Corona v. Pacific Coast Building Products, Inc.

AUDREY M. CORONA et al., Plaintiffs and Appellants, v. PACIFIC COAST BUILDING PRODUCTS, INC. et al., Defendants and Respondents.

C085128

California Court of Appeals, Third District, Sacramento

June 22, 2021

NOT TO BE PUBLISHED

Super Ct. No. 34-2014-00172856-CU-PO-GDS

RAYE P. J.

In 2014, Carlos Corona was working for a recycling business Basalite Concrete Products, LLC (Basalite), on a bale breaker machine that breaks up bales of plastic bottles into pieces.^[1] He slipped and fell on a conveyor belt and was drawn into the machine and killed. Plaintiffs, his spouse and children, allege that the bale breaker machine lacked safety devices, such as a guard on the conveyor belt before the machine or an emergency cut-off switch, which would have prevented his death.

The trial court granted summary judgment to defendants Pacific Coast Building Products, Inc. (Pacific Coast), the parent company of Basalite, and Whal 2007, LLC, Whal Properties L.P., and Whal G.P., LLC (collectively, Whal), the companies that owned the property in Lodi where the Basalite facility was located.

Plaintiffs contend that there are triable issues of negligence and negligence per se whether Pacific Coast violated Labor Code section 6406 prohibiting any person from removing safety devices. Plaintiffs argue that Pacific Coast owned the bale breaker and sold it to Basalite with the safety devices removed. However, plaintiffs' second amended complaint does not mention Labor Code section 6406 or allege any facts indicating that Pacific Coast removed safety devices from the bale breaker or sold it to Basalite with the safety devices removed. We conclude that plaintiffs cannot defeat summary judgment by raising a new theory that they failed to plead.

Moreover even if this theory had been pled, plaintiffs cannot raise a triable issue of material fact that Pacific Coast owned the bale breaker. It is undisputed that Epic Plastics, Inc. (Epic), which owned the bale breaker, became Pacific Coast's subsidiary in a stock purchase acquisition. A basic tenet of corporation law is that a parent corporation does not own the assets of a subsidiary.

In addition, plaintiffs argue that the trial court abused its discretion in sustaining defendants' objections to declarations of plaintiffs' experts, who opined that Pacific Coast owned the bale breaker. Plaintiffs cite cases involving the trial court's improperly sustaining a large number of objections in a “blanket” ruling. Here, the trial court sustained a relatively small number of objections. In any event, plaintiffs fail to explain how any of defendants' objections were unreasonable or how plaintiffs were prejudiced by the exclusion of expert opinion that Pacific Coast owned the bale breaker, given that, as a matter of corporation law, a parent does not own the assets of a subsidiary.

Finally, plaintiffs contend that the trial court erroneously denied their motion for a new trial to reverse the summary judgment rulings based on new evidence in the form of “depreciation schedules” that show Pacific Coast depreciated the bale breaker, which plaintiffs contend show that Pacific Coast owned the machine. We find that the schedules refer to depreciation by Epic, not Pacific Coast, and failed to support plaintiffs' unpled theory that Pacific Coast sold the bale breaker to Basalite with the safety devices removed.

Plaintiffs contend in opposition to Whal's motion for summary judgment that Whal violated Labor Code section 6405 requiring property owners not to “construct or cause to be constructed a place of employment that is not safe and healthful, ” a theory also not pled in the second amended complaint and contrary to undisputed evidence that Basalite was in sole charge of the operations at the Lodi facility.

As to both Pacific Coast and Whal, plaintiffs contend the trial court erred in not considering regulations promulgated by the California Occupational Safety and Health Administration (Cal-OSHA) as evidence of the standard of care. Cal-OSHA regulations may set a standard of care in a negligence case but they do not create a duty of care to the employee of another employer.

We affirm summary judgment in favor Pacific Coast and Whal and denial of plaintiffs' motion for a new trial.

FACTUAL AND PROCEDURAL BACKGROUND^[2]

Plaintiffs' second amended complaint alleged that Carlos Corona was killed while working for his employer, Basalite. He was cleaning the conveyor belt that moves a bale of plastic bottles into the bale breaker machine to be broken up. He slipped and was drawn into the “knockers” that break up the bottles.

Plaintiffs alleged that: (1) Whal was controlled by Pacific Coast and these entities had overlapping management and board members; (2) Pacific Coast through Whal purchased the Lodi facility in 2007, at which time “the bale breaker and the conveyer belt leading to it were set up in the same configuration with the same lack of a guard and emergency switches that caused the death of Carlos Corona”; (3) Whal was “acting as the real estate holding company” for Pacific Coast; (4) Pacific Coast and Whal “owned, controlled, and operated” the Lodi property, including the bale breaker; and (5) Pacific Coast owned and controlled Basalite.

The second amended complaint alleged that Mr. Corona's death was proximately caused by the absence of a guard to prevent an operator from falling into the machine and an emergency stop mechanism for Mr. Corona to stop the machine when he fell. Without these safety protections the bale breaker and conveyor violated four specified regulations promulgated by Cal-OSHA. Defendants allegedly knew or should have known of the dangers of the bale breaker without these safety protections. Defendants and their employees allegedly observed and inspected the bale breaker and conveyor belt and had knowledge of, and the right and ability to, cure these dangerous conditions.

Plaintiffs asserted causes of action for negligence, premises liability, negligence per se, ^[3] and third party beneficiary to written contract against Pacific Coast and Whal.^[4]

Plaintiffs also alleged a negligence claim against West Salem Machinery, Inc. (West Salem), the company that manufactured the machine. Plaintiffs alleged failure to warn and strict products liability claims against West Salem alone. Both the failure to warn and strict products liability claims alleged that the bale breaker was marketed, manufactured and sold to the other defendants by West Salem without the guard or emergency switch.^[5]

Plaintiffs' negligence claim against all defendants stated that, at Basalite's facility in Lodi, “[d]efendants, and each of them, negligently owned, constructed, maintained, controlled, entrusted, loaned, managed, supervised the use of, and operated said bale breaker so as to allow its use without a proper guard and emergency switches so that the person inadvertently pulled into the machine would be killed.” Plaintiffs' premises liability claim repeated this allegation verbatim. The negligence per se claim identified four Cal-OSHA regulations whose violation allegedly caused Mr. Corona's death.^[6]

Pacific Coast moved for summary judgment or, alternatively, summary adjudication contending: (1) a landlord is not liable for injury caused by a dangerous appliance owned by a tenant unless the landlord exercises active control over it; (2) the workers' compensation exclusive remedy barred plaintiffs' joint control theories; (3) the negligence per se claim failed because Cal-OSHA regulations do not apply to Pacific Coast and Whal; and (4) the third party beneficiary claim was without merit.^[7]

Whal also filed a motion for summary judgment or, alternatively, summary adjudication, and joined in Pacific Coast's motions. Like Pacific Coast, Whal contended that it was not liable for injuries from appliances controlled by a tenant and the third party beneficiary claim had no merit. In addition, Whal argued that: (1) none of the defendants could be held liable on an alter ego basis; (2) defendants were not liable merely because they have common management or officers; and (3) the bale breaker was not a “real property fixture.”

In opposition to Pacific Coast's motion, plaintiffs contended the motion was procedurally defective and raised two substantive arguments: (1) Pacific Coast's violation of Labor Code section 6406^[8] was negligence per se and Cal-OSHA regulations could be used to establish standard or duty of care in all negligence actions, not just against employers; and (2) Pacific Coast's sale of the bale breaker to Basalite without safety devices was negligent. On the second point, plaintiffs asserted that Pacific Coast “or its predecessor removed critical safety devices from the bale breaker and then transferred the defective and unsafe bale breaker to Basalite, ” and was “therefore liable based upon simple negligence.” Plaintiffs explained that they “do not allege that [Pacific Coast's] liability arises from its ownership of Basalite. Rather, it [sic] alleges, inter alia, that [Pacific Coast] removed safety guards and devices from the bale breaker.”

In opposition to Whal's motion, plaintiffs argued that Whal was liable: (1) as a landowner and landlord for breach of the duty to maintain property free from dangerous conditions because Whal knew or should have known of the dangerous condition and had sufficient control to take reasonable steps to prevent foreseeable harm, citing Labor Code section 6405 as “instructive”;^[9] and (2) as owner of the bale breaker because Whal owned the fixtures and personal property at the Lodi location. Plaintiffs also repeated the argument that Cal-OSHA regulations could be used to establish a standard or duty of care for purposes of negligence per se in all...