KFC Western, Inc. v. Meghrig

23 Cal. App. 4th 1167, 28 Cal. Rptr. 2d 676, 94 Daily Journal DAR 3981, 94 Cal. Daily Op. Serv. 2156, 1994 Cal. App. LEXIS 262
CourtCalifornia Court of Appeal
DecidedMarch 25, 1994
DocketB067256
StatusPublished
Cited by29 cases

This text of 23 Cal. App. 4th 1167 (KFC Western, Inc. v. Meghrig) 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
KFC Western, Inc. v. Meghrig, 23 Cal. App. 4th 1167, 28 Cal. Rptr. 2d 676, 94 Daily Journal DAR 3981, 94 Cal. Daily Op. Serv. 2156, 1994 Cal. App. LEXIS 262 (Cal. Ct. App. 1994).

Opinion

*1171 Opinion

KLEIN, P. J.

Plaintiff and appellant KFC Western, Inc. (KFC) appeals a judgment of dismissal following the sustaining of a demurrer without leave to amend interposed by defendants and respondents Alan Meghrig and Margaret Meghrig (the Meghrigs) to KFC’s first amended complaint.

The issues presented include: whether KFC’s cause of action under Health and Safety Code section 25363 1 against the previous owners of its property, which had been the site of a gasoline station, to recover the costs of cleaning up contaminated soil is barred by the petroleum exclusion of section 25317; 2 , 3 and whether KFC may pursue common law claims against the previous owners for continuing nuisance and continuing trespass.

For the reasons discussed, we conclude the cost recovery action under section 25363 is barred because section 25317 excludes refined petroleum. However, with respect to the nuisance and trespass claims, KFC is entitled to amend. The judgment therefore is reversed in part and remanded and otherwise is affirmed.

Factual and Procedural Background

In September 1975, for $152,000 the Meghrigs sold certain real property on Western Avenue in Los Angeles to KFC which operated a Kentucky Fried Chicken franchise on the property. Unbeknownst to KFC at the time of the purchase, the property allegedly has been contaminated by the release of refined petroleum products from the operation of a gasoline station and/or leakage from underground storage tanks on the site. This resulted, inter alia, in elevated levels of lead and benzene in the soil. In October 1988, while improving the property, KFC through its engineer discovered the contaminated soil.

The City of Los Angeles Department of Building and Safety issued a corrective notice ordering all construction at the property to stop pending an analysis of the contaminated soils and the obtaining of a clearance from the *1172 County of Los Angeles Department of Health Services (Health Services) pertaining to cleanup. The assessment and the remedial work were performed in conjunction with Health Services. KFC spent over $211,000 to clean up the site.

KFC maintained the contamination was caused by the Meghrigs’ negligence in operating a gasoline station on the property before they sold it to KFC. KFC requested reimbursement from the Meghrigs for the cost of cleanup. The Meghrigs refused.

On December 9, 1991, KFC filed an environmental cost recovery action under section 25363. 4 KFC’s operative first amended complaint also contained, inter alia, causes of action based on private and public nuisance.

The Meghrigs filed a demurrer to the first amended complaint on the grounds the cost-recovery action was precluded by the petroleum exclusion found in section 25317, and the remaining causes of action were barred by the statute of limitations and other grounds.

The trial court sustained the demurrer without leave to amend as to all causes of action and dismissed the action. This appeal followed.

Contentions

KFC contends: (1) the trial court erred in failing to defer to the Department’s interpretation of the petroleum exclusion; (2) it is entitled to amend to allege a continuing nuisance and a continuing trespass.

Discussion

1. Standard of review.

A demurrer serves to test the sufficiency of a pleading by raising questions of law. (Buford v. State of California (1980) 104 Cal.App.3d 811, 818 [164 Cal.Rptr. 264].) When a demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318 [216 Cal.Rptr. 718, 703 P.2d 58].) The allegations are regarded as true and are liberally construed with a view to attaining substantial justice. (Shaeffer v. State of California (1970) 3 *1173 Cal.App.3d 348, 354 [83 Cal.Rptr. 347]; King v. Central Bank (1977) 18 Cal.3d 840, 843 [135 Cal.Rptr. 771, 558 P.2d 857].)

When a demurrer is sustained without leave to amend, we decide whether there is a reasonable possibility the defect can be cured by amendment. If it can, the trial court abused its discretion and we reverse; if not, there was no abuse of discretion and we affirm. (Blank v. Kirwan, supra, 39 Cal.3d at p. 318.)

2. Cost recovery action barred by statutory petroleum exclusion.

The recent case of Ulvestad v. Chevron U.S.A., Inc. (C.D.Cal. 1993) 818 F.Supp. 292, is factually very similar to the one before us. There, Ulvestad owned property in Santa Ana which was contaminated with gasoline leaked from underground storage tanks. A former owner built a filling station on the property in 1926, and installed four underground storage tanks between 1926 and 1938. In 1953 Signal Oil Company, predecessor of Chevron, U.S.A., Inc., leased the property. Ultimately, title to the property passed to Ulvestad. Thereafter, the service station was dismantled and three of the four underground tanks were extracted. Ulvestad was alerted to the existence of a fourth tank, removed it in 1989, and discovered that gasoline from the tanks had contaminated the soil and groundwater. (Id., at p. 293.)

Ulvestad sued Chevron on various theories. Chevron argued Ulvestad’s causes of action under the Act (§§ 25300-25395) should be dismissed because refined petroleum is excluded from the reach of the Act. Chevron pointed out the Act contains a “petroleum exclusion” that removes petroleum from the Act’s definition of “hazardous substances.” Ulvestad, joined by amicus curiae, the Department (which is also amicus curiae in the instant case), argued the exclusion did not apply to refined petroleum products such as gasoline. (Ulvestad v. Chevron U.S.A., Inc., supra, 818 F.Supp. at p. 293.)

After an independent analysis of the issues, we have concluded the well-reasoned opinion of District Judge Taylor in Ulvestad v. Chevron U.S.A., Inc., supra, 818 F.Supp. at pages 293-297, correctly treats the issues and accordingly adopt it as our own. 5 (See Lugosi v. Universal Pictures (1979) 25 Cal.3d 813, 816 [160 Cal.Rptr. 323, 603 P.2d 425, 10 A.L.R.4th 1150].) The Ulvestad opinion, with appropriate deletions and additions, is as follows: 6

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23 Cal. App. 4th 1167, 28 Cal. Rptr. 2d 676, 94 Daily Journal DAR 3981, 94 Cal. Daily Op. Serv. 2156, 1994 Cal. App. LEXIS 262, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kfc-western-inc-v-meghrig-calctapp-1994.