13
responsibility for insuring Ms. Merkel against Plaintiff’s claims. “The right to equitable
14
indemnity arises from the principle that an individual who has paid damages which ought to have
15
been paid by another wrongdoer may recover from that wrongdoer.” Sullins v. Exxon/Mobil
16
Corp. (2010) 729 F.Supp.2d 1129, 1139. “The purpose of equitable indemnification is to avoid
17
the unfairness, under joint and several liability theory, of holding one defendant liable for the
18
plaintiff’s entire loss while allowing another responsible defendant to escape “ ‘scot free.’ “
19
Gem Developers v. Hallcraft Homes of San Diego, Inc. (1989) 213 Cal.App.3d 419, 426. “Joint and several liability in the context of equitable indemnity is fairly expansive.”
20 21
BFGC Architects Planners, Inc. v. Forcum/Mackey Construction, Inc. (2004) 119 Cal.App.4th
22
848, 852. Construction of equitable indemnity “extends beyond the term ‘joint tortfeasor’ and
23
may apply to acts that are concurrent or successive, joint or several, as long as they create a
24
detriment caused by several actors.” Prince v. Pacific Gas & Elec. Co. (2009) 45 Cal.4th 1151,
25
1158.
26
Here, Ms. Merkel and Plaintiff allege that Cross-Defendant VMS was in charge of
27
security, training of security personnel, hiring, firing and licensing requirements for security at a
28
venue where a person was shot. (FAXC ¶¶ 9, 12, 16, 17.) Despite this, VMS cites Munoz v - 6DEFENDANT CATHERINE MINI MERKEL’S OPPOSITION TO VENUE MANAGEMENT SYSTEMS, INC.’S DEMURRER TO UNVERIFIED FIRST AMENDED CROSS-COMPLAINT OF CATHERINE MINI MERKEL
1
Davis (1983) 141 Cal.App.3d 420, 425, in support of its argument that Ms. Merkel cannot allege
2
an equitable indemnity claims against VMS unless there is some basis for tort liability against
3
VMS. (See Demurrer to FAXC, p. 5:24-26.) Seemingly, VMS urges this Court to ignore the
4
facts alleged in both the FAXC and in Plaintiff’s operative pleading to reach a conclusion that
5
Ms. Merkel cannot maintain a cause of action against it for equitable indemnity. Ms. Merkel
6
pleads ample facts to support a claim for tort liability against VMS. In addition, Plaintiff alleges
7
numerous facts against VMS that may give rise to tort liability.
8 9
VMS is jointly and severally liable for the claims at issue herein and Ms. Merkel pleads properly a claim against it for equitable indemnity. Accordingly, this Court must overrule
10
VMS’s Demurrer to this cause of action.
11
V.
MS. MERKEL PLEAD FACTS THAT ESTABLISH AN ACTUAL
12
CONTROVERSY WITH VMS THAT REQUIRES A DETERMINATION OF
13
VMS’S DUTIES TO HER
14
The fundamental basis of declaratory relief is the existence of an actual, present
15
controversy over a proper subject. City of Cotati v. Cashman (2002) 29 Cal.4th 69, 79. VMS’s
16
contention that Ms. Merkel did not plead facts to demonstrate that a controversy exists between
17
Ms. Merkel and VMS does not pass the “straight face” test. This argument is not well taken and
18
suggests that VMS filed this Demurrer for the sole purpose of creating added expenses for Ms.
19
Merkel with the hope that she will give up her effort to receive the protection from VMS to
20
which she is entitled.
21
Ms. Merkel pleads that Cross-Defendant VMS employed her, that it is required to defend
22
her against the claims raised by Plaintiff in the Action, and that Cross-Defendants Leonardi and
23
Top Cat contracted with VMS for the express purpose of insuring Ms. Merkel and others
24
working at the Derby. VMS refuses to provide a defense for Ms. Merkel and denies its
25
obligation to indemnify her against Plaintiff’s claims. This amounts to an actual controversy that
26
requires a determination of VMS’s obligations to Ms. Merkel and others. (See FAXC ¶¶ 9, 13,
27
14, 48.)
28
Furthermore, Plaintiff’s claim that VMS owed duties to the decedent, along with several - 7DEFENDANT CATHERINE MINI MERKEL’S OPPOSITION TO VENUE MANAGEMENT SYSTEMS, INC.’S DEMURRER TO UNVERIFIED FIRST AMENDED CROSS-COMPLAINT OF CATHERINE MINI MERKEL
1
named defendants. Plaintiff’s claims provide additional support Ms. Merkel’s contention that a
2
declaration of interests and responsibilities must occur and that those interests necessarily
3
include the controversy that exists between Ms. Merkel and VMS.
4 5
Based on the foregoing, the Court must overrule VMS’s Demurrer to the First Amended Cross Complaint of Ms. Merkel.
6 7
VI.
MS. MERKEL SATISFIED PLEADING REQUIREMENTS FOR HER EXPRESS
8
CONTRACTUAL INDEMNITY CLAIM AND HER FIFTH CAUSE OF ACTION
9
REMAINS VALID
10
An insurer’s refusal to defend can support a claim in tort by the insured for breach of the
11
implied covenant of good faith and fair dealing. Campbell v. Superior Court (1996) 44
12
Cal.App.4th 1308, 1319. When analyzing this issue, the court in Campbell reasoned:
13
“[I]t is undeniable that insurance is purchased to provide the peace of mind and
14
security that comes from knowing that if the insured contingency arises, the
15
insurer will defend against the claim. Stated another way, one of the primary
16
benefits of an insurance policy is that the insured can expect the insurer to defend
17
against third-party claims. It therefore follows that if an insurer unreasonably fails
18
to defend, it has breached the implied covenant of good faith and fair dealing.”
19
Campbell v. Superior Court (1996) 44 Cal.App.4th 1308, 1319 (holding that insurers failure to
20
defend and indemnify supported a cause of action for breach of implied covenant of good faith
21
and fair dealing.)
22
In this case, Ms. Merkel pleads that Cross-Defendant VMS had both an express and
23
implied contractual duty to defend her from Plaintiff’s claims. She alleges particular facts
24
supporting her contention that VMS employed her and owes her a duty to defend and indemnify
25
her through the employment relationship, and that Cross-Defendants Leonardi and Top Cat
26
contracted with VMS for the express purpose of obtaining insurance for Ms. Merkel and others.
27
Ms. Merkel alleges further that Cross-Defendant refuses to defend her in this case and will not
28
indemnify her from any liability based on Plaintiff’s claims in spite of the express contractual - 8DEFENDANT CATHERINE MINI MERKEL’S OPPOSITION TO VENUE MANAGEMENT SYSTEMS, INC.’S DEMURRER TO UNVERIFIED FIRST AMENDED CROSS-COMPLAINT OF CATHERINE MINI MERKEL
SERVICE LIST
1 2
Jaion Laron Clark v. Top Cat Prod., etc., et al.; L.A.S.C. Case No. BC451511
3
VIA EMAIL:
4 5 6
Frank C. Luckenbacher, Esq. Attorney for Plaintiff, Jaion Laron Clark LAW OFFICES OF FRANK C. LUCKENBACHER 22048 Sherman Way, Suite 304 Canoga Park, CA 91303-3011 Tel: (818) 932-9000 | Fax: (818) 226-0022
Email: [email protected] Wayne McClean, Esq. LAW OFFICES OF WAYNE MCCLEAN 24025 Park Sorrento, Suite 220 Calabasas, CA 91302-4006 Tel: (818) 225-7007 | Fax: (818) 225-7557 Email: [email protected]
Co-Counsel for Plaintiff Jaion Laron Clark, a minor by and through his Guardian ad Litem, Sharnell Thompson
Lisa Shyer, Esq. Wisotskey, Procter & Shyer 300 Esplanade Drive, Ste 1500 Oxnard, CA 93036 Tel: (805) 278-0920 | Fax: (805) 278-0289 Email: [email protected]
Co-Counsel for Defendant LT Acquisition Corp., dba Louise’s Trattoria
Attorneys for Defendant Venue Management Systems, Inc.
15
Raymond J. Muro, Esq. NELSON GRIFFIN, LLP 800 W. 6th St., Suite 788 Los Angeles, CA 90017
16
Email: [email protected]
7 8 9 10 11 12 13 14
17 18 19 20 21 22 23 24 25 26
Tel:
(213) 833-0155 | Fax: (213) 833-0160
Stanley R. Escalante, Esq. P.K. SCHRIEFFER, LLP 100 North Barranca Ave, Suite 1100 West Covina, California 91791 Tel: (626) 373-2444 | Fax: (626) 974-8403 Email: [email protected]
Cumis Counsel for Venue Management Systems, Inc.
Mark R. Stapke, Esq. Michelman & Robinson, LLP 15760 Ventura Blvd., 5th Floor Encino, California 91436 Tel: (818) 783-5530 | Fax: (818) 783-5507 Email: [email protected]
Attorneys for Defendant Top Cat Productions, Inc.
Mark D. Baute, Esq. SAUTE CROCHETIERE & MALONEY 777 S. Figueroa St., Suite 4900 Los Angeles, CA 90017 Tel: (213) 630-5000 | Fax: (213)683-1225 Email: [email protected]
Attorneys for Defendant Tony Gower
27 28 PROOF OF SERVICE
Jaion Laron Clark v. Top Cat Prod., etc., et al.; L.A.S.C. Case No. BC451511
1 2 3 4
Dana Leonardi 15059 Ridgeview Court Chino Rills, CA 91700 Email: [email protected] Tel: (909) 455-2990
Defendant In Pro Per
VIA U.S. MAIL:
5 6 7 8 9
Christina Y. Morovati, Esq. BRAGG & KULUVA 444 S. Flower Street, Suite 600 Los Angeles, California 90071 Tel: (213) 612-5335 | Fax: (213) 612-5712 WATERS, McCLUSKEY & BOEHL 200 N. Sepulveda Blvd., Suite 300 El Segundo, CA 90245 Phone: 310-396-3411 | Fax: 310-450-0925
Attorneys for Defendant/Cross-Defendant, Adler Realty Investments, Inc.
Attorneys for Defendant/Cross-Defendant, Adler Realty Investments, Inc.
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE
