Carson Harbor Village, Ltd. v. Unocal Corp.

Page 1118

287 F.Supp.2d 1118

CARSON HARBOR VILLAGE, LTD., a limited partnership, dba Carson Harbor Village Mobilehome Park, Plaintiff, v. UNOCAL CORPORATION, a Delaware Corp.; Carson Harbor Village Mobile Home Park, a California general partnership; Richard G. Braley; Walker Smith, Jr.; County of Los Angeles; City of Compton; City of Carson, Defendants.

No. CV 96-3281 MMM(RCx).

United States District Court, C.D. California.

October 31, 2003.

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Chris M. Amantea, Michelle L. Manzo, McDermott Will & Emery, Los Angeles, CA, for plaintiff.

John P. Zaimes, Peter A. Nyquist, Weston Benshoof Rochefort, Rubalcava & MacCuish, Linda Cohen Harrel, Department of Transportation, Legal Division, Los Angeles, CA, Thomas C. Sites, Gallagher & Gallagher, Los Angeles, CA, Lisa Marie Bond, Patrick K. Bobko, and Evan J. McGinley, Richards Watson & Gershon, Los Angeles, CA, for defendants.

Lisa Marie Bond, Richards Watson & Gershon, Los Angeles, CA, Evan J. McGinley, Richards Watson & Gershon, Los Angeles, CA, Charles A. Jordan, Holley & Galen, Los Angeles, CA, for cross-claimant.

Lisa Marie Bond, Richards Watson & Gershon, Los Angeles, CA, Evan J. McGinley, Richards Watson & Gershon, Los Angeles, CA, for counter-defendant.

AMENDED ORDER GRANTING MOTIONS FOR SUMMARY JUDGMENT OF UNOCAL CORPORATION, COUNTY OF LOS ANGELES, CITY OF COMPTON, AND CITY OF CARSON; DENYING MOTION FOR SUMMARY JUDGMENT OF CARSON HARBOR VILLAGE, LTD.; AND GRANTING IN PART AND DENYING IN PART MOTION FOR SUMMARY JUDGMENT OF CARSON HARBOR VILLAGE MOBILE HOME PARK, RICHARD BRALEY AND WALKER SMITH

MORROW, District Judge.

Plaintiff Carson Harbor Village, Ltd. ("Carson Harbor") is the owner and operator of a mobile home park in Carson, California. An undeveloped, open-flow wetlands covers approximately seventeen acres of the mobile home park property. In 1993, while attempting to refinance the property, Carson Harbor discovered hazardous substances contamination. A subsequent environmental assessment revealed tar-like and slag materials in the wetlands.

In 1996, Carson Harbor sued defendants Unocal Corporation ("Unocal"), the City of Compton, the City of Carson, and the County of Los Angeles ("the Government Defendants"); Richard G. Braley, Walker Smith, Jr. and Carson Harbor Village Mobile Home Park ("the Partnership Defendants"); and the California Department of Transportation and W. Van Loben Sels ("Caltrans").¹ Its complaint alleged claims under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. §§ 9601 et seq., the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. §§ 6901 et seq., and the Clean Water Act ("CWA"), 33 U.S.C. §§ 1251 et seq. It also pleaded state law claims for nuisance, trespass, injury to easement, indemnity, and negligent nondisclosure.² Carson Harbor alleged that Unocal, which leased and used the property for petroleum production between 1945 and 1983, had dumped the tarlike and slag materials onto the property. It asserted that the Partnership Defendants were liable for the contamination as past owners of the property, and it maintained that the Government Defendants, which conducted operations upstream from the property, were liable for lead deposited on the property through stormwater run-off. Carson Harbor sought to recover the costs of its cleanup, which totaled approximately $285,000, as well as damages arising from its inability to refinance the property.

On November 4, 1997, Judge Kim McLane Wardlaw entered summary judgment in favor of defendants on all claims except the state law nuisance and trespass claims asserted against Unocal.³ See Carson Harbor Village, Ltd. v. Unocal Corp., 990 F.Supp. 1188 (C.D.Cal.1997). A Ninth Circuit panel reversed, in part, the entry of judgment on the CERCLA and indemnity claims. That decision was subsequently withdrawn, however, and, on October 24, 2001, the court issued an en banc opinion reversing the entry of summary judgment in favor of Unocal and the Government Defendants on the CERCLA claim, and in favor of the Partnership Defendants on the indemnity claim. See Carson Harbor Village, Ltd. v. Unocal Corp., 270 F.3d 863, 873, 888 (9th Cir.2001), cert. denied sub nom. Carson Harbor Village, Ltd. v. Braley, 535 U.S. 971, 122 S.Ct. 1437, 152 L.Ed.2d 381 (2002). The case was remanded to the district court, and assigned to this court for handling.⁴ Pursuant to the court's scheduling order, the Partnership Defendants, the City of Compton, the City of Carson, the County of Los Angeles, Unocal, and plaintiff conducted further discovery necessitated by the Ninth Circuit's order. Each now moves for summary judgment.⁵

I. FACTUAL BACKGROUND

Plaintiff Carson Harbor Village, Ltd. is a limited partnership owned entirely by James Goldstein and his corporation, Goldstein Properties, Inc. Goldstein, who is the President and sole shareholder of Goldstein Properties,⁶ is a highly-educated, sophisticated businessman with extensive experience in the purchase of mobile home parks.⁷ Carson Harbor is the current owner of the Carson Harbor Village Mobile Home Park, located at 17701 Avalon Boulevard in Carson, California ("the property").⁸

A. The Property

The property is a 420 space mobile home park on seventy acres in the City of Carson.⁹ It includes approximately seventeen acres of marsh, which bisect the property, traversing it from northwest to southwest.¹⁰ Plaintiff asserts that this area has been designated a protected wetlands and habitat area.¹¹ The property is subject to deed restrictions designed to preserve the area in its natural condition. These prohibit construction or dumping on the land, covering the land with non-natural cover, removing natural resources, fishing or trapping animal or aquatic life without the permission of the California Department of Fish and Game, removing timber, or allowing members of the public to trespass upon or use the property.¹²

Historically, the site has been used both as a dairy farm and for oil production and storage.¹³ Aerial photographs show oil use dating back to 1941.¹⁴ Unocal had an oil and gas lease at the property from 1945 to 1977, when it signed a Quitclaim Deed. It continued to hold a non-exclusive easement across the land subsequent to that time.¹⁵ In 1977, a special use permit issued, that permitted conversion of the site to "a complete mobile home community."¹⁶ The mobile home park currently there was built in approximately 1978.¹⁷ Carson Harbor purchased the property from the Partnership Defendants in 1983 for $7,980,000.¹⁸ Plaintiff and Carlsberg Financial Corporation acquired title to the property on or about April 1, 1983.¹⁹ Plaintiff purchased Carlsberg's interest in 1986, and became the sole owner of the property at that time.²⁰

Carson Harbor's owner, Goldstein, testified that he did not recall any discussion, inquiry or investigation regarding the environmental condition of the property at the time it was purchased in 1983.²¹ Dennis Olson, who conducted a due diligence inspection of the property on plaintiff's behalf, recalls that he looked at the wetlands, but did not physically enter the area to inspect its bottom.²² Carson Harbor knew that oil operations had been conducted on the property at the time it purchased the site in 1983.²³ It did not perform tests or soil sampling on or beneath the property to determine if there was contamination prior to purchase.²⁴

B. Tar-Like And Slag Materials

In or about 1993, Goldstein wanted to refinance the property at a lower interest rate, and submitted a loan application to G.E. Capital Corporation.²⁵ The lender retained Law/Crandall to perform an environmental assessment of the property, which revealed "a tar-like patch in the ravine" at the site.²⁶ Tar-like and slag materials that contained high levels of lead²⁷ were discovered in the wetlands area in 1993 or 1994.²⁸ The tar material was visible on the surface and covered an area approximately 20 feet by 30 feet. Subsequent characterization and excavation revealed that the tar-like and slag materials covered an area approximately 170 feet long and 75 feet wide, and extended to varying depths of approximately one to five feet. The slag material varied in both size and depth, but appeared to be most concentrated near the tar-like deposit.²⁹

1. Source Of The Tar And Slag

Carson Harbor alleges that Unocal generated and disposed of the tar and slag in the wetlands.³⁰ Unocal employee Richard Salisbury reported on March 27, 1995, that "[t]here ha[d] been numerous spills to [a] storm drain [entering the property] including at least one in the 1980s from one of our wells."³¹ At his deposition, Salisbury clarified that he knew of only one spill firsthand, but that he had heard of others from past foremen in the field.³² Salisbury stated that the tar-like material had the same consistency as material that forms at "oil and gas tank farms" when a tank or pipeline leaks and the leaks are absorbed into the soil.³³

Plaintiff's expert, Dr. Hassan Amini, asserts that the tar material was most likely tank bottom sludge from oil production and refining operations conducted by Unocal on or around the property. Specifically, he states that the tar material contained high concentrations of petroleum hydrocarbons, lead, and certain volatile organic compounds (BTEX), all of which are characteristic of materials originating from oil production. He notes further that the slag material had volcanic-like characteristics indicative of material that originated from a high-temperature furnace process and was subjected to abrupt cooling.³⁴

Amini and plaintiff's second expert, Dr. Robert Ghirelli, as well as James Ross, a senior water resource control engineer at the Regional Water Quality Control Board ("RWQCB"), all believe that the tar-like and slag materials...