Judge David S. Cunningham, Case BC544786 2022-10-11 Tentative Ruling

Judge: David S. Cunningham, Case: BC544786, Date: 2022-10-11 Tentative Ruling

Case Number: BC544786 Hearing Date: October 11, 2022 Dept: 11

BC544786 (Shell Oil)

Order Re: Motion for Judgment on the Pleadings

Date: 10/11/22

Moving Party: Shell Oil Co. (“Shell”)

Opposing Party: Barclay Hollander Corp. (“Barclay” or “BHCorp”)

Department: 11

Judge: David S. Cunningham III

________________________________________________________________________

ORDER

Shell’s motion for judgment on the pleadings is granted.

BACKGROUND

“Shell has incurred and continues to incur [costs] to investigate and remediate environmental contamination in the Carousel neighborhood tract in Carson California (the ‘Site’).” (Motion [in Limine], p. 1.) “The Regional Water Quality Control Board, Los Angeles Region (‘Water Board’) issued a Cleanup and Abatement Order (‘CAO’) determining that both Shell and Barclay are responsible for the contamination and directing them both to ‘assess, monitor, cleanup and abate’ it.” (Ibid.)

Shell claims, “[f]or years,” it “has been performing the major environmental remediation in the neighborhood” without Barclay’s help. Accordingly, Shell filed an action for “contribution and indemnity . . . for the cleanup costs, as well as declaratory relief.” (Ibid.)

(5/27/22 Tentative Ruling Re: Motion in Limine, p. 1.)

Here, Shell moves for judgment on the pleadings as to Barclay’s second affirmative defense regarding the statute of repose.

The Court took the matter under submission, read and considered the parties’ papers, and now announces its ruling.

LAW

A defendant may move for judgment on the pleadings on the ground that the complaint does not state facts sufficient to state a cause of action against that defendant. [Citations.] A motion for judgment on the pleadings “is equivalent to a demurrer and is governed by the same de novo standard of review.” [Citation.] Leave to amend “is properly denied if the facts and nature of plaintiffs’ claims are clear and under the substantive law, no liability exists.” [Citation.]

(Templo v. State (2018) 24 Cal.App.5^th 730, 735.)

“A defendant’s motion for judgment on the pleadings may be made after the time to demur has expired and an answer has been filed.” (Weil & Brown, Cal. Prac. Guide: Civ. Proc. Before Trial (The Rutter Group 2021) ¶ 7:279, emphasis in original; see also Code Civ. Proc. § 438, subd. (f).)

DISCUSSION

Shell contends the motion should be granted because:

Barclay’s statute of repose defense has been fully litigated multiple times and rejected at every level of judicial review. The statute of repose does not apply to Shell’s claims for equitable indemnity, contribution, and declaratory relief “as a matter of law.” [Citation.] Shell’s claims “arise from Barclay’s joint and several liability ‘to assess, monitor, cleanup and abate the effects of petroleum hydrocarbon compounds and other contaminants of concern discharged to soil and groundwater’ at the Carousel neighborhood under Cleanup and Abatement Order No. No. R4-2011-0046 issued by the [Water Board] on April 30, 2015 [], and they are not based on construction defects for the purposes of section 337.15.” [Citation.]

(Motion, p. 5.)

Barclay responds:

* “Shell’s motion does not identify any defect in sufficiency of the pleading of the Statute of Repose in this affirmative defense.” (Opposition, p. 7.)

* “Shell did not file a cross summary judgment motion arguing that the Statute of Repose cannot be applied to this litigation as a matter of law, and thus did not file any of the procedural requirements of Code of Civil Procedure section 437c.” (Id. at p. 9.) “The court could not grant a summary judgment motion that did not exist, and thus the court’s order denying BHCorp’s summary judgment motion cannot prevent BHCorp from making Statute of Repose arguments during the upcoming trial.” (Ibid.) “Because Shell did not file a cross summary judgment motion, the only effect of the court’s denial of BHCorp’s summary judgment motion was that an issue of fact remained as to whether the Statute of Repose applied to bar Shell’s case against BHCorp.” (Ibid.)

* “As long as BHCorp can raise a material issue of fact as to the application of the Statute of Repose during trial, Shell’s motion must be denied. [Citations.]” (Id. at p. 11.) “BHCorp intends to prove at trial that Shell’s equitable action, which is different than the Water Board’s action against BHCorp, arises from BHCorp’s alleged defective grading creating contamination at the Carousel Property, which may be considered a latent defect causing soil contamination.” (Ibid.)

In reply, Shell argues:

* “Barclay does not dispute that the Court may enter judgment on the pleadings to strike an affirmative defense.” (Reply, p. 1.)

* “[C]ontrary to Barclay’s assertion, granting this motion now is hardly a ‘rush to decision.’” (Ibid.) “This issue has been decided multiple times over many years of litigation.” (Ibid.)

* “Barclay’s opposition presents the same arguments on the same issues on which the Court has already ruled.” (Ibid.) “When Barclay filed its motion for summary judgment, it argued that there were no triable issues of material fact and moved the Court to rule as a matter of law.” (Ibid.) “The Court did rule as a matter of law, against Barclay — the statute of repose does not apply to Shell’s claims in this case.” (Ibid.) “Barclay is merely regurgitating (again) its same misreading of the law on the statute of repose.” (Id. at p. 2.) “This issue has been resolved and may not be “left open” for further ruling as the parties prepare for trial.” (Ibid.)

The Court agrees with Shell. The following timeline supports Shell’s position.

On 8/12/14, Barclay filed a demurrer, arguing, in part, that Shell’s claims were time-barred under Code of Civil Procedure section 337.15’s 10-year statute of repose for latent construction defects.

Judge William Highberger found section 337.15 inapplicable and overruled the demurrer.

On 3/16/17, Barclay moved for summary judgment or adjudication on the statute of repose, again arguing that Shell’s equitable and contractual indemnity claims were time-barred as a matter of law.

Judge Highberger ruled that the statute of repose does not apply to the claims being asserted by Shell as a matter of law.

Judge Highberger also certified the issue for immediate appellate review by writ under Code of Civil Procedure section 166.1.

Barclay filed a petition for writ of mandate with the Court of Appeal challenging the denial of its motion for summary judgment, which was denied.

Barclay then filed a petition for review in the California Supreme Court, which also was denied.

On 5/27/22, this Court granted Shell’s motion in limine regarding collateral estoppel. The tentative ruling, which the Court adopted, states:

In conclusion, the Court agrees with Shell. Collateral estoppel applies: “(1) after final adjudication (2) of an identical issue (3) actually litigated and necessarily decided in the first suit and (4) asserted against one who was a party in the first suit or one in privity with that party.” (DKN Holdings LLC v. Faerber (2015) 61 Cal.4^th 813, 825.) It is undisputed that Barclay “is a responsible party under” the CAO. (Notice of Motion, p. 1.) The issue of joint and several liability is identical and was finally adjudicated via the Water Board’s proceeding and the review process, including Judge Hogue’s bench trial and the Court of Appeal’s decision. As Shell argues, the CAO, Judge Hogue’s order, and the Court of Appeal’s opinion evince that joint and several liability was actually litigated and necessarily decided. (See Reply, pp. 11-12.) The fourth element is easily met. “Barclay . . . was the party to the Water Board proceedings; Barclay pursued the subsequent appeals; and Barclay is the Defendant here.” (Id. at p. 13.) Thus, the motion in limine is granted.

(5/27/22 Tentative Ruling Re: Motion in Limine, p. 4.)

On 5/31/22, the Court signed a formal order granting Shell’s motion in limine. The order states:

After full consideration of the moving, opposition, and reply papers, the arguments of counsel, and all other matters presented to the Court, the Court finds that Barclay is collaterally estopped from contesting at trial that it is a responsible party under Cleanup and Abatement Order No. R4-2011-0046 (revised April 30, 2015) (“CAO”) issued by the State of California Regional Water Quality Control Board, Los Angeles Region (“Water Board”), and is jointly and severally liable for the costs incurred to assess, monitor, and cleanup and abate the effects of petroleum hydrocarbon compounds and other contaminants of concern discharged to soil and groundwater at the former Kast Property Tank Farm facility (now referred to as the Carousel neighborhood tract) in Carson, California (the “Site”). Collateral estoppel, also known as issue preclusion, precludes Barclay from relitigating the already-decided issues of its liability for the contamination at the Site and its responsibility for costs to remediate it pursuant to the CAO, subject to allocation for costs and amounts among the joint tortfeasors.

Accordingly, the Court GRANTS Shell’s Motion in Limine re Collateral Estoppel in its entirety.

(5/31/22 Order Granting Plaintiff Shell Oil Company’s Notice of Motion and Motion in Limine, p. 1, bolding in original.)

On 6/27/22, the Court heard Barclay’s second motion for summary judgment/adjudication. The second motion was identical to the first motion. The premise was that Shell’s causes of action for contribution, equitable indemnity, and declaratory relief are time-barred under Code of Civil Procedure section 337.15. The Court ended up continuing the hearing to allow Shell to file a signed copy of Judge Highberger’s 2017 order on the first motion.

On 7/7/22, the Court denied Barclays’s second motion. The Court denied the second motion under Code of Civil Procedure section 437c(f)(2) because it was identical to the first motion, which Judge Highberger denied. The Court’s tentative ruling states:

On balance, the Court agrees with Shell. While it is true that Judge Highberger’s 2018 tentative ruling on the cross-motions for judgment on the pleadings addresses the statute of repose, the final order is different. Not only does it not address the statute of repose, it also fails to rule on Shell’s motion, which was the motion that raised the section 337.15 issue. The transcript of the 2018 hearing is especially illuminating. Judge Highberger rejected Barclay’s counsel’s request for him to rule on Shell’s motion or to allow further briefing regarding section 337.15 and, instead, found Shell’s motion moot and took it off calendar. (See Miller Decl., Ex. 67, pp. 3-9.) Barclay’s counsel specifically asked for an opportunity to file a new motion for summary judgment concerning the statute of repose, but Judge Highberger said no. (See id. at Ex. 67, pp. 7-8.) To rely on the dicta in Judge Highberger’s tentative ruling as authority to consider the merits of Barclay’s new, identical motion for summary judgment/adjudication here would elevate the tentative ruling above the final order in contravention of Judge Highberger’s apparent intention. Accordingly, the Court finds that the motion should be denied under section 437c(f)(2).

Barclay’s argument – the dismissal of Shell’s contract claims is a “changed circumstance” authorizing the new motion – is unavailing. (Reply, pp. 9-10.) The “changed circumstance” rationale comes straight from Judge Highberger’s 2018 tentative ruling, which carries no legal weight since it is materially different than the final order. To reiterate, this is an attempt by Barclay to get the Court to elevate the tentative ruling above the final order.

Even if it were appropriate to consider the merits of Barclay’s new motion, the Court would be inclined to deny it. The Court agrees with Shell’s extensive discussion of San Diego Unified School District v. City of San Diego (2009) 170 Cal.App.4^th 288 (“San Diego Unified”). Shell persuasively argues that the statute of repose does not apply to Shell’s causes of action for contribution, equitable indemnity, and declaratory relief “because they are not construction defect claims.” (Opposition, p. 12; see also id. at pp. 13-14.)

(7/7/22 Tentative Ruling Re: Continued Hearing Re: Summary Judgment/Adjudication, pp. 6-7.)

On 7/7/22, the Court additionally signed a formal order denying the second motion. It states:

Barclay’s Motion is DENIED. Based upon the record presented, Barclay has failed to demonstrate that it is entitled to summary judgment or summary adjudication. As a matter of law, the ten-year statute of repose, codified at Code of Civil Procedure section 337.15, does not apply to Plaintiff Shell Oil Company’s (“Shell”) claims for equitable indemnity, contribution, and declaratory relief set forth in Shell’s Amended Complaint. Shell’s claims arise from Barclay’s joint and several liability “to assess, monitor, cleanup and abate the effects of petroleum hydrocarbon compounds and other contaminants of concern discharged to soil and groundwater” at the Carousel neighborhood under Cleanup and Abatement Order No. R4-2011- 0046 issued by the California Regional Water Quality Control Board Los Angeles Region (“Water Board”) on April 30, 2015 (“CAO”), and they are not based on construction defects for the purposes of section 337.15.

(7/7/22 Order Denying Barclay’s Motion for Summary Judgment/Adjudication on Statute of Repose, p. 1, emphasis added.)

Clearly, the Court included the bolded language because Judge Highberger had previously ruled against Barclay as a matter of law and had not been reconsidered or reversed.

On 9/7/22, the Court denied Barclay’s motion in limine no. 9, which sought permission to pursue the statute of repose affirmative defense at trial. The Court reiterated that the statute of repose had already been resolved as a matter of law:

Barclay twice moved for summary judgment/adjudication based on the “statute of repose” affirmative defense and lost both motions. In fact, this Court’s 7/7/22 order states:

(9/7/22 Order Re: Defendant’s Motions in Limine, p. 6, bolding added.)

Given these prior rulings, the Court finds that the second affirmative defense is resolved, and the motion for judgment on the pleadings should be granted.