MEMORANDUM AND ORDER RE: MOTIONS FOR JUDGMENT ON THE PLEADINGS
Charles H. Lewis and Jane W. Lewis (the "Lewises") brought this action pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. §§ 9601-9675, for recovery of costs incurred removing hazardous substances from a piece of real property located in Davis, California ("Property"). Presently before the court are defendant Vic Manufacturing Company's ("Vic") motions for judgment on the pleadings on The Davis Center LLC's ("Davis Center") First Amended Cross-Claims and the City of Davis' First Amended Cross-Claims pursuant to Federal Rule of Civil Procedure 12(c).
I. Factual and Procedural Background This multi-party litigation concerns the contamination of the Property with tetrachloroethene ("PCE"), a chemical allegedly released through the operation of a dry cleaning facility on the Property. (See Second Am. Compl. ("SAC") ¶ 40 (Docket No. 197).) The parties include the alleged owners and managers of the Property during the relevant time period, the operators of the dry cleaning facility, the entities that supplied and removed the PCE, and the manufacturers of the equipment used in dry cleaning operations at the Property. (See id. ¶¶ 7-25; First Am. Third Party Compl. ("FATPC") ¶¶ 1-2 (Docket No. 198).) The City of Davis is also a party to the litigation because of its alleged role in maintaining the underground sewer system that services the Property. (SAC ¶ 22.) Since the filing of the original complaint in 2003, the parties have filed numerous counterclaims, crossclaims, and third-party claims for contribution pursuant to 42 U.S.C. § 9613(f).
In February 1999, the California Regional Water Quality Control Board, Central Valley Region ("RWQCB"), informed the owners and operators of the Property that it had discovered PCE in the soil and groundwater at the Property. (SAC ¶ 40.) The RWQCB then issued a Cleanup and Abatement Order on October 2, 2002, instructing the current and past owners and operators of the Property to investigate the extent of the PCE contamination and to prepare work plans to address the contamination. (Id. ¶ 42.) Thereafter, some of the parties, including the Lewises, incurred costs in carrying out the activities ordered by the RWQCB. (Id. ¶¶ 42, 46.)
The Lewises filed the Complaint in this action on December 9, 2003, seeking various forms of declaratory relief and asserting claims for cost recovery and contribution, 42 U.S.C. §§ 9607, 9613; contribution and/or indemnity, Cal. Health & Safety Code § 25363(e); equitable indemnity and contribution; negligence; and breach of contract. (See Compl. (Docket No. 1).) After more than a year of litigation, including the filing of numerous cross-claims, counter-claims, a third-party complaint by the Davis Center, and answers thereto, the court ordered a stay of litigation on April 13, 2005, to facilitate an agreed-upon settlement process. (See Order of Settlement Process 1:23-2:2, 12:6-7 (Docket No. 124).) After the settlement process failed to resolve of the litigation, the court dissolved the stay on September 12, 2008. (See Sept. 12, 2008 Order (Docket No. 253).
During the settlement stay, the court granted plaintiffs leave to file
their SAC. (Aug. 8, 2007 Order (Docket No. 195).) Vic was first named
as a party in the litigation proceedings on August 22, 2007, when
plaintiffs filed their SAC adding Vic as a defendant. (Docket No.
197.) The SAC alleges that Vic manufactured at least one of the dry
cleaning machines used on the property. (SAC ¶ 24.)*fn1
On September 6, 2007, Davis Center filed its First Amended
Third Party Complaint ("FATPC") naming Vic as a third-party defendant
for the first time. (Docket No. 198.) The City of Davis added Vic as a
party to its cross-claims on February 29, 2008, when it filed its
First Amended Cross-Claim ("FACC"). (Docket No. 229.)
Vic filed its Answers to the SAC, FATPC, and FACC on November 27, 2007, January 29, 2008, and April 3, 2008, respectively. (See Docket Nos. 206, 222, 237.) Vic did not raise incapacity as an affirmative defense in any of its responsive pleadings. Vic raised the subject of its corporate dissolution only in its Answer to City of Davis' FACC. In its Answer, Vic states that:
In response to paragraph 20, this answering defendant admits it was a duly formed and operating corporation but is now a dissolved corporation and it otherwise denies the allegations in paragraph 20 to the extent that they pertain to it and otherwise lacks sufficient information and belief upon which to answer the allegations contained in said paragraph, and based thereon denies each and every allegation therein. (Answer of Third-Party Def. Vic to City of Davis' FACC ("Answer to FACC") ¶ 19.) There are no additional references to Vic's status as a dissolved corporation in its responsive pleadings. In each of its responsive pleadings, Vic did raise as affirmative defenses that the complaint did not state facts sufficient to state a cause of action against Vic, (id. at 8; Answer of Third-Party Def. Vic to FATPC ("Answer to FATPC") at 7), and the statute of limitations, (Answer to FACC at 10; Answer to FATPC at 9).
Also during the settlement stay, Jung Hang Suh and Soo Jung Suh, who allegedly operated the dry cleaning facility from 1996 through 2005 (SAC ¶ 36), filed for bankruptcy. (See Dec. 14, 2005 Order (Docket No. 162) at 1:25.) The case was thus automatically stayed as to them pursuant to 11 U.S.C. § 362, which prevents the "commencement or continuation . . . of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the commencement" of the bankruptcy action. 11 U.S.C. § 362(a)(1). On May 7, 2009, the court stayed the entire action pursuant to 11 U.S.C. § 362(a), reasoning that the claims by and against the Suhs were so integral that they could not be meaningfully excised from the litigation. Lewis v. Russell, No. CIV S-03-2646 WBS KJM, 2009 WL 1260290, at *3 (E.D. Cal. May 7, 2009); (Docket No. 301). Following the resolution of the Suh's bankruptcy proceedings, the stay was lifted on January 29, 2011. (Docket No. 333.)
Once the bankruptcy stay was lifted, the parties filed an Amended Joint Status Report on April 4, 2011. (Docket No. 341.) In the status report, Vic states that: "Vic is a dissolved Minnesota corporation. Under Minnesota law, the present claim is untimely as no claim was filed against Vic within 2 years after the date it filed its notice of intent to dissolve." (Am. Joint Status Report at 15:16-19 (citing Minn. Stat. § 302A.7291 subd. 3; Camacho v. Todd & Leiser Homes, 706 N.W.2d 49 (Minn. 2005)).) Vic requested that the court stay further discovery until it was able to file a motion for judgment on the pleadings raising its incapacity claim. (Id. at 19:27-20:19.) The court did not grant the requested stay. (April 13, 2011 Order at 3 n.1 (Docket No. 344.))
Vic now seeks entry of a Rule 12(c) judgment on the pleadings on the City of Davis' FACC and Davis Center's FATPC on the basis that it lacked the capacity to be sued in federal court pursuant to Rule 17(b) when the parties first asserted claims against Vic in this action. In its motions, Vic states that it was dissolved under Minnesota law on February 25. 2002. (Req. for Judicial Notice Ex. A; Mot. for J. on the Pleadings on Davis Center's FATPC at 4:5-7; Mot. for J. on the Pleadings on City of Davis' FACC at 4:1-2.)
A. Motion for Judgment on the Pleadings "After the pleadings are closed -- but early enough not to delay trial -- a party may move for judgment on the pleadings." Fed. R. Civ. P. 12(c). A Rule 12(c) motion may ask for judgment on the basis of plaintiff's "[f]ailure to state a claim upon which relief can be granted." Id. 12(h)(2)(B). Such a motion is essentially equivalent to a Rule 12(b)(6) motion to dismiss, so a district court may "dispos[e] of the motion by dismissal rather than judgment."*fn2 Sprint Telephony PCS, L.P. v. Cnty. of San Diego, 311 F. Supp. 2d 898, 903 (S.D. Cal. 2004).
Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The Supreme Court has explained that the pleading standard rests on two principles. First, "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions." Id. While showing an entitlement to relief "does not require 'detailed factual allegations,' . . . it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Id. (quoting Twombly, 550 U.S. at 555). Second, "only a complaint that states a plausible claim for relief survives a motion to dismiss." Id. at 1950. If the pleadings "do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged -- but it has not 'show[n]' -- 'that the pleader is entitled to relief.'" Id. (quoting Fed. R. Civ. P. 8(a)(2)).*fn3
Federal Rule of Civil Procedure 17(b)(2) provides that a corporation's capacity to be sued is determined by reference to the law of the state in which it is incorporated. Vic was incorporated in the state of Minnesota and dissolved in accordance with Minnesota law on February 25, 2002. (Def's Req. for Judicial Notice, Ex. A.) Accordingly, ...