Clover v. Camp Pendleton & Quantico Housing LLC

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 JASON CLOVER, et al., Case No.: 20cv567-LAB (WVG)

12 Plaintiffs, ORDER GRANTING IN PART 13 v. DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT OR, 14 CAMP PENDLETON & ALTERNATIVELY, PARTIAL QUANTICO HOUSING LLC, et al., 15 SUMMARY JUDGMENT [Dkt. 79] Defendants. 16 17 Plaintiffs Jason and Valerie Clover, along with their minor children, J.C. and 18 P.C., by and through their guardian ad litem Roger Holmes (collectively, 19 “Plaintiffs”), are former residents of military housing located on base at Marine 20 Corps Base Camp Pendleton (“Camp Pendleton”). They bring this action against 21 Defendants Camp Pendleton & Quantico Housing LLC (“CPQH”) and LPC 22 Pendleton Quantico Property Management, LP (“LPC”) (collectively, 23 “Defendants”), for injuries stemming from Defendants’ alleged failure to properly 24 maintain or repair Plaintiffs’ residence, resulting in moisture, water intrusion, and 25 mold conditions in their residence. 26 On February 7, 2023, Defendants filed a Motion for Summary Judgment or, 27 in the Alternative, Partial Summary Judgment. (Dkt. 79). Plaintiffs oppose 28 Defendants’ motion. (Dkt. 89). The Court has read all materials in support of and 1 in opposition to the Motion, and rules as follows. 2 I. UNDISPUTED MATERIAL FACTS1 3 Under the Military Housing Privatization Initiative (“MHPI”), branches of the 4 Armed Forces can establish public-private ventures with a private entity to operate 5 and manage their military housing on government land. Pursuant to the MHPI, the 6 United States Navy (“Navy”) entered into an Operating Agreement with Hunt 7 Lincoln Clark Family Communities, LLC, to form Defendant CPQH, to aid and 8 assist the Navy with its military housing operations, including at Camp Pendleton.2 9 Under the terms of the Operating Agreement, CPQH has primary responsibility for 10 managing the military housing it owns. Under its terms, the United States directs 11 the cash flow for the operations phases of the project, and retains budgetary 12 approval and oversight, as well as direct budgeting involvement. 13 On or about August 1, 2001, the Navy entered into a Ground Lease with 14 Defendant CPQH for the South Mesa I neighborhood, including the property 15 located at 296 Tierra Blanca, Oceanside, California (“Property). The Navy retained 16 the right to inspect the Camp Pendleton housing at any time on environmental 17 issues. CPQH was directed by the Operating Agreement to enter a Property 18 Management Agreement (“PMA”) with Defendant LPC relating to the South Mesa 19 I community and the Property. The PMA contains a Management Plan and Mold 20 Management Plan (“the Plans”). The Plans developed a strategy for addressing 21 military housing conditions and maintenance requests, and specifically mold and 22 moisture conditions, in the housing, and outline a general plan, and give certain 23

24 25 1 Pursuant to Federal Rule of Evidence 201, Defendants’ request for judicial notice as to Exhibits A-1, B-1, C-1, and D-1 is GRANTED. (Dkt. 79-2); see Anderson v. 26 Holder, 673 F.3d 1089, 1094 n.1 (9th Cir. 2012) 27 2 Both Defendants CPQH and LPC are affiliates of a company called Liberty Military Housing, formerly known as Lincoln Military Housing (“Lincoln”). (Dkt. 98 28 1 directions and factors to evaluate, based on what is discovered on site, for 2 response to tenant complaints and service orders, including specifically those as 3 to mold and moisture; the Navy set the parameters for the Plans. CPQH has 4 exclusive management and control of the property management business of the 5 company and has full authority to take all actions necessary or appropriate to 6 pursue the business and carry out the company’s purpose of the Company. 7 Plaintiff Jason Clover, a United States Marine, along with his family, were 8 residents on the Property at Camp Pendleton, from on or about June 2014 until on 9 or about June 2019. They filed their initial complaint in San Diego Superior Court 10 on November 22, 2019, asserting ten state law causes of action against 11 Defendants. (Dkt. 1-4). They claim that while living at the Property, they became 12 sick from water intrusion and mold issues and that Defendants didn’t adequately 13 address these issues during the duration of Plaintiffs’ tenancy. Defendants 14 subsequently removed the case to federal court. 15 II. STANDARD OF REVIEW 16 Summary judgment is appropriate under Rule 56(a) where the movant 17 “shows that there is no genuine dispute as to any material fact and the movant is 18 entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). In order to prevail, 19 a party moving for summary judgment must show the absence of a genuine issue 20 of material fact with respect to an essential element of the non-moving party’s 21 claim, or to a defense on which the non-moving party will bear the burden of 22 persuasion at trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once 23 the movant has made this showing, the burden then shifts to the party opposing 24 summary judgment to identify “specific facts showing there is a genuine issue for 25 trial.” Id. at 324. The party opposing summary judgment must then present 26 affirmative evidence from which a jury could return a verdict in that party’s favor. 27 Anderson v. Liberty Lobby, 477 U.S. 242, 257 (1986). 28 On summary judgment, the Court draws all reasonable factual inferences in 1 favor of the non-movant. Id. at 255. “Credibility determinations, the weighing of the 2 evidence, and the drawing of legitimate inferences from the facts are jury functions, 3 not those of a judge.” Id. (citation omitted). “The mere existence of a scintilla of 4 evidence in support of the plaintiff’s position will be insufficient; there must be 5 evidence on which the jury could reasonably find for the plaintiff.” Id. at 242. The 6 Court does not make credibility determinations or weigh conflicting evidence. Id. 7 at 255. Rather, the Court determines whether the record “presents a sufficient 8 disagreement to require submission to a jury or whether it is so one-sided that one 9 party must prevail as a matter of law.” Id. at 251–52. 10 III. ANALYSIS 11 A. Federal Enclave Doctrine 12 Defendants first argue that the Court should grant summary judgment on 13 certain of Plaintiffs’ state law claims under the federal enclave doctrine. This 14 doctrine originates from Article I, Section 8, Clause 17, of the United States 15 Constitution, which “provides that Congress shall have the power to exercise 16 exclusive legislation over all places purchased by the consent of the legislature of 17 the state in which the same shall be.” Stiefel v. Bechtel Corp., 497 F. Supp. 2d 18 1138, 1147 (S.D. Cal. 2007). It permits, with some exceptions, “the continuance of 19 those state laws existing at the time of surrender of sovereignty.” Id. “Only state 20 laws in effect at the time of cession or transfer of jurisdiction, however, can 21 continue in operation. Laws subsequently enacted by the state are inapplicable in 22 the federal enclave unless they come within a reservation of jurisdiction or are 23 adopted by Congress.” Id. (citation omitted). 24 Defendants assert, and Plaintiffs don’t dispute, that Camp Pendleton is a 25 federal enclave, and that the federal government purchased that land from the 26 27 28 1 State of California “no later than December 31, 1942.” Id. at 1147; accord 2 Cooper v. S. Cal. Edison Co., 170 Fed. Appx. 496, 497 (9th Cir. 2006) (citing 3 United States v. Fallbrook Pub. Util. Dist., 110 F. Supp. 767, 771 (S.D. Cal. 1953)). 4 The parties instead dispute whether Camp Pendleton’s federal enclave status 5 even applies here, and whether it bars certain of Plaintiffs’ state law claims that 6 were enacted after the creation of the federal enclave in 1942. 7 Specifically, Plaintiffs argue that, in passing the MHPI, Congress shifted the 8 responsibilities associated with military housing from military branches, such as 9 the Navy, to various private entities, such as Defendants. (Dkt. 89 at 6–7). They 10 explain that the Navy entered into an Operating Agreement with Lincoln to form 11 CPQH, with Lincoln being the “Managing Member” of CPQH, and that such an 12 agreement delegated all management responsibilities and control to Lincoln—not 13 the Navy—thereby rendering Defendants “completely, entirely, and independently 14 responsibly for the management of military housing at Camp Pendleton.” (Id. at 8– 15 9). As such, Plaintiffs argue the “terms of the contracts between the Navy and 16 Defendants . . . are an extension of [ ] oversight authority validly conferred by 17 statute to the Department of Defense and clearly provide that state law applies.” 18 (Id. at 11). 19 Notwithstanding Plaintiffs’ failure to cite any case law in support of this 20 position, their argument fails. In essence, Plaintiffs argue that certain provisions 21 invoking California state law in Defendants’ contracts with the Navy override the 22 application of the federal enclave doctrine because Congress, through the MHPI, 23 empowered the Department of Defense, and by extension the Navy, to manage 24 25 3 Pursuant to Federal Rule of Evidence 201, the Court takes judicial notice on its 26 own of Camp Pendleton’s status as a federal enclave because it “1) is generally 27 known within the trial court’s territorial jurisdiction,” and it “(2) can be accurately and readily determined from sources whose accuracy cannot be reasonably 28 1 and control military housing. But as Defendants point out, “[n]either the language 2 of the [MHPI] nor its legislative history indicate that Congress intended to cede 3 authority in federal enclaves back to the states.” (Dkt. 93 at 4). Indeed, Plaintiffs 4 don’t point to any provision of the MHPI that would indicate otherwise. As the 5 Supreme Court held in Goodyear Atomic Corp. v. Miller, 486 U.S. 174, 180 (1988), 6 “the activities of federal installations are shielded by the Supremacy Clause from 7 direct state regulation unless Congress provides ‘clear and unambiguous’ 8 authorization for such regulation.” This shield likewise extends to “a federally 9 owned facility performing a federal function . . . even though the federal function is 10 carried out by a private contractor.” Id. at 181. That is squarely the case here. 11 Absent clear intent on the part of Congress to surrender the federal government’s 12 sovereignty over Camp Pendleton, the Court rejects Plaintiffs’ argument. See 13 Compton v. Oasis Sys., LLC, 549 F. Supp. 3d 1173, 1183 (S.D. Cal. 2021) 14 (“Consequently, because the federal enclave doctrine applies, and there being no 15 indication that Congress provided clear and ambiguous authorization for California 16 to regulate activities on the Acoustic, the Court finds that Plaintiff’s state law 17 claims . . . are barred.”); Mersnick v. USProtect Corp., No. C-06-03993 RMW, 18 2006 WL 3734396, at *6 (N.D. Cal. Dec. 18, 2006) (“Plaintiff’s argument that a 19 contract between a private party and the federal government is sufficient to bar the 20 application of the Federal Enclave Doctrine is unpersuasive.”). 21 i. Review of Plaintiffs’ Claims 22 Because the federal enclave doctrine applies here, the Court must assess 23 whether any of Plaintiffs’ state law claims were recognized after the acquisition of 24 Camp Pendleton in 1942. Defendants argue that the barred claims include claims 25 for negligent misrepresentation; negligent infliction of emotional distress; breach 26 of implied warranty of habitability; breach of implied covenant of quiet use and 27 enjoyment; rent abatement; and premises liability. Plaintiffs challenge Defendants’ 28 contentions as to their negligent misrepresentation and breach of implied covenant 1 of quiet use and enjoyment claims, arguing that these claims pre-date the creation 2 of the federal enclave in 1942. (Dkt. 89 at 13–15). 3 As to negligent misrepresentation, Plaintiffs argue that “the California 4 legislature generated the cause of action . . . with passage of California Civil Code 5 Section 1710,” which was enacted in 1872. (Id. at 13–14). Defendants appear to 6 concede that section 1710 was first enacted in 1872, but argue that it wasn’t until 7 1954 that the California Supreme Court officially held that scienter is not a required 8 element of this claim, contrary to previous interpretations of the statute. (Dkt. 93 at 9 7 (citing Gagne v. Bertran, 43 Cal. 2d 481, 487 n.4 (1954)). However, Defendants 10 do not cite, and the Court has not found, any authority suggesting that the 11 challenged statute must have been in final form when enacted, or that subsequent 12 alterations to the elements of a claim are not to be considered in determining 13 whether the claim pre-dates or post-dates the creation of the federal enclave. To 14 be sure, it is unclear whether a claim can ever be in its final form, as courts routinely 15 refine their interpretations of statutes and regulations promulgated by the 16 legislature. The Court DENIES Defendants’ motion for summary judgment as to 17 Plaintiffs’ negligent misrepresentation claim. 18 As to Plaintiffs’ claim for breach of the implied covenant of quiet use and 19 enjoyment, Defendants again argue that this claim “did not come into its current 20 form until it was discussed in conjunction with the breach of the implied warranty 21 of habitability in 2001 where they were discussed as ‘overlapping.’” (Dkt. 79-1 at 22 12). Although Defendants acknowledge that a claim for “implied covenant” of “quiet 23 possession” of the leased premises was in effect in 1942 under Civil Code section 24 1927, they argue that the nature of that claim was more like an action to quiet title 25 for a leasehold, which is not what Plaintiffs are claiming here. (Dkt. 79-1 at 12 26 (“Here, Plaintiffs do not contend their breach of the implied covenant of quiet use 27 and enjoyment as a violation of Civil Code section 1927—there is no suggestion 28 of any person trying to lawfully claim the property away from them.”)). But 1 Defendants’ assertions are incorrect. As Plaintiffs point out, section 1927, originally 2 enacted in 1872, “not only applied to cases involving evictions or invasions, but 3 also [to] disturbances of possession.” That’s precisely what Plaintiffs allege here. 4 (Id. at 14). California case law is clear that a claim for breach of the covenant of 5 quiet enjoyment of possession, whether express or implied, existed well before 6 1942. See McDowell v. Hyman, 117 Cal. 67, 70–71 (1897) (“The principal 7 covenant on the part of a landlord, which, if not expressed, is implied, is that his 8 tenant shall have the quiet enjoyment and possession of the premises during the 9 continuance of the term. ‘This covenant, whether expressed or implied, means that 10 the tenant shall not be evicted or disturbed by the lessor’ . . .”) (citation omitted); 11 Agoure v. Lewis, 15 Cal. App. 71, 76 (Cal. Ct. App. 1910) (“In order to constitute a 12 breach of this [implied covenant of quiet enjoyment of possession,] it is held that 13 there must be an eviction of the tenant, actual or constructive. It is not held, 14 however, that in order to constitute an eviction there must be an actual ejectment 15 or ouster of the tenant from the whole premises. It is enough that his possession 16 has been disturbed to his damage by a person entitled to use or possess the 17 property. . . . [A]ny interference with the possession of the tenant by any such 18 person establishes a cause of action in favor of the tenant against the landlord.”); 19 La France v. Kashishian, 204 Cal. 643, 645 (1928) (“[A] lease which is silent as to 20 guaranty of ownership of the leased premises by the lessor, nevertheless carries 21 an implied warranty of the title in him, and consequent quiet possession in the 22 lessee during the term specified in the lease.”); see also Black v. Knight, 176 Cal. 23 722, 725 (1917) (“It is elementary that the covenant for quiet enjoyment goes only 24 to the possession, and that to constitute a violation thereof, . . . ‘there must be 25 some act of molestation, affecting, to his prejudice, the possession of the 26 covenantee.’ . . . [A]ny wrongful act of the landlord which directly results in 27 depriving the tenant of the full beneficial enjoyment of the premises is an eviction.”) 28 (citation omitted). Defendants’ motion for summary judgment as to this claim is 1 DENIED. 2 Plaintiffs next challenge Defendants’ assertion that Stearman damages are 3 unavailable in this case because Stearman v. Centex Homes, 78 Cal. App. 4th 611 4 (2000), the case from which this category of damages derives, post-dates 1942. 5 (Dkt. 79-1 at 13; Dkt. 89 at 16). As both parties acknowledge, Stearman damages 6 are not an independent claim, and Defendants provide no authority for their 7 proposition that the federal enclave doctrine bars categories of damages rather 8 than simply post-dated state law claims. Defendants’ motion for summary 9 judgment as to Stearman damages is DENIED. 10 Finally, with respect to their claims for breach of the implied warranty of 11 habitability and rent abatement, Plaintiffs argue that these claims were specifically 12 contracted for in the operative lease agreement entered into by the parties. 13 (Dkt. 89 at 15). They make no showing, however, that these claims existed in 14 California prior to 1942. Instead, they urge that the California Civil Code should 15 apply because their lease agreement calls for it. But for the reasons explained 16 above, the federal enclave doctrine bars the application of state law to claims not 17 in existence at the time of the federal enclave’s creation. Plaintiffs’ lease 18 agreement neither trumps nor supersedes established federal law. The Court 19 GRANTS summary judgment as to those claims. 20 Likewise, because Plaintiffs offer no argument or authority opposing 21 Defendants’ assertions that their negligent infliction of emotional distress and 22 premises liability claims post-date the creation of Camp Pendleton as a federal 23 enclave, summary judgment is GRANTED as to those claims. 24 B. Supremacy Clause 25 Defendants next advance a theory that the Supremacy Clause bars Plaintiffs’ 26 state law causes of action. Citing Goodyear, Defendants argue that government 27 contractors operating a federally owned facility are shielded from liability under 28 state law. Goodyear Atomic Corp., 486 U.S. at 184. It is unclear to the Court 1 whether and the extent to which this argument differs from their argument 2 concerning the federal enclave doctrine. Nor do Defendants identify any additional 3 state law claims that would fail under this theory beyond those already covered by 4 the federal enclave doctrine. Because this argument is subsumed in the Court’s 5 previous analysis of the federal enclave doctrine, supra Section III.A, the Court 6 rejects it for the same reasons. 7 C. Choice of Law 8 Defendants next argue that a choice-of-law provision in the parties’ lease 9 agreement provides that the parties’ contractual relationship is to be governed 10 exclusively by federal substantive law, with certain exceptions. (Dkt. 79-1 at 13– 11 14). That provision states as follows: 12 36. Choice of Law. Owner and Resident agree that this Lease and the contractual relationship between the parties 13 shall be construed exclusively in accordance with, and 14 shall be exclusively governed by, federal substantive law, except that the following state law shall apply: California 15 Civil Code, Sections 1940–1954.1 (Leasing Land and 16 Dwellings), and Sections 1980–1991 (Disposition of Personal Property Remaining on Premises at Termination 17 of Tenancy), California Code of Civil Procedure Sections 18 1159–1179a (Summary Proceedings for Obtaining Possession of Real Property in Certain Cases), and 19 California state common law interpreting these sections. 20 21 (Dkt. 89-1, Ex. 2, ¶ 36). Defendants contend that California Civil Code sections 22 1940–1954.1, which relate to leasing land and dwellings, are the only exceptions 23 applicable to this case, but “could only have applied here had Plaintiffs brought a 24 breach of lease claim against Defendants but they did not.” (Dkt. 79-1 at 14). 25 Defendants offer no authority for this position, and it’s unclear why Defendants 26 believe this to be a requirement of the Civil Code sections. Plaintiffs respond that 27 that their “claims are largely based upon [ ] code sections [1940–1954.1],” though 28 they cite to paragraphs in their complaint relating only to their claims for 1 negligence, premises liability, and breach of the implied warranty of habitability. 2 (Dkt. 89 at 16). Although their claim for breach of the implied warranty of 3 habitability may indeed be implicated by section 1941.1, their claims for negligence 4 and premises liability do not appear to arise under these Code sections. See 5 Blackburn v. Walmart, Inc., No. EDCV182487DOCSPX, 2019 WL 4570030, at *3 6 (C.D. Cal. Aug. 23, 2019), aff’d, 817 F. App’x 501 (9th Cir. 2020) (citing Cal. Civ. 7 Code § 1714(a)). Thus, it remains only to be considered for purposes of this 8 section whether the choice-of-law provision permits a state law claim for breach of 9 the implied warranty of habitability, despite the fact that this provision is seemingly 10 at odds with the federal enclave doctrine. 11 In the context of federal enclaves, this presents a matter of first impression, 12 and the parties haven’t cited any case law that guides or even implicates this issue. 13 Nevertheless, the Court finds that the claim for breach of the implied warranty of 14 habitability fails here for the same reasons as explained previously, supra 15 Section III.A. Defendants have demonstrated, and Plaintiffs don’t argue otherwise, 16 that this claim was not recognized in California until after the creation of the federal 17 enclave. Neither party has suggested that Congress expressed any intent to cede 18 authority to California with respect to this claim, and permitting the parties to 19 contract around federal law would lead to uncertainty and inconsistency in 20 application of the law. In other words, because Congress has previously decreed 21 which law applies on federal enclaves, the parties have no right to ignore that 22 decree and apply in its place the law of their choosing. Mersnick, 2006 WL 23 3734396, at *6 (“[T]he rationale underlying the exceptions to exclusive federal 24 jurisdiction over federal enclaves does not support the proposition that a contract 25 between the federal government and a private party may alter the exclusivity of 26 federal jurisdiction. Indeed, such a proposition appears to be inconsistent with the 27 underlying policies.”). Applying the federal enclave doctrine, the Court finds that 28 Plaintiffs’ claim for breach of the implied warranty of habitability is barred. 1 D. Derivative Sovereign Immunity 2 Defendants attempt to resurrect their argument in favor of Yearsley-based 3 derivative sovereign immunity, arguing that, given their status as contractors 4 performing at the direction and authorization of the government, they are shielded 5 from liability here. (Dkt. 79-1 at 18). Specifically, Defendants again suggest they 6 were simply acting at the government’s direction in carrying out management 7 functions over the Property, referring to Congress’s delegation of authority to 8 private entities under the MHPI to manage and oversee military housing. (Dkt. 79- 9 1 at 21). They state that they acted promptly and appropriately in responding to 10 complaints and conducting investigations for suspected water intrusion on the 11 Property. (Id. at 22). They also argue their actions “were precisely what they were 12 instructed to do” under the terms of contracts and plans developed with and 13 approved by the Navy, including a Maintenance Plan and Mold Management Plan, 14 and their actions were well within the scope of their authority in managing the 15 Property. (Id. at 21–22). Plaintiffs disagree with Defendants’ characterization of 16 their conduct, arguing that as part of their managerial responsibilities, “Defendants 17 exercise[d] great discretion” in responding to and investigating complaints of 18 moisture and mold, and that Defendants, not the Navy, undertook “day-to-day 19 management, ma[d]e business decisions, and exercise[d] authority to make 20 landlord decisions.” (Dkt. 89 at 20). Defendants’ argument fails for substantially the 21 same reasons the Court cited when they first made it. 22 As the Court’s prior Order on Defendants’ motion to dismiss explained, 23 Yearsley v. W.A. Ross Constr. Co., 309 U.S. 18 (1940), involved a case in which 24 a federal contractor was tasked with carrying out the terms of a federal directive to 25 improve navigation on the Missouri River. The Supreme Court held that the 26 contractor couldn’t be held liable because the work “was all authorized and 27 directed by the Government of the United States.” Id. at 20–21. The opinion noted, 28 however, that agents of the government could be held liable where the “ground of 1 liability [was] either that he exceeded his authority or that it was not validly 2 conferred.” Id. (collecting cases). In other words, contractors can be liable to the 3 extent they fail to act according to government specifications. 4 The Ninth Circuit has held that this derivative immunity is limited to cases 5 where the contractor had no discretion and was following government 6 specifications completely. Cabalce v. Thomas E. Blanchard & Assocs., Inc., 797 7 F.3d 720, 732 (9th Cir. 2015) (citing In re Hanford Nuclear Reservation Litig., 534 8 F.3d 986, 1001 (9th Cir. 2008)). In other words, a contractor is derivatively immune 9 only to the extent it is correctly carrying out its validly-conferred authority and is 10 following government specifications. Yearsley, 309 U.S. at 20–21; Cabalce, 11 797 F.3d at 732. Where the contractor exercises discretion, however, it is not 12 immune. Id. (because defendants designed a plan “without government control or 13 supervision,” they were not entitled to derivative immunity). 14 Defendants point to the Supreme Court’s holding in Campbell-Ewald Co. v. 15 Gomez, 577 U.S. 153 (2016), which they believe expanded immunity to any 16 government contractor acting within its validly-conferred contractual authority. 17 While certiorari was granted in that case to address an issue of mootness, the 18 Court reiterated Yearsley’s holding that a contractor “who simply performed as the 19 Government directed” was entitled to derivative immunity. Id. at 160, 167. But 20 because the contractor unquestionably disobeyed government instructions, it was 21 clear derivative immunity was unavailable. Id. at 168. 22 The parties don’t dispute here that Defendants were acting according to 23 validly-conferred authority from the Government. Instead, Defendants ask the 24 Court to rely on out-of-circuit precedent to find that government contractors are 25 shielded from liability where their work has been authorized and directed by 26 Congress. (Dkt. 79-1 at 20). But as this Court ruled before, and consistent with 27 Ninth Circuit precedent, “derivative immunity is available only when contractors are 28 carrying out government instructions, without exercising any discretion of their 1 own—that is, where their actions are not merely permitted but directed by the 2 government. To the extent claims arise from their own discretionary activity, they 3 are not immune.” (Dkt. 45 at 5). 4 Defendants don’t deny that they exercised some discretion in performing 5 their duties, but contend that none of their actions “went against the Navy’s 6 directives or [were] contrary to the contracts or Plans.” (Dkt. 79-1 at 22). Although 7 Defendants’ management of the property was authorized through the MHPI and 8 carried out with some guidance from the Navy, their actions in responding to 9 Plaintiffs’ complaints of moisture and mold were clearly not directed by the 10 government and involved their own exercise of discretion. For this reason, 11 Defendants may not avail themselves of derivative sovereign immunity. 12 E. Statute of Limitations on Valerie Clover’s Personal Injury Claims 13 Defendants finally argue that Plaintiff Valerie Clover’s personal injury claims 14 are time-barred by either the statute of limitations for personal injuries caused by 15 the wrongful act or neglect of another codified in Code of Civil Procedure section 16 335.1, or the statute of limitations for injuries based on alleged exposure to 17 hazardous materials or toxic substances found in Code of Civil Procedure section 18 340.8. (Dkt. 79-1 at 23). They contend that the statute of limitations started running 19 in at least November 2015, the date she admitted to having come to suspect the 20 Property was “making her family sick.” (Id. at 24). Defendants maintain that “[t]his 21 is after she claimed she commenced having symptoms she attributes to alleged 22 mold at the Property in this case including anger, sinusitis/headaches, and a 23 miscarriage.” (Id. at 25). Because Plaintiff didn’t file her initial complaint in state 24 court until November 2019, four years later, Defendants maintain the Court should 25 grant summary judgment on those claims because they are barred by the 26 applicable statute of limitations. 27 In opposition, Plaintiff argue that the “accrual date of a cause of action is 28 delayed until the plaintiff is aware of their injury and its negligent cause.” (Dkt. 89 1 at 20 (citing Hopkins v. Dow Corning Corp., 33 F.3d 1116 (9th Cir. 1994) (emphasis 2 in original)). She maintains that she and her family were unaware of the cause of 3 their injuries until 2019, despite their diligence in seeking medical help and 4 submitting complaints throughout their tenancy related to suspected mold and 5 water intrusion issues. (Dkt. 89 at 21). She maintains “it was not until the Plaintiffs 6 paid out of pocket for testing in April 2019 that air quality and swab sampling 7 confirmed the presence of toxic mold at the property.” (Id.). Prior to then, “the 8 Clover family had suspicions that their years of illness may have had to do with the 9 home in general, but had no reasonable basis for connecting their illness to mold 10 until confirmed by medical and environmental testing experts.” (Id. (emphasis in 11 original)). 12 California has a two-year statute of limitations for personal injury claims. Cal. 13 Code Civ. P. § 335.1 (requiring that “[a]n action for . . . injury to, or for the death 14 of, an individual caused by the wrongful act or neglect of another” must be brought 15 within two years). However, under California’s statutorily-codified delayed 16 discovery rule for toxic exposure cases, “any civil action for injury or illness based 17 upon exposure to a hazardous material or toxic substance” must be brought within 18 either two years from the date of the injury or two years after the plaintiff becomes, 19 or reasonably should have become, aware of “(1) an injury, (2) the physical cause 20 of the injury, and (3) sufficient facts to put a reasonable person on inquiry notice 21 that the injury was caused or contributed to by the wrongful act of another, 22 whichever occurs later.” Cal. Code Civ. P. § 340.8(b); see also Lopez v. Sony 23 Elecs., Inc., 5 Cal. 5th 627, 633 (2018) (noting that “[t]he Legislature declared that 24 section 340.8 was intended to codify the delayed discovery rule for personal injury 25 and wrongful death cases involving toxic exposure”). 26 While it is uncontested that Plaintiffs began to exhibit symptoms of illness 27 well before they filed their complaint, there is no indication Valerie Clover was 28 aware of the cause of her injury before 2019. See Grano v. Sodexo Mgmt., Inc., 1 No. 3:18-CV-1818-RSH-BLM, 2023 WL 125590, at *31 (S.D. Cal. Jan. 6, 2023) 2 (“While Plaintiffs may have learned at the hospital that they were infected with 3 STEC, there is no evidence in the record demonstrating that Plaintiffs knew the 4 cause of their STEC or were aware of sufficient facts that the STEC was caused 5 or contributed to by the wrongful act of another.”). Nor is there any evidence that 6 the Clover family failed to exercise due diligence in discovering the true cause of 7 their injuries. To the contrary, Plaintiffs attach records demonstrating that they 8 sought medical help for the symptoms they were experiencing, and that it wasn’t 9 until 2019 when they paid out-of-pocket for testing that they discovered the 10 presence of toxic mold in their home. (Dkt. 89 at 21; Dkt. 89-2, Exs. 1–3). That 11 Plaintiff may have suspected that the wrongdoing was somehow attributable to 12 their home is not enough to trigger the statute of limitations here. See Fox v. 13 Ethicon Endo-Surgery, Inc., 35 Cal. 4th 797, 813 (2005) (“[I]f a plaintiff’s 14 reasonable and diligent investigation discloses only one kind of wrongdoing when 15 the injury was actually caused by tortious conduct of a wholly different sort, the 16 discovery rule postpones accrual of the statute of limitations on the newly 17 discovered claim.”). Summary judgment as to Valerie Clover’s personal injury 18 claims is therefore DENIED. 19 IV. CONCLUSION 20 Defendants’ motion for summary judgment as to Plaintiffs’ claims for 21 negligent infliction of emotional distress, breach of the implied warranty of 22 habitability, rent abatement, and premises liability is GRANTED. The Court 23 DENIES summary judgment on Defendants’ arguments as to the remainder of 24 Plaintiffs’ claims. 25 IT IS SO ORDERED. 26 Dated: March 4, 2023 27 Hon. Larry Alan Burns United States District Judge 28