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Partners Tim Daley and Gary Wollberg Prevail in California Court of Appeal

01.04.2010

In an opinion certified for publication, Gary L. Wollberg and Timothy J. Daley of the firm’s San Diego office obtained a complete defense result in McCoy v. Gustafson, (2009) 180 Cal. App. 4th 56, before the California Sixth Appellate District. The court of appeal decision establishes that an environmental trespass and nuisance claim is subject to a three-year statute of limitations defense unless the plaintiff can present substantial evidence that abatement of the contamination can be achieved at a reasonable cost by reasonable means.

Messrs. Wollberg and Daley represented the defendants and appellants, owners of property in Monterey, California, who were sued for trespass and nuisance by adjoining landowners. Our clients’ property had been used for decades by a previous owner as a laundry. Fuel oil, which had powered boilers used to provide hot water for the laundry, had allegedly leaked over the years into the surrounding soil and migrated to the adjoining property. The owners of the adjoining property first learned of the presence of oil on their property in the 1980’s and attempted to have local governments, or our client’s predecessors, clean up the alleged contamination. Our clients attempted a clean up in the 1990’s. However, the adjoining owners claimed that all clean-up efforts failed, and sued our clients and others for trespass and nuisance in 2006. At trial, plaintiff failed to present any evidence of the scope or cost of efforts that might be required to clean up the alleged oil contamination on their property. The jury returned a special verdict that found our clients liable for trespass and nuisance, but also found it was unknown if the alleged contamination could be abated at a reasonable cost by reasonable means and thus did not award any compensatory damages. The trial court sent the jury back to deliberate on punitive damages. The jury returned a verdict of $500,000 in punitive damages.

Mr. Daley filed a motion for judgment notwithstanding the verdict (“JNOV”), and plaintiff filed a motion for a new trial, arguing that the special verdict form was confusing because it resulted in a award of punitive damages but no compensatory damages. The trial court deemed the defendants motion for JNOV to be a motion for a new trial, and granted a limited new trial and denied the JNOV motion. Both parties appealed.

Reversing the trial court, the court of appeal held the trial court should have entered judgment in favor of the defendants based on the special verdict, because the plaintiff failed to present any substantial evidence that the oil contamination on her property could be abated at a reasonable cost by reasonable means . Accordingly, the oil contamination could only be characterized as a permanent nuisance. The special verdict thus established the statute of limitations defense as plaintiff’s suit was filed far more than three years following the discovery of the oil. For that reason, the appellate court found no basis for reviewing the award of punitive damages, as that award would have been obviated by a properly granted motion. Thus, the appellate court reversed both the trial court’s order granting a new trial and its order denying the JNOV motion, and directed the trial court to enter judgment in our client’s favor, with costs on appeal.

You can see the full text of the opinion here

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