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Green Valley Corporation v. Caldo Oil Company


August 10, 2011


The opinion of the court was delivered by: Lucy H. Koh United States District Judge


Plaintiff Green Valley Corporation ("Plaintiff") has moved for leave to file a Second Amended Complaint ("SAC"). See Dkt. No. 89 ("Motion to Amend"). Defendants Caldo Oil Company ("Caldo Oil"), Victor J. LoBue, and the Victor J. LoBue Trust (collectively, "Caldo Oil Defendants") oppose Plaintiff's motion. In addition, the Caldo Oil Defendants have moved to 23 strike and dismiss Plaintiff's SAC and a Third Party Complaint (TPC) filed by Plaintiffs. See Dkt. No. 104 ("Motion to Strike"). The Caldo Oil Defendants, along with other defendants named in 25 the TPC, have also moved to quash service of Plaintiff's Third Party Complaint. See Dkt. No. 102 ("Motion to Quash"). After considering the parties' briefs relating to these Motions, the Court 27 finds this matter suitable for decision without oral argument. See Civ. L.R. 7-1(b). Accordingly, 28 the hearings on these Motions, set for August 11, 2011 and September 22, 2011 are hereby VACATED.

The August 11, 2011 Case Management Conference will remain as set at 1:30 p.m. For the reasons set forth below, the Court GRANTS Plaintiff's Motion to Amend, GRANTS-IN-3 Oil Defendants' Motion to Quash as moot.

A. Factual Background

From 1966 until 1997, Caldo Oil owned and operated a bulk fueling and gasoline service 8 station in San Jose, California. Dkt. No. 13 ("FAC"), at ¶ 21. On August 30, 2005, Green Valley 9 allegedly purchased from Caldo Oil, Victor J. LoBue, and The Victor J. LoBue Trust the property 10 where this station was located (the "Property"). Id. at ¶ 24. In 2006, an Olympic gasoline service PART and DENIES-IN-PART the Caldo Oil Defendants' Motion to Strike, and DENIES the Caldo


station owned and operated by Nella Oil Company, LLC was placed adjacent to the Property. Id. ¶ 25. Green Valley claims that in September of 2006, excavation work by a general contractor on 13 the Property revealed the presence of petroleum-impacted soils. Id. ¶ 29. Based on soil and 14 groundwater samples taken from the property, the Santa Clara County Department of Environmental Health (SCCDEH) required Green Valley to implement and administer a 16 groundwater monitoring program. Id. ¶¶ 29, 31. Green Valley claims that defendants caused or 17 contributed to the contamination on the Property. Id. ¶ 46. As a result, Green Valley filed suit 18 claiming fourteen causes of action against defendants in order to recoup costs that it has and will 19 incur in investigating and remediating the contamination present on the Property. Id. ¶ 49. Green

Valley also seeks damages and injunctive relief against defendants for their contribution to the 21 contamination of the Property. 22

Salvadore and Tanie Ann were responsible for the release of petroleum into the soil during their 25 period of ownership. Id. Plaintiff also believes the assets of Salvadore and Tanie Ann LoBue were 26 placed into various trusts of which Victor LoBue is trustee, including the LoBue Living Trust and 27 the LoBue Family Trust. Id. at ¶ 9, 12. Finally, Plaintiff alleges that a judgment against the 28

Case No.: 09-CV-04028-LHK


Salvadore and Tanie Ann LoBue were Victor LoBue's parents. SAC ¶ 10. Salvadore and

Tanie Ann were also the original owners and lessors of the Property. Id. Plaintiff believes 24

LoBues' estates should be satisfied by insurance purchased by the LoBues. Id. at ¶ 11.

B. Procedural Background

Green Valley filed its original complaint on August 31, 2009, Dkt. No. 1, and its First Amended Complaint ("FAC") on December 21, 2009, Dkt. No. 13. On September 10, 2010, the 4 parties stipulated to Nella Oil's dismissal without prejudice from the case. Dkt. No. 47. This left 5 only Caldo Oil, Victor Lobue, and The Victor Lobue Trust, the alleged previous owners of Green 6

Valley's property, as Defendants in the case. With counsel for these parties present, the Court set a 7 case schedule on December 9, 2010. Dkt. No. 62. Under this schedule, fact discovery is set to 8 close on September 9, 2011, and a jury trial is scheduled for January 23, 2012. Id. On March 14, 9 2011, the Caldo Oil Defendants filed a motion for leave to file a counterclaim against Green Valley 10 and a third-party complaint against AEI Consultants and All Environmental, Inc. Dkt. No. 74. The

Court granted this motion and the Caldo Oil Defendants filed their third-party complaint and counterclaim on April 25, 2011. 13

14 intended to file an amended complaint adding the estates of Victor J. LoBue's parents, Salvadore 15 and Tanie Ann LoBue, as defendants. Counsel for the Caldo Oil Defendants stated that they might 16 oppose such an amendment. The Court ordered that the parties either stipulate to filing of the 17 proposed SAC, or that Plaintiff move for leave to file it, by April 28, 2011. See Dkt. No. 88. On 18

Plaintiff seeks leave to file the SAC to add a fifteenth cause of action of "nondisclosure," and to 20 add the Lobue Living Trust, the LoBue Fmaily Trust, and the estates of Salvadore R. LoBue and 21

Defendants timely filed their Opposition ("Opposition to Amend") on May 23, 2011. Dkt. No. 96. 23

Without leave of Court, Plaintiff filed the SAC itself on May 16, 2011, despite the fact that no 25 party stipulation had been reached approving this filing. Plaintiff now concedes this filing was in 26 error, and stated in its Reply to Amend that it would withdraw the SAC filed on May 16, 2011. 27

However, several months later, it has not done so. 28

Case No.: 09-CV-04028-LHK


At a case management conference on April 21, 2011, Plaintiff discussed the fact that it April 28, 2011, Plaintiff filed the Motion to Amend that is under consideration here. Dkt. No. 89.

Tanie Ann LoBue as defendants for most of the asserted causes of action. The Caldo Oil Plaintiff filed its Reply ("Reply to Amend") to the Opposition on June 1, 2011. Dkt. No. 100.

2 naming a subset of defendants identified in the SAC (Victor LoBue, the estates of Salvadore R. Marijo LoBue, wife of Victor LoBue. See Dkt. No. 99. The TPC asserts fourteen of the fifteen 5 causes of action asserted in the SAC, generally in identical language that appears to have been 6 copied from the SAC. The Caldo Oil Defendants and some of the other defendants, appearing 7 specially, moved to quash service ("Motion to Quash") of the TPC on June 16, 2011. See Dkt. No. 8

("Opposition to Quash") on July 7, 2011. See Dkt. No. 110. The Caldo Oil Defendants also 10 moved to strike and dismiss ("Motion to Strike") Plaintiff's SAC and TPC on June 16, 2011. See TPC") on July 7, 2011. See Dkt. Nos. 109, 110. The oppositions should have been filed by June 30, 2011. See Civ. L.R. 7-3(a). The Caldo Oil Defendants failed to file a reply brief in support of 15 either motion within the time provided by the Civil Local Rules. See Civ. L.R. 7-3(c). 16

A. Legal Standard

Under Federal Rule of Civil Procedure 15(a), a party may amend its pleading once as a matter of course within 21 days of serving it. Fed. R. Civ. Pro. 15(a)(1). After that initial period 20 has passed, amendment is permitted only with the opposing party's written consent or leave of the 21 court. Id. at 15(a)(2). Rule 15 instructs that "[t]he court should freely give leave when justice so 22 requires." Id. Although this rule "should be interpreted with extreme liberality, leave to amend is 23 not to be granted automatically." Jackson v. Bank of Hawaii, 902 F.2d 1385, 1387 (9th Cir. 1990) 24

(internal citation and quotation marks omitted). Courts commonly consider four factors when 25 determining whether to grant leave to amend: (1) bad faith on the part of the movant; (2) undue 26 delay; (3) prejudice to the opposing party; and (4) futility of the proposed amendment. Foman v. 27

986 (9th Cir. 1999). "[I]t is the consideration of prejudice to the opposing party that carries the Plaintiff also filed a pleading it titled a Third Party Complaint ("TPC") on May 27, 2011, LoBue and Tanie Ann LoBue, the LoBue Family Trust, and the LoBue Living Trust) and adding 102. Plaintiff filed its Opposition to the Caldo Oil Defendants' Motion to quash service Dkt. No. 104. Plaintiff filed its Opposition to the Motion to strike the SAC ("Opposition Strike SAC") on July 6, 2011, and its Opposition to the Motion to strike the TPC ("Opposition Strike 13


Davis, 371 U.S. 178, 182 (1962); Lockheed Martin Corp. v. Network Solutions, Inc., 194 F.3d 980, greatest weight." Eminence Capital, 316 F.3d at 1052 (citing DCD Programs, 833 F.2d at 185).

"Absent prejudice, or a strong showing of any of the remaining Foman factors, there exists a 3 presumption under Rule 15(a) in favor of granting leave to amend." Id. (citation omitted). "The 4 party opposing leave to amend bears the burden of showing prejudice." Serpa v. SBC Telecomms., Plaintiff has moved for leave to file a Second Amended Complaint so that it may add a fifteenth cause of action of nondisclosure. Plaintiff also seeks to add the Estates of Salvadore and . Futility of Plaintiff's Addition of the Estates of Salvadore and Tanie Ann LoBue

The Caldo Oil Defendants assert that allowing Plaintiff to file a Second Amended Complaint would be futile. Defs.' Opp'n at 4-5. "[A] proposed amendment is futile only if no set of facts can be proved under the amendment to the pleadings that would constitute a valid and 13 sufficient claim or defense." Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th Cir. 1988). The 14

Caldo Oil Defendants argue that granting leave to amend would be futile because, they believe, 15 claims two through fourteen are time-barred. Defs.' Opp'n at 4-5. Where an amended claim is 16 time-barred, the claim is futile, and amendment should be denied. See Platt Elec. Supply, Inc. v. 17

EOFF Elec., Inc., 522 F.3d 1049, 1060 (9th Cir. 2008). However, "a complaint cannot be 18 dismissed unless it appears beyond doubt that the plaintiff can prove no set of facts that would 19 establish the timeliness of the claim." Supermail Cargo v. United States, 68 F.3d 1204, 1207 (9th 20

"'An action to establish the decedent's liability for which the decedent was protected by

22 insurance may be commenced . . . without first filing a claim'" in probate. Van Ort v. Estate of 23

Stanewich, 92 F.3d 831, 841 (9th Cir. 1996) (citing Cal. Probate Code § 9390(a)). Here, Plaintiff 24 states the amendments in the SAC are made to "establish their [Salvadore and Tanie Ann LoBue's] 25 Inc., 318 F. Supp. 2d 865, 870 (N.D. Cal. 2004) (citing DCD Programs, 833 F.2d at 187). 6

Tanie Ann LoBue as defendants for twelve causes of action. 9 Cir. 1995).*fn1

liability for which they were protected by insurance." Pl.'s Mot. at 3. California Probate Code § 2 550, et. seq., therefore applies to this case, and Plaintiff was not required to file a probate claim 3 prior to adding the decedents as defendants to this suit. California Probate Code § 551 states that, "if the limitations period otherwise applicable to the action has not expired at the time of the 5 decedent's death, an action under this chapter may be commenced within one year after the 6 expiration of the limitations period otherwise applicable." In other words, if Plaintiff had a cause 7 of action against Salvadore or Tanie Ann LoBue during their lifetime, Plaintiff may sue on that 8 cause of action within one year of the action's normal statute of limitations. Therefore, Plaintiff's 9 claims against these estates are not necessarily time-barred. The Court must examine each cause of 10 action to see whether a claim may be brought against the decedents under § 551. Where a cause of action appears to be time-barred, the Court must evaluate whether that cause of action relates back to the filing of the original complaint.

14 relation back. "Under California law, a plaintiff who names a Doe defendant in his complaint and 15 alleges that the defendant's true name is unknown has three years from the commencement of the 16 action in which to discover the identity of the Doe defendant, to amend the complaint accordingly, 17 and to effect service of the complaint." Lindley v. General Electric Co., 780 F.2d 797, 799 (9th 18 Cir. 1986) (citing Cal. Civ. Proc. Code § 474). The Ninth Circuit has applied § 474 to state claims 19 filed in federal court pursuant to diversity jurisdiction. See generally id. The Ninth Circuit has 20 also applied this statute to claims brought under 42 U.S.C. § 1983 and to Bivens suits, as the statute 21 of limitations for those actions is governed by California law. See Kreines v. United States, 959 22

F.2d 834, 836-37 (9th Cir. 1992) (applying Cal. Civ. Proc. Code §§ 474 to a Bivens suit); Cabrales 23

v. County of Los Angeles, 864 F.2d 1454, 1462-64 (9th Cir. 1988) (applying the statute to a § 1983 24 suit). California's law governing relation-back of claims therefore applies to state law claims over 25 which a federal court has supplemental jurisdiction, as California law determines the statute of 26 limitations to be applied to such claims. Accordingly, the Court will apply § 474 here in its 27 examination of whether each claim may be related back. 28

As a preliminary matter, the Court notes that California law applies to the question of Plaintiff filed its original complaint on August 31, 2009. See Dkt. No. 1. The Motion for Leave was filed on April 28, 2011 (Dkt. No. 89), well within the three years California law allows 3 for relation back. Where a state-law claim would be time barred if it were considered to have been 4 brought for the first time in Plaintiff's SAC, but would be timely if raised in the initial complaint, 5 the Court must treat the claim as though it were filed at the time of the original complaint, on 6

August 31, 2009. The Court must decide whether each of the applicable twelve claims could have 7 been brought against the decedents on August 31, 2009. 8

Plaintiff has not amended its first cause of action for abatement of an imminent and

substantial endangerment brought under 42 U.S.C. § 6972(a)(1)(B). In the First Amended

LoBue, the Victor LoBue Trust, and Nella Oil Company. FAC at 1, 7. In the SAC, this cause of 13 action is brought against defendants Caldo Oil, Victor LoBue, and the Victor LoBue Trust. SAC at 14

8.*fn2 Because this claim is asserted against the same defendants in both complaints, the Court need 15 not examine this claim, as it has not changed. Accordingly, Plaintiff's Motion to Amend is 16

2. Second Through Fifth Causes of Action: Nuisance

Four of Plaintiff's causes of action against the Caldo Oil Defendants involve nuisance:

19 abatement of a public nuisance, abatement of a public nuisance per se, abatement of a continuing 20 private nuisance, and abatement of a continuing private nuisance per se. Neither a public nuisance 21 nor a public nuisance per se is subject to a statute of limitations. Cal. Civ. Code § 3490 ("No lapse 22 of time can legalize a public nuisance, amounting to an actual obstruction of public right."). 23

Similarly, a continuing private nuisance effectively has no statute of limitations, as "every 24 continuation of the nuisance gives rise to a separate claim for damages caused by the nuisance." 25

Mangini v. Aerojet-General Corp., 12 Cal. 4th 1087, 1093 (Cal. 1996) (internal citations and 26 quotation marks omitted). The continuing nature of the alleged wrong prevents a statute of 27

No. 47.

1. First Cause of Action: Imminent and Substantial Endangerment


Complaint, this cause of action was brought against "all Defendants," meaning Caldo Oil, Victor

GRANTED as to the first cause of action. 17

limitations from being applied to these claims. Based on the pleadings, it appears that neither 2

Plaintiff's claims for public nuisance, nor its claims for continuing private nuisance, are subject to 3 a statute of limitations. If this is true, these claims did not expire before August 31, 2009. 4

Therefore, Plaintiff's nuisance claims against the estates of Salvadore and Tanie Ann LoBue do not 5 appear to be time-barred. Accordingly, the Court GRANTS Plaintiff's Motion to Amend with 6 respect to these claims. 7

Plaintiff alleges that Salvadore and Tanie Ann LoBue, along with the existing defendants,

9 perpetuated a continuing trespass upon Plaintiff's land. SAC ¶¶ 92-97. Similar to a continuing 10 nuisance, "[c]ontinuing trespasses are essentially a series of successive injuries, and the statute of 11

153 Cal. App. 4th 583, 592 (2007). Like a continuing nuisance claim, Plaintiff's action for 13 continuing trespass may not be dismissed as time-barred based on the facts alleged in the SAC. 14

4. Seventh and Eighth Causes of Action: Negligence

Plaintiff's seventh and eighth causes of action are for negligence and negligence per se.

SAC ¶¶ 98-110. "[F]or limitations purposes, the gravamen of a soil contamination claim is that the 18 real property, not any particular owner, has been injured by a condition that has been created, 19 whether deliberately or negligently." McCoy v. Gustafson, 180 Cal. App. 4th 56, 105 (Cal. 2009). 20

Code. Civ. Proc. § 338. Where the plaintiff does not discover his injury until after the defendant's 22 death, the cause of action is considered to have begun accruing at the time of discovery, and is not 23 necessarily limited by the defendant's death. See Romo v. Estate of Bennett, 97 Cal. App. 3d 304, 24

the plaintiff suspects or should suspect that her injury was caused by wrongdoing, that someone has done something wrong to her. Once the plaintiff suspects the wrongdoing, she must find the facts necessary for suit and decide whether to file.

It is the discovery of facts, not their legal significance, that starts the statute.

3. Sixth Cause of Action: Continuing Trespass

Starrh & Starrh Cotton Growers v. Aera Energy LLC,

limitations begins anew with each injury." 12

The Court therefore GRANTS Plaintiff's Motion to Amend with respect to this claim.

California applies a three-year statute of limitations to actions for negligent injury to property. Cal. 21

307-308 (1979). That is, the statute of limitations does not begin to run until: 25

Hook v. Lockheed Martin Corp. (In re Burbank Envtl. Litig.), 42 F. Supp. 2d 976, 981 (C.D. Cal. 2 1998) (citations and internal quotation marks omitted). 3

4 petroleum-impacted soil was discovered at the Property. FAC ¶ 29, SAC ¶ 28. California courts 5 have noted that where "a reasonably diligent inspection would have revealed the soil 6 contamination," the statute of limitations commences at the time that inspection occurred, or 7 should have occurred. Wilshire Westwood Assocs. v. Atlantic Richfield Co., 20 Cal. App. 4th 732, 8

Based on the pleadings, Plaintiff suspected wrongdoing as early as September 2006, when

740 (1993) (finding plaintiff had constructive notice of contamination even when the results of the 9 soil inspection failed to reveal it). Plaintiff knew as early as 2006 that the soil at the Property was 10 contaminated. FAC ¶ 29, SAC ¶ 28. Thus, based on the pleadings, the statute of limitations began 11

Plaintiff filed its original complaint on August 31, 2009. Plaintiff's claims against the

13 decedents relate back to this date for the reasons discussed above. Further, California Probate 14

Code § 551 extends the statute of limitations by one year, effectively making the statute of 15 limitations on this action four years. Based on the pleadings, it does not appear that these claims 16 are time-barred. The Court therefore GRANTS Plaintiff's Motion to Amend with respect to these 17 claims. 18

Plaintiff's ninth cause of action, for ultrahazardous activity, again involves injury to

20 property. SAC ¶¶ 111-14. Plaintiff must therefore have filed within the three-year statute of 21 limitations to recover on this action. See Wilshire 20 Cal. App. 4th at 743 (finding that the statute 22 of limitations for ultrahazardous activity resulting in property damage is three years, and citing 23

Plaintiff had presumptive knowledge of that activity. Id. at 740. As discussed above, based on the 25 pleadings, Plaintiff had presumptive knowledge of this activity in 2006, and the statute of 26 limitations thus expired in September 2009. Because Plaintiff's claim against the decedents would 27 then relate back to August 31, 2009, it appears to be timely. The Court therefore GRANTS 2006, and expired in September 2009.

to run at least as of September 12

United States District Court

For the Northern District of California

5. Ninth Cause of Action: Ultrahazardous Activity

Code Civ. Proc. § 338(b)). The statute of limitations for ultrahazardous activity commenced once 24

Plaintiff's Motion to Amend with respect to this claim.

6. Tenth, Eleventh, and Twelfth Causes of Action: Contribution, Contribution Under the Hazardous Substance Account Act, and Equitable Indemnity

3 contribution, contribution under the Hazardous Substance Account Act, and for equitable 4 indemnity. SAC ¶¶ 115-34. Whether these claims are futile against these potential defendants is a 5 question of fact which cannot be answered at this time. 6

7 of limitations, and do not begin to accrue until Plaintiff has made some payment. "It is elementary 8 that a party acquires a right of contribution as soon as he pays more than his share but not until 9 then." Jackson v. Lacy, 37 Cal. App. 2d 551, 559 (1940). Similarly, "the date of payment triggers 10

Plaintiff has asserted claims against the estates of Salvadore and Tanie Ann LoBue for

Plaintiff's causes of action for contribution and indemnity are subject to a three-year statute

the statute of limitations period for equitable indemnity." San Diego Unified Port Dist. v. TDY 11

Indus., No. 03 CV 1146-B (POR), 2006 U.S. Dist. LEXIS 54942 at *26 (S.D. Cal. Mar. 15, 2006). For both, courts have held that a three-year statute of limitations applies. Id. Plaintiff's cause of 13 action for contribution under the Hazardous Substance Account Act is also subject to a three-year 14 statute of limitations. Advanced Micro Devices, Inc. v. Nat'l Semiconductor Corp., 38 F. Supp. 2d 15

802, 814, 809 (N.D. Cal. 1999) (" a claim under Cal. Health & Safety § 25363 accrues at the same 16 time as a CERCLA contribution claim," which is "within three years after 'completion' of the 17

'removal action.'"). Plaintiff must therefore have brought its claims for contribution and equitable 18 indemnity within three years of incurring cleanup costs, plus an additional year as allowed by 19

California Probate Code § 551. 20

21 petroleum was first found at the Property in September 2006, and that at some point thereafter 185 22 tons of impacted soil were hauled away. FAC ¶ 28, SAC ¶ 28. Plaintiff also alleges that 23 groundwater monitoring wells were constructed at the Property in May 2008. FAC ¶ 31, SAC ¶ 24

31. Based on the pleadings, Plaintiff does not appear to have incurred cleanup costs before 25

September 2006. 26

27 prove no set of facts that would establish the timeliness of the claim." Supermail, 68 F.3d at 1207. 28

The SAC does not allege when Plaintiff began to incur cleanup costs. Plaintiff alleges that

"[A] complaint cannot be dismissed unless it appears beyond doubt that the plaintiff can Here, it appears that Plaintiff incurred the costs for which it seeks contribution after September 2 2006. If so, Plaintiff's cause of action was timely filed in its original complaint, and the claims in 3 the SAC relate back to that filing and are not time-barred. Because these claims are not clearly 4 time-barred based on the pleadings, the Court GRANTS Plaintiff leave to amend this cause of 5 action. 6

Plaintiff's thirteenth cause of action, for waste, is not clearly time-barred such that

8 amendment would be futile. "Section 338(b) of the California Code of Civil Procedure sets forth 9 the applicable statute of limitations for waste . . . ." Galen v. Mobil Oil Corp., 922 F. Supp. 318, 10

presumptive notice of the alleged waste in 2006, and this claim was brought against the Caldo Oil 13

7. Thirteenth Cause of Action: Waste

323 n.7 (C.D. Cal. 1996). "The applicable statute of limitations for [this] claim[] is three years."

Id. at 320; see also Cal. Code Civ. Proc. § 338(b). Here, Plaintiff alleges that it received Defendants on August 31, 2009. As with Plaintiff's claims for negligence and ultrahazardous 14 activity, if the pleadings are accurate (as the Court must assume they are at this stage), this claim 15 relates back to August 31, 2009, and is thus not time-barred. The Court therefore GRANTS 16

8. Fourteenth Cause of Action: Declaratory Relief

Plaintiff has requested "a judicial determination of its rights and duties and a declaration

19 that the Caldo Oil Defendants are liable to Green Valley for all response[] costs incurred or to be 20 incurred by Green Valley." FAC ¶ 144, SAC ¶ 142. Specifically, Plaintiff wishes the Court to 21 decide defendants' liability for "response[] costs for the purpose of this and any subsequent 22 actions." FAC ¶ 145, SAC ¶ 143. "The statute of limitations for declaratory relief under state law 23 is the one that corresponds to the legal or equitable action on which the declaratory relief claim is 24 based." San Diego Unified Port Dist. v. TDY Indus., No. 03 CV 1146-B (POR), 2006 U.S. Dist. 25

Cal.2d 719, 733 (1944)). Here, Plaintiff appears to ask the Court to declare that defendants are 27 obligated to contribute. The Court has found that Plaintiff's causes of action for indemnity and 28 contribution are not time-barred based on facts alleged in the pleadings. The Court therefore finds Plaintiff's Motion to Amend with respect to this claim. 17

LEXIS 54942 at *28 (S.D. Cal. Mar. 15, 2006) (citing Maguire v. Hibernia Sav. & Loan Soc., 23 26 that Plaintiff's cause of action for declaratory relief is not time-barred, either. The Court GRANTS 2

Plaintiff's Motion to Amend as to these claims. 3

Plaintiff has added a new cause of action, for nondisclosure, in its Second Amended

Complaint. SAC ¶¶ 145-49. While this cause of action is not alleged against decedents, the Court 6 will examine whether this cause of action is futile against the other defendants. Plaintiff alleges 7 that the Caldo Oil Defendants had a duty to disclose facts that could materially affect the value of 8 the Property. SAC ¶ 146. Plaintiff's claim sounds in fraud. California Code of Civil Procedure § 9

9. Fifteenth Cause of Action: Nondisclosure

338 provides that causes of action for fraud must be brought "within three years," and that these 10 causes are "not deemed to have accrued until the discovery, by the aggrieved party, of the facts

constituting the fraud or mistake." Cal. Code Civ. Proc. § 338(d).

As discussed above, Plaintiff discovered its injury in September, 2006. An action for

13 nondisclosure should therefore have been brought by September, 2009. Plaintiff's Motion as to 14 this claim may therefore only be granted if this cause of action is related back to the filing of 15

Plaintiff's original complaint. Here, Plaintiff is alleging a new cause of action, rather than 16 substituting named defendants for Does, and California Civil Procedure Code § 474 does not apply. 17

See Cal. Civ. Proc. § 474. To be related back, Plaintiff's new cause of action must "assert[] a claim 18 or defense that arose out of the conduct, transaction, or occurrence set out-or attempted to be set 19 out-in the original pleading." Fed. R. Civ. P. 15(c)(1)(B). 20

21 sufficient to impart fair notice of the transaction, occurrence, or conduct called into question," the 22

(9th Cir. 1989). If an "amended pleading essentially recapture[s] the facts formerly alleged," the 24

Ninth Circuit has found the original and amended pleadings to "undoubtedly emanate from a 25 common core of operative facts." Id. at 325. A comparison of Plaintiff's original complaint 26 against the Second Amended Complaint reveals that the factual allegations are virtually identical 27 between the two pleadings. See generally SAC ¶¶ 20-48; Dkt. No. 1 ¶¶ 17-50. In addition, 28

Where the original and amended complaint "share a common core of operative facts

Ninth Circuit has held that the new claim relates back. Martell v. Trilogy, Ltd., 872 F.2d 322, 327 23

Plaintiff's new claim for nondisclosure of contamination is clearly related to the previously- asserted claims, all of which relate to the alleged contamination. Therefore, Plaintiff's new claims 2 arise out of the conduct and occurrences set out in its original pleadings. 3

4 original complaint. Accordingly, Plaintiff's motion is GRANTED as to this claim. 5

The Caldo Oil Defendants argue that Plaintiff's Motion to Amend was brought in bad faith.

Opp'n to Amend at 6-7. The Caldo Oil Defendants claim that Plaintiff is adding the estates of 8

The Court concludes that Plaintiff's fifteenth cause of action relates back to the filing of its

C. Bad Faith, as to all Amendments

Salvadore and Tanie Ann LoBue in retaliation for their unwillingness to stipulate to Plaintiff's 9 amended pleadings. Opp'n to Amend at 7. Plaintiff denies this. Mot. to Amend at 6. The Court 10 rejects the Caldo Oil Defendants' conclusory allegation. Plaintiff states that it seeks to add these

estates to the litigation because the decedents owned the property at issue prior to Defendant Victor

LoBue, and may have contributed to Plaintiff's injury. Mot. to Amend at 3. This explanation 13 appears reasonable. The Caldo Oil Defendants have provided no support for their assertion that 14

Plaintiff is acting in bad faith. The Court will not deny Plaintiff's Motion to Amend on this 15 ground. 16

The Caldo Oil Defendants argue that Plaintiff's amendment would be prejudicial. Opp'n to

Amend at 7-8. In support of this contention, they state that the addition of decedents to this cause 19 of action makes the Second Amended Complaint "a drastically different pleading" (Opp'n to 20

Plaintiff should have stated earlier. Id. Plaintiff responds that discovery in this case did not begin 22 until December 2010, that the alleged nondisclosure has always been at issue, and that 23 investigating whether the decedents created the nuisance, etc., will not require much more 24 discovery. Reply at 7. The Court agrees with Plaintiff. 25

The Caldo Oil Defendants cite no specific discovery burden they will face in defending

26 against these claims. Given that the underlying causes of action are the same, it appears the parties 27 should already be conducting discovery on these issues. If the Caldo Oil Defendants truly faced 28

D. Prejudice, as to all Amendments

Amend at 8), and that the claim for nondisclosure "is a fundamentally different allegation" which "significant new discovery," as they claim, they should have articulated what this discovery is, and why it is so burdensome. Without a specific showing of prejudice, the Court finds that this factor 2 does not weigh against amendment. 3

The Caldo Oil Defendants argue that Plaintiff's Motion was brought with undue delay.

Opp'n to Amend at 6-7. Specifically, the Caldo Oil Defendants argue that Plaintiff should have 6

6. The Court notes that on April 25, 2011, just three days before Plaintiff filed its Motion, the 8

Caldo Oil Defendants filed a Third Party Complaint adding two cross-defendants to this action. 9

2011, to delay the progress of this case any more than the Caldo Oil Defendants' Third Party 11

12 moved to amend its complaint within the deadline set by the Court. See Dkt. No. 88. 13 Even if it did, it could not deny Plaintiff's Motion on grounds of undue delay without a strong 16 showing on the factors of futility, bad faith, or prejudice. As the Court has found neither futility, 17 nor bad faith, nor prejudice, it GRANTS Plaintiff's Motion to Amend. 18

A. Motion to Strike and Dismiss the Second Amended Complaint

The Caldo Oil Defendants state that they move to dismiss the SAC based on various sub-

21 parts of Federal Rule of Civil Procedure 12, but do not specify why the SAC should be dismissed 22 for failure to state a claim or any other ground under Rule 12. Rather, they assert that "all of the 23 deficiencies are readily apparent on the face of" Plaintiff's SAC. Mot. to Strike at 5. This 24 conclusory allegation is not enough to support dismissal of Plaintiff's SAC based on Rule 12. 25

Rather than attacking the substance of the allegations in the SAC, the Caldo Oil Defendants argue 26 that the SAC should be stricken and dismissed because Plaintiff did not have leave to file the SAC 27 at the time it was presented to the Court, and because Plaintiff has not withdrawn the SAC from the 28

Case No.: 09-CV-04028-LHK


E. Undue Delay, as to all Amendments

"included all parties and all causes of action" in its original or its First Amended Complaint. Id. at 7

See Dkt. No. 87. The Court does not consider Plaintiff's Motion to Amend, filed on April 28, 10

Complaint, requested on March 14, 2011 (Dkt.

No. 74), and filed on April 25, 2011. Plaintiff "[U]ndue delay alone is insufficient to justify denying a motion to amend." Schultz v. Wal-Mart Stores, Inc., 68 Fed. Appx. 130, 131 (9th Cir. 2003). The Court finds no undue delay here.


Electronic Court Filing system (ECF). Id. at 6, 9. As discussed above, Plaintiff has previously admitted that the May 16, 2011 filing of the SAC was in error and that it would withdraw that 2 filing. The Court orders that Plaintiff withdraw the SAC filed on May 16, 2011 within 1 day of 3 the date of this Order. Plaintiff shall also re-file the same SAC within 1 day of the date of this 4

B. Motion to Strike and Dismiss the Third Party Complaint

In the same Motion regarding the SAC, the Caldo Oil Defendants move to strike and

7 dismiss Plaintiff's TPC. Mot. Strike at 4-7. They argue that Plaintiff has not followed the proper 8 procedures with regard to this document, and that it should be dismissed under Rule 12(b)(1), (2), 9

7, 5. Federal Rule of Civil Procedure 14 "authorizes a defendant party to bring into a lawsuit a

'nonparty who is or may be liable for all or part of the claim against it.'" 6 Charles Alan Wright et

al., Federal Practice and Procedure § 1446 (3d ed. 2002). Plaintiff's so-called "Third Party 13

Order. 5

(4)-(6), and stricken under Rule 12(f) because it is "scandalous and impertinent and worse." Id. at 10 Complaint" does not state claims against any third parties. Instead, it asserts the same claims 14 asserted in the SAC (minus the first claim for Abatement under RCRA) against substantially the 15 same defendants named in the SAC (excluding Caldo Oil, and including Marijoe LoBue, wife of 16

Victor J. LoBue). In fact, the claims in the TPC are identical to fourteen of the fifteen claims set 17 forth in the SAC. Simply put, the TPC is not a proper TPC because it does not name third parties. 18

TPC does not assert that Marijoe LoBue is liable to the Plaintiff for a claim brought against the 20

Plaintiff in this lawsuit, as required by Rule 14. Instead, it simply adds Ms. LoBue as a defendant 21 to the already-asserted claims of the SAC. If Plaintiff wished to add Ms. LoBue as a defendant, it 22 should have moved to do so when it filed the SAC. The TPC is duplicative, and an attempted end-23 run around the opposition to Plaintiff's request for leave to file the SAC. Therefore, the Court 24


27 that no summons were issued by the Court Clerk, that the TPC was filed without leave, that the 28 named parties do not exist, and that there is no person or entity that may accept service. Mot. to

Case No.: 09-CV-04028-LHK


The only individual who is not named as a defendant in the SAC is Marijoe LoBue. However, the 19

GRANTS the Caldo Oil Defendants' request to strike the TPC. 25 The Caldo Oil Defendants have also moved to quash service of Plaintiff's TPC, claiming Quash at 2-3. Because the Court has granted the Caldo Oil Defendants' motion to strike the TPC, 2 this argument is moot. Therefore, it is DENIED on this ground. 3


For the reasons set forth above, the Court orders as follows:

(1) The Court GRANTS Plaintiff's Motion for Leave to File a Second Amended Complaint.

(2) The Court GRANTS's Motion to Strike Plaintiff's Third Party Complaint and DENIES

The Caldo Oil Defendants' Motion to Strike and Dismiss Plaintiff's Second Amended Complaint.

(3) The Court DENIES the Caldo Oil Defendants' Motion to Quash Service of Plaintiff's

(4) The Court hereby order that any further amendment of pleadings or addition of parties must be supported by a showing of good cause under Federal Rule of Civil Procedure


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