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Chapman University v. Atlantic Richfield Co.

United States District Court, Ninth Circuit

July 30, 2013



DAVID O. CARTER, District Judge.


Defendants Stephen D. Massman and Rita J. Pynoos ("Defendants") have filed a Motion to Dismiss (Dkt. 35). The Court finds this matter appropriate for decision without oral argument. Fed.R.Civ.P. 78; Local Rule 7-15.

Defendants seek to dismiss causes of action for private nuisance, public nuisance, breach of contract, violation of California Health & Safety Code § 25359.7(a), and declaratory relief. After considering the moving papers, Opposition, and Reply, the Court GRANTS the Motion to Dismiss in part as to both nuisance claims, and DENIES in part as to the breach of contract, health and safety code, and declaratory relief causes of action.

I. Background

The focus of the First Amended Complaint[1] (Dkt. 5 "FAC"), brought by Plaintiff Chapman University ("Plaintiff"), is that Defendants sold Plaintiff property adjacent to the University's campus (the "Property") that was contaminated from prior industrial use. Around 1922, California Wire & Cable Company began operating a wire manufacturing plant at the Property. FAC ¶ 31. In 1930, Anaconda Wire and Cable Company acquired California Wire & Cable Company, including the wire manufacturing plant. Id. ¶ 33. Over time, Atlantic Richfield Company ("Richfield") acquired interest in the Property as well. Id. ¶ 37. In making wires, the plants used solvents that contained various chemicals. Id. ¶ 39. Defendants Pynoos and Massman bought the Property[2] in 1983, and on November 2, 1998, sold the Property to Plaintiff. Request for Judicial Notice Ex. F at 158; Id. ¶ 18.

As outlined in the Purchase Agreement, Defendants claimed that there was no contamination currently on the Property, and that there had not been "spills or disposal of" contaminants on the Property as a result of past activities. Id. ¶ 50. Also, Plaintiff alleges that "Defendants provided Chapman with environmental assessments of the property and assurances that Chapman could rely upon these assessments... [which] reported that there was no significant contamination at the property." Id. ¶ 51.

Plaintiff intended to develop the Property to build the "Filmmaker's Village, " containing a residence hall, commissary building, and parking structure for the Dodge College of Film and Media Arts. Id. ¶ 19-20. However, in October 2011 Chapman discovered contamination on the Property. Id. ¶ 24. The contamination included the same chemicals used to make wires. Id. ¶ 39. Plaintiff concludes that those chemicals leaked into the environment surrounding the facility. Id. ¶ 40. Plaintiff further concludes that "Defendants knew or reasonably should have known that the Property was contaminated at the time of the sale in 1998." Id. ¶ 54. The cost of investigating and removing the contamination is estimated to exceed $5, 000, 000. Id. ¶ 29. Due to the contamination discovered on the Property, Plaintiff was forced to terminate plans for the Filmmaker's Village. Id. ¶ 23.

On October 24, 2012, Plaintiff filed a Complaint alleging fourteen causes of action against Richfield, Massman, Pynoos, and Does 1-10. The causes of action against Defendants Massman and Pynoos include, (1) Private Nuisance, (2) Public Nuisance, (3) Breach of Contract, (4) Violation of California Health & Safety Code § 25359.7(a), and (5) Declaratory Relief. Defendants move the Court to dismiss all five causes of action.

II. Legal Standard

Under Federal Rule of Civil Procedure 12(b)(6), a complaint must be dismissed when a plaintiff's allegations fail to set forth a set of facts which, if true, would entitle the complainant to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (holding that a claim must be facially plausible in order to survive a motion to dismiss). The pleadings must raise the right to relief beyond the speculative level; a plaintiff must provide "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly , 550 U.S. at 555 (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). On a motion to dismiss, this court accepts as true a plaintiff's well-pled factual allegations and construes all factual inferences in the light most favorable to the plaintiff. Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). The court is not required to accept as true legal conclusions couched as factual allegations. Iqbal , 556 U.S. at 678.

In evaluating a Rule 12(b)(6) motion, review is ordinarily limited to the contents of the complaint and material properly submitted with the complaint. Clegg v. Cult Awareness Network, 18 F.3d 752, 754 (9th Cir. 1994); Hal Roach Studios, Inc. v. Richard Feiner & Co., Inc., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990). Under the incorporation by reference doctrine, the court may also consider documents "whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the pleading." Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994), overruled on other grounds by 307 F.3d 1119, 1121 (9th Cir. 2002).

Additionally, Federal Rule of Evidence 201 allows the court to take judicial notice of certain items without converting the motion to dismiss into one for summary judgment. Barron v. Reich, 13 F.3d 1370, 1377 (9th Cir. 1994). The court may take judicial notice of facts "not subject to reasonable dispute" because they are either: "(1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." Fed.R.Evid. 201; see also Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001) (noting that the court may take judicial notice of undisputed "matters of public record"), overruled on other grounds by 307 F.3d 1119, 1125-26 (9th Cir. 2002). The court may disregard allegations in a complaint that are contradicted by matters properly subject to judicial notice. Daniels-Hall v. Nat'l Educ. Ass'n, 629 F.3d 992, 998 (9th Cir. 2010).

Dismissal without leave to amend is appropriate only when the court is satisfied that the deficiencies in the complaint could not possibly be cured by amendment. Jackson v. Carey, 353 F.3d 750, 758 (9th Cir. 2003); Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (holding that dismissal with leave to amend should be granted even if no request to amend was made). Rule 15(a)(2) of the Federal Rules of Civil Procedure states that leave to amend should be freely given "when justice so requires." ...

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