Addington v. PG&E Corporation

• Court: United States Bankruptcy Court, N.D. California
• Decided: July 24, 2023
• Docket: 23-03005
• Status: Unknown

Opinion

EDWARD J. EMMONS, CLERK (9 □ □□ □□□ ONG U.S. BANKRUPTCY COURT □□ NORTHERN DISTRICT OF CALIFORNIA alt ay □□□ 1 . □ □□□□□ □□ Signed and Filed: July 24, 2023 □□ 2 Mini hi 4 Vin fod 5 DENNIS MONTALI U.S. Bankruptcy Judge 6 7 UNITED STATES BANKRUPTCY COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 In re: ) Bankruptcy Case 10 ) No. 19-30088-DM PG&E CORPORATION, ) 11 ) Chapter 11 1 2 7 and 7 ) ) Jointly Administered 13 |}PACIFIC GAS AND ELECTRIC COMPANY, } ) 14 Reorganized Debtors. ) 15 L] Affects PG&E Corporation ) 16 affects Pacific Gas and ) 17 Electric Company ) Affects both Debtors 18 * All papers shall be filed in 19 |lthe Lead Case, No. 19-30088 (DM) . \ 20 ) 21 ) DAVID P. ADDINGTON, ) Adversary Proceeding 22 ) No. 23-03005-DM Plaintiff, ) 23 ) Date: June 7, 2023 Vv. ) Time: 11:00 AM 24 ) Via Video/Teleconference 25 PG&E CORPORATION and PACIFIC GAS ) www.canb.uscourts.gov/calendars AND ELECTRIC COMPANY, ) 26 ) MEMORANDUM DECISION GRANTING Defendants. ) MOTION FOR SUMMARY JUDGMENT 27 ) 28 ) =- 1 =-

1 I. Introduction 2 PG&E Corporation and Pacific Gas and Electric Company’s 3 (together, “PG&E”) Motion for Summary Judgment (“MSJ”) (Dkt. 14) 4 came on for hearing at the above-captioned date and time. For 5 the reasons set forth below, the court will GRANT the MSJ. To 6 the extent that Plaintiff David P. Addington’s (“Addington”) Motion for Quiet Title, Declaratory Relief, and to Amend Claim 7 8 No. 108715 (“Motion to Amend”) (Main Case Dkt. 13481) is not 9 subsumed by the Complaint (Dkt. 1) of this adversary proceeding, 10 the court will DENY the Motion to Amend. The court will further 11 DISALLOW Addington’s Proof of Claim No. 108715 (“Amended 12 Claim”). 13 II. Procedural Background 14 The issues between PG&E and Addington relate to two 15 electric transmission towers (“Towers”) located in the backyard 16 of Addington’s residence located in Piedmont, CA (“Property”). 17 The Towers had been built and maintained by PG&E’s predecessor, 18 Great Western Power Company. The Towers were built pursuant to 19 an easement recorded in 1908. That easement conveyed a dominant 20 estate over the Property from The Realty Syndicate to Great 21 Western Power Company for the purpose of erecting and 22 maintaining the Towers and necessary wires for the distribution 23 and transmission of electricity. Addington purchased the 24 Property in 2015, with the Towers on the Property subject to the 25 easement. 26 In 2016, PG&E determined it was necessary to remove soil 27 from the Property as part of maintenance work on the Towers. 28 After negotiation, Addington and PG&E entered into a Revised 1 Work Acknowledgement in September 2016, which described the work 2 to be performed by PG&E as well as provided a payment to 3 Addington of $36,790 for Addington to complete his own 4 landscaping after PG&E’s work was completed. 5 A dispute arose regarding the work performed by PG&E. In 6 November 2016, the parties entered into an Addendum (“Release”), 7 in which PG&E agreed to pay Addington an additional $13,000, in 8 exchange for Addington’s agreement that PG&E had performed all 9 work described in the Revised Work Acknowledgment. 10 The relationship between Addington and PG&E apparently 11 continued to deteriorate, and in June 2017, Addington 12 unilaterally recorded a Notice of Termination of the easement. 13 Addington then began “charging” PG&E for transmitting 14 electricity via the Towers on the Property without an easement. 15 PG&E filed bankruptcy in January 20191. Addington filed 16 Proof of Claim #3093 (“First POC”) on May 23, 2019, seeking 17 compensation in excess of $3.5 million. This demand for 18 compensation was based on a “High Voltage Utility-Specific 19 Access Charge” and the amount owed was for Addington’s estimated 20 “transmission charge for substation.” PG&E objected to the 21 First POC. 22 Throughout the course of the claim objection process, 23 Addington maintained that after he terminated the easement, PG&E 24 owed him for continuing to transmit electricity over the 25 26 1 PG&E’s Plan of Reorganization was confirmed on June 20, 2020 (Main Case, Dkt. 8053) and became effective on July 1, 2020 27 (Main Case, Dkt 8252). The provisions of 11 U.S.C. § 1141 apply to any subsequent acts such as Addington’s second Notice of 28 Easement Termination (“Second Notice)” 1 Property via the Towers and connecting lines without his 2 permission. 3 On May 16, 2022, the court entered the Order Sustaining Debtors’ Objection and Granting David Addington Leave to Amend 4 5 Proof of Claim #3093 (Main Case, Dkt. 12392), which (1) 6 determined that Addington’s unilateral attempt to terminate the 7 easement was ineffective; (2) disallowed the Proof of Claim; and 8 (3) set a deadline of July 11, 2022 for Addington to amend the 9 Proof of Claim to state a claim for pre-petition damages 10 stemming from events that occurred after the date of payment 11 following the signed Release. 12 On July 5, 2022, Addington filed the Amended Claim, which 13 seeks nearly $1 million for alleged damage to the Property, 14 almost all of which still appears to stem from work covered by 15 the Release, plus emotional distress damages caused by PG&E’s 16 “actions, threats, and unreasonable behaviors.” It appears the 17 actions Addington claims caused emotional distress occurred both 18 pre- and post-petition. PG&E filed an objection to the Amended 19 Claim (Main Case, Dkt. 12948) (“Objection”). At a status 20 conference on the Objection, Addington stated his intention to 21 amend his Proof of Claim for a second time. The court warned 22 Addington he would need to seek agreement from PG&E or leave 23 from the court to do so. 24 After much negotiation between the parties, on January 21, 25 2023, Addington filed the Motion to Amend. The Motion to Amend 26 sought quiet title to the Towers; declaratory relief; damages 27 related to the Release; and emotional distress damages; and 28 further discovery from PG&E. 1 PG&E filed a Response (Main Case, Dkt. 13513). The court 2 entered an Amended Order (Main Case, Dkt. 13517) that allowed 3 the Motion to Amend to proceed in the main bankruptcy case 4 instead of requiring Addington to file a separate adversary 5 proceeding. 6 Despite the Amended Order, Addington initiated this 7 adversary proceeding on February 20, 2023. The relief sought in 8 Addington’s Complaint (Dkt. 1) largely overlaps with the relief 9 sought in the Motion to Amend. The Complaint seeks: (1) quiet 10 title to the Towers; (2) a declaratory judgment confirming that 11 Addington owns the Towers; (3) court instruction on how to 12 properly establish a cause of action of interference by PG&E; 13 and (4) court instruction on how to properly extinguish the 14 easement. Unlike the Motion to Amend, the Complaint does not 15 seek to amend the Amended Claim and does not seek damages for 16 emotional distress. 17 On March 14, 2023, without notice to PG&E or to the court, 18 Addington recorded the Second Notice, which again declared 19 unilaterally that Addington had terminated the easement in June 20 2017. This conduct was plainly in violation of PG&E’s 21 discharge. 22 On March, 22, 2023, PG&E filed the MSJ, which seeks 23 judgment in its favor as to the entirety of the Complaint (or 24 rather, dismissal of the Complaint with prejudice); disallowance 25 of the Amended Claim, a quash of the Amended Claim’s discovery 26 requests; and a direction to Addington to rescind the Second 27 Notice. The court held a hearing on June 7, 2023 and took the 28 matter under submission thereafter. 1 III. Standard for Summary Judgment 2 On a motion for summary judgment, the court must determine 3 whether, viewing the evidence in the light most favorable to the 4 nonmoving party, there are any genuine issues of material fact 5 as to any claim, part of claim, defense, or part of defense. 6 Simo v. Union of Needletrades, Indus. & Textile Employees, 322 7 F.3d 602, 609-10 (9th Cir. 2003); Fed. R. Civ. P. 56. Summary 8 judgment against a party is appropriate when the pleadings, 9 depositions, answers to interrogatories, and admissions on file, 10 together with the affidavits, if any, show that there is no 11 genuine issue as to any material fact and that the moving party 12 is entitled to judgment as a matter of law. Fed. R. Civ. P. 56, 13 incorporated by Fed. R. Bankr. P. 7056. 14 IV. Discussion 15 A. Addington Does not Own the Towers 16 Addington argues that once the Towers were affixed to the 17 Property, they became part of the Property itself as opposed to 18 separate personal property. This merging of Tower to Property 19 means the dominant and servient tenements became one, and the 20 recorded easement has long since been destroyed by law. 21 Addington’s Complaint cites no law to support his argument, 22 and the argument is inherently flawed. According to Addington’s 23 theory, the easement granted PG&E’s predecessor the right to 24 construct the Towers for the benefit of Addington’s predecessor, 25 who immediately became the owner of the Towers and could have 26 then restricted access to the Towers pursuant to that ownership 27 interest. 28 1 At the hearing, Addington presented a recitation of 2 commercial landlord-tenant law of New Mexico to support his 3 ownership theory, by which fixtures affixed to real property by 4 tenants become part of the landlord’s fee interest. 5 Addington believes that the law governing rights between 6 commercial landlords and tenants and California utility 7 easements are “exactly parallel” (Hr. Transcript, Dkt. 25, p. 8 15). This belief is incorrect. 9 In contrast, PG&E does present law that demonstrates that 10 its easement, like all easements, is real property separate from 11 the fee itself. See Cal. Civ. Code § 801 et seq. (law of 12 easements as part of California law regulating estates in real 13 property). The extent of any easement “is determined by the 14 grant, or the nature of the enjoyment by which it was acquired.” 15 Cal. Civ. Code § 806. In this case, the recorded grant of 16 easement was specifically for the erection and maintenance of 17 the Towers and transmission lines. Addington knowingly 18 purchased the Property subject to that easement. 19 Addington’s argument that the grant of easement was 20 destroyed at the exact moment the purpose of the easement was 21 effectuated (via the building of the Towers) fails as a matter 22 of law (Main Case, Dkt. 12392). The court holds that the 23 easement was not destroyed when the Towers were constructed, and 24 that PG&E is and has been at all relevant times the dominant 25 tenement holder on Addington’s subservient estate pursuant to 26 that easement. Consequently, PG&E is entitled to judgment as a 27 matter of law on Addington’s requests for quiet title and 28 1 declaratory judgment based on his theory of ownership of the 2 Towers. 3 B. Addington Is Not Entitled To Declaratory Relief 4 The Complaint additionally requests that the court issue a 5 variety of what Addington calls declaratory judgments: 6 1. A written description from the court detailing the 7 process of obtaining approvals from PG&E to do work 8 near, on, or around the Property; 9 2. A written determination of the practice and 10 procedure required to establish interference by 11 PG&E of Addington’s land rights; 12 3. A written determination of the requirements and 13 form by which Addington may properly extinguish the 14 easement. 15 A party to a written instrument over or upon property may 16 request from the court “a declaration of his or her rights and 17 duties in the premises . . .” Cal. Civ. Code § 1060. “A 18 complaint for declaratory relief is legally sufficient if it 19 sets forth facts showing the existence of an actual controversy 20 relating to the legal rights and duties of the respective 21 parties under a written instrument and requests that these 22 rights and duties be adjudged by a court.” Leonard Carder, LLP 23 v. Patten, Faith, & Sandford, 189 Cal.App.4th 92, 97 (Cal. Ct. 24 App. 2019) (quoting Maguire v. Hibernia Savings & Loan Soc., 23 25 Cal.2d 719, 728 (1944)). “Once an ‘actual controversy’ exists, 26 it is within the trial court’s discretion to grant or deny 27 declaratory relief, and a reviewing court will not disturb that 28 exercise of discretion absent abuse.” Leonard Carder, 189 1 Cal.App.4th at 97 (citing Orloff v. Metro. Trust Co., 17 Cal.2d 2 484, 489 (1941)). 3 Here, the court cannot find an “actual controversy” exists 4 to merit any declaratory relief. There is no denial that 5 Addington does not like that PG&E holds an easement over the 6 Property and has taken issue with the way PG&E has maintained 7 its Towers. However, beyond Addington’s general dissatisfaction 8 with the work performed by PG&E that is subject to the Release, 9 Addington presents no controversy under the easement that merits 10 a determination of rights. 11 Further, Addington does not appear to truly seek 12 declaratory relief regarding rights under the easement, but 13 rather procedural clarity on how he could establish interference 14 by PG&E in the future, and the steps he should take to 15 effectively extinguish the easement. Such pronouncements veer 16 away from declaratory relief into the realm of legal advice, 17 which the court cannot dispense. 18 Accordingly, the court cannot issue any declaratory relief 19 requested by Addington. PG&E is entitled to judgment as a 20 matter of law regarding the requests for declaratory judgment. 21 C. The Motion to Amend is Denied and the Amended Claim is 22 Disallowed 23 As noted above, while the Complaint and Motion to Amend are 24 nearly identical in relief sought, the Motion to Amend seeks 25 damages not sought in the Complaint. To avoid inefficiency in 26 determining the MSJ and then dealing with the remainder of the 27 Motion to Amend, the court addresses the additional damages 28 claimed in the Motion to Amend now. 1 The basis for damages in the Motion to Amend stem from (1) 2 work directly related to the Release, and (2) emotional distress 3 damages. The court has made clear damages for work related to 4 the Release are unavailable. Emotional distress damages based 5 on the state of his Property after work performed pursuant to 6 the Release are also unavailable. 7 Any emotional distress damages Addington alleges due to the 8 embarrassment at the state of his Property that are unrelated to 9 the Release are also unavailable. See, e.g., Erlich v. Menezes, 10 981 P.2d 978, 984 (Cal. 1999) (quoting Cooper v. Superior Court, 11 153 Cal.App. 3d 1008, 1012 (1984)) (“No California case has 12 allowed recovery for emotional distress arising solely out of 13 property damage”). 14 To the extent a separate claim for intentional infliction 15 of emotional distress is based on altercations with PG&E 16 employees, Addington has not sufficiently plead the facts 17 establishing the elements of such a claim. See Potter v. 18 Firestone Tire & Rubber Co., 863 P.2d 795, 819 (Cal. 1993) 19 (establishing the elements of intentional infliction of 20 emotional distress). 21 To the extent Addington alleges personal injury or family 22 disruption due to emotional distress, he has not given any 23 specifics, even with ample opportunity to do so. 24 To the extent Addington has claimed damages for actions 25 taken by PG&E post-petition, the court has no authority to allow 26 such damages into the bankruptcy claim process. To the extent 27 Addington has taken actions without leave of this court or PG&E, 28 such as filing the Second Notice, in violation of the discharge 1 injunction, the action was void. Addington should rescind that 2 Second Notice without delay to avoid any enforcement of this 3 direction by PG&E. 4 V. Conclusion 5 For the forgoing reasons, the court HEREBY GRANTS the MSJ, 6 DENIES the Motion to Amend, and DISALLOWS the Amended Claim. 7 Counsel for PG&E should serve and upload orders in the Main Case 8 and this adversary proceeding consistent with this Memorandum 9 Decision. 10 **END OF MEMORANDUM DECISION** 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 COURT SERVICE LIST 2 David P. Addington 3 298 Saint James Drive Piedmont, CA 94611 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28