Selma Pressure Treating Co. v. Osmose Wood Preserving Co., Nos. F009421

• Court: California Court of Appeals
• Writing for the Court: ARDAIZ; FRANSON, P.J., and MARTIN
• Citation: 271 Cal.Rptr. 596,221 Cal.App.3d 1601
• Parties: SELMA PRESSURE TREATING COMPANY, INC., et al., Cross-Complainants and Appellants, v. OSMOSE WOOD PRESERVING COMPANY OF AMERICA, INC., Cross-Defendant and Respondent. Gerald D. PETERY et al., Petitioners, v. The SUPERIOR COURT of Fresno County, Respondent; Reichhold Chemicals, Inc., et al., Real Parties in Interest. Gerald D. PETERY et al., Cross-Complainants and Appellants, v. REICHHOLD CHEMICALS, INC., et al., Cross-Defendants and Respondents.
• Decision Date: 25 June 1990
• Docket Number: F010710,F010070,Nos. F009421

Page 596

271 Cal.Rptr. 596 221 Cal.App.3d 1601 SELMA PRESSURE TREATING COMPANY, INC., et al., Cross-Complainants and Appellants,
v.
OSMOSE WOOD PRESERVING COMPANY OF AMERICA, INC., Cross-Defendant and Respondent.
Gerald D. PETERY et al., Petitioners,
v.
The SUPERIOR COURT of Fresno County, Respondent;
Reichhold Chemicals, Inc., et al., Real Parties in Interest.
Gerald D. PETERY et al., Cross-Complainants and Appellants,
v.
REICHHOLD CHEMICALS, INC., et al., Cross-Defendants and Respondents. Nos. F009421, F010070, F010710. Court of Appeal, Fifth District, California. June 25, 1990.
Certified for Partial Publication. ^*
As Modified on Denial of Rehearing
July 24, 1990.
Review Denied Sept. 25, 1990.

Page 597

[221 Cal.App.3d 1605] Bergman & Wedner, Inc., Kevin D. Sheehy and Gregory M. Bergman, Los Angeles, for defendants, cross-complainants, appellants and petitioners Mary Ann Petery, Mary Ann Petery Schuessler and Selma Pressure Treating Co., Inc.

Kimble, MacMichael & Upton, Jon Wallace Upton, David Douglas Doyle and Sylvia H. Coyle, Fresno, for defendants, cross-complainants, appellants and petitioners

Page 598

Gerald D. Petery and Selma Pressure Treating Co., Inc.

[221 Cal.App.3d 1606] Diehl, Steinheimer, Riggio, Haydel & Mordaunt, Scott Malm, Stockton, for cross-defendant and respondent Osmose Wood Preserving, Inc.

Rutan & Tucker, Jayne Taylor, Mark B. Frazier and Marshall M. Pearlman, Costa Mesa, for cross-defendant and respondent Koppers Co., Inc.

Wildman, Harrold, Allen & Dixon, Robert L. Shuftan, Chicago, Ill., for real party in interest Koppers Co., Inc.

Parichan, Renberg, Crossman & Harvey, Stephen T. Knudsen, Fresno, for cross-defendant and respondent Monsanto Co., Inc.

Kirkland & Ellis, Bruce A. Featherstone, Scott R. Bauer and Philip A. Brimmer, Denver, Colo., for cross-defendant and respondent Monsanto Co., Inc.

French, Rogers, Kezelis & Kominiarek, James M. Hofert, Chicago, Ill., for cross-defendant and respondent Vulcan Materials Co.

Thomas, Snell, Jamison, Russell & Asperger, E. Robert Wright, Fresno, for cross-defendant and respondent Vulcan Materials Co.

Gibson & Gibson, John D. Gibson and Katherine O. Gibson, Bakersfield, for cross-defendant and respondent Reichhold Chemicals, Inc.

OPINION

ARDAIZ, Associate Justice.

The consolidated cases before us challenge the propriety of the sustaining of several demurrers of various cross-defendants to cross-complaints filed by Selma Pressure Treating Company, Inc. (SPTC), Mary Ann Schuessler and Gerald Petery and Selma Leasing Company, Inc. (SLC). The cross-complainants were, in turn, defendants in an action filed on April 30, 1985, by the State of California and Regional Water Quality Control Board (collectively, the State).

The underlying complaint stated 15 causes of action surrounding allegations that defendants improperly disposed of hazardous waste. Nine of the causes of action requested civil penalties; two requested specific injunctive relief; and the last four causes of action, including the twelfth cause of action for maintenance of a public nuisance, more generally sought both equitable and legal relief based upon the defendants' liability for the harm done on account of the alleged improper disposal.

SPTC and Schuessler filed a joint answer and a cross-complaint against their codefendants, SLC and Petery, and two corporations, Koppers Company, Inc., and Osmose Wood Preserving Company of America, Inc. The cross-complaint sought indemnity from the cross-defendants. Osmose's demurrer was sustained with leave to amend.

Cross-complainant Schuessler filed an amended complaint and Osmose demurred again. A month later, SPTC filed an amended cross-complaint, provoking yet another demurrer from Osmose. The court sustained the demurrers to the amended cross-complaints without leave to amend and dismissed the complaints as to Osmose. On October 8, 1987, Schuessler and [221 Cal.App.3d 1607] SPTC appealed from the dismissals. This appeal, F009421, represents the first of the three cases consolidated here.

Petery and SLC jointly filed a first amended cross-complaint against codefendants, Osmose, Koppers and several chemical suppliers, Reichhold Chemicals, Inc., Monsanto Company, Ventron Corporation, Seymour Chemical, Vulcan Material Company and Van Waters and Rogers, Inc. ¹ The cross-complaint contained 19 causes of action including claims for equitable indemnity against all cross-defendants and direct tort and contract causes of action against various cross-defendants.

Demurrers were filed by the cross-defendants. After a hearing, the court found that provisions of the Water Code and Health and Safety Code, which provided

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the basis for the claims for the civil penalties in the State's underlying complaint, could not be applied retroactively to acts or conduct preceding their enactment. Demurrers to the direct causes of action were sustained with leave to amend to plead sufficient facts to justify tolling of the statute of limitations. The court took under submission the question whether all cross-defendants could be jointly and severally liable with Petery and SLC under the State's public nuisance cause of action, relating to the equitable indemnity claims against Osmose, Koppers and the chemical suppliers.

In its "Order After Hearing," the court ultimately sustained, without leave to amend, the demurrers to the causes of action for equitable indemnity against Osmose, Koppers and the chemical suppliers. A writ petition was filed on March 21, 1988, by Petery and SLC challenging the propriety of the sustaining of these demurrers. This writ petition, F010070, is the second of three cases here, the writ being consolidated with the Schuessler/SPTC appeal by request of the petitioning party.

Subsequently, Petery and SLC filed their second amended cross-complaint. Two new cross-defendants were added, First Interstate Bank of California and Camp, Dresser and McKee (CDM). ² Causes of action against all cross-defendants except SPTC and Schuessler were added for public and private nuisance based upon Petery's ownership of a lot adjoining the affected land. Additional allegations were made relative to the tolling of the statute of limitations.

[221 Cal.App.3d 1608] Another round of demurrers followed, the bank joining Osmose, Koppers and the chemical suppliers. In the order after judgment issued May 31, the court overruled the demurrer of the bank; all other demurrers were sustained without leave to amend based upon a determination that the statute of limitations had run. Orders of dismissal of Osmose, Koppers and the chemical suppliers as to the cross-complaint of Petery and SLC were entered pursuant to the sustaining of the demurrers. Petery and SLC appealed, F010710, this appeal forming the third of the cases before us now.

On July 10, 1989, while the matter was pending in this court, we received information that the matter had been settled between the State and appellants; in return for a payment of $25,000 by appellants, the State agreed to dismiss with prejudice its entire complaint. ³ Motions to dismiss were filed.

In August of 1989, this court indicated its desire to take judicial notice of the settlement agreement; it also requested rebriefing on the issues in light of the settlement and dismissal of the State's complaint. Also, while these matters have been pending in this court, Petery and SLC have settled with several of the parties and we have, pursuant to Petery's request, dismissed the appeals and petition for writ as to these parties. Osmose Wood Preserving Company of America, Inc., Koppers Company, Inc., Ventron Corporation, Seymour Chemical and Van Waters and Rogers, Inc., are no longer parties to the appeal and writ pursued by Petery and SLC.

FACTS

The facts come from the various pleadings as filed by the parties.

In 1961 Petery acquired and began operating a wood treatment facility at Selma, California. ⁴ The premises had housed

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wood treating facilities since at least 1941. Petery and Mary Ann Schuessler were married at that time. In 1970 and 1971, defendant corporations Selma Pressure Treating Company, Inc., and Selma Leasing Co., Inc., were formed. Petery and Schuessler were co-owners of SPTC which, after 1970, officially ran the wood treating facilities. Title to the property was put in the name of SLC; SPTC leased the premises.

[221 Cal.App.3d 1609] Back in 1964, before incorporation, Osmose entered into both written and oral licensing agreements with Petery and Schuessler to provide wood treating chemicals. In addition, Osmose agreed to "finance, design, manufacture, assemble, install, and construct" equipment and facilities for pressure wood treating. Ultimately, two pressure wood treating cylinders were installed by Osmose. Osmose provided training and education regarding, among other things, the disposal of the wood treating chemicals. Petery claimed Osmose knew such wastes were harmful and did not inform Petery of that fact. Indeed, Osmose recommended the construction of an unlined dirt pond on the property to receive the discharge or release of waste chemicals which Petery constructed. Petery further alleged Osmose misrepresented the injurious nature of the wood treating chemicals on the environment. The business relationship with Osmose terminated toward the end of 1966.

In November of 1966 Petery signed, as owner of Selma Pressure Treating Co., a licensing agreement with Koppers. The allegations concerning Koppers are similar to those relating to Osmose, basically alleging that Koppers installed equipment and made recommendations of operating practices, including the construction of dry wells and unlined dirt ponds to receive wastes, which resulted in wood treating chemicals being deposited in the soil overlying the aquifer. Again, allegations were made that Koppers misrepresented the reaction of the wood treating chemicals in the soil and the potential for injuring the...