stipulation-and-order-staying-proceedings.docx

1028-00001 · Client 1028 · Pleadings

stipulation-and-order-staying-proceedings.docx DOCUMENT Litigation

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DOUGLAS CARMICHAEL (SBN 198742) CALDERWOOD & HARKNESS LLP One Market Plaza, Suite 3600 San Francisco, California 94105 Telephone: (415) 773-5200 Facsimile: (415) 773-5201

Email: dcarmichael@calderwoodharkness.com

Attorneys for Plaintiff ESTUARY FOUNDATION

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SAN FRANCISCO

Date: September 16, 2022

STIPULATION AND [PROPOSED] ORDER STAYING ALL PROCEEDINGS

I. PREAMBLE

Plaintiff ESTUARY FOUNDATION ("EF"), a California nonprofit public benefit corporation, by and through its counsel of record, Calderwood & Harkness LLP (Douglas Carmichael, Responsible Partner), and Defendant and Cross-Complainant THE WHITFIELD-GARNER FAMILY TRUST ("WGFT"), a California irrevocable trust established March 14, 2003, by and through its counsel of record, Pratchett, Huang & Solano LLP (Victoria Huang, Lead Partner) (collectively, the "Parties"), hereby stipulate and agree as follows, subject to the approval of the Court:

II. RECITALS

A. WHEREAS, on April 25, 2022, Plaintiff EF filed its Complaint for Declaratory Relief in this action (the "Complaint"), seeking a judicial declaration that EF may lawfully redirect approximately Four Million Seven Hundred Thousand Dollars ($4,700,000) in restricted grant funds originally dedicated to the Bay Area Teacher Residency Initiative ("BATRI") to EF's broader educational mission, including alternative programmatic initiatives consistent with EF's charitable purposes as set forth in its Articles of Incorporation and Bylaws;

B. WHEREAS, the Complaint arises out of a Gift Instrument and Grant Agreement dated June 15, 2018 (the "Gift Instrument"), between WGFT, as donor, and EF, as donee, pursuant to which WGFT granted Five Million Dollars ($5,000,000) to EF, restricted to the establishment and operation of BATRI, a teacher training and residency program designed to place newly credentialed educators in underserved public schools throughout the San Francisco Bay Area;

C. WHEREAS, of the total Five Million Dollar ($5,000,000) grant made by WGFT under the Gift Instrument, Four Million Dollars ($4,000,000) was disbursed to EF in three tranches, as follows: Tranche 1 in the amount of One Million Five Hundred Thousand Dollars ($1,500,000), disbursed in June 2018; Tranche 2 in the amount of One Million Two Hundred Fifty Thousand Dollars ($1,250,000), disbursed in July 2019; and Tranche 3 in the amount of One Million Two Hundred Fifty Thousand Dollars ($1,250,000), disbursed in July 2020; and Tranche 4 in the amount of One Million Dollars ($1,000,000) was never disbursed by WGFT to EF; and of the Four Million Dollars ($4,000,000) disbursed, approximately Three Million Three Hundred Thousand Dollars ($3,300,000) was expended on BATRI program costs, leaving approximately Seven Hundred Thousand Dollars ($700,000) in unexpended disbursed funds held by EF; together with the undisbursed Tranche 4, approximately One Million Seven Hundred Thousand Dollars ($1,700,000) in WGFT grant funds remains in dispute between the Parties;

D. WHEREAS, the total approximately Four Million Seven Hundred Thousand Dollars ($4,700,000) in restricted funds at issue in the Complaint also includes Two Million Dollars ($2,000,000) from the Cascabel Education Fund and One Million Dollars ($1,000,000) from the Newhall-Sievert Foundation, both of which grants were restricted to BATRI under their respective gift instruments and grant agreements, and both of which donors have provided their written consent to the proposed reallocation of their restricted grant funds to EF's broader educational mission; WGFT is the sole objecting donor among the three donors whose restricted funds are at issue in this action;

E. WHEREAS, on June 10, 2022, WGFT filed its Answer to the Complaint and simultaneously filed its Cross-Complaint against EF (the "Cross-Complaint"), seeking restitution of One Million Seven Hundred Thousand Dollars ($1,700,000), representing the sum of the Seven Hundred Thousand Dollars ($700,000) in unexpended disbursed grant funds and the One Million Dollars ($1,000,000) in undisbursed Tranche 4 funds, plus interest at the rate of seven percent (7%) per annum from April 28, 2022, the date on which WGFT made written demand for restitution upon EF;

F. WHEREAS, on July 22, 2022, EF filed its Answer to the Cross-Complaint, denying WGFT's entitlement to restitution and asserting various affirmative defenses, including cy pres, equitable deviation, impracticability, and waiver;

G. WHEREAS, on August 15, 2022, the Court held an Initial Case Management Conference pursuant to California Rules of Court, Rule 3.724, at which the Court recommended that the Parties explore mediation as a means of resolving this dispute prior to engaging in formal discovery and dispositive motion practice;

H. WHEREAS, consistent with the Court's recommendation, on September 2, 2022, the Parties participated in a full-day private mediation session before the Honorable Oscar Pelletreau (Ret.) at Bayshore Mediation Services, located at 201 Mission Street, Suite 900, San Francisco, California 94105, which mediation session, though conducted in good faith by both Parties, did not result in a settlement of the dispute; however, during the course of the mediation, the Parties identified potential areas for continued negotiation and expressed a mutual willingness to continue discussions toward a possible resolution;

I. WHEREAS, in light of the foregoing, the Parties believe that a temporary stay of all proceedings in this action will facilitate further settlement discussions between the Parties and their respective principals, conserve the resources of the Parties and their counsel, and promote the efficient administration of justice by conserving the resources of the Court, all without prejudice to the rights of either Party to reactivate the litigation should settlement discussions prove unsuccessful;

NOW, THEREFORE, based on the foregoing Recitals, which are incorporated herein by this reference, the Parties stipulate and agree as follows:

III. STIPULATED TERMS

Section 1. Stay of All Proceedings

1.1 All proceedings in this action, including but not limited to the Complaint for Declaratory Relief filed by EF on April 25, 2022, the Answer filed by WGFT on June 10, 2022, the Cross-Complaint filed by WGFT on June 10, 2022, and the Answer to Cross-Complaint filed by EF on July 22, 2022, are hereby stayed in their entirety pending further order of the Court or written stipulation of the Parties.

1.2 During the pendency of the stay, no Party shall be required to respond to any discovery requests, including but not limited to interrogatories, requests for production of documents, requests for admission, deposition notices, or subpoenas. No Party shall be required to file any motions, demurrers, or other pleadings, or to take any other action in furtherance of the litigation, except as expressly provided in this Stipulation. No Party shall propound any discovery or serve any motion papers during the stay without the prior written consent of the opposing Party or leave of Court.

1.3 The stay shall take effect upon the date of entry of the Order approving this Stipulation and shall remain in effect until lifted by further order of the Court or written stipulation of the Parties as provided in Section 7 below.

Section 2. Periodic Review — Joint Status Reports

2.1 In order to keep the Court apprised of the progress of settlement discussions and to ensure the orderly administration of this case, the Parties shall file joint status reports with the Court at intervals of approximately ninety (90) days from the date of entry of the Order approving this Stipulation.

2.2 The first joint status report shall be due on or before December 16, 2022. Subsequent joint status reports shall be due approximately every ninety (90) days thereafter, unless the Court directs otherwise.

2.3 Each joint status report shall advise the Court of the following:

(a) The current status of settlement negotiations between the Parties, described in general terms sufficient to apprise the Court of whether meaningful progress is being made, without disclosing the substance of any confidential settlement communications;

(b) Whether the Parties jointly request continuation of the stay for an additional period, and, if so, the reasons supporting such request;

(c) If applicable, a proposed schedule for reactivation of the case, including proposed deadlines for the completion of discovery, the filing of dispositive motions, and trial readiness; and

(d) Any other matters the Parties wish to bring to the Court's attention in connection with the stay or the status of the case.

2.4 The Parties shall meet and confer in good faith no later than ten (10) calendar days prior to the due date of each joint status report regarding the content of the report. Counsel for EF shall be responsible for preparing the initial draft of each joint status report, and counsel for WGFT shall have five (5) calendar days to review and provide comments before the filing deadline.

2.5 If either Party wishes to lift the stay, it shall so indicate in the joint status report, and the report shall include a brief statement of the reasons for seeking to lift the stay. If the Parties cannot agree on whether to continue or lift the stay, the Party seeking to lift the stay may file a noticed motion to lift the stay on not less than fifteen (15) calendar days' notice to the opposing Party, in accordance with Section 7 below.

Section 3. Preservation of Rights

3.1 Nothing in this Stipulation or the Order entered pursuant hereto shall be deemed a waiver of any Party's claims, defenses, counterclaims, cross-claims, or affirmative defenses, whether asserted or unasserted as of the date of this Stipulation, nor shall the entry into this Stipulation or the stay of proceedings be construed as an admission by any Party of any fact, liability, or legal position.

3.2 EF expressly preserves, and does not waive, its claims for declaratory relief as set forth in the Complaint, including its request that the Court declare that EF may lawfully redirect restricted BATRI funds to its broader educational mission. EF further expressly preserves all affirmative defenses asserted or available to it in its Answer to the Cross-Complaint, including but not limited to the doctrines of cy pres, equitable deviation under California Probate Code Sections 15409 and 15403, impracticability, waiver, estoppel, and any other defenses that may be available under applicable law.

3.3 WGFT expressly preserves, and does not waive, its Cross-Complaint for restitution of One Million Seven Hundred Thousand Dollars ($1,700,000), its claim for interest at the rate of seven percent (7%) per annum from April 28, 2022, and all defenses asserted or available to it in its Answer to the Complaint, including but not limited to the enforceability of the donor restriction set forth in the Gift Instrument, the inapplicability of cy pres and equitable deviation to the facts of this case, and any other defenses that may be available under applicable law.

3.4 The Parties further agree that the entry into this Stipulation and the filing of joint status reports pursuant to Section 2 above shall not be used by any Party as evidence of, or argument in support of, any claim, defense, or position in this or any other proceeding.

Section 4. Tolling

4.1 The Parties stipulate and agree that any and all applicable statutes of limitations, statutes of repose, contractual limitation periods, laches periods, and other time-based defenses or deadlines that may apply to the claims and cross-claims asserted in this action, or to any claims or defenses that could have been asserted but were not as of the date of this Stipulation, shall be tolled from the date of entry of the Order staying proceedings until the date the stay is lifted by further order of the Court or written stipulation of the Parties. The purpose of this tolling provision is to ensure that neither Party is prejudiced by the passage of time during the stay.

4.2 Without limiting the generality of the foregoing, the tolling provision set forth in Section 4.1 shall apply to the ninety (90)-day demand period referenced in Section 7.2 of the Gift Instrument dated June 15, 2018, to the extent any Party contends that such period creates a continuing obligation, a condition precedent to suit, or a defense to any claim or cross-claim in this action. The Parties acknowledge that the applicability and legal effect of Section 7.2 of the Gift Instrument remain in dispute and that neither Party waives any argument regarding the interpretation or enforceability of that provision by agreeing to this tolling provision.

4.3 Neither Party shall assert the passage of time during the pendency of the stay as a basis for any defense or affirmative defense, including but not limited to laches, estoppel, statute of limitations, statute of repose, waiver by delay, unreasonable delay, or any similar time-based defense or argument. This provision shall survive the lifting of the stay and shall be enforceable in any subsequent proceedings in this action.

Section 5. Continued Jurisdiction

5.1 The Court shall retain full jurisdiction over this action during the pendency of the stay for all purposes, including but not limited to enforcing the terms of this Stipulation and the Order entered pursuant hereto, addressing any emergency motions that may arise during the stay, and conducting periodic status conferences as the Court deems appropriate in its discretion.

5.2 Nothing in this Stipulation shall be construed to limit or restrict the inherent authority of the Court to manage its docket, issue orders, or take any other action the Court deems necessary or appropriate in the interests of justice.

Section 6. Mediation Confidentiality

6.1 The Parties acknowledge and agree that the September 2, 2022 mediation session before the Honorable Oscar Pelletreau (Ret.) at Bayshore Mediation Services, and all oral and written communications, proposals, offers, counteroffers, and other statements made by the Parties, their counsel, or the mediator in connection therewith or in preparation therefor, are and shall remain confidential and privileged.

6.2 Such communications are protected under California Evidence Code Sections 1115 through 1128, inclusive, and shall not be disclosed to any person or entity not present at the mediation, nor used in any subsequent proceedings in this action or in any other action or proceeding, whether judicial, arbitral, administrative, or otherwise, except as may be required by law or as permitted by the mutual written consent of the Parties.

6.3 The Parties further agree that they shall not subpoena or otherwise compel the testimony of the Honorable Oscar Pelletreau (Ret.) or any representative of Bayshore Mediation Services with respect to the mediation or any communications made in connection therewith.

Section 7. Lifting the Stay

7.1 Either Party may seek to lift the stay imposed by this Stipulation and the Order entered pursuant hereto by either of the following methods:

(a) Written stipulation of all Parties, executed by counsel of record for each Party, filed with the Court and served upon all Parties, requesting that the Court lift the stay and reactivate the case; or

(b) Noticed motion filed by the Party seeking to lift the stay, served upon the opposing Party on not less than fifteen (15) calendar days' notice prior to the hearing date, setting forth the grounds for lifting the stay and any proposed schedule for the resumption of proceedings.

7.2 Upon the lifting of the stay, whether by written stipulation or by order of the Court following a noticed motion, the Parties shall meet and confer in good faith within ten (10) calendar days of the date the stay is lifted regarding a proposed case management schedule for the resumption of proceedings, including proposed deadlines for the completion of fact and expert discovery, the filing of dispositive motions, and trial readiness.

7.3 Within twenty (20) calendar days of the date the stay is lifted, the Parties shall submit a proposed case management schedule to the Court for approval, in the form of a joint stipulation and proposed order or, if the Parties are unable to agree on a schedule, in the form of competing proposals with supporting declarations.

Section 8. No Prejudice to Settlement Discussions

8.1 The Parties agree to continue good-faith settlement discussions during the pendency of the stay. The Parties recognize that the primary purpose of the stay is to provide a period of time during which the Parties can explore the possibility of resolving this dispute without the burden and expense of active litigation.

8.2 Nothing in this Stipulation shall be construed to require any Party to agree to any particular settlement terms, to make any particular settlement offer or counteroffer, or to engage in any specific form of alternative dispute resolution during the stay. Each Party retains full discretion to evaluate settlement proposals and to accept or reject any terms proposed by the other Party.

8.3 The Parties further agree that the failure to reach a settlement during the stay shall not be used by any Party as evidence of, or argument in support of, bad faith, unreasonableness, or any other claim or defense in this or any other proceeding.

Section 9. Service and Notice

9.1 All notices, status reports, stipulations, motions, and other filings under this Stipulation shall be served upon counsel of record for each Party at the following addresses, by personal delivery, United States mail, or electronic service as permitted under the California Rules of Court:

For Plaintiff Estuary Foundation:

Douglas Carmichael Calderwood & Harkness LLP One Market Plaza, Suite 3600 San Francisco, California 94105 Telephone: (415) 773-5200

Email: dcarmichael@calderwoodharkness.com

For Defendant and Cross-Complainant The Whitfield-Garner Family Trust:

Victoria Huang Pratchett, Huang & Solano LLP 555 California Street, 28th Floor San Francisco, California 94104 Telephone: (415) 391-8800

Email: vhuang@phslaw.com

9.2 Either Party may change its designated address for notice by serving written notice of the change upon the other Party and filing such notice with the Court.

Section 10. Miscellaneous

10.1 This Stipulation may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Facsimile and electronic signatures shall be deemed original signatures for all purposes.

10.2 This Stipulation shall be governed by and construed in accordance with the laws of the State of California, without regard to conflict-of-law principles.

10.3 The terms of this Stipulation are binding on the Parties, their successors, assigns, heirs, executors, administrators, trustees, and counsel of record. Each Party represents and warrants that its counsel executing this Stipulation has full authority to do so on behalf of the Party.

10.4 This Stipulation constitutes the entire agreement of the Parties with respect to the subject matter hereof and supersedes all prior oral and written agreements, understandings, and negotiations relating to the stay of proceedings in this action. This Stipulation may not be amended or modified except by a written instrument signed by counsel for all Parties.

10.5 If any provision of this Stipulation is held to be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

[Signature Page Follows]

DATED: September 16, 2022

CALDERWOOD & HARKNESS LLP

By: ________

Douglas Carmichael (SBN 198742) Attorneys for Plaintiff ESTUARY FOUNDATION One Market Plaza, Suite 3600 San Francisco, California 94105

DATED: September 16, 2022

PRATCHETT, HUANG & SOLANO LLP

By: ________

Victoria Huang (SBN 214538) Attorneys for Defendant and Cross-Complainant THE WHITFIELD-GARNER FAMILY TRUST 555 California Street, 28th Floor San Francisco, California 94104

[PROPOSED] ORDER STAYING ALL PROCEEDINGS

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SAN FRANCISCO

The Court, having reviewed the foregoing Stipulation of the Parties, and the declarations and records on file herein, and finding good cause therefor, hereby ORDERS as follows:

1. All proceedings in this action, including but not limited to the Complaint for Declaratory Relief, the Answer, the Cross-Complaint, and the Answer to the Cross-Complaint, are hereby STAYED in their entirety, effective as of the date of this Order, pending further order of the Court or written stipulation of the Parties. During the stay, no Party shall be required to respond to any discovery requests, file any motions, or take any other action in furtherance of the litigation, except as expressly provided in the Stipulation and this Order.

2. The Parties shall file joint status reports with the Court at approximately ninety (90)-day intervals from the date of this Order, advising the Court of the status of settlement negotiations, whether the Parties request continuation of the stay, and, if applicable, a proposed schedule for reactivation of the case. The first such joint status report shall be due on or before December 16, 2022. Subsequent joint status reports shall be due approximately every ninety (90) days thereafter, unless the Court directs otherwise.

3. All applicable statutes of limitations, statutes of repose, contractual limitation periods, and other time-based defenses or deadlines applicable to the claims and cross-claims asserted in this action are hereby TOLLED from the date of this Order until the date the stay is lifted by further order of the Court or written stipulation of the Parties. Neither Party shall assert the passage of time during the pendency of the stay as a basis for any defense, including but not limited to laches, estoppel, or statute of limitations.

4. All rights, claims, defenses, counterclaims, cross-claims, and affirmative defenses of the Parties are expressly PRESERVED. Nothing in the Stipulation or this Order shall be deemed a waiver of any Party's rights, claims, or defenses, whether asserted or unasserted as of the date hereof.

5. The Court RETAINS JURISDICTION over this action during the pendency of the stay for all purposes, including but not limited to enforcing the Stipulation and this Order, addressing any emergency motions that may arise, and conducting periodic status conferences as the Court deems appropriate.

6. Either Party may seek to lift the stay by (a) written stipulation of all Parties filed with the Court, or (b) noticed motion on not less than fifteen (15) calendar days' notice to the opposing Party. Upon the lifting of the stay, the Parties shall meet and confer within ten (10) calendar days and submit a proposed case management schedule to the Court within twenty (20) calendar days.

7. This Order shall remain in effect until further order of the Court.

IT IS SO ORDERED.

DATED: _____, 2022

________________________________________

HON. PATRICIA R. WAINWRIGHT Judge of the Superior Court Department 302

PROOF OF SERVICE

Estuary Foundation v. The Whitfield-Garner Family Trust Case No. CGC-22-599481

STATE OF CALIFORNIA, COUNTY OF SAN FRANCISCO

I am employed in the County of San Francisco, State of California. I am over the age of eighteen (18) years and am not a party to the within action. My business address is One Market Plaza, Suite 3600, San Francisco, California 94105.

On September 16, 2022, I served the foregoing document described as STIPULATION AND [PROPOSED] ORDER STAYING ALL PROCEEDINGS on the interested parties in this action as follows:

Victoria Huang Pratchett, Huang & Solano LLP 555 California Street, 28th Floor San Francisco, California 94104

Email: vhuang@phslaw.com

Douglas Carmichael Calderwood & Harkness LLP One Market Plaza, Suite 3600 San Francisco, California 94105

Email: dcarmichael@calderwoodharkness.com

BY ELECTRONIC SERVICE: Based on a court order or an agreement of the parties to accept service by electronic transmission, I caused the documents to be sent to the persons at the electronic service addresses listed above. I did not receive, within a reasonable time after the transmission, any electronic message or other indication that the transmission was unsuccessful.

BY UNITED STATES MAIL: I enclosed the documents in a sealed envelope or package addressed to the persons at the addresses listed above and deposited the sealed envelope with the United States Postal Service, with the postage 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 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 the date of deposit for mailing in the affidavit.

I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.

Executed on September 16, 2022, at San Francisco, California.

________________________________________

Jennifer A. Forsythe

ESTUARY FOUNDATION, a California nonprofit public benefit corporation,	Case No.: CGC-22-599481
Plaintiff,	Dept.: 302
v.	Assigned for All Purposes to:

Hon. Patricia R. Wainwright

THE WHITFIELD-GARNER FAMILY TRUST, a California irrevocable trust,

STIPULATION AND [PROPOSED] ORDER STAYING ALL PROCEEDINGS

Defendant.

AND RELATED CROSS-ACTION

ESTUARY FOUNDATION, a California nonprofit public benefit corporation,	Case No.: CGC-22-599481
Plaintiff,	Dept.: 302

THE WHITFIELD-GARNER FAMILY TRUST, a California irrevocable trust,

ORDER STAYING ALL PROCEEDINGS

Defendant.

AND RELATED CROSS-ACTION

DOUGLAS CARMICHAEL (SBN 198742) CALDERWOOD & HARKNESS LLP One Market Plaza, Suite 3600 San Francisco, California 94105 Telephone: (415) 773-5200 Facsimile: (415) 773-5201
Email: dcarmichael@calderwoodharkness.com
Attorneys for Plaintiff ESTUARY FOUNDATION
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN FRANCISCO
Date: September 16, 2022
STIPULATION AND [PROPOSED] ORDER STAYING ALL PROCEEDINGS
I. PREAMBLE
Plaintiff ESTUARY FOUNDATION ("EF"), a California nonprofit public benefit corporation, by and through its counsel of record, Calderwood & Harkness LLP (Douglas Carmichael, Responsible Partner), and Defendant and Cross-Complainant THE WHITFIELD-GARNER FAMILY TRUST ("WGFT"), a California irrevocable trust established March 14, 2003, by and through its counsel of record, Pratchett, Huang & Solano LLP (Victoria Huang, Lead Partner) (collectively, the "Parties"), hereby stipulate and agree as follows, subject to the approval of the Court:
II. RECITALS
A. WHEREAS, on April 25, 2022, Plaintiff EF filed its Complaint for Declaratory Relief in this action (the "Complaint"), seeking a judicial declaration that EF may lawfully redirect approximately Four Million Seven Hundred Thousand Dollars ($4,700,000) in restricted grant funds originally dedicated to the Bay Area Teacher Residency Initiative ("BATRI") to EF's broader educational mission, including alternative programmatic initiatives consistent with EF's charitable purposes as set forth in its Articles of Incorporation and Bylaws;
B. WHEREAS, the Complaint arises out of a Gift Instrument and Grant Agreement dated June 15, 2018 (the "Gift Instrument"), between WGFT, as donor, and EF, as donee, pursuant to which WGFT granted Five Million Dollars ($5,000,000) to EF, restricted to the establishment and operation of BATRI, a teacher training and residency program designed to place newly credentialed educators in underserved public schools throughout the San Francisco Bay Area;
C. WHEREAS, of the total Five Million Dollar ($5,000,000) grant made by WGFT under the Gift Instrument, Four Million Dollars ($4,000,000) was disbursed to EF in three tranches, as follows: Tranche 1 in the amount of One Million Five Hundred Thousand Dollars ($1,500,000), disbursed in June 2018; Tranche 2 in the amount of One Million Two Hundred Fifty Thousand Dollars ($1,250,000), disbursed in July 2019; and Tranche 3 in the amount of One Million Two Hundred Fifty Thousand Dollars ($1,250,000), disbursed in July 2020; and Tranche 4 in the amount of One Million Dollars ($1,000,000) was never disbursed by WGFT to EF; and of the Four Million Dollars ($4,000,000) disbursed, approximately Three Million Three Hundred Thousand Dollars ($3,300,000) was expended on BATRI program costs, leaving approximately Seven Hundred Thousand Dollars ($700,000) in unexpended disbursed funds held by EF; together with the undisbursed Tranche 4, approximately One Million Seven Hundred Thousand Dollars ($1,700,000) in WGFT grant funds remains in dispute between the Parties;
D. WHEREAS, the total approximately Four Million Seven Hundred Thousand Dollars ($4,700,000) in restricted funds at issue in the Complaint also includes Two Million Dollars ($2,000,000) from the Cascabel Education Fund and One Million Dollars ($1,000,000) from the Newhall-Sievert Foundation, both of which grants were restricted to BATRI under their respective gift instruments and grant agreements, and both of which donors have provided their written consent to the proposed reallocation of their restricted grant funds to EF's broader educational mission; WGFT is the sole objecting donor among the three donors whose restricted funds are at issue in this action;
E. WHEREAS, on June 10, 2022, WGFT filed its Answer to the Complaint and simultaneously filed its Cross-Complaint against EF (the "Cross-Complaint"), seeking restitution of One Million Seven Hundred Thousand Dollars ($1,700,000), representing the sum of the Seven Hundred Thousand Dollars ($700,000) in unexpended disbursed grant funds and the One Million Dollars ($1,000,000) in undisbursed Tranche 4 funds, plus interest at the rate of seven percent (7%) per annum from April 28, 2022, the date on which WGFT made written demand for restitution upon EF;
F. WHEREAS, on July 22, 2022, EF filed its Answer to the Cross-Complaint, denying WGFT's entitlement to restitution and asserting various affirmative defenses, including cy pres, equitable deviation, impracticability, and waiver;
G. WHEREAS, on August 15, 2022, the Court held an Initial Case Management Conference pursuant to California Rules of Court, Rule 3.724, at which the Court recommended that the Parties explore mediation as a means of resolving this dispute prior to engaging in formal discovery and dispositive motion practice;
H. WHEREAS, consistent with the Court's recommendation, on September 2, 2022, the Parties participated in a full-day private mediation session before the Honorable Oscar Pelletreau (Ret.) at Bayshore Mediation Services, located at 201 Mission Street, Suite 900, San Francisco, California 94105, which mediation session, though conducted in good faith by both Parties, did not result in a settlement of the dispute; however, during the course of the mediation, the Parties identified potential areas for continued negotiation and expressed a mutual willingness to continue discussions toward a possible resolution;
I. WHEREAS, in light of the foregoing, the Parties believe that a temporary stay of all proceedings in this action will facilitate further settlement discussions between the Parties and their respective principals, conserve the resources of the Parties and their counsel, and promote the efficient administration of justice by conserving the resources of the Court, all without prejudice to the rights of either Party to reactivate the litigation should settlement discussions prove unsuccessful;
NOW, THEREFORE, based on the foregoing Recitals, which are incorporated herein by this reference, the Parties stipulate and agree as follows:
III. STIPULATED TERMS
Section 1. Stay of All Proceedings
1.1 All proceedings in this action, including but not limited to the Complaint for Declaratory Relief filed by EF on April 25, 2022, the Answer filed by WGFT on June 10, 2022, the Cross-Complaint filed by WGFT on June 10, 2022, and the Answer to Cross-Complaint filed by EF on July 22, 2022, are hereby stayed in their entirety pending further order of the Court or written stipulation of the Parties.
1.2 During the pendency of the stay, no Party shall be required to respond to any discovery requests, including but not limited to interrogatories, requests for production of documents, requests for admission, deposition notices, or subpoenas. No Party shall be required to file any motions, demurrers, or other pleadings, or to take any other action in furtherance of the litigation, except as expressly provided in this Stipulation. No Party shall propound any discovery or serve any motion papers during the stay without the prior written consent of the opposing Party or leave of Court.
1.3 The stay shall take effect upon the date of entry of the Order approving this Stipulation and shall remain in effect until lifted by further order of the Court or written stipulation of the Parties as provided in Section 7 below.
Section 2. Periodic Review — Joint Status Reports
2.1 In order to keep the Court apprised of the progress of settlement discussions and to ensure the orderly administration of this case, the Parties shall file joint status reports with the Court at intervals of approximately ninety (90) days from the date of entry of the Order approving this Stipulation.
2.2 The first joint status report shall be due on or before December 16, 2022. Subsequent joint status reports shall be due approximately every ninety (90) days thereafter, unless the Court directs otherwise.
2.3 Each joint status report shall advise the Court of the following:
(a) The current status of settlement negotiations between the Parties, described in general terms sufficient to apprise the Court of whether meaningful progress is being made, without disclosing the substance of any confidential settlement communications;
(b) Whether the Parties jointly request continuation of the stay for an additional period, and, if so, the reasons supporting such request;
(c) If applicable, a proposed schedule for reactivation of the case, including proposed deadlines for the completion of discovery, the filing of dispositive motions, and trial readiness; and
(d) Any other matters the Parties wish to bring to the Court's attention in connection with the stay or the status of the case.
2.4 The Parties shall meet and confer in good faith no later than ten (10) calendar days prior to the due date of each joint status report regarding the content of the report. Counsel for EF shall be responsible for preparing the initial draft of each joint status report, and counsel for WGFT shall have five (5) calendar days to review and provide comments before the filing deadline.
2.5 If either Party wishes to lift the stay, it shall so indicate in the joint status report, and the report shall include a brief statement of the reasons for seeking to lift the stay. If the Parties cannot agree on whether to continue or lift the stay, the Party seeking to lift the stay may file a noticed motion to lift the stay on not less than fifteen (15) calendar days' notice to the opposing Party, in accordance with Section 7 below.
Section 3. Preservation of Rights
3.1 Nothing in this Stipulation or the Order entered pursuant hereto shall be deemed a waiver of any Party's claims, defenses, counterclaims, cross-claims, or affirmative defenses, whether asserted or unasserted as of the date of this Stipulation, nor shall the entry into this Stipulation or the stay of proceedings be construed as an admission by any Party of any fact, liability, or legal position.
3.2 EF expressly preserves, and does not waive, its claims for declaratory relief as set forth in the Complaint, including its request that the Court declare that EF may lawfully redirect restricted BATRI funds to its broader educational mission. EF further expressly preserves all affirmative defenses asserted or available to it in its Answer to the Cross-Complaint, including but not limited to the doctrines of cy pres, equitable deviation under California Probate Code Sections 15409 and 15403, impracticability, waiver, estoppel, and any other defenses that may be available under applicable law.
3.3 WGFT expressly preserves, and does not waive, its Cross-Complaint for restitution of One Million Seven Hundred Thousand Dollars ($1,700,000), its claim for interest at the rate of seven percent (7%) per annum from April 28, 2022, and all defenses asserted or available to it in its Answer to the Complaint, including but not limited to the enforceability of the donor restriction set forth in the Gift Instrument, the inapplicability of cy pres and equitable deviation to the facts of this case, and any other defenses that may be available under applicable law.
3.4 The Parties further agree that the entry into this Stipulation and the filing of joint status reports pursuant to Section 2 above shall not be used by any Party as evidence of, or argument in support of, any claim, defense, or position in this or any other proceeding.
Section 4. Tolling
4.1 The Parties stipulate and agree that any and all applicable statutes of limitations, statutes of repose, contractual limitation periods, laches periods, and other time-based defenses or deadlines that may apply to the claims and cross-claims asserted in this action, or to any claims or defenses that could have been asserted but were not as of the date of this Stipulation, shall be tolled from the date of entry of the Order staying proceedings until the date the stay is lifted by further order of the Court or written stipulation of the Parties. The purpose of this tolling provision is to ensure that neither Party is prejudiced by the passage of time during the stay.
4.2 Without limiting the generality of the foregoing, the tolling provision set forth in Section 4.1 shall apply to the ninety (90)-day demand period referenced in Section 7.2 of the Gift Instrument dated June 15, 2018, to the extent any Party contends that such period creates a continuing obligation, a condition precedent to suit, or a defense to any claim or cross-claim in this action. The Parties acknowledge that the applicability and legal effect of Section 7.2 of the Gift Instrument remain in dispute and that neither Party waives any argument regarding the interpretation or enforceability of that provision by agreeing to this tolling provision.
4.3 Neither Party shall assert the passage of time during the pendency of the stay as a basis for any defense or affirmative defense, including but not limited to laches, estoppel, statute of limitations, statute of repose, waiver by delay, unreasonable delay, or any similar time-based defense or argument. This provision shall survive the lifting of the stay and shall be enforceable in any subsequent proceedings in this action.
Section 5. Continued Jurisdiction
5.1 The Court shall retain full jurisdiction over this action during the pendency of the stay for all purposes, including but not limited to enforcing the terms of this Stipulation and the Order entered pursuant hereto, addressing any emergency motions that may arise during the stay, and conducting periodic status conferences as the Court deems appropriate in its discretion.
5.2 Nothing in this Stipulation shall be construed to limit or restrict the inherent authority of the Court to manage its docket, issue orders, or take any other action the Court deems necessary or appropriate in the interests of justice.
Section 6. Mediation Confidentiality
6.1 The Parties acknowledge and agree that the September 2, 2022 mediation session before the Honorable Oscar Pelletreau (Ret.) at Bayshore Mediation Services, and all oral and written communications, proposals, offers, counteroffers, and other statements made by the Parties, their counsel, or the mediator in connection therewith or in preparation therefor, are and shall remain confidential and privileged.
6.2 Such communications are protected under California Evidence Code Sections 1115 through 1128, inclusive, and shall not be disclosed to any person or entity not present at the mediation, nor used in any subsequent proceedings in this action or in any other action or proceeding, whether judicial, arbitral, administrative, or otherwise, except as may be required by law or as permitted by the mutual written consent of the Parties.
6.3 The Parties further agree that they shall not subpoena or otherwise compel the testimony of the Honorable Oscar Pelletreau (Ret.) or any representative of Bayshore Mediation Services with respect to the mediation or any communications made in connection therewith.
Section 7. Lifting the Stay
7.1 Either Party may seek to lift the stay imposed by this Stipulation and the Order entered pursuant hereto by either of the following methods:
(a) Written stipulation of all Parties, executed by counsel of record for each Party, filed with the Court and served upon all Parties, requesting that the Court lift the stay and reactivate the case; or
(b) Noticed motion filed by the Party seeking to lift the stay, served upon the opposing Party on not less than fifteen (15) calendar days' notice prior to the hearing date, setting forth the grounds for lifting the stay and any proposed schedule for the resumption of proceedings.
7.2 Upon the lifting of the stay, whether by written stipulation or by order of the Court following a noticed motion, the Parties shall meet and confer in good faith within ten (10) calendar days of the date the stay is lifted regarding a proposed case management schedule for the resumption of proceedings, including proposed deadlines for the completion of fact and expert discovery, the filing of dispositive motions, and trial readiness.
7.3 Within twenty (20) calendar days of the date the stay is lifted, the Parties shall submit a proposed case management schedule to the Court for approval, in the form of a joint stipulation and proposed order or, if the Parties are unable to agree on a schedule, in the form of competing proposals with supporting declarations.
Section 8. No Prejudice to Settlement Discussions
8.1 The Parties agree to continue good-faith settlement discussions during the pendency of the stay. The Parties recognize that the primary purpose of the stay is to provide a period of time during which the Parties can explore the possibility of resolving this dispute without the burden and expense of active litigation.
8.2 Nothing in this Stipulation shall be construed to require any Party to agree to any particular settlement terms, to make any particular settlement offer or counteroffer, or to engage in any specific form of alternative dispute resolution during the stay. Each Party retains full discretion to evaluate settlement proposals and to accept or reject any terms proposed by the other Party.
8.3 The Parties further agree that the failure to reach a settlement during the stay shall not be used by any Party as evidence of, or argument in support of, bad faith, unreasonableness, or any other claim or defense in this or any other proceeding.
Section 9. Service and Notice
9.1 All notices, status reports, stipulations, motions, and other filings under this Stipulation shall be served upon counsel of record for each Party at the following addresses, by personal delivery, United States mail, or electronic service as permitted under the California Rules of Court:
For Plaintiff Estuary Foundation:
Douglas Carmichael Calderwood & Harkness LLP One Market Plaza, Suite 3600 San Francisco, California 94105 Telephone: (415) 773-5200
Email: dcarmichael@calderwoodharkness.com
For Defendant and Cross-Complainant The Whitfield-Garner Family Trust:
Victoria Huang Pratchett, Huang & Solano LLP 555 California Street, 28th Floor San Francisco, California 94104 Telephone: (415) 391-8800
Email: vhuang@phslaw.com
9.2 Either Party may change its designated address for notice by serving written notice of the change upon the other Party and filing such notice with the Court.
Section 10. Miscellaneous
10.1 This Stipulation may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Facsimile and electronic signatures shall be deemed original signatures for all purposes.
10.2 This Stipulation shall be governed by and construed in accordance with the laws of the State of California, without regard to conflict-of-law principles.
10.3 The terms of this Stipulation are binding on the Parties, their successors, assigns, heirs, executors, administrators, trustees, and counsel of record. Each Party represents and warrants that its counsel executing this Stipulation has full authority to do so on behalf of the Party.
10.4 This Stipulation constitutes the entire agreement of the Parties with respect to the subject matter hereof and supersedes all prior oral and written agreements, understandings, and negotiations relating to the stay of proceedings in this action. This Stipulation may not be amended or modified except by a written instrument signed by counsel for all Parties.
10.5 If any provision of this Stipulation is held to be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
[Signature Page Follows]
DATED: September 16, 2022
CALDERWOOD & HARKNESS LLP
By: ________
Douglas Carmichael (SBN 198742) Attorneys for Plaintiff ESTUARY FOUNDATION One Market Plaza, Suite 3600 San Francisco, California 94105
DATED: September 16, 2022
PRATCHETT, HUANG & SOLANO LLP
By: ________
Victoria Huang (SBN 214538) Attorneys for Defendant and Cross-Complainant THE WHITFIELD-GARNER FAMILY TRUST 555 California Street, 28th Floor San Francisco, California 94104
[PROPOSED] ORDER STAYING ALL PROCEEDINGS
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN FRANCISCO
The Court, having reviewed the foregoing Stipulation of the Parties, and the declarations and records on file herein, and finding good cause therefor, hereby ORDERS as follows:
1. All proceedings in this action, including but not limited to the Complaint for Declaratory Relief, the Answer, the Cross-Complaint, and the Answer to the Cross-Complaint, are hereby STAYED in their entirety, effective as of the date of this Order, pending further order of the Court or written stipulation of the Parties. During the stay, no Party shall be required to respond to any discovery requests, file any motions, or take any other action in furtherance of the litigation, except as expressly provided in the Stipulation and this Order.
2. The Parties shall file joint status reports with the Court at approximately ninety (90)-day intervals from the date of this Order, advising the Court of the status of settlement negotiations, whether the Parties request continuation of the stay, and, if applicable, a proposed schedule for reactivation of the case. The first such joint status report shall be due on or before December 16, 2022. Subsequent joint status reports shall be due approximately every ninety (90) days thereafter, unless the Court directs otherwise.
3. All applicable statutes of limitations, statutes of repose, contractual limitation periods, and other time-based defenses or deadlines applicable to the claims and cross-claims asserted in this action are hereby TOLLED from the date of this Order until the date the stay is lifted by further order of the Court or written stipulation of the Parties. Neither Party shall assert the passage of time during the pendency of the stay as a basis for any defense, including but not limited to laches, estoppel, or statute of limitations.
4. All rights, claims, defenses, counterclaims, cross-claims, and affirmative defenses of the Parties are expressly PRESERVED. Nothing in the Stipulation or this Order shall be deemed a waiver of any Party's rights, claims, or defenses, whether asserted or unasserted as of the date hereof.
5. The Court RETAINS JURISDICTION over this action during the pendency of the stay for all purposes, including but not limited to enforcing the Stipulation and this Order, addressing any emergency motions that may arise, and conducting periodic status conferences as the Court deems appropriate.
6. Either Party may seek to lift the stay by (a) written stipulation of all Parties filed with the Court, or (b) noticed motion on not less than fifteen (15) calendar days' notice to the opposing Party. Upon the lifting of the stay, the Parties shall meet and confer within ten (10) calendar days and submit a proposed case management schedule to the Court within twenty (20) calendar days.
7. This Order shall remain in effect until further order of the Court.
IT IS SO ORDERED.
DATED: _____, 2022
________________________________________
HON. PATRICIA R. WAINWRIGHT Judge of the Superior Court Department 302
PROOF OF SERVICE
Estuary Foundation v. The Whitfield-Garner Family Trust Case No. CGC-22-599481
STATE OF CALIFORNIA, COUNTY OF SAN FRANCISCO
I am employed in the County of San Francisco, State of California. I am over the age of eighteen (18) years and am not a party to the within action. My business address is One Market Plaza, Suite 3600, San Francisco, California 94105.
On September 16, 2022, I served the foregoing document described as STIPULATION AND [PROPOSED] ORDER STAYING ALL PROCEEDINGS on the interested parties in this action as follows:
Victoria Huang Pratchett, Huang & Solano LLP 555 California Street, 28th Floor San Francisco, California 94104
Email: vhuang@phslaw.com
Douglas Carmichael Calderwood & Harkness LLP One Market Plaza, Suite 3600 San Francisco, California 94105
Email: dcarmichael@calderwoodharkness.com
BY ELECTRONIC SERVICE: Based on a court order or an agreement of the parties to accept service by electronic transmission, I caused the documents to be sent to the persons at the electronic service addresses listed above. I did not receive, within a reasonable time after the transmission, any electronic message or other indication that the transmission was unsuccessful.
BY UNITED STATES MAIL: I enclosed the documents in a sealed envelope or package addressed to the persons at the addresses listed above and deposited the sealed envelope with the United States Postal Service, with the postage 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 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 the date of deposit for mailing in the affidavit.
I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.
Executed on September 16, 2022, at San Francisco, California.
________________________________________
Jennifer A. Forsythe
ESTUARY FOUNDATION, a California nonprofit public benefit corporation, | Case No.: CGC-22-599481
Plaintiff, | Dept.: 302
v. | Assigned for All Purposes to:
Hon. Patricia R. Wainwright
THE WHITFIELD-GARNER FAMILY TRUST, a California irrevocable trust,
STIPULATION AND [PROPOSED] ORDER STAYING ALL PROCEEDINGS
Defendant.
AND RELATED CROSS-ACTION
ESTUARY FOUNDATION, a California nonprofit public benefit corporation, | Case No.: CGC-22-599481
Plaintiff, | Dept.: 302
v.
THE WHITFIELD-GARNER FAMILY TRUST, a California irrevocable trust,
ORDER STAYING ALL PROCEEDINGS
Defendant.
AND RELATED CROSS-ACTION

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SAN FRANCISCO

I. PREAMBLE

II. RECITALS

III. STIPULATED TERMS

CALDERWOOD & HARKNESS LLP

PRATCHETT, HUANG & SOLANO LLP

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SAN FRANCISCO

IT IS SO ORDERED.

PROOF OF SERVICE

STATE OF CALIFORNIA, COUNTY OF SAN FRANCISCO

AND RELATED CROSS-ACTION

ORDER STAYING ALL PROCEEDINGS

AND RELATED CROSS-ACTION

Record

Parties

Dates

Amounts