Coppola v. Smith
| Decision Date | 15 January 2015 |
| Docket Number | CASE NO. 1:11-cv-01257-AWI-BAM |
| Court | U.S. District Court — Eastern District of California |
| Parties | VIOLA COPPOLA, et al., Plaintiffs v. GREGORY SMITH, et al., Defendants AND RELATED CLAIMS |
ORDER ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
This is an environmental law case that arises from the chemical contamination of property surrounding a dry cleaning business in Visalia, California. Plaintiffs (collectively "Coppola") have brought suit against inter alia Martin and Martin Properties, LLC ("M&M"). The Court previously dismissed the Third and Fourth Amended Complaints under Rule 12(b)(6) following motions filed by various defendants. The active complaint is the Fifth Amended Complaint ("FAC"), and there are numerous counterclaims and cross-complaints that have been filed by various defendants. Now before the Court is M&M's motion for summary judgment. For the reasons that follow, the Court will grant summary adjudication on certain issues but otherwise deny M&M's motion.
Since 1987, Coppola has owned and operated a dry cleaning facility located at 717 W. Main St., Visalia, California ("717 W. Main"). See DUMF's 1, 2. Coppola has used tetrachloroethylene (PCE) in their dry cleaning business since at least 1994. DUMF 2. The California Department of Toxic Substances Control ("DTSC") and the United States Environmental Protection Agency ("EPA") have investigated 717 W. Main. See DUMF 3. As a result of the investigation, it was concluded that there was a "release" or a "threatened release" of PCE from 717 W. Main into the soil and groundwater. See FAC Ex. A §§ 2.4, 3.3. In June 2011, DTSC issued an order ("2011 Order") for Coppola to investigate and remediate the contamination caused by their dry cleaning business. See DUMF 4; FAC Ex. A.
M&M is a local real estate investment company operated by its managing member, William Martin, and by Joshua Martin, the past Vice President of Martin Enterprises, Inc. (the management company of M&M). DUMF 5. In March 2006, Martin and Martin Properties, LP ("Martin LP") filed a Certificate of Conversion with the Delaware Secretary of State in order to convert from an LP to an LLC. See Hsu Dec. ¶ 3 & Ex. A. Following the filing of the Certificate of Conversion, Martin LP became M&M in March 2006. See id.
From 1959 to possibly 1971, a dry cleaning business known as Miller's Dry Cleaners operated at 110 N. Willis St., Visalia, California ("110 N. Willis"). See FAC ¶ 34, Ex. C § 6.0. However, in the early 1970's, a commercial office building was built at 520 W. Main St., Visalia, California. See Wm. Martin Dec. ¶ 13; FAC Ex. C § 6.0. The land parcel for 520 W. Main included 110 N. Willis, and in the construction process, the area that had been known as 110 N. Willis became part of the northern portion of 520 W. Main St. See FAC Ex. C § 6.0.
In March 1995, Martin LP purchased 520 W. Main ("the Property") for $1.425 million from Benart-Main Street Investors ("Benart"). See Wm. Martin Depo. 19:19-25; Wm. Martin Dec. ¶ 4; DUMF 6. Prior to purchasing the Property, Martin LP reviewed an October 1991 Preliminary Site Assessment ("PSA") by The Twining Laboratories, Inc. (a geotechnical andenvironmental consulting company), a November 1991 Subsurface Investigation Report ("SIR") prepared by Environmental Science and Engineering, Inc., and a September 1991 Preliminary Structural Evaluation ("PSE") prepared by Teter Consultants.2 See Wm. Martin Dec. ¶ 6. The PSA, the SIR, and the PSE had been obtained by and prepared for Benart.3 See id. & Exs. B, C. Martin LP also made physical inspections of 520 W. Main and "walked the streets" in the area, had discussions and interviews with Benart, local business owners, and consulted with a financial consultant regarding the past use and history of the Property.4 See id. at ¶ 5; Wm. Martin Depo. 77:24-78:4. Martin LP did not retain an engineer, a geologist, or any type of environmental professional to inspect the Property. See Wm. Martin Depo. 75:14-25. Martin LP's pre-purchase investigation did not identify any PCE contamination or any past operation of a dry cleaning business at the Property. See id.
The PSA states that it reports the results of a preliminary site assessment of the environmental condition of the Property. See DUMF 16; Wm. Martin Dec. Ex. B. The purpose of the PSA was to evaluate the environmental condition of the Property and adjacent properties based on past and current activities, identify reported soil and groundwater contamination sites and incidents up to 1 mile from the Property, and recommend additional studies as deemed appropriate. See id. at p.2. The PSA states that it was prepared in accordance with current standards of professional practice and in accordance with the duties of environmental engineers in 1991. See Wm. Martin Dec. Ex. B at 27; DUMF 17. The PSA considered regional geologic andhydrological factors including soil type and groundwater characteristics. See Wm. Martin Dec. Ex. B at pp. 2-12; DUMF 18. The PSA reviewed a preliminary title report for existing environmental liens, conducted a visual reconnaissance of the Property, conducted a reconnaissance of the area within a quarter mile radius, reviewed aerial photographs to evaluate past history and use, searched and reviewed regulatory agency records to identify environmental issues, and interviewed governmental agency personnel and others who may have knowledge of the Property's condition and past use. See id. The PSA indicated that from the 1930's to the 1950's, the Property was used as a service station, and after 1973 as a commercial office building. See Wm. Martin Dec. Ex. B at p.13; DUMF 19. The PSA indicated that from 1958 to 1972, no listing for 520 W. Main St. was recorded. See id. The PSA contained no finding of any usage relating to dry cleaning or similar operations. See Wm. Martin Dec. Ex. B; DUMF 20. The PSA stated that the presence of water wells, surface impoundments, soil staining, or evidence of underground or aboveground storage tanks were neither discovered nor observed on the Property, and that a review of the area surrounding the Property indicates that no known or suspected hazardous waste properties are located within 2,000 feet. See Wm. Martin Dec. Ex. B at pp.14, 23-24; DUMF 21. The PSA noted that two wells, Well 06-02 and Well 06-03, contained 0.8 parts per billion and 1.8 parts per billion, respectively, of PCE but that both numbers did not exceed Maximum Concentration Levels ("MCL"). See Wm. Martin Dec. Ex. B at p.21. The PSA concluded that there were some asbestos issues with the building, but mitigation of the asbestos was made a condition of the purchase, and the asbestos was removed prior to closing the purchase. See Wm. Martin Dec. Ex. B at pp.14-16, 23-24; DUMF 22. However, the PSA also stated that based on information from three sources, "environmental concerns to soil and groundwater at the Property from on-site sources cannot be evaluated with information made available to Twining . . . ." Wm. Martin Dec. Ex. B at 23. Further, environmental concerns to soil and groundwater from 3 of 14 off-site sources within one-half mile of the Property could not be evaluated. See id. at p.26. The PSA limited its findings to the conditions that existed at the time, noted that soil and groundwater samples at the Property for chemical analysis were not included, and explained that changes in existing conditions at the subject property due to time lapse, natural causes, oroperations adjacent to the Property may render the PSA's conclusions invalid unless the changes are reviewed and the conclusions approved. See id. The PSA stated that the applicable standard of care is time sensitive. See id. at p. 27. The PSA warned that the work was performed for the sole use of Benart, and others who may rely on the findings have a duty to determine the adequacy of the report for their intended use. See id.
The PSA was the first report of its kind that M&M had ever reviewed. See Wm. Martin Depo. 96:22-97:1. Although Martin LP owned other real estate, those properties were all farmland. See id. at 41:20-42:11. Martin LP's financial consultant advised Martin LP that if a property has a structure on it, a Phase I environmental report was necessary. See id. at 42:12-24.
The SIR was designed to investigate the past existence of a fuel service station and possible underground storage tanks, and to identify any contamination of the soil or subsurface. See Wm. Martin Dec. Ex. D at pp.172-173. The SIR indicated that two soil borings on the Property were taken for analysis.5 See id. No stressed vegetation or petroleum staining was purportedly observed. See id. Based on the soil samples, the SIR purportedly concluded that the boring contained no detectable petroleum hydrocarbons. See id.
Following the purchase of the Property, and in connection with obtaining a real-estate loan, an appraisal was prepared for Martin LP in December 1995. See DUMF 9. The appraisal report valued the Property at $1.425 million, and did not identify any PCE contamination, any prior use of the Property as a dry-cleaner, or any reason to suspect PCE contamination. See id.; Wm. Martin Dec. Ex. D. The $1.425 million evaluation matched Martin L.P.'s purchase price. See DUMF 22. The appraisal included various assessments, inspections, and reviews, including reviewing the PSA and the SIR. See Wm. Martin Dec. Ex. D; see also DUMF 25. The appraisal indicated that there were no signs of possible or known toxic or hazardous waste problems, except for the asbestos which had been removed. See id.
In August 2006, DTSC issued a Site Screening Assessment ("2006 Assessment") for the EPA. See Boon Dec. Ex. G. This Assessment identified the site at issue as "Former Miller Dry Cleaners," located at "110 N. Willis Street, Visalia, Tulare, CA." Id. The 2006 Assessment statesin part, ...
To continue reading
Request your trial