Mangini v. Aerojet-General Corp.

• Citation: 912 P.2d 1220,12 Cal.4th 1087,51 Cal.Rptr.2d 272
• Decision Date: 04 April 1996
• Docket Number: No. S041557,AEROJET-GENERAL,S041557
• Court: United States State Supreme Court (California)
• Parties: , 912 P.2d 1220, 42 ERC 1551, 96 Cal. Daily Op. Serv. 2360, 96 Daily Journal D.A.R. 3856 Catherine Holthouse MANGINI et al., Plaintiffs and Appellants, v.CORPORATION, Defendant and Appellant.

Page 272

51 Cal.Rptr.2d 272

12 Cal.4th 1087, 912 P.2d 1220, 42 ERC 1551,

96 Cal. Daily Op. Serv. 2360,

96 Daily Journal D.A.R. 3856

Catherine Holthouse MANGINI et al., Plaintiffs and Appellants, v. AEROJET-GENERAL CORPORATION, Defendant and Appellant.

No. S041557.

Supreme Court of California.

April 4, 1996.

Rehearing Denied June 20, 1996.

McCutchen, Doyle, Brown & Enersen, John R. Reese, San Francisco, Christopher Berka, Claire T. Cormier, San Jose, and Steven G. Rosen, San Francisco, for Plaintiffs and Appellants.

Jose N. Uranga, Fairlawn, OH, Lasky, Haas, Cohler & Munter, Lasky, Haas & Cohler, Moses Lasky, Richard Haas, Charles B. Cohler, Epstein, Becker & Green and Janet Morgan, San Francisco, for Defendant and Appellant.

McClintock, Weston, Benshoof, Rochefort, Rubalcava & MacCuish, Steven W. Weston and Edward J. Casey, Los Angeles, as Amici Curiae on behalf of Defendant and Appellant.

ARABIAN, Justice. ^**

We granted review to examine the law of nuisance as it bears on a suit seeking damages for the contamination of land through the dumping of toxic wastes. Specifically, we consider the requirement that, in attempting to avoid the bar of the statute of limitations by demonstrating that the nuisance is "continuing" (or "temporary") rather than "permanent," the plaintiff must present substantial evidence that the contaminated condition is one that is both subject to remediation (or cleanup) and that the cost of cleanup is "reasonable."

As will appear, we conclude that the Court of Appeal was correct in holding in this case that, because plaintiffs had failed to present any substantial evidence that the contamination of their land as a result of defendant Aerojet-General Corporation's (Aerojet's) practice of dumping and burning a toxic solvent was capable of being abated at a reasonable cost, the nuisance must be deemed permanent. Because the three-year statute of limitations applicable to such a permanent nuisance had long since expired on the date this suit was filed, the Court of Appeal held that plaintiffs' nuisance and trespass claims were time barred. We agree with the Court of Appeal's analysis--adopting both its result and much of its reasoning--and conclude that the trial court should have granted Aerojet's motion for judgment notwithstanding the jury's award of some $13.2 million in damages to plaintiffs. We emphasize, however, that our ruling in this case is confined to the statute of limitations issue before us. We express no opinion on the question whether a plaintiff who has filed a timely nuisance action is required to prove that abatement can be accomplished at a "reasonable cost" in order to be entitled to an injunction requiring the wrongdoing party to remedy the damage to the property.

I

A

Aerojet is a large industrial manufacturer of solid fuels, among other products, used by the nation's space and military technology agencies in the propulsion of rockets. The company operates a large plant in the Sacramento Valley where it produces these fuels. In 1960, Aerojet leased from the Cavitt family some 2,400 acres of unimproved land in the valley for the purpose of disposing of waste materials generated in its nearby solid fuel production plant. By the terms of the lease agreement, Aerojet agreed to pay the Cavitts $50,000 a year for the 10-year term of the lease; the company also obtained an exclusive right to purchase the acreage at any time during the life of the lease for $2,365,500. The lease included a standard covenant by Aerojet to surrender the property to the Cavitts on the termination of the lease "in as good state and condition as when received by Lessee, reasonable use and wear thereof consistent with the business engaged in by Lessee ... excepted."

Another provision of the lease recited that the Cavitts "are aware that certain activities of Lessee on the leased premises may be of a hazardous nature and that from time to time activities conducted on the premises may have an element of nuisance about them or resulting from them. In this connection, Lessors hereby covenant that they will acquiesce in any nuisance or hazard caused by Lessee on the premises. Lessee shall, however, indemnify Lessors against any damage to range grasses or loss or injury to their livestock caused by the activities of Lessee in conducting its business on the premises."

It appears that over the following 10 years, Aerojet routinely dumped and burned on the Cavitt acreage toxic solid fuel components, amounting to several million pounds, including, to adopt Aerojet's characterization, "quantities of waste sludge consisting of highly explosive rocket propellants containing a cleaning solvent" known as trichloroethylene (or TCE) that is toxic to human and animal life. ¹ In 1972, two years after the lease had terminated, Mr. Cavitt complained to Aerojet officials that the soil on parts of his ranchland had been impaired and that range grasses would not regenerate. In 1973, he signed a broadly framed document entitled "Release of all demands" which by its terms purported to "release, exonerate and forever discharge" Aerojet from any and all claims, known and unknown, "arising out of or otherwise connected directly or indirectly with any and all real estate transactions between me and Aerojet-General Corporation...." The release specifically referred to the 1960 lease agreement, went on to recite the payment of $7,500 to Cavitt as consideration for his release of all claims, purported to bind Cavitt's assigns, and acknowledged that, prior to executing the release, Cavitt had had the benefit of advice from his attorney who had "read and explained" its terms to him. It appears that neither party to the release recorded it.

Plaintiffs acquired the Cavitt ranch in 1975 in a three-party transaction, trading land valued at $600,000 which they owned in the Santa Clara Valley to IBM in exchange for a deed to the Cavitt ranch from IBM, which had simultaneously acquired title to it from the Cavitt estate following Mr. Cavitt's death. The Manginis testified at trial that they anticipated building a residence on part of the property and holding the remainder for resale when market conditions in this developing eastern corner of the Sacramento Valley were optimal, using it in the meantime to graze cattle. Although they had no notice of any chemical contamination of the land when they purchased it, in 1984 a representative of Aerojet asked plaintiffs for permission to conduct some field tests on the land. They agreed to the tests and were later told by company officials that the results were useless owing to a "laboratory error." Plaintiffs had already been interviewed by a representative of the United States Department of Justice in late 1979; he told them that the agency was investigating acreage surrounding As early as 1975, the State of California had filed a lawsuit against Aerojet, alleging that the property on which its plant was sited had been contaminated by hazardous wastes; the State's complaint was later expanded to include allegations that Aerojet had contaminated plaintiffs' parcel and other neighboring parcels. In addition, the federal government began an investigation of conditions at the Aerojet site, leading to a joint federal-state consent decree filed in federal court proceedings in 1988. One consequence of these prior proceedings was that in January of 1988 plaintiffs retained an attorney who filed this action for damages against Aerojet, pleading in support of the complaint theories of public and private nuisance, trespass, negligence, negligence per se, strict liability and equitable indemnity. Aerojet filed a demurrer to the complaint, which the trial court sustained, and plaintiffs appealed.

the Aerojet plant for possible chemical contamination.

B

In the first of two opinions previously filed in this matter (Mangini v. Aerojet-General Corp. (1991) 230 Cal.App.3th 1125, 281 Cal.Rptr. 827) (Mangini I ), the Court of Appeal rejected Aerojet's claim that theories of private nuisance were not maintainable against a lessee of a predecessor in interest of the plaintiff landowner because nuisance claims are limited to acts originating outside the plaintiff's property that cause damage indirectly. The court's opinion in Mangini I also validated plaintiffs' nuisance/trespass theories of liability in all other respects, particularly the contention that the contamination of their property caused by Aerojet's dumping and burning of hazardous chemicals over the life of its lease might qualify as a "continuing" nuisance and trespass because, although the actual dumping at the site had ceased, toxic chemicals continued to migrate within the soil itself, causing further damage to the land. In reaching the merits of plaintiffs' nuisance claim after the trial court had sustained Aerojet's demurrer to the complaint without leave to amend, the Court of Appeal in the initial appeal began by acknowledging the traditional distinction between so-called "permanent" and "continuing" nuisances: "[W]here a private citizen sues for damage from a permanent nuisance, the statute of limitations begins to run upon creation of the nuisance. Where a continuing nuisance is alleged, every continuation of the nuisance gives rise to a separate claim for damages caused by the nuisance." (230 Cal.App.3d at p. 1143, 281 Cal.Rptr. 827.)

The court then addressed the critical question of the nature of the nuisance alleged by plaintiffs. Relying on prior decisions of this court, it stated that "the crucial distinction between a permanent and continuing nuisance is whether the nuisance may be discontinued or abated," and concluded that, although features of the original complaint suggested plaintiffs had alleged a permanent nuisance, their "proposed pleading ... meets the crucial test of a continuing nuisance: that the offensive condition is abatable." (Mangini I, supra, 230 Cal.App.3d. at pp. 1146, 1147, 281 Cal.Rptr. 827...