SAUNDRA BROWN ARMSTRONG, District Judge.
The Clara Poppic Trust ("the Trust") is owner of commercial property located at 2531 Telegraph Ave., Berkeley, California ("Property"), the site of a dry cleaning business known as Cal Cleaners. In 2006, the Trust allegedly discovered that the Property was contaminated with perchloroethylene ("PCE"), a chemical used in dry cleaning operations. To defray the cost of remediating the contamination, Plaintiff Wells Fargo Bank N.A., in its capacity as Trustee for the Trust, filed the instant cost recovery and contribution action, principally under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9601, et seq., against former lessees of the Property, including Kenneth Renz, the Estate of Jackson R. Dennison and Kazuko Umstead, among others, who allegedly operated Cal Cleaners from 1975 to 2008. In turn, Defendants have filed counterclaims against Plaintiff, crossclaims against each other and third-party complaints against manufacturers of the dry cleaning equipment, including Hoyt Manufacturing and Vic Manufacturing Company and its alleged successor, Bowe Permac, Inc.
The parties are now before the Court on the following motions, which are styled as follows:
1. Defendant Estate of Jackson R. Dennison's Motion for Summary Judgment
2. Defendant Kenneth G. Renz's Motion for Summary Judgment or in the Alternative Summary Adjudication, Dkt. 314;
3. Defendant Kazuko Umstead's Motion for Summary Judgment of All Plaintiff's Claims, or in the Alternative, Partial Summary Judgment of Plaintiff's Individual Claims for Relief, Dkt. 308;
4. Defendant Hoyt Corporation's Motion to Dismiss Pursuant to FRCP 12(b)(6), Dkt. 284;
5. Defendant Hoyt Corporation's Motion to Dismiss Renz's Cross-Claims Pursuant to FRCP 12(b)(6), Dkt. 333;
6. Defendant Hoyt Corporation's Motion for Partial Summary Judgment, Dkt. 306;
7. Third Party Defendants Bowe Permac, Inc. and Vic Manufacturing Company's Motion for Judgment on the Pleadings Pursuant to FRCP 12(c), Dkt. 311; and,
8. Third Party Defendants Bowe Permac, Inc. and Vic Manufacturing Company's Motion for Summary Judgment or, Alternatively, for Partial Summary Judgment, Dkt. 312.
Having read and considered the papers filed in connection with this matter and being fully informed, the Court enters the following memorandum and order. The Court, in its discretion, finds this matter suitable for resolution without oral argument. See Fed.R.Civ.P. 78(b); Civ. L.R. 7-1(b).
On August 19, 1974, Henry Poppic, as Executor for the Estate of Clara Poppic, entered into a lease agreement ("Lease" or "1974 Lease") with Kenneth G. Renz ("Renz") and his uncle Jackson R. Dennison ("Dennison"), "for the purpose of conducting therein a coin-operated launderette and dry cleaning establishment." Fourth Am. Compl. ("FAC") Ex. A at 1 (copy of 1974 Lease), Dkt. 283-1. The term of the Lease ran from November 1, 1974 to October 31, 1984. Id. The Lease granted lessees Renz and Dennison access to the Property beginning on October 1, 1974, for the purpose of remodeling the premises. Id. ¶ 30. Renz and Dennison operated Cal Cleaners from about February 1975 until about May 1977. Renz Mot. at 7, Dkt. 314.
In January 1975, prior to opening Cal Cleaners, Renz and Dennison purchased a new Hoyt Sniff-O-Miser ("Sniff-O-Miser") from Steam Equipment Sales Company ("Steam Equipment") in Oakland, California. FAC ¶ 16, Dkt. 283. The purpose of the Sniff-O-Miser was to treat and reclaim PCE from gaseous fumes vented by the dryer/reclaimer or otherwise present in the ambient air from other dry cleaning plant operations. Id. The pure PCE reclaimed by the Sniff-O-Miser could be reused in the dry cleaning machines. Id. However, some amount of PCE remained in the wastewater resulting from the reclamation process. Id. An individual named "Pete" (whose affiliation is not indicated) provided instructions on how to operate the Sniff-O-Miser, which included dumping the wastewater into the toilet. Id. Plaintiff also claims that a manual from 1979 instructs that wastewater "should be piped to an open sewer system.. . ." Id.
In or about May 13, 1977, Renz and Dennison sold Cal Cleaners to Wiley Umstead ("Mr. Umstead").
On July 13, 1983, Mr. Umstead and Coldwell National Bank and Henry Poppic, in their capacities as co-trustees of the Trust, executed a new ten-year lease ("1983 Lease") for the Property. FAC Ex. C, Dkt. 283-1. The lease term ran from July 31, 1983, to July 31, 1993. Id. Mrs. Umstead did not sign the 1983 Lease, and only Mr. Umstead's name and signature appear on the document. Id. at 9.
At some point during his ownership of Cal Cleaners, Mr. Umstead purchased a Kamero Model 405 dry cleaning machine manufactured by Vic Manufacturing Company ("Vic"), a Minnesota corporation. See Weyand Decl. Ex. C, Dkt. 316. Bowe Permac, Inc. ("Bowe") acquired Vic pursuant to a stock acquisition agreement, dated November 10, 1992. Id. Ex. A. Vic was dissolved under the laws of Minnesota on February 25, 2002. Id. Ex. B.
Mrs. Umstead occasionally worked at Cal Cleaners, though her involvement was limited to sewing, sorting and hanging clothes, and keeping the premises tidy. Adam Decl. Ex. D at 48:16-17, 164:24-165:15; Ex. E at 41:4-2-11, Dkt. 308-3; Culver Decl. Ex. C at 6:24-7:5, Dkt. 324. Mrs. Umstead does not recall observing any chemical leaks coming from the equipment. Culver Decl. Ex. C at 6:24-7:5, Dkt. 324.
In August 1986, Mr. Umstead sold Cal Cleaners to Won Jae Yi ("Yi"). Adams Decl. Ex. F at 13:14-16, 89:14-90:8, Dkt. 308-3. As part of the sale, Mr. Umstead assigned the 1983 Lease to Yi. FAC Ex. D. Dkt. 283. The assignment was countersigned by Wells Fargo Bank (the successor to Crocker National Bank) and Henry Poppic, as co-trustees of the Trust. Id. Yi allegedly operated the dry cleaners until November 1999. Id. ¶ 18.
After Yi, Cal Cleaners was operated by the following persons: Nan Y. Park ("Park")—November 1999 to April 2004; and Guan Huang ("Huang"), Ying Zhang ("Zhang") and Sui Song ("Song")—April 2004 to February 2008. Id. ¶¶ 19-20. The Trust has owned the Property during all relevant time periods. Id. ¶ 21. In September 2006, PCE was discovered in the ground at the Property when the Trust was attempting to sell the Property. Id. ¶ 23.
On May 21, 2008, Plaintiff, in its capacity as Trustee, filed the instant action in this Court, principally under CERCLA. As Defendants, the Complaint named: Renz; Dennison; Mr. Umstead; Yi; Park; Huang; Zhang; and Song. Compl. ¶ 11, Dkt. 1. The Complaint alleged fourteen
Plaintiff has amended the pleadings on four separate occasions. Specifically, Plaintiff filed a First Amended Complaint on June 24, 2008, Dkt. 11; a Second Amended Complaint on November 4, 2008, Dkt. 102; and Third Amended Complaint on November 20, 2009, Dkt. 204. The Third Amended Complaint joined Mrs. Umstead as a party-defendant, and substituted the Estate of Wiley Umstead and the Estate of Jackson Dennison in place of Mr. Umstead and Dennison, respectively, who are deceased. Dkt. 204.
In response to Plaintiff's claims, Defendants filed various counterclaims, cross-claims and third party actions. Among other pleadings, Mrs. Umstead filed a Second Amended Third Party Complaint against Vic, Bowe, Perc-Serv, Inc., and Steam Equipment, all of which allegedly provided equipment used at Cal Cleaners. Dkt. 205. In addition, Mrs. Umstead filed a First Amended Cross-Claim against all Defendants. Dkt. 206.
On May 5, 2010, Hoyt filed a Rule 12(b)(6) motion to dismiss the claims alleged in the Third Amended Complaint, as well as in Mrs. Umstead's First Amended Cross-Claim. Dkt. 252. On January 12, 2011, 2011 WL 97649, the Court rendered its ruling on the motion which dismissed Plaintiff's CERCLA claims with leave to amend, and denied the motion in all other respects. Dkt. 278. The Court dismissed Mrs. Umstead's crossclaims under CERCLA, HSAA and for negligence, but denied the motion with respect to her claims for equitable contribution and indemnity, and for declaratory relief. Id.
In response to the Court's ruling, Plaintiff filed a Fourth Amended Complaint ("FAC"), and Mrs. Umstead filed a Second Amended Cross-Claim on February 2, 2011. Dkt. 282, 283.
On March 22, 2011, Renz filed a document styled as Amended Cross-Complaints in Response to the Fourth Amended Complaint, which alleges five crossclaims against all other Defendants. Dkt. 309.
Eight motions are now before the Court. The operative pleadings and motions at issue are summarized as follows:
Defendants Renz, Dennison and Mrs. Umstead have filed largely identical motions for summary judgment directed to all sixteen claims alleged in the FAC. Dkt. 283, 308, 313, 314.
Defendant Hoyt also has filed a motion to dismiss the first claim under CERCLA § 107 and second claim under HSAA. Dkt. 284.
Separately, Hoyt moves for partial summary judgment on Plaintiff's fourteenth claim for trespass. Dkt. 306.
Mrs. Umstead's Second Amended Cross-Claim is brought against all other Defendants in this action. Dkt. 282. As part of its motion to dismiss certain claims alleged in the FAC, Hoyt also moves to dismiss Umstead's first crossclaim under CERCLA § 107, second crossclaim under CERCLA § 113, third crossclaim for negligence, and sixth claim for nuisance. Dkt. 284. Mrs. Umstead has agreed to voluntarily dismiss her nuisance crossclaim.
Mrs. Umstead's Third Party Complaint is brought, inter alia, against Vic, which manufactured dry cleaning equipment purchased by Mr. Umstead, and Bowe, which later acquired Vic. Dkt. 205. Bowe and Vic have filed a motion for judgment on the pleadings, Dkt. 311, and a motion for summary judgment, Dkt. 312, both of which are directed to all claims asserted against them. As will be discussed below, the Court finds that Bowe and Vic's summary judgment is dispositive, and for that reason, the Court does not address the motion for judgment on the pleadings.
Renz's Amended Cross-Complaints in Response to the Fourth Amended Complaint alleges five crossclaims against all other Defendants. Dkt. 309. Hoyt moves to dismiss Renz's CERCLA and HSAA crossclaims on the same grounds that it is seeking dismissal of Plaintiff and Umstead's CERCLA and HSAA claims. Dkt. 333.
Federal Rule of Civil Procedure 56 provides that a party may move for summary judgment on some or all of the claims or defenses presented in an action. Fed. R.Civ.P. 56(a)(1). "The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Id.; see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The movant bears the initial burden of demonstrating the basis for the motion and identifying the portions of the pleadings, depositions, answers to interrogatories, affidavits, and admissions on file that establish the absence of a triable issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Fed.R.Civ.P. 56(c)(1)(A). If the moving party meets this initial burden, the burden then shifts to the non-moving party to present specific facts showing that there is a genuine issue for trial. See Celotex, 477 U.S. at 324, 106 S.Ct. 2548; Matsushita Elec. Indus. Co. v.
"On a motion for summary judgment, `facts must be viewed in the light most favorable to the nonmoving party only if there is a `genuine' dispute as to those facts.'" Ricci v. DeStefano, ___ U.S. ___, 129 S.Ct. 2658, 2677, 174 L.Ed.2d 490 (2009) (quoting in part Scott v. Harris, 550 U.S. 372, 380, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007)). "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted." Anderson, 477 U.S. at 248, 106 S.Ct. 2505. A factual dispute is genuine if it "properly can be resolved in favor of either party." Id. at 250, 106 S.Ct. 2505. Accordingly, a genuine issue for trial exists if the non-movant presents evidence from which a reasonable jury, viewing the evidence in the light most favorable to that party, could resolve the material issue in his or her favor. Id. "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Id. at 249-50 (internal citations omitted). Only admissible evidence may be considered in ruling on a motion for motion for summary judgment. Orr v. Bank of Am., 285 F.3d 764, 773 (9th Cir.2002).
Pursuant to Federal Rule of Civil Procedure 12(b)(6), dismissal for failure to state a claim can be based on either: (1) the lack of a cognizable legal theory; or (2) insufficient facts to support a cognizable legal claim. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir.1988). In considering a Rule 12(b)(6) motion, the court is to "accept all factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party." Outdoor Media Group, Inc. v. City of Beaumont, 506 F.3d 895, 899-900 (9th Cir.2007). The plaintiff's factual allegations "must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A complaint that raises only "the mere possibility of misconduct" does not establish that the plaintiff is entitled to relief. Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1950, 173 L.Ed.2d 868 (2009). "[A] plaintiff's obligation to provide the `grounds' of his `entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555, 127 S.Ct. 1955. "If a complaint is dismissed for failure to state a claim, leave to amend should be granted unless the court determines that the allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency." Schreiber Distrib. Co. v. Serv-Well Furniture Co., Inc., 806 F.2d 1393, 1401 (9th Cir.1986).
Renz and Dennison have separately filed motions for summary judgment, which are directed to all claims alleged in the FAC. Dkt. 313, 314. Each of these Defendants is represented by the same counsel, and their respective motions for summary judgment motions are virtually identical— as are Plaintiff's responses to the motions. Dkt. 313, 314, 325, 326. Since the motions present essentially the same facts and issues, the Court analyzes them together.
Plaintiff seeks recovery of response costs under CERCLA § 107(a) (first claim) and contribution under CERCLA § 113(f) (sixteenth claim). Congress enacted CERCLA to "ensure the prompt and
Claims for cost recovery and contribution may be pursued against four categories of "potentially responsible parties" or "PRPs." 42 U.S.C. §§ 9607(a), 9613(f). The four categories of PRPs are defined by statute, as follows:
42 U.S.C. § 9607(a) (emphasis added).
To establish a prima facie case for cost recovery or contribution, the plaintiff must show that: (1) the property at issue is a "facility" as defined in 42 U.S.C. § 9601(9); (2) a "release" or "threatened release" of a "hazardous substance" has occurred; (3) the "release" or "threatened release" has caused the plaintiff to incur response costs that were "necessary" and "consistent with the national contingency plan"; and (4) the defendants are in one of four classes of persons subject to liability under § 9607(a). See City of Colton v. Am. Promotional Events, Inc.-West, 614 F.3d 998, 1002-03 (9th Cir.2010).
Renz and Dennison contend that they are entitled to summary judgment on Plaintiff's CERCLA claims on the ground that there is no evidence to support its contention that there was a "release" of PCE onto the Property between February 1975 and May 1977, the time period during which they operated Cal Cleaners. Renz Mot. at 9-10, Dkt. 314; Dennison Mot. at 9-10, Dkt. 313.
Here, Renz and Dennison contend, in an entirely conclusory manner, that "[t]here is no evidence that during the time period there was a single release of PCE that caused any damage to Plaintiff," and that "Plaintiff's experts testified that they will not be able to relate any release of PCE to any specific time period." Renz Mot. at 9, Dkt. 313; Dennison Mot. at 9, Dkt. 314. However, neither motion provides any citations to the record to support these contentions. See Fed.R.Civ.P. 56(c)(1).
California's HSAA, the state counterpart to CERCLA, also creates a private right of action such that "[a]ny person who has incurred removal or remedial action costs in accordance with [HSAA] or [CERCLA] may seek contribution or indemnity from any [responsible person]...." Cal. Health & Safety Code § 25363(e). HSAA embodies the same concept of PRPs as CERCLA, and adopts CERCLA's definition of responsible parties by reference. Id. § 25323.5(a) ("`Responsible party' or `liable person,' for the purposes of this chapter, means those persons described in Section 107(a) of the federal act (42 U.S.C. Sec. 9607(a))."). Renz and Dennison's arguments with respect to Plaintiff's HSAA claim are the same as those pertaining to Plaintiff's CERCLA claims. Therefore, for the same reasons, Renz and Dennison's motions for summary judgment are DENIED
Renz and Dennison move for summary judgment on Plaintiff's third claim for equitable indemnity, fourth claim for declaratory relief, sixth claim for continuing private nuisance, seventh claim for continuing public nuisance, eighth claim for public nuisance per se, ninth claim for negligence, tenth claim for negligence per se and fourteenth claim for continuing trespass. Renz Mot. at 11, Dkt. 314; Dennison Mot. at 11, Dkt. 313. They assert that "[i]n order to prove each of these common law claims against Renz, Plaintiff must demonstrate—at a minimum—that Renz was factually responsible for the release of PCE to the environment.... There is no evidence that Defendant—released any PCE." Id. As support, Renz and Dennison offer a string citation to various cases and California civil jury instructions, without providing any explanation or analysis of how these authorities support their position. As noted, this type of conclusory argument is improper. See Indep. Towers of Wash., 350 F.3d at 929; Hibbs v. Dept. of Human Resources, 273 F.3d 844, 873 n. 34 (9th Cir.2001) (finding argument "too undeveloped to be capable of assessment"). In addition, Renz and Dennison fail to provide citations to the record to support their factual assertions, in contravention of Rule 56. Given these deficiencies, the Court finds that Renz and Dennison have failed to carry their initial burden on summary judgment, and therefore, DENIES their motions with respect to the aforementioned claims.
Next, Renz and Dennison contend that they are entitled to summary judgment on Plaintiff's first and sixteenth claims under CERCLA, second claim under HSAA, fifth claim under the Porter-Cologne Act and fifteen claim under RCRA on the ground that there is no evidence that they acted "without due care." Renz Mot. at 10, Dkt. 314; Dennison Mot. at 10, Dkt. 314. Again, neither Defendant cites any legal authority or provides any citations to the record to support their arguments. Therefore, the Court DENIES their motions for summary judgment as to these particular claims.
Plaintiff's eleventh claim for breach of lease as to Renz and Dennison is based on the 1974 Lease, which is the only lease to which they were parties. The statute of limitations for a breach of lease claim is four years. Cal. Cod. Civ. P. § 337(1). Renz and Dennison contend that any such claim accrued by no later than 1983, the date the 1974 Lease expired, and that Plaintiff filed suit more than four years after the date of accrual. Renz Mot. at 12, Dkt. 314; Dennison Mot. at 12, Dkt. 313. However, Plaintiff's breach of lease claim is subject to tolling. O'Connor v. Boeing N. Am., Inc., 311 F.3d 1139, 1147-48 (9th Cir.2002) (finding CERCLA's tolling provision applicable to state law claims). Since Plaintiff filed suit less than four years after learning in 2006 that the Property was contaminated, the Court is foreclosed from concluding, as a matter of law, that Plaintiff's claim is time-barred. Accordingly, Renz and Dennison's motions for summary judgment are DENIED with respect to Plaintiff's claim for breach of lease.
Plaintiff's twelfth claim for express contractual indemnity is based on Paragraph 8 of the Lease, which states:
FAC Ex. B ¶ 8 (emphasis added), Dkt. 281-3. Renz and Dennison take the position that the aforementioned indemnification clause applies only to personal property, and does not obligate them to indemnify Plaintiff for damage to real property, such as that caused by the PCE contamination. Renz Mot. at 12-13, Dkt. 314; Dennison Mot. at 12-13, Dkt. 313.
"In general, indemnity refers to the obligation resting on one party to make good a loss or damage another party has incurred." Prince v. Pac. Gas & Elec. Co., 45 Cal.4th 1151, 1157, 90 Cal.Rptr.3d 732, 202 P.3d 1115 (2009) (internal quotations and citation omitted). An indemnity agreement is construed under the same rules that govern the interpretation of other contracts. Crawford v. Weather Shield Mfg., Inc., 44 Cal.4th 541, 552, 79 Cal.Rptr.3d 721, 187 P.3d 424 (2008). In interpreting such an agreement, effect is to be given to the parties' mutual intent, as ascertained from the contract's language, if it is clear and explicit. Id.; see Cal. Civ. Code, §§ 1636, 1638, 1639. "Unless the parties have indicated a special meaning, the contract's words are to be understood in their ordinary and popular sense." Crawford, 44 Cal.4th at 552, 79 Cal.Rptr.3d 721, 187 P.3d 424; Cal. Civ.Code § 1644. The contract must be construed as a whole and interpreted in context so as to give effect to each provision, rather than interpret contractual language in isolation. SDC/Pullman Partners v. Tolo Inc., 60 Cal.App.4th 37, 46, 70 Cal.Rptr.2d 62 (1997) (citing Cal. Civ.Code § 1641). The interpretation of a contract generally presents a question of law for the court to decide, unless the interpretation turns on the credibility of extrinsic evidence. Plaza Home Mortg., Inc. v. N. Am. Title Co., Inc., 184 Cal.App.4th 130, 135, 109 Cal.Rptr.3d 9 (2010).
Applying the aforementioned rules of contract interpretation, the Court agrees that Paragraph 8 of the Lease does not obligate Renz or Dennison to indemnify Plaintiff for PCE contamination of the Property. The clause requires them to provide indemnification for "damage or injury" to any person or his or her "personal property." FAC Ex. B ¶ 8, Dkt. 283. No mention is made of indemnifying Plaintiff for damage to real property. Plaintiff does not directly respond to Renz and Dennison's argument, but instead asserts that the subsequent reference to "the failure of Lessee to keep the premises in good condition and repair" should be construed to include damages to real property. Pl.'s Opp'n at 7, Dkt. 325 (emphasis added). The flaw in Plaintiff's argument is that it ignores the definition of "premises" in the Lease, which states:
FAC Ex. B ¶ 1 (emphasis added). Notably, the definition of "Premises" only refers to the physical building, and makes no mention of real property on which the building is situated. Had the parties intended the indemnification clause include injury to real property, they could have included such language in the Lease. It is well settled that the Court cannot impose contractual obligations which are absent from the parties' agreement. See Vons Cos., Inc. v. United States Fire Ins. Co., 78 Cal.App.4th 52, 59, 92 Cal.Rptr.2d 597 (2000) ("We do not have the power to create for the parties a contract that they did not make and cannot insert language that one party now wishes were there."). Thus, the Court GRANTS Renz and Dennison's motions for summary judgment as to Plaintiff's claim for express contractual indemnity.
The Court GRANTS Renz and Dennison's motions for summary judgment as to Plaintiff's twelfth claim for express contractual indemnity, and DENIES their summary judgment motions in all other respects.
Mrs. Umstead moves for summary judgment, or alternatively, partial summary judgment as to all claims alleged against her in the FAC. As an initial matter, Mrs. Umstead, like Renz and Dennison, argues that all of Plaintiff's statutory, common law and contractual claims fail as a matter of law based on Plaintiff's failure to present evidence that any "release" of hazardous substances occurred between 1983 and 1986. Umstead Mot. at 6-7, Dkt. 308; FAC ¶ 17, Dkt. 283.
The above notwithstanding, the Court will address the parties' dispute regarding the timeframe at issue with respect to Mrs. Umstead's potential liability. Paragraph
Federal Rule of Civil Procedure 15(b) "permits the amendment of pleadings to conform to the evidence when the parties expressly or impliedly consent to the trial of unpleaded issues." Galindo v. Stoody Co., 793 F.2d 1502, 1512-1513 (9th Cir.1986). A request to amend may properly be presented in an opposition to a motion for summary judgment. Kaplan v. Rose, 49 F.3d 1363, 1370 (9th Cir.1994). If leave is granted, a formal amendment is not required. Galindo, 793 F.2d at 1513 n. 8. Leave to amend is a matter of the Court's discretion, based upon consideration of the following factors: "bad faith, undue delay, prejudice to the opposing party, and the futility of amendment." Kaplan, 49 F.3d at 1370.
Based on the record presented, the Court concurs with Mrs. Umstead that permitting Plaintiff to expand the relevant time period by an additional six years— from 1983-1986 to 1977-1986—would be unduly prejudicial. Since filing this action over three years ago, Plaintiff consistently has alleged that "Wiley Umstead and Kazuko Umstead (collectively `the Umsteads') operated a dry cleaning business at the Property from on or about 1983 until on or about August 1986." Compl. ¶ 15, Dkt. 1. This allegation has been restated verbatim in each of Plaintiff's four subsequent amended complaints. See First. Am. Compl. ¶ 15, Dkt. 11; Sec. Am. Compl. ¶ 15, Dkt. 102; Third Am. Compl. ¶ 17, Dkt. 204; FAC ¶ 17, Dkt. 283. The purpose of a pleading to "give the defendant fair notice of what the ... claim is and the grounds upon which it rests." Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (internal quotation and modification omitted). Consequently, Mrs. Umstead is entitled to rely on the allegations that her responsibility for the contamination is limited to the 1983-1986 timeframe. The Court finds that it would be highly prejudicial to allow Plaintiff to expand Mrs. Umstead's potential liability by expanding the relevant time period by more than double on the eve of trial.
Plaintiff counters that Mrs. Umstead cannot legitimately claim that prejudice will result by the proposed amendment given that, in her Third Party Complaint filed on January 29, 2009, she alleged that "[she] assumed a lease of the PROPERTY, entered into a new lease of the PROPERTY and/or operated a dry-cleaning business during and covering the time period from in or about 1977 until in or about August of 1986[.]" Third Party Compl. ¶ 12, Dkt. 150. Plaintiff is mixing apples with oranges. While Mrs. Umstead may have alleged that she assumed the Lease in 1977, she did not claim that she began operating Cal Cleaners at that time. Moreover, Plaintiff's argument cuts both ways. While Mrs. Umstead's allegations could arguably suggest that she had contemplated the scope of her potential liability
The next issue presented is whether Plaintiff can demonstrate that Mrs. Umstead is a PRP subject to liability under CERCLA. As discussed above, liability under CERCLA and HSAA attaches only if the defendant qualifies as a PRP under at least one of the four subsections of 42 U.S.C. § 9607(a).
Mrs. Umstead contends that she is not a proper party to Plaintiff's CERCLA or HSAA claims because she is neither an "owner" nor "operator" under 42 U.S.C. § 9607(a)(1).
Although the tests for "owner" and "operator" liability are separate and distinct, Plaintiff makes no effort to distinguish between them. Instead, Plaintiff insists that Mrs. Umstead may be deemed to be "an owner and/or operator for purposes of CERCLA" ostensibly because she, along with her husband, countersigned the 1977 Assignment in which Renz and Dennison, the original owners of Cal Cleaners, assigned their Lease to the Umsteads. See Pl.'s Opp'n at 7-8, Dkt. 324; Culver Decl. Ex. B, Dkt. 324-2. However, the fact that Mrs. Umstead co-signed the 1977 Assignment is inapposite to whether she can be held liable as an "owner" or "operator." To be an "owner," the person must hold fee title or an equivalent "bundle of rights" in the property. San Pedro, 635 F.3d at 448-49, 452 n. 10. A lease merely confers a possessory interest in property, as opposed to title ownership. Id. at 440 (citing Auerbach v. Assessment Appeals Bd. No. 1., 39 Cal.4th 153, 163, 45 Cal.Rptr.3d 774, 137 P.3d 951 (2006)). The lease assignment also did not confer upon the lessee the same bundle of rights as a fee holder, since it permitted Plaintiff, the undisputed fee title owner, to retain power to control the lessee's use of the Property. See Culver Decl. Ex. B (Ex. 2 to Umstead Depo.), Dkt. 65-2. For these reasons, Mrs. Umstead cannot be held liable as an "owner" under § 9607(a).
Nor does Mrs. Umstead's signature on the 1977 Assignment raise a genuine issue of material fact as to whether she could be liable as an "operator" under CERCLA. According to Plaintiff, the fact that Mrs. Umstead co-signed the lease assignment, coupled with the statement in deposition that she shared in some of the profits from the operation of Cal Cleaners, constitutes proof that she was part-owner of the business. This argument misses the mark. Neither of these facts ipso facto establishes that she either owned the business or—more significantly—that she possessed any authority to control or, in fact, exercised actual control over, the operations of Cal Cleaners. To the contrary, the record establishes that Mr. Umstead both owned and operated the business. Renz testified during his deposition that he sold Cal Cleaners to Mr. Umstead, as opposed to Mrs. Umstead. Adam Decl. Ex. D at 19:1-5, 20:9, 67:3-11, Dkt. 308-3. The sale to Mr. Umstead was memorialized in a Notice of Bulk Transfer and a Receipt and Agreement, both of which identify Mr. Olmstead as the purchaser. Id. Ex. D (Exs. 8 and 9 to Renz Depo.). Mrs. Umstead's name appears nowhere in these documents nor did she sign them. Id.
As for Mrs. Umstead's involvement in the business, it was limited to tasks akin to that of employee; i.e., occasional sewing, hanging clothes, counterwork and keeping the premises tidy. Adam Decl. Ex. D at 48:16-17, 164:24-165:15; Ex. E at 41:4-2-11, Dkt. 308-3; Culver Decl. Ex. C at 6:24-7:5, Dkt. 324. In fact, Plaintiff concedes that Mrs. Umstead "rarely worked" at the dry cleaners and that she "left management of the business to Wiley Umstead[.]" Pl.'s Opp'n at 2, 9, Dkt. 324. The limited evidence presented by Plaintiff does not show that Mrs. Umstead had authority to control the cause of the contamination at the time the hazardous substances were released into the environment or that she engaged in hands-on, day-to-day participation in the management of Cal Cleaners. See Kaiser, 976 F.2d at 1341; Long Beach, 32 F.3d at 1367.
As alternative matter, Plaintiff contends that Mrs. Umstead is a "covered person" under federal and state environmental laws, pursuant to California community property laws. Pl.'s Opp'n at 9-10, Dkt. 324. Specifically, Plaintiff claims that under California Family Code § 760, "Cal Cleaners is presumed to be a community property business." Id. at 9. Similarly, Plaintiff argues that Mrs. Umstead became a de facto partner in the business by virtue of sharing in the profits of Cal Cleaners. Id. However, Plaintiff fails to cite any legal authority for the proposition that Mrs. Umstead's community property or de facto partnership interest in Cal Cleaners necessarily transmutes her into a PRP within the meaning of 42 U.S.C. § 9607(a).
Finally, citing California Probate Code § 13550, Plaintiff posits that even if Mrs. Umstead is not a PRP, she nonetheless bears personal liability for her late husband's liabilities on the theory that his
Plaintiff's fifth claim for relief seeks contribution of response costs incurred in the remediation of the Property, pursuant to California's Porter-Cologne Act, Cal. Water Code § 13350(i). See FAC ¶ 48, Dkt. 283. The Porter-Cologne Act provides that a contribution claim may be brought against "[a]ny person who has discharged or discharges waste ... or who has caused or permitted, causes or permits, or threatens to cause or permit any waste to be discharged or deposited where it is, or probably will be, discharged into the waters of the state and creates, or threatens to create, a condition of pollution or nuisance." Cal. Water Code § 13304(a). The Act derives from the common law of nuisance. City of Modesto Redevelopment Agency v. Super. Ct., 119 Cal.App.4th 28, 38, 13 Cal.Rptr.3d 865 (2004). Thus, the relevant question for purposes of liability is "whether the defendant created or assisted in the creation of the nuisance." Id.
As discussed, Plaintiff acknowledges that Mr. Umstead managed Cal Cleaners and that Mrs. Umstead worked there only occasionally. See Pl.'s Opp'n at 2, 9, Dkt. 324. And, as discussed above, the record confirms that the business was owned and operated by Mr. Umstead. Given the lack of evidence sufficient to raise a genuine issue of fact regarding Mrs. Umstead's involvement in the operation and management of Cal Cleaners, the Court GRANTS her motion for summary judgment with respect to Plaintiff's claim under the Porter-Cologne Act.
Mrs. Umstead contends that Plaintiff's eleventh claim for breach of lease is time-barred, and makes almost the identical legal argument presented by Renz and Dennison in their respective summary judgment motions. See Umstead Mot. at 11, Dkt. 308. The Court has concluded above that Plaintiff's breach of lease claim is subject to tolling based on Plaintiff's failure to discover the PCE contamination until 2006. Thus, the Court DENIES Mrs. Umstead's motion for summary judgment as to Plaintiff's eleventh claim for breach of lease.
Mrs. Umstead moves for summary judgment on Plaintiff's twelfth claim for express contractual indemnity on the identical grounds set forth in Renz and Dennison's motions. Umstead Mot. at 12-13, Dkt. 308. Likewise, Plaintiff's arguments in response to Mrs. Umstead's motion are the same as those presented in its oppositions to Renz and Dennison's briefs. Pl.'s Opp'n at 11-12, Dkt. 324. Accordingly, the Court GRANTS Mrs. Umstead's motion for summary judgment as to Plaintiff's claim for express contractual indemnity.
Mrs. Umstead contends that Plaintiff's thirteenth cause of action for waste is barred for the same reason that its breach of lease claim ostensibly fails. Umstead Mot. at 11, Dkt. 308. However, since the Court has denied Mrs. Umstead's motion with respect to Plaintiff's breach of lease claim, the Court also DENIES her motion as to Plaintiff's claim for waste.
Plaintiff's fifteenth claim is based on RCRA, 42 U.S.C. § 6972(a)(1)(B), which authorizes a civil action against "any person... including any past or present generator who has contributed or who is contributing to the past or present handling, storage, treatment, transportation, or disposal of any solid or hazardous waste which may present an imminent and substantial endangerment to health or the environment." (Emphasis added). A generator is "any person, by site, whose act or process produces hazardous waste...." 40 C.F.R. § 260.10. The term "has contributed or is contributing to" requires a showing of "active involvement in handling or storing of materials for liability." Hinds Inv., L.P. v. Team Enters., Inc., No. CV F 07-0703 LJO GSA, 2010 WL 1663986, at *12 (citing Sycamore Indus. Park Assocs. v. Ericsson, Inc., 546 F.3d 847, 854 (7th Cir.2008)). For the reasons previously discussed, the Court finds that there is no evidence showing that Mrs. Umstead generated any hazardous waste or that she was actively involved in its storage or handling. The Court therefore GRANTS Mrs. Umstead's motion for summary judgment as to Plaintiff's RCRA claim.
Mrs. Umstead does not proffer any arguments specifically addressing Plaintiff's third claim for equitable indemnity, fourth claim for declaratory relief, sixth and seventh claims for nuisance, ninth and tenth claims for negligence and fourteenth claim for trespass. Without the benefit of any briefing on the particular elements necessary to establish liability with respect to each of these claims, the Court is unable to conduct an informed or meaningful analysis of whether summary judgment is warranted. Because Mrs. Umstead has failed to carry her initial burden under Rule 56, the Court DENIES her motion for summary judgment as to these claims.
The Court DENIES Plaintiff's request to amend the FAC, and finds that the relevant time period for evaluating Mrs. Umstead's liability in this action is from 1983 to 1986. In addition, the Court GRANTS partial summary judgment for Mrs. Umstead on Plaintiff's first claim for cost recovery under CERCLA, second claim for indemnity under HSAA, fifth claim under the Porter-Cologne Act, eleventh claim for express contractual indemnity, fifteenth claim under RCRA, and sixteenth claim under CERCLA. The motion is DENIED as to all other claims.
Pursuant to Rule 12(b)(6), Hoyt moves to dismiss: (1) Plaintiff's first claim under CERCLA § 107 and second claim under HSAA, as alleged in its FAC; and (2) Mrs. Umstead's first crossclaim under CERCLA § 107, second crossclaim under CERCLA § 113, third crossclaim for negligence and sixth claim for nuisance, which are alleged in her Second Amended Cross-Claim. Dkt. 284. The Court previously dismissed these claims and crossclaims and granted Plaintiff and Mrs. Umstead leave to amend. In its motion to dismiss, Hoyt contends that neither Plaintiff nor Umstead has cured such deficiencies, and
CERCLA § 107(a) provides, inter alia, that a PRP includes:
42 U.S.C. § 9607(a)(3) (emphasis added). Both Plaintiff and Mrs. Umstead seek to hold Hoyt liable under CERCLA as an "arranger" under this provision. See FAC ¶ 28, Dkt. 283; Sec. Am. Cross-Cl. ¶ 15, Dkt. 282. "[U]nder the plain language of the statute, an entity may qualify as an arranger under § 9607(a)(3) when it takes intentional steps to dispose of a hazardous substance." Burlington N. & Santa Fe Ry. Co. v. United States, 556 U.S. 599, 129 S.Ct. 1870, 1879, 173 L.Ed.2d 812 (2009) (emphasis added). The Ninth Circuit has recognized two theories of arranger liability: (1) "traditional" or "direct arranger" liability in which "the sole purpose of the transaction is to arrange for the treatment or disposal of the hazardous wastes"; and (2) "broader" arranger liability, in which "control is a crucial element of the [fact-specific] determination of whether a party is an arranger." United States v. Shell Oil Co., 294 F.3d 1045, 1054 (9th Cir.2002) ("Shell Oil"). "A person may be held liable as an `arranger' under § 9607(a)(3) only if the material in question constitutes `waste' rather than a `useful product.' ... Application of this distinction has been referred to as the `useful product doctrine.'" Cal. Dep't of Toxic Substances Control v. Alco Pac., Inc., 508 F.3d 930, 934 (9th Cir.2007) ("Alco") (citations omitted).
In its prior ruling, the Court dismissed Plaintiff and Mrs. Umstead's CERCLA claims on several grounds. First, the Court found that neither had alleged facts demonstrating that Hoyt engaged in intentional conduct to dispose of PCE. The Court explained:
1/12/11 Order at 6, Dkt. 278. Second, the Court concluded that Plaintiff had failed to
In their respective amended pleadings, Plaintiff and Umstead have now attempted to allege that Hoyt is potentially liable as an arranger for the treatment and disposal of PCE. They have also attempted to allege facts showing that the defense of the useful product doctrine is inapplicable. Both allege that the sole purpose of the Hoyt Sniff-O-Miser was to filter out PCE from air contaminated by the dry cleaning process, with the result being that, through the process of gravity, PCE was deposited into water. FAC ¶ 16, Dkt. 283; Sec. Am. Cross-Cl. ¶¶ 10-11, Dkt. 282. There is some variation in the parties' allegations, however. Plaintiff claims that in January 1975, Renz and Dennison purchased a Hoyt Sniff-O-Miser from Steam Equipment, and that "a man named `Pete'" instructed them to dispose of the PCE-laden wastewater into the toilet. FAC ¶ 16, Dkt. 283. Plaintiff also asserts that a 1979 instruction manual instructs users to dispose of wastewater directly into the sewer. Id. For her part, Mrs. Umstead makes no mention of Steam Equipment, "Pete" or an instruction manual, but instead avers that Hoyt "controlled the layout of the dry cleaning operations," and that Hoyt instructed that wastewater containing PCE should be placed in the sewer. Sec. Am. Cross-Cl. ¶ 11, Dkt. 282. Both contend that the aforementioned allegations are sufficient to hold Hoyt liable as an arranger for the treatment or disposal of hazardous waste under CERCLA. Pl.'s Opp'n at 5-6, Dkt. 330; Umstead Opp'n at 11, Dkt. 327.
In its motion, Hoyt argues that the amended CERCLA and HSAA claims should be dismissed on the grounds that: (1) there are insufficient allegations to show that Hoyt engaged in intentional conduct to render it liable as an arranger; (2) there are insufficient allegations supporting a direct arranger theory; (3) there are no allegations supporting a broader arranger theory; and (4) Plaintiff and Mrs. Umstead's allegations are insufficient to foreclose application of the useful product defense. Dkt. 284. The Court analyzes these contentions seriatim.
Under Burlington, "an entity may qualify as an arranger under § 9607(a)(3) when it takes intentional steps to dispose of a hazardous substance." 129 S.Ct. at 1879.
The sole authority cited by Mrs. Umstead in support of her argument is Vine Street, LLC v. Keeling ex rel. Estate of Keeling, 460 F.Supp.2d 728 (E.D.Tex. 2006). In Vine Street, property owners brought a cost recovery action under CERCLA against various parties, including Norge, the manufacturer of the commercial laundry equipment which was used at a laundry and drying cleaning facility known as the Norge Laundry & Cleaning Village. Plaintiff claimed that the defective design of water separators in the laundromat's coin-operated Norge dry-cleaning machines led to the discharge of contaminated wastewater into the property's sewage drainage pipes, which allowed the hazardous chemicals to corrode those pipes, escape into the surrounding soil, and contaminate the plaintiff's property. Id. at 734. The district court ruled that the extent of defendant Norge's control over the dry cleaning business established a franchise or franchise-like relationship with the dry cleaner that was sufficient for purposes of arranger liability under CERCLA. Id. at 746. In reaching this conclusion, the court focused on "Norge's level of input into and control of the facility's design and layout, its workers' installation and testing of the facility's equipment, its corporate representatives' degree of participation in the facility's opening, its training of the facility's attendants, its requirements for displays of signs, colors, and logos, and College Cleaners' own identification of the facility as a `Norge Laundry & Cleaning Village[.]'" Id. at 752. The court also noted the nexus between Norge and the disposal of hazardous chemicals was underscored by the fact that Norge connected its machines "to drains leading directly to the building's sewer lines," thus leaving the operator with "no practical choice as to how to dispose of the wastewater." Id. at 746.
Vine Street is distinguishable from the instant case. There, it was the manufacturer's direct and comprehensive involvement in the operation of its dry cleaning machines specifically, and the dry cleaning business in general, which the court found dispositive of Norge's potential liability as an arranger for the disposal of hazardous waste. Plaintiff's FAC and Mrs. Umstead's Second Amended Cross-Claim are devoid of such allegations. Rather, Plaintiff merely alleges that Renz and Dennison purchased a Hoyt Sniff-O-Miser from Steam Equipment and that someone named "Pete" instructed them to dispose of the PCE-laden wastewater into the toilet. FAC ¶ 16, Dkt. 283. Plaintiff
In sum, Plaintiff and Mrs. Umstead's allegations fail to establish that Hoyt took intentional steps to dispose of PCE which, in turn, contaminated the Property. Their allegations that Hoyt provided instructions on the use of the Sniff-O-Miser and Mrs. Umstead's conclusory allegations regarding Hoyt's control of the layout of the dry cleaning operation are too vague to comport with Federal Rule of Civil Procedure 8. The failure to sufficiently allege intentional conduct is, standing alone, fatal to Plaintiff and Mrs. Umstead's claim that Hoyt may be held liable as an arranger under 42 U.S.C. § 9607(a)(3). But even if intentional conduct were adequately alleged, Plaintiff and Mrs. Umstead's allegations fail to state a claim under either the "direct arranger" or "broader arranger" theories of liability for the reasons that follow.
To establish liability under the "traditional" or "direct arranger" theory, "the sole purpose of the transaction is to arrange for the treatment or disposal of the hazardous wastes[.]" Shell Oil, 294 F.3d at 1054. In their amended pleadings, Plaintiff and Mrs. Umstead now claim that Hoyt is an arranger for the treatment of hazardous waste, as opposed to disposal. See FAC ¶ 16 (alleging that "[t]he purpose of the [Sniff-O-Miser] was to treat and reclaim PCE from gaseous fumes vented by the dryer/reclaimer or otherwise present in ambient air from other dry cleaning plant operations.") (emphasis added), Dkt. 283; Sec. Am. Cross-Cl. ¶ 11 (alleging that the purpose of the Sniff-O-Miser "was to treat PCE contaminated air that was produced in the dry cleaning process using carbon cartridges that reclaimed the PCE.") (emphasis added), Dkt. 282. However, Plaintiff and Mrs. Umstead's allegations reveal that no "treatment" of a hazardous waste occurred. The allegations of the FAC and Second Amended Cross-Claim specifically allege that Sniff-O-Miser extracts PCE from the air so that it can be reused in the dry cleaning process. FAC ¶ 16, Dkt. 283; Sec. Am. Cross-Cl. ¶ 11, Dkt. 282. There are no allegations, however, that the allegedly hazardous substance—PCE—is itself treated in any manner. But even if the process by which the Sniff-O-Miser allegedly operates constitutes treatment, it is readily apparent from the pleadings that such treatment (or for that matter, disposal) was not its sole purpose. The Court thus finds no basis upon which to impose direct arranger liability on Hoyt.
In order to establish liability under a broader arranger theory, the defendant must "1) own or possess waste and arrange for its disposal; or 2) have the
Neither Plaintiff nor Mrs. Umstead alleges that Hoyt owned or possessed PCE or PCE-contaminated water. Nor do they allege that Hoyt had any authority or obligation to control the disposition of PCE waste. Though Mrs. Umstead attempts to highlight her allegations that Hoyt manufactured and installed the Sniff-O-Miser, provided instructions directing the disposal of PCE-contaminated water in the sewer and controlled the layout of the dry cleaning facility, such allegations do not fall within the ambit of broader arranger liability as expressed in Shell Oil because, ultimately, there are no facts showing that Hoyt owned or possessed or had any duty or authority to control the disposal or treatment of PCE used during the dry cleaning operations at Cal Cleaners.
Finally, the Court concurs with Hoyt that, as before, Plaintiff's claim and Mrs. Umstead's crossclaims are precluded by the useful product defense. Under this defense, "an entity [cannot] ... be held liable as an arranger merely for selling a new and useful product if the purchaser of that product later, and unbeknownst to the seller, disposed of the product in a way that led to contamination." Burlington, 129 S.Ct. at 1878; e.g., Cal. Dep't of Toxic Substances Control v. Payless Cleaners, 368 F.Supp.2d 1069, 1077 (E.D.Cal.2005) ("a manufacturer of PCE [cannot] be held liable as a CERCLA arranger where it has done nothing more than sell a useful chemical.") (citing City of Merced v. Fields, 997 F.Supp. 1326 (E.D.Cal.1998)).
As discussed in detail above, Plaintiff and Mrs. Umstead's allegations are insufficient to establish that Hoyt arranged for the treatment or disposal of PCE.
The Court concludes that neither Plaintiff nor Mrs. Umstead has alleged viable claims under CERCLA or HSAA, and therefore, GRANTS Hoyt's motion to dismiss Plaintiff's first and second claims for relief and Umstead's first and second crossclaims as to Hoyt.
Mrs. Umstead's third crossclaim is for negligence. To state a cognizable claim for negligence under California law, Plaintiff "must establish four required elements: (1) duty; (2) breach; (3) causation; and (4) damages." Ileto v. Glock, Inc., 349 F.3d 1191, 1203 (9th Cir.2003). To sustain a claim for negligence, the
In its January 12, 2011 Order, the Court granted Hoyt's motion to dismiss Mrs. Umstead's negligence claim, finding that it was barred by the economic loss doctrine. See 1/12/11 Order at 14, Dkt. 278. The Court explained as follows:
Id. (emphasis added). The Court further found that Mrs. Umstead had failed to allege any facts demonstrating the existence of a special duty to prevent her from suffering economic loss. Id. The Court granted Mrs. Umstead leave to amend her negligence claim. Id. at 15.
Hoyt moves to dismiss Mrs. Umstead's negligence claim, as amended, on the same grounds as before; namely, that such claim is barred by the economic loss doctrine and that there is no basis for finding a special duty to prevent economic loss. In response to Hoyt's first point, Mrs. Umstead contends that she sufficiently alleged "physical damage to the Property...." Umstead Opp'n at 7, Dkt. 327. As support, Mrs. Umstead points to the allegations set forth in Paragraph 35 of the Second Amended Cross-Claim where she alleges that as a result of "[c]ontamination and physical harm to the PROPERTY.... the soil, air and groundwater beneath and around the PROPERTY has been damaged, injured and rendered unusable." Sec. Am. Cross-Cl. ¶ 35, Dkt. 282. However, these new allegations are insufficient to sustain her amended negligence claim. Since Mrs. Umstead admittedly does not own or have any interest in the Property, any injury caused by the contamination of the Property is necessarily limited to her potential responsibility for paying a share of the cost of remediating the Property. In other words, Mrs. Umstead's loss, by definition, is limited to economic loss.
Equally infirm is Mrs. Umstead's ancillary contention that Hoyt owed her a "special duty" to prevent her from sustaining economic loss. Generally, there is no duty to prevent economic loss to third parties in negligence actions. See Greystone Homes, Inc. v. Midtec, Inc., 168 Cal.App.4th 1194, 1216, 86 Cal.Rptr.3d 196 (2008) (citing Ratcliff Architects v. Vanir Constr. Mgmt., Inc., 88 Cal.App.4th 595, 605, 106 Cal.Rptr.2d 1 (2001)). Such a duty may arise, however, if a special relationship exists between the parties that imposes a special duty to exercise ordinary care to avoid causing economic injury to the other. See Ott v. Alfa-Laval Agri, Inc., 31 Cal.App.4th 1439, 1448-49, 37 Cal.Rptr.2d 790 (1995). The existence of a special relationship depends on "(1) the extent to which the transaction was intended to affect the plaintiff, (2) the foreseeability of harm to the plaintiff, (3) the
Mrs. Umstead argues that "Hoyt's duty arises from its active role in the treatment and disposal of wastes at the Property," and from its "control over the installation and design layout of the PCE treatment system at the Property as well as its being the manufacturer and seller of the equipment." Dkt. 327 at 9. These allegations, however, do not show a special relationship between Hoyt and Mrs. Umstead. Indeed, under Mrs. Umstead's reasoning, Hoyt would owe a special duty to any user of its equipment, which would effectively render the J'Aire test meaningless. Unsurprisingly, Mrs. Umstead fails to cite any decisional authority to support her novel theory. Thus, the Court GRANTS Hoyt's motion to dismiss Mrs. Umstead's third crossclaim for negligence.
Hoyt moves to dismiss Mrs. Umstead's sixth crossclaim for nuisance. In response, Mrs. Umstead states that she is voluntarily dismissing this claim against Hoyt and has so notified counsel for Hoyt. Umstead Opp'n at 1 n. 1, Dkt. 327. The Court construes this as a request for dismissal under Rule 15(a). See Hells Canyon Preservation Council v. U.S. Forest Serv., 403 F.3d 683, 687-688 (9th Cir.2005) (holding that Rule 15(a) governs voluntary dismissal of individual claims). The Court therefore dismisses Mrs. Umstead's crossclaim for nuisance as to Hoyt.
Based on the foregoing, the Court finds that dismissal of Plaintiff's CERCLA and HSAA claims and Mrs. Umstead's CERCLA and negligence crossclaims is warranted. The next question is whether further leave to amend should be granted. The Court notes that both Plaintiff and Mrs. Umstead have had ample notice and an opportunity to cure the deficiencies which resulted in the prior dismissal of the aforementioned claims. Given the late stage of these proceedings, coupled with the futility of further amendment, the Court exercises its discretion and dismisses these claims without leave to amend. See Mir, 646 F.2d at 347.
On March 22, 2011, Renz filed a pleading styled as Defendant Kenneth Renz's Amended Cross-Complaints in Response to Fourth Amended Complaint. Dkt. 309. In this pleading, Renz alleges five crossclaims for: (1) indemnity/cost recovery under CERCLA § 107; (2) contribution under CERCLA § 113; (3) contribution under the HSAA; (4) equitable contribution and indemnity; and (5) declaratory relief. Dkt. 309. Renz's CERCLA and HSAA claims incorporate by reference, and are based upon, the allegations contained in Plaintiff's FAC. Id. ¶¶ 11, 18, 24, 30, 45.
Pursuant to Rule 12(b)(6), Hoyt now moves to dismiss Renz's first, second and third crossclaims under CERCLA § 107, CERCLA § 113 and HSAA, respectively. Dkt. 333. Hoyt's motion is virtually identical to its companion motion to dismiss certain claims in Plaintiff's FAC and Umstead's
The third and final motion filed by Hoyt is its motion for partial summary judgment, which is directed to Plaintiff's fourteenth claim for relief for trespass. Dkt. 306. As noted above, Hoyt and Plaintiff have settled their dispute. As a result, Hoyt's motion is DENIED as moot.
On November 29, 2009, Umstead filed a Third Party Complaint against various third party defendants, including Bowe and Vic. Dkt. 205. Bowe and Vic have filed two motions: (1) a motion for judgment on the pleadings under Rule 12(c), Dkt. 311; and (2) a motion for summary judgment, or alternatively, for partial summary judgment, Dkt. 312. Because the arguments presented in Bowe and Vic's summary judgment motion are dispositive, the Court does not address their motion for judgment on the pleadings.
Mrs. Umstead's first claim for indemnity/cost recovery under CERCLA § 107, second claim for contribution under CERCLA § 113 and third claim for indemnity/contribution under HSAA are based on the same flawed arranger theory of liability that she has asserted in her crossclaims against Hoyt. In addition, Mrs. Umstead's CERCLA and HSAA third party claims are contingent upon a determination that she is liable to Plaintiff based on the CERCLA and HSAA claims alleged in the FAC. E.g., Third Party Compl. ¶¶ 29-30, 36-37, 41-42, Dkt. 205. Since the Court has granted Mrs. Umstead's motion for summary judgment with respect to Plaintiff's CERCLA and HSAA claims, she no longer has any legal basis to pursue these particular claims against Bowe and Vic. Accordingly, the Court GRANTS Bowe and Vic's motion for summary judgment with respect to the first, second and third claims alleged in Mrs. Umstead's Third Party Complaint.
Mrs. Umstead's fourth claim against Bowe and Vic is for equitable contribution and indemnity. "Equitable indemnity principles govern the allocation of loss or damages among multiple tortfeasors whose liability for the underlying injury is joint and several." Expressions at Rancho Niguel Assn. v. Ahmanson Devs., Inc., 86 Cal.App.4th 1135, 1139-1140, 103 Cal.Rptr.2d 895 (2001). Under California law, equitable indemnity is not available absent the existence of a joint legal obligation to the injured party. Jocer Enters., Inc. v. Price, 183 Cal.App.4th 559, 573-74, 107 Cal.Rptr.3d 539 (2010). Stated another way, there can be no indemnity where the party from whom indemnity is sought owes no duty to the plaintiff or is not responsible for the injury. Id. Accordingly, in order for Mrs. Umstead to maintain her third party claim for equitable indemnity against Bowe and Vic, they necessarily must owe a duty to Plaintiff. Id.
In her opposition, Mrs. Umstead maintains that "[b]ecause Mrs. Umstead and
Bowe and Vic move for summary judgment on Mrs. Umstead's fifth claim for strict products liability and sixth claim for negligence based on the economic loss doctrine. Bowe/Vic Mot. at 17, Dkt. 312. As discussed above, such claims are not viable unless Mrs. Umstead can establish that Bowe and Vic owed her a special duty to prevent her from suffering economic loss. The Court's analysis of Mrs. Umstead's negligence crossclaim as to Hoyt applies with equal force to the claims alleged against Bowe and Vic. Accordingly, the Court GRANTS Bowe and Vic's motion for summary judgment with respect to Plaintiff's claims for strict products liability and negligence.
Umstead states in her opposition that she is dismissing her seventh claim for public nuisance and eighth claim for nuisance per se as to Bowe and Vic. Umstead Opp'n at 2 n. 2, Dkt. 332. The Court construes this as a request for dismissal under Rule 15(a), see Hells Canyon Preservation Council, 403 F.3d at 687-688, and therefore, dismisses Plaintiff's claims for public nuisance and nuisance per se, with prejudice.
In her ninth claim, Mrs. Umstead alleges that Bowe and Vic trespassed on the Property by installing equipment which caused PCE contamination. Third Party Compl. ¶ 75, Dkt. 205. "A trespass is an invasion of the interest in the exclusive possession of land, as by entry upon it[.]" Wilson v. Interlake Steel Co., 32 Cal.3d 229, 233, 185 Cal.Rptr. 280, 649 P.2d 922 (1982). A trespass may be accomplished by personal entry upon the property of another, or "may be accomplished by the casting of substances or objects upon the plaintiff's property from without its boundaries." Elton v. Anheuser-Busch Beverage Group, Inc., 50 Cal.App.4th 1301, 1306, 58 Cal.Rptr.2d 303 (1996) (internal quotations and citations omitted).
Bowe and Vic first argue that because Mrs. Umstead is not the owner of the Property and that her tenancy ended in 1986, she lacks standing to pursue damages for trespass. Bowe/Vic Mot. at 19-20, Dkt. 312. Though Mrs. Umstead does not respond to this contention, the Court questions its validity. "The cause of action for trespass is designed to protect possessory—not necessarily ownership—interests in land from unlawful interference." Smith v. Cap Concrete, Inc., 133 Cal.App.3d 769, 774, 184 Cal.Rptr. 308 (1982). And while Mrs. Umstead is not entitled to current possession of the Property, Bowe and Vic do not dispute that she had such possession when the trespass is alleged to have occurred. See Heilbron v. Heinlen, 72 Cal. 371, 374, 14 P. 22 (1887) (noting that the injury to a possessory interest depends upon whether "the property was
More compelling is Bowe and Vic's alternative argument that Mrs. Umstead's trespass claim is barred by having consented to the installation of the equipment on the Property. See County of Santa Clara v. Atl. Richfield Co., 137 Cal.App.4th 292, 332-33, 40 Cal.Rptr.3d 313 (2006) (holding that plaintiff could not state trespass claim based on lead contamination where the lead "was placed on plaintiffs' property by plaintiffs or with their consent," notwithstanding their lack of awareness of "lead's dangerous propensities."). Mrs. Umstead does not dispute that she consented to the installation of the Vic dry cleaning equipment, but instead argues that Vic remains liable for trespass since it allegedly knew that the operation of its equipment would result in hazardous substance contamination. Umstead Opp'n at 16-17, Dkt. 329. Neither the evidence nor the case law cited by Mrs. Umstead supports her contention. Thus, the Court finds that Mrs. Umstead has failed to raise a genuine dispute of material fact and thus GRANTS Bowe and Vic's motion for summary judgment as to Plaintiff's claim for trespass.
Mrs. Umstead's tenth and final claim against Bowe and Vic is for declaratory relief. Third Party Compl. ¶ 79, Dkt. 205. Bowe and Vic contend that a resolution of all of the claims alleged in the Third Party Complaint as to them necessarily supports their request for summary judgment on her declaratory relief claim. See Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1044 (9th Cir.2010) (affirming summary judgment on declaratory relief claim insofar as it is based on the district court's rulings on the substantive claims affirmed on appeal). Mrs. Umstead has presented no opposition to Bowe and Vic's motion with respect to her declaratory relief claim. Accordingly, the Court GRANTS Bowe and Vic's motion for summary judgment as to Mrs. Umstead's claim for declaratory relief.
The Court GRANTS Bowe and Vic's motion for summary judgment as to all claims alleged in Mrs. Umstead's Third Party Complaint, except as to her claims for nuisance, which the Court deems dismissed.
For the foregoing reasons,
IT IS HEREBY ORDERED THAT:
1. Renz and Dennison's motions for summary judgment are GRANTED with respect to Plaintiff's twelfth claim for express contractual indemnity, and are DENIED as to all other claims alleged in the FAC.
2. Mrs. Umstead's motion for summary judgment is GRANTED with respect to Plaintiff's first claim for cost recovery under CERCLA, second claim for indemnity under HSAA, fifth claim under the Porter-Cologne Act, eleventh claim for express contractual indemnity, fifteenth claim under RCRA, and sixteenth claim under CERCLA. The motion is DENIED as to all other claims alleged in the FAC. The Court DENIES Plaintiff's request to amend the FAC, and finds that the relevant time period for evaluating Mrs. Umstead's liability in this action is from 1983 to 1986.
3. Hoyt's motion to dismiss Plaintiff's first claim under CERCLA and second
4. Hoyt's motion to dismiss Renz's first and second crossclaims under CERCLA and third claim under HSAA as alleged in his Amended Cross-Complaints in Response to the Fourth Amended Complaint is GRANTED, and said claims are DISMISSED with prejudice.
5. Hoyt Corporation's motion for partial summary judgment with respect to Plaintiff's fourteenth claim for continuing trespass as alleged in the FAC is DENIED as moot in light of the settlement between Hoyt and Plaintiff.
6. Bowe and Vic's motion for summary judgment with respect to the claims alleged in Mrs. Umstead's Second Amended Third Party Complaint is GRANTED, except as to her seventh claim for public nuisance and eighth claim for nuisance per se which are deemed to have been voluntarily dismissed.
7. Bowe and Vic's motion for judgment on the pleadings is DENIED as moot.
8. Pursuant to Federal Rule of Civil Procedure 4(m), Defendant Estate of Wiley Umstead is DISMISSED, without prejudice.
9. This Order terminates Dkt. 284, 306, 308, 311, 312, 313, 314 and 333.
IT IS SO ORDERED.
