Santa Barbara Pistachio Ranch v. District

• Decision Date: 11 April 2001
• Docket Number: No. F033129.,F033129.
• Citation: 105 Cal.Rptr.2d 856,88 Cal.App.4th 439
• Court: California Court of Appeals Court of Appeals
• Parties: SANTA BARBARA PISTACHIO RANCH et al., Plaintiffs and Appellants, v. CHOWCHILLA WATER DISTRICT, Defendant and Respondent.

105 Cal.Rptr.2d 856

88 Cal.App.4th 439

SANTA BARBARA PISTACHIO RANCH et al., Plaintiffs and Appellants, v. CHOWCHILLA WATER DISTRICT, Defendant and Respondent.

No. F033129.

Court of Appeal, Fifth District.

April 11, 2001.

Thomas & Snell and David M. Gilmore, Fresno, for Plaintiffs and Appellants.

Brown & Peel, Fresno, and R. Ernest Montanari, for Defendant and Respondent.

OPINION

WISEMAN, J.

Santa Barbara Pistachio Ranch and Maple Leaf Pistachio Ranch (plaintiffs) filed suit against Chowchilla Water District (the District), alleging irrigation water provided by the District resulted in the death of several of their mature pistachio trees. At trial, the court ruled the proper measure of damages was the diminution in the value of plaintiffs' land and the cost of restoring the trees, but not the lost profits that could have been derived from the diseased trees. Conceding their damages were de minimis under the court's ruling, plaintiffs made an offer of proof and requested that nonsuit be entered against them. On appeal, plaintiffs contend that our holding in Serian Brothers, Inc. v. Agri-Sun Nursery (1994) 25 Cal.App.4th 306, 30 Cal. Rptr.2d 382, applies to claims for damages to permanent crops arising under trespass and nuisance theories of liability and that the proper measure of their damages includes lost future profits. We find Serian Brothers is not controlling here, since it did not directly address the issue of lost profits based on tort theories of liability. However, we conclude the court erred in granting nonsuit, as lost profits may potentially be considered in determining the applicable costs of restoring the pistachio groves.

In addition, we also reverse the order granting summary adjudication on a negligence claim based on the court's failure to provide a statement of reasons in accordance with Code of Civil Procedure section 437c, subdivision (g). Although a court's failure to provide a sufficient statement of reasons is not automatic grounds for reversal, we must reverse here due to the court's apparent decision to disregard certain contradictions in the evidence.

PROCEDURAL AND FACTUAL HISTORIES

Plaintiffs are the owners of pistachio orchards in Merced County. Pistachio trees generally do not produce any crop for the first six or seven years of their development. The trees take approximately 17 years to reach maturity and produce a full crop. The reasonable expected production life of a pistachio tree is over 100 years. Plaintiffs' trees were originally planted in 1976 and 1980 through 1981.

By the mid-1980s, plaintiffs' trees began to die from verticillium wilt, a fungal disease that attacks, through the root system, certain types of pistachio trees, as well as row crops such as cotton and tomatoes. Verticillium exists naturally in the soil, and the disease is usually fatal to the tree. In order to minimize the risk of verticillium infection, pistachio trees not otherwise resistant to the disease must be planted in virgin soil, i.e., soil not previously planted with verticillium-susceptible crops. One of plaintiffs' neighboring property owners did not appear to be suffering from verticillium contamination.

In October 1989, plaintiffs received a notice from the District suggesting there could be contaminants in the canal water from tailwater drains that dispensed irrigation water back into the canal and downstream to other growers. The District encouraged growers to remove tailwater drains from its canals. Plaintiffs questioned the District about their concern that verticillium was being introduced into the canal from tailwater drains upstream, where verticillium-susceptible crops were grown. The District assured plaintiffs there was no verticillium contamination in the canal water and, in any event, the tailwater drains were all being removed.

Over the next several years, plaintiffs' pistachio trees continued to suffer from verticillium wilt. The District assured plaintiffs that it was not possible for canal water to transmit verticillium. In December 1995, independent grower tests confirmed the water supplied by the District to plaintiffs was contaminated with verticillium. In November 1996, plaintiffs filed claims with the District for damages caused by the contaminated water. The District rejected the claims.

On July 2, 1997, plaintiffs filed suit against the District alleging one cause of action for "negligence—property damage." Plaintiffs' first amended complaint added a second cause of action for nuisance. Plaintiffs subsequently filed a second amended complaint, alleging three causes of action: 1) negligence—property damage, 2) nuisance, and 3) an untitled claim for additional damages suffered by Santa Barbara Pistachio Ranch in the 1997-1998 crop year.

The District moved for summary judgment or, in the alternative, for summary adjudication. The court denied the motion in its entirety as to Maple Leaf Pistachio Ranch. However, with respect to Santa Barbara Pistachio Ranch, the court granted the motion on the first cause of action, finding the claim was barred by the applicable statute of limitations.

On February 9, 1999, a jury trial began. The District moved in limine to exclude all testimony regarding lost profits that could be derived from the pistachio trees removed from plaintiffs' property. The District argued the proper measure of plaintiffs' damages was the diminution in property value. While not precluding any particular evidence, the court ruled that the proper measure of damages included the cost of restoring the pistachio groves and the difference in the value of the land before and after the restoration, but not lost future profits. Plaintiffs then made an offer of proof that they would have presented evidence to establish lost profits "over the period of time necessary for the tree essentially to catch up." Plaintiffs conceded that any diminution in the value of the property as a result of the wrongful acts of the District was de minimis, and requested nonsuit be entered against them in order to facilitate an appeal of the decision. The court granted nonsuit in favor of the District.

Plaintiffs timely filed their notice of appeal.

DISCUSSION

I. Nonsuit

Plaintiffs contend the court erred in granting nonsuit by improperly limiting the measure of damages as provided in Serian Brothers, Inc. v. Agri-Sun Nursery, supra, 25 Cal.App.4th 306, 30 Cal. Rptr.2d 382. We therefore address our holding in that case. But we first set forth the appropriate standard governing our review of plaintiffs' claim.

A. Standard of review

In reviewing claims for which the court grants nonsuit, we apply the following standard:

"A defendant is entitled to a nonsuit if the trial court determines that, as a matter of law, the evidence presented by plaintiff is insufficient to permit [the trier of fact] to find in his favor. [Citation.] 'In determining whether plaintiffs evidence is sufficient, the court may not weigh the evidence or consider the credibility of witnesses. Instead, the evidence most favorable to plaintiff must be accepted as true and conflicting evidence must be disregarded. The court must give "to the plaintiff[`s] evidence all the value to which it is legally entitled, ... indulging every legitimate inference which may be drawn from the evidence in plaintiff[`s] favor."' [Citation.] A mere `scintilla of evidence' does not create a conflict ...; `there must be substantial evidence to create the necessary conflict.' [Citation.]

"In reviewing a grant of nonsuit, we are `guided by the same rule requiring evaluation of the evidence in the light most favorable to the plaintiff.' [Citation.] We will not sustain the judgment `"unless interpreting the evidence most favorably to plaintiffs case and most strongly against the defendant and resolving all presumptions, inferences and doubts in favor of the plaintiff a judgment for the defendant is required as a matter of law."'

[Citation.]" (Natty v. Grace Community Church (1988) 47 Cal.3d 278, 291, 253 Cal.Rptr. 97, 763 P.2d 948; see also Stapper v. GMI Holdings, Inc. (1999) 73 Cal.App.4th 787, 791, 86 Cal.Rptr.2d 688.)

Further, matters presenting pure questions of law are subject to our independent or de novo review. (See Ghirardo v. Antonioli (1994) 8 Cal.4th 791, 799, 35 Cal.Rptr.2d 418, 883 P.2d 960; Diamond Benefits Life Ins. Co. v. Troll (1998) 66 Cal.App.4th 1, 5, 77 Cal.Rptr.2d 581.) With these principles in mind, we turn to the merits of plaintiffs' contention.

B. Serian Brothers, Inc. v. Agri-Sun Nursery

Plaintiffs rely heavily on Serian Brothers, Inc. v. Agri-Sun Nursery, supra, 25 Cal.App.4th 306, 30 Cal.Rptr.2d 382, in arguing the proper measure of damages included lost future profits from the pistachio trees. In Serian Brothers, a commercial grower purchased from a nursery peach trees that later exhibited symptoms of a bacterial disease. The grower sued the nursery for breach of contract, breach of warranty, negligence and deceit, alleging the trees were already diseased when they were purchased. The trial court granted the nursery's motion for nonsuit on all causes of action except the deceit claim. Applying Posz v. Burchell (1962) 209 Cal.App.2d 324, 25 Cal.Rptr. 896, the trial court found that the proper measure of damages was the decrease in the market value of the land as a result of the diseased trees, and the grower had presented no evidence on the market value of the land. (25 Cal.App.4th at pp. 308-310, 30 Cal.Rptr.2d 382.)

We reversed, holding that the measure of damages set forth in Posz v. Burchell, supra, was not the only measure of damages that could be utilized in a case of nonconforming nursery stock. Instead, we found the grower could choose to present expert evidence of lost profits and evidence of other incidental and consequential damages. We concluded Posz was incorrectly decided to the extent it held that only one measure of damages could properly be utilized in the situation just...