TRUEBECK CONSTRUCTION, INC., ET AL VS. SETH TAYLOR, ET AL

9/11/2026 – Law and Motion Calendar Judge: Honorable Mark A. McCannon – Department 2 Page 13 of 38

2:00 PM LINE: 5 24-CIV-01921 TRUEBECK CONSTRUCTION, INC., ET AL VS. SETH TAYLOR, ET AL

TRUEBECK CONSTRUCTION, INC. A ROBERT ROSIN SETH TAYLOR

PLAINTIFF, CROSS COMPLAINANT, and CROSS DEFENDANT, TRUEBECK CONSTRUCTION, INC.’S MOTION OF TRUEBECK CONSTRUCTION, INC. FORAN ORDER BIFURCATING TRIAL

TENTATIVE RULING:

Plaintiff and Cross-Defendant Truebeck Construction, Inc.’s (“Truebeck”) Motion for an Order Bifurcating Trial is DENIED WITHOUT PREJUDICE.

Truebeck’s Requests for Judicial Notice are GRANTED as to the existence and contents of the identified court records, but not as to the truth of disputed factual matters contained therein.

BACKGROUND

These consolidated actions arise from disputes concerning SmartLabs’ lease and an approximately $80 million tenant-improvement construction project at 750 Gateway Boulevard in South San Francisco. Truebeck served as general contractor, SmartLabs was the tenant, and Defendant and Cross-Complainant BMR-Gateway of Pacific II LLC (“BMR”) owns the property. Truebeck and numerous subcontractors and suppliers assert mechanics liens and related claims arising from approximately $24.36 million in allegedly unpaid construction work. The litigation also includes claims concerning SmartLabs’ lease obligations, financing, alleged misrepresentations, indemnity, alter ego liability, and the conduct of various SmartLabs-related entities, officers, directors, and investors.

Truebeck moves pursuant to Code of Civil Procedure sections 598 and 1048, subdivision (b), to divide trial principally into two phases. Phase 1 would encompass construction, performance, payment, mechanics-lien, prompt-payment, common-count, quantum-meruit and certain related indemnity claims. Phase 2 would encompass various fraud, misrepresentation, promissory-estoppel, alter-ego, interference, lease and indemnity claims and related equitable issues. Truebeck proposes a possible additional phase if punitive damages are reached.

BMR opposes the motion, and Farnam Street Financial has joined the opposition. BMR principally argues that the proposed phases contain overlapping evidence and witnesses and that bifurcation is premature because discovery remains incomplete, multiple motions for summary adjudication remain unresolved, and the operative pleadings and parties have recently changed.

9/11/2026 – Law and Motion Calendar Judge: Honorable Mark A. McCannon – Department 2 Page 14 of 38

On August 27, 2026, the Court granted Truebeck leave to file a Second Amended Complaint and granted BMR leave to file a First Amended Cross-Complaint. Those amended pleadings add claims and parties to this already complex consolidated litigation.

LEGAL STANDARD

Code of Civil Procedure section 598 authorizes the Court to order separate trials when doing so would promote the convenience of witnesses, the ends of justice, or the economy and efficiency of handling the litigation.

Code of Civil Procedure section 1048, subdivision (b), similarly permits the Court, in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy, to order a separate trial of any cause of action or separate issue.

The decision whether and how to bifurcate rests within the trial court’s broad discretion. (Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 888; Grappo v. Coventry Financial Corp. (1991) 235 Cal.App.3d 496, 504.) The relevant inquiry is practical: whether separate trials will result in greater convenience and efficiency, avoid prejudice, and reduce rather than duplicate the presentation of evidence. (Orange County Water Dist. v. Alcoa Global Fasteners, Inc.(2017) 12 Cal.App.5th 252, 359.)

DISCUSSION

Truebeck makes a substantial showing that the litigation ultimately may benefit from some form of phased trial. The construction and payment claims present a discernible body of issues concerning the construction contracts, work performed, payment applications, change orders, retention, stop-payment notices, lien documentation, and amounts due. The fraud, financing, corporate-governance, alter-ego and investor-liability claims implicate additional issues and evidence that may not be necessary to determine the underlying construction debt and lien claims. A phased trial therefore may ultimately promote judicial economy and permit numerous Trade Partner witnesses to complete their involvement without participating in litigation concerning unrelated corporate and tort issues.

The Court nevertheless concludes that entry of Truebeck’s proposed bifurcation order at this time would be premature.

First, the pleadings and parties have only recently changed. On August 27, 2026, the Court granted both Truebeck and BMR leave to amend their operative pleadings. The amendments add substantive claims and additional parties. The Court is not persuaded that it should presently prescribe the trial structure for newly added parties and claims before the pleadings are settled and the parties have had an adequate opportunity to address the claims against them.

Second, significant discovery remains outstanding. The record reflects that full merits discovery began only in approximately May 2026 following earlier discovery limitations and stays. At the time the motion was briefed, only limited PMQ depositions had been completed, no BMR personnel had yet been deposed, additional PMQ discovery remained outstanding, subcontractor discovery remained to be conducted, and expert discovery had not commenced.

9/11/2026 – Law and Motion Calendar Judge: Honorable Mark A. McCannon – Department 2 Page 15 of 38

The Court agrees with Truebeck that Code of Civil Procedure section 598 does not require completion of discovery before a court may order bifurcation. The issue, however, is not whether the Court has authority to act now, but whether the present record establishes that the particular division proposed by Truebeck will promote convenience and economy. It does not yet do so.

BMR has identified specific witnesses and categories of evidence that may be relevant to both proposed phases, including evidence concerning contract formation and performance, payment history, project funding, financing representations, and the reasons for SmartLabs’ nonpayment. Truebeck disputes the degree of that overlap and contends much of the construction evidence will be unique to Phase 1. The Court need not resolve that dispute now. Further discovery should clarify whether the overlap is sufficiently limited to make separate trials more efficient or sufficiently substantial that bifurcation would instead require duplicative witness testimony and documentary evidence.

Third, approximately eight motions for summary adjudication remain pending or have been reserved for hearing. Those motions may eliminate claims or defenses or otherwise materially alter the issues requiring trial. Although Truebeck argues the outcome of those motions would merely expand or contract Phase 1, the Court concludes that defining the phases before resolving dispositive motions risks structuring trial around claims or defenses that may not ultimately remain in the case.

Fourth, the Court is not persuaded that denial of bifurcation at this stage will materially prejudice Truebeck or the Trade Partners. The mechanics-lien claims are equitable and will be determined by the Court. The Court recognizes that Phase 1 also contains legal claims subject to jury determination and that Truebeck has a legitimate concern regarding presentation of fraud, alter-ego and other potentially prejudicial evidence to the same jury. That concern may support bifurcation or other appropriate trial-management orders once the issues to be tried are known. On the present record, however, it does not justify fixing the structure of a trial for which no date has yet been set and whose claims and evidentiary boundaries remain subject to substantial change.

Nor does the Court's determination concerning Truebeck’s separate request for a long-account reference require bifurcation at this time. To the extent a referee conducts a limited accounting under Code of Civil Procedure section 639, that process may further define and narrow the factual accounting issues that ultimately must be tried. The Court can consider the effect of that process when determining the appropriate trial structure.

Finally, the Court does not conclude that bifurcation would be inconsistent with the prior consolidation of these actions. Consolidation and bifurcation are both case-management devices designed to promote efficiency. The prior consolidation is relevant, however, because it was intended to avoid duplicative proceedings involving common issues. Any future bifurcation proposal therefore should demonstrate that the proposed phases will preserve those efficiencies rather than require substantial duplication of witnesses, evidence, or judicial factfinding.

Accordingly, the Court finds that Truebeck has not established on the present record that its proposed bifurcation would promote the convenience of witnesses, the ends of justice, expedition and economy, or the avoidance of prejudice within the meaning of Code of Civil Procedure sections 598 and 1048, subdivision (b).

The Motion is therefore DENIED WITHOUT PREJUDICE.

9/11/2026 – Law and Motion Calendar Judge: Honorable Mark A. McCannon – Department 2 Page 16 of 38

This ruling does not determine that bifurcation will ultimately be inappropriate. Truebeck or any other party may renew a request for bifurcation after the pleadings and parties are settled, the pending dispositive motions have sufficiently defined the claims remaining for trial, and discovery has progressed sufficiently to permit the Court to assess the actual witnesses, evidence, and issues likely to be presented in each proposed phase.

Any renewed motion should specifically identify: (1) the claims and issues proposed for each phase; (2) which issues are jury-triable and which are for the Court; (3) the anticipated witnesses in each phase and any expected overlap; (4) the principal categories of evidence common to multiple phases; (5) the factual findings from an earlier phase that would bind or materially narrow a later phase; and (6) the anticipated effect of any long-account reference on the issues remaining for trial.

If the tentative ruling is uncontested, it shall become the order of the Court. Thereafter, counsel for the moving party shall prepare a written order consistent with the Court’s ruling for the Court’s signature pursuant to California Rules of Court, rule 3.1312, and provide written notice of the ruling to all parties who have appeared in the action, as required by law and the California Rules of Court. The Court directs the parties to San Mateo County Superior Court Local Rule 3.403(b)(iv) regarding the wording of proposed orders.

9/11/2026 – Law and Motion Calendar Judge: Honorable Mark A. McCannon – Department 2 Page 17 of 38

2:00 PM LINE: 6 24-CIV-01921 TRUEBECK CONSTRUCTION, INC., ET AL VS. SETH TAYLOR, ET AL

TRUEBECK CONSTRUCTION, INC. A ROBERT ROSIN SETH TAYLOR

PLAINTIFF, CROSS COMPLAINANT, and CROSS DEFENDANT, TRUEBECK CONSRUCTION, INC’S MOTION FOR APPOINTMENT OF A REFEREE TO TAKE A LONG ACCOUNT PURSUANT TO CODE OF CIVIL PROCEDURE SECTION 639

TENTATIVE RULING:

For the reasons stated below, Plaintiff and Cross-Defendant Truebeck Construction, Inc.’s (“Truebeck”) Motion for Appointment of a Referee to Take a Long Account is GRANTED IN PART.

The Court finds that a limited reference pursuant to Code of Civil Procedure section 639, subdivision (a)(1), is warranted for examination and reconciliation of the construction accounts relevant to the amounts asserted in Truebeck’s and the Trade Partners’ mechanics liens. The reference, however, shall be limited to technical accounting matters. The referee shall not determine the legal validity or enforceability of any mechanics lien, the ultimate reasonable value of the work under Civil Code section 8430, or any other legal or equitable issue reserved for determination by the Court.

Selection of the referee and the terms governing compensation are deferred pending compliance with Code of Civil Procedure sections 639 and 640 and California Rules of Court, rules 3.922–3.924, as set forth below.

Truebeck’s Request for Judicial Notice is GRANTED as to the existence and contents of the identified court records, but not as to the truth of disputed factual matters contained therein. The May 26, 2021 order entered in Evans Brothers, Inc. v. Proset, Inc., Santa Clara County Superior Court Case No. 20CV374917, is a trial court order and is not binding authority.

BACKGROUND

These consolidated actions arise from disputes concerning SmartLabs’ lease and an approximately $80 million tenant-improvement construction project at 750 Gateway Boulevard in South San Francisco. Truebeck served as general contractor, SmartLabs was the tenant, and Defendant and Cross-Complainant BMR-Gateway of Pacific II LLC (“BMR”) owns the property. Truebeck and numerous subcontractors and suppliers assert mechanics liens and related claims arising from approximately $24.36 million in allegedly unpaid construction work. The litigation also includes claims concerning SmartLabs’ lease obligations, financing, alleged misrepresentations, indemnity, alter ego liability, and the conduct of various SmartLabs-related entities, officers, directors, and investors.