Gitlin v. Howard CA1/1 ( 2014 )

Filed 11/20/14 Gitlin v. Howard CA1/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION ONE
ROBERT GITLIN et al.,
Plaintiffs and Appellants, A138033
v. (Mendocino County
LEE HOWARD, Super. Ct. No. SCUKCVG1159160)
Defendant and Respondent.
ROBERT GITLIN et al.,
Plaintiffs and Appellants, A138034
v.
JACK COX et al., (Mendocino County
Defendants and Respondents. Super. Ct. No. SCUKCVG1159160)
In 2006, plaintiffs purchased an undeveloped commercial property in Ukiah.
Unable to sell the property in 2010 when a prospective buyer discovered fuel
contamination, plaintiffs sued the 2006 sellers as well as a contractor who another prior
owner had hired to remove an underground storage tank from the property in 1995–1996.
The trial court granted summary judgment to defendant sellers and contractor on several
grounds, including the ground that various statutes of limitations barred plaintiffs’ claims.
We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
In 1995, the property in question, on State Street in Ukiah, was owned by Sandra
Phillips and Maurice Cox. In 1997, Maurice sold his half-interest in the property to his
cousin, Jack Cox (Cox). In 2003, Phillips sold her half-interest to Nor-Cal Investment
1
Company, Inc. (Nor-Cal), whose sole shareholders were Cox and Cox’s wife, Raynette.
When Raynette died in 2005, her interest in Nor-Cal passed to her estate, administered by
Tom Cariveau.
In 2006, Cox and Nor-Cal sold the State Street property to plaintiffs on an “as is”
basis. Cox, a licensed real estate broker, acted as the sellers’ agent in the transaction and
disclosed his status to plaintiffs.
Before the purchase, plaintiff Robert Gitlin (who handled the purchase for all
plaintiffs) reviewed Cox’s seller disclosure form, which made mention of the removal of
an underground fuel tank. Cox attached a copy of a June 3, 1996, letter from the
California Regional Water Quality Control Board (Water Board) addressed to then-owner
Phillips (and copied to, among others, Cox and the Mendocino County Health
Department). The letter closed the Board’s investigation of fuel detected at the time the
tank was removed. The Board “confirm[ed] . . . completion of site investigation and
remedial action for the underground storage tank formerly located” at the property. It
also stated “no further action related to the underground tank release is required,”
assuming the information provided during its investigation was accurate.
In 2010, plaintiffs attempted to sell the property to the Taco Bell Group. Taco
Bell hired a company, Vertex, to test the soil and prepare a report. When Vertex reported
fuel contamination, Taco Bell cancelled the sale.
In 2011, plaintiffs filed suit against Phillips, Cox, Nor-Cal, and Cariveau
(collectively, the sellers),1 John Lazaro (plaintiffs’ real estate agent), and Lee Howard
(the contractor who removed the underground fuel tank from the property during 1995–
1996). They asserted numerous claims in their first amended complaint, including: as
against Cox and Nor-Cal, for breach, and alternatively rescission, of the 2006 sales
contract for failing to disclose the contamination and falsely claiming the property was
clean, and for fraudulent concealment of the contamination; as against Cox, Nor-Cal, and
Howard, for continuing nuisance and trespass through failure to remediate and
1
Plaintiffs later dismissed Phillips and Cariveau.
2
concealment of the contamination; as against Cox and Howard, for negligent remediation
of the contamination; and as against Cox, for negligent misrepresentation that the
property was clean and the remediation was simple, and for negligent and intentional
infliction of emotional distress.2
Howard’s Summary Judgment Motion
Howard moved for summary judgment primarily on the ground plaintiffs’ claims
against him were barred by the 10-year statute of limitations set forth in Code of Civil
Procedure section 337.15.3 Howard submitted a lengthy declaration in support of his
motion, and to a large extent, his version of events is undisputed.
Howard averred as follows: In May 1995, Phillips (then one of the owners of the
property) hired him to remove and dispose of an underground storage tank. Permits were
obtained from the Mendocino County Department of Public Health, Division of
Environmental Health (Health Department), and the City of Ukiah Fire Department.
Howard began the removal work on August 2, 1995, digging up the soil where the
tank was located while representatives from the Health Department and the Water Board
observed. He found a 350-gallon tank. The tank was empty, but Howard smelled old
gasoline nearby. Accordingly, an “Underground Storage Tank Unauthorized Release
(Leak)/Contamination Site Report” was filed. Howard, with his summary judgment
motion, submitted notes from a Health Department observer stating “[h]oles in bottom”
“venting dry ice” “vapors smell of solvent” and “no evidence of fuel directly under the
tank but . . . a gray soil with fuel smell NNE of tank.”4
2
There was no claim any of the defendants, themselves, caused the
contamination. Nor was there any claim defendants, themselves, violated any statutory
provisions governing underground storage tanks. (See, e.g., Health & Saf. Code,
§§ 25280 et seq., 25299.10 et seq.).
3
All further statutory references are to the Code of Civil Procedure unless
indicated.
4
As part of their opposition to both summary judgment motions, plaintiffs
submitted written notes Howard, himself, had made at the time. Howard recorded: “The
soil right under the tank showed minor color changes and little sign of gas detection . . . ”
but “[t]wo feet under the tank a gas smell was very strong and yellowish/red clay was
3
On the first day of digging, Howard took two soil samples in the presence of the
inspectors. A few days later, he noticed water collecting in the pit left from the tank
removal. In the presence of the Water Board observer, he “took four additional samples,
including the water which had collected in the pit.” On August 10, again before the
Water Board observer, Howard took five more samples from the pit.
Sample locations were documented and plotted on a map and submitted to the
Water Board, and all samples were delivered to a lab for testing. The lab found fuel
contaminants in the two samples taken on the first day of excavation, which came from
under the tank. The other samples were reported as being clean.
The Water Board then opened an investigation.
As the winter of 1995 approached, Howard, citing safety reasons and to avoid
“ponding” in the pit, requested permission to backfill the excavated area with clean soil.
found, and the soil had turned green/gray.” (Italics added.) Howard had further written
that he removed the green/gray “contaminated” soil.
These notes were among over 100 pages of Water Board records attached to the
declaration of plaintiffs’ attorney (they were exhibits to a deposition excerpt from a
deposition of a Water Board employee). Howard objected to the deposition excerpt as
not identified, referenced, or described in any of the various separate statements of
material fact and as irrelevant. The trial court sustained the objection. Indeed, “ ‘[f]acts
not contained in the separate statements do not exist.’ ” (Teselle v. McLoughlin (2009)
173 Cal.App.4th 156, 175 (Teselle); see also Oldcastle Precast, Inc. v. Lumbermens
Mutual Casualty Co. (2009) 170 Cal.App.4th 554, 572 [“Neither Kellam’s declaration
nor Orems testimony is referenced in the responsive separate statement. The trial court,
therefore, had discretion not to consider such evidence.”].) On appeal, plaintiffs maintain
the records “were only submitted to show the basis for [their expert] Mr. West’s
statements about” these records and opinions about Howard. While an expert may rely
on otherwise inadmissible materials to reach an opinion, such reliance does not imbue
such materials, themselves, with evidentiary significance. (See Korsak v. Atlas Hotels,
Inc. (1992) 2 Cal.App.4th 1516, 1524–1525 [an expert “ ‘may not under the guise of
[stating] reasons bring before the jury incompetent hearsay evidence’ ”].) We discuss
West’s declaration, infra.
4
He also asked to store the excavated soil in visqueen liners. The Water Board approved
these plans.5
In the spring of 1996, at the Water Board’s request, a third-party engineer tested
the excavated soil, which was still stored in the liners. Howard was not involved in this
examination, and the results showed no contamination.
“After receiving authorization to backfill the excavation with clean soil, and upon
receiving the results that the soil stockpiles no longer contained measureable
contaminants,” Howard “backfilled the hole with the stockpiled soil.”
On June 3, 1996, the Water Board issued its closure letter.
Cox and Nor-Cal’s Summary Judgment Motion
Cox and Nor-Cal also moved for summary judgment on statute of limitation
grounds. They additionally maintained there was no evidence they had withheld
information from plaintiffs or had knowledge of the contamination discovered in 2010.
Cox averred he had minimal involvement with the tank removal since he was not
an owner of the property at that time, and he had no knowledge the property was
contaminated thereafter. The only document he ever had related to the tank removal was
the Water Board’s June 3, 1996, closure letter, which he had assumed meant the property
was clean.
Cox had the closure letter when he purchased the property in 1997. He did not
believe it presented a “red flag” and did not review any Water Board records. Before he
purchased the property, he was also aware of fuel contamination on property across the
street that had been used as a Chevron station. He spoke with the engineer retained in
connection with the remediation of that property to investigate whether a plume of fuel
5
As part of their summary judgment opposition, plaintiffs also pointed to internal
notes of the Water Board indicating Howard initially advised the Board he intended to
backfill the pit with the excavated soil, as opposed to clean soil, stating “he was going to
do what he had to do” to eliminate the pit. Another note reported Howard as saying he
was not being paid to clean up the property, but to simply remove the tank. These notes
were part of the Water Board records the trial court properly excluded, but which
plaintiffs maintain were relied on by their expert, West.
5
might be extending from the site. The engineer told Cox there was no plume and that a
monitoring well had been dug on the boundary of the former gas station site and tests
showed no contamination migrating to the State Street property. Cox did not disclose
this information about the property across the street to his realtor or to plaintiffs. By the
time of the sale to plaintiffs, that property had been rebuilt and was operating as a
Travelodge.
In opposing declarations, plaintiffs averred they never would have purchased the
property if they had thought it was contaminated. Gitlin stated that while he received a
copy of the June 3, 1996, closure letter from Cox and reviewed it, it did not cause him to
believe fuel had actually been found on the property. Rather, he claimed it merely raised
“questions” that prompted him to meet with Cox—a meeting Cox denies. According to
Gitlin, Cox told him the property was “clean,” the tank removal was “simple,” and the
tank “did not leak.” Gitlin also stated the plaintiffs’ real estate agent, Lazaro, told him
the Water Board closure letter was “ ‘as good as a Phase I report,’ ” and had their agent
not said this, plaintiffs would have conducted their own soil investigation.
The West Declaration
Plaintiffs’ opposition focused on the declaration of Brian West, an expert in
“environmental assessment and remediation.” West reviewed declarations and deposition
transcripts, expert and lab reports, and Water Board records and reports. He also
conducted his own field tests at the State Street property in 2012.
West declared that he dug a “small, exploratory test pit . . . from the location
wherein . . . Howard removed an underground fuel tank” and found a noticeable smell of
fuel. He observed the soil appeared contaminated because it was discolored and his field
instruments measured 2,000 parts per million of volatile organic compounds. Subsequent
lab tests corroborated the apparent contamination. West believed his 2012 examination
focused on the spot where the tank had been removed in 1995–1996 based on the site
map Vertex had used and marked during its soil study in 2010, and because West had
located evidence of Vertex’s boring. Based on drawings he reviewed, debris in the fill
6
area, perched water, and the contamination, itself, West concluded everyone had dug in
the same spot.6
West then opined Howard must have observed the same conditions West found,
and Howard, too, should have concluded there was contamination.7 West also asserted
the contamination was so significant that had the Water Board known its extent, it would
have opened an investigation. West thus opined not only that “Howard simply covered
the contaminated soil . . . with backfilled soil,” but he did so “knowingly.”
West also stated the Water Board had been trying to secure remediation of “[t]he
neighboring property across the street” (which West never specifically identified) for
“some time.” He opined, however, in hypothetical terms, that even if testing at the
property line showed clean soil, that would not indicate, one way or another, whether
migration to the State Street property had, in fact, occurred.
The trial court ruled West’s declaration was inadmissible and, thus, did not raise
any triable issue of material fact.8
The Summary Judgment Ruling
The trial court granted Howard’s motion for summary judgment on the ground the
10-year statute of limitations set forth in Section 337.15 applied and plaintiffs had not
presented any competent evidence raising a triable issue that the “willfulness” or
“fraudulent concealment” exception to that statute applied.
6
Howard disputed this and stated Vertex dug near a structure that had once been
on the property, whereas he removed the tank from a “completely different location.”
7
West insinuates Howard failed to test the soil samples from beneath the tank to
avoid knowledge of the contamination. West provided no basis for the asserted failure to
test. Moreover, as plaintiffs ultimately conceded in their response to Howard’s statement
of undisputed material facts, the August 2 samples (from under the tank) had been tested
and had been found to be contaminated.
8
Citing to Sargon Enterprises, Inc. v. University of Southern California (2012)
55 Cal.4th 747, 770–773 (Sargon) and Kelley v. Trunk (1998) 66 Cal.App.4th 519(Kelley), the court disregarded West’s opinions for several reasons, including: West had
not attached any reports or laboratory results; he failed to provide sufficient foundational
support for his conclusory opinions; and his opinions were based on conjecture and, thus,
were speculative.
7
The court granted Cox and Nor-Cal’s motion on several grounds. It ruled the
majority of causes of action asserted against them—the first (breach of contract), fourth
(fraudulent concealment), seventh (negligence), eighth (negligent misrepresentation),
ninth (intentional infliction of emotional distress), tenth (negligent infliction of emotional
distress), and eleventh (rescission), all based on conduct of the sale—were barred by
various applicable statutes of limitation. In so ruling, the court concluded the disclosures
Cox had made, which included the Water Board’s June 3, 1996 closure letter, put
plaintiffs on inquiry notice at the time of sale. The court also ruled the “continuing”
trespass and nuisance causes of action were barred by Civil Code section 3482, given the
government-approved remediation.9
The trial court entered judgments in favor of Howard and in favor of Cox and Nor-
Cal. Plaintiffs timely appealed from both. We ordered the two appeals consolidated for
decision.10
DISCUSSION11
The Howard Summary Judgment
Plaintiffs contend the 10-year statute of limitations set forth in section 377.15 does
not bar their claims against Howard for two reasons. They first maintain Howard’s
9
“Nothing which is done or maintained under the express authority of a statute
can be deemed a nuisance.” (Civ. Code, § 3482.)
10
Howard has filed a motion to strike materials in the “Howard” appellate record
that actually pertain to the “Cox” summary judgment. We understand there were two
different summary judgments and have reviewed each separately, and accordingly deny
the motion to strike.
11
The standard of review on appeal from a summary judgment is well established.
Summary judgment may be granted when a defendant conclusively negates a necessary
element of the plaintiff’s claims or establishes an affirmative defense. (Davis v. Kiewit
Pacific Co. (2013) 220 Cal.App.4th 358, 363–364.) “Limitations issues may be resolved
on summary judgment if the facts are uncontradicted and susceptible of only a single
legitimate inference.” (San Diego Unified School Dist. v. County of San Diego (2009)
170 Cal.App.4th 288, 300 (San Diego Unified School Dist.).) We consider all admissible
evidence submitted to the trial court and view it in the light most favorable to the
opposing party. (Nativi v. Deutsche Bank National Trust Co. (2014) 223 Cal.App.4th
261, 288–289.)
8
alleged “cover up” of the contamination with backfill was not a development or
improvement of real property under the statute. (§ 337.15, sub. (a).) Second, they
maintain they raised a triable issue that Howard “willfully” covered up the
contamination, thus triggering the exception to the limitations period set forth in
subdivision (f) of the statute. (Id., subd. (f).)
“Depending on the theory of recovery, a lawsuit alleging a latent defect in the
construction of an improvement to real property must be brought within three or four
years after the plaintiff discovers the defect, or should have done so. (See Code Civ.
Proc., §§ 337, subd. (1), 338, subds. (b)–(c); Regents of University of California v.
Hartford Acc. & Indem. Co. (1978) 21 Cal.3d 624 . . . (Regents).) However, a 1971
statute established a further general rule that no action for latent construction defects may
be commenced more than 10 years after ‘substantial completion’ of the construction
project. (§ 337.15; as enacted by Stats.1971, ch. 1569, § 1, p. 3149.) This ‘absolute’ 10-
year limitations period applies regardless of when the defect was discovered. (Regents,
supra, at p. 631.)” (Lantzy v. Centex Homes (2003) 31 Cal.4th 363, 366, fns. omitted.)
Specifically, section 337.15 provides in pertinent part: “No action may be brought
to recover damages from any person . . . who develops real property or performs or
furnishes the design, specifications, surveying, planning, supervision, testing, or
observation of construction or construction of an improvement to real property more than
10 years after the substantial completion of the development or improvement for any of
the following: [¶] (1) Any latent deficiency in the design, specification, surveying,
planning, supervision, or observation of construction or construction of an improvement
to, or survey of, real property. [¶] (2) Injury to property, real or personal, arising out of
any such latent deficiency.” (§ 337.15, subds. (a)–(b).)
The statute is inapplicable, however, “to actions based on willful misconduct or
fraudulent concealment.” (§ 337.15, subd. (f).) “ ‘ “[W]illful misconduct” . . .
encompasses not only intentional wrongdoing, but negligence of such a character as to
constitute reckless disregard for the rights of others.’ ” (Acosta v. Glenfed Development
Corp. (2005) 128 Cal.App.4th 1278, 1296.)
9
Plaintiffs’ first assertion—that Howard’s backfilling of the pit that resulted from
the tank removal was not “construction” under the ten-year statute—is without merit.
That is so regardless of allegations that Howard “covered up” contaminated soil in the pit
or used backfill that was, itself, “contaminated.” (See, e.g., Chevron U.S.A. Inc. v.
Superior Court (1994) 44 Cal.App.4th 1009, 1012 (Chevron) [claim for fuel
contamination barred when faulty installation of fuel storage tank was over 10 years in
the past]; San Diego Unified School Dist., supra, 170 Cal.App.4th at p. 305 [a “landfill
amounts to an ‘improvement’ within the meaning of section 337.15”];12 Gaggero v.
County of San Diego (2004) 124 Cal.App.4th 609, 615, 618 [“in section 337.15, the term
‘improvement’ has been given a very broad interpretation” and “in filling [a landfill],
covering it and selling it, the county was engaged in making the real property suitable for
further use by others” and was thus improving it]; cf. Grange Debris Box & Wrecking
Co. v. Superior Court (1993) 16 Cal.App.4th 1349, 1354 [comparing a claim for
contamination outside of a construction project (to which section 337.15 would not
apply) with a cross-claim for negligent contamination resulting from excavation prior to
construction], disapproved on other grounds by Lantzy, supra, 31 Cal.4th at p. 367.)
12
Plaintiffs’ reliance on San Diego Unified School Dist. is misplaced. They assert
the case holds the 10-year statute “does not apply to claims involving environmental
remediation.” Not so. The case takes no issue with “[t]he observation” in Chevron,
supra, 44 Cal.App.4th at page 1018, footnote 4, “that section 337.15 does not contain a
‘pollution exception.’ ” (San Diego Unified School Dist., supra, 170 Cal.App.4th at
p. 309.) Rather, the case simply distinguished between claims brought in relation to
construction or improvement activity, and those that could only be fairly categorized as
arising from a breach of a legal duty, such as those arising from environmental statutes or
contracts. (Id. at p. 305.) In San Diego Unified School Dist., “[t]he District’s alleged
harm and causation of harm [could not] be measured from the date of completion.
Rather, the District is asserting its financial injury was proximately caused by breaches of
arrangements reached by the parties in dealing with the property, regardless of how its
condition was originally created. For this reason, we do not view the primary right
asserted by the District as a right to a landfill that was constructed within the applicable
standard of care.” (Id. at p. 309.) Here, plaintiffs challenge Howard’s removal of the
tank and filling the pit left by the removal in 1995–1996; they do not rely on ongoing
agreements or legal obligations attendant thereto, as was the case in San Diego Unified
School Dist.
10
Plaintiffs’ second assertion—that they raised a triable issue that Howard
“willfully” covered up contaminated soil, triggering the exception to the 10-year statute
set forth in section 337.15, subdivision (f)—depends on West’s declaration. As we have
recounted, the trial court ruled West’s opinions as to Howard were speculative and, thus,
did not constitute admissible evidence of willful misconduct or fraudulent concealment.
Recently, in the context of a pretrial evidentiary motion and hearing, our Supreme
Court held: “[e]xcept to the extent the trial court bases its ruling on a conclusion of law
(which we review de novo), we review its ruling excluding or admitting expert testimony
for abuse of discretion.” (Sargon, supra, 55 Cal.4th at pp. 755, 773.) Whether this is the
appropriate standard of review for evidentiary rulings made in connection with summary
judgment motions, generally based on papers alone, is a question the California Supreme
Court has explicitly not yet addressed. (Reid v. Google, Inc. (2010) 50 Cal.4th 512, 535
[“we need not decide generally whether a trial court’s rulings on evidentiary objections
based on papers alone in summary judgment proceedings are reviewed for abuse of
discretion or reviewed de novo”].) “[T]he weight of [lower court] authority,” however,
“holds that an appellate court reviews a court’s final rulings on evidentiary objections by
applying an abuse of discretion standard.” (Carnes v. Superior Court (2005)
126 Cal.App.4th 688, 694; see also Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th
243, 255 & fn. 4.) Under either standard, the trial court properly disregarded West’s
opinions.
As we have discussed, in moving for summary judgment, Howard produced
evidence showing the following: He was hired to remove the tank from the State Street
property. He obtained all required permits. He did the work during 1995–1996 with
onsite observers from the local regulatory agencies, including the Water Board. He took
numerous samples, which were tested by an independent laboratory; the later samples
were reported as being clear. The Water Board retained its own expert to assess the
excavated soil, which was also reported to be clear. The Water Board considered the
initially detected contamination to have been remediated and issued its closure letter.
11
Plaintiffs’ sole evidence in opposition was West’s declaration, wherein West
opined, “Howard knowingly covered up the contaminated soil I found.”
Plaintiffs correctly point out an expert declaration in opposition to summary
judgment must be liberally construed and need not overflow with detail. (See Garrett v.
Howmedica Osteonics Corp. (2013) 214 Cal.App.4th 173, 187–189 (Garrett).) This does
not mean, however, such an expert can make conclusory assertions without explanation
or support. “ ‘[A]n expert’s opinion rendered without a reasoned explanation of why the
underlying facts lead to the ultimate conclusion has no evidentiary value because an
expert opinion is worth no more than the reasons and facts on which it is based.’ ”
(Powell v. Kleinman (2007) 151 Cal.App.4th 112, 123, 126–127; accord, Casey v. Perini
Corp. (2012) 206 Cal.App.4th 1222, 1233 [“Notably absent is any factual support for the
proposition that the challenged jobsites contained asbestos during the relevant time
period.”]; Brown v. Ransweiler (2009) 171 Cal.App.4th 516, 531 [“Without providing
some evidentiary basis for his assertion that Baldwin ‘chose to continue to go towards the
Jeep instead of simply moving a few steps off the sidewalk,’ Clark’s opinion constitutes
mere conjecture.”]; In re Alexander L. (2007) 149 Cal.App.4th 605, 611–612 [“Lang’s
entire testimony [was] . . . he ‘kn[e]w’ that the gang had been involved in certain crimes.
No specifics were elicited as to . . . where, when, or how Lang had obtained the
information” and so the testimony “lacked an adequate foundation”].) An “ ‘expert
opinion based on speculation or conjecture is inadmissible,’ ” and “ ‘[a] court may
conclude that there is simply too great an analytical gap between the data and the opinion
proffered.’ ” (Sargon, supra, 55 Cal.4th at pp. 770–771.)
These fundamental requirements applicable to determining whether an expert’s
opinion is of evidentiary value are the same whether the opinion is offered in opposition
to or in support of a motion for summary judgment. (See, e.g., Casey, supra,
206 Cal.App.4th at pp. 1232–1236 [affirming exclusion of expert opinion plaintiff
12
submitted in opposing summary judgment as lacking proper foundation and evidentiary
value].)13
West’s declaration describes his observation of contamination at the State Street
property in late 2012. It says nothing about what was observed on the property in 1995–
1996, when Howard removed the tank and filled the resulting hole. Nevertheless, based
solely on the level of contamination he observed in 2012, West opined “[t]here is no way
that Lee Howard working . . . as he describe[d] in his deposition and as documented in
the water board records and his own records could have failed to observe and smell the
contaminated soil.” And on the basis of that opinion, West further opined “Howard
knowingly covered up the contaminated soil I found.”
West’s assertions as to Howard are wholly speculative. Even assuming West
examined the spot where the tank was removed,14 he provided absolutely no basis for
concluding the contamination he saw in 2012 was the same contamination that was
detected when the tank was removed in 1995–1996. He likewise provided no basis for
concluding the independent testing and results overseen by the regulatory agencies in
1995-96 were incorrect and, moreover, that Howard knew they were incorrect. In short,
13
Thus, plaintiffs’ assertion that the trial court erred in relying in part on Kelley,
supra, 66 Cal.App.4th 519—in which the appellate court stated “an expert opinion is
worth no more than the reasons upon which it rests” and concluded the moving party’s
expert declaration was insufficient to “establish the absence of a material fact issue for
trial” (id. at p. 524)—misses the mark. Although some later cases have viewed Kelley as
applying mainly to declarations of moving parties (e.g., Powell, supra, 151 Cal.App.4th
at p. 125 [moving, but not opposing, expert declaration must be detailed]), none of those
cases purports to relieve an opposing expert from basic evidentiary requirements, such as
avoiding assumptions, speculation, and conjecture (see Casey, supra, 206 Cal.App.4th at
p. 1233 [assumptions, speculation, and conjecture of no evidentiary value]; Hanson v.
Grode (1999) 76 Cal.App.4th 601, 607 [“ ‘[E]xpert opinions . . . are worth no more than
the reasons and factual data upon which they are based.’ ”].) Moreover, the trial court
cited Kelley in only one portion of its analysis, that portion finding fault in the lack of
underlying data (such as lab reports) on the tests West performed, an issue we need not,
and do not, reach. In discussing the key issue of speculation and conjecture, the trial
court appropriately cited to Sargon.
14
As we have recounted, Howard disputed that West was in the right locale. For
our purposes, we assume he was.
13
nothing in West’s declaration provides a reasoned basis for correlating what he observed
in 2012 with what he proclaims occurred more than a decade earlier in 1995–1996,
particularly in light of the uncontradicted evidence of what did, in fact, occur at that time,
including full observation and monitoring by the relevant regulatory agencies. In short,
all West provided was a bare assertion, 16 years on, that Howard “knowingly” filled over
contaminated soil.
As we have noted, West reviewed Water Board records, which the trial court
excluded from evidence. Plaintiffs maintain these records, even if not admitted as
evidence in their own right, provide ballast for West’s opinions. The records, as quoted
by West in his declaration, indicate Howard was concerned about the hazard posed by the
open hole, determined to get it filled, and threatened to “do what he needed to do” and to
use the excavated material. West maintained these notes reflected disdain toward the
Water Board and threatened noncompliance with the Water Board’s instructions, and thus
supported his opinion that Howard deliberately covered over contaminated soil. Even
assuming West’s reliance on these notes was proper, there remains a chiasmic gap
between any frustration Howard was expressing over the need to get the hole filled for
safety reasons, and West’s conclusion Howard knowingly filled over contaminated soil—
particularly given that the later pit samples tested clean, the excavated material tested
clean, the Water Board approved use of the excavated material, and Howard used that
material. In short, West’s conclusory assertions provided zero evidence that Howard did
not comply with Water Board directives and approvals, let alone, that he did not comply
knowing there was extant contamination.
Moreover, West’s proffered opinions about Howard were no more than
unsupported commentary on Howard’s credibility. It is well established experts may not
opine, in essence, on the credibility of a witness. (People v. Sergill (1982)
138 Cal.App.3d 34, 39 [police officers cannot offer expert testimony about the
truthfulness of a witness they interviewed]; see People v. McDowell (2012) 54 Cal.4th
395, 426–427 [noting judicial policy disfavoring even psychiatrists from testifying about
credibility].)
14
In sum, the trial court properly ruled West’s expert declaration was entirely
speculative and lacked evidentiary value, and, thus, did not raise a triable issue of fact.
For the first time on appeal, plaintiffs contend Howard failed to meet his prima
facie burden of producing evidence showing his entitlement to judgment because he did
not, in his declaration, expressly aver that he did not “willfully” cover over or
“fraudulently conceal” any contamination, and so did not affirmatively show the
inapplicability of the willfulness or fraud exception to the 10-year statute. (See Teselle,
supra, 173 Cal.App.4th at p. 175 [no summary judgment if moving party “‘has failed to
‘refute [a] tenable pleaded theor[y]’ ”].) In their opposition in the trial court, plaintiffs
simply argued West’s declaration raised a triable issue that Howard engaged in “willful
misconduct” or “fraudulent concealment.” They now maintain, however, that Howard’s
declaration, itself, fell short because it did not expressly utilize the language of the
statutory exception to deny such conduct. (Compare Acosta v. Glenfed Development
Corp. (2005) 128 Cal.App.4th 1278, 1292–1293 (Acosta) [defendant has no burden of
production on the willfulness exception to the section 337.15 statute of repose] &
Varshock v. Department of Forestry & Fire Protection (2011) 194 Cal.App.4th 635, 651
(Varshock) [generally, when “an affirmative defense contains an exception, a defendant
must also negate the exception as part of its initial burden on summary judgment if, but
only if, the complaint alleges facts triggering potential applicability of the exception”].)
We need not resolve whether the apparent differences in view between Acosta and
Varshock are of significance here.15 Even assuming plaintiffs did not waive this
challenge to Howard’s evidentiary showing, and even assuming Howard was required to
make a prima facie showing the exception in subdivision (f) to the 10-year statute did not
apply, Howard’s lengthy and detailed declaration as to what he did do—under the
supervision of and in compliance with the requirements of the regulatory agencies—is a
more than ample denial of “willful misconduct” and “fraudulent concealment.” Indeed, it
15
We note plaintiffs did not plead a fraud cause of action against Howard. (See
Varshock, supra, 194 Cal.App.4th at p. 651 [generally, a defendant’s summary judgment
showing need only meet claims made in the complaint].)
15
is apparent plaintiffs, themselves, read Howard’s declaration this way, since they argued
in the trial court that, contrary to what Howard said in his declaration, West’s declaration
raised a triable issue that Howard had “willfully” covered over contamination.16
We thus conclude the trial court properly granted Howard’s motion for summary
judgment.
The Cox and Nor-Cal Summary Judgment
Plaintiffs contend summary judgment was erroneously granted to the sellers
because there are triable issues Cox and Nor-Cal (1) failed to disclose the nature of the
contamination on the State Street property, (2) failed to disclose contamination on
“neighboring” property—both in violation of a real estate seller’s duty of disclosure
(Calemine v. Samuelson (2009) 171 Cal.App.4th 153, 161)17—and (3) failed to remediate
the contamination found during the 1995–1996 tank removal.
Disclosure of Contamination on the State Street Property
In granting summary judgment to the sellers on all of plaintiffs’ claims apart from
nuisance and trespass (i.e., breach of contract, fraud, negligence and intentional infliction
of emotional distress),18 the trial court relied on statute of limitations grounds. In so
doing, it ruled plaintiffs were on “inquiry notice” as to contamination at the time of their
purchase in 2006, triggering the limitations periods applicable to their various claims
against the sellers. That being so, the court further ruled their claims against Cox and
Nor-Cal asserted in 2011, were time-barred.
16
Thus, plaintiffs’ reliance on Teslle, supra, 173 Cal.App.4th at page 175, is
misplaced. In that case, the defendants failed to adduce any evidence to rebut three of the
plaintiffs’ four theories of elder abuse. In stark contrast, Howard’s declaration was
lengthy and detailed and canvassed the entirety of his conduct at issue.
17
Plaintiffs, we note, draw no legal significance, as regards the elements of their
causes of action, from Cox’s status as the sellers’ [his and Nor-Cal’s] agent in the 2006
transaction. We therefore impute none.
18
There is no separate tort of “negligent infliction of emotional distress”; rather,
actionable negligence may cause emotional distress damages. (Brandwein v. Butler
(2013) 218 Cal.App.4th 1485, 1520; Potter v. Firestone Tire & Rubber Co. (1993)
6 Cal.4th 965, 984.)
16
“Generally speaking, a cause of action accrues at ‘the time when the cause of
action is complete with all of its elements.’ [Citations.] An important exception to the
general rule of accrual is the ‘discovery rule,’ which postpones accrual of a cause of
action until the plaintiff discovers, or has reason to discover, the cause of action.” (Fox v.
Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 806–807 (Fox).) However, “[t]he
discovery rule only delays accrual until the plaintiff has, or should have, inquiry notice of
the cause of action. The discovery rule does not encourage dilatory tactics because
plaintiffs are charged with presumptive knowledge of an injury if they have ‘ “
‘information of circumstances to put [them] on inquiry’ ” ’ or if they have ‘ “ ‘the
opportunity to obtain knowledge from sources open to [their] investigation.’ ” ’
[Citations.]” (Id. at pp. 807–808, fns. and italics omitted.)
Accordingly, suspicion is enough to trigger inquiry notice. “ ‘If a person becomes
aware of facts which would make a reasonably prudent person suspicious, he or she has a
duty to investigate further and is charged with knowledge of matters which would have
been revealed by such an investigation.’ ” (Wilshire Westwood Associates v. Atlantic
Richfield Co. (1993) 20 Cal.App.4th 732, 740; accord, Fox, supra, 35 Cal.4th at p. 807 [a
“plaintiff has reason to discover a cause of action when he or she ‘has reason at least to
suspect a factual basis for its elements,’ ” quoting Norgart v. Upjohn Co. (1999)
21 Cal.4th 383, 398]; see also Camsi IV v. Hunter Technology Corp. (1991)
230 Cal.App.3d 1525, 1537–1541 [claims against prior property owners time barred; fact
regional water board in an earlier notice “so much as mentioned ‘the presence of
unspecified amounts’ ” of a contaminate on the property precluded “any possible
assertion [the current owner] would have been unable, by reasonable diligence, to have
discovered the necessary facts at that time”].)
This is so even when a defendant has been evasive or untruthful concerning the
very conduct that would arouse suspicion. (Mangini v. Aerojet-General Corp. (1991)
230 Cal.App.3d 1125, 1153 (Mangini) [because the plaintiffs had notice of potential
hazardous waste on property previously leased to the defendant, their negligence and
strict liability claims were time barred; even though the “defendant gave evasive, or even
17
untruthful, reasons for [their later] inspection [of the contaminated property, that] did not
relieve plaintiffs of their duty of inquiry once they had sufficient facts to suspect the
cause of action,” “[i]ndeed, the evasiveness gave further reason for suspicion”]; see also
Kennedy v. Josephthal & Co., Inc. (1st Cir. 1987) 814 F.2d 798, 803 [“For each oral
representation that Sinclair made and upon which appellants claim they relied, there was
a direct refutation by the plain language of the offering memorandum,” so appellants
were on inquiry notice of securities fraud.].) “ ‘[F]raudulent concealment [for tolling the
statute of limitations] does not come into play, whatever the lengths to which a defendant
has gone to conceal the wrongs, if a plaintiff is on notice of a potential claim.’ ” (Rita M.
v. Roman Catholic Archbishop (1986) 187 Cal.App.3d 1453, 1460.) “[W]henever a
fraudulent representation of fact is made, the party receiving it is generally entitled to rely
and act on it and is not bound to verify it by an independent investigation. But this well
established rule . . . applies only to the question of whether actionable fraud was initially
committed. On the limitations issue, the court, in [Seeger v. Odell (1941) 18 Cal.2d 409],
required a showing that the plaintiffs were not negligent in failing to make the discovery
sooner.” (National Auto. & Casualty Ins. Co. v. Payne (1968) 261 Cal.App.2d 403, 413;
see also Seeger v. Odell, supra, 18 Cal.2d at pp. 414–415, 418 [treating justifiable
reliance for purposes of proving fraud claim and running of limitations period as separate
issues].)
Plaintiffs do not dispute that prior to the sale, Cox provided them with a copy of
the Water Board’s June 3, 1996, closure letter. They claim, however, the letter was
“cryptic” and insufficient to put them on “inquiry notice” that Cox’s alleged oral
statements might be false. We disagree.
The Water Board’s closure letter unambiguously provided notice of an
unauthorized “release” from an underground storage tank, removal of the tank, and
“remediation” related to the tank. It was not a mere invitation to broadly investigate
potential defects, but, rather, was a highly specific notice by a public agency as to the
tank removal, detected contamination, and remediation work. (Compare Manderville v.
PCG & S Group, Inc. (2007) 146 Cal.App.4th 1486, 1489 [“exculpatory clauses”—
18
conferring a right to investigate property—“in standardized forms used in the purchase
and sale of real estate [do not] bar a claim for intentional misrepresentation brought by
buyers of real property against the sellers’ brokers” as a matter of law; reliance on
broker’s statements might be justified] and Stevenson v. Baum (1998) 65 Cal.App.4th
159, 166 [“By warning the Stevensons in the purchase contract that they took title subject
to easements of record, Baum put them on notice of the above material facts . . . .”].) The
letter also was not “buried” in hard-to-reach agency files such that it would not
reasonably have been found; rather, it was a well-disseminated public document that was
also specifically provided to plaintiffs. (See Michelson v. Camp (1999) 72 Cal.App.4th
955, 969–970 [knowledge imputed to plaintiff of record not buried and in hands of
party].)
Plaintiffs’ position reduces to the assertion they could disregard what clearly was
conveyed by the Water Board’s closure letter because Cox allegedly told Gitlin the tank
“did not leak,” its removal was “simple,” and the property was “clean.” Even assuming
Cox made these statements some 10 years after the closure letter was issued, the
statements did not vitiate the contents of the Water Board’s letter written at the time of
the removal and remediation. At the very least, the Water Board’s closure letter should
have raised suspicion as to Cox’s alleged statements. (See Doe v. Roman Catholic
Bishop of Sacramento (2010) 189 Cal.App.4th 1423, 1433 (Doe); see also Mangini,
supra, 230 Cal.App.3d at p. 1153.)
In Doe, the Diocese allegedly misrepresented that two former priests were not
child molesters even though they reportedly had fled the country, one in 1989 after
pleading guilty to a child molestation charge and the other in 1991 upon an accusation of
child molestation. (Doe, supra, 189 Cal.App.4th at pp. 1433–1434.) “[N]either the
Diocese’s alleged misrepresentations nor Doe’s actual ignorance of the molestations
relieved Doe of the duty to investigate. Misrepresentations are a part of every fraud
cause of action; nonetheless, the duty to investigate arises if the circumstances indicate
that the defendant’s representations may have been false.” (Id. at p. 1433.) Thus,
“ ‘ “where a party defrauded has received information of facts which should put him
19
upon inquiry, and the inquiry if made would disclose the fraud, he will be charged with a
discovery as of the time the inquiry would have given him knowledge.” ’ ” (Ibid.)
Accordingly, the victim’s mother’s claim against the Diocese for affirmative, intentional
fraud was barred as a matter of law by the statute of limitations and could not survive a
demurrer. (Ibid.)
The fact Cox, himself, bought the property knowing about the Water Board’s
closure letter, but without doing further due diligence, does not alter the analysis. Indeed,
it could be said Cox’s own purchase simply evidenced his belief of what he supposedly
said 10 years later—that the tank “did not leak,” its removal was “simple,” and the
property was “clean.” But, again, what Cox’s own purchase might have implied as to
what he believed, does not vitiate what the Water Board expressly said in its official
closure letter or change the fact the closure letter put plaintiffs on notice to inquire
further.
In sum, the trial court did not err in concluding plaintiffs were on “inquiry notice”
at the time they purchased the property in 2006 and, thus, the statutes of limitations
applicable to their claims against Cox and Nor-Cal had run by the time they filed suit in
2011. (§§ 337 [four years for breach of contract]; 338, subd. (d) [three years for fraud];
William L. Lyon & Associates, Inc. v. Superior Court (2012) 204 Cal.App.4th 1294,
1313–1314 [two or three years for negligence or negligent misrepresentation]; Unruh-
Haxton v. Regents of University of California (2008) 162 Cal.App.4th 343, 357 [two
years for infliction of emotional distress].)
Failure to Disclose Contamination on Nearby Property
Cox was also aware that property across the street from the State Street property
had once been used as a Chevron service station, and that contamination had been
detected and remediation efforts had been undertaken as to that property. He averred an
engineer working on that remediation effort told him no contaminate plume extended
from the property and there was no evidence of contamination in a monitoring well
situated at the boundary of the property. Knowing this, Cox nevertheless purchased the
State Street property. While Cox owned the property, the former gas station site was
20
redeveloped as a Travelodge, and it remained in use as such at the time plaintiffs bought
the property.
To the extent plaintiffs’ various claims are based on Cox’s failure to disclose any
contamination on the former gas station property, they do not suffer from the same statute
of limitations problems as their other claims since the Water Board’s closure letter did
not pertain to that property. Nevertheless, summary judgment was proper because there
is no evidence raising a triable issue that Cox had a duty to disclose what he knew about
the property across the street that at one time had been a Chevron station but had been
cleared and rebuilt as a Travelodge.
Plaintiffs have cited no case holding the mere fact contamination has at one time
been detected on nearby property is a material fact a property owner must disclose to a
prospective purchaser. Rather, the “seller of real property has a duty to disclose: ‘where
the seller knows of facts materially affecting the value or desirability of the property [to
be sold] which are known or accessible only to him and also knows that such facts are not
known to, or within the reach of the diligent attention and observation of the buyer.’ ”
(Reed v. King (1983) 145 Cal.App.3d 261, 265.)
There is no evidence the contamination on the former gas station property, which
Cox learned about before he purchased the State Street property in 1997, materially
affected the value of the State Street property either then, or in 2006 when plaintiffs
bought it.
West’s opinions in this regard are, again, speculative. He asserted the Water
Board had for “some time” been trying to secure remediation of an unidentified
“neighboring” property. Putting aside that the reference to “neighboring” property is an
unacceptably vague reference to the former Chevron gas station property that was across
the street from the property in question, West’s assertion says nothing about the extent of
the contamination on the “neighboring” property or the outcome of the remediation, let
alone, anything about the effect on the value of the State Street property. Plaintiffs
cannot conjure up a triable issue from this, particularly since Cox, himself, bought the
21
property knowing about the former gas station property across the street, and by the time
plaintiffs bought it, the property had been rebuilt and was being operated as a Travelodge.
West also opined, in hypothetical terms, that even if testing at the property line of
the “neighboring” property showed clean soil, that would not tell, one way or another,
whether any contamination migrated across the street to the State Street property. Even if
this were correct, there is no evidence Cox knew any such thing. Rather, Cox’s
declaration that he was told by the engineer who helped in the remediation of the former
gas station property that the monitoring well showed no migration had occurred, was
uncontroverted. Furthermore, West’s opinion, again, says nothing about the extent of
contamination on the “neighboring” property, the outcome of the remediation work, or
the affect on the value of the State Street property in 2006.
Gitlin, in turn, averred he would not have bought the State Street property had he
known of the contamination on the former gas station property. Again, this bare assertion
says nothing about the extent of the contamination on that property or the affect on the
value of the State Street property.
In addition, there is no evidence the use history of the property across the street
(a) was “known or accessible only to” Cox and (b) he knew that history was not “within
the reach of the diligent attention and observation of the buyer.”
In sum, there is no evidence raising a triable issue that Cox was aware of, and
failed to disclose, information about contamination and remediation work on the site of
the former Chevron station across the street that materially affected the value of the State
Street property—let alone materially affected its value at the time plaintiffs purchased it,
by which time the property across the street had been rebuilt and was being operated as a
Travelodge.
Failure to Remediate Contamination Found in 1995–1996 Tank Removal
Plaintiffs’ remaining claims against Cox and Nor-Cal were for “continuing”
nuisance and trespass. In light of the regulatory oversight of the tank removal and soil
replacement, the trial court concluded these claims were precluded by Civil Code
section 3482, which provides: “Nothing which is done or maintained under the express
22
authority of a statute can be deemed a nuisance.” (Civ. Code, § 3482.) There is,
however, a more fundamental problem with plaintiffs’ continuing nuisance and trespass
claims, and we therefore do not reach the issue of whether section 3482 applies.
Although nuisance liability attaches to “[e]very successive owner of property who
neglects to abate a continuing nuisance” (Civ. Code, § 3483), an owner only “neglects” a
nuisance with knowledge. (See Reinhard v. Lawrence Warehouse Co. (1940)
41 Cal.App.2d 741, 747 [“The words ‘neglect’ and ‘omit’ are not synonymous. The
former imports intent and intent presupposes knowledge.”]; 8 Miller & Starr, Cal. Real
Est. § 23:68, fn. 8 (3d ed., 2013 update) [under Reinhard, “a successor landowner is not
liable for his predecessor’s nuisance except to the extent he had notice or knowledge of
the nuisance before acquiring title to the property”]; cf. Mangini, supra, 230 Cal.App.3d
at pp. 1131–1132 [former owner who created nuisance may be liable].)
Further, some modicum of active participation is required for both a nuisance and
a trespass claim. (Resolution Trust Corp. v. Rossmoor Corp. (1995) 34 Cal.App.4th 93,
100 [rejecting trespass, and also nuisance, liability for previous owner of property who
did not contribute to a then tenant’s fuel tank leak, noting “absence of cases finding
landowners liable for trespass without their active participation”].)
There is simply no evidence Cox or Nor-Cal had knowledge of any contamination
on the property following issuance of the Water Board’s June 3, 1996, closure letter.
Thus, there is no evidence either “neglected” to abate a continuing nuisance. There,
likewise, is no evidence Cox or Nor-Cal did anything that created or perpetuated the
contamination detected in 1995–1996 when the tank was removed (and before they even
owned the property), let alone the contamination detected in 2010 and 2012. Thus, there
is also no evidence either engaged in the modicum of active participation required to
impose liability for continuing nuisance or trespass.
DISPOSITION
The judgments are affirmed. Costs on appeal to respondents.
23
_________________________
Banke, J.
We concur:
_________________________
Margulies, Acting P. J.
_________________________
Dondero, J.
24