Jim 72 Props., LLC v. Montgomery Clearners

• Citation: 151 F.Supp.3d 1092
• Decision Date: 16 December 2015
• Docket Number: Case No. 2:15-cv-7543-ODW (FFMx)
• Court: U.S. District Court — Central District of California
• Parties: Jim 72 Properties, LLC, Plaintiff, v. Montgomery Clearners, d/b/a Montgomery Cleaners & Pressers and Montgomery C H; Robert B. Jasso; Viola Jasso; John W. Rich; Felipe P. Rendon; Rendon Properties LLC; and Does 1–100, inclusive, Defendants.

151 F.Supp.3d 1092

Jim 72 Properties, LLC, Plaintiff,

v.Montgomery Clearners, d/b/a Montgomery Cleaners & Pressers and Montgomery C H; Robert B. Jasso; Viola Jasso; John W. Rich; Felipe P. Rendon; Rendon Properties LLC; and Does 1–100, inclusive, Defendants.

Case No. 2:15-cv-7543-ODW (FFMx)

United States District Court, C.D. California.

Signed December 16, 2015

Phillip M. Bender, Ring Bender LLLP, Pittsburgh, PA, Jay A. Tufano, Ring Bender LLLP, Irvine, CA, for Plaintiff.

Murray M. Sinclair, Murray M. Sinclair & Associates, Los Angeles, CA, for Defendants.

ORDER DENYING DEFENDANTS FELIPE P. RENDON AND RENDON PROPERTIES, LLC'S MOTION TO DISMISS [15]

OTIS D. WRIGHT, II, UNITED STATES DISTRICT JUDGE

I. INTRODUCTION

Plaintiff Jim 72 Properties, LLC brings suit against multiple defendants, including Felipe P. Rendon and Rendon Properties, LLC (collectively “Rendon”). Plaintiff claims to have a valid and lawful assignment to all rights to bring environmental claims relating to a specific parcel of real estate in Wilmington, California (the “Subject Property”). Rendon argues that the assignment is conditional and not absolute, and therefore Plaintiff lacks standing under Article III of the United States Constitution to pursue this action. For the reasons discussed below, the Court finds that Plaintiff does have standing and DENIES Rendon's Motion. (ECF No. 15.)¹

II. FACTUAL BACKGROUND

Plaintiff's case relates to the alleged contamination of a dry cleaning business. The Subject Property is located at 1355 North Avalon Boulevard, Wilmington, California. (Complaint [“Compl.”] ¶ 5, ECF No. 1.) Anulfo Estrada and Rosa Estrada (“the Estradas”) have owned the property for many years, though neither are parties in this action. (Id. ¶ 26; Motion [“Mot.”] 1, ECF No. 15.). In May 2013, Plaintiff entered into escrow to purchase the Subject Property from the Estradas. (Request for Judicial Notice [“RJN”] 1, ECF No. 16.) To date, escrow remains open and title is yet to transfer to Plaintiff. (Id. )

Rendon owns certain real property located at 1363–1367 North Avalon Boulevard, Wilmington, California, adjacent to the Subject Property. (Mot. 1.) The property located at 1365 North Avalon is a dry cleaning business. (Compl. ¶¶ 11–12.) Sometime during the escrow process, Plaintiff commissioned an environmental study of the Subject Property. (Id. ¶ 19.) This environmental investigation included a historical records review and comprehensive soils testing. (Id. ¶¶ 19, 22; Mot. 1.) Based on the conclusions set forth in the consultant's report, Plaintiff argues that prior dry cleaning activities performed on the Rendon property before and during Rendon's ownership caused chlorinated solvents to contaminate the soil and groundwater of the Rendon property, which then migrated to the soil and groundwater underneath the Subject Property. (Compl. ¶¶ 22–25.)

On January 9, 2015, the Estradas and Plaintiff executed an Assignment Agreement (“Agreement”) with the intent to assign to Plaintiff “all right, title and interest in any claims or causes of action” held by the Estradas against Rendon and others for contamination of the Subject Property. (RJN 1.)

Rendon is now moving to dismiss the Complaint for lack of jurisdiction, arguing that Plaintiff holds neither title to the Subject Property nor a perfect, absolute, and complete assignment of rights, and thus lack standing to bring this claim. (ECF No. 15.) The parties timely filed an opposition and reply. (ECF Nos. 20, 21.) Rendon's Motion is now before the Court for decision.

III. LEGAL STANDARD

Pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure, the court must dismiss a complaint when it lacks subject matter jurisdiction. Once a party has moved to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), the opposing party bears the burden of establishing the court's jurisdiction. See Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994) ; Chandler v. State Farm Mut. Auto. Ins. Co. , 598 F.3d 1115, 1122 (9th Cir.2010). Where, as here, a defendant makes a facial attack on subject matter jurisdiction, the court must accept the plaintiff's allegations as true and draw all reasonable inferences in the plaintiff's favor when determining whether the facts alleged are sufficient to establish federal jurisdiction. Pride v. Correa , 719 F.3d 1130, 1133 (9th Cir.2013). Should the plaintiff fail to satisfy every element necessary for subject matter jurisdiction, the Rule 12(b)(1) motion should be granted. Safe Air for Everyone v. Meyer , 373 F.3d 1035, 1039 (9th Cir.2004).

Article III, Section 2, of the United States Constitution restricts the federal “judicial Power” to the resolution of “Cases” and “Controversies,” and this case-or-controversy requirement is met where the plaintiff has standing to bring his or her suit. Lujan v. Defenders of Wildlife , 504 U.S. 555, 559–60, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ; see also Cetacean Cmty. v. Bush , 386 F.3d 1169, 1174 (9th Cir.2004). To satisfy Article III standing, a plaintiff must show that (1) he has suffered an “injury in fact” that is concrete and particularized and actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged actions of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision. Bernhardt v. Cnty. of L.A. , 279 F.3d 862, 868–69 (9th Cir.2002) (citing Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., Inc. , 528 U.S. 167, 180–81, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000) ). The plaintiff bears the burden of establishing these elements, and standing must be present at the time the action is brought. Lujan , 504 U.S. at 561, 570 n. 5, 112 S.Ct. 2130.

IV. DISCUSSION

Plaintiff brings claims under the Resource Conservation and Recovery Act, 42 U.S.C. § 6972(a)(1)(B)² (“RCRA”), as well as state law claims for nuisance, negligence, and trespass. Plaintiff seeks damages and injunctive relief. (Compl. ¶¶ 34, 39–45, 51–58, 60–69.)

Because escrow has not closed on the Subject Property and title has not yet been transferred from the Estradas to Plaintiff, Rendon claims that Plaintiff has not suffered an “injury in fact” and therefore lacks standing to bring this suit. (Mot. 5.) Furthermore, Rendon claims that in order for the Assignment Agreement to confer standing on Plaintiff, the assignment must be “absolute in form” and “plainly” “vest the legal title in” the assignee. (Id. ) Absent an absolute assignment, Rendon argues that all of Plaintiff's claims should be dismissed for lack of jurisdiction.

In response, Plaintiff argues that only title to the claims, not title to the Subject Property, is a prerequisite for standing, and that the Assignment Agreement confers absolute title to these claims and thus establishes both an “injury in fact” and Article III standing. (Opp'n 2.)

A. Estradas May Validly Assign Right to Sue

Plaintiff acknowledges that he does not hold title to the Subject Property. (Comp. ¶ 26.) Because escrow is still open, title has not yet transferred to Plaintiff and the Estradas are the current owners of the Subject Property. (Mot. 1.) However, ownership of the Subject Property is irrelevant to Plaintiff's standing because Plaintiff need only have title to the claims brought in this action, not the property itself. Sprint Commc'ns Co., L.P. v. APCC Servs., Inc. , 554 U.S. 269, 284, 128 S.Ct. 2531, 171 L.Ed.2d 424 (2008) (legal effects of an assignment will not be “curtailed by the recital that the assignment was for purposes of suit”) (citing Titus v. Wallick , 306 U.S. 282, 289, 59 S.Ct. 557, 83 L.Ed. 653 (1939) ).

Formally and historically called a “chose in action,” the ability to assign one's rights and interests in suit to another has been recognized for centuries. Sprint , 554 U.S. at 275, 285, 128 S.Ct. 2531 (“We find this history and precedent ‘well nigh conclusive’ ... [that suits] by assignees, including assignees for collection only, are ‘cases and controversies of the sort traditionally amenable to, and resolved by, the judicial process.’ ”) (quoting Vt. Agency of Nat. Res. v. United States ex rel. Stevens , 529 U.S. 765, 777–78, 120 S.Ct. 1858, 146 L.Ed.2d 836 (2000) ); see also Titus , 306 U.S. at 289, 59 S.Ct. 557 (holding under New York law that a plaintiff had “dominion over the claim for purposes of suit” because the assignment purported to “'sell, assign, transfer and set over' the chose in action” to the assignee (citations omitted)); Welch v. Mandeville , 14 U.S. 233, 237 n. a, 1 Wheat. 233, 4 L.Ed. 79 (1816) (noting that common law courts “now consider an assignment of a chose in action as substantially valid”); Dennie v. Chapman , 1 Root 113, 115 (Conn.Super.Ct.1789) (assignee of a nonnegotiable note can bring suit “in the name of the original promisee or his administrator”).

1. Assignability of RCRA Claim³

While not all rights to suit are assignable, the causes of action at issue here are. First and foremost, Plaintiff claims that Rendon's dry cleaning business activities have contaminated the soil and groundwater on the Subject Property, and thus violated RCRA. (Compl. ¶ 34.) The question for this Court, then, is whether the statutory claim, with a private right of action, is assignable. The Court finds that RCRA claims are assignable.

Whether an action is assignable is often associated with whether the action would survive the death of a party. Doe v. Cutter Biological, Inc., a Div. of Miles Labs., Inc. , No. 95–35238, 1996 WL 344615, at *3 n. 5 (9th Cir. June 24, 1996) (“The assignability of a cause of action is by authorities intimately associated with, and in most cases held to depend upon, the same principle as the survival of a cause of action.”) (quoting MacLeod v. Stelle , 43 Idaho 64, 75, 249 P. 254 (1926) ). It logically flows that, if the heirs or legal representatives of a decedent would have sufficient standing to bring claims...