United States District Court, N.D. California
August 4, 2005.
NANCY FERGUSON, individually and as trustee of the FERGUSON FAMILY TRUST, and on behalf of her subrogee, Plaintiff,
ARCATA REDWOOD COMPANY, LLC., et al., Defendants.
The opinion of the court was delivered by: SUSAN ILLSTON, District Judge
ORDER RE: MOTIONS FOR SUMMARY JUDGMENT
On July 29, 2005, the Court heard argument on defendants'
motions for summary judgment. Having carefully considered the
arguments of counsel and the papers submitted, the Court GRANTS
Simonson's motion for summary judgment; DENIES Quebecor's motion
for summary judgment; GRANTS ARC-LLC's motion for summary
judgment against plaintiff's claims; DENIES ARC-LLC's motion for
summary judgment on its cross-claims against Quebecor; and
DISMISSES plaintiff's Second and Third Causes of Action with
respect to all defendants.
Plaintiff Nancy Ferguson filed suit on December 15, 2003,
against twenty-one defendants, under the Comprehensive
Environmental Response, Compensation, and Liability Act
("CERCLA"), 42 U.S.C. § 9601 et seq., the Resource Conservation
and Recovery Act ("RCRA"), 42 U.S.C. § 6930, and related state
laws, seeking contribution for costs of investigation and clean
up of the soil and groundwater contamination at and emanating
from a property located at 100 Timbers Boulevard, Smith River, California ("the Property").*fn1
The Property was purchased by Simonson Lumber Company on May
11, 1973. See Brown Decl., Ex. 1. The Property was a small
portion of the company's holdings in the area, which included
timberland, lumber mills and other facilities. In June 1979,
Arcata Corporation*fn2 purchased all shares of stock for
Simonson Lumber Company and took possession of the Property. On
April 15, 1988, Arcata Corporation entered into a Lease/Option
Agreement for the Property with XL Enterprises, which provided XL
Enterprises with the option to purchase the property within six
months. See Brown Decl., Ex. 2.
On June 29, 1988, Arcata Corporation sold certain assets,
including the Property, to Simpson Acquiring Company.*fn3
See Brown Decl., Ex. 3. Approximately two weeks later, XL
Enterprises informed Simpson Acquiring Company that it was
exercising its option to purchase the property. Title passed to
XL Enterprises on August 3, 1988. See Brown Decl., Ex. 1.
Plaintiff purchased the Property from XL Enterprises in 1993.
In 1998, plaintiff attempted to sell the Property to the Del
Norte Housing Development Corporation. As a result, an
environmental site assessment was conducted on the Property,
which uncovered a disposal pit. The pit contained waste disposal
that included scrap metal and pipes, as well as contamination
from hydrocarbons, wood treatment products, PCB and PCP.
Plaintiff contends that she was not responsible for the
contamination and seeks compensation from previous owners and
operators of the Property. Specifically, plaintiff claims that
she is entitled to a judgment against all defendants for, among
other things, contribution and indemnity for all response costs
incurred by plaintiff, compensatory and general damages resulting
from the presence of soil and groundwater contamination at and
emanating from the Property, and for injunctive and declaratory
relief. On August 27, 2004, plaintiff filed her Second Amended
Complaint. Defendant Arcata Redwood Company, LLC (ARC-LLC) moved
to dismiss the second amended complaint, and on November 12,
2004, the Court dismissed plaintiff's CERCLA, RCRA and California
Health & Safety Code claims against ARC-LLC. However, the Court
upheld plaintiff's public nuisance, private nuisance, equitable
indemnity and declaratory relief claims against that defendant.
Currently before the Court are various motions for summary
judgment: 1) Leland Simonson's motion on plaintiff's claims; 2)
Quebecor's motion on plaintiff's claims; 3) ARC-LLC's motion on
plaintiff's remaining state law claims; and 4) ARC-LLC's motion
on its cross-claims against Quebecor. Plaintiff has not opposed
Quebecor's motion to dismiss the RCRA claims. Additionally,
plaintiff has submitted a "request for dismissal of RCRA claims"
dated July 8, 2005. Therefore, the Court will DISMISS plaintiff's
Second and Third Causes of Action, which consist of RCRA claims
brought against all defendants.
Summary judgment is proper "if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with
the affidavits, if any, show that there is no genuine issue as to
any material fact and that the moving party is entitled to a
judgment as a matter of law." Fed.R.Civ.P. 56(c). The moving
party bears the initial burden of demonstrating the absence of a
genuine issue of material fact. See Celotex Corp. v. Catrett,
477 U.S. 317, 323 (1986). The moving party, however, has no
burden to negate or disprove matters on which the non-moving
party will have the burden of proof at trial. The moving party
need only point out to the Court that there is an absence of
evidence to support the non-moving party's case. See id. at
The burden then shifts to the non-moving party to "designate
`specific facts showing that there is a genuine issue for
trial.'" Id. at 324 (quoting Fed.R.Civ.P. 56(e)). To carry
this burden, the non-moving party must "do more than simply show
that there is some metaphysical doubt as to the material facts."
Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp.,
475 U.S. 574, 586 (1986). "The mere existence of a scintilla of
evidence . . . will be insufficient; there must be evidence on
which the jury could reasonably find for the [non-moving party]."
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986).
In deciding a motion for summary judgment, the evidence is
viewed in the light most favorable to the non-moving party, and
all justifiable inferences are to be drawn in its favor. Id. at
255. "Credibility determinations, the weighing of the evidence,
and the drawing of legitimate inferences from the facts are jury
functions, not those of a judge [when she] is ruling on a motion
for summary judgment." Id.
1. Leland Simonson's motion for summary judgment
Leland Simonson, along with his father, became the sole
shareholders of Simonson Lumber Company in the 1950's.
Weinstein-Hamilton Decl., Ex. 1 at 11.*fn4 Simonson was the
president and manager of the company, and his wife was the
secretary. Id.; Supp. Valinoti Decl., Ex. 2 at 51. The holdings
of Simonson Lumber Company included the Property at issue in this
litigation. In June 1979, Arcata Corporation purchased all of the
shares of stock of Simonson Lumber Company. Plaintiff has filed a
claim against Leland Simonson as an individual. SAC at ¶ 17.
Although plaintiff also filed suit against Simonson Lumber
Company, those claims were voluntarily dismissed on March 8,
2005. [Docket #67]
Simonson argues that summary judgment is appropriate because
plaintiff has failed to present any evidence that he was the
owner or operator of the Property at the time of disposal of any
hazardous substance. He argues that the activities that led to
the contamination found in the disposal pit occurred after he
sold his interest in the Property in June 1979.
Under 42 U.S.C. § 9607(a)(2), liability under CERCLA can be
attached to "any person who at the time of disposal of any
hazardous substance owned or operated any facility at which such
hazardous substances were disposed of." Plaintiff argues that
Simonson was an operator at the time hazardous substances were
disposed and that he is liable as a "generator" of hazardous
waste. The Court finds that Simonson cannot be held liable as an
"owner or operator" under CERCLA because plaintiff has failed to
present any evidence that hazardous substances were disposed of
on the Property at issue during Simonson Lumber Company's
ownership of the Property. The basis for plaintiff's complaint is
the contamination found in the disposal pit, which contained
various hazardous materials including parts from the dismantled
power plants. Plaintiff presents no evidence that these materials
were disposed of before June 1979, when the Simonson family sold
its holdings in the Simonson Lumber Company to Arcata
Corporation. To the contrary, the evidence presented suggests
that the hazardous materials on the Property were disposed after
During Simonson Lumber Company's ownership of the Property, it
was used to store and dry lumber and there is testimony that no
chemically treated lumber was ever stored or dried on the
Property. Valinoti Decl., Ex. 4 (Schmelke Depo.) at 27, 78.
During the 1970's, an electrical power plant was operated on land
across Highway 101 from the Property. It was dismantled sometime
after 1978, and the plaintiff's complaint alleges that parts of
it were dumped into the disposal pit on the Property. SAC ¶¶ 31,
33, 35. However, plaintiff agreed in response to Simonson's
requests for admissions that Simonson was not involved in the
dismantling of the power plant. Valinoti Decl., Ex. 2 at 14-16.
Additionally, Simonson presented evidence that the company never
dug any holes in the ground to discard waste. Schmelke Depo. at
Plaintiff does not argue that the power plant was dismantled or
that the disposal pit was dug during Simonson Lumber Company's
ownership of the Property. Instead, plaintiff alleges that
summary judgment is not appropriate because the company released
hazardous waste in other forms on the Property. The evidence
submitted by plaintiff does not pertain to the Property at issue
in this litigation. Instead, plaintiff presents evidence
regarding hazardous waste releases in other areas of the
surrounding property owned by the company. Specifically,
plaintiff presents evidence of a wood treatment chemical spill at
the lumber mill that resulted in governmental action. See
Weinstein-Hamilton Decl., Ex. 5.
However, plaintiff presents no evidence explaining how the
release of hazardous waste in other areas owned by the company
impacted the Property at issue in this case. Although plaintiff
presents a large amount of argument on this issue, argument is
not sufficient at the summary judgment stage of the proceedings,
as plaintiff must produce evidence in support. Plaintiff also
makes unsupported assertions that "the site was significantly contaminated with hazardous
waste" at the time of Simonson Lumber Company's sale of stock to
Arcata Corporation. Opp'n at 8.
Therefore, the Court finds that Simonson is entitled to summary
judgment on plaintiff's claim that he was an "owner or operator"
under 42 U.S.C. § 9607(a)(2) because plaintiff has presented no
evidence that Simonson, or the Simonson Lumber Company, was
involved in the discharge of hazardous materials on the Property
at issue in this litigation.
Plaintiff argues that Simonson also qualifies as a "generator"
of hazardous substances under 42 U.S.C. § 9607(a). Plaintiff
argues that Simonson can be liable under CERCLA because he
allowed his company to release hazardous materials that were
later collected by future owners of the property and placed in
the disposal pit.
The Court rejects plaintiff's argument because it entirely
lacks factual support. See Opp'n at 11-13 (containing
assertions such as: "the site was very contaminated"; "there were
numerous . . . containers that used to contain hazardous wood
treatment chemicals . . . left around the site"; and "[t]here is
no question that . . . wood treatment chemicals used and released
during his ownership and operation of Simonson Lumber Company's
lumber mill found their way into this disposal pit.") Plaintiff
has presented no evidence that any of the material found in the
disposal pit originated with Simonson Lumber Company.
Therefore, the Court finds that defendant Simonson is entitled
to judgment as a matter of law for plaintiff's CERCLA claim and
GRANTS defendant's motion for summary judgment.
2. Quebecor's motion for summary judgment
Quebecor World Arcata Corporation brings a motion for summary
judgment on plaintiff's CERCLA claim, asserting that plaintiff
has not presented any evidence establishing that plaintiff has
been sued under CERCLA or entered into a settlement, as defined
by CERCLA. Additionally, Quebecor asks the Court to dismiss
plaintiff's state law claims by declining to grant supplemental
A. 42 U.S.C. § 9613
In her First Cause of Action, plaintiff asserts that she is
"entitled to contribution from Defendants . . . for all past and future response costs incurred by
Plaintiff due to the releases and threatened releases of
hazardous substances emanating from the Property" pursuant to
42 U.S.C. § 9613(f). Under 42 U.S.C. § 9613, plaintiff may pursue a
claim for contribution if it arises 1) during or following a
civil action under Section 106 or 107 of CERCLA,
42 U.S.C. § 9613(f)(1); or 2) after an administrative or judicially approved
settlement, 42 U.S.C. § 9613(f)(3)(B). See Cooper Industries,
Inc. v. Aviall Services, Inc., 125 S.Ct. 577, 584 (2004).
Plaintiff concedes that she has not been subject to a lawsuit
under CERCLA § 106 or § 107. See Opp'n at 2. Plaintiff does
assert that she can bring a claim under 42 U.S.C. § 9613 because
the claim follows "an administrative or judicially approved
settlement." Plaintiff argues that her interactions with
California and federal agencies constituted a settlement for
purposes of CERCLA.
The documents submitted by plaintiff do not demonstrate that
plaintiff entered into a settlement under
42 U.S.C. § 9613(f)(3)(B). See Weinstein-Hamilton Decl., Exs. 3-12. The
documents are letters exchanged between the parties during the
clean-up efforts. None of the documents contain the word
"settlement" or "CERCLA". See Pharmacia Corp. v. Clayton
Chemical Acquisition LLC, 2005 WL 615755 * 7 (S.D. Ill.)
(holding that Administrative Order by Consent reached between
plaintiff and EPA was not a settlement for purposes of CERCLA
section 113, in part because the document did not contain the
word "settlement"). Although the California Regional Water
Quality Control Board (CRWQCB) warned plaintiff that "[f]ailure
to comply with this request in a timely manner may result in
elevated enforcement," no other document references any
threatened legal or administrative proceeding. Weinstein-Hamilton
Decl., Ex. 3.
W.R. Grace & Co. v. Zotos International, Inc., the case
relied upon by plaintiff, supports Quebecor's position on this
issue. 2005 WL 1076117 (W.D.N.Y.). In that case, plaintiff
entered into an Administrative Order on Consent with the New York
State Department of Environmental Conservation. The Order made no
reference to CERCLA, nor did it "state that the DEC was
exercising any authority under CERCLA." Id. at * 7. The court
in found that plaintiff did not have a claim under section
113(f)(3) because it had not settled CERCLA liability prior to
filing its complaint. Id.
In the current case, the EPA never entered into any agreement
with plaintiff and the CRWQCB never asserted that it was
exercising authority under CERCLA. Finally, the only statement
related to a resolution of this situation was made by CRWQCB, which stated
that "this agency finds that no further action on this site is
required." Weinstein-Hamilton Decl., Ex. 12. This does not
constitute a settlement agreement by the two parties, nor did the
EPA endorse the statement.
Therefore, the Court finds that plaintiff cannot maintain a
contribution cause of action under CERCLA § 113 because the
action does not follow an administrative or judicially approved
B. 42 U.S.C. § 9607
Plaintiff asserts that summary judgment for her First Cause of
Action under CERCLA is not appropriate because there remains a
claim for contribution under Section 107. 42 U.S.C. § 9607.
Quebecor argues that plaintiff makes no reference to a
contribution claim under Section 107 in her complaint, and that
even if the complaint includes such a provision, plaintiff has
failed to state a valid claim.
Although the Second Amended Complaint is far from a model of
clarity, the Court finds that it sufficiently states a cause of
action for contribution under Section 107. The First Cause of
Action states that it is for "Contribution Under CERCLA."
Plaintiff's assertion that she pled a cause of action under
Section 107 based on paragraph 49 of her complaint is incorrect.
The section is referenced in that paragraph not as a basis for
recovery; instead, the section establishes liability for
defendants on all claims under CERCLA. However, by stating that
the claim is for "contribution" plaintiff has sufficiently placed
the parties on notice of a contribution action under Section 107
or Section 113.
Relying on Pinal Creek Group v. Newmont Mining Corp.,
118 F.3d 1298 (9th Cir. 1997), Quebecor argues that plaintiff cannot
bring a claim under Section 107 because she is a "Potentially
Responsible Party" (PRP) under CERCLA. Plaintiff does not dispute
that, as the owner of the property, she is a PRP under
42 U.S.C. § 9607. She does dispute, however, that Pinal Creek is as broad
as Quebecor contends; and the Court agrees.
Pinal Creek does hold that a PRP cannot bring a claim for
joint and several liability under Section 107. 118 F.3d at 1302.
However, the Ninth Circuit also recognized a PRP's right to bring
a contribution claim under Section 107. Id. at 1301 ("a claim
for contribution . . . is imbedded in the text of § 107"). The
Ninth Circuit has since reaffirmed the holding of Pinal Creek.
See Western Properties Service Corp. v. Shell Oil Company, 358 F.3d 678, 685 (9th Cir.
2004). The Supreme Court's decision in Cooper Industries does
not impact plaintiff's Section 107 claim, since the Supreme Court
declined to address that issue. 125 S.Ct. at 586 n. 6 (stating
"we do not address whether a § 107 cost recovery action . . . may
seek some form of liability other than joint and
Therefore, the Court DENIES Quebecor's motion for summary
judgment for the First Cause of Action, provided that plaintiff
seeks only contribution under Section 107.*fn6
3. ARC-LLC's motion for summary judgment on plaintiff's
ARC-LLC held title to the Property for 35 days, from June 30,
1988 to August 3, 1988. During that period, the Property was
leased to XL Enterprises.*fn7 Plaintiff brings claims
against ARC-LLC for nuisance, equitable indemnity and declaratory
relief based on its brief ownership of the Property.
Plaintiff does not allege that ARC-LLC engaged in any
operations or disposed of hazardous materials on the Property. In
fact, XL Enterprises leased the property during ARC-LLC's
ownership. Therefore, plaintiff must establish that ARC-LLC is
liable as property owner and landlord for nuisance. "A landlord
cannot be held to be responsible for all damages inherent even in
a dangerous business. The defendant must be aware of the specific
dangerous condition and be able to do something about it before
liability will attach." Resolution Trust Corp. v. Rossmoor
Corp., 34 Cal.App.4th 93, 102 (1995).
Plaintiff argues that ARC-LLC is liable under Hendler v.
United States, 38 Fed.Cl. 611 (Fed.Cl. 1997). However, the
landowner in Hendler "was made aware . . . of the environmental
problems." Id. at 616-617. Plaintiff has presented no evidence
that ARC-LLC was aware of the disposal pit that contained PCB contamination. In fact, the pit was not discovered
until ten years later, in 1998.
Plaintiff argues that ARC-LLC had a reason to know that the
Property was contaminated. Plaintiff first argues that lumber
mills generally are contaminated; therefore, ARC-LLC should have
conducted an investigation of the land. However, plaintiff
presents no authority in support of her position and the Court
finds that it is not persuasive.
Plaintiff submits three documents in support of her argument.
See Weinstein-Hamilton Decl., Exs. 1-3. However, these
documents do not relate to the Property at issue. Exhibit 1
references the truck shop location at the mill property, which
was on the other side of Highway 101. See Supp. Green Decl.,
Ex. 1 (Heckenberg Depo.) at 85-87. Exhibit 2 is an memorandum
from an employee of the California Regional Water Quality Control
Board stating that the power plant on the mill property is
"entirely shut down." It makes no reference to any hazardous
materials. Exhibit 3 is a letter dated 1989 from the CRWQCB. This
letter post-dates ARC-LLC's sale of the Property by nearly a year
and does not involve the disposal pit on the Property.
Additionally, when ARC-LLC purchased the property, Arcata
Corporation stated that it had no knowledge of any material and
adverse environmental conditions on any of the transferred
assets, including the Property. Brown Decl., Ex. 3 at 27-28.
Therefore, plaintiff has not presented any evidence that
ARC-LLC knew or should have known that the Property was
contaminated. Because plaintiff has failed to present any
evidence in support of its nuisance claim, the Court GRANTS
summary judgment for ARC-LLC. As plaintiff's remaining claims
against ARC-LLC depend upon the nuisance claim, the Court GRANTS
summary judgment for ARC-LLC with respect to all remaining
4. ARC-LLC's motion for summary judgment on cross-claims
ARC-LLC filed a cross claim against Quebecor asserting claims
of contractual and equitable indemnity. ARC-LLC now moves for
summary judgment on these claims. ARC-LLC entered into an Asset
Purchase Agreement (APA) with Quebecor on June 29, 1988.*fn8
See Brown Decl., Ex. 3. The APA transferred Quebecor's interest in the Property to ARC-LLC.
The APA also stated that Quebecor "has no actual knowledge of any
material and adverse environmental conditions affecting the . . .
Assets, including without limitation any unlawful use, treatment,
storage or disposal (on site or off site) of any hazardous
substances." Id. at 27-28.
ARC-LLC initially asserted that it had a claim for contractual
indemnity under paragraph 5.1 of the APA, which provided for
"general cross indemnity." Under this section of the agreement, a
claim for indemnity must be brought within two years of the
closing, which occurred in 1988. Given that the current
cross-claims were not brought within two years of the closing,
ARC-LLC may not assert a claim for contractual indemnity under
However, ARC-LLC argues in its reply that it is entitled to
equitable indemnity and that this claim, without any time bar, is
preserved by paragraph 5.4 of the APA. Id. at 32. Paragraph 5.4
states that "the parties shall have and retain all statutory,
regulatory and common law rights of indemnity, contribution or
other recourse against each other with respect to `third party
claims' . . . and resulting liabilities and expenses which arise
out of . . . such other party's ownership, use, misuse or
operation of the Acquired Assets or Forest Products Business."
The Court finds that ARC-LLC may bring a claim of equitable
indemnity as provided by California Code of Civil Procedure §
1021.6.*fn9 The California Supreme Court has recognized that
"a would-be indemnitee may be eligible to recover attorney fees
under section 1021.6 even when . . . the indemnitee has been
absolved of all liability for the plaintiff's injuries, so long
as the indemnitee demonstrates it would have been entitled to
indemnity for any judgment that had been rendered against it."
Bay Development, Ltd. v. Home Capital Corp., 50 Cal.3d 1012,
In order to recover for its indemnity claim, ARC-LLC must
demonstrate that it was required to act due to the "tort of the
indemnitor." CCP § 1021.6(a). On the current record, the Court
cannot find as a matter of law that Quebecor is liable for the harm alleged
in plaintiff's complaint. Although ARC-LLC provides a series of
facts that suggest Quebecor's liability, see motion at 9, the
Court cannot find for ARC-LLC at this stage in the proceedings
because it presents no evidence that Quebecor placed the
hazardous materials that were found in 1998 in a disposal pit
located on the Property. The hazardous materials found in the
disposal pit are the foundation of plaintiff's claims, which do
not involve other hazardous material disposals on other parcels
of land held by various lumber companies. Therefore, the Court
DENIES ARC-LLC's motion for summary judgment on its indemnity
cross-claims against Quebecor.
At the hearing on July 29, 2005 and again in its August 2, 2005
letter, Quebecor has requested that if the Court allows plaintiff
to proceed on her Section 107 contribution claim, Quebecor be
allowed to reopen discovery on such limited factual questions as
may relate uniquely to that claim. Quebecor further requests
leave to file a subsequent motion for summary judgment, directed
solely at the Section 107 contribution claim. Both requests are
The parties are instructed to meet and confer to resolve what
additional discovery, if any, is necessary; such additional
discovery should be completed by August 31, 2005. Quebecor may
file any further summary judgment motion on or before September
9, 2005. Plaintiff shall file her opposition by September 23,
2005, and defendant's reply shall be filed by September 30, 2005.
Hearing on the motion shall be held on Tuesday, October 11, 2005
at 9:00 a.m.
The September 6, 2005 trial date is continued to Monday,
November 21, 2005 at 8:30 a.m. The pretrial conference is
continued to Tuesday, November 8, 2005 at 3:30 p.m.
For the foregoing reasons and for good cause shown, the Court
hereby: GRANTS Simonson's motion for summary judgment [Docket #
81]; DENIES Quebecor's motion for summary judgment [Docket # 78];
GRANTS ARC-LLC's motion for summary judgment against plaintiff's
claims [Docket # 82]; DENIES ARC-LLC's motion for summary
judgment on its cross-claims against Quebecor [Docket # 86]; and DISMISSES plaintiff's Second and Third Cause
of Action with respect to all defendants.
IT IS SO ORDERED.
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