Sachs v. Exxon Co., U.S.A.

• Decision Date: 30 September 1992
• Docket Number: No. D013930,D013930
• Citation: 12 Cal.Rptr.2d 237,9 Cal.App.4th 1491
• Court: California Court of Appeals Court of Appeals
• Parties: , 61 USLW 2268 Stephanie F. SACHS et al., Plaintiffs and Appellants, v. EXXON COMPANY, U.S.A. et al., Defendants and Respondents.

Page 237

12 Cal.Rptr.2d 237

9 Cal.App.4th 1491, 61 USLW 2268

Stephanie F. SACHS et al., Plaintiffs and Appellants, v. EXXON COMPANY, U.S.A. et al., Defendants and Respondents.

No. D013930.

Court of Appeal, Fourth District, Division 1, California.

Sept. 30, 1992.

As Modified on Denial of Rehearing Oct. 29, 1992.

Review Denied Dec. 17, 1992.

Gruber & Sachs, San Diego, Michael B. Sachs, El Cajon, Meserve, Mumper & Hughes and Andrew K. Ulich, Irvine, for plaintiffs and appellants.

Ferris & Britton, Allan J. Reniche, Sullivan, Hill, Lewin & Markham and Frank J. Fox, San Diego, for defendants and respondents.

BENKE, Associate Justice.

INTRODUCTION

In this case landlords, plaintiffs and appellants Stephanie F. Sachs and Michael B. Sachs, asked their tenants, defendants and respondents Exxon Company, U.S.A. (Exxon), and Texaco Refining & Marketing, Inc. (Texaco), for permission to conduct tests at The oil companies refused to allow the Sachses to conduct the additional tests proposed by the Sachses' expert. The Sachses' complaint seeks a declaration of their right to conduct the disputed tests. The oil companies moved for judgment on the pleadings or in the alternative summary judgment.

the gas station which Exxon and Texaco have operated on the Sachses' property for a number of years. The Sachses advised the oil companies that an environmental expert the Sachses have retained believes there is evidence of soil contamination on the property and further investigation is needed.

The trial court granted the oil companies' motion for summary judgment. We reverse. We reject the oil companies' argument the Sachses must wait until the end of the lease term before taking any action to assure protection of their interest in their land.

FACTUAL AND PROCEDURAL BACKGROUND

1. History of the Tenancy

In 1967 the Sachses' predecessor in interest, Arthur L. Sachs, Inc., leased the subject property to Humble Oil and Refining Co. (Humble) for a term of 20 years. The lease also provided Humble with three 5-year options. ¹

By August 1988 Exxon had succeeded to Humble's interest in the lease and the Sachses had succeeded to Arthur L. Sachses' fee interest in the land. On September 9, 1988, the Sachses advised Exxon by letter that Enviropro, Inc. (Enviropro), an environmental and hazardous waste engineering firm retained by the Sachses, had inspected the gas station and had recommended that further investigation be conducted to evaluate the potential existence of subsurface contamination at the site. The September 9 letter asked Exxon to provide the Sachses with the results of any tests Exxon had performed at the gas station.

By September 26, 1988, the Sachses had received no reply from Exxon and again wrote to the company. In their September 26 letter the Sachses included a copy of an engineering report prepared by Enviropro. The Sachses' letter also asked Exxon to "provide us with specific dates and times sufficient to permit the next step in leak detection for soil contamination. We are advised by Enviropro that they will test the tank system for leaks by performing a tank precision test on each of the two tanks. This site investigation to evaluate the potential existence of subsurface contamination shall include soil borings and direct soil sampling at several locations and depths, and chemical analysis of soil and/or ground water samples. [p]We are thereby requesting the cooperation of Exxon in the determination of the extent of potential soil and subsurface water contamination by providing us with the dates and times acceptable to Exxon within the next thirty days, that will be the least intrusive and cause the least amount of inconvenience."

On October 18, 1988, Exxon responded to the Sachses' request. In its response Exxon stated that it had consulted its field engineering personnel and "it is their opinion that the 8/18/88 Enviropro, Inc. report is not conclusive; and, since Exxon's data suggests that no environmental problem exists, Exxon sees no necessity for initiating an in-depth investigation. [p]With regard to your request for another investigation, Exxon has a right to 'quiet enjoyment' of the property and has already allowed you an opportunity to examine the property. Any further incursion on the property would violate Exxon's right to quiet enjoyment. Any right you might have with regard to determining 'waste' would arise at the end of the term of the lease." Exxon's letter also informed the Sachses Exxon had agreed to assign its interest in the lease to Texaco and that the transaction between Exxon and Texaco was scheduled to close before the end of October 1988.

2. Litigation

On October 27, 1988, the Sachses filed a complaint for declaratory relief in which they named Exxon and Texaco as defendants. The Sachses sought a judicial determination they had the right to enter onto their property for the purpose of determining whether the oil companies had committed waste on the property and for a determination the oil companies had forfeited the lease by refusing to permit an inspection.

During 1989, while the Sachses' lawsuit was pending, Texaco retained an environmental consulting firm, Emcon Associates (Emcon), to conduct a number of tests at the gas station. Texaco made Emcon's reports available to the Sachses and the Sachses in turn asked their environmental engineer, Enviropro, to review Emcon's reports. In an October 20, 1989, letter to the Sachses, Enviropro criticized Emcon's reports. According to Enviropro "Soil contaminated by gasoline was found in only one boring. Only four borings were made and four soil samples analyzed; this is not enough to determine whether the soil contains areas of substantial contamination. Indeed, it has been our experience that when groundwater is found to be contaminated at the levels such as is found at this site, there are nearly always areas of substantial vadose zone contamination." Enviropro concluded "Enviropro, Inc. believes there to be a definite need for further remedial investigation at this site to determine the extent and impact of the gasoline contamination. We also believe that remedial action will have to be taken to clean the contaminated groundwater, remove contaminated soil, and make necessary repairs/modifications to prevent further release. Off-site migration of the contaminants may have already occurred, raising concerns of further liability. We recommend additional investigation as a first phase in solving these problems."

On March 1, 1990, Exxon and Texaco moved for judgment on the pleadings or in the alternative for summary judgment. The trial court granted the oil companies' motion for summary judgment and a judgment dismissing the Sachses' complaint was entered. ² The Sachses filed a timely notice of appeal.

ISSUES ON APPEAL

The principal issue the parties contest on appeal is whether the Sachses have any right to inspect the gas station. On this record we find the Sachses may have such a right. Whether the right exists involves questions of disputed facts which cannot be resolved, on this record, by summary judgment. We therefore reverse the judgment.

DISCUSSION

I

We begin by restating familiar principles which govern our review following entry of summary judgment: "The purpose of a summary judgment motion is to determine if there are any triable issues of material fact, or whether the moving party is entitled to judgment as a matter of law. [Citations.] The summary judgment is proper only if the affidavits in support of the moving party would be sufficient to sustain a judgment in his favor and his opponent does not by affidavit show such facts as may be deemed by the judge hearing the motion sufficient to present a triable issue. [Citation.] The affidavits of the moving party are strictly construed, while those of the party opposing the motion are liberally construed. [Citations.] If the affidavits of the party opposing the motion contain factual averments within the general area of the issues framed by the pleadings, they are sufficient to make out a prima facie case. [Citation.] Any doubts as to the propriety of granting the motion must be resolved in favor of the party opposing the motion. [Citations.]" (Cascade Gardens Homeowners Assn. v. McKellar & Associates (1987) 194 Cal.App.3d 1252, 1255-1256, 240 Cal.Rptr. 113.) With these principles in mind, we turn to the Sachses' rights under the lease.

II

The parties would have us resolve this dispute by setting forth new and broad principles of landlord-tenant law, as affected by new environmental hazard legislation. We find it possible, however, and more prudent, to determine the landlord's rights by reference to the provisions of the lease, specifically paragraph 6 thereof which provides: "Lessee's use of said premises shall comply with all ordinances and laws and all lawful rules and regulations of competent governmental authorities applicable to said premises and the business conducted thereon."

Paragraph 6 itself does not expressly address the question of whether the Sachses have the right to conduct the inspection suggested by their expert. Nonetheless paragraph 6 does address the larger interest the Sachses are seeking to vindicate: freedom from potential liability under a myriad of federal, state and local statutes which regulate the disposal and cleanup of toxic wastes. ³

In particular, we note that at least one court has found gasoline leakage from an underground storage tank will support a cause of action under the Resource Conservation and Recovery Act (RCRA). (Tit. 42, U.S.C.A., § 6901 et seq.) (See Zands v. Nelson (1991 S.D.Cal.) 779 F.Supp. 1254, 1261; Tit. 42, U.S.C.A. § 6972(a)(1)(B).) Liability under the RCRA may be imposed without regard to fault on parties who have owned land during any period gasoline was stored on the land. (Zands v. Nelson (1992 S.D.Cal.) 797 F.Supp. 805). We also note Health and Safety Code section 25359.7 imposes liability on an owner of...