Angeles Chemical Co. v. Spencer & Jones

44 Cal. App. 4th 112, 51 Cal. Rptr. 2d 594, 96 D.A.R. 3805, 96 Daily Journal DAR 3805, 96 Cal. Daily Op. Serv. 2278, 1996 Cal. App. LEXIS 296
CourtCalifornia Court of Appeal
DecidedApril 2, 1996
DocketB088796
StatusPublished
Cited by30 cases

This text of 44 Cal. App. 4th 112 (Angeles Chemical Co. v. Spencer & Jones) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Angeles Chemical Co. v. Spencer & Jones, 44 Cal. App. 4th 112, 51 Cal. Rptr. 2d 594, 96 D.A.R. 3805, 96 Daily Journal DAR 3805, 96 Cal. Daily Op. Serv. 2278, 1996 Cal. App. LEXIS 296 (Cal. Ct. App. 1996).

Opinion

Opinion

MASTERSON, J.

In general, claims for negligence and breach of contract involving damage to real property must be brought within three years and four years, respectively, of the date when the plaintiff discovers, or should have discovered, the injury and its cause. However, if the damage is caused by a latent defect in the construction of an improvement to the property, the claim cannot be brought any later than 10 years after the construction is substantially completed, regardless of when the plaintiff discovers the injury. Put another way, actions based on a latent construction defect must be filed, at a minimum, within three or four years of discovery of the injury and its cause (depending on the cause of action), but in no event can they be brought more than ten years after substantial completion of the construction.

Under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) (42 U.S.C. § 9601 et seq.), the statute of limitations on a state law claim for damage caused by a hazardous substance cannot begin to run until the plaintiff discovers, or should have discovered, the injury and its cause. In other words, CERCLA controls the commencement of the statute of limitations on such a claim.

The principal question on this appeal is whether the “discovery rule” mandated by CERCLA preempts California’s 10-year limitations period, where the claims are based on a latent construction defect that results in the toxic contamination of the plaintiff’s property. We conclude that it does.

Background

Plaintiff Angeles Chemical Company, Inc. (ACC), is a bulk chemical repackaging company. It purchases bulk chemicals from oil and chemical companies, stores them, and then repackages them into smaller containers for resale to customers. ACC was founded in Los Angeles, California, in 1971, but moved to its current location in Santa Fe Springs, California, in 1976.

*118 In August 1975, ACC hired defendant Spencer & Jones (S&J) to build its new plant in Santa Fe Springs, S&J is a general construction company specializing in commercial industrial construction, specifically petrochemical piping systems. The company’s primary work is in the area of tank and pump installations.

In constructing ACC’s new facility, S&J installed a series of underground storage tanks and appurtenant piping systems. It sloped and paved the surface of the plant, so that any chemical spills would flow into a system of drains and catch basins, all of which were connected to an underground waste tank. At trial, ACC produced evidence that S&J also installed a pump and piping on a concrete truck ramp in order to carry liquids to a catch basin. The construction was completed in December 1975. 1

In September 1981, ACC retained S&J to modify the plant in several respects, and the parties executed a written agreement describing the material terms of the modification. Pursuant to the agreement, S&J removed the concrete truck ramp, excavated that area, and installed two more underground storage tanks and appurtenant piping. The entire area was then covered with a concrete slab. Construction was completed no later than January 1982.

In 1985, the Los Angeles County Department of Public Works directed ACC to test the subsurface soils at its facility for possible contamination. ACC retained an environmental consulting firm, SCS Engineers, to conduct the investigation. In 1986, SCS Engineers discovered contaminants at the site. On April 5, 1990, ACC first learned that the contamination was caused, at least in part, by the severing of a pipe previously used to carry liquids from the truck ramp to a catch basin.

In February 1993, the California Department of Toxic Substances Control issued an “imminent and substantial endangerment” order against ACC. The order set forth a formal protocol for addressing contamination at the site, including a remedial investigation, feasibility study, and remedial action plan. SCS Engineers estimated the cost of cleaning up the ACC property (excluding off-site damage) to be over $1 million.

On March 13, 1993, ACC filed this action, alleging that S&J caused the contamination of the property by severing a pipe near the truck ramp while *119 performing the 1981 construction work. The verified complaint contained causes of action for breach of contract, negligence, strict liability, and declaratory relief. The trial court granted S&J’s motion for judgment on the pleadings as to the strict liability claim and denied ACC’s request for declaratory relief. The remaining claims, for breach of contract and negligence, were tried to a jury in the summer of 1994. The jury returned a verdict in favor of ACC on both claims. Judgment was entered accordingly on September 1, 1994. S&J filed a timely appeal.

Discussion

S&J contends that it is entitled to judgment as a matter of law because ACC’s claims for breach of contract and negligence are barred by the statutes of limitations. Alternatively, S&J seeks a new trial based on alleged procedural irregularities that occurred during the trial. Finally, S&J argues that the trial court improperly clarified the jury’s verdict as to the amount of damages awarded. We reject these contentions and affirm.

A. Statute of Limitations

S&J argues that ACC’s claims are barred by the applicable California statutes of limitations. ACC contends that, while untimely under state law, its claims are saved by CERCLA. We agree that the federal act renders the claims timely filed. 2

1. California Law

Under California law, a contract claim based on a written agreement is governed by a four-year statute of limitations (Code Civ. Proc., § 337, subd. I). 3 The claim accrues when the plaintiff discovers, or could have discovered through reasonable diligence, the injury and its cause. (April Enterprises, Inc. v. KTTV (1983) 147 Cal.App.3d 805, 826-833 [195 Cal.Rptr. 421].) A negligence claim involving damage to real property is governed by a three-year limitations period (§ 338, subd. (b)), which commences to run when the plaintiff knows, or should have known, of the wrongful conduct at issue (CAMSI IV v. Hunter Technology Corp. (1991) 230 Cal.App.3d 1525, 1533, 1536-1538 [282 Cal.Rptr. 80]). Thus, both of these *120 statutes of limitations are subject to what is commonly called the “discovery rule.”

In general, “[c]ivil actions, without exception, can only be commenced within the periods prescribed [by the statutes of limitations], after the cause of action shall have accrued . . . .” (§ 312.) A cause of action ordinarily accrues when, under the substantive law, the wrongful act is done and liability arises, i.e., upon the occurrence of the last fact essential to the cause of action. (Saliter v.

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44 Cal. App. 4th 112, 51 Cal. Rptr. 2d 594, 96 D.A.R. 3805, 96 Daily Journal DAR 3805, 96 Cal. Daily Op. Serv. 2278, 1996 Cal. App. LEXIS 296, Counsel Stack Legal Research, https://law.counselstack.com/opinion/angeles-chemical-co-v-spencer-jones-calctapp-1996.