Beck Development Co. v. Southern Pacific Transportation Co., s. C015216

CourtCalifornia Court of Appeals
Writing for the CourtSPARKS
Citation52 Cal.Rptr.2d 518,44 Cal.App.4th 1160
Parties, 96 Cal. Daily Op. Serv. 2847, 96 Daily Journal D.A.R. 4687 BECK DEVELOPMENT CO., INC., Plaintiff and Respondent, v. SOUTHERN PACIFIC TRANSPORTATION COMPANY, Defendant and Appellant. BECK DEVELOPMENT CO., INC., Plaintiff and Appellant, v. DEPARTMENT OF TOXIC SUBSTANCES CONTROL, Defendant and Appellant, City of Tracy, Defendant and Respondent.
Docket NumberNos. C015216,C015905,s. C015216
Decision Date24 April 1996

Page 518

52 Cal.Rptr.2d 518
44 Cal.App.4th 1160, 96 Cal. Daily Op. Serv. 2847,
96 Daily Journal D.A.R. 4687
BECK DEVELOPMENT CO., INC., Plaintiff and Respondent,
BECK DEVELOPMENT CO., INC., Plaintiff and Appellant,
City of Tracy, Defendant and Respondent.
Nos. C015216, C015905.
Court of Appeal, Third District, California.
April 24, 1996.
Review Denied July 31, 1996.

[44 Cal.App.4th 1170] Freeman, Brown, Hartmann, Sperry & D'Aiuto, Gerald A. Sperry, Glen C. Hansen and James Belford Brown, Stockton, for Plaintiff and Appellant in No. C015905 and Plaintiff and Respondent in No. C015216.

[44 Cal.App.4th 1171] Diepenbrock, Wulff, Plant & Hannegan, John S. Gilmore and Charity Kenyon, Sacramento, for Defendant and Appellant No. C015216.

Daniel E. Lungren, Attorney General, Charlton G. Holland III, Senior Assistant Attorney, Dennis Eckhart, Supervising Deputy

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Attorney General, and Michael V. Hammang, Deputy Attorney General, for Defendant and Appellant in No. C015905.

Kroloff, Belcher, Smart, Perry & Christopherson, and Orlie L. Curtis, Stockton, for Defendant and Respondent.

SPARKS, Acting Presiding Justice.

In these consolidated appeals we consider issues arising out of the subsurface contamination of land. Among other points, we consider the nature and propriety of a moratorium recommendation by the state agency responsible for toxic substance control. We also examine the relationship between the laws dealing with hazardous waste properties and those governing land use regulation. Finally, we consider public and private nuisances, the statute of limitations on nuisances and the various rules for determining whether a nuisance is permanent or continuing.

The property in question belongs to the Beck Development Co., Inc. (Beck), and is located in the City of Tracy (the City) in San Joaquin County. The contamination occurred through the ownership and use of the property by Southern Pacific Transportation Company (Southern Pacific) prior to 1945. 1 Beck purchased the property in 1985 in order to subdivide and develop it for residential purposes, but has been inhibited by the Department of Toxic Substances Control (the Department) 2 and the City due to the subsurface contamination. As a result of these inhibitions, Beck filed suit [44 Cal.App.4th 1172] against the Department, the City, Southern Pacific and others. Beck sought a series of declarations concerning its property, an extraordinary writ, general damages in the sum of $1,440,000 and other relief. In its cause of actions against the Department, Beck sought a peremptory writ of mandate commanding the Department "to exercise its discretion and determine whether [Beck's] real property is hazardous or nonhazardous property, and if hazardous, the appropriate mitigation measures or remedial action necessary to permit utilization of [Beck's] real property for residential purposes." As to the City, Beck sought an identical writ commanding the City to accept for filing, file, and process Beck's proffered tentative subdivision map. As to Southern Pacific, Beck sought a mandatory injunction requiring it to abate the nuisance by remediating the site and an award of incidental damages.

After bifurcated court trials, the following judgments were entered: (1) in favor of Beck and against the Department granting a writ of mandate compelling the Department to accord Beck a public hearing on whether its land should be designated hazardous waste property (Health & Saf.Code, § 25220 et seq. [hereafter undesignated section references are to the Health and Safety Code] ); (2) in favor of the City and against Beck on Beck's claim that the City must accept and consider its application for approval of a tentative subdivision map; and (3) in favor of Beck and against Southern Pacific for abatement of a nuisance and incidental damages of $1,205,613.

We shall modify the judgment in favor of Beck against the Department and then affirm as modified. We shall reverse the judgment

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in favor of the City and against Beck and remand with directions to the trial court to grant declaratory relief in favor of Beck. Finally, we shall reverse the judgment in favor of Beck and against Southern Pacific and remand with directions to enter judgment in favor of Southern Pacific.


The genesis of this litigation began in 1926. In that year Southern Pacific acquired a large block of real property, including the realty involved here. Around 1926, Southern Pacific constructed a large, oval-shaped, concrete oil reservoir on the property.

The reservoir was approximately 1,178 feet in length, 583 feet in width, and about 31 feet deep. It had an oil storage capacity of about 3 million [44 Cal.App.4th 1173] barrels. 3 It occupied about 16 acres and was constructed so that the bottom 8 feet were below surface level. In order to accomplish this, Southern Pacific excavated soil from the center and then used the soil to construct levees around the outside walls that protruded from the ground. The walls and floor were made from reinforced concrete approximately six inches thick. A roof was constructed over the reservoir which was supported by timbers and covered with silver tar paper. The reservoir was surrounded by eight towers with attached lightning rods. While the reservoir was in use, more than 3,000 barrels of unspecified fuel oil were applied to the levees for erosion control.

From about 1926 until 1945, Southern Pacific used the reservoir for storing "Bunker C" oil. Bunker C oil is a residual fraction of crude oil. 4 It remains within crude oil residue after the removal of lighter fractions such as naphtha gases, gasolines, jet fuels, kerosines, diesel fuels, and motor oils. Bunker oil is the last fraction that is removed before the crude oil residue consists of solids such as paraffins, waxes and asphalt. Since the refining process is designed to separate and remove lighter and more volatile fractions at each step, the residue after each step should contain fewer solvent chemicals that may give rise to health concerns. The process is not perfect, however, and lower fractions may still contain some potentially injurious constituents. Also as a result of the refining process, each fraction will be more viscous than earlier fractions. Bunker C oil, as one of the lowest fractions, is extremely viscous. In the record it was variously described with terms such as: molasses in January; thick and tar-like; gelatinous; and most commonly "gooey." In any event, Bunker C oil is relatively immobile and must be heated to a significant degree in order to be moved through a pipeline and prior to burning as fuel.

The Bunker C oil stored in the reservoir was used by Southern Pacific as fuel for its locomotives and, during World War II, by the United States Navy as fuel for its ships. By 1945 Southern Pacific had switched to diesel oil as locomotive fuel and it closed down its Bunker C oil reservoir. Although most of the Bunker C oil was removed from the reservoir, a small residue remained.

[44 Cal.App.4th 1174] In 1945, Southern Pacific sold the parcel of property which included the site of the reservoir to John Hachman for $4,500, excepting therefrom the mineral rights on or under the property. Hachman later acquired additional property from Southern Pacific so that, in all, he owned 72 acres surrounding the oil reservoir. Hachman dismantled the roof which covered the reservoir for the purpose of reselling the timber which,

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due to war rationing, was readily salable. After the dismantling was completed, the reservoir sat open and unused for a number of years. Although Hachman is deceased, his sons recalled that water accumulated in the bottom of the reservoir and the water level would rise in the summer during periods of agricultural irrigation and would drop in the winter. A small layer of oil floated on the top of the water in the tank.

In 1953 a fire started inside the reservoir. The fire was a noted event in the community at the time. It sent plumes of dark smoke into the air which were visible from miles away. The fire burned for a couple of days before burning itself out. Hachman's son, also named John Hachman, testified that it appeared the fire was consuming tumbleweeds, timber and tar. After the fire there was ash and water remaining in the reservoir with a small amount of residue near the pump station that appeared "dried up just the same as our stuff, that our streets are paved with." After the fire Hachman collapsed the walls of the reservoir into the center and bulldozed the soil from the levees back into place in order to bury the old reservoir about eight feet under the surface.

In 1956 or 1957, Hachman leased the 72-acre parcel to Mitsuo Kagehiro for farming purposes. There were some large blocks of concrete from the reservoir remaining on the surface of the land and Kagehiro moved them to the side of the property where they remained until after this litigation commenced. Kagehiro had heard about the old storage reservoir and knew there was concrete under parts of the land, but he never experienced any problems with the land and over the years forgot about the reservoir. In 1959 Kagehiro and his wife, Elsie, purchased the land from Hachman. Kagehiro farmed the property for the next 25 years.

By 1984 the City of Tracy was considered a prime location for residential development due to its proximity to the Bay Area. The City took certain steps to prepare for expansion, such as providing for streets, sewerage facilities and schools. It annexed and rezoned former agricultural properties, including the Kagehiro property, for residential development. Beck, a large, established real estate developer from the Stockton area, wanted to participate in the expansion and began looking for property to...

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